Forwarded Message:

• From: 100631.17@compuserve.com  To: ALL                       Orig: MBNET
 Subj: STEINWAY and MASON & HAML Area: 0-sic.makers.piano      Date: 03/04/96
=============================================================================

•We are a large, successful US piano rebuilder, gearing up
to revive the Mason & Hamiln Piano Company (M&H).

During the past century, the M&H piano has achieved
wide recognition as a premier grand piano, one of the
few to rival Steinway.  Unfortunately, during the past few
years, the company has been a victim of over borrowing
and gross mismanagement.  It is currently working its
way through bankruptcy, with the former owners /
managers now removed from the picture.

As a trade buyer, we now seek to incorporate M&H into
our current operation, and commence production of
quality M&H pianos.  Our decades of rebuilding
experience (almost exclusively Steinway and M&H grands)
and large skilled labor force will enable us to manufacture
new M&H's at a level of uncompromised quality.  Our philosophy has
always been, and will always remain, to concentrate on quality.  In
the long term, we have found that this is the best way to insure success.

It may be part of our strategy to issue a very limited number
of piano bonds:

A bond would cost $50,000 and pay cash interest of 6.0% annually for
7 years.  In year 7 the bond would be redeemed at par- full repayment
of the $50,000.  In addition, we would provide the investor with a newly
built M&H grand piano, for free, in one year.  (We could also be open
to discuss the substitution of a fully rebuilt and refinished Steinway
grand).  The value of a new M&H or fully rebuilt Steinway is $25,000 -
$30,000.  If for whatever reason there is not complete satisfaction
with the piano at the time of delivery, we would guarantee to `unwind'
the bond and return the investment in full, plus the 6% interest.  The
bond would be secured by the stock of our company.

Numerous companies have successfully issued similar bonds
that incorporate distribution of their products.  For example,
the Mount Snow ski resort in Vermont recently issued interest
bearing bonds that included free 5-year long ski passes.  These
securities benefit all parties- the company, as it enables it to
raise money more cheaply than through the bank, and the
investor, because he/she essentially receives a product for
free.

Would anyone be interested in investing in one of the few
available piano bonds, if issued?  Reply via e-mail.

  [ Editor's Note:  This is quite interesting.  I have no idea whether
  [ this is legitimate.  However, it has generated a lot of traffic in
  [ the newsgroup rec.music.makers.piano  (and a few others).  The
  [ poster of this "offer" has published additional information, which I
  [ enclose below.  Please be aware that even well intentioned business
  [ plans fail.  Please do your homework carefully before sticking
  [ your neck out!
  [
  [ Jody


•From           <100631.17@compuserve.com>
Organization   CompuServe Incorporated
Date           7 Mar 1996 19:24:01 GMT
Keywords       steinway, piano
Newsgroups     rec.music.makers.piano
Message-ID     <4hnd4h$f6s@dub-news-svc-6.compuserve.com>

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• Since our initial `piano bond' posting, we have received
numerous inspiring responses, many requesting further
information and clarification.  The following addresses
common queries:

Who are we?

We are Faust Pianos, a large, very profitable privately
owned rebuilding / retailing operation in NY.  We concentrate
on the restoration of Steinway and Mason & Hamiln grand
pianos, have been in business for two decades, and are among
the largest Steinway rebuilders in the world.  Our reputation is
based on the quality and consistency of our work.  We carry a
regular inventory of around 100 Steinway and Mason grands,
and rebuild about 130 annually.

What has happened to Mason & Hamlin?

The cumulative effects of over-investment, damaging acquisitions,
over-leveraging and mismanagement forced Mason & Hamlin into
Chapter 11 bankruptcy.  About a year ago, just prior to the
bankruptcy, the owner / manager sold his entire interest for a
nominal sum to a small Boston outfit, Premier Pianos.  Since
then, Premier Pianos- the `debtors in possession' has only completed
building out a small number of pianos (the existing work-in-progress)
and compiled an unsatisfactory plan of reorganization.  They now
appear to be out of the picture.  Unsurprisingly they have not been
able to raise the cash necessary to revive the company.

What will happen with Mason & Hamlin?

From the outset of the bankruptcy proceedings, Faust Pianos has
 been interested in resurrecting the company.  The combination of
our resources, network, size and know-how will enable us to
successfully build new quality Masons.  We intend to integrate
Mason & Hamlin with our current profitable rebuilding operation.

It should be noted that there is not a significant difference between
fully rebuilding a piano and building a new one.  Beyond rebuilding
 an old grand piano, manufacturing a new grand primarily entails
cutting and bending wood to construct the case, furniture parts, and
constructing a keybed and action frame.  Production of a new piano's
essentials, principally the `belly' and action, basically incorporates the
same procedures as for a rebuilt piano.  We will employ those same
methods as in our current operations, which we perform to the highest
possible standards.  The new Masons that we will produce will be
built likewise.  We will build the M&H piano into that of its former self.

What's the deal?

Through our own resources and financial backing from an established
venture capitalist (VC), we have secured the money required to pay off
 the current creditors and fund all expected operating start-up losses.
We will not incur additional debt for these purposes.

We are not looking to issue bonds to help purchase the company or
fund initial operations.  However, it is our intention to `recapitalize'
 the company once it is under our direction and becomes profitable.
In other words, we would look to `buyout' the VC as soon as
practicable.  The VC, along with ourselves, is incurring all the
start-up risk associated with merging our rebuilding operations with
Mason and Hamlin, and for this, the VC will receive a return to
compensate for such risk.

However, once the company is back on its feet, there will be no need to
retain the VC.  Although any equity investment by the VC will not `charge'
interest, his required return will be dilutive to our ownership an
earnings.  Therefore buying the VC out with debt (the bonds) will
effectively provide us with less expensive money.

The Bonds:

Although we have not yet determined to issue the bonds, and thus
have not finalized terms, they might take the following shape:

We would offer a range of bonds.  Principal amounts would be dictated
by various piano contributions.  For example, a 10-year $50,000 investment
would pay cash interest of 6% and provide a new M&H `A' in year 2. A
principle investment of say $75,000 with the same maturity and interest
characteristics would provide the investor with a new M&H `BB.'

Likewise, we could just as easily issue bonds for rebuilt Steinway's (or Mason's):

   A $50,000 investment (terms as above) would be coupled with a fully rebuilt
Steinway `M'

   A $60,000 investment (terms as above) would be coupled with a fully
rebuilt Steinway `O' or `L'

   A $70,000 investment (terms as above) would be coupled with a fully
rebuilt Steinway `A'

   A $80,000 investment (terms as above) would be coupled with a fully
rebuilt Steinway `B'

Any bonds that we issue would be senior to all other investments in
the company and would be secured by the inventory of Faust Pianos
(NB- Faust Pianos carries no debt on its balance sheet).

With respect to the investor's flexibility of choice, we would allow
the investor to play and choose his/her piano from our entire
inventory.  We would give all investors the right to unwind the
bond if he/she is simply not satisfied with the finished product.

We do not have to issue these bonds, it simply may be in our
financial interest to do so.  Yet we are considering piano bonds
because they are a cheaper source of capital.  The strength of our
balance sheet enables us to readily raise bank (or other) debt.
Yet we will consider issuing piano bonds because they are a
cheaper source of capital.  Producing a piano (new or rebuilt)
costs us less than the value attributed to it by our customers/investors.
It is only this disparity in cost / value that makes the creation of
this security possible.

The high effective rate of interest achieved by our investors
(in excess of 15% IRR) occurs through the arbitrage between the
cost of manufacturing and the retail value of the pianos.  These
bonds will be safe, high yielding, and will help the new Mason
& Hamlin company grow into the company it should be.

We hope the above begins to answer many of the issues and
questions raised by our initial posting.  Please feel free to
ask further.  At the end of the day, these bonds make sense
for all parties.

If anyone might be interested (or knows someone who may
be interested) in investing in one of the few available piano
bonds, if issued, please reply via e-mail.

Dorian Faust