1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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
------------------------------------
JULY 12, 1999 (JUNE 25, 1999)
Date of Report (Date of earliest event reported)
------------------------------------
PHILIP SERVICES CORP.
(Exact name of Registrant as specified in its charter)
ONTARIO 0-20854 NOT APPLICABLE
(State or other jurisdiction (Commission File Number) (IRS Employer Identification
of incorporation) No.)
100 KING STREET WEST,
P.O. BOX 2440, LCD1,
HAMILTON, ONTARIO, CANADA
L8N 4J6
(Address of principal executive offices, including zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (905) 521-1600
N/A
(Former name or former address, if changed since last report.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2
ITEM 3. BANKRUPTCY AND RECEIVERSHIP
On June 25, 1999, Philip Services Corp. (the "Company") filed a voluntary
application to reorganize under the Companies' Creditors Arrangement Act with
the Ontario Superior Court of Justice in Toronto, Canada, and voluntary
petitions under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy
Court for the District of Delaware. On June 27, 1999, the Company obtained First
Day Orders under Chapter 11 of the U.S. Bankruptcy Code from the U.S. Bankruptcy
Court for the District of Delaware. A confirmation hearing to confirm the
Company's plan of reorganization is scheduled for October 13, 1999 at the U.S.
Bankruptcy Court for the District of Delaware.
The Company has entered into an amended lock-up agreement with its
syndicated lenders pursuant to which approximately US$1 billion in existing
syndicated debt will be converted into US$250 million of senior secured debt,
US$100 million in secured convertible payment-in-kind debt and 91% of the common
shares of the restructured Company. Holders of impaired unsecured debt will
receive unsecured payment-in-kind notes and 5% of the common shares of the
restructured Company. The Company has also reached an agreement in principle
with Canadian and U.S. class action plaintiffs to settle all class action claims
for 1.5% of the common shares of the restructured Company. This agreement is
subject to final documentation and the approval of the Courts. Other potential
equity claims will receive 0.5% of the common shares of the restructured Company
and existing shareholders will retain 2% of the common shares of the
restructured Company.
Both Canadian and U.S. subsidiaries of the Company are authorized to
continue to meet their financial obligations with respect to salaries and
benefits, and pre-filing and post-filing obligations to on-going trade suppliers
provided that such suppliers agree to provide goods and services on the same
terms as those that were in effect prior to the filing. The Company has access
to proceeds remaining from previous sales of non-core assets of approximately
US$40 million. The Company has limited access to the debtor-in-possession
financing of US$100 million until the Company utilizes all cash proceeds
available from the sale of assets.
A copy of the amended lock-up agreement between the Company and its
syndicated lenders is attached hereto as Exhibit 2.1. Copies of the press
releases announcing the filings in the United States and Canada and the granting
of First Day Orders by the U.S. Bankruptcy Court for the District of Delaware
are attached hereto as Exhibit 99.1 and 99.2, respectively.
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
2.1 Amended Lock-up Agreement dated as of June 21, 1999 among
Philip Services Corp. and certain lenders of Philip Services
Corp.'s lending syndicate
99.1 Press release dated June 25, 1999
99.2 Press release dated June 28, 1999
2
3
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.
PHILIP SERVICES CORP.
/s/ COLIN H. SOULE
By:
--------------------------------------
Executive Vice President, General
Counsel and Corporate Secretary
Dated: July 12, 1999
3
4
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
2.1 Amended Lock-up Agreement dated as of June 21, 1999 among
Philip Services Corp. and certain lenders of Philip Services
Corp.'s lending syndicate
99.1 Press release dated June 25, 1999
99.2 Press release dated June 28, 1999
4