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Texas Bankruptcy Court Confirms American Rice's Chapter 11 Plan Devised by Pachulski, Stang, Ziehl & Young
Business Wire, 07/07/1999

(c) 1999 Business Wire

HOUSTON--(BUSINESS WIRE)--July 7, 1999--U.S. Bankruptcy Court Judge Richard Schmidt of the Southern District of Texas has confirmed the plan of reorganization devised by Pachulski, Stang, Ziehl & Young P.C. for American Rice Inc., the nation's second largest rice processor and distributor.

Under the plan, American Rice reduced its debt by approximately $150 million; settled all significant litigation matters; divested itself from its parent, Erly Industries Inc.; and maintained sufficient liquidity to remain competitive in the marketplace, according to Marc A. Beilinson, a partner at Pachulski, Stang and lead bankruptcy counsel to American Rice.

"This sets the stage for the company to emerge from chapter 11 with an excellent balance sheet and bright prospects," Beilinson said. The plan provides for conversion of approximately $115 million in outstanding debt owed to bondholders who will become the new equity owners of the company.

With assistance from J. Alix & Associates, a leading consulting firm in reorganization and workouts, American Rice has substantially decreased overhead costs, renegotiated unprofitable contracts, divested non-core businesses such as its olive division, and refocused on profitable domestic and foreign sales of branded rice. The J. Alix team was headed by Ted Stenger.

Houston-based American Rice filed for chapter 11 protection last August with approximately $200 million in assets and $220 million in debt. The company has approximately 1,500 employees in its foreign and domestic operations.

"Although the negotiations were contentious at times, all creditor constituents recognized the ultimate benefits of working together to retain the value of the enterprise and were able to create a balance sheet that ensured its future success," Beilinson commented, praising the quick resolution of the proceedings which took less than a year.

Beilinson was assisted on the case by Pachulski, Stang partners Brad R. Godshall and Linda F. Cantor. Pachulski, Stang, Ziehl & Young has offices in Los Angeles and San Francisco. In addition to business reorganizations and workouts nationwide, the firm's 38 lawyers focus their practice on bankruptcy and litigation, including special practice areas in high technology, retail, health care, and real estate.

For expert comment on the American Rice confirmation, call Marc Beilinson at 310/277-6910 or phone Rick Terrell or Anne Sage at 310/458-1224 to coordinate an interview.

CONTACT: Casey Sayre & Williams Inc. Rick Terrell, 310/458-1224 09:59 EDT JULY 7, 1999