/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/000328.MBX T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, March 28, 2000, Vol. 4, No. 61 Headlines AGRIBIOTECH: Announces $250,000 Offer for Shares AMBASE CORP: Reports 1999 Net Loss of $4.5 Million BIGSBY & KRUTHERS: Case Summary and 20 Largest Creditors BREED TECHNOLOGIES: Chairman Part of a Group Seeking Acquisition BUSH LEASING: Opposes Motion To Appoint Chapter 11 Trustee CANADIAN AIRLILNES: Plan Contemplates Air Canada as Parent CANADIAN AIRLINES: Secured Noteholders Reject Air Canada Proposal CLARIDGE HOTEL: Announces 1999 Financial Results CPS: Court Approves Manatron's Bid For Selected Assets EAGLE FOOD: Taps Schottenstein Bernstein Capital Group EXCELSIOR-HENDERSON: Announces Agreement On Proposed Plan FRONTIER INSURANCE: Downgrade of Preferred Securities To "Caa" FRONTIER INSURANCE: S&P Lowers Preferred Stocks HARNISCHFEGER: Seeks Court authority To Sell Oregon Property MARINER: Committee Taps Chanin Capital Partners MERIT ENERGY: Appointment of Receiver/Manager Adjourned METROTRANS: Order With Regard To Sale of Bus Pro Facility MIDCON OFFSHORE: Final Accounting; Discharge of Trustee OMNA MEDICAL: Case Summary and 21 Largest Consolidated Creditors PENN TRAFFIC: Announces 25.4% EBITDA Increase in 4th Quarter PENNCORP FINANCIAL: Board Selects Recapitalization Transaction PROTECTION ONE: Moody's Investors Service Downgrades Notes PROTEVA: Purchasers Claim They Were Victims of Fraud RAYTECH CORP: Announces 1999 Results RDM SPORTS: Hearing on Sale of Olney Property SOUTHERN MINERAL: Applies for Order To Retain Petrie Parkman SOUTHERN PACIFIC: Fitch IBCA Lowers Ratings SUPERIOR NATIONAL: Units Rated 'R' SWIFT CREEK: Case Summary and 17 Largest Unsecured Creditors T&W FINANCIAL: Winds Down Operations TELEGEN: Court Approves Up to $29 Million in Additional Offerings UNITED COMPANIES: Moody's Downgrades Five Subordinate Classes VISTA GOLD: 1999 Results and New Ore Reserves at Hycroft WASTE MANAGEMENT: Announces Financial Results Meetings, Conferences and Seminars ********* AGRIBIOTECH: Announces $250,000 Offer for Shares ------------------------------------------------ AgriBioTech Inc. announced that its outstanding shares of common stock are the subject of a "mini-tender offer" by New World Liquidity Fund. The offer, directed at the Company's shareholders, is for the purchase of up to 1 million shares of the outstanding common stock of ABT at $.25 per share. Offers of this type are sometimes referred to as "mini-tenders" because the offeror seeks to purchase less than 5% of the outstanding stock of the target company. "We express no opinion regarding the New World offer, and we are remaining neutral with respect to the offer," said William A. Brandt, who is the court-appointed responsible person for the Company. In addition, Development Specialists Inc. (of which Brandt is a principal) serves as the court-approved reorganization consultant to ABT. The Company filed for Chapter 11 bankruptcy protection on Jan. 25, 2000. AgriBioTech Inc. is a vertically integrated, full- service seed company specializing in the forage and turfgrass sector, complete with research and development of proprietary seed varieties, seed processing plants, and a national and international distribution and sales network. AMBASE CORP: Reports 1999 Net Loss of $4.5 Million -------------------------------------------------- AmBase Corporation announced a net loss of $1,333,000 or $0.03 per share for the fourth quarter ended December 31, 1999. For the full year ended December 31, 1999, AmBase reported a net loss of $4,515,000 or $0.10 per share. For the fourth quarter ended December 31, 1998, the Company recorded a net loss of $1,525,000 or $0.03 per share. For the full year ended December 31, 1998, AmBase reported net income of $181,000. The 1998 full year results include other non-recurring income of $2,548,000, principally attributable to the receipt of $2,500,000 in connection with the Home Holdings Bankruptcy Plan. Excluding the non-recurring other income, the Company would have reported a net loss of $2,367,000 for the 1999 full year period. At December 31, 1999, the Company's assets consisted principally of $46 million of cash and cash equivalents and investments in U.S. Treasury Bills with maturities of less than one year. At December 31, 1999, the Company's liabilities and reserves of $77 million, including reserves for certain contingent liabilities, exceeded total recorded assets of $48 million by approximately $29 million. The Company has significant alleged tax liabilities and is a defendant in number of lawsuits and proceedings, the ultimate outcome of which could have a material impact on its financial condition and results of operations. A more complete discussion of the Company's affairs is included in AmBase Corporation's Annual Report on Form 10-K for the year ending December 31, 1999, to be filed with the Securities and Exchange Commission. The Company also announced that it has fixed the close of business on Friday, April 7, 2000 as the record date for the upcoming 2000 Annual Meeting of Stockholders of AmBase Corporation, which will be held at 9:0O a.m. Eastern Daylight Time, on Friday, May 19, 2000, at the Greenwich Library, Cole Auditorium, 101 West Putnam Avenue, Greenwich, CT. BIGSBY & KRUTHERS: Case Summary and 20 Largest Creditors -------------------------------------------------------- Debtor: Bigsby and Kruthers, Inc. 1750 North Clark Chicago, IL 60614 Petition Date: February 2, 2000 Chapter 11 Court: Northern District of Illinois Bankruptcy Case No.: 00-03047 Judge: Eugene R. Wedoff Debtor's Counsel: Daniel A. Zazove Field & Golan 70 West Madison Street Suite 1500 Chicago, Illinois 60602 (312) 2632300 Total Assets: $ 4,077,105 Total Debts: $ 15,564,249 20 Largest Unsecured Creditors Andrew and Suzanne Co., Inc. Merchandise $ 58,130 Billboards Professional Services $ 59,934 CIT Group 1211 Avenue of Americas New York, NY 10036 Mike DeLorme (212) 382-6861 Merchandise $ 512,525 Cantonl ITC USA Merchandise $ 123,370 Delotte & Touche Prof Svcs $ 70,000 GMAC 1290 Avenues of America New York, NY 10104 Mitch Umanoff (212) 408-7333 Merchandise $ 747,441 Hugo Boss 645 Fifth Avenue New York, NY 10022 Clay Gurnett (212) 940-0668 Merchandise $ 399,936 Jacqueline Hayes Profesional & Associates Services $ 55,000 Johnstons of Elgin Merchandise $ 60,785 Maximara Merchandise $ 119,812 Metropolitan Life Insurance Co. Rents $ 75,000 Mid-America Asset Mgmt Corp. Two Mid-America Plaza Suite 330 Oakbrook Terrace IL 60181 Robin Nack (203) 5326014 Rents $ 296,994 Rene Lezard Fashion Merchandise $ 52,532 Schultz & Chez Prof. Svcs $ 67,486 Sharon Kahn - Professional Stone Real Estate Services $ 48,459 Tuscany & Company Merchandise $ 76,665 Vestimenta Merchandise $ 94,677 Water Tower Joint Venture PO Box 93892 Chicago, IL 60673 Bob Powell (312) 915-3810 Rents $ 348,592 Westcoast Estates 2171 Northbrook Court Northbrook, IL 60062 Rents $ 75,962 Zegna Merchandise $ 97,226 BREED TECHNOLOGIES: Chairman Part of a Group Seeking Acquisition ---------------------------------------------------------------- BREED Technologies, Inc. (OTCBB:BDTTQ) announced that its Board of Directors has received a proposal from a group of investors, which includes BREED's Chairman of the Board and Chief Executive Officer, Johnnie Cordell Breed, to purchase substantially all of the assets of the Company. No details of the proposal have been released. BREED is continuing to pursue several options to emerge from its chapter 11 bankruptcy case, including, the sale of the business to one or more third parties or the reorganization of the business. BREED Technologies, one of the world's most fully integrated suppliers of complete automotive occupant safety systems, has approximately 16,000 employees in 42 facilities around the world. BUSH LEASING: Opposes Motion To Appoint Chapter 11 Trustee ----------------------------------------------------------------- The debtor, Bush Leasing, Inc. filed a Memorandum in opposition to General Motors Acceptance Corporation's motion to appoint a Chapter 11 Trustee. The debtor states that it has made steady progress in setting its financial and information records straight, has generated positive cash flow from its operations, has paid its secured lenders almost $12 million in adequate protection payments, and has positioned itself for a competitive sale of its long-term lease portfolio. The debtor states that GMAC's motion is, at best, premature. The active involvement in this case of the secured lenders, including GMAC is beyond dispute. The debtor has received a letter of intent as an initial bid on the portfolio. The Debtor states that GMAC's allegations of fraud are exaggerated. The debtor states that it has made all payments due and owing to theonly lending institution where it is acting as agent on behalf of a lender. In all other circumstances, the debtor remains a lessee with respect to written equipment lease agreements which are simply in default. There has been no fraud or conversion with respect to any of these transactions. The debtor states, "Even if there is evidence of mismanagement, it does not establish fraud or any other grounds for appointment of a trustee." BMAC also points to the debtor's failure to pay over to the applicable lender the proceeds from the sale of vehicles to lessees and obtain lien releases and certificates of title from the lenders. The debtor states that it has worked diligently to resolve this problem, without much cooperation from the lenders. Finally, the debtors claim that the incidences of mismanagement are not gross, and that GMAC has failed to articulate sustainable grounds for the appointment of a trustee. CANADIAN AIRLILNES: Plan Contemplates Air Canada as Parent ---------------------------------------------------------- Canadian Airlines Corporation announces that the United States Bankruptcy Court for the District of Hawaii has granted an Order under section 304 of the U.S. Bankruptcy Code in respect of Canadian Airlines International Ltd.. This Order follows an Order granted earlier today by the Court of Queen's Bench of Alberta under the Companies' Creditors Arrangement Act ("CCAA") in respect of the Corporation and Canadian Airlines. Section 304 of the U.S. Bankruptcy Code provides a process whereby the United States court will give effect to the Alberta Court's jurisdiction under the CCAA with the protection of the United States Court. These filings are part of the process of restructuring the debt and other obligations of Canadian Airlines. Canadian Airlines entered these filings with the support of a substantial number of secured creditors and aircraft lessors with interests in approximately 80% of its fleet. Under the terms of the two orders, the Corporation will present a Plan of Arrangement, setting out the terms of the restructuring of its debt and other obligations, to creditors and the Courts within 30 days. Creditor meetings to approve the Plan of Arrangement are expected to be held in early May. The orders stay any proceedings against the Corporation or Canadian Airlines, and ensure that no pre-emptive action can be taken by creditors to disrupt the significant progress to date in negotiations with senior creditors. The Plan contemplates that Canadian Airlines will become a wholly owned subsidiary of Air Canada upon completion. It is likely that shareholder interests will also be compromised. As such, there can be no assurances as to what level of consideration, if any, will be offered to shareholders of Canadian Airlines Corporation as part of the process. CANADIAN AIRLINES: Secured Noteholders Reject Air Canada Proposal ----------------------------------------------------------------- On March 24, 2000, holders of (US) $175 million in Senior Secured Notes issued by Canadian Airlines announced that they are rejecting a proposal from Air Canada/Canadian Airlines and are taking steps to protect and preserve the assets of Canadian Airlines charged in their favour in order to secure the monies owed to them by the company. Canadian Airlines' preliminary plan proposes that secured creditors' debt be written down to fair market value of the underlying security. The fair market value of the assets held as security by the holders of Senior Secured Notes is approximately (US) $200 million in excess of the amount owed to the holders of such Notes. Notwithstanding the proposed treatment of other secured creditors, the Air Canada group is proposing to pay the holders of Senior Secured Notes less than the fair market value of the charged assets. The Air Canada group proposes that the holders of Senior Secured Notes debt be reduced to 92% of the principal amount of the Notes and waive the interest owed to them. The Air Canada group is requesting that the holders of Senior Secured Notes take a discount in excess of (US) $20 million or (CDN) $30 million, notwithstanding that the key operational assets they hold as security are valued significantly in excess of the amounts owed to the holders of Senior Secured Notes. The steering committee for the holders of Senior Secured Notes have rejected this proposal. The Air Canada/Canadian Airlines plan will allow the holders of Senior Secured Notes to realize on the assets. The Noteholders are prepared to take the charged assets and have incorporated "Air International Parts Corporation" to commence the realization process concerning the key operational assets. The Senior Secured Noteholders are committed to being repaid in full on all monies owed to them, approximately (US) $184 million, or to taking steps to realize on the key operational assets of Canadian Airlines. Representatives of the holders of Senior Secured Notes will be working with the Court-appointed Monitor of Canadian Airlines' CCAA restructuring process to design systems that will ensure that the security value of the Senior Secured Noteholders does not erode in the short term. The representatives will also work with the Monitor to pursue arrangements and a schedule under which the Senior Secured Noteholders would be able to realize on the key operational assets of Canadian Airlines. Mr. Geoffrey Morawetz of the law firm of Goodman Phillips & Vineberg, representing the Trustee for the Senior Secured Noteholders, said, "We are pleased that the Court has recognized the need for the Monitor to work with representatives of the Senior Secured Noteholders and to take into account the unique needs of the secured creditors who hold security on the key operational assets of Canadian Airlines." The holders of Senior Secured Notes are, therefore, moving to protect the key operational assets of Canadian Airlines charged in their favour. These assets include Canadian Airlines' spare engines and parts; its ground equipment; its communications equipment which links ramp, maintenance and other personnel; fuel; inventory; food and beverages; catering supplies and galley equipment. The Notes are also secured by Canadian Airlines' key operational centres in Vancouver and Calgary and by its three aircraft hangers at Lester B. Pearson International Airport. The holders of the Senior Secured Notes also hold the shares of Canadian Regional Airlines, a wholly owned subsidiary of Canadian Airlines which has annual revenues of approximately (CDN) $600 million. In 1998, the independently appraised value of the collateral totaled approximately (US) $380 million, some (US) $200 million more than the principal amount outstanding to the holders of Senior Secured Notes. The holders of these Notes have been advised that the fair market value of the collateral today is substantially the same or better than the value in 1998. A senior officer of Canadian Airlines has certified the fair market value of the collateral was in excess of (US) $300 million as recently as December 1999. CLARIDGE HOTEL: Announces 1999 Financial Results ------------------------------------------------ The Claridge Hotel and Casino Corporation ("Corporation"), operator of the Claridge Casino Hotel here, today announced its 1999 financial results. The Corporation reported a Net Loss for the year ended December 31, 1999, of $38.2 million. The Corporation's Income Before Reorganization Items and Income Taxes was $531,000. Reorganization Items included an expense of $1.3 million for professional fees, $142,000 of interest income from accumulated cash and a $37.6 million provision for impairment of the Expandable Wraparound Mortgage receivable. The provision for impairment was recorded due to the need to write-down the balance of the Expandable Wraparound Mortgage receivable to its estimated realizable value in view of the voluntary bankruptcy filings of the Corporation, its subsidiary The Claridge at Park Place, Inc., and Atlantic City Boardwalk Associates, L.P., the Expandable Wraparound Mortgage mortgagee. The Corporation's net loss for the year ended December 31, 1998, was $9.4 million. For the quarter ended December 31, 1999, the Corporation reported a net loss of $39.2 million. The provision for impairment of the Expandable Wraparound Mortgage was recorded in the fourth quarter of 1999. The net loss for the fourth quarter of 1998 was $5.4 million. On August 16, 1999, The Claridge Hotel and Casino Corporation and The Claridge at Park Place, Incorporated filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in order to facilitate a financial restructuring. Therefore, beginning on August 16, 1999, the Corporation ceased to record interest expense related to its 11 3/4% First Mortgage Notes. Interest expense for the Notes, for the period August 16, 1999 to December 31, 1999, would have been $4.2 million. Earnings before interest, taxes, depreciation and amortization, when adjusted to eliminate the effects of the related limited partnership structure ("Adjusted EBITDA"), was $10.7 million for the full year of 1999 compared to $ 8.6 million for 1998. Adjusted EBITDA for 1999 included the effect of the receipt of the settlement of Claridge's claim against the general contractor that built its self-parking garage, as well as the professional fee expense related to the reorganization. Adjusted EBITDA for the fourth quarter of 1999 was $366,000 compared to $481,000 for the comparable period in 1998. The Claridge Hotel and Casino Corporation, through its subsidiary, The Claridge at Park Place, Incorporated, operates the Claridge Casino Hotel in Atlantic City. The casino hotel opened in July 1981 and has 59,000 square feet of casino gaming space. The Claridge Hotel and Casino Corporation is a closely-held public corporation. Its Corporate Bonds are publicly traded on the New York Exchange under the symbol CLAR02. CPS: Court Approves Manatron's Bid For Selected Assets ------------------------------------------------------ Manatron, Inc. (Nasdaq: MANA) announced that the Northern District of Texas' U.S. Bankruptcy Court in Dallas has approved Manatron's bid for the purchase of selected assets and the assumption of certain contracts of Dallas-based CPS Systems, Inc. (CPS). Manatron successfully bid $1.8 million in cash for the Florida, Texas, Oklahoma, Colorado, and North Carolina property tax, appraisal and integrated voice response source code, software support and licensing agreements, and other related assets at a March 24th auction conducted by the Bankruptcy Trustee for CPS. These operations have recurring annual revenues of $2.3 million from approximately 60 client counties, the majority of which are in Florida. Manatron expects to close the transaction and begin operations of this business subsequent to a final court hearing on March 30. CPS filed a voluntary petition for protection under Chapter 11 of the Federal Bankruptcy Code on January 19. Prior to filing for bankruptcy, CPS, which was founded in 1975, served more than 200 customers through offices in seven states and reported revenue of $5.1 million for the first nine months of 1999. The remaining assets of CPS were awarded to other bidders. Paul Sylvester, Manatron's President and Chief Executive Officer, stated, "The CPS Systems operations we acquired are very complementary to our business and contiguous geographically to the markets we presently serve. The Florida operation serves 35 out of 67 counties in the state, including Okaloosa, Orange, and Broward. Florida is a market that we were interested in but would have taken several years to obtain this kind of presence. We are very excited by the opportunities and synergies created by this acquisition, but our first two priorities are reaching out to CPS's employees and customers." "Before we placed our bid, we met with a number of CPS employees in Florida and Texas. From the start, we were very impressed with their level of expertise, their commitment to quality, their work ethic, and particularly their attitude during this trying time. Many of these people were also in the process of developing a new client/server property tax system for the country that incorporates many of the same tools and techniques we are using with our MVP Tax initiative. We expect to hire approximately 25 people and utilize the existing CPS office in Tampa. We also are in the process of finding an office in Dallas for the employees that will support the Oklahoma and Texas customers." "In addition, we have met with a number of CPS's customers, including the Florida user group, and are very excited about working with them. We plan on meeting with them this week to get more acquainted and jointly plan a smooth transition. I think they will find in Manatron the corporate culture and stability they are likely looking for in a vendor. In addition, there are definite opportunities to market our ProVal appraisal system, Internet products, and registered deeds indexing and recording systems." Paul Sylvester concluded, "When you consider the quality of the employees and the customers that we are combining with those already in place at Manatron, we believe that this acquisition is a significant step toward our goal of becoming the leading provider of property tax and appraisal systems nationwide. In addition, we believe that the CPS operations could be accretive to earnings for fiscal 2001, which begins May 1st." Manatron, Inc. designs, develops, markets and supports a family of web- based and client/server application software products for county, city and township government. EAGLE FOOD: Taps Schottenstein Bernstein Capital Group ------------------------------------------------------ The debtor, Eagle Food Centers, Inc. seeks to employ and retain Schottenstein Bernstein Capital Group, LLC as store closing consultant with respect to the three closing stores located in Indiana. EXCELSIOR-HENDERSON: Announces Agreement On Proposed Plan --------------------------------------------------------- Excelsior-Henderson Motorcycle Motorcycle Manufacturing Company announced it had reached an agreement with E. H. Partners regarding a proposed plan of reorganization in its Chapter 11 Bankruptcy case. The Company anticipates it will file the proposed plan of reorganization in the near future. A term sheet regarding the proposed plan has been filed with the Bankruptcy Court in connection with a pending motion. Key creditor groups also support the proposed plan. Under the proposed plan, the Company will receive a substantial capital infusion from E.H. Partners. The proposed plan will provide that on its effective date, the Company's outstanding securities will be deemed cancelled and terminated, and the Company's obligations thereunder will be discharged. The proposed plan will not provide for the Company's current stockholders to retain or obtain any equity interest in the Company going forward. On the effective date, it is also anticipated that (i) the Company will receive a new equity cash infusion from E.H. Partners, (ii) secured creditors will receive restructured notes and (iii) unsecured creditors will receive, among other things, a pro-rata distribution of cash and the right to receive certain royalties based on the Company's gross sales, subject to a maximum amount. E.H. Partners will own all of the issued and outstanding equity of the Company following the effective date. The Company anticipates it will be filing a current report on Form 8-K within the next two weeks with further details regarding the proposed plan. The very brief summary set forth above is qualified in its entirety by reference to the proposed plan, a copy of which will be included in its Form 8-K. The proposed plan has not been approved by the Bankruptcy Court and is preliminary and subject to change. Effectiveness of the proposed plan is subject to confirmation by the Bankruptcy Court. FRONTIER INSURANCE: Downgrade of Preferred Securities To "Caa" ------------------------------------------------------------- Moody's Investors Service has lowered its rating on the trust preferred securities of Frontier Financing Trust -- a special- purpose capital funding vehicle of Frontier Insurance Group, Inc. (Frontier) -- to "caa" from "b1". The rating action follows Frontier's Insurance Group's recent announcement that it is deferring the dividend payable April 15, 2000. The rating outlook remains negative. This action follows a downgrade in November, 1999. At that time, Moody's cited the company's third quarter $136 million pre-tax charge related primarily to reserve strengthening on its medical malpractice business and to a lesser degree on its general liability book of business. Moody's further noted the company's poor operating performance over the past two years, most notably within its core medical malpractice business, its heightened financial leverage and diminished financial flexibility as considerations in the downgrade. While the company has taken a number of steps to identify and address the problems underlying its medical malpractice business, the insurer's data collection and control structure have not yet been effective in monitoring and pricing this business. Although the volume of medical malpractice business has been reduced in 1999, the decline has been more than offset by increased writings of new programs and business that contain limited claims experience and limited pricing credibility, and whose ultimate profitability will emerge only over time. Moody's believes there is continued uncertainty surrounding the adequacy of Frontier's reserves given the long tail nature of much of Frontier's business coupled with the competitive pricing environment. Further, substantive improvements to Frontier's operating performance will be difficult to achieve given the significant competition from larger insurers in each of the group's major business lines and by difficulties the company may face in maintaining the confidence of its distribution force. Moody's expects that the group's financial leverage will remain aggressive. Frontier Insurance Group, Inc., based in Rock Hill, New York, is engaged through its subsidiaries in underwriting specialty lines of insurance on both an admitted and non-admitted basis, including health-related professional liability, general liability, and surety coverages. Frontier Insurance Group reported a net loss of $187.8 million for the year ended December 31, 1999. The group's 1999 GAAP combined ratio was 133.2%, and its net written premiums for the year increased 28% over the prior year. FRONTIER INSURANCE: S&P Lowers Preferred Stocks ----------------------------------------------- Standard & Poor's lowered its preferred stock rating on Frontier Financing Trust, which is fully guaranteed by Frontier Insurance Group, Inc., to single-'C' from triple-'C'-plus. The preferred stock rating remains on CreditWatch, where it was placed on March 17, 2000, with negative implications. At the same time, Standard & Poor's has removed from CreditWatch with negative implications and suspended its single-'B'-plus counterparty credit rating on Frontier Insurance Group, Inc. and its double-'B'-plus counterparty credit and financial strength ratings on Frontier's subsidiaries, Frontier Insurance Co., Frontier Pacific Insurance Co., United Capitol Insurance Co., and Regency Insurance Co. (NC). These ratings are now 'NR' or not rated. These rating actions follow Frontier's announcement on March 23, 2000, that it is deferring payment of dividends on its 6.25% Convertible Trust Originated Preferred Securities. The date of the next scheduled payment is April 15, 2000. The ratings suspension reflects Standard & Poor's concern about the quality and quantity of information that Frontier management is providing. HARNISCHFEGER: Seeks Court authority To Sell Oregon Property ------------------------------------------------------------ The Debtors ask Judge Walsh to approve their sale of real property located at 60005 Northeast 82nd Avenue, Portland, Oregon for $1,800,000, to 12th Trust and Holman Trust. As part of the sale, Holman will lease back to Beloit a small section of the building that will continue to house the Beloit Field Service operation for the northwest region of America. The Debtors listed the property for $2,300,000, but after six months the Holman offer was the best they received. (Harnischfeger Bankruptcy News Issue 21; Bankruptcy Creditor's Service Inc.) MARINER: Committee Taps Chanin Capital Partners ----------------------------------------------- The Official Committee of Creditors Holding Unsecured Claims applied for authority to employ Chanin Capital Partners LLC as its financial advisors. The firm will render the following services: Analysis of the debtors' operations, business strategy and competition in each of its markets; Analysis of the debtors' financial condition, business plans, operating forecasts, management and the prospects for future performance; Financial valuation of the ongoing operations of the debtors; Assistance to the Committee in developing, evaluating, structuring and negotiating the terms and conditions of a Chapter 11 plan for the debtors; Analysis of potential divestitures of the debtors' operations; and Provision to the Committee of such other financial advisory services with respect to the debtors as requested by the Committee, including without limitation, valuation, and advise with respect to financial, business and economic issues that may arise during the course of the Chapter 11 cases. The debtors will pay Chanin a monthly advisory fee of $150,000 for its services. MERIT ENERGY: Appointment of Receiver/Manager Adjourned ------------------------------------------------------- Merit Energy Ltd. ("Merit") announced on March 24, 2000 that the application brought by the National Bank of Canada and Bank One before the Court of Queen's Bench of Alberta to terminate the previously granted order under the Companies' Creditors Arrangement Act (Canada) ("CCAA") and to appoint Arthur Andersen Inc. as Receiver/Manager of Merit has been adjourned until 9:00 a.m. (Calgary time) on March 29, 2000. Merit continues to pursue strategic alternatives to settle its obligations to its creditors, and to maximize shareholder value, within the Court supervised process pursuant to the CCAA. METROTRANS: Order With Regard To Sale of Bus Pro Facility --------------------------------------------------------- The US Bankruptcy Court for the Northern District of Georgia, Newnan Division, entered an order establishing a hearing date with regard to the sale of the Bus Pro facility on April 12, 2000 at 10:00 AM. The debtors are seeking authority to sell the real property pursuant to the terms of a sale contract with Peach State acceptance corporation. The Bus Pro facility is subject to ad valorem tax liens and security deed in favor of Bank of America, NA. The purchase price is $1.55 million payable in cash at closing. The closing date is not later than May 1, 2000. MIDCON OFFSHORE: Final Accounting; Discharge of Trustee ------------------------------------------------------- The US Bankruptcy Court for the Southern District of Texas approved the Trustee's final report and final accounting and discharged her from her duties as Chapter 11 Trustee for Midcon Offshore, Inc. OMNA MEDICAL: Case Summary and 21 Largest Consolidated Creditors ---------------------------------------------------------------- Debtor: Omna Medical Partners, Inc. 2255 Glades Road, Suite 219A Boca Raton, FL 33431 Petition Date: March 24, 2000 Chapter 11 Court: District of Delaware Bankruptcy Case No.: 00-01493 Debtor's Counsel: Normal L. Pernick J. Kate Stickles Saul, Ewing, Remick & Saul, LLP 222 Delaware Avenue, Suite 1200 Wilmington, DE 19801 (302) 421-6825 Total Assets: $ 50 to 100 million Total Debts: $ 50 to 100 million 21 Largest Consolidated Creditors McDermott, Will & Emory Legal Svcs $ 246,106 Crisswell, Blizzard & Blouln Archt Svcs $ 140,614 Nikmehr Properties, LLC Landlord $ 96,704 Wyeth-Ayerst Pharmaceuticals Supplies $ 75,065 Wilkie, Farr & Gallagher Legal Svcs $ 59,130 Medic Computer Computer Program Systems for Billing $ 46,889 Cananwill Insurance $ 32,479 Martin Friedman Graphic Design Graphic Designer $ 32,421 Readers Digest Mktg Services $ 31,116 Arthur Anderson Acctg. Services $ 30,000 Diagnostic Imaging, X-Ray Services Inc. and Supplies $ 27,676 Comforce.com f/ka Temporary Staffing Uniforce Staffing Services $ 25,074 Office Depot Office Supplies $ 19,432 McKesson General Medical Medical Supplies $ 14,430 Inacom Information (Hardware & Software) Systems Computers $ 13,214 Physician Sales & Service, Inc. Medical Supplies $ 12,675 National Linen Service Supplies $ 11,900 Pace Communications Mktg Services $ 11,700 Oratec Interventions, Inc. Medical Supplies $ 10,863 Staffing Now, Inc. Temporary Staffing Services $ 9,995 The Lloyd Company ASC Marketing $ 9,246 PENN TRAFFIC: Announces 25.4% EBITDA Increase in 4th Quarter ------------------------------------------------------------ The Penn Traffic Company announced that EBITDA for the fourth quarter ended January 29, 2000 was $31.5 million, compared to $25.2 million in the prior year, an increase of 25.4 percent. Revenues for the fourth quarter were approximately $625.7 million compared to $690.5 million a year ago, a decrease of 9.4 percent. Revenue comparisons are affected by store closures and sales completed between November 1998 and May 1999. Same store sales decreased 0.7 percent in the fourth quarter. Net income excluding amortization of excess reorganization value and an unusual item was $4.9 million or $.24 per share in the fourth quarter. During the quarter, the Company recorded a noncash charge of$25.6 million for amortization of excess reorganization value and an unusual item of $3.5 million (net of tax) associated with the restructuring of certain executive compensation agreements. The amortization of excess reorganization value is a noncash charge related to the Company's recent financial restructuring that will end during calendar year 2002. After deduction of these items, the Company reported a net loss of $24.2 million or $1.21 per share. During the period from August 1999 to February 2001, Penn Traffic expects to complete approximately 30 major store projects and to make significant investments in distribution, manufacturing and technology. The Penn Traffic Company operates 211 supermarkets in Pennsylvania, upstate New York, Ohio, Vermont and West Virginia under the "Big Bear," "Big Bear Plus," "Bi-Lo Foods," "P&C Foods," and "Quality Markets" trade names. Penn Traffic also operates wholesale food distribution businesses serving 85 licensed franchises and 72 independent operators. As a result of the completion of the Company's plan of reorganization, Penn Traffic adopted "fresh-start reporting" on June 26, 1999. Same store sales for the Company's supermarkets decreased 0.7% during the fourth quarter ended January 29, 2000. Same store sales for the Company's supermarkets decreased 1.5% for the 52- week period ended January 29, 2000. At January 29, 2000, the Company operated 210 supermarkets with 8,910,898 total square feet. PENNCORP FINANCIAL: Board Selects Recapitalization Transaction -------------------------------------------------------------- PennCorp Financial Group, Inc. (NYSE: PFG) announced that its Board of Directors has selected a recapitalization transaction proposed by Inverness/Phoenix Capital LLC and Vicuna Advisors, LLC on behalf of the unofficial ad hoc committee of preferred stockholders, and Bernard Rapoport and John Sharpe as the final accepted offer pursuant to the bidding procedures approved by the Delaware Bankruptcy Court last month. The selection of the recapitalization transaction was approved by the Delaware Bankruptcy Court at a hearing today. Inverness and Vicuna currently represent 45.8 percent of the holders of the Company's two outstanding series of preferred stock. Messrs. Rapoport and Sharpe have committed to invest a total of $23 million in the recapitalized company, and Inverness and Vicuna have committed to fully underwrite a total $ 24.5 million rights offering of equity in the recapitalized company. As a result, the Company will not proceed with the previously announced proposed sale of Southwestern Life Insurance Company and Security Life and Trust Insurance Company to Reassure America Life Insurance Company. Pursuant to its agreement with Reassure America, the Company is obligated to pay Reassure America, upon consummation of the recapitalization transaction, a termination payment of $5.2 million plus reimbursement of expenses not to exceed $800,000. The Official Committee of Unsecured Creditors appointed in the Company's Chapter 11 case supports the Board's decision. The Company has received irrevocable commitments from holders of approximately 71 percent of the Company's two outstanding series of preferred stock that they will vote in favor of the proposed recapitalization transaction upon solicitation by the Company which when voted will satisfy the voting requirements for confirmation of the plan of reorganization. The Company also reports that to date, Inverness, Vicuna, Mr. Rapoport and Mr. Sharpe have deposited $47.5 million into an escrow account, and that those funds will be used to make their respective committed equity investments in the recapitalized company once the recapitalization transaction is consummated. A portion of such funds may be forfeited to the Company under certain circumstances. The proposed recapitalization transaction provides that the preferred stockholders will receive one share of common stock of the reorganized company for each share of outstanding preferred stock. In addition, the preferred stockholders will have an opportunity pursuant to the rights offering to purchase .3787 shares of common stock of the reorganized company for each share of outstanding preferred stock owned at a purchase price of $12.50 per share. Under the proposed recapitalization transaction, all existing shares of the Company's common stock will be cancelled for no value, and the Company's existing senior and subordinated debt, with principal currently aggregating approximately $180 million, will be paid in full in cash. Any and all other claims and liabilities of the Company will be paid in accordance with their terms. Consummation of the recapitalization transaction is subject to certain conditions including regulatory approvals, the consummation of a $95 million credit facility with ING Barrings in New York, the consummation of a proposed transaction whereby Southwestern Life and Security Life & Trust will reinsure substantially all of their existing deferred annuity blocks of business to RGA Reinsurance Company, an order confirming the Company's plan of reorganization that incorporates the proposed recapitalization transaction shall have been entered by the bankruptcy court and such order shall be unstayed and in full force and effect, and the closing of the recapitalization occurring not later than December 31, 2000. The definitive agreement for the credit facility and the reinsurance transaction will contain conditions to consummation including no material adverse change as defined in the proposed credit agreement. The Texas Department of Insurance has indicated to the Company that it sees no basis at this time for not approving the pending Form A-Change of Control Application submitted by the Inverness group and Bernard Rapoport. The Company intends to file a plan of reorganization incorporating the recapitalization proposal within the next two weeks and to seek confirmation of such plan by the Bankruptcy Court by June 5, 2000, with consummation anticipated to occur promptly following confirmation. PennCorp Financial Group, Inc. is an insurance holding company. Through its subsidiaries, the Company underwrites and markets life insurance and accident and sickness insurance throughout the United States. PROTECTION ONE: Moody's Investors Service Downgrades Notes ---------------------------------------------------------- Moody's Investors Service downgraded the ratings of Protection One Alarm Monitoring, Inc.'s $250 million of guaranteed senior unsecured notes due 2005 to B2 from Ba3. Moody's also downgraded to Caa1 from B2 the rating of P1's $350 million of 8.25% guaranteed senior subordinated notes due 2009, the $125 million of 13.625% guaranteed senior subordinated discount notes due 2005, and the $103 million of 6.75% guaranteed convertible senior subordinated notes due 2003. These securities are guaranteed by the parent company, Protection One, Inc. (POI), a holding company, and by certain subsidiaries of Protection One. The rating of the senior unsecured credit facility which was assumed by Westar Capital, Inc. has been withdrawn. Westar Capital, a wholly owned subsidiary of Western Resources, a Kansas Utility, owns approximately 85% of the outstanding common stock of Protection One. The senior implied and senior unsecured issuer rating are B2 and B3, respectively. The ratings' outlook remains negative. The ratings downgrade incorporates Moody's view that Protection One's ability to fund its debt service requirements from internally generated available cash flow remains weak. Moody's defines Protection One's available cash flow (ACF) to fund debt service as EBITDA less period attrition replacement funding and maintenance capital expenditures. Within the context of this definition, tested at various attrition rates, debt coverage levels are thin. Despite recent intervention on the part of Western Resources via Westar Capital, which includes the acquisition of Protection One's private and some public market debt, acquisition of Protection One's European Operations as a means of debt forgiveness, Protection One still remains highly leveraged. Although Moody's believes it is possible that cash flow coverage at Protection One may improve because of the reduction of Protection One's interest burden, and substantial customer acquisition cost reduction measures, the downgrade and the negative outlook still recognizes the hurdles to be encountered in implementing its new business model. Despite significant strategic and cost reduction efforts, it may be difficult for Protection One to generate sufficient cash flow to service debt. The ratings downgrade also reflects that Western's credit agreement with its own creditors has limited remaining support that Protection One can derive from Western Resources and Westar Capital. Protection One may have to face its future liquidity challenges alone since Western Resources has also previously announced that it is reconsidering its ownership interest in Protection One. The prior ratings of Protection One's debt instruments were enhanced by the support afforded by Western. The new ratings de-couple Protection One's ratings from the Western Resources support since Protection One's obligations far exceed the support Western is now able to provide. The recent need for financial intervention by Western Resources also communicates the heightened level of strategic and financial challenges, caused by the historic aggressive acquisition program at Protection One, that must be addressed. The new ratings and the negative outlook account for the likelihood that Protection One's efforts to overcome its operating and financial burdens may face challenges. However, Protection One's ratings continue to be supported by its significant market presence in the security alarm monitoring, the substantial efforts being taken to implement its new business model, and its relationship (but not the support) of Western Resources. Any positive momentum in the ratings will require that Protection One demonstrate sustained customer acquisition cost reduction and a definitive liquidity strategy that relies on more modest external support and internal generation of cash flow. Protection One Inc., owned 85% by Westar Capital, Inc, a wholly owned subsidiary of Western Resources, currently provides security alarm monitoring principally in the United States. It is headquartered in Culver City, California. PROTEVA: Purchasers Claim They Were Victims of Fraud ---------------------------------------------------- The St. Petersburg Times reports on March 25, 2000, that purchasers of Proteva computers contend in a class-action suit they were the victims of fraud. HSN denies misleading anyone. TV viewers who purchased their computers from HSN are attempting to hold the station responsible, stating that the computers were defective and in some cases used. Filed on behalf of dissatisfied customers, the suit accuses both companies of consumer fraud and deceptive trade practices by selling defective computers, refusing to honor rebates and providing shoddy customer service. The case undermines HSN's five-year effort to shed its bargain- basement image by promoting its quality-assurance lab, selling more brand-name goods and beefing up its selection of state-of- the-art consumer electronics. It's also another example of the computer hardware and software industry's reputation for making customers who are not tech-heads figure out how to set up and maintain their products. Experts have said there is a 50-50 chance that something will go wrong with any new personal computer. The plaintiffs claim they paid HSN higher prices than promised because the manufacturer declined to make good on many $ 100 rebates promoted on TV. Many said that instead of the promised technical support, they were put on hold repeatedly, only to be told their problems were not covered by the warranty. Bruce Tompkins of Parsippany, N.J., said he once waited on hold with HSN technical support for more than three hours. Finally, the technician said there was nothing he could do about Tompkins' crash-prone $ 1,598 Proteva because it was "a software problem." Home Shopping denies it has misled anybody, saying it has made extra efforts to remedy any problems since Proteva Inc. filed for Chapter 11 bankruptcy protection in August. It says it fronted another vendor $ 835,000 to honor Proteva warranties for technical support. Proteva went out of business awash in debt and unpaid suppliers ranging from Microsoft to 3Com Inc. The Posen, Ill.-based Proteva filed for bankruptcy protection shortly after the class-action suit was filed and at about the same time Home Shopping, one of its biggest customers, stopped selling Proteva products. HSN declined to say exactly when it decided to stop carrying the line, which Proteva also sold through direct mail, online retailer ValueAmerica and other computer retailers. At its peak, Proteva was making about 200,000 computers a year at a plant in Wisconsin. SysteMax Inc., a Port Washington, N.Y.-based computer seller with 1999 revenues of $ 1.75-billion, acquired Proteva's assets and customer lists in November. The all-cash price was not disclosed. SysteMax assembles computers under several names in a plant near Cincinnati, including Proteva by SysteMax. HSN, however, now only carries the SysteMax brand. SysteMax said it is not responsible for defective products made by the old Proteva. "SysteMax only bought the assets of Proteva, not the liabilities," said spokesman Gary Fishman. RAYTECH CORP: Announces 1999 Results ------------------------------------ Raytech Corporation (NYSE: RAY) reported record worldwide sales for the year ended January 2, 2000. The reported worldwide sales of $252 million exceeded 1998 sales of $247.5 million by $4.5 million or 1.8 percent. The increased sales were driven by the introduction of new products and the penetration of new markets across the three segments of the Company, Wet Friction, Aftermarket and Dry Friction. "1999 continued our worldwide sales growth for the ninth consecutive year. The introduction of new products and new markets provided new sales of $12.6 million in 1999, which is directly attributable to our strength in technology and the quality standards we adhere to in our manufacturing process," stated Albert A. Canosa, President and Chief Executive Officer of Raytech Corporation. "Our commitment to quality is evident in our attainment of Q1 status from the Ford Motor Company, the Partnership status from Deere & Company, and the fact that all of our manufacturing facilities are QS9000 and ISO 9001 certified," Canosa added. Pretax income for the year-end January 2, 2000 was $26.5 million which exceeded the 1998 pretax earnings of $24.8 million by 6.9%. The increase in pretax earnings was driven by improved gross profit and reduced selling, general and administrative expenses. Raytech Corporation is a global manufacturer of energy absorption and power transmission products, as well as custom engineered components. The Company has been under the protection of the U.S. Bankruptcy Court relating to asbestos personal injury and environmental liabilities since March 1989. The ultimate liability of the Company with respect to asbestos-related, environmental or other claims cannot presently be determined. RDM SPORTS: Hearing on Sale of Olney Property --------------------------------------------- A hearing will be held on April 18, 2000, at 10:00 AM, Second Floor Courtroom, US Courthouse, Newnan, Georgia, to approve the sale of property in Olney, Illinois. An escrow, holding over $11 million was established to fund the remediation of the property. The movants sought authority for the trustee to purchase cap and liability insurance for the remediation, which the court approved on March 17, 2000. The Trustee expects that the consideration to the debtors' estates from the proposed transactions will be approximately $5,385,000. SOUTHERN MINERAL: Applies for Order To Retain Petrie Parkman ------------------------------------------------------------ Southern Mineral Corporation and its debtor affiliates seek court authority to retain Petrie Parkman & Co, Inc. as financial advisor to the debtors. The firm will provide the following financial advisory services: Meet with the debtors' management to develop an understanding of the debtors' operational and financial objectives; Meet with the management and consulting engineering firm of Southern Mineral, as appropriate, to allow Petrie Parkman to gain a thorough understanding of the debtors' assets and liabilities; Review the debtors' historical financial and operating statements to allow Petrie Parkman to develop a perspective on debtor's performance; Review the debtors' business plan and capital budget to allow Petrie Parkman to develop a perspective on the debtors' business prospects; Assist the debtors in developing the debtors' valuation of assets and/or securities of other companies; Assist the debtors in developing the debtors' valuation of assets and/or securities of other companies; Assist the debtors in presenting a valuation of the debtors' assets and/or securities to other parties, if appropriate; Assist management in formulating, considering and proposing various transaction structures designed to achieve the debtors' objective; Develop a preliminary analysis indicating potential reference values of the debtors; Present Petrie Parkman's analysis to the management and Board of Directors of Southern Mineral; Assist management in assessing the likely reaction of the capital markets and/or its creditors to the Reorganization and one or more of the potential Transactions; Advise and assist the debtors in developing a negotiating strategy with respect to the Reorganization or to a Transaction; Advise and assist the debtors in the course of its negotiations of the reorganization and a Transaction and participate in such negotiations; Participate, including providing expert testimony, as necessary, in any hearings before the Bankruptcy Court in connection with the foregoing, including hearings to consider adequacy of a disclosure statement with respect to, and a confirmation of, a reorganization plan; and Render such other advisory services as may be reasonably requested by the debtors in connection with its engagement by the debtors. The firm requests an initial financial advisory fee of $50,000, a monthly fee of $25,000 and a Transaction fee in the sum of 1.5% of the Transaction Value, or in the event of a Reorganization, a flat fee of $600,000. A hearing on the retention application will be held on April 10, 2000 at 11:000 AM in Courtroom 400, 515 Rusk, Houston, Texas. SOUTHERN PACIFIC: Fitch IBCA Lowers Ratings ------------------------------------------- Fitch IBCA lowers the rating of the Southern Pacific Funding Corp's mortgage loan trust, series 1997-2 class B-1F certificates to BB' from BBB'. The Class B- 1F certificates are also placed on RatingAlert Negative. The class B-1F certificates are collateralized by a pool of fixed-rate, closed-end home equity mortgage loans. The rating action is based on Fitch IBCA's opinion that credit enhancement provided to the class B-1F certificates by overcollateralization and excess interest may not be sufficient to absorb greater than expected credit losses on the home equity loans. Overcollateralization, which is created by paying down the senior certificates with excess interest, has declined to $220,515 (0.26% of the original pool balance), from the required amount of $1,878,722 (2.25% of original). Fitch IBCA, based on its analysis of Southern Pacific's historical delinquency, loss and prepayment performance, believes that continued losses will likely deplete the overcollateralization amount in the next several months, and cause the class B-1F certificates to be written down. Such an occurrence would make it less likely that the class B-1F certificate principal amount would be paid in full. The class B-1F certificates are placed on RatingAlert Negative reflecting Fitch IBCA's concern that the performance of the mortgage pool may continue to deteriorate. Since Jan. 1999, cumulative losses have more than tripled to $ 3,734,531 (4.47% of the original pool balance) from $1,041,701. As of the Feb. 25, 2000 distribution date, thirty-day, sixty-day and ninety-day delinquencies are 3.93%, 1.53%, and 0.78%, respectively. Foreclosures and REO's are 8.72% and 4%, respectively. Southern Pacific Funding Corp. filed for bankruptcy in Oct. of 1998 and was purchased by Goldman, Sachs & Co. in May of 1999. The home equity loans are being serviced by Advanta Mortgage Corp. SUPERIOR NATIONAL: Units Rated 'R' ---------------------------------- Standard & Poor's has assigned an 'R' rating to Superior Pacific Casualty Co., California Compensation Insurance Co., and Combined Benefits Insurance Co., three of the five members of the Superior National Insurance Group, Inc. An insurer rated 'R' is under regulatory supervision owing to its financial condition. On March 3, 2000, Standard & Poor's lowered its counterparty credit rating on the Superior National Insurance Group, Inc., one of California's largest workers' compensation insurers, to 'D' from triple-'C'-plus and removed it from CreditWatch, where it had been placed on Dec. 22, 1999, with developing implications. Also on March 3, 2000, Standard & Poor's revised its financial strength rating on the group's lead company, Superior National Insurance Co., to 'R' from single-'B'-plus. These rating actions followed California Insurance Commissioner Chuck Quackenbush's issuance of a seizure order to take control of Superior National Insurance Group. The California Department of Insurance (DOI) appeared before the Los Angeles and Sacramento superior courts on March 6, 2000, to seek a conservation order for Superior National Insurance Group to allow the commissioner to use department staff to conduct the business of the conserved company as he sees appropriate. The order was approved by the courts and received by the department on March 7. In a report entitled, Insurer Financial Troubles on the Rise, which can be found on RatingsDirect, Standard & Poor's Web-based credit analysis system, Standard and Poor's cites the main reason for failures in the property/casualty industry as competitive pressures that have led to inadequate pricing and, subsequently, weakened reserve positions. The article can also be found on Standard & Poor's Web site at (http://www.standardandpoors.com/ratings/insurance).The California DOI's report stated that its financial examinations of Superior National Insurance Group revealed that the company was in hazardous financial condition and was severely under-reserved. The Superior National Insurance Group, Inc., consists of five companies. Four of the companies -- California Compensation Insurance Co., Combined Benefits Insurance Co., Superior National Insurance Co., and Superior Pacific Casualty Co. -- have been seized by California regulators. Appropriate actions relating to the fifth company, Commercial Compensation Insurance Co., are being pursued in coordination with regulators in the company's domiciliary state of New York. At the time of this release, Standard and Poor's has been unable to confirm what action, if any, has been taken by the New York State Insurance Department. SWIFT CREEK: Case Summary and 17 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Swift Creek Associates, LLC 4020 Tyron Road Raleigh, NC 27606 Type of Business: Owns and operates a Putt-Putt family entertainment center Petition Date: March 15, 2000 Chapter 11 Court: Eastern District of North Carolina Bankruptcy Case No.: 00-00528 Judge: A. Thomas Small Debtor's Counsel: Douglas Q. Wickham Hatch, Little & Bunn, LLP PO Box 527, Raleigh, NC 27608 (919) 8563940 Total Assets: $ 5,200,000 Total Debts: $ 3,327,399 17 Largest Unsecured Creditors Crawford Dunn construction $ 210,000 Southern Golf Distributors goods purchased $ 75,000 Phillip Herdon working capital loan $ 50,000 David and June working capital King loan $ 40,000 Dickerson Fencing construction $ 23,000 Drs. Barnabe and Elba $ 20,000 Angel Buenaflor $ 15,000 John and Lina Mabry $ 15,000 Ragsdale Liggett $ 11,000 Tom Ely $ 10,000 Len Barnes $ 10,000 Bunn Landscaping construction $ 9,000 James B. Ty $ 7,900 WRDU advertising $ 7,000 Time Warner Cable advertising $ 4,400 Marketing Res. & Mgmt, Inc. services $ 3,999 Signage Industries construction $ 3,500 T&W FINANCIAL: Winds Down Operations ------------------------------------ T&W Financial Corp. announced that is operating subsidiary, T&W Financial Services Co. LLC, had engaged Alan M. Jacobs of AMJ Advisors LLC to assist in continuing to wind down its business operations in anticipation of filing for bankruptcy. The company believes its remaining assets may be insufficient to pay its secured and unsecured creditors in full. The company also said that it has neither the personnel or the money to prepared its annual report. TELEGEN: Court Approves Up to $29 Million in Additional Offerings ----------------------------------------------------------------- Telegen Corporation (OTC BB:TLGNE.OB) announced today that it has received approval from the U.S. Bankruptcy Court to enter into an amended investment banking agreement with WMS Financial Planners, Inc. and Pacific West Securities, Inc. to conduct a series of additional stock offerings for gross proceeds of up to $29 million. As envisioned, Telegen will conduct a series of four new offerings with the first two offerings, a $4 million Regulation S offering and a$10 million Regulation D offering, to commence immediately. Telegen also announced that it has received firm commitments for the entire $4 million Regulation S offering and expects to complete it shortly. Upon completion of the first two offerings, Telegen will commence the final two offerings. Proceeds from these offerings, in addition to the $7 million received from the prior Regulation D offering successfully completed March 7, 2000, will be held in escrow pending confirmation of Telegen's Plan of Reorganization. Telegen expects to complete reorganization by June 30, 2000. Telegen Corporation is headquartered in San Mateo, California, and is developing a proprietary flat panel display technology known as HGED as well as hardware and software solutions for Internet delivered MP3 digital music. The Company's stock is traded on the electronic bulletin board under the symbol TLGNE.OB. UNITED COMPANIES: Moody's Downgrades Five Subordinate Classes ------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of the guaranteed subordinate classes from five manufactured housing securitizations of United Companies. The downgrade affects the B- 2 classes in United Companies' Series 1996-1, 1997-1, 1997-2 and 1997-3 MH transactions, as well as Class A of the issuer's Series 1997-RS1 deal. According to Jeffrey Wolf, a Moody's vice president, the rating downgrades were prompted by the deteriorating performance of United Companies' MH deals and by the withdrawal of the senior debt rating of the issuer's parent corporation, whose corporate guaranty had supported the five certificate classes. The affected MH transactions have suffered from weaker-than- anticipated performance, high levels of delinquencies and monthly repossessions, and low recovery rates. Moreover, the high delinquencies of the deals have masked reported losses to date. At the same time, excess spread is continuing to deteriorate, due to the decline in the weighted-average coupon of the loans and the paydown of the senior certificate classes with lower coupons. The combination of low recovery rates and declining excess spread has caused some of the downgraded classes to sustain writedowns of principal. The five affected classes of certificates had been placed under review for possible downgrade on July 23, 1999, following Moody's downgrade of the senior debt rating of United Companies' parent, United Companies Financial Corporation (UCFC), to Ca from Caa2. The five classes had depended primarily upon a corporate guaranty from UCFC for credit support. Subsequently, however, Moody's withdrew UCFC's senior debt rating, effectively removing any support benefit from the corporate guaranty. Currently, the five certificate classes are solely dependent upon excess spread for credit support. While today's downgrades are the only rating actions that have been taken at this time on United Companies' MH securitizations, Mr. Wolf cautioned that the multiple problems afflicting these transactions may necessitate additional rating actions in the near future. Hence Moody's will continue to closely monitor the performance of all MH deals from United Companies. The complete rating actions are as follows: UCFC Funding Corporation Manufactured Housing Contract Pass- Through Certificates: Series 1996-1; $6.325 million, 10.300% Class B-2 Certificates, downgraded to C from Caa2 Series 1997-RS1; $6.325 million, 8.500% Class A Certificates, downgraded to C from Caa2 Series 1997-1; $3.938 million, 8.445% Class B-2 Certificates, downgraded to C from Caa2 Series 1997-2; $4.125 million, 8.180% Class B-2 Certificates, downgraded to C from Caa2 Series 1997-3; $4.875 million, 8.000% Class B-2 Certificates, downgraded to C from Caa2 United Companies is a wholly owned subsidiary of UCFC and has been primarily responsible for servicing UCFC's manufactured housing loans. On March 1, 1999, UCFC filed for reorganization under Chapter 11 of the United States Bankruptcy Code. VISTA GOLD: 1999 Results and New Ore Reserves at Hycroft -------------------------------------------------------- Vista Gold (Amex: VGZ; Toronto) announced its results for 1999. The Corporation experienced a loss of $27.7 million for the year, including $16.2 million in write-downs of mineral properties. The net loss before write-downs was $11.5 million as compared to a net loss in 1998 of $1.6 million. At year-end, the Company had working capital of $3.0 million and cash of $ 2.3 million and believes that its current cash on hand is sufficient to continue producing gold from previously mined and inventoried ore at the Hycroft mine. However, the Corporation will have to raise additional funds from external sources in order to restart mining activities at the Hycroft mine or begin construction and development activities at the Amayapampa project in Bolivia. Accordingly, the Corporation is actively investigating various financial alternatives, including debt financing, the issuance of equity and mergers with other companies. Vista Gold Corp. is an international gold mining, development and exploration company based in Denver, Colorado. Its holdings include the Hycroft mine in Nevada, a development project in Bolivia, and exploration projects in North and South America. WASTE MANAGEMENT: Announces Financial Results --------------------------------------------- Waste Management, Inc. (NYSE: WMI) announced financial results for its fourth quarter and year ended December 31, 1999. For the fourth quarter ended December 31, 1999, the company reported revenue of $3.34 billion compared to $3.23 billion in the year ago quarter, an increase of 3%. Fourth quarter net loss was $114.7 million, or $(0.19) per share on a diluted basis, compared with net income of $63.5 million, or$0.10 per diluted share, in 1998. On a pro forma basis, after adjusting for unusual items, fourth quarter 1999 net income was $200 million, or $0.32 per share on a diluted basis. For the full year 1999, revenue of $13.13 billion compared to $12.63 billion in 1998, an increase of 4%. Full year net loss was $397.6 million, or $(0.65) per share on a diluted basis, compared to $(1.32) per share in 1998. Important financial highlights of the quarter's results include: -- Internal growth of 1.9% in the North American solid waste business, as compared to the prior year quarter; -- Operating cash flow of $397.2 million; -- EBITDA before unusual costs of $946 million; Further, the Company noted progress on implementation of the strategic plan announced in August 1999: -- Disposition plans have been announced for assets in Finland, New Zealand, and The Netherlands. -- Bids are being analyzed and negotiations are progressing with potential buyers for assets in the Company's international markets. -- Bids have been received for several domestic operations, including a number of under-performing solid waste businesses, which are being held for sale. -- A more disciplined capital allocation process has been implemented for 2000. The process includes analyzing comparative returns on capital for various uses, and allocating the capital where the return is projected to be the highest. Regarding outlook and specific plans for 2000, the Company offered the following: -- The Company anticipates proceeds of approximately $3 billion from the sale of international and non-strategic or under- performing assets, the majority of which is expected during the second and third quarters of this year. -- $2 billion of these expected proceeds must be used to pay down debt, pursuant to bank agreements -- Acquisition capital is projected to be approximately $400 million. -- Capital expenditures for North America operations, outside of acquisitions, are projected at $1.3 billion. -- Unusual operating expenses anticipated during the year include approximately $100 million for outside accounting and auditing services and approximately $35 million related to information systems efforts. In the future, the Company expects to see a significant reduction in these expenses as it puts into place additional people and new systems. Waste Management Inc., based in Houston, is the industry leader in providing waste management services. In North America the Company operates throughout the United States, and in Canada, Puerto Rico, and Mexico, serving municipal, commercial, industrial and residential customers. Meetings, Conferences and Seminars ---------------------------------- March 30-April 2, 2000 NORTON INSTITUTES ON BANKRUPTCY LAW Norton Bankruptcy Litigation Institute II Flamingo Hilton Hotel, Las Vegas, Nevada Contact: 1-770-535-7722 April 3-4, 2000 PRACTISING LAW INSTITUTE 22nd Annual Current Developments in Bankruptcy and Reorganization Conference PLI Conference Center, New York, New York Contact: 1-800-260-4PLI April 5-8, 2000 TURNAROUND MANAGEMENT ASSOCIATION Spring Meeting The Pointe Hilton Squaw Peak Resort Phoenix, Arizona Contact: 1-312-822-9700 or info@turnaround.org April 6-7, 2000 ALI-ABA Commercial Securitization for Real Estate Lawyers Walt Disney World, Orlando, Florida Contact: 1-800-CLE-NEWS April 10-11, 2000 PRACTISING LAW INSTITUTE 22nd Annual Current Developments in Bankruptcy and Reoorganization Conference Grand Hyatt Hotel, San Francisco, California Contact: 1-800-260-4PLI April 27-30, 2000 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriott, Washington, D.C. Contact: 1-703-739-0800 May 4-5, 2000 RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC. Bankruptcy Sales & Acquisitions The Renaissance Stanford Court Hotel San Francisco, California Contact: 1-903-592-5169 or ram@ballistic.com May 15, 2000 AMERICAN BANKRUPTCY INSTITUTE 2nd Annual New York City Bankruptcy Conference Association of the Bar of the City of New York, New York, New York Contact: 1-703-739-0800 May 26-29, 2000 COMMERCIAL LAW LEAGUE OF AMERICA 52nd Annual Meeting of the New England Region Colony Hotel, Kinnebunkport, Maine Contact: 1-617-742-1500 or richard@landayleblang.com June 8-11, 2000 AMERICAN BANKRUPTCY INSTITUTE 7th Annual Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800 June 14-17, 2000 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 16th Annual Bankruptcy & Restructuring Conference Swissotel, Chicago, Illinois Contact: 1-541-858-1665 or aira@ccountry.net June 29-July 2, 2000 NORTON INSTITUTES ON BANKRUPTCY LAW Western Mountains Bankruptcy Law Institute Jackson Lake Lodge, Jackson Hole, Wyoming Contact: 1-770-535-7722 July 13-16, 2000 AMERICAN BANKRUPTCY INSTITUTE 7th Annual Northeast Bankruptcy Conference Doubletree Hotel, Newport, Rhode Island Contact: 1-703-739-0800 July 21-24, 2000 National Association of Chapter 13 Trustees Annual Seminar Adams Mark Hotel, St. Louis, Missouri Contact: 1-800-445-8629 or info@nactt.com August 3-5, 2000 ALI-ABA Fundamentals of Bankruptcy Law Somewhere in Boston, Massachusetts Contact: 1-800-CLE-NEWS August 9-12, 2000 AMERICAN BANKRUPTCY INSTITUTE 5th Annual Southeast Bankruptcy Workshop Hyatt Regency, Hilton Head Island, South Carolina Contact: 1-703-739-0800 August 14-15, 2000 TURNAROUND MANAGEMENT ASSOCIATION Advanced Education Workshop Loews Vanderbilt Plaza, Nashville, Tennessee Contact: 1-312-822-9700 or info@turnaround.org September 12-17, 2000 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES Convention Doubletree Resort, Montery, California Contact: 1-803-252-5646 or info@nabt.com September 15-16, 2000 AMERICAN BANKRUPTCY INSTITUTE Views From the Bench 2000 Georgetown University Law Center, Washington, D.C. Contact: 1-703-739-0800 September 21-22, 2000 RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC. 3rd Annual Conference on Corporate Reorganizations The Regal Knickerbocker Hotel, Chicago, Illinois Contact: 1-903-592-5169 or ram@ballistic.com September 21-23, 2000 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Emory University School of Law, Atlanta, Georgia Contact: 1-703-739-0800 September 21-24, 2000 AMERICAN BANKRUPTCY INSTITUTE 8th Annual Southwest Bankruptcy Conference The Four Seasons, Las Vegas, Nevada Contact: 1-703-739-0800 November 2-6, 2000 TURNAROUND MANAGEMENT ASSOCIATION Annual Conference Hyatt Regency, Baltimore, Maryland Contact: 312-822-9700 or info@turnaround.org November 27-28, 2000 RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC. Third Annual Conference on Distressed Investing The Plaza Hotel, New York, New York Contact: 1-903-592-5169 or ram@ballistic.com November 30-December 2, 2000 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800 The Meetings, Conferences and Seminars column appears in the TCR each Tuesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. Debra Brennan, Yvonne L. Metzler, Edem Alfeche and Ronald Ladia, Editors. Copyright 2000. All rights reserved. ISSN 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *