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/raid1/www/Hosts/bankrupt/TCR_Public/000207.MBX T R O U B L E D C O M P A N Y R E P O R T E R Monday, February 7, 2000, Vol. 4, No. 26 Headlines ABRAXAS PETROLEUM: Registers Senior Secured Notes With SEC ACME METALS: Seeks Extension of Exclusivity AGRIBIOTECH: Updates Chapter 11 Filing AMERICAN HEALTHCHOICE: Completing Plan of Reorganization AUTOINFO: Announces Pre-packaged Chapter 11 EAGLE GEOPHYSICAL: Disclosure Statement in Support of Plan ELDER BEERMAN: Investors Acquire Bee-Gee Shoe Corp. FILENE'S BASEMENT: Value City Department Stores to Acquire Filene's GENERAL RENTAL: Bank of America Responds To Committee's Objections LAROCHE INDUSTRIES, INC.: S&P Downgrades: Ratings Still Watch Negative LENOX HEALTHCARE: Seeks To Reject Executory Contracts With NCS LONDON FOG: Seeks Authority to Obtain Post Petition Financing MARINER POST: Chase Equity Assoc Divests Itself of Stock MARINER POST: Health's Motion For Approval of $50M DIP MARINER POST: MPAN's Motion For Approval of $100 M DIP Financing MAXICARE HEALTH PLANS: Heartland Advisors Reports Stock Holdings MCA FINANCIAL: Seeks Additional Use of Cash Collateral NEW YORK BAGEL: Files Chapter 11 NEXTEL: Seeks FCC Waiver to Bid for Wireless Licenses NEXUS TELOCATION SYSTEMS: Soros Fund Management Reports Stock Holdings NU-KOTE HOLDING: Order Approves Bidding Procedures NU-KOTE HOLDING: Order on Disclosure Statement OPTEL: Seeks Authority For Special Retention Plan PAGING NETWORK: S&P Cuts Snr Sub Notes PILLOWTEX: Capital Technology Inc. Reports Stock Holdings PINNACLE BRANDS: Order Extends Exclusive Periods SYMONS INT'L GROUP, INC.: S&P Lowers Pref'd Secs Rtg to 'D' TAL WIRELESS NETWORKS: Plans to Liquidate Assets TALK AMERICA: Order Approves Disclosure Statements TRANSTEXAS GAS: Chanoco Corp's Second Memorandum of Argument SUN HEALTHCARE: Motion To Assume and Assign Sunbridge Leases To ASLLP SUN TELEVISION & APPLIANCES: Reports Confirmation of Plan to SEC TV FILME: Case Summary US LEATHER: To Close Milwaukee Plants VENCOR: Subject of Medicare Reimbursement Issues ********* ABRAXAS PETROLEUM: Registers Senior Secured Notes With SEC ---------------------------------------------------------- Abraxas Petroleum Corporation has registered with the Securities & Exchange Commission $5,000,000 Principal Amount 11 1/2% Senior Secured Notes due 2004, Series A 163,354 Shares of Abraxas Common Stock, 163,3054 Contingent Value Rights for selling security holders. The company is not offering any notes, shares of common stock, or contingent value rights for sale and will not receive any of the proceeds from the sale of these securities by the selling security holders. The notes: o accrue interest from November 1, 1999, at a fixed annual rate of 11 1/2% paid every six months on May 1 and November 1, commencing May 1, 2000 o are secured by a second lien or charge on substantially all of Abraxas' proved crude oil and natural gas assets, natural gas processing plants and Grey Wolf stock owned by the company o are guaranteed by Sandia Oil & Gas Corp. and Wamsutter Holdings Inc. The Abraxas common stock The contingent value rights: o may result in the distribution of additional shares of Abraxas common stock under certain circumstances. ACME METALS: Seeks Extension of Exclusivity ------------------------------------------- The debtors, Acme Metals Incorporated and its debtor affiliates request the entry of an order extending their exclusive proposal period and exclusive solicitation period for approximately 120 days, to and including May 30, 2000 and July 31, 2000 respectively. According to the debtors, the extensions are both appropriate and necessary to afford the debtors sufficient time to negotiate a plan of reorganization and acquire exit financing on the best possible terms. The debtors believe that exit financing under the Steel Act would be in the best interests of their estates and creditors. If the guarantee application is approved and the Proposed Exit financing guaranteed by the Board, the debtors believe financing on better terms could be found no where else. The debtors have also undertaken a formal process of soliciting third-party indications of interest in a possible sale or investment transaction involving certain of their operating assets. The debtors do not have a specific transaction to present at this time. AGRIBIOTECH: Updates Chapter 11 Filing -------------------------------------- AgriBioTech Inc. (ABT) (Nasdaq CMS:ABTXQ) provided the following updates on its Chapter 11 filing. The petitions for ABT and its operating subsidiaries were filed on Tuesday, Jan. 25, 2000. The case numbers are AgriBioTech Inc. No. 00-10533lbr; AgriBioTech Inc. Canada No. 00-10534lbr; Las Vegas Fertilizer Co., Inc. No. 00-10535lbr; Garden West Distributors Inc. No. 00-10536lbr; and George W. Hill & Co., Inc. No. 00-10537lbr, which are all filed with the U.S. Bankruptcy Court for the District of Nevada in Las Vegas. Within a few days, the company's Web site (http://www.agribiotech.com)will contain an extensive section on Chapter 11 matters, including a schedule of events and a link to the Las Vegas court. ABT and its subsidiaries are debtors in possession, and management is authorized to operate the businesses. ABT does not currently have a post-petition financing agreement, and is negotiating with its current lending syndicate, led by Bank of America Business Credit, for that financing. ABT is currently using cash collateral under an interim arrangement with its pre-petition lenders. ABT has assembled a team of experienced professionals to assist its efforts. Financial expertise is being supplied by the Corporate Restructuring Group of Arthur Andersen's Los Angeles office. The nationally recognized bankruptcy firm of Pachulski Stang Ziehl Young & Jones serves as bankruptcy counsel. ABT has begun exploring the sale of non-strategic assets. Interest has been shown in such assets by potential purchasers. Dr. Thomas B. Rice, a member of the board of directors, executive vice president and director of research, has resigned his board and officer positions. James Hopkins had previously resigned his board position for health reasons. ABT is currently in discussions with, and providing information to, Nasdaq officials regarding continued listing and resumption of trading of its shares. A resumption of trading is not expected soon. AgriBioTech Inc. is a vertically integrated, full-service seed company specializing in the forage and turfgrass sector, complete with research and development of proprietary seed varieties, seed processing plants, and a national and international distribution and sales network. AMERICAN HEALTHCHOICE: Completing Plan of Reorganization -------------------------------------------------------- American HealthChoice, Inc. (OTCBB:AHIC) announced that the Company is in the process of completing its Plan of Reorganization, which it intends to file, along with a Disclosure Statement, with the Bankruptcy Court by the third week of February. Dr. J. W. Stucki, President and Chief Executive Officer of American HealthChoice stated, "I believe that the terms of the proposed plan are fair to all creditors and parties in interest and I expect that the plan will be approved expeditiously." An important component of the reorganization is the conversion of approximately $3,400,000 of secured debt into equity. Also, American HealthChoice has executed a letter of intent to acquire three established clinics located in South Texas with expected gross annual revenue of $5,000,000 and expected cash flow of approximately $1,500,000. The purchase price is approximately $6,000,000 with $900,000 in cash at closing and the remainder in a note, which will be convertible into common stock if annual cash flow targets are achieved over a three year period. The acquisition and future working capital requirements are expected to be funded through an infusion of approximately $1,500,000 in new equity. The debt conversion and the acquisition of the clinics will significantly increase the number of outstanding shares of common stock. In this regard Dr. Stucki stated, "Although the number of outstanding shares will increase, shareholder value will be enhanced through a healthy balance sheet and future profits at the acquired clinics." After Confirmation of the Plan of Reorganization, the Company intends to pursue additional acquisitions. The Board of Directors is currently reviewing proposals with the objective of enhancing and maximizing shareholder value. American HealthChoice, Inc. is a provider of healthcare services and operates primary care clinics located in Texas and Louisiana. Its stock is quoted on the OTC Bulletin Board under the symbol "AHIC." AUTOINFO: Announces Pre-packaged Chapter 11 ------------------------------------------- AutoInfo Inc., Stamford, Conn., announced that it has filed a disclosure statement and reorganization plan under chapter 11, according to a newswire report. The company said that the plan provides for the issuance of one share of common stock and a cash payment of $.03 for each dollar of approximately $9.5 million of unsecured debt. AutoInfo said that the requisite number and dollar amount of its unsecured creditor group has voted to support the plan. EAGLE GEOPHYSICAL: Disclosure Statement in Support of Plan ---------------------------------------------------------- Atlantic Horizon, Inc's assets are comprised of the vessel Atlantic Horizon and certain seismic and related equipment used on the vessel. The debtor's plan of liquidation provides for the sale of the property to Aker Geo Seismic AS, a Norwegian company. The purchase price is $39,600,000. The plan of liquidation provides that the proceeds will be distributed to the creditors of the debtor in respect of priorities. Treatment of classes as follows: Class 1 - Allowed Secured Claim of Heller Financial Leasing, Inc. - to be paid; Unimpaired Class 2 - Allowed Secured Claim of Input/Output, Inc. - to be paid; Unimpaired Class 3 - Allowed Secured Claim of Wells Fargo Business Credit - a portion will be paid in cash after Classes 1 and 2; Unimpaired; Class 4 - Miscellaneous Maritime and Statutory Lien Claimants - to be paid the allowed amount of their secured claims in full in cash consistent with their respective lien priorities. Unimpaired Class 5 - Allowed Unsecured Claims - to be paid their pro rata distribution of the cash proceeds after payments to classes 1-4. A separate interest bearing account shall be established to hold such funds pending resolution of claims objections. These funds may be consolidated with other cash proceeds from the related debtors' global plan of reorganization and distributed at one time in order to reduce administrative costs. Impaired Class 6 - Equity Interests - to be canceled. ELDER BEERMAN: Investors Acquire Bee-Gee Shoe Corp. --------------------------------------------------- Paragon Capital, of Needham, Mass., announced that it will provide a $10 million line of credit to Bee-Gee Shoe Acquisition, Inc., a wholly-owned subsidiary of Jam Shoe Concepts, of Dayton, Ohio. Jam Shoe Concepts operates throughout the Midwest under the names Shoebilee! and El-Bee Shoe Outlet. A team of investors is forming the company, after acquiring Bee-Gee Shoe Corp. from department store giant Elder-Beerman Stores Inc. (Nasdaq: EBSC). With financing from Paragon, the company intends to convert its El-Bee stores into Shoebilee! stores and position the company for acquisitions and renewed growth. In 1995, Elder-Beerman entered Chapter 11 bankruptcy reorganization. Before it emerged in 1997, the company scaled back its Bee-Gee operations, which it had owned for almost half a century. In fall 1999, deciding that it needed to focus on its core business, Elder-Beerman announced it would sell Bee-Gee to the investor team of merchant bank Albertine Industries, based in Washington, D.C., and private equity investment firm Ark Capital, based in Chicago. The Paragon funding is intended to finance the purchase and help Jam Shoe Concepts, the new parent company, grow under its new ownership. Albertine Industries and Ark Capital are confident that the chain can thrive as an independent company with new working capital. FILENE'S BASEMENT: Value City Department Stores to Acquire Filene's ------------------------------------------------------------------- Value City Department Stores, Inc. (NYSE: VCD) and Filene's Basement Corp. (OTC:BSMTQ) announced today that Base Acquisition Corp., a wholly-owned subsidiary of Value City, has signed a definitive purchase agreement to acquire substantially all of the assets and assume certain liabilities of Filene's Basement. The closing is anticipated to take place between the end of February and mid-March. In the interim, Base Acquisition will assume temporary management of Filene's Basement pursuant to a Management Agreement. Both agreements are subject to Bankruptcy Court approval. Filene's Basement has been operating its business as a debtor-in-possession subject to the jurisdiction of the United States Bankruptcy Court for the Eastern District of Massachusetts since filing for relief under Chapter 11 of the United States Bankruptcy Codes on August 23, 1999. The company, which will retain the valuable Filene's Basement name, currently operates 14 Filene's Basement and eight Aisle 3 stores. It plans to close all of the Aisle 3 stores and is considering re-opening its three Filene's Basement stores in Washington D.C. This would leave Filene's Basement with key stores in Washington, New York, Chicago and Massachusetts, including its flagship store located in downtown Boston. Chairman and CEO Sam Gerson commented, "We are delighted with the sale to Value City, which has a reputation for being a business builder. We will now focus on re-energizing our core stores and filling them with high-quality, bargain-priced, brand name merchandise that made us a retailing legend. To partner with a fellow "off price" retailer who understands our business will make for a smooth transition and a much better company going forward." He added, "Our collective contacts with European fashion houses and American designers will allow Filene's Basement to stock our stores with the types of special bargains which made us famous." Value City Department Stores Inc. currently operates 105 full-line, off-price department stores offering men's, women's and children's apparel, shoes, housewares, domestics, toys, sporting goods, jewelry and health and beauty aids. The stores are located in the midwest, mid-Atlantic and southeast, with thirteen new stores scheduled to open in the St. Louis metropolitan area with the next 90 days. Additionally, Value City owns and operates the 58-store DSW Shoe Warehouse chain with locations, in major cities throughout the U.S., including stores in Framingham and Holyoke, Massachusetts. Since 1984, Value City has had a distribution center in Lynnfield, Massachusetts, which will assist in keeping the regional stores stocked with new merchandise on a regular basis. Mike Tanner, Value City's President said, "We feel that our acquisition of Filene's Basement, an institution in Boston, is a good fit with our deal-driven' merchandise strategy. This union will strengthen our merchandising team and give us greater buying power in the off-price industry." Jay Schottenstein, Chairman and CEO of Value City, added, "This combination will make us the premier deal-maker in the industry for fabulous buys that will excite both Value City and Filene's Basement customers and will provide synergies for key areas of our business." Based on the proposed purchase agreement, it is not expected there will be any proceeds remaining for stockholders. The total price to purchase all of the assets, and assume specified liabilities, was approximately $89 million, subject to adjustment. The agreement contemplates payment in full to secured creditors and post-petition unsecured claims. Any remaining proceeds will be applied against pre-petition unsecured claims. The agreement is subject to a number of conditions before closing and to approval of the Bankruptcy Court. GENERAL RENTAL: Bank of America Responds To Committee's Objections ------------------------------------------------------------------ In response to the objection of the Official Committee of Unsecured Creditors to the debtor's motion to obtain post petition financing, the Lender, Bank of America, NA files a response. As of the Petition Date, the lender was owed the principal sum of $9.13 million. Subsequent to the entry of the Interim Financing Order, the Lender has made postpetition advances in the approximate amount of $909,000. The lender states that the committee incorrectly argues that the terms of the DIP facility benefit only the lender and work to the detriment of the debtor and creditors. The lender states that the debtor lacks sufficient cash without the DIP and it is the lender who is taking the economic risk of the debtor's continued business operations, by providing the financing necessary to cover the cash shortfall. The lender states that the DIP facility does not enhance the lender's position, but only increases its debt, while the value of the lender's collateral will continue to diminish. The lender states that there is no cross collateralization under the DIP facility, and the lender is not obtaining post-petition liens for the full amount of its pre-petition indebtedness. Further, the lender states that the debtor cannot survive on cash collateral alone and the Committee lacks standing to request the entry of an order authorizing the use of cash collateral. The Lender states that it is not receiving objectionable interest charges and adequate protection payments. The Lender is not requesting a post-petition lien on avoidance actions and the lender supports its protections, including release provisions, a prohibition on additional surcharges, and that a $60,000 carve-out for the committee's professionals is adequate through February 29, 2000. LAROCHE INDUSTRIES, INC.: S&P Downgrades: Ratings Still Watch Negative ------------------------------------------------------------------------ Standard & Poor's lowered its corporate credit and bank loan ratings on LaRoche Industries Inc. to single-'B' from double-'B'-minus and its subordinated debt rating to triple-'C'-plus from single-'B'. The ratings remain on CreditWatch with negative implications, where they were placed Jan. 15, 1999. The ratings downgrades reflect deterioration of the financial profile stemming from weaker-than-expected financial performance, rising debt levels and constrained financial flexibility, tempered by somewhat-improved liquidity from a recent agreement to increase bank facility availability and waive financial covenants. LaRoche is a midsize producer in several highly competitive commodity chemical markets -- primarily nitrogen products (which include nitrogen fertilizer and blasting grade ammonium nitrate) and chlor-alkali chemicals (in the U.S. and Europe) -- with annual revenues near $370 million. Most of these businesses are sensitive to industry supply-and-demand dynamics and the volatility of raw material and energy costs. Profitability and cash flows have been adversely affected by weak demand and global overcapacity in nitrogen markets as well as the recent slump in chlor-alkali demand and pricing. Debt levels have risen, in part, from several acquisitions that broadened the firm's geographic presence. Credit protection measures are very weak: operating margins are in the low single-digit area, the ratio of funds from operations to total debt is negligible and earnings before interest, taxes, depreciation, and amortization (EBITDA) interest coverage is below 1.0 times. The revised ratings incorporate expectations of a near-term strengthening in cash flow generation. There is increasing evidence that pricing and product margins have begun to firm in chlor-alkali, and the company has regained full production at its Louisiana facility (idled by an explosion at an adjacent site last summer). Also, a recent international trade ruling should limit imports of nitrogen fertilizer products from Russia, aiding that business segment. Thus, modest improvements in profitability should be realized near term that would improve liquidity. Standard & Poor's will continue to monitor operating performance and the firm's discussions with lenders. Without a steady strengthening of the financial profile, a further downgrade would be likely, Standard & Poor's said. LENOX HEALTHCARE: Seeks To Reject Executory Contracts With NCS -------------------------------------------------------------- Lenox Healthcare, Inc., debtor seeks approval of the debtor's rejection of certain executory contracts, agreements for rehabilitation services between the debtor and NCS Services, Inc. regarding three facilities owned by G&L Hampden, LLC, effective as of January 6, 2000. The NCS Agreements consist of three agreements entered into by the debtor, as manager of each of the Hampden facilities for the management of rehabilitation services and also including daily case management, scheduling, training, policy and procedure maintenance, quality assurance audits, management reporting, billing, recruitment and development, and supervision of restorative programming at the Hampden Facilities. As a result of a certain stipulation terminating the debtor as manager of the Hampden Facilities, the debtor believes that it is in the best interest of the estate to reject the NCS Agreements. LONDON FOG: Seeks Authority to Obtain Post Petition Financing ------------------------------------------------------------- The debtors seek the court's approval to incur up to an additional $30 million in post-petition financing to be provided by the Subordinated DIP Lenders and to reimburse the Subordinated DIP Lenders for their reasonable out-of-pocket costs and expenses and to provide them with a $50,000 deposit to secure such reimbursement obligation. The debtors' discussions with the Subordinated DIP Lenders are ongoing, and the debtors will supplement this motion in advance of the hearing. The debtors believe that the proposed modifications are fair will improve the debtors' liquidity. The debtors have not proposed an increase to the overall commitment provided by the Senior DIP Lender under the Senior DIP Facility, but have merely proposed modifications that will improve the debtors' liquidity. The debtor asks that the e court approve the proposed modifications to the Senior DIP Facility. MARINER POST: Chase Equity Assoc Divests Itself of Stock -------------------------------------------------------- Chase Equity Associates, LLC, formerly a stockholder of Mariner Post Acute Network Inc. has divested itself of all common stock in the company. Under the terms of a Transfer Agreement and a Put Option Agreement, dated January 14, 2000, Chase Equity Associates, in a private transaction, sold 2,589,773 shares of the company's common stock to Credit Suisse First Boston Management Corporation, a privately held affiliate of Credit Suisse First Boston, a Swiss bank, for consideration consisting of an aggregate of (i) $376,010, (ii) 15,040 shares of 9.75% Redeemable Preferred Stock, par value $1.00 per share of Credit Suisse First Boston Management Corporation and (iii) a "put option" granted to Chase Equity Associates of the Preferred Stock of Credit Suisse First Boston Management Corporation requiring the New York branch of Credit Suisse First Boston to purchase the Preferred Stock held by Chase Equity Associates under certain circumstances. After giving effect to the sale, Chase Equity Associates will not be the record owner of any shares of Mariner Post Acute Network's common stock. The disposition of the company's common stock has been made by Chase Equity Associates for investment purposes. MARINER POST: Health's Motion For Approval of $50M DIP ------------------------------------------------------ Under the provisions of a Debtor-in-Possession Credit Agreement dated as of January 20, 2000, PNC Bank, National Association, individually and as Administrative Agent, Collateral Agent and LC Issuing Bank, First Union National Bank, individually and as Syndication Agent, and Bank One, N.A., Comerica Bank, Credit Lyonnais New York Branch, and Bank Austria Creditanstalt-Corporate Finance, Inc., as Lenders, agree to lend up to $50,000,000 to Mariner Health Group, Inc., and its debtor-subsidiaries. All borrowings under this DIP Financing Facility by the HEALTH Debtors shall constitute allowed super-priority administrative expense claims in HEALTH's Chapter 11 Cases and are secured by a first priority Lien on substantially all of the HEALTH Debtors' real, personal and mixed property, including a pledge of all of the capital stock of each of the HEALTH Subsidiaries. The DIP Facility extends credit to the HEALTH Debtors in two layers: * $40,000,000 of Tranche A Loans and * $10,000,000 of Tranche B Loans from which the HEALTH Debtors may borrow, repay such borrowing and reborrow pursuant to the terms of the Credit Agreement, subject to a Borrowing Base equal to the sum of (i) $7,500,000 and (ii) the non-public amount shown in a Year 2000 DIP Budget supplied by the HEALTH Debtors to the Lenders. The DIP Facility matures on the earliest of: (A) January 18, 2001, (B) the effective date of a joint plan of reorganization in the Chapter 11 Cases, as specified in such plan, (C) the date of (x) termination of the Borrowers' exclusive right to file a plan or plans of reorganization in any of the Chapter 11 Cases other than as a result of the filing of a plan or plans of reorganization in the Chapter 11 Cases acceptable to the Required Lenders or (y) filing of any plan of reorganization or any modification to any previously filed plan of reorganization, in any such case without the prior written approval of two-thirds of the Lenders, and (D) the date of any sale, transfer or other disposition of all or substantially all of the assets or stock of the HEALTH Companies. Borrowings under the DIP Facility accrue interest: * in the case of Tranche A Loans, at the Base Rate plus 2.50% and * in the case of Tranche B Loans, at the Base Rate plus 3.00%. In consideration of the Lenders' agreement to extend this financing, the Debtors agree to pay a laundry list of fees: (a) a $1,250,000 Closing Date Financing Fee; (b) a $500,000 Arrangement Fee; (c) a $5,000 Administrative Agent's Fee each month; (d) a 0.75% per annum Commitment Fee payable on every dollar not borrowed; (e) all fees and expenses incurred by the Lenders' Professionals All of the HEALTH Debtors' Obligations under the DIP Financing Facility shall constitute allowed administrative expense claims in the Chapter 11 Cases against Borrowers with priority under 11 U.S.C. Sec. 364(c)(1) of the Bankruptcy Code over any and all other administrative expenses of the kind specified or ordered pursuant to any provision of the Bankruptcy Code, including, but not limited to, Sections 105, 326, 328, 503(b), 506(c), 507(a), 507(b) and 726 of the Bankruptcy Code, subject only to a $2,000,000 Carve-Out, for payment of professional fees, fees payable to the Clerk of the Court and the United States Trustee pursuant to 28 U.S.C. Ses. 1930(a)(6). (Mariner Bankruptcy News Issue 3; Bankruptcy Creditor's Service Inc.) MARINER POST: MPAN's Motion For Approval of $100 M DIP Financing ---------------------------------------------------------------- Under the terms of a Revolving Credit and Guaranty Agreement dated as of January 18, 2000, led by Chase, as Agent, agrees to lend up to $100,000,000 to Mariner Post- Acute Network, Inc., as Borrower, and its direct or indirect debtor- subsidiaries, as Guarantors, through January 19, 2001. The DIP Facility allows the MPAN Debtors to borrow money on a super-priority secured basis to fund their working capital and other general corporate needs consistent with a non-public Budget delivered to the Lenders (which, the Credit Agreement provides, includes the completion, for not more than $8,800,000, of certain properties that, on the Filing Date, were partially constructed with the proceeds of loans from FBTC Leasing Corp.). (Mariner Bankruptcy News Issue 3; Bankruptcy Creditor's Service Inc.) MAXICARE HEALTH PLANS: Heartland Advisors Reports Stock Holdings ---------------------------------------------------------------- The investment adviser firm of Heartland Advisors, Inc. beneficially owns 3,549,900 hares of common stock of Maxicare Health Plans, Inc., exercising sole dispositive power over the shares. Heartland also exercises sole voting power over 2,469,150 shares of the stock. With the 3,549,900 shares held Heartland holds 19.8% of the outstanding common stock of the company. MCA FINANCIAL: Seeks Additional Use of Cash Collateral ------------------------------------------------------ On September 8, 1999, the debtors filed a combined plan and disclosure statement which provides for an orderly liquidation and distribution of the debtors' remaining assets. The debtors are in the process of amending the plan and have been engaged in extensive discussions with various interested parties with respect to the plan, including the Bank Group, the Creditors' Committees, Wayne County, the SEC and the Commissioner of the Financial Institutions Bureau and others. The debtors have transferred management of the vast majority of properties to third parties and the debtors have transferred almost all mortgage servicing to third party services. The debtors state that they require additional use of cash collateral to insure an adequate and professional transition to the new managers and services; seek approval of a liquidating plan; respond to creditor and homeowner inquiries; continue to liquidate assets of the estates; and prosecute claims asserted by the debtors against various parties. The debtors anticipate that they will need an additional $653,000 of cash collateral to fund the debtors' operations through approximately the end of March 2000. NEW YORK BAGEL: Files Chapter 11 --------------------------------- New York Bagel Enterprises Inc., Stillwater, Okla., announced that it has filed for chapter 11 protection and that it expects to liquidate the company and submit a plan of liquidation to the court in the near future, according to a newswire report. The company also plans to keep restaurants open during the liquidation process. New York Bagel owns and franchises New York Bagel restaurants and owns Lots A' Bagels restaurants. (ABI 04-Feb-00) NEXTEL: Seeks FCC Waiver to Bid for Wireless Licenses ----------------------------------------------------- Nextel Communications Inc., Reston, Va., has asked the Federal Communications Commission (FCC) for permission to bid at an upcoming auction of airwave licenses usually reserved for small companies, the FCC said yesterday. Previously Nextel had sought to acquire many of the licenses that bankrupt NextWave Telecom Inc. holds for more than $8 billion. Last month the FCC moved to strip NextWave of the licenses to re-auction them, but the bankruptcy court has rejected the cancellation of those licenses. The FCC plans to appeal. (ABI 04-Feb-00) NEXUS TELOCATION SYSTEMS: Soros Fund Management Reports Stock Holdings ---------------------------------------------------------------------- Soros Fund Management LLC beneficially owns 3,096,000 of the common stock of Nexus Telocation Systems Ltd. with sole voting and dispositive powers. The holding represents 16.52% of the outstanding common stock of the company. In their capacities with Soros George Soros and Stanley F. Druckenmiller hold shared voting and dispositive power over the entire shares held by Soros. The business of Soros Fund Management LLC is managed through a management committee comprised of Mr. Soros, Mr. Druckenmiller and Mr. Duncan Hennes. Soros is a Delaware limited liability company whose principal business is to serve, under contract, as the principal investment manager to several foreign investment companies, including Quantum Emerging Growth Partners C.V. and Quantum Partners LDC. Quantum Emerging Growth and Quantum Partners has its principal office in Willemstad, Curacao, Netherlands Antilles. Mr. Soros, as Chairman of Soros Fund Manangement LLC, has the ability to direct the investment decisions of Soros Fund Management LLC and as such may be deemed to have investment discretion over the securities held for the accounts of the Soros clients. Mr. Druckenmiller, as Lead Portfolio Manager of Soros Fund Management LLC, has the ability to direct the investment decisions of Soros and as such may be deemed to have investment discretion over the securities held for the accounts of the Soros clients. NU-KOTE HOLDING: Order Approves Bidding Procedures -------------------------------------------------- The US Bankruptcy Court for the Middle District of Tennessee entered an order on January 27, 2000 approving bidding procedures. Any officers or directors of the debtors connected with Richmont Capital Partners I, LP shall abstain from participation in the decision as to which bid should be accepted. NU-KOTE HOLDING: Order on Disclosure Statement ---------------------------------------------- The US Bankruptcy Court for the Middle District of Tennessee entered an order on January 27, 2000 overruling the objection to the Disclosure Statement filed by Employers Insurance of Wausau; and the debtors, the lenders and the committee are ordered to file a first amended joint disclosure statement for first amended joint plan of reorganization on January 24, 2000. The US Trustee had until 4:00 PM on January 31, 2000 to file any additional objections to the first amended joint disclosure statement. OPTEL: Seeks Authority For Special Retention Plan ------------------------------------------------- OpTel Inc. is seeking court authority to adopt a revised special retention plan to retain and reward certain officers and employees who provide valuable services to OpTel and its subsidiaries. The participants in the plan are entitled to receive a percentage of the gross proceeds received by the debtors in connection with the disposition of the debtors' assets. Such percentage of gross proceeds shall be the "proceeds pool." The participants shall receive an initial distribution under the plan when at least 75% of the total subscribers have been sold for at least $350 million. Subsequent distributions from the proceeds pool shall be made to the participants on a monthly basis, in accordance with the plan, based on accumulated gross proceeds at the end of each month. PAGING NETWORK: S&P Cuts Snr Sub Notes -------------------------------------- Standard & Poor's today lowered its rating on Paging Network Inc.'s (PageNet) $300 million 8.875% senior subordinated notes due Feb. 1, 2006, to 'D' from double-'C' following the company's failure to make interest payments on these notes. Standard & Poor's also lowered its corporate credit rating on the company to 'D' from triple-'C'. These ratings are removed from CreditWatch where they had been placed following the company's announcement that it would consider a chapter 11 reorganization if bondholders did not agree to conditions of a proposed merger with Arch Communications Group Inc. At the same time, Standard & Poor's lowered its ratings on PageNet's $400 million 10.125% subordinated notes due Aug. 1, 2007, and $500 million 10.0% subordinated notes due Oct. 15, 2008, to single-'C' from double-'C', and its rating on the company's bank loan to double-'C' from triple-'C'. These ratings remain on CreditWatch with negative implications because the debt is not currently in cash default, Standard & Poor's said. PILLOWTEX: Capital Technology Inc. Reports Stock Holdings ---------------------------------------------------------- Capital Technology Inc. beneficially owns 884,800 shares of the common stock of Pillowtex Corporation. Of this amount Capital exercises sole dispositive power over the entire 884,800 shares, while holding sole voting power over 368,700 shares. The total amount held constitutes 6.18% of the outstanding shares of common stock of Pillowtex. PINNACLE BRANDS: Order Extends Exclusive Periods ------------------------------------------------ By order entered January 21, 2000, the US Bankruptcy Court for the District of Delaware entered an order extending for approximately 60 days the periods during which only the debtors may file a plan or plans of reorganization and during which only the debtors may solicit acceptances to the plan. The debtors have the exclusive right to file a plan to and including March 3, 2000. In the event that the debtors do file such a plan on or before March 3, 2000, then the debtors shall have the right to solicit acceptances to the plan to and including May 3, 2000. SYMONS INT'L GROUP, INC.: S&P Lowers Pref'd Secs Rtg to 'D' --------------------------------------------------------- Standard & Poor's lowered its rating to 'D' from triple-'C'-minus on the $135 million 9.5% trust-originated preferred securities (TOPrS) issue of Symons International Group Inc. due 2027. The downgrade reflects management's announcement that it intends to defer the semiannual dividend due Feb. 15, 2000, on the TOPrS, Standard & Poor's said. TAL WIRELESS NETWORKS: Plans to Liquidate Assets ------------------------------------------------ On October 6, 1997, Tal Wireless Networks Inc. filed a voluntary petition for protection under Chapter 11 of the Federal Bankruptcy Laws in the United States Bankruptcy Court, Northern District of California, San Jose Division under which the company's existing directors will continue in possession but subject to the supervision and orders of the Bankruptcy Court. The company plans to liquidate assets and review the claims of its various creditors. It is unclear at this time whether there will be any funds available for distribution to shareholders. Once this information has been determined, the company may file a Plan of Reorganization with the Bankruptcy Court. TALK AMERICA: Order Approves Disclosure Statements -------------------------------------------------- After hearing on December 21, 1999 before the US Bankruptcy Court for the District of Maine, the court approved the Disclosure statement and Refund Class Disclosure Statement. A hearing on confirmation of the plan has been continued to March 2, 2000 at 11:00 AM before the Honorable James A. Goodman, US Bankruptcy Judge, at the US Bankruptcy Court, 537 Congress Street, Portland, Maine. February 25, 2000 is set for the deadline for filing and serving written objections to confirmation of the debtor's plan. TRANSTEXAS GAS: Chanoco Corp's Second Memorandum of Argument ------------------------------------------------------------ Chanoco Corp. files a second memorandum of argument in support of Chanoco Corp's objections to confirmation of the debtors' second amended plan of reorganization under Chapter 11. The debtor and Chanoco are tenants in common in a certain oil and gas estate. The lands are covered by three oil and gas leases. Chanoco sued the debtor prepetition seeking an accounting and other relief. Chanoco argues that it has an absolute right to partition under Texas law. Chanoco re-asserts its rights to an accounting, a partition of interests, and all equitable remedies, including set-off, or off-set and recoupment. Chanoco states that the plan may be construed to effectively deny Chanoco its absolute right to an accounting and its absolute right to partition. The plan takes Chanoco's property rights in the common estate without compensation yet retains those same rights in the debtor. Chanoco has voted to reject the debtor's plan. And pending an accounting and partition of the common estate, the debtor continues to collect and market Chanoco's gas from the lease. Chanoco states that its funds are at risk of being transformed into "accounts" or other forms of UCC types of collateral and thereby become subject to liens held by GMAC and/or other secured parties. Chanoco states that this could result in an inequitable windfall to GMAC, the debtor and its other creditors. SUN HEALTHCARE: Motion To Assume and Assign Sunbridge Leases To ASLLP --------------------------------------------------------------------- The Debtors have agreed to sell 19 assisted living facilities to American Senior Living Limited Partnership. As previously reported, Judge Walrath confirmed ASLLP as the high bidder for these assets. By this Motion, the Debtors seek Court authority to assume and assign applicable leases and executory contracts pursuant to 11 U.S.C. Sec. 365. The Debtors have to assume and assign to the related contracts and leases that ASLLP wants as part of the purchased assets. Unless they can assume and assign these contracts and leases, ASLLP has no obligation to close the sale. Several of the affected landlords object to the ASLLP sale. Anticipating these objections to their Assignment Motion, the Debtors assert that the ASLLP principals "have an established track record and substantial expertise in the health care industry." The Debtors share that ASLLP's financial statements at November 30, 1999, reflect $10,000,000 in equity and ASLLP's ability to access a $6,800,000 line of credit with Bank of America. The Debtors also note that ASLLP expects all necessary state operating approvals by the end of January. The Debtors claim that ASLLP will be able to meet all its obligations under the contracts and leases, and that ASLLP has given the landlords all necessary financial information. The Debtors assure the Court and the Landlords that they will cure any pre- petition defaults under any assumed lease agreement. The Debtors note, however, that they believe no pre-petition defaults exist under the leases to be assumed and assigned. (Sun Healthcare Bankruptcy News Issue 10; Bankruptcy Creditor's Service Inc.) SUN TELEVISION & APPLIANCES: Reports Confirmation of Plan to SEC ---------------------------------------------------------------- On September 16, 1998, Sun Television and Appliances, Inc. and its subsidiary Sun TV and Appliances, Inc. filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. On December 22, 1999, the Court confirmed the First Amended Joint Plan of Liquidation of Sun TV. The Plan provides for, among other things: the substantive consolidation of the Estates of the Sun TV entities for all purposes related to the Plan, including without limitation, for purposes of confirmation, distributions, and claim determinations; the rejection of certain leases and contracts not previously rejected; the funding of the Plan by available cash on the effective date and from the liquidation of Sun TV's remaining assets, prosecution of Causes of Action and any release of funds from the Disputed Claims Reserve; the continued corporate existence of Sun TV, following confirmation and consummation as described in the Plan, for the purposes of winding up its affairs, liquidating remaining assets of the Estates, enforcing Causes of Action and other claims, reconciling claims and resolving disputed claims, administering the Plan, and taking other appropriate action; the management of Sun TV from and after the confirmation date and for the process of determining the succession of certain management of Sun TV; the specific procedures to be undertaken under which Sun TV will make distributions to holders of allowed claims. the dissolution of Sun TV and the cancellation of equity interests upon the distribution of all assets of the Estates and the filing of a certification to that effect with the Bankruptcy Court. Prior to the filing of the Plan, there were 17,439,202 shares of common stock of Sun TV issued and outstanding. There are no shares of stock reserved for future issuance in respect of claims and interests filed and allowed under the Plan. As of December 31, 1999, the latest date that such information is available, Sun TV had assets totaling $19,324,000 and liabilities totaling $58,403,000. TV FILME: Case Summary ---------------------- Debtor: TV Filme, Inc. c/o Prentice Hall 1013 Centre Rd. Wilmington, DE 19805 Type of Business: Though its subsidiaries and affiliates develops, owns and operates wireless cable television systems in Brazil. Petition Date: January 26, 2000 Chapter 11 Court: District of Delaware Judge: Peter J. Walsh Debtor's Counsel: Norman L. Pernick SAUL EWING REMICK & SAUL, LLP 222 Delaware Avenue Suite 1200, PO Box 1266 Wilmington, DE 19899 (302)421-6825 Mark I. Banc Kelley Drye & Warren 101 Park Avenue New York, NY 10178 (212) 808-7800 Total Assets: $ 83,741 Debtor's estimate has excluded approximately a 150 million of accounts receivable at face having an 'unknown' value. Total Debts: $ 167,261,000 Largest Unsecured Creditor Bank of New York 12-7/8% Sen Notes due 2004 $ 167,261,000 CEDE & Co. 12-7/8% Sen Notes due 2004 $ 167,261,000 US LEATHER: To Close Milwaukee Plants ------------------------------------- United States Leather Inc., which was taken over by creditors in 1996 but emerged from bankruptcy two years later, announced that it will close its Milwaukee operations, according to the Associated Press. Citing "adverse business conditions in the global footwear market," U.S. Leather will lay off about 600 workers and close the 152-year-old Pfister & Vogel Tannery. The company will continue to operate or sell plants in North Carolina, Nebraska, Texas, Indiana and Ontario that make leather for furniture, cars and equestrian gear. Teamsters Local 270 is planning an "attack," stating that there are laws that need to be met, such as 60-day notice of a plant closing. Workers were only given a few days notice. (ABI 04-Feb-00) VENCOR: Subject of Medicare Reimbursement Issues ------------------------------------------------ Vencor, Inc. has been informed by the Department of Justice, acting on behalf of the Health Care Financing Administration and the Department of Health and Human Services' Office of the Inspector General, that the company is the subject of ongoing investigations into various Medicare reimbursement issues, including various hospital cost reporting issues, Vencare billing practices and various quality of care issues in its hospitals and nursing centers. The company says it has cooperated fully in these investigations. The Department of Justice has recently informed the company that it intends to intervene in all remaining pending qui tam actions asserted against the company in connection with these investigations. Vencor, Inc. is engaged in active discussions with the Department of Justice that may result in a resolution of some or all of the Department's investigations and the pending qui tam actions. The company believes that the Department of Justice's intervention in these actions will facilitate the ability of the parties to reach a final resolution. The company also believes that such a resolution could include a payment to the government that would have a material adverse effect on the company's liquidity and financial position. Vencor and its subsidiaries filed voluntary petitions for reorganization under Chapter 11 with the United States Bankruptcy Court in Delaware on September 13, 1999. Vencor, Inc. is a national provider of long-term healthcare services primarily operating nursing centers and hospitals. ********* 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. 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