Bankruptcy Court Judge Barry Schermer gave preliminary approval Wednesday to a $45 million financing package for Falcon Products Inc. of Olivette. The package will help the bankrupt commercial furniture maker continue to operate normally during the bankruptcy proceedings. On Monday, Falcon filed for Chapter 11 bankruptcy here after defaulting on a $100 million bond issue last month. The company has reached an agreement in principle with key creditors that converts $145 million of debt into equity and leaves suppliers untouched by the bankruptcy. However, any final restructuring plan will require court approval. Falcon is a leader in its particular markets, building furniture and fixtures for such companies as McDonald's Corp. and Hilton Hotels Corp. But it has struggled during the last three years because of slumping demand from the hospitality industry, costly downsizing of its manufacturing capacity and heavy debt burden. Falcon hasn't yet released results for fiscal 2004, though the company estimates it lost $30 million. - Greg Cancelada
newbobn: I do not dispute what you say. But this is not really an investment question. It is outright speculation about which NOBODY really knows. The stock may have gone up because of people covering short sales. And my guess is that it will still end up worthless. Your odds would probably be better in Vegas. I wouldn't beat myself up about it if I were you.
So where are we?; We have 6 domestic plants closed in 5 years. Consolidated to Morristown and Newport. China is picking up the Belmont work. Mexico is humming and turning out there ill-fitting parts as they have always done. The Slovaks are running and exporting parts to Falcon. So what is wrong with this scenario? As I see it judged by contemporary corporate standards. All is fine. We on this board can't understand it. It seems wrong to us. But it seems right to them, including the bankers. newbob
The Canton Auction; We probably had 40-60 buyers. I of course was one. This was new to me and I was naieve. Had I known what was about to transpire I would have made alliances with certain parties and made some of the big bucks. All of the Fabric in plant 2 sold for $500 bucks. The Gerber Cutting table ($200,000) sold for $800 bucks and the Gerber plotter ($40,000) sold for $500 bucks. Machines went mostly for $50 to $150 bucks a pop. Everything went for pennies on the dollar or less. Belmont cleared $100,000 dollars and Canton didn't. It was a picnic for the buyers. Too late I learn these things. newbob-part4
Table Maker, very interesting information you posted. According to the new agreement, that would save FCP $17 million of debt off their balance sheet. So if they lost $30 million then that means next year they will only lose $13 million. I'm sure they can get it down to $12 million of loss, if Frank no longer travels first class and stays at the Four Seasons'!
We all know that they will continue to lose market share and that other companies have stepped up to the plate and have filled the Falcon vacuum. This is a company of losers put specifically together by Frank and Steve who haven't a clue as to how to "horse trade" to get the business.
From my perspective, I'm getting a kick out of Frank's "creative financing." Wonder what his next move will be when he can't meet the judges term for solvency?
In other areas, Table, how does that affect the stock? Is the stock worthless and written off in reorganization?