/raid1/www/Hosts/bankrupt/TCR_Public/990513.MBX
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, May 13, 1999, Vol. 3, No. 92
Headlines
AMNEX INC: Case Summary & Largest Unsecured Creditors
BRE-X: Former Executive Charged
CLARK BAR: Necco Wins Bid
CRESCENT PUBLIC: Case Summary & 20 Largest Creditors
EIP MICROWAVE: Announces Chapter 11 Filing
FORCENERGY: Objections To Use of Cash Collateral
FORCENERGY: North Central Oil Seeks To Recoup Expenses
FRANKEL'S HOME: Order Authorizes GOB Sales
GOLDEN BOOKS: Announces Shareholders To Receive Warrants
LOEWEN GROUP: Reports First Quarter Results
MEDPARTNERS: Court Approval for Agreement With California
NU-KOTE: Files Motion To Sell European Hardcopy
NU-KOTE: Files Plan of Reorganization
PARAGON TRADE: Announces First Quarter Loss
PITTSBURGH PENGUINS: Judge Rejects League's Request
PRIMESTAR: Bondholders Obtain Enhanced Deal
SALANT CORP: Emerges From Bankruptcy
SERVICE MERCHANDISE: Employee Retention Program Approved
SOURCEONE WIRELESS: Files Bankruptcy Petition
STARTER CORP: NFL Properties Seeks Relief
TELEGROUP INC: Bank Seeks To End Cash Management Services
USCI: Agreement Signed With Preferred Stockholders
VOICE IT WORLDWIDE: Seeks Approval For New Contract
VOICE IT WORLDWIDE: Seeks to Employ Dillon-Gage Securities
WIRELESS ONE: Assignment of Senior Secured Notes
WIZ: Sues AT&T Unit For Cellular Phone Commissions
*********
AMNEX INC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: AMNEX,INC.
14 Commerce Drive
Danbury, CT 06810
Defendant: Jackson National Life Insurance Company
Type of business: Through its subsidiaries the debtor
engages in various aspects of the telecommunications
business including providing operator assisted services and
owning and operating payphones.
Court: Southern District of New York
Case No.: 99-21110 Filed: 05/05/99 Chapter: 11
Debtor's Counsel:
Jeff J. Friedman
A. Peter Lubitz
Kirk L. Brett
Rosenman & Colin LLP
575 Madison Avenue
New York, NY 10022-2585
(212) 940-8800
Total Assets: $77,024,081
Total Liabilities: $82,075,180
No. of shares of preferred stock-535 1 holder
No. of shares of common stock-45,494,271 1,020 holders
20 Largest Unsecured Creditors:
Name Nature Amount
---- ------ ------
Marine Midland Bank 8-1/2% Convertible 15,000,000
Subordinated Notes
Due 2002
AT&T Corp. Services 12,300,000
Rotterdam Ventures Inc. Promissory Notes 1,865,000
Telecom Services Settlement Agreement 2,200,000
Francesco Galesi 6,665,000
Robert A. Rowland Promissory Note/stock 1,000,000
purchase agreement
Peter M. Izzo Jr. Employment agreement 350,000
Stroock & Stroock & Lavan Attorney's fees 320,000
Dolphin, USA, Inc. Agreed Judgment 250,000
R.R. Donnellley & Sons Services performed 228,000
Settlement
Morrison & Foerster LLP Legal Fees 328,070
Hudson Telegraph Assoc., Inc. Lease Obligations
Galesi Enterprises Agent for leased Premises 86,562
BRE-X: Former Executive Charged
-------------------------------
The Ontario Securities Commission has charged former Bre-X
Minerals Ltd. vice-chairman John Felderhof with violating
the province's securities laws relating to the 1997 Busang
gold mining scandal in Indonesia.
The Commission announced it has filed eight charges against
Felderhof, accusing the longtime mining industry executive
of insider trading and other violations of provincial
securities laws.
The Royal Canadian Mounted Police is also investigating
Felderhof for possible violations of Canada's Criminal
Code.
The Busang site in Indonesia was once touted as one of the
biggest gold discoveries in history. Bre-X Minerals shares,
which started out worth 30 cents apiece on the junior
Alberta Stock Exchange, became an instant heavyweight on
the prestigious Toronto Stock Exchange. But after seeing
its stock price rise to more than $200 a share, the
Calgary-based exploration company collapsed after an
investigation proved its Indonesian gold property was a
fraud.
The commission alleges that between April 24, 1996 and
September 10, 1996 Felderhof was involved in insider
trading of more than 2.7 million shares of Bre-X for about
$83.9 million "with knowledge of a material fact pertaining
to rights of Bre-X in relation to the Busang properties
that had not been generally disclosed."
A further four counts allege that between June 20, 1996 and
Feb. 17, 1997 Felderhof "authorized, permitted or
acquiesced" in Bre-X issuing misleading or untrue press
releases about the amount of gold at Busang.
The commission said Tuesday that as a strict liability
offense, it's not necessary to prove whether Felderhof knew
at the time that the gold estimates were false.
"The issue, for the commission, is not whether or not he
knew that the resource calculations were misleading or
untrue," said Conacher. "But given his position with the
company, it's his responsibility to establish that they
were not misleading or untrue."
CLARK BAR: Necco Wins Bid
-------------------------
The country's oldest candy maker and producer of Necco
Wafers is the new owner of Pittsburgh's signature Clark Bar
and plans to move production of the candy to Massachusetts.
New England Confectionery Co., beating out a handful of
other bidders, agreed in U.S. Bankruptcy Court on Tuesday
to pay $4.1 million for the peanut butter crunch Clark Bar.
The production line will be moved to Cambridge in the next
month or so, leaving more than 100 people without jobs.
Irish immigrant D.L. Clark founded the Clark Bar in 1886,
but in recent years the company has fallen on hard times,
dwarfed by large national brands such as Mars and Hershey.
The company has been operating under protection from
its creditors since March and owes $6.6 million.
CRESCENT PUBLIC: Case Summary & 20 Largest Creditors
----------------------------------------------------
Debtor: Crescent Public Communications Inc.
145 Huguenot Street
New Rochelle, New York, 10801
Type of business: The debtor and its 80 percent-owned
subsidiary, Sun Tel North America, Inc. are engaged in the
business of owning and operating private payphones located
principally in NY, NJ, PA, and FLA.
Court: Southern District of New York
Case No.: 99-10183 Filed: 05/10/99 Chapter: 11
Debtor's Counsel:
Jeff J. Friedman
A. Peter Lubitz
Kirk L. Brett
Rosenman & Colin LLP
575 Madison Avenue
New York, NY 10022-2585
(212) 940-8800
Total Assets: $22,742,025
Total Liabilities: $24,940,024
20 Largest Unsecured Creditors:
Name Nature Amount
---- ------ ------
Bell Atlantic - JN trade debt 437,258
ELCOTEL,Inc. trade debt 95,031
Seven Ocean Enterprises trade debt 63,514
Independent Enclosures trade debt 34,342
WERE Associates trade debt 19,436
NYC Dept. of Finance tax 15,208
City of Newark tax 12,957
Northeast Lock Corp. tax 12,089
Firestone Tire & Service Cent. trade debt 9,574
City of Paterson tax 8,200
Exxon Card Services trade debt 7,455
Metroclean Express trade debt 7,289
Lyon Credit Corp. trade debt 5,891
Access Temporaries, inc. trade debt 4,687
Servtell Inc. trade debt 4,354
Bernard Hodes Advertising trade debt 4,138
New Way Trading (NY) Inc. trade debt 3,875
The Pimlico Group trade debt 3,610
Bell of PA trade debt 3,365
Brook-Tel MSG & Supply Co. trade debt 3,325
EIP MICROWAVE: Announces Chapter 11 Filing
------------------------------------------
EIP Microwave, Inc. (OTC BB:EIPM) announced that it has
filed a petition under Chapter 11 of the U.S. Bankruptcy
Code. The case was filed in the Northern District of
California, San Jose division as Case No. 99-53102 JRG-11.
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". The principle
assets of the EIP are located at the company's facility in
San Jose, California. EIP ceased active operations of
its business on or about February 16, 1999.
Over the past few months, management of EIP has been
engaged in an intensive effort to obtain a purchaser or
purchasers for the assets of EIP. Efforts have
been made to achieve a sale that recognizes the going
concern value of the assets. Management of EIP has
negotiated directly with four different competitors, with
former employees and with four different liquidators.
EIP has also filed a motion in the Bankruptcy Court that
seeks authorization to sell the majority of its assets to
Phase Matrix, Inc. A motion to approve overbid procedures
has been approved by the Bankruptcy Court. Further
Information regarding the proposed sale of assets may be
obtained by contacting Tom Linnemann at 503/598-2605, or
the company's bankruptcy counsel, Todd Ringstad at 949/851-
7450.
The hearing on the motion to sell assets is scheduled to be
held at the Bankruptcy Court in San Jose on June 8, 1999 at
2 p.m.
FORCENERGY: Objections To Use of Cash Collateral
------------------------------------------------
Apache Corporation, The Coastal Entities and PennzEnergy
Exploration and Production object to the motion of
Forcenergy Inc. and its affiliates seeking authorization
for the use of cash collateral.
The objecting parties are all creditors of the debtor. They
object saying that costs of operation and expenses for
repair, maintenance, exploration and/or development are
being incurred daily, post-petition. These costs are
necessary for the extraction, production and development of
the various oil and gas properties and should be required
to be paid prior to any payments or proceeds being received
by the Bank Group, or prior to granting the Bank group
replacement liens on any of the debtors' collateral.
FORCENERGY: North Central Oil Seeks To Recoup Expenses
------------------------------------------------------
North Central Oil Corporation has filed a motion for leave
to recoup operating expenses against production and the
proceeds therefrom. North Central purchased a one-third
interest in the South Pass Block 24 field in Plaquemines
Parish, Louisiana. North Central became the South Pass
operator by agreement of the parties. To date, Forcenergy
is past due in payment of approximately $1.5 million to
North Central for two-thirds of South Pass operating costs.
North Central argues that the proceeds from production fall
without the bankruptcy estate and North Central's
recoupment of those costs against production and proceeds
from production does not violate the automatic stay.
However, if the court deems recoupment unavailable North
Central alternatively requests the entry of an order
lifting the automatic stay to allow North Central to set
off the amounts owed by Forcenergy against production and
production proceeds attributable to Forcenergy.
FRANKEL'S HOME: Order Authorizes GOB Sales
------------------------------------------
The US Bankruptcy Court for the Southern District of New
York entered an order authorizing the debtor, Frankel's
Home Furnishings, Inc., to conduct certain "going-out-of-
business" sales at the debtor's 15 remaining locations, and
to sell or otherwise dispose of the merchandise
inventories, furniture, fixtures and equipment at the
closing stores. The court approved an Agency agreement
with Hilco/Great American Group, as the debtor's agent to
conduct such sales. The guaranteed amount to be paid to
the debtor is the sum of 31% of the aggregate retail price
of the merchandise plus the payment of all expenses.
GOLDEN BOOKS: Announces Shareholders To Receive Warrants
--------------------------------------------------------
Golden Books Family Entertainment, Inc. today releases the
following information correcting and elaborating on a
report issued yesterday by Bloomberg.com:
Pursuant to the Plan of Reorganization filed with the
Bankruptcy Court, existing common and preferred
shareholders of the Company will receive out-of-the-money
warrants to purchase 5% of the new Company's stock to
be allocated two-thirds to the preferred shareholders and
one-third to the common shareholders, to be issued post-
recapitalization and prior to dilution. Such warrants shall
be exercisable until the third anniversary of the
confirmation of the Plan of Reorganization at a price
significantly above the stated value of the common stock
on the confirmation date.
LOEWEN GROUP: Reports First Quarter Results
-------------------------------------------
The Loewen Group Inc. (NYSE, TSE, ME: LWN), one of the
largest funeral home and cemetery operatorn North America,
today announced revenues for the first quarter ended March
31, 1999, of $311 million, compared to $310 million in the
same period last year. Net income for the first quarter of
1999 was $7 million or $0.06 per share, versus $30 million
or $0.38 per share in the first quarter of 1998.
Funeral home revenues for the quarter were $175 million, an
increase of 2.2 percent from $172 million in the first
quarter of 1998.
First quarter cemetery revenues were down 3.2 percent to
$112 million, compared to $115 million in the first quarter
of 1998.
"While our core funeral business is fundamentally sound and
we have taken steps to improve the negative cash flow from
the cemetery division," said Loewen Group Chairman John S.
Lacey, "we are facing extreme difficulties with
our highly leveraged balance sheet and the resulting
negative cash flow, which is impeding our ability to
improve the operations of our Company."
Mr. Lacey was appointed chairman in January 1999, to lead
the Loewen Group in addressing the Company's challenges
related to its high leverage and impending debt maturities.
At the same time, Mr. Lacey and the Company's Board have
been implementing strategies to increase the profitability
and cash flows of the Loewen Group's operations.
During the past three years, the Company said its growth
plan had emphasized cemetery acquisitions versus a
historical emphasis on funeral home acquisitions. The
Company experienced difficulties in integrating new
cemeteries and was impacted by recently declining cemetery
and funeral home valuations.
The Company said the negative cash flow from operations was
primarily attributable to the rapid increase in poorly
structured cemetery pre-need sales.
As previously announced on March 31, 1999, the Company
entered into revised lending agreements with the lenders
under its bank credit agreement, Management Equity
Investment Plan bank term credit agreement and certain
other notes. The amendments change and add certain
financial covenants, suspend all Common, Preferred and
Monthly Income Preferred Security dividends, provide no
further borrowings under its bank credit agreement except
for certain letters of credit, and require refinancing of
the $300 million pass-through asset trust guaranteed notes
(``PATS senior notes'') by September 15, 1999.
On the same day, the Company completed the sale of 124
cemeteries and three funeral homes for gross proceeds of
$193 million, $127 million of which was used to reduce
indebtedness. The asset disposition resulted in an
estimated pre-tax loss of approximately $302 million, which
was reflected in the Company's 1998 financial results as an
asset impairment. Gains or losses on other groups
of assets sold, if any, could be small or significant
depending upon the specifics of the transaction.
There is substantial doubt about the appropriateness of the
going concern assumption because of recent losses and
continued negative cash flows. There is also uncertainty as
to the Company's ability to refinance the PATS senior
notes which may be redeemed on October 1, 1999 and which
require refinancing by September 15, 1999 under the terms
of amended credit agreements. In the event that the Company
cannot mitigate the adverse conditions and events which
raise doubt about the validity of the "going concern"
assumption, the Company or its creditors may initiate
proceedings for the liquidation or reorganization of the
Company under Canadian and/or U.S. bankruptcy laws.
Based in Vancouver, the Loewen Group Inc. owns or operates
more than 1, 100 funeral homes and more than 400 cemeteries
across the United States, Canada, and the United Kingdom.
The Company employs approximately 16,000 people and
derives approximately 90 percent of its revenue from its US
operations.
MEDPARTNERS: Court Approval for Agreement With California
---------------------------------------------------------
MedPartners Inc., (NYSE: MDM) and the State of California
reached an interim agreement to begin implementation of the
principal terms of the previously announced proposed
settlement agreement regarding MedPartners' California
physician management operations. As part of the interim
agreement, the California Department of Corporations
("DOC") stayed its prior orders and sought and received
approval of the Superior Court of the State of California
to effectively implement the interim agreement pending the
completion of and final approval by the US Bankruptcy Court
of the anticipated definitive settlement agreement.
MedPartners said the interim agreement will allow it to
proceed with its transition plan for the orderly and timely
disposition of the existing operations of MedPartners
Provider Network Inc. (MPN) and MedPartners' California
physician practices assets. In particular, the interim
agreement provides the following:
-- MPN's property, business and assets shall be returned
immediately to MPN, which will be managed by MedPartners,
Inc. and operate as a debtor in possession under the U.S.
Bankruptcy Code;
-- A special monitor appointed by the State shall provide
oversight and supervision of MPN and will maintain certain
operational controls over MPN pending approval by the
Bankruptcy Court of the definitive settlement agreement;
-- MedPartners will fund, as contemplated in its transition
plan, the working capital requirements of its subsidiaries
to enable the normal continuing operations of the managed
physician practices including the timely payment of
adjudicated provider claims.
NU-KOTE: Files Motion To Sell European Hardcopy
-----------------------------------------------
Nu-kote Holding, Inc. (OTC Bulletin Board: NKOT) announced
today that as part of its overall strategic objective of
restructuring its global operations, the Company has
negotiated a contract for the sale of its European Hardcopy
supply business. The Company has filed a motion in the
United States Bankruptcy Court for the Middle District
of Tennessee seeking approval for the sale.
The terms of the proposed sale provide consideration of
$16.5 million to the Company in exchange for 100% of the
shares of stock in certain European subsidiaries. The
proposed sale procedure permits any other party to make an
offer to purchase the subsidiaries.
The Company's North American operations will retain the
rights to market its products under the Pelikan brand name
in North America and Mexico, with the purchaser having the
right to market its products under the Pelikan brand name
throughout the rest of the world. In addition, the Company
will continue to market its products under the Nu-kote
brand name anywhere in the world. The Company will also
maintain its operations in France.
NU-KOTE: Files Plan of Reorganization
-------------------------------------
Nu-kote Holding, Inc. (OTC Bulletin Board: NKOT) announced
the filing of its Plan of Reorganization to emerge
from its Chapter 11 proceeding now pending in Nashville,
Tennessee. Nu-kote's Plan provides for the cancellation
of the existing shares of Nu-kote Holding, Inc., and the
sale of newly issued shares to an affiliate of Richmont
Capital Partners I, L.P., or to any other entity that
presents a better offer for the Company's creditors. In
connection with the Plan, Nu-kote intends to employ an
investment banker to solicit offers for the company's stock
or assets in an effort to ensure that the best value is
obtained for the company's creditors.
Nu-kote's President, Patrick E. Howard, stated: "As
proposed, the Plan provides for a substantial infusion of
new equity capital and a re-financing or re-capitalization
of a portion of the company's debt obligations. We believe
that the consummation of the Plan will be a very positive
step for Nu-kote's long-term growth and stability, and one
which will provide a great benefit for Nu-kote's employees,
creditors, and customers." The Plan provides for Nu-
kote's continuation as a going concern, and the company
intends to continue offering its full line of products and
services to its customers on a global basis.
Nu-kote's Plan will be submitted to creditors for their
consideration and vote, and to the Court for approval,
after the related Disclosure Statement is approved.
PARAGON TRADE: Announces First Quarter Loss
-------------------------------------------
Paragon Trade Brands, Inc. (NYSE: PTB) reported a net loss
of $7.2 million, or $.60 per share, for the quarter
ended March 28, 1999 compared to net earnings of $6.0
million, or $.50 per share for the first quarter of 1998.
Net sales for the quarter were $126.2 million, compared to
$138.3 million for the first quarter of 1998. Earnings
before interest, taxes, depreciation and amortization and
bankruptcy costs (EBITDA) for the first quarter totaled
$2.7 million.
The Company believes that the decrease in sales was due to
a number of factors, including some previously announced
product performance issues and competitive pressures
related to pricing and promotional activities.
PITTSBURGH PENGUINS: Judge Rejects League's Request
---------------------------------------------------
Bankruptcy Judge Bernard Markovitz rejected the National
Hockey League's (NHL) request to move up a June 24 hearing
on Mario Lemieux's plan to save the Pittsburgh Penguins,
but he did grant the league a faster track for an initial
hearing on its own plan to reorganize the team, according
to The Pittsburgh Post-Gazette. The NHL's plan could
involve selling the team for $85 million to an unidentified
party, who would move the franchise to another city. The
NHL did state that it would like the team to remain in
Pittsburgh and that the unnamed buyer represents a "fall-
back" position if efforts to reorganize the team's finances
fail. The city's mayor said the NHL has done nothing for
the Penguins and that the court has already ruled that
moving the team is not an option. Separately, in a
mediation session with creditors, Bankruptcy Judge M. Bruce
McCullough said the NHL was preparing three schedules for
next season, one with the team in Pittsburgh, one with it
on the West Coast, and a third schedule that does not
include the team. (ABI 12-May-99)
PRIMESTAR: Bondholders Obtain Enhanced Deal
-------------------------------------------
The Satellite News reports on May 11, 1999 that Primestar
[TSATA] bondholders received cash and stock appreciation
rights (SARs) worth 97 cents for each $1 in bonds they own,
compared with the original offer of 67 cents for each $1 in
debt held. The additional $250 million that needed to be
offered to satisfy the bondholders will be paid by
Primestar's cable TV-led owners that struck the deal with
Hughes, the parent company of DirecTv Inc.
Primestar's value tanked when the Justice Department
blocked the company's plans to acquire a proposed high-
power service, ASkyB, from News Corp. [NWC] that would use
small, 18- inch satellite dishes. Instead, Primestar was
left with its slow- growing medium-power service that uses
bigger dishes that consumers increasingly have been
shunning.
The completion of the Hughes buyout effectively adds
Primestar's 2.3 million subscribers to the 4.8 million
subscribers of Hughes' DirecTv unit. Hughes paid a purchase
price of $1.1 billion in cash and 4.87 million shares of
Hughes stock. Ultimately, Primestar agreed to pay its
bondholders and bridge note holders 97 cents on the dollar
- 85 cents in cash and the remainder in SARs tied to the
price of Hughes stock at this time next year. Copyright
Phillips Publishing, Inc.
SALANT CORP: Emerges From Bankruptcy
------------------------------------
Salant Corporation announced today that it has
successfully emerged from chapter 11 reorganization four
and half months after filing for protection on December 29,
1998. Salant also announced today that it has entered into
a new $85 million revolving credit facility with The
CIT Group/Commercial Services, Inc., its existing working
capital lender.
Salant's chapter 11 plan of reorganization, which was
confirmed by the Bankruptcy Court on April 19, 1999, has
now become effective. Under the Plan, Salant's existing
common stock will be cancelled and (i) all of the
outstanding principal amount of Salant's 10-1/2% Senior
Secured Notes, plus all accrued and unpaid interest
thereon, will be converted into 95% of Salant's new common
stock, subject to dilution; (ii) all of Salant's existing
common stock will be converted into 5% of Salant's new
common stock, subject to dilution; and (iii) all other
claims (including, without limitation, general unsecured
claims (e.g., trade claims)) will be unimpaired. Under
the Plan, each $1,000 principal amount of Senior Notes
(together with all accrued and unpaid interest thereon)
will be exchanged for approximately 91 shares of Salant's
new common stock and each share of old common stock will
be exchanged for approximately .033 shares of Salant's new
common stock.
Michael Setola, Salant's Chairman and Chief Executive
Officer, stated, "We are excited about a deleveraged Salant
and its prospects for future growth and profitability in
the months and years ahead." Mr. Setola further commented,
"We appreciate the dedication to Salant of our lenders,
trade creditors* and employees. Salant's restructuring
would not have been successful without their support. We
look forward to a bright future with the continued support
of these most valued partners in our business."
SERVICE MERCHANDISE: Employee Retention Program Approved
--------------------------------------------------------
The Tennessean reports on May 6, 1999 that Service
Merchandise Company Inc. received final federal court
approval yesterday for an employee retention program aimed
to improve morale and reduce turnover during the retailer's
bankruptcy restructuring period.
"It's critically important to us," said Sam Cusano, chief
executive officer, after yesterday's bankruptcy court
hearing in front of Judge George C. Paine II.
The company's program includes components of "stay" bonuses
to encourage employees not to leave, annual incentives
based on company performance, and severance packages.
The plan affects about 900 employees, including hundreds of
store managers, jewelry managers and assistant managers, as
well as about two dozen upper-level managers, key employees
and executives. It also provides money for use as needed to
retain certain employees.
For Service Merchandise employees, the retention program
alleviates apprehension and uncertainty and allows them to
focus on the business, Cusano said.
"It gives them financial security in the process," he said.
Maximum cost for the 18-month program is about $18.8
million for "stay" bonuses and about $5 million for
performance-based incentives, the company said.
SOURCEONE WIRELESS: Files Bankruptcy Petition
---------------------------------------------
The debtor, SourceOne Wireless, Inc. filed a Chapter 11
bankruptcy petition in the US Bankruptcy Court for the
Northern District of Illinois, on April 29, 1999. The case
number is 99-13841. The debtor's address is 1040 S.
Milwaukee Ave., Wheeling, IL 60090
The debtor's attorney is:
Mark A. McDermott
Hopkins & Sutter
Three, First National Plaza
Chicago, Illinois 60602
312-558-6600
Counsel to the Official Committee of Unsecured Creditors:
Barry Chatz
Kamensky & Rubinstein
7250 N. Cicero Avenue
Lincolnwood, IL 60646
STARTER CORP: NFL Properties Seeks Relief
-----------------------------------------
National Football League Properties, Inc. ("NFL
Properties") is one of Starter Corporation's twenty largest
unsecured creditors. NFL Properties seeks an order
compelling Starter Corporation to immediately assume or
reject five purported NFL Properties license agreements.
NFL Properties is responsible for the licensing of
companies to use the trademarks of the NFL and Member Clubs
to produce products for retail sale. NFL Properties states
that the most valued licenses are PRO LINE licenses. These
products are worn by the professional athletes as emblems
on game uniforms. NFL Properties says that Starter will
not and cannot meet its obligations or assign its
obligations under the PRO LINE licenses. Starter has
been disabled by the loss of some two-thirds of its
employees and the recent departure of its founder and CEO
David Beckerman, and the lack of necessary financing.
Starter recently asked the court for expedited
consideration of procedures to liquidate $70 million of
inventory at discounted prices. "This is neither the
conduct of a company that intends to continue operation in
the normal course, nor one with the capacity or motivation
to finance and honor its critical obligations under the PRO
LINE licenses."
NFL Properties says that it must select a replacement
licensee in consultation with the seven Member Clubs
currently assigned to Starter.
NFL Properties asks that the court compel Starter
Corporation to reject the license agreements as NFL
Properties asserts that Starter Corporation can no longer
perform the agreements.
TELEGROUP INC: Bank Seeks To End Cash Management Services
---------------------------------------------------------
American National Bank and Trust Company of Chicago ("ANB")
seeks an order confirming the bank's right to terminate
existing cash management services and merchant banking
services with the debtor, or in the alternative, vacating
the automatic stay in order to terminate such services.
ANB currently provides to the debtor a variety of cash
management services, some of which are known as merchant
banking services, through a multitude of bank accounts
which the debtor established prepetition with ANB. The
services prove a funds transfer capability and funds
concentration services for the debtor, essentially on an
unsecured or undersecured basis. ANB is at unlimited risk
at each point of providing the service, that is, at any
point the creditor status can be reversed leaving the
accounts with insufficient funds. ANB has the right to
terminate the contracts at will by the terms of the
contracts by giving the debtor 30 day written notice. The
Bank seeks a court order declaring their right to terminate
the contract. ANB requests that if the stay must be lifted,
the Bank requests that it be permitted to lift the
automatic stay and immediately terminate the Agreements.
USCI: Agreement Signed With Preferred Stockholders
--------------------------------------------------
USCI, Inc. (OTCBB:USCM) announced that it has concluded an
agreement with the holders of all of the outstanding shares
of Preferred Stock of the Company. Pursuant to the
Agreement, the Company has agreed to convert an aggregate
of $1.5 million stated value of its Preferred Stock into 75
million shares of the Company's Common Stock at $0.02 per
share, the then prevailing conversion price under
certain series of the Preferred Stock.
The Agreement also provides that all defaults with respect
to the Preferred Stock have been waived, all future
dividends accruing to the Preferred Stock have been waived,
and all of the options and warrants held by the holders of
the Preferred Stock have been cancelled.
Additionally, a Preferred Shareholder and certain other
persons have entered into a Participation Agreement with
Foothill Capital Corp. in connection with the restructuring
of the outstanding $20 million credit facility provided
by Foothill Capital Corp. to USCI's wholly-owned
subsidiary, Ameritel Communications, Inc. An aggregate of
$7 million has been made available by the participants in
the Foothill facility as term loans. Although the limit
of the credit facility has been reduced from $20 million
to $17.5 million, the $7 million allocated for term loans
will be available for working capital upon certain
conditions. Two million dollars has already been advanced.
The balance of the $10.5 million limit has been structured
as part revolver, part term loan and part letters of
credit.
The Agreement with the holders of the Preferred Stock also
provides that the current Board of Directors of the Company
will be replaced and a new Chief Executive Officer not as
yet named will replace Bruce A. Hahn as CEO, at his
request. Mr. Hahn has agreed to remain an executive
officer of the Company to devote his energies to the
continued development and execution of the Company's
new prepaid cellular and e-commerce business strategies.
The Company also reported that it has retained Howard
Zuckerman as an independent consultant with respect to
Company operations and to assist in negotiating settlements
with its trade creditors. Considerable progress has
been made in reaching agreements with trade creditors to
settle outstanding claims and structure long-term payment
plans. Mr. Zuckerman is continuing to restructure the
operations of the Company and negotiate settlements with
trade creditors on behalf of the Company and for his
services, the Company, as part of the compensation, issued
to Mr. Howard Zuckerman for investment 5,000,000 shares of
the Company's Common Stock.
USCI, Inc., through its wholly-owned subsidiary, is a non-
facilities based carrier of wireless services. Its
Ameritel subsidiary provides wireless coverage and billing
to consumers for analog and digital cellular service,
debit cellular service and paging service.
VOICE IT WORLDWIDE: Seeks Approval For New Contract
---------------------------------------------------
The debtor, Voice It Worldwide, Inc., seeks approval of a
new contract with Dragon Systems Inc., the largest single
purchaser of the debtor's product. The new contract
provides a two-year term, minimum purchase requirements for
Dragon in the first year of 180,000 units and 200,000 units
in the second year. Payment terms require net ten days
from receipt for deliver and net 30 days after May 31,
2000. There are specific provisions for Dragon's issuance
of non-cancellable purchase orders on a monthly basis for
delivery within a 90 day period.
VOICE IT WORLDWIDE: Seeks to Employ Dillon-Gage Securities
----------------------------------------------------------
The debtor, Voice It Worldwide, Inc. seeks to employ
Dillon-Gage Securities, Inc. ("DGS") to provide investment
banking services to the debtor. An initial engagement fee
of $5,000 is required.
The debtor would use DGS to provide investment banking
services to the debtor and to assist the debtor in
obtaining financing for use as working capital. In the
event that the debtor accepts financing during the term of
the agreement with DGS, DGS will be entitled to a
transaction fee equal to the greater of 2.5% of the total
financing consummated or $25,000 and certain equity
securities.
WIRELESS ONE: Assignment of Senior Secured Notes
------------------------------------------------
Merrill Lynch Global Allocation Fund, Inc. has assigned all
of its right, title and interest in and to the debtor's 15%
Senior Secured Notes due August 12, 1999 issued pursuant to
the February 12, 1999 Amended and Restated Note Purchase
Agreement between the debtor, Wireless One Inc. and Merrill
Lynch Global Allocation Fund Inc. to MCI WORLDCOM, Inc. and
MCI WORLDCOM is now the holder of such Notes.
WIZ: Sues AT&T Unit For Cellular Phone Commissions
--------------------------------------------------
NYEC Inc. f/k/a The Wiz Inc. and its official unsecured
creditors committee have filed a nearly $2 million lawsuit
against AT&T Wireless Services Inc. claiming breach of
contract, unjust enrichment and violation of the automatic
stay. The May 6 suit filed charges that AT&T Corp.'s
(T) wholly owned subsidiary failed to uphold a cellular
telephone sales and distribution contract with the
electronics retailer. (The Daily Bankruptcy Review and ABI
Copyright c May 12, 1999)
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