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/raid1/www/Hosts/bankrupt/TCR_Public/990629.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 29, 1999, Vol. 3, No. 123 Headlines AAMES FINANCIAL: Prepares For Annual Meeting - New Equity Partner ALLIANCE ENTERTAINMENT: Court Approves Disclosure Statement AMERICAN RICE: Monthly Figures Continues To Show Net Losses BRAZOS SPORTSWEAR: Court Approves Asset Purchase Agreement CAJUN ELECTRIC: Bidders Have One Month to File Final Briefs CODON PHARMACEUTICALS: Seeks Extension of Exclusivity DISCOVERY ZONE: Closes Stores and Announces Acquisition DOW CORNING: Confirmation Hearings Begin FIRSTPLUS FINANCIAL: Committee Taps Boston Portfolio Advisors GRAHAM-FIELD HEALTH: One-Fourth Voting Power Rests With BIL IMAGYN MEDICAL TECHNOLOGIES: Files Plan LOEWEN: Reports Business As Usual MCA FINANCE: Conservator B. N. Bahadur Seeks Additional Financing MRS. BURDEN'S: One Candy Maker Left in Fort Worth MUTUAL BENEFIT LIFE: Third Payout to Class 4 Claims OXFORD HEALTH PLANS: Company Offering New Notes For Old PHILIP SERVICES: Files Chapter 11 and Canadian Bankruptcy PITTSBURGH PENGUINS: Lemieux and SMG Agree on Civic Arena Lease ROOM PLUS INC: Applies To Hire Special Counsel SIRENA APPAREL: Files Chapter 11 STAFF BUILDERS: Spin-Off Transaction, Result: Tender Loving Care STARTER CORP: Ozer Group to Liquidate Retail Stores THORN APPLE VALLEY: Announces Sale to IBP TRANSTEXAS GAS: Update On Debtor-In-Possession: Staggering Debt WELLCARE MANAGEMENT: Voting Power Shift Meetings, Conferences and Seminars ********** AAMES FINANCIAL: Prepares For Annual Meeting - New Equity Partner ----------------------------------------------------------------- Loan broker company Aames Financial Corporation is preparing for its 1999 annual stockholders meeting. At a date yet to be announced shareholders will be asked to convene at the Hotel Inter-Continental, 251 S. Olive Street, Los Angeles, California 90012. The meeting was originally scheduled for December 18, 1998 and was later postponed by the company to allow for the completion of negotiations with the company's new equity partner, Capital Z Financial Services Fund II, L.P. On December 23, 1998, Aames Financial entered into a preferred stock purchase agreement with Capital Z in which Capital Z agreed to make an equity investment in Aames of up to $101.5 million. The initial phase of the Capital Z Investment occurred on February 10, 1999 when a partnership majority-owned by Capital Z, and other parties designated by Capital Z, purchased 76,500 shares of Series B Convertible Preferred Stock and Series C Convertible Preferred Stock for $1,000 per share, for an aggregate investment of $76.5 million. In connection with this investment, the company restructured its Board of Directors. The Board was increased to nine directors, five of whom were nominated by Capital Z in accord with the terms of the preferred stock purchase agreement. Subject to the approval of the amendments to the company's Certificate of Incorporation to be considered at the meeting, the second phase of the Capital Z Investment will include an offering to holders of the company's common stock of non-transferable rights to purchase up to $25 million of Series C Convertible Preferred Stock at $1.00 per share and a sale to Capital Z or its designees of up to $25 million of the Series C Convertible Preferred Stock not otherwise sold in the rights offering. Following the consummation of the rights offering, Aames Financial will have sold newly issued shares of its capital stock representing 76.7% of the total equity of the company for an aggregate of $101.75 million The Board of Directors of Aames Financial determined that the Capital Z Investment was in the best interests of the company and its unaffiliated stockholders. In reaching this conclusion, the Board took into account the rapidly worsening financial condition of the company, serious global liquidity concerns during late 1998, the lack of a viable option to sell the company as a going concern or attract other equity or debt capital, and the economic terms of the Capital Z Investment. In addition, the Board of Directors and its Strategic Planning Committee received an opinion from its financial advisor, Donaldson, Lufkin & Jenrette Securities Corporation that the Capital Z Investment was fair, from a financial point of view, to the company and its unaffiliated stockholders. At the annual meeting, stockholders will be asked to consider and vote upon several proposals related to the Capital Z Investment. They will be asked to consider proposals to amend the company's Certificate of Incorporation to increase the authorized amount of the company's common stock, increase the authorized amount of the company's preferred stock, and effect a 1,000-for-1 forward stock split of the preferred stock. These amendments are said to be necessary to complete a recapitalization of the company and are conditions for consummating the rights offering. Once the prospectus is finalized it will supersede and replace the materials that were sent out for the originally scheduled meeting. ALLIANCE ENTERTAINMENT: Court Approves Disclosure Statement ----------------------------------------------------------- The US Bankruptcy Court for the Southern District of New York entered an order on June 16, 1999 finding that the Disclosure statement of Concord Records, Inc. is approved and contains adequate information as required by the Bankruptcy Code. Concord is authorized to solicit acceptances of the plan. The Confirmation Hearing shall be held at the US Bankruptcy Court, Alexander Hamilton United states Custom House, One Bowling Green, New York, NY 10004-1408 in Room 623 on July 22,1999 at 10:00 AM. AMERICAN RICE: Monthly Figures Continues To Show Net Losses ----------------------------------------------------------- Having filed Chapter 11 bankruptcy proceeding on August 11, 1998 in the United States Bankruptcy Court for the Southern District of Texas, Corpus Christi Division, American Rice Inc. is reporting monthly financial information the SEC. Current figures for the month ended May 31, 1999 show revenues were $13,860,000 and net loss was $304,000. For comparison, the prior month ended April 30, 1999 had revenues of $18,738,000 and net loss of $455,000. BRAZOS SPORTSWEAR: Court Approves Asset Purchase Agreement ---------------------------------------------------------- The US Bankruptcy Court for the District of Delaware entered an order authorizing the sale of certain assets and inventory of the debtors' Plymouth Mills division to Modern Cotton, inc. for a purchase price of $13.63/dozen for the purchased inventory plus the amount of the T-USA Credit, plus a commission of 1.6% on all commissionable shipments. In addition, the buyer shall pay to Coview Capital, Inc. a commission of 3% on all commissionable shipments. CAJUN ELECTRIC: Bidders Have One Month to File Final Briefs ----------------------------------------------------------- Southwestern Electric Power Co. (SWEPCO) and Louisiana Generating have until July 30 to file post-trial briefs in the four-and-a- half-year-old bankruptcy case of Cajun Electric Power Cooperative, according to a newswire report. Cajun filed chapter 11 in December 1994. SWEPCO raised its offer last week for Cajun's non-nuclear assets to $990.5 million, and Louisiana Generating followed suit and increased its offer to $995 million. The two have been bidding against each other and Enron Corp. since 1996. Last fall, Enron dropped out of the running, saying the process was taking too long. The final session of the confirmation hearings began Friday in a bankruptcy court in Opelousa, LA. The judge did not indicate when he might rule on the case. CODON PHARMACEUTICALS: Seeks Extension of Exclusivity ----------------------------------------------------- The debtors, Codon Pharmaceuticals, Inc. and Oncor, Inc. seek an extension of the exclusive periods within which to file a Chapter 11 plan and to solicit acceptances thereof. The debtors seek a 60 day extension from June 26, 1999 through and including August 25, 1999 of the period during which the debtors will maintain the exclusive right to file a plan resolving this case, as well as a 60-day extension from August 25, 1999 through and including October 25, 1999 of the period during which the debtors will have the exclusive right to solicit acceptances to such a plan. A hearing on the motion will be held on July 22, 1999 at 9:00 AM before The Honorable Joseph J. Farnan, Jr., Chief Judge, US District Court for the District of Delaware, 844 N. King Street, Room 4209, Wilmington, Delaware. The debtors assert that given the complexity of these cases, more negotiating ins necessary and despite the cloud over these cases as a result of the Johns Hopkins and RCAT Partners litigation issues, the debtors are currently examining alternatives for their businesses. The complex litigation issues have detracted from the debtors' ability and efforts to focus on reorganizing their businesses and formulating a Chapter 11 plan. Oncor is currently in active negotiations with a potential purchaser of the JHU Licenses. Oncor has continued to investigate the possibility of attracting one or more equity investors in the debtors. One investor group has organized and retained counsel. Additionally, the debtors have continued to meet with the Creditors' Committee and other third parties to discuss financial and strategic reorganization options. By extending the debtors' exclusive periods, the debtors will have the opportunity to maintain the support of the various creditor constituencies and attempt to move towards the completion of these cases. DISCOVERY ZONE: Closes Stores and Announces Acquisition ------------------------------------------------------- CEC Entertainment, Inc. (NYSE: CEC) today announced that the U.S. Bankruptcy Court for the District of Delaware, has approved its acquisition of certain assets of Discovery Zone, Inc., a nationwide operator of children's indoor entertainment centers, for $19 million. Discovery Zone and certain affiliated entities filed for Chapter 11 bankruptcy protection on April 20, 1999. It is expected that the transaction will be finalized within 30 days subject to certain conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The assets to be acquired by CEC include 13 owned properties currently operating as Discovery Zone Fun Centers, two parcels of undeveloped real estate, the rights to 7 leased properties currently operating as Discovery Zone Fun Centers, and all furniture, fixtures, equipment and intellectual properties and trade names owned by Discovery Zone. Richard M. Frank, Chairman and Chief Executive Officer stated that "We plan to convert approximately 6 to 8 of the acquired locations to Chuck E. Cheese's restaurants and it is our intention to operate or sell the remaining properties at some point in the future. We are excited about the strategic value of this acquisition and the opportunity to open Chuck E. Cheese's restaurants at additional quality sites." The Company operates a system of 333 Chuck E. Cheese's restaurants in 44 states, of which 278 are owned and operated by the Company. DOW CORNING: Confirmation Hearings Begin ------------------------------------------ The final legal step in a settlement between the Dow Corning Co. and thousands of women with silicone breast implants begins Monday with a judge opening weeks of hearings on whether to approve a $4.5 billion bankruptcy plan. Both the company and lawyers for the women say the $3.2 billion settlement included within the bankruptcy plan is the best compromise that could be reached. But they face objections from the federal government, lending institutions and some women, all of whom claim the settlement plan leaves too little for other their claims and gives too much protection to the company and its corporate parents. The hearing before U.S. Bankruptcy Judge Arthur Spector is being held in a high school auditorium in Essexville, 100 miles northwest of Detroit, because it is the largest space near the bankruptcy court in Bay City that can handle the expected throng of lawyers and plaintiffs. "There's a group of us that's tried to make every single hearing in Michigan," said Peggy Pardo, a breast implant claimant who is driving seven hours to the hearing from Chicago. "It took us a long, long time to get to this point." Dow Corning was sued by some 170,000 women. Their proposed settlement is the cornerstone of the company's $4.5 billion bankruptcy reorganization plan, which plots how Dow Corning will pay off about 570,000 creditors -- including the women, banks that hold Dow Corning's debt, insurance companies, doctors and hospitals. The Midland-based company filed for bankruptcy in 1995 after thousands of women started suing, claiming breast implants of Dow Corning silicone caused a variety of diseases. Under the proposed settlement, women who blame illnesses on Dow Corning silicone implants could get $12,000 to $300,000 each. Women could also receive up to $25,000 for ruptured or leaking implants, and up to $5,000 for implant removal. Women outside the United States would be paid 40 percent to 65 percent less for their claims, depending on where they live. Dow Corning said that was due to lower medical costs and different economic conditions in other countries. The company would set aside up to $400 million to cover any costs of defending lawsuits by women who reject the settlement. Nearly 113,000 women voted on the settlement terms earlier this year, and 94 percent approved. One of them was Pardo, who had implants made with Dow Corning silicone. "I'm not going to say the settlement is perfect by a long shot, but I know there are many women desperately in need of help and they can't wait anymore," said Pardo, a support group leader for people with implant-related problems. Among those objecting to the settlement are 49 women in Nevada and the estate of another. Their lawyers contend a clause shielding parent company Dow Chemical from further lawsuits is unconstitutional. Another major objection comes from women in the countries where payments are reduced 65 percent. Lawyers representing them say the payments should be larger. Lenders that hold $1.3 billion in Dow Corning debt voted against their part of the bankruptcy plan even though it pays them in full, saying the interest rate set by the company was wrong. And the U.S. Department of Justice has objected, saying the plan doesn't provide enough to pay for health care the government has provided to people with silicone implants. A Dow Corning lawyer, Barbara Houser, says no objection raised so far should prevent the judge from approving the settlement with the women. And a lawyer for the committee representing breast implant claims said the plan was as good as it could be. "That's the reason we agreed to it. It wasn't because we liked it," said lawyer Ralph Knowles. FIRSTPLUS FINANCIAL: Committee Taps Boston Portfolio Advisors ------------------------------------------------------------- The Official Unsecured Creditors Committee of FirstPlus Financial, Inc. filed an application for an order authorizing the employment of Boston Portfolio Advisors, Inc. as residual and servicing valuation experts and consultants for the Committee. A hearing will be conducted on July 21, 1999 at 1:45 PM at the US Courthouse, 1100 Commerce Street, Dallas, Texas. The Committee currently consists of the following voting members: Turner-Broadcasting Inc. Elliott-Marino Motorsports CBS Television Fox Sports Network Sprint Paranet, Inc. Today's Temporary, Inc. Key Corp. Leasing Charter Financial, Inc. GRAHAM-FIELD HEALTH: One-Fourth Voting Power Rests With BIL ----------------------------------------------------------- Graham-Field Health Products Inc. recently issued 2,036 shares of its Series D preferred stock to BIL (Offshore) Ltd. in exchange for a promissory note held by BIL. The exchange was completed on May 12, 1999 in consideration for the cancellation of the 7.7% promissory note of Graham-Field due April 1, 2001 with a principal amount of $4,000,000, plus accrued and unpaid interest, and held by Offshore. In completing the transaction Graham-Field reported that BIL Securities (Offshore) Ltd. now holds, in addition to the 2,036 shares of Series D preferred stock, 2,094,497 shares of common stock, 2,573 shares of Series B convertible cumulative preferred stock and 1,000 shares of Series C convertible cumulative preferred stock in the company. When coupled with the dispositive and voting powers of BIL (Far East Holdings) Ltd., with its 2,293,856 shares of common stock and 3,527 shares of Series B convertible cumulative preferred stock, the two companies own approximately 24.5% of the voting power of Graham-Field capital stock (including Series B Cumulative Convertible Preferred and Series C Cumulative Convertible Preferred). BIL Offshore of New Zealand owns 100 of Graham-Field Series D preferred stock. BIL (Far East Holdings)operates out of Hong Kong. IMAGYN MEDICAL TECHNOLOGIES: Files Plan --------------------------------------- Imagyn Medical Technologies Inc. announced that it has filed its reorganization plan in the District of Delaware; the company filed chapter 11 in May, according to a newswire report. The plan contemplates that existing secured creditors will be paid in full over time from future revenues or from the proceeds of replacement financing that the company must obtain. Trade creditors who agreed to provide goods and services on normal terms will be paid cash in full, as will employees with priority claims for pre-petition wages and benefits. Other trade creditors and the holders of $110 million in 12.5 percent senior subordinated notes will receive new common stock representing 88 percent of the equity in the reorganized company. The plan is based on an agreement with Credit Suisse First Boston Management Corp., which holds a majority of the notes and certain secured claims. Imagyn expects the plan will be considered for approval in September. (ABI 28-June-99) LOEWEN: Reports Business As Usual --------------------------------- The Charlotte Observer, N.C. reports on June 26 that The Loewen Group Inc. of Vancouver, British Columbia -- the world's second largest funeral home chain -- announces that people who paid deposits to a Loewen company for future services, known as "pre- need," have nothing to fear because those funds go into state- regulated insurance policies or bank trusts, a Loewen spokeswoman said. Like many industries, the death-care business has seen massive consolidations by a few big chains in recent years. That's why one company's troubles can reverberate across the country. J. Wells Greeley, president of the N.C. Funeral Directors Association, said Loewen's problems cause concern for anyone dealing with a funeral. "They can't help but cast an eye on (how well) other corporate funeral homes and local, private funeral homes are doing," he said. Loewen sought bankruptcy protection in the United States and Canada to reorganize its debts, which hit $2.3 billion following many acquisitions and a $175 million settlement in a Mississippi lawsuit over unfair competition. First Union in Charlotte agreed to provide Loewen with a $200 million debtor-in-possession loan to cover daily operations. Debtor in possession loans help a company continue operating as it reorganizes. The loan is handled separately from the debts tied up in bankruptcy. The N.C. Board of Mortuary Science, which regulates the funeral industry, received about 20 calls from people concerned about the bankruptcy. S.C. officials said they did not receive any inquiries. Brenda Adrian, a Loewen's spokeswoman in Los Angeles, said clients should not notice anything unusual. "It's not an industry where you can mess with your customers," she added. Local Loewen homes said the company told them to refer media calls to corporate offices. But after word of the problems filtered out in Gastonia, six cemeteries and funeral homes bought full-page ads in area papers to reassure customers under the heading, "Honesty." "The truth is ... we are NOT out of business, NOR are we going out of business," the ad read. "The truth is ... we are `re- organizing,' not liquidating our business." Loewen owns or runs more than 1,100 funeral homes and more than 400 cemeteries. Some 13,000 people work for Loewen. As part of its restructuring, Loewen plans to refocus on funeral services, and will sell off firms that do not perform well. No sites have been marked for sale, Adrian said, and there will be no layoffs. Loewen did a good job of acquiring companies but a poor one of operating them, said Daniel Isard, an industry analyst who runs Foresight Analysts in Phoenix. He said Loewen's problems included: an increase in competition; poorly trained managers at its funeral homes and cemeteries; and an inability to effectively link its local operations. "What Loewen is going through is cataclysmic," Isard added. Stock that traded at $27.50 a year ago closed at 56 1/4 cents Friday. Loewen hopes to finish the reorganization in about a year, but Isard predicted it could take twice as long. MCA FINANCE: Conservator B. N. Bahadur Seeks Additional Financing ----------------------------------------------------------------- B. N. Bahadur, Conservator of MCA Financial Corp. (and its related entities) and CEO of BBK, Ltd. -- a leading turnaround and revitalization company -- filed a motion on Tuesday, June 22, 1999, seeking a total of $680,000 in additional funding and "use of cash collateral." Bahadur made the announcement today. The motion will be considered on Monday, June 28, 1999, by Judge Stephen W. Rhodes, U.S. Bankruptcy Court, Eastern Division of Michigan. If granted, the funding will allow Bahadur to continue the process of seeking to resolve MCA's bankruptcy situation through approximately July 31, 1999. Additionally, negotiations continue to determine the future of the 3,400 homes owned or controlled by the MCA/RIMCO debtors. "There's a significant amount of work yet to be done," Bahadur said. "And, BBK has the right people in place to make the smoothest transition that is in everyone's best interest." On January 28, 1999, Bahadur was named Conservator of MCA by Patrick McQueen, Financial Institutions Bureau Commissioner for the State of Michigan. The order allows the Conservator to do "all things necessary" in the best interests of the general public to oversee and manage the assets of approximately 11,000 mortgages and land contracts valued at $536 million. MRS. BURDEN'S: One Candy Maker Left in Fort Worth ------------------------------------------------- The Fort Worth Star-Telegram, Texas reports on June 25, 1999 that Peggie Muir, an independent candy maker for about 20 months, has shut down her Mrs. Burden's Gourmet Candy Co. factory and retail shop at 541 N. Main St. "I loved it. I loved the candies and the little place we made. We had no problems at costing," Muir said yesterday. "I just simply can't sell. I'm best at numbers." Muir, who has a master's degree in accounting, attributed Mrs. Burden's failure and unpaid debt on stagnant $900,000 to $1 million annual sales and high promotion costs. She blamed herself and two sales directors for failing to drive the small company into the higher sales end of the market: the high-end, mainstream department stores and some other retailers in the big markets. Muir said she halted production by early May and soon joined one of Mrs. Burden's bigger competitors, Fort Worth-based DFG Confectionery and its Sweet Shop and other divisions, as chief financial officer. Mrs. Burden's closing leaves Fort Worth with one major candy maker, DFG. In January there were three. Included was Pangburn Candy Co., which went bankrupt. Mrs. Burden's and DFG, with its $16 million in annual sales, competed with some similar premium and gourmet chocolates, sugar- free and other high-end candies. Last year DFG bought Fort Worth- based Sweet Shop and later moved its own headquarters from Chicago to Fort Worth. Muir labeled Sweet Shop/DFG as a tough competitor for sales to department stores, candy and gift shops, boutiques and gourmet food retailers. Muir said all but three of nine Mrs. Burden's last remaining workers took jobs at DFG, which has about 300 workers. Her staff peaked at 28, she said. Mrs. Burden's failure came as a surprise in light of Muir's comments in early March that she had nearly concocted a pool of investors to make a $5 million bid for Pangburn. Muir, a former Pangburn executive vice president for finance and operations, said yesterday she had hoped to stay in business by working a deal for Pangburn. "I could find investors for a big deal for a big company like Pangburn, but the investors were not there for a small, struggling company in small markets," she said. Muir said she lost the financial backers for the Pangburn deal when the owners of Pangburn's production plant refused to lower their factory rent. Russell Stover Candies bought Pangburn's brand name, trademarks and inventory in bankruptcy liquidation. Muir initially aimed her company at the smaller side of the premium candy market. She licensed sales in exclusive territories covering towns and smaller cities across most of the nation. "That was too expensive to keep going," Muir said. "We were advertising over the United States, 16 ads at $16,000 a month. In many markets." As those costly efforts didn't pump sales or earn enough profit, she shifted Mrs. Burden's aim. Then Muir said she and the sales directors failed to generate enough cash flow to finance the requisite high-cost promotions to win the big accounts with Bloomingdale's and other high-volume customers. DFG President Philip Gay said yesterday that DFG is buying a large portion of Mrs. Burden's equipment. He praised Muir's accounting and candy-making skills, and added, "We've got a great person." Muir got financing in 1997 to buy Dallas-based Mrs. Burden's, move its Kansas factory to Fort Worth and start operations here in September of that year. At start-up, Muir said sales ran at about 150,000 pounds of chocolates a year going to more than 800 stores from California to Ohio. MUTUAL BENEFIT LIFE: Third Payout to Class 4 Claims --------------------------------------------------- The Board of Directors of MBL Life Assurance Corporation today authorized the third payout to holders of allowed class four claims in the rehabilitation of The Mutual Benefit Life Insurance Company. The third payment will total $48.1 million. Checks representing each class four creditor's pro rata share of this payment, based upon an estimated total face amount of allowed class four claims of $600 million, will be mailed on June 30, 1999, via first class mail to class four creditors of record as of the end of the business day on June 16, 1999. The company has released a portion of its reserve for unresolved class four claims, resulting in a reduction in the aggregate claim pool from $605 million to $600 million. This release will result in a dividend of 0.7 percent, which will be included with the June 30, 1999 payment. This dividend totals $4.1 million. MBL Life made an initial distribution of $250 million to class four creditors on January 15, 1999, based on a record date of December 21, 1998, and a second distribution of $252.4 million on April 1, 1999, based on a record date of March 1, 1999. The class four creditors are entitled to 70 percent of Company Value, meaning the value produced by the sale of MBL Life's businesses, combined with its capital account net of projected expenses and contingencies. The total class four creditor value share is approximately $573 million, which is 95.5 percent of the total face amount of allowed class four claims. MBL Life will consider making an additional class four creditor value share distribution in the coming months, also based on a June 16, 1999 record date. The company's ability to distribute the entire balance of the class four creditors' value share, and the timing of any such distribution, are contingent on the timing of the sale of certain non-liquid assets and other factors bearing on the company's financial position and liquidity. Class four creditors are also entitled to 100 percent of any residual value that may result from MBL Life's liquidation. Any distributions of such residual value would be made in later months and years, depending upon available cash and other considerations. OXFORD HEALTH PLANS: Company Offering New Notes For Old ------------------------------------------------------- Oxford Health Plans, Inc. was incorporated under the laws of the State of Delaware on September 17, 1984. It is a health care company currently providing health care benefit plans primarily in New York, New Jersey and Connecticut. Its products are offered primarily through its health maintenance organization subsidiaries, Oxford Health Plans (NY), Inc., Oxford Health Plans (NJ), Inc., and Oxford Health Plans (CT), Inc. and through Oxford Health Insurance, Inc., its health insurance subsidiary. The company is offering to exchange $1,000 principal amount of its 11% senior notes due 2005, for each $1,000 principal amount of its outstanding 11% senior notes due 2005 which were issued on May 13, 1998 in a private offering. The company will exchange all notes validly tendered and not validly withdrawn. As of the date of a prospectus being issued by Oxford, there is $200 million aggregate principal amount of old notes outstanding. The exchange of the old notes for the new will be free of the transfer restrictions that apply to the old notes. The company agreed with the initial purchasers of the old notes to make this offer and to register the issuance of the new notes following the initial sale. The new notes will not trade on any established exchange. The new notes have the same financial terms and covenants as the old notes, and are subject to the same business and financial risks. For more information on the transaction access http://www.sec.gov/cgi-bin/srch-edgar?0000950123-99-005768on the Internet, free of charge. PHILIP SERVICES: Files Chapter 11 and Canadian Bankruptcy --------------------------------------------------------- Philip Services Corp. announced that it has filed a voluntary application to reorganize under Canada's Companies' Creditors Arrangement Act (CCAA) in Toronto and chapter 11 petitions in the District of Delaware, according to a newswire report. The company also announced an amended lock-up agreement with its syndicated lenders. Philip Services, an integrated metals recovery and industrial services company with operations in North America and Europe, has initiated the bankruptcy proceedings in order to implement its restructuring and continue its normal business operations. The lock-up agreement will convert about US$1 billion in existing syndicated debt to US$250 million of senior secured debt, US$100 million in secured convertible payment-in-kind debt and 91 percent of the common shares of the restructured company. (ABI 28-June-99) PITTSBURGH PENGUINS: Lemieux and SMG Agree on Civic Arena Lease --------------------------------------------------------------- A day after Bankruptcy Judge Bernard Markovitz approved Mario Lemieux's reorganization plan for the Pittsburgh Penguins, Lemieux and his group of investors reached an agreement with SMG, the Civic Arena landlord, on a new lease, The Pittsburgh Post- Gazette reported. SMG will make a $5 million investment in the team and have a seat on its board of directors, and it agreed to lease concessions that will reduce the team's yearly payments to $1.8 million, down from the $6-7 million it had been paying. The lease takes the team through 2004, when SMG will enter into a management contract that runs through 2012. Those terms are still under negotiation. The Civic Arena lease was the last major hurdle in Lemieux's reorganization plan. (ABI 28-June-99) ROOM PLUS INC: Applies To Hire Special Counsel ---------------------------------------------- The debtor, Room Plus Inc. seeks court approval of the hiring of Wilentz, Goldman & Spitzer as special counsel to perform corporate and securities legal services on behalf of the debtor. The firm has agreed to charge its customary hourly rates which range from $350 per hour for shareholders to $60 per hour for paraprofessionals. SIRENA APPAREL: Files Chapter 11 -------------------------------- The Sirena Apparel Group, which makes branded and private-label swimwear, intimate apparel and resortwear, has filed for chapter 11 protection in the Central District of California and named a new interim CEO and chairman, according to Reuters. Foothill Capital Corp. has preliminarily agreed to provide Sirena with debtor-in-possession financing. Sirena decided to file for bankruptcy protection after management determined that it may not be able to secure sufficient financing for the rest of the calendar year because of accounting irregularities. The former chairman was ousted June 8 after accounting irregularities were discovered, which prompted Sirena to restate its earnings for the first three quarters of the fiscal year ending June 30, 1999. (ABI 28-June-99) STAFF BUILDERS: Spin-Off Transaction, Result: Tender Loving Care ----------------------------------------------------------------- Staff Builders, Inc. is a Delaware corporation which was incorporated in New York in 1978 and reincorporated in Delaware in May 1983. The company is a leading national provider of home health care and supplemental staffing services. On March 22, 1999, the company's Board of Directors approved a plan to separate its home health care business from its supplemental staffing business and to create a separate, publicly-traded company engaged exclusively in providing home health care services. To accomplish this separation of its businesses, the company's Board of Directors established a new, wholly-owned subsidiary, Tender Loving Care Health Care Services, Inc., which will acquire 100% of the outstanding capital stock of the Staff Builders subsidiaries. Staff Builders' supplemental staffing business will remain with Staff Builders. The completion of the spin-off is subject to the satisfaction of certain conditions, including obtaining certain regulatory approvals and bank financing for each of Staff Builders and TLC. Staff Builders has 125 home health care locations in 26 states and the District of Columbia, and has master franchise licenses in Japan, Spain and Brazil. It owns and operates 71 of its offices and 54 of these offices are operated by 31 licensees. The company's corporate headquarters consists of approximately 65,000 square feet of leased office space and 8,100 square feet of storage space in Lake Success, New York. The company's supplemental staffing business leases its administrative facilities in Atlanta, Georgia and New York City, New York. In the fiscal year ended February 28, 1999 Staff Builders revenues were $437.6 million with net losses of $73.0 million. In fiscal 1998 revenues were $526.7 million and losses stood at $21.6 million. STARTER CORP: Ozer Group to Liquidate Retail Stores --------------------------------------------------- The Ozer Group, Needham, Mass., announced Friday that the bankruptcy court has awarded it the right to liquidate Starter Corp.'s 18 outlet retail stores; going-out-of-business sales began on Saturday, according to a newswire report. Starter, founded in 1971, has been the premiere authentic apparel licensee of the National Football League, National Basketball Association and the National Hockey League, in addition to major league baseball and more than 150 colleges and universities. The New Haven, Conn.-based company filed chapter 11 this past April, listing $118.1 million in assets and $120.5 in liabilities. Stores are being liquidated in Alabama, Connecticut, Georgia, Iowa, Michigan, Missouri, New Jersey, New York, Ohio, Tennessee and Wisconsin. (ABI 28-June-99) THORN APPLE VALLEY: Announces Sale to IBP ----------------------------------------- IBP, the largest fresh meat processor in the world, will buy Thorn Apple Valley Inc. for about $112 million, according to Reuters. Thorn Apple Valley, which filed chapter 11 in March, said the proceeds of the sale will not be sufficient to provide any distribution to shareholders. Thorn Apple Valley in April said the U.S. Department of Agriculture's condemnation of 30 million pounds of hot dogs produced at the company's Arkansas plant caused "enormous damage" to its reputation. IBP plans to continue to operate the Southfield, Michigan-based company with current Thorn Apple Valley plant management and personnel. The sale is subject to the bankruptcy court's approval. (ABI 28-June-99) TRANSTEXAS GAS: Update On Debtor-In-Possession: Staggering Debt --------------------------------------------------------------- On April 19, 1999, TransTexas filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. On April 20, 1999, TEC and TARC also filed voluntary petitions under Chapter 11. The bankruptcy cases are being jointly administered. On May 20, 1999, the cases were transferred to the Southern District of Texas, Corpus Christi Division. TransTexas, TEC and TARC are operating their businesses and managing their properties as debtors-in-possession. TransTexas' Chapter 11 filing does not include its subsidiaries, including Galveston Bay Processing Corporation which had assets of approximately $12.5 million at April 30, 1999. Under terms of a credit agreement dated April 27, 1999 among TransTexas, as borrower, various financial institutions, as lenders, Credit Suisse First Boston Management Corporation, as Administrative Agent, and TEC and TARC, as Guarantors, the lenders have agreed to provide up to $20 million in post-petition financing to the company (with an additional $10 million potentially available). On April 28, 1999, $6 million was disbursed to TransTexas under the credit agreement pursuant to an interim order of the Bankruptcy Court. Additional advances may be made subject to a final order dated June 16, 1999. Advances under the credit agreement bear interest at the rate of 13% per annum. TransTexas' obligations are guaranteed by TEC and TARC and are secured by a first priority senior priming lien (subject to certain exceptions) on all property of TransTexas, TEC and TARC. Amounts outstanding under the debtor-in-possession facility will mature on the earlier of October 20, 1999 or the effective date of a plan of reorganization. As a result of the Chapter 11 filings, absent approval from the Bankruptcy Court, TransTexas is prohibited from paying, and creditors are prohibited from attempting to collect, claims or debts arising prior to the bankruptcy. A significant amount of the company's liabilities, including secured debt, are subject to compromise. As of April 30, 1999, liabilities subject to compromise included the following: Long-term debt, $125,250,000; Notes payable to affiliates, $457,928,000; Accounts Payable, $66,524,000; Accrued interest payable, $23,335,000; Accrued liabilities, $47,245,000; and Other Liabilities, $13,440,000. In reporting its first quarter, ended April 30, 1999, revenues and net loss as debtor-in-possession TransTexas showed $19,065,000 revenues, $34,408,000 net loss. Compared to the same quarter in 1998 revenues were $33,467,000 and net loss $6,803,000. WELLCARE MANAGEMENT: Voting Power Shift --------------------------------------- On behalf of the 1818 Fund II, L.P., Brown Brothers Harriman & Co., T. Michael Long and Lawrence C. Tucker, Wellcare Management Group announces beneficial ownership of an aggregate 11,250,000 shares of Wellcare's common stock by the Fund. Giving effect to the automatic conversion of the Fund owned Series B preferred stock, the Fund beneficially now owns the 11,250,000 shares of common stock mentioned, which represents approximately 67.6% of the outstanding shares of common stock of Wellcare. This percentage is based upon the number of shares of common stock outstanding as of May 28, 1999 as reported by the company, which was 6,635,999 plus the total number of shares of common stock into which the Series B Preferred Stock are convertible. If the percentage were also based on the number of shares of common stock issuable upon conversion of the shares of senior convertible preferred stock, Series A, owned by Kiran C. Patel, which is 9,288,200 shares of common stock (subject to certain adjustments), the percentage owned by the Fund would be 43.4%. The Fund is a party to a letter agreement, dated June 11, 1999, pursuant to which Kiran C. Patel promises to vote all shares of senior convertible preferred stock, Series A, and all shares of common stock held of record or beneficially owned by him in favor of the amendment to Wellcare's certificate of incorporation to increase the number of authorized shares of the common stock by 55,000,000 shares. The Fund disclaims any membership in a group with Kiran C. Patel or any other person. Meetings, Conferences and Seminars ---------------------------------- 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. ********** The Meetings, Conferences and Seminars column appears in the TCR each Tuesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Bond pricing, appearing in each Friday edition of the TCR, is provided by DLS Capital Partners, Dallas, Texas. S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter, co- published by Bankruptcy Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc., Washington, DC. Debra Brennan, Yvonne L. Metzler and Lexy Mueller, Editors. Copyright 1999. All rights reserved. ISSN 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. 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