/raid1/www/Hosts/bankrupt/TCR_Public/990615.MBX
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, June 15, 1999, Vol. 3, No. 114
Headlines
ACCESS BEYOND: Court Approves Sale and Special Counsel
AMERICAN RICE: Objects To Secured Claim of Bank Group
AMNEX INC: Meeting of Creditors
ANCHOR GLASS: Anheuser-Busch Signs Long-Term Production Order
APRIA HEALTHCARE: Change In Election Procedures Proposed By Board
CALDOR: Seeks To Sell Three Properties
CELLPRO: To Make Distribution on June 18
CFI MORTGAGE: Motion Granted To Extend Time To Object To Claims
COSMETIC CENTER: Seeks Order Approving Lease Rejections
DAUPHIN TECHNOLOGY: Chicago Firm Acquires 5.7% Of Common Stock
EQUALNET COMMUNICATIONS: Stock and Cash In Creditors' Trust
FACTORY CARD: Reports First Quarter Results
FIRST MERCHANTS: Employee Stock Purchase Plan Proposed
GOLDEN BOOKS: Taps Daley-Hodkin, Appraiser
GULF RESOURCES: Hearing On Motion To Abandon Mustang Stock
HARNISCHFEGER: Bankruptcy News Available; First Issue Free
HECHINGER: Builder's Square in Colorado To Close
HECHINGER: Case Summary & 20 Largest Unsecured Creditors
HECHINGER: DCR Affirms Kmart Rating
HECHINGER: List of Store Closings
HEMISPHERE TRADING: Files Settlement Plan; $4.3M Added To Pool
INTERNATIONAL WIRELESS: Seeks Approval Of Settlement With Telecom
KAMCO: Bankruptcy Lists 59 Creditors
LIFE ONE: Releases Unprofitable Sub to Improve Future Earnings
LIVENT: Judge To Hold Hearing on July 7
LOEWEN: Creditors' Committee Chosen
MEDAPHIS CORP: "Settlement" Stock Offered Through Prospectus
MIDCON OFFSHORE: Louis Dreyfus Objects To Trustee's Use of Cash
OWENS CORNING: Investment Firm Acquires 10.3% Of Common Stock
SCOOP INC: Plan Provides 95% Payment to Unsecured Creditors
SYSTEMSOFT: Seeks Bar Date For Filing Proofs of Claim
THREE D DEPARTMENTS: Disclosure Statement Hearing
TWA: Sweetens Contract Offers
WIRELESS ONE: Equity Holders Are Due a Reprieve
Meetings, Conferences and Seminars
*********
ACCESS BEYOND: Court Approves Sale and Special Counsel
-------------------------------------------------------
The US Bankruptcy Court for the District of Delaware entered an
order approving the employ of Robert D. Wilcox as special
counsel.
By separate order the court authorized the Trustee to enter into
an asset purchase agreement for the sale of certain identified
assets. The Trustee and Zoom Telephonics, Inc. have agreed upon
material terms and conditions of a sale of assets, known as
Package 11.
AMERICAN RICE: Objects To Secured Claim of Bank Group
-----------------------------------------------------
The debtor, American Rice, Inc. submits a motion to determine the
allowed amount of the secured claim of its Bank Group for the
purposes of the debtor's first amended plan of reorganization.
The debtor seeks an order that the Bank Group Claims do not
constitute secured claims to the extent of $4,021,000.
Prior to the Petition Date, the debtor was a party to a revolving
loan arrangement with its Bank Group, the agent with respect to
which was First Union Bank. The debtor owed the Bank Group
$70.503 million as of the Effective Date. The debtor has
conducted an analysis which reflects that as of the Petition
Date, the Bank collateral was worth $4.021 million less that the
amount of the Prepetition Bank Debt. The debtor states that
pursuant to certain orders approving relationships amending the
prepetition revolving credit facility, the Bank Group agreed that
the amount of any unsecured claims of the Petition Date could not
"roll over" into either a secured or unsecured claim. As such
the Bank Group's $4.021 million unsecured claim as of the
Petition Date must remain an unsecured claim.
AMNEX INC: Meeting of Creditors
-------------------------------
AMNEX, Inc. filed a Chapter 11 bankruptcy case on May 5, 1999.
A meeting of creditors will take place on June 30, 1999 at 2:30
PM at the Office of the US Trustee, 80 Broad Street, Second
Floor, New York, NY 10004-1408.
ANCHOR GLASS: Anheuser-Busch Signs Long-Term Production Order
-------------------------------------------------------------
Anchor Glass Container Corporation has signed an agreement with
Anheuser-Busch, Inc., to provide all the bottles for the brewer's
Jacksonville, Fla., and Cartersville, Ga., breweries, beginning
in January 2001. The order, which has a five-year minimum term,
could increase Anchor's sales by as much as 10 percent, according
to the company. Anticipated annual revenues from the order could
amount to more than 20 percent of Anchor's current sales.
To meet the expanded demand from the supply contract, Anchor will
invest approximately $45 million in new equipment for its
Jacksonville, Fla., and Warner Robins, Ga., plants over the next
18 months to increase production efficiency. The two plants
already devote a substantial percentage of their capacity to
supplying the nearby Anheuser-Busch breweries. The
modernization will make the Anchor facilities two of the most
cost-competitive glass manufacturing plants in the nation.
Because of the plants' productivity and their proximity to the
breweries, Richard M. Deneau, Anchor's President, says the
company's profit margins will improve significantly. He
considers the development to be a major step in Anchor's return
to profitability.
To accommodate the expanded volume for Anheuser-Busch, Anchor
will shift much of its production for other customers at
Jacksonville and Warner Robins to its plants in the Northeast.
Anchor plants in Salem, N.J.,, and Elmira, N.Y., which are closer
to customer facilities, will take on the reassigned production.
These changes should provide further margin improvement for
Anchor.
The order reflects the increasing need of market leader Anheuser-
Busch for glass bottles. Beer industry sales in the U.S. jumped
in the first quarter of 1999 and are expected to continue rising
in response to the strong economy and demographic trends.
Anchor Glass Container Corporation, the third-largest
manufacturer of glass containers in the U.S., supplies beverage
and food producers and consumer products manufacturers
nationwide. Based in Tampa, Fla., Anchor employs 4,500 at ten
U.S. locations. Parent company Consumers Packaging is a
leading international designer and manufacturer of glass
containers.
APRIA HEALTHCARE: Change In Election Procedures Proposed By Board
-----------------------------------------------------------------
As previously reported in this Reporter the annual meeting of
stockholders of Apria Healthcare Group Inc. will be held at 8 AM,
Wednesday, July 21, 1999 at Apria Healthcare Group Inc., Building
Number 3500 - Grand Canyon Room, 3560 Hyland Avenue, Costa Mesa,
California 92626. Items of business to be conducted are
approval of an amendment to Apria's Restated Certificate of
Incorporation to eliminate the classification of the
company's Board of Directors and to provide for the annual
election of all Directors. Subject to the approval of the above
proposal, the stockholders will also vote to elect seven members
of the Board of Directors, with each Director to hold office
until the 2000 annual meeting of stockholders or until their
successors are elected and qualified; or, in the event the
proposal is not approved, to elect two members of the Board of
Directors to hold office for a three-year term.
On April 26, 1999, the Board of Directors of Apria Healthcare
adopted, subject to approval by the stockholders, an amendment to
Article VI of the Apria's Restated Certificate of Incorporation
to eliminate the classified structure of the Board of Directors
and to provide for the annual election of all Directors. Apria's
Restated Certificate of Incorporation currently provides that the
members of the Board of Directors shall be divided into three
classes to be determined by the Board of Directors. All classes
shall be as nearly equal in number as possible. The terms of
office of the respective classes of Directors are to be from the
time of election and qualification until the third annual meeting
following election or until successors are duly elected and
qualified.
The proposed amendment to Apria's Restated Certificate of
Incorporation eliminates the different classes of Directors and
provides that all Directors shall be elected at each annual
meeting of stockholders to hold office until the next annual
meeting of stockholders, or the appointment of successors. This
amendment is being submitted to the stockholders because
the Board believes in giving the stockholders the right to elect
the full Board annually. The affirmative vote of a majority of
the total votes of the outstanding shares of common stock is
required to authorize the proposed amendment to Apria's
Restated Certificate of Incorporation.
CALDOR: Seeks To Sell Three Properties
--------------------------------------
The Debtors have received offers and entered into purchase and
sale agreements for their leasehold interests in certain real
properties at three locations. The three purchasers are Adrian
Realty Trust, on behalf of Shaw's Supermarkets, Inc., Federal
Realty Investment Trust, and Kmart Corporation.
Prior to the sale, the Debtors seek the scheduling of a hearing
for the issuance and entry of an Order finding that the Break-up
Fees as set forth in the Shaw's and Kmart Purchase Agreements are
reasonable in amount and are warranted. The Debtors believe
Shaw's and Kmart may not proceed with their respective Purchase
Agreements if the provisions providing for such Break-up Fees are
eliminated from the Purchase Agreements.
The Debtors also seek the scheduling of hearings to solicit
overbids on the Purchase Agreements and to approve those Purchase
Agreements, including approval to assume and assign and sell the
underlying Leases to the respective Purchasers, for which no
qualified overbid is made at the Overbid Hearing, or with respect
to which the Purchaser is the prevailing bidder at the Overbid
Hearing.
The Debtors propose to conduct the Overbid Hearing for the
properties that are subject of the Purchase Agreements on June
23, 1999. In the event that a qualified overbid is made by a
party other than the Purchaser, and accepted by the Debtors at
the Overbid Hearing for any of Lease as set forth in the Purchase
Agreements, the Debtors shall file a separate application for
Court approval to assume and assign the respective Lease to the
successful bidder. At the conclusion, the Debtors propose to
conduct the Assumption and Assignment Hearings, seeking the
issuance and entry of Court orders approving those Purchase
Agreements which have not been outbid or where the Purchaser is
the prevailing bidder, and authorizing the Debtors to assume and
assign the respective Properties to the respective Purchaser.
(Caldor Bankruptcy News - Issue 35- Bankruptcy Creditors' Service
Inc.)
The Shaw Purchase Agreement
---------------------------
The principal terms of the Shaw's Purchase Agreement are:
Property - Taunton, Massachusetts.
Purchase Price - $750,000
Break-Up Fee - the fee is $19,000
The Federal Realty Purchase Agreement
-------------------------------------
Property - Brunswick Shopping Center on Milltown Road, North
Brunswick, New Jersey. Federal Realty is the landlord of the
Federal Realty Property.
Purchase Price - $350,000
Closing - The closing shall be three days after entry of the
Order approving the Federal Realty Purchase Agreement
Break-Up Fee - there is no break-up fee
The Kmart Purchase Agreement
----------------------------
Property - Brighton, Massachusetts
Purchase Price - $3,625,000
Break-Up Fee - As a condition to proceed with the transaction
Kmart required a $90,000 break-up fee
The Debtors propose the following terms and bidding procedures
govern the submission of initial and subsequent overbids at the
Overbid Hearing.
1. In order to bid at the Overbid Hearing, a party must have
first become a qualified bidder by providing evidence
satisfactory to the Debtors of (i) such party's financial
wherewithal to close upon the sale within the same time-frame
contemplated by each of the Purchase Agreements and such party's
ability to otherwise satisfy the terms and conditions of each
such sale, including to provide comparable adequate assurance of
future performance under the respective purchased Lease(s) and
(ii) concerning the intended use of each of the Stores by the
bidder or any party on whose behalf the bidder is acting.
2. the initial overbid and any subsequent overbids must be on an
"all cash" basis and on substantially the same terms as the terms
of each Purchase Agreement. If a qualifying overbids are made,
each Purchaser has the right, in its sole discretion to submit
its own and better bid in compliance with the bidding procedures.
3. The minimum initial overbids and subsequent overbids for each
Property are as follows:
a. Shaw's Purchase Agreement - minimum initial overbid must be
at least $10,000 higher than the $750,000 purchase price,
plus the applicable break-up fee of $19,000, if allowed.
Any subsequent overbid must be at least $10,000 higher.
b. Federal Realty Purchase Agreement - minimum initial overbid
must be at least $10,000 higher than the $350,000 purchase
price. Any subsequent overbid must be at least $10,000 higher
than the previous qualifying bid.
c. Kmart Purchase Agreement - minimum initial overbid must be
at least $25,000 higher than the $3,625,000 purchase price,
plus the applicable break-up fee of $90,000, if allowed.
Any subsequent overbid must be at least $25,000 higher.
4. Each bidder will be responsible for, and will indemnify the
Debtors and their authorized agent, W/S Discount Acquisition,
against any and all claims for consultant's, broker's, and
auctioneer's commissions, where the basis of the claim by such
other consultant, broker, and/or auctioneer is its asserted
dealings with such bidder.
5. If applicable, the break-up fee will be paid upon the closing
to such other bidder from the proceeds of such sale.
The Break-Up Fee Hearing is scheduled for June 16, 1999 at 10:00
a.m. and the Overbid and Assumption and Assignment Hearings for
June 23, 1999 at 10:00 a.m.
CELLPRO: To Make Distribution on June 18
----------------------------------------
CellPro Inc., New York, announced late last week that pursuant to
its Second Amended Plan of Reorganization, dated May 10 and
approved by the Bankruptcy Court for the Western District
of Washington on May 21, plans to make a distribution of funds on
Friday, according to newswire report. The distribution will pay
creditors the full amount of their allowed claims. The
company also announced that it has changed its name to CPX Corp.
CFI MORTGAGE: Motion Granted To Extend Time To Object To Claims
---------------------------------------------------------------
The debtor's motion to extend time to file objections to claims
through June 7, 1999 was granted by the US Bankruptcy Court for
the Southern District of Florida on June 7, 1999.
COSMETIC CENTER: Seeks Order Approving Lease Rejections
-------------------------------------------------------
The debtor, The Cosmetic Center, Inc., seeks an order approving
its procedure to reject leases of approximately 93 stores to be
closed as of June 11, 1999.
DAUPHIN TECHNOLOGY: Chicago Firm Acquires 5.7% Of Common Stock
--------------------------------------------------------------
Beneficial ownership of 2,400,540 shares of Dauphin Techonology
Inc.'s common stock is now in the hands of the Augustine Fund,
L.P., its general partner Augustine Capital Management, Inc, and
with the shareholders, directors and officers of Augustine
Capital, namely, John T. Porter, Brian D. Porter and Thomas
Duszynski. The group members may be deemed to share
power to vote and dispose of the shares owned. Collectively
they beneficially own 5.7% of the class of outstanding common
shares of Dauphin Technology Inc.
EQUALNET COMMUNICATIONS: Stock and Cash In Creditors' Trust
-----------------------------------------------------------
In keeping with the second amended joint plan of reorganization
of EqualNet Corporation and EqualNet Communications Corp., on May
28, 1999, EqualNet Communications Corp. made certain
contributions, including 3,000,000 shares of the common stock, to
the trust created pursuant to the reorganization plan. EqualNet
Corporation, a Delaware corporation, is the wholly-owned
subsidiary of EqualNet Communications Corp.
Darryl S. Laddin, in his capacity as Trustee of the trust, has
sole investment and voting power with respect to the 3,000,000
shares of the common stock which the company has contributed to
the trust Mr. Laddin, an attorney, acts as Trustee of the
Unsecured Creditors' Trust of EqualNet Corporation. The trust
has been created in the plan so as to facilitate the payment of
the claims of the general unsecured creditors of EqualNet
Corporation. Each general unsecured creditor is entitled to a
beneficial interest in the trust which reflects the percentage
which each creditor's claim bears to the total amount of general
unsecured claims. The issuance of such beneficial interests is to
be made in full satisfaction and discharge of any and all claims
of the general unsecured creditors of EqualNet Corporation
against EqualNet Corporation and EqualNet Communications Corp. On
the effective date, EqualNet contributed $1,350,000 in cash and
3,000,000 shares of the common stock to the trust. The plan also
provides that EqualNet will make additional contributions to the
trust of the common stock having a market value equal to five
percent of the dollar amount of allowed unsecured claims which
were not previously identified as undisputed on EqualNet
Corporation's Schedules of Assets and Liabilities filed with the
Bankruptcy Court. In addition, if the average closing price of
the common stock for the 25 trading days immediately prior to the
second anniversary of the effective date is less than $1.00 per
share, EqualNet is to contribute to the trust the number of
additional shares of the common stock whose value, based on the
average closing price, is equal to the result obtained by
multiplying 1,500,000 by the difference between $1.00 and the
average closing price.
In following the plan, the Trustee has the continuing
responsibility to liquidate the assets of the trust. The plan
provides that, unless authorized by EqualNet Communications Corp.
to sell additional shares, during each of the first four
consecutive six month periods after the effective date, the
Trustee is limited to selling 375,000 shares of the common stock
held in the trust. It is the intention of the Trustee to
liquidate the assets of the Trust in a commercially reasonable
manner consistent with the plan for the benefit of the trust
beneficiaries.
In addition to the power to liquidate the trust assets, the
Trustee will also have the power to direct the voting of the
shares of the common stock held in the trust on any matter
submitted to the shareholders of EqualNet Communications Corp.
The plan also provides that the Trustee shall have the right to
appoint one director to the Board of Directors of each of
EqualNet Communications Corp. and EqualNet Corporation.
The Trustee has sole voting and investment power with respect to
3,000,000 shares of the common stock, which, based on the sum of
20,972,111 shares of the common stock outstanding as of May 24,
1999 and 3,000,000 shares of the common stock issued by EqualNet
to the trust, represents 12.5% of the issued and outstanding
shares of EqualNet.
FACTORY CARD: Reports First Quarter Results
-------------------------------------------
Factory Card Outlet Corp. (Nasdaq: FCPYQ) announced today results
for its fiscal quarter ended May 1, 1999.
Net loss for the fiscal quarter was $16.1 million or ($2.14) per
fully diluted share compared to net income of $0.6 million or
$0.07 per fully diluted share for the fiscal quarter ended May 2,
1998. The Company's net loss for the latest fiscal quarter
included $12.5 million or ($1.67) per fully diluted share for 27
store closings, professional fees and other costs related to the
reorganization of the company and $1.3 million or ($0.17) per
fully diluted share for the early retirement of amounts
outstanding under the Company's prior credit agreement.
Sales for the fiscal quarter ended May 1, 1999 rose approximately
5.4% to $52.5 million from $49.9 million for the fiscal quarter
ended May 2, 1998. On a comparable store basis, sales for the
fiscal quarter decreased 2.6%. Comparable store sales were
adversely impacted by the reduced flow of merchandise resulting
from issues associated with the Company's liquidity and the
Chapter 11 cases.
Factory Card Outlet is a chain of company owned superstores
offering greeting cards, gift wrap, balloons, party supplies and
other special occasion merchandise.
On May 6, 1999, the Company announced that it received
notification that Nasdaq's staff has determined to delist the
Company's common stock from the Nasdaq National Market. Nasdaq
said the determination was based on the potential impact of the
Company's pending Chapter 11 case on the Company's shareholders.
The Company has requested a delisting hearing before Nasdaq's
Listing Qualifications Panel. The hearing is scheduled for July
1, 1999. The company's common stock will continue to be listed on
the Nasdaq National Market, although trading continues to be
halted until the hearing process is completed.
FIRST MERCHANTS: Employee Stock Purchase Plan Proposed
------------------------------------------------------
The First Merchants Corporation employee stock purchase plan was
adopted by the the company's Board of Directors on February 9,
1999, subject to approval of the company's shareholders at
their annual meeting on April 14, 1999. The effective date of
the plan is planned for July 1, 1999, if approval has been given
by the shareholders. The purpose of the plan is to provide
eligible employees of the company and its subsidiaries a
convenient opportunity to purchase shares of common
stock of the company through annual offerings financed by payroll
deductions.
The plan may continue until all the stock allocated to it has
been purchased or until after the fifth offering is completed,
whichever is earlier. The company's Board of Directors may
terminate the plan at any time, or make such amendment of the
plan as it may deem advisable, but no amendment may be made
without the approval of the company's shareholders if it
would materially affect their rights. An aggregate
number of 250,000 shares of common stock, without par value,
of the company is available for purchase under the plan. Shares
of common stock which are to be delivered under the plan may
be obtained by the company by authorized purchases on the open
market or from private sources, or by issuing authorized but
unissued shares of common stock.
GOLDEN BOOKS: Taps Daley-Hodkin, Appraiser
------------------------------------------
The debtors, Golden Books Fmaily Entertainment, Inc., et al.,
applies to retain Daley-Hodkin Appraisal Corporation in
connection with the debtors' disposition of the lease for, and
the property and equipment used at their printing facilities and
administration offices located at 10101 Science Drive,
Sturtevant, Wisconsin 53177.
For compensation, the firm will be paid a fee of $50,000 plus
expenses.
GULF RESOURCES: Hearing On Motion To Abandon Mustang Stock
----------------------------------------------------------
A hearing will be held in the case of Gulf Resources Corporation
in the US Bankruptcy Court Western District of Texas in the S.A.
Courtroom #1, US Post Office Bldg. 615 E. Houston St., San
Antonio, TX 78205 n July 12, 1999 at 9:00 AM to consider and act
upon the motion to abandon stock interests in Mustang Oil & Gas
Corporation, Charter Production Company and River City Petroleum,
Inc.
HARNISCHFEGER: Bankruptcy News Available; First Issue Free
----------------------------------------------------------
Bankruptcy Creditors' Service, Inc.("BCSI"), announced
publication of HARNISCHFEGER BANKRUPTCY NEWS, tracking the
chapter 11 reorganization undertaken by Harnischfeger Industries,
Inc. (NYSE: HPH) and its domestic underground mining (Joy
Mining Machinery), surface mining (P&H Mining Equipment), and
pulp and papermaking (Beloit Corporation) subsidiaries before the
United States Bankruptcy Code in Wilmington, Delaware.
"Unlike many of the chapter 11 reorganizations we track,
Harnischfeger has a rock-solid business and a substantial base of
hard assets underneath its layers of debt. We give Harnischfeger
no less than a 7-in-10 chance of surviving, reorganizing and
emerging from chapter 11," said Peter A. Chapman, president of
Bankruptcy Creditors' Service, Inc., and editor of the
newsletter.
The first issue includes:
-- background information about the Company's operations and
finances;
-- detailed information extracted from the Debtors' bankruptcy
petitions;
-- a consolidated list of the Debtors' 25 largest unsecured
creditors;
-- the $750 million debtor-in-possession financing facility led
by The Chase Manhattan Bank and Chase
Securities, Inc.;
-- the Company's cash budget for the next 30 days; and
-- a calendar of the key dates and deadlines in Harnischfeger's
chapter 11 cases.
Chapman indicated that the next edition will provide subscribers
with a detailed review of:
-- Harnischfeger's applications to employ Kirkland & Ellis as
its lead bankruptcy counsel; PricewaterhouseCoopers, LLP, as its
financial advisor; and the host of other professionals that will
help management push and pull the Company through the bankruptcy
process;
-- the operational and financial impact of the handfuls of
motions asking Judge Walsh for relief to maintain "business as
usual"; and
-- the United States trustee's plans and efforts to form an
official committee to represent the interests of the Debtors'
creditors.
HARNISCHFEGER BANKRUPTCY NEWS is distributed on a subscription
basis by e-mail for $45 per issue. New issues are published as
significant activity occurs (generally every 10 to 20 days) in
Harnischfeger's cases.
Chapman relates that a free copy of the first issue of
HARNISCHFEGER BANKRUPTCY NEWS is available via the Internet at
http://www.bankrupt.com/harnischfeger.txtusing a standard Web
browser.
BCSI currently tracks on-going chapter 11 reorganizations by The
Loewen Group, Montgomery Ward, Service Merchandise, Dow Corning
Corporation, Levitz Furniture Corp., Edison Brothers
Stores Corporation, Caldor Corporation, Boston Chicken, Inc.,
Bruno's, Inc., APS Holding, and FoxMeyer Corporation. Go to
ftp://bankrupt.com/Bankruptcy_News/ for free sample newsletters.
HECHINGER: Builder's Square in Colorado To Close
------------------------------------------------
Rocky Mountain News reports on June 12, 1999 that Builder's
Square home improvement stores in Colorado will shutter their
doors by fall. Parent company Hechinger Co., filed for Chapter 11
protection from creditors Friday in U.S. Bankruptcy Court in
Delaware. Hechinger announced that within the next 90 to 120
days, it will close 89 of its 206 stores in 28 states. Closely
held Hechinger owns stores that operate under the names
Hechinger, Home Quarters and Builder's Square.
The closings are expected to affect more than 200 employees at
five Builder's Square stores in metro Denver and a sixth in Fort
Collins. Hechinger officials could not be reached for comment.
Hechinger has foundered at a time when low unemployment, low
interest rates, high consumer confidence and increased
discretionary income have created an ideal environment for home-
improvement retailing. Unable to compete with Home Depot Inc. and
Lowe's Cos. Inc. and criticized for poor customer service,
Hechinger's has been hemorrhaging money.
The retailer reported a $228.4 million loss in the second quarter
this year, nearly a sixfold increase from the previous year's
quarter. The company failed to make a $4.7 million interest
payment on its unsecured debt that was due May 15. Suppliers have
been cutting back on credit, which only further tightened the
squeeze on Hechinger's cash flow. Once a family-run hardware
chain, the company became the third-largest home improvement
retailer after Los Angeles-based merchant bank Leonard Green &
Partners bought controlling interest in Hechinger from Kmart
Corp. in 1997 and combined the company with Builder's Square.
Hechinger was unable to make the jump from family store to home
improvement category killer. Customers complained about service
and merchandise offerings.
HECHINGER: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Hechinger Investment Company of Delaware Inc.
1801 McCormick Drive
Largo, Maryland
Type of business: Manufacturer of power supplies
Court: District of Delaware
Case No.: 99-2261 Filed: 06/11/99 Chapter: 11
Debtor's Counsel:
Willkie Farr & Gallagher
Richards, Layton & Finger PA
Irell & Manella LLP, special corporate counsel
Financial Advisory Firm: Policano & Manzo LLC
20 Largest Unsecured Creditors:
Name Nature Amount
---- ------ ------
American Stock Transfer & Trust Bond $119.9 M
American Stock Transfer & Trust Bond $105.1 M
American Stock Transfer & Trust Bond $100.9 M
PPG Industries Trade $3.57 M
Osram Sylvania Inc. Trade $3.59 M
Black & Decker Trade $3.45 M
Glamour Manufacturiing Co. Trade $2.81 M
Martin Senour Trade $2.61 M
Georgia Pacific Trade $2.57 M
Felmor Corporation Trade $2.54 M
Armstrong World Trade $2.40 M
Agribiotech/Seedco Trade $2.25 M
Starmark Cabinentry Trade $1.69 M
Stanley Mirror Products Trade $1.65 M
Stanley Tools Trade $1.63 M
Stanley Door Systems Trade $1.45 M
General Electric Company Trade $1.39 M
3M Trade $1.33 M
Ortho Trade $1.33 M
Scotts Trade $1.33 M
HECHINGER: DCR Affirms Kmart Rating
-----------------------------------
Duff & Phelps Credit Rating Co. (DCR) has reaffirmed its ratings
of Kmart Corporation following the company's announcement that it
would be taking a $230 million after-tax charge to earnings
during the second quarter. The charge follows Hechinger
Company's Chapter 11 filing and is a result of Kmart's
guarantee of the lease obligations of Builders Square stores,
which were sold during 1997 to the entity that controls
Hechinger.
The potential for a Hechinger Chapter 11 filing, and its impact
on Kmart, had been factored into DCR's rating. While the charge
itself is non-cash, Kmart will be responsible for making the
lease payments on up to 115 stores until they are released. This
additional expense should not have a material effect on
Kmart's growth or investment plans, and would have only a modest
impact on the company's credit protection measures. Kmart
expects to convert or sublease most of the properties within a
reasonable period of time.
DCR currently rates Kmart's senior notes, bank facility and
lease certificates 'BB+' (Double-B-Plus), and its convertible
preferred stock 'BB' (Double-B). Kmart has approximately $2.7
billion of debt and $1 billion of preferred stock outstanding.
HECHINGER: List of Store Closings
---------------------------------
A list of stores slated for closing which was announced Friday by
the Hechinger Co.
The list contains the market area in which the stores are
located, followed by the store name and location of each store.
Numbers in parentheses indicate multiple stores in one city.
Albany-Schenectady-Troy, N.Y.: Builders Square II, Clifton Park,
Colonie; Better Spaces, Latham
Albuquerque, N.M.: Builders Square
Austin, Texas: Home Quarters (3)
Baltimore: Hechinger - Woodlawn, Dundalk
Boston: Home Quarters - Norwood, Danvers
Brockton, Mass.: Home Quarters
Buffalo-Niagara Falls, N.Y.: Builders Square II - Hamburg,
Niagara Falls
Columbus, Ohio: Builders Square (2)
Corpus Christi, Texas: Builders Square II
Dayton, Ohio: Builders Square
Daytona Beach, Fla.: Builders Square II
Denver: Builders Square II - Glendale, Aurora, Westminster.
Builders Square - Edgewater, S. Wadsworth
Detroit: Home Quarters - Sterling Heights
El Paso, Texas: Builders Square II
Erie, Pa.: Builders Square II
Evansville, Ind.: Builders Square II
Flint, Mich.: Builders Square
Fort Collins, Colo.: Builders Square II
Fort Myers, Fla.: Builders Square II
Grand Rapids, Mich: Builders Square II - Walker, Kentwood
Houston, Texas: Builders Square II - Woodlands, Pasadena,
Interstate-45, Beechnut, Webster
Indianapolis: Builders Square II - Indianapolis, Shortridge
Jackson, Miss.: Home Quarters
Kalamazoo, Mich.: Builders Square II
Lakeland, Fla.: Builders Square
Lancaster, Pa.: Builders Square
Louisville, Ky.: Home Quarters
Melbourne, Fla.: Builders Square II - Palm Bay
Memphis, Tenn.: Home Quarters - Hickory Ridge, Covington Corners
Milwaukee, Wis.: Builders Square II - Milwaukee, Holt, West
Allis, Silver Spring
Orlando, Fla.: Builders Square II - Apopka, Orlando. Builders
Square - Casselberry
Philadelphia: Hechinger (2). Builders Square II - Williamstown,
Langhorne
Pittsburgh: Hechinger - Carnegie, Ross Park Mall, W. Mifflin,
Monroeville. Builders Square - Braddock Hills, McKnight Road, W.
Mifflin. Builders Square II - Beaver Falls.
Racine, Wis.: Builders Square II
Richmond, Va.: Home Quarters - Richmond, Glen Allen
Saginaw Bay, Mich.: Builders Square II
Springfield, Mo.: Builders Square
St. Louis: Home Quarters - Crestwood
Syracuse, N.Y.: Builders Square - N. Syracuse, Cicero, DeWitt
Tampa-St. Petersburg, Fla.: Builders Square - Clearwater,
Brandon, Pinellas
Tulsa, Okla.: Builders Square (2)
Washington, D.C.: Hechinger - Gaithersburg, Temple Hills,
Fredericksburg, Va.
Wichita, Kan.: Builders Square (2)
York, Pa.: Hechinger
HEMISPHERE TRADING: Files Settlement Plan; $4.3M Added To Pool
--------------------------------------------------------------
Commercial Appeal Memphis TN reports on June 12, 1999 that
attorneys for a bankrupt Memphis investment firm have filed their
plan for settlement with creditors showing the company president
and her husband adding about $4.3 million to the pool for
distribution, court records say. When Hemisphere Trading Co.
ceased operating last fall, the company was furnishing investment
advice for about $60 million divided into about 250 accounts.
Among its investors-turned-creditors are the U.S. Ambassador to
China Jim Sasser, former Tennessee attorney general Charles
Burson, former Memphis State University head football coach
Richard Williamson and several Memphis lawyers. About 190
unsecured investors are identified in bankruptcy court records.
While clients were paying a fee for that service, a corporate
vice president, director and chief investment officer was making
some bad business and risky investment decisions that ended up
costing them millions of dollars. Now, Hemisphere Trading
president Gloria C. Felsenthal, and husband Edward
S. Felsenthal, an insurance executive, will kick in $2.25 million
in cash, an office building at 5796 Shelby Oaks Drive, and the
stock from the liquidation of The Hemisphere Group, Edward's
financial interest in an insurance business. "The Felsenthals
have been working for months to resolve the problems that led to
the bankruptcy," said Steven M. Salky, one of the Washington
attorneys representing the couple. "They have acted out of a
sense of commitment to the clients and friends in an effort to
maximize the return to all investors." The Felsenthals' plan for
repaying investors at least a portion of their financial losses
must generally be accepted by 90 percent of the creditors before
the Felsenthals turn over of the additional assets, according to
documents filed by Hemisphere Trading's bankruptcy counsel in
Memphis late Thursday.
Agreeing to this plan also would afford the Felsenthals some
insulation from participating creditors' lawsuits by agreement
and limiting their financial liability for the investments gone
bad. Creditors who want to make a claim against Hemisphere
Trading for their losses have until Thursday to file with U.S.
bankruptcy court in Memphis. About 20 creditors already have
filed claims totaling about $4.6 million and most creditors are
expected to file unsecured claims against Hemisphere Trading.
In addition to the $4.3 million offered by the Felsenthals, about
$3.5 million is expected to be paid in as a result of insurance
coverage, and Hemisphere Trading has about $435,000 in cash and
other assets available, court documents show.
Gloria Felsenthal previously loaned the company nearly $400,000
for winding down the business, court records show. Hemisphere
Trading also has potential legal claims against former executive
Lee Bradford Arberg and a large law firm with offices in Atlanta
and Washington, which provided the investment firm with legal
services, court documents show. No date has been set for
creditors to vote on the plan for payments. Hemisphere Trading
Co. voluntarily filed for Bankruptcy Court protection from its
creditors Feb. 10.
INTERNATIONAL WIRELESS: Seeks Approval Of Settlement With Telecom
-----------------------------------------------------------------
The debtors, International Wireless Communications Holdings, Inc.
and its affiliated debtors seek an order approving a settlement
with Telecom Ventures, LLC and Mobile Radio Holdings, Ltd. with
the US Bankruptcy Court for the District of Delaware.
Pursuant to a certain Acquisition Agreement, two of the debtors,
IWCH and RMDA agreed to sell to Telecom and MRH certain stock and
an option to purchase certain other stock and certain debt.
Telecom filed certain proofs of claim in the bankruptcy case and
the Sellers, MRH, Telecom and the Escrow Agent have agreed to
enter into a certain Stipulation providing for the resolution of
outstanding issues between the parties. The Escrow Agent shall
release $1.55 million to RMDA, Telecom shall withdraw its proofs
of claim, the Option Agreement shall be deemed assumed and the
Acquisition and Escrow Agreements shall be deemed fully performed
and satisfied. The debtor believes that the Stipulation is fair
and equitable and in the debtors' best interests.
KAMCO: Bankruptcy Lists 59 Creditors
-------------------------------------
Tulsa World reports on June 10, 1999 that creditors will meet
June 25 to sort out their claims to what is left of
a small east Tulsa business that shut down just before Memorial
Day.
KAMCO Inc./K.I. Industries, 303 S. 123rd East Place, filed for
bankruptcy May 25. The company listed assets between $500,000
and $1 million with debts of between $1 million and $10 million.
KAMCO/K.I., which listed employment of 45 in the 1999
Metropolitan Tulsa Chamber of Commerce directory, sold items for
school fund raisers. Pat Malloy III, attorney for the company,
said KAMCO/K.I. sold its items, which included logo sports towels
and magazine subscriptions, mostly out of state.
Trustee Karen Walsh said most of the company's business appeared
to be on the East Coast. KAMCO/K.I. had orders pending for fund-
raisers in South Carolina and Pennsylvania. Walsh said the
company was attempting to fill those orders before liquidation.
Only one secured creditor has filed a claim against the
KAMCO/K.I. estate. NationsBank N.A. reported that KAMCO/K.I.
owed the bank $2.7 million. KAMCO/K.I. listed 59 businesses as
creditors. They are scheduled to meet at 9 a.m. June 25 in the
federal building at 224 S. Boulder Ave.
LIFE ONE: Releases Unprofitable Sub to Improve Future Earnings
--------------------------------------------------------------
LifeOne, Inc., (OTCBB: LONE), (the "Company"), announced today
that it has taken an additional step in its revised business plan
to accelerate shareholder value by choosing not to invest more
resources into its subsidiary, National Affiliated Investors Life
Insurance Company (NAIL). The Company reached an agreement with
the Louisiana Insurance Commissioner to the entry of a voluntary
rehabilitation judgment for NAIL.
Brent Chapel, CFO of the parent company, said, "We have chosen to
direct Company resources to operations that hold much greater
promise of high investment returns to our shareholders. It's
clear that the recently overturned involuntary bankruptcy
petition filed against LifeOne by Black Sea and others has done
irreparable harm to the subsidiary in its ability to reestablish
a solid course of profitability."
In August 1998, an involuntary bankruptcy suit was filed against
LifeOne, which was dismissed on May 4, 1999. The dismissal is on
appeal by Black Sea to the United States Court of Appeals for the
Fifth Circuit. LifeOne believes that this improperly filed
involuntary bankruptcy petition triggered significant regulatory
controls which resulted in forcing substantial additional
regulatory costs on NAIL, the wholly-owned subsidiary, and which
inhibited NAIL from pursuing its plan for new ERISA stop-loss
business.
The Company had previously released components of its revised
business strategy, (see Company news releases March 18, 1999 and
June 2, 1999), which incorporates reverse-merger spinouts of
internet companies. Ben Wall, chairman of LifeOne said, "We have
added the first of several internet professionals to the LifeOne
Board of Directors. Ms. Katrina Montinola has high-level internet
experience and will help direct the selection of and course for
internet reverse mergers. Ms. Montinola has advanced internet
technical experience having served in several senior technical
positions with Oracle Corporation, and directed the creation of
PointCast's corporate suite of products. She also has senior
management experience, much of it in the volatile and fast-paced
product development arena. We are very pleased at her
acceptance."
LifeOne is also strengthening its insurance acquisition strategy.
The Company has been recruiting key insurance professionals to
manage LifeOne's insurance acquisition growth, several of whom
have been assisting LifeOne in reviewing workmen's compensation
and annuity companies.
LIVENT: Judge To Hold Hearing on July 7
---------------------------------------
The troubled theater production company Livent Inc. will seek
court approval July 7 to be acquired by SFX Entertainment Inc.,
the country's largest producer of live entertainment, a Livent
spokesman said. SFX has offered to buy Livent for $77.8 million
in cash, plus as much as $37 million in future payments, said Jim
Badenhausen, Livent spokesman. U.S. Bankruptcy Court Judge Arthur
Gonzalez said Wednesday in Manhattan that he plans to hold a
hearing on the proposed sale July 7. (Chicago Sun Times June 7,
1999)
LOEWEN: Creditors' Committee Chosen
-----------------------------------
Patricia A. Staiano, the United States Trustee for Region III,
convened an organizational meeting of the Debtors' creditors for
the purpose of forming one or more official committees to
participate in the Debtor's chapter 11 cases on Friday, June 11,
1999 at 9:30 a.m. Wilmington. John "Jack" D. McLaughlin, Esq.,
representing the U.S. Trustee announced that the committee will
be comprised of the following creditors:
* Allied Capital Management
* California Public Employees Retirement System (CalPERS)
* Deutche Bank
* Magten Asset Management
* Norwest Bank, as Indenture Trustee
* State Street Bank & Trust Co., as Indenture Trustee
* Teachers Insurance & Annuity Association (TIAA)
* Union Bank of Switzerland
* Wachovia Bank, N.A.
(Loewen Bankruptcy News - Issue 3- Bankruptcy Creditors' Service
Inc.)
MEDAPHIS CORP: "Settlement" Stock Offered Through Prospectus
------------------------------------------------------------
Medaphis Corporation has filed a registration statement with the
SEC offering a prospectus on common stock. The following
stockholders may offer and sell up to 5,000,000 shares of
Medaphis' common stock under the prospectus: The Canopy Group,
Inc. f/k/a NFT Ventures, Inc., Mark Rogers and NP Ventures, Ltd.
The selling stockholders acquired these shares from Medaphis in
connection with the settlement of various claims against the
company.
The selling stockholders may sell their shares of common stock
through public or private transactions at prevailing market
prices or at privately negotiated prices. Medaphis will not
receive any of the proceeds from the sale of shares of common
stock by the selling stockholders.
Medaphis has suffered setbacks and losses, and cautions that it
has a significant amount of indebtedness. As a result the company
has abundant obligations to make payments on debt. If the company
is unable to make the required debt payments, it could be
required to reduce or delay capital expenditures, sell certain of
its assets, restructure or refinance its indebtedness, or seek
additional equity capital. The company's ability to make payments
on its debt obligations will depend on future operating
performance, which will be affected by certain conditions that
are not in the control of Medaphis. Certain other difficulties
facing the company are disclosed in the prospectus. A full text
copy of the proposal is available at; http://www.sec.gov/cgi-
bin/srch-edgar?0000950144-99-007092 via the Internet, at no
charge.
MIDCON OFFSHORE: Louis Dreyfus Objects To Trustee's Use of Cash
---------------------------------------------------------------
Louis Dreyfus Natural Gas Corp. files its objection to Chapter 11
Trustee's motion for authority to extend and restrict use of cash
collateral to pay plan related expenses. The creditor objects to
the vagueness of the Trustee's purposes for payment.
Particularly, Louis Dreyfus objects to payments to Verner,
Liipfert, Bernard, McPherson and Hand with LDNG's cash
collateral.
OWENS CORNING: Investment Firm Acquires 10.3% Of Common Stock
-------------------------------------------------------------
Sanford C. Bernstein & Co., Inc. has obtained beneficial
ownership of an aggregate 5,654,678 shares of Owens Corning
common stock. The acquiring entity is a registered investment
advisor and member of the New York Stock Exchange. The stock
represents 10.3% of the outstanding shares of Owens
Corning's common stock, with dispostiive power held by the
Bernstein Co. in the total number, sole voting power in 2,908,997
shares and shared voting power in 730,689 shares.
The shared voting power exists with clients who have appointed an
independent voting agent with instructions to vote shares in the
same manner as Sanford C, Bernstein & Co., Inc. These shares are
held for the accounts of discretionary clients and these clients
have the right to receive dividends from and the proceeds of the
sale of such securities.
SCOOP INC: Plan Provides 95% Payment to Unsecured Creditors
-----------------------------------------------------------
Scoop, Inc., (OTCBB: SCPI), a Delaware corporation, filed its
Plan of Reorganization ("Plan") and Disclosure Statement in
Support of Plan of Reorganization ("Disclosure Statement") with
the Bankruptcy Court in the Central District of California, Santa
Ana Division.
The Plan, if confirmed in its current form, provides for a
distribution to Scoop's general unsecured creditors in an amount
in excess of 95% of their estimated allowed claims and
contemplates a business combination transaction between
Scoop and InfiniCom AB (publ), a holding company formed under the
laws of Sweden, on or about the effective date of the Plan. If
the Plan is confirmed, InfiniCom will acquire a 91% equity
interest in Scoop in exchange for InfiniCom's transfer to Scoop
of 100% of the stock in 24STORE.com Limited ("24STORE") and cash
consideration. 24STORE is a U.K. company which is one of the
leading European e-commerce businesses.
Scoop, Inc. is represented in its Chapter 11 case by Robert E.
Opera and Hamid R. Rafatjoo of the Irvine-based law firm of
Lobel, Opera & Friedman, LLP. Scoop, Inc.'s corporate and
securities counsel are William J. Cernius and Scott Shean of the
Costa Mesa office of Latham & Watkins. The Official Committee of
Creditors Holding Unsecured Claims is represented by Ira D.
Kharasch of the Los Angeles office of Pachulski, Stang, Ziehl &
Young LLP. InfiniCom AB is represented by Brian L. Holman, Neil
W. Rust, and Daniel H. Peters of the Los Angeles office of White
& Case LLP.
SYSTEMSOFT: Seeks Bar Date For Filing Proofs of Claim
-----------------------------------------------------
The debtor, Systemsoft Corporation, seeks entry of an order
establishing Friday, July 30, 1999 as the deadline, or bar date,
for all creditors to file proofs of claim against the bankruptcy
estate of SystemSoft Corporation.
THREE D DEPARTMENTS: Disclosure Statement Hearing
-------------------------------------------------
A hearing will be held on June 28, 1999 at 3:00 PM in US
Bankruptcy /Court Central District of California Santa Ana
Division, Courtroom 5D, 411 West Fourth St., Santa Ana California
92701 to determine the adequacy of the Disclosure statement of
Three D Departments, Inc.
The plan provides that unsecured claimants will be paid a total
payout of 20%. The debtor plans to reorganize and has negotiated
an agreement with BankBoston Retial Finance, Inc. whereby
BankBoston would provide a $7.5 million revolving line of credit
of which approximately $750,000 will be a fully funded Tranche B
loan at closing.
TWA: Sweetens Contract Offers
-----------------------------
Trans World Airlines and its biggest union have reached a
tentative contract agreement, avoiding a potentially devastating
walkout and ending two years of negotiations.
The deal, if approved by the rank-and-file, would avert a strike
or wildcat work stoppage that could have crippled even
destroyed the airline. "TWA couldn't afford a strike, and
neither could the members of the union," said Ted Evans, a TWA
skycap at Lambert Airport for 24 years. "Too many people
would have been out of work."
The deal, announced Sunday in New York, must still be approved by
TWA's 16,000 members of the International Association of
Machinists.
Details of the proposal were expected to be released Tuesday and
voting could begin by Wednesday. Union leaders said there would
be no work stoppages during the monthlong ratification process.
The union covers a wide range of workers baggage handlers, flight
attendants, ramp workers, ticket agents and mechanics. It makes
up three-fourths of the airline's total 21,000 workforce.
William O'Driscoll, president of Machinists District 142 in
Kansas City, Mo., said the new deal offered "a significant
improvement over previous contract offers from TWA." The
agreement came as something of a surprise considering TWA
officials had said their offer on May 28 was the "last, best"
proposal workers would get. O'Driscoll, TWA chief executive
William Compton and other negotiators, including former St. Louis
Mayor Vince Schoemehl, began meeting secretly in New York on
Tuesday. "We always had an interest in coming up with a package
that would be endorsed by the Machinists," Compton said. "It is
always better to get a deal that is endorsed by both sides."
Union workers had only last week begun to vote on the previous
contract offered by TWA, though indications were that they were
soundly rejecting it. Had that contract been rejected, the union
was threatening walkouts at selected cities over the busy Fourth
of July weekend. Compton had warned that a strike could doom the
airline, which has been to bankruptcy court twice in the 1990s
and has failed to turn an annual profit in 10 years, losing more
than $2 billion during that time.
Many employees haven't had a raise in 15 years, and part of the
reason the company's still around is because workers have given
up part of their salaries and benefits to help make ends meet.
TWA may have been pressed into action by the mere threat of a
strike. While domestic bookings were relatively steady, TWA
spokesman Jim Brown said, business travelers were beginning to
turn to other airlines.
"The business traveler component was weakening rapidly," Brown
said. "That's really the bread and butter of any major hub. We
expect that will come back very rapidly." "This is a happy day
for Trans World Airlines and its employees," said House
Minority Leader Dick Gephardt, D-St. Louis. "We all need to
understand that TWA as a corporation is important to the
financial and economic success of the future of St. Louis."
WIRELESS ONE: Equity Holders Are Due a Reprieve
-----------------------------------------------
Mergers Acquisitions Report reports on June 14, 1999 that MCI
WorldCom Corp. may have to provide Wireless One, Inc. equity
holders anywhere between $3 and $8 per share, or $50 million to
$135 million, after a revised restructuring.
That situation could arise if MCI, which has already acquired
$280 million, or 70%, of Wireless One's debt buys the company out
of bankruptcy. At presstime, Wireless One shares traded for
$3.03. Bankrupt Wireless One, through its financial advisor
Deutsche Bank Alex. Brown, is currently in negotiations with MCI,
investigating whether a previous restructuring plan is fair to
Wireless One equity holders, said Barry Ridings, co-head of the
restructuring group at Alex. Brown. Those discussions are moving
expeditiously, he said, adding that a resolution may not be
reached before the next court hearing, on June 25 in Delaware.
The previous plan was filed in March, before MCI and Sprint Corp.
announced public offers to acquire Wireless One's fixed-wireless
peers CAI Wireless Systems, Inc., People's Choice TV Corp. and,
most recently, American Telecasting, Inc. (See M&AR, 4/26/99 and
8/31/98). Under that plan, holders of old equity in Wireless One
would receive 4% of new equity, with the remaining 96% going to
creditors. Taking recent valuations of industry kin into
consideration, that plan would likely offer debtholders more
value than the par value and accrued interest of Wireless One's
debt and will have to be rejiggered, said Richard Noulles,
Wireless One general counsel. A new plan, to get court approval,
will probably have to offer more of the reorganized company to
old equity holders, he said.
Jackson, Miss.-based Wireless One, with a market cap of $50
million, owns MMDS spectrum, which telecommunications giants
consider one possible solution to offer-ing Internet connections
to consumers. By transmitting data over MMDS, long distance
providers could bypass connecting to customers through local
telephone networks.
Recent transactions have valued that spectrum at roughly $46 per
"line of sight" (LOS) potential customer. LOS discounts total
customer base within a transmission area by subtracting potential
customers who are blocked by obstructions, such as hills.
Wireless One, in Securities and Exchange Commission filings, has
set its LOS at 9.1 million, or $420 million by the $46-
per-LOS takeout value. Wireless One has roughly $395 million in
debt and accrued interest. After an unamortized discount of $71
million, $324 million of that debt was considered eligible to
compromise under the previously filed restructuring. Less
bankruptcy fees, that would leave roughly $5.20 for each
Wireless One share.
However, means of valuing the fixed wireless spectrum have
varied. An analyst at Tejas Securities, Michael Hidalgo, who has
followed the developing foray of big telecom into the industry
since 1997, pegged $60 times LOS as a takeout multiple.
Nicole Channing, an analyst at Credit Reseach & Trading, said
Sprint has paid roughly $46 per LOS, a number that a Sprint
spokesman confirmed. By that number, Channing valued Wireless One
shares at $3.
However, what MCI is paying for CAI remains unclear. Ridings put
the price MCI has paid for LOS at $50, which could translate to
as much as $7.35 per share.
Another source, Channing said, suggested that MCI is paying as
little as $20 per LOS for CAI. That source could not be reached
for comment.
Based on the fairness opinion by Lazard Freres for Sprint's $170
million takeout of American, less debt, valuations of fixed
wireless by total potential customer base were between multiples
of 32 and 39. Comment was not available from MCI.
Ridings declined to comment on whether other potential bidders
were involved in negotiations. Sprint declined to comment on
possible interest in Wireless One.
MCI and Sprint went head to head over American, which Sprint won
for $6.50 per share, or "$45 and change" per LOS, according to
the Sprint spokesman. According to the proxy filing on that deal,
MCI's indications of interest were not as high as Sprint's offer.
Amongst the larger players still left without a long distance
partner on the fixed wireless field is $640 million market cap
Nucentrix Broadband Networks, Inc., which completed its
restructuring in April. Nucentrix largely has rural markets,
considered less valuable to telecom players. For obvious reasons,
they provide fewer potential customers than urban markets.
However, Channing pointed out that the alternative to reaching
rural customers for Internet services, such as running fiber
optic cable of via satellite, are expensive. That potentially
makes the rural fixed wireless companies even more attractive
targets, she said. In addition, greater competition in urban
areas would likely tighten margins in those markets, she
said.
Meetings, Conferences and Seminars
----------------------------------
June 3-6, 1999
AMERICAN BANRKUTPCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, Michigan
Contact: 1-703-739-0800
June 7-8, 1999
TURNAROUND MANAGEMENT ASSOCIATION
Advanced Education Workshop
Le Meridien, Dallas, TX
Contact: 1-312-822-9700 or ljfialkoff@turnaround.org
June 17-19, 1999
AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION
COMMITTEE ON CONTINUING PROFESSIONAL EDUCATION
Fundamentals of Bankruptcy Law Conference
Crowne Plaza Hotel, Seattle, Washington
Contact: 1-800-CLE-NEWS
July 1-4, 1999
NORTON INSTITUTES ON BANKRUPTCY LAW
Western Mountains Bankruptcy Law Institute
Jackson Lake Lodge, Jackson Hole, Wyoming
Contact: 1-770-535-7722
July 10-15, 1999
COMMERCIAL LAW LEAGUE OF AMERICA
105th Annual Convention
Chateau Mont Tremblant, Mont Tremblant, Quebec
Contact: 1-312-781-2000 or clla@clla.org
July 15-18, 1999
AMERICAN BANRKUTPCY INSTITUTE
Northeast Bankruptcy Conference
Mount Washington Hotel & Resort
Bretton Woods, New Hampshire
Contact: 1-703-739-0800
August 4-7, 1999
AMERICAN BANRKUTPCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton, Amelia Island, Florida
Contact: 1-703-739-0800
August 26-28, 1999
AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION
COMMITTEE ON CONTINUING PROFESSIONAL EDUCATION
Real Estate Defaults, Workouts and Reorganizations
San Francisco, California
Contact: 1-800-CLE-NEWS
August 29-September 1, 1999
NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
1999 Convention
Grove Park Inn, Asheville, North Carolina
Contact: 1-803-252-5646 or info@nabt.com
September 16-18, 1999
AMERICAN BANRKUTPCY INSTITUTE
Southwest Bankruptcy Conference
The Hotel Loretto, Santa Fe, New Mexico
Contact: 1-703-739-0800
September 27-28, 1999
RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC.
Conference on Corporate Reorganizations
Regal Knickerbocker Hotel, Chicago, Illinois
Contact: 1-903-592-5169 or ram@ballistic.com
October 6-9, 1999
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
73rd Annual Meeting
San Francisco Marriott, San Francisco, California
Contact: 1-803-957-6225
October 22-26, 1999
TURNAROUND MANAGEMENT ASSOCIATION
1999 Annual Conference
The Fairmont--Atop Nob Hill, San Francisco, CA
Contact: 1-312-822-9700 or ljfialkoff@turnaround.org
November 29-30, 1999
RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC.
Distressed Investing '99
The Plaza Hotel, New York, New York
Contact: 1-903-592-5169 or ram@ballistic.com
December 2-4, 1999
AMERICAN BANRKUTPCY INSTITUTE
Winter Leadership Conference
La Quinta Resort & Club, La Quinta, California
Contact: 1-703-739-0800
**********
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
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Information contained herein is obtained from sources
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