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/raid1/www/Hosts/bankrupt/TCR_Public/000428.MBXT R O U B L E D C O M P A N Y R E P O R T E R Friday, April 28, 2000, Vol. 4, No. 83 Headlines AMERICAN HEALTH: Huge Contract Lost CHS ELECTRONICS: Tells Court of Liquidation Plans CRIIMI MAE: Judge Requests Additional Filoings By May 9 DAEWOO GROUP: Prepackaged bankruptcy ahead? DAEWOO GROUP: Receivership plan denied DAEWOO MOTOR: GM, Ford to go to Korea next week FRUIT OF THE LOOM: Seeks To Extend Time To Assume/Reject Leases GRAND COURT LIFESTYLES: Holding Company is Sole Debtor HARVARD PILGRIM: HMO To Include Payment Plan L'ETOILE: Files For Chapter 11 Protection LA POSADA: Court Approves Prinova Bid LESLIE FAY: Employee Reports Falsifying Entries LEVITZ: Eighth Motion To Extend Time To Assume/Reject Leases LOEHMANN'S: Court Approves Disclosure Statement MARINER POST-ACUTE: Seeks Extension of Exclusivity MICROAGE: Bonus Program To Retain Employees ORIOLE HOMES: S&P Lowers Ratings PACKAGING RESOURCES: Moody's Downgrades Ratings PINNACLE MICRO: Files for Bankruptcy Protection PRIMARY HEALTH: More Buyers Surface SABRATEK: To Pursue Lawsuit SAUCY BREAD: Reverse Takeover Abandoned SOUTH FULTON HOSPITAL: Files Chapter 11 US MEDIA HOLDINGS: Files For Chapter 11 Bankruptcy Protection BOND PRICING FOR WEEK OF APRIL 24, 2000 ********* AMERICAN HEALTH: Huge Contract Lost ----------------------------------- The Chicago Tribune reports on April 22, 2000 that the American Health Care Providers Inc. on Friday lost a contract to insure 19,000 people enrolled in the Medicaid health insurance program for the poor. The Illinois Department of Public Aid, which administers the state-federal Medicaid program, is terminating its 15-year relationship with American on April 30 as state insurance regulators work to liquidate the troubled health maintenance organization because of its alleged insolvency. Within three months, Richton Park-based American's business will be cut to less than a quarter of what it was just nine months ago after three major contracts were terminated in the past week. American's chief executive and founder, Asif Sayeed, said Friday that the company is working to contract with new doctors and hospitals, pointing to a contract he said the HMO signed this week with Sinai Health System, which includes two hospitals and a network of doctors and clinics on Chicago's West Side. Sinai officials could not be reached for comment. American will soon have fewer than 40,000 enrollees, compared with 90,000 when the Insurance Department took its action in February. The HMO had 170,000 enrollees last July after a flurry of acquisitions of other financially troubled managed-care plans. CHS ELECTRONICS: Tells Court of Liquidation Plans ------------------------------------------------- According to a report in The Miami Herald on April 27, 2000, lawyers for CHS Electronics told the U.S. Bankruptcy Court Wednesday that the company will liquidate its assets after it completes the sale of its European subsidiaries. The plan to liquidate the once-high-flying Miami company came Tuesday, as CHS met with a group of its creditors, which includes equipment manufacturers such as Compaq Computer, IBM, Seagate Technologies, and Mannesman Dematics of Germany. CHS had given the companies guarantees on behalf of its subsidiaries. These creditors represent more than half of $ 495 million in debt that CHS declared when it filed for bankruptcy protection this month. Holders of $ 200 million of CHS notes represent its other major group of creditors. When CHS filed for Chapter 11 protection, it planned to retain a 5 percent stake in the company that would acquire its European assets. CHS also had planned to emerge as an online computer vendor, issuing new stock. CHS still wants to go forward with the sale of its existing European subsidiaries to a new company, Europa ITApS, based in Denmark. The creditors are hoping that there are competing bidders for these European subsidiaries. There will be a hearing on May 10, 2000 for CHS and its creditors to set a deadline for bids. Europa is controlled by Mark Keough, a former CHS executive. Another company he controls currently has a management contract with CHS and is operating the European subsidiaries. According to the article, Judge Robert A. Mark wanted assurances that other potential bidders would be treated fairly and given accurate information, since the assets for sale "are now being managed by the stalking horse." These European subsidiaries are the bulk of the assets that CHS has left. Lawrence Larose, an attorney representing the CHS noteholders, told the court that CHS hired Raymond James & Co., an investment banker, last September to find a buyer. CRIIMI MAE: Judge Requests Additional Filoings By May 9 ------------------------------------------------------- During a hearing yesterday on the approval of a disclosure statement filed by CRIIMI MAE Inc. (NYSE: CMM) and two affiliates with respect to their joint plan of reorganization, Bankruptcy Judge Duncan W. Keir requested the filing of additional legal briefs by May 9, 2000 on two issues raised at the hearing. The issues raised relate to an objection to the disclosure statement filed by Salomon Smith Barney Inc. and Citicorp Real Estate, Inc. The SSB objection is the only objection to CRIIMI MAE's disclosure statement pending before the Bankruptcy Court. On April 25, 2000, CRIIMI MAE filed a Third Amended Plan of Reorganization and a proposed Second Amended Disclosure Statement in connection with yesterday's hearing. The Company is filing a Current Report on Form 8-K with the Securities and Exchange Commission, which will include the plan and disclosure statement as exhibits. On October 5, 1998, CRIIMI MAE Inc. and two affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code. Before filing for reorganization, the Company had been actively involved in acquiring, originating, securitizing and servicing multi- family and commercial mortgages and mortgage related assets throughout the United States. Since filing for Chapter 11 protection, CRIIMI MAE has suspended its loan origination, loan securitization and CMBS acquisition businesses. The Company continues to hold a substantial portfolio of subordinated CMBS and, through its servicing affiliate, acts as a servicer for its own as well as third party securitizations. DAEWOO GROUP: Prepackaged bankruptcy ahead? ------------------------------------------- The government plans to drastically shorten the workout period of Daewoo flagship subsidiaries Daewoo Motor and Daewoo Electronics by putting them through a new prepackaged bankruptcy process. According to the Ministry of Finance and Economy (MOFE) Monday, it has already completed talks with the Ministry of Justice (MOJ) on the introduction of prepackaged bankruptcies, which greatly simplify procedures to activate court control over firms undergoing workouts. Currently, it can take as long as 18 months before a firm is placed under court control, but the new prepackaged system can see court procedures completed in just 2 months. MOFE said that workout procedures for the two Daewoo subsidiaries have been delayed either due to disagreements between creditors or because of the resistance of minor shareholders to the outcome of the annual general meeting. (Digital Chosun 24-April-2000) DAEWOO GROUP: Receivership plan denied -------------------------------------- The government has denied a report it plans to put Daewoo Group units into court receivership to protect them from individual creditor action seeking to recover their loans. "The government for now is not considering court receivership for Daewoo units," said Choi Hoon, an official at the economic policy co-ordination division at the Ministry of Finance and Economy. Still, receivership may be possible should retail investors block Daewoo debt rescheduling plans already under way, he said. The Korea Stock Exchange (KSE) suspended morning trading of Daewoo Heavy Industries and Daewoo Electronics because of the report in the Korea Economic Daily. Trading of Daewoo Electronics resumed in the afternoon, after Daewoo Electronics told the KSE it has no plan to file for receivership. Trading of Daewoo Heavy Industries will resume tomorrow, because it did not issue a denial of the report till the afternoon, according to the exchange. Attempts to sell 12 key Daewoo units have stalled over debt rescheduling negotiations among local and foreign creditors. The government had set a deadline of last year to sell the units, which comprised what was once Korea's second-largest industrial group that is now in debt with at least US$80 billion. Individual creditors have grown impatient with bank-led debt rescheduling plans for Daewoo, but the government said giving in to individual creditors is impractical. Daewoo Group's debt to individual investors totals US$90.2 million. "Daewoo's debt to individuals is simply too small to re- draw ongoing debt rescheduling plans for Daewoo," Mr Choi said. (South China Morning Post 25-April-2000) DAEWOO MOTOR: GM, Ford to go to Korea next week ----------------------------------------------- General Motors (GM) and Ford Motor will each send high- level officials to Korea next week as a part of efforts to buy Daewoo Motor. GM President Rick Wagoner will also hold a video press conference May 1 with Korean and foreign reporters to reiterate his company's strong will to buy Daewoo and explain its management strategies after acquisition. "President Rick Wagoner will hold a video news conference as he is unable to visit Korea due to unavoidable circumstances," a GM official said, adding Wagoner will explain why GM should buy Daewoo. GM's president of Asia-Pacific business Rudy Schlais, who is directing acquisition of Daewoo Motor, will also visit Korea at the beginning of next week to examine the progress in the Daewoo Motor bid. Competitor Ford will also send Vice Chairman Wayne Booker for an official news conference in Korea at the beginning of next week. Booker, who also handled Ford's takeover bid of Kia Motors in 1998, will examine the progress in its bid and explain Ford's plans on the acquisition to the government and creditors during his visit, Ford said. Fiat and DaimlerChrysler will also send directors to the Korea Import Motor Show May 3 to explain their plans to buy Daewoo Motor. (Asia Pulse 25-April-2000) FRUIT OF THE LOOM: Seeks To Extend Time To Assume/Reject Leases --------------------------------------------------------------- The Fruit of the Loom entities are lessees under 40-some unexpired nonresidential real property leases for Fruit of the Loom's corporate offices and various manufacturing, distribution, and other facilities. As part of these chapter 11 cases, Fruit of the Loom is re-evaluating every aspect of its business and the Leases to determine the potential consequences of assuming, assuming and assigning, or rejecting the Leases under the Bankruptcy Code. This evaluation must be completed before Fruit can intelligently decide whether to assume, assume and assign, or reject each of the Leases in the overall context of Fruit of the Loom's business plan. Given the complexity and size of these cases, that evaluation will not be complete within the period described in 11 U.S.C. Sec. 365(d)(4). With this in mind, Fruit of the Loom sought and obtained a second extension of their time within which to decide whether to assume, assume and assign or reject its Leases through January 15, 2001. (Fruit of the Loom Bankruptcy News Issue 5; Bankruptcy Creditors' Services Inc.) GRAND COURT LIFESTYLES: Holding Company is Sole Debtor ------------------------------------------------------ BCD News and Comment reports on April 19, 2000 that the holding company of Grand Court Lifestyles, Inc., which provides independent and assisted living services for seniors, is the sole debtor. The company filed Chapter 11 March 20 before Judge Novalyn L. Winfield. At the time of filing, the debtor listed more than 319 million in assets and almost 283.6 million in liabilities. Grand Court syndicates and manages 56 senior living communities and has a portfolio of about 100 multifamily properties, all of which are owned by limited partnerships. However, none of these partnerships are currently part of the proceeding. AS reported, "The only debtor now is the holding company," said Jack Zackin of Sills Cummis Zuckerman Tischman Epstein & Gross P.C. in Newark, N.J., who represents the debtor along with colleague Andrew Sherman. "We're going to try to see if we can proceed without having to bring in any of the lower tiers of partnerships down the line. The mortgage loans on the properties are at the partnership level. We're trying to consensually restructure those mortgages on the properties that aren't able to meet their debt service. The great majority do, but there are a few that don't. Rather than bring those partnerships into the proceeding at this point, we're trying to work out consensual restructurings with those lenders. He explained that the company missed interest payments that were due on March 1 and another series of payments due on March 15. To avoid the filing of an involuntary petition, the debtor filed Chapter 11. HARVARD PILGRIM: HMO To Include Payment Plan -------------------------------------------- Rhode Island Insurance Commissioner Tom Schumpert plans to file shortly his first detailed financial accounting of the failed Harvard Pilgrim Health Care of New England, an HMO that he ordered closed Dec. 31 because of its financial problems. The financial accounting had been scheduled to be filed yesterday. However, Superior Court Judge Michael Silverstein approved a request by Schumpert to extend the deadline until work on a key document has been completed and the document has been signed, according to Marilyn Shannon McConaghy, chief lawyer at the Rhode Island Department of Business Regulation. That document is an agreement between regulators of Rhode Island's Harvard Pilgrim and of its affiliated company, Harvard Pilgrim of Massachusetts. (Both companies are in state receivership proceedings and are being overseen by state regulators in their respective states. The Rhode Island Harvard Pilgrim is being liquidated; the Massachusetts Harvard Pilgrim is to be revitalized.) The agreement provides the mechanism by which health-care providers, members and other creditors of Rhode Island's Harvard Pilgrim will be paid in full, McConaghy said. The Massachusetts Harvard Pilgrim is to foot part of the bill. L'ETOILE: Files For Chapter 11 Protection ----------------------------------------- L'Etoile, a restaurant in Alamo Heights owned by the trio of businessmen who launched the Powerhouse Cafe, has filed for protection from creditors under Chapter 11 of the federal bankruptcy code. L'Etoile's owners stressed that the restaurant at 6106 Broadway would continue to operate. L'Etoile, officially known as BABA Inc., listed assets of $106,000 and debts of $1.9 million in its bankruptcy court documents filed late Friday. "I would say 99 percent of that debt is Powerhouse debt," said William Kingman, lawyer for the restaurant. "BABA Inc., which does business as L'Etoile, guaranteed payments. Because of the unfortunate demise of Powerhouse, BABA became responsible for that debt." LA POSADA: Court Approves Prinova Bid --------------------------------------- A federal bankruptcy court on Tuesday approved Prinova Investments Ltd.'s $5 million purchase offer for the 61-year-old La Posada de Albuquerque Hotel at 125 Second NW near Central. All other parties involved have also OK'd the offer, including the existing mortgage company and debtor. The next step is for Prinova's lead bank, Bank 1st, to approve financing in anticipation of a closing date, said Vincent Garcia, CEO of Prinova Capital Group. Once the deal is cemented, Prinova will transfer its interest to Renaissance Holdings LLC. In addition to Prinova, majority partners in Renaissance Holdings are Vincent and Patsy Garcia of Prinova and Skip Drinkard of Layne Hotel Management. Architect Mark DePree and Julie DePree are also partners, along with Jim King of Bradbury Stamm Construction. In addition, Steve and Linda Wedeen, part-owners of Vaughn-Wedeen Creative Inc., and Denver chiropractor Randy Baca are in the small group of investors. LESLIE FAY: Employee Reports Falsifying Entries ------------------------------------------------ John Dillon, one of Leslie Fay's divisional controllers in its Hanover, Pa., facility was the second witness to testify (under immunity) that in the early nineties he had been directed by his bosses to manipulate journal entries, leading to inflated profit statements by the company in its filings to the Securities and Exchange Commission. (WWD April 19, 2000) LEVITZ: Eighth Motion To Extend Time To Assume/Reject Leases ------------------------------------------------------------ At the Debtors' behest, Judge Walrath granted Levitz 60 additional days pursuant to 11 U.S.C. Sec. 365(d)(4), through April 28, 2000, within which to decide whether it should assume, assume and assign or reject its remaining non-residential real property leases. (Levitz Bankruptcy News Issue 43; Bankruptcy Creditors' Services, Inc.) LOEHMANN'S: Court Approves Disclosure Statement ----------------------------------------------- The US Bankruptcy Court for the District of Delaware entered an order approving the Disclosure Statement of Loehmann's Inc. A June 27 plan confirmation hearing. Plan objections are due by June 20, 2000. An April 18 record date was established for determining creditors and interest holders entitled to vote on the plan. (Daily Bankruptcy Review - ABI - 27-Apr-00) MARINER POST-ACUTE: Seeks Extension of Exclusivity -------------------------------------------------- Mariner Post-Acute Network Inc. (MPANQ) is seeking an extension of its exclusive periods to file a plan of reorganization and solicit votes for such plan. The debtor is seeking an extension to September 14, 2000 for filing its plan, and an extension to November 13, 2000 for soliciting acceptances to such plan. In a separate motion, the company's Mariner Health Group Inc. unit and certain of its bankrupt subsidiaries also requested an extension. A hearing is scheduled May 10, 2000. (Daily Bankruptcy Review - ABI - 27-Apr-00) MICROAGE: Bonus Program To Retain Employees ------------------------------------------- The Arizona Republic reports on April 21, 2000 Friday, that MicroAge Inc. is drafting a bonus program to keep employees and help recruit new ones during its Chapter 11 bankruptcy reorganization. The program, disclosed in an e-mail to the computer distributor's 4,600 employees this week, is called the Associate Retention Plan. A company spokeswoman declined to provide any details to the newspaper until the plan is submitted for bankruptcy approval. ORIOLE HOMES: ORIOLE HOMES: S&P Lowers Ratings ---------------------------------------------- Standard & Poor's lowered its corporate credit rating and senior debt ratings on Oriole Homes Corp. to triple-'C' from triple-'C'- plus (see list). The outlook is negative. These ratings reflect the difficulty that Oriole has experienced in recent attempts to improve its homebuilding operations. These attempts have resulted in a further erosion of the company's financial performance. Based in South Florida, Oriole's initiatives to improve its competitive and financial posture have not yet translated into improvement in the company's core homebuilding operations. Oriole focuses mainly on designing, constructing, marketing, and selling homes to the active adult segment (86% of revenues). It operates through eight development projects that are located in Palm Beach, Broward, Osceola, and Marion Counties in Florida. While small in size relative to other rated homebuilders, this established niche player was the largest builder of condominiums for active adults in Palm Beach County during each of the last five years. Over the past few years, Oriole has struggled with erratic volume levels (declining the past two years); weak gross margins; and high selling, general, and administrative expenses. During 1999, Oriole delivered 501 homes, a 4% decline from 1998, and a 26% decline from 1997. Despite a very strong market for homebuilders over the past few years, Oriole has seen the average sales price of its homes steadily decline, along with the decline in unit volume. Despite strategic initiatives aimed at enhancing operating efficiencies implemented in 1998, gross margins declined in 1999 to 9% after improving slightly in 1998. However, stubbornly high selling expenses (18%) combined with the weak gross margins to produce about US$7 million in operating loss. During 1999, Oriole announced write-downs of US$4.9 million after conducting a FASB 121 related revaluation of its inventory; this follows a US$21 million asset write-down in 1997. In addition, Oriole took a US$1.4 million charge to write down the balance of a joint venture investment. The write-downs, coupled with the weak operating results, further eroded the equity base from about US$68 million in 1996 to a modest US$42 million as of Dec. 31, 1999. The current equity level remains very close to minimum bank line and indenture covenant levels, US$41 million and US$38 million, respectively. Oriole has relied on asset sales to cover interest obligations (estimated at between US$5 million and US$6 million in 2000), which is reflected in earnings before interest and taxes coverage (excluding write-downs and gains on asset sales) that is presently well below 1 times. The company has also used inventory liquidations to repurchase or repay about US$24 million of debt, including US$13 million of the company's rated unsecured 12.5% senior notes. As a result, debt-to-book capitalization at the end of 1999 actually declined to 53% from 60% at the end of 1998. Oriole did report nearly US$19 million in cash on hand as of Dec. 31, 1999, and currently has a mostly unused US$10 million secured credit facility. OUTLOOK: NEGATIVE Lower overall sales revenues and weaker gross and operating margins have resulted in a gradual deterioration in Oriole's debt coverage measures. The company has reduced leverage and is sitting on some cash, which it may use to retire debt. However, due to the shrinkage of the balance sheet, and a reduced number of selling communities, it remains unclear whether Oriole's operations will measurably improve. In light of its constrained financial position, Oriole may pursue other financing vehicles such as joint ventures to fund future projects. Unless future developments are significantly more productive, financial flexibility will remain weak, Standard & Poor's said.--- CreditWire RATINGS LOWERED Oriole Homes Corp. Rating To From Corporate credit rating CCC CCC+ US$41 million 12.5% senior notes due Jan. 15, 2003 CCC CCC+ PACKAGING RESOURCES: Moody's Downgrades Ratings ----------------------------------------------- Moody's Investors Service downgraded the rating of Packaging Resources, Inc.'s ("PRI") $110 million of senior secured 11 5/8% notes, due 2003 to Caa3 from B2. Moody's also lowered the rating of the company's $27 million senior secured revolver to B3 from B2. The senior implied rating was lowered to Caa3 from B2. The unsecured issuer rating is Ca, and the ratings outlook is negative. The downgrades reflect Packaging Resources' deteriorating profitability and limited financial flexibility. While negotiations are on-going with the company's bank lenders, the company is fully drawn on its credit facility and alternate sources of liquidity do not appear to be imminent. The primary source of liquidity is the sale of the company (PRI has recently retained an investment banking firm to consider sale opportunities). The company's capital spending was approximately $62 million over the past two years for which EBIT generation has been less than expected to be realized in the near term. During the fourth quarter of fiscal 2000, the company lost two significant higher-margined contracts whose combined annual contract value was approximately $33 million. Moody's anticipates some residual coverage from lower-margined replacement business, however we expect run rate net sales to be significantly lower than the $146 million estimate for fiscal 2000. The highly competitive nature of the industry and the continuing threat of margin compression, primarily due to lower volume sales of high- margined products, underscore credit concerns. The ratings recognize PRI's long term contracts, which support approximately 80% of total revenues and have maturities ranging from 2002 to 2004. The B3 rating assigned to the senior secured revolver reflects the benefits and limitations of the collateral and its priority position in the capital structure. As of April 25, 2000, the revolver was fully drawn. In Moody's opinion under a liquidation scenario, the senior secured outstandings would be substantially covered. The downgrade of the senior secured notes to Caa3 from B2 reflect the increased severity of loss given the company's limited ability to service interest and given PRI's impaired financial condition. The notes are secured by certain equipment, fixtures and general intangibles and mortgages on substantially all of the owned and certain of the leased real property of the company. PINNACLE MICRO: Files for Bankruptcy Protection ----------------------------------------------- Pinnacle Micro Inc., the long-troubled Orange County maker of optical storage devices, said Friday that it has filed for bankruptcy protection to help ease plans to sell its assets to a Newport Beach firm. The company, which had avoided being forced into bankruptcy three years ago, said the move will protect it from creditors while it prepares to sell inventory and other assets to Sigma Global Interactive Corp. "We hope to have a sale approved by the Bankruptcy Court and consummated within 60 days of the filing," said Pinnacle lawyer Robert W. Pitts, a partner at bankruptcy law firm Winthrop Couchot in Newport Beach. Pinnacle Micro had been forced by three creditors into an involuntary bankruptcy in August 1998. The creditors, which were owed a total of about $ 210,000, tried to force the company into liquidation. The court dismissed the petition two months later after the creditors declined to post a bond and meet other requirements for a hearing, the company said at the time. Pinnacle then started working privately on a reorganization plan that would pay its $ 22.4 million debt. The plan developed into the proposed sale of company assets, which consist mostly of inventory. Founded in 1987, Pinnacle Micro develops optical storage technology and manufactures recordable compact disk systems for data storage. Analysts traced the company's decline to its 1995 decision to switch from reselling other manufacturers' products to making its own. PRIMARY HEALTH: More Buyers Surface ----------------------------------- Less than a month after U.S. Bankruptcy Court in Delaware derailed a controversial real estate deal between the Cleveland Clinic and Primary Health Systems, at least four more prospective buyers have surfaced. The interested parties include a nursing home chain in Denver, a rehabilitation hospital system based in Birmingham, Ala., and two hospital systems in Northeast Ohio. Primary Health Systems of Wayne, Pa., is trying to sell its medical facilities in Ohio after filing for bankruptcy protection last year. HealthSouth Corp., which operates 1,400 outpatient rehabilitation facilities across the country in addition to 230 surgery centers and 118 rehabilitation hospitals, signed a confidentiality agreement with PHS. The agreement allows it to obtain financial records of PHS and, if desired, to bid on the properties. Solomon Health Services LLC also has signed an agreement. It is a for-profit hospital management company that is well known for its successful rejuvenation of financially troubled hospitals and nursing homes. They join the Lake Hospital System and University Hospitals as the Tuesday deadline approaches for written bids to purchase St. Michael Hospital in Cleveland, Mt. Sinai Medical Center-East in Richmond Heights and the Integrated Medical Campus in Beachwood. A public auction will be held May 1 in Delaware. The sale hearing and sale order will occur May 4. SABRATEK: To Pursue Lawsuit --------------------------- According to a spokesperson for the company, Sabratek Corp. (OTC Bulletin Board: SBTKE) intends to return to court within the 30- day window allowed by U.S. District Judge Harold Baer, Jr., to present stronger allegations of securities fraud by newsletter publisher Mark Roberts. The company also intends to keep pursuing Steve Alan Keyser, who has been posting messages on the Internet under the name "Pluvia," according to Sabratek, and serve him within that same 30-day window. "We are disappointed, of course, that Judge Baer dismissed two of the four counts, but we are encouraged that he is allowing us to replead our allegations of securities fraud against Roberts and that he is granting us additional time to find and serve Keyser," the spokesperson for Sabratek said. The company claims that Roberts and Keyser repeatedly assailed Sabratek -- Roberts in his newsletter and phone calls to investors and Keyser on message board postings under the name of "Pluvia" -- in order to depress the stock price. Roberts had shorted Sabratek and Keyser held puts on the stock, so both stood to profit from driving down the stock, the company alleges. Historically, the company has developed, produced and marketed technologically advanced interactive, web-enabled medical systems. Since filing, last year, a voluntary petition for relief under Title 11 of the U.S. Bankruptcy Code, it has been disposing of a number of its assets. SAUCY BREAD: Reverse Takeover Abandoned --------------------------------------- The Saucy Bread Company Inc. had previously announced a proposed Reverse Takeover with the URC Hospitality Group. That Reverse Takeover was abandoned. It proved to be unworkable. With the failure of the proposed Reverse Takeover, the company was not sustainable. Therefore, the Directors of The Saucy Bread Company Inc. have assigned that company into bankruptcy. Some of the Directors of the company have provided interim working capital to fund the company and it is hoped that the franchise network can be sold intact, together with the commissary. This will preserve the goodwill and intellectual property that the company has developed. Trading in the shares of the company on the CDNX is currently suspended pending the Reverse Takeover. This suspension is now expected to continue indefinitely. Frank O'Dea has resigned from the Board. SOUTH FULTON HOSPITAL: Files Chapter 11 --------------------------------------- The Atlanta Journal and Constitution reports on April 27, 2000, that the parent company of South Fulton Medical Center filed for Chapter 11 bankruptcy protection Wednesday as it seeks to sell the East Point hospital. But hospital officials emphasized they are near an agreement to sell the nonprofit facility to a for-profit company. A purchase announcement is expected soon, said South Fulton spokeswoman Jill Smith. The filing by Georgia International Health Alliance in U.S. Bankruptcy Court in Atlanta will help 356-bed South Fulton continue services as it pursues the sale, the hospital said. The facility has secured a loan commitment to ensure funds are available during the reorganization. There will be no interruption of patient care, and no layoffs are anticipated, Smith said. "Chapter 11 is a strategic move to facilitate the interim loan and the sale." Smith said South Fulton's problems were caused by a combination of Medicare cuts from the federal Balanced Budget Act of 1997, lower payments from managed care companies, and a $ 7 million upgrade of the hospital's information system. The facility is hampered because it is not affiliated with a larger hospital system in metro Atlanta, such as Promina or Emory/Columbia. South Fulton had an operating loss of about $ 7.4 million in its fiscal 1999, which ended in June. The hospital projects a $ 2 million loss this year. According to The Bond Buyer newspaper, South Fulton suffered its second downgrade in its bond rating in as many months last week. Standard & Poor's downgraded the center to CCC from B-minus, noting the hospital might not be able to make its estimated $ 3.3 million July 1 payment on $ 35 million of revenue anticipation certificates. Last month, Fitch IBCA downgraded the hospital's certificates to B from BB. Last June, South Fulton, citing lower Medicare reimbursements, eliminated 100 jobs and closed a cardiac rehab unit. The bankruptcy filing apparently is the first by a Georgia acute care hospital in more than 10 years, experts say. Charter Behavioral Health System, the nation's largest psychiatric hospital chain, filed for Chapter 11 protection in February. US MEDIA HOLDINGS: Files For Chapter 11 Bankruptcy Protection ------------------------------------------------------------- U.S. Media Holdings filed for Chapter 11 bankruptcy protection last Friday, April 14, after the cash-strapped company failed to obtain new financing. The company, whose holdings include Stewart, Tabori & Chang, Golden Turtle and Smithmark Publishers, also said that it has hired David Lamb of GSL Publishing Associates, to look for buyers for its three properties. According to the publisher, although ST&C and Golden Turtle were profitable in 1999, continuing losses at Smithmark put a financial strain on the company. In the last year, Smithmark exited the remainder business and reduced the number of promotional titles it published from 150 in 1998 to 12 in spring 2000. Earlier this month, in a bid to remain financially solvent, U.S. Media laid off 32 employees, about 42% of its workforce of 76. The company said that all three imprints will continue to do business as the company is reorganized under Chapter 11, and plans to continue to ship books and calendars from its fulfillment center. BOND PRICING FOR WEEK OF APRIL 24, 2000 ======================================= DLS Capital Partners, Inc., bond pricing for week of April 24, 2000 Following are indicated prices for selected issues: Acme Metal 10 7/8 '07 11 - 14 (f) Advantica 11 1/4 '08 64 - 67 Asia Pulp & Paper 11 3/4 '05 82 - 83 Conseco 9 '06 60 - 63 E & S Holdings 10 3/8 '06 35 - 37 Fruit of the Loom 6 1/2 '03 46 - 48 (f) Genesis Health 9 3/4 '05 12 - 14 (f) Geneva Steel 11 1/8 '01 20 - 21 (f) Globalstar 11 1/4 '04 33 - 35 Iridium 14 '05 2 - 3 (f) Loewen 7.20 '03 36 - 40 (f) Paging Network 10 1/8 '07 52 - 54 (f) Pathmark 11 5/8 '02 27 - 30 (f) Pillowtex 10 '06 39 - 41 Revlon 8 5/8 '08 48 - 50 Rite Aid 6.70 '01 68 - 71 Service Merchandise 9 '04 9 - 11 (f) Trump Atlantic 11 1/2 '06 70 - 72 TWA 11 3/8 '06 30 - 31 Vencor 9 7/8 '08 18 - 20 (f) ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. Debra Brennan, Yvonne L. Metzler, Edem Alfeche and Ronald Ladia, Editors. Copyright 2000. All rights reserved. ISSN 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *