InterNet Bankruptcy Library - News for December 13, 1996

Bankruptcy News For December 13,

  1. Biopharmaceutics announces dissolution of inactive subsidiary

  2. Prepackaged Bankruptcies Seen as Major Trend in 1997 as Bond Issues are
    Restructured Across Industry Lines

  3. Italian Oven Reaches Agreement in Principle for Sale of Company

  4. Default Unrated Notes Imminent Elements of Fiscal Recovery Plan Still
    Unidentified General Obligation Remain Rated B

Biopharmaceutics announces dissolution of inactive subsidiary

BELLPORT, N.Y.--Dec. 13, 1996--Biopharmaceutics Inc. (OTCBB:BOPH)
announced that its inactive subsidiary, Biopharm Lab Inc., has voluntarily filed a
bankruptcy petition under Chapter 7 of the Bankruptcy Code, pursuant to a resolution
adopted by the board of directors on Sept. 30, 1996.

The net effect of the bankruptcy filing is the elimination of approximately $774,000
of liabilities from the company's balance sheet. As a result, Biopharmaceutics will
record income for this item of approximately $774,000 in its quarter and year end
Sept. 30, 1996.

The company expected to be able to release its fourth quarter and year end results
this week. The release is primarily being delayed with respect to accounting matters
related to the valuation of the shares of ABS Group Inc., acquired by
Biopharmaceutics during the formation of its previously announced joint venture with
ABS for the final development and filing of all FDA-required documents for

The company is awaiting an appraisal from an independent investment banking firm
regarding the value of ABS' shares in order to finalize its year end and fourth quarter
financial statements. The company now expects its earning release will be delayed
until the end of December.

Biopharmaceutics is a manufacturer of branded and generic pharmaceuticals and
markets a line of feminine hygiene products under the Koromex(R), Vaginex(R) and
Feminique(R) tradenames.

CONTACT: Stuart Fine, 516/286-5900

Prepackaged Bankruptcies Seen as Major Trend in 1997 as Bond Issues are
Restructured Across Industry Lines

LOS ANGELES, CA -- Dec. 13, 1996 - The new year is likely to bring an escalation
in prepackaged bankruptcies as companies in all industries attempt to restructure
their debt following a period of strong mergers and acquisitions activity, according
to a nationally recognized bankruptcy expert.

"Many companies, particularly in the telecommunications and retail industries, have
overextended themselves in the search for increased market share and now are
looking at cost-efficient ways to restructure their debt but avoid a traditional
bankruptcy," said Robert Klyman, a partner in the international law firm of Latham &
Watkins and lead bankruptcy attorney in a number of major prepackaged bankruptcies
around the country.

"So-called 'prepackaged bankruptcies' can provide some important advantages if the
company can negotiate an acceptable restructure with a majority of its bondholders
outside of court and implement it swiftly through a bankruptcy," Klyman explained.

In a typical out of court restructure, the company may only change the payment terms
of its bonds if each bondholder consents to the modified treatment. This can lead to
significant holdout problems and transfer of wealth to holdouts in order to salvage a
restructure. In a restructure implemented through a prepackaged bankruptcy, on the
other hand, the company need only obtain consents from half in number and two
thirds of the dollar amounts of the bondholders who actually vote.

"If the company can deliver this lesser number of votes out of court, it can then file
for bankruptcy and emerge a leaner, more efficient company in 30 to 45 days,"
Klyman continued. "Furthermore, the claims of trade creditors typically are paid in
full in prepackaged bankruptcies, thereby preserving the company's core business and
key vendor relationships."

Chapter 11 bankruptcies, on the other hand, usually take an average of 18 months to
conclude and are significantly more expensive. According to Klyman, it is the
exception rather than the rule that trade creditors receive full payment in a traditional
bankruptcy case.

1996 has seen a growing number of companies taking advantage of prepackaged
bankruptcies to reorganize and even acquire other firms, such as the purchase of
Morrison Knudsen Corporation (with annual revenues of $1.7 billion) by Washington
Construction Group in September of this year, in which Klyman was lead bankruptcy
attorney for the purchaser.

"Because of the efficiencies that they afford and the debt many companies have taken
on in the past few years, we can expect the use of prepackaged bankruptcies to
escalate in 1997," he concluded.

Latham & Watkins is the nation's fifth largest law firm with more than 700 lawyers
and offices in Los Angeles, Orange County, San Diego, San Francisco, Chicago, New
York, New Jersey, Washington, D.C., London, Hong Kong, Tokyo and Moscow.

SOURCE Latham & Watkins /CONTACT: Anne Sage of Casey & Sayre,

Italian Oven Reaches Agreement in Principle for Sale of Company

LATROBE, Pa., Dec. 13, 1996 - The Italian Oven, Inc. (Nasdaq: OVENQ) (the
"Company") today announced that it had reached an agreement in principle to sell
substantially all of its assets to The Whitecliff Group, Inc. for a cash purchase price
of $3.5 million plus potential additional payments in the future. The agreement in
principle, embodied in a letter of intent signed today, anticipates that the parties will
sign a definitive agreement for the transaction later this month.

Whitecliff is a Minneapolis-based merchant banker funded by private equity. It
currently has interests in real estate, hotels and a variety of other businesses.

Completion of the sale transaction is subject to satisfaction of a number of conditions
including execution of a definitive agreement, approval by the boards of directors of
the Company and Whitecliff and approval of the transaction by the bankruptcy court
overseeing the Company's reorganization under Chapter 11 of the U.S. Bankruptcy

"Whitecliff's vision for the Company will expand the Italian Oven concept with the
continuing leadership of Mike Understein working with the Company's dedicated
employees and committed franchisees," said J. Garvin Warden, interim Chief
Executive Officer of the Company. Michael B. Understein is currently Chief
Operating Officer of the Company.

"We are excited about joining the Italian Oven team and look forward to assisting
Mr. Understein with his vision for the Company," said William T. Brown, President
of Whitecliff.

Yesterday, the Company announced that it had obtained debtor-in- possession
financing in the form of a $200,000 revolving line of credit facility; Whitecliff is the
Company's lender on this credit facility.

The Italian Oven, Inc. operates and franchises Italian-theme, casual dining
restaurants. The Company continues to operate under the protection of the bankruptcy

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

Default Unrated Notes Imminent Elements of Fiscal Recovery Plan Still Unidentified
General Obligation Remain Rated B

NEW YORK, NY---Dec. 13, 1996--Middlesex County, is likely to default on $4.5
million of unrated Revenue Anticipation Notes due for payment today.

This follows yesterday's decision by the Middlesex County Board of Commissioners
to petition state officials to convene a meeting of an emergency board, consisting of
several high ranking state officials, for the purpose of authorizing additional
borrowing to enable the county to meet its upcoming obligations. The board has
reportedly rejected the county's borrowing proposal. At this time, it is not known
whether or when the board will reconvene. As of the time of this release, the paying
agent on the notes has indicated that it is still awaiting funds from the county for
payment on the RANs.

The current B rating on the county's $1.68 million of General Obligation bonds
reflects the county's precarious financial position. Regardless of whether the RANs
default, as expected, Moody's will again review the rating on the county's long-term
bonds when a fiscal recovery plan becomes available. Scheduled debt service on
General Obligation bonds represents a minimal $247,000 in fiscal 1997, and
declines thereafter. Nonetheless, the B rating reflects the apparent inadequacy of
liquid assets to satisfy all creditors.

Moody's has received a number of inquires from investors concerned that the county's
financial crisis may in some way affect the credit quality of municipalities located in
Middlesex County. This is not the case, as Massachusetts counties' assessments to
localities for operations are constrained by Proposition 2 1/2 levy limits, and
counties cannot assess taxes directly.

CONTACT: Ditmar Kopf, Paul Devine Journalists: 212/553-1925 or Subscribers:
212/553-1653 or All other inquiries: 212/553-1650