3 more offers to help Wolf Camera filed

Bankrupt chain prefers Ritz's deal

September 19, 2001|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

Three last-minute proposals have been filed to help financially troubled Wolf Camera Inc., possibly derailing a multimillion-dollar plan by Beltsville-based Ritz Camera Center to acquire its primary competitor.

Wolf has received offers in recent days from Dallas-based Cardinal Investment Co. and Jessops Camera of the United Kingdom. Palladin Capital Group and GB Equity Partners of Boston presented a third proposal.

Wolf officials said they still favor Ritz's $84.7 million buyout offer, a prospective deal to which the two companies agreed last month.

The decision on who will acquire Wolf lies in the hands of Fulton County Bankruptcy Court in Georgia, where the company filed for Chapter 11 bankruptcy in June.

"We're optimistic that the court will approve that sale," said Stephen LaMastra, Wolf's vice president for corporate strategy. "We're going to remain open-minded, and we're certainly going to listen to the alternatives. But so far we think the best alternative is the deal with Ritz."

All sides are to present their arguments in court tomorrow. The presiding judge, C. Ray Mullins, wouldn't comment on the case yesterday but said he plans to make a decision by the end of the week.

The alternative proposal submitted by Jessops is favored by the creditors committee. Jessops has offered a $50 million line of credit to help Wolf reorganize and also has said it would eventually pay lenders $30 million.

Cardinal Investment has proposed to pay $53 million in cash and assume some of Wolf's liabilities. The offer from GB Equity Partners and Palladin Capital Group calls for investing $15 million in Wolf.

LaMastra said the Ritz deal is further along than any of the others and is supported by the company's bank group, led by First Union, which has claims on proceeds from any asset sales.

David Ritz, chief executive officer and chairman of Ritz Camera, said yesterday that he could not comment on the new offers because the case is pending in court.

An acquisition by Ritz would create a company with 1,300 stores in 48 states and more than 12,000 employees. The corporate headquarters would be in Beltsville, and Chuck Wolf, founder and chief executive officer of Wolf Camera, would become vice chairman.

Ritz and Wolf are cousins, and their companies have competed for years.

Wolf declared bankruptcy in June when it suffered financial difficulties from its purchase of 450 CPI/Fox Photo stores in 1998, company officials said. The bankruptcy court must open a buyout to other companies before approving a deal between Ritz and Wolf.

Wire services contributed to this article.

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