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/raid1/www/Hosts/bankrupt/TCR_Public/971219.MBX T R O U B L E D C O M P A N Y R E P O R T E R Friday, December 19 1997, Vol. 1, No. 83 Headlines BIG RIVERS: Bank Responds to Standing for Examiner's Fee CF&I: Owner Tries to Outlast Strike ERD WASTE: Attempts to Pay Subcontractors FOSTER MORTGAGE: United Companies Announces Settlement HARRAH'S JAZZ: Casino May be Dead In the Water Again HARRAH'S JAZZ: Committee Wants PR Consultant HEILIG-MEYERS: Reports 3rd Quarter Results JAMBOREE LLC: Issues Corrected Note Certificates LEVITZ: Taps Grubb & Ellis as Brokers LOMAS FINANCIAL: Settlement of MSP Claims MIDCOM: Enters Asset Purchase Agreement NATIONAL CATTLE CONGRESS: Asks for Loan to Pay Bills POCKET: Emergency Request for Transfer of Funds RELLEK: Committee Proposes Plan STREAMLOGIC: Plan of Reorganization SUPER SHOPS: Edelbrock to Assist in Finding Buyers THE WIZ: Blames Soft Consumer Market WESTERN PACIFIC: To Divvy up DIA fees -Owes $5 million BOND PRICES: DLS Capital's Prices for Selected Issues --------- BIG RIVERS: Bank Responds to Standing for Examiner's Fee -------------------------------------------------------- The Bank of New York responded to the motion of the Examiner to determine those entities entitled to be heard and litigate the issues of the examiner's compensation. The Bank of New York holds contingent and liquidated, secured and unsecured claims in excess of $63 million against the debtor. The Bank of New York claims that the Examiner wants to exclude the Kentucky Attorney General, Harry B. O'Donnell, IV, MEDCO and the estate of Buddie Morris from objecting to the enhanced Examiner's fee. The Bank contends that upon the consummation of the plan, creditors will receive distributions on account of their allowed claims, and they have a financial interest in the successful consummation of the plan. Money to pay the examiner's fees will "come out of the debtor's coffers." The Bank believes that there is an implication in the Examiner's motion that those creditors which, in the Examiner's opinion have standing to object to his fee enhancement request are those which may be assessed for any award thereon. CF&I: Owner Tries to Outlast Strike ----------------------------------- The Gazette reported on November 30, 1997 that the twin-spired CF&I Corp. steel mill that has dominated this town's skyline for generations seems smaller than it used to. The smoke stacks have rusted and grown silent as the company tumbled through a succession of outside owners, culminating in a 1990 bankruptcy and eventual buyout by Portland-based Oregon Steel Mills. Since then, the company has found more efficient ways to produce its chief product - the premier rail that keeps the trains of Union Pacific and the Burlington Northern railroads moving. But the price of this revival was paid at the expense of loyal employees, union workers say. The United Steel Workers' strike against Pueblo's CF&I steel mill is now entering its ninth week with both sides hunkering down for the long haul. Bolstered by growing public support, the union vows to "last one day longer than the company." But that day may never come. To the company, the 700 replacement workers hired to keep the mill going are permanent employees. With streamlining, the plant says it only needs 850 employees to operate at full-steam. The pre-strike work force was 1,100. With more hiring on the horizon, Vicki Tagliafico, spokeswoman for Oregon Steel, said production will be up to pre-strike levels by January. Although the steel industry is but a shadow of what it once was, premier rail remains in high demand by railroads which are consolidating and updating old rail lines. By meeting that customer demand, CF&I may be in a position to outlast the walkout. And if the strike can't shut down the plant, then perhaps all it has accomplished is to put 1,100 people out of work. The strikers are convinced that they will win their jobs back once charges of unfair labor practices are heard by the National Labor Relations Board and the courts, which could rule it illegal for Oregon Steel to have hired the permanent replacement workers. Considering the company's economic outlook, this may be the strikers' only hope. Ernie Hernandez, the union local's president, said he'd like to get rid of Oregon Steel altogether. "That company is just plain evil," Hernandez said. "It doesn't care about Pueblo, and it sure doesn't care about its workers." Considering that Oregon Steel has already made a short-term profit off its CF&I investment, analysts acknowledge the possibility that it may sell the mill at some point. But no matter how much public support they get, the strikers, mostly middle-aged men, simply don't seem to have the economic clout to hurt an outside company like Oregon Steel, which has few ties to Colorado. Although CF&I is only one of Oregon Steel's three subsidiaries, it accounted for more than half of the company's 1996 total revenue of $772 million. In the third quarter of this year, CF&I accounted for 55 percent of Oregon Steel's revenue. And although the strike's impact is large - it is expected to be directly responsible for $12 million of the company's expected fourth quarter 1997 loss - analysts say the company might be able to recover by the first quarter of 1998. The strike, the first in 40 years, was called by United Steel Workers Association locals 2102 and 3267 after members voted 3 to 1 to reject CF&I's new three-year contract. The strikers wanted wages closer to the industry standard, better retirement options and, most of all, an end to forced overtime, which union officials claim had resulted in a dangerous work environment. Guy Kennedy, a 40-year employee, said he often worked more than 65 hours a week despite protests. "I put in 96 hours (in one week) a few weeks before the strike and then another 62 hours right after," the 58-year-old Kennedy said. "And if you refuse (to work) overtime, you are written up for it. If you get written up three times, you can get fired." Tagliafico acknowledged that some of the union's claims are valid -including that about 23 percent of workers work more than 60 hours a week. "It's a dignity issue. We share the respect that all workers should be given," she said. "It's a conflict between the needs of the manufacturing environment and the needs of workers." Tagliafico said Oregon Steel wants to work out its overtime issues on a mill-by-mill basis. But she did not say how the company could now operate at full capacity with 850 workers, when pre-strike, its 1,100 workers couldn't meet production quotas without forced overtime. The national union has produced informational videos and reports to attack such contradictions in Oregon Steel's claimed financial position. It also has staged protests in Portland and San Francisco (at the headquarters of the steel company's financial backer, Wells Fargo Bank) in support of the Pueblo strikers. Oregon Steel claims it has spent about $150 million in capital expenditures to modernize the mill, said analyst Teresa Meyer of Portland, Ore.-based Black & Co. And with that modernization, she said the company feels it can run the mill without a union. "They did the same thing here in Oregon in 1984 and successfully managed to replace union workers," Meyer said. "And their Napa, Calif., operation is not unionized." Oregon Steel didn't hesitate to hire the nonunion workers it would need to forge steel. Strategically placed ads in Florida and along the eastern seaboard were purchased early in the strike, said Tagliafico. The ads quickly brought in replacement workers from the East Coast as well as from throughout Colorado. The replacement workers are producing at about 50 percent of pre-strike levels. And the company plans to continue to hire what it now calls permanent replacement workers at about $20 an hour through January, Tagliafico said. Because of the nature of the industry, CF&I had pre-planned sales quotas to meet for 1998. The company knew exactly what it needed to satisfy customers. Because of high pre- strike productivity levels, CF&I was able to stockpile steel rail, and this allowed the company to survive the first weeks of the strike, union officials said. Union officials said they hope the mill's largest customers, Union Pacific and Burlington Northern Santa Fe railroads, will put pressure on Oregon Steel. But spokesmen from both companies say shortfalls caused by the strike are being met by overseas steel purchases and CF&I's only domestic premier rail competitor, Bethlehem Steel Corp. of Steelton, Pa. CF&I and Bethlehem share 80 percent of the market equally while overseas purchases normally make up the rest. Both railroads say they are minimally affected and will buy rail from CF&I as it is produced. ERD WASTE: Attempts to Pay Subcontractors ----------------------------------------- ERD Waste Corp. et al. filed a motion for an order to establish procedures for the payment of subcontractor claims. The debtors have been faced with recurring problems concerning the collection of accounts receivable from certain of debtors' clients. In particular, a number of the clients refused to make payment since the debtor owes money to various subcontractors and materialmen for the work performed for the clients. Any delay in the collection of the debtors' accounts is having, and will continue to have, a significant detrimental impact on the debtors' businesses and the Chapter 11 estates. The debtors want to establish an escrow account for the receipt and collection of the Receivables. The debtors will provide notice to each affected subcontractor of the amount that the debtor believes is due and owing to that subcontractor. The subcontractor will be provided ten days notice to dispute the payment. If not disputed, the subcontractor will be paid, and if disputed, the potion in dispute will be held in the escrow account until resolved. FOSTER MORTGAGE: United Companies Announces Settlement ------------------------------------------------------ United Companies Financial Corporation (NYSE: UC) today announced the conclusion and related settlement of a longstanding lawsuit emanating from the 1993 divestiture and bankruptcy of Foster Mortgage Corporation. As a result, the Company will take a $5.6 million charge in the fourth quarter resulting from the settlement. Further, the Company will also write off $2.2 million related to its sale of United Companies Life Insurance Company in 1996. This aggregate $7.8 million write-off will result in a charge of $.15 against the Company's fourth quarter earnings per-share. "The Foster matter had been disclosed in our Form 10-K and Form 10-Q public filings and certain claims were tried before the bankruptcy court in November," stated Dale Redman, Executive Vice President & Chief Financial Officer. "The very good news for our shareholders is that the potential exposure to the Company of more than $30 million has been resolved. We aggressively pursued our position and minimized the charge. In addition, we have resolved a lingering issue related to the disposition of the life insurance company," Redman continued. "These two items are now history and there should be no further impact from either," he stated. HARRAH'S JAZZ: Casino May be Dead In the Water Again ----------------------------------------------------- The Louisiana Legislature refuses to take the unprecedented step of calling itself into session to vote on a gambling issue. Governor Mike Foster will not call a special session unless he can be assured that he has the votes for ratification. At stake is a new contract that guarantees that creditors in bankruptcy court will be paid, that the stalled casino will be completed and opened and that government will get $100 million in taxes. Although the Legislature approved the casino on paper five years ago, legislators have been uneasy with all the publicity over federal investigations into the gambling industry. A poll conducted by Southern Media & Opinion Research this month shows that Louisiana voters are about evenly split on the casino question. The poll found 46.3 percent of the 600 registered voters interviewed favor the contract while 44.7 percent are against, and the remainder will not say. The poll, taken for a group of television stations, had a margin of error of plus or minus 4.5 percentage points, meaning the results can vary by that much in either direction - making the results virtually even. Sen. Ken Hollis, R-Metairie, and Rep. Ed Murray, D-New Orleans, started touring the state this week to get legislators' signatures on a petition to call themselves into session. The two met privately with Mr. Foster on Tuesday and said lawmakers refuse to do it. They said a number of legislators would vote for the contract but would not vote to call a session. Let the governor do it, they said. A simple majority vote is needed to call a session. The same vote is needed to ratify a contract. Senate President Randy Ewing had suggested to Mr. Foster that the Legislature should call the session. If the lawmakers vote to convene, the contract is as good as ratified, he said. "That feature {for lawmakers to call their own session} is an extraordinary measure and should be used only in extreme circumstances," Rep. John Alario, D-Westwego, and a power in the House, said Tuesday. "I don't think Harrah's ought to be the first reason why the Legislature should call itself into special session." Lawmakers' reasons for their views vary publicly, but privately a number of them say they do not want to take on the responsibility of calling a gambling session. "He {the governor} can call it himself," said Sen. Foster Campbell, D-Elm Grove. "If he can't get his hands dirty, don't ask me to get my hands dirty." Mr. Hollis is the most frustrated of the lot, saying he felt as if he were a boxer getting bloodied while Mr. Foster is the attendant holding the boxer's robe on the other side of the ring. "The governor said he would call the session if he is assured there are enough votes," Mr. Hollis said. "I said if the New Orleans Saints used that same philosophy, they would have never fielded a team. There is no way we can assure him there are enough votes." But, if the governor will take the lead and actively lobby individual legislators, the contract will be ratified, said Mr. Hollis. "Writing a letter to us and talking to two or three of us won't get the job done," he said. Mr. Foster has written each legislator saying that the contract is a good deal for the state and that the issue should not be viewed as a gambling issue since the voters have already approved gambling. The Legislature voted for the casino and should live up to its obligation, the governor said. In a letter written this week to House Speaker Hunt Downer, Mr. Foster said the Legislature "wanted to make the final political decision and it is now up to you." The House passed a resolution at the end of this year's session saying that it wanted the right to ratify any new contract and to call itself into session to do it. The language was technical and a number of House members did not realize they had said they wanted to call themselves into special session, acknowledged Cheney Joseph, attorney for the governor. Mr. Hollis said if the governor waited for his April special session on education to get a vote on the contract, the time lag might ruin the project. The casino has been in bankruptcy court since 1995 and the judge is getting tired of waiting for the state to do something, Mr. Hollis said. "If we don't do something, the court may allow Harrah's to operate a casino under the original contract" taken to the Legislature earlier this year, Mr. Hollis said. The Legislature rejected that contract because it did not guarantee a $100 million payment to the state. William Patrick, an attorney for Harrah's Jazz, said he believes that the Legislature will ultimately come around. "It's unimaginable as a business matter that the state would not honor its endorsement of that contract," he said. HARRAH'S JAZZ: Committee Wants PR Consultant -------------------------------------------- The Unsecured Creditors' Committee wishes to employ Rafael Bermudez d/b/a Rafael Bermudez Associates as public relations consultant to the Committee for the period November 1, 1997 through February 28, 1998. The committee seeks a public relations consultant to assist it with respect to its duties to assure approval of the plan of reorganization in the administrative and polititcal process. HEILIG-MEYERS: Reports 3rd Quarter Results ------------------------------------------ Heilig-Meyers Company (NYSE: HMY), the Richmond-based home furnishings retailer, today announced an aggressive plan to improve profitability in its Heilig-Meyers division. The plan includes three main components: (1) expense reductions; (2) restructuring of certain aspects of the business; and (3) core store operating initiatives. The Company said that it expects to incur a total of $134.0 million in pre-tax special charges in its third and fourth quarters in connection with this plan. A total of $85.8 million pre-tax or $0.97 per share of special charges were recorded in the third quarter, which ended November 30, 1997, resulting in a net loss of $49.1 million or $0.85 per share versus earnings of $9.5 million or $0.19 per share in the prior year quarter. The Company reported that total revenues for the three-month period increased approximately 64.1% to $678.5 million from $413.5 million in the prior year. For the nine months ended November 30, 1997, total revenues increased 64.6% to $1.8 billion from $1.1 billion in the prior year. Including $85.8 million in pre-tax special charges associated with the profit improvement plan for the Heilig-Meyers division, the Company has incurred a net loss of $26.1 million or $0.46 per share for the nine-month period versus earnings of $29.6 million or $0.60 per share in the prior year. The Company stated that its profit improvement plan will result in approximately $30.0 million of expense reductions. An estimated $20.0 million in costs are expected to be eliminated from corporate overhead and non- store locations and the remaining $10.0 million in expense reductions would be at the store level principally through personnel attrition. The Company commented that in the current retail home furnishings environment, which is characterized by an increase in consumer credit problems and bankruptcies, the organization must seek to be as efficient as possible and that investments which fail to produce adequate returns must be eliminated. Management noted that the $134.0 million in special charges associated with the profit improvement plan would principally be a result of store closings, severance arrangements, accelerated write-offs of accounts in bankruptcy and the reorganization of its private label revolving credit program. Approximately $51.0 million of the charges are related to the closing of approximately 60 Heilig-Meyers stores. Approximately $14.0 million of the $51.0 million will result from an increase in the bad debt reserve to cover the sale of installment accounts receivable for these stores, and approximately $14.5 million will result from the establishment of reserves to cover future payments for lease commitments. The remaining $22.5 million in special charges associated with store closings will result from reserves for the disposal of fixed assets, severance arrangements and the write-off of goodwill associated with the closed stores. The majority of stores identified to be closed are in larger markets where it is more difficult for the Heilig- Meyers small-town format to be successful. William C. DeRusha, Chairman and Chief Executive Officer, commented that the Company's recently acquired Rhodes and The RoomStore units are better suited for larger markets, and that the size and location of the stores targeted for closing were not adequate for conversion. The $134.0 million in special charges also includes a $50.0 million increase in bad debt reserves resulting from a more conservative approach to its estimates for write-offs relating to customer accounts entering into bankruptcy and the Company's installment portfolio. Approximately $38.0 million is related to accounts in bankruptcy and approximately $12.0 million is related to accounts in the installment portfolio. Troy A. Peery, Jr., President and Chief Operating Officer commented, "The Company is taking this action in response to a challenging consumer credit environment and these aggressive steps will allow the Company to focus on new business while maintaining the proper balance in sales and credit risk." The remaining portion of the $134.0 million in special charges is associated with approximately $15.0 million in costs relating to the Company's plan to reorganize it's Heilig-Meyers private label credit card program, and approximately $18.0 million in costs relating to non-store employee severance arrangements and the disposition of certain real estate. The overall cash impact related to the special charges will be positive as cash received from the sale of certain assets, and from income tax benefits is expected to significantly exceed cash expenditures primarily related to severance costs and potential lease settlements. Management also outlined a number of core store operating initiatives to improve performance in the Heilig-Meyers stores. It indicated that current plans are to significantly slow the growth of the Heilig-Meyers units over the next year to allow the maturation of this division and further improve results. Management also noted that approximately 20 to 30 stores would be relocated in an effort to place those stores in higher traffic locations. The Company has developed and is initiating a merchandising and advertising strategy which will differentiate between the larger and smaller Heilig-Meyers markets, thereby reaching those customers in these respective areas through different mediums and types of messages better suited for each type of market. Management added that plans were under way to strengthen inventory management in an effort to significantly reduce the frequency of assortment changes in the merchandise line-up. Further plans are to add consumer credit expertise to the senior management team and to further develop risk profiling, bankruptcy scoring and risk based pricing models for the installment program. Management commented further that while it planned to slow growth in the Heilig-Meyers division, it expected to pursue opportunities in the Company's other formats. These opportunities would be in formats which are less capital intensive and are currently operating at higher levels of returns than the Heilig-Meyers division. The Company also indicated that it will adopt a rigorous capital allocation process under which all expansion and capital projects will be subjected to stringent return on investment criterion. Mr. Peery said that, "Heilig-Meyers remains and will remain the Company's flagship operation and that there are a tremendous number of towns to which Heilig-Meyers could expand. However in the near- term, growth would be primarily in the Company's other divisions." In a closing statement, management commented that the profit improvement plan and related initiatives are intended to help Heilig-Meyers Company enter its upcoming fiscal year stronger and more focused than anytime in the Company's history. Management added that consolidated earnings for fiscal 1999 are expected to be significantly improved and that the Company maintains its 15- 20% long-term growth target for earnings per share going forward. Heilig-Meyers Company, a Virginia Corporation, currently operates 1,190 stores; 864 as Heilig-Meyers, 171 as Mattress Discounters, 100 as Rhodes, 23 as The RoomStore and 32 in Puerto Rico as Berrios. JAMBOREE LLC: Issues Corrected Note Certificates ------------------------------------------------ Jamboree LLC, a Delaware limited liability company, announced today that it has notified the holders of its outstanding 8.18% Class A Senior Secured Notes due 2002 and its 8.93% Class B Senior Subordinated Secured Notes due 2002 that the certificates evidencing such Notes were issued with the wrong interest accrual date and must be returned to State Street Bank and Trust Company, as trustee of both classes of Notes, so that they may be corrected. Due to a clerical error regarding the interest accrual date, too much interest, in the form of additional Notes, was paid with respect to the November 1, 1997 and December 1, 1997 interest payment dates. The Company has announced that new Note certificates with corrected interest accrual dates and corrected principal amounts will be issued in place of the incorrect outstanding Note certificates. Jamboree LLC and State Street Bank and Trust Company have agreed to the changes and have implemented procedures for the exchange of any outstanding Notes. Investor questions should be directed to W. Gregory Geiger or Kenneth Liang of Jamboree LLC, c/o Oaktree Capital Management at (213) 614-0900. The Notes were issued as part of the bankruptcy restructuring of Crow Winthrop Operating Partnership. Under the restructuring, ownership of certain real property at 3333 - 3355 Michelson Drive, Irvine, California, and other assets was transferred to Jamboree LLC. LEVITZ: Taps Grubb & Ellis as Brokers ------------------------------------- Levitz Furniture Incorporated, et al, applied for court authority to employ and retain Grubb & Ellis as real estate brokers to the debtor. The broker would serve as a single point of coordination for all assigned real estate transactions in the U.S., Mexico and Canada. LOMAS FINANCIAL: Settlement of MSP Claims ----------------------------------------- By this motion, the reorganized debtor, Lomas Financial Corporation, Lomas Information Systems, Inc. and Lomas Administrative Services, Inc., with the support of the Unofficial Committee of Management Security Plan Beneficiaries of Lomas Financial Corporation seek the court's approval for the settlement of all claims held by MSP Beneficiaries. The debtors claim that the MSP settlement is enormously beneficial to all parties in the cases, and litigating them would cost significant expenditures of money and time. The debtors also state that the settlement will bring an additional $4 million into the estates for distribution under the joint plan. The terms of the Settlement provide that from the Trust Assets (Over $8 million as of 9/30/97) the parties will deduct certain fees and expenses and the Net Trust Assets will be divided between the MSP Committee and Siena, successors to the reorganized debtors. (50% of the assets to each). MIDCOM: Enters Asset Purchase Agreement --------------------------------------- On December 17, 1997, MIDCOM Communications Inc. (NASDAQ:MCCIQ) announced that it has entered into an asset purchase agreement with WinStar Communications, Inc. Under the terms of the agreement, WinStar will purchase substantially all of MIDCOM's assets and those of its subsidiaries, PacNet, Inc. and Cel-Tech International Corporation, in exchange for $92.0 million, subject to certain adjustments. "I am pleased with the WinStar agreement and believe it represents a fair price for the benefit of MIDCOM's creditors," said William H. Oberlin, MIDCOM's president and chief executive officer. Not included in the agreement are the company's conference calling business and AdVal Inc., a MIDCOM subsidiary, which offers facsimile broadcast services. The company continues to review strategic options with respect to these assets. Under the agreement, WinStar will provide employment for substantially all of MIDCOM's employees and will maintain MIDCOM's key distribution channels. "MIDCOM's focus on providing long distance and other telecommunication services to small and medium-sized businesses meshes well with WinStar's national local communications strategy," said Oberlin. Under bankruptcy code procedures certain provisions of the agreement, including an auction procedure, will be submitted to the bankruptcy court for approval as quickly as possible. Then, if accepted by the court, other interested purchasers will have the opportunity to top WinStar's offering price on similar terms and conditions to those set forth in the agreement between MIDCOM and WinStar. NATIONAL CATTLE CONGRESS: Asks for Loan to Pay Bills ---------------------------------------------------- The Omaha World-Herald reported on December 17, 1997 that the financially troubled National Cattle Congress wants to borrow up to $100,000 from the City of Waterloo to pay its bills through the spring, an attorney said. But Mayor John Rooff said the loan would have to be secured by a lien that would be placed ahead of one held by the Meskwaki Indians. The lien would allow the city to take title to the Cattle Congress fairgrounds and Electric Park Ballroom if the organization defaults on the loan. Cattle Congress attorney John Titler said this week that it is unlikely the bankruptcy court would approve the city's request since the organization has $145,000 in unencumbered personal property it could borrow against. The Meskwakis hold a mortgage on all Cattle Congress real estate, including the fairgrounds, ballroom and Waterloo Greyhound Park. The tribe loaned the Cattle Congress the money in order to preclude the possibility of slot machines at the dog track. "We want to preserve the Cattle Congress and Electric Park the way it used to be," Rooff said. "We also want to separate out the Cattle Congress grounds from any talk of gambling. The bankruptcy court can do that." The National Cattle Congress, which filed for Chapter 11 bankruptcy reorganization last month for the second time in four years, is facing a utilities shutoff unless it can come up with a $22,000 deposit, Titler said. He also said insurance companies writing liability policies for Cattle Congress property are demanding upfront premium payments instead of monthly installments. "We need some working capital is what it boils down to," Titler said. A proposed budget "shows for operations through April, we can operate at a $7,000 to $8,000 profit," he said. That includes a number of budget cuts, including the resignation of Cattle Congress General Manager Louis Beck, who said he essentially laid himself off last week as a budget-cutting measure. Titler said the organization would ask the city for a loan of up to $100,000, at 9.5 percent interest, with balloon payment due in one year. The Cattle Congress would seek the loan from the city's economic development revolving loan fund, Titler and Rooff said. That is the same fund from which the city loaned more than $1 million to finance Cattle Congress-owned Waterloo Greyhound Park's construction in 1986. The Cattle Congress eventually repaid that money in full in 1996 as part of its previous bankruptcy reorganization, with a portion of the $9.1 million in bailout proceeds from the Meskwakis' Tama casino. Titler said the Cattle Congress also must seek bankruptcy court approval to incur debt in order to accept the loan. A hearing on that matter has been scheduled for Thursday at U.S. Bankruptcy Court in Cedar Rapids. POCKET: Emergency Request for Transfer of Funds ----------------------------------------------- Pocket Communications and DCR PCS, Inc., debtors, are asking the court for emergency authorization for contribution of funds from the legal budget to the employee budget. The debtors lack sufficient funds to meet payroll for essential employees through mid-January, 1998. Pursuant to the final draw of funds under the existing DIP Loan Facility, the debtors have received $355,000 specifically for and only authorized for payment of professioanl fees. The debtors, with consent of the professionals, wish to allocate $55,000 of these funds set aside for professionals to employee wages. The DIP Lenders refused these requests. The professionals are willing to forego the $55,000 in interim fees, to be passed on to the final fee payments. Whiteford, Taylor and Preston, LLP; Wilmer, Cutler & Pickering, Winston & Strawn and Arthur Andersen LLP are the professionals involved in this matter. RELLEK: Committee Proposes Plan ------------------------------- The Official Committee of Unsecured Creditors of Rellek, Inc., f/k/a Keller Industries, Inc. proposed a plan of reorganization. Classified claims are treated as follows: Class 1. Allowed Claims which are Prioirity Claims. Class 1 is unimpaired under the plan. Class 2. The allowed secured claim of Bank of America. Class 2 is impaired under the plan. Bank of America's allowed secured claim will paid in accordance with a Settlement Agreement. Class 3. Allowed secured claims other than the secured claim of Bank of America. Class 3 is unimpaired under the plan. Class 4. Allowed Unsecured claims, except Ladders Payable Claims and Claims assumed by purchaser of Ladders Division. Class 4 claims are impaired. Class 4 claim holders will receive a distribution equal to a pro rata share of funds remaining after administrative claims, priority tax claims, and allowed claims in classes 1,2, and 3, compensation to the Disbursing Agent and fees, costs and expenses pursuant to the plan. Class 4 claims will be subject to a holdback for estimated future professional and management fees and costs. Class 5. Ladders Payable Claims. Class 5 is impaired under the plan. Class 5 claimants will receive a pro rata distribution from the Ladders Payable Fund, after payment of any fees and costs incurred in conn3edction with administering the Ladders Payable Fund. The Ladders Payable Fund is not part of the bankruptcy estate. Class 6. Allowed Interests of Equity Security Holders. Class 6 is impaired under the plan. No payments shall be made nor property distributed to holders of Class 6 Claims. These claims represent liabilites assumed by the purchaser of the Ladders Division. Class 7 is deemed to have rejected the plan. Class 7 is impaired under the plan. Class 7 is Allowed Interests in the Debtor, and such interests will be terminated and extinguished as of the Effective Date of the plan. STREAMLOGIC: Plan of Reorganization ----------------------------------- Streamlogic Corporation, debtor, proposed a plan of reorganization dated December 10, 1997. Claims are classified as follows: Class A. Priority claims. Unimpaired. The debtor estimates that the allowed amount of Class A priority claims will be approximately $35,000. These claims include unsecured claims for accrued employee compensation earned within 90 days prior to commencement of the Chapter 11 case (up to $4,000 per employee) and contributions to employee benefit plans prior to commencement of the case. Class B. Secured Claims. Unimpaired to the extent allowed. Debtors anticipate that the total amount due and owing in this class is $670,000. The debtors know only of the claim of Wells Fargo Bank and lien claims of JMR and A&S. Class C. Convenience Claims. Impaired. 10% of the allowed claim will be paid. The debtors anticipate that holders of approximately 340 claims, in an aggregate amount of $360,000 will elect to be within Class C, and that the distributions thereon will be approximately $34,000. Class D. General Unsecured Claims. Impaired. The debtor estimates that the aggregate amount of all allowed claims within Class D will be approximately $30,000,000. Pro rata distributions of funds will be made as funds become available. The debtor estimates that distributions upon allowed claims within class D will be in an aggregate amount that is approximately 17.76 percent of the total amount of such allowed claims. Class E. Stock Interests. Holders of Class E are deemed to have rejected the plan, because they will receive nothing under the plan. On the Effective Date, all existing shares of the Debtor will b e cancelled and all options, warrants and other rights affecting such stock will be terminated. On the plan's Effective date, all assets related to the Hammer product line and known as the "Hammer Assets" will be revested in the reorganized debtor as the core of its ongoing business. All other assets of the debtor will vest in the Distribution Estates. SUPER SHOPS: Edelbrock to Assist in Finding Buyers -------------------------------------------------- Edelbrock Corp. (Nasdaq NM:EDEL) Thursday announced that it will act with the executive committee of the Unsecured Creditors Committee of Super Shops Inc. to assist current Super Shops management, led by interim Chief Executive Officer John T. Grigsby, in locating and evaluating potential buyers for the current 121-store chain. The committee of unsecured creditors, composed of Edelbrock and eight other major vendors, was formed to represent the interest of the unsecured creditors of the Reno, Nev.-based performance parts retailer, which in September voluntarily petitioned for reorganization under Chapter 11 of the Federal Bankruptcy Code and is presently operating under that statute. Edelbrock, which currently has approximately $1.9 million in unsecured receivables outstanding with Super Shops, is unable at this time to quantify the dollar amount of any recovery that may result from the sale of Super Shops' assets or from ongoing global negotiations with former Super Shops chief executive Harry Eberlin. Due to the uncertainty of the recovery on these receivables, Edelbrock will conservatively account for these receivables as a pre- tax charge against earnings of approximately $1.9 million, (approximately $1.2 million or $.23 per share, after tax), for the quarter ending Dec. 25, 1997. Torrance-based Edelbrock is a designer, manufacturer and distributor of performance replacement parts for the automotive and motorcycle aftermarkets. THE WIZ: Blames Soft Consumer Market ------------------------------------ Grant Buckler wrote for Newsbytes, "It's no longer true that nobody beats The Wiz. The Wiz Inc., Cartelet, New Jersey-based operator of 50 "Nobody Beats The Wiz" consumer electronics stores, has filed voluntary petitions under Chapter 11 of the US Bankruptcy Act for itself and many affiliates, and said it will close 17 stores. A hearing was expected in United States Bankruptcy Court for the Southern District of New York Wednesday. The Wiz said it would ask the court to approve RAS Management Advisors Inc., and its principal Richard Sebastiao as chief restructuring officer. The retailer also said it would ask the court for permission to continue operations, including honoring customer deposits, gift certificates, promotions and the like, and to grant junior liens on all of its collateral to all vendors willing to deliver goods to The Wiz on at least 20 percent credit terms. The court is also being asked to approve a credit facility under which The Wiz's principal lender, Congress Financial Corp., proposes to advance the company as much as $150 million. The company blamed softness in the consumer electronics market for its failure, saying it was especially hard hit in retail locations outside of New York City and other core areas. These locations will account for most of the store closings. In a statement, Lawrence Jemal, president and chief executive of The Wiz, said the company hopes to restructure its finances and reorganize around its core metropolitan locations. The company announced it was closing eight stores in New York, four in Washington, three in New Jersey and two in Connecticut as part of a reorganization aimed at restoring profits. The announcements came a day after the Carteret, N.J.-based electronics retailer filed for Chapter 11 bankruptcy protection. The company has more than $1 billion in annual sales. In a release, lawyer Kenneth H. Eckstein identified the stores which were closing and said they may shut down as early as January 31, although the company is trying to extend that date. WESTERN PACIFIC: To Divvy up DIA fees -Owes $5 million ------------------------------------------------------ The Denver Gazette reported that the $5 million that Western Pacific owed Denver International Airport before the airline filed for bankruptcy protection is still subject to negotiation and could be spread among all carriers at the airport, a WestPac executive says. But United Airlines regional Vice President Roger Gibson says his airline and other airlines at the airport will push "to make sure the city collects all that money" from Western Pacific. Western Pacific owed DIA about $5 million in fees when it filed for Chapter 11 bankruptcy on Oct. 5. Since then, the airline has been paying current landing fees, rents and passenger facility charges four times each month, but the $5 million is still unpaid. Western Pacific is working on a reorganization plan to submit to the bankruptcy court by December 20. Western Pacific Senior Vice President Mark Coleman said that the airport likely will receive cash and stock in some kind of trust when the airline emerges from Chapter 11, probably in March, and that some unpaid expenses could be spread among all carriers. He said United's share would be no more "than they would have if we had not come to town." With 45 daily departures from DIA, Western Pacific's share of the landing fees has lowered fees for all carriers, he said. Gibson, however, said, "We don't expect to pay any of Western Pacific's fees." WestPac released its flight-capacity figures for November, revealing that its jets spent more time than ever in the air, but the planes were less than half full. The airline said it flew more than a third more miles last month than it had in November 1996. It also carried slightly more passengers. But the growth in passengers was not as dramatic as the increase in miles flown, translating into aircraft that were, on average, half empty. Coleman said there were two big reasons for the differences between November and the same month a year earlier: one was the bankruptcy, which hurt reservations; secondly, bookings during the previous November were inflated by a "Mystery Fare" promotion. As a result of the bankruptcy-recovery negotiations, "our booking levels have improved and we expect this trend to continue going forward," Coleman said. For the first 11 months of 1997, miles flown by the airline were up by a third, the number of passengers was up by a quarter and the planes were just about as full, on average, compared to last year's 11-month data. What WestPac did not reveal was a figure critical to the airline's ability to make a profit: the yield, or average amount of money made on each passenger. BOND PRICES: DLS Capital's Prices for Selected Issues ----------------------------------------------------- The following are indicated prices for selected issues: Alliance Entertainment 11 1/4 '05 4 - 5 1/2 (f) Amer Telecasting 0/14 1/2 '04 25 - 29 APS 11 7/8 '06 51 - 53 Bradlees 11 '02 4 - 6 (f) Brunos 10 1/2 '05 35 - 36 CAI Wireless 12 1/4 '02 26 - 28 Cityscape 12 3/4 '04 47 - 49 Echo Bay 11 '27 80 - 84 Flagstar 11 1/4 '04 40 - 42 (f) Harrah's Jazz 14 1/4 '01 30 - 32 (f) Hechinger 9.45 '12 73 - 75 Hill's 12 1/2 '03 79 - 80 Grand Union 12 '04 53 - 54 Levitz 9 5/8 '03 34 - 36 (f) Liggett 11 1/2 '99 66 - 69 Marvel 0 '98 3 - 4 Mobilmedia 9 3/8 '07 8 - 11 (f) Mosler 11 '03 76 - 78 Royal Oak 11 '06 71 - 75 Speedy Muffler 10 7/8 '6 63 - 65 (f) Stratosphere 14 1/4 02 52 - 58 (f) Trump Castle 11 3/4 '03 92 1/2 - 93 1/2 Wickes 11 5/8 '03 93 - 94 The distressed bond market continues to get weak into the year-end. In particular, Cityscape bonds were in another 10 points and the wireless sector was very weak and very thinly 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 * *