content="text/html; charset=iso-8859-1">

InterNet Bankruptcy Library - News for May 5, 1997

Bankruptcy News For May 5, 1997

  1. Phoenix Shannon subsidiary files for
            Chapter 11 protection

  3. America Online Reports FY97 Q3 Net Income
            of $2.6 Million

Phoenix Shannon subsidiary files for
Chapter 11 protection

SHANNON, Ireland--(BUSINESS WIRE)--May 5, 1997--Phoenix
Shannon p.l.c. (OTC:PHNXY) announced Monday that GiroCredit Bank,
the company's senior lender, placed the company in receivership
in Ireland.

Coopers & Lybrand was appointed by the bank as receiver.
Simultaneously, an involuntary bankruptcy petition was filed by
three of the company's creditors against the company under the
United States Bankruptcy Code. The filing was made in the United
States Bankruptcy Court for the District of Connecticut. Prior to
these filings, on April 25, 1997, Ney Dental International Inc.,
Phoenix's principal United States subsidiary, commenced a
proceeding pursuant to Chapter 11 of the United States Bankruptcy
Code, seeking protection from its creditors. This petition was
also filed in the United States Bankruptcy Court for the District
of Connecticut.

Following the Chapter 11 filing made by Phoenix's subsidiary,
Phoenix received notice of default from its senior lender
accelerating the payment of Phoenix's outstanding $6.2 million
indebtedness to the lender, and a notice of default from its
bondholders accelerating the payment of Phoenix's outstanding $20
million debt to its bondholders.

As disclosed previously, Phoenix is currently involved in
litigation with its former President and Chief Executive Officer,
Ola Johansson, and its former Vice President and Chief Financial
Officer, Brian Boland, to determine the authorized management of
Phoenix. On April 25, 1997, an Irish court issued a temporary
order against the current management of Phoenix, restraining its
board of directors from taking certain actions on behalf of

Phoenix is a service-oriented manufacturer and distributor of
high quality dental alloy compositions, durable equipment and
supplemental dental products used by dental laboratories, and
technicians in the fabrication of crowns, bridges and other
dental restorations. The company's headquarters are located in
the Shannon Free Zone, Ireland, with manufacturing facilities in
the United States. The company offers more than 250 products to
the estimated $2 billion plus world-wide dental restoration
market. World-wide marketing is conducted through a network of
subsidiaries and distributors in over 60 countries.

CONTACT: Phoenix Shannon p.l.c. H. George Wolfe Jr.,
President, 860/286-6157

America Online Reports FY97 Q3 Net Income of
$2.6 Million

DULLES, Va.--May 5, 1997--America Online, Inc. (NYSE: AOL)
today reported net income of $2.6 million, or $0.02 per share,
for the three months ended March 31, 1997, the first full quarter
since the Company's introduction of flat-rate pricing.

Third quarter revenues climbed 46 percent over the previous
year to a record $456.2 million, with revenues from sources other
than subscriptions nearly tripling to $74.7 million. Advertising
and electronic commerce revenues climbed 37 percent from the
December quarter to $60.7 million while, a year ago, they were
approximately $15 million.

In October 1996, the Company significantly changed its
business model, announcing unlimited use of AOL for a $19.95
monthly fee, and also discontinued its practice of amortizing
subscriber acquisition costs over 24 months to begin expensing
them as incurred. In the prior year period, which included
approximately $88.2 million in net deferred subscriber
acquisition costs, the Company reported net income of $15.1
million, or $0.14 per share, on revenues of $312.3 million.
Despite incurring a variety of unusual costs related to the
introduction of flat-rate pricing, the Company earned a profit in
the latest quarter primarily through lower marketing expenses.

As the Company announced last January, it held membership
relatively flat during the quarter, ending at 8,036,000
subscribers, while it worked to improve access for its existing
members through accelerated network expansion. The Company said
it had recently resumed marketing on a limited basis and plans to
continue carefully balancing demand for the service with its
ability to keep improving access.

Steve Case, Chairman and CEO, said: "We've made good
progress in laying a solid foundation for sustained profitability
based on our new business model of multiple revenue streams. We
are also pleased to have rapidly expanded our network to meet the
extraordinary level of demand for AOL. As promised, we have
worked around the clock to serve our existing members first and
our top priority was, and still is, improving access. At the same
time, we have achieved profitability a bit ahead of

Mr. Case added, "Starting this summer, AOL will take a
quantum leap forward with the roll-out of AOL 4.0 -- our
next-generation software. AOL 4.0 will enrich our members'
interactive experiences and reinforce our position as the
industry pacesetter and value leader. We anticipate continued
strong mass market demand for AOL and have an aggressive plan to
keep building out and upgrading our system."

With its introduction of flat-rate pricing plans, the Company
reported that members' usage of the service soared during the
quarter to an average of 124 million hours per month, compared to
an average of 52 million hours monthly just before the
conversion. More than 80 percent of its members are now on the
standard $19.95 flat-rate plan, with others using plans priced as
low as $4.95 for the first three hours.

America Online said that member cancellations, as expected,
increased in January because of the change to flat-rate pricing
and access issues. Importantly, member retention improved
steadily as the quarter progressed, with both trial member
conversions and retention rates for April hitting their highest
levels in the past year.

AOL's cash position improved to $197.8 million at March 31,
1997 from $130.2 million at December 31, 1996. As of March 31,
the Company also had $211.2 million in deferred revenue, up
$115.8 million from $95.4 million three months earlier, primarily
reflecting advance subscription payments and its marketing
agreement with Tel-Save Holdings, Inc. One year ago, the Company
reported $33.5 million in deferred revenue.

The Company's current $350 million system expansion program,
combined with its increased use of alternative networks, has
resulted in a substantial increase in capacity during the first
three months of calendar 1997. During this time, America Online:

-- Installed more than 75,000 new modems in AOLnet and leased
additional prime time capacity from outside suppliers and boosted
support for the "bring-your-own-access" option;

-- Increased the number of daily sessions by 3 million in the
quarter to more than 12 million;

-- Expanded system capacity to handle more than 335,000
simultaneous users -- an increase of 85,000;

-- Increased its e-mail capability to handle up to 13 million
pieces of mail daily -- to approximately 25 million recipients --
making it the largest commercial e-mail system in the world;

-- Boosted capacity to serve Web pages, now totaling more than
300 million Web hits daily;

-- Started construction of its third data center, a 180,000
square-foot facility due to open in Fall 1997, that will double
the Company's host/server system capacity.


Bob Pittman, President and CEO of AOL Networks, said: "A
key ingredient in AOL's success is its ease-of-use and
convenience. With our introduction of AOL 4.0 and other exciting
products like AOL Driveway, our `broadcast' product, and Personal
Publisher 3, an incredibly easy way for anyone to create a web
page, we will be making the Internet more accessible and engaging
than ever for the mass market."

Mr. Pittman added: "Advertisers, marketers and
independent content providers are increasingly recognizing the
power of the AOL community. During the past quarter, we
significantly enhanced our programming through agreements with
leading news and entertainment providers like ABC News, the New
York Times, and Hachette- Filipacchi magazines, as well as
leading retailers like Barnes & Noble. And, starting this
fall, our agreement with Tel-Save will give AOL members the
opportunity to get long-distance telephone service with unmatched
price and convenience. We also extended our global reach through
continued expansion in Europe and Canada and the April launch of
AOL Japan."

Starting this summer, AOL Networks said it would introduce AOL
4.0 -- the service's next-generation software -- which will
deliver a wide array of new features, advanced technologies and
exciting enhancements that will make exploring AOL and the
Internet faster and more interactive. Among its highlights are:

-- Engaging new multi-media technology that will make AOL
content come alive with rich animation, sound and streaming
pictures plus new magazine-style layouts for online articles;

-- Enhanced messaging, including pictures embedded in e- mail
and instant messages and rich text support for chat rooms;

-- Easier navigation and ease-of-use improvements like the
same combined tool bar for both AOL and the Web and the ability
to switch screennames on the fly.

During this quarter, Networks concluded a number of key
partnership and programming agreements including:

-- Its advertising and marketing agreement with Tel-Save
Holdings to offer competitively priced long-distance service to
AOL members under which the Company will share no less than
equally in profits generated from providing the new service to
its members. AOL will also receive up to 12 million Tel-Save
warrants based on the ultimate response rate, and has been paid
$100 million as a non- refundable advance against future revenues
and various deliverables;

-- Barnes & Noble became the exclusive bookseller in AOL's
Marketplace, offering its more than 1 million titles to AOL
members at discounts of 20 to 30 percent;

-- AOL and ABC News dramatically expanded their relationship
with AOL members now having access to a customized version of the
new ABC, which will provide up-to-the-minute news from
the world's leading broadcast news network;

-- AOL also broadened its relationships with leading partners
including The New York Times -- extending AOL's exclusive rights
to a range of content, including original programming, and
solidifying The New York Times as AOL's premier newspaper service
-- along with Hachette-Filipacchi, which expanded its
relationship to provide original online programming with a
variety of America's most popular magazines, including George,
ELLE, Premiere, and Car & Driver.

During the last quarter, AOL's content led all categories in
growth. Among the leading gainers in content usage were the
Personal Finance and Games channels, while total Internet usage
remained relatively constant at 20 percent of hours, and e-mail
volume increased from 7.5 million to 13 million pieces daily.

Despite it being a seasonally slow period for advertising, AOL
signed 27 new advertisers including Barnes & Noble, American
Greetings and TRW, bringing to more than 180 its roster of
clients, some 80 percent of whose advertising is focused
exclusively on providing consumer products and services as
opposed to technology.

The Company also made significant strides in expanding AOL
globally with the April 15 launch of AOL Japan, a state-of-
the-art service with a superior user interface, engaging content
and a pricing structure significantly below that of current
Japanese competitors. The Company passed 500,000 members in
Europe, just 16 months after launching the service.


Ted Leonsis, President and CEO of AOL Studios, said: "AOL
Studios continues to make progress toward its goal of being the
leading Internet content programmer. As owner or partner in more
than 35 separate titles and businesses, we are building enduring
businesses that are redefining the nature and scope of online and
Internet content."

Greenhouse Networks

During the last quarter, Greenhouse Networks continued to
develop its strategy of building consumer brands for
entertainment, sports, romance and women on AOL, the Internet and
on other Web delivery platforms by acquiring LightSpeed Media of
Culver City, CA, which will become the cornerstone of
Greenhouse's new Entertainment network launching later this year.
In addition, former NBC Programming Chief Brandon Tartikoff was
appointed chairman of the new Entertainment network.

Greenhouse also announced plans to license Firefly Network,
Inc.'s profile management and advanced collaborative filtering
technologies for its new consumer networks. Firefly's technology
will enable Greenhouse brands to create powerful relationships
with their customers and build communities by personalizing
content, products and sites based on individual preferences.

Digital City, Inc.

The Digital City network, which currently consists of 14
online interactive cities including eight of the country's top 10
markets, made significant strides during the quarter to reinforce
itsposition as the nation's leading provider of local interactive
content and services. Digital City has recently entered into
partnerships with technology and directory industry leaders such
as Switchboard, Electric Classifieds, Accipiter, and R.H.
Donnelley, as well as a strategic content relationship with Star
Tribune Online in Minneapolis. Digital City and clothing giant
The Gap recently signed an advertising agreement to introduce
first-ever online fragrance "sampling."

ImagiNation Network, Inc.

ImagiNation Network Inc., a leading online games and
entertainment company, has just acquired exclusive global rights
to the first online multiplayer version of Tetris, the most
popular electronic game in the world with more than 40 million
copies sold. The multiplayer version of Tetris will be available
to millions of online enthusiasts through ImagiNation's
distribution partnerships with AOL and leading Internet service
providers. ImagiNation Network also has acquired exclusive rights
to the first online version of SET, an interactive, action puzzle
game for all ages, which will be offered online later this year.

In addition, ImagiNation Network has entered into agreements
with AOL Networks and Microsoft Corporation to bring online
gaming to millions of users by enhancing games development.
ImagiNation will support DirectPlay technology and games, and
Microsoft Corp. will distribute unique elements of ImagiNation's
software development kit (SDK) as part of Microsoft's DirectX'
5.0 SDK.


"ANS is continuing to implement its plan to become a
major worldwide provider of mission-critical, Internet-based
managed network services," said Bruce Bond, ANS President
and CEO. "Through the successful introduction of new
services, the development of domestic and international alliances
with other industry leaders, and the expansion of our executive
management team, we are strengthening our reputation as a partner
of choice in this market."

Highlights for the quarter include the announcement of a
partnership with Bertelsmann AG, the world's second largest media
company, to establish joint ventures throughout Europe for
managed multimedia network services to the Global 1000. This is
an extension of an already strong partnership between AOL and
Bertelsmann, which began in March 1995 with the establishment of
AOL Europe, a joint venture for which ANS provides the network

Expanding on its strategy to provide complete solutions to its
customers, ANS announced alliances with Hewlett-Packard Company
and Connect, Inc. to provide Web-hosting services for high-end,
turnkey electronic commerce offerings. Also introduced was the
new ANS SecureConnect Service, which addresses the critical
business need for cost-effective, managed and secure Internet
access by combining a dedicated T1 connection with the National
Computer Security Association (NCSA)-certified ANS InterLock
Security Service at a very competitive price.

Additionally, ANS has appointed Allen T. Preece to the
position of Chief Financial Officer. Mr. Preece joined ANS from
Northern Telecom, where he most recently served as Vice President
and Treasurer for the multi-billion dollar global
telecommunications company.

America Online, Inc. (NYSE: AOL), based in Dulles, Virginia,
is the world's leading Internet online service, with
approximately 8 million members worldwide. AOL, founded in 1985,
offers its subscribers a wide variety of services including
electronic mail, conferencing, software, computing support,
interactive magazines and newspapers and online classes, as well
as easy access to services of the Internet. Personal computer
owners can obtain America Online software at major retailers and
bookstores, by calling 800/827-6364, or by downloading from

This release contains forward-looking statements within the
meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. Such statements are
based on management's current expectations or beliefs and are
subject to a number of factors and uncertainties which could
cause actual results to differ materially from those described in
the forward- looking statements. In particular, careful
consideration should be given to cautionary statements made in
the Company's reports filed with the Securities and Exchange

                           AMERICA ONLINE, INC. 
                       Consolidated Summary of
                (Amounts in thousands except per
                share data)

                             Three Months Ended  
                                  Nine Months
                                March 31,        
                                       March 31,


                               1997        1996  


   Online service 
    revenues             $381,486    $285,481   
   Other revenues          74,705      26,859    
                            -------     -------  

     Total revenues       456,191     312,340    

  Costs and expenses:                            

   Cost of revenues       288,215     183,644    
   Marketing               89,530      56,789    
   Product development     24,207      15,398    
   General and admini-
    strative               52,276      29,973    
   Write-off of deferred
    acquisition costs         -          -       
      385,221       -
   Acquired research and
  -          -             -        16,981
   Amortization of
    goodwill                1,398       1,816    
   Restructuring charge       -          -       
      74,327       -
                            -------     -------  
     Total costs and
        expenses            455,626     287,620  
          1,700,302    726,476

  Income (loss) from 
   operations                 565      24,720    

  Other income, net         1,981       1,280    
      3,165 3,572

  Merger expenses             -          (848) - 

  Settlement charges,
   net                         96          -     
                             ------      -------

  Income (loss) before 
   provision for                                 
     income taxes             2,642      25,152  

  Provision for 
   income taxes               -       (10,025)
  -       (21,885)
                          -------     -------    
                          ---------    -------

  Net income (loss)        $2,642     $15,127    
  $(505,852) $13,750
                            -------     -------  
                            ------- -------    
                            -------     ---------
  Earnings (loss)
   per share                $0.02       $0.14    
   $   (5.35)   $

  Weighted average shares 
   outstanding            113,789     111,232    

                              AMERICA ONLINE,
                       Consolidated Condensed
                       Balance Sheets
                             (Amounts in

                                     March 31,   

                                     June 30, 


  ASSETS                          (Unaudited)    

  Current assets:                                

   Cash, cash equivalents and 
    short-term investments       $197,834        
   Accounts receivable             93,460        
          72,613 Prepaid expenses and
    other current assets           83,524        

     Total current assets         374,818        

  Property and equipment 
   at cost, net                   126,849        

  Other assets:                                  

   Product development 
    costs, net                     67,728        
   Deferred subscriber acquisition
    costs, net                       -           
   Other assets                    69,668        
          40,825 Deferred income taxes          
   23,005               135,872 Goodwill, net    
                 40,452                51,691






  Current liabilities:                           

   Trade accounts payable         $76,499        
        $105,904 Other accrued expenses and
    liabilities                   292,176        
   Deferred revenue               166,943        
          37,950 Current portion of long-term
    debt and capital lease
    obligations                     2,097        

     Total current liabilities    537,715        

  Long-term liabilities:                         

   Notes payable                   18,531        
          19,306 Deferred income taxes          
   23,005               135,872 Deferred revenue
                 44,210                   -
   Minority interests               5,062        
             - Other liabilities               
   3,881                 1,168

     Total liabilities            632,404        

  Total stockholders' 
   equity                          70,116        





CONTACT: America Online Inc., Dulles Richard E. Hanlon,
703/265-2428 Michael Gross, 703/265-2339 Tricia Primrose,