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/raid1/www/Hosts/bankrupt/TCR_Public/000323.MBX T R O U B L E D C O M P A N Y R E P O R T E R Thursday, March 23, 2000, Vol. 4, No. 58 Headlines ADVANCED MEDICAL PRODUCTS: Name Change and Reverse Split AMERICAN BANKNOTE: Seeks Extension of Exclusivity AMRESCO: Dresdner Entities Divest Themselves of Holdings ATC GROUP SERVICES: Seeks to Reject Four Leases AVIATION SALES CO.: Moody's Lowers Ratings BMJ MEDICAL: Seeks to Extend Time to Assume or Reject Leases CENTRAL VERMONT: Sells Interest In The Home Service Store COHO ENERGY: Announces Plan Confirmation COMPLETE MANAGEMENT: To Sell Substantially All Operating Assets FLAG TELECOM: Barclays Bank Beneficial Owner of 11.2% of Stock GARDEN BOTANIKA: Comparable Store Sales Decrease 3% For February GENESIS AND MULTICARE: Moody's Downgrades Ratings HARNISCHFEGER: Second Motion For Exclusivity Extension HOME HEALTH: Seeks Extension of Exclusivity ICO GLOBAL: Court Approves ICO's Disclosure Statement ICON ENERGY: Lexxor Energy Icon Energy Announce Approval of Plan INTEGRATED STEEL: Sold to Heidtman Steel Products KEY PLASTICS: Suppliers and Creditors Threaten Lawsuits MARINER: Final Approval Of $100M DIP Financing OXFORD HEALTH: Annual Meeting To Be Held On May 11, 2000 PHYSICIAN ASSET: Case Summary and Largest Unsecured Creditors PIC 'N PAY: Plans To Close Stores; Outlook Negative PREMIER LASER: Nasdaq Halts Trading of Shares PRIMARY HEALTH: Seeks To Extend Exclusivity SAFETY KLEEN: Retains Jay Alix; Interim CFO Appointment SOUTHERN PACIFIC: S&P Lowers Ratings USN COMMUNICATIONS: Putnam Investments Reports Holdings WILLIS LEASE FINANCE: Benson Associates Reports Holdings WORLDWIDE DIRECT: Seeks To Resolve Disputes With Fletcher Int'l BOND PRICING: For Week of March 20, 2000 ********* ADVANCED MEDICAL PRODUCTS: Name Change and Reverse Split -------------------------------------------------------- In accordance with the vote of the majority of the shares of common stock of Advanced Medical Products Inc., a Certificate of Amendment of the Certificate of Incorporation of the company has been filed with the Secretary of State of Delaware changing the name of Advanced Medical Products, Inc. to ADVA International Inc. The change was accompanied by a one share for ten shares reverse split of all of the common stock issued and outstanding. The company was also authorized to issue 20,010,000 shares, of which 20,000,000 shares will be common stock, all of which will have a par value of $0.001, amounting in the aggregate to $20,000, and 4,000 shares will be Class A Preferred Stock all of which will have no par value, and 6,000 shares of Class B Preferred Stock all of which will have no par value. Effective immediately, the common stock trading symbol on the NASDAQ Bulletin Board for ADVA International Inc. is "ADII" AMERICAN BANKNOTE: Seeks Extension of Exclusivity ------------------------------------------------- The debtor, American Banknote Corporation, seeks a court order extending the exclusive periods during which the debtor may file one or more reorganization plans and solicit acceptances of such plans each by 60 days, through and including June 5, 2000 and August 4, 2000 respectively. The debtor submits that the extension of the exclusive period is justified because the debtor's case is large and complex, the debtor has made significant progress in the case, and the extension will facilitate reorganization and will not prejudice any party in interest. The debtor is in the process of reducing corporate overhead by 50% and corporate staff by 43%. The debtor is seeking to dispose of its headquarters and the debtor has been in frequent contact with the Noteholders' Committee. Termination of the Exclusive Periods at this time will also make it more difficult for t ABN to resolve the delicate issues relating to the governmental investigations. AMRESCO: Dresdner Entities Divest Themselves of Holdings -------------------------------------------------------- Dresdner Bank AG, Dresdner RCM Global Investors LLC, and Dresdner RCM Global Investors US Holdings LLC no longer hold the common stock of Amresco Inc. having divested themselves of their former holdings. ATC GROUP SERVICES: Seeks to Reject Four Leases ----------------------------------------------- The debtors, ATC Group Services Inc., et al. seek to reject four leases of nonresidential real property. The leases are as follows: The Norristown, Pennsylvania Storage Lease - 1850 Gravers Road, Norristown, Pa - 9,800 square feet of storage apace to store certain equipment and machinery. The debtors vacated the premises in early January 2000. The Dallas, Texas Lease - Mann Realty Company is the landlord under the lease. The debtors lease approximately 12,150 square feet of office space to conduct environmental consulting and engineering and construction management services in and around the Dallas area. The debtors have relocated to a smaller and less expensive property. The Indianapolis (Schmoll Industrial Park), Indiana Lease - The debtor leases six individual building units to conduct environmental consulting and engineering and construction management services in and around the Indianapolis area. Each building unit is approximately 4,000 square feet. The debtors have determined that the large amount of space and costly monthly rental is no longer cost efficient. The Indianapolis (Mann Realty), Indiana Leases - The debtors lease approximately 28,5000 square feet of office space to conduct environmental consulting and engineering and construction management services in and around the Indianapolis area. The debtors are seeking a new single office space at a reduced cost for the Indianapolis area. AVIATION SALES CO.: Moody's Lowers Ratings ------------------------------------------ Moody's Investors Service lowered the ratings on Aviation Sales Company's $300 million senior secured credit facility to B1 from Ba2, the long term issuer rating to B3 from B1, and the $165 million 8 1/8% senior subordinated notes due 2008 to Caa1 from B2. The senior implied rating was lowered to B2 from Ba3 and the outlook was changed to negative from stable. The rating action was prompted by the company's announcement that it will take $72 million in charges (mostly non-cash) in the fourth quarter of 1999 and will be in default of the Bank Credit Agreement as of March 31, 2000. We believe that the company may have violated the covenant related to minimum tangible net worth. Concurrent with the announcement, the company also revealed that the Board of Directors was investigating past revenue recognition procedures to determine if revenue and margin in prior periods was overstated. The rating downgrade reflects Moody's concern with the methodology the company uses to value aircraft and aircraft parts inventory assets and of the possible need for additional charges, further reducing asset coverage of the senior secured bank facility. In addition, Moody's is concerned with possible liquidity pressures, with the credit facility being already largely drawn, and questions regarding availability. Supporting the ratings is the company's position as one of the more important companies in the aircraft maintenance industry, the cushion provided by a positive book net worth, and the company's relatively strong interest coverage. The negative outlook reflects concern that additional adjustments and charges may occur after the review of the company's accounting practices as well as new burdens that amending or refinancing the bank facility could impose upon the company. The B1 rating on the senior secured credit facility recognizes that it is secured by substantially all tangible and intangible assets of the company. However, we believe that the fair market value of inventory and of other assets may not be as great as previously assumed. The Caa1 rating on the senior subordinated notes reflects that, while the Notes are subordinated to a significant amount of senior debt, the foundation provided by the company's positive net worth should limit loss in a distressed scenario. The company is taking steps to increase liquidity. First, the company's senior secured lenders have recently agreed to forbear in regard to covenant violations until March 31, 2000 and the company is currently in negotiations with the lenders seeking both waivers of these defaults, or an extension of the forbearance period, and a new credit facility. Moody's believes that additional or restored credit availability will be agreed to. Second, the company is taking actions to reduce debt and increase liquidity through sales of its assets, including the potential sale of its manufacturing operations, and is continuing efforts to sell or lease the four A-300 aircraft which it owns. For the twelve months ending September 1999, EBITDA covered interest expense by about 3.1 times. Debt to EBITDA was about 4.2 times. The company's acquisition pace has diminished, so EBITDA less interest, capital expenditures, and acquisitions was slightly positive. However, the significant growth of receivables and inventory was largely funded by borrowings under the revolving credit. Following the $72 million of charges, the company will not meet the minimum tangible net worth of $200 million required at the end of December 1999. Aviation Sales Company, headquartered in Miami, Florida, is a leading independent provider of fully integrated aviation inventory and maintenance services, including aircraft heavy maintenance, component repair and overhaul, leasing, the redistribution of aircraft spare parts, and the manufacture of new components for major airlines, original equipment manufacturers, and repair and maintenance facilities around the world. BMJ MEDICAL: Seeks to Extend Time to Assume or Reject Leases ------------------------------------------------------------ The debtors are seeking a fourth motion for entry of order extending time within which debtors may assume or reject unexpired leases of non-residential real property. A hearing to consider the motion will take place before the Honorable Mary F. Walrath, US Bankruptcy Court, District of Delaware, on April 7, 2000. The debtor maintains that the leases are critical assets of the debtors' estates. The debtors' cases are large and complex and involve a significant number of leases relating to the operation of 34 Medical Groups as of the Petition Date. The debtors submit that the business decision whether to assume, assign, or reject the remaining leases can properly be made only after negotiations with the respective Medical Groups are concluded and the final shape of the plan is clear. The plan process is well underway and is expected to be concluded in the near future, and therefor the debtors request that this extension run through confirmation of a plan or plans. CENTRAL VERMONT: Sells Interest In The Home Service Store --------------------------------------------------------- Central Vermont Public Service Corporation and partner DJJ Holdings, Inc. have sold a 50 percent interest in The Home Service Store, Inc., formerly Home Service Solutions, L.L.C., to Jupiter Partners II L.P., a capital investment company in New York. Prior to Jupiter's investment, The Home Service Store had been a partially owned subsidiary of SmartEnergy Services, Inc. a wholly owned subsidiary of Central Vermont Public Service. HSS, which does business under the name The Home Service Store, is a rapidly growing national home maintenance, repair, and improvement concierge service. Central Vermont Public Service announced the creation of HSS in May, 1999 and began test marketing the service in four metropolitan areas through a marketing agreement with SAM'S Club, a subsidiary of Wal-Mart Stores, Inc. Due to strong consumer interest, a national roll out of HSS began in the fall of 1999. HSS is expected to be in 60 metropolitan areas by late spring, 200 metropolitan areas by late December. In December 1999, HSS entered into a second marketing relationship with TruServe Corporation, a hardware and home center retailer with 8,000 retail stores. Under the sale agreement, Jupiter's equity investment will be used to complete HSS's national roll out. The sale gives Jupiter a 50 percent interest in HSS, leaving Central Vermont Public Service with 39 percent and DJJ with 11 percent. Under a management incentive plan created as part of the sale, Central Vermont Public Service's share could be diluted to 28 percent through stock option offerings over the next four years. Douglas Sinclair, HSS's president, who has run HSS since its creation, has also been named Chief Executive Officer. COHO ENERGY: Announces Plan Confirmation ---------------------------------------- Coho Energy Inc., Dallas, announced yesterday that on Monday the U.S. Bankruptcy Court for the Northern District of Texas confirmed, with several modifications, Coho's reorganization plan, according to a newswire report. The modifications to the plan include the retention by the common shareholders as of Feb. 7 of 20 percent of any proceeds from Coho's lawsuit against Hicks, Muse, as well as 40 percent of any net sale proceeds from the company's Tunisia permit. Effectiveness of the plan is expected to be March 31. (ABI 22-Mar-00) COMPLETE MANAGEMENT: To Sell Substantially All Operating Assets --------------------------------------------------------------- Complete Management, Inc., a chapter 11 debtor in possession, has filed an application to sell substantially all of the operating assets of its wholly-owned subsidiary, Medical Management, Inc., used in MMI's diagnostic imaging facility at 254 West 31st Street, New York, New York, and assign certain leases held in CMI's name. MMI provides services for the financing, installation, administration and technical management of magnetic resonance imaging facilities. The prospective buyer of assets and assignee of leases is a Maryland corporation known as NYD, Inc. ("Buyer"). The purchase price is $1.4 million in cash, plus Buyer's assumption of certain liabilities of CMI and MMI. A hearing to consider CMI's application, and to consider higher and better offers, will be held on April 11, 2000 at 9:30 a.m., before the Honorable Jeffry H. Gallet, United States Bankruptcy Judge, at the Old Custom House, Courtroom 523, One Bowling Green, New York, New York. Copies of CMI's application, together with the asset purchase agreement among CMI, MMI and Buyer, may be obtained electronically by accessing the Bankruptcy Court's website at http://www.nysb.uscourts.gov. Bidders interested in making higher and better bids for MMI's assets should contact CMI's financial advisors, Loeb Partners Corporation, 61 Broadway, New York, New York 10006, 212-483-7086, attention: Harvey Tepner or Bruce Kaufman, CMI's bankruptcy counsel, Salomon Green & Ostrow, P.C., 919 Third Avenue, New York, New York 10022, 212-319-8500, attention: Alec P. Ostrow, Esq., or the Chambers of the Honorable Jeffry H. Gallet, United States Bankruptcy Court, One Bowling Green, New York, New York 10004, 212-668-2301, in advance of the April 11 hearing. FLAG TELECOM: Barclays Bank Beneficial Owner of 11.2% of Stock -------------------------------------------------------------- Barclays Bank PLC beneficially owns 15,000,000 shares of the common stock of Flag Telecom Holdings Ltd. with shared voting and dispositive powers. The holding represents 11.2% of the outstanding common stock of the company. Barclays Bank PLC, a foreign bank, is the pledgee of these shares under a security agreement relating to the obligations of Dallah Albaraka Holding Company E.C. The pledgor and owner of the shares is Rathburn Limited. Under the security agreement, unless Barclays Bank PLC gives an enforcement notice to Rathburn Limited, Rathburn Limited may exercise, or direct, any voting or other rights attached to any of the shares, provided that those voting rights are not excercised in any manner which, in the reasonable opinion of Barclays Bank PLC, could prejudice the security intended to be conferred by the security agreement or is in breach of the security agreement; or to permit any variation of the rights attaching to or conferred by any shares. The disposition of the shares during the term of the pledge is restricted under the security agreement and by virtue of the pledge. GARDEN BOTANIKA: Comparable Store Sales Decrease 3% For February ----------------------------------------------------------------- The Seattle Post-Intelligencer reports on March 21, 2000, that most of Garden Botanika's top executives are gone and there are no immediate plans to fill the positions. Several executives of the firm have gone to Zydeco.com, a new Seattle-based Internet retailer that is planning to start its Web site this summer Garden Botanika has closed nearly a third of its locations and laid off 1,200 employees. Earlier this month, the U.S. bankruptcy court approved Garden Botanika's request to extend the deadline for filing its reorganization plan for another year. Garden Botanika reported that comparable store sales for February 2000 decreased 3 percent from sales in February 1999 for the 109 remaining stores. Total sales declined to $3.2 million from $5.5 million in the prior year, primarily because of a decrease in the number of stores from 249 to 110. GENESIS AND MULTICARE: Moody's Downgrades Ratings ------------------------------------------------- Moody's Investors Service downgraded the ratings assigned to Genesis Health Ventures, Inc ("Genesis") and The Multicare Companies, Inc. ("Multicare"). The ratings affected are as follows: Genesis: � $1.25 billion senior secured credit facilities to Caa2 from B2, � $120 million 9.75% senior subordinated notes due 2005 to C from Caa1 � $125 million 9.25% senior subordinated notes due 2006 to C from Caa1, � $125 million 9.875% senior subordinated notes due 2006 to C from Caa1, � senior implied rating to Caa2 from B2, and � senior unsecured issuer rating to Caa3 from B3 Multicare: � $525 million senior secured credit facilities to Caa3 from B3, and � $250 million 9.75% senior subordinated notes due 2007 to C from Caa2 The rating outlook for both companies is negative. Genesis and Multicare are providers of long term care services to the elderly. Multicare was acquired by Genesis ElderCare Corp. ("Eldercare"), a joint-venture comprised of Genesis, The Cypress Group L.L.C, TPG Partners II, L.P. and Nazem, Inc., in October 1997. Genesis holds a 43.6% equity interest in Eldercare and manages the operations of Multicare. The rating action follows the companies' announcements that both Genesis and Multicare are pursuing discussions with their creditors regarding the revision of the their capital structures. Genesis also disclosed that it did not make the interest payment due March 20, 2000 on its senior credit facilities, and both companies stated that they did not expect to make scheduled payments on their senior or subordinated debt obligations during the restructuring discussions. The companies have retained separate outside advisors to facilitate the restructuring process. Genesis and Multicare have suffered a deterioration in operating results and financial condition stemming from the impact of Medicare PPS combined with high leverage. Despite cost cutting efforts, operating margins remain depressed, and planned asset divestitures have not materialized as anticipated. Further, restructuring efforts could be adversely impacted by the currently difficult state of the long-term care sector, with several large providers already filing for bankruptcy in recent months. Genesis and Multicare, both headquartered in Kennett Square, PA, are providers of long term care services to the elderly. HARNISCHFEGER: Second Motion For Exclusivity Extension ------------------------------------------------------- The Debtors ask Judge Walsh to extend their exclusive period during which to file a reorganization plan to June 9, 2000, and extend their exclusive period for soliciting votes on the Plan to August 8, 2000. The Debtors assert again that they need these extensions "to avoid premature formulation of a chapter 11 plan" and "to ensure that the plan that is formulated takes into account the interests of all of the Debtors, their employees, their creditors and their estates." They again remind the Court that they run a large, complex business. They also tell Judge Walsh that they have yet to "evaluate the universe of claims against them and consider their strategic restructuring alternatives" because the bar date just passed on February 29, 2000. The Debtors explain that they "have recently begun preliminary preparation of a five-year business plan that will be the underpinning for the Debtors' plan of reorganization." The Debtors believe that they have made "substantial progress" in "meeting liquidity needs, closing unprofitable portions of their business and exiting from unprofitable markets, restoring customer confidence and improving employee morale." In this regard, they emphasize the Beloit assets auction, which they claim is now occupying the full attention of Beloit's senior management, the Creditors' Committee and its professionals. They believe that the Beloit sale process will be completed by late February or early March. The Debtors do not believe that their proposed extension will harm anyone. They contend that, given the size and complexity of this case, "neither the Debtors' creditors nor any other party in interest would be in a position to propose a plan of reorganization before June 9, 2000." In the circumstances, the Debtors tell Judge Walsh that termination of the Exclusive Periods would likely cause a deterioration in their business and the value of its assets. In addition, they say an unrealistically brief extension of the Exclusive Periods would signal a loss of confidence, undermine the gains the Debtors have made since the commencement of the Chapter 11 cases, and harm both the Debtors and their creditors. Absent objection by any core party in interest, Judge Walsh granted the Debtors' request in all respects. (Harnischfeger Bankruptcy News Issue 21; Bankruptcy Creditors' Service, Inc.) HOME HEALTH: Seeks Extension of Exclusivity ------------------------------------------- The debtors, Home Health Corporation of America, Inc., et al. seek a court order further extending the exclusive period during which the debtors may file and solicit acceptances of a plan or plans of reorganization through March 31, 2000 and May 30, 2000 respectively. A hearing on the motion will be held before the Honorable Mary F. Walrath, US Bankruptcy Court, District of Delaware, on March 29, 2000 at 11:30 AM. In light of the size and complexity of the debtors' 35 cases and the progress that they have already made in laying a foundation for the formulation of a consensual plan, the debtors believe that cause exists for a grant of the requested extensions. The debtors have presented a comprehensive business plan to their lender group and continue to work together with the lenders to formulate a plan. More time is needed to resolve certain issues with other parties which the debtor believes may be necessary to create a consensual reorganized capital and corporate structure. ICO GLOBAL: Court Approves ICO's Disclosure Statement ----------------------------------------------------- ICO Global Communications, London, announced that the U.S. Bankruptcy Court for the District of Delaware yesterday approved the company's disclosure statement and scheduled a confirmation hearing for May 3, according to a newswire report. If approval of the plans is obtained at that time, and if related approvals are obtained from the Bermuda and Cayman Islands courts, the global mobile communications company will emerge from chapter 11 in mid- May. ICO Global filed chapter 11 late last August. (ABI 22-Mar- 00) ICON ENERGY: Lexxor Energy Icon Energy Announce Approval of Plan ---------------------------------------------------------------- Lexxor Energy Inc. and Icon Energy Limted jointly announce that on March 20, 2000, the shareholders and unsecured creditors of Icon voted in favour of the Plan of Arrangement between Lexxor and Icon. On March 21, 2000 the Alberta Court of Queen's Bench gave final approval for the Arrangement. As a result of the Arrangement, Lexxor will issue approximately 9.5 million Lexxor Class A Shares and 3.75 million warrants (exercise price $0.30 per share) exercisable into 3.75 million Lexxor Class A Shares to the Icon shareholders and unsecured creditors. On or before March 31, 2000, Lexxor will sell by way of private placement a further 1.5 million Class A Shares for net proceeds of $300,000. This Arrangement provides both Lexxor and Icon shareholders, as well as Icon's unsecured creditors, with the opportunity to participate in the growth potential associated with a larger economic entity that has a number of exploitation, development and exploration opportunities. The continuing entity will operate as Lexxor Energy Inc. Icon will add approximately 90 Boe/d of production and 588 Mboe of risked reserves (as evaluated by independent engineers at October 1, 1999) to Lexxor's current production of 200 Boe/d and 951 MBoe of risked reserves (as evaluated by independent engineers at January 1, 2000). The combined property base of the two companies will result in additional financial resources capable of expanded operations, with an exit production target of 500 Boe/d. With the support of Lexxor's lender, who has provided a line of credit covering sufficient bank financing allowing them to complete this transaction, the management of Lexxor believe that 2000 will be an exciting and rewarding year for management and shareholders. Lexxor's capital expenditure budget for 2000, including property acquisitions, is estimated to be $2.5 million. The program will be funded by cash flow, which is expected to be approximately $2.0 million, as well as credit facilities. These estimates assume average daily production of between 400 and 500 Boe, an average oil and NGLs price of Cdn. $25.00 per Bbl, and natural gas averaging $3.00 per Mcf. The management of Lexxor intend to maintain its production mix of approximately 60% natural gas and 40% oil and NGLs during 2000 by continuing to generate low risk drilling prospects - primarily on existing undeveloped land base, and with the acquisition of assets that have a strategic fit with existing operations. Management intends to continue to maintain effective cost controls and a manageable level of debt. INTEGRATED STEEL: Sold to Heidtman Steel Products ------------------------------------------------- Detroit-based minority auto supplier Thomas Madison Inc. on Friday sold its Integrated Steel Inc. unit out of Chapter 11 bankruptcy to Heidtman Steel Products Inc. of Toledo for $1 million. Heidtman plans to spin off the steel-cutting company with Thomas Madison CEO Geralda Dodd having part ownership, said Heidtman CFO Mark Ridenour. Dodd founded the company in 1990. Ridenour didn't say how much of the spin-off company Dodd will own, but another minority partner will be brought in to give the company 51 percent minority ownership, said Arnold Schafer, Thomas Madison's bankruptcy attorney. Heidtman wouldn't have been interested in buying Integrated Steel, which has $25 million in annual revenue and 65 employees, unless it could keep its minority supplier designation, Ridenour said. Minority certification is desirable among suppliers because domestic automakers set a goal of buying 5 percent of their materials from minority-owned companies by 2002. Ridenour said Heidtman doesn't yet know whether all 65 Integrated Steel employees will keep their jobs. In addition to the $1 million purchase price, Heidtman Steel is forgiving a $3.6 million debt and paying the unsecured creditors committee $50,000 to help settle claims. Integrated Steel, along with two other Thomas Madison auto suppliers, filed voluntary Chapter 11 bankruptcy petitions Feb. 2. The other two companies, Gwen Inc. and HSA II Inc., likely will receive new financing and reorganize, said Schafer, a partner in the Bloomfield Hills law firm of Schafer and Weiner P.C. U.S. Bankruptcy Judge Steven Rhodes approved the sale over an objection from unsecured creditors of Gwen Inc. Matthew Wilkins, an attorney with Butzel Long in Detroit who represents the unsecured creditors, objected to the timeline. Integrated Steel requested a sale March 10. It was advertised over the weekend, and a hearing was held March 16. It was an insider sale. Heidtman President and CEO John Bates owned 49 percent of Integrated Steel. Bates also owns Integrated Steel's 143,000-square-foot building in Detroit. Integrated Steel, which lost Ford Motor Co. as a customer and projected a $1.2 million loss for 2000, had to move fast because its financing ran out March 17. The other two companies have adequate post-petition financing. KEY PLASTICS: Suppliers and Creditors Threaten Lawsuits ------------------------------------------------------- As reported by Crain's Detroit Business on March 20, 2000, suppliers and creditors of Key Plastics L.L.C are threatening lawsuits to get their money back. The suppliers, worried about their own stability if they aren't paid by Key, are withholding parts and trying to take back parts they made for Key but were never paid for. Key missed a $6.8 million payment last week on $125 million in bond debt. The company has a 30-day grace period to pay. On March 13, Key CEO David Benoit sent a letter to Key's 4,100- plus employees acknowledging a liquidity problem and saying the company had a March 17 deadline to secure more funding. Key reported 1999 sales of $550.8 million and has about 1,100 workers in metro Detroit. It had $428 million in debt as of last September. As part of its restructuring plan, which could include the sale of the company, Key has hired the New York investment-banking firm of Peter J. Solomon Co. According to the report, the companies owed money by Key include GE Plastics and BASF. GE and BASF are both owed nearly $2 million, according to members of a recently formed creditors' committee. MARINER: Final Approval Of $100M DIP Financing ---------------------------------------------- Mariner Post-Acute Network (MPAN) on Monday obtained final approval of its $100 million debtor-in-possession financing facility with The Chase Manhattan Bank, as agent, and 13 other lenders, as reported by Stutman, Treister & Glatt, MPAN's reorganization counsel. Approval of the facility follows the Delaware Bankruptcy Court's final approval on February 16, 2000 of a $50 million DIP financing facility in the related case of Mariner Health Group, Inc. The Court also approved MPAN's use of cash collateral of its prepetition senior secured lenders and various other secured creditors. OXFORD HEALTH: Annual Meeting To Be Held On May 11, 2000 -------------------------------------------------------- Stockholders are being advised of the annual meeting of Oxford Health Plans, Inc. to be held on May 11, 2000 at 10:00 a.m., local time, at the Trumbull Marriott, 180 Hawley Lane, Trumbull, Connecticut 06611. This year, three directors are nominated for election to the Board. At the meeting stockholders will be asked to: (i) elect three Class III Directors to serve until the 2003 Annual Meeting; (ii) amend the company's Second Amended and Restated Certificate of Incorporation, as amended, to confer the power to vote upon holders of the company's Series D Junior Subordinated Debentures due May 13, 2008 and Series E Junior Subordinated Debentures due May 13, 2008 and to amend the Certificates of Designations for each of the Series D Preferred Stock and the Series E Preferred Stock to clarify the voting rights where one series of preferred stock has been exchanged for Debentures and the other series of preferred stock remains outstanding; (iii) amend the Oxford Health Plans, Inc. 1991 Stock Option Plan, as amended, to increase the number of shares of common stock issuable from 25,580,000 shares to 30,380,000 shares; (iv) amend the Oxford Health Plans, Inc. 1991 Stock Option Plan, as amended, to extend the term from ten years to fifteen years; and (v) act on a shareholder proposal to request the company establish a nominating committee comprised solely of independent directors. The company asks that stockholders note that space limitations make it necessary to limit attendance to stockholders and one guest. Admission to the meeting will be on a first-come, first- served basis. Registration and seating will begin at 9:00 a.m. and stockholders may be asked to present valid picture identification. Stockholders holding stock in street name will need to bring a copy of a brokerage statement reflecting stock ownership as of the record date. PHYSICIAN ASSET: Case Summary and Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Physician Asset Corporation 2533 N Carson Street Carson City, NV 89706 Petition Date: March 16, 2000 Chapter 11 Court: District of Nevada Bankruptcy Case No.: 00-30693 Judge: Gregg W. Zive Debtor's Counsel: John A. White, Jr. White Law Chartered 335 W. Street Reno, NV 89509 (775) 322-8000 Total Assets: $ 1 million over Total Debts: $ 1 million over Largest Unsecured Creditors David Perry 9615 Brighton Way #42 Beverly Hills, CA 90210 $ 347,165 Thyaser Dover Elevator $ 9,001 Fresno County $ 6,639 All Britton Plumbing $ 4,540 Patto Air Conditioning $ 3,068 PIC N PAY: Plans To Close Stores; Outlook Negative -------------------------------------------------- According to a report in Post and Courier (Charleston, S.C.) on March 22, 2000, Pic 'n Pay Stores, which filed for bankruptcy protection this month, plans to close 453 retail locations in 17 states, including six in the Charleston area. It is the second time in the past four years that the North Carolina-based chain has declared bankruptcy. Pic'n Pay sought protection from creditors March 8 in Delaware under Chapter 11 of the bankruptcy code after defaulting on a loan from a New York financial backer. A turnaround management firm brought in to run the business asked the judge in the case last week for permission to liquidate Pic 'n Pay's assets to pay off its debts. The company owes at least $ 50 million to more than 1,000 creditors, according to court documents. PREMIER LASER: Nasdaq Halts Trading of Shares --------------------------------------------- The Nasdaq stock exchange halted trading Monday in shares of Irvine-based Premier Laser Systems Inc., requesting additional information after the company's announcement last week that it filed for Chapter 11 bankruptcy protection. The money-losing maker of dental and surgical lasers said earlier this month that it intended to file for bankruptcy due to costly litigation and a lack of cash. PRIMARY HEALTH: Seeks To Extend Exclusivity ------------------------------------------- The debtors, Primary Health Systems Inc. and its debtor affiliates seek a court order further extending the exclusive periods during which the debtors may file a plan of reorganization and solicit acceptances thereof. A hearing to consider the motion will be held on March 29, 2000 at 9:30 AM. Since obtaining the last extension of the exclusive periods, the debtors have filed a motion with this court seeking the approval for a private sale of assets for the aggregate cash price of $62.65 million and have begun to discuss with their bank lenders and formulate the terms of a Chapter 11 liquidating plan. It is expected that as part of such a plan the debtors' remaining health care facility Deaconess Hospital will be disposed of as an operating hospital. The debtors have not yet had an opportunity to complete the negotiations of their sale and to fully develop the terms of a plan with their bank lenders, much less begin tri- partite negotiations with the banks and the Creditors' Committee. The debtors request approximately 90-day extensions of each of the Exclusive Periods through and including June 30, 2000 and August 31, 2000, respectively. SAFETY KLEEN: Retains Jay Alix; Interim CFO Appointment ------------------------------------------------------- Safety-Kleen Corp. (NYSE: SK) announced the appointment of John G. (Jack) McGregor as interim Chief Financial Officer (CFO), and the retention of Jay Alix & Associates of Southfield, Michigan. McGregor is a principal with Jay Alix & Associates, a nationally recognized firm specializing in corporate turnarounds and financial restructuring. "In appointing Jack as CFO, the Safety-Kleen Board of Directors has selected an experienced financial manager whose background includes working with companies having operating and financial difficulties similar to those facing Safety-Kleen," said David E. Thomas, Jr., Chairman of the Safety-Kleen Board's Executive Committee. "Jack brings a wealth of corporate and financial experience to our management team, and his talent in turning companies around will help ensure that we have the specific skills necessary to meet the challenges ahead. We are working to get this Company back on the right financial footing, and Jack McGregor has the track record that we need to help make that happen. In addition, Jay Alix & Associates will provide immediate access to other principals experienced in crisis information systems and hazardous waste operations management." "Jack McGregor will focus his efforts on stabilizing our financial situation in the short term and on developing a comprehensive financial plan," said Grover Wrenn, Vice Chairman of Safety-Kleen. "McGregor has more than 20 years' experience in turning around troubled companies," Wrenn said, "and he has stepped in to fill key management roles on an interim basis for such major companies as Memorex Telex and FoxMeyer Drug Co. Additionally, he served as interim CEO and Chief Restructuring Officer for Philip Services Corp., a $2.5 billion waste management and metals processing company. McGregor was formerly a partner with the accounting firm of Ernst & Young (Canada)." "Safety-Kleen certainly faces significant challenges in operations, finance and information systems," McGregor said, "but with the management experience already in place, a dedicated workforce of approximately 10,000 employees in the U.S. and Canada, and the assistance of our lenders, I believe we can develop and execute a turnaround plan. I am proud to be part of the management team." Safety-Kleen also announced that the Company had so far been provided with availability of approximately $10.0 million under the recently announced $20.0 million interim credit facility with a group of its lenders. Mr. Thomas indicated that, "we continue to work with our lenders to gain additional necessary availability under this or other credit facilities. Our lenders have requested certain detailed financial information and have inquired about the availability of collateral to support additional borrowings. We are working diligently to provide them with all necessary information. Additional meetings with lenders are expected as early as next week." SOUTHERN PACIFIC: S&P Lowers Ratings ------------------------------------ Standard & Poor's lowered its rating on Southern Pacific Secured Assets Corp. (SPSAC) series 1997-2, class B-1F to triple-'C' from triple-'B' (see list). Ratings on all other SPSAC certificates were affirmed (see list). The class B-1F rating adjustment addresses a greatly increased vulnerability to default within two to three months, due to the almost complete erosion of overcollateralization balance by losses. SPSAC series 1997-2 classes with affirmed ratings benefit from current and projected credit support percentages that exceed their respective initial loss coverage requirements. All other affirmed SPSAC classes are covered by financial guarantee insurance from MBIA Insurance Corp. (triple-'A' FSR). Monthly losses on the collateral backing SPSAC 1997-2 are first absorbed by excess interest. Should losses exceed the monthly excess interest, the difference is then directed to reduce over- collateralization. Classes senior to the class B-1A and class B- 1F certificates are further protected from losses by the subordination of junior classes. Classes B-1A and B-1F are the most junior classes within their respective groups of certificates. The issue is collateralized by two separate loan groups, group one (adjustable rate) and group two (fixed rate). Class B-1F is backed by a pool of fixed-rate subprime residential home equity loans. Approximately 44% of the initial pool balance was secured by mortgage loans to below A- quality borrowers and about 70% by cash-out refinancings. The pool has realized losses at a faster pace than initially anticipated, which has severely stressed the loss protection supporting group two certificates. The effect of the losses on class B-1F is especially pronounced because it is supported solely by excess interest cash flow and over-collateralization. Approximately 12.72% of the group two collateral balance is presently in foreclosure or REO, and US$257,333 in losses are expected to be reported with the March 25, 2000 distribution. The mortgage collateral backing SPSAC certificates is being serviced by either Advanta Mortgage Corp. USA or OCWEN Federal Bank FSB, both of which are on Standard & Poor's Approved Servicer List. The seller, Southern Pacific Funding Corp., is now defunct, Standard & Poor's said. USN COMMUNICATIONS: Putnam Investments Reports Holdings ------------------------------------------------------- While Marsh & McLennan Companies, Inc. no longer hold shares of common stock in USN Communications Inc., Putnam Investments, Inc. beneficially owns 4,000 such shares with shared voting power, and 212,040 shares with shared dispositive power. This represents 7.1% of the outstanding common stock of USN Communications Inc. Putnam Investment Management, Inc. shares dispositive power over 200,040 of the shares, representing 6.7% of the outstanding common stock of the company. The Putnam Advisory Company, Inc. shares voting power over 4,000 shares, and dispositive power over 12,000 shares, which amount represents 0.4% of USN Communication's outstanding common stock. WILLIS LEASE FINANCE: Benson Associates Reports Holdings -------------------------------------------------------- Benson Associates, LLC holds 694,759 shares of the common stock of Willis Lease Finance Corporation, exercising sole voting and dispositive power. The shares constitute 9.39% of Willis' outstanding common stock. Benson Associates, LLC, an investment adviser, disclaims beneficial ownership of the securities held by it in a fiduciary capacity. WORLDWIDE DIRECT: Seeks To Resolve Disputes With Fletcher Int'l --------------------------------------------------------------- The Official Committee of Unsecured Creditors of the debtors, Worldwide Direct, Inc., et al. seek court authority for the Committee, the debtors, the Indenture Trustees, and SmarTalk to enter into an agreement with Fletcher International Ltd. Resolving all disputes and allowing certain claims of Fletcher. Fletcher filed a proof of claim asserting claims in excess of $39 million and further asserting liens and security interests to secure all or a portion of those claims. The major terms of the agreement provide that on the Effective Date, the debtors shall pay to Fletcher the amount of $1.5 million in cash or immediately available funds from the "Fletcher Reserve" as defined in the pending plan, in full settlement of a portion of the Fletcher claims asserted as secured claims. On the Effective Date, Fletcher shall also be granted an allowed, non-subordinated, non-priority general unsecured claim against SmarTalk in the amount of $7 million. Fletcher shall transfer and assign the Allowed Unsecured Claim to CoMac Partners in exchange for $2.1 million in cash. Fletcher shall also withdraw its reorganization plan. BOND PRICING: For Week of March 20, 2000 ======================================== DLS Capital Partners, Inc. bond pricing for week of March 20,2000 To: TCR@bankrupt.com X-Mailer: AOL 3.0 for Windows 95 sub 64 Following are indicated prices for selected issues: Acme Metal 10 7/8 '07 13 - 15(f) Ameriserve 8 7/8 '06 12 - 14 (f) Asia Pulp & Paper 11 3/4 '05 85 - 87 E & S Holdings 10 3/8 '06 38 - 41(f) Fruit of the Loom 8 7/8 '06 4 - 6(f) Genesis Health 9 3/4 '05 9 - 11 Geneva Steel 11 1/8 '01 21 - 22(f) Globalstar 11 1/4 '04 40 - 42 Hechinger 9.45 '12 3 - 5(f) Integrated Health 9 1/4 '08 2 - 4(f) Iridium 14 '05 1 - 2(f) Loewen 7.20 '03 44 - 46(f) Paging Network 10 1/8 '07 72 - 74(f) Pathmark 11 5/8 '02 33 - 36 Pillowtex 10 '06 32 - 34 Revlon 8 5/8 '08 42 - 44 Rite Aid 6.70 '01 61 - 63 Servive Merchandise 9 '04 12 - 13(f) Sunbeam 0 '18 14 - 15 TWA 11 3/8 '06 33 - 34 Vencor 9 7/8 '08 21 - 23(f) ********* 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. 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