/raid1/www/Hosts/bankrupt/TCR_Public/000418.MBX
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, April 18, 2000, Vol. 4, No. 76
Headlines
ACCESSAIR: Judge Gives More Time To Regroup
AMERICAN LAMINATES: Assets To Be Auctioned
AMERICAN PAD & PAPER: Reports Fourth Quarter Results
AMERISERVE: Reports Florida Lay-Offs
BAPTIST FOUNDATION: Committee Seeks Termination of Exclusivity
BENNETT FUNDING: Proposes $105 Million Distribution to Creditors
CASMYN CORP: Order Confirms Plan
CATAMOUNT BREWERY: Long Trail Plans to Buy Foreclosed Brewery
CHARTER BEHAVIORAL: Looking for New Buyer
COSTILLA ENERGY: Emergency Motion To Continue Hearing
DIMAC HOLDINGS: Case Summary and Largest Unsecured Creditors
FRUIT OF THE LOOM: Former CEO Defends Company's Move To Tax Haven
GLOBAL VAN: Allied Won Bid
HVIDE MARINE: Files 1999 Form 10-K
INTEGRATED HEALTH: Announces Operating Results For Fourth Quarter
IRIDIUM LLC: Emke Plans To Buy Bankrupt Satellite
IRIDIUM LLC: Motorola To Cut 300 Jobs
JOAN AND DAVID: Meeting of Creditors
MAXICARE: Announces Changes in Senior Management
MICROAGE INC: Court Approves Employee Payments and DIP Financing
PEAPOD: Pulled from the Edge of Bankruptcy
PETSEC ENERGY(US): Files Voluntary Chapter 11 Petition
POWER DESIGNS: Continued Confirmation Hearing
R.G. MOORE: Case Summary and 14 Largest Unsecured Creditors
RITE AID: Moody's Lowers Long-Term Ratings; Negative Outlook
RITE AID: Pacts To Put Company Back On Track
SAFETY KLEEN: Lenders Agree To Defer Interest Payments
TEXAS HEALTH: Joint Report of Debtors and Creditors Committee
TRANSCOASTAL MARINE: Negotiations Continue With Lenders
TRIFOX: Angoss Software Issues Update On Litigation Proceedings
UNITED ARTISTS: Blocked from Paying Debt in Creditor Dispute
Meetings, Conferences and Seminars
*********
ACCESSAIR: Judge Gives More Time To Regroup
-------------------------------------------
AccessAir, which filed for bankruptcy protection on Nov. 29,
1999, after 10 months of operations, has been given more time to
complete its reorganization plan, which officials say centers on
a relationship with an Indianapolis-based airline and could allow
it to resume flights later this year, reports Becky Bohrer of The
Associated Press.
Judge Russell Hill last week ordered the Des Moines-based airline
to file a reorganization plan by May 19 and scheduled a hearing
in U.S. Bankruptcy Court on June 1.
Assistant U.S. Trustee Jim Snyder, who asked that AccessAir be
forced to liquidate its assets, says that the two dates indicate
that Judge Russell Hill wants time to read AccessAir's plan, if
one is filed, "to see whether it flies or not," Becky Bohrer of
The AP recalls.
AMERICAN LAMINATES: Assets To Be Auctioned
-------------------------------------------
American Laminates, which operated a 92,000-square-foot plant at
3200 Fairfax Trafficway that is situated in the Fairfax
Industrial District, shut their doors
shortly after filing for bankruptcy protection under Chapter 11
in Feb. 11. It had liabilities listed as high as $ 4.7 million,
and another $ 2.5 million owed to Wells Fargo Business Credit
Inc., according to a report last April 11 from The Kansas City
Star.
Aside from the company's assets that will be auctioned off next
month, U.S. Bankruptcy Judge Frank Koger last week approved the
sale of the company's equipment, furnishings and vehicles to
Continental Plants Corp., an industrial auctioneer based in
Beverly Hills, Calif. Continental, in turn, plans to sell its
assets at a May 3 auction.
AMERICAN PAD & PAPER: Reports Fourth Quarter Results
----------------------------------------------------
American Pad & Paper Company (OTCBB:AMPPE) (AP&P) today reported
financial results for the fourth quarter and twelve months ended
December 31, 1999.
For the fourth quarter the Company reported a net loss of $45.3
million, or $ 1.59 per share, on net sales of $156.2 million. The
fourth quarter loss included a $23.3 million non-cash valuation
allowance reducing the Company's deferred tax asset resulting in
an ($0.82) per share impact. This charge is a result of the
uncertainty surrounding the Company's ability to use its NOLs
(net operating loss tax credits).
In the fourth quarter 1999, gross margin performance was
negatively impacted due to lower sales, product and customer mix
and paper price increases. SG&A expenses were higher than
expected due to the costs associated with exploring various
potential options, including asset sales, debt restructuring and
bankruptcy. The Company's previously announced rationalization
plan for plant operations was completed in the fourth quarter and
the cost savings from these efforts will begin to be fully
realized in 2000.
Comparable fourth quarter results in 1998 included a net loss
of$7.2 million, or $0.26 per share, on net sales of $179.6
million. These results included a $6.3 million non-cash valuation
allowance reducing the Company's deferred tax asset, which
resulted in a net provision for taxes of $5.5 million, or a
($0.23) per share impact.
For the year ended December 31, 1999, the Company reported a net
loss of $ 81.5 million, or $2.92 per share, on net sales of
$572.6 million. The 1999 net loss includes a $23.3 million
deferred tax asset valuation allowance, a $0.7 million cumulative
effect of a change in accounting principle and previously
announced plant rationalization charges of $6.7 million.
Collectively, these events represent $30.7 million of the net
loss or ($1.10) per share impact on 1999 performance.
For comparison, the year ended December 31, 1998, included a net
loss of $ 78.6 million, or $2.84 per share, on net sales of
$662.0 million. The 1998 net loss included the impact of a $41.0
million write-down of goodwill, a $2.9 million inventory write-
down, plant rationalization charges of $6.6 million and a $6.3
million deferred tax asset valuation allowance. Collectively
these events represent$53.1 million of the net loss, or ($1.92)
per share impact on 1998 performance.
The Company has been operating in Chapter 11 since January 10,
2000 and has secured $65 million of debtor-in-possession (DIP)
financing to maintain day-to-day operations. As previously
announced, the Company is pursuing a number of strategic and
financial alternatives to reduce debt including the sale of its
major business units: Williamhouse, AMPAD, Creative Card and
Forms. The Company has entered into a letter of intent to sell
its Creative Card division to Taylor Corporation. This
transaction is expected to close during the second quarter
pending final sale negotiations and bankruptcy court approval.
The sale process for Williamhouse continues and potential buyers
are looking at both AMPAD and Forms. The Company's goals in this
process are to maximize the value of the Company for all
stakeholders and reduce outstanding debt.
The Company recently received an extension from the SEC for
filing the Form 10K for 1999. The stock symbol has been changed
to reflect the delay in filing of the Form 10K to AMPPE; the
Company expects the stock symbol to return to AMPP once the Form
10K is filed.
American Pad & Paper Co., which invented the legal pad in 1888,
is a leading manufacturer and marketer of paper-based office
products in North America. Product offerings include envelopes,
writing pads, file folders, machine papers, greeting cards and
other office products. The key operating divisions of the
Company are Williamhouse, AMPAD, Creative Card and Forms. Company
revenues in 1999 were $573 million, additional information is
available on the Company's Web site at
http://www.americanpad.com.
AMERISERVE: Reports Florida Lay-Offs
------------------------------------
THE ORLANDO SENTINEL reports on April 14, 2000 that AmeriServe
Food Distribution Inc. said Thursday it would lay off an
unspecified number of its 500 Central Florida employees in the
wake of Burger King Inc.'s decision to stop using the Texas
company as a supplier. Burger King will stop using AmeriServe,
which supplies restaurants, on July 15. Burger King and Tricon
Global Restaurants Inc. - owner of the Pizza Hut, Taco Bell and
KFC restaurant chains - have given AmeriServe $150 million
since Jan. 31 when the company filed for protection from
creditors under Chapter 11 of the U.S. Bankruptcy Code. A Tricon
spokeswoman said Thursday that her company would continue using
AmeriServe but was considering other alternatives. AmeriServe
also supplies Long John Silver's Seafood Shoppes and Chick-Fil-A
chains.
BAPTIST FOUNDATION: Committee Seeks Termination of Exclusivity
--------------------------------------------------------------
The Official Unsecured creditors' Committee for the debtors,
Baptist Foundation of Arizona, Inc. requests that the court
terminate the exclusivity period for the debtors to solciit
acceptances for their plan of reorganization so that the
Unsecured Caommittee can file a proposed plan and proceed on
confirmation. The Committee's plan would provide differently for
the Liquidating Trust, and the implementation of a Liquidating
Plan.
BENNETT FUNDING: Proposes $105 Million Distribution to Creditors
----------------------------------------------------------------
Richard C. Breeden, Trustee of the bankrupt Bennett Funding Group
and related companies, announced today that he has filed a motion
with the U.S. Bankruptcy Court seeking authority to distribute
$105,000,000 in cash to unsecured creditors. If approved by the
Court at its hearing on May 11, 2000, the actual payout is
expected to be completed by June 30, 2000. The Bennett Estate
has more than 12,000 creditors in over 40 states.
The proposed payout will bring total cumulative payouts by Mr.
Breeden to secured and unsecured creditors, tax authorities,
vendors, employees and other parties in interest to $500,144,000.
Of this half-billion dollars in total distributions, $180
million, or 36%, will have been paid to unsecured creditors
as of the Trustee's latest distribution. Unsecured creditors have
received two previous interim distributions of $50 million in
1998 and $25 million in 1999, together with the $105 million now
proposed by the Trustee.
Upon completion of the proposed distribution, unsecured creditors
will have received between $.18 and $.34 on the dollar in cash,
depending on the type of investment instruments purchased by a
particular creditor. This is believed to be the largest-ever
recovery by investors in a Ponzi-style fraud.
The Bennett companies had total debts of more than $1 billion
when they filed for bankruptcy in 1996. To date the Trustee has
recovered$564.8 million for the Estate. The Estate's asset
recovery efforts are continuing, including major lawsuits against
various parties that assisted in the conduct of one of history's
largest frauds.
CASMYN CORP: Order Confirms Plan
--------------------------------
By order of the US Bankruptcy Court, Central District of
California, the plan of reorganization of Casmyn Corp. was
confirmed.
CATAMOUNT BREWERY: Long Trail Plans to Buy Floreclosed Brewery
--------------------------------------------------------------
Andy Pherson, president and owner of East Bridgewater-based Long
Trail Brewing Co., expects to begin serious talks with
Catamount's main creditor in hopes of buying the foreclosed
brewery which shut down due to multimillion dollar debts,
according to The AP.
Pherson says if he's successful in his negotiations with
Chittenden, the bank which took possession of Catamount's assets
including the $5 million, 26,000-square-foot facility at the
Windsor Industrial Park, he'll use the plant to expand brewing of
Long Trail's eight year-round and seasonal beers. He said he
will also consider continuing Catamount brand, The Associated
Press recalls.
CHARTER BEHAVIORAL: Looking for New Buyer
-----------------------------------------
Charter Behavioral Health Systems is looking for a new
prospective buyer of the company's 37 hospitals after its failure
to close a deal with the expected buyer, reports Andy Miller of
Cox News Service.
But Alpharetta, Ga.-based Charter Behavioral, which is doing
business under Chapter 11 protection said last week that 30 other
organizations are interested in buying the business of some or
all of the company's psychiatric facilities.
COSTILLA ENERGY: Emergency Motion To Continue Hearing
-----------------------------------------------------
The debtor, Costilla Energy Inc. requests a continuance of the
Disclosure Statement hearing until May 16, 2000 at 10:30 AM in
Midland, Texas. During this continuance the debtor hopes to
commence and hopefully finalize negotiations with its new
purchaser and determine the direction of the case.
DIMAC HOLDINGS: Case Summary and Largest Unsecured Creditors
----------------------------
Debtor: Dimac Holdings, Inc.
5775 Peachtree Dunwoody Rd
Suite C-150
Atlanta, Georgia 30342
Petition Date: April 6, 2000 Chapter 11
Court: District of Delaware
Bankruptcy Case No.: 00-01596
Judge: Mary F. Walrath
Debtor's Counsel: Neil B. Glassman
Steven M. Yoder
The Bayard Firm
222 Delaware Ave, Ste 900
PO Box 25130
Wilmington, DE 19899
(302) 655-5000
Martin J. Beinenstock
George A. Davis
Weil, Gotshal & Manges,LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8000
Total Assets: $ 100 million above
Total Debts: $ 100 million above
Largest Unsecured Creditors
TCW/Crescent Mezzanine Partners,
LP, TCW/Crescent Mezzanine Trust,
TCW/Crescent Mezzanine Investment
Partners, LP, TCR/Leverage Income
Trust, LP, and
TCW Shared Opportunity
Fund II, LP 15.5% PIK Coupon $ 33,472,000
FRUIT OF THE LOOM: Former CEO Defends Company's Move To Tax Haven
-----------------------------------------------------------------
The former chief executive of bankrupt Fruit of the Loom defends
moving the company's financial base to the Cayman Islands, even
though the tax haven did nothing to save Fruit from serious
financial problems, The AP reports.
William Farley says Fruit wasn't shirking its civic
responsibilities by the 1998 move because it's an international
company - most of its garments are made overseas - and shouldn't
have to pay taxes on foreign operations.
GLOBAL VAN: Allied Won Bid
---------------------------
Global Van Lines of Orange, Calif., which filed for bankruptcy
protection last month whose purchase had been approved last March
20 by a federal bankruptcy judge by a moving corporation namely
Allied Worldwide, The Associated Press reports. Says that its
network of agents is putting their interest more on the West
Coast and will strengthen Allied Worldwide's presence in those
markets, company spokesperson John McGauley said.
HVIDE MARINE: Files 1999 Form 10-K
----------------------------------
Hvide Marine Incorporated (OTC Bulletin Board: HVDM) reported
that it had filed its 1999 Form 10-K with the Securities and
Exchange Commission and that it had also reached agreement with
its bank syndicate on the terms of an amendment to its bank
credit facility. The amendment is intended to enable the
company to remain in compliance with its loan covenants as of
March 31, 2000. As previously reported, the Company had
anticipated that it would not be in compliance with one or more
covenants in the absence of an amendment.
"The good news is that we have reached agreement with our banks
and filed our 1999 year-end report," commented Eugene F. Sweeney,
President and Chief Operating Officer. "The bad news is that our
first quarter results will be below our original projections due
to the delayed recovery in the offshore sector and lower revenues
from tankers and towing."
Under the terms of the amendment, and in return for covenant
modification through March 31, 2001, the Company is required to
prepay principal under its term loans in scheduled increments
totaling $60 million by January 1, 2001. The prepayments of
principal will be funded through the sale of underperforming
vessels and other assets. A more complete description of the
terms of the amendment is contained in the Company's Form 10-K
filed today under the heading "Recent Developments."
In its 10-K filing, which incorporates "fresh start" reporting
practices resulting from its emergence from Chapter 11 on
December 15, 1999, the Company recorded a net loss in the fourth
quarter ended December 31, 1999, of $197.0 million, including
charges related to its reorganization. In the year- earlier
period, the Company had net income of $1.9 million or $0.12 per
diluted share. Revenues for the 1999 quarter totaled $76.8
million, compared with $108.8 million in the fourth quarter of
1998, as the year-to-year decline in offshore drilling activity -
- and the consequent impact on day rates and utilization for
the Company's fleet of offshore energy support vessels --
continued to take its toll.
Upon completing the adjustments required to reflect fresh-start
accounting on its emergence from Chapter 11, the Company reported
a net loss of $249.9 million for 1999 compared with net income of
$21.7 million or $1.35 per diluted share in 1998. The Company
had previously estimated its loss in 1999 to be approximately $95
million. The difference between the Company's estimated and
actual net loss was primarily the result of completing the final
fresh-start accounting adjustments required to reflect the
issuance of equity in the Successor Company to the former debt
holders.
Revenues of $342.2 million in 1999 were down from $404.8 million
in 1998, reflecting the year-long decline in demand for offshore
energy support services.
The Company incurred charges of $433 million in 1999 from the
implementation of its Plan of Reorganization, which became
effective on December 15, 1999. Included in the $433 million are
writedowns of property and goodwill totaling $ 420 million and $9
million in professional fees.
The fourth quarter saw continued softness in the Company's
worldwide offshore energy support business, with revenues only
slightly ahead of the previous quarter. In the Gulf of Mexico,
day rates for Seabulk Offshore's 21 supply boats averaged $3,174
versus $3,596 in the third quarter, while utilization stood at
73% versus 75% in the third quarter. Seabulk Offshore's 33
Gulf of Mexico crewboats averaged $1,837 and an 87% utilization
rate versus $ 1,754 and 75%, respectively, in the prior quarter.
Internationally, where the Company has major operations in West
Africa and the Middle East and Far East, day rates for Seabulk
Offshore's fleet of 67 anchor handling tug and tug supply
vessels averaged $4,803 against $4,662 in the third quarter,
while utilization slipped to 47% from 49%. Day rates for the
Company's international fleet of 39 crew/utility vessels averaged
$1,749 versus $1,629 in the prior quarter, while utilization rose
to 52% from 47%.
Results from the Company's two other businesses, harbor and
offshore towing and marine transportation, were adversely
affected by new competitive pressures, higher fuel costs and the
retirement of two single-hull tankers.
With a fleet of 274 vessels, Hvide Marine is one of the world's
leading providers of marine support and transportation services,
primarily to the energy and chemical industries.
INTEGRATED HEALTH: Announces Operating Results For Fourth Quarter
-----------------------------------------------------------------
Integrated Health Services, Inc. (OTC Bulletin Board: IHSVQ)
announced revenues and operating results of the fourth quarter
and year ended December 31, 1999.
Net revenues for the fourth quarter totaled $654.9 million,
representing a 9% decrease over the fourth quarter of 1998. Pre-
tax loss from continuing operations before non-recurring items
and extraordinary item was $72.5 million compared to pre-tax
earnings from continuing operations of $18.3 million in the
fourth quarter 1998. Net loss from continuing operations before
non- recurring charges and extraordinary item was $72.5 million
in the fourth quarter 1999 compared to 1998 fourth quarter
results of $10.8 million in net earnings from continuing
operations. Net loss was $409.1 million in the fourth quarter
1999 and the related loss per share (diluted) was $8.46 compared
to 1998 net earnings of $10.8 million and related earnings per
share (diluted) of $.21.
Net revenues for the year ended December 31, 1999 totaled
$2,559.3 million representing a 14% decrease from the prior year.
Pre-tax loss from continuing operations before non-recurring
items and extraordinary item was $115.2 million
for the year ended December 31, 1999, compared to pre-tax
earnings from continuing operations of $232.0 million for the
year ended December 31, 1998. Net loss before non-recurring items
and extraordinary item was $125.0 million for the year ended
December 31, 1999, compared to net earnings from continuing
operations of $136.9 million for 1998. Net loss was $2,239.9
million and net loss per share (diluted) was $44.87 for the year
ended December 31, 1999, compared to net loss of $68.0 million
and net loss per share (diluted) of $1.08 for the same period of
1998.
In the fourth quarter 1999 the Company recorded a non-recurring
charge totaling $345.8 million (net of tax) primarily related to
loss on impairment of long lives assets, and provision for
government claims. In 1998, the Company recorded a non-recurring
charge of $204.9 million (net of tax) related to the Company's
adoption of a plan of disposition for its home health nursing
business segment.
On February 2, 2000 Integrated Health Services and many of its
subsidiaries filed voluntary petitions with the U.S. Bankruptcy
Court for the district of Delaware, in order to restructure the
company's debt obligations. The company is currently operating
its business as a debtor-in-possession subject to the
jurisdiction of the Bankruptcy Court.
Integrated Health Services is a highly diversified health
services provider, offering a broad spectrum of post-acute
medical and rehabilitative services through its nationwide
healthcare network. IHS's post-acute services include
home respiratory services, subacute care, long term care and
contract rehabilitation services.
IRIDIUM LLC: Emke Plans To Buy Bankrupt Satellite
-------------------------------------------------
A 27-year-old computer programmer and computer engineer who
started Save Our Satellites and its Web page --
www.saveoursats.com -- just three weeks ago, hopes to raise $300
million to make a bid to acquire the network of low-orbit
satellites that D.C.-based Iridium LLC began turning off after
the global satellite phone company liquidated last month, The
Washington Times reports.
The San Diego resident plans to buy the bankrupt company to
prevent Illinois-based Motorola Corp., Iridium's primary investor
and the company developing a plan to decommission the devices,
from programming them to plunge into the world's oceans.
"I don't think it's unrealistic that we can save these things,"
Mr. Emke, the purchaser, said. "I heard they were going to burn
the satellites and I thought that was asinine. Now we're talking
to Iridium," relates Emke, according to The Washington Times.
IRIDIUM LLC: Motorola To Cut 300 Jobs
-------------------------------------
In a report last April 10 in Crains Chicago Business, Motorola
Inc. will cut-off about 300 jobs at a customer service center in
Arlington Heights that supported Iridium LLC, the Washington,
D.C.-based satellite phone company, part-owned by Motorola, that
is currently under protection in Chapter 11 bankruptcy
proceedings. The 74,000-square-foot center houses Motorola
Cellular Service Inc. (MCSI), a small business unit that served
Iridium customers and resold land-based cellular service to large
corporate customers. Motorola sold the cellular reselling portion
of MCSI last week to traq-wireless Inc., an Austin, Texas-based
online reseller of wireless services, as part of its steps to
shut down the unit. The Schaumburg-based maker of cell phones and
semiconductors says it has found other jobs within Motorola for
about half the MCSI workers and expects to find positions for the
rest.
JOAN AND DAVID: Meeting of Creditors
------------------------------------
A meeting of creditors is scheduled for May 5, 2000 at 3:00 PM at
the Office of the United States Trustee, 80 Broad Street, Second
Floor, New York, NY 10004-1408.
The debtor, Joan and David Helpern Incorporated is represented by
Togut, Segal & Segal LLP, Alber Togut and Frank A. Oswald, One
Penn Plaza, Sutie 3335, New York, NY 10119. (212) 594-5000.
MAXICARE: Announces Changes in Senior Management
------------------------------------------------
Maxicare Health Plans Inc. (Nasdaq:MAXI) today announced several
changes in the senior management team, including the promotion of
Susan Blais to executive vice president with responsibilities for
the California and Indiana plans.
She will also serve as interim vice president and general manager
of the California plan, succeeding Warren Foon, former vice
president and general manager of the California plan. Blais
joined Maxicare from WellPoint Health Network as general manager,
where she managed the mid-size employer commercial market in 11
states.
Paul R. Dupee Jr., chairman of the board and chief executive
officer of Maxicare Health Plans, said, "Susan's experience in
the health-care industry, leadership skills and organizational
abilities are a benefit to Maxicare, are we look forward to a
smooth transition into her new role."
In addition, Sandy Lewis was named senior vice president of
corporate administration, with responsibilities in the conversion
and integration of Maxicare's new information systems. Lewis
joins the new senior executive management team that includes
Dupee, chairman and CEO; Richard Link, chief financial officer
and chief operating officer; and Blais, executive vice
president.
Two other management changes were announced that strengthen the
company's position:
-- Susan Schmidt joins Maxicare as vice president for integration
services. Schmidt's responsibilities include coordinating cross-
functional projects including Web site development, training and
product implementations.
-- Ken Kubisty was confirmed from his interim role as vice
president and general manager of the Indiana plan.
"We are pleased to announce that Maxicare has such a strong
management group in place," said Dupee. "The company is well
positioned to take advantage of new opportunities in the
marketplace."
Maxicare Health Plans Inc. is a managed health-care company with
operations in California, Indiana and Louisiana. The company also
offers various employee benefit packages through its subsidiaries
Maxicare Life and Health Insurance Co. and HealthAmerica Corp.
MICROAGE INC: Court Approves Employee Payments and DIP Financing
----------------------------------------------------------------
MicroAge, Inc. (NASDAQ:MICA) announced today that it has received
Bankruptcy Court approval to, among other things, pay pre-
petition and post-petition employee salaries and benefits during
its voluntary restructuring under Chapter 11, which commenced on
April 13, 2000.
In addition, the Court approved interim debtor-in-possession
(DIP) financing for immediate use by the Company to continue
operations, pay employees, and purchase goods and services going
forward. MicroAge has received a commitment for $225 million in
debtor-in-possession (DIP) financing from a group of financial
institutions led by Citibank, N.A.
In a related decision, the Court approved the Company's motion to
pay pre-petition obligations to freight shippers.
Chairman and Chief Executive Officer Jeffrey D. McKeever said he
was extremely pleased that the Court approved the Company's
first-day orders. He said that the voluntary Chapter 11
proceeding will have no impact on the day-to-day operations of
the Company, or on its ability to serve the full range of its
customers' needs. "There will be no interruption in operations.
We will continue to fulfill all employee obligations, and will
continue to purchase and pay for goods and services from our
vendors."
"Our first quarter sales decline, predominantly related to a lack
of client demand associated with Year 2000 concerns, resulted in
constraints by the Company's lenders and a tightening of credit
terms from vendors that made it more difficult to obtain
sufficient product at prices and terms necessary to successfully
meet customer needs and demand. Our new DIP financing facility,
combined with the priority status the Bankruptcy Court affords to
payment for post-petition purchases, should bring about improved
trade terms with our vendors. We have already contacted a number
of our major vendors and customers, who have indicated their
support," McKeever said.
"With our first-day orders approved and our interim DIP financing
in place, we can now renew our focus on previously-announced
restructuring initiatives to facilitate the Company's
transformation into a business-to-business provider of technology
procurement solutions and infrastructure services," said
President and Chief Operating Officer Christopher J. Koziol.
The Company filed Chapter 11 petitions in the U.S. Bankruptcy
Court for the District of Arizona in Phoenix for MicroAge, Inc.
and its principal subsidiaries, including Pinacor, Inc. and
MicroAge Technology Services, L.L.C.
MicroAge, Inc., a Fortune 500 company, is a global provider of
efficient technology solutions. The Company is composed of
information technology businesses that deliver technology
infrastructure solutions through ISO 9001-certified, multi-vendor
integration services and distributed computing solutions to large
organizations and computer resellers worldwide. The Company does
business in more than 40 countries and offers over 250,000
products from more than 1,000 vendors backed by a suite of
technical, financial, logistics and account management services.
PEAPOD: Pulled from the Edge of Bankruptcy
------------------------------------------
According to a Business Wire report of April 14, 2000, ON24 Stock
Analyst Trevor A. Jackson, Jr. talks about Peapod's new$73
million cash infusion from Netherlands-based Royal Ahold and what
the prospects are for the company now that it has this much
needed cash.
PETSEC ENERGY(US): Files Voluntary Chapter 11 Petition
------------------------------------------------------
Australian oil and gas explorer Petsec Energy Ltd said its
wholly-owned United States subsidiary Petsec Energy Inc (PEI) has
filed a voluntary bankruptcy petition.
The petition was filed in the Federal Court in Opelousas,
Louisiana, under Chapter 11 of the US Bankruptcy Code.
"The filing will allow PEI to continue its operations under the
protection of the bankruptcy court while it continues discussions
with its senior unsecured noteholders regarding possible
solutions to its financial situation," Petsec said.
"It will also afford PEI the opportunity to evaluate all other
options."
PEI is also negotiating a commitment for up to $ US30 million
(50.38 million) of post-petition financing from its existing
secured lender, Foothill Capital, to maintain liquidity through
the reorganisation process, including payment of suppliers and
trade creditors.That financing is subject to court approval.
Petsec shares eased 0.5 of a cent to 13.5 cents today.
POWER DESIGNS: Continued Confirmation Hearing
---------------------------------------------
A hearing will be held at US Bankruptcy Court, 915 Lafayette
Blvd., Bridgeport, Connecticut on May 2, 2000 at 9:30 AM to
consider confirmation of the debtors' amended plan of
reorganization for Power Designs Inc. and PDIXF Acquisition Corp.
R.G. MOORE: Case Summary and 14 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: R.G. Moore Bldg Corp.
4510 Holland Office Park, St 507
Virginia Beach, VA 23452
Type of Business: Rental real estate
Petition Date: April 12, 2000 Chapter 11
Court: Eastern District of Virginia
Bankruptcy Case No.: 00-70579
Judge: Stephen C. St John
Debtor's Counsel: Frank J. Santoro
Marcus, Santoro, Kozak & Melvin, P.C.
355 Crawford Parkway, Suite 700
PO Box 69
Portsmouth, VA 23705-0069
(757) 393-2555
Total Assets: $ 29,024,574
Total Debts: $ 16,330,590
14 Largest Unsecured Creditors
Tri-City Properties, LLC
c/o Kaufman & Canoles
PO Box 3037
Norfolk, VA 23514 $ 1,000,000
East Coast Bldg
Supply Corp
404 Greentree Road
Chesapeake, VA
23320 Note $ 716,470
Pender & Coward
4th Floor Greenwich Ctr
192 Ballard Court
Virginia Beach, VA
23462 $ 345,942
ShuttleWorth, Ruloff, et al. $ 48,151
Wachovia Bank, NA $ 38,843
Frederick B. Hill & Co PC $ 22,500
J.T. Womack $ 15,000
Ornoff & Arnold PC $ 7,346
Landmark Design Group $ 7,033
Jones Whitaker, et al. $ 6,235
Bruce Hatfield & Assocs $ 4,875
National Home Insurance $ 3,223
Williams, Mullen, Clark & $ 494
Dowdy Electrical $ 416
RITE AID: Moody's Lowers Long-Term Ratings; Negative Outlook
------------------------------------------------------------
Moody's Investors Service lowered the long-term ratings of Rite
Aid Corporation following the announcement that the company plans
to grant security to a new senior bank credit agreement and due
to the fact that Rite Aid has not significantly reduced its large
debt load from asset sales. However, the ratings also incorporate
Rite Aid's plan to obtain much needed working capital financing
and to extend the earliest maturities of its debt to
approximately August, 2002. The rating outlook remains negative,
reflecting the challenges inherited by the company's experienced
new management and the uncertainty regarding the outcome of
shareholder suits and of investigations by the SEC and an
independent law firm, among others.
Ratings lowered:
Rite Aid Corporation:
Senior implied to B1 from Ba3.
Exiting $1 billion secured bank credit agreement to B2 from Ba3.
$200 million 5.5% senior notes due in 2000 and $350 million 6.7%
senior notes due in 2001 to B3 from B1.
Senior unsecured debentures, notes, senior notes, Dealer
remarketable securities under Rule 144A, and industrial revenue
bonds to Caa1 from B1.
Convertible subordinated notes to Caa3 from B2.
Thrifty PayLess, Inc.:
Senior subordinated notes to Caa3 from B2.
Rite Aid Lease Management Company
Cumulative preferred stock sold under Rule 144A to "c" from "b3".
Rating unchanged:
Rite Aid Corporation commercial paper at Not Prime.
Rating assigned:
Existing $1.3 billion senior secured bank credit agreement at B2.
Moody's prior ratings had assumed that there would be a
significant reduction in the company's huge debt load from asset
sales. Because debt has not been reduced as contemplated, the
senior implied rating has been lowered.
Rite Aid has received a fully underwritten commitment for a new
$1 billion senior secured bank credit facility, to expire in
August, 2002. While $300 million of the new facility will repay
an existing $300 million asset securitization facility,
approximately $640 million, net of fees, will be available to
fund working capital needs. The company's plan also proposes the
extension of the expiration date of its existing bank debt to
August 15, 2002 and of the maturity date of two senior notes to
September 15, 2002. The new bank facility will provide much
needed working capital financing; because Rite Aid's existing
bank credit facilities are fully drawn, working capital must
currently be financed internally. The proposed extension of
public debt maturities currently due in 2000 and 2001 resolves
near-term liquidity uncertainty and gives management more time to
execute a turnaround. J. P. Morgan plans to convert $200 million
of its existing debt to into Rite Aid common stock, improving
leverage and further bolstering liquidity.
The new $1 billion senior bank facility will be secured by
inventory and accounts receivables, the company's most liquid
assets. Rite Aid's existing $1.3 billion bank credit agreement
will continue to be secured by a pledge of the stock of PCS
Health Systems, Inc. and its existing $1 billion bank credit
agreement will continue to be secured by a pledge of Rite Aid's
stock in drugstore.com (representing about 18% ownership
interest). Both bank agreements will also be given a second lien
on inventory and receivables. The two aforementioned senior notes
will share this second lien on inventory and receivables. The
lowering of the ratings of the company's debt issues reflects the
value of the security that will be granted to the new $1 billion
senior bank facility and the security that does support and/or
will support the existing bank credits and two of the senior
notes.
Before new management joined Rite Aid in December, 1999, the
company had pursued an aggressive growth strategy -- including
considerable investment in new stores and infrastructure,
rationalization of its geographic trade areas, a strategic
alliance with GNC and the non-traditional acquisition of pharmacy
benefits management operation PCS. As a result, it became one of
the largest drugstore chains in the United States, operating in
33 of the top 60 largest metropolitan statistical areas ("MSAs")
and is the largest or second largest seller of retail drug
prescriptions in 23 of those MSAs. However, its execution of this
ambitious strategy was uneven. Rite Aid's last reported fiscal
operating profit margin fell almost 1% point, to about 5.1%, hurt
by higher operating costs at former Thrifty PayLess stores,
expenses associated with acquisitions, and liquidation costs from
the company's strategic exit plan which closed about 732 stores.
The company's West Coast operations continue to lag its Eastern
operations, with front-end comparable store sales in the West
Coast falling 6.2% during the second quarter of 1999. Profit
margins will remain under pressure until the large number of new
and remodeled stores -- 578 in the last reported fiscal year
alone -- reach maturity in terms of sales and profitability.
Adjusted leverage is high, as debt has funded capital
expenditures and the $1.5 billion PCS acquisition.
Rite Aid is pursuing a number of strategies to improve
merchandising and to raise comparable store sales and margins.
Margins will also benefit as many young stores reach maturity.
Moody's expects, however, that Rite Aid's strategies need time to
be executed and that the company's performance will continue to
trail its largest competitors in the near term.
Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation
operates one of the largest domestic drugstore chains, with about
3800 stores in 30 states and the District of Columbia.
RITE AID: Pacts To Put Company Back On Track
--------------------------------------------
Rite Aid Corp., a company that is under the protection of Chapter
11 bankruptcy, The Associated Press reports, whose shares
skyrocketed last week to 29 percent after the announcement of
having a new financing pact that Robert Miller, named Rite Aid's
chairman and chief executive last December said that this will be
the key to rebuilding the financially troubled company.
The company had received a commitment of $ 1 billion secured
credit from Citibank, according to a report obtained by the
Associated Press. The pact will provide Rite Aid with more than
$ 600 million for its general working capital purposes, repaying
debt and paying expenses giving the shareholders of Rite Aid
enough security for the company to survive.
SAFETY KLEEN: Lenders Agree To Defer Interest Payments
------------------------------------------------------
Safety-Kleen Corp. (NYSE: SK) announced that all 79 of its
lenders under its senior credit facility have agreed to defer
interest payments on Safety-Kleen's senior debt to May 30, 2000.
The Company sought this deferral, which is effective as of April
7, because it otherwise would have been unable to
make interest payments due on senior debt in April and May, 2000.
"We want to thank our senior lenders for their agreement of
forbearance and interest deferral," said David E. Thomas, Jr.,
Chairman of Safety-Kleen's Executive Committee. "This agreement
should allow the Company to continue to support current
operations and give us additional time to negotiate a
restructuring of our heavy debt load."
As previously announced, Safety-Kleen has retained Lazard Freres
& Co. LLC, Skadden, Arps, Slate, Meagher & Flom LLP, and Jay Alix
& Associates to assist it in the restructuring process.
"The Company and its lenders understand that our customers,
employees and regulatory agencies want Safety-Kleen to maintain
normal business operations to the maximum extent possible during
this difficult period in our corporate history," said Grover
Wrenn, Vice Chairman. "We endeavor to maintain their trust
and confidence."
Under the terms of the agreement with its senior lenders, Safety-
Kleen is allowed to defer paying all interest under its senior
credit facility to May 30, 2000. The agreement may be terminated
under specific conditions, including, but not limited to other
defaults which may occur under the senior credit facility
subsequent to the date hereof.
TEXAS HEALTH: Joint Report of Debtors and Creditors Committee
-------------------------------------------------------------
The debtors, Texas Health Enterprises, Inc., HEA Management
Group, Inc., Health Enterprises of Michigan, Inc., and Health
Enterprises of Oklahoma, Inc. filed a progress report concerning
the filing of reorganization plans. It currently appears that THE
and HEA should be able to file either a joint plan or two
interlocking plans by May 3, 2000 and file a joint disclosure
statement for such plans by May 24, 2000.
Although there are certain issues remaining to be resolved, THE
and HEA are actively attempting to ensure that the THE Official
Creditors Committee will join as a co-proponent of the joint
plan.
It is yet to be determined how to facilitate creation of a
feasible fresh start debtor without the necessity of a prolonged
re-certification of each of THE's 57 facilities and without
potential "vendor holds" arising from what could be construed as
a change of control. THE appears to be capable of a
reorganization which will provide substantial future value to
unsecured creditors; although perhaps in the form of capital
stock. A fair reorganization seems attainable. The debtor and
Creditors committee report that conversion and dismissal are both
unwarranted and unnecessary. Under the plans filed by HEM and
HEO, THE will likely be treated as an unsecured creditor on a
parity with all other unsecured claims of those estates and as an
administrative creditor for monies from the common bank account
used to fund operating losses and mortgage payments for those
estates. Negotiations with the Creditors' Committee of HEM are
ongoing.
TRANSCOASTAL MARINE: Negotiations Continue With Lenders
-------------------------------------------------------
TransCoastal Marine Services Inc. (Nasdaq:TCMS) announced that it
filed its Form 10-K for the year ended December 31, 1999. In
connection with the filing of its 10-K, the Company disclosed
that it is in default of its credit agreements and has received
notification from its financial institutions regarding these
defaults.
The Company is in current negotiations with investor groups
regarding an equity investment in TransCoastal. Additionally, the
Company is continuing to work with its lenders with respect to
waivers or modifications to its credit agreements.
Transcoastal Marine Services Inc., headquartered in Houston, is a
marine construction company. The Company's Pipeline & Marine
Group performs pipeline installation and repair worldwide. The
Pipeline & Marine Group also provides construction support
services, including hydrostatic testing and commissioning
of pipelines. TransCoastal's Fabrication & Offshore Group
fabricates, refurbishes and installs offshore drilling rigs,
barge drilling rigs, production platforms and performs related
fabrication services.
TRIFOX: Angoss Software Issues Update On Litigation Proceedings
---------------------------------------------------------------
According to the Market News Publishing via COMTEX, Angoss
Software Corporation obtained an order in the State of California
entitling it to enforce its damages judgment, currently valued at
in excess of Cdn. $5 million, against TRIFOX. TRIFOX, which is a
private California-based software development company and is
currently operating under chapter 11 bankruptcy protection, made
an informal settlement proposal to ANGOSS, payable over time.
ANGOSS is currently the only material creditor of TRIFOX.
UNITED ARTISTS: Blocked from Paying Debt in Creditor Dispute
------------------------------------------------------------
United Artists Theater Co., Englewood, Colo., is being blocked
from paying $12.3 million in debt this week in a dispute between
its creditors, the company's president said, the Associated Press
reported. Meanwhile, Arthur Anderson and Co., the independent
accounting firm that reviewed the company's accounts, is raising
questions about the company's viability. "UATC has suffered
recurring losses from operations and may not generate sufficient
liquidity to meet its financial obligations as they become due,
which raises substantial doubt about its ability to continue as a
going concern," Arthur Anderson officials said in a filing with
the Securities and Exchange Commission. The $12.3 million debt
due this week is part of the company's $440 million line of
credit. Senior creditors, led by Bank of America Corp., blocked
United Artists on Wednesday from making a $12.3 million payment
to subordinated creditors that was due Saturday. "Senior
creditors don't want any of the money going to subordinated
creditors," said Kurt Hall, president of UATC. United Artists has
been hurt by a glut of movie houses and expensive leases at bad
theaters, Hall said, and the company has already said it might
declare bankruptcy to get rid of some of the expensive leases.
"We are not considering bankruptcy right now," Hall said. "It is
a strategy that may be employed to expedite getting rid of some
of these leases. We have a lot of bad deals that we have to get
out of with our landlords. We've done a good job of getting out
of some leases. But using the court process may be one way of
getting out of certain leases." Russ Solomon, an analyst at
Moody's Investors Service, said the banks have been working with
United Artists for more than a year and likely will not continue
to be lenient. "No one in the bank group will throw good money
after bad," Solomon said. "The banks are in control here. The
situation will get worse before it gets better." United Artists
owns more than 2,000 movie theater screens in the United States.
(ABI 17-Apr-00)
Meetings, Conferences and Seminars
----------------------------------
April 27-30, 2000
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
J.W. Marriott, Washington, D.C.
Contact: 1-703-739-0800
May 4-5, 2000
RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC.
Bankruptcy Sales & Acquisitions
The Renaissance Stanford Court Hotel
San Francisco, California
Contact: 1-903-592-5169 or ram@ballistic.com
May 15, 2000
AMERICAN BANKRUPTCY INSTITUTE
2nd Annual New York City Bankruptcy Conference
Association of the Bar of the City of New York,
New York, New York
Contact: 1-703-739-0800
May 26-29, 2000
COMMERCIAL LAW LEAGUE OF AMERICA
52nd Annual Meeting of the New England Region
Colony Hotel, Kinnebunkport, Maine
Contact: 1-617-742-1500 or richard@landayleblang.com
June 8-11, 2000
AMERICAN BANKRUPTCY INSTITUTE
7th Annual Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, Michigan
Contact: 1-703-739-0800
June 14-17, 2000
ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
16th Annual Bankruptcy & Restructuring Conference
Swissotel, Chicago, Illinois
Contact: 1-541-858-1665 or aira@ccountry.net
June 29-July 2, 2000
NORTON INSTITUTES ON BANKRUPTCY LAW
Western Mountains Bankruptcy Law Institute
Jackson Lake Lodge, Jackson Hole, Wyoming
Contact: 1-770-535-7722
July 13-16, 2000
AMERICAN BANKRUPTCY INSTITUTE
7th Annual Northeast Bankruptcy Conference
Doubletree Hotel, Newport, Rhode Island
Contact: 1-703-739-0800
July 21-24, 2000
National Association of Chapter 13 Trustees
Annual Seminar
Adams Mark Hotel, St. Louis, Missouri
Contact: 1-800-445-8629 or info@nactt.com
August 3-5, 2000
ALI-ABA
Fundamentals of Bankruptcy Law
Somewhere in Boston, Massachusetts
Contact: 1-800-CLE-NEWS
August 9-12, 2000
AMERICAN BANKRUPTCY INSTITUTE
5th Annual Southeast Bankruptcy Workshop
Hyatt Regency, Hilton Head Island, South Carolina
Contact: 1-703-739-0800
August 14-15, 2000
TURNAROUND MANAGEMENT ASSOCIATION
Advanced Education Workshop
Loews Vanderbilt Plaza, Nashville, Tennessee
Contact: 1-312-822-9700 or info@turnaround.org
September 12-17, 2000
NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
Convention
Doubletree Resort, Montery, California
Contact: 1-803-252-5646 or info@nabt.com
September 15-16, 2000
AMERICAN BANKRUPTCY INSTITUTE
Views From the Bench 2000
Georgetown University Law Center, Washington, D.C.
Contact: 1-703-739-0800
September 21-22, 2000
RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC.
3rd Annual Conference on Corporate Reorganizations
The Regal Knickerbocker Hotel, Chicago, Illinois
Contact: 1-903-592-5169 or ram@ballistic.com
September 21-23, 2000
AMERICAN BANKRUPTCY INSTITUTE
Litigation Skills Symposium
Emory University School of Law, Atlanta, Georgia
Contact: 1-703-739-0800
September 21-24, 2000
AMERICAN BANKRUPTCY INSTITUTE
8th Annual Southwest Bankruptcy Conference
The Four Seasons, Las Vegas, Nevada
Contact: 1-703-739-0800
November 2-6, 2000
TURNAROUND MANAGEMENT ASSOCIATION
Annual Conference
Hyatt Regency, Baltimore, Maryland
Contact: 312-822-9700 or info@turnaround.org
November 27-28, 2000
RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC.
Third Annual Conference on Distressed Investing
The Plaza Hotel, New York, New York
Contact: 1-903-592-5169 or ram@ballistic.com
November 30-December 2, 2000
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Camelback Inn, Scottsdale, Arizona
Contact: 1-703-739-0800
The Meetings, Conferences and Seminars column appears
in the TCR each Tuesday. Submissions via e-mail to
conferences@bankrupt.com are encouraged.
*********
S U B S C R I P T I O N I N F O R M A T I O N Troubled Company
Reporter is a daily newsletter, co-published by Bankruptcy
Creditors' Service, Inc., Trenton, NJ, and Beard
Group, Inc., Washington, DC. Debra Brennan, Yvonne L. Metzler,
Edem Alfeche and Ronald Ladia, Editors.
Copyright 2000. All rights reserved. ISSN 1520-9474.
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