BANKRUPTCY COURT APPROVES MERRY-GO-ROUND ENTERPRISES MANAGEMENT
AGREEMENT WITH MERIDIAN VENTURES' SHULL AND KENNEY; New Management Team
Receives Unanimous Support; Announces Intention to File Consensual Plan
of Reorganization by Mid-Feb
JOPPA, Md.--January 5, 1995--Merry-Go-Round Enterprises, Inc.
(NYSE:MGR) today announced that it received Federal Bankruptcy Court
approval of its proposed management agreement with Meridian Ventures, Inc.
As previously announced, MGRE has hired Meridian, the Hilton Head, South
Carolina turnaround consulting firm, to lead the Company in its efforts
to emerge from Chapter 11. The management agreement calls for Meridian's
Thomas Shull to assume the post of President and CEO of MGRE, and
appoints James Kenney as the Company's Executive Vice President and COO.
The consent motion filed by the Company was unanimously supported in court
today by MGRE's official creditors' and equity committees, as well as its
major creditors, including Fidelity Management & Research Company. MGRE's new
management also said in court today that it intended to file its own plan of
reorganization by mid-February, according to consensual terms proposed last
week by its various stakeholders.
Isaac Kaufman, MGRE's long-time Chief Financial Officer, concurred, saying,
"Tom and Jim have put in motion all of the necessary but difficult decisions
for MGRE to turn the corner financially, and everyone at the Company is
thrilled that we now have the framework of a plan in place which will take us
out from under the cloud of Chapter 11 sooner rather than later."
The outline for a consensual plan of reorganization which was put forth by
the Company and its stakeholders provides for unsecured creditors claims,
estimated at $225 million, to be settled through a combination of $130 million
in cash and debt securities and 75% of the reorganized Company's stock. Under
the proposal, current shareholders would receive 25% of the new shares in
reorganized MGRE. Mr. Shull added, "We are pleased with developments today and
over the past week. Our employment issues are now settled, and we appear to
have a consensual agreement among all stakeholders. This will put our
turnaround initiatives on a fast-track, and we have established an aggressive
time table for confirmation of a reorganization plan as early as this summer."
Shull continued, "Furthermore, it is extremely encouraging to us that we
have the full support of not only our stakeholders but the entire MGRE
management team as well, which is why Jim and I were joined in the court
hearing today by the senior management team. We still have much work to do,
and it is essential that we move forward with a strong team in order to
accomplish our goals."
Meridian's management agreement is based on an initial term of six months,
and will continue thereafter on a month-to-month basis with the mutual consent
of the various parties involved.
Frank Tworecke, President of the Company's Merry-Go-Round and Cignal
divisions, commented on today's progress in court, "For those MGRE employees
who have worked hard over the last twelve months to strengthen our core
businesses, we can now see a light at the end of the tunnel and, with Shull
and Kenney removing the burden of the Chapter 11 process and the operational
initiatives, our merchants can focus on further merchandising improvements and
our efforts to recapture our customer base."
Merry-Go-Round Enterprises, Inc. is a specialty apparel chain selling
contemporary fashions for young men and women.
CONTACT: MWW/Strategic Communications, Inc.
Public Relations - Tel. - 201-507-9500
Contact: Michael W. Kempner / Michael T. Lennon
BANKRUPTCY COURT VACATES ORDER ON EXTENSION FOR FILING U.S. BRASS
DALLAS--January 5, 1995--Eljer Industries, Inc. (NYSE:ELJ) announced
today that the federal Bankruptcy Court vacated an order extending the
period during which United States Brass Corporation had the exclusive
right to file a plan of reorganization in U.S. Brass's Chapter 11
U.S. Brass, an indirect, wholly-owned subsidiary of Eljer Industries, had
received a second extension, through February 20, of the exclusive period.
The Court had entered the order on the second extension without a hearing but
allowed the creditors committees to seek review of the order. The committees
requested the Court to vacate the order and their request was granted at a
hearing on January 3.
U.S. Brass still has the right to file a plan of reorganization and plans to
do so in the near future. As a result of the ruling by the Court, any other
party in interest may also file a plan.
Eljer Industries, Inc. is a leading manufacturer and marketer of high
quality building products, including plumbing, heating and ventilating
products, for the residential and commercial construction, remodeling and
repair, and do-it-yourself markets.
CONTACT: ELJER INDUSTRIES, INC.
George W. Hanthorn, 214/407-2600
Lynn Morgen/June Filingeri
Terence Rooney/Helen Spanakos, Media Contact
or Ken Pieper, 214/701-8851
NBO STORES, INC. FILES VOLUNTARY CHAPTER 11 PETITION; Company's New
Owners Focusing On Downsizing Operations, Identifying Potential
Strategic Partners For Future Growth
FAIR LAWN, N.J.--JANUARY 5, 1995--NBO Stores, Inc. today announced
that, as part of its new owners' plans to downsize and restructure the
company, NBO has filed a voluntary petition for reorganization under
chapter 11 of the Federal Bankruptcy Code. The filing, which was made in
the U.S. Bankruptcy Court for the District of New Jersey in Newark, will
enable NBO to conduct business as usual under the protection of the court
while the new owners reorganize the company's operations.
As previously announced, NBO Stores, Inc. was acquired earlier this week by
Essex Holding, Inc., a private U.S.-based investor group, from Dylex Holdings,
a subsidiary of Dylex Limited, a leading Canadian specialty retailer based in
Toronto. Principals in Essex Holding are William F. Taggart, a private
investor and turnaround specialist, and The Silverman Group, a retail
consulting firm based in Mt. Pleasant, S.C. Mr. Taggart has been named
Chairman of NBO. Stuart Fetter, President of The Silverman Group, has been
named Executive Vice President and a director of NBO.
"Founded more than 20 years ago, NBO Stores remains one of the most
recognizable and popular names in the off-price menswear retailing business,"
Mr. Taggart said. "In the last few years, however, the company has been
hampered by lackluster consumer spending on apparel -- particularly in
menswear -- and by fierce competition. At the same time, NBO's former parent,
Dylex, had experienced difficulties of its own and was not able to support
NBO's needs for inventory, system upgrades, store renovations and expansion.
Nonetheless, we strongly believe that NBO continues to have a great franchise
and are committed to using the reorganization process to ensure that the
company reaches its full potential in the future."
NBO enters the chapter 11 process with no debt owed to its trading partners
or lenders. All of its merchandise suppliers have been paid in full, whether
or not they used factors. In addition, the company believes it has adequate
working capital available to meet its continuing obligations to suppliers and
vendors and to operate in the ordinary course of business during the
"We hope to achieve a successful reorganization as quickly as possible,"
Mr. Taggart said. "Our goal is to downsize the operation to return it to
profitability and then pursue potential opportunities for growth, including a
possible alignment with a suitable strategic partner. The company already has
the right infrastructure in place to achieve this goal, including a very
strong management team led by Gene Kosack, President and Chief Executive
Officer, and Barry Miller, Executive Vice President and Chief Financial
Chain-Wide Clearance Sale Starts Monday
Mr. Kosack, the President and CEO, said: "Today's chapter 11 filing should
not have any impact on our customers. All 34 NBO stores in the metropolitan
New York and metropolitan Washington, D.C. areas are open, well-stocked, and
conducting business as usual. We intend to provide all customers services,
including returns and special orders, as normal."
As part of its filing, NBO has asked the court for -- and expects to receive
-- an order enabling it to continue accepting credit-card payments, honoring
gift certificates, and paying employees without interruption.
"Our plan to improve profitability over the long-term is to downsize the
organization by closing a significant number of underperforming stores," Mr.
Kosack said. "We will begin this process next Monday (January 9) by holding
store-closing sales at our locations in Lincoln Center in Manhattan, Bay
Parkway in Brooklyn, and Westport, Conn. We also are initiating a chain-wide
clearance sale on Monday."
Founded in 1971, NBO Stores, Inc. currently operates 31 off-price menswear
stores in the metropolitan New York market and 3 stores in the metropolitan
Washington, D.C. market. The company has annual sales of approximately $70
million and roughly 750 employees, including 50 at its corporate headquarters
in Fair Lawn.
William Taggart, the new chairman of NBO, was until recently Chairman of
Herman's Sporting Goods, Inc., a specialty retailer based in Carteret, N.J.,
which recently completed a highly successful chapter 11 reorganization. Mr.
Taggart is also the Chairman of The Taggart/Fasola Group, a turnaround
management firm based in New Jersey. The founder of Taggart's Driving
Schools, he has served as a commissioner of the New Jersey Turnpike Authority
and the New Jersey Sports and Exposition Authority, which operates the
CONTACT: Kekst and Company