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): January 20, 1999
CROWLEY MILNER AND COMPANY
(Exact name of registrant as specified in its charter)
Michigan 1-1594 38-0454910
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
Number)
2301 West Lafayette Boulevard, Detroit, Michigan 48216
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (313) 962-2400
Not applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Items.
Significant Operating Losses/Default on Financing Arrangements
Crowley, Milner and Company (the "Company") issued a press release
on January 20, 1999 (the "Press Release"), announcing that it expects to
incur a net loss for the fourth quarter ending January 30, 1999 in excess of
$3.0 million which will result in a default under its financing arrangements
with The Economic Development Corporation of the City of Detroit and which
will give rise to an event of default under the Company's secured loan with
Congress Financial Corporation.
The Press Release further stated that the Company gave layoff
notices to approximately 170 employees at its corporate headquarters and
distribution center and that the Board of Directors has authorized the
Company's President, Lance P. Wimmer, to explore alternatives for maximizing
the value of the Company's assets. Among the alternatives being considered
are a proposal by Value City Department Stores, Inc. to acquire and operate
five Crowley's stores and three Steinbach stores as well as an orderly sale
of the Company's assets under Chapter 11 of the United States Bankruptcy
Code.
Resignation of Two Directors
The Company also announced in the Press Release that Julius Pallone
and Paul Rentenbach have resigned from their positions as directors of the
Company.
De-listing of Stock From American Stock Exchange
The Press Release further reported that the Company had consented to
having its common stock de-listed after being informed by the American Stock
Exchange ("AMEX") that the Company fails to meet the AMEX's requirements for
continued listing of its stock and that the trading halt in its common stock
will not be lifted.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
99.1 Press Release issued by Crowley, Milner and Company on
January 20, 1999.
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.
CROWLEY, MILNER AND COMPANY
By: /S/ LANCE P. WIMMER
-----------------------------
Lance P. Wimmer, President
and Chief Executive Officer
February 4, 1999
EXHIBIT INDEX
Exhibit
No. Description
99.1 Press Release issued by Crowley, Milner and Company on January 20,
1999.
CROWLEY, MILNER AND COMPANY Contact: Lance P. Wimmer
2301 West Lafayette Boulevard (313) 962-2537
Detroit, Michigan 48216-1891 (972) 776-0009
FOR IMMEDIATE RELEASE
CROWLEY'S ANNOUNCES SIGNIFICANT OPERATING LOSSES, COMMENCEMENT OF STORE
CLOSINGS AND LAYOFFS OF PERSONNEL, PROPOSAL FROM VALUE CITY DEPARTMENT
STORES, RESIGNATION OF TWO DIRECTORS, AND DE-LISTING OF STOCK FROM AMERICAN
STOCK EXCHANGE
DETROIT, January 20, 1999 -- Crowley, Milner and Company (AMEX:
COM) announced today that it expects to incur a net loss for the fourth
quarter ending January 30, 1999, in excess of $3.0 million, and that this
will reduce the Company's consolidated shareholders' equity to under $3.0
million, thereby causing a default under its financing arrangements with The
Economic Development Corporation of the City of Detroit relating to its
downtown Detroit headquarters and distribution center, which in turn will
give rise to an event of default under Crowley's secured loan facility with
Congress Financial. Crowley's does not expect that Congress Financial will
accelerate the indebtedness under this secured loan facility, which is
approximately $25 million, pending completion of the Company's evaluation of
alternatives. The Company has commenced clearance sales at its Steinbach
Stores, and has given layoff notices to approximately 170 employees at its
corporate headquarters and distribution center.
Crowley's also announced that two directors, Julius Pallone and Paul
Rentenbach, have resigned, leaving three remaining directors of the Company.
In light of Crowley's financial condition, the Company's Board of Directors
has authorized Lance Wimmer, President of Crowley's, to explore alternatives
for maximizing the value of the Company's assets and the Company has engaged
financial and legal advisors to assist it in evaluating alternatives. In
particular, the Company is negotiating with Value City Department Stores,
Inc., regarding a proposal to acquire and operate five Crowleys stores in
Michigan and three Steinbach stores, one in New Jersey and two in
Connecticut. Mr. Wimmer is also engaged in preliminary discussions with
various other retailers who have expressed an interest in acquiring some of
the other Crowley's and Steinbach stores. Among the alternatives being
considered is an orderly sale of the Company's assets under Chapter 11 of
the United States Bankruptcy Code. Crowley's currently expects to reach an
arrangement with Congress Financial to provide financing in connection with
any such Chapter 11 case.
Mr. Wimmer stated that, "Based on our preliminary discussions with
other interested retailers, I expect that we will receive one or more offers
to support an orderly sale of the Company's assets, in addition to the Value
City offer. However, our current analysis indicates that even if Crowley's
is successful in liquidating its inventories in an orderly fashion and
selling its other assets, there will not be any remaining value for
shareholders."
In addition, the American Stock Exchange has informed the Company
that it fails to meet the AMEX's requirements for continued listing of its
stock, and the Company has consented to having its common stock de-listed.
The Company has also been informed by the AMEX that the trading halt in its
common stock will not be lifted.
