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/raid1/www/Hosts/bankrupt/TCR_Public/000406.MBXT R O U B L E D C O M P A N Y R E P O R T E R Thursday, April 6, 2000, Vol. 4, No. 68 Headlines AIRPORT FITNESS: Retains Renaissance Partners AMEDISYS: Change Of Focus Due To Investment ATC GROUP: Court Confirms ATC Group's Chapter 11 Plan ATLAS MINERALS: Reports Fourth Quarter and 1999 Results BORDEN CHEMICALS & PLASTICS: Reports Decrease in Net Losses BOSTON CHICKEN: Counties and State Object To Plan BREED TECHNOLOGIES: Breed's Plan....To Buy Breed CANADIAN AIRLINES: Judge Approves Protection of US Assets CHS ELECTRONICS: Plans To Re-Invent as Internet Holding Co. CRAGAR INDUSTRIES: Reports Earnings For Year-End EVANS: Notice of Confirmation Hearing FIRST SECURITY: Moody's Reviews Ratings For Possible Downgrade FORE RIVER SHIPYARD: Government Argues For Control GUY'S FOODS: Family Snacks Inc. Liquidating Remaining Assets HANDY & HARMAN: Chapter 11 Filing For US Subsidiary HARNISCHFEGER: Valmet Hopes To Keep 200 Local Workers INCOMNET: Seeks To Extend Exclusivity and DIP Financing JITNEY JUNGLE: Albertson's Purchases 3 Stores JUST FOR FEET: To Dissolve Due to Insolvency LOEHMANN'S: Hearing to Consider Approval of Disclosure Statement LUMENYTE: Taps BDO Seidman as Accountants MIDTOWN ROCHESTER: Change of Venue Considered NIAGARA MOHAWK HOLDINGS: Annual Meeting Set For May 16, 2000 PACIFICARE HEALTH: John Kao Named President and CEO of Division PENNCORP FINANCIAL: Moody's Continues Review On Credit Ratings PRIME SUCCESSION: Revenues Decrease; Net Loss $18.3 Million PSI INDUSTRIES: Order Sets Hearing On Disclosure Statement SAFETY KLEEN: Announces Appointment of McNally As Interim CIO SAFETY KLEEN: Delays Second Quarter Earnings Report SANYO AUTOMOTIVE: Entry of Order Fixing Bar Date SERVICE MERCHANDISE: Financial Statement - January 2, 2000 SOLV EX: Company and Execs Found Guilty of Defrauding Investors TECTOY: Reduces Its Losses TERRA INDUSTRIES: Annual Meeting Set For May 2, 2000 VANGUARD AIRLINES: Annual Meeting Set For May 24, 2000 VISTA EYECARE: To Restructure Under Chapter 11 WILLCOX & GIBBS: Plan of Reorganization Confirmed ZENITH: Restructuring Complete, Improved Operating Results ********* AIRPORT FITNESS: Retains Renaissance Partners --------------------------------------------- Renaissance Partners, L.C. today announced that it has been retained by Airport Fitness, Inc., the creator of Airport based specialty fitness clubs serving airline crew, passengers and airport employees, to provide financial planning and strategic consulting services in connection with the Company's activities and to assist President and CEO, Mike Michno. Thomas H. Hicks, Renaissance Managing Partner, stated, "We are pleased to be serving the strategic and financial planning needs of Airport Fitness as it seeks to improve its concept and operations to better support anticipated future growth. Our firm has had experience in specialty retailing concepts over the past twenty years and we are particularly pleased to be assisting Mike Michno, his shareholders and his management team. Recent initiatives involving updating fitness equipment and adding both nutritional products and logo apparel to the offering have been instrumental in revenue increases at the Company's test prototype club at Pittsburgh International Airport". Renaissance Partners, L.C. provides profit improvement, turnaround consulting, business development and planning, crisis and interim management, financial re-structuring, bankruptcy, wind-down, CEO and CFO services. AMEDISYS: Change Of Focus Due To Investment ------------------------------------------- Amedisys, Inc., a Delaware corporation, is a multi-regional provider of home health care nursing services. The company operates 50 home care nursing offices, 3 ambulatory surgery centers, 4 home infusion therapy locations, and 2 corporate offices in the southern and southeastern United States. During 1999, the company changed its strategy from providing a variety of alternate site provider health care services to becoming a leader in home health care nursing services. The company's change of focus was largely attributed to its significant investment in this segment as a result of its acquisition of 83 home care offices from Columbia/HCA Healthcare Corporation in late 1998. A second major factor was that the governmental reimbursement changes in the Medicare system will allow home care the opportunity to be profitable after the Prospective Payment System ("PPS") is implemented in October 2000. The company lists its 1999 annual net revenue at $97,411 with a net gain, boosted by the disposition of assets, of $1,300. Its unaudited 1998 annual net revenue was shown to be $150,645 with a net loss of $41,453. ATC GROUP: Court Confirms ATC Group's Chapter 11 Plan ----------------------------------------------------- On Mar. 31, ATC Group Services Inc. won confirmation of its joint consolidated chapter 11 plan of reorganization. Judge Jeffry H. Gallet of the U.S. Bankruptcy Court in Manhattan approved the Manhattan-based environmental, engineering and business consulting firm's chapter 11 plan through the Bankruptcy Code's Section 1129(b) "cram down" provisions. Judge Gallet was required to use the cram down provisions because three impaired classes of shareholder claims and common and preferred shareholder interests, each which won't receive any property under the plan, were presumed to reject the plan. (The Daily Bankruptcy Review and ABI 05-Apr-2000) ATLAS MINERALS: Reports Fourth Quarter and 1999 Results ------------------------------------------------------- Atlas Minerals Inc. (OTC: ATMR) (formerly Atlas Corporation) reports net income of $2,496,000 or $2.05 per share for the year ended December 31, 1999 compared to a loss of $2,730,000 or $2.99 per share for the year ended 1998. The income included an extraordinary gain from extinguishment of debt of $9,199,000 and a charge of $3,349,000 for fresh-start adjustments, both related to the Company's successful reorganization under Chapter 11 of the U.S. Bankruptcy code. Before giving effect to these adjustments, the Company had an operating loss of $3,354,000 compared to an operating loss of $2,730,000 for 1998. The increase in the operating loss during 1999 is attributable to a decrease in revenues from $5,109,000 in 1998 to $3,485,000 in 1999. The decrease is due to a combination of lower grade ore mined and lower average metal prices in 1999 compared to 1998. In addition, 1998 revenues were higher due to a reduction of excess concentrate inventory from 1997, and 1999 revenues were slightly reduced by an increase in inventory during the year. Ore grades are expected to increase during 2000 as a larger percentage of ore will be mined from the higher grade San Juan/San Jose veins in 2000 than in 1999. Also increasing the loss in 1999 were reorganization expenses of $834,000 compared to $148,000 for 1998. For the fourth quarter of 1999 Atlas reported net income of $4,712,000 or $2.26 per share compared to a loss of $548,000 or $.60 a share for the same period in 1998. The fourth quarter net income includes the same extraordinary gain and fresh-start adjustments noted above. Before these adjustments, the Company had an operating loss of $1,138,000 or $.55 per share compared to a loss of $548,000 or $.60 share in the fourth quarter of 1998. Revenues for the fourth quarter of 1999 were $866,000, down from $1,616,000 in 1998. The decrease can also be attributed to the lower grades and metal prices discussed above as well as concentrate inventory fluctuations. Reorganization expenses were $536,000 in the fourth quarter of 1999 compared to $105,000 in 1998. Atlas Minerals Inc. is an international mining company with lead, zinc and silver operations in Bolivia, South America. BORDEN CHEMICALS & PLASTICS: Reports Decrease in Net Losses ----------------------------------------------------------- Borden Chemicals and Plastics Limited Partnership is a limited partnership formed in 1987 to acquire, own and operate polyvinyl chloride resins ("PVC"), methanol and other chemical plants located in Geismar, Louisiana, and Illiopolis, Illinois, that were previously owned and operated by Borden, Inc. The company's three principal product groups are (i) PVC Polymers Products, which consist of PVC resins and feedstocks (such as vinyl chloride monomer ("VCM") and acetylene), (ii) Methanol and Derivatives, which consist of methanol and formaldehyde, and (iii) Nitrogen Products, which consist of ammonia and urea. During 1999, PVC Polymers Products, Methanol and Derivatives and Nitrogen Products accounted for 73%, 19% and 8%, respectively, of the company's revenues. Those net revenues were stated to be $554,183 with a net loss of $23,991. In 1998 net revenues were $535,527 and net losses $40,607. BOSTON CHICKEN: Counties and State Object To Plan ------------------------------------------------- Travis County objects to the Plan. The County claims the Debtors owe the County property tax and the Plan does not provide for the payment plus interest. City and County of Denver complain that the City was not given notice of debtor in possession financing motions and orders, nor orders approving adequate protection payments to 1996 Lenders or other special provision for 1996 Lenders which are referred to in the disclosure statement. Denver asserts that money from the purchase should not be dispersed to the 1996 Lenders until all of Denver's personal property and real estate tax liens have been satisfied. Denver believes that the Debtors owe Denver Sales Tax for the operation of restaurants, Occupational Privilege and Business Privilege Taxes and Personal property taxes. Denver says it is unclear whether any of these taxes are assumed by the purchaser and reminds the court that to the extent they are not assumed they must be paid from the proceeds of the sale. County of Denton, County of Williamson, City of Cedar Park, Leander Independent School District together file an objection to the Plan on the following grounds: * The secured claims of the claimants are impaired; * The plan fails to provide fair and equitable treatment to the secured claims; * The plan is ambiguous as to whether the claims are to be treated as Priority Tax Claims or Other Secured Claims; * Taxes for the 2000 tax year must be expressly designated as a post-confirmation debt, to be timely paid, or be subject to state court collection without recourse to the Bankruptcy Court; * The Plan failed to provide for interim interest. State of New Jersey, Division of Taxation objects to the Plan because: * While the N.J. has filed priority tax claims against the Debtors, the Plan prohibits payment of any post-confirmation interest which accrues on tax claims; * The Debtors have not filed various tax returns; * The Plan provides for the continuation of the automatic stay till the Effective Date and bars any creditor from attempting to collect any claims; * The Plan failed to provide for state court remedies in the event of default. (Boston Chicken Bankruptcy News Issue 11; Bankruptcy Creditors' Services Inc.) BREED TECHNOLOGIES: Breed's Plan....To Buy Breed ------------------------------------------------ Automotive News reports on April 3, 2000, that Johnnie Breed and a partner hope to create a $1 billion minority-owned supplier by acquiring the assets of Breed Technologies Inc., a major airbag supplier that filed for Chapter 11 creditor protection last September. An investor group led by Johnnie Breed, CEO of Breed Technologies, and Ernie Green, CEO of EGI Inc., have submitted a bid to purchase substantially all of the assets of Breed Technologies, the world's third-largest maker of airbags. Details of the bid were not disclosed. Green would be co-chairman and CEO of the firm, with a 50.1 percent stake. Johnnie Breed and a group of investors would own the remainder; she would act as co-chairman and be responsible for global business development and diversification. A combination of EGI and Breed Technologies' $891 million in North American revenues last year could create a $1 billion supplier of airbags, seat belts, inflators and electronics. Automotive News ranks Breed as the 40th-largest supplier of original-equipment parts to North America. The move by Breed and Green appears to have postponed a decision expected last month on bids from safety restraint system suppliers Autoliv Inc. and Delphi Automotive Systems Corp. The committee of Breed Technologies creditors and the court will decide the successful bidder. To some analysts, the financing of such a bid by Breed and Green remains a question. CANADIAN AIRLINES: Judge Approves Protection of US Assets --------------------------------------------------------- U.S. Bankruptcy Judge Lloyd King has granted Canadian Airlines' request for protection of its assets in the United States. The request was an "ancillary" action to the airline's reorganization efforts in Canada. The airline on March 24 filed for protection from its creditors under a Canadian law similar to a Chapter 11 bankruptcy in the United States. It filed for ancillary protection in Honolulu on the same day, saying most of the company's holdings outside Canada are in Hawaii. Attorneys for the airline told King the company could be irreparably harmed if creditors in the United States ignore Canadian authority and try to reclaim their property. Canadian Airlines, the second-largest carrier in Canada, has 127 employees in Honolulu. It has cargo facilities, administrative offices, ticket and service counters, and other facilities and equipment. Canadian Airlines was acquired by Air Canada, Canada's largest airline, in January. However, Air Canada did not assume the smaller company's debts. CHS ELECTRONICS: Plans To Re-Invent as Internet Holding Co. ----------------------------------------------------------- According to a report in the Sun-Sentinel (Fort Lauderdale, FL) on April 5, 2000, CHS Electronics, hopes to emerge from bankruptcy this summer in a new form as a company that would develop Internet e-commerce ventures. The Miami-based computer wholesaler said creditors representing about $ 275 million in claims, or more than half of total claims, already have agreed to back its reorganization proposal -- the latest step in a more than yearlong effort to halt massive losses amid tough global competition. The reorganization plan centers on CHS selling off its few remaining European units and on creditors getting part of the company that would buy those European assets. CHS by then would have divested nearly all of its global empire and would reinvent itself as an incubator and holding company for Internet firms focused on business-to-business sales, said Chairman Claudio Osorio. "We're hoping we can get the plan confirmed by Aug. 21," said Tom Lehman, the attorney handling the CHS bankruptcy case. "We hope to put it on as fast a track as possible." The Chapter 11 filing is a dramatic turnaround for a company that bought up computer distributors worldwide in the mid-1990s and by 1998, became one of the few South Florida businesses on the Fortune 500 list of top-selling U.S. firms. But analysts say CHS ran into trouble because of new competition that squeezed profit margins, plus insufficient management controls to handle its speedy growth. Accounting problems in Europe, for example, forced the company to deduct $ 45 million from 1998 earnings and eroded credibility on Wall Street. In the first nine months last year, despite nearly $ 7 billion in sales, CHS lost more than $ 314 million. Its stock price has plummeted more than 80 percent in the past year to close Tuesday at 69 cents. Key to the reorganization are plans to sell CHS's still profitable European units to Europa IT, a newly formed venture led by former CHS Chief Operating Officer Mark E. Keough. Creditors would get $ 67.5 million in Europa IT securities plus 15 percent of its common stock and 25 percent of the common shares of the reorganized CHS. In addition, CHS would get 5 percent of Europa IT's common shares, according to the proposal submitted in U.S. Bankruptcy Court in Miami. CHS has listed among its major creditors: IBM Credit Corp., which helped finance European sales, owed about $ 64 million; computer maker Seagate Technology, owed about $ 58 million; New York software company Computer Associates International, a bond holder, owed about $ 40 million; and banker Morgan Stanley Dean Witter Asset Management, a bondholder, owed about $ 38 million. Doreen Hemlock can be reached at dhemlock@sun-sentinel.com or 305-810-5009. CRAGAR INDUSTRIES: Reports Earnings For Year-End ------------------------------------------------ Cragar Industries, Inc. (OTC Bulletin Board: CRGR) today reported earnings for the year ended December 31, 1999 of $54,678 compared to a loss for the year ended December 31, 1998 of $3,971,442. "By focusing our efforts on replacing lost sales from Super Shops, our then largest customer that went bankrupt in late 1997, and by reducing operating costs, the Company improved its bottom line by over $4.0 million during 1999," commented Michael L. Hartzmark, Chairman and CEO of Cragar. "More importantly for our long term success, we transformed the Company's business strategy by consummating two licensing transactions during the fourth quarter of 1999." "In October 1999, we granted an exclusive worldwide license to Weld Racing, Inc. to manufacture, sell, and distribute our line of wheels manufactured with non-cast wrought aluminum alloy outer rims and related accessories. In December 1999, we granted an exclusive worldwide license to Carlisle Tire & Wheel Co., Inc. to manufacture, sell, and distribute our line of wheels manufactured with steel outer rims and related accessories." "These transactions have dramatically changed the nature of our business. As a result of these transactions, Cragar will no longer engage in the manufacture, marketing, sale or distribution of the specified licensed products. The outsourcing of the manufacturing, marketing, sales and distribution operations with respect to the licensed products, together with the sale of the related assets, will result in a substantial decrease in Cragar's revenues and related operating, overhead, sales and marketing costs. We expect the decrease in revenues to be replaced by a stream of royalty payments generated by net sales of the licensed products by Cragar's licensing partners. In addition, Cragar is entitled to royalties based on net sales of certain new CRAGAR brand name products developed by Carlisle and Weld." "As part of Cragar's new business strategy, Cragar also intends to pursue licensing opportunities for Cragar's remaining line of one-piece aluminum cast wheels and other aftermarket performance automotive products through the utilization of the CRAGAR brand name. Toward that end, Cragar is evaluating various professional licensing companies to possibly engage one of them to develop and/or implement a full-blown licensing strategy." "Finally, in November 1999, Cragar purchased an equity stake in Wrenchead.com (http://www.wrenchead.com),a start-up e-commerce company. Cragar also negotiated an option to increase its stake in Wrenchead.com in the near term. Wrenchead.com is a provider of e-commerce tools for both business- to-consumer and business- to-business for the automotive aftermarket. Wrenchead.com offers for sale more than 1.5 million brand name auto and truck parts, accessories, performance products, and consumer merchandise. Wrenchead.com services 'do it yourselfers' and professional mechanics with installation, maintenance and repair expertise. Lead investors in Wrenchead.com include Polaris Venture Partners, SFX Entertainment and CBS. Wrenchead.com is headquartered in White Plains, New York." Cragar Industries, Inc. is an international licensor of custom wheels and wheel accessories for cars, trucks, vans, sport utility vehicles, racing vehicles, and motorcycles. EVANS: Notice of Confirmation Hearing ------------------------------------- On March 14, 2000, the Honorable Jeffry H. Gallet entered an order approving the Disclosure statement of Evans, Inc., et al. A hearing to consider the confirmation of the plan shall be held on May 8, 2000 at 10:30 AM. FIRST SECURITY: Moody's Reviews Ratings For Possible Downgrade -------------------------------------------------------------- Moody's Investors Service has placed under review for possible downgrade the senior debt rating of First Security Corporation (FSCO) at A2 and the subordinated debt rating of Zions Bancorp (Zions) at A3. The rating agency also placed under review for possible downgrade the A1 deposit ratings of Zions First National Bank and First Security Bank, N.A. Moody's cited the termination of the merger agreement between FSCO and Zions as the reason for its rating action. According to Moody's, management at both companies have been distracted by the considerable delays and the ultimate failure of the planned merger. Moody's added that a combination of the two banking organizations would have strengthened their individual market shares in Utah and Idaho (notwithstanding required branch divestitures) and would have broadened positions in other healthy markets throughout the West. In December 1999 Moody's had upgraded ratings at both companies based on the benefits of product diversification, improved market shares, and cost efficiencies. The transaction was expected to close by year-end 1999. The review will focus on the companies' strategic responses to the recent termination of the merger. The following ratings are under review for possible downgrade: Zions Bancorp -- The A3 subordinated debt rating. Zions First National Bank - The A1 long-term deposits rating; the A1 long-term issuer rating; the A1 other long-term senior obligations rating; the A2 junior subordinated debt rating; and the C+ bank financial strength rating. The Prime-1 short-term deposit rating and the Prime-1 rating on other short-term senior obligations were confirmed. California Bank & Trust - The A1 long -term deposits rating; the A1 long-term issuer rating; and the A1 other long-term senior obligations rating. The Prime-1 short-term deposit rating, the Prime-1 rating on other short-term senior obligations and the D+ bank financial strength rating were confirmed. Zions Institutional Capital Trust A - The "a2" preferred stock rating. First Security Corporation - The A2 senior unsecured debt rating; the A2 senior unsecured medium-term notes rating; the A3 subordinated debt rating; the A3 subordinated medium-term notes rating; the A3 junior subordinated debt rating; the (P)A2 senior unsecured shelf rating; the (P)A3 subordinated shelf rating; the (P)A3 junior subordinated shelf rating; the (P)"a2" preferred shelf rating; and the (P)"a3" preferred shelf rating. First Security Capital I -- The "a2" preferred stock rating. First Security Capital II -- The (P)"a2" preferred shelf rating. First Security Capital III -- The (P)"a2" preferred shelf rating. First Security Capital IV -- The (P)"a2" preferred shelf rating. First Security Capital V -- The (P)"a2" preferred shelf rating. First Security Bank, N.A. -- The A1 rating on the bank for its long-term deposits; the A1 rating on senior unsecured debt; the A1 rating on senior unsecured medium-term notes; the A1 rating on the bank's senior unsecured bank note program; the A1 long-term issuer rating; the A1 rating on other long-term senior obligations; and the B bank financial strength rating. The Prime- 1 short-term bank note program rating; the Prime-1 short-term deposit rating; and the Prime-1 rating on other short-term senior obligations were confirmed. First Security Bank of New Mexico, N.A. -- The A1 rating on the bank for its long-term deposits; the A1 long-term issuer rating; and the A1 rating on other long-term senior obligations. The Prime-1 short-term deposit rating; the Prime-1 rating on other short-term senior obligations; and the C bank financial strength rating were confirmed. First Security Corporation and Zions Bancorp are both headquartered in Salt Lake City, Utah. FORE RIVER SHIPYARD: Government Argues For Control -------------------------------------------------- The Patriot Ledger (Quincy, MA) reports on April 1, 2000 that U.S. Bankruptcy Court Judge William C. Hillman agreed to hold a hearing on Tuesday and listen to the federal government argue that it should take complete control of the Fore River Shipyard in Quincy. A Justice Department motion made available Friday sharply criticizes the two joint companies that failed in an $ 80 million bid to renovate the shipyard and asks Hillman to quickly give the government control of the facility to avoid deterioration and to settle debts. Timothy Jaroch, an attorney and officer for the would-be shipyard developers, Massachusetts Heavy Industries and MHI Shipbuilding, did not respond to the motion. His office said he could not be reached for comment. At least $ 13.7 million in high-tech shipbuilding equipment brought to the shipyard is exposed to the elements and could already be damaged, the Justice Department said. Acting on behalf of the U.S. Maritime Administration, which MHI owes $ 47 million, the Justice Department in its motion also said hazardous waste has been stored at the shipyard for at least 18 months in violation of federal law; electrical hazards exist; and insurance on the property has lapsed. Hillman is also scheduled to act Tuesday on a request by a bankruptcy trustee to liquidate MHI and MHI Shipbuilding. Both companies filed for Chapter 11 bankruptcy protection on March 13. Even if MHI were given back control of the shipyard, the company and MHI Shipbuilding are unable to organize their finances and operate it, the Justice Department said. In a deposition supporting the motion, the deputy chief of the Maritime Administration, John E. Graykowski, asserts that both companies are broke. "MHI and MHI Shipbuilding have depleted all of their funds," Graykowski said. "They have no assets other than the shipyard. The shipyard is not in operation and there are no accounts receivable or any prospective revenue. (They) don't constitute an ongoing business. They have no unencumbered assets, no cash, no employees, no viable contracts, no commitments from prospective purchasers, no way to generate revenue to pay for their expenses and no viable source of funds." MHI and MHI Shipbuilding were evicted from the shipyard on Feb. 25. The government stopped repairs on the facility when the companies filed for bankruptcy protection. The Maritime Administration also signed an agreement not to examine documents at the shipyard until a court grants access to them. U.S. Attorney David S. Klontz in his motion said the Maritime Administration believes the bankruptcy petitions were filed "for the purposes of delaying (the Maritime Administration) from taking unfettered possession of the shipyard, further delaying (its) examination of the corporate records and selling the property at foreclosure -- and not for the purpose of reorganizing these defunct companies." The Maritime Administration says the shipyard is valued at $ 41 million to $ 46 million, basing the assessment on an estimate by MHI's chief financial officer, James Dunkel. Along with the $ 47 million owed the Maritime Administration, MHI owes Massachusetts Development Financing Agency $ 10 million, the city of Quincy $ 9.2 million and the Massachusetts Water Resources Authority $ 8.2 million. The Justice Department said the hazardous waste at the shipyard includes PCBs and a garbage container bearing lead. GUY'S FOODS: Family Snacks Inc. Liquidating Remaining Assets ------------------------------------------------------------ Counsel to the Committee of Guy's Foods, Mark Shaiken, corrects a previously reported inaccurracy.(TRW 04-Apr-00) He states that Family Snacks Inc. is the Chapter 11 debtor, doing business under the name of Guy's Foods. The buyer formed Guy's Foods Acquisition and purchased the assets of FSI. The purchaser then negotiated a deal with the members of the United Food and Commercial Workers Local 211 for the purchaser's benefit. FSI remains in chapter 11 and will not be emerging. It is liquidating its remaining assets not purchased. HANDY & HARMAN: Chapter 11 Filing For US Subsidiary --------------------------------------------------- On Wednesday 29 March 2000, Golden West Refining Corporation Limited, announced that its United States' subsidiary Handy & Harman Refining Group, Inc. ("HHRG") had made an application under Chapter 11 of the US Bankruptcy Act to the District Court of Connecticut. At a hearing on Monday 3 April 2000, certain unsecured creditors challenged the title to metal claimed by secured creditors at the Attleboro facility where high grade precious metals are refined. Orders were made by the Court restricting the movement of material into and out of the refinery until the question of title to metal can be resolved. It is expected that further hearings will be held over the next two weeks. As a result of the ongoing investigations and review of operating performance a number of significant operational decisions have been taken. As soon as possible, subject to the outcome of the Court hearings, it is the intention to reopen the company's high grade refinery at Attleboro. Funding lines have been negotiated to allow the refinery to operate whilst in Chapter 11 on a full metal advance or cash settlement basis. As a result of continuing operating losses in low-grade material processing, it is proposed that HHRG will immediately close its operation at South Windsor and undertake an orderly sale of this facility. HHRG will also pursue the orderly sale of its other low-grade facilities or alternatively these will be closed. Tony Pearce has resigned as President and Chief Executive Officer of HHRG. He was orginally appointed by GWRC in January 2000 to strengthen management and oversee restructuring of HHRG's businesses. This role has changed dramatically with the events of the last two months and the Chapter 11 filing. The Board of GWRC is most appreciative of Tony's contribution in very difficult circumstances. Management responsibility for HHRG will be assumed by its directors being Sean Russo and Mike Ryan with the latter acting as President. They are assembling a management team to deal with operational and financial issues during the Chapter 11 process. It is proposed to engage, subject to Court approval, Seneca Financial Group, Inc. of Greenwich, Connecticut to provide support to management and act as advisors with respect to a plan of reorganisation under Chapter 11 and the disposal of assets. HARNISCHFEGER: Valmet Hopes To Keep 200 Local Workers ----------------------------------------------------- Contingent on the U.S. Department of Justice's approval of Valmet's purchase of Beloit Corp. assets, Valmet announced that it hopes to continue 200 local workers on its payroll. Beloit Corp. is owned by Harnischfeger Industries, of suburban Milwaukee, which filed for bankruptcy protection in June. Harnischfeger announced in September it intended to sell off the five subsidiaries of Beloit Corp., including operations in Beloit and Rockton. Valmet, based in Finland, and one of Beloit Corp.'s top competitors in the paper making and pulping industry, was the top bidder for the subsidiary involving local Beloit Corp. workers. Plans call for employing more than 300 workers overall in the after-sales service area in Beloit, which would allow the company to service Beloit Corp. and Valmet paper, board and tissue customers. INCOMNET: Seeks To Extend Exclusivity and DIP Financing ------------------------------------------------------- The debtor, Incomnet, Inc. seeks to extend the period during which the debtors shall have exclusive rights to file plans of reorganization. Incomnet filed its initial plan on January 31, 2000 and the confirmation hearing is now set for May 9, 2000. Incomnet asks that the exclusivity periods be extended until May 31, 2000, to allow for the confirmation hearing date. By separate motion the debtor seeks an extension of its DIP Financing until May 31, 2000 because the debtor does not expect to emerge from bankruptcy substantially before May 31, 2000. JITNEY JUNGLE: Albertson's Purchases 3 Stores --------------------------------------------- Albertson's, Inc., (NYSE:ABS) has purchased three stores from Jitney Jungle Stores of America, Inc., pursuant to the order of the U.S. Bankruptcy Court for the Eastern District of Louisiana in which the chapter 11 cases of Jitney Jungle Stores of America, Inc., et al. are pending. The stores, located in the greater Memphis, Tennessee metropolitan area, will open Wednesday, April 5, 2000, under the Seessel's banner. Peter Lynch, president and chief operating officer of Albertson's, said, "These stores are a great fit with our existing stores in Tennessee. We've been part of the Memphis market since 1998 when we purchased the 10-store Seessel's chain. This purchase creates a great opportunity for us to fill in an existing market. With the addition of these three new stores, we'll operate 16 stores in the Memphis area and we plan to keep growing in this market. "These stores are large stores that will allow us to make the most of our customer-focused initiatives. Each store will be merchandised specifically for the neighborhood it serves. We are excited about the opportunities these new stores provide to better meet the needs of their neighborhoods," concluded Mr. Lynch. Albertson's, Inc., is one of the largest retail food and drug companies in the United States. Based in Boise, Idaho, the Company currently operates almost 2,500 retail stores in 37 states across the United States. JUST FOR FEET: To Dissolve Due to Insolvency -------------------------------------------- On March 21, 2000 the US Bankruptcy Court for the District of Delaware entered an order converting the case to a Chapter 7 bankruptcy effective as of March 27, 2000. Just for Feet, which reports assets of $142.5 million and debts of $448.5 million, has been in business in Birmingham since 1977. A permanent trustee will be appointed to oversee the corporation's dismantling. McKelvie has scheduled an April 19 conference for an update on the proceedings. In February, Mahwah, N.J.-based Footstar Inc. bought 102 Just For Feet stores, the headquarters building and other assets for $72 million in an auction of the failing company's assets. Some workers at the company's headquarters were offered jobs with Footstar in Dallas or Mahwah, others were let go. LOEHMANN'S: Hearing to Consider Approval of Disclosure Statement ----------------------------------------------------------------- On March 24, 2000, Loehmann's, Inc. filed a plan of reorganization and Disclosure Statement accompanying the plan. A hearing will be held on April 24, 2000 at 11:30 AM before the Honorable Mary F. Walrath in the US Bankruptcy Court for the District of Delaware, 824 market Street, 6th Floor, Wilmington, Delaware to consider the adequacy of the information contained in the Disclosure Statement. LUMENYTE: Taps BDO Seidman as Accountants ----------------------------------------- Lumenyte International Corporation, debtor, seeks court authority to employ the accounting firm of BDO Seidman, LLP as accountants and consultants for the estate. The firm will provide the following services: Evaluate the debtor's assets and liabilities for the purposes of restructuring; Assist the debtor in preparing complex projections in the context of a Chapter 11 plan of reorganization; Communicate with taxing authorities on behalf of the estate; Perform any such other services as may be required to resolve any tax-related matters in which the estate may be involved. All compensation shall be approved by the court. MIDTOWN ROCHESTER: Change of Venue Considered --------------------------------------------- The Rochester Business Journal reports on March 17, 2000 that a California judge will determine whether to send the Midtown Rochester LLC bankruptcy to New York. Judge John Ninfo II conferred with James Barr, the California judge now handling the Midtown bankruptcy. Put into bankruptcy in January by its California-based owner, developer Peter Arnold, the struggling Rochester plaza has long been regarded as central to the city's downtown. Last year, it was named as a leading candidate among several sites for a proposed performing arts center. County and city officials together are avidly pursuing the artscenter project. But by putting any action concerning Midtown on hold, the bankruptcy throws an obvious stumbling block in its way. In a preliminary ruling from the bench last week, Barr said he was willing to send a least parts of the Midtown case here. But at present it remains in his court, with decisions as to whether any part comes here solely up to him. The details of Judge Barr's ruling have yet to be firmed up in a written order. According to a source familiar with the case, the California judge stated that he had conferred with Judge Ninfo, and had indicated that further talks could lead to modifications in details he had preliminarily outlined. Among provisions of the preliminary ruling: * For the-time being, all claims will be handled by the California court. * Issues the judge said he intends to send here include valuation of the 1 million square-foot Midtown property, landlordtenant disputes and anything else that can be shown to be of primarily local concern. * Arnold is directed to inform creditors in writing that they can ask Barr to send matters here for consideration on a caseby-case basis. * Arnold's failure to submit a plan within the 30 days required under Bankruptcy Code rules could result in the entire case's immediate transfer to Rochester. Arnold filed a Chapter 11 petition seeking protection from creditors for Midtown days before the plaza's chief mortgage holder, Blackacre Bridge Capital LLC, won a foreclosure order in state Supreme Court here. NIAGARA MOHAWK HOLDINGS: Annual Meeting Set For May 16, 2000 ------------------------------------------------------------ The annual meeting of stockholders of Niagara Mohawk Holdings, Inc. is scheduled to be held on Tuesday, May 16, 2000, at 10:30 a.m. (EDT), at The Onondaga County Convention Center, 800 South State Street, Syracuse, New York. This year stockholders will be asked to elect four directors to Class III, Lawrence Burkhardt, III, John H. Dalton, William J. Donlon, and Stephen B. Schwartz to serve in Class III for a 3- year term expiring at the 2003 anual meeting; and to vote on a shareholder proposal that the company endorse the CERES Principles. Presentation of a report on Niagara Mohawk's Past performance and on other matters of current interest will be presented to the shareholders. The Board of Directors has fixed the close of business on March 20, 2000, as the record date for the purpose of determining shareholders who are entitled to notice and to vote at the meeting. PACIFICARE HEALTH: John Kao Named President and CEO of Division --------------------------------------------------------------- PacifiCare Health Systems, Inc. (Nasdaq: PHSY) announced today that John Kao, 38, has been named president and CEO of its Specialty Services division and new e-commerce company, PacifiCare Ventures. The promotion is effective immediately, with Kao reporting to PacifiCare Health Systems' president and CEO, Alan Hoops. Kao replaces Jeff Folick, 52, interim head of the Specialty Services division, who retired today. Kao will lead the expansion of PacifiCare's Specialty Services division, which includes Prescription Solutions, a pharmacy benefits management subsidiary; PacifiCare Behavioral Health, a supplier of mental health benefits coverage; and PacifiCare Dental, an indemnity and managed care insurance company supplying dental and vision benefits. In his new capacity, Kao also will be responsible for developing strategy and plans to increase PacifiCare's presence in the growing e-commerce health care arena. The new e-commerce division, which will be a separate operating unit of the company called PacifiCare Ventures, will develop strategies and technology business partnerships with venture capitalists, technology companies and various health care entities through joint ventures and capital investments. The company's goal is to offer new products or services that will enhance PacifiCare's relationships with members, employer customers or contracting physicians, and create additional value for its shareholders. Kao previously served as chief financial officer of PacifiCare's Secure Horizons USA (SHUSA) from 1998 to 1999. PENNCORP FINANCIAL: Moody's Continues Review On Credit Ratings -------------------------------------------------------------- Moody's Investors Service continues to review the Caa3 subordinated debt rating of PennCorp Financial Group, Inc., (PennCorp), and the B2 insurance financial strength rating of its wholly owned subsidiary, Southwestern Life Insurance Company (Southwestern Life), for possible upgrade. PennCorp's preferred stock rating was confirmed at "ca". Moody's commented that although PennCorp's previously announced sale of Southwestern Life and another subsidiary to Reassure America Life Insurance company would not proceed, an alternative recapitalization plan - - if completed as specified -- would still significantly reduce PennCorp's debt and financial leverage, relieving some of the debt service pressures on Southwestern Life. The new plan, proposed by Inverness/Phoenix Capital LLC and Vicuna Advisors, LLC, and others, on behalf of the unofficial ad hoc committee of preferred stockholders, was approved by PennCorp's Board of Directors and is conditional upon, among other things, PennCorp's completion of a $95 million credit facility; an annuity reinsurance transaction with a third party reinsurer; and final regulatory and other approvals. According to the rating agency, the rating review will focus on the completion, as stated, of all of conditions under the new capitalization agreement; the ultimate debt and leverage position of PennCorp; the financial condition of Southwestern Life and its subsidiary at the time the transaction is consummated; finally, the ability of these subsidiaries to service remaining holding company debt. PennCorp Financial Group, Inc. is a Delaware-registered insurance holding company. Southwestern Life Insurance Company is a wholly owned life insurance subsidiary located in Dallas, Texas. At December 31, 1999, Southwestern Life reported statutory assets of $1.5 billion, and statutory capital and surplus of $113 million. Visit our website at www.moodys/insurance.com PRIME SUCCESSION: Revenues Decrease; Net Loss $18.3 Million ----------------------------------------------------------- Prime Succession Inc. is the fifth largest provider of funeral home and cemetery merchandise and services in the United States. In addition to providing merchandise and services at the time of need, the company also makes funeral, cemetery and cremation arrangements on a pre-need basis. The company through its subsidiaries owns or operates 141 funeral homes and 19 cemeteries in 19 states, primarily in non-urban areas. Consolidated revenues decreased to $90.5 million in 1999 from $98.0 million in 1998. Funeral service revenues increased 0.4% to $74.6 million from $74.3 million in 1998 and cemetery revenues decreased 32.9% to $15.9 million from $23.7 million in 1998. Consolidated operating income decreased from $17.6 million in 1998 to $8.2 million in 1999. Funeral revenues increased primarily as a result of an increase in services performed. Cemetery revenues decreased primarily due to a substantial reduction in prearranged sales of property, merchandise and services. Net loss for 1999 was $18.3 million; in 1998 net loss was $6.9 million. PSI INDUSTRIES: Order Sets Hearing On Disclosure Statement ---------------------------------------------------------- A disclosure statement and plan were filed on February 15, 2000 by PSI Industries, Inc. The court has set a hearing to consider approval of the disclosure statement for April 20, 2000 at 3:30 PM. The deadline for objections to the Disclosure Statement is April 13, 2000. SAFETY KLEEN: Announces Appointment of McNally As Interim CIO ------------------------------------------------------------- Safety Kleen, Inc. announces the appointment of David B. McNally as interim Chief Information Officer (CIO). McNally is a senior executive with Jay Alix & Associates of Southfield, Michigan, a nationally recognized firm specializing in corporate turnarounds and financial restructuring that was recently retained by Safety- Kleen. "In appointing Dave McNally as CIO, we continue our efforts to bring in top executives who have significant experience working with companies that have had operating and financial difficulties similar to those facing Safety-Kleen," said David E. Thomas, Jr., Chairman of the Safety-Kleen Board's Executive Committee. "Dave McNally has more than 18 years experience in solving complex information technology (IT) problems, including technology integration and accounting systems issues similar to those presented by the Safety-Kleen-Laidlaw Environmental Services merger." McNally has previously filled top IT positions for such companies as Lear Corporation, United Technologies and Brush Wellman, and has led successful multi-national IT projects in Europe and Asia. He has an MBA degree in Management Information Systems from Drexel University, an undergraduate degree in Communications from the Pennsylvania State University, and is a Certified Public Accountant. "Safety-Kleen certainly faces some IT challenges, as do many companies that have a workforce in multiple locations," McNally said "but I am confident that they are manageable and that we can develop an effective IT program to address our short-term needs and provide for the company's long-term stability." SAFETY KLEEN: Delays Second Quarter Earnings Report --------------------------------------------------- Safety-Kleen Corp. has delayed releasing its second-quarter earnings report indefinitely. "In light of the company's ongoing investigation of accounting irregularities, we are simply not prepared to issue an earnings statement at this time," Jack McGregor, the company's interim chief financial officer, said Tuesday. The troubled waste disposal and recycling company announced last month that accounting irregularities would require it to restate earnings for the past three years. The company also announced Tuesday that David B. McNally was named interim chief information officer. He is a senior executive with Jay Alix & Associates of Southfield, Mich., which specializes in corporate turnarounds. "McNally has more than 18 years experience in solving complex information technology problems," said David E. Thomas Jr., chairman of Safety-Kleen's executive board. Safety-Kleen has said it would sell its former headquarters building in Elgin, Ill., and had arranged short-term financing to help it fund continuing operations. The Columbia-based company operates a landfill at Pinewood near Lake Marion. Safety-Kleen shares closed down 18 3/4 cents at $1 a share in trading Tuesday on the New York Stock Exchange. SANYO AUTOMOTIVE: Entry of Order Fixing Bar Date ------------------------------------------------ The US Bankruptcy Court, Eastern District of New York, entered an order dated March 14, 2000 requiring all parties that assert a claim against Sanyo Automotive parts, Ltd. And ABS Brakes, Inc. which arose prior to May 28, 1999 to file a written proof of claim with the US Bankruptcy Court for the Eastern District of New York so that it is actually received no later than 4:30 PM on or before April 21, 2000. SERVICE MERCHANDISE: Financial Statement - January 2, 2000 ----------------------------------------------------------------- SERVICE MERCHANDISE COMPANY, INC. CONSOLIDATED BALANCE SHEETS In thousands of dollars --------------------------------- JANUARY 2, 2000 --------------- TOTAL CURRENT ASSETS 746,894 TOTAL ASSETS $ 1,161,944 TOTAL CURRENT LIABILITIES 322,016 TOTAL LONG-TERM LIABILITIES 101,014 TOTAL LIABILITIES 1,179,005 TOTAL SHAREHOLDERS' (DEFICIT) EQUITY (17,061) TOTAL LIABILITIES AND SHAREHOLDERS'(DEFICIT) EQUITY $1,161,944 SERVICE MERCHANDISE AND COMPANY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS In thousands of dollars ------------------------------------- FISCAL YEAR ENDED JANUARY 2, 2000 Net earnings (loss) $ 21,474 SERVICE MERCHANDISE AND COMPANY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS In thousands of dollars ------------------------------------- Fiscal Year Ending JANUARY 2, 2000 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: 192,639 NET CASH PROVIDED BY FINANCING ACTIVITIES (304,635) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (72,158) CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 133,749 CASH AND CASH EQUIVALENTS - END OF YEAR $61,591 SOLV EX: Company and Execs Found Guilty of Defrauding Investors --------------------------------------------------------------- A federal judge has found Albuquerque-based Solv-Ex Corp. and two of its officers guilty of defrauding investors. U.S. District Judge Bruce Black ruled Friday that Solv-Ex, Chief Executive Officer John S. Rendall and Vice President Herbert M. Campbell engaged in a pattern of issuing fraudulent statements that overstated the company's development of technology for extracting oil. Solv-Ex's chief financial officer, Frank Ciotti, said today the company had not yet issued a statement. The ruling was being reviewed by Solv-Ex's legal counsel, and the company would not say anything until that is completed, he said. The ruling means the firm, Rendall and Campbell could face civil penalties of several thousand dollars each. Solv-Ex has said it has developed a process to extract a tarlike substance called bitumen, which can be refined into crude oil, from oil sands in Alberta, Canada. "Collectively read, the (company) press releases, shareholder letters and other statements ... created the false impression that Solv-Ex was on the verge of generating revenues," Black wrote. "In fact, the evidence demonstrates that at the time these statements were disseminated, Solv-Ex was in various stages of research and development ... but that commercial exploitation of any of them was never more than a theoretical possibility," the judge wrote. The U.S. Securities and Exchange Commission sued Solv-Ex in July 1998, contending the company, Rendall and Campbell made numerous misleading statements about the company from January 1995 to April 1997. During that period, Solv-Ex's shares rose to about $38 from $5. Solv-Ex filed for bankruptcy protection in 1997 under Chapter 11, which protected it from any threat of creditor lawsuits pending a reorganization. Solv-Ex emerged from Chapter 11 in 1998. The SEC alleged the company, Rendall and Campbell said Solv-Ex would be producing 100,000 barrels a month by spring 1997. Black's ruling said Rendall controlled all aspects of Solv-Ex's business and was responsible for its misleading statements. Campbell had access to all company information, but chose to omit anything unflattering when he wrote news releases, the judge said. The judge ruled Solv-Ex and Rendall violated the anti-fraud and issuer-reporting provisions of SEC rules and that Campbell violated the anti-fraud provisions and aided and abetted Solv- Ex's reporting violations. The SEC will seek civil penalties against the company and the two officrs, said Katherine Addleman, SEC assistant regional director of enforcement issues in Denver. The commission has asked for penalties of $50,000 against them, she said. "The judge has affirmed for the investing public that a company cannot mislead the public for the purpose of inflating its stock values," she said. Black will take up the issue of penalties in 20 days after the SEC files a draft order for him, Addleman said. TECTOY: Reduces Its Losses -------------------------- According to a report in GAZETA MERCANTIL INVEST NEWS (Sao Paulo) on April 3, 2000, toy manufacturer TecToy reduced its losses to R$ 10.968 million in 1999 from R$ 25.580 million the previous year. The company, which has been under bankruptcy protection proceedings similar to Chapter 11 since since December, 1997, has modified its strategy and decided to focus improving business by switching focus to more profitable products, according to the explanatory notes accompanying the balance sheet released on Monday. Net sales revenue stood at R$ 26.758 million last year, 26.5% lower than in 1998. Net sales volume fell 12.7% compared to 1998, because of a general slowdown in the electronic toy market, and the removal of its some less profitable products from the company's range. On a brighter note, the cost of goods and services fell 31.6% to R$ 17.099 million. Operating expenses also reduced by 41.6% to R$ 20.824 million. Last year, TecToy restructured its administration and concentrated its efforts into one business unit, selling videogames and toys. Costs were cut by centralizing all Sao Paulo operations under one roof, and by moving the company's factory in Manaus, Amazonias, to a new address more compatible with current output levels. TERRA INDUSTRIES: Annual Meeting Set For May 2, 2000 ---------------------------------------------------- The annual meeting of the stockholders of Terra Industries Inc. will be held at the Sioux City Convention Center, 801 Fourth Street, Sioux City, Iowa, on Tuesday, May 2, 2000 at 9:00 a.m., central daylight time, for the following purposes: (a) to elect directors to Terra's Board; (b) to ratify the selection by the Board of Directors of the firm of Deloitte & Touche LLP as Terra's independent accountants for 2000; and (c) to transact such other business as may properly come before the annual meeting. Only stockholders of record of Terra's common stock at the close of business on March 3, 2000 are entitled to notice of, and to vote at, the annual meeting. VANGUARD AIRLINES: Annual Meeting Set For May 24, 2000 ------------------------------------------------------ Stockholders of Vanguard Airlines, Inc., a Delaware corporation, are being advised that the annual meeting will be held on Wednesday, May 24, 2000, at 10:00 a.m., Central Daylight Time, at the Embassy Suites Plaza Hotel, 220 West 43rd Street, Kansas City, Missouri, for the following purposes: 1. To elect one Class II director to serve for a three-year term expiring at the 2003 annual meeting of stockholders and until his successor is duly elected and qualified or until his earlier resignation or removal; 2. To consider and act upon approval of an amendment to the company's restated certificate of incorporation, as amended, to decrease the number of authorized shares of the company's common stock, $0.001 par value, from 200,000,000 shares to 100,000,000 shares; 3. To consider and act upon approval of the Vanguard Airlines, Inc. 2000 Stock Option Plan; 4. To consider and act upon ratification and approval of the selection of Ernst & Young LLP as the company's independent auditors for the year ending December 31, 2000; and 5. To consider and act upon any other matters which may properly come before the annual meeting. The company's board of directors has fixed the close of business on April 4, 2000, as the record date for the determination of the holders of shares of its common stock, and Series A preferred stock, entitled to notice of, and to vote at, the annual meeting. VISTA EYECARE: To Restructure Under Chapter 11 ---------------------------------------------- Vista Eyecare, Inc. (Nasdaq: VSTA), the national retail optical company, announced today that it has filed for protection under Chapter 11 of the U.S. Bankruptcy Code. The Company made the filing in the U.S. Bankruptcy Court in the Northern District of Georgia. James W. Krause, Chairman and Chief Executive Officer, stated that, "This is not an ordinary bankruptcy case. We have positive cash flows and a strong core business. Our problems are clearly defined -- too much high cost debt and too many under-performing retail centers acquired in 1998. We have spent the past several weeks attempting to come up with a proposal that would address these problems outside of a court proceeding. Ultimately, the time required to complete a restructuring transaction and the uncertain cost of closing unprofitable locations were too great to overcome." Mr. Krause continued, "We expect to emerge from bankruptcy as quickly as possible with all of our host operations, with a smaller and more profitable base of free-standing locations, and with a sound capital structure." Subject to court approval, the Company expects to receive Debtor- in- Possession (DIP) financing from its current secured lenders. Mr. Krause concluded, "While unfortunate, this proceeding will bring order to a disorderly process. It should have little or no impact on our customers, our independent optometrists, or our employees. We intend to continue to compete vigorously in our markets and to work diligently to meet the needs of our customers." Vista Eyecare, Inc., with a total of 908 locations, is the nation's third largest optical company in terms of sales on an annualized basis and second largest in terms of locations (including 586 leased department and 322 Vista Optical free standing locations). The Company's retail operations offer a full line of optical goods including spectacles, contact lenses, prescription and non-prescription sunglasses and a full line of optical accessories. In addition, independent Doctors of Optometry are available adjacent to most store locations. WILLCOX & GIBBS: Plan of Reorganization Confirmed ------------------------------------------------- Willcox & Gibbs, Inc. announced that its Chapter 11 Plan of Reorganization was confirmed on April 3, 2000, by the U.S. Bankruptcy Court for the District of Delaware. Willcox & Gibbs expects the Plan to become effective later this month in connection with the closing under the Company's new credit agreement with Banc of America Commercial Finance Corporation. Willcox & Gibbs is the largest distributor in North America of replacement parts, supplies and ancillary equipment to manufacturers of apparel and other sewn products. Willcox & Gibbs is currently operating as a debtor and debtor in possession under Chapter 11 of the Bankruptcy Code. ZENITH: Restructuring Complete, Improved Operating Results ---------------------------------------------------------- Zenith Electronics Corporation, which completed its restructuring last year, reports a 1999 net loss of $ 64.1 million, excluding an extraordinary gain, compared with a net loss of $ 275.5 million in 1998. (The extraordinary gain of $ 70.2 million resulted from the restructuring of long-term debt in the fourth quarter of 1999.) Zenith's operating losses narrowed to $ 5.1 million in 1999 from $ 43.4 million in 1998, excluding restructuring charges of $ 19.5 million in 1999 and $ 202.3 million in 1998. Fourth-quarter and full-year 1999 results benefited from significantly lower operating expenses due to Zenith's operational restructuring, and reduced interest expense due to Zenith's financial restructuring and better management of cash and inventories. Net sales were $ 834 million in 1999, compared with $ 985 million in 1998. The 15 percent sales decline was primarily due to competitive market actions in response to Zenith's restructuring, delays in new product availability and planned reductions in low- margin business areas, as well as the phase out of analog set-top boxes and cable modems in 1999. Zenith completed its financial restructuring on Nov. 9, 1999, following confirmation of its prepackaged plan of reorganization. The company is now a wholly owned subsidiary of LG Electronics Inc. (LGE), and Zenith stock is no longer publicly traded. ********* 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 * * *