SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 1, 1997
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Craig Consumer Electronics, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-27882 95-04228391
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
13845 Artesia Boulevard, Cerritos, California 90703-9000
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 562-926-9944
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Not Applicable
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(Former name or former address, if changed since last report.)
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ITEM 3. BANKRUPTCY OR RECEIVERSHIP
On August 1, 1997, Craig Consumer Electronics, Inc. (the "Company" or
"Registrant") filed a Petition for Reorganization under Chapter 11 of the United
States Bankruptcy Code in the Bankruptcy Court for the Central District of
California. These proceedings are pending under the caption "In re: Craig
Consumer Electronics, Inc. f/k/a Berel Industries, Inc.," Case No. LA
97-39551VZ.
The Registrant was in default under its existing revolving line of credit
with BT Commercial Corporation, as agent for a syndicate of banks ("BT"), and
the line of credit was due to mature on August 5, 1997. After extensive efforts
to obtain the necessary financing to make available inventory and to provide
working capital for the Company in order to replace the Company's revolving line
of credit with BT, management determined that the Company could not obtain the
necessary financing without filing a Chapter 11 bankruptcy petition. Immediately
prior to the Company's filing the bankruptcy petition, the Company's working
capital was severely limited and, pending approval of the Bankruptcy Court, the
Company has negotiated financing arrangements to enable the Company to conduct
its active business with a view toward reorganizing under Chapter 11 of the
United States Bankruptcy Code. Effectively, the syndicate of lenders led by BT
has agreed to provide limited "debtor-in-possession" financing to fund current
working capital needs and other costs necessary to continue the business of the
Company for the short term. Additionally, the Company is in the process of
negotiating a distribution arrangement with Starlight Marketing Development
Limited, an affiliate of a Hong Kong company that is a principal supplier to the
Company, to make available inventory for sale to the Company's customers. The
Company is hopeful that it will be able to reorganize its affairs under the
protection of Chapter 11.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Craig Consumer Electronics, Inc.
Date: August 7, 1997 By: /s/ Richard I. Berger
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Richard I. Berger
Its Chairman of the Board of Directors
and President (Principal Executive)
Date: August 7, 1997 By: /s/ Tony Chow
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Tony Chow
Chief Financial Officer
(Principal Accounting Officer)
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