/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/000620.MBXT R O U B L E D C O M P A N Y R E P O R T E R Tuesday, June 20, 2000, Vol. 4, No. 120 Headlines AHERF: To Pay Creditors a Fraction of the Debt AMTRAK: Needs $9.1 Billion Capital Investments Through 2015 ARM FINANCIAL: Hearing to Considers Disclosure Statement BOSTON MARKET: McDonald's May Close Boston Chain CAREMARK RX INC: Court Approves Class Action Settlement CARROLLTON GRAPHICS: Order Approves Disclosure Statement CENTENNIAL COAL: Seeks Order Approving Settlement Agreement CITY BREWING: Financial Troubles Eminent CONSUMER PORTFOLIO SERVICES: Annual Meeting Set For July 12, 2000 CUMULUS MEDIA: Moody's Revises Ratings; Outlook To Negative DAI-ICHI HOTEL ENTERPRISE: Applies for liquidation DATAPOINT: Sale of European Operations; Name Change to DynaCore DEVLIEG BULLARD: Seeks Authority To Sell Substantially All Assets FLOORING AMERICA: Moody's Lowers Sub Notes To C After Filing HAZAMA CORP.: Records 19.8B yen group net loss HOMEMAKER INDUSTRIES: Mass. Company Owns Majority Stake INACOM CORP: Files For Bankruptcy, Plans To Cut 6,000 Workers INACOM: MicroAge Offers Rapid Transition Services INTEGRATED HEALTH: Motion For Extension of Exclusive Periods JUST FOR FEET: Former Shareholders File Suit MASTER GRAPHICS: Company Names CEO MAXICARE HEALTH: Annual Meeting Set For September 14, 2000 MONTGOMERY WARD: Motion To Establish Distribution Trust MOUNTAIN HEIGHTS: Files Chapter 11 Petition NIIGATA ENGINEERING: Posts 38B yen group loss NUMBER NINE VISUAL: Order Approving Disclosure Statement OMNA MEDICAL: Court Approves Committee Counsel PENNCORP FINANCIAL: Entry of Order Confirming Plan PETSEC: Agreement To Sell Petsec Energy Inc. SAFETY-KLEEN: Finalizes Initial DIP Financing SAFETY-KLEEN: Organizational Meeting To Form Committees SATO KOGYO CO.: Posts sixth straight group net loss SILICON GAMING: Extends Expiration Date of Exchange Offer TEXAS HEALTH ENTERPRISES: Hearing on Disclosure Statement UNITED COMPANIES: Reports Purchase Agreements to SEC VENCOR: Agrees To Amend DIP Financing VENCOR: Extension of Exclusivity VISTA EYECARE: Taps McDonald Investments Meetings, Conferences and Seminars ********* AHERF: To Pay Creditors a Fraction of the Debt ---------------------------------------------- According to an AP report on June 13, 2000, troubled Allegheny Health, Education and Research Foundation will pay some of its major creditors a fraction of the amount they owe. William Scharffenberger, appointed trustee, represents the defunct health system, filed for bankruptcy protection from its creditors under Chapter 11 almost two years now. The plan to settle some of 7,000 claims, including those that amounts to more than $ 300 million belongs to three major creditors, has to be approved by a judge in a U.S. Bankruptcy Court. AMTRAK: Needs $9.1 Billion Capital Investments Through 2015 ----------------------------------------------------------- Congress's investigative and auditing arm is expected to release a report that Amtrak faces capital-investment needs of about $9.1 billion through 2015, and that it has failed to develop measures of labor productivity for its different lines of business and a multiyear capital plan. Amtrak "has had, and continues to have, difficulty in controlling its costs and meeting its capital- investment needs," according to the report. Amtrak is required by Congress to become operationally self- sufficient by fiscal year 2003, though it would still need capital funds for infrastructure and equipment after that. Should the company fails to meet the goal, it could face restructuring or liquidation. (Wall Street Journal 19-Jun-00) ARM FINANCIAL: Hearing to Considers Disclosure Statement -------------------------------------------------------- The debtors intend to present the Disclosure Statement and any changes or modifications thereto for approval at a hearing before the Honorable Peter J. Walsh beginning at 2:30 PM on July 5, 2000 in the US Bankruptcy Court for the District of Delaware, Marine Midland Plaza, 5th Floor, 824 Market Street, Wilmington, DE. No objections received after July 3, 2000 will be heard or considered by the court. BOSTON MARKET: McDonald's May Close Boston Chain ------------------------------------------------ According to Crain's Chicago Business on June 12,2000, McDonald's suggested that the company will downsize, or perhaps shut down, the Boston Market chain. McDonald's acquired the Boston Market for $ 176.1 million which was completed late May. Others wrongly thought that McDonald's would recycle all of Boston Market's locations. Analysts thinks about 500 out of 850 units will be retained. CAREMARK RX INC: Court Approves Class Action Settlement ------------------------------------------------------- The Circuit Court of Franklin County, Alabama has entered a Final Order approving Caremark Rx Inc.'s previously announced class action settlement between the company and the remaining holders of the company's Threshold Appreciation Price Securities ("TAPS"). Circuit Judge John D. Jolly entered a final order confirming approval of the settlement over the objections of some TAPS holders. The fairness hearing on the settlement of the class action was held on May 30 and 31, 2000. At the conclusion of the hearing, some objecting TAPS holders filed an appeal with the Supreme Court of Alabama before final orders were entered on the motions filed by the objectors and before the Circuit Court ruled on the motion for final approval of the settlement. The company filed a motion to dismiss this appeal on June 2, 2000. The Supreme Court of Alabama granted the motion late Wednesday. Following the Circuit Court's certification of a no opt out class on March 29, 2000, and following the Court's order giving preliminary approval of the settlement on April 10, 2000, the group of TAPS holders who filed the appeal with the Supreme Court of Alabama had filed a separate suit in the Supreme Court of the State of New York on April 11, 2000, making the same basic allegations as had been previously made. This suit has been stayed by the Supreme Court of the State of New York pending action by the Circuit Court of Franklin County, Alabama. "The orders of the court are a very positive step toward final resolution of this matter. While it is possible that certain TAPS holders will pursue any appellate rights they may have, the company's position is that the courts have spoken and that the final order approving the class action settlement should stand," said Mac Crawford, Chairman and Chief Executive Officer of Caremark Rx. For full text of Judge Jolly's final order access http://www.sec.gov/cgi-bin/srch-edgar?0000950144-00-007784 on the Internet, free of charge. CARROLLTON GRAPHICS: Order Approves Disclosure Statement -------------------------------------------------------- By order entered on June 2, 2000, the Disclosure Statement of Carrollton Graphics, Inc. was approved. A hearing shall be held before the Honorable Joseph J. Farnan, Jr., chief Judge, United States District Court for the District of Delaware, US Courthouse, 6th Floor, Courtroom 6A, 844 King Street, Wilmington, DE on July 27, 2000 at 2:00 PM to consider confirmation of the plan. The plan shall be funded from cash consisting of a $50,000 contribution from IBJ to be paid to the Committee upon payment of the first installment of the Annual Payment in calendar year 2002 to IBJ from Graphic Planet, Ltd. in connection with the sale of the assets to Graphic Planet, if Graphic Planet is required to make such payment under the Agreement, a $50,000 cash contribution from the Buyer, proceeds from commencement of preference actions, and the Equity Interest. The debtor estimates that the total approximate amount of $100,000 to $350,000 shall be available under the plan for distribution to creditors. The debtor believes that Class 3 claims total approximately $14 million including the Undersecured Claim of IBJ in the total amount of $6 million dollars and the Unsecured claims of Mellon Ventures and DSI in the total approximate amount of $4 million dollars and $266,400 respectively. CENTENNIAL COAL: Seeks Order Approving Settlement Agreement ----------------------------------------------------------- The debtors, Centennial Coal Inc. and its affiliates seek court approval of three agreements, the Settlement Agreement, a certain Asset Purchase and Sale Agreement between and among the debtors, Black Ag and Island Fork and a Reclamation Agreement between and among the Debtors and Black Ag. These Agreements represent the culmination of more than six months of efforts by the debtors, the DIP Lenders and the debtors' bonding company, Frontier, to reach a global settlement that will enable the debtors to bring these Chapter 11 cases to an expeditious close, maximize the value of the debtors' assets for the benefit of the debtors' estates and settle reclamation liability and priority issues. Collectively, the agreements provide for among other things: (1) the debtors' sale of a substantial portion of their assets, including a large segment of their mining equipment, leaseholds and contracts to Black Ag; (2) Black Ag's assumption of the debtors' reclamation obligations and liabilities at the debtors' active mining sites; and (3) the settlement of various reclamation and litigation issues integrally related to a successful completion of these cases. The terms and conditions of the Agreements are to be incorporated into, and serve as the basis of, the debtors' first amended joint liquidating plan of reorganization. Black Ag will acquire the Assets, as defined in the purchase agreement, for the purchase price of $2.5 million plus certain payments made to the debtors in connection with the TVA Contract. The debtors submit that the most important factors to consider in deciding whether to approve the agreements are (1) the debtors' current level of operations and cash flow have proven insufficient to support the debtors' businesses on a going concern basis; (2) the prolonged and severe downturn of the Western Kentucky coal industry has made it unlikely that the debtors will be able to obtain additional sources of revenue to fund the debtors' continuing operations; (3)extensive historical post-petition efforts to market the debtors' businesses and assets have failed to result in a consummated transaction for the purchase of the debtors' businesses or assets prior to the instant Agreements; (4) the possible loss of value of the Assets in the event that the Sale and the transactions contemplated by the Agreements are not approved; and (5) the effect of the proposed assets dispositions and related transactions on the debtors' estates and on the debtors' prospects for a viable plan of liquidation. CITY BREWING: Financial Troubles Eminent ---------------------------------------- According to an AP report on June 13, 2000, 30 employees were sent home, reducing the labor force of City Brewing Co. to half. City Brewing President, Randy Smith says a Chicago bank just launched a foreclosure of a $4.5 million loan. Also, New York- based Platinum Holdings Inc., failed to provide $1 million into the business as promised a couple of weeks before to aid the financially challenged company. CONSUMER PORTFOLIO SERVICES: Annual Meeting Set For July 12, 2000 ----------------------------------------------------------------- The annual meeting of the shareholders of Consumer Portfolio Services, Inc. will be held at 10:00 a.m., local time, on Wednesday, July 12, 2000, at the company's offices, 16355 Laguna Canyon Road, Irvine, California for the following purposes: o To elect the company's entire Board of Directors for a one- year term. o To amend the company's 1997 Long-Term Incentive Stock Plan to increase the number of shares issuable pursuant to awards under the plan. o To ratify the appointment of KPMG LLP as the company's independent auditors for the fiscal year ending December 31, 2000. o To transact such other business as may properly come before the meeting. Only shareholders of record at the close of business on June 14, 2000, are entitled to notice of and to vote at the meeting. CUMULUS MEDIA: Moody's Revises Ratings; Outlook To Negative ----------------------------------------------------------- Moody's Investors Service revised the outlook on Cumulus Media's ratings to negative from stable. Cumulus' long term debt ratings include the B1 rating on the $225 million of guaranteed senior secured credit facilities due 2008, the B3 rating on its $160 million of guaranteed senior subordinated notes, due 2008, and the "caa" rating of its $106 million of exchangeable redeemable preferred stock, due 2009. The senior implied and issuer rating at Cumulus Media are B1 and B2, respectively. The change in Cumulus' ratings outlook to negative reflects the continued high leverage given the likelihood that the company will use debt (as well as asset sales) to fund it's remaining acquisitions (valued at approximately $420 million). The negative outlook also acknowledges Cumulus' disappointing margin performance, weak cash flow generation since the inception of its acquisition strategy, and inability to cover overhead, (during the seasonally low first quarter), in part, as a result of the assumption of a greater number of radio stations than originally expected and uneven hiring of a substantially larger sales force. Additionally, the company's restatement of its financials and subsequent resignation of its auditors pose concerns regarding internal controls. Notably, shortly thereafter, the company announced new auditors, KPMG. Cumulus' recent difficulties precipitated a decline in the company's market equity. As a result, the company is not likely to be able to use equity as a means of currency to fund acquisitions or to reduce debt. Total debt at 3/31/2000 was $285 million although the company expects that total debt may peak at a high $477 million if it is able to execute its planned acquisitions. The negative outlook anticipates that the ratings may decline if debt protection measures do not adequately improve in the near term. Moody's also acknowledges that Cumulus' considerable portfolio of radio station assets as well as the portfolio of radio towers provides potential asset sales as a means of reducing its debt burden. Cumulus has already entered into an asset swap agreement with Clear Channel which reduced cash requirements by $178 million and the company is currently pursuing asset sales. The negative outlook incorporates the challenge associated with the implementation of Cumulus' new sales model as well as the risks associated with the substantial in-market competition from local newspapers and television broadcasters. Cumulus' is highly leveraged with limited cash flow coverage of interest. As of last 12 months ended 3/31/2000, Cumulus hand pro forma EBITDA-less- capital expenditures interest coverage of 1.2 times, (total Debt + Preferred) EBITDA of 8.8 times and EBITDA margins of approximately 23%. However, Cumulus benefits from the strategic significance of being the third largest radio station group in the country, on a pro forma basis, with cash flow diversified across 304 clustered radio stations in 60 markets. Further, Moody's considers that the experienced, and newly installed operating management team may realize greater cash flow going forward from improved margins and enhanced advertising revenues at its under-performing stations. Finally, Cumulus' value is supported by the positive momentum within the radio sector and the equity foundation upon which the company was built. The company has raised approximately $571 million in equity markets since going public in July 1998. The outlook could return to stable if Cumulus proves able to enhance advertising revenues and margins, reduce leverage, and improve cash flow coverage of its obligations over the near term. Cumulus Media is headquartered in Milwaukee, Wisconsin. With the completion of its pending acquisitions, it will own 304 radio stations in 60 markets. DAI-ICHI HOTEL ENTERPRISE: Applies for liquidation -------------------------------------------------- Dai-Ichi Hotel Enterprise Co, real estate arm of the failed Dai-Ichi Hotel Ltd (TSE:9710), has filed an application for liquidation with the Tokyo District Court due to debt estimated at 65.2 billion yen (US$612.2 million). The firm provided comprehensive real estate brokerage services, including buying and selling condominiums and leasing space in the Tokyo's Seafort Centre Building. Dai-Ichi Hotel applied for court protection from creditors on May 26, prompting five Dai-Ichi hotel group firms to follow suit. Total Dai Ichi Hotel group debt is estimated at 212.2 billion yen. (Asia Pulse 16-Jun-2000) DATAPOINT: Sale of European Operations; Name Change to DynaCore --------------------------------------------------------------- Datapoint Corporation (OTCBB:DTPTQ) announced that the US Bankruptcy Court for the District of Delaware approved the previously reported sale of its European operations and certain U.S. Assets to Datapoint NewCo I Limited for $49.5 million in cash, less certain adjustments, including an adjustment in the event that the aggregate shareholder deficit of the European Operations exceeds $10.0 million at closing. The sale is expected to close within 30 days. In addition, the Bankruptcy Court approved the Company's name change to Dynacore Holdings Corporation. The Company intends to file a reorganization plan pursuant to Chapter 11 of the Bankruptcy Code. Negotiations have commenced regarding the terms of such plan with members of the Committee of Unsecured Creditors previously appointed in the bankruptcy case. The sale of its European Operations is consistent with the direction of the Corporation to focus its efforts and resources on acquiring, developing and marketing products with Internet and E-commerce applications. With its U.S. headquarters in San Antonio, and international headquarters in Paris, France, Datapoint is a recognized innovator in modern networking infrastructure. Datapoint specializes in the design, integration, and maintenance of data, voice and networking communications solutions including call center, and computer-telephony integration. DEVLIEG BULLARD: Seeks Authority To Sell Substantially All Assets ----------------------------------------------------------------- The debtor, DeVlieg-Bullard, Inc. seeks an order authorizing the debtor to sell substantially all of its remaining assets to KPS Special Situations Fund, LP a New York Limited Partnership or its designee pursuant to an Asset Purchase Agreement. The Asset Purchase Agreement provides that KPS will pay approximately $31.55 million to he debtor, subject to certain adjustments and will also assume certain liabilities of the debtor. The debtor seeks a Closing Date no later than June 30, 2000. Although the debtor's management remains confident that its precision machine tool, field service, and aftermarket parts businesses are fundamentally sound, debtor's operations and this bankruptcy case have been "plagued by inadequate financing and severe cash flow restrictions." The debtor submits that it has limped along under the terms of its postpetition financing facility with the CIT Group/Business credit, Inc. which has been the only financing available to the debtor in its current circumstances. The debtor has come to the conclusion that the only viable alternative is to sell the debtor's assets as a going concern. The debtor will be unable to continue its operations past June 20, 2000 , the current expiration of the DIP Credit Agreement, without additional financing. Without a comprehensive assets sale at this time, all going concern value of the debtor's business would likely be lost. FLOORING AMERICA: Moody's Lowers Sub Notes To C After Filing ------------------------------------------------------------ Moody's Investors Service lowered the ratings of Flooring America's Inc. senior subordinated notes to C from Caa1 after the company's June 15th bankruptcy filing. The company's senior implied rating and issuer ratings were lowered to Caa2 and Caa3, respectively, from B2 and B3. The B1 rating on the company's secured debt was withdrawn. The new ratings reflect a low level of tangible asset coverage to debt and other obligations and uncertainty about the viability of Flooring America's franchise operations after the bankruptcy filing. Flooring America Inc., headquartered in Kennesaw, Georgia, is a leading retailer of floor covering. It retail network extends to over 1,000 storefronts, of which about one-third are operated by the company. HAZAMA CORP.: Records 19.8B yen group net loss ---------------------------------------------- Hazama Corp. posted a consolidated net loss of 19.82 billion yen for the fiscal year ended March 31, a huge turnaround from the 42 million yen profit it reported last fiscal year. The contractor noted that its group sales during the period dropped 15 percent to 452.41 billion yen, attributing the drop to chronic shrinkage in domestic construction. Hazama's operating profit also dipped 13 percent to 16.07 billion yen. Hazama booked special losses of 38.47 billion yen, nearly six times the previous year's 6.97 billion yen in special losses. This year's extraordinary losses included a 10.07 billion yen loss from the devaluation of land being held for development and resale. In May, Hazama proposed a restructuring plan that included a request for debt forgiveness to its creditor banks, including Dai-Ichi Kangyo Bank Ltd. The plan also introduces measures for cutting its interest-bearing liabilities. For the current fiscal year, Hazama projects another but narrower group net loss of 1.2 billion yen. HOMEMAKER INDUSTRIES: Mass. Company Owns Majority Stake ------------------------------------------------------- Arley Corp., a company located in Brockton, Mass., has bought a 60 percent stake of Homemaker Industries, a rug manufacturer which filed for Chapter 11 Bankruptcy protection in October of last year and plans to close its offices that employed fewer than 20 people in administration and finance. Terms of the purchase were not disclosed. A&M Inc., the group which bought the entire company for $7.5 million in April after Homemaker filed for Chapter 11 bankruptcy protection, holds the remaining 40 percent of the company. INACOM CORP: Files For Bankruptcy, Plans To Cut 6,000 Workers -------------------------------------------------------------- Alpharetta-based InaCom Corp., a computer and telecommunications company, filed for Chapter 11 bankruptcy protection from creditors with $560.7 million in debts, including about $115 million owed to lenders, and said it would lay off most of its work force of up to 6,000 employees. INACOM: MicroAge Offers Rapid Transition Services ------------------------------------------------- In response to the Inacom, Inc. June 16, 2000 announcement stating that they are filing Chapter 11 and ceasing operations, MicroAge Technology Services, a leading infrastructure and e- business services provider, is offering Rapid Transition Services to businesses who may find themselves abruptly without a service provider. MicroAge Technology Services is a provider of technology infrastructure services worldwide. The company delivers a wide- range of professional technology services that help clients profit from technology, including Selective Outsourcing, Professional Services and Technology Deployment. MicroAge supports clients across the United States and provides international services through business partners around the world. INTEGRATED HEALTH: Motion For Extension of Exclusive Periods ------------------------------------------------------------ The Debtors sought and obtained an extension of the period in which they have the exclusive right to file a plan of reorganization through September 29, 2000, and a concomitant extension of their time within which to solicit acceptances of that plan through November 28, 2000. The extensions represents a 120-day extension of the original expiry dates under 11 U.S.C. Sec. 1121(b). The Debtors tell Judge Walrath they are doing a good job of resolving issues through negotiations. They are already in the process of finalizing their long-term business plan and have committed to complete it before the end of July. Specifically the Debtors are negotiating with numerous lessors and other parties on lease assumptions and rejections, mortgage renegotiations and other matters that will have a significant impact on any plan of reorganization. Their primary focus has been the stabilization of their healthcare businesses and vendor/supplier support. The Debtors suggest they have been able to stabilize their operations and solidify relationships despite crisis and operational problems. However, given the size and complexity of their cases, the highly regulated nature of the industry, the depressed state of the long term care segment of that industry and the interplay between bankruptcy law and other federal laws including Medicare law, they simply need an extension. The Debtors cautioned Judge Walrath that, if the Court were to deny their request, any party in interest would be free to propose a plan of reorganization for each of the Debtors. The consequence, the Debtors foresee, would be a morass of litigation over competing plans, leading to delay, increased costs and reduced distributions to creditors while the requested extension will enable the Debtors to resolve conflict in a reasoned and balanced manner. (Integrated Health Bankruptcy News Issue 5; Bankruptcy Creditors' Services Inc.) JUST FOR FEET: Former Shareholders File Suit -------------------------------------------- Former shareholders of bankrupt Birmingham-based shoe retailer Just For Feet filed a suit last week in federal court alleging that the company used $7.5 million in rebates from an advertising agency to improperly inflate revenues after asking the agency to overcharge. The suit which seeks class-action status, argues that Just for Feet told Rogers Advertising of Birmingham to substantially overcharge the company. Rogers then rebated the overcharged amount, or credited the overpayment to Just For Feet's account. Just For Feet then listed the rebates either as revenue or as amounts owed the company by Rogers. MASTER GRAPHICS: Company Names CEO ---------------------------------- Master Graphics Inc. (OTCBB:MAGR) announced that, as a key step in its reorganization process, it has appointed Michael B. Bemis as its Chief Executive Officer. Mr. Bemis, 53, was elected as an independent director and Chairman of the Board in January 2000. As Chief Executive Officer, he will assume responsibility for overseeing the Company's restructuring efforts and will continue to serve as Chairman of the Board. From 1982 to 1999, Mr. Bemis held several positions with Entergy Corporation, a large public utility holding company headquartered in New Orleans, Louisiana, including Chief Executive Officer of London Electricity PLC, President and Chief Operating Officer of Louisiana Power & Light/New Orleans Public Service, and President and Chief Operating Officer of Mississippi Power & Light. Mr. Bemis also was formerly a partner with Deloitte Haskins & Sells, now Deloitte & Touche. Since March 1999, Mr. Bemis has been a business consultant on various matters. MAXICARE HEALTH: Annual Meeting Set For September 14, 2000 ---------------------------------------------------------- The annual meeting of shareholders of Maxicare Health Plans, Inc. will be held at the Sunset Room in the Transamerica Center Windows Restaurant, 1150 South Olive Street, Los Angeles, California, on Thursday, September 14, 2000, at 9:00 a.m. (Pacific Time) for the following purposes: 1. To elect three directors to the Board of Directors who will serve until the company's 2003 Annual Meeting of Shareholders and until their successors have been duly elected and qualified. 2. To approve an amendment to the company's Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 40.0 million to 80.0 million shares. 3. To approve an amendment to the company's Restated Certificate of Incorporation by adding a new section which would prohibit transfer of the company's capital stock, unless approved by the Board, to the extent the transfer would (i) cause the ownership interest of the transferee or any other person to equal 5% or more of the company's fair market value; or (ii) increase the ownership interest of the transferee or any other person where such transferee's or other person's ownership interest equalled 5% or more of the company's fair market value before the transfer. 4. To approve the company's 2000 Stock Option Plan and the authorization of the issuance of up to 4.0 million shares of common stock upon the exercise of stock options thereunder. 5. To transact any other business which properly arises. Shareholders of record at the close of business on August 1, 2000 will be entitled to notice of and to vote at the 2000 Annual Meeting. MONTGOMERY WARD: Motion To Establish Distribution Trust ------------------------------------------------------- The Debtors supply the Court with a copy of the Insurance Policy underwritten by Bankers Standard Fire and Marine Insurance Company, one of the ACE Group of Insurance and Reinsurance Companies. Bankers is rated A+ by Standard & Poors and A2 by Moody's. Representing Reorganized Montgomery Ward, Richard A. Chesley, Esq., of Jones, Day, Reavis & Pogue, stressed to Judge Walsh that: (i) it is the Insurer who will be assuming all of the risks associated with the Disputed Claims and the reserves for those claims; (ii) Class 3 Unsecured Claims would likely wait a considerable period of time for distributions absent the Insurance Policy; and (iii) creditors have the option of whether they want to participate. Current financial data relevant to Class 3 Unsecured Claims, Mr. Chesley related, reveals: $152,500,000 in the MW Class 3 Distribution Pool; $2,126,000,000 of Allowed Class 3 Unsecured Claims; $360,000,000 of Disputed Class 3 Unsecured Claims; Mr. Chesley advised that the next interim distribution is estimated to distribute approximately 1.375% of the face amount on each Allowed Class 3 Unsecured Claim, which will leave $110,000,000 in the MW Class 3 Distribution Pool. The Reorganized Debtors believe that they will save some $4 million in administrative expenses relative to resolving disputed claims and making quarterly distributions until 2004. These costs will be picked-up by the Insurer. Responding to the question of whether the Bankruptcy Court has authority to modify the mechanics of the First Amended Joint Plan, Mr. Chesley argued that it is permissible on three bases: (A) Article XI of the Plan provided that the Bankruptcy Court retains jurisdiction "to ensure that distributions are made to Holders of Allowed Claims, enter such orders as may be necessary or appropriate to implement and consummate the Plan and hear and determine all matters concerning the [MW Class 3 Distribution Pool]"; (B) case law teaches that a post-confirmation transactions that aid in the consummation of a plan are entirely permissible; see, e.g., Findley v. Blinken, 982 F.2d 721, 750 (2d Cir. 1992), modified on reh'g, 993 F.2d 7 (2d Cir. 1993); see also Hills Motors Inc. v. Hawaii Auto Dealers' Ass'n, 997 F.2d 581, 587 n. 11 (9th Cir. 1993); and (C) Rule 3020(d) of the Federal Rules of Bankruptcy Procedure specifically provides that, "Notwithstanding the entry of the order of confirmation, the court may issue any other order necessary to administer the estate." In the absence of any objection before the Court, Judge Walsh Granted the Debtors' Motion in all respects. (Montgomery Ward Bankruptcy News Issue 49; Bankruptcy Creditors' Services Inc.) MOUNTAIN HEIGHTS: Files for Chapter 11 -------------------------------------- According to the Bangor Daily News on June 12, 2000, Mountain Heights Health Care Facility in Patten filed for bankruptcy protection under Chapter 11. The nursing facility is not closing due to the fact of its geographic location. The contributing factors caused the facility to file were cuts in Medicare- Medicaid funding, competition, and residents who need extra care and assistance, which means providing more staff without asking the government for extra pay. The action started in February 1, but was just released in the newspaper recently. NIIGATA ENGINEERING: Posts 38B yen group loss --------------------------------------------- Niigata Engineering Co. recorded a 38.2 billion yen group net loss for the year ended March 31, mainly because of a decline in orders and an extraordinary loss of 35.9 billion yen. The extraordinary loss, mainly the responsibility of the parent, included a loss on sales of inventory assets of 9.3 billion yen and a paper loss on securities investments of 15.4 billion yen. Consequently, the group's net worth fell to a negative 10 billion yen, despite the parent company boosting its shareholder equity by 20 billion yen after land reappraisal, Group sales declined 11 percent and operating profit dived 41 percent to 3.2 billion yen. All types of orders -- for engineering, motor and machine tool orders -- all declined. Interest payments totaling 5 billion yen also contributed to a pretax loss of 2.7 billion yen, compared to a profit of 91 million yen in fiscal 1998. The heavy machinery manufacturer posted a 10.7 billion yen consolidated net loss in fiscal 1998. NUMBER NINE VISUAL: Order Approving Disclosure Statement -------------------------------------------------------- The Bankruptcy Court, District of Massachusetts, Eastern Division, entered an order approving the Disclosure Statement regarding the Amended Joint Plan of Liquidation dated May 31, 2000 proposed by the debtor, Number Nine Visual Technology Corporation, and the Creditors' Committee. July 14, 2000 is the last day for filing written ballots accepting or rejecting the plan. The deadline for filing and serving objections to confirmation of the plan is 4:30 PM on July 14, 2000. The hearing on confirmation of the plan will be held on July 19, 2000 at 1:00 PM before the Honorable Joan N. Feeney, US Bankruptcy Judge, Bankruptcy Courtroom No. 1, Thomas P. O'Neill Jr. Federal Building, 10 Causeway Street, Boston, Massachusetts. The plan is a liquidation plan, and does not contemplate the financial rehabilitation of the debtor or the continuation of its business. Substantially all of the debtor's assets have been sold, and the plan contemplates that the remaining unliquidated assets will be liquidated either by the debtor or by the Plan Trustee. The debtor and the Creditors' Committee anticipate, based on the amount of claims filed to date and the reasonable expectation that certain claims will be disallowed in whole or in part, that the dividend to general unsecured creditors is likely to be in the range of 35 to 45 percent. OMNA MEDICAL: Court Approves Committee Counsel ---------------------------------------------- The US Bankruptcy Court for the District of Delaware entered an order authorizing the Official Committee of Unsecured Creditors to retain and employ Pachulski, Stang, Ziehl, Young & Jones, PC as co-counsel to the Committee. The Court also approved the application of the Official Committee of Unsecured Creditors of OMNA Medical Partners, Inc., et al. authorizing the Committee's employment and retention of Traub, Bonacquist & Fox LLP as its general counsel. PENNCORP FINANCIAL: Entry of Order Confirming Plan -------------------------------------------------- On June 5, 2000, the US Bankruptcy Court for the District of Delaware entered an order confirming the plan of reorganization for PennCorp Financial Group, Inc. under Chapter 11 of the Bankruptcy Code. PETSEC: Agreement To Sell Petsec Energy Inc. -------------------------------------------- Petsec Energy Ltd (ASX:PSA) (OTCBB:PSJEY) announced that its wholly owned USA subsidiary, Petsec Energy Inc., has reached agreement with the unsecured creditors committee to sell Petsec Energy Inc. or all of its assets. The unsecured creditors committee was appointed following the Chapter 11 filing by Petsec Energy Inc. on April 13, 2000. Subject to approval by the Bankruptcy Court presiding over Petsec Energy Inc.'s Chapter 11 proceedings, Houlihan Lokey Howard & Zukin Capital, L.P. will be managing the divestiture process for Petsec Energy Inc. and the unsecured creditors committee. Houlihan Lokey will be distributing an information memorandum describing the assets of Petsec Energy Inc. to potential interested parties. All sale transactions will be subject to the approval of the Bankruptcy Court. Petsec Energy Inc. anticipates filing a Plan of Reorganisation which contemplates an agreed distribution of the sale proceeds to the creditors, the equity owner and certain of Petsec Energy Inc.'s senior management team in the USA. Petsec is an independent oil and gas exploration and production company operating in the shallow waters of the US Gulf of Mexico. The Company's corporate office is in Sydney, Australia. Field operations are managed in the US from Lafayette, Louisiana. All inquiries concerning the divestiture of Petsec Energy Inc.'s assets should be directed to the following professionals at Houlihan Lokey: Andrew B. Miller, Managing Director Matthew R. Niemann, Vice President Brett A. Lowrey, Associate Houlihan Lokey Howard & Zukin Capital, L.P. 310/553-8871 (phone) 310/553-4024 (fax) 1930 Century Park West Los Angeles, CA 90067-6802 SAFETY-KLEEN: Finalizes Initial DIP Financing --------------------------------------------- Safety-Kleen Corp (NYSE: SK) announced it has finalized its initial $40 million of DIP financing, which was approved by the U.S. Bankruptcy Court on June 13, 2000, in the full amount requested by the company. The Bankruptcy Court will consider approval of the full $100 million DIP facility, as previously announced, in July. "This is a very important step toward reorganizing Safety-Kleen," said Safety-Kleen CEO David Thomas, Jr. "We are pleased that the bankruptcy court granted our request for $40 million of interim funding. The availability of these funds will enable us to maintain normal business operations at our facilities." SAFETY-KLEEN: Organizational Meeting To Form Committees ------------------------------------------------------- Ordinarily, the United States Trustee for Region III schedules an organizational meeting for the purpose of forming one or more official committees of the Debtors' creditors within the first 10 to 15 days following the filing of a large-scale chapter 11 case in Delaware. The U.S. Trustee's office advises that no time, date and place for that meeting has been set. Frank Perch, Esq., is the attorney for the U.S. Trustee in charge of Safety-Kleen's chapter 11 cases. Contact the Office of the U.S. Trustee at 215- 597-4411 for additional details. (Safety-Kleen Bankruptcy News Issue 2; Bankruptcy Creditors' Services Inc.) SATO KOGYO CO.: Posts Sixth Straight Group Net Loss --------------------------------------------------- For the sixth consecutive year, general contractor Sato Kogyo Co. has posted a consolidated net loss. For the fiscal year that ended March 31, the company recorded a 15.8 billion yen net loss. The company posted an extraordinary loss of 26.4 billion yen, mainly attributable to disposal of real estate with hidden losses. Group sales declined for the year by 7 percent to 429.1 billion yen. Parent-only sales fell 8 percent, predominantly because of sluggish private sector construction orders. Sato Kogyo's group operating profit increased two percent to 12.3 billion yen. Meanwhile, the company's development work-related operations recorded a 2.8 billion yen operating loss. Construction operations revenue for the company improved thanks to a decline in construction costs and a drop in sales and administrative expenses. SILICON GAMING: Extends Expiration Date of Exchange Offer --------------------------------------------------------- Silicon Gaming, Inc. is extending the expiration date of its exchange offer to 5:00 P.M. New York City time on June 30, 2000. The exchange offer was scheduled to expire at 5:00 P.M. New York City time on June 23, 2000. As of June 12, 2000, the company's exchange agent had received 393 Election Notices representing 7,901,970 shares of common stock participating in the exchange offer. The company is filing with the SEC a Supplement to the Offering Circular dated April 17, 2000. The Supplement is dated June 12, 2000 and it is expected that the Supplement will be distributed to shareholders beginning tomorrow. Shareholders are urged to carefully read and consider the information provided in the Supplement as well as the information provided earlier in the Offering Circular dated April 17, 2000. Shareholders can view the Supplement at the SEC's website at: http:\\www.sec.gov. The company will also provide copies of the Supplement free to shareholders. EquiServe Trust Company, N.A., the company's transfer agent, will continue to act as exchange agent in the exchange offer, and will also act as warrant agent. Georgeson Shareholder Communications Inc. will continue to act as information agent in the exchange offer. Shareholders may contact the information agent at (800) 223-2064, or collect at (212) 440-9800, for information about tendering Election Notices. Silicon Gaming, Inc. designs and manufactures a full line of innovative wagering products, including the Family Feud Wagering Attraction, and an extensive library of game applications including Phantom Belle, Banana-Rama, Eureka, Cash Cruise, TopHat 21 and Hot Reels. The company is headquartered in Palo Alto, California. TEXAS HEALTH ENTERPRISES: Hearing on Disclosure Statement --------------------------------------------------------- The hearing to consider the approval of the Disclosure Statement of Texas Health Enterprises, Inc. shall be held at US Bankruptcy Court, 660 North Central Expressway, Plano, Texas, on July 25, 2000 at 1:30 PM. July 18, 2000 is the last day for filing and serving written objections to the Disclosure Statement. UNITED COMPANIES: Reports Purchase Agreements to SEC ---------------------------------------------------- United Companies Financial Corporation and certain of its subsidiaries report to the SEC that they filed an amended plan of reorganization and a disclosure statement in connection with their chapter 11 cases which are pending in the United States Bankruptcy Court for the District of Delaware in Wilmington. The amended plan of reorganization follows the company's announcement on May 30, 2000 that it had entered into definitive purchase agreements with EMC Mortgage Corporation and EMC Mortgage Acquisition Corp., subsidiaries of The Bear Stearns Companies, Inc., for the sale of substantially all of its whole loan portfolio and REO properties, assets related to its mortgage servicing operations, and its interest only and residual interests. A hearing in the Bankruptcy Court on the disclosure statement is scheduled for July 6, 2000. United Companies is a specialty finance company that services non-traditional consumer loan products. VENCOR: Agrees To Amend DIP Financing ------------------------------------- Vencor, Inc. has agreed with its lenders to amend the company's debtor-in-possession financing to extend the maturity until September 30, 2000. The Amendment also revises certain covenants and permits the company to file its plan of reorganization through July 18, 2000. The company has also entered into a commitment letter with certain of the DIP lenders to finance an amended and restated debtor-in-possession credit agreement in an aggregate principal amount of $90 million. The Restated DIP would become effective in the event the company became involved in a legal proceeding against Ventas, Inc. concerning the transactions in which the company was spun-off from Ventas or the master lease agreements executed in connection with the spin-off. Such a legal proceeding currently would constitute an event of default under the existing DIP Financing. The Restated DIP would have a one-year term beginning on its effective date. The consummation of the Restated DIP is subject to other customary conditions contained in the Commitment Letter. As previously disclosed, the company 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 made substantial progress in its conversations with the Department of Justice regarding a settlement of the ongoing investigations. The company has continued to engage in discussions with Ventas to obtain its support for a consensual plan of reorganization. At this time, only Ventas is in disagreement with the company over the terms of a consensual plan of reorganization. While the filing of a consensual plan of reorganization is the company's preferred outcome, the company believes that it is taking prudent steps in the event a consensual plan of reorganization with Ventas cannot be reached. The DIP Financing and existing cash flows will be used to fund the company's operations during its restructuring. As of June 13, 2000, the company had no outstanding borrowings under the DIP Financing. The United States Bankruptcy Court for the District of Delaware must approve the Amendment and the Commitment Letter. The hearing on this motion is scheduled for June 29, 2000. 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. VENCOR: Extension of Exclusivity -------------------------------- Judge Walrath entertained the Debtors' request, found that the Debtors have shown cause for more time, and granted the Debtors an extension of their exclusive period during which to file a plan of reorganization through July 18, 2000, together with an extension of their exclusive period during which to solicit acceptances of that plan through September 15, 2000. VISTA EYECARE: Taps McDonald Investments ---------------------------------------- Vista Eyecare, Inc. and its affiliates seek court authority to employ and retain as of and including June 1, 2000, McDonald Investments Inc. as investment banker for the debtors. The firm will receive a monthly retainer fee of $50,000 and a cash fee equal to 1.5% of the Transaction Value of any Sale Transaction; McDonald will receive a cash fee equal to 2% of the amount of any senior debt raised or refinanced, 3.5% of the amount of any subordinated debt raised or refinanced, and 7% of the amount of any equity raised. If no Transaction Fee is paid, a Minimum Engagement Fee will be payable to McDonald upon confirmation of a plan, in the amount of $500,000 less the aggregate amount of any monthly retainer fees paid to McDonald. Meetings, Conferences and Seminars ---------------------------------- June 29-July 2, 2000 NORTON INSTITUTES ON BANKRUPTCY LAW Western Mountains Bankruptcy Law Institute Jackson Lake Lodge, Jackson Hole, Wyoming Contact: 1-770-535-7722 July 13-16, 2000 AMERICAN BANKRUPTCY INSTITUTE 7th Annual Northeast Bankruptcy Conference Doubletree Hotel, Newport, Rhode Island Contact: 1-703-739-0800 July 21-24, 2000 National Association of Chapter 13 Trustees Annual Seminar Adams Mark Hotel, St. Louis, Missouri Contact: 1-800-445-8629 or info@nactt.com August 3-5, 2000 ALI-ABA Fundamentals of Bankruptcy Law Seaport Hotel and Conference Center, Boston, Massachusetts Contact: 1-800-CLE-NEWS August 9-12, 2000 AMERICAN BANKRUPTCY INSTITUTE 5th Annual Southeast Bankruptcy Workshop Hyatt Regency, Hilton Head Island, South Carolina Contact: 1-703-739-0800 August 14-15, 2000 TURNAROUND MANAGEMENT ASSOCIATION Advanced Education Workshop Loews Vanderbilt Plaza, Nashville, Tennessee Contact: 1-312-822-9700 or info@turnaround.org August 17-19, 2000 ALI-ABA Banking and Commercial Lending Law -- 2000 Renaissance Stanford Court San Francisco, California Contact: 1-800-CLE-NEWS September 7-8, 2000 ALI-ABA and The American Law Institute Conference on Revised Article 9 of the Uniform Commercial Code Hilton New York Hotel, New York, New York Contact: 1-800-CLE-NEWS September 12-17, 2000 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES Convention Doubletree Resort, Montery, California Contact: 1-803-252-5646 or info@nabt.com September 15-16, 2000 AMERICAN BANKRUPTCY INSTITUTE Views From the Bench 2000 Georgetown University Law Center, Washington, D.C. Contact: 1-703-739-0800 September 21-22, 2000 RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC. 3rd Annual Conference on Corporate Reorganizations The Regal Knickerbocker Hotel, Chicago, Illinois Contact: 1-903-592-5169 or ram@ballistic.com September 21-23, 2000 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Emory University School of Law, Atlanta, Georgia Contact: 1-703-739-0800 September 21-24, 2000 AMERICAN BANKRUPTCY INSTITUTE 8th Annual Southwest Bankruptcy Conference The Four Seasons, Las Vegas, Nevada Contact: 1-703-739-0800 November 2-6, 2000 TURNAROUND MANAGEMENT ASSOCIATION Annual Conference Hyatt Regency, Baltimore, Maryland Contact: 312-822-9700 or info@turnaround.org November 27-28, 2000 RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC. Third Annual Conference on Distressed Investing The Plaza Hotel, New York, New York Contact: 1-903-592-5169 or ram@ballistic.com November 30-December 2, 2000 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800 February 22-24, 2001 ALI-ABA Real Estate Defaults, Workouts, and Reorganizations Wyndham Palace Resort, Orlando (Walt Disney World), Florida Contact: 1-800-CLE-NEWS July 26-28, 2001 ALI-ABA Chapter 11 Business Reorganizations Hotel Loretto, Santa Fe, New Mexico Contact: 1-800-CLE-NEWS The Meetings, Conferences and Seminars column appears in the TCR each Tuesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. Debra Brennan, Yvonne L. Metzler, Edem Alfeche and Ronald Ladia, Editors. Copyright 2000. All rights reserved. ISSN 1520-9474. 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 * * *