"Our customers and suppliers should experience
no change in the way we do business with them and will
continue to receive the same high quality goods and service to
which they are accustomed"
Paul Bush, outgoing CEO
Paul Bush, outgoing Bush
Bush Industries, Inc. announced today that it has reached an
agreement in principle and executed a lock-up agreement with
holders of more than 85% of the Company's outstanding bank debt.
Pursuant to the terms of the lock-up agreement, the Company
intends to file a petition for reorganization under Chapter 11
of the Bankruptcy Code on or about March 31, 2004 in the United
States Bankruptcy Court for the Western District of New York.
The Company intends to maintain its current level of operations
during the pendency of the bankruptcy proceedings and the
Company expects that its customers and vendors will experience
no change in the way the Company does business with them. The
Company's lenders that are a party to the lock-up agreement will
provide for debtor-in-possession financing, and an exit
financing facility thru 2006. The proposed plan of
reorganization will not impair trade creditor claims.
Under the proposed plan of reorganization, the
Company's outstanding senior debt of approximately $160 million
will be restructured, with approximately $70 million of debt
being refinanced thru 2006, and the balance of approximately $90
million being converted into 100% of the equity of the
reorganized Company. The Company believes that the anticipated
debtor-in- possession financing, together with cash provided by
operations, will provide sufficient liquidity for the Company to
continue its current level of operations during the pendency of
the Chapter 11 proceedings.
The Company's decision to file for bankruptcy
was precipitated by the Company's inability to procure
alternative sources of financing, its inability to obtain an
extension from its lenders of the temporary waiver of non-
compliance with certain covenants under the Company's
outstanding credit facility, and its inability to reach an
agreement with the lenders to extend the term of the loan, which
matures on June 30, 2004. The temporary waiver, previously
announced on March 1, 2004, will expire on April 1, 2004.
Once its petition for reorganization is filed,
the Company expects to seek Court approval to, among other
things, continue payment of pre-petition and post-petition wages
and employee benefits. The Company will also seek authorization
from the Court to pay vendors for goods and services provided to
the Company before the Chapter 11 filing, as long as those
vendors continue to extend regular trade credit to the Company.
The Company expects that all vendors and suppliers will be paid
in full. The Company expects that the pendency of the Chapter 11
proceedings will be approximately 90 to 120 days. None of the
Company's subsidiaries are currently expected to be included in
Additionally, effective as of March 29, 2004,
Paul Bush resigned as Chairman, C.E.O. and director of the
Company and its subsidiaries. Mr. Bush has agreed to remain as
an employee of the Company, to be an advisor to management and
the Board to help ensure a smooth transition during the
restructuring period. He will further advise on and/or assist
with retaining and strengthening customer, vendor and other
relationships, identifying and retaining key personnel,
designing new products and identifying strategic opportunities.
Mr. Michael Buenzow has been elected by the
Company's Board of Directors to serve as the Company's interim
C.E.O. during the pendency of the Chapter 11 proceeding. Mr.
Buenzow, 39, is currently a Senior Managing Director at FTI
Consulting (NYSE:FCN) and has been working with the Company
during the restructuring process. Prior to joining FTI in
September 2002, Mr. Buenzow was a partner in the Business
Recovery Services Practice of PricewaterhouseCoopers. Mr.
Buenzow has had 15 years of restructuring experience.
The balance of the current management team is
anticipated to remain in place. The Company anticipates that the
Board of Directors of the reorganized Company will appoint a
permanent C.E.O. upon emergence from the Chapter 11 proceedings.
The Company has also appointed David G. Dawson as its interim
Chairman of the Board.
"This restructuring, once fully implemented,
will allow Bush to take full advantage of the fundamental
strength of our core business operations. It will provide us a
much-improved balance sheet and capital structure that is more
appropriate for the current economic and market conditions. It
is advantageous that we were able to achieve a consensual plan
of reorganization," stated Paul Bush.
Mr. Bush continued, "Our customers and suppliers
should experience no change in the way we do business with them
and will continue to receive the same high quality goods and
service to which they are accustomed. The Company believes that
it will be in a better financial position to support further
growth and take advantage of additional opportunities in the
In conclusion Mr. Bush emphasized, "We
appreciate the ongoing loyalty and support of our employees and
thank them for their dedication and hard work, which is critical
to our success. We also thank our customers and vendors for
their support during this restructuring process. We are
committed to making this restructuring process successful and
leading Bush Industries towards a brighter future."
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