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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): March 17, 1997
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Reddi Brake Supply Corporation
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(Exact name of registrant as specified in its charter)
Nevada 0-19620 84-1152135
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1376 Walter Street, Ventura, California 93003
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (805) 644-8355
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Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 1. CHANGE IN CONTROL OF REGISTRANT.
Not applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Not applicable.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
On March 17, 1997, an involuntary petition under Chapter 11 of the
Bankruptcy Code was filed against Reddi Brake Supply Company ("Subsidiary"), the
wholly-owned subsidiary of the Registrant. The involuntary petition was filed by
a group of four unsecured creditors of the Subsidiary in the United States
Bankruptcy Court ("Court") for the Central District of California in Santa
Barbara, California (Case No. ND97-11349-RR). On March 18, 1997, the Subsidiary
closed and secured all of its 84 warehouses and laid off all of its field
employees and most of its administrative personnel. The immediate closure and
layoff was necessary due to the lack of sufficient capital on the part of the
Registrant or the Subsidiary to continue operations.
Subsequent to March 17, 1997, the Subsidiary reached a preliminary
non-binding agreement in principle with its secured lender and certain of its
unsecured trade creditors, including the four unsecured creditors who filed the
involuntary petition. Pursuant to that agreement in principle, the Subsidiary
would be allowed to convert to a voluntary Chapter 11 proceeding for purposes of
reorganizing. The reorganization will be financed by limited
debtor-in-possession funding ("DIP Funding") by the Subsidiary's secured
lender. The Company's objective in pursuing a reorganization under voluntary
Chapter 11 will be to attract additional capital for purposes of financing the
reorganization and continued operation of the Subsidiary or, in the absence of
additional capital, the sale of the Subsidiary's assets either in whole or
pursuant to an orderly liquidation.
On March 27, 1997, the Subsidiary filed a petition for conversion to a
voluntary Chapter 11 proceeding with the Court. At the same time, the
Subsidiary's secured lender submitted a motion for the provision of the DIP
Funding. The DIP Funding motion will be heard by the Court on April 4, 1997. In
consideration of the senior lender's agreement to provide the DIP Funding, the
Subsidiary will stipulate that unless a definitive commitment for the
capitalization or purchase of the Subsidiary or its assets is obtained by April
18, 1997, it will commence the orderly liquidation of all assets.
ITEM 4. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
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ITEM 5. OTHER EVENTS.
On March 15, 1997, Mr. Marshall Green formally resigned as a member of
the Board of Directors of the Registrant due to a potential conflict of
interest under a pre-existing franchise agreement with a customer of the
Registrant's wholly-owned operating subsidiary. On March 25, 1997, Mr.
Richard McGorrian resigned as Chief Executive Officer and President of the
Registrant and the Subsidiary. At a special meeting of the Board of Directors
of the Registrant held on March 31, 1997, the Board of Directors appointed Mr.
Sandford T. Waddell, presently Chief Financial Officer of the Registrant, to
serve as interim Chief Executive Officer of the Registrant. At the present
time, the Board of Directors of the Registrant consists of Mr. Eric Openshaw,
Mr. Thomas Toole and Messrs. McGorrian and Waddell.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
ITEM 8. CHANGE IN FISCAL YEAR.
Not applicable.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION 5.
Not applicable.
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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.
Reddi Brake Supply Corporation
(Registrant)
Date: April 1, 1997 By: /s/ Sandford T. Waddell
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Sandford T. Waddell, Chief Executive Officer
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