/raid1/www/Hosts/bankrupt/TCR_Public/981014.MBX
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, October 14, 1998, Vol. 2, No. 201
Headlines
ALLIANCE ENTERTAINMENT: Hearing on Disclosure Statement
AMERICAN RICE: Applies To Employ Jay Alix
ARCON HEALTHCARE: May Be Ready To Close
BROOKE GROUP: Stock Ownership Reported
CAMPO ELECTRONICS: President and CEO Wulfers Resigns
CENDANT CORP: McLeod Resigns As Vice Chair and Director
CITYSCAPE FINANCIAL: Disclosure Statement Hearing
CITYSCAPE FINANCIAL: Last Day For Filing Proofs of Claim
CITYSCAPE FINANCIAL: Meeting of Creditors
CONSUMER PORTFOLIO: Beneficial Ownership of Stock Reported
DECORATIVE HOME: Decides To Dump Assets
EQUALNET CORP: Committee of Unsecured Creditors Appointed
EQUITEX INC: Stock Ownership Reported
HAYES ASIA: Says Business As Usual Despite US Filing
HOSPITAL STAFFING SERVICES: Applies To Employ Accountant
HUGHES ELECTRONICS: 20% Drop in Quarterly Earnings
KIA MOTORS: Ford, Three Korean Carmakers Vie For Kia
KOO KOO ROO: Encouraging Votes For Merger
MICROELECTRONIC PACKAGING: Agreements With Creditors
MITA INDUSTRIAL: Former President and Five Others Arrested
PARAGON TRADE: Stock Ownership Reported
PITTSBURGH PENGUINS: Expected To File This Week
SAM WHITE MOTOR: Houston Car Dealership Files Chapter 11
SANYO SHINPAN: S&P Lowers Rating to Negative
SNAKE EYES: Disclosure Statement Conditionally Approved
SOUTHEAST ARIZONA MEDICAL: Files For Bankruptcy Protection
TOSHOKU LTD: Cargill Comes To Rescue
*********
ALLIANCE ENTERTAINMENT: Hearing on Disclosure Statement
-------------------------------------------------------
A hearing will be held before the Honorable Burton R.
Lifland, United States Bankruptcy Judge, at the U.S.
Bankruptcy Court Alexander Hamilton United States Custom
House, One Bowling Green, New York, New York 10004-1408 in
Room 623, on November 4, 1998 at 10:00 am.
Objections to the Disclosure Statement must be received by
on or before October 28, 1998.
AMERICAN RICE: Applies To Employ Jay Alix
-----------------------------------------
American Rice, Inc., debtor, is seeking court approval of
its application to employ Jay Alix & Associates as crisis
manager and bankruptcy consultants. As a part of the
retention of the firm the debtor requests that Ted Stenger,
a principal in the firm assume the role of Chief Operating
Officer of the debtor. The firm and Mr. Stenger will
manage the debtor's daily operations and restructuring
efforts, will develop a plan of reorganization and provide
reporting and testimony to the Bankruptcy Court. The firm
requests a fee of $460 per hour for Stenger, capped at
$90,000 per month, subject to certain conditions. Other firm
members will be paid from $175 per hour to $490 per hour.
The debtor requests permission to pay the firm on a monthly basis.
ARCON HEALTHCARE: May Be Ready To Close
---------------------------------------
Nashville-based Arcon Healthcare, a rural-clinic chain
founded in 1995 by a former HealthTrust executive, appears
poised to shut down after failing to show up at a
U.S. Bankruptcy Court meeting. Arcon attorney Wallace Dietz
had said the company owed landlords about $50 million and
had attracted another $50 million in equity from investors.
It's unclear whether any investors will get money back.
Dietz informed Assistant U.S. Trustee Beth Derrick that the
company had decided not to reorganize under Chapter 11 of
the Bankruptcy Act. The company determined that it is
impossible for the debtors in these cases to reorganize
under Chapter 11. Derrick, whose office supervises the
administration of bankruptcy cases in Nashville, said
Dietz told her the company had been unable to get enough
additional financing to carry a reorganization through.
Last month, Arcon filed for bankruptcy protection from
creditors while it sought to reorganize. At the time,
current and former Arcon executives and Dietz attributed
its problems to lease contracts that were too expensive and
an overly optimistic business growth plan.
A plan to renegotiate leases with real-estate investment
trusts Capstone Capital Corp., based in Birmingham, Ala.,
and Santa Barbara, Calif.-based Nationwide Health
Properties, apparently failed.
The REITs built the clinics for Arcon, which leased them
back. Arcon already has closed four of its nine clinics,
said Jim Perkins, who last week became administrator of its
Soddy-Daisy, Tenn., facility after the clinic he managed in
Heflin, Ala., closed. Aside from Soddy-Daisy, a clinic in
Destin, Fla., remained open yesterday. (Tennessean;
10/10/98)
BROOKE GROUP: Stock Ownership Reported
--------------------------------------
High River Limited Partnership, Riverdale LLC and Carl C.
Icahn report beneficial ownership of 1,574,100 shares of
common stock of Brooke Group Ltd., representing 7.7% of the
class. The aggregate purchase price of the 244,000 Shares
purchased by the Registrants not previously reported to
the SEC was $1,236,891.95 (including commissions).
CAMPO ELECTRONICS: President and CEO Wulfers Resigns
----------------------------------------------------
President, CEO and board member, William E. Wulfers has
resigned his positions with the Company. He will be
replaced as president and CEO by Malcolm G. Ballinger. With
Mr. Wulfers departure, the Company's board has been reduced
to seven members, where it will remain, as Mr. Wulfers will
not be replaced.
CENDANT CORP: McLeod Resigns As Vice Chair and Director
-------------------------------------------------------
Christopher K. McLeod resigned as Vice Chairman and a
director effective immediately, further reducing the number
of Cendant directors who had once been directors of CUC
International Inc. The board now has 17 members. Cendant
expects McLeod to remain chief executive officer of the
company's software unit until that unit is sold or an
initial public offering early next year.
Cendant previously hired Credit Suisse First Boston Corp.
to explore strategic alternatives for the unit. (The Wall
Street Journal 13-Oct-98)
CITYSCAPE FINANCIAL: Disclosure Statement Hearing
-------------------------------------------------
In The Wall Street Journal of October 13, 1998, Cityscape
Financial Corp. and Cityscape Corp., debtors
filed a notice of hearing to consider confirmation of the
plan. The hearing will be held on November 13, 1998 at
9:30 am before the Honorable Adlai S. Hardin, Jr., US
Bankruptcy Court for the Southern District of New York, 300
Quarropas Street, 2nd Floor, White Plains, NY. Any
objections must be received before November 9, 1998.
Together with filing its petition in chapter 11, the
debtors simultaneously filed a Plan of Reorganization.
Beginning on August 29, 1998, the debtors solicited votes
for the acceptance or rejection of the plan from the
holders of their 12-3/4% Series A Senior Notes due 2004,
the holders of their Convertible Subordinated Debentures
due 2006 and the holders of their 6% Convertible Preferred
Stock, series A and Series B. The senior note holders, the
subordinated debenture holders and the Series A preferred
stockholders voted overwhelmingly in favor of the plan in
accordance with the requirements of the Bankruptcy Code.
CITYSCAPE FINANCIAL: Last Day For Filing Proofs of Claim
--------------------------------------------------------
Cityscape Financial Corp. and Cityscape Corp., debtors,
filed a notice in The Wall Street Journal announcing
November 9, 1998 as the last day for filing proofs of
claims.
Holders of the following types of claims do not have to
file a proof of claim:
secured claims, unsecured claims (other than Securities
claims and old stock rights claims), claims for principal of
or interest on old senior notes or old subordinated
debentures or equity interest represented by Old Cityscape
Preferred Stock, Old Common Stock or Old Warrants.
CITYSCAPE FINANCIAL: Meeting of Creditors
-----------------------------------------
Cityscape Financial Corp. and Cityscape Corp., debtors
filed a notice in The Wall Street Journal of October 13,
1998, announcing the commencement of the cases on October
6, 1998. The company reports that the first meeting of the
debtors' creditors will be held on November 10, 1998 at
10:00 am at the U.S. Courthouse, 300 Quarropas Street,
White Plains, New York.
CONSUMER PORTFOLIO: Beneficial Ownership of Stock Reported
----------------------------------------------------------
NewSouth Capital Management, Inc. reports beneficial
ownership of 2,413,950 shares of common stock of Consumer
Portfolio Services Inc., which represents 15.4% of the
class. NewSouth Capital Management is an Investment Advisor
and in such capacity acquired the securities on behalf of
it's Advisor clients. No single client's interest relates
to more than 5% of the class.
DECORATIVE HOME: Decides To Dump Assets
---------------------------------------
Spurred by continuing defaults under its debtor-in-
possession loan agreements, Decorative Home Accents Inc.
decided to market its remaining businesses as a going
concern. Lender Congress Financial Corp., however, would
not provide a long-term commitment to fund operations and
sale expenses unless the home accessories manufacturer
hired experienced professionals to minimize cash needs
while marketing the assets. While management began
seeking a buyer in July, "those efforts have been
unsuccessful," the company said. Decorative Home is seeking
to retain Development Specialists Inc. retroactive to Sept.
28 "to operate the Debtors' businesses going forward and to
conduct a sale of the assets of these estates" based on
the firm's experience in rendering financial and strategic
advice and excellent reputation, the company contended.
(The Daily Bankruptcy Review and ABI Copyright c October
13, 1998)
EQUALNET CORP: Committee of Unsecured Creditors Appointed
---------------------------------------------------------
Richard W. Simmons, the United States Trustee for Region 7
appoints the following eligible creditors to the Committee
of Unsecured Creditors of Equalnet Corporation:
AT&T Corporation
Attn: Michael J. Smoyer
55 Corporate Drive
Bridgewater, New Jersey 08807
(908) 771-2528
WorldCom Network services, Inc.
f/k/a WilTel, Inc. and MFS Telecom, Inc.
Attn: Sharon Pittman
One Williams Center, 28-18
Tulsa, Oklahoma 74172
(918) 590-4446
Corestaff Services, Inc.
Attn: Don C. Taylor
4400 Post Oak Parkway
Suite 2000
Houston, Texas 77027
(713) 438-1452
The Ameritech Operating Telephone Companies
Attn: Mark W. Lewis
Law Department
225 W. Randolph Street
Suite 27-C
Chicago, Illinois 60606
(312) 727-2345
The Bell Atlantic Operating telephone Companies
Attn: Christina P. Buontempo
1 Washington Park
5th Floor
Newark, New Jersey 07102
(973) 649-8262
EQUITEX INC: Stock Ownership Reported
-------------------------------------
Wayne William Mills reports beneficial ownership of 490,000
shares of common stock of Equitex Inc., representing 11.4%
of the class. The aggregate purchase price was $471,875.
All such purchases were paid for with personal funds.
HAYES ASIA: Says Business As Usual Despite US Filing
----------------------------------------------------
Hayes (Asia Pacific) said that it is business as usual,
despite the announcement by its US parent that the company
filed for bankruptcy last Friday.
According to regional sales manager Alfred Yang, the
bankruptcy will not affect the modem maker's Asian
operations. "The operation here is quite separate from the
US. The operation here won't be effected too much," Yang
said. He added that the company had managed to maintain its
Asian market share despite US sales falling.
Hayes claims to hold a 20 percent to 30 percent share of
the Hong Kong modem market. In mainland China the company
claims to hold the number one position, with 45 per cent
market share.
Hayes voluntarily filed for bankruptcy under Chapter 11 of
the US Bankruptcy Code. Chapter 11 enables a company to
continue its business under Court protection from creditors
as reorganization plans are negotiated. In December 1997,
Hayes merged with Access Beyond (ACCB) after filing
bankruptcy for the first time.
The merger saw the company, formerly known as Hayes
Microcomputer Products, re-emerge as Hayes Communications.
A private investor put US$30 million into the
company after Hayes agreed to cut its operating expenses by
more than $4 million a quarter. ACCB shareholders were
given 21 per cent of the company and ACCB issued 45 million
shares of stock for all outstanding shares of Hayes.
Just six months after the positive merger, Access Beyond,
reported a net loss of $3.4 million. The loss was
compounded when Hayes' expectation of strong sales of the
new v.90 modem standard failed to materialize. The company
also suffered from slow demand for its ADSL (asymmetric
digital subscriber line) and cable modems.
Under the Chapter 11 filing, Hayes will continue to
announce strategic initiatives including resizing its
operations to keep its sales at a manageable level. The
company will focus on its broadband, RAS and voice-over-IP
products and continue to support modem customers.
"There is a lot of local economy here," Yang said, for the
region at the moment, "the operation and market share is
still strong." So for the Hayes Asia Pacific staff, in
times like these, that is good news.
(Newsbytes-10/12/98)
HOSPITAL STAFFING SERVICES: Applies To Employ Accountant
--------------------------------------------------------
The Official Committee of Unsecured Creditors is seeking
authorization to employ Soneet R. Kapila and the accounting
firm of Kapila & Company as accountants for the Committee.
The accounting firm will assist in developing or reviewing
the Plan of Reorganization, will review the financial
projections of the debtor for feasibility and will advise
on tax compliance and other accounting issues relative to
the plan and Disclosure Statement in the context of the
Liquidating Trust.
The normal hourly rates for professional services rendered
by the firm range from $60 to $225 per hour.
HUGHES ELECTRONICS: 20% Drop in Quarterly Earnings
--------------------------------------------------
Hughes Electronics Corporation (Hughes) reported that third
quarter 1998 revenues increased 20.3% to $1,513.3 million
compared with $1,258.3 million in the third quarter of
1997. Operating profit in the quarter was $67.5 million
compared with $124.2 million in the third quarter of 1997.
Third quarter operating profit margin on the same basis was
4.5% in 1998 versus 9.9% in 1997.
Mr. Smith attributed the decline in operating profit and
net income primarily to the expected increase in DIRECTV
operating losses resulting from higher sales and marketing
expenditures to support the record subscriber growth. Also
contributing to the earnings decline were DIRECTV Japan(TM)
start-up losses and other increased expenses, including
pension expense. The reduction in earnings was partially
offset by lower interest expense and higher interest
income.
The cash balance of $1,509.7 million at September 30, 1998
declined $1,274.1 million from December 31, 1997 primarily
due to the $851.4 million additional investment in PanAmSat
to increase Hughes' ownership from 71.5% to 81.0% and a
$204.7 million cash payment to GM in connection with the
finalization of the purchase price adjustment amount
related to the transfer of Delco Electronics to GM in
December 1997 as part of the Hughes Transactions.
The Hughes Transactions also included the spin-off and
subsequent merger of Hughes Defense with Raytheon Company.
KIA MOTORS: Ford, Three Korean Carmakers Vie For Kia
----------------------------------------------------
Ford Motor Co. on Monday jumped back into the auction for
South Korea's debt-laden Kia Motors Corp. and sister firm
Asia Motors Inc. Co. with South Korea's hunger for
foreign capital seen boosting its bid. South Korea's big
three chaebol -- the country's largest carmaker Hyundai
Motor, unlisted Daewoo Motor and Samsung Motors -- also
submitted bids for the third international auction for the
two vehicle makers.
"Ford and three Korean firms submitted bid applications
this afternoon. But details are unknown," said Kia
spokesman Kim Sam-sung. Analysts said Ford was best
positioned to win the bid this time because of South
Korea's need for foreign capital and the American
carmaker's long-time business ties with Kia.
Ford dropped out of the second auction in September, citing
Kia's heavy debt load. General Motors Corp. did not
participate in either of the first two auctions, although
it was invited to do so.
Ford and its affiliate, Mazda Motor Corp. of Japan, jointly
hold a 16.9 percent stake in Kia. Analysts said Ford's
ambition to expand its Asian business could coincide with
South Korea's wish to attract foreign capital and
technology. A Ford Motor executive said Monday Ford was
committed to building its business in Asia, because that is
where it saw the most growth in car demand.
"We are not deserting our objectives in this area. We
believe the growth is still there ...," said Ford's senior
director of worldwide policy Susan Skerker in a business
luncheon in Melbourne, Australia. But she predicted excess
capacity would be whittled down through industry
consolidations, possibly in Japan and Korea. "A lot depends
on what happens in Korea -- the whole shake-out."
Earlier in October, Kia's major creditor Korea Development
Bank said it would allow bidders to propose their own debt
write-off conditions in the
third auction. In the past two failed auctions, creditors
set the amount and conditions for a debt write-off and
prohibited bidders from asking for additional debt cuts.
The winning bid would be announced October 19, Kia said.
The winner would be allowed to assess the asset and debt
status of Kia and Asia Motors until November 17 and the
final contract for purchase of new shares issued by the two
automakers would be signed on December 1, the bank said.
Local media have said the write-off of debt principal could
be around 5.1 trillion won ($3.8 billion), equivalent to
the two carmakers' net debts.
Kia's creditors had previously offered a write-off of 2.9
trillion won($2.2 billion) of the two companies' combined
debt principal of some 12 trillion won ($9.1 billion).
Industry analysts have said a closer scrutiny of the
financial books could easily raise the debt figure to 15
trillion won ($11.4 billion).
Kia and Asia Motors are both under court receivership after
nearly collapsing last July. Creditors sought receivership
for the automakers last October. The long-running Kia
crisis was partly blamed for triggering the financial
crisis that had South Korea teetering on the brink of
national default late last year.
KOO KOO ROO: Encouraging Votes For Merger
-----------------------------------------
William Allen, III, Chief Executive Officer and Lee A.
Iacocca, acting Chairman of the Board sent a reminder to
stockholders of Koo Koo Roo, Inc. urging return of the
proxy approving the merger. They point out in their letter
that the Board of Directors of Koo Koo Roo,Inc. has
carefully considered the terms and conditions of the
proposed merger and has unanimously determined that the
merger is in the best interests of Koo Koo Roo, Inc. and
its stockholders. They also point out that a non-vote is a
vote against the merger.
MICROELECTRONIC PACKAGING: Agreements With Creditors
----------------------------------------------------
Microelectronic Packaging, Inc. announced that it has
reached definitive settlement agreements with 100 percent
of the creditors holding approximately $30 million in debt
incurred by the company's Singapore subsidiaries which is
guaranteed by MPI. These agreements, which are the
culmination of a 12-month effort by MPI management, result
in debt and accrued interest forgiveness of approximately
$21 million.
"Carrying this debt on our balance sheet, which exceeded
$40 million just four months ago, has severely hampered our
abilities to win significant contract awards with major
integrated circuit and electronic systems manufacturers,"
said Andrew K. Wrobel, president and chief executive
officer of MPI.
The payment terms of the settlement agreements require MPI
to pay approximately $8 million to the creditors over the
next several months and possibly an additional $1 million
at Dec. 31, 1999. Additionally, MPI will provide certain
non-cash considerations to certain creditors. In the event
the company fails to make the required settlement payments
on a timely basis to a particular creditor, that creditor
will be entitled to reinstate the unpaid balance of the
original debt.
"Our objective now is clear. Having this issue behind us
will allow MPI to refocus its efforts on expanding its
customer base, implementing new manufacturing processes,
and developing the technical strength and intellectual
property value of the company," continued Wrobel. "We
believe that this debt restructuring and elimination will
better position MPI to win bids for new business."
Providing microelectronic design, manufacturing and testing
capabilities, MPI satisfies the requirements of integrated
circuits and electronic systems manufacturers.
Headquartered in San Diego, Calif., with on-site
manufacturing facilities, the company designs, develops,
manufactures, markets and sells high density interconnect
solutions to customers in the commercial, automotive,
military/aerospace, telecommunications, automatic test
equipment and electronics-related industries.
MITA INDUSTRIAL: Former President and Five Others Arrested
----------------------------------------------------------
Police on Tuesday arrested the former president of
failed photocopier maker Mita Industrial Co. and five
others on suspicion the company paid dividends to
shareholders while in the red.
Yoshihiro Mita, 59, the former president and founder of the
Osaka-based company, was arrested on suspicion of violating
the Commercial Code by paying dividends after falsifying
the firm's earnings reports. Also arrested were four
former executives of Mita Industrial and one public
accountant. They were Mitsuo Nakao, 72, former executive
director of the company, Hisao Matsunaga, 58, former head
of the finance department, Isoji Igarashi, 56,
former head of the accounting department, Koji Fujita, 58,
former chief of the personnel department, and Kunihiro
Murai, 58, a certified public accountant in Tokyo.
The arrests followed the search of the company offices and
Mita's home by prosecutors and police earlier in the day.
Police suspect the company, under the direction of Mita and
the five others, had illegally paid some 250 million yen in
dividends in the midterm settlement in November 1997 to 18
shareholders by inflating company accounts by 1.9
billion yen and pretending the company was in the black.
Shareholders of Mita Industrial, an unlisted company, are
composed mostly of affiliate firms and executives'
relatives. On Monday, Makoto Miyazaki, the court-appointed
provisional administrator for the company, filed a petition
against Mita with the Osaka District Public Prosecutors
Office and the Osaka Prefectural Police, Miyazaki said
Tuesday. According to the petition, the former president
illegally paid more than 1.1 billion yen in dividends to
shareholders by inflating the accounts by more than 20
billion yen between November 1993 and November 1997.
The petition claimed the falsification of earnings reports
by Mita Industrial had begun in 1986. There is a five-year
statute of limitations on falsely paying dividends.
Prosecutors are considering charges of misappropriation
against the executives as the company paid a total of some
272 million yen in bonuses to the executives from the
window-dressed accounts, investigation sources said.
Mita and the executives kept dual books to manipulate
numbers in the accounts and hide accounts in the red,
according to the sources.
Mita Industrial applied Aug. 10 for rescue under the
Corporate Rehabilitation Law, effectively going bankrupt
with debts of more than 200 billion yen. The company's
collapse stemmed from the protracted economic slump and a
delay in the digitalization of its products. The Osaka
District Court approved Oct. 5 the start of the company's
rehabilitation with support from ceramics company Kyocera
Corp. Mita stepped down as president after it filed for
corporate rehabilitation. At a press conference in August,
Mita admitted to falsifying the accounts, saying the
company had chosen to do so to maintain their accounts with
banks. Mita Industrial is suspected of having inflated its
accounts by 37 billion yen since 1986, the sources said.
PARAGON TRADE: Stock Ownership Reported
---------------------------------------
Capital Guardian Trust Company, a bank as defined in
Section 3(a)6 of the Act is deemed to be the beneficial
owner of 1,042,700 shares or 8.7% of the 11,924,000 shares
of Common Stock believed to be outstanding as a result of
its serving as the investment manager of various
institutional accounts.
Capital International S.A. is deemed to be the beneficial
owner of 370,000 shares or 3.1% of the 11,924,000 shares of
Common Stock believed to be outstanding as a result of its
serving as the investment manager of various institutional
accounts.
Shares reported by Capital Research and Management Company
includes 326,560 shares resulting from the assumed
conversion of $9,000,000 principal amount of the 7.25%
Convertible 144A Debenture, due 2005; and 396,040 shares
resulting from the assumed conversion of $15,000,000
principal amount of the 7.00% Convertible Subordinate 144A,
due 2008.
PITTSBURGH PENGUINS: Expected To File This Week
------------------------------------------------
The Pittsburgh Penguins franchise is expected to file for
chapter 11 protection this week in order to reorganize its
finances, according to a newswire report. A spokesperson
for the tam said it prefers to resolve its troubles outside
of court, but that the filing was still an option. Last
summer National Hockey League Commissioner Gary Bettman
said he would strongly oppose a bankruptcy filing, and he
suggested the franchise could be forfeited if it did so.
The team has lost $37.5 million during the last two
seasons. Last week, the agency that owns the Civic Arena
sued the team and alleged that Penguins co-owner Roger
Marino was holding secret talks to move the Penguins to
another city. The team is facing other lawsuits as well,
including those from Fox Sports Network and SMG, for
failing to make required payments under long-term deals,
and from retired star Mario Lemieux, who claims the team
failed to make payments on a contract he signed six years
ago. (ABI 13-Oct-98)
SAM WHITE MOTOR: Houston Car Dealership Files Chapter 11
--------------------------------------------------------
Two Sam White Motor City car dealerships in the Houston
area filed for bankruptcy protection last week after Sept.
15 payroll checks bounced and after General Motors
Acceptance Corp., the largest creditor, took control of the
vehicle inventory, The Houston Business Journal reported.
Both Sam White Motor City Corp. and Sam White Corp. have
filed for protection. Total assets are about $850,000 and
total liabilities are nearly $3 million. GMAC seized the
keys to all of the company vehicles prior to the companies
filing for protection. The two Sam White entities
reportedly owe GMAC $12 million for the floor plan, working
capital and equipment loans for a huge dealership the
companies built two years ago. (ABI 13-Oct-98)
SANYO SHINPAN: S&P Lowers Rating to Negative
--------------------------------------------
On October 9, 1998, Standard & Poor's revised its outlook
for Sanyo Shinpan Finance Co. Ltd. (Sanyo) to negative from
stable. Sanyo's single-'A'-minus long-term counterparty
rating was affirmed. Sanyo's revised outlook reflects the
worsening operating environment confronting the
Japanese consumer-finance industry.
Although consumer-finance companies still enjoy high
profits they face a deterioration in asset quality arising
from the weak Japanese economy, intensified competition,
and tightened liquidity resulting from the troubled
commercial banking sector. This situation is unlikely to
improve in the near future. However, Standard & Poor's
believes that Sanyo's creditworthiness will continue to
benefit from strong capitalization and good profitability.
In accordance with the downward economic trend, the net
loss ratio at consumer-finance companies has been gradually
increasing. Standard and Poor's is concerned that high
unemployment and declining income levels could further
impair the industry's asset quality.
Given the adverse operating environment, Sanyo's operations
will likely be negatively impacted. However, Standard &
Poor's believes Sanyo has the financial capacity to absorb
the costs arising from the weak economy. Sanyo's high
capital to asset ratio at 66%, and good profitability, as
exhibited by its 6.39% ROA, should continue to support its
rating. Although Sanyo's market position has eroded
slightly, it still maintains the top market share in its
operating area. Furthermore, good relationships with its
main regional bank lenders should mitigate the impact of
the current difficult operating environment, said Standard
& Poor's.
SNAKE EYES: Disclosure Statement Conditionally Approved
-------------------------------------------------------
The Disclosure Statement of Snake Eyes Golf Clubs, Inc. is
conditionally approved by the court. November 10, 1998 is
fixed as the last day for filing written acceptances or
rejections of the plan. The plan is a liquidating plan.
All property of the debtor shall be liquidated. The debtor
has entered into the Asset purchase Agreement with VAI for
the sale of substantially all the assets and business of
the debtor for a cash payment of $1.4 million. The debtor
will ask the Bankruptcy Court to conduct the auction at the
Confirmation Hearing. As of the Petition Date the debtor's
scheduled Allowed Unsecured Claims totaled approximately
$3.05 million.
SOUTHEAST ARIZONA MEDICAL: Files For Bankruptcy Protection
----------------------------------------------------------
Southeast Arizona Medical Center in Douglas, its parent
company and three other hospitals owned by the same
company, have filed for bankruptcy protection.
The Douglas hospital will not close or lay off employees,
but filing for bankruptcy protection will allow its parent
company CHAMA time to deal with $13 million in debt.
(Arizona Republic -10/10/98)
TOSHOKU LTD: Cargill Comes To Rescue
------------------------------------
Cargill Inc., the world's largest grain dealer, plans to
expand its operations in Japan by taking over a failed food
trader.
Cargill will submit a plan to a Japanese court by March to
buy the remaining operations of Toshoku Ltd. The deal would
be the first in which a foreign company has come to the aid
of a Japanese firm undergoing
bankruptcy procedures.
Toshoku filed for bankruptcy in December after investments
at its financial units went bad. Since March, managers
appointed by the Tokyo District Court have been trying to
work out a way for the company to pay off its debts.
Minnesota-based Cargill aims to make Toshoku a full
subsidiary but first needs permission from the court,
Hideyo Suzuki, president of Cargill Japan, told a news
conference. Cargill plans to expand its business in Japan
through the acquisition, Suzuki said. Toshoku specialized
in trading grain, feed and meat.A funding plan for Toshuku
is expected to be decided upon by the spring of
2000, Suzuki said.
*********
The Meetings, Conferences and Seminars column appears in
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conferences@bankrupt.com are encouraged.
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Troubled Company Reporter is a daily newsletter, co-
published by Bankruptcy Creditors' Service, Inc.,
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Debra Brennan and Lexy Mueller, Editors.
Copyright 1998. All rights reserved. ISSN 1520-9474.
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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.
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