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/raid1/www/Hosts/bankrupt/TCR_Public/000330.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 30, 2000, Vol. 4, No. 63 Headlines CARSON INC: Served With Investigation By DOJ CDNOW INC: Online Music Retailer Could Face Bankruptcy CENTENNIAL COMMUNICATIONS: Private Placement Transaction CRESCENT REAL ESTATE: Moody's Lowers Ratings; Outlook Is Negative CROWN PAPER: Crown Vantage Enters Forbearance Agreement DIAMOND ENTERTAINMENT: Annual Meeting Set For April 27 EAGLE FOOD: Taps Retail Consulting Services, Inc. ENTEX INFORMATION SERVICES: Shareholders Report Interests FIRSTPLUS FINANCIAL: Creditors Submits List of Candidates GENICOM: Sale of Substantially All Assets GRAEME LIMITED: Seeks Extension of Exclusive Periods GRAEME LIMITED: Semi-Tech and Bank of New York Settle Dispute GREATE BAY: Reports Net Loss of $3.1 Million HHRG: Golden West Subsidiary Files Chapter 11 HURRICANE HYDROCARBONS: Shareholders Approve Resolutions INTERSCIENCE COMPUTER: Annual Meeting of Stockholders JITNEY JUNGLE: Harvest Foods To Purchase Two Stores KMART: Releases Financial Information KEY PLASTICS: Vital Information LIGHTHOUSE INTERNATIONAL: Case Summary and 11 Largest Creditors MARINA DEVELOPMENT: Case Summary and Largest Unsecured Creditor MICHAEL PETROLEUM: Withdraws Motion To Extend Exclusivity MITSUBISHI: DaimlerChrysler Buys Controlling Stake NATIONSWAY: Responds To Objection to Disclosure Statement NMT MEDICAL: Enters Sale Agreements For Certain Assets PACIFIC LIFE: Ross Invests in Korean Life Insurance Company PHYSICIANS RESOURCE: Appointment of Physicians' Committee SHARPE RESOURCES: Reorganization Plan Confirmed on March 27, 2000 THERMATRIX: Thermatrix and Dow Chemical Finalize Agreement TOWER AIR: Taps Goldin Associates as Financial Advisor TULTEX: May Not Have Enough Money To Pay Creditors UBIQUITEL OPERATING CO.: Moody's Assigns Ratings USTI: Court Approves Bid For Purchase of CPS Assets ********* CARSON INC: Served With Investigation By DOJ -------------------------------------------- Carson, Inc. reports that it understands that a second request for additional information has been delivered by the Department of Justice to Cosmair, Inc., under the Hart-Scott-Rodino Antitrust Improvements Act in connection with Cosmair's pending offer for all the issued and outstanding shares of the company. In this connection, Carson has been served with a civil investigative demand by the Department of Justice for additional documentation. The parties indicate they intend to comply with these requests as soon as "practicable". CDNOW INC: Online Music Retailer Could Face Bankruptcy ------------------------------------------------------ CDnow Inc., a Fort Washington, Pa., online music retailer, faces "substantial doubt about its ability to continue as a going concern," warned Arthur Andersen LLP, the company's auditors, according to The Wall Street Journal. Arthur Andersen cited the company's recurring losses from operations, its "working capital deficiency" and "significant payments" due this year on marketing agreements. CDnow said it has enough cash to meet its payment obligations until Sept. 30, but said it is "actively seeking" financing or a merging partner.(ABI 29-Mar-00) CENTENNIAL COMMUNICATIONS: Private Placement Transaction -------------------------------------------------------- Centennial Communications Corp. anticipates offering $250,000,000 in aggregate principal amount of senior subordinated notes due 2007 in a private placement transaction. The net proceeds from the offering are expected to be used to pay for acquisitions in Puerto Rico, investments in the Dominican Republic and other general corporate purposes. The notes anticipated to be offered and sold will not be registered under the Securities Act of 1933 and may not be offered or sold in the United States absent such registration or an applicable exemption from such registration requirements. CRESCENT REAL ESTATE: Moody's Lowers Ratings; Outlook Is Negative ----------------------------------------------------------------- Moody's Investors Service lowered its senior unsecured debt rating of Crescent Real Estate Equities Limited Partnership (Crescent) to Ba3, from Ba1. The rating agency has also lowered its rating on the cumulative preferred stock of Crescent Real Estate Equities, Inc. to "b2", from "ba3". Crescent Real Estate Equities Limited Partnership is the operating partnership of Crescent Real Estate Equities, Inc. Moody's opinion does not extend to Crescent's $850 million syndicated bank loan financing. The rating outlook for Crescent is negative, reflecting ongoing uncertainty around the REIT's ability to perform against its stated strategic and financing plans. A revision of the outlook from negative to stable will depend upon Crescent's ability to execute its business plan, including the sale of its behavioral healthcare facilities and other non-core assets, and to materially improve its leverage and coverage ratios. According to Moody's, these rating actions reflect the REIT's constrained financial flexibility due to increased levels of secured debt, weakening coverage ratios, an aggressive share repurchase plan and continued challenges with its behavioral healthcare portfolio. Moody's noted, however, that the REIT's has recently sold some of its behavioral healthcare facilities, which is a credit positive. Although recent financings address the majority of Crescent's near-term debt maturities, floating rate debt as a percentage of total debt remains high at around 28%. We anticipate that Crescent will take steps to further reduce its exposure through hedge agreements and asset sales. Moreover, higher capital costs associated with the recent financings are expected to weaken the REIT's fixed charge coverage. Of particular concern is the REIT's plan to buy up to $500 million of its shares to be funded with asset sales and creative financing arrangements. Moody's cited a $100 million leveraged stock repurchase agreement with Warburg Dillon Read in which the bank will purchase the REIT's stock in the open market, and where Crescent has the option to repurchase the stock by January 2001. Crescent will be required to repay the $100 million with cash and/or the issuance of additional shares, potentially resulting in higher debt levels. Uncertainty around management's medium and long-term strategic profile continues to be a credit concern. Moody's believes that Crescent will continue to embrace an aggressive, opportunistic and partly leveraged growth strategy, heightening the REIT's credit risk profile. Over the near-term, Moody's anticipates that the REIT will maintain its current business mix of office, luxury hotels/resorts, residential development, temperature controlled logistics and behavioral healthcare. Moody's views these real estate asset classes as being more risky as they are capital and management intensive and generally have volatile cash flows. Crescent's access to public debt and equity is limited. As such, the REIT may not be able to remain committed to this strategy. Significant shifts in portfolio strategies which heighten the REIT's credit risk could place downward pressure on its ratings. Moody's ratings continue to reflect the REIT's good asset and tenant diversification, its primary focus on class A office portfolio, its healthy operating performance, and its manageable lease expirations and improved debt maturity schedule. Moody's also noted the REIT's savvy management team, which has a demonstrated expertise in structuring complex transactions. Although the REIT's office portfolio is highly concentrated in low-barrier-to-entry markets in Texas and vulnerable to overbuilding, current rent levels in Crescent's properties are significantly below market and should help reduce earnings volatility during market downturns. The following ratings were lowered: Crescent Real Estate Equities Limited Partnership - Senior unsecured debt to Ba3, from Ba1. Crescent Real Estate Equities, Inc. - Cumulative preferred stock to "b2", from "ba3"; cumulative preferred stock shelf to (P)"b2", from (P)"ba3", and non-cumulative preferred stock shelf to (P)"b3", from (P)"b1". Crescent Real Estate Equities, Inc. [NYSE: CEI], headquartered in Fort Worth, Texas, is a fully integrated "paper-clipped" umbrella partnership real estate investment trust (UPREIT). As of December 31, 1999, Crescent Real Estate Equities Limited Partnership owned or had interests in 89 office properties, 7 retail properties, a 39.6% interest in 89 temperature controlle logistic facilities, 88 behavioral healthcare facilities, 8 full service hotels, 2 destination health and fitness resorts, and interests in 5 residential development corporations. Crescent had total assets of approximately $5.0 billion (book) and total partners' capital of approximately $2.2 billion (book) at December 31, 1999. CROWN PAPER: Crown Vantage Enters Forbearance Agreement ------------------------------------------------------- Crown Vantage entered into a forbearance agreement with its existing bank lenders until March 20, 2000. Under the forbearance agreement, the bank lenders would not exercise remedies available to them under the bank credit agreement as a result of Crown Vantage's existing violations of the credit agreement. As previously announced, the company's lenders waived until March 10th a default under the company's bank credit agreement that would otherwise have occurred on March 1st. Crown Vantage is one of the world's leading manufacturers of value-added papers for printing, publishing and specialty packaging. With nine mills internationally, the company has capacity to manufacture more than 750,000 tons of specialty papers per year. Its diverse products are tailored for the special needs of target markets. End users include specialty magazines and catalogs, financial printing and corporate communications, packaging and product labels, coffee filters and disposable medical garments - and hundreds more. DIAMOND ENTERTAINMENT: Annual Meeting Set For April 27 ------------------------------------------------------ Stockholders of Diamond Entertainment Corporation are being invited to attend the annual meeting of the shareholders of the company, a New Jersey corporation, to be held on April 27, 2000 at 3:00 P.M., local time, at the offices of Diamond Entertainment Corporation, 800 Tucker Lane, Walnut, California 91789. At the annual meeting, shareholders will be asked to consider and vote upon (I) the election of one Class 1 director and two Class 2 directors to the Board of Directors of the company for a term of three years; (II) the ratification of Merdinger, Fruchter, Rosen & Corso, P.C. as the independent certified public accountants of the company; (III) the increase of the authorized common stock of the company from 100,000,000 shares of common stock, no par value, to 600,000,000 shares; (IV) the approval and consent giving the Board of Directors of the company the authority and power to effectuate a reverse stock split up to a maximum ratio of 10 to 1 of the authorized shares of the common stock of the company; and (V) any other business properly arising. Time will be set aside during the meeting to discuss each item of business and for other questions relating to the company. Representative members of management will be on hand for this purpose, including a representative from the auditor. EAGLE FOOD: Taps Retail Consulting Services, Inc. ------------------------------------------------- The debtor, Eagle Food Centers, Inc. seeks court authority to employ and retain Retail Consulting Services, Inc. as real estate consultants to provide services, including relating to the re- negotiation of the debtor's various leaseholds pursuant to the terms of an engagement letter dated March 15, 2000. The firm will provide the debtor with the following services: Create a lease portfolio book showing the current lease terms of each store; Analyze all the debtor's real estate assets; Negotiate rent reductions and other modifications to leases with landlords; Negotiate and settle rejection damage claims by landlords' Assist documentation of all lease modification proposals and provide timely status reports of such progress; and Attend and participate in all hearings and meetings as requested. The firm's fees are based on the savings that Retail Consulting generates. The firm's lease-specific fee for renegotiating lease terms will be 4% of the present value using a discount rate of 9% of the total "Net Reduction Savings" which is the total net savings discounted to present value for the period commencing on the first calendar month in which the Net Reduction Savings shall begin. Where there are no monetary savings, but the firm negotiates lease modifications, the firm will receive $7,500 per lease. Retail Consulting will also receive 3% of the gross proceeds from the transfer or sale pertaining to a designated disposition of property. Such fee to be paid only upon closing. ENTEX INFORMATION SERVICES: Shareholders Report Interests --------------------------------------------------------- Siemens Aktiengesellschaft and Emilia Acquisition Corporation reports holding a 75.3% interest in Entex Information Services Inc. by virtue of their beneficial ownership of 24,719,596 shares of the common stock of Entex. The firms share voting and dispositive powers. Siemens Aktiengesellschaft, is a corporation organized under the laws of the Federal Republic of Germany and Emilia Acquisition Corp., is a corporation organized under the laws of the State of Delaware. Acquisition is an indirect wholly owned subsidiary of Siemens AG and a direct wholly owned subsidiary of Siemens Corporation, a corporation organized under the laws of the State of Delaware. Siemens AG's principal business is the design, development, manufacture and marketing of a wide variety of electrical and electronics systems. Siemens is a wholly-owned subsidiary of Siemens AG. Siemens serves as the holding company for the businesses of Siemens AG in the United States, and is responsible for developing, coordinating and maintaining the overall business strategy of Siemens AG in the United States. Acquisition was organized for the purpose of effecting the merger and related transactions Siemens, Acquisition and Entex have entered into under an Agreement and Plan of Merger, dated March 13, 2000. In the agreement Entex has agreed to consummate the merger of Acquisition with and into the company. The merger is subject to certain conditions including the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Siemens, through Acquisition, will acquire in the merger all of the outstanding common stock of Entex for an aggregate cash purchase price of $105 million less several transactional deductions. FIRSTPLUS FINANCIAL: Creditors Submits List of Candidates --------------------------------------------------------- The official Unsecured Creditor's Committee of FirstPlus Financial, Inc. submits the following list of proposed candidates for Trustee: Jeffrey H. Beck - standard hourly rate of $375. John T. Grgsby, Jr - $200 per hour Dan Lain - $195-$235 per hour David T. Obergfell - Blended hourly rate of $195 per hour Both Lain and Obergfell agree to an absolute cap on their fees. A hearing in connection with the debtor's third amended plan of reorganization dated February 4, 2000 will be held on April 5, 2000 at 9:15 AM, US Bankruptcy Court for the Northern District of Texas. GENICOM: Sale of Substantially All Assets ----------------------------------------- A hearing will be held on March 30, 2000 at 1:30 PM, US Bankruptcy Court, District of Delaware, for an order establishing procedures for a sale of substantially all of the assets of the debtor, Genicom Corporation. After consultation with its secured lenders, the debtor entered into a Term Sheet with Platinum Equity Holdings for the purchase of substantially all of the assets, including debtor's stock in its various domestic and foreign subsidiaries and causes of action for a sale price of $42 million plus the "Compaq Adjustment." The "Compaq Adjustment" means the greater of $3 million and 40% of any recovery in excess of $10 million received by Platinum in litigation or settlement of the Compaq claim. In the event that Platinum does not execute an Asset Purchase Agreement on or before April 7, 2000 which incorporates the provisions of the Term Sheet, or in the event the debtor receives a qualifying offer or offers for substantially all of the Assets which is $500,000 in excess of the Platinum offer, the debtor will conduct an auction of the assets at the GENIOCOM offices, 14800 Conference Center Drive, Suite 400, Chantilly, Virginia on April 28, 2000 at 10:00 AM. In the event an auction is held, bids must be in increments of no less than $100,000 over the previous bid. The sale motion will be held on May 3, 2000 at 1:30 PM. The debtor has agreed to a breakup fee to reimburse Platinum for its costs and expenses. The amount of the breakup fee is $500,000. On March 13, 2000, the court entered an order approving use of cash collateral and authorizing the debtor to enter into DIP financing with its prepetition secured lenders. The amount to be advanced under the DIP Financing is $6.2 million. A final hearing is set on the DIP Financing motion for March 30, 2000 at 1:30 PM. GRAEME LIMITED: Seeks Extension of Exclusive Periods ---------------------------------------------------- The debtor, Graeme Limited, Semi-Tech Corporation, and ISTM Investments (Barbados) Inc., seek a court order extending the exclusive periods during which the debtors may file a Chapter 11 plan or plans and solicit acceptances thereof, subject to the right of the Official Committee of Unsecured Creditors to file a plan and solicit acceptances. A hearing on the motion will be held on March 30, 2000, at 10:00 AM before the Honorable Burton R. Lifland, US Bankruptcy Court for the Southern District of New York. The debtors seek to extend the exclusive periods during which the debtors may file a Chapter 11 plan or plans and solicit acceptances thereof an additional 60 days through and including June 5, 2000 and August 4, 2000 respectively. The debtors claim that their cases are complex, and sufficiently large to warrant at least one extension. There are numerous complex intercompany transactions, and the Committee is still investigating the "Russian Transactions." Certain litigation has already been commenced by and among the debtors, the Committee, Singer and Akai concerning approximately $10.3 million which Akai deposited with the Court registry. The existence of an unresolved contingency and the need to resolve claims that may have a substantial effect on a plan warrants an extension of exclusivity, including the course of significant litigation, the disposition of the Bond collateral and the STM properties and the Audit. GRAEME LIMITED: Semi-Tech and Bank of New York Settle Dispute ------------------------------------------------------------- Semi-Tech Corp. is seeking bankruptcy court approval of an agreement that would allow the Bank of New York, as indenture trustee for the company's secured notes, to foreclose upon and assume ownership of the company's 49.6% interest in Singer Co. The agreement, if approved by the court, would resolve disputes that have been going on since last summer between Semi-Tech, the bank and certain holders of the company's senior discount notes due 2003. The disputes relate to the bank's and noteholders' rights to take control of about 25 million common shares in Singer that are owned by Semi-Tech's indirectly wholly-owned bankrupt subsidiary Graeme Ltd. (The Daily Bankruptcy Review and ABI 29-Mar-00) GREATE BAY: Reports Net Loss of $3.1 Million -------------------------------------------- Greate Bay Casino Corporation (OTC Bulletin Board: GEAAQ) reported a net loss of $3.1 million, or $0.59 per share, for the fourth quarter of 1999 compared to a net loss of $825,000, or $0.16 per share for the fourth quarter of 1998. For the year 1999, the Company reported net income of $76.1 million, or $ 14.68 per share, compared to net income of $24.5 million, or $4.72 per share, for 1998. Net revenues for the fourth quarter of 1999 amounted to $747,000 compared to net revenues of $2.8 million for the fourth quarter of 1998. Consolidated net revenues for the year 1999 totaled $6.4 million, compared to net revenues of $ 9.0 million for 1998. Net income reported for 1999 includes a gain of $85.6 million resulting from elimination of the Company's equity in Pratt Casino Corporation and its subsidiaries which filed for protection under Chapter 11 of the United States Bankruptcy Code in May 1999. Under the terms of a prenegotiated plan of reorganization which was consummated in October 1999, ownership and operating control of these entities by Greate Bay was terminated. Net income reported for 1998 includes a gain of $27.5 million resulting from the elimination of the Company's investment in its primary subsidiary, Greate Bay Hotel and Casino, Inc. (GBHC), which owns the Sands(R) Hotel & Casino in Atlantic City, New Jersey. GBHC filed for relief under Chapter 11 of the United States Bankruptcy Code in January 1998. The Company's remaining operations consist primarily of Advanced Casino Systems Corporation (ACSC), a computer software company which licenses casino information technology systems to the Sands and to Hollywood Casino Corporation, as well as to non-affiliated casino companies. ACSC reported a net loss of $564,000 and net revenues of $5.9 million for 1999 compared to net income of $813,000 and net revenues of $5.3 million for 1998. The decline in net income was attributed to increased marketing and development costs. HHRG: Golden West Subsidiary Files Chapter 11 --------------------------------------------- Golden West Refining Corporation Ltd, the company at the centre of an international gold scandal, said today its US subsidiary Handy & Harman Refining Group Inc (HHRG) had filed a petition under Chapter 11 of the US Bankruptcy Act. The move follows the mystery loss of $20 million of gold from HHRG in Peru and the indictment of two of its senior executives on fraud charges. Golden West today said it had been supporting HHRG in discussions with bankers and financiers with a view to providing on-going financing of HHRG's metal inventory. The Perth-based company, which is Australia's biggest gold refiner, also said it had reached agreement with HHRG's bankers and financiers which included HHRG making a consensual application under Chapter 11. Golden West said the move was designed to protect the interests of all creditors. A spokesman for NM Rothschild, which owns 50 per cent of Golden West said HHRG had not filed for bankruptcy but was protected under Chapter 11 while it considered its options. The move follows a report in the Australian newspaper this week that $20 million worth of gold bought by the US subsidiary in Peru had been missing since some time after September last year. In addition, in a separate incident, two former HHRG executives, including president and chief executive Barry Wayne, and a consultant have been indicted by the US Department of Justice in relation to an alleged US$130 million fraud against the Argentinian government. According to the report, Mr Wayne was responsible for buying the missing Peruvian gold. The Rothschild spokesperson said Golden West was limited in what it could say because the matter was under federal investigation in the US. But he pointed out the incidents leading to the indictments occurred prior to Golden West's purchase of HHRG in 1996. The indictments alerted Golden West and through its own investigation the company is now looking into the possibility of alleged fraud or theft of gold from Peru. Meanwhile, all of HHRG's bank accounts have been frozen and claims have been lodged with insurance companies to cover the loss of the gold. Golden West warned the Australian Stock Exchange in February that it expected heavy losses from its subsidiary. The company said yesterday that a significant write down of the assets would be required with the amount to be revealed in its full year result. Golden West's full year ends on March 31. Shares in Golden West were suspended on February 28. HURRICANE HYDROCARBONS: Shareholders Approve Resolutions -------------------------------------------------------- Hurricane Hydrocarbons Ltd. ("Hurricane") announces that its shareholders approved all resolutions at the company's Annual and Special meeting. These were the final approvals necessary to close a number of important transactions on or about March 31, 2000, including: - the emergence from court protection under the Companies' Creditors Arrangement Act - the release of approximately US$25 million raised via a special warrants bought deal - the acquisition of the Kazakhstan refinery OJSC Shymkentnefteorgsyntez("ShNOS") Bernard Isautier, Hurricane's President and Chief Executive Officer stated, "Shareholder approval of the resolutions passed today will allow Hurricane to become the largest private integrated oil company in Kazakhstan. Looking forward, Hurricane is committed to increasing shareholders' value. This will be accomplished by focusing on increasing production and reserves, enhancing the economic yield of the Shymkent refinery, developing export opportunities, reducing overhead and operating costs and seeking upstream acquisition opportunities." Hurricane's shares trade on the Toronto Stock Exchange under the symbol HHL.A and on the National Quotation Bureau (NQB) under the symbol HHLFQ. The company's website can be accessed at www.hurricane-hhl.com. INTERSCIENCE COMPUTER: Annual Meeting of Stockholders ----------------------------------------------------- Interscience Computer Corporation will be holding its annual meeting of stockholders at the principal executive offices of the company, located at 600 Hampshire Road, Suite 105, Westlake Village, California, on Monday, April 17, 2000 at 2:00 p.m. P.S.T. for the following purposes: 1. To elect five members of the Board of Directors to serve until the next annual meeting of shareholders; 2. To amend the Articles of Incorporation to change the name of the company to CaminoSoft Corp.; 3. To amend the Articles of Incorporation to increase the authorized shares of common stock from 10,000,000 to 100,000,000; 4. To approve the company's 2000 Option Plan; and 5. To consider other matters and transact other business as may properly come before the meeting. The Board of Directors is not currently aware of any other business to come before the annual meeting. The Board has fixed the close of business on March 6, 2000 as the record date for the determination of shareholders entitled to notice and to vote at the meeting. JITNEY JUNGLE: Harvest Foods To Purchase Two Stores --------------------------------------------------- The company that operates Harvest Foods supermarkets has purchased two of three Little Rock-area Jitney Jungle Supermarkets. John Miller, Harvest Foods owner and operator, made the announcement Tuesday. Jitney Jungle Stores of America Inc., based at Jackson, Miss., announced Monday it was pulling out of the Little Rock and Memphis, Tenn., markets, as part of its reorganization plan in federal bankruptcy court. KMART: Releases Financial Information ------------------------------------- Kmart Corporation's fiscal year ends on the last Wednesday in January. In releasing its financial information Kmart reports net annual income for fiscal 1999 of $403 as compared to that of fiscal 1998 when net annual income was $518. Sales for fiscal 1999 were $35,925 as compared to $33,674 in fiscal 1998. KEY PLASTICS: Vital Information ------------------------------- On March 23, 2000, Key Plastics L.L.C. and certain of its domestic affiliates filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division. The case number is 00-44478-R, indicating an assignment to Judge Rhodes. Sandra Mayerson, Esq., at Holland & Knight (212-513-3200) in NYC is attorney to the debtor, and an article appearing in this week's Automotive News relates that David Resnick of Peter J. Solomon Co. was working as the company's financial advisor immediately prior to the filing. LIGHTHOUSE INTERNATIONAL: Case Summary and 11 Largest Creditors --------------------------------------------------------------- Debtor: Lighthouse International PO Box 14442 Durham, NC 27709 Type of Business: Transportation - charter buses Petition Date: March 9, 2000 Chapter 11 Court: Eastern District of North Carolina Bankruptcy Case No.: 00-00483 Judge: A. Thomas Small Debtor's Counsel: Michael Ryan Dyson Dyson, Bradford & Kilbourne, PLLC 7501 Creedmoor Road, Suite 110 Raleigh, NC 27613 (919) 844-6999 Total Assets: $ 3,366,855 Total Debts: $ 3,146,446 11 Largest Unsecured Creditors Overland Charters Inc. $ 200,000 Parrish Tire $ 26,000 Fuel Man of the Carolinas, Inc. $ 14,000 Universal Coach Parts $ 9,466 Conseco Finance f/k/a Greentree $ 38,000 Conseco Finance f/k/a Greentree $ 38,000 Conseco Finance f/k/a Greentree $ 38,000 Bell South Advertising $ 5,000 AMI $ 34,600 GE Capital $ 10,100 First Union Nat'l Bank $ 13,700 MARINA DEVELOPMENT: Case Summary and Largest Unsecured Creditor --------------------------------------------------------------- Debtor: Marina Development Associates, LP 41 West 58th Street Suite 10D New York, NY 10019 Petition Date: March 28, 2000 Chapter 11 Court: Southern District of New York Bankruptcy Case No.: 00-11252 Debtor's Counsel: Tracy L. Klestadt Tracy L. Klestadt & Associates The Chrysler Building 405 Lexington Avenue 42nd Floor New York, NY 10174 Phone:(212) 972-3000 Fax:(212) 972-2245 Email:tklestadt@klestadt.com Total Assets: $ 12,991,250 Total Debts: $ 5,252,929 Largest Unsecured Creditor Harris & Beach & Wilcox, LLP $ 55,000 MICHAEL PETROLEUM: Withdraws Motion To Extend Exclusivity ----------------------------------------------------------------- The debtors, Michael Petroleum Corporation, Michael Petroleum Alpha Corporation and Michael Holdings, Inc. file a notice of withdrawal of their motion to extend the exclusivity period. The debtors withdraw the motion because the debtors are prepared to file a proposed plan of reorganization before the Exclusivity Period expires. The filing of the plan will render the motion moot. MITSUBISHI: DaimlerChrysler Buys Controlling Stake -------------------------------------------------- Mitsubishi Motors, hurt by plunging sales and profits, announced Monday that DaimlerChrysler AG will buy a controlling 34 percent stake in Mitsubishi in a $2 billion deal, leaving Toyota Motor Corp. and Honda Motor Co. as the lone independents among Japan's top five automakers, The Associated Press reported. In the previous decade, Americans, snapping up Toyota Corollas and Nissan Maximas, helped to push Ford Motor Co. and the former Chrysler Corp. to the edge of bankruptcy. However, thanks to booming U.S. and European economies in the 1990s and a debilitating economic slump in Asia, Japan's automakers are struggling for survival. "It's good for Mitsubishi. At least they can survive," said Jeremy Tonkin, an auto analyst at Towa Securities Co. in Tokyo. "These deals would have been unheard of five or 10 years ago," he added. The Mitsubishi-DaimlerChrysler alliance will create the world's third-largest automaker, with annual production of 6.5 million vehicles, ahead of Toyota's 5.19 million vehicles. (ABI 29-Mar-00) NATIONSWAY: Responds To Objection to Disclosure Statement --------------------------------------------------------- The debtors, NationsWay Transport Service, Inc., NW Transport Service, Inc. and Salt Lake Transfer Company, respond to the objection to Dislcousre statement filed by Liberty Mutual Insurance Company and its affiliates. Liberty Mutual claims that the Disclosure Statement accompanying the joint plan of reorganization proposed by the official Committee of Unsecured Creditors and the debtors dated march 1, 2000 does not properly address the classification and treatment of its claims offset rights. While the debtors reserve the right to dispute the offset rights claimed by Liberty Mutual, the debtors agree to amend the Disclosure Statement to provide that Liberty Mutual claims a right to assert set-off, subrogation or any other rights against accounts receivable owed to the debtor by customers who assert freight damage or loss claims. The debtors dispute Liberty Mutual's claimed Offset Rights. In the event, and to the extent, that Liberty Mutual's Offset Rights are allowed by a final order of the Bankruptcy Court, the allowed claim of Liberty Mutual shall be treated as a Class 7 secured claim. Otherwise, the allowed claim, shall be treated as a Class 8 General Unsecured Claim. Liberty Mutual also seeks continuation of the hearing on the Disclosure statement to review exhibits to the Disclosure statement. The law firm of Snell & Wilmer, LLP, One Arizona Center, Phoenix, Arizona 85004-2202 represents the debtors. NMT MEDICAL: Enters Sale Agreements For Certain Assets ------------------------------------------------------ NMT Medical Inc. has advised the Securities & Exchange Commission that it could not file the required standard financial information within the prescribed time period. In connection with the proposed disposition of certain of the assets comprising the company's neurosciences division, the company and its accountants are unable to finally determine the nature and size of various disposition related charges and adjustments, including the impact of discontinued operations and gain or loss on the disposition of assets, until approximately April 5, 2000. NMT anticipates filing its annual report on or about April 14, 2000. NMT Medical executed definitive agreements relating to the sale of certain assets comprising its neurosciences division to various entities associated with Integra LifeSciences Holdings Corporation on March 20, 2000. NMT will be treating the sale of this business as a discontinued operation in its 1999 financial statements. Accordingly, the company's operations will change significantly from the corresponding period for the year ended December 31, 1998. PACIFIC LIFE: Ross Invests in Korean Life Insurance Company ----------------------------------------------------------- WLR Recovery Fund and Asia Recovery Fund, both managed by Wilbur L. Ross, in partnership with a major Korean insurer, Tong Yang Life Insurance Co., Ltd., today completed the acquisition of Korea's Pacific Life Insurance Co., Ltd. The purchase from the Korean Government was for KRW 53.9 billion, or the equivalent of approximately US$ 47.5 million. The investment by the Ross-managed funds is the first US private equity fund investment in the restructuring of Korea's large and rapidly growing insurance industry. Today's transaction solves the capital problems at Pacific Life that were accelerated by the 1997 Asian financial crisis. Under the terms of today's transaction, Pacific Life is being merged into Tong Yang Life, whose own capital is ultimately being increased by the equivalent of approximately US$100 million through investments by the two Ross-managed funds and the Tong Yang Group, Tong Yang Life's parent. Financial arrangements among the parties were not disclosed. "We are delighted to make this first major overseas investment in the Korean life insurance sector -- one of Korea's most dynamic industries," said Mr. Ross. "Growth in the life insurance industry in Korea averaged more than 30% over a 30-year period prior to the 1997 crisis. That crisis effectively has given our investors a once-in-a-lifetime opportunity to participate in resumed growth via a newly restructured company with a well-established customer base." Tong Yang and Pacific have combined annual revenues of about $1.2 billion. Mr. Ross earlier this month formed WL Ross & Co. LLC, a distressed securities boutique, following a 24-year career in which he gained worldwide renown as an advisor to and investor in distressed companies. WL Ross & Co. in turn acquired majority ownership in the general partner of the WLR Recovery Fund (previously Rothschild Recovery Fund) and the Asia Recovery Fund, along with their $450 million of assets and staff in New York, Tokyo and Seoul. Under Mr. Ross's management, investors in the Rothschild Recovery Fund have achieved an average annual return of 28% since the fund's origination in 1997. In 1998, FORTUNE Magazine called Mr. Ross "The King of Bankruptcy" because he has restructured more than $200 billion of distressed securities. President Kim Dae Jong of Korea last Fall awarded him a medal for his help in restructuring the Korean economy during its recent crisis. Mr. Ross also has been a privatization adviser to New York City Mayor Rudolph W. Giuliani, and is a former Chairman of the Smithsonian Institution National Board. He has also served on numerous corporate and philanthropic boards. A graduate of Yale University and of the Harvard Business School, he lives in New York City. PHYSICIANS RESOURCE: Appointment of Physicians' Committee --------------------------------------------------------- The United States Trustee appoints the following persons to the Official Physicians' Committee in the case of Physicians Resource Group, Inc. 1. Dr. Robert Burlingame, Chair 1303 N. Travis Sherman, Texas 2. Dr. Fred McMillan, Vice-Chair 1421 North State #503 Jackson, MS 3. Dr. Steve Elieff 4325 N. Josey #305 Carrollton, TX 4. Joseph C. Noreika 3583 Reserve Commons Drive Medina, OH 5. Kris Richards 1345 West Bay Drive, Suite 101 Largo, Fla. 6. Dr. Lawrence Shafron 2210 San Jacinto Blvd. Denton, Tx. 7. Elizabeth Boudreau 5540 Saratoga, Suite 200 Corpus Christi, TX 8. Pacia Roberts 4205 McAuley Blvd., Suite 401 PO Box 1184 Oklahoma City, OK 9. Henry Tucker 900 Medical Circle Myrtle Beach, SC SHARPE RESOURCES: Reorganization Plan Confirmed on March 27, 2000 ----------------------------------------------------------------- Sharpe Resources Corporation announced that the second amended plan filed on February 9, 2000 with the U.S. District Bankruptcy Court of the Southern District of Texas, a plan of reorganization in accordance with federal bankruptcy laws was confirmed on March 27, 2000. The plan of reorganization sets forth the means for satisfying claims, including liabilities subject to compromise and subsequent adjustments to the plan. In general the plan provides for the following: Secured bank debt of $2.4 million will be paid in full on the closing date. The agreed to secured vendor lien claims will accept a cash payment of $0.45 as full payment of their claims. Alternatively, one of the sub-classes of secured claimants will have the option to be paid in full over 42 months at a 10 % interest rate. The first payment would commence 9 months after the closing date. The unsecured vendor claims will accept a $0.10 cash payment 120 days after closing. At that time the balance of the claim is to be converted to Sharpe Resources Corporation Preferred Class A stock which is subject to regulatory approval. The Preferred Class A stock will pay a quarterly stock dividend of 4 % per annum. Additionally, the Preferred Class A stock may be redeemed by the Company, all or in part, at a discount based upon the time of issuance, i.e., from 0-15 months the preferred can be redeemed for 35 % of the remaining value, from 16-24 months the redemption is 40 % of the remaining value, from 25-36 months the redemption is 60 % of the remaining value and thereafter at 100 % of the remaining value plus interest. Sharpe Resources Corporation has negotiated a US$2.3 million private placement financing. Schwartz Investments Corporation and Palos Capital Corporation of Montreal, Quebec have agreed to complete a US$2.3 million debenture financing subject to a due diligence evaluation, US Bankruptcy Court and regulatory approvals. The term of the debenture is five years and a 12 % fixed interest rate coupon with quarterly interest and principal payments which includes 2.3 million in warrants exercisable for three years at $C0.25 per warrant. This transaction is expected to close during the second quarter, 2000. The second proposed plan of reorganization received bankruptcy court approval and was voted on by the Company's creditors and shareholders entitled to vote. The Company received final confirmation of the plan on March 27, 2000. Sharpe intents to move forward with a plan to increase the production rate at the its 100 % owned Matagorda project in April, 2000. This work will include the recompletion of the M-1 gas reservoir on the 582-5 well. This work is expected to significantly increase production rates on the 582-5 well. The company is currently in the planning stage and exploring several financing options regarding the drilling of new wells this year on this property. The current gas price is approximately $2.65/ MCF. Indications are that the gas prices will remain strong for the balance of this year. The Company's onshore operated oil and gas assets have been producing significant revenue for the company over the past two- three months. This is due in large part to the company's effort to optimize the production rate at the 100 % owned properties in West Texas. The current production rate from the West Texas operated properties is approximately 75 BOPD. The company believes that the production rate of currently producing wells are expected to improve during the next 2-3 months. Recent sales prices for this crude is approximately $25-27 per barrel. Onshore the Company is in the process of selling all of its non- operated properties. At this point the Company has commitments to sell approximately $500 thousand of property value. The balance of the non-operated properties will be sold this year. Sharpe Resources shares are traded on the Montreal Exchange: symbol: SHO THERMATRIX: Thermatrix and Dow Chemical Finalize Agreement ---------------------------------------------------------- Thermatrix Inc. (OTC:TMXIQ) announced that it executed a Purchase and Service Agreement with The Dow Chemical Company which establishes the terms and conditions for designing and supplying multiple Thermatrix Flameless Thermal Oxidizer (FTO) Systems to various Dow plant site over several years. The Agreement will be submitted to the Bankruptcy Court for approval and the protection afforded a post-petition contract while the Company is in Chapter 11 status. Dow has selected the FTO technology as an alternative to incineration in connection with a major capital investment program involving a new proprietary recovery process. Design has commenced on two separate systems for Dow, which represent the two largest projects ever undertaken by Thermatrix. "The fact that The Dow Chemical Company has committed itself to Thermatrix in this Agreement clearly demonstrates that the FTO technology is a superior alternative to incineration," said Daniel S. Tedone, President. "This relationship with Dow provides the Company with a solid foundation for working through its current financial difficulties." Thermatrix is an industrial company primarily serving the global market of continuously operating facilities for a broad range of industries that include refining, chemical, steel, pharmaceutical, pulp and paper, electric utility, co-generation, and industrial manufacturing. Thermatrix provides a wide variety of air pollution control solutions, including its unique flameless thermal oxidation technology, as well as a wide range of engineered products and services to meet the needs of its clients. TOWER AIR: Taps Goldin Associates as Financial Advisor ------------------------------------------------------ The debtor, Tower Air, Inc. seeks authority to employ and retain Goldin Associates, LLC as financial advisor to the debtor. For the past several months, Tower has been involved in intense negotiations with its senior secured lender, largest unsecured creditors, and various aircraft and engine lessors for a comprehensive restructuring of Tower's finances and operations. Although these negotiations remain ongoing, Tower's senior secured lender reduced Tower's availability under its $25 million secured revolving credit facility to appoint where it became difficult, if not impossible for Tower to acce3ss sufficient liquidity to sustain its operations. Goldin Associates will, among other things: Assist Tower to develop business plans, projections and budgets; Assist Tower to develop and implement strategies and conduct negotiations respecting its restructuring; Assist Tower to develop and obtain confirmation of a plan of reorganization pursuant to Chapter 11 of the US Bankruptcy Code; Advise and assist Tower in connection with the transfer and/or sale of all or a part of its operating business or an investment therein; and Provide such other financial advisory and related services in connection with Tower's reorganization or business operations as maybe requested by Tower. The firm will receive an initial payment of $125,000 for the first month, $100,000 for the second month, $75,00 for the third month, and $100,000 for each month thereafter. Upon confirmation of a plan of reorganization the firm would receive incentive fee, the greater of 50% of the fee otherwise payable or 1% of the total enterprise value of reorganized Tower; plus expenses. The initial term of the agreement is for one month. TULTEX: May Not Have Enough Money To Pay Creditors -------------------------------------------------- Tultex Corp. may fall $150 million to $200 million short of paying its bankruptcy debts, company officials said. The clothing manufacturer filed for bankruptcy in December and has since ceased production and laid off 2,000 workers in Martinsville and Henry County. It also laid off 150 workers at a plant in Mayodon, N.C. The company is being broken up and sold to pay creditors. At a hearing Tuesday by the Office of the United States Trustee for those owed money by Tultex, the company said it has assets worth $427.4 million and debts of $338.7 million. The assets include real estate, machinery and inventory. The company listed the book value of many of its assets in coming up with the $427.4 million figure. But the book value - purchase price less depreciation - could be far higher than what a buyer would pay. Company officials and the creditors' lawyers said Tultex is likely to receive far less than the book value of its assets while trying to raise cash through liquidation. Bruce Matson, the company's lead bankruptcy lawyer, estimated Tultex might raise $138 million to $184 million. That amount would not cover money owed its largest secured creditors - banks and bondholders. That means thousands of laid- off workers, who didn't get paid for unused paid vacation days, won't be able to collect their money unless the banks and bondholders are paid in full first. Hundreds of businesses owed for products or services supplied to Tultex also won't get paid until the other debts are resolved. P. Woolard Harris Jr., acting chief executive of Tultex, said the company would look at all opportunities to maximize the return to creditors. UBIQUITEL OPERATING CO.: Moody's Assigns Ratings ------------------------------------------------ Moody's Investors Services assigned a Caa1 rating to UbiquiTel Operating Company's $150 million (gross proceeds) senior subordinated discount notes due 2010, a B3 senior unsecured issuer rating, and a rating of B2 to the company's $250 million senior secured credit facility. The senior implied rating is B2 and the outlook for the ratings is stable. The ratings incorporate the start-up nature (pre-network build- out and subscriber base) of the company's operations, the highly competitive environment of the wireless communications industry, and our expectation of negative cash flows over the next several years. The ratings also incorporate the strengths and weaknesses of the issuer's relationship to and agreements with Sprint PCS and reflect the positive performance to date of the PCS affiliate program. The rating on the discount notes recognizes its contractual subordination to any outstandings under the secured credit facility. The B2 rating on the bank credit facility considers that the collateral provides the lender with moderate protection in a distressed scenario given the company's early stage of development. UbiquiTel is the exclusive provider of Sprint PCS wireless services and products to a service area covering 7.7 million people in the western and mid-western United States. The company will provide wireless service in portions of California, Nevada, Washington, Montana, Southern Idaho, and Utah in addition to Southern Indiana and Kentucky. As with all Sprint PCS affiliate agreements, UbiquiTel does not own the wireless licenses it uses but leases the spectrum from Sprint on a long-term contract basis. The contract is for an initial period of 20 years with three automatic extensions for an aggregate life of up to 50 years. The affiliate is responsible for building out the network, signing subscribers, and managing the operations once complete. In return, Sprint receives an 8% fee on all of the affiliates' service revenues excluding handsets, accessories, and certain roaming revenues. The company's proposed $150 million notes offering, $250 million bank credit facility, and $150 million of new equity is expected to fully fund its business plan through network buildout with expected operating cash flow breakeven in 2003. By the end of 2001, the bulk of the network build-out will have been completed and consist of three switches and over 500 cell sites. To facilitate its rapid deployment schedule the company will use a combination of build-to-suit and co-location for cell sites coverage. In addition, the company will be developing 20 of its own Sprint PCS stores to help supplement Sprint's distribution channels. Moody's expects the development of a meaningful subscriber base to result in operating cash flow losses over the next several years and do not expect leverage to moderate below 5 times level until 2005. Moreover, Moody's is concerned about the lack of asset protection available to subordinated bondholders. UbiquiTel owns no spectrum, and its network assets will be pledged as collateral to the lenders under the bank credit facility. Based in Bala Cynwyd, Pennsylvania, UbiquiTel Inc. is the exclusive provider of Sprint PCS products and services in a territory covering 7.7 million people in the western and mid western United States. USTI: Court Approves Bid For Purchase of CPS Assets --------------------------------------------------- United Systems Technology, Inc. (OTC:USTI) announced that the Northern District of Texas US Bankruptcy Court approved USTI's bid for the purchase of certain assets of CPS Systems, Inc. ("CPS") at a Bankruptcy auction held on March 24th. USTI successfully bid $200,000 in cash for the CPS City Fund Accounting and Utility Billing source code, software support and licensing agreements for approximately 60 customers located in Texas and Oklahoma. The assets purchased also included the accounts receivable related to these customers as well as substantially all of the fixed assets of CPS in its Dallas office. The Company expects to close this transaction by the end of the month. USTI develops, markets and supports application software for local governments and rural water districts. The software applications operate in IBM midrange, network and single user PC platforms. USTI has over 1,700 installations nationwide. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. Debra Brennan, Yvonne L. Metzler, Edem Alfeche and Ronald Ladia, Editors. Copyright 2000. All rights reserved. ISSN 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. 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