Subject: News Article 1/30/98
Date: Fri, Jan 30, 1998 08:12 EST
From: JBLACK627
Message-id: <19980130131201.IAA27117@ladder03.news.aol.com>
Here's another article from Worcester's Telegram and Gazette for Friday, 1/30/98:
Omni allowed to retain equipment
Friday, January 30, 1998
By Chris Pope
Telegram & Gazette Staff
WORCESTER-- Creditors of Omni Multimedia Group Inc. cannot remove
equipment from the company's Millbury plant.
ÿ ÿ ÿ ÿ ÿBut Omni, which filed for Chapter 11 bankruptcy protection Nov.
14, must make payments to the creditors to protect them against the
equipment's loss of value through depreciation.
ÿ ÿ ÿ ÿ ÿIn an order issued Wednesday, U.S. Bankruptcy Court Judge James
F. Queenan Jr. said he will allow Omni to make immediate payments
totaling $59,518 to three companies, Bombardier Capital Inc., CIT
Group/Equipment Financing and Textron Financial Corp., which financed
Omni's purchase of high-tech machinery used in its operations. Omni must
also make weekly payments totaling $9,921 to the three creditors while
it attempts to find a buyer for its business of duplicating and
distributing CD-ROMs and music CDs.
ÿ ÿ ÿ ÿ ÿOmni's search for a buyer intensified this week following court
approval on Monday of a deal between the company and its chief creditor,
Coast Business Credit of California, under which Omni promised to find a
buyer for its business by Feb. 27. In return, Coast Credit, to which
Omni owes $4.2 million, will allow Omni to continue operating with money
pledged as collateral to Coast. Also on Monday, however, Queenan lifted
an order that prevented the three financing companies from repossessing
their equipment.
ÿ ÿ ÿ ÿ ÿIn a motion filed Wednesday, Omni lawyers argued that removing
the machinery from Omni's Millbury plant would force the company to shut
down and lay off its work force of 250. That would make it impossible
for Omni to be sold as an operating company, the lawyers said. Queenan's
order requiring Omni to make payments to the financing companies was
issued without comment.
ÿ ÿ ÿ ÿ ÿIn its motion asking Queenan to bar the financing companies
from removing their equipment, Omni lawyers said sales talks are
currently being held with several groups interested in acquiring the
company as a going concern.
ÿ ÿ ÿ ÿ ÿRobert E. Lee, Omni executive vice president and chief
financial officer, said yesterday that, while Omni will entertain any
and all offers to invest in or purchase the company, at the moment the
most likely prospect is Beamscope Canada Inc., a Toronto-based
distributor of video games, computer software, personal computers,
printers and satellite television systems.
ÿ ÿ ÿ ÿ ÿLee said talks with Beamscope are centering around the Canadian
company's taking an investment interest in Omni rather than purchasing
it outright. Under that arrangement, Lee said, he and Omni President and
Chief Executive Officer Paul F. Johnson would continue as the company's
managers.
ÿ ÿ ÿ ÿ ÿ"We would run it. We're not going anywhere," Lee said.
ÿ ÿ ÿ ÿ ÿAlthough Omni's agreement with Coast Credit calls for Omni's
sale, Omni attorney Alan Shine said the final arrangement could be
shaped differently.
ÿ ÿ ÿ ÿ ÿ"How the deal is structured, whether as a sale, merger or as an
investment, is not set in concrete," he said. "Coast has indicated that
it wants something along those lines, but all the parties have said they
are flexible."
ÿ ÿ ÿ ÿ ÿShine said Coast has also indicated it has no objection to Omni
using cash pledged to Coast to make payments to the equipment
financiers. Coast lawyer Patrick Waters did not return a phone call
yesterday, but Waters said Monday that allowing Omni to keep operating
while it finds a buyer appears to give Coast its best chance of being
repaid.
ÿ ÿ ÿ ÿ ÿAs part of Monday's agreement with Coast, Omni said it would
hire a crisis management firm to oversee its operations while it seeks a
purchaser. Lee said yesterday that Omni has hired the crisis management
firm, Gerbsman Partners of Kentfield, Calif. He said a representative of
the firm will arrive at Omni headquarters Monday. Lee said that, in
addition to helping Omni with its day-to-day operations, the consulting
firm's contacts in the credit markets should be of assistance to Omni in
its quest for an investor.
ÿ ÿ ÿ ÿ ÿAlso yesterday, Lee reported the cancellation of a meeting
scheduled for Tuesday between Omni management and a stockholder group
pushing for removal of Omni management.
ÿ ÿ ÿ ÿ ÿIn a statement issued yesterday, the group's head, Peter J.
Hurley, managing partner of Harrison Hurley and Co. of Providence, said
he is encouraged by the news that Omni is looking for a buyer but wants
to see the company under new management.
ÿ ÿ ÿ ÿ ÿ"We look forward to any and all bids made for the purchase of
the company," Hurley said. "We are still interested in the viability of
the company under new management and hope to participate in any new
structure."
c 1997 Worcester Telegram & Gazette
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