Columbia Western Inc. announces resignation of Arthur A. Riedel
PORTLAND, Ore.--June 23, 1995--Columbia
Western Inc. (OTC Pink Sheets:CLMWQ), formerly known as Riedel
Environmental Technologies Inc., announced today that Arthur A. Riedel has
resigned his positions as chairman of the board of directors,
secretary and executive vice president of Columbia Western Inc.
effective June 21, 1995.
The company filed for Chapter 11 protection under the Federal
Bankruptcy Laws on May 17, 1995, and filed on May 26, 1995, a plan
of reorganization to facilitate the distribution of its assets to
its constituencies. Riedel had been chairman of the board of the
company since January 1986 and had previously held positions as CEO,
president and COO of the company.
Under the plan of reorganization filed by the company, unsecured
creditors will be provided with the opportunity to accept stock in
Pine Brook Capital Inc., a to-be-formed Delaware corporation with
creditor-endorsed management that will acquire from Columbia Western
the stock of World Security Services Corp. and certain cash. Riedel
will not participate in the operation or management of Pine Brook
Capital Inc. The board of directors of Columbia Western stated that
it wished Mr. Riedel well in his future endeavors.
CONTACT: Columbia Western Inc., Portland, Ore.
Stanford Springel, 508/797-3067
BRADLEES OBTAINS CHAPTER 11 PROTECTION - Chemical Bank to Provide
Access to Cash to Continue Normal Operatios
BRAINTREE, Mass.--June 23, 1995--
Bradlees, Inc. (NYSE: BLE), today announced that the Company and its subsidiaries
had filed today for protection and will reorganize under Chapter 11 of
the U.S. Bankruptcy Code in the Southern District of New York.
Bradlees' officials also announced that Chemical Bank has agreed
to provide the Company with $250 million in Debtor In Possession
financing. This line of credit, which is subject to court approval,
will provide the company with the cash and liquidity so that it can
conduct its operations and pay for merchandise shipments at normal
levels while it prepares a reorganization plan. The Company said
that its stores will continue normal operations and that employee
salaries, wages and benefits will continue uninterrupted.
Mark A. Cohen, Chairman and Chief Executive Officer, said,
"Bradlees chose to seek court protection in order to restore normal
merchandise delivery and the confidence of our vendors that they
will be paid for all new shipments, and to enable the Company to run
its business in a normal fashion. While we would have preferred to
refinance the company in a conventional manner, as we have
previously stated, we view this filing as our only alternative given
the lack of merchandise support we are now witnessing."
Bradlees said that its stores will maintain normal business
hours, continue to accept credit card charges and provide its
As the Company stated previously, it is taking the following
steps in an effort to accomplish its long term goals.
The Company continues to focus on its value quotient to its
customer as a function of fashion, quality and price rather than
The Company is working to emphasize quality and fashion as a
means of differentiating itself from its closest competition.
The Company intends to rebuild its reputation for fashion
leadership in both apparel and hardlines, and will work diligently
to put into its stores important private label programs that will
offer the customer greater value while affording the Company higher
Bradlees, Inc. operates 136 discount department stores in Maine,
New Hampshire, Massachusetts, Connecticut, New York, New Jersey,
Rhode Island, Pennsylvania and Virginia. Bradlees' common stock is
listed and traded on the New York Stock Exchange under the symbol
"BLE." For additional Bradlees' press releases, please call 1-800-
758-5804, extension 105750.
CONTACT: Aileen Gorman, 617-380-8371, or Coleman Nee, 617-380-8354,
both of Bradlees
STOP & SHOP COMMENTS ON BRADLEES' ANNOUNCEMENT OF CHAPTER 11 FILING
BOSTON, Mass.--June 23, 1995--In response to press inquiries
received today, Stop & Shop stated that, based upon information
currently available, it does not expect that
Bradlees' Chapter 11 filing will have a material impact on Stop & Shop.
Stop & Shop estimates that it is owed approximately $1.5 million
under various contracts for goods and services provided to Bradlees
prior to the filing and that a significant portion of this amount
should be recovered through the bankruptcy proceeding.
Stop & Shop also is one of Bradlees' major landlords and is a
party to certain of Bradlees' leases. However, in view of Bradlees'
stated intention to continue to operate its stores, Stop & Shop does
not believe its real estate exposure will be significant.
"As a landlord and supplier, it is our intention to be
supportive of Bradlees' efforts to place its business on a sound
financial footing," stated Robert G. Tobin, Stop & Shop's Chairman
and Chief Executive Officer.
The Stop & Shop Companies, Inc. (NYSE: SHP), New England's
largest supermarket company, operates 130 supermarkets, including
103 superstores, in Connecticut, Massachusetts, New York and Rhode
CONTACT: S. Terry Vandewater of Stop & Shop, 617-770-6025/
AVIATION WEEK & SPACE TECHNOLOGY REPORTS TWA CONSIDERING ANOTHER
CHAPTER 11 RESTRUCTURING
Chapter 11 Filing Imminent for TWA: Trans World
Airlines could proceed with a pre-packaged Chapter 11 bankruptcy filing as early as
next week. Creditors have until June 27 to vote whether they want
TWA to restructure its bond payments out of court or through Chapter
11. If the latter, it would mark the second trip to bankruptcy
court in four years for the nation's seventh largest carrier.
TWA officials say the traveling public would not be affected by
the bankruptcy filing, but most securities analysts continue to have
grave doubts about TWA's long-term survival. The carrier has the
oldest fleet of any major U.S. airline, with aircraft averaging more
than 18 years of age. Despite its financial condition, TWA intends
to acquire as many as 40 younger aircraft during the next 24 months.
CONTACT: Eileen Gabriele
The McGraw-Hill Companies
Moody's Comments on Orange County, California Teeter Bond
NEW YORK, NY--June 23, 1995--Orange County,
California, plans to sell $155 million Teeter Plan Revenue Bonds on
June 27 through a newly formed Joint Powers Agency, the Orange
County Special Financing Authority. The bonds will be secured by an
irrevocable direct-pay letter of credit to be issued by The
Industrial Bank of Japan, Limited. Although the rating on the bonds
will reflect the credit quality of the IBJ letter of credit, Moody's
is providing comment on the underlying credit quality of the bonds.
As with the Refunding Recovery Bonds sold on June 13, the Teeter
Bonds represent another component of the county's attempted recovery
plan. Moody's continues to monitor the county's proposals and we
will comment on all financings, whether credit enhanced or not, for
the implications on the county and more broadly on the public
Teeter Bond Structure
The county is issuing the 1995 Teeter Bonds in part to refund
$175 million of outstanding 1994-95 Taxable and Tax-Exempt Teeter
Notes. The balance of the funds needed to retire the notes will
come from money available in the existing Teeter Fund. The one-year
notes mature June 30, 1995 ($111 million taxable notes and $64
million tax-exempt notes) and were backed by a standby purchase
agreement with the Orange County Investment Pool. The county must
issue the 1995 Teeter Bonds in order to avoid defaulting on the 1994
Teeter notes. Bond proceeds will also be used to purchase new
property tax receivables and to fund in part the Tax Loss Reserve
Credit Quality of Bonds Issued by Joint Powers Agency Derived from
Below Investment Grade Participants
As with other bonds being issued by Orange County, the Teeter
Bonds must be examined in the context of the county's bankruptcy.
Moody's has stated previously that any new debt obligation of the
county would have to be financially and legally insulated from the
county to have credit quality above the county's long-term debt
rating of Caa. The county has attempted to insulate the Teeter
Bonds from the county by selling the property tax receivables to the
Authority and having the Authority issue the debt. While this
approach does achieve some degree of separation, the county is not
making a "true sale" of receivables to the Authority, retains
significant control over the Authority, and the county will act as
servicer for the receivables. As a result, the Authority is not
fully insulated from the current or any future bankruptcy of the
county. Therefore, the credit quality of bonds issued by the
Authority would reflect the credit quality of the Authority's
Certain elements of the bond structure - its economics, legal
provisions, and the lien provided to bondholders - do indicate
stronger credit quality than the county currently provides to its
other long-term debt. However, the exposure to bankruptcy risk
results in credit quality, absent the letter of credit, that would
be below investment grade for the reasons outlined below.
Teeter Bonds to Be Issued through New Joint Powers Agency
The Teeter program is a method of distributing secured property
taxes to local taxing agencies. Participating agencies, which
include the county, all school districts, and other cities and
special districts who have chosen to participate, receive the full
amount of their share of property taxes on the secured roll,
including property taxes that become delinquent which are yet to be
collected. The county forwards the delinquent taxes to the other
entities in exchange for the right to collect delinquencies with
interest and penalties. The county issues debt to fund the payments
owed to the agencies and repays that debt through the collected tax
delinquencies, interest and penalties.
The county is issuing the bonds through the Orange County
Special Financing Authority, which is a joint powers authority
consisting of Orange County and the Orange County Development
Agency. The primary reasons for financing through the joint powers
authority are to separate the Teeter Program from the operations of
Orange County, and to allow the issuance of longer-term bonds than
the county would be permitted to issue itself for this program.
Historically, counties were limited to issuing one-year notes to
finance the Teeter Plan, but now can issue seven-year debt. There
are no limits on the maturity of the bonds if issued by the JPA.
Links between County and Authority Limit Ability to "Bankruptcy
Although the county intends the Teeter Program to economically
self- supporting, there remain significant linkages between the
county and the Authority, such that a future bankruptcy filing by
the county could impair the Authority's ability to make timely debt
The Authority is made up of the county and the County
Development Agency. The County Board of Supervisors acts as the
Board for the both the Development Agency and the Joint Powers
Agency. County staff acts as the staff of the Development Agency
and will be the staff of the JPA. The county will be the servicer
with respect to the delinquent tax payments and the receivables.The
county is not making a "true sale" of the receivables to the
Future County Fiscal Distress Could Impair Authority Debt Service
Although the bond documents say that the county is selling the
receivables to the Authority, the transaction more closely resembles
a secured transaction; that is, the county is giving the authority a
lien on the asset rather than selling the asset outright. Since the
county is not transferring all right, title and interest in the
receivables after the sale to the Authority as it would in a true
sale, the receivables would be subject to the jurisdiction of a
bankruptcy court both in the current bankruptcy and in the event of
a subsequent bankruptcy. The court could determine that the sale
arrangement, for purposes of bankruptcy law, constitutes debt of the
county. This would subject debt service payments to an automatic
stay unless the consent of the bankruptcy court is obtained to make
debt service payments even from funds held by the trustee.
Bondholders will have a lien on the delinquent tax revenues and
associated interest and penalties. This lien would survive the
current and any future bankruptcy filing so that bondholders would
ultimately receive full payment if the revenue stream is adequate.
However, timely payment could be interrupted in a subsequent county
The county will also act as the Servicer of the Teeter Program.
It will be responsible for collecting delinquent taxes and
transferring them to the Authority. Any future insolvency or
bankruptcy could impair the county's ability to adequately perform
its obligations under the Servicing Agreement. Further, in a
bankruptcy filing, the county could reject the Sale and Servicing
Agreement itself as an executory contract.
The county is also retaining some of the benefits associated
with the revenue stream since it will be receiving up to $10 million
annually for the General Fund. However, the county is not taking on
any obligation to make debt service payments on the Teeter Bonds
from any sources other than the delinquent taxes, penalties,
interest, and tax loss reserve fund.
Teeter Expected to Be Self-Supporting Revolving Program
Pursuant to the Sale and Servicing Agreement, the county will
sell its current and future property tax receivables to the
Authority. The Authority will use the delinquent tax, interest and
penalty revenues derived from that sale to (1) pay debt service on
the bonds; (2) purchase new tax receivables each year; and (3)
transfer excess funds not to exceed $10 million to the county's
The projected cash flow appears to be sufficient to make all of
the above payments. The county has a five-year collection cycle,
after which delinquent property is foreclosed and sold. The county
typically recoups taxes, penalties and interest exceeding the full
amount of the original delinquent taxes within three years. Amounts
collected in the fourth and fifth year are excess revenues that the
county can use for any purpose and are essentially compensation for
the risk taken by the county in advancing full property tax revenues
to participating agencies.
The proposed Teeter structure appears to work economically. The
existing revenue stream is adequate to support debt service and
annual purchases of receivables while generating excess to be
transferred to the county. In fact, the issuance of the bonds using
the proposed structure could be used by the county to meet its other
obligations since it will enhance General Fund resources.
The county is also pledging to bondholders the Tax Loss Reserve
Fund (TLRF). All counties that participate in the Teeter Plan are
required to maintain a TLRF in prescribed amounts in case the sale
of foreclosed property does not fully cover delinquent taxes.
Historically, the TLRF has not been pledged to bondholders. Orange
County proposed this legislative change which was enacted in SB 7,
the legislation which also allowed for the transfer of the TLRF from
the county to the Special Financing Authority.
Other legal provisions include an additional bonds test that
requires the county to maintain a 1.15 asset-to-liability ratio for
the Teeter Program, a limit on and a coverage test for the amount of
excess revenues that can be transferred to the county, and a
requirement to maintain a minimum fund balance in the Teeter Fund.
Exclusive of the implications of the county's bankruptcy and current
legal and financial problems, these legal provisions do provide some
protection for bondholders over the life of these bonds.
Teeter Bonds Potentially Stronger than County's Direct Debt but
Still Not Investment Grade
The Teeter bonds exhibit some characteristics that support a
credit rating above that of the county's direct debt, including the
lien and other legal protections provided to bondholders, and the
self-supporting nature of the revolving revenue stream. However,
while the county is fiscally distressed, in bankruptcy, and
threatening to repudiate debt, the Teeter Bonds would be below
investment grade due to the close relationship between the county
and the Authority and the lack of a true sale of the assets by the
county to the Authority.
CONTACT: Moody's Investor Service, New York
Karen S. Krop, 212/553-4860
Mary Francoeur, 212/553-7240
Federated finalizes Woodward & Lothrop purchase agreement
CINCINNATI, OHIO--June 23, 1995--Federated
Department Stores, Inc. announced today that it has finalized its
purchase agreement relating to the acquisition of certain of the
stores of Woodward & Lothrop Incorporated and
its John Wanamaker, Philadelphia subsidiary. Federated's preliminary agreement to
purchase the stores was announced on Wednesday, June 21.
Federated with corporate offices in Cincinnati and New York, is
one of the nation's leading department store retailers, with
operations in 35 states and annual sales of more than $14 billion.
CONTACT: Federated Department Stores, Inc., Cincinnati
Media - Carol Sanger, 513/579-7764
Investor - Susan Robinson, 513/579-7780
STRAWBRIDGE & CLOTHIER REPORTS WANAMAKER STORES TO BE ACQUIRED
PHILADELPHIA, PA--June 23, 1995-- Strawbridge & Clothier
(Nasdaq: STRWA) released the following:
The six Wanamakerstores which
Strawbridge & Clothier has agreed to acquire are located in: the Harrisburg East Mall,
Harrisburg, Pennsylvania; the Lehigh Valley Mall, Lehigh County, Pennsylvania;
the Montgomery Mall, Montgomeryville, Pennsylvania; the Oxford
Valley Mall, Langhorne, Pennsylvania; the Wynnewood Shopping Center,
Wynnewood, Pennsylvania; and the Deptford Mall in Deptford, New
CONTACT: Mr. F.R. Strawbridge, III, 215-629-6456, or Mr. P.S.
Strawbridge, 215-629-6607, both of Strawbridge & Clothier/