Southland Seven-Up Bottler Seeks Bankruptcy Protection

Seven-Up/RC Bottling Co. of Southern California Inc. filed for Chapter 11 protection under the U.S. Bankruptcy Code, submitting a negotiated reorganization plan that would give the company to note holders.

Holders of $140 million in senior secured notes due in 1999 are to receive 98% of the stock in the Vernon-based bottler and at least $73.2 million from the sale of Seven-Up/RC Bottling of Puerto Rico, which is a unit of the debtor.

Under the plan, trade creditors are to be paid in full.

Seven-Up/RC attorney Laura Davis Jones said in court that the plan has the support it needs from the two essential groups of creditors: the note holders and General Electric Capital Corp., which has provided the company with $54 million in debtor-in-possession financing.

According to court papers, the sale of Seven-Up/RC of Puerto Rico to Center Street Capital Partners is subject to higher offers that may be received at auction. The auction procedure calls for topping bids to be at least $2 million higher than the current offer.

Jones said the company wants to complete the auction before the end of June.

The plan is pre-negotiated but not prepackaged. Under a so-called prepack, creditors have already completed formal voting on the plan under Bankruptcy Court guidelines.

Seven-Up/RC Bottling Co. of Southern California had sales in 1995 of $396.7 million, according to court papers. Sales excluding those of the Puerto Rico unit were $314 million. It employs about 1,400 people.

The company said it had liquidity problems in 1995 that caused it to miss the Aug. 1, 1995, interest payment on the 11.5% notes. On Sept. 14, four of the note holders filed an involuntary Chapter 11 petition, which was dismissed a month later following negotiations with those creditors.