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/raid1/www/Hosts/bankrupt/TCR_Public/000306.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, March 6, 2000, Vol. 4, No. 45 Headlines ACE BAKING CO: Keebler Comes Up With Winning $6.5M Bid ADVANCED MICRO DEVICES: Shareholders Report Stock Holdings AFFORDABLE HOMES OF AMERICA: Reports Start-Up Expenses ANKER COAL GROUP: Outlines Exchange Offer APPLE ORTHODONTIX: Nasdaq Files Application To De-List Stock ATC GROUP: Seeks Order Extending Exclusive Solicitation Period AVADO BRANDS INC.: Moody's Lowers Ratings BOSTON CHICKEN: 4th Motion To Extend Time To Assume/Reject Leases BREED TECHNOLOGIES: Extension of Time To Assume/Reject Leases BREED TECHNOLOGIES: Order Extends Exclusivity COLUMBIA HCA HEALTHCARE: Announces Operating Results For Year CRIIMI MAE: Finalizes Settlement With Morgan Stanley EAGLE FOOD: Court Approves First-Day Orders EAGLE GEOPHYSICAL: Final Order Approves Secured Borrowing EAGLE GEOPHYSICAL: Order Extends DIP Financing ELDER BEERMAN: Plans to Close Downtown Department Stores FORCENERGY: Terms of Plan of Reorganization FRUIT OF THE LOOM: Motion For Authority To Wind Down Pro Player HARNISCHFEGER: Settles Disputes With Asia Pulp & Paper IMPERIAL HOME: Seeks Extension of Time to Assume/Reject Leases IPM PRODUCTS: Committee Seeks To Employ Counsel KCS ENERGY: Committee Objects To Disclosure Statement LONDON FOG: Order extends Period To Assume/Reject Leases NORTH AMERICAN ENERGY: Files Voluntary Petition For Chapter 11 NORTH AMERICAN VACCINE: Delphi Asset Management Reports Holdings RANCHO CLASSIC: Case Summary and 10 Largest Unsecured Creditors ROBERDS: Secures Financing To Continue Operations SHOE CORPORATION: Order Approves Asset Purchase Agreement SITI-SITES.COM: Reports Net Loss For Quarter TALK AMERICA: Emerges From Chapter 11 With Reorganization Plan WESTERN DIGITAL: To Shift Strategic Focus ********* ACE BAKING CO: Keebler Comes Up With Winning $6.5M Bid ------------------------------------------------------ Keebler Co. came up with the winning $6.5 million bid at a bankruptcy court auction for the right to buy the cone- manufacturing assets of Ace Baking, the largest ice cream cone maker in the United States, according to the Associated Press. Keebler was the highest bidder in the 17 rounds of bids. The Ace Baking unit produced nearly half of the cones for the country's commercial market until it filed for bankruptcy and closed last year. The transaction includes the real estate, machinery, inventory and customers lists. Ace bankruptcy attorney Peter C. Blain, Reinhart Boerner, et al. in Milwaukee, said that Toronto- based George Weston Ltd. had the high bid of $14.2 million for Ace's novelty division, which makes cones for packaged ice cream products sold in stores. That sale transaction includes a factory in Green Bay, Wis. Blain said both sales could close within 10 to 14 days and that both companies will acquire equipment from Ace's operations in Owings Mills, Md., that make paper wrappers for ice cream cones. The majority of the $20.7 million in sale proceeds will go to secured creditors, who hold more than $26 million in Ace debt. Unsecured creditors owed about $7 million will receive the rest of the proceeds. (ABI 03-Mar-00) ADVANCED MICRO DEVICES: Shareholders Report Stock Holdings ---------------------------------------------------------- Brinson Partners, Inc., an investment adviser and indirect wholly-owned subsidiary of UBS AG, owns 9,013,550 shares of the common stock of Advanced Micro Devices Inc., with sole voting and shared dispositive powers. This holding represents 8.7% of the outstanding common stock of Advanced Micro Devices. UBS AG, which is classified as a bank, having its principal office in Zurich, Switzerland, holds 11,140,744 shares of the common stock of Advanced Micro Devices. UBS AG has sole voting and shared dispositive powers over the stock, which stock represents 10.7% of the outstanding common stock of the company. UBS AG reports indirect beneficial ownership of holdings by reason of its ownership of Brinson Partners, Inc. and UBS (USA) Inc., a parent holding company of Brinson Partners Inc. AFFORDABLE HOMES OF AMERICA: Reports Start-Up Expenses ------------------------------------------------------ Affordable Homes of America, Inc. is a real estate development company in the development stage focusing on building homes for low-income and first-time home buyers. There are 5,000,000 families in the United States that spend 50% of their income on rent. This does not leave them sufficient funds for buying the basic family needs of medicine, education, decent transportation and the like. Because of Affordable Homes' specialized construction techniques i.e. in-line framing, foam panelized construction and Z Mix construction, the company believes it will bring the ability to purchase a home within the reach of this 5,000,000 family market and other potential home buyers whose financial resources would not otherwise enable them to purchase a home. Affordable Homes' has also designed a "'World Home" which is a smaller building, for marketing abroad. Preliminary discussions in South America, Europe and the Philippines have indicated widespread acceptance of the World Home in those areas. Reporting on its startup expenses, with no revenues to date, the company reports a loss of $226,216 from its inception to December 31, 1999. ANKER COAL GROUP: Outlines Exchange Offer ----------------------------------------- Anker Coal Group Inc. is offering to exchange up to $106,003,000 in principal amount of the company's outstanding, unregistered 14.25% Second Priority Senior Secured Notes due 2007 (PIK through April 1, 2000) for a like amount of new, substantially identical 14.25% Second Priority Senior Secured Notes that will be free of the transfer restrictions that apply to the outstanding notes. Interest on the notes will be PIK, or paid-in-kind, through April 1, 2000. This means that the company will make the April 1, 2000 interest payment on the notes by issuing, when due, up to $7,553,000 in principal amount of additional new notes instead of paying cash. The offer will expire at 5:00 p.m., New York City time, on March 16, 2000, unless Anker extends it. The new notes will not trade on any established exchange. For additional information access http://www.sec.gov/cgi-bin/srch-edgar?0000950123-00-001382on the Internet, free of charge. APPLE ORTHODONTIX: Nasdaq Files Application To De-List Stock ------------------------------------------------------------ Apple Orthodontix (Amex: AOI) announced that The Nasdaq-Amex Market Group filed an application yesterday with the Securities and Exchange Commission to strike the company's common stock from listing and registration on the Exchange, because Apple has fallen below certain of the exchange's listing guidelines, among which, that it has filed for protection under Chapter 11 of the United States Bankruptcy Code. The delisting is anticipated to be effective on or about March 13. Apple Orthodontix, Inc. is a single specialty practice management company focused on the practice of orthodontics. ATC GROUP: Seeks Order Extending Exclusive Solicitation Period -------------------------------------------------------------- The debtors, ATC Group Services Inc., et al. seek an extension of the exclusive period in which to solicit acceptances of a plan of reorganization. If approved, the exclusive period during which only the debtors may solicit acceptances of a plan of reorganization shall be extended from March 13, 2000 through and including May 12, 2000. The debtors assert that the sheer size and complexity of the cases support a finding of cause to extend the exclusive period. The debtors have obtained approval of their Fourth Amended Disclosure statement and anticipate being able to confirm their Fourth Amended plan before the conclusion of the extended Exclusive period. The debtors have receive a commitment letter for the senior exit facility and a term sheet for subordinated exit financing, and expect to shortly receive a binding commitment letter for the subordinated exit financing. AVADO BRANDS INC.: Moody's Lowers Ratings ----------------------------------------- Moody's Investors Service lowered the ratings of Avado Brands, Inc. as follows: $125 million senior secured bank revolver, 2002, to B1 from Ba3 $116.5 million senior unsecured notes, 2006, to B1 from Ba3 Senior unsecured issuer rating to B2 from B1 $100 million senior subordinated notes, 2009, to B3 from B2 $115 million convertible preferred TECONS, 2027, to "caa" from "b2" The senior implied rating was also lowered to B1 from Ba3. The outlook is stable. This concludes the review that commenced on November 4, 1999. The rating action arises from changes in expectations for revenue growth, EBITDA growth, new store openings, and comparable store sales increases going forward. Operating performance, as exemplified by weak same store sales at two of the company's restaurant concepts, especially Don Pablo's, has been weak and we do not expect significant strengthening over the medium term. We note that the outcome of management's intentions to reconfigure the company's capital structure has not yet been resolved. The ratings consider the intense competition in the casual dining segment of the restaurant industry, the company's leveraged financial condition, challenges in managing four disparate restaurant brands, and the capital intensive nature of the company's real estate philosophy (owning instead of leasing). Persistent performance concerns at Don Pablo's and Canyon Cafe also constrain the rating. However, the ratings recognize that one of the four restaurant brands could fairly easily be carved out to support the company and that ownership of a significant portion of real estate provides an alternate source of liquidity or protection to creditors in a distressed scenario. McCormick & Schmick's expansion success and Hops relatively constant restaurant margins continue to support the rating. The stable outlook reflects our expectation that Avado will remain in compliance with all financial covenants going forward, the company will maintain an adequate liquidity margin, leverage will stabilize, and operating performance will be in line with our revised expectations of Don Pablo's making tangible progress towards a recovery within four quarters. Management largely attributes the company's failure to meet targets to performance issues at Don Pablo's. First, Don Pablo's sales suffered when advertising was largely suspended after an expensive marketing campaign failed to stimulate sales of high- margin dishes during Second Quarter 1999. Second, many of the newly opened Don Pablo's restaurants have not achieved the revenue or profitability of the original stores. It is still too soon to determine the long term effects of a significant new advertising campaign or of cutting back on new store openings to concentrate on existing stores. If the buyout offer from management or another group were to succeed, it likely would be regarded as a change-of-control under the various credit agreements. The change-of-control call price for the senior unsecured notes is 101%, for the senior subordinated notes is 101%, and for the convertible preferred TECONS is 100%. Leverage is high, with debt (including the convertible preferred TECONS) to EBITDA of about 5.6 times for the twelve months ending October 1999. We believe that it is reasonable to treat the convertible preferred TECONS as junior subordinated debt because the company's stock has consistently traded for much less than the conversion price. The net revolver amount (drawn revolver less excess cash) is expected to equal about $100 million at the end of Fiscal 1999; the company had stockpiled cash at the end of the year to guard against Y2K contingencies that did not materialize. EBITDA covered interest expense about 2.6 times, but significant investment in new stores caused EBITDA to fall far short of covering both interest expense and capital expenditures. We anticipate that a significant cutback in new store openings for Fiscal 2000 will allow internally generated cash flow to come much closer to covering interest expense and capital expenditures. Avado Brands, Inc., headquartered in Madison, Georgia, operates 137 Don Pablo's Mexican themed restaurants, 64 Hops Restaurant Bar & Brewery microbreweries, 26 McCormick and Schmick's seafood restaurants, and 16 Canyon Cafe southwestern themed restaurants. BOSTON CHICKEN: 4th Motion To Extend Time To Assume/Reject Leases ----------------------------------------------------------------- The Debtors ask the Court for an extension of the time to assume or reject nonresidential real property leases from December 31, 1999 until the first date set for confirmation of the Debtors' plan of reorganization based on the transaction with McDonald's or, if no such plan is filed by January 15, 2000, then until March 15, 2000, without prejudice to the Debtors seeking a further extension should it become necessary. This request for an extension of time was made only with respect to the Open Store Leases, the Support Center Leases, Leases Pending Assignment, Adjacent Property Leases, Surplus Property Lease, and Income Leases. The Debtors have previously filed three motions requesting an extension of time to assume or reject all of their non- residential real property leases. The Court has entered three orders each granting an extension, with the third order setting the previous deadline at December 31, 1999. The Debtors report that they have rejected 201 leases, have received approval to assume and assign 19 leases, and have assumed 85 leases. Of the 565 unexpired leases and subleases of nonresidential real property which remain as assets of the estates, the Debtors further report: -- 507 leases represent the Debtors' interests in currently operating Boston Market store locations which have not yet been made the subject of either motions to assume, as amended or motions to assume and assign to third parties ("Open Store Leases"); -- 1 such lease represents the Debtors' interest in the corporate headquarters located in Golden, Colorado (the "Support Center Lease"); -- 11 such leases represent the Debtors' interest in property adjacent to open Boston Market store locations; -- 1 such lease represents the Debtors' interest in a surplus parcel of real property that is leased by the Debtors from a third party and sublet by the Debtors to a third party; and -- 45 such leases and subleases represent the Debtors' interest in property leased or sublet to third properties. The Debtors tell the Court that with good effort, they have made substantial progress in determining which leases have value for the estates, which are burdensome leases that should be rejected and which leasehold interests are of marginal value and can be assumed and assigned for cash consideration. Despite this, the Debtors say, they require more time to make the determination as to which of the remaining leases and subleases should be assumed, particularly given their efforts and attention to the acquisition strategy. The Debtors outline 6 categories of leases and subleases: * Open Store Leases, totaling 507; * Leases which have been made the subject of motions to assume and assign, but with respect of which the assignments approved by the Court are not closed as of December 31, 1999 ("Leases Pending Assignment"); * The leasehold on the Support Center which is the only non- residential real property lease; * "Adjacent Property Leases" which are non-residential real property leases adjacent to open Boston Market store locations; * "Surplus Property Lease" in a surplus parcel of real property that is leased by the Debtors from a third party and sublet by the Debtors to a third party; and * "Income Leases" which is a group of leases and subleases representing the Debtors' interests in property leased or sublet to third parties. The Debtors assert that, given the pending transaction with McDonald's Corporation's subsidiary, Golden Restaurant Operations, Inc. ("GRO"), it is of significant economic importance to the Debtors that the present level of operations and the existing core number of stores be maintained. The Debtors explain that they have entered into a Purchase Agreement with GRO dated as of November 30, 1999, and, pursuant to the Purchase Agreement, have agreed to use commercially reasonable efforts to maintain the status quo vis-.-vis their leases of nonresidential real property in order to afford GRO time to review such leases. It is therefore premature for them to make binding decisions as to which leaseholds should be assumed, the Debtors argue. As more than two-thirds of the Boston Chicken store operations are conducted in leasehold locations, the universe of leases to be assumed and assigned is a focal point of the value of the reorganized debtors and a key element in the transaction with GRO, the Debtors contend. The Debtors say the existence of the Purchase Agreement with GRO, and the terms and conditions stated therein, form a sufficient basis for the requested extension of time. With respect to the Open Store Leases, the Support Center leases, Leases Pending Assignment, Adjacent Property Leases, Surplus Property Lease, and Income Leases, the Debtors point out that they are completely current on all leasehold obligations. (Boston Chicken Bankruptcy News Issue 21; Bankruptcy Creditor's Service Inc.) BREED TECHNOLOGIES: Extension of Time To Assume/Reject Leases ------------------------------------------------------------- By order entered on February 16, 2000, the debtors, BREED Technologies, Inc. were granted an extension of the deadline to assume or reject all of their leases through May 15, 2000. BREED TECHNOLOGIES: Order Extends Exclusivity --------------------------------------------- By order entered on February 16, 2000, the debtors, BREED Technologies, Inc. were granted an extension of the period under section 1121(b) of the Bankruptcy Code during which only the debtors may propose and file plans of reorganization, to and including April 28, 2000. The period under section 1121(c)(3) of the Bankruptcy code during which only the debtors may solicit acceptances of any such proposed and filed plans is extended to and including June 30, 2000. COLUMBIA HCA HEALTHCARE: Announces Operating Results For Year ------------------------------------------------------------- Columbia/HCA Healthcare Corporation, in announcing its operating results for the year ended December 31, 1999 reports revenues from continuing operations totaled $16.7 billion compared with $18.7 billion for 1998. This decline reflects the sale or spin- off to shareholders of approximately 85 hospitals and more than 20 ambulatory surgery centers since December 31, 1998. Net income from continuing operations, excluding gains on sales of facilities, impairment of long-lived assets and restructuring of operations and investigation related costs, totaled $767 million in 1999 compared to $590 million for 1998. Net income totaled $657 million for 1999 versus net income of $379 million for 1998. Excluding acquisition related goodwill charges, net income from continuing operations (excluding gains on sales of facilities, impairment of long-lived assets, restructuring of operations and investigation related costs) was $850 million in 1999 compared to $682 million for 1998, a 38 percent increase from the prior year. During 1999, the company sold 24 hospitals, 4 surgery centers and certain other non-core assets resulting in a pretax gain of $297 million ($164 million net of tax). As of December 31, 1999, the company operated 207 hospitals and 83 ambulatory surgery centers (including 12 hospitals and 3 ASCs owned through equity joint ventures), compared to 305 hospitals and 107 ambulatory surgery centers (including 24 hospitals and 5 ASCs owned through equity joint ventures) as of December 31, 1998. At December 31, 1999, the company's balance sheet reflected total debt of approximately $6.4 billion, stockholders equity of $5.6 billion and total assets of $16.9 billion. Capital expenditures for 1999 totaled $1.3 billion. The company's total debt-to- capital ratio was 50 percent at year end 1999 compared to 51 percent at September 30, 1999 and 45 percent at December 31, 1998. On May 11, 1999, the company completed the tax-free spin-offs to Columbia/HCA shareholders of LifePoint Hospitals, Inc. and Triad Hospitals, Inc. Columbia/HCA received approximately $900 million from the spin-off of the 57 hospitals. During 1999, the company repurchased 81 million shares of its common stock at a total cost of approximately $2 billion. In addition, the company's $1 billion share repurchase program, authorized in November 1999, was completed in February 2000. Approximately 34.4 million shares have been purchased at an average cost of approximately $29 per share. The majority of these shares were purchased by certain financial organizations through a series of forward purchase contracts. In accordance with the terms of the forward purchase contracts, the shares purchased remain issued and outstanding until the forward purchase contracts are settled by the company. Several factors continued to affect the company's financial results during the fourth quarter and full year 1999. These factors include - reduced Medicare reimbursement mandated by the Balanced Budget Act of 1997 and changes in Medicare outlier payments which reduced Medicare payments to the company's healthcare facilities by approximately $18 million during the fourth quarter of 1999 and approximately $124 million for the year 1999; and increased supply expense due to the increasing costs of new technology and pharmaceuticals. The company estimates that its Medicare reimbursement in 2000 will be reduced by approximately $40-$45 million from the previous year due to continuing provisions of the Balanced Budget Act of 1997 and changes in Medicare outlier payments. CRIIMI MAE: Finalizes Settlement With Morgan Stanley ---------------------------------------------------- Criimi Mae Inc., Rockville, Md., announced that it sold eight classes of subordinated commercial mortgage-backed securities (CMBS), which generated proceeds of about $45.9 million and moved Criimi Mae closer to its goal of selling selected CMBS, according to a newswire report. The sale, which was part of an agreement between Criimi Mae and Morgan Stanley & Co. International Ltd., finalized the settlement of pending litigation between the two parties and represented a positive step in Criimi Mae's chapter 11 reorganization, the firm said. Criimi Mae used about $37.5 million of the sales proceeds to pay off all the debt it owed to Morgan Stanley. The remaining proceeds will be used primarily to help fund the reorganization plan. Criimi Mae and two affiliates filed for chapter 11 protection in October 1997.(ABI 03-Mar-00) EAGLE FOOD: Court Approves First-Day Orders ------------------------------------------- Eagle Food Centers, Inc. (NASDAQ: EGLE) successfully obtained Court approval of interim debtor-in-possession financing and various "first day" requests for relief from the Honorable Roderick R. McKelvie of the United States District Court presiding over Eagle's chapter 11 reorganization case filed on Tuesday, February 29, 2000 in Wilmington, Delaware. In particular, the Court authorized Eagle, among other things, to pay prepetition claims of employees, utilities, reclamation claimants, critical trade vendors and other key constituents. The Court scheduled a hearing on March 21, 2000 to consider Eagle's request for final approval of the $50 million debtor-in- possession and to authorize Eagle to pay the prepetition claims of its remaining trade creditors. The Court also scheduled a hearing to approve Eagle's disclosure statement for April 17, 2000 and a confirmation hearing on Eagle's plan of reorganization on May 17, 2000. On February 29, 2000, Eagle filed for protection under Chapter 11 in Wilmington, Delaware to effectuate a pre-negotiated plan of reorganization. The Plan has already been agreed to by Eagle's prepetition bank lender and institutional holders of Eagle's 8 5/8% Senior Notes due April 15, 2000 representing approximately 29% of the $100,000,000 in outstanding Senior Notes. The primary feature of the Plan will restructure the payment and interest terms of the Senior Notes through the issuance of replacement notes. The outstanding principal and all interest under the Senior Notes will be paid in full under the terms of the New Senior Notes and the Plan. In particular, the New Senior Notes will have the material terms and conditions: (i) a maturity date of April 15, 2005; (ii) an interest rate of 11%; and (iii) Eagle may, at its option, redeem the New Senior Notes at 100% of the principal amount outstanding at the time of redemption. On the effective date of the Plan, Eagle will also pay: (a) all accrued interest on the Senior Notes (which will continue to accrue through the duration of the case) and (b) $15 million in cash to reduce the principal amount of the New Senior Notes. On the effective date of the Plan, Eagle will also distribute 15% of the fully diluted common stock to Eagle to the holders of the Senior Notes, some of which (up to 10%) will be recoverable by Eagle upon the occurrence of certain conditions. Eagle Food Centers, Inc. is a leading regional supermarket chain headquarted in Milan, Illinois, operating 83 stores in central Illinois, eastern Iowa, and northwestern Indiana. EAGLE GEOPHYSICAL: Final Order Approves Secured Borrowing --------------------------------------------------------- By order entered on February 23, 2000, the US Bankruptcy Court, District of Delaware granted the Financing Motion providing the debtor with secured borrowing from Heller Financial Leasing Inc. The Credit Documents are hereby approved and the DIP Borrower is immediately authorized to borrow, subject to and in accordance with, the terms and conditions of the Credit Documents, up to $1,860,000. EAGLE GEOPHYSICAL: Order Extends DIP Financing ---------------------------------------------- By order entered on February 23, 2000, the US Bankruptcy Court for the District of Delaware entered an order providing that the expiration date of the DIP financing with Wells Fargo Business Credit Inc. shall be extended to May 31, 2000. ELDER BEERMAN: Plans to Close Downtown Department Stores ----------------------------------------------------------------- Elder-Beerman Stores Corp. announced Thursday it plans to close its downtown department stores in Charleston and Wheeling, W.Va., in June because they are not operating at acceptable business levels. The two stores employ a total of 115 workers. The Wheeling store was the former flagship of the Stone & Thomas department store chain the Dayton-based retailer purchased in 1998 for $38 million. In that purchase, Elder-Beerman received 21 Stone & Thomas stores in West Virginia, Virginia, Ohio and Kentucky. Several of those stores have already been closed. Stone & Thomas operated two stores in Charleston. Elder-Beerman announced it would close a store operated at Charleston's downtown Town Center mall and keep a store open at another Charleston mall. Employees in both stores will be offered transfers to other stores or severance packages. Frederick Mershad, chairman of Elder-Beerman, said the stores were underperforming despite the best efforts of the workers. "Other Elder-Beerman locations in West Virginia have increased in profitability. We have no choice but to focus our efforts on those locations where we are more successful." Elder-Beerman operates eight other stores in West Virginia. Excessive inventory and competition forced Elder-Beerman to seek Chapter 11 bankruptcy protection in October 1995. It emerged from reorganization Dec. 30, 1997, transforming itself from a family- run business into an independent, publicly traded company. The independent department store chain operates 62 stores in Ohio, West Virginia, Indiana, Michigan, Illinois, Kentucky, Wisconsin and Pennsylvania. FORCENERGY: Terms of Plan of Reorganization ------------------------------------------- The following information is being furnished in connection with the consummation of the First Amended Joint Plan of Reorganization dated October 26, 1999, of Forcenergy Inc and Forcenergy Resources Inc., as modified and confirmed. On February 15, 2000, the Plan was consummated and became effective, thus completing Forcenergy's financial restructuring. Under terms of the Plan, a new Board of Directors has been appointed. The nine member Board of Directors includes four former directors - Bruce L. Burnham, Eric Forss, Robert Issal and Stig Wennerstrom, Forcenergy's President and Chief Executive Officer, as well as five new directors - Michael F. Bennet, B. James Ford, Clifford P. Hickey, Stephen A. Kaplan and Gregory P. Pipkin. In connection with the consummation of the Plan, Forcenergy has entered into a new Credit Agreement with ING (U.S.) Capital Corporation as Agent, which agreement provides for $250 million in Revolving Credit Loans and $70 million in Term Loans. Forcenergy has commenced distributions of Rights Offering Subscription forms to holders of allowed general unsecured claims and set a Subscription Rights election deadline of March 10, 2000. The company expects to complete the Rights Offering and any issuance to the standby purchasers under the commitment agreement as soon as practicable thereafter. In accordance with the Plan, certificates representing shares of old Forcenergy common stock, including shares of Convest and Edisto that have not been exchanged for shares of old Forcenergy common stock, and old Senior Subordinated Notes have been canceled. Distributions of shares of New Forcenergy common stock and Warrants are being made by American Stock Transfer & Trust Company, Forcenergy's transfer agent and registrar. Holders of Old common stock and old Senior Subordinated Notes may contact their brokers regarding these distributions and information that may be required in connection with these distributions. Forcenergy has established an initial reserve of 1,115,326 shares of new Forcenergy common stock, or approximately $20 million, for disputed claim amounts of general unsecured claims. Holders of approximately $393,152,601 of allowed general unsecured claims will receive a pro rata share of an initial distribution of 21,924,674 shares of new Forcenergy common stock, or approximately 1 share for each $17.93197 of claims. Surplus distributions of shares for allowed claims that are unclaimed after one year and disputed claims that are not allowed, or are allowed in an amount less than the disputed claim amount, will be made to holders of allowed general unsecured claims as of the record date on January 28, 2000 in accordance with the Plan. FRUIT OF THE LOOM: Motion For Authority To Wind Down Pro Player --------------------------------------------------------------- Pro Player, Inc., Salem Sportswear, Inc., and Salem Sportswear Corp. are each subsidiaries of Union Underwear Company, Inc. and indirect subsidiaries of Fruit of the Loom, Inc. Pro Player manufactures, sells, and promotes sports, leisure and entertainment products bearing the names, logos, uniform colors, insignia, and designs of (a) professional sports teams, including the teams of the National Hockey League, the National Football League, Major League Baseball, and the National Basketball Association and (b) approximately 140 colleges and university sports teams. Pro Player conducts these businesses as exclusive or non-exclusive licensee under licenses granted pursuant to numerous Licensing Agreements, sponsorship agreements, and related agreements with the leagues, teams, colleges, and universities. Like many domestic manufacturers of licensed apparel, and sports apparel in particular, Pro Player suffered from an industry-wide epidemic of liquidity problems and lackluster sales performance. In the early fall of 1999, Fruit of the Loom began investigating the possibility of selling Pro Player to a strategic or financial buyer on a going concern basis. Fruit of the Loom's financial advisors at the time contacted a total of 53 potential buyers, including 26 strategic buyers and 27 financial buyers in this regard. Since the Petition Date, Lazard Freres have been in contact with 16 potential buyers, including 12 strategic buyers (4 of whom were originally contacted prepetition) and 4 financial buyers (1 of whom was originally contacted prepetition). Of these 64 potential buyers, only 3 made non-binding indications of interest or offers to acquire the business of Pro Player on a going concern basis. After preliminary due diligence, two withdrew their offers. The remaining potential buyer made an offer with numerous conditions and qualifications that, in the opinion of Fruit of the Loom's financial advisors and the boards of directors of Fruit of the Loom and Pro Player, would even if all of the conditions could be satisfied and the proposed deal consummated expeditiously -- provide the estate with less value than the current projected liquidation value of Pro Player's assets, The Debtors' Boards have determined that absent a firm offer to acquire Pro Player on a going concern basis, liquidation would best maximize the value of the assets of Pro Player for the benefit of creditors. The Boards reached this conclusion after thoroughly considering the available options, namely a sale on a going concern basis with the concomitant uncertainties and on-going administrative expenses or, alternatively, an orderly wind-down and liquidation. The Boards determined that, based on the conditions and uncertainties of the Bidder's bid, a greater recovery for the estate would be achieved by an immediate, expeditious, and orderly liquidation of Pro Player's assets. Because the Boards have made a reasoned business decision to wind-down the operation and liquidate the assets of Pro Player, and such decision is based on the absence of any option that would create superior value for Pro Player's creditors, Judge Walsh approved the Boards' decision to wind-down operations and liquidate the assets of Pro Player, direct Pro Player to wind-down operations effective as of February 9, 2000, and authorize Pro Player to implement all reasonable and appropriate actions in further of the wind-down and liquidation without further approval or order of the Court. In all events, Pro Player and Fruit of the Loom expressly reserve the right to accept a bid to purchase the business of Pro Player on a going concern basis that, in its business judgment, exceeds liquidation value and is reasonably certain of closing on an expeditious time frame and without a material purchase price reduction. If an acceptable bid is made, Pro Player will proceed with a motion to approve the sale of Pro Player on a going concern basis to the bidder on an expedited basis.(Fruit of the Loom Bankruptcy News Issue 4; Bankruptcy Creditor's Service Inc.) HARNISCHFEGER: Settles Disputes With Asia Pulp & Paper ------------------------------------------------------ Harnischfeger Industries, Inc. ("HII") (OTC Bulletin Board: HRZI) announced the signing of a definitive agreement to settle disputes and related pending arbitration and legal proceedings with Asia Pulp & Paper Company Ltd ("APP"). The disputes arose out of the proposed sale by HII's Beloit Corporation ("Beloit") subsidiary of two fine papermaking machines to a subsidiary of APP. Under the settlement, APP will pay $135 million to Beloit and $16 million HII deposited with a bank with respect to related letters of credit will be released to HII. The $135 million is to be paid $25 million in cash and $110 million in a three-year note issued by an APP subsidiary and guaranteed by APP. The note is to be governed by an indenture and bear a fixed interest rate of 15%. The settlement is subject to the satisfaction of certain conditions, including U.S. bankruptcy court approval. On June 7, 1999, HII and its U.S. subsidiaries, including Beloit, filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. As part of the settlement, Beloit will retain a $46 million down payment it received from APP for the two papermaking machines and APP will release letters of credit in the amount of the down payment. APP will acquire certain components and spare parts produced or acquired by Beloit in connection with the two papermaking machines. APP will acquire the components and spare parts on an "as is, where is" basis. In addition, Beloit will return to APP certain promissory notes given to Beloit by APP. The notes were initially issued in the amount of $59 million and have a current aggregate principal balance of less than $20 million. James A. Chokey, Executive Vice President for Law and Governmental Affairs, said, "We view this as a positive outcome for HII and Beloit and another important step in the process of divesting and liquidating Beloit." Mr. Chokey indicated that the note and cash are to be delivered to Beloit after bankruptcy court approval but not before March 31, 2000. He noted that the value of the settlement will not be reflected in HII's financial statements until Beloit and HII receive the cash and note. Mr. Chokey also cautioned that, under the Bankruptcy Code, postpetition liabilities and prepetition liabilities (i.e., liabilities subject to compromise) must be satisfied before shareholders can receive any distribution. The ultimate recovery to shareholders, if any, will not be determined until the end of the case when the fair value of HII's assets is compared to the liabilities and claims against the company. There can be no assurance as to what value, if any, will be ascribed to the common stock in the bankruptcy proceedings. Harnischfeger Industries, Inc. is a global company with business segments involved in the manufacture and distribution of equipment for underground mining (Joy Mining Machinery), surface mining (P&H Mining Equipment), and pulp and papermaking (Beloit Corporation). IMPERIAL HOME: Seeks Extension of Time to Assume/Reject Leases ----------------------------------------------------------------- The debtors, The Imperial Home D�cor Group Inc., et al. seek an order extending the time to assume, assume and assign or reject unexpired nonresidential real property leases. The debtors claim that they have been unable to evaluate the leases thoroughly, determine which of the leases will contribute to the debtor's restructuring efforts or solicit the views of the Creditors' Committee and other constituencies regarding the appropriate treatment of each lease. The debtors seek an extension of time through and including the Confirmation Date. IPM PRODUCTS: Committee Seeks To Employ Counsel ----------------------------------------------- The Official Committee of Unsecured Creditors proposes to retain the law firm of Ravin, Greenberg & Marks, PA as its counsel nunc pro tunc to February 8, 2000. The Committee seeks a court order authorizing the retention of Ashby & Geddes, nunc pro tunc to February 8, 2000 as Delaware counsel to the Committee. KCS ENERGY: Committee Objects To Disclosure Statement ----------------------------------------------------- The Official Committee of Unsecured Creditors of KCS Energy, Inc. and its affiliated debtors, objects to the debtor's First Amended Disclosure Statement for the debtors' joint plan of reorganization. Specifically the Committee states that the Disclosure Statement: Fails to discuss the impact of the claim of certain holders of senior debtor with respect to the distribution to holders of subordinated debt; Fails to discuss the existing dispute regarding whether the holders of senior debt are entitled to vote on the plan; Contains contradictory and therefore misleading statements regarding the difference between the existing subordinated notes and the notes that will replace them pursuant to the proposed plan; Fails to discuss the risks and feasibility problems associated with the debtor's proposed exit financing; and Fails to provide adequate, recent information regarding the debtors' oil and gas reserves. LONDON FOG: Order extends Period To Assume/Reject Leases ---------------------------------------------------------- By order entered on February 18, 2000, the Honorable Peter J. Walsh approved the extension of the period within which the debtors may assume or reject the leases (as defined in the Motion)to and including May 26, 2000. NORTH AMERICAN ENERGY: Files Voluntary Petition For Chapter 11 -------------------------------------------------------------- The following Form 8-K was filed with the Securities and Exchange Commission, Washington, D.C., on March 2, 2000, by York Research Corporation ("York") as Registrant. On March 2, 2000, North American Energy Conservation, Inc., ("NAEC") an eighty-five percent owned subsidiary of the Registrant engaged in natural gas marketing, filed a voluntary petition for Chapter 11 bankruptcy in the Unites States Bankruptcy Court for the Southern District of New York. Neither York nor any other subsidiary or affiliate has sought bankruptcy protection. York is continuing its core business which includes the development of new cogeneration and renewable energy projects, as well as the operation of its existing portfolio of power projects. The NAEC filing was ultimately precipitated as a consequence of previously reported events which began with losses sustained by NAEC during the summer of 1998 when several vendors in its original wholesale electric marketing business defaulted on long term electric supply contracts. These events caused NAEC to incur substantial losses, as well as further losses during the summer of 1999 which were in part due to the failed long term contracts. These losses were funded through working capital loans that had been guaranteed by Registrant. More recently, NAEC has seen fundamental change in its marketing business, caused in part by the above-described turmoil. As a result, NAEC has been faced with a declining number of counter- parties and increasingly stringent credit limits for its previously profitable natural gas marketing operations. As a result of the foregoing, it became clear to Registrant that the appropriate strategy would be to wind down or divest the wholesale gas marketing activities of NAEC and either reorganize or divest its retail gas marketing business in order to concentrate on its core business, to wit, power project development with specific emphasis on Green Power (renewable energy) projects and services. During December 1999 and January and February 2000, Registrant negotiated and signed conditional agreements with various entities which, if consummated, would have achieved the strategic purpose. When the last of these transactions could not be consummated it became clear that the disposition of NAEC's business would have to be accomplished with the protection of the bankruptcy court. Following the filing, NAEC intends to continue to meet its existing obligations to its retail consumers. Certain liabilities of NAEC have been guaranteed by the Registrant. These include NAEC's credit line from Congress Financial Corp. which is secured by all of NAEC's assets. Congress has not exercised its remedies under this credit line, and is cooperating with NAEC, but has the right to exercise its remedies at any time. NAEC anticipates that as receivables are collected over the next two months the amount outstanding under this credit line will be reduced to below $1 million. The Registrant has also guaranteed NAEC's obligations under a number of contracts for the purchase and/or sale of natural gas. These contracts have been terminated effective March 1, 2000. These contracts typically provide for liquidated damages based on the market price for gas as of the date of termination. NAEC cannot at this point estimate the aggregate liability under these contracts, and in certain instances believes it has meritorious defenses to liabilities under these contracts. While significant, unless and until the liability under the contracts is determined, it is impossible to precisely quantify the Registrant's exposure. NAEC believes that the filing will give it a chance to reorganize its affairs in an orderly fashion. NAEC proposes to meet with its creditors in an attempt to negotiate a plan of reorganization. Such plan would be principally funded by Registrant by the contribution of cash, debt, or equity. At this point, it is difficult to estimate the effect of the bankruptcy filing and the attendant disputes on the Registrant. No actions have been commenced against the Registrant. Should any such actions be commenced, in addition to contesting them vigorously, the Registrant will seek to have them stayed pending resolution of the NAEC bankruptcy filing. However, should such actions continue and be successful, they could have a material adverse effect on the Registrant, potentially forcing the Registrant to seek protective remedies. In order to implement its strategic plan, Registrant, as previously reported, plans to redeem the $150,000,000 Senior Secured Bonds due October 30, 2007 of York Power Funding (Cayman) Ltd. Redemption of the bonds will unlock the asset values and cash flows of the Registrant's major projects, and through sale or separate refinancing of certain of such projects should provide proceeds sufficient to carry on the Registrant's core business as well as to fund an NAEC plan. Registrant has retained Credit Suisse First Boston, Ltd. to advise it with respect to the redemption of the bonds, as well as the refinancing or sale of certain projects. York develops, constructs, and operates cogeneration and renewable energy projects. NORTH AMERICAN: Delphi Asset Management Reports Holdings -------------------------------------------------------- Delphi Asset Management, Inc., which reflects a change of name of the entity that was formerly known as Delphi Asset Management, holds sole voting power over 1,622,300 shares, and sole dispositive power over 2,277,700 shares of the common stock of North American Vaccine Inc. Beneficial ownership of the 2,277,700 shares constitutes 6.9351% of common stock of the company. Delphi indicates that ownership of the stock is on behalf of a number of private investment vehicles and managed accounts. RANCHO CLASSIC: Case Summary and 10 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Rancho Classic Ltd Partnership 2450 Chandler Ave. Suite 1 Las Vegas, NV 89120 Type of Business: Real Estate Management Petition Date: February 24, 2000 Chapter 11 Court: District of Nevada Bankruptcy Case No.: 00-11281 Judge: Robert C. Jones Debtor's Counsel: David J. Winterton, Esq. 4142 Edwards & Winterton, Chtd. 401 N. Buffalo Drive Suite 200 Las Vegas, Nevada 89128 (702) 363-0317 Total Assets: 1 million above(estimate) Total Debts: 1 million above(estimate) 10 Largest Unsecured Creditors First Security Bank $ 1,850,000 Las Vegas, NV Integrated Financial Assoc. $ 320,000 Ellsworth, Moody & Bennion $ 22,000 Alpha Engineering $ 15,000 Converse Consultants $ 500 G.C. Wallace $ 6,500 TechFast Metal Systems $ 13,000 Balance Insurance Agency $ 3,000 Carrair Investment Corp. PO Box 768 Orinda, CA 94563 $ 450,000 The Horn Company 2450 Chandler Ave, Suite One Las Vegas, NV 89120 $ 250,000 ROBERDS: Secures Financing To Continue Operations ------------------------------------------------- The Cincinnati Enquirer reports on March 1, 2000 that that Roberds Inc., the bankrupt parent of the former Roberds Grand, said it has secured financing to continue operations and is again receiving shipments from suppliers. The Dayton, Ohio-based chain said it obtained $ 25 million of debtor-in-possession financing from PPM Finance Inc. in Chicago. The line has a 27-month term, which is expected to be long enough to carry the retailer through reorganization. Roberds filed for Chapter 11 bankruptcy protection in January. The retailer also said DJM Asset Management and Newark Retail Financial Advisors, both of New York, will handle sale, sublease or disposal of properties that Roberds vacated in Cincinnati and Tampa, Fla. Roberds Grand in Springdale closed in February after a two-week liquidation. Roberds is awaiting information from Nasdaq to learn whether its stock can resume trading. SHOE CORPORATION: Order Approves Asset Purchase Agreement --------------------------------------------------------- By order dated February 18, 2000, the US Bankruptcy Court for the Southern District of Ohio, Eastern Division approved the Asset Purchase Agreement dated as of February 11, 2000 between and among J. Baker, Inc. as purchaser and Shoe Corporation of America, Inc., SCOA License, Inc. and SCOA Leasing Corporation as sellers. SITI-SITES.COM: Reports Net Loss For Quarter -------------------------------------------- Siti-Sites.com, Inc., formerly known as Spectrum Information Technologies, Inc., and its subsidiary Tropia, Inc., a Delaware corporation, comprise an Internet media company seeking to establish websites for the marketing of products and services. The company's four current websites relate primarily to the music industry. Siti-Sites.com, Inc. was incorporated in Delaware in 1984. As a result of a change of control of the company on December 11, 1998, the company's senior management and Board of Directors were replaced. The new senior management and Board of Directors changed the strategic direction of the company from being a developer of patented communication technologies to that of an Internet media company. Consequently, the prior business operations of the company were discontinued. The company changed its corporate name to Siti-Sites.com, Inc. after its annual meeting of stockholders on December 14, 1999, but has retained its stock symbol "SITI." As a result of the change of control, subsequent equity investments and option exercises, an aggregate of $1,007,000 of new equity was invested in the company by January 1999. Subsequently, in December, 1999, Lawrence M. Powers, the Chairman/CEO and a major stockholder of the company, through Powers & Co (a sole proprietorship owned by Mr. Powers), Robert Ingenito, the Vice-Chairman and President of SITI, and John DiNozzi, a business partner of Mr. Ingenito invested an additional $1,750,000 in the company. As a result of the December 11, 1998 change of control transaction the company discontinued its prior operations, consequently the company has restated the prior years' financial statements to reflect such discontinuation. In reporting on the three months ended December 31, 1999 the company reports a net loss of $469 as compared to the same quarter of 1998 when net loss was $1,060. In the nine month period ended December 31, 1999 Siti-Sites.com reported a net loss of $925 as compared to the same period of 1998 when losses were reported at $1,259. On January 3, 2000, SITI. acquired all of the assets and certain liabilities relating to three music-related websites (i) HungryBands.com, an e-commerce website and business promoting and selling music by independent artists, (ii) NewMediaMusic.com, an e-news/magazine business devoted to new Internet music, news releases by artists and record labels, interviews and other information useful to fans and artists, and (iii) NewYorkExpo.com, a music and Internet conference business. The acquired assets consisted primarily of intangible assets. TALK AMERICA: Emerges From Chapter 11 With Reorganization Plan -------------------------------------------------------------- Talk America has emerged from Chapter 11 bankruptcy proceedings with a reorganization plan that the Portland-based telemarketer said repays all creditors. Talk America, which marketed diet and herbal supplements through infomercials and other forms of advertising, filed its U.S. Bankruptcy Court petition last May. The company said the move followed several unsuccessful sales campaigns and a dispute with one of its vendors. The 2,000 creditors included about 1,000 customers who bought Talk America products and sought refunds under the company's money-back guarantee. Talk America has since sold its call center assets to Beacon Marketing, which provides services to Talk America under a court- approved agreement. Talk America continues to operate its marketing and product development company with 23 employees and will launch a new line of health products later this month. WESTERN DIGITAL: To Shift Strategic Focus ----------------------------------------- In January Western Digital Corporation announced it would exit the enterprise hard drive business and shift its strategic focus and resources in the enterprise storage market to Internet- related data content management systems and management software. In connection with this decision, the company closed its Rochester, Minnesota enterprise hard drive design center, and a majority of the 420 employees in the design center have been laid off and given legally required notification and outplacement services. The exit from the enterprise business will result in nonrecurring charges against operations in the quarter ended March 31, 2000. The company currently estimates these charges to include $25.0 million for property and equipment write-offs, and $11.0 million for severance ($8.0 million relating to domestic operations). The company is currently analyzing the effect of this decision on inventory purchase commitments and the price levels that may be needed to sell the company's remaining enterprise products. Consolidated revenues were $560.2 million for the three months ended December 31, 1999, a decrease of 24%, or $178.4 million, from the three months ended December 26, 1998 and an increase of 38%, or $153.2, from the immediately preceding quarter. Net losses for the quarter ended December 31, 1999 were $15.2 million as compared with net losses in the same quarter of 1998 of $82.3 million. Consolidated revenues were $967.1 million for the six months ended December 31, 1999, down 30% from the six months ended December 26, 1998. Net losses in the 1999 six-month period were $121.5 million as compared to the 1998 comparable six-month period when net losses were $276.9 million. ********* 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. 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