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/raid1/www/Hosts/bankrupt/TCR_Public/990902.MBX T R O U B L E D C O M P A N Y R E P O R T E R Thursday, September 2, 1999, Vol. 3, No. 170 Headlines ADVANCED RADIO TELECOM: $90M Investment In Company Possible AL TECH: ALTX to Lease a Portion of Al Tech Plant ANKER COAL GROUP: $3.2 Million Infusion From Lenders AUTO WORKS: Hearing on Disclosure Statement COMMERCIAL FINANCIAL: Verner, Liipfert To Represent Committee DDJ CAPITAL: Lists Ownership in Companies DAILEY INT'L: Plan Confirmation on August 20 GENEVA STEEL: Committee Opposes Extending Exclusivity GULF STATES STEEL: Objection To Committee's Application HECHINGER: Judge Approves Plan To Stave Off Bankruptcy HURRICANE HYDROCARBONS: Merger Talks with Kazakh Refinery on Hold ICO GLOBAL: Trying To Buy Time To Reorganize LACLEDE STEEL: Ivaco Left With 38% Of Laclede LOEWEN: Can't Turn Its Back On Non-Compete Agreements LOEWEN: Monthly Operating Report NEXTWAVE: Court Delays NextWave's Reorganization Plan OKURA & CO: Hearing For Approval of Disclosure Statement PAGE AMERICA: Applies To Retain Ernst & Young PARAGON TRADE BRANDS: Files Stand Alone Reorganization Plan PENN TRAFFIC: DDJ Capital Acquires 11% Of Company's Common Stock PEOPLES CHOICE TV: Bear Stearns Buys Over $6 M In Company Stock PHILIPPINE AIRLINES: Tan Predicts Quarter Loss PITTSBURGH PENGUINS: NHL To Vote on Lemieux's Plan PLAINTREE SYSTEMS: Proposal To Pay Creditors 70% PRIMARY HEALTH: Orders Extend Exclusivity and Time on Leases TAL WIRELESS NETWORKS: Loss In July 1999 Exceeds $2.6 Million THORN APPLE VALLEY: Court Resets Disclosure Statement Hearing TRANS WORLD AIRLINES: Revenue Falls Off/Labor Accords Reached WELLCARE MANAGEMENT: Annual Meeting Announced For September 30 WILLSON: Canada's Last Major Ofice Supply Chain Seeks Protection ********** ADVANCED RADIO TELECOM: $90M Investment In Company Possible ----------------------------------------------------------- Qwest Communications recently announced an agreement to merge with U S West with Qwest as the surviving corporation. A subsidiary of Qwest has agreed to make a $90 million investment in Advanced Radio Telecom as part of the pending $251 million equity investment. Advanced Radio Telecom has also entered into a strategic relationship with Qwest through private-line, broadband services, co-location and coordinated marketing agreements. Under the terms of the purchase agreement between Advanced Radio Telecom and the investors, the pending merger will reportedly not affect the closing of the investment. All prerequisites for closing of the investment have been satisfied other than stockholder approval of the proposals. Stockholders will meet to consider proposal approval at the annual meeting on September 8, 1999. Customary closing conditions will then be addressed. Qwest and Advanced Radio Telecom will be subject to restrictions imposed on Bell operating companies and their affiliates under the federal communications law. Qwest and U S West expect the combined company to work actively to meet the applicable requirements so that in-region inter-LATA service could be provided in particular states starting in 2000 or 2001. Until these restrictions are lifted, Qwest will be prohibited from providing long distance services to the company's customers in the U S West region. In addition, Advanced Radio Telecom may be required to restructure the manner in which it provides Internet services to customers and may be subject to limitations on networks that cross LATA boundaries in the U S West territory. However, the company says it does not believe that any of these restrictions will have any material adverse affect on it. Under the federal antitrust laws, the Qwest-U S West merger may not be consummated until the Hart-Scott-Rodino waiting period has expired. In connection with the merger, it is possible that the government may require Qwest to take some action with respect to its investment in Advanced Radio Telecom or its arrangements with the company. AL TECH: ALTX to Lease a Portion of Al Tech Plant ------------------------------------------------- ALTX Inc., an American subsidiary of the Spanish steel company Tubacex, will invest $16.4 million in Al Tech Specialty Steel Corp. and lease part of the company's former plant in Colonie, N.Y., according to the Capital District Business Review. The company will rehire 70 of the 90 employees laid off in 1997, when Al Tech filed chapter 11. ALTX plans to lease the property from AL Tech's creditors' committee, which owns the plant, and hopes to begin operations this month. (ABI 01-Sept-99) ANKER COAL GROUP: $3.2 Million Infusion From Lenders ---------------------------------------------------- Anker Coal Group, Inc. has been seeking $3 million of short-term funding for its operations pending completion of a planned restructuring of its senior notes and infusion of additional capital. The company has announced that it has entered into an amendment to the Foothill loan agreement. Under the amendment, Foothill and the other lenders have agreed to provide the company with up to $3.25 million of additional liquidity, $2 million of which must be repaid on or before November 2, 1999. This supplemental liquidity will provide Anker Coal with additional time to seek to implement the planned restructuring. As part of the amendment, the company acknowledged the existence of certain events of default, including its inability in the absence of the planned restructuring to certify that it can pay all of its debts as they come due. Although Foothill and the other lenders were unwilling to formally waive the defaults, Anker Coal says it does not believe that they will take any action on those defaults at this time. Anker Coal Group, Inc. and its subsidiaries produce and sell coal used principally for electric generation and steel production in the eastern United States. AUTO WORKS: Hearing on Disclosure Statement ------------------------------------------- The hearing to consider the approval of the disclosure statement of Auto Works, Inc. shall be held before John C. Ninfo II, US Bankruptcy Court, Western District of New York, on September 30, 1999 at 9:30 AM, 1550 US Courthouse 100 State St. Rochester, NY 14614. COMMERCIAL FINANCIAL: Verner, Liipfert To Represent Committee ------------------------------------------------------------- The US Bankruptcy Court for the Northern District of Oklahoma entered an order on August 25, 1999 authorizing the Official Committee of Unsecured Creditors of Commercial Financial Services, Inc. to employ the firm of Verner, Liipfert, Bernhard, McPherson and Hand as attorneys to the Committee. DDJ CAPITAL: Lists Ownership in Companies ----------------------------------------- DDJ Capital Management, LLC, with stock holdings in excess of $135 million as of June 30, 1999, was shown to have beneficial ownership in the following companies: Company Name Stock Type Investment Value BCE Inc-Cad COM $ 245,000 Bank Montreal/Que COM 549,000 Cadillac FairviewCorp COM 2,580,000 Checkers Drive-In WT EXP 181,000 Frontier AirlinesInc New COM 53,166,000 Marvel Enterprises COM 1,528,000 Mountain Prov MngInc COM 7,127,000 Nine West Group SB NT CV 14,256,000 Paragon TradeBrands Inc COM 206,000 Premier Technolo- SB NT CV 9,064,000 S3 Inc SB NT CV 5.75% 03 12,408,000 Toronto Dominion COM NEW 684,000 Waste Systems Intl Inc COM NEW 33,696,000 DAILEY INT'L: Plan Confirmation on August 20 -------------------------------------------- On August 20, 1999, the US Bankruptcy Court for the District of Delaware entered an order confirming the second amended joint plan of reorganization of the debtors, Dailey International Inc. and its affiliates. The company announced the closing of its acquisition by Weatherford International, Inc. (NYSE: WFT) under the terms of its previously announced acquisition agreement with Weatherford. In addition, it announced that the Second Amended Joint Plan of Reorganization of Dailey and certain of its subsidiaries, as confirmed by order of the United States Bankruptcy Court for the District of Delaware entered on August 20, 1999, became effective today. Under the Plan and the acquisition agreement, on the effective date, (i) all of the outstanding Dailey Senior Notes were canceled, and the holders thereof will be entitled to receive in exchange shares of common stock of Weatherford having an aggregate market value (as provided in the Plan) of $185 million, at a rate of 18.9534 shares of Weatherford common stock per $1,000 principal amount of Senior Notes, and (ii) all of the issued and outstanding shares of Class A and Class B common stock of Dailey were canceled and the holders thereof will be entitled to receive in exchange shares of Weatherford common stock having an aggregate market value (as provided in the Plan) of $10 million, at a rate of 0.02795 shares of Weatherford common stock per share of Dailey common stock. It is anticipated that instruments for the exchange of Dailey Senior Note and common stock certificates will be mailed to holders later this week. Dailey International Inc. is a leading provider of specialty drilling equipment and services to the oil and gas industry and designs, manufactures and rents proprietary downhole tools for oil and gas drilling and workover applications worldwide. Weatherford International, Inc. is one of the world's largest providers of equipment and services used for the exploration and production of oil and natural gas. GENEVA STEEL: Committee Opposes Extending Exclusivity ----------------------------------------------------- The Official Committee of Unsecured Creditors of Geneva Steel Company opposes the debtor's motion for an order further extending exclusivity. The Committee alleges that insufficient progress has been made toward a consensual reorganization plan to justify the 120 days requested. "The debtor has identified the reorganization concept it prefers, but it has not yet plugged in any of the material terms." The Committee states that it has great confidence in the Geneva Steel Plant, and less confidence in the company to propose the best available consensual plan. The Committee believes that within the next 30-45 days, Geneva should have a firm grip on what its plan will b e, who will participate, how much of the company they might take, the amount of exit financing required, whether further recapitalization will be required, and the timing of confirmation. Also, within the next 30-45 days, the Committee believes that Geneva should know whether a steel price turnaround has indeed taken hold sufficiently to make it - bearing in mind both the costs and opportunities of opening up a second blast furnace - cash- positive. The Committee suggests a 60 day extension of exclusivity, with a status hearing in 30-45 days. GULF STATES STEEL: Objection To Committee's Application ------------------------------------------------------- The debtor, Gulf States Steel, Inc. of Alabama, objects to the application of the Unsecured Creditors' Committee to employ PricewaterhouseCoopers LLP as its financial advisor in this Chapter 11 case. The debtor states that the unsecured creditors are subordinate to approximately $190 million of secured notes, the holders of which have a lien on all of the debtor's property, plant and equipment. The fair market value of the debtor's assets could be less than the amount of the secured claims. Therefore, barring some action by the unsecured creditors to elevate their priority in this case, it does not appear the unsecured creditors will be entitled to a major role in the development of a plan of reorganization. "Thus, the employment of a 'Big Five' accounting firm is not justified." The debtor believes that the retention of PwC by the Unsecured Creditors' Committee at this time is extravagant and will result in an unjustifiable impact on the debtor's cash flow. The debtor does not object to the Committee hiring an Alabama accounting firm at rates prevalent in the area. HECHINGER: Judge Approves Plan To Stave Off Bankruptcy ------------------------------------------------------ A federal bankruptcy judge has approved Hechinger Co.'s plan to spend $6.3 million to retain more than 12,000 employees, the company said. The home improvement chain, which filed for Chapter 11 bankruptcy protection June 11, said the plans covers all workers, except senior managers, at 117 stores, company headquarters in Largo and a support services building in Virginia Beach, Va. Employees at 89 stores the company is closing are not covered, said Sean Flynn, a company spokesman. No further layoffs are planned, he said. A judge in U.S. Bankruptcy Court in Wilmington, Del., gave verbal approval to the plan Friday. Under the plan, employees will receive retention bonuses and sales achievement incentives. "Maintaining our experienced, quality work force is crucial as we strive to move forward," CEO Richard J. Lynch said in a statement. HURRICANE HYDROCARBONS: Merger Talks with Kazakh Refinery on Hold ----------------------------------------------------------------- Hurricane Hydrocarbons Ltd., its fortunes rising with Kazakhstan's oil sector, said yesterday it would concentrate restructuring efforts on a deal with its bondholders, effectively putting merger talks with a Kazakh refinery on hold. Calgary-based Hurricane, under creditor protection, said terms of the proposed merger with the Shymkent refinery, first hammered out in April with plant owner KazkommertsBank (KKB), would likely have to be changed in its favour as well. The company is working toward an equity-for-debt swap with holders of $178-million (all figures in U.S. dollars) of bonds while under the Companies' Creditors Arrangement Act. A one-time market darling that fell on hard times last year, all its oil output is in Kazakhstan. 'We told the court we were going to confine the CCAA restructuring plan to just the capital restructuring at this point,' said Richard Norris, Hurricane chief financial officer. 'If, within the next couple of weeks, there is significant progress made in the discussions with the refinery, then it's possible that that transaction could happen at around the same time.' He said the refinery merger was no longer the linchpin to Hurricane's restructuring efforts, although it still made sense to strike a deal with the plant that processes virtually all of its oil production. On Friday, KKB said the merger talks had collapsed and it was calling a $7-million loan it made to the oil producer. ICO GLOBAL: Trying To Buy Time To Reorganize --------------------------------------------- According to a report in Communications Today on August 31, 1999, ICO Global Communications Ltd.'s voluntary Aug. 27 bankruptcy petition under Chapter 11 is aimed at buying it time to reorganize, re-capitalize and complete its financing. "We believe that our actions will be successful and that ICO will emerge as a very effective competitor," said ICO CEO Richard Greco. Investors have confirmed continuing interest in ICO, he added. Roughly $1.7 billion in financing is needed to complete development of the $4.7 billion system, he said. Three ICO subsidiaries also filed Chapter 11 petition. The holding company and one of its subsidiaries are incorporated in Bermuda and the Cayman Islands, respectively. Neither jurisdiction has an equivalent to Chapter 11. ICO voluntarily presented petitions there. Fifteen units of ICO Global Communications in the Americas, Europe and the Asia-Pacific region are not filing Chapter 11. They include the group's principal employer, ICO Services Ltd., based in the United Kingdom. ICO wants the court to let it continue normal operations while it reorganizes. It's asking the court to let it continue to pay its expenses normally. LACLEDE STEEL: Ivaco Left With 38% Of Laclede --------------------------------------------- Ivaco Inc and LCL Holdings I, LLC beneficially own, and have sole voting and dispositive power over 1,869,157 shares of common stock of Laclede Steel Company. The amount of stock held represents 38% of the outstanding common stock of Laclede. As a result of transactions outlined below Ivacan Inc. no longer holds any stock in Laclede. On August 3, 1999, Ivacan transferred its entire membership interest in LCL I, which represents a 100% interest in LCL I, to Ivaco, by virtue of a wind-up of Ivacan into its parent Ivaco. In a letter dated August 11, 1999, Ivaco and Ivacan notified Midwest Holdings and BSC of the transfer of the membership interests of LCL I to Ivaco and that Ivaco agreed to be bound by all of the terms and conditions of the purchase agreement. Resulting from the transactions described, as of August 3, 1999, Ivaco, which is the sole member of LCL I, has the sole power to vote or to direct the vote of and dispose of the 1,009,325 Holdings I common shares and the 859,832 Holdings I conversion shares, for a total of 1,869,157 shares of common stock (assuming the conversion of all Holdings I preferred shares). LOEWEN: Can't Turn Its Back On Non-Compete Agreements ----------------------------------------------------- National Post (formerly The Financial Post) reports on September 1, 1999 that Loewen Group International Inc. cannot simply turn its back on about 200 non-compete agreements it signed with mom- and-pop funeral home owners across the United States, a U.S. Bankruptcy Court judge ruled yesterday in what lawyers called a victory 'for the little folks.' But the Canadian funeral industry giant quickly made it clear that the victory may have dire consequences for another 700 funeral home operators in the United States whose payments it was not contesting. The group of slightly fewer than 200 mom-and-pop sellers was fighting a move by Loewen to assign, or essentially cancel, their contracts, which provided years of payments as long as they agreed not to open new funeral homes -- and take business away from the ones they were selling Loewen. The sellers argued that money from those deals, typically spread over 10 to 20 years, was part of the overall price they negotiated when they sold their businesses. Lawyers pointed to sections of the non-compete agreements that stipulated the non-compete payments would continue even if the client died. 'If my client had died one month after closing the sale, why would his estate be getting any payment not to compete?' asked the lawyer for one former owner promised 40 quarterly payments of $25,000 (US) each. The issue of how these contracts are seen by the court is key. If Loewen succeeded in having them declared executory, which means both sides had duties to fulfil, the former owners may well have found themselves out in the cold for compensation. It could be argued that they suffered no damages -- they were just freed up to compete. But several of the 200 targeted for cancellation appear to be retired, in frail health or simply too old to start again. The court was told one died over the weekend. Peter Walsh, the Bankruptcy Court judge, indicated after hearing two and one-half hours of submissions that he believes, in many cases, the non-compete agreements were really 'disguised notes.' 'The covenant not to compete is eyewash,' said the judge. 'It is a mechanism for deferring compensation.' Loewen negotiated hundreds such contracts in the United States as part of a meteoric growth spurt over the past decade that halted only when the company was forced to restructure $2.3-billion (US) in debt. It is now in bankruptcy protection in Canada and the United States. Judge Walsh said there were too many variables between the contracts for the court to deal with them in one swoop but added Loewen could bring them back one by one -- although he suspects they will be treated as any regular unsecured claims, not executory contracts. That is exactly what the former owners were fighting for, said lawyer David Cook, because now if their non-compete agreements are cancelled they can make a claim and get what all the other unsecured creditors get, possibly upwards of 50 cents on the dollar. 'Notwithstanding the big-business, big-firm mentality it is good that the little folks can band together and get fair treatment,' Mr. Cook, representing about 45 former owners, said after the ruling. 'What this does is ensure that creditors get the same treatment -- whether they are from Wall Street or from Main Street U.S.A.' Loewen said it calls into question whether it should honour non- compete agreements with all the rest of its funeral home operators in the United States, where it does the lion's share of its business. Contract law is different in Canada. 'If the judge is treating these as pre-petition claims then we are not going to make any further payments' to the 200, said Paul Harner, one of Loewen's lawyers. 'In fact, we cannot pay them.' Asked specifically whether if it plans to stop years of payments to the 700 or so former owners not before the court yesterday, Mr. Harner said 'there is no limitation to the subject at hand.' He said he wanted to study the transcript of the ruling further before making any definite announcement. But he told the court earlier that Loewen is not blind to the hardship cancelling the payments would cause. He said the company is just doing what it should under bankruptcy law to protect all its creditors. 'The court will hear that this will cause great hardship to individuals, many of them retired and depending on that income,' he said. 'Loewen understands that, and is not at all unsympathetic to the consequences. 'Although hardship is caused to certain individuals, hardship is caused to everyone in a Chapter 11 case, and there may also be hardship caused to individuals who hold pre-petition bonds.' But even those former owners willing to start over 'can't use the funeral homes that have been in their family for generations, and they can't even use the family name, which now belongs to Loewen,' said lawyer Joseph Grey. 'There is no way these people can compete.' LOEWEN: Monthly Operating Report -------------------------------- For the month ended June 30, 1999, The Loewen Group, Inc. reports Revenue of $81,800,000 and a Net loss for the period - ($94,102,000) NEXTWAVE: Court Delays NextWave's Reorganization Plan ----------------------------------------------------- Yesterday a U.S. appeals court delayed a reorganization plan for NextWave Telecom Inc., a wireless carrier in chapter 11, in order to consider objections from federal regulators, Reuters reported. The plan, which had been scheduled to take effect on Sept. 8, would enable the company to keep licenses to provide wireless telephone service in 95 areas nationwide. Under the plan, NextWave, Hawthorne, N.Y., would pay the Federal Communications Commission (FCC) $1.1 billion for the licenses, for which the company successfully bid nearly $5 billion at auction in 1996. NextWave paid $500 million to the FCC before it filed for chapter 11 protection last year. In May, a bankruptcy court reduced the company's debt to the FCC to $1.1 billion, which meant it had to pay only another $648 million. The FCC has questioned the bankruptcy court's authority to reduce the debt obligation, stating that this undermines the FCC's ability to auction licenses. The U.S. Appeals Court for the Second Circuit has asked both sides to present written arguments within two weeks. NextWave said in a statement that the court's order would accelerate the resolution of its bankruptcy case. Nextel Communications Inc., Reston, Va., has sought to obtain the licenses for more than $2 billion, and on Aug. 11, the company said the FCC and U.S. Department of Justice had reached an agreement to allow Nextel to acquire the licenses. OKURA & CO: Hearing For Approval of Disclosure Statement -------------------------------------------------------- A hearing will be held on September 23, 1999 before the Honorable Jeffry H. Gallet, US Bankruptcy Court for the Southern District of New York, One bowling Green, 5th Floor, New York, NY 10004, to consider and rule upon the adequacy of the information contained in the proposed Disclosure statement of Okura & Co.(America) Inc. PAGE AMERICA: Applies To Retain Ernst & Young --------------------------------------------- Page America Group, Inc. and its debtor affiliates seek an order authorizing them to employ and retain Ernst & Young LLP as accountants, auditors and tax advisors. The billing rates of the firm range from a high of $521 per hour for partners to $120 per hour for staff. PARAGON TRADE BRANDS: Files Stand Alone Reorganization Plan ----------------------------------------------------------- Paragon Trade Brands, Inc. filed a stand alone plan of reorganization with the United States Bankruptcy Court for the Northern District of Georgia. The plan is reportedly supported by the official committee of unsecured creditors of Paragon. The plan provides an alternative to the proposal by Wellspring Capital Management LLC, a private investment company, to acquire Paragon as part of a plan of reorganization. The Wellspring proposal contemplated that Paragon could simultaneously prepare and file a stand alone plan of reorganization. Paragon's plan provides that its unsecured creditors will receive a pro rata distribution of notes and new common stock to be issued by the reorganized Paragon and that current equity will be canceled. If current shareholders approve the plan, they will receive a combination of warrants and a portion of the proceeds, if any, of claims assigned to a litigation trust. The plan contains provisions typical of a Chapter 11 plan of this nature and provides for new bank financing for working capital for the reorganized Paragon. The company also announced that it is revising its business plan to reflect second quarter 1999 results and lowered volume growth expectations for the future. As a result of Paragon's reforecasting of its business plan, the plan, as filed, does not yet specify the amount of value to be distributed. On August 19, 1999, Wellspring delivered a commitment to proceed with the Wellspring proposal, but Paragon informed Wellspring that the commitment was not acceptable. The parties are continuing their negotiations with respect to this matter. Paragon stated that it remains committed to pursuing a transaction with Wellspring while continuing to welcome other bids in accordance with the Bankruptcy Court-approved procedures. Commenting on the filing of the plan, Chief Executive Officer, Bobby Abraham, said "The filing of our stand alone plan is an important step in the process of exiting from Chapter 11. We will continue to pursue the auction process approved by the Bankruptcy Court while simultaneously moving forward with our plan. Our filing of the plan provides us flexibility to emerge from Chapter 11 whether we do so independently, with Wellspring or with another entity. The stand alone plan furthers our objective to expeditiously emerge from Chapter 11 while maintaining the ability to maximize the value of Paragon's estate." Paragon also reported that the Bankruptcy Court last week granted a limited stay through August 25, 1999 of Paragon's recently approved settlement agreement with Kimberly-Clark Corporation pending a ruling by the District Court on an emergency motion by the Equity Committee which seeks an 80-day stay of the K-C settlement pending an appeal. The parties agreed to the District Court's direction that a limited stay remain in place until September 3, 1999, to allow the District Court to more fully consider the Equity Committee's motion. Paragon believes that the granting of the limited stay by the District Court is a procedural step in the appeal process that does not alter the substance of the Bankruptcy Court's August 6, 1999 approval of the K-C settlement. The Equity Committee has also filed a notice of appeal of the Bankruptcy Court's August 6, 1999 approval of the company's settlement with The Procter & Gamble Company. Paragon believes that both the K-C and the P&G settlements will be upheld on appeal. Paragon Trade Brands is the leading manufacturer of store brand infant disposable diapers in the United States and, through its wholly owned subsidiary, Paragon Trade Brands (Canada) Inc., is the leading marketer of store brand infant disposable diapers in Canada. Paragon manufactures a line of premium and economy diapers, training pants, feminine care and adult incontinence products, which are distributed throughout the United States and Canada, primarily through grocery and food stores, mass merchandisers, warehouse clubs, toy stores and drug stores that market the products under their own store brand names. Paragon has also established international joint ventures in Mexico, Argentina, Brazil and China for the sale of infant disposable diapers and other absorbent personal care products. PENN TRAFFIC: DDJ Capital Acquires 11% Of Company's Common Stock ---------------------------------------------------------------- DDJ Capital Management, LLC, acquiring 11.0% of Penn Traffic Company, holds sole voting and dispositive power over 2,211,280 shares of common stock in the company. Additionally, B III Capital Partners, L.P. and DDJ Capital III, LLC beneficially own, and have sole voting and dispositive power on 1,438,463 shares of common stock in Penn Traffic. This amount represents 7.2% of the outstanding common stock in the company. DDJ Capital Management is general partner and investment manager, respectively, of B III Capital Partners, L.P. and DDJ Capital III, LLC. DDJ is also investment manager to the Fund and the Account and investment advisor to DDJ Canadian. PEOPLES CHOICE TV: Bear Stearns Buys Over $6 M In Company Stock --------------------------------------------------------------- Bear, Stearns & Co. Inc., a subsidiary of The Bear Stearns Companies Inc., beneficially owns and exercises sole voting and dispostive power over 509,252, and shared voting and dispositive power over 140,700 shares of common stock of Peoples Choice TV Corporation. The holding represents 5.02% of the outstanding common stock of People Choice TV. The aggregate purchase price of the 649,952 shares of common stock was approximately $6,109,549. Bear Stearns acquired the common stock in the ordinary course of its business as a broker/dealer in connection with its trading and investment activities. PHILIPPINE AIRLINES: Tan Predicts Quarter Loss ---------------------------------------------- Philippine Airlines' controlling shareholder, tycoon Lucio Tan, said Tuesday the carrier will likely swing back to a loss in the three months ending in September. After years of losses, the debt-laden airline landed a net profit of 65.4 million pesos (dlrs 1.6 million) in the quarter which ended in June. While the March-May period is traditionally peak season for air travel in the Philippines, June to September are traditionally leaner months. Tan said he expects PAL will book a small loss in the July-September quarter. "We will still have a little loss," he said in an interview with Dow Jones Newswires. PAL has said its rehabilitation plan helped return it to profitability. But the carrier, saddled with debts of dlrs 2.2 billion, still faces formidable challenges before it is firmly back on the recovery path. In its financial year which ended March 31, PAL posted a net loss of 10.8 billion pesos (dlrs 272 million) as a result of strikes, stiff competition from other airlines, and the impact of Asia's financial crisis. Tan said the carrier will make a loss in fiscal 2000, but a lower one than in the previous financial year. He said the government's ability to improve PAL's operating environment will heavily influence its results this year. The Philippines has accused several Asian carriers of abusing the country's open-sky policy and endangering the survival of the already ailing flag carrier. PAL has blamed what it calls unfair competition from airlines in Taiwan, Singapore, Hong Kong and South Korea for much of its financial problems. The airline claims its competitors have been undercutting fares and exceeding limits on the number of passengers they may pick up in the Philippines. Tan singled out Taiwanese carrier China Airlines in particular, charging it has "caused a lot of damage to Philippine Airlines." The dispute between the Philippines and Taiwan over air rights to Manila has been heated, with the two sides warning of reprisals. Taiwanese airlines' access to the Philippines could be blocked at the end of September unless they effectively cede more business to PAL. Tan will be part of a large Philippine business delegation to leave Wednesday on a three-day visit to Taiwan. The visit coincides with talks scheduled in Taipei later this week between the air authorities and the carriers from both sides in an effort to settle the flight-rights row. Tan, one of the Philippines' richest men, made a fortune in tobacco and brewing. His other interests include banking and a 53.6 percent stake in PAL. Tan also said the U.S. Export-Import Bank -- the carrier's second biggest creditor, owed around dlrs 350 million -- has finally agreed to sign PAL's rehabilitation plan and has withdrawn a court petition in the United States to seize four PAL jets. The Ex-Im Bank had vigorously opposed the plan, and particularly its treatment of various creditor groups. Philippine Trade Secretary Jose Pardo said he believes the flag carrier's profit in the April-June quarter helped sway the Ex-Im Bank's decision. PITTSBURGH PENGUINS: NHL To Vote on Lemieux's Plan -------------------------------------------------- The National Hockey League (NHL) is scheduled to review Mario Lemieux's purchase of the bankrupt Pittsburgh Penguins today in New York, The Pittsburgh Post-Gazette reported. Lemieux will ask the NHL Board of Governors to approve his purchase of the team, subject to his concluding a deal with the operator of the Civic Arena and the bankruptcy court's approval. Lemieux failed to reach a final agreement yesterday with SMG, which operates the Civic Arena, but a spokesperson for Lemieux said differences may be resolved this morning. The Pittsburgh Penguins filed chapter 11 last October with $120 million in liabilities. (ABI 01-Sept- 99) PLAINTREE SYSTEMS: Proposal To Pay Creditors 70% ------------------------------------------------ Plaintree Systems Inc. (TSE: LAN, NASD OTC BB: LANPF) today filed a Proposal to the Company's unsecured creditors under the provisions of the Bankruptcy and Insolvency Act that is designed to free Plaintree of all unsecured liabilities as the Company rebuilds. These liabilities now total under $3 million. The Proposal calls for payments over an 18-month period to unsecured creditors as of 15 January 1999 of 70 cents on the dollar on remaining claims. This follows payments of 32 cents on the dollar. Plaintree made to these creditors between January 15 and today. This will bring the total received by these creditors on their claims to approximately 80 cents on the dollar. (After Jan. 15 Plaintree has paid all suppliers on an effectively COD basis.) Plaintree recently announced that it has entered into an acquisition agreement with Ottawa-based Targa Group that is expected to result in Plaintree assuming control of Targa's businesses in exchange for Plaintree shares. A privately owned company with operations in Ottawa, Toronto, Arnprior and Charlotte, North Carolina, Targa Group Inc. designs and manufactures electronic equipment, primarily for the aerospace industry, and generates significant cash flow and profitability. There will be no impact on preferred or secured creditors who will be paid 100% of their claims in the normal course. "This Proposal is a condition of the Targa acquisition agreement and is required to provide a cleansing from all potential unknown or undisclosed liabilities," said Jay Richardson, President and CEO of Plaintree. "This represents a major improvement over the situation in January when Plaintree appeared unable to pay its creditors at all." The basis for satisfying the other major condition of the amalgamation agreement, (the conversion of the preferred shares to common shares), has not yet been agreed. A publicly held company, founded in 1988, Plaintree Systems develops and sells local area network switches, maintaining a reputation for high quality products and technical support. Headquartered in the Ottawa region, Plaintree also maintains operations in the US. Plaintree is publicly traded in Canada on the TSE and in the US on the NASD OTC Bulletin Board. Plaintree maintains a World Wide Web site on the Internet at http://www.plaintree.com. PRIMARY HEALTH: Orders Extend Exclusivity and Time on Leases ------------------------------------------------------------ The US Bankruptcy Court for the District of Delaware entered an order extending the time within which the debtors, Primary Health Systems, Inc. and its affiliates may assume or reject unexpired leases of nonresidential real property through and including January 11, 2000. The court also entered an order extending the debtors' exclusive periods to file a plan, and solicit acceptances to the plan, through and including December 10, 1999 and February 8, 2000, respectively. TAL WIRELESS NETWORKS: Loss In July 1999 Exceeds $2.6 Million ------------------------------------------------------------- Having filed Chapter 11 bankruptcy proceedings in October 1997 Tal Wireless Networks Inc. has reported its revenue and loss for the month of July 1999. In filing with the Securities & Exchange Commission the company has added this statement: "The Company plans to liquidate assets and review the claims of its various creditors. It is unclear at this time whether there will be any funds available for distribution to shareholders. Once this information has been determined, the company may file a Plan of Reorganization with the Bankruptcy Court." Net revenues for the month of July 1999 were $69,817 with net losses sustained of $2,685,928. THORN APPLE VALLEY: Court Resets Disclosure Statement Hearing ------------------------------------------------------------- The U.S. Bankruptcy Court in Detroit has rescheduled Thorn Apple Valley Inc.'s disclosure statement hearing to Sept. 27, according to an attorney for the company. Judy Calton of Honigman Miller Schwartz & Cohn also told Federal Filings Business News that the former processed meat supplier's exclusive periods were extended to Oct. 4 to allow Thorn Apple to amend its plan disclosure statement to take into account that the sale of all its assets to IBP Inc. had closed. (The Daily Bankruptcy Review and ABI September 1, 1999) TRANS WORLD AIRLINES: Revenue Falls Off/Labor Accords Reached ------------------------------------------------------------- For the second quarter of 1999, total operating revenues of $866.0 million were $17.5 million less than the $883.5 million recorded in 1998 for Trans World Airlines Inc. Passenger revenues declined $8.6 million from the prior year period as higher-yield passengers diverted to other airlines in response to the continuing negotiations between TWA and the IAM and a threatened strike action. Freight and mail revenues also declined $1.6 million as the U.S. Postal Service began diverting mail to other airlines for the same reason. Decreases in all other revenue were also recorded in Getaway Tour revenues ($4.1 million) and third party contract revenues ($1.0 million) while a slight increase was noted in charter revenues ($0.2 million). The company had a net loss of $6.2 million in the second quarter of 1999 compared to a net income of $19.5 million in the same period of 1998. In the first six months of 1999, total operating revenues of $1,630.6 million were $18.3 million less than the $1,648.9 million recorded in 1998. The company had a net loss of $27.8 million in the first half of 1999 compared to a net loss of $36.0 million in the same period of 1998. TWA agreed to pay increases over the next 18 months that will result in wages for TWA's ground employees and flight attendants improving by the end of the term of the contract to averages ranging from 86.5% to 91.0% of industry average, as determined by wage rates in contracts in effect as of June 1999. Additionally, TWA has agreed to distribute 3,500,000 shares of TWA common stock to these employees. As soon as practicable following contract ratification, 500,000 shares will be distributed to IAM-represented flight attendants in a manner determined by the IAM. The remaining 3,000,000 shares will be distributed in a manner determined by the IAM to IAM-represented employees on the following dates: July 31, 2000 - 1,000,000 shares, January 31, 2001 - 1,000,000 shares, January 31, 2002 - 1,000,000 shares. In conjunction with these contracts, TWA and the IAM-represented employees have agreed to withdraw all pending litigation including contempt proceedings. Additionally, all outstanding grievances regarding scope, work jurisdiction, outsourcing and compensation were withdrawn. In settlement of these disputed matters, IAM-represented flight attendant employees will receive $25 million to be distributed in a manner directed by the IAM on the following dates: August 31, 1999 -$11.0 million, August 1, 2000 - $11.0 million, August 1, 2001 - $3.0 million. Similarly, in settlement of these disputed matters, IAM- represented ground employees will receive $10 million to be distributed in a manner directed by the IAM by no later than the following dates: November 2, 2001 - $5.0 million, and August 1, 2002 - $5.0 million. As a result of the ratification of the contract, including settlements of the disputes discussed above, TWA expects to record a non-recurring charge to earnings in the third quarter of 1999 aggregating $34.0 million, net of amounts previously accrued. WELLCARE MANAGEMENT: Annual Meeting Announced For September 30 --------------------------------------------------------------- The annual meeting of shareholders of The WellCare Management Group, Inc. will be held at the company's corporate headquarters, Park West/Hurley Avenue Extension, Kingston, New York 12401, on September 30, 1999 at 10:00 a.m., local time. Stockholders will consider and vote to elect five Directors to serve until the 2000 annual meeting of shareholders; to adopt an amendment to Article IV of the company's Restated Certificate of Incorporation, as amended, to increase the number of authorized shares of the company's common stock from 20 million shares to 75 million shares; and to ratify the reappointment of Deloitte & Touche LLP as independent auditors of the company for the year ending December 31, 1999. Only holders of record of the company's common stock, Class A Common Stock and Series A Preferred Stock, at the close of business on August 23, 1999, the record date for the annual meeting, are entitled to notice of and to vote at the annual meeting. WILLSON: Canada's Last Major Ofice Supply Chain Seeks Protection ---------------------------------------------------------------- CALGARY - The last major Canadian-owned office supply and stationery retail chain will seek court protection from creditors today, after years of trying to fend off competition from big-box stores. Willson Stationers Ltd., founded in 1900 in Winnipeg, will ask to buy some time under the Companies' Creditors Arrangement Act while it restructures its flagging operations and shifts its focus to commercial rather than retail business. Once Willson had a chain of stores across Western Canada and Ontario, but over the years has pared back, selling its Eastern operations to Grand & Toy. By 1995 it had retrenched in Calgary with 50 locations in the West. Today, Willson has 17 stores. 'They're probably not a viable retail chain anymore even if they carry through this restructuring,' said Philip Jones, a retail analyst with Effective Retail Management. 'Willson, to my mind, over the years didn't do anything. When you have a chain of general stores and the speciality big-box stores come along, if you don't do something you're a goner.' The only other major Canadian retailer, Grand & Toy, was sold by Cara Operations Ltd. to Boise Cascade Office Products Corp. of Chicago, in 1995. ********** 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 * * *