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):
April 15, 1997
Pathe Communications Corporation
Delaware 0-12252 13-2624802
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
c/o The Law Offices of Fredric S. Newman
10 East 40th Street, New York, NY 10016
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(212) 689-8808
<PAGE>
Item 5. Other Events.
On April 15, 1997, Pathe Communications Corporation (the "Company")
failed to pay the installments of interest and make certain required
sinking fund payments (the "Required Payments") due and payable on April
15, 1997, on (i) the 8 7/8% Convertible Senior Subordinated Debentures due
April 15, 2001 issued pursuant to the Indenture dated as of April 15, 1986
between The Cannon Group, Inc. and Manufacturers Hanover Trust Company of
California as Trustee (the "Trustee"), (ii) the 12 7/8% Senior Subordinated
Debentures due April 15, 2001 issued pursuant to the Indenture dated as of
April 15, 1986 between The Cannon Group, Inc. and the Trustee and (iii) the
12 7/8% Senior Subordinated Debentures due April 15, 2001 issued pursuant
to the Indenture dated as of April 15, 1986 between Pathe Communications
and the Trustee (each an "Indenture" and collectively the "Indentures").
As of April 15, 1997, $254,393 was due and payable pursuant to the
Indentures to debenture holders other than CLBN (as defined below) and not
paid. As of such date, the Company had less than $5,000 in cash. On April
18, the Company received a default notice from the Trustee, a copy of which
is attached as Exhibit 99 and is incorporated herein by reference.
The Company has no operating assets or sources of income and
insufficient cash on hand to meet operating expenses or make the Required
Payments. The Company is party to a credit facility with Generale Bank
Nederland N.V. ("GBNL"), f/k/a Credit Lyonnais Bank Nederland N.V.
("CLBN"), under which the Company has in the past borrowed funds from CLBN
to meet operating expenses and previous Required Payments. The last such
borrowing was in November of 1994. All of the Company's bank indebtedness
is currently due and payable. As of March 31, 1997, approximately $37.2
million in principal and interest was outstanding under such credit
facility. In addition to the above referenced indebtedness, the Company's
other indebtedness to CBLN includes matured subordinated debt and deferred
interest in the amount of approximately $29 million. The aggregate
indebtedness of the Company to CLBN is approximately $66 million.
The Company has sought funding to pay the Required Payments. It has
not received any response, but the Company has no reason to believe funding
will be forthcoming.
Additionally, the Company is currently in default on a loan of
$150,000,000 borrowed from Sealion Corporation N.V. ("Sealion"), a company
affiliated with SASEA Holding S.A. ("SASEA") and with prior management of
the Company, the proceeds of which were lent to Melia International N.V.
("Melia"), the major stockholder of the Company at the time. Sealion has
assigned, as collateral security, its receivable from the Company to Credit
Lyonnais S.A., which has transferred the same to Consortium de Realisation.
The Company's obligations under the Sealion loan are guaranteed by Melia,
which guarantee is collateralized by approximately 51% of the Company's
outstanding stock. The Sealion loan obligation, which has been due and
payable as to principal since 1992, bears interest at two percentage points
above LIBOR.
<PAGE>
Item 7. Financial Statements and Exhibits
(a) None.
(b) None.
(c) Exhibits.
99 Text of Notice of Default dated April 18, 1997, issued by
the Trustee.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrants have duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
PATHE COMMUNICATIONS CORPORATION
Date: May 1, 1997 By: /s/ Fredric S. Newman
<PAGE>
EXHIBIT INDEX
Exhibit 99 Text of Notice of Default dated April 18, 1997, issued by
the Trustee.
<PAGE>
Exhibit 99
TO THE HOLDERS OF
Pathe Communications Corporation
(formerly The Cannon Group, Inc.)
Pathe Communications 12 7/8% Senior Subordinated Debentures due April 15,
2001
CUSIP #703193AA 0*
Cannon Group, Inc. 12 7/8% Senior Subordinated Debentures due April 15,
2001
CUSIP #137726 AE 5*
Cannon Group, Inc. 8 7/8% Convertible Senior Subordinated Debentures
due April 15, 2001
CUSIP #137726 AF 2*
(collectively the "Debentures")
* No representations are made as to the correctness of these CUSIP numbers
either as printed on the Debentures or as contained in this Notice.
NOTICE OF NON-PAYMENT OF INTEREST
Except as otherwise expressly provided, all terms used herein which
are defined in the Indentures, pursuant to which the Debentures were
issued, shall have the meaning assigned to them in the Indentures. On
April 1, 1997 Chemical Trust Company of California (formerly Manufacturers
Hanover Trust Company of California), officially became known as Chase
Trust Company of California.
We are the Trustee (the "Trustee") under the Indentures, each dated as
of April 15, 1986 (the "Indenture"). On April 15, 1997, Pathe
Communications Corporation (the "Company") failed to pay the installment of
interest due and payable on that date with respect to the above referenced
Debentures.
Section 6.01(1) of each Indenture provides that if the Company fails
to pay the April 15, 1997 interest installment within the 30 day grace
period, an "Event of Default" will then have occurred. The thirty day
grace period ends on May 15, 1997; if interest has not been paid on or
before that date an "Event of Default" will have occurred.
Section 6.02 of each Indenture provides that if an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the outstanding Debentures by notice to the Company and
the Trustee, may declare the principal of and the accrued interest on all
the Debentures to be due and payable immediately. Upon such declaration
such principal and interest shall be due and payable immediately.
A declaration by us as Trustee, or by the Holders of at least 25% in
aggregate principal amount of the outstanding Debentures, that the
principal of and the accrued interest on all the Debentures is due and
payable immediately, may result in the Company or one or more of its
creditors seeking relief under one or more provisions of the Bankruptcy
Code. Of paramount concern to us as Trustee is determining whether a
declaration on May 15, 1997 that the principal of and accrued interest on
<PAGE>
all the Debentures is immediately due and payable, with its attendant
serious consequences, would be in the best interests of the Holders.
A copy of the Indentures may be examined at our 101 California Street,
Suite #2725, San Francisco, CA 94111 offices during normal business hours
by Holders. In this regard, we call your attention to the rights of the
Holders of a majority in principal amount of the outstanding Debentures
have pursuant to Section 6.05 of each Indenture:
The Holders of a majority in principal amount of the outstanding
Debentures may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any
trust or power conferred on it. The Trustee, however, may refuse to
follow any direction that conflicts with law or this Indenture, that
is unduly prejudicial to the rights of another Debentureholder, that
would involve the Trustee in personal liability, or if the Trustee
does not have sufficient indemnifications against any loss or expense.
Note that the total principal amount outstanding for the Debentures are as
follows:
Pathe Communications 12 7/8% Senior Subordinated Debentures due April 15,
2001
CUSIP: #703193 AA 0 Outstanding: $13,739,000
Cannon Group, Inc. 12 7/8% Senior Subordinated Debentures due April 15,
2001
CUSIP: #137726 AE 5 Outstanding: $16,089,000
Cannon Group, Inc. 8 7/8% Convertible Senior Subordinated Debentures due
April 15, 2001
CUSIP: #137726 AF 2 Outstanding: $3,761,000
We will continue to inform you of any significant developments in this
matter.
To allow mailing future communications directly to you as a Holder, please
follow the following instructions:
1. If you are a beneficial Holder of the Debentures (i.e.: the
Debentures are registered in the name of a broker or bank) we
request that you complete and return the enclosed form.
2. If you are already a registered Holder (i.e.: the Debentures are
registered in your name and you have a physical certificate), no
action is necessary on your part as we already have your name and
address on record. Only if you wish to have your notices
redirected to a different name or address do we request that you
complete and return the enclosed form.
Dated as of April 18, 1997 Chase Trust Company of California,
as Trustee
<PAGE>
Chase Trust Company of California, as Trustee, under the Indentures of
Pathe Communications Corporation (formerly, The Cannon Group, Inc.), each
dated as of April 15, 1986
101 California Street, Suite #2725
San Francisco, California 94111
Attn: Corporate Trust Administration
I hereby certify that I, ______________________
(Name of Beneficial Owner)
______________________
(Address)
______________________
______________________
______________________
(Daytime telephone number)
am the beneficial owner of the Pathe Communication Corporation securities
listed below:
Security: Aggregate Principal Amount Held:
Pathe Communications 12 7/8% Senior
Subordinated Debentures due April 15,
2001 CUSIP: #703193 AA 0: $_______________
Cannon Group, Inc. 12 7/8% Senior
Subordinated Debentures due April 15,
2001 CUSIP: #137726 AE 5: $_______________
Cannon Group, Inc. 8 7/8% Convertible
Senior Subordinated Debentures due
April 15, 2001 CUSIP: #137726 AF 2: $_______________
which are registered in the name of:
(Name of Registered Holder) (Address)
______________________________ _______________
_______________
and request that you send copies of notices sent to the registered holders
of the Debentures to me at my address above.
Signed: _______________________
Beneficial Owner
Date:____________
