Graham-Field Health Products to Voluntarily Reorganize Under Chapter 11; Company Obtains Debtor-in-Possession Bank Financing for $38.75 Million
New Chief Executive Officer Named
BAY SHORE, N.Y., Dec. 27 /PRNewswire/ -- Graham-Field Health Products, Inc. (OTC Bulletin Board: GFIH), today announced that the Company and certain of its subsidiaries filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the District of Delaware. Prism Enterprises, a Graham-Field subsidiary in San Antonio, Texas, did not file a petition for bankruptcy.
The Company also announced that, as a result of the filings, it has been able to secure a commitment for a Debtor-in-Possession (DIP) credit facility for up to $38.75 million. The financial institutions providing the credit facility include IBJ Whitehall Business Credit Corporation, Deutsche Financial Services Corporation, PNC Bank, NA and National City Commercial Finance, Inc. The DIP facility, which is expected to receive preliminary court approval tomorrow, will provide the Company with the liquidity to pay its suppliers for post-petition goods and services, and to pay employees without disruption. The Company anticipates that the DIP facility will provide sufficient liquidity to carry it through the completion of its debt restructuring.
"We have the financing in place to continue to operate the business," said Mr. Thomas J. Opladen, Chairman of the Graham-Field Board of Directors. "Today's filing will have no effect on our ability to manufacture or distribute our products. For our customers and suppliers, the filing will make it easier to do business with the Company," said Mr. Opladen.
The Company also today announced the appointment of David A. Hilton as President and Chief Executive Officer. Mr. Hilton specializes in start-up and turnaround enterprises. Most recently, he turned around J.E. Morgan Knitting Mills, the largest manufacturer of thermal underwear in the country.
Mr. Hilton replaces John G. McGregor, who resigned. The Company also announced that Robert J. Gluck, its Chief Financial Officer, resigned his position and that a search would be conducted for his replacement. Both Mr. McGregor and Mr. Gluck are members of the professional management firm of Jay Alix and Associates, which will provide a smooth management transition.
As part of the filing, the Company will request from the court various measures to provide for the effective operation of the Company. These include measures to assure that the filing will have no effect on the payment of salaries, wages and benefits to the Company's employees. The Company will also request approval of a program to retain key personnel.
To assist the Company in executing its restructuring strategies, the Company has retained the firm of Rothschild Inc. to provide investment-banking services. |
