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/raid1/www/Hosts/bankrupt/TCR_Public/000127.MBX T R O U B L E D C O M P A N Y R E P O R T E R Thursday, January 27, 2000, Vol. 4, No. 18 Headlines AMERICAN TRACK SYSTEMS: Converted To Chapter 7 AMERITRUCK DISTRIBUTION: Chapter 7 Meeting of Creditors EAGLE GEOPHYSICAL: Committee Objects To Employee Agreements EAGLE GEOPHYSICAL: Seeks Extension of Exclusivity FORCENERGY: Confirmation of Plan GENESIS DIRECT: Seeks Order Approving Sale of Assets of the Edge Company HUMPTY DUMPTY: Order Approves Post-Petition Financing HUMPTY DUMPTY: Small Fry Snack Foods Picks-Up the Pieces KELSEY LAKE: Diamond Mine Operator Files for Bankruptcy in Colorado MECHALA GROUP: Jamaican Court to Rule on Scheme of Arrangement MERIDIAN CORP.: Consent Order Terminates Automatic Stay MICHAEL PETROLEUM: Order Grants Motion To Approve Bid Protections NU-KOTE HOLDING: Joint Motion For Compromise Denied PLANET HOLLYWOOD: Further Details About Plan's Exchange Offer RCG LIQUIDATION: Hearing to Consider Disclosure Statement SABRATEK CORP.: Announces Sale of Infustion Pumps, Rocap & LifeWatch SAVIO DEVELOPMENT: Hawaiian Developer Seeks Chapter 11 Protection SIDANCO OIL: Tyumen Endorses Pact to End Russian Bankruptcy Proceeding SIRENA APPAREL: Seeks Extension of Period To Assume/Reject Lease SUCCESS HOLDINGS: Hearing To Convert or Dismiss TALK AMERICA: Seeks To Continue Confirmation Hearing TULTEX CORP: Seeks To Hire Counsel to Creditors Committee WORLDWIDE DIRECT: Hearing on Motion For Substantive Consolidation ********* AMERICAN TRACK SYSTEMS: Converted To Chapter 7 ---------------------------------------------- By order entered on January 13, 2000, the Chapter 11 case of American Track Systems International, Inc. is converted to a case under Chapter 7 of the Bankruptcy code. AMERITRUCK DISTRIBUTION: Chapter 7 Meeting of Creditors ------------------------------------------------------- A bankruptcy case concerning Ameritruck Distribution Corp. and its debtor affiliates was originally filed under Chapter 11 on November 9, 1998. It was converted to a Chapter 7 case on November 12, 1999. A meeting of creditors will be held on February 15, 2000 at 10:00 AM, Office of the US Trustee, 1100 Commerce St., Room 7-A-23, Dallas, Tx. Proof of claim must be received by the bankruptcy clerk's office by May 15, 2000. EAGLE GEOPHYSICAL: Committee Objects To Employee Agreements ----------------------------------------------------------- The Official Committee of Unsecured Creditors of Eagle Geophysical Inc., et al., objects to the severance agreement with David H. Saindon and the employee agreement with Richard W. McNairy. While the Committee and the debtors are currently engagedin discussions regarding the agreements, the Committee has concerns regarding the appropriateness of the relief, and the Committee and the debtors shall disucss the motion and attempt to reach a consensus. EAGLE GEOPHYSICAL: Seeks Extension of Exclusivity ------------------------------------------------- Eagle Geophysical Inc. and its affiliated debtors seek a court order extending the exclusive periods during which only the debtors may file a plan and solicit acceptances thereof. The debtors seek entry of an order further extending the exclusive filing period for approximately thirty days to and including February 27, 2000 and further extending the exclusive solicitation period to and including April 27, 2000. The debtors have been actively engaged in attempts to market and sell the Atlantic Horizon. An extension of the exclusive periods is necessary and appropriate in order to enable the debtors to conclude the plan process with their creditor constituencies and to work towards the implementation of such a negotiated plan. Termination of the debtors' exclusivity at this juncture would, according to the debtors, create an uncertain, chaotic environment, which would inevitably disrupt the plan process, thereby potentially reducing distributions to the debtors' creditors. The Committee does not object to the motion. FORCENERGY: Confirmation of Plan -------------------------------- The First Amended Joint Plan of Reorganization filed by the Forcenery Inc. and Forcenergy Resources, Inc. was confirmed by the Order of the Court signed on January 19, 2000. GENESIS DIRECT: Seeks Order Approving Sale of Assets of the Edge Company ------------------------------------------------------------------------ The debtor, Genesis Direct, Inc., et al. seek authority to sell substantially all of the assets of the Edge Company Catalog, LLC, free and clear of all liens, claims and encumbrances. The purchaser is Retail Equity Partners, Inc., a corporation wholly owned by GE Investment Private Placement Partners II, a limited partnership. HUMPTY DUMPTY: Order Approves Post-Petition Financing ----------------------------------------------------- On January 21, 2000, Judge James A. Goodman entered an order granting the debtor, Humpty Dumpty Potato Chip co., Inc. authority to enter into post petition financing and the use of cash collateral. The debtor is immediately authorized to borrow up to but not exceeding $250,000. The debtor is authorized to use the cash collateral up to the amount of $201,000. HUMPTY DUMPTY: Small Fry Snack Foods Picks-Up the Pieces -------------------------------------------------------- Kitchener-based Small Fry Snack Foods Ltd. was there to pick up the pieces when Humpty Dumpty had a great fall. Small Fry said yesterday it has extended its penetration into the U.S. by purchasing the trademarks, distribution and other key assets of the Humpty Dumpty brand in the U.S., the London Free Press reports. Financial details were not given, but the assets were bought through a Chapter 11 reorganization of the Humpty Dumpty Potato Chip Co. Inc. under U.S. bankruptcy protection. KELSEY LAKE: Diamond Mine Operator Files for Bankruptcy in Colorado ------------------------------------------------------------------- The operator of the Kelsey Lake Diamond mine north of Fort Collins has filed for Chapter 11 bankruptcy protection, according to a report circulated by the Associated Press. The case was filed last week in Denver. The mine's owner, Redaurum Ltd. of Toronto, reportedly has a definitive agreement to sell its Diamond Co. unit to McKenzie Bay International Ltd., of London, Ontario. The sale is contingent on the settlement of some claims of Diamond Co.'s creditors, according to a statement from Redaurum. As part of the sale, Redaurum agreed to sell all of the shares of Diamond Co. to McKenzie Bay in exchange for, among other things, 100,000 common shares of McKenzie Bay. The companies hope to close the sale before the end of February. Paul D. Rubner, Esq., represents Diamond Co. in the bankruptcy. MECHALA GROUP: Jamaican Court to Rule on Scheme of Arrangement -------------------------------------------------------------- Mechala Group Jamaica Limited announced today that, on Monday January 17, 2000, the Chief Justice of Jamaica, the Honourable Mr. Justice Lensley Wolfe, reserved judgement, in Mechala's petition for the sanction of the Scheme of Arrangement approved at the Creditors Meetings on December 21, 1999. These Jamaican proceedings are similar to Chapter 11 proceedings that a U.S. corporation could invoke under US law. Mr. Justice Wolfe has indicated that he expects to deliver judgement in fourteen days. The Petition was heard over a three-day period with submissions made by lawyers representing Mechala, the informal committee of bondholders who supported the Petition, and the sole objector, Federated Investments. In considering this application, the Court will examine the fairness of the Scheme. The background to this is that at the Creditors Meetings, Mechala obtained the mandate required under Section 192 of the Companies Act of Jamaica to petition the Court to sanction its Scheme of Arrangement. The mandate required was for a majority in number, representing more than 75% in value, present and voting at the meetings of both classes of its Bondholders, to accept the Scheme of Arrangement proposed by the company. At the meetings, 94% of the persons present and voting, which represented 93% of the Aggregate Principal Amount of 1999 Notes present in person or by proxy accepted the proposal; as did 83% of the persons present and voting, which represented 89% of the Aggregate Principal Amount of 2002 Notes present in person or by proxy. The vast majority elected to accept the cash payment of US $477 per US $1,000 principal amount of Notes rather than equity in the reorganised company. MERIDIAN CORP.: Consent Order Terminates Automatic Stay ------------------------------------------------------- Home Care Supply, Inc. and its affiliates are authorized by court order dated January 13, 2000 to terminate the automatic stay to permit Home Care Supply to terminate the Professional Service Agreement between the debtor and Home Care. Home Care Supply is granted the right to remove all leased medical equipment in the debtor's possession. MICHAEL PETROLEUM: Order Grants Motion To Approve Bid Protections ----------------------------------------------------------------- On February 14, 2000 at 11:30 AM, the motion of debtors Michael Petroleum Corporation and its affiliates to approve Bid Protections in connection with the sale of substantially all of the debtor's assets shall be held. The sale of the debtors' assets shall be for a net consideration for at least $120 million. NU-KOTE HOLDING: Joint Motion For Compromise Denied --------------------------------------------------- The Joint Motion for approval of compromise and settlement by and among the debtors, the lenders and the Committees was heard on January 4, 2000. Judge Keith M. Lundin denied the motion after hearing the testimony of witnesses and the US Trustee. PLANET HOLLYWOOD: Further Details About Plan's Exchange Offer ------------------------------------------------------------- As previously reported, Planet Hollywood International, Inc. (OTC Bulletin Board: PLHYA) announced that it has received confirmation of its plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code. The Company's confirmation hearing was held on Thursday, January 20, 1999, and the order approving same was issued Friday, January 21, 1999. As previously reported, on October 12, 1999, the Company and twenty-five of its operating subsidiaries filed voluntary petitions commencing cases under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware. On November 8, 1999, the Company filed a Joint Plan of Reorganization and a proposed Disclosure Statement with the Bankruptcy Court which were supported by the Official Committee of Unsecured Creditors. Following a hearing held on December 9, 1999, the Bankruptcy Court approved the disclosure statement as amended and scheduled a hearing on confirmation of the reorganization plan for January 20, 2000. On December 13, 1999, the Company filed their First Amended Joint Plan of Reorganization (the "Plan") and First Amended Disclosure Statement with the Bankruptcy Court. The Plan will become effective after the Company has received all authorizations, consents, rulings, letters or other documents that are determined by the Bankruptcy Court, the Company and the Official Committee of Unsecured Creditors to be necessary to implement the Plan. The Company anticipates the Effective Date of the Plan will be within 30 days. Pursuant to the Plan, on the Effective Date, the Company's outstanding securities, instruments and agreements governing any claims and interests will be deemed canceled and terminated, and the obligations of the Company relating thereto shall be discharged. On the Effective Date, the Company shall: (i) receive $30 million cash from certain investors as the purchase price for an approximately 60-70% equity interest in the reorganized Company; (ii) issue up to $25 million face amount New Senior Secured Notes; and (iii) obtain such other financing as necessary to fund the Company's obligations under the Plan and to operate the reorganized Company. The Company shall also issue New Senior Secured Notes, New Secured PIK Notes, New Warrants, New Options and New Common Stock, and shall pay certain cash amounts to persons entitled to receive distributions under the Plan. Holders of at least 5,450 shares of the Company's old common stock will receive their pro rata share of 200,000 New Warrants to purchase the New Common Stock, with an exercise price of $65.50 per share. Holders of less than 5,450 shares will receive no consideration. Holders of the Company's $250 million Senior Subordinated Notes will receive their pro rata share of: (i) $47.5 million cash, (ii) $60 million of New Secured PIK Notes and (iii) 2.65 million shares of New Common Stock, representing an approximate 26.5% equity interest in the reorganized Company. The Company will be filing a current report on Form 8-K with the SEC within the next two weeks outlining in more detail the terms of the Plan. The very brief summary set forth above is qualified in its entirety by reference to the Plan, a copy of which will be attached to said report. Creditors and shareholders may also obtain copies of the Company's public filings by written requests addressed to Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York 10038, Attn: Rose Serrette. RCG LIQUIDATION: Hearing to Consider Disclosure Statement --------------------------------------------------------- A hearing will be held on February 24, 2000 at 10:30 AM before the Honorable Mary F. Walrath, US District Court for the District of Delaware to consider the adequacy of the information contained in the Disclosure Statement filed by RCG Liquidation Company f/k/a Reading China and Glass, Inc., RCGH, Inc., Calvert Importers & Distributiors, Inc. and RCGTM, Inc. SABRATEK CORP.: Announces Sale of Infustion Pumps, Rocap & LifeWatch -------------------------------------------------------------------- Sabratek Corp. (OTC Bulletin Board: SBTKE) today announced that it had completed the sale of all of the assets, together with certain liabilities, associated with its infusion pump business and Rocap product line to Baxter Healthcare Corporation on January 21, 2000. The sale was valued at approximately $48 million in cash and assumed liabilities. Sabratek also announced that it expects to complete the sale of substantially all the assets, together with certain liabilities, of its LifeWatch Inc. subsidiary to URS Acquisition Corp. before the end of January. The LifeWatch transaction is expected to be valued at approximately $10.5 million in cash and assumed payables, plus the assumption of selected contracts and leases. Both transactions were approved by the United States Bankruptcy Court for the District of Delaware on January 18, 2000, following a Court- supervised auction process. Sabratek indicated it believed the transactions to be in the best interests of all parties involved. The Court found the transaction generated fair value for the company's creditors. Further, the Baxter sale, which included the 3030 Stationary and 6060 Ambulatory Infusion Pumps, the MediView and PumpMaster accessories, the Rocap pre-filled syringe product line and other products (and projects) Sabratek had under development, will allow continued customer support and technological development. URS intends to continue servicing all the cardiac monitoring patients formerly served by LifeWatch. Sabratek now plans to focus on evaluating the best method for generating value from its remaining assets, which will include its Unitron Medical Communications Inc., GDS Inc. and CMS Inc. subsidiaries, as well as developing a plan of reorganization. Sabratek's plans with respect to it remaining assets, as well as its plan of reorganization, are subject to Bankruptcy Court approval. Anyone having a claim against Sabratek must submit a proof of claim to the United States Bankruptcy Court for the District of Delaware before the close of business on March 10, 2000, or such claims will be disallowed by the Bankruptcy Court. All claims supported by a properly filed proof of claim will be considered by the Bankruptcy Court in its evaluation of Sabratek's plan of reorganization. SAVIO DEVELOPMENT: Hawaiian Developer Seeks Chapter 11 Protection ----------------------------------------------------------------- Savio Development Co. has filed for Chapter 11 bankruptcy protection, saying it overextended itself by offering personal loans to first-time home buyers. Documents filed in U.S. Bankruptcy Court on Monday show that Savio Development has about $45.8 million in assets but more than $50.5 million in debts. Savio owes as much as $4 million each to American Savings Bank and First Hawaiian Bank, among other creditors. Company president Peter Savio, according to a report circulated by the Associated Press, said many of the home buyers who took loans from his company have filed for bankruptcy because of Hawaii's slow economy. "For 15 years we never had a loss," Savio said. "But due to the slow economy a lot of our buyers have lost jobs and been forced into bankruptcies, and that loss of income put a strain on our resources." Savio's bankruptcy filing reportedly does not affect its other companies, including Savio Realty Ltd., Better Homes & Gardens and Queen Emma Gardens Development Co. SIDANCO OIL: Tyumen Endorses Pact to End Russian Bankruptcy Proceeding ---------------------------------------------------------------------- Tyumen Oil Company, one of the world's top 10 integrated oil companies in reserves, endorsed Monday the decision to move toward ending the bankruptcy of Sidanco Oil Company. On Monday, Sidanco's creditors in Moscow voted overwhelmingly for an amicable settlement agreement to bring Sidanco out of bankruptcy. This follows the signing on Dec. 22 of a preliminary agreement between Sidanco shareholders - including BP Amoco - and Tyumen Oil's shareholders on ownership of Sidanco and its subsidiary Chernogorneft. "We actively supported the decision, which moves us closer to harnessing the tremendous potential of Samotlor oil field for the mutual benefit of Tyumen Oil and Sidanco in concert with BP Amoco," said Tyumen Oil CEO and President Simon Kukes. The decision of the creditor's committee goes to the Moscow District Arbitration Court on Friday for confirmation and implementation. BP Amoco and other Sidanco shareholders are working with Tyumen Oil's shareholders to finalize a definitive agreement including joint studies on the long-term management and development of Samotlor, one of the world's biggest oil fields. "This development sends a strong positive message to international lending institutions and investors. US-Russian commercial interests need such a foundation if they are to continue to expand," said Gene Lawson, president of the US-Russia Business Council, one of the most influential private business groups involved in US-Russian business. Established in 1995, Tyumen Oil is one of Russia's top five oil companies producing 460,000 barrels per day. It belongs to two private owners, Alfa Group (Russia) and Access/Renova (Russia, United States). SIRENA APPAREL: Seeks Extension of Period To Assume/Reject Lease ---------------------------------------------------------------- The debtor, The Sirena Apparel Group Inc. is leessee under a lease located at 2825 South Santa Fe Avenue, Vernon, California. The debtor is seeking an extension for approximately 180 days, thorugh and including July 20, 2000, of the period during which the debtor shall determine whether to assume or reject the lease. The debtor conducts the bulk of its business operations from this location, and the lease is vital and necessary to the debtor's ongoing business operations. SUCCESS HOLDINGS: Hearing To Convert or Dismiss ----------------------------------------------- Upon application of the US Trustee for the Southern District of New York, a hearing will be held before the Honorable Prudence Carter Beatty at the US Bankruptcy Court, Courtroom 701 on March 9, 2000 at 11:00 AM for an order converting the case to Chapter 7 or in the alternative dismissing the case. TALK AMERICA: Seeks To Continue Confirmation Hearing ---------------------------------------------------- Talk America Inc. seeks an order continuing the hearing on confirmation of the debtor's second amended plan of reorganization. The court scheduled the confirmation hearing for February 9, 2000 and set February 1, 2000 as the deadline for filing written objections. The process of gathering a current and accurate list of all holders of Class 7 claims and the amounts of such claims has taken longer than the debtor and the court-approved claims agent, Trumbull Services Company LLC initially estimated. The debtor asks that the confirmation hearing be rescheduled for March 2, 2000 at 11:00 AM establishing February 25, 2000 as the deadline for objections. TULTEX CORP: Seeks To Hire Counsel to Creditors Committee --------------------------------------------------------- The Unsecured creditors Committee of Tultex Corporation requests that the court approve its applciation to appoint Magee, Foster, Goldstein & Sayers, PC, as its counsel nunc pro tunc to January 7, 2000. * The firm will give legal advice with respect to the powers, duties and resposibilities in this case; * The firm will assist the Committee in its investigation of the acts, conduct, assets, liabilities, and financial condition of the debtor; * The firm will give legal advice with respect to the debtor's proposed plans of reorganization or liquidation of assets, the debtor's proposed plans with respect to the prosecution of claims against various third parties, and any other matters relevant to the case; and * The firm will give legal advice and representation with respect to the appointment of a trustee, conversion of the case, or any other legal proceeding involving the interests represented by the Committee. The hourly billing rates of the firm range from $210 per hour to $75 per hour. WORLDWIDE DIRECT: Hearing on Motion For Substantive Consolidation ----------------------------------------------------------------- The debtors and the Official Committee of Unsecured Creditors request that the Bankruptcy Court order the substantive consolidation of the debtors' bankruptcy estates. A hearing on the motion will be held on February 17, 2000 at 9:30 AM. ********* A listing of Meetings, Conferences and Seminars appears each Tuesday in the TCR. Bond pricing, appearing each Friday, is supplied by DLS Capital Partners, Dallas, Texas. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter, co- published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. Debra Brennan, Yvonne L. Metzler, Edem Alfeche and Ronald Ladia, Editors. Copyright 2000. All rights reserved. ISSN 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *