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/raid1/www/Hosts/bankrupt/TCR_Public/000427.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 27, 2000, Vol. 4, No. 82 Headlines ADVANCED MICRO DEVICES: Reports Record Sales and net Income ALTIVIA FINANCIAL: Ceases Loan Originations; Cuts Staff By 90% AMERICAN BANKNOTE: Seeks Court OK For Insurance Premium Financing AMERICAN GAMING: Reports Net Loss AMERICAN OUTPOST: Hires Renaissance Partners AURORA FOODS: Chase Manhattan To Buy Certain Accounts Receivable BALDWIN BUILING: Homeowners Settle Defect Action BRAZOS SPORTSWEAR: Order Extends Exclusivity BUSH LEASING: Hearing on Order Approving Bidding and Breakup Fee CHAI-NA-TA: Shareholders Approve Restructuring Plan CHS ELECTRONICS: Files Voluntary Petition Under Chapter 11 DAIEI OMC INC.: Books 59.8B Yen net loss for FY99 FAVORITE BRANDS: Effective Date of Plan FRONTIER AIRLINES: Stock Transactions Through Call Options FRUIT OF THE LOOM: Clarifies Adequate Protection Record Dates FRUIT OF THE LOOM: First Extension of Exclusivity GENICOM CORP: Files Voluntary Petition GRAHAM FIELD: Final Order Authorizing DIP Financing GRAHAM FIELD: Seeks Exclusivity Extension HARNISCHFEGER: Court Approves Assumption of Leases HUNTERS RIDGE: Case Summary LEVITZ: Sixteenth Amendment to DIP Facility NMT MEDICAL: Closes Sale To Integra For $12 Million NORTH AMERICAN VACCINE: BioChem Pharma Owns 40% of Stock PARAGON TRADE BRANDS: Arthur Andersen Replaced By Ernst & Young PENNCORP: Responds To Objections To Disclosure Statement PETSEC ENERGY: Files Voluntary Petition Under Chapter 11 PETSEC ENERGY: Sells Working Interests In Seven Leases PHILIP SERVICES: Effective Date of Plan PREMIER REHABILITATION: State To Take Over Nursing Home SAMSUNG MOTORS: Creditor vote on Renault deal TEU HOLDINGS: Auction Results and Hearing TEXFI INDUSTRIES: Seeks Authority To Hire Ernst & Young TRILOGY LIMITED: Case Summary and 14 Largest Unsecured Creditors TULTEX: Order Establishes Bar Dates ********* ADVANCED MICRO DEVICES: Reports Record Sales and net Income ----------------------------------------------------------- Advanced Micro Devices Inc. had record sales of $1,092,029,000 and record net income of $189,349,000 for the quarter ended April 2, 2000. The company reported strong growth in each of its product groups - the Computation Products Group, the Memory Group, and the Communications Group. Total revenues grew by 13 percent over the immediate-prior quarter ended December 26, 1999, and by 73 percent over the like period of 1999. In the immediate-prior quarter, AMD reported sales of $968,710,000 and net income of $65,080,000. In the first quarter of 1999, AMD reported sales of $631,593,000, and a net loss of $128,367,000. "AMD had the best quarter in its history," said W.J. Sanders III, chairman and chief executive officer. "Each of our product groups reported significant growth in the first quarter. Led by strength in PC processors and Flash memory sales, sales from AMD's three product groups grew by more than 13 percent sequentially and by more than 83 percent over the comparable period of 1999." "Unit sales of AMD Athlon(TM) processors increased by 50 percent to 1.2 million units," Sanders continued. "Total PC processor revenues grew 14 percent sequentially and by more than 65 percent over the first quarter of 1999. Total unit sales, including AMD Athlon and AMD-K6(R) family processors, reached a new record at nearly 6.5 million units. Reflecting a richer PC processor portfolio with the industry's broadest range of high-performance solutions, revenues from AMD Athlon processors exceeded revenues from AMD-K6 family processors." During the quarter, AMD introduced the industry's first 1- gigahertz (GHz)PC processor and 850-, 900-, and 950-megahertz (MHz) versions of the AMD Athlon processor. AMD also began sampling two new versions of the AMD Athlon processor family that incorporate on-chip L2 cache. The first, code-named "Thunderbird," is targeted at the performance segment of the PC market. The second, code-named "Spitfire," is targeted at the value segment. Both products are planned for shipment later this quarter. The company also commenced shipments of a 550-MHz AMD-K6-2 processor targeted at the value segment of the desktop PC market and a 500-MHz AMD-K6-2 processor for mobile systems. The company reported that continuing strong demand for Flash memory devices coupled with extraordinary operational execution resulted in record sales of $327 million for the Memory Group, an increase of 19 percent from the immediate-prior quarter and more than 150 percent from the comparable period of 1999. During the quarter, AMD concluded multi-year agreements with Alcatel and Cisco Systems to supply Flash memory products. AMD said it expects that demand for Flash memory devices will continue to exceed supply for the remainder of the year and into 2001. Communications Group sales increased by 7 percent over the immediate-prior quarter and by 59 percent over the first quarter of 1999 driven by strength in telecommunications line-card circuits and devices for physical-layer Ethernet solutions. ALTIVIA FINANCIAL: Ceases Loan Originations; Cuts Staff By 90% -------------------------------------------------------------- Altiva Financial Corporation reports that as of Friday, April 14, 2000 it had ceased origination of loans and had reduced staff by 90% in both Atlanta and its wholly owned subsidiary, The Money Centre in Charlotte, North Carolina. The above actions were taken when an immediate cash infusion into the company was not available. Consequently, the company was not able to continue normal operations. The company is pursuing an orderly winding-down of business activities and is seeking an arrangement with its creditors. Altiva Financial Corporation is a specialty financial services company headquartered in Atlanta, Georgia. AMERICAN BANKNOTE: Seeks Court OK For Insurance Premium Financing ----------------------------------------------------------------- The debtor, American Banknote Corporation, seeks court authority to enter into insurance premium financing agreement to finance a new crime and transit insurance policy with National Union Fire Ins. Co. for the debtor's subsidiaries. The policy is necessary for the debtor's reorganization to keep the business operations and assets of the subsidiaries insured. Cananwill has agreed to finance the payment for the premium for the policy substantially in accordance with the PFA for a total of payments to Cananwill of $124,924.30. AMERICAN GAMING: Reports Net Loss --------------------------------- American Gaming & Entertainment, Ltd. reported in its Form 10-QSB that net loss for common stockholders for the three months ended March 31, 2000 was approximately $ 452,000 or $ 0.04 per share, based upon a weighted average number of 12,533,948 common shares outstanding, as compared to a net loss for common stockholders of $ 2,330,000 or $ 0.19 per share for the three months ended March 31, 1999, based upon a weighted average number of 12,532,102 common shares outstanding. AMERICAN OUTPOST: Hires Renaissance Partners -------------------------------------------- American Outpost and Renaissance Partners L.C. jointly announced that Renaissance has been retained by Forman Enterprises Inc., which operates 51 American Outpost stores in outlet shopping centers, to provide consulting services in connection with the company's turnaround and restructuring, according to a newswire report. The company is currently operating under chapter 11 and has obtained DIP financing from PNC Bank N.A. Renaissance will provide services focused on merchandising, merchandise planning and allocation, distribution and financial planning. (ABI 26-Apr- 00) AURORA FOODS: Chase Manhattan To Buy Certain Accounts Receivable ---------------------------------------------------------------- On April 19, 2000, Aurora Foods Inc. entered into an agreement whereby The Chase Manhattan Bank agreed to purchase from time to time certain of the company's accounts receivable. The agreement provides that the amount of purchased and uncollected accounts receivable outstanding at any given time is not to exceed $60 million. Funds affiliated with Fenway Partners, Inc., McCown De Leeuw & Co. and UBS Capital LLC have agreed to participate, on a subordinated basis, in not less than 15% of this accounts receivable transaction. The purchase price will be calculated to include a customary discount to the amount of the receivables purchased. The company has agreed to pay customary fees in connection with this accounts receivable transaction. The agreement also contains customary representations, warranties and covenants by the company. The term of the agreement is for 364 days, and may be terminated by the company upon five days' prior written notice to Chase. BALDWIN BUILING: Homeowners Settle Defect Action ------------------------------------------------ Under the pressure of a potentially costly and lengthy trial, insurance companies for the bankrupt Baldwin Building Contractors and various subcontractors settled a construction defect lawsuit for $3.75 million, according to a newswire report. The Summit Court Homeowners Association, a 243-unit condominium complex located in Anaheim, Calif., was to begin a full trial on Monday in Orange County Superior Court. Summit Court was built between 1991 and 1995 by the bankrupt master developer Baldwin Builders and Baldwin Building Contractors L.P., which filed for chapter 11 in 1995. The association filed suit against Baldwin Building Contractors and various subcontractors on Sept. 12, 1997, claiming that the association was plagued by extreme winter weather, including El Nino-driven storms, citing defects including roof and deck leaks, sheet metal flashing failures, water intrusion through windows and sliding glass doors and plumbing and electrical defects. "It would have been a real travesty if these powerful insurance companies were able to force the association into a costly trial, pitting their interests ahead of these homeowners who need the money to fix their homes," said construction defect attorney, Thomas E. Miller. "I have heard of cases settling on the courthouse steps but I never thought our own homeowners association would have to fight these big insurance companies to the very end," says Barbara Rennes, the president of the board of directors of The Summit Court Homeowners Association. "We are just pleased we do not have to endure the expense of going to a lengthy trial and that we can focus our energy on the repair and restoration of our community and homes."(ABI 26-Apr-00) BRAZOS SPORTSWEAR: Order Extends Exclusivity -------------------------------------------- The US Bankruptcy Court for the District of Delaware entered an order extending the Plan Proposal Period through and including May 15, 2000. The Solicitation Period is extended through and including July 14, 2000. BUSH LEASING: Hearing on Order Approving Bidding and Breakup Fee ----------------------------------------------------------------- An expedited hearing before the Honorable Thomas F. Waldron on the debtor's motion for an order approving bidding procedures and breakup fee regarding debtor's proposed sale of its lease portfolio has been scheduled for April 26, 2000 at 9:00 AM. A competing offer must be specific about the method of payment, must exceed the original offer by at least $1 million, plus the Breakup Fee, in the aggregate, must provide for payment to debtor at closing of not less than $185 million. The initial deposit must be in the amount of $1 million and an additional $1 million, if it is the winning offeror. CHAI-NA-TA: Shareholders Approve Restructuring Plan --------------------------------------------------- Chai-Na-Ta Corp. (TSE: "CC"; OTCBB: "CCCFF") President and CEO, Gerry Gill announced today that shareholders at the Company's Annual General Meeting approved the issuance of approximately 7,246,300 common shares for CDN$5 million to Road King Infrastructure Ltd. (RKIL), and the 20,399,149 convertible preferred shares to John Hancock Life Insurance Company to retire CDN$13,879,580 of secured debt. Chai-Na-Ta also reported that its new investor, RKIL, has entered into agreements with two of Chai-Na-Ta's major creditors to acquire all, or part of, their interest in the Company. RKIL has reached an agreement with HSBC Private Equity (Asia) Ltd. to purchase their 1,474,895 common shares in the Company which was acquired through the Company's debt restructuring announced last week. These shares will have a one year hold on trading. RKIL also reached agreement with John Hancock Life Insurance Company to purchase their CDN$10 million secured debt and 20,399,149 of non-voting convertible preferred shares. RKIL also agreed to forgive $5 million of the secured debt and to reduce the interest rate on the remaining balance from 10.6% to 0%. The debt will be extended for a five-year term. Both agreements are subject to regulatory approval. Chai-Na-Ta is the world's largest supplier of North American ginseng. CHS ELECTRONICS: Files Voluntary Petition Under Chapter 11 ---------------------------------------------------------- On April 4, 2000, CHS Electronics, Inc., filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code (in the United States Bankruptcy Court for the Southern District of Florida. No trustee, examiner with extended powers, receiver, fiscal agent or similar officer has been appointed with respect to the company, which continues to operate as a debtor in possession. The company filed a Plan of Reorganization with the Bankruptcy Court. The principal terms of the Plan are as follows: (1) The company will sell the capital stock of certain of its subsidiaries and certain other assets of the company (the "European Assets") to Europa IT ApS, a Danish corporation, in accordance with the terms of a Letter Agreement dated March 17, 2000, entered into by the company, Europa and certain creditors of the company. The European Assets represent a substantial portion of the company's total assets. 2) In consideration for the European Assets, CHS will receive (a) the number of shares of common stock of Europa equal to 20% of the total outstanding fully diluted common stock of Europa as of the date that is thirty days after the date the order entered by the Bankruptcy Court confirming the Plan becomes a final order; (b) $22.5 million in aggregate principal amount of promissory notes issued by Europa on the Effective Date, bearing interest at the rate of 10% per annum and due in thirty months and (c) $45 million in aggregate par value of redeemable, convertible preferred stock issued by Europa on the Effective Date. 3) All of the consideration received by the company from Europa for the European Assets (except for such number of the Europa Shares as shall constitute 5% of the fully diluted Europa Common Stock, which will be retained by the reorganized company) shall be distributed to the company's creditors in accordance with the Plan. Furthermore, 25% of the equity of the reorganized company will be distributed to the company's creditors in keeping with the Plan. The term "Reorganized Company" refers to the successor entity to be formed pursuant to the Plan as a result of the entry by the Bankruptcy Court of the order confirming the Plan, when such order becomes a final order. (4) Holders of the issued and outstanding shares of common stock of the company (including any warrants and options to purchase such shares) will, in the aggregate, receive 75% of the common stock of the reorganized company and all such outstanding shares of common stock of the company will be deemed to be canceled and extinguished on the Effective Date. As of April 18, 2000, the following creditors of the company had approved the Plan and had signed the Letter Agreement: Alliance Capital Management, LP; Gabriel Elias; Morgan Stanley Dean Witter Asset Management (various entities); Van Kampen High Income Corporate Bond Fund; Warburg Dillon Read, LLC; ML CBO XVIII (Cayman) Ltd.; ML CBO XIX (Cayman) Ltd.; AIU Insurance; American Home Assurance Co.; Commerce and Industry Insurance Company; National Union Fire Insurance Company of Pittsburgh, PA; The Insurance Company of the State of Pennsylvania; Computer Associates International, Inc.; IBM Credit Corp. (various entities) and Microsoft Ireland Operations Limited. DAIEI OMC INC.: Books 59.8B Yen net loss for FY99 ------------------------------------------------- Daiei OMC Inc. (8258) reported on Thursday a 59.8 billion yen net loss for the fiscal year ended Feb. 29, turning around from a 212 million yen profit the year before. Its mainline credit card business was sound, but the company took an extraordinary loss of 119.2 billion yen to dispose of trade credit that had turned sour. Revenue went up 3% to 99.1 billion yen as the number of cardholders rose by 300,000 to 6.03 million. Total transaction volume grew 6% to 1.42 trillion yen. Disposing of bad credit extended to businesses helped reduce related costs by 9.3 billion yen, and pretax profit jumped 150% to 20 billion yen. The company offset part of the extraordinary loss with an 8.4 billion yen extraordinary gain, largely from the sale of Recruit Co. shares. Its switch to the deferred-tax accounting system also resulted in a 42.9 billion yen tax carryback. Daiei OMC said it would focus on consumer business this fiscal year, and plans to post a 14.5 billion yen net profit for the term. Revenue is projected to rise 4% to 103 billion yen, while pretax profit will grow 25% to 25 billion yen. The number of cardholders is seen rising by 400,000, and total transaction volume by 6%. (Nikkei 21- April-2000) FAVORITE BRANDS: Effective Date of Plan --------------------------------------- April 11, 2000 is the Effective Date of the First Amended Joint plan of Reorganization of Favorite Brands International Holding Corp. and its debtor subsidiaries. FRONTIER AIRLINES: Stock Transactions Through Call Options ---------------------------------------------------------- B III Capital Partners LP, DDJ Capital III, LLC and DDJ Capital Management LLC beneficially own 3,292,229 shares of the common stock of Frontier Airlines Inc., which amount represents 17.9% of the outstanding common stock of the company. Sole voting and dispositive powers are attached to the share ownership. The transactions were accomplished through Call Options with all purchases traded on public markets and therefore there are no written agreements covering the transactions. On April 6, 2000, B III Capital Partners, L.P. (the Fund) wrote 100 November 2000 Call Options with a strike price of $15 in consideration for cash in the amount of $16,624.43, and again on April 7, 2000, the Fund wrote 1,900 November 2000 Call Options with a strike price of $15 in consideration for cash in the amount of $383,369.06. On April 10, 2000, the Fund wrote 1,000 November 2000 Call Options with a strike price of $17.50 in consideration for cash in the amount of $166,244.37, and again on April 13, 2000, the Fund wrote 1,000 November 2000 Call Options with a strike price of $17.50 in consideration for cash in the amount of $147,495.00. FRUIT OF THE LOOM: Clarifies Adequate Protection Record Dates ------------------------------------------------------------- Fruit of the Loom, Ltd. (NYSE: FTL), one of the world's leading marketers and manufacturers of basic family apparel, announced that as a result of the Company's bankruptcy filing December 29, 1999, the timing of interest payments on the above referenced public bond issues will be fixed pursuant to a stipulation and order to be considered by the Bankruptcy Court as soon as is practicable under the Chapter 11 proceeding. Fruit of the Loom made the first and second adequate protection payments due under the Adequate Protection Order dated January 28, 2000, to the Indenture Trustees on February 22, 2000 and April 3, 2000, respectively. To comply with the Adequate Protection Order, the Company will continue to make interest payments on these three bonds, however, the payments shall be made quarterly in lieu of the former semi- annual payments. Once approved, the Indenture Trustees will publish notice of the entry of the stipulation and order in The Wall Street Journal within three (3) business days of its entry. The record date for the initial adequate protection payment will be the first business day that is fifteen (15) days after such publication. The stipulation and order directs the Indenture Trustees to pay the interest accrued under the respective Indentures through March 31, 2000, to the holders of the Notes as of the initial adequate protection payment record date. Thereafter, the Indenture Trustees for the 7-3/8% Indenture and the 6-1/2% Indenture will distribute future quarterly adequate protection payments to the holders of record within ten (10) days of a record date that will be set as the first business day that is twenty (20) days after the date on which the respective Indenture Trustees received the adequate protection payments from Fruit of the Loom. The Indenture Trustee for the 7% Debentures will distribute future adequate protection payments to 7% noteholders within ten (10) days of a record date that will be the fifteenth day of the month before each scheduled quarterly adequate protection payment. FRUIT OF THE LOOM: First Extension of Exclusivity ------------------------------------------------- Fruit of the Loom tells Judge Walsh that it is still in the process of stabilizing its business and formulating a business plan. Until the company is stabilized and a business plan is formulated, it will be impossible to craft a feasible plan of reorganization. Accordingly, the Debtors ask Judge Walsh for an extension, pursuant to 11 U.S.C. Sec. 1121, of their exclusive period during which to file a plan of reorganization and solicit acceptances of that plan from their creditors. The Debtors remind the Court that their cases are large and complex. This alone, the Debtors suggest, constitutes cause for an extension. But the Debtors don't rely on this single argument, relating how diligent they've been in the administration of their chapter 11 cases. The reorganization process, the Debtors envision, will take place in four stages: (1) The Initial Stabilization Phase as the Debtors and other parties in interest recover from the shock of the chapter 11 filing. Stability will be hallmarked by: (a) an adequate supply of raw materials and merchandise on normal pricing terms; (b) customers willing to place purchase orders substantially similar to historical orders; and (c) employees declining headhunters' and competitors' alternative employment offers. (2) The Business Assessment Phase where management turns its focus toward reevaluating and testing basic operating formulae and evaluating customer and vendor preferences. The Debtors indicate that they've already revised their Fiscal Year 2000 Business Plan and have shared it with an unnamed constituency, perhaps the Lenders. The Debtors envision drafting a long-term business plan that will optimize and focus FTL's product offerings to its customers to improve sales productivity and reduce overhead. (3) The Plan of Reorganization Development and Negotiation Phase will entail the Bar Date and claims reconciliation process; valuation of the Fruit of the Loom business; review of the then- current economic environment, interest rates, operating performance and other considerations. "The precise articulation of these assumptions and factors may create significant differences in the anticipated value available for distribution to creditors," the Debtors say, adding that "[t]he ranges of assumptions and values can indicate great differences in the form, currency, and amount of recovery available to each creditor and equity constituency." As a result, the Debtors speculate, there will probably be extensive and complex negotiations between and among all interested constituencies regarding these assumptions and related issues affecting likely distributions under any plan of reorganization. (4) The Plan of Reorganization Confirmation Phase will follow once the principal constituencies agree on the principal economic terms for a plan. This phase will require drafting voluminous documentation and extensive exhibits. The documentation, the Debtors predict, will spawn more lengthy conversations and negotiation. "The [Debtors have] failed to aver reasonable grounds calculated to establish the requisite cause for an extension of exclusivity in which only the Debtors may file and solicit acceptances of a plan of reorganization as is required by 11 U..S.C. Sec. 1121(d)," Daniel K. Aston, Esq., an Attorney Advisor for the Office of the United States Trustee, asserts in an Objection to the Debtors' Motion. "The U.S. Trustee believes that it is unclear whether a completing disclosure statement plan will be filed. To the extent that a competing plan might be filed by another interested party, the U.S. Trustee believes, and therefore avers, that this may have a salutary effect upon the administration of [these cases]. Based upon information received, the U.S. Trustee believes, and therefore avers, that a competitive plan confirmation process may be beneficial to the estate and creditors. Therefore, an extension of exclusivity may not be in the best interests of the estate and its creditors and the [Debtors] should be left with burden on the merits," Mr. Aston tells the Court, urging wholesale denial of the Debtors' Motion. Judge Walsh rejected the U.S. Trustee's arguments, finding that Fruit of the Loom, makes its case for extension of its exclusive periods. Rather than granting the nine-month extensions equested by the Debtors, Judge Walsh grants the Debtors an extension, through and including October 31, 2000, of their exclusive period during which to file a plan of reorganization and a concomitant extension, through December 30, 2000, of their time within which to solicit acceptances of that plan. Judge Walsh makes it clear that these extensions are without prejudice to the Debtors' absolute right to request further extensions for cause. (Fruit of the Loom Bankruptcy News Issue 5; Bankruptcy Creditors' Services Inc.) GENICOM CORP: Files Voluntary Petition -------------------------------------- As previously noted on March 24, 2000, Genicom Corporation filed, in the United States Bankruptcy Court for the District of Delaware, a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. On March 30, 2000, the Bankruptcy Court approved a proposed procedure for the solicitation of bids for the sale of the company's assets. On that date, the Court also approved a break up fee for Platinum Equity Holdings in the event they were not the successful bidder for the assets and they elected to leave their offer in place after April 7, 2000. The Platinum Equity Holdings offer has been withdrawn. Pursuant to the approved procedure, bids for all or a portion of the company's assets were due to be received by the company on April 24, 2000. In the event there were competitive bids, the debtor was to hold an auction among the bidders on May 1, 2000. The Court has set May 3,2000 as the date on which it will consider confirmation of the sale(s) of assets. The company has filed a Motion for Order Authorizing Sale of All of its Assets Free and Clear of All Liens, Claims and Encumbrances, Authorizing Payment To Secured Creditors Holding Valid Prior Liens On Assets Sold, and Authorizing Assumption and Assignment of Such Executory Contracts and Unexpired Leases As the Successful Bidder(s) May Elect to Acquire. A Motion to Limit the Time for Objection until April 26, 2000 for the foregoing motion has also been filed. GRAHAM FIELD: Final Order Authorizing DIP Financing --------------------------------------------------- The US Bankruptcy Court for the District of Delaware entered an order authorizing the debtors, Graham-Field Health Products, Inc., et al. to obtain DIP financing from Congress Financial Corporation, such amounts not to exceed $25 million, subject to all of the terms and conditions of the financing agreements. GRAHAM FIELD: Seeks Exclusivity Extension ----------------------------------------- The debtors, Graham-Field Health Products, Inc., et al. seek court authority to extend the exclusive periods during which the debtors may propose and file a plan of reorganization and solicit acceptances thereof. A hearing will be held on May 5, 2000 at 2:00 PM at the US Bankruptcy Court for the District of Delaware. The debtors request 120-day extensions of each of the exclusive periods, through and including August 23, 2000 and October 22, 2000, respectively. The debtors state that they have focused their efforts on stabilizing and improving their business operations. The debtors have also adjusted to a new management team that has been working toward securing a replacement DIP credit facility. Over the next few weeks, the debtors intend to formulate and test alternative strategic plans designed to maximize the value of the debtors' estates. The debtors will require additional time to evaluate such alternatives in light of actual results, making refinements, and working through their proposals with the lenders and the Creditors' Committee. The Committee supports the extensions of the Exclusive Periods. HARNISCHFEGER: Court Approves Assumption of Leases -------------------------------------------------- Upon the Debtors' motion, the Court authorized for the assumption of the real property leases for: (1) The Delaware Corporate Headquarters; (2) Harnco's global computer operations at 2116 East Norse Avenue, Cudahy, Wisconsin. (Harnischfeger Bankruptcy News Issue 22; Bankruptcy Creditor's Service Inc.) HUNTERS RIDGE: Case Summary ---------------------------- Debtor: Hunters Ridge, LLC Suite 120 444 East Warm Springs Rd Las Vegas, Nevada 89119 Petition Date: April 18, 2000 Chapter 11 Court: District of Nevada Bankrupcy Case No.: 00-12785 Judge: Robert C. Jones Debtor's Counsel: Nile Leatham, Esq., Kolesar & Leatham, Chtd. Suite 380 3320 West Sahara Avenue Las Vegas, NV 89102 Total Assets: $ 3,159,484 Total Debts: $ 4,327,613 LEVITZ: Sixteenth Amendment to DIP Facility ------------------------------------------- Judge Walrath approved a Sixteenth Amendment of the Debtors' DIP Credit Agreement. Under the Sixteenth Amendment, M.D. Sass Corporate Resurgence Partners, L.P., as the Overadvance Term Lender, will increase availability from $5,000,000 to $15,000,0000. The Agent and the Lenders agree to waive any event of default under Section 8.1 of the Credit Agreement in anticipation that Minimum EBITDA for the period from April 1, 1999, to December 31, 1999, will not exceed $4,000,000 as previously projected. BT Commercial Corporation, as the Agent, collects a $50,000 fee under the Sixteenth Amendment. (Levitz Bankruptcy News Issue 43; Bankruptcy Creditors' Services Inc.) NMT MEDICAL: Closes Sale To Integra For $12 Million --------------------------------------------------- NMT Medical, Inc. has closed on the previously announced agreement to sell the Selector(R) Ultrasonic Aspirator, Ruggles(TM) Surgical Instruments and cryosurgery product lines of its NMT Neurosciences division, including certain assets and liabilities, to Integra LifeSciences Holdings Corporation for $12 million in cash. The proceeds will be used for debt reduction of $5.9 million with the remainder for general working capital requirements. Commenting on the news, Thomas M. Tully, President and Chief Executive Officer of NMT Medical, said, "With the closing of this transaction we can focus more of our management and financial resources on the higher growth and profit potential of our cardiovascular businesses. The Simon Nitinol Vena Filter and the CardioSEAL(R) Septal Occluder both achieved record revenue levels during the first quarter. More than 45 interventional cardiology centers have received Institutional Review Board (IRB) approval for implantation of the CardioSEAL based on our three FDA approvals under Humanitarian Use Designation regulations. More than 90 other centers are in the process of gaining IRB approval." Mr. Tully continued, "NMT Neurosciences will now focus away from capital equipment sales and onto the sales of its remaining implantable products and disposables, while reducing overall expenses. These products represented approximately $20 million of sales in 1999." NMT Medical designs, develops and markets innovative medical devices that utilize advanced technologies and are delivered by minimally invasive procedures. The company's products are designed to offer alternative approaches to existing complex treatments, thereby reducing patient trauma, shortening procedure, hospitalization and recovery times, and lowering overall treatment costs. The company's medical devices include self-expanding stents, vena cava filters and septal repair devices. The NMT Neurosciences division serves the needs of neurosurgeons with a range of implantable and disposable products, including cerebral spinal fluid shunts, external drainage products, and the Spetzler(TM) Titanium Aneurysm Clip. NORTH AMERICAN VACCINE: BioChem Pharma Owns 40% of Stock -------------------------------------------------------- BioChem Pharma Inc., of Laval, Quebec, Canada, beneficially owns 14,326,418 shares of the common stock of North American Vaccine Inc., representing 40% of the outstanding common stock of that company. BioChem exercises sole voting and dispostitive power over the stock owned. North American Vaccine Inc. approached BioChem for assistance in repaying outstanding amounts under a line of credit that had been extended by Bank of America, N.A. and guaranteed by Baxter, as well as to secure additional working capital in order to finance its operations through either the closing of the arrangement or until the Share Exchange Agreement is terminated by the parties thereto. BioChem, North American Vaccine, Baxter, Frost and Bank of America entered into an Assignment, Acceptance and Amendment Agreement dated April 17, 2000, whereby BioChem agreed to provide up to $40 million in financing for company operations through June 30, 2000. The Transitional Financing includes: (i) BioChem's assumption of the line of credit previously provided by Bank of America and guaranteed by Baxter under which the company had drawn approximately $20 million; and (ii) up to an additional $20 million. Amounts outstanding under the Transitional Financing accrues interest at a rate of 15% per annum and is subject to a deferred financing fee of $10 million. The Transitional Financing, including the deferred financing fee, is repayable in full on June 30, 2000 or upon a change in control of the company, whichever occurs first. Baxter has consented to the Transitional Financing and is being released from its guarantee under the Original Line. Repayment of the Transitional Financing is secured by various assets of North American Vaccine. BioChem Pharma is an international biopharmaceutical company dedicated to the research, development and commercialization of innovative products for the prevention and treatment of human diseases with a focus in the anti-infective and anticancer areas. PARAGON TRADE BRANDS: Arthur Andersen Replaced By Ernst & Young --------------------------------------------------------------- Effective April 12, 2000, the Audit Committee of the Board of Directors of Paragon Trade Brands, Inc. approved the dismissal of Arthur Andersen LLP as the independent accountant engaged to audit the company's financial statements. Also effective April 12, 2000, the Audit Committee approved the engagement of Ernst & Young LLP as the new independent accountant to replace Arthur Andersen LLP and assigned to it the responsibility of auditing the company's 2000 financial statements. Arthur Andersen's audit opinion for fiscal year 1998 contained an explanatory fourth paragraph with respect to the company's ablity to continue as a going concern, but contained no other qualifications, modifications or disclaimers. Arthur Andersen's audit opinion for fiscal year 1999 was unqualified. PENNCORP: Responds To Objections To Disclosure Statement -------------------------------------------------------- PennCorp Financial Group, Inc., debtor, responds to objections filed by NBT of Delaware Inc. and Steven W. Fickes to the Disclosure statement proposed by the debtor and the unofficial committee of preferred shareholders. The debtor answers each objection, some of which are answered by amendments or additions to the Disclosure Statement. The debtor responds to the allegation that the sale of assets was contrary to Delaware law, by stating that the Disclosure Statement merely describes historical transactions and does no t address unsubstantiated allegations. The debtor also answers objections to releases by stating that the plan does not operate to release any claims or causes of action that holders of claims against or equity interests in the debtor may individually hold against non- debtors. PETSEC ENERGY: Files Voluntary Petition Under Chapter 11 -------------------------------------------------------- On April 13, 2000, Petsec Energy Inc. filed a voluntary petition seeking relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Western District of Louisiana, Opelousas Division. The Court assumed jurisdiction on that day. Subject to the supervision of the Court, the company remains in possession of the its assets and will manage the business for the benefit of the company's creditors and equity holders. The filing will allow Petsec Energy Inc. 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. It will also afford the company the opportunity to evaluate all other options. To maintain liquidity through the reorganization process, including payment of suppliers and trade creditors, the company is negotiating a commitment for up to US$30 million of post- petition financing from Foothill Capital, Petsec's existing secured lender, subject to court approval. Petsec Energy Ltd is an independent oil and gas exploration and production company operating in the shallow waters of the US Gulf of Mexico. PETSEC ENERGY: Sells Working Interests In Seven Leases ------------------------------------------------------ Petsec Energy Inc. has sold its working interests in seven of its leases, effective 1 February 2000. The sale price was US$8.45 million cash. Petsec now holds an interest in 41 leases, with production established on 21 of them. The company has sold its 50% working interest in the West Delta 112 & 113 leases, its 25% working interest in the West Cameron 515, 516 and 526 leases and its 25% working interest in the Vermilion 34 and 47 leases. Net proven reserves attributable to the West Cameron 515 and 516 leases, as determined by Ryder Scott Company L.P., Petroleum Consultants at 31 December 1999, were 95,671 barrels of oil and 5.3 billion cubic feet of gas. The company had not booked any reserves on the other leases that were sold. The net proceeds from the sale will be used to reduce the company's secured bank debt to approximately US$7.7 million. Petsec is an independent oil and gas exploration and production company operating in the shallow waters of the US Gulf of Mexico. The company's corporate office is in Sydney, Australia. Field operations are managed in the US from Lafayette, Louisiana. PHILIP SERVICES: Effective Date of Plan --------------------------------------- On November 30, 1999, the US Bankruptcy Court for the District of Delaware confirmed the First Amended Joint Plan of Reorganization of Philip Services (Delaware), Inc., et al. as modified. April 7, 2000 is the Effective date of the plan. PREMIER REHABILITATION: State To Take Over Nursing Home ------------------------------------------------------- A financially troubled nursing home, Premier Rehabilitation and Skilled Nursing in Beloit which is owned by Perennial Health Inc., a national chain that filed for Chapter 11 bankruptcy protection March 31, The Associated Press reports, has been cited by the state of Wisconsin for 29 federal violations and 11 state violations. SAMSUNG MOTORS: Creditor vote on Renault deal --------------------------------------------- Creditors of Samsung Motors will hold a plenary session tomorrow to vote on Renault's final terms on its acquisition of the ailing Korean automaker, said main creditor Hanvit Bank yesterday. According to the bank, representatives of Samsung Motors creditors and Renault reached a tentative agreement on the French auto giant's takeover of controlling shares in Samsung during their last-stage talks in Paris on Saturday. The Paris agreement will be presented to a plenary meeting, slated for tomorrow morning in Seoul, of Samsung Motors' 16 creditor institutions, for the final ratification, they said. If the tentative accord is approved, the signing ceremony will be held on Thursday or Friday in Pusan, the host to Samsung's sole passenger-car plant. In the case of disapproval, both parties are likely to resume negotiations in Seoul. Details of the Paris agreement were not revealed. But a Hanvit executive said, "The cost of Renault's purchase of about 70 percent of Samsung Motors is estimated to be in the range of $550-570 million (609.4-631.5 billion won)." Prior to Saturday's negotiations, Samsung creditors had reportedly asked for $600 million, whereas Renault stuck to $540 million. At tomorrow's meeting, the 16 Samsung creditors will exercise their voting rights at the ratio of credit to the automaker. Over 75 percent of the votes are needed for final approval. Analysts say the results are quite unpredictable, noting that most creditor institutions had strongly demanded a sale price of at least $590 million. The Hanvit executive said Renault proposed paying $100 million in cash and assumed $200 million of Samsung's total debts estimated at $3.7 billion, adding that the French firm will pay the remainder out of Samsung's operating profits over the next 10 years. Under the deal, Renault will set up a new joint-venture company to run Samsung Motors and hold about a 70.1 percent stake in the concern, while the Samsung Group will take over 19.9 percent and creditors the remaining 10 percent. Renault is known to agree to keep Samsung Motors' SM brand alive for five years, turning out 50,000 SM5 cars this year and expanding the firm's annual capacity to 400,000 units by 2005. Renault also pledged to retain all of Samsung's 2,000 employees and resume full-scale production, which has been running at well below its annual capacity of 240,000 units a year. Analysts speculated that should the Paris agreement be endorsed, the possibility of Renault taking over the Samsung Motors' truck plant in Taegu may become higher. Renault has long had plans to buy the commercial-vehicle plant from Samsung Motors or Daewoo Motor, they said. If the Samsung-Renault deal goes through, it would be the first-ever acquisition by a foreign firm of a local carmaker. Samsung Motors, which was founded in 1995 and started producing cars in 1997, was put under court receivership 10 months ago. Renault is expected to create enormous synergies by combining its Japanese affiliate Nissan's technologies and Samsung's cheap parts and labor. Renault's long-term plan calls for a market share of 10 to 15 percent in Korea in five years, or 127,000 units a year. Renault also expects workers at the Pusan plant to increase to 35,000 persons this year and 350,000 by 2005. Meanwhile, officials at Hyundai Motor-Kia Motors feared that Renault's takeover of Samsung would surely eat into its mid-sized and recreational vehicle markets. (The Korea Herald 24-April-2000) TEU HOLDINGS: Auction Results and Hearing ----------------------------------------- Twenty properties were sold at auction on April 17, 2000 with gross proceeds of $1,469,000 and total estimated cures of $321,711. A hearing on the assumption and assignment of the leases will be convened before the Honorable Peter J. Walsh, Bankruptcy Judge, on April 27, 2000 at 9:30 AM. TEU Auction 'Results: Intimate Brands Package: Galleria at White Plains White Plains, NY Trumbull Park, Trumbull, CT South Park Mall, Charlotte, NC Roosevelt Field, Garden City, NY Livingston Mall, Livingston, NJ Stamford Town Center, Stamford, CT G&G Package: Mall St. Matthews, Lousiville, KY Orland Square, Orland Park, IL South Hills Village, Pittsburgh, PA Pembroke Lakes Mall Pembroke Pines, FLA Payless Package: Rosedale Center, Roseville, MN South Park Center, Strongville, OH Stores Pulled - Pre Auction Cross Creek Mall, Fayetteville, NC Augusta Mall, Augusta, GA The Mall at Tuttle Crossing Cublin, OH Individually Auctioned Stores: Crestwood Plaza, St. Louis, MO Garden State Plaza, Paramus, NJ Deptford Mall, Deptford, NJ Broadway New York, NY Tri-County Mall Cincinnati, OH TEXFI INDUSTRIES: Seeks Authority To Hire Ernst & Young ------------------------------------------------------- The debtor, Texfi Industries, Inc. seeks court authority to retain Ernst and Young LLP as accountant to the debtor. A hearing on the application will take place before the Honorable Arthur J. Gonzalez on May 3, 2000 at 10:00 AM. TRILOGY LIMITED: Case Summary and 14 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Trilogy Limited Liability Co. 2450 Chandler, Suite 151 Las Vegas, Nevada 89120 Petition Date: April 24, 2000 Chapter 11 Court: District of Nevada Bankruptcy Case No.: 00-12945 Judge: Linda B. Riegle Debtor's Counsel: David A. Riggi 823 S Las Vegas Blvd Las Vegas, NV 89101 702-735-4335 Total Assets: $ 1,140,000 Total Debts: $ 1,265,000 14 Largest Unsecured Creditors ABC Roofing $ 3,987 Alpha Engineering $ 147 American Woodmark $ 9,331 Bilt Best of California $ 3,355 Charmac Builder Services $ 516 Desert Door & Trim $ 1,321 Desert Specialties $ 610 J&G Plumbing $ 7,159 Kafoury, Armstrong & Co. $ 3,656 Nevada Framers, Inc. $ 2,170 Parkway Landscape $ 12,435 Sears Commercial Credit $ 8,822 Terracon $ 1,301 United Drywall & Painting $ 21,495 TULTEX: Order Establishes Bar Dates ----------------------------------- The US Bankruptcy Court for the Western District of Virginia, Lynchburg Division entered an order establishing the general bar date as June 15, 2000. ********* 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. 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