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/raid1/www/Hosts/bankrupt/TCR_Public/000602.MBXT R O U B L E D C O M P A N Y R E P O R T E R Friday, June 2, 2000, Vol. 4, No. 108 Headlines ABRAXAS PETROLEUM: Announces Board Authorization ARM SECURITIES: ND Holdings Completes Purchase AUTOINFO: Announces Rescheduled Disclosure Statement Hearing BREED TECHNOLOGIES: Defends Employ of John Riess BREED TECHNOLOGIES: Seeks Extension of Exclusivity CELLULAR USA: Case Summary and 20 Largest Unsecured Creditors COMPLETE MANAGEMENT: Disclosure Statement CONSECO: Financier Buys $ 11M Shares EAGLE GEOPHYSICAL: Hearing to Consider Confirmation of Plan JOAN AND DAVID: Closing 12 Stores LMI INSURANCE: Declares Insolvency LOEWEN: Motion To Reject Ten Unexpired Leases MEDIQ: MEDIQ/PRN's Senior Lenders Block Interest Payment PENN TRAFFIC: To End Consulting Contract PRIMARY HEALTH SYSTEMS: Order Extends Co-Exclusive Periods PRIME RETAIL: CFO Resigns PRISON REALTY: Restructuring Moves Forward READ RITE: Extension Of Waiver SERVICE MERCHANDISE: Seeks Court Approval To Sublease Stores SINGER COMPANY: Disclosure Statement SUNSHINE MINING: Creditors Aid Company SUNTERRA: DCR Downgrades Sunterra to 'DD' TEXAS HEALTH ENTERPRISES: Summary of Plan TOKHEIM CORP: Moody's Lowers Ratings; Outlook Negative VENCOR: Obtains Extension to File Its Plan of Reorganization VERSATECH: In Default To File Annual Financial Statements BOND PRICING FOR WEEK OF May 29, 2000 ********* ABRAXAS PETROLEUM: Announces Board Authorization ------------------------------------------------ Abraxas Petroleum Corporation (OTCBB:AXAS) recently announced that its Board of Directors authorized the Company to repurchase, within the limits of the indenture of its public debt, both equity and debt securities of the Company in open market and private transactions. Bob Watson, Chief Executive Officer, stated, "This move by the Board recognizes our beliefs that the purchase of the Company's securities represents tremendous value for our shareholders and is a judicious use of a portion of the Company's excess cash. The ultimate amount available for purchase will be determined by the Company's performance in the months ahead and our ability to continue to generate excess cash in this strong commodity-price environment." At an Annual Meeting of Shareholders, Mr. Watson also announced that the Company is currently active, or soon will be, in five horizontal exploitation projects as well as conventional exploitation activities both in the United States and Canada. Success in any of these horizontal exploitation projects could add substantially to the Company's proved reserve base. The securities repurchase program announced above will not impact the Company's planned capital expenditure program. ARM SECURITIES: ND Holdings Completes Purchase ---------------------------------------------- ND Holdings Inc. (NDHI), Minot, N.D., announced on May 31, 2000 that it has completed the acquisition of ARM Securities Corporation (ARM) of Louisville, Ky., through a stock purchase agreement for an undisclosed amount of cash, which was approved by the bankruptcy court for the District of Delaware, according to a newswire report. The seller and parent of ARM Securities, ARM Financial Group Inc. (ARM Group), is a debtor-in-possession. NDHI plans to operate ARM as is and to retain all personnel and processing locations. ARM, a broker dealer marketing mainly mutual funds and annuities, will continue to operate under its current name as a wholly owned subsidiary of NDHI. "This acquisition will represent a significant addition to our revenue stream," said Robert Walstad, NDHI president. "We are also pleased to be able to utilize our existing support service capabilities to support the staff and sales activities of this new unit." (ABI 01-June-00) AUTOINFO: Announces Rescheduled Disclosure Statement Hearing ------------------------------------------------------------- AutoInfo, Inc. (OTCBB:AUTO) announced that the hearing schedule to be held before the Honorable Adlai S. Hardin, Jr., United States Bankruptcy Judge, in Room 520 of the United States Bankruptcy Court, 300 Quarropas Street, White Plains, New York 10601, on May 31, 2000 has been rescheduled for 11:00 AM on June 7, 2000. William Wunderlich, President and Chief Financial Officer of AutoInfo stated, "the hearing date has been rescheduled to allow us additional time to file our amended disclosure statement. We anticipate that we will satisfy issues raised by all interested parties and are hopeful that the acceptance of the disclosure statement will lead to the timely confirmation of our reorganization plan so that we may proceed toward the consummation of a transaction in our continuing efforts to restore shareholder value." BREED TECHNOLOGIES: Defends Employ of John Riess ------------------------------------------------ In answer to the objections of the Official Committee of Unsecured Creditors, DaimlerChrysler Corporation and Ford Motor Company, BREED Technologies, Inc., debtor, states that the employment of John Riess as a senior executive is integral to the prudent exit strategy of the debtor. The Committee states that Riess is not yet needed, and that his pay is too high. BREED asserts that without Riess a sale may not be consummated, which would be very damaging to the debtor's reorganization efforts. BREED believes that Riess is the best qualified candidate to act as a senior executive under a stand- alone plan. Riess is willing to act in that capacity and he is acceptable to the Bank Group. Riess is not willing to forego other employment opportunities to "wait and see" if a sale is consummated. And if a sale falls through and no alternative is in place, BREED claims that it will spend as much, if not more money than Riess' proposed compensation on continuing reorganization costs and executive search fees to find another eligible candidate. BREED TECHNOLOGIES: Seeks Extension of Exclusivity -------------------------------------------------- The debtors, BREED Technologies, Inc. seek to further extend the exclsuive periods during which the debtors may file plans of reorganization and solicit acceptance of such plans. A hearing has been set for June 6, 2000 at 3:00 PM. The debtors claim that they require an additional period of time in which to develop and document a plan of reorganization. It is the debtors' intention to propose a plan in a form that will maximize the likely recovery to creditors. The mechanism for doing so is currently the subject of some dispute among the secured lenders, the creditors' committee and certain segments of the debtors' customer body. The debtor requests the extension in order to reach a consensus with the varied case constituents. Plan exclusivity will, according to the debtor, ensure that the playing field remains level and that the debtors and each of the creditor constituencies remain willing to address concerns raised by competing interests and reach a resolution that will maximize all interests. The debtors request that the court further extend the period during which they have the exclusive right to propose a plan and solicit acceptances thereof until September 30, 2000 and November 30, 2000, respectively. CELLULAR USA: Case Summary and 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Cellular USA 800 Brickell Avenue Suite 400 Miami, FL 33131 Petition Date: May 30, 2000 Chapter 11 Court: District of Delaware Bankruptcy Case No.: 00-02108 Judge: Mary F. Walrath Debtor's Counsel: Jeffrey M. Schlerf The Bayard Firm 222 Delaware Avenue Suite 900 PO Box 25130 Wilmington, DE 19801 (302) 655-5000 Thomas E. Lauria White & Case, LLP First Union Financial Center 200 S. Biscayne Boulevard Miami, Florida 33131-2352 (305) 371-2700 Total Assets: $ 10 million above Total Debts: $ 50 million above 20 Largest Unsecured Creditors BellSouth Mobility, Inc. 1100 Peachtree Suite 910 Atlanta, GA 30309 Connie Thorne Tel:(407) 771-1723 Fax:(407) 805-8910 Trade Debt $ 1,114,536 AT&T Wireless Svcs, Inc. PO Box 97061 Redmond, WA 98073 Carla Gerkin Tel:(972) 778-5864 Fax:(888) 423-8090 Trade Debt $ 999,179 Brightpoint, Inc. 6402 Corporate Drive Indianapolis, IN 46278 Steve Thompson Tel:(800) 669-4268 x2193 Fax:(317) 707-2329 Trade Debt $ 639,767 Brightpoint-NEXTEL 501 Airtech Parkway Plainfield, IN 46168 Steve Thompson Tel:(800) 669-4268 x2193 Fax:(317) 707-2329 Trade Debt $ 463,700 Voicestream Wireless Corp. 3650 131st Avenue S.E. Suite No. 400 Bellevue, WA 98006 Rebecca Saboi Tel:(954) 457-5725 Trade Debt $ 427,456 Chandler Signs, Inc. 3201 Manor Way Dallas, TX 75235-5909 Thom Hopper Tel:(972) 739-6558 Fax:(214) 902-2044 Trade Debt $ 390,882 GERS Retail Systems Waterridge Technology Center 10431 Waterridge Circle San Diego, CA 92121 Steven Frank Tel:(800) 854-2263 x2241 Fax:(858) 457-2145 Trade Debt $ 369,582 PrimeCo Personal Communications, LP Dept. 0695 PO Box 120001 Dallas, TX 75312-0695 Deetra Serrano Tel:(800) 650-2906 Fax:(817) 258-1939 Trade Debt $ 360,194 The Atlantic Journal Constitution Trade Debt $ 248,098 Advanced Fox Antenna Inc. Trade Debt $ 219,593 Weblink Wireless, Inc. Trade Debt $ 213,368 The Dallas Morning News Trade Debt $ 212,386 Detroit Newspapers Trade Debt $ 203,604 Cellular One Puerto Rico Trade Debt $ 177,385 PageNet Trade Debt $ 161,815 Cellular One Central Trade Debt $ 158,389 Powertel, Inc. Trade Debt $ 155,046 Tarrant Interiors, Inc. Trade Debt $ 133,905 GTE Mobile Communications Trade Debt $ 133,029 Cellular One Trade Debt $ 124,978 COMPLETE MANAGEMENT: Disclosure Statement ----------------------------------------- The plan of reorganization of Complete Management, Inc. provides that on the Effective Date, all of the debtor's then-existing Old Common Stock shall be cancelled. The debtor shall be authorized to issue ten million shares of New Common Stock. General unsecured creditors in Class 3 will receive a pro rata share of 95% of the New Common stock; debtor's existing equity will receive a pro rata share of the other 5% of the New Common stock. The debtor's other assets will be transferred to the CMI Litigation Trust to be established for the benefit of Unsecured Creditors in Classes 3 and 3(a) under the plan. CONSECO: Financier Buys $ 11M Shares -------------------------------------- According an AP report of May 26, 2000, financier Irwin Jacobs, considered one of the most feared corporate raiders of the 1980s, has silently bought at least 11 million shares of Conseco Inc. stock but states no interest in making a bid for the company or its consumer finance unit. EAGLE GEOPHYSICAL: Hearing to Consider Confirmation of Plan ----------------------------------------------------------- By order dated May 26, 2000, the US Bankruptcy Court for the District of Delaware approved the First Amended Disclosure Statement in support of the First Amended Joint Plan of Reorganization of Eagle Geophysical, Inc., et al. On June 28, 2000 at 3:00 PM a hearing will conmmence before the Honorable Mary F. Walrath, US Bankruptcy Court, District of Delaware, 824 North Market St., 6th Floor, Wilmington, Delaware, to consider confirmation of the First Amended Joint Plan of Reorganization. Objections to the plan must be received on or before 4:00 PM on June 22, 2000. JOAN AND DAVID: Closing 12 Stores --------------------------------- In an article in The New York Post on May 26, Joan & David, which filed for bankruptcy protection under Chapter 11 in March, has announced closing eight boutiques including the Fifth Avenue store, both locations in Connecticut and the pair in New Jersey and are running clearance sales. Four outlets in California and Florida are included in the closing. But, the Madison Avenue boutique and the shoe store in Bloomingdale's will stay open. LMI INSURANCE: Declares Insolvency ---------------------------------- In an article in The Legal Intelligencer on May 26, LMI Insurance Co. of Ohio, which had a 'D' rating in 1999 according to Best's Key Rating Guide, has declared insolvency. The local office of the company was in Lawrenceville, N.J, a part of the family of insurers under the Highlands Insurance Co., based in Texas. LOEWEN: Motion To Reject Ten Unexpired Leases --------------------------------------------- The Court has authorized the Debtors to reject, (A) Effective as of March 28, 2000, contracts with: (1) Earthman Resthaven Cemetery & Funeral Home (2) Gleason Mortuary (3) Kennedy Morgan (4) Peace Rose (5) Reed-Nichols Brown (6) Ridge Chapel (7) Funeraria Panciera (8) Jennings-Gamble (9) Cardwell & Maloney; and (B) Effective as of April 14, 2000, its lease with: (10) Umphlett Funeral Home The Court allows Umphletts an extension of the Bar Date to May 24, 2000 to amend or supplement their proofs of claim, to include claims with respect to the Debtors' maintenance of the premises under the Umphletts Lease. (Loewen Bankruptcy News Issue 23; Bankruptcy Creditors' Services, Inc.) MEDIQ: MEDIQ/PRN's Senior Lenders Block Interest Payment -------------------------------------------------------- MEDIQ Incorporated (OTC Bulletin Board: MDDQP) announced on June 1, 2000 that its wholly owned subsidiary, MEDIQ/PRN Life Support Services, Inc. will not make its scheduled June 1, 2000 interest payment of approximately $10.5 million on its 11% Senior Subordinated Notes Due 2008. Banque Nationale de Paris, the agent under the Company's senior credit facility (the "Credit Agreement"), has delivered a payment blockage notice to the Company and the indenture trustee of the 11% Senior Subordinated Notes. The senior lenders under the Credit Agreement delivered the notice because of defaults under certain financial, reporting and other covenants in the Credit Agreement. The indenture for the 11% Senior Subordinated Notes prohibits MEDIQ/PRN from paying principal of and interest on the notes upon the receipt by the indenture trustee of a payment blockage notice from the lenders under the Credit Agreement. This prohibition continues for a period of up to 179 days after the date of the trustee's receipt of the notice. According to Kenneth Kreider, MEDIQ's Chief Financial Officer, "We have not been able to access revolving credit availability under the Credit Agreement since we first notified the banks in late December 1999 that our auditors were concerned with our treatment of certain balance sheet items and whether they had received all material information pertinent to the 1999 audit. As a result of those issues, significant and persistent financial under performance and other matters, we are in the process of terminating, pursuant to contract, our President and Chief Executive Officer, Tom Carroll. We also terminated our Chief Financial Officer, Jay Kaplan in March 2000. In addition, we appointed John McNamara, former Chairman, President and Chief Executive Officer, of AmeriSource Corporation, the fourth largest drug distributor in the United States, as Chairman and myself as Chief Financial Officer of the Company on March 16, 2000. We also appointed Regis Farrell, former President of HTD Corporation, an equipment rental and medical-surgical distribution business acquired by MEDIQ in June 1999, and a career turnaround executive, as Chief Operating Officer of MEDIQ on May 15, 2000. At the conclusion of the Carroll termination process, the Company expects to appoint Mr. Farrell as President of the Company." As it has since late in December 1999, the Company expects to continue to fund its liquidity needs from operating cash flows and to maintain all of its existing customer and vendor commitments. The Company is currently interviewing investment banking firms to act as its financial advisor to evaluate its strategic alternatives. As MEDIQ has previously reported, unforeseen delays in the collection and review of information and documents necessary to complete its year-end audit for the fiscal year ending on September 30, 1999, have prevented MEDIQ and MEDIQ/PRN from filing their annual reports on Form 10-K and quarterly reports for the first and second quarter of fiscal 2000 on a timely basis. The Company expects to be in a position in the near future to file its Form 10-K for the fiscal year ended September 30, 1999, its Form 10-Q for the fiscal quarter ended December 31, 1999 and its Form 10-Q for the fiscal quarter ended March 31, 2000 and restated quarterly reports for each of the fiscal quarters of fiscal 1999. MEDIQ/PRN Life Support Services, Inc., a wholly owned subsidiary of MEDIQ Incorporated, whose Series A Preferred Shares (MDDQP) are traded on the OTC Bulletin Board, is the largest movable critical care and life support medical equipment rental business in the United States with over 100 branches located nationwide. PENN TRAFFIC: To End Consulting Contract ---------------------------------------- According to an AP report on May 26, 2000, Penn Traffic Co., paid $ 4.9 million to end a consulting contract with its former chairman, Gary D. Hirsch following his announcement of retiring. Mr. Hirsch, who retired at the end of January at the age of 50 also ran Hirsch & Fox LLC, a management consultant firm that provided service to Penn Traffic. PRIMARY HEALTH SYSTEMS: Order Extends Co-Exclusive Periods ---------------------------------------------------------- By order entered May 16, 2000, the US Bankruptcy Court for the District of Delaware extended the Co-Exclusive periods with respect to filing a proposed plan of liquidation through and including July 14, 2000, and with respect to the solicitation of acceptances thereof, the court extended the period through September 13, 2000. PRIME RETAIL: CFO Resigns --------------------------- After reporting significant losses of $ 11.7 million for its first quarter of 2000, the Baltimore-based, Prime Retails CFO, Robert P. Mulreaney will step down at the end of June to "pursue other personal and professional opportunities," according to a company statement. Mulreaney started working at the company since 1994 shortly after Prime Retail's IPO. PRISON REALTY: Restructuring Moves Forward ------------------------------------------- An article in The Tennessean on May 26 reports, Nashville-based, Prison Realty Trust's lenders met recently to discuss amending the company's $ 1 billion credit line, putting the prison owner a step closer to its long-awaited restructuring. The company lenders, which is led by Lehman Brothers Holding Inc., will reach an agreement in a few weeks. All of its lenders must agree to the amendment. READ RITE: Extension Of Waiver ------------------------------ Read-Rite Corporation (Nasdaq: RDRT) announced that it has obtained an amendment and extension of the waiver under its bank credit facility with the financial institutions comprising its bank group. This agreement extends the company's waiver under the credit facility through July 26, 2000 if the company's negotiations with alternative lenders to replace the existing bank credit facility results in a commitment agreement being entered into by June 30, 2000. In addition, as a result of this new waiver, the company reduced the outstanding balance under the credit facility by $5 million, leaving an outstanding balance of $42.5 million. SERVICE MERCHANDISE: Seeks Court Approval To Sublease Stores ------------------------------------------------------------ The Tennessean reports on May 26, 2000 that Service Merchandise Co. Inc. is seeking bankruptcy court approval to sublease a portion of 19 of its stores to T.J. Maxx-parent TJX Cos., as part of its first major agreement in a plan to squeeze more value from its real estate assets. The retailer is shrinking its stores to roughly half their size and subleasing the remaining space. The changes are part of Service Merchandise's plan announced in February to expand its jewelry lines while getting out of unprofitable categories, such as toys and electronics. The company believes the TJX agreement will produce more value from its real-estate assets roughly $ 4.5 million in rental revenue per year initially while also attracting additional customer traffic to its stores. TJX also will pay taxes, insurance and other costs. SINGER COMPANY: Disclosure Statement ------------------------------------ The plan of reorganization of The Singer Company NV et al. does not contemplate the substantive consolidation of any of the debtors and thus the plan constitutes a separate plan for each debtor. Under the plan, intercompany claims held by a debtor or a non-debtor affiliate of Singer against a debtor generally will be allowed and treated according to the laws governing such claims. For the debtors being reorganized, holders of allowed general unsecured claims will receive a pro rata distribution of 100% of the New Common Stock to be issued by Reorganized Singer. Singer Brazil, Singer Turkey and Singer US, together with the Holding Companies are reorganizing debtors. The plan contemplates the creation of a Singer Creditor Trust to effectuate the provisions of the plan. Singer US is the company's principal operating entity in the United States. Singer US will be reorganized pursuant to the plan whereby the holders of Secured Claims will be paid in full from $4.5 million in cash and the proceeds of the New Singer US Exit Financing Facility, a $33.5 million credit facility. As a result of intercompany claims held by Singer and certain affiliates against Singer US, Singer and certain affiliates are collectively estimated to receive approximately 40% of the New Common Stock of Singer US under the plan. The company's existing equity interests in Singer US will be cancelled. As a result, on the Effective Date, Singer US will no longer be a wholly owned subsidiary of Singer, and its future business with Singer will be based entirely on contractual rights purusnat to the Singer US License, Distribution and Management Agreement. The Liquidating Debtors include Singer Furniture, Foreign Jurisdiction debtors and no asset debtors. On May 10, 2000, the Bankruptcy Court authorized Singer and the other debtors to enter into a secured postpetition financing facility with Singer's principal prepetition lender, The Bank of Nova Scotia. The DIP Facility is a $100 million facility which was used to repay approximately $80 million of prepetition and existing postpetition indebtedness that was owed by the debtors to Nova Scotia. Most of the balance is available to be utilized by the debtors for working capital and general corporate purposes during the remainder of the Chapter 11 cases. The debtors must repay the DIP Facility to reduce the outstanding indebtedness thereunder to $55 million. This will be accomplished primarily through the sales of non-core assets. In settlement of all claims with the PBGC, the PBGC will be granted an allowed claim against each debtor in the amount of $55 million. PBGC, in full satisfaction for the claim will receive a pro rata share of the Trust Assets as if the PBGC possessed a single claim against Singer in the amount of $35 million and the New Preferred Stock. PBGC would then own approximately 7% of the New Common Stock prior to the effect of a conversion of New Preferred Stock into New Common Stock. The estimated amount of general unsecured claims against Singer is $476 million. The estimated percentage recovery is 17%. SUNSHINE MINING: Creditors Aid Company -------------------------------------- According to an AP report on May 26, 2000, the Sunshine Mining and Refining Company's due date for its $27 million in Eurobonds was extended to June 23 by its creditors. This will give the company ample amount of time to be able to come up with an agreement with its bondholders. SUNTERRA: DCR Downgrades Sunterra to 'DD' ---------------------------------------- Duff & Phelps Credit Rating Co. (DCR) has lowered its ratings on Sunterra Corporation's (NYSE: OWN) senior and subordinated notes to 'DD' (Double-D) from 'CCC' (Triple-C) following the company's announcement that it and certain of its subsidiaries have filed Chapter 11 proceedings and obtained a commitment for debtor-in- possession financing. This rating action follows DCR's recent downgrade to 'CCC' (Triple-C) and continuation of Rating Watch-- Down status on May 16, 2000. The ratings have now been removed from Rating Watch--Down. OWN is the largest international owner and manager of vacation ownership resorts. For additional research on Sunterra Corporation, visit DCR's web site at http://www.dcrco.com(Quick Search: Sunterra). DCR's research is also available on Bloomberg at DCR, First Call's BondCall Direct/Research Direct at http://www.firstcall.comand Multex at http://www.multex.com,as well as through other third-party providers. TEXAS HEALTH ENTERPRISES: Summary of Plan ----------------------------------------- THE is an entity operating and/or owning 56 facilities in the state of Texas, primarily involved in the provision of nursing home services, and HEA is the entity which provides management, billing and accounting services for each of Texas Health's individual homes. Nursing home services are currently provided for approximately 3,500 residents. Overall, these homes are currently operating with a 55% of occupancy. The joint plan of reorganization is filed by both Texas Health Enterprises, Inc. ("THE")and HEA Management Group, Inc. ("HEA") Filed and undisputed scheduled claims against Texas Health exceed $180 million. Texas Health estimates $40-$65 million of class 5 unsecured claims may ultimately be allowed. The plan provides that the various nursing home assets currently operated by THE as debtor will revest in Reorganized THE on the Effective Date; the existing common shares will be canceled and HEA Holding Corporation, a newly created corporation will become the sole shareholder of Reorganized THE. The assets of HEA will vest in HEA Holdings Corporation and each HEA class of claims or interests shall receive parallel treatment to the THE creditors of the parallel class. The precise terms of the recapitalization are more fully stated in the joint plan. The joint plan provides that all unsecured creditors of THE and HEA will have a choice between converting their allowed claims into either common stock of HEA Holdings at a nominal value of $10 per share for each $100 of claims, or into a subordinated cash flow note issued by Reorganized THE in the principal amount of 10% of such allowed claim payable from free cash flow and from designated proceeds of liquidation which could generate up to $3.6 million. Reorganized THE shall not issue more than $8 million in face amount of Subordinated Cash Flow Notes. The debtor will be filing a motion to authorize the increase of the existing DIP line of credit up to $5 million and to broaden potential participants in that line. TOKHEIM CORP: Moody's Lowers Ratings; Outlook Negative ------------------------------------------------------- Approximately $430.0 Million of Debt Securities Affected. New York, May 31, 2000 -- Moody's Investors Service lowered the rating of Tokheim Corporation's $195 million of senior subordinated notes to Ca from Caa1, and lowered the ratings of its $120 million senior secured revolving credit facility and $120 million senior secured term loan to Caa1 from B2. The senior implied rating for Tokheim Corporation (Tokheim) has been lowered to Caa1 from B2 and the senior unsecured issuer rating has been lowered to Caa2 from B3. The outlook continues to be negative. The downgrades and continued negative outlook reflect the protracted damaging impact on Tokheim's cash flow of the steep decline in demand by the major oil companies (majors) for service station equipment in the wake of the recent merger and consolidation activity, weakness in the Euro and certain other currencies, downturns in POS Sales in the aftermath of the Y2K push and continued uncertainties regarding the company's ability to comply with the terms of the bank credit agreement (most recently amended in December 1999). During the first quarter of 2000, there was an approximate 10% drop in year-over-year revenues in real terms, after adjusting for the Euro devaluation. Despite the fact that Tokheim has been able to integrate the Retail Petroleum Systems (RPS) acquisition from Schlumberger and to realize cost saving synergies ahead of schedule, the decline in demand continues to result in lower-than-expected operating cash flow. Cash flow used by operations for the three months ended February 29, 2000 was $8 million, versus $1.3 million during the comparable period of 1999. The company's leverage remains very high and its cash flow coverage of interest remains insufficient, particularly in light of its limited availability under the bank revolving credit. While the company was reportedly in compliance with the amended first quarter bank financial covenants, there is uncertainty as to whether several of the second quarter tests can be met. There is additional concern that the restricted availability under the bank revolving credit facility could impair the ability of the company to make its August 2000 semi-annual senior subordinated note coupon payment. This, in turn, could negatively impact asset values and recoveries under a debt restructuring, particularly given the preponderance of non-domestic assets. In Moody's opinion, the positive long-term opportunities for Tokheim remain evident; however, it must weather considerable demands on cash flow in the near-term in order to be in a position to realize the expected benefits of its acquisitions and enhanced competitive strength. While management still considers the sales slowdown to be temporary, it does not believe that a significant resumption of demand by the majors will be evident until the latter part of 2000. The bank group's December 1999 elimination of the requirement for Tokheim to raise $50 million of new equity to prepay the term loans was a very positive event, as was the access granted to approximately $6 million of additional availability under the revolving credit facility. In return for these and certain other amended terms to the bank credit agreement, the members of the bank group were granted warrants to acquire up to an aggregate of 19.9% of the company's common stock at $3.95 per share, thereby providing the banks with an even more a significant stake in the final outcome of Tokheim's current problems. Despite these improvements to liquidity, Tokheim's operating cash flow may still be insufficient to comply with certain of the newly-amended financial covenants. A comprehensive debt restructuring may be the likely outcome. Moody's recognizes the progress that Tokheim has made regarding its integration of RPS, as well as its significant market position in the industry as one of the three large competitors. However, the debt incurred to acquire RPS is significant for the company at a time when the revenue stream is uncertain for reasons largely out of management's control. The risks for Tokheim remain high and the situation permits no margin for error. Given the current uncertainties, Moody's maintains a negative outlook on the Company. Tokheim Corporation, headquartered in Fort Wayne, Indiana manufactures and services electronic and mechanical petroleum dispensing systems. VENCOR: Obtains Extension to File Its Plan of Reorganization ------------------------------------------------------------ Vencor, Inc. announced that the United States Bankruptcy Court for the District of Delaware (the "Court") has approved the Company's motion to extend the Company's exclusive right to file its plan of reorganization through July 18, 2000. In support of its motion, the Company informed the Court that it has continued to make progress in the reorganization proceedings. The Company also noted that it has reached an understanding with certain of its senior bank lenders, certain holders of the Company's $300 million 9 7/8% Guaranteed Senior Subordinated Notes due 2005 and the advisors to the official committee of unsecured creditors regarding the broad terms of a plan of reorganization. The Company also has continued to engage in discussions with Ventas, Inc. (NYSE: VTR) to obtain its support for a consensual plan of reorganization but is simultaneously pursuing other alternatives. The Company also informed the Court that it has continued its conversations with the Department of Justice regarding a settlement of the ongoing investigations and the negotiation of other agreements with the Company. "We are disappointed that Ventas has attempted to misconstrue the current negotiations as an effort by various constituencies to reduce its dividend," said Edward L. Kuntz, chairman, chief executive officer and president of Vencor. "Our goal from the outset of the reorganization has been to attain a sustainable capital structure for Vencor that will be fair to all lenders, landlords and other creditors and that will enable us to continue to provide high quality care to those people who cannot take care of themselves. We remain committed to that goal." "Unfortunately, the recent public statements by Ventas' management are counter-productive to our efforts to reach an appropriate compromise for all parties involved in the reorganization, including Ventas," Mr. Kuntz said. "These inflammatory statements against the banks and other financial institutions, many of which also hold significant stakes in Ventas, attempt to play on local sentiment rather than address the issues necessary to reach a consensual plan of reorganization." In addition, the Company announced that the Court approved a tax stipulation agreement between the Company and Ventas (the "Tax Agreement"). In connection with the spin-off of the Company in 1998, Ventas and the Company entered into a tax allocation agreement under which Ventas agreed that the Company would be entitled to any tax refunds associated with its former healthcare operations. In early February, a federal tax refund in excess of $26 million was received by Ventas. The Company has asserted that it is entitled to the refund under several grounds, including the terms of the existing tax allocation agreement. Accordingly, the Company demanded that Ventas enter into the Tax Agreement which provides that refunds of federal, state and local taxes received by either company on or after September 13, 1999 be held by the recipient of such refunds in segregated interest bearing accounts. The Tax Agreement requires notification before either party can withdraw funds from the segregated accounts. Vencor and its subsidiaries filed voluntary petitions for reorganization under Chapter 11 with the Court on September 13, 1999. Vencor, Inc. is a national provider of long-term healthcare services primarily operating nursing centers and hospitals. VERSATECH: In Default To File Annual Financial Statements --------------------------------------------------------- The Versatech Group Inc. announced that it is in default to file with Canadian securities regulators its annual financial statements and the accompanying auditors' report, its annual report and its annual information form within 140 days from the end of its financial year and to send the annual report and related materials to the registered holders of its securities within such time. The Company also announced that it expects to be in default to file with Canadian securities regulators its quarterly financial statements for the three-month period ended March 31st, 2000 and to send such financial statements to the registered holders of its securities within 60 days from the end of such period. On May 3, 2000, the Company announced that it had received a demand from its principal bank, the Canadian Imperial Bank of Commerce, for payment in full of all indebtedness and liabilities of the Company and its subsidiaries and related companies to the Bank. As at April 30, 2000, this indebtedness totalled $78,491,140, in the aggregate. The Bank indicated that it intended to enforce its security. Upon receipt of the demand, the Company commenced negotiations with the Bank. On May 5, 2000, the Company announced that it obtained an Order from the Ontario Superior Court of Justice pursuant to the Companies' Creditors Arrangement Act in respect of the Company and four of its operating subsidiaries: Apex Metals Inc., Versatech Sealing Systems Inc., Versatech Canada Limited and Tarxien Components Corporation. PricewaterhouseCoopers Inc. was appointed as Monitor and as Interim Receiver of the Companies subject to the Order. The Company's subsidiaries, Hi-Craft Engineering, Inc., and Commonwealth Regal Industries Inc. (49% interest) are not subject to the Order. The Companies will continue to carry on their businesses in the ordinary course, and the Bank will continue to provide credit to the Companies under a debtor-in-possession facility, while a plan of compromise and arrangement is developed to be presented to creditors. The Chief Executive Officer, Mr. Ian Macdonald, and the President and Chief Operating Officer, Mr. Rob Lee, have resigned as officers of the Corporation and its affiliates. Mr. Macdonald will continue to provide advice to the Companies as a consultant, and both Mr. Macdonald and Mr. Lee will continue as directors of the Corporation. Mr. Macdonald will remain as Chairman of the Board of Directors of the Corporation in a non-executive capacity. The remaining management team at each of the Companies remains in place. The Company is in the process of retaining its auditors, KPMG, to revise its financial statements in light of the application of certain accounting assumptions which the order gave rise to and until such time remains unable to issue its year-end results. The Company expects to be in a position to issue a press release containing a summary of the annual financial statements for the year ended December 31, 1999 and of the quarterly financial statements for the three-month period ended March 31, 2000 by June 30, 2000 and as soon as possible thereafter, the Company will finalize its annual report and its information circular for solicitation of proxies, will file such documents with Canadian securities regulators and mail them to the registered holders of its securities. The Company will disclose promptly any other material information concerning new developments with respect to its default to file and send its financial information to security holders and will issue a new press release within 15 days to keep the market apprised of its status with respect to such defaults. The Company intends to file with applicable securities regulators throughout the period during which it is in default the same information it provides to its creditors at the times such information is provided to creditors. The Company expects that the Ontario Securities Commission will issue a "Management and Insider Cease Trade Order" which would prohibit trading in securities of the Company by its senior officers, directors and significant shareholders. All other shareholders will be allowed to continue trading in the Company's securities. The order would be lifted when the Company files the required financial statements. The Company will disclose promptly any other material information concerning new developments with respect to its default to file and send its financial information to security holders and will issue a new press release every two weeks to keep the market apprised of its status with respect to such defaults. If the Company does not remedy its filing default by July 19, 2000, the Ontario Securities Commission may order a complete cease-trade of the Company. The Versatech Group Inc. (TSE: VGI) through its six operating subsidiaries and a joint venture employs approximately 1,500 employees and manufactures automotive parts for the North American automotive industry. BOND PRICING FOR WEEK OF May 29, 2000 ------------------------------------- DLS Capital Partners, Inc., bond pricing for week of May 29, 2000 Following are indicated prices for selected issues: Acme Metal 10 7/8 '07 10 - 13 (f) Advantica 11 1/4 '08 65 - 67 Asia Pulp & Paper 11 3/4 '05 65 - 67 Conseco 9 '06 72 - 74 E & S Holdings 10 3/8 '06 35 - 37 Fruit of the Loom 6 1/2 '03 51 - 53 (f) Genesis Health 9 3/4 '05 13 - 15 (f) Geneva Steel 11 1/8 '01 16 - 18 (f) Globalstar 11 1/4 '04 31 - 33 GST Telecom 13 7/8 '05 40 - 43 (f) Iridium 14 '05 3 - 3 1/2 (f) Loewen 7.20 '03 44 - 46 (f) Paging Network 10 1/8 '07 32 - 34 (f) Pathmark 11 5/8 '02 22 - 25 (f) Pillowtex 10 '06 37 - 39 Revlon 8 5/8 '08 48 - 50 Rite Aid 6.70 '01 80 - 82 Service Merchandise 9 '04 6 - 8 (f) Trump Atlantic 11 1/4 '06 72 - 74 TWA 11 3/8 '06 29 - 31 Vencor 9 7/8 '08 12 - 14 (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 * * *