FARMINGTON HILLS, Mich. -- Aug. 27, 1996 -- Data Systems
Network Corporation (Nasdaq: DSYS; PSE: DSY) announced today that it
had reached a settlement agreement that will, upon fulfillment of
the agreement's terms, release DSNC from further claims and
obligations to creditors under DSNC's 1991 Chapter 11
reorganization, dissolve the creditors' committee, and remove
restrictions that were imposed by the reorganization. The original
obligations settled under this agreement included maximum potential
cash flow participation payments of up to $500,000 for both 1996 and
1997.
The terms of the proposed settlement require DSNC to pay a one
time payment of $250,000 and to issue the 170,000 fully paid
warrants called for in DSNC's plan of reorganization. However, due
to prior settlements with certain individual creditors, the proposed
payment will be reduced to approximately $115,000 and DSNC will be
required to issue only 60,000 fully paid warrants. The prior
settlements required certain creditors to assign their rights to
receive payments and/or warrants back to DSNC. These warrants have
been treated as outstanding shares for DSNC's previous earnings per
share calculations.
DSNC will take a one time charge of $150,000 or $.06 per share
primary ($.05 fully diluted). This charge includes legal and
administrative costs associated with the settlement. The proposed
settlement is agreed to by both DSNC and the creditors' committee,
but is subject to approval by the Federal Bankruptcy Court.
"This is an excellent settlement for DSNC," said Michael W.
Grieves, President and CEO of Data Systems Network Corporation. "It
eliminates all potential, future payments, ends all related future
legal and administrative expenses, and completes the
reorganization."
Data Systems Network Corporation, a systems integrator for local
and wide area networks, provides a wide range of network integration
services including installation, consultation, maintenance and
training. Based in Farmington Hills, Michigan, the Company has
other offices located in Chicago, IL and Pittsburgh, PA and a
subsidiary in Raleigh, NC. Customers are located throughout the
United States
CONTACT: Barbara Hauswirth, Investor Relations Director of
Data Systems Network Corporation, l-800-544-2086
DALLAS, TX -- Aug. 27, 1996 -- FoxMeyer Drug Company, a unit of
FoxMeyer Health Corporation (NYSE: FOX) today announced that it has
named Robert A. Peiser as vice chairman and chief executive officer.
Most recently, Mr. Peiser was executive vice president and chief
financial officer of Trans World Airlines, where he was credited
with implementing major cost reductions and widely recognized as the
architect of the airline's successful 1995 financial restructuring,
resulting in a speedy reorganization under Chapter 11.
Concurrently, FoxMeyer Drug said that in order to ensure an
adequate supply of goods to its customers, it is filing for
protection under Chapter 11 of the U.S. Bankruptcy Code. The
Company said that it has secured a $775 million financing package
arranged by GE Capital Services, as part of its Chapter 11 filing.
FoxMeyer Drug said the filing is being made in the U.S. Bankruptcy
Court in the District of Delaware. FoxMeyer Drug stated that the
previously announced agreement for it to be sold to a New Jersey
investor group led by William F. Taggart has been terminated.
FoxMeyer Health Corporation is not included in the Chapter 11 filing.
FoxMeyer Drug said that despite reaching agreement in June on a
new and expanded banking facility, recent restriction of credit
terms by its suppliers made the filing a necessity.
"As we explained in several meetings with a number of our
suppliers, we believe that we would have been able to operate
successfully outside of Chapter 11 with the continuation of normal
trade terms," said William Estes, president and chief operating
officer of FoxMeyer Drug. "Some suppliers, however, apparently
preferred the certainty of a Chapter 11, where they knew that as
post-petition suppliers they would receive priority status by the
court for any new goods that were purchased."
Mr. Estes said that with the filing and the three-quarter of a
billion dollar financing package, he was confident that the
company's relationship with its vendors, and business in general,
will quickly return to normal.
Mr. Estes said that, despite the filing, daily operations at
FoxMeyer Drug will continue as usual. "As far as the company's
customers are concerned, we expect to be able to provide them with
as good or better service levels as before."
He said that FoxMeyer Drug's employees should notice little, if
any, difference in their jobs. Paychecks will be issued as usual,
at the same time as if no proceeding had been filed.
Mr. Estes said that FoxMeyer Drug's basic drug wholesaling
business continues to show strong improvement. He said that the
Company's performance should continue to improve due to the credit
assurances. "Funds will now be available to invest in the products
and services required to enhance our customers' businesses and
further strengthen relationships," he said.
Mr. Estes continued, "Over the past several months, we have
taken a number of steps to reduce costs and improve operations. We
have significantly reduced distribution center expenses, instituted
a wage freeze and eliminated unprofitable contracts."
"We have a well-established customer base, a solid distribution
system and an excellent employee group," he stated. "I am confident
that, with our supplier relationships back on track, we will be able
to return the company to profitability."
Mr. Peiser served with Bahadur, Balan & Kazerski, a turnaround
consulting firm based in Southfield, Mich., prior to joining TWA.
Before that, he served as president and CEO of Florida-based Orange-
co., Inc., which was named Turnaround Company of the Year by the
Tampa Tribune during his tenure; and in executive positions with
such firms as Borman's Inc., a Detroit supermarket chain; ALC
Communication Corp., a Michigan-based long distance telephone
company; Hertz Corporation; and RCA Corporation.
FoxMeyer Drug Company is the nation's fourth largest wholesaler
of drugs, employing 2,400 people in 21 states and the District of
Columbia.
CONTACT: Michael Kolbenschlag or Ann Julsen, Sitrick And Company,
214-446-4528; or FoxMeyer Health Corporation Investor Calls: Alex
Gleeson, Morgen-Walke Associates, Inc., 212-850-5640