MARKHAM, Ontario--Oct. 11, 1995--Legacy Storage
Systems International Inc. today announced that it is in preliminary
discussions with Rexon Inc., a U.S.
manufacturer of data storage
products, to acquire certain assets of Rexon Inc.
Rexon Inc., a public company quoted on Nasdaq ("REXNQ"), filed
for reorganization under Chapter 11 of the U.S. Bankruptcy Court for
the District of Colorado on Sept. 13, 1995.
As disclosure of these discussions has been made in proceedings
before the Bankruptcy Court, Legacy has determined to issue this
press release at this time to ensure that full disclosure to
investors has been made. These discussions are exploratory
discussions only, and there is no assurance that an agreement will
be reached or that the Bankruptcy Court for the District of Colorado
will approve any agreement that the parties may reach.
Sales of Rexon Inc. for the nine months ended July 2, 1995, were
in excess of U.S. $130 million (unaudited). Rexon Inc.
manufactures and distributes 1/4" cartridge (QIC) tape drives under
the Wangtek brand name, digital audio tape (DAT) drives under the
WangDAT brand name and Techmar tape back-up solutions. Rexon Inc.
distributes its tape back-up products through a field sales force
and an international network of more than 100 distributors.
Rexon Inc. also has OEM and VAR relationships with a number of
major U.S. computer companies. Rexon operates its own manufacturing
facility out of Singapore.
Legacy Storage Systems International Inc. is a global leader in
the design, development manufacturing and marketing of data storage
subsystems incorporating the latest advances in hard disk, CD-ROM,
optical disk and magnetic tape technologies. The company's products
emphasize storage integration technology and fault tolerance for
applications running on PC and UNIX client/server environments.
Legacy manufactures products for all major operating systems.
Legacy's products are marketed worldwide to Fortune 500 companies.
CONTACT: David Killins, 905/475-1077;
Alain Lambert, 514/844-7212
ANAHEIM, Calif.--Oct. 11, 1995--System Controls
Inc. (OTC:SCTL) announced a management restructuring, including the
proposed addition of three new board members, pending the approval
of shareholders, and a plan to seek additional financing for current
working capital needs and future expansion and acquisition plans.
The company also released the unaudited operating results of its
United Kingdom subsidiaries.
Status of Hogan Sales Co. Inc.
On July 26, 1995, Hogan Sales filed for bankruptcy protection
under Chapter 11 of the U.S. Bankruptcy Code. System Controls is
presently working under the guidelines of the United States trustee
to prepare a reorganization plan, which will determine the final
disposition of the Hogan Sales subsidiary.
The board has also conducted a full investigation of the decline
of Hogan and has concluded that Hogan's senior management had not
been completely forthcoming in its reports and communications to the
board. Hogan's most significant problems, the discontinuation of
the supply of its most important product line and excessive
expenditure on its marketing network were not disclosed to the board
until the problem had become had become critical.
Consequently, the board was not in position to make crucial
decisions required to redress the developing situation. When the
promise of additional funding to save the Hogan situation failed to
materialize, the decision was made to file for Chapter 11
protection. The board believes that it has some potential avenues
of recovery, which it will pursue on behalf of System Controls.
In an effort to restore its market presence in North America and
in the interest of implementing a new expansion plan for System
Controls, the board has agreed to a management restructuring. This
restructuring is designed to rationalize its operations in North
America with the addition of three new board members based in the
The board believes this will strengthen the company's management
team and better position the company for growth in North America.
As part of this rationalization and restructuring of the board, the
senior consultants Richard Taylor and Richard Corline have agreed to
resign subject to the adoption of a plan that will satisfy the
company's outstanding obligations to Alandale Overseas Ltd., which
has provided financial support to the company.
Pending the final approval of the shareholders, the board has
proposed (i) that the board of directors be increased to six members
and that three new directors offered by a group of majority
shareholders be added to the board, and (ii) the authorized share
capital of the company be increased to 20 million shares of common
Once these items are approved, the board will seek additional
equity capital in order to (i) raise necessary working capital for
the United Kingdom subsidiaries, (ii) support the testing and
marketing of the Thermasave product, (iii) finance the hiring of a
new management team in the United States, and (iv) fund future
acquisitions in North America.
Unaudited Financial Results
One consequence of the Hogan bankruptcy has been a delay in the
completion of a full audit of System Controls. The board believes
that the audit can only be completed when the company and its
auditors have an opportunity to review certain documents and reports
maintained by Hogan and the company's consultant in the United
States. This review must be completed before reaching a conclusion
on how the company's investment in Hogan should be reflected on the
System Controls' financial statements.
In the interim, so as to inform its shareholders of the
operating performance of the United Kingdom trading subsidiaries,
Ferrob Ltd. and Maintenance & Construction Services Ltd. (MCS),
during this period, System Controls is announcing the following
unaudited results for the periods ended June 30, 1994 and 1995.
The results do not include a management charge, which will be
added to the final audited statements for purposes of United Kingdom
tax reporting. The operating results are also subject to
adjustments, which may be recommended by the auditors.
These results should not be read as a reflection of the overall
financial position of System Controls, rather they are provided so
that shareholders are informed as to the operating performance of
the company's active subsidiaries. The final audited numbers for
System Controls will be adjusted significantly upon the final
disposition of Hogan and when other North American expenses are
System Controls Inc.
Results of United Kingdom Operating Subsidiaries
Fiscal Year Ended June 30
(all figures in U.S. dollars)
1995 % of Revs. 1994 % of Revs.
Ferrob $2,122,021 69.5% $2,220,485 74.5%
MCS 929,357 30.5% 761,602 25.5%
Total Revenues 3,051,378 100.0% 2,982,087 100.0%
Cost of Goods
Ferrob 1,279,301 41.9% 1,381,325 46.3%
MCS 683,729 22.4% 554,222 18.6%
Total Cost of Goods 1,963,030 64.3% 1,935,547 64.9%
Ferrob 842,720 27.6% 839,160 28.1%
MCS 245,628 8.0% 207,380 7.0%
Total Gross Profit 1,088,348 35.7% 1,046,540 35.1%
Ferrob 598,776 19.6% 585,204 19.6%
MCS 194,247 6.4% 208,732 7.0%
Expenses 793,023 26.0% 793,926 26.6%
Ferrob 243,944 8.0% 253,956 8.5%
MCS 51,381 1.7% (1,342) 0.0%
Total Operating Profit $ 295,325 9.7% $ 252,614 8.5%
NEWPORT BEACH, Calif.--Oct. 11, 1995--Today 11
local agencies which had deposited funds in trust with the Orange
County Investment Pools each separately sued href="chap11.orange.html">Orange County for
damages caused by Orange County, the Orange County Treasurer and
various other Orange County officials.
The suits allege not only some of the many wrongs committed by
former County Treasurer Citron, but also failures in review and
supervision by the County Board of Supervisors, the County Auditor-
Controller and other county officials and employees.
Highlighted in the local agencies' claims is the county's
liability for (1) improper investment activity and reporting of
Treasurer Citron, (2) failure of the County Board of Supervisors and
County Auditor-Controller to monitor and audit the treasurer's
activity as required by law, (3) stealing by the county of the
Option B participant's earnings on their respective deposits to help
the county conceal improper budget shortfalls and hide the riskiness
of the OCIP investments, (4) misuse of the Option B participant's
funds by the county to cover county cash flow shortages, (5) massive
self-dealing by the county, including selling junk securities to
the OCIP at inflated values, and (6) failure of the county treasurer
and others to keep the OCIP participants informed of the true facts
regarding their monies. The suits note false and misleading reports
issued by the county treasurer to the OCIP participants, and gross
mishandling of trust funds and intentionally false accounting and
record keeping by the county treasurer and auditor controller.
In many respects the suits reflect recent findings of the
California Senate Special Committee on Local Governmental
Investments, in which the committee report stated:
The collapse of the Orange County investment pool and the
bankruptcy of Orange County was not simply a result of the
miscalculations and errors of one individual, but rather is
reflective of systemic problems and a breakdown of the
established governmental process in Orange County.
"(T)he Orange County financial collapse and bankruptcy filing
resulted from really nothing short of a reckless abuse of public
trust. The losses would not have occurred if parties having
responsibility to maintain that public trust had acted in a
responsible and sensible manner...there's ample blame for all
parties." (Quotation in the committee report of Eli Broad,
chairman of the advisory board to the senate special committee.)
The members of the Orange County Board of Supervisors failed to
carry out their duties as required by law and failed to
recognize and act of their trust/fiduciary responsibilities.
Other county officials...are culpable in the fiscal disaster.
(Committee Report, pp. 28-29, 34)
The Option B participants' lead litigator, David J. Brown of
Brobeck," target=_new>http://www.brobeck.com">Brobeck,Phleger & Harrison,
stated: "These suits are our clients'
efforts to cause the county to assume full responsibility for its
and its officials' wrongs. Based upon past county statements and
behavior, I expect the county to continue its attitude of official
denial and avoidance of its responsibilities in a continuing effort
to profit from its wrongs. In particular, our clients expect Orange
County to mount an aggressive `blame the victim' response in order
to deflect attention from serious misconduct by persons still
functioning as county officials and employees."
The Option B participants' lead bankruptcy counsel, Larry Engel,
noted: "The county's proposed plan of adjustment is expected to
unfairly discriminate against the rebel victims by offering less
than 50 percent payment of the claims by Option B participants over
20 years without interest, while paying the bondholders, employees,
vendors and other equal priority creditors 100 percent. The law
requires the county's plan to be fair and equitable. That should
not be difficult for a county with such enormous financial
capabilities. Unfortunately, the county appears to have a different
The suing agencies are: The City of Atascadero, the City of
Buena Park, the City of Buena Park Redevelopment Agency, the City of
Claremont, the City of Milpitas, the City of Montebello, the City of
Montebello Redevelopment Agency, the City of Mountain View, the City
of Santa Barbara, the City of Santa Barbara Redevelopment Agency,
and the Santiago County Water District.
CONTACT: Brobeck," target=_new>http://www.brobeck.com">Brobeck,Phleger &
David J. Brown, 714/752-7535,
G. Larry Engel, 415/442-0900
EL PASO, Texas--Oct. 11, 1995--El
Company (EPE) announced Wednesday the following correction to its
news release issued Sept. 29, 1995, with respect to the anticipated
distributions to unsecured creditors under its Fourth Amended Plan
of Reorganization (Plan) filed with the Bankruptcy Court on Sept.
The Sept. 29, 1995, news release erroneously reported that,
"Under the Company's Plan of Reorganization, unsecured creditors
will receive approximately $150 million in cash, $450 million of new
secured debt, $100 million of preferred stock, and 85 percent of the
reorganized Company's common stock."
As previously announced, the Plan provides for two alternative
methods for the Company to emerge from bankruptcy.
Under the first alternative, which is based on a public offering
of first mortgage bonds, the unsecured creditors will receive a
combination of approximately $150 million in cash, approximately
$270 million of first mortgage bonds, $100 million of preferred
stock, and 85 percent of the reorganized Company's common stock.
Under the second alternative, which would be utilized if the
Company were unable to consummate the proposed public offering, the
unsecured creditors would receive a combination of approximately
$430 million of unsecured debt securities, $100 million of preferred
stock, and 85 percent of the reorganized Company's common stock.
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 wholesale
customers located in such diverse locations as Southern California
NOTE: National and regional media inquiries should
be directed to Alan Lee Bunnell, Corporate Spokesperson for EPE, at
915/543-5823. Local media should call Henry Quintana Jr.,
Supervisor of Corporate Communications, at 915/543-5824. Financial
analysts should call John Droubay, EPE Treasurer, at 915/543-5710.
Stockbrokers and shareholders should direct questions to EPE's
Office of the Secretary at 1-800-592-1634 or 1-800-351-1621.
CONTACT: El Paso Electric
(National and Regional Media) Alan Lee Bunnell, Corporate
(Local Media) Henry Quintana Jr., supervisor - Corporate
(Financial Analysts) John Droubay, treasurer, 915/543-5710
(Stockbrokers and shareholders) EPE's Office of the
Secretary, 800-592-1634 or 800-351-1621