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CONSUL RESTAURANT CORPORATION, UNSECURED CREDITORS ANNOUNCE JOINT PLAN OF REORGANIZATION

CONSUL RESTAURANT CORPORATION, UNSECURED CREDITORS ANNOUNCE JOINT PLAN
 OF REORGANIZATION
 Company Reports Completion of Sale of Canadian Operations
 MINNEAPOLIS, May 4 /PRNewswire/ -- Consul Restaurant Corporation (NASDAQ: CNSLQ) and its statutory committee of unsecured creditors today announced that a joint plan of reorganization in its Chapter 11 case was filed with the U.S. Bankruptcy Court on Friday, May 1. In addition, the company reported completion of the previously announced sale of its Canadian operations.
 "Following months of negotiations with the unsecured creditors committee, a joint plan of reorganization has been developed that keeps Consul's valuable core of U.S. restaurants intact and provides for their continued operation over time for the benefit of creditors and equity interest holders," said William D. Etter, chief executive officer.
 "This plan achieves our key objectives of providing not only a high level of recovery for our creditors, but also the potential for our shareholders to realize value, depending on the post-confirmation market value of Consul Restaurant Corporation common stock," said Etter. "This has been a challenging period for the company, and I am extremely pleased with our overall store operating results during this time. Our employees are exceptionally committed and loyal, and this has enabled us to formulate this plan with the creditors. All of us are excited about the newly restructured Consul with 25 Chi-Chi's dinnerhouses and three el Pronto! quick-service units, all located in our strong Midwest market."
 If the joint plan is confirmed by the court, the company would distribute to its unsecured creditors $3 million in cash and a note for $1.5 million. In addition, after cancellation of all outstanding shares of Consul preferred stock and common stock, unsecured creditors would received 4.3 million shares of new Consul Restaurant Corporation common stock and a contingent grant of 263,000 shares of the new common stock. Under the plan, present shareholders would not initially receive shares of the new common stock, but would receive a contingent grant of 494,000 shares of the new common stock and an additional 494,000 warrants. All contingent grants of stock are subject to the trading value of the new common stock and expire on Dec. 31, 1993. The warrants expire after three years.
 "I am extremely gratified that we could formulate a Chapter 11 plan between our constituency and management of Consul that will fairly allocate the value of Consul Restaurant Corporation," stated unsecured creditors committee chairman Donald Langsdorf of J.P. Foodservice, Inc. Langsdorf emphasized that the joint plan was the result of a "hard- fought compromise" among parties composed of disparate interests.
 "The plan improves the company, saves jobs and allocates value fairly," added Langsdorf.
 Chi-Chi's, Inc., the company's franchisor, has filed a competing plan of reorganization. The Chi-Chi's plan provides for the liquidation of Consul and the sale of its most valuable assets to Chi-Chi's. Cash generated by the liquidation, which Consul estimates would total $10 million after payment of priority and administrative claims, would be paid to unsecured creditors. Present shareholders would receive nothing under the Chi-Chi's plan.
 Consul also announced it had completed the sale of its remaining Canadian operations to Heartland Restaurants, Ltd., of Winnipeg, Manitoba, for $4.8 million (U.S. dollars). Net of repayment of debt, closing costs and accrued expenses, the sale generated cash proceeds of approximately $2.4 million and notes for $1.2 million due within 12 months.
 -0- 5/4/92
 /CONTACT: Robert A. Lamp of Consul Restaurant Corporation, 612-851-3388; or John Beardsley of Padilla Speer Beardsley, 612-871-8877, or in New York, 212-752-8338, for Consul/
 (CNSLQ) CO: Consul Restaurant Corporation ST: Minnesota IN: LEI SU:


KH -- MN006 -- 6010 05/04/92 11:57 EDT
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Publication:PR Newswire
Date:May 4, 1992
Words:614
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