ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, September 25, 1996 TAG: 9609250067
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
Best Products Co., a discount chain operating a store in Roanoke, filed Tuesday for bankruptcy reorganization and protection from creditors, its second such action in the last five years.
The petition was filed in bankruptcy court in Richmond, where Best has its headquarters.
The company also announced it had obtained $250 million in credit from CIT Group/Business Credit Inc., subject to approval by the bankruptcy court. It said the credit will help restore merchandise shipments, allowing it to stock and sell during the Christmas retail season.
Best emerged from reorganization in June 1994 after a filing in January 1991. The company's financial troubles date from 1988 when it was saddled with heavy debt during a leveraged buyout.
Miami-based Ocean Reef Management had considered offering $2 a share to acquire Best, but last week withdrew the proposal saying the takeover required greater resources that it originally thought. Best's stock fell 58 percent on that news.
Tuesday's filing was announced after the market closed. Best stock, which trades on the Nasdaq stock market, closed Tuesday at 34 cents a share, down 22 cents.
Best Chairman Daniel Levy said the new bankruptcy filing was necessary to continue shifting from a catalog showroom to a more traditional retail format. During that process, he said, Best experienced "continuing sales decline and resulting deterioration of vendor support." The filing, he said, will give the company time to complete its transformation.
Best operates 169 stores in 23 states. It lost $95.7 million last year.
LENGTH: Short : 38 linesby CNB