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InterNet Bankruptcy Library - News for July 25, 1997







Bankruptcy News For July 25, 1997




        
  1. Comptroller's Office outlines procedures
            for investors filing claims in the case of First Lenders
            Indemnity Corp.

  2.     
  3. Navarre Corporation Reports First
            Quarter Operating Results

  4.     
  5. Riddell Sports Inc. Announces Court
            Approval of Settlement of Fraudulent Transfer Actions

  6.     
  7. Richard Schuetz Resigns from
            Stratosphere; Stratosphere in Negotiations with Major
            Holder of First Mortgage Notes



 






Comptroller's Office outlines procedures for investors filing
claims in the case of First Lenders Indemnity
Corp.



ORLANDO, Fla.--July 25, 1997--The Comptroller's Office Friday
outlined procedures for investors wishing to file claims in the
case of First Lenders Indemnity Corp. (FLIC), which recently
filed for bankruptcy in United States Bankruptcy Court in
California.



FLIC maintained offices in Florida and California, and sold
securities in the form of promissory notes to buy auto retail
installment contracts (sometimes called buy-here-pay-here
contracts) through Boston Acceptance Corp. Investors were told
that the total offering was for no more than $50 million.



In September 1996, as a result of an investigation by the U.S.
Securities Exchange Commission, FLIC and its principals -
Jonathan Boston and James Cunningham - were enjoined by a federal
court in Los Angeles, from any further selling of securities in
violation of federal anti-fraud provisions. Their bank account at
Bank One, in Texas, which held FLIC investor money and
collateral, was frozen by the bank in November, 1996, due to a
dispute between Bank One and FLIC. Bank One was replaced by
SunTrust in Orlando, which subsequently froze the FLIC account in
April, 1997.



In March, 1997, the Florida Department of Banking and Finance
issued a Cease and Desist Order against FLIC and its President,
James Cunningham, which halted the company's securities sales in
Florida. At least eight other states have also issued Cease and
Desist Orders against FLIC.



In June, 1997, FLIC filed for bankruptcy in U.S. Bankruptcy
Court. FLIC has filed a list of creditors - which includes
investors - with the court, and investors should receive notices
from the court. If investors are not notified by the court, they
must file a claim by obtaining a standard Proof of Claim form
from any bankruptcy court and mailing it to the U.S. Bankruptcy
Court, Central District of California, 34 Civic Center Plaza,
Room 506, Santa Ana, CA, 92703, noting the case number
SA97165760-LR. Creditors do not need an attorney to file this
form with the court.



The court has appointed Peter C. Anderson, Esq. (Rocquemore,
Pringle & Moore Inc., 6055 E. Washington Blvd., Ste. 608, Las
Angeles, CA 90040) to handle the affairs of FLIC and to marshal
assets. Accounts in the name of FLIC that contain funds or
collateral have been frozen by the court.



Investors wishing to file a complaint against FLIC regarding
securities purchased through them may contact attorney Mark Lytle
at the Securities Exchange Commission, 5670 Wilshire Blvd., 11th
Floor, Los Angeles, CA, 90036. Florida investors wishing to
discuss matters involving the FLIC investigation should contact
Roger C. Handley, Central Florida Regional Office, Department of
Banking and Finance, at 407/245-0760.



CONTACT: Central Florida Regional Office 407/245-0760






Navarre Corporation Reports First Quarter
Operating Results



MINNEAPOLIS, MN--July 25, 1997--Navarre Corporation (Nasdaq:
NAVR), a leading national distributor of music, computer software
and interactive CD-ROM products, today reported operating results
for its fiscal 1998 first quarter ended June 30, 1997. Sales in
the first quarter increased by 1 percent to $39,798,000 from
$39,592,000 in the same period last year. Navarre reported a net
loss for the quarter of $1,060,000, or 15 cents per share,
compared to net income of $201,000, or 3 cents per share in the
same period last year. Gross margin was $4,275,000, or 10.7
percent of net sales vs. $5,067,000, or 12.8 percent for the same
period last year.



The overall decline in gross margin as a percent of net sales
was primarily due to the losses incurred in connection with the
settlement of a lawsuit to a vendor.



Eric Paulson, Navarre's chairman and chief executive officer
said, "While computer software sales declined by 5 percent,
gross margin for computer products as a percent to sales held
even with last year's first quarter. Music sales were strong in
the quarter, posting a healthy 14.8 percent increase over last
year. The strength in our music business was due to aggressive
release schedules from a number of Navarre's new proprietary
labels.



"However, the remaining uncertainty in today's retail
marketplace has continued to put pressure on Navarre's financial
performance. To move our company toward profitability, we have
initiated a cost reduction program across all areas of our
operations," Paulson said. Paulson also stated that Navarre
is adequately reserved against any potential loss from the
recently announced Chapter 11 bankruptcy filings of href="chap11.montgomeryward.html">Montgomery Ward and
Alliance Entertainment, two of the Company's customers.



"During the first quarter we made meaningful progress in
strengthening Navarre for the future," Paulson said.
"We finalized arrangements for a new $45 million revolving
credit facility, providing Navarre with improved financial
resources to enable us to capitalize on the opportunities that we
see. We have also completed a restructuring of our organization,
in accordance with our recently completed strategic plan. While
many companies in our industry are cutting back, Navarre is
making the changes required to stay out in front of our
fast-paced, dynamic marketplace. We feel confident that the
changes we are making within our organization will strengthen our
position in the industry."



Navarre Corporation is a major publisher and distributor of
music, software and interactive CD-ROM products nationwide.
Navarre also owns and operates NetRadio Network
(www.netradio.net) a leading audio-centric content provider on
the Internet that specializes in using streaming technology to
enable computer users to listen to audio -- both music and news
-- while the user accesses the Internet or works on PC desktop
applications.



For further information, please visit Navarre's website at
www.navarre.com. -0- *T



Navarre Corporation (Amounts in thousands, except per share
data)



Three months ended Jun e 30, 1997 1996 Sales $39,798 $39,592
Gross profit 4,275 5,067 Operating expenses 5,586 4,161 Operating
income (loss) (1,228) 908 Net income (loss) $(1,060) $201
Earnings (loss) per common share $(.15) $.03 Weighted average
common and



common equivalent shares outstanding 6,902 6,442



*T



This news release, as it relates to expectations regarding
future sales and profitability, contains forward-looking
statements regarding future performance of the company and its
products. The company's actual results could differ materially
from the estimates made in the forward-looking statements as a
result of a number of factors, including the risks and
uncertainties inherent in the company's business, the retail
market for prerecorded music and consumer software products,
customer buying patterns, new and different competition in the
company's traditional and new markets and the rate of new product
development and commercialization by the company.



CONTACT: Swenson/Falker Associates, Inc. Doug Ewing
612/371-0000 or Navarre Corporation Eric Paulson, CEO Charles
Cheney, CFO 612/535-8333






Riddell Sports Inc. Announces Court
Approval of Settlement of Fraudulent Transfer Actions



NEW YORK, NY - July 25, 1997 - Riddell Sports Inc. (Nasdaq:
RIDL) announced today that as expected it had obtained the
approval of the bankruptcy court of New Jersey to the settlement
of two fraudulent transfer actions pending against the Company on
substantially the same terms as previously reported.



The Company expects that the settlement will be effective in
August 1997, assuming no appeal to any court order is taken and
no objection is filed within the prescribed period.



Riddell Sports Inc. is a leading manufacturer and
reconditioner of football equipment and through its subsidiary,
Varsity Spirit Corporation, is the nation's leading supplier of
products and services to cheerleader and dance teams. The Company
also sells sporting goods (including mini- and full- size helmets
made for collectors) under the Riddell(R) and Pro-Edge(R) brands,
provides reconditioning services for football and other sports
under the Riddell/All American brand and licenses the Riddell and
MacGregor(R) trademarks for use on athletic footwear and leisure
apparel.



SOURCE Riddell Sports Inc. -0- 07/25/97 /CONTACT: David
Groelinger, Chief Financial Officer of Riddell Sports,
212-826-4300, or fax, 212-826-5006/






Richard Schuetz Resigns from
Stratosphere
; Stratosphere in Negotiations with Major Holder
of First Mortgage Notes



LAS VEGAS, NV--July 25, 1997--href="chap11.stratosphere.html">Stratosphere Corporation
announced today that Richard Schuetz, President and Chief
Executive Officer of Stratosphere Corporation resigned as a
director and officer of the Company. The Company stated that Mr.
Schuetz has agreed to stay in his position for a period of up to
thirty days to assist the Board in the development of a
succession plan.



Lyle Berman, Chairman of the Board for the Company, stated
"Richard has done everything that could be expected of him
and more. He truly made the best of a difficult situation."
Mr. Schuetz was appointed President of Stratosphere in July 1996.



Stratosphere also announced that it has received a proposal
and entered into negotiations with High River Limited Partnership
and American Real Estate Partners, L.P. with respect to a
restructuring plan. The Independent Board of Directors has
preliminarily determined that this proposal is more favorable
than the previous proposal made by Grand Casinos Inc. If the
current negotiations with High River and American Real Estate
Partners are successful and the resulting reorganization plan is
confirmed by the Bankruptcy Court and implemented, Stratosphere's
noteholders would make an additional investment in Stratosphere
and would own all of the equity of the company. High River and
American Real Estate Partners have advised Stratosphere that they
collectively own $94 million principal amount of the $203 million
outstanding Stratosphere First Mortgage Notes and are prepared to
enter into a standby commitment to guarantee the availability of
the additional investment.



Under the High River/American Real Estate proposal (as under
the proposal made by Grand Casinos, Inc.), the existing common
stock of Stratosphere would be cancelled and would have no value.



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.



CONTACT: Stratosphere Corporation Tom Lettero - 702/383-5207