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/raid1/www/Hosts/bankrupt/TCR_Public/000809.MBX T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, August 9, 2000, Vol. 4, No. 155 Headlines AG FINANCIAL: FBI Probes Former Employee's Orders to Shred Loan Documents ALYN CORP: Boralyn Metal Manufacturer Files Chapter 7 Liquidation BIG PARTY: Seeks Approval for Sale of Assets BRIGHT SUN: Case Summary and 20 Largest Unsecured Creditors CLARIDGE HOTEL: Committee Asks U.S. Bancorp Libra to Help Market Casino COLONIAL DOWNS: Virginia Race Track To Close OTB Parlors COMMERCIAL FINANCIAL: Jenner & Block Asks to Represent Both Debtor & Creditor CREDITRUST CORP: Shareholders Initiate Class Action Suit Against Officers EDISON BROTHERS: Cases Convert to Chapter 7 & Aug. 21 341 Meeting Scheduled ELDER-BEERMAN: 5.5% Shareholder D3 Family Fund Losing Patience With Management GOLDEN BOOKS: Second Quarter Results Show Convalescence GOLDEN OCEAN: Bentley to Support Frontline's Reorganization Plan for Carrier GREAT TRAIN: Clear Disclosure that Shareholders Won't Recover Anything HAGERSTOWN FIBER: Trustee and Bondholders Tap Michael Fox and Perry Videx HOUSING RETAILER: Application to Employ Dworken Hillman as Accountants INSILCO HOLDING: Moody's Downgrades Senior Unsecured Rating to Caa2 INTEGRATED HEALTH: Motion To Reject a Handful of Executory Contracts & Leases LIBERTY HOUSE: JMB Realty Balks at Hawaii Retailer's Reorganization Plan LOEWEN GROUP: Discloses Five Miscellaneous Asset Sales to Parties-in-Interest LONDON FOG: Delaware Court Extends Sec. 365(d)(4) Deadline to November 20 MOBILE ENERGY: Files Joint Plan of Reorganization with Secured Bondholders MONET GROUP: IBJ Whitehall Moves to Prohibit Payment of $1.25MM Break-Up Fee MONET GROUP: Seeks Order Approving Rejection of Union Contract MULTICARE AMC: Debtors Tap Ernst & Young as Financial Advisors OPTEL, INC: Adelphia Communications Offers $56 Million for Cable TV Systems OWENS CORNINGS: Fitch Downgrades Senior Unsecured Debt Rating To 'BB' PAGING NETWORK: Metrocall Makes Pitch to File Competing Plan of Reorganization PRIME SUCCESSION: U.S. Trustee to Convene Meeting of Creditors on September 8 PRIME SUCCESSION: Obtains Final Approval of $10 Million DIP Financing Pact PRIME SUCCESSION: Court Schedules August 21 Disclosure Statement Hearing QUORUM INTERNATIONAL: Case Converts to Chapter 7 Liquidation SAFETY-KLEEN: Motion To Pay All Prepetition Permit & Licensing Fees SANITARY SERVICES: Service Complaints Voiced about Connecticut Trash Hauler SINGING MACHINE: New Shareholders to Consider ESOP & Decrease in Shares SIRENA APPAREL: Deadline to Make Decisions About Leases Extended to Sept. 30 SIZZLER INTERNATIONAL: Shareholders to Elect New Directors at Aug. 30 Meeting VERSATECH GROUP: Canadian Autoparts Maker Blames GM For Bankruptcy ********* AG FINANCIAL: FBI Probes Former Employee's Orders to Shred Loan Documents ------------------------------------------------------------------------- The Federal Bureau of Investigation is investigating American General Finance for the alleged destruction of documents pertaining to its bankrupt subsidiary, AG Financial Service Center Inc. Julie Greathouse, a former employee of the Evansville-based company, told the FBI that former AGF lead attorney, Ron DiGiacomo, instructed her to destroy documents of the insolvent subsidiary. The files consisted of security documents and credit agreements that Ms. Greathouse burned at her Posey County farm. AGF may be liable for $167 million if the allegations made by Ms. Greathouse prove to be true. Greathouse's attorney, Scott Danks says, "[AGF] wants to make sure the subsidiary company is the only party responsible." Representing DiGiacomo, Larry Mackey wasn't available for comment. AG Financial attorney, John Ames issued a written statement saying the company is investigating the allegations. A Mississippi judge ordered AG Financial in May 1999 to pay $167.7 million in damages to 29 people who sued the company. That judgment accounts for all but about $3 million of the $170 million in debts listed in AG Financial's bankruptcy petition. The company reported $7.2 million in assets, press reports relate. The files destroyed could be vital for the judgment in the Mississippi trial. AG Financial filed for bankruptcy in August 1999. It is a subsidiary of Houston-based American General Corp. AG Financial provides home equity and consumer loans and has assets totaling more than $117 billion. ALYN CORP: Boralyn Metal Manufacturer Files Chapter 7 Liquidation ----------------------------------------------------------------- The 10-year-old Alyn Corp., the Los Angeles Times reports, filed for Chapter 7 liquidation in the U.S. Bankruptcy Court in Santa Ana, California. Alyn lists assets of $22.3 million and debts of $10.6 million. The Irvine company suffered losses amounting to $15.2 million on $2.25 million in sales. Alyn would not comment to a Times reports about the recent resignations of Chairman Robert L. Burr and Director David J. Edwards, both belonging to Fleming Asset Management. Marshack, Shulman, Hodges & Friedman, LLP represents the Company. Alyn Corp. manufactures a metal alloy considered stronger than steel and lighter than aluminum called Boralyn. That alloy can be applied in nuclear, aerospace, computer hardware, aerospace, automotive and sporting goods industries. BIG PARTY: Seeks Approval for Sale of Assets -------------------------------------------- (Debbie's) The Big Party, Corporation seeks court approval to conduct an auction of the debtor's retail business operations and related properties and assets, including the debtor's leases of real property relating to its retail stores and other business locations. The debtor has identified various parties who either have expressed an interest in acquiring substantially all of the debtor's business or assets, or as to whom the debtor believes may be interested in pursuing a transaction with respect to the debtor. Due to the severity of the debtor's financial difficulties, and the limited time available, and since the debtor has not been able to finalize an agreement with any party concerning the sale of the debtor's business or its assets, the debtor seeks to bring this matter to a head and thereby seek to maximize the value of the debtor's assets. If authorized to do so, the debtor proposes to conduct the auction on or about August 8, 2000. In the event that no qualifying bid(s) are received at the auction, or if the debtor determines to accept a bid or bids for less than all of the assets, the debtor further requests that it be authorized to conduct an alternative going-out-of-business auction on or about August 8, 2000 and further conduct a hearing on or about August 11, 2000 to consider authorizing the debtor to conduct store closing sales from the remaining locations. The debtors believe that good cause exists to approve the fact of, and the terms and conditions of the auction and the GOB auction. It is the debtor's intention to conduct both the Asset Sale and the Going-Out -Of-Business Sales processes on parallel tracks, such that the auction and GOB auction, and the alternative hearings to be held on the sale motion, respectively, would occur substantially contemporaneously with one another. The terms of the auctions are reasonable and will enable the debtor and its creditors to realize the maximum value from the assets. The debtor believes that the parallel alternative bidding processes will yield the highest and best bids for the assets. BRIGHT SUN: Case Summary and 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: The Bright Sun Group, Inc. 770 Broadway New York, N.Y. 10013 Type of Business: Management consulting firm specializing in corporate directioning, new business ventures, intellectual property management and total marketing communications. Chapter 11 Petition Date: August 7, 2000 Court: Southern District of New York Bankruptcy Case No.: 00-13607 Debtor's Counsel: Joshua J. Angel, Esq. Angel & Frankel, P.C. 460 Park Avenue New York, New York 10022-1906 Tel:(212) 752-8000 Fax:(212) 752-8393 Email: jangel@angelfrankel.com Total Assets: $ 4,466,969 Total Debts : $ 3,362,765 20 Largest Unsecured Creditors Selway Partner, LLC c/o Yaron Eitan 100 Banon Place Totowa, NJ 07512 Loan $ 1,000,000 American Express Credit Card $ 125,837 Mach 1 Consultant & Production $ 114,731 Judy Wald Consultant & Partners, Inc. Production $ 95,900 AM Lithographers Consultant & Corporation Production $ 91,668 John Morrison, Consultant & Incorporated Production $ 89,000 Hall Dickler Kent Legal Friedman & Wood, LLP Services $ 64,421 Planet Limousine, LLC Car Service $ 54,871 Jane King/Jeff Consultant & Alphin Risky BBQ Production & 45,000 Brainshop Consultant & Production $ 44,000 ML Weisner & Co. LLP Accountant $ 43,414 Cherny Mermido Consultant & Production $ 33,600 JL Media, Inc. Consultant & Production $ 32,283 Broadcast Traffic & Residuals, Inc. Production $ 32,090 Reiner Design Consultants, Inc. Production $ 32,010 Barasch Music & Sound Production $ 31,874 Update Staffing Production $ 31,185 Antenna Designs Production $ 27,900 TTS Personnel, Inc. Production $ 27,660 Power House Exhibits Production $ 27,536 CLARIDGE HOTEL: Committee Asks U.S. Bancorp Libra to Help Market Casino ----------------------------------------------------------------------- The Official Committee of Secured Noteholders in the cases of The Claridge Hotel and Casino Corporation and the Claridge at Park Place, Incorporated and Atlantic City Boardwalk Associates LP seeks authority to expand the employment and retention of the Committee's Financial Advisor, US Bancorp Libra, a division of US Bancorp Investments, Inc., to permit the marketing for sale of the debtors and/or the assets of the estates. Confronted with the results of voting on the plan (excluding the Icahn interests, 93% of the dollars and 71% of the Noteholders, by number, voted to reject), the Committee expected that the Debtors would not move forward on the plan. However, the Debtors have indicated that they will move forward and intend to ask the court to cram down their Plan pursuant to Section 1129(b) of the Bankruptcy Code, notwithstanding the Noteholders' rejection. In preparation for a contested confirmation hearing -- currently scheduled for September 6, 2000 -- the Committee wants Libra to value the Casino Enterprise to counter valuation information the Debtors present in their Disclosure Statement. Libra tells the Committee that the best way to maximize the value of the Casino Enterprise is to initiate an open auction process for the sale of the enterprise to a third party. Based on Libra's advice, the Committee asks that the Court provide the opportunity for Libra to market the Casino Enterprise. Under the Engagement Letter, as compensation for arranging or inducing a transaction that is actually consummated, Libra will earn a "success fee" equal to .65% of the sale proceeds up to $56 million plus 5% of the sale proceeds over $56 million. Libra would not be entitled to a success fee for a sale to the Icahn Interests or one of four other parties to the Engagement Letter, unless the sale price is enhanced by Libra's efforts. Libra believes that it can obtain a qualifying offer within four weeks and complete a transaction within three months thereafter. The Committee believes that the marketing and selling of the Casino Enterprise to a third party would serve the best interests of all parties in interest in this case, and that Libra is the most qualified entity for this engagement. The Committee believes that because this engagement is premised on a success fee, it will not burden the estates. COLONIAL DOWNS: Virginia Race Track To Close OTB Parlors -------------------------------------------------------- A horse-racing course in Virginia, the Associated Press reports, may close four of its parlors and cease ties with Virginia Racing Commission the next two years. Shareholders were told by CEO Jeffrey P. Jacobs of Colonial Holdings Inc., of management's intent to rent the New Kent County track to another party. Jacobs added, "For the first time, given the political climate of the state, I'm recognizing that probably the best way to grow quality, live horse racing at the racetrack probably involves some formula that includes closing down the OTB parlors." Colonial Downs Holdings, Inc. is a Virginia corporation organized in November 1996 to pursue opportunities for pari-mutuel horse-racing and wagering in Virginia. The Company, through its subsidiaries, holds the only unlimited licenses to own and operate a pari-mutuel horse-racing course and satellite wagering facilities/racing centers in Virginia. Colonial Downs Holdings, Inc. became a publicly held company in March 1997 and trades on the NASDAQ Small Cap System under the symbol CDWN. COMMERCIAL FINANCIAL: Jenner & Block Asks to Represent Both Debtor & Creditor ----------------------------------------------------------------------------- Jenner & Block filed a Motion asking that it be permitted to represent Conseco, Inc., the corporate parent of a company which filed a claim against the Commercial Financial Services, Inc. for $25,442,764 and whose agent and/or manager also serves as a member of the Official Committee of Unsecured Creditors. Jenner & Block assures the Court that the current matter and anticipated future matters in which the Firm will represent Conseco are unrelated to Commercial Financial Services Inc. and that it will not staff the new engagement with personnel who are actively engaged in representing the Debtor. The Official Committee of Asset-Backed Securityholders claims that as the ultimate corporate parent of an entity which holds a claim in excess of $25 million against Commercial Financial Services and as a member of the constituency represented by the committee of unsecured creditors, Conseco has a material interest in the resolution of the disputes between that constituency and the constituency represented by the ABS Committee. According to the ABS Committee, Jenner & Block's motion raises the question whether the debtor's ability to mediate disputes between the two committees will be impaired if the debtor's lead counsel undertakes the representation of the parent of an entity which holds a substantial claim as a member of the creditor's committee constituency and whose agent and/or manager is a member of the creditors' committee. CREDITRUST CORP: Shareholders Initiate Class Action Suit Against Officers ------------------------------------------------------------------------- The Associated Press reports that a class action lawsuit was filed against Joseph K. Rensin and three other executives of Creditrust Corp. in the U.S. District Court in Baltimore. Rensin, Creditrust's president and chief executive, and the other three executives, whose names were undisclosed, are accused of falsifying public statements and augmenting the Company's stock price and financial reports. Creditrust Corp., a company which assume collection of delinquent credit card accounts after purchasing them, is located in Woodlawn, Maryland and filed Chapter 11 bankruptcy protection last June 22. EDISON BROTHERS: Cases Convert to Chapter 7 & Aug. 21 341 Meeting Scheduled --------------------------------------------------------------------------- On July 5, 2000 Judge Walrath approved a request by Edison Brothers Stores, Inc. and its debtor-affiliates to convert their Chapter 11 cases to a liquidation proceeding under Chapter 7 of the Bankruptcy Code. Alan M. Jacobs serves as the interim Chapter 7 trustee. The United States Trustee for Region III will convene a meeting of the Debtors' creditors, pursuant to Section 341 of the Bankruptcy Code, on August 21, 2000 at 10:00 AM, J. Caleb Boggs Federal Building, 844 King Street, Room 2313, Wilmington, DE. Additionally, the Bar Date, fixing the last date and time for creditors to file any proofs of claim is November 20, 2000. Attorneys for the Interim Trustee are Neil B. Glassman and Charlene D. Davis, The Bayard Firm, 222 Delaware Avenue - Suite 900, PO Box 25130, Wilmington, DE 19899. ELDER-BEERMAN: 5.5% Shareholder D3 Family Fund Losing Patience With Management ------------------------------------------------------------------------------ D3 Family Fund, controlling 820,500 shares -- a 5.5% stake -- of common stock in Elder-Beerman Stores, recently said it will vote in favor of the four directors and all of the resolutions contained in Elder-Beerman's proxy statement. However, D3 expressed its impatience with "management's excuses" for the Dayton, Ohio-based retailer's continued poor performance. In addition, F&D Reports' Scrambled Eggs publication relates, D3 recommended that Elder- Beerman separate the positions of chairman and CEO and, more drastically, replace current CEO & CFO Fred Mershad immediately. GOLDEN BOOKS: Second Quarter Results Show Convalescence ------------------------------------------------------- Golden Books Family Entertainment, Inc. reported an EBITDA improvement of $4.5 million for the second quarter, based on an EBITDA loss of $0.5 million for the quarter, compared with an EBITDA loss of $5.0 million for the second quarter of 1999. The Company's EBITDA for the first six months of 2000 was $1.6 million, compared with an EBITDA loss of $7.7 million for the first six months of 1999, an improvement of $9.3 million. Revenues of $32.7 million in the second quarter increased by $0.9 million, compared with $31.8 million in second quarter of 1999. Revenues of $69.0 million for the first six months of 2000 increased $2.4 million, compared with $66.6 million for the first six months of 1999. Excluding revenues from segments sold in 1999 (Adult Publishing and Commercial Products), revenues from ongoing operations for the first six months of 2000 increased $9.2 million (15%) to $69.0 million, compared with $59.8 million for the first six months of 1999. Gross profit increased $5.7 million to $15.6 million for the quarter from $9.9 million for the second quarter of 1999. As a percentage of revenues, gross profit increased to 48% for the second quarter, compared with 31% for the quarter in the prior year. Gross profit for the first six months of 2000 increased $11.6 million to $31.8 million from $20.2 million for the first six months of 1999. As a percentage of revenues, gross profit increased to 46% for the first six months of 2000, compared with 30% for the first six months of 1999. The Company's net loss for the second quarter of 2000 decreased. The net loss for the quarter was $7.7 million, compared with a net loss of $8.6 million for the second quarter of 1999. The Company's net loss for the first six months of 2000 was $12.0 million, compared with a net loss of $19.9 million for the first six months of 1999. In connection with the Company's Amended Plan of Reorganization, the Company adopted "fresh start" accounting at the beginning of fiscal 2000, and as a result, the net loss from period to period is not directly comparable. [See the attached Condensed Consolidated Statement of Operations.] Golden Books Family Entertainment, Inc. is one of the most recognized and trusted brands in children's publishing, and owns one of the largest libraries of family entertainment copyrights and exploits them through all media. The Company, through its entertainment division, creates, produces and markets such entertainment products as Lassie, Lone Ranger, Rudolph the Red Nosed Reindeer, Frosty the Snowman, and Underdog. GOLDEN OCEAN: Bentley to Support Frontline's Reorganization Plan for Carrier ---------------------------------------------------------------------------- Lloyd's List International reports on the Frontline Ltd. and Bentley Investlook's feud for control of bankrupt Golden Ocean Group Ltd. Bentley gave way to support Frontline's plan of reorganization, together with Greece's Restis and Kollakis families for the restructuring of Golden Ocean's Chapter 11 bankruptcy. Frontline agreed to seek court approval to enable it to replace and refinance Bentley as lender to Golden Ocean. Victor Restis of Bentley said the deal made "a lot of sense for both parties . . . it is obvious that the problems previously encountered were caused by mutual misunderstandings and the failure to maintain direct lines of communication." Concessions were made, according to Chairman Mr. Fredriksen of Frontline, as he mirrored Mr. Restis' comments. The U.S.-based 17-tanker, Golden Ocean is the world's largest fleet of modern very large crude carriers. Golden filed for Chapter 11 in the U.S. Bankruptcy Court in Delaware on January 14. GREAT TRAIN: Clear Disclosure that Shareholders Won't Recover Anything ---------------------------------------------------------------------- As previously reported in the TCR, The Great Train Store Company filed a voluntary petition for protection and reorganization under Chapter 11 of the Federal Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on February 28, 2000. From that time, the company has operated under the protection of the United States Bankruptcy Code as a debtor-in- possession and had been attempting to obtain bridge and replacement financing and to explore other opportunities. On May 18, 2000, the United States Bankruptcy Court entered an order authorizing, among other things, that the company (i) discontinue operations at and liquidate the inventory located at the going-out-of-business stores, and (ii) enter into an agency agreement for such liquidation. On June 23, 2000, the United States Bankruptcy Court entered an order approving the auction procedure for the sale of the company's leases and approving the rejection procedure for termination of the leases not auctioned. "To date, based on the preliminary results of the liquidation, the company does not expect that the stockholders of the company will receive a distribution as a result of the liquidation," Great Train says in a regulatory filing submitted to the Securities and Exchange Commission earlier this week. HAGERSTOWN FIBER: Trustee and Bondholders Tap Michael Fox and Perry Videx ------------------------------------------------------------------------- A hearing will be held on August 10, 2000 at 10:00 AM to consider the motion of David R. Kittay, Esq., Chapter 7 Trustee of Hagerstown Fiber Limited Partnership and the unofficial bondholders' committee for the debtor, for the entry of an order authorizing the retention of Michael Fox International Inc. and Perry/Videx, LLC as sales agent in respect of certain assets of the debtor, and approving an agreement related thereto. Hagerstown and its Bondholders' Committee tell the Bankruptcy Court that their mutual interests will be best served by retaining a skilled auctioneer to ensure that the asserts were properly marketed and the greatest return realized. The parties have agreed to a three-phased asset sale approach. During Phase I Fox shall receive a fee between 2.75% and 3% of the sale proceeds, with an incentive bonus of .5% if the amount of gross sale proceeds exceeds $25 million. In Phase II and Phase III, Fox shall receive a fee of between 5% and 8% of the sales proceeds and an incentive bonus of 1% of the aggregate amount of gross sale proceeds that exceed $25 million. These fees are subject to other adjustments in the Engagement Letter. HOUSING RETAILER: Application to Employ Dworken Hillman as Accountants ---------------------------------------------------------------------- Housing Retailer Holdings, Inc., and H Squared LLC, through their counsel, Saul, Ewing, Remick & Saul LLP, apply to the Bankruptcy Court in Delaware for an order authorizing them to employ Dworken, Hillman LaMorte & Sterczala, PC as their accountant during the chapter 11 process. The Debtors submit that it is essential for them to employ Dworken as their accountant in these cases because the debtors will be unable to comply with various tax reporting requirements without Dworken's accounting services. Compensation will be payable to Dworken on an hourly basis, plus reimbursement of necessary expenses. The current standard hourly rates of the firm staff presently designated to represent the debtor are: James G. Cosgrove (principal) $225 Paul M. Sterczala, CPA (principal) $225 Scott Firmender, CPA (staff) James S. Rollinson, CPA (staff) INSILCO HOLDING: Moody's Downgrades Senior Unsecured Rating to Caa2 ------------------------------------------------------------------- Moody's Investors Service downgraded the rating of Insilco Holding Co.'s $138 million par ($89 million current accreted value) 14% senior discount notes due 2008 to Caa2, from Caa1. Holdings' senior unsecured issuer rating was downgraded to Caa2, from Caa1. The senior implied rating was downgraded to B2, from B1. Holdings' $73 million par ($45 million current accreted value) 15% PIK senior exchangeable redeemable preferred stock is rated "caa". The outlook is stable. At the operating company level, Moody's downgraded the rating of Insilco Technologies' (formerly known as Insilco Corporation) $120 million of 12% senior subordinated notes due 2007 to Caa1, from B3, and also downgraded the ratings of Insilco's existing approximately $285 million of senior secured credit facilities to B2, from Ba3, which ratings shall be withdrawn upon execution of a new senior credit agreement. In addition, Moody's assigned a rating of B2 to all three tranches of Insilco's proposed new $200 million in senior secured bank credit facilities. These ratings actions were prompted by several transactions being contemplated by the company and its investors in an effort to better focus Insilco's business segments, unlock values and obtain greater financial flexibility. These include the decisions by Insilco to: (i) concentrate on its electronic and telecommunications business (including custom cable assembly, passive components and stamping) and divest its ThermaSys heat transfer and transmission components business lines for $147 million in net sale proceeds and, additionally (ii) acquire the stock of Precision Cable, a complementary cable assembly operation, at a purchase price of $55 million. Majority ownership of Holdings will continue to be held by DLJ Merchant Banking, with the balance owned by a combination of Citicorp Venture Capital, management and the public. Insilco will continue to share common management with ThermaSys. The rating actions reflect Insilco's extremely weak balance sheet and high leverage, at both the operating company and consolidated holding company levels. Pro forma consolidated debt is approximately equal to Insilco's total revenues. In addition, the company operates in markets characterized by technological change, evolving industry standards, frequent new product introductions and product customization. There is a very high service element to the business, making it critical to maintain a large infrastructure and a presence close to key customers. Strong competitors must also have capacity to ramp up new programs quickly, which can prove expensive should higher volumes not be obtained due to economic or other unexpected events. The industry is fragmented with regard to all of the company's key products, and there is evidence that the market is beginning to rationalize its customer base. Insilco additionally remains acquisition-oriented, despite its substantial existing debt. While the divestiture of ThermaSys will enable Insilco to focus on its higher margin niche technology businesses, the company will be at some risk of having a less diversified business profile. The ratings actions also consider Insilco's strengths. Rapid growth and very strong margins characterize the company's business. Insilco has strong relationships with many Fortune 500 companies, but does not have any significant concentrations. The acquisition of Precision Cable will further serve to diversify the customer base with additional top tier customers. Management has proven capable of integrating acquisitions in the past, and has sold off most of its non-core assets at a profit. The company has strong levels of available capacity in the US, as well as in Mexico, Canada and Asia. As a by-product of past infrastructure investments, capital expenditures levels are anticipated to track below depreciation expense. The ratings also reflect the PIK provisions of certain of the company's debt and preferred stock that will remain in place until August 2003. The stable outlook reflects Insilco's expected ability to continue its strong revenue growth at high margins. The company has developed a solid customer base and appears to provide the required high levels of service. Moody's could reevaluate its ratings in the event that the company produces levels of cash available for debt service that differ from expectations as a result of a combination of revenue or margin changes, disproportionate changes in working capital requirements, or aggressive acquisition activities. The $200 million in new senior secured credit facilities, to be arranged by DLJ Capital Funding, will consist of three tranches: (1) a $50 million six-year revolving credit (2) a $50 million six-year term loan A (3) a $100 million seven-year term loan B There will additionally be established a $25 million accordion feature which may be activated in the event of future acquisitions. These facilities, along with the $147 million in net proceeds from the sale of ThermaSys, will be used to: (A) refinance the company's existing senior indebtedness (B) finance the approximately $55 million purchase price for the stock of Precision Cable (C) pay fees and expenses associated with the transactions (D) provide for ongoing general corporate needs The revolving credit will also be able to be utilized for small permitted acquisitions. The B2 rating reflects the benefits and limitations of the collateral package, which consists of a first priority interest in all tangible and intangible assets of the borrower and its guarantors. The borrower is the operating company Insilco. Guarantees will be provided by Holdings, as well as by all material direct and indirect subsidiaries of Insilco. Stock pledges will be provided by the borrower and all of its material subsidiaries (100% of the voting stock of domestic entities and up to 65% of the voting stock of foreign subsidiaries). All intercompany indebtedness will be pledged in favor of the borrower and guarantors. The B2 rating of the senior secured bank facilities is the same as the senior implied rating, reflecting limited asset coverage. The issuer of the $120 million of 12 % senior subordinated notes, due 2007, is also Insilco. The Caa1 rating reflects the contractual subordination of these notes to senior debt, including outstandings under the secured credit facilities. These unsecured notes are guaranteed on a senior subordinated basis by all wholly-owned existing and future domestic subsidiaries. The notes are non-callable until August 2002 and contain mandatory redemption provisions in the event of a change in control. The issuer of the $138 million par 14% senior discount notes due 2008 is Holdings. Interest accretes until August 2003, and then becomes payable in cash. The notes are redeemable at a premium after August 2003 and contain certain restrictive covenants. The Caa2 rating of the senior discount notes reflects that Holdings' sole purpose is to hold the stock of Insilco and, additionally, that the notes are structurally subordinated in nature due to the lack of a guarantee from Insilco. The issuer of the $73 million par 15% senior exchangeable redeemable preferred stock is Holdings. Dividends are paid in kind until August 2003, and then become payable in cash. The shares are redeemable at any time at a premium which begins at 15%, and then starts decreasing after August 2003. A put at 101% exists in the event of a change of control. The "caa" rating reflects the junior nature of these non-guaranteed securities. Pro forma for the transactions to divest ThermaSys, acquire Precision Cable and refinance the existing senior secured debt, the company will have posted LTM June 30, 2000 sales, gross profit and EBITDA (after earnout payments) of $383 million, $107 million (28%) and $61 million (16%), respectively. The pro forma ROA return on assets is very robust at 16.6%. Pro forma consolidated EBITA coverage of cash interest and preferred dividends will be satisfactory at 1.8x. This ratio reflects the PIK nature of a total of almost $18 million in pro forma interest and dividends. Pro forma consolidated LTM June 30, 2000 leverage, as measured by "total debt/EBITDA" is very high at 5.9x (and 6.6x when incorporating the $45 million current value of PIK redeemable preferred stock as debt). Pro forma senior debt/EBITDA is satisfactory at 2.5x. Pro forma consolidated tangible equity is negative $300 million, with goodwill equal to $111 million, or 34% of total assets. Pro forma debt is approximately equal to revenues. Insilco, headquartered in Dublin, Ohio, is a designer, manufacturer, and distributor of custom cable assemblies, passive electronic components and precision stampings. These business segments represented approximately 48.5%, 27.5% and 24%, respectively of the company's pro forma 1999 revenues. Insilco's products serve as building blocks for telecom, data networking and electronic products. The company manufactures and markets its products and services to Fortune 100 companies, which include leading OEM and EMS providers in the telecommunications, data processing, computer networking, cellular telephone, electronics and security systems markets. Insilco services its customers globally, but the bulk of its assets and operations are based in North America. The company is publicly traded (ticker symbol INSL.OB). INTEGRATED HEALTH: Motion To Reject a Handful of Executory Contracts & Leases ----------------------------------------------------------------------------- Integrated Health Services, Inc., and its debtor-affiliates sought and obtained authority from Judge Walrath to reject five executory contracts and unexpired leases pursuant to 11 U.S.C. Sec. 365: (1) Medical Gases Agreement with Lessors, Inc. under which the Debtors purchase industrial and medical gases, at monthly cost of $2,916, for an initial three year term, renewable from year to year until written notice for termination. (2) Computer Recovery Services Agreement, July 1, 1997, with Sunguard Recovery Services, Inc. for Sunguard to supply center-based, mobile and related computer recovery and support services in the unplanned event or condition that IHS is unable to use a location for its intended computer processing and related purposes, at monthly cost of $8,875, for 60 months. (3) Marathon Busniess Systems Lease between Horizon Specialty Hospital, a subsidiary of IHS and Marathon Business Systems under which Horizon leased business machines from Marathon, at monthly cost of $323, for 60 months, renewable from year to year. (4) Konica Business Technologies Agreement between Cheyenne Intermediate Care, a subsidiary of IHS, and Konica Business Technologies pursuant to which Cheyenne leased copy machines from Konica, for a term of 60 months, at a monthly cost of $308 plus additional amounts depending on volume which have been approximately $800 per month in recent months. (5) Fleet Lease with Fleet Leasing Corporation, dated October 30, 1998, pursuant to which IHS leased business machines from Fleet, at montly cost of $189, for a term of 60 months. (Integrated Health Bankruptcy News, Issue No. 6; Bankruptcy Creditors Service Inc., 609/392- 0900) LIBERTY HOUSE: JMB Realty Balks at Hawaii Retailer's Reorganization Plan ------------------------------------------------------------------------ The Associated Press reports that Hawaii department store chain Liberty House filed a reorganization plan in U.S. Bankruptcy Court in Honolulu to emerge from bankruptcy. Liberty House's plan, the AP understands, has consent from creditors and lenders, but not from its owner, JMB Realty Corp. Bruce Bennett, Esq., representing the retailer, said, "The plan is the result of extensive negotiations and cooperation among the parties, and reflects their collective desire to resolve the bankruptcy case." JMB asks Bankruptcy Judge Lloyd King to appoint a mediator to draft a plan. Liberty House and its major lenders think that suggestion is absurd and the cost will far exceed any benefit. Conflict in Liberty House's restructuring was intense at the outset of its chapter 11 filing. Liberty House managers have been answering to two boards of directors -- one controlled by JMB and the other by the institutional lenders led by bank of America. The 150-year-old Liberty House which is Hawaii's oldest and largest department store chain, filed for Chapter 11 bankruptcy protection in March 1998, listing assets of $284.2 million and liabilities of $248.4 million. LOEWEN GROUP: Discloses Five Miscellaneous Asset Sales to Parties-in-Interest --------------------------------------------------------------------- The Loewen Group, Inc., and its debtor-affiliates report these Miscellaneous Asset Sales to the U.S. Bankruptcy Court in Wilmington, Delaware: (A) Loewen Group International, Inc. (LGII) sold approximately 34,953 square feet of real property located in Plainview, New York where a parking lot and a commercial building containing approximately 3,516 square feet of space are situated to Ralph Parisi for $1,025,000. (B) Prata Funeral Homes, Inc. sold Property of approximately 34,107 square feet and assets at a vacant former funeral home located at 375 Branch Avenue, Providence, Rhode Island to Hugo L. Ricci and Raymond Dettore, Jr. for $253,900 in cash. (C) Loewen (Oklahoma), Inc. conveyed its interest in real property at 615 South Ponca Street, Norman, Oklahoma to Randy P. Veitenheimer for an aggregate purchase price of $60,000. (D) Poteet Holdings, Inc. sold 4,265 square feet of real property located in Vadalia, Georgia to William H. McLain for $6,400. (E) Loewen Communication Center, Inc. sold office equipment formerly used in the center to Robert M. Cottell, Sr. individually and doing business as TeleLink Communications for $10,000 in cash and promissory note in principal amount of $70,000 payable in 12 monthly installments with an interest of 8%. (Loewen Bankruptcy News, Issue No. 25; Bankruptcy Creditors Service Inc., 609/392- 0900) LONDON FOG: Delaware Court Extends Sec. 365(d)(4) Deadline to November 20 ------------------------------------------------------------------------- By order entered July 27, 2000, the U.S. Bankruptcy Court for the District of Delaware granted a Motion by London Fog Industries, Inc., et al., for an extension, pursuant to 11 U.S.C. Sec. 365(d)(4), of the deadline within which the Company must decide whether to assume, assume and assign or reject non-residential real property leases to and including November 20, 2000. The Court's Order does not apply to the Debtors' lease with Craig Realty Group - Woodburn LLC for a store located at the shopping center in Woodburn, Oregon. A separate Court order will govern the deadline by which the Debtors must decide the disposition of that Lease Agreement. MOBILE ENERGY: Files Joint Plan of Reorganization with Secured Bondholders -------------------------------------------------------------------------- Mobile Energy Services Company LLC, its parent Mobile Energy Services Holdings Inc. and a committee of secured bondholders have jointly filed a proposed plan of reorganization in U.S. Bankruptcy Court that would, upon approval, restructure Mobile Energy Services' secured bond debt. The plan also would allow for the development of a new pulp mill on the mill site idled by Kimberly Clark Tissue Company in September 1999. The proposed plan would restructure the existing secured bond debt, with the consent of the bondholders, significantly reducing Mobile Energy Services' long-term debt obligations. Additionally, the equity ownership of Mobile Energy Services Holdings would be transferred from Southern Company (NYSE: SO) and its affiliates to the bondholders. As part of the plan filed Aug. 4, Mobile Energy Services would continue to provide energy services to the Kimberly Clark Tissue Company and Sappi facilities at the site, as well as to the new pulp mill. Negotiations with a potential third-party owner and operator of the new pulp mill are underway. The new pulp mill would use property and equipment from Kimberly-Clark Tissue Company. Mobile Energy Services obtained the right to purchase the equipment in return for market-priced steam and electricity and as part of a settlement of claims the companies filed against each other. Under the proposed plan Mobile Energy Services would transfer the rights to the pulp mill property and equipment to the owners of the new pulp mill. Mobile Energy Services is the owner and operator of a facility that generates electricity, produces steam and, until the shutdown of the pulp mill, processed black liquor as part of a pulp and paper complex in Mobile, Ala. Mobile Energy Services and Mobile Energy Services Holdings Inc. filed for Chapter 11 bankruptcy protection in January 1999. The proposed plan also furthers the construction of a new cogeneration facility, which would use natural gas to manufacture additional steam for the site and electricity for sale to the wholesale power market. The development of the cogeneration project was approved by the U.S. Bankruptcy Court in January of this year. The plan also provides for payment in full to non-insider creditors of Mobile Energy Services other than the bondholders whose claims are allowed by the Bankruptcy Court, as well as payment in full of allowed administrative claims. The U.S. Bankruptcy Court for the Southern District of Alabama must review and approve the joint plan of reorganization after it is voted on by creditors. The transactions envisioned under the plan are also subject to review by the U.S. Securities and Exchange Commission. This press release is not a solicitation for any party's vote on the plan. MONET GROUP: IBJ Whitehall Moves to Prohibit Payment of $1.25MM Break-Up Fee ---------------------------------------------------------------------------- IBJ Whitehall Business Credit Corporation f/k/a IBJ Schroder Business Credit Corporation, individually and as administrative agent for the prepetition and postpetition lenders, filed a motion for a court order prohibiting payment by The Monet Group, Inc., and its affiliates of a Break-up Fee and expense reimbursement to Monet Acquisition Corp. in connection with its role as stalking horse bidder for the sale of the debtors' assets. According to IBJ Whitehall, the court's Bidding Procedures Order dated May 31, 2000 provides that the debtors are authorized to pay a Breakup Fee and expense reimbursement to Monet Acquisition if it is not in default under its agreement. However, IBJ Whitehall maintains that Monet Acquisition is in default under the agreement, which includes its commitment to pay the Lenders' fees and expenses pursuant to a certain schedule. In the term sheet, Monet Acquisition agreed to reimburse IBJ as agent for the Lenders for all fees and expenses incurred in negotiating and preparing documentation for the financing transaction, whether or not such transaction was ultimately consummated. To date, IBJ has invoiced Monet Acquisition for $208,522 in fees and expenses. Due to this default, IBJ claims that Monet Acquisition is not entitled to its $1.25 million Break-UP Fee. Richards, Layton & Finger and Morgan, Lewis & Bockius LLP represent IBJ Whitehall Business Creditor Corporation. MONET GROUP: Seeks Order Approving Rejection of Union Contract -------------------------------------------------------------- The Monet Group, Inc. n/k/a M Group, Inc., The Monet Group Holdings, Inc., n/k/a TMGH, Inc., and Monet Sales Corp. n/k/a M Sales Corp. seek a court order approving rejection of Union Contract. On or about October 5, 1998, Monet and the Jewelry Toolmakers And Die Cutters Lodge 129 of District 64 of the International Association of Machinists and Aerospace Workers entered into a three year Agreement whereby Monet's employees would be represented by the Union and the Union negotiated certain benefits and obligations on behalf of the employees. The agreement was extended until October 1, 2001. L-M Acquisition Corp., the purchaser of substantially all of the debtors' assets, has advised the debtors that it will not be assuming the obligations under the Agreement pursuant to the sale. In light of the liquidation and wind-down of the debtors' business, the debtors seek to reject the Agreement because the Agreement is of no future benefit to these estates. MULTICARE AMC: Debtors Tap Ernst & Young as Financial Advisors -------------------------------------------------------------- Multicare AMC, Inc., et al., filed an application for an order authorizing the debtors to retain and employ Ernst & Young LLP and Ernst & Young Restructuring LLC as financial advisors for the debtors. Among other professional services, E&Y will assist in the reorganization effort by: * Providing health care financial, clinical and operational experts to advise and assist the debtors in the preparation of analyses of certain related-party transactions and services provided by GHV to the debtors' facilities including pharmacy, therapy and other services. * Assessing various revenue enhancement and cost reduction opportunities at the nursing home level; * Conducting an analysis to assess the debtors' ability to determine its cost structure related to various patient categories to be used to determine whether certain patient categories are not profitable; * Conducting off-site visits of the Manager's regional offices and selected nursing home sites of the debtors to assess operational and financial conditions; * Reviewing certain reimbursement and regulatory matters; * Prepare nursing home benchmarking analyses; and * Performing such other services as may be requested from time to time by the debtors' management or Beverly Anderson, the debtors' Chief Restructuring Officer. Compensation will be payable on an hourly basis. The hourly rates payable to Ernst & Young and Ernst & Young Restructuring for services, by classification are currently as follows: Ernst & Young Restructuring: Managing Directors & Principals $495 to $575 Directors $425 to $480 Vice Presidents $325 to $375 Associates $265 to $295 Analysts $195 to $225 Client Service Associates $115 Ernst & Young Partners & Principals $440 to $550 Senior Managers & Managers $240 to $400 Seniors & Staff $145 to $230 During the three months immediately preceding the Petition Date, the debtors made payments to Ernst & Young Restructuring aggregating $65,640 and to Ernst & Young aggregating $302,794. Co-Counsel for the MultiCare debtors are James L. Patton, Jr, Robert S. Brady and Maureen D. Luke of Young Conaway Stargatt & Taylor LLP and Marc Abrams and Paul V. Shalhoub of Willkie Farr & Gallagher. OPTEL, INC: Adelphia Communications Offers $56 Million for Cable TV Systems --------------------------------------------------------------------------- Optel, Inc., and its debtor-affiliates seek bankruptcy court approval of an Asset Purchase Agreement dated as of June 29, 2000 with Adelphia Communications Corporation. The debtors have determined that it is in their best interest to sell all of the tangible and intangible assets used by the sellers in connection with its cable television systems in sellers' Los Angeles, California area and San Diego, California area markets. The assets to be sold include the equipment, the assumed contracts, the FCC licenses, the other licenses, the franchises, the customer receivables, the vehicles, the inventory, the books and records. The Buyer shall pay the aggregate amount of $56,192,000, subject to certain adjustments. The closing of the sale and transfer of the assets shall take place at the offices of Kronish Lieb Weiner & Hellman LLP, 1114 Avenue of Americas, New York, NY 10036, co-counsel to OpTel, on a date which is the latest of the date on which the Approval Order has become a Final Order or such earlier date after the entry of the Approval Order as Buyer may designate by at least five days prior written notice to Sellers, after certain conditions have been met, satisfied or waived. This agreement is subject to higher or better offers in an amount in the aggregate at least equal to the sum of the purchase price plus a $1,685,000 Break-Up Fee in the event that Adelphia it outbid. OWENS CORNINGS: Fitch Downgrades Senior Unsecured Debt Rating To 'BB' --------------------------------------------------------------------- Fitch downgraded the ratings of Owens Corning's (OWC) senior unsecured debt from 'BBB-' to 'BB', and lowered the MIPS rating from 'BB+' to 'B+'. The Outlook remains Negative. The rating change reflects the company's diminished capacity to generate free cash flow through the cycle after incorporating increased asbestos-related outlays associated with the company's National Settlement Program (NSP). The recent addition to asbestos reserves decreases the company's ability to absorb the impact of cyclical fluctuations without further burdening its balance sheet and reducing debt protection measures. On July 13, OWC announced that it was increasing its asbestos reserve by $1 billion pretax, which will result in an expansion of payments in 2003 and 2004 from $150 to $400 (pretax and pre-insurance recoveries), in each year. Existing caps of $950 million, $400 million and $250 million remain intact for 2000, 2001, and 2002 respectively. Debt levels have expanded rapidly since the implementation of the NSP, and negative cash flows resulting from asbestos payments are likely to cause further expansion in the event of economic softness. Partially offsetting 2000 payments was the receipt of $335 million in non-product liability insurance. Owens Corning will continue to require additional external financing over the intermediate term, and is likely to be reliant on the bank market for these funds, including the ability to meet long-term debt maturities. OWC's recent debt protection measures had been considered weak for the rating, and the rating had incorporated certain expectations since the establishment of the NSP in 1998. Namely, that despite the meaningful increase in debt resulting from large payments in 1999 and 2000, the subsequent rapid falloff would prevent the company's balance sheet from further deteriorating in the event of a normal cyclical downturn. The rating also assumed that Owens Corning would be in a position to restore its balance sheet upon the continuation of current healthy market conditions, or in the event of an upturn in economic conditions following any short-term slowdown. The rating action reflects the company's reduced capacity to meet the prior expectations given that the increased claims on the company's cashflow in 2003 and 2004 reduce the company's flexibility to absorb cyclical fluctuations over this time period. Although the NSP has clearly been beneficial in resolving claims and managing cash outflows, underlying developments surrounding asbestos liability continue to be negative, which has forced OWC and other companies to continuously revise reserve levels. The 'BB' rating incorporates the potential impact of normal cyclical fluctuations inherent to Owens Corning's core building materials segment, which Fitch believes has performed in line with expectations. The negative outlook reflects that over the intermediate term OWC's ratings could be pressured by additional reserves (including increased reserves related to the Fibreboard settlement trust) and by the company's reduced access to capital sources. As in the past, asbestos payment obligations will continue to represent a meaningful determinant of OWC's credit quality and rating changes may continue to be largely event driven. Fitch recognizes that successful resolution of the company's litigation against the tobacco industry, the potential receipt of meaningful non-product liability insurance proceeds or the adoption of several tax-relief proposals could favorably impact credit quality over the intermediate term. PAGING NETWORK: Metrocall Makes Pitch to File Competing Plan of Reorganization ------------------------------------------------------------------------------ Metrocall, Inc. (Nasdaq: MCLL) announced that it filed a motion requesting that the U.S. Bankruptcy Court for the District of Delaware terminate PageNet's exclusivity period as to permit Metrocall to expeditiously submit a competing plan of reorganization in the Chapter 11 reorganization cases of Paging Network, Inc. and its operating subsidiaries. Metrocall's motion contains a timetable that demonstrates that a competing Metrocall plan could obtain all regulatory approvals and be confirmed by the Bankruptcy Court before the year- end. As stated in its motion, Metrocall believes that it should have the chance to conduct expedited due diligence for a period of ten business days and to propose a competing plan that is more favorable to stakeholders than PageNet's proposed transaction with Arch Communications. Metrocall further stated in its motion that PageNet's board has a fiduciary obligation to its stakeholders to allow competing bids, which will benefit all stakeholders, and a fair auction is consistent with bankruptcy principles to accept the highest and best offer. Metrocall said that its proposal to the PageNet Board dated July 18, 2000, which it believes is a superior proposal to the pending agreement, remains open. Metrocall believes its proposal is more favorable, among other reasons, because it has a $100 million cash component that PageNet's current pending merger agreement does not, as well as an equity component, which had a value considerably higher than the competing offer when valued using the closing market prices as of the date of the proposal, as well as the closing market prices as of Friday August 4th. Metrocall believes, as a result of its strategic and financial investors, Aether Systems, Hicks, Muse, Tate & Furst and PSINet it is better positioned to capitalize on the growing demand for SMS and two-way messaging, as well as participate in the rapidly emerging wireless ASP market through its recently created subsidiary Inciscent. A hearing on Metrocall's motion is currently set for August 21, 2000. Metrocall makes it clear that it has had, and may continue to have, discussions with representatives of PageNet creditors and shareholders regarding its motion. PRIME SUCCESSION: U.S. Trustee to Convene Meeting of Creditors on September 8 ----------------------------------------------------------------------------- On July 12, 2000, the debtors, Prime Succession, Inc., et al. filed voluntary petitions for relief under Chapter 11. The meeting of creditors, pursuant to Section 341 of the Bankruptcy Code, will be held on September 8, 2000 at 1:00 PM, 844 King Street, Room 2313, Wilmington, DE. Counsel for the Debtors is: Young Conaway Stargatt & Taylor LLP Attn: Pauline K. Morgan, Esq. Eleventh Floor Wilmington Trust Center 1100 North Market St. PO Box 391 Wilmington, DE 19899 The U.S. Trustee assigned to the Debtors' cases is: Daniel K. Astin, Esq. Office of the US Trustee Curtis Center, 950 West 601 Walnut Street Philadelphia, PA 19106 The deadline to file a proof of claim is August 31, 2000 at 4:00 PM. Donlin, Recano & Co., Inc.,, serves as the claims agent in these cases. PRIME SUCCESSION: Obtains Final Approval of $10 Million DIP Financing Pact -------------------------------------------------------------------------- Prime Succession, Inc., announced that the U.S. Bankruptcy Court for the District of Delaware gave final approval for the Company's debtor-in- possession financing. Under the DIP financing agreement, the Company has obtained up to $10 million in financing from a group of its current senior lenders. Prime Succession, Inc. is the fifth largest provider of funeral and cemetery products and services in the death care industry, on the basis of revenues, in the United States. Through its subsidiaries, the Company owns and operates approximately 140 funeral homes and 19 cemeteries in 19 states. PRIME SUCCESSION: Court Schedules August 21 Disclosure Statement Hearing ------------------------------------------------------------------------ Prime Succession, Inc., announced that the U.S. Bankruptcy Court for the District of Delaware has scheduled August 21, 2000, as the date for the hearing to determine the adequacy of the Company's disclosure statement. Additionally, the Court has tentatively scheduled September 28, 2000, as the date for the confirmation hearing regarding the Company's plan of reorganization. Based on this schedule, the Company would expect to emerge from Chapter 11 in mid-October, 2000. The Company makes it clear that there is no assurance that the momentum of this fast-track chapter 11 case can be maintained. QUORUM INTERNATIONAL: Case Converts to Chapter 7 Liquidation ------------------------------------------------------------ Quorum International Ltd. elected to convert its chapter 11 reorganization case to a chapter 7 liquidation on July 21, 2000. John R. Clemency, Esq., of Streich Lang, PA, in Phoenix, continues to serve as Debtor's counsel. A meeting of creditors is set for August 29, 2000 at 8:30 AM at the Office of the US Trustee, 2929 N. Central Avenue, 8th Floor, Room 820, Phoenix, Arizona. Proofs of claim in the chapter 7 case must be received by the bankruptcy clerk's office by November 27, 2000. SAFETY-KLEEN: Motion To Pay All Prepetition Permit & Licensing Fees ------------------------------------------------------------------- In the ordinary course of their businesses, Safety-Kleen Corp. and its affiliated debtors are required to pay a vast array of Fees for operating permits and licenses, including, among others, solid waste disposal, hazardous waste generation, disposal and monitoring, air contaminant emission, underground storage tank, and used oil permit and/or license fees, various storm water permit, solid waste facility licenses, RCRA permits, air quality, occupational lead poisoning, mercury handling, manifest, business license, and industrial discharge permit and/or license fees. These permits and licenses are prerequisites to the Debtors' ability to operate their businesses. Prior to the commencement of these cases, the Debtors generally paid such Fees in a timely fashion, although certain of the Fees were unpaid immediately prior to the Petition Date. The Fees, the Debtors explain, are incurred in the ordinary course of the Debtors, businesses, either on a monthly, quarterly, or annual basis. Most Fees are paid prospectively, i.e., at the beginning of a particular month, quarter, or year, to secure the relevant permit or license for future operations. In some instances, however, the Fees are paid in arrears. Virtually all of the Fees are levied by the Regulatory Authorities pursuant to one or more federal, state and local hazardous waste and other environmental statutes and regulations. Fees may be calculated in a variety of ways, depending upon the specific statutes or regulations enacted by a Regulatory Authority. Some Fees are "flat fees," i.e., they are a specified amount regardless of the Debtors actual activity. Other Fees are levied by Regulatory Authorities based on the Debtors' collection, transportation, disposal, or other activity during the immediately preceding monthly, quarterly, or annual period. Still other Fees are based on statutorily mandated criteria other than actual activity by the Debtors. Regardless of their basis, however, the Fees must be paid in order for the Debtors to continue to operate their businesses and facilities. The Debtors operate more than 250 facilities across the United States, all of which are subject to one or more Fees. Because of the significant costs that would be involved, the Debtors have not conducted an exhaustive survey of all states and localities to determine to what extent such Fees would be deemed administrative expenses in each jurisdiction (i.e., Fees that are paid prospectively, and that are due for a postpetition period). The Debtors believe, however, that the vast majority of the Fees likely constitute administrative expenses, in that most of the Fees due prepetition are, in fact, payments in advance for permits and licenses covering the postpetition period. Considering the merits of the Debtors' Motion, Judge Walsh ruled that the Debtors' Motion is Granted and: A. The Debtors are authorized, but not directed, in their sole and absolute discretion, to pay the Fees, as described in the Motion, in the ordinary course of business. B. All banks upon which a check, draft, or wire transfer dated prior to, on, or after the Petition Date is drawn in payment of Fees are authorized and directed to (a) honor any such checks or drafts issued, upon presentation thereof, or any such wire transfer instructions, upon receipt thereof, and (b) rely upon the representations of the Debtors as to which such checks, drafts, or wire transfers are in payment of Fees under this order. C. Neither this order, nor any action by the Debtors, in accordance herewith, shall be construed as impairing, or shall be deemed to impair, the Debtors' rights to contest the validity or amount of any Fees that may be alleged by any Regulatory Authority to be due. (Safety-Kleen Bankruptcy News, Issue No. 5; Bankruptcy Creditors Service Inc., 609/392- 0900) SANITARY SERVICES: Service Complaints Voiced about Connecticut Trash Hauler --------------------------------------------------------------------------- Trash hauler Sanitary Services, Inc., sought bankruptcy protection in U.S. Bankruptcy Court in Manchester, Connecticut, the Associated Press reports. City officials complain that SSI failed to do its routine pick up of garbage and missed its routes in West Hartford, Newington, West Haven, Seymour and other communities. Worsening the situation, company insurance payments reportedly lapsed. Mayor Richard Borer said, "Obviously, we are not comfortable with the way the service is being conducted. We do have a contract with them, but we're going to be looking at other options." Other areas have started accepting bids for other trash companies. SSI wants to renegotiate, saying it will drop unprofitable contracts to help restructure its business. SINGING MACHINE: New Shareholders to Consider ESOP & Decrease in Shares ----------------------------------------------------------------------- The annual meeting of the shareholders of The Singing Machine Company, Inc. will be held on September 6, 2000 at 10:00 a.m. in the Marriot Hotel located at Boca Center, 5150 Town Center Circle, Boca Raton, Florida. At the meeting a current report on the activities of the company will be given. The subjects proposed for action at the meeting are the election of directors, to ratify The Singing Machine Company, Inc. Employee Stock Option Plan, to approve an amendment to the company's Articles of Incorporation to decrease the number of authorized shares, and the approval of the company's independent certified public accountants. Should other business properly arise at the meeting it will addressed as well. SIRENA APPAREL: Deadline to Make Decisions About Leases Extended to Sept. 30 ---------------------------------------------------------------------------- By order entered July 31, 2000, by the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, The Sirena Apparel Group, Inc., obtained an extension of its within which to decide whether to assume, assume and assign or reject three remaining unexpired leases of non-residential real property through and including September 30, 2000: (A) The lease entered into by and between the debtor and MMH Venture Covering 900 square feet of commercial space in that certain complex known as 777 NW 72 Avenue, Dade County, Fla. (B) The lease between the debtor and 1411 Trizechahn-Swig, LLC covering the 23rd floor in the building known as 1411 Broadway, New York, NY, as well as certain additional commercial space on the 17th floor of that building. (C) The lease between the debtor and American Industries, Inc. of commercial space in Sonora, Mexico, located on Calzada Constitucion y Guanayato S/N (Altos), San Luis Rio Colorado, Sonora, Mexico. SIZZLER INTERNATIONAL: Shareholders to Elect New Directors at Aug. 30 Meeting ----------------------------------------------------------------------------- Stockholders of Sizzler International, Inc., are invited to attend the annual meeting of stockholders to be held at the Radisson Hotel at 6161 West Centinela Avenue, Culver City, California, on Wednesday, August 30, 2000 at 3:30 p.m. Sizzler stockholders will elect two directors to serve until the 2003 annual meeting of stockholders and until their successors are elected and qualified. VERSATECH GROUP: Canadian Autoparts Maker Blames GM For Bankruptcy ------------------------------------------------------------------ The Toronto Star reports that the Autoparts maker, Versatech Group blames General Motors for its insolvent status as it faces liquidation. The shutdown of GM's Oshawa operations cost Versatech $12.5 million, according to Chairman Ian McDonald. VP and controller John Kyle told The Star that Tarxien, Versatech's Ajax subsidiary pushed the company into bankruptcy. Kyle adds, "Tarxien in Ajax was the main driver behind the operating losses and poor cash flow. We are mainly where we are today because of that." Under the Companies' Creditors Arrangement Act, bankruptcy protection was granted to the subsidiary, which later closed in June losing 300 workers for not finding a buyer. Canadian Auto Workers representative, John Gatens blames GM for squeezing Tarxien to the point where it could no longer operate, the Star added. ********* A list of Meetings, Conferences and seminars appears in each Tuesday's edition of the TCR. Submissions about insolvency-related conferences are encouraged. Bond pricing, appearing in each Friday's edition of the TCR, is provided by DLS Capital Partners in Dallas, Texas. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* 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, Ronald Ladia, Zenar Andal, and Grace Samson, 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 * * *