Western Union Parent Files for Bankruptcy to Restructure Company
Apr. 01, 1993
UPPER SADDLE RIVER, N.J. (AP) _ New Valley Corp., the parent company of Western Union, said Thursday it has agreed to file for bankruptcy after reaching an agreement with major creditors on debt-restructuring terms.
New Valley's total liabilities are approximately $800 million, which includes unfunded liabilities from the company's pension plan; public debt, such as debentures and notes; and various other liabilities, said spokesman Warren Bechtel.
The company had revenues of $449 million and a net loss of $19.9 million, or 43 cents a share, in 1992, compared with revenues of $426 million and a net loss of $32.1 million, or 46 cents a share, in 1991, Bechtel said.
''Some of the company's debts go back quite a number of years,'' Bechtel said.
New Valley has been engrossed in an involuntary Chapter 11 proceeding in U.S. bankruptcy court in Newark since Nov. 15, 1991. That's when three small holders of the company's defaulted senior secured note filed a petition in bankruptcy court to force New Valley into Chapter 11.
Bechtel said the Chapter 11 petition, filed Wednesday, would not affect New Valley's 2,000 employees.
''We don't expect any signs of disruption from this,'' he said.
Bechtel also said Western Union is not affected by the filing, adding that the business is profitable. He said the Chapter 11 affects only New Valley because the debt is all at ''the New Valley level.''
''Western Union generates a healthy operation and flows money up to the parent company but it's not enough to service the debt,'' Bechtel said.
Robert J. Amman, vice chairman and chief executive officer of New Valley, said although the company is in Chapter 11, it intends to meet obligations to suppliers of goods and services.
Saddled with junk bond debt and left behind in the rush of technology, Western Union last reported a profit in 1982.
Shareholders approved the name change to New Valley Corp. in April 1991, partly to avoid sullying the Western Union name in bankruptcy court.