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EXHIBIT 99.1
For Immediate Release Contact: Marilyn R. Marks
(770) 438-9595
DORSEY TRAILERS ANNOUNCES FURTHER
ACTIONS UNDER BANKRUPTCY
ATLANTA, GEORGIA, January 8, 2001 - As previously announced on December 5th and
29th of 2000, Dorsey Trailers, Inc. (the "Company") filed a voluntary petition
for Relief under the provisions of Chapter 11 of the U.S. Bankruptcy Court for
the Middle District of Alabama, Montgomery, Alabama (Bankruptcy Case No.
00-6792-WRS). Chapter 11 allows the Company to remain debtor-in-possession of
its assets and business while being subject to the supervision and orders of the
Bankruptcy Court for certain transactions or actions. Pursuant to the Bankruptcy
Code, the Company, as debtor and debtor-in-possession, will continue to manage
and operate the assets and business, pending the confirmation of a plan of
reorganization and subject to the supervision and orders of the Bankruptcy
Court.
The Company has reached an agreement with Foothill Capital Corporation, the
lender under the Company's existing working capital credit facility for limited
use of cash collateral to fund on-going operations as allowed in the agreement.
The current agreement was accepted on January 3, 2001 and expires on March 3,
2001. The cash collateral agreement provides certain measurements that the
Company must meet in order for the agreement to continue until March 3, 2001;
the conditions include but are no limited to meeting certain dollar amount loan
balances with Foothill Capital Corporation during the duration of the agreement.
The prior cash collateral agreement with Foothill Capital Corporation expired on
January 3, 2001.
On December 28, 2000, the Company entered into an exclusive agreement with
Equity Partners of Maryland ("EPI"), an enterprise specializing in turnarounds,
sales and refinancings, and liquidations of financially troubled companies. The
agreement provides for EPI to assist the Company in refinancing or efforts to
seek a joint venture partner, sell, lease or otherwise dispose of the Company's
business as a going concern and/or some or all of the Company's interest in the
assets of the debtor's estate. This exclusive agreement expires sixty days from
its approval by the U.S. Bankruptcy Court.
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Marilyn R. Marks, Chairman of the Board of Directors of the Company issued the
following statement: "We are pleased that the Company was able to reach an
agreement with Foothill Capital for limited use of the cash collateral to fund
on-going operations. The Company believes that this agreement will provide the
best method to maximize the value of the Company and its assets. Additionally,
although our desire was to continue the Company as an on-going operation, we
must explore all aspects of maximizing the value of the Company; as such, the
Company believes the best method to do this is the retention of EPI to explore
the sale of the Company in whole as an on-going operation or to sale the
individual assets of the Company. As we have previously stated, if a sale of the
Company's assets is required, it is unlikely that the Company will be able to
obtain their true market value due to the severe downturn in the trailer
manufacturing industry. Accordingly the proceeds of a sale of the assets of the
Company after payment of secured creditors and administrative claims would not
be sufficient to satisfy all of the unsecured creditors. As such, there would
then be nothing available for distribution to the Company's stockholders."
Dorsey Trailers, Inc. was in the business of designing, manufacturing, and
marketing one of the broadest lines of high quality, customized truck trailers
through three plants located in Alabama, Georgia, and South Carolina.
Certain statements in this press release and statements by the Company in
reports to its stockholders and public filings, as well as, oral public
statements by Company representatives may be deemed to be forward-looking
statements, as defined by the Private Securities Litigation Reform Act of 1995.
Any forward-looking statements included herein have been included based upon
facts available to management as of the date of the statement. Any
forward-looking statement is, however, inherently subject to the uncertainty of
future events, whether economic, competitive or otherwise many of which are
beyond the control of the Company, or which may involve determinations, which
may be made by management in the future. There can, therefore be no assurances
that the events or results described in such forward-looking statements will
occur and actual events or results may vary materially from those included
herein.
Without limitation, the following are some of the factors which may affect
whether the events or results described in such forward-looking statements will
occur: whether there is an approved plan of reorganization in which the Company
continues as an ongoing operation, continued availability of credit from
vendors, and continued use of cash collateral by lender. Readers should review
and consider the various disclosures made by the Company in this press release
and it reports to stockholders and reports filed with the Securities and
Exchange Commission.
