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/C O R R E C T I O N -- FIRST CAPITAL CREDITORS COMMITTEE/

 /C O R R E C T I O N -- FIRST CAPITAL CREDITORS COMMITTEE/
 In LA021, "First Capital Creditors Committee Asks Termination of Shearson's Reorganization Plan Exclusivity," moved earlier today, the first sentence should read "The following is being issued by First Capital Creditors Committee" instead of "First Capital Holding Corp." as originally transmitted. Furthermore, the contact Stanley Rubenstein is of the First Capital Creditors Committee and Berkhemer Kline Golin/Harris represents the First Capital Creditors Committee, not "First Capital Holdings Corp." as originally transmitted. A corrected version of the release follows.
 FIRST CAPITAL CREDITORS COMMITTEE ASKS TERMINATION
 OF SHEARSON'S REORGANIZATION PLAN EXCLUSIVITY
 Court Filing Charges Self-Serving Negotiations and Collusion
 Against Shearson Lehman Brothers and Citibank
 LOS ANGELES, Feb. 24 /PRNewswire/ -- The following is being issued by First Capital Creditors Committee:
 Charging Shearson Lehman Brothers Holdings Inc. and Citibank with "self-serving negotiations," the Official Creditors Committee with claims in the First Capital Holding Corp. (NYSE: FCH) bankruptcy have filed a request in U.S. Bankruptcy Court in Los Angeles for authority to offer an alternative reorganization plan which will be more beneficial to all policy holders and creditors. The filing charges that the current plan proposal was intentionally designed to serve the exclusive interests of Shearson and Citibank while ignoring the claims of all other involved creditors. The filing by the Official Creditors Committee requests the termination of the debtor's exclusive right to seek acceptance of the recently unveiled reorganization plan.
 On Feb. 11, U.S. Bankruptcy Court Judge Samuel Bufford granted the Official Creditors Committee's request for authority to file a lawsuit against Shearson and certain of the debtors' officers and directors for breach of fiduciary duty, waste of corporate assets and negligence. In addition, investigations conducted by the committee and a court- appointed examiner have identified possible breaches of fiduciary duty by Citibank in its role as "trusted advisor" to the debtor.
 According to the filing, the plan submitted through the debtors by Shearson Lehman Brothers, the controlling shareholder, and Citibank, the largest senior creditor, "... is not a plan of reorganization at all, but is so incomplete and contingent as to constitute merely an 'agreement to agree.'"
 The filing was made on behalf of the official committee of creditors of First Capital Holding Corp. and its affiliates which was appointed by the Office of the U.S. Trustee last May. The committee includes representatives of various creditor constituencies including Dean Witter, the State Bank of Australia, and Mitsui Manufacturers Bank, in addition to other investors.
 "Terminating the debtors' exclusive right to offer a plan of reorganization will open the way for an alternative plan which will provide greater potential returns to both policy holders and all creditors. We believe that it is feasible to propose a more comprehensive plan which will provide greater returns to all of the debtors' creditors and preserve the claims against Shearson and Citibank which are released under the current proposed plan," said Hank Knowlton, co-chairman of the Official Creditors Committee.
 "The committee firmly believes that a far better proposal for both policy holders and creditors can be achieved than the deal which has been presented to the California Department of Insurance and the U.S. Bankruptcy Court. Shearson and Citibank cut a 'sweetheart deal' among themselves to avoid lawsuits from policy holders and creditors. In doing so, they have proposed a plan that protects their own interests and ignores the legitimate claims of creditors. The Official Creditors Committee believes it can present a program that is truly beneficial to all interested parties without releasing Shearson and Citibank from liability," said Dean Ziehl of Pachulski, Stang & Ziehl, legal counsel to the Official Creditors Committee.
 "Shearson and Citibank held private discussions to establish a plan which protected them while completely disregarding the interests of the other creditors. There was clearly collusion to negotiate a proposal which was to their sole benefit and then proposed under the guise of a debtors' plan," said Ziehl.
 According to the filing, "Given the goals of Shearson and Citibank, and their total disdain for involving others in the plan process, it is clear that further extending exclusivity will not have any beneficial effect and will certainly not promote a consensual plan.
 "Termination of exclusivity will allow the committee to promote a plan which maximizes values for all creditors and preserves valuable claims, i.e., the plan the debtors would have proposed were they not merely puppets of Shearson."
 On May 10, 1991, California Insurance Commissioner John Garamendi issued an order prohibiting First Capital Life from writing any new policies or making payments to its parent company, First Capital Holdings. The order also forced a moratorium on policy loans and cash surrenders. Four days later, the commissioner placed the insurer in conservation. As of Dec. 31, 1990, the company had 190,000 life insurance policyholders, 60,000 annuitants and assets of $4 billion.
 Of Feb. 4, 1992, Shearson Lehman Brothers Holdings Inc. announced a plan allegedly designed to restore First Capital Life Insurance to financial health.
 "Our committee has been in contact with representatives of John Garamendi, and we look forward to working with him and his office to create the best possible program for all involved," said Knowlton. "As Mr. Garamendi stated when the Shearson reorganization plan was announced, 'If membership has its privileges, then ownership has its responsibilities.' As the Official Creditors Committee, we intend to make sure that the commissioner's words are heeded and recognized."
 -0- 2/24/92 C LA021
 /CONTACT: Stanley Rubenstein of First Capital Creditors Committee, 212-297-6108; or Richard Kline or Sean Fitzgerald, 213-623-4200, of Berkhemer Kline Golin/Harris, for First Capital Creditors Committee/
 (FCH) CO: First Capital Creditors Committee; First Capital Holding Corp. ST: California IN: INS SU: BCY


AL-CH -- LA021X -- 2110 02/24/92 18:25 EST
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Date:Feb 24, 1992
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