This is from the November 14 8-K form.
On November 14, 1996, Discovery Zone, Inc. and nineteen
subsidiaries (collectively, "Discovery Zone") and Birch
Holdings L.L.C. ("Birch"), the largest senior unsecured
creditor of Discovery Zone, filed a Joint Plan of
Reorganization (the "Joint Plan") for Discovery Zone, pursuant
to which Birch would become Discovery Zone's controlling
stockholder. The Joint Plan is subject to approval by the
United States Bankruptcy Court for the District of Delaware
(the "Bankruptcy Court").
Under the Joint Plan, holders of Discovery Zone's bank debt,
holders of certain general unsecured claims, and holders of
Discovery Zone's Liquid Yield Option Notes would receive 100%
of the common stock of the reorganized Discovery Zone in
exchange for their claims, and Discovery Zone's existing
common stock would be extinguished. Certain trade creditors
which agree to provide goods or services to Discovery Zone on
credit after it emerges from its chapter 11 proceeding may
elect to receive a cash distribution in exchange for their
claims.
The Joint Plan was filed without an accompanying disclosure
statement (the "Disclosure Statement") pursuant to an order
(the "Order") of the Bankruptcy Court. The Order also extended
the period within which Discovery Zone is permitted to file
the Disclosure Statement with the Bankruptcy Court until
November 27, 1996.
I may have missed something but this sounds like current stockholders
are out in the cold.
Louis DeMartini |
