Fingermatrix Chapter 11 Trustee files Plan of Reorganization.
The Plan is supported by the Creditors' Committee and the Equity Holders' Committee, among other constituents, Hirsch said.
Under the new corporate structure, the company's present approximate 3,300 common shareholders will retain 50 percent of the equity in the reorganized company, although all of the company's preferred and common stock currently outstanding will be canceled.
The remainder of the new equity will go to various classes of creditors, lenders and investors who have or will have provided capital for the emerging company, and to an employee investment (ESOP) plan, Hirsch said.
The initial capital base of 3 million common shares will be distributed upon the Plan's effectiveness after confirmation to all these classes on a pro rata basis. Thus, holders of the approximate 16.5 million common shares currently outstanding will receive 1.5 million new shares, effectively representing a reverse split of approximately 1 for 11 shares, he explained.
All recipients of the new shares, however, will also receive 1 2/3 class A warrants permitting the purchase of an equal number of common shares for $1.00 each any time within 270 days from the effectiveness of the Plan. These warrants will not be separately tradeable.
Further, all A warrant holders who exercise such warrants to purchase new stock will receive one class B warrant for every two A warrants exercised. Each of these will permit the purchase of one share of common stock for $2 through 635 days following effectiveness of the Plan. These warrants will be separately tradeable as well as exercisable, Hirsch said.
The Plan provides for payment of general, unsecured trade debt at 25 cents on the dollar over two years after effectiveness of the Plan plus common shares which equates to approximately 100 percent payment of allowed claims.
The Plan also reflects a change in top management of the company, effectuated in November and December, 1994, and a shift in the focus of the company from a research and development organization to a commercial enterprise.
Hirsch and the creditor-stockholder representatives anticipate that court procedures can be completed and confirmation achieved before the close of the first quarter of 1995. If the Plan is confirmed as proposed, it is anticipated that the company may be re-listed on NASDAQ by the close of 1995.
The former management voluntarily filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code on Sept. 15, 1993, in the wake of stockholder litigation.
In May of last year, the Office of the United States Trustee, supported by the Fingermatrix Stockholder Alliance, asked the Bankruptcy Court to appoint a trustee to assume management of the company. On Aug. 15, 1994, Hirsch was so appointed.
CONTACT: Gainsburg & Hirsch, Attorneys for Hal M. Hirsch
Allen G. Kadish, Esq., 914/251-1030
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|Date:||Feb 9, 1995|
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