GRAND RAPIDS, Mich., March 7, 1995 -- Gantos,
GTOSQ) today announced that the U.S. Bankruptcy Court has confirmed its
proposed plan of reorganization, paving the way for the company to emerge from
Chapter 11 shortly as a strong and competitive specialty retailer of women's
apparel and accessories.
Court approval of the plan culminates a 16-month turnaround at Gantos, which
launched an aggressive program for returning the company to financial health.
This program included closing 45 stores, streamlining operations, reducing
corporate expenses and implementing merchandising and marketing
The bankruptcy court's confirmation of the plan follows an election by
Gantos' creditors and shareholders in which they voted overwhelmingly to
support the company's proposal. In fact, more than 99 percent of the creditor
class that voted and 93 percent of the shareholder class that voted, voted in
favor of Gantos' plan.
Gantos' plan of reorganization calls for general unsecured creditors to
receive a combination of equity valued at $4.16 per share and cash or notes.
The anticipated value to creditors is equal to 100 cents on the dollar for
their claims, based upon an enterprise value of the company of $62.5 million.
For the plan to be accepted, at least 50 percent of each class of creditors
(with certain exceptions), representing at least two-thirds of that class'
pre-petition debt, had to vote to approve it. Current shareholders will
receive new shares comprising approximately 35% of the company's equity.
Shareholders had to accept the plan by at least two-thirds in amount.
"We are very pleased with this vote of confidence from our creditors and
shareholders," said Douglas Gantos, chief executive officer of Gantos. This
support has made it possible for us to construct and confirm a plan that is in
the best interests of all involved parties."
"Our management team is grateful for the determination and hard work of all
of Gantos' employees, as well as our customers, suppliers, advisers, and the
others who assisted us throughout the reorganization process. We are
appreciative of the outstanding work performed by our attorneys at
Reavis & Pogue and our financial advisors at href="dir.firm.arthur.andersen.html">Arthur Andersen and href="dir.firm/price.waterhouse.html">Price Waterhouse."
"Turning around a company is never easy," Mr. Gantos continued, "and this
case was no exception. We believe, however, Gantos has retained customer
loyalty and name recognition in its core markets in the Midwest. Our
objective in the years ahead will be to build upon these strengths. We will
continue to emphasize customer service, convenience, and carefully edited
selections of quality merchandise at a good value."
"We plan to grow our business by adding stores in a strategic and
economically effective manner as the situation warrants."
$40 Million in Exit Financing
As previously announced, Gantos has received a commitment for $40 million in
exit financing from a bank group led by href="dir.firm.matwest.html">Natwest, subject to a borrowing base.
"The commitment of $40 million in exit financing is an important part of our
efforts to restore Gantos to full financial health," Mr. Gantos said.
Gantos' plan of reorganization was confirmed by Bankruptcy Judge JoAnn C.
Stevenson of the U.S. Bankruptcy Court for the Western District of Michigan on
March 7, following a public hearing in Grand Rapids, Michigan. The Court had
approved Gantos' disclosure statement -- which included the proposed plan of
reorganization, the company's business plan, and other pertinent information
-- on January 19, 1995, following months of intense negotiations among the
company, its creditors and other interested parties.
The company filed for court protection under Chapter 11 of the U.S.
Bankruptcy Code on November 12, 1993. The date of Gantos' official emergence
from Chapter 11 has not yet been set by the Court, but is expected to be in
late March or early April.
Based in Grand Rapids, Michigan, Gantos is a specialty retailer of women's
apparel and accessories. The company currently operates 114 stores with over
2,000 employees in 23 states.
/CONTACT: Frederick Marx of Gantos, 810-855-6777/
NEW YORK, March 7, 1995 -- Edwin
Mishkin, the SIPA Trustee of Adler
Coleman, announced yesterday that the Bankruptcy Court of the Southern
District of New York approved agreements between the Trustee and three
clearing brokers -- JB Oxford & Co. Inc., U.S. Clearing Corp. and Hanifen,
Imhoff Clearing Corp. Collectively, the firms have agreed to accept and
service substantially all customer accounts introduced by brokers other than
Hanover Sterling. Under each of the agreements, customers who desire to place
their accounts at different firms may move their accounts to other firms at no
charge within three months of the date of transfer.
JB Oxford & Co., Inc. will receive customer accounts introduced by Baldwin
(Leigh) & Co., Inc.; Bellmore Asset Management; Biltmore International;
Biltmore Securities, Inc.; Blackford Securities Corp.; BMS Securities, Inc.;
CTAS; Datek Securities Corp.; Eneric Financial Services, Inc.; FIBA Nordic
Securities, Inc.; Greenway Capital Corp.; Helix Securities, Inc.; John D.
McKeown & Co., Inc.; J S F Securities Corp.; Kalin Associates, Inc.;
Lancaster, Leeds & Co., Inc.; Lek, Schoenau & Co., Inc.; Lynch, Jones & Ryan;
M Ramsey King Securities; M.C. Harrison & Co.; Maclaren Securities, Inc.;
Magna Investment Group, Inc.; Mentor Securities; Monroe Parker Securities,
Inc.; Pacific Capital Management; Richard A. Rosenblatt & Co.; Rickel &
Associates, Inc.; Roberts & Ryan Investments, Inc.; SK International;
Strategic Risk Management; Stratton Oakmont Inc.; Todd & Todd Investors and
Wall Street Investment Corp. Accounts introduced by Acher Wollman; AFC
Partners; Ash & Company; Farina & Co.; Garden State Securities; Magna
Investment Group, Inc.; Mascera & Co., Inc.; Sharpe Capital, Inc. and Wolff,
Hansen & Company, as well as the accounts maintained at Adler Coleman by CMJ
Specialist, will be transferred to U.S. Clearing Corp. Finally, accounts
introduced by A.R. Baron & Co., Inc. and Duke & Company will be transferred to
Hanifen, Imhoff Clearing Corp.
/CONTACT: John Cullum of href="dir.firm.cleary.gottlieb.html">Cleary, Gottlieb, Steen & Hamilton