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Tricon, Burger King Agree to Restructure
DIP Credit Facility
According to a newswire report, Tricon Global Restaurants Inc.,
Louisville, Ky., announced yesterday that it has reached an agreement
with Burger King Corp. regarding the $150 million debtor-in-possession
(DIP) credit facility the two companies made available to AmeriServe
Food Distribution Inc. following AmeriServe's chapter 11 filing on Jan.
31. Under the new agreement, Burger King will buy out its $50 million
share of the DIP facility. This buy-out will consist of a cash payment
to Tricon, and an assignment to them of Burger King's funded portion of
its $50 million obligation. Tricon has agreed to assume the full $150
million commitment under the DIP facility, of which approximately $80
million was funded as of the end of April. Tricon, the world's largest
restaurant owner with almost 30,000 company-owned, franchised and
licensed restaurants in over 100 countries and territories, will assign
$30 million of its commitment under the DIP facility to a third party.
Tricon expects that either AmeriServe will be restructured to be a
stand-alone entity or it will be sold to another acceptable distributor
or strategic buyer. Tricon will continue to purchase inventory for its
U.S. restaurants directly from suppliers during the reorganization
process. According to Tricon, AmeriServe made a claim in bankruptcy
court seeking payment for fees for distribution services rendered to
Tricon-owned restaurants prior to its filing. Tricon has accrued for,
but withheld payment of these feeswhich total approximately $100
millionand has asserted a recoupment defense due to certain costs
and damages incurred by Tricon as a result of AmeriServe's failure to
comply with certain terms of its distribution contract with Tricon.
In a related newswire story, Burger King and AmeriServe have reached
an agreement finalizing the details of the transition of distribution
services for the approximately 5900 Burger King restaurants currently
served by AmeriServe. This agreement, which was approved by the
bankruptcy court on Tuesday, calls for a transition to new distributors
to be completed by July 17.
CHS Amends Chapter 11 Filing to a Liquidating Plan
CHS Electronics Inc., Miami, announced yesterday that it plans to amend
its chapter 11 filing to be a liquidating plan, according to a newswire
report. The amended filing will allow CHS and its subsidiaries to
continue business operations while CHS seeks court approval of the plan
which, if approved, will provide for the sale of CHS' European
subsidiaries. Any remaining assets would be liquidated with the proceeds
subsequently distributed to CHS' creditors. Previously, CHS announced
that it had filed a reorganization plan providing for the sale of CHS'
European subsidiaries to Europa IT ApS, a Danish corporation, while
reorganizing CHS to become a holding company for Internet companies. The
amended filing will include the proposed sale to Europa IT, but any
remaining assets would be liquidated for the sole benefit of CHS'
creditors. There would be no distribution to CHS' shareholders under the
proposed plan and CHS would subsequently cease its business activities.
A plan confirmation hearing is tentatively scheduled for July 11. CHS
is an international distributor of microcomputers, peripherals, and
software in Europe, Latin America, Asia and the Middle East.
Cambridge Files for Bankruptcy
According to Reuters, Cambridge Industries Inc., along with its parent
Cambridge Industries Holdings Inc. and its affiliate CE Automotive Trim
Systems Inc., filed for chapter 11 yesterday. Separately, Cambridge, a
maker of plastic composite automotive components headquartered in
Madison Heights, Mich., announced it had agreed to sell substantially
all of its assets and operations to Meridian Automotive Systems Inc. of
Dearborn, Mich. The company released a statement saying it had received
a commitment from existing bank lenders for $50 million in financing,
which it expected would be enough to pay bills and carry out the sale.
In court papers filed in U.S. Bankruptcy Court in Delaware, Cambridge
listed assets of $345.4 million and liabilities of $459.8 million,
including $233.5 million in secured debt with 29 holders. There are
5,917 holders of unsecured debt, with the largest claim for $100 million
in bonds, for which the State Street Bank and Trust Co. of Hartford, is
the trustee.
TriPath Concludes Share Distribution to Creditors of Neuromedical
Systems
According to a newswire report, TriPath Imaging Inc., Burlington, N.C.,
announced yesterday that most of the 1.4 million shares of the company's
common stock previously issued to Neuromedical Systems Inc., as trustee
in its own bankruptcy, have been distributed to the creditors of NSI.
Last year, the shares had been issued by the company in conjunction with
the acquisition of the entire intellectual property estate of NSI.
TriPath stock has the potential for selling pressure due to the large
number of distributed shares. The company announced that it has worked
closely with the courts to assure the shares are allocated in an orderly
fashion and are pleased that the shares have been distributed with no
overhang on the market for their stock. TriPath develops, manufactures
and markets products to improve cancer screening.
Simmonds Capital Subsidiary Files for Bankruptcy
According to a company press release, Simmonds Capital Ltd., Toronto,
announced yesterday that its wholly owned subsidiary SCL Electronics
Ltd. has filed for bankruptcy. This decision came following the receipt
from SCL Electronics Ltd.'s bank lender of a payment demand and a notice
of intention to enforce security. The estimated book value of the
remaining assets of SCL Electronics Ltd. are $5.7 million with
liabilities of $24.6 million, including $4.9 million owed to the bank as
the largest secured creditor and $16.8 million owed to Simmonds as the
largest unsecured creditor. SCL is a Canadian distributor of audio and
video products. The company¹s plan since last year was to divest the
operating divisions of SCL, and in February, the company received
shareholder approval to sell the discontinued operations in order to
build their investment and merchant banking activities. Simmonds plans
to sell SCL, the last division to be sold, as quickly as possible.
Simmonds is a merchant banking company with an active role in various
strategic investments including interactive gaming technology, Internet
service sites and wireless communications.
BREED Seeks Court Approval to Hire Senior Executive
BREED Technologies Inc. has filed a motion with the U.S. Bankruptcy
Court for the District of Delaware seeking authorization to enter into a
three-year employment agreement with current BREED Board member, John
Riess, according to a newswire report. The motion notes that a Special
Evaluation Committee of the Board is in the final stages of evaluating
exit strategies for the company, which include two offers for the sale
of the business and a separate stand-alone plan under which BREED would
emerge from its pending chapter 11 filing under the ownership of lenders
before the petition was filed. Mr. Riess would serve only at the
discretion of the company's Board of Directors.
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