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CARTER HAWLEY HALE INC., PRUDENTIAL INSURANCE COMPANY REACH AGREEMENT

CARTER HAWLEY HALE INC., PRUDENTIAL INSURANCE COMPANY REACH AGREEMENT
 LOS ANGELES, Jan. 3 /PRNewswire/ -- Carter Hawley Hale Inc. (NYSE: CHH) announced today that it had reached agreement with The Prudential Insurance Company of America, the holder of approximately $344 million (excluding post-petition interest, fees, and other accruals) principal amount of Carter Hawley Hale mortgage debt.
 The agreement, which is subject to bankruptcy court approval, contemplates that if Carter Hawley Hale should emerge from bankruptcy prior to expiration of the agreement, the maturity of Prudential's loan will be extended for approximately five years to December 2002 or, if earlier, the 10th anniversary of CHH's emergence from Chapter 11, and in accordance with the payment provisions described below, Prudential will be paid in full its principal and accrued interest.
 Among other things, principal payments will commence on the fifth anniversary of CHH's emergence from bankruptcy. In addition, certain interest which accrued from the date of the filing through no later than May 31, 1992 (estimated at $55 million) will be capitalized in a 9 percent note with principal payments commencing on that fifth anniversary and continuing over the remaining life of the loan. Further, a portion of the interest accruing on the loan for the first two years following the effectiveness of a plan of reorganization, which would otherwise be payable in cash, will be deferred.
 Prudential has agreed, subject to certain conditions, to vote for a plan proposed by the company containing the foregoing and certain other terms. The agreement also provides that the parties will suspend all existing litigation between them and affects minor amendments to Prudential's existing loan agreements with Carter Hawley Hale.
 Carter Hawley Hale also agreed to release Prudential from all potential claims arising from Carter Hawley Hale's 1987 Restructuring, including any potential fraudulent conveyance claims. Such release will be effective only upon both approval of Carter Hawley Hale's Special Committee, established to investigate the 1987 Restructuring, and Carter Hawley Hale's emergence from Chapter 11.
 The agreement will generally terminate on May 15, 1993, subject to earlier termination under certain circumstances. Zell/Chilmark Fund, L.P., and a subsidiary are together the company's largest unsecured creditor, and are parties to this agreement.
 Carter Hawley Hale Stores Inc. operates 89 stores under the names of The Broadway, The Broadway Southwest, Emporium and Weinstocks.
 -0- 1/3/92
 /CONTACT: Bill Dombrowski, VP corporate affairs of Carter Hawley Hale, 213-239-6522/
 (CHH) CO: Carter Hawley Hale Stores Inc. ST: California IN: REA SU:


SE-EH -- LA005 -- 6374 01/03/92 08:32 EST
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Publication:PR Newswire
Date:Jan 3, 1992
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