DJ Clancey wrote:
>I thought they were long beyond chapter 11 and had been dissolved and >liquidated. Are you implying that there could be future business under the PNII >name? Would they retain rights to such items as Plex?
How could a $2M settlement in favor of PNII be awarded if PNII
no longer exists?
Future business would be conducted under a name existant with the
present entity or shell. Whether the name "Performance Nutrition"
is retained would be up to the corporate officer(s) in charge
of marketing with possible vote by the BOD's.
Trade marked names such as "Plex" would still be owned if not
previously sold.
Please read again the 8K:
>Item 5. OTHER EVENTS from 8k filed 7/9
>As reported previously, a civil judgment (the "Judgment") in the amount
>of $2,744,000 was entered in March, 1999 against Naturade, Inc. ("Naturade") >by
>the United States Bankruptcy Court for the Northern District of Texas >following
>a bench trial in a proceeding styled Jeffrey H. Mims, Chapter 7 Trustee v.
>Kennedy Capital, et al. The proceeding arose out of the bankruptcy case of
>Performance Nutrition, Inc. ("PNI"), on whose behalf the Trustee was acting (the "PNI Trustee").
>Naturade and the PNI Trustee have entered into a settlement agreement,
>which is subject to approval by the Bankruptcy Court. On July 7, 1999, the PNI
>Trustee filed an application seeking Bankruptcy Court approval of the settlement
>agreement. If approved, the settlement agreement will provide Naturade with a
>full release of the Judgment and the costs and interest thereon, as well as any
>and all other claims which the PNI Trustee has or might have against Naturade
>(including a preference claim for approximately $130,000 filed in January 1999
>by the PNI Trustee against Naturade). The settlement agreement requires >Naturade
>to deliver to the PNI Trustee (1) a cash payment of $1,350,000, (2) a >promissory
>note in the amount of $424,000 amortized over 12 months at 5% interest, and >(3)
>a contingent promissory note in the amount of $226,000, which will become
>payable only to the extent that Naturade's sales for the second, third and
>fourth quarters of 1999 exceed specified targets. The total cost to Naturade of
>the settlement is expected to range between $1,774,000 and $2,000,000, >exclusive of interest on the promissory notes.
Now, the issue that would have prevented the payment to PNII would
have been the insolvency of Naturade; and Naturade just received
a $4M infusion of cash, half of which is earmarked for the PNII
settlement:
>IRVINE, Calif., August 16, 1999 (PRIMEZONE) -- Naturade, Inc. >"OTCBB:NRDC" today announced Health Holdings and Botanicals, Inc.
>will invest $4 million in the company.
>Naturade said the proceeds will be used to fund the recently announced >settlement of litigation in Texas of approximately $2 million and for working >capital.
>Health Holdings and Botanicals, Inc. is a consortium of investors led by the Doyle & >Boissiere Fund, LLC, an equity investment fund headquartered in Burlingame, CA, >which, prior to the new financing, owns 55 percent of Naturade, Inc.
>The investment will be for convertible debt with an annual eight percent coupon >maturing on July 31, 2004. Cash will be infused in two drawdowns of $3 million, >which occurred on August 9, 1999 and $1 million to be drawn down at a later date. >Any portion of the cash advances may be converted into shares at a conversion price >of $0.75 per share, or at the fair market value of Naturade's common stock on the >date of notice by Health Holdings.
>Lionel P. Boissiere, Jr., President of Health Holdings and Botanicals, said, ''This >additional investment in Naturade is a strong vote of confidence in the company's >strategy, its management and its strategic new products and packaging. With the >introduction recently of The Chinese Way line of herbs and a new marketing program, >as well as the management team, we believe that Naturade is clearly on track for >recovery.''
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