by Calculated Risk on 9/14/2007 04:07:00 PM

Some background: back in June, Finish Line agreed to acquire Genesco for $1.5 Billion. See: Finish Line to acquire Genesco for $1.5 billion in cash

From Finish Line: Finish Line Receives Letters from UBS Regarding Genesco Transaction (hat tip Brian)

In its September 11, 2007 letter, UBS states, among other things,

"We hereby notify you that we reserve all rights with respect to our obligation to complete the financings as outlined under the commitment letter. While we will continue to pursue this matter in good faith, we are extremely concerned about the apparent deteriorating financial position of [Genesco]. We are continuing to actively monitor this situation, and look forward to your continued cooperation."

In reviewing its concerns regarding Genesco's financial performance, UBS states, among other things, in its September 13, 2007 letter that:

"[O]ur agreement to perform under the Commitment Letter may be terminated if a Material Adverse Effect has occurred with respect to Genesco. As of today, we are not yet satisfied that Genesco has not experienced a Material Adverse Effect."

This is one way to avoid a pier loan.