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/raid1/www/Hosts/bankrupt/TCR_Public/981204.MBXT R O U B L E D C O M P A N Y R E P O R T E R Friday, December 4, 1998, Vol. 2, No. 237 Headlines AR ACCESSORIES: Files Reorganization Plan BRUSH CREEK: Quarterly Results & Bankruptcy Warning CARDIOTECH INT'L: Dresdner Kleinwort Holds 21% Stake CELLPRO, INC: PricewaterhouseCoopers Resigns as Auditors CHATCOM, INC.: Third Quarter Results COUNTRY STAR: Files Prospectus - Accountants Express Doubt CRIIMI MAE: Quarterly Results & Comments About REIT Status DECORATIVE HOME: To Shed Two Carolina Units For $9.3M EAGLE CAPITAL: Gets Nod For Retention Plan FLORIDA GAMING: Annual Meeting Called for December 30, 1998 FRETTER INC: Sale of Sterling Heights, Michigan Store FULCRUM DIRECT: Seeks Extension of Exclusivity GLOBAL MOTORSPORT: Board Supports Stonington Offer GLOBAL MOTORSPORT: Golden Cycle Fires Back a Response HOMEOWNERS MORTGAGE: Seeks Authority To Sell Loans INTERNATIONAL TESTING: Applies To Retain Baker & Botts MARTIN COLOR: Case Summary & 20 Largest Unsecured Creditors ONE-STOP WIRELESS: Bar Date Set PARAGON TRADE: Equity Committee Taps Andrews & Kurth PARAGON TRADE: Proposes Joint Defense Agreement PARAGON TRADE: Seeks Court OK To Sell Oneonta Facility PARAGON TRADE: Seeks Extension of Exclusivity PHYSICIANS RESOURCE: Misses Interest Payment on Debentures QUADRAX CORPORATION: Auctioning Personal Property SELECT SWITCH SYSTEMS: Taps Angel and Neistat SOUTHERN PACIFIC FUNDING: Rejection of Realty Leases STORMEDIA INC: Seeks To Sell Assets Without Court Approval SWISS WORLD AIR: Files For Court Receivership WESTMORELAND COAL: Seeks To Resolve Adversary Proceeding WHEELED ELECTRIC POWER: Meeting of Creditors Set WINDSOR ENERGY: Baker Hughes opposes Baker & McKenzie ********* AR ACCESSORIES: Files Reorganization Plan ----------------------------------------- An amended liquidating reorganization plan and disclosure statement have been filed by AR Accessories Group Inc. and the court has scheduled the disclosure statement hearing for Dec. 30. Meanwhile, AR and its lenders have filed a complaint seeking a declaratory judgment against the Wisconsin Department of Workforce Development in an attempt to wipe out all or at least part of its asserted $7 million claim. The claim asserted by the State of Wisconsin, based on a state law which allows employee-related claims to be secured with a floating lien on a debtor's assets, has been a sticking point in the case. Several months ago, Wisconsin established a lien that attached to property in West Bend, Wis., that Tandy Brands Accessories Inc. (TBAC) purchased from AR, as well as sale proceeds distributed to the lenders. While the court subsequently released the money to lenders, it did so with the understanding that the funds may have to be returned. (Federal Filings Inc. 03-Dec-98) BRUSH CREEK: Quarterly Results & Bankruptcy Warning --------------------------------------------------- For the three-month period ending September 30, 1998, Brush Creek Mining and Development Co., Inc., report a $485,207 net loss on $6.973 in revenues during the same period. The price of gold, Brush Creek management explains, has a material effect on the Company's financial operations. Following deregulation, the market price for gold has been volatile. Since the end of 1987 the price of gold has declined from a high of approximately $500 per ounce to approximately $290 per ounce at September 30, 1998. Instability in the price of gold may affect the profitability of the Company's operations if and when the Company realizes economic production. The Company has incurred losses of $50,059,368 from inception to June 30, 1998 and had not realized economic production as of June 30, 1998. As a result of the Company's cumulative losses from operations, and the fact that the Company has not realized economic production from its mineral properties, the Company's independent auditor's report, dated November 22, 1998, for the year ended June 30, 1998, states that these conditions raise substantial doubt about the Company's ability to continue as a going concern. Management continues to actively seek additional sources of capital to fund current and future operations. There is no assurance that the Company will be successful in continuing to raise additional capital, establishing probable or proven ore reserves, or determining if the mineral properties can be mined economically. Additionally, the Company is in default on the leases of certain of its mining properties. The lessors have not taken action to foreclose on the leases and the Company is making every effort to fulfill the agreements. The loss of these leases would have a material adverse effect on the Company. At June 30, 1998, the Company had a working capital deficit of $1,387,633 and had no material revenues from mining operations. Additional financing will be required in order for the Company to cover its future mining and development costs and to engage in full scale mining operation. At this time, the Company has no definitive plans regarding additional financing, but believes that it will likely be obtained through equity financing such as stock offerings or joint ventures. Brush Creek warns that if it is unable to obtain sufficient funds from future financings and/or operations, the Company may not be able to achieve its business objectives and may have to scale back its development plans. In addition, the Company may have to sell its assets in order to meet its obligations and may lose some of its properties for failure to make lease payments. In fiscal 1997, the Company sold equipment in order to meet some of its obligations. In the event the Company is unable to obtain additional financing the Company may be required to seek protection under the bankruptcy laws. CARDIOTECH INT'L: Dresdner Kleinwort Holds 21% Stake ---------------------------------------------------- Dresdner Kleinwort Benson Private Equity Partners LP disclosed last week that it owns 1,136,484 shares, representing a 21.01% equity stake, in Massachusetts-based CardioTech International, Inc. CELLPRO, INC: PricewaterhouseCoopers Resigns as Auditors ----------------------------------------------------------- On November 24, 1998, PricewaterhouseCoopers LLP resigned as the auditors for CellPro, Incorporated. During the Company's two most recent fiscal years, and through the date of this filing, CellPro and PwC say there were no disagreements with PwC on any matter of accounting principles or practices, financial statement disclosure, auditing scope or procedure or any other reportable event which, if not resolved to the satisfaction of PwC, would have caused them to make reference to the matter in their report. PwC's report on the Company's financial statements for the fiscal year ended March 31, 1998, contained a qualification and explanatory paragraph with respect to the Company's ability to continue as a going concern. Except with respect to the qualification and explanatory paragraph for the fiscal year ended March 31, 1998, the reports of PwC for the fiscal years ended March 31, 1998 and March 31, 1997 did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principles. CHATCOM, INC.: Third Quarter Results ------------------------------------ Shareholder deficits climbed to $5.4 million at September 30, 1998, as operating losses continued through the third quarter at ChatCom, Inc. In September 1998, a meeting of the Company's creditors was held at Credit Managers Association of California. As an inducement for creditors to enter into a moratorium and to discourage present and future creditors from attempting to execute on The Company's assets, the Company pledged substantially all of its assets to CMAC in its capacity as agent for the creditors of The Company. An unofficial committee of creditors has been formed to monitor the Company's operations and review its business plan, as described under Liquidity and Capital Resources. Creditors are being requested to forbear from seeking payment on all past due obligations through February 1999, while efforts are undertaken to explore alternative measures by which the Company can seek to realized moneys or other consideration for its creditors and stockholders. No binding moratorium agreement is currently in place, and it is possible that one or more creditors will not honor this forbearance request. Absent creditor cooperation, there is a significant possibility that the Company will be forced to seek relief in the bankruptcy court. COUNTRY STAR: Files Prospectus - Accountants Express Doubt ---------------------------------------------------------- Country Star Restaurants, Inc., has filed a Prospectus with the SEC relative to (i) 14,426,921 shares of its Common Stock and (ii) an indeterminate number of shares (approximately 161,073,000) of its Common Stock presently issuable upon conversion of the outstanding principal amount of certain Convertible Notes, plus accrued and unpaid interest, held by certain of the Selling Stockholders. The Company notes that 57,340,000 of the shares being registered are held by and issuable upon conversion of certain Convertible Notes held by Dan J. Rubin, President, Chairman of the Board of Directors, Chief Executive Officer and a Director of the Company, and these shares constitute Mr. Rubin's entire equity interest in the Company. The Company, Country Star Restaurants, Inc., develops, constructs, owns and operates country theme restaurants combining high quality, moderately priced food with a casual, family oriented environment. The Company currently operates one restaurant, located in Hollywood, California. The Company relates that it opened its first Country Star Restaurant in August, 1994 and two more restaurants in 1996. The Company has continued to incur operating losses. During 1997, the Company permanently closed one of its restaurants and during 1998 permanently closed another of its restaurants. The Company now operates only one restaurant. For the fiscal year ended December 31, 1997, the Company had a net loss of $17,246,000. The Company's independent certified public accountants have rendered a going concern qualification to their opinion on the Company's 1997 financial statements and stated that the Company has experienced significant losses in 1996 and 1997, and is experiencing cash flow shortages and that these factors "raise substantial doubt about the Company's ability to continue as a going concern." CRIIMI MAE: Quarterly Results & Comments About REIT Status ---------------------------------------------------------- For the quarter ending September 30, 1998, Criimi Mae, Inc., reports an $8,651,379 loss, narrowing the company's year-to-date profits to $47,030,928 for the nine-month period ending September 30, 1998. The REIT's asset base slipped from $2,671,956,628 at the end of 1997 to $1,873,305,488 at September 30, 1998, while liabilities concomitantly decreased from $2,176,612,176 to $1,427,392,070. As a result of its bankruptcy filings, the Company has been advised by its independent public accountants that, if a reorganization plan is not approved by the Bankruptcy Court prior to the completion of their audit of the Company's financial statements for the year ending December 31, 1998, the auditors' report on those financial statements will be modified due to substantial doubt about the Company's ability to continue as a going concern. The Company reminded investors that if it fails to distribute at least 85%of its REIT taxable income and 95% of its capital gain net income during 1998, the Company will incur a non-deductible excise tax equal to 4% of the amount by which the 85% taxable income and 95% capital gain distribution requirement exceeds the amount so distributed. During the pendency of the bankruptcy proceedings, the Company is prohibited from paying or declaring distributions without Bankruptcy Court approval. For this and other reasons, there can be no assurance that the REIT will be able to comply with the 95% distribution requirement on a timely basis, or at all. Although the Company intends to use its best efforts to retain its REIT status for the 1998 tax year, there can be no assurance that such efforts will succeed. If CRIIMI MAE should lose its status as a REIT for 1998, the Company would be subject to corporate taxation on its taxable income for the full year. DECORATIVE HOME: To Shed Two Carolina Units For $9.3M ----------------------------------------------------- Looking to speedily liquidate its few remaining assets, Decorative Home Accents is seeking approval to sell its Superba Printworks and Rug Barn Inc. businesses and to amend the terms of the Glenn manufacturing facility sale. Development Specialists Inc., which is marketing the home accessories manufacturer's assets, received two offers for each of the businesses but accepted Prints USA LLC's $1.8 million offer for Superba and Thantex Holdings Inc.'s bid of more than $7.5 million for Rug Barn because neither offer was contingent on third party financing. Prints USA, a North Carolina company whose majority shareholder owned the unit before DHA, will purchase 35 acres of land in Mooresville, N.C., with two buildings totaling 450,000 square feet, plus all equipment, supplies, and works- in-progress as of the closing date. Thantex will purchase the Rug Barn assets, which include 34.5 acres of land with a 334,000 square-foot building in Abbeville, S.C., and all related intangibles, equipment, accounts receivable, and inventory on hand at closing. (Federal Filings Inc. 03-Dec- 98) EAGLE CAPITAL: Gets Nod For Retention Plan ------------------------------------------ Eagle Capital Mortgage Ltd. won court approval of an employee retention plan that will cost the subprime mortgage lender more than $290,000. The court found that "the retention of employees is necessary to the completion and reorganization of the Debtor." If the company is unable to maintain and incentivize current employees, Eagle warned, "valuable resources of information regarding operations, including the servicing of the approximately 8,800 residential mortgage loans, will irretrievably be lost during this time of transition and reorganization." The company noted that employees it would like to retain have begun to leave. (Federal Filings Inc. 02-Dec-98) FLORIDA GAMING: Annual Meeting Called for December 30, 1998 ----------------------------------------------------------- Florida Gaming Corporation has notified its shareholders that the 1998 Annual Meeting of Stockholders of Florida Gaming Corporation will be held at Double Tree Club Hotel, 9700 Bluegrass Parkway, Louisville, Kentucky 40299 on December 3O, 1998 at 2:00 P.M., local time, for the following purposes: 1. To elect six directors to serve until the 1999 Annual Meeting of Stockholders; 2. To appoint King & Company PSC, as the Company's auditor for 1999; 3. To transact such other business as may properly come before the Meeting and adjournments thereof. FRETTER INC: Sale of Sterling Heights, Michigan Store ----------------------------------------------------- The debtors, Fretter, Inc., et al., seek an order authorizing Fretter to sell certain real property located in Sterling Heights, Michigan to Robert Seroka, an individual. The purchase price for the property is $1.55 million subject to higher and better bids. A Break-up fee of $20,000 is provided in the event the debtor accepts a better and higher offer. The sale is subject to any competing offers, the total consideration of which must be at least $1.595 million or greater. FULCRUM DIRECT: Seeks Extension of Exclusivity ---------------------------------------------- Fulcrum Direct, Inc. and its affiliated debtors seek an order granitng extension of exclusive periods to file a plan or plans of reorganization and solicit acceptances thereto. The debtors are seeking an extension of their exclusive period within which they may file a plan or plans of reorgaization through and including January 31, 1999 and an extension of the exclusive period within which they may solciit acceptances of an such plan(s) through and including April 1, 1999. The debtors state that the initial 120-day period does not afford Fulcrum a realistic opportunity to formulate a comprehensive plan of liquidation. Accodingly, it reuqests that the court extend the filing period through and inculding January 31, 1999 and the Solicitiation period through and including April 1, 1999. Since the petition date, Fulcrum, in addition to handling administrative matters, has been working toward liquidating its assets. This process has proved more arduous and time-consuming than anticipated. Until Fulcrum is further along in the process of liquidating the estates' assets and analyzing its potential causes of action, it is not in the position to assess the recoveries that will be available to the estates and it is not in the position to formulate a plan of liquidation. Fulcrum submits that the requested extensions are justified, appropriate and realistic under the circumstances. GLOBAL MOTORSPORT: Board Supports Stonington Offer -------------------------------------------------- Global Motorsport Group, Inc., tells shareholders in a letter dated November 24, 1998, that, having considered the pending competing tender offers, its Board of Directors rejects the offer proposed by Golden Cycle and reaffirms its support of Stonington Acquisition Corp.'s cash tender offer. Cleary Gull Reiland & McDevitt, provide Global with financial advisory services; Thomas D. Magill, Esq., at Gibson, Dunn & Crutcher LLP, serves as Global's legal counsel. Global explains that, among other things, Cleary Gull advised the Board that the cash value per share of the Golden Cycle proposal is less than $20.00 as it is not for all of the outstanding shares. Cleary Gull also advised the Board that it was not possible based upon the information provided to value the stub component of the Golden Cycle proposal. Cleary Gull further advised the Board that it was reasonable to further discount the value of the Golden Cycle proposal to take into account the time value of money between the December 14, 1998 scheduled closing of the pending Stonington tender offer and the uncertain consummation of the Golden Cycle proposal, which could be significantly later than December 14th. Cleary Gull advised the Board that the impact of all of the foregoing could be to significantly diminish the purported value of the Golden Cycle proposal, especially in relation to the pending all cash Stonington tender offer that is expected to close on December 14th. GLOBAL MOTORSPORT: Golden Cycle Fires Back a Response ----------------------------------------------------- In response to the Board of Directors' letter to shareholders of Global Motorsport Group, Inc., Golden Cycle, LLC, challenges Global's conclusion that "a fully financed offer of $20 per share for 99% of Global's outstanding shares is not superior to an offer of $19.50 per share which remains subject, more than two weeks after a definitive agreement was signed, to [Stonington's] financing contingency and numerous other conditions. Such a conclusion defies logic and makes it absolutely clear that the Board of Global has no intention of exploring a transaction which would maximize stockholder value." "If the mere repetition of absurdities only made them true, the Board's final justification for refusing to negotiate with Cycle would have some credibility. Unfortunately for Global's directors, your stockholders will not be fooled by such tactics. Your financial advisors, Stonington, Fremont and every other person who has looked at the company has concluded that $20 per share is a full and fair price. Indeed, Stonington's tender offer document states that it will cause Global to argue in appraisal hearings in court that the fair value of the company is less than $19.50 per share. In view of those facts, the suggestion that a 77[cents] per share lockup will not deter a bona fide acquisition proposal is beyond belief," Golden chides. Golden suggests that "the true reason that the Board unanimously resolved to reject [Golden] Cycle's offer and to refuse to pursue discussions with, or provide information to, [Golden] Cycle that is, the Board has concluded that the company is for sale to anyone but Golden Cycle." HOMEOWNERS MORTGAGE: Seeks Authority To Sell Loans -------------------------------------------------- The debtor, Homeowners Mortgage & Equity, Inc. seeks authority to sell collateral loans by private sale, or in the alternative, to convey collateral loans to Guaranty Federal Bank, FSB. The debtor currently owns a portfolio of approximately 175 currently performing loans with an approximate total current unpaid pricipal balance of $4.5 million. Debtor wishes to liquidate this portfolio of loans in its entirety. These loans are subject to a lien in favor of Guaranty Federal Bank, FSB. The Guaranty Loans are curently the subject of a sales contract to Paladin Financial, Inc. which has been approved by this Court. However, Paladin has refused to close and debtor believes it needs to mitigate its damages by moving for additional authroity to sell the Guaranty Loans. The debtor seeks authority to sell the Guaranty Loans in its portfolio at a private sale or sales, on terms that the debtor believes in its business judgment yield the highest and best price obtainable for the loans. The debtor states that approval of the prospective sale or sales of such loans is in the best interests of the estate in that the debtor will avoid incurring additional administrative costs in seeking approval fo the sale of the loans on a piecemeal basis. The debtor also states that any delay in marketing and selling the loans could result in a lower return for the estate. INTERNATIONAL TESTING: Applies To Retain Baker & Botts ------------------------------------------------------ International Testing Services, Inc., debtor, seeks an order authorizing the retention of Baker & Botts LLP as attorneys. The firm will prosecute actions on the debtor's behalf, and defend any actions commenced against the debtor; negotiation litigation and prepare all necessary application, motions, briefs, answers, orders; develop and negotiate a Chapter 11 plan and prepare a disclosure statement. The debtor proposes to compensate the firm according to its standard hourly rates. MARTIN COLOR: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Martin Color-Fi Inc. 306 Main Street Edgefield, South Carolina 29824 Court: District of South Carolina, Columbia Case No.: 98-10145W Filed: 11/16/98 Chapter: 11 Debtor's Counsel: G. William McCarthy Jr. Robinson, Barton,McCarthy & Calloway 1715 Pickens Street P.O. Box 12287 Columbia, SC 29211-2287 (803) 256-6400 20 Largest Unsecured Creditors: Name Amount ---- ------ Fred Davis 2,124,452 Nanya Plastics Corp. 816,653 Eastman Chemical Finance 782,365 BASF Corporation 285,007 FARE 240,000 CIBA Specialty Chemicals 234,364 Evelyn Timanus 148,252 DuPont Company 98,619 Shell Chemical Company 93,062 Materials Management 84,278 David Poole Company, Inc. 83,683 Polymer Color North America 82,429 Carolina Power & Light 76,890 Hoechst Celanese Corporation 59,011 US Polymers 58,325 Ashland Chemical 57,177 BASF Corporation 54,978 Du Pont Company 53,388 Southtrust Bank 53,343 Burcham International Corp 51,692 ONE-STOP WIRELESS: Bar Date Set ------------------------------- The United states Bankruptcy Court for the Central District of California has set a deadline of January 25, 1999 for creditors of the debtors to file claims against the debtors' estate. PARAGON TRADE: Equity Committee Taps Andrews & Kurth ---------------------------------------------------- The Court entered an order on November 24, 1998 approving the employment of Andres & Kurth as attorney to the Official Committee of Equity Security Holders. PARAGON TRADE: Proposes Joint Defense Agreement ----------------------------------------------- Paragon Trade Brands, Inc. requests authority from the court to enter into a Joint Defense Agreement by and among the debtor and the Official Committee of Equity Security Holders, The agreement will allow the debtor to share information with the Equity Committee and will allow the Equity Committee to make an informed decision on and provide valuable input to the debtor relative to the debtor's defense and counterclaims in the pending litigation with Procter & Gamble and Kimberly-Clark. Paragon wishes to solicit the input of the Equity Committee on various strategic and tactical decisions that must be made in defending these claims. The debtor cannot maximize the value of that input, however, without sharing with the Equity Committee certain privileged information and certain work product materials, including the opinions of the debtor's counsel on the relative merits of various courses of action. The debtor does not want to lose the protection of the attorney-client privilege or the work product doctrine if it disseminates this material without this agreement. PARAGON TRADE: Seeks Court OK To Sell Oneonta Facility ------------------------------------------------------ Paragon Trade Brands, Inc., debtor seeks authorization to sell certain of its real property, namely its manufacturing facility in Oneonta, New York, together with certain personal property located thereon. The debtor has reached an agreement with Drogen Wholesale Electric Supply, Inc. for a purchase price of $1.15 million. PARAGON TRADE: Seeks Extension of Exclusivity --------------------------------------------- Paragon Trade Brands, Inc. seeks a further extension of its exclusive periods to file a plan of reorganization and solicit acceptances thereto. Paragon seeks a further sixty-day extension, to February 18, 1999 and April 19, 1999 respectively. Following the Stipulation, the debtor has continued to make considerable progress with P&G and KC relative to their claims. The parties continue to work toward a consensual resolution of the claims asserted by P&G and KC. The extension of the Exclusive Periods will continue to enhance the negotiation process and will allow the parties to focus on the negotiations necessary to bring this case to a successful conclusion. Paragon states that it has commenced the process of developing a plan of reorganization. Paragon and its advisors have completed a valuation and debt capacity analysis and have delivered that material to the Creditors' Committee, P&G, KC and the Equity Committee, so that plan discussions can commence. PHYSICIANS RESOURCE: Misses Interest Payment on Debentures ---------------------------------------------------------- Physicians Resource Group, Inc. (NYSE: PRG) announced that it did not make the interest payment due today related to the Company's outstanding 6% Convertible Subordinated Debentures due 2001, in the principal amount outstanding of $125.0 million. If the interest payment is not made by December 31, 1998, holders of a total of 25% or more of the outstanding principal amount of the convertible subordinated debentures, and the trustee under the indenture related to the convertible subordinated debentures, will have the right to accelerate the maturity of the convertible subordinated debentures. If acceleration occurs but a judgment has not been obtained for payment of amounts due, and the Company is able to make payments necessary to cover overdue interest plus certain related expenses, the holders of a total of 50% or more of the outstanding principal balance of the convertible subordinated debentures may rescind any acceleration. As previously announced, the New York Stock Exchange has informed the Company that the New York Stock Exchange will make application with the Securities and Exchange Commission to de-list the Company's Common Stock. Upon the occurrence of a de-listing, unless the Company's Common Stock is then approved or listed for trading on another United States national securities exchange or on an established United States over-the-counter trading market, the holders of the Company's convertible subordinated debentures will have the right, within a period of approximately 45 days following the de-listing, to require the Company to repurchase the convertible subordinated debentures at 100% of their principal amount plus accrued but unpaid interest. Failure of the Company to fulfill its repurchase obligation would constitute an event of default under the indenture, which would provide holders of 25% or more of the convertible subordinated debentures and the indenture trustee the right to accelerate the maturity of the convertible subordinated debentures. PRG is a provider of physician practice management services to eye care practices and operates ambulatory surgery centers. QUADRAX CORPORATION: Auctioning Personal Property ------------------------------------------------- Public auction sales of the personal property of the debtor, Quadrax Corporation will take place On December 10, 1998 in Portsmouth Rhode Island and on December 16, 1998 in Vista, California. The tangible personal property to be auctioned includes inventory, machinery, equipment, furnishings, office equipment and supplies. For specific terms of the auction contact the debtor's auctioneer, Salvatore Corio of SJ Corio Company, 70 Rock Avenue, Warwick, Rhode Island. SELECT SWITCH SYSTEMS: Taps Angel and Neistat --------------------------------------------- Select Switch Systems, Inc. filed its application for an order authorizing it to employ the firm of Angel and Neistat as its bankruptcy counsel. The debtor wishes to employ bankruptcy counsel in order to advise the debtor with respect to its duties and powers in this case, to assist the debtor regarding its conduct, assets, liabilities, and financial condition, the operation of the debtor's business, and other matters relevant to the case, to formulate and propose a plan of reorganization and disclosure statement, obtain plan confirmation and to perform such other legal services as may be required and as are in the interest of the debtor. A hearing on the motion is set for December 22, 1998, 10:00 a.m. at Courtroom 301, 3420 Twelfth Street, Riverside, California. SOUTHERN PACIFIC FUNDING: Rejection of Realty Leases ---------------------------------------------------- The court entered an order that unless an objection is filed, 24 leases of the debtor, Southern Pacific Funding Corporation are rejected. The debtor will have vacated all of the premises by December 1, 1998. STORMEDIA INC: Seeks To Sell Assets Without Court Approval ---------------------------------------------------------- Stormedia Incorporated, and its affiliated debtors seek court approval to sell certain assets where the sale price is $500,000 or less without court approval. The debtors wish to avoid administrative expenses in receiving approval for each transaction, and often the debtors claim that they are facing stringent time constraints in meeting the closing deadlines established by interested purchasers. SWISS WORLD AIR: Files For Court Receivership --------------------------------------------- Switzerland's troubled airline Swiss World Airways (SWA) applied for receivership on Wednesday and suspended flights, effectively declaring itself bankrupt. The fledgling airline's board announced its decision to seek the appointment of an administrator in a note its shareholders, Swiss news agency ATS said. The Geneva-based airline's telephones were not answering and its officials were not available for comment, but ATS said SWA had told the Federal Office of Civil Aviation it was suspending its regular flights to the United States from December 3. Wednesday's board meeting followed the apparent failure of an urgent bid by the company to raise some $2 million by this week to save it from collapse. The airline started operations in September with flights six days a week from Geneva to Newark, New Jersey, and had plans to expand to several other North American destinations. It had one leased aircraft, a Boeing 767 with 159 seats leased from an Australian company, and employed some 110 people. In the first two months of operations, it achieved a 50 percent seat occupancy, which officials argued was good for a startup operation. Geneva airport officials said the Wednesday flight from Newark, which serves New York and surrounding areas, had arrived earlier in the day, and confirmed that the next scheduled flight had been cancelled. SWA was launched with financial support from cantonal governments in French- speaking western Switzerland after the national flagcarrier Swissair switched most of its longhaul flights from Geneva to Zurich. WESTMORELAND COAL: Seeks To Resolve Adversary Proceeding -------------------------------------------------------- Westmoreland Coal Company, et al., debtors, are seeking authority to enter into two compromises that will dispose of the litigation currently pending by and among the debtors and the UMWA 1992 Benefit Plan and the UMWA Combined Benefit Fund. If the court approves the resolution of the disputed claims, the parties to the claims agree to withdraw any objection to the dismissal of the Chapter 11 case. Both compromises include payment in full of all premiums,, the reinstatement of an individual employer plan, timely payment of all future premiums and declaration that the premiums assessed during the chapter 11 cases are entitled to priority. The compromise would also bar the debtors from initiating new litigation to challenge their liabilities under the Coal Act, subject to certain agreed upon exceptions. WHEELED ELECTRIC POWER: Meeting of Creditors Set ------------------------------------------------ In the case of the debtor, Wheeled Electric Power Company, a meeting of creditors is scheduled for December 18, 1998 at 1:30 pm at the J. Caleb Boggs Federal Building, 844 King Street, Room 2313, Wilmington, Delaware. WINDSOR ENERGY: Baker Hughes opposes Baker & McKenzie ----------------------------------------------------- Baker Hughes, Inc. objects to the representation by Baker & McKenzie of the creditors committee. The Creditors Committee in this case is made up of six creditors from the Rincon Island bankruptcy case and one creditor, Petrotech International, from the Windsor case. The Petrotech representative, Mr. Paul Herzberg, is also Chairman of the Committee. Petrotech is, on information and belief of Baker Hughes, solely a debenture holder of Windsor. "Usually a debenture holder is secured. However, they remain on and in fact chair the Committee," states Baker Hughes. While Baker Hughes admits that the real inquiry may be the composition of the committee, Baker Hughes believes that where the Committee has a conflict of interest and members from two different bankruptcy estates on it, the Committee's proposed counsel is infected by the same conflict. Baker & Hughes states that the application should be denied in that granting it would, in effect, allow Baker & McKenzie to proceed to represent parties when an actual conflict exists. DLS CAPITAL PARTNERS: Bond Pricing For Week of 11/30/98 ------------------------------------------------------- Following are indicated prices for selected issues: Acme Metal 10 7/8 '07 13 - 16 (f) Planet Hollywood 12 '05 42 - 44 Atel 0/14 1/2 '04 17 - 19 Royal Oak 12 3/4 '06 45 - 48 Amer Pad & Paper 13 '05 54 - 57 Samsonite 10 3/4 '08 83 - 85 Asia P & P 11 3/4 '05 75 - 77 Service Merchandis 9 '04 45 - 46 Boston Chicken 7 3/4 '05 5 - 6 (f) Sunbeam 0 '18 12 - 13 Brazos 10 1/2 '07 8 - 12 (f) Zenith 6 1/4 '11 17 - 20 (f) Brunos 10 1/2 '05 12 - 14 (f) Cityscape 12 3/4 '04 15 - 16 (f) E & S Hlds 10 3/8 '06 41 - 44 Globalstar 11 1/4 '04 74 - 76 Hechinger 9.45 '12 68 - 72 Hills 12 1/2 '02 50 - 52 Mobilemedia 9 3/8 '07 15 - 17 (f) Penn Traffic 9 5/8'05 16 - 17 *********** 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 * * *