NEW YORK, February 28, 1995 -- The following statement was released
today by Edwin B. Mishkin of href="dir.firm.cleary.html">Cleary, Gottlieb, Steen & Hamilton:
Because of the serious financial difficulties of href="chap11.adler.html">Adler, Coleman Clearing
Corp. and the attendant risk to customers, the United States District
for the Southern District of New York on February 27, 1995 found that the
customers of that firm needed protection under the href="Securities" target=_new>http://www.law.cornell.edu/uscode/15/ch2B-1.html">SecuritiesInvestor
Protection Act of 1970 ("SIPA") and appointed me trustee for the
liquidation of the firm's business.
The primary purpose of SIPA is to protect individual investors from
financial hardship resulting from the failure of a member firm. The
Securities Investor Protection Corporation ("SIPC"), created under that Act,
stands ready to advance funds which may be required to afford protection for
securities customers, within limits set forth in the Act. SIPC will advance me
funds necessary to satisfy the claims for securities of each customer up to
$500,000, except that in the case of claims for cash, as distinct from
securities, not more than $100,000 may be paid with funds advanced by
Within a few days, I will publish notice of the proceeding's commencement in
one or more newspapers of general circulation. A copy will also be mailed to
all recorded customers of the debtor with open accounts within the preceding
SIPA defines "customers" as persons with claims on account of securities
received, acquired or held by the debtor in the ordinary course of its
broker-dealer business from or for securities accounts of such persons (1) for
safekeeping, (2) with a view to purchases, (3) to cover consummated sales, (4)
pursuant to purchases, (5) as collateral security, or (6) for purposes of
The term "customer" also includes persons with claims against the debtor
arising from sales or conversions of such securities, and persons who have
deposited cash with the debtor for the purpose of purchasing securities. The
term does not include, however, persons to the extent that they have claims
for property which by contract, agreement, or understanding, or by operation
of law, is part of the capital of debtor or is subordinated to the claims of
the debtor's creditors. Nor does it include any person to the extent that the
person's claim arises from transactions with a SIPC member's foreign
A customer is required to file a written statement of claim. A claim form
accompanies each notice mailed to customers and claims must be filed within
six months after the publication of notice, with a few exceptions.
SIPA's protections apply to most types of securities such as notes, stocks,
bonds, debentures and certificates of deposit. No protection, however, is
provided for unregistered investment contracts or for any interest in a
commodity contract, or commodity option.
Shares of money market mutual funds, although often viewed as cash, are in
fact securities. When held by a SIPC member in a customer's securities
account, they are protected as any other covered security. SIPC protection,
however, does not cover the decline or loss in value of these or any other
Cash balances are protected under SIPA if the money was deposited or left in
a securities account for the purpose of purchasing securities. This is true
whether or not the broker pays interest on the cash balances. Of course, cash
balances maintained solely for the purpose of earning interest are not
SIPC presumes that cash balances are left in securities accounts for the
purpose of purchasing securities. It would require substantial evidence to
the contrary to overcome this presumption. Standing alone, the fact that a
cash balance was earning interest and was not used to purchase securities for
a considerable period of time, say four or five months, would not be
sufficient to overcome the presumption.
Transfer of Customer Accounts
SIPA authorizes the trustee, with SIPC's approval, to transfer some or all
customer accounts to another SIPC member if a transfer will facilitate prompt
satisfaction of customer claims and liquidation of the debtor's business. A
transfer's feasibility depends upon several factors. These include the
condition of the debtor's books and records, and availability of a SIPC member
interested in assuming the debtor's customer accounts, capable of handling the
transfer and effectively servicing the new accounts.
Minimizing disruption in customer access to their cash and securities is the
major purpose of the transfer. A customer whose account has been transferred
may deal with the receiving SIPC member or may transfer the account to another
Satisfaction of Customer Claims
When a transfer is not feasible, customer claims are satisfied by the
trustee in the following manner:
1. "Customer name securities" are distributed first. "Customer name
securities" are those securities on hand and registered in a customer's name
or were on the filing date in the process of being transferred to the
customer's name pursuant to the debtor's instructions. There is no limit on
the value of such property which will be returned. Not included, however, are
securities on hand which are registered in customer name and in negotiable
form. Those securities are considered part of "customer property."
2. Next, the customer's "net equity" is computed for those whose claims
were not completely satisfied by the distribution of "customer name
securities." "Net equity" is simply the filing date value of securities and
cash the debtor owes the customer less any amount the customer owes the
If a customer has a debit balance, he may, with the trustee's approval and
within a time period determined by the trustee, pay the debit balance in order
to have a claim for the securities in the account.
Net equity claims are satisfied, to the extent possible, by allocating
"customer property" to claimants. "Customer property" means cash and
securities (except "customer name securities" delivered to the customer) at
any time received, acquired, or held by or for the account of a debtor from or
for the securities accounts of a customer. This includes the proceeds of any
such property transferred by the debtor, including property unlawfully
If securities are insufficient to satisfy claims from "customer property,"
the trustee is obliged to purchase the missing shares if a fair and orderly
market exists. If that cannot be done, the trustee allocates available
securities pro rata and makes up the shortage by paying customers cash in lieu
thereof. The amount paid is based on the value of the securities on the
3. If the customer's remaining net equity reflects a long securities
position and/or a credit balance, the trustee is obliged to satisfy the claim
from SIPC advances up to a maximum of $500,000 with the following limitation:
on claims for cash (as distinct from claims for securities) not more than
$100,000 may be paid from SIPC advances.
/CONTACT: Adler, Coleman Clearing Corporation, 212-422-9780/
CINCINNATI, February 28, 1995 -- Eagle-Picher
Industries (OTC Bulletin
Board: EPIH.U) today filed a plan of reorganization (the Plan) with the United
States Bankruptcy Court, Southern District of Ohio, in Cincinnati. The Plan
is being proposed jointly with the Injury Claimants' Committee (ICC) and the
Legal Representative for Future Claimants (RFC). The ICC represents
approximately 150,000 persons alleging injury due to exposure to
asbestos-containing products that Eagle-Picher manufactured from 1934 to 1971.
Future personal injury claimants are represented by the RFC.
On January 7, 1991, Eagle-Picher and seven of its domestic subsidiaries
filed petitions for reorganization under chapter 11 of the U. S. Bankruptcy
Code. The filings were necessitated by the substantial costs of asbestos
personal injury litigation and not by any fundamental problems with the
An independently administered trust (the PI Trust) will be established
pursuant to the Plan, and all present and future asbestos and lead personal
injury claims will be channeled to the PI Trust. The PI Trust will be
responsible for resolving and satisfying all such claims.
Priority claims and convenience claims (claims of unsecured creditors which
are, or are reduced to, $500 or less), will be paid in full and in cash
pursuant to the proposed Plan. All other prepetition unsecured creditors and
the PI Trust will receive pro-rata distributions of cash, debt securities, and
common stock of reorganized Eagle-Picher (as discussed below). These
distributions will be proportionate to their share of the aggregate amount of
allowed prepetition unsecured claims, the total amount of which is estimated
by the Company to be approximately $1.652 billion. Of this amount, $1.5
billion (approximately 91 percent) represents, for purposes of the Plan, the
liability attributable to all claims being channeled to the PI Trust and the
amount that will be used to determine the PI Trust's pro-rata share. The
remaining $152 million (approximately 9 percent) represents the presently
anticipated allowed amount of environmental and other prepetition unsecured
claims, which amount is subject to change.
Major elements of the proposed Plan are:
Implementation of the proposed Plan and the treatment of claims and equity
interests as provided therein is subject to confirmation of the Plan in
accordance with the provisions of the Bankruptcy Code. Parties in interest in
the chapter 11 case may object to confirmation of the proposed Plan.
The Company hopes that the proposed Plan will move through the confirmation
process on a timely basis. It is not possible to predict how long this
process will take, but the Company is hopeful that the Plan will become
effective before the end of 1995.
/CONTACT: J. Rodman Nall of Eagle-Picher Industries, 513-721-7010/
TORONTO, February 28, 1995--St.
Andrew Goldfields Ltd. (SAS-TSE), announces
that the Ontario Court of Justice (General Division), has granted an extension
of the Corporation's current Stay of Proceedings under the Companies'
Creditors Arrangement Act (``CCAA''), from February 28, 1995 until March 31,
1995. The Corporation intends to file its formal Plan under the CCAA before
March 31, 1995 with a view to seeking approvals from its creditors and
shareholders before May 31, 1995.
/For further information: Herbert S. Gasser, President and Chief Executive
Officer, Telephone: (416) 597-0969/