THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Thursday, September 15, 1994 TAG: 9409150406
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Short : 43 lines
Essex Financial Partners L.P., which announced in July that it agreed to settle a class-action suit filed by disgruntled investors, said a federal court in Texas has approved a proposed settlement.
The investors' alleged that they suffered financial damage from decisions by the partnership's previous managing partner, who was replaced in 1992.
Essex, the Virginia Beach-based parent of Essex Savings Bank, said certain transactions in the settlement will be finalized by late October unless the court's approval order is appealed.
One of those transactions involves extinguishing $20.5 million of debt owed by Essex Financial Partners to the securities firm PaineWebber Inc. The Essex debt to PaineWebber was part of a financial restructuring that the partnership undertook during 1993.
PaineWebber underwrote the initial public offering of Essex partnership units in 1989 and sold some of the units to its clients.
Essex said it expects the elimination of this debt to increase the partnership's book value to $12 million from an existing deficit of $5.7 million. Wiping out that debt will provide its partnership units with a per-share book value of $5.73, compared with their current deficit of $2.55, Essex said.
The court-approved agreement also calls for Essex to issue new preferred shares to holders of its partnership units and to some former holders.
In addition, Essex said it has filed with the Securities and Exchange Commission to reorganize the partnership into a publicly traded company and to exchange new common shares for the partnership's units.
Essex, which has been engaged in a lengthy restructuring effort, said it expects to raise additional capital through a rights offering that likely will begin late this year.
KEYWORDS: CLASS ACTION SUIT SETTLEMENT
by CNB