InterNet Bankruptcy Library - News for February 19, 1997

Bankruptcy News For February 19, 1997


  2. Caldor Receives Extension of Exclusivity Period

  3. Fruehauf Trailer Corporation receives authorization to sell Delphos Axle assets; considers sale of remaining businesses

  4. MobileMedia Granted Final Court Approval for $200 Million DIP Facility

  5. Emerson Radio reports results for third quarter and nine months; results attributable to soft retail market


LAS VEGAS, NV--Feb. 19, 1997-- Stratosphere Corporation (NASDAQ: TOWVQ) today announced that for the fourth-quarter ended  
December 29, 1996, the company posted a net loss before the recording of several non-recurring charges of $9.7 million or ($0.17) per  
weighted average common share. The non-recurring charges included a non-cash charge of $201.9 million or ($3.46) per share related to the  
adoption of SFAS 121, "Accounting for the Impairment of Long-Lived Assets to Be Disposed Of," $4.0 million or ($0.07) per share of pre-  
opening expenses, $3.0 million or ($0.05) per share charge for bad debt reserve relating to the receivable due from Bob Stupak for the  
servicing of his vacation package customers and $1.0 million or ($0.02) per share for restructuring costs. The net loss after these  
non-recurring charges was $219.6 million or ($3.76) per share.

The impairment loss of $201.9 million was measured as the amount by which the carrying value of the long-lived assets exceeded their  
estimated fair market value. Further reductions are possible as future cash flow is compared to current estimates and with the anticipated  
application of fresh-start reporting upon United States Bankruptcy Court confirmation of a plan of reorganization.

For the fiscal year ended December 29, 1996, net revenues totaled $108.7 million and the net loss before the aforementioned non-recurring  
charges was $25.0 million or ($0.43) per weighted average common share. The net loss after the non-recurring charges was $254.8 million  
and ($4.38) per share. For the year, such non- recurring charges included a non-cash charge of $201.9 million or ($3.47) per share related to  
the adoption of SFAS 121, $23.9 million or ($0.41) per share toward amortization of pre-opening expenses, $3.0 million or ($0.05) per  
share charge for bad debt reserve relating to the receivable due from Bob Stupak for the servicing of his vacation package customers and  
$1.0 million or ($0.02) per share of restructuring costs. The Company has completed amortization of pre-opening expenses as of December  
29, 1996. Net revenues are reflective of a partial year as the Company began operations on April 29, 1996.

As previously announced, on Monday, January 27, 1997, the Company filed a petition under Chapter 11 of the United States Bankruptcy  
Code with the United States Bankruptcy Court in Las Vegas, Nevada. The Company does not believe that the 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 state 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.

                            Selected Financial Information
                         In thousands, except per share data

                                       Three              Twelve

                                      Months              Months
                                       ended     % of     ended     % of
        Consolidated Financial           December   Revenue   December
        Statistics                        29,1996             29,1996
                                    -------------------   -------------------

        Net Revenues                     $43,522              $108,739


        Consolidated Income Before         6,075     14.0%       4,124

        Interest, Taxes,
           Depreciation, Amortization
        and Non-Recurring Charges

        Depreciation and amortization     (5,759)   (13.2%)    (11,478)

        Pre-opening cost amortization     (4,022)   (9.2%)     (23,909)
        Impairment of long-lived asset  (201,947) (464.0%)    (201,947)
        Bad debt reserve for related      (2,978)   (6.8%)      (2,978)
        party receivable
        Restructuring costs                 (978)   (2.2%)        (978)
                                    -------------------   -------------------
        Operating loss                  (209,609) (481.6%)    (237,166)

        Net interest expense             (10,019)  (23.0%)     (17,676)
                                    -------------------   -------------------

        Net Loss                       $(219,628) (504.6%)   $(254,842)



        Quality of (Loss) Earnings Analysis                            
        Loss per share from Operations    $(0.17)               $(0.43)
        Amortization of pre-opening cost   (0.07)                (0.41)
        Impairment of long-lived asset     (3.46)                (3.47)
        Bad debt reserve for related   
         party receivable                  (0.05)                (0.05)
        Restructuring costs                (0.02)                (0.02)
                                    ------------          -----------
        Loss per share                    $(3.76)               $(4.38)

See notes to consolidated financial statements.

CONTACT: Tom Lettero - (702) 383-5207


Caldor Receives Extension of Exclusivity Period

NORWALK, CONN.--Feb. 19, 1997--The Caldor Corp. (NYSE: CLD) announced today that the U.S. Bankruptcy Court for the Southern  
District of New York has granted the Company an extension of the period under which it has the exclusive right to file a plan of  
reorganization with the court.

The exclusivity period, which had been scheduled to expire on Feb. 28, 1997, has now been extended through Sept. 1, 1997, with the support  
of the Company's Creditors', Bank and Equity Committees. Likewise, the period in which the Company can solicit acceptances for the  
reorganization plan has been extended through Oct. 30, 1997.

Warren Feldberg, Chairman and Chief Executive Officer, commented, "This extension will enable Caldor to continue the progress being  
made in reviewing our five-year Business Plan with the Creditors', Bank and Equity Committees. We are confident this Plan offers the  
greatest potential to restore the Company to long- term profitability and growth. Ultimately, the Business Plan will provide the basis for  
Caldor's Plan of Reorganization."

The cornerstone of Caldor's plan, which was presented in December 1996, is a refocusing on its strategies as a full-line, upscale discount  
retailer, serving urban/suburban discount markets in the Northeast and Mid-Atlantic. Among other initiatives, the Plan calls for Caldor to  
raise customer satisfaction levels; lower everyday pricing and reduce promotional activities; narrow and refocus merchandise assortments;  
revamp its advertising programs; and implement operating efficiencies and significant cost reductions.

The Caldor Corp. is the fourth largest discount department store chain in the U.S., with annual sales of approximately $2.7 billion and  
approximately 23,000 Associates. It currently operates 161 stores in ten East Coast states. With a strong consumer franchise in high density  
urban/suburban markets, Caldor offers a diverse merchandise selection, including both softline and hardline merchandise.

CONTACT: Kekst and Company Wendi Kopsick/Jim Fingeroth, 212/593-2655

Fruehauf Trailer Corporation receives authorization to sell Delphos Axle assets; considers sale of remaining businesses

INDIANAPOLIS, IN--Feb. 19, 1997--Fruehauf Trailer Corporation today announced that it has received Bankruptcy Court authorization to  
sell the assets of its Delphos Axle Products Division to Holland Hitch Company of Holland, Michigan. The assets to be sold consist  
primarily of the real and personal property and intellectual property used in the Delphos axle business and related inventory. The purchase  
price is $14.4 million plus an amount for inventory at the closing date. The Company expects to close the sale transaction by early March.

Fruehauf also announced that it has filed a motion seeking Bankruptcy Court authorization to auction its three remaining businesses. These  
businesses include (i) the Sales and Distribution network consisting of 31 Company-owned branches throughout the United States and the  
Parts Distribution Center in Grove City, Ohio, (ii) the trailer assembly facilities located in Fort Madison, Iowa and Huntsville, Tennessee  
and the use of the Fruehauf trade name in North America, and (iii) the Company's trailer assembly facility in Mexico City, Mexico. The  
motion filed with the U.S. Bankruptcy Court for the District of Delaware included related bidding procedures for parties interested in  
acquiring one or more of the business units. The assets to be auctioned consist primarily of the real and personal property and intellectual  
property used in the businesses and related working capital. Under the proposed procedures, the Company may reject any bid it determines  
to be inadequate and decide to retain the assets and reorganize around them.

Mr. Thomas E. Ireland, Chief Executive Officer, commented "The Company has been investigating for some time the potential sale of these  
business units. All three of these businesses continue to operate and we are actively engaged in due diligence with several parties interested  
in these assets. Furthermore, we hope that the motion filed and the proposed auction procedures will solidify these expressions of interest  
and bring an expeditious conclusion to the bankruptcy process. However, we retain the right to withdraw any assets from the auction process  
and to reorganize around them if the bids are insufficient."

Fruehauf Trailer Corporation filed a voluntary petition under chapter 11 of the U.S. Bankruptcy Code on October 7, 1996 and currently  
operates its businesses as a debtor in possession. Fruehauf is a manufacturer of truck trailers, producing, marketing, and servicing the  
industry's widest range of dry freight van, platform, dump and liquid and dry bulk tank trailers. Among the largest suppliers of trailer parts in  
North America, Fruehauf products are sold throughout the truck trailer industry's largest Company-owned dealer and authorized independent  
dealer network in North America.

CONTACT: Fruehauf Trailer Corporation, Indianapolis Gregory G. Fehr, 317/630-3000 Michael D. Picchi, 317/630-3000


MobileMedia Granted Final Court Approval for $200 Million DIP Facility

RIDGEFIELD PARK, N.J., Feb. 19, 1997 - MobileMedia Corporation (Nasdaq: MBLMQ) announced today that the bankruptcy court  
entered a final order approving the Company's debtor-in- possession ("DiP") facility. As previously announced, the Company has entered  
into a DiP loan agreement with The Chase Manhattan Bank, as agent, providing for up to $200 million of DiP financing.

On January 30, 1997, the bankruptcy court entered an interim order approving the DiP facility, as a result of which the Company gained  
access to $70 million of the DiP funds, subject to certain conditions that have been satisfied, of which it has used $48 million to pay certain  
key suppliers, among other things. As a result of today's final order, the Company will gain access to an additional $30 million of DiP funds  
for a total of $100 million. The remaining $100 million of DiP funds will become available on May 1, 1997 if the Company delivers a  
business plan by April 15, 1997 that is approved by the banks' financial advisor.

One of the conditions for borrowing under the DiP facility was that certain key suppliers of paging equipment shall have entered into  
agreements with the Company to sell equipment and provide services. The Company announced on February 10, 1996 that it had received  
court approval to pay the pre-petition claims of certain key suppliers and that it had entered into agreements with those suppliers, including  
Motorola, the Company's largest supplier of pagers. The Company also said at that time that it has placed orders with Motorola and  
Glenayre, the Company's largest supplier of infrastructure equipment, and that Motorola and Glenayre will commence shipping product  

Joseph A. Bondi, Chairman - Restructuring, said: "Three weeks after filing for chapter 11 protection we have made considerable progress in  
achieving our initial objectives: we have added the strong leadership of Ron Grawert, who recently came on board as Chief Executive  
Officer; we now have access to substantial additional capital in the form of DiP financing; and as a result of agreements reached with  
Motorola and other key suppliers, we are back on a normal order cycle for pagers and other equipment. Our chapter 11 proceeding is  
progressing as expected with no interruption in service to our customers."

MobileMedia is the second largest provider of paging and personal communications services in the United States, offering local, regional  
and nationwide coverage to approximately 4.4 million subscribers in all 50 states, Canada and the Caribbean. The Company operates two  
one-way nationwide networks and is licensed to operate two nationwide narrowband PCS networks.

The agreement relating to the DiP facility and the agreements with Motorola, Glenayre and the other key suppliers are publicly available  
through the bankruptcy court. Statements contained in this release that are not based on historical fact are "forward- looking statements"  
within the meaning of the Private Securities Litigation Reform Act of 1995. The "Risk Factors" and cautionary statements identifying  
important factors that could cause actual results to differ materially from those in the forward-looking statements are detailed in the  
Company's 1995 10-K filing with the Securities and Exchange Commission.

SOURCE MobileMedia Corporation  /CONTACT: Krista Grossman, media, 212-484-7760, or Laura Wilker, investors, 201-462-4959,  
both for MobileMedia Corporation/

Emerson Radio reports results for third quarter and nine months; results attributable to soft retail market

PARSIPPANY, N.J.--Feb. 19, 1997--Emerson Radio Corp. (AMEX:MSN) today announced results for the third quarter and nine months  
ended Dec. 31, 1996.

In announcing the results, Gene Davis, president of Emerson, said, "Results for the third quarter of fiscal 1997 continue to be impacted by the  
soft retail market for consumer electronics. While the company has been successful in improving the pricing it receives from its suppliers,  
the impact from increased price competition, combined with lower sales volume has negatively affected the company's overall margins and  
operating results.

"Nevertheless, excluding the sales of video products, most of which are the subject of a pre-existing license arrangement, the company's U.S.  
gross sales continued to improve over last year. We are continuing our successful cost containment and reduction programs which have  
allowed the company to weather this very difficult retail market.

"Additionally, we are continuing to see positive results from our efforts to modify our product mix to emphasize sales of higher margin  
products, such as home theater. Although we endured another difficult quarter, we believe the company's performance can favorably be  
compared to the overall results of the consumer electronics industry.

"Our current and continuing efforts are dedicated towards further streamlining Emerson and growth through diversification and strategic  
alliances that we hope will soon return Emerson to profitability. We are currently in the process of negotiating for additional licensing  

"In January 1997, we introduced a new line of home theater systems incorporating licensed proprietary technology at the Consumer  
Electronics Show. This new product was well received by retailers at the Show and we expect to start shipping these systems to customers  
in the June 1997 quarter. The company's expanded home theater line offers the retailer attractive price points in this newly developed  
high-growth market and attractive margin opportunities for Emerson."

In February, 1997, the company announced the execution of a multi-year licensing/supply arrangement for Central and Latin American  
markets. The agreement provides for the license of the Emerson Radio trademark for certain consumer electronics products and a sourcing  
and inspection service to be provided by the company's Hong Kong subsidiary.

Under the terms of the agreements, the company will receive minimum annual royalties through the life of the agreement and will receive a  
separate fee for sourcing and inspection services. Davis said, "This transaction exemplifies Emerson's strategic plan to leverage its assets  
and strengths and maximize income while limiting working capital risk.

"The agreement should increase the presence of the Emerson Radio brand in 40 countries in Central and South America and in the  
Caribbean, adding to the value of the company's brand name, and provides Emerson with a strategic alliance with a substantial company that  
has expertise in serving these markets which, combined, represent over 300 million consumers."

In December 1996, the company completed the acquisition of a controlling interest in Sport Supply Group Inc. ("SSG"), a New York Stock  
Exchange company, pursuant to which the company acquired 1,600,000 shares of a newly issued common stock of SSG and five-year  
warrants to acquire 1,000,000 shares of SSG common stock at an exercise price of $7.50 per share for the aggregate consideration of $12  
million. The company currently owns approximately 27% of the outstanding common stock of SSG, and assuming exercise of all the  
warrants, the company would beneficially own approximately 35% of SSG common stock.

Pursuant to the terms of the transaction, the company was granted control of SSG's board of directors, and the company's management is  
directly involved in SSG's day-to-day operations. In addition, the company has arranged for foreign trade credit financing of $2 million for  
the benefit of SSG.

SSG is the largest direct mail distributor of sporting goods equipment and supplies in the United States. SSG sells its products at margins  
significantly higher than the average of Emerson's core business and to an institutional market which does not require the significant  
after-market servicing costs typical of Emerson's core business.

Davis continued, "We believe the investment in SSG will be positive for the shareholders of both companies. Emerson benefited by  
diversifying from its core business of consumer electronics distribution to another distribution business that offers excellent growth  
potential. SSG benefited from the investment by gaining the liquidity needed to cure its then existing loan default with its senior lenders and  
amending its secured credit facility on more favorable terms.

"SSG now also has the capital necessary to take advantage of opportunities to increase its business in the institutional sporting goods market  
both in the U.S. and internationally and to continue marketing its products featured at the 1996 Olympic Games."

For the third quarter and nine months ended Dec. 31, 1996, the company reported net revenues of $49,628,000 and $151,284,000, as  
compared to net revenues of $70,314,000 and $214,720,000 for the same periods last year.

The lower net revenues reported for the current fiscal year reflect the licensing of a portion of the company's video business, which volumes  
are no longer reported by the company which, instead reports only license royalties attributable to such sales. The results also reflect a  
decline in the company's unit sales volume, primarily in the U.S., in video product categories due to increased price competition, weak  
consumer demand, and a soft retail environment for consumer electronics.

Excluding sales of video products, the company's U.S. gross sales increased by approximately 18% and 12% for the third quarter and nine  
months ended Dec. 31, 1996, respectively, as compared to the same periods last year. Net revenues benefited in the current fiscal year from  
increased sales of microwave ovens attributable to a broader product line, larger size units and increased SKU selection by customers, and  
by sales of home theater and car audio products which were not introduced until the second and third quarters of the last fiscal year. Sales  
declined in Canada as a result of the company's decision to close its Canadian subsidiary's office and distribution operation in favor of an  
independent distributor.

The company reported a loss before non-operating charges for the third quarter and nine months ended Dec. 31, 1996, totaling $5,566,000  
and $13,598,000 compared to losses of $4,398,000 and $5,673,000 in the same periods last year. Non-operating charges aggregating  
$77,000 and $2,811,000 were recorded in the third quarter and nine months ended Dec. 31, 1996 to recognize the costs to restructure the  
company's Canadian and U.S. operations, and to write-off the costs related to the proposed but unsuccessful acquisition of International  
Jensen Inc. The company is currently in litigation attempting to recover such costs.

Gross profit margins in the current fiscal year were lower on a comparative basis due to lower sales prices (primarily video products), a  
higher proportion of close-out sales, inventory write- downs, the allocation of reduced fixed costs over a lower revenue base, and the  
recognition of income relating to reduced reserve requirements for sales returns in the prior year. However, profit margins were favorably  
impacted by the introduction of higher margin products - home theater and car audio products, and by a reduction in costs associated with  
product returns.

The company's selling, general and administrative expenses decreased by $345,000 and $1,634,000 in the third quarter and nine months  
ended Dec. 31, 1996, as compared to the same periods last year. The decrease was attributable to the company's continuing cost reductions  
programs in both its U.S. and foreign offices and lower selling expenses attributable to lower sales, partially offset by the reversal of  
accounts receivable reserves in the prior year periods due to a higher realization than anticipated on past-due accounts receivable.

Other operating costs and expenses declined by $495,000 and $1,418,000 in the third quarter and nine months ended Dec. 31, 1996, as  
compared to the same periods last year, primarily a result of a decrease in after-sale service costs relating to the company's licensing of its  
"Emerson(R)" trademark for sale of video products to its largest customer, and a settlement with a vendor on excessive product returns.

This press release contains forward-looking statements with respect to the results of operations and business of the company that involves  
risks and uncertainties. Actual results may differ materially from those stated depending upon a number of factors, including but not limited  
to product supply and demand, retail consumer electronics market, price competition, success of licensing arrangement, the company's ability  
to develop new products and competition from companies with greater resources. Please read Part II, Item 5 -- Other Information in the  
company's most recent quarterly report on Form 10-Q on file with the Securities and Exchange Commission for additional risks and  

Emerson Radio Corp., founded in 1948, is headquartered in Parsippany, N.J. The company designs and markets, throughout the world, full  
lines of televisions and other video products, microwave ovens, audio, car audio, and home theater products.

Emerson's Sport Supply Group, Inc. ("SSG") affiliate, a publicly held company since 1991, headquartered in Farmers Branch, Texas, is  
considered a leading direct marketer of sporting goods and equipment to serve the institutional market. SSG serves primarily schools,  
colleges, universities, government agencies, camps and youth organizations. It markets its products through specifically targeted direct mail  

                      (In thousands, except per share amounts)

                               Nine Months Ended      Three Months Ended

                                     Dec. 31,               Dec. 31,  
                                1996          1995     1996         1995

        Net revenues             $151,284      $214,720   $49,628

        Cost and expenses:  
         Cost of sales            145,354       198,184    48,818
         Other operating costs  
          and expenses              2,111         3,529       488
        Selling, general &  
         administrative expenses   14,698        16,332     4,993
        Restructuring and other  
         nonrecurring charges       2,811             -        77
                              164,974       218,045    54,376      73,812
        Operating loss            (13,690)       (3,325)   (4,748)
        Interest expense            2,525         2,322       867
        Loss before income taxes  (16,215)       (5,647)   (5,615)
        Provision (benefit) for  
         income taxes                 194            26        28
        Net loss                 $(16,409)      $(5,673)  $(5,643)
        Net loss per common  
         share                   $   (.42)      $  (.15)  $  (.14)    $
        Weighted average number
         of common shares  
         outstanding               40,281        40,253    40,295

CONTACT: Emerson Radio Corp., Parsippany Eugene I. Davis/John Walker/Eddie Rishty 201/884-5800