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/raid1/www/Hosts/bankrupt/TCR_Public/971031.MBXT R O U B L E D C O M P A N Y R E P O R T E R Friday, October 31, 1997 Vol. 1, No. 49 Headlines ----- ERD WASTE: Committee Seeks Accountants and Counsel FRETTER: Proposed Sales of Indianapolis & Quincy Properties KOENIG SPORTING: Seeks Extension to Assume or Reject Leases MIDCON OFFSHORE: Motion for Sale of Substantially All Assets MONTGOMERY WARD: Application to Retain KPMG Peat Marwick MONTGOMERY WARD: Hearing on Assumption of Credit Agreements MONTGOMERY WARD: Motion For Establishing Bar Dates MONTGOMERY WARD: Seeks Assumption and Rejection of Contracts MONTGOMERY WARD: Seeks Rejection of Real Property Leases NETS: Seeks To Increase Authority of Argus SMITH TECHNOLOGY: Trustee Objects to DIP Financing Order STRAIGHT ARROW: Hearing to Approve Disclosure Statement DLS Capital Partners: Bond Pricing ------- ERD WASTE: Committee Seeks Accountants and Counsel -------------------------------------------------- The Official Committee of Unsecured Creditors seeks approval by the Bankruptcy Court for the District of New Jersey of the appointment of Arthur Andersen LLP as accountants and Ravin, Greenberg & Marks, P.A. as counsel for the Committee. FRETTER: Proposed Sales of Indianapolis & Quincy Properties ----------------------------------------------------------- Fretter, Inc., has sought bankruptcy court approval to sell a former store in Indianapolis to Mayhoff for $1.45 million in cash with a deposit of $50,000 and breakup fee of $15,000 and a former store in Quincy, Massachusetts, to MRT for $910,000 in cash with a deposit of $45,000 and breakup fee of $15,000. Both sale agreements are subject to higher and better offers. Hearings on the proposed sales will be held before judge Pat Morgenstern-Clarren in U.S. Bankruptcy Court, Northern District of Ohio, Eastern Division, on December 4, 1997. KOENIG SPORTING: Seeks Extension to Assume or Reject Leases ----------------------------------------------------------- A hearing will be held on November 6, 1997 on the motion of the debtor, Koenig Sporting Goods, Inc., seeking to extend the period for the debtor to assume, assume and assign, or reject unexpired leases of nonresidential real property, authorizing the debtor to reject such leases upon giving seven days’ advance notice to the affected Landlord, and granting related relief. MIDCON OFFSHORE: Motion for Sale of Substantially All Assets ------------------------------------------------------------ The U.S. Trustee in the Midcon Offshore, Inc., bankruptcy case, appointed after a sale of assets fell through due to the intended purchaser’s failure to obtain financing, has moved for a sale of substantially all of Midcon’s offshore and gas properties (excluding the South Marsh Island field). The sale of assets for an aggregate price of $27.5 million to Saratoga Resources, Inc., would be effective as of September 1, 1997. Saratoga will also assume and assign certain executory contracts; others will be rejected. On closing of the sale, Saratoga will pay approximately $31.8 million to the Trustee by wire transfer or certified or bank check. With it, the Trustee will pay all outstanding amounts under the DIP agreement with Long Horizons, all outstanding amounts under the Volumetric Production Payment agreement with Golden Gate, and all cure obligations approved by the court that are due to the Minerals Management Services. The Trustee seeks to separately segregate the $1 million deposit from Saratoga toward payment of court-approved fees and to set aside $750,000 for administrative expenses. The Trustee has moved for an expedited hearing on this matter on November 7, 1997, in light of the fact that Midcon has operated in negative cashflow since virtually the petition date and its estate continues to lose money every day that it operates its offshore oil and gas properties. MONTGOMERY WARD: Application to Retain KPMG Peat Marwick -------------------------------------------------------- The debtors and debtors in possession seek entry of an order authorizing them to retain and employ KPMG Peat Marwick LLP as their management consultants for retail operations. Pursuant to the contract between them, Peat Marwick will be paid not more than $343,000 plus expenses for services rendered. The debtors anticipate that Peat Marwick will render consulting services with respect to the operations of debtors’ stores and Romeoville distribution center as needed throughout the course of these Chapter 11 cases. The primary objective of these services is to design solutions that eliminate non-value added work from the stores and distribution center, and to streamline and simplify the remaining processes. MONTGOMERY WARD: Hearing on Assumption of Credit Agreements ----------------------------------------------------------- On November 24, 1997 The Court will hear the Motion of the debtor, Montgomery Ward Holding Corp. et al. for the assumption of agreements relating to Private Label Credit Card Programs. MONTGOMERY WARD: Motion For Establishing Bar Dates -------------------------------------------------- On November 7, 1997 the Court will hear the motion of the debtor for an order establishing Bar Dates for filing proofs of claim and approving the form and manner of notice thereof. The debtors and debtors in possession seek to establish March 2, 1998 as the last date for all creditors and certain interest holders to file proofs of claim in these chapter 11 cases, establishing the later of the general bar date or 30 days after the entry of an order authorizing the debtors’ rejection of an executory contract or unexpired lease as the bar date by which a proof of claim relating to the debtors’ rejection of such contract or lease must be filed, and establishing the later of the general bar date or 30 days after a claimant is served with notice that the debtors have amended their schedules of assets and liabilities to reduce the undisputed, noncontingent and liquidated amount, or to change the nature or classification of a scheduled claim of such claimant as the bar date for filing a proof of claim in respect of such amended scheduled claims. MONTGOMERY WARD: Seeks Assumption and Rejection of Contracts ------------------------------------------------------------ The debtors filed a motion seeking to assume certain beneficial advertising executory contracts with particular newspapers and rejecting certain burdensome advertising executory contracts with other newspapers. If objections are filed, a hearing will take place on November 7, 1997. For those contracts that the debtor wishes to assume, the prepetition arrearages totaled $10,131,638.73. The debtors have negotiated cure payments in the sum of $5,605,772.67. MONTGOMERY WARD: Seeks Rejection of Real Property Leases -------------------------------------------------------- The debtors filed motions for orders authorizing the rejection of two nonresidential real property leases, one located in Emerald Square, North Attleboro, Massachusetts and one located at Square One Mall, Saugus, Massachusetts. The lessors in each instance agree to the rejection of the leases. The Surrender Date is November 15, 1997 for each lease. In exchange for Lechmere’s surrender of the premises, the Lessor agrees to pay Schottenstein Bernstein Capital Group LLC , the purchaser of all of the assets of Lechmere, $3 million with respect to the premises in North Attleboro, Massachusetts, and $1 million with respect to the premises in Saugus, Massachusetts. Lechmere is responsible for the payment of all rents and real estate taxes attributable to the premises from July 8, 1997 through the Surrender date, and Schottenstein shall reimburse Lechmere for all such payments in accordance with the terms of the Asset Purchase Agreement. If objections are filed, a hearing will take place on November 7, 1997. NETS: Seeks To Increase Authority of Argus ------------------------------------------ In July, the debtor, Nets Inc., filed an application, with the assent of the Official Committee of Unsecured Creditors, seeking approval for the retention of Argus Management Corporation as administrative agent in this case. The Court later approved a motion to increase the maximum sum payable to the agent to $50,000 from an original $30,000. The debtor now seeks authorization to add certain additional administrative tasks to the responsibilities of Argus, and to increase the maximum amount payable to $70,000. Specifically, the debtor is seeking assistance researching and analyzing claims. SMITH TECHNOLOGY: Trustee Objects to DIP Financing Order -------------------------------------------------------- The U.S. Trustee assigned to the Smith Technology Corporation Chapter 11 case has objected to the company’s motion for DIP financing on the grounds that she has not been served with the complete DIP motion and exhibits and furthermore finds the final form of the order is unnecessarily broad. The Trustee also objects to the DIP lender being given a lien on any avoidance actions and to the grant of a super- priority administrative claim to the extent that other collateral is being given. The Trustee also asks for a reasonable “carve out” for fees and expenses of official committees, the Clerk of the Court, and the U.S. Trustee, and notes the carve out should be on parity with that available to Smith’s professionals. The Trustee objects to numerous other uses of language in the final order for DIP financing and requests that the court deny it. STRAIGHT ARROW: Hearing to Approve Disclosure Statement ------------------------------------------------------- Straight Arrow Products, Inc., has given notice that a hearing on approval of its disclosure statement is set for November 20, 1997, before judge Thomas M. Twardowski in U.S. Bankruptcy Court, Eastern District of Pennsylvania. Objections must be filed in writing no later than November 14. DLS Capital Partners: Bond Pricing ---------------------------------- Bond pricing information for the week of October 27, 1997 Indicated markets for the following: Alliance Entertainment 11 1/4 ‘05 12-14(f) Amer Telecasting 0/14 1/2 ‘04 36-39 Bradlees 11 ‘02 6-8(f) Brunos 10 1/2 ‘05 52-53 1/2 Cityscape 12 3/4 ‘04 69-71 Computervision 11 3/8 ‘99 45-55 Dictaphone 11 3/4 ‘05 87-89 Flagstar 11 1/4 ‘04 44 1/2-46(f) Grand Union 12 ‘04 43-44 Harrah’s Jazz 14 1/4 ‘01 32-34(f) Hechinger 6.95 ‘03 75-77 Hill’s Department Store 12 1/2 ‘03 75-77 Home Holding 8 5/8 ‘03 34-37(f) Levitz 9 5/8 ‘03 34-36(f) Liggett 11 1/2 ‘99 65-68 Marvel 0 ‘98 8 1/2-10 Mobilemedia 9 3/8 ‘07 21-23(f) Mosler 11 ‘03 70-76 Payless Cashways 9 1/8 ‘03 18-19(f) Penn Traffic 9 5/8 ‘05 61-62 Stratosphere 14 1/4 ‘02 60-65(f) Trump Castle 11 3/4 ‘03 93-94 Trump Atlantic City 11 1/4 ‘06 98-99 Wickes 11 5/8 ‘03 94-95 It’s been a very volatile week with many issues trading off 4 or 5 points on Tuesday morning, following Monday’s stock market rout. Most recovered, although Computervision bonds got hit 20 points. Lots of Cityscape bonds were traded. ----- 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 * * *