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Microcap & Penny Stocks : KAFE (Country Star Restaurants) -- Ignore unavailable to you. Want to Upgrade?

To: Harold Feller who wrote (493)	12/29/1997 2:53:00 PM
From: tupac	Respond to of 876

Country Star Restaurants, Inc. Reports on Key Developments at its Las Vegas and Atlanta Restaurants PR Newswire - December 29, 1997 10:57 CAFE %FOD V%PRN P%PRN Jump to first matched term LOS ANGELES, Dec. 29 /PRNewswire/ -- Country Star Restaurants, Inc. (Nasdaq: CAFE) (the "Company") announced important matters involving its Las Vegas and Atlanta restaurants. Las Vegas Restaurant The Company opened its Country Star Las Vegas restaurant on the "Strip" in Las Vegas in July, 1996. The restaurant is owned by a Nevada limited liability company of which the company is the manager and holds the majority interest. The restaurant has suffered operating losses since its opening primarily as a result of customer revenues falling below expectations and unanticipated expenses. Management has taken a number of steps to improve operating results at the restaurant but, to date, operations at the facility remain unsatisfactory. However, the Company's lease of the facility may be of substantial value. Management has investigated assigning or transferring the lease to a third party as a means of realizing revenues from the location. Management has considered other options for the facility which would involve continuing the operations on a joint venture basis with a third party. The Company is currently in arrears in the payment of October, November and December, 1997 rent due under the lease. The aggregate amount of the arrearages are $195,000. The Landlord of the restaurant has served a notice which purports to terminate the lease as of December 22, 1997 for non-payment of rent. The Landlord has agreed not to take any actions to terminate the lease prior to December 24, 1997. Management of the Company negotiated with the Landlord for an agreement under which the Landlord would buy out the remaining term of the lease. If such an agreement had been reached, in all likelihood the Company would have been required to vacate the Premises within a relatively short period of time following the date of the agreement in exchange for a cash payment from the Landlord. In the event that the Company was unable to negotiate a buy out of the remaining lease term with the Landlord, the Company proposed to hire an independent broker to seek a third party who would make a cash payment to the company in consideration for an assignment of the remaining rights under the Lease. Management believes that because of the restaurant's desirable location and the remaining term of approximately eighteen (18) years (including extensions) under the lease, that the lease has significant value to a potential purchaser. Management was unable to reach an agreement with the Landlord and the other members of the limited liability company regarding a buy out of the lease and the Landlord has not agreed to delay its termination of the lease beyond December 24, 1997. In order to preserve its rights under the lease, the Company has caused the limited liability company that operates the restaurant to commence a federal bankruptcy proceeding in order to preserve the remainder of the lease and the rights thereunder as an asset of the limited liability company. Such a bankruptcy proceeding had to be commenced before the legal termination of the lease under Nevada state law in order for the lease and the rights thereunder to remain an asset of the limited liability company. The Company could have avoided the commencement of a bankruptcy petition and preserved its rights under the lease by curing the current arrears of $195,000. The Company did not have the cash to make these payments on behalf of the limited liability company. In view of the continuing operating losses at the facility, management believes the maximum value from this facility can be realized through a sale of the lease in the bankruptcy proceeding rather than through the cure of rent arrearages and continued operations. Atlanta Restaurant The Company's restaurant in Atlanta has been the subject of litigation with the Landlord of the facility since April 1997. In this litigation, the Landlord is seeking to have the restaurant turned over to it on the grounds that the Company is holding over in the premises beyond the term for which they were leased. The Company has been defending the action vigorously. The company's contention has been that many of the Landlord's allegations of default were false, that others which were not false have been cured and that others were directly caused by the Landlord's bad faith in performing its obligations under the lease. The Company also contends that the Notice which purported to terminate the Lease was defective. Rental payments under the lease had been prepaid through December 31, 1997. Additional rent in the amount of $62,500 per month is due and payable commencing January 1, 1998. The Company does not have the cash available to make this January rental payment. In light of the defaults alleged in the litigation and the imminent default of the payment of the January 1998 rent, the Company has determined to offer a settlement of the dispute to the Landlord of the Atlanta facility. Under the terms of the proposed settlement, the company will remove its fixtures and equipment from the premises by January 31, 1998. The Landlord will forgive all past due rents and additional rent. Under the terms of the proposed settlement, the Landlord and the Company will pursue claims against the architect and construction company that designed and built the restaurant facility for negligent design and construction, and related causes of action. The Landlord will advance the legal fees required to pursue these actions. The company and the Landlord are discussing how any recovery in these litigations may be allocated among the company and the Landlord. In taking these actions, Management of the Company has recognized that the development, completion and opening of the Atlanta restaurant as envisioned by prior management was an unsound business decision. The restaurant has never realized the revenues necessary to support its operations. Under the terms of the proposed settlement, Management will no longer be required to spend valuable assets trying to establish a facility that has been performing poorly since it commenced operations. Moreover, the plan to bring legal actions against the construction company and the architect who designed the facility for major construction defects could eventually result in a recovery of damages for the Company. SOURCE Country Star Restaurants, Inc. /CONTACT: Bill Vesterman, Investor Relations of Country Star Restaurants, 213-634-5588/ (CAFE)

To: Harold Feller who wrote (493)	12/29/1997 2:59:00 PM
From: ChrisJP	Read Replies (2) \| Respond to of 876

Hi Harold, David, and others, The info I posted a few posts back is now an official PR release from CAFE. It hasn't appeared on Yahoo yet, but I definitely found it when I connected to www.schwab.com. The bottom line is that they're closing the LV and Atlanta restaurants soon and the only value this company will have is from settlements and lawsuits (if successful). Oh yeah, the Hollywood restaurant is still operating, but Yahoo posters claim that Universal is trying end their lease too. The silver lining is that selling the leases must have been Rubin's plan all along to make money and increase shareholder value. I guess this could still happen. Regards, Chris