County Seat Stores Files Plan and
Disclosure Statement
DALLAS, TX--Aug. 1, 1997--County
Seat Stores, Inc. announced today that it has recently filed
a plan of reorganization and disclosure statement in its chapter
11 bankruptcy case which presently pends in the United States
Bankruptcy Court for the District of Delaware. The distribution
concepts embodied in the plan are supported by County Seat's
creditors' committee. The Bankruptcy Court has scheduled August
22, 1997 as the date for the hearing to consider the adequacy of
the disclosure statement. If the disclosure statement is
approved, it is anticipated that a hearing on confirmation of the
plan will be held on October 1, 1997.
The basic structure of the plan is that holders of general
unsecured claims against County Seat Stores will receive 100% of
the New Common Stock of Reorganized County Seat Stores. Certain
holders of preferred stock at the County Seat Stores' level will
receive warrants to purchase up to 15% of Reorganized County Seat
Stores at strike prices to be determined based upon the total
value of distributions to be received by holders of general
unsecured claims.
The plan contemplates that Reorganized County Seat Stores will
enter into a new credit facility and will issue new senior notes
for cash. Monies from these transactions will be used by
Reorganized County Seat Stores to make certain payments required
by the plan and for general working capital purposes in respect
of its post-confirmation operations.
Since its bankruptcy filing, County Seat has, under the
direction of Sam Forman, its new President and Chief Executive
Officer, redirected its merchandising, buying and operational
efforts. In particular, County Seat has implemented a strategy
emphasizing value-oriented private label casual apparel which
yields significantly higher profit margins than brand name
merchandise. In addition, County Seat has used the protections.
available under the Bankruptcy Code to close underperforming
stores and to reject unfavorable leases.
Regarding County Seat Stores' progress in its reorganization
case, Mr. Forman stated, "Filing of the plan and disclosure
statement was an important step forward in restoring County Seat
to a position of health and vitality. We look forward to our
prompt emergence from bankruptcy. Because of our stream-lined
operations and refocused merchandising plan, County Seat can
compete successfully in the specialty retail business."
County Seat Stores is one of the nation's largest casual wear
retailers with over 450 stores in 43 states.
CONTACT: Matthew J. Knopf 612/829-2124
Craig Electronics Announces Plans To
Reorganize Under Chapter 11
CERRITOS, Calif.--Aug. 1, 1997--Craig
Consumer Electronics Inc. (NYSE:CREG) Friday announced the
filing of a Chapter 11 Bankruptcy Petition in order to reorganize
its financial affairs.
The case was commenced in the Central District of California
in Los Angeles.
Craig attributes the necessity for seeking bankruptcy relief
to a decline in sales (suffered throughout the industry in
varying degrees), excessive returns, particular difficulties in
obtaining product from the company's Chinese joint venture, and
slower than usual collections, all of which detracted from the
borrowing capacity and cash flow of the company in a manner that
progressively limited the company's access to capital.
The borrowing limits and cash flow difficulties over the
recent period have virtually eliminated access to capital for
operating expenses and meaningful inventory supplies.
In connection with the Chapter 11 filing, the company is
entering into financing arrangements, all of which are required
to be approved by the bankruptcy court, including
debtor-in-possession advances from BT Commercial Corp., as agent
for a syndicate of lenders, which will enable the company to ship
products and actively conduct its business for the foreseeable
future, pending the proposal of a definitive plan of
reorganization.
Management of the company expects to fill all existing
customer orders for the sale of products to its credit-worthy
customers and hopes that ongoing sales, together with the
financing and supply arrangements entered into with one of its
principal vendors, will enable reorganization of a more healthy,
if not smaller, Craig.
Management believes that necessary financing to ensure an
ongoing supply of inventory, given the events giving rise to the
Chapter 11 filing, can only be made available through the
bankruptcy process and that the Chapter 11 filing will give the
company time to effectively deal with necessary obligations in a
manner that could allow the effective reorganization of the
business.
Richard Berger, chief executive officer of the company,
stated: "These have been difficult times in our industry and
the confluence of circumstances that weakened our capacity for
financing can hopefully be overcome. We are hopeful that we can
build enterprise value through the reorganization process,
assuming the continued support of our senior lenders and
principal vendors.
"We're looking forward to healthy fall and holiday
seasons and believe that, if sales are as anticipated based on
our history for these periods, inventory will be made available
and we can move forward to create a more sound reorganized
entity."
The company's bankruptcy schedules reflect assets of
$21,747,268 and liabilities of $24,155,122.
CONTACT: Craig Consumer Electronics, Cerritos 562/926-9944
562/926-9269 (fax)