Newspaper article THE JOURNAL RECORD

Kelly-Johnston Optimistic with Reorganization Voting Complete

Newspaper article THE JOURNAL RECORD

Kelly-Johnston Optimistic with Reorganization Voting Complete

Article excerpt

Kelly-Johnston Enterprises Inc., which has been in Chapter 11 b ankruptcy since April 26, 1985, management is optimistic about the future.

"We've stopped the bleeding in the company. It appears to me we have a base for growth," said Raymond S. Koss, president of Kelly-Johnston.

"The creditors are optimistic enough to take a substantial amount of stock in the company."

The elimination of bankruptcy fees and trimming legal fees paid by Kelly Johnston and its four subsidiaries should help take the companies back into the black, said Koss.

Monday was the final day for voting on the consolidated reorganization plan proposed to the U.S. Bankruptcy Court in early March. A confirmation hearing is set for June 17.

Between 94 percent and 99 percent of the creditors for all five companies and those holding subordinated debentures had voted in favor of the plan at the time the monthly financial reports were compiled for the four weeks ending April 27.

Considering the companies on a consolidated basis, as proposed by the plan, the overall net loss for the period would be $22,600. Koss noted, however, that a positive cash flow of $178,000 would exist.

Kelly-Johnston's cash flow reports indicate the company is breaking even, excluding income from the sale of a liquor license, according to Jeff Morton, vice president and treasurer.

Total receipts for the company, which represent continuing cash flow, were $176,000. Disbursements totaled $90,000 for a net cash increase of $86,000. Morton noted that, excluding the $85,000 collected from the sale of the liquor license, the company made a $1,000 cash profit.

Corporate relocated expenses involved in the firm's April move from its Cedar Lake Blvd. offices to 11032 Quail Creek Rd. were included in the report this period. Morton said the move will save $10,000 a month in corporate costs.

On the accounting side, Kelly-Johnston made revenues of $84,300 and spent $112,200, of which $15,200 is the non-cash item, depreciation and amortization. The income loss amounted to $27,900. General and administrative costs totaled $80,600 and bankruptcy expenses amounted to $8,000.

For the four weeks ending March 30, Kelly-Johnston reported a $15,283 net income and a cash decrease of $13,000. For the four weeks ended March 2 the firm had reported a $128,751 loss and a cash increase of $19,000.

B & W Metals reported a $49,400 net loss on its income statement, which included depreciation and amortization expenses of $15,500. Revenues were $14,500 and total expenses amounted to $63,600.

About $27,000 in legal fees comprised the majority of the $61,000 expended during the four weeks, ending with a cash decrease of $48,000. …

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