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Western Union Denies Plan to File Chapter 11

September 10, 1986|Associated Press

UPPER SADDLE RIVER, N.J. — The chairman of 135-year-old Western Union Corp. said Tuesday that the troubled telecommunications company, which adjourned a shareholder vote on an essential restructuring, isn't considering filing for protection under federal bankruptcy laws.

Robert S. Leventhal said in a statement that if the restructuring now before shareholders is not approved, the company will consider various options, such as a renegotiation of its $300-million bank loan agreements.

"The company is in an improved cash position, and one option the company is not considering is a filing under Chapter 11 of the federal bankruptcy code because such action is neither necessary nor in the best interest of either the company or the banks," Leventhal said.

The chairman's comments came after shareholders' votes on one element of the restructuring--the merger of Western Union with its principal subsidiary, Western Union Telegraph Co.--were adjourned until Friday to provide additional time for receipt of stockholder votes.

Another key element in the restructuring plan is the company's offer to exchange new debt securities and common stock for existing Western Union debentures and notes. That offer expires Thursday.

A third element of the restructuring is a new, longer-term agreement with Western Union's banks. That step is contingent on the other steps.

The fourth component is the sale of as much as $200 million in new debt securities, with $120 million of that to go to the banks to reduce the company's debt.

More than 16,675,000 Western Union Corp. shareholder votes were cast in favor of the merger proposal, compared to about 754,740 against.

But the proposal has not received the approval of holders of several series of preferred shares who are entitled to vote separately.

Leventhal said the company could not predict whether the debt exchange offer would be successful. He said the company has no plans to extend the offer past the deadline.

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