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/raid1/www/Hosts/bankrupt/TCR_Public/010123.MBX T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, January 23, 2001, Vol. 5, No. 16 Headlines ARMSTRONG HOLDINGS: Employs Womble as Product Liability Counsel ARYAN NATION: Property Auctioned to Pay $6.3 Million Judgment CALIFORNIA POWER: To Close Doors Due to the Power Crisis DRIGGS CORP.: Files for Bankruptcy Protection in Maryland EDWARDS THEATRES: Assumes Entertainment Properties' Leases FRD ACQUISITION: Moody's Downgrades Senior Notes To Caa3 FRUIT OF THE LOOM: Requests Extension of Rule 9027 Removal Period HIT OR MISS: Walking Away from 10 More Burdensome Leases ICG COMMUNICATIONS: Existing Cash Management System Maintained INTRENET INC.: Files for Chapter 11 Protection in Ohio LERNOUT & HAUSPIE: Noteholders Move to Appoint an Examiner LERNOUT & HAUSPIE: AllVoice Can Proceed with Patent Litigation LETSBUYIT.COM: Trustees Slam Management LOEWEN GROUP: GE Capital Presses for Decision on Leases LTV CORPORATION: Seeks Okay to Pay Critical Vendors & Suppliers MASTER GRAPHICS: Stephenson Asset Sale Hearing Set for Thursday MONEY'S FINANCIAL: Committee Taps Glass & Assoc. as Consultant OPTICARE HEALTH: Shareholders Extend Secured Bridge Financing OWENS CORNING: Enters into New Contract with Elk Corporation PACIFIC GAS: S&P Lowers Related Issues to CC PACIFIC GAS: Lenders Treat Utility Like a "Deadbeat Borrower" PACIFIC GAS: Responds to Action by California Attorney General PACIFIC GATEWAY: Wins Interim Okay to Borrow Under DIP Loan SABRATEK CORP: Wants Exclusivity Extension through Jan. 29 SOUTHERN CALIFORNIA: Green Power Suppliers to Suspend Service STELLEX TECHNOLOGIES: Court to Review Exclusivity on Thursday SUN HEALTHCARE: Rejects Certain Equipment Leases TEAR DROP: Creditors to Convene for 341 Meeting on Feb. 2 TRI-VALLEY: Plan Calls for Break-Up Among Four Buyers VENCOR INC.: Selects Cyberview to Enhance Level of Data Analysis VISION METALS: Hires PricewaterhouseCoopers as Financial Advisors VISION METALS: Committee Selects Lowenstein Sandler as Counsel WHEELING-PITTSBURGH: Bluestone Wants Supply Contract Decision Now ********* ARMSTRONG HOLDINGS: Employs Womble as Product Liability Counsel --------------------------------------------------------------- Armstrong Holdings, Inc., and its debtor-affiliates ask Judge Farnan for an Order authorizing their employment of the law firm of Womble, Carlyle, Sandridge & Rice PLLC of Winston-Salem, North Carolina, as special counsel for business law and non-products liability litigation. The Debtors wish to employ the firm to provide services relating to: (a) Antitrust and trade regulation litigation, advice and compliance; (b) Environmental litigation, advice and compliance; (c) Creditors' rights; (d) Distribution, marketing and advertising litigation, advice and compliance; (e) Prosecution, registration, licensing, litigation,, and advice regarding patents, trademarks, copyrights, trade secrets and other intellectual property; (f) Employment litigation, advice and compliance; (g) Litigation of all manner and kind, other than that pertaining to asbestos and other product liability claims; (h) Contract negotiation, drafting and advice of all manner and kind, other than employment contracts and collective bargaining agreements; and (i) Preparing for, attending and participating in meetings, and appearing before the Court, as may be requested by the Debtors and their bankruptcy counsel. Mark N. Poovey, Esq., a member of the firm, assures the Court that the firm neither holds nor represents any interest adverse to these bankruptcy estates or the Debtors in the matters for which approval of employment is sought. However, Mr. Poovey discloses that the firm has provided services to certain creditors, underwriters, and lenders to the Debtors. Specifically, the firm has represented AT&T, Air Products & Chemicals, American Express, Bank One, Bank of America, Bayer Corporation, Chase Manhattan Bank, Deutsche Bank AG, Farm Bureau Life Insurance Company, and others, but not in any matters connected with or relating to the administration of these Chapter 11 cases. In the year before the Petition Date, the Debtors paid Womble Carlyle $3,255,131.34 for fees and costs. In anticipation of these filings, the Debtors also paid the firm $207,277 to cover the period between November 15 and the Petition Date. In the event that, after application of the fees and expenses earned prior to the Petition Date, any balance remains it will either be refunded or retained against post-petition services if the Application for employment is granted. Womble Carlyle's current customary hourly rates, while subject to change from time to time, are $200 to $425 for partners, $115 to $225 for associates, and $55 to $115 for paraprofessionals. Because of its long-standing relationship with the Debtors, the firm discounts its customary hourly rates to the Debtors by fifteen percent for Mark N. Poovey and ten percent for other professionals. (Armstrong Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900) ARYAN NATION: Property Auctioned to Pay $6.3 Million Judgment ------------------------------------------------------------- The successful bidder for the Aryan Nation's property next month will get more than the 20-acre neo-Nazi compound, according to the Associated Press. The compound, located in Coeur D'Alene, Idaho, and all its contents will be sold to one bidder at the Feb. 13 auction. The property will be sold by chapter 7 trustee and past ABI president Ford Elsaesser and is listed on the joint ABI/National Association of Bankruptcy Trustees web site, bankruptcysales.com. The deal includes Nazi paraphernalia that represents the life work of Aryan Nation's founder Richard Butler, who lost a $6.3 million civil lawsuit last year and must sell the compound to pay part of his bankruptcy judgment. The buyer will also get the rights to the names "Aryan Nation" and "Church of Jesus Christ Christian." Butler filed for bankruptcy protection on Oct. 30. (ABI World, January 19, 2001) CALIFORNIA POWER: To Close Doors Due to the Power Crisis ----------------------------------------------------- Late last week The California Power Exchange announced it will close its doors as a result of the California power crisis. CalPX, Reuters relates, ran the market that allowed the state's investor owned utilities to buy electricity and is the first casualty of an electricity price crisis that has spiraled out of control. "Today, CalPX finds itself immersed in a situation not of our making. The damage the markets have suffered has caused us to no longer be able to deliver the services we so well performed," CalPX said. CalPX was launched in March 1998 under California's trailblazing deregulation legislation, Nigel Hunt, writing for Reuters explains. It was designed to bring more openness to electricity trading, which has traditionally been conducted out of public view. "While we begin the orderly transition out of this market, CalPX remains proud of the light it has shed on an industry that had been previously regulated in virtual secrecy for over 125 years," said President and Chief Executive Officer George Sladoje. But as the state's free market experiment started to fall apart, the exchange face considerable criticism from federal regulators who believed that utilities purchased too much of their power though CalPX's day-ahead market and should instead be signing long-term deals with producers, Reuters says. DRIGGS CORP.: Files for Bankruptcy Protection in Maryland --------------------------------------------------------- The contractor building a seven-mile section of the Chesapeake Expressway in Virginia filed for protection from creditors in bankruptcy court, but that should not delay the long-awaited project's completion, the contractor and city said. The contractor -- The Driggs Corp. -- said work on the project will continue and the road should be finished this summer, according to the Associated Press. In the past few months, Driggs fell behind on payments to its subcontractors, forcing it to file for bankruptcy reorganization in Maryland, said attorney Lawrence Coppel. Coppel said the company's bonding agent has agreed to advance Driggs the money it needs to pay its subcontractors and to continue work. "No one should see any interruption in their work or in the payment of suppliers and subcontractors as a result of this case," said Coppel. Driggs will present its plan in bankruptcy court today in Greenbelt, Md. City officials said they would monitor the bankruptcy proceedings. Patricia C. Biegler, director of the Public Works Department, said she didn't believe the chapter 11 filing would have any impact on the Route 168 project. (ABI World, January 19, 2001) EDWARDS THEATRES: Assumes Entertainment Properties' Leases ---------------------------------------------------------- Entertainment Properties Trust (NYSE:EPR) announced that the United States Bankruptcy Court for the Central District of California, Santa Ana Division granted the motion for the assumption of the Aliso Viejo, Calif., and Boise, Idaho, megaplex theatres on January 18, 2001. The megaplex theatres, located in Aliso Viejo, Calif., and Boise, Idaho, were purchased by EPR in a 1998 sale/leaseback transaction with Edwards Theatres. Both theatres were ranked in the top 75 highest-grossing theatres in the United States for the year 2000. "We are pleased to announce final resolution of this matter consistent with our expectations. This resolution reflects the strength of the financial performance and cross default characteristics of which we have spoken," said David Brain, CEO of Entertainment Properties Trust. Edwards Theatres filed for protection under Chapter 11 bankruptcy on August 23, 2000. All rents due to EPR under the terms of the leases have been paid throughout the bankruptcy proceedings. Since becoming publicly traded in November of 1997, EPR has acquired more than $500 million in theatre and related properties throughout the United States which are operated by such first-run movie exhibitors as AMC Entertainment, Loews Cineplex Entertainment, Muvico Entertainment, Edwards Theatres and Consolidated Theatres. Entertainment Properties Trust is a specialty finance company organized as a real estate investment trust (REIT) whose principal business strategy is to acquire and develop a diversified portfolio of high-quality properties leased to major entertainment-related business operators. The Company's common shares of beneficial interest are traded on the New York Stock Exchange under the ticker symbol EPR. FRD ACQUISITION: Moody's Downgrades Senior Notes To Caa3 -------------------------------------------------------- Moody's Investors service lowered the rating on the $156.9 million 12.5% senior unsecured notes of FRD Acquisition Co., due 2004, to Caa3 from Caa1. The company is a wholly-owned subsidiary of Advantica Restaurant Group, Inc. Moodys' also confirmed the ratings of Advantica Restaurant Group, Inc. as follows: (a) the rating of the $200.0 million bank revolving credit facility due 2008 at B1; (b) the rating of the $529.6 million 11.25% senior unsecured notes, due 2008 at B3; (c) the senior implied rating at B2; and (d) the issuer rating at B3. The outlook was revised to negative. Moody's said the rating action was prompted by the decision to delay the scheduled $9.8 million interest payment on FRD's senior unsecured notes, continued poor operating performance at Coco's and Carrow's (the two concepts that comprise FRD), and Advantica's assumption of the (unrated) FRD $70 million credit facility. Advantica, as guarantor of the FRD credit facility, repaid the banks that granted the credit facility and became the senior secured lender on January 8, 2001. However, Advantica does not guarantee FRD's senior unsecured notes or other obligations. According to Moody's, in a default scenario, Advantica likely would achieve full recovery from the secured credit facility owed by FRD, but the senior unsecured noteholders of FRD would suffer a material loss. Moody's ratings on the FRD senior notes reflect: (a) the probability that the company may default by not making the interest payment within the 30 day grace period; (b) the unresolved operating problems at Coco's and Carrow's; and (c) the loss likely to occur as part of the reorganization process. Advantica's ratings are supported by the modest operating improvements at Denny's, Denny's name recognition and geographic diversity, and the belief that Advantica has no contingent responsibility for FRD's obligations. The B1 bank facility rating incorporates the security of the company's cash, accounts receivable, intangible assets, and equity stakes and guarantees of Advantica's subsidiaries. The B3 rating on the senior unsecured notes (due 2008) considers that these are structurally subordinate to significant amounts of senior secured debt including the bank facility. The Caa3 rating on the senior notes (due 2004) issued by FRD considers that, while these are guaranteed by FRD's operating subsidiaries, Advantica does not guarantee these notes, FRD has $70 million of senior secured debt, and the default loss is likely to be substantial, Moody's report. With the negative outlook, Moody's states that ratings could decline over the intermediate term if Denny's does not continue making progress or if Advantica does not fully recover the FRD credit facility in a timely manner. After assuming the FRD loan, Moody's estimates that Advantica currently has at least $50 million remaining available on the revolving credit facility. Assuming complete recovery of the $70 million loan to FRD, Moody's believes that Advantica has adequate liquidity resources over the longer term to accommodate normal working capital fluctuation and to continue the remodel program at Denny's. However, write-off of a significant portion of the FRD loan (in addition to the expected charge-off of accrued management fees payable) would restrict Advantica's flexibility in developing the Denny's concept. The performance of Coco's and Carrow's has consistently decline over the past three years despite attempts to improve service, modify the menu, and lightly remodel stores. This was measured in terms of margins and comparable store sales. For the twelve months ending September 2000, adjusted debt to EBITDAR for FRD equaled 6.6 times. EBITDA covered interest expense 1.5 times but was not sufficient to also cover capital expenditures. FRD had $1 million in cash and revolving credit availability of $12 million. Moody's expect that reorganization value for FRD will be reduced because of Coco's and Carrow's unresolved operating problems and the necessity to revamp the entire store base. Advantica Restaurant Group, Inc, headquartered in Spartanburg, South Carolina, operates or franchises 1816 Denny's restaurants and, through its FRD Acquisition Co. subsidiary, 480 Coco's and 144 Carrow's restaurants. FRUIT OF THE LOOM: Requests Extension of Rule 9027 Removal Period ----------------------------------------------------------------- Before the petition date, Fruit of the Loom, Ltd. was party to numerous civil actions pending in multiple fora. These lawsuits assert a wide variety of claims. At the Debtors' behest, Judge Walsh granted Fruit of the Loom a third extension of the deadline by which it must decide whether it wants to transfer those lawsuits to the District of Delaware for continued litigation. The new deadline advances the time to file removal notices 270 days through and including the later of September 17, 2001 or thirty days after the entry of an order terminating the automatic stay with respect to the particular civil action sought to be removed. Kate Stickles Esq., says Fruit of the Loom must evaluate many issues in determining whether to request removal of any particular prepetition action. At this juncture, Fruit of the Loom has not had ample time to determine which prepetition actions it will seek to remove. Rather, management has been occupied with bankruptcy related matters, including business stabilization and the formulation of a long-term business plan. It is presently engaged in the difficult task of formulating and negotiating a plan of reorganization. Ms. Stickles reminds the Court that the exclusivity period gives Fruit of the Loom until March 31, 2001, to file the plan. Assuming that a plan is filed on or before that date, the confirmation process is likely to take some time, considering the wide dispersal of Fruit of the Loom's creditors, including its holders of public debt. Without the requested extension, Fruit of the Loom says it may be forced to make removal decisions prematurely. The extension ensures that Fruit of the Loom has the time needed to make fully informed decisions concerning removal of prepetition actions and that management does not forfeit valuable rights under 28 U.S.C. Section 1452. Ms. Stickles relies on Pacor Inc., v. Higgins, 743 F. 2d 984, 996 n.17 (3rd Cir. 1984), which held that under Bankruptcy Rule 9006(b), "it is clear that the court may grant such an extension of time to remove." (Fruit of the Loom Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 609/392-0900) HIT OR MISS: Walking Away from 10 More Burdensome Leases -------------------------------------------------------- Hit or Miss, Inc. seeks court authority to reject certain unexpired leases of nonresidential real property. A hearing will be held on January 29, 2001 at 10:00 AM before the Honorable Novalyn L. Winfield, U.S. Bankruptcy Court, Newark, NJ To date, the Debtor has rejected 59 real property leases. The debtor now seeks to reject ten additional commercial real property leases and to surrender possession of the stores relating to the leases by January 31, 2001. The properties are located in New York, Illinois, Massachusetts, Virginia, Pennsylvania, Mississippi, Texas and Michigan. ICG COMMUNICATIONS: Existing Cash Management System Maintained -------------------------------------------------------------- ICG Communications, Inc. presented a Motion to the Bankruptcy Court seeking authority to maintain and continue using the Debtors' existing bank accounts, business forms, and cash management system, and granting superpriority claim status to all postpetition intercompany claims. The United States Trustee has established operating guidelines for debtors-in- possession who continue to operate their businesses. These guidelines require Chapter 11 debtors-in-possession to, among other things, close all existing pre-petition bank accounts and open new, post- petition bank accounts. This requirement is designed to provide a clear line of demarcation between pre-petition and post-petition transactions and operations, and to help prevent an inadvertent post-petition payment of a pre-petition claim by preventing banks from honoring checks drawn prior to the filing of the petition. Before the Petition Date, the Debtors, in the ordinary course of their business, maintained a variety of bank accounts including, but not limited to, payroll accounts, concentration accounts, and operating accounts. To guard against improper transfers resulting from the post- petition honoring of pre-petition checks, the Debtors propose that, with limited court-approved exceptions, the banks named not honor any checks drawn on these accounts prior to the commencement of the case. The Debtors also asked that these accounts be deemed debtor-in-possession accounts, and that the Debtors be authorized to continue use of these accounts without the appellation of "Debtor in Possession". To minimize the expenses to these estates, the Debtors also asked that they be authorized to continue to use all correspondence, business forms, including letterhead, purchase orders and invoices, and checks existing immediately prior to the Petition Date without reference to the Debtors' status as debtors-in- possession. The Debtors urged that parties doing business with them would undoubtedly be aware, as a result of the size of these cases, of the Debtors' bankruptcy status. Changing correspondence and business forms would therefore be unnecessary, burdensome to the Debtors' estates, expensive, and disruptive to business operations. Finally, the Debtors asked for authority to continue to use their cash management system for all its business operations. Requiring the Debtors to adopt a new cash management system at this critical stage of these cases would be expensive, create unnecessary administrative problems, and be much more disruptive than productive. The practices employed by the Debtors in administering the cash management system constitute ordinary, usual and essential business practices. Funds move quickly and efficiently, ensuring their availability. To avoid a disruption in the ordinary and usual conduct of the Debtors' financial affairs and cash management, the Debtors argued that it was essential that they be permitted to continue these practices, and the requested relief was granted. Upon consideration of this Motion, the Bankruptcy Court authorized the Debtors to continue to use their existing cash management system and continue to engage in intercompany transactions; provided, however, that the Debtors were ordered to maintain strict records of all transfers so that all transactions, including, but not limited to,, intercompany transactions, may be readily ascertained, traced and recorded properly on applicable accounts. The Court further authorized the Debtors to use their existing bank accounts, and directed the banks at which these accounts were located to continue to service and administer the accounts of the respective Debtor as a debtor- in-possession without interruption and in the usual and ordinary course. The Court further ordered that all intercompany claims between and among the Debtors arising after the Petition Date were accorded priority over any and all administrative expenses, subject and subordinate to the priorities, liens, claims and security interests granted under the DIP Facility or any order authorizing adequate protection to the prepetition secured lenders to the Services Debtors. (ICG Communications Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392- 0900) INTRENET INC.: Files for Chapter 11 Protection in Ohio ------------------------------------------------------ Intrenet Inc. filed for chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Ohio. The company's operating subsidiaries, Advanced Distribution Systems Inc., Eck Miller Transportation Corp., Roadrunner Trucking Inc., INET Logistics Inc., and Roadrunner Distribution Services Inc. also filed separate chapter 11 petitions. "The filing of the chapter 11 petition was a necessary and expected step," said Thomas J. Noonan Jr., chairman of the board, president and chief executive officer. The Milford, Ohio-based company has reached an agreement with The Huntington National Bank, the lender under Intrenet's existing working capital credit facility, for limited use of cash collateral to fund the liquidation. (ABI World, January 19, 2001) LERNOUT & HAUSPIE: Noteholders Move to Appoint an Examiner ---------------------------------------------------------- Conseco Capital Management, Inc., Magten Asset Management Corporation, and Freen & Smith Investment Management LLC, holders of Dictaphone Corporation 11-3/4% Senior Subordinated Notes due 2005, represented by Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Calwalader, Wickersham & Taft in New York, move for an Order appointing an examiner in the Dictaphone Chapter 11 case with expanded powers to investigate and report as to: (a) The validity and enforceability of any intercompany claims or guarantees of affiliates' indebtedness or obligations to third parties, and any defenses thereto, including by way of offset, counterclaim, or equitable subordination; (b) The existence of claims of Dictaphone and its creditors, including holders of publicly traded securities of Dictaphone, for damages against L&H, its affiliates and third parties based upon, related to, or arising out of fraud, misrepresentation, concealment, mismanagement, breach of duty, or otherwise; (c) The advisability and feasibility of having a separate plan of reorganization for Dictaphone, including a possible sale of the company as a going concern; (d) The advisability and appropriateness of appointing a Chapter 11 trustee in the Dictaphone case; (e) Whether and if so, to what extent and in what manner, the Dictaphone estate should be represented in any foreign proceedings concerning L&H or its affiliates; and (f) Such other matters as the Court may deem appropriate. The moving creditors tell Judge Judith Wizmur that in April 2000 Dictaphone was an independent, financially stable company. It was purchased by Lernout & Hauspie Speech Products N.V. in May, 2000, and less than six months later Dictaphone finds itself in Chapter 11. L&H, which, the Committee noted, had been touted as the "Microsoft of Europe", faces a wave of lawsuits and regulatory actions and investigations based on alleged fraud and accounting irregularities. The movants assert that, in the wake of these actions, L&H seized upon its recently-acquired United States subsidiaries, such as Dictaphone, and their valuable assets as a means by which to seek relief in the Bankruptcy Court and to fund L&H's crippled operations. Before any further damage is done to the Dictaphone estate, the moving parties seek the appointment of an examiner to investigate and pursue the various claims that Dictaphone and its creditors may have against L&H. Since the commencement of these Chapter 11 cases, Dictaphone's creditors have been barraged with disclosures relating to allegations of fraud, accounting irregularities, conspiracies to inflate revenues, and recalcitrance by L&H management to provide relevant information. Despite the bankruptcy philosophy that Chapter 11 should be a "transparent" process, creditors' main sources of information in these cases has been newspaper reports, from which reports have emerged that a law firm and accounting firm hired by L&H determined that L&H may have engaged in fraudulent practices, that L&H improperly recognized income from start-up companies which resulted in a gross inflation of the company's results, and that hundreds of millions of dollars have "disappeared" into L&H subsidiaries around the world. Because of what the moving parties claimed was L&H's attempts to consolidate the assets of these estates, and the appointment of a single creditors' committee which the moving parties say is heavily weighted in favor of L&H creditors, and the joint administration of these cases, Dictaphone creditors have been left with no effective official representation in these proceedings. Without the appointment of an independent fiduciary to safeguard Dictaphone's interests, valuable claims and rights may be lost. The moving parties also direct the Court's attention to what they characterized as "L&H's tangled web of allegedly disappearing money, accounting irregularities, purported upstream guarantees and transfers between affiliates", which the moving parties claim characterize almost all of the bases upon which courts have appointed examiners. The moving parties further alleged that from the onset of these cases L&H's counsel and financial advisors are inherently conflicted on the major issues in these cases and cannot adequately investigate the intercompany relationships involving in these proceedings. Further, the composition of the Official Creditors' Committee, which includes six creditors with direct claims against L&H and indirect claims against Dictaphone, is said by the movants to make investigation of the intercompany issues by the Committee unlikely, as these very same creditors are beneficiaries of those intercompany obligations. Finally, the movants stated that the companies themselves have refused to give the movants the most basic information about the intercompany relationships, thus precluding the movants from performing their own investigation. The movants concluded that without an impartial, court-appointed fiduciary to investigate these issues, L&H's continued secrecy will irreparably harm Dictaphone's creditors. (L&H/Dictaphone Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900) LERNOUT & HAUSPIE: AllVoice Can Proceed with Patent Litigation -------------------------------------------------------------- A British software maker won the right to proceed against troubled Belgian technology company Lernout & Hauspie Speech Products NV (L&H) with U.S. patent infringement litigation involving a leading L&H product, according to Reuters. U.S. Bankruptcy Judge Judith Wizmur agreed that AllVoice Computing PLC should be able to seek a preliminary injunction to stop L&H from selling a voice recognition software product called NaturallySpeaking. AllVoice attorneys said the judge granted the British company relief from an automatic bankruptcy court stay that had prevented it from pushing ahead with two patent-infringement lawsuits in Massachusetts, one in a U.S. district court and another at the First U.S. Circuit Court of Appeals. Both lawsuits have been filed and a federal judge has denied AllVoice's request for an injunction in the case now at the appellate level. Wizmur's decision came as a blow to L&H attorneys who had advised the judge that NaturallySpeaking was a mainstay of L&H's stable of products worth $50 million in annual revenues and would affect the bankruptcy court reorganization if subject to injunction. (ABI World, January 19, 2001) LETSBUYIT.COM: Trustees Slam Management --------------------------------------- Stricken Internet retailer LetsBuyIt.com virtually vanished from the stock market on Thursday as management said it would fight bankruptcy and trustees described the firm's administration as "deplorable," according to a Reuters report. A statement from legal firm Van Doorne, appointed as trustees for LetsBuyIt.com debt moratorium, said LetsBuyIt would oppose Van Doorne's own application for LetsBuyIt's bankruptcy. "The present management still sees chances for survival and has indicated it will put forward a defense," Van Doorne said. The trustees also released a report on the management of the UK- based company, branding it "deplorable" and "a chaos," and citing board-level bickering as one key factor behind the company's troubles. If Letsbuyit is declared bankrupt, it will leave a string of high-profile creditors empty-handed. Van Doorne said Letsbuyit's largest creditor was U.S. technology support company Sykes, owed a total of 7.5 million euros. Other major creditors include Hewlett Packard, Icon Media and WinEasy, as well as several marketing and hardware companies. (ABI World, January 19, 2001) LOEWEN GROUP: GE Capital Presses for Decision on Leases ------------------------------------------------------- GE Capital Modular Space, a division of Transport International Pool, Inc. asks the Court to compel The Loewen Group, Inc. to assume or reject certain unexpired Master Lease Agreements between the Debtors and GE Capital and to pay all past due and future post-petition payments to GE Capital until the Leases are assumed or rejected. GE tells the Court that, pre-petition, the Debtors leased Equipment from GE Capital pursuant to certain leases between the parties. After the commencement of the chapter 11 cases, GE Capital has not received rental payments due under the Leases from the Debtors for various time periods. In GE's estimate, there is currently due and owing to GE Capital a total of $80,195 under the Leases. GE Capital is informed and believes that the Debtors are using the Equipment in the operation of its business. (Loewen Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 609/392-0900) LTV CORPORATION: Seeks Okay to Pay Critical Vendors & Suppliers --------------------------------------------------------------- The LTV Corporation sought and obtained Judge Bodoh's authorization to pay the prepetition claims of certain critical vendors and service providers. These claims are: * Processor and Warehouse Claims approximating $8,500,000. In connection with the day-to-day operation of their businesses, the Debtors rely on certain outside processors and converters that (a) receive work in process from the Debtors, (b) perform processing necessary to finish the Debtors' products to the Debtors' specifications, and (c) in some cases, ship the processed materials or finished products to the Debtors or their customers. The Debtors also store both finished products and raw materials, work in process, and supplies used in the Debtors' manufacturing operations at a variety of third-party warehouse facilities which typically are located near the Debtors' manufacturing facilities or at key distribution points for customer deliveries. As a result, the processors and warehouses have possession of the Debtors' materials or products in the ordinary course of their businesses. As of the Petition Date, many of the processors and warehouses had claims for goods and services previously provided to the Debtors. * Shipping Claims approximating $16,000,000. In connection with the operation of their businesses, the Debtors also rely on certain shippers, including trucking companies, railroads, and barge operators to transport materials and work in process among the Debtors' manufacturing facilities and to complete the delivery of finished goods to the Debtors' customers. On the Petition Date, certain of the shippers had outstanding claims for services previously provided to the Debtors. Shipments are made typically on a "just in time" basis, so disruptions from any delay would have an immediate and adverse effect on the Debtors' businesses. * Regulatory Compliance Claims approximating $2,000,000. In the ordinary course of their businesses, the Debtors rely on a number of service providers to assist the Debtors in complying with environmental and other governmental laws and regulations. For example, the Debtors employ certain hazardous waste disposal companies that remove a variety of hazardous substances from the Debtors' facilities for proper disposal. AS of the Petition Date, certain regulatory compliance vendors had outstanding claims for services previously provided to the Debtors. If these claims are not paid, certain of these vendors may refuse to perform postpetition services for the Debtors, or may delay performance for a period of time. Any disruption in the availability of the regulatory compliance vendors' services could result in the Debtors' noncompliance with government regulations, leaving the Debtors subject to injunctive relief, fines and penalties. * Small Business Claims approximating $2,000,000. The Debtors utilize a number of small, local businesses in their day- to-day operations to perform essential specialized maintenance, operational and manufacturing services at certain of the Debtors' manufacturing facilities. For example, the Debtors employ small business vendors to maintain and service special-purpose steel mill equipment and other specialized equipment at the Debtors' facilities. As of the Petition Date, certain small-business vendors had outstanding claims for prepetition goods and services provided to the Debtors. Because of the specialized nature of the services provided by the small business vendors and the invaluable expertise and institutional knowledge developed by these entities over time, the Debtors have no readily available substitute vendors to provide these services. Moreover, because many of the small business vendors work primarily or exclusively for the Debtors, the Debtors believe that these small business vendors could not absorb losses resulting from the Debtors' failure to pay outstanding small business claims on ordinary business terms. Any delay in paying these claims could force these small business vendors into bankruptcy or out of business, eliminating the Debtors' sources for certain key services and jeopardizing the Debtors' ability to maintain operations and reorganize successfully. * Singe Source Vendor Claims approximating $5,000,000. Certain essential raw materials, supplies, and other goods and services required to manufacture the Debtors' products are available only from a single supplier. Because the Debtors do not have any viable alternatives to obtain substitute goods or services from other suppliers, the Debtors have determined that they must be able to satisfy the prepetition claims of the single source vendors to ensure that these essential single source goods will continue to be available without interruption. For example, certain single source vendors provide steel, aluminum and copper rods with particular characteristics or of a particular composition that are essential to the Debtors' metal fabrication business segment and cannot be obtained elsewhere. Similarly, other single source vendors supply the Debtors with unique or specially-processed products or services - including molded, coated or processed steel and specialty paints - that are made or provided to the Debtors' exact specifications. In some instances, substitute goods from other potential suppliers technically are available, but these alternative suppliers cannot provide the single source goods that meet the Debtors' requirements for quality, quantity or reliability - or cannot ensure availability on a cost-efficient and timely basis in he appropriate geographic areas - particularly where such goods must be provided without delay to meet "just in time" schedules. The Debtors also requested and obtained an order from Judge Bodoh authorizing its banks to receive, process, honor and pay checks issued on all of the Debtors' accounts to pay these critical vendors claims. LTV Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-00900) MASTER GRAPHICS: Stephenson Asset Sale Hearing Set for Thursday --------------------------------------------------------------- Master Graphics, Inc. and its wholly-owned subsidiary Premier Graphics, Inc. held an auction for the purchase of substantially all of the assets relating to the Stephenson Printing Division located in Arlington, Virginia. Stephenson Acquisition, Inc., prevailed with its stalking-horse $11.5 million cash bid plus additional consideration. Lawyers at Skadden, Arps, Slate, Meagher & Flom LLP will bring a sale motion before the Delaware bankruptcy court for final approval on January 25, 2001 at 11:00 a.m. MONEY'S FINANCIAL: Committee Taps Glass & Assoc. as Consultant -------------------------------------------------------------- The Official Committee of Unsecured Creditors of Money's Financial LLC and its affiliated debtors seeks approval of employment of Glass & Associates Inc. as financial analyst and consultant in the US Bankruptcy Court, District of Delaware. The hourly billing rates for Glass Professionals are: Jack R. Stone, Jr. Principal $350 Janet Collinsworth Senior Associate $275 Jim Rowe Senior Associate $275 Chris Kelly Senior Associate $275 Rebecca Jarmon Associate $125 The Committee contemplates that Glass' professionals will: "Investigate the acts, conduct, assets, liabilities, and financial condition of the debtors and its affiliated companies, including the debtors' parent company, Money's Mushrooms Ltd., the operation of the debtor's business and the desirability of the continuance of such business, and any other matter relevant to the case or to the formulation of a plan. Additionally, Glass will perform any and all other financial services for the Committee that the Committee determines are necessary and appropriate." OPTICARE HEALTH: Shareholders Extend Secured Bridge Financing ------------------------------------------------------------- OptiCare Health Systems, Inc. (Amex: OPT) announced several organizational and capital transactions undertaken as a part of its overall restructuring. The Company said that it has executed a definitive agreement for the sale of its Connecticut operations, which was previously announced. The transaction, which is anticipated to close in February, is still subject to several closing conditions. The closing of this transaction is expected to fulfill the company's obligation under its second amendment to its bank facility. Several members of the Company's Board of Directors have also resigned. Martin Franklin and Ian Ashken tendered their respective resignations effective January 3, 2001. Also, Allan Barker tendered his resignation on January 9, 2001. The Company is recruiting replacement directors, which it hopes to announce in the near future. The Company has also reduced the size of its corporate operations, which will help accelerate its plan to return to profitability. In addition, the Company also consummated a $500,000 secured short-term loan with an investor group led by existing major shareholders. As additional consideration for this facility, the Company has issued 750,000 warrants at the then fair market value of $.40. In addition, a warrant holder who was also an investor of the group has agreed to surrender 250,000 previously issued warrants. Dean Yimoyines, Chairman and CEO of OptiCare, commenting on these developments, stated: "We are making progress in our restructuring efforts and, in particular, are pleased that the agreement to sell our Connecticut operations has been executed. We are optimistic that net income from continuing operations will be re-established during 2001." OptiCare Health Systems, Inc. is an integrated eye care services company focused on managed care and professional eye care services. It currently owns, operates, and develops laser and ambulatory surgery centers and provides systems, including Internet-based software solutions to eye care professionals. OWENS CORNING: Enters into New Contract with Elk Corporation ------------------------------------------------------------ Owens Corning asks Judge Walrath to authorize the company to assume two fiber purchase supply contracts with Elk Corporation of Texas, and permit Owens Corning's Trumbull Asphalt Division to enter into a new supply agreement with Elk. Under these agreements, the term of which extends through December 31, 2003, Owens Corning sells to Elk wet formed glass fiber of various types and sizes. The quantities vary, increasing from the present volume of 67 million tons in 2001 to 89 million tons in 2003. Under a second agreement for wet-formed glass fiber, the term of which extends to December 31, 2001, the quantity is based on Owen Corning's good faith estimated minimum. Owens Corning also seek authority for its Trumbull Division to enter into an asphalt purchase agreement providing for Owens Corning's supply of 100% of the roofing asphalt requirements of Elk's facilities in Ennis, Texas, Myerstown Pennsylvania, Shafter California, and any new Elk facilities constructed in the future. Elk is a manufacturer of fiberglass asphalt roofing shingles and glass fiber mat, and is a major supplier to and customer of Owens Corning. Elk's purchases of glass fiber from Owens Corning under the fiber purchase supply agreement represent a high percentage of the total production capacity of Owens Corning's plant in Jackson, Tennessee. Elk's purchases are said by the Debtors to generate more than $20 million in annual sales revenue for Owens Corning. Elk needs the glass fiber it purchases to produce the glass fiber mat that Elk in turn sells to Owens Corning under the wet shingle mat supply agreement. The glass fiber mat that Owens Corning buys from Elk is used in Owens Corning's manufacture of Owens-Corning branded products. Without glass fiber mat produced by Elk, Owens Corning would lose the annual sales revenue generated by the sale of these products. Elk asserts that, as of the Petition Date, Owens Corning owed Elk $1,789,646 under the fiber agreements, consisting of (a) $1,327,329 under the web formed mat supply agreement for outstanding glass fiber mat invoices, and (b) $462,317 under the fiber purchase supply agreement, for earned quantity rebates. Elk also asserts a claim for $71,039 for roofing shingles sold prepetition to Norandex/Reynolds, now known as Exterior Systems, Inc., one of the Debtors in these cases. Although Owens Corning is currently unable to verify these precise amounts, it acknowledges that Elk holds a substantial prepetition claim. Owens Corning's books and records indicate that, on the Petition Date, Elk owed Owens Corning approximately $800,000 under the fiber agreements, including (a) approximately $700,000 under the fiber purchase supply agreement for purchases of glass fiber, and (b) approximately $100,000 under the wet formed mat products supply agreement for earned quantity rebates. Elk also owed Owens Corning approximately $2.6 million for roofing asphalt purchases by the Elk facilities. Accordingly the total prepetition amount owed by Elk to Owens Corning is approximately $3.4 million. Unless Owens Corning is authorized to assume the fiber agreements, Elk has indicated that it will move for relief from the automatic stay to permit Elk to set off amounts that Elk owes to Owens Corning against amounts that Owens Corning owes to Elk. Owens Corning believes that if such a setoff was permitted, Elk would set off as much as necessary to satisfy its prepetition claim against Owens Corning in full. Elk is a key customer and supplier to Owens Corning, and Owens Corning believes that its continued performance under the fiber agreements is in the best interests of the Debtors' estates and their creditors. Assumption of the fiber agreements will help maintain Owens Corning's important business relationship with Elk. If assumption is approved, Owens Corning and Elk will reconcile any discrepancy with respect to the prepetition amounts owing between them as they would in the ordinary course of business. As explained above, Owens Corning believes that the result of the reconciliation will be a substantial net payment to Owens Corning. With regard to a new agreement with Elk, Owens Corning's Trumbull Asphalt Division has in the past sold roofing asphalt to Elk's facilities for use in the manufacture of fiberglass asphalt roofing shingles. Under the asphalt agreement, Owens Corning's Trumbull Asphalt Division will supply Elk with 100% of the roofing asphalt requirements of the Elk facilities. The asphalt agreement extends through December 31, 2005, with a one-year renewal clause. Owens Corning anticipates that it will realize approximately $65 million in annual revenues from sales under the asphalt agreement. This agreement is a profitable arrangement that will permit Owens Corning's Trumbull Asphalt Division to take full advantage of its supply infrastructure. The asphalt agreement represents volumes and specifications similar to those presented in other supply agreements that the Trumbull Asphalt Division has entered into with other customers. Owens Corning believes that the asphalt agreement will permit it to continue to grow and to maximize its profitability through the efficient utilization of its operating facilities.(Owens Corning Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900) PACIFIC GAS: S&P Lowers Related Issues to CC -------------------------------------------- Standard & Poor's lowered its rating to double-'C' from triple- 'B'-minus on bonds issued by various issuers for the benefit of Pacific Gas & Electric Co. (see list below). The ratings remain on CreditWatch with negative implications where they were placed Jan. 5, 2001. The bonds are secured by direct payments from Pacific Gas & Electric Co. to the trustee. In the event of nonpayment by Pacific Gas & Electric Co., bondholders cannot look to any other source of revenues to secure debt service payments. Therefore, the ratings reflect the downgrade of Pacific Gas & Electric Co. to double-'C'. Pacific Gas & Electric Co.'s downgrade reflects the heightened probability of the utility's imminent insolvency and the resulting negative financial implications for affiliated companies because: -- Some of Pacific Gas & Electric's principal trade creditors are demanding that sizable cash payments be made as a precondition to the purchase of commodities necessary for ongoing business operations. -- Neither legislative nor negotiated solutions to the state's utilities' financial meltdown appear to be forthcoming in a timely manner, which continues to impede access to financial markets for the working capital needed to avoid insolvency. -- Southern California Edison Co.'s decision to default on its obligation to pay principal and interest due on Jan. 16, 2001, diminishes the prospects for Pacific Gas & Electric's access to capital markets. -- Pacific Gas & Electric, as a participant in California's generation markets, may be obligated by the California Power Exchange's tariff to absorb a portion of Southern California Edison's defaulted Jan. 16, 2001, payment to the Power Exchange following that utility's decision to suspend Power Exchange payments. The CreditWatch negative listing reflects expectations that the ratings will be further downgraded as Pacific Gas & Electric Co.'s financial condition deteriorates. Although there is still a possibility that federal or state officials will act to rehabilitate the state's utilities' financial health, such prospects appear increasingly remote. California's governor is opposed to providing Pacific Gas & Electric and Southern California Edison with rate relief beyond the nominal one cent per kWh rate increase adopted by the Public Utilities Commission at its Jan. 4, 2001, meeting. The legislature is in special session to address the state's power crisis and its utilities' weak financial condition. To date, however, the legislature has prioritized long-term solutions for California's power markets ahead of the utilities' immediate financial needs. Consequently, capital markets remain unwilling to advance funds to the utilities, which could scuttle the legislature's long-term plans. Pacific Gas & Electric's risk of insolvency is directly related to the mechanisms underlying California's restructuring of its electric industry. The legislative and regulatory framework for that restructuring led to sizable imbalances between Pacific Gas & Electric's operating expenses and revenues. An immediate plan that provides sufficient confidence to the capital markets that lenders will be repaid for existing and future debt obligations remains the only way to restore the state's utilities to a sound financial footing, Standard & Poor's said. PACIFIC GAS: Lenders Treat Utility Like a "Deadbeat Borrower" ------------------------------------------------------------- Treating Pacific Gas and Electric Co. (PG&E) like a deadbeat borrower, lenders essentially cut up PG&E's credit card Wednesday in a move that could mean even more rolling blackouts for Northern Californians, staff reporters for the Associated Press write. Stripped of its financial lifelines, PG&E warned in a shareholder update that it could be marooned in the power market. In the shareholder documents filed with the Securities and Exchange Commission (SEC), PG&E said it will be blocked from the California Power Exchange beginning today unless it can negotiate a deal that grants the utility more room to pay its bills. A reprieve would require the cooperation of out-of-state energy generators, many of whom are reluctant to sell electricity to California without being paid in cash up front. The generators fear California's two largest utilities are on the verge of bankruptcy, a threat PG&E acknowledged as a distinct possibility in its SEC filing. San Francisco-based PG&E said its financial woes worsened Wednesday after losing access to the remaining $128 million available under two credit lines previously granted to the utility and its parent company. PG&E said the power utility and its parent company have a combined $1.05 billion in cash remaining. PG&E estimates that $2.7 billion in electricity- related bills will come due between early February and early March. (ABI World, January 19, 2001) PACIFIC GAS: Responds to Action by California Attorney General -------------------------------------------------------------- Pacific Gas & Edison Corporation director of communications Shawn Cooper issued the following statement in response to a petition filed by the California Attorney General with the Federal Energy Regulatory Commission asking the commission to set aside an order it issued on January 12 approving a new corporate structure for PG&E Corporation's National Energy Group business: "The Attorney General's action unfortunately follows erroneous press reports that PG&E Corporation tried to shield assets of its unregulated affiliates from utility creditors. "PG&E Corporation's action was designed to preserve the value of its National Energy Group (NEG) by enhancing its ability to obtain a separate credit rating that could be sustained even in the event of a bankruptcy of the utility. "This action was completely neutral with respect to creditors of Pacific Gas and Electric Company. "Further, PG&E's followed all FERC notification requirements. And in addition, PG&E provided a courtesy notice to the CPUC of its intention on December 28th." PACIFIC GATEWAY: Wins Interim Okay to Borrow Under DIP Loan --------------------------------------------------------- Pacific Gateway Exchange Inc. has won interim court approval to borrow up to $1.5 million under a $10 million debtor-in- possession (DIP) loan provided by a group of its pre-petition lenders led by agent Bank of America N.A. Judge Dennis Montali of the U.S. Bankruptcy Court in San Francisco scheduled a final hearing on the loan for Feb. 5 and set Jan. 31 as the deadline for filing objections. (ABI World, January 19, 2001) SABRATEK CORP: Wants Exclusivity Extension through Jan. 29 ---------------------------------------------------------- Sabratek Corporation, et al. and its Creditors' Committee seek an extension of the periods during which the debtors and the Committee have the exclusive right to file a plan of reorganization and to solicit acceptances thereto. The debtors and Creditors' Committee seek an extension of 14 days, to January 29, 2001 for the exclusive right to file a plan and an extension until March 30, 2001 to obtain acceptances of any filed plan. The debtors state that they have made substantial progress in these cases, and request a reasonable amount of additional time to prepare the Plan of Liquidation in a consensual manner with the Creditors' Committee. The debtors are now focusing on the sale of GDS Technology, Inc. and the formation of a plan of liquidation and a Disclosure Statement. The debtors believe that the requested extension of the exclusivity periods is clearly justified. SOUTHERN CALIFORNIA: Green Power Suppliers to Suspend Service ------------------------------------------------------------- Cameron Ridge, LLC, Luz Solar Partners, Ltd VIII, Luz Solar Partners, Ltd IX, Windpower Partners 1991, L.P., Victory Garden Phase IV Partnership, Sky River Partnership, Ridgetop Energy, LLC, Ormesa Geothermal, and Ormesa Geothermal II, Qualified Facilities that provide electricity to Southern California Edison, each announced that they have delivered notice to Edison that they intend to suspend service to Edison. The Qualified Facilities collectively provide Edison with approximately 500 megawatts of electricity, enough for 500,000 homes. Each of the Qualified Facilities is a provider of "clean" energy in that they generate power through renewable resources, such as solar power, wind power, and geothermal power. They have been reliable providers of electricity to California for over a decade. The Qualified Facilities have not been selling to the open market but have maintained sales of electricity directly to Edison pursuant to long-term power purchase contracts that, since June, have been at a fraction of the cost of out-of-state generation. Edison is in default to each of the Qualified Facilities under power purchase agreements between Edison and the facilities. Edison failed to respond to the Qualified Facilities' requests for assurances that they would be paid. In their letters to Edison notifying Edison of the suspensions, each of the Qualified Facilities indicated regret that it had been forced to take this step and that it remained open to any proposals that Edison may have to resolve the situation. Ken Klee, Esq., a partner with Klee, Tuchin, Bogdanoff & Stern in Los Angeles, who serves as counsel to the Qualified Facilities stated, "Edison's failure to honor its contractual obligations may cause serious financial injury to producers of clean energy under long term contracts. The ripple effect of Edison's financial situation could be catastrophic unless the state provides credit enhancements to protect valuable supply contracts." The Qualified Facilities have tried to find a solution short of suspending service but Edison and other parties have not responded to efforts to assure payment. "This is unfortunate given the important role that suppliers of clean energy play in protecting the environment," said Klee. The Qualified Facilities remain committed to selling electricity to the California market provided it receives assurances that it will be paid by the Department of Water Resources or another creditworthy entity. STELLEX TECHNOLOGIES: Court to Review Exclusivity on Thursday ------------------------------------------------------------- Stellex Technologies, Inc., et al., sought an order under 11 USC Section 1121(d) extending exclusive periods in which the debtors may file a Chapter 11 plan or plans and solicit acceptances thereto. It is unclear to what date, if any, the Debtors have requested that their exclusive right to propose a plan be extended. A hearing on the motion will be held on January 25, 2001, at 3:00 PM before the Honorable Mary F. Walrath, US Bankruptcy Court, Wilmington, DE. SUN HEALTHCARE: Rejects Certain Equipment Leases ------------------------------------------------ Pursuant to section 365 of the Bankruptcy Code, Sun Healthcare Group, Inc. sought and obtained the Court's authorization to reject 39 Leases for equipment each for one or more reasons: -- the leases are of no further use to the Debtors' continued operations in the event of a scale down; -- the leases are for equipment and the Debtors are accordingly required under 11 U.S.C. Sec. 365(d)(l0) to maintain the lease payments starting from 60 days after the commencement of the chapter 11 cases if the leases are not rejected; -- the equipment is obsolete or has reached the end of its useful life; -- the Debtors can obtain similar equipment for lower prices from other sources. -- the Debtors are not satisfied with the equipment or the services under the leases; -- prepetition arrearages make the cost of assuming the Leases higher than for leasing similar equipment from an alternate source; In their business judgment, the Debtors have determined that rejection of the leases is in the best interest of the estates and creditors. For the purpose of rejection, the Debtors have included secured sales that may not be true leases. The Debtors make it clear that they do not admit that any of the leases are true leases. (Sun Healthcare Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 609/392-0900) TEAR DROP: Creditors to Convene for 341 Meeting on Feb. 2 --------------------------------------------------------- On December 4, 2000 Tear Drop Golf Company filed voluntary petitions for relief under Chapter 11. A meeting of creditors will be held on February 2, 2001, at 1:30 PM, 844 King Street, Wilmington, DE. Counsel for the debtor is Mary M Maloney Huss, of the law firm Wolf, Block, Schorr and Solis-Cohen. TRI-VALLEY: Plan Calls for Break-Up Among Four Buyers ----------------------------------------------------- Six months after troubled Tri-Valley Growers filed for bankruptcy, the 68-year-old food-processing giant may be getting some relief, according to a newswire report. A newly approved plan will pay off more than $500 million of debt and split the co-op among four buyers. According to a Tri-Valley spokesperson, John Hancock Life Insurance will buy nine of the 10 Tri-Valley canneries, Del Monte foods will acquire S&W Fine Foods, Furman Foods of Pennsylvania will buy Tri-Valley's tomato cannery in New Jersey and Alan Ebald will buy the rights to the Monarch brand overseas. Tri-Valley's four buyers paid a total of $153.7 million in cash. John Hancock Insurance, the co-op's largest creditor, will assume $165 million in loans to Tri-Valley. The situation allows Tri-Valley Growers to continue to have a presence in the central valley and to continue working with vendors, customers and growers. (ABI World, January 19, 2001) VENCOR INC.: Selects Cyberview to Enhance Level of Data Analysis ---------------------------------------------------------------- CyberView Corporation, a leading supplier of medical Knowledge Management tools, announced that Vencor has selected the CyberView data visualization solution for their acute care hospitals. Vencor chose CyberView due to the many data views, ease of use, multi-facility analysis capability and "out of the box" integration with Meditech's Data Repository. Additionally, CyberView will assist Vencor with complex data analysis across multiple hospitals and with roll-up reports by region and company. Vencor owns and operates 56 long-term acute care hospitals. Vencor also owns 300 nursing centers, a long-term care pharmacy business, a rehabilitation services provider and sleep disorder centers. "We are looking forward to the implementation of the CyberView system," said Rick Chapman, Chief Information Officer of Vencor. "CyberView will provide Vencor an enhanced level of data analysis across our 56 long term acute care hospitals. CyberView's capabilities were an excellent match to our requirements for a system that integrates with our Meditech Data Repository application. In addition, CyberView's Web based client will compliment Vencor's Intranet strategy." "We are very excited about the addition of Vencor to our growing CyberView customer base," said Daniel Chavez, President and Chief Operating Officer of CyberView. "We are looking forward to the exciting future of CyberView with new developments and technologies on the horizon. With the addition of Vencor to our client base we continue to solidify our position as a leader in the Knowledge Management systems market." About CyberView Corporation CyberView Corporation develops knowledge management solutions for the healthcare industry. These solutions are a data visualization toolset that retrieves information from various application data sources and combines that data with public practice data to provide revealing insights into the provider's outcome statistics. CyberView Corporation based in Austin, TX, is a CyberPlus Company (www.cyberplus.com). (Vencor Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 609/392-0900) VISION METALS: Hires PricewaterhouseCoopers as Financial Advisors ----------------------------------------------------------------- The US Bankruptcy Court, District of Delaware, entered an order authorizing the employment and retention of PricewaterhouseCoopers LLP as the financial advisors to Vision Metals, Inc., et al. VISION METALS: Committee Selects Lowenstein Sandler as Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors of Vision Metals, Inc. and Vision Metals Holdings, Inc. seeks court authority to retain Lowenstein Sandler PC as counsel to the Committee. The firm will provide the following services to the Committee, among others: * Providing legal advice as necessary with respect to the Committee's powers and duties as an official committee; * Providing legal advice as necessary with respect to any disclosure statement and plan filed in this case and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a plan; * Preparing on behalf of the Committee as necessary applications, motions, complaints, answers, orders agreements and other legal papers; * Appearing in court to present necessary motions, applications and pleadings and otherwise protecting the interests of the Committee and unsecured creditors of the debtors. Pursuant to certification of counsel in support of application, Sharon L. Levine, a member of Lowenstein Sandler states that attorney likely to represent the Committee in this matter have current standard hourly rates ranging between $195 and $340. The legal assistants that will likely assist the attorneys who will represent the Committee have current standard hourly rates of $100 and $95. WHEELING-PITTSBURGH: Bluestone Wants Supply Contract Decision Now ----------------------------------------------------------------- Bluestone Coal Corporation, through its attorneys Steven L. Thomas, Esq., of Kay Casto & Chaney PLLC in Charleston, West Virginia, and Joseph C. Lucci, Esq., of Nadler Nadler & Burdman Co., LPA, in Youngstown, Ohio, filed a motion seeking an Order compelling Wheeling-Pittsburgh Steel Corporation to assume or reject executory contracts for low volutility metallurgical coal. Under this contract, WPSC purchases all of its requirements of low volutility metallurgical coal from Bluestone. The contract price is $37.00 per ton, and WPSC is to pay for delivered coal within 45 days after shipment. At the Petition Date, WPSC owed Bluestone approximately $3,301,000, of which approximately $2,000,000 was outside the contract payment period. The term of this contract was to run through December 31, 2001, and automatically renews for another year unless either Bluestone or WPSC give notice of intention to terminate prior to December 31 of the preceding year. Bluestone advises Judge Bodoh that it is a relatively small, privately owned coal company. Approximately 40% of its yearly production is devoted to WPSC (approximately 450,000 tons per year). If the current receivable owed by WPSC to Bluestone is not paid, it will materially affect Bluestone's operations. Further, the present market price of low volatility metallurgical coal of the type sold by Bluestone is substantially above $37.00 per ton. If WPSC does not intend to assume this contract, and is not compelled to make that determination and either cure the default and assume the contract, or reject it, leaving Bluestone free to secure other orders for this coal, Bluestone will be at a substantial competitive disadvantage in being able to secure orders for this volume of coal in the market place. The consequence of this non-payment and uncertainty is that Bluestone may be forced to commence its own Chapter 11 proceeding, in which it could possibly reject the contract with WPSC so it would be able to find substitute purchasers for this production. Bluestone further advises Judge Bodoh that it believes WPSC has already investigated the viability of rejecting its executory contract with Bluestone by soliciting orders for low volatility metallurgical coat and has found that this coal may not be available at all, and if it is available, it will be at a substantial premium above its contract price with Bluestone. Thus WPSC may have already decided that it will need to assume its contract with Bluestone, but has not yet taken any affirmative steps to do so. Bluestone thus urged Judge Bodoh to enter an Order compelling WPSC to make and act upon its decision to either accept this contract, curing the arrearage and performing on a current basis under the contract for its remaining term, or to reject it so that Bluestone could attempt to replace its coal output onto the general market. (Wheeling-Pittsburgh Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392- 0900) ********* 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 are available at your local bookstore or through Amazon.com. Go to http://www.amazon.com/exec/obidos/ASIN/189312214X/internetbankrup t to order any title today. 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 USA, and Beard Group, Inc., Washington, DC USA. Debra Brennan, Yvonne L. Metzler, May Guangko, Aileen Quijano and Peter A. Chapman, Editors. Copyright 2001. All rights reserved. ISSN: 1520-9474. 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