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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 14, 2000
Waxman Industries, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-5888 34-0899894
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
24460 Aurora Road, Bedford Heights, Ohio 44146
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (440) 439-1830
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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 October 2, 2000, Waxman Industries, Inc. ("the Company") filed a
voluntary petition for relief under Chapter 11 of title 11 of the United States
Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the
District of Delaware (the "Bankruptcy Court"). The case was administered under
the case name IN RE: WAXMAN INDUSTRIES, INC., Case No. 00-3815, with the
Honorable Peter J. Walsh, Chief United States Bankruptcy Judge, presiding over
the case. The Company has continued to operate its business as a
debtor-in-possession during such case.
On October 4, 2000, the Company filed a pre-negotiated Joint Plan of
Reorganization Under Chapter 11 Of The Bankruptcy Code Of Waxman Industries,
Inc. And The Unofficial Bondholders' Committee (the "Plan") and a proposed
Disclosure Statement (the "Disclosure Statement") with the Bankruptcy Court
which was supported by the Unofficial Bondholders' Committee for the Company. A
hearing to consider (i) the adequacy of the prepetition solicitation procedures
(the "Solicitation Procedures") and the Disclosure Statement and (ii)
confirmation of the Plan was held on November 14, 2000. The Plan, the Disclosure
Statement and the Solicitation Procedures were confirmed by the Bankruptcy Court
pursuant to an order dated November 14, 2000 (the "Confirmation Order"). The
Confirmation Order is a final order. The Plan became effective on November 16,
2000 (the "Effective Date").
Set forth below is a summary of the material terms of the Plan. Such
summary is qualified in its entirety by reference to the Plan, a copy of which
is attached hereto as Exhibit 2.1 and incorporated herein by reference.
The Plan provides that the following claims and interests are
"unimpaired" and will be paid in cash on or after the Effective Date or
otherwise satisfied in accordance with the terms of any agreements with the
Company:
CLASS OF CLAIM OR INTEREST ESTIMATED AMOUNT OF CLAIMS
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Class 1 - Priority Claims $25,829
Class 2 - Secured Claims
(other than Deferred Coupon Note Claims) $18,947,251
Class 4 - Unsecured Claims $846,081
Class 5 - Intercompany Claims $0
Class 6 - Class B Common Stock not applicable
Class 7 - Common Stock not applicable
Class 8 - Stock Options not applicable
Unclassified claims under the Plan include administrative expenses and
priority taxes. The amount of the administrative expenses cannot be determined
with any certainty until all applications for compensation submitted by
professionals are considered by the Bankruptcy Court. The estimated amount of
the priority taxes is $701,458. In addition, in accordance with the terms of the
Plan, the
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Company ratified and reaffirmed its obligations to Congress Financial
Corporation ("Congress") as a guarantor and a grantor of liens pursuant to the
working capital credit facility made available by Congress.
The Plan provides that the following class of claims is "impaired" and
will be paid in cash on or after the Effective Date or otherwise satisfied in
accordance with the terms of the Plan or any agreements with the Company:
CLASS OF CLAIM ESTIMATED AMOUNT OF CLAIMS
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Class 3 - Deferred Coupon Note $96,740,788 in principal, plus accrued
Claims interest through the petition date and any
other amounts due under or in connection with
the Indenture (as defined below) and/or
the Deferred Coupon Notes (as defined below).
Under the Plan, each record holder of the 12 3/4% Senior Secured
Deferred Coupon Notes Due 2004, Series A and the 12 3/4% Senior Secured Deferred
Coupon Notes Due 2004, Series B (the "Deferred Coupon Notes") will receive in
full satisfaction, settlement, release and discharge and in exchange for its
allowed claim its pro-rata share of the distribution available under the Plan.
In exchange for the distributions already provided or to be provided to the
record holders of the Deferred Coupon Notes under the Plan, the Plan provides
that on the Effective Date, among other things, (i) both that certain indenture,
dated as of May 20, 1994, by and between the Company and The Huntington National
Bank, as trustee (the "Indenture Trustee"), pursuant to which the Deferred
Coupon Notes were issued (as amended, the "Indenture") and the Deferred Coupon
Notes shall be canceled and of no further force and effect, and (ii) the
collateral pledged prepetition to secure payment to the holders of Deferred
Coupon Notes shall immediately revest in the reorganized Company free and clear
of any and all liens, encumbrances, claims, and/or rights of the Unofficial
Bondholders' Committee, the holders of the Deferred Coupon Notes, the Indenture
Trustee and any other party.
Following consummation of the Plan, the Company and its subsidiaries
will continue to exist as separate corporate entities in accordance with the
laws of their respective states of incorporation and pursuant to their
respective certificates of incorporation and by-laws as in effect prior to the
Effective Date, except to the extent that the Company's certificate of
incorporation and by-laws may be amended as necessary to satisfy the provisions
of the Plan and the Bankruptcy Code.
The board of directors of the reorganized Company shall initially
consist of the following persons, who were the members of the board of directors
of the Company immediately prior to the Effective Date: Melvin Waxman, Armond
Waxman, Laurence Waxman, Irving Friedman, Judy Robins and John Peters.
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INFORMATION AS TO THE ASSETS AND LIABILITIES OF THE REGISTRANT
The accompanying unaudited proforma condensed balance sheets reflect
the transaction as if it occurred on September 30, 2000.
Prior to September 30, 2000, the Company completed the sale of all of
the remaining common stock of Barnett Inc. owned by Waxman USA Inc., a
wholly-owned subsidiary of the Company, and applied the proceeds to repay Waxman
USA's 11 1/8% Senior Notes due 2001, reduce working capital borrowings from
Congress and to pay taxes and other expenses associated with the transaction.
The transaction detailed in these proforma adjustments, gives effect to the
Company's completion of its financial restructuring plan, which included
confirmation of the Plan on November 14, 2000.
The accompanying unaudited proforma condensed balance sheets are not
necessarily indicative of future consolidated results of operations or financial
position of the Company.
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WAXMAN INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED PROFORMA CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2000
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
As Reported Proforma Proforma
September 30, Adjustments September 30,
2000 ------------ 2000
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<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 903 $ 903
Restricted cash 39,024 $(39,024) (1) --
Trade receivables, net 11,284 -- 11,284
Other receivables 4,164 -- 4,164
Inventories 14,233 -- 14,233
Prepaid expenses 1,424 -- 1,424
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Total current assets 71,032 (39,024) 32,008
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PROPERTY AND EQUIPMENT:
Land 579 -- 579
Buildings 4,532 -- 4,532
Equipment 11,059 -- 11,059
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16,170 -- 16,170
Less accumulated depreciation and
amortization (7,308) -- (7,308)
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Property and equipment, net 8,862 -- 8,862
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UNAMORTIZED DEBT ISSUANCE COSTS, NET
2,154 (1,895) (2) 259
OTHER ASSETS 4,089 -- 4,089
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$ 86,137 $(40,919) $ 45,218
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</TABLE>
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WAXMAN INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED PROFORMA CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
As Reported Proforma Proforma
September 30, Adjustments September 30,
2000 ----------- 2000
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<S> <C> <C> <C>
CURRENT LIABILITIES:
Current portion of long-term debt $ 10,172 -- $ 10,172
Accounts payable 6,075 -- 6,075
Accrued liabilities 4,343 -- 4,343
Accrued income taxes payable 1,389 $1,005 (3) 2,394
Accrued interest 3,944 (3,944) (4) --
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Total current liabilities 25,923 (2,939) 22,984
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OTHER LONG-TERM DEBT, NET OF CURRENT PORTION
739 -- 739
SENIOR SECURED DEFERRED COUPON NOTES, NET
91,880 (91,880) (5) --
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value per
share:
authorized and unissued 2,000 shares -- -- --
Common stock, $0.01 par value per
share:
22,000 shares authorized;
9,976 shares issued and outstanding 99 -- 99
Class B common stock, $.01 par value per
share: 6,000 shares authorized; 2,142 shares
issued and outstanding 21 -- 21
Paid-in capital 21,752 -- 21,752
Retained deficit (53,546) 53,900 (6) 354
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(31,674) 53,900 22,226
Accumulated other comprehensive loss (731) -- (731)
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Total stockholders' (deficit) equity (32,405) 53,900 21,495
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$86,137 $(40,919) $45,218
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</TABLE>
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WAXMAN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PROFORMA CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2000
PROFORMA ADJUSTMENTS
(1) Represents the settlement of the obligation to the Deferred Coupon Note
holders with the release of the segregated account upon confirmation of
the Plan.
(2) Represents the write off of debt issuance costs associated with the
Deferred Coupon Notes.
(3) Represents the net adjustment to accrued taxes based on the debt
defeasance and other adjustments.
(4) Represents the elimination payment of accrued interest for the Deferred
Coupon Note holders from June 1, 2000 through September 30, 2000. This
interest was eliminated with the settlement with the holders.
(5) Represents the elimination of the Company's Deferred Coupon Notes.
(6) Represents the net profit and loss impact of the above adjustments.
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ITEM 7. RELATED FINANCIAL INFORMATION AND EXHIBITS.
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(c) EXHIBITS
2.1 Joint Plan of Reorganization Under Chapter 11 of the
Bankruptcy Code of Waxman Industries, Inc. and the
Unofficial Bondholders' Committee.
99.1 Press release issued by the Company on November 15,
2000.
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SIGNATURES
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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.
WAXMAN INDUSTRIES, INC.
(Registrant)
Date: November 27, 2000 By: /S/ MARK W. WESTER
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Name: Mark W. Wester
Title: Vice President - Finance and
Chief Financial Officer
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INDEX TO EXHIBITS
Exhibit No. Page No.
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2.1 Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code of
Waxman Industries, Inc. and the Unofficial Bondholders' Committee.
99.1 Press release issued by the Company on November 15, 2000.
