/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/990603.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, June 3, 1999, Vol. 3, No. 106 Headlines ADVANCED GAMING: Second Amended Disclosure Statement ADVANTICA RESTAURANT: Denny's Buys 30 New York Restaurants AGISS CORP: Announces Wholly Owned Sub Files For Bankruptcy AL TECH: Seeks Continued Use of Cash Collateral BN1 TELECOMMUNICATIONS: Disclosure Statement and Liquidating Plan BRUNO'S: Files Disclosure Statement, Reorganization Plan CF&I STEEL: PBGC Loses Appeal CFS: Law Firm Delivers $1.6 Million Bill COLONIAL DOWNS: Off NASDAQ, Now Found On SmallCap DOW CORNING: Women Accept Joint Plan EAGLE PICHER: Acquires 100% Of Outstanding Stock In Charterhouse EDISON BROS: Finds Buyers For Many Of Its Chains EL MOROCCO: Closes After 56 Years FPA MEDICAL: Coastal Physician Announces Confirmation of Plan FPA MEDICAL: Humana To Run Clinics Again HARNISCHFEGER: Seeks Funding After $74.3 Million Loss INSILCO HOLDING: To Sell Buffalo, NY Operation LOEWEN GROUP: DCR Downgrades Loewen Group Ratings To 'DD' LOEWEN GROUP: Files Chapter 11 MONTGOMERY WARD: Extension of DIP Facility NEWMONT MINING: Earnings Up, Future Hugely Dependent On Gold Price PARAGON TRADE: Equity Committee's Findings Re: P&G Settlement PARAGON TRADE: Equity Committee Seeks To Prosecute Claims PARAGON TRADE: Equity Objects To Settlement With Kimberly-Clark PENN TRAFFIC: Restructuring Effective in Two Weeks PHILIPPINE AIR: PAL seeks help from Lufthansa PHOENIXSTAR: Sells Assets To Hughes Electronics/Losses Persist SUN HEALTHCARE: Group Defaults on Debt, Considers Bankruptcy SYBASE INC: Acquisitions Continue While Net Income Is Up TRANSTEXAS: Accounts Receivable Management and Security Agreement TWA: Union critical of Offer; Strike Deadline Will Probably Extend UNITED COMPANIES: Completes Sale of Retail Lending Platform VENCOR INC: Obtains Waiver On Credit Facility, Subject To Conditions WET SEAL: Class A Common Stock On The Block WILSHIRE CREDIT: Reviewed by Fitch IBCA ********* ADVANCED GAMING: Second Amended Disclosure Statement ---------------------------------------------------- On May 11, 1999, R. Clive Jones, US Bankruptcy Judge for the District of Nevada entered an order approving the Disclosure Statement of Branson Signature Resorts, Inc., a Nevada corporation and Advanced Gaming Technology, Inc., a Wyoming corporation. ADVANTICA RESTAURANT: Denny's Buys 30 New York Restaurants ---------------------------------------------------------- Advantica Restaurant Group, Inc., together with its subsidiaries including predecessors, through its wholly-owned subsidiaries, Denny's Holdings, Inc. and FRD Acquisition Co. (and their respective subsidiaries), owns and operates the Denny's, Coco's, Carrows, and El Pollo Loco restaurant brands. On April 1, 1998, the company consummated the sale of Flagstar Enterprises, Inc., the wholly-owned subsidiary which had operated Hardee's restaurants under licenses from Hardee's Food Systems. In addition, on June 10, 1998, the company consummated the sale of Quincy's Restaurants, Inc., the wholly-owned subsidiary which had operated the company's Quincy's Family Steakhouse restaurants. In March 1999, Denny's, Inc., a wholly-owned subsidiary of the company, purchased 30 operating restaurants in western New York from Perk Development Corp., a former franchisee of Perkins Family Restaurants, L.P. The purchase price of approximately $24.7 million, consisting of cash of approximately $10.9 million and capital leases and other liabilities assumed of approximately $13.8 million, exceeded the estimated fair value of the restaurants' identifiable assets by approximately $9.5 million. Denny's took possession of the restaurants on March 1, 1999. By March 8, 1999, 26 units were opened as company-owned restaurants and one unit was reopened as a refranchised restaurant. The remaining units remained closed and are being evaluated for ultimate reopening or disposition. On May 14, 1999, FRI-M Corporation, a wholly-owned subsidiary of FRD, and certain of its operating subsidiaries, entered into a new credit agreement with The Chase Manhattan Bank and Credit Lyonnais New York Branch and other lenders. This agreement established a $70 million senior secured credit facility to replace the bank facility previously in effect for the company's Coco's and Carrows operations, which was scheduled to mature in August 1999. The New FRI-M credit facility, which is guaranteed by Advantica, consists of a $30 million term loan and a $40 million revolving credit facility and matures in May 2003. Advantica's revenues for the first quarter of 1999 were $416,635, compared with the 1998 comparable quarter revenues of $385,743. Net loss sustained was $61,689 as compared with 1998 first quarter loss of $43,080. AGISS CORP: Announces Wholly Owned Sub Files For Bankruptcy ----------------------------------------------------------- AGISS Corporation announced its wholly owned subsidiary, AGISS Software Corporation, has filed an assignment in bankruptcy on May 27th, 1999 pursuant to the Canadian Bankruptcy and Insolvency Act as a result of unsuccessful attempts to refinance and restructure the company. The filing was made in Ottawa, Ontario, Canada. Ernst and Young Inc. have been named as the Trustee in bankruptcy. AL TECH: Seeks Continued Use of Cash Collateral ----------------------------------------------- AL Tech Specialty Steel Corporation seeks authority to continue the use of cash collateral. Such use of cash collateral is requested for a period of three months commencing on June 1, 1999 and terminating on August 31, 1999. The debtor has a continuing need for use of cash collateral, represented by the cash proceeds of the debtor's accounts and inventory, in order to continue operation of its business during this critical time when the debtor is preparing to file, seek approval of, and implement its joint plan to be jointly proposed and filed by the debtor, the Creditors' Committee, Atlas and the USWA. The debtor asserts that any disruption of the debtor's business would jeopardize the proposed sale of a portion of the debtor's assets to Tubacex, SA and the substantial remainder of its assets and lines of business to a newly-formed corporate entity to be owned in part by Atlas and an Employee Stock Ownership Plan formed for the benefit of the debtor's employees represented by the USWA and the debtor's salaried employees. The proposed asset sale to NewCo is the product of extensive negotiations among the debtor, Atlas and the ASWA, and forms the cornerstone of what the debtor believes will be a viable joint plan. Atlas and USWA are relying on the continued operations of the debtor as a basis for a smooth transition of ownership after the proposed Asset Sales. Failure to extend the debtor's use of Cash Collateral at this time would jeopardize the asset sale and the joint plan. BN1 TELECOMMUNICATIONS: Disclosure Statement and Liquidating Plan ----------------------------------------------------------------- The following summarizes the treatment under the plan of each class of claims and interests: Class 1A - First Merit Claims - Not impaired. Distribution, on the Distribution Date, of 100% of its Class 1A Allowed Claim in Cash. Class 1B - Other Secured Claims - Not impaired. Distribution, on the Distribution Date, of 100% of their respective Class 1B Allowed Claims in cash. Class 2A - Convenience Claims - Distribution, on the Distribution Date, of 20% of Allowed Claims, in Cash. (Est. $2000) Class 2B - General Unsecured Claims - Distribution, on the Distribution Date and on each subsequent plan payment date, of their pro rata portion of available cash. (Est. $15 million) Class 3A - Common Stockholder Interests - No distribution will be made under the plan. Class 3B - Rescission Interests - No distribution will be made under the plan. BRUNO'S: Files Disclosure Statement, Reorganization Plan --------------------------------------------------------- Bruno's Inc. last week filed a plan and disclosure statement with the U.S. Bankruptcy Court in Wilmington, Del., amended its Form 10-K annual report filed with the Securities and Exchange Commission. Also last week, Bruno's subordinated noteholders request for an appointment of an examiner was adjourned and will be rescheduled. As reported, Bruno's responded to the motion of HSBC Bank USA for the appointment of an examiner by requesting that the motion be dismissed. HSBC, indenture trustee for Bruno's 10.5 percent subordinated notes due 2005, requested an order directing appointment of an examiner to investigate and file a report on potential claims available to the company's estate against Bruno's, current and former directors and controlling shareholders arising out of the leveraged buyout of Bruno's common stock in August 1995. (The Daily Bankruptcy Review and ABI Copyright c June 2, 1999) CF&I STEEL: PBGC Loses Appeal ----------------------------- A federal agency that takes over financially troubled pension plans lost a Supreme Court appeal today in a dispute over how much money it can collect from bankrupt companies after taking over their plans. The court, without comment, turned away an appeal by the Pension Benefit Guaranty Corp. Lower courts had reduced the agency's claim against a Colorado steel company whose plan it assumed. The PBGC is designed to protect beneficiaries of pension plans that get into financial difficulty. When the agency takes over a plan, it pays benefits to the beneficiaries and collects unpaid pension fund contributions from the employer. CF&I Steel Corp., based in Pueblo, Colo., filed for bankruptcy reorganization in 1990 in Utah, where one of its subsidiaries was located. Two years later, the PBGC took over the pension plan and filed claims in bankruptcy court to collect unpaid contributions from the company. A bankruptcy judge followed a PBGC formula and calculated the main amount owed by the steel company for unfunded benefits at $221 million. The judge ruled largely against the PBGC on another issue, saying only $1.6 million of its separate claim for post-bankruptcy contributions from CF&I would have priority over other claims. A federal trial judge and the 10th U.S. Circuit Court of Appeals ruled against use of the PBGC's formula, however, and the bankruptcy judge reduced the main amount to $123 million. The appeals court ruled that the PBGC's formula does not apply in bankruptcy cases. In the appeal government lawyers said the lower court rulings will encourage companies to file for bankruptcy to reduce their liability for unfunded pension benefits. The failure to give priority to the PBGC's effort to collect post- bankruptcy pension contributions also means "companies will have little or no incentive to continue funding while in bankruptcy," the appeal said. The steel company's lawyers said allowing the PBGC to collect the money it seeks would harm other creditors, including former employees who still collect medical benefits. Under an agreement reached when the company's assets were sold to another firm, the government could collect about $6 million if it won its appeal. The case is Pension Benefit Guaranty Corp. vs. Reorganized CF&I Fabricators of Utah, 98-1440. CFS: Law Firm Delivers $1.6 Million Bill ---------------------------------------- The Daily Oklahoman reports on May 4, 1999 that a Chicago law firm seeks $1.6 million in payments from Commercial Financial Services for services on behalf of the bankrupt debt collection company, according to court records filed Monday. In its first application to the U.S. Bankruptcy Court for the Northern District of Oklahoma, the firm of Jenner & Block outlined its activities on behalf of the Tulsa-based credit card collection company since last fall. The filing detailed - except for some confidential information - each hour it spent on the case and its expenses in a 491-page document. According to the filing, Commercial Financial Services was losing $15 million a month in 1998 as outside experts worked to prevent a bankruptcy filing for or against the Tulsa company. Also filed was a 131-page application by Development Specialist Inc. of Chicago seeking $372,534 since Dec. 11. Not included was payment for Fred Caruso, a Development Specialist Inc. employee serving as president of CFS. His was approved earlier by the court at the rate of $750,000 annually through the Chicago company. The applications - along with others similarly filed - are to be heard May 18 by Dana L. Rasure, the bankruptcy court's chief judge. Following an anonymous letter of Sept. 30, 1998, sent to three bond rating companies that alleged financial improprieties by CFS, the law firm was hired and conducted what it termed "an intensive factual report." More than 35 people were interviewed, while documents and computer records were reviewed before a report containing the results were issued to Peter Wachtell, an independent, outside director. A second report was made by the accounting firm of PricewaterhouseCoopers. Citing attorney-client privilege, Jenner & Block has kept the contents of both reports from being made public and is still of issue before the court. Action taken in North Carolina by NationsBank on Dec. 9, as well as threatened similar actions by other companies, prompted CFS to seek protection through bankruptcy court two days later. The bank claimed that $66 million CFS had invested in a mutual fund administered by NationsBank belonged to the bank. The figure was later amended to $40.4 million. The law firm said 39 attorneys on its staff has spent 5,962 hours on CFS at an average cost of $251 an hour. Larry M. Wolfson, who heads the firm's CFS team, accounted for 952 hours. That is the equivalent of nearly 24 full-time, 40-hour weeks. Jay S. Geller, second man on the team, logged 625 hours, about 17 weeks. COLONIAL DOWNS: Off NASDAQ, Now Found On SmallCap ------------------------------------------------- The listing of securities of Colonial Downs Holdings, Inc. has been transferred from the NASDAQ National Market to the NASDAQ SmallCap Market effective May 28, 1999. In late 1998, the corporation's stock price fell below the market value public float maintenance and minimum bid requirements for inclusion on the NASDAQ National Market. Because the corporation satisfied these National Market requirements in April, the corporation sought continued listing of its securities on the NASDAQ National Market before a listing qualifications panel. However, the panel recommended that the corporation's securities listing be transferred to the SmallCap Market. The corporation currently satisfies the listing requirements of the SmallCap Market and will continue to list it securities under "CDWN". DOW CORNING: Women Accept Joint Plan ------------------------------------ In yet another significant milestone to resolve breast implant claims, the Tort Claimants Committee, representing women with silicone breast implant and other product liability claims, and Dow Corning Corporation today announced that the Joint Plan of Reorganization to resolve its Chapter 11 filing was overwhelmingly accepted by women with claims related to silicone breast implants. The 60-day voting period ended on May 14, 1999. In total, more than 300,000 votes were cast on the plan for all categories of claims, with a vast majority (94 percent) of those voting in favor of the plan. Of the more than 112,774 votes cast by those with domestic silicone breast implant claims, 95.5% voted to approve the Joint Plan. "This overwhelmingly positive vote marks another milestone in the successful resolution of the silicone breast implant controversy," said Gary E. Anderson, President of Dow Corning. "We believe the plan resolves this controversy in a manner that is fair to all parties involved, particularly women with breast implants claims." Ralph Knowles of the Tort Claimants Committee said, "The extremely positive voting results and acceptance of the Plan is quite significant. Ultimately, we think the Plan is in the best interests of the vast majority of claimants who have endured years of delay in having their claims resolved." Joint Plan Milestones: * The Tort Claimants Committee (TCC) and Dow Corning Corp. (DCC) file with the U.S. Bankruptcy Court the "Joint Plan" in November of 1998 * TCC/DCC launch 60-day, court-ordered voting period March 15, 1999, for silicone breast implant and other claimants to vote to accept or reject the Joint Plan to end the DCC bankruptcy** and resolve their claims * Voting period ends May 14, 1999 The next step in the process is a Confirmation Hearing to be held by the U.S. Bankruptcy Court in Bay City, Mich. beginning on June 28, 1999. The hearing will provide an opportunity for the proponents of the Joint Plan to present evidence in support of a decision by the Court to approve the Joint Plan. Should the Court confirm the Joint Plan, claimants will then have the opportunity to select the method by which they wish to settle their claim. EAGLE PICHER: Acquires 100% Of Outstanding Stock In Charterhouse --------------------------------------------------------------- On April 14, 1999, Hillsdale Tool & Manufacturing Co., an indirectly wholly-owned subsidiary of Eagle-Picher Holdings, Inc., acquired all of the outstanding capital stock of Charterhouse Automotive Group, Inc., a Delaware corporation, the indirect parent corporation of Carpenter Enterprises Limited, a Michigan corporation. The acquisition was made in furtherance of a stock purchase agreement dated April 8, 1999, which was held in escrow until April 14, 1999. The total consideration paid for Charterhouse was approximately $72.0 million, consisting of $37.9 million for the stock of Charterhouse, a $3.1 million payment to the former president of Carpenter under a phantom stock plan which was triggered by the transaction, and $31.0 million of existing indebtedness of Carpenter. Carpenter is a supplier of precision machined components to the automotive industry. Charterhouse was a holding company whose only asset was the stock of Charterhouse-Carpenter Holdings, Inc., a Delaware corporation, another holding company whose only asset was the stock of Carpenter. Immediately following the acquisition, Carpenter Holdings was dissolved and Charterhouse was merged into Carpenter. EDISON BROS: Finds Buyers For Many Of Its Chains ------------------------------------------------- On March 9, 1999, Edison Brothers Stores, Inc. and seven affiliated companies filed in the United States Bankruptcy Court for the District of Delaware a voluntary petition for reorganization under Chapter 11 of title 11 of United States Code. The sale of Repp and Repp By Mail closed on May 21, 1999. Edison Brothers Stores previously sought and has received Bankruptcy Court approval to conduct inventory liquidation sales at most of its Wild Pair stores and Riggings menswear chain. The company has announced plans to sell its Princeton, Ind. distribution center for $6.1 million. A second distribution center in Washington, Mo. will be closed by mid-July and is currently for sale. EL MOROCCO: Closes After 56 Years --------------------------------- The El Morocco Restaurant closed for good - at least in name. But owner John F. Gallagher said yesterday he plans to reopen the Grafton Hill landmark at 100 Wall St. under a new name by August or September. "The concept had grown passe," Gallagher said of the El's image of Middle Eastern cuisine and belly dancers, an image that was only partly true since the restaurant expanded its menu and entertainment offerings under his ownership. "You can't operate an ethnic restaurant on that large a scale. Just the name alone implies ethnic, Middle Eastern fare." The disappearance of the El Morocco name caps a 56-year history for one of Worcester's legendary gathering places. A jazz hot spot and dining institution through three generations, the El fell on hard times in the 1990s and landed in bankruptcy protection. Gallagher took control of the restaurant in July 1994 during its second trip to the auction block. The owners of Tiano's restaurant in Worcester originally put in the high bid on the El, but failed to secure financing within the allotted time. Gallagher bought the real estate and business for $335,000 and assumed $152,000 in municipal liabilities. Gallagher, whose family trust finances the restaurant business, also is an executive at East-West Mortgages and sits on the board of directors for the Massachusetts Restaurant Association. He said he is seeking a chef as a partner to buy the business end of the restaurant while he retains control of the real estate. "I'm looking for a chef-partner to take over the restaurant. I'm interested in the real estate. But as landlord, I want to make sure whatever goes in there works," he said. The 10,000-square-foot restaurant seats more than 600 people in various dining and function room configurations. Last year, Gallagher added a seafood section to the El and dubbed it the Red Fish Grill, which is also closed. "The new entity will include cutting-edge cuisine. You'll never see a Ponderosa here or family dining in the sense of $9.99 dinners, at least not with the chefs I'm talking to," Gallagher said. But Gallagher said he does not want fine dining in the "white tablecloth" sense. He said he envisions a place that is comfortable, pointing upscale and - most importantly - heavy on good service. That last requirement seems directly inspired by the Aboodys, the family that founded the El Morocco in 1943 in an apartment house across from the restaurant's current location on Wall Street, which opened in 1977. "When the Aboodys were running it, it was so much fun," said trumpet player Emil Haddad, who enjoyed a long working relationship at the El and is still a close friend of Joe Aboody, who ran the restaurant with his sisters until it was sold. "Just about every night I play, someone tells me how much they miss the Aboodys at the El," Haddad said. After some infighting between brothers and sisters around the financial decline of the restaurant, Joe and his sister, Grace Aboody, stayed on at the restaurant for about a year after Gallagher bought it. Their father, Paul Aboody, founded the El with a $600 investment. In time, it became Worcester's jazz central and then a place for celebrities to hang out. The senior Aboody died in 1983, leaving control of the El Morocco to his eight children. In 1993, the company running the restaurant filed for Chapter 11 bankruptcy protection. Louis C. Terricciano and his son, Mitchell Terricciano, owners of Tiano's, submitted the high bid at an auction held in March 1994. But the Terriccianos failed to complete the financial transactions to satisfy the U.S. Bankruptcy Court and Gallagher bought the real estate and business at auction in July 1994. Gallagher said he never felt he had the right managers in the El Morocco and that compounded problems that were hurting the business. He said in its first year, the El under his ownership did well, selling about $50,000 worth of food and drinks each week. But that number dropped steadily over the last two years. Ideally, Gallagher said, he would have a couple take over the restaurant, with one partner working the kitchen and the other being a friendly presence in the dining area. It seems like a combination that worked well once before on Wall Street. (Telegram Gazette Worcester - 05/18/99) FPA MEDICAL: Coastal Physician Announces Confirmation of Plan -------------------------------------------------------------- Coastal Physician Group, Inc. (OTC:ERDR) ("Coastal") announced on June 1, 1999 that the FPA Medical Management, Inc. Plan of Reorganization was confirmed by the US Bankruptcy Court for the District of Delaware on May 26, 1999. Under the Plan, Coastal will acquire the operations of Sterling Healthcare Group, Inc., a wholly owned subsidiary of FPA Medical Management, Inc. (OTC:FPAMQ). Sterling currently provides emergency medicine practice management services to approximately 124 hospitals primarily in the southeastern United States. Closing of the transaction is expected to occur in June 1999. Steven M. Scott, M.D., Chairman and Chief Executive Officer of Coastal, stated, "We are extremely happy to have the most difficult legal issues behind us. We are moving forward with our plans for combining Coastal and Sterling which will focus on stabilizing relationships with our clients, physician and employees. We want to ensure a successful transition." Coastal Physician Group, Inc. is an emergency medicine physician management company and provides certain core competencies to physicians and hospitals throughout the United States. FPA MEDICAL: Humana To Run Clinics Again ---------------------------------------- Humana Inc. is resuming control over its former health clinics in the Kansas City area, Humana officials said Tuesday. The clinics are known as the Prime Health Medical Group and most recently were operated by a division of FPA Medical Management Inc. Humana took over the ownership and management of the clinic operations Tuesday as part of the bankruptcy reorganization of FPA, which is based in San Diego. Zarina Shockley-Sparling, executive director of Humana's Kansas City area operations, said patients at the clinics should expect to continue seeing their current doctors. "We are ensuring that this will cause no disruption in the delivery of services to our patients," Shockley-Sparling said. The clinics serve 60,000 to 70,000 patients, including Humana members and others, and employ about 400 people, Shockley-Sparling said. The employees will become Humana employees again. The transaction does not affect the ownership of the buildings that house the clinics, Shockley-Sparling said. Humana owns three of the buildings and will lease the remaining four. FPA took over the management of eight area Humana clinics in June 1998. It subsequently closed a clinic at 4700 Belleview Ave. and merged it into a clinic on the Research Medical Center campus, on East Meyer Boulevard. The clinics eliminated more than 100 jobs around that time. Last October, the clinics changed their name to Prime Health Medical Group. The clinics had been known as Prime Health clinics before Humana acquired Prime Health in the early 1990s. The Prime Health name will be retained for now, Shockley-Sparling said. As part of its reorganization, FPA is selling most of its operations around the country to Humana and Coastal Physician Group Inc. Once one of the largest managers of doctors' practices, FPA filed for Chapter 11 protection from creditors in July 1998. Humana, based in Louisville, Ky., is one of the largest publicly traded managed health-care companies, with about 6.1 million members. Bloomberg News contributed to this report. HARNISCHFEGER: Seeks Funding After $74.3 Million Loss ----------------------------------------------------- Milwaukee-based Harnischfeger Industries Inc., a mining and paper- making equipment manufacturer, reported a $74.3 million loss for the second quarter ending April 30 and said that its financial needs exceed its resources, according to Reuters. Some analysts question whether the company can avoid default, and one said that "unless they can assure customers and vendors in very short order, they're going to be forced into bankruptcy." Harnischfeger is exploring strategic alternatives and working with lenders to obtain additional funding. Chairman Robert Hoffman said in a news release that the company is in compliance with its loan covenants but that its "current funding requirements to operate its businesses and implement cost-savings initiatives exceed its currently available resources." The company replaced its chairman and CEO last week because of poor business during the last two years. Some vendors have withheld shipments, causing the company's paper-making equipment unit to miss more than $10 million in shipments in the quarter, due to lack of materials. (ABI 2-June-99) INSILCO HOLDING: To Sell Buffalo, NY Operation ---------------------------------------------- On May 26, 1999, Insilco Holding Co. reported that it planned to close its Buffalo-based McKenica division by the end of July, 1999. McKenica, a manufacturer of heat exchanger tube mills and related capital equipment, recorded sales of $7.1 million in 1998. McKenica currently employs 54 employees at its Buffalo plant. Insilco's Chairman and CEO, Robert L. Smialek, reports that the markets that McKenica serves, in particular the Asian market, remain very weak. He stated that the company has attempted, without success, to streamline McKenica's operations and reduce expenses to a level that current sales could support, as well as sought a buyer for McKenica. Unsuccessful in that attempt the company finds no alternative at this time but to close McKenica. Insilco Holding Co., based in suburban Columbus, Ohio, is a diversified manufacturer of industrial components and a supplier of specialty publications. The company's industrial business units serve the automotive, electronics, telecommunications and other industrial markets, and its publishing business serves the school yearbook market. It had revenues in 1998 of $535.6 million. LOEWEN GROUP: DCR Downgrades Loewen Group Ratings To 'DD' --------------------------------------------------------- Duff & Phelps Credit Rating Co. (DCR) has lowered the senior debt ratings of The Loewen Group, Inc. (Loewen) and related entities to 'DD' (Double-D) from 'CCC' (Triple-C), DCR's lowest rating prior to default. The downgrade follows the company's announcement today that it and approximately 870 U.S. subsidiaries have filed in Delaware to reorganize under Chapter 11 of the U.S bankruptcy Code. Loewen also announced that the group's 116 Canadian subsidiaries are applying today for creditor protection under the Companies' Creditor Arrangement Act in Canada. The group's ratings have been removed from Rating Watch--Down. Rated senior unsecured debt totaled approximately $1.65 billion at March 31, 1999. Including the rated securities, Loewen's consolidated senior debt amounted to $2.14 billion as of March 31, 1999, of which roughly $318 million was outstanding under bank credit facilities. Debt of the senior lending group, including the note holders and banks, is guaranteed on a pari passu basis by substantially all majority- controlled subsidiaries and supported by a pledge of shares of those entities. The debt securities affected by the rating action are: -- The Loewen Group, Inc.'s senior guaranteed notes; -- Loewen Group International Inc.'s (LGII) senior guaranteed notes; and -- Loewen Pass-Through Asset Trust 1997-1's pass-through asset trust certificates (PATS). In connection with the bankruptcy filings, Loewen reported that it has received a commitment for up to $200 million in **debtor**-in- possession financing from First Union National Bank. Loewen expects that the bank credit facility will provide the company with sufficient funding to cover working capital needs during the bankruptcy reorganization. On March 22, 1999, Loewen's senior ratings were downgraded to 'CCC' (Triple-C) in recognition of continued concern with respect to the company's poor liquidity, troubled operating performance and efforts to sell assets and reduce debt. On April 2, 1999, DCR lowered the ratings of the preferred securities of Loewen and Loewen Group Capital, L.P. to 'DP' (preferred stock with dividend arrearages). That rating action followed the deferral of dividends on Cdn.$220 million of 6 percent cumulative redeemable convertible first preferred shares and on $75 million of cumulative monthly income preferred securities (MIPS), series 'A'. Based in Burnaby, British Columbia, Loewen is the second-largest consolidator of funeral homes and cemeteries in North America, ranking behind Service Corp. International and ahead of Stewart Enterprises. LGII serves as the principal borrowing entity and holding company for all of Loewen's U.S. assets and operations. Approximately 90 percent of Loewen's revenues, generated by a portfolio of more than 1,100 funeral homes and 400 cemeteries, are accounted for by U.S. operations. Duff & Phelps Credit Rating Co. (DCR) is a leading global rating agency with 32 local market offices providing ratings and research on debt issues and insurance claims paying ability in more than 50 countries. LOEWEN GROUP: Files Chapter 11 ------------------------------ VANCOUVER, June 1 /CNW-PRN/ - The Loewen Group Inc. (NYSE,TSE,ME:LWN) announced that, in order to ensure time to implement a new strategic plan while concurrently reducing its debt structure to compete more effectively in the marketplace, the Board of Directors has authorized the Company to file a voluntary petition to reorganize under Chapter 11 of the U.S. Bankruptcy Code, as well as an application for creditor protection under the Companies' Creditors Arrangement Act (CCAA) in Canada. In conjunction with the filings, the Company's U.S. subsidiaries have received a commitment for up to US $200 million in debtor-in- possession (DIP) financing from First Union National Bank. The post- petition financing, which is subject to court approval, is expected to provide adequate funding for all post- petition trade and employee obligations as well as the Company's ongoing needs during the restructuring process. The Company's Canadian subsidiaries have sufficient liquidity to fund daily operations and do not anticipate the need for additional financing. The Loewen Group Chairman, John S. Lacey said, "During the past three years, the Company has experienced increasingly intensive working capital needs primarily as a result of its aggressive pursuit of cemetery acquisitions versus its historical emphasis on funeral home operations. We must focus our energy on correcting our balance sheet and implementing a solid business plan." Mr. Lacey said that the plan or "vision" is to return to the original focus of The Loewen Group as a funeral service company with strategically located ancillary cemetery operations. Lacey also noted that the Company's United Kingdom subsidiaries, which generate less than 1% of the Company's revenues, are excluded from the filings. The Company has already identified and begun to implement several key operational elements of this plan. Those elements include: - Completing consolidation of accounting and administrative facilities to one location; - Suspending the Company's acquisition program; - Improving cashflow characteristics of the pre-need sales program; and - Implementing more competitive pricing programs at selected funeral home locations. Mr. Lacey said that, The Loewen Group is optimistic it will emerge from the restructuring process as a stronger, more competitive enterprise. ``We are extremely grateful to the customers, employees and lenders who have supported the Company through these challenging times,'' Mr. Lacey said. ``We believe this restructuring will set the Company on a path of recovery, growth and profitability.'' The Loewen Group and approximately 870 of its U.S. subsidiaries filed their Chapter 11 cases in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. The CCAA application will be brought later today before Mr. Justice James Farley of the Ontario Superior Court of Justice for The Loewen Group's 116 Canadian subsidiaries. Based in Vancouver, The Loewen Group Inc. owns or operates more than 1100 funeral homes and more than 400 cemeteries across the United States, Canada and the United Kingdom. The Company employs approximately 13,000 people and derives 90 percent of its revenue from U.S. operations. MONTGOMERY WARD: Extension of DIP Facility ------------------------------------------ To provide continued financing for the Debtors' on-going working capital needs through the Effective Date of the Plan, GE Capital has agreed to an extension of the DIP Facility through March 31, 2000. The Debtors tell Judge Walsh that it will be impossible to consummate the Plan before the July 7, 1999, expiration of the DIP Facility. Accordingly, an extension of the DIP Facility is necessary to carry the Debtors through the Effective Date of the Plan. As a result of significant asset sales during these chapter 11 cases, the Debtors' availability under the DIP Facility is approximately $750 million at this time. In consideration of GECC's agreement to extend the maturity date, the Debtors will pay a $2,000,000 (20 basis points of the face amount of the DIP Financing Facility) Extension Fee to GECC. The current members of the DIP Financing Syndicate are: Tranche A Swing Line Tranche B Lender --------- ---------- --------- ------ $300,000,000 $25,000,000 $200,000,000 General Electric Capital $150,000,000 0 0 The Chase Manhattan $195,000,000 0 0 BT Commercial Corporation $50,000,000 0 0 BankBoston Retail $35,000,000 0 0 Credit Agricole Indosuez $20,000,000 0 0 Fleet Capital Corporation $25,000,000 0 0 Fleet National Bank $50,000,000 0 0 Foothill Capital $15,000,000 0 0 Goldman Sachs Credit $20,000,000 0 0 Green Tree Financial $50,000,000 0 0 Heller Financial, Inc. $20,000,000 0 0 IBJ Whitehall Business $20,000,000 0 0 National City Commerical $15,000,000 0 0 Firstar, N.A. David Kurtz, Esq., representing the Debtors, reminded Judge Walsh that the DIP Facility will be refinanced on the Effective Date from borrowings under a New Exit Facility arranged by The Chase Manhattan Bank. The Committee, Mr. Kurtz noted, fully supports the Debtors' request -- without continued financing, vendors supply goods today couldn't be paid. Accordingly, Judge Walsh approved the Debtors' request to extend the DIP Facility in all respects. (Montgomery Bankruptcy News Issue 41; Bankruptcy Creditors' Service) NEWMONT MINING: Earnings Up, Future Hugely Dependent On Gold Price ------------------------------------------------------------------ On October 7, 1998, Newmont Mining Corp., involved in the extraction and sale of gold and silver ore, acquired the minority interest of Newmont Gold Company and Newmont Gold Company became 100%-owned by Newmont Mining Corp. Newmont Mining Corp. earned $9.9 million in the first quarter of 1999 compared with a net loss of $2.7 million in the first quarter of 1998. Newmont generally sells its production at market prices; therefore, revenue, earnings and cash flow are highly leveraged to the gold price. Based on estimates of 1999 production and expenses, a $10 per ounce change in the average annual gold price would result in an increase or decrease of approximately $38 million in cash flow from operations and approximately $28 million in net income. PARAGON TRADE: Equity Committee's Findings Re: P&G Settlement ------------------------------------------------------------- The Official Committee of Equity Security Holders of Paragon Trade Brands, Inc. seeks an order denying the debot's motion for an order authorizing and approving a settlement and compromise with the Procter & Gamble Company. The Committee alleges that if the P&G Settlement Agreement were approved as part of a plan, the plan confirmation process would require that shareholders be fairly compensated for the loss of a 50-75% chance to realize $262.5 million in equity value they suffer as a result of the settlement. If the P&G Settlement Agreement were pursued as part of a plan, the plan confirmation process would require that shareholders be fairly compensated for the additional royalty costs and obligations that will be incurred through the debtor's pursuit of the dual cuff business plan, and the more than $200 million in shareholder equity that will be used to pay for the new business plan. The Committee further states that an examiner may be appropriate in the current case to investigate possible claims against P&G and K-C. PARAGON TRADE: Equity Committee Seeks To Prosecute Claims --------------------------------------------------------- The Official Committee of Equity Security Holders of Paragon Trade Brands, Inc. seeks authority to prosecute claims against Weyerhaeuser Company in the name of the estates. The Equity Committee seeks authority to pursue breach of warranty, breach of fiduciary duty, and indemnity claims against the Weyerhaeuser Company in an adversary proceeding on behalf of the debtor's estate. The claims, if proved meritorious, should result in the estate's recovery in excess of $500 million from Weyerhaeuser, which is an $11 billion company full able to pay such a potential judgment. The claims arise from warranties and indemnity promises that Weyerhaeuser contractually made in an Asset Transfer Agreement and Intellectual Property Agreement from 1993. The Committee states that the debtor has unjustifiably refused to pursue a claim as "The debtor filing these claims would be like a child suing her parent." The Committee states that the debtor is controlled by officers and directors that were former officers and directors of Weyerhaeuser and still maintain loyalties to their former employer. These relationships create conflicts of interest for the debtor to pursue the claims. The Equity Committee states that if it is successful, the claims against Weyerhaeuser may restore every penny of shareholder value that the current plan wipes out. "Without authority to pursue these claims, ethe equtiy holders are left unprotected." PARAGON TRADE: Equity Objects To Settlement With Kimberly-Clark --------------------------------------------------------------- The Official Committee of Equity Security Holders of Paragon Trade Brands, Inc. objects to the debtor's motion for an order authorizing and approving a settlement and compromise with Kimberly-Clark Corporation. The Committee states that the debtor did not infringe on Kimberly- Clark's patents, that Kimberly-Clark is not entitled to damages for lost profits, and that the debtor has ignored the opinion of its own experts that the settlement value of Kimberly-Clark's claims is approximately $22.8 million. The debtor's range of reasonable royalty damages ignores the opinions of the debtor's own experts. And the Committee complains that the debtor inexplicably assigns a 60% likelihood of success to Kimberly-Clark on the merits of their case. Also, the Committee states that the debtor's analysis does not discount Kimberly-Clark's claims for the high possibility of reversal on appeal to the Federal Circuit. The Committee reasons that the settlement was the result of an epic failure of the bankruptcy negotiation process, and that the shareholders were not solicited during the negotiation process regarding their views of the settlement, were not heard and were not given an opportunity to vote on the proposed settlement. PENN TRAFFIC: Restructuring Effective in Two Weeks --------------------------------------------------- The Times Union reports on May 28, 1999 that Penn Traffic Co. won federal court approval of its bankruptcy reorganization plan, and the regional grocer's prearranged financial restructuring will become effective in approximately two weeks following the plan's confirmation Thursday by the U.S. Bankruptcy Court for the District of Delaware. Penn Traffic's major creditors will forgive $1.1 billion of the company's $1.7 billion debt in return for control of the company, which has lost more than $324 million since 1994, including $103.9 million last year. "We can now focus on investing in and growing our business," said Gary D. Hirsch, who will remain as the company's chairman. Not only are creditors forgiving nearly two-thirds of Penn Traffic's debt, they also will loan the company $100 million. Hirsch said the loan will be used for an "aggressive" store building and remodeling campaign. In exchange, Penn Traffic will issue 19 million shares of new stock to the creditors. Additionally, it will consolidate its old stock, leaving current shareholders with just one share of new stock for every 100 shares of old stock they owned. Penn Traffic currently operates 216 supermarkets in New York, Pennsylvania, Ohio and West Virginia. It employs 19,000 people under five trade names: P&C Foods, Big Bear, Big Bear Plus, Bi-Lo Foods and Quality Markets. Since the middle of last year, Penn Traffic has closed 30 stores and sold 17 others. The company plans to close at least eight more stores. Penn Traffic filed for Chapter 11 bankruptcy protection on March 1 in Delaware, where it is incorporated. PHILIPPINE AIR: PAL seeks help from Lufthansa --------------------------------------------- China Daily reports on June 2, 1999 that the German carrier Lufthansa is to sign a contract before the end of the month to manage debt-ridden Philippine Airlines(PAL), a senior Filipino government official said yesterday. "Lufthansa is coming in to manage (PAL) within the month," Finance Secretary Edgardo Espiritu told reporters. "There would be a management contract." Espiritu was among several cabinet members assigned by President Joseph Estrada to help the 58-year-old flag carrier avoid bankruptcy. Government financial institutions are minority shareholders in the airline. Espiritu said the German carrier would be asked to handle the marketing side of PAL, Asia's oldest airline, which is under bankruptcy administration. PAL's rehabilitation plan, approved by regulators earlier this month, would still be pursued under new management, and includes the spin-off of non-core operations, he added. The key component of the recovery plan is a capital injection of at least US$200 million by Friday. PAL management announced on Monday that it was in talks with Hong Kong firm Top Wealth Enterprises Ltd and an unnamed party represented by Hong Kong's Bank of East Asia Ltd for equity participation valued at US$70 million. PAL chairman and majority shareholder Lucio Tan has pledged to put in US$100 million. The airline has said it will ask state financial institutions to take care of the remaining US$30 million. But Espiritu said yesterday these firms are likely to lend PAL about US$15 million "at most." "Definitely the national government is not exercising its preemptive rights" in the recapitalization of the airline, he added. The Securities and Exchange Commission said yesterday PAL's plan will not be derailed by the withdrawal of support by some of its key creditors. Philippine National Bank (PNB) withdrew its support last week and the US Export-Import Bank (Eximbank) pulled out in early May. Commission chairman Perfecto Yasay said while "questions" had been raised about the plan, a majority of its creditors were still behind it. "That will not stop the rehab plan. Let me say that now. Because what we are concerned with is that we've got 55 per cent of the creditors approving the rehab plan," Yasay said in a television interview. Eximbank and PNB have both challenged the accuracy of the voting in support of the plan and called on the regulator to release a list of the creditors which approved it and how much they were owed. Eximbank and a group of European export credit agencies account for two-thirds of PAL's total debts of US$2.24 billion. These institutions have liens on 16 of the 22 planes in its fleet. PHOENIXSTAR: Sells Assets To Hughes Electronics/Losses Persist --------------------------------------------------------------- Effective April 28, 1999 and in accordance with an asset purchase agreement dated January 22, 1999, Phoenixstar, Inc. (formerly PRIMESTAR, Inc.) sold its medium-power direct broadcast satellite business to Hughes Electronics Corporation, a subsidiary of General Motors Corporation, for aggregate consideration of $1,358.2 million. Purchase consisted of $1,100 million in cash (before working capital adjustments and closing costs) and 4.871 million shares of General Motors Class H common stock valued at $258.2 million as of the date of closing on the transaction. The purchase price is subject to working capital adjustments to be settled within 90 days after the closing date. In a separate transaction, Phoenixstar announced that TSAT (TCI Satellite Entertainment, Inc.) and Phoenixstar had reached an agreement with Hughes to sell to Hughes TSAT's authorizations granted by the Federal Communications Commission. In addition, other assets and liabilities relating to a proposed DBS system being constructed by Tempo Satellite, Inc., a subsidiary of TSAT, at 119 degrees W.L. and Phoenixstar's rights relating to the Tempo DBS Assets would also be sold to Hughes, for aggregate consideration valued at $500 million. Pursuant to the agreement, Hughes would assume $465 million of TSAT's liability to the partnership, pay TSAT $2.5 million in cash and pay Phoenixstar and the partnership $32.5 million in cash. In addition, the partnership and Phoenixstar have agreed to forgive amounts due from TSAT in excess of the $465 million to be assumed by Hughes. To facilitate such transaction, the partnership would terminate and relinquish the Tempo rights. Due to the fact that regulatory approval is required to transfer certain of the Tempo DBS assets to Hughes, the Hughes transaction will be completed in two steps. Effective March 10, 1999, the first closing of the Hughes transaction was consummated whereby Hughes acquired one of Tempo's high power satellites and Phoenixstar's option to acquire Tempo DBS- 2 for aggregate consideration of $150 million. Such consideration was comprised of $9,750,000 paid to Phoenixstar and the partnership for the Tempo DBS-2 option and the termination of the partnership's rights under the Tempo capacity option, and $750,000 paid to TSAT to exercise the Tempo DBS-2 Option and the assumption by Hughes of $139,500,000 due to the partnership from TSAT in exchange for Tempo DBS-2. Simultaneously with the first closing date, Hughes repaid the liability to the partnership that Hughes assumed. The sale of the remaining assets contemplated by the Hughes agreement is subject to the receipt of appropriate regulatory approvals and other customary closing conditions and is expected to be consummated in mid-1999. In the event the second closing is not consummated and the Hughes agreement is abandoned, Phoenixstar cautions that there can be no assurance that the company will be able to recover the carrying amount of its satellite rights. Tempo has been notified that its in-orbit satellite ("Tempo DBS-1") experienced power reductions which occurred on March 29, 1999 and April 2, 1999. Although the company does not believe the extent of such power reductions is significant, a definitive assessment of the impact on Tempo DBS-1 is not yet complete. During the first three months of 1999, on revenues of $393,864 Phoenixstar incurred a net loss of $83,725, which represents an increase of $14,208 as compared to a net loss of $69,517 for the three months ended March 31, 1998, on revenues of $168,500. Such increased net loss during 1999 is said by the company to be due primarily to the increases in deprecation, amortization and interest expense, partially offset by an increase in the company's income tax benefit. SUN HEALTHCARE: Group Defaults on Debt, Considers Bankruptcy ------------------------------------------------------------ Albuquerque-based Sun Healthcare Group said that its bank group blocked it from paying interest due May 1 on $150 million in notes, which put it in default of its debt, The Wall Street Journal reported. The nursing home operator said it has the funds to make the payment and believes it has the funds to meet daily obligations, but it has been unable to reach an agreement with lenders on amending terms of its $1.57 billion in bank loans. Sun is in violation of bank covenants, and its waivers on the covenant defaults expire Friday. In a recent quarterly financial report, the company said its is exploring options, including chapter 11 protection. It has hired Donaldson, Lufkin & Jenrette Inc. to advise it on options. Sun had a 30-day grace period to pay the interest on its $150 million in notes due 2008, which expired May 31. Sun said the bank group exercised its right to keep the company from making the payment. Sun, which asked for waivers from the bank group, led by Bank of America Corp.'s Bank of America unit, said that changes in Medicare reimbursements have significantly cut revenue. Across the board, the industry has been struggling to adapt to the new Medicare plan, phased in last year, which pays nursing home operators a fixed rate, rather than reimbursing them on their business costs. (ABI 2-June-99) SYBASE INC: Acquisitions Continue While Net Income Is Up ------------------------------------------------------- Total revenues for the three months ended March 31, 1999 increased one percent to $208.3 million as compared to $206.8 million for the three months ended March 31, 1998 for Sybase Inc., the pre-packaged software company. Sybase reported net income of $5.9 million in the three months ended March 31, 1999 as compared to a net loss of $81.2 million in the three months ended March 31, 1998. In February, 1999, the company acquired Data Warehouse Network, an Ireland-based, privately held provider of packaged, industry- specific business intelligence applications. Under terms of the acquisition agreement, Sybase paid $2.7 million in cash for certain assets and assumed certain liabilities of Data Warehouse Network. TRANSTEXAS: Accounts Receivable Management and Security Agreement ----------------------------------------------------------------- TransTexas Gas Corporation seeks a court order authorizing the debtors to enter into accounts receivable management and security agreement authorizing postpetition financing over administrative expenses and secured by liens on property of the state pursuant to the Bankruptcy Code. TransTexas has an immediate need to obtain credit and use cash collateral in order to maintain its ongoing operations and avoid immediate and irreparable harm and prejudice to the debtors' estates and all parties in interest. Pursuant to the BNY Financial Corporation ("BNYFC") DIP Loan Agreement, BNYFC has agreed to make post-petition advances to TransTexas up to a maximum amount of $10 million through October 20, 1999. TransTexas' obligations to BNYFC will be secured by a first priority lien and security interest in TransTexas now owned or hereunder acquired inventory consisting of casing, drill pipe and other supplies and TransTexas' accounts receivable. In material respects the BNYFC DIP Agreement retains its pre-petition terms. Pursuant to the amendment, TransTexas has agreed to pay BNYFC a closing fee of $200,000 and to increase the unused line fee from .125% to .5%. The implementation of the BNYFC DIP Loan Agreement will be viewed favorably by TransTexas' employees, vendors, and customers and will help promote its reorganization. Without the agreement, TransTexas will not be able to fund the drilling program necessary to permit it to enhance the value of its oil and gas assets and to meet its payroll or other direct operating expenses, will suffer irreparable harm and its entire reorganization effort will be jeopardized. TWA: Union critical of Offer; Strike Deadline Will Probably Extend ------------------------------------------------------------------- The Kansas City Star reports on June 1, 1999 that machinists union officials on Tuesday roundly criticized Trans World Airlines' final contract offer made Friday to 16,000 union members. Negotiators for the union have recommended that members reject the offer. Union officials said a strike deadline set for next week probably would be extended to give TWA employees time to study the proposal and to vote on it. The three employee groups within the Machinists will conduct a strike authorization vote at the same time they vote on the offer. TWA said its proposal would bring all wages within 90 percent of the airline industry average by July 2001. The union has remained adamant in seeking a contract that will bring all employees to industry standard. "Our negotiating committee feels there's more to be gotten in a new contract," said Keith Nelson, president of Machinists Local 1650 in Kansas City. "Our membership can't continue to subsidize mismanagement at this company." Local 1650 represents about 2,300 mechanics and related employees at TWA's overhaul base in Kansas City. The union also represents passenger service employees and flight attendants. "There certainly isn't anything improved about TWA's offer," said Sherry Cooper, union general chairwoman of the flight attendants unit. "It's an insult to (the) intelligence of our ... members, especially the flight attendants." Nelson said meetings will be held at 58 TWA employee stations to explain the proposal. A 30-day "cooling off" period is scheduled to expire June 9 at 11:01 p.m., after which the union would be free to strike. But Nelson said, "There's a very good chance that (the strike deadline) will be postponed, although we don't like it." After two bankruptcy reorganizations this decade, TWA has little chance of surviving a systemwide strike, analysts said. "The employees are walking a fine line here," said Bill DiBenedetto, associate editor of Commercial Aviation Report. "If they do go on strike, that could really sink the company. TWA's cash position isn't good enough to withstand a strike." Union officials have said their financial analysts believe TWA can afford to give more than it is offering. "TWA is poised to take off and do something good, but they've got to get this contract done and take care of their employees first," Nelson said. Shares in TWA closed Tuesday at 5 1/8, down Z\zn on the American Stock Exchange. UNITED COMPANIES: Completes Sale of Retail Lending Platform ----------------------------------------------------------- United Companies Financial Corporation (OTC: UCFNQ) announced today that it has completed the sale of a substantial portion of the Company's retail lending platform, UC Lending(R), to Aegis Mortgage Corporation, a mortgage company based in Houston, Texas. The Company previously announced on May 12, 1999 that the Bankruptcy Court in which its reorganization proceedings are pending had approved the sale. Under the terms of the sale, Aegis paid $3 million plus an additional $7.3 million to cover the May, 1999 operating expenses relating to 127 branch offices and related retail lending assets. Aegis also assumed the post-closing obligations under the leases to the 127 branch offices and under the equipment leases, auto leases and other contracts and agreements associated with operating these branch offices and the Baton Rouge home office facilities of the retail lending platform. In addition, Aegis purchased all of the loans closed by UC Lending(R) during the month of May. United Companies confirmed that the remaining 28 branches have been closed. "The completion of the sale of our retail lending platform to Aegis will permit us to continue to focus on our $6.4 billion servicing portfolio," said Deborah Hicks Midanek, Chief Executive Officer of United Companies. "The Company is among the largest servicers in the subprime industry and has a long history of handling these specialized loans." Separately, the Company indicated that it has been advised that its common stock is now being quoted in the "over the counter" market under the stock symbol "UCFNQ" and the Company's preferred stock is now being quoted in that market under the symbol "UCFPQ". United Companies is a specialty finance company that services non- traditional consumer loan products. The Company has been in a Chapter 11 reorganization since March 1, 1999. VENCOR INC: Obtains Waiver On Credit Facility, Subject To Conditions -------------------------------------------------------------------- Vencor, Inc. has announced that its senior bank lenders have granted a further waiver, through July 30, 1999, of breaches by the company of certain financial covenants under its bank credit agreement. Under the waiver, the aggregate commitment in the revolving credit portion of the agreement has been permanently reduced from $125 million to $80 million. During the waiver period, aggregate borrowings under the revolver are limited to $55 million. At the close of business on May 27, 1999, there were approximately $16 million of outstanding borrowings under the revolver. The waiver continues to set forth certain events which would terminate the obligation of the senior lenders to fund the revolver, including the failure to pay rent to Ventas, Inc. without the consent of Ventas or the protection of injunctive relief granting a stay of termination under the company's master leases. In addition, the obligation to fund will be frozen if the company pays, or if Medicare recoups, reimbursement overpayments in excess of $10 million through the waiver period. The acceleration of or any action to collect the unpaid principal or interest on the company's $300 million 9 7/8% guaranteed senior subordinated notes also will terminate the obligation to fund the revolver. Vencor is a long-term healthcare provider operating nursing centers, hospitals and contract ancillary services in 46 states. WET SEAL: Class A Common Stock On The Block ------------------------------------------- Wet Seal Inc. is a specialty retailer of moderately priced, fashionable, casual apparel designed for women with a young, active lifestyle. The company was incorporated on December 19, 1962 in California and was reincorporated in Delaware on June 26, 1990. The company is sending out a prospectus announcing the sale of 1,650,000 shares of Class A common stock. The common stock offered by this prospectus are being offered by the stockholders of the company and Wet Seal will not receive any of the proceeds of the sale. For details you may access further information, on the Internet, at http://www.sec.gov/cgi-bin/srch-edgar?0000921530-99- 000125 at no cost. WILSHIRE CREDIT: Reviewed by Fitch IBCA --------------------------------------- Fitch IBCA has announced that is has conducted a review of Wilshire Credit Corp. (WCC) and has determined that the key management, mid- management and general staff remaining is adequate for current requirements and for reasonable increases in portfolio size. WCC has indicated its plans to maintain core levels of staffing in order to position itself for acquisition of additional servicing after the finalization of its restructuring. The review also confirmed that core servicing staff in the Portland servicing operation was not substantially affected by the April bankruptcy filing of its affiliate company Wilshire Financial Services Group Inc (WFSG). The sale of selected loan portfolios reduced WCC's overall servicing portfolio resulting in a corresponding reduction of servicing staff. Fitch IBCA reviewed the ongoing collections and default management functions within Wilshire's operations and has determined the processes to be adequate and consistent with pre-bankruptcy levels. Throughout the reorganization, Wilshire has continued to address its commitment to technology advances as evidenced by its recent initiatives to install and test a newly acquired default management system, upgrade its hardware, phone systems and voice response unit. WCC's affiliate company WFSG filed a prepackaged Chapter 11 bankruptcy plan which was approved by the bankruptcy court on April 12 subject to final agreement of the reorganization by the unofficial committee of WFSG 13% note holders, the Office of Thrift Supervision, and WCC's primary lender. The final agreement is expected to occur within the next few weeks. Although WCC has demonstrated that the bankruptcy has not significantly disrupted their current servicing operations, Fitch IBCA will continue to monitor WCC's financial and servicing capabilities. ********* 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, Yvonne L. Metzler 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 * * *