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/raid1/www/Hosts/bankrupt/TCR_Public/990830.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, August 30, 1999, Vol. 3, No. 167 Headlines A.G. FINANCIAL: Files For Bankruptcy Protection AMERICAN GAMING & ENTERTAINMENT: Sells Gold Coast Barge ANESTHESIA SOLUTIONS: Hearing On Disclosure Statement BOSTON CHICKEN: Negotiations Stop For BMAC's Purchase BREED TECHNOLOGIES: Pioneer Reports No Beneficial Ownership CAJUN ELECTRIC: Louisiana Generating Has Winning Bid COSTILLA ENERGY: Beneficial Ownership Of Liedtke Reduced ELECTRO-CATHETER: Accounting/Auditing Firm Resigns FACTORY CARD: Taps Schwartz, Cooper FWT, INC: Trustee Objects To Stroock & Stroock GENESIS PHYSICIANS: Seeks End To Health Plan Contracts GOLDEN BOOKS: Seeks Approval of Securities Litigation Settlement GOLDEN BOOKS: A Warning About Their Stock GRANT GEOPHYSICAL: Increase To Authorized Capital GULF STATES STEEL: Committee Taps Attorneys NEVADA BOB'S: Canadian Chain Plans to Buy Two U.S. Firms O'BRIEN ENVIRONMENTAL: NRG Announces Agreement With Calpine PHILIP SERVICES: Board of Directors Appoints Fernandes CEO SC NEW HAVEN: Seeks Time To Assume/Reject Leases SHOE CORP: Seeks Authority For Use of Cash Collateral SOURCEONE WIRELESS: Fights For Sale of Assets SOUTHERN MINERAL: Defaults May Trigger Demands For Payment SOUTHERN MINERAL: Sells Brushy Creek Field To ANR Production SOUTHERN MINERAL: Stock No Longer Listed On NASDAQ TED PARKER: Judge Approves Sale TELETRAC INC: Order Authorizes Employ of Special Tax Counsel TRACE INTERNATIONAL: Receives Final Approval for DIP Loan UNITED COMPANIES: Equity Says It Can't Live Without A. Andersen ********** A.G. FINANCIAL: Files For Bankruptcy Protection ----------------------------------------------- According to a report in THE INDIANAPOLIS STAR on August 27, 1999, an Evansville company has filed for bankruptcy protection, claiming it may owe at least $ 170 million to a quarter million creditors. A.G. Financial Service Center, Inc., a subsidiary of American General Finance Inc. of Evansville, last week filed for Chapter 11 bankruptcy protection. The filing allows the company to keep creditors at bay while it reorganizes its finances. The case is unusually large for the U.S. Bankruptcy Court of the Southern District of Indiana, given the potential for up to 240,000 creditors, said Kevin P. Dempsey, assistant U.S. trustee. All but about $ 3 million of the debts listed in the bankruptcy petition are from a judgment against A.G. Financial pending in a Mississippi state court. In May, a Mississippi judge ruled A.G. Financial must pay 29 plaintiffs a total of $ 167.7 million in damages, most of them punitive. The company has appealed that judgment. The plaintiffs all purchased home satellite systems that were financed through A.G. Financial Service Center, which formerly did business as American General Financial Center. The company designed its payment stream so the customer would pay about the same as they would for monthly cable service, about $ 40 per month, according to the Mississippi court's opinion. The satellite systems typically had a beginning balance of $ 2,354 at 18.96 percent interest. If a customer made just a $ 40 payment each month, though, he or she would not pay off the contract for at least 13 years, the court wrote. The court cited numerous instances where the plaintiffs paid hundreds of dollars on the accounts, but their balances never decreased. A.G. Financial knew that its agents were advertising a monthly rate, without disclosing that this was open ended financing that would result in negative amortization, the court opinion states. Bettina Whyte, who is serving as chairman of A.G. Financial, said she could not comment on the litigation. Whyte was hired to lead the company during the bankruptcy process. She is a principal in the Chicago-based crisis management firm of Jay Alix & Associates. However, in a prepared statement, Texas-based American General Corp., the parent company of A.G. Financial and American General Finance Inc., said A.G. Financial acted properly in making credit available for the satellite systems. A.G. Financial has not been in operation since it sold much of its assets in June, Whyte said, adding there is just one current employee. The Mississippi judgment was a major reason behind the bankruptcy, Whyte said. There are also 52 lawsuits pending against the company, many of which are related to the satellite system purchases, she said. Since 1994, A.G. Financial has dealt with approximately 600 lawsuits relating to the satellite financing, according to the bankruptcy filing. About 90 percent of those were settled, the company reported. Whyte said the 240,000 potential creditors are people that bought satellite systems and used A.G. Financial's services to finance the purchases. A.G. Financial reported that it has about $ 7.2 million in assets. About 1,100 people work in Evansville for American General Finance Inc. A.G. Financial's bankruptcy will not affect operations there, according to the company. AMERICAN GAMING & ENTERTAINMENT: Sells Gold Coast Barge ------------------------------------------------------- American Gaming & Entertainment, with the concurrence of AMGAM Associates, American Gaming and Resorts of Mississippi, Inc. (each a wholly-owned subsidiary of the company), the Committee for the Unsecured Creditors of AMGAM, the Committee for the Unsecured Creditors of AGRM, IGT, and Shamrock Holdings Group, Inc., sold the Gold Coast Barge to The President Riverboat Casino-Mississippi, Inc. The purchaser paid $1,000,000 and delivered a promissory note in the amount of $5,827,500 to the payment agent. The note is payable, without interest (subject to a charge of 12% per annum for any delinquent payments), in monthly installments of $290,000 on the first day of each month beginning on September 1, 1999 and continuing through March 1, 2000, with a payment of $145,000 on April 1, 2000 and the balance due and payable on April 15, 2000. The note may be prepaid without penalty and is subject to acceleration upon certain specified events of default. The purchaser delivered to the AGEL Group a security agreement, preferred ship mortgage and guaranty by President Casinos, Inc., an affiliate of the purchaser, to secure the payments under the promissory note. Upon closing, all lawsuits filed by the purchaser and its affiliates and the members of the AGEL Group against each other were dismissed. As of June 30, 1999, American Gaming & Entertainment depreciated the Gold Coast Barge to a book value of $6,827,500. Accordingly, the company will not recognize any gain or loss upon the sale. Additionally, the purchaser paid $900,000 to the payment agent in full satisfaction of all remaining payments due from an affiliate of the purchaser to AMGAM relating to the purchase of all of the furniture, fixtures and equipment, including certain slot machines, formerly used in the operation of a casino owned by AMGAM. The amounts paid by purchaser are being held by an escrow agent and will be disbursed according to the confirmed joint plan of liquidation in the AMGAM and AGRM bankruptcy cases. ANESTHESIA SOLUTIONS: Hearing On Disclosure Statement ----------------------------------------------------- The hearing to consider the approval of the disclosure statement of Anesthesia Solutions, Inc. will be held in the Federal Building, Bankruptcy Courtroom, Third floor, Third and Walnut Streets, Harrisburg, Pennsylvania on September 30, 1999 at 11:30 AM. BOSTON CHICKEN: Negotiations Stop For BMAC's Purchase ----------------------------------------------------- Boston Chicken, Inc. (OTC Bulletin Board: BOSTQ), its senior lenders and Boston Market Acquisition Company ("BMAC") have discontinued negotiations for BMAC's purchase of certain assets of the Company. The Company and its senior lenders had been negotiating with BMAC on the terms of a final agreement, the details of which are confidential. The Company disclosed BMAC's bid to purchase the Company for approximately $140 million in a filing made on August 3, 1999 in the U.S. Bankruptcy Court, District of Arizona. Boston Chicken filed its voluntary petition for Chapter 11 bankruptcy protection in the same court on October 5, 1998. "We are disappointed we were unable to reach an agreement," said J. Michael Jenkins, Chairman of the Board and Chief Executive Officer of Boston Chicken, Inc. "We hope BMAC maintains an interest in participating in the bidding process." The Company and its lenders are working with a number of other parties who have expressed an interest in purchasing the Company. In addition, the Company and its lenders are developing a revised bidding schedule. Boston Chicken, Inc. operates and franchises restaurants under the Boston Market brand name that specialize in fresh, convenient meals, featuring homestyle entrees, fresh vegetables, sandwiches, salads and side dishes. There are 862 Boston Market restaurants in 33 states and the District of Columbia. BREED TECHNOLOGIES: Pioneer Reports No Beneficial Ownership ----------------------------------------------------------- Pioneer Investment Management Inc., also known as Pioneering Management Corp., no longer has any beneficial ownership in the common stock of Breed Technologies Inc. CAJUN ELECTRIC: Louisiana Generating Has Winning Bid --------------------------------------------------- U.S. District Judge Frank Polozola issued a settlement order clearing the way for Louisiana Generating LLC to be confirmed as the winning bidder for Cajun Electric Power Cooperative's 1,700 megawatts of fossil-fueled generation, according to a newswire report. Louisiana Generating, held 50 percent by NRG Energy Inc. and 50 percent by Southern Company unit Southern Energy Inc., offered $1.026 billion for the Cajun assets; Bankruptcy Judge Gerald H. Schiff, who was at the hearing, is expected to confirm Louisiana Generating's offer in the near future. Cajun filed for chapter 11 protection in December 1994, citing financial problems relating to an investment in the River Bend Nuclear Power Plan in Louisiana. Ralph R. Mabey, Cajun's court-appointed bankruptcy trustee, endorsed the proposal within his reorganization plan in April 1996, and the Rural Utilities Service (RUS) also had previously endorsed Louisiana Generating's bid. The company won approval over the bid of Southwestern Electric Power Co. (SWEPCO). (ABI 27-Aug-99) COSTILLA ENERGY: Beneficial Ownership Of Liedtke Reduced -------------------------------------------------------- Cadell S. Liedtke's beneficial ownership share in Costilla Energy has been reduced to 9.2% of the total number of shares of common stock outstanding by virtue of his involuntary sale of certain shares pursuant to financing arrangements on a margin account with Prudential Securities Inc. He now holds sole voting and dispositive power over 1,242,460 shares and shared voting and dispositive power over 60,000 shares. Mr. Liedtke shares the voting and dispositive power on the 60,000 shares with Liedtke Foundation. Each of the sales of common stock was transacted by a broker on the public market. ELECTRO-CATHETER: Accounting/Auditing Firm Resigns -------------------------------------------------- KPMG LLP was previously the principal accountants for Electro- Catheter Corporation. On August 9, 1999, that firm resigned. On May 14, 1999, the company sought protection of Chapter 11 of the Federal Bankruptcy Code. The Chapter 11 proceeding was filed in the United States Bankruptcy Court for the District of New Jersey in Trenton. The company has suspended the production of catheters but continues to ship catheters from its inventory while attempting to reorganize. Electro-Catheter says it plans on retaining an accounting firm if it emerges from Chapter 11. KPMG LLP's auditors' report on the financial statements of the company for the fiscal years ended August 31, 1998 and 1997 contained a separate paragraph stating that "the Company has suffered recurring losses from operations, has a net capital deficiency and has limited working capital resources which raise substantial doubt about its ability to continue as a going concern." FACTORY CARD: Taps Schwartz, Cooper ----------------------------------- The debtors, Factory Card Outlet Corp., and Factory Card Outlet of America, Ltd. seek authorization to employ Schwartz, Cooper, Greenberger & Krauss, Chartered as Litigation Counsel. If approved, the firm will continue to serve as the debtors' counsel with regard to the litigation pending between the debtor and RPS, Inc. FWT, INC: Trustee Objects To Stroock & Stroock ---------------------------------------------- The United States Trustee for the Northern District of Texas files an objection to the application for an order authorizing the retention of Stroock & Stroock & Lavan, LLP as substitute counsel for the Official Committee of Noteholders and the withdrawal of McDermott, Will & Emery LLP. McDermott Will employment was denied by the court on July 15, 1999. No second application has been filed. The US Trustee states that the application is misleading since McDermott Will has not been employed in the case. Also, Stroock & Stroock currently represent BT Commercial Corporation, a secured creditor of the debtor. (The largest, non-insider, secured debt in the case). Further, the Trustee states that nowhere in the application does the firm reveal the actual hourly billing rates of the attorneys who have or will work on this case. Stroock & Stroock has represented that there is a $350/hour cap on hourly rates charged by attorneys working on this case. The Trustee says that the court found the hourly rate sought by McDermott will and Wendell H. Adair, Jr. excessive. "Now it appears Mr. Adair is back. This time with a new firm and same fees, only disguised. The rates sought by Stroock & Stroock are unreasonable." GENESIS PHYSICIANS: Seeks End To Health Plan Contracts ------------------------------------------------------ The Fort Worth Star Telegram reports on August 26, 1999, that Genesis Physicians Practice Association in Dallas will ask a federal bankruptcy judge to dissolve its contracts with Pacificare of Texas and Prudential HealthCare. If the action is approved, more than 20,000 patients in the Dallas area may have to find a new physician within their health plans' networks. The group filed for reorganization protection under Chapter 11 last month. Its 960 doctors serve about 30,000 patients. A Prudential spokeswoman said yesterday that the health plan is trying to individually recontract with physicians. GOLDEN BOOKS: Seeks Approval of Securities Litigation Settlement ---------------------------------------------------------------- The debtors, Golden Books Family Entertainment Inc., et al. seek Approval of the settlement of two consolidated class action securities litigation. The defendants, the debtor together with certain current and former officers and directors, agree to make a cash payment of $5.25 million into an escrow account for distribution to recognized claimants. The primary D&O carrier will contribute $4 million toward payment of the settlement, and the debtors will contribute the remaining $1.25 million. GOLDEN BOOKS: A Warning About Their Stock ----------------------------------------- Golden Books Family Entertainment, Inc., noting substantial trading volume in shares of its currently outstanding common stock, reminded stockholders today that under its Plan of Reorganization, the outstanding common stock will be canceled and stockholders will receive out of the money warrants. For a full description of the Plan of Reorganization, the Company referred stockholders to the Plan of Reorganization and the Disclosure Statement relating to such Plan approved by the Bankruptcy Court on May 13, 1999, and to its quarterly report on Form 10-Q for the quarterly period ended June 26, 1999. The Company is the leading children's book publisher in North America and owns one of the largest libraries of family entertainment copyrights. The Company creates, publishes and markets entertainment products for children and families through all media. GRANT GEOPHYSICAL: Increase To Authorized Capital ------------------------------------------------- Holders of greater than a majority of the outstanding common stock and voting power of Grant Geophysical, Inc. have approved, by written consent, proposals to amend the company's Certificate of Incorporation to increase the authorized capital of the company to 60,000,000 shares, comprised of 50,000,000 shares of common stock, and 10,000,000 shares of preferred stock; and to amend the company's bylaws to provide new procedures relating to shareholder proposals, shareholder notification, and amendments of the bylaws. Effective August 11, 1999, holders of greater than a majority of the outstanding common stock and voting power of the company acted, by written consent, to reelect Donald W. Wilson, Richard H. Ward, J. Kelly Elliott, Donald G. Russell, Jonathan D. Pollock, W. Richard Anderson, and James R. Brock as directors of the company. On August 13, 1999, the board of directors of the company created a series of 120,000 shares of preferred stock designated as "8% Exchangeable Preferred Stock." The shares of 8% Exchangeable Preferred Stock have a liquidation preference of $100 per share and is entitled to receive cumulative dividends at the rate of 8% per annum of the liquidation preference. The dividends are payable quarterly on January 1, April 1, July 1, and October 1 in cash or, at the company's option, in shares of 8% Exchangeable Preferred Stock. The shares of 8% Exchangeable Preferred Stock may be exchanged, at the option of the holder, into new securities that the company may from time to time propose to sell or issue. Also on August 13, 1999, Grant Geophysical sold 63,000 shares of 8% Exchangeable Preferred Stock to Elliott Associates, L.P. at a price of $100 per share. The aggregate proceeds from the sale of the shares was $6,300,000, and will be used to provide additional working capital for the company. GULF STATES STEEL: Committee Taps Attorneys ------------------------------------------- The Official Committee of Unsecured Creditors of the debtor, Gulf States Steel, applies to employ Balch & Bingham LLP as attorneys for the Committee. A hearing will be held on September 3, 1999 at 9:30 AM. The firm will consult with the trustee or debtor concerning the administration of the case; Investigate the acts, conduct, assets, liabilities, and financial condition of the debtor, the operation of the debtor's business and the desirability of the continuance of such business, and any other matter relevant to the case or to the formulation of a plan; Participate in the formulation of a plan, advise those represented by such Committee of such Committee's determinations as to any plan formulated, and collect and file with the court acceptances or rejections of a plan; And perform such services as are in the interest of those represented. To prepare on behalf of the Committee necessary motions, applications, answers, objections, reports or other legal documents. NEVADA BOB'S: Canadian Chain Plans to Buy Two U.S. Firms -------------------------------------------------------- Nevada Bob's Canada, a chain of golf specialty stores, said yesterday that it plans to acquire its U.S. counterpart and an Arlington-based equipment manufacturer, creating one of the industry's largest golf retailers. Nevada Bob's Canada said it will acquire Las Vegas-based Nevada Bob's Pro Shop and Arlington-based GDH International. Nevada Bob's Pro Shop sought bankruptcy protection in March, and the Canadian company will buy it out of bankruptcy. GDH, parent of the Alien Sports golf line and several smaller brands, will retain its headquarters in Arlington. GDH employs about 70 people, including 35 in North Texas. GDH will maintain manufacturing and distribution operations for Nevada Bob's Golf, GDH Chief Operating Officer Jim Hendrix said. The new company, Nevada Bob's Golf, will comprise 247 stores, including 159 franchise locations, with expected annual revenues of $250 million. The company will maintain corporate headquarters in Calgary, Alberta. Shareholders from GDH and Nevada Bob's Pro Shop have approved the merger. Shareholders for the Canadian company are scheduled to meet Sept. 20 to vote on the agreement. About 90 percent of GDH and Nevada Bob's Pro Shop shareholders have ownership in both companies, Hendrix said. On Wednesday, a U.S. bankruptcy judge in Las Vegas confirmed Nevada Bob's Pro Shop's reorganization plan, which includes the acquisition by Nevada Bob's Canada. The company is expected to emerge from bankruptcy after an official 10-day appeal period, said Lyle Edwards, chief executive for Nevada Bob's Canada. Once the merger is approved, Nevada Bob's Canada will issue 34.5 million shares, with warrants for an additional 12.7 million shares, accounting for 40 percent of the new company. Owners of Nevada Bob's Pro Shop and GDH will hold the remaining shares. Edwards will head the new company. The combination of the three companies will provide economies of scale and position the new company well for both distribution and retail, Hendrix said. Nevada Bob's stores are readily recognized by golfers. GDH was founded in 1998 to acquire and manage undercapitalized golf product manufacturers and other related industries. "We think this gives us a real advantage as far as a franchising network, which we can then incorporate with e-commerce," he said. "We're going to have an Internet site with local representation supporting it." Hendrix added that the new company will share online profits with its franchise locations. Company executives are in the process of defining details of that arrangement. O'BRIEN ENVIRONMENTAL: NRG Announces Agreement With Calpine ----------------------------------------------------------- NRG Energy, Inc. (NRG), a wholly-owned subsidiary of Northern States Power Company (NYSE:NSP), announced today that it has entered into a Stockholders Agreement with Calpine Corporation (NYSE:CPN) relating to Cogeneration Corporation of America (Nasdaq:CGCA). NRG currently owns approximately 45 percent of the outstanding shares of CogenAmerica. Under the Stockholders Agreement, NRG will retain a 20-percent ownership interest in CogenAmerica following completion of the acquisition of CogenAmerica announced earlier today. Pursuant to the terms and conditions of the merger agreement between CogenAmerica and Calpine, all outstanding shares of common stock, other than those to be retained by NRG, will be acquired by Calpine for a cash purchase price of $ 25.00 per share. All existing operating, management and services agreements between NRG and CogenAmerica and their respective affiliates will be terminated upon completion of the acquisition and will be replaced by agreements between Calpine and CogenAmerica and their respective affiliates. The transaction, which is subject to CogenAmerica shareholder approval and various regulatory approvals, is expected to close during the fourth quarter of 1999. NRG acquired its interest in CogenAmerica, then named O'Brien Environmental Energy, Inc. (O'Brien), pursuant to a plan of reorganization for O'Brien proposed by NRG and approved by the U.S. Bankruptcy Court for the District of New Jersey in early 1996. In connection with NRG's plan of reorganization, the existing shareholders of O'Brien received shares in reorganized O'Brien valued by the Court at approximately $ 7.50 per share and an additional $ 2.00 per share in cash. Based on the $ 25.00 price to be paid for the shares of CogenAmerica, the shares received in 1996 in connection with the reorganization have appreciated in excess of 40 percent per annum, compounded. "CogenAmerica's rise from bankruptcy has been a real success story," said David H. Peterson, chairman, president and chief executive officer of NRG and chairman of the board of CogenAmerica. "In less than four years, significant shareholder value has been created as a result of the efforts of the company's management as well as the addition of two projects originally developed by NRG and transferred under the Co- Investment Agreement. Julie Jorgensen and her management team have done an excellent job of handling the company's recent challenges and putting the focus back on the company's business strategy." Julie A. Jorgensen became interim president and chief operating officer of CogenAmerica in October 1998 and was named permanently to the position in May 1999. Peterson said NRG's recent U.S. acquisitions have focused on larger generating stations, making the CogenAmerica assets a better overall fit with Calpine's strategic focus on combined- cycle natural gas-fired and geothermal power generation. Nevertheless, NRG will retain a 20-percent interest in CogenAmerica after the acquisition by Calpine. NRG is one of the world's leading independent power producers, specializing in the development, construction, operation, maintenance and ownership of low-cost, environmentally sensitive power plants. Established in 1989, NRG has a high quality portfolio of projects in the United States, Europe, the Pacific Rim, and Latin America. NRG is involved in projects totaling over 19,000 MW of generating capacity utilizing diverse fuel types including natural and landfill gas, hydro, and solid fuels such as coal, lignite, biomass and refuse-derived fuel. PHILIP SERVICES: Board of Directors Appoints Fernandes CEO ---------------------------------------------------------- Philip Services Corp. (TSE:PHV)(ME:PHV) announced that the Board of Directors has approved the appointment of Anthony G. Fernandes as Chief Executive Officer. The appointment is conditional upon the approval of the Company's lending syndicate, as the incoming majority shareholders of the Company, and the approval of the U.S. and Canadian bankruptcy courts. Allen Fracassi will continue as interim CEO until the necessary approvals are obtained and will remain a member of the Board of Directors until a new Board is appointed. "The appointment of Mr. Fernandes is very positive for Philip and a decision I fully support," said Allen Fracassi. "He brings the right combination of experience and focus to the job, and values the critical role of our employees in building a strong future. I look forward to providing whatever support may be necessary to ensure a smooth transition." Philip Services is an integrated metals recovery and industrial services company with operations throughout the United States, Canada and Europe. Philip provides diversified metals services, together with by-product management and industrial outsourcing services, to all major industry sectors. SC NEW HAVEN: Seeks Time To Assume/Reject Leases ------------------------------------------------ The debtors, SC New Haven Corporation, f/k/a Starter Corp. and its debtor affiliates seek an extension of time within which the debtors may assume or reject unexpired leases of nonresidential real property. The debtors request an extension of time for 60 additional days, until November 16, 1999, within which the debtors may assume or reject the leases. The debtors claim that they have not had sufficient time to appraise their financial situation and the potential value of the leases to the estate. They state that they have been progressing diligently toward the liquidation of their assets. Forcing the decision on the assumption or rejection of the leases at this juncture would cause irreparable harm to the debtors' ability to formulate a plan of reorganization which has the highest return for the creditors and is in the best interest creditors, shareholders and other parties in interest. SHOE CORP: Seeks Authority For Use of Cash Collateral ----------------------------------------------------- The debtor Shoe Corporation of America, Inc. seeks authorization for the debtor's use of cash collateral. The debtor believes that the aggregate balance owing the Lenders as of the Filing Date is approximately $37,148,000. To continue its business operation, the debtor ahs indicated a continuing need to use its existing cash, and proceeds of its existing accounts receivable and inventory. SOURCEONE WIRELESS: Fights For Sale of Assets --------------------------------------------- In a response to the Committee's objection to the sale of substantially all of the debtor's assets, the debtors, SourceOne Wireless, Inc. and SourceOne Wireless, LLC, assert that their decision to sell their assets outside the context of a plan, and without benefit to unsecured creditors is a proper exercise of their business judgment. They allege that as long as the debtor's assets have been properly marketed and the sale has been conducted in good faith, state law allows secured creditors the first claim against the value realized from the sale. The debtors assert that the sale is not a sub rosa plan. The debtors also state that the Committee has no standing to object to the sale as being subject to a lien without the lienholder's consent or resulting in payment in full. SOUTHERN MINERAL: Defaults May Trigger Demands For Payment ---------------------------------------------------------- Southern Mineral Corporation had net revenues in the quarter ended June 30, 1999 of $6.2 million as compared to $4.4 million in the same quarter of 1998. The company recorded a net loss of $3.6million in the quarter ended June 30, 1999, compared to a net loss of $2.5 million for the quarter ended June 30, 1998. In the six months ended June 30, 1999 the company had net revenues of $16.9 million; while in the same period of 1998 net revenues were $8.8 million. Southern Mineral reported a loss in the six months ended June 30, 1999, of $0.7 million compared to loss of $2.8 million in the same period in 1998. The company believes that it may be necessary to sell additional oil and gas assets or obtain additional borrowing from its current or new lenders to raise the additional funds necessary to meet the current September 1, 1999, or proposed revised January 1, 2000, maturity of Tranche A principal. If it is unable to raise the necessary funds, further restructuring of its Amended Credit Facility will be required or the company could be in default on the full amount of its indebtedness. Southern Mineral currently has outstanding $2.9 million under Tranche A of the domestic credit facility due September 1, 1999 which the lenders have proposed reducing to $1.5 million and extending the maturity to January 1, 2000. Failure to make the September 1, 1999 (or January 1, 2000, if extended) payment would be a default under the domestic credit facility, and the lenders would have the right to demand payment in full of the debt outstanding, which currently stands at $16.5 million including Tranche A. On October 1, 1999, a cash interest payment of approximately $1.4 million is due on the debentures. The company will most likely not have sufficient available cash to make this interest payment. Failure to make the October 1, 1999 payment by October 30, 1999 would be a default under the indenture governing the debentures, and most likely would result in a demand for full payment of the debentures. Failure to timely pay the September 1, 1999 payment to the lenders under the domestic credit facility or the October 1, 1999 interest payment on the debentures would be a default under the company's Canadian credit facility, and would most likely result in a demand for payment in full of the debt outstanding under that facility. After an extensive process, the company announced the approval by the Board of Directors of a financial restructuring. If the financial restructuring is not consummated and the company is unsuccessful in obtaining additional borrowings from its current lenders, Southern Mineral has indicated it will consider all alternatives, including, but not limited to, mergers with other entities, obtaining additional sources of financing or equity, and significant reductions in general and administrative costs. In addition, the company may be forced to petition to reorganize or liquidate under the Bankruptcy Code of the United States. SOUTHERN MINERAL: Sells Brushy Creek Field To ANR Production ------------------------------------------------------------ Southern Mineral Corporation sold its interests in the Brushy Creek Field in Lavaca and Dewitt counties of Texas to ANR Production Company for $15.2 million. Closing on the Texan Gardens field has been extended for up to 30 days from August 2, 1999. The company has earmarked the majority of the proceeds of this sale for reduction in its domestic bank indebtedness. Southern Mineral Corporation is an oil and gas acquisition, exploration and production company that owns interests in oil and gas properties located along the Texas Gulf Coast, Canada and Ecuador. The company's principal assets include interests in the Big Escambia Creek field in Alabama and the Pine Creek field in Alberta, Canada. SOUTHERN MINERAL: Stock No Longer Listed On NASDAQ -------------------------------------------------- Southern Mineral Corporation's securities were delisted from the Nasdaq National Market as of the close of business, August 4, 1999. The company announced that this action was attributable to its inability to satisfy the Nasdaq National Market maintenance standards for the continued listing of its securities including a minimum share bid price of $5.00 per share. The company stated that following this delisting its common stock will continue to be quoted and traded on the OTC Bulletin Board under the same symbol, SMIN. Additionally, Southern Mineral Corporation intends to request a review of the delisting decision by the Nasdaq Review Council. TED PARKER: Judge Approves Sale ------------------------------- A federal bankruptcy judge has approved the $90 million sale of the majority of Ted Parker Home Sales Inc. to Champion Enterprises, the nation's largest mobile home maker and Ted Parker's main supplier. The approval came Thursday in U.S. Bankruptcy Court in Wilmington, Del., and means hundreds of Ted Parker Homes customers may soon be able to complete their sales or request refunds of deposits. Champion, based in Auburn Hills, Mich., will buy back all Champion inventory owned by Ted Parker Homes and its sister company, Carolina Home Sales Inc. Champion has also agreed to buy the leases of 37 of Ted Parker Homes' 42 retail centers in North Carolina, South Carolina and Mississippi. The company may eventually buy the leases of the remaining five sales lots as well. Ted Parker and Carolina Home Sales filed for Chapter 11 bankruptcy protection on July 22. Lee Katz, director of reorganization for Ted Parker Home Sales, said the sale also may help about 400 Ted Parker Home Sales employees laid off two weeks ago. Officials with both companies expect the sale to be completed next week. TELETRAC INC: Order Authorizes Employ of Special Tax Counsel ------------------------------------------------------------ The US Bankruptcy Court for the District of Delaware entered an order on August 18, 1999, authorizing the debtor, Teletrac, Inc. to employ and retain Kevan D. Acord, PA as special tax counsel for the debtor. TRACE INTERNATIONAL: Receives Final Approval for DIP Loan --------------------------------------------------------- Trace International Holdings Inc. has received final approval for a $650,000 debtor-in-possession loan from its largest creditor, the Bank of Nova Scotia. After a hearing on Monday, the U.S. Bankruptcy Court in Manhattan approved the facility, which is only half the amount the company had originally requested. (The Daily Bankruptcy Review and ABI Copyright c August 27, 1999) UNITED COMPANIES: Equity Says It Can't Live Without A. Andersen --------------------------------------------------------------- The Official Committee of Equity Security Holders responds to the objections of the debtors and the creditors' committee to the employment of Arthur Andersen LLP as accountants and business and financial advisors. The Equity Committee replies, "Without the services of Arthur Andersen LLP, the Equity Committee cannot fulfill its statutory duties." According to the Equity Committee, without the firm's testimony concerning the value of the debtor's assets, the Equity Committee cannot assess any proposed plans. ********** 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 * * *