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T R O U B L E D C O M P A N Y R E P O R T E R
Friday, May 28, 1998, Vol. 2, No. 105
Headlines
BIG RIVERS: Modified Disclosure Statement Approved
BRUNO'S INC: Seeks Reclamation Program Approval
CAJUN ELECTRIC POWER: Justice Department Sues PECO
CONSOLIDATED STAINLESS: Court Sets Bar Date
CRAIG CONSUMER ELECTRONICS: Motion to Dismiss Case
FIRST ENTERPRISE FINANCIAL: Bar Date Set
FORSTMANN: Acquires Arenzano Trading Co.
HOME HOLDINGS: Confirmation Snagged On AmBase Claim
MANHATTAN BAGEL: Extension to Assume or Reject Leases
MEDICAL RESOURCES: Fir Tree Purchases Stock
NEVADA STADIUM: Polyphase Corp. Tangled Up in Bankruptcy
PARTY EXPERIENCE: Closing Stores, Seeking Buyer
POWELL USA: Case Summary & 20 Largest Creditors
PUDGIES'S CHICKEN: Scheduled to Be Sold for $1 Million
QUALITY CARE CENTERS: Files Chapter 11
RELIANCE ACCEPTANCE: Seeks Extension of Exclusivity
ROASTERS CORP: Order Authorizes Professionals
SEARCH FINANCIAL: Creditor Bids To End Plan Exclusivity
SUBSTANCE ABUSE TECHNOLOGIES: Emerges with New Name
VOICE POWERERD: Files Quarterly Report
ZENITH: Agreement Reached with LG Electronics
DLS CAPITAL PARTNERS: Bond Pricing for Week of May 26, 1998
*********
BIG RIVERS: Modified Disclosure Statement Approved
---------------------------------------------------
The court approved the modified disclosure statement of
Big Rivers Electric Corp. Most of the objections, including
one filed by The Chase Manhattan Bank, were resolved prior
to the hearing and the objection filed by PacifiCorp
Kentucky Energy Co. was overruled. (The Daily Bankruptcy
Review Copyright c May 28, 1998 - ABI 28-May-98)
BRUNO'S INC: Seeks Reclamation Program Approval
-----------------------------------------------
Bruno's Inc. has asked the court to approve proposed
procedures to settle about 285 reclamation claims with a
combined value of more than $28.9 million by granting
allowed claim holders administrative expense status. The
supermarket operator noted that the official unsecured
creditors' committee supports the reclamation program and
that the procedures represent an "efficient and cost
effective method" of resolving the claims. Bruno's also
said it is in the process of reviewing the over
6,500 invoices covering the reclaimed goods and analyzing
any set offs, deductions, credits or other defenses to the
claims, a process that will not be completed until after
June 15. (Federal Filings Inc. 28-May-98)
CAJUN ELECTRIC POWER: Justice Department Sues PECO
--------------------------------------------------
The Department of Justice, joined by the Chapter 11 Trustee
for Cajun Electric Power Cooperative, Inc. sued a
Philadelphia-based utility company seeking more than $67
million in damages because the company allegedly reneged on
an agreement to purchase a 30 percent interest in a
Louisiana nuclear power plant.
The suit filed today on behalf of the Rural Utilities
Service of the Department of Agriculture in District Court
in Baton Rouge seeks damages from PECO Energy Company, an
electrical and natural gas utility.
The suit alleges that in 1997 PECO entered into contracts
to purchase a portion of the river Bend nuclear power plant
in Eastern Louisiana for $50 million, but subsequently
reneged on it s contractual obligations without
justification. As a result of PECO's failure to comply
with its contractual obligations, RUS suffered damages
equal to the $50 million contract price, plus interest,
because RUS was unable to locate another purchaser within
the time allowed for the government to receive the sales
proceeds, under a settlement previously approved in the
Cajun Electric Chapter 11 case.
The lawsuit states that PECO had agreed to purchase 30% of
the River Bend nuclear plant from Cajun, which previously
owned the 30 % interest in the plant. The suit alleges
that the Cajun estate suffered a variety of other form s of
damages totaling $17,364,687.
CONSOLIDATED STAINLESS: Court Sets Bar Date
-------------------------------------------
By order of the court dated May 6, 1998 in the case of
Consolidated Stainless, Inc., all proofs of claim and
proofs of interest shall be filed with the court in writing
on or before July 1, 1998.
CRAIG CONSUMER ELECTRONICS: Motion to Dismiss Case
--------------------------------------------------
On June 16, 1998, the debtor, Craig Consumer Electronics
will seek entry of an order dismissing the Chapter 11 case.
The debtor currently has no tangible assets and there is
nothing to be gained from keeping the debtor in Chapter 11
or converting the case to a Chapter 7.
FIRST ENTERPRISE FINANCIAL: Bar Date Set
----------------------------------------
In the case of First Enterprise Financial Group, inc., and
First Enterprise Acceptance Company, the court entered an
order on May 14, 1998 setting July 22, 1998 as the Bar Date
by which all claims are to be filed with the Bankruptcy
Court.
FORSTMANN: Acquires Arenzano Trading Co.
----------------------------------------
In a Form 8-K filed with the SEC, Forstmann & Company, Inc.
reported that on May 13, 1998, the company's recently-
formed, wholly-owned subsidiary, Forstmann Apparel, Inc.
acquired the business and substantially all of the assets
of Arenzano Trading Co., Inc., a manufacturer of women's
suits primarily under the "Oleg Casini" label.
Arenzano had instituted voluntary bankruptcy proceedings in
April 1998. Forstmann Apparel's purchase was made pursuant
to an order signed by United States Bankruptcy Judge Burton
R. Lifland, dated May 8, 1998. The purchase price paid by
Forstmann Apparel was $2,000,000, although Forstmann, as an
unsecured creditor of Arenzano, is expected to receive a
distribution from the bankruptcy estate in the approximate
amount of $275,000 out of the proceeds to the estate of the
purchase.
The assets of Arenzano acquired included (i) all of its
inventories of finished goods and piece goods (other than
certain finished goods on consignment and returned goods),
including work-in-progress located at the factories of
Arenzano's suppliers and subcontractors, (ii) all customer
orders and customer lists, (iii) all patterns, samples,
shipping materials, advertising materials and all office,
cutting, sewing, sample room and other equipment (other
than certain computers, machinery, furniture and equipment
located in Florida) and (iv) all trademarks, trade names
and license agreements to which Arenzano was a party,
including Arenzano's exclusive license to use the "Oleg
Casini" name. The acquired assets did not include any of
Arenzano's cash or cash equivalents, accounts receivable or
claims against third-parties.
HOME HOLDINGS: Confirmation Snagged On AmBase Claim
---------------------------------------------------
The court postponed Home Holdings Inc.'s confirmation
hearing, slated for May 26, to June 1 to allow negotiations
to continue between Zurich Insurance Co., the company's
parent, and dissenting creditor AmBase Corp. According to
attorneys connected to the case, the parties will present
to the court on June 1 either the third amended
reorganization plan together with AmBase's objection, and
allow the court to rule, or with a further modified plan
reflecting a settlement between AmBase and Zurich. (Federal
Filings Inc. 28-May-98)
MANHATTAN BAGEL: Extension to Assume or Reject Leases
-----------------------------------------------------
In the case of Manhattan Bagel Company, Inc., and I & J
Bagel, Inc., debtors, the court granted the application of
the debtors extending the time to assume or reject all
leases of nonresidential real property through to September
15, 1998.
MEDICAL RESOURCES: Fir Tree Purchases Stock
-------------------------------------------
FIr Tree Inc., d/b/a Fir Tree Partners filed a Form 13D
with the SEC relating to shares of common stock of Medical
Resources, inc. As of May 19, 1998, Fir Tree Partners had
invested (i) $7,733,002 in shares of Common Stock through
Fir Tree Value Fund, (ii) $2,981,847 in shares of Common
Stock through Fir Tree Institutional and (iii) $1,193,163
in shares of Common Stock through Fir Tree LDC, all as
described in Item 5 below. The source of these funds was
the working capital of each of Fir Tree Value Fund, Fir
Tree Institutional and Fir Tree LDC, as the case may
be. The shares of stock were acquired for investment
purposes.
As of May 19, 1998, Fir Tree Partners and Mr. Tannenbaum
are beneficial owners of 2,861,000 shares of Common Stock
of the Issuer or 12.62% of the shares outstanding. The
2,861,000 shares described above are beneficially owned by
Fir Tree Partners and Mr. Tannenbaum for the account
of the Fir Tree Value Fund, Fir Tree Institutional or Fir
Tree LDC, as the case may be.
NEVADA STADIUM: Polyphase Corp. Tangled Up in Bankruptcy
--------------------------------------------------------
A Dallas company that was planning a $750 million domed
stadium and hotel project in Las Vegas has filed for
Chapter 11 bankruptcy. Nevada Stadium Partners,
controlled by Paul Tanner, the former chairman and
CEO of the Dallas diversified firm Polyphase Corp., sought
protection in U.S. Bankruptcy Court in Dallas on May 1 -
three days before the scheduled foreclosure sale of a 61.5-
acre parcel on which the Vegas project was planned.
In 1996, Tanner announced plans for the complex, which
included an 85,000-seat, $450 million stadium, a 500-room
hotel, 250,000 square feet of convention and meeting space
and an 8,500-car parking garage. But the company wasn't
able to sell 300 "luxury boxes" in the stadium, which were
supposed to raise a total of $450 million. Other attempts
at raising money also fell through.
Nevada Stadium later defaulted on a nearly $45 million loan
for the land from Lehman Brothers Holdings Inc., which was
a 50% partner in the stadium project. In federal filings
earlier this year, Polyphase said he was trying to sell or
refinance the property to repay the loan to Lehman.
That didn't happen, and the land was put into foreclosure
Jan. 5. Old Republic Title Co., which is handling the
proceeding for Lehman Bros., suspects the bankruptcy
filing was done to tie up the land, said Ann Denton,
foreclosure officer at the company.
Nevada Stadium listed assets and liabilities of between $10
million and $100 million, with between 16 and 49 creditors.
For the three months ended Dec. 31, Polyphase reported
profits of $881,571 on sales of $37.3 million. That
compares to a loss of $67,237 on revenues of $36.1 million
for the same period in 1996.(Dallas Business Journal-
05/15/98)
PARTY EXPERIENCE: Closing Stores, Seeking Buyer
-----------------------------------------------
The Party Experience grew rapidly in several directions,
chasing deals as kids would balloons, then filed for
Chapter 11 bankruptcy reorganization in January. Now the
company's trying to regain control by shutting some 20
stores and seeking a buyer for what's left.
But some creditors predict the retailer of decorations,
invitations and trinkets used for children's parties will
be liquidated, with its assets of $56.1 million sold
piecemeal to the highest bidders. After the store closings,
there are 54 remaining, plus three warehouses and a
headquarters building on Ruland Road in Melville. (All the
space is rented.)
Michael Moore, chief financial officer, previously blamed
The Party Experience's downfall on an expansion plan that
called for the retailer to grow beyond its 14 Long Island
stores into New England and upstate, through the 1995-96
purchase of Paperama and The Paper Cutter, which primarily
sold stationery and books upstate. But the acquisitions
transformed The Party Experience into what executives
claimed was the nation's largest retailer of
party products, with sales of $94.3 million in the fiscal
year ended April, 1997, up from $24.5 million two years
earlier.
Since filing for Chapter 11, The Party Experience has
remained open thanks to millions of dollars in loans from
the CIT Group / Business Credit of Manhattan. CIT is the
only secured creditor, owed $22.8 million before the
bankruptcy filing and at least $2 million since.
CIT attorney Peter Feldman declined to comment yesterday
but did not refute Bankruptcy Judge Dorothy Eisenberg's
assessment that without CIT funds, The Party Experience
wouldn't be operating. The judge said, "The debtor has no
money and is really operating with borrowed funds."(Newsday
- 05/28/98)
POWELL USA: Case Summary & 20 Largest Creditors
--------------------------------------------------
Debtor: Powell USA Inc and Power Operating Co. Inc.
RR#1
Box 668H
Houtzdale, PA 16651
Court: District of Delaware
Case No.: 98-1136 and 98-1137 Filed: 05/27/98
Chapter: 11
Debtor's Counsel: David B. Stratton
Pepper Hamilton LLP
1201 Market Street, Suite 1600
Wilmington, Delaware 19801
(302) 777-6500
20 Largest Unsecured Creditors:
Name Nature* Amount
---- ------ ------
Jem Industries Inc. TD $3,591,544
JJ Powell TD $434,309
AW Long Construction TD $221,327
Junior Coal Contracting Inc. TD $177,318
Wampum Hardware TD $140,882
Orenstein & Koppel TD $126,430
J. Fenton & Sons, Ltd. TD $125,666
Frances harchak Royalty $112,353
Penn State Geissinger Health Ins $109,798
D. Rolland Ellis Trust Royalty $108,293
Rockwood Casualty Ins. Co. Workers' Comp $107,325
Good Brothers Tire Service TD $105,292
Apex Hydraulic & Machine Co. TD $86,091
Summers Fuel Inc. TD $76,123
D.C. Guelich Explosive Co. TD $63,202
Rebuild Inc. TD $62,811
Bezilla, Paul & Lenora Royalty $37,004
Pennsylvania Coal Association TD $35,891
George Cree Surveying TD $30,539
Central PA Tire Repair TD $28,160
*TD = Trade Debt
PUDGIES'S CHICKEN: Scheduled to Be Sold for $1 Million
------------------------------------------------------
Pudgie's Chicken Inc., the Uniondale-based chain of fried-
chicken take-out restaurants, is scheduled to be sold for
$1 million to an investor group at a bankruptcy court
auction tomorrow.
The 49-store chain, which has been struggling to continue
operating under Chapter 11 since filing for protection from
its creditors in September, 1996, is to be sold to Pudgie's
Acquisition Corp., a company formed by Lake Success-
based Jeff Bernstein, president of Consolidated Services
Inc., a bankruptcy consulting and accounting business.
The sale, subject to better and higher offers, is for cash
and the assumption of lease debts, which total $600,000 for
17 company-owned stores.
If completed - some creditors have objected to the sale -
the transaction will provide funds to pay off some of the
debts owed to Pudgie's secured creditors. Shareholders of
the publicly traded company would lose their investments,
and unsecured creditors, primarily suppliers, would receive
no payments, but presumably would have a customer for
future business. There are about $5.9 million worth of
claims.
Scott Stewart of the Uniondale law firm Rifkin, Radler &
Kramer, attorney for Pudgie's unsecured creditors
committee, said the deal was the best way of "salvaging
what is not a good situation. This will at least allow them
to maintain trade relationships."
No reorganization plan will be filed, said Pudgie's lawyer
Jonathan Pasternack of the Harrison-based law firm Rattet &
Co., noting that the case could either be liquidated after
conversion to a Chapter 7 or dissolved under Chapter 11.
QUALITY CARE CENTERS: Files Chapter 11
--------------------------------------
PHC Inc.'s subsidiary, Quality Care Centers of
Massachusetts Inc., filed chapter 11 earlier this week in
the District of Massachusetts. The company, which operates
the Franvale Nursing and Rehab Center, had already been
classified as "discontinued operations" on PHC's financial
statements. A PHC official said there had been an attempt
to sell the subsidiary and when that became uncertain, PHC
officials decided it was in the best interest of
shareholders to allow the subsidiary to file for bankruptcy
protection. (ABI 28-May-98)
RELIANCE ACCEPTANCE: Seeks Extension of Exclusivity
---------------------------------------------------
The debtors, Reliance Acceptance Group, Inc., et al., seek
an extension of the debtors' exclusive periods in which to
file a plan of reorganization and solicit acceptances
thereof. A hearing will be held on June 9, 1998.
The debtors seek a 60-day extension, from June 9, 1998
through and including August 9, 1998, of the period during
which the debtors will maintain the exclusive right to file
a plan resolving this case, as well as a 60-day extension
from June 9, 1998 through and including August 9, 1998, of
the period during which the debtors will have the exclusive
right to solicit acceptances to such a plan.
The debtors' chapter 11 plan is scheduled to be considered
at the June 30, 1998 Confirmation Hearing. The debtors
seeks a brief extension of the exclusive periods to afford
them additional time to resolve any issues which may arise
prior to confirmation of their plan. The requested
extension would ensure that, notwithstanding any unforeseen
delays, the debtors may present the plan to the court on a
consensual basis.
ROASTERS CORP: Order Authorizes Professionals
---------------------------------------------
The court entered an order in the case of Roasters Corp.,
debtor, authorizing the employment of Owen E. Dempsey as a
real estate consultant in the sale of certain real estate
in Memphis, Tennessee and a leasehold interest in West
Mifflin, PA and for authority to employ Oates Commercial
Properties as realtors to assist the debtor in the sale of
the Memphis real estate.
The court also entered an order authorizing the employment
of Bradley & Berry to assist the debtors with financial
forecasts and other documents necessary for the preparation
of their disclosure statement and the administration of the
case, establish proper financial controls to the extent
necessary, provide consultation regarding financial
staffing and management, review tax returns, and any other
accounting services required by the debtors.
SEARCH FINANCIAL: Creditor Bids To End Plan Exclusivity
-------------------------------------------------------
Claiming to be "ready to file and seek confirmation of a
plan that is in the best interests of the creditors,"
Hall Phoenix/Inwood Ltd. is seeking to terminate Search
Financial Services Inc.'s exclusivity. Hall Phoenix,
Search's largest creditor with a $5 million subordinated
note and controlled by former Search director Craig Hall,
asserted that Search is "incapable of filing and
confirming" a viable reorganization plan. Search, with
exclusive periods to file and plan and solicit plan
acceptances set to expire on July 4 and Sept. 2,
respectively, reported $7 million in losses for March and
anticipated needing of over $300 million to finance a
proposed five-year business
plan. (Federal Filings Inc. 28-May-98)
SUBSTANCE ABUSE TECHNOLOGIES: Emerges with New Name
---------------------------------------------------
Substance Abuse Technologies, Inc. (SAT) on Tuesday
officially emerged from a management-led chapter 11
reorganization and became a private corporation,
Employee Information Services Inc., (EI), according to a
news release. Employee Information Services now has the
financial backing of Steven A. Cohen and S.A.C. Capital
Associates, with approximately $1 billion under management.
The new company, which provides both third-party drug
testing administration and consulting and legal services on
drug-free workplace and background screening programs, has
offices in Colorado and Florida. (ABI - 28-May-98)
VOICE POWERERD: Files Quarterly Report
--------------------------------------
Voice Powered Technology Inc. filed a 10-QSB with the SEC,
reporting its quarterly sales for the three months ended
March 31, 1998. Sales for the three months ended March 31,
1998 were $303,000, while sales for the three months ended
March 31, 1997 were $1,341,000. For the three months ended
March 31, 1998, the Company reported an operating loss of
$353,000, as compared to an operating loss of $1,347,000
for the three months ended March 31, 1997.
The Company has incurred significant, sustained net losses
for the past three years, including $417,000 for the three
months ended March 31, 1998. Further, the Company has an
accumulated deficit of $2,901,000 and negative working
capital of $293,000 at March 31, 1998
ZENITH: Agreement Reached with LG Electronics
---------------------------------------------
Zenith Electronics Corporation and LG Electronics Inc.,
(LGE) and LG Semicon Co., Ltd, have reached an agreement in
principle regarding a proposed, prepackaged plan of
reorganization of the Company designed to reduce the
Company's debt and improve its financial health. Under the
proposed Plan, LGE will convert approximately $200 million
of the Company's obligations to LGE into newly issued
common stock of the Company, representing 100% of the
equity of the restructured Company.
In addition, approximately $210 million of claims held by
LGE will be exchanged for certain manufacturing assets of
the Company located in Mexico and secured notes due 2008 on
which interest may be paid in kind under certain
circumstances. Pursuant to the proposed Plan, LGE would
provide an additional $60 million of credit support to help
finance the implementation of the Plan. The proposed Plan
also will provide that all currently outstanding Common
Stock, including Common Stock held by LGE and LG Semicon,
will be canceled and holders of Common Stock will receive
no distribution.
The proposed restructuring of the Company is subject to a
number of conditions, including definitive documentation
and receipt of necessary approval from the Company's
creditors and the court presiding over the prepackaged
Plan. LGE's support for the proposed Plan is subject to the
Company securing additional financing from third parties,
the implementation of the Company's operational
restructuring, receipt by LGE of necessary approvals
from regulatory authorities in the Republic of Korea and
numerous other conditions. There can be no assurance that
the proposed restructuring will be consummated or that it
will not be modified or that completion of such
restructuring will not be delayed.
DLS CAPITAL PARTNERS: Bond Pricing for Week of May 26, 1998
-----------------------------------------------------------
Following are indicated prices for selected issues:
Amer Telecasting 0/14 1/2 '04 24 - 26
Asia Pulp & Paper 11 3/4 '05 87 1/2 - 89
APS 11 7/8 '06 10 - 14(f)
Boston Chicken 7 3/4 '04 30 - 31
Brunos 10 1/2 '05 17 - 20(f)
CAI Wireless 12 1/4 '02 22 - 24
Cityscape 12 3/4 '04 42 - 44(f)
E & S Holdings 10 3/8 '06 65 - 67
Grand Union 12 '04 58 - 59(f)
Greate Bay 10 7/8 '04 86 - 87(f)
Harrah's Jazz 14 1/4 '01 32 - 34(f)
Hechinger 9/45 '12 75 - 77
Hills 12 1/2 '03 97 1/2 - 981/2
Levitz 9 5/8 '03 51 - 53(f)
Liggett 11 1/2 '99 72 - 74
Mobilemedia 9 3/8 '07 23 - 26(f)
Penn Traffic 9 5/8 '05 41 - 42
Royal Oak 11 '06 83 - 85
Service Merchandise 9 '04 77 - 78
Trump Castle 11 3/4 '03 92 - 93
Zenith 6 1/4 '11 26 - 28(f)
*********
The Meetings, Conferences and Seminars column appears
in the TCR each Tuesday. Submissions via e-mail to
conferences@bankrupt.com are encouraged.
Bond pricing, appearing each Friday, is supplied by DLS
Capital Partners, Dallas, Texas.
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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.
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