/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/981012.MBXT R O U B L E D C O M P A N Y R E P O R T E R Monday, October 12, 1998, Vol. 2, No. 199 Headlines AHERF: Allegheny General May Need Financial Partner AMERICAN RICE: Bondholder Stay Relief Bid In Limbo ATLAS CORPORATION: Agrees To Sale of Cornerstone Industrial BOSTON CHICKEN: Equity's Return Doubtful BOSTON CHICKEN: Dropping Name Boston Market BOSTON CHICKEN: Professionals and Court Data BRADLEE'S: Boosts Payments to Creditors BROTHERS GOURMET: Needs Time To Assume Or Reject Leases CHAMA: Four Medical Affiliates File Bankruptcy CRIIMI MAE: Bankruptcy Forced By Pressure From Creditors HAYES CORPORATION: Files Voluntary Chapter 11 Petition IMPAC MORTGAGE HOLDINGS: Delay in Dividend Payment INCOMNET: Subsidiary Receives $20 M Financing KENAR: Seeks Court Approval For Rejection of Leases KNOX COUNTY: Files Chapter 11 Bankruptcy Case LEVITZ FURNITURE: Seek Hearing Date of October 15 MOLTEN METAL: Status Report of Chapter 11 Trustee MONTGOMERY WARD: Posts $59M Loss For August NEWMONT MINING: Files Amendment to Registration Statement NORTH AMERICAN GAMING: Int'l Tours Reports Stock Ownership PATRIOT AVIATION: Files For Bankruptcy Protection PERK DEVELOPMENT: Seeks To Reject Leases R&S/STRAUSS: Seeks 120-Day Exclusivity Extension RAYTHEON: Cutting 14,000 Jobs SOUTHERN PACIFIC: Class Action Filed SOUTHERN PACIFIC: Lays Off 2/3 of Workers SUNBELT NURSERY: Hearing on Disclosure Statement THE PHARMACY FUND: 80 Independents Object To Order ********* AHERF: Allegheny General May Need Financial Partner --------------------------------------------------- Rocked by its parent foundation's bankruptcy and weakened by its own financial losses, it seems less and less likely that Allegheny General Hospital will be able to stand on its own. That has created rampant speculation about what white knights might be available should the North Side hospital need a financial partner. Along with the obvious possibility of a for-profit buyer, such as Tenet Healthcare Corp., the speculation about who might come to its rescue centers on two of the region's giants, UPMC Health System and Highmark Blue Cross and Blue Shield. Foremost among the hospital's problems is the AHERF bankruptcy. Creditors, angered that they're likely to get only pennies on the dollar for what the foundation's Philadelphia hospitals owe them, may try to maneuver AGH into bankruptcy, too, so they can access the hospital's assets. Declining government reimbursements, heightened managed care competition and increased support for its parent foundation's ill-fated Philadelphia expansion have drained its resources, transforming an operation that used to annually pump out huge profits into one that's wallowing in red ink. In the last five years alone, Allegheny General's operating profits - income before investment earnings on endowments and other reserves - have disappeared. Operating income stood at $7.5 million in 1993; by 1995, it has lost more than $13 million on operations, and in 1996, the figure ballooned to $20.7 million. According to unaudited financial statements filed with the U.S. Bankruptcy Court, the hospital posted operating losses of $34 million in the first 11 months of fiscal 1998, which ended in June. A combination between Allegheny General and UPMC almost certainly would draw antitrust scrutiny. However, it's debatable just how hard the Federal Trade Commission would review such a transaction. The agency has a checkered history at intervening in hospital mergers, though it recently scored a victory in a case involving two hospital chains that would have given the merged operations a 78 percent share of the hospital bed market in a St. Louis suburb. On the one hand, the FTC may be sympathetic to an Allegheny General-UPMC merger because of the deteriorating financial condition of AGH. "The fact that AHERF is limping along will clearly be a favorable factor that may tip balance in favor of antitrust clearance," said Mark Horoschak, an antitrust attorney at Womble Carlyle Sandridge & Rice in Charlotte, N.C., and a former FTC official. The state Attorney General's office, which continues to investigate the activities of AGH's parent, would also closely monitor any merger involving Allegheny General and a local competitor. "The attorney general has consistently stressed that competition is important in the health-care field to ensure reasonable costs for consumers and businesses," said spokesman Sean Connolly. (Pittsburgh Post Gazette - 10/08/98) AMERICAN RICE: Bondholder Stay Relief Bid In Limbo -------------------------------------------------- American Rice Inc. and U.S. Trust Co. of Texas N.A., the indenture trustee for the company's 13% first mortgage notes due 2002, are in talks in an effort to reach agreement on adequate protection for the bondholders. Pending the outcome of the talks, the indenture trustee's motion for automatic stay relief or adequate protection payments is in abeyance. U.S. Trust, which accelerated the notes in June, had asked the court to lift the stay to permit collateral foreclosure or order American Rice to make "substantial" monthly payments. Collateral for the $100 million note issue includes most of the company's plant, equipment, and machinery, as well as parent Erly Industries Inc.'s 81% American Rice stake. Erly recently filed for bankruptcy to block foreclosure on its American Rice stock. (Federal Filings Inc. 08-Oct-98) ATLAS CORPORATION: Agrees To Sale of Cornerstone Industrial ----------------------------------------------------------- Atlas Corporation (OTC Bulletin Board: ATSP) announced that on October 2, 1998, the company executed a Deposit Agreement with Seven Peaks Mining, Inc. for the sale of its entire interest in Cornerstone Industrial Minerals Corporation. Also on October 2, Atlas filed a motion requesting approval of the Deposit Agreement with the Bankruptcy Court handling Atlas' Chapter 11 reorganization. Within ten days after approval of the Court and on the satisfaction of certain other conditions, Seven Peaks has agreed to make a cash tender offer for 100% of the outstanding Cornerstone shares at a price of C$0.12. Under the terms of the Deposit Agreement, Atlas has irrevocably agreed to deposit its 18,352,991 shares of Cornerstone (being 61%) to the Seven Peaks Offer. This transaction has been arranged by Monarch Financial Corporation. The total purchase price being paid by Seven Peaks is $4 million. Proceeds to Atlas are comprised of the share offer and satisfaction of debt owed Atlas by Cornerstone. Provided the cash tender offer is first approved and then is successful, Atlas will receive approximately $3 million comprised of $1.4 million for its shares and $1.6 million in satisfaction of the debt. In a separate agreement executed between Atlas and Seven Peaks on September 22, 1998, Atlas pledged its 61% ownership of Cornerstone against interim financing in the amount of $750,000. The Court approved $250,000 for disbursement to Atlas on September 25, 1998 and a hearing is set for October 14, 1998 for approval of the remaining $500, 000. On closing of the Deposit Agreement described above, the $750,000 plus interest will be deducted from the proceeds due Atlas. BOSTON CHICKEN: Equity's Return Doubtful ---------------------------------------- Boston Chicken Inc. investors who were betting on a turnaround play probably ought to start counting their tax- deductible losses. Company officials warn of "significant dilution." But bond analysts say stockholders will be lucky to recoup enough cash to buy a chicken dinner. "It's a mathematical certainty equity holders won't get anything," Blake Carter, a bond analyst with Austin, Texas- based Tejas Securities Inc., said Monday. Boston Chicken must renegotiate $315 million in senior secured debt owed to companies such as General Electric Capital Corp. Much of this debt is secured by the equipment used to roast chickens, so senior debt holders have the strongest negotiating position. Then come the bond investors, or subordinated debt holders, who are owed more than $600 million. Boston Chicken is negotiating with bondholders, hoping they will forgive debts in exchange for a new class of stock in the company. "The big question is, how much of the new, restructured equity do subordinated bondholders get?" Carter said. Bondholders, as well as Boston Chicken's senior creditors, may be willing to forgive debt in exchange for stock because they have no options, Carter said. But there won't be enough stock to go around because Boston Chicken's assets are probably worth less than $300 million, which is not enough to repay its senior debtors, let alone bondholders. Consequently, Carter sees no hope for owners of Boston Chicken stock and is concerned about the amount subordinated debt holders will receive. Boston Chicken spokeswoman Karen Rugen was still holding out hope that shareholders' investments would still have some value, even as the stock tumbled to 50 cents a share on Monday. "We anticipate significant dilution of the equity," she said. "While the bondholder group is in general support of a plan to exchange subordinated debt for equity, we are still in negotiations. The exact structure of the plan, and its effect on the stock, will be determined when the plan is approved by the bankruptcy court." If Boston Chicken does emerge from bankruptcy as planned, it will have reduced its debt from roughly $900 million to $300 million. At that point, the company will have a good chance of moving forward. But Carter predicts existing shareholders won't participate in any turnaround that follows the bankruptcy court restructuring. "Existing shareholders will be wiped out by order of the bankruptcy judge," he said.(Rocky Mountain News - 10/06/98) BOSTON CHICKEN: Dropping Name Boston Market ------------------------------------------- The Golden-based Boston Chicken company plans to return to its origins, and will propose to a bankruptcy court that the name Boston Market be dropped. The restaurant chain known as Boston Chicken on Monday filed for Chapter 11 bankruptcy protection and closed 178 of its stores that operate under the Boston Market name. Michael Jenkins, the company chairman, told Nation's Restaurant News Thursday the company will propose the name change as well as plans to return to "a traditional franchise system where they pay us and not the other way around where we are paying them." The company, which went public five years ago and saw its shares reach prices as high as $50, filed for protection because of about $283 million in debt that comes due Oct. 17. Boston Chicken stock had plummeted, trading as low as 50 cents per share. Some analysts said the Golden-based company had expanded too quickly and lost focus. Between May 1992 and this year, Boston Chicken grew from 34 stores in the Northeast to 1,143 nationwide. Sales jumped from about $21 million in December 1991 to nearly $1.2 billion in 1996. Along the way, meatloaf and ham were added to the chicken and mashed potatoes on the menu. The company also invested in a bagel chain. Under its old format, the company funded rapid franchisee expansion through convertible loans, building a massive debt problem. Jenkins said the change back to Boston Chicken would recognize "what we are all about." The focus for the remaining restaurants will be chicken, turkey and appropriate side dishes, he said. BOSTON CHICKEN: Professionals and Court Data -------------------------------------------- Petition Date: October 5, 1998 Court: United States Bankruptcy Court District of Arizona 2929 N. Central Ave., 9th Floor PO Box 34151 Phoenix, AZ 85067-4151 (602) 640-5800 Judge: The Honorable Charles G. Case Circuit: Ninth Debtor's Counsel: H. Rey Stroube, III, Esq. Akin, Gump, Strauss, Hauer & Feld, LLP Pennzoil Place-South Tower 711 Louisiana Street, Suite 1900 Houston, Texas 77002 (713) 220-5800 U.S. Trustee: Richard Cuellar, Esq. United States Trustee - Region XIV 2929 N. Central Ave., Room 700 Phoenix, AZ 85012 (602) 640-2100 BRADLEE'S: Boosts Payments to Creditors --------------------------------------- Bradlees Inc. increased the amount that it will pay creditors in its bankruptcy reorganization plan because the retailer's financial condition has improved. Last month Bradlees said it would lose $18.2 million in the fiscal year ending Jan. 30, less than its prior forecast of a $27.5 million loss. Bradlees also said full-year sales at stores open at least a year would rise 6.3 percent, better than its previous estimate of 3.5 percent. Bradlees sought protection from creditors under Chapter 11 of the federal bankruptcy code in June 1995 after suppliers refused to ship products. Since then, Bradlees closed more than 30 stores, cut $100 million in operating costs and revised its merchandise and marketing. The company now has 103 stores. The plan increases the value of new shares to be given to creditors, from $70 million to $85 million. It also increases available cash to $30.9 million from $25.6 million. Also, Bradlees bondholders, and some trade creditors and landlords, will get warrants for 1 million new Bradlees shares with an exercise price of $7. The original plan provided warrants for 500,000 new Bradlees shares. Holders of existing Bradlees stock get nothing in both plans. Unsecured creditors will get cash and stock totaling valued at $48.7 million. They're owed $253 million. (Patriot Ledger Quincy - 10/06/98) BROTHERS GOURMET: Needs Time To Assume Or Reject Leases ------------------------------------------------------- Brothers Gourmet Coffees, Inc., et al. seek to extend the period to assume or reject unexpired leases of nonresidential real property. A hearing to consider the relief requested will be held on October 27, 1998 at 9:30 am before the Honorable Mary F. Walrath. As of the petition date, the debtors were party to over 25 unexpired leases of nonresidential real property. The unexpired leases include lease agreements with respect to building and office space, warehouse space, retail space, and storage space. Brothers is seeking to preserve flexibility for structuring a sale of its assets or investments in its business, and it is impractical and unreasonable according to the debtors to determine whether to accept or reject the leases at this point in time. The debtors propose that the deadline for assuming or rejecting the unexpired leases be extended for an additional 120 days from the current deadline. In a separate motion the debtors seek court approval to reject two leases covering property in New York City. The debtor has discontinued operation at both locations. CHAMA: Four Medical Affiliates File Bankruptcy ---------------------------------------------- Medical provider affiliates Chama Inc., DHI Inc., Colusa Community Hospital Association, Callaway Community Hospital Association, and Medical Center of Winnie Inc., Tuesday filed separate Chapter 11 petitions. Colusa Community, a hospital located in Colusa, Calif., Fulton, Mo.-based Callaway Community, and Medical Center of Winnie, Texas, are members of Community Health Systems, a Brentwood, Tenn., hospital and physician system. The five petitions estimate both assets and liabilities for each entity to be between $1 million and $50 million. (Federal Filings Inc. 08-Oct-98) CRIIMI MAE: Bankruptcy Forced By Pressure From Creditors -------------------------------------------------------- Criimi Mae Inc., a Rockville-based real estate investment trust, has filed for Chapter 11 bankruptcy protection from its creditors. The filing was forced by pressure from creditors regarding its exposure on commercial-mortgage- backed securities. Criimi Mae has $2.7 billion invested in mortgages on office buildings, shopping centers and apartment complexes, making it the nation's largest player in real estate capital markets. It ran into trouble because it pledged the mortgages as collateral for loans. Although those mortgages are still being paid, their value has plummeted since investors began bailing out of all risky loans and moving their money into U.S. Treasury bonds in the summer. (The Baltimore Sun Company 07-Oct-98)) HAYES CORPORATION: Files Voluntary Chapter 11 Petition ------------------------------------------------------ Hayes Corporation (Nasdaq: HAYZ) and certain of its domestic subsidiaries today announced that they have filed voluntary petitions to reorganize under Chapter 11 of the Bankruptcy Code for the second time in five years. Under Chapter 11, Hayes Corporation and the subsidiaries will continue to operate their businesses under Court protection from creditors, while seeking to work out a Plan of Reorganization. The petition was filed in the U.S. Bankruptcy Court for the District of Delaware. The Company also reported that it has secured interim debtor-in-possession (DIP) financing for the immediate use by the Company to continue operations, pay employees, and purchase goods and services going forward, while it is negotiating to secure permanent financing. Ron Howard, Hayes Corporation Vice Chairman and CEO, stated, "We made the decision to seek the protection of the Bankruptcy Court in the belief that this action would provide the most viable means of achieving our key goals of refocusing our business strategy and operations. The Chapter 11 filing will allow the Company to develop a workable reorganization plan, enhance our ability to meet the needs of our marketplace and serve our customers, and permit us to continue with the development of exciting and promising technologies." Mr. Howard added that during the reorganization period, Hayes Corporation would continue to focus on previously announced strategic initiatives, including: -- Resizing the Company's operations to achieve profitability at a sales level sustainable under current market conditions. -- Focusing its resources on expanding Hayes' technology and market position within the broadband, RAS and Voice- over-IP markets. -- Continuing to fully support customers of its analog modem business. IMPAC MORTGAGE HOLDINGS: Delay in Dividend Payment -------------------------------------------------- Impac Mortgage Holdings Inc. announced a delay of the payment date of its previously announced third quarter 1998 dividend to January 6, 1999. The Board of Directors reserves the right to accelerate that payment date in its sole discretion. The amount of the dividend ($.49 per share) and the record date for receipt of the dividend (October 9, 1998) are not affected by the delay. As a result of the payment delay, the Company will pay interest, at a rate of 4% per annum, on the amount due calculated from the previously announced payment date (October 26, 1998) through the date of actual payment. The interest may be paid in the form of cash or shares of the Company's common stock. Joseph R. Tomkinson, Chief Executive Officer of IMH stated: "Due to the turmoil in the securitization markets and the tightening of pricing on whole loan sales, we feel compelled to take positive steps to improve profitability and liquidity. "We have no intention to go out of business or declare bankruptcy," stated Tomkinson. "We believe that the stock market is adversely reacting to the financial sectors in general and to mortgage companies in particular in part due to the bankruptcy announcements of other substantial lenders. The Company announced that it expects to record a loss for its third quarter ended September 30, 1998, projected earnings for the fourth quarter of 1998 will be lower than previously expected and that it will pay no further dividend for 1998 other than the previously announced third quarter 1998 dividend. Third quarter 1998 results will be impaired by a number of market factors, including the recent decline in the market price of Impac Commercial Holdings Inc. ("ICH") common stock. Based on the closing sales price of ICH on October 7, 1998 and prevailing conditions in the secondary market, the Company expects to record charges to earnings that will result in a net loss between approximately $17.2 million to $22.9 million or approximately $0.70 to $0.93 per share of common stock on a diluted basis for the third quarter of 1998. The Company announced that its Board of Directors has adopted a Stockholder Rights Plan in which Preferred Stock Purchase Rights will be distributed as a dividend at the rate of one Right for each outstanding share of common stock. Monday after competitor Maryland-based Criimi Mae Inc. filed to reorganize under Chapter 11 bankruptcy protection shares of Impac Commercial Holdings fell 40 percent, to $6.34, while Impac Mortgage fell 22 percent, to $8.75. The Company is a mortgage loan investment company that invests primarily in non- conforming, high-yielding mortgages which, together with its subsidiaries and related companies, operates three businesses. INCOMNET: Subsidiary Receives $20 M Financing --------------------------------------------- Incomnet Inc. (Nasdaq:ICNT) Thursday announced that its subsidiary, National Telephone & Communications Inc. (NTC), received a commitment letter from a financial institution to provide a line of credit of up to $20 million, subject to further due diligence and loan documentation acceptable to the lender. Availability under the line of credit will depend on a number of factors. In addition, Incomnet received a commitment letter from a venture capital firm to provide a $10 million mezzanine financing involving the issuance of Incomnet preferred stock and subordinated debt. This financing is subject to a number of conditions, including final documentation acceptable to the venture capital firm and the concurrent closing of the NTC line of credit financing. No assurances can be given that the NTC line of credit financing and the Incomnet mezzanine financing will be completed. As previously announced, NTC is in default under certain obligations owing to NTC's secured creditors, WorldCom Network Services (WorldCom) and First Bank & Trust of Newport Beach (First Bank). WorldCom and First Bank have agreed to forbear from taking any action against NTC under such defaults until Oct. 30, 1998, if certain conditions are met. The receipt of the commitment letters to provide the NTC line of credit financing and the Incomnet mezzanine financing were conditions to the continued forbearance of WorldCom and First Bank. Incomnet provides cost-saving products in the telecommunications and software industries. Incomnet's subsidiary, National Telephone & Communications, is a reseller of long distance and other communications products to residential and small business customers through its independent sales representatives using a network marketing strategy. KENAR: Seeks Court Approval For Rejection of Leases --------------------------------------------------- Z. Frederick Enterprises Ltd. and Kenar Enterprises, Ltd., seek an order authorizing the rejection of certain non- residential real property leases for property located in Dallas, Texas (showroom), Totowa, New Jersey (warehouse), Atlanta, Georgia (showroom) and two billboards in New York City. A hearing will be held on October 28, 1998. The debtors do not anticipate continuing any of their business operations past the end of this year. They believe that there is no residual value in assuming the leases, and Kenar has vacated both showroom premises. KNOX COUNTY: Files Chapter 11 Bankruptcy Case --------------------------------------------- Knox County Partnership, Ltd., formerly known as Phillips Partners, Ltd., filed its chapter 11 bankruptcy case in the Northern District of Texas. The petition was filed on behalf of Knox by its counsel Simon, Warner & Doby, L.L.P., of Fort Worth, Texas. Daniel T. Phillips, is a limited partner of Knox County Partnership. Mr. Phillips, Chairman and CEO of FIRSTPLUS Financial Group, Inc., (NYSE: FP) did not personally file bankruptcy. A portion of Knox's FIRSTPLUS stock was pledged as collateral to secure an obligation to Merrill Lynch International Private Finance Ltd., an affiliate of Merrill Lynch Pierce, Fenner & Smith Incorporated, and a further portion of the stock was pledged as collateral to secure an obligation to NationsBank, N.A. On Tuesday, October 6, 1998, the Bankruptcy Court heard on an emergency basis motions filed by Merrill Lynch IPF and NationsBank to lift the automatic stay. If these motions had been granted, Merrill Lynch IPF and NationsBank would have been authorized to foreclose on the FIRSTPLUS stock that Knox had pledged as collateral to them. At this hearing, Knox offered confidential inside information regarding FIRSTPLUS as evidence, which included the testimony of Eric Green, the President of FIRSTPLUS. LEVITZ FURNITURE: Seek Hearing Date of October 15 ------------------------------------------------- The debtors, Levitz Furniture Incorporated, et al., are seeking a hearing date of October 15, 1998 for the sale to Genext Capital, L.L.C of their fee ownership interests in real property located in: (a) Fort Myers, Florida; (b) Tampa, Florida; (c) Hazelwood, Missouri; (d) Lakewood, Colorado; (e) Colorado Springs, Colorado; and (f) San Marcos, California, and (2) assume and assign their leasehold interests in property located in: (a) San Diego, California; and (b) College Park, Georgia; to Genext for approximately $26,500,000 in cash. The debtors expect to conclude their going-out of business sales on or before November 30, 1998 and hope to consummate the sale of the property soon thereafter. To assure that the Debtors are obtaining the highest and best price for these assets, the Debtors will subject Genext's offer to a competitive bidding process. That process contemplates an auction on November 11, 1998, requiring a $900,000 minimum overbid and payment of a $795,000 break-up fee in the event Genext's bid is topped by a third-party offeror. MOLTEN METAL: Status Report of Chapter 11 Trustee ------------------------------------------------- Stephen S. Gray, the Chapter 11 Trustee of Molten Metal Technology and its affiliated debtor submits a status report stating that the Trustee has, during his short tenure, developed a plan for an orderly sale of the assets of the debtor. The Trustee expects that to the extent the sales are pursued, a competitive bidding process will occur and the price received for the assets could be between 33% and 50% higher. The Trustee has received four offers for the purchase of the Wet Waste facility. The Trustee has had various discussions regarding the purchase of the Q-CEP facility and is continuing to actively pursue this matter. The debtors obtained an option agreement by which the estates may recover as much as $2.7 million plus royalty payments of $1 million per for 15 years. The Trustee believes that there exist other assets including the intellectual property of the debtors, which may also generate a return for the creditors of the estates. The trustee reports a total of $8,329,000 in post-petition payables against the estates. The cost of closing facilities is estimated at between $10 million and $14 million. MONTGOMERY WARD: Posts $59M Loss For August ------------------------------------------- Montgomery Ward & Co. posted a net loss of about $59 million on sales of $317 million for the month ended Sept. 5. The retailer's gross margin and reorganization costs totaled $50 million and $5 million, respectively, in fiscal August. The latest figures compare with a $63 million loss on sales of $254 million for the month ended Aug. 1. Gross margin and reorganization costs totaled $33 million and $9 million, respectively, in fiscal July. (The Daily Bankruptcy Review and ABI 09-Oct-98) NEWMONT MINING: Files Amendment to Registration Statement --------------------------------------------------------- Newmont Mining Corporation filed a first amendment to the Registration Statement. A full-text copy of the filing is available via the Internet at: http://www.sec.gov/Archives/edgar/data/0000950130-98- 004909.txt The Merger was effective at 5:00 p.m. (EDT) on Wednesday, October 7, 1998 as provided in the certificate of ownership and merger relating thereto that was filed with the Delaware Secretary of State. Immediately prior to the Merger, Newmont Mining contributed to Acquisition Co. all of the shares of Newmont Gold Common Stock owned by Newmont Mining. At the Effective Time, Acquisition Co. merged with and into Newmont Gold. Newmont Gold was the surviving corporation of the Merger and became a wholly- owned subsidiary of Newmont Mining. In the Merger each outstanding share of Newmont Gold Common Stock was converted into the right to receive 1.025 shares of Newmont Mining Common Stock. Pursuant to the Newmont Mining Rights Agreement, each share of Newmont Mining Common Stock issued to the Newmont Gold stockholders pursuant to the Merger will be accompanied by one Newmont Mining Share Purchase Right. Because Acquisition Co. owned more than 90% of the outstanding shares of Newmont Gold Common Stock prior to the Merger, the stockholders of Newmont Gold were not entitled to vote on the Merger. NORTH AMERICAN GAMING: Int'l Tours Reports Stock Ownership ---------------------------------------------------------- International Tours Inc. reports beneficial ownership of 17,386,960 shares of common stock, or 41.6% of the classs of North American Gaming and Entertainment Corp. I.T. Financial Corporation, Ronald D. Blaylock, Hawes Partners, and Edwin Hugh Hawes II each report beneficial ownership of 17,579,286 shares of common stock, representing 42.1% of the class. A.Keith Weber reports beneficial ownership of 17,673,015 shares of common stock, representing 42.3% of the class. Effective September 18, 1998, International Tours converted the remaining 3,096,000 shares of Series B Preferred Stock into 3,096,000 shares of Common Stock and 5,452,854 shares of Common Stock were issued to International Tours by the Issuer pursuant to a contractual anti-dilution right held by International Tours which was triggered upon the conversion by the Issuer of 1,287,000 shares of Class A Preferred Stock of the Issuer into 8,240,000 shares of Common Stock. PATRIOT AVIATION: Files For Bankruptcy Protection ------------------------------------------------- Patriot Aviation Services, locked out of its offices at Roswell Industrial Air Center after missing lease payments, has filed for Chapter 11 bankruptcy. The city evicted the firm Friday after it failed to make its September lease payment. Patriot declared Chapter 11 on Monday, the federal bankruptcy court in Albuquerque confirmed. Chapter 11 frees a company from the threat of creditors' suits while it reorganizes its finances. A majority of creditors then must accept the plan. Patriot officials requested a Monday meeting with city representatives, but Mayor Bill Owen told a later special council session that it presented no plan. Frank Miller, the company's new vice president and general manager, simply asked the council to allow the company back into the facilities. "We would certainly like to work something out beneficial to all concerned parties," said Miller, who was supported by about 50 company workers who attended the meeting. The council adjourned without action after telling Miller the city had been advised of pending litigation. "Unfortunately there's nothing I can say other than to say that that's the situation," Owen said. (Albuquerque Journal - 10/07/98) PERK DEVELOPMENT: Seeks To Reject Leases ---------------------------------------- Perk Development Corporation and Brambury Associates seek to reject four leases of nonresidential real property. Brambury either owns or leases the real property of the debtors' 41 Perkins Family restaurant locations. The New York leases are located in Newburgh, Vails Gate, Oswego and Watertown. In each of the four locations, the rent exceeds the operating revenues, thus the debtors believe it is in their best business judgment to reject the leases. R&S/STRAUSS: Seeks 120-Day Exclusivity Extension ------------------------------------------------ Trumpeting the "great strides" toward stabilization and reorganization R&S/Strauss Inc. has made since filing for bankruptcy, the company is requesting a 120-day extension of its exclusive periods to file a reorganization plan and solicit plan acceptances. Among other things, the auto parts retailer said it has established a comprehensive data room to allow third parties that have expressed interest in the business to conduct due diligence. R&S also noted in its motion that it has explored various alternatives for stabilizing and reorganizing its business, both before and since the June 9 petition date. (Federal Filings Inc. 08- Oct-98) RAYTHEON: Cutting 14,000 Jobs ----------------------------- Defense contractor Raytheon Co. yesterday said it is slashing 16 percent of its work force, or about 14,000 jobs, over two years in an effort to cut costs. Raytheon had earlier estimated that it would cut 8,700 positions. (Newsday; 10/08/98) SOUTHERN PACIFIC: Class Action Filed ------------------------------------ A lawsuit has been filed in the U.S. District Court for the Eastern District of New York against certain officers and directors of Southern Pacific Funding Corp. (NYSE: SFC) on behalf of purchasers of the company's common stock between January 29, 1998 and September 16, 1998 by the law firm of Weiss & Yourman to recover damages caused by defendants' violations of the Securities Exchange Act of 1934. The complaint alleges that defendants engaged in a plan and scheme to tout the business prospects and financial conditions of SFC by, inter alia, making baseless, false and misleading statements concerning the Company's ability to continue its historic growth pattern through an allegedly new "strategic plan" despite the problems plaguing the subprime lending market. Defendants misrepresented that, because of the quality of SFC's loans, and their continuing ability to effectively manage the Company through the industry's problems, the Company's earnings and growth would not be affected by decreases in interest rates, accelerated prepayment rates, and a flat yield curve. Defendants' scheme was designed to, and did, artificially inflate, maintain and otherwise manipulate the value of SFC common stock. Specifically, defendants representations drove SFC's stock price from $12-1/4 at the beginning of the Class Period to a Class Period high of $18. When the truth was ultimately revealed -- that SFC was in fact devastatingly impacted by the subprime lending industry's problems because of the Company's dependence on the loan securitization process, its excessive reliance on Adjustable Rate Mortgages, the poor quality of its loan portfolio, and its inability to secure alternative financing to continue the Company as a viable entity -- the price of SFC stock plummeted to a new low of $2 on the date defendants confirmed the Company's problems. Plaintiffs and the Class have been damaged by defendants' fraudulent scheme. SOUTHERN PACIFIC: Lays Off 2/3 of Workers ------------------------------------------------- Southern Pacific Corp. laid off nearly two-thirds of its employees this week, but will pay $1.3 million in bonuses to keep other workers, according to The Oregonian. On Wednesday the bankruptcy court approved these actions for the national mortgage finance company. Southern Pacific will continue servicing about 32,000 files involving $1.8 billion in loans from its Santa Rosa office. Southern Pacific filed chapter 11 on October 1. (ABI 09-Oct-98) SUNBELT NURSERY: Hearing on Disclosure Statement ------------------------------------------------ Sunbelt Nursery Group, Inc. filed a notice that on November 13, 1998 at 2:30 pm befgor4e the Honorable Robert Alberts, a hearing will be herd to determine the adequacy of the operating debtors' original disclosure statement describing the original Chapter 11 Liquidating Plan. Any objection to the adequafcy of the Disclosure Statement must be filed with the Bankruptcy Court no later than November 2, 1998. THE PHARMACY FUND: 80 Independents Object To Order -------------------------------------------------- Independent Pharmacy Alliance, Covered Bridge Pharmacy and Bergman Pharmacy creditors of the debtor The Pharmacy Fund, Inc. and Pharmacy Fund Receivables, Inc., debtor, object to the proposed Consent Order authorizing all third party payors who can not split payment cycles to turn over monies to the debtors. The creditors allege that in September, 1998, the debtors refused to purchase or to turn over monies due the pharmacies, in material breach of their contracts. The debtors continued to require third party payors to remit all proceeds of accounts receivable to the pharmacies. The prepetition and postpetition actions of the debtors have placed the pharmacies in a dire emergency. The Office of the US Trustee appointed an Official Committee of Unsecured Creditors. The creditors submitting this objection are concerned that the proceeds from postpetition accounts receivables will be delayed for some lengthy period of time if the debtors receive same. "It is clear from its confusion that the debtors are unable to reconcile these differences in a timely fashion and to make payments of the proceeds of postpetition accounts receivable to the various pharmacies." ********* 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. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *