InterNet Bankruptcy Library - News for February 21, 1997

Bankruptcy News For February 21, 1997

  1. Pioneer Files for Chapter Eleven to Protect Itself from UNOCAL Verdict While Pursuing Action Against Mobil

  2. Pudgie's Chicken, Inc. Announces Approval of Agreement With Secured Creditor

  3. Search Capital and MS Financial Agree With Lenders Led by Fleet Bank on Acquisition and on Terms for $75 Million Credit Facility

Pioneer Files for Chapter Eleven to Protect Itself from UNOCAL Verdict While Pursuing Action Against Mobil

SALT LAKE CITY, UT - Feb. 21, 1997 - Pioneer Oil and Gas (OTC BULLETIN BOARD: PIOL) announced that because of the UNOCAL  
litigation pending in California, Pioneer sought protection under Chapter 11 of the bankruptcy code on February 19, 1997. Pioneer intends to  
deal with all creditors claims including those of UNOCAL in the context of a Chapter 11 reorganization. Pioneer believes a plan of  
reorganization will be proposed as soon as possible and hopes to emerge from bankruptcy in a reasonable amount of time. Pioneer believes  
that the action UNOCAL is asserting against Pioneer is the sole responsibility of Mobil Oil Corporation.

Don J. Colton, President of Pioneer commenting on this lawsuit stated:

It is unfortunate that UNOCAL and Mobil worked out an agreement that UNOCAL would have to bankrupt Pioneer before it could sue  
Mobil. The original lawsuit filed in California named both Mobil and Pioneer as defendants. However, UNOCAL pressured by Mobil on  
other California projects, for which UNOCAL was required to obtain Mobil's consent, dropped Mobil from the lawsuit. Pioneer attempted  
to bring Mobil back into the litigation but our motion was denied by the California court. Pioneer was then forced to sue Mobil separately in  
federal court in Salt Lake City. The problem is that our action against Mobil will probably not be heard by the court until 1998. In the  
meantime UNOCAL is pursuing its $563,158 verdict obtained at trial and also claiming that Pioneer is liable for additional sump cleanup of  
about two million dollars. The sumps which are oil filled reserve pits buried under eight feet of fill were not disclosed to Pioneer by Mobil  
when the property was sold to Pioneer for $12,365 in 1987. We believe Mobil Oil Corporation intentionally sold the property to Pioneer to  
avoid this liability. An inspection of the property by Pioneer did not disclose the existence of this liability since the sumps had been buried  
and farm crops and other vegetation were growing over them. The sumps were created in the 40's and 50's and instead of being remediated  
at the time as is current standard industry practice were instead just covered over with fill. Pioneer believes it will prevail against Mobil in  
its lawsuit and that Mobil will be responsible for all costs asserted by UNOCAL and in addition Mobil may have to pay Pioneer punitive  
damages. Our problem is timing, because of the California court decision, UNOCAL can obtain a judgment against Pioneer before we can  
prevail against Mobil.

Pioneer Oil and Gas has 41,403,478 shares outstanding with over 2,000 shareholders and is traded nationally over the counter on the  
NASDAQ-BBS with the symbol PIOL.

SOURCE Pioneer Oil and Gas /CONTACT: Don J. Colton of Pioneer Oil and Gas, 801-566-3000/

Pudgie's Chicken, Inc. Announces Approval of Agreement With Secured Creditor

UNIONDALE, N.Y., Feb. 21, 1997 - Pudgie's Chicken, Inc. (Nasdaq: PUDGQ), an operator of quick service takeout and delivery Pudgie's  
restaurants, announced today that on February 12, 1997 the Bankruptcy Court overseeing its Chapter 11 case approved an agreement among  
Pudgie's, its secured creditor and its Official Creditors and Equity Security Holders Committees that will pave the way for Pudgie's  
successful reorganization. Pursuant to the Agreement, the secured creditor agreed to vote in favor of any plan of reorganization that pays the  
secured creditor $1 million on account of its $3.6 million secured claim and provides the secured creditor with a proportionate share of any  
stock given to unsecured creditors in satisfaction of the balance of its claim. The Agreement also allows Pudgie's to obtain further DIP  
financing senior to the secured lender's claim, to use the secured creditor's cash collateral on a final basis and to release all franchise fees  
previously held in escrow. In exchange, the Company and the Official Committees agreed to recognize the validity of the secured creditor's  
claim and end all litigation relative to that claim.

Steve Wasserman, President and Chief Executive Officer of Pudgie's, said, "This Agreement is an important milestone for Pudgie's  
reorganization efforts. It enables the Company to discuss proposals put forth by potential third parties who are interested in making  
investments in Pudgie's. Since the agreement was reached, Pudgie's has been soliciting third parties interested in providing interim financing  
and long-term equity investments."

Pudgie's Chicken announced on September 18, 1996 that it had filed a voluntary petition for reorganization under Chapter 11 of the  
Bankruptcy Code.

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

You can contact pudgie's on their web site at:


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

Search Capital and MS Financial Agree With Lenders Led by Fleet Bank on Acquisition and on Terms for $75 Million Credit Facility

DALLAS, TX - Feb. 21, 1997 - Search Capital Group, Inc. (OTC Bulletin Board: SCGI, SCGIP) announced that it had obtained the  
necessary consent from the lenders to MS Financial, Inc. ("MSF") (Nasdaq: MSFI) to continue their banking arrangements with MSF through  
the closing of the previously announced acquisition of MSF by Search.

A letter agreement and consent signed February 19, 1997, between Search, MSF and Fleet Bank, N.A., agent bank for the seven member  
bank group, provides for amendment of the existing loan agreement between MSF and the banks. The agreement with the lenders also  
includes terms for the continuation of the line of credit after the closing of the acquisition. The agreement and consent from the banks was one  
of the conditions to the acquisition of MSF by Search. The acquisition, which is projected to take place before May 15, 1997, is still subject  
to regulatory approvals, other customary conditions, and completion of final documentation with the banks.

Under the terms of the agreement with the banks, during the interim period until the closing of the acquisition by Search, MSF will be  
allowed continued use of a $75 million line of credit for the purchase of new loan contracts. After the completion of the acquisition by  
Search, the line of credit will be available for use by the newly merged subsidiary of Search. Search's merged subsidiary will be able to use  
the $75 million credit line for up to six months. Thereafter, the credit line will be reduced to $50 million for the next six months and must be  
repaid in full within twelve months after the closing of the acquisition.

"This support from the banks should enable MS Financial to continue in full operation through the closing of the acquisition. MS Financial's  
ability to maintain branch operations and support the dealer network during the interim period until the acquisition closes is an important  
factor in the preservation of the value that Search expects to obtain through this transaction," said George C. Evans, Search's chairman,  
president and chief executive officer.

Mr. Evans noted that, although the non-prime auto finance sector is presently in a state of turmoil, Search is positively positioned in the  
non-prime auto finance arena with its veteran consumer finance management team, solid balance sheet, and highly effective decentralized  
servicing/collection operations. He believes that the willingness of Fleet Bank and the six other banks to continue the MSF credit line is  
further evidence of their confidence in the strength of Search's management team and operations.

Search Capital Group, Inc. is a specialized financial services company engaged in the purchasing, financing and servicing of non- prime  
automobile installment loans. Search is also initiating non- auto consumer finance operations. Search common shares and its 9%/7%  
convertible preferred shares are traded on the Over the Counter Bulletin Board under the symbols "SCGI" and "SCGIP", respectively.

MS Financial (Nasdaq: MSFI) is a specialized consumer finance company that purchases and services retail installment contracts on new  
and used cars and light duty trucks. The company serves more than 800 dealerships in 13 states.

SEC Cautionary Safe Harbor Language This press release contains certain forward-looking statements, as defined in the Private Securities  
Litigation Reform Act of 1995, with respect to the effects that continuation of MSF's credit line is expected to have on MSF's operations and  
that the acquisition of MSF will have on Search's financial position and earnings. These statements are based on current expectations that  
involve a number of risks and uncertainties, and actual results may differ materially. Factors that may cause or contribute to such differences  
include the ability of MSF to maintain branch operations and support the dealer network, Search's actual growth rate, delinquency and  
default rates with respect to the contracts included in its and MSF's portfolios, the extent to which expected operating efficiencies are  
realized, changes in business and market conditions and the economy in general, increased competition, changes in governmental and  
regulatory matters, unforeseen litigation and other risks factors identified in Search's SEC filings under the caption "Risk Factors."

SOURCE Search Capital Group, Inc. /CONTACT: James F. Leary, Vice Chairman, Finance of Search Capital Group, Inc., 214-965-6000;  
or Vann Martin, President and COO of MS Financial, Inc., 601-978-6643/