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InterNet Bankruptcy Library - News for May 16, 1997

Bankruptcy News For May 16, 1997

  1. Koo Koo Roo Announces Record
            Revenues for 1997 First Quarter

  3. Raytech announces first quarter
            results for 1997

  5. Nahant Man Sentenced To Over 2 Years'
            Imprisonment For Bankruptcy Fraud

  7. Notice of pendency of class action on
            behalf of purchasers of The Common Stock of Sears Roebuck
            & Co.

Koo Koo Roo Announces Record Revenues for
1997 First Quarter

LOS ANGELES, Calif., May 16, 1997 - Koo Koo Roo, Inc. (Nasdaq
National Market: KKRO) today announced that it has achieved
record revenues for the quarter ended March 31, 1997 of $12.3
million, a 64% increase as compared to $7.5 million in the same
quarter of 1996.

The company reported a net loss of $3.50 million for the
quarter, or ($0.22) per common share before preferred dividends
as compared to a net loss of $1.80 million, or ($0.12) per common
share for the same quarter last year on a lesser number of
shares. The net loss for the current quarter after preferred
dividends was ($0.26) per common share. The net loss included
$0.95 million representing the Company's share of the loss
reported by Color Me Mine, Inc., a 90% owned subsidiary of Koo
Koo Roo, Inc.

Restaurant sales were $11.2 million in the current quarter
compared to $7.1 million in the same period of the prior year, an
increase of 58.4%. Cost of sales increased to 72.3% of sales
compared to 70.4% in the same period of the prior year due to
costs associated with stores opened in new markets in 1996
(including New York, Colorado and Northern California). Operating
expenses decreased to 51.3% from 55.4% in the same period of the
prior year. This decrease was primarily due to the increase in
sales resulting from the additional locations opened since the
end of the first quarter of 1996. Same store sales were flat

Ken Berg, the company's chairman and chief executive officer,
commented, "During the quarter we had two of our best
openings ever in West Hollywood and Burbank, California, and in
May successfully opened our first international joint venture in
Toronto, Canada. Further, we have begun signing leases for our
new Koo Koo Roo 2000 concept, a scaled-down version of our
regular restaurant with a consequent reduction in cost, and our
first 700 square foot airport opening is slated for the National
Airport in Washington, D.C., with three other openings planned in
the Washington area this year."

The net loss attributable to the restaurant operations of $2.5
million was due in large part to the continued cost of the
company's corporate infrastructure designed to support future
growth of Koo Koo Roo restaurants, slower than anticipated
openings, and losses attributable to new markets. The company's
corporate overhead contemplates a greater number of stores and
studios than are currently open and will support a greater rate
of new development than is presently occurring.

Rob Kautz, president and CFO of Koo Koo Roo, Inc., also
commented, saying "Our focus is on accelerating the signing
of new leases, and the subsequent permitting, construction and
opening of those stores. Over the past year we signed new leases
at the rate of approximately one per month. Today, we have eleven
leases signed with five stores under construction and are in a
position to sign at least ten leases this quarter, a tripling of
our lease signing rate. And of course, an increase in lease
signings translates into an increase in store openings."

Color Me Mine's net loss for the quarter ended March 31,
1997was $1.05 million compared to break-even results for the
quarter ended March 31, 1996. Revenues for the three month period
ended March 31, 1997 were $721,000 compared to $271,000 for the
three month period ended March 31, 1996, an increase of 166%.
Sales for the quarter ended March 31, 1997 were produced by nine
Color Me Mine ceramics studios owned and operated by the Company,
two of which were open during the same period of the prior year.
Color Me Mine's operations were negatively impacted primarily by
the costs of franchise development, and also by certain factory
inefficiencies and the seasonality of store operations.

Commenting on the Color Me Mine subsidiary, Mr. Kautz added,
"Restructuring of this division continues on track.
Subsequent to the end of the first quarter, we were able to
reduce the number of times a piece is handled at the factory from
five to two times and reduced the labor cost by over sixty
percent. In addition, we changed our focus from joint ventures to
franchises which reduces capital requirements, and certain
management changes and overhead reductions were implemented.
Presently, Color Me Mine has one executed franchise and 10
executed letters of intent representing 22 anticipated franchise

Finally, commenting on the company's previously announced
purchase of 14 full-service restaurants in the Hamburger Hamlet
bankruptcy, Mr. Kautz said, "These stores are generating
substantial cash flow. We expect them to significantly enhance
our ability to attain positive cash flow from operations and
ultimately profitability."

During the first quarter of 1997, the Company received $29.0
million before expenses of $2.2 million from the private
placement of 290,000 shares of the Company's Series B Adjustable
Convertible Preferred Stock for $100.00 per share.

The Company now operates 28 restaurants; 24 in California, two
in Florida, one in Colorado, and one in New York. Arrosto Coffee
Company, a subsidiary, operates a coffee bean micro-roastery
which places over half of its output into licensed locations in
ten Koo Koo Roo restaurants and is also constructing a prototype
family coffee house in Los Angeles, California. Color Me Mine,
also a subsidiary, operates a 20,000 square foot ceramics
production facility in Los Angeles and both company owned and
franchised paint- your-own ceramic studios located in California,
New Jersey, and Florida.

Forward-looking statements and comments in this press release
are made pursuant to the safe-harbor provisions of Section 21E of
the Securities Exchange Act of 1934. Such statements relating to,
among other things, the prospects for the Company to increase the
level of new unit development, improve the operations of its
Color Me Mine subsidiary, complete the acquisition and profitable
integration of certain Hamburger
assets and enhance operating results, are necessarily
subject to risks and uncertainties, some of which are significant
in scope and nature, including risks related to real estate,
construction, availability of capital and continuation of sales
levels. These risks are further discussed in the periodic reports
and registration statements filed by the Company from time to
time with the Securities and Exchange Commission.

                                  KOO KOO ROO,
                          (In thousands, except
                          share data)




        Revenues                       $7,476    

        Gross profit                    2,330    

        Operating expenses              4,107    

        Net Loss                      (1,702)    

        Dividends on preferred stock:
         Paid in cash or common shares   (49)    
                       (293) Deemed dividends (a)
                      --                   (430)

        Net loss attributable to
         common stockholders          (1,751)    
        Per share:
          Net loss                   $ (0.12)    
                     $ (0.22) Dividends on
          preferred stock     --                 
          (0.04) Net loss per common share  $
          (0.12)                $ (0.26)

        Weighted average number of
         common and common equivalent
         shares                    14,357,204    

        At March 31                      1996    

        Cash and Marketable
          Securities                  $33,460    
        Total Assets                   56,304    
                     74,124 Stockholders' Equity
                 50,526                  65,277

(a) In accordance with the SEC Staff's recent position on
accounting for preferred stock which is convertible at a discount
to the market, the deemed dividend is a one-time accounting
charge which relates to the discount feature associated with the
Company's 5% Convertible Preferred Stock.

SOURCE Koo Koo Roo, Inc. /CONTACT: Rob Kautz, President &
CFO of Koo Koo Roo, Inc., 310-479-2080, or Michael Manahan,
Partner, Coffin Communications Group, 818-789- 0100/

Raytech announces first quarter results
for 1997

SHELTON, Conn.--May 16, 1997--Raytech
(NYSE:RAY) today announced net income for the 13 week
period ended March 30, 1997 amounting to $4,282, or $1.22 per
share as compared with $3,691, or $1.09 per share for the
corresponding period in 1996.

The overall improvement is the result of increased sales in
the domestic market segments, partially offset by lower margins
due to competitive pricing pressures. European sales decreased
primarily due to foreign currency fluctuation.


During the first quarter of 1996, the company acquired certain
assets from Advanced Friction Materials Co. ("AFM") in
Sterling Heights, Mich., and also acquired a 47% equity interest
in AFM.

Net sales up 13.6%

Net sales for the 13-week period ended March 30, 1997
increased 13.6 percent to $59,121 as compared with $52,037 for
the same period one year ago. The overall improvement for the
13-week period is primarily due to additional sales of
approximately $4,657 related to the Sterling Heights operations
and additional volume within the domestic automotive, agriculture
and construction product market segments. Excluding Sterling
Heights, domestic sales increased by $3,766 compared to last
year. However, European sales decreased by $1,339 primarily due
to foreign currency fluctuation.

The company has been under the protection of the U.S.
Bankruptcy Court relating to asbestos personal injury and
environmental liabilities since March 1989. The ultimate
liability of the company with respect to asbestos-related,
environmental or other claims cannot presently be determined.

Raytech Corp. is headquartered in Shelton, Conn., with
operations serving world markets for energy absorption and power
transmission products, as well as custom-engineered components.

                      (000's omitted, except
                      share data)

  Comparative results are as follows:

                                  For the 13
                                  weeks ended
                                  March 30     
                                  March 31

  Net Sales                    $ 59,121      $
  52,037 Net income                   $  4,282   
    $  3,691 Net income per share(a)      $  
  1.22      $   1.09 Weighted average shares
    outstanding               3,522,455    

(a) The company has been under the protection of the U.S.
Bankruptcy Court relating to asbestos personal injury and
environmental liabilities since March 1989. The ultimate
liability of the company with respect to asbestos-related,
environmental or other claims cannot presently be determined.

CONTACT: Raytech Corp., Shelton A.A. Canosa, 203/925-8000

Nahant Man Sentenced To Over 2 Years'
Imprisonment For Bankruptcy Fraud

BOSTON, MA - May 16, 1997 - A Nahant, Massachusetts man was
sentenced today to two years and nine months' imprisonment for
making false statements in his bankruptcy schedules and statement
of financial affairs.

United States Attorney Donald K. Stern stated that ROBERT J.
ROWE, 48, of 14 Fenno Way, Nahant, Massachusetts, was sentenced
today by U.S. District Judge Robert J. Keeton to two years and
nine months' imprisonment, to be followed by three years of
supervised release. ROWE was convicted in February after a nine
day jury trial. The evidence at trial showed that ROWE made false
statements under penalty of perjury in his bankruptcy schedules
concerning his ownership interest in real estate located at 20
Highland Avenue in Nahant, and concerning the rent he claimed he
was paying for his personal residence. Judge Keeton found that
ROWE intended to cause a loss in excess of $120,000 by his
offenses. Judge Keeton also concluded that ROWE obstructed the
government's investigation of his offenses by preparing a
backdated document and causing it to be presented to federal

The case was investigated by the Federal Bureau of
Investigation, referred by the U.S. Trustee's Office in Boston,
and was prosecuted by Assistant U.S. Attorney Mark J. Balthazard
of Stern's Economic Crimes Unit.

SOURCE U.S. Attorney Office /CONTACT: Amy Rindskopf or Joy
Fallon, 617-223-9445, both of the U.S. Attorney's Office/

Notice of pendency of class action on behalf of purchasers of
The Common Stock of Sears Roebuck & Co.

CHICAGO, IL--May 16, 1997--On April 16, 1997, the law firm of
Wolf Haldenstein Adler Freeman & Herz, LLP filed a class
action lawsuit in the United States District Court for the
Northern District of Illinois on behalf of all purchasers of the
common stock of Sears Roebuck & Co. ("Sears")
during the period April 16, 1994 through April 10, 1997 (the
"Class period"). The case number is 97C2636. The judge
is the Honorable George W. Lindberg.

The complaint charges Sears and certain of its directors and
officers with violations of Section 10(b) and 20(a) of the
Securities Exchange Act of 1934, and SEC Rule 10b-5 for, among
others things, recklessly signing off on Sears' financial
statements during the Class period when they knew that Sears'
earnings were materially overstated because they included
payments by Sears' bankrupt credit card customers who had signed
debt reaffirmations which Sears had failed to file with
bankruptcy courts throughout the United States in violation of
federal bankruptcy law.

The plaintiff seeks to recover damages on behalf of Class
members and are represented by the law firms of Wolf Haldenstein
Adler Freeman & Hertz LLP, Berman DeValerio & Pease, LLP,
and Much Shelist Freed Denenberg Amant Bell & Rubenstein,
P.C., all of whom have had extensive experience in securities
class action litigation and have obtained over one billion
dollars in awards for their clients.

If you are a member of the Class described above, you may, no
later than 60 days form April 16, 1997, move the Court to serve
as lead plaintiff of the Class, if you so choose. In order to
serve as lead plaintiff, however, you must meet certain legal

If you wish to discuss this action or have any questions
concerning this notice or your rights, please contact any of the
following: Wolf Haldenstein Adler Freeman & Hertz LLP, 270
Madison Ave., New York, N.Y. 10016, Robert Abrams, Esq. or
Michael Miske, 800/575-0735, e-mail at

CONTACT: Wolf Haldenstein Adler Freeman & Hertz LLP Robert
Abrams, Esq. or Michael Miske, 800/575-0735 e-mail at;