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/raid1/www/Hosts/bankrupt/TCR_Public/971029.MBX T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, October 29, 1997 Vol. 1, No. 47 Headlines ALL FOR A DOLLAR: Opposed to Trustee’s Motion to Convert AMTRAK: Strike Postponed, but Bankruptcy Looms CINCINNATI MICROWAVE: Staff May be Paid, But Stockholders Get Naught DOW CORNING: Breast Implant Suit To Resume Next Year KIA GROUP: Conglomerate to be Disbanded LOT$OFF: Corporation Names CFO LOUISE’S TRATTORIA: Proof of Claims Filing Date TAL WIRELESS: Files for Bankruptcy VOICE POWERED: Date for Filing Proofs of Claims WESTERN PACIFIC: Cash Infusion Hangs on Plane Sale WESTERN PACIFIC: MAX to Be Paid, Stay of Action on Contract ----- ALL FOR A DOLLAR: Opposed to Trustee’s Motion to Convert --------------------------------------------------------- All For A Dollar, Inc., is opposed to the application of the U.S. Trustee’s Office to convert its Chapter 11 case to a Chapter 7 case or to dismiss the case. The company says it no longer conducts any business or operations after Hilco/Great American liquidated the inventory and it sold furniture, fixtures, and equipment at auction. The company says it is preparing a liquidating plan of reorganization, but is having difficulty reconciling its books and records for the period of the going-put-of-business sales. Until such reconciliation, monthly operating reports for the U.S. Trustee cannot be filed. Furthermore, without the reconciliation the debtor and the Official Committee of Unsecured Creditors cannot determine whether any claims against Hilco exist. If there are claims, the debtor intends to pursue them for the benefit of its creditor the completion of liquidation sales of inventory An application to hire J.M. O’Brien & Company P.C. to prepare this financial accounting is currently pending approval by the Office of the U.S. Trustee. The company says it and the committee are more than capable of pursuing any claims that may exist against Hilco without incurring the additional expense of a Chapter 7 trustee. The company further asserts it and the committee can formulate a confirmable liquidating plan of reorganization under which All For A Dollar’s creditors will be paid. AMTRAK: Strike Postponed, but Bankruptcy Looms ---------------------------------------------- Amtrak is losing so much money that it could go broke by spring -- or sooner if Amtrak maintenance workers begin a threatened strike over wages and other labor issues. The railroad is so cash poor it will have to borrow $80 million this year just to make payroll, according to the GAO. President Tom Downs says the main point of the strike, a 3.5 percent wage increase, could push Amtrak to near bankruptcy in less than a week. The strike was averted Monday until at least November 6 because of progress made in bargaining between Amtrak and the 2,300-member Brotherhood of Maintenance of Way Employees, a Transportation Department official said. Senate Majority Leader Trent Lott (R-Miss) indicated Monday that he would introduce legislation that would extend the strike deadline, perhaps to February 15, to allow the sides more time to work out differences. Democrats have been blocking a $2.3 billion GOP bailout of the government-subsidized railroad. At issue is deleting a provision making laid-off Amtrak employees eligible for a year of severance pay for each year worked up to six years. Lott also said he intended to attach to the strike extension a bill that would require significant changes in the way the federally subsidized railway operates. The bill gives the Amtrak board of directors greater freedom in determining routes based on profitability, authorizes $3.4 billion for operating expenses through 2000, and eases current labor protections on contracting out work and layoffs. CINCINNATI MICROWAVE: Staff May be Paid, But Stockholders Get Naught -------------------------------------------------------------------- Cincinnati Microwave Inc.’s proposed liquidation plan allots 34 cents on the dollar to Class 4 claimants comprising vendors and former workers with legitimate claims, who are allowed by bankruptcy law to file for up to $4,000 in wage or vacation compensation. But stockholders with Class 7 claims shouldn't expect any cash, says the Cincinnati Post. The plan must still be approved by U.S. Bankruptcy Court Judge Burton Perlman. A hearing is scheduled for next month. Thus far, Microwave has raised $15.9 million by liquidating assets. Class 1 secured creditor Foothill Capital Corp., should receive 100 percent of its claim and has already has been paid $3.79 million, according to court documents. Under the plan, Class 2 secured creditor First Data Merchant Services Corp. would receive 100 percent. Class 3 unsecured creditors, including attorneys in the bankruptcy case, who would receive 100 percent of their claims. The largest unsecured claim for $1.56 million has been filed by James Jaeger, a former company director, who claims payments he made toward a proposed settlement in a class action lawsuit filed by stockholders against the company. Microwave plans to object. DOW CORNING: Breast Implant Suit To Resume Next Year ----------------------------------------------------- Judge Yada Magee agreed this week to postpone the second phase of the breast-implant class action suit until next year, as both the plaintiffs and Dow Chemical Co. said they need more time to prepare, according to the New Orleans Times. Testimony is set to begin January 7. The class action includes about 1,800 women, though damages for most of the class members may be consolidated with Dow Corning's bankruptcy case in Michigan. Dow Chemical has asked Magee to end the lawsuit's status as a class-action, but she has not ruled on that issue. KIA GROUP: Conglomerate to be Disbanded ---------------------------------------- South Korean government has decided to place the financially ailing Kia Group's two auto-making flagships Kia Motors Co. and Asia Motors Co. under court receivership, effectively disbanding the Kia Group, according to Xinhua English Newswire. The government invested $370 million in the car producer to acquire majority ownership and take over its management. Kia Motors will be operated as a state-run public company until its management is normalized; its future will be decided by the next administration. Economic observers said the government’s decided the action would end the prolonged Kia crisis and calm escalating financial unrest under the market economic frame. Commercial banks and merchant banks agreed. Creditor banks said they will file an application this week at the earliest for court receivership of the two units. Loans by Korea Development Bank (KDB) to Kia Motors will be converted into the state- run bank's investment capital, making KDB the motor company's biggest shareholder. Asia Motors will soon be handed over to a third party, on the condition that its commercial vehicle production lines in Kwangju are not relocated. The government also called for the resignation of most of the current management and will appoint asset trustees within the companies under negotiations with the court. After the decision, the local bourse sharply rebounded , and the South Korean currency also showed signs of recovery. Domestic stock prices and the South Korean won have both experienced sharp declines in recent days, mainly because of the prolonged Kia issue. Economic gains may be short-lived, however, as the decision prompted an immediate strike by 20,000 Kia workers. The Korean Confederation of Trade Unions, an umbrella group, ordered the strike at Kia Motors to be expanded immediately to include 30 subsidiaries and suppliers, adding about 10,000 workers. If that fails to move the government, unions at the nation's three other car producers -- Hyundai, Daewoo, and Ssangyong -- will join the protests next Monday, the confederation said. If the government still intends to put Kia in receivership and remove its management, all 500,000 members of the confederation will join forces in nationwide walkouts and protests beginning November 10, the confederation said. Widespread strikes would cripple an already slumping economy. LOT$OFF: Corporation Names CFO ------------------------------= LOT$OFF Corporation, which emerged from bankruptcy on June 16, 1997, announced it has tapped Jeff Seidel, a former consultant to the company, to be CFO, replacing Charles "Hop" Fuhrmann, who continues as the chairman, president, and CEO. Mr. Seidel is leaving his current position with the consulting arm of Deloitte Touche Tohmatsu International, the global accounting and auditing, management consulting and tax services organization. At Deloitte & Touche, he worked with LOT$OFF on its reorganization plan, helping to arrange the company's DIP financing facility with GE Capital Services. LOUISE’S TRATTORIA: Proof of Claims Filing Date ----------------------------------------------- The last day to file proofs of claim against Louise’s Trattoria, Inc., has been set for December 15, 1997, by the U.S. Bankruptcy Court, Central District of California. TAL WIRELESS: Files for Bankruptcy ----------------------------------- TAL Wireless Networks, Inc., formerly known as Tetherless Access Ltd., has filed bankruptcy after a strategy to finance the company backfired, according to the San Jose Business Journal. The Sunnyvale-based maker of high-speed wireless Internet connections filed for Chapter 11 protection on October 6 in U.S. Bankruptcy Court in San Jose after piling up debts of more than $5.4 million. The company and its five offshore subsidiaries, which have not filed bankruptcy, serves 400 customers worldwide. TAL had received $11 million from several investors, but was forced into bankruptcy when investors from Australia and New Zealand refused to provide more funding, according to company board member Richard Redett. In November, 1996, TAL merged with American Phoenix Group Inc., in an attempt to gain additional funding. But in May 1997, both TAL and American Phoenix were sued by Golden Eagle Insurance Co. for $12 million over an unfinished construction project, said Redett. He pointed out that TAL had to defend itself although it had nothing to do with the construction contract. "The TAL people were kind of left holding the bag with that one," said Mr. Redett. "Then the investors said 'No more.' " PR Finance & Investment Ltd., an investment group based in the Caicos Islands, is owed $2.2 million. Clime Investment Holdings in Auckland, New Zealand, is owed $500,000. Redett said that TAL would have needed $18 million in capital to expand its service network, and the company is seeking a buyer for its assets, which include inventory and stock in offshore subsidiaries in Alaska, Argentina, Australia, China, and New Zealand. VOICE POWERED: Date for Filing Proofs of Claims ------------------------------------------------ The last day to file proofs of claim in the Voice Powered Technology International, Inc., Chapter 11 case is November 17, 1997, in the Central District of California WESTERN PACIFIC: Cash Infusion Hangs on Plane Sale --------------------------------------------------- Western Pacific Airlines, Inc., struck a deal late last week with the Hunt and Gaylord families, which secured a $10 million loan and thus control the amount of operating revenue that WestPac must keep in a special loan collateral account, to temporarily lower the amount to $7.7 million from $8.9 million. WestPac used the extra $1.2 million to make a total of $800,000 in payments due through Monday for payroll, aircraft fuel, and fees owed its sister airline, Mountain Air Express. WestPac will repay the $1.2 million to the collateral account when it sells a Boeing 737, for which one buyer has offered to pay $4.9 million cash, according to the Denver Gazette. Five of WestPac’s other jets are leased from General Electric Capital Corp., which began legal action to repossess the planes unless WestPac agrees to meet all obligations of the leases. GE said that since the end of July, WestPac has failed to make maintenance and reserve payments to cover use of the planes. The aircraft leasing company said that by December 5, WestPac will owe GE more than $4 million for use of the planes. WESTERN PACIFIC: MAX to Be Paid, Stay of Action on Contract ------------------------------------------------------------ Western Pacific Airlines, Inc., was told by judge Sidney B. Brooks of the U.S. Bankruptcy court, District of Colorado, to pay $%70,000 to Mountain Air Express, Inc., (MAX) for past due premiums on hull and liability insurance, $55,000 to Mercury Air Group for fuel, and $$207,000 for the wages and taxes of MAX employees. MAX’s leasor, Dornier Luftfahrt GmbH, agreed to stand still on action under its aircraft leases to MAX for 15 days from October 15, provided the insurance premiums are paid. ----- A listing of meetings, conferences and seminars appears every Tuesday. Bond pricing, appearing each Friday, is supplied by DLS Capital Partners, Dallas, Texas. S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc., Washington DC. Debra Brennan and Rebecca A. Porter, Editors. Copyright 1997. All rights reserved. This material is copyrighted and any commercial use, resale or publication in any form (including e- mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *