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AMES FILES PLAN OF REORGANIZATION

 AMES FILES PLAN OF REORGANIZATION
 ROCKY HILL, Conn., Jan. 13 /PRNewswire/ -- Ames Department Stores,


Inc. announced today that it has filed a plan of reorganization and a disclosure statement with the U.S. Bankruptcy Court for the Southern District of New York. Ames expects that the plan and disclosure statement will provide the foundation for additional discussions with its creditor groups.
 The plan filed today provides for the payment of $352.5 million of cash (including $52.5 million conditionally distributed in June 1990 to the prepetition bank lending group) and the distribution of all of the common stock of a new reorganized Ames to creditors to settle approximately $1.6 billion of total estimated claims against the company as of the April 25, 1990, bankruptcy filing date. Although virtually all of the 371 stores Ames currently operates are projected to be profitable in the fiscal year beginning on Jan. 27, 1992, consummation of the company's plan of reorganization may require the closing of some profitable stores, at the request of creditors, in order to generate sufficient cash for the contemplated distribution to creditors.
 The plan of reorganization is contingent upon replacing the company's current $250 million debtor-in-possession revolving credit facility, led by Chemical Bank as agent, with a new seasonal working capital facility. Because the company's size has been reduced, Ames is seeking a working capital facility in the range of $200 million.
 The plan is an "all equity" plan in which no new debt will be issued. Following consummation, the reorganized company will have only reinstated debt and tax notes on its books in an amount of approximately $60 million.
 The plan is premised and conditioned upon the substantive consolidation of Ames and its subsidiaries. As a result, most prepetition creditors, including the prepetition bank lending group, will share equally in the distribution. The plan will also give effect to the contractual subordination rights of creditors. The plan classifies most prepetition creditors into three groups: senior creditors, including the prepetition bank lending group, who will receive $191.6 million in cash and 47.1 percent of the common stock of the new reorganized Ames; general unsecured creditors, who will receive $160.9 million and 45.7 percent of the common stock of the new reorganized Ames; and the bondholders, who will receive 7.2 percent of the common stock of the new reorganized Ames.
 Based on the estimated equity value at consummation and the cash distribution as disclosed, recovery rates by major classification of creditor are anticipated to be approximately 64 percent for senior creditors, approximately 39 percent for general unsecured creditors, and approximately 5 percent for bondholders. The plan does not contemplate any distributions to the company's existing preferred or common stockholders.
 Stephen L. Pistner, Ames' chairman and chief executive officer, said, "The filing of our plan of reorganization is a significant step towards our emergence from Chapter 11. During the past 20 months, the management team put in place after the Chapter 11 filing has made continued progress in improving the company's operating performance. We view today's filing as a solid foundation for further discussions with our creditors."
 The company noted that the plan of reorganization cannot become effective until it is confirmed by the bankruptcy court. Such confirmation will result following the solicitation of votes from creditors pursuant to a court-approved disclosure statement. Until the disclosure statement is approved by the court, votes on the plan cannot be solicited. There can be no assurance that the plan of reorganization will be approved, nor can the timing of any approval be predicted. Accordingly, Ames cannot speculate when it will emerge from Chapter 11.
 Ames intends to file its five-year business plan on Form 8-K with the Securities and Exchange Commission later this week.
 Ames, which filed for protection under Chapter 11 of the U.S. Bankruptcy Code in April 1990, operates 371 discount department stores in 15 Northeastern states.
 -0- 1/13/92
 /NOTE TO EDITORS: A copy of the plan of reorganization filed today by Ames Department Stores Inc., is on file with the U.S. Bankruptcy for the Southern District of New York. Copies of the POR filing -- along with the related disclosure statement also filed today -- will be available to interested parties through Capital Printing, 212-735-3456. You will need to make your own arrangements for this service./
 /CONTACT: Doug Ewing of Ames, 203-257-2600, or Andrea Priest or Joele Frank of Adams & Rinehart, 212-557-0100, for Ames/
 (ADD) CO: Ames Department Stores, Inc. ST: Connecticut IN: REA SU: RCN


CK -- NY059 -- 9135 01/13/92 13:32 EST
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Date:Jan 13, 1992
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