Fruehauf Trailer Corporation Announces Reorganization Plan
12 August 1998
Fruehauf Trailer Corporation Announces the Distribution of Its Plan of Reorganization to Creditors for Confirmation on September 16, 1998
CORONA DEL MAR, Calif., Aug. 12 -- Chriss W. Street,
Chairman, President and CEO of Fruehauf Trailer Corporation, announced the
distribution of Fruehauf's Chapter 11 Plan of Reorganization and Disclosure
Statement today.
The Plan calls for securities held by Fruehauf, which are valued at more
than $21 million, to be distributed to Fruehauf's secured bondholders.
Fruehauf's remaining assets, including its trailer manufacturing operation in
Mexico and portfolio of properties, will be transferred to a liquidating
trust, to be named the "End of the Road Trust," for the benefit of Fruehauf's
creditors. Mr. Street will serve as Trustee for the liquidating trust.
One of the End of the Road Trust's most significant assets is ownership of
Fruehauf de Mexico, which operates a trailer manufacturing plant located
approximately 45 minutes north of the Mexico City airport. Chriss Street and
his team of reorganization and manufacturing specialists assumed control of
Fruehauf in late April of 1997. Fruehauf de Mexico has tripled its production
of trailers and has continued to generate operating profits (EBITDA) despite
an economic slowdown in Mexico. As a result of its increased production of
trailers, Fruehauf de Mexico now has more than 300 employees.
Creditors must vote to approve or reject Fruehauf's Plan by September 9,
and the Delaware Bankruptcy Court has scheduled a hearing to confirm the Plan
on September 16. Chriss Street stated that, "Although Fruehauf's secured
bondholders are impaired, Fruehauf has reached an agreement with its creditors
to allow all creditors, both secured and unsecured, to participate in and
receive distributions from the End of Road Trust. The Debtors urge all
creditors to vote in favor of the Plan."
This press release and statements made by Fruehauf in reports to its
stockholders and public filings, as well as oral public statements by Fruehauf
representatives may contain certain forward-looking statements, as defined by
the Private Securities Litigation Reform Act of 1995. Any forward-looking
statement is, however, subject to certain risks and uncertainties that could
cause actual results to differ materially from those projected. Without
limitation, these risks and uncertainties include approval of the plan of
reorganization, increased competition, dependence on key management, reliance
on certain customers and corporate partnerships, shortages of materials,
dependence on industry trends, government regulation, and dependence on a
single site. Readers should review and consider the various disclosures made
by the Fruehauf in this press release and public filings.
Fruehauf's confirmation hearing will be held at the Delaware Bankruptcy
Court, on September 16, 1998. Creditors and other parties in interest may
obtain a copy of the Plan and Disclosure Statement on the internet at
http://www.camhy.com, by e-mail upon request from dneier@camhy.com and upon
written request from IKON Office Solutions, Attn: Ed Carney, 901 North Market
Street, Suite 718, Wilmington, Delaware 19801.