Printer Friendly

NEW VALLEY CORPORATION ENTERS CHAPTER 11

 UPPER SADDLE RIVER, N.J., April 1 /PRNewswire/ -- New Valley Corporation (NYSE: NVL) today announced that it has consented to the entry of an order for relief placing the corporation under the protection of Chapter 11 of the Federal Bankruptcy Code. The Chapter 11 relief was requested by New Valley following an extensive effort to reach agreement with its major creditors on the debt-restructuring terms of a Prepackaged Plan of Reorganization that the company had proposed last May.
 An involuntary Chapter 11 proceeding had been pending in Newark, N.J., since Nov. 15, 1991, when three small holders of New Valley's defaulted senior secured notes filed a creditors' petition seeking to force an involuntary reorganization. During the past few months several larger, unsecured creditors, along with the trustee for eight of the company's eleven outstanding issues of debt securities, joined that proceeding as petitioners.
 Western Union Financial Services, Inc. (FSI), which is a wholly owned subsidiary of New Valley Corporation and represents more than 90 percent of New Valley's business, is not included in the order for relief entered today and was not included in the creditors' filing. FSI is a profitable company with substantial net worth and cash flow. Its Western Union Money Transfer and other services provided to consumers and businesses continue to be available in the normal manner, as do the messaging services of the corporation's Western Union Priority Services unit.
 Robert J. Amman, vice chairman and chief executive officer of New Valley, said:
 "We have recognized for several years the need to formulate a financial restructuring plan that would be acceptable to the company's various creditors and, at the same time, would reduce the cash obligations imposed by the company's outdated capital structure to a level that its present operating units can reasonably be expected to support. With that objective in mind, and having reached a preliminary agreement in principle with the Pension Benefit Guaranty Corporation (PBGC) for the settlement of the company's unfunded pension plan liabilities, we filed a prospectus with the Securities and Exchange Commission on May 14, 1992, detailing the company's plan to restructure its debt through a Prepackaged Plan of Reorganization under Chapter 11.
 "Since then we have conducted intensive negotiations with the major holders of New Valley's senior secured notes and had reached basic agreement with them and the PBGC on many of the economic modifications to the 1992 plan that would be required to implement a debt restructuring. However, at a hearing on March 3, the Court established a deadline of April 2 for reaching a definitive out-of-court agreement. Inasmuch as a documented, definitive agreement has not yet been reached, we concluded, with the advice of counsel, that the most expeditious course of action would be to consent to the entry of an order for relief now and proceed with the reorganization of the company under the supervision of the Court.
 "The company retains the right and intends to continue to negotiate with the senior secured noteholders and the PBGC, as well as its other creditors, while under the protection of Chapter 11. We are hopeful that, building on the progress we have made in negotiations to date, we will be able to expeditiously formulate a consensual plan of reorganization that will be acceptable to our creditors. Meanwhile, the company has more than enough cash to sustain its business, which, as our latest operating results show, is strong and growing. We do not expect any interruption in any of our operations.
 "I am confident that the required restructuring of the company's debt can be completed in an orderly way during this proceeding, and that New Valley Corporation will emerge from Chapter 11 as a sound enterprise with a solid foundation for future growth."
 As a debtor in possession under Chapter 11, New Valley intends to meet its ongoing obligations to suppliers of goods and services while a plan of reorganization is being worked out. The company also expects that all obligations presently outstanding to trade creditors will be fully satisfied without delay and that employee paychecks and benefits will be unaffected.
 New Valley Corporation conducts its principal operations through its wholly owned subsidiary, Western Union Financial Services, Inc. (FSI). The North American unit of FSI provides Western Union Money Transfer, bill-payment and other financial services to consumers and businesses in the United States. It also provides Money Transfer service in Canada and between the U.S. and Canada and Mexico. The international unit of FSI provides Western Union Money Transfer services in countries outside of North America. In addition, the company provides Western Union Mailgram(R) and other messaging services to high-volume users through its Western Union Priority Services unit.
 -0- 4/1/93
 /CONTACT: Warren Bechtel for New Valley Corporation, 201-818-5790, or 212-868-8888/
 (NVL)


CO: New Valley Corporation ST: New Jersey IN: SU:

TS -- NY018 -- 1861 04/01/93 08:37 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Apr 1, 1993
Words:813
Previous Article:BIOCHEM IMMUNOSYSTEMS INC. SIGNS STRATEGIC ALLIANCE IN JAPAN
Next Article:BWIP HOLDING INC. OPENS ALASKAN SERVICE CENTER
Topics:


Related Articles
NEW VALLEY CORPORATION REACHES AGREEMENT WITH PBGC AND REGISTERS PREPACKAGED CHAPTER 11 REORGANIZATION PLAN
NEW VALLEY SUES TO STOP FIRST DATA INTERFERENCE
NEW VALLEY CORPORATION AGREES TO SELL FINANCIAL SERVICES SUBSIDIARY TO FIRST DATA CORPORATION
NEW VALLEY ANNOUNCES SUPERIOR TRANSACTION FOR ITS WESTERN UNION FINANCIAL SERVICES SUBSIDIARY
COURT DETERMINES FIRST FINANCIAL MANAGEMENT ALL-CASH BID TO BE HIGHEST IN NEW VALLEY CHAPTER 11 AUCTION
BANKRUPTCY COURT GIVES GO-AHEAD FOR DISTRIBUTION OF NEW VALLEY JOINT PLAN OF REORGANIZATION
NEW VALLEY CORPORATION REACHES AGREEMENTS WITH FFMC AND PBGC
NEW VALLEY AMENDS REORGANIZATION PLAN FOLLOWING SETTLEMENT AGREEMENT WITH SHAREHOLDERS
BANKRUPTCY COURT CONFIRMS NEW VALLEY REORGANIZATION PLAN

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters