/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/000128.MBX T R O U B L E D C O M P A N Y R E P O R T E R Friday, January 28, 2000, Vol. 4, No. 20 Headlines AGRIBIOTECH, INC: Case Summary AGRIBIOTECH: Lost $49.8 Million In The Past Year ALTA GOLD: Hearing on Secured Lenders' Motion AMERICAN SKIING: Losses Exceed Revenues CITYSCAPE HOME LOAN OWNER TRUST: S&P Lowers, Affms 1997-1 Rtgs COHO ENERGY: Exclusivity Terminated, Loan Offers Revised COMMODORE APPLIED: Commodore Environmental Owns Stock FILENE'S BASEMENT: Motion To Reject Store Leases FILENE'S BASEMENT: Results of Auction of Leasehold Interests FIRSTPLUS FINANCIAL: Pre-Hearing Outline of Disclosure Statement FOURS ON SEVENTH: Case Summary & 20 Largest Unsecured Creditors GBC BANKCORP: Announces Results of Problem Loan Auction IMPERIAL HOME DECOR: Taps McDonald, Hopkins, Burke & Haber INTEREX INC: Files Bankruptcy ISONICS: Stock Owners Report Holdings LEASING SOLUTIONS: Order Extends Time to Assume/Reject Leases LENOX HEALTHCARE: Order Extends Time To Assume/Reject Leases MARINER: US Trustee Schedules Organizational Meeting MCA FINANCIAL: Status Report To Court Regarding Plan MEDICAL RESOURCES: Reports Quarter Results SABRATEK CORP: Committee Objects To Woodward Capital Advisors SABRATEK CORP: Committee Taps The Bayard Firm SABRATEK CORP: Committee Taps Weil, Gotshal SAFETY COMPONENTS INC.: Moody's Lowers Ratings SCHEIN PHARMACEUTICAL, INC.: Moody's Lowers Rating Of Sr Notes SERVICE MERCHANDISE: Spending Less Than Expected SIDANKO: Tyumen Oil Endorses Ratification of Pact SUN HEALTHCARE GROUP: Updates Progress To SEC TV FILME INC: Reports Filing Plan of Reorganization BOND PRICING FOR WEEK OF January 24, 2000 ******** AGRIBIOTECH, INC: Case Summary ------------------------------ Debtor: Agribiotech, Inc. 120 Corporate Park Drive Henderson, NV 89014 Type of Business: Is a vertically integrated, full service seed company specializing in the forage and turf grass sector, complete with research and developments of proprietary seed varieties, seed processing plants and a national and international distribution distribution and sales network. Petition Date: January 25, 2000 Chapter 11 Court: District of Nevada Judge: Linda B. Riegle Debtor's Counsel: William P. Weintraub PACHULSKI, STANG, ZIEHL, YOUNG & JONES, P.C. 650 California Street, 15th Floor San Francisco, CA 94108 (415) 263-7000 Latest available info as of 12/31/99 Total Assets: $ 362,844,375 Total Debts: $ 165,592,049 JG BOSWELL CO. TRADE DEBT $ 1,491,421.35 CENEX SUPPLY & MARKETING TRADE DEBT $ 1,090,934.43 BURLINGHAM, GEORGE TRADE DEBT $ 727,237.00 NORFARM SEEDS TRADE DEBT $ 621,736.50 NETRICK BROTHERS TRADE DEBT $ 603,527.07 INOUYE FARMS TRADE DEBT $ 528,408.58 SILVER STATE FARMS TRADE DEBT $ 526,123.90 PALOMA PARTNERS TRADE DEBT $ 524,800.00 KPMG TRADE DEBT $ 517,486.00 BEACHNER SEED CO. INC. TRADE DEBT $ 516,712.00 ORACLE CORP. TRADE DEBT $ 489,244.98 MONSANTO CO TRADE DEBT $ 487,331.00 CENEX HARVEST STATES TRADE DEBT $ 478,164.10 ZEIGLER FARMS LLC TRADE DEBT $ 436,379.60 BUCKLEY, MIKE TRADE DEBT $ 416,278.68 BRINKERHOFF, GENE TRADE DEBT $ 407,675.11 SMITH SEED SERVICES TRADE DEBT $ 400,678.68 EYERLEY FARMS TRADE DEBT $ 390,748.81 BRINKERHOFF SEED TRADE DEBT $ 387,341.88 DUFF CO. TRADE DEBT $ 359,519.52 AGRIBIOTECH: Lost $49.8 Million In The Past Year ------------------------------------------------ Chief Executive Richard Budd said Monday the move is necessary to ensure the company has the capital needed to continue normal operations. The move comes in the wake of the company's failure to secure a new financing package from GE Capital Corp. The Henderson-based AgriBioTech has lost $49.8 million on revenue of $354.4 million in the past year. Concurrent to the Chapter 11 announcement, the Nasdaq stock market halted trading in AgriBioTech shares Monday at a last sale price of $2.25, down from Friday's close of $2.50 and well off its 52-week high of $13.75. Trading will not resume until Nasdaq receives additional information from the company, the stock market said. Standard & Poors said the company had $77 million in outstanding debt as of Sept. 24. Founded in 1983, AgriBioTech specializes in the sale and biotechnical and turfgrass seeds. The company's strategy was to buy independent seed distributors and consolidate them. In all 34 companies were purchased, but in its bankruptcy announcement, AgriBioTech noted difficulties in integrating the companies. Budd said the company hopes to continue normal operations during the reorganization. AgriBioTech has faced several challenges over the last few years - including an oversupply of seed and a downturn in industry pricing - Budd said. Higher than expected expenses and slow cash collections from a weak agricultural economy have also hurt the company's liquidity. ALTA GOLD: Hearing on Secured Lenders' Motion --------------------------------------------- A hearing will be held on the secured lenders' motion for relief from the automatic stay to apply proceeds from the sale of put options against indebtedness. The hearing on the motion will be held in the he Clifton Young Federal Building, 300 Booth St., Bankruptcy courtroom, First Floor, Reno, Nevada on February 17, 2000 at 10:30 AM. AMERICAN SKIING: Losses Exceed Revenues --------------------------------------- For the quarter ended October 24, 1999 American Skiing Company experienced net losses of $27,954 on revenues of $23,355 as compared to net losses of $20,268 on revenues of $24,796 in the same quarter of 1998. The company's liquidity is significantly affected by its high leverage. As a result of its leveraged position, it will have significant cash requirements to service interest and principal payments on its debt. Consequently, cash availability for working capital needs, capital expenditures and acquisitions is limited, outside of the availability under the Senior Credit Facility. Furthermore, the Senior Credit Facility and the Indenture each contain significant restrictions on the ability of the company and its subsidiaries to obtain additional sources of capital and may affect the company's liquidity. These restrictions include restrictions on the sale of assets, restrictions on the incurrence of additional indebtedness and restrictions on the issuance of preferred stock. CITYSCAPE HOME LOAN OWNER TRUST: S&P Lowers, Affms 1997-1 Rtgs ----------------------------------------------------------------- Standard & Poor's lowered its ratings on Cityscape Home Loan Owner Trust series 1997-1 class B certificates to double-'C' from triple-'C'. At the same time, Standard and Poor's affirmed its ratings on the remaining classes of Cityscape Home Loan Owner Trust series 1997-1. Approximately US$62.8 million in debt is affected for this high combined loan-to-value (CLTV) transaction (see list). An enormous increase in losses reported in November 1999 prompted Standard & Poor's to lower its ratings on the class B and M-2 certificates in December 1999. Reports in December 1999 reflected subsequent losses of US$443,000, which caused overcollateralization to be reduced to US$315, 000. Credit support of the class B certificates is provided solely from overcollateralization. Based on the current and projected performance for this pool, overcollateralization is likely to be depleted further in the near future. Should default trends continue, the remaining certificate classes, specifically class M-2, may be adversely affected, Standard & Poor's said. --CreditWire COHO ENERGY: Exclusivity Terminated, Loan Offers Revised -------------------------------------------------------- Coho Energy Inc.'s (COHO) exclusive period to sponsor a plan of reorganization was terminated on Jan. 21 at a hearing before the U.S. Bankruptcy Court in Dallas. While exclusivity was terminated in favor of the oil and gas company's bank group, its official committee of unsecured creditors and its official committee of equity security holders, which made the request, Coho seems intent on proceeding with the amended reorganization plan it proposed on Dec. 21. On Tuesday, the oil and gas exploration company filed a motion for authorization to pay $200,000 in due diligence fees and expenses in connection with a new $70 million standby financing facility to be provided by affiliates of PPM America Inc., Appaloosa Management L.P., Oaktree Capital Management LLC and Pacholder Associates. (The Daily Bankruptcy Review and ABI 27-Jan-00) COMMODORE APPLIED: Commodore Environmental Owns Stock ----------------------------------------------------- Commodore Applied Technologies Inc. is an environmental treatment and services company which, through its operating subsidiaries, provides a range of technologies and services directed principally at remediating contamination in soils and other materials, and disposing or reusing certain waste by-products through development of inert and environmentally sound technologies. Commodore Environmental Services, Inc. beneficially owns 29,867,217 shares of common stock of the company representing 65.8% of the outstanding common stock. Environmental exercises sole voting and dispositive power over all such shares. Environmental invests in diverse environmental, chemical and other businesses with a focus on new technologies that may have a significant impact upon their markets. Bentley J. Blum beneficially owns 70,000 shares of common stock with sole voting and dispositive powers. Additionally he exercises shared powers over the 29,867,217 shares mentioned above. Combined his shareholding represents 65.9% of the outstanding common stock of Commodore Applied Technologies. Mr. Blum is a Director of Commodore Applied Technologies Inc. and holds the office of President of Berkshire Coal Corporation. Berkshire Coal Corporation is a management company which primarily manages investments in various oil and drilling ventures. He is also Chairman of the Board, President and Chief Executive Officer of Environmental. Paul E. Hannesson beneficially owns 577,500 shares of common stock of Commodore Applied Technologies with sole voting and dispositive powers and an additional 2,983,650 shares with shared powers, representing 7.8% of the outstanding common stock of the company. He is Chairman of the Board, President and Chief Executive Officer of Commodore Applied Technologies Inc., and an executive officer of certain of the company's operating subsidiaries. Additionally he holds the positions of Chairman of the Board and Chief Executive Officer of Commodore Separation Technologies, Inc., an 87% owned subsidiary of Commodore Environmental Services LLC (wholly-owned by Environmental). Separation is an environmental treatment and services company that offers a technology directed at selectively extracting and recovering solubilized metals, radionuclides, biochemicals and other targeted elements from aqueous and possibly gaseous process streams in degrees of concentration and purity that permit both the reuse of such elements and the disposal of the process water or gas as non-toxic effluent with little or no further treatment. FILENE'S BASEMENT: Motion To Reject Store Leases ------------------------------------------------ Filene's Basement Inc. and Filene's Basement Corp. seek to reject leases at Maine Mall, in South Portland Maine and Paramus, NJ. The debtors have ceased doing business at each of the rejected locations, ad the rejected leases cannot be sold to a third party. The debtors do not need the rejected locations in connection with their reorganization efforts. FILENE'S BASEMENT: Results of Auction of Leasehold Interests ------------------------------------------------------------ To date, the debtors have closed 37 stores and have successfully sold all of their merchandise located at the GOB stores. The debtors continue to operate 14 traditional Filene's Basement and eight Aisle 3 stores. As of January 12, 2000, the debtors had 28 outstanding GOB leases. Twenty teams of bidders attend the auction on January 12. As a result of the auction process, a total of 13 GOB leases were sold at or shortly after the auction, 3 GOB leases were withdrawn from the he auction because the debtors received "stalking horse bids" and will be the subject of separate sale motions, subject to higher bids, and 7 GOB leases were rejected. Bidding continues on stores in Scarsdale, NY and Mall of America, MN. Three GOB leases, all in Washington DC were not offered for sale at the auction because the debtors believe that they will be able to sell such leases on very favorable terms to a certain prospective purchaser that has expressed an interest in buying such leases as a package. FIRSTPLUS FINANCIAL: Pre-Hearing Outline of Disclosure Statement ---------------------------------------------------------------- Firstplus Financial Inc., debtor, filed a pre-hearing outline in support of its Disclosure Statement. The debtor explains how each of the six objections to the Disclosure Statement has been resolved and should be withdrawn. The sources of payment to creditors under the plan are as follows: Existing estate cash: approximately $15 million. WIB Note Proceeds: In the minimum principal amount of $18.5 million. Settlement Note Proceeds: $32 Million Note executed in favor of the Trust as part of the settlement with WIB and Group upon confirmation at the Effective date - all subject to a first lien to Beal Bank's debt of $15.3 million. Cash Flow Instrument: To be executed by the debtor in favor of the creditor trust under the plan on the Effective Date, and secured by the debtor's residual assets. The debtor sets out a chart of all entities and individuals involved in the plan, and sets forth all claims and treatment of claims. The liquidation analysis provides that unsecured creditors will receive approximately 8% of their claims if affiliate claims are paid pro rata, and 15% if affiliate claims are subordinated. Under the plan, unsecured creditors receive substantially more - 50% for electing creditors, of which 30% is to be paid within two years, and 100% for non-electing creditors by the year 2010. FOURS ON SEVENTH: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Fours on Seventh, LLC c/o Newmark & Co. Real Estate 125 Park Avenue New York, NY 10017 Petition Date: January 26, 2000 Chapter 11 Court: Southern District of New York Judge: Not listed yet Debtor's Counsel: Kevin J. Nash Finkel Goldstein Berzow Rosenbloom Nash 26 Broadway Suite 711 New York, NY 10004 (212)344-2929 Fax: (212)422-6836 Email: FinkGold@aol.com Total Assets: $ 22,225,547 Total Debts: $ 19,186,549 20 Largest Unsecured Creditors Kramer, Levin Naftalis Trade Debt $ 106,636 Fire Safety Advisors Trade Debt $ 29,240 Castle Oil Corp. $ 14,857 Harper Lawrence Inc. $ 14,593 Goldberg Waprin & Ustin Trade Debt $ 10,080 Elevator Doors, Inc. $ 9,500 Christie's Enterprises Trade Debt $ 6,278 Pump Works Trade Debt $ 3,891 Steven Raison $ 3,192 Rial Brothers Ltd., Trade Debt $ 2,800 Mage Electrical Contractors Trade Debt $ 2,101 Laszlo Bodak Engineer,PC Trade Debt $ 1,532 Resn Contracting Corp. Trade Debt $ 1,461 New York Combustion Corp. $ 852 Distinguished Flooring Trade Debt $ 838 Karl Plofker, PC $ 800 Rosenwach Tank Co. Inc. Trade Debt $ 692 Partners Cleaning, Inc. Trade Debt $ 541 Quality Fire Protection Trade Debt $ 490 Firesystem Testing Corp. Trade Debt $ 484 GBC BANKCORP: Announces Results of Problem Loan Auction ------------------------------------------------------- GBC Bancorp, parent company of General Bank, announced that a portion of its collateral consisting of the hotel, casino and RV parks or the Sunrise Suites loan was sold at a bankruptcy court auction yesterday for $42 million, according to a newswire report. The bank expects to realize about $28 million when the sale closes. Certain remaining collateral is scheduled for sale in the future. (ABI 27-Jan-00) IMPERIAL HOME DECOR: Taps McDonald, Hopkins, Burke & Haber ---------------------------------------------------------- The debtors, The Imperial Hoe Decor Group, Inc., seek to retain and employ McDonald, Hopkins, Burke & Haber Co., LPA as special counsel, to provide legal services with respect to issues arising under he labor, employment and employee benefits laws and statues of the US, issues arising under the lab or, employment and employee benefits laws and statutes of the US, issues relating to various litigations matters for the debtors; and certain miscellaneous services including limited real estate transactions, trademark, tradename, licensing and copyright matter, and the disposition of certain assets of the debtors. The debtors paid the firm approximately $700,000 during the year immediately preceding the Petition Date. The firm will charge for its services based on its current hourly rates. INTEREX INC: Files Bankruptcy ----------------------------- The Wichita Eagle reports on January 27, 2000 that Interex Inc., a Wichita computer parts company, filed a voluntary petition for protection under Chapter 11. According to Lance Chastain, company executive, the filing followed several months of effort to restructure Interex's financial affairs without involving the courts. HSBC Bank leads the list of creditors with more than $ 10 million. The second-largest creditor is Stratford Management, of Dallas, with $ 5 million. Interex is being represented by Wichita lawyer Ed Nazar, of Redmond & Nazar LLP. The company has about 80 U.S. employees in Wichita, Chicago and Atlanta. Interex was founded by then-college students Chastain and Gregory Menas, who sold his interest in 1996. The company develops and sells computer accessories and peripherals, including upgraded computer boards, cables, connectors, surge protectors, keyboards and workplace accessories. The products are manufactured in China and Taiwan as well as the United States. They are sold in more than 15,000 retail outlets, including Best Buy, Wal-Mart, Sam's Wholesale Club and CompUSA. ISONICS: Stock Owners Report Holdings ------------------------------------- The following entities beneficially own 4,000,000 shares of the common stock of Isonics Corporation: Eagle Picher Holdings Inc., Eagle-Picher Industries, Inc., Eagle-Picher Technologies , LLC, Granaria Holdings B.V., Granaria Industries B.V., and Joel P. Wyler. This represents 37.7% of the outstanding common stock of the company. The common stock consists of 4,000,000 shares of common stock subject to a Warrant held by Eagle-Picher Technologies, LLC. The Warrant was issued to Eagle-Picher Technologies, LLC under an Asset Purchase Agreement dated November 30, 1999 between Isonics, Eagle-Picher Technologies, LLC and Eagle-Picher Industries, Inc. In accordance with the Agreement, as payment in full for the Warrant, Eagle-Picher Technologies, LLC has agreed to manufacture and sell to Isonics 200 kilograms of Silicon-28. The source of funds to produce the Silicon-28 subject to the Silicon Purchase will be the working capital of Eagle-Picher Technologies. The purpose of the acquisition of the common stock is investment. Pursuant to the Agreement, Eagle-Picher Technologies, LLC has agreed that until December 1, 2001 it and its affiliates will not acquire any other shares of common, will vote all shares of such common stock owned by them with respect to the election or removal of directors of the company in accordance with the recommendation of a majority of the Board of Directors of Isonics and will not form, join, or in any other way participate in a partnership, pooling agreement, syndicate, voting trust, or other "group" with respect to voting securities of Isonics or enter into any agreement or arrangement or otherwise act in concert with any other person for the purpose of acquiring, holding, voting or disposing of such voting securities. Subject to the foregoing, these shareholders indicate theyv may acquire additional shares of common stock or dispose of such shares if they deem such transaction to be financially advantageous. They also reserve the right to change such intent if circumstances change. LEASING SOLUTIONS: Order Extends Time to Assume/Reject Leases ------------------------------------------------------------- By order entered on January 18, 2000, Judge Arthur S. Weissbrodt granted the debtors, Leasing Solutions Inc. an extension of time within which the debtor may assume or reject leases. The extension is to and including July 16, 2000. LENOX HEALTHCARE: Order Extends Time To Assume/Reject Leases ------------------------------------------------------------ By order dated January 18, 2000, the debtors, Lenox Healthcare, Inc., et al. are granted an extension of the period during which the debtors must assume or reject unexpired leases of nonresidential real property. The period within which the debtors must assume or reject the unexpired leases is extended by approximately 120 days through and including May 1, 2000. MARINER: US Trustee Schedules Organizational Meeting ---------------------------------------------------- The United States Trustee for Region III has scheduled an organizational meeting for the purpose of forming one or more official committees of the Debtors' creditors. That meeting will be held in Wilmington, at a location to be determined, at 9:00 a.m. on Friday, January 28, 2000. John "Jack" McLaughlin, Esq., is the attorney for the U.S. Trustee in charge of Mariner's chapter 11 cases. Contact the Office of the U.S. Trustee at 215-597-4411 for additional details. (Mariner Bankruptcy News Issue 2; Bankruptcy Creditor's Service Inc.) MCA FINANCIAL: Status Report To Court Regarding Plan ---------------------------------------------------- On September 8, 1999, the debtors filed a combined consolidated plan under Chapter 11 of the Bankruptcy Code and Disclosure Statement. The plan is a liquidating plan which includes substantive consolidation of the twelve debtors Funding sources for the liquidation include a sale of interests in real properties to HCDC and possibly, to the Pools, the e use of the Bank Group's cash collateral and available surcharges. The debtors continue negotiations of elements of the plan and the outstanding issues are as follows: The debtors and HCDC have agreed in principal to the purchase by HCDC of debtors' interest in certain properties upon confirmation of the plan.. Debtors have been negotiating with he Pools with respect to a similar sale. Those negotiations are ongoing but have not been finalized. For several months, the committees, the Bank Group and the debtors have engaged in settlement negotiations regarding the payment by the Bank Group to the estates of a settlement amount based on potential benefits of substantive consolidation to the Bank Group. The negotiations are not final. The Committees have raised the following issues: Scope of any release and injunction; Establishment of when the liquidating agent must give notice of sales, settlements and other actions; Status of settlement of the officers and directors suit and payment of defense costs' The level of committed funds to be used from the Bank Group's cash collateral and the sufficiency of the time period for a liquidation; The impact and possible benefit of substantive consolidation on certain other creditors; Provisions for the liquidating agent to succeed tot he rights of non-debtor parties, e.g. the Committees, to object tot he Bank Group's claims; and Certain objections to statements in the disclosure statement portion of the plan and the disclosure of all referenced agreements. The SEC has raised the following issues: The need for additional information regarding the sale of real estate interests to HCDC; A more detailed liquidation analysis; and What procedures will be employed for approval of the combined plan and disclosure statement. The debtors believe that the active, major constituents in the he cases still support the confirmation of a liquidating plan, and that such a plan has benefits and advantages over converting the case to Chapter 7. The debtors believe that a plan would be confirmable. MEDICAL RESOURCES: Reports Quarter Results ------------------------------------------ Medical Resources, Inc., with its subsidiaries, affiliated partnerships and joint ventures, specializes in the operation and management of diagnostic imaging centers. The company operates and manages primarily fixed-site, free-standing outpatient diagnostic imaging centers, and provides diagnostic imaging network management services to managed care providers. The company also develops and markets radiology information systems through its wholly-owned subsidiary, Dalcon Technologies, Inc. For the quarter ended September 30, 1999, total company net service revenues were $37,551,000 compared to $44,176,000 for the quarter ended September 30, 1998, a decrease of $6,625,000 or 15%. The company's net loss from continuing operations for the quarter ended September 30, 1999 was $41,061,000 compared to $6,196,000 for the quarter ended September 30, 1998. For the nine months ended September 30, 1999, total net service revenues of Medical Resources Inc. were $120,159,000 compared to $137,824,000 for the nine months ended September 30, 1998, a decrease of $17,665,000 or 13%. The company's net loss from continuing operations for the nine months ended September 30, 1999 was $44,586,000 compared to $13,126,000 for the nine months ended September 30, 1998. In general, healthcare providers have been experiencing gradual reimbursement rate declines over the past two years and this is expected to continue through 2000 due to factors such as the expansion of managed care in the United States and budgetary pressures placed on U.S. government agencies. SABRATEK CORP: Committee Objects To Woodward Capital Advisors ------------------------------------------------------------- The statutory committee of unsecured creditors objects to the application for order authorizing the employment and retention of Woodward Capital Advisors to GDS Technology, Inc. In addition to seeking to retain Woodward, the debtors have retained Jay Alix & Associates as restructuring and management consultants. The services of Jay Alix to date have included work relating to the sale of assets of Sabratek and LifeWatch. The Committee states that it needs more information and more time to determine whether the estate will benefit from Woodward's retention. The Committee does not understand advance approval of a success fee, and they believe that Woodward's retention is premature. SABRATEK CORP: Committee Taps The Bayard Firm ---------------------------------------------- The Statutory Creditors' Committee of Sabratek Corporation seeks approval to retain The Bayard Firm as co-attorneys for the committee. The firm will provide the following services: Provide legal advice with respect to the Committee's powers and duties as an official committee; Assist in the investigation of the acts, conduct, assets, liabilities, and financial condition of the debtors, the operation of the debtors' businesses, and any other matters relevant to the case or to the formulation of a plan of reorganization or liquidation; Prepare on behalf of the Committee necessary applications, motions, complaints, answers, orders, agreements and other legal papers; Review , analyze and respond to all pleadings filed by the debtors and appearing in court to present necessary motions, applications and pleadings and to otherwise protect the interests of the Committee. Bayard has advised the Committee that Bayard's hourly rates range from $275 per hour for directors, from $140 to $175 per hour for associates and from $70 to $95 per hour for paralegals. SABRATEK CORP: Committee Taps Weil, Gotshal ------------------------------------------- The Statutory Creditors' Committee of Sabratek Corporation seeks approval to retain the law firm of Weil, Gotshal & Manges LLP ("WG&M")as co-attorneys for the committee. WG&M understands that the committee also seeks to retain The Bayard Firm to act as co-attorneys with the WG&M in connection with these chapter 11 cases. WG&M and The Bayard Firm intend to coordinate carefully their efforts and clearly delineate their respective duties to avoid unnecessary duplication for effort. Among the services WG&M will be required to render on behalf of the committee are: Consultation with the committee, the debtors and the US Trustee concerning the administration of these cases; Investigation of the acts, conduct, assets, liabilities and financial condition of the debtors, the operation of the debtors' businesses, and the desirability of continuance of such business, and any matters relevant to these cases in the event and to the extent required by the Committee; To take all necessary action to protect the rights and interests of the Committee, including negotiations and preparation of documents relating to Chapter 11, plan, disclosure statement, and confirmation to such plan; To represent the Committee in connection with the exercise of its powers and duties under the Code. SAFETY COMPONENTS INC.: Moody's Lowers Ratings ---------------------------------------------- Approximately $130.0 Million of Debt Securities Affected. New York, January 26, 2000 -- Moody's Investors Service lowered the rating of Safety Components International Inc.'s (SCI) $90 million of 10.125% senior subordinated notes, due 2007, to Ca from Caa1 and lowered the ratings of its Senior Unsecured Issuer Rating to Ca from B3. SCI's $40 million secured revolving credit facility rating has been lowered to Caa1 from B2. The senior implied rating has been lowered to Caa3 from B2. The outlook is negative. The downgrades and negative outlook reflect our expectation for recovery value of the debt based on the deterioration in Safety Components' financial performance, uncertainty regarding its previously issued financial statements and lack of liquidity. On January 13 the company announced it would not make the January interest payment on its senior subordinated notes and would use the 30 day grace period to continue discussions with its senior lenders and bondholders. In addition, Moody's expects that the company will need to undertake a comprehensive debt restructuring which may include the conversion of the senior subordinated notes into equity. As of 9/25/99 the company's debt was substantial at $150 million. As a part of the company's restructuring, management is examining strategic alternatives with regard to its non-core assets. However, Moody's considers the company's current valuation to be materially less than the company's outstanding obligations. Safety Components International, Inc., headquartered in Greenville, South Carolina, is an independent supplier of automotive airbag fabrics and cushions, with operations in North America and Europe. SCHEIN PHARMACEUTICAL, INC.: Moody's Lowers Rating Of Sr Notes -------------------------------------------------------------- Approximately $216 Million of Long-Term Debt Affected New York, January 26, 2000 -- Moody's Investors Service lowered the ratings of Schein Pharmaceutical, Inc.'s $50 million senior notes, due 2004, to Caa1 from B3, its $66 million senior secured bank term loan and $100 million revolving credit facility, maturing 2001, to B3 from B2, and placed the credit under review for possible further downgrade. The senior unsecured issuer rating is Caa2. The senior implied rating is B3. The rating outlook is negative. The rating action is prompted by the announcement by the company on January 25, 2000 that it will report a loss for the fourth quarter of 1999 as the result of lower gross margins in its generic drugs, higher operating costs and a substantial restructuring charge related to the write down of intangible assets associated with its sterile operations, that as a result of the fourth quarter loss the company is not in compliance with its bank credit facility, and it is seeking a waiver of covenant compliance. The company further announced that it plans to reduce its headcount by about 15% (about 200 people) in connection with its modified sterile business plan and the general business functions, and that its board had engaged financial advisors to explore options, including the possible sale of the company. Moody's understands that the financial advisors were engaged in part because certain members of the he Schein family, which owns 60% of the company's outstanding shares through a voting trust, wish to explore the possible sale of part or all of their interests. Voting control of the Schein family voting trust will change to the Schein family from Martin Sperber, Chairman and CEO on March 1, 2000. Moody's is concerned about the company's liquidity, the lack of resolution of the issues which the company has with the FDA in its Steris and Marsam facilities, and the uncertainty about the level of support that the financial community will provide if problems persist. The Caa1 rating of the $50 million senior notes, which are guaranteed by domestic subsidiaries, reflects their effective subordination to substantial senior secured debt. The B3 rating of the $166 million senior secured credit facilities, which are guaranteed by domestic subsidiaries and secured by substantially all assets of the company, reflects that the collateral coverage is thin from a tangible viewpoint and is facing further erosion from writedowns. Moody's review will focus on the company's liquidity, the terms of any waiver obtained from its banks, fourth quarter results, the company's business plan, and the results of its communications with the FDA. Moody's previously lowered the ratings of Schein on October 8, 1998 with negative outlook to reflect Moody's concerns about the company's near and medium term liquidity due to the effect of the FDA seizure action against products manufactured at the Steris Laboratories, Inc. subsidiary in Phoenix, Arizona, as well as potential loss of market share, and subsequent related charges and costs (including a $135 million restructuring charge). Under a consent agreement Steris began implementing a corrective action plan and in April 1999 the FDA permitted the resumption of INFeD manufacturing at Steris, subject to review of each lot. In mid-1999, the FDA performed an inspection of the company's Marsam subsidiary that resulted in a voluntary recall by Schein of all Marsam products (which represented about 7% of the company's sales and a smaller percentage of gross profits over the four quarters ended March 1999). Moody's understands that the company has not received a response to its proposed corrective action plan with respect to Marsam made to the FDA in September 1999. With regard to Steris, the company believes that it is in compliance with the corrective actions plan and expects a FDA inspection possibly in the summer and manufacturing approval potentially later in 2000. For the third quarter ended 9/30/99 the company reported revenues of $124 million and operating income of $12 million. However, Moody's notes that in the third quarter, the company sold rights to certain products for $13.5 million, which was recorded as revenue and income for the third quarter, in addition to recording a charge of approximately $17 million primarily relating to Marsam inventory and product recalls. Schein Pharmaceutical, Inc., headquartered in Florham Park, New Jersey, develops, manufactures and markets primarily generic pharmaceutical products. SERVICE MERCHANDISE: Spending Less Than Expected ------------------------------------------------ Service Merchandise Co. says it is spending less than expected during its bankruptcy reorganization and its losses will be lower than projected. During a Bankruptcy Court hearing Tuesday, the company said its losses for the nine months ending Dec. 31 will be $70 million, about half of what it had expected during its Chapter 11 bankruptcy reorganization. The hearing was held on the company's request to wait until 2001 to file its own bankruptcy reorganization plan without facing competing plans from others. A group of bondholders opposed the request, saying their study shows the company is worth more to its creditors dead than alive. Company CEO Sam Cusano testified Service Merchandise surpassed all of its performance targets during the nine-month stabilization period ended Dec. 31. Preliminary net operating earnings were 40 percent higher than the target of $35 million for the nine-month period, the company said. SIDANKO: Tyumen Oil Endorses Ratification of Pact ------------------------------------------------- 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). SUN HEALTHCARE GROUP: Updates Progress To SEC --------------------------------------------- Sun Healthcare Group, Inc. reports to the SEC that on October 14, 1999, Sun Healthcare Group Inc. and most of its U.S. operating subsidiaries filed voluntary petitions for protection under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the District of Delaware. The company is currently operating its business as a debtor-in-possession subject to the jurisdiction of the Bankruptcy Court. On November 12, 1999, the Bankruptcy Court granted final approval of the DIP Financing Agreement. As of November 27, 1999, up to $149.0 million was available to the company under the DIP Financing Agreement, of which amount the company had borrowed $55.1 million, and had issued $7.5 million in letters of credit. The company's financial reports for the quarter and six months ended September 30, 1999 show net revenues of $629,579 and net losses of $236,856. For comparison, the same period in 1998 showed net revenues of $814,408 and net losses of $1,030. The nine months ended September 30, 1999 showed net revenues of $1,903,525 and net losses of $938,601. In the equivalent nine months of 1998 net revenues were $2,308,290 and net income of $7,990. TV FILME INC: Reports Filing Plan of Reorganization --------------------------------------------------- TV Filme, Inc. (OTC Bulletin Board: PYTV) reported today that it has filed this morning a voluntary petition under chapter 11 of the United States Bankruptcy Code, together with a pre- negotiated Plan of Reorganization and the Disclosure Statement relating to such Plan, with the U.S. Bankruptcy Court for the District of Delaware. A hearing for approval of the Disclosure Statement is expected to be set for late February, 2000. Following approval, ballots respecting the Plan will be circulated to those parties entitled to vote on it, and a hearing to confirm the Plan will be scheduled. Holders of more than 65% of the aggregate principal amount of TV Filme's outstanding 12-7/8% senior notes due 2004 (the "Senior Notes") have agreed to support and vote in favor of the restructuring. The Company's restructuring represents a consensual arrangement, pursuant to a Restructuring Agreement dated January 24, 2000, with holders of more than 65% of the Company's outstanding Senior Notes. TV Filme, Inc. expects that this restructuring will significantly reduce the Company's existing long-term debt, and enable the Company to continue the build-out of its recently acquired multi- point, multi-channel distribution systems ("MMDS") licenses. The restructuring of the Company's indebtedness provides, among other things, as follows: The senior noteholders will receive a $25 million cash payment and their existing notes will be converted into (i) New Senior Secured Notes in the aggregate principal amount of at least $35 million, subject to adjustment, with a five year maturity and interest of 12% per annum (interest payable-in-kind at the option of the reorganized company through the first 24 months), and (ii) 80% of the new common equity of the reorganized company. Current management will receive 15% of the new common equity, and existing common stockholders of TV Filme, Inc. will receive 5% of the new common equity of the reorganized company in exchange for their current stake. The Plan provides that the reorganized company will be a newly- formed Cayman Islands holding company, and that the New Senior Secured Notes will be issued by ITSA -- Intercontinental Telecomunicacoes Ltda., an existing Brazilian subsidiary of TV Filme. Hermano Studart Lins de Albuquerque, Chief Executive Officer of TV Filme, Inc. said, "We are pleased to announce the execution of this agreement with our largest bondholders and the filing of the Plan. This restructuring represents the result of important negotiations with our investors and will place TV Filme in a much stronger position." Mr. Albuquerque emphasized that the restructuring is being implemented at the U.S. holding company level and will not affect the Company's operations in Brazil. "We will continue to provide our customers with the highest quality of programming, service, and reliability." Headquartered in Brasilia, Brazil, TV Filme, Inc. is a leading provider of subscription television, data and Internet services in mid-sized markets in Brazil. The Company has established wireless cable operating systems in Brasilia, Goiania, Belem and Campina Grande, which together comprise over 1.4 million households. Also, the Company holds wireless cable licenses in the cities of Bauru, Caruaru, Franca, Porto Velho, Presidente Prudente and Uberaba, which together comprise nearly 0.4 million households. TV Filme, Inc. reports all results in U.S. dollars and prepares its financial statements in accordance with U.S. generally accepted accounting principles. BOND PRICING FOR WEEK OF January 24, 2000 ========================================= DLS Capital Partners, Inc., bond pricing for week of January 24, 2000 Following are indicated prices for selected issues: Acme Metal 10 7/8 '07 16 - 18 (f) Asia Pulp & Paper 11 3/4 '05 83 - 84 E & S Holdings 10 3/8 '06 37 - 40 Fruit of the Loom 8 7/8 8 - 10 (f) Genesis Health 9 3/4 '05 34 - 36 Geneva Steel 11 1/8 '01 14 - 16 (f) Globalstar 11 1/4 '04 70 - 72 Hechinger 9.45 '12 9 - 11 (f) Integrated Health 9 1/4 '08 7 - 9 (f) Iridium 14 '05 4 - 5 (f) Loewen 7.20 '03 50 - 51 (f) Pathmark 11 5/8 '02 30 - 32 Pillowtex 10 '06 39 - 41 Revlon 8 5/8 '08 46 - 47 Rite Aid 6.70 '01 78 - 80 Service Merchandise 9 '04 11 - 13 (f) Sunbeam 0 '18 15 - 16 TWA 11 3/8 '06 36 - 38 United Artists 9 3/4 '08 8 - 12 Vencor 9 7/8 '08 18 - 20 (f) ********* 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 * * *