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/raid1/www/Hosts/bankrupt/TCR_Public/001019.MBX T R O U B L E D C O M P A N Y R E P O R T E R Thursday, October 19, 2000, Vol. 4, No. 205 Headlines AJ CONTRACTING: Case Summary and 20 Largest Unsecured Creditors CLARIDGE HOTEL: Icahn Intends To Submit New Bid by Nov. 13 Deadline DRKOOP.COM: Names Dr. Bruce Hensel As Chief Medical Officer & MAB Chairman EINSTEIN/NOAH: Robert C. Ellis Replaces Manley As Chief Financial Officer INNOVATIVE GAMING: Completes Initial Closing of Merger with Xertain Inc. ELDER-BEERMAN: Will Purchase 23.2% of its Shares at $5.00 Each FEDERATED DEPARTMENT: Moody's Places Credit Ratings on Review for Downgrade FRUIT OF THE LOOM: Rejecting Aircraft Lease, Saving $1.3 Million per Year GENESIS/MULTICARE: Eldercare Ex-Employee Asks Relief From Automatic Stay HARNISCHFEGER INDUSTRIES: Beloit and OCE-USA Agree to Terminate Leases INNOVATIVE CLINICAL: QSF Advisers Discloses 45% Equity Stake INTEGRATED HEALTH: Delaware Court Approves TriAlliance To Handle HQ Sale KCS ENERGY: Announces Success in North Louisiana Drilling Program KITTY HAWK: Bankruptcy Court Approves Company's Disclosure Statement LUBBOCK HOUSING: Fitch Places $9.83MM Refunding Bonds on Rating Watch NATIONAL PICTURE: Uniek Awaits Judge Houston's Okay of Acquisition Deal ORIX FINANCIAL: Moody's Expresses Concerns about Execution Risk OWENS CORNING: Judge Walrath Approves Payment of Prepetition Wages PACIFICARE HEALTH: Promotes Arnold Paulson to Actuarial Services VP PAUL HARRIS: Nasdaq Changes Trading Halt Status Awaiting Further Reports PAUL HARRIS: Women's Apparel Retailer Files For Chapter 11 in Indiana PLANET HOLLYWOOD: Selling Asian Interests to Star East & Leisure Ventures RVP INC.: Case Summary and 20 Largest Unsecured Creditors SAFETY COMPONENTS: Replaces Arthur Andersen with Deloitte & Touche SAFETY-KLEEN: Company Continues to Battle to Keep Pinewood Facility Open SALMON OIL: Case Summary SOLA INTERNATIONAL: Moody's Downgrades Revolver & New Senior Issue to Ba2 STRATOSPHERE CORPORATION: Acquires N. Las Vegas Shopping Center Property SUN HEALTHCARE: Government Obtains Extension to Nov. 1 to File its Claims TRI VALLEY: Co-Op Employees Displeased by Key Employee Retension Plan VENCOR, INC.: Agrees to Lift Stay to Liquidate Wrongful Death Claims VIDEO UPDATE: Video Retailer Retains Keen Realty To Oversee Liquidation WEINER'S STORES: Obtains $35 Million DIP Revolving Credit Agreement ********* AJ CONTRACTING: Case Summary and 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: AJ Contracting Company, Inc. 470 Park Avenue South New York, NY 10016 Chapter 11 Petition Date: October 17, 2000 Court: Southern District of New York Bankruptcy Case No.: 00-14842 Debtor's Counsel: Sherri D. Lydell, Esq. Platzer, Swergold, Karlin, Levine, Goldberg & Jaslow, LLP 150 East 52nd Street New York, New York 10022 (212) 593-3000 Total Assets: $ 6,451,270 Total Debts : $ 11,910,638 20 Largest Unsecured Creditors Federal Insurance Company Roberta Goldstein 15 Mountain View Road Warren, NJ 07061-1615 Bond Claim $ 1,421,543 St. Paul Insurance Company David Hussey 5801 Centennial Way Baltimore, MD 21209 (410) 205-0315 Bond Claim $ 929,966 McDonough Marcus Cohn Tretter Ken Marcus 3 Park Avenue - 31st Floor New York, NY 10016 Attorney Srvices $ 728,817 H. Weiss Equipment Corp. Bob 12 Labriola Court Armonk, NY 10504 (914) 273-440 Fax:(914) 273-4437 Trade $ 600,000 Metro Demolition Contracting Marissa 5514 Grand Avenue Maspeth, NY 11378 (718) 326-8450 Fax:(718) 326-0375 Trade $ 326,591 Commercial Electric 102 Commerce Street Brooklyn, NY 11231 (718) 855-5567 Trade $ 317,2000 Forest Electric Corporation David/Mary Joe Two Penn Plaza New York, NY 10121 (212) 318-1500 Fax:(212) 318-1784 Trade $ 301,855 Rimi Woodcraft Anthony Rizzo 1185 Commerce Avenue Bronx, NY 10462 Trade $ 250,000 Show Motion, Inc. Trade $ 195,000 CIT Vendor Technology, Inc. Lease Financing $ 190,931 Hudson Shatz Painting Co., Inc. Disputed $ 189,640 Medway Construction, Inc. Trade $ 185,521 K & R Electric Co., Inc. Trade $ 170,000 Penguin A/C Corp. Trade $ 167,975 Hartford Fire Insurance Co. Retro Adjustment $ 166,959 Curtis Partition Corp. Trade $ 162,981 Allied Coverage Corp. Insurance Broker $ 145,583 A.D. Winston Corp. Trade $ 138,990 Nordic Interior, Inc. Trade $ 138,663 S.R.G. Construction Trade $ 135,000 CLARIDGE HOTEL: Icahn Intends To Submit New Bid by Nov. 13 Deadline ------------------------------------------------------------------- In the race for the bankrupt Claridge Hotel and Casino Corp., Reuters reports that Carl Icahn will submit its new bid before the Nov. 13 deadline set by the Honorable Judge Wizmur. Icahn's attorney, Ed Weisfelner did not reveal how much Icahn will be offering. "As a consequence of the amount of time that will now expire before anyone can own this casino out of bankruptcy, I understand (GB Holdings) intends to drop the value of its bid," Weisfelner said. Claridge Hotel filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in order to facilitate a financial restructuring. The Claridge Hotel and Casino Corporation is a closely-held public corporation and is the issuer of $85 million of 11-3/4% First Mortgage Notes which are publicly traded on the New York Stock Exchange under the symbol CLAR02. DRKOOP.COM: Names Dr. Bruce Hensel As Chief Medical Officer & MAB Chairman -------------------------------------------------------------------------- Drkoop.com, Inc. (Nasdaq: KOOP), a leading Internet health Network with 1.4 million registered members and provider of Internet-enabled application services for the healthcare industry, announced the appointment of Bruce Hensel, M.D.; F.A.C.E.P., as the chief medical officer and chairman of the drkoop.com Medical Advisory Board. In his expanded role, Dr. Hensel will work closely with the company's senior management team to plan strategic development. As chief medical officer he will oversee the entire content team and is responsible for the validity and quality of all content on the site. Dr. Hensel also will continue in his previous role as chief medical correspondent, providing personal perspective on daily coverage of breaking health news, writing a "Medical Minutes" column, answering user questions in the "Ask Dr. Bruce" column, contributing editorials for the network and assisting on special projects. "We are constantly striving to improve drkoop.com and to differentiate ourselves from the competition," Hensel said. "I see my expanded role as an opportunity to ensure the site remains the most credible source for personal, useful health information and not merely a regurgitation of news you can find anywhere else." Covering a wide-range of specialties, from cardiology and cancer to health care ethics and emergency medicine, the Medical Advisory Board includes leading experts in each specialty. The board is charged with maintaining the high quality of health information, products and services offered through drkoop.com through thorough reviews of all content, offering advice and keeping the best interest of the consumers and businesses in mind. "While the accessibility and privacy of the internet has created new information resources for health care consumers," said Dr. C. Everett Koop, former U.S. Surgeon General and chairman of drkoop.com, "Now more than ever, it is especially important to insure that information is credible, reliable and relevant. Dr. Hensel is one of the best medical journalists in the country, and I am pleased to have him assume these leadership roles." "Dr. Hensel is one of those rare individuals capable of communicating across a wide variety of mediums," said Richard Rosenblatt, CEO of drkoop.com. "Because he is both a physician and a businessman, he offers a unique perspective and understands the needs of consumers, physicians, healthcare providers and business. Dr. Hensel's experience and leadership will play an important part of our strategy going forward." One of only a handful of medical journalists across the country to successfully combine a full-time journalism career with an active medical practice, Dr. Hensel is an Emmy-award-winning medical, health and science journalist for Los Angeles' NBC4's "Channel 4 News" and former medical advisor and chief health contributor for KFWB radio in Los Angeles. Dr. Hensel graduated from UCLA with a Bachelor of Arts degree in political theory, studied journalism at UCLA and Columbia University and attended medical school at Columbia University's College of Physicians and Surgeons. He received his internship and residency training at Wadsworth Veterans Administration Hospital and at UCLA. Board certified in two medical specialties-Internal Medicine and Emergency Medicine-Dr. Hensel serves as co-director of two emergency rooms in Southern California, and is an associate clinical professor of medicine at the University of California Los Angeles (UCLA) where he teaches a course on medicine and the media to fourth year medical students. He also is the chairman of the American Red Cross Medical Advisory Committee for Health Fair Expo in Southern California and serves on the board of directors for the Southern California American Heart Association. The Sept. 25 TCR reported that PricewaterhouseCoopers, LLP resigned as independent accountants for the online health operator effective September 8, 2000. It was known that Drkoop and PwC had several disagreements, like in June, Drkoop disagreed with PwC's assertion of a material weakness, from an 8-K filing. The independent accountants agreed to continue to serve Drkoop through the completion of the filing of the company's third-quarter financial statements. EINSTEIN/NOAH: Robert C. Ellis Replaces Manley As Chief Financial Officer ------------------------------------------------------------------------- Einstein/Noah Bagel Corp. announced the appointment of Robert C. Ellis as interim Chief Financial Officer. Paula E. Manley resigned as Chief Financial Officer to become the Chief Financial Officer of Follett Higher Education Group in Oak Brook, Illinois. "Paula has been a key member of the senior management team and I will miss her leadership and presence. I appreciate the strong contribution she has made over the last several years and wish her and her family well," said Bob Hartnett, Chairman, Chief Executive Officer and President of ENBC. "Rob brings a wealth of experience in financial management, including a wide range of experience in assisting companies as they emerge from the reorganization process. We are extremely pleased to have Rob join our team at this pivotal time in the Company's development," added Hartnett. Ellis has served as an independent financial consultant and previously served with Deloitte and Touche Management Consulting. Einstein/Noah and the Official Committee of Unsecured Creditors appointed in the Company's Chapter 11 case announced, As reported in the Sept. 18 TCR, that they have agreed with respect to all outstanding issues regarding the Company's plan of reorganization. The Committee, which was appointed by the United States Trustee to represent the interests of unsecured creditors of the Company and its subsidiary, Einstein/Noah Bagel Partners, L.P., consists of unsecured creditors holding in excess of $65 million of the Company's 7-1/4% Convertible Subordinated Debentures. The Committee supports the Plan proposed by the Company, although it reserves the right to challenge the distribution under the Plan to Bagel Store Development Funding, LLC. Currently, there are 458 ENBC retail bagel stores in 29 states and the District of Columbia operating under the Einstein Bros.(R) and Noah's New York Bagels(R) brand names. Einstein Bros. and Noah's stores are unique bagel cafes and bakeries featuring fresh-baked bagels, a variety of cream cheese spreads, specialty coffee drinks, soups, sandwiches and salads. INNOVATIVE GAMING: Completes Initial Closing of Merger with Xertain Inc. ------------------------------------------------------------------------ Innovative Gaming Corporation of America (Nasdaq: IGCA) announced that it has completed the initial closing of the merger with Xertain Inc. The general terms of the initial closing include the issuance and a mutual purchase of 14.9% of the respective companies' common stock, the termination of the merger of the Company with nMortgage, and the termination of the sale of the Company's gaming manufacturing assets to Xertain, Inc. The final closing of the merger is anticipated to occur in early 2001 subject to shareholder, regulatory and various governmental agencies approval. Roland Thomas CEO and Chairman of IGCA provided the following comments: "I am very pleased with the progress of the merger process and that this initial and important step has been accomplished in such a short period of time. The Company's present products are experiencing excellent earnings and therefore salability in the markets they are presently offered, and we are currently expanding their presence and entering into further jurisdictions. The upcoming Gaming Expo next week will provide a venue for access to most of our present and potential customers and we will be there in force to feature our present and future product lines and demonstrate the adaptability of our software systems to accomplish our customer's requirements. The Company, through our recent restructuring efforts, has entered into a new process of execution that has been exhibited in the past few weeks through the accomplishment of these processes, as well as in other strategic areas of the company." Xertain is a private Delaware corporation headquartered in Las Vegas, Nevada, with its primary business predicated on gaming related technologies, gaming facility development and international high technology manufacturing. Innovative Gaming Corporation of America, through its wholly-owned operating subsidiary, Innovative Gaming, Inc., develops, manufactures and distributes fast playing, high-entertainment gaming machines. The Company distributes its products both directly to the gaming market and through licensed distributors. ELDER-BEERMAN: Will Purchase 23.2% of its Shares at $5.00 Each -------------------------------------------------------------- The Elder-Beerman Stores Corp. announced the final results of its self- tender offer, which expired at 12:00 midnight, New York City time, on Thursday October 5, 2000. Elder-Beerman commenced the tender offer on September 8, 2000 to purchase up to 3,333,333 shares of its common stock at a price between $4.50 and $6.00 per share, net to the seller in cash, without interest. Based on the final count by the depositary for the tender offer, Elder-Beerman accepted for payment under applicable securities laws 3,462,363 shares, representing approximately 23.2 percent of the outstanding shares, at a purchase price of $5.00 per share. All shares properly tendered at or below $5.00 were accepted for payment, and proration of such shares will not be necessary. Payment for the shares accepted for purchase and return of all other shares tendered but not accepted for payment will occur promptly by the depositary. As a result of completing the tender offer, Elder-Beerman will have approximately 11,437,326 shares of common stock outstanding. The dealer-manager for the tender offer was Wasserstein Perella & Co. The nation's ninth largest independent department store chain, The Elder-Beerman Stores Corp. is headquartered in Dayton, Ohio and operates 62 department stores in Ohio, West Virginia, Indiana, Michigan, Illinois, Kentucky, Wisconsin and Pennsylvania. Elder-Beerman also operates two furniture superstores. Elder-Beerman has announced it will open a new concept store in Jasper, Indiana in November of 2000. FEDERATED DEPARTMENT: Moody's Places Credit Ratings on Review for Downgrade --------------------------------------------------------------------------- Moody's Investors Service placed the long- and short-term ratings of Federated Department Stores, Inc. on review for possible downgrade, reflecting the asset quality and business challenges that it faces in its Fingerhut division. Moody's review will focus on the impact of Fingerhut's challenges on Federated's risk profile, including the plan to resolve Fingerhut's asset quality problems and to operate with tighter credit policies given fierce competition for Fingerhut's traditional consumer base. The review will also assess Federated's financial policy, including its appetite for share repurchases, given the challenges that it faces at Fingerhut and the slower sales growth environment in the department store segment of the retail industry. Ratings on review for possible downgrade: a) Senior bank credit facility and senior unsecured notes at Baa1. b) Senior unsecured shelf at (P)Baa1. c) Preferred stock shelf at (P)"baa2". d) Commercial paper at Prime-2. The August 1999 upgrade of Federated's long-term ratings (senior unsecured to Baa1) assumed the smooth integration of Fingerhut and the realization of strategic benefits from this non-traditional acquisition for over $1.7 billion in cash. The expectation was that Fingerhut would complement Federated's existing retail businesses by providing a platform to enhance catalog and Internet sales. However, Fingerhut had revised its credit terms, resulting in higher than expected delinquencies which are adversely impacting Federated's earnings. Fingerhut subsequently implemented more conservative credit policies, but it will take time to restore asset quality and to regain sales growth given the intense competition that exists to provide credit to Fingerhut's better customers. Federated has announced that it will take a $740 million pre-tax write-down of goodwill and other assets related to the Fingerhut acquisition and operation. Additionally, it has announced a downsizing of Fingerhut's core catalog operations that will ultimately save about $40 million p.a. beginning in 2001. As a consequence of streamlined operations and tighter credit policies, Fingerhut's core catalog sales are being downsized from $1.4 billion for all of 1999 to $850 million to $1 billion for the current fiscal year. The EBIT of the Direct-to-Customer segment is projected between $25 and $100 million in 2001, including the $40 million in overhead expense savings. If Moody's concludes that Federated's plans to resolve the problems at Fingerhut are likely to be successful in a reasonable period of time, its Prime-2 rating could be confirmed, even if the long term ratings are not confirmed. Moody's also noted that Federated continues to maintain a strong position in the department store channel and that this business generates the bulk of total company cash flow. With corporate offices in Cincinnati and New York, Federated Department Stores, Inc. operates more than 400 department stores in 33 states. Its department stores operate under the names Bloomingdale's, Macy's, The Bon Marche, Burdines, Goldsmith's, Lazarus, Rich's and Stern's. Federated also operates a number of direct-to-consumer catalog and electronic commerce businesses including Fingerhut. Federated's net sales in fiscal year 1999 exceeded $17.7 billion. FRUIT OF THE LOOM: Rejecting Aircraft Lease, Saving $1.3 Million per Year ------------------------------------------------------------------------- On June 1, 1996, Fruit of the Loom entered into an aircraft lease agreement with Fifth Third Leasing Company, a unit of Fifth Third Bancorp, Cincinnati, Ohio. The lease is held in a trust with First Security Bank, Salt Lake City Utah, as trustee. Toronto Dominion Bank, Toronto, Canada, as an agent, has made loans to the trust secured by the trust's interest in the aircraft. It is a net lease meaning Fruit of the Loom pays insurance, license fees, and other miscellaneous costs associated with aircraft ownership. According to J. Kate Stickles Esq., from Saul, Ewing, Remick & Saul, Fruit of the Loom proposes to surrender the aircraft to Toronto Dominion Bank, who will then attempt to sell it. The proceeds will be divided between the two parties. Fruit of the Loom will reject the lease the day after the Court authorizes the rejection motion. It will finance the necessary service, repair, overhaul and maintenance to ready the plane for sale and will recoup the expenses once a transaction is complete. The plane is a 1995 Canadair Regional Jet, model CL-600-2B19. The serial number is 7075 and the registration number is N877SE. Annual lease payments amount to $1,292,257. Ms. Stickles argues that rejection of the lease meets the sound exercise of business judgment test with benefits accruing to the estate and creditors. The aircraft demands large monthly payments and concomitant expenses and is not necessary for an effective reorganization. The Debtors present Judge Walsh with a stipulation memorializing the deal crafted by Stuart M. Rozen Esq., of Mayer, Brown & Platt on TD's behalf. (Fruit of the Loom Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900) GENESIS/MULTICARE: Eldercare Ex-Employee Asks Relief From Automatic Stay ------------------------------------------------------------------------ Florence K. McGuire asks the Court to lift the automatic stay in the Genesis Healthcare Ventures, Inc., chapter 11 cases pending before the U.S. Bankruptcy Court in Wilmington to permit her to proceed with her pre- petition claim against Genesis Eldercare d/b/a Rittenhouse Pine Center and GHV, pending before the United States Court of the Eastern District of Pennsylvania, Case No. 99-cv-3629 in connection with alleged unlawful termination of her employment as a Registered Nurse Assessment Coordinator at Rittenhouse Pine Center in violation of the Age Discrimination in Employment Act, 29 U.S.C. section 621, et seq. (ADEA). Ms. McGuire submits that the parties have engaged in extensive discovery and each respective case was close to trial readiness when the Debtors' chapter 11 cases commenced. Md. McGuire is represented in that action by the law firm of Anita Alberts Associates. (Genesis/Multicare Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900) HARNISCHFEGER INDUSTRIES: Beloit and OCE-USA Agree to Terminate Leases ---------------------------------------------------------------------- Beloit Corporation, its Millpro Services division, and Beloit Pulping Group, Inc., are party to four 1997 Equipment Lease Agreements with Oce- USA, Inc. In May 2000, Beloit surrendered possession of the Millpro and Pulping Equipment to Oce. Beloit and Oce present Judge Walsh with a Stipulation for his stamp of approval providing for (i) termination of the Equipment Leases, (ii) modification of the stay to extent necessary to ratify the return of the Equipment to Oce and (iii) an additional 30 days for Oce to amend its $40,008 proofs of claim to account for rejection damages. (Harnischfeger Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 609/392-0900) INNOVATIVE CLINICAL: QSF Advisers Discloses 45% Equity Stake ------------------------------------------------------------ QSF Advisers, Inc. beneficially owns 5,416,740 shares of the common stock of Innovative Clinical Solutions Ltd, constituting 45.14% of the outstanding shares of common stock of the company. QSF holds sole voting and dispositive powers over the stock held. MJ Whitman Advisers, Inc. is the beneficial owner of 24,300 shares of the company's common stock, constituting 0.203% of the outstanding shares of common stock. MJ Whitman Advisers also holds sole voting and dispositive powers over the stock held. MJ Whitman Management, LLC is the beneficial owner of 243,540 shares of Innovative's common stock, or 2.0% of the outstanding common stock of the company, with sole voting and dispositive powers. While Mr Martin J. Whitman holds no shares personally he may be deemed to have beneficial ownership of the shares of the company beneficially owned by EQSF by reason of his control of EQSF. Mr. Whitman disclaims beneficial ownership of such shares for all other purposes. EQSF is an investment adviser registered under the Investment Advisers Act of 1940 and provides investment advisory services to several registered mutual funds. MJW is a registered investment adviser that provides investment advisory services to individuals and institutions. MJWM is the general partner of Agressive Conservative Investment Fund, a hedge fund investment vehicle. Mr. Whitman, a United States citizen, is the Chairman of the Board of EQSF and controls, with his adult children, a majority of the outstanding shares of EQSF common stock. Mr. Whitman is also Chairman of the Board and Chief Executive Officer of Danielson Holding Corporation, a Delaware corporation and an insurance holding company, and M.J. Whitman, Inc., a New York corporation and a registered broker-dealer, both of which have their principal place of business in New York, New York. Mr. David M. Barse is the President and Chief Operating Officer and a director of EQSF, DHC and MJW. Michael Carney is the Treasurer and Chief Financial Officer of EQSF, DHC and MJW. W. James Hall is the Secretary and General Counsel of EQSF, DHC and MJW. The shares reported here were received by the above listed persons and entities under a plan of reorganization in exchange for certain debentures of Innovative Clinical Solutions Ltd. INTEGRATED HEALTH: Delaware Court Approves TriAlliance To Handle HQ Sale ------------------------------------------------------------------------ The Baltimore Sun reports that Integrated Health Services, Inc. obtained court approval to hire a broker to sell half of its campus in Sparks. The funds accumulated from the sale will then be used to help the company reorganize its debts. IHS asks for TriAlliance Commercial Real Estate Services LLC of Towson to sell the property the company bought for $6.2 million. It plans to sell 80 out of 150 acres, which 54 can be developed. Even prior to the Chapter 11 filing in Delaware on February, IHS wanted to sell a part of its property. KCS ENERGY: Announces Success in North Louisiana Drilling Program ----------------------------------------------------------------- KCS Energy, Inc. (NYSE: KCS) announced recent results in its North Louisiana drilling program. As previously reported, the Willamette #1 well, in the Mt. Lebanon Field, Bienville Parish, Louisiana began production in March. Since then, the well has produced a total of 1.6 billion cubic feet (BCF) from two Hosston aged sands and is currently producing 6,500 thousand cubic feet gas per day (MCFGPD). The Company continued its development of the field with the drilling of two KCS operated, 320-acre offsets in the same Hosston interval. Both wells were placed on production in early October. The LA. Minerals #1 (37.5% KCS working interest) is currently producing at a rate of approximately 6,650 MCFGPD and 60 barrels of condensate per day (BCPD) while the Lathan Heirs #1 (23% KCS working interest) is producing 2,740 MCFGPD and 28 BCPD. Additionally, the fourth well drilled in this field this year, the Sutton Hunter #1 (41.4% KCS working interest) has recently been logged. Log analysis indicates similar Hosston zones should be productive in this well. Two additional wells are planned in this area in 2000 to further extend the limits of the productive reservoir. In Bossier Parish, Louisiana, KCS has been active in the Elm Grove Field. Earlier in the year KCS completed two producers. Last week KCS completed and placed on production the McDade #3 Alt well (100% KCS working interest) which is producing approximately 1,700 MCFGPD from a Lower Cotton Valley sandstone interval. KCS plans additional wells in this field in late 2000 or early 2001 as well as several recompletions in its existing wells. Commenting on the North Louisiana drilling program, James W. Christmas, President & CEO noted, "These well results, along with other third quarter drilling success should positively impact fourth quarter production volumes as well as year-end reserve additions. Our operational results continue to confirm the Company's ability to replace reserves and increase value." As reported in the Sept. 26 TCR, the debtors, KCS Energy, Inc., et al. filed a motion to implement an employee retention program for the debtors' employees other than senior management. The hearing on the motion was held before the Honorable Peter J. Walsh, US Bankruptcy Court, Wilmington, DE on September 27, 2000 at 4:00 PM. The Retention Program provides employment continuation incentives for employees who are crucial to the successful operation and reorganization of the debtors' business. The debtors believe it imperative to implement the Retention Program to reduce the risk of losing employees to competitors. Over the last eighteen months, the debtors have experienced an employee turnover of approximately fifty percent and the debtors are currently experiencing a turnover rate of approximately six percent per month. KCS is an independent energy company engaged in the acquisition, exploration, development and production of natural gas and crude oil with operations in the Mid-Continent and Gulf Coast regions. The Company also purchases reserves (priority rights to future delivery of oil and gas) through its Volumetric Production Payment (VPP) program. For more information on KCS Energy, Inc., please visit the Company's web site at http://www.kcsenergy.com KITTY HAWK: Bankruptcy Court Approves Company's Disclosure Statement -------------------------------------------------------------------- Kitty Hawk, Inc. (OTC Bulletin Board: KTTEQ) announced that the Bankruptcy Court presiding in its Chapter 11 Reorganization Case had approved its Disclosure Statement. Creditors should be receiving the Disclosure Statement and other materials during the week of October 16. Tilmon J. Reeves, President and Chief Executive Officer, commented, "This is a major milestone for the Company." Reeves went on to say, "Since filing for Chapter 11 relief this past May, the Company has refocused on its core businesses of scheduled overnight freight service and its Boeing 727 air freight charter contracts, including its U. S. Postal Service and BAX Global contracts. These will be the centerpieces of the Company's business as it exits from Chapter 11. We could not have achieved these remarkable results without the support of our loyal customer base with whom we have worked closely during the past five months. With their continued support and the support of our vendors and other creditors, we expect to emerge from Chapter 11 as a stronger company in about two more months, which is the time the Court needs to approve the Company's Reorganization Plan." Michael Cox of Seabury Group, the Company's financial advisor, noted that Kitty Hawk had made extraordinarily rapid progress to resolve the issues that made the bankruptcy filing necessary and had positioned itself well for the future. Mr. Cox said, "I believe the fact that the Company's principal creditors have agreed to take a substantial percentage of their recovery in stock of reorganized Kitty Hawk is a strong indication of the confidence of the Company's creditors in the Company's future." Kitty Hawk's plan of reorganization provides for payment in full of its bank creditors and distribution of all of the stock of the reorganized Company to Kitty Hawk's unsecured creditors and cancellation of all of the Company's stock issued prior to the Chapter 11 filing. Kitty Hawk expects confirmation of its plan in mid-December and to implement its plan effective January 1, 2001, eight months to the day after its Chapter 11 filing on May 1, 2000. LUBBOCK HOUSING: Fitch Places $9.83MM Refunding Bonds on Rating Watch --------------------------------------------------------------------- Fitch places the $9.83 million Lubbock Housing Finance Corporation multifamily housing revenue refunding bonds, series 1992A on Rating Watch Negative following its annual review. The series 1992A was originally rated 'BBB'. Fitch did not rate the subordinate $2.20 million series 1992B bonds. The transaction is secured by three cross-collateralized and cross- defaulted '80-20' multifamily properties containing 396 units. The transaction closed Dec. 15, 1992. The rating action is due to a significant decline in net cash flow. Fitch's adjusted year-end 1999 debt service coverage ratio (DSCR) is 1.02 times (x) compared to 1.35x as of year-end 1998 and 1.15x at origination. The decrease in the DSCR is attributable to an increase in administrative and operating expenses and a decrease in overall occupancy. The DSCR is based on an 8.89% constant and audited net operating income adjusted to reflect $300 per unit for capital reserves. In Sept. 2000 the property management was changed from Greystar Multifamily Services, LP to Hurt & Stell Multifamily Management Services. Greystar had taken over management duties of the properties in March 1999, from Capstone Realty. Year-to-date 8/31/00 net cash flows provided by the borrower shows an 11% increase over cash flows for the same period in the prior year. Fitch expects to receive year- end 2000 audited financial statements in July 2001, at which time, if no improvement is noted, the series may be downgraded. Additional collateral is represented by a debt service reserve in the amount of $1,007,500 consisting of a $675,000 LOC from US Bank National Association (fka Colorado National Bank) and $332,500 held in a Guaranteed Investment Contract. The debt service reserve is sufficient to fund approximately 13 months of average debt service. The properties, built in 1983, are geared toward Texas Tech University students and young adults/families. Average occupancy of the three properties, which has been consistently higher than the market, has decreased to 93% as of year-end 1999 from 95% and 97% at origination and year-end 1998, respectively. NATIONAL PICTURE: Uniek Awaits Judge Houston's Okay of Acquisition Deal ----------------------------------------------------------------------- Judge David Houston, The Associated Press reports, will issue an order sometime this week on Uniek Inc.'s $19 million acquisition of National Picture & Frame Co. Harbortown Industries Inc. dropped its offer of $19.3 million on a hearing held on Sept. 27 paving way for Uniek to have its bid. Pres. Dennis Gerrard of National said that officials representing Uniek were present during the hearing ready to sign documents. National Picture filed for bankruptcy protection under Chapter 11 in July. Uniek then submitted its letter of intent on Sept. 11 to purchase National for $14.5 million. Waunakee, Wis.-based Uniek sells picture frames, photo albums and craft products. The company has 300 employees. ORIX FINANCIAL: Moody's Expresses Concerns about Execution Risk --------------------------------------------------------------- Moody's Investors Service has revised its rating outlook for ORIX Financial Services, Inc. (OFS, formerly ORIX Credit Alliance, Inc., Senior debt at Baa2) to negative from stable. According to Moody's, OFS's core equipment financing business franchise has come under stress in recent periods. In response, OFS has broadened its strategic focus to include growth within several new business segments, subjecting the company to increased execution risk. Moody's said that OFS maintains a good franchise in its core equipment finance segment, which has historically provided the company with steady results. Additionally, OFS has succeeded in conservatively managing its financial structure, keeping leverage at reasonable levels and maintaining funding diversity. The rating agency notes, however, that competitive pressures are negatively affecting OFS's financial results, resulting in a significant reduction to the company's core financing margin. This reduction may be permanent for OFS's current core business. Additionally, asset quality deterioration at OFS is leading to rising bad debt provisioning, further pressuring the firm's current financial results. In response to these challenges, OFS's management team has elected to develop new business units within the company in order to provide diversification of assets and earnings. Moody's believes this goal is sound, but that the achievement of this goal will provide management with many challenges. These challenges include a very competitive environment in the company's selected markets -- markets where, due to OFS's historic lack of participation, the company does not have a franchise. Additionally, given the substantially different nature of the assets that the company intends to invest in, it will need to establish entirely new front-end sales, credit and pricing disciplines, as well as back-end asset management capabilities. OFS has commenced this process, but this entails considerable execution risk. Moody's has therefore revised the outlook on the company's ratings to negative from stable given the deterioration in the company's core franchise combined with these significant initiatives to extend the company's activities. ORIX Financial Services, Inc. is a subsidiary of ORIX Corporation (Senior at Baa3) of Japan. ORIX Financial Services, Inc., based in Secaucus, NJ, is a commercial finance company, which reported total assets of approximately $3.2 billion at June 30, 2000. OWENS CORNING: Judge Walrath Approves Payment of Prepetition Wages ------------------------------------------------------------------ The Debtors' Employees are vital to daily operations, maintaining positive employee morale is important, and the reorganization effort will fail if the Debtors lose their valuable employees. Faced with the need to issue payroll checks today for wages and salary obligations incurred during the latest two-week period and because certain employees don't promptly cash each paycheck they receive, the Debtors sought and obtained emergency interim order from Judge Walrath authorizing Owens Corning to (A) issue payroll checks today on account of accrued pre-petition wage and salary obligations and (B) move money between their bank accounts as necessary to fund those paychecks. Additionally, Judge Walrath directs each Bank on which a payroll check is drawn to honor all payroll checks. The Debtors believe that no single employee is owed more than $4,000. Nothing in this request, the Debtors make clear and Judge Walrath confirms, contemplates an assumption nor precludes a rejection of any agreement or policy that may be considered an executory contract. (Owens-Corning Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., 609/392- 0900) PACIFICARE HEALTH: Promotes Arnold Paulson to Actuarial Services VP ------------------------------------------------------------------- PacifiCare Health Systems, Inc. (Nasdaq: PHSY), announced the promotion of Arnold Paulson to the position of vice president of Actuarial Services. Paulson will be responsible for developing and implementing PacifiCare's provider contract economic modeling process, producing incurred but not received (IBNR) reserves and related financial reporting, as well as pricing and forecasting PacifiCare's prescription drug products. He will report to Mitch Goodstein, senior vice president, Health Care Economics, PacifiCare Health Plans. "In his ten years with PacifiCare, Arnold has demonstrated outstanding leadership and analytical abilities," said Goodstein. "In his new position, he will lead the organizations responsible for provider network cost and analysis as well as financial reporting, which will enhance our information leverage and efficiency." Paulson began his career with PacifiCare in 1990 as an actuarial analyst in the Corporate Health Data Analysis department and assumed a broad range of actuarial responsibilities including pricing, underwriting, financial reporting, systems development and provider reimbursement. Prior to his promotion to vice president, he served as director and health services actuary in Corporate Health Care Economics where he worked closely with Network Management, Finance and Prescription Solutions, PacifiCare's pharmacy benefit management company. Paulson is an associate of the Society of Actuaries and a member of the American Academy of Actuaries. He received his bachelor's degree in physics from the University of California, Los Angeles. As published in the Oct. 13 TCR, PacifiCare Health expects to report results ranging from a loss of up to $0.10 per share to break-even for the quarter ended September 30, 2000, based on preliminary data showing higher-than-anticipated commercial and Medicare health care costs. These costs reflect the impact of providers operating under non-capitated agreements, and amounts incurred to improve network stability and maintain member continuity of care. For the quarter ended September 30, 1999, the company reported earnings of $1.54 per share. Shared-risk contracting conversions and provider instability are expected to continue at least for the remainder of the year. As a result, earnings per share for 2000 will not meet the company's expectations set forth in its previous public filings. PacifiCare Health Systems is one of the nation's largest managed health care services companies. Primary operations include managed care products for employer groups and Medicare beneficiaries in nine states and Guam, serving approximately 4 million members. Other specialty products and operations include behavioral health services, life and health insurance, dental and vision services, pharmacy benefit management and Medicare+Choice management services. More information on PacifiCare Health Systems can be obtained at http://www.pacificare.com. PAUL HARRIS: Nasdaq Changes Trading Halt Status Awaiting Further Reports ------------------------------------------------------------------------ Upon the filing of women's apparel retailer, Paul Harris Stores, Inc. (Nasdaq: PAUH), Nasdaq Stock Market has changed its shares status to "additional information requested", Dow Jones reports. The exchange halted Paul's shares at 8:30 am Tuesday. Paul Harris is a leading specialty retailer known for its branded private-label women's apparel and accessories. The retailer filed for bankruptcy reorganization under Chapter 11 of the U.S. Bankruptcy Court in Indiana, and arranged for the sale of most of the assets of its wholly owned subsidiary, The J. Peterman Company. PAUL HARRIS: Women's Apparel Retailer Files For Chapter 11 in Indiana --------------------------------------------------------------------- Paul Harris Stores, Inc. (Nasdaq: PAUH), a leading specialty retailer known for its branded private-label women's apparel and accessories, announced it has voluntarily filed for reorganization under Chapter 11 of the United States Bankruptcy Code, and arranged for the sale of most of the assets of its wholly owned subsidiary, The J. Peterman Company. Paul Harris made its Chapter 11 filing in the United States Bankruptcy Court for the Southern District of Indiana. Three of the Company's wholly owned subsidiaries, Paul Harris Retailing, Inc., Paul Harris Merchandising, Inc., and Paul Harris Distributing, Inc. also filed Chapter 11 petitions. LaSalle Bank National Association will provide up to $45 million of debtor in possession financing in connection with the Chapter 11 filing. Glenn Lyon, president and chief executive officer said, "We commenced the Chapter 11 proceeding because of our liquidity problems. However, as a result of the sale of the Peterman assets that yielded an immediate $4.3 million cash infusion and the Chapter 11 financing arranged with LaSalle, we are optimistic that the Company will achieve positive fourth quarter results and put itself in position for a successful reorganization. To accomplish that we will need the continued efforts of our employees and hope to obtain the assistance and patience from our vendors and landlords." Richard R. Hettlinger, senior vice president and chief financial officer, noted that, "This decisive action provides us with the opportunity to return to financial strength. Although several other alternatives were considered, we believe that they would have involved a greater risk to all of our constituencies." J. Peterman sold its Grand Central Station leasehold interest to an affiliate of Kenneth Cole Productions Inc. for $2.0 million and its intellectual property to an affiliate of Schottenstein Bernstein Capital Group LLC for $0.7 million. In addition, it has entered into an Agency Agreement with a joint venture lead by Schottenstein to sell its inventory. Under the Agency Agreement, Peterman received an up-front payment of $1.6 million and expects to receive additional funds after a count of its inventory is completed. Paul Harris announced that James T. Morris resigned from its board of directors. Mr. Lyon said, "We greatly appreciate all that Jim has done for the Company and understand his resignation in light of his many other endeavors." Finally, Paul Harris announced that as part of its cost cutting efforts the Company and two officers, Sally M. Tassani, Executive Vice President, and Paul M. Sobol, Senior Vice President of Real Estate, have severed their employment agreements. Ms. Tassani will continue to serve as a director of the Company. Looking forward, Lyon believes that "Our strong management team is committed to continue building core competencies that better serve our target customers and enhance the profitability of the company. Our objective is to fully regain our consumer franchise, capture greater market share and produce higher sales and margins." PLANET HOLLYWOOD: Selling Asian Interests to Star East & Leisure Ventures ------------------------------------------------------------------------- On October 10, 2000, Planet Hollywood International, Inc., announced it had entered into an agreement to sell its remaining one-third equity interest in Planet Hollywood (Asia) Pte Ltd. to Star East Holdings Limited, a company listed on the Stock Exchange of Hong Kong Limited. On September 29, 2000, the company entered into an agreement with Star East and Leisure Ventures Pte whereby Star East will acquire approximately 66.67% of the equity interest in PHA presently owned by the company and LV in exchange for the issuance of 99,141,104 ordinary shares of Star East, the company and LV each receiving 49,570,552 of those shares. On September 29, 2000, Star East's ordinary shares closed at HK$0.33 per share. The shares will represent approximately 12% of Star East's issued ordinary share capital and will be freely tradeable. In connection with the sale, Star East shall also procure the appointment of a nominee of each of the company and LV to the board of directors of Star East. Completion of the agreement is conditional upon the fulfillment of the following conditions: 1) satisfactory completion of the due diligence investigation of PHA by Star East; 2) satisfactory completion of the due diligence investigation of Star East by the company and LV; and 3) the Stock Exchange of Hong Kong Limited agreeing to grant a listing of and permission to deal in the shares. Currently, PHA is owned equally by the company, LV and a wholly-owned subsidiary of Star East. PHA is principally engaged in investment holding, sub-franchising of theme restaurants and the provision of management services in Asia. Star East, the parent corporation to Magnetic Light Profits Limited, a significant shareholder of the company, is principally engaged in entertainment-related businesses throughout Asia and the Far East, including the franchising of entertainment complexes offering live entertainment and themed cafes, and other merchandising and licensing. RVP INC.: Case Summary and 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: RVP, Inc. 6001 Overland Road Boise, ID 83709 Chapter 11 Petition Date: October 16, 2000 Court: District of Idaho Bankruptcy Case No.: 00-02632 Judge: Terry L. Myers Debtor's Counsel: D. Blair Clark, Esq. Ringert Clark Chartered 455 South Third Street P.O. Box 2773 Boise, ID 83701-2773 (208) 342-4591 Total Assets: $ 1,000,000 Total Debts : $ 1,000,000 20 Largest Unsecured Creditors Internal Revenue Service $ 173,693 Micro Systems $ 116,581 BlueStar $ 87,782 Sales Management Systems $ 64,033 Idaho State Tax Commission $ 54,146 Ziff-Davis Publishing Co. $ 36,681 Computer Software Serv. $ 27,579 Corry Publishing, Inc. $ 15,552 Panasonic Comm. Systems $ 14,167 Telper, Inc. $ 13,002 Next Link $ 12,971 Wells Fargo Bank $ 11,702 NCR Corporation $ 10,388 Rittenhouse $ 8,938 Mainstay Funds $ 7,725 MicroWorks, Inc. $ 7,502 Kowallis-Thueson $ 7,138 TEC America $ 7,101 Boss Communications $ 6,507 Stoel Rieves, LLP $ 6,329 SAFETY COMPONENTS: Replaces Arthur Andersen with Deloitte & Touche ------------------------------------------------------------------ On October 5, 2000, Safety Components International, Inc. engaged Deloitte & Touche, LLP as its independent accountants to audit its consolidated financial statements commencing with its current fiscal year and to prepare the corporate tax returns as required by law. Deloitte's engagement will be effective as of the date of the company's emergence from Chapter 11, which was expected to occur on October 11, 2000. On October 5, 2000, the company notified Arthur Andersen LLP, its present independent accountants, that Arthur Andersen was discharged as the company's independent accountants. Each of the actions were recommended by the Audit Committee and approved by the Board of Directors of Safety Components. The company states that there have been no disagreements between it and Arthur Andersen on any matter of accounting principles or practices or financial statement disclosure during the two fiscal years ended March 25, 2000 and March 27, 1999 and during the subsequent interim period through the date of discharge. The independent accountant's report on the financial statements of the company for the fiscal year ended March 25, 2000 did contain a "going concern" opinion. SAFETY-KLEEN: Company Continues to Battle to Keep Pinewood Facility Open ------------------------------------------------------------------------ On September 22, 2000, The United States Court of Appeals for the Fourth Circuit denied Pinewood's motion for an injunction pending the appeal and granted Pinewood's motion to expedite the appeal. On September 25, 2000 Pinewood filed with DHEC a request for a permit modification increasing landfill capacity and concurrently filed a request for temporary authorization to continue waste disposal at the facility pending a DHEC decision on the requested permit modifications. At midnight on September 25, 2000, Pinewood suspended waste disposal in the landfill pending action by DHEC and/or court decision allowing continued waste disposal. On September 26, 2000, DHEC denied Pinewood's request for temporary authorization for continued waste disposal at its Pinewood landfill. On September 26, 2000, Pinewood petitioned DHEC, pursuant to applicable law, to institute rulemaking proceedings within thirty days to promulgate regulations, in precisely the same form as those promulgated by DHEC in 1995, which would allow utilization of various mechanisms, in lieu of a cash trust fund, to satisfy financial assurance obligations for possible environmental impairment. Under these regulations, owners or operators of hazardous waste facilities would have the following options to satisfy financial assurance for cleanup costs and/or restoration of environmental impairment: trust fund, surety bond, insurance, letter of credit, and corporate guaranty upon satisfying a financial test. If Pinewood does not obtain additional landfill capacity through administrative or legal proceedings or if Pinewood is required to provide financial assurance for possible cleanup costs and/or restoration of environmental impairment in the form of a cash trust fund, the result could have an adverse impact upon the company's financial position. SALMON OIL: Case Summary ------------------------ Debtor: Salmon Oil Company, an Idaho Corporation 500 South Challis Salmon, ID 83467 Chapter 11 Petition Date: October 17, 2000 Court: District of Idaho Bankruptcy Case No.: 00-41753 Judge: Jim D. Pappas Debtor's Counsel: Brent T. Robinson, Esq. Ling, Nielsen & Robinson P.O. Box 396 Rupert, ID 83350-0396 (208) 436-4717 Total Assets: $ 1 Million Above Total Debts : $ 500 Thousand Above SOLA INTERNATIONAL: Moody's Downgrades Revolver & New Senior Issue to Ba2 ------------------------------------------------------------------------- Moody's Investors Service downgraded the senior unsecured rating of Sola International ("Sola") to Ba2 and the bank loan rating to Ba2. The rating action reflects the increasingly competitive environment in which Sola operates, the high dependence of the company's future performance on the uncertain success of new product introductions, the pressure on the company's margins and its currently unfavorable cost structure. The rating action also recognizes the strong share of the company in the eyeglass lens market and the magnitude of the turnaround undertaken by the company. The rating outlook is negative. Further deterioration in free cash flow generation could put pressure on Sola's ratings. This concludes the review for possible downgrade initiated on July 13, 2000. Ratings downgraded: a) $270 million revolving credit maturing in 2001, from Baa3 to Ba2 b) senior unsecured shelf, from (P)Baa3 to (P)Ba2 Sola manufactures and sells eyeglass lenses in North America, Europe and the Asia-Pacific area. In its main market, the US, the company enjoys a strong share of around 25%, but behind Essilor at around 30%. Other companies have market shares of 10% or less. The company has built this market share in large part thanks to an extensive research and development program, which has led to many successful new product introductions. As all participants in the industry, Sola benefits from favorable demographics and the aging of "baby boomers". In spite of the competition from contact lenses and laser surgery, glasses continue to be a principal means to improve vision. However, the increasing use of polycarbonate as raw material for lenses brings significant pressure on the company's results. Polycarbonate is significantly lighter, thinner and shatter-resistant than resin plastic, with only slightly lower vision-enhancing performance. As a result, the use of polycarbonate is rapidly increasing to the detriment of resin plastic. In the last years, Sola did not position itself adequately to take advantage of this shift and its market position has suffered. Also, while Sola is ramping up its capacity in polycarbonate, the lower operating income per eyeglass made in this material means that the shift towards polycarbonate will put pressure on the company's total operating income in the coming years. Sola's performance has also been affected by enhanced competition. The two largest competitors of the company -- Essilor and Hoya -- have been strengthening their position through the purchase of independent laboratories. In the industry, following opticians' orders, labs cut, grind and polish raw lenses which they source from companies such as Sola. Labs that have been purchased by companies such as Essilor and Hoya quickly rebalance their purchases towards their new owners. The currently limited financial flexibility of Sola prevents it from aggressively following its competitors in this strategy. Sola's current turnaround efforts center on introducing successful new products, improving the company's cost structure and improving working capital. In the last years, Sola's extensive research and development has not led to as many successful new products as in the past. Sola is working on improving the process that brings new products to markets. The cost position of the company has deteriorated over the last years, affecting its competitiveness. Sola is undergoing a restructuring which aims at transfering high-volume production to low-cost locations in Brazil, China and Mexico. The company is on track to completing its current plan by the end of the first quarter of calendar year 2001. The company is also attempting to reduce its inventories and accounts receivable. Whether these efforts will be sufficient to improve Sola's cost structure and working capital remains uncertain. Because of deteriorating profitability and rising levels of debt, the company's interest coverage-- as measured by EBIT/interest expenses-- has decreased from 2.49 at the end of the fiscal year ended March 31, 1999 to 2.34 at the end of 12 months ended June 30, 2000. In the meanwhile, debt has increased from $214 million to $247 million, as the company's free cash flow was negative during this period. The company's liquidity is provided by a $300 million revolving credit made up of two tranches. $30 million Tranche A matures on October 31, 2000 and $270 million Tranche B matures on May 31, 2001. The company's current availability under this revolver is of approximately $160 million. While the company's free cash flow has been negative, on-going availability should be sufficient until renegotiation of the credit facility. The company is currently in compliance with its covenants. Sola International Inc. designs, manufactures and distributes a broad range of plastic and glass eyeglass lenses. STRATOSPHERE CORPORATION: Acquires N. Las Vegas Shopping Center Property ------------------------------------------------------------------------ Stratosphere Corporation reports that Stratosphere Leasing LLC, an affiliate of Stratosphere, has acquired the space comprised of the Tower Shops, the 59,000 square foot retail component of Stratosphere, a casino/hotel/entertainment complex located at the north end of the Las Vegas Strip. The complex is centered around the Stratosphere Tower, the tallest freestanding observation tower in the United States. Stratosphere Leasing will assume management and leasing responsibilities for the Tower Shops immediately and has hired the former Tower Shops property manager to provide continuity to the facility's operation. SUN HEALTHCARE: Government Obtains Extension to Nov. 1 to File its Claims ------------------------------------------------------------------------- The Debtors, on the one hand, and the Department of Health and Human Services, the Department of Justice and the Equal Employment Opportunity Commission, on the other hand, have agreed that the last date for these governmental entities to file a proof of claim against any of the Debtors is extended to November 1, 2000 without prejudice to the rights of the parties to agree to further extension. The extension applies to any claims for the benefit of the governmental entities relating in any way to the Medicaid program, including the claims of private persons brought on behalf of the Governmental Entities pursuant to quitam provisions of the False Claims Act, 31 U.S.C. section 3730(b). The extension also applies to any claim brought by the Governmental Entities arising from charge number 220-99-9026. (Sun Healthcare Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 609/392-0900) TRI VALLEY: Co-Op Employees Displeased by Key Employee Retension Plan --------------------------------------------------------------------- Employees of Tri-Valley Co-Op, a California based company that filed Chapter 11 in July, are voicing protest over the announced bonus plan the company is hoping to implement to retain "key employees". Tri-Valley is asking the bankruptcy court to approve a plan to pay $12 million in bonuses to more than 400 top employees of the company. The same employees growers blame for the bankruptcy that has left the co-op more than $400 million in debt. The American GI Forum, the Stanislaus County Department of Employment and Teamsters Union Local 748 will host a conference for displaced workers Wednesday from 10 a.m. to 7 p.m. at the Modesto Centre Plaza. The conference is intended to help workers learn how to deal with creditors, find available health services and learn where to go for job training. (New Generation Research, Inc., 17-Oct-00) VENCOR, INC.: Agrees to Lift Stay to Liquidate Wrongful Death Claims -------------------------------------------------------------------- The Debtors consent to modification of the automatic stay to permit Paul Coumoulos, as Personal Representative of the Estate of Irene Coumoulos to continue prosecution of claims against the Debtors for negligence and wrongful death, for the sole purpose of determining issues of liability and damages, if any, of the Debtors. (Vencor Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 609/392-0900) VIDEO UPDATE: Video Retailer Retains Keen Realty To Oversee Liquidation ----------------------------------------------------------------------- According to a company press release, Video Update, Inc. the Minnesota- based video rental chain, has retained Keen Realty, LLC to organize a bankruptcy auction of the leaseholds on approximately 120 of its retail sites. Keen Realty is a real estate firm specializing in restructuring retail real estate and lease portfolios and selling excess assets. Video Update, Inc. filed for Chapter 11 protection on September 18, 2000. The auction date and time is to be determined. Available to users and investors are leaseholds for approximately 120 retail sites (located in Arizona, Colorado, Georgia, Iowa, Illinois, Indiana, Michigan, Minnesota, Missouri, North Carolina, New Jersey, New Mexico, Nevada, New York, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, Washington and Wisconsin). The store sites range in size from 4,000 square feet to 13,000 square feet. (New Generation Research, Inc., 17-Oct-00) WEINER'S STORES: Obtains $35 Million DIP Revolving Credit Agreement ------------------------------------------------------------------- Weiner's Stores Inc. (OTCBB:WEIR) announced that it has signed a debtor-in- possession revolving credit agreement with a $35.0 million working capital fund, including a $15.0 million sub-facility for the issuance of letters of credit, with its current lender, The CIT Group/Business Credit Inc. This agreement is secured by substantially all of the company's assets. The proceeds may be used solely to fund working capital in the ordinary course of business and for general corporate purposes. The revolving credit agreement requires that the company maintain certain financial covenants and stipulates certain borrowing limitations based on the company's inventory levels. Raymond J. Miller, chairman and chief executive officer, stated, "We are pleased to announce the completion of this agreement, which provides our vendors the assurances needed to continue to ship inventory for our holiday and spring seasons. It was fantastic to see the support from our lender to help us implement the changes we must make in introducing a new product mix to our stores. We look forward to working with them and our vendors to secure the future of the company." The company had previously announced on Oct. 16, 2000, that it had filed for reorganization under Chapter 11 of the federal bankruptcy code and was streamlining operations, including the closure of 44 stores. Further, the company announced the redesign of it merchandising and marketing, scheduled to take place in early 2001. Weiner's is a convenient neighborhood family retailer that offers a complete assortment of branded products for value-conscious consumers. Currently, approximately 3,750 associates are employed at the 141 stores that are operated in Texas, Louisiana, Mississippi, Arkansas and Alabama. ********* Bond pricing, appearing in each Monday's edition of the TCR, is provided by DLS Capital Partners in Dallas, Texas. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency-related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles available from Amazon.com -- go to http://www.amazon.com/exec/obidos/ASIN/189312214X/internetbankrupt-- or through your local bookstore. 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. 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