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InterNet Bankruptcy Library - News for July 21, 1997







Bankruptcy News For July 21, 1997




        
  1. NutraMax Enters Agreement to Acquire
            American White Cross First Aid Business

  2.     
  3. NJS Acquisition Has Entered Into a
            Purchase Agreement to Acquire 20% of the Kiwi
            International Holdings

  4.     
  5. Payless Cashways Receives Approval for
            $90 Million Interim DIP Financing

  6.     
  7. Payless Cashways Files Chapter 11 and
            Plan of Reorganization To Facilitate Restructuring;






NutraMax Enters Agreement to Acquire American
White Cross First Aid Business



GLOUCESTER, Mass., July 21, 1997 - NUTRAMAX PRODUCTS, INC.
(Nasdaq: NMPC), today announced that it has entered into a
definitive agreement with American
White Cross, Inc.
for the purchase of substantially all of
the assets, and the assumption of certain liabilities, of the
first aid business of American White Cross.



American White Cross is a leading manufacturer and marketer of
store brand and value brand first aid products including adhesive
bandages, medical tapes and first aid kits. In addition to its
consumer directed mass retail business, American White Cross also
services the hospital and industrial safety markets with a
product line that includes variations of its consumer product
line, plus operating room sponges, esmark bandages and other
related first aid items.



Donald E. Lepone, President and Chief Executive Officer said,
"The acquisition of the AWC product line enhances the
company's position as an important store brand supplier to our
retail partners by adding a powerful group of profitable products
to NutraMax. This new product line also strengthens the presence
of NutraMax in the Hospital/Industrial Safety market by adding to
NutraMax eye care and cough/cold sales in this large and growing
market segment."



Under the terms of the agreement, the company will pay
$40,000,000 in cash for the American White Cross first aid
business and will assume its post- petition liabilities. The
purchase price is subject to adjustment based upon the value of
inventory, accounts receivable, and the amount of assumed
liabilities as of the closing date. At the closing, approximately
$5,000,000 will be deposited in escrow to secure primarily the
post-closing purchase price adjustments and indemnity obligations
of American White Cross. The closing of the transaction is
subject to approval by the United States Bankruptcy Court for the
District of Delaware, in which the bankruptcy case of American
White Cross currently is pending. The closing is also subject to
a number of other conditions, including the completion of due
diligence and the procurement by the Company of financing.



NutraMax is a leading private label health and personal care
products company and the number one manufacturer and marketer of
private label Disposable Douches, ready-to-use Enemas, Pediatric
Electrolyte Oral Maintenance Solutions, Disposable Baby Bottles,
Cough Drops and Throat Lozenges. The Company also markets a broad
line of Contact Lens Care Products, OTC and generic prescription
Ophthalmics, Clotrimazole-based Yeast Infection Medications,
Toothbrushes, Dental Floss and Liquid Adult Nutritional Products.
NutraMax products are sold by supermarkets, drug chains and mass
merchandisers under both store brand names and control brands,
including Powers, Optopics, Sweet' n Fresh(R), Pure and Gentle,
Fresh' n Easy, Pro Dental and NutraMax.



Certain of the statements made in this news release constitute
forward looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Although the Company
believes that its expectations are based on reasonable
assumptions within the bounds of its knowledge of its business
and operation, there can be no assurance that the transaction
with American White Cross will be consummated or that actual
results will not differ materially from the Company's
expectations. Factors which could cause the foregoing include,
but are not limited to the results of the Company's due diligence
investigation to be conducted in connection with the transaction,
the Company's ability to obtain the financing necessary to pay
the purchase price, the possibility that other customary
conditions to the consummation of the transaction will not be
satisfied or waived by the parties on or prior to closing, and
other factors affecting the Company's business generally,
including the timing and amount of new product introductions by
the Company, the timing of orders received from customers, the
gain or loss of significant customers, changes in the mix
products sold, competition from brand name and other private
label manufacturers, seasonable changes in the demand for the
Company's products, increases in the cost of raw materials and
changes in the retail market for health and beauty aids in
general. For additional information concerning these and other
important factors which may cause the Company's actual results to
differ materially from expectations and underlying assumptions,
please refer to the Company's Annual Report on Form 10-K for the
year ended September 28, 1996 and other reports filed with the
Securities and Exchange Commission.



SOURCE NutraMax Products Inc. /CONTACT: Donald E. Lepone,
President and Chief Executive Officer, 508-283-9611, ext. 1257,
or Robert F. Burns, Chief Financial Officer, 508-282-1800, ext.
1647, both of NutraMax Products/






NJS Acquisition Has Entered Into a Purchase Agreement to
Acquire 20% of the Kiwi International Holdings



HUNTINGTON STATION, NY--July 21, 1997--Nicholas Seccafico,
president of NJS Acquisition Corp. (traded on the Electronic
Bulletin Board under the symbol "NJSA"), announced that
it has entered into a purchase agreement to acquire 20% of the href="chap11.kiwi.html">Kiwi International Holdings Inc.
("KIH").



KIH has today purchased 100% of the assets of Kiwi Airlines
through an accelerated restructuring under 363 of the U.S.
Bankruptcy Code. As part of NJS's agreement, KIH has agreed to
enter into a merger agreement within a sixty day period to merge
KIH with NJS as the surviving corporation and changing its name
to Kiwi International Holdings Inc. Upon the completion of the
merger, the company expects to make application for listing of
its common stock on the NASDAQ Small Cap Market. Seccafico will
join the board of directors.



This press release contains forward looking information that
is subject to certain risks and uncertainties that could cause
actual results to differ materially from those projected. The
forward looking statements included in this press release are
based on management's current expectations. In light of the
assumptions and uncertainties inherent in forward looking
information, the inclusion of such information should not be
regarded as a representation by NJS or any other person that the
plans of Kiwi Airlines will be realized or that positive trends
in financial results will occur.



CONTACT: NJS Acquisition Corp. 516/423-8280






Payless Cashways Receives Approval for
$90 Million Interim DIP Financing



KANSAS CITY, Mo., July 21, 1997 - href="chap11.paylesscashways.html">Payless Cashways, Inc.
(NYSE:PCS), said today that it had received Court approval of
interim debtor- in-possession (DIP) financing provided under a
loan agreement with a group of financial institutions led by
Canadian Imperial Bank of Commerce (CIBC).



On an interim basis, the Court approved $90 million of the
$125 million DIP financing intended to provide funding for all
post- petition trade and employee obligations, as well as the
Company's ongoing operating needs during the restructuring
process. The Court scheduled a final hearing with respect to the
remaining $35 million of the DIP financing for August 20.



"We are pleased that the Court promptly approved the
Company's request for financing," said David Stanley,
chairman and chief executive officer. "This funding will
help provide our vendors with additional financial assurances
that we will be operating on a business-as-usual basis."



In hearings today, the Court approved the Company's requests
to pay pre- petition employee wages and benefits, use cash
collateral and existing bank accounts, to pay pre-petition claims
of independent contractors, as well as requests relating to the
administration of the case.



Earlier today Payless Cashways simultaneously filed a
voluntary petition to reorganize under Chapter 11 of the
Bankruptcy Code and a plan of reorganization for its emergence
from Chapter 11. In its announcement of the filing, the Company
said that the proposed restructuring plan would significantly
reduce its burdensome debt structure and enable it to compete
more effectively in the future.



Payless Cashways, Inc. is a full-line building materials
specialty retailer concentrating on remodelers, residential and
commercial contractors, property management and industrial firms,
and do-it-yourselfers. The Company currently operates 194
building materials stores in 22 states located in the Midwestern,
Southwestern, Pacific Coast, Rocky Mountain, and New England
areas. The stores operate under the names of Payless Cashways,
Furrow, Lumberjack, Hugh M. Woods, Somerville Lumber, Knox
Lumber, and Contractor Supply. Payless Cashways currently employs
approximately 17,000 people in its stores, headquarters offices
and distribution centers.



The Company filed its petition and plan of reorganization in
the U.S. Bankruptcy Court for the Western District of Missouri in
Kansas City.



This paragraph is included in this release to comply with the
safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. There are certain important factors that
could cause results to differ materially from those anticipated
by the forward- looking statements made above. Investors are
cautioned that all forward-looking statements involve risk and
uncertainty. Among the factors that could cause different results
are: consumer spending and debt levels, interest rates, housing
activity, lumber prices, product mix, growth of certain market
segments, competitor activities, an excess of retail space
devoted to the sale of building materials, success of the Dual
Path strategy, the need for Bankruptcy Court approvals, the
adequacy of and compliance with the DIP financing, stability of
customer demand and supplier support, and the many uncertainties
involved in operating a business in a Chapter 11 bankruptcy
environment. Additional information concerning certain of these
and other factors is contained in the company's SEC filings,
copies of which are available from the Company without charge or
on the Company's web site, payless.cashways.com.



SOURCE Payless Cashways, Inc. /CONTACT: Sandra Sternberg or
Ann Julsen of Sitrick And Company, 816-234-6183, or 310-788-2850/






Payless Cashways Files Chapter 11 and
Plan of Reorganization To Facilitate Restructuring;



KANSAS CITY, Mo., July 21, 1997 - href="chap11.paylesscashways.html">Payless Cashways, Inc.
(NYSE: PCS) said today that, in order to facilitate the
restructuring of its debt, the Company has simultaneously filed a
voluntary petition to reorganize under Chapter 11 of the
Bankruptcy Code and a plan of reorganization for its emergence
from Chapter 11. The Company said that the proposed restructuring
plan would significantly reduce its burdensome debt structure and
enable it to compete more effectively in the future.



Payless Cashways said that the plan, which provides some
recovery for all the Company's constituencies upon completion of
the restructuring, has the required support of its bank group.
The Company said that it would be contacting its other key
constituencies in an attempt to obtain their approval of the plan
of reorganization, as well. In the meantime, the filing of the
Chapter 11 petition will allow Payless Cashways to continue to
operate its business without interruption while it obtains
necessary approval of its plan of reorganization.



In conjunction with the filing, the Company said that it has
received a commitment from a group of financial institutions led
by Canadian Imperial Bank of Commerce (CIBC), the Company's agent
bank, for $125 million in debtor- in-possession (DIP) financing.
The post-petition financing, which is subject to Court approval,
is expected to provide adequate funding for all post- petition
trade and employee obligations, as well as the Company's ongoing
operating needs during the restructuring process.



"Key to improving Payless Cashways' competitive position
is to improve our balance sheet," said David Stanley,
chairman and chief executive officer. "The Company has
operated with an extremely burdensome level of debt which has
limited capital expenditures during a period of unprecedented
competitive pressure. The plan of reorganization we filed today
is critical to establishing a more appropriate capital structure
and a strong competitive future for Payless Cashways.
Importantly, the Company has secured a commitment for $150
million of financing from a group of lenders for use upon
completion of the reorganization."



Although the Company was profitable on an EBITDA (earnings
before interest, taxes, depreciation and amortization) basis in
its second quarter ended May 31, 1997, and had sufficient
liquidity to fund current operations, Mr. Stanley said that the
Company was unlikely to be able to meet the requirements of its
principal credit agreements at the end of the current fiscal
year.



As a result, the Company has been working with its senior
lenders over the past several weeks in an attempt to restructure
its debt. "In the course of these negotiations and after
considering all other alternatives, including the sale of the
Company and liquidation, it became clear that Chapter 11 provided
the best approach for a comprehensive restructuring of the
Company. Our plan will finally create a capital structure to
support the operation of our business after a decade of dealing
with a highly leveraged balance sheet," he said.



"Our consumer research and the more than one million
customers who shop with us each week clearly indicate a demand
for our stores," Mr. Stanley continued. "Our challenge
is to continue to offer an appealing, easy-to-shop environment to
do-it-yourselfers and professional customers who want an
alternative to warehouse shopping. In markets where we have
implemented our Dual Path Strategy, converting existing store
formats to provide facilities for both do-it-yourselfers and
professionals, we have seen meaningful improvements in results.
We are confident that we will see the same sort of success in
other markets as we roll out this strategy across the country,
and we intend to concentrate our energies on doing just
that."



Concurrently, the Company announced that it intends to close
29 stores, eliminating about 1,900 positions, and to implement an
approximately 100-person reduction in force at the Company's
headquarters and regional administrative centers.



The Company said that neither Payless Cashways' employees nor
its customers at its 165 ongoing stores should notice any
difference in operations as a result of the filing. Daily
operations will continue, stores will remain open, and
transactions which occur in the normal course of business will go
on as before. Policies regarding returns, exchanges, special
orders, deposits, credit purchases and gift certificates will
remain unchanged. During the reorganization proceeding, employees
will be paid as usual.



The Company has been in contact with many of its suppliers,
and believes that they will continue to support Payless Cashways
during the reorganization period, Mr. Stanley said. "With
our current liquidity and the DIP financing, once approved by the
Court, we are confident we will have adequate financial resources
to purchase the goods and services we need for the relatively
short duration of the Chapter 11 process expected by the Company.
We anticipate that the vast majority of our suppliers will
recognize the value of doing business with us long term."



He said that with the support of its suppliers and the hard
work of its employees, Payless Cashways is optimistic it will
emerge from the restructuring process as a stronger, profitable,
more competitive enterprise. "We are extremely grateful to
the customers, employees and suppliers who have supported the
Company through these challenging times, and we believe this
restructuring will set the Company on a path of future growth and
profitability."



Payless Cashways, Inc. is a full-line building materials
specialty retailer concentrating on remodelers, residential and
commercial contractors, property management and industrial firms,
and do-it-yourselfers. The Company currently operates 194
building materials stores in 22 states located in the Midwestern,
Southwestern, Pacific Coast, Rocky Mountain, and New England
areas. The stores operate under the names of Payless Cashways,
Furrow, Lumberjack, Hugh M. Woods, Somerville Lumber, Knox
Lumber, and Contractor Supply. Payless Cashways currently employs
approximately 17,000 people in its stores, headquarters offices
and distribution centers.



The Company filed its petition and plan of reorganization in
the U.S. Bankruptcy Court for the Western District of Missouri in
Kansas City.



This paragraph is included in this release to comply with the
safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. There are certain important factors that
could cause results to differ materially from those anticipated
by the forward- looking statements made above. Investors are
cautioned that all forward-looking statements involve risk and
uncertainty. Among the factors that could cause different results
are: consumer spending and debt levels, interest rates, housing
activity, lumber prices, product mix, growth of certain market
segments, competitor activities, an excess of retail space
devoted to the sale of building materials, success of the Dual
Path strategy, the need for Bankruptcy Court approvals, the
adequacy of and compliance with the DIP financing, stability of
customer demand and supplier support, and the many uncertainties
involved in operating a business in a Chapter 11 bankruptcy
environment. Additional information concerning those and other
factors is contained in the company's SEC filings, copies of
which are available from the Company without charge or on the
Company's web site, payless.cashways.com.



SOURCE Payless Cashways, Inc. /CONTACT: Sandra Sternberg or
Ann Julsen, 816-234-6183 or 310- 788-2850, both of Sitrick And
Company for Payless Cashways/