/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/990623.MBXT R O U B L E D C O M P A N Y R E P O R T E R Wednesday, June 23, 1999, Vol. 3, No. 119 Headlines ABLE TELECOM: Increased Expenses, Acquisition Growing Pains AMERICAN RICE: Reorganization Plan Gets Conditional Approval BN1 TELECOMMUNICATIONS: Memorandum of Law CAI WIRELESS: Post-Merger Reshaping In Hands Of MCI Worldcom CITYSCAPE FINANCIAL: Confirmation of Plan FACTORY CARD: Hearing Set For Committee of Equity Holders FINE HOST: Entry of Order Confirming Second Amended Plan FIRSTPLUS FINANCIAL: Committee Responds To Exclusivity Extension FIRSTPLUS FINANCIAL: Seeks Authority To Employ Arthur Andersen FOOD COURT ENTERTAINMENT: Outline Of Reorganization Plan FORCENERGY: Needs Cash To Continue Exploration FORSTMANN & CO: On A Slippery Slope, Sales Declining GEOGRAPHICS: Reported Sales Up, Losses Remain Constant GULF STATES STEEL: Operational Losses Create Fear Of Insolvency HOME HEALTH CORP: 9th Order Authorizing Use of Cash Collateral INTERNATIONAL HERITAGE: Trustee Offers Tentative Settlement IRIDIUM: To Cut Prices, Alter Marketing Strategy LOEHMANNS: Company Proceeds As Debtor-in-Possession MCGINNIS PARTNERS: Continuance of Disclosure Statement Hearing MEDPARTNERS: Seeks Order Authorizing Sale of Non-Debtor Assets MORO CORP: Outline Of Reorganization Plan NATIONAL EQUITIES HOLDINGS: Files Chapter 7 NEUROMEDICAL SYSTEMS: Bar Date Set For July 30 NEXTWAVE: Court Denies FCC's Bid To Take NextWave Licenses NU-KOTE: Wells Fargo Objects To Adequacy of Disclosure Statement PARAGON TRADE: Seeks To Extend Maturity Date of Financing PICO PRODUCTS: Bankruptcy Under Consideration As Business Stalls PITTSBURGH PENGUINS: Lemieux's Plan Ousts SMG and Fox Sports Net PLUMA INC: Seeks Use of Additional Cash Collateral QUADRAX CORP: To Hire Accounting Firm To Prepare Projections QUALITECH STEEL: Bar Date Set For July 7 RAND ENERGY: Seeks Approval of Bid Procedures RECYCLING INDUSTRIES: Seeks Nod for Sale of Assets To B&R Trading SAMSONITE: Bottom Line Improves, Sales Up STARTER CORP: NFL Players Seeks Assumption or Rejection TALK AMERICA: Court Authorizes Employment of Professionals TALK AMERICA: Court Authorizes Employee Retention Plan ********** ABLE TELECOM: Increased Expenses, Acquisition Growing Pains ----------------------------------------------------------- Able Telcom Holding Corp. and its subsidiaries develops, builds and maintains communications systems for companies and governmental authorities. The company is headquartered in West Palm Beach, Florida, and operates its subsidiaries throughout the United States, as well as in South America. Recently completed acquisition, as a result of agreements last year with Worldcom, has created a smaller net yield as the company commences its fiscal year. Able's three-month period ended April 30, 1999 yielded revenue of $124,481,000 with net income of $41,000. The same period last year saw Able Telecom with revenues of $34,552,000 and net income of $867,000. AMERICAN RICE: Reorganization Plan Gets Conditional Approval ------------------------------------------------------------ American Rice Inc. won provisional approval of its amended plan of reorganization, according to an attorney for the company. The U.S. Bankruptcy Court in Corpus Christi, Texas, last week approved a settlement relating to inter-company claims between American Rice and Erly Industries Inc., American Rice's former parent, which is also reorganizing under chapter 11 bankruptcy protection. The court's approval of the settlement cleared the way for the provisional confirmation. Under the terms of the settlement, American Rice received an undisputed allowed claim in the Erly case of $18 million. Erly also waived its claims in the American Rice bankruptcy case, thereby eliminating any disputes as to claims between Erly and its former subsidiary. The court conditioned approval of American Rice's amended plan of reorganization upon a short-term resolicitation of American Rice's bondholders based upon the modification, and the sign off of the modification by the company's bank group and the indenture trustee. (The Daily Bankruptcy Review and ABI June 21, 1999) BN1 TELECOMMUNICATIONS: Memorandum of Law ----------------------------------------- BN1 Telecommunications Inc. submits a memorandum of law in support of confirmation of the debtor's liquidating plan of reorganization. The plan separates the various claims against the debtor into two classes of secured claims and two classes of unsecured claims, which take into account the differing nature and priority of claims against the debtor. CAI WIRELESS: Post-Merger Reshaping In Hands Of MCI Worldcom ----------------------------------------------------------- On June 4, 1999, MCI WorldCom acquired 8,284,425 shares in keeping with a purchase and sale agreement dated March 23, 1999 between MCI WorldCom and certain sellers. The shares acquired represent approximately 48.0% of the issued and outstanding common stock of CAI. MCI WorldCom has also entered into a second purchase and sale agreement dated as of March 23, 1999 with certain other sellers. Under this agreement, MCI WorldCom has agreed to purchase from the second parties, 2,270,715 shares, representing approximately 13% of the issued and outstanding common stock of CAI. The purchase price for the shares under these agreements is less than the $28 price per share in the merger. MCI WorldCom expects that the business and operations of CAI will be continued substantially as they are currently being conducted. MCI does plan, though, to evaluate and review CAI's businesses, operations and properties and make such changes as are deemed appropriate in light of the increasing demand for high speed Internet access and additional phone line services and other circumstances as they arise. After the merger, MCI WorldCom expects to explore the possibility of taking steps that would be required to cause CS Wireless Systems, Inc., a 94% owned subsidiary of CAI, to become a wholly owned subsidiary of CAI or MCI WorldCom. Additionally, after the merger, MCI WorldCom expects to take appropriate steps to review and possibly reduce or restructure the outstanding indebtedness of CAI and CS. MCI WorldCom has indicated that it has no present plans or proposals that would relate to or result in an extraordinary corporate transaction such as a merger, reorganization or liquidation involving CAI or any of its subsidiaries or a sale or other transfer of a material amount of assets of CAI or any of its subsidiaries. Neither does MCI Worldcom anticipate any present material change in the capitalization or dividend policy of CAI or any other material change in CAI's corporate structure or business or the composition of CAI's board of directors or management. The text of the merger agreement, and relevant information, may be read at http://www.sec.gov/cgi-bin/srch-edgar?0000914749-99- 000013 on the Internet, at no cost. CITYSCAPE FINANCIAL: Confirmation of Plan ----------------------------------------- On June 10, 1999, the Bankruptcy Court for the Southern District of New York entered an order confirming the first amended joint plan of reorganization of Cityscape Financial Corp. and Cityscape Corp. FACTORY CARD: Hearing Set For Committee of Equity Holders --------------------------------------------------------- On July 9, 1999 at 10:00 AM, the court will hear the motion for appointment of an Official Committee of Equity Holders. FINE HOST: Entry of Order Confirming Second Amended Plan -------------------------------------------------------- On May 18, 1999, the US Bankruptcy Court for the District of Delaware entered an order confirming Fine Host Corporation's second amended plan of reorganization. The Confirmation Order is on filed with the Clerk of the Bankruptcy Court, in the US Bankruptcy Court, 824 North Market Street, Wilmington, Delaware 19801. The Effective Date of the plan occurred on May 27, 1999. FIRSTPLUS FINANCIAL: Committee Responds To Exclusivity Extension ---------------------------------------------------------------- The Official Unsecured Creditors' Committee of FirstPlus Financial Inc. files its response to the motion of FirstPlus Special Funding Corp. to extend exclusivity. The Committee serves as the Official Unsecured Creditors' Committee for Special Funding's parent company, FirstPlus Financial, Inc. The Committee understands FirstPlus Special Funding corporation to have been a special purpose entity created for purposes of certain financing transactions with German American Capital Corporation("GACC"). The Committee has been consulted with by the debtors in connection with Special Funding's proposed settlement with GACC. The Committee has not reached a final conclusion on the position it will take with respect to the proposed settlement between the debtors and GACC, to be heard on July 21, 1999. However, the Committee believes that Special Funding's request for a 60-day extension of its exclusivity periods to file a plan and solicit a vote approving such a plan, pending the hearing, is appropriate. FIRSTPLUS FINANCIAL: Seeks Authority To Employ Arthur Andersen -------------------------------------------------------------- The debtors, Firstplus Financial Inc. and Firstplus Special Funding Corp. request that the court approve the employment of Arthur Andersen LLP as their financial advisors. Andersen would assist the debtors with valuation issues and matters concerning the development of a plan of reorganization and disclosure statements for the debtors. Specifically, the firm will value various assets and businesses of the debtors to include the valuation of the residual loan values of the debtors' loan pools; assist in the development of the debtors' business plan; assist in the development of the debtor's plan of reorganization and Disclosure Statement and provide expert testimony if necessary in Bankruptcy Court on various matters including valuation issues and bankruptcy feasibility and confirmation issues. Hourly fees charged By the firm range form $375 to $100. FOOD COURT ENTERTAINMENT: Outline Of Reorganization Plan -------------------------------------------------------- On May 7, 1999, the United States Bankruptcy Court for the District of Delaware confirmed the first modified Chapter 11 plan of reorganization, dated March 9, 1999 of Food Court Entertainment Network, Inc. The Plan generally provides that each holder of an allowed general administrative claim, an allowed professional administrative claim, an allowed tax claim and, an allowed priority claim will be paid, in cash, an amount equal to the allowed amount of each claim. Each holder of an allowed general unsecured claim will receive a pro rata share of the debtor's cash remaining after payment in full of all allowed administrative, tax and priority claims, and any net recoveries from avoidance claims, the promissory note of the reorganized debtor in the amount of $50,000, bearing interest at the rate of five percent per year, payable in full on May 18, 2000, and shares aggregating five percent of the issued and outstanding shares of common stock of the reorganized debtor. All equity interests in the debtor, including all Class A common stock, Class A warrants, Class B common stock, Class B warrants and rights under any employee or director stock option plans and any other options or warrants in the debtor have been canceled. The reorganized debtor will, in following the plan, issue new shares of common stock totaling, in the aggregate, 5,000,000 shares. All of the members of the Board of Directors and executive officers of the debtor have resigned and David W. Menard will be the reorganized debtor's sole director and officer. Food Court, through a certificate of amendment to its amended and restated Certificate of Incorporation filed on June 7, 1999 with the Secretary of State for the State of Delaware, has changed its capital structure and name from Food Court Entertainment Network, Inc. to Moro Corporation. FORCENERGY: Needs Cash To Continue Exploration ---------------------------------------------- Forcenergy Inc, a Delaware corporation, formerly Forcenergy Gas Exploration, Inc., is an independent oil and gas company engaged in the exploration, acquisition, development, exploitation and production of oil and natural gas. Forcenergy and its predecessors have been engaged in the oil and gas exploration and production business since 1982, the year in which it was founded by its current President and Chief Executive Officer, Stig Wennerstrom. In March 1999, the company filed Chapter 11 bankruptcy proceedings. The company states that the bankruptcy petitions were filed in order to preserve cash and to give Forcenergy the opportunity to restructure its debt. In conjunction with the Chapter 11 filing, the company's common stock was delisted by the New York Stock Exchange. Shortly after delisting from the New York Stock Exchange, Forcenergy's common stock began trading on the OTC Bulletin Board. Although some market for the company's common stock exists, liquidity and access to debt and equity capital markets has been severely limited. The company is fully drawn under its existing senior credit facility and is currently in violation of various of the covenants in the credit facility agreement. While currently maintaining and maximizing the operations of its producing properties by utilizing cash accumulated subsequent to the Chapter 11 filing, the use of that cash is governed by provisions of a court-approved cash collateral order. The company is also negotiating with potential lenders to provide additional debtor-in-possession financing. Forcenergy's preparation of a plan of reorganization has not yet been submitted to the Bankruptcy Court The company reported an operating loss of $268.0 million for the year ended December 31, 1998, compared to the $126.4 million operating loss recorded for the prior year. Net loss for 1998 was $314.5 million compared to a net loss of $134.8 million in 1997. Revenues were $273.5 million for the year ended December 31, 1998, compared to $284.2 million reported last year. FORSTMANN & CO: On A Slippery Slope, Sales Declining ---------------------------------------------------- Forstmann & Company, Inc. is a leading designer, marketer and manufacturer of innovative, high quality woolen, worsted and other fabrics which are used primarily in the production of brand-name and private label apparel for men and women, as well as specialty fabrics for use in billiard and gaming tables, sports caps and school uniforms. The apparel industry represents the majority of the Forstmann's customers. The company has incurred net losses of $19.0 million, $7.0 million and $17.8 million in fiscal years 1998, 1997 and 1996, respectively. Net sales declined from $199.0 million in fiscal year 1997 to $149.6 million in fiscal year 1998. For the thirteen-week quarter ending May 2, 1999 Forstmann reported revenue of $27.0 million down from $49.6 million in the same quarter of last year. Net loss of &1.0 million was sustained in the quarter ended May 2, 1999 as compared to a $1.5 million net gain in that quarter of 1998. As of February 8, 1999, the company and its lenders amended its loan and security agreement, waived certain financial covenant defaults arising from the company's financial results for fiscal year 1998 and set new financial covenants for fiscal year 1999. The company's availability under its revolving loan facility was approximately $1.5 million at May 2, 1999 as compared to $25.5 million at May 3, 1998. At May 30, 1999, the company's availability under its revolving loan facility was $1.3 million. Also, at May 2, 1999, Forstmann was not in compliance with the minimum EDITDA covenant contained in its loan and security agreement. Forstmann's ability to maintain adequate availability to meet its operating needs is dependent on achieving future sales and successful implementation of its cost reductions. The majority of the company's customers are in the domestic apparel industry that continues to suffer an economic decline as a result of higher levels of imports and changing fashion trends. If these trends continue, the company's results of operations and financial condition will continue to deteriorate, likely at a faster rate than previously experienced. GEOGRAPHICS: Reported Sales Up, Losses Remain Constant ------------------------------------------------------ Geographics, Inc. was incorporated as a Wyoming corporation on September 20, 1974. The company is engaged in the development, manufacture, marketing and distribution of specialty paper products, generally made using pre-printed designs, including stationery, business cards, brochures, memo pads and paper cubes. There has been a significant change in the composition of Geographic's senior management and the Board of Directors in the past two years. Additionally, the company's securities were delisted from the NASDAQ National Market and subsequently the NASDAQ Smallcap Market during fiscal 1998. Trading of the company's securities has continued on the NASDAQ OTC Electronic Bulletin Board. The delistings may restrict marketability of the company's common stock. The common shares of the company were suspended from trading on The Toronto Stock Exchange on June 11, 1998 due to the failure of the company to provide the required financial information and filings. The company's fiscal year ends on March 31 and reported net sales for the year increased 41.3% to $24,097,845 from $17,051,142 in fiscal year 1997. Geographics incurred a loss from operations in fiscal year 1998 of $8,011,719 compared to an operating loss of $7,598,804 during fiscal year 1997. The loss before provision for income taxes was $9,622,709 in fiscal year 1998 compared to the loss before provision for income taxes of $9,085,783 in fiscal year 1997. GULF STATES STEEL: Operational Losses Create Fear Of Insolvency --------------------------------------------------------------- Gulf States Steel Inc. is tolling an ominous warning these days. The company admits to losses in the current and prior years and during the second quarter of fiscal 1999, orders, shipments and pricing for its products continued to be adversely affected by increased foreign steel imports. As a result of such increased imports and their effect on the domestic steel market, the company has noted that orders, shipments and pricing have decreased significantly in fiscal 1999 and Gulf says they are expected to remain at low levels throughout much of the year. Given current market conditions, the level of debt and associated interest expense, required capital expenditures and improvements and the potential realization of loss contingencies, the company believes that it will continue to incur losses in fiscal 1999. If the Gulf is unable to increase sales and pricing, continue to reduce costs and implement productivity improvements, maintain its borrowing availability under the revolving credit facility, obtain additional financing, and if the level of foreign steel imports is not reduced, the company admits that it may not have sufficient liquidity and capital resources to meet its projected fiscal 1999 cash requirements. During the company's first quarter ended April 30, 1999 losses sustained were $23.8 million on revenue of $78.9 million. During the same period in 1998 loss was $2.0 million and revenue was $103.6 million. HOME HEALTH CORP: 9th Order Authorizing Use of Cash Collateral -------------------------------------------------------------- On June 14, 1999 the US Bankruptcy Court for the District of Delaware entered an order authorizing the debtor to use cash collateral on a limited basis pursuant to a ninth stipulation and order. The debtors request as part of the stipulation that the Banks consent to their limited use of cash collateral which the debtors represent is necessary to fund their operations. INTERNATIONAL HERITAGE: Trustee Offers Tentative Settlement ----------------------------------------------------------- International Heritage, Raleigh, N.C., filed chapter 7 last November, and the Securities and Exchange Commission (SEC) filed a civil complaint that its president, Stanley Van Etten and two co-founders were responsible for fraud, filing false reports and illegal sale of unregistered securities. According to a newswire report, a federal bankruptcy trustee last week proposed a settlement that would force Van Etten to surrender a $3.5 million bond he had posted and to pay the SEC another $150,000. The SEC alleges that International Heritage was nothing by a pyramid scheme, where investors or distributors make their money back from fees paid by newer investors. International Heritage paid distributors $250 each to start up sevn marketing networks, plus $100 for training materials. The SEC quoted the company's sales pitch that investing the maximum $1,850 could return up to $15,400 a week in revenue. The tentative settlement agreement is subject to approval by the SEC, the bankruptcy court and a Atlanta federal judge with oversight on the SEC's complaint. (ABI 22-June-99) IRIDIUM: To Cut Prices, Alter Marketing Strategy ------------------------------------------------ The Wall street Journal reports on Tuesday June 22, 1999 that Iridium LLC announced that since the company went commercial in November, about 15,000 users have signed on, and the company has been subject to complaints about poor quality of service. The company says that it is lowering its prices as much as 65% as of July 1. In addition, Iridium phones will cost about $1,000 instead of the current $3,000. The company also hopes for stronger sale to industrial users such as oil companies and fishermen. LOEHMANNS: Company Proceeds As Debtor-in-Possession --------------------------------------------------- On May 18, 1999, Loehmanns filed a petition for relief under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. Since the petition date, Loehmanns has continued to operate as a debtor-in- possession under the Bankruptcy Code. As a result of the filing of the Chapter 11 Case, all pending litigation against the company became automatically stayed as provided in the Bankruptcy Code. Loehmanns' management is in the process of developing a reorganization strategy and is evaluating its operations. Until a reorganization plan is confirmed by the Court, payments of prepetition liabilities are limited to those approved by the Court. On May 18, 1999, interim financing arrangements with Congress Financial Corporation were approved by the Bankruptcy Court providing for a credit line of $20 million in excess of the amount of the outstanding indebtedness at the petition date, which was $47.9 million. The interim financing arrangements covered the period from May 18, 1999 to June 7, 1999. On June 7, 1999, the Bankruptcy Court approved the DIP Facility. The DIP Facility provides for a revolving line of credit and a letter of credit facility aggregating $75.0 million. Net sales for the thirteen week period ended May 1, 1999, were $108.2 million as compared to $110.2 million for the comparable period in the prior year, a decrease of approximately $2.0 million or 1.8%. The company experienced a net loss in the 1999 period cited of $3.9 million whereas during the similar period in 1998 Loehmanns saw net income of $1.7 million. MCGINNIS PARTNERS: Continuance of Disclosure Statement Hearing -------------------------------------------------------------- The debtors, McGinnis Partners Focus Fund, LP and McGinnis Global Fund, Ltd. state that the Creditors' Committee, the Investors' Committee and the debtors are still negotiating a stipulation with respect to among other things, the promulgation of plans of reorganization in the Chapter 11 cases. The parties are close to finalizing the stipulation and plan on submitting the stipulation to the court for consideration within the next few weeks. It is clear that no plan and disclosure statement will be filed prior to the hearing set for June 23, 1999. Accordingly the debtors request a continuance of the hearing so as to permit the parties to conclude the stipulation and proceed in the plan process. It is requested that the court continue and reset the hearing for a date in late July 1999. MEDPARTNERS: Seeks Order Authorizing Sale of Non-Debtor Assets -------------------------------------------------------------- The debtors, Medpartners Provider Network Inc. ("MPN"), debtor, seeks an order authorizing MPN's consent to the proposed sale of certain hospice and home health agency assets owned by MedPartners, Inc. and Talbert Health Services Corporation to Odyssey Healthcare Inc. The purchase price, subject to potential adjustments, is $775,000. MORO CORP: Outline Of Reorganization Plan ------------------------------------------ On May 7, 1999, the United States Bankruptcy Court for the District of Delaware confirmed the first modified Chapter 11 plan of reorganization, dated March 9, 1999 of Food Court Entertainment Network, Inc. The Plan generally provides that each holder of an allowed general administrative claim, an allowed professional administrative claim, an allowed tax claim and, an allowed priority claim will be paid, in cash, an amount equal to the allowed amount of each claim. Each holder of an allowed general unsecured claim will receive a pro rata share of the debtor's cash remaining after payment in full of all allowed administrative, tax and priority claims, and any net recoveries from avoidance claims, the promissory note of the reorganized debtor in the amount of $50,000, bearing interest at the rate of five percent per year, payable in full on May 18, 2000, and shares aggregating five percent of the issued and outstanding shares of common stock of the reorganized debtor. All equity interests in the debtor, including all Class A common stock, Class A warrants, Class B common stock, Class B warrants and rights under any employee or director stock option plans and any other options or warrants in the debtor have been canceled. The reorganized debtor will, in following the plan, issue new shares of common stock totaling, in the aggregate, 5,000,000 shares. All of the members of the Board of Directors and executive officers of the debtor have resigned and David W. Menard will be the reorganized debtor's sole director and officer. Food Court, through a certificate of amendment to its amended and restated Certificate of Incorporation filed on June 7, 1999 with the Secretary of State for the State of Delaware, has changed its capital structure and name from Food Court Entertainment Network, Inc. to Moro Corporation. NATIONAL EQUITIES HOLDINGS: Files Chapter 7 ------------------------------------------- National Equities Holdings Inc., Houston, which does business as NEHI Petroleum, announced that it has filed for chapter 11 protection. The Board of Directors unanimously agreed to file as a result of growing debt and the company's inability to generate income. Management had previously announced the filing was likely. (ABI 21-June-99) NEUROMEDICAL SYSTEMS: Bar Date Set For July 30 ---------------------------------------------- On June 15, 1999, the Honorable Peter J. Walsh entered an order setting a bar date of July 30, 1999 for filiing proofs of claim in the case of Neuromedical Systems, Inc. NEXTWAVE: Court Denies FCC's Bid To Take NextWave Licenses ---------------------------------------------------------- The U.S. Bankruptcy Court in White Plains, N.Y., has denied the Federal Communications Commission's motion to lift NextWave Personal Communication Inc.'s automatic stay to allow the agency to revoke and cancel the company's 63 C-Block licenses. "Whatever the verbiage, the substance of the matter is that the FCC's right to payment as a creditor is subject to avoidance under the relevant Bankruptcy Code provisions just like the right to payment of any other creditor... The modification of the FCC's rights as a creditor in accordance with the Bankruptcy Code does not constitute a default by NPCI, and NPCI is not in default in respect of its modified payment obligations," the court's June 16 order concluded. (The Daily Bankruptcy Review and ABI - June 21, 1999) NU-KOTE: Wells Fargo Objects To Adequacy of Disclosure Statement ---------------------------------------------------------------- Wells Fargo Business Credit, Inc. formerly Norwest Business Credit, Inc., a creditor in the case of Nu-Kote Holding, Inc. and its affiliates, objects to the adequacy of the disclosure statement filed by NationsBank, NA for itself and as agent for eight other lenders and the Official Unsecured Creditors Committees for Nu-kote International, Inc. and International Communications Materials, Inc. Wells Fargo asserts that appropriate definitions are not included in the plan, and that the Disclosure Statement is confusing in that it does not provide an initial summary outlining the various classes of creditors and their respective treatments. Specifically, in re-defining its own treatment, Wells Fargo provides a description of its treatment and provides that the debtors shall not be discharged from their indemnification obligations to it and that any distributions shall not release the debtors from any claims asserted by Wells Fargo. Wells Fargo also states that the Disclosure Statement should be modified to expressly permit the pursuit of administrative claims. It also points out that the Disclosure Statement does not disclose that the early payment of amounts due under the Norwest Agreement result in a prepayment fee owing to Norwest. PARAGON TRADE: Seeks To Extend Maturity Date of Financing --------------------------------------------------------- The debtor, Paragon Trade Brands, Inc. requests authority to extend the maturity date of its postpetition financing and to revise certain financial and reporting covenants in connection with the financing. This amendment would extend the Maturity Date of the D"IP Facility to March 26, 2000. Specifically, the capital expenditures covenant and the EBITCA covenant have been modified. The debtor does not anticipate that it can arrange financing on less onerous terms than provided for in the DIP facility. Any replacement financing would entail extensive and time-consuming negotiations, and would most likely cost fees in excess of $1 million (based on a $75 million facility). The debtor believes that the DIP lenders are offering postpetition credit on competitive terms. PICO PRODUCTS: Bankruptcy Under Consideration As Business Stalls ---------------------------------------------------------------- Pico Products, Inc. and its subsidiaries design, manufacture and distribute products and systems for the pay TV and cable TV industries, broadband communications and other signal distribution markets. At April 30, 1999 the company was in technical violation of several of the financial covenants related to both its senior and subordinated debt. These factors, among others, may indicate that the company will be unable to continue as a going concern. The senior lender notified Pico Products that it had terminated its credit facility, effective December 31, 1998. The company's senior lender has continued to advance funds in accordance with the facilities advance rates. However, there is no assurance that the senior lender will continue to advance funds and continuation of the senior debt facility is critical to the day- to-day operations of the company. In the event the senior lender did not continue to advance funds, the company would need to find alternate sources of financing and it is highly unlikely that it could obtain such financing at acceptable terms and conditions. Consequently it would have to consider filing for protection under Chapter 11 of the Bankruptcy Code. Pico has retained an investment banking firm to advise it with respect to the exploration of strategic alternatives that could lead to the possible sale or merger of the company. Such a sale or merger might be consummated under Chapter 11 of the Bankruptcy Code. However, the company has not determined a course of action and may ultimately decide to remain independent. Pico Products had approximately $5,990,000 outstanding under the senior facility and the company had $109,000 of availability under its line of credit on April 30, 1999. The company reported a quarterly loss, for the quarter ended April 30, 1999, of $522,00 on revenues of $4,388,000. The same quarter of 1998 saw a net loss of $360,000 on revenues of $7,089,000. PITTSBURGH PENGUINS: Lemieux's Plan Ousts SMG and Fox Sports Net ---------------------------------------------------------------- Former Pittsburgh Penguins Mario Lemieux filed his reorganization plan for the hockey team yesterday, and it calls for ousting both the Civic Arena landlord, SMG, and broadcaster Fox Sports Net Pittsburgh, according to the Associated Press. In his revised plan, Lemieux would pay himself significantly less than he originally proposed and give up his right to sue former team co-owner Roger Marino for past wages. Other creditors would also abandon claims against Marino, and in return, Marino would make a $500,000 payment to unsecured creditors and pay off a loan the team took from the National Hockey League (NHL). Lemieux's new plan would convert $20 million of his $32.5 million in debt into an ownership stake in the team, and he will get a $5 million payment and forgive the remaining $7.5 million. Under his original plan, he would have been repaid the entire amount over a 10-year period. The NHL, along with SMG and Fox, have filed their own plans, so three plans will be considered in court on Thursday. PLUMA INC: Seeks Use of Additional Cash Collateral -------------------------------------------------- The debtor, Pluma Inc., seeks entry of an order authorizing the use of cash collateral on terms less restrictive than those contained in the Final Stipulation and Order for the debtor's use of cash collateral and for adequate protection entered on June 8, 1999. The debtor requests that the "collateral coverage amount" be reduced from $41,850,000 to $39,850,000. In order for the debtor to continue to operate and meet its post-petition obligations, including its payroll obligations, the debtor must have authority to use up to $2 million of its cash collateral not presently subject to use by the debtor as a result of the $41,850,000 collateral coverage amount restriction. The debtor believes that its reasonable needs would be met through the reduction of the Collateral Coverage Amount restriction by $2 million to $39,850,000 which is the relief requested herein. The debtor states that unless the debtor has the use of the additional cash collateral, strong potential exists for great diminution in the going concern value of its assets. The debtor has made significant progress in working with entities toward takeout or exit financing which would form the basis of a plan of reorganization. The debtor fully intends to file a plan, most likely within the next 40 days, and believes that the prospects for reorganization are very good. QUADRAX CORP: To Hire Accounting Firm To Prepare Projections ------------------------------------------------------------ The debtor, Quadrax Corporation, seeks court authorization to employ the accounting firm of Kahn, Litwin, Renza & Co., Ltd. for the limited purposes of preparing financial projections for the operations of the proposed Reorganized Debtor to be attached to the Disclosure Statement accompanying a plan of reorganization. QUALITECH STEEL: Bar Date Set For July 7 ---------------------------------------- On June 17, 1999, the US Bankruptcy Court for the Southern District of Indiana entered an order establishing a Bar Date of July 7, 1999 in the case of Qualitech Steel Corporation and Qualitech Steel Holdings Corp. RAND ENERGY: Seeks Approval of Bid Procedures --------------------------------------------- The debtor, Rand Energy Company seeks an expedited hearing on the motion to approve bid procedures for the sale of certain Texas assets. The debtor and KLT Gas, Inc. have entered into a letter of intent, whereby the debtor agreed to sell KLT certain oil and gas properties located in Duval County, Texas, East Rosita Field and Hidalgo County, Texas, located in Cadre Field. The debtor will receive aggregate cash consideration of $18,180,000. The purchase price is the highest and best offer received by the debtor. Any offers from third parties must be at least $18,500,000. If there is a better offer than KLT's, the debtor will pay $100,000 to KLT as an expense reimbursement. RECYCLING INDUSTRIES: Seeks Nod for Sale of Assets To B&R Trading ----------------------------------------------------------------- The debtors, Recycling Industries of Tyler, Inc., Ferex Corporation, Ferex Metals Recycling, Inc., Ferex Metals Recycling of McKinney, Inc. and K&L Auto Recycling Inc. seek court approval of a sale of substantially all of the assets, properties and business of each of the debtors to B&R Trading, Inc. for a purchase price of $2.85 million. Competing overbids will be permitted, and a breakup fee of $100,000 is provided in the event that a sale to a competing bidder is consummated. The debtors submit that the sale of assets is justified by compelling business reasons. Unless the debtors sell their business operations and assets, there is the very real and substantial risk that the scrap metal processing facilities operated by these debtors will become a continuing drain on the operating resources of the jointly administered debtors. SAMSONITE: Bottom Line Improves, Sales Up ----------------------------------------- Samsonite Corporation is engaged in the manufacture and sale of luggage and related products throughout the world, primarily under the Samsonite, American Tourister, and Lark brand names. The principal customers of the company are department/specialty retail stores, mass merchants, catalog showrooms and warehouse clubs. The company also sells its luggage and other travel related products through its company-owned stores. Samsonite's consolidated net sales increased from $156.7 million in fiscal 1999 to $175.9 million in fiscal 2000, an increase of $19.2 million or 12.3%. Fiscal 2000 sales were favorably impacted by the increase in the value of the Belgian franc compared to the U.S. dollar. Without the effect of the exchange rate difference, fiscal 2000 sales would have increased by $16.0 million or approximately 10.2%. The company had a net loss in fiscal 2000 of $3.9 million compared to a net loss in fiscal 1999 of $10.9 million. The decrease in the net loss from the prior year of $7.0 million, according to Samsonite, is caused by the effect of the increases in operating and other income and a decrease in extraordinary loss, offset by a decrease in interest income and an increase in interest expense and income taxes during fiscal 2000. STARTER CORP: NFL Players Seeks Assumption or Rejection ------------------------------------------------------- The National Football League Players Incorporated seeks a court order compelling the immediate assumption or rejection of a retail product license agreement. A hearing will take place on July 22, 1999 at 3:30 PM. TALK AMERICA: Court Authorizes Employment of Professionals ---------------------------------------------------------- The Honorable James A. Goodman, US Bankruptcy Judge for the US Bankruptcy court, District of Maine, entered an order authorizing the debtor to hire Drew Swenson and the firm of Berry, Dunn, McNeil & Parker to serve as accountants for the debtor. If the total fees for the accountants exceed $25,000, the debtor shall apply to the court for authorization to continue to retain the firm. The court entered an order authorizing the employ of David J. Perkins, Esq., and Perkins, Olson & Pratt, PA as local counsel for the Unsecured Creditor's Committee. The court entered an order authorizing the employ of the law firm of Riemer & Braunstein LLP as counsel to the Official Unsecured Creditors' Committee. The debtor is authorized to remit a $15,000 retainer in connection with services to be rendered in this case. The court entered an order authorizing the employment of special counsel, Geoffery Levitt, Gary Hailey, and the firm of Venable, Baetjer, Howard & Civiletti as special counsel in this case on the terms set forth provided that in the event the total fees exceed $25,000, the debtor shall apply to the court for leave to continue to retain the special counsel and to expand the permitted scope of such services. The court entered an order approving the application of the Official Unsecured Creditors' Committee seeking authority to employ the law firm of Riemer & Braunstein LLP as its counsel. The debtor is authorized to remit a $15,000 retainer to the firm in connection with services to be rendered in this case. TALK AMERICA: Court Authorizes Employee Retention Plan ------------------------------------------------------ The US Bankruptcy Court for the District of Maine entered an order granting the debtor's motion for authority to implement an employee retention program. ********** 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. 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