FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
CURRENT REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 27, 1994
KASH N' KARRY FOOD STORES, INC.
(Exact name of registrant as specified in charter)
Commission File No. 33-25261
Delaware 95-4161591
(State of incorporation) (IRS employer identification number)
6422 Harney Road, Tampa, Florida 33610
(Address of registrant's principal executive offices)
(813) 621-0200
(Registrant's telephone number, including area code)
Since May 12, 1994, representatives of Kash n' Karry Food Stores, Inc.
(the "Company") have engaged in discussions with certain holders of the
Company's Senior Floating Rate Notes due August 2, 1996 (the "Old Senior
Floating Rate Notes"), its 12 3/8% Senior Fixed Rate Notes due February 1,
1999 (the "Old Senior Fixed Rate Notes"), and its 14% Subordinated Debentures
due February 1, 2001 (the "Old Subordinated Debentures"), (those holders being
hereinafter referred to as the "Unofficial Bondholders' Committee"), with
respect to a proposed capital restructuring of the Company.
On July 27, 1994, the Company and the Unofficial Bondholders' Committee
agreed in principle to the restructuring of the Company (the "Restructuring"),
which would be implemented through the consummation of a "prepackaged" plan of
reorganization under Chapter 11 of the Bankruptcy Code (the "Plan"). Under
the agreement in principle, which was memorialized by a term sheet circulated
among the Unofficial Bondholders' Committee, upon confirmation of the Plan:
(1) Each $1,000 principal amount of the Company's Old Senior Floating
Rate Notes would be exchanged for (a) new Senior Floating Rate Notes due
December 31, 2002 (the "New Senior Floating Rate Notes") in an original
principal amount equal to $1,000 plus 100% of the accrued interest under the
Old Senior Floating Rate Notes from and including February 3, 1994, through
but not including the petition date, or, at such holder's election, (b) new
11.5% Senior Fixed Rate Notes due December 31, 2002 (the "New Senior Fixed
Rate Notes") in the same original principal amount;
(2) Each $1,000 principal amount of the Company's Old Senior Fixed
Rate Notes would be exchanged for (a) New Senior Floating Rate Notes in an
original principal amount equal to $1,000 plus 100% of the accrued interest
under the Old Senior Fixed Rate Notes from and including February 2, 1994,
through but not including the petition date, or, at such holder's election,
(b) New Senior Fixed Rate Notes in the same original principal amount;
(3) the Old Subordinated Debentures would be exchanged for
newly-issued common stock of the Company representing 85 percent of the common
stock to be outstanding on the effective date of the Plan (the "Effective
Date");
(4) Green Equity Investors, L.P., would invest $10 million cash in
exchange for newly-issued common stock of the Company representing 15 percent
of the common stock to be outstanding on the Effective Date;
(5) all of the existing preferred stock, common stock, and options
and warrants to purchase common stock of the Company would be extinguished;
and
(6) the rights of trade creditors and other secured creditors of the
Company would be unimpaired.
The Company intends to solicit acceptances of the Plan from all creditors
that would be impaired under the Plan. If, as a result of such solicitation,
the voting requirements prescribed by Section 1126 of the Bankruptcy Code are
satisfied, the Company intends to file with the Bankruptcy Court a voluntary
petition for reorganization under Chapter 11 of the Bankruptcy Code, and to
seek, as promptly thereafter as is practicable, confirmation by the Bankruptcy
Court of the Plan.
Consummation of the Restructuring will be subject to a number of
contingencies, including confirmation of the Plan by the Bankruptcy Court, and
there can be no assurance as to when the Restructuring will be consummated, or
whether it will be consummated as contemplated in the agreement in principle.
On July 27, 1994, the Company obtained a commitment from BankAmerica
Business Credit, Inc. to provide the Company with debtor-in-possession
financing in the form of a revolving credit facility of up to $40 million,
subject to certain terms and conditions. There can be no assurance that the
Bankruptcy Court will approve the debtor-in-possession financing.
As part of the Restructuring, Ronald J. Floto was replaced as Chairman of
the Board, Chief Executive Officer and President of the Company, effective as
of August 1, 1994. Anthony R. Petrillo succeeds Mr. Floto as acting Chairman
of the Board and acting Chief Executive Officer of the Company, and Thomas A.
Whipple, already Executive Vice President-Marketing, was appointed Chief
Operating Officer of the Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KASH N' KARRY FOOD STORES, INC.
/s/ Richard D. Coleman
Richard D. Coleman
Vice President, Controller
and Secretary
DATED: August 11, 1994