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NU-MED ANNOUNCES VOLUNTARY FILING OF CHAPTER 11 PETITION

 ENCINO, Calif., Jan. 7 /PRNewswire/ -- Nu-Med Inc. today announced the voluntary filing of a Chapter 11 petition in Los Angeles for reorganization under the federal bankruptcy laws. The announcement also stated that the company anticipates filing shortly a plan of reorganization and disclosure statement which is based on agreements reached between the company and an ad hoc committee of subordinated debenture holders owning approximately 42 percent of the company's outstanding debentures.
 The company has also announced that Foothill Capital Corp. has given Nu-Med a commitment, subject to court approval, to provide, under certain terms and conditions, a working capital line of credit of up to $2 million during the Chapter 11 case. Outstanding balances under this loan will be secured by company assets.
 The proposed plan of reorganization preserves the rights of the secured creditors and senior debt, but will provide for the conversion of all of the outstanding subordinated debentures and other unsecured liabilities of Nu-Med Inc. (collectively, the "unsecured creditors") to common stock. It is anticipated that upon the company's emergence from Chapter 11, the unsecured creditors will receive approximately 93.5 percent of the company's common stock. The existing holders of preferred stock will convert their interest into 3.85 percent of the company's common stock. The existing holders of common stock will retain a 1.65 percent interest (equivalent to approximately 2 percent of presently outstanding shares) and the company's existing management will retain a 1.0 percent common stock interest.
 The proposed plan also contemplates that the unsecured creditors, as the new majority holders of the company's common stock on emergence form Chapter 11, will select a new five member board of directors which shall include two members of management, and will retain existing members of management to operate the company. Management will have an opportunity to purchase additional common stock of the reorganized Nu-Med Inc.
 After emergence from the Chapter 11 proceedings, the company's operating assets will consist of three psychiatric hospitals, one acute care hospital and financial assets consisting of secured notes with an aggregate face value of approximately $35 million resulting from previous sales of hospitals, and various other notes receivable, leasehold interests and other assets held for disposition. For the six months ended Oct. 31, 1992, the company's psychiatric hospitals generated approximately $16 million of net revenues while its acute care hospital generated approximately $4.5 million of net revenues. The company has filed a Chapter 11 petition only for itself; as a result, its operating subsidiaries will continue to engage in business outside of Chapter 11, with the exception of Nu-Med La Mirada Inc., which previously operated the Medical Center of La Mirada, and filed its own Chapter 11 petition of Oct. 29, 1992.
 Nu-Med stated that its Chapter 11 filing was prompted primarily by its default in October 1992 on interest payments on its outstanding debentures, as well as ongoing cash flow problems. The company intends to emerge from Chapter 11 as quickly as practicable under the circumstances.
 -0- 1/7/93
 /CONTACT: Kenneth E. Rappoport, vice chairman of Nu-Med, 818-990-2000/


CO: Nu-Med Inc. ST: California IN: HEA SU: BCY

BP-MS -- LA008 -- 2512 01/07/93 09:05 EST
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Publication:PR Newswire
Date:Jan 7, 1993
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