/raid1/www/Hosts/bankrupt/TCR_Public/000605.MBX
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, June 5, 2000, Vol. 4, No. 109
Headlines
AMERICAN LAWYER: Moody's Lowers Long Term Debt Ratings
APPLE ORTHODONTIX: Lenders Support Exclusivity Extension
APPLE ORTHODONTIX: Seeks Extension Pursuant to 11 USC 365(d)(4)
CELOTEX: BPB and CertainTeed To Purchase Two Of Five Businesses
CODA ACQUISITION: Disclosure Statement
DISCOVERY ZONE: Converts To Chapter 7
FRUIT OF THE LOOM: Expects To File Plan Midsummer
FRUIT OF THE LOOM: Seeks To Establish Bar Date
GENCOR: De-listing By American Stock Exchange
GENERAL RENTAL: Conversion of Case to Chapter 7
GENESIS WORLDWIDE: Moves To OTC Board
HARVARD PILGRIM: Regains Financial Stability and Credibility
INTERPLAY ENTERTAINMENT: Not Meeting Criteria
IRIDIUM: Castle Harlan Expresses Interest in Acquiring Assets
KOMAG: Announces Signing of Restructured Loan Agreement
LETS TALK: Quick Expansion Causes Quick Demise
MICHAEL PETROLEUM: Receives Two Bids For Company $110MM-$120MM
NUTRAMAX: Orders Authorize Retention of Professionals
PINNACLE MICRO: Meeting of Creditors
RAYTHEON CO.: French Co. Tries To Block Plan To Sell
SAFETY COMPONENTS: Committee Taps Weil, Gotshal & Manges
SERVICE MERCHANDISE: US Trustee's Fifth Amended Committee
STAGE STORES INC: files Chapter 11 Petition
STAGE STORES: To Close Some of Its 648 Stores
STONE & WEBSTER: Jacobs Engineering Signs Definitive Agreement
THIS END UP: Cargo Furniture Offers a Deal
TULTEX CORP: Real Estate Transactions
VISION TWENTY-ONE: Awaits Nasdaq Ruling
WORLDWIDE DIRECT: Procedures For Fletcher Claim Auction
ZETA CONSUMER: Meeting of Creditors
*********
AMERICAN LAWYER: Moody's Lowers Long Term Debt Ratings
------------------------------------------------------
Moody's Investors Service lowered the long-term debt ratings of
American Lawyer Media Holdings, Inc. (ALMH) and American Lawyer
Media, Inc. (ALM). The ratings on the $175 million of senior
unsecured notes, due 2007, at ALM are downgraded from B1 to B2
and the ratings on its senior secured bank credit facility are
downgraded from Ba2 to Ba3. The senior discount notes at ALMH are
downgraded from B3 to Caa1 and its Senior Unsecured Issuer rating
is Caa1. The senior implied rating for the company is B1. The
outlook on the ratings is stable.
Despite the sale of its cash absorptive internet operations, the
termination of other loss generating operations, and the
conclusion of substantial information infrastructure spending,
American Lawyer's ratings are lowered to reflect the company's
history of modest cash flow generation, remaining high leverage
relative to cash flow, and weak cash flow coverage of interest.
The downgrade further recognizes that the initial ratings
incorporated the expectation of cash flow growth from consumer
advertising and new enterprises that would improve the company's
cash flow stream and enhance its credit profile. However, since
its initial rating, commercial advertising revenue did not
develop, un-forecasted capital expenditure needs have
materialized, expenses (primarily internet) have outpaced the
growth of revenues, and as a result ALMH's intermediate term debt
protection measures and self-funding capacity are notably weaker
than we had previously expected.
Excluding losses on internet activities and the Daily Deal,
EBITDA/Interest and Debt/EBITDA coverages were 1.20x and 8.2x,
respectively in 1999. Pro forma for the sale of The Daily Deal,
EBITDA/Interest remains thin at 1.1x in the first quarter ending
3/31/2000. ALMH's actual performance in 1999 resulted in weak
EBITDA/Interest and Debt/EBITDA coverage ratios of .68x and
14.43x, respectively, on EBITDA of $16.1 million and total debt
of $238 million.
However, ALMH's ratings and stable outlook continue to reflect
the remarkable durability of its core revenue stream. The
attractiveness and strength of the ALMH franchise is derived from
the value and distinctive content of its publications such as the
New York Law Journal, The National Law Journal, and The American
Lawyer. The New York Law Journal, with a history that extends
back 150 years, has established itself as the principal source of
news in the New York legal community. The National Law Journal
has established a similar reputation and collectively many of
ALMH's publications enjoy a high subscription renewal rate
amongst its faithful and relatively affluent readership.
Additionally, ALMH's ratings continue to rely on the financial
and strategic support provided by its equity sponsors. Company
management and Wasserstein have worked closely together to
restructure the company's loss making internet operations.
Instead of generating losses for ALM, ALM will realize a cash
annuity stream for content it provides to Law.com, Inc., a major
legal web site. Wasserstein Perella, through its U.S. Equity
Partners Fund, has invested $90 million of cash equity into ALM
to date and has by way of the buy out of ALM internet and Daily
Deal enterprises invested additional funds into ALM.
The new ratings on ALMH and ALM's outstanding obligations
incorporate the inherent value of ALM's content but also
accommodate the near term challenges that the company faces as it
seeks to identify and invest in growth opportunities. While the
company is committed to lower levels of growth expenditures and
rapid termination of unsuccessful enterprises, Moody's recognizes
that growth at ALMH is likely to be driven by incremental
acquisitions and up front spending to extend its product line.
Specifically, ALMH's Ba3 senior secured bank rating continues to
reflect the quality of its collateral package and the relatively
large value of its core publications compared to the size of its
secured debt. The B2 senior unsecured rating at ALM reflects its
upstream guarantees from its subsidiaries but also its effective
subordination to the secured debt at ALM and its place as the
bulk of the capital structure. The senior discount notes at ALMH
reflects its structural subordination to the senior unsecured
notes and the $13.3 million of secured bank debt at ALM, the
operating company, and its reliance on upstream dividends to
service its debt load.
Headquartered in New York City, ALM is a leading integrated media
company focused on the legal industry. ALM currently owns and
publishes 22 national and regional legal magazines and
newspapers. ALM's other businesses include book and newsletter
publishing, production of legal trade shows and conferences,
educational seminars and the distribution of content related to
the legal industry. ALM was formed in 1997 by U.S. Equity
Partners, L.P., a private equity fund sponsored by Wasserstein
Perella & Company.
APPLE ORTHODONTIX: Lenders Support Exclusivity Extension
--------------------------------------------------------
Chase Bank of Texas NA, individually and as agent together with
Paribas, individually and as co-agent support the debtor's
application to extend the exclusive period because the debtor has
located a potential purchaser. The sale of assets to the
purchaser will enable the debtor to generate cash for the estate.
And the lenders assert that this process should not be cut short.
APPLE ORTHODONTIX: Seeks Extension Pursuant to 11 USC 365(d)(4)
---------------------------------------------------------------
Apple Orthodontix, Inc. seeks an extension of the time within
which the debtor must assume or reject its unexpired leases of
nonresidential real property. The debtor is seeking an extension
for an additional sixty days, through and including August 25,
2000.
The debtor has been unable to complete its assessment of the
value or marketability of the unexpired leases and make a
determination with respect to which unexpired leases should be
assumed and which, if any, should be rejected. The debtor
asserts that it needs additional time to assess each unexpired
lease in the context of the business needs of each of its
affiliated practices.
CELOTEX: BPB and CertainTeed To Purchase Two Of Five Businesses
---------------------------------------------------------------
Celotex Corporation, a manufacturer of residential and commercial
building materials, announced that it has accepted an offer for
two of the company's five business operations, which combined
account for approximately 50 percent of the company's revenue.
In addition, the company also announced that it has entered into
a Letter of Intent and is negotiating a definitive agreement
to sell a third business operation that accounts for about 25
percent of the company's revenue. The remainder of the company's
operations continues to be marketed to potential buyers.
The transactions include:
* Ceiling Products and Gypsum Wallboard: BPB plc (BPB) of the
United Kingdom, the second largest producer of wallboard in the
world and the largest outside the United States, is purchasing
Celotex's ceiling products and gypsum wallboard business
operations. These operations include 12 manufacturing
facilities and account for approximately 50 percent of Celotex's
overall revenue. The purchase will allow BPB to expand its U.S.
market by establishing a U.S. operation in gypsum and ceiling
products. Current BPB North American gypsum operations are part
of Westroc Inc., headquartered in Toronto, Canada.
* Roofing Products: The company has signed a Letter of Intent
and is negotiating with CertainTeed Corporation of Valley Forge,
Pa., for the purchase of Celotex's roofing products business
operations, which include five manufacturing facilities,
accounting for about 25 percent of the company's revenue.
Subject to the execution of a definitive asset purchase
agreement, a sales announcement could be made within a very short
time period.
* Insulation: The rigid foam-based insulation and sheathing
business, which includes 5 manufacturing plants and accounts for
about 20 percent of Celotex's operations, is currently being
marketed to a number of potential buyers.
* Fiberboard: At present, a buyer is still being sought for
Celotex's fiberboard operations (5 percent of current revenue
with two manufacturing facilities).
The sale of Celotex's various operations culminates a process
that began in November 1999, when Celotex President and Chief
Executive Officer, John P. Borreca, announced that the Trust was
seeking a buyer or buyers for the company.
Borreca believes the majority of the 2,200 jobs at the company's
24 manufacturing plants and 11 sales offices will be preserved.
Jobs are at risk, however, for many of the 300 administrative
employees at the Celotex headquarters location in Tampa and the
Technical Research Center in St. Petersburg. It is unclear at
this time if any Tampa Bay area operations are planned by an
acquiring company.
The announced sales are expected to occur within the next 30 to
45 days, subject to any possible regulatory issues. Operations
in the Tampa Bay area will continue for up to six months or more.
This time period depends upon negotiations for the remaining
operations of Celotex, as well as current discussions with the
new owners for continuing administrative support during the
transition period.
Beginning in the late 1970s, while a subsidiary of the Jim Walter
Corporation, Celotex was named in a series of lawsuits regarding
its predecessor Panacon's use of asbestos in some products.
Celotex was forced to file for protection under Chapter 11
bankruptcy. In 1997, upon the effective date of the Bankruptcy
Court-approved reorganization plan for the company, ownership of
Celotex was transferred to the Asbestos Settlement Trust, which
today owns 100 percent of Celotex's stock. "The Trust is no
different than any other owner seeking to maximize the value of
its investment," Borreca said at the time the search for a buyer
was announced.
Celotex Corporation is a major manufacturer of building materials
for domestic and international commercial and residential
markets. The company manufactures gypsum wallboard, rigid foam
insulation, premium residential asphalt roofing shingles, and
acoustical ceiling and fiberboard products. In fiscal year 1999,
which ended August 31, 1999, gross sales were approximately $ 600
million. The company employs approximately 2,500 persons and
operates 24 manufacturing facilities located throughout the
United States.
CODA ACQUISITION: Disclosure Statement
--------------------------------------
The debtor, Coda Acquisition Group, Inc. submits a Disclosure
statement for debtor's liquidating plan of reorganization. A
hearing to consider approval of the Disclosure Statement will be
held on June 21, 2000 at 10:00 AM, US Bankruptcy Court for the
Southern District of New York, before the Honorable Burton R.
Lifland. The following is a brief summary of the classification
and treatment of claims and interests under the plan.
Class 1: Priority Claims - estimated amount of claim - $2,000 -
estimate of percentage of recovery: 100% in cash.
Class 2: Subordinated Secured claims: Unable to estimate
percentage of recovery at this time. Subordinated secured claims
will be treated in accordance with an agreement between the
debtor, committee and the subordinated secured creditors and/or a
Final Order of the court. Pending resolution of the treatment of
Class 2 claims, no distribution will be made to holders of Class
2 claims.
Class 3: General Unsecured Claims: Estimated Amount of Claim:
Approximately $10.6 million. Estimate of Percentage of Recovery:
Approximately 10% to 15%. (25% recovery if claim is less than
$1500)
Class 4: Equity - Class 4 will receive no distribution of any
kind under the plan.
DISCOVERY ZONE: Converts To Chapter 7
-----------------------------------------------------------------
The Discovery Zone Inc.'s chapter 11 bankruptcy case has been
converted to a chapter 7 liquidation, according to a newswire
report. The case was the company's second attempt to reorganize
under chapter 11. Chief Judge Farnan Jr. of the U.S. District
Court in Wilmington, Del., stated, "for some time, most of the
parties involved in this effort at reorganization have realized
that: (1) no workable plan could be created; (2) much of the
case's activity has been under the nature of a liquation; and (3)
this case should have been converted to a chapter 7 sooner." The
company used chapter 11 to liquate and organize estate assets
primarily for the benefit of secured creditors. The trustee
believes that the company was unable to pay certain priority
claims that generally must be paid before chapter 11 can be
confirmed. The children's indoor entertainment company's case was
based on arguments made at a hearing last month.
FRUIT OF THE LOOM: Expects To File Plan Midsummer
-------------------------------------------------
A report in Crain's Chicago Business on May 29, 2000, stated that
Fruit of the Loom expects to file a corporate reorganization plan
in federal Bankruptcy Court by midsummer.
The report claimed that Fruit's initial draft, to be filed in
Delaware Bankruptcy Court, is not expected to offer creditors a
significant cash payout. It will, however, propose a debt-for-
equity swap that will give creditors stock in the company after
it emerges from bankruptcy proceedings, according to Fruit
sources.
The plan also will propose issuing creditors new debt in the form
of bonds, warrants or preferred stock. Other details of the
reorganization plan, including a debt-for-equity ratio, still are
being determined.
The debtor has been stabilizing its business by reducing slow-
moving product offerings, closing unprofitable lines such as its
licensed sportswear division and selling off assets.
The company continues a battle with Mr. Farley seeking repayment
of an estimated $65-million bank loan that was guaranteed by
Fruit. Unsecured creditors, fearful that Fruit will be liable for
the Farley debt, are working to have the loan guarantee
invalidated by the Bankruptcy Court.
Secured debtholders are owed roughly $1.4 billion. Unsecured
bondholders are owed about $250 million and suppliers are owed
$125 million to $150 million.
Fruit, which also has debtor-in-possession financing of $625
million through Bank of America, has drawn about $35 million
against its $475-million credit line. It has about $300 million
in available cash through the end of May.
The company expects to receive $50 million to $75 million from
asset sales this year. It's already closed its ProPlayer line,
and two prospective buyers may be interested in its Gitano jeans
business, which the company claims is worth $10 million.
According to the article a sale of the entire company appears
remote. In the first quarter, Fruit posted a loss on continuing
operations of $79.2 million and sales of $374.9 million.
Most promising is the new law expanding trade in the
Caribbean and Central America. The move will alleviate Fruit's
trade duties by as much as $25 million to $50 million annually.
"That's a powerful and helpful thing," says Wilbur Ross,
executive managing director of New York-based Rothschild Inc.,
which owns Fruit's bank debt and bonds.
FRUIT OF THE LOOM: Seeks To Establish Bar Date
----------------------------------------------
The debtors, Fruit of the Loom, Inc., et al. seek to establish
August 15, 2000 at 4:00 PM as the last date for all entities to
file proofs of claim asserting a claim against any Fruit of the
Loom debtor entitiy's estates that arose on or before December
29, 1999.
GENCOR: De-listing By American Stock Exchange
---------------------------------------------
According to a report by The Daily Bankruptcy Review, The
American Stock Exchange informed Gencor Industries Inc. (GX) on
May 23 that the company's stock would be removed from the
exchange's listing Thursday, according to a Form 8-K filed
Wednesday with the Securities and Exchange Commission.
The exchange made its decision after Gencor failed to complete an
ongoing worldwide re-audit by May 9 so as to allow the company to
complete all SEC filing requirements.
Gencor said in the filing that it believes the re-audit "is
progressing well" considering that the re-audit covers the
company's operations for the 1998 and 1999 fiscal years.
GENERAL RENTAL: Conversion of Case to Chapter 7
-----------------------------------------------
On May 15, 2000, the case of General Rental, Inc., debtor, was
converted to a case under Chapter 7 of the Bankruptcy Code. The
Chpater 7 trustee is Jeoffrey L. Burtch, Cooch & Taylor, 824
Market St., Wilmington, DE.
GENESIS WORLDWIDE: Moves To OTC Board
--------------------------------------
Genesis Worldwide(NYSE: GWO), Dayton Daily News reports on May
27, a manufacturer of metal coil processing and other equipment
will be suspended from trading at the New York Stock Exchange
starting on June 5. Genesis, formerly the Monarch Machine Tool
Co., after 73 years under this and a previous name has failed in
maintaining both total shareholders' equity and global market
capitalization of at least $ 50 million.
HARVARD PILGRIM: Regains Financial Stability and Credibility
------------------------------------------------------------
After Harvard Pilgrim Health Care's release from state
receivership, the company can now operate with less restrictive
administrative supervision while continuing to rebuild its
financial stability under the guidance of state insurance
officials, reports Telegram & Gazette on May 27, 2000.
Under the receivership plan, Harvard-Pilgrim already is restoring
its credibility and financial stability. Creditors are being
paid; the decline in membership is slowing; 95 percent of the
employees whose agreements expire July 1 have renewed, and the
first-quarter results lived up to expectations.
INTERPLAY ENTERTAINMENT: Not Meeting Criteria
---------------------------------------------
Interplay Entertainment Corp., Los Angeles reports on May 27,
Irvine computer game maker, is not meeting certain criteria for
it to be able to remain listed on the Nasdaq Stock Market.
However, the IEC disputes the decision, and states that it will
appeal the NASDAQ's notice at a hearing that is scheduled on June
22.
IRIDIUM: Castle Harlan Expresses Interest in Acquiring Assets
-------------------------------------------------------------
Castle Harlan, Inc., the New York merchant bank, announced on
June 1, 2000 that it had filed a letter in federal bankruptcy
court expressing its interest in acquiring the assets of Iridium,
LLC, the bankrupt global satellite communications system, for
$50 million, plus an equity consideration in the successor
entity.
Iridium, a $5 billion venture backed principally by Motorola,
filed for chapter 11 bankruptcy protection last August in U.S.
Bankruptcy Court for the Southern District of New York.
The Castle Harlan proposal provides for a 45-day period during
which the firm would complete the due diligence to determine the
viability of its business plan. If it determines that the plan
is not viable, Castle Harlan said, it is under no obligation to
proceed with the acquisition.
The equity for the acquisition would be provided by Castle Harlan
Partners III, a $630 million private equity investment fund
managed by Castle Harlan. Castle Harlan was formed in 1987 by
John K. Castle, former president and chief executive officer of
Donaldson, Lufkin & Jenrette, and Leonard M. Harlan, founder and
former chairman of The Harlan Company, a real estate investment
and advisory firm.
Since its inception, the firm has made acquisitions totaling more
than $4.5 billion. Companies in the Castle Harlan Partners III
portfolio include Worldwide Flight Services, a major provider of
ground services for more than 200 airlines throughout the world;
Universal Compression, a leading independent provider of
natural gas compression equipment and services; Charlie Brown's
and Marie Callender's, two popular restaurant chains, the former
in New Jersey and the other on the West Coast, and AdobeAir, one
of the nation's leading manufacturers of evaporative coolers and
portable electric heaters.
KOMAG: Announces Signing of Restructured Loan Agreement
-------------------------------------------------------
Komag, Incorporated (Nasdaq: KMAG), a technical leader in the
disk drive component industry, announced on June 1, 2000 that the
company and its senior lenders signed a definitive Loan
Restructure Agreement ("Agreement") that supersedes and replaces
the four senior credit facilities between the company and its
senior lenders. Under the prior credit facilities the company was
in technical default since June 1998. By entering into this new
Agreement the company is no longer in default. Also, pursuant to
the Agreement, certain lenders elected to exchange their notes
for new subordinated convertible notes.
Founded in 1983, Komag, Incorporated has produced over 450
million thin-film disks, the primary storage medium for digital
data used in computer disk drives.
LETS TALK: Quick Expansion Causes Quick Demise
----------------------------------------------
The Broward Daily Business Review reports on June 1, 2000 that
Lets Talk Cellular & Wireless Inc., the Miami-based retailer of
wireless phones and service, filed Wednesday for Chapter 11
bankruptcy, listing $ 38 million in assets and $ 51 million in
liabilities. The company filed in U.S. Bankruptcy Court in
Delaware, where one of its subsidiaries, Cellular Warehouse,
is based.
The reorganization filing comes after months of financial
struggle for the retailer, which went through a successful
initial public offering in 1997, but got delisted from the Nasdaq
exchange in January for not filing timely reports. The company's
stock currently trades over the counter at less than $ 1.
The company has blamed its troubles on a fast expansion after its
IPO. It opened more than 70 new stores in malls throughout the
country, while acquiring about 80 in acquisitions from other
retailers. Currently, the company operates 259 stores in 21
states and Puerto Rico.
For the past few months, the company has been trying to turn
around its losses, and in March it brought back one of its co-
founders, Brett Beveridge, as president and chief executive.
The company focused on integrating the acquisitions, but it lost
focus on its core business, Beveridge said.
LetsTalk.com sells wireless service and equipment over the
Internet. The filing doesn't affect privately held LetsTalk.com,
of which Lets Talk Cellular owns about 30 percent, Beveridge
said.
He added that the reorganization filing will give the mall-based
retailer enough time to complete a restructuring plan it has
begun, helped by a recently obtained $ 15 million credit line to
supply inventory and pay bills and salaries.
MICHAEL PETROLEUM: Receives Two Bids For Company $110MM-$120MM
--------------------------------------------------------------
The unsecured creditors' committee of Michael Petroleum Corp.
recently received two bids for the company, according to a Dow
Jones newswire. Carrizo Oil & Gas Inc. offered $120 million,
and Energen Resources Corp. offered $110 million. The bids top
the $104 million stalking horse bid made by EnCap Energy Advisors
LLC and El Paso Energy Corp., in which all other bids must exceed
to be acceptable. In a contested hearing Wednesday, Michael
Petroleum reaffirmed its support of the EnCap/El Paso offer and
tried to have the disclosure statement related to its
reorganization plan approved. Bankruptcy Judge Wesley W. Steen
(S.D. Texas) previously approved a $1 million breakup fee in
connection with the EnCap/El Paso stalking horse offer. At
a June 12 hearing, Judge Steen will consider approval of a motion
establishing further bidding procedures. (ABI 02-June-00)
NUTRAMAX: Orders Authorize Retention of Professionals
-----------------------------------------------------
By order entered on May 23, 2000 by the US Bnakruptcy Court ,
District of Delaware. the debtors, Nutramax Products, Inc. et al.
are authorized to retain and employ Arthur Andersen LLP as their
independent auditors, accountants, and tax consultants under a
gneral retainer.
By order entered on May 23, 2000 by the US Bankruptcy Court,
District of Delaware, the debtors are authorized to retain and
emploooy the firm of Fried, Frank, Harris, Shriver & Jacobson
under a general retainer to represent the debtors as their
attorneys in these cases.
PINNACLE MICRO: Meeting of Creditors
-----------------------------------
A chapter 11 bankruptcy case concerning Pinnacle Micro Inc. was
filed on April 20, 2000. Attorney for the debtor is Robert E.
Opera, Lobel & Opera, 3 Civic Plaza Suite 280 Newport Beach, CA
92660. A meeting of creditors is set for July 6, 2000 at 9:30 AM,
Ronald Reagan Federal Building, 411 Fourth St., Room 1-159, Santa
Ana, California.
RAYTHEON CO.: French Co. Tries To Block Plan To Sell
-------------------------------------------
The Boston Herald reports on May 27, 2000 that Ingerop
Participations SA of Courbevoie, France, blocked Raytheon Co.
from selling its troubled construction unit claiming that
Raytheon's plan to sell the engineering and construction unit to
Morrison Knudsen Corp., violates a 1999 agreement it has with the
Lexington defense contractor.
In a lawsuit filed by Ingerop in New York State Supreme Court in
Manhattan, Raytheon promised to notify Ingerop if it planned to
sell the Cambridge-based construction unit and give the French
company a chance to put in a bid. Ingerop claims it was never
told about Morrison Knudsen's bid.
"We believe the action is without merit," said Deborah Andersen,
a Raytheon spokeswoman. "We're confident it won't impede with the
closing of the transaction."
SAFETY COMPONENTS: Committee Taps Weil, Gotshal & Manges
--------------------------------------------------------
The statutory committee of unsecured creditors of Safety
Components International, Inc. seek an order approving the
employment and retention of Weil, Gotshal & Manges LLP as co-
attorneys for the Committee. The members of the Committee are:
Sun America Investments, Putnam Investments, Merrill Lynch Asset
Management, E.I. DuPont and Company and Honeywell, Inc.
The committee has chosen the firms of Weil, Gotshal & Manges and
Richards, Layton & Finger PA (local counsel) as co-attorneys.
The firm will be require to render inter alia the following
services:
To consult with the committee, the debtors and the US Trustee
concerning the administration of these cases;
To review , analyze and respond to pleadings filed by the debtors
with the court, and, with Richards, Layton, to participate in
hearings on such pleadings;
To investigate the acts, conduct, assets, liabilities and
financial condition of the debtors, the operation of the debtors'
businesses and or proposals to restructure, such businesses and
any matters relevant to these cases in the event and to the
extent required by the Committee;
To take all necessary action to protect the rights and interests
of the Committee, including, but not limited to, the negotiation
and preparation of documents relating to a Chapter 11 plan,
disclosure statement and confirmation of such plan;
To represent the Committee in connection with the exercise of its
powers and duties under the Bankruptcy Code and in connection
with these Chapter 11 cases.
The firms' hourly rates range from $360 to $650 per hour for
partners and counsel; $155 - $355 for associates and $75-$125 for
paralegals.
SERVICE MERCHANDISE: US Trustee's Fifth Amended Committee
---------------------------------------------------------
The United States Trustee makes its fifth amended appointment to
the Committee, replacing Lucent Technologies with Uniden
Financial, Inc. As a result, the members of the Committee are:
(1) American Credit Indemnity Co.
100 East Pratt Street
Baltimore, MD 21202-1008
(2) The Bank of New York
101 Barclay Street
New York, NY 10286
(3) Michael J. Biscone, Esq.
151 Main Street
Ravena, NY 12143
(4) State Street Bank and Trust Co.
Corporate Trust Dept.
6th Floor, 2 Avenue de Lafayette
Boston, MA 02111
(5) Uniden Financial, Inc.
4700 Amon Carter Blvd.
Fort Worth, TX 76155
(6) Mattel, Inc.
333 Continental Blvd.
El Segundo, CA 90245
(7) Simon Property Group L.P.
115 W. Washington St.
Indianapolis, IN 46220
(8) Bulova Corporation
One Bulova Avenue
Woodside, NY 11377
(9) Vijay Gold Designs
1212 Avenue of the Americas, 9th Floor
New York, NY 10036
(10) Remington Products Company, LLC
60 Main Street
Bridgeport, CT 06604
(11) G. Thomas Curtis
Diversified Trust Company
One American Center, Suite 870
Nashville, Tennessee 37203
STAGE STORES INC: files Chapter 11 Petition
-------------------------------------------
Stage Stores Inc. (NYSE:SGE) filed for protection under Chapter
11 of the United States Bankruptcy Code. The company commenced
its reorganization proceedings in the United States Bankruptcy
Court in Houston.
"Because we have taken this most serious step, we believe Stage
Stores will survive and be able to prosper once again," says Jack
Wiesner, chairman, interim CEO and president. "Once we
reorganize, we will be a stronger company, more focused on our
core business. This should result in our becoming a more
competitive and profitable company.
"Despite the difficulties the company has experienced, Stage
Stores' basic business concept is viable because the majority of
our stores are profitable," Wiesner notes. "With our Stage,
Bealls and Palais Royal stores, we fill an important need by
providing brand-name apparel to underserved markets, mostly in
small town America."
The company is in final discussions for a three-year, $450
million debtor-in-possession credit facility with CITICORP USA
INC. as agent, subject to documentation and bankruptcy court
approval. The new facility will refinance certain indebtedness
and provide for significant levels of incremental working
capital to Stage.
In conjunction with the Chapter 11 filing, the company's stock
will be subject to "delisting" from the New York Stock Exchange.
"While this course of action is very strong medicine for our
company, filing bankruptcy can have definite positive aspects for
our customers, employees and vendors," Wiesner says. "Once signed
and approved, the debtor-in-possession credit facility will
provide a significant line of credit and access to new capital.
Payrolls and benefits will continue. In addition, we have the
opportunity to work with our vendors to get the merchandise we
need flowing back into the stores."
During its reorganization period, the company has retained the
services of Ron Wuensch of Houston to help the company through
the Chapter 11 process. "Ron has put together a talented advisory
group with extensive legal and financial experience in
reorganizations," Wiesner notes. "Their expertise will allow for
the reorganization process to be as smooth and seamless as
possible, with very little effect on our customers and daily
operations."
Stage Stores is actively seeking a new CEO to lead it back into
profitability. Until that person is on board, Wiesner will
continue to guide the company, along with an executive committee
consisting of top management in merchandising, marketing, finance
and operations. A board member of Stage Stores, Wiesner was CEO
of C.R. Anthony Co., a national apparel chain that Stage
Stores acquired in 1997.
Stage Stores Inc. brings nationally recognized brand name
apparel, accessories, cosmetics and footwear for the entire
family to small towns and communities throughout the United
States. The company currently operates more than 600 stores in 33
states, primarily under the Stage, Bealls and Palais Royal
names.
STAGE STORES: To Close Some of Its 648 Stores
---------------------------------------------
According to an article in The Wall Street Journal on Friday,
June 2, 2000, Stage Stores Inc. has suffered from lackluster
sales, difficulties paying vendors and upheavals in its executive
ranks recently.
For the year ended Jan. 29, Stage reported a net loss of $129.1
million, or $4.61 a share, on sales of $1.12 billion. In
February, the company, citing a board inquiry, said Chairman,
President and Chief Executive Carl Tooker left the company. The
company said it found transactions between Mr. Tooker and the
company weren't properly reported to the board.
Stage said under the reorganization it will close some of its 648
stores, but payrolls and benefits for remaining employees will
continue.
STONE & WEBSTER: Jacobs Engineering Signs Definitive Agreement
--------------------------------------------------------------
Jacobs Engineering Group Inc. (NYSE: JEC) announced on June 2,
2000 that it has signed a definitive sale agreement with Stone &
Webster, Incorporated (OTC:SWBI) regarding a proposed transaction
in which Jacobs would acquire substantially all of Stone &
Webster's assets in exchange for$150 million in cash and stock
and the assumption of substantially all of the Stone & Webster's
liabilities shown on its March 31, 2000 balance sheet, standby
letters of credit, and its liabilities under a new credit
facility from Jacobs entered into on May 9, 2000 pursuant to
which up to $50 million of credit is being made available to
enable Stone & Webster to operate its businesses until the asset
sale is consummated.
As previously indicated, in conjunction with and as a condition
to the proposed transaction Stone & Webster will be seeking
bankruptcy court approval of the asset sale and credit agreement.
Stone & Webster fully expects to continue operating its
businesses in the normal course during the reorganization
process. The Company's operations have remained functional and
its employees are expected to transition smoothly into the Jacobs
organization.
Jacobs President and CEO Noel G. Watson said, "We are pleased
with the prospects for the combination of Stone & Webster with
Jacobs and believe that the synergies realized from the combined
operations will benefit the shareholders, clients, employees, and
suppliers of both companies."
The proposed transaction is subject to approval under the Hart-
Scott-Rodino Act, confirmation of the Stone & Webster's plan of
reorganization by the U.S. Bankruptcy Court, completion of due
diligence by Jacobs, and other customary conditions.
Stone & Webster is a global leader in engineering, construction
and consulting services for power, process/industrial and
environmental/infrastructure markets.
Jacobs Engineering Group Inc. is one of the world's largest
providers of professional technical services. With annual
revenues exceeding $3 billion, the company offers full-spectrum
support to industrial, commercial, and government clients in
diverse markets. Services include scientific and specialty
consulting as well as all aspects of project execution and
operations & maintenance.
THIS END UP: Cargo Furniture Offers a Deal
------------------------------------------
Cargo Furniture Inc. announced on June 1, 2000 that it will offer
a 10 percent discount to former This End Up retail customers who
had already placed a deposit with the now-bankrupt retailer. This
End Up has filed for bankruptcy and has announced plans to
liquidate the company.
Cargo Furniture, the Fort Worth, Texas-based designer, retailer
and wholesaler of casual lifestyle furniture, said former This
End Up customers can place orders for similar crate-style
furniture by visiting a Cargo Collection store or by calling 800-
333-1402 to receive a Cargo catalog. Consumers also can visit
Cargo's website at www.cargohome.com to learn more about the
products and find Cargo store locations. The 10 percent discount
offer will extend through August 31, 2000 for consumers with
deposits with This End Up.
"We believe helping these retail customers is the right thing to
do as they face the real possibility of lost deposits or orders
going unfilled," said Lisa Thornton, president of Cargo. "As a
leader in the crate-style category, we wanted to step in and
assist during this situation. And we have the quality products,
manufacturing resources and capacity to do so."
Cargo Furniture recently expanded its product sourcing and
capabilities with the addition of manufacturing partners in
Mexico. These added capabilities, initiated by Cargo to bolster
the Company's retail stores and nationwide dealer network, allow
the Company to address the demand created by the bankruptcy of
This End Up.
"We want consumers to know that Cargo can be their source for
high- quality, crate-style furniture and a complete line of
accessories," said Thornton. "Our investments over the last year
in new product development, broadened capabilities and increased
capacity have Cargo well positioned in all the markets we serve."
Cargo Furniture Inc., a division of Tandycrafts, Inc. (NYSE:
TAC), is a designer, retailer and wholesaler of children's
furniture, accessories and casual lifestyle furniture. The
company's products are sold through 22 company-owned Cargo
Collection stores, a nationwide network of 110 dealers, contract
sales and a toll-free ordering division. Additional information
on Cargo -- including product photos and a store and dealer
locator -- are available on the company's website at
www.cargohome.com
TULTEX CORP: Real Estate Transactions
-------------------------------------
The debtors, Tultex Corporation, et al. seek court authorization
for the sale of the South Boston Facility, South Boston,
Virginia and the Bastian Facility, Bland County, Virginia. The
debtors seek to sell the Bastian Facility to General Injectables
& Vaccines, Inc. for a purchase price of $200,000 subject to
higher offers. The debtors seek to sell the South Boston
Facility to P&P Partnership for a purchase price of $255,000
subject to higher offers.
The debtors seek authroity to assume and assign a certain
nonresidential real property lease covering premises in
Brownsville, Texas to VF Knitwear, Inc., subject to competing
offers. Under the assignment agreement the estates will net in
excess of $150,000.
VISION TWENTY-ONE: Awaits Nasdaq Ruling
---------------------------------------
According to The Tampa Tribune on May 27, the recuperating Largo-
based eye-care company, Vision Twenty-One Inc., announced that
Nasdaq National Market officials would take "another few weeks"
to come up with a decision whether to delist the firm following a
meeting recently. Theodore Gillette, Vision's CEO, met recently
with Nasdaq officials facing expulsion from the stock exchange
due to a number of violations, including late filings in SEC
statements.
WORLDWIDE DIRECT: Procedures For Fletcher Claim Auction
-------------------------------------------------------
Worldwide Direct, Inc. and its parent company SmarTalk
TeleServices, Inc. and SMTK's direct and indirect subsidiaries
that are debtors seek entry of an order to establish procedures
for the solicitation and auction fo the $7 million general
unsecured claim previously allowed in favor of Fletcher
International Ltd. and assigned to the debtors. By court order
Fletcher was to assign the allowed claim to the debtors in
exchange for a payment of $2.1 million. The debtors desire to
solicit bids on the Allowed Claim and, in the absence of superior
offers, to put the Allowed Claim to CoMac for $2.1 million.
Bidding for the allowed claim will commence at $2.125 million and
will proceed in increments of not less than $25,000. The debtor
seeks approval of the procedures for the auction.
ZETA CONSUMER: Meeting of Creditors
-----------------------------------
A petition for reorganization under Chapter 11 of the Bankruptcy
Code has been filed by or against Zeta Consumer Products Corp.
The debtor's attorney is Walter Greenhaigh, Duane, Morris &
Heckscher, One Riverfront Plaza, Newark, NJ. A meeting of
creditors will be held on June 26, 2000 at 9:00 AM at the Office
of the US Trustee, One Newark Center, Newark NJ. The deadline to
fiel a proof of claim in the case is September 25, 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
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Copyright 2000. All rights reserved. ISSN 1520-9474.
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