Plaid Clothing Group files for Chapter 11
protection from creditors; $75 million debtor-in-possession
financing agreement in place; provides liquidity to continue
production and meet customer obligation
NEW YORK, NY--July 17, 1995--Plaid Clothing
Inc., the
country's second largest manufacturer of men's and boy's tailored
clothing, today filed in U.S. Bankruptcy Court, Southern District,
New York, for Chapter 11 protection from creditors. The privately
held company has assets of approximately $195 million and
liabilities of approximately $177 million.
In conjunction with the filing, the company announced that it
has reached an agreement with its existing lending group, led by
Transamerica Business Credit Corp., to provide for both interim and
permanent debtor-in-possession (DIP) financing totaling $75 million.
The terms of the DIP facilities are substantially similar to the
company's previously existing credit facility. The company believes
that the DIP facilities, together with existing cash balances, will
be sufficient to provide for ongoing liquidity needs and enable it
to continue production, processing and delivery of customer orders.
The DIP facilities are subject to bankruptcy court approval.
"While we regret having to file Chapter 11, it is a necessary
step to preserve the viability of this company and give it the
opportunity to emerge leaner, stronger and more focused," said
Richard C. Marcus who joined the company as chief executive officer
in December 1994. "This is a new beginning for Plaid. We have a
strong management team and we will move aggressively to turn around
this franchise and become more responsive to our retail customers.
We will do fewer things very, very well."
William V. Roberti, Plaid's president and chief operating
officer since May, 1995 said, "Our initial plans are to better
organize our brands and products to meet the specific needs of
different customer segments, including specialty retailers,
department stores and national chains, and the youthwear market."
Roberti continued: "We are working aggressively to get our
expense structure in line with the size of this business and will
seek reductions in manufacturing overhead, selling, distribution,
and administrative expenses. We will continue to implement
enterprise-wide systems improvements that will improve our order
fulfillment performance and help customers better manage inventory
positions."
Plaid has retained The Blackstone Group as its financial
advisor. Blackstone will assist the company in developing a
reorganization plan and will represent Plaid in meetings with
concerned parties.
The company's legal advisors are Kaye, Scholer, Fierman, Hays &
Handler, and Shearman & Sterling.
CONTACT: Sard Verbinnen & Co., New York
Paul Verbinnen/Jeanne Donovan
212/687-8080
AILEEN, INC. ANNOUNCES AGREEMENT TO SELL RETAIL STORES; SEES NO
VALUE FOR EQUITY
NEW YORK, NY--July 17, 1995--Aileen, Inc.
(NYSE: AEE), a
debtor-in-possession under chapter 11 of the United States
Bankruptcy Code which currently operates 66 retail stores in
manufacturers' outlet shopping centers in 29 states, announced today
that it has entered into an agreement to sell the Aileen name and
trademark and certain assets pertaining to 46 of its stores to Names
for Dames, Inc. The leases for the 46 stores, which are located in
27 states, will be assigned by Aileen to Retail Spectrums, Inc., an
affiliate of Names for Dames. The purchase price for the leases,
store assets and Aileen name and trademark is approximately
$925,000, of which $215,000 has been allocated for the curing of
certain pre-petition rent arrearages.
The proposed transaction, which has been approved by Aileen's
Official Committee of Unsecured Creditors and by the company's
debtor-in-possession lender, The CIT Group/Business Credit, Inc., is
subject to higher and/or better offers, which must be at least
$275,000 higher than the purchase price payable by Names for Dames,
and the approval of the Bankruptcy Court. An initial hearing will
be held before the Bankruptcy Court on July 20, 1995 to approve
bidding procedures, with the final hearing to approve the proposed
transaction scheduled for July 27, 1995. Names for Dames has agreed
to spend at least $2 million on the purchase of inventory for the
stores prior to the final court hearing in order to be able to take
over the 46 stores on August 1, 1995 following approval by the
Bankruptcy Court. The agreement with Names for Dames provides for
it to receive a breakup fee (subject to court approval) under
certain circumstances if a competing bidder prevents Names for Dames
from acquiring the Aileen stores and name.
The 46 store locations to be transferred to the purchaser will
continue to be operated under the Aileen name. Names for Dames
currently operates 67 manufacturers' outlet retail stores under the
"Adolfo II" name in 27 states; 28 of such stores are located in the
same shopping centers as the stores being acquired from Aileen.
Pursuant to its agreement with Aileen, the purchaser has committed
to hiring all of the employees currently working at the 46 Aileen
stores, as well as the regional and district managers supervising
them.
Aileen's 20 remaining retail store locations which are not part
of the proposed transaction with Names for Dames are expected to
close on or before July 31, 1995, resulting in the termination of
approximately 115 employees and reflecting the determination of
Aileen and its management consultant, Alco Management & Consulting
Group, Inc., that the remaining retail business is no longer viable.
Aileen management and Alco remain engaged in the liquidation of
the assets of the company's terminated manufacturing operations,
including its textile plant, warehouse and distribution center and
three sewing plants, all of which are located in Virginia, and its
two remaining sewing plants in the Dominican Republic. The sale of
textile equipment and a leased sewing plant in the Dominican
Republic have already produced gross proceeds exceeding $3,200,000,
with further equipment sales scheduled for court approval on July
20, 1995 expected to bring in at least an additional $1,300,000.
Sales proceeds from the disposition of the remaining plant
properties and equipment cannot be predicted at this time.
Despite the uncertainty of the proceeds from the sale of the
company's remaining assets, Aileen and Alco do not believe that,
based upon the proceeds already received from asset sales, the
purchase price to be paid by Names for Dames and the ranges of value
estimated to be realizable from the liquidation of the company's
remaining assets, there will be any value remaining for the equity
shareholders.
/CONTACT: Stephen B. Delman of Aileen, Inc., 212-398-9770/
Bidermann seeks Chapter 11 protection;
company to pursue financial restructuring to reduce debt burden and
facilitate operating restructuring; company arranges for $75 million
in DIP financing
NEW YORK, NY--July 17, 1995--Bidermann
Industries U.S.A. Inc. announced today that it has filed a voluntary petition
under Chapter 11 of the U.S. Bankruptcy Code with the U.S.
Bankruptcy Court for the Southern District of New York.
The company said it elected to seek court protection in order to
obtain additional financing and facilitate the implementation of its
operational turnaround while it pursues a restructuring of its
balance sheet. Bidermann said that it would develop a plan of
reorganization that includes a substantial deleveraging of the
company.
The operating subsidiaries included in the filing are Ralph
Lauren Womenswear, Cluett Peabody & Co. (U.S.), Great American
Knitting Mills, Bidermann Tailored Clothing and Arrow Factory Stores
Inc.
The company also announced that it has arranged for $75 million
in debtor-in-possession ("DIP") financing from a lending group
including Bank of America and Credit Lyonnais. Bidermann said that,
once approved by the court, the DIP financing would be sufficient to
fund the company's operations on a normal basis during the
reorganization proceeding-including payment to vendors in the
ordinary course of business for goods and services delivered post-
petition.
Bryan P. Marsal, chairman and CEO of Bidermann, said:"We believe
the filing of the Chapter 11 petition is a prudent step in our
restructuring and is in the best interests of the company and our
customers. The DIP financing that we have arranged as part of the
filing will resolve our short-term liquidity concerns, ensure that
we will continue to operate the business on a normal basis, and
provide us with the financial flexibility necessary to implement our
operational restructuring."
Marsal said that as part of its reorganization the company would
move to decentralize management responsibility to increase
productivity and reduce operating costs. The decentralization will
result in the phasing out of the company's corporate operations in
Secaucus, N.J. Employees in the Secaucus office will be offered
positions elsewhere in the company or will receive separation
packages in accordance with company policy.
Marsal added that the company would also seek to streamline
operations through select plant consolidations and other steps, but
that large-scale layoffs at the operating level were not expected.
"Bidermann has some of the industry's best assets, including
Gold Toe, Ralph Lauren Womenswear and Arrow Shirts," said Marsal.
"Our primary objectives are to maximize operating performance across
our organization and put in place a more appropriate capital
structure at the corporate level-so that our strong brands can meet
their full potential in the marketplace."
Bidermann Industries U.S.A. Inc. is a subsidiary of Bidermann
International S.A., a French company. Bidermann is a major producer
and distributor of men's and women's designer and branded apparel in
the United States, Canada, Mexico and Central America. Bidermann's
core operations are the Shirt Group, the Hosiery Group and Ralph
Lauren Womenswear.
CONTACT: Robert Mead, 212/484-6701
City of El Paso and EPE Announce Rate Settlement
EL PASO, Texas--July 17, 1995--The City of El Paso
and El Paso Electric Company (EPE) announced
today that they have
reached an agreement in principle which freezes base rates at
present levels for 10 years. This rate settlement is conditioned
upon approval of a plan of reorganization, which EPE anticipates
filing in the United States Bankruptcy Court in Austin, Texas, some
time later this year.
The rate settlement, which is subject to negotiation and
execution of a definitive agreement and to final approvals of the El
Paso City Council, EPE's Board of Directors, and the Public Utility
Commission of Texas, resolves almost 20 years of disagreements
between the company and the City over the level of the company's
investment in the Palo Verde Nuclear Generating Station.
"This is a very positive step for the company and for the City,"
emphasized El Paso Mayor Larry Francis. "A 10-year rate freeze
stabilizes electric rates and will be a boost for the local economy.
At the same time, the company's unsecured creditors and shareholders
are facing substantially lower recoveries than those proposed under
the company's failed merger with Central and South West
Corporation."
"This settlement is good for the City, the company and its
customers, and will allow the company to emerge from bankruptcy as a
stand-alone company in early-1996," said David H. Wiggs Jr., EPE's
chairman of the board and chief executive officer. "This agreement
is the product of a massive amount of work and compromise by
everyone involved. We are ushering in an era of cooperation with
the City and putting behind us - once and for all - almost 20 years
of disagreements. We are very pleased."
The rate settlement contemplates a four-year extension of the
company's franchise with the City of El Paso, and puts the
investment and operating risk of Palo Verde entirely on the company.
In addition, the settlement allows EPE to keep in place bonded rates
implemented in July 1994; all litigation between the city and the
company will be dismissed; the company will pay the city's legal
expenses; and none of the company's bankruptcy costs will be borne
by customers.
For the first five years of the rate freeze, the company will
share with customers 25 percent of the margins earned from off-
system sales. Thereafter, margins will be shared equally (50/50)
with customers.
The company will now work with its creditors and shareholders to
develop a consensual plan of reorganization, which will be subject
to bankruptcy court approval.
EPE filed a voluntary petition under Chapter 11 of the United
States Bankruptcy Code on Jan. 8, 1992. El Paso Electric is an
electric utility serving approximately 270,000 customers in El Paso,
Texas, and an area of the Rio Grande Valley in West Texas and
Southern New Mexico, and to wholesale customers located in such
diverse locations as Southern California and Mexico.
CONTACT: El Paso Electric Company
National and regional media: Alan Lee Bunnell,
corporate spokesperson, 915/543-5823
or
local media: Henry Quintana Jr.,
supervisor of corporate communications, 915/543-5824
or
financial analysts: John Droubay,
treasurer, 915/543-5710
or
stockbrokers and shareholders: Office of the Secretary,
800/592-1634 or 800/351-1621