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/raid1/www/Hosts/bankrupt/TCR_Public/980330.MBXT R O U B L E D C O M P A N Y R E P O R T E R Monday March 30, 1998, Vol. 2, No. 61 Headlines AL TECH: Seeks Authority for Contract with National Fuel AR ACCESSORIES: Still Seeks Buyer -Interim DIP Pact Ok'd ALLIANCE ENTERTAINMENT: Seeks To Amend DIP Pact BOCA RESEARCH: Announces 43 Percent Decrease in Sales DOEHLER JARVIS: Notice of Intent to Sell Certain Assets DOEHLER JARVIS: Seeks Order to Approve Shutdown Agreement DOW CORNING: Application to Employ Solicitation Agent FRETTER: Motion for Order Approving Global Settlement GREATE BAY: Applies to Employ Special Land Use Counsel HOME HOLDINGS: Objects to Proof of Claim of AmBase INSILCO CORP: Sold for $437 M - 5 Years After Bankruptcy MARVEL ENTERTAINMENT: Equity Panel Wants Bondholders Back MARVEL ENTERTAINMENT: Toy Biz Announces $20M Working Capital MIDCOM: Committee Seeks Re-Referral of Frontier Motion MOLTEN METAL: Committee's Objection to Retention Plan PEGASUS GOLD: Order Approves Coopers & Lybrand PEGASUS GOLD: Severance and Retention Program Hearing Set SOLV-EX CORP: United Tri-Star To Acquire 12% Interest DLS CAPITAL PARTNERS: Bond Pricing for Week of 3/23/98 ********* AL TECH: Seeks Authority for Contract with National Fuel --------------------------------------------------------- Al Tech Specialty Steel Corporation is seeking an order authorizing the debtor's assumption of an executory contract, as amended, between the debtor and National Fuel Resources, Inc.(NFR) As of March 1, 1998 the debtor and NFR agreed to a modified gas purchase agreement for a term of seven months. Under the terms of the contract the debtor is now required to pay NFR a reduced purchase price. The supply of the natural gas is a necessary requirement of the debtor's continued operation. AR ACCESSORIES: Stilll Seeks Buyer -Interim DIP Pact Ok'd --------------------------------------------------------- AR Accessories Group Inc. is still seeking a buyer. AR has interim court approval to use cash collateral and obtain debtor-in-possession financing from Bank One-Wisconsin as agent, pending an April 13 final hearing. The troubled leather goods manufacturer is talking to several potential purchasers and hopes to receive one or more written offers in the next several days. The sale effort was well underway when AR filed for bankruptcy on March 13. (Federal Filings Inc. 26-Mar-1998) ALLIANCE ENTERTAINMENT: Seeks To Amend DIP Pact ----------------------------------------------- Alliance Entertainment Corp. is seeking approval to amend its $50 million debtor-in-possession financing agreement with Chase Manhattan Bank to "avert impending defaults" under the DIP facility's current EBITDA covenants. Claiming that it would default as of March 31 if the modifications are not authorized, the music distributor said the amendment would reduce EBIDTA requirements and set monthly targets instead of the current quarterly mandates. A hearing is set for April 1. (Federal Filings Inc. 26-Mar-1998) BOCA RESEARCH: Announces 43 Percent Decrease in Sales ----------------------------------------------------- Boca Research Inc. of Boca Raton reported financial results for the fourth quarter and year ended Dec. 31. For the fourth quarter, sales were $16.5 million, a 43 percent decrease from sales for the prior year period. For the year ended Dec. 31, sales were $70.2 million, a 54.3 percent decrease over the previous year. Net loss for the year was $14.9 million, or $1.71 per share, compared to net income of $6.5 million, or 72 cents per share, for the year ended Dec. 31, 1996. (South Florida Business Journal -03/20/98) DOEHLER JARVIS: Notice of Intent to Sell Certain Assets ------------------------------------------------------- On April 7, 1998 a hearing will be held to consider the motion of Harman Automotive Inc., one of the debtors requesting entry of an order approving the sale ofcertain tooling owned by Harmant to General Motors Corporation for $800,000 (subject to higher bids). The Tooling consist of certain tooling used to manufacture mirrors for GM automobiles. DOEHLER JARVIS: Seeks Order to Approve Shutdown Agreement --------------------------------------------------------- Doehler-Jarvis, Inc., and its affiliated companies, as debtors, filed a motion for an order to approve a Shutdown Agreement among Harvard Industries, Inc. (an affiliated debtor) and the International Association of Machinists and Aerospace Workers, the Metal Polishers, Buffers, Platters and Helpers International Union, the Upholsterers International Union and the Carpenters District Council of St. Louis and vicinity. In conjunction with Harvard's wind-up of the St. Louis Facility and the disposition of its furniture business assets, Harvard has addressed the effect of the St. Louis Facility's closure on its union employees. The Shutdown Agreement provides benefits to and releases of possible claims from approximately 93 union employees affected by Harvard's decision to close down the St.Louis facility. Harvard acknowledges that the implementation of the Shutdown Agreement constitutes a proposed use of a debtor's property outside the ordinary course of business. By this motion, Harvard requests the entry of an order authorizing and approving the Shutdown Agreement. DOW CORNING: Application to Employ Solicitation Agent ----------------------------------------------------- The debtor, Dow Corning Corporation applies to employ D.F. King & Co., Inc. as solicitation agent. The debtor requests the services of D.F. King as its agent to design and manage a program to solicit acceptances of its reorganization plan. According to the debtor, this firm is the nation's largest independent solicitation firm and one of the oldest and most experienced solicitation firms in the country. Its customary billing rates range from $100 to $300. DOW CORNING: Insurance Co. Objects to Disclosure Statement ---------------------------------------------------------- Traveler Casualty & Surety Company objects to the proposed Second Amended Disclosure Statement of Dow Corning Corporation, debtor. Travelers states that there was an understanding between debtor's counsel and Travelers' counsel that Traveler was to be included within the definition of "Settling Insurer" under the proposed second amended plan. An exhibit to the proposed second amended plan lists Travelers as having "remaining limits" of $218,300,662 pursuant to the settlement agreement. Travelers does not know how the debtor arrived at that number, and Travelers is not included in a list of insurers that have executed a buy out settlement even though the settlement agreement includes a buy-out with respect to certain Dow Corning primary policies. FRETTER: Motion for Order Approving Global Settlement ----------------------------------------------------- Fretter, Inc. and its affiliated debtors are seeking court approval of a proposed global settlement between the debtors, Dixons U.S. Holdings, Inc. (the Silo Entities) and its affiliates and certain other key parties in interest. On the effective date of the Global Settlement, the Silo Entities will receive $8.5 million. The pension plans of the Silo Entities will ultimately be terminated, and plan assets will be distributed to plan beneficiaries in accordance with applicable regulations. Fretter is the subject of many lawsuits or claims by individual creditors of the Silo Entities. As part of the Global Settlement, Silo shall obtain a court order determining that Alter Ego Claims are the exclusive property of the bankruptcy estates of the Silo Entities, and that Silo's creditors are permanently enjoined and barred from bringing Alter Ego Claims against Fretter and Alter Ego claims are released pursuant to the Global Settlement. The effectiveness of the Global Settlement is contingent upon a resolution of disputed claims against Fretter. General unsecured creditors of Fretter with allowed prepetition claims shall receive a distribution of not less that 45% of such claims. On the Effective Date, the settling parties will release one another from causes of action between them. The debtors believe that the Global Settlement is an alternative to long-term litigation. It allows unsecured creditors a 45% return, claims will be withdrawn and litigation will be ended. GREATE BAY: Applies to Employ Special Land Use Counsel ------------------------------------------------------ Greate Bay Hotel and Casino, Inc. as debtor applies for entry of an order authorizing the debtor's employment of Perskie, Nehmad & Perillo as special land use counsel. The debtor requires the services of the firm for the special purpose of representing the debtor in real estate and land use matters. The debtor needs representation in connection with land use matters, specifically a pending prerogative writ action in the Superior Court of New Jersey, Appellate Division, between the debtor and The Atlantic City Zoning Board of Adjustment. The action relates to a challenge by the debtor to the granting of a certificate of land use compliance to a "gold store" located near the entrance of the Sands Hotel and Casino (owned by the debtor). The Sands contends that this use is not permitted under the existing zoning ordinance, and left unchallenged, the continuation of the use will have a deleterious effect on its business. HOME HOLDINGS: Objects to Proof of Claim of AmBase -------------------------------------------------- Home Holdings, Inc., debtor, objects to the proof of claim filed by AmBase Corporation. AmBase filed a proof of claim dated February 19, 1998 asserting an unsecured non-priority claim against the debtor in the total amount of $57,136,920. The debtor indicates on its Schedule F that AmBase holds a contingent claim in the amount of no more than $11,703,136. AmBase's proof of claim is based upon sections of the Stock Purchase Agreement and a "Tax Sharing Claim" which AmBase alleges that the debtor owes under a Consolidated Income Tax Agreement between AmBase and The Home Insurance Company. Home Holdings objects to the proof of claim due to: (a) A holdback claim representing an overstatement of a $23 million basket because AmBase failed to take into account payments of over $2 million made by Home Holdings. (b) A litigation claim that has no basis in law or fact. (c) A tax sharing claim that reflects AmBase's improper reversal of prior tax sharing payments and an improper charge of interest. INSILCO CORP: Sold for $437 M - 5 Years After Bankruptcy -------------------------------------------------------- Insilco Corp. will be sold to Donaldson, Lufkin & Jenrette Inc.'s merchant-banking unit for $437 million in cash, stock and assumed debt, the third time the diversified manufacturer will trade in a decade. DLJ Merchant Banking Partners II said yesterday that it will buy 90 percent of Dublin-based Insilco, which makes industrial parts and publishes yearbooks, for $44.50 a share in cash and stock. The fund is assuming $280 million of Insilco debt. Insilco moved to Dublin from Midland, Texas, in 1993 after emerging from bankruptcy protection. None of its 20 manufacturing operations is in Ohio. The company operates sites in 11 states, with several overseas facilities. The $3 billion DLJ fund uses a little of its money and a lot of debt to buy companies in the hopes of selling them later at a profit. It's taking control of Insilco from a Goldman, Sachs & Co. investment fund in the same business. When Goldman's Water Street Corporate Recovery Fund I LP took control, Insilco's prospects weren't as bright. Water Street specialized in buying bonds of troubled companies and using its holdings to wrest concessions and equity stakes. The fund stopped making new investments and the partners who managed it left Goldman in 1991 after clients complained the investment bank was competing with them to take over companies. Insilco, acquired in a 1988 buyout by Wagner and Brown, filed for bankruptcy in January 1991. Goldman's fund traded its Insilco bonds for 57 percent of the company's stock when it emerged from bankruptcy two years later. DLJ will pay Insilco shareholders $42.98 in cash and 0.03419 shares of the new company. The investors will get $172.6 million in cash and 137,328 shares of the new company. (Columbus Dispatch 03/25/98) MARVEL ENTERTAINMENT: Equity Panel Wants Bondholders Back --------------------------------------------------------- Marvel Entertainment Group Inc.'s equity committee has asked the court to kick out Chapter 11 Trustee John Gibbons and return bondholders to control of the company. The panel argued that Gibbons's appointment on Dec. 22 quickly became embroiled in controversy as parties in interest took appeals from the order appointing him and the decision denying his application to employ his law firm as counsel. (Federal Filings Inc. 26-Mar-1998) MARVEL ENTERTAINMENT: Toy Biz Announces $20M Working Capital ------------------------------------------------------------ Toy Biz, Inc. announced that it has completed the necessary arrangements for the extension of its working capital line of credit. As currently structured, the line of credit will provide the Company with up to $20 million (increasing to $29 million during October through mid-November) in financing. The facility is being provided by The Chase Manhattan Bank and Swiss Bank Corporation. As previously announced, Toy Biz has put forward a proposal to combine Toy Biz and Marvel. The Toy Biz proposal has the support of Marvel's Senior Secured Creditors and the Official Committee of Marvel's Unsecured Creditors. MIDCOM: Committee Seeks Re-Referral of Frontier Motion ------------------------------------------------------ The Official Unsecured Creditors' Committee of Midcom Communications Inc. requests that the bankruptcy court re- refer the motion for entry of order authorizing and directing Micdcom Communications Inc. to enter into a postpetition reciprocal buy/sell arrangement with Frontier Corporation, for the bankruptcy court's disposition. Frontier Corporation sued the debtor for alleged misappropriation of confidential information and for allegedly inducing Frontier's executives to breach their agreements with Frontier. Frontier sought injunctive relief and $11 million in damages. Since substantially all of Midcom's assets were sold in January, 1998 to WinStar Communications, Inc., the Committee believes that the Frontier proceedings should be referred to the bankruptcy court since the bankruptcy court is in a better position to determine whether Frontier's buy/sell agreement "arose" after the petition date or whether the agreement was of benefit to the estate, both of which are required to be established by Frontier to entitle it to a priority status as against the other unsecured creditors of Midocom. WinStar did not request an assignment of the buy/sell agreement. MOLTEN METAL: Committee's Objection to Retention Plan ----------------------------------------------------- The Official Unsecured Creditors' Committee of the debtors files a limited objection to the debtors' motion for authority to enter into an Employee Retention Plan. The Motion proposes to pay the debtors' 24 executives over $1.5 million in severance pay. The Committee believes that the proposal in its current form grants severance far too generous for the debtors' top two executives, each of who would receive 65 weeks of severance pay, and would allow executives to receive the maximum severance without regard to their post-petition tenure. The Committee suggests alternative payments, linked with the debtors' and the executives' performance. The Committee also points out that it is not clear form the motion whether severance and bonuses to be paid under the Motion are in replacement of, or in addition to any pre-petition employment contracts that the debtors may have with their employees. The Committee would support the motion only if, and to the extent that the severance and bonuses it requests are in replacement of any pre-petition contracts. PEGASUS GOLD: Order Approves Coopers & Lybrand ---------------------------------------------- The court entered an order on March 19, 1998 authorizing the debtor to retain and employ Coopers & Lybrand LLP for the debtors in all matters requiring the services of certified public accountants. The debtors shall deliver the sum of $85,000 as a retainer to Coopers & Lybrand for services to be rendered. PEGASUS GOLD: Severance and Retention Program Hearing Set --------------------------------------------------------- On April 10, 1998, Pegasus Gold Corporation, et al. will present a motion seeking authority to adopt and implement the Severance and Retention Plan and the Vacation Pay option. The total cost of the Severance and Retention Plan is in excess of $3 million. In support of its request, Pegasus Gold includes as exhibits incentive programs similar to the ones proposed to attract and retain a debtor's key employees. The debtor includes the programs of Stratosphere Corporation, The Wiz, Inc., Greate Bay Hotel & Casino, Inc., Venture Stores, Inc., MobileMedia Communications, Inc. and Bradlees Stores, Inc. PHELPS TECHNOLOGIES: Seeks Approval for $9.3 M Sale --------------------------------------------------- Phelps Technologies, Inc. and Phelps Tool and Die Houston, Inc., debtors, seek an order granting the debtors authority to sell substantially all of their assets at an auction. The debtors also seek approval of the assumption and assignment of executory contracts and unexpired leases, establishing bidding procedures, setting an auction and hearing date; and approving the form of notice of such sale. The debtors have received a proposal to purchase most, but not all of their assets from Foxconn Corporation for approximately $9.3 million plus the purchase price attributable to inventory. Any competing bid must exceed Foxconn's offer by at least $200,000. A break up fee of $60,000 is included in the offer. The debtors state that the break-up fee is appropriate and narrowly tailored to compensate Foxconn as the stalking horse. SOLV-EX CORP: United Tri-Star To Acquire 12% Interest ----------------------------------------------------- Pursuant to the previously announced agreement of February 11, 1998, United Tri-Star Resources Ltd. announced that it has closed into escrow an agreement with Solv-Ex corporation, Solv-Ex Canada Limited and Solv-Ex Canada Limited Partnership (collectively, "Solv-Ex") to acquire from Solv-Ex its 12 percent working interest in assets and interests, principally Alberta oil sands leases and related technologies. Solv-Ex is presently involved in a restructuring under the Companies Creditors Arrangement Act (Canada) and under Chapter 11 of the Bankruptcy Code in the United States. As part of the restructuring proceedings, Solv-Ex and UTS have closed into escrow an agreement with Koch Oil Sands Limited Partnership ("Koch"), pursuant to which Koch will acquire a 78 percent working interest in those assets. UTS has previously announced that pursuant to that agreement it would retain a 10 percent working interest in those assets, plus Solv-Ex's 12 percent for an aggregate of a 22 percent working interest in those assets. UTS has also acquired from Solv-Ex certain participation rights with respect to metal extraction technologies and hydrocarbon extraction technologies developed by Solv-Ex. The consideration payable to Solv-Ex will be 5,000,000 common shares of UTS and a cash payment of Cdn. $4.4 million. The transaction with Solv-Ex is subject to the receipt of necessary Court approval in the United States and Canada. DLS CAPITAL PARTNERS: Bond Pricing for Week of 3/23/98 ------------------------------------------------------ Following are indicated prices for selected issues: American Rice 13 '02 77 - 80 (f) Amer Telecasting 0/14 1/2 '04 18 - 20 Asia Pulp & Paper 11 3/4 '05 94 - 95 APS 11 7/8 '06 24 - 25 (f) Boston Chicken 7 3/4 '04 56 - 57 Bradlees 11 '02 7 - 8 (f) Brunos 10 1/2 ''05 18 - 20 (f) CAI Wireless 12 1/4 '02 20 - 23 Cityscape 12 3/4 '04 43 - 47 E & S Holdings 10 3/8 '06 82 1/2 - 84 Grand Union 12 '04 51 1/2 - 52 1/2 (f) Harrah's Jazz 14 1/4 '01 29 - 31 (f) Hechinger 9.45 '12 75 - 76 1/2 Hills 12 1/2 '03 91 1/2 - 93 Great Bay 10 7/8 '04 87 - 88 (f) Levitz 9 5/8 '03 44 - 46 (f) Liggett 11 1/2 '99 73 - 75 Marvel 0 '98 4 1/2 - 5 Mobilemedia 9 3/8 '07 11 1/2 - 12 1/2 (f) Penn Traffic 9 5/8 '05 44 - 46 Royal Oak 11 '06 75 1/2 - 78 Trump Castle 11 3/4 '03 95 3/4 - 96 3/4 Wickes 11 7/8 '03 96 1/2 - 97 1/2 ********* A listing of meetings, conferences and seminars appears each 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 Lexy Mueller, Editors. Copyright 1998. 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 * * *