UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report-May 15, 1997
(Date of earliest event reported)
PEACHES ENTERTAINMENT CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Florida
(State of other jurisdiction of incorporation)
0-12375 59-2166041
(Commission File Number) (I.R.S. Employer I.D. No.)
1180 E. Hallandale Beach Blvd., Hallandale, FL 33009
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (954)454-5554
The exhibit index for this Form 8-K is located at page 7.
PEACHES ENTERTAINMENT CORPORATION
Item 3(b) Bankruptcy or Receivership
A. Confirmation of Plan of Reorganization
On August 5, 1996, Peaches Entertainment Corporation (the "Company") filed
its plan of reorganization with the Bankruptcy Court for the Southern
District of Florida ("Bankruptcy Court"). The Company is a 93.5
percent-owned subsidiary of URT Industries, Inc. (the "Parent"). An amended
plan of reorganization was filed on October 23, 1996. The amended plan of
reorganization, as modified by the Bankruptcy Court's order of January 17,
1997, was confirmed by the Bankruptcy Court on such date (the "confirmation
date") and became effective February 3, 1997 (the "effective date"),
subject to satisfaction of certain conditions which were satisfied by
February 19, 1997. Among the principal terms of the confirmed plan (the
"Plan") are the following:
o All unsecured creditors, including all of the Company's inventory
suppliers, but excluding landlords under leases rejected by the
Company, are entitled to 100 percent of their allowed claims (the
total of which is approximately $4,922,000). The Company's seven
principal suppliers (whose allowed claims total approximately
$4,372,000 out of such $4,922,000) were entitled to and received
payment and inventory returns equal to approximately 70 percent of
their allowed claims (80 percent in the case of one such supplier)
within approximately 60 days after the effective date, and the balance
(approximately $1,284,000) is payable with interest at prime over a
period of 24 months commencing March 1997. The remaining unsecured
creditors (whose allowed claims total approximately $550,000) were
entitled to and received the full amount of their allowed claims on
the effective date. The amounts owed to the principal suppliers are
secured by a perfected first lien and security interest in the
inventory originally distributed by the secured parties which was sold
to the Company or is otherwise in possession and owned by the Company.
o Landlords under the leases rejected by the Company in connection with
the bankruptcy filing were entitled to 30 percent of the allowed
claims with respect to such leases, all of which was paid on the
effective date.
o The mortgage holder will receive 100 percent of the allowed claim,
with interest, in accordance with the amortization schedule previously
in effect, except that the balloon payment on such mortgage which
would otherwise have been due in September 1997 was extended to
September 2002. All mortgage payments under the amortization schedule
were paid timely during the Chapter 11 proceedings.
o The priority tax claim in the approximate amount of $118,000, which is
owed to the Florida Department of Revenue, will be payable with
interest at 8 percent over 2 years from the effective date.
o The priority administrative claims, including professional fees in the
approximate amount of $200,000 which have been incurred in connection
with the reorganization, were paid on the effective date.
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PEACHES ENTERTAINMENT CORPORATION
In order for the Company to be able to effect the Plan of Reorganization on
the terms described above, the Parent, in exchange for the issuance to it
of 20 million shares of the Company's authorized common stock (including
218,730 treasury shares), contributed $350,000 to the capital of the
Company, waived an aggregate of $75,000 of dividends payable by the Company
to the Parent, guaranteed, subject to the terms of the Plan, the
approximately $1,284,000 which is due the principal suppliers in accordance
with the foregoing, and loaned $700,000 to the Company. The loan will be
repaid to the Parent with interest at prime over a period of four years
beginning on the third anniversary of the effective date, is subordinate to
the amounts owed the principal suppliers, and is secured by inventory and
all of the assets of the Company. As a result of the above transactions,
the Parent is the beneficial owner of approximately 93.5 percent of the
Company's issued and outstanding shares of common stock and all of its
issued and outstanding shares of preferred stock.
In March 1997, the Parent and the Company agreed that if the Company's
financial statements for its 1997 fiscal year show total shareholders'
equity of less than $1,000,000, the above-described $700,000 loan would be
reduced by an amount equal to the lesser of $200,000 or the difference
between $1,000,000 and the total shareholders' equity of the Company as of
the end of its 1997 fiscal year, without taking such debt reduction into
account, and cause the amount of such aggregate debt reduction to be
transferred to the capital account of the Company in exchange for shares of
a new class of cumulative preferred stock, entitled Series C preferred
stock, in an amount as shall be determined by dividing the amount of such
aggregate debt reduction by $100. Any Series C preferred stock to be so
issued pursuant to such arrangement will have a par value of $100 and a
cumulative preferred dividend of 10% per annum. The approval of the holders
of a majority of the shares of Series C preferred stock, voting as a
separate class, would be required with respect to all matters on which the
shareholders have a right to vote.
B. Pro Forma Accounting for Reorganization
Set forth in the attached pages is an unaudited pro forma balance sheet as
of December 28, 1996, which gives effect to the reorganization of the
Company as if it had occurred December 28, 1996. The Company's financial
statements will be prepared in accordance with the reporting prescribed by
Statement of Position 90-7 "Financial Reporting By Entities in
Reorganization under the Bankruptcy Code," prepared by the American
Institute of Certified Public Accountants, effective March 31, 1992. The
pro forma balance sheet shows the adjustments to reflect settlement of
allowed claims made to the Company's balance sheet at December 28, 1996, as
set forth in the Company's Quarterly Report on Form 10-Q for that period,
as if the reorganization had occurred on that date. The December 28, 1996
balance sheet should be consulted, together with the notes to the financial
statements and the Company's Annual Report on Form 10-K for the period
ended March 30, 1996, for additional information about the Company's
financial condition and accounting policies. The actual reorganization
adjustments to the Company's balance sheet will be based on the Company's
financial condition as of March 29, 1997 and will be reported in the
Company's Annual Report on Form 10-K for that period.
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PEACHES ENTERTAINMENT CORPORATION
Unaudited Pro Forma
Balance Sheet
December 28, 1996
Reorganization Adjustments
Preconfirmation -------------------------- Pro Forma
Assets December 28, 1996 Debit Credit December 28, 1996
------ ----------------- ----- ------ -----------------
Current assets:
Cash and cash equivalents $2,255,923 350,000 (A) 1,302,656
311,428 (C)
700,000 (D) 1,491,839 (E)
200,000 (F)
Inventories 3,228,724 3,228,724
Prepaid inventory 131,549 131,549
Prepaid expenses and other current assets 307,541 307,541
Refundable income taxes 9,838 9,838
---------------------------------------------------------------------
Total current assets 5,933,575 1,050,000 2,003,267 4,980,308
Property and equipment, net 1,656,147 1,656,147
Other assets 153,202 153,202
---------------------------------------------------------------------
$7,742,924 1,050,000 2,003,267 6,789,657
=====================================================================
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PEACHES ENTERTAINMENT CORPORATION
Unaudited Pro Forma
Balance Sheet (continued)
Reorganization Adjustments
Preconfirmation -------------------------- Pro Forma
Liabilities and Shareholders' Equity December 28, 1996 Debit Credit December 28, 1996
------------------------------------ ----------------- ----- ------ -----------------
Liabilities not subject to compromise
Current liabilities:
Current portion of long-term obligations $ 114,658 59,000 (B) 815,519
641,861 (E)
Accounts payable 909,473 389,927 (E) 1,299,400
Accrued liabilities 1,526,990 118,000 (B) 1,408,990
--------------------------------------------------------------------
2,551,121 118,000 1,090,788 3,523,909
Long-term obligations 724,292 59,000 (B) 1,425,152
641,860 (E)
Deferred rent 185,165 185,165
Due to Parent -- 700,000 (D) 700,000
--------------------------------------------------------------------
Total liabilities not subject to compromise 3,460,578 118,000 2,491,648 5,834,226
Liabilities subject to compromise 3,991,976 600,000 (C) --
3,391,976 (E)
--------------------------------------------------------------------
Total liabilities 7,452,554 4,109,976 2,491,648 5,834,226
--------------------------------------------------------------------
Shareholders' equity:
Preferred stock, $100 par value;
50,000 shares authorized; 5,000 shares
issued and outstanding 500,000 500,000
Common stock, $.01 par value; 40,000,000
shares authorized;39,889,120 shares issued 201,079 200,000 (A) 401,079
Additional paid-in capital 1,284,471 150,000 (A) 1,434,471
Retained deficit (1,635,285) 288,572 (C) (1,320,224)
200,000 (F) 226,489 (E)
--------------------------------------------------------------------
350,265 200,000 865,061 1,015,326
Treasury stock, 107,850 common shares, at cost (59,895) (59,895)
--------------------------------------------------------------------
Total shareholders' equity 290,370 -- 865,061 955,431
Commitments and contingencies
--------------------------------------------------------------------
$ 7,742,924 4,309,976 3,356,709 6,789,657
====================================================================
See accompanying notes to pro forma balance sheet.
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PEACHES ENTERTAINMENT CORPORATION
Notes to Pro Forma Balance Sheet
(Unaudited)
A. The Parent, in partial consideration for the issuance to it of 20 million
shares of the Company's authorized common stock, contributed $350,000 to
the capital of the Company.
B. The priority tax claim amount of $118,000, which is owed to the Florida
Department of Revenue, is payable with interest at 8 percent over two years
from the effective date.
C. Landlords under leases which were rejected by the Company are entitled to
30 percent of $1,038,000 in allowed claims with respect to such leases, all
of which was paid on the effective date.
D. The Parent elected to loan the Company $700,000 on the effective date, and
is guaranteeing $1.3 million of the amounts due to the principal suppliers
after the effective date pursuant to the deferred payment agreements. The
loan will be paid to the Parent with interest at prime over a period of
four years beginning on the third anniversary of the effective date, is
subordinate to the amounts owed to the principal suppliers, and is secured
by inventory and all assets of the Company.
E. All unsecured creditors, including all of the Company's inventory
suppliers, but excluding landlords under leases rejected by the Company,
are entitled to 100 percent of their allowed claims (the total of which is
approximately $4,922,000). The Company's seven principal suppliers (whose
allowed claims total approximately $4,372,000 out of such $4,922,000) were
entitled to and received payment and inventory returns equal to
approximately 70 percent of their allowed claims (80 percent in the case of
one such supplier) within approximately 60 days after the effective date,
and the balance (approximately $1,284,000) is payable with interest at
prime over a period of 24 months commencing March 1997. The remaining
unsecured creditors (whose allowed claims total approximately $550,000)
were entitled to and received the full amount of their allowed claims on
the effective date. The amounts owed to the principal suppliers are secured
by a perfected first lien and security interest in the inventory originally
distributed by the secured parties which was sold to the Company or is
otherwise in the possession or owned by the Company.
F. The priority administrative claims, including professional fees in the
approximate amount of $200,000 which have been incurred in connection with
the reorganization, were paid on the effective date.
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Item 7. Financial Statements and Exhibits
(c) Exhibits required for Form 8-K by Item 601 of Regulation S-K, as indicated
in the Exhibit Table in Item 601.
2. Plan of acquisition, reorganization, arrangement, liquidation or
succession
Debtor's Amended Plan of Reorganization, amended as of October 23,
1996, as modified and confirmed by order dated January 17, 1997 in In
re: Peaches Entertainment Corporation, d/b/a Peaches, Case No.:
96-20153-BICC-RBR, incorporated by reference to Exhibits 1 and 2 to
Peaches Entertainment Corporation's Form 8-K dated April 7, 1997.
4. Instruments defining the rights of security holders, including
indentures
10.64 Peaches Entertainment Corporation Amended Plan of
Reorganization, dated October 23, 1996, incorporated by
reference to Exhibit 1 to Peaches Entertainment
Corporation's Form 8-K dated April 7, 1997.
10.65 Order Confirming Peaches Entertainment Corporation's
Amended Plan of Reorganization, as Modified, dated January
17, 1997, incorporated by reference to Exhibit 2 to Peaches
Entertainment Corporation's Form 8-K dated April 7, 1997.
10.66 URT Promissory Note dated January 27, 1997 made by Peaches
Entertainment Corporation to URT, incorporated by reference
to Exhibit 10.66 to Peaches Entertainment Corporation's Form
10-K dated April 25, 1997.
10.67 Security Agreement dated January 27, 1997 between Peaches
Entertainment Corporation and URT, incorporated by reference
to Exhibit 10.67 to Peaches Entertainment Corporation's Form
10-K dated April 25, 1997.
10.68 Mortgage Agreement with Assignment of Rents, Security
Agreement and Fixture Filing dated January 27, 1997 by
Peaches Entertainment Corporation in favor of URT,
incorporated by reference to Exhibit 10.68 to Peaches
Entertainment Corporation's Form 10-K dated April 25, 1997.
10.69 Reimbursement Agreement dated January 27, 1997 between
Peaches Entertainment Corporation and URT, incorporated by
reference to Exhibit 10.69 to Peaches Entertainment
Corporation's Form 10-K dated April 25, 1997.
10.70 Subordination Agreement dated January 27, 1997 between
Peaches Entertainment Corporation, URT and selected
creditors, incorporated by reference to Exhibit 10.70 to
Peaches Entertainment Corporation's Form 10-K dated April
25, 1997.
10.71 Subordination Agreement dated January 27, 1997 between
Peaches Entertainment Corporation, URT and creditor,
incorporated by reference to Exhibit 10.71 to Peaches
Entertainment Corporation's Form 10-K dated April 25, 1997.
10.72 Surrender and Waiver Agreement dated January 27, 1997
between Peaches Entertainment Corporation and URT,
incorporated by reference to Exhibit 10.72 to Peaches
Entertainment Corporation's Form 10-K dated April 25, 1997.
10.73 Waiver Agreement dated March 1, 1997 between Peaches
Entertainment Corporation and URT, incorporated by reference
to Exhibit 10.73 to Peaches Entertainment Corporation's Form
10-K dated April 25, 1997.
10.74 Stock Purchase Agreement dated March 24, 1997 between
Peaches Entertainment Corporation and URT, incorporated by
reference to Exhibit 10.74 to Peaches Entertainment
Corporation's Form 10-K dated April 25, 1997.
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PEACHES ENTERTAINMENT CORPORATION
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 hereunto duly authorized.
Peaches Entertainment Corporation
Registrant
Date: 5/29/97 /s/ Allan Wolk
--------------
Allan Wolk, Chairman of the Board,
President
(Principal Executive Officer)
Date: 5/29/97 /s/ Jason Wolk
--------------
Jason Wolk, Executive Vice President,
Chief Financial Officer
(Principal Financial and Accounting Officer)