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CARDINAL OPERATING TRUSTEE SUBMITS PLAN OF REORGANIZATION

 CARDINAL OPERATING TRUSTEE SUBMITS PLAN OF REORGANIZATION
 COLUMBUS, Ohio, Dec. 12 /PRNewswire/ -- Cardinal Industries' operating trustee Jay Alix today submitted a preliminary draft of his Plan of Reorganization to the company's creditors' committee, beginning the final phase of one of the nation's most complex bankruptcy cases.
 The trustee-sponsored plan calls for Cardinal to emerge from Chapter 11 bankruptcy protection as a general partner for its limited partnerships and property manager for the majority of its apartment complexes. Other specific details will not be available until the plan is filed with the U.S. Bankruptcy Court, which is expected to take place in early 1992.
 Before the plan is submitted to the court, it will be reviewed and analyzed by Cardinal's creditors' committee, a group comprised of and representing the interests of unsecured claimants in the case, including trade creditors, limited partners, banks and note holders. Once reviewed by the creditors' committee and approved by the bankruptcy court -- either in its present form or with changes -- copies of the plan and disclosure statement will be mailed to each class of claimants in the Cardinal case, who then will vote on whether to approve the plan.
 Alix said Cardinal should emerge from bankruptcy reorganization sometime during the first half of 1992.
 "Submission of the Plan of Reorganization to the creditors' committee is a significant step toward resolving this case," said Alix, who was appointed by U.S. Trustee Conrad Morgenstern and approved by Judge Barbara Sellers to assume control of the company nearly two years ago. "From the beginning, our first priority has been to secure the highest possible return for all parties affected by Cardinal's bankruptcy. I believe our plan meets that goal."
 Leon Friedberg, of the Ohio law firm Benesch, Friedlander, Coplan & Aronoff, provides legal counsel to the creditors' committee. Friedberg agreed the submission of Alix's draft to the committee is noteworthy.
 "The committee is pleased with this very important and crucial step," Friedberg said. "The draft, although not in its final form, is a significant milestone. We continue to work actively with the trustee on the plan and disclosure statement to maximize a timely return of value to creditors."
 The more than two-and-a-half-year-old Cardinal bankruptcy is one of the nation's largest and most complex, involving the restructuring of more than $1.8 billion in mortgage debt. It was considered so complex that in October 1990, U.S. Bankruptcy Court Judge Sellers approved Alix's motion for "substantive consolidation," a rarely invoked remedy, which, for bankruptcy purposes, merged the assets and liabilities of Cardinal Industries and all but two of its 33 subsidiaries.
 Not included in the substantive consolidation were Cardinal's then- more than 800 affiliated limited partnerships. Currently, there are approximately 250 Cardinal partnership Chapter 11 cases pending, 158 of which are syndicated and the remainder for partnerships owned by Cardinal. Alix estimated that all of the affiliated bankruptcies should be resolved within a year from confirmation of the Cardinal plan.
 Among those affected by the bankruptcy are 10,000 limited partners, 275 financial institutions, about 400 employees of the corporation, thousands of employees of Cardinal properties, thousands of unsecured creditors and the more than 700 properties located in 20 states east of the Mississippi.
 Before filing for court-supervised reorganization in May 1989, Cardinal Industries was the nation's largest producer of modular homes and the second-largest residential builder and apartment developer. It was general partner of more than 1,000 limited partnerships, which owned 1,000 apartment complexes, Knights Inn and Arborgate Inn motels and retirement villages, estimated to have been worth about $2 billion.
 -0- 12/12/91
 /CONTACT: Mike Chapp or Don Durocher of Durocher & Company, 313-259-7414, for Cardinal Industries, Inc./ CO: Cardinal Industries, Inc. ST: Ohio IN: LEI CST SU: RCN BCY


SM -- DE015 -- 2008 12/12/91 13:49 EST
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Publication:PR Newswire
Date:Dec 12, 1991
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