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/raid1/www/Hosts/bankrupt/TCR_Public/990429.MBXT R O U B L E D C O M P A N Y R E P O R T E R Thursday, April 29, 1999, Vol. 3, No. 83 Headlines ACME METALS: Marsden Retires as Chairman of the Board AHERF: Lawyers Want To Quit Case ALLTEL: Registration Statement ALTA GOLD: Nasdaq To Delist Alta Gold, Once Silver King ALTIVA FINANCIAL: Prospectus Filed With SEC AMERICAN RICE: Hearing Set To Establish Bar Date AMERICAN RICE: Resignation of Deloitte & Touche AUTOCYTE: Announces Results of Operations For Quarter BOSTON CHICKEN: Heinz To Sell Groceries With Chicken Name CITYSCAPE: Trustee Questions Plan Feasibility COLORADO CASINO: Increases Losses in Restatements CONNECTIVITY TECHNOLOGIES: Concludes New Term Loan COUNTRY STAR: Change In Control Reported CRIIMI MAE: Faces More Debt Problems FIX-CORP: Court Approves Agreement With Consulting Firm FRACMASTER: Offer To Purchase Assets Accepted HEALTHCOR HOLDINGS: Annual Report Filed With SEC INCO LTD: Announces First Quarter Loss of $16M KAMCO: To Sell $16 Billion of Non Performing Loans KOFUKU BANK: Judged To Have Had 46B Yen In Capital Deficit MCA: Bankruptcy Court Upholds Commissioner's Actions MEDICAL RESOURCES INC: Annual Report Filed With SEC MEDPARTNERS: Creditors Due Millions NED: Given Court Approval of Liquidation Procedures PEACOCK FINANCIAL: Files Annual Report With SEC ROOM PLUS: Files Chapter 11 Following Merger Break Down SERVICE MERCHANDISE: Receives Approval of $750M DIP SHOLODGE: Annual Meeting Set SPECTRAN: Annual Meeting of Stockholders Set For May 28 WANG LABORATORIES: Quarterly Report Filed with SEC ********* ACME METALS: Marsden Retires as Chairman of the Board ----------------------------------------------------- Brian W.H. Marsden retired as Chairman of the Board of Directors of Acme Metals Incorporated (OTC Bulletin Board: AMIIQ) effective April 22, 1999. Marsden, 67, announced his retirement at the Board of Directors meeting held last week in Toledo, Ohio. Mr. Marsden's retirement follows Acme Metals' established management succession plan as well as his desire to pursue other interests and spend more time with family. Marsden will continue as a director of the Company. Marsden retires after 22 years of service with Acme Metals Incorporated and its predecessor Interlake, Inc., where he served as President of its Iron and Steel Division. Upon the spin-off of Acme Steel Company from Interlake in 1986, Marsden served as President and Chief Executive Officer until the formation of Acme Metals Incorporated in 1992 when he became Chairman and Chief Executive Officer. In 1996 he relinquished the post of Chief Executive Officer for health reasons but remained Chairman of the Board. Acme Metals also announced Stephen D. Bennett's election to the position of Chairman of the Board succeeding Mr. Marsden. Mr. Bennett, 50, was elected to the Board of Directors in January 1993 and has served as President and Chief Executive Officer since April 1996, having previously been named to the position of President and Chief Operating Officer in January 1993. He joined the Company in 1990 as Vice President, Operations, after nearly 15 years in key operating and management positions with the USS Division of the USX Corporation and its predecessor, United States Steel Corporation. AHERF: Lawyers Want To Quit Case -------------------------------- The Pittsburgh Post-Gazette reports on April 28, 1999 that the downtown law firm of Stonecipher, Cunningham, Beard & Schmitt asked the Bankruptcy Court judge overseeing the reorganization of the Allegheny Health, Education & Research Foundation for permission to quit the case. When no objections were raised at a hearing yesterday, Judge M. Bruce McCullough granted the request. In a written motion, Stonecipher said it was asking to leave the case because attorneys representing William Scharffenberger, AHERF's court-appointed trustee, had asked the firm to stop providing services to AHERF's bankrupt subsidiaries. The trustee, however, had not formally sought the termination or taken over legal responsibilities for those entities, the firm said. ALLTEL: Registration Statement ------------------------------ 5,499,997 shares of ALLTEL common stock covered by a prospectus filed with the SEC are being offered for the account of certain selling shareholders. Prior to January 6, 1999, the selling shareholders were the sole shareholders of Standard Group, Inc., a Georgia corporation. On January 6, 1999, Alltel completed a merger with Standard Group, Inc. In the merger, Alltel issued 5,499,997 shares of ALLTEL common stock to the selling shareholders in exchange for all of the outstanding shares of capital stock of Standard Group, Inc. Except for the merger, none of the selling shareholders has held any position or office or has had a material relationship with ALLTEL or any of its affiliates within the past three years. ALTA GOLD: Nasdaq To Delist Alta Gold, Once Silver King ------------------------------------------------------- The Salt Lake Tribune reports on April 27, 1999 that low gold prices and start-up problems at a new mining site have sent Henderson, Nev.-based Alta Gold Co. to federal bankruptcy court where it recently sought protection under Chapter 11 of the U.S. Bankruptcy Code. Alta, which was once based in Salt Lake City and operated under the name Silver King Mines, said it plans to continue its mining operations while under bankruptcy court protection. "With gold prices at 19-year lows and our current level of gold production, the company presently has insufficient cash flow to service its debt and to meet its other obligations," said Robert N. Pratt, president and chief executive officer. Under Chapter 11, a company is given court-protection from creditor lawsuits while it works out a plan to repay its debts. Alta Gold hopes to restructure approximately $29 million of outstanding debt and $4 million in trade payables. Pratt said the company has been working to increase production and reduce costs but needed time for its gold production to increase and its cash flow to improve. Alta Gold, whose shares are listed on the Nasdaq stock market, said it has received notice that its stock will be delisted from Nasdaq at the close of business May 1. The company is evaluating its options, including whether to appeal the delisting or have its securities listed on another market. ALTIVA FINANCIAL: Prospectus Filed With SEC ------------------------------------------- This prospectus describes Altiva Financial Corporation (formerly, Mego Mortgage Corporation) and the sale of 6,974,614 SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE shares of our common stock that: - are owned by certain of our stockholders or - may be acquired by certain of our stockholders, if they convert their shares of our Series A convertible preferred stock into shares of our common stock or - may be acquired by certain of our optionholders upon exercise of their options to purchase common stock. The common stock is traded on the Nasdaq Stock Market under the symbol "ATVA." Closing sale price on April 23, 1999: $3.00. AMERICAN RICE: Hearing Set To Establish Bar Date ------------------------------------------------ The US Bankruptcy Court for the Southern District of Texas, Corpus Christi Division granted the debtor's motion for entry of an order setting a date for hearing on the establishment of a Bar Date. The hearing is set for May 3, 1999 at 9:00 AM in US Bankruptcy Court, Corpus Christi, Texas. AMERICAN RICE: Resignation of Deloitte & Touche ----------------------------------------------- American Rice, Inc. has been advised that Deloitte & Touche LLP has resigned as independent accountants and auditors for the Company. Deloitte's resignation was not a result of any recommendation of the Company's board of directors or any board committee. In a motion to withdraw as professionals for the Company in ARI's Chapter 11 proceedings, Deloitte advised the bankruptcy court that it believed its resignation was in the best interests of the Company and was undertaken to avoid the possibility that certain class action litigation in which Deloitte is a named defendant might affect the Company's reorganization efforts. As previously reported on Form 8-K, the lawsuit was brought by four current and former shareholders of ERLY Industries Inc. against certain officers and directors of ERLY and also Deloitte. Deloitte's motion to withdraw as a professional service provider to the Company was approved on April 19, 1999 by the United States Bankruptcy Court of the Southern District of Texas, Corpus Christi Division. The Company's financial statements for its March 31, 1997 fiscal year-end were audited by Deloitte whose report thereon was dated June 20, 1997. The report by Deloitte on the 1997 financial statements of the Company contained no adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope, or accounting principles. Deloitte was engaged to audit the March 31, 1998 financial statements of the Company. On June 30, 1998, Deloitte communicated to the Company's management and its audit committee on the status of such audit. At that time, Deloitte communicated a summary of documentation and other information it needed to receive from the Company or others and also stated there were audit procedures remaining to be performed before the 1998 audit could be completed. On August 11, 1998, ARI filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code. On October 6, 1998 the Court approved the Company's application to employ Deloitte as accountants and auditors. Subsequently, the Company advised Deloitte that due to the bankruptcy the Company did not believe it was necessary for the audit to be completed and therefore Deloitte did not complete the audit. Deloitte was not engaged to audit the Company's financial statements for the year ended March 31, 1999. During the Company's two most recent fiscal years and through April 19, 1999, there were no disagreements with Deloitte on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements (if not resolved to Deloitte's satisfaction) would have caused Deloitte to make reference to the subject matter or matters of the disagreement in connection with its report. AUTOCYTE: Announces Results of Operations For Quarter ----------------------------------------------------- AutoCyte, Inc. (Nasdaq: ACYT) announced results of operations for the quarter ended March 31, 1999. Net sales increased 8% from $1.1 million in the first quarter of 1998 to $1.2 million in the first quarter of 1999. The increase was due primarily to higher sales volume of AutoCyte(R) PREP System ("PREP") reagents and related consumables as the Company continues to expand its installed base of PREP units, both domestically and internationally. Operating expenses decreased 4% from $3.0 million in the first quarter of 1998 to $2.9 million in the first quarter of 1999 as the Company continued to control costs while working to complete FDA approval for PREP. Net loss increased 5% from $2.3 million in the first quarter of 1998 to $2.4 million in the first quarter of 1999. Net loss per share was $0.19, an increase from a net loss per share of $0.18 in the first quarter of 1998. AutoCyte, Inc. develops, manufactures and markets the only integrated automated sample preparation and image analysis system to support cytology professionals in cervical cancer screening. AutoCyte is currently pursuing regulatory approval of its products for sale in the United States and has begun sales in several foreign countries. The Company's integrated system is comprised of the AutoCyte(R) PREP System for sample preparation and the AutoCyte SCREEN image analysis system. BOSTON CHICKEN: Heinz To Sell Groceries With Chicken Name ---------------------------------------------------------- Heinz will sell Boston Chicken in stores: H.J. Heinz Co. will sell packaged grocery food products with the Boston Market brand name under an agreement announced Friday by Heinz and Golden-based Boston Chicken Inc. Under the agreement, Heinz will pay Boston Chicken an undisclosed royalty fee based on sales. The agreement is subject to approval of the U.S. Bankruptcy Court in Phoenix, where Boston Chicken filed for Chapter 11 bankruptcy protection in October 1998. Boston Chicken officials said the bankruptcy court is expected to hear a motion seeking approval of the agreement at a hearing May 25. CITYSCAPE: Trustee Questions Plan Feasibility ---------------------------------------------- The U.S. Trustee acting in the Cityscape Financial Corp. case has objected to the company's disclosure statement, arguing that, among other things, the filing fails to address satisfactorily the feasibility of the reorganization plan. Specifically, the filing asserts that Cityscape made no representation as to the accuracy of the financial projections through 2003 provided by the disclosure statement as well as stated that the projections are subject to "substantial uncertainties" that may force the actual operation results to "vary materially from the projected operating results." "The United States Trustee has concerns regarding the extent to which this information should be relied upon in determining the feasibility of the Plan." The trustee also requested that Cityscape clarify the methodology behind the company's $10 million "conservative" aggregate estimate of administrative, priority tax, and other priority claims as of the effective date. (The Daily Bankruptcy Review and ABI Copyright c April 28, 1999) COLORADO CASINO: Increases Losses in Restatements ------------------------------------------------- The Gazette reports on April 24, 1999, Colorado Casino Resorts Inc., owner of two Cripple Creek casinos, announced Friday it restated its financial results for the past two years, increasing its losses by more than $3.7 million. The Colorado Springs-based company owns Creekers and the Double Eagle Hotel & Casino, Cripple Creek's largest casino and its largest hotel. The company built and opened the Double Eagle in August 1996; it acquired Creekers and reopened it in 1994. The company's chief executive, Rudy Saenz, resigned on March 22 and has been temporarily replaced by its general counsel, Michael Smith. Colorado Casino said the restatements were recommended by its recently hired independent auditor, Moore Stephens PC. The company also said a preliminary audit indicated it lost $9.4 million last year; final results are to be released next week. The company also said the restatements and $9.4 million loss violate financial conditions of its credit agreement. Colorado Casino said it has received a one-time waiver of the conditions from its lender and is trying to resolve any subsequent defaults. As a result of the restatements, the Nasdaq Stock Market has given Colorado Casino notice that it will de-list its stock. A hearing on the de-listing is scheduled for Thursday. The company's stock rose 6 cents to 50 cents in trading before the announcement. CONNECTIVITY TECHNOLOGIES: Concludes New Term Loan -------------------------------------------------- Connectivity Technologies, Inc. (OTC Bulletin Board: CVTK) announced the signing of a new credit agreement between its operating subsidiary, Connectivity Products Incorporated, and the subsidiary's lenders. The new credit facility, extending until January 31, 2000, is in the amount of $16,460,700, including an over advance, with the maximum indebtedness at any one time to be determined by a borrowing base calculation. The agreement includes an amortization schedule, is secured by all of the assets of Connectivity Products and contains covenants including requirements for the maintenance of stipulated earnings and net worth. As part of the agreement with the lenders all of Connectivity Products' cash on hand, including the proceeds of a recently received $750,000 tax refund, have been paid to the lenders to reduce the current over advance. This arrangement ends Connectivity Products' default status under its prior bank loan agreement. Connectivity Technologies, formerly known as Tigera Group, Inc., acquired Connectivity Products Incorporated, a manufacturer and assembler of wire and cable products in 1996. COUNTRY STAR: Change In Control Reported ---------------------------------------- On March 11, 1999, and pursuant to the terms and conditions of a written Stock Acquisition Agreement, Go Call, Inc., a then non-affiliated publicly owned Delaware corporation, acquired an aggregate of 652,973 issued and outstanding shares of common stock, $.01 par value per share of Country Star Restaurants. The Country Star shares were acquired from Dan J. Rubin, Roy B. Rubin MD, Money Purchase Pension Plan and Daniel Nourani, the three principal shareholders of the Registrant solely in exchange for the original issuance and delivery to the CSR Shareholders of an aggregate of 4,570,811 theretofore authorized but unissued shares of GCI's Common Stock, $.01 par value per share. On April 19, 1999 and pursuant to the terms and conditions of a written Agreement and Plan of Merger between GCI and Country Star Restaurants, GCI agreed to acquire the remaining 56,362 shares of the Registrant's Common Stock from the individual shareholders thereof solely in exchange for an aggregate of 394,534 theretofore authorized but unissued shares of GCI's Common Stock, $.01 par value per share shares. The Merger Agreement also provided that on the Effective Date: (i) GCI shall be the surviving corporation: (ii) the Articles of Incorporation, By-laws, officer and directors of GCI shall be the Articles of Incorporation, By-laws, officer and directors of the surviving corporation; (iii) the 652,973 CSR Shares held by GCI immediately prior to the Effective Date shall be canceled; and (iv) If a stockholder of the Registrant shall be entitled to receive a fractional GCI Merger Share pursuant to the Merger, then such fractional share will be rounded up to the nearest whole GCI Merger Share. CRIIMI MAE: Faces More Debt Problems ------------------------------------- The National Mortgage News reports on April 19, 1999 that Criimi Mae, a mortgage real estate investment trust reported 1998 net income of $42.4 million, 75 cents per share, down from $62.3 million, $1.02 per share, during 1997. During the fourth quarter, however, when the company's financial condition suddenly worsened, the company suffered a net loss of $10.2 million, 23 cents per share, compared with net income of $13.4 million, 29 cents per share, during the fourth quarter of 1997. Prior to filing for bankruptcy protection, Criimi Mae was a leading investor in subordinate tranches of commercial mortgage-backed securities. When spreads suddenly widened last fall the value of the company's CMBS portfolio fell, and when creditors unexpectedly made margin calls the company was unable to meet their demands and had little choice other than to file for bankruptcy. Since last October, Criimi Mae reached agreements with four of its lenders, but its debt commitments are still far from resolved. According to the company, "The decrease in net income was largely due to the impact of turmoil in the financial markets on commitments related to commercial mortgage loans in the company's securitization pipeline. Reorganization items and other charges also contributed to the decline in net income. As a result of capital market turmoil and the uncertainties resulting from the reorganization proceedings, the company's results of operations at December 31, 1998 are not expected to be indicative of results of operations for future periods. In other words, a $42 million profit is not expected for 1999. In fact, there is little doubt that there will be no profit for 1999, leading to speculation about Criimi Mae's ability to continue operations. The company's independent public accountants have issued a report expressing substantial doubt about the company's ability to continue as a going concern. Criimi Mae, however, says it plans to file its plan of reorganization this coming summer. The company said that the plan will "contemplate the company's emergence from Chapter 11 later in the year. (However), there is no assurance that the company will propose a plan at this time, or that the plan will be approved or consummated. The company's ability to emerge from bankruptcy and resume the acquisition of subordinated CMBS, as well as its loan and securitization programs, depends largely on (our) ability to obtain additional capital." In essence, Criimi Mae can do nothing unless it finds someone to lend it money or some other way to obtain capital. "Criimi Mae is exploring a variety of capital sources, including bank debt, high yield bond financing and equity capital," the company said. Since October the company has suspended its acquiring, originating and securitizing operations, though it still acts as a servicer of its own portfolio of CMBS and for both its own and third-party securitizations. FIX-CORP: Court Approves Agreement With Consulting Firm ------------------------------------------------------- On Friday, April 23, 1999, the United States Bankruptcy Court for the Southern District of Ohio approved Fix-Corp International, Inc.'s (OTC:BB:FIXC) board of directors' decision to enter into an agreement with the Philadelphia- based management consulting firm of Hershhorn & Trichon, LLC ("H & T"). Pursuant to the agreement, the Company elected Mark P. Hershhorn as a director and the Chief Executive Officer and Chairman of the Board of the Company. Mr. Hershhorn will replace S. Darwin Noll as a director, who resigned effective as of March 12, 1999. Along with the appointment of Mr. Hershhorn, James L. Trichon was named Executive Vice President and Constantinos I. Costalas was named Chief Operating Officer of the Company. Under the agreement, H & T will be paid a base annual wage of $ 450,000 plus certain benefits and incentive compensation under a plan to be established by the Board (including an option to be granted to purchase 2,000,000 shares of the Company's Common Stock for a cost of $ .56 per share). The Bankruptcy Court also issued an order authorizing the rejection of the Company's employment contract with Mark Fixler, the company's founder, a current director, and its Chief Executive Officer. Mr. Fixler further agreed that he had no claim for damages against the Company arising from the rejection of his employment contract and waived the $ 2 million severance benefit, health insurance, and automobile allowance provided for in his employment contract. Additionally, Mr. Fixler's annual salary was reduced from $ 300,000 to $ 150,000 through Dec. 31, 1999. Mr. Fixler, in June 1998, canceled an option to purchase four million shares of the Company's stock. Mr. Fixler will continue to be bound by the noncompetition and confidential information provisions of his employment agreement. The Bankruptcy Court also issued an order authorizing post-petition financing by the Company and its subsidiaries. Such financing is conditioned upon the Company's immediately commencing discussions with Chatham Partners, Inc. ("Chatham") with respect to the validity of a judgement for approximately $ 4,474,000 Chatham obtained against the Company in New York state court. The subject judgement, which caused the Company to seek protection under the Bankruptcy Code, arose from a disputed December 1996 agreement pursuant to which Chatham was to act as the Company's exclusive financial advisor and placement agent for a private placement of up to $ 5 million of debt securities. Fix-Corp International, Inc. is an international environmental-based recycler of post-consumer high density polyethylene (HDPE) and producer of recycled post-consumer plastic resin pellets for use in the manufacture of injection molded plastic products through its wholly-owned subsidiary, Fixcor Industries, Inc. In addition, the Company, through its Pallet Technology, Inc. subsidiary, manufactures high-performance plastic pallets for the industrial marketplace. The Company is also under a worldwide licensing agreement with Allied Signal to reclaim and recycle both oil and plastic from post-consumer HDPE motor oil containers through its wholly owned subsidiary Fixcor Recovery Systems, Inc. FRACMASTER: Offer To Purchase Assets Accepted --------------------------------------------- Fracmaster announces that its Board of Directors has accepted a proposal from one of several proposals sought and received, subject to necessary approvals, including regulatory and Court approvals, to purchase all or substantially all of the assets of the Company. The Board ranked the offers or proposals in order of their relative value to the Company as a whole. All proposals were evaluated in conjunction with the Banking Syndicate and the one assessed to add the most value was equally supported by the Syndicate of Banks. UTI Energy Corp., in partnership with its largest shareholder, REMY Capital Partners III, L.P., submitted a bid that offered the highest value for the Company's assets. All offers or proposals tendered for the Company's assets were insufficient for the payment in full of the claims of the Company's secured creditors. Accordingly, no proceeds are available for distribution to the shareholders of the Company. A court application has been scheduled for 1:00 p.m., April 30, 1999 before Madame Justice Paperny of the Court of Queen's Bench of Alberta, Judicial District of Calgary, to hear the application of the Company pursuant to the Companies' Creditors Arrangement Act and the UTI/REMY proposal to deal with the approval or the scheduling of an application for the approval of the accepted UTI/REMY proposal. HEALTHCOR HOLDINGS: Annual Report Filed With SEC ------------------------------------------------ Healthcor Holdings, Inc. is one of the largest providers of comprehensive home health care services based in the southwestern and central United States, providing home nursing, respiratory therapy/home medical equipment and infusion therapy. The Company currently has 51 offices in eight states. For the year ended December 31, 1998, the Company had net revenues of $115.7 million and a net loss of $(98.3) million. The net loss includes significant pre-tax charges during 1998, including goodwill write-offs of $31.8 million as a result of certain unamortized goodwill balances that were evaluated and deemed impaired, additional provisions for doubtful accounts of $31.6 million and a loss on disposition of assets of $1.5 million. In addition, 1998 results were adversely affected by the Company's Medicare nursing operations exceeding Medicare nursing cost limitations by $5.6 million. INCO LTD: Announces First Quarter Loss of $16M ---------------------------------------------- Inco Limited reported a loss of $16 million, or 13 cents a common share, for the first quarter of 1999, compared with a loss of $13 million, or 13 cents a share, in the fourth quarter of 1998 and a loss of $41 million, or 29 cents a share, in the first quarter of 1998. Fourth quarter 1998 results included an after-tax gain of $20 million, or 12 cents a share, resulting from the sale of the Company's 100 per cent interest in Inco Alloys International. First quarter 1998 results included an after-tax charge of $32 million, or 19 cents a share, associated with the Company's restructuring actions. Commenting on the first quarter 1999 results, Mike Sopko, Chairman and Chief Executive Officer, said that: "While we are encouraged by the improvement in nickel prices in the first quarter of 1999, our program to reduce costs and expenses throughout Inco continues as part of our overriding objective to restore our profitability even in these difficult market conditions. We continue to believe that the long-term growth in nickel demand is excellent and that it will be only a matter of time before prices return to higher and more normal levels." The Company's realized price for copper averaged $1,455 per tonne ($0.66 per pound) in the first quarter of 1999, compared with $1,676 per tonne ($0.76 per pound) in the fourth quarter of 1998 and $2,006 per tonne ($0.91 per pound) in the first quarter of 1998. Realized prices in 1998 benefited from the favourable impact of the Company's copper hedging activities. Net sales from continuing operations were $438 million in the first quarter of 1999, compared with $403 million in the fourth quarter of 1998 and $500 million in the first quarter of 1998. KAMCO: To Sell $16 Billion of Non Performing Loans -------------------------------------------------- Korea Asset Management Corporation ("KAMCO") has announced that it will extend invitations to a limited number of domestic and international investment groups to bid in KAMCO's upcoming sale of approximately 1 trillion Korean won (about $850 million) of non-performing loans ("NPLs") to corporate borrowers which have been financially restructured under Korean court supervision. This sale, which is scheduled for the end of May, will be one of Korea's largest bulk sales to date and is part of KAMCO's plan to sell as much as 16 trillion won of NPL's during 1999. KAMCO has operated for 37 years as a collection and foreclosure agency for Korean financial institutions and was appointed immediately following the onset of the Asian financial crisis as the sole institution in Korea to manage and dispose of the country's NPLs. As of February 1999, KAMCO had acquired 44.1 trillion won ($36.8 billion) of NPLs from distressed financial institutions throughout Korea and is expected to acquire an additional 20 trillion won of assets by the end of this year. Under its current mandate, KAMCO plans to sell over 65 trillion won ($54.2 billion) of NPLs over the next 5 to 6 years. The upcoming sale, known as KAMCO 99-1: Restructured Corporate Loan Portfolio Sale will include both secured and unsecured, non-performing corporate loans which have completed reorganization proceedings or voluntary composition agreements with their lenders under court supervision. The borrowers include major Korean corporate groups with operations in the manufacturing, construction and services industries. Approximately 25 percent of the portfolio includes assets secured by commercial, residential and industrial properties with the balance consisting of unsecured loans* subject to approved reorganization plans. KAMCO is currently completing the third phase of a U.S., European and Asian road show designed to meet with selected investors and promote its upcoming loan portfolio sales. Initial indications of investor interest in the KAMCO loan sales have been very positive. In addition to the KAMCO 99-1: Restructured Corporate Loan Portfolio Sale scheduled in May 1999, KAMCO plans to offer a 1.2 billion won ($1 billion) portfolio of defaulted mortgage loans for sale in June 1999. KAMCO expects the number of bidders in the upcoming sales to significantly increase over its two previous asset sales in 1998 (208 billion won portfolio of corporate loans purchased by Goldman Sachs and 565 billion won portfolio of mortgage loans purchased by Lone Star Fund II.). Investor interest in Korea's economic recovery has surged as the Korean economy has bottomed out and is now viewed to be on the rebound. Recent forecasts indicate that Korea's GDP will grow 2 to 3% this year after contracting 5.8% last year. Foreign investment in Korea has sharply increased during the first quarter of 1999 as investors have entered the market to buy interests in Korean banks, insurance companies, manufacturing concerns and other businesses. E&Y Kenneth Leventhal Real Estate Services Company, LLC, an affiliate of Ernst & Young LLP, will act as financial advisor to KAMCO. EYKL is one of the leading loan sale advisors to government agencies and financial institutions throughout Asia. KOFUKU BANK: Judged To Have Had 46B Yen In Capital Deficit ---------------------------------------------------------- Kofuku Bank, a regional bank based in Osaka, was judged by a government agency to have had 46 billion yen in capital deficit at the end of last September, government sources said Wednesday. The Financial Supervisory Agency (FSA) also found that the bank had some 13 billion to 14 billion yen in latent losses on its securities portfolio, indicating the bank is in a highly precarious financial state, the sources said. Earlier this month, FSA officials said the agency had told Kofuku Bank of the results of its inspection into the bank's financial standing as of Sept. 30, the end of the bank's semiannual financial period, but no exact figures were disclosed. On April 13, the FSA ordered Kofuku Bank to recapitalize, after it told of the results of the inspection, the sources said. The FSA expects Kofuku Bank to report by mid-May on what steps have been taken for recapitalization, and is expected to then consider ordering the bank to take further action, if necessary. Kofuku Bank has been arguing that when it closed its yearly financial account on March 31, its capital deficit should have been wiped out, as it increased its capital by 6 billion yen in late January, and if it is allowed to reevaluate taxation effects on the loan-loss provisions it has built up in the past. These steps should have increased the bank's profits and assets enough to cover losses and liabilities at the end of March, lifting it out of a capital deficit, the bank said. Kofuku Bank nonetheless is planning to increase its capital further because even if a capital deficit is avoided on account of the recapitalization step and the tax effect accounting, the bank's capital is insufficient to meet the adequacy level for domestically operating banks, bank officials said. (Kyodo-04/28/99) MCA: Bankruptcy Court Upholds Commissioner's Actions ------------------------------------------------------ U.S. Bankruptcy Judge Steven W. Rhodes ruled Monday that Michigan Banking Commissioner Patrick McQueen acted within his authority when he put MCA Financial Corp. and 11 of its affiliates in conservatorship, according to the Detroit Free Press. McQueen, who is commissioner for the Michigan Financial Institutions Bureau, named B.N. Bahadur, chief executive of BBK Ltd., as conservator upon seizing MCA and its affiliates nine days after the company laid off almost all of its employees. Bahadur then filed involuntary chapter 11 on the company's behalf two weeks later. The U.S. Trustee's office contested the decision earlier this month, challenging the authority of both McQueen and Bahadur. MEDICAL RESOURCES INC: Annual Report Filed With SEC --------------------------------------------------- Medical Resources, Inc. specializes in the operation and management of fixed-site outpatient diagnostic imaging centers in the United States. The Company currently operates and/or manages 94 outpatient diagnostic imaging centers located in the Northeast (58), Southeast (23), the Midwest (8) and California (5), and provides network management services to managed care organizations. For the year ended December 31, 1998, total Company net service revenues were $179,056,000 versus $144,412,000 for the year ended December 31, 1997, an increase of $34,644,000 or 24%. This increase resulted from the inclusion for all of 1998 of centers acquired during 1997, which contributed $37,568,000 in revenues, net of a $2,924,000 decline in revenues at imaging centers operated by the Company since January 1, 1997. Costs of operations totaled $162,553,000 in 1998 as compared to $129,093,000 in 1997. The Company's net loss from continuing operations for the year ended December 31, 1998 was $25,072,000 compared to net loss from continuing operations for the year ended December 31, 1997 of $31,968,000. MEDPARTNERS: Creditors Due Millions ----------------------------------- Business Press Ontario CA reports on April 26, 1999 that the bankruptcy of a major health plan in California has local creditors waiting for payments that could amount to millions of dollars. MedPartners Provider Network, a health-care plan operating in California and owned by MedPartners Inc. of Birmingham, Ala., was placed in bankruptcy by California officials last month. The plan operates U. S. FamilyCare clinics and Talbert clinics. It also includes affiliated clinics, among them several Inland Empire offices, the largest of which is Riverside Medical Clinic with more than 100 physicians. Riverside Medical Clinic is a creditor in the bankruptcy, and so is KPC Global Care of Riverside, the largest locally based physician practice management firm with 250,000 enrolled patients. Another local creditor is Inland Health Organization, a Redlands-based manager of more than 400 physicians. Inland Health is a wholly owned division of Catholic Healthcare West. The local companies continue to operate under their contracts with MedPartners. As a result, the amount owed them won't be known until the bankruptcy is settled. "I don't know what the amount in the filing is, but it's not of much consequence because the clinic does have some revenue," said Greg Hardke, attorney for Riverside Medical Clinic. "But the final accounting will be in the millions." Hardke is a partner with Best Best & Krieger LLP in Riverside. MedPartners reached an agreement in principle with state officials on April 9 for a transition of the plan's operations and assets. The company had announced last November that it would divest itself of all its physician management business. In the proposed settlement, MedPartners has arranged a $50 million fund to be paid as needed to the provider network or to companies, such as Global Care, that acquire its assets. Details of the agreement are still being worked out, said MedPartners spokesman Shawn Flynn. NED: Given Court Approval of Liquidation Procedures --------------------------------------------------- Jiji Press English News reports on April 27, 1999 that Nippon Enterprise Development Corp. has received court approval for starting the procedures for liquidating itself, Teikoku Data Bank Ltd. said Tuesday. NED, a major venture capital firm affiliated with failed Long-Term Credit Bank of Japan, received the approval from Tokyo District Court on April 9, the credit research agency said. NED left liabilities of about 510 billion yen. Eight NED affiliates also received court approval for launching liquidation procedures on April 9. NED tumbled into difficulty following the collapse of asset-inflated economic "bubbles" in the early 1990s, which left the company with mountains of problem loans. NED handed over its venture capital operations to an investment partnership set up by Yasuda Fire and Marine Insurance Co. early this year after LTCB was placed under state control due to its insolvency late last year. PEACOCK FINANCIAL: Files Annual Report With SEC ----------------------------------------------- Fiscal year 1998 was the Company's third year as a public company. It was a year of substantial change in the structure of the Company due to the failure of the Hawthorne Group, Ltd. to fund its $10,000,000 commitment as anticipated. In September 1998, the Company filed with the Securities and Exchange Commission to become a Business Development Corporation under the Investment Act of 1940 as part of management's strategy to seek diversification in its operations and to become less dependent on its real estate operations for revenues. The Company continues to believe that it will benefit substantially from its position in the San Jacinto Valley where a $3 billion recreational lake is currently under construction and is expected to be completed in 1999. All economic indicators show a marked increase in home sales and land values in the area and the Company expects to place several of its real estate projects into development through joint ventures with builders and investors in the coming year. Peacock Financial Corporation reported a net loss of $1,533,436 and revenues of $609,811 for the year ending December 31, 1998 versus net income of $222,009 and revenues of $2,075,386 for the year ending December 31, 1997. The net loss and reduction of revenues was due primarily to the repositioning of the real estate operation to receive the anticipated $10,000,000 capital infusion from the Hawthorne Group, Ltd. which did not materialize. The Company currently employs 4 people. The Company uses independent consultants for a variety of tasks, including engineering and architecture for real estate development, shareholder relations and financial management. Its principal executive offices are located at 248 East Main Street, San Jacinto, California 92583. ROOM PLUS: Files Chapter 11 Following Merger Break Down ------------------------------------------------------- Room Plus Inc., a furniture designer and retailer in Roseland, N.J., announced Monday that it had filed chapter 11 in Newark, N.J., according to Reuters. The company said it received a debtor-in-possession loan of $1 million from Nationwide Warehouse President David Belford to continue operations. Room Plus had previously received a $1.5 million loan from Belford in July, who was subsequently named company chairman and has warrants to buy 2 million shares of Room Plus at $2 each, and the company said it expects that loan to be converted into equity upon the company's reorganization. But in March, Nationwide ended the merger deal with Room Plus, causing steep losses for Room Plus and setting the stage for its subsequent filing. (ABI 28-Apr-99) SERVICE MERCHANDISE: Receives Approval of $750M DIP ---------------------------------------------------- Service Merchandise Company, Inc. (NYSE:SME) announced that it has received final approval from the Bankruptcy Court of its $ 750 million debtor-in-possession (DIP) financing agreement to fund the Company's operations during its restructuring process. The DIP agreement calls for the Company's current senior lenders led by Citicorp USA, Inc., as administrative agent, Bank Boston, N.A., as documentation agent and collateral monitoring agent, and Salomon Smith Barney Inc., as sole arranger and book manager to provide $ 750 million in post-petition financing to Service Merchandise to purchase goods and services and fund the company's ongoing operating needs during its voluntary restructuring under Chapter 11, which commenced on March 27, 1999. The Company said during yesterday's Court proceedings that it intends to exit Chapter 11 prior to the maturity of the loan in June 2001. The Company will file a Form 8-K with the Securities and Exchange Commission which sets forth its three-month borrowing base and borrowing availability projections under the DIP facility prepared in connection with the Court's approval of the final DIP order. The forecast projects a borrowing base which ranges from $ 514 million to $ 544 million over the period from May 2, 1999 to July 18, 1999, and unused borrowing availability which ranges from $ 165 million to $ 195 million. The projected amounts available are subject to a reserve of $ 50 million until the Company has presented its 1999 Chapter 11 Operating Plan and the plan has been approved by its lenders. The Court also scheduled for May 5, 1999 consideration of the Company's employee retention program. In other actions, the Court approved the Company's motion to establish vendor reclamation procedures; its motion to retain the Keen Venture, a joint venture of Keen Realty Consultants, Inc., Trammell Crow Retail Services and Dean & Associates, to market its surplus real estate properties; and its motion to reject certain real property leases. The Company has also rejected the leases of two former corporate aircraft. The Court also finalized retention of the law firms and financial advisors for the Company and the Creditors' Committee. Service Merchandise and its subsidiaries filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Middle District of Tennessee in Nashville on March 27, 1999. Service Merchandise is a specialty retailer focusing on fine jewelry, gifts and home decor products. SHOLODGE: Annual Meeting Set ---------------------------- The Annual Meeting of Shareholders of ShoLodge, Inc. will be held at 9:00 a.m. Central Daylight Time on Friday, May 28, 1999, at the Sumner Suites Hotel, 330 East Main Street, Hendersonville, Tennessee to elect two Class II directors, each to hold office for a term of three years and until a successor is elected and qualified. SPECTRAN: Annual Meeting of Stockholders Set For May 28 ------------------------------------------------------- The Annual Meeting of the Stockholders of SpecTran Corporation will be held at The Fairmont Copley Plaza Hotel, 138 St. James Avenue, Boston, Massachusetts, on May 28, 1999, at 10:00 a.m. (local time), for the following purposes: 1. To elect three Directors of the Company to hold office for a three-year term; 2. To consider and vote upon the ratification of the reservation of 345,000 additional shares of the Company's authorized but unissued shares of Common Stock for issuance under the Company's Incentive Stock Option Plan; 3. To consider and vote upon the ratification of the appointment of KPMG Peat Marwick, LLP as independent certified public accountants for the Company for the year January 1, 1999 through December 31, 1999. WANG LABORATORIES: Quarterly Report Filed with SEC -------------------------------------------------- For the three months ended September 30, 1998, Wang Laboratories Inc. and its subsidiaries reported revenues of $786.0 million, a $473.8 million increase compared to revenues of $312.2 million for the same prior year period, primarily attributable to the Olsy acquisition. The Company reported an operating loss of $16.0 million for the three months ended September 30, 1998, compared to operating income of $10.1 million for the three months ended September 30, 1997.For the three months ended September 30, 1998, Wang Laboratories Inc. reports a net loss of $22.8 million compared to a net loss of $11 million for the same period in the prior year. EBITDA for the three months ended September 30, 1997 was $39.2 million and is calculated by adjusting income from operations of $10.1 million depreciation and amortization expenses of $15.3 million and $7.0 million, respectively, and other income of $6.8 million. For the three months ended September 30, 1997, cash used in operating, investing and financing activities was $16.9 million, $9.9 million and $36.2 million, respectively. ********* 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. 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