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): January 27, 1997
SMITH CORONA CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-10281 51-0286862
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
839 Route 13 South, Cortland, New York 13045
(Address of principal executive offices) (zip code)
(607) 753-6011
(Registrant's telephone number, including area code)
<PAGE>
Item 3. Bankruptcy
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On January 27, 1997, the U.S. Bankruptcy Court for the
District of Delaware confirmed Smith Corona Corporation's Third
Amended Second Joint Plan of Reorganization, as amended (the
"POR"). The Court's acceptance of Smith Corona's POR signals that
the company will be ready to emerge from Chapter 11 protection when
the POR goes into effect.
A summarization of the material features of the POR is
contained in the press release attached hereto as exhibit 99.1 and
incorporated herein by reference.
Smith Corona Corporation has 30,250,000 shares of common stock
at $.01 par value issued and outstanding. Such shares will be
canceled on the effective date of the POR and the holders will
receive warrants to purchase common stock of the reorganized
company at a ratio of one warrant for each twenty shares of common
stock. Under the POR, Class 8 claimants will receive 85 percent of
the common stock, $.001 par value, of the reorganized Smith Corona
in the ratio of one share for each $10 in amount of allowed Class 8
claim held. Class 8 allowed claims are conservatively estimated to
be $33 million.
Information as to the assets and liabilities of Smith Corona
and its consolidated subsidiaries is noted below in the Unaudited
Consolidated Balance Sheet as of December 31, 1996:
December 31,
1996
ASSETS ($ in thousands)
Current assets:
Cash and cash equivalents $ 29,257
Accounts receivable (net of allowance
for doubtful accounts of $751) 18,495
Inventories 13,905
Prepaid expenses and other current
assets 3,697
Total current assets 65,354
Property, plant and equipment, net 11,068
Other assets 2,451
TOTAL $ 78,873
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade payables $ 3,842
Accrued liabilities 10,707
Income taxes payable 640
Total current liabilities 15,189
Liabilities subject to compromise 57,107
Total liabilities 72,296
Stockholders' equity:
Common stock-30,250,000 shares issued
and outstanding 303
Additional paid-in capital 44,697
Accumulated deficit (38,423)
Total stockholders' equity 6,577
TOTAL $ 78,873
Item 7. Financial Statements and Exhibits
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2.1 Debtors' Third Amended Second Joint Plan of Reorganization
under Chapter 11 of the United States Bankruptcy Code
(incorporated by reference to Exhibit 2.1 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended June 30,
1996 (File No. 1-10281)(see Exhibit A included therein)).
2.2 Motion to Approve Technical Amendments to the Debtors' Third
Amended Second Joint Plan of Reorganization, as approved by
the United States Bankruptcy Court for the District of
Delaware (incorporated by reference to Exhibit 2 to the
Registrant's Registration Statement on Form 8-A dated January
30, 1997 (File No. 1-10281)).
99.1 News Release<PAGE>
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.
Date: February 11, 1997 SMITH CORONA CORPORATION
By: /s/ John A. Piontkowski
John A. Piontkowski
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
By: /s/ Martin D. Wilson
Martin D. Wilson
Vice President/Controller
(Principal Accounting Officer)<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
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2.1 Debtors' Third Amended Second Joint Plan of
Reorganization under Chapter 11 of the United States
Bankruptcy Code (incorporated by reference to Exhibit 2.1
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended June 30, 1996 (File No. 1-10281)(see
Exhibit A included therein)).
2.2 Motion to Approve Technical Amendments to the Debtors'
Third Amended Second Joint Plan of Reorganization, as
approved by the United States Bankruptcy Court for the
District of Delaware (incorporated by reference to
Exhibit 2 to the Registrant's Registration Statement
on Form 8-A dated January 30, 1997 (File No. 1-10281)).
99.1 News Release
EXHIBIT 99.1
News Release
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Sitrick and Company, Inc.
Los Angeles/New York
Contact: Rivian Bell
Sitrick and Company, Inc.
(310) 788-2850
(800) 686-1910 (24-hours)
For Immediate Release
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Court Confirms Smith Corona Reorganization Plan;
Smith Corona to Emerge From Chapter 11
Cortland, N.Y. -- Jan. 27, 1997 -- Smith Corona Corporation
(SCC) announced today that the U.S. Bankruptcy Court for the
District of Delaware confirmed the company's Plan of
Reorganization, which describes the manner by which SCC will
restructure its debt and repay its creditors. The Court's
acceptance of Smith Corona's plan signals that the company will
be ready to emerge from Chapter 11 protection when the plan goes
into effect, as early as Feb. 7, 1997.
Confirmation of the Plan followed hearings to assure that
all reorganization requirements had been met under the Bankruptcy
Code which included approval by the requisite majority of
creditor classes.
Under the terms of the Plan, holders of allowed Class 8
general unsecured claims, estimated to ultimately total $33
million, will receive pro rata cash distributions of a cash pool
of $10.78 million, less Class 9 convenience claim payouts
totaling approximately $138,000. Convenience claims include
allowed claims of $1,500 or less, which will pay 60 cents for
each dollar of allowed claim. The allowed Class 8 general
unsecured claims include $9.85 million in claims of trade and
other creditors and an $8.3 million claim of the Pension Benefit
Guaranty Corporation. An initial distribution will be made to
creditors shortly after the Plan becomes effective.
In papers filed with the Court, the company stated that it
has reserved $14.85 million to accommodate certain unresolved
claims. This reserve amount is included in the $33 million
estimate for Class 8 allowed claims.
Class 8 creditors will also receive 85 percent of the common
stock in the reorganized company. Each holder will receive one
share of common stock in the reorganized company for each $10 in
amount of allowed Class 8 claim held.
Current shareholders will be entitled to receive warrants
equal to one warrant per 20 shares of existing common stock. The
company believes that the warrant exercise price will be $8.50,
subject to review by the company's board of directors. Under the
terms of the Plan, warrants cannot be exercised until six months
after the Plan becomes effective.
The company has applied for the trading symbol "SCCO" for
its new common stock and for a listing on the NASDAQ exchange,
although no assurances can be given that such listing will be
obtained. The company believes that market makers will emerge to
engage in stock trades.
According to Ronald F. Stengel, Smith Corona president and
chief executive officer who has successfully directed the
company's reorganization, "when Smith Corona filed under Chapter
11 19 months ago, more than 100 articles appeared decrying the
death of the company. I am pleased to state that Smith Corona
has survived and has positioned itself to compete effectively in
today's marketplace.
"In fact, the Smith Corona management team has successfully
restructured the company's operations which will result in the
reorganized company emerging with a considerably strengthened
balance sheet. Today Smith Corona employs more than 1,100 people
worldwide who manufacture and market a refined line of electronic
typewriters, word processors and related office equipment. Under
W. Michael Driscoll, Smith Corona's new chief executive officer,
the company will complete the implementation of its business
plan, which calls for the procurement of new technologies and
product lines to expand the company's marketing reach in the
office product category."
Mr. Stengel emphasized that "the Smith Corona reorganization
could not have occurred without the hard work and dedication of
every Smith Corona employee. They are owed our sincere and
heartfelt thanks for a job well done."
Smith Corona also announced a new seven-member board of
directors, which will commence responsibilities once the company
emerges from Chapter 11. The new directors include: W. Michael
Driscoll, president and chief executive officer of the
reorganized Smith Corona Corporation; Ronald F. Stengel,
president of R.F. Stengel & Company, Inc., a crisis management
company; Peter Parts, chief executive officer of Peter Parts
Electronics, Inc.; William J. Morgan, president of Pacholder
Associates, Inc., a national investment and financial advisory
service firm; Jerome A. Colletti, president and chief executive
officer of The Alexander Group, a national marketing and sales
management firm; Michael J. Murray, former vice president of the
U.S./Canadian region for the Office Imaging Division of Eastman
Kodak and architect of Kodak's strategic entry into the copier
marketplace; and Richard N. Rosett, dean of the College of
Business, Rochester Institute of Technology, and former dean of
the Faculty of Arts and Sciences of Washington University and The
Graduate School of Business of the University of Chicago.
Smith Corona is a leading worldwide manufacturer and
marketer of personal word processors, portable electronic
typewriters, and other products and accessories for use in the
office, home and school. The company maintains headquarters in
Cortland, N.Y. and employs approximately 1,100 people worldwide.
Smith Corona filed under Chapter 11 of the U.S. Bankruptcy
Code on July 5, 1995.
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