IRWINDALE, Calif.--Dec. 11, 1995--Wedgestone
Financial (OTC:WDGF) Monday announced that it will incur a loss on a
loan to Genesis Plastics Inc.
Wedgestone had made the loan to Genesis, an unrelated plastics
recycler, in 1992. Genesis, had previously filed for protection
under Chapter XI of the United States Bankruptcy Code on Aug. 24,
1994 and had been unsuccessful in its efforts to secure a buyer for
its Charleroi, Penn., recycling facility.
Wedgestone held a senior security interest in the inventory,
receivables and certain equipment of Genesis. On Nov. 29, 1995, in
accordance with its rights under the loan agreement with Genesis,
Wedgestone consented to the liquidation of the Genesis' inventory
and equipment through a public auction. As a result of this action,
Wedgestone will record a one-time loss of approximately $700,000 in
In an unrelated matter, Wedgestone also announced Monday that it
will record a substantial deferred tax benefit in December 1995.
This benefit derives from the continued favorable sales and earnings
performance of the company's automotive products business segment
and management's estimate of the company's future ability to utilize
its net operating loss carryforward for federal income taxes over
the next three years. The company stated that, when taken together,
the sum of these two events will not have an adverse effect on 1995
Wedgestone is primarily engaged in the business of manufacturing
automotive parts for the light duty truck aftermarket. It
manufactures its products in Irwindale; St. James, Minn. and Pelham,
Ga. The company distributes its products through its national
distribution system under the trade names Fey, Tuff Bar, Hercules
and Westin and continues to actively seek acquisitions to augment
its internal growth.
CONTACT: Wedgestone Financial,
Jeffrey Goldstein, 212/980-3883
LONGMONT, Colo.--Dec. 11, 1995--href="chap11.rexon.html">REXON Inc.
Monday announced that the company has entered into a definitive
purchase agreement with Legacy Storage Systems International Inc.
(TSE/ASE:LEG) which has been approved by the unsecured creditors'
committee for Rexon/Tecmar Inc. (a subsidiary of Rexon).
The purchase agreement contemplates a plan of reorganization
under which Legacy acquires the business of Rexon and its
subsidiaries, including, to the extent possible, the purchase of all
shares of a reorganized Rexon. The transaction is subject to
approval by the U.S. Bankruptcy Court for the District of Colorado.
In the event that Rexon's plan of reorganization is not
confirmed by the Bankruptcy Court by March 1, 1996, the purchase
agreement contemplates that Rexon would seek approval of the
Bankruptcy Court to sell substantially all of the assets of Rexon
and its subsidiaries to Legacy pursuant to section 363 of Title II
of the U.S. Bankruptcy Code.
In addition to approval of the Bankruptcy Court, closing of the
transaction is subject to a number of conditions including
completion of a due diligence analysis satisfactory to Legacy and
the approval of all applicable stock exchanges. It is anticipated
that the transaction will be completed by the companies on or about
March 1, 1996.
Rexon has entered into a commitment (no-shop) whereby it will
not solicit alternate purchasers or investors for the business of
Rexon. In addition, Rexon has agreed to a "top-up" requirement
under which it has agreed not to accept any offers for the purchase
of Rexon unless the purchase price exceeds that payable by Legacy by
a minimum of $2 million (USDLR).
In the event that a purchaser other than Legacy acquires the
business of Rexon, Legacy would be entitled to a break-up fee of $1
million (USDLR). The no-shop, top-up and break-up fee provisions
would become effective when approved by the Bankruptcy Court. If
these provisions are approved by the Bankruptcy Court, Legacy will
issue an additional 2.5 million common shares.
If the conditions are met, the price of approximately $27
million is to be satisfied through the assumption of debt, the
payment of cash and the issuance of shares of Legacy having a
trading value, at closing, of $5 million (USDLR).
Legacy is a personal computer peripheral systems corporation
operating in the data storage subsystems sector. Legacy
manufactures, assembles and distributes data storage subsystems for
the personal computer local area network environment. It provides
technical support services to users of its products, conducts
research and development to upgrade existing products and develops
new products for all major operating systems.
Legacy markets worldwide to Fortune 500 companies.
REXON is a publicly owned company dedicated to data
systems for the computer industry. It offers Wangtek 1/4-inch
cartridge (QIC) and Digital Audio Tape (DAT) drive product. Tecmar
brand solutions include QICVault, DATaVault, ProLine and ProLine CX.
Rexon manufactures in Singapore.
CONTACT: J. Embry Co.,
J. Embry, 310/355-0761