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/raid1/www/Hosts/bankrupt/TCR_Public/981214.MBXT R O U B L E D C O M P A N Y R E P O R T E R Monday, December 14, 1998, Vol. 2, No. 243 Headlines AMERICAN GAMING: Order of Joint Administration AMF BOWLING: Reports Litigation in China ARROW AUTOMOTIVE: Committee Taps PricewaterhouseCoopers CD SERVICES: Bad Faith Filing CELLEX BIOSCIENCES: To Reorganize Under Chapter 11 CITYSCAPE FINANCIAL: Order Extends Time DOMINION BRIDGE: Extension Granted To File Proposal HUNGARIAN TELECONSTRUCT CORP: Reports Operating Results INTERNATIONAL WIRELESS: Seeks Authorization of Payment MOBILEMEDIA: Court Approves Disclosure Statement NEXAR TECHNOLOGIES: Likely to Begin Insolvency Proceedings ONEITA INDUSTRIES: Gets Limited Exclusivity Extension PETRIE RETAIL: Plan Confirmed, Sale To Close Next Week POWER CO: Unsecured Creditors To Recover 3% To 7% STELLEX INDUSTRIES: Switches Accountants UNISON HEALTHCARE: Resolves All But One Objection To Plan VOICE IT WORLDWIDE: Taps Accounting Firm Ehrhardt, Keefe WINTERSILKS INC: Seeks Authorization to Use Cash Collateral DLS CAPITAL PARTNERS: Bond Pricing For Week of 12/7/98 *********** AMERICAN GAMING: Order of Joint Administration ---------------------------------------------- On November 30, 1998 the Honorable Jerry A. Brown entered an order providing that In re Amgam Associates and In re American Gaming and Resorts of Mississippi, Inc. d/b/a American Gaming Corporation will be jointly administered. A single docket sheet shall be maintained, a single claims file will be maintained, disclosure statements shall be consolidated into one, and plans of reorganization shall be consolidated into one plan. AMF BOWLING: Reports Litigation in China ---------------------------------------- In a current report on Form 8-K, AMF BOWLING WORLDWIDE, INC. reports to the SEC that in its Quarterly Report on Form 10-Q for the quarterly period ended on September 30, 1998, AMF Bowling Worldwide, Inc. reported that AMF Bowling Products, Inc. is in litigation with Harbin Hai Heng Bowling Entertainment Co. Ltd. ("Hai Heng") in the Harbin Intermediate People's Court in Heilongiiang, China. In connection with such litigation, on November 6, 1998, the Harbin Intermediate People's Court awarded Hai Heng approximately $3.5 million. The Company intends to continue its vigorous defense of Hai Heng's claims and intends to appeal such judgment. Management does not believe that the ultimate outcome of the action will have a material adverse impact on the financial position of the Company. ARROW AUTOMOTIVE: Committee Taps PricewaterhouseCoopers ------------------------------------------------------- The Official Committee of Unsecured Creditors of Arrow Automotive Industries, Inc. applies to the court for an order approving the appointment of PricewaterhouseCoopers as accountants and financial advisors to the Committee. The Committee requests the assistance of accountants and financial advisor to ascertain the viability of the debtor;' to review and analyze the debtor's books, to investigate historical transactions, to review and analyze the debtor's operating controls, to prepare a liquidation analysis, and to review and assess business plans and advise the Committee in connection with the negotiation and the formulation of a plan. The firm will charge hourly rates ranging from $60 for paraprofessionals to $400 per hour for partners. CD SERVICES: Bad Faith Filing ----------------------------- Bankruptcy Judge John E. Ryan ruled this week that CD Services, a Laguna Hills, Calif., company that filed chapter 7 in July, never planned to reorganized and that it was shopping around for the best forum in which to present its case, The Orange County Register reported. Judge Ryan dismissed the bankruptcy case and sent it back to a Los Angeles Superior Court-appointed receiver who will distribute the company's remaining $30 million in assets. The firm is accused of defrauding elderly investors out of millions. Receiver Dennis Schmucker was appointed on July 30, the same day CD Services filed bankruptcy. Schmucker said many of the records have been destroyed, making his job of matching CDs with investors more difficult. (ABI 11- Dec-98) CELLEX BIOSCIENCES: To Reorganize Under Chapter 11 --------------------------------------------------- Cellex Biosciences Inc., which was the subject of an involuntary bankruptcy petition filed in October by three of its unsecured creditors, announced yesterday it will reorganize under a voluntary chapter 11, according to a newswire report. The company filed a consent to order for relief with the bankruptcy court in Minnesota on Dec. 8 and is now operating as a debtor-in-possession. This reorganization replaces a recapitalization plan announced in July. Cellex Biosciences had until Dec. 4 to file an answer to the involuntary petition. It is now negotiating a consensual plan of reorganization, and new potential investors have been identified to help finance the reorganization and ongoing operations. (ABI 11-Dec-98) CITYSCAPE FINANCIAL: Order Extends Time --------------------------------------- The Honorable Adlai S. Hardin, Jr., entered an order on December 2, 1998 upon the consideration of the motion of the debtors, Cityscape Financial Corp. and Cityscape Corp. seeking an extension of the deadline to assume or reject all of their unexpired leases of nonresidential real property. The Court's order extends the time period from December 4, 1998 to March 4, 1999. DOMINION BRIDGE: Extension Granted To File Proposal ---------------------------------------------------- A new extension until Jan. 22 was granted to Dominion Bridge Corp. and its subsidiaries, Cedar Group of Canada and Davie Industries Inc., to file their proposal with regard to creditors, pursuant to their August 11 filing under Canada's Bankruptcy and Insolvency Act, according to a newswire report. (ABI 11-Dec-98) HUNGARIAN TELECONSTRUCT CORP: Reports Operating Results -------------------------------------------------------- Euroweb International filed a quarterly report with the SEC for the quarter ended June 30, 1997. Hungarian Teleconstruct Corp. reports that for the six months ended June 30, 1997, the Company incurred a net loss of $1,887,693; the net loss for the six months ended June 30, 1996 amounted to $786,985. The acquisition of the Internet business resulted in goodwill of $1,912,077, which is being amortized over five years; amortization for the six months ended June 30,1997 amounted to $191,000. INTERNATIONAL WIRELESS: Seeks Authorization of Payment ------------------------------------------------------ The debtors, International Wireless and its affiliates seek authority to make a payment of a capital call in connection with the debtors' assets in Pakistan. A hearing to consider the motion will be held on December 17, 1998 at 2:30 PM before the Honorable Mary F. Walrath, US Bankruptcy Court for the District of Delaware. The debtor seeks authority for Pakistan Wireless Holdings Limited, a debtor in this case, to fund its portion of a capital call in Pakistan in the amount of approximately $1,076,749. Although the debtors believe that this is in the ordinary course of business, they seek court approval out of an abundance of caution. The payment6 of capital call is a common occurrence in the debtor's business operations. The notice of the capital call reuqires it to be paid by December 20, 1998. MOBILEMEDIA: Court Approves Disclosure Statement ------------------------------------------------ Clearing the way for its merger with Arch Communications Group Inc., MobileMedia Corp. announced yesterday that the bankruptcy court for the District of Delaware approved its disclosure statement, according to a newswire report. Now the company will distribute its Third Amended Plan of Reorganization to creditors for a vote; once it is approved by creditors and the court, the company will move ahead with its merger. The plan and statement reflect the terms of the proposed merger and are scheduled to be distributed to creditors no later than Dec. 24. The deadline for voting on the plan is Jan. 27. The court has scheduled a Feb. 3 confirmation hearing. MobileMedia filed chapter 11 on Jan. 30, 1997, and in August of this year, the two companies announced their merger plans. NEXAR TECHNOLOGIES: Likely to Begin Insolvency Proceedings ---------------------------------------------------------- Nexar Technologies Inc., Southborough, Mass., announced that due to the company's inability to obtain new financing and concern among its creditors, it will soon begin insolvency proceedings, according to a newswire report. Nexar anticipates that it will be delisted from Nasdaq as early as today because of the company's failure to satisfy Nasdaq listing requirements. (ABI 11-Dec-98) ONEITA INDUSTRIES: Gets Limited Exclusivity Extension ----------------------------------------------------- The court extended Oneita's exclusive period to file an amended reorganization plan to Feb. 18 after its lenders agreed to support the extension with a provision that they could file their own plan any time after Dec. 17. Under the agreement, any plan of reorganization submitted by lenders would have to be supported by a majority of the members of the lenders' group holding at least two-thirds in amount of the aggregate lenders' claims. In its request for a longer period of exclusivity, Oneita asserted the extension was warranted based on the strides the company has made during its reorganization, including a hike in its accounts receivable. In January, the accounts receivable and inventory had a face value of $31 million, but by October, it had grown to nearly $38 million, according to Oneita. (Federal Filings Inc. 11-Dec-98) PETRIE RETAIL: Plan Confirmed, Sale To Close Next Week ------------------------------------------------------ The court confirmed a modified version of Petrie Retail Inc.'s reorganization plan that incorporates the sale of the retailer to a unit of Urban Brands and provides $3 million more of consideration than their purchase agreement. The sale of Petrie's remaining assets, with the exception of 13 leases, is scheduled to close at the end of next week. Petrie, the committee, Urban Acquisition Corp., and Petrie shareholder Warburg Pincus Ventures L.P. agreed to modify the sale transaction and plan to provide more consideration and preserve more than $200 million of net operating loss carryovers for Warburg. Warburg has agreed to assume or waive a total of about $8 million of administrative claims, including professional fees and fees related to the debtor-in-possession financing provided to the retailer, and would pay $12 million of the consideration provided under the plan, among other things. (Federal Filings Inc. 11-Dec-98) POWER CO: Unsecured Creditors To Recover 3% To 7% -------------------------------------------------- Power Co. of America L.P. estimated that unsecured creditors, who have asserted more than $368.8 million of claims, would receive a minimum recovery of 3 percent to 7 percent under the company's liquidating plan of reorganization. The former electricity-trading company filed its proposed plan and disclosure statement on Nov. 30, the deadline set by the court in September. The official committee of unsecured creditors "has worked closely with the Debtor in the preparation of the Plan," which provides for the creation of a liquidating trust. The recovery estimate for unsecured creditors does not include any recoveries from causes of action and assumes that each claim is allowed in the amount asserted. "The ultimate recovery by holders of Allowed [unsecured] Claims in Class 4 will depend upon the degree to which the Trustee is able to maximize the Trust Property by collecting receivables, pursuing claims against various parties and reconciling the amounts listed in the Debtor's books and records," the energy marketer noted. (The Daily Bankruptcy Review and ABI Copyright c December 11, 1998) STELLEX INDUSTRIES: Switches Accountants ---------------------------------------- On December 2, 1998, the Board of Directors of Stellex Industries, Inc. and subsidiaries resolved to (i) engage Deloitte & Touche LLP as the independent accountants for all of Stellex Industries, Inc. and subsidiaries for the year ended December 31, 1998 and (ii) dismiss PricewaterhouseCoopers LLP as independent accountants of KII Holding Corp. and subsidiaries, a significant consolidated subsidiary of Stellex Industries, Inc. and subsidiaries. PricewaterhouseCoopers LLP had audited the consolidated balance sheets of KII Holdings Corp. and subsidiaries (formerly Kleinert Industries, Inc.), as of December 31, 1997 and 1996 and the related consolidated statements of operations, stockholders' equity and cash flows for the six-month period ended December 31, 1997 (successor) and June 30, 1997 (predecessor) and the years ended December 31, 1996 and 1995 (predecessor). During the years ended December 31, 1997 and 1996 and the subsequent interim period through December 2, 1998, (i) there were no disagreements with PricewaterhouseCoopers LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to its satisfaction would have caused it to make reference in connection with its report to the subjective matter of the disagreement, and (ii) PricewaterhouseCoopers LLP has not advised the registrant of any reportable events as defined in paragraph (A) through (D) of RegulationS-K Item 304 (a) (1) (v). The independent auditors' report of PricewaterhouseCoopers LLP on the consolidated financial statement of KII Holdings Corp. and subsidiaries as of and for the years ended December 31, 1997 and 1996 did not contain any adverse opinion or disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope, or accounting principles. UNISON HEALTHCARE: Resolves All But One Objection To Plan --------------------------------------------------------- Unison HealthCare Corp. has resolved all but one objection to its reorganization plan and the eight creditor classes entitled to vote "overwhelmingly" approved the joint plan, according to an attorney for the nursing home operator. On another front, the court Wednesday approved the company's $38.2 million deal to sell and leaseback from Omega Healthcare Investors Inc.(OHI) seven nursing homes, a transaction that is an important part of Unison's plan. While the company had sought to close the deal by Dec. 15 in order to avoid changes to its terms, Omega has agreed to an extension and the sale/leaseback transaction is on track to close next month. (Federal Filings Inc. 11-Dec-98) VOICE IT WORLDWIDE: Taps Accounting Firm Ehrhardt, Keefe -------------------------------------------------------- The debtor, Voice It Worldwide, Inc. is seeking court authority to engage Ehrhardt, Keefe, Steiner & Hottman, PC to perform certain professional services including preparation of tax returns, and assisting the debtor with financial information, projections and 5tax planning. The firm will charge an hourly rate of $215 for Mr. Steven L. Schenbeck's work, and associates and other staff members will charge hourly rates ranging from $55 per hour to $165 per hour. WINTERSILKS INC: Seeks Authorization to Use Cash Collateral ----------------------------------------------------------- The debtor, Wintersilks, Inc. is seeking authority to use cash collateral, in which Graham Webb International Limited Partnership claims an interest, for the period from January 1, 1999 through April 30, 1999. The current cash collateral order will expire on December 31, 1998 and unless an order extending the use of cash collateral is entered, the debtor states that it will be without the funds available to continue to operate. The debtor has filed a plan of reorganization and a Disclosure Statement. A hearing on approval of the Disclosure Statement is scheduled to be heard on January 11, 1999. The debtor anticipates that the Disclosure statement will be approved. The debtor requests that the debtor be granted continued use of cash collateral through the anticipated date of distribution which is 30 days after the confirmation date. DLS CAPITAL PARTNERS: Bond Pricing For Week of 12/7/98 ------------------------------------------------------ Following are indicated prices for selected issues: Acme Metal 10 7/8'07 13 - 16 (f) Planet Hollywood 12 '05 44 - 48 Atel 0/14 1/2 '04 15 - 17 Royal Oak 12 3/4 '06 48 - 52 Amer Pad & Paper 13 '05 56 - 58 Samsonite 10 3/4 '08 84 - 86 Asia P & P 11 3/4 '05 69 - 71 Service Merchandise 9 '04 36 - 37 Boston Chicken 7 3/4 '05 4- 5 (f) Sunbeam 0 '18 11 - 12 Brazos 10 1/2 '07 6- 9 (f) Zenith 6 1/4 '11 16 - 18 (f) Brunos 10 1/2 '05 14 - 15 (f) Cityscape 12 3/4 '04 14 - 16 (f) E & S Holdings 10 3/8 '06 45 - 47 Globalstar 11 1/4 '04 74 - 75 Hechinger 9.45 '12 66 - 69 Hills 12 1/2 '02 51 - 52 Mobilemedia 9 3/8 '07 11 - 13 (f) Penn Traffic 9 5/8 '05 8 - 9 *********** 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 * * *