/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/990719.MBX T R O U B L E D C O M P A N Y R E P O R T E R Monday, July 19, 1999, Vol. 3, No. 136 Headlines ADVANTICA RESTAURANT: Registers Stock For Selling Shareholder ASC EAST INC: Agreement Signed To Invest $150 Million In Company CHASTAIN CAPITAL: Capital Group Report No Beneficial Ownership CONXUS COMMUNICATIONS: Court Authorizes Bear, Stearns CRESCENT PUBLIC: Seeks Additional Time To File Schedules DISCOVERY ZONE: Seeks Authority To Retain Belfint Lyons & Shuman FEDCO: Total Liquidation Will Offer Tremendous Discounts GOLDEN BOOKS: Note Exchange Pending Confirmation Of Plan IMAGYN MEDICAL: Seeks Order To Amend Headquarters Lease IRIDIUM: Delays Payment of $90 Million IRIDIUM: Motorola Hopes For Restructure IWG SERVICES: Texas Investors File Involuntary Petition LAMONTS APPAREL: Troutman Has Potential 59.07% Ownership LIVENT: Seeks Authorization to Settle Certain Claims LOEHMANNS INC. Seligman & Co. No Longer Beneficial Owners LOEHMANN'S INC: Seeks Implementation of Management Retention Plan LOEHMANN'S INC: Seeks Approval of Bidding Procedures MONTGOMERY WARD: Confirmation Hearing Held July 15, 1999 MONTGOMERY WARD: Statement of Income For Fiscal Month NATIONSWAY: Creditor Panel Seeks Stay To Appeal Cash Use Order NEWSTAR RESOURCES: Announces TSE Suspension PAYLESS CASHWAYS: Better Pricing Causes Net Increase PITTSBURGH PENGUINS: Lemieux Bid Goes into Overtime PLUMA INC: Order Authorizes Post-Petition Financing QUALITECH: Objection to Credit Bid By Secured Senior Lenders TELEPAD CORP: Seeks Order Granting Extension of Exclusivity THE COSMETIC CENTER: Seeks Order Approving Bidding Procedures WELCOME HOME: Issues 500,000 Shares of New Common Stock WORLDCORP INC: Seeks Approval of Settlement ZENITH ELECTRONICS: Prepackaged Plan Would Cancel Stock ********** ADVANTICA RESTAURANT: Registers Stock For Selling Shareholder ------------------------------------------------------------- Advantica Restaurant Group Inc. has recently registered stock and identified a selling security holder in a Prospectus. The selling shareholder may offer and sell all of the shares of common stock of Advantica Restaurant Group, Inc. from time to time. The company previously issued shares under a Chapter 11 joint plan of reorganization of the company's predecessors, Flagstar Companies, Inc. and Flagstar Corporation. That plan of reorganization and the issuance of the shares dealt with in the Prospectus became effective on January 7, 1998. The company says it will not receive any proceeds from the sale of these shares and does not know when the proposed sale of the shares by the selling security holder will occur. ASC EAST INC: Agreement Signed To Invest $150 Million In Company ---------------------------------------------------------------- On July 12, 1999, American Skiing Company announced that Oak Hill Capital Partners, L.P., a private equity investment group, has signed a definitive agreement to purchase $150 million of convertible preferred stock in American Skiing Company. Proceeds from the transaction will be used to reduce indebtedness and provide ASC significant capital to continue pursuing its growth plans, including the development of its resort villages. "This investment stabilizes our capital structure and provides the company with substantial liquidity," said Leslie B. Otten, Chairman and Chief Executive Officer of American Skiing Company. "The company can now take advantage of the substantial growth opportunities created over the last several years by capitalizing on our strong resort brands and our ownership of prime development properties at these resorts. We could not have asked for a better or more capable partner than Oak Hill and we believe this strategy with an enhanced capital base will deliver significant value to our shareholders." Following the close of the transaction, Oak Hill Capital's investment will represent a 48.5% stake in the company on a fully diluted basis, becoming American Skiing Company's largest single shareholder. American Skiing Company's senior management will control 26.7% in the restructured entity. Steven B. Gruber, Managing Partner of Oak Hill Capital Partners said, "We see very exciting opportunities for American Skiing Company, given its exceptional resort assets, its strong management team and its high quality development properties. We hope that the coupling of these fundamental strengths with our strategic guidance and financial resources will enhance American Skiing's leadership position within the industry and its financial profile within the investment community." The transaction, which is subject to regulatory approvals and consents from the company's senior lenders, subordinated bond holders and preferred equity holders, is expected to close before the end of August. Headquartered in Newry, Maine, American Skiing Company is the largest operator of alpine ski, snowboard and golf resorts in the United States. Its resorts include Steamboat in Colorado; Killington, Mount Snow and Sugarbush in Vermont; Sunday River and Sugarloaf/USA in Maine; Attitash Bear Peak in New Hampshire; The Canyons in Utah; and Heavenly in California/Nevada. Oak Hill Capital Partners, L.P. is a $1.6 billion private equity partnership founded by Robert M. Bass and his team of investment professionals. Oak Hill Capital makes significant investments through acquisitions, build-ups, recapitalizations, restructurings, strategic joint ventures and the purchase of minority stakes across a wide range of industries. Oak Hill Capital Management, Inc., based in New York, and Menlo Park, California, manages the partnership. CHASTAIN CAPITAL: Capital Group Report No Beneficial Ownership --------------------------------------------------------------- Capital Group International, Inc. of California reports no further beneficial ownership in Chastain Capital having divested themselves of any common stock in the company. CONXUS COMMUNICATIONS: Court Authorizes Bear, Stearns ----------------------------------------------------- The US Bankruptcy Court for the District of Delaware entered an order on the motion of the debtors, Conxus Communications, Inc. seeking approval of retention and employment by the debtors of the investment banking firm of Bear, Stearns, & Co., Inc. CRESCENT PUBLIC: Seeks Additional Time To File Schedules -------------------------------------------------------- Crescent Public Communications, Inc. d/b/a Coastal Payphones Inc. seeks an order extending the time to file its schedules and statements through and including September 13, 1999. Crescent's management has been consumed with its effort to sell the debtor's assets, including the establishment of a data room. Management has also expended considerable time to defend against the motion to appoint a trustee, and the accounting department has been required to meet with bank auditors which audit was required under the Crescent order authorizing Crescent's use of cash collateral. DISCOVERY ZONE: Seeks Authority To Retain Belfint Lyons & Shuman ---------------------------------------------------------------- The debtors, Discovery Zone, Inc. and its affiliates, seek court authority to employ and retain Belfint Lyons & Shuman PA as special benefits accountants for the debtors. The firm will specifically be responsible to audit and otherwise windup the debtors' 401(k) retirement plan, and file necessary reports and tax returns. An audit of the financial statements is required together with a public accountant's report. Total fees for the firm will be capped at $10,000. FEDCO: Total Liquidation Will Offer Tremendous Discounts -------------------------------------------------------- The 10 FedCo stores, which have historically only been open to members, will immediately be opened by the consortium to the general public, allowing everyone to take advantage of the incredible savings at these stores. FedCo is most noted for its every day low prices and wide selection of merchandise, including electronics, jewelry, housewares, health and beauty aids, grocery items and furniture. A group of four companies led by Los Angeles based Hilco/Great American Group and including, The Schottenstein/Bernstein Group, the Nassi Group and the Ozer Group were awarded the right in federal bankruptcy court to manage the closing of the FedCo Stores. Under the terms of the bid submitted by the consortium, FedCo will be paid $ 55 million for its inventory. "This will be a rare opportunity for California consumers both members and non-members to obtain tremendous bargains at the stores. The stores will be closing within a short period of time," stated Andy Gumaer, Executive Vice President of Hilco/Great American Group. GOLDEN BOOKS: Note Exchange Pending Confirmation Of Plan -------------------------------------------------------- Golden Books Publishing Company, Inc., a Delaware corporation, proposes to issue, as part of the amended joint plan of reorganization of Golden Books Family Entertainment, Inc., Golden Books Home Video, Inc. and the company, dated May 13,1999, its senior secured notes due 2004. Pursuant to the plan of reorganization, old senior notes will be exchanged for the senior notes and common stock of the company. The company has filed with the United States Bankruptcy Court for the Southern District of New York an amended disclosure statement to be distributed to holders of claims against or stock interests in the company for the purpose of soliciting their votes for the acceptance or rejection of the plan of reorganization. The cases have been administratively consolidated into a single reorganization proceeding. At a hearing held on May 13, 1999, the Bankruptcy Court approved the disclosure statement. A hearing is presently scheduled with the Bankruptcy Court to confirm the plan of reorganization. The senior notes are to be issued under an indenture between the company, the guarantors named therein and HSBC Bank USA. IMAGYN MEDICAL: Seeks Order To Amend Headquarters Lease ------------------------------------------------------- The debtors, Imagyn Medical Technologies, Inc., et al. seek entry of an order authorizing Imagyn to enter into an amendment of the lease with The Irvine Company, Landlord, to facilitate the relocation of the debtors' corporate headquarters from 5 Civic Plaza, Suite 100 & 350, Newport Beach, California to 1 Park Plaza, Suite 1100, Irvine, California. The new premises is roughly equivalent in size, but may be utilized in a more efficient manner. This will allow the debtors to consolidate certain functions, and reduce the need for additional space in the future. There will be no significant increase in the cost of the leases. The base rent on the new premises will be equivalent to that currently for the old premises for the initial term of the headquarters lease and thereafter the rent will remain below current fair market rental rate. The debtors have preserved a portion of the below market rates remaining under the Headquarter Lease for two years. The amended lease will add three years on to the term of the current lease. IRIDIUM: Delays Payment of $90 Million -------------------------------------- Iridium LLC said last night that it will invoke the 30-day grace period allowed for payment of the 90 mln usd in interest due yesterday on its 1.45 bln usd outstanding senior notes, Business Wire reported in Washington. The grace period, which is allowed under the terms of the notes, gives Iridium additional time to continue discussions with its creditors and investors concerning the restructuring of its indebtedness. "It takes time to reach consensus among the players in any restructuring effort," said John Richardson, CEO of Iridium LLC. "The grace period allowed under the terms of the senior notes, along with the extension on our bank facility, gives us time to concentrate on reaching a suitable arrangement for the ongoing commercial operation of this company." Iridium is a worldwide satellite telephone and paging joint venture, in which Motorola Inc, the largest shareholder, holds a stake of about 20 pct. Meanwhile, the Wall Street Journal reported that at least one Iridium investor, Lockheed Martin Corp, said it does not plan to contribute additional funds to Iridium. Several other Iridium shareholders declined to comment on the service's troubles or their willingness to contribute additional funds, the Journal said. "The development in the marketplace has not been what we anticipated," said a spokeswoman for Veba AG, part owner of an Iridium partner that owns 8.8% of the company. "But before we decide anything, we want to see first what the new management can do, whether it can give Iridium another boost." IRIDIUM: Motorola Hopes For Restructure --------------------------------------- Chicago-based Motorola said yesterday it hopes Iridium, a global satellite telephone company, will restructure and avoid liquidation, according to Reuters. Via a conference call among analysts, reporters and Motorola, Motorola said Iridium has three options: filing chapter 11, liquidation or out- of-court restructuring. "It is Motorola's hope that this [liquidation] scenario can be avoided," Robert Growney, president and CEO of Motorola said. Iridium's problems with getting new subscribers have been attributed to their plans, which have been seen as pricey. Analysts have stated that a third quarter sales projection of $7.8 billion and $0.51 a share are "within reach," and full-year sales of $31.6 billion and $2.00 a share are "also reachable."(ABI 16-July-99) IWG SERVICES: Texas Investors File Involuntary Petition ------------------------------------------------------- A group of investors filed a petition on Tuesday with the U.S. Bankruptcy Court for the Western District of Texas in San Antonio to force two investment companies into bankruptcy, according to The Wall Street Journal. IWG Services Ltd., London, and I.G. Services, Cayman Islands, are both liquidating, and the American, Mexican and Latin American investors are questioning the whereabouts of the $475 million they invested through San Antonio-based InverWorld Inc., which provided administrative and client support to IWG. PricewaterhouseCoopers LLP asked the bankruptcy court in San Antonio, in a separate action, to stay all legal proceedings against IWG and I.G. until their respective foreign liquidation proceedings have gone forward. IWG director Mark Novak said that the investment breakdown is roughly $250 million in short-term notes and $225 million in equities and bonds, and stated that InverWorld had told clients in June that investors would not be able to withdraw funds due to trading losses. "We're in the early stage of this matter," said Dallas PricewaterhouseCoopers partner J. Robert Medlin. LAMONTS APPAREL: Troutman Has Potential 59.07% Ownership -------------------------------------------------------- Dallas C. Troutman is the President of Troutman Investment Company whose principal business is the operation of retail stores selling fashion apparel and home and fashion accessories. He owns the following securities of Lamonts Apparel: (i) 2,925,140 shares of Class A common stock, which constitute 32.50% of the outstanding shares; (ii) Class A Warrants to purchase 1,810,380 shares of Class A common stock, which constitute 82.17% of the outstanding Class A Warrants; and (iii) Class B Warrants to purchase 581,181 shares of Class A common stock, which constitute 72.63% of the outstanding Class B Warrants. If all the Class A Warrants and Class B Warrants were exercised, Mr. Troutman would own a total of 5,316,701 shares of Class A common stock, or 59.07% of the outstanding shares. Mr. Troutman does not expect the warrants to be exercised within the next 60 days, however, he does have sole voting and dispositive power with respect to all 2,925,140 shares of Class A Common Stock, 1,810,380 Class A Warrants and 581,181 Class B Warrants. He acquired the shares and warrants on March 10, 1999, with the price per share for the Class A Common Stock $0.6214 and the price per warrant for the Class A Warrants and Class B warrants $0.01. The acquisition was effected under a sale agreement between Mr. Troutman and Troutman Investment Company. Mr. Troutman acquired the shares and warrants from Troutman Investment Company, of which he is the majority owner, on March 10, 1999 for estate planning purposes. Initially Troutman Investment Company acquired the shares with the intent of entering into discussions with Lamonts Apparel regarding a possible merger of the two companies, however, Lamonts has terminated potential merger discussions. LIVENT: Seeks Authorization to Settle Certain Claims ---------------------------------------------------- Livent (U.S.) Inc., et al., debtors, seek approval of a settlement agreement between and among the debtors, W.E. O'Neil Construction Company (O'Neil) and Extra Clean, Inc. O'Neil was the general contractor for the Restoration of the Oriental Theatre in Chicago, which Livent Realty (Chicago) Inc. acquired in 1997. The theater reopened in 1998 and currently houses the debtors' production of the musical Ragtime. As of the petition date, O'Neil claimed to be owed approximately $8.6 million. In accordance with an Adequate Protection Order O'Neil received payments in excess of $5.1 million, and the debtors and O'Neil have agreed to cap the Lien at $4 million plus interest and fees. The debtors have undertaken extensive efforts to reconcile the claims of O'Neil and the parties have agreed to a Stipulation wherein the debtors have agreed to pay O'Neil approximately $2.676 million in full satisfaction of its claims and liens. The debtor now seeks court approval of the stipulation between the debtor and O'Neil. LOEHMANNS INC. Seligman & Co. No Longer Beneficial Owners --------------------------------------------------------- No further common stock in Loehmanns Inc. is owned by J. & W. Seligman & Co. Incorporated, as investment adviser for Seligman Value Fund Series, Inc., Seligman Small-Cap Value Fund. .William C. Morris, as the owner of a majority of the outstanding voting securities of J. & W. Seligman & Co. Incorporated, can also, therefore, be considered as no longer a beneficial owner of any common stock shares of Loehmanns LOEHMANN'S INC: Seeks Implementation of Management Retention Plan ----------------------------------------------------------------- The debtor, Loehmann's Inc., seeks a court order authorizing the debtor to implement a management retention and severance plan comprised of a bonus program for key management employees, a bonus program for other key personnel and a serverance program. Key employee bonuses would total $1,485,000. Vice president emergence bonuses total $275,000. The proposed severance program could represent a maximum cost of $3,942,500. If the same employees were to be terminated now, such employees would have claims against the debtor under the debtor's existing severance policy of approximately $2.2 million. A hearing to consider the motion will be held on July 21, 1999 at 10:30 AM. LOEHMANN'S INC: Seeks Approval of Bidding Procedures ------------------------------------------------------ The debtor, Loehmann's Inc. has targeted 14 stores to be closed based on store level operating profitability, market demographics and regional strategy. The debtor seeks approval of the bidding procedures and GOB sales, as the stores are currently stocked with seasonal merchandise which can be sold now at optimal prices. The debtor has selected the Hilco/Great American Group to conduct the GOB sales and to act as a "stalking horse" for soliciting competitive bids from other professional liquidators. The cornerstone of the Offer Letter is the guaranteed payment for the merchandise , which will equal 25.1% of the aggregate retail price of the merchandise. The Offer Letter and forthcoming agreement are subject to the consideration by the debtor of higher or better offers. Competing bidders must submit an opening bid providing for an increase in the Guaranteed Payment by at least .5%, and all bids at the auction must be in increments of at least .3% over any previous bid. In the event a competing liquidator outbids the Agent, the debtor, subject to the court's approval will pay the agent from the proceeds received from the successful bidder, a termination fee of $50,000. MONTGOMERY WARD: Confirmation Hearing Held July 15, 1999 -------------------------------------------------------- David Kurtz, Esq., representing the Debtors, reported that creditors voted overwhelmingly to accept the Proponents' Joint Plan of Reorganization for the rehabilitation and restructuring of Montgomery Ward. Class 3 Creditors holding General Unsecured Claims turned out in record numbers to cast their ballots in favor of the Plan: Creditor Class Number Accepting Dollars Accepting -------------- ---------------- ----------------- Wards Class 3 95.60% 96.45% Lechmere Class 3 93.79% 88.22% The Debtors received a total of 41 objections to the Plan. 33 objections were resolved by stipulation among the Proponents and the objectors. 6 filings were not really objections to confirmation of the Joint Plan but objections to the amount or treatment of individual claims; they have been resolved. That, Mr. Kurtz related, leaves the Court with two objections to consider: one interposed by American International Group and another interposed by Maples Investment Club. Both objections having been overruled, the Joint Plan is free of objection- related impediments to confirmation. The Joint Plan, Mr. Kurtz articulated and Judge Walsh found, after disposing of all objections to the Joint Plan, complies with the 13 standards set forth in the Bankruptcy Code, at 11 U.S.C. Sec. 1129(a). Disclosing who will govern the Debtors after the Effective Date, as required by 11 U.S.C. Sec. 1129(a)(5), Mr. Kurtz advised that the New Retailer will be governed by a 7-member Board of Directors. Five GECC directors will join Roger Goddu and Thomas Paup to serve as directors for the New Retailer. Montgomery Ward's current officers will manage the New Retailer. The Joint Plan, Mr. Kurtz explained, complies with the so-called best interests of creditors test set forth in 11 U.S.C. Sec. 1129(a)(7), because the Joint Plan proposes a distribution greater than would be available in the event of a liquidation. Steven Panagas of Zolfo Cooper testified that, after analyzing the Debtors' assets and liabilities in a liquidation scenario, it is his expert opinion that Wards Class 3 creditors would recover approximately 15% of the face amount of their claims rather than the 28% dividend projected under the Joint Plan. Lechmere Class 3 creditors, Spencer Heine testified, would recover nothing in the event of a liquidation because (i) Lechmere's estate has already been reduced to cash and (ii) it is more likely than not that Montgomery Ward holds a valid and enforceable $423 million secured claim against Lechmere's estate. The 14% dividend being paid to Lechmere creditors far exceeds what would be available in a liquidation. Class 3 creditors are impaired because they are receiving less than full recovery on account of their claims and have voted overwhelmingly to accept the Joint Plan. Accordingly, the Joint Plan satisfies the confirmation requirement set forth at 11 U.S.C. Sec. 1129(a)(8). Henry Miller from Wasserstein Perella testified that, in his expert opinion, confirmation of the Joint Plan will not be followed by a liquidation or a need for further rehabilitation of the business. The Proponents have the ability to perform all of their obligations under the Joint Plan and, Mr. Miller testified, management's financial projections through 2004 are reasonably achievable. Mr. Miller is convinced that $1.3 billion of Exit Financing is adequate to fund all of the New Retailer's post-Effective Date obligations and working capital needs, and provides for a $200,000,000 annual excess to serve as a liquidity cushion. Mr. Miller's testimony, Mr. Kurtz asserts, demonstrates the feasibility of the Joint Plan as required under 11 U.S.C. Sec. 1129(a)(11). AG Realty Acquisition Corp., as the purchaser of the Debtors' Corporate Complex, asked Judge Walsh to make it clear that the Debtors' obligations under the purchase contract will survive confirmation. Mr. Kurtz confirmed that the Proponents have every intention of honoring those obligations. Finding that the Proponents have complied with all of the applicable provisions of the Bankruptcy Code and other applicable law, and, having disposed of all objections to the Joint Plan, Judge Walsh ruled that the Joint Plan should be confirmed and entered an order confirming the Joint Plan. Mr. Kurtz reminded the Court that the Debtors are working diligently toward an early Effective Date -- perhaps before the end of this month. (Montgomery Ward Bankruptcy News Issue 43; Bankruptcy Creditors Services Inc.) MONTGOMERY WARD: Statement of Income For Fiscal Month -------------------------------------------------------------- For the fiscal month ending July 5, 1999, the debtor reports a net loss of 21,000,000 on Net Sales, including leased and licensed depts. of 299,000,000. NATIONSWAY: Creditor Panel Seeks Stay To Appeal Cash Use Order -------------------------------------------------------------- NationsWay Transport Service Inc.'s official committee of unsecured creditors is seeking a stay of five interim cash collateral use orders to allow the resolution of the panel's appeals of the court mandates. "The debtors' use of cash collateral has not been for the benefit of the former employees or the benefit of the estates as a whole, but instead has been for the purpose of assisting the secured creditors in a liquidation effort, the expense of which the secured creditors would have had to bear outside of bankruptcy," the panel's July 12 motion argues. The committee contended that the former trucking company has received court approval for six interim cash collateral use stipulations. "Each stipulation has been labeled 'interim,' though the cumulative effect of the stipulations has been anything but interim," the panel said. (The Daily Bankruptcy Review and ABI 15-July-99) NEWSTAR RESOURCES: Announces TSE Suspension ------------------------------------------- Newstar Resources Inc. announces that its common shares have been suspended from trading on the Toronto Stock Exchange. This decision will have no effect on the daily oil and gas operations of Newstar Energy or on previously announced plans to develop core assets in Madisonville, Texas and Pinconning, Michigan. Newstar is not in compliance with the continuous disclosure requirements due to the failure of the Company to file audited financial statements for Fiscal Year 1998 prior to the previously ordered extension date of July 15, 1999. Newstar failed to file the statements because of its inability to pay its auditors. The Company plans to complete audited financial statements and apply to have its common shares listed on a public exchange once its financial position improves and the future plans of Newstar Resources Inc. and its subsidiaries Newstar Energy USA and Newstar Energy of Texas become clearer. Management feels that upon completion of its Corporate Reorganization, the emergence of its subsidiaries from bankruptcy protection under Chapter 11, and successful results from its drilling program, the markets may look more favorably upon the Company and its prospects for future development. Management regrets that it is unable to release definitive information regarding the ultimate exit of its subsidiaries from Chapter 11 and the timing of its recently announced drilling programs, due to the arduous environment of the Bankruptcy proceedings. Michigan-based Newstar Resources Inc. is an independent natural gas and oil exploration and production company with operations in Michigan, Ohio and Texas. The Company is listed on The Toronto Stock Exchange under the symbol NER. PAYLESS CASHWAYS: Better Pricing Causes Net Increase ---------------------------------------------------- Net sales for the quarter ended May 29, 1999, for Payless Cashways Inc. decreased 2.6% to $493,447 from the same period of 1998 when net sales stood at $506,910. Net sales for the first half of 1999 decreased 1.7% to $885,665 from the same period of 1998 when net sales were $901,970. The company indicates that sales decreases for both periods are a result of closing 8 stores in the past twelve months whose sales were $10.6 million and $43.2 million in the first half of 1999 and 1998, respectively. The company also intends to close 5 stores by the end of the 1999 third quarter. Net income for the quarter ended May 29, 1999, was $2.8 million compared to $0.7 million for the same period of 1998. For the first half of 1999, net loss was $7.1 million compared to $24.2 million for the same period of 1998. Net earnings for the second quarter and first half improved in 1999 primarily due to improved gross margin management and continued expense control. PITTSBURGH PENGUINS: Lemieux Bid Goes into Overtime --------------------------------------------------- A federal bankruptcy judge yesterday extended former Pittsburgh Penguins player Mario Lemieux's deadline by 10 days to work out his funding to purchase the bankrupt hockey team, and an additional 10 days to complete the team's contracts, according to the Pittsburgh Post-Gazette. The original deadline for the purchase of the team, set by U.S. Bankruptcy Judge Bernard Markovitz last month when he approved Lemieux's plan, was to be tomorrow, or the plan would be voided. Lemieux's attorney said that the extra time is needed to provide the NHL the opportunity to approve the new investors. A total of $55 million was pledged by Lemieux's camp to purchase the team, pulling it out of bankruptcy, but there has been no word on how much of the $55 million has so far been raised, although Lemieux has a $20 million stake in the ownership that will come from money that the team owes him. NHL attorney William Daly said that the extra time is needed for the NHL to perform background checks on the investors, and that he is confident that Lemieux's bid will go through. If the deal is not completed in 20 days, Judge Markovitz could still allow more time if it was shown that significant progress had been made. Barring any show of progress, he could liquidate the team. In a related action, the NHL has included the Penguins in the 1999-2000 hockey schedule, which it drafted after the announcement two weeks ago that the bankruptcy court had awarded Lemieux control of the team. "The league is confident that Mario is going to reach his goal," said NHL spokesman Andy McGowan. "If we get to that point where something else needs to happen, we'll deal with it." (ABI 16-July-99) PLUMA INC: Order Authorizes Post-Petition Financing --------------------------------------------------- The US Bankruptcy Court for the Middle District of North Carolina entered an order approving and authorizing the debtor to obtain post-petition financing up to an aggregate principal amount of $3 million pursuant to the terms and provisions of that certain DIP Financing and Security Agreement between the debtor, NationsBank, NA, Centura Bank, SunTrust Bank, Atlanta, Crestar Bank, and Fleet Bank, NA. QUALITECH: Objection to Credit Bid By Secured Senior Lenders ------------------------------------------------------------ Qualitech Steel Corporation and Qualitech Steel Holdings Corp. file their objections to the credit bid made by the Secured Lenders. They state that it is unclear whether the pre-petition senior secured lenders or the post-petition senior secured lenders made the credit bid. They claim that is was unclear at the time the final credit bid was made as to whether the amount being bid by the senior secured lenders was for $180 million or $227 million. They also state that it is unclear if the senior secured lenders can make a credit bid while there are significant mechanics' liens which remain unpaid on the assets securing the obligations owed to the senior secured lenders and may have a shared priority on the assets being sold. As a result it is unclear if the senior secured lenders have standing to make such credit bid or if the credit bid can be made if subject to competing, equal priority, claims. The initial credit bid commencing the auction process seemed to designate an opening bid in the amount of $100 million for both facilities. The senior secured lenders' representatives declined to meet with the representatives of the debtors to discuss the written bids received for a joint evaluation or to discuss how to respond to the bids prior to the commencement of the auction, or to discuss a unified method for evaluating bids. The senior secured lenders' representative also refused to value the bid of the consortium comprised of Steel Dynamics Incorporated, McDonald and Company, Cleveland Cliffs, Inc., GE Capital Corporation and Birmingham Steel, despite the demand of representatives of the debtor to make such a valuation thus disrupting the bid process. Five bidders submitted bids at the auction. They were as follows: The Berry Group - Iron Carbide Only - $25,000 deposit. Steel Dynamics Incorporated Consortium - Mill and Iron Carbide plant - $1 million deposit. Sidenor Corporation - Mill Only. $7.5 Million Letter of Credit. Ispat - Steel Mill Only - $7.5 million cash deposit Mitsubishi/KPS Consortium - $7.5 million Letter of Credit. TELEPAD CORP: Seeks Order Granting Extension of Exclusivity ----------------------------------------------------------- The debtor, Telepad Corporation seeks entry of an order granting an extension of the exclusive periods in which to file a plan of reorganization and to solicit acceptances thereof. A hearing to consider the relief requested has been scheduled for July 21, 1999 at 5:00 PM. The debtor is seeking an extension of the plan period for an additional 120 days, from July 15, 1999 to and including November 12, 1999 and of the solicitation period from September 13, 1999 to and including January 11, 2000. The debtor claims that it has been actively administering this case. The debtor has been embroiled in significant litigation arising from a Share Purchase agreement. The debtor has also been responding to document requests from counsel to the Official Committee of Unsecured Creditors, who were recently appointed and are reviewing documents to familiarize themselves with the debtor, its business and operations and the creditor body. The debtor is planning a meeting with its convertible debt holders. The debtor states that the requested extension is in good faith and not intended to pressure its creditors and that cause exists for the extension. THE COSMETIC CENTER: Seeks Order Approving Bidding Procedures ------------------------------------------------------------- The debtor, The Cosmetic Center, Inc. seeks a court order approving bidding procedures and the implementation of an amended employee retention plan and a second order authorizing Cosmetics to close its stores, conduct store closing sales, enter into a settlement agreement with Hilco/Great American Group and enter into an agency agreement for the liquidation of its merchandise. Cosmetics requests that the Court schedule the store closing hearing on July 22, 1999 following the auction which will take place if there is an offer higher than that of Hilco. The Agency Agreement between the debtor and Hilco provides that as a guaranty of the agent's performance, the debtor shall receive the product of 76.5% of the aggregate cost value of the merchandise, as that term is defined in the agreement. WELCOME HOME: Issues 500,000 Shares of New Common Stock -------------------------------------------------------------- Welcome Home, Inc. (OTC Bulletin Board: WELC) announced that as a part of its emergence from bankruptcy the Company has issued 500,000 shares of New Common Stock to replace its Old Common Stock. Shareholders of the Old Common Stock (excluding Jordan Industries, Inc., the principal holder of the Old Common Stock) received one share of Welcome Home New Common Stock for each 4.9282 of Welcome Home Old Common Stock. Welcome Home, Inc. is a publicly owned company and a specialty retailer of decorative home furnishings with 122 stores located primarily in outlet/off-price malls in 37 states. WORLDCORP INC: Seeks Approval of Settlement ------------------------------------------- The debtors, Worldcorp, Inc. (Corp) And Worldcorp Acqusition Corp. (Acquistion) seek entry of an order approving a settlement among WorldCorp, Inc., WorldCorp Acquisition Corp. and World Airways, Inc. (Airways) and authorizing the sale of WorldCorp Acquisition Corp. in connection with such settlement. A hearing to consider the motion will be held at 9:30 AM on August 6, 1999 before the Honorable Mary F. Walrath, US Bankruptcy Judge, US Bankruptcy Court for the District of Delaware, 824 North Market Street, Wilmington, Delaware 19801. The major terms of the proposed settlement are as follows: Corp will pay the Airways secured claim in full in the form of Airways shares. Corp will pay the Airways Unsecured Claim at the rate of $.50 on the dollar in the form of Airways Shares valued at the Transfer Price. Airways will purchase from Acquisition $500,000 worth of Airways Shares valued at the Transfer Price. At the option of Airways, Acquisition will sell to Airways or its designee all remaining Airway Shares held by Acqusition at a per share price equal to the Transfer Price. In full and final settlement of the Corp Claims and the Additional Airways Claims, Airways will pay $50,000 in immediately available funds to Corp, and Corp and Airways will execute and deliver mutual releases. If the debtors continue to own at least a 12% percentage of Airways Shares after consummation of the settlement they will be entitled to designate a number of members of the Airways Board of Directors. ZENITH ELECTRONICS: Prepackaged Plan Would Cancel Stock ------------------------------------------------------- Zenith Electronics Corporation has filed a registration statement with the SEC for solicitation of votes for the prepackaged plan of reorganization of Zenith Electronics Corporation, a Delaware corporation. The purpose of the prepackaged plan is to reduce the company's debt service obligations, facilitate future borrowing to fund liquidity needs and permit the company to implement a restructuring of its operations. The prepackaged plan will reduce Zenith's overall debt and other obligations by approximately $300 million by exchanging $200 million of debt and other liabilities owed to LG Electronics Inc. for all of the newly issued common stock, par value $.01 per share, of the reorganized company, the 6 1/4% Convertible Subordinated Debentures due 2011 in an aggregate principal amount of $103.5 million plus accrued interest thereon for the 8.19% Senior Debentures due 2009 of the reorganized company in an aggregate principal amount of $50 million and approximately $32.4 million of indebtedness to the LG Electronics Inc. for certain property, plant and equipment owned by the company's subsidiaries located in Reynosa, Tamaulipas, Mexico, which have an appraised value equal to such amount. In addition, as a consequence of the prepackaged plan, the common stock of Zenith, together with all outstanding options, warrants or rights to acquire shares of common stock, will be canceled and the holders of the old common stock (including LG Electronic Inc. and its affiliate) will receive no distributions and retain no property under the prepackaged plan in respect of their holdings of the old common stock. ********** 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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