Friday, November 21, 1997
By Chris Pope
Telegram & Gazette Staff
WORCESTER-- Omni Multimedia Group Inc. lives -- at least to the end of
the month.
ÿ ÿ ÿ ÿ ÿThe Millbury-based manufacturer of computer software, which a
week ago filed for Chapter 11 protection against its creditors in U.S.
Bankruptcy Court in Worcester, was given permission yesterday to pay its
employees and continue operating through Dec. 1.
ÿ ÿ ÿ ÿ ÿTo stay in business after that, however, Omni said it will need
the court to approve a $6 million credit agreement it has worked out
with a potential new lender, Virginia-based Allstate Financial Corp.
ÿ ÿ ÿ ÿ ÿThe order signed yesterday by Bankruptcy Court Judge James F.
Queenan Jr. authorized Omni and four subsidiary companies -- Omni
Resources Corp., 4CDs Corp., Mezzoman Production Inc. and Campbell
Products Corp. -- to pay 263 full-time workers and about 60 temporary
workers some $170,000 in wages for last week.
ÿ ÿ ÿ ÿ ÿThe court order also authorized the company to use the
remainder of some $400,000 it has on hand to cover its operating
expenses.
ÿ ÿ ÿ ÿ ÿAllan M. Shine, lawyer for Omni, said the company needed the
court's permission to use its cash in this way because the money was
pledged as part of its collateral for a $4 million loan from Coast
Business Credit of California.
ÿ ÿ ÿ ÿ ÿShine said Coast Business Credit was agreeable to Omni dipping
into Coast's cash collateral so the company can continue operating until
the agreement with Allstate wins court approval. If that happens, said
Shine, Omni will use some of the proceeds of its loan with Allstate to
pay off Coast. Queenan will hear arguments on that proposal at 11:30
a.m. Wednesday. Meanwhile, Shine said, business can go on at Omni.
ÿ ÿ ÿ ÿ ÿ"The important thing for people to know is the company, with
the approval of the court and lender, can meet its payroll and continue
operating in its usual fashion," Shine said.
ÿ ÿ ÿ ÿ ÿ"This is one of those instances where all the parties are in
agreement," said Robert E. Lee, Omni's chief financial officer.
ÿ ÿ ÿ ÿ ÿIn its Chapter 11 filing Nov. 14, Omni and its subsidiaries
reported assets of about $7 million and liabilities of about $36.6
million. For its fiscal year that ended in March, Omni racked up a loss
of $15.3 million.
ÿ ÿ ÿ ÿ ÿThe company wound up on the financial rocks when sales from its
floppy-disk business declined precipitously at the same time it was
spending heavily to get into the CD-ROM business. According to Lee, in
recent months Omni was making strides toward profitability, but was
forced to file for bankruptcy after it had difficulty getting supplies
and was running low on operating cash.
ÿ ÿ ÿ ÿ ÿWith its Chapter 11 filing, the company can continue operating
under the supervision of the bankruptcy court while reorganizing its
finances.
ÿ ÿ ÿ ÿ ÿDespite the company's current difficulties, Lee remained
guardedly optimistic that Omni will eventually make a full recovery.
ÿ ÿ ÿ ÿ ÿ"It (bankruptcy) was something we had to do," Lee told one of
Omni's creditors Omni yesterday, "but if everyone keeps their cool, and
if everyone keeps trucking, we'll come out the other side."
c 1997 Worcester Telegram & Gazette
|
