/raid1/www/Hosts/bankrupt/TCR_Public/000626.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 26, 2000, Vol. 4, No. 124
Headlines
ACCESSAIR: Installs Its Own Management Team
AUTOINFO INC: Announces Signing of a Merger Agreement
AUTOMATA INTERNATIONAL: Case Summary and 20 Largest Creditors
BAX: Carnes Named New CEO
BRAZOS SPORTSWEAR: Court Approves Disclosure Statements
CERPLEX GROUP: Involuntary Case Summary
CHUGACH ALASKA: To Make Final Bankruptcy Payment
CLOVER CLUB: Stiff Competitions Forces Plant To Close
CONSECO: Directors Elected, Proposal Rejected to Declassify Board
CREDITRUST: Closes on $5 Million DIP Line of Credit With Sunrock
FIRST ALLIANCE MORTGAGE: Seeks Approval of Overbid Procedures
FLOORING AMERICA: Deciding Which Stores To Shutter
FLOORING AMERICA: Firm Announces Class Action Lawsuit
FRUIT OF THE LOOM: Reports $23.2 Million Net Loss For May
GENESIS HEALTH: Case Summary and 20 Largest Unsecured Creditors
GENESIS HEALTH: Eldercare Comments on Bankruptcy
GENESIS HEALTH: Files For Chapter 11 Bankruptcy Protection
HVIDE MARINE: Moody's Assigns B3 To Second Secured Notes
INACOM CORP: Case Summary and 20 Largest Unsecured Creditors
INTEGRATED HEALTH: Applies To Employ KPMG, LLP as Accountants
JOHNS MANVILLE: Group To Buy Out Johns Manville
KYTEL INTERNATIONAL: Involuntary Case Summary
LOEWEN: Exclusivity Extended; OK To Investigate Bankers Trust
MAURICE CORP: Creditors Are Owed $15 Million
MAURICE CORP: Files Chapter 11 Bankruptcy
MEDITRUST COMPANIES: Moody's Revises Outlook To Negative
MULTICARE AMC: Case Summary and 20 Largest Unsecured Creditors
MULTICARE COMPANIES: Seeks Chapter 11 Protection
NEW AMERICAN HEALTHCARE: Court Approves Sale of Crosby Memorial
NEW AMERICAN HEALTHCARE: Court Approves Sale of Medical Center
PLANET HOLLYWOOD: Bay Harbour Management Takes 47.2% Stake
SABRATEK: Taps Ross & Hardies As Special Counsel
SHAPE INC: Case Summary and 20 Largest Unsecured Creditors
SHAPE: Files For Bankruptcy For Second Time In 12 Years
SUN HEALTHCARE: Cout Grants Further Extension of Exclusivity
VERDE MEDIA: Files for Chapter 11 Protection
*********
ACCESSAIR: Installs Its Own Management Team
-------------------------------------------
Des Moines-based airline, AccessAir, which filed for bankruptcy
protection on Nov. 29, 1999, chose to create its own management
team rather than hiring a management company outside. Donald
Armington will serve as the airline's chief administrative
officer while Steven Wilson will be chief operations officer.
Wilson and spokeswoman Julie Evans believe that putting the
certificate in another name would mean that an outside company
could easily close down operations in Iowa and move to another
state to start a new airline with no Iowa service, said Wilson
and Julie Evans, spokeswoman for the company.
"To relinquish AccessAir's certificate would eliminate our
control of services," said businessman John Ruan, who is leading
efforts to save AccessAir. "I will not jeopardize that for which
we have fought so hard."
AUTOINFO INC: Announces Signing of a Merger Agreement
-----------------------------------------------------
AutoInfo, Inc. (OTCBB:AUTO) announced that it has entered into an
agreement to acquire Sunteck Transport, Inc., a full service
third party transportation logistics provider, and its wholly
owned subsidiary, Ubidfreight.com, in exchange, upon closing, for
10 million shares of AutoInfo Common Stock, which will constitute
approximately 37% of the proposed outstanding Common Stock of
reorganized AutoInfo under its Chapter 11 Reorganization Plan.
Sunteck, which was formed in 1997, is a full service third party
transportation logistics provider. Its services include ground
transportation coast to coast, local pick up and delivery,
warehousing, air freight and ocean freight. Sunteck has developed
strategic alliances with Less than Truckload (LTL), truckload,
air, rail and ocean common carriers to service its customers'
needs. Sunteck's personnel have in excess of forty years of
freight industry experience. Harry Wachtel, Sunteck's President
and sole shareholder, will, upon the consummation of the merger,
become Chairman of the Board, CEO and President of AutoInfo.
The consummation of the transaction is contingent upon, among
other things, the approval of the Merger Agreement and AutoInfo's
Disclosure Statement by the United States Bankruptcy Court,
approval of the Disclosure Statement by AutoInfo's unsecured
creditor class, the entry of an order confirming the
Reorganization Plan and the securing of a firm commitment within
120 days for a financing resulting in gross proceeds to AutoInfo
of at least $2.0 million.
The proceeds of the financing are intended for the development
and implementation of Ubidfreight.com, an e-commerce business-to-
business application which will provide an interactive freight
auction matching available freight (shippers) and available cargo
space (truckers and other carriers). The proceeds will be used to
complete site development, fund start-up expenses, commence
marketing and provide for administrative costs. The transition of
Sunteck's existing customer and common carriers relationships as
well as its industry experience and expertise will be a key
elements in the development and success of the Ubidfreight.com
business.
Ubidfreight.com is a start-up business-to-business e-commerce
real time freight auction market place where shippers will offer
their freight for bid directly to carriers/truckers for
transport. This live interactive environment will benefit
shippers and carriers by reducing the cost of handling their
freight through the competitive auction process.
William Wunderlich, President and Chief Financial Officer of
AutoInfo stated, "We are extremely pleased to announce this
transaction. It is the culmination of several months of planning
and finalizing a transaction that, if we are successful at
securing the required financing commitment and other closing
conditions, meets the objectives we established for the
restructuring of AutoInfo."
"We are optimistic that we will receive the approval of the
Bankruptcy Court of our Disclosure Statement which includes the
Sunteck transaction so that we can move expeditiously to the
confirmation of our reorganization plan," Mr. Wunderlich added.
"We will finalize our business plan and begin to seek out
potential investors enabling us to consummate the merger and
begin implementation of the Ubidfreight.com business plan. While
we are excited to have reached this stage of our restructuring,
our ability to satisfy the financing commitment contingency and
consummate this transaction is by no means a certainty. In
addition, if financing is secured, the ability to successfully
develop, implement and bring to market the Ubidfreight.com e-
commerce business application is subject to the inherent business
risks associated with start-up technology ventures."
A hearing to review the Merger Agreement and Company's revised
Disclosure Statement is scheduled to be held before the Honorable
Adlai S. Hardin, Jr., United States Bankruptcy Judge, in Room 520
of the United States Bankruptcy Court, 300 Quarropas Street,
White Plains, New York 10601, at 10:30 AM on June 27, 2000. All
documents on file in this case, Case No. 00-10368, including the
Merger Agreement and the revised Disclosure Statement and Plan of
Reorganization can be viewed on the Bankruptcy Court's InterNet
site as follows: http://ecf.nysb.uscourts.gov/index.html
AUTOMATA INTERNATIONAL: Case Summary and 20 Largest Creditors
-------------------------------------------------------------
Debtor: Automata International, Inc.
1200 Severn Way
Sterling, VA 20166
Petition Date: June 23, 2000 Chapter 11
Court: District of Delaware
Bankruptcy Case No.: 00-02845
Debtor's Counsel: Laura Davis Jones
Bruce Grohsgal
Pachulski, Stang, Ziehl, Young and Jones
919 North Market Street, 16th Floor
PO Box 8705
Wilmington, DE 19899-8705
Tel:(302) 652-4100
Total Assets: $ 50 million above
Total Debts: $ 50 million above
20 Largest Unsecured Creditors
Canterburry Mezzanine
600 Fifth Avenue
23rd Floor Sen Subordinated
New York, NY 10020 Loan $ 8,696,000
Mohamel El Ezaby
c/o Amata Inc.
1200 Severn Way Jr Subordinated
Sterling, VA 20166 Loan $ 1,567,262
ASLS
Allied Signal Laminate
c/o First Union Bank
1525 West Harris Blvd
Charlotte, NC 28262
Tel:(800) 344-9311 Trade Debt $ 1,319,328
MORTO
Morto International
PO Box 905040
Charlotte, NC 28290
Tel:(800) 848-3338 Trade Debt $ 345,739
Everet Charles Tech Trade Debt $ 227,652
Cutting Related Tech Trade Debt $ 215,372
Manufacturers Leasing Trade Debt $ 215,000
Ohmega Technologies Trade Debt $ 209,676
Shipley Ronal Company Trade Debt $ 199,226
Shipley Ronal Company Trade Debt $ 190,754
Dexter Elec Materials Trade Debt $ 150,507
Multi Tech Trade Debt $ 108,432
CA Picard/J&D Mech Trade Debt $ 107,816
Virginia Power, Inc. Trade Debt $ 59,608
Polyclad Laminates Trade Debt $ 58,199
Mth Corporation Trade Debt $ 38,960
Orbotech Trade Debt $ 37,888
Insulectro Trade Debt $ 37,364
Pegasus Air Express Trade Debt $ 35,230
Multiline Technology Trade Debt $ 33,525
BAX: Carnes Named New CEO
-------------------------
According to an article in Traffic World on June 19, 2000,
BAX Global, once again has a new chief executive officer. C.
Robert Campbell left the top spot after almost two years in the
job. He was succeeded in early May by Joseph L. Carnes, a 20-year
industry veteran and 12- year veteran of the Fritz Cos. hired
last September by Campbell to serve as president of North
America.
BAX managed to improve its financial strength under Campbell,
finishing 1999 with a $60 million operating profit. BAX dipped
back into the red in the first quarter of this year, losing
$2.9 million, blamed mostly on higher costs and poor performance
in North America.
According to the article, BAX has been in a re-building phase of
sorts for the last several years, grappling with how to bring its
proprietary technology system into the 21st century. The company
has spent millions of dollars on consultants from such firms as
KPMG and EDS, advising BAX how to improve its unwieldy system.
New software systems are being installed around the company and
the consultant phase of the project is finally winding down, said
Carnes.
BAX is always mentioned as a possible take-over candidate, but
for now Pittston appears to be willing to hang on to the
transportation company and wait for a time when it could get a
better return. "At this time, Pittston believes we have great
opportunity," said Carnes.
BAX, which operates as a heavy weight integrated carrier in the
United States and a freight forwarder abroad, competes head to
head with Emery Worldwide. While Emery has shifted to an all-
guaranteed product offering, BAX has positioned itself as the
more cost-sensitive choice. BAX's average weight per shipment has
increased but yields have fallen.
BAX's domestic network is both the bane and genesis of its
existence. Costs are extremely high to run an airline, especially
one with aging aircraft, but without the airline BAX becomes just
another non-asset-based forwarder. "We can be more aggressive
with international business because we can complete the shipment
in the U.S. It's an added edge to be able to move it
domestically. We can offer the best of both worlds," said Carnes.
BAX has an odd mix of owned and leased aircraft. BAX bought Air
Transport International, a struggling airline which provided its
DC-8 freighter lift in 1998. Kitty Hawk, its 727 freighter
provider, faces even more dire financial problems and filed for
Chapter 11 bankruptcy protection last month. BAX continues to
move its freight on Kitty Hawk aircraft, but has reduced its
reliance on the Dallas-based carrier. Instead, BAX is using its
own DC-8 freighters used in military contracts on the weekends to
fly weekday freight. "Kitty Hawk has given us very good service
and we are going to continue to work with them as long as we
can," said Carnes.
BRAZOS SPORTSWEAR: Court Approves Disclosure Statements
-------------------------------------------------------
By order entered on June 15, 2000, the US Bankruptcy Court for
the District of Delaware approved the adequacy of the information
in the Disclosure Statements of the debtors, Brazos Sportswear,
Inc., et al.
The hearing to consider confirmation of the plan shall commence
on August 3, 2000 at 2:00 PM.
July 21, 2000 at 4:00 PM is fixed as the last date and time for
filing and serving objections to confirmation of the plan.
CERPLEX GROUP: Involuntary Case Summary
--------------------------------------
Alleged Debtor: The Cerplex Group, Inc.
111 Pacifica Avenue, Suite 300
Irvine, CA 92618
Involuntary Petition Date: June 20, 2000
Case Number: 00-02471 Chapter: 11
Court: District of Delaware
Petitioners' Counsel: Bonnie Glantz Fatell
Blank Rome Comisky
& McCauley LLP
1201 Market Street
21st Floor, Suite 2100
Wilmington, DE
Michael S. Fox
Traub, Bonacquist & Fox LLP
655 Third Avenue
21st Floor
New York, NY 10017
Petitioners:
Frank Grippo Debentures $ 10,426,000
EZ Investment
Partnership Debentures $ 1,942,000
JA Glynn & Co. Debentures $ 629,000
Gerald Weber Debentures $ 290,000
John Levin Debentures $ 165,000
J. Kornmann Debentures $ 57,000
CHUGACH ALASKA: To Make Final Bankruptcy Payment
------------------------------------------------
Chugach Alaska Corp. says it will make its final bankruptcy-
reorganization payment to creditors by the end of this month.
Anchorage-based Chugach is one of 13 regional Native corporations
formed under the Alaska Native Claims Settlement Act. It filed
for Chapter 11 bankruptcy protection in 1991.
The company was ran into financial trouble after making some bad
investments in timber and fishing operations. It also was
impacted by the 1989 Exxon Valdez oil spill.
Chugach Alaska turned itself around by expanding into contracting
and support services.
CLOVER CLUB: Stiff Competitions Forces Plant To Close
-----------------------------------------------------
From Kaysville, Utah, the AP reports that Clover Club plant owned
by Granny Goose Foods, is closing most of its doors, putting 125
to 150 people out of work. Scott Michel, assistant vice
president of Development Specialist Inc., the onsite company
facilitating the closure of the plant, said that in the next two
months, the five-acre site will be put up for sale. Workers of
the plant have left over the last few weeks as the liquidation of
the snack-food company Granny Goose Inc. of Oakland, Calif.,
continues.
"I think the market for that business has been slowly sliced away
by Frito-Lay. It's a tough business. The market niche is not
expanding, it is contracting," he said.
CONSECO: Directors Elected, Proposal Rejected to Declassify Board
-----------------------------------------------------------------
Shareholders of Conseco, Inc. (NYSE:CNC) at the company's annual
meeting today re-elected four directors to serve terms ending in
2003:
-- Lawrence M. Coss, 61, a private investor and the founder and
former chief executive officer of Green Tree Financial
Corporation;
-- Thomas M. Hagerty, 37, managing director of Thomas H. Lee
Partners and Thomas H. Lee Company;
-- James D. Massey, 65, the retired former president and deputy
chief executive officer of Merchants National Corp.; and
-- Dennis E. Murray, Sr., 60, partner of the law firm of Murray &
Murray Co., L.P.A.
Each director nominee received the affirmative vote of more than
94 percent of the votes cast. Terms for Conseco's seven other
directors expire in either 2001 or 2002.
Shareholders rejected, by a 60 percent to 40 percent vote, an
advisory proposal submitted by the Employees Pension Plan of the
American Federation of State, County and Municipal Employees,
AFL-CIO which urged repeal of the company's classified board
structure.
Speaking at the meeting, David V. Harkins outlined his six
objectives as the company's interim chairman and chief executive
officer and reported on progress to date:
-- Search for a permanent chief executive officer. "We have been
encouraged by the quality and capabilities of people who have
shown interest in the position and we are optimistic that we will
be able to conclude our search and hire our new chief executive
officer in the third quarter," Harkins said. "The company has
interviewed a number of candidates and has retained one of the
nation's leading executive search firms to assist in the search."
-- Ensure appropriate liquidity and access to the capital
markets. "Since I became interim chairman and CEO on April 28,"
Harkins said, "Conseco has completed a number of financings,
including a $1.8 billion whole-loan sale and lending facility
with Lehman Brothers, $300 million of bank credit facilities,
and three asset-backed securitizations totaling approximately $2
billion. These actions enhanced the near-term liquidity of the
holding company and of Conseco Finance and demonstrated our
ongoing ability to access the capital markets."
-- Sell Conseco Finance. "As potential buyers are completing
their diligence work, we are negotiating to achieve our goal,
which is to execute a definitive agreement in the third quarter
and complete the sale by year-end," Harkins said. "While we are
encouraged by the level of interest in Conseco Finance, we cannot
predict the outcome of negotiations with any potential buyer."
-- Sell other, non-core assets. "We have several very successful
private equity investments," Harkins said. "We've announced plans
to sell our stake in the Lawrenceburg (Ind.) riverboat casino,
and we are reviewing our equity interest in Tritel, a wireless
communications company. We are continuing to evaluate other
opportunities to unlock some of the hidden value on our balance
sheet."
-- Use sale proceeds to restructure the company's balance sheet.
"We have debt maturities later in 2000 which could be satisfied
by the proceeds from a sale of Conseco Finance and of non-core
assets," Harkins said. "We are also working with our lead banks -
- Bank of America and Chase Manhattan -- on the possibility of
modifying the terms of our bank loans. We will continue to
explore all of our options."
-- Return Conseco's strategic focus to its core insurance and
fee-based businesses. "We have spent extensive time and effort,
internally and with external advisors, examining our business
lines and developing an operational plan to emphasize our
insurance businesses," Harkins said. "We have a valuable
franchise, but we must address expense and loss issues in certain
insurance lines to produce an acceptable level of growth and
profitability. I am convinced that we have the talent to be a
leader in the insurance industry."
Headquartered in Carmel, Ind., Conseco is one of middle America's
leading sources for insurance, investment and lending products.
Through its subsidiaries and a nationwide network of
distributors, Conseco helps 13 million customers step up to a
better, more secure future.
CREDITRUST: Closes on $5 Million DIP Line of Credit With Sunrock
----------------------------------------------------------------
Creditrust Corp., which buys, collects and manages delinquent
credit card accounts, petitioned Thursday to reorganize under
Chapter 11 of the federal bankruptcy code in an effort to keep
operations afloat.
The company also announced that it closed on a $5 million
debtor-in-possession line of credit with Sunrock Capital Corp.,
of Philadelphia. The debtor-in-possession financing will act as a
liquidity reserve, allowing Creditrust to continue buying new
delinquent accounts.
Thursday's announcement stems mostly from a recent decision by
Asset Guaranty Insurance Co. to drop Creditrust's servicing
rights in two pools of receivables that represented almost half
the company's accounts.
Creditrust said the sudden loss of almost 50 percent of its
servicing inventory prompted the company to start staff and
facility cutbacks.
By filing Chapter 11, Creditrust is buying itself time with some
of its creditors and can focus on restructuring operations.
Creditrust announced barely more than a month ago that that its
$20 million revolving line of credit with Sunrock was in default
because the company failed to make payments due for April and
May. In a regulatory filing with the Securities and Exchange
Commission last month, Creditrust said that the problems
with Sunrock, along with additional defaults, raised doubts about
its ability to survive.
FIRST ALLIANCE MORTGAGE: Seeks Approval of Overbid Procedures
-------------------------------------------------------------
The debtor, First Alliance Mortgage Co., seeks approval of
certain overbid procedures and break-up fee in connection with
the sale and assignment of the debtor's loan servicing portfolio.
The debtor requests that the court schedule a hearing on the Sale
Motion that is on or prior to July 14, 2000.
The debtor has received an offer to purchase the Loan Servicing
Portfolio for approximately $9.03 million from Ocwen Federal
Bank. Ocwen has made the offer subject to an August 1, 2000
closing date.
Overbids must be in the sum of at least $9.28 million, and upon
the same or improved terms of the current offer. Bidding will be
in increments of not less than $100,000 after the Initial
Overbid. The Letter agreements provide for not more than a
$100,000 Break-up Fee payable to Ocwen in the event that an
Overbidder is the Successful Bidder. The debtor believes that the
Break-up Fee is reasonable, and will not provide a chilling
effect to other bidders.
FLOORING AMERICA: Deciding Which Stores To Shutter
--------------------------------------------------
According to an article in The Orlando Sentinel on June 22, 2000,
Flooring America Inc. won't decide for several weeks whether to
shutter more of its corporate-owned stores in Central Florida, a
spokesman said Wednesday. The flooring retailer closed one store
in Ormond Beach last Thursday, leaving it with eight company-
owned locations in the Orlando area. The store closed the
same day Flooring America filed for reorganization and protection
from creditors under Chapter 11 of the federal bankruptcy code.
Thirty-five stores were closed nationwide. The company said the
filing wouldn't directly affect four locally owned GCO Carpet &
Colortile Outlet stores, which are franchised by Flooring
America.
FLOORING AMERICA: Firm Announces Class Action Lawsuit
-----------------------------------------------------
By order dated February 8, 2000, the United States District Court
for the Northern District of Georgia appointed Kirby McInerney &
Squire LLP as Lead Counsel in the consolidated securities fraud
class actions filed beginning May 1999 on behalf of purchasers of
shares of Flooring America, Inc. (NYSE: FRA), then named the
Maxim Group, Inc. (the "Company") (consolidated case No. 99-CV-
1280).
The consolidated class action complaint, which was filed on April
10, 2000, alleges that the Company and certain of its officers
and directors had committed securities fraud by, inter alia,
improperly reporting artificially inflated revenues and income.
Indeed, as the Company admitted in May, July and October of 1999,
the Company had reported false and misleading financial results
for the fiscal year ended January 31, 1999, and each of the four
quarters therein. The complaint alleges that these results,
admittedly inflated by the company's improper recognition of
revenues from vendor rebate programs, misled investors who
purchased stock in a company whose losses were six times larger
than it originally reported for fiscal 1999. The consolidated
complaint was brought on behalf of all investors who purchased
the Company's common stock between June 2, 1998 and July 13,
1999.
Based upon recent events, Kirby McInerney & Squire will seek to
file an amended consolidated complaint to take into account the
Company's recent disclosure that it continued, via further
improper recognition of revenue, to report false and inflated
earnings not only for all four quarters of 1999 but for the first
two quarters of fiscal 2000 as well. The new complaint will
extend the class period to assert claims on behalf all investors
who purchased Flooring America (or Maxim) common stock between
June 2, 1998 and May 22, 2000, when the Company revealed the
necessity for its most recent restatement of earnings. The
amended consolidated complaint will allege a common, continuous
course of misconduct during the extended class period, and will
assert claims based on that common course of misconduct against
certain present and former officers and directors of the Company
(which, on June 15, 2000, filed for bankruptcy protection).
FRUIT OF THE LOOM: Reports $23.2 Million Net Loss For May
---------------------------------------------------------
Fruit Of The Loom Inc., which filed a voluntary petition under
Chapter 11 of the U.S. Bankruptcy Code on December 29, 1999,
reports a loss of $23,168,000 before taxes in its monthly
operating report for May, filed last week with the U.S.
Bankruptcy Court in Wilmington, Del. The report states that the
financial statements only represent results for the apparel
company's bankrupt units and don't reflect results of the
company's consolidated operations.
GENESIS HEALTH: Case Summary and 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Genesis Health Ventures, Inc.
101 East State Street
Kennett Square, PA 19348
Type of Business: Leading provider of healthcare and support
services to the elderly. Operates impatient facilities in five
regional areas of the US and a national pharmacy and medical
supply business. They also provide rehabilitation therapy and
other related healthcare services.
Petition Date: June 22, 2000 Chapter 11
Court: District of Delaware
Bankruptcy Case No.: 00-02692
Debtor's Counsel: Michael F. Walsh
Gary T. Holtzer
Well, Gotshal & Manges, LLP
767 Fifth Avenue
New York, NY 10153
Tel:(212) 310-8000
Mark D. Collins
Richards, Layton & Finger, P.A.
One Rodne Square
PO Box 551
Wilmington, DE 19899
Tel:(302) 658-6541
Total Assets: $ 2,461,000,000
Total Debts: $ 2,333,000,000
20 Largest Unsecured Creditors
Independence Blue Cross
1901 Market Street
Philadelphia, PA 19103-1480
Joseph Nolan
Tel:(215) 241-2400 Trade Debt $ 11,539,117
Michael & Jessica Bronfein
4 Bella Chase Court
Baltimore, MD 21208 Promissory
Tel:(410) 347-2910 Notes $ 4,148,605
Free State Health Plan, Inc.
100 S. Charles St.
Tower II
Baltimore, MD 21201
Kevin O'Neill
Tel:(410) 528-7092 Trade Debt $ 1,991,625
JSM Company
3061 Island Ave.
Philadelphia, PA 19153
Jim Gibson
Tel:(215) 492-1256 Trade Debt $ 1,300,000
Newton Partners, LP
903 West Brow Rd.
Lookout Mountain, TN 37350
O Stuart Brown Promissory
Tel:(423) 821-2429 Notes $ 1,016,329
O Stuart Brown
903 West Brow Rd.
Lookout Mountain, TN 37350 Promissory
Tel:(423) 821-2429 Notes $ 1,016,016
SCA Hygiene Products
500 Baldwin Tower
Eddystone, PA 19022
John Clement
Tel:(610) 499-3322 Trade Debt $ 1,008,459
Sysco Food Services Inc.
1390 Enclave Parkway
Houston, TX 77077
Charles H. Cotros
Tel:(281) 584-1390 Trade Debt $ 958,123
Mike Glousmand & Ray
Johnson
Baker and Associates
7400 College Blvd.
Suite 205
Overland Park, KS 66210
Tel:(303) 840-7831 Earmouts $ 811,976
Cypress Medical Products
1202 South Rte. 31
McHenry, IL 60050
Billy Salsedo
Tel:(815) 385-0100 Trade Debt $ 594,553
Kendall Healthcare
Products Co.
Dept. 0823
PO Box 120001
Dallas, TX 75312-0823
Chuck Dockenhorff
Tel:(508) 261-8260 Trade Debt $ 536,295
Aetna US Healthcare
Gateway International I
1302 Concourse Drive
Suite 402
Linthieum, MD 21090
Mindy Wagner
Tel:(410) 691-1182 Trade Debt $ 491,557
AT&T
124 Gaither Drive
Suite 130
Mt. Laurel, NJ 08054
Linda Colache
Tel:(856) 273-4716 Trade Debt $ 459,910
Invacare
One Invacare Way
PO Box 4028
Elyria, OH 44036
Thomas R. Miklich
Tel:(440) 329-6111 Trade Debt $ 432,354
Lessig Group
80 Choate Circle
Montoursville, PA 17754
Bill Ott
Tel:(570) 368-4748 Trade Debt $ 430,838
Cigna Healthcare
900 Cottage Grove Road
A-118
Hartford, CT 06152
James G. Stewart
Tel:(215) 761-6053 Trade Debt $ 375,058
Baxter Healthcare Corp.
One Baxter Parkway
Dearfield, IL 60015
Brian P. Anderson
Tel:(847) 948-2891 Trade Debt $ 358,145
Hill Rom
1069 State Route 46 East
Batesville, IN 47006-9167
Bob Pennison
Tel:(800) 445-3730 Trade Debt $ 355,116
Glem & Carolyn McConnelee,
William & Nancy Meert,
Douglas & Vicki Lewis Promissory
13553 Pineridge Court Note and
Yucaipa, CA 92399 Compete
Tel:(909) 686-2273 Obligation $ 301,058
Artromick International Inc.
4800 Hilton Corporate Dr.
Columbus, OH 43265-0300
Jim Bates
Tel:(614) 864-9966 Trade Debt $ 283,983
GENESIS HEALTH: Eldercare Comments on Bankruptcy
------------------------------------------------
ElderTrust (NYSE: ETT), an equity healthcare REIT, announced that
it had begun the process of assessing the impact on ElderTrust of
yesterday's Chapter 11 bankruptcy filings by Genesis Health
Ventures, Inc. (NYSE: GHV), The Multicare Companies, Inc., a
43.6% owned consolidated subsidiary of Genesis, and their
subsidiaries. The Genesis and Multicare bankruptcy filings
follow debt restructuring discussions between those entities and
their senior lenders.
Approximately 70% of ElderTrust's consolidated assets at March
31, 2000 consisted of real estate properties leased to or managed
by subsidiaries of Genesis and loans on real estate properties
made to consolidated and unconsolidated subsidiaries of Genesis
or Multicare. Revenues recorded by ElderTrust in connection with
these leases and loans totaled $4.7 million, or 67% of
ElderTrust's total revenues, for the quarter ended March 31,
2000. In addition, unconsolidated entities of ElderTrust, in
which ElderTrust had investments in and advances to totaling $18
million at March 31, 2000, also lease properties to these
entities and recognized revenues of $3.2 million for the same
period.
Included in ElderTrust's consolidated assets at March 31, 2000
are approximately $20 million in secured loans outstanding to
subsidiaries of Multicare (with a weighted average annual
interest rate of 10.5%), 20% of the principal balance of which is
guaranteed by Multicare. ElderTrust also has approximately $20
million in loans to subsidiaries of Genesis (with a weighted
average annual interest rate of 9.4%), 100% of the principal
amount of which is guaranteed by Genesis.
As previously disclosed, ElderTrust, Genesis and Multicare have
been discussing a proposed restructuring of the loan and other
relationships among the parties. These discussions continue.
However, in light of the Genesis and Multicare bankruptcy
filings, any agreement reached by the parties will be subject to
bankruptcy court approval.
In addition, as a result of the bankruptcy filings, it is not
expected that the Genesis and Multicare subsidiaries that are the
borrowers on the loans will be permitted to make further interest
payments to ElderTrust until the borrowers' bankruptcy plans are
approved. ElderTrust will retain its security position in the
collateral underlying the loans but may be unable to recover the
full amount of its principal. Such recovery is ultimately
dependant upon the value of the underlying collateral and, to the
extent the loan exceeds such collateral value, to the general
unsecured creditors' recovery on their prepetition claims.
Further, although the subsidiaries of Genesis that are the
lessees initially are required to continue to make lease payments
to ElderTrust, in bankruptcy these entities can assume or reject
the leases to which they are parties. If one or more of the
leases are rejected, ElderTrust would be required to find new
lessees for the affected properties or renegotiate the lease
terms with the existing lessees, which could result in
substantially lower rental rates being paid to ElderTrust under
the new or revised leases. If a new lease arrangement is not
immediately obtainable, the Company may be required to operate
the returned property. If this occurs, ElderTrust may have
insufficient cash to operate the property.
D. Lee McCreary, Jr., President and Chief Executive Officer of
ElderTrust, said, "While we were hopeful that Genesis and
Multicare could stave off bankruptcy they were obviously unable
to do so. As these entities may not be permitted to make
interest payments to us during the bankruptcy period, these
filings may significantly reduce our cash flow. As a result, we
expect that distributions to our shareholders will be
significantly reduced or suspended. We believe the distributions
to our shareholders made by us to date during 2000 would be
adequate to satisfy our REIT distribution requirements for 2000."
Mr. McCreary added, "While we believe that we can continue to
make our debt service requirements after giving effect to this
reduction in our cash flow, any further reduction in our cash
flow would adversely affect our ability to do so and could
significantly and adversely affect our ability to continue our
operations."
Because of the increased uncertainty surrounding ElderTrust's
ability to recover on the Genesis and Multicare loan guarantees
referred to above due to the bankruptcy filings by these
entities, Mr. McCreary also said that ElderTrust has begun
assessing the impact of the Genesis and Multicare bankruptcy
filings on the carrying values of ElderTrust's assets. Depending
on various factors, such as the reduction in loan fair market
values resulting from the inability to recover under the Genesis
and Multicare corporate guarantees, such assessment could result
in ElderTrust having to record significant charges in the quarter
ending June 30, 2000 or subsequently to reflect any reduction in
the net realizable value of its assets.
ElderTrust also announced today that it expects to record a
significant and separate impairment charge during the quarter
ending June 30, 2000, relating to its aggregate $12 million
investment in ET Capital Corp at March 31, 2000.
Finally, ElderTrust announced that events of default have been
declared under two mortgage loans totaling approximately $20
million as it does not meet certain financial covenant
requirements under guarantee agreements relating to the
underlying mortgages. The anticipated impairment charge on
ElderTrust's investment in ET Capital and any additional charges
recorded as to loans and leases to Genesis and Multicare and
related entities, when recorded, is expected to cause ElderTrust
to violate net worth covenants under the two mortgage loans
referred to above and under its Bank Credit Facility with a
current balance outstanding of $39.3 million.
ElderTrust is a real estate investment trust that invests in real
estate properties used in the healthcare services industry,
principally along the East Coast of the United States. Since
commencing operations in January 1998, the Company has acquired
direct and indirect interests in 31 buildings and has loans
outstanding of $49 million in construction and term financing on
eight additional healthcare facilities.
GENESIS HEALTH: Files For Chapter 11 Bankruptcy Protection
----------------------------------------------------------
Genesis Health Ventures (NYSE:GHV) filed voluntary petitions with
the U.S. Bankruptcy Court in Delaware to reorganize its capital
structure under Chapter 11 of the U.S. Bankruptcy Code.
The company elected to seek court protection in order to
facilitate efforts to restructure capital obligations in the wake
of drastic, unanticipated cuts in Federal payment systems that
reimburse the company for skilled nursing care and ancillary
services.
To ensure that the company has the short-term working capital
necessary to provide care and services to its customers, Genesis
obtained a commitment for up to $250 million in debtor in
possession ("DIP") financing with a lender group led by Mellon
Bank. Genesis has requested the Court's permission to access the
DIP financing to fund normal business operations and other cash
needs during the Chapter 11 case.
"Deep cuts in Medicare reimbursements, which far exceeded all
government forecasts coupled with chronic underfunding of
Medicaid reimbursements, have severely impacted Genesis' ability
to service our current capital structure," said chairman and
chief executive officer, Michael R. Walker. "Chapter 11
protection ensures that employees can focus their attention on
serving our customers while we restructure."
Due to debt repayment obligations, the company has been in
negotiations with its senior bank debt holders since March 21.
The company believes that Court protection afforded by Chapter 11
will enable it to develop a plan of reorganization with the goal
of emerging from the case in a healthier financial position.
Genesis also announced today that it is making arrangements to
have its stock traded as an over-the counter (OTC) equity
security on the OTC bulletin board (OTCBB) and anticipates
trading under the ticker symbol GHVIQ.
In a separate action, The Multicare Companies, Inc. also filed
for Chapter 11 protection in Delaware this morning. Multicare-a
corporation principally owned by Genesis (43.6%)-owns and manages
skilled nursing and assisted living facilities. Multicare's 141
owned and managed facilities are operated by Genesis ElderCare.
Customers, vendors and investors with questions about the filings
can get more information on the Genesis web site at www.ghv.com
or by calling 1-888-295-8621.
Genesis Health Ventures (NYSE:GHV) provides eldercare in the
eastern U.S. through a network of 311 Genesis ElderCare skilled
nursing and assisted living centers plus long term care support
services nationwide including pharmacy, medical equipment and
supplies, rehabilitation, group purchasing, consulting and
facility management.
HVIDE MARINE: Moody's Assigns B3 To Second Secured Notes
--------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Hvide Marine's
$95 million par value of 12.5% secured second lien notes due 2007
that were issued in exchange for predecessor company bank loans.
The notes were issued at a 10% discount, providing $85.5 million
of net proceeds, of which $11.9 million was used to fund the
first year's coupon payments in escrow and $73.6 million was
exchanged for existing loans. Unrated are Hvide's $200 million
three tranche amortizing senior secured bank term loan and $25
million senior secured revolver. The term loans include $75
million maturing in five years, $30 million in six years, and $95
million in seven years. The revolver matures December 2004. The
senior implied rating is B3, the senior unsecured issuer rating
is Caa1, and the outlook is stable.
Though the oilfield vessel support sector is in the very early
phase of up-cycle recovery, the ratings are restrained by weak
interest coverage, very high leverage, insufficient cash flow to
cover both debt service and maintenance capex until the oil
service vessel sector moves further into up-cycle recovery, the
notes' subordination to secured bank debt, by a total collateral
package in which 54% of the vessels are based in foreign waters,
and by Hvide's need to reestablish important Gulf of Mexico
customer relationships weakened during its financial
difficulties. The B3 note rating recognizes the dilution risk of
foreclosing on 128 vessels operating in foreign jurisdictions as
well as the mortgages' subordination to maritime liens.
Still, strong oil and gas prices, the recovery in exploration and
production companies' cash flows and their growing year 2000 and
2001 spending plans, and the slow but ongoing recovery in the
offshore oil service sector bode well for continuing quarterly
improvement in Hvide's cash flows. And, while Hvide operates an
above average age fleet, it should generate rising cash flows
during the up-cycle. Nevertheless, longer-term, Hvide's upside
may be restrained by the age of its fleet, relative lack of
deepwater coverage, and near term marketing challenges in the
wake of its bankruptcy. The arrival of Hvide's new CEO, an
individual with many years of deep involvement in the marine
segment of the oil and gas business while with a major oil
company appears to be assisting Hvide's effort to reestablish
important client relationships hurt when Hvide encountered
financial difficulty and to establish new relationships.
Weak interest coverage may persist through 2000, though
sequential quarterly improvement may begin in the third and
fourth quarters of the year. To date, since emerging from
bankruptcy December 15, 1999, the pace of accretion of interest
has roughly matched the pace of cash flow improvement. On May 31,
2000, debt totaled $600 million (or $374 million excluding $226
million of secured non-recourse MARAD Title XI debt at 75.8%
owned Lightship Tankers), net worth was $153 million, and EBITDA
for the first five months of 2000 was $25.2 million ($17.5
million excluding Lightship Tankers).
Hvide operated under the protection of Chapter 11 bankruptcy and
reorganization proceedings from September 9, 1999 to December 15,
1999. The $95 million of notes and $225 of bank facilities
represent exit financing connected with Hvide's emergence from
bankruptcy. Upon exiting Chapter 11, Hvide's then existing $252
million of senior secured bank loans were repaid with the present
$320 million package of debt securities and bank facilities.
Under the terms of Hvide's recently amended bank loan agreement,
Hvide is required to reduce bank debt by at least $60 million by
12/31/2000 through asset sales. The $95 million in new notes also
received warrants for common shares at an exercise price of $0.01
per share. The $300 million of pre-bankruptcy senior unsecured
notes were converted into 9,800,000 common shares representing a
98% interest in Hvide. The $115 million of trust convertible
preferred shares received 200,000 common shares (2% of the
common) and warrants to purchase 125,000 shares at $38.49/share.
Common shareholders received 125,000 warrants to purchase common
shares.
The B3 rating on the notes is supported by second mortgages on
243 vessels having a reported appraised fair market value of $517
million as of 2/14/2000, versus $225 million of first mortgage
debt and the $95 million of second mortgage debt. However, the B3
rating is also restrained by the nature of the collateral, which,
though diversified across many vessels and vessel categories,
includes 128 vessels operating in numerous foreign jurisdictions
and whose seizure by noteholders is subject to relocation costs
and maritime liens and law.
The $225 million of bank loans are secured by first mortgages on
238 vessels having an appraised fair market value of $473 million
and second mortgages on 5 vessels having an appraised fair market
value approximating $44 million. The bank loans also benefit from
a covenant requiring appraised fair market collateral value
coverage of 2.0x outstanding bank loans. The bank loans appear to
have sufficient collateral coverage to absorb risks of material
value shrinkage.
In liquidation, the breakeven dilution on the collateral package
appears to be in the range of 40%, ignoring compound interest.
Beyond 40% dilution, the rated notes may be impaired. While
Moody's would anticipate collateral dilution would occur during
distress, Moody's also believes collateral values would
strengthen as the oil service sector strengthens.
Moody's expects Hvide to show slow 2000 cash flow improvement due
to ongoing marketing challenges and the lagged response of the
service sector to firmer oil and gas prices, a probable overhang
of about 150 newbuild vessels destined for the oil service sector
worldwide by year-end 2000, and Hvide's challenges of winning
back its old line customers in the Gulf of Mexico. Fundamentals
in Hvide's marine transport business appear to continue to
improve following the Erika disaster, a vessel operated by
another carrier. Demand for Hvide's double hulled Lightship
Tankers may strengthen as the shipping market refocuses on the
risk of single hulled tankers like the Erika and seeks double-
hulled tankers that are in relatively scarce supply.
Within each region of Hvide's operation, a high degree of sector
vessel utilization will need to be attained before the sector
regains strong pricing power. The rating also gains a degree of
support from niche diversifications in Hvide's sea-going tug and
harbor towing sectors and the chemical and petroleum product
tanker sector.
After $25.2 million of total EBITDA ($17.5 million excluding
Lightship Tankers) in the first five months of 2000, Moody's
estimates $35 to $45 million of EBITDA in the last seven months
of 2000. EBITDA in 2000 contends with a lagged sector recovery
and a number of new-build vessels entering the market. While many
of the sector's newbuild vessels will be delivered into new
contracts, and some will replace an aging sector fleet, many will
also provide vessel-on-vessel competition for available business.
Debt now totals $600 million, including the bank debt, the B3
notes, $33.6 million of secured Hvide Title XI bonds, $32.6
million of secured capitalized leases, and the $226 million of
secured non-recourse Title XI debt at 75.8% owned Lightship
Tankers. The capitalized leases and Hvide Maritime Administration
Title XI debt are separately secured by specific vessels.
Lightship Tankers built and owns five 45,300 dead weight ton
double-hulled petroleum product and specialty chemicals tankers.
Hvide noteholders are insulated from a default in that subsidiary
but are also structurally and legally subordinated to Lightship's
secured non-recourse notes' prior claim on the five vessels and
their earnings.
Hvide suffered from the cumulative cash flow, leverage, and
liquidity affect of an aggressive leveraged acquisition program
in the offshore energy support sector in the months preceding and
following the 4Q1997 oil price peak, a leveraged expansion of its
chemical and petroleum products fleet, and a high risk
deleveraging strategy that depended on sustained strength in
sector equity markets. This was followed by the sustained oil
price collapse of 4Q97 to 1Q99. The price collapse triggered a
sustained sector equity market collapse, stranding Hvide's
deleveraging strategy, and major declines in cash flow needed for
debt service and to attract capital. Hvide's inability to issue
common equity in 1Q98 after the first phase of equity weakness is
pivotal to the firm's bankruptcy and severely curtailed worldwide
offshore exploration and production spending by the upstream
sector generated a severe liquidity squeeze.
Hvide Marine Incorporated is headquartered in Ft. Lauderdale,
Florida.
INACOM CORP: Case Summary and 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Inacom Corp.
100 Lindenwood Drive
Malvern, PA 19355
Type of Business: Single source provider of information
technology services and products designed to enhance the
productivity of information sytems, primarily for Fortune 100
clients. Offers technology planning, procurement, integration,
support and management.
Petition Date: June 16, 2000 Chapter 11
Court: District of Delaware
Bankrutpcy Case No.: 00-02426
Judge: Peter J. Walsh
Debtor's Counsel: Mark D. Collins
Daniel J. DeFranceschi
Paul N. Heath
Richards, Layton & Finger, P.A.
One Rodne Square
PO Box 551
Wilmington, DE 19899
Tel:(302) 658-6541
Myron Trepper
Paul V. Shalhoub
Willkie, Farr & Gallagher
787 Seventh Avenue
New York, NY 10019
Tel:(212) 728-8000
Total Assets: $ 956,560,000
Total Debts: $ 560,693,000
20 Largest Unsecured Creditors
Hewlett Packard
331 E. Evelyn Avenue
Mountainview, CA 94041 $ 28,030,047
Lucent Technologies
PO Box 93000
Chicago, IL 60673 $ 16,258,726
William Fairfield
206 Fairacres Road
Omaha, NE 68132 $ 9,000,000
Toshiba Inc.
Michael Woods
PO Box 19724
Irvine, CA 92713-9724 $ 2,378,569
Primus Electronics Corp.
18424 South I-55
West Frontage Road
Joliet, IL 60435 $ 2,099,000
Scient Corporation
Accounts Receivables
1 Front Street, 28th Fl
San Francisco, CA 94111 $ 1,920,870
System One Technical Inc.
PO Box 198583
Atlanta, GA 30384-8583 $ 1,088,931
David Guenphner
3870 South 176th Avenue
Omaha, NE 68130 $ 1,000,000
MCI Telecommunications
PO Box 70928
Chicago, IL 60673-0928 $ 689,909
Oracle
PO Box 44471
San Francisco, CA 94144-4471 $ 538,141
Zapme Corporation
PO Box 105063
Atlanta, GA 30348 $ 537,000
Progress West
10180 L Street
Omaha, NE 68127 $ 463,493
KPMG, LLP
Dept. 0953
PO Box 120001
Dallas, TX 75312-0953 $ 462,083
Southwest Computer Solutions
2122 West Lone Cactus Drive
Phoenix, AZ 85027 $ 415,532
Dewolff, Boberg & Assoc., Inc.
PO Box 65648
Charlotte, NC 28265-0648 $ 392,000
Redapt Systems & Peripherals
14756 NE 95th Street
Redmond, VA 98052 $ 376,195
Novient's
3525 Piedmont Road
Seven Piedmont Center, Suite 620
Atlanta, GA 30305 $ 349,875
Motorola
30800 Telegraph Road, Suite 1850
Bingham Farms, MN 48025 $ 300,276
AT&T
PO Box 13694
Newark, NJ 07188-0694 $ 286,794
Micromuse Incorporated
139 Townsend Street
San Francisco, CA 94107 $ 278,300
INTEGRATED HEALTH: Applies To Employ KPMG, LLP as Accountants
-------------------------------------------------------------
The Debtors sought and obtained Court authority to employ KPMG
LLP, as their restructuring consultants, auditors and accountants
in the course of their chapter 11 proceedings, pursuant to 11
U.S.C. Sec. 327(a).
Pursuant to the terms of an engagement letter dated January 31,
2000, KPMG will provide Integrated with Consulting Services,
including:
(A) assistance in analyzing the business and financial
condition and reorganization alternatives available to the
Debtors;
(B) advise and assistance with the Debtors in negotiations
with, and attendance at, meetings with bank lenders, creditors
and the official creditors' and equity committees;
(C) assistance in reviewing business plans and the
performance of other necessary services, special projects or
reports relative to potential reorganization scenarios;
(D) assistance in the preparation of their disclosure
statement and plan of reorganization, including the rendering of
such advisory services as may be required therewith;
(E) assistance in the preparation of requisite documents
necessary for confirmation of these chapter 11 cases, including
financial information contained in the disclosure statement;
(F) provide litigation consulting services and expert
witness testimony if requested by the Debtors;
(G) perform other such functions as requested by the
Debtors or their counsel to assist the Debtors in their
businesses and reorganization and assistance in claims resolution
procedures;
(H) provide advice and assistance to the Debtors from time
to time which shall be in such form as the Debtors and KPMG shall
mutually agree and may include written reports of opinions and
oral testimony, not otherwise limited by standards promulgated by
the American Institute of Certified Public Accountants or other
similar governing organizations;
(I) provide advise on and critique the Debtors' financial
projections and assumptions in connection with the filing of the
Debtors' financial statements and disclosure documents required
by the Securities and Exchange Commission, the Bankruptcy Court
or other similar authorities; and
(J) provide advise and assistance on the tax consequences
of any proposed plans of reorganization, and in the preparation
of any Internal Revenue Service ruling requests regarding the
future tax consequences of alternative reorganization structures.
KPMG will provide auditing and accounting services, including:
(1) audit examinations of the financial statements of the
Debtors as may be required from time to time and assistance in
the preparation and filing of the Debtors' financial statements
and disclosure documents required by the Securities and Exchange
Commission;
(2) assistance in the preparation and review of all reports
or filings as required by the Bankruptcy Court or the Office of
the United States Trustee including any monthly operating
reports; and
(3) analysis and advice regarding the preparation of
financial information for distribution to creditors and other
parties-in-interest, including cash receipts and disbursements
analyses, legal entity financial statements, analysis of various
asset and liability accounts, and analysis of proposed
transactions for which Bankruptcy Court approval is sought.
Additionally, KPMG will provide tax advisory services, including:
(a) review of and assistance in the preparation and filing
of any tax returns;
(b) advise and assistance to the Debtors regarding tax
planning issues, including assistance in estimating net operating
loss carryforwards, taxes, state and local taxes;
(c) any assistance required regarding existing and future
IRS, state and/or local tax examinations; and
(d) any and all other tax advise and assistance as may be
requested from time to time.
KPMG will bill for its service at its customary hourly rates:
Partners & Managing Directors $295 to $600
Senior Managers & Managers $195 to $425
Senior & Staff Consultants $90 to $225
Paraprofessionals $85 to $105
Stephen B. Darr, a KPMG Member based in Baltimore, Maryland,
reminds the Court that KPGM is a Big Five accounting firm.
Accordingly, KPMG has numerous connections with other parties-in-
interest in these chapter 11 cases on every side of the table.
Mr. Darr is confident that none of those relationships impair
KPMG's disinterestness within the meaning of 11 U.S.C. Sec.
101(14). Importantly, Mr. Darr stresses, the Debtors' employment
of KPMG is necessary and in the best interests of the Debtors and
their estates. Mr. Darr discloses that KPMG received a $650,000
retainer from Integrated in contemplation of these chapter 11
cases, approximately $170,000 of which was unearned at the
Petition Date. (Integrated Health Bankruptcy News Issue 5;
Bankruptcy Creditors' Services Inc.)
JOHNS MANVILLE: Group To Buy Out Johns Manville
-----------------------------------------------
Building-product manufacturer Johns Manville Corp. has agreed to
a $2.4 billion buyout offer from an investment group.
Under the deal announced Friday, the investment group led by
affiliates of Hicks, Muse, Tate & Furst Inc. and Bear Stearns
Merchant Banking would pay $15.625 in cash and securities for
each of Manville's 155 million shares.
That represents a premium of 27 percent over Manville's closing
price Thursday of $12.3125 a share on the New York Stock
Exchange.
The buyers are also assuming liabilities and expenses that would
boost the total value of the deal to about $3 billion. The deal
is expected to close before the end of the year pending
regulatory, financing and shareholder approval.
The Manville Personal Injury Settlement Trust, created to finance
settlement of litigation over the company's asbestos products,
would retain a stake in the new company, as would management
including chairman and chief executive Jerry Henry. Although the
company filed for Chapter 11 protection in 1982, Manville sales
reached $2.2 billion last year, up from $1.5 billion in 1996.
The settlement trust, which holds about 76 percent of Johns
Manville common stock, has agreed to support the merger subject
to certain conditions. Following the merger, the trust would hold
about 8.5 percent of the company's common stock. Johns Manville
has also agreed to pay the trust $90 million to settle the
company's obligation for future income taxes of the trust.
Robert A. Falise, chairman and managing trustee of the settlemnet
trust, said the deal is a "major additional step in further
diversifying and monetizing the Trust's assets."
Johns Manville employs about 9,700 worldwide.
KYTEL INTERNATIONAL: Involuntary Case Summary
---------------------------------------------
Alleged Debtor: Kytel International Group, Inc. 15
Maiden Lane, 4th Floor
New York, NY 10038
Involuntary Petition Date: June 20, 2000
Case Number: 00-02472 Chapter: 11
Court: District of Delaware
Petitioners' Counsel: David S. Roaner
Kasowitz, Benson, Torres
& Friedman, LLP
1301 Avenue of the Americas
New York, NY 10019
Tel:(212) 506-1700
Mark Minuti
Saul, Ewing, Remick & Saul LLP
222 Delaware, Avenue, Ste. 1200
PO Box 1266
Wilmington, DE 19899
Tel:(302) 421-6840
Petitioners:
Synergetex, Inc. Telecom Services $ 7,653,401
LOEWEN: Exclusivity Extended; OK To Investigate Bankers Trust
-------------------------------------------------------------
Loewen Group International Inc. obtained a six-month extension of
its exclusive periods to file a chapter 11 bankruptcy plan of
reorganization. The cemetery and funeral home operator also
received permission from U.S. Bankruptcy Judge Peter J. Walsh to
investigate Bankers Trust Co. in connection with the bank's role
as collateral agent for around $1.1 billion of Loewen's pre-
petition secured debt that actually might not be secured.
MAURICE CORP: Creditors Are Owed $15 Million
--------------------------------------------
-According to an article in the Worcester TELEGRAM & GAZETTE on
June 22, 2000, the parent company of retailer Maurice the Pants
Man, which was founded in Worcester more than 70 years ago, filed
for Chapter 11 bankruptcy protection yesterday in federal court
in Boston.
All 50 Maurice the Pants Man and Poore Simon's stores in
Massachusetts and six surrounding states will be liquidated and
closed by corporate parent Maurice Corp., said Richard E.
Michaels of Boston, the company's lawyer.
The company owes its creditors, including such clothing
manufacturers as Nike, Addidas and Levi Strauss, $15 million, Mr.
Michaels said. He was quoted in the article as saying, "I think
it was the general retail malaise." Over the next six to
eight weeks the stores will be liquidated as we try to maximize
their assets to pay back the creditors."
Maurice the Pants Man locations in Worcester, Sturbridge, Milford
and Quincy will be closed. The nearest Poore Simon's store, in
the Searstown Mall in Leominster, also will close. Earlier this
year, the clothing chain closed its Fitchburg location in a
refurbished Prichard Plaza on Main Street.
At one time, the company also had stores in Framingham, Marlboro,
Saugus and Burlington, but those were closed in recent years.
The bankruptcy filing comes just a few years after the company
announced plans to expand.
In 1994, the chain went to venture capital firms Bessemer Venture
Partners of Boston, Advent International Corp. of Boston and
Marquette Venture Partners of Chicago to raise an undisclosed sum
to open eight to 10 new stores.
The company also brought in two executives with years of retail
management expertise to guide the expansion. But the expansion
never reached the levels anticipated.
MAURICE CORP: Files Chapter 11 Bankruptcy
-----------------------------------------
The Maurice Corporation, owner of Maurice "The Pants Man" has,
after a long struggle in a challenging retail marketplace, filed
for Chapter 11 bankruptcy. The New Hampshire-based retailer of
casual clothing for men and women had a total of 50 stores at the
time of the filing.
The Maurice Corporation was formed in 1994 when a management team
and a group of private equity investors acquired the Maurice "The
Pants Man" chain. In 1996, that group purchased the Artisan
Apparel group, which at that time owned 27 stores under the Poore
Simon's name. Combined, the corporation operated 47 stores under
the two names located throughout Maine, New Hampshire, Vermont
and Massachusetts. In addition, the company operated 9 stores in
Connecticut, Rhode Island, New York and Pennsylvania for a total
of 56. The Maurice Corporation has focused on serving small
communities where there is minimal competition for selling
popular apparel brands.
The company suffered a series of setbacks in 1999 that negatively
impacted sales and profits. Due to the decline of certain name
brands of jeans and pants, the Maurice stores lost a significant
portion of its young customer base. That year, the company began
reducing its dependency on major brands and accelerating its
private label merchandise, while still offering mainly jeans and
casual pants.
Subject to court approval, the remaining merchandise will be sold
through a liquidator at all store locations. Several parties are
interested in purchasing certain stores and negotiations are
ongoing. This could result in certain stores remaining open under
the Maurice name. The debtor is represented by a team of
attorneys at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.,
headed by Richard E. Mikels.
MEDITRUST COMPANIES: Moody's Revises Outlook To Negative
--------------------------------------------------------
Moody's Investors Service has lowered its senior unsecured debt
ratings of Meditrust Corporation to B1, from Ba2, and the
preferred stock ratings to "b3", from "b1". At the same time,
Moody's lowered the senior unsecured debt ratings of La Quinta
Inns, Inc. to B1, from Ba2. These rating actions reflect
increased uncertainty regarding Meditrust's timely execution of
its restructuring plan, particularly with regards to its
healthcare asset disposition program, and the emerging financial
and strategic profile of Meditrust as a lodging paired-shared
REIT. Moody's also lowered the ratings on two convertible note
issues of Meditrust Corporation, and a senior unsecured issue of
Meditrust Exercisable Put Options Securities Trust, to B2, from
Ba2. The additional downward rating notch for these issues
reflect their structural subordination within the company's
capital structure as a result of not having pari passu rights of
pledged mortgages, equity interest and intercompany debt which
was extended to the company's credit facility and other senior
unsecured notes. Moody's rating outlook is negative, reflecting
the uncertainty of a timely and successful execution of the
restructuring plan. These actions conclude our ratings review.
According to Moody's, a key component to Meditrust's announced
five-point restructuring plan is the disposition of most of its
healthcare assets, and resulting reduction in debt from sales
proceeds. With a protracted difficult healthcare environment, the
pace of asset disposition has slowed substantially since the
beginning of 2000 when the sale of the medical office building
portfolio and management company was announced, and will likely
take more time than Moody's originally anticipated. In addition,
23% of Meditrust healthcare assets are leased or mortgaged to
bankrupt healthcare operators which continue to pay rent but not
debt service. The future of the lease payments is uncertain and
Moody's believes will negatively impact the disposition strategy.
Furthermore, though Meditrust has the capacity to meet its 2000
debt maturities, the company still faces a major refinancing
challenge in 2001, with approximately 50% of its debt coming due
including an $850 million bank credit facility and a $500 million
term loan. Refinancing of the bank line and term loan is likely,
and may result in stricter terms and higher pricing.
Moody's also notes that the REIT's decision to become a more
focused lodging company is a positive factor, and is supported by
the recent hiring of senior management with lodging expertise.
Meditrust has a good position in lodging with its ownership of
the assets and flag of La Quinta hotels. However, the limited
service-lodging sector continues to soften, and Meditrust has
significant exposure to markets susceptible to overbuilding,
specifically Texas. Operating results of its lodging portfolio
have been weak, with negative trending RevPAR growth. A property
portfolio that is almost entirely unencumbered, and a lack of
substantial capital expenditure requirements, provide Meditrust's
financial flexibility at this important strategic juncture.
However, the REIT has substantial floating-rate debt, although
the use of interest rate swaps help reduce this exposure.
The following ratings were downgraded:
Meditrust Corporation - senior unsecured debt rating to B1, from
Ba2; senior unsecured debt shelf to (P)B1, from (P)Ba2;
cumulative preferred stock to "b3", from "b1"; cumulative
preferred stock shelf to (P)"b3", from (P)"b1"; and noncumulative
and junior preferred stock shelf to (P)"caa", from (P)"b2".
Meditrust Exercisable Put Options Securities Trust - $150
million, 7.114% exercisable put options, due 2004 - to B2, from
Ba2.
Meditrust Corporation - $7.1 million, 9% senior convertible, due
2002 - to B2, from Ba2.
Meditrust Corporation - $88.6 million, 7.5% senior convertible,
due 2001 - to B2, from Ba2.
Meditrust Corporation [NYSE: MT], headquartered in Dallas, Texas,
USA, is a self-administered, paired-shared Real Estate Investment
Trust (REIT). As of March 31, 2000, the REIT reported $2.1
billion of gross investments in healthcare facilities and $2.7
billion of gross investments in lodging facilities.
MULTICARE AMC: Case Summary and 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Multicare AMC, Inc.
101 East State Street
Kennett Square, PA 19348
Petition Date: June 22, 2000 Chapter 11
Court: District of Delaware
Bankruptcy Case No.: 00-02494
Debtor's Counsel: James L. Patton
Young, Conaway, Stargatt & Taylor, LLP
11th Floor, Rodney Square North
P.O. Box 391
Wilmington, DE 19899
Tel:(302) 571-6684
Myron Trepper
Mare Abrams
Wilkie, Farr & Gallagher
787 Seventh Avenue
New York, NY 10019
Tel:(212) 728-8000
20 Largest Unsecured Creditors
Independence Blue Cross
1901 Market Street
Philadelphia, PA 19103-1480
Joseph Nolan
Tel:(215) 241-2400 Trade Debt $ 5,410,076
Travelers Property Casualty
The Travelers Indemnity Co.
One Tower Square
Hartford, CT 06183
Bill Hammon
Tel:(860) 271-0111 Trade Debt $ 2,904,973
Simpson, Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017-3954
Christopher Conroy
Tel:(212) 455-2000 Trade Debt $ 560,000
Zurich-American Insurance
Group
1400 American Lane
Schaumberg, IL 60196-1056
Lee Ann Rutz
Tel:(847) 240-8000 Trade Debt $ 469,563
Baraboo/SYSCO Foods
910 S. Blvd.
Baraboo, WI 53913-2793
Gene Bohlmeyer
Tel:(608) 356-8711 Trade Debt $ 447,651
CGU Insurance
F/K/A General Accident
Insurance Company
436 Walnut Street
Philadelphia, PA
Lee Chien Trade Debt $ 427,330
Cleary, Gotlieb, Steen
& Hamilton
One Liberty Plaza
New York, NY 10006
Adrian Boan
Tel:(212) 225-2000 Trade Debt $ 400,000
Liberty Muntal
Insurance Co. Trade Debt $ 201,992
Cigna Trade Debt $ 145,853
Borough of Fair
Lawn Tax Taxes $ 80,928
Advanced Laundry Service Trade Debt $ 77,295
Purity Services Trade Debt $ 76,940
Americane Health
Services Inc. Trade Debt $ 76,558
State of Rhode Island Taxes $ 64,595
Briggs Corporation Trade Debt $ 60,941
Network Services Co. Trade Debt $ 59,202
WW Grainger Inc. Trade Debt $ 45,408
Janine Boudreau
Health Care Trade Debt $ 37,221
Elite Health Care Trade Debt $ 37,155
Ocean State Nursing Trade Debt $ 31,919
MULTICARE COMPANIES: Seeks Chapter 11 Protection
------------------------------------------------
The Multicare Companies, Inc. and certain affiliates today filed
voluntary petitions with the U.S. Bankruptcy Court in Delaware to
reorganize its capital structure under Chapter 11 of the U.S.
Bankruptcy Code.
The company elected to seek court protection in order to
facilitate efforts to restructure capital obligations in the wake
of drastic, unanticipated cuts in Federal payment systems that
reimburse the company for skilled nursing care and ancillary
services.
To ensure that the company has the short-term working capital
necessary to provide care and services to residing customers,
Multicare obtained a commitment for up to $50 million in debtor
in possession ("DIP") financing with a lender group led by Mellon
Bank.
The company has requested the Court's permission to access the
DIP financing to fund normal business operations and other cash
needs during the Chapter 11 case.
"Deep cuts in Medicare reimbursements, which far exceeded all
government forecasts coupled with chronic underfunding of
Medicaid reimbursements, have severely impacted Multicare's
ability to service our current capital structure," said chairman
and chief executive officer, Michael R. Walker. "Chapter 11
protection ensures that employees can focus their attention on
serving our customers while we restructure our long-term debt."
Due to debt repayment obligations, the company has been in
negotiations with its senior bank lenders and subordinated debt
holders since March 21. The company believes that Court
protection afforded by Chapter 11 will enable it to develop a
plan of reorganization with the goal of emerging from the case in
a healthier financial position.
In a separate action, Genesis Health Ventures (NYSE:GHV), 43.6%
owner of Multicare, also filed for Chapter 11 protection in
Delaware this morning.
The Multicare Companies, Inc.-a corporation principally owned by
Genesis-owns and manages skilled nursing and assisted living
facilities in the eastern and midwestern U.S. Multicare's 141
owned and managed facilities are operated by Genesis ElderCare.
NEW AMERICAN HEALTHCARE: Court Approves Sale of Crosby Memorial
---------------------------------------------------------------
New American Healthcare Corporation, Brentwood, Tennessee,
announced that the U.S. Bankruptcy Court, Middle District of
Tennessee, has approved the sale of Crosby Memorial Hospital by
New American Healthcare.
Under the agreement, Picayune Clinic, LLC will acquire Crosby
Memorial Hospital, a 95-bed hospital in Picayune, Mississippi.
The transaction is expected to close by July 31. Terms were not
disclosed.
"The sale the court approved today is part of our previously
announced strategy of putting our hospitals into the hands of new
owners that can invest in making them high-quality assets for the
communities, patients and medical professionals that rely on
them," said Tom Singleton, president and chief executive officer
of New American Healthcare. "We are especially pleased that
Crosby Memorial is being purchased by a group that has clearly
demonstrated its commitment and ability to operate in the
interest of the people it serves. The mayor and city government
have pledged to work with the physicians to provide quality
healthcare to the citizens of the area served by the hospital."
On April 19, New American Healthcare and its hospital
subsidiaries voluntarily filed petitions for protection under
Chapter 11 of the United States Bankruptcy Code. At the time of
the filing, the company had letters of intent for the sale of
seven of its eight hospitals.
New American Healthcare currently owns eight acute care hospitals
in six states with 861 licensed beds. More information about the
Company is available at http://www.nahc.net.
NEW AMERICAN HEALTHCARE: Court Approves Sale of Medical Center
--------------------------------------------------------------
New American Healthcare Corporation and LifePoint Hospitals, Inc.
(NASDAQ: LPNT) announced that the U.S. Bankruptcy Court, Middle
District of Tennessee, has approved the sale of Lander Valley
Medical Center, a 102-bed facility in Lander, Wyoming, to
LifePoint Hospitals, Inc. The transaction is expected to close by
July 1st. Terms were not disclosed.
"The sale the court approved today is part of our previously
announced strategy of putting our hospitals into the hands of new
owners who can invest in making them high-quality assets for the
communities, patients, and medical professionals relying on
them," said Tom Singleton, President and Chief Executive Officer
of New American Healthcare. "We are especially pleased that
Lander Valley Medical Center is being purchased by a company that
has clearly demonstrated its commitment and ability to operate in
the interest of the people it serves."
Jim Fleetwood, ChairmAn and Chief Executive Officer of LifePoint
Hospitals, Inc., said, "This transaction is consistent with our
long-term operating strategy and complements our existing group
of non-urban hospitals. We look forward to working closely with
the physicians, employees, medical professionals, and management
of Lander Valley Medical Center to provide excellent healthcare
to their community. We are very happy to learn that our bid for
the purchase of this facility was approved."
On April 19, New American Healthcare and its hospital
subsidiaries voluntarily filed petitions for protection under
Chapter 11 of the United States Bankruptcy Code. At the time of
the filing, the Company had letters of intent for the sale of
seven of its eight hospitals.
LifePoint Hospitals, Inc. was established in May of 1999 as a
spin-off to the shareholders of HCA - The Healthcare Company, the
nation's largest hospital and healthcare system. LifePoint owns
and operates 21 hospitals in non-urban areas. In most cases, the
LifePoint facility is the only hospital in the community.
LifePoint's non-urban operating strategy offers potential for
significant operational improvement by focusing on quality
patient care, supporting physicians, creating excellent
workplaces for its employees, providing community value, and
exercising fiscal responsibility. Headquartered in Brentwood,
Tennessee, LifePoint is affiliated with over 6,000 healthcare
professionals. More information about LifePoint and its hospitals
is available at www.lifepointhospitals.com.
New American Healthcare Corporation currently owns eight acute-
care hospitals located in six states with 861 licensed beds. More
information about the Company is available at www.nahc.net.
PLANET HOLLYWOOD: Bay Harbour Management Takes 47.2% Stake
----------------------------------------------------------
In an original Schedule 13D filed last week with the Securities
and Exchange Commission, the company states that Bay Harbour
Management LC has 1,509,016 Class A common shares in Planet
Hollywood. As reported earlier, Bay Harbour extended $10 million
standby term loan and a 22$ million one-year bridge loan to help
Planet Hollywood International, Inc. exit from bankruptcy. And
as partial consideration for the $10 million standby term loan,
Bay Harbor acquires a 47.2% Class A stake in Planet Hollywood,
which filed for Chapter 11 protection last Oct. 12 in Wilmington,
Del.
Bay Harbour considers the shares an attractive investment and
intends to review its investment on an ongoing basis.
SABRATEK: Taps Ross & Hardies As Special Counsel
------------------------------------------------
The debtor, Sabratek Corporation, et al. seeks court authority to
employ and retain Ross & Hardies as special counsel to the
debtor. The services to be provided by the ifrm include, but are
not limited to, the following:
a. Providing advice and assistance with respect to and attending
meetings held by the Board of Directors;
b. Providing advice on issues relating to securities laws;
c. Responding to inquiries made by the NASDAQ.
d. Working on issues relating to public disclosures and press
releases;
e. Providing advice and record keeping services regarding
meetings of the Board of Directors.
SHAPE INC: Case Summary and 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Shape Inc.
7 Shape Drive
Kennebunk, ME 04043
Petition Date: June 9, 2000 Chapter 11
Court: District of Maine
Bankruptcy Case No.: 00-20808
Debtor's Counsel: Jacob A. Manheimer
Pierce Atwood
One Monument Square
Portland, ME 04101
Tel:(207) 791-1100
Total Assets: $ 10 million above
Total Debts: $ 10 million above
20 Largest Unsecured Creditors
Carthuplus
Debibam 20
B 7350 Thulin
Belgium
Lammcrant Fililp Patent License
Tel:(065) 65-28-36 Agreement $ 2,021,420
Nova Chemical Inc.
P.O. Box 371100M
Pittsburgh, PA 15251
Domenic R. Scapes
Tel:(412) 490-4000 Trade $ 671,981
Paul, Weiss, Rifkind,
Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019-6064
Alan W. Kornberg
Tel:(212) 373-3000 Legal Fees $ 587,857
Toin Corporation USA
1-4-2 Kamcido Koto-Ku
Tokyo, Japan 136-0071
Yasuyuki Manaka
Tel:(404) 504-8990 Trade $ 446,330
LCV Associates
c/o E-Media
PO Box 488
Kennebunk, ME 04043
Paul Gelardi Patent License
Tel:(207) 985-8800 Agreement $ 365,235
Weil, Gotshal & Manges Legal Fees $ 231,271
Newmax (HK) Ltd Trade $ 186,338
Tower Group Int'l Trade $ 98,008
Chevron Chemical Corp. Trade $ 95,084
Kennebunk Light &
Power Inc. Utilities $ 84,582
Ivy Hill Corporation Trade $ 72,829
Prystup Packaging
Products Inc. Trade $ 70,607
Patton Boggs LLP Legal Fees $ 62,488
Interstate Container
Corporation Trade $ 52,575
Isaacson Lumber Co., Inc. Trade $ 45,673
The Staffing Group, Inc. Trade $ 40,296
V&G Freight Brokers LLC Trade $ 38,855
Houlihan, Lokey, Howard, Professional
Zukin Advice $ 33,393
M.A. Hamma Resin,
Distr. Inc. Trade $ 30,192
Industrial Packaging
Supply Trade $ 29,013
SHAPE: Files For Bankruptcy For Second Time In 12 Years
-------------------------------------------------------
Shape Inc., which was founded in Biddeford in 1973, has filed for
reorganization in federal bankruptcy court for the second time in
12 years. According to Jacob Manheimer, Shape's lawyer, the
company will file for a refinancing plan, which includes finding
new investors or sell the company. Cheap foreign labor and the
price of resin are the main factors, which contributed to the
company's downfall, said Peter Ciriello, president of Shape.
The company manufactures audiocassettes, videocassettes, compact
discs cases and computer accessories.
SUN HEALTHCARE: Cout Grants Further Extension of Exclusivity
------------------------------------------------------------
At the Debtors' behest, Judge Walrath granted a further extension
of the exclusive period for filing a plan to August 11, 2000, and
for soliciting acceptance to October 10, 2000.
The Debtors tell the Judge that given the number and complexity
of their cases, they are generally effectively managing their
businesses and properties but need some additional time to
resolve issues, and work out a consensual plan of reorganization.
Specifically, the Debtors report that they continue to make
progress in: the preparation of a plan of reorganization;
negotiations with the Department of Justice regarding the
disposition of skilled nursing facilities and the federal
government's alleged claims; formulation and presentation of a
business plan which includes five-year projections; establishment
of June 20 as the bar date for filing claims, after which the
Debtors will begin reviewing and analyzing claims filed;
increasing efficiency; and making settlements. (Sun Healthcare
Bankruptcy News Issue 12; Bankruptcy Creditors' Services Inc.)
VERDE MEDIA: Files for Chapter 11 Protection
--------------------------------------------
Verde Media Inc., which runs an environmental web site, filed for
chapter 11 protection yesterday in the U.S. Bankruptcy Court for
the District of Delaware in Wilmington, according to Reuters. The
San Francisco-based company, which distributes original content
across the web and television, said in court papers that its
assets and liabilities were each less than $10 million and
included $3.9 million in summary notes and warrants with 15
holders. The 20 largest unsecured creditors have trade claims
that range from $30,000 to $1.8 million. Former Verde investors
have included Ted Turner-the founder of the Cable News Network-
and Turner family members, Island Records founder Chris
Blackwell, and investment firms Lehman Brothers Holdings Inc.,
Canterbury Partners, and United Investors Group.
*********
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
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re-mailing and photocopying) is strictly prohibited without
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contained herein is obtained from sources believed to be
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