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/raid1/www/Hosts/bankrupt/TCR_Public/981224.MBXT R O U B L E D C O M P A N Y R E P O R T E R Thursday, December 24, 1998, Vol. 2, No. 250 Headlines AAMES FINANCIAL: May Borrow Additional $20 Million ABL: Out of Money - Files Bankruptcy ACME METALS: Alpha Tube Applies For Compromise ACME METALS: Announces DIP Financing AMERICAN PAD: Heim Named President of AMPAD Division AMERICAN RICE: Trustee Appoints 2nd Committee ARROW AUTOMOTIVE: Seeks Bar Date BIG RIVERS: Appellant's Proof Opening Brief BROTHERS GOURMET: Committee Objects to Extension CRIIMI MAE: Equity Committee Taps Attorneys DECORATIVE HOME: KMZ Seeks to Withdraw From Case FRETTER INC: Order Extends Exclusive Period FRETTER INC: Order Grants Standing To Creditors' Committee GALILEO CORP: Reports Fiscal Year 1998 Results GARDEN BOTANIKA: In A Fragile State GRAND UNION: Plan To Improve Existing Stores And Build New INTERACTIVE NETWORK: Files Chapter 11 Reorganization Plan KENNY ROGERS: Nathan's Reports Potential Acquisition MARTIN LAWRENCE: Estate Representative Fulfills Duties MCGINNIS PARTNERS: Seeks To Reimburse McGinnis Advisors NEW DEAL: Presents Order To Establish Bar Date NEXTWAVE TELECOM: Files Chapter 11 on December 23, 1998 ONE PRICE CLOTHING: Quarterly Report PARAGON TRADE: Committee Taps Investment Banker PEGASUS GOLD: Plans Confirmed PENN TRAFFIC CO: Asking Investors For Patience PHP HEALTHCARE: Trustee Names Creditor Panel RINCON ISLAND: Committee Replies to Baker Hughes ROGER HARLOFF: Creditors Could Approve $26 M Payback Plan STERLING CHEMICAL: Annual Meeting of Stockholders TIE COMMUNICATIONS: Chapter 11 Liquidating Plan WINDSOR ENERGY: Committee Replies to Baker Hughes WINTERSILKS INC: Order Establishes Claims Bar Date ********* AAMES FINANCIAL: May Borrow Additional $20 Million -------------------------------------------------- Aames Financial Corporation reports to the SEC that its revolving credit line secured by its interest-only strips has been amended to permit the Company to borrow up to an additional $20 million under that line. Neil B. Kornswiet, Aames' president and co-chairman, said, "The Company's liquidity needs typically peak in mid-month due primarily to our obligation as the servicer of the loans we securitize to advance delinquent interest to the securitization trusts at that time. Our ability to draw upon the revolving credit line has assisted us in meeting our December obligations." Cary H. Thompson, Aames chief executive officer, stated, "We are acutely aware that the Company's long-term liquidity needs require a more permanent solution, and we are taking steps to address this situation. We are continuing in our discussions with a private equity fund concerning a proposal for an up to $100 million equity investment in the Company, which we believe would provide that permanent solution." Thompson said that the Company has not yet reached an agreement with the potential investor, and, if an agreement were reached the closing of such an investment would be subject to certain conditions beyond the Company's control. He added that no assurance could be given that an agreement will be reached and, if reached, that the transactions contemplated by the agreement would be consummated. Thompson added, "The Company has not yet felt the effects of the recent improvement in the global markets, and access to the credit and capital markets is still severely restrained for the subprime home equity sector." According to the terms of the amended revolving line of credit, new borrowings would be available for a ten- business-day-period and are secured by interest-only strips with a book value far in excess of the borrowings. The interest-only strips are subject to mark-to-market valuation or may otherwise be deemed unacceptable, in the sole discretion of the lender. The Company's ability to draw upon this line against next January's servicing obligations is dependent upon the Company's execution of a definitive agreement with the private equity fund with which the Company is currently in discussions and certain other conditions. The Company also announced that in the light of ongoing discussions with the potential equity investor, the Company's annual meeting that had been scheduled for December 18, 1998 would be postponed to a later to-be- announced date. Aames Financial Corporation is a home equity lender, and currently operates 95 Aames Home Loan offices serving 33 states, including the District of Columbia. Its wholly owned subsidiary, One Stop Mortgage, Inc. currently operates 41 broker offices serving 46 states, including the District of Columbia, and 17 Retail Direct offices serving 11 states. ABL: Out of Money - Files Bankruptcy ------------------------------------ The women's American Basketball League, which is out of money, Tuesday announced it has halted operations for the season and has filed for protection under Chapter 11 of the federal bankruptcy code. The nine-team league had completed roughly a third of its season schedule. The ABL never had the financial stability given to the rival Women's National Basketball Association, which was buoyed by NBA money and built-in advertising advantages. ACME METALS: Alpha Tube Applies For Compromise ---------------------------------------------- Alpha Tube Corporation, debtor, seeks authority to compromise its account receivable claim in the amount of $167,696 against Peregrine US Inc. by accepting the offer contained in the Peregrine Companies' Debt Restructuring Agreement. Pursuant to the Peregrine Agreement, the debtor will receive up to 33% of the claim, or $55,339 from funding provided by General Motors. If the Peregrine Agreement is not approved, Alpha Tube will most likely recover nothing as Peregrine is unquestionably insolvent and all of their assets are encumbered. ACME METALS: Announces DIP Financing ------------------------------------ Acme Metals Incorporated (OTC Bulletin Board: AMIIQ), with bankruptcy court approval, has signed an agreement with BankAmerica Business Credit, Inc., a subsidiary of Bank of America National Trust & Savings Association, for post- petition debtor-in-possession financing. The agreement is a 24-month, $100 million, secured working capital facility. The Company believes such funds, together with current cash on hand will provide the liquidity for normal day-to-day operations while it reorganizes under Chapter 11. On September 28, 1998, Acme Metals, headquartered in Riverdale, Illinois, filed its voluntary petitions for reorganization under Chapter 11 after management determined action was required to preserve the operational strength and assets of the Company's businesses while their debt is restructured. Acme Metals Incorporated, through its operating subsidiaries, is a fully integrated producer of steel, steel strapping and strapping products, and welded steel tubing. Its common stock is listed on the Bulletin Board of the National Association of Securities Dealers under the symbol AMIIQ. AMERICAN PAD: Heim Named President of AMPAD Division ---------------------------------------------------- On December 2, 1998, American Pad & Paper Company (the "Company") issued a press release announcing that it has named James V. Heim as President of its AMPAD division. American Pad & Paper Company is a manufacturer and marketer of paper-based office products in North America. Company revenues in 1997 were $687 million. AMERICAN RICE: Trustee Appoints 2nd Committee --------------------------------------------- The United States Trustee, Richard W. Simmons appoints the following eligible creditors of the debtor, American Rice Inc. to the committee of unsecured creditors: Kern Industries, LLC 13000 E. Temple Ave. City of Industry, CA Poly Tex Fibers Corp. 9341 Baythorne Drive Houston, Texas GEM Management Ltd. PO Box 860 11 Bath St. St. Helier, Jersey Channel Islands, UK Imperial Trucking Co. PO Box 1468 Pearland, Texas Hagerty Advertising Group, Inc. 3611 Montrose Blvd. Houston, Texas Debtor's Counsel: Pachulski, Stang, Ziehl & Young PC 10100 Santa Monica Boulevard #1100 Los Angeles, California 90067 Jordan, Hyden, Womble & Clubreth, PC 500 North Water Street, Suite 900N Corpus Christi, TX Former Committee Members: C.M. Van Sillevoldt B.V. Union Pacific Railroad Company Debtor's Special Counsel: Vial, Hamilton, Koch & Knox LLP 1717 Main Street, Suite 4400 Dallas, Texas 75201-7388 Unsecured Creditors' Committee Counsel: Deborah Williamson Cox & Smith 112 E. Pecan St. Suite 1800 San Antonio, TX Debtor's Accountants and Financial Advisors: Donald M. deCamara/Bill Kacal Deloitte & Touche Consulting Group LLC 333 Clay Street Suite 2300 Houston, TX Financial Advisors to the Official Unsecured Creditors' Committee: Lisa Poulin Price WaterhouseCoopers LLP 2001 Ross Suite 1800 Dallas, Texas 75201-2997 Debtor's Crisis Manager/COO: Ted Stenger Jay Alix & Assoc. 575 Fifth Avenue New York, NY 10017 Examiner: Ben Floyd Floyd, Smith, Rios & Warlich 600 Travis Suite 2100 Houston, Texas 20 Largest Unsecured Creditors: Alpha-Jeddah Omar K. Alesayi & Co. Ltd. Fort Dearborn Agrichem International Holdings Union Pacific Sacramento Bag Southern Pacific CA Olive Committee Campbell Soup Fitch, Inc. Van Sillevoldt AC Nelson Imperial Trucking Poly Tex Fibers MCN Associates Anthony Frank Knippa & Kral GEM Inc. Tenzer Co. Kern Industries ARROW AUTOMOTIVE: Seeks Bar Date -------------------------------- Arrow Automotive Industries, Inc. is seeking entry of an order fixing February 15, 1999 as the deadline or "bar date" for the filing of proofs of claim or interest against the debtor and designating the form and manner of notice of the bar date in accordance with the proposed form of notice filed with this motion. BIG RIVERS: Appellant's Proof Opening Brief ------------------------------------------- The issue presented for review is whether Pacificorp Power Marketing Inc. timely and effectively amended its proof of claim No. 65. As of February 4, 1997, PPM states that the debtor, Big Rivers Electric Corporation was on notice that PPM's claim under a certain Marketing Agreement between the parties was not limited to the $423,948.95 owed for September 1-24, 1996 but included "additional amounts" that might be owing under the Marketing Agreement, as reflected in an audit to be conducted in accordance with the terms of the Marketing Agreement. PPM asserts that a fair and reasonable reading of PPM's original claim demonstrates that it is not limited to amounts owing under the Marketing Agreement for the period of September 1-24, 1996. Instead, the original claim expressly states that if an audit conducted in accordance with the Marketing agreement determines additional amounts are due under the Marketing Agreement, PPM will amend the claim, seek additional amounts due under the Agreement and seek administrative priority for some of such amounts. "Why else would PPM conduct an audit?" PPM states that its amended claim was submitted in a timely fashion and provides greater particularity than the original claim. As amended the claim would total over $820,000. BROTHERS GOURMET: Committee Objects to Extension ------------------------------------------------ The Official Committee of Unsecured Creditors objects to the debtors' motion to extend the exclusive periods during which the debtors may file a plan of reorganization and solicit acceptances thereof. The Committee states that the debtors cannot establish cause to extend the exclusive periods, and only the unsecured creditors have a real stake in the outcome and thus should have a voice in the process. The Committee also states that the cases are neither unusually large nor complex and thus the debtors cannot met their burden of showing cause to extend the exclusivity periods. CRIIMI MAE: Equity Committee Taps Attorneys ------------------------------------------- The official committee of equity security holders of Criimi Mae Inc. seek authority to retain and employ Covington & Burling as its attorneys. The law firm of Covington & Burling will give legal advice to the committee with respect to its powers and duties, with respect to administration of the debtor's estates, concerning the debtor's conduct and financial condition, and relating to tax, securities and corporate law issues. The firm will also give legal advice to the committee concerning the operations of the debtor's business, regarding any plan of reorganization, making reports to equity security holders, and with respect to applications for relief sought by the debtor. The firm is requesting a retainer of $100,000. The firm will charge its customary hourly rates ranging from $450 for a partner to $90-for a paraprofesional. DECORATIVE HOME: KMZ Seeks to Withdraw From Case ------------------------------------------------ The law firm of Katten, Muchin & Zavis, court-appointed co- counsel in the case of Decorative Home Accents, Inc. and its affiliated debtors seeks to withdraw as counsel to the debtors. KMZ's contact with the debtors and the debtors' management has diminished. KMZ attorneys have had only a limited role in advising the debtors with respect to their bankruptcy cases. Attorney John Weiss recently left Katten, Muchin and he was the attorney primarily involved in this case for the firm. Stutman, Treister & Glatt will continue to represent the debtors, and in the absence of KMZ's involvement in the liquidation of the debtor, there is substantial cause to withdraw as counsel. FRETTER INC: Order Extends Exclusive Period ------------------------------------------- In the case of Fretter, Inc., the court entered an order further extending the exclusive period to solicit acceptances to the plan of liquidation filed by the debtors on October 30, 1998. The debtors and Creditors' Committee shall have the exclusive right5 to solicit acceptances to the plan through and including January 31, 1999. FRETTER INC: Order Grants Standing To Creditors' Committee ---------------------------------------------------------- In the case of Fretter, Inc., the U.S. Bankruptcy Court entered an order with respect to an adversary proceeding commenced by Michigan National Bank. The court grants standing to the Creditors' Committee on behalf of the debtors' estates and substituted for the debtors to defend the estates' interests in the adversary proceeding. GALILEO CORP: Reports Fiscal Year 1998 Results ---------------------------------------------- Galileo Corporation (Nasdaq National Market:GAEO) today reported results for its fourth quarter and for the fiscal year ended September 30, 1998. For the fiscal year ended September 30, 1998, sales were $44.3 million versus $34.1 million for the previous fiscal year, an increase of 29.9%. The loss for the year amounted to $12.6 million, or $1.65 per share. The results for the year were impacted by one-time charges of $5.0 million, or $0.66 per share, for costs to reduce the carrying values of certain equipment and inventories to fair market value related to the previously announced termination of the Medical Endoscope Products business and a reduction of certain receivables to net realizable value. For fiscal year 1997, the Company incurred a loss of $11.2 million, or $1.63 per share. The fiscal year 1997 results included restructuring charges totaling $9.1 million for the reduction in carrying value of certain long-lived assets and reorganization costs. For the fourth quarter, revenues were $11.8 million versus $8.2 million in the fourth quarter of the previous fiscal year, an increase of 44.0%. The Company incurred a loss of $7.4 million, or $0.91 per share, which compares to a loss of $1.1 million, or $0.16 per share for the same period in fiscal year 1997. During the fourth quarter, the Company recorded one-time charges of $4.4 million, or $0.55 per share, for costs to reduce the carrying values of certain equipment and inventories to fair market value related to the previously announced termination of its Medical Endoscope Products business, and a benefit of $0.4 million, or $0.05 per share, from recovery of previously written-off accounts receivable. The Company is in violation of covenants under its bank loan agreement, and the bank has the right to accelerate the loan. The Company is attempting to negotiate revised financial covenants with the bank. However, there can be no assurance that a revised agreement can be reached. As a result of the default under the bank loan agreement and continuing losses, the Company's auditors have indicated that their report on the Company's fiscal year 1998 will include a going-concern qualification. The Company also announced the signing of an agreement with an investment entity formed by the principals of Andlinger & Company, Inc. under which that entity will purchase for $6.0 million in a private transaction 2,000,000 shares of the Company's common stock, together with warrants for an additional 2,000,000 shares. The warrants are exercisable for a period of 7 1/2 years at a price of $1.50 per share, subject to antidilution adjustment. At December 15, 1998, the Company had 8,071,250 shares of common stock outstanding. Consummation of the transaction is subject to a number of conditions, including obtaining waivers and amendments under the Company's bank loan agreements and the issuance of a waiver by The Nasdaq Stock Market of the requirement for shareholder approval of the transaction. Following completion of the sale, the Company's board of directors would be enlarged to seven members, of which three would be designated by the purchaser including the Chairman. In addition, certain specified transactions, such as mergers, acquisitions, divestitures and financings, would require the consent of five directors. Prior to entering into this transaction, the Company's board of directors received an opinion from its financial advisor, Needham & Company, Inc., as to the fairness from a financial point of view of the consideration to be received by the Company in the investment. Andlinger & Company is a twenty- year old private investment company with offices in Tarrytown, New York, Brussels, Belgium and Vienna, Austria. As a result of continuing losses in some of its businesses, the Company announced in the first quarter of fiscal year 1999, ending December 31, 1998, that it had implemented further cost reduction measures, consisting principally of reductions in staffing at its Sturbridge, Massachusetts facility. Additionally, the Company terminated operations of its Telecommunications business and is seeking buyers for this business. The Company anticipates continuing operating losses through the first quarter of fiscal year 1999, which losses include a charge for the reduction of carrying values of certain long-lived assets of $1.6 million, or $0.20 per share, and severance and other consolidation costs of $1.4 million, or $0.17 per share. Galileo, along with its wholly owned subsidiary, Optical Filter Corporation, develops, manufactures and markets products based on its core optical and photonic technologies for applications in medical products and instruments, analytical instruments and office equipment. Leisegang Medical, Inc., a wholly-owned subsidiary, develops, manufactures, and markets women's health-related medical products. GARDEN BOTANIKA: In A Fragile State ----------------------------------- The Seattle Post-Intelligencer quotes the chief executive of Garden Botanika, the Redmond-based bath and beauty aids chain as saying the 274-store chain is "in a fragile state," and that a bankruptcy filing is possible, depending on holiday sales. Some store closings are planned after Christmas, and the stock that once traded for $35 a share in 1996 was trading for 41 cents last week. Copyright 1998 the Columbian Publishing Co. The Columbian (Vancouver, WA.) GRAND UNION: Plan To Improve Existing Stores And Build New ---------------------------------------------------------- The Times Union reports on December 15, 1998 that the Grand Union Co. is heightening the competition in the supermarket industry with a company wide plan to expand and improve existing stores and to build new stores over the next several years. Upgraded stores will give shoppers here and throughout the Northeast bigger and better meat and produce departments, more natural foods, and a wider selection of goods in the dairy, frozen foods and other categories, said Gary Philbin, president and chief merchandising officer in a phone interview from company headquarters in Wayne, N.J. Grand Union was on the cutting edge of such supermarket merchandising trends a few years ago, but then progress was stalled when the company ran into financial trouble, Philbin said. But now, Grand Union has emerged from bankruptcy and stabilized its financial position, Philbin said. That will give the company the cash -- $70 million a year for a couple of years -- to plow into more contemporary and better-stocked stores, Philbin said. The money literally gives the 222-store chain "an opportunity once again to show (competitors) how to run a food market," he said. Philbin said the second part of his title, chief merchandising officer, underlines just how serious Grand Union is about improving its looks to shoppers. It's more common in the supermarket industry for a vice president to be in charge of merchandising, he said. In its northern division, Grand Union will probably build four to five new stores over the next two years, ranging in size from 35,000 square feet to 55,000 square feet, significantly larger than the typical store size in upstate New York of 27,000 square feet. Grand Union will extensively remodel another 15 to 18 stores, said Philbin. Those renovations may include limited retooling of existing space, or range up to enlargements of other stores, accompanied by complete revamping of the floor space usage, according to the company. INTERACTIVE NETWORK: Files Chapter 11 Reorganization Plan --------------------------------------------------------- Bruce Bauer, Chief Executive Officer of Interactive Network, announced today that the Company had filed a plan of reorganization in its pending Chapter 11 bankruptcy proceeding that provides for payment to all the Company's creditors in full on their allowed claims, retention by shareholders of their shares in the Company, the conversion by the Company's principal secured creditors/investors (TCI,NBC, Motorola and Sprint) of approximately $39,000,000 in secured debt (including accrued interest) into approximately 7,800,000 shares of the Company's common stock, at a conversion price of $5 per share, and the release by those secured creditors of their liens on the Company's assets, including its patent portfolio. The Company expects its Chapter 11 plan to be confirmed in February 1999, shortly after which the Company will receive $10,000,000 in cash pursuant to a Settlement Agreement entered into in July 1998 with its secured creditors/ investors who hold the Company's secured debt that is being converted into common stock. The Company estimates that approximately 70% of this $10,000,000 payment will be needed to pay the Company's unsecured creditors. The Company intends to contest certain claims of creditors, including the unsecured claim of the Company's former Chief Executive Officer, David Lockton, who is the Company's largest unsecured creditor. Mr. Bauer also announced that the California Superior Court in San Mateo County had entered an order at the Company's request, declaring David Lockton's call for a special shareholders' meeting to be held on December 30, 1998 ineffective and canceled, and that it was in the best interests of shareholders to set a new meeting date of March 31, 1999 to elect directors. Shareholders of record on March 1, 1999 will be entitled to vote at the March 31, 1999 meeting. The Company is in the process of preparing current audited financial statements and expects to mail proxy material and an annual report to its shareholders in early March, 1999. In the meantime, once its Chapter 11 plan of reorganization is confirmed and its assets are released from the liens of its secured creditors, the Company expects to be able to move vigorously to exploit the value of its patent portfolio. KENNY ROGERS: Nathan's Reports Potential Acquisition ---------------------------------------------------- Nathan's Famous, Inc. (NASDAQ:NATH) reported on December 23 that it has agreed to support the Joint Plan of Reorganization of the Official Committee of Franchisees of Roasters Corp. and Roasters Franchise Corp., operators of Kenny Rogers Restaurants. If the Plan is approved, Nathan's will acquire all of Roasters Corp. and Roasters Franchise Corp.'s intellectual property rights, including trademarks, recipes and franchise agreements, in exchange for $1,000,000 in cash. Nathan's support of the Plan is subject to certain conditions, including Nathan's due diligence and at least 30 Kenny Rogers franchisees agreeing to Nathan's assumption of their franchise agreements. The Franchisees' Plan being considered by the Bankruptcy Court is in addition to the Plan that has been filed by Roasters Corp. and Roasters Franchise Corp. There can be no assurance that the Franchisees' Plan will be confirmed. Wayne Norbitz, the President of Nathan's stated: "We very much appreciate the value of the Kenny Rogers brand and look forward to working with participating Kenny Rogers franchisees to advance the system." The Nathan's Famous retail system is currently comprised of 26 Company-owned units, 166 franchised or licensed units, and over 400 Branded Product points of distribution, located in twenty-nine states, the District of Columbia and two foreign countries, featuring Nathan's world famous all- beef hot dogs. MARTIN LAWRENCE: Estate Representative Fulfills Duties ------------------------------------------------------ Duke Salisbury, Estate Representative for the bankruptcy estate of Martin Lawrence Limited Editions states that he has fulfilled his duties under the consolidated plan of reorganization of the debtor. MCGINNIS PARTNERS: Seeks To Reimburse McGinnis Advisors ------------------------------------------------------- The debtors, McGinnis Partners Focus Fund and affiliated debtors filed a motion for authority to reimburse expenses of McGinnis Advisors, LP under management agreements. McGinnis Advisors performs mangement and investment advisory services for the debtors, including formulation of investment strategy consistent with the debtors' offering documents, supervision of investment and reinvestment of funds, monitoring of investment performance, negotiation with securities brokers and issuers of investment securities, and various other investment and management functions. The debtor request authority to reimburse the actual and reasonable expenses incurred by McGinnis Advisors. The debtors estimate a minimum of $40,000 per month in reimbursable expenses in the future. The total expenses for August September and October were $323,730. NEW DEAL: Presents Order To Establish Bar Date ---------------------------------------------- New Deal Projects, LLC, debtor, presents a proposed order establishing a Bar Date fixing the time within which proofs of claim may be filed. The debtor proposes February 26, 1999 as the Bar Date. NEXTWAVE TELECOM: Files Chapter 11 on December 23, 1998 ------------------------------------------------------- Debtor: NextWave Telecom Inc. 3 Skyline Drive Hawthorne, NY 10532 Type of business: Manufacturer of power supplies Court: Southern District of New York Case No.: 98-23303 Filed: 12/23/98 Chapter: 11 Debtor's Counsel: Deborah Lynn Schrier-Rape Andrews & Kurth, LLP 1717 Main Street Suite 3700 Dallas, Texas 75201 (214) 659-4520 Total Assets: $12,885,000 Total Liabilities: $322,754,000 No. of shares of common stock Series A: 36,245,031 Series B: 155,745,055 20 Largest Unsecured Creditors: Name Nature Amount ---- ------ ------ LG InfoComm Loan $35,000,000 Hughes Network Loan $35,000,000 Hanareum Banking Corp. Loan Agreement $34,916,666 Continental Casualty $22,000,000 Cerebrus Partners LP $22,400,000 CIBC WG Argosy Convertible Bridge Note $15,000,000 M.D. Sass Re/Enterprise Partners LP " $8,376,000 CDMA California Partners Loan $10 Million Sony Electronics, Inc. Loan $10 Million LG Telecom Ltd. Loan $10 Million Bastion Capital Fund Convertible Bridge Note $10 Million Hamilton Partners LP Convertible Bridge Note $5 Million Reltec Loan $5 Million Lindermann PCS Trade Debt $5 Million Bay Harbor Loan $4,950,000 Triumph-California,LP Convertible Bridge Note $3.5 Million Triumph-Connecticut, LP " $3.5 Million Yuyang Telecom Co. Loan $3 Million TCW Shared Oppty. Fund II Conv. Bridge Note $3 Million LCC LLC Trade Debt $9,576,497 MD Sass Re/Enterprise Int'l. Conv.Bridge Note $8,376,000 On June 8, 1998 the following related entities filed petitions for protection under Chapter 11: NextWave Personal Communications Inc., NextWave Partners, Inc., NextWave Power Partners Inc., and NextWave Wireless Inc. - all wholly owned subsidiaries of the debtor. ONE PRICE CLOTHING: Quarterly Report ------------------------------------ One Price Clothing Stores Inc. reports to the SEC that net sales for the quarter ended October 31, 1998 increased 9.2% to $69,732,000 compared to $63,845,000 for the quarter ended November 1, 1997. Net sales for the nine-month period ended October 31, 1998 increased 8.4% to $248,031,000 compared to $228,878,000 for the same time period in 1997. Comparable store sales for the third quarter of fiscal 1998 increased 12.1% compared to the same quarter last year. Comparable store sales for the nine-month period ended October 31, 1998 increased 7.1% compared to the same time period in 1997. The company closed 45 under-performing stores during the first nine months of fiscal 1998. PARAGON TRADE: Committee Taps Investment Banker ----------------------------------------------- On December 3, 1998, The Official Committee of Equity Security Holders of Paragon Trade Brands, Inc. filed an application for approval of the employment Chanin and Company LLC as its investment banker. The Equity Committee seeks to employ Chanin for a flat monthly fee of $75,000 plus payment of a transaction fee. The request that the employment be approved nunc pro tunc is denied. Employment of Chanin is approved effective December 3, 1998. PEGASUS GOLD: Plans Confirmed ----------------------------- Pegasus Gold Inc. (PSGQF - OTC B.B.) reports that the United States Bankruptcy Court, District of Nevada has confirmed the Second Amended Joint Plan of Reorganization for the three operating companies (Diamond Hill Mining, Inc., Florida Canyon Mining, Inc., and Montana Tunnels Mining, Inc.) to form Apollo Gold Corporation. The Court also confirmed the Second Amended Joint Liquidating Plan of Reorganization for Pegasus Gold Inc. and Pegasus Gold Corporation. Harrison J. Goldin has been appointed liquidating trustee for PGI and PGC. As disclosed in the amended Disclosure Statements for the Plan of Reorganization and the Liquidating Plan dated September 11, 1998, shareholders owning common shares of Pegasus Gold Inc. receive nothing under the Liquidating Plan and nothing under the Plan of Reorganization to form Apollo. The effective date for consummation of the Plans will be on or about January 15, 1999. PENN TRAFFIC CO: Asking Investors For Patience ---------------------------------------------- With cash flow falling, Penn Traffic Co. is asking its investors for more patience in dealing with its $1.4 billion debt, a move that could lead to bankruptcy court. The Syracuse-based supermarket chain says it will meet informally with its major bondholders -- insurers and other investors that have lent the company money -- to talk about restructuring the debt. "We're going to come out of this a much stronger company," said Joseph Fisher, president and chief executive officer. There are no plans to close any P&C stores or lay off any workers in central New York, where the company has about 7,000 employees, Fisher said. Penn Traffic operates 247 supermarkets in New York, Pennsylvania, Ohio and West Virginia under five trade names: P&C Foods, Big Bear, Big Bear Plus, Bi-Lo Foods, and Quality Markets. Chapter 11 bankruptcy protection remained a possibility, depending on the outcome of the informal negotiations. Chapter 11 frees a company from the threat of creditors' lawsuits while it reorganizes its finances. "They are only at the beginning of the process," said Sherwyn T. Carr, a spokeswoman for the company. "They are trying to come up with a consensual agreement between management and bondholders. They are trying to figure out the best way to do that." The announcement Thursday sent the company's stock plummeting. In over-the-counter trading, it closed at $1.09, down 47 cents -- a drop of 30 percent. Results for the third quarter also were not rosy. The company, which operates P&C stores in central New York, said it lost $41 million, or $3.88 a share. During the same period a year ago, it lost $13.5 million, or $1.25 a share. Analyst Theodore Bernstein, who follows Penn Traffic for Grantchester Securities, called the third-quarter performance "very ugly." He said the company's talks with investors could set the stage for a prepackaged Chapter 11 bankruptcy filing. In a prepackaged deal, the debtor company and most creditors work out a repayment plan before they get to court. That way, a company can emerge from Chapter 11 relatively quickly -- sometimes in a matter of weeks. Bernstein said the company's move to restructure was a long time coming. Penn Traffic has lost more than $180 million over the last three years. The company is in a bind because its cash flow is dropping precipitously, making it hard to keep up with debt payments, Bernstein said. The company had a cash flow of $16.1 million in the third quarter, down from $39.1 million in the third quarter of 1997, a decrease of nearly 59 percent. "Penn Traffic is up against some very good, large, well- capitalized competitors in all of its markets," Bernstein said. "Penn Traffic hasn't been as successful at executing at the store level as its competitors, and people are shopping elsewhere." Penn Traffic also announced Thursday that it would close 21 Bi-Lo supermarkets in Pennsylvania. That is expected to result in about 550 layoffs.(Copyright 1998 Times Union- 12/12/98) PHP HEALTHCARE: Trustee Names Creditor Panel -------------------------------------------- The U.S. Trustee has appointed an official committee of PHP Healthcare Corp.'s unsecured creditors. The panel consists of indenture trustee IBJ Schroder Bank & Trust Co., Helix Convertible Opportunities L.P., Horizon Blue Cross/Blue Shield of New Jersey, University of Maryland Medical System, Cardinal Health Inc., Laboratory Corporation of America, and Littler Mendelson P.C. Subject to court approval, the committee has retained Cole Schotz Meisel Forman & Leonard P.A. as counsel and Arthur Andersen LLP as financial advisor. (The Daily Bankruptcy Review and ABI Copyright c December 23, 1998) RINCON ISLAND: Committee Replies to Baker Hughes ------------------------------------------------ The Official Committee of Unsecured Creditors of Rincon Island Limited Partnership file a reply to Baker Hughes Inc.'s opposition to a motion seeking to extend exclusivity. The Committee states that Baker Hughes asserts that rather than enter into a reorganization plan, the debtors have entered into a plan which provides for the sale and liquidation of Rincon Island's assets. The Committee states that it is not going to stand by and watch the debtors liquidate their assets at a fire sale as Baker Hughes asserts. Further, the Committee states that Baker Hughes inaccurately represents statement of counsel for the Committee. The Committee states that it has been working diligently for the last several months to see that the debtors put together a plan of reorganization that provides for the payment in full to unsecured creditors. The Committee is hopeful to enter into an agreement with the debtor to allow the debtors a period of time within which to recapitalize their business. To the extent that Baker Hughes wants access to information regarding the debtors' reorganization efforts, the debtors have informed Baker Hughes that upon the execution of a confidentiality agreement such information will be provided. ROGER HARLOFF: Creditors Could Approve $26 M Payback Plan --------------------------------------------------------- Manatee County, Fla.-based tomato grower and packinghouse owner Roger Harloff, who runs five businesses;Roger Harloff Farms, Roger Harloff Packing Inc., Classie Tomato Inc., Classie Sales Inc. and Classie Plants Inc.; could be forced into a $26 million plan on Dec. 31 to payback creditors, according to the Bradenton Herald. Harloff, who filed chapter 11 in March, owns roughly 9,000 acres in eastern Manatee County, two tomato packinghouses and 23 greenhouses. If the plan is passed, Harloff would form a limited liability corporation called RHLC to sell the greenhouses, land and packinghouses to an investor group for $17 million. The creditors claim to be owed $23 million, and close to 400 unsecured creditors who had claims totaling from $9 to $12 million may receive 75 percent of what they are owed. The matter will go before Chief U.S. Bankruptcy Judge Alexander Paskay in Tampa on Jan. 20. (ABI 23-Dec-98) STERLING CHEMICAL: Annual Meeting of Stockholders ------------------------------------------------- An Annual Meeting of Stockholders of Sterling Chemicals Holdings, Inc. will be held in the Granger A Room at the DoubleTree Hotel, 400 Dallas, Houston, Texas at 9:00 A.M., Houston time, on Wednesday, January 27, 1999 for the following purposes: 1. To elect nine directors to serve until the Annual Meeting of Stockholders in 2000 and until their successors have been duly elected and qualified; 2. To ratify and approve the appointment of Deloitte & Touche LLP as the independent accountants of the Company for the fiscal year ending September 30, 1999; and TIE COMMUNICATIONS: Chapter 11 Liquidating Plan ----------------------------------------------- The Debtor, Tie/Communications, Inc. proposes a plan of liquidation for the debtor's bankruptcy estate. Administrative Expenses total $84,000 and will be paid in full on the Effective Date. Secured Claims are all impaired. The debtor does not believe that there are any true secured claims in the case. General Unsecured Claims total $39,101,225. They will receive prorata distributions of between 41% and 47% of their claims. The plan of liquidation will be funded by the Liquidation Proceeds. Upon completion of liquidation the company will dissolve. WINDSOR ENERGY: Committee Replies to Baker Hughes ------------------------------------------------- The Official Committee of Unsecured Creditors filed a reply to the opposition filed by Baker Hughes, Inc. to a motion for an order extending exclusivity. The Committee states that Baker Hughes asserts that rather than enter into a reorganization plan, the debtors have entered into a plan which provides for the sale and liquidation of Rincon Island's assets. The Committee states that it is not going to stand by and watch the debtors liquidate their assets at a fire sale as Baker Hughes asserts. Further, the Committee states that Baker Hughes inaccurately represents statement of counsel for the Committee. The Committee states that it has been working diligently for the last several months to see that the debtors put together a plan of reorganization that provides for the payment in full to unsecured creditors. The Committee is hopeful to enter into an agreement with the debtor to allow the debtors a period of time within which to recapitalize their business. To the extent that Baker Hughes wants access to information regarding the debtors' reorganization efforts, the debtors have informed Baker Hughes that upon the execution of a confidentiality agreement such information will be provided. WINTERSILKS INC: Order Establishes Claims Bar Date -------------------------------------------------- Based upon the motion of the debtor, Wintersilks, Inc., it is ordered that the last date to file claims in the Chapter 11 proceeding shall be January 22, 1999. ********** 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. 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