UNOFFICIAL COMMITTEE OF HOLDERS OF TRANS WORLD AIRLINES, INC. 10%
SENIOR SECURED NOTES DUE 1998 REACHES AGREEMENT ON TWA'S RESTRUCTURING
NEW YORK, May 30, 1995 -- The Unofficial Committee (the
"Committee") of TWA's 10% Senior Secured Notes due
1998 (the 10%
Notes"), which represents over 37% of the outstanding 10% Notes, has
reached agreement with TWA on the terms of TWA's latest restructuring
proposal dated May 12, 1995. The Committee believes that the current
proposal is fair and reasonable and that, based upon TWA's current
financial condition and forecasts, it is the best alternative
available to 10% Noteholders. For a variety of reasons the Committee
believes that the restructuring should be accomplished through the
Prepackaged Plan of Reorganization and not through the Exchange Offer.
Therefore, the Committee urges all 10% Noteholders to vote "ACCEPTS"
on the light green single page ballot headed "United States Bankruptcy
Court" and identified as the "Ballot for Accepting or Rejecting
Prepackaged Plan," and to sign and return it pursuant to the
instructions enclosed with the solicitation materials being circulated
by TWA. No further action is necessary on the part of 10% Noteholders
wishing to support the Prepackaged Plan. In particular, the Committee
believes that 10% Noteholders should not tender their 10% Notes and
should not sign or return the dark green multipage "Consent and Letter
of Transmittal" or the "Consent to Consent Matters" included in that
Under the terms of the Prepackaged Plan, each $1,000 face amount of
10% Notes would receive the following (each of which is more fully
- $754.4892 face amount of 12% Senior Secured Notes due 1998
- 10.2078 shares of Common Stock
- 24.4099 TWA Equity Rights
- the right to receive Conditional Consideration of up to:
- 14.6460 ten-year Warrants or $48.8199 Cash or some combination of the two
- 19.9718 additional shares of Common Stock
- 1 Contingent Payment Right with a maximum face amount of $80.1796.
12% Senior Secured Notes due 1998
The 12% Senior Secured Notes due 1998 (the "New 12% Notes") will have
a total of $170 million face amount outstanding and will be secured by
all the collateral which currently secures the existing 10% Notes with
the exception of the second liens on four 767-200 aircraft. The New
12% Notes will accrue interest from February 1, 1995, and will
therefore have accrued a full six months of interest by the next
scheduled interest payment date of August 1, 1995. The New 12% Notes
will be transferable. The principal of the New 12% Notes will be
redeemable for cash only. So long as, among other things, no default
has occurred, the common stock is listed, and the common stock has not
traded below $3.00 per share during certain specified time periods,
the first four interest payments due on the New 12% Notes may be paid
at TWA's option in common stock valued at 90% of the average trading
value prior to the interest payment date. If the New 12% Notes trade
at a price of greater than approximately 93% of face during a specific
pricing period following the restructuring, and are listed and there
is no default under the New 12% Notes, then the interest rate may be
reset prospectively to as low as 10%. This reset mechanism is a
The shares of Common Stock to be issued to holders of 10% Notes will
be transferable. 10% Noteholders should bear in mind that each of
these shares of Common Stock is not equivalent to the existing shares
which are currently trading for approximately $1 each. The Company's
capital structure is being altered. Significant amounts of debt
(including a portion of the 10% Notes, the 8% Notes, and the PBGC
Notes) are being eliminated, and the existing Common Stock is being
reduced in a 46.8722- to-one reverse split.
TWA Equity Rights
The TWA Equity Rights to be issued to holders of 10% Notes will allow
the holders to purchase additional shares of Common Stock during the
21-day period beginning on the 23rd day after the Effective Date of
the Prepackaged Plan at a 40% discount, subject to a minimum level of
$7.20 per share. This minimum may be lowered by TWA. The TWA Equity
Rights are not transferable.
The right to receive Conditional Consideration is triggered if the
value of the equity securities received by 10% Noteholders is less
than certain target levels. This right to receive Conditional
Consideration will be transferable. Should the value of the Equity
Rights received by 10% Noteholders not reach a minimum of $48.8199 per
$1,000 face amount of 10% Note, TWA would be obligated to issue up to
14.6460 ten-year Warrants or up to $48.8199 in cash per $1,000 face
amount of 10% Note or some combination of the two. In addition, if the
value of the Common Stock, Equity Rights, Warrants, and/or cash
received per $1,000 face amount of 10% Note does not reach $199.7177
(plus interest at 12% from Aug. 15, 1995 to the 90th day after the
Effective Date), TWA would be obligated to issue up to 19.9718
additional shares of Common Stock per $1,000 face amount of 10% Note.
Contingent Payment Rights
The Contingent Payment Rights are designed to provide an additional
layer of protection if the entire package of securities to be received
by 10% Noteholders is worth less than certain target levels. The
Contingent Payment Rights will be transferable, and TWA's obligations
under the Contingent Payment Rights will be secured by the collateral
backing the New 12% Notes. Should the New 12% Notes trade at an
average price of approximately 87% of face or less during a specified
pricing period, TWA would be obligated to pay $25 on each of Feb. 1,
1996 and Aug. 1, 1996 in cash, together with interest at 12% from Feb.
1, 1995. Further, if the value of the Common Stock, Equity Rights,
Warrants and/or cash received by 10% Noteholders does not reach
$199.7177 (plus interest at 12% from Aug. 15, 1995 to the 90th day
after the Effective Date) per $1,000 face amount of 10% Note after
receipt of the Conditional Consideration, TWA would be obligated to
pay up to $15.0898 (plus accrued interest at 12% from the 90th day
after the Effective Date) on each of Feb. 1, 1997 and Aug. 1, 1997.
Thus, TWA's obligations under the Contingent Payment Rights could
total as much as $80.1796 plus accrue interest per $1000 face amount
of 10% Note.
The above description is a brief summary of the major elements of the
Prepackaged Plan as it relates directly to the holders of 10% Notes.
It is not a complete description. Information in this Notice was
derived from information set forth in TWA's Proxy Statement/Prospectus
dated May 12, 1995, and is qualified in its entirety by the
information set forth therein. 10% Noteholders should refer to the
Proxy Statement/Prospectus for the specifics of TWA's out-of-court
restructuring proposal and its proposals to other creditor and
shareholder groups and for the formal and more detailed description of
the Prepackaged Plan.
The Committee believes that this proposal, if implemented through the
Prepackaged Plan of Reorganization, provides the best outcome to 10%
Noteholders. In particular, the Committee believes that if the
Prepackaged Plan is not endorsed by affected creditors and confirmed,
the recoveries of creditors would be significantly delayed and
uncertain in amount. For further information please call Morrow & Co.
at 800-662-5200. Questions regarding missing solicitation materials or
ballots or how or where to return ballots should be directed to TWA's
Information Agent, D.F. King & Co., at 800-207-3156.
/CONTACT: Charles MacDonald of Elliott Associates, L.P., 212-974-2151
for the Committee/
SPORTSTOWN AGREES TO SELL ITS INVENTORY AND OTHER ASSETS TO THE SPORTS
ATLANTA, Georgia--May 26, 1995-- SportsTown,
Inc. (Nasdaq-NNM: SPTNQ),
announced that it has agreed to sell its inventory and certain of its
other assets to The Sports Authority (NYSE: TSA). Under the proposed
agreement, The Sports Authority will also take by assignment sixteen
of the company's leases on sixteen of the twenty- three stores
presently operated by the company.
The company filed for reorganization under Chapter 11 of the
Bankruptcy Code on Feb. 7, 1995. The sale to The Sports Authority
was requested by The Official Committee of Unsecured Creditors in that
reorganization preceding. The terms of such sale were negotiated with
the assistance of the Creditors' Committee. The proposed sale is
subject to approval by the Bankruptcy Court.
Net proceeds from this sale, after payment of certain expenses, will
be distributed among the company's creditors pursuant to a plan which
the company expects to file within the next ninety days.
SportsTown was founded in 1987 and, prior to filing for
reorganization, had grown to a chain of 31 sporting goods mega-stores
operating in Georgia, Texas, Virginia, Oklahoma and the Carolinas with
annual revenues of approximately $200 million.
/CONTACT: Thomas K. Haas, Chairman and CEO, or Gary L. Stewart, Senior
Vice President, 404-246-5300, both of SportsTown, Inc./
The Sports Authority Inc. confirms an offer to purchase assets of
FORT LAUDERDALE, Fla.--May 26, 1995--The Sports
Authority Inc. (NYSE:TSA), the nation's largest full-line sporting
goods retailer, Friday confirmed published reports that the company
has submitted an offer to purchase certain assets of HREF="chap11.sportstown.html">SportsTown, Inc. (Nasdaq-NNM: SPTNQ).
This offer was jointly submitted with two other firms, Nassi Bernstein
Co. Inc. and Alco Capital Group Inc. It was filed with a motion by the
Creditors Committee in U.S. Bankruptcy Court and is subject to
approval by the court.
Jack Smith, Chairman, Chief Executive Officer, and President stated:
"We are excited about the opportunity to solidify our position in
existing markets, but equally as excited about our advancement into
new markets. The locations fit into our long term strategic plans of
pursuing market share and being the nation's first choice for sporting
goods." Smith also added, "The success of our strategies has provided
us with the financial wherewithal to step up and make the offer we
Sportstown is an operator of large format retail sporting goods and
recently filed Chapter 11 Bankruptcy on Feb. 7, 1995. Sportstown
currently operates 23 locations in Georgia, Texas, Oklahoma, and the
The Sports Authority operates 110 megastores in 22 states across the
United States. The company has opened stores in Fort Myers, Fla.,
Kissimmee, Fla., and Danbury, Conn., in 1995.
CONTACT: The Sports Authority Inc., Fort Lauderdale
Jack A. Smith, Chairman, President & CEO
Richard J. Lynch Jr., Sr. VP & Chief Financial Officer
Alexander L. Stanton, Investor Relations/
Treasury Manager, 305/677-6003
Confirmation hearing regarding Plan of Reorganization for Value
Merchants is recessed
MILWAUKEE, Wisconsin--May 26, 1995--The confirmation hearing
today in The United States Bankruptcy Court in Milwaukee regarding the
Plan of Reorganization for Value Merchants Inc.
recessed to June 15, 1995 pending finalization of a commitment for an
exit financing facility for the company and notification to creditors
and shareholders of Plan modifications.
A notice will be sent to all creditors and shareholders explaining the
modifications which have been made to this Plan. The Plan will be
considered for confirmation on June 15, 1995. It is anticipated that
if the Plan is confirmed, the effective date will be approximately
June 27, 1995.
In the balloting in connection with the Plan, unsecured creditors and
shareholders of Value Merchants Inc. and unsecured creditors of its
subsidiary company Everything's A Dollar voted to accept the Joint
Plan of Reorganization. Of those casting ballots, 98 percent of the
Value Merchants unsecured creditors, 96 percent of the Everything's A
Dollar unsecured creditors and 93 percent of the Value Merchants
shareholders voted to accept the Joint Plan.
``Over the past several weeks, we have been in intense negotiations
with our lenders to reformulate the company's exit financing package
to satisfy their requirements and improve the company's capital
structure,'' Steven J. Appel, president and chief executive officer
stated. ``When implemented, the new financing package is expected to
significantly improve the company's working capital and ability to
properly merchandise its operations,'' he said. According to Appel,
what remains is for the lenders to formally commit and for all
participants to document the transaction in writing. Drafts have
already been circulated.
Regarding corporate governance, the Alternate Board of Directors as
provided for in the Plan will become effective 10 days after the
company emerges from bankruptcy since it is unlikely that the sale of
unsecured creditors new stock will take place at this time. To assure
the company's lenders there will be continuity of management, Appel
has been added to the new board as its chairman and will continue to
serve as chief executive officer.
CONTACT: Value Merchants Inc., Milwaukee
Gary I. Kastel, 414/274-2976