MILWAUKEE--April 12, 1995--The United States Bankruptcy
Court in Milwaukee has approved the Disclosure Statement related to the Plan
of Reorganization of Value Merchants Inc.
(OTC - VUMIQ.BB) and
its wholly-owned subsidiary Everything's A Dollar Inc.
The company now will submit the Plan for balloting to all its creditors for
approval. A confirmation hearing has been scheduled for May 26, 1995.
``The Plan has the support of the Company's Secured Creditors and the
Official Unsecured Creditors' Committees,'' Steven J. Appel, president and
chief executive officer stated. ``The Company and the Creditors' Committees
believe that the Plan provides the greatest and earliest possible recovery to
the creditors and will improve the financial condition of the Company. If the
Plan is approved by the Unsecured Creditors and the Court, the Company could
emerge from bankruptcy by June 1995,'' Appel said.
As part of the Plan, three participants in the senior secured loan have
agreed to convert a significant portion of their secured debt to equity and
unsecured long-term notes. Unsecured creditors will receive stock in the
company for their claims. The company has arranged for an investment banker
to use its best efforts to affect the sale of stock of those unsecured
creditors who elect to participate in an offering subsequent to the company's
emerging from bankruptcy. Current shareholders will retain an interest in the
company.
CONTACT: Value Merchants Inc., Milwaukee
Gary I. Kastel, 414/274-2575
NEW YORK, April 12, 1995 -- Aileen, Inc.
(NYSE:" target=_new>http://www.secapl.com/cgi-bin/edgarlink?AEE">(NYSE:AEE),
debtor-in-possession under Chapter 11 of the United States Bankruptcy Code, a
manufacturer and retailer of women's apparel, today announced that it has
obtained final Bankruptcy Court approval of its new $7 million
debtor-in-possession revolving credit facility with href="dir.firm.cit.html">The CIT Group/Business
Credit, Inc. As previously reported, this credit facility was arranged
for
the Company by its independent manager and management consultant href="dir.firm.alco.html">Alco Management & Consulting Group, Inc.
("Alco").
In recent Bankruptcy Court proceedings, Alco indicated that the Company
planned to close 33 underperforming retail stores by June 30, 1995 and
expected that, by the end of August, it should have an indication as to the
viability of its retail business and whether the Company can be successfully
reorganized around its remaining retail chain of approximately 80 stores. The
Company has also applied to the Bankruptcy Court for approval to begin the
process of disposing of its recently-closed domestic manufacturing
operations.
In operating reports filed with the Bankruptcy Court, the Company has
reported its unaudited results of operations for the 35 days ended October 29,
1994, which was the end of its 1994 fiscal year, and for the subsequent 28-day
periods ended November 26, 1994 and December 24, 1994, as well as for the
35-day period ended January 28, 1995. For the period ended October 29, 1994
(without reflecting the charge to operations from the subsequent closing of
the Company's domestic manufacturing operations), net sales were $4,794,000,
the loss before reorganization items was $1,279,000 and the net loss after
reorganization items was $1,776,000 ($.33 per share). At the end of such
period, total liabilities were $21,021,000 (including liabilities subject to
compromise of $14,543,000) and shareholders' equity was $11,400,000. For the
periods ended November 26, 1994 and December 24, 1994 (without reflecting the
charge to operations from the subsequent closing of the Company's domestic
manufacturing operations), net sales were $3,542,000 and $2,778,000,
respectively, the losses before reorganization items were $1,124,000 and
$1,235,000, respectively, and the net losses after reorganization items were
$1,219,000 ($.23 per share) and $1,252,000 ($.23 per share), respectively.
For the period ended January 28, 1995, net sales were $2,387,000, the loss
before reorganization items was $2,721,000, the charge to operations from the
closing of the Company's domestic manufacturing operations was $4,418,000 and
the net loss after reorganization items and the plant closing charge was
$7,203,000 ($1.35 per share). As of January 28, 1995, total liabilities were
$23,156,000 (including liabilities subject to compromise of $14,561,000) and
shareholders' equity was $1,726,000.
/CONTACT: Steve Delman of Aileen, Inc., 212-398-9770/
DALLAS, Texas--April 12, 1995--Southmark
Corporation (OTC)
Wednesday reported that a bankruptcy court has ordered accounting firm
Coopers
& Lybrand to disgorge a portion of the fees it earned in the Southmark
Chapter 11 case.
The bankruptcy court found that Coopers & Lybrand failed to disclose that it
earned $18.5 million in fees for audit and other accounting work for Drexel
Burnham Lambert in the two and a half years before Southmark filed its Chapter
11 petition in July 1989.
Furthermore, the court found that Coopers & Lybrand reassigned personnel who
identified possible securities claims against Drexel to unrelated matters and
failed to pursue a further investigation of such claims.
In its ruling the court noted that no-disclosures by Coopers & Lybrand
"impeded the court's function to assure the integrity of an investigation by
professional persons with undivided loyalty."
The bankruptcy court ordered Coopers & Lybrand to disgorge to Southmark
$585,042 in fees and legal expenses.
Following the bankruptcy court's ruling last week, Southmark filed suit
against Coopers & Lybrand in the 134th Judicial District Court in Dallas
County. Southmark's suit charges Coopers & Lybrand with breach of contract,
fraud and deceit, breach of fiduciary duty and negligent misrepresentation in
its investigation of possible Southmark claims against Drexel.
The suit seeks actual plus exemplary damages in an amount to be determined
by jury trial.
Charles B. Brewer, executive vice president of Southmark, commented, "These
allegations go far beyond the routine legal skirmishes common among
participants in the bankruptcy process. Coopers & Lybrand's egregious behavior
was detrimental to Southmark's creditors -- the very group that should have
benefited from their work."
Coopers & Lybrand was employed in 1989 by the court-appointed examiner in
the Southmark bankruptcy case to perform accounting investigatory work. In
its application for court approval, Coopers & Lybrand disclosed that it had
performed accounting and consulting services for Drexel Burnham Lambert in
matters unrelated to the Southmark case.
In a January 1994 petition to the bankruptcy court Southmark claimed that
Coopers & Lybrand failed to disclose the extent of its business relationship
with Drexel and blocked further investigation of claims that may have led to
additional recoveries by Southmark's creditors.
Drexel served as investment banker to Southmark in the issuance of over one
billion dollars of high yield bonds and other securities during the
1980s.
Prior to Coopers & Lybrand's assignment in the Southmark case, Drexel pled
guilty to federal criminal charges and agreed to a comprehensive consent
decree establishing a $650 million fund to satisfy civil securities and other
claims. The Drexel bankruptcy court set a Nov. 15, 1990, bar date for filing
proofs of claims against Drexel.
Southmark did not file a proof of claim in the Drexel proceeding. As
previously reported Southmark has received $26.5 million from settlement funds
established separately by Michael Milken, the former director of Drexel's high
yield department and expects to receive additional sums.
Southmark emerged from Chapter 11 in August 1990 under a court-approved plan
to liquidate its assets.
CONTACT: Southmark Corp., Dallas
Charles B. Brewer, executive vice president,
214/406-6775
HOUSTON, Texas -- April 12, 1995 -- Weiner's
Stores, Inc. announced today it
has filed for protection under Chapter 11 of the U.S. Bankruptcy Code, a move
which will enable the Texas-based retailer to continue operating its stores
while it reorganizes its debt, strengthens its financial position and
implements new marketing strategies.
Weiner's also announced it has negotiated a $30 million financing commitment
from CIT Group/Business Credit, Inc.,
subject to court approval. This will
support the retailer's ongoing business with its customers, vendors and its
more than 4,000 associates.
The voluntary petition filing was made in U.S. Bankruptcy Court in
Wilmington, Del.
In announcing the filing, Chief Financial Officer Raymond J. Miller said
each of the Weiner's stores will remain open for business with few, if any,
immediate changes while its current management team establishes a new
direction for the future.
"The company has been built on emphasizing quality merchandise and value
pricing for customers," Miller said. "That focus is not going to
change."
In addition to its inventory of brand-named, value-priced apparel for men,
women and children, sales from nationally-recognized Levis jeans and athletic
shoes including Nike, Reebok and Fila have grown to represent a significant
segment of the company's business. Weiner's also has established a niche as a
leader in the sale of school district uniforms in Houston and its other
markets.
Miller describes recent sales figures from all Weiner's stores to be
encouraging, particularly in light of the beginning of the spring and Easter
shopping periods. He also emphasizes the company's management team will
examine the stores' merchandising and inventory strategies as well as take
steps to enhance store presentations.
"We are confident Weiner's will overcome this and emerge in an even stronger
marketing and financial position," Miller added.
Weiner's operates 158 stores in Texas and southeast Louisiana with annual
sales of $300 million. The company was founded in 1926 and has operated as a
family-owned and managed business continuously since that time.
/CONTACT: Larry Sachnowitz or Bernard Kaplan, both of Sachnowitz & Co.,
713-521-1010/