Printer Friendly

STANDARD BRANDS PAINT COMPANY VOLUNTARILY SEEKS CHAPTER 11 REORGANIZATION

 STANDARD BRANDS PAINT COMPANY VOLUNTARILY SEEKS
 CHAPTER 11 REORGANIZATION
 TORRANCE, Calif., Feb. 11 /PRNewswire/ -- Standard Brands Paint Co. (NYSE: SBP), announced this afternoon the voluntarily filing of Chapter 11 petition in Los Angeles for reorganization under the federal bankruptcy laws for it and its operating subsidiaries. The company's Chairman and Chief Executive Officer Stuart D. Buchalter stated that the company was forced to seek Bankruptcy Court protection when it was unable to reach agreement with its various lenders and possible investors that would have included an equity contribution and a reduction in interest payments and indebtedness.
 The company's Chapter 11 filings indicated consolidated assets of approximately $280 to $285 million vs. consolidated liabilities of $185 million. The debts include a mortgage of $120 million held by its senior lenders on substantially all of the company's real estate assets, a $26 million bank loan and $21 million of trade debt. While the company is solvent and profitable on an operating level, Buchalter said the combination of the continuing economic recession in Southern California which has slowed consumer spending, with the unwillingness of the company's suppliers to provide it with goods and the company's inability to service its senior debt and bank loan through current cash flow made a bankruptcy filing inevitable.
 Buchalter further stated that the company has arranged for a $17 million line of credit which will shortly be presented to the Bankruptcy Court for approval and that it will be "business as usual" in the company's retail stores. The $17 million DIP financing line will be used to immediately buy inventory for the company's stores which have been depleted over past months during the lengthy negotiations with possible investors and the company's senior lenders and bank.
 Carl Bellini, the company's recently installed chief operating officer, stated that "all of the company's stores remain open for business as usual and that under Chapter 11, the company expects its suppliers to immediately resume shipping goods due to the $17 million DIP financing line which becomes first in line for repayment. With this new credit line, invoices for goods and services rendered beginning today will be paid." Bellini continued that "the company will now be able to return to its core paint business and reorganize its finances. Standard Brands is in business to stay," Bellini said. "Customers should anticipate that their deposits will be honored and credit cards welcomed. This filing was made to permit a financial restructuring that will allow us to continue to operate without interruption, and to emerge later as a stronger company."
 Bellini told the company's 2,100 employees to expect that their pensions, tax-deferred savings accounts, salaries and health benefits will be intact and unaffected by the filing.
 The dismal state of retailing and decline in consumer spending has adversely affected the company's retail stores over the past two years. Buchalter stated that in this weak economy, Standard Brands had more debt than is feasible. "We have worked for many months on several alternatives before concluding that filing for Chapter 11 was best for the company and its various constituents. Our customers, employees and suppliers will find business as usual during this period."
 Standard Brands Paint Company is a manufacturer, distributor and retailer of paint. The company operates 135 Paint Stores serving the do-it-yourself market in the West.
 -0- 2/11/92 R
 /CONTACT: Craig Walker, VP-communications of Standard Brands Paint, 310-214-2411/
 (SBP) CO: Standard Brands Paint Company ST: California IN: REA SU: BCY


EH-JL -- LA006 -- 9070 02/12/92 08:03 EST
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Feb 12, 1992
Words:586
Previous Article:JACOBS AWARDED A MAJOR UNION CARBIDE ENVIRONMENTAL PROJECT
Next Article:GUARDIAN BANCORP REPORTS RESULTS
Topics:


Related Articles
STANDARD BRANDS PAINT COMPANY VOLUNTARILY SEEKS CHAPTER 11 REORGANIZATION
FINAL APPROVAL OF DEBTOR-IN-POSSESSION FINANCING GRANTED TO STANDARD BRANDS PAINT CO.
STANDARD BRANDS PAINT CO. GETS APPROVAL FOR $14 MILLION FINANCING
STANDARD BRANDS PAINT CO. GETS APPROVAL FOR $14 MILLION FINANCING
STANDARD BRANDS PAINT CO. FILES AMENDED PLAN OF REORGANIZATION; FIDELITY FUND PURCHASES SBP BANK DEBT

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