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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 20, 1998
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CROWN ANDERSEN INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-14229 58-1653577
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(State or other jurisdic- (Commission File No.) (IRS Employer
tion of incorporation) Identification No.)
306 Dividend Drive, Peachtree City, Georgia 30269
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(Address of principal executive offices, including zip code)
(770) 486 2000
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(Registrant's telephone number, including area code)
Page 1 of 3
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Item 5. Other Events
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On April 20, 1998, a settlement agreement was finalized between Crown
Andersen Inc and the plaintiffs (Textron Investment Management Company and The
Farm Bureau Mutual Insurance Company) in a lawsuit over principal and interest
payments and legal fees for Winfield, Kansas property formerly occupied by
Struthers Thermo-Flood Corp., a former Crown Andersen subsidiary. The
settlement stops all further litigation in the case and results in Crown
Andersen taking title to the property. The settlement terms are detailed in the
exhibit referenced in Item 7.
Item 7. Financial Statements and Exhibits
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c. Exhibits
The following exhibits are filed as part of this report:
Press release dated April 21, 1998.
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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.
CROWN ANDERSEN INC.
Date: April 21, 1998 By: s/s Jack D. Brady
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Jack D. Brady
Chairman of the Board
Chief Executive Officer
President
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April 21, 1998 Press Release #090
Peachtree City, Georgia USA FOR IMMEDIATE RELEASE
CROWN ANDERSEN INC. SETTLES KANSAS PROPERTY CASE
Crown Andersen Inc., the Peachtree City, Georgia-based manufacturer of
engineered products to protect and restore the environment, announced today that
it had reached an out of court settlement with the two bondholders (and
plaintiffs in the legal case) for a 27.4 acre, 158,000 square feet industrial
facility in Winfield, Kansas, formerly occupied by Struthers Thermo-Flood Corp.,
a former Crown Andersen subsidiary. Crown Andersen agreed to pay $2,300,000 to
the bondholders, with $1,630,000 being paid immediately and $670,000 twelve
months later. Crown Andersen will receive the proceeds from two escrow accounts
totaling about $180,000, less pro-rata property taxes estimated at about $10,000
and pro-rata property insurance premiums estimated at another $10,000, leaving
about $160,000 to apply to the settlement payment. The remaining $1,470,000
will be paid out of company cash resources or its bank credit line. In exchange
for the payment, all litigation will stop, Crown Andersen will receive title to
the property, buildings and equipment, and will collect all lease payments from
occupants of the property (incoming lease payments are estimated at $120,000 per
year). Crown Andersen will then be responsible for property tax (at about
$20,000 per year) plus insurance premiums on the buildings and their contents,
and necessary maintenance of the property. The incoming lease payments
presently cover these costs, so that the transaction should have no ongoing
adverse impact on Crown Andersen's financial statements. Crown Andersen will
immediately begin negotiations to sell the property and buildings and all
contents. A recent property appraisal valued the land only at about $800,000
and Crown Andersen expects to be able to sell the entire facility with buildings
and equipment for about $1,500,000, perhaps by dividing it into two separate
parcels. When the sale is successfully arranged, the financial impact on Crown
Andersen will be a one-time loss of between $300,000 and $600,000, net of income
taxes and sales expenses. The company plans to recognize this loss in its 3rd
fiscal quarter ending June 30, 1998.
Commenting on the settlement for Crown Andersen, President Jack Brady said that
the bond payments which were in dispute, and which had not been made by the now
defunct Struthers group, totaled $1.9 million at a prevailing interest rate of
about 11%. The litigation has gone on for more than seven years and the
resultant interest in dispute thus exceeded $1.4 million. Legal costs exceeding
$300,000 have already been written off against operating profits of the Crown
Andersen divisions and there was no end in sight. Trial and appeals would have
taken another three to five years and the buildings would deteriorate in value
during that period, while interest claimed by the plaintiffs would increase.
Industrial property demand in Kansas has recently seen an upturn, and Crown
Andersen concluded it was time to settle this matter and get on with ongoing
business. Brady said "We negotiated a settlement which neither party (Crown
Andersen nor the plaintiffs) was particularly happy with, suggesting we each
went as far as we could go without continuing litigation. We believe the effect
on the 1998 Crown Andersen financial statements will be tolerable, the cash flow
implication will not adversely affect ongoing operations, and for the
shareholders it was clearly best, both economically and for market perception
reasons, to settle now rather than continue with litigation."
FOR FURTHER INFORMATION CONTACT:
MILTON EMMANUELLI, CHIEF FINANCIAL OFFICER
CROWN ANDERSEN INC., 306 DIVIDEND DRIVE, PEACHTREE CITY, GEORGIA 30269
Internet: http://www.crownandersen.com
