Lone Star Creditors Reject Alternative Reorganization Plan
STAMFORD, Conn. (AP) _ Lone Star Industries Inc. said Wednesday that an alternative bankruptcy reorganization plan proposed by equity security holders was rejected.
Lone Star, a manufacturer of cement, concrete and other construction materials, has been operating under Chapter 11 of the U.S. Bankruptcy Code since December 1990.
Lone Star announced on Jan. 4 that the company’s plan of reorganization was overwhelmingly approved by all classes of creditors and shareholders. A confirmation hearing on that plan began Wednesday in U.S. Bankruptcy Court in New York City, and was expected to continue Feb. 24.
Lone Star said Wednesday that the vote to reject the alternative plan was as follows: 449 holders of $242.9 million of unsecured credit, or 56.2 percent, voted to reject, and 901 holders of $189.2 million of unsecured credit, or 43.8 percent, voted to accept.
Preferred shareholders holding 326,004 shares, or 98.7 percent of shares, voted to reject, while preferred holders holding 4,325 shares voted to accept the plan. Common stockholders holding 2.96 million shares, or 88.7 percent of common shares, voted to accept the plan.
The company said in order to win approval by creditors, the alternative plan needed an affirmative vote of at least two-thirds in dollar amount of the claims voting and more than one-half of the number of holder of claims voting. An affirmative vote of at least two-thirds of preferred and common shareholders was required for approval.
Lone Star, which is expected to release its fourth-quarter and 1993 full- year results later this month, reported a profit in the third quarter. For the three months ended Sept. 30, 1993, Lone Star reported a profit of $10.2 million, or 61 cents a share, compared to a net loss of $38 million, or $2.29 a share, in the same period in 1992. Net sales were $72.8 million in the quarter, down from $73.4 million a year earlier.