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JUDGE CONFIRMS TRUSTEE'S PLAN FOR CARDINAL INDUSTRIES TO EMERGE FROM BANKRUPTCY

 JUDGE CONFIRMS TRUSTEE'S PLAN FOR CARDINAL INDUSTRIES
 TO EMERGE FROM BANKRUPTCY
 COLUMBUS, Ohio, Aug. 13 /PRNewswire/ -- U.S. Bankruptcy Judge Barbara J. Sellers verbally confirmed from the bench Trustee Jay Alix's plan of reorganization for Cardinal Industries, Inc., subject to entry of a written order. Cardinal will emerge as a publicly held company within 30 days from its 39-month-long Chapter 11 bankruptcy. Creditors will become shareholders owning most of the new company shares to be traded in the over-the-counter market.
 The plan of reorganization sponsored by Alix was approved by more than 90 percent in aggregate amount of claims that were voted in each class of claims and by about the same percentage of creditors who cast ballots in each class.
 As one of the largest-ever trustee-sponsored reorganizations accomplished without third-party equity financing, the plan enables Cardinal to emerge from reorganization as general or co-general partner of apartment complexes primarily owned by a core group of 325 limited partnerships, with about 21,000 rental units. The company will have an additional six months to assume or reject partnership agreements with 330 other apartment complexes, motels and retirement villages that Alix believes have "a reasonable likelihood" of being stabilized. Depending on the number of additional properties stabilized, Cardinal may emerge as one of the nation's 15 largest apartment management companies.
 The majority of the apartment complexes are located in the Midwest and Southeast United States, with the heaviest concentrations in Ohio, Indiana, Florida, Georgia, Kentucky and Michigan. In addition to providing general partner and apartment management services, Cardinal will offer renter's insurance, parts and services to maintain the apartment complexes, leased furniture and mortgage services through its 16 active subsidiaries.
 Prior to its bankruptcy, Cardinal was the nation's largest modular housing manufacturer and the second-largest apartment developer. Its Knights Inn motel chain was the nation's seventh-largest limited-service motel chain. The company developed more than 1,000 properties in 20 states east of the Mississippi River.
 At confirmation, all of the Cardinal-owned and -affiliated syndicated apartment properties of which Cardinal or a subsidiary is a general partner of the partnership, had combined assets of about $1.2 billion and estimated total annual revenues of $194 million. Upon emergence from bankruptcy, if Cardinal retains only the 325 core properties, its balance sheet is expected to show the company and its subsidiaries with assets of $86.8 million, stockholders' equity of $27.2 million and liabilities of $59.6 million.
 "We're very pleased with the overwhelming support of our plan and with the court's confirmation," said Alix, who was appointed Operating Trustee by U.S. Trustee Conrad J. Morgenstern and approved by Judge Sellers in late January 1990 to try to rescue the then-8-month-old, management-led reorganization that was near collapse. "Few then believed that there would still be such a viable company today. The confirmed plan of reorganization is a tribute to the hard work of everyone involved with this case."
 Under the plan, general unsecured creditors will receive one share of stock for each $50 in allowed claims. Other plan elements include turnover of relevant collateral to secured creditors in most instances; payment of 15 cents for every dollar of debt to unsecured creditors with claims of $2,000 or less; and payment in full of certain employee salary and benefit claims, plus interest, in one year from the effective date.
 Upon Cardinal's emergence from reorganization, Alix will turn over management of the company to new President and Chief Executive Officer Frank McDowell, along with the company's new 11-member board of directors and the six-member management team. McDowell, a real estate and financial management executive, was selected by the creditors' committee and was involved in developing the company's business plan for post-bankruptcy operations.
 The company also appointed Michael F. Carbone, formerly an investment banking and securities executive, as chief financial officer. Other members of Cardinal's senior management team selected by Alix will remain in their current positions. They are: David P. Blackmore, vice president, treasurer and controller; James H. Bownas, vice president and general counsel; Robert E. Pausch, vice president of finance; Thomas Trubiana, vice president of investor and administrative services, and David E. Williams, vice president of apartment operations.
 "Cardinal has a fresh start now," McDowell said. "Its house is in order, and it is well-positioned to build a solid business as a property manager and general partner. Our fresh perspective and the management team's familiarity with the company should prove to be a healthy combination that will benefit our shareholders, limited partners, employees and the communities Cardinal serves."
 During his 31-month turnaround and reorganization of Cardinal, Alix closed its manufacturing plants and sold off its Knights Inn motel chain and retirement village businesses to focus the company on its apartment properties. He also directed overhauls of every aspect of the company's operations, ranging from property management, accounting and financial reporting, services to limited partners, partnership financing and bank debt restructuring to the management of the bankruptcies of the corporation and its 33 subsidiaries, as well as those of almost 300 partnerships.
 Still pending are the reorganizations of about 250 affiliated limited partnership Chapter 11 cases. The interrelated cases have involved the restructuring of more than $1.8 billion in secured mortgage debt held by about 230 financial institutions and the disallowance or settlement of more than $2.5 billion in claims in the Cardinal corporate case.
 About 10,000 limited partners, 3,000 corporate and 9,000 affiliated property employees and thousands of creditors were affected by the Cardinal bankruptcy. The case was considered so complex that in October 1990 Judge Sellers approved Alix's motion for "substantive consolidation," a rarely invoked remedy that, for bankruptcy purposes, merged the assets and liabilities of Cardinal and all but two of its 33 subsidiaries.
 Cardinal now employs about 300 corporate employees, based primarily at its Columbus headquarters. Another 2,600 are employed by the affiliated partnerships at the property level. About 9,000 limited partners hold interests in its syndicated property partnerships.
 -0- 8/13/92
 /CONTACT: Don Durocher or Mike Chapp of Durocher & Company, 313-259-7414, for Cardinal Industries/ CO: Cardinal Industries, Inc. ST: Ohio IN: SU: BCY RCN


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Date:Aug 13, 1992
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