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/raid1/www/Hosts/bankrupt/TCR_Public/000229.MBX T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, February 29, 2000, Vol. 4, No. 41 Headlines AAMES FINANCIAL CORP.: Fitch IBCA Lowers Senior Debt To `CCC' ABACAN: Provides Update of Corporate Affairs AGRIBIOTECH: Board Members and Officers Resign ANKER COAL GROUP, INC.: Moody's Assigns Caa2 To Sr. Secured Notes ARM FINANCIAL: Taps Walker, Truesdell, Radick & Assoc ASIA PULP: To Pay $135 Million in Settlement to Beloit ATC GROUP: Seeks to Extend Exclusive Vote Period to May 12 CABLE SATISFACTION: Moody's Assigns Caa1 Rating Proposed Notes CASMYN CORP: Plan of Reorganization FIRSTPLUS FINANCIAL: Settlement Agreement With Bank One Texas FRUIT OF THE LOOM: Committee Taps Pepper Hamilton GRAND UNION: Removes Harris and Elects Philbin CEO GREATER SOUTHEAST: Bondholders May Receive Payment In Next Months INDUSTRIAL IMAGING: Engages New Independent Auditors KMART: Dodge & Cox Reports Holdings PCG MEDIA: Announces Merger and Name Change PCG MEDIA: Board of Directors Makes Changes PLAY BY PLAY TOYS: Bank One Corp Reports Holdings PSI INDUSTRIES: Reports Sale of Assets to SEC SUNRISE SUITES: GBC Bancorp Receives Problem Loan Payment TULTEX CORP: Taps Michael Fox and International Textile Machinery U.S. OFFICE PRODUCTS: Moody's Lowers Bank Rating To Caa1 VENCOR: Extends Maturity of Its $100 M DIP Financing WORLDCORP: Citigroup Reports Holdings Meetings, Conferences and Seminars ********* AAMES FINANCIAL CORP.: Fitch IBCA Lowers Senior Debt To `CCC' ------------------------------------------------------------- Fitch IBCA lowers the senior debt ratings for Aames Financial Corp. (Aames) to `CCC' from `B-'. The rating on Aames' convertible subordinated debt was also lowered to `CC' from `CCC'. About $276 million of outstanding debt is affected. The ratings are removed from RatingAlert where they were placed on Nov. 17, 1998. Ratings in the `CCC' category indicate that default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic developments. The ratings for Aames reflect the challenges the company faces as it attempts to reorganize following the sector shakeout in the subprime home equity industry that began in the second half of 1998. Since that time the company has remained in operation as a result of capital infusions totaling more than $125 million during 1999, almost entirely from the investment fund Capital Z Financial Services Fund, II, L.P. (Cap Z). Aames has put a new management team in place, under the direction of A. Jay Meyerson the former chief executive officer and chairman of KeyBank USA, to run the company going forward. The ratings also center on the company's negative operating earnings and cash flow position resulting from the heavy burden of executing subprime home equity securitizations, weak margins in the whole loan markets, high cost of financing existing revolving debt facilities, and declining asset quality. Capitalization on a risk-adjusted basis as measured by Fitch IBCA is also considered weak, but expected at the current rating level. The write-down of its interest-only residual asset in the fourth quarter of 1999 has not changed the economic viability of firm, as Fitch IBCA placed a significant risk-weight against these assets in its internal capitalization model. It is Fitch IBCA's opinion that under realistic valuation assumptions for Aames' interest-only residual assets and taking into consideration the first priority position of secured lenders, the probability of full recovery for unsecured bondholders is unlikely if a liquidation scenario was to arise based on the company's current financial profile. Fitch IBCA expects that timely and full repayment will only occur under a positive operating environment resulting from a sustained favorable business climate. Operating cash flow and financing costs are likely to come under further pressure in the near term, as Aames is expected to lose access to its existing Concurrent Funding Facility from a major commercial bank which expires on Feb. 29, 2000. Aames does not expect to have access to a new revolving warehouse or repurchase facility prior to the expiration of the Concurrent Funding Facility. This situation will require the company to fund new mortgage loans exclusively out of working capital or capital alternatives until a new facility can be put in place. The company did recently increase its working capital by $35 million on Feb. 11, 2000 and also received $15 million from the sale of servicing advances on Feb. 25, 2000. The company reported $16 million in cash and cash equivalents at Dec. 31, 1999. Existing cash, plus these two recent fundings raises cash and working capital to $66 million approximating the usage under the expiring Concurrent Funding Facility. The current ratings take into account the challenges facing management in its attempt to turn the company around. Success will depend on Aames ability to grow spread revenue, improve asset quality, reduce the company's overhead cost structure, and expand the company's funding capabilities. The last point will need to be accomplished despite the coming expiration of the company's Concurrent Funding Facility, and the requirement to adhere to ongoing financial covenants on its existing revolving warehouse and repurchase facilities. Moreover, Aames also has had to increase the level of overcollateralization in its securitization trusts as a result of asset quality levels performing poorer than expectations. ABACAN: Provides Update of Corporate Affairs -------------------------------------------- Abacan Resource Corporation (TSE:ABC) (OTC BB:ABACF) wishes to provide an update of its corporate affairs. To date, the Corporation has been unable to secure partners for either of its Benin Republic or Nigerian oil and gas properties. The Corporation has been unable to raise additional operating funds and has also been advised that its major secured creditor is not prepared to further assist the Corporation by injecting additional operating funds or through the restructuring of the outstanding principal balance of its secured loan. As a consequence, without a material change in the current position of the Corporation's major secured creditor and without a significant infusion of capital, the Board of Directors anticipates that the Corporation will proceed with a voluntary assignment into bankruptcy pursuant to the Bankruptcy and Insolvency Act (Canada) in the very near term. AGRIBIOTECH: Board Members and Officers Resign ---------------------------------------------- All board members and officers of AgriBioTech have resigned, according to the company's Form 10-Q filed Tuesday with the Securities and Exchange Commission. The date and the circumstances of the resignations weren't disclosed. The bankruptcy court on Feb. 15 authorized William Brandt, a principal with the company's crisis manager and reorganization consultant Development Specialists, to act as the company's responsible natural person, granting him control of the company's daily operations. AgriBioTech and four affiliates filed for Chapter 11 in the U.S. Bankruptcy Court in Las Vegas Jan. 25 ANKER COAL GROUP, INC.: Moody's Assigns Caa2 To Sr. Secured Notes ----------------------------------------------------------------- Moody's Investors Service assigned a Caa2 rating to the $106 million of 14.25% Series A second priority senior secured notes, due 2007, of Anker Coal Group, Inc. Moody's raised its senior implied rating for Anker to Caa2 from Caa3, but left its senior unsecured issuer rating at Ca. Moody's rating outlook is negative. Moody's also withdrew its Ca rating on the remaining $16.5 million of 9.75% senior unsecured notes due 2007. Anker has offered to exchange these notes for $13.2 million of its 14.25% Series A second priority senior secured notes. The security interest for the new 14.25% Series A notes ranks junior to the lien securing Anker's senior credit facility. Moody's ratings reflect a relatively high probability that Anker's free cash flow will, at best, just cover interest expense over the next two years. The ratings and negative outlook are heavily influenced by Anker's history of operating problems and losses, and an increasingly difficult pricing and regulatory environment. The first two factors raise concerns about the stability of Anker's production costs and the inherent quality of Anker's coal reserves. Anker's two surface mines have lives of one to three years. While these mines account for only about 15% of Anker's production, their short lives expose Anker to the risk that operating permits for new mines will be delayed or not granted by regulatory agencies, or that replacement mines will not be able to satisfy the quality specifications of Anker's coal contracts. In addition, Anker's leverage, though reduced by its recent restructuring and senior note exchange, remains very high at 12 times adjusted EBITDA ($12.1 million for the twelve months ended September 30, 1999), and the higher coupon on the $106 million of exchanged notes and $19.2 million of new secured notes will raise interest expense by $5.6 million per year. Finally, it is unlikely that noteholders would recover their entire principal should Anker default (which would be its second using Moody's definition). The ratings recognize, however, the stability provided by Anker's 16 sales contracts with electric utilities and independent power producers and gives credit for cost savings associated with the company's decision to use contract miners at its underground operations, although Moody's does not believe the cost reductions will be as great as Anker anticipates. Also, the debt restructuring has given Anker added financial flexibility. The April 2000 interest payment on the 14.25% secured notes will be paid in kind, the company has approximately $12 million of revolving credit availability under the Foothill Capital facility, and Rothschild Recovery Fund L.P. has agreed, under certain conditions, to fund up to $6.3 million of the October 2000 interest payment. Asset sales may also generate cash, although the timing and certainty of asset dispositions is difficult to gauge given today's depressed coal property market. Anker's coal contracts cover approximately 15 million tons of coal over the next two years, or 75% of anticipated production. The key part of Anker's plan to improve its operating performance is the use of contract miners at its underground mines. The company believes this will allow it to reduce operating, administrative, and capital expenses, and reduce month-to-month operating cost fluctuations. Moody's believes the cost savings will be less than Anker has projected, and will diminish over time as the contracts are rebid. The contracts are for three years and can be cancelled upon giving six months notice. Moody's skepticism about operating costs stems primarily from Anker's track record. Anker's production problems have typically related to minability and geologic problems, such as irregular or thinning coal seams, the presence of rider seams, and difficult ground control conditions. These difficulties are not unusual for coal mines in northern West Virginia and Maryland, where Anker's operations are located. The contractors are paid a fee based on clean coal mined. If mining conditions deteriorate, tonnage and unit costs will both be affected and the contractor's margins will be squeezed, which potentially will lead to higher contract rates when the contract is rebid. The company is forecasting gross profit (sales less cash operating costs) of $41.5 million in 2000 and $40.8 million in 2001. This compares to $15.0 million in 1998 and $20.2 million for the twelve months ended September 30, 1999. Anker Coal Group produces coal from its own reserves in West Virginia and Maryland and acts as broker or agent for third-party coal producers. It had revenues of $240 million over the twelve months ended September 30, 1999. Its corporate headquarters are in Morgantown, West Virginia. ARM FINANCIAL: Taps Walker, Truesdell, Radick & Assoc ----------------------------------------------------- The debtors, ARM Financial Group Inc. and Integrity Holdings Inc. seek to retain Walker, Truesdell, Radick & Associates as restructuring agent for the debtors, and specifically Hobart Truesdell as chief restructuring officer of the debtors. A hearing on the application will be held on March 2, 2000. The firm will provide the following services: Overseeing and conducting aspects of the Chapter 11 cases, including the resolution of claims by and against the estates, the promulgation and confirmation of a Plan of Liquidation and the ensuing distributions to creditors, and dissolution of the debtors; Selling any remaining assets of the debtors' estates; Maintaining the books and records of the debtors, filing all necessary tax returns and fulfilling any and all other reporting requirements; Monitoring the liquidation by BlackRock Financial Management of the securities to be included in the purchase price escrow; Overseeing the resolution of any disputes with Western and Southern which might result after consummation of the Asset Sale; Managing the preparation of "Final Balance Sheet and Adjustment Certificate" within 60 days of the Asset Sale; and Reporting regularly to the debtors' boards of directors and acting in accordance with their directions. The firm proposes to chare the debtors a flat hourly fee of $275 per hour, as well as seek reimbursement of reasonable out-of- pocket expenses. ASIA PULP: To Pay $135 Million in Settlement to Beloit ------------------------------------------------------ Asia Pulp and Paper Co. said Friday that it has agreed to settle a dispute over the proposed purchase of two paper manufacturing machines from Harnischfeger Industries Inc.'s subsidiary, Beloit Corp., according to a newswire report. Singapore-based Asia Pulp said that as part of the settlement it will pay $135 million to Beloit. The agreement is subject to the bankruptcy court's approval because Beloit and certain subsidiaries are operating under chapter 11 protection. (ABI 28-Feb-00) ATC GROUP: Seeks to Extend Exclusive Vote Period to May 12 ---------------------------------------------------------- ATC Group Services Inc. is seeking a 60-day extension of the exclusive period during which it may solicit acceptances to its fourth amended plan of reorganization. An extension of the exclusive solicitation period to May 12 will enable ATC to secure firm exit financing commitments, fulfill the necessary conditions to the exit financing and complete the plan solicitation process without the threat of a competing plan of reorganization, the consulting firm asserted in a motion, filed Tuesday. (The Daily Bankruptcy Review and ABI 28-Feb-00) CABLE SATISFACTION: Moody's Assigns Caa1 Rating Proposed Notes -------------------------------------------------------------- Moody's Investors Service assigned a first-time Caa1 rating to the proposed US$150 million offering of senior unsecured notes due 2010 to be issued by Cable Satisfaction International, Inc. (CSII). CSII's senior implied and senior unsecured issuer ratings are B2 and Caa1, respectively, and the rating outlook is stable. The ratings broadly reflect the risks inherent in the company's aggressive business plan, including the successful execution of its ambitious network construction program that is third-party dependent; expansion of its marketing, customer service, billing and other general infrastructure areas; uncertainty with respect to subscriber acquisition costs and service take-rates, as well as subscriber retention; and effective management of what is anticipated to be a rapid growth environment. The ratings also incorporate the company's high leverage and moderate debt service coverage; substantial capital expenditures requirements, which will render the company a net borrower for at least the next few years; expectations of a heightened competitive environment, including stronger responses from incumbent service providers that generally enjoy greater financial and other resources, as well as the potential for other alternative competitor entrance into Portugal's recently deregulated and newly liberalized markets; and structural considerations with respect to the company's debt stack. The ratings are supported, however, by the company's strong liquidity position pro forma for the offering and increased bank revolving credit facility availability, which should be sufficient to finance both network construction and subscriber growth to more mature levels; ownership of a technologically advanced telecommunications infrastructure within 2-to-3 years, and an existing (albeit more limited) network and subscriber base currently, affording noteholders reasonable value both today and prospectively; good growth prospects for the acceptance of its bundled product and service offerings; the scaleability and increasingly variable, revenue-driven component of its capital expenditures once the network is built; and the existence of an equity base of junior capital that provides some cushion in a distress scenario. Moody's also notes that management's prior experience in constructing, building and running cable operations will be important to the ultimate success of its current business plan. The ratings are highly prospective and also incorporate Moody's expectation that management will endeavor to maintain a prudent mix of equity and debt financing to affect a more moderately leveraged capitalization going forward, as accomplished through follow-on equity issuances and/or the sale of dark fiber capacity of a meaningful value over the next 12-to-18 months. The Caa1 rating for the proposed senior notes further incorporates the structural subordination of this debt class to a large amount of current and permitted bank debt (although this will be adjusted downward dollar-for-dollar against future equity and fiber sales), as well as other senior obligations at the subsidiary level. CSII is a Canadian-based cable operator that is building a facilities-based high-tech network for the provisioning of cable, high-speed Internet access and telephony services in Portugal. With nearly 1.8 million licensed homes for its local operating subsidiary Cabovisao on a non-exclusive basis, approximately 205,000 of which are passed by its network that serves roughly 56,000 subscribers today, the company is the second largest player in Portugal behind TV Cabo, an indirect subsidiary of the incumbent telephone service provider Portugal Telecom. Cable Satisfaction International is a Canadian-based company that builds and operates networks for the provision of cable, high- speed Internet access and telephony services in Portugal through its subsidiary Cabovisao. The company maintains its headquarters in Longueuil, Quebec. CASMYN CORP: Plan of Reorganization ----------------------------------- The Disclosure Statement, describing the Plan of Reorganization of Casmyn Corp., debtor, was approved by the bankruptcy court by an order entered on February 3, 2000. The Disclosure Statement contains a discussion of the debtor and its subsidiaries, their businesses, operations, assets, liabilities and financial performance and a summary of the plan. The plan is a reorganization plan providing for the debtor to reorganize by paying all unsecured priority and trade creditors in full on the effective date of the plan, reorganizing its 523,784 shares of preferred stock and its 243,578,142 shares of common stock, continuing to operate its mining business, and asserting certain potentially valuable litigation rights and claims against former management and third parties that facilitated "former management's misdeeds" as described in the Disclosure Statement. FIRSTPLUS FINANCIAL: Settlement Agreement With Bank One Texas ------------------------------------------------------------- The debtor, FirstPlus Financial Inc. seeks approval of a compromise of controversy with Bank One Texas NA and related entities and request for modification of the automatic stay to permit Bank One Texas to offset against the Bank Accounts, to the extent permissible. The material terms of the compromise include the following: The claims of Bank One Arizona will be allowed in the amount of $376,363. The claims of Bank One Leasing will be allowed in the reduce d amount of $3,553,443. The claim of Bank One Texdaqs related tot he Exchange Claim will be allowed in the reduced amount of $62,000. The claim of Banc One Financial will be allowed in the amount of $118,267. All of the funds that are in the registry of the Bankruptcy Court as a result of the Collateral Sale Order will be disbursed to Bank One Texas. Any excess cash collateral over $3 million will be retained by and/or paid over to the debtor. Upon Bankruptcy Court approval of the Disclosure Statement the Bank One Entities will both support the plan and will elect treatment under the plan as an electing creditor, so long as the material economic terms of the plan do not change, and so long as the terms of the Settlement Agreement are incorporated in any such plan. The parties agree to certain collection caps relating to the Indemnity Claims and the parties agree to certain releases. FRUIT OF THE LOOM: Committee Taps Pepper Hamilton ------------------------------------------------- The Official Committee of Unsecured Creditors sought and obtained Judge Walsh's permission to retain Pepper Hamilton LLP, nunc pro tunc to January 10, 2000, as its local counsel. Subject to the control of the Committee, the New York-based law firm of Otterbourg, Steindler, Houston & Rosen, P.C. (Scott L. Hazan, Esq., and Brett H. Miller, Esq., lead the Otterbourg team), which was tapped for the lead counsel slot, Pepper Hamilton will: (a) Attend hearings pertaining to the case, as necessary; (b) Review applications and motions filed in connection with the case; (c) Communicate with Otterbourg as necessary; (d) Communicate with and advise the Committee and attend meetings of the Committee, as necessary; (e) Provide expertise with respect to these proceedings and procedural rules and regulations applicable to these cases; and (f) Perform a other services for the Committee that are necessary for its co-counsel to perform in these cases. Pepper Hamilton will bill at its customary hourly rates: (a) David B. Stratton $340.00 per hour (b) David M. Fournier $270.00 per hour (c) Tara L. Lattomus $180.00 per hour (d) Monica Leigh Loftin $180.00 per hour (e) Andrea B. Unterberger $125.00 per hour (f) Jaymi H, Cook $110.00 per hour David B. Stratton, Esq., leading the engagement, assures the Court that Pepper Hamilton does not hold, or represent any other entity having, an adverse interest in connection with the Debtors' cases. Mr. Stratton discloses that Pepper Hamilton represents a number of the Debtors' creditors in matters unrelated to these cases and works with all of the professionals employed and retained in these cases in unrelated matters. (Fruit of the Loom Bankruptcy News Issue 4; Bankruptcy Creditor's Service Inc.) GRAND UNION: Removes Harris and Elects Philbin CEO -------------------------------------------------- The Grand Union Company has removed J. Wayne Harris from his position as chief executive officer, Chairman of the Board, and a director of the company. Gary M. Philbin, the company's president and a member of the Board of Directors, was elected CEO to replace Harris, and Stephen M. Peck, anon-management director, has become Chairman of the Board, replacing Harris in that role. Philbin had served as Grand Union's president and chief merchandising officer since joining the company in 1997. In addition, Jack W. Partridge, Jr., resigned from his position as vice chairman, chief administrative officer and a director of Grand Union, and the company promoted its executive vice president and chief financial officer, Jeffrey P. Freimark, to succeed him as chief administrative officer. Freimark, who came to Grand Union in 1997 and continues as CFO, has also been elected to Grand Union's Board of Directors. Speaking about the remaining 14-person Board, Mr. Peck said: "We are all very pleased with the composition of the entire Board and its capacity to support management in all areas as we seek to enhance the value of Grand Union." Commenting on the top-level management restructuring, CEO Philbin stated: "We are now in the fourth quarter of what has proven to be a challenging fiscal year. It is also clear that we must step up our efforts to refine and revitalize our retailing and merchandising strategies. We must also execute our plans for opening new and remodeled stores, and bolstering operations at existing locations." Gary Philbin became Grand Union's president and chief merchandising officer in October 1997, having joined the company from SuperValu, Inc, where he was executive vice president of merchandising for its Cub Food Stores Division. Prior to that, he was vice president of merchandising with the Waldbaum's Division of The Great Atlantic & Pacific Tea Company, Inc., and had been in key merchandising and operations posts at The Kroger Co. Jeffrey Freimark has been with Grand Union since March 1997, and in his role as CFO he initially also held chief administrative responsibilities. He came to the company following 11 years at Pueblo Xtra International, Inc., a leading supermarket chain in Puerto Rico and the U.S. Virgin Islands, where, most recently, he served as executive vice president and CFO. Prior to that, he held senior financial and legal posts at New Jersey-based Kings Super Markets, Inc. Grand Union operates 217 retail food stores in Connecticut, New Hampshire, New Jersey, New York, Pennsylvania and Vermont. GREATER SOUTHEAST: Bondholders May Receive Payment In Next Months ----------------------------------------------------------------- The Bond Buyer reports on February 28, 2000, that bondholders of the Greater Southeast Community Hospital will likely be paid within the next three months, and may receive more than 22 cents on the dollar, attorney Clifford E. Barnes of Epstein Becker & Green said in an interview Friday. Barnes represents Scottsdale, Ariz.-based Doctors Community Healthcare Corp., which purchased the hospital in a $22.25 million deal completed Dec. 30, 1999. He said he is the company's lead counsel in the hospital's ongoing bankruptcy proceeding. The report claims that there are holders of about $47 million of revenue bonds, issued in 1993 through Prince George's County, Md. And that parties are currently negotiating the sale of some of the hospital's remaining assets, which include two nursing homes and a smaller hospital in Maryland. The report quotes Ann-Ellen Hornidge, an attorney with Boston- based Mintz, Levin, Cohn, Ferris, Glovsky and Popeo who represents some institutional bond holders, and who disagrees with Barnes' assessment. "It's irresponsible for him to make any speculation about bondholder recovery from the seat that he's in," she said. "He is not involved in the allocation of the purchase price of those assets or in the sale of the other facilities belonging to the Greater Southeast system, all of which will factor into the ultimate recovery for bondholders." INDUSTRIAL IMAGING: Engages New Independent Auditors ---------------------------------------------------- In December Industrial Imaging Corporation engaged Cayer Prescott Clune & Chatellier, LLP as its new independent auditors for the company's fiscal year ending March 31, 1999 and terminated its auditor relationship with BDO Seidman, LLP. BDO served as the independent auditors for the company for the fiscal year ended March 31, 1998. In its report on the financial statements for that fiscal year BDO included an explanatory paragraph regarding the uncertainty as to Industrial Imaging's ability to continue as a going concern because of recurring losses from operations and the non-payment of debt obligations as they became due. The decision to change independent auditors was approved by the company's Board of Directors because of its deteriorating financial condition and its inability to pay BDO for the work it had performed. KMART: Dodge & Cox Reports Holdings ----------------------------------- The investment advisor firm of Dodge & Cox reports holding an aggregate 34,663,010 shares of the common stock of Kmart Corporation. The firm has the sole power to vote or direct the vote of 31,687,860 of those shares; the shared power to vote or direct the vote of 313,000 of the shares; and the sole power to dispose or to direct the disposition of 34,663,010 of the shares. The securities reported on are beneficially owned by clients of Dodge & Cox, which clients may include investment companies and/or employee benefit plans, pension funds, endowment funds or other institutional clients. The aggregate amount held represents 7.0% of the outstanding common stock of Kmart. PCG MEDIA: Announces Merger and Name Change ------------------------------------------- In accordance with an Acquisition Agreement and Plan of Merger dated January 18, 2000 between PCG Media, Inc., a Nevada corporation, and Home Gambling Network, a California corporation, Home Gambling Network will merge with and into PCG Subsidiary Corp., a wholly owned subsidiary of PCG and Home Gambling Network and will continue as the surviving corporation. Concurrent with the merger, PCG will change its name to i2Corp.com. Home Gambling Network will remain a wholly owned subsidiary of i2Corp.com. The consideration exchanged in the merger was negotiated between PCG and Home Gambling Network. PCG MEDIA: Board of Directors Makes Changes ------------------------------------------- On February 8, 2000, the Board of Directors of PCG Media,Inc. made the following changes: 1. deedee Molnick was elected President 2. Christopher Paul Almida was elected Vice President 3. Melvin Molnick was elected Secretary/Treasurer Also on February 8, 2000, the following were appointed by the shareholders to serve on the Board of Directors: deedee Molnick, Christopher Paul Almida, Susanne M. Molnick, Phil D. Anderson, H. Yale Gutnick, and Bradley Alan Grieco. PLAY BY PLAY TOYS: Bank One Corp Reports Holdings ------------------------------------------------- Bank One Corporation, as the Parent Holding Company for Bank One Trust Company, N.A., and Banc One Capital Holdings Corporation, reports beneficial ownership of 1,668,667 shares of the common stock of Play By Play Toys & Novelties, Inc. The subsidiary has the sole power to dispose of, or direct the disposition of the stock. 1,668,667 shares represents 16.9% of the outstanding common stock of the company. PSI INDUSTRIES: Reports Sale of Assets to SEC --------------------------------------------- On January 10, 2000 an order granting PSI Industries, Inc.'s motion for authorization to sell assets free and clear of claims, liens, interests and encumbrances was granted by the Bankruptcy Court. On February 3, 2000, under an Asset Purchase Agreement, the company sold substantially all of its assets to M Group USA, Inc. for $1,178,500 on an as is, where is basis, with no representations or warranties, either express or implied. The assets include, but are not limited to, the following: all purchase orders selected by the buyer, in its sole discretion, relating to the manufacture, sale, distribution, and related activities, including, but not limited to, the Message Camera and Smile lime camera business; all goodwill, books, records, machinery, equipment, assignable leases for personal property and any agreements relating to the Camera Business. SUNRISE SUITES: GBC Bancorp Receives Problem Loan Payment ----------------------------------------------------------------- GBC Bancorp (Nasdaq:GBCB), parent company of General Bank, today received $28 million from the bankruptcy-court-ordered sale of the Sunrise Suites hotel, casino and RV park in Las Vegas. The bank is owed additional amounts on its loan to Sunrise Suites. The bank holds as collateral a senior-most real estate encumbrance on approximately 18 acres of land in Las Vegas, which the bank anticipates will be sold within the next two to three months. TULTEX CORP: Taps Michael Fox and International Textile Machinery ----------------------------------------------------------------- The debtors, Tultex Corporation, et al., seek court authority to retain and employ the joint venture of Michael Fox International Inc. and International Textile Machinery Sales, Inc. as asset sale agent in these cases. The Joint Venture will earn a commission of 6% on proceeds up to $5 million, 7% on proceeds from $5 million to $10 million, and 9% on proceeds in excess of $10 million. The debtors anticipate that Binswanger Southern (NC)Inc as real estate broker agent will work together with the Joint Venture to get the best price possible for closed manufacturing facilities and the personal assets contained therein. U.S. OFFICE PRODUCTS: Moody's Lowers Bank Rating To Caa1 -------------------------------------------------------- Moody's Investors Service downgraded the debt ratings of U.S. Office Products following the company's report of weak third quarter operating results and a significant revision of future earnings expectations. The following ratings were affected by this action: Senior implied rating to Caa1 from B3; Rating of approximately $1,050mm secured credit facilities maturing through 2006 to Caa1 from B3; Senior unsecured issuer rating to Caa2 from Caa1; Rating of $400mm 9.75% sr. subordinated notes due 2008 from to Ca from Caa2. The rating outlook remains negative. The ratings recognize the higher risk of default following a disappointing earnings release, resulting in a significant revision of operating results for the year ending April 2000. USOP's weak results for the third quarter were partly due to temporary disruptions as a result of operational restructurings that Moody's believes will have a positive impact on the company in the longer term. However, Moody's believes that competition for USOP's customers and the potential for lower growth in the U.S. economy reduce the potential for recovering lost sales in future periods. The downgrade of the subordinated notes recognizes their legal and effective subordination to bank borrowers and trade creditors. Moody's believes their value would be significantly impaired in case of default. The negative rating outlook reflects uncertainty about USOP's ability to achieve acceptable operating performance and about the potential for future asset sales to reduce debt. USOP's high base of fixed costs, typical of a distribution company, means that operating earnings and cash flow could suffer disproportionately with even a moderate falloff in sales levels. At revised earnings expectations for the year ending April 2000, Moody's believes that USOP may be unable to comply with bank covenants and may be unable to meet debt service requirements from operating cash flow. USOP is intensifying initiatives to reduce operating expenses. The company has paid down debt during fiscal 2000 with cash generated from assets sales. The continued low exchange rate of the NZ kiwi to the U.S. dollar have also reduced the asset and cash flow coverage of U.S. dollar debt attributable to these businesses. However, Moody's believes there continues to be realizable value in USOP's AustralAsian businesses, as demonstrated by the prices at which some properties have recently changed hands. Moody's also continues to believe that a number of the company's businesses, such as Mail Boxes Etc., its vending business, and its furniture operations, remain a source of value for the company and its stakeholders. U.S. Office Products Co., headquartered in Washington, D.C., is one of the largest contract stationers, with operations largely in the U.S. and New Zealand. Revenues were $2.66 billion for the year ended April 1999. Clayton Dublier & Rice owns approximately 49% of USOP on a fully diluted basis. VENCOR: Extends Maturity of Its $100 M DIP Financing ---------------------------------------------------- Vencor, Inc. announced that it has agreed with its lenders to amend the Company's $100 million debtor-in-possession financing (the "DIP Financing") to extend its maturity until June 30, 2000. The Amendment also revises certain financial covenants and permits the Company to seek an extension of the period of time to file its plan of reorganization. The United States Bankruptcy Court for the District of Delaware must approve the Amendment. The hearing on the Amendment is scheduled for March 10, 2000. The DIP Financing and existing cash flows will be used to fund the Company's operations during its restructuring. As of February 25, 2000, the Company had no outstanding borrowings under the DIP Financing. Vencor and its subsidiaries filed voluntary petitions for reorganization under Chapter 11 with the Court on September 13, 1999. Vencor, Inc. is a national provider of long-term healthcare services primarily operating nursing centers and hospitals. WORLDCORP: Citigroup Reports Holdings ------------------------------------- Citigroup Inc. holds shared voting and dispositive power over 878,983 shares of the common stock of WorldCorp Inc., representing 6.3% of the outstanding common stock of the company. Each of The Travelers Insurance Group Inc., PFS Services, Inc., and Associated Madison Companies share voting and dispositive power over 809,200 of those shares of common stock of WorldCorp Inc., representing 5.8% of the outstanding common stock of the company. PFS Services, Inc. is the sole stockholder of The Travelers Insurance Group,Inc.; Associated Madison Companies is the sole stockholder of PFS Services, Inc; and Citigroup is the sole stockholder of Associated Madison Companies. Meetings, Conferences and Seminars ---------------------------------- February 27-March 1, 2000 NORTON INSTITUTES ON BANKRUPTCY LAW Norton Bankruptcy Litigation Institute I Olympic Park Hotel, Park City, Utah Contact: 1-770-535-7722 March 2-5, 2000 COMMERICAL LAW LEAGUE OF AMERICA 1st Annual Winter Conference Radisson Resort Hotel, Scottsdale, Arizona Contact: 1-561-241-7301 or 1-213-487-7550 March 8-10, 2000 RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC. Healthcare Restructurings: Successful Strategies for Managing Distressed Finances The Regal Knickerbocker Hotel, Chicago, Illinois Contact: 1-903-592-5169 or ram@ballistic.com March 10, 2000 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Century Plaza Hotel. Los Angeles, California Contact: 1-703-739-0800 March 10 & 11, 2000 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES Spring Seminar Hotel Monteleone, New Orleans, Louisiana Contact: 1-803-252-5646 or info@nabt.com March 23-25, 2000 SOUTHEASTERN BANKRUPTCY LAW INSTITUTE, INC. 26th Annual Southeastern Bankruptcy Law Institute Marriott Marquis Hotel, Atlanta, Georgia Contact: 1-770-451-4448 March 23-25, 2000 ALI-ABA Partnerships, LLCs, and LLPs -- Uniform Acts, Taxation, Drafting, Securities and Bankruptcy Doubletree Paradise Valley Hotel, Scottsdale, Arizona Contact: 1-800-CLE-NEWS March 30-April 2, 2000 NORTON INSTITUTES ON BANKRUPTCY LAW Norton Bankruptcy Litigation Institute II Flamingo Hilton Hotel, Las Vegas, Nevada Contact: 1-770-535-7722 April 3-4, 2000 PRACTISING LAW INSTITUTE 22nd Annual Current Developments in Bankruptcy and Reorganization Conference PLI Conference Center, New York, New York Contact: 1-800-260-4PLI April 5-8, 2000 TURNAROUND MANAGEMENT ASSOCIATION Spring Meeting The Pointe Hilton Squaw Peak Resort Phoenix, Arizona Contact: 1-312-822-9700 or info@turnaround.org April 6-7, 2000 ALI-ABA Commercial Securitization for Real Estate Lawyers Walt Disney World, Orlando, Florida Contact: 1-800-CLE-NEWS April 10-11, 2000 PRACTISING LAW INSTITUTE 22nd Annual Current Developments in Bankruptcy and Reoorganization Conference Grand Hyatt Hotel, San Francisco, California Contact: 1-800-260-4PLI April 27-30, 2000 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriott, Washington, D.C. Contact: 1-703-739-0800 May 4-5, 2000 RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC. Bankruptcy Sales & Acquisitions The Renaissance Stanford Court Hotel San Francisco, California Contact: 1-903-592-5169 or ram@ballistic.com May 15, 2000 AMERICAN BANKRUPTCY INSTITUTE 2nd Annual New York City Bankruptcy Conference Association of the Bar of the City of New York, New York, New York Contact: 1-703-739-0800 May 26-29, 2000 COMMERCIAL LAW LEAGUE OF AMERICA 52nd Annual Meeting of the New England Region Colony Hotel, Kinnebunkport, Maine Contact: 1-617-742-1500 or richard@landayleblang.com June 8-11, 2000 AMERICAN BANKRUPTCY INSTITUTE 7th Annual Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800 June 14-17, 2000 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 16th Annual Bankruptcy and Restructuring Conference Swissotel, Chicago, Illinois Contact: 1-541-858-1665 or aira@ccountry.net June 29-July 2, 2000 NORTON INSTITUTES ON BANKRUPTCY LAW Western Mountains Bankruptcy Law Institute Jackson Lake Lodge, Jackson Hole, Wyoming Contact: 1-770-535-7722 July 13-16, 2000 AMERICAN BANKRUPTCY INSTITUTE 7th Annual Northeast Bankruptcy Conference Doubletree Hotel, Newport, Rhode Island Contact: 1-703-739-0800 July 21-24, 2000 National Association of Chapter 13 Trustees Annual Seminar Adams Mark Hotel, St. Louis, Missouri Contact: 1-800-445-8629 or info@nactt.com August 3-5, 2000 ALI-ABA Fundamentals of Bankruptcy Law Somewhere in Boston, Massachusetts Contact: 1-800-CLE-NEWS August 9-12, 2000 AMERICAN BANKRUPTCY INSTITUTE 5th Annual Southeast Bankruptcy Workshop Hyatt Regency, Hilton Head Island, South Carolina Contact: 1-703-739-0800 August 14-15, 2000 TURNAROUND MANAGEMENT ASSOCIATION Advanced Education Workshop Loews Vanderbilt Plaza, Nashville, Tennessee Contact: 1-312-822-9700 or info@turnaround.org September 12-17, 2000 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES Convention Doubletree Resort, Montery, California Contact: 1-803-252-5646 or info@nabt.com September 15-16, 2000 AMERICAN BANKRUPTCY INSTITUTE Views From the Bench 2000 Georgetown University Law Center, Washington, D.C. Contact: 1-703-739-0800 September 21-22, 2000 RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC. 3rd Annual Conference on Corporate Reorganizations The Regal Knickerbocker Hotel, Chicago, Illinois Contact: 1-903-592-5169 or ram@ballistic.com September 21-23, 2000 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Emory University School of Law, Atlanta, Georgia Contact: 1-703-739-0800 September 21-24, 2000 AMERICAN BANKRUPTCY INSTITUTE 8th Annual Southwest Bankruptcy Conference The Four Seasons, Las Vegas, Nevada Contact: 1-703-739-0800 November 2-6, 2000 TURNAROUND MANAGEMENT ASSOCIATION Annual Conference Hyatt Regency, Baltimore, Maryland Contact: 312-822-9700 or info@turnaround.org November 30-December 2, 2000 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800 The Meetings, Conferences and Seminars column appears in the TCR each Tuesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* 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. 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