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/raid1/www/Hosts/bankrupt/TCR_Public/990224.MBXT R O U B L E D C O M P A N Y R E P O R T E R Wednesday, February 24, 1999, Vol. 3, No. 37 Headlines AMERICAN RICE: Emergency Motion to Extend Exclusivity AMERICAN RICE: Seeking Emergency Extension For Leases AR ACCESSORIES: Wallet Work's Plan Approved AUSTRALIS HOLDINGS: Hearing For Order Converting Case BMJ MEDICAL: Order Extends Time To Assume/Reject Leases BROTHERS GOURMET: Considering Two Bids CENTENNIAL COAL: Hearing To Consider Disclosure Statement COMMERCIAL FINANCIAL: U.S. Trustee Objects to Professionals CROWN BOOKS: Seeks Extension To Exclusive Periods EIP MICROWAVE: Ceased Operations - Discussing Bankruptcy EQUALNET CORP: Hearing To Consider Disclosure Statement HIP HEALTH PLAN: Judge Okays Closing of 23 Health Centers HOME HEALTH: Posts Results of Operations INTERSCIENCE COMPUTER: Announces First Quarter Results KENNY ROGERS: Court Approves Nathan's Famous Acquisition LEVITZ FURNITURE: Seeks To Extend Exclusivity MAXICARE HEALTH: Posts Fourth Quarter Results MOBILEMEDIA: Mails Supplemental Disclosure To Class 6 QUADRAX CORP: Order Grants Extension To File Plan RAND ENERGY: Requests Hearing on Bid Procedures READING CHINA: Taps R.F. Stengel As Interim Management READING CHINA: Seeks Extension of Exclusivity SATO KOGYO: Seeking Loan Forgiveness THE J.PETERMAN: It Appears To Be Over USN COMMUNICATIONS: Case Summary & 20 Largest Creditors ********* AMERICAN RICE: Emergency Motion to Extend Exclusivity ----------------------------------------------------- The debtor, American Rice, Inc. is seeking a court order to extend the time deadlines within which the debtor has the exclusive right to file a plan of reorganization and to obtain acceptances thereof until March 31, 1999 and June 30, 1999, respectively. The debtor states that this is not a typical case, that this case involves over 700 employees in numerous countries, annual sales exceeding $300 million and well over $200 million in debt. The debtor has already sold its olive division and settled the Tenzer litigation. The debtor has established financing agreements with its secured creditors and has also responded to requests for adequate protection. Given the size and complexity of this case, an intelligible, constructive and consensual plan of reorganization could not feasibly be filed within the 120 day period established by the code. AMERICAN RICE: Seeking Emergency Extension For Leases ----------------------------------------------------- American Rice Inc. files a request for emergency consideration of the debtor's emergency motion to further extend time for the debtor to assume or reject unexpired nonresidential real estate leases. The debtor used its previous extension to address issues of the bankruptcy, and the debtor is currently in the process of negotiating a consensual plan of reorganization with its creditors. However, the process is not completed and the debtor has not made final determinations concerning assumption or rejection of the leases. The debtor states that it cannot reorganize if it loses the ability to assume the leases. The extension motion must be heard prior to February 28, 1999 to avoid a potential forfeiture. The debtor does not expect opposition to the extension motion. AR ACCESSORIES: Wallet Work's Plan Approved ------------------------------------------- AR Accessories Group Inc.'s subsidiary Wallet Works Inc. has won confirmation of its amended liquidating reorganization plan over the objection of the U.S. Trustee acting in the case. The U.S. Bankruptcy Court in Milwaukee at a hearing last week overruled in part the Trustee's objection, finding that the plan does meet the best interest of creditors test. The Trustee argued that Wallet Works must meet its burden of proof that creditors are receiving as much under the plan as they would receive in a Chapter 7 liquidation. The Trustee also took issue with the plan's release provisions, which purport to limit the liability of the disbursing agent, professionals, officers and directors and others. (The Daily Bankruptcy Review and ABI Copyright c February 23, 1999) AUSTRALIS HOLDINGS: Hearing For Order Converting Case ----------------------------------------------------- Upon application of the U.S. Trustee for the Southern District of New York, a hearing will be held on March 18, 1999 at 10:00 AM, for an order converting the case of IN RE: Australis Holdings Pty Limited AKA/DBA Australis Holdings Ltd (Public) Australis Media Holdings Ltd Regent Communications to a case under Chapter 7 of the Bankruptcy Code. In the alternative the Trustee is seeking dismissal of the Chapter 11 case. BMJ MEDICAL: Order Extends Time To Assume/Reject Leases ------------------------------------------------------- The court entered an order in the case of BMJ Medical Management, Inc., et al., extending the period within which the debtors may assume or reject the Leases to and including July 15, 1999. BROTHERS GOURMET: Considering Two Bids -------------------------------------- Brothers Gourmet Coffee Inc. is considering two bids for the company as part of a bankruptcy court-authorized auction held Wednesday. Brothers Chief Executive Officer Donald Breen declined Friday to identify the prospective buyers, who were required to submit bids of at least $24 million. "Two look very close," Breen said. "They're not apples to apples, so the company is evaluating them." One group that bid for Brothers is headed by former Sunbeam executives Lee Griffith and Kevin McBride, Griffith confirmed Friday. He was president of Sunbeam's household products division and McBride, the vice president. Both left the company last summer when Albert J. Dunlap was fired as the company's chief executive officer. Officials at Mother Parker's Coffee & Tea of Mississauga, Ontario, one of Canada's largest coffee distributors, declined to comment on wire-service reports that it was among the bidders. Brothers filed for Chapter 11 bankruptcy reorganization Aug. 27, listing $41 million in debts and $29.5 million in assets. The company is one of the largest wholesalers of roasted gourmet coffee in the country, but has had only one profitable year, 1994, since it went public in 1993. For the second quarter ended June 30, Brothers posted losses of $64 million on $13.9 million in sales. The bulk of the losses, about $50 million, came from the loss of "good will" as the company lost customers and cut back on promotional contracts. Breen said the company's deadline for accepting a bid is a March 15 hearing date in bankruptcy court. The company has 220 employees nationwide, including between 40 and 50 at its Boca Raton headquarters. (Palm Beach Post - 02/20/99) CENTENNIAL COAL: Hearing To Consider Disclosure Statement -------------------------------------------------------- A hearing will be held on March 19, 1999 at 9:30 AM in the U.S. Bankruptcy Court, 824 Market Street, 6th Floor, Wilmington, Delaware to consider the adequacy of the information contained in the Disclosure Statement filed by the debtors, Centennial Coal, Inc., Centennial Resources, Inc., C R Mining Company and B-Four, Inc. COMMERCIAL FINANCIAL: U.S. Trustee Objects to Professionals ----------------------------------------------------------- Joel Pelofsky, united States Trustee in the case of Commercial Financial Services, Inc., CF/SPC NGU, INC., debtors, objects to the employment by the Official Committee of Asset Backed Security Holders of Gable and Gotwals as attorneys for the committee. The Trustee alleges that the firm has a conflict of interest that renders the firm not "disinterested" as required by the Bankruptcy Code. According to the trustee, the firm is conflicted by virtue of its relationship and representation of NationsBank, both a member of the committee and a party involved in ongoing litigation with the debtor over disputed funds seized on the eve of bankruptcy. Even through the firm has agreed not to participate in any matter on behalf of the Committee which is in direct conflict with and is adverse to the interests of NationsBank does not cure the conflict. The Trustee also objects to the employment of Houlihan Lokey Howard & Zukin, Inc. as financial advisors for the committee. The Trustee states that there is inadequate disclosure to determine whether the proposed professional has an impermissible conflict of interest with the debtors. CROWN BOOKS: Seeks Extension To Exclusive Periods ------------------------------------------------- Crown Books Corp. is seeking a 90-day extension of its exclusive periods in which to file a plan and solicit acceptances in order to review lease obligations and over 600 claims filed by the bar date, and "to explore and develop various restructuring alternatives with maximum creditor support." The motion seeks the extension to May 11 and July 11, respectively. (The Daily Bankruptcy Review and ABI Copyright c February 23, 1999) EIP MICROWAVE: Ceased Operations - Discussing Bankruptcy -------------------------------------------------------- EIP Microwave, Inc. announced that it has ceased operations and is discussing the Company's bankruptcy options with its legal counsel. EIP Microwave manufactured microwave and radio frequency test and measurement instruments, which are predominantly used in the telecommunications, wireless and defense industries. The Company's common stock trades on the OTC Bulletin Board under the symbol "EIPM". EQUALNET CORP: Hearing To Consider Disclosure Statement ------------------------------------------------------- A disclosure statement and plan under chapter 11 of the Bankruptcy Code was filed on January 8, 1999 by debtor Equalnet Corporation. The hearing to consider approval of the disclosure statement will be held at the U.S. Bankruptcy Court, 515 Rusk Avenue Houston, Texas 77002, Room 10A, 10th Floor, March 1, 1999 at 2:30 PM. HIP HEALTH PLAN: Judge Okays Closing of 23 Health Centers --------------------------------------------------------- A state judge on Friday approved a plan to close the 23 health centers operated by HIP Health Plan of New Jersey by March 31, but he allowed sick patients and pregnant women to continue treatment with their own doctors. Attorneys for the Department of Banking and Insurance spelled out the state's plan to smooth the transition of HIP's policyholders to new insurance companies and ensure proper care for its sickest patients. But Judge Jack L. Lintner left open the possibility that the insolvent HMO may survive. He scheduled a hearing for March 2 to hear opposition from HIP's board of directors to the state's liquidation plan. New Jersey HIP's New York affiliate, HIP Health Plans, is expected to present its own proposal to regain control of the HMO and restore it to solvency at that hearing. The state declared HIP insolvent in November, after the HMO's debts reached $120 million. The Insurance Department rejected three bids from potential buyers and ordered the state's 20 other HMOs to accept HIP's members. The judge opened Friday's hearing-in a standing-room-only courtroom-by noting that he was mindful of important precedents he would set as the state plans the first liquidation of a health maintenance organization under current law. Under the state's plan, each of HIP's New Jersey health centers will close by March 31, with six - including the Paramus center on Eisenhower Drive - closing as early as Feb. 28. The Paramus site on Sears Drive will remain open for administration until April 15, Deputy Attorney General Josh Lichtblau said, but would close to patient care on March 31. As the six smaller health centers close, their doctors and patient records will be transferred to the larger centers. The state is soliciting bids from medical records companies for safe and accessible storage of any records that patients do not pick up by the closing date. Special provisions are made for patients with critical health needs, including those hospitalized at the time the plan shuts down; those with chronic or acute health conditions; and women in the second or third trimester of pregnancy. Insurance Department staff members are contacting each of these patients individually to guide them through enrollment in a new insurance company. In addition, in an unprecedented arrangement, doctors caring for these patients at the time they switch to new insurance will be allowed to continue caring for them, even if the doctors are not participants in the new HMO. The new HMO would be compelled to pay the doctors its rates. Twenty hospitals, including Pascack Valley Hospital, Hackensack University Medical Center, and St. Mary's Hospital in Passaic, signed agreements to continue treating HIP patients until March 31, although emergency patients can go to any hospital. An estimated 85 percent of HIP network doctors who treat patients outside the health centers also are willing to continue seeing them, said Barry Massey, the deputy rehabilitator for HIP. These doctors and hospitals have agreed to accept 75 percent of HIP's normal fees. The state prohibited any balance-billing of patients for fees that HIP does not pay, and the judge stated his support for that position. (Record New Jersey - 02/20/99) HOME HEALTH: Posts Results of Operations ---------------------------------------- Home Health Corporation of America, Inc. (Nasdaq: HHCAC) reported net revenues and results of operations for the three and six months ended December 31, 1998. Net revenues were $28.7 million for the second quarter of fiscal 1999 compared to $45.7 million for the second quarter of fiscal 1998. Significant factors contributing to the $17.0 million, or 37.2%, decrease in net revenues included (i) implementation effective July 1, 1998 of the Medicare Interim Payment System (the "IPS") for all of the Company's Medicare cost-reimbursed nursing agencies which decreased the Company's per-visit reimbursement; (ii) a 44.9% decrease in Medicare nursing visits during this period compared to the prior year resulting from a decline in physician referrals in the marketplace; (iii) a 25% reduction in Medicare oxygen reimbursement which was effective January 1, 1998; (iv) decreases in net product revenues due to reductions in Medicare visits reducing cross-selling opportunities; (v) decreases in net product revenues due to a reduction in sales staff as part of the Company's fiscal 1998 restructuring plan; and (vi) a $4.1 million reduction in Medicare nursing services net revenues recorded in connection with notices received regarding retroactive adjustments to prior year Medicare cost reports and changes in estimated outcomes of prior year cost report adjustments under appeal with Medicare. Net loss and diluted loss per share were ($44,939,000) and ($4.60), respectively, for the three months ended December 31, 1998 compared to net loss and diluted loss per share of ($23,856,000) and ($2.60), respectively, for the comparable prior year period. Net revenues were $62.6 million through the second quarter of fiscal 1999 compared to $92.8 million through the second quarter of fiscal 1998. Net loss and diluted loss per share were ($67,021,000) and ($6.86), respectively, for the six months ended December 31, 1998 compared to net loss and diluted loss per share of ($21,828,000) and ($2.38), respectively, for the comparable prior year period. Home Health Corporation of America, Inc. is a leading provider of comprehensive home health care services and products, delivering nursing and related patient services, respiratory therapy services, infusion therapy services and durable medical equipment. The Company currently owns and operates 44 branch locations in Pennsylvania, New Jersey, Delaware, Maryland, Florida, New Hampshire, Massachusetts, Illinois and Texas. INTERSCIENCE COMPUTER: Announces First Quarter Results ------------------------------------------------------ Interscience Computer Corp. (OTC BB:INTRQ) Tuesday announced net income of $160,184; 3 cents per share, for the quarter ended Dec. 31, 1998, all of which was generated from continuing operations. In the comparable period for 1997, the company had a loss from continuing operations of $340,503; 13 cents per share. During the quarter, the company completed its reorganization and on Dec. 16, 1998 the bankruptcy court issued a final decree closing the bankruptcy proceedings that began on March 6, 1997. Also, during the quarter, the company reduced its loan balance with the principal lender by approximately $658,000. The remaining principal balance is approximately $200,000, down from $2,250,000 as of fiscal year end 1997. Walter Kornbluh, the company's president, stated that "after extensive restructuring, the company's operations are now on a positive cash flow basis. The company continues to look for possible acquisitions to increase shareholder value." KENNY ROGERS: Court Approves Nathan's Famous Acquisition -------------------------------------------------------- On February 22, 1999, Nathan's Famous, Inc. (NASDAQ:NATH) reports that the U.S. Bankruptcy Court for the Middle District of North Carolina, Durham Division, has confirmed the Joint Plan of Reorganization of the Official Committee of Franchisees of Roasters Corp. and Roasters Franchise Corp., operators of Kenny Rogers Roasters Restaurants. Through the Plan of Reorganization, 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 $1,250,000 in cash. Nathan's completion of the transaction, which is currently expected to occur on April 1, 1999, is subject to certain conditions outlined in the Plan of Reorganization. Wayne Norbitz, President of Nathan's stated: "We are quite pleased with the outcome and are anxious to commence working with participating Kenny Rogers' franchisees upon completion of the transaction." The Nathan's Famous retail system is currently comprised of 25 Company-owned units, 164 franchised or licensed units, and over 500 Branded Product points of distribution, located in twenty-nine states, the District of Columbia and two foreign countries. Additionally, Nathan's had previously entered into a purchase agreement to acquire the Miami Subs chain of restaurants. LEVITZ FURNITURE: Seeks To Extend Exclusivity --------------------------------------------- The debtor, Levitz Furniture Incorporated, et al., seeks to extend the exclusive periods during which the debtors may file reorganization plans and solicit acceptances for such plans. The debtors seek an order extending the plan proposal period for approximately 100 days through and including June 7, 1999 and the solicitation period until August 6, 1999. The debtors state that they have taken significant strides in their reorganization efforts, including steps to refinance their post-petition lending facility, restructure their real estate portfolio, and return their business to profitability. The debtors believe that it is in the best interests of their estates and creditors to seek this extension so that the debtors may continue their refinancing and restruction efforts and engage in substantive negotiations with major creditor constituents regarding a consensual reorganization plan. The debtors have been negotiating an amendment of the DIP facility under which it will be extended through June 7, 1999. Also, the debtors expect to enter into an agreement with a third party for the sale and leaseback of certain owned and leased properties. The debtors' management has changed significantly, and 27 stores have closed. The new senior management has also committed itself to a warehouse rationalization program to reduce warehouse operating expenses by approximately $7 million. MAXICARE HEALTH: Posts Fourth Quarter Results --------------------------------------------- Maxicare Health Plans Inc. (Nasdaq/NM:MAXI) announced that it reported a net loss of $5.7 million, or 32 cents per share, for the fourth quarter of 1998, which included a $6.5 million charge for litigation, provider insolvency/impairment and an increase to the loss contracts and divestiture costs reserve, as compared with a net loss of $11.4 million, or 64 cents per share, for the comparable quarter a year ago, which included a $3.0 million charge for management restructuring costs and a $7.5 million charge to increase health-care claims reserves. "We enter 1999 having essentially completed the company's strategic plan to divest itself of its noncore operations, and we are positioned to report significant improvements in operating earnings from the company's core markets. Our decision to focus management's time and resources on our core operations is yielding positive results," said Peter J. Ratican, chairman, president and chief executive officer of Maxicare. Last year, Maxicare implemented a strategic restructuring program to exit unprofitable markets by asset sales or plan closings and to concentrate on its health-care businesses in California, Indiana and Louisiana. For the fourth quarter ended Dec. 31, 1998, premium revenues were $175.4 million, an increase of $1.8 million, or 1.0 percent, as compared with the fourth quarter of 1997. For the fourth quarter of 1998, commercial premiums decreased $8.6 million, or 7.4 percent, to $107.4 million, as compared with the fourth quarter of 1997, primarily due to the sales of the Wisconsin and Illinois health plans that were effective as of Sept. 30, 1998. For the fourth quarter of 1998, commercial premiums for the core operations increased $5.9 million, or 6.4 percent, as compared with the fourth quarter of 1997 as a result of a 3.9 percent increase in membership over the fourth quarter of 1997, primarily in California and Indiana, and a 1.9 percent increase in the average commercial premium revenue per member per month ("PMPM"). For the fourth quarter of 1998, governmental premiums increased $10.4 million, or 18.1 percent, to $68.0 million as a result of an 11.1 percent increase in membership, primarily generated by growth in the Medicaid line of business in California and growth in the Medicare line of business in both California and Indiana, offset in part by a $3.7 million decrease in Medicaid premiums as a result of the sale of the Wisconsin health plan effective as of Sept. 30, 1998. Total premium revenues for the year ended Dec. 31, 1998, increased 10.5 percent to $727.2 million from $658.1 million for the same period in 1997, primarily due to a 10.7 percent membership increase. The average commercial premium revenue PMPM for the year ended Dec. 31, 1998, increased 1.1 percent compared with the same period in 1997. Total health-care expenses for 1998 increased $53.5 million, as compared with the same period in 1997 as a result of the increase in membership and an increase in pharmacy costs. Maxicare is a managed health-care company, with operations in California, Indiana and Louisiana that currently have approximately 490, 000 members. The company also offers various employee benefit packages through its subsidiaries Maxicare Life and Health Insurance Co. and HealthAmerica Corp. MOBILEMEDIA: Mails Supplemental Disclosure To Class 6 ----------------------------------------------------- MobileMedia Corporation announced that on Friday February 19, 1999, it mailed supplemental disclosure material and ballots to its Class 6 unsecured creditors, including holders of its 9 3/8% notes and 10 1/2% notes. As required by the U.S. Bankruptcy Court for the District of Delaware, MobileMedia is resoliciting votes from that creditor class on its Third Amended Joint Plan of Reorganization, which provides for the merger of MobileMedia into Arch Communications Group, Inc. (Nasdaq: APGR). The deadline for re-voting by Class 6 creditors is March 23, 1999. MobileMedia's confirmation hearing on the Plan is scheduled to resume on March 26, 1999. QUADRAX CORP: Order Grants Extension To File Plan ------------------------------------------------- The deadline for the filing of a plan of reorganization and Disclosure statement by the investor, individually, or to be joined in by the debtor is extended to February 28, 1999. RAND ENERGY: Requests Hearing on Bid Procedures ----------------------------------------------- The debtor, Rand Energy Company and KUKUI,INC entered into an agreement whereby the debtor agreed to sell certain oil and gas properties in New Mexico and Texas. The debtor will receive aggregate cash consideration of $7.8 million. The purchase price is the highest and best offer received by the debtor for the purchase of the assets. The debtor now seeks an order approving the procedures agreed to by the parties relating the sale of the assets. Any offer by a third party to purchase the assets must exceed KUKUI's purchase price by $150,000. READING CHINA: Taps R.F. Stengel As Interim Management ------------------------------------------------------ The debtors, Reading China and Glass, Inc., and its affiliated debtors seek a court order authorizing employment and retention of R.F. Stengel & Co., Inc. as interim management of Reading China and Glass, Inc. The firm's standard rates for this work are $2,500 per day for R. Stengel, $1,700 per day for T. Cawley, $1500-$2500 per day for professional staff. The debtor has agreed to provide the Stengel company with a retainer of $30,000. READING CHINA: Seeks Extension of Exclusivity --------------------------------------------- The debtors, Reading China and Glass, Inc. and affiliated debtors seek to extend the debtors' exclusive periods in which to file a Chapter 11 plan and to solicit acceptances thereof. This is the debtor's first request for such an extension. The debtors seek the entry of an order extending by 120 days the exclusive periods within which to file a plan or plans of reorganization, through and including June 26, 1999 and the period to solicit acceptances thereof, through and including August 26, 1999. The debtors' efforts have been directed towards securing postpetition financing, closing and liquidating the inventory of 15 marginal or unprofitable store locations, retaining a firm to evaluate its store leases, and addressing issues of creditors including reclamation demands. The debtors state that it would simply be premature to require the debtors to prepare and file a plan of reorganization prior to February 26, 1999. SATO KOGYO: Seeking Loan Forgiveness ------------------------------------ Ailing general contractor Sato Kogyo Co. said on Monday that it has asked Dai-Ichi Kangyo Bank, Hokuriku Bank and 10 other creditor banks for loan forgiveness totaling some 120 billion yen. Dai-Ichi Kangyo and Hokuriku were asked to shoulder some 70 pct of the total. If the loans are written off, Sato Kogyo, based in Toyama, central Japan, will dispose of about 128 billion yen in losses in the next business year ending in March 2000, company officials said. Of the total losses, 35 billion yen are from shutting down subsidiaries, and 4 billion yen from real estate sales. As part of a business rehabilitation scheme, Sato Kogyo will reduce its payroll by 500 in the next business year and an additional 300 in the following year to March 2001. Of the company's 64 subsidiaries and affiliates, 10 will be closed before the end of the current year to March 31, and eight more in the next term. The company also plans to slash executives' pay by 20 pct and introduce an executive officer system and cut the number of board members, the officials said. Sato Kogyo plans to approach a second-tier group of creditors including Hokuriku Bank for loan forgiveness, the sources said. Sato Kogyo had about 396 billion yen in interest-bearing debts and 96 billion yen in debt guarantees as of last Sept. 30. The company has already announced plans to book a total of 50 billion in special losses in the year ending March 31, including a charge for subsidiary liquidation, as part of its reconstruction efforts. It has also been exploring the possibility of issuing about 20 billion yen worth of new shares for third-party allocations. The company may postpone the capital increase to April or later to focus on debt relief talks with creditors. Sato Kogyo is the fourth general contractor in Japan to ask for creditors' debt forgiveness following Aoki Corp., Haseko Corp. and Fujita Corp. Dai-Ichi Kangyo Bank said Monday it will continue supporting Sato Kogyo Co. (Jiji Press English News; 02/22/99) THE J.PETERMAN: It Appears To Be Over ------------------------------------- Founder John Peterman said Monday that last-ditch attempts to find a buyer for his struggling company had failed. He said he expects a U.S. Bankruptcy Court judge to set a date Tuesday for an auction at which the company's assets will be sold to the highest bidder, with proceeds going to the company's creditors. "Over the weekend, we had a buyer, but their proposal wouldn't work" both in terms of price and structuring, Peterman said in a telephone interview. "The court wouldn't have accepted it. We'll continue to try to pull it out of the fire until the auction," he said. In its most recent set of court filings, Peterman listed debts of more than $14 million. The company has remained in business in recent weeks through a series of stopgap loans provided by its only secured creditor, Heller Financial of Chicago, now owed nearly $10 million. Those loans have not included money to buy spring merchandise, and the company is now two weeks overdue in putting out its spring catalog, Peterman said. Peterman said Heller, a primary investor in last year's plan to open 70 J. Peterman retail stores, refused to extend additional credit that might have allowed the company to work its way out of problems. Late last year, when the company ran into snags in opening new stores and a slowdown in catalog sales, "Heller squeezed down at a time when we needed flexibility," Peterman said. Early last year, John Peterman planned a retail expansion that included a proposed 50 stores and 20 catalog outlets. Peterman recruited executives from J. Crew, Calvin Klein and The Gap, raised $10 million from private investors and made plans to target upscale markets. By the end of the year, though, there were layoffs and a freeze on new store openings, followed last month by the bankruptcy filing. USN COMMUNICATIONS: Case Summary & 20 Largest Creditors ------------------------------------------------------- Debtor: USN Communications, Inc. 10 South Riverside Plaza, Suite 2000 Chicago, Illinois 60606 Type of business: Telecommunications services Court: District of Delaware Case No.: 99-383 Filed: 02/18/98 Chapter: 11 Debtor's Counsel: Robert J. Dehney, Esq. Morris, Nichols, Arsht & Tunnell 1201 North Market Street P.O. Box 1347 Wilmington, Delaware (302) 658-9200 Total Assets: $115,336,000 Total Liabilities: $285,993,209 No. of shares of common stock 23,585,741 20 Largest Unsecured Creditors: Name Nature Amount ---- ------ ------ Indenture - 14 5/8% Senior Discount Notes Bond Debt 150,799,339 Indenture - 9% Convertible Subordinated Discount Notes Bond Debt 34,096,740 Indenture - 14% Senior Discount Notes Bond Debt 14,617,175 Indenture - 9% Consent convertible Bond Debt Subordinated Notes 11,008,002 Deloitte & Touche LLP Trade 1,814,144 Corporate Concepts, Inc. Office Equipment 1,374,829 Trizechahn Contractor 1,239,597 Wilson Contractors, Inc. Contractor 1,080,323 APAC Customer Service Trade 897,634 Ameritech Industry Services Trade 675,894 Network Programs, Inc. Trade 657,841 Leopardo Companies Inc. Trade 566,640 Transcom USA , Inc. Trade 476,199 Arthur Andersen LLP Trade 475,516 Vantive Corp. Trade 377,954 The Sutherland Group Trade 322,369 RR Donnelly Receivables Trade 317,411 Comdisco Trade 260,994 Streetsmart Resources, Inc. Trade 220,222 Pagemart, Inc. Trade 219,276 ********* 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 in each Friday edition of the TCR, is provided 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 1999. 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 * * *