Castle Energy Corp. obtains $25 million credit facility
RADNOR, Pa.--Dec. 9, 1996--Castle Energy Corp.(a) (Nasdaq/NNM:CECX) (the
"Company") announced Monday that it had obtained a $25 million credit facility with a
syndicate of banks led by Commercial National Bank in Shreveport, La.
Joseph L. Castle II, chief executive officer and chairman of the board, indicated that
approximately $7.5 million of the proceeds of the facility had been used to repay in full the
Company's senior lender, General Electric Capital Corp., and that future proceeds are
expected to be used to develop the Company's undrilled acreage in Rusk County, Texas,
and for other capital projects the Company is evaluating.
Mr. Castle also noted that up to $11 million of the facility could be used to repurchase the
Company's common stock through April 1997 pursuant to a previously announced program
to repurchase up to 1 million shares of its common stock.
The facility consists of a $15 million term loan that is repayable in equal installments
through May 31, 1999 and a $10 million revolving credit facility through Dec. 31, 1997.
In an unrelated development, Mr. Castle stated that American Western Refining Ltd.
Partnership ("American Western"), an unaffiliated entity, filed a voluntary petition for
bankruptcy under Chapter 11.
American Western owes Indian Refining Ltd. Partnership ("IRILP"), an inactive subsidiary
of the Company that was engaged in refinery operations prior to Sept. 30, 1995, a $5
million note plus approximately $500,000 of accrued interest.
The Company understands that American Western is conducting an auction of its only
asset, the Indian Refinery, and that American Western expects to sell the Indian Refinery
before Jan. 1, 1997. IRILP is a secured creditor of American Western and has a first
mortgage on the Indian Refinery.
Other American Western creditors, however, also have priority liens and there can be no
assurance that any sale of the Indian Refinery will be consummated or that IRILP's share of
the proceeds, if any, of such sale will equal its $5.5 million receivable from American
Western. IRILP will use any such proceeds it receives to pay its trade creditors.
The Company, through its various subsidiaries, owns a gas sales contract with Lone Star
Gas Co., and a 77-mile intrastate pipeline in Rusk County, Texas and related gas contracts
and interests. The Company also owns interests in over 425 wells and is the operator of
approximately 350 wells throughout the United States. -0- (a) Castle Energy Corp. is not
affiliated with Castle Oil Corp.
CONTACT: Castle Energy Corp., Radnor Joseph L. Castle II, 610/995-9400
Elsinore Corp. effective date extended to March 31, 1997
LAS VEGAS, NV--Dec. 9, 1996--Elsinore Corp. (ASE/PSE:ELS) Monday announced in
connection with the Chapter 11 proceedings of Elsinore and a number of its subsidiaries
pending in the U.S. Bankruptcy Court for the District of Nevada (the "Bankruptcy Court"),
that the date by which its confirmed plan of reorganization must be effective has been
extended by Bankruptcy Court order until March 31, 1997.
As originally confirmed, the company's plan of reorganization was to be fully effective on
or before Dec. 31, 1996.
The Bankruptcy Court's order was entered in response to a motion made by the State of
Nevada Gaming Authority, and supported by the company, its subsidiaries and the
informal committee of bondholders as proponents of the plan of reorganization.
The Nevada Gaming Authority sought, and received by way of the extension of the
effective date, additional time to complete its investigation and licensing of the
reorganized company's new controlling shareholder, four new members of the reorganized
company's Board of Directors and the replacement managers of the reorganized company,
all as contemplated by the plan of reorganization.
The company expects that the plan of reorganization will be fully effective on or before
March 31, 1997. However, there can be no assurance that the required conditions for full
effectiveness of the plan of reorganization will be satisfied by such date or that any further
extensions of the plan effective date that may be required will be granted by the
Bankruptcy Court.
Trading in Elsinore's common stock continues to be halted by the American Stock
Exchange and by the Pacific Stock Exchange. As previously reported, the American Stock
Exchange and Pacific Stock Exchange intend to review the company's continued listing
eligibility concurrently with its progress in the Chapter 11 proceedings. There can be no
assurance that the listings on the American Stock Exchange and the Pacific Stock Exchange
will be continued.
Elsinore owns and operates the Four Queens, a downtown Las Vegas Hotel and Casino
offering 690 rooms, meeting facilities, four restaurants, over 1,000 slot machines, and
numerous blackjack, craps and other table games.
For information on Elsinore via facsimile at no cost, simply call 1-800-PRO-INFO and
dial company code 177.
CONTACT: Elsinore Corp. The Financial Relations Board Thomas E. Martin Daniel Saks
702/387-5110 310/442-0599
Americans believe bankruptcy system is too easy on debtors
WASHINGTON, D.C.--Dec. 9, 1996--By overwhelming majorities, Americans say it is
too easy to file for personal bankruptcy and they want those who do file to repay as much
of their outstanding debt as they can.
Three quarters of those polled by Opinion Research Corporation, said that people should
have to prove they need bankruptcy relief before debts are erased, which is not currently
required by the bankruptcy system.
Only 16 percent favor the status quo in which "individuals should be the ones to decide
whether they need to file bankruptcy and write off their debts." Better than eight out of ten
(83 percent) of survey respondents said people in bankruptcy should not automatically
have their debts erased, but should pay back what they can.
The survey indicates that Americans are uncomfortable with key aspects of the current
bankruptcy system, which allows individuals with any amount of debt to file bankruptcy
and, in the majority of cases, erase virtually all of their debts. Three quarters (76 percent)
say the bankruptcy system should be changed to make filers prove they need to erase debts
and to require debtors to pay what they can afford.
About 70 percent of Americans who file personal bankruptcy choose Chapter 7. Chapter 7,
which operates under the theory that debtors deserve "a fresh start," does not consider
debtors' income or their ability to pay off their debts. Only 14 percent of those surveyed
endorsed the "fresh start" concept. About one-third of individuals who file for personal
bankruptcy choose Chapter 13, which provides for gradual repayment of at least a portion
of debts. The typical Chapter 13 plan provides for repayment over a three-year to
five-year period.
While Americans have strong feelings about how the bankruptcy system should operate,
most have little understanding of how it works in practice.
Just one in ten Americans knows a great deal of a lot about bankruptcy, and only about one
in three (36 percent) know even a small amount about the system. Moreover, few people
know where to get information about bankruptcy or find out about alternatives to
bankruptcy. This lack of knowledge is spread across all demographic groups, varying little
by age or education.
Only 9 percent of those surveyed and just 14 percent of college graduates claim significant
knowledge about credit counseling and other organizations that assist in financial
difficulty.
Americans do not have a ready explanation for the recent surge in personal bankruptcies,
which will cross the 1 million mark for the first time during 1996. But about one third cite
"irresponsible money management by individuals" as the factor most responsible for the
upward trend. An equal number suggest the easy availability of credit is the key factor.
Another 20 percent attribute bankruptcy to unforeseen events such as unemployment or
medical emergencies, and 10 percent say the ease of filing bankruptcy is an important
factor.
The national survey of 1,011 adults was conducted by Opinion Research Corporation
between November 14-17. It has a margin of error of +/-3 percentage points.
Bankruptcy Poll Findings
How much do you feel you know about the way the personal bankruptcy system works and
the options available to someone considering bankruptcy? Would you say you
4% Know a great deal 7% Know quite a bit 25% Know just some 52% Do not know very
much 11% Nothing 1% Don't know/not sure
How much do you feel you know about organizations that help financially strapped people
avoid having to file for bankruptcy by providing counsel and advice? Would you say you
know a great deal, know quite a bit, have heard about but don't know much, or were you
not aware that such organizations existed?
3% Know a great deal 6% Know quite a bit 62% Heard about, but don't know much 26%
Not aware 2% Don't know/not sure
More than 1 million bankruptcies will be filed in 1996 -- the most ever in one year. Many
factors contribute to this, but which ONE of the following factors do you think is probably
most responsible for the large number of bankruptcies?
31% Irresponsible money management by individuals 3% Advertising by bankruptcy
lawyers 32% Credit that's too widely available 10% The ease with which people can
declare personal bankruptcy 20% Specific events in people's lives, such as illness,
divorce, and
job loss 4% Don't know/not sure
Currently, individuals can decide for themselves whether to declare bankruptcy and write
off their debts, regardless of their income or debts. But some people think individuals
should have to prove to a court that they need to file bankruptcy and write off their debts.
Which do you tend to agree with more?
16% That individuals should be the ones to decide whether they need to
file bankruptcy and write off their debts 75% That individuals should have to prove to a
court that they need to
file bankruptcy and write off their debts 5% Combination/both 1% Neither 3% Don't
know/not sure
Some people say that bankruptcy rules should require those in bankruptcy to repay at least
some of their debt if they can. Others say that everyone deserves a fresh start and that
people in bankruptcy should have virtually all of their debts forgiven.
Do you tend to believe that people in bankruptcy should be required to repay at least some
of their debt if they can do so? Or do you tend to believe that people deserve a fresh start
and that people in bankruptcy should have virtually all of their debt forgiven regardless of
their ability to pay it back?
83% People in bankruptcy should repay as much of their debt as they can 14% Everyone
deserves a fresh start and that people in bankruptcy
should have virtually all of their debt forgiven 1% Neither 4% Don't know/not sure
Let me read two ways that the personal bankruptcy system could be dealt with, and I
would like you to tell me which one you agree with more.
First, the current system gives individuals the right to decide if they want to declare
personal bankruptcy. In addition, individuals can choose to declare bankruptcy in a way
that relieves them of virtually all of their debts, regardless of their assets or income. This
system could be left as is.
Or, the current system could be changes to require individuals to prove to a court that they
need to declare bankruptcy. If they do need to declare bankruptcy, the individuals would
be required to repay as much of their debt as they could afford.
Which approach do you agree with more -- that the current system should be left as it is,
allowing individuals to decide whether to declare bankruptcy and allowing them to have
nearly all of their debt forgiven, OR that the current system should be changed to require
individuals to prove to a court that they need to file bankruptcy and to require those who
do file bankruptcy to repay as much of their debt as they can afford.
14% Current system 76% Change the system 6% Combination/both 1% Neither 3% Don't
know/not sure
CONTACT: Carey Tarbell 202/434-8548 or Jason Maloni 202/434-8580
Ground Round Restaurants, Inc. Reports Fourth Quarter & Year End Financial Results
BRAINTREE, Mass., Dec. 9, 1996 - Ground Round Restaurants, Inc. (Nasdaq: GRXR)
reports a loss of $1.19 per share, on revenue of $53.4 million for the fourth quarter and a
loss of $2.05 per share, on revenue of $218.8 million for the fiscal year ended, September
29, 1996. This compares to a loss of $0.33 cents per share on revenue of $54.9 million for
the fourth quarter last year and a loss of $0.51 cents per share on revenue of $230.4
million for the fiscal year ended October 1, 1995. Comparable restaurant sales increased
1.5% for the fourth quarter and decreased 0.9 percent for fiscal year ended September 29,
1996.
Fourth quarter and full year 1996 results included a charge of $8.9 million or $0.80 cents
per share as a result of the Company's early adoption of Statement of Financial Accounting
Standards No. 121 (SFAS 121), "Accounting for Impairment of Long-Lived Assets to Be
Disposed Of". Full year 1996 results reflect $2.8 million in other expenses in connection
with the restructuring of an Amended and Restated Credit Agreement dated September 12,
1996, consisting of bank, administrative and legal fees.
"The Company's losses for year ended 1996 reflect a full year of investing in the essential
elements of our turnaround - menu, staffing, training and control," said Dan Scoggin,
chairman, president and CEO. "Now that these critical factors to success are in place in
many of our stores, the Company's return to profitability will depend upon the degree of
our success in executing our programs. We have also strategically reduced the size of the
chain to a manageable core and reduced bank debt in the process," he added.
The Company remains in compliance with all covenants of its Amended and Restated
Credit Agreement dated September 12, 1996.
Ground Round Restaurants, Inc. operates 126 company and franchises 44 family-oriented,
full-service, casual dining restaurants in the Northeast, Mid-Atlantic and Midwest regions
of the United States.
GROUND ROUND RESTAURANTS, INC.
Consolidated Statements of Operations
(Dollars in thousands, except per share
amounts)
(Unaudited)
Three Months Ended
Year Ended
Sept. 29, Oct. 1,
Sept. 29,
Oct. 1,
1996 1995
1996 1995
Revenue $53,371 $54,926
$218,833
$230,406
Costs and expenses:
Cost of products sold 48,534 50,964
201,090
200,756
Selling, general and
administrative 3,956 3,944
16,575
16,043
Depreciation and Amortization 2,820 3,569
11,884
14,667
Interest expense, net 1,182 1,195
4,815
4,957
Impairment of long lived assets 8,898 --
8,898
--
Other (income) expense 2,394 2
2,892
1,599
Total 67,784 59,674
246,154
238,022
Loss before taxes (14,413) (4,748)
(27,321)
(7,616)
Income tax benefit (1,147) (988)
(4,374)
(1,906)
Net loss $(13,266) $(3,760)
$(22,947)
$(5,710)
Weighted average common
shares outstanding 11,174 11,174
11,174
11,151
Net Income (loss) per
common share $(1.19) $(.33)
$(2.05)
$(.51)
SOURCE Ground Round Restaurants, Inc. /CONTACT: Stephen Kiel, Chief Financial
Officer of Ground Round Restaurants, Inc., 617-380-3115/
PRTI announces the filing of legal action against the corporation
PHOENIX, AZ --Dec. 9, 1996--Phoenix Resources Technologies Inc. (OTC/BB:PRTI)
Monday announced that a lawsuit has been filed against the company.
This lawsuit was filed by one of the lenders to the wood- products division that was sold
on Aug. 28, 1996.
The lawsuit alleges that the company is liable for an unpaid balance of approximately $3.1
million on a note owed to the Agricultural Production Credit Association.
Within a short time after the sale of the wood-products division, the corporation sought
protection from creditors by electing to enter bankruptcy proceedings under Chapter 11 of
the Bankruptcy Code.
When the subsidiary was sold, the corporation received a warranty against all outstanding
debts by the purchaser. At this time, it is unknown whether or not this warranty is
functional.
The board of directors, management and the corporate legal advisers are presently
considering all options, and an announcement concerning the course of action to be taken is
expected within the next 10 days.
CONTACT: Pacific Corporate Equities LLC 800/844-5549