It gets worse

[Allan L. Gilreath, RPT]

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List,

In reading the press release, I don't see a company going down for the last
time but the first hope in a while that the "legacy of past management", as
Mr. Jones so aptly puts it will finally be overcome.  As was listed in a
recent trade press article, Ms. Hendricks managed to secure a HUGE severance
package from the board.  It seems that this brings this $million plus
arrangement back to the table for revision or revocation.  If so, then I
heartily applaud this move as a huge step in the right direction.  Putting a
person who knows the piano business in charge of the company is another
great step.

While I've had plenty of disagreement with the way things have been done, I
find disagreement with the way most manufacturers put pianos together.  That
being said, I always try to offer a solution with the complaint and credit
them where it's due.

I personally don't want to see any manufacturer slip quietly into the night.
So hopefully this is the start of a new era at Baldwin that we can applaud.
I'm not going to make predictions of everything being great by the time we
wake up tomorrow morning nor am I assuming that the end is here.  My hopes
are with them for a great future.

In the middle of writing this, I stopped to talk with one of my friends at
Baldwin and I received a very positive feel from him that he feels this is
the next logical step.  I quoted Bill's copy of the original press release
so you can reread it in this light and draw your own conclusions.

Hope to you see you all in Reno.
Allan


 -----Original Message-----
From: owner-pianotech@ptg.org [mailto:owner-pianotech@ptg.org]On Behalf Of
Billbrpt@AOL.COM
Sent: Thursday, May 31, 2001 12:53 AM
To: pianotech@ptg.org
Subject: It gets worse



  Baldwin Piano & Organ Co. Announces Intent to Reorganize Under Chapter 11
of
  The United States Bankruptcy Code


  MASON, Ohio, May 30 /PRNewswire/ -- Baldwin Piano & Organ Company today
  announced its intent to file for bankruptcy protection under Chapter 11 of
  the United States Bankruptcy Code.  Previously, the Company announced on
  April 24, 2001, a liquidity squeeze that was having a negative impact on
the
  Company.  Subsequently, Baldwin hired Robert Jones as the new chief
executive
  officer and announced that Kenneth W. Pavia was elected chairman of the
board
  of directors.

  In a statement, Pavia said that while he had full confidence in Jones and
his
  ability to return the Company to profitability, the liquidity squeeze
coupled
  with certain legacy issues made the operation of Baldwin, as presently
  defined, virtually impossible.

  Pavia commented, "The legacy of past management makes the day-to-day
  operations of our core business impossible.  Disproportionate severance
  agreements, excessive inventory, excess administrative expenses in
relation
  to historical Company performance, internal control issues, executive
  compensation arrangements that seem to exceed reasonable standards, and an
  extensive list of substantial payables are some examples of the factors we
  can not overcome."

  "Other factors that led to our decision to file for protection," Pavia
added,
  "included unduly burdensome lease arrangements entered into under past
  administrations, restrictive borrowing arrangements with our lender, and
the
  inability to secure concessions in regard to our liquidity crisis."

  "The dealers, factory personnel, and the new management deserve the
  opportunity to bring Baldwin back to its glory without the added pressure
of
  past mismanagement," Pavia emphasized.  "All attempts to resolve this
matter
  informally were explored and given due consideration.  Unfortunately, the
  pressures caused by the lack of liquidity and the demand of our creditors,
  including prior management's demand for the immediate payment under
certain
  change of control agreements, made any recovery impossible.  In the end,
for
  the benefit of all concerned, including our shareholders, a formal,
orderly
  reorganization became the only viable alternative."

  In a statement, Jones said that he looked forward to leading the Company
out
  of bankruptcy and working diligently to restore the Baldwin name and
maintain
  the Company's relationship with its dealers and customers.  He continued,
  "Despite being CEO for only three weeks, I am convinced that the personnel
at
  our factories have the ability, desire, and loyalty to make quality pianos
  and achieve enhanced values.  I firmly believe that the Baldwin name
stands
  for our loyal employees and dealers.  With their continued support and the
  implementation of our strategic plan, Baldwin can return to profitability
  within a relatively short period."

  Baldwin Piano & Organ Company, the maker of America's best selling pianos,
  has marketed keyboard musical products for over 140 years.

  "Safe Harbor" statement under the Private Securities Litigation Reform Act
of
  1995:  This release contains forward-looking statements that are subject
to
  risks and uncertainties, including, but not limited to, the impact of
  competitive products and pricing, product demand and market acceptance,
  reliance on key strategic alliances, fluctuation in operating results and
  other risks detailed from time-to-time in the Company's filings with the
  Securities and Exchange Commission.


  Bill Bremmer RPT
  Madison, Wisconsin

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