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Harvard Industries May Purchase Breed Technology
Harvard Industries Inc. said it is considering acquiring bankrupt
automotive safety-restraints supplier Breed Technology, according to a
newswire report. In documents recently filed with the U.S. Bankruptcy
Court for the District of Delaware, Breed said that the instrument for
maximizing its creditors' recoveries is 'currently the subject of some
dispute' among the company's secured lenders and certain customers.
While there are two offers on the table for Breed, the company says it
is also considering a 'stand-alone' plan of reorganization. However,
DaimlerChrylser Corp., Breed's leading customer, has said it would not
support a stand-alone reorganization. Yesterday, Breed sought a
four-month extension of its exclusive period to support a chapter 11
reorganization plan at a hearing before Bankruptcy Judge Mary F.
Walrath.
The Lakeland, Fla.-based Breed filed for chapter 11 protection last
September and recently sought court authority to enter into an
employment agreement with John Reiss as senior executive, claiming that
his hiring is essential to its exit strategy. However, DaimlerChrysler
argued that Reiss wouldn't meet the Bankruptcy Code's definition of
'fair-minded professional,' and it contends that Reiss's duties would
amount to those of a chapter 11 trustee. Breed's creditors' committee
objected to Reiss's proposed hiring, saying that his services are not
necessary and his $700,000 annual pay is too high. DaimlerChrysler also
maintains that Breed does not need Reiss because it has used little of
its debtor-in-possession financing and will record a $90 million annual
net profit this year due to the work of its current bankruptcy
professionals, Development Specialists Inc. and Wasserstein Perella &
Co.
AgriBio Tech Announces Tentative Sale Agreement
AgriBio Tech Inc. (ABT), a seed company specializing in the forage and
turfgrass market, announced yesterday that it has arrived at an
agreement in principle to sell a considerable amount of its assets
relating to its forage business unit, according to a newswire report.
The business unit could sell for an estimated $16 million in cash,
subject to adjustment at closing. As part of the transaction, the
purchaser is expected to assume the Henderson, Nev., company's
obligations under certain amended production contracts with its growers.
This sale, along with the nature of other forage-related assets retained
by the company, is expected to create a value of approximately $30
million. The deal is the latest in a series of liquidating sales
undertaken as part of the company's continuing chapter 11 proceedings.
ABT has been subject to federal bankruptcy court supervision since late
January.
Stone & Webster Shareholder Suit Stayed Due to Bankruptcy
Filing
A shareholder lawsuit against Stone & Webster Inc. will be stayed as a
result of the company's chapter 11 bankruptcy protection filed on
Friday, according to a newswire report. The Boston engineering and
construction holding company's attorneys and shareholders issued a press
release yesterday stating that legal action will continue against the
company's officers named as defendants, including Chief Executive H.
Kerner Smith. The suit alleges that the company manipulated financial
statements by overstating results of operations, revenue, expenses and
income for fiscal year 1999. Several shareholder lawsuits also have
recently been filed against the company.
Factory Card Outlet Enters Into Funding Agreement
Factory Card Outlet Corp. announced yesterday that it and its creditors'
committee have entered into a non-binding letter of intent with
Saunders, Karp & Magee (SKM), according to a newswire report. SKM, a
Connecticut-based investment company, will provide Factory Card Outlet
with sufficient funding to enable it to emerge from chapter 11. The
letter of intent is subject to the completion of a reorganization plan
that would have to be voted on by creditors. The Naperville, Ill.,
company's letter of intent outlines several initiatives and terms of a
transaction plan of reorganization in which SKM would invest $19.5
million. SKM would then receive 90 percent of the common stock of
Factory Card Outlet upon its emergence from chapter 11. The company also
announced that the bankruptcy court has granted the company's motion to
extend exclusive periods during which it may file a reorganization plan.
'We are hopeful that these events will lead to the company's successful
emergence from chapter 11 by fall of this year,' said William E.
Freeman, president and chief executive officer of Factory Card Outlet
Corp. Factory Card Outlet is a chain of company-owned retail stores
offering an assortment of party supplies and greeting cards. The company
filed for chapter 11 in March 1999, and is currently operating as a
debtor-in- possession.
Iridium Argues for Court to Approve Castle Harlan Bid
Attorneys for bankrupt Iridium LLC argued yesterday for the bankruptcy
court to accept merchant bank Castle Harlan's bid to save the company
from crashing billions of dollars' worth of satellites, according to
Reuters. Attorneys claim their $50 million offer was the best available
option. 'They came in at a time when no other bids were on the table,'
said Iridium attorney William Perlstein at a hearing in U.S.
Bankruptcy Court in New York. 'The bid is a fraction of what the system
cost, but substantially higher than the individual asset bids.' Under
the proposed plan, Castle Harlan would pay $50 million for the satellite
telephone company and 5 percent in equity interest. Perlstein and
Iridium will present Castle Harlan's final bid to the court on July 21.
Neil Forest, a lawyer for Venture Partners, which made a competing offer
for Iridium, objected to a $2 million break-up fee offered by Castle
Harlan, saying it unfairly raised the price for bidders. Perlstein said
Venture Partners failed to provide proof that it could fund its $50
million bid beyond a $2 million deposit. Bankruptcy Judge Cornelius
Blackshear said he would waive the break-up fee if Venture Partners
could come up with the $50 million within 10 days. Judge Blackshear
scheduled another hearing for July 31 to rule on bids for Iridium.
Court Approves Vista
Eyecare's Key Employee Retention Plan
Vista Eyecare Inc. (VSTAQ) won bankruptcy court approval of a key
employee retention program for 935 of its employees, according to a
court order. Although no objections were filed to the program, at a
hearing on May 16, the Lawrenceville, Ga.-based eye care retailer made
certain modifications to
its original plan based upon consultations it had with its official
committee of unsecured creditors before the hearing, according to the
order.
In addition, the company announced yesterday that it has retained
McDonald Investments to aid the company in evaluating tactical
alternatives during its chapter 11 proceedings, subject to court
approval, according to a newswire report. Vista Eyecare, Lawrenceville,
Ga., one of the nation's largest retail optical companies, filed for
chapter 11 protection in April.
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