InterNet Bankruptcy Library - News for November 19, 1996

Bankruptcy News For November 19,

  1. Gantos, Inc. Reports Third Quarter 1996 Results

  2. Pudgie's Chicken Announces 1996 Third Quarter Results

  3. The Italian Oven Announces Third Quarter Results

  4. Court Order Authorizes Joint Venture of Select Media Communications and
    KONA Technology

  5. LBMS announces second quarter results; Significant progress made in
    implementing new business strategy


  7. MobileMedia Corporation Announces Management Changes

Gantos, Inc. Reports Third Quarter 1996 Results

GRAND RAPIDS, Mich., Nov. 19, 1996 - Gantos, Inc. (Nasdaq: GTOS) today
reported a net loss for the third quarter ended November 2, 1996 of $275,000, or
$0.04 per share, compared to net income of $127,000, or $0.02 per share, for the
same period a year ago.

Net income for the nine months ended November 2, 1996 was $682,000, or $0.09 per
share, compared to net income of $577,000 or $0.09 per share, for the same period a
year ago.

Commenting on the results, Gantos President and Chief Executive Officer Arlene
Stern said, "We are pleased that we were able to hold down expenses to help offset
the reduced gross margin. While our results for the quarter were off from last year,
our year-to-date results are running slightly ahead. Looking forward, we have
strengthened our inventories and believe we are positioned well for the all-important
Christmas season."

Gantos, Inc. is a specialty retailer of quality women's wear and accessories. The
Company currently operates 114 stores in 23 states.

                                     GANTOS, INC.
                               CONDENSED BALANCE SHEETS
                                (Amounts in thousands)

                                                          Nov 2,      Oct 28,
        ASSETS                                             1996         1995
        Current  assets:
        Cash and cash equivalents                          $982        $1,790
        Accounts  receivable  (net)                      21,361        22,975
        Merchandise inventories                          32,454        31,350
        Prepaid  expenses and other                       2,727         2,760
        Total current assets                             57,524        58,875

        Property and equipment (net)                     15,655        18,458
        Total assets                                    $73,179       $77,333

        Current liabilities:
        Accounts payable-trade                          $17,820      $17,987
        Accrued expenses and other                       10,012       11,201
        Current provision for facilities closings         2,407        3,810
        Total current liabilities                        30,239       32,998
        Long-term debt                                   13,326       18,540

        Liabilities subject to compromise                    --          400

        Shareholders' equity                             29,614       25,395
        Total liabilities and shareholders' equity      $73,179      $77,333

                                     GANTOS, INC.
               (Amounts in thousands, except per share and store data)

                                             Third Quarter Ended    Year to
        Date Ended

                                             Nov. 2,    Oct. 28,    Nov. 2,
        Oct. 28,

                                          1996       1995        1996       1995

            Net sales                       $41,716    $42,068    $133,890

        Cost of sales (including buying,
         distribution and occupancy
             costs)                         (33,502)   (33,448)  ($107,243)

            Gross income                      8,214      8,620      26,647

        Selling, general and administrative
             expense                         (9,003)    (9,037)   ($27,557)

            Finance change and other revenue  1,093      1,037      $3,324

            Operating income                    304        620       2,414

            Interest expense                   (579)      (493)    ($1,732)

        Income (Loss) before reorganization
             items and income taxes            (275)       127         682

        Reorganization items:
            Professional fees
        ---        ---         ---      ($530)

        Interest earned on accumulating
             cash from Chapter 11 proceedings
        ---        ---         ---       $251

            Net Reorganization items
        ---        ---         ---       (279)

            Income (Loss) before income taxes  (275)       127         682

            Income taxes
        ---        ---         ---        ---

            Net income (loss)                 ($275)      $127        $682

        Per share amounts:
            Net income (loss) per share      ($0.04)     $0.02       $0.09

        Weighted average shares
             outstanding                      7,572      7,600       7,576

            Stores open at end of period        114        113         114

SOURCE Gantos, Inc./CONTACT: Rick Bunka of Gantos, 616-942-9295/

Pudgie's Chicken Announces 1996 Third Quarter Results

UNIONDALE, N.Y., Nov. 19, 1996 - Pudgie's Chicken, Inc. (Nasdaq: PUDGQ), an
operator of quick service, takeout-and-delivery Pudgie's restaurants, announced
today a loss for the third quarter and nine months ended September 30, 1996.

The Company, which filed a petition for reorganization under Chapter 11 of the
Bankruptcy Code on September 18, 1996, incurred a net loss for the third quarter
ended September 30, 1996 of $4,367,904, or $0.98 per share, as compared to a net
loss of $669,660 or $0.20 per share for the comparable quarter last year. The
increase was primarily attributable to an accrual for an arbitration award of
approximately $1.7 million and approximately $1.2 million expensed in conjunction
with the closing of 10 Company- owned restaurants during the period.

Total revenues for the 1996 third quarter were $3,223,448 as compared to
$3,194,451 for the same period last year. There was a net decrease in the number of
Company-owned restaurants from 26 at September 30, 1995 to 20 at September 30,
1996. The number of franchised restaurants decreased from 37 at September 30,
1995 to 31 at September 30, 1996.

Revenues for the first nine months of 1996 reached $9,188,524 versus $8,247,026 for
the comparable period last year. Revenue from sales at Company-owned restaurants
for the nine month period increased to $8,133,105 from $6,833,605.

Pudgie's Chicken operates and franchises quick service Pudgie's Famous Chicken
restaurants with an emphasis on Home Delivery that offer tasty, reasonably priced
meals featuring fresh skinless fried chicken. Pudgie's also offers barbecued ribs,
shrimp, corn on the cob, mashed potatoes, rice, salads and other side dishes.

You can also contact Pudgie's on their Web Site HTTP://ISON.COM/PUDGIES/

                        Consolidated Statements of Operations

                                  Three Months Ended         Nine Months Ended
                                     September 30,              September 30,
                                      (unaudited)               (unaudited)
                                   1996         1995         1996         1995

            Restaurant sales        $2,949,955   $2,567,480   $8,133,105

        Franchise & advertising
             royalties                 245,275      371,466      729,072

               Franchise fees                  --      220,000      255,000

        Interest income &
             other revenue              28,218       35,505       71,347

             Total                   3,223,448    3,194,451    9,188,524

        Costs and Expenses
            Restaurant cost of sales 1,202,018    1,026,479    3,191,067

        Restaurant operating
             expenses                1,611,089    1,305,446    4,444,703

            Franchising costs           28,063       56,051       89,216

            General & administrative 1,255,399      873,820    3,233,469

            Arbitration award        1,707,404           --    1,707,404

        Restaurant closing
             expenses                  347,010           --      347,010

            Research & development
        --           --           --       20,000

            Advertising expenses       227,345      192,514      674,997

        Depreciation &
             amortization              230,169      212,214      714,848

            Interest expense           108,846      197,607      320,543

             Total                   6,717,323    3,864,131   14,723,257

           Loss before reorganization
            items                  ($3,493,875)   ($669,680) ($5,534,733)

        Reorganization items

        Loss on closing of
             restaurants               831,029           --      831,029

            Professional fees           43,000           --       43,000

            Net loss               ($4,367,904)   ($669,680) ($6,408,762)

        Net loss per common share ($0.98)      ($0.20)      ($1.43)      ($1.21)
        Shares used
             in computation          4,475,421    3,369,799    4,484,866

SOURCE Pudgie's Chicken, Inc./CONTACT: Steven Wasserman, president & CEO
of Pudgie's Chicken, 516-222-8833; or Joe Calabrese or Kerry Thalheim of the
Financial Relations Board, 212-661-8030/

The Italian Oven Announces Third Quarter Results

LATROBE, Pa., Nov. 19, 1996 - The Italian Oven, Inc. (Nasdaq: OVENQ) today
reported a net loss of $2.9 million or $0.68 per share, on total revenue of $6.0
million (including restaurant sales of $5.5 million and franchise and royalty fees of
$569,000) for the third quarter ended September 30, 1996. In last year's third quarter,
the Company had a net loss of $525,000, or $O.28 per share. Of this net loss for the
third quarter of 1996, $1.5 million is attributable to provisions for losses and
non-recurring charges.

The Italian Oven, Inc. operates and franchises Italian-theme, casual dining

Since October 21, 1996, the Company has operated under the protection from
creditors afforded by Chapter 11 of the United States Bankruptcy Code.

SOURCE The Italian Oven, Inc. /CONTACT: J. Garvin Warden of the Italian Oven,

Court Order Authorizes Joint Venture of Select Media Communications and KONA

NEW YORK, NY - Nov. 19, 1996 - On November 1, 1996, the United States
Bankruptcy Court for the Southern District of New York authorized Select Media
Communications, Inc.
(SMTV) to enter into a joint venture agreement with KONA
Technologies Inc. The approval of the joint venture agreement enables SMTV to
promptly file a plan of reorganization and emerge from its Chapter 11 bankruptcy

Pursuant to the joint venture agreement, SMTV, a producer of television vignettes,
info-minutes and info-mercial, and KONA technologies, a premier action graphics
image processing company, have joined forces to form "ProMotion Sports and
Entertainment" (PMS&E). The new company can take still advertising images and
enhance them with animation-like motion that creates an entirely new look and feel
for products and clients.

This innovative production tool can revolutionize the advertising, marketing and
promotion industries. KONA's computer image processing techniques use optical,
photographic computer and printing technologies. These techniques create a variety
of 3-D and animation graphics that can be viewed as active advertising versus static
via electronic and hard copy media.

The new technology has virtually endless applications. Potential new uses include
client's logos, signage, dasherboards, billboards, merchandising and outdoor
advertising. In addition, PMS&E plans to soon enter into negotiations with the NBA,
NFL, NHL and MLB to acquire licensing rights to insert KONA's motion technology
into T-shirts, posters, billboards, cups, jerseys, playing cards and other merchandise.
SMTV's management believes that consumers will be intrigued to gaze at the image
of an all-star basketball player on a T- shirt and suddenly see the figure slam dunking
a ball. The technology will also be available to sports franchise arenas and stadiums
for outdoor advertising and free standing billboards.

The number of industries that can benefit from this 3D motion technology extends far
beyond the sports fields. The movie industry can introduce the animation to all
in-theater and home video store billboards, posters and life-size cutouts. The
packaged goods business can use it on all end-aisle displays and point of purchase
advertising. Automobile dealers can recreate a car door opening revealing the
interior of the car. Using the morphing process, theme parks can turn a picture of a
youngster's favorite character into a child's portrait. Recording artists can appear to
be live on album or CD covers.

Mitch Gutkowski, President and Chief Executive Officer of Select Media, said: "I'm
extremely excited about the unlimited potential for success of this new endeavor.
With KONA's capabilities we can once again offer clients creative alternative ways
of reaching their target audience that will increase their awareness and also have an
immediate public impact."

Leonard Flory, President and CEO of KONA, said: "KONA has focused a lot of
effort on research and software development, and is excited about the prospect of
exploiting these markets."

Gutkowski said he expected PMS&E to be fully operational shortly after the new

SOURCE Select Media Communications Inc. /CONTACT: Mitch Gutkowski, or
Vicki Gonzales of Select Media, 212-765-1020/

LBMS announces second quarter results; Significant progress made in implementing
new business strategy

HOUSTON, TX--Nov. 19, 1996--Learmonth & Burchett Management Systems PLC
(NASDAQ: LBMSY) ("LBMS") today reported second-quarter financial results,
including a return to operating profitability, and announced significant progress in the
implementation of its new business strategy aimed at strengthening its position as the
market-leading process management tools vendor.

For the three months ended Oct. 31 1996, the company reported revenues of $4.9
million. Net income was $204,000, or $0.02 per American Depositary Share
("ADS") ($0.01 per ordinary share), before the effect of the $17.6 million
restructuring charge announced in August 1996. As a result of the restructuring
charge, the company reported a net loss of $17.4 million, or $1.36 per ADS ($0.68
per ordinary share), for the second quarter.

The company's revenue and operating expenses, excluding the restructuring charge,
for the three months ended Oct. 31, 1996 are based solely on operations in North
America. License revenue during the quarter was principally derived from the
Process Engineer product line.

Michael Bennett, CEO, stated, "The second quarter, my first with the company, was
pivotal. We embarked on an aggressive new business strategy aimed at returning
LBMS to profitability by focusing on our leadership position in the process
management market and substantially reducing operating costs, primarily outside the

Significant events during the quarter included the addition of new strategic
customers, such as GE Capital, TRW and Inacom, the announcement of the
PE/Route2 line of products targeting project team solution sales of process
management, significant additions to the Process Engineer best practices library in
the areas of Year 2000 Conversion, Object Oriented Development and Data
Warehousing, and development partnerships with Hewlett Packard, Computer
Horizons Corporation, Knowledge Based Systems Inc., and Zyga Corp.

"We have substantially completed the implementation of our new business strategy,
increased our investment in product development and marketing for the Process
Engineer product line and significantly reduced our on-going operating expenses,"
said Bennett. "The accomplishments of the company during the second quarter were
substantial and the initial results are promising. We are clearly pleased with the
progress made by the company and the results demonstrate the renewed efforts of our
staff and the support and confidence of our customer base, including significant new
customers who made strategic commitments to LBMS during the quarter.

Except for any historical information contained herein, the matters discussed in this
news release are forward looking statements that involve risks and uncertainties,
including the timely development, release and acceptance of new products and
alliances, the impact of competitive products and pricing, and the other risks detailed
from time to time in the company's U.S. Securities and Exchange Commission filings.
The company continues to be susceptible to potentially significant variations in
quarterly and annual revenue and operating results.

Based in Houston, Texas, LBMS, Inc. is the leading provider of Process Management
products to Fortune 1000 companies. LBMS's integrated line of Process Management
products provide organizations with a library of "best practices" for all areas of
applications development and a comprehensive set of tools for process definition,
deployment, execution and improvement. LBMS has an installed base of more than
21,000 users worldwide in areas such as financial services, technology,
manufacturing, retailing, oil, government and utilities. LBMS company and product
information can be found on the World Wide Web at

Unaudited financial highlights in U.S. dollars, under accounting principles generally
accepted in the United States (the basis upon which the above financial information
was derived), are included at Exhibit 1. Unaudited financial highlights in pounds
sterling, under principles generally accepted in the United Kingdom, are included at
Exhibit II.

                       Consolidated Statement of Operations
                  (In thousands, except per share information)

                              Three months ended  Six months ended
                                   October 31,     October 31,
                                  1996    1995    1996    1995
         Product licenses           $2,757  $6,464  $4,761 $11,840
         Services                    2,095   4,458   5,345   8,858
          Total revenue              4,852  10,922  10,106  20,698

        Cost of revenue:
         Product licenses               11     232      69     474
         Services                      921   1,673   2,537   3,342
          Total cost of revenue        932   1,905   2,606   3,816

        Gross margin                 3,920   9,017   7,500  16,882

        Operating expenses:
         Sales and marketing         2,217   5,005   6,739   9,219
         Research and development    1,016   1,887   3,159   3,789
         General and administrative    578   1,368   1,886   2,599
         Merger costs                   -      468     -       468
         Restructuring charge       17,621      -   17,621      -  
          Total operating expenses  21,432   8,728  29,405  16,075

        Operating income (loss)    (17,512)    289 (21,905)    807 

        Interest income                119      14     242      46
        Interest expense               (35)    (14)    (69)    (32)
        Other income and (expense)      11      -       15      -

        Income (loss) from 
         continuing operations    
          before income taxes      (17,417)    289 (21,717)    821

        Income tax benefit (expense)   -       (85)    -      (158)

        Net income (loss)         ($17,417)   $204($21,717)   $663

        Income (loss) per Ordinary 
         Share:                     ($0.68)  $0.01  ($0.85)  $0.03

        Income (loss) per ADS: (a)  ($1.36)  $0.02  ($1.70)  $0.06 

        Weighted average Ordinary 
         and Ordinary Share
          equivalents outstanding   25,539  23,004  25,537  23,004

        (a)  Adjusted to reflect the ratio of one ADS to two Ordinary


                          Consolidated Balance Sheet
                 (In thousands, except per share information)

                                              October 31, April 30,
                                                 1996       1996
        Assets                                   (unaudited)  (audited)

        Current assets
         Cash and cash equivalents                   $7,063   $10,960
         Trade accounts receivable                    3,957     9,579
         Other current assets                         1,394     3,498
          Total current assets                       12,414    24,037

        Furniture, fixtures and equipment             1,504     2,982
        Other assets                                              160
          Total assets                              $13,918   $27,179

        Liabilities and Shareholders' Equity

        Current liabilities
         Current maturities of indebtedness            $691    $1,003
         Accounts payable                             1,240     1,630
         Deferred revenue                             3,459     3,691
         Accrued liabilities                          7,482     5,344
         Executive Stock Option Trust indebtedness      976       903
          Total current liabilities                  13,848    12,571

        Indebtedness                                    518       524
        Other liabilities                            10,055     2,149
          Total liabilities                          24,421    15,244

        Shareholders' equity:
         Ordinary shares, 10 pence par value          4,255     4,253
         Additional paid-in capital                  20,282    20,323
         Adjustment for ESOT                           (976)     (903)
         Cumulative translation adjustment             (170)      439
         Accumulated deficit                        (33,894)  (12,177)
          Total shareholders' equity                (10,503)   11,935

        Commitments and contingencies                    --        --

          Total liabilities and shareholders' 
           equity                                   $13,918   $27,179


                     GROUP PROFIT OR LOSS ACCOUNT
           (In thousands (Sterling), except per share amounts)

                               Three months ended      Six months ended
                                   October 31,             October, 31
                                  (unaudited)             (unaudited)
                               1996          1995      1996        1995

        Turnover                  3,052          6,952     6,285      12,440

        Operating (Deficit)/Profit
         Continuing Operations      672          1,429      (957)      2,428
         Restructuring charge   (11,256)           -     (11,256)        -
         Merger costs               -             (296)
        -          (296)
                            (10,584)         1,133   (12,213)      2,132

        Development costs          (649)          (884)   (2,036)

        Profit/(Deficit) before 
         taxation and interest  (11,233)           249   (14,249)        487
        Interest and other (net)     61             -        122           9
        Profit/(Deficit) before
         taxation               (11,172)           249   (14,127)        496
        Taxation                     -             (54)        0
        Retained Profit/
         (Deficit)              (11,172)           195    (14,127)       407
        Earnings/(Deficit) per
         ordinary share           (43.7)p          0.8p     (55.3)p
        Weighted average ordinary
         and ordinary share
         equivalents outstanding 25,539         23,004     25,537     23,004
        1. The abridged balance sheet for the year ended April 30, 1996 is
        an extract from the latest published accounts which have been
        delivered to the Registrar of Companies.  The report of the auditors

        on those accounts was unqualified and did not contain a statement 
        under section 237(2) of the Companies Act 1985.  

        2. The primary differences between accounting principles generally 
        accepted in the United States and the United Kingdom relate to the
        accounting for acquisitions, timing of recognition of license and
        maintenance revenue, presentation of restructuring charges and
        accounting for income taxes.


                            Consolidated Balance Sheet
                             (In thousands Sterling)

                                               unaudited    audited
                                              October 31,   April 30,
                                                 1996         1996
        Fixed Assets                               
          Tangible Fixed Assets                       925         1,981
          Investments                                 600           600
                                                --------      -------
                                                1,525         2,581

        Current assets
          Debtors                                    3,289        8,689
          Cash at bank and in hand                   4,342        7,282
                                                 7,631       15,971  

        Creditors (amounts falling 
          due within one year)                      (6,386)      (5,900)

        Net Current Assets                           1,245       10,071

        Total Assets Less current                 
          liabilities                                2,770       12,652

        Creditors (amounts falling due
          after more than one year)                 (6,451)      (1,723)

        Deferred income                             (1,750)      (1,809)

        Total net assets                            (5,431)       9,120

        Share capital and reserves
          Called up share capital                    2,554        2,553
          Share premium account                     13,197       13,223
          Profit and loss account                  (21,182)      (6,656)

          Shareholders' funds                       (5,431)       9,120

Note: The primary differences between accounting principles generally accepted in
the United States and the United Kingdom relate to the accounting for acquisitions,
timing of recognition of license and maintenance revenue, classification of the offset
of the ESOT indebtedness, presentation of restructuring charges and accounting for
income taxes.

CONTACT: LBMS, Inc. Stephen E. Odom, 713/625-9311 e-mail:


LAS VEGAS, NV--Nov. 19, 1996--Stratosphere Corporation (NASDAQ: TOWV)
today announced that, it did not make its First Mortgage Notes interest payment of
$14.5 million which was due on November 15, 1996. The Company had previously
announced that it was highly unlikely that it would make this payment. Although the
Company has thirty (30) days in which to make this interest payment before such non
payment becomes an event of default under its First Mortgage Notes, it is highly
unlikely that it will make such payment.

The Company is continuing to seek additional financing and is discussing
restructuring of its existing First Mortgage Note indebtedness. The outcome of any
discussion in connection with restructuring the terms of its existing First Mortgage
Note indebtedness is uncertain. In addition, it is highly likely that negotiations with
its creditors, whether successful or not at arriving at a restructuring, will involve a
bankruptcy filing as a means of formalizing and approving either a consensual or
nonconsensual restructuring. The Company does not believe that a bankruptcy filing
will, in the long term, adversely affect daily operations or guest services.

Stratosphere Corporation is 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 free-standing observation tower in the United States.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for
forward-looking statements. Certain information included in this press release (as
well as information included in oral statements or other written statements made or to
be made by the Company) contains statements that are forward-looking, such as
statements relating to plan for future expansion and other business development
activities as well as other capital spending, financing sources and the effects of
regulation (including gaming and tax regulation) and competition. Such
forward-looking information involves important risks and uncertainties that could
significantly affect anticipated results in the future and, accordingly, such results may
differ from those expressed in any forward-looking statements made by or on behalf
of the Company. These risks and uncertainties include, but are not limited to, those
relating to development and construction activities, dependence on existing
management, leverage and debt service (including sensitivity to fluctuations in the
interest rates), domestic or global economic conditions, activities of competitors and
the presence of new or additional competition, fluctuations and changes in customer
preferences and attitudes, changes in federal or states tax laws of the administration
of such laws and changes in gaming laws or regulations (including the legalization of
gaming in certain jurisdictions). For more information, review the Company's filings
with the Securities and Exchange Commission, including the Company's annual report
on Form 10-K and certain registration statements of the Company.

CONTACT: Stratosphere Corporation Tom Lettero, 702/383-5207

MobileMedia Corporation Announces Management Changes

RIDGEFIELD PARK, N.J., Nov. 19, 1996 - MobileMedia Corporation (Nasdaq:
MBLM) today announced that Michael K. Lorelli has informed the Company's Board
of Directors of his intention to resign as the Company's President and Chief
Executive Officer and as a member of its Board of Directors.

The Company and Mr. Lorelli are working out details of a Separation Agreement, the
terms of which are expected to include compensation calculated pursuant to his
employment agreement.

David Bayer, Chairman of the Board of Directors, will be named Acting Chief
Executive Officer. The Board is commencing an active search for Mr. Lorelli's
replacement, and is continuing its search for senior operations management.

On behalf of the Board of Directors, David Bayer said, "Mike Lorelli joined
MobileMedia in September because we and he felt the Company's long-term
opportunities would leverage his leadership talents as a growth strategist. In the past
three months, it has become clear that the challenges facing MobileMedia are more
operational in nature. Ongoing discussions with the lenders and vendors have
prompted Mike to conclude that the role of CEO now requires an executive with a
different experience set. We support Mike in a decision he feels is in his own and
MobileMedia's best interests."

David Bayer has over 20 years of experience operating paging and cellular telephone
companies, most recently as an investor in, and member of the Boards of Directors
of, Western Wireless Corporation and MobileMedia.

MobileMedia Corporation is the second largest provider of paging and personal
communications services in the United States, offering local, regional and nationwide
coverage to approximately 4.5 million subscribers in all 50 states, Canada and the
Caribbean. The company operates two one-way nationwide networks and owns two
nationwide narrowband PCS licenses.

SOURCE MobileMedia Corporation  /CONTACTS: Santo J. Pittsman, Senior Vice
President & CFO, 201- 393-4693, or Laura E. Wilker, Investor Relations,
201-462-4959, both of MobileMedia/