AMERISERVE FOOD DISTRIBUTION, INC. ET AL. EXHIBIT C TO DISCLOSURE STATEMENT
PRELIMINARY LIQUIDATION ANALYSIS (A)
(AS OF 8/5/00)
($ THOUSANDS)
<TABLE>
<CAPTION>
Balance
Sheet at High Recovery Low Recovery
AMERISERVE ASSETS: 8/5/2000 Amount % Amount %
------------------ -------- ------ - ------ -
<S> <C> <C> <C> <C> <C>
Cash & Cash Equivalents (B) $ 7,957 $ 7,957 100% $ 7,957 100%
Accounts Receivable (C) 230,606 86,179 37% 38,077 17%
Direct Pay Receivables (D) 38,734 34,861 90% 19,367 50%
Allowance for Doubtful Accounts (45,696) N/A N/A
Inventories, Net (E) 42,821 16,561 39% 8,457 20%
Other Current Assets (F) 29,402 1,470 5% 882 3%
Property & Equipment, Net (G) 250,297 10,051 4% 6,451 3%
Intangible Assets, Net (H) 44,436 -- 0% -- 0%
Intercompany Receivables (I) 34,080 N/A N/A
Other Noncurrent Assets (J) 40,358 2,018 5% 1,211 3%
----------- ----------- -----------
Total $ 672,995 $ 159,096 24% $ 82,401 12%
=========== =========== ===========
OTHER VALUE:
Bankruptcy Causes of Action (K) TBD TBD
DIP-Lender Provided
Replacement Lien (L) 110,000 110,000
----------- -----------
TOTAL PROCEEDS $ 269,096 $ 192,401
Liquidation Expenses (M) (145,000) (160,000)
----------- -----------
NET PROCEEDS $ 124,096 $ 32,401
=========== ===========
ESTIMATED CLAIMS:
Remaining PACA Claims (N) $ 5,700 100% $ 26,770 100%
Tranche A Lenders (O) 79,920 100% 79,920 7%
----------- -----------
Subtotal 85,620 106,690
----------- -----------
Amount Available for Other Secured Debt $ 38,476 $ (74,289)
Tranche B Lender (P) 100,000 38% 100,000 0%
Secured 144a Notes (Q) 200,297 0% 200,297 0%
----------- -----------
Subtotal 300,297 300,297
----------- -----------
Deficiency on Pre-Petition Secured Debt $ (261,821) $ (374,586)
DIP Loan (R) 102,276 0% 102,276 0%
Estimated Unsecured Claims (S) 1,625,161 0% 1,625,161 0%
----------- -----------
Deficiency $(1,989,258) $(2,102,023)
=========== ===========
</TABLE>
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AMERISERVE FOOD DISTRIBUTION, INC. ET AL.
NOTES TO PRELIMINARY LIQUIDATION ANALYSIS
(AS OF 8/5/00)
A. Introduction
The Preliminary Liquidation Analysis (the "Analysis") of AmeriServe Food
Distribution, Inc. and certain of its affiliates (collectively, the
"Company" or the "Debtors") was prepared with the actual balance sheet
amounts as of 8/5/00, as filed with the Bankruptcy Court as part of the
monthly operating report for the period ended 8/5/00, adjusted for
certain cash held on account for other parties.
The Company's management, with the assistance of Jay Alix & Associates,
has prepared this Analysis. The Analysis presents management's estimated
net value of the assets, if the Debtors were to be liquidated under the
provisions of Chapter 7 of the United States Bankruptcy Code and the net
proceeds of the liquidation were to be distributed to the Debtors'
creditors.
The Analysis is in draft form, is intended for discussion purposes only,
and is limited to the sole use of the Company and its advisors and is not
to be provided to any other parties.
The Analysis has not been examined or reviewed by independent accountants
in accordance with standards promulgated by the AICPA. The estimates and
assumptions, although considered reasonable by management, are inherently
subject to significant uncertainties and contingencies beyond the control
of management. Accordingly, there can be no assurance that the results
shown would be realized if the Company were liquidated. Actual results in
such a case could vary materially from those presented.
If actual results were lower than those shown, or if the assumptions used
in formulating the Analysis were not realized, distributions to each
member of each class of claims could be adversely affected.
The Notes to the Analysis are an integral part of the Analysis.
B. Cash and cash equivalents includes cash on hand and cash in the
segregated accounts. Cash in various lockboxes relating to amounts owed
to Tricon and Burger King for bailed accounts receivable are excluded
from the Debtors' cash.
C. Accounts receivable are comprised of both pre-petition and
post-petition accounts receivable. Pre-petition receivables are
receivables due AmeriServe Funding Corporation (a bankruptcy remote
entity and a non-Debtor affiliate) relating to pre-petition customer
receivables that were part of the Company's pre-petition receivables
securitization program, net of approximately $487 million in
receivables funding. The bankruptcy filing was an event of termination
for the accounts receivable financing; however, the Company continues
to collect pre-petition receivables. Post-petition receivables are
comprised of both continuing customers and customers who have exited
the AmeriServe system. The estimated recovery on these receivables,
were they to be liquidated, is approximately 17% to 37%.
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<PAGE>
AMERISERVE FOOD DISTRIBUTION, INC. ET AL.
NOTES TO PRELIMINARY LIQUIDATION ANALYSIS
(AS OF 8/5/00)
D. Direct pay receivables are accounts receivable due to the Debtors from
Tricon Restaurant Group and Burger King Corporation. Since the bankruptcy
filing, Tricon and Burger King have purchased inventory directly from the
Debtors' vendors that is sold through the AmeriServe system.
Consequently, amounts due AmeriServe from these customers are
distribution fees (which are fees paid to AmeriServe for the delivery of
Tricon and Burger King owned inventory to these customers' stores) and
certain other obligations. The estimated recovery in liquidation for
direct pay receivables is 50% to 90%.
E. Inventory is comprised of inventory for both continuing customers
(e.g., Long John Silvers) and customers who have exited the AmeriServe
system. The amount is netted against an obsolescence reserve. The
estimated recovery on the liquidation of inventory is approximately 20%
to 39%.
F. Other current assets are comprised mainly of rebates from various
vendors, cost recaptures from franchisees and various prepaid expenses.
The estimated recovery on the liquidation of other current assets is
approximately 3% to 5%.
G. Property and equipment is comprised of buildings, improvements,
transportation equipment, warehouse equipment, furniture and fixtures,
computers and software equipment and JD Edwards development costs. A
substantial portion of these assets are capitalized leases. The estimated
recovery in liquidation of the owned assets is 3% to 4%.
H. Intangible assets are mainly comprised of deferred financing fees. In a
liquidation, the estimated recovery is 0%.
I. Intercompany receivables are mainly comprised of amounts due from
Holberg Industries, Inc. and other affiliated entities. The Company is
presently involved in litigation against Holberg regarding some of
these payments. At the present time, due to the uncertainty of an
outcome involving the litigation, the Company has not presented an
estimated recovery.
J. Other non-current assets principally include letters of credit that
have been drawn and the Company's investment in the Canada and Mexico
subsidiaries. In a liquidation, the estimated recovery is 3% to 5%.
K. The range of recoveries from various potential avoidance action
litigation has not yet been quantified by the Company.
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AMERISERVE FOOD DISTRIBUTION, INC. ET AL.
NOTES TO PRELIMINARY LIQUIDATION ANALYSIS
(AS OF 8/5/00)
L. The Company's bankruptcy financing agreements require the DIP lenders to
provide a replacement lien to certain pre-petition secured lenders for
the use of cash collateral. An estimate of the potential replacement lien
is $110 million.
M. The liquidation expenses include payment in full of all valid
administrative claims, including but not limited to: employee wages and
expenses, post-petition tax claims, accounts payable, agreed-to but as
yet unpaid professional fees and expenses, other administrative expenses
and fees for a Chapter 7 trustee.
N. Claims under the Perishable and Agricultural Commodities Act, Packers
and Stockyards Act, as well as state statutes of similar import
collectively, are produce supplier claims that receive priority
treatment in bankruptcy cases. Approximately $52.0 million in PACA
Claims have been filed in these cases. As of 9/21/00, approximately
$29.3 million in PACA claims have been deemed valid and paid in full to
the claim holders. The validity of the remaining $22.7 million in PACA
Claims continues to be analyzed. Some of these claims may involve
litigation and could take a substantial amount of time to resolve. The
claim amounts reflected represent a potential range of valid PACA
Claims and an additional reserve for two years interest and fees should
certain litigated claims be deemed valid.
O. Tranche A debt of $79.9 million reflects an estimate of the amount due
the Tranche A lenders including principal outstanding and letter of
credit exposure as of 8/5/00. At 9/21/00, there were approximately $2.7
million in undrawn letters of credit.
P. Tranche B debt consists of $100.0 million (face amount) in pre-petition
debt owing to the Tranche B lender.
Q. Secured 144a notes reflects the original issue discount of $205.0
million in secured bonds that were issued in September of 1999.
R. The balance of the Debtor-In-Possession financing facility at 8/5/00
was $102.3 million.
S. The estimate of unsecured claims reflects the liabilities subject to
compromise from the 8/5/00 monthly operating report. The amount is
comprised of all unsecured bond offerings of and notes issued by
AmeriServe Food Distribution, Inc. and Nebco Evans Holding Company,
estimated filing date accounts payable and accrued expenses.
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