/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/990824.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, August 24, 1999, Vol. 3, No. 163 Headlines AMRESCO: Pilgrim Baxter & Associates, Ltd. Holds No Stock APPAREL AMERICA: Plaza Group, L.L.C. Funding Plan BREED TECHNOLOGIES: Announces Appointment of DSI BRUNO'S: Files Motion To Enforce Automatic Stay CORAM RESOURCE NETWORK: Involuntary Petition EATON'S: Stores To Close EDISON BROTHERS: EBS Litigation's Motion For Relief From Stay ELDER BEERMAN: Post-Bankruptcy Report Encouraging FILENE'S BASEMENT: Files Voluntary Chapter 11 Petition HARNISCHFEGER: Consolidated Balance Sheet HARNISCHFEGER: Harnco Seeks Construction of New Servicing Center IMPERIAL HOME DECOR: Lower Net Sales In Foreign Markets INTEGRATED PACKAGING: Annual Meeting Scheduled For September 3 IRIDIUM LLC: Asset Valuation & Bankruptcy Filing Delay Financials LOEWEN: Second Quarter Results LOEWEN: Seeks To Reject Shareholder Agreement With David Riemann MARKER INTERNATIONAL: Case Summary & 20 Largest Creditors MARKER INTERNATIONAL: Bankruptcy Filing Prerequisite of Sale MOSSIMO: 1999 Net Sales To Date Down/Losses Continue NATIONSWAY TRANSPORT: Objects To Committee's Request For Hearing NATIONSWAY TRUCKING: American Freightways Offers $6 Million PHYSICIANS RESOURCE GROUP: Unable To File Quarterly Reports PLANET HOLLYWOOD: Saudi Prince Pumps In $10 Million PROTEAM.COM: Lost More Than $156 Million Last Year RAINTREE HEALTHCARE: Delay In Completion of Quarterly Report SKYVIEW MEDIA: Operating Units File For Chapter 11 In New Jersey SPECTRAN CORP: Explains $9/Share Buyout Price SUN HEALTHCARE: Reports $589 Million in Quarterly Loss VIDIKRON TECHNOLOGIES: Anticipates Reporting A Loss WORLDPORT COMMUNICATIONS: Equity Investment By Heico XATA CORP: Company Showing Three-& Six-Month Net Income Meetings, Conferences and Seminars ********** AMRESCO: Pilgrim Baxter & Associates, Ltd. Holds No Stock --------------------------------------------------------- Pilgrim Baxter & Associates, Ltd., formerly a 5% equity holder, advises the SEC that they no longer hold any common stock in Amresco Inc. APPAREL AMERICA: Plaza Group, L.L.C. Funding Plan ------------------------------------------------- On May 27, 1999 an order confirming Apparel America Inc.'s Plan of Reorganization was entered in the U.S. Bankruptcy Court for the Southern District of New York. The Plan provides provisions for the treatment of administrative claims and classification and treatment of all claims and interests against the debtor. The Plaza Group, L.L.C. will fund the plan to make all of the payments to the claimants pursuant to the plan in exchange for which The Plaza Group, L.L.C. will be issued 19,783,317 shares of stock of Apparel America representing all of the issued and outstanding stock of the reorganized company out of 30,000,000 authorized shares. For financial statement information and the Amended Plan of Reorganization access http://www.sec.gov/cgi-bin/srch- edgar?0000004319-99-000001 on the Internet, free of charge. BREED TECHNOLOGIES: Announces Appointment of DSI ------------------------------------------------ On Aug. 20, 1999--BREED Technologies, Inc. ("BREED") (NYSE:BDT), one of the world's largest occupant restraints suppliers, announced that it has retained Development Specialists, Inc. ("DSI") as its financial consulting and management specialist. DSI, with offices in Chicago, Miami, Los Angeles, Boston and London, provides financial management and restructuring services to underperforming and reorganizing companies. In connection with this appointment, BREED announced that the acting Chief Financial Officer will be Patrick J. O'Malley and that the Acting Treasurer will be William G. King, replacing Michael Feder and Thomas Kirk, respectively, of Jay Alix & Associates. BREED and Jay Alix mutually ended their relationship on an amicable basis and with the approval of BREED's lenders. O'Malley, began his career with Price Waterhouse as an audit manager and most recently served as the Acting Chief Financial Officer of Mercury Finance Company, a sub-prime specialty finance company which emerged from Chapter 11 Reorganization in March, 1999. King joined DSI from American Bankers Insurance Group. Prior to that he was with Price Waterhouse as Manager of its Dispute Analysis and Corporate Recovery Group. BRUNO'S: Files Motion To Enforce Automatic Stay ----------------------------------------------- Pursuant to 11 U.S.C. Sec. 362(a) and 11 U.S.C. Sec. 105(a), the Debtors ask Judge Robinson to enforce the automatic stay and enjoin continued prosecution of the Haskell Litigation before the Alabama state court. The Haskell Litigation, the Debtors argue, ignores the governing principle of law that the right to prosecute claims related to the 1995 Leveraged Recapitalization Transaction (assuming such claims are even viable) is vested in the Debtors and constitute property of the Debtors' estates. As such, those claims fall within the protection of the automatic stay. Haskell's suit, the Debtors assert, is an improper usurpation, interference with and violation of rights and property of the Debtors. All of Haskell's complaints in the Alabama suit belong to the Debtors and, based on the Third Circuit's teaching in Raymark Indus. v. Lai, 973 F.2d 1125 (3d Cir. 1992), the Alabama suit is void ab initio. The Debtors ask Judge Robinson to enter an order finding that the Haskell Litigation violates the automatic stay, the automatic stay should be enforced and Haskell should be directed to dismiss his suit, continued prosecution should be enjoined, and sanctions should be imposed against Messrs. Haskell and Snow and their counsel, J. Vernon Patrick, Jr., Esq., for intentional violation of the automatic stay. * * * Haskell disagrees with the Debtors' interpretation of what the automatic stay covers and what it should not. The Debtors' automatic stay should not, Haskell says, be extended to non- bankrupt parties in the absence of "evidence of unusual circumstances which would justify extending the automatic stay to their protection." See, e.g., Patton v. Bearden, 8 F.3d 343, at 349 (6th Cir. 1993), holding that the automatic stay provisions triggered by the filing of a Chapter 11 proceeding by a debtor partnership did not extend to protect non-debtor partners, merely because of their partner status, even though the partnership was entitled to compel contributions from the partners for partnership debt. The two cases Harvey R. Miller, Esq., of Weil, Gotshal & Manges has cited in correspondence to Mr. Patrick are distinguishable, Mr. Haskell says. * In A. H. Robbins Company, Inc. v. Piccinin, et al., 788 F.2d 994 (4th Cir.), cert. denied, 479 U.S. 876 (1986), the debtor obtained an order from the district court, subsequently affirmed by the U.S. Court of Appeals for the Fourth Circuit, staying product liability lawsuits against codefendants, as well as against the debtor, based in part on the unusual circumstances of that case. The bankruptcy of A. H. Robbins was precipitated by the filing of hundreds of product liability lawsuits filed in courts throughout the United States. As the Court of Appeals noted, the principal asset of the debtor was its product liability insurance policy. * Fidelity Mortgage Investors v. Camelia Builders, Inc., 550 F.2d 47 (2d Cir. 1976, rehearing denied, 1976) cert. denied 97 S.Ct. 1107 (1977), is distinguishable because in that case two creditors proceeded to institute legal proceedings against the debtor. (Bruno's Bankruptcy News Issue 25; Bankruptcy Creditors' Service Inc.) CORAM RESOURCE NETWORK: Involuntary Petition -------------------------------------------- An involuntary bankruptcy petition was filed in the US Bankruptcy Court, District of Delaware, on August 19, 1999 in re: Coram Resource Network, Inc., 1000 South Jefferson Road, Whippany, New Jersey 07981. The case number is 99-2001. The petitioners are as follows: Jordan Reses Home Health Care, Inc. Teamworks Adaptive Equipment, Inc. Apria Healthcare, Inc. IV Associates, Inc. Apria Healthcare of New York State, Inc. Healthcare Solutions Inc. Young's Medical Equipment Inc. IV Associates II Inc. Total Amount of Petitioners' Claims: $2,115,076 EATON'S: Stores To Close ------------------------ Battered department store chain Eaton's appeared to bow to the inevitable Friday, indicating it planned to wind down operations and liquidate its stock. In a news release which came four days after Monday's announcement that talks with a potential buyer had fallen through, Eaton's said it had filed notice of plans to make a proposal to creditors under the Bankruptcy and Insolvency Act. "Essentially, the purpose is to provide the company with 30 days to put its proposal [for winding down] before its creditors," said Karen Goulet, president of Capital Markets Communications, a consultant to Eaton's. The news release said the company intends to "pursue discussions with parties who have expressed interest in purchasing its assets or shares." But analysts said there appeared little chance a buyer for the chain would be found -- especially after Eaton's earlier Friday denied reports that talks had reopened with Ohio-based Federated Department Stores, operators of such successful U.S. chains as Bloomingdale's and Macy's. And by using federal bankruptcy laws instead of restructuring under the Companies Creditors Arrangement Act, as it did in 1997, Eaton's further indicated it was throwing in the towel. That means it likely plans to go out of business while trying to sell real estate, inventory and other assets to pay off its creditors. Eaton's advised late Friday that it expected to begin liquidating inventory early this week. Goulet said that by filing the notice under the insolvency act, it allows the company to reopen its nine Quebec stores, which had been shut without notice Friday, wiping out 2,000 full- and part-time jobs. The stores are expected to reopen Monday. The tattered retailer, with 55 other stores across Canada, had said earlier it would announce its future plans Monday. No reason was given for moving up the announcement. Eaton's sales clerks and other front-line staff, many of whom were leaving work Friday night from the Eaton Centre in downtown Toronto when the bankruptcy news trickled out, reacted with shock and disbelief. A death watch had surrounded the company all week after Eaton's brass announced that a deal to sell the company's core assets had collapsed after months of negotiations. The retailer did not identify the potential buyer, but analysts said it was Federated, one of the U.S.'s biggest and most successful department store chains. No reason had been given for the unannounced closure of Eaton's Quebec stores Friday. But some analysts suggested the closure was due to Quebec laws that make it easier for suppliers to go into warehouses and recover their goods before a retailer declares bankruptcy. EDISON BROTHERS: EBS Litigation's Motion For Relief From Stay ----------------------------------------------------------------- EBS Litigation L.L.C. was created under the Edison I Plan, receiving an assignment of all rights and interest in recovering stock in Dave & Buster's Inc., or its equivalent value, from certain Edison Shareholders. The Litigation LLC brought an adversary proceeding in the United States Bankruptcy Court for the District of Delaware on September 30, 1997 to prosecute the underlying avoidance actions. On March 3O, l998, the Bankruptcy Court certified the Avoidance Action as a class action, and on May 8, 1998, it appointed Morris, James, Hitchens & Williams as class counsel. On or about April 19, 1999, the District Court withdrew the reference of the Avoidance Action, based on the Class' jury demand. The Avoidance Action is now proceeding before the Honorable Sue L. Robinson, in the United States District Court for the District of Delaware as Civil Action No. 98-547-SLR, and is scheduled for trial in January 2001. A significant issue for the Court in the Avoidance Action will be the capitalization of Edison Brothers Stores, Inc. at the time of the Dave & Buster's Spin-Off. The primary, if not sole, source of information and evidence relating to the capitalization of Edison Brothers Stores, Inc. must, of necessity, be found with Edison Brothers Stores, Inc., its directors, officers, employees and agents. In order for the Litigation LLC to properly prosecute its action against the former shareholders of Edison Brothers Stores, Inc., who are alleged to have received shares of Dave & Buster's, Inc. stock, without providing adequate consideration, and in order for the Class Defendants to defend such action, the Litigation LLC and the Class Defendants must have the ability to take third-party discovery from Edison Brothers Stores, Inc., its directors, officers, employees and agents, and its former directors, officers, employees and agents. Accordingly, the Litigation LLC and the Defendant Class, pursuant to 11 U.S.C. Sec. 362(d), ask Judge Walrath to lift the automatic stay in Edison II to the extent necessary to allow third-party discovery of Edison Brothers Stores, Inc., its officers, directors, employees and agents, and its former officers, directors, employees and agents. (Edison Brothers Bankruptcy News Issue 33; Bankruptcy Creditors' Service Inc.) ELDER BEERMAN: Post-Bankruptcy Report Encouraging ------------------------------------------------- The Elder-Beerman Stores Corp. (Nasdaq/NMS:EBSC) announced that its Board of Directors, at its regularly scheduled meeting, has reaffirmed the company's strategy to strengthen the business and drive shareholder value. The Board also expressed its complete confidence that current management is best suited to implement this strategy. The Board noted several of the company's significant achievements since emerging from bankruptcy in late 1997, including: -- repositioning itself as a public company, -- achieving superior comparable sales growth of 4.1 percent and record high operating profits in 1998, and -- increasing store gross square footage over 23 percent by integrating 14 new stores into its operations. The Board also announced its decision to authorize the repurchase of up to $ 24 million in shares of its common stock over a two- year period. At current market prices, this would authorize the company to purchase over 23 percent of the outstanding shares of common stock over the next two years. The share repurchase program provides for the purchase of Elder-Beerman shares through open market purchases and privately negotiated transactions. The Board and management believe that Elder-Beerman's shares are significantly undervalued at the current price levels. In addition to implementing the share repurchase program, Elder- Beerman's strategy to strengthen the business and drive shareholder value includes several initiatives: -- Restructuring of the merchandising organization and continued implementation of the planner/distributor merchandising process. The planner/distributor organization is now operating in three of the company's 13 merchandise divisions and is scheduled for introduction to five additional divisions during Fall season. -- Increased emphasis on moderate price zones in core businesses. -- Further openings of new concept stores like the stores scheduled for opening in Warsaw, Indiana and Frankfort, Kentucky this Fall. Regarding the new stores to be opened in Warsaw and Frankfort, Mershad stated, "We are very excited about the new prototype stores. We are looking forward to their Grand Openings in the late third/early fourth quarter." The company's expansions in Sandusky, Ohio and Winfield, West Virginia are also on schedule for Grand Openings in September. -- Implementation of a four-point program to increase the usage and profitability of the Elder-Beerman credit card. -- Continued pursuit of acquisitions. As part of these initiatives, in a separate announcement today, the company named Charles P. Shaffer as Executive Vice President- Merchandising and Marketing. The company also indicated that it is proceeding with its Fall season expense reduction program, which is not expected to affect the company's ability to conduct business or continue to deliver excellent customer service. The nation's eighth largest independent department store chain, The Elder-Beerman Stores Corp. operates 60 stores in Ohio, Indiana, West Virginia, Michigan, Illinois, Kentucky, Wisconsin and Pennsylvania. Headquartered in Dayton, Ohio, Elder-Beerman reported total revenues of $ 658.0 million and net sales from store operations of $ 632.4 million in 1998. The company's Bee- Gee Shoe Division operates 55 El-Bee and Shoebilee! shoe stores in seven states. Elder-Beerman also operates two furniture superstores. FILENE'S BASEMENT: Files Voluntary Chapter 11 Petition ------------------------------------------------------ Filene's Basement Corp (Nasdaq: BSMT) announced today that the company has filed a voluntary petition with the United States District Court in Boston, Massachusetts seeking relief under Chapter 11 of the U.S. Bankruptcy code. The company cited a lack of trade support and interruption in inventory deliveries as a primary factor for the filing. During the reorganization process the Company will continue to operate its business, which includes both Filene's Basement and Aisle 3 stores, under court protection from its creditors while developing a plan of reorganization. Filene's Basement also announced that it has secured a commitment for $135 million in DIP financing from General Electric Capital Corporation and Paragon Capital LLC, subject to bankruptcy court approval. The Company believes that this financing package will provide sufficient funding to normalize inventory levels and ensure a timely flow of merchandise throughout the reorganization process. "Despite our recently announced financing package, we continued to experience difficulty in securing trade support, which resulted in less than adequate merchandise delivery and negatively impacted sales. With our store inventory below optimal levels, we determined it was in the best interest of all of our stakeholders to file for Chapter 11 in order to ensure strong inventory positions prior to the holiday selling season while providing the Basement with sufficient time and resources to effectively restructure the business and position ourselves for long-term success," said Sam Gerson, Chairman and CEO of Filene's Basement. "We have begun a complete review of all areas of our operations to leverage our core strengths while establishing opportunities to improve efficiency and enhance the company's performance in order to return the Basement to its historical levels of prominence." Prior to the filing, Filene's Basement began implementing strategies to improve merchandising, operations and enhance financial performance, including a reduction of headquarters staff by 15%. The Company's Aisle 3 weekend only concept, which currently operates in four locations, is showing strong signs of success and the Company plans to open 4 additional stores over the next 2 months. "The company has a long-standing tradition as one of the strongest retail brands out there, and our customers equate the Basement with terrific fashion at the sharpest prices," added Gerson. "We must work to deliver on that promise, every day, in every store, while fueling the growth of our Aisle 3 concept which we believe meets the lifestyle needs of a broad range of consumers and will be a strong contributor to our future." The Company's bankruptcy counsel is Hale & Dorr. Filene's Basement operates 51 traditional Filene's Basement stores and four Aisle 3 weekend warehouse stores, primarily in the Northeast and Midwest. Filene's Basement Corp., operates stores that offer focused, quality, branded assortments of men's and women's apparel, at prices generally 20-50% below department and specialty store regular prices. HARNISCHFEGER: Consolidated Balance Sheet ----------------------------------------- For the month ending June 30, 1999, the debtor reports Net sales $133,210,000 and Net Loss of 34,290,000. For the eight months ended June 30, 1999, the company reports net sales of $1,210,125,000 and Net Loss of $143,660,000. HARNISCHFEGER: Harnco Seeks Construction of New Servicing Center ---------------------------------------------------------------- Harnco moves the Court for entry of an Order authorizing it to enter into certain transactions relating to the construction of a new servicing center and expansion of a warehouse located in Gillette, Wyoming. Gillette, the Debtors relate, is located 30 miles from the Powder River Basin -- one of the most significant coal mining sites in the United States, with 147 electric mining shovels, 90 draglines, and 58 blasthole drills currently in use in the Powder River Basin, of which 97 electric mining shovels, 20 draglines and 9 blasthole drills were manufactured by Harnco and its affiliates. Harnco currently services its surface mining customers located in the Western Region (the states of Colorado, Idaho, Montana, North Dakota, South Dakota, Wyoming and Utah) from three facilities: (A) A 19,500 square-foot warehouse and mechanical repair shop and 2,500 square-foot office owned by Harnco located at 1935 North Loop Avenue in Casper, Wyoming. This facility serves as Harnco's main warehouse for its Western Region repair operations. Located more than two hours southeast of the Powder River Basin, the Casper Property is in a geographically undesirable location since the majority of Harnco's customers and its perceived growth opportunities are located in the Powder River Basin. (B) A 26,000 square-foot electric repair facility and 3,500 square-foot office leased by Harnco from Lowell Gifford located at 811 Edwards Road, Gillette, Wyoming. This Leased Facility does not have the appropriate electrical supply, crane capacity or spatial dimensions however, to meet the future repair needs of Harnco's customers and it requires approximately $800,000 in immediate electrical upgrades and layout changes to keep up with current demand if Harnco does not relocate these operations. (C) A small 9,000 square-foot warehouse and a 2,200 square-foot office facility owned by Harnco located at 5834 South Winland Drive, Gillette, Wyoming. The dimensions, physical condition and geographical inconvenience of shuttling parts, employees and customers' goods between these three properties, the Debtors say, render these facilities inadequate to meet the current and future needs of Harnco's customers. Harnco's Western Region servicing and repair facilities are operating at maximum capacity to meet current demand and are incapable of handling any increase in customer orders, the Debtors tell the Court. Furthermore, Harnco's existing facilities in the Western Region have the capacity to perform no more than 50 rebuilds per year, yet Harnco projects that customers will need up to 94 transmissions rebuilt annually over the next three years. If Harnco misses the opportunity to rebuild these transmissions, it will be another 3 years before the need arises again on existing equipment. More importantly, if Harnco cannot provide service to its customers, they will look elsewhere for servicing or will be forced to purchase new components, significantly increasing the cost of operating Harnco's equipment and damaging Harnco's future efforts to sell equipment. Harnco needs to increase the capacity of its repair and maintenance facilities in the Western Region to meet customer demands. This Motion asks the Court for authority to enter into transactions that will fill that need. In an effort to efficiently, adequately and rapidly service its customers located in the Western Region, especially those in the Powder River Basin, Harnco seeks approval of a strategy which, if approved by the Court, will also enable Harnco to reduce costs and increase capacity relating to the Western Region repair operations. Specifically, that strategy contemplates that the Debtors will: (1) Purchase a 6.7 acre parcel of real estate located two miles from the South Winland Property for $80,400 from Ruth Wolff and John Japp; (2) Pay approximately $30,000 to install a well, well pump and septic system on the 6.7 acre parcel; (3) Exchange the 6.7 acre parcel for 2.6 improved acres adjacent to the South Winland Property currently owned by Liebherr Mining Equipment Co.; (4)Hire BHG Leasing to undertake $3.2 million of remodeling and expansion work to improve the expanded South Winland Property in two phases (the first phase contemplates completion of the warehouse and office renovation; the second phase involves the construction of the repair and electrical shop); and (5) Sell the Casper Property (prior to the Petition Date, Harnco listed the Casper Property for sale at $650,000). The New Gillette Facilities should be fully operational during 2000. The consolidation will reduce costs by eliminating inventory and overhead redundancy. Because of the new facility's proximity to the Powder River Basin and its expanded capacity, Harnco projects that its servicing and repair operations should generate a significant revenue increase over the next three years for this business segment because it will enable Harnco to meet the growing demands of its customers from a modernized 58,000 square foot repair and service facility. The expansion also will give Harnco the crane capacity necessary to efficiently move large components and it will allow Harnco to install upgraded tooling and test equipment. The loyalty of Harnco's customers depends on Harnco's ability to timely service their equipment. Presently, demand for mechanical repair facilities outstrips supply, and this demand continues to grow. Not only will the Transactions increase Harnco's capacity to service customer equipment, they will increase Harnco's revenue and reduce Harnco's costs by eliminating redundant facilities, inventory and overhead. Specifically, Harnco will be able to increase the volume of repairs, capture current machining work that is currently outsourced and manufacture simple components for quick supply to customers. Harnco will reduce warehouse operating costs through cost reduction and synergy attained with a single warehouse location. Absent the relief requested in this Motion, Harnco will be unable to meet customer needs and will lose an opportunity to considerably increase the revenue of its servicing and repair business segment. In the Powder River Basin, Harnco regularly services machinery and equipment manufactured by the Debtors as well that which has been manufactured by its competitors. The transmissions on these machines, for example, normally are overhauled between 20,000 operating hours and 35,000 operating hours. Mines normally operate equipment between 5,000 and 6,500 hours per year. A significant number of Harnco machines being used in the Powder River Basin have been operating for 15,000 to 20,000 hours, thus nearing their first overhaul requirement. (Harnishfeger Bankruptcy News Issue 9; Bankruptcy Creditors' Service, Inc.) IMPERIAL HOME DECOR: Lower Net Sales In Foreign Markets ------------------------------------------------------- Imperial Home Decor Group Inc.'s net sales were $112.2 million and $218.6 million for the three and six months ended June 26, 1999, respectively, compared to $119.1 million and $215.0 million for the same periods in 1998, representing a decrease of $6.9 million, or 5.8%, and an increase of $3.6 million, or 1.7%, respectively. For the six months ended June 26, 1999, the consolidated results reflect the inclusion of a full six months of Imperial sales in 1999, an increase of $21.1 million. For the three and six month periods, the company experienced sales declines in the U.K., Eastern Europe and Russia of $4.0 and $15.1 million, respectively, due to adverse market conditions in those geographic areas. Weaker foreign currencies in the periods presented versus the same periods a year ago resulted in lower reported sales of $2.4 million and $4.7 million for the three and six months ended June 26, 1999, respectively. In North America, declines during recent periods were stabilized. North American sales were flat for the three months where increased promotional activity offset a generally weaker North American wallcoverings market. As a result of these combined factors a recorded net loss of $10.0 million for the three months and $20.4 million for the six months ended June 26, 1999 compared to net loss of $7.4 million and $22.4 million for the comparable periods in 1998 were recorded. INTEGRATED PACKAGING: Annual Meeting Scheduled For September 3 -------------------------------------------------------------- The annual meeting of stockholders of Integrated Packaging Assembly Corporation, a Delaware corporation, is to be held on Friday, September 3, 1999, at 10:00 a.m., local time, at the company's offices at 2221 Old Oakland Road, San Jose, California. Stockholders will consider and vote to elect five directors to serve for the ensuing year; to amend the company's Restated Certificate of Incorporation to increase the authorized number of shares of common stock by 125,000,000 shares to 200,000,000 shares and increase the authorized number of shares of preferred stock by 5,000,000 shares to 10,000,000 shares; to amend the company's 1993 Stock Option Plan to increase the number of shares available for issuance by 17,485,079 shares to an aggregate of 20,000,000 shares and to increase the number of shares that may be granted to any employee in any one fiscal year from 250,000 shares to 2,000,000 shares and to increase the number of shares that may be granted to an employee upon initial employment from 250,000 shares to 2,000,000 shares; to amend the company's Employee Stock Purchase Plan to increase the number of shares available for issuance by 1,600,000 shares to an aggregate of 2,000,000 shares; to approve the company's 1999 Director Option Plan with 4,000,000 shares reserved for issuance thereunder; and to ratify the appointment of PricewaterhouseCoopers LLP as independent auditors for the company for the 1999 fiscal year. Only stockholders of record at the close of business on August 12, 1999 are entitled to notice of and to vote at the meeting. IRIDIUM LLC: Asset Valuation & Bankruptcy Filing Delay Financials ----------------------------------------------------------------- Iridium World Communications Ltd., Iridium LLC, Iridium Operating LLC, Iridium Capital Corporation, Iridium IP LLC, Iridium Roaming LLC and Iridium Facilities Corporation, collectively, were unable to file the company's joint quarterly report for the three months ended June 30, 1999 within the prescribed time period for two reasons: the companies could not complete the quarterly financial statements required without unreasonable effort or expense because they have been unable to complete the process for valuing long lived assets, specifically the Iridium System, and the companies filed a voluntary petition for reorganization under Chapter 11 of the Federal Bankruptcy Code on August 13, 1999. The companies' financial statements for the three and six months ended June 30, 1999 have not been finalized, but Iridium LLC anticipates that they will report a significant net loss for those three and six month periods. It is anticipated by the company that the reported net loss will be significantly more than the $60.4 million, $507.1 million and $505.3 million net losses reported for Iridium World Communications Ltd., Iridium LLC and Iridium Operating LLC, respectively, for the three months ended March 31, 1999. LOEWEN: Second Quarter Results ------------------------------- VANCOUVER, British Columbia, August 13, 1999 -- The Loewen Group Inc. (NYSE: LWN), (Toronto: LWN), (ME: LWN), one of the largest funeral home and cemetery operators in North America, today announced revenues for the second quarter ended June 30, 1999, of $264.1 million, compared to approximately $280.0 million in the same period last year after excluding the 124 cemeteries sold on March 31, 1999. After providing for $67.2 million of mainly non- cash reorganization charges relating to the Company's June 1, 1999 Chapter 11 and Companies' Creditors Arrangement Act (CCAA) filings, and two non-operating charges totaling $28.6 million, the net loss for the second quarter of 1999 was $105.3 million or $(1.44) per share. Earnings from operations before impairment charges were $28.4 million in the second quarter of 1999, compared to $51.2 million for the same period last year, principally as a result of lower sales and higher costs in the Company's cemetery and pre-need funeral divisions. Funeral home revenues for the quarter were $149.6 million, a slight decrease of 1.0 percent from $151.2 million in the second quarter of 1998 due to lower pre-need funeral sales and other revenue. Approximately 39,000 funerals were performed in the quarter, an increase of 1,200 over the same period last year. On a same store basis, the number of funerals performed in the second quarter of 1999 was down 2.0 percent. Same store costs increased by 0.8 percent, and gross margins decreased to 33.4 percent compared to 36.8 percent in Q2 1998. Second quarter cemetery revenues were down 27.3 percent to $90.6 million, compared to $124.5 million in Q2 1998. This reflects the sale of 124 cemeteries on March 31, 1999 and the Company's previously announced reduction and restructuring of its pre-need sales program. Cemetery costs included approximately $3.8 million of additional environmental and marketing costs. These factors reduced cemetery gross margins to 20.2 percent from 26.6 percent for the same period last year. "During the past few months," Mr. Lacey added, "our efforts have been focused on maintaining a high level of service for our customers during the reorganization process. While we are working on our restructuring plan, we are also mindful of the needs of our day-to-day operations. By securing $200 million in DIP financing with First Union National Bank in June, we are able to properly fund operations and continue serving our customers with the attention they deserve." "Although reorganization is a difficult process for the Company, we believe that we are making good progress with the plans to reorganize the Company. We are working hard towards removing both financial and operational hurdles which have impeded the Company for the past few years," Mr. Lacey concluded. The Company's reorganization plan to be submitted to the Courts will address the primary objectives of improving the Company's balance sheet, reducing and restructuring debt, decreasing overhead, enhancing funeral and cemetery operations, and achieving greater accountability for cemetery profitability and cash flow. The non-operating charges comprised a $15.1 million pre-tax asset impairment charge related to two cemeteries considered probable for sale and a $13.5 million loss on the sale of 124 cemeteries and three funeral homes on March 31, 1999 for gross proceeds of $193 million. The loss recorded in the second quarter reflects the final adjustments of the net book values, sale proceeds and other adjustments contained in the sales agreement. The $67.2 million in reorganization costs arising from the filing of Chapter 11 and CCAA included non-cash charges of $27.2 million in executory contracts submitted for rejection, $21.7 million in deferred debt issue costs written off, and a provision for a $9.8 million option liability in connection with the PATS senior notes. On June 1, 1999, the Company filed for protection under Chapter 11 in the United States. The Company and its subsidiaries are operating their businesses as debtors-in-possession (DIP). The bankruptcy petitions provide an opportunity to re-examine and begin implementing the Company's revised strategies while working to restructure its indebtedness. As a result of the Chapter 11 and CCAA filings, no principal or interest payments will be made on most pre-petition date US debt obligations without Court approval or until a plan of reorganization providing for the repayment terms has been submitted and confirmed by the Courts and has become effective. Interest on unsecured and undersecured pre-petition date debt obligations subject to compromise has not been accrued after the petition date. Interest expense and principal payments will continue to be recorded on most secured vendor financing, including capital lease obligations, unless the leases are rejected by the debtors. Revenues for the six months ended June 30, 1999 were $574.9 million, compared to $611.7 million in the same period last year. Inclusive of non-recurring charges from Q2, net loss for the first half of 1999 was $98.4 million or $(1.38) per share. For the six-month period, funeral home revenues were $325.1 million, a slight increase from $322.8 million last year. Approximately 85,000 funerals were performed, an increase of 2,100 over the same period last year. On a same store basis, revenue per service performed was up 0.3 percent while the number of funerals was down 2.3 percent compared to the six month period last year. Same store costs decreased by 0.6 percent. Funeral home gross margins decreased to 38.0 percent compared to 39.7 percent in first half 1998. Cemetery revenues for the first half of 1999 were down 15.7 percent to $202.2 million, compared to $239.8 million in 1998. Cemetery gross margins declined to 24.0 percent for the six months versus 29.3 percent for the same period last year due to the sale of 124 cemeteries on March 31, 1999, the Company's previously announced reduction and restructuring of its pre-need sales program, and additional environmental and marketing costs. The Company's attached unaudited interim consolidated statement of operations has been prepared on a going concern basis in accordance with Canadian generally accepted accounting principles. The going concern basis of presentation assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. As a result of the Chapter 11 and CCAA proceedings and circumstances relating to this event, including the Company's debt structure, recent losses and negative cash flow, such realization of assets and discharge of liabilities are subject to significant uncertainty. The unaudited interim consolidated financial statements do not reflect adjustments that would be necessary if the "going concern" basis was not appropriate. If the "going concern" basis was not appropriate for these unaudited interim consolidated financial statements, then significant adjustments would be necessary in the carrying value of assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used. Additionally, the amounts reported could materially change because of a plan of reorganization, since the reported amounts in these interim consolidated financial statements do not give effect to adjustments to the carrying value of the underlying assets or amounts of liabilities that may ultimately result. The appropriateness of the "going concern" basis is dependent upon, among other things, confirmation of a plan of reorganization, future profitable operations, the ability to comply with the terms of post-petition date $200 million DIP financing and the ability to generate sufficient cash from operations and financing arrangements to meet obligations.(Loewen Bankruptcy News Issue 8; Bankruptcy Creditors' Service Inc.) LOEWEN: Seeks To Reject Shareholder Agreement With David Riemann ---------------------------------------------------------------- LGII and David F. Riemann entered into a Shareholder Agreement in 1990 concerning Mr. Riemann's 10% ownership of Riemann Holdings, Inc., LGII's 90% stake in the entity and various restrictions concerning the transfer of those interests in RHI. In short, the Shareholder Agreement permits Mr. Riemann, on 120 days' notice to LGII, to put his shares to LGII for $930,000. Mr. Riemann delivered a "put" notice to LGII on April 30, 1999. By this Motion -- filed before the expiration of the 120-day notice period -- the Debtors seek the Court's authority to reject the Shareholder Agreement pursuant to 11 U.S.C. Sec. 365. The Debtors suggest that, at best, Mr. Riemann holds a prepetition general unsecured claim because LGII's obligation to purchase the 10% equity interest arose prior to the Petition Date. The Debtors indicate that they seek to reject the Shareholder Agreement to ensure that no administrative expense liability will be incurred on account of the expiration of the 120-day notice period. LGII sees no benefit in paying Mr. Riemann a significant amount of money for a minority interest in an entity they control. Accordingly, the Debtors argue, rejection of the Shareholder Agreement is a prudent exercise of their business judgment and the benefit to their estates is obvious. (Loewen Bankruptcy News Issue 8; Bankruptcy Creditors' Service Inc.) MARKER INTERNATIONAL: Case Summary & 20 Largest Creditors --------------------------------------------------------- Debtor: Marker International 1070 West 2300 South Salt Lake City, UT 84119 Type of Business: Maker of Ski Bindings Court: District of Delaware Case No.: 99-2882 Filed: 08/19/99 Chapter: 11 Debtor's Counsel: Stroock & Stroock & Lavan LLP Laura Davis Jones Young Conaway Stargatt & Taylor LLP 11th Floor, rodney Square North PO Box 391 Wilmington, DE 19801 Affiliates filing bankruptcy: DNR USA, Inc. DNR North America, Inc. Total Assets: $8,297,000 Total Liabilities: $78,165,000 No. of shares of preferred stock 1,000,000 No. of shares of common stock 11,140,577 approx. 1800 holders 20 Largest Unsecured Creditors: (Marker) Name Nature Amount ---- ------ ------ Isomura Sangyo Series A Bonds $12,235,237 Manufacturers and Traders Trust Foreign Exchange Contracts $3,675,823 Henry E. Tauber Series B Preferred Stock $3,000,000 Hyupo Vereins Bank Bank Loan $1,478,766 Key Bank Foreign Exchange Contracts $1,279,626 20 Largest Unsecured Creditors: DNR USA, Inc. Utah Power & Light $3,255 20 Largest Unsecured Creditors: DNR North America Transworld Publications $4,801 NHS, Inc. $1,961 Inook $814 Consolidated Freightways $108 Hoodoo Ski Area $93 MARKER INTERNATIONAL: Bankruptcy Filing Prerequisite of Sale -------------------------------------------------------------- THE SALT LAKE TRIBUNE reports on August 21, 1999, that Marker International Inc., the Salt Lake City maker of ski bindings, has filed a "pre-negotiated" bankruptcy plan in Delaware designed to clear the way for the sale of its assets to a new company primarily owned by a joint venture of Tecnica S.p.A. and the principal stockholder of Volkl Group. Tecnica, an Italian company, is best known for its ski boots; Volkl, a German and Swiss company, is best known for its skis. CT Sports Holding AG, the joint venture, would own 85 percent of Marker International GmbH, the company created to buy the assets of Marker, including the stock of its various subsidiaries. The remaining 15 percent would be owned by the current stockholders of Marker International Inc., a public company. Marker filed for protection under Chapter 11 of the U.S. Bankruptcy Code on Thursday in Wilmington, Del. Chapter 11 protects a company from its creditors while it works out a reorganization plan. Marker's reorganization plan was negotiated before the Chapter 11 filing. The company's bankruptcy filing listed assets of $ 8.29 million and liabilities of $ 78.1 million. The bankruptcy filing was a prerequisite to the sale of the company's assets to the European joint venture for $ 15 million. The proposed sale was announced in March. "I didn't expect we would take this long to get to this point," said Peter Weaver, Marker's chief executive. The proposed sale of the company's assets entailed complex negotiations, but creditors were willing to work with the company. The largest unsecured creditor -- a consortium of three German banks led by HypoVereinsbank -- will write off an estimated $ 18.3 million in loans as part of the proposed reorganization. In all, creditors will forgive about $30 million in debt. Among Utah banks, Zions Bank lost an estimated $ 1.5 million on equipment leases. But First Security Bank, Marker's largest Utah creditor, was secured and will not lose money on its loans. The proposed reorganization plan is unusual in that Marker's creditors will not get an ownership stake in the new company in exchange for writing off a portion of their loans. Under the terms of the proposed reorganization, the joint venture has the option of buying the existing stockholders' 15 percent stake in the new company after two years for fair market value less certain costs. The goal, Weaver said, is to buy the remaining 15 percent. Marker's headquarters and distribution center are in Salt Lake City. Its bindings are made in Germany. The company, once part of Northwest Energy Corp., went public in 1994 at $7 a share. The stock, which traded as high as $ 12.37 a share in 1996, now trades around 30 cents a share. Marker lost $48 million, or $ 4.33 a share, on revenue of $ 74.2 million in its fiscal year ended March 31. The loss followed a $ 17.3 million loss, or $1.56 a share, on revenue of $ 81.4 million in its 1998 fiscal year. The company also lost $ 4.8 million, or 44 cents a share, in its first quarter ended June 30. The losses stemmed largely from a disastrous foray into the snowboard business by a company already heavily leveraged. "It couldn't afford to take that risk," said Weaver, who became president in October. Marker's problems were worse than expected, said Weaver, who previously was president of Easton Technical Products. The company found several unpleasant surprises that forced additional accounting charges, such as writing off about $ 1 million in obsolete inventory in Japan. "This was the perverse challenge of my life," Weaver said. "It was slightly different than the original script." Weaver expects the new company to have sales of about $ 75 million and a clean balance sheet with little long-term debt. Marker sold its clothing and accessory business to Ski & Sports Recreation Co. L.L.C. earlier this year. The company, which does business as Marker Sportswear, is a sponsor of the 2002 Winter Olympics. The sale price was the value of the inventory and receivables plus a royalty on future sales. Weaver expects the agreement to generate an estimated $ 500,000 a year in income for Marker. In addition, Marker has the option of buying the company within two years. The reorganization will enable Marker to focus on its core business of ski bindings. The plan also aligns the company with two strong brands in the ski industry. MOSSIMO: 1999 Net Sales To Date Down/Losses Continue ---------------------------------------------------- Mossimo, Inc. designs, sources and markets a lifestyle collection of designer men's and women's sportswear and activewear bearing Mossimo-Registered Trademark; trademarks that project the company's image of a contemporary lifestyle. The company's apparel offerings include knit and woven shirts, outerwear, denim products, sweatshirts, tee-shirts and shorts. Mossimo also licenses its trademarks for use in collections of eyewear, women's swimwear and bodywear, men's neckwear, men's tailored suits and dress shirts and men's hosiery. Mossimo products are characterized by quality workmanship and are targeted towards the fashion conscious consumer, generally age 35 and under. The company distributes its products to a diversified account base, including department stores, specialty retailers, and sports and activewear stores located throughout the United States, as well as one signature retail store and one outlet store in Southern California. Net sales decreased to $11.4 million during the second quarter of 1999 from $11.5 million in the corresponding quarter in 1998. The slight decrease in net sales was primarily due to the discontinuation of the Moss line and the company's screen printing business in 1998, offset by a 22% increase in sales of the men's and women's lines. Net losses for the 1999 second quarter was $5.5 million as compared with net losses of $6.0 million in the1998 second quarter. Net sales in the six-month period ended June 30,1999, were $19.7 million, in the same 1998 period net sales were $25.9 million. Losses were seen in both six-month periods, 1999 net six-month losses stand at $7.0 million, in 1998 six-month net losses were $7.7 million. NATIONSWAY TRANSPORT: Objects To Committee's Request For Hearing ---------------------------------------------------------------- NW Transport Service, Inc. ("NW"), NationsWay Transport Service, Inc. ("NationsWay") and Salt Lake Transfer Company ("Salt Lake") (collectively, "Debtors") object to the Official Committee of Unsecured Creditors' ("Committee") "Motion Requesting that Hearing on Official Committee of Unsecured Creditors' Motion to Suspend Payment of Current Administrative Expenses Be Set At 10:00 a.m. on 8/23/99" The Committee filed its Motion for Expedited Hearing, seeking to have the Motion to Suspend Payments heard a mere six (6) days later. It does not appear that the Court has yet granted the Motion for Expedited Hearing. Therefore, if the Court grants the Motion for Expedited Hearing today, parties will only have two (2) business days notice of the hearing. Such notice is insufficient. Ultimately, the Debtor opposes the Motion to Suspend Payments. However, the Debtor is not in a position to adequately and thoroughly do so upon only two(2) days notice. Therefore, the Debtor respectfully requests that the Court deny the Motion for Expedited Hearing and set a hearing on the Motion to Suspend Payments in the ordinary course. NATIONSWAY TRUCKING: American Freightways Offers $6 Million ----------------------------------------------------------- American Freightways Corp. has offered $ 6 million for the Commerce City hub of the beleaguered NationsWay Trucking, which filed for bankruptcy May 20. NationsWay lawyer Philip Rudd said the Harrison, Ark., company could face other bidders at the auction in federal bankruptcy court in Phoenix Sept. 7., but he said the company has agreed to sell to American Freightways, subject to the court's approval. NationsWay's hubs in Phoenix and Harrisburg, Pa., will also go on the block, to be auctioned to Consolidated Freightways, another trucking giant. The sale of terminals across the country could net as much as $17 million for the estate, officials have said. Before it shut down in May and began liquidating its assets under Chapter 11 bankruptcy, NationsWay was the nation's largest privately held trucking company. Creditors have asked the court to convert the Chapter 11 reorganization into a Chapter 7, for a total liquidation. The company has not yet issued final paychecks for most of its 3,500 employees, but the remaining 75 NationsWay workers have been given weekly bonuses to continue working as the company clears the book of assets. Since the company filed for bankruptcy, NationsWay founder Jerry McMorris, co-owner of the Colorado Rockies baseball team, has tried to distance himself from the entire process. That leaves Chief Financial Officer Harold Roth in charge, who was unavailable for comment this week on the sale of the Commerce City property. The employees rank as unsecured creditors in bankruptcy court, which means other creditors would get their money first. But under Colorado law, they could be paid by officers of the company, according to attorneys who are suing McMorris and other corporate officers. PHYSICIANS RESOURCE GROUP: Unable To File Quarterly Reports ----------------------------------------------------------- Due to a lack of adequate financial information from certain affiliated practices which are involved in disputes with Physicians Resource Group Inc., as well as management and staff turnover, the company has advised the Securities & Exchange Commission that it will be late in filing the March 31, and June 30, 1999 quarterly financial statements. In fact, the company is continuing its efforts to prepare and file its September 30, 1998 financial information. To the extent not recorded in prior period financial statements yet to be finalized by the company, Physicians Resource suggests that material pre-tax charges may be recorded for the quarter ended June 30, 1999 for, among other things, the impairment of certain assets associated with affiliated practices that have instituted legal proceedings against the company and receivable balances from other affiliates. PLANET HOLLYWOOD: Saudi Prince Pumps In $10 Million --------------------------------------------------- Saudi Prince Al-Walid bin Talal, who is said to be worth $13.3 billion, said Saturday that he pumped an extra $10 million into the Planet Hollywood restaurant chain to "save it from bankruptcy," according to a newswire report. This investment brings the prince's stake in the chain to 20 percent. "The new investment.should help the company back on to steady ground and will allow me to play a more active role in its expansion," bin Talal said. This investment is part of a capital restructuring by the firm's main shareholders. According to its shareholders, the Orlando, Fla.-based theme restaurant chain, owned in part by Hollywood stars Bruce Willis, Arnold Schwarzenegger and Sylvester Stallone, announced last week that it would file for chapter 11 protection due to its rapid expansion in 1996 and 1997. PROTEAM.COM: Lost More Than $156 Million Last Year -------------------------------------------------- Proteam.com of Secaucus, "the Internet's largest sports store," has filed for Chapter 11 bankruptcy protection. The on-line sports merchandise retailer, formerly known as Genesis Direct, will stay in business while under court protection from creditors. Proteam.com filed in U.S. Bankruptcy Court in Newark. The company's stock, which has fallen below $ 1 a share in value, was suspended from trading Friday. In a brief statement, recently appointed CEO Harry Usher said the bankruptcy filing is the most viable option as the company pursues a reorganization plan. "Our core sports business is strong," said Usher, a former United States Football League executive. The company, which sells sports apparel and memorabilia on several Web sites and catalogs, had sales of $ 252 million in 1998, yet it lost more than $ 156 million for the year. The problems surfaced last year as investors began dumping the stock in the middle of a costly expansion. Genesis Direct was primarily a catalog mail-order retailer that planned to buy a new catalog each month, while also beefing up its Internet presence. But the catalog expansion backfired as Genesis racked up a long list of late payments to creditors, according to company disclosures. The company quickly retrenched, selling catalogs, offices, and a $ 30 million warehouse in Memphis, Tenn., to Toys "R" Us Inc. Proteam.com said Internet sports sales would be its core focus. Several unrelated product lines -- including toys, dolls, and business tools -- were abandoned. The company reported a $ 32 million loss in the second quarter, compared to a $ 24 million loss a year ago. RAINTREE HEALTHCARE: Delay In Completion of Quarterly Report ------------------------------------------------------------ RainTree Healthcare Corporation entered into a forbearance agreement on August 16, 1999 with the holders of its 11% Senior Secured Notes due 2003, which defers the due date of the $1.3 million interest payment due July 1, 1999. The company is also negotiating a forbearance agreement and amendment to its master lease with Omega Healthcare Investors, Inc. These events have delayed the completion of the company's quarterly report for the three months ended June 30, 1999. SKYVIEW MEDIA: Operating Units File For Chapter 11 In New Jersey ---------------------------------------------------------------- SkyView Media Group Inc., together with its SkyView World Media LLC and Russian Television Network Inc. operating affiliates, filed chapter 11 petitions Wednesday in the U.S. Bankruptcy Court in Newark, N.J. SkyView Media, the Ft. Lee, N.J.-based parent holding company, and SkyView World, the foreign-language programming provider, both listed assets of between $50 million and $100 million and liabilities of more than $100 million. Russian Television listed between $100,000 and $500,000 in assets and more than $100 million in liabilities. Shari Siegel of Simpson Thacher & Bartlett, who represents the companies, told Federal Filings Business News that the companies' combined liabilities equal about $180 million. Siegel added that the companies currently have about 111,000 subscribers, of which 96,000 receive ethnic television and radio broadcasts. (The Daily Bankruptcy Review and ABI copyright c August 23, 1999) SPECTRAN CORP: Explains $9/Share Buyout Price --------------------------------------------- SpecTran Corporation, which develops, manufactures and markets glass optical fibers and value-added fiber optic products, filed an amendment to its Solicitation/Recommendation Statement that was filed by it with the Securities and Exchange Commission related to the tender offer by Lucent Technologies Inc. to purchase all of SpecTran's outstanding shares for $9.00 per share. The amendment contains the following information---Reasons for the recommendation; current financial market conditions, volatility and trading information with respect to the shares of the company and the historical prices for the shares, including the fact that, although the proposed purchase price of $9 per share is less than recent NASDAQ National Market Closing prices for the shares, representing a discount of approximately 21.7% over the July 14, 1999 market price of $11.50 per share and discounts of approximately 14.0% and 4.0% over the one and two months average closing prices of $10.46 and $9.37 per share, respectively, the $9 per share purchase price represents: a premium of approximately 10.2% over the three month average closing price of $8.17 per share; a premium of approximately 38.2% over the six month average closing price of $6.51 per share; a premium of approximately 40.2% over the average closing price since January 1, 1999; and a premium of approximately 56.6% over the one year average closing price of $5.75; and a determination that the proposed purchase price is fair even though it does not include a premium over the closing price of shares on the Nasdaq National Market on July 14, 1999 due to the following factors: (i) that the company and its financial advisors solicited expressions of interest in a variety of transactions from 34 companies over more than six months and that such solicitation did not produce any offers that were superior to the Offer; (ii) that the company's public announcement that it was exploring various financial alternatives including entering into strategic alliances did not produce any offers that were superior to the Offer; (iii) Lazard's opinion that the $9 in cash per share to be paid to the stockholders of the company pursuant to the Offer and the Merger was fair to such stockholders from a financial point of view; and (iv) that the $11.50 closing price for the shares on July 14, 1999 might not accurately reflect the value of the company based upon the fact that the shares had a relatively low average daily trading volume and were historically volatile, coupled with the likelihood that the July 14, 1999 closing price reflected, in part, market speculation regarding a possible takeover of the company and would not be sustained if a transaction did not go forward. SpecTran Corporation develops, manufactures and markets glass optical fibers and value-added fiber optic products. For global communications markets, SpecTran manufactures standard fiber and cable as well as special performance fiber and cable. The company's application specific optical fiber and cable products also serve industrial, aerospace and medical markets worldwide. SUN HEALTHCARE: Reports $589 Million in Quarterly Loss ------------------------------------------------------ A nursing home operation under scrutiny in Arizona, Sun Healthcare Group, reported a second-quarter loss of $ 589 million and said it may declare bankruptcy to protect itself from its creditors. Sun reported an initial loss of $ 65 million, or $ 1.10 a share for the quarter. That's compared with a $ 61 million loss in the second quarter of 1998. Additional charges increased the amount to nearly $ 600 million this past quarter. The largest charge, $400 million, was for the writedown in the value of company assets because of lower payments from the new Medicare reimbursement system. The company said Friday in its filing with the Securities and Exchange Commission that if Sun creditors demand payment "or if the company makes a determination that it would not be able to fund its operations outside bankruptcy, the company will commence a Chapter 11 bankruptcy." Under a Chapter 11 bankruptcy filing, Sun would be protected from creditors while the company is reorganized. Sun has said if it were to declare bankruptcy, the company would have sufficient funds to continue operating its nursing homes at current levels of staffing and care. Sun also reported Friday that revenue fell 20 percent, to $ 601 million in the quarter from $ 752 million a year earlier. The losses appear to be much larger than one analyst expected. Sun is one of the nation's largest nursing-home chains, housing about 40,000 people. It operates 321 homes, 11 of them in Arizona and eight in New Mexico. Its financial woes arose not long before the Arizona Department of Health Services put one of Sun Healthcare's homes on probationary status, alleging failure to supervise some patients. One of them died of a rare drug reaction, though the cause of death was initially believed to be a severe sunburn. Sun is also facing several lawsuits alleging deficient care in its homes. Inspectors in several states found that nearly 39 percent of Sun's 321 homes caused actual harm to residents or put them in immediate danger of serious injury or death, according to the U.S. Health Care Financing Administration. The company has reported losses close to $ 1.4 billion between October 1998 and June of this year. It has cut more than 10,000 jobs and has missed making debt payments. The report also notes that Sun failed to make a $ 19.5 million payment due to some of its bank lenders on June 30. Because of Sun's payment defaults, these lenders could require immediate repayment of all outstanding amounts, according to the report. No further amount may be borrowed under that bank agreement, the report said. The company must fund all operations, capital spending and scheduled debt service from its existing cash reserves of $ 52.4 million as of Aug. 18. VIDIKRON TECHNOLOGIES: Anticipates Reporting A Loss --------------------------------------------------- Vidikron Technologies Group Inc. will not be timely filing its financial quarterly report with the Securities & Exchange Commission as it anticipates to do so would involve unreasonable effort or expense. The company anticipates that it will report a loss for the period. Because of incomplete financial information, the company is unable to estimate with certainty the extent of the loss at this time. WORLDPORT COMMUNICATIONS: Equity Investment By Heico ---------------------------------------------------- WorldPort Communications, Inc. earlier announced The Heico Companies, LLC has made an additional $15.0 million equity investment in WorldPort through the exercise of an option granted by WorldPort to Heico in January 1999 to purchase 283,206 shares of Series C Convertible Preferred Stock and the purchase of 141,603 shares of Series E Convertible Preferred Stock. Heico also received an option to acquire a new Series F Convertible Preferred Stock of the company for an additional $15.0 million. This investment satisfied the conditions for the extension of the maturity date of WorldPort's bridge loan facility to August 18, 1999. The Series C Stock and Series E Stock is convertible into 10.865 shares of common stock per share. Upon issuance, the Series F Stock will be convertible at a conversion price of $4.00 per share of common stock, or 8.8275 shares of common stock per share. The Series C Preferred Stock carries 40 votes per share. The Series E and Series F Stock entitle the holder to vote on an as converted basis. As a result of the additional equity investment made, Heico holds directly approximately 40% of the outstanding votes (41.5% if the Series F Stock were purchased). By virtue of a shareholder agreement among Heico, WorldPort and certain stockholders of WorldPort, Heico currently controls, with respect to certain matters, including acquisitions, incurrence of debt and the issuance or sale of equity securities, additional shares of capital stock of the company representing approximately 31% of WorldPort's outstanding votes after the investment reported here was completed. Proceeds from the equity investment will be utilized for working capital and other general corporate purposes. WorldPort earlier had no comment on the public announcements of the filing of shareholder class action lawsuits against the company, as it had not received or reviewed any such filings. WorldPort Communications, Inc., headquartered in Atlanta, Georgia, provides international telecommunications and Internet services primarily to ISPs, long distance carriers, medium and large corporate customers in Europe and North America. WorldPort offers domestic and international voice, data, video, Internet and other telecommunication services over a network of terrestrial and undersea cables, switches, and other network equipment and through interconnection agreements with major carriers in Europe and North America. XATA CORP: Company Showing Three- & Six-Month Net Income ------------------------------------------------------- Xata Corporation's net sales for the three months ended June 30, 1999 increased 188.3% to $2,929,051 as compared to sales of $1,015,931 for the comparable three month period ended June 30, 1998. Net sales for the nine months ended June 30, 1999 increased 23.3% to $8,648,048 from the comparable nine months ended June 30, 1998 of $7,014,623. The company expects revenues for fiscal 1999 to exceed fiscal 1998 levels. The company recorded a net income of $176,971 for the three-month period ended June 30, 1999, compared to net loss of $2,363,836 for the comparable period in 1998. The nine-month totals were a net income of $437,317 and net loss of $2,540,139, respectively. Meetings, Conferences and Seminars ---------------------------------- 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 13-15, 1999 STATES' ASSOCIATION OF BANKRUPTCY ATTORNEYS 8th Annual States' Taxation & Bankruptcy Conference Hotel Santa Fe, Santa Fe, New Mexico Contact: 1-505-827-0728 September 16-18, 1999 AMERICAN BANRKUTPCY INSTITUTE Southwest Bankruptcy Conference The Hotel Loretto, Santa Fe, New Mexico Contact: 1-703-739-0800 September 17, 1999 GEORGETOWN UNIVERSITY LAW CENTER & THE AMERICAN BANKRUPTCY INSTITUTE Bankruptcy '99: Views from the Bench Georgetown University Law Center, Washington, D.C. Contact: 1-202-662-9890 September 24-25, 1999 VIRGINIA CONTINUING LEGAL EDUCATION 14th Annual Mid-Atlantic Institute on Bankruptcy and Reorganization Practice Boar's Head Inn, Charlottesville, Virginia Contact: 1-800-979-8253 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 17-20, 1999 AMERICAN BAR ASSOCIATION'S LATIN AMERICAN LAW SUBCOMMITTEE & THE ASSOCIATION OF COMMERCIAL BANKS OF THE DOMINICAN REPUBLIC Educational Exchange Case De Campo Resort, LaRomana, Dominican Republic Contact: 1-703-739-0800 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 May 4-5, 2000 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Bankruptcy Sales & Acquisitions The Renaissance Stanford Court Hotel San Francisco, California Contact: 1-903-592-5169 or ram@ballistic.com ********** 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, Editors. Copyright 1999. All rights reserved. ISSN 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *