SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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) April 4, 1994
Lone Star Industries, Inc.
Debtor-in-Possession
(Exact name of registrant as specified in its charter)
Delaware 1-2333 13-0982660
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
300 First Stamford Place, P. O. Box 120014, Stamford, CT 06912-0014
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 969-8600
ITEM 5. OTHER EVENTS.
a) On April 4, 1994 Lone Star Industries, Inc. made public
disclosure of the following by a press release for immediate
release:
Stamford, Connecticut, April 4, 1994 --- Lone Star
Industries, Inc. (NYSE/LCE) announced today that it now
expects that its Plan of Reorganization will become
effective on April 13, 1994. Upon effectiveness, the
Company's old common stock and preferred stock will be
cancelled and the Company, through its distribution
agent, will begin to distribute cash and securities to
the holders of allowed claims and new common stock and
warrants to holders of its old equity.
The Company previously announced that there would be a
short delay on effectiveness of its Plan of
Reorganization, originally scheduled for March 29,
1994, due to additional time required for regulatory
approvals and for completion of the paperwork involved
in the documentation contemplated by its Plan of
Reorganization.
Lone Star Industries, Inc. is a leading producer of
cement, ready-mixed concrete, sand and gravel, crushed
stone, and other construction materials.
b) On April 7, 1994 Lone Star Industries, Inc. made public
disclosure of the following by a press release for immediate
release:
Stamford, Connecticut, April 7, 1994 -- Lone Star
Industries, Inc. (NYSE/LCE) announced today that the
Bankruptcy Court overseeing its reorganization
proceedings has approved a settlement of the claims of
Liberty Mutual Insurance Company. Pursuant to the
settlement, Liberty Mutual will be granted allowed
unsecured claims aggregating approximately $16.9
million. In addition, Lone Star will receive
approximately $6.6 million in cash from certain other
parties with respect to insurance premiums, which will
be added to the cash to be distributed to creditors
promptly after the Effective Date of Lone Star's
Reorganization Plan, presently scheduled for April 13,
1994.
The Company also announced today that it presently
anticipates that on the Effective Date of its Plan,
allowed unsecured claims will aggregate approximately
$538.5 million. In addition, on the Effective Date, a
reserve of approximately $44.7 million for unresolved
claims will be established. The Company presently
estimates that when all disputed claims are resolved,
the total amount of allowed unsecured claims should not
exceed approximately $576.1 million plus $2.2 million
of allowed cash convenience claims. The increase in
the total unsecured claims from the $571.5 million
estimate in the Company's Disclosure Statement largely
relates to the settlement with Liberty Mutual described
above and is compensated for by the approximately $6.6
million in cash to be received with respect to
insurance premiums from other parties for distribution
to unsecured creditors.
A total of approximately $192.3 million in cash is
expected to be distributed to unsecured creditors
(other than convenience creditors) along with $78
million of senior notes of reorganized Lone Star, $138
million of secured notes of the liquidating corporation
(to be paid out of the proceeds from the sale of assets
transferred to the liquidating corporation), and
approximately 85% of the common equity of reorganized
Lone Star. In addition, allowed unsecured convenience
claims of $5,000 or less will receive 100% of their
claim in cash.
Pursuant to the Company's Reorganization Plan, holders
of Lone Star preferred stock would receive their pro
rata share of 10.5% of the common equity of reorganized
Lone Star and 1.25 million warrants to purchase common
stock in the reorganized Lone Star. The present
holders of common stock of Lone Star would receive the
balance of the reorganized Company's common equity and
2.8 million warrants to purchase common stock in the
reorganized Lone Star. The warrants to be issued to
the preferred and common shareholders would be
exercisable through December 31, 2000 and would provide
for the purchase of shares of the common stock of
reorganized Lone Star at a price of $18.75 a share.
Lone Star Industries, Inc. is a producer of cement,
ready-mixed concrete, sand and gravel, crushed stone,
and other construction materials.
c) On April 8, 1994 Lone Star Industries, Inc. made public
disclosure of the following by a press release for immediate
release:
Stamford, Connecticut, April 8, 1994 --- Lone Star
Industries, Inc. (NYSE/LCE) announced today that a
three judge panel of the United States Court of Appeals
for the Fourth Circuit had vacated a December 1992
judgement in the case brought by Lone Star and certain
of its subsidiaries against Lafarge Corporation and
Lafarge Canada, Inc., seeking damages on account of the
sale by a subsidiary of Lafarge Canada of allegedly
defective cement to a Lone Star subsidiary which had
used the cement to manufacture concrete crossties. The
case against Lafarge had been brought as a result of
damage actions brought against Lone Star by a number of
railroads complaining that concrete crossties sold to
them were defective. The railroads' actions were
settled before trial by Lone Star for approximately $66
million.
The case against Lafarge involved Lone Star's claim for
reimbursement for those damages, its costs in the
railroad actions and lost profits because of the damage
to its crosstie business caused by the defective
crossties.
After a trial in the United States District Court in
Baltimore, a jury found Lone Star was entitled to
recovery from Lafarge on its claims of fraudulent
misrepresentation, breach of express warranty, breach
of warranty of fitness for a particular purpose and
negligence, and awarded Lone Star $1,213,000 damages
for its direct lost profits. As to Lone Star's claim
for that portion of its damages growing out of the
settlements with the railroads and its cost of
litigation, the jury found that Lone Star was not
entitled to be indemnified for such matters by Lafarge.
Lone Star appealed the denial of its full damages.
The Fourth Circuit decision vacated the judgement in
the District Court on the grounds that the jury should
have been allowed to consider awarding full damages to
Lone Star on a basis other than indemnification and
remanded the case to the District Court for retrial.
In addition, the Appeals Court held that Lone Star
should be allowed to amend its complaint against
Lafarge to include a claim under Massachusetts law
which, among other things, could result in the doubling
or trebling of any damages due it from Lafarge.
Lone Star said it was pleased with the Circuit Court's
ruling and expected that as a result it would obtain
significant damages from Lafarge.
Lone Star Industries, Inc. is a producer of cement,
ready-mixed concrete, sand and gravel, crushed stone,
and other construction materials.
d) On April 14, 1994 Lone Star Industries, Inc. made public
disclosure of the following by a press release for immediate
release:
Stamford, Connecticut, April 14, 1994 --- Lone Star
Industries, Inc. (NYSE/LCE) announced that the
Effective Date of the Company's Plan of Reorganization
originally scheduled for April 13 had occurred today.
The one day delay was required to complete the
paperwork and documentation required by the Plan of
Reorganization. As a result, the Company's old common
stock and preferred stock will be cancelled and the
books of the transfer agent will be closed at the end
of business today. As soon as practicable, the
Company, through its distribution agent, will begin to
distribute cash and securities to the holders of
allowed claims and new common stock and warrants to the
holders of its old equity.
Allowed unsecured claims now total $538.5 million. In
addition, a reserve of $42.7 million for disputed
claims has been established. The Company now estimates
that when all disputed claims are resolved, the total
amount of allowed unsecured claims should not exceed
approximately $575.8 million plus $2.2 million of
allowed cash convenience claims (claims of $5,000 or
less which are being paid in cash).
A total of $190.7 million in cash will be distributed
to unsecured creditors (other than holders of
convenience claims) along with $78 million of ten year
10% senior notes of reorganized Lone Star, $138 million
of 10% secured asset proceed notes maturing on July 31,
1997 of a liquidating corporation set up by Lone Star
to hold assets which are being sold, and 85% of the
common equity of reorganized Lone Star.
The holders of Lone Star preferred stock will receive
their pro rata share of 10.5% of the common equity of
reorganized Lone Star and 1.25 million of seven year
warrants to purchase common stock in the reorganized
Lone Star. The present holders of common stock of Lone
Star will receive the balance of the reorganized
Company's common equity and 2.8 million of the warrants
to purchase common stock in the reorganized Lone Star.
The warrants to be issued to the preferred and common
shareholders will be exercisable through December 31,
2000 and will provide for the purchase of shares of the
common stock of reorganized Lone Star at a price of
$18.75 a share.
It is expected that tomorrow, April 15, the new common
stock warrants and 10% Senior Notes will begin trading
on the New York Stock Exchange on a "when issued"
basis. The symbol for Lone Star Industries, Inc. will
continue to be LCE. The "when issued" trading symbols
for the new securities will be: common stock - LCE WI;
common stock warrants - LCE WS WI; and 10% Senior Notes
- LCE 03 WI.
A company spokesperson said that the reorganized Lone
Star will be a smaller, more efficient domestic cement,
aggregates and concrete company, operating with a
manageable capital structure, and capable of competing
effectively in the construction markets served by the
Company.
Lone Star Industries, Inc. is a producer of cement,
ready-mixed concrete, sand and gravel, crushed stone,
and other construction materials.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, Lone Star Industries, Inc. has duly caused this report
to be signed on its behalf by the undersigned hereunto duly
authorized.
LONE STAR INDUSTRIES, INC.
Debtor-in-Possession
By: /s/ John S. Johnson
John S. Johnson
Vice President
Date: April 18, 1994
