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): April 20, 1999
WILLCOX & GIBBS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
333-24507 22-3308457
(Commission File Number) (IRS Employer Identification No.)
900 Milik Street, Cartaret, New Jersey 07008
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 541-6255
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ITEM 3. BANKRUPTCY OR RECEIVERSHIP
On April 20, 1999, Willcox & Gibbs, Inc. (the "Company" or "Willcox
& Gibbs") and its subsidiaries WG Apparel, Inc., Leadtec Systems, Inc., J&E
Sewing Supplies, Inc., W&G Daon, Inc., Clinton Management Corp., Clinton
Machinery Corporation, Clinton Leasing Corp., Clinton Equipment Corp.,
Macpherson Meistergram, Inc., Geoffrey E. Macpherson Canada, Inc., Emtex Leasing
Corporation and Paradise Color Incorporated filed petitions for reorganization
under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for
the District of Delaware. The petitions were filed, as planned, to seek to
implement a financial restructuring that has been prenegotiated with an informal
committee of holders of the Company's 12 1/4% Senior Notes. The filing also
includes a plan of reorganization and a proposed disclosure statement.
The restructuring will result in the substantial deleveraging of the
Company by canceling its existing $85 million in principal amount of 12 1/4%
Senior Notes in exchange for $5,206,250 in cash, $30,000,000 principal amount of
a new issue of 7% Senior Notes and 850,000 shares of Class A Common Stock of the
Company, which represent 80% of the shares of Company Common Stock to be
outstanding on the effective date of the plan. Existing Common Stock in the
Company would be canceled in exchange for 212,500 shares of Class B Common Stock
of the Company, which represent 20% of the shares of the Company Common Stock to
be outstanding on the effective date of the plan, and warrants for the purchase
of a total of 176,748 shares of Class A Common Stock of the Company exercisable
at a purchase price of $.01 per share. The warrants will be exercisable only if
the average daily closing price per share of the Class A Common Stock determined
over 20 trading days exceeds certain specified targets. The Common Stock to be
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issued under the plan generally will be freely tradeable in the public market.
The plan of reorganization provides for payment in full in cash of
all pre-petition trade claims. In addition, Willcox & Gibbs will continue during
the Chapter 11 case to pay trade creditors all post-petition obligations as they
come due.
Willcox & Gibbs also announced that it had agreed to a $23 million
Debtor-in-Possession ("DIP") revolving credit facility with The CIT
Group/Business Credit, Inc. and a DIP term loan of $7.5 million provided on a
subordinated basis by certain other lenders. These facilities have been approved
on an interim basis by the Bankruptcy Court and are subject to final approval.
The Delaware Bankruptcy Court has scheduled hearings to consider
final approval of the DIP facilities on May 12, 1999, and to consider Willcox &
Gibbs's disclosure statement on June 28, 1999.
Implementation of the restructuring is subject to consummation of
the Chapter 11 plan, which requires, among other things, arranging a new credit
facility to be available upon emergence from Chapter 11 and Bankruptcy Court
approval of the plan. No assurances can be given that the plan will be
consummated. This SEC filing is not an offer with respect to any securities or
solicitation of acceptances of a Chapter 11 plan. Such an offer or solicitation
will be made in compliance with all applicable securities laws and provisions of
the Bankruptcy Code.
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SIGNATURE
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.
WILLCOX & GIBBS, INC.
Date: May 3, 1999 By /s/ John K. Ziegler
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John K. Ziegler
Chairman of the Board and
Chief Executive Officer
