ELJER INDUSTRIES REPORTS COURT RULING IN U.S. BRASS BANKRUPTCY
DALLAS, Texas--May 17, 1995--Eljer Industries, Inc.(NYSE:ELJ)reported
today that the Bankruptcy Court presiding over the Chapter 11 case of its indirect
subsidiary, United States Brass Corporation, has denied
approval of the proposed disclosure statement filed by U.S. Brass with respect to its
proposed reorganization plan. U.S. Brass may appeal the court's ruling or may amend its
Under the proposed plan, a trust to be funded by Eljer and other settling
parties was to be established to pay in full all claims relating to certain
polybutylene plumbing systems manufactured and marketed by U.S. Brass. The
Bankruptcy Court indicated that it did not believe it could approve a plan
that precluded actions against settling parties to the trust. In separate
action, the Bankruptcy Court also continued until June 6 the hearing to
consider objections to the proposed disclosure statement filed by the
Polybutylene Plaintiff's Committee in connection with its proposed plan of
reorganization for U.S. Brass.
Scott Arbuckle, Chairman of U.S. Brass and President and Chief Executive
Officer of Eljer Industries, said, "We continue to believe that a successful
plan will be developed to reorganize U.S. Brass and to arrange for the
payment in full of all U.S. Brass liabilities."
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., Dallas
George W. Hanthorn, (214) 407-2600
Lynn Morgen/June Filingeri
Terence Rooney/Stan Froelich, Media Contact
Ken Pieper (214) 663-9321
FLEMING CONFIRMS THAT BANKRUPTCY COURT APPROVED MEGAFOODS' DECISION TO MOVE ITS
BUSINESS TO A DIFFERENT FOOD SUPPLIER AND CITED HIGHER COSTS
OKLAHOMA CITY, Oklahoma--May 16, 1995-- Fleming Companies Inc. (NYSE: FLM),
has received confirmation today that the federal bankruptcy court in Phoenix
has approved Megafoods' decision to move the
majority of its $150 million food distribution business in the Arizona market to a
different food supplier on June 6. The bankruptcy judge also cited that Megafoods'
change of supplier was at least $1 million more expensive for Megafoods than Fleming's
proposal. Despite this fact, the court indicated it would not interfere with Megafoods'
business decision to change suppliers.
Fleming Companies Inc., and Megafoods were parties to a supply agreement
that gave either party the right to terminate the agreement with 60 days
notice. Megafoods advised Fleming of its decision to change its primary
distributor on April 6, 1995. Megafoods said today that they will continue to
purchase approximately $17 million in produce from Fleming.
While Fleming agrees with the bankruptcy judge's assessment of the negative
cost impact, the company doesn't agree with the rationale for changing
distributors. Fleming recognizes, however, Megafoods' right to change
distributors and will assist in any way possible to make this a smooth
transition. Fleming will honor our commitment to meet Megafoods' product
supply and service requirements during the interim.
Fleming will continue to have a substantial business base in its Phoenix
division with sales of more than $1 billion annually to more than 400
locations, including Food 4 Less, ABCO, Smitty's, Southwest Supermarkets and
The company will adjust its Phoenix operations' overhead costs and pursue
new business opportunities to compensate for the Megafoods business move and,
as a result, anticipates that its earnings will be only marginally affected.
/CONTACT: Nancy Del Regno, Corporate VP of Communications, of the
Fleming Companies, 405-841-4225/