IRON-OAK SUPPLY ANNOUNCES OUTLINE OF LIQUIDATION PLAN
IRON-OAK SUPPLY ANNOUNCES OUTLINE OF LIQUIDATION PLAN SACRAMENTO, Calif., Jan. 8 /PRNewswire/ -- Iron-Oak Supply Corp.
(the company) today announced that its outstanding principal indebtedness to First National Bank of Chicago (FNBC) had been paid off completely. Separately, the company has entered into a definitive agreement to sell four of its northern California branches to Slakey Brothers Supply Co. of Sacramento. Additionally, the company will sell or liquidate all its remaining branches by a target date of March 31, 1992.
Donald B. Bibeault, chairman and chief executive officer of Iron- Oak Supply indicated that the company has made a final principal payment of approximately $857,000, thereby reducing principal owed to FNBC to zero. The original (LBO) debt owed to FNBC was almost $40 million. The company still owes FNBC accrued interest and other unspecified charges. Additionally, the former owner, Amfac Supply Corp., has made a claim to collect a subordinated note of $12 million plus accrued interest. Unsecured trade creditors are owed $27 million. The company announced that it is selling four California branches (Albany, Hayward, Monterey and North Highlands) to Slakey Brothers. Previously it sold its Jackson and Sonora, Calif. branches to Slakey. Additionally, the company has entered into a letter of intent to sell its Burbank, Calif., branch. Bibeault further indicated, "the Unsecured Creditors group has sued FNBC and Amfac Supply based on Equitable Subordination and Fraudulent Conveyance theory." Management has consistently maintained that the bank was tough and uncooperative in dealing with the company in the company's plan for an orderly reduction of debt rather than a precipitous, uneconomic reduction. Management believes that while the Unsecured Creditors case may have merit, it is up to the courts to make a determination. The company intends to file a Chapter 11 Liquidating Plan which will include detailed plans for sale of branches, liquidation of branches and distribution centers, payment of claims and cash flow. It is anticipated that either through sale or liquidation, the company's plumbing operations will cease by March 31, 1992. Iron-Oak Supply Co. is engaged in the wholesale distribution of plumbing supplies, mechanical supplies and equipment. Iron-Oak is an 85 percent owned subsidiary of the Ironstone Group of San Francisco. -0- 1/8/92 /CONTACT: Donald B. Bibeault of Iron-Oak Supply, 916-648-7600/ CO: Iron-Oak Supply ST: California IN: CST SU: BKT
RM -- SF008 -- 7900 01/08/92 15:15 EST
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|Date:||Jan 8, 1992|
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