Keystone disclosure statement approved, confirmation set for Aug. 10

New York, July 11 - Keystone Consolidated Industries, Inc. said it received approval for its disclosure statement from the U.S. Bankruptcy Court for the Eastern District of Wisconsin.

The deadline for objections to the plan is Aug. 3 and a confirmation hearing is scheduled for Aug. 10.

Approval of the disclosure statement, Keystone's third amended, follows a hearing on June 24.

The proposed plan of reorganization gives all of the reorganized company's stock to unsecured and debtor-in-possession creditors.

Sherman Wire Co.'s assets and operations will be sold to Keystone and it will operate as a wholly owned Keystone subsidiary.

The plan also calls for liquidating of its pre-bankruptcy subsidiaries Sherman Wire of Caldwell, Inc.; J.L. Prescott Co. and DeSoto Environmental Management Inc. and the proceeds distributed to their unsecured creditors.

In March, Keystone Consolidated reached a lock-up agreement with creditors, unions and retirees under which they agreed to negotiate a plan of reorganization agreeable to all sides.

Under the agreement, Keystone said it will cooperate with any alternative plan of reorganization that meets certain standards.

Under the plan of reorganization:

*Holders of secured claims will be unimpaired and not entitled to vote; their claims will be reinstated, giving them 100% recovery;

*Holders of general unsecured claims will be impaired and entitled to vote; they will receive $5.2 million in cash, a $4.8 million secured note and or 49% of the common stock of the reorganized company;

*Unsecured creditors of FV Steel & Wire Co. will be paid in full in cash;

*Holders of Congress Financial Corp. debtor-in-possession claims will be unimpaired and not entitled to vote. They will get 100% recovery in cash.

*EWP Financial, LLC, an affiliate of Contran Corp., Keystone's pre-petition majority shareholder, will, in its role as one of Keystone's debtor-in-possession lenders, convert $5 million of its credit facility, certain pre-petition unsecured claims and certain administrative claims into 51% of the common stock of reorganized Keystone;

*Holders of old preferred stock, old common stock and other securities claims will get nothing.

Keystone, a Dallas-based fencing and wiring company, filed for bankruptcy on Feb. 26, 2004. Its Chapter 11 case number is 04-22422.

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