i found this. i guess they got to march 10th to find an investor.
if they do find one, what does this mean for those stuck with this stock?? any comments??
Omni is given time to find an investor
Bankruptcy judge extends deadline
Saturday, February 28, 1998
By Lisa Eckelbecker
Telegram & Gazette Staff
SECTION:biz
WORCESTER-- A U.S. Bankruptcy Court judge yesterday gave Omni Multimedia Group Inc. more time to find an investor while reorganizing the company.
ÿ ÿ ÿ ÿ ÿJudge James F. Queenan Jr. approved an agreement allowing Omni to operate until March 10 using cash pledged as collateral to a chief creditor.
ÿ ÿ ÿ ÿ ÿOmni will use the time to negotiate with possible investors. The company's lawyer reported that a deal could be discussed Monday during a negotiation session including Omni managers and representatives of creditors.
ÿ ÿ ÿ ÿ ÿThe court's action essentially extended a previous order that ran out yesterday. In January, Queenan gave Omni until Feb. 27 to use cash collateral while finding a buyer.
ÿ ÿ ÿ ÿ ÿAt that time, Omni reported it was in talks with prospective purchaser Beamscope Canada Inc. But yesterday, Omni Chief Financial Officer Robert E. Lee said those talks ended after Omni's contact at Beamscope, Chief Operating Officer Jim Jameson, left his job.
ÿ ÿ ÿ ÿ ÿLee said Omni has other prospects for investment, but he did not reveal the names of potential investors. Any deal would involve an investment and not a purchase of the company, he said.
ÿ ÿ ÿ ÿ ÿ"We're working with at least five right now," said Lee. "The management of the debtor is confident we will have an offer worth considering."
ÿ ÿ ÿ ÿ ÿOmni and its four subsidiaries filed for Chapter 11 bankruptcy protection in November, reporting assets of about $7 million and liabilities of about $36.6 million. The Millbury-based duplicator and distributor of CD-ROMs and music CDs lost $15.6 million in its most recent fiscal year.
ÿ ÿ ÿ ÿ ÿCoast Business Credit of California, a major creditor that is owed $4.2 million by Omni, consented to yesterday's order giving Omni more time to operate with cash collateral while seeking an investor.
ÿ ÿ ÿ ÿ ÿ"We'd love to save the company if we could, despite its losses," said Lewis A. Sassoon, a lawyer for Coast Business Credit.
ÿ ÿ ÿ ÿ ÿBut Sassoon also said Coast Business Credit does not want the search for an investor to drag on. If Omni does not secure a deal by the deadline, Sassoon said, Coast Business Credit will press to stop Omni from using cash collateral.
ÿ ÿ ÿ ÿ ÿWhile investment discussions go forward, a company that financed Omni's purchase of high tech equipment may not take back the equipment, Queenan ruled.
ÿ ÿ ÿ ÿ ÿAnthony L. Gray, a lawyer for Bombardier Capital Inc., argued that Omni has no prospect of reorganizing and has failed so far to find a buyer. But Queenan rejected Bombardier's arguments, saying that Omni has a reasonable possibility of reorganizing because of discussions with potential buyers.
ÿ ÿ ÿ ÿ ÿAnother creditor, however, prevailed against Omni. AAA Mass Turnpike Warehouse Corp. argued that Omni owed four weeks of back rent totaling $125,000 for use of a building at 50 Howe Ave., Millbury.
ÿ ÿ ÿ ÿ ÿQueenan said that if Omni did not pay the rent, he would lift a stay protecting Omni. The move would have allowed AAA Mass Turnpike Warehouse to begin evicting Omni. Lawyers and managers of Omni agreed to pay the back rent yesterday.
c 1998 Worcester Telegram & Gazette |
