SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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) - March 31, 1997
REUNITED HOLDINGS, INC.
(Exact Name of Registrant as Specified in Charter)
Rhode Island 0-15238 05-0301429
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
Two Executive Drive, Fort Lee, NJ 07024-3308
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code 201-585-2100
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Item 5. Other Events.
As previously reported, the Registrant and its parent company, United
Merchants and Manufacturers, Inc., each filed petitions for reorganization
relief under Chapter 11 of the United States Bankruptcy Code on February
22, 1996.
Registrant and its parent company requested that the Securities and
Exchange Commission allow them to follow a modified reporting procedure in
lieu of the periodic reports required under the Securities Exchange Act of
1934, as amended. The Commission granted the Registrants' request.
Therefore, the Registrants will file, under cover of Form 8-K, the
financial reports and schedules that are filed with the Bankruptcy Court.
Included herewith, Registrant is filing the cover letter, certificate and
verified financial statements/operating reports for the month ended March
31, 1997 as filed with the Bankruptcy Court.
SIGNATURES
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.
Reunited Holdings, Inc.
(formerly Victoria Creations, Inc.)
Date: May 2, 1997 By /s/ Norman R. Forson
Norman R. Forson
Senior Vice President
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UNITED MERCHANTS AND MANUFACTURERS, INC., D.I.P.
REUNITED HOLDINGS, INC., D.I.P.
Two Executive Drive, Suite 780
Fort Lee NJ 07024
201-585-2100
May 2, 1997
United States Bankruptcy Court
Southern District of New York
Attn: Office of the Clerk
Alexander Hamilton Customs House
One Bowling Green
New York NY 10004-1408
In re: United Merchants and Manufacturers, Inc. and Reunited Holdings,
Inc. (formerly Victoria Creations, Inc.), Debtors, Jointly
Administered Chapter 11 Case No. 96 B 40941 (AJG)
Enclosed herewith is a copy of the verified financial statements/operating
reports for the month of March 1997.
Also enclosed is a schedule of and receipts for Federal, state, and local
taxes withheld and paid for the month.
The companies do not make sales subject to sales tax.
All property taxes due and payable have been paid.
All insurance policies, including for workers compensation and disability,
have been paid for the current period.
UNITED MERCHANTS AND MANUFACTURERS, INC., D.I.P.
VICTORIA CREATIONS, INC., D.I.P.
by Norman R. Forson, Senior Vice President
cc: U.S. Department of Justice
Office of the United States Trustee
Southern District of New York
Attn: Goodwin Benjamin, Esquire
80 Broad Street, 3rd Floor
New York NY 10004
Zalkin, Rodin & Goodman LLP
Attn: Andrew D. Gottfried, Esquire
750 Third Avenue
New York NY 10017
Skadden, Arps, Slate, Meagher & Flom
Attn: Michael L. Cook, Esquire
919 Third Avenue
New York NY 10022-3897
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
in re
CASE NO. 96 B 40941 (AJG)
CHAPTER 11
UNITED MERCHANTS AND MANUFACTURERS, INC. AND
REUNITED HOLDINGS, INC. (formerly VICTORIA CREATIONS, INC.), Debtors
MONTHLY OPERATING STATEMENT FOR
THE MONTH OF MARCH 1997
DEBTORS' ADDRESS:
2 Executive Drive, Suite 780
Fort Lee NJ 07024
Monthly Disbursements - see Statement of
Cash Flows
DEBTORS' ATTORNEY:
Michael L. Cook (MC 7887)
Lawrence V. Gelber (L 9384)
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York NY 10022-3897
Monthly Operating Profit - see Statement of
Operations
REPORT PREPARER:
Norman R. Forson, Senior Vice President
This operating statement must be signed by a representative of the
Debtor.
The undersigned, having reviewed the attached report and being
familiar with the Debtors' financial affairs, verifies under penalty of
perjury, that the information contained therein is complete, accurate and
truthful to the best of my knowledge.
Date: MaY 2, 1997 /s/ Norman R. Forson, Sr. V.P.
Signature and Title
Indicate if this is an amended statement by checking here.
AMENDED STATEMENT [ ]
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REUNITED HOLDINGS, INC., D.I.P.
(formerly Victoria Creations, Inc.)
FINANCIAL STATEMENTS
INDEX
Page
Number
Statement of Operations................................... 2
Balance Sheet ............................................ 3
Statement of Cash Flows................................... 4
Notes to Financial Statements ............................ 5
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REUNITED HOLDINGS, INC., D.I.P.
(formerly Victoria Creations, Inc.)
Statement of Operations (000 omitted)
MONTH OF
MARCH
1997
---------
Revenues............................................ $15
Selling, general and administrative expenses........ (24)
---------
Operating Income (Loss) ($9)
Other income (expenses):
Interest income.................................... 7
---------
Earnings (Loss) before Reorganization Expenses ($2)
Reorganization expenses:
Management services by Parent Company.............. (65)
Legal and other expenses........................... (80)
Transfer of accrued reorganization
expenses from Parent Company...................... (300)
---------
Net Earnings (Loss) ($447)
=========
Average common shares outstanding................... 7,800
Net earnings (loss) per share....................... ($0.06)
See notes to financial statements.
2
REUNITED HOLDINGS, INC., D.I.P.
(formerly Victoria Creations, Inc.)
Balance Sheet (000 omitted)
MARCH 31
1997
---------
ASSETS
Current Assets:
Cash............................................... $1,738
Receivables........................................ 83
---------
Total Assets $1,821
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable................................... $97
Accrued expenses and other liabilities............. 1,231
---------
Total Current Liablilties $1,328
Liabilities subject to compromise:
Accounts payable................................... $3,594
Accrued expenses................................... 239
Due to Parent Company.............................. 15,331
---------
Total Liabilities Subject to Compromise $19,164
Stockholders' Equity:
Common stock, $0.01 par value,
authorized 10 million shares,
outstanding 7.8 million shares.................... $58
Additional paid-in capital......................... 32,998
Retained earnings (deficit)........................ (51,727)
---------
Total Stockholders' Equity (Deficit) ($18,671)
---------
Total Liabilities and Equity $1,821
=========
See notes to financial statements.
3
REUNITED HOLDINGS, INC., D.I.P.
(formerly Victoria Creations, Inc.)
Statement of Cash Flows (000 omitted)
MONTH OF
MARCH
1997
---------
Cash Flows from Operating Activities:
Net earnings (loss)............................... ($447)
Add back item not requiring cash in current
period - Transfer of accrued reorganization
expenses from Parent Company..................... 300
Decrease (increase) in assets:
Accounts receivable............................. 14
Increase (decrease) in current liabilities:
Accounts payable................................ 20
Accrued expenses and other liabilities.......... 24
---------
Net Cash Provided (Used) by Operating Activities ($89)
Cash Flows from Investing Activities................ 0
Cash Flows from Financing Activities................ 0
---------
Net Increase (Decrease) in Cash ($89)
Cash at beginning of period......................... 1,827
---------
Cash at End of Period $1,738
=========
----------
Supplemental disclosure:
Cash payments for:
Interest........................................ $0
Income taxes.................................... 0
See notes to financial statements.
4
REUNITED HOLDINGS, INC. (formerly Victoria Creations, Inc.), D.I.P.
Notes to Financial Statements
Note A - Basis of Presentation
The accompanying financial statements of Reunited Holdings, Inc. (formerly
Victoria Creations, Inc.) ("Company") are unaudited, are as of and for the
month ended March 31, 1997 and have been prepared in accordance with
generally accepted accounting principles for interim financial
information. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. The results of operations of
any interim period are subject to year-end audit and adjustments, and are
not necessarily indicative of the results of operations for the fiscal
year. For further information, refer to the financial statements and
footnotes thereto included in the Company's verified financial
statements/operating reports for the year ended June 30, 1996 filed with
the United States Bankruptcy Court, Southern District of New York, New
York NY.
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles applicable to a going
concern which contemplate the realization of assets and the liquidation of
liabilities in the normal course of business. In the event that a plan of
reorganization (see Note B below) is not consummated or is consummated on
a different basis, certain adjustments may be required to the stated
amounts and classification of assets and liabilities. See Note E below.
The Company is an 80%-owned subsidiary of United Merchants and
Manufacturers, Inc. (UM&M or Parent Company). UM&M is a publicly-held
company.
During the month of March 1997, the Parent Company transferred to the
Company additional liability for reorganization expenses of the jointly
administered bankruptcy cases. These expenses had been accrued previously
by the Parent Company. The transfer is shown by the Company as an expense
in March 1997.
Note B - Petition for Reorganization under Chapter 11
On February 22, 1996, the Company and its Parent Company filed petitions
for reorganization relief under Chapter 11 of the Bankruptcy Code in the
United States Court for the Southern District of New York.
Pursuant to the Bankruptcy Code, the Company is continuing to operate its
business as debtor-in-possession while the reorganization case is
pending. The Company is allowed to use, and is using, its cash and other
resources at the operating level in the ordinary course of business.
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Under Chapter 11, the presentation and collection of certain prepetition
claims against the Company are stayed. These claims are reflected in the
balance sheet as "Liabilities Subject to Compromise". Liabilities subject
to compromise are stated at the Company's carrying value and not at the
amounts for which the claims may be settled. The statement of cash flows
reflects changes in applicable liabilities before the reclassification of
such amounts to Liabilities Subject to Compromise.
Additional claims (liabilities subject to compromise) may arise resulting
from rejection of executory contracts, including leases, and may be
determined by the court (or agreed to by the parties in interest) for
contingencies and other disputed amounts.
On February 26, 1997, the Company and its Parent Company each filed
amended and restated reorganization plans dated as of February 25, 1997
with the United States Bankruptcy Court for the Southern District of New
York ("Bankruptcy Court"). The plans set forth how claims against and
interests in the companies will be treated following the companies'
emergence from Chapter 11. The plans are based on the conclusion that
recovery to creditors will be maximized by the companies' continued
operations as going concerns under terms of the plans. Disclosure
statements describing certain aspects of the plans, the companies'
businesses, significant events occurring in the Chapter 11 cases and
related matters were approved by the Bankruptcy Court. The disclosure
statements were mailed to persons holding claims or interests in the
companies, along with ballots, as applicable, soliciting votes for
accepting or rejecting the reorganization plans. The votes were to be
received by the voting agent by March 31, 1997.
Under the Company's plan, claims and interests in the Company are divided
into classes. If the plan is approved by the holders of the claims
authorized to vote and by the Bankruptcy Court, certain unclassified
claims, including administrative claims and priority tax claims, and
certain other priority claims, will receive payment in cash either on the
consummation date or in installments over time or such other treatment as
is agreed upon with the holders of such claims. All other claims and all
interests are classified into classes and will receive distributions and
recoveries, if any, as follows:
Class 1 - Other Priority Claim - the Pension Benefit Guaranty
Corporation ("PBGC"), which took over the parent company's pension
plan, filed a claim against the Parent Company for the underfunding
of the plan and took the position that the Company was a guarantor of
the liability, if any. In settlement, the PBGC will receive a note
from the Parent Company in the principal amount of $17.2 million,
payable from future earnings of the Parent Company, and a cash
payment of $400,000 from the Company.
Class 3 - General Unsecured Claims - Holders of general unsecured
claims will receive a pro rata share of certain cash designated for
payment of such claims and principal amount of a new debenture, the
total of which will equal the holder's claim.
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Class 4 - Subordinated Claim - The parent company is the holder of
this claim. The Parent Company will contribute $5.0 million of this
claim to the paid-in surplus of the Company. The Parent Company will
then receive a pro rata share of the cash mentioned in class 3 above
and principal amount of the new debentures mentioned in class 3
above, the total of which will equal the Parent Company's adjusted
claim. The Parent Company will use the cash received to purchase at
par value, on a pro rata basis, the new debentures issued to certain
holders of class 3 claims.
Class 5 - Common Stock Interests - Holders of the Company's common
stock interests shall retain such interests which shall become the
common stock interests in the reorganized Company.
The above is a summary of the plan and is qualified in its entirety by
reference to the provisions of the plan.
Note C - Income Taxes
The Company has net operating loss carryforwards to offset earnings.
Note D - Sale of Assets
As reported in the Company's financial statements as of and for the year
ended June 30, 1996 and the month ended July 31, 1996, under order of the
Bankruptcy Court, effective July 1, 1996, the Company sold most of its
operating assets as a "going concern" for proceeds of approximately $5.5
million in cash and the assumption by the buyer of $19.55 million of the
Company's liability to its senior secured lender. The Company
simultaneously used a portion of the cash proceeds to payoff the balance
owed to the senior secured lender. The sale resulted in a non-cash loss
of approximately $24.2 million. Subsequent to the sale, the Company
continues to own and operate a design studio providing design services for
the high-quality-costume-jewelry and fashion-jewelry industries.
Note E - Subsequent Event
As mentioned in Note B above, the Company and its parent company each
filed an Amended and Restated Reorganization Plan with the Court dated
February 25, 1997. After the solicitation procedures set forth by the
Court were completed, a confirmation hearing was held on April 9, 1997.
At the conclusion of the hearing, the Amended and Restated Reorganization
Plan of the Company (and of its parent company) was confirmed by the Court.
The Company filed a Current Report on Form 8-K with the Securities and
Exchange Commission on April 24, 1997 which included Exhibits, included
herein by reference, as follows:
Amended and Restated Reorganization Plan of Reunited Holdings, Inc.
(formerly Victoria Creations, Inc.), dated February 25, 1997
Findings of Fact, Conclusion of Law, and Order under 11 U.S.C.
Sections 1129(a) and (b) and Fed. R. Bankr. P. 3020 Confirming
Amended and Restated Reorganization Plan of Reunited Holdings, Inc.
(Formerly Victoria Creations, Inc.) Dated February 25, 1997, dated
April 10, 1997
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The following pro forma balance sheet of the Company reflects certain
adjustments which will result from the implementation of the Plan of
Reorganization as if the Plan had been implemented on March 31, 1997. The
adjustment amounts are based on the best information available to the
Company as of this date and are subject to change.
Pro Forma Balance Sheet as of March 31, 1997
(000 omitted)
------------------------------------
ASSETS: BEFORE
ADJUSTMENT ADJUSTMENTS ADJUSTED
---------- ----------- --------
Cash............................... $ 1,738 $ (1,100) A
(400) C
(25) D
(188) E $ 25
Receivables........................ 83 83
--------- -------- --------
$ 1,821 $ (1,713) $ 108
========= ======== ========
LIABILITIES AND EQUITY:
Accounts payable................... $ 3,691 $ (3,600) E $ 91
Accrued expenses................... 1,470 (1,100) A
267 B
(480) E 157
Due to Parent Company.............. 15,331 (10,331) E
(5,000) F 0
3.5% Notes payable:
To Parent Company - Principal..... 10,331 E
less discount.................. (3,845) 6,486
Other - Principal................. 3,892 E
less discount.................. (1,449) 2,443
Equity............................. (18,671) (267) B
(Note - The 7.8 million shares of (400) C
Common Stock previously outstanding (25) D
continue. See note B above) 5,294 E
5,000 F (9,069)
--------- -------- --------
$ 1,821 $ (1,713) $ 108
========= ======== ========
- ------------
A - Payment of administrative expenses
B - Accrue liability
C - Payment of settlement with PBGC
D - Payment of settlement with former lender
E - Cash payments and issuance of notes to creditors and Parent Company
F - Contribution of capital from Parent Company
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