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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):
January 18, 2000 (January 14, 2000)
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.
On January 14, 2000, American Pad & Paper Company (OTCBB:AMPP) (AP&P)
announced today that it has filed a petition in the United States Bankruptcy
Court in Delaware to convert the involuntary Chapter 11 petition filed by its
bondholders on January 10, 2000, to a voluntary Chapter 11 proceeding under the
Federal Bankruptcy Code. AP&P is seeking protection under Chapter 11 to ensure
that day-to-day operations continue normally. To ensure liquidity throughout
this period, AP&P has received a commitment for $65 million of
debtor-in-possession (DIP) financing from a group of its current bank lenders.
This press release is incorporated herein as Exhibit 99.036
On January 18, 2000, American Pad & Paper Company (OTCBB:AMPP) (AP&P)
announced the resignation of James V. Heim, President of its AMPAD Division. Mr.
Heim has resigned to assume the role of Chief Executive Officer of an internet
based company outside the office products industry. James W. Swent III, Chief
Executive Officer of American Pad & Paper will assume the role of acting
president of the AMPAD division. Mr. Heim joined American Pad & Paper in
December 1998 from American Safety Razor.
Exhibit
99.36 Press release by the Company dated January 14, 2000.
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
January 16, 2000 /s/ David N. Pilotte
Date David N. Pilotte
Vice President and Corporate Controller
Principal Accounting Officer
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Exhibit 99.036
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News Release
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For Immediate release CONTACT: Mark Lipscomb
(972) 733-5415
AMERICAN PAD & PAPER FILES FOR PROTECTION UNDER CHAPTER 11
$65 MILLION OF DIP FINANCING COMMITTED
Dallas, January 14, 2000 - American Pad & Paper Company
(OTCBB:AMPP) (AP&P) announced today that it has filed a petition in the United
States Bankruptcy Court in Delaware to convert the involuntary Chapter 11
petition filed by its bondholders on January 10, 2000 to a voluntary Chapter 11
proceeding under the Federal Bankruptcy Code. AP&P is seeking protection under
Chapter 11 to ensure that day-to-day operations continue normally. The Company
plans to pursue various strategic and financial alternatives, including asset
sales and restructuring the Company's debt. As previously announced, the Company
has retained Lazard Freres & Co. LLC as advisors to assist it in this process.
To ensure liquidity throughout this period, AP&P has received a
commitment for $65 million of debtor-in-possession (DIP) financing from a group
of its current bank lenders. This commitment of DIP financing exhibits the
continuing support of the Company's existing bank group. The Company expects the
DIP financing to be approved by the court at a hearing early next week. Funds
will then be available to the Company to fulfill future obligations associated
with operating its business during the bankruptcy.
AP&P said that the Chapter 11 filing should have little impact on
customers and employees. The Company has sought and expects to receive the
Court's approval to continue payment of employee salaries, wages and benefits
without interruption. The DIP financing will enable the Company to pay for the
delivery of goods and services and continue to build inventory necessary to meet
customer requirements.
"Our focus throughout this process has been to try to maximize value
for all of the Company's stakeholders," stated James W. Swent III, Chief
Executive Officer. "While we initially felt that progress was being made in the
negotiations with the bank group and bondholders, unfortunately these
discussions did not yield a consensual solution. After exploring all available
alternatives, we believe that converting the bondholders' involuntary Chapter 11
petition to a voluntary Chapter 11 proceeding presents the most effective means
to restructure our debt while safeguarding the interests of all involved. The
DIP financing agreement will provide liquidity for our daily operations during
the reorganization period and will help to ensure that our customers continue to
receive the products and level of service they have come to expect from AP&P."
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"During the past year, the AP&P team has made good progress in our
turnaround initiatives, but our revenue levels have not been sufficient to
service our current debt structure," said Mr. Swent. "Our primary suppliers, the
paper mills, have continued to provide a high level of support and remain key
business partners. We look forward to the continued support of all our
stakeholders as we move through this process."
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; the loss of key personnel and new product development,
including acceptance of new products. 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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