UNITED STATES
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): October 8, 1996
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BEST PRODUCTS CO., INC.
(Exact name of registrant as specified in its charter)
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<S> <C>
Virginia 0-24178 54-0853592
State or other jurisdiction (Commission File Number) (I. R. S. Employer Identification No.)
of incorporation)
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1400 Best Plaza, Richmond, Virginia 23227-1125
(Address of principal executive offices) (Zip Code)
(804) 261-2000
(Registrant's telephone number, including area code)
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Item 3. Bankruptcy or Receivership
On September 24, 1996, the Company filed for relief under chapter 11 of
Title 11 of the United States Bankruptcy Code (the "Bankruptcy Code"). The
petition was filed in the United States Bankruptcy Court for the Eastern
District of Virginia (the "Bankruptcy Court") and was assigned case number
96-35267-T. The Company is a debtor-in-possession under the Bankruptcy Code. A
copy of the press release issued by the Company on September 24, 1996 reporting
the filing is attached as an exhibit hereto.
Item 5. Other Events
On October 1, 1996, the Company announced the Bankruptcy Court had
approved a $195 million interim financing facility that would allow the Company
to resume normal operations. A copy of the press release issued by the Company
on October 1, 1996 reporting the approval of interim financing is attached as an
exhibit hereto.
On October 7, 1996, the Company announced plans to close 81 of its 169
stores and three of its four distribution centers during the next several
months. A copy of the press release issued by the Company on October 7, 1996
announcing the store closings is attached as an exhibit hereto.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
Not Applicable.
(b) Pro Forma Financial Information.
Not Applicable.
(c) Exhibits.
99.1 Press Release of the Company dated September 24, 1996.
99.2 Press Release of the Company dated October 1, 1996.
99.3 Press Release of the Company dated October 7, 1996.
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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.
BEST PRODUCTS CO., INC.
Date: October 8, 1996 /s/ Daniel H. Levy
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Daniel H. Levy
Chairman and Chief Executive Officer
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EXHIBIT INDEX
Exhibit
Number Description
99.1 Press Release of the Company dated September 24, 1996.
99.2 Press Release of the Company dated October 1, 1996.
99.3 Press Release of the Company dated October 7, 1996.
EXHIBIT 99.1
BEST PRODUCTS COMMENCES CHAPTER 11 CASE
RICHMOND, Va., September 24, 1996 -- Best Products Co., Inc. (Nasdaq: BESTQ)
today announced that it has commenced a case under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court in Richmond, Va.
Daniel H. Levy, Best Products' Chairman and Chief Executive Officer, said: "The
decision to file was a difficult one. Best Products has been considering all its
alternatives, including the consideration of a proposed offer of merger made by
Ocean Reef Management, which was withdrawn. However, in the circumstances of
contracting credit and the necessity to preserve the value of the assets and
properties of Best Products, it was determined that the overall interests of our
customers, vendors, associates and stockholders required immediate action be
taken so normal operations may resume as expeditiously as is possible."
"As the case goes forward, Best Products will continue to evaluate and take
actions that serve the best interests of all parties," Levy said. "In the
interim, Best Products will continue the process begun earlier this year of
transforming its business from a retail catalog showroom to a more
customer-friendly retail format. We believe this action will minimize the impact
to our vendors and associates."
Best Products also announced it has obtained a Chapter 11 debtor-in-possession
credit facility from CIT Group/Business Credit, Inc., subject to approval by the
bankruptcy court, in the amount of $250 million with a sublimit of $100 million
for the issuance of letters of credit. The debtor-in-possession facility has a
term of 30 months and is unsecured.
Levy said, "The commencement of the Chapter 11 was precipitated by Best
Products' continuing sales decline and resulting deterioration of vendor
support. These factors disrupted the transition to the new format, and the
process of stabilizing the company became increasingly difficult. Without
adequate and balanced inventories for the important holiday season, Best
Products would not realize the benefits of the changes being implemented. The
CIT debtor-in-possession credit facility will enable Best Products to restore
merchandise shipments and allow it to take advantage of the Christmas retail
season."
Best Products, a specialty retailer offering category-dominant assortments of
jewelry and home furnishings, operates 169 Best stores in 23 states. The company
also operates 11 Best Jewelry stores and a nationwide mail-order service.
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EXHIBIT 99.2
COURT APPROVES $195 MILLION IN INTERIM FINANCING
RICHMOND, Va., October 1, 1996 -- Best Products Co., Inc. (Nasdaq: BESTQ) today
said the United States Bankruptcy Court in Richmond, Va., has approved $195
million in interim financing that will allow the company to resume normal
operations.
The court's decision allows Best Products to use $195 million of the $250
million unsecured debtor-in-possession facility the company has obtained from
the CIT Group/Business Credit, Inc. The facility includes a $100 million
sublimit for letters of credit. A hearing to allow Best Products full use of the
facility is scheduled for October 10, 1996.
Chairman and Chief Executive Officer Daniel H. Levy said, "The approval of this
interim facility was necessary to provide our vendors with a greater level of
confidence in their relationships with Best Products. Now the company can resume
normal operations and proceed with maximizing our sales potential during the
fall selling season."
Best Products, a specialty retailer offering category-dominant assortments of
jewelry and home furnishings, operates 169 Best stores in 23 states.
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EXHIBIT 99.3
BEST PRODUCTS TO CLOSE 81 STORES
RICHMOND, Va., October 7, 1996 -- Best Products Co., Inc. (Nasdaq: BESTQ) today
announced plans to close 81 of its 169 Best stores and three of its four
distribution centers during the next several months. The affected stores are
located throughout the country, with a significant number of closings taking
place in Texas, Colorado, Oregon, California and Washington state.
Best Chairman and Chief Executive Officer Daniel H. Levy said, "We regret that
many dedicated associates who have worked diligently on behalf of Best Products
are affected by this decision. However, we have carefully studied our business
and we do not believe these locations will contribute significantly to the
company's future profitability."
Levy said the company has decided to close a substantial number of stores now
rather than closing stores in stages. "We believe it's in the best interests of
the company and its associates to finalize closing plans now and remove
questions about which locations will continue to operate."
The closing announcement follows Best Products' filing for Chapter 11 under the
United States Bankruptcy Code September 24.
The company said it expects "going-out-of-business" sales will begin at closing
stores during the second half of October and end in late December. About 2,000
full-time employees and 2,500 part-time employees will be affected. Each store
employs about 25 full-time and 30 part-time employees. Best Products employs
about 5,500 employees in its other operations.
These stores will be closing:
Arizona: Tucson (East), Tucson (West) and Yuma
California: Anaheim, Campbell, Cerritos, La Mesa, Mission Viejo,
Montclair, Mountain View, Northridge, Oceanside, Pinole,
Pleasant Hill, Pleasanton, Riverside, Sacramento (South), San
Bernardino, San Jose, San Leandro, Santa Ana, Stockton,
Thousand Oaks, Torrance, Ventura, Westminster and West Covina
Colorado: Aurora, Boulder, Denver (Southwest), Fort Collins, Lakewood,
Littleton and Westminster
Idaho: Lewiston
Michigan: Kentwood and Wyoming
Montana: Great Falls and Missoula
Nevada: Henderson and Las Vegas
New Jersey: Cherry Hill, Eatontown and Mays Landing
N. Mexico: Farmington
N. Carolina Raleigh
N. Dakota Bismarck and Grand Forks
Ohio: Sandusky
Oregon: Beaverton, Eugene, Gresham, Milwaukie, Salem and Tannasbourne
Penn.: Springfield
S. Dakota: Rapid City and Sioux Falls
Texas: Amarillo, Austin, Corpus Christi, El Paso, Killeen, Lubbock,
San Antonio (North) and San Antonio (West)
Virginia: Springfield
Wash.: Bellevue, Bellingham, Everett, Federal Way, Lynnwood, Olympia,
Puyallup, Silverdale, Spokane, Spokane Valley, Tacoma,
Tri-Cities and Tukwila
Wyoming: Cheyenne
The distribution centers being closed include two contract operations in the
Denver, Colo. and Seattle, Wash. markets and a company-owned operation in Las
Vegas, Nev. About 75 employees work in those facilities.
Best Products, a specialty retailer offering category-dominant assortments of
jewelry and home furnishings, now operates 169 Best stores in 23 states.
Following the closings, Best Products will continue to operate 88 stores in 17
states.
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