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InterNet Bankruptcy Library - News for April 23, 1997

Bankruptcy News For April 23, 1997

  1. Mercury Finance Company Updates
            Financial Estimates

Mercury Finance Company Updates
Financial Estimates

CHICAGO, IL - April 23, 1997 - Mercury Finance Company (NYSE:
MFN) today announced an estimated net loss for the year ended
December 31, 1996 in the range of $48 to $55 million, or $0.28 to
$0.32 per share. This announcement is an update of Mercury's
January 29 estimate of a $56.7 million, $0.33 per share profit
for 1996. Shareholder's equity as of December 31, 1996, is
estimated to be between $138 million and $145 million, down from
the $263 million estimated on January 29.

The change in estimated earnings is due primarily to
additional loss provisions of $125 million and the establishment
of a $25 million reserve for the loss on the pending sale of
Lyndon Insurance Company. Management believes that the
methodology employed to compute the loss reserves, which has the
support of Arthur Andersen LLP, the company's independent
accounting firm, to be as conservative as any utilized in the

All these amounts continue to be preliminary and subject to
further revision. Arthur Andersen LLP continues its audit
examination and expects to have its audit opinion on 1996
available by the end of May. The company expects that the
auditor's formal opinion will raise doubts about the company's
ability to continue as a going concern, primarily because the
company continues to be in default of its debt agreements.

William A. Brandt, Jr., president and chief executive officer,
said that a substantial portion of the additional loss provision
relates to retail installment contracts and loans originated in
1995 and prior years and that the 1996 loss provision is not
indicative of future expected loss rates. Steps have been taken
by the company to improve the quality of newly acquired loans and
retail installment contracts, as well as to increase efforts to
collect outstanding balances.

Mercury has a $50 million credit facility with BankAmerica
Business Credit of which $40 million is available to borrow. This
facility, combined with daily cash flows, continues to provide
more than sufficient working capital to operate the business and
pay interest on its debt obligations. The company continues to
work with its lenders concerning the amounts owed in order to
provide for a long-term solution to its capital requirements.

SOURCE Mercury Finance Company /CONTACT: Joe Kopec or Jim
Fitzpatrick of The Dilenschneider Group, 312-553-0700, for
Mercury Finance Company/