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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):
December 17, 1999 (December 16, 1999)
AMERICAN PAD & PAPER COMPANY
(Exact name of registrant as specified in its charter)
Commission file number 1-11803
Delaware 04-3164298
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
17304 Preston Road, Suite 700, Dallas, TX 75252-5613
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 733-6200
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Item 5. Other Events.
Dallas, December 16, 1999 -- American Pad & Paper Company (OTCBB:AMPP)
(AP&P) today announced that it is in continuing negotiations with its bank group
and a committee of bondholders. It is the Company's understanding that this
bondholder committee represents holders of over 70% of the principal amount of
its subordinated debt.
This press release is incorporated herein as Exhibit 99.034
Exhibit
99.34 Press release by the Company dated December 16, 1999.
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.
American Pad & Paper Company
December 17, 1999 /s/ David N. Pilotte
Date David N. Pilotte
Vice President and Corporate Controller
Principal Accounting Officer
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Exhibit 99.034
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News Release
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For Immediate release CONTACT: Mark Lipscomb
(972) 733-5415
AMERICAN PAD & PAPER ANNOUNCES PROGRESS IN
NEGOTIATIONS WITH ITS CREDITORS
Dallas, December 16, 1999 -- American Pad & Paper Company (OTCBB:AMPP)
(AP&P) today announced that it is in continuing negotiations with its bank group
and a committee of bondholders. It is the Company's understanding that this
bondholder committee represents holders of over 70% of the principal amount of
its subordinated debt.
The Company has previously been notified by its banking group of
defaults under its bank credit agreement relating to the perfection of the
collateral security interests under the banks' credit facility, interest
payments and related issues. These notifications have prevented the Company from
making an interest payment to its bondholders due on November 15, 1999. Since
that time the Company has been working with the banks, bondholders and their
advisors to resolve these issues. The parties continue to make progress and have
extended their discussions past the December 15, 1999 expiration of the 30-day
grace period outlined in the subordinated debt indenture.
As previously announced, the Company has engaged Lazard Freres to
analyze its strategic and financial alternatives. Recently the bank group
engaged the Blackstone Group as its advisors in this matter, and the firm of
Chanin Capital Partners is advising the bondholder committee.
In terms of asset sales, Lazard has received several indications of
interest regarding the Williamhouse division and other business assets. The
Company will review all serious inquiries as it pursues the goal of debt
reduction. The Company plans to provide an update on the progress of both asset
sales and the continuing discussions with its banks and bondholders no later
than mid-January.
James W. Swent III, Chief Executive Officer, stated, "I am pleased
with the progress made to date by the teams of advisors as we work toward a
consensual resolution of these issues. Additionally, the bank group and
bondholder committee have indicated their support of the Company and its plan to
reduce debt through asset sales. We are encouraged by the number of inquiries
already received regarding our business assets." Mr. Swent concluded, "We remain
focused on providing our customers with the same high quality products and
service they have come to expect from us."
American Pad & Paper Co., which invented the legal pad in 1888, is a
leading manufacturer and marketer of paper-based office products in North
America. Product offerings include envelopes, writing pads, file folders,
machine papers, greeting cards and other office products. The key operating
divisions of the Company are Williamhouse, AMPAD, and Creative Card. Company
revenues in 1998 were $662 million, additional information is available on the
Company's Website at http://www.americanpad.com.
This release contains forward-looking statements relating to future
results. Actual results may differ significantly from these statements due to
risk factors including, but not limited to the following: changing business and
economic conditions; changes in customer order patterns, including loss of key
customers, order cancellations or reduced sales; price and product competition;
manufacturing risks; raw material availability and price changes; excess or
obsolete inventory; new product development, including acceptance of new
products; the loss of key personnel; and the impact on the Company's business
due to internal systems or systems of suppliers and other third parties
adversely affected by year 2000 problems. Additional information, which could
affect the Company's financial results, is included in the Company's filings
with the Securities and Exchange Commission.
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