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COMPUADD ANNOUNCES AGREEMENT WITH CREDITORS; ACCORD PAVES WAY FOR CHAPTER 11 EMERGENCE IN NOVEMBER

 AUSTIN, Texas, Oct. 7 /PRNewswire/ -- CompuAdd Computer Corporation has reached an agreement with its major creditors that sets the stage for the PC maker to emerge from Chapter 11 protection next month.
 The agreement on a plan to reorganize the company was reached shortly before the company's disclosure statement hearing yesterday in U.S. Bankruptcy Court. Creditors still must formally vote upon the plan prior to a confirmation hearing, the final step in bankruptcy proceedings. CompuAdd's request for an expedited confirmation hearing on Nov. 4 also was granted yesterday by Judge Frank Monroe.
 "We're very pleased to have a negotiated agreement with our major creditors after only 15 weeks of Chapter 11 protection," said CompuAdd President Rick Krause. "We anticipate no surprises as the creditor ballots are counted, and the prospect of moving forward with a clean slate next month is good news for our creditors, suppliers, employees and customers."
 Carl Carlson, an assistant vice president of Mitsubishi Electronics and chairman of CompuAdd's unsecured creditors' committee, said, "The committee believes that CompuAdd's plan takes the value available and distributes it fairly to all parties."
 Details of the plan include:
 -- Secured creditors will be paid in full and unsecured creditors will receive 75 percent of the reorganized company's stock.
 -- Bill Hayden, CompuAdd's founder and chief executive officer, will continue as CEO with a 20 percent stake in the company.
 -- The remaining 5 percent of the stock will be reserved for issuance to management and employees.
 Although most of the company's stock would be turned over to unsecured creditors under the plan of reorganization, the company is continuing to negotiate with a half dozen prospective buyers.
 CompuAdd was founded in 1982 and became a pioneer in the direct marketing of PCs and related products. Sales grew to more than $500 million a year via a combination of direct and retail sales.
 Earlier this year, CompuAdd closed its national chain of retail stores in a strategic shift to focus solely on selling direct. The withdrawal from the retail market resulted in landlord claims and other liabilities that could not be resolved out of court, and on June 22 the company filed a voluntary Chapter 11 petition to protect its core direct marketing business.
 -0- 10/7/93
 /CONTACT: John Q. Pope of CompuAdd Computer Corporation, 512-250-2000/


CO: CompuAdd Computer Corporation ST: Texas IN: CPR SU:

MP -- NY040 -- 9728 10/07/93 11:26 EDT
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Publication:PR Newswire
Date:Oct 7, 1993
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