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) February 12, 1999
WorldCorp, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 1-5351 94-3040585
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
13873 Park Center Road, Suite 490 Herndon, Virginia 20171
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (703) 834-9223
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
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Item 3. Bankruptcy or Receivership
On February 12, 1999, WorldCorp, Inc. ("WorldCorp") filed a voluntary
petition for relief under Chapter 11, Title 11, of the United States Bankruptcy
Code (the "Bankruptcy Code") with the United States Bankruptcy Court for the
District of Delaware, Case No. 99-298 (MFW) (the "Bankruptcy Court"). WorldCorp
also filed its Disclosure Statement and Proposed Plan of Reorganization (the
"Plan") with the Bankruptcy Court on February 12, 1999. WorldCorp is operating
its business as debtor-in-possession under the Bankruptcy Code.
As of November 30, 1998, WorldCorp had essentially no cash or cash
equivalents and had outstanding debt in excess of $75 million. The holder of the
majority of the $5.0 million outstanding principal amount on the 10.0% senior
subordinated notes due September 30, 2000 ("Senior Subordinated Notes")
contended that the entire amount outstanding was due and payable as a result of
alleged covenant defaults. WorldCorp also had failed to make interest payments
due May 15, 1998 and November 15, 1998 on its 7.0% convertible subordinated
debentures due 2004 issued pursuant to Indenture dated as of May 15, 1992,
between WorldCorp and State Street Bank and Trust Company, as trustee (the
"Debentures"), and to repay approximately $1.3 million owed to World Airways
Inc. under the terms of a secured intercompany loan (the "Airways Loan").
In summary, the Plan provides for:
o the repayment in full in cash of WorldCorp's administrative
and priority claims, administrative convenience claims,
secured debt (including the Airways Loan) and the Senior
Subordinated Notes;
o the restructuring of the Debentures and general unsecured debt
by the issuance of modified Debentures, accrued interest
notes, warrants to purchase 45% of the stock of WorldCorp
Acquisition Corp. ("Acquisition") and warrants to purchase 40%
of the pro forma outstanding stock of WorldCorp (together, the
"Warrants");
o the restructuring of indebtedness of WorldCorp and its 80%
owned subsidiary, Acquisition, to the former stockholders of
The Atlas Companies, Inc., which was formerly known as Paper
Acquisition Corp. ("Atlas"), incurred in connection with the
acquisition of Atlas by Acquisition in 1998; and
o the retention by WorldCorp shareholders of their shares of
common stock of WorldCorp.
Cash payments due under the Plan are to be funded from the proceeds of
a loan from Rothschild Recovery Fund L.P. ("RRF"), the holder of the largest
amount of WorldCorp's Debentures, to Acquisition, which will upstream funds to
WorldCorp through the purchase of InteliData Technologies Corporation
("InteliData") common stock from WorldCorp. Holders of the Debentures and
general unsecured creditors will be offered the right to participate in the
making of such loan.
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Payments due on the RRF loan and other obligations of WorldCorp and
Acquisition after emergence from bankruptcy are to be made out of monies
received from Atlas and its subsidiaries pursuant to an intercompany tax sharing
agreement, and if necessary from the proceeds of sale of InteliData common
stock. In the event the stockholders of Atlas and holders of WorldCorp
Debentures and general unsecured claims exercise the Warrants granted to them
under the Plan for the 80% of the stock of Acquisition owned by WorldCorp,
WorldCorp would no longer have an interest in Acquisition or its subsidiaries,
but would receive payments totaling at least 125% of the appraised fair market
value of the shares of Acquisition as of the Effective Date of the Plan and
would retain those shares of InteliData that are not sold to Acquisition on the
Effective Date (subject to the pledge thereof to secure the RRF loan and certain
other indebtedness of Acquisition).
The Plan was negotiated prior to the Petition Date by WorldCorp,
Acquisition, RRF and Sun Paper Advisors, Inc. as representative of the former
Atlas stockholders.
The Debtor filed several motions on the first day of the Case seeking
the relief provided by so-called "first day orders." First day orders are
intended to ensure a seamless transition between a debtor's prepetition and
postpetition business operations by approving certain regular business conduct
that may not be authorized specifically under the Bankruptcy Code.
The first day motions and orders in this Case provided for, among other
things:
o establishment of a disclosure statement hearing date and a
confirmation hearing date; and
o retention of the following professionals to serve on behalf of
the Debtor: Wilmer, Cutler & Pickering as counsel to the
Debtor; Young, Conaway, Stargatt & Taylor as special counsel
to the Debtor; and Arthur Andersen LLP as accountants for the
Debtor.
Copies of the first day orders and other pleadings filed in this case
may be obtained for a nominal cost directly from Delaware Legal Copy, 824 North
Market Street, Suite 527, Wilmington, Delaware, 19801 (Tel. number 302-426-1570
and Fax number 302-426-1586).
On February 12, 1999, WorldCorp issued the press release attached
hereto as Exhibit 99.1 announcing the commencement of its Chapter 11
case.
Item 5. Other Events
On November 27, 1998, the New York Stock Exchange, Inc. ("NYSE")
informed WorldCorp that trading of its common stock would be suspended in
December 1998 if WorldCorp continued to fall below the NYSE's continued listing
criteria. On December 14, 1998 the NYSE suspended WorldCorp from trading its
common stock and application was made by the NYSE to the Securities and Exchange
Commission to delist the common stock. WorldCorp presently trades on pink
sheets under the symbol WDCP.
On December 21, 1998, WorldCorp issued the press release attached
hereto as Exhibit 99.2 announcing its new trading status.
On February 1, 1999, WorldCorp retained Mark M. Feldman as its
Executive Vice President and Chief Restructuring Officer through the date of
consummation of WorldCorp's financial restructuring, and retained W. Joseph
Dryer as its Corporate Secretary and Treasurer, through the consummation of a
confirmed plan of reorganization.
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Item 7. Financial Statements and Exhibits
Exhibit No. Document Description
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99.1 Press Release, dated February 12, 1999.
99.2 Press Release, dated December 21, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Registrant: WorldCorp, Inc.
By: /s/ Patrick F. Graham
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Name: Patrick F. Graham
Title: President and Chief
Executive Officer
Dated: February 22, 1999
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EXHIBIT INDEX
Exhibit No. Document Description
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99.1 Press Release, dated February 12, 1999.
99.2 Press Release, dated December 21, 1998.
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
WORLDCORP ANNOUNCES PRE-NEGOTIATED RESTRUCTURING
Herndon, Va., February 12 -- WorldCorp, Inc. announced today that it is
implementing its previously announced financial restructuring through the filing
of a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. In the
petition filed today in the U.S. Bankruptcy Court in Wilmington, Delaware,
WorldCorp listed $22 million in assets and $115 million in liabilities.
Concurrent with this filing, WorldCorp also filed its reorganization plan and
related documents. Mark M. Feldman, WorldCorp's Executive Vice President and
Chief Restructuring Officer, stated, "Because the plan of reorganization is
consensual and pre-negotiated among the company, its subsidiaries and its major
creditors, we will seek court approval on an expedited basis. We expect to be
able to implement the restructuring in the second quarter of this year." None of
WorldCorp's affiliated companies is affected by the filing.
WorldCorp, Inc. is a holding company founded in 1987. It owns approximately 28%
of InteliData Technologies Corporation (Nasdaq: INTD), a leading provider of
software products used to adapt large bank mainframe computers to home banking.
An 80%-owned subsidiary of WorldCorp, Inc. owns approximately 50% of World
Airways, Inc. (Nasdaq: WLDA), which provides worldwide air passenger and cargo
transportation service under lease arrangements with major airlines and the U.S.
Military Airlift Command, and 100% of The Atlas Companies, Inc., a manufacturer
of coated paper products, specialty inks and ribbons and consumable cutting dies
for the packaging, business forms and label businesses.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995: "This release contains forward-looking statements that are subject to
risks and uncertainties, including, but not limited to, the impact of
competitive products, product demand and market acceptance risks, reliance on
key strategic alliances, fluctuations in operating results and other risks
detailed from time to time in WorldCorp's filings with the Securities and
Exchange Commission (which reports are available from the Company upon request).
These risks could cause WorldCorp's actual results for 1999 and beyond to differ
materially from those expressed in any forward-looking statements made by, or on
behalf of, WorldCorp."
# # #
For Further Information
W. Joseph Dryer
WorldCorp, Inc.
972-381-4255
EXHIBIT 99.2
WORLDCORP ANNOUNCED NEW TRADING STATUS
WASHINGTON, Dec. 21 /PRNewswire/ -- WorldCorp today announced that as of
Thursday, December 17, 1998, its stock was trading on the "Pink Sheets" under
the symbol of WDCP. The market maker for the Company is Herzog, Heine, Geduld,
Inc. This activity is a result of the fact that the Company is no longer traded
on the New York Stock Exchange.
Patrick F. Graham, President and CEO of WorldCorp stated that "This is an
interim measure while the Company works to be traded on the OTC Bulletin Board."
As previously announced WorldCorp is concluding the restructuring of its
convertible bond holdings.
About WorldCorp:
WorldCorp owns significant positions in companies that operate in three distinct
business areas:
InteliData (Nasdaq: INTD - news) is a pioneer and the proven leader in providing
interactive home banking software to financial institutions. Twenty-three of the
top 100 banks are customers. WorldCorp owns approximately 29% of InteliData and
is its largest shareholder.
World Airways (Nasdaq: WLDA - news) provides ACMI leases to commercial and
military customers using MD-11 and DC-10 passenger and cargo aircraft. WorldCorp
owns approximately 51% of World Airways.
Paper Acquisition Corp. manufactures and sells specialty papers via facilities
throughout the United States. WorldCorp owns 80% of WorldCorp Acquisition Corp.,
which owns 100% of Paper Acquisition Corp.
Safe Harbor statement under the Private Securities Litigation Reform Act of
1995: "This release contains forward looking statements that are subject to
risks and uncertainties, including, but not limited to, the impact of
competitive products, product demand and market acceptance risks, reliance on
key strategic alliances, fluctuations in operating results and other risks
detailed from time to time in WorldCorp's filings with the Securities and
Exchange Commission (which reports are available from the Company upon request).
These risks could cause WorldCorp's actual results for 1998 and beyond to differ
materially from those expressed in any forward looking statements made by, or on
behalf of, WorldCorp."
