/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/980825.MBXT R O U B L E D C O M P A N Y R E P O R T E R Tuesday, August 25, 1998, Vol. 2, No. 166 Headlines ALLIANCE ENTERTAINMENT: Plan Effective August 20 BARNEY'S: To Sell Property For $22M After Bidder Walks CABLE & CO. WORLDWIDE: Case Summary CHATCOM INC: May Be Forced To File Bankruptcy DOW CORNING: Plan Will Be Finalized By Mid-September ELDER BEERMAN: Turns a Second-Quarter Profit EURAM FLIGHT CENTER: Ticket Consolidator Files Chapter 11 FULCRUM DIRECT: Gets Final DIP Financing Approval GATEWAY DATA SCIENCES: Notice of Sale KELLER FINANCIAL SERVICES: Trustee Sues For Assets LEVITZ FURNITURE: Household Agreement- More Profitability LONG TERM CREDIT BANK: Entire Board To Resign MAIN STREET: Acquires 18 Firms for $13.68 Million MARKAIR: To Collect $19 Million MERCURY FINANCE: CEO Must Testify For Pact Approval MOLTEN METAL: Acceleration Notice From Lenders ORANGE COUNTY: Merrill Lynch Agrees To Pay $2 Million PARAGON TRADE: Replies to Objections to Exclusivity Extension PARADISE HOLDINGS: To Sell Bakery Through Chapter 11 PINNACLE BRANDS: Seeks Approval of Letter of Intent RINCON ISLAND: Case Summary & 20 Largest Creditors TRIDEL ENTERPRISES: Announces Results For Six Months WASTEMASTERS INC: Results of Operations WEINTRAUB ENTERTAINMENT: Bear Stearns Liable in Bond Suit WESTMORELAND COAL: Equity Responds to Dismissal of Cases WESTMORELAND COAL: Equity Taps Putnam, Hayes & Bartlett WESTMORELAND COAL: Hearing Date Re-Set WINDSOR ENERGY: Difficult Times in Oil Pricing Meetings, Conferences and Seminars ********* ALLIANCE ENTERTAINMENT: Plan Effective August 20 ------------------------------------------------ Alliance Entertainment Corp., the largest wholesaler of prerecorded music and related products, announced that its Plan of Reorganization became effective August 20, 1988, providing for the Company's concurrent emergence from its voluntary Chapter 11 proceeding. The company's Third Amended Joint Plan of Reorganization was confirmed by the U.S. Bankruptcy Court for the Southern District of New York on July 30, 1998. "The newly reorganized Alliance Entertainment Corp. emerges from Chapter 11 just a little over a year since its voluntary filing," said President and Chief Executive Officer Eric Weisman. ".we can focus on music distribution and opportunities for growth through emerging distribution channels with emphasis on the Internet." The newly reorganized Alliance Entertainment is a private company majority owned by a syndicate of banks. The terms of the Plan called for holders of secured bank claims under the Company's prepetition credit facilities to receive at least 86 percent of the shares in the new reorganized Company. Holders of general, allowed unsecured claims, including trade claims and Senior Subordinated Notes, will receive up to 6.5 percent of the equity of the reorganized Company through warrants and shares of common stock, along with certain litigation rights. The remaining 7.5 percent of the equity will go to management. The cancellation of the existing common stock in the old Alliance Entertainment becomes effective. Under the terms of the Plan, shareholders in the old Alliance Entertainment received no distribution, either in cash or common stock of the new Company. BARNEY'S: To Sell Property For $22M After Bidder Walks ------------------------------------------------------ Barney's Inc. received court approval to sell its lower Manhattan property to BB Realty Holdings LLC for $22 million after the stalking horse bidder exercised an opt- out clause in its purchase agreement. BB Realty was the only bidder for the property after 113-117 Seventh Avenue LLC decided to invoke the opt-out clause of its purchase agreement days before the deadline. The upscale retailer originally sought approval to sell the site of its original flagship store to 113-117 Seventh Avenue for $23 million, subject to higher offers at an auction. (The Daily Bankruptcy Review and ABI Copyright c August 24, 1998) CABLE & CO. WORLDWIDE: Case Summary ----------------------------------- Debtor: Cable & Co. Worldwide, Inc. 724 Fifth Avenue New York, NY 10019 Type of business: Designs, Manufactures, imports & markets on a wholesale basis a broad range of men's casual and dress footwear. Court: Southern District of New York Case No.: 98B4 5878 Filed: 08/14/98 Chapter: 11 Debtor's Counsel: Jay L. Silverberg Silverberg Stonehill & Goldsmith PC 111 West 40th Street New York, NY 10016 (212) 730-1900 CHATCOM INC: May Be Forced To File Bankruptcy --------------------------------------------- It has been a bad quarter for ChatCom Inc. In a filing with the Securities and Exchange Commission this week, the Chatsworth-based maker of computer servers said it is in a "liquidity crisis." If debt obligations are not renegotiated, ChatCom "may be forced to file bankruptcy by some of its creditors," according to the report. On Friday, ChatCom reported a sharply higher net loss and a 79 percent sales drop in its most recent quarter, mainly due to product returns from a distributor whose business was hurt by the Asian crisis, and weaker-than-expected demand in recent months. Adding to the company's bad news, ChatCom was delisted from Nasdaq this week for not meeting minimum listing requirements. It is now trading on the OTC Bulletin Board, a computerized exchange with no minimum requirements. The distributor's product return amounted to "a very big hit for a company our size," said spokesman Jerry Hahn. Macon Holdings in Singapore returned $2.7 million worth of products, of which $1.2 million worth had been resold. Sales to U.S. distributors also declined due to weaker demand and cutbacks in advertising and sales efforts because of the company's cash problems. On Friday, ChatCom reported a net loss of $1.13 million (10 cents a diluted share) on sales of $915,000 for the first quarter of fiscal 1999 compared with a net loss of $585,000 (6 cents) and sales of $4.459 million a year ago. ChatCom shares dipped to 16 cents Friday, down $0.0275, or 14.67 percent. The company suffers from negative cash flow, causing it to default on several loans, according to the SEC filing. ChatCom sold products at cost in the first quarter as its gross margin shrank to 0 percent from 36 percent, according to the regulatory filing. ChatCom has suffered from three fiscal years of operating losses. It has laid off workers over the past year, shrinking from 90 employees to 35 today. As a result, the company reached an agreement in principle with a supplier, Vermont Research Products Inc., and High View Capital, a shareholder and creditor, to sell them its BrightStar technology in exchange for a relief package worth $5.8 million. ChatCom will license back the technology. The company also stands to borrow up to $300,000 from ALCO Financial Services if it meets certain conditions. (Los Angeles Daily News -08/22/98) DOW CORNING: Plan Will Be Finalized By Mid-September ---------------------------------------------------- A federal mediator says attorneys for Dow Corning Corp. and its creditors hope to finalize details of a bankruptcy settlement plan by mid-September. The mediator, Duke University Professor Francis McGovern, gave an update of the reorganization plan to a federal bankruptcy judge in Bay City. He says the process is on scheduled. The settlement announced last month calls for creditors and thousands of women with breast-implant claims to receive $3.2 billion. Dow Corning has been operating under Chapter 11 bankruptcy protection since May 1995. (UPI: Wall Street- 08/21/98) ELDER BEERMAN: Turns a Second-Quarter Profit -------------------------------------------- Elder-Beerman Stores Corp. had a second-quarter profit of $239,000, compared with a $2.3 million loss a year ago while the retailer was still in Chapter 11 bankruptcy reorganization. Earnings per share were 2 cents compared with an $18.83 per-share loss for the second quarter of 1997, the Dayton- based regional department store company reported today. The company is absorbing the Stone & Thomas retailer, based in Wheeling, W.Va., in a $38 million merger. Excluding expenses from that merger, Elder-Beerman said its second- quarter earnings would have been $592,400, or 5 cents per share. Sales for the quarter ended Aug. 1 totaled $125.5 million, up from last year's $122.1 million. For the first half of this fiscal year, Elder-Beerman lost $197,000, or a 2-cent loss per share, compared with a $5.6 million loss a year ago. The per-share loss for the first half of 1997 was $45.18. Sales for the first half were $252.2 million, up from $242 million last year. Elder-Beerman emerged Dec. 30 from two years in bankruptcy reorganization, which allows a company to continue operating under U.S. Bankruptcy Court protection from creditors while developing a plan to put its finances in order. With 48 stores at the end of fiscal 1997, Elder-Beerman reported revenues of $607.9 million and sales of $581.4 million. On July 27, the company completed the purchase of 21 Stone & Thomas stores and plans to retain 10 of those, selling the others. That will give Elder-Beerman 58 department stores in Ohio, Indiana, Illinois, Michigan, Wisconsin, Kentucky and West Virginia. The company plans to open a store in Erie, Pa., this summer. It also operates 61 El-Bee and Shoebilee! shoe stores in seven states and two furniture superstores. EURAM FLIGHT CENTER: Ticket Consolidator Files Chapter 11 --------------------------------------------------------- A Washington-based airline ticket consolidator, Euram Flight Center, has closed its doors and filed for chapter 11 bankruptcy protection, leaving passengers and travel agents without tickets they had purchased but not yet received. Euram has been in business for 18 years and sold more than 140,000 tickets a year, according to Travel Weekly. It closed the doors of its Washington office on July 22 and filed for bankruptcy protection in Florida, where it has an office in Fort Lauderdale. The company's owner, David Scott, told the trade newspaper that he hoped to resume business after reorganizing the company. He also said that 90 percent of ticket purchases from Euram were made with credit cards and that those customers should request a credit on their accounts. Customers who paid by cash, check or money order will have to file a claim form with the U.S. Bankruptcy Court for the Southern District of Florida in Miami. (Buffalo News- 08/23/98) FULCRUM DIRECT: Gets Final DIP Financing Approval ------------------------------------------------- The court gave final approval to Fulcrum Direct Inc.'s $2.1 million debtor-in-possession financing agreement last week. Fulcrum won interim court approval on July 31 to borrow up to $1.2 million from prepetition lender IBJ Schroder Business Credit Corp. while the catalog retailer pursues a sale. (Federal Filings Inc. 24-Aug-98) GATEWAY DATA SCIENCES: Notice of Sale ------------------------------------- A sale shall be held in U.S. Bankruptcy Court on September 16, 1998. The property to be sold is the debtor's interest in the stock and assets of Cyclone Software Corporation. Cyclone is a developer of software to permit electronic commerce via the Internet. The purchaser is Intelispan, Inc. The purchase price includes $2 million in cash, a two year promissory note in the principal amount of $2 million with annual simple interest at 8% payable quarterly. The note is subject to certain discounts for early payment. The sale is subject to higher and better bids on substantially the same terms and conditions as the offer made by Intelispan to Cyclone. KELLER FINANCIAL SERVICES: Trustee Sues For Assets -------------------------------------------------- One week after Bankruptcy Judge Paul M. Glenn gave control of Keller Financial Services to trustee Kevin O'Halloran, he has filed lawsuits seeking certain assets, The St. Petersburg Times reported. The Clearwater, Fla., used car finance company managers own a separate Keller company not included in the bankruptcy case, which has a two-year contract to service the car loans owned by the 10 Keller companies in the chapter 11 reorganization. Keller managers allegedly delayed turning over property that belongs to the trustee's estate, and O'Halloran said one of the managers and a stockholder intimidated and threatened Keller employees. The state Department of Banking and Finance is in the midst of an investigation of the securities dealers who sold Keller's high-interest notes, which were backed by titles to used cars, mostly to elderly investors. LEVITZ FURNITURE: Household Agreement- More Profitability --------------------------------------------------------- Levitz Furniture Inc's proposed agreement with Household Bank N.A. would require the retailer to take on greater liability for credit losses but would be more lucrative than the current General Electric Capital Corp. deal. "Any increased exposure is expected to be offset by the program's potential for profitability for the Debtors," Levitz told the court. Household and Levitz would share equally in any losses in excess of 15% of the average account balances. About 45% of Levitz's retail sales are generated through the credit sales program with GE Capital, which includes a private credit card program. (Federal Filings Inc. 24-Aug-98) LONG TERM CREDIT BANK: Entire Board To Resign --------------------------------------------- The entire board of Long Term Credit Bank are to resign and the troubled Japanese bank is to be completely restructured in a deal that will write off bad debts worth 750 billion yen (pounds 3.3 billion). The news came on the day that Okura, a mid-sized Japanese trading house, filed for bankruptcy with debts totaling 258 billion yen (pounds 1.1 billion). It blamed its financial difficulties on property investments from the late 1980s that have gone badly wrong. LTCB, which is Japan's second largest credit bank, plans to sell its Tokyo headquarters, cut 700 jobs and ask all former board members who have retired since 1989 to pay back their retirement allowances. It will also forgive loans totaling 520 billion yen (pounds 2.3 billion) to three non-bank affiliates, including 120 billion yen to Japan Leasing Company, close its overseas operations and consolidate its domestic branch network. The restructuring is designed to facilitate LTCB's proposed merger with Sumitomo Trust & Banking and pave the way for the Japanese government to step in with huge amounts of money to prevent the bank failing. Katsunobu Ohnogi, president of LTCB, who will resign, said: "We have no choice but to depend on public funds. We would like the injection of funds to boost our capital as soon as possible." The bank is expected to ask for as much as one trillion yen (pounds 4.5 billion). Masaru Hayami, head of Japan's central bank, said he would guarantee keeping LTCB afloat by providing "the necessary assistance including funds needed". He added: "We see progress in the merger talks between the two banks as a contribution to financial system stability." A basic agreement on a merger with Sumitomo Trust should be reached by September. Sumitomo's president, Atsushi Takahashi, said the negotations would continue "in a forward-looking way to win the trust of the market, shareholders and clients." (Daily Telegraph London - 08/22/98) MAIN STREET: Acquires 18 Firms for $13.68 Million ------------------------------------------------- Main Street AC, San Jose, Calif., announced that it has acquired or secured its interest in 18 entities through eight purchase actions previously announced, according to a newswire report. Prior to these acquisition activities, Main Street existed as a shell company. To clearly settle any and all past or contingent liabilities to the satisfaction of selling principals, the company submitted its chapter 11 plan to the bankruptcy court in the Northern District of California. Main Street expects to be debt-free after the swap of $13.68 million in debt instruments for 10,214,416 shares of common stock, plus an equal number of warrants at an average price of $4 per share. The debt for equity swap calculates to a $1.34 value for each new Main Street common share and warrant issued. (ABI 24-Aug-98) MARKAIR: To Collect $19 Million ------------------------------- The Phoenix firms of Goodwin Raup and Lewis and Roca recently won a multimillion-dollar settlement against Alaska Airlines on behalf of MarkAir Inc. Under terms of the agreement, MarkAir will collect $19 million and be released from Alaska Air's claims totaling $660,000. In bankruptcy since 1995, MarkAir will use the settlement to pay claims filed by creditors, employees, ticket holders and unsecured creditors. The lawsuit began when MarkAir challenged Alaska Air on its control over service between Anchorage and Seattle. Alaska Air terminated the partnership and filed a state court claim alleging that MarkAir had used the airline's online reservations system to lure customers away from Alaska Air. MarkAir countersued in federal court, accusing Alaska Air of unfair business practices. The two suits were later combined into a single state action. MarkAir, formerly Alaska's largest intrastate airline, hired the Phoenix firms because of their experience in bankruptcy litigation. The trial team consisted of Marty Harper, Brian Goodwin and Paul Briggs of Goodwin Raup and Bob McKirgin and Randy Papetti of Lewis and Roca. MERCURY FINANCE: CEO Must Testify For Pact Approval --------------------------------------------------- In response to Mercury Finance Co.'s request to assume its contracts with Chief Executive Officer William Brandt Jr. and his management firm, the court ordered the CEO's deposition and continued the hearing on the company's motion to allow a shareholder group to file a response. After a series of continuances, the court scheduled the deposition for Aug. 26 and a status hearing for Sept. 8. The sub-prime lender hired Brandt on Feb. 1, 1997, and agreed to pay him $750,000 per year as well as a $1 million success bonus when a reorganization plan is confirmed. Mercury retained Brandt's firm, Development Specialists Inc., four days later. The company has paid DSI more than $4.1 million for services rendered during the 12 months prior to the July 15 petition date. (The Daily Bankruptcy Review and ABI Copyright c August 24, 1998) MOLTEN METAL: Acceleration Notice From Lenders ---------------------------------------------- On August 21, 1998, Restart Partners, L.P. and its affiliates, sent a letter to Molten Metal Technology, Inc. and its affiliates stating that as Lenders, Restart and its affiliates notify the debtor borrowers that an event of default occurred because of the inability of the borrowers to pay their post-petition debts as they mature. The Lenders therefor give the debtors an Acceleration Notice and declare the unpaid principal amount of the loan and all interest accrued thereon together with all other amounts due to be due and payable. ORANGE COUNTY: Merrill Lynch Agrees To Pay $2 Million ----------------------------------------------------- Merrill Lynch & Co. agreed Monday to pay $2 million to settle federal regulators' allegations of negligence arising from the 1994 bankruptcy of Orange County, Calif. Merrill, the nation's largest brokerage firm, neither admitted nor denied wrongdoing in the settlement the latest enforcement action by the Securities and Exchange Commission related to the Orange County case. The Wall Street giant also agreed to refrain from future violations. The SEC said it was the first time the market watchdog agency has directly blamed a bond underwriter for misleading its investment bankers by failing to give them vital information about a bond sale. Merrill underwrote $875 million in municipal securities issued by Orange County in July and August 1994. The $2 million civil penalty is one of the largest it has ever imposed for fraudulent conduct that was not intentional, the SEC said. Orange County sought federal bankruptcy protection in December 1994 after losing $1.64 billion from its investment pool, a savings bank for schools, cities, water and sewer districts. PARAGON TRADE: Replies to Objections to Exclusivity Extension --------------------------------------------------- Paragon Trade Brands, Inc. replies to the objections and responses filed in connection with the debtor's motion for order further extending the debtor's exclusive periods to file a plan of reorganization and solicit acceptances thereto. Paragon states that both Proctor and Gamble and Kimberly- Clark believe that if they hold out and continue stalling and litigating, this court will terminate exclusivity and essentially hand over the fate of Paragon's continuing viability to them - Paragon's largest competitors. Paragon believes that terminating exclusivity at this juncture would be unfair because Paragon has made good faith efforts to resolve the major issues in this case. Paragon believes that it may be useful to employ the voluntary services of Creditors' Committee counsel as mediator in an attempt to bridge the gap between the parties. However, the Exclusive Periods should be maintained during any mediation period or there will only be an attack against Paragon. Paragon, its Creditors' Committee, and its two adversaries did agree to a short date of extension until September 15, 1998 according to a report of Federal Filings Inc., 24-Aug- 98. PARADISE HOLDINGS: To Sell Bakery Through Chapter 11 ---------------------------------------------------- Paradise Holdings Inc. announced that it has filed for protection and reorganization under Chapter 11 of the Federal Bankruptcy Code. Under the protection of Chapter 11, the Company continues to operate its business in the ordinary course, while it develops a plan of reorganization. This protective action was the Company's only option after the unexpected and unilateral withdrawal of the offer by AFC Enterprises, Inc. to purchase the Company's Paradise Bakery operating assets as previously announced on August 11, 1998. Concurrent with the filing, the Company announced the signing of a conditional term sheet for the sale of substantially all of the assets of its Paradise Bakery & Cafe retail operations to a newly formed company, subject to final documentation. The new company's principals currently own and operate 12 Paradise Bakery & Cafe franchises in Colorado and Arizona. The purchase price of $2,500,000 is to be paid in cash at closing, subject to (1) overbids by other potential buyers, pursuant to a procedure to be approved by the bankruptcy court, and (2)bankruptcy court approval. The Company has retained Steven Felderstein of Diepenbrock, Wulff, Plant & Hannegan, LLP of Sacramento, CA as counsel, and Richard J. Crosby of Stoneridge Capital, Ltd., an investment banking firm of La Costa, CA to assist in the reorganization process. PINNACLE BRANDS: Seeks Approval of Letter of Intent --------------------------------------------------- Pinnacle Brands, Inc., and its affiliate debtors seek court authorization to enter into a letter of intent with Toy Biz, Inc. and approval of certain break-up fee, expense reimbursement, and other bidding procedures for the sale of substantially all of the debtors' assets related to their trading cards business to Toy Biz, Inc. The total consideration for the acquired asset5s is calculated based on a formula, but will not exceed $14,500,000. RINCON ISLAND: Case Summary & 20 Largest Creditors -------------------------------------------------- Debtor: Rincon Island Limited Partnership 5750 W. Pacific Coast Hwy. Ventura, California 93001 Court: District of Delaware Case No.: 98-7934 Date of Filing: 8/20/98 Chapter: 11 Debtor's Counsel: Jeffrey C. Wisler Williams Hershman & Wisler, P.A. One Commerce Center Suite 600 12th and Orange Street Wilmington, Delaware 19899-0511 Jeffrey E. Spiers David A. Zdunkewicz Andrews & Kurth LLP 600 Travis Suite 4200 Houson, Texas 77002 Bridgeport, CT 06605-0186 (203) 368-4234 20 Largest Unsecured Creditors: Name Nature Amount ---- ------ ------ American Pacific Marine, Inc. Trade Debt $506,261 Baker Oil Tools, Inc. Trade Debt $355,938 Baker Tanks, Inc. Trade Debt $42,545 B&B Surplus, Inc. Trade Debt $38,005 Berry Petroleum Company Trade Debt $1,000,000 Clark Engineering & Construction Trade Debt $101,531 Centrilift Trade Debt $715,000 Southern California Utilities $46,104 GASSCO Trade Debt $32,481 Grayson Services, Inc. Trade Debt $187,970 Halliburton Energy Services Trade Debt $451,715 KUDU California Trade Debt $38,000 KVS Transportation, Inc. Trade Debt $116,284 Mobil Oil Corporation Trade Debt $346,980 Nabors Drilling USA, Inc. Trade Debt $454,265 Pacific Perforating Inc. Trade Debt $28,298 Harold S. Pittman, Tax Assessor Property Tax $40,892 Smith-Patterson Paving, Inc. Trade Debt $38,000 Unichen Trade Debt $85,000 Weatherford Enterra US Trade Debt $218,203 TRIDEL ENTERPRISES: Announces Results For Six Months ---------------------------------------------------- Tridel Enterprises Inc. announced its results for the six months ended June 30, 1998. Net loss for the six months ended June 30, 1998 was $2.9 million as compared to a net loss of $8.3 million for the same period in 1997. Total revenues decreased by $97.1 million from $244.8 million for the six months ended June 30, 1997 to $147.7 million for the six months ended June 30, 1998. Net loss before business restructuring charges and income taxes was $0.4 million in 1998 as compared to net income of $3.3 million during the same period in 1997. The decrease was the result of lower revenue in the Residential Real Estate Division. An independent committee of the Company's board of directors has been formed in order to review all necessary aspects of the restructuring and make recommendations to the Company's board of directors. The Company's board of directors will be seeking approval of the debt and equity restructuring from the Company's shareholders and debenture holders. The Company will also be seeking court approval to its Plan of Arrangement in order to complete the restructuring. As part of the restructuring, the Company's board of directors will be reconstituted so that a majority of the directors will be persons independent of management. The Company's ability to continue operations as a going concern is dependent on the Company continuing to arrange the necessary construction financing under current economic conditions, obtaining the required consents, amendments and waivers to its current defaults, completing the debt and equity restructuring with the receipt of all requisite approvals, and a return to profitable operations. The success of the negotiations on debt restructuring cannot be assured at this time. However, the Company estimates that any forced short-term liquidation of assets would result in a significant shortfall to both secured and unsecured lenders. Management believes that it is in the best interests of all parties concerned to continue the ongoing activities of both Divisions and to successfully conclude the business and debt restructuring that is underway. WASTEMASTERS INC: Results of Operations --------------------------------------- WasteMasters, Inc. is a non-hazardous solid waste services company that provides collection, transfer, disposal and recycling services. Revenues for the six months ended June 30, 1998 were $6,577,069 as compared to $223,856 for the six months ended June 30, 1997. This increase in revenues was the result of the acquisitions that have occurred during 1998. Net loss for the six months ended June 30, 1998 was $4,013,715 as compared to a net loss of $2,522,263 during the six months ended June 30, 1997. On August 10, 1998, the Company announced the appointment of Mr. Ron Antevy as Executive Vice President and Chief Operating Officer. Revenues for the quarter ended June 30, 1998 were $6,570,531 as compared to $62,558 for the quarter ended June 30, 1997. Net loss during the three months ended June 30, 1998 was $2,963,391 as compared with a net loss of $1,260,970 during the three months ended June 30, 1997. WEINTRAUB ENTERTAINMENT: Bear Stearns Liable in Bond Suit --------------------------------------------------------- Bear Stearns Cos. lost a class-action lawsuit that could require the firm to pay $126 million to investors who lost money on junk bonds of a company that eventually filed for bankruptcy. The federal court jury ruled Friday that Bear Stearns knowingly misrepresented critical facts when it sold investors $83 million in junk bonds from Weintraub Entertainment Group in 1987. The jury awarded three plaintiffs who launched the case a total of $7 million. In all, investors lost about $60 million and are entitled to $126 million with interest, said Michael Aguirre, an attorney for the plaintiffs. Bear Stearns' lawyer, Peter H. Benzian, said the firm planned to challenge the verdict. WESTMORELAND COAL: Equity Responds to Dismissal of Cases -------------------------------------------------------- The Official Committee of Equity Security Holders of Westmoreland Coal Company files this response in opposition to the debtors' joint Motion to Dismiss all Chapter 11 Cases. The Committee states that by seeking to dismiss these cases, the debtors seek to continue to operate their businesses, realizing market rates of return on assets and investments, while at the same time continuing to pay tens or hundreds of millions of dollars of future tax payments to the funds that would be avoided in a liquidation. As an alternative, the debtor's assets and operations could be liquidated free and clear of claims on a going-concern basis, with no disruption to ongoing operations. No loss in value or harm to present or former employees will result from a liquidation. The Committee states that liquidation hurts no one, pays all creditors their full allowable claims with interest, and would result in a substantial dividend to the more than 1700 public equity security holders. Dismissal could result in cannibalizing equity's present dividend for the purpose of paying taxes. Based upon the foregoing, the Equity Committee respectfully asks the court to deny the debtors' motion. WESTMORELAND COAL: Equity Taps Putnam, Hayes & Bartlett ------------------------------------------------------- The Official Committee of Equity Security holders of Westmoreland Coal Company files an application for order authorizing employment of Putnam, Hayes & Bartlett, Inc. as valuation experts to the Committee in this Chapter 11 case. The Committee desires to employ Putnam Hayes to assist the Committee in its analysis of the debtors' going-concern and liquidation values in connection with the confirmation of the Funds' Plan, the Motion to Convert and the Motion to Dismiss. WESTMORELAND COAL: Hearing Date Re-Set -------------------------------------- On motion of the UMWA Combined Benefit Fund, the UMWA 1992 Benefit Plan, the UMWA 1974 Pension Trust, and the Official Committee of Equity Security Holders for a continuance of the hearing to consider confirmation of the pending plan of reorganization, the hearing on the motion to dismiss the Chapter 11 cases, and the motion to convert the Chapter 11 cases to cases proceeding under Chapter 7 of the Bankruptcy Code, and being advised that the debtor does not oppose the continuance, the hearings currently set for August 25, 1998 are continued until October 14 and 15, 1998 at 9:00 AM. The deadlines to file objections are not extended. WINDSOR ENERGY: Difficult Times in Oil Pricing ---------------------------------------------- Windsor Energy Corporation has had a very difficult time in this oil pricing climate, where the price of oil has declined recently to a 12 year low. In addition to that, the Asian crisis has caused lower pricing in California due to shipments destined for Asia being dumped on the California market. Oil prices in California have dropped from 1997 prices of $19.59 to the $10 range in 1998. In addition to this, as mentioned in earlier reports, Windsor experienced significant downtime at its Rincon facility because of unusually bad weather in California due to "El Nino". The company deemed it prudent at times to shut the facility down. The facility also experienced several days without electrical power and without access to the island. At one time, all roads leading to the island were closed by the California State Highway Patrol. Due to these and other market factors, Windsor was unable to complete its refinance and recapitalization plans with Stanton Capital announced earlier in the year. Further to that, recent negotiations with two companies to sell part, or amalgamate certain Windsor's assets have fallen through. As a result of these events, and negative working capital of another subsidiary, Windsor has experienced severe cash flow strains, although management believes that its substantial assets remain intact. To address these cash flow and creditor problems and to protect shareholders' equity, Windsor has sought Chapter 11 bankruptcy protection for its Windsor Energy U.S. Corp subsidiary. This subsidiary owns: 1. The Rincon field in California which a Ryder Scott December 1997 Engineering Report shows has 18.1 million net BOE and a DCF 10 percent of $86.4 million. 2. 50 percent of the Bayou Choctaw, which an independent report shows as having 5.96 million net barrels and a DCF 10 percent of $42.8 million. 3. A 50 percent interest in the 9,000 acre Longhorn lease in East A back-in interest in the Bayou Carlin gas well just being completed. In summary, Windsor estimates that Windsor U.S. has proven reserves totaling approximately 24.06 million BOE and a DCF 10 percent of approximately $129.2 million with further probable reserves and additional prospects beyond that, and the debt in Windsor U.S. is approximately $26 million. This filing does not affect its subsidiary that owns the interest in Hermosa Beach which has, based on an independent report, 7.34 million BOE net proved reserves and a DCF 10 percent of $30.7 million, and its Pinnacle exploratory leases which management believes to have high potential upside. With this significant equity, the Company had no choice but to protect it in the face of one aggressive judgement creditor. With the protection of the Bankruptcy Code, Windsor will have time to restructure its Windsor U.S. subsidiary and come out of bankruptcy as a going concern. To this end, the Company continues to have discussions with interested parties as to how best to realize value for the shareholders of Windsor. This action should not stop the parent company, Windsor Energy Corporation, from carrying on business. The American Stock Exchange will maintain the current trading halt while they review the Company's ability to meet their continuing listing standards. Windsor will continue to actively look to strengthen its management and obtain a new President and CEO to replace, Thomas Rinehart, the interim CEO, who took over after the former President resigned in late June. The former President, Tom Hogan, has also recently resigned from the Board of Directors, as has David Chavenson. The company is in a difficult period, but the Board of Directors believes that, with new management, recapitalization or on other strategic alliances, sale of assets or mergers, significant value can be maintained and created for Windsor shareholders. The Board asks for the patience of shareholders during this difficult time in the industry and in this company's history. By agreement, CIBC Oppenheimer is no longer the exclusive adviser of the Company. This Chapter 11 filing will give the company the time to consider the best way to go forward for the long term interests of all concerned. (Canadian Corporate; 08/21/98) Meetings, Conferences and Seminars ---------------------------------- August 25-27, 1998 NEW YORK UNIVERSITY SCHOOL OF LAW NYU Workshop opn Bankruptcy and Business Reorganizations XXIV NYU School of Law, New York, New York Contact: 1-212-998-6415 September 9-13, 1998 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES Annual Convention Sheraton El Conquistador, Tuscon, Arizona Contact: 1-803-252-5646 September 17-20, 1998 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference The Inn at Loretta, Santa Fe, New Mexico Contact: 1-703-739-0800 September 17-20, 1998 COMMERCIAL LAW LEAGUE OF AMERICA Midwest Mid-Year Meeting Oak Brook Hills Resort & Hotel Oak Brook, Illinois Contact: 1-616-372-6500 September 21-23, 1998 STATES' ASSOCIATION OF BANKRUPTCY ATTORNEYS 7th Annual States' Taxation and Bankruptcy Conference Hotel Santa Fe, Santa Fe, New Mexico Contact: 1-505-827-0728 September 25-26, 1998 VIRGINIA CONTINUING LEGAL EDUCATION 13th Annual Mid-Atlantic Institute on Bankruptcy and Reorganization Practice Boar's Head Inn, Charlottesville, Virginia Contact: 1-800-979-8253 October 8-10, 1998 AMERICAN LEGAL INSTITUTE-AMERICAN BAR ASSOCIATION Real Estate Defaults, Workouts, and Reorganization Charleston, South Carolina Contact: 1-800-CLE-NEWS October 16-20, 1998 TURNAROUND MANAGEMENT ASSOCIATION 1998 Annual Conference The Westin Hotel, Chicago, Illinois Contact: 1-312-857-7734 October 22-25, 1998 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES 72nd Annual Meeting Wyndham Anatole Hotel, Dallas, Texas Contact: 1-803-957-6225 November 9-10, 1998 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Conference on Corporate Restructurings: Asia Indonesia * Thailand * South Korea The Radisson Empire Hotel, New York, New York Contact: 1-903-592-5169 or ram@ballistic.com November 30-December 1, 1998 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Distressed Investing '98 The Plaza Hotel, New York, New York Contact: 1-903-592-5169 or ram@ballistic.com December 3-5, 1998 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Westin La Paloma, Tuscon, Arizona Contact: 1-703-739-0800 February 18-21, 1999 COMMERICAL LAW LEAGUE OF AMERICA Annual Western District Meeting Monte Carlo Hotel & Casino Resort, Las Vegas, Nevada Contact: 1-702-382-9558 April 26-27, 1999 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Bankruptcy Sales, Mergers & Acquisitions The Mark Hopkins, San Francisco, California Contact: 1-903-592-5169 or ram@ballistic.com ********* 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. 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. ISSN 1520-9474. 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. 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