Reliance Debt Holders Delay Repayment Deadline Indefinitely

November 10, 2000

Reliance Group Holdings has once again pushed back a repayment deadline, allowing the company to stave off any bankruptcy filings. The Wall Street Journal has reported that Reliance’s bank debt of $237.5 million was set to fall due on Friday, after extensions granted in March and August, but the banks and regulators have agreed to “forbear on the filing of any bankruptcy,” the newspaper reported.

No further deadline was imposed, the paper said, citing Stephen Johnson, a deputy insurance commissioner of Pennsylvania.

Meanwhile, another $291.5 million is due to Reliance Group bondholders next week. Reliance has been widely expected to declare bankruptcy in the next few months because it has sold most of its cash-generating businesses, Reuters news service reported. And Pennsylvania’s insurance department has assumed supervision of the insurer’s operations, and has been instrumental in Reliance’s divestiture of ongoing businesses in a bid to raise cash for debt repayments.

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