InterNet Bankruptcy Library - News for December 18, 1996

Bankruptcy News For December 18,

  1. Orange County and State jointly sued for return of more than $596 million
    illegally to be used in the Orange County bailout

  2. Skolniks Inc. exits bankruptcy

  3. Helionetics subsidiary says it will emerge from bankruptcy in mid-January

Orange County and State jointly sued for return of more than $596 million illegally to
be used in the Orange County bailout

LOS ANGELES, CA--Dec. 18, 1996--A $596 million plus taxpayer lawsuit,
initiated by Orange County citizens united in a coalition of taxpayer groups called the
Committees of Correspondents, has been filed in Orange County Superior Court,
Case Number 773081.

The taxpayer lawsuit titled "Steven White vs. State of California et al" alleges that
the special laws passed by the California State Legislature to bail out Orange County
from its fiscal problems are unconstitutional.

The lawsuit also seeks to stop Orange County from receiving any more of the
$599,666,732 funds illegally authorized by the special laws, which the taxpayers
believe violate the State's Constitution. The lawsuit also demands the return of all
funds received by Orange County to the agencies from which the money was taken:
the Orange County Transportation and Development Agencies, the Harbor Fund, and
the Flood Control District.

According to Richard I. Fine, Los Angeles attorney for the plaintiff, "The special
laws that were passed to bail Orange County out of its unique financial crises were
designed to add unjustified, and we believe illegal, expense to the taxpayers. This
legislation is nearly identical to the recent law that we had declared unconstitutional
in November 1996 against the County of Los Angeles and The Los Angeles
Metropolitan Transit Authority."

Fine went on to note, "What made the legislature's action so unconscionable is that it
came after the taxpayers of Orange County had rejected a one-half percent sales tax
increase to bail out the County from its bankruptcy that was caused by political
mismanagement. So instead of facing the problem head on by reducing costs, the
politicians used an `end run' by passing special laws that spread the cost of the
Orange County debacle to all of California's taxpayers."

Fine added, "These kinds of legal shenanigans are not new to our state. In the late
1800's an amendment was added to our State's Constitution prohibiting special
legislation to bail counties out of fiscal crises. And until the Los Angeles and the
Orange County laws were passed, no legislature had dared to ignore the amendment
for over 100 years."

Fine concluded, "Oddly enough, the amount of money that the county was to take each
year from these agencies was approximately $50 million. This sum represents only
3.3 percent of Orange County's approximately $1.5 billion yearly budget. It seems
unimaginable that the county couldn't cut out some fat from its budget to obtain those
funds without having to add another tax burden on citizens."

The defendants named in the lawsuit are the State of California, State Controller
Kathleen Connell, the County of Orange and its Supervisors, Roger R. Stanton,
William G. Steiner, James W. Silva, Donald J. Saltarelli, the Orange County
Transportation Authority, and the Orange County Development Agency.

CONTACT: Richard I. Fine & Associates Richard I. Fine, 310/277-5833

Skolniks Inc. exits bankruptcy

SCOTTSDALE, Ariz.--Dec. 18, 1996--The board of directors of Skolniks Inc.
Wednesday announced that its plan of reorganization has been confirmed by the U.S.
Bankruptcy Court for the Western District of Oklahoma and the company has exited
bankruptcy with shareholder ownership intact.

This morning a group of Skolniks' shareholders funded the plan of reorganization by
purchasing 1 million shares of Skolniks Common Stock for $1 million, affording the
company the opportunity for future growth.

Louis Pignatelli, member of the board of directors of Skolniks Inc. said, "Over the
past two years, the top priority has been to negotiate a plan of reorganization that
would satisfy the creditors, while allowing our shareholders to retain their stock.
During this period, every employee has been dedicated to accomplishing this task."

Pignatelli further stated, "Our goal is to reestablish Skolniks' reputation as a leader in
high quality bagel and breadstick products. The bagel and breadstick markets have
experienced significant growth over the last several years and we hope to capitalize
on the opportunities that exist today."

CONTACT: Skolniks Inc., Scottsdale Gary Mallery, 602/443-9640

Helionetics subsidiary says it will emerge from bankruptcy in mid-January

VAN NUYS, Calif.--Dec. 18, 1996-- Tri-Lite says the company and its new lender
have retired the debt of the company's primary secured creditor, Star Bank,

Helionetics (OTC/BB:HLXC) subsidiary Tri-Lite Inc., in Chapter 11 bankruptcy
since Feb. 26, 1996, Wednesday said its $2.4 million debt to its primary secured
lender, Star Bank, Cincinnati, has been retired and that it expects to emerge from
bankruptcy on or about Jan. 16, 1997.

Since entering bankruptcy, the company has repaid approximately $1.9 million of the
secured debt, and the balance of approximately $500,000 was paid Tuesday by
Tri-Lite's new lender.

The company's plan of reorganization, including settlement agreements with its
unsecured as well as secured lenders, was recently approved by the U.S. Bankruptcy
Court, Santa Ana, Calif., and has been submitted to shareholders for approval. A
Tri-Lite spokesman said that, based on returns to date, acceptance of the plan is a

The spokesman said the company will emerge from bankruptcy "operationally
profitable and with positive cash flow."

Upon confirmation of the plan, Helionetics will contribute to Tri-Lite its AIM Energy
Inc. subsidiary.

The AIM filter, a patented technology developed by AIM Energy for the purpose of
mitigating harmonics, has attracted "considerable interest throughout the
industrialized world," according to the spokesman. He said production and marketing
of the filter that mitigates harmonics -- or electrical pollution -- is under way and that
Tri-Lite will recognize increasing revenues from its sales in 1997 and beyond.

Excessive harmonics is a potential cause of fire in office, industrial and large
residential buildings that contain large numbers of computers, fax machines, other
electrical devices and high-speed elevators.

On Tri-Lite's emergence from bankruptcy, Helionetics will own approximately 87.5
percent of its common shares.

The spokesman said Tri-Lite and its subsidiary companies have been profitable on a
consolidated basis since and including September 1996. He said that in 1997 the
company expects revenues, including those of AIM Energy, to range between $11
million and $17 million and to remain profitable.

The spokesman said the company plans to bring all of its filings up to date prior to or
simultaneous with its emergence from bankruptcy and, thus, to have its shares trading
in the public marketplace.  

Certain of the above statements may be forward-looking statements that involve risks
and uncertainties. In such instances, actual results could differ materially as a result
of a variety of factors, including competitive developments and risk factors listed
from time to time in the company's SEC reports.

CONTACT: Chaim Markheim, 800/421-7915 or ACC Communications Paul Keil,
714/487-1988 Andy Malone, 714/366-5803