Printer Friendly

CHEROKEE INC. ANNOUNCES CONFIRMATION OF PRE-PACKAGED PLAN OF REORGANIZATION AND EMERGENCE FROM CHAPTER 11

 SUNLAND, Calif., June 1 /PRNewswire/ -- Cherokee Inc. (NASDAQ: CHKE) announced that on May 28, 1993, the Bankruptcy Court for the District of Delaware confirmed the joint "pre-packaged" plan of reorganization filed by Cherokee Inc. and its wholly owned subsidiary, The Cherokee Group, and that Cherokee's financial restructuring was completed on June 1, 1993, with the merger of The Cherokee Group into Cherokee Inc. As a result of the restructuring, Cherokee's indebtedness and preferred stock obligations have been reduced by approximately $100,000,000 and its annual fixed charges (interest and preferred dividends) have been reduced by approximately $14,000,000.
 Robert Margolis, the chief executive officer of Cherokee Inc., said: "We are delighted that we were able to complete our financial restructuring so quickly and that it had no negative impact on our customers. We are also very pleased that our old shareholders continue to have an equity interest in the restructured Cherokee and will be able to participate in Cherokee's future."
 Cary Cooper, Cherokee Inc.'s chief financial officer, stated that: "Throughout the restructuring process we said that our trade creditors would not be adversely affected. We are proud to say that we were correct; all of our trade creditors were paid in the ordinary course of business without any impairment or delay."
 As a result of the restructuring, the holders of $105,250,000 principal amount of Senior Subordinated Reset Notes due 1999 of The Cherokee Group will receive $52,500,000 of new 11 percent Senior Subordinated Notes due 1999 of Cherokee Inc. (the "New Notes") and 3,275,000 shares, or 65.5 percent of the new Cherokee Inc.'s $.01 par value Common Stock (the "New Common Stock"); the holders of The Cherokee Group Preferred Stock will receive $600,000 in cash; the holders of the $31,225,000 principal amount of Senior Subordinated Debentures due 2001 of Cherokee Inc. will receive $10,000,000 of New Notes, 575,000 shares, or 11.5 percent of the New Common Stock, and warrants (issued in three series, the "Warrants") to purchase on a fully diluted basis 4 percent of the New Common Stock; holders of Cherokee Inc. Preferred Stock will receive 500,000 shares, or 10 percent of the New Common Stock; holders of the Old Cherokee Inc. Common Stock and Class B Common Stock will receive 400,000 shares, or 8 percent of the New Common Stock, and Warrants to purchase on a fully diluted basis 18 percent of the New Common Stock; and management of Cherokee Inc. will receive 250,000 shares, or 5 percent of the New Common Stock, and Warrants to purchase on a fully diluted basis 18 percent of the New Common Stock.
 Trading in the New Common Stock, the Series A, B and C Warrants and the New Notes will begin on a when issued basis on June 2, 1993. The last day of trading for the Old Cherokee Inc. Common Stock will be June 1, 1993. The New Common Stock and the Series A, B and C Warrants will trade on the NASDAQ Small Cap System.
 Cherokee is a designer, manufacturer and marketer of casual apparel and footwear under the Cherokee brand name and also licenses its brand name to 27 domestic and international licensees for a variety of apparel, footwear, accessories and other products.
 -0- 6/1/93
 /CONTACT: Cary Cooper, CFO of Cherokee, 818-951-1002, ext. 200/
 (CHKE)


CO: Cherokee Inc.; The Cherokee Group ST: California IN: TEX SU: BCY

LS-JL -- LA002 -- 3794 06/01/93 09:01 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jun 1, 1993
Words:591
Previous Article:DUAL AIR BAGS ON MOST '94 FORD CARS
Next Article:JB'S RESTAURANTS INC. ANNOUNCES RESIGNATION OF PRESIDENT
Topics:


Related Articles
CHEROKEE ANNOUNCES EXTENSION OF BANK AGREEMENT AND CREDITOR'S APPROVAL AND THE FILING OF PRE-PACKAGED PLAN UNDER CHAPTER 11
CHEROKEE'S PREPACKAGED PLAN BECOMES EFFECTIVE
CHEROKEE INC. ANNOUNCES CONFIRMATION OF PRE-PACKAGED PLAN OF REORGANIZATION
MERRY-GO-ROUND ENTERPRISES, ALONG WITH ITS CREDITORS' AND EQUITY COMMITTEES, FILES JOINT PLAN OF REORGANIZATION
COURT CONFIRMS GANTOS' PLAN OF REORGANIZATION AFTER CREDITORS VOTE OVERWHELMINGLY IN FAVOR
Edison Brothers Moves Closer to Emergence From Chapter 11; Agreement Will Smooth Progress Toward Emergence
Edison Brothers' Stock Stops Trading; NYSE Action Does Not Affect Chapter 11 Process
Edison Brothers' Chief Executive To Step Down After Emergence From Chapter 11
Salant's Restructuring Plan is Confirmed by Court - Company Expects to Emerge from Chapter 11 by April 30, 1999 -.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters