Anchor Glass Adds to Management Team
TAMPA, Fla., June 5, 1997 - Anchor
Glass Container Corporation, the third-largest U.S.
manufacturer in its industry, has named three senior managers
from rival Ball-Foster to top positions, adding further momentum
to Anchor's turnaround. Rick Deneau, chief operating officer at
Ball-Foster, has joined Anchor as president and chief operating
officer. Roger L. Erb, a senior vice president at Ball-Foster,
and Gordon S. Love, a vice president, have joined Anchor as
senior vice president, engineering, and senior vice president,
sales and marketing, respectively.
"These appointments are further evidence of the
commitment to making Anchor once again a leader of the glass
container industry," said John J. Ghaznavi, chairman and
chief executive officer of Anchor and its parent, Consumers
Packaging, which acquired substantially all of the assets of the
company out of bankruptcy early this year.
The appointments announced today are the latest in a series of
actions to revitalize Anchor, which had net profits from
operations in April and May, the first since September 1995.
Ghaznavi, whose privately held investment company is the majority
shareholder of Consumers, Canada's largest glass container
manufacturer, engineered the turnarounds of Pennsylvania-based
Glenshaw Glass Company in 1988 and of Consumers in 1993.
Following their practice at those two companies, Ghaznavi and his
team have cut Anchor's expenses, closed excess facilities and
begun a program of capital expenditures to increase productivity
and improve quality.
Deneau replaces Clifford L. Jones, president and chief
operating officer of Anchor since early February. Jones had
agreed to lead the company during the search for a new management
team, and the appointments announced today permit Jones, whom
Ghaznavi praised for his critical role in the company's rescue,
to resign to fulfill a service commitment to his church.
Deneau, who joined Ball-Foster in 1996, previously headed the
domestic beverage can operations of American National Can and
earlier held various management positions in the glass division.
Erb has been with Foster Forbes and then Ball-Foster for 14 years
as senior vice president of technical services. Previously he
spent 15 years with Brockway Glass.
Love, who has been vice president of sales for beer and liquor
at Ball-Foster, is a 25-year veteran of the industry who started
with the Foster Forbes glass division of American National Can.
The combined Anchor, Consumers and Glenshaw companies have
annual revenues in excess of $1.3 billion. The combined companies
are estimated to have almost one-third of the U.S. glass
container market. Anchor, which employs 4,500 at nine plants in
the U.S., supplies producers of beer, juice, tea, wine, liquor,
soda and mineral water. Consumers (Toronto Stock Exchange: CGC)
employs 2,800 at six facilities in Canada and produces
approximately 90 percent of all glass containers sold in Canada.
Custom manufacturer Glenshaw has 600 employees at a single
location.
SOURCE Anchor Glass Container Corporation /CONTACT: John J.
Ghaznavi, 813-882-7777, or C. Kent May, 813- 882-7802, both of
Anchor Glass Container/
House of Fabrics Reports Fiscal 1997 First
Quarter Results
SHERMAN OAKS, Calif., June 5, 1997 -
HFAB) today announced financial results for the first fiscal
quarter ended April 30, 1997, including a 27 percent reduction in
its net loss.
For the quarter, the company's net loss was reduced to $4.4
million, or $0.81 per share, from a net loss of $6.0 million for
the prior year period. Sales for the first quarter totaled $54.1
million versus $56.5 million in the prior year period.
Results for the current quarter reflect post bankruptcy
operations ("successor company") versus bankruptcy
operations for the corresponding prior year period
("predecessor company"). The company emerged from
Chapter 11 in August 1996.
Donald L. Richey, who joined House of Fabrics as president and
chief executive officer in April 1997, said results for the
quarter were impacted by an aggressive markdown program that
affected the company's margins, along with fewer stores in
operation.
"Our focus going forward will concentrate on the
fundamentals of our business, namely, the core areas of
merchandising, marketing and store operations," said Richey.
"Our immediate objective is to rebuild the intrinsic value
of the company, and we are off to a good start. By quarter's
close, we strengthened our management team with the addition of
two officers with extensive retail fabric experience,
significantly improved our reorder capabilities by shaving down
our turnaround time by one-third and reinstated favorable terms
from our vendors. In addition, a point-of-sale cash register
system was installed in two-thirds of our stores, with full
installation scheduled to be completed in August."
Richey added that, as part of the company's repositioning
program, it is moving away from deep, storewide discounts which
will, ultimately, enhance the company's bottom-line performance.
"We continue to be encouraged by the positive trends
developing in our industry and, with a firm game plan in place,
we look forward to being a much stronger competitor," said
Richey. "While I am not pleased with these results, I am
excited about the progress we have made toward rebuilding the
foundation of our company. I am convinced that the steps we are
taking are right, and we will see the results as we move into our
industry's most productive periods this fall."
House of Fabrics currently operates 261 company-owned House of
Fabrics, Sofro Fabrics, Fabricland and Fabric King retail fabric
and craft stores in 27 states and employs approximately 5,000
people.
House Of Fabrics, Inc.
Income Statements
(Unaudited)
(In $000 -- Except Per Share Data)
Three Months Ended
April 30, 1997 April
30, 1996
Successor Co.
Predecessor Co.
Sales $54,073
$56,515
Expenses:
Cost of Sales 30,626
31,174
Selling, General and Administrative 26,635
26,881
Interest 1,168
2,509
Total Expenses 58,429
60,564
Loss Before Income Taxes and Reorganization Costs(4,356)
(4,049)
Reorganization Costs
- 1,898
Loss Before Income Taxes (4,356)
(5,947)
Income Taxes 24
24
Net Loss $(4,380)
$(5,971)
Net Loss Per Share(a) $(0.81)
N/A
Weighted Average Number of Shares Outstanding5,419,271
N/A
Selected Balance Sheet Data
(Unaudited)
April 30, 1997 January 31, 1997
Inventories $109,177 $104,576
Accounts Payable $15,734 $18,250
Bank Debt $48,979 $42,621
(a) The net income per common share and the weighted average
number of common shares for the Predecessor Company have not been
presented because, due to the Reorganization and implementation of
Fresh-Start accounting, they are not comparable to subsequent
periods.
SOURCE House of Fabrics Inc./CONTACT: John E. Labbett of House
of Fabrics, Inc., 818-385-2305; or Roger S. Pondel of Pondel
Parsons & Wilkinson, 310-207-9300/
GRAND CASINOS ANNOUNCES DEVELOPMENTS IN STRATOSPHERE
CHAPTER 11 PROCEEDINGS
Minneapolis, MN - June 5, 1997 - Grand Casinos, Inc.
(NYSE:GND) announced today that the Official Committee of
Noteholders in the Stratosphere
Corporation Chapter 11 proceedings has filed a motion to
assume, on behalf of Stratosphere, Grand Casinos' obligations
under the Standby Equity Commitment entered into between Grand
Casinos and Stratosphere in connection with the issuance of
Stratosphere's 14-1/4% First Mortgage Notes. As previously
disclosed, Grand Casinos has contended that, as a result of
Stratosphere's bankruptcy filing and the application of federal
bankruptcy laws, the enforceability of the Standby Equity
Commitment is in question. According to the motion of the
Noteholders Committee, Stratosphere has informed the Committee
that Stratosphere concurs with Grand Casinos' contention. Grand
Casinos intends to file a response to the Committee's motion,
which will request the Bankruptcy Court to determine that the
Standby Equity Commitment is unenforceable as matter of law.
Grand Casinos, Inc. has been a publicly traded company since
1991 and is listed on the New York Stock Exchange under the
trading symbol GND. The company currently owns and operates the
three largest casino hotel resorts in the state of Mississippi,
manages two land-based casinos in Louisiana, and manages two
casino hotel resorts in Minnesota.
The Private Securities Litigation Reform Act of 1995 provides
a "safe harbor" for forward-looking statements. Certain
information included in this press release (as well as
information included in oral statements or other written
statements made or to be made by the Company) contains statements
that are forward-looking, such as statements relating to plan for
future expansion and other business development activities as
well as other capital spending, financing sources and the effects
of regulation (including gaming and tax regulation) and
competition. Such forward-looking information involves important
risks and uncertainties that could significantly affect
anticipated results in the future and, accordingly, such results
may differ from those expressed in any forward-looking statements
made by or on behalf of the Company. These risks and
uncertainties include, but are not limited to, those relating to
development and construction activities, dependence on existing
management, leverage and debt service (including sensitivity to
fluctuations in the interest rates), domestic or global economic
conditions, activities of competitors and the presence of new or
additional competition, fluctuations and changes in customer
preferences and attitudes, changes in federal or state tax laws
of the administration of such laws and changes in gaming laws or
regulations (including the legalization of gaming in certain
jurisdictions). For more information, review the Company's
filings with the Securities and Exchange Commission, including
the Company's annual report on Form 10-K and certain registration
statements of the Company.
Flagstar commences solicitation of
acceptances for financial restructuring plan
SPARTANBURG, S.C.--June 5, 1997--Flagstar Companies, Inc.
(OTC:FLST) announced today that its financial restructuring plan
has been declared effective by the Securities and Exchange
Commission, and that it has begun the process of receiving formal
approval of the plan from its stakeholders with the mailing of
its consent solicitation to each of its debt and equity holders.
"With the mailing of our consent solicitation, we take
another step forward in establishing a capital structure for
Flagstar that will enable us to grow our business, with $1.1
billion less debt and $120 million less in annual interest
payments," said James B. Adamson, chairman and chief
executive officer of Flagstar. "Following the completion of
the consent solicitation for our plan, which has been designed to
be fair and equitable to all our stakeholders, we will proceed
with the filing of our Chapter 11 case. We hope to emerge from
this process on or close to our target of Fall of this year, with
the financial flexibility we need for the future."
Holders of Flagstar's outstanding public debt and equity must
vote on the plan by returning the ballots enclosed with their
consent solicitation to Flagstar's information agent, Kissell-
Blake, Inc., by no later than 12:00 midnight Eastern Time on
Monday, July 7, 1997, unless the timetable is extended by the
company.
In order for a class of creditors to accept the plan,
two-thirds in dollar amount and more than one-half in number of
claims of that class that vote on the plan must vote in its
favor. A class of stockholders will accept the plan if two-thirds
in amount of the stock interests in that class that vote on the
plan vote in favor of it. In the event a class does not vote in
favor of the plan, the bankruptcy court may still approve it if
the plan is deemed fair and equitable to all stakeholders, and
the class may forfeit its right to any recovery under the plan.
Flagstar also noted today that in its SEC filing it has
already disclosed that it has received written commitments from
The Chase Manhattan Bank for a $200 million debtor-in-possession
revolving credit facility and a $200 million, five-year senior
secured revolving credit facility that will refinance the
debtor-in- possession facility upon the company's emergence from
Chapter 11. "This financing, which will be used for working
capital advances and letters of credit, will assist us in
assuring that business will continue as usual as we move forward
with our efforts towards Flagstar's recovery," said Adamson.
Flagstar is one of the nation's largest restaurant companies,
with over 3,200 moderately-priced restaurants and annual revenue
of approximately $2.7 billion. Flagstar owns and operates the
Carrows, Coco's, Denny's, El Pollo Loco and Quincy's Family
Steakhouse restaurant brands and is the largest franchisee of
Hardee's.
CONTACT: Flagstar Investor Contact: Larry Gosnell,
864/597-8658 or Kekst and Company Media Contact: Dawn Dover/Ruth
Pachman, 212/521-4800
PA Attorney General Announces Pennsylvania, 39 States Reach
Agreement With Sears To Change Debt
Collection Practices; Consumers To See Refunds
HARRISBURG, Pa., June 5, 1997 - Pennsylvania Attorney General
Mike Fisher announced today that Pennsylvania and 39 other states
have reached a preliminary agreement with Sears, Roebuck &
Co. to settle charges that the company improperly collected debts
from consumers. Under the agreement, Sears will provide refunds
to at least 2,677 Pennsylvania consumers and pay the state about
$1 million - part of $165 million the company will pay
nationwide.
"This preliminary agreement with Sears is a big win for
consumers here in Pennsylvania and across the nation,"
Fisher said. "Though the hard work of investigators and
attorneys, thousands of Pennsylvanians will receive the refunds
from Sears that they deserve."
Fisher said Sears has agreed to: -- forgive all consumer debts
it had improperly obtained; -- repay at least $125 million in
compensation including interest to affected customers;
- pay a total of $40 million to the states, including at least
$1 million to Pennsylvania;
- change certain collection practices. A joint investigation
by Pennsylvania and the other states revealed that Sears, by
threatening to repossess consumer goods, pressured consumers to
make payments on debts even after the debtor was discharged from
responsibility for the debt as the result of a bankruptcy filing.
For at least ten years, Sears obtained "reaffirmation
agreements" from Sears customers in bankruptcy an agreement
under which the consumer agrees to pay a particular debt even
though the consumer would otherwise be freed from responsibility
for paying.
Fisher stressed that reaffirmation agreements are valid only
if consumers enter into them voluntarily and they are filed with
the bankruptcy court. The investigation confirmed that Sears, on
a massive scale, obtained reaffirmation agreements but did not
file them with the court, thus avoiding the court's review.
The Attorney General said Sears has agreed to repay all monies
paid by consumers on these unlawful debts. Although the precise
number of affected consumers is not yet known, Sears has
identified more than 84,000 customers including 2,677 in
Pennsylvania who signed invalid reaffirmation agreements between
July 1994 and April 1997. Under the settlement, Sears will
continue to identify and repay affected customers.
Sears customers who entered into unfiled reaffirmation
agreements prior to 1992 also will be entitled to compensation,
but must file a claim form with Sears. Sears will be establishing
a toll-free number to receive calls from pre-1992 consumers.
Once a customer has been identified either through Sears
records or the claim process, affected customers will receive the
following compensation:
- the debt will be erased; -- Sears will repay the consumer
all the monies paid to the company plus 10 percent interest; and
- no interest will be charged to these consumers on new
purchases made since their bankruptcy.
Consumers will also receive a portion of a $25 million fund to
further compensate those affected by Sears unlawful practices.
The settlement will also require Sears to overhaul its
policies and practices in connection with soliciting and
obtaining reaffirmation agreements in bankruptcy proceedings.
SOURCE Pennsylvania Office of Attorney General /CONTACT: Sean
Duffy, Press Secretary of the Office of Attorney General,
717-787-5211, or at home, 717-545-2370/
Illinois Attorney General Jim Ryan Joins 39 States in $165
Million Settlement Over Sears Illegal
Collection Practices
CHICAGO, IL - June 5, 1997 - Attorney General Jim Ryan joined
39 other states today in announcing a proposed $165 million
settlement following a nationwide investigation of Sears, Roebuck
& Co.'s collection practices against consumers who filed
bankruptcy.
Ryan's Consumer Protection Division played a substantial role
on the negotiation team led by the Massachusetts Attorney
General's Office. The investigation found that Sears violated the
U.S. Bankruptcy Code and state consumer protection laws when it
pressured consumers to make payments on debts after the debt was
forgiven in bankruptcy court.
"The settlement will end a practice that was denying
Illinois citizens their rightful protection under federal
bankruptcy and consumer protection laws," Ryan said.
"And it ensures that those consumers whose rights were
denied will get their money back."
Under the terms of the agreement the company has agreed to:
- forgive all consumer debts improperly obtained by Sears; --
repay at least $100 million in compensation to affected
customers, including interest and finance charges; -- set up an
additional payment fund of $25 million to be paid to consumers
beyond restitution; -- pay $35 million to the states; -- pay an
additional $5 million to the states for consumer education; --
and change improper collection practices.
The investigation confirmed that for at least 10 years, Sears
obtained so- called "reaffirmation agreements" from its
customers in bankruptcy. A reaffirmation agreement is a written
contract by which a Chapter 7 debtor agrees to pay a particular
debt even though their debt would otherwise be discharged in
bankruptcy. When debtors sign proper reaffirmation agreements,
they can keep secured property that would be otherwise
repossessed and they are able to keep credit cards to charge
purchases made after the bankruptcy.
Sears put pressure on consumers by threatening to repossess
their property. When consumers signed reaffirmation agreements,
Sears failed to file them in Bankruptcy Court as required by law.
Sears did this in 30 percent to 65 percent of the agreements
obtained from consumers. Sears estimates it obtained about
500,000 reaffirmation agreements since 1992.
Such agreements can be valid only if they are voluntary and
are filed with the court prior to the close of the bankruptcy and
subject to the court's review. Sears admitted that it improperly
obtained these agreements on a massive scale and never filed them
with bankruptcy court, thereby avoiding the court's review.
While the exact number of affected consumers is not yet known,
Sears has agreed to repay all monies paid by customers on these
unlawful agreements. To date, Sears has identified more than
80,000 customers (at least 394 from Illinois) who signed invalid
reaffirmation agreements between July 1994 and April 1997.
Consumers in every state have been affected by this practice.
The settlement requires Sears to continue to identify every
affected consumer from January 1992 until the present and repay
each one. The identification process will be subject to
verification by an independent auditor. Consumers who signed
reaffirmation agreements prior to 1992 also will be entitled to
compensation but must file a claim form with the claims
administrator. The claim must be documented by the consumer or
Sears.
Affected customers will receive the following compensation:
- the reaffirmed debt will be stricken, -- Sears will repay
the customer all monies paid to Sears on the reaffirmed debt,
including all finance charges and penalties, plus interest at 10
percent, -- and no interest will be charged to these customers on
new purchases made since their bankruptcy.
In addition, affected customers will receive part of a $25
million extra payment fund. This money will be divided among
affected customers pro rata based on the amount of payments made
by each customer on an unlawful debt.
If Sears' reimbursement payments (not including the $25
million extra payment) paid to customers affected between 1992
and 1997 do not reach $100 million, any of remaining money will
be paid to a consumer education fund to be divided pro rata among
the states. Any compensation payable to consumers that is not
delivered after a good faith effort to locate the consumer will
be returned to the states, not Sears.
Other participating states include: Alabama, Arkansas,
Arizona, California, Connecticut, Delaware, Florida, Hawaii,
Iowa, Idaho, Indiana, Kansas, Louisiana, Massachusetts, Maryland,
Maine, Michigan, Missouri, Mississippi, North Carolina, North
Dakota, Nebraska, New Hampshire, New Jersey, New Mexico, Nevada,
New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island,
South Carolina, Tennessee, Texas, Utah, Vermont, Wisconsin and
West Virginia.
SOURCE: Illinois Attorney General /CONTACT: Lori Corral,
312-814-2518, Illinois Attorney General's Office/