ATLANTA, February 7, 1995 -- Sportstown,
Inc. (Nasdaq: href="SPTN)" target=_new>http://www.secapl.com/cgi-bin/edgarlink?SPTN">SPTN
Haas added, "Under Chapter 11, management will have the necessary time to be
able to reposition and to redirect SportsTown, so that the best interests of
the Company's creditors, suppliers, shareholders and other constituencies are
protected. Daily operations will continue as usual. Stores will sell the
same merchandise. Hours of operation will be the same as before the
Clyde S. Fossum, the Company's Chief Financial Officer, stated, "As far as
the Company's customers are concerned, we expect to be able to provide them
with a complete selection of goods and services. We will be contacting our
key vendors immediately to seek their cooperation." Fossum also stated, "With
the support of the vendor community, our lenders and our employees, we expect
to emerge from reorganization as a stronger, more viable, retail
The Company also announced that it had reached an agreement with its senior
lender that will permit the SportsTown to use cash collateral during the
thirty days immediately following the filing while the Company works to
arrange debtor-in-possession financing. The cash collateral arrangement will
permit the Company to acquire the necessary inventory and pay post-petition
bills as they come due.
SportsTown currently operates 29 retail sporting goods mega-stores in
Georgia, the Carolinas, Virginia, Oklahoma and Texas. The Company has
previously announced plans to close two stores and announced today its plan to
close six additional stores as part of its efforts to restructure and
reposition the Company in the Chapter 11 proceeding. The Company's mega-stores
range in size from 42,000 to 55,000 square feet and offer a complete selection
of sports equipment, athletic footwear and leisure apparel.
/CONTACT: Thomas K. Haas, Chairman and CEO, or Gary Stewart, Senior Vice
President, 404-246-5300, both of SportsTown/
TORONTO February 7, 1995--The company announces that on February 2, 1995 it
received court approval for its creditors proposal to settle all outstanding
unsecured debts of the company. In addition, the company announces that all
outstanding litigation has also been settled.
The company has scheduled a shareholders meeting for April 7, 1995 and a
consolidation of the company's shares is being contemplated. It is also
anticipated that the company will identify a new business opportunity to
invest in or acquire.
/For further information: R. Brian Murray, (416) 864-0237/
Vendors and other consumer claimants, such as ticketholders, will receive
about $11 million. This is in addition to the $62 million already paid to
ticketholders with administrative claims. Part of the current $11 million
payment will be used to make payments to subordinated debtholders.
Certain former employees with allowed administrative and priority claims as
well as all employees with general unsecured claims will receive 26,000 checks
for over $19 million. This last payment is in addition to $145 million
previously released by the Estate to employees for priority and administrative
claims. It is also in addition to the $125 million paid to retirees for
health care benefits since Eastern filed for bankruptcy in March, 1989. This
brings the total distribution to former Eastern employees and retirees to over
These payments are being made in accordance with the plan of liquidation
confirmed by the U.S. Bankruptcy Court on December 22, 1994.
"The aggressive effort by the Estate of Eastern Airlines to maximize the
value of the Estate's assets means that we have been able to provide our
former employees, retirees and other creditors with a much greater payment
then originally anticipated," Trustee href="dir.shugrue.martin.html">Martin R. Shugrue said.
Martin R. Shugrue, 305-873-2625;
John J. Sicilian, 305-873-3455, both of Eastern Airlines/