RESTRUCTURING ACQUISITION CORPORATION
555 MADISON AVENUE
NEW YORK, NEW YORK 10022
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND RULE 14C-2
THEREUNDER.
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This Information Statement is being mailed on or about May __, 1996 to
the holders (the "Stockholders") of the Common Stock, $.001 par value per share
("Common Stock"), of Restructuring Acquisition Corporation., a Delaware
corporation ("RAC" or the "Company"), in connection with the approval of the
Plan of Dissolution, Complete Liquidation and Termination of Existence (the
"Plan" or the "Plan of Dissolution") of the Company substantially in the form
attached as annex A hereto. As of May 31, 1996 of the [1,995,000] shares of
Common Stock outstanding, [____________] (or ___%) delivered written consents to
the Company approving the Plan of Dissolution. Since the Plan of Dissolution has
been approved by the holders of the required majority of the Common Stock, no
proxies are being solicited with this Information Statement.
The Company has asked brokers and other custodians, nominees and
fiduciaries to forward this Information Statement to the beneficial owners of
the shares held of record by such persons and will reimburse out-of-pocket
expenses incurred in forwarding such material.
The Board of Directors has fixed the close of business on May 31, 1996
as the record date for the determination of Stockholders who are entitled to
receive this Information Statement.
This Information Statement is required by Section 14(c) of the
Securities Exchange Act of 1934, as amended, and Rule 14c-2 promulgated
thereunder. You are urged to read this Information Statement carefully. You are
not, however, required to take any action.
NO VOTE OR OTHER ACTION OF THE COMPANY'S STOCKHOLDERS IS
REQUIRED IN CONNECTION WITH THIS INFORMATION STATEMENT. NO
PROXIES ARE BEING SOLICITED AND YOU ARE REQUESTED NOT TO SEND THE
COMPANY A PROXY.
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GENERAL
THE COMPANY
RAC is a Specified Purpose Acquisition Company ("SPAC"), incorporated
under the laws of the State of Delaware on May 14, 1993, the objective of which
was to acquire an operating business which requires a restructuring of its
balance sheet to continue or expand its business operations ("Business
Combination").
The Company was to proceed with a Business Combination only if a
majority of all of the outstanding shares of RAC were voted in favor of the
Business Combination. Additionally, if 20% or more in interest of Stockholders
of RAC (excluding, for this purpose, the Initial Stockholders) voted against the
Business Combination, RAC would not be permitted to consummate such Business
Combination.
On May 10, 1996, a Special Meeting of Stockholders was called in which
the Company's Stockholders voted against an Amended and Restated Implementation
Agreement and Plan of Merger and Acquisition between the Company, Media
Technology Corporation, Ltd. ("Mediatech"), Mediatech Holdings, Ltd. and Media
Technology Corporation Ltd. In the Proxy Statement delivered to Stockholders in
connection with the Agreement, the Stockholders of RAC were notified that if RAC
did not consummate a Business Combination by May 12, 1996, RAC would be
dissolved pursuant to the RAC Certificate of Incorporation (the "BAC
Certificate") and would distribute to all of its Public Stockholders, in
proportion to their ownership of RAC Common Stock, an amount equal to the amount
in the Trust Fund (as defined below).
The Company's principal executive offices are located at 555
Madison Avenue, 17th Floor, New York, New York 10022. Its
telephone number is 212-838-4173.
REASONS FOR THE DISSOLUTION
The Company's certificate of incorporation (the "RAC Certificate")
limits the duration in which the Company is able to consummate a Business
Combination. The RAC Certificate provides that if RAC does not consummate a
Business Combination within 18 months from the consummation of its initial
public offering ("IPO") or November 12, 1995, or 24 months from the consummation
of the IPO or May 12, 1996 if certain extension criteria have been satisfied,
the officers of the Company are required to take all actions so that the Company
would be dissolved and would distribute to all Public Stockholders, in
proportion to their respective equity interests in RAC, an aggregate sum equal
to approximately [$ ].
Since the Company was unable to consummate a Business Combination by
May 12, 1996, the RAC Board of Directors adopted a
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resolution to dissolve the Company in accordance with the RAC Certificate. In
addition, in reaching its conclusion to liquidate, the Board of Directors
considered a number of other factors, including the ongoing accounting, legal
and other expenses that would be incurred by the Company in maintaining its
existence as a public company. The Initial Stockholders have waived their
respective rights to participate in any liquidation distribution. Therefore, at
May 31, 1996, upon liquidation, the Public Stockholders will receive
approximately $[__________________] or $[____] per RAC Share held by the Public
Stockholders. The Public Stockholders will not receive any liquidation
distribution with respect to any Warrants owned by them.
REQUIRED VOTE
Pursuant to Delaware law, the RAC Certificate and the bylaws of RAC
(the "RAC Bylaws"), the affirmative vote of the holders of at least a majority
of the outstanding shares of RAC Common Stock was necessary to approve the Plan
of Dissolution. The written consent by a majority of stockholders is permitted
as a substitute for a meeting of stockholders. As of May __, 1996, the Company
obtained the written consent of _________ shares, representing ___% of the
outstanding shares at such date. Accordingly, the Plan of Dissolution has been
duly adopted by the RAC Stockholders.
DESCRIPTION OF THE PLAN
PROVISION FOR LIABILITIES; LIQUIDATING DISTRIBUTIONS
The Plan provides for the complete liquidation and dissolution
of the Company in accordance with the provisions of the Delaware General
Corporation Law (the "DGCL"). Prior to making any distributions to stockholders,
the Company is required to pay, or make reasonable provision to pay, all claims
and obligations of the Company, including contingent, conditional and unmatured
claims known to the Company. Following the payment or the provision for the
payment of the Company's claims and obligations, the Plan provides for the pro
rata distribution of the Company's remaining property and assets to the
stockholders of the Company. The Plan provides that the timing and amount of any
distributions will be determined by the Board of Directors in its discretion and
that the remaining property and assets of the Company may be distributed all at
once or in a series of distributions.
As of the date of this Information Statement, the Company is
not aware of any material claims, obligations or other liabilities to which it
is subject. The Company does not plan to satisfy all of its liabilities and
obligations prior to making distributions to stockholders. Instead, the Company
will establish a contingency reserve in an amount which the Board of Directors
reasonably determines will be adequate to satisfy any contingent obligations of
the Company in connection with its
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pending litigation matters and any other liabilities or obligations of the
Company. The Board of Directors estimates that the amount of the contingency
reserve will be _________ (consisting of cash).
Following the liquidating distribution, the Company's assets will
consist of the cash and other assets, if any, retained in the contingency
reserve. Any amounts in the contingency reserve which are not applied to satisfy
claims, obligations or expenses of the Company ultimately will be distributed to
stockholders. The Board of Directors does not believe that there will be
sufficient funds to cover any such distributions. The Company intends to
establish the contingency reserve in an amount sufficient to provide for all
obligations and liabilities of the Company, including contingent obligations.
However, there can be no assurance that the contingency reserve will be
sufficient to satisfy all such obligations and liabilities. If the amount of the
reserve is not sufficient, stockholders may be required to return all or a
portion of the liquidating distributions made to them. See "Stockholders'
Continuing Liability."
SURRENDER OF STOCK CERTIFICATES
As a condition to the receipt of any distribution under the
Plan, stockholders will be required to surrender their certificates evidencing
Common Stock to the Company or its agent for cancellation. If a stockholder's
certificate evidencing the Common Stock has been lost, stolen or destroyed, the
stockholder may be required to furnish the Company with satisfactory evidence of
the loss, theft or destruction thereof, together with a surety bond or other
indemnity, as a condition to the receipt of any distribution. Distributions
under the Plan will be in complete redemption and cancellation of all of the
outstanding Common Stock.
Once the Board of Directors determines the date on which
stockholders should surrender their certificates, the Company will cause a
notice and transmittal form to be sent to stockholders, which will advise the
stockholders of the procedures to be followed for the surrender of certificates
representing shares of Common Stock. Stockholders should not submit their stock
certificates to the Company or its transfer agent before receiving instructions
to do so.
AMENDMENTS AND MODIFICATIONS; ABANDONMENT
Notwithstanding the adoption of the Plan by the Company's
stockholders, the Board of Directors, in its discretion, may amend or modify the
Plan without further stockholder approval to the extent permitted by the DGCL.
However, if the Board of Directors determines that any amendment or modification
would materially and adversely affect the interests of stockholders, the Board
of Directors will submit the amendment or modification to the stockholders for
their approval.
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LIQUIDATING TRUST
If advisable for any reason to complete the liquidation and
distribution of the Company's assets to its stockholders, the Board of Directors
at any time may transfer to a liquidating trust the remaining assets of the
Company. The trust thereupon would succeed to all of the then remaining assets
and liabilities of the Company. The sole purpose of a liquidating trust would be
to complete the liquidation of the Company as contemplated by the Plan. The Plan
authorizes the Board of Directors to appoint one or more individuals or
corporate persons to act as the trustee or trustees of the trust and to cause
the Company to enter into a liquidating trust agreement with the trustee or
trustees on such terms and conditions a may be approved by the Board of
Directors. Adoption of the Plan by the stockholders also will constitute
approval by the stockholders of any such appointment and liquidating trust
agreement.
The Company has no present plan to use a liquidating trust,
but the Board of Directors believes the flexibility provided by the Plan with
respect to the liquidating trust to be advisable.
PROCEDURES FOR DISSOLUTION
Pursuant to the DGCL, following adoption of the Plan by the
stockholders of the Company, the Company will file with the Secretary of State
of the State of Delaware a certificate of dissolution. The dissolution of the
Company will become effective, in accordance with the DGCL, upon proper filing
of the certificate of dissolution with the Secretary of State or upon such later
date as may be specified in the certificate. The Board of Directors currently
anticipates that the certificate of dissolution will be filed and become
effective promptly following the approval of the Plan by stockholders.
Pursuant to the DGCL, the Company will continue to exist for
three years after the dissolution becomes effective or for such longer period as
the Delaware Court of Chancery shall direct for the purpose of prosecuting and
defending suits, whether civil, criminal or administrative, by or against it,
and enabling the Company gradually to settle and close its business, to dispose
of and convey its property, to discharge its liabilities and to distribute to
stockholders any remaining assets, but not for the purpose of continuing the
businesses for which the Company was organized.
MANAGEMENT OF THE COMPANY FOLLOWING ADOPTION OF THE PLAN
It is anticipated that the present directors and officers of
the Company will continue to serve in such capacities following the adoption of
the Plan. After the certificate of dissolution is filed, the Company does not
intend to hold any further annual meetings of stockholders. Directors and
officers
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currently in office will continue in office until a successor is duly elected
and qualified or until their resignation or removal. The Plan provides that, in
the event of the resignation or removal of a director or officer, the remaining
directors, or, if there are none, the remaining officers, shall have the
authority to fill the vacancy or vacancies created.
Following the adoption of the Plan by the stockholders, the
Company's activities will be limited to winding up its affairs and taking such
actions as may be necessary to preserve the value of its assets. The Board of
Directors and, if authorized by the directors, the officers of the Company, will
have the authority to do or authorize any and all acts and things provided for
in the Plan and any and all further acts and things they may consider necessary
or desirable to carry out the purposes of the Plan.
Following the adoption of the Plan, the Company will continue
to indemnify its directors, officers, employees and agents in accordance with
its certificate of incorporation, bylaws and contractual arrangements for
actions taken in connection with the implementation of the Plan and the winding
up of the affairs of the Company. The Plan authorizes the Board of Directors to
obtain and maintain such insurance as may be necessary to cover the Company's
indemnification obligations.
RECORD DATE; EFFECT ON LISTING AND TRADING OF THE COMMON STOCK
If the Plan is approved by stockholders, promptly thereafter
the Board of Directors intends to designate a record date (the "Final Record
Date") for the purpose of determining the stockholders entitled to receive the
initial liquidating distribution and such other liquidating distributions as
thereafter may be made by the Company. All liquidating distributions will be
made pro rata to stockholders of record on the Final Record Date based on their
respective stockholdings on the Final Record Date.
The Common Stock currently is traded through the electronic
OTC Bulletin Board Service of the National Association of Securities Dealers,
Inc. The Company intends to close its stock transfer books on the Final Record
Date and at such time cease recording stock transfers and issuing stock
certificates (other than replacement certificates and certificates issued to
reflect transfers by will, intestate succession or operation of law). It is not
expected that trading of the Common Stock will continue through the OTC Bulletin
Board Service. Accordingly, no further trading of the Company's shares is
expected to occur after the Final Record Date.
STOCKHOLDERS' CONTINUING LIABILITY
The Plan contemplates that liquidating distributions will be
made to stockholders only to the extent of distributable
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assets over a reserve for the obligations and liabilities of the Company.
However, in the event a court were to determine that the Company failed to pay
or make adequate provision for its liabilities and obligations prior to a
liquidating distribution, a creditor of the Company could seek an injunction
against the making of any distributions under the Plan on the grounds that the
amounts to be distributed were needed to provide for the payment of the
Company's liabilities and obligations. In addition, pursuant to Section 282 of
the DGCL, after a liquidation distribution is made, the stockholders of the
Company may be held personally liable for the payment of any claim against the
Company which it is unable to satisfy, but such personal liability by statute
cannot exceed the lesser of the stockholders' pro rata share of the claim or the
amount distributed to such stockholder pursuant to the Plan.
In order to avoid any such liability on the part of
stockholders, the Company intends to establish a contingency reserve that will
adequately provide for the payment of all liabilities and obligations of the
Company. However, it is possible that the Company may not anticipate all
possible liabilities and that, if the amount of such liabilities exceeds the
contingency reserve, the stockholders of the Company may have to return all or a
portion of the liquidating distributions made to them.
STOCKHOLDER REJECTION OF THE PLAN
If the stockholders reject the Plan at the Special Meeting,
the Board of Directors will explore the alternatives available to the Company.
Such alternatives could include a further attempt to locate a business that
might be interested in engaging in a merger or similar transaction with the
Company and the resubmission of a plan of complete liquidation and dissolution
to the Company's stockholders. The Board of Directors currently is not aware of
any alternative business opportunities for the Company. Unless the Company were
to merge with or otherwise acquire an operating business, the Company's assets
would continue to consist primarily of cash and short-term investments, and the
Company could be required to register as an "investment company" under the
Investment Company Act of 1940. As long as the Company continues in existence,
the Company will be required to incur accounting, legal and other administrative
costs which will be paid from its remaining assets.
NO APPRAISAL RIGHTS
Under Delaware law, stockholders of the Company are not
entitled to appraisal rights or similar dissenters' rights for shares of Common
Stock in connection with the transactions contemplated by the Plan.
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REGULATORY APPROVALS
The Company is not aware of any material governmental
approvals that are required for the implementation and consummation of the Plan.
FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following discussion is a general summary of the federal
income tax consequences that will result from the liquidation of the Company and
the distribution of its assets to its stockholders. This summary does not
discuss all aspects of federal income taxation that may be relevant to a
particular stockholder or to certain types of persons subject to special
treatment under federal income tax laws (for example, life insurance companies,
tax-exempt organizations or financial institutions) and does not discuss any
aspects of state, local or foreign tax laws which may be applicable to a
particular stockholder. Distributions pursuant to the Plan may occur at various
times and in more than one tax year. No assurances can be given that the tax
treatment described herein will continue to apply unchanged at the time of such
distributions.
This summary is not intended as a substitute for careful tax
planning, particularly because certain of the tax consequences of the Plan may
not be the same for all stockholders. Stockholders are urged to consult their
personal tax advisors with specific reference to their own tax situation.
CONSEQUENCES TO THE COMPANY
The Company will continue to be subject to income tax on its
taxable income until it completes the distribution of all of its assets to
stockholders. Upon any distribution by the Company of property to its
stockholders, the Company generally will recognize gain or loss as if such
property were sold to the stockholders at its fair market value. The Company
does not anticipate that it will distribute to stockholders any property on
which it would recognize gain or loss.
CONSEQUENCES TO STOCKHOLDERS
On receipt of liquidating distributions from the Company, each
stockholder will recognize gain or loss equal to the difference between (i) the
sum of the amount of cash and the fair market value (at the time of
distribution) of any property distributed to the stockholder, and (ii) the
stockholder's tax basis in his or her shares in the Company. A stockholder's tax
basis in his or her shares depends on various factors, including the
stockholder's cost and method of acquisition of such shares, and the amount and
nature of any distributions the stockholder previously has received from the
Company with respect to such
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shares. Gain or loss recognized by a stockholder will be capital gain or loss
provided the shares are held as capital assets. A stockholder's capital gain or
loss on receiving liquidating distributions will be long-term if the holding
period for such shares is more than one year, and short-term if the holding
period is one year or less.
A stockholder's gain or loss will be computed on a "per share"
basis, so that each stockholder must allocate liquidating distributions from the
Company equally to each share of the stock of the Company which he or she owns
and compare such allocated portion of the liquidating distributions with his or
her tax basis in such share, to calculate the gain or loss for such share. If
the Company pays the liquidating distributions in installments, each stockholder
must first recover his or her basis in the shares owned by the stockholder
against the value of the distributions which he or she receives before
recognizing any gain or loss. Thus, if the Company pays liquidating
distributions to its stockholders in installments, each stockholder will
recognize gain on an installment only to the extent that the aggregate value of
such installment, and all prior installments he or she received with respect to
a share, exceeds the tax basis in that share, and will recognize a loss with
respect to a share only when he or she has received the final installment, and
then only if the aggregate value of the liquidating distributions from the
Company with respect to the share is less than the tax basis in the share.
The Company expects that all distributions to stockholders
will be made in cash. If the Company makes a liquidating distribution of
property to a stockholder, the stockholder's tax basis in the property will be
its fair market value at the time of distribution, and the holding period for
the property will begin at the time of distribution.
LIQUIDATING TRUST
If the Company transfers its assets to a liquidating trust,
the stockholders will be treated for tax purposes as having received their pro
rata share of such assets when the transfer occurs. The amount of the taxable
distribution to the stockholders on the transfer of the Company's assets to the
liquidating trust will be reduced by the amount of the Company's known
liabilities which the liquidating trust assumes or to which such transferred
assets are subject. The liquidating trust itself generally will not be subject
to tax, and, after the formation of the liquidating trust, each stockholder will
take into account for federal income tax purposes his or her allocable portion
of any income, gain, deduction or loss which the liquidating trust recognizes.
Distributions of assets by the liquidating trust to the stockholders will not be
taxable to them. Each stockholder should be aware that he or she may be liable
for tax as a result of the transfer of assets by the Company to the liquidating
trust and the ongoing operations of
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the liquidating trust, even if the liquidating trust has not made any actual
distributions to stockholders with which to pay such tax. The Company currently
does not intend to transfer its assets to a liquidating trust.
STATE AND LOCAL INCOME TAX
Stockholders also may be subject to state and local taxes.
Stockholders should consult their tax advisors regarding the state and local tax
consequences of the Plan.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF RAC
RAC is SPAC, incorporated under the laws of the State of Delaware on
May 14, 1993, the objective of which is to acquire an operating business which
requires a restructuring of its balance sheet to continue or expand its business
operations.
In July 1993, RAC consummated a bridge financing (the "Bridge
Financing") in order to pay certain organizational expenses, the costs of the
Bridge Financing and certain costs of the IPO. Six investors in the Bridge
Financing loaned an aggregate of $150,000 to RAC and were issued promissory
notes in that amount, bearing interest at the rate of 10% per annum and payable
at the consummation of the IPO.
The IPO was consummated on May 12, 1994 and May 27, 1994 and raised net
proceeds of approximately $8,530,000 after payment of offering expenses and
repayment of the Bridge Financing promissory notes and interest.
RAC's management has broad discretion with respect to the specific
application of the net proceeds of the offering, although substantially all of
the net proceeds are intended to be generally applied toward consummating a
Business Combination with an operating business which requires a restructuring
of its balance sheet to expand or continue its operations. A majority of the net
proceeds of [$___________] are held in the Trust Fund until the earlier of (i)
the consummation of a Business Combination or (ii) liquidation of RAC. The Trust
Fund indenture limits investments to U.S. Government securities with maturity of
180 days or less. The remaining proceeds are being used to pay for business,
legal and accounting due diligence on prospective acquisitions, and continuing
general and administrative expenses in addition to other expenses.
Substantially all of RAC's working capital needs subsequent to the
offering were attributable to the identification, evaluation and selection of a
suitable target business and, thereafter, to structure, negotiate and consummate
a business combination with such target business.
Since its inception, RAC has sought a prospective Target Business and
in so doing has incurred total expenses of $416,324. These expenses are
primarily attributable to office service expenses of $100,000, insurance
expenses of $75,000, state franchise and other taxes of $73,734 and professional
fees of $36,223. See "Financial Statements of RAC."
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PRINCIPAL STOCKHOLDERS AND SECURITY
OWNERSHIP OF MANAGEMENT OF RAC
The following table sets forth certain information regarding beneficial
ownership of the shares of Common Stock of RAC as of February 1, 1996 unless
otherwise noted, by (i) each stockholder known by RAC to be the beneficial owner
of more than 5% of the outstanding Common Stock, (ii) each director of RAC and
(iii) all directors and executive officers as a group. Except as otherwise
indicated, RAC believes that the beneficial owners of the shares of Common Stock
listed below, based on information furnished by such owners, have sole
investment and voting power with respect to such shares, subject to community
property laws where applicable.
<TABLE>
<CAPTION>
Number of Shares Percentage
Name of Stockholder Beneficially Owned(2) Beneficially Owned
- -------------------------------------------- -------------------------------------- ----------------------------------
<S> <C> <C>
Steven M. Mizel(1)............................ 273,750 13.7%
Robert A. Arcoro.............................. 37,500 1.8%
Steven Wolosky................................ 30,000 1.5%
All Executive Officers
and Directors as a group
(3 persons)................................... 341,250 17.1%
</TABLE>
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(1) The stockholder's address is 555 Madison Avenue, 17th Floor, New York, New
York 10022.
(2) The shares of Common Stock owned by all of the foregoing have been placed
in escrow with Continental Stock Transfer & Trust Company, as escrow agent,
until May 4, 1997. During such escrow period such persons will not be able
to sell or otherwise transfer their respective shares of Common Stock,
however such persons will retain voting rights with respect to their
shares.
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INTEREST OF CERTAIN PERSONS IN THE DISSOLUTION
In July 1993, RAC issued an aggregate of 500,000 shares of Common Stock
for an aggregate purchase price of $500, or $.001 per share, to its Initial
Stockholders. As of February 28, 1994, such stockholders contributed 125,000 of
such shares to the capital of RAC.
Walker Street has agreed that, until the acquisition of a Target
Business, it will make available to RAC a small amount of office space, as well
as certain office and secretarial services, as may be required by RAC from time
to time. RAC has agreed to pay Walker Street $5,000 per month for such services,
commencing on the date of this Prospectus. Steven M. Mizel, RAC's Chairman of
the Board, President and Chief Executive Officer, is the sole stockholder of
Walker Street. Management believes that the arrangement with Walker Street is on
terms at least as favorable as would be available from an unaffiliated third
party.
Other than the $5,000 per month administrative fee payable to Walker
Street and legal fees payable to Olshan Grundman Frome & Rosenzweig LLP, of
which Steven Wolosky, RAC's Vice President, Secretary, Treasurer and a Director
is a partner, no compensation will be paid to any Initial Stockholder of RAC.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The current directors and executive officers of the Company are as
follows:
NAME AGE POSITION
- ---- --- --------
Steven M. Mizel 56 Chairman of the Board, President
and Chief Executive Officer
Robert A. Arcoro 44 Executive Vice President and
Director
Steven Wolosky 40 Vice President, Treasurer,
Secretary and Director
Steven M. Mizel has been the Chairman of the Board, President and Chief
Executive Officer of the Company since its inception. Mr. Mizel founded and,
since May, 1990 has been Managing General Partner of, Croyden Associates, a
financial advisor to companies undergoing restructurings and bankruptcy
reorganizations. He is also the sole stockholder of Walker Street Investors,
Inc. ("Walker Street"), which provides general financial advisory services. From
1988 until 1990, he was President, Chairman of the Board and Chief Executive
Officer of Kaufmann Alsberg & Co., Inc., a member firm of the New York Stock
Exchange which invested in undervalued companies, companies undergoing
bankruptcy and out of court reorganizations and in proprietary transactions
consisting mainly of merger arbitrage
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and convertible arbitrage. From 1985 until January, 1988, Mr. Mizel was Senior
Executive Vice of MDC Holdings Inc., a New York Stock Exchange listed real
estate, homebuilding and financial services company. From 1977 until 1988, he
held various positions with Mizel Petro Resources, an oil and gas exploration
company which merged with MDC Holdings, Inc. in 1985, serving as its Chairman of
the Board and Chief Executive Officer from 1985 until 1988. In addition, Mr.
Mizel has played significant roles on shareholder and bondholder committees of
companies undergoing both in court and out of court reorganizations. Mr. Mizel
was a co-financial advisor to the unofficial preferred shareholders' committee
of Harcourt Brace Jovanovich, Inc. during its reorganization in 1992, a
co-financial advisor to the unofficial bondholders' committee of Businessland
Inc. during its acquisition by JWP Inc. in 1991, chairman of the official equity
committee of Basix Corporation during its Chapter 11 reorganization held from
1988 through 1990, chairman of the unofficial preferred shareholders' committee
of Southland Corporation during its Chapter 11 reorganization during 1990 and
1991, and a member of the official bondholders' committee of each of Maxicare
Inc. (1989-1990) and Sunshine Precious Metals (1991- 1992) during their Chapter
11 reorganizations.
Robert A. Arcoro has been the Executive Vice President and a Director
of the Company since its inception. Mr. Arcoro is President of Arkaid
Incorporated, a financial advisory and real estate consulting firm which he
founded in July 1985 and which specializes in advising companies undergoing both
in-court and out-of-court reorganizations. Through Arkaid, Mr. Arcoro has
advised the Fleet Financial Group in certain of their investments with troubled
companies and in the Blackstone Group on its investments with real estate
companies which are seeking to restructure. Mr. Arcoro has also advised
Health-Tex Inc. in its corporate reorganization resulting in a cessation of its
retail operations. Prior to founding Arkaid, Mr. Arcoro was a vice president of
Manufacturers Hanover Trust Company where he participated in corporate
reorganizations. Mr. Arcoro received a B.B.A. from Hofstra University and an
M.B.A. from New York University.
Steven Wolosky has been Vice President, Treasurer, Secretary and a
Director of the Company since its inception. He has been a partner of the New
York City law firm of Olshan Grundman Frome & Rosenzweig since January 1987, and
has practiced law since 1980. Mr. Wolosky's current practice includes
restructurings securities law, corporate finance and mergers and acquisitions.
Mr. Wolosky is also Assistant Secretary of Wheeling-Pittsburgh Corp., a New York
Stock Exchange listed company, and a Director of Uniflex, Inc., an American
Stock Exchange listed company. Mr. Wolosky is a member of the bar of the State
of New York and received a B.S. from Brooklyn College and a J.D. from Benjamin
N. Cardozo Law School.
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Restructuring Acquisition Corporation
Proforma Liquidating Balance Sheet
December 31, 1995
(Unaudited)
ASSETS
US Government securities
deposited in trust funds
and accrued interest
thereon 8,555,874
=========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Liquidating distribution to
stockholders 8,555,874(1)
===========
Number of Common Shares
outstanding 1,620,000(2)
===========
Liquidating value per share
at December 31, 1995 $ 5.28
=========
(1) Assumes that upon liquidation, the US government securities deposited in a
trust fund will be returned to investors with accrued interest thereon.
This amount excludes cash and cash equivalents on hand at December 31, 1995
which are expected to be used to settle current and future liabilities of
the company.
(2) Includes only those shares issued in the public offering.
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<PAGE>
MARKET PRICE INFORMATION
Since May 1994, the RAC Common Stock has been listed on the OTC
Bulletin Board. The following table sets forth, for the periods indicated, the
high and low reported closing bids for RAC Common Stock, as reported on the OTC
Bulletin Board. The RAC Common Stock commenced trading on May 4, 1994. The
information with respect to the OTC Bulletin Board reflects inter-dealer
quotations without retail mark-ups, mark-downs or commissions and may not
represent actual transactions.
RAC Common Stock
OTC Electronic Bulletin Board
-----------------------------
High Low
1994:
Second Quarter...................................... 4 1/4 4
Third Quarter....................................... 4 1/4 3 3/4
Fourth Quarter...................................... 4 1/4 3 5/8
1995:
First Quarter....................................... 4 1/2 3 5/8
Second Quarter...................................... 4 11/16 4
Third Quarter....................................... 4 3/4 4
Fourth Quarter...................................... 4 13/14 4
1996:
First Quarter....................................... 5 1/16 4
Second Quarter (through May
31, 1996)...........................................
On May __, 1996 (the last trading day prior to the public announcement
of the dissolution), the high asked and low bid prices of the RAC Common Stock,
as reported on the OTC Bulletin Board were $[4 3/4] and $[4], respectively.
Stockholders are urged to obtain current market quotations.
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<PAGE>
PROPERTIES
Walker Street Investors, Inc. (the "Walker Street"), a company
wholly-owned by Steven M. Mizel, RAC's Chairman of the Board, Chief Executive
Officer and President, has agreed that, until the consummation of the
Dissolution, it will make available to RAC a small amount of office space, as
well as certain office and secretarial services, as may be required by RAC from
time to time. RAC pays Walker Street a fee of $5,000 per month for such
services.
LEGAL MATTERS
The Company is not a party to any legal proceeding.
EXPERTS
The financial statements of RAC as of December 31, 1995 and 1994 and
for each of the periods then ended included herein have been audited by BDO
Seidman LLP, independent public accountants, as indicated in their report with
respect thereto and are incorporated herein in reliance upon the authority of
said firm as experts in accounting and auditing.
MISCELLANEOUS
If the Plan is approved by the stockholders, the Company does
not intend to hold any future annual meetings of stockholders. If the Plan is
not approved by the stockholders, or if, after its approval, the Plan is
abandoned by the Board of Directors, the Company may hold one or more annual or
special meetings in the future. If any stockholder desires to submit a proposal
to be included in the proxy materials for a future meeting of stockholders, such
proposal must be submitted in writing to the Secretary of the Company a
reasonable time before the solicitation of proxies for such meeting is made.
The Board of Directors does not know of any matters to be
presented for consideration at the Special Meeting other than as described in
the Proxy Statement. However, if any other matters are properly presented at the
meeting, it is the intention of the persons named as proxies to vote in
accordance with their judgment on such matters, subject to direction by the
Board of Directors.
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