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CARDINAL EMERGES FROM BANKRUPTCY WITH NEW NAME, NEW DIRECTION

 CARDINAL EMERGES FROM BANKRUPTCY WITH NEW NAME, NEW DIRECTION
 COLUMBUS, Ohio, Sept. 15 /PRNewswire/ -- Cardinal Industries, Inc. officially has emerged from its 39-month-long Chapter 11 bankruptcy reorganization as a publicly held company operating under a new name, new leadership and a new business focus. Its emergence completes one of the most complex corporate turnarounds in United States bankruptcy history.
 The restructured company starts fresh under the direction of Frank McDowell, who assumes office as its new president and chief executive officer, and a new name, Cardinal Realty Services, Inc., reflecting its shift from modular housing manufacturing to real estate-related services.
 Key to Cardinal's emergence is a $39.8 million loan agreement completed late Monday with The Huntington National Bank. The agreement -- which consists of a $14.5 million term loan, a $22 million revolving line of credit and two other loans totaling $3.3 million -- resolves all previous disputes and will be Cardinal's primary source of working capital.
 "Completion of this loan commitment renews and solidifies the long working relationship that Cardinal and the Huntington have enjoyed through the years," McDowell said. "The Huntington has been extremely cooperative and helpful throughout Cardinal's lengthy reorganization process.
 "We're now looking forward to building on the mutual respect we've developed, and we anticipate a continued prosperous association. A positive relationship with a strong, progressive bank is crucial to Cardinal's future success. I could not be more pleased with the choice of the Huntington."
 As of the emergence, McDowell officially takes the reins from Operating Trustee Jay Alix, who directed the company's reorganization since his court appointment in January 1990. Joining McDowell in running the company are six senior managers, five of whom were appointed by Alix during the reorganization.
 McDowell reports to a new 11-member board of directors. He is joined on the board by new Chief Financial Officer Michael Carbone and Vice President of Finance Robert E. Pausch, and eight outside directors, four of whom are former members or advisers of the Creditors' Committee.
 McDowell said the name change is indicative of the post-emergence blending of old and new. "Including 'realty services' in our name demonstrates our new focus on general partner and property management services," he said. "Keeping the Cardinal identity recognizes the company's long history before the bankruptcy case, and sets a benchmark for our future accomplishments."
 Cardinal's emergence follows bankruptcy court confirmation late last month of the Alix-sponsored plan of reorganization, which was one of the largest trustee-sponsored plans of reorganization without third-party equity financing. Cardinal's creditors now become shareholders owning most of the new company shares to be traded in the over-the-counter market.
 Cardinal Realty Services begins life after reorganization as general or co-general partner of 634 apartment complexes, motels and retirement villages. Of these, Cardinal has assumed partnership agreements for a core group of 325 limited partnerships owning properties with about 21,000 rental units. The company has an additional six months to assume or reject partnership agreements of the remaining apartment complexes, motels and retirement villages.
 In addition to its partnership equity interests, Cardinal also will be property manager at the apartment complexes, which are located primarily throughout the Midwest and Southeast United States. Depending on the number of additional properties stabilized, Cardinal could rank among the nation's 15 largest apartment management companies.
 Cardinal, through its 16 active subsidiaries, also will offer numerous services to the partnerships, such as debt restructuring, tax appeals and mortgage servicing, as well as parts sales and renters' services to maintain the apartment communities.
 Still pending are the reorganizations of about 250 affiliated limited partnership Chapter 11 cases. The interrelated cases have involved the restructuring of more than $1.8 million in secured mortgage debt held by about 230 financial institutions and the disallowance or settlement of more than $2.5 billion in claims in the Cardinal corporate case.
 Prior to its bankruptcy, Cardinal was the nation's largest modular housing manufacturer and the second-largest apartment developer. The company developed more than 1,000 properties in all.
 About 10,000 limited partners, 3,000 corporate and 9,000 affiliated property employees and thousands of creditors were affected by the Cardinal bankruptcy. Cardinal now employs about 300 corporate employees, based primarily at its Columbus headquarters. Another 2,600 are employed by the affiliated partnerships at the property level. About 9,000 limited partners hold interests in its syndicated property partnerships.
 -0- 9/15/92
 /CONTACT: Don Durocher or Mike Chapp of Durocher & Company, 313-259-7414, for Cardinal Realty Services, Inc./ CO: Cardinal Industries, Inc.; Cardinal Realty Services, Inc. ST: Ohio IN: CST LEI SU: RCN BCY


SB-ML -- DE007 -- 9542 09/15/92 10:35 EDT
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Publication:PR Newswire
Date:Sep 15, 1992
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