from aol
Subject: News Article 1/27/98
Date: Tue, Jan 27, 1998 08:38 EST
From: JBLACK627
Message-id: <19980127133800.IAA05527@ladder02.news.aol.com>
Here's another news article from the Worcester MA's Telegram and Gazette. Let it speak for itself:
Omni agrees to find buyer by Feb. 27
Tuesday, January 27, 1998
By Chris Pope
Telegram & Gazette Staff
WORCESTER-- Beleaguered Omni Multimedia Group Inc. has until Feb. 27 to
find a buyer as a result of an agreement worked out yesterday between
the company and its chief creditor.
ÿ ÿ ÿ ÿ ÿThe deal came after two hours of negotiations between
representatives of Coast Business Credit of California and the
Millbury-based duplicator and distributor of CD-ROMS and music CDs.
Omni, which filed for bankruptcy protection against its creditors Nov.
14, owes Coast Credit $4.2 million.
ÿ ÿ ÿ ÿ ÿIn its Chapter 11 bankruptcy filing, Omni and its four
subsidiaries, Omni Resources Corp., 4CDs Corp., Mezzoman Production Inc.
and Campbell Products Corp., reported assets of about $7 million and
liabilities of about $36.6 million. For its most recent fiscal year, the
company reported a loss of $15.6 million.
ÿ ÿ ÿ ÿ ÿU.S. Bankruptcy Court Judge James F. Queenan Jr. approved the
terms of the deal, which allows Omni to continue operating through Feb.
27 using money pledged as collateral for its debt to Coast. In exchange
Omni must have a firm purchase offer by that date.
ÿ ÿ ÿ ÿ ÿIn the interim, the company must hire a crisis management firm
to oversee its day-to-day operations. Omni has been operating with the
assistance of consultants Ronald Lang & Associates of Sharon since last
month, but Omni officials indicated yesterday that Lang & Associates
will be replaced.
ÿ ÿ ÿ ÿ ÿRobert E. Lee, Omni's chief financial officer, said current
management will remain in place while the company tries to find a buyer.
Lee said he is aware of five companies who have expressed interest in
buying Omni, but would name only one: Beamscope Canada Inc., whose
executive vice president and chief operating officer, Jim Jameson,
accompanied Lee to court yesterday.
ÿ ÿ ÿ ÿ ÿAccording to Jameson, officials from Omni and Beamscope began
talking about 10 days ago, but at this point, he said, nothing
definitive has been decided. Beamscope, which is publicly traded,
distributes video games, computer software, personal computers, printers
and satellite television systems to more than 6,000 retail locations in
Canada. The company also has operations in South America, and, according
to Jameson, is looking to get involved in the United States.
ÿ ÿ ÿ ÿ ÿCoast Credit lawyer, Patrick Waters said that, at least at this
point, providing Omni the opportunity to find a buyer appears to give
Coast its best chance of being repaid by Omni. But Waters said if Omni
does not a have a buyer in hand by the end of February, Coast would ask
the bankruptcy court to lift its order allowing the company to continue
operating with cash collateral promised to Coast.
ÿ ÿ ÿ ÿ ÿNot party to yesterday's agreement was a group of creditors
from whom Omni has financed the purchase of high technology equipment
used in the company's operations. In yesterday's hearing, Judge Queenan
cleared the way for the creditors to ask the state court for permission
to repossess equipment securing their loans. Lawyers for the creditors
did not say how they plan to proceed.
ÿ ÿ ÿ ÿ ÿAlso unknown yesterday was the reaction of a shareholders'
group that is pushing for the removal of Omni top management. The group,
led by Peter J. Hurley, managing partner of Harrison, Hurley and Co., a
Providence-based consulting firm that specializes in turning around
troubled companies, could not be reached for a comment on the company's
announcement that it would put itself up for sale.
ÿ ÿ ÿ ÿ ÿTrading in the company's stock, which is listed on the American
Stock Exchange, was suspended when the company filed for bankruptcy.
c 1997 Worcester Telegram & Gazette
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