Excelsior-Henderson Announces Disclosure Statement Approval and Agreement Reached with Creditors
24 May 2000
Excelsior-Henderson Announces Disclosure Statement Approval and Agreement Reached with Creditors
BELLE PLAINE, Minn.--May 24, 2000-- Excelsior-Henderson Motorcycle Manufacturing Company announced the Bankruptcy Court had approved the disclosure statement to be distributed to creditors in connection with its proposed plan of reorganization. The plan of reorganization is the product of intensive efforts by the Company to design a strategy that would enable the Company to reorganize and obtain the required additional equity funding to preserve the future of the Company. As previously announced, the proposed plan describes how the various secured and unsecured creditors will be paid, and also describes that the Company's current stockholders will neither retain nor obtain an equity interest in the Company going forward. The Company did not receive a proposal from any buyer which provided for continued participation of the Company's equity holders.Under bankruptcy law, approval of the Company's stockholders is not necessary for confirmation of the reorganization plan. Accordingly, the disclosure statement and plan will not be distributed to stockholders. Stockholders who wish to review the disclosure statement and plan may access the documents on the U.S. Bankruptcy Court's website at www.mnb.uscourts.gov. The disclosure statement and related plan will be filed with the United States Securities and Exchange Commission on Form 8-K.
The approved disclosure statement also reflects the agreement reached with the State of Minnesota regarding a loan made by the Minnesota Agricultural and Economic Development Authority. If the plan is confirmed, the Authority will receive full principal payments over a period not to exceed nine years. As previously announced, other secured creditors will receive restructured notes. Unsecured creditors will receive, among other things, a pro rata distribution of cash and the right to receive an annuity stream of certain royalties based on the Company's gross sales, subject to a maximum amount. These payments will only partially satisfy unsecured claims. Under the plan, E.H. Partners will contribute or cause to be contributed a substantial capital infusion in exchange for the issued and outstanding equity of the Company upon the effective date.
The Company's Co-Founders and Co-Chief Executive Officers, Dan and Dave Hanlon said, "We believe the proposed plan of reorganization represents the best available alternative for the Company and its creditors. It is also a good alternative for the surrounding community as we expect manufacturing operations will resume in Belle Plaine. However, it is highly unfortunate that all equity shareholders, common and preferred, including ourselves, lost our entire equity stake. There are a lot of shareholders and motorcyclists who have believed in us and the Company, and it is unfortunate that we are all sacrificing. We regret that a plan could not be developed by the Company and E.H. Partners which provided for continued participation by the Company's equity holders. Regardless of these short-term setbacks, we remain steadfastly committed to the future of Excelsior-Henderson, and we hope that others will also. "
The Company encountered a difficult situation in November 1999 when the preferred stockholders investment group did not fund an expected commitment set forth in a letter of intent. Shortly thereafter, in December 1999, the Company sought protection from creditors in an effort to reorganize and secure the needed equity investment to continue the operations of the Company.
The summary of the proposed plan of reorganization set forth above is brief and is qualified in its entirety to the full text of the disclosure statement and the proposed plan of reorganization. This press release is for information only and is not an offer to sell any securities nor is it a solicitation of acceptance of the plan. Solicitation of acceptance of the plan is being made only pursuant to the disclosure statement approved by the Bankruptcy Court.
Notes concerning forward-looking statements:
This press release contains forward-looking statements regarding the proposed plan of reorganization. The Company's actual results could differ materially from those anticipated in these forward-looking statements. There can be no assurance that the proposed plan of reorganization will be approved. Investors and creditors are also encouraged to review the factors described from time to time in the Company's reports on file with the Securities and Exchange Commission, including but not limited to the Company's Annual Report on Form 10-K for the fiscal year ended January 2, 1999 and the Company's Quarterly Report on Form 10-Q for the Quarterly period ended October 2, 1999.