/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/990909.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 9, 1999, Vol. 3, No. 174 Headlines AMERICAN BANKNOTE: Nonpayment Of Interest On Senior Notes BOSTON CHICKEN: Seeks Approval of 4th Amendment To DIP Facility BOSTON CHICKEN: Taps Lazard Freres As Investment Banker CAI WIRELESS: Zero Holdings By Tudor & Raptor DAILEY INTERNATIONAL: Acquired By Weatherford International, Inc. EAGLE CAPITAL: Hearing on Disclosure Statement ELDER BEERMAN: New Merchandising Head and Share Repurchase Plan FILENE'S BASEMENT: Receiving Shipments Again FWT,INC: Applies To Employ Navigant Consulting GENEVA STEEL: Names New Operations Head GOLDEN STAR RESOURCES: Stock Ownership Reported GOSS GRAPHIC: Expects To Emerge From Bankruptcy In 2 To 4 Months IMPERIAL HOME DECOR: Financial Reports For 3 & 6 Month Periods IONICA PLC: Nortel Networks Seeks to Dismiss Case JUMBOSPORTS: Order Extends Exclusivity LL KNICKERBOCKER: Attorney Chosen To Represent Committee LL KNICKERBOCKER: Stock Delisted; Involuntary Petition Filed LOEWEN: Seeks Extension of Exclusivity LOEWEN: Seeks Approval of Key Employee Retention Program MEDIA LOGIC: Meeting of Creditors MOA HOSPITALITY: Deteriorating Trend In Operating Results NEXTWAVE: Second Circuit Stays Plan Consummation OLDENBURG BREWERY: Silver Creek Brewing Makes Offer PHILIP SERVICES: Loss Deepens In Second Quarter RAND ENERGY: Disclosure Statement Hearing RHA/PRINCETON HOSPITAL: Case Summary & 20 Largest Creditors SEMI-TECH: Files for Protection From Creditors SERVICE MERCHANDISE: Seeks To Grant Protection To Federal Home SHOE CORP: Receives Financing SIRENA APPAREL GROUP: Seeks To Establish Bar Date SYSTEMSOFT CORP: Continuance of Hearing On Disclosure Statement THORN APPLE VALLEY: Assets Sold To IBP, Inc. For $109 Million URL: Owners Put URL Up for Sale ********** AMERICAN BANKNOTE: Nonpayment Of Interest On Senior Notes --------------------------------------------------------- American Banknote Corporation announced that the applicable 30-day grace period for payment of interest on its 11 5/8% Senior Notes due August 1, 2002 has expired and that the company will not make the interest payment on the notes. The company's advisor, the Blackstone Group, continues to hold discussions with an informal committee of the 11 1/4% Senior Subordinated Note holders, who hold more than 85% of those notes, on the terms of a consensual restructuring converting all or a substantial portion of that debt to equity. There is no assurance that the company will be able to reach any agreement with the debt holders. American Banknote Corporation is a leading global full-service provider of secure transaction solutions in carefully selected markets along three major product groups: Transaction Cards & Systems, Printing Services & Document Management, and Security Printing Solutions. BOSTON CHICKEN: Seeks Approval of 4th Amendment To DIP Facility -------------------------------------------------------------- The Debtors seek the Court's approval of a Fourth Amendment to their DIP Financing Facility, pursuant to 11 U.S.C. Sec. 364. The Debtors suggest that Amendment No. 4 is necessary to continue the business operations in a manner that will enable management to sustain its business turn around plan and to pursue the various sale and investment opportunities presently being explored. As a general proposition, the Debtors explain to Judge Case, the terms of the amendment provide greater flexibility with respect to availability of previously segregated liquidity reserves. The terms of the amendment also make the Lenders' support the Debtors' request for an extension of their exclusivity periods explicit. As of August 27, 1999, the Debtors estimate that the aggregate outstanding principal amount of all Revolving Loans was $43,289,699.00. General Electric Capital Corporation continues to serve as the Administrative Agent; Bank Of America, N.A. continues to serve as the Collateral Agent. The current lending syndicate is comprised of Bank of America, N.A.; Fleet Business Credit Corporation; LaSalle National Bank; and Hour LLC, by Paloma Partners Company LLC, its Manager. (Boston Chicken Bankruptcy News Issue 16; Bankruptcy Creditors' Service Inc.) BOSTON CHICKEN: Taps Lazard Freres As Investment Banker ------------------------------------------------------- Following Alex. Brown's acquisition by Deutsche Bank, Barry W. Ridings and his team of professionals working on Boston Chicken's restructuring departed Deutsche and joined Lazard Freres & Co. LLC. BT Alex. Brown has said publicly that it will exit the restructuring advisory business. The Debtors are in the critical stages of their cases, and rather than start anew with a different group of advisors and consultants from BT Alex. Brown, who are totally unfamiliar with the Debtors, Debtors believe that the retention of Lazard is in the best interest of all concerned. Accordingly, the Debtors request that this Court grant this Application to retain Lazard. Lazard has agreed to provide, without duplication of the services previously provided by BT Alex. Brown, these generally described investment banking services: (a) A review and analysis of the Company's business, operations and financial projections, with the results communicated to the Company in writing and/or orally; (b) Evaluating the Company's debt capacity in light of its projected cash flows; (c) Assisting in the determination of an appropriate capital structure for the Company; (d) Determining a range of values for the Company on a going concern basis; (e) Advising the Company on tactics and strategies for negotiating with the holders of the Existing Debt Obligations (the "Lenders"); (f) Rendering financial advice to the Company and participating in meetings or negotiations with the Lenders in connection with any restructuring, modification or refinancing of the Company's Existing Debt Obligations; (g) Advising the Company on the timing, nature, and terms of new securities, other consideration or other inducements to be offered pursuant to the Restructuring; (h) Advising and assisting the Company in evaluating potential capital markets transactions, including public or private debt or equity offerings (a "Financing Transaction") by the Company, and, on behalf of the Company, evaluating and contacting potential sources of capital as the Company may designate and assisting the Company in negotiating such a Financing Transaction; (i) Assisting the Company in preparing documentation required in connection with the Restructuring of the Existing Debt Obligations; (j) Assisting the Company in identifying and evaluating candidates for a potential Business Combination, advising the Company in connection with negotiations and aiding in the consummation of a Business Combination including the undertaking of any appropriate financial analysis in connection therewith; (k) Advising and attending meetings of the Company's Board of Directors and its committees; (l) Providing testimony, as necessary, in any proceeding before the Bankruptcy Court; and (m) Providing the Company with other appropriate general restructuring advice. As consideration for Lazard's services, the Company agrees to pay: (1) A monthly fee of $150,000 per month for the period commencing from the date specified in any Order of the Bankruptcy Court approving the retention of Lazard (which date may be retroactive); A cash fee based on the Aggregate Consideration calculated as: Aggregate Consideration Incremental Fee Percentage ----------------------- -------------------------- Up to $100,000,000 1.25% $100,000,000 to $200,000,000 0.75% Greater than $200,000,000 0.25% subject to a $1,000,000 minimum. Aggregate Consideration means: (x) the total amount of cash and the fair market value (on the date of payment) of all of the property paid or payable (including amounts paid into escrow) in connection with the Business Combination (or any related transaction), including amounts paid or payable in respect of convertible securities, preferred equity securities, warrants, stock appreciation rights, option or similar rights, whether or not vested, plus (y) the principal amount of all indebtedness for borrowed money of the Company and any subsidiary or, in case of the sale of assets, all indebtedness for borrowed money assumed by the third party. For purposes of calculating Aggregate Consideration, (i) all shares will be deemed transferred where a Business Combination is effected by the transfer of shares, (a) constituting 30% or more of the then outstanding equity securities of or equity interest in the Company, or (b) possessing 30% or more of the then outstanding voting power of the outstanding equity securities of or equity interest in the Company, and (ii) the value of securities (whether debt or equity) that are freely tradable in an established public market will be determined on the basis of the average closing price in such market for the 10 trading days prior to the closing of the Business Combination (the "Valuation Date"); and the value of securities that have no established public market or other property will be the fair market value of such securities or other property on such Valuation Date and any restricted stock (i.e., stock in a public company not freely tradeable) received shall be valued at 85% of the public market price of such stock. "Aggregate Consideration" shall also be deemed to include pension liabilities and guarantees of monies borrowed assumed by the acquiror. If the Aggregate Consideration is subject to increase by contingent payments related to future events, the portion of our fee relating thereto shall be calculated by us in good faith and paid to us upon consummation of a Business Combination. (Boston Chicken Bankruptcy News Issue 16; Bankruptcy Creditors' Service Inc.) CAI WIRELESS: Zero Holdings By Tudor & Raptor --------------------------------------------- Cai Wireless Systems Inc. has reported that the following entities no longer hold any stock in the company: Tudor Investment Corporation, Paul Tudor Jones, II, Tudor BVI Futures, Ltd., Tudor Proprietary Trading, L.L.C., The Raptor Global Fund L.P., The Raptor Global Fund Ltd. and The Upper Mill Capital Appreciation Fund Ltd. DAILEY INTERNATIONAL: Acquired By Weatherford International, Inc. ----------------------------------------------------------------- On August 20, 1999, the United States Bankruptcy Court for the District of Delaware entered an order confirming the second amended Joint Plan of Reorganization for Dailey International, Inc. and its debtor subsidiaries. The effective date of the Plan was August 31, 1999. The Plan in its original form had been filed by the company and the debtor subsidiaries on May 28, 1999 along with petitions for relief under Chapter 11 of the Bankruptcy Code, in accord with the terms of the acquisition agreement between the company and Weatherford International, Inc. dated May 21, 1999. The acquisition agreement and the Plan had contemplated, among other things, that the company's outstanding $275 million 9 1/2% Senior Notes due 2008 indebtedness would be exchanged pro rata for $185 million in market value of Weatherford common stock and that all outstanding shares of common stock of the company would be exchanged for $10 million in market value of Weatherford common stock. On August 31, 1999, the transactions contemplated under the acquisition agreement were completed. At that point in time Dailey International Inc. became a wholly-owned subsidiary of Weatherford. On the effective date, as planned, $185 million in shares of Weatherford common stock were issued for distribution, pro rata, to the holders of Senior Notes in full and final satisfaction of all unpaid principal, interest and other claims owed under, or on account of, the Senior Notes. Shortly after the petitions were filed, the company and the debtors subsidiaries obtained an order of the Bankruptcy Court to pay their creditors all pre-petition claims and debts in the ordinary course of business, except for the holders of the Senior Notes. The Plan also provides that administrative and priority claims will be paid in full in cash. For full details on the transaction access http://www.sec.gov/cgi-bin/srch-edgar?0000950129-99-003985 on the Internet, without charge. EAGLE CAPITAL: Hearing on Disclosure Statement ---------------------------------------------- A hearing to consider approval of the Disclosure Statement for a plan of reorganization filed by the Chapter 11 Trustee, Walter O'Cheskey, will be held at the Courtroom of the Honorable Harold C. Abramson, US Bankruptcy Court, US Courthouse, 1100 Commerce Street, Dallas, Texas 76242 on October 12, 1:45 PM. ELDER BEERMAN: New Merchandising Head and Share Repurchase Plan --------------------------------------------------------------- The Daily News Record reports on August 30, 1999 that Elder- Beerman Stores Corp. was under pressure from an investment group to name a new head of merchandising, and to announce a $ 24 million share-repurchase plan in order to strengthen its business. Although the moves could be seen as a response to D3 Family Fund of Camas, Wash., a major shareholder that wants the company to fire top management or else put itself up for sale, Scott J. Davido, executive vice-president and CFO, said that was not the case. "These are decisions that were set into motion far in advance of the D3 filing. These are the best things for the company," he said referring to a Securities and Exchange Commission filing on Aug. 16. "The important thing is that we're committed to increasing shareholder value." D3 currently owns 5.3 percent of Elder-Beerman's stock. The Dayton, Ohio-based department and shoe store operator promoted Charles P. Shaffer to a newly created position of executive-vice president for merchandising and marketing. Shaffer, who joined Elder-Beerman in 1985, will report to Frederick J. Mershad, chairman and CEO, and will be responsible for all merchandising and sales promotion. Shaffer was most recently senior vice-president and GMM of cosmetics and home. The company said it believed the shares are "significantly undervalued" as it announced the two-year repurchase plan. In addition to Shaffer's appointment and the stock buyback, Elder-Beerman's turnaround efforts include: The rollout of a planner-distributor structure, already in place at three of its 13 merchandise divisions, to five more divisions this fall. The structure is expected to increase sales by allowing the store to be in-stock more often. An increased emphasis on moderate merchandise. Taking several steps to revitalize its credit card business. Increasing profitability with a new, smaller, more efficient store format. Focusing on teens with a new area, "The Zone." Continued pursuit of acquisitions. The company reported a loss of $ 1.3 million in the second quarter ended July 31, against earnings of $ 239,000 a year ago. Revenues rose 11.9 percent to $ 147.3 million from $ 131.6 million. Same-store sales at its 60-unit department store division slid 1.1 percent. FILENE'S BASEMENT: Receiving Shipments Again -------------------------------------------- Credit lines are opening up again for bankrupt Filene's Basement as factors and a credit reporting service are telling clients it's okay to resume shipping. As reported, Filene's Basement last week filed for Chapter 11 bankruptcy court protection in Boston. The distressed retailer on Tuesday received bankruptcy court approval of its $ 135 million debtor-in-posession financing facility with GE Capital Corp. and Paragon Capital, according to the retailer. A final hearing on the DIP package is set for Sept. 9. Having a DIP package in place puts the retailer on firmer financial ground because vendors are likely to ship merchandise when they know they'll get paid. FWT,INC: Applies To Employ Navigant Consulting ---------------------------------------------- The Official Unsecured Creditors Committee of FWT, Inc., is seeking to retain Navigant Consulting, Inc. as its financial advisors. Navigant's engagement will be limited to an investigation and examination of the transactions involving the sale of the debtor to FWT Acquisition, Inc. in November, 1997. GENEVA STEEL: Names New Operations Head --------------------------------------- American Metal Market reports on August 16, 1999 that Geneva Steel Co., Vineyard, Utah under Chapter 11 bankruptcy protection since Feb. 1, has brought in a new man to head its steelmaking operations and reassigned its former manufacturing vice president to a customer service position. Geneva Steel said late last week that its board of directors had approved the hiring of Birchel S. Brown as senior vice president of operations. At the same time, the company said, Timothy R. Clark, its current vice president of manufacturing, was assigned to the newly created post of vice president of customer service. Brown is a steel industry veteran with more than 33 years of steel manufacturing experience with both integrated and mini-mill plants. The majority of his career was spent with Inland Steel Co., Chicago. Most recently, he was senior vice president of steel and wire operations at Northwestern Steel & Wire Co., Sterling, Ill. At Geneva Steel, Brown will be responsible for directing the company's steel operations with "an emphasis on restoring profitability and improving customer service." Brown also will be involved in other finance-related issues at Geneva Steel, including working on the development of a team-based partnership among management, the United Steelworkers union and union- eligible employees. Clark will be in charge of pre- and post- manufacturing functions related to order fulfillment, including customer interface, inside sales, product development, planning, testing, distribution, transportation and shipping. GOLDEN STAR RESOURCES: Stock Ownership Reported ----------------------------------------------- Elliott Associates, L.P., a Delaware limited partnership, with sole voting & dispositive power over 1,185,000 shares of common stock of Golden Star Resources Ltd. holds 3.2% of the outstanding shares. Westgate International, L.P., a Cayman Islands limited partnership and Martley International, Inc., a Delaware corporation, hold the same number of shares as Elliott Associates but share voting and dispositive power with one another. Paul E. Singer and Braxton Associates, L.P., a Delaware limited partnership, which is controlled by Singer, are the general partners of Elliott. Hambledon, Inc., a Cayman Islands corporation, is the sole general partner of Westgate. Martley is the investment manager for Westgate. Martley expressly disclaims equitable ownership of and pecuniary interest in any common stock. Elliott beneficially owns a total of 1,185,000 shares of common stock, consisting of 290,000 shares of common stock held outright and warrants to purchase an additional 895,000 shares of common stock. Westgate and Martley together beneficially own a total of 1,185,000 shares of common stock, consisting of 290,000 shares of common stock held outright and warrants to purchase an additional 895,000 shares of common stock. Therefore, Elliott, Westgate and Martley together beneficially own an aggregate of 2,370,000 shares of common stock, consisting of 580,000 shares of common stock held outright and warrants to purchase an additional 290,000 shares of common stock. Elliott, Westgate and Martley's aggregate beneficial ownership of 2,370,000 shares of common stock constitutes 6.2% of all of the outstanding shares of common stock of Golden Star Resources Ltd. GOSS GRAPHIC: Expects To Emerge From Bankruptcy In 2 To 4 Months ---------------------------------------------------------------- Goss Graphic Systems, Inc. produces newspaper, insert, and commercial printing press systems. The company's net sales for the fiscal quarter ended June 30, 1999 decreased by 22.8% or $47.5 million to $160.6 million compared to the quarter ended June 30, 1998 when net sales were $208.1 million. Net sales for the first six months of 1999 were $309.9 million, a decrease of $36.3 million or 10.5 % from the first six months of 1998 when net sales were $346.2 million. Net losses for the period were $39.2 million and $55.6 million for the three- and six-month periods of 1999 compared to net losses of $10.0 million and $35.8 million for the same periods of 1998. On July 30, 1999 Goss, GGS Holdings, Inc. (its parent company), and a U.S. subsidiary filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court for the District of Delaware. Goss, its lenders under the prepetition bank credit facility, and holders of at least two-thirds of Goss's 12% Senior Subordinated Notes Due 2006 entered into a Forbearance, Lock-up and Voting Agreement dated July 28, 1999. Under that agreement, the lenders and the noteholders who are party to the agreement agreed to forbear from exercising their rights and remedies under the credit agreement and the indenture until the filing of the Chapter 11 case, and agreed to vote their claims in favor of a plan of reorganization. Under the agreement, the noteholders will exchange the $225 million principal amount of notes currently outstanding for a new $112.5 million note issue and certain new stock of GGS Holdings Inc. Certain of the company's lenders and Stonington will jointly provide an additional $100 million of liquidity and capital. The parties agreed to implement the agreement through a prearranged Chapter 11 proceeding initiated in the U.S. Bankruptcy Court for the District of Delaware. Goss's European and Asian subsidiaries are not included in the Chapter 11 proceeding. Goss has entered into a debtor-in-possession credit facility with certain of its prepetition bank lenders and the principal shareholder of its parent company, Stonington Partners. The DIP Facility provides for up to $50 million of financing. The Bankruptcy Court approved the DIP Facility on an interim basis on July 30, 1999. Goss says it expects to emerge from the Chapter 11 proceedings within the next two to four months. In the interim, the company plans to continue to pay employee wages, salaries and benefits as usual. The company will pay for the post-petition delivery of goods and services in the ordinary course of business. Under the restructuring plan, the claims of all creditors, including trade creditors, will either not be impaired by the plan or will be paid in full over time. IMPERIAL HOME DECOR: Financial Reports For 3 & 6 Month Periods -------------------------------------------------------------- Imperial Home Decor Group Inc. has two primary operating segments: wallcovering products and flexible vinyl films and sheeting. The wallcovering products segment includes residential and commercial wallcoverings and heat transfer paper. This segment operates worldwide but primarily in the United States, Canada, and the United Kingdom. The flexible vinyl films and sheetings product segment includes calendered, flexible PVC sheeting, printed sheeting and laminated products. This segment operates in the United States and Canada. The company as it currently exists is the result of the recapitaliza- tion of the company and the combination of its residential wall- coverings and PVC sheeting businesses with the wallcoverings businesses of Imperial. Before the recapitalization and combination, the company was substantially wholly owned by Borden and was known as Borden Decorative Products Holding, Inc. and Imperial was owned by Collins & Aikman Corporation. The company's results of operations for the six months ended June 27, 1998 include approximately 15 weeks of Imperial's results of operations due to the acquisition of Imperial in March 1998. Because of the recapitalization and Imperial acquisition, the company's results of operations and financial condition reported here are not necessarily indicative of the company's future results of operations. 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. A net loss of $10.0 million for the three months and $20.4 million for the six months ended June 26, 1999 were reported, compared to net loss of $7.4 million and $22.4 million for the comparable periods in 1998. The company's Integration Plan is expected to be complete by the end of 2000. The costs of that plan are expected to decrease over this period. The Integration Plan is intended to substantially improve company results of operations. IONICA PLC: Nortel Networks Seeks to Dismiss Case ------------------------------------------------- Nortel Networks plc is seeking an order dismissing the chapter 11 date of Ionica plc and staying examination or discovery of Nortel and its affiliated entities pending the determination of this motion. Nortel asserts that Ionica plc has no meaningful connection to the United States, it dies not reside in the U.S., does not have a domicile or place of business in the U.S. and does not have an economic interest in any property in the U.S. Secondly, the court should dismiss the case because the estate is diminishing and cannot be rehabilitated. And third, in view of Ionica's pending UK Administration and its lack of any business operations in or nexus to the US, this court should dismiss or suspend all proceedings in the Chapter 11 case under the principal of comity. Also, Nortel argues that the case was filed and prosecuted without the prerequisite good faith. JUMBOSPORTS: Order Extends Exclusivity -------------------------------------- The US Bankruptcy Court for the Middle District of Florida, Tampa Division, entered an order extending the time by which the debtors, JumboSports, Inc. must file a plan of reorganization. The date is extended through and including January 21, 2000. The debtors' exclusive right to file a plan of reorganization is extended through the earlier of the following dates: a)January 21, 2000 or b)Ten days after the date of the termination of the employment of Alfred Fasola, Michael Worrall, and Thomas Noonan. If the debtors file a plan on or before January 21, 2000, then they will have the exclusive right to obtain acceptances of any such filed plan through and including March 21,2000. If they file a plan after the termination of employment of the persons above describe then they shall continue to have the exclusive right to obtain acceptances of any such filed plan sixty days after the filing of such plan. LL KNICKERBOCKER: Attorney Chosen To Represent Committee -------------------------------------------------------- Leonard Shulman, managing partner of the firm Marshack Shulman & Hodges LLP has been chosen to represent the Usnecured Creditors' Committee in the LL Knicerbocker Co., Inc. bankruptcy case. The Committee was assembled to monitor the debtor's operations and formulate an exit strategy during the pendency of the case. LL KNICKERBOCKER: Stock Delisted; Involuntary Petition Filed ------------------------------------------------------------ LL Knickerbocker was notified by Nasdaq Listing Qualifications Panel that their common stock was delisted from the Nasdaq National Market effective on the close of business on August 25, 1999. In addition the company was informed thqat an involuntary petition in bankruptcy has been filed by three of its Far East creditors. LOEWEN: Seeks Extension of Exclusivity -------------------------------------- Against the backdrop of the size and complexity of the Debtors businesses, corporate structure and financing arrangements, and in light of the reorganization effort that must be completed, Loewen tells the Court that it is unrealistic to expect that any party -- whether the Debtors, any creditor or other party-in- interest -- would be in a position to formulate, promulgate and build consensus around a reorganization plan at this early juncture or in the near future. Accordingly, pursuant to 11 U.S.C. Sec. 1121(d), the Debtors request that their exclusive period during which to file a plan of reorganization be extended through February 29, 2000 and that their exclusive period during which to solicit acceptances of that plan be extended through April 28, 2000. The Debtors remind the Court of their progress to date during the first 3 months of their insolvency proceedings: (A) putting a $200 million DIP financing facility in place; (B) implementation of pre-petition cost-cutting measures; (C) assumption of key supply contracts and restoration of ordinary trade credit with vendors; (D) undertaking the review of more than 10,000 executory contracts to which the Debtors are parties; (E) formulation and proposal of a Key Employee Retention Program; and (F) establishing effective lines of communication with the Creditors' Committee and other parties in interest. The Debtors indicate that the Creditors' Committee lends their full support to the requested five-month extension of the exclusive periods. (Loewen Bankruptcy News Issue 11; Bankruptcy Creditors' Services Inc.) LOEWEN: Seeks Approval of Key Employee Retention Program -------------------------------------------------------- One of the keys to their successful restructuring, the Debtors say, is their employees -- the individuals who are intimately familiar with the Debtors' businesses and industries and who have the experience and knowledge necessary to revitalize the Company's performance and profitability. Retention of highly talented individuals who contribute specialized knowledge and skill in their respective areas of responsibility is critical to the reorganization effort. With the assistance of William M. Mercer, retained as their employee compensation consultants, and the approval of the Creditors' Committee, the Debtors propose their Key Employee Retention and Severance Program designed to encourage employees to remain in the Debtors' employ, assume additional responsibilities and facilitate the restructuring effort. The Debtors divide the Company's management into five Tiers: Tier Population Position ---- ---------- -------- I 14 Senior Corporate Executives II 74 Corporate Staff members III 4 Operations Country Management personnel IV 33 Cemetery Regional Operational Management V 1,146 Funeral Home Regional and Location Operations Management personnel To retain these Management Personnel during the course of their restructuring, the Debtors propose Retention Incentive Payments - approximating $3,000,000 in the aggregate -- equal to a percentage of each participant's annual salary. Additionally, the Debtors ask for the ability to pay up to $500,000 of additional Retention Inventive Payments on a case-by- case basis. To encourage employees to continue devoting their energies to improving the Debtors' business operations and financial performance, the Debtors propose: (A) a Corporate Incentive Plan paying a percentage of annual salary -- estimated to aggregate $1,900,000 to $3,900,000 -- for achieving budgeted financial performance goals for Fiscal 2000. (B) a Fiscal 1999 Operations Incentive Plan paying a percentage of annual salary -- estimated to aggregate $3,700,000 to $10,000,000 for Fiscal 1999 -- for achieving budgeted financial performance goals. (C) a Fiscal 2000 Operations Incentive Plan paying a percentage of annual salary -- estimated to aggregate $5,100,000 to $12,700,000 for Fiscal 2000 -- for achieving budgeted financial performance goals. To encourage employees responsible for the formulation and implementation of the Debtors' restructuring plan, either through confirmation of a plan of reorganization or a sale of substantially all of the Debtors' assets to a third party, the Debtors propose to pay approximately $1,700,000 of Confirmation Incentive Payments.(Loewen Bankruptcy News Issue 11; Bankruptcy Creditors' Services Inc.) MEDIA LOGIC: Meeting of Creditors --------------------------------- A bankruptcy case concerning the debtor corporation, Media Logic, Inc. was filed under Chapter 11 on November 12, 1998 and was converted to a case under chapter 7 on July 27, 1999. The meeting of creditors for the debtor will be held on September 27, 1999 at 9:30 AM in the Office of the US Trustee, Franklin Square Tower, 600 Main street, Suite 202, Worcester, MA 01608. MOA HOSPITALITY: Deteriorating Trend In Operating Results --------------------------------------------------------- Reporting a net loss for the three and six months period ended June 30, 1999 MOA Hospitality Inc. has shown lessened net income as well. Net income for the three months ended June 30, 1999 was $27,263 compared to $31,875 in the same period of 1998. The net loss for the three month period of 1999 was $1,241 compared to net income in the same time period in 1998 of $8,756. For the six month period of 1999 net income was $48,995, while in 1998 the six months reported net income was $57,534. Net loss in the 1999 six months was $5,149 compared to a net gain of 5,843 in the six months of 1998. As of June 30, 1999 MOA, directly and through subsidiaries, owned 117 lodging facilities in 38 states. The company owns a 100% interest in all but two of its properties and also operates all but thirteen of its motels, which are leased to third party tenants pursuant to operating leases. The company separately evaluates the performance of each of its motels. MOA has a $3.9 million mortgage note payable that originally matured on May 31, 1999. The note is secured by four motel properties. The bank holding the note extended the maturity date to July 15, 1999, however, currently the bank has indicated it does not desire to provide any further extensions. The company is in the process of seeking other financing. As of August 12, 1999, no firm financing commitments had been obtained. The company says it believes it has or will be able to obtain adequate resources to meet its near-term maturing debt and other obligations. Although, the deteriorating trend in operating results noted above could adversely affect the company's ability to meet its maturing debt obligations in 2004 and 2005, including the maturity of the $80 million 12% Senior Subordinated Notes in 2004. NEXTWAVE: Second Circuit Stays Plan Consummation ------------------------------------------------ The U.S. Court of Appeals for the Second Circuit in New York has further delayed NextWave Personal Communications Inc.'s reorganization efforts by granting the Federal Communications Commission's request for a stay blocking consummation of the company's reorganization plan. The Second Circuit also stayed enforcement of NextWave's $3 billion fraudulent conveyance judgment against the commission, pending an expedited appeal of a district court order upholding the award. (The Daily Bankruptcy Review and ABI Copyright c September 8, 1999) OLDENBURG BREWERY: Silver Creek Brewing Makes Offer --------------------------------------------------- Silver Creek Brewing Corp., Sellersburg, Ind., has offered $450,000 to buy the Oldenberg Brewery in Ft. Mitchell, Ky., according to Business First. Because Oldenberg filed for chapter 11 protection in June, the sale is subject to the bankruptcy court's approval. PHILIP SERVICES: Loss Deepens In Second Quarter ----------------------------------------------- With second-quarter revenue falling 37.5 percent, Philip Services Corp. posted a net loss of nearly $ 61.7 million vs. a first-quarter loss of $ 40.5 million and a loss of just $ 3 million in the same period last year. Depressed selling prices for ferrous scrap was cited as a main reason for the financial hemorrhage by Hamilton, Ontario,-based Philip Services, the parent of such U.S. scrap companies as Luria Brothers, Cleveland, Steiner-Liff Group, Nashville, Tenn., and Luntz Corp., Canton, Ohio. Philip has filed for protection from creditors under Chapter 11 of the U.S. bankruptcy law and similar protection under Canadian law (AMM, June 30). Philip Widman, chief financial officer, said that the second quarter "continued to be affected by the concerns of our customers and suppliers as we approached the end of (the) June reorganization filing." Widman added, however, that "with the financial reorganization under way, and the receipt of court approval on motions that provided for continued payments to ongoing trade suppliers, our situation has begun to stabilize." (American Metal Market - August 17, 1999) RAND ENERGY: Disclosure Statement Hearing ----------------------------------------- The continued hearing on the Disclosure Statement of Rand Energy Company is adjourned until September 17, 1999 at 1:30 PM. RHA/PRINCETON HOSPITAL: Case Summary & 20 Largest Creditors ----------------------------------------------------------- Debtor: RHA/Princeton Hospital 1800 Marcy Drive Orlando, Florida 32309 Court: US Bankruptcy Court Middle District of Florida Orlando Division Case: 99-00041 Filed:09/03/99 Debtor Attorney: Stichter, Riedel, Blain & Prosser, PA 110 E. Madison St. Suite 200 Tampa, FL 33602 Total Assets: $25,000,000 Total Liabilities: $59,606,511 Fixed, liquidated secured debt 49,100,000 - 2 holders Fixed, liquidated unsecured debt 11,506,511 - 544 holders Type of business: Hospital List of Creditors Holding 20 Largest Unsecured Claims: Creditor Amount -------- ------ New Care Hospital Corporation 1,125,000 Affiliated Princeton 416,564 General Electric Company 257,580 McKesson 212,853 Siemens Credit Corporation 134,600 Ameris Health Care Net 100,000 Cambo Medical Group 100,000 SEMI-TECH: Files for Protection From Creditors ---------------------------------------------- Semi-Tech Corporation ("Semi-Tech") announced today that it, along with two of its subsidiaries, filed for protection from creditors under Chapter 11 of the United States Bankruptcy laws on September 7, 1999. Semi-Tech's petition was filed in the United States Bankruptcy Court for the Southern District of New York shortly after two of its affiliates, Graeme Limited ("Graeme") and ISTM Investments (Barbados) Inc., filed similar petitions. Semi-Tech will continue to operate its business pending reorganization. The bankruptcy petition was triggered by the recent German bankruptcy filing of G. M. Pfaff A.G. ("Pfaff"), a German subsidiary of The Singer Company, N.V. Semi-Tech, through Graeme, owns 49.6% of Singer's outstanding common stock. Under the indenture governing Semi-Tech's public debt, a bankruptcy filing by a significant subsidiary of Singer, including Pfaff, may be construed as an "event of default", thereby permitting Semi-Tech's creditors to accelerate the debt obligation. Semi-Tech Corporation is a Canadian-based multinational company engaged in the global marketing and distribution of consumer products for the home, principally through its subsidiaries and affiliates. Semi-Tech's shares are listed on The Toronto Stock Exchange (Class A: SEM.A, Class B: SEM.B). SERVICE MERCHANDISE: Seeks To Grant Protection To Federal Home -------------------------------------------------------------- Federal Home Life Insurance Company is the holder of a $3,600,000 loan to H.J. Wilson Co., Inc., one of Service Merchandise's debtor-affiliates, evidenced by a 1995 Promissory Note and secured by a Mortgage, Assignment of Rents and Leases and Security Agreement. Federal has made it clear that it will move for relief from the automatic stay unless it receives adequate protection of its security interests. The Debtors have concluded that they need Federal's Collateral. Accordingly, the Debtors ask Judge Paine to find that Federal's interests will be adequately protected if the Debtors (i) pay interest on the loan each month at a rate of $23,231, (ii) insure the property and pay all real estate taxes, and (iii) respond to Federal's reasonable information requests. (Service Merchandise Bankruptcy News Issue 9; Bankruptcy Creditors' Service Inc.) SHOE CORP: Receives Financing ----------------------------- Shoe Corp. of America Columbus, Ohio, has entered into a debtor- in-possession financing agreement with its lenders; the agreement extends through the end of the year financing to enable the company to implement its recovery plan, according to Business First. Shoe Corp., which operates licensed shoe departments in specialty and department stores, filed for chapter 11 in June. SIRENA APPAREL GROUP: Seeks To Establish Bar Date -------------------------------------------------------------- The Sirena Apparel Group, Inc. seeks a court order establishing December 6, 1999 as a bar date for the filing of proofs of claim and proofs of interest. SYSTEMSOFT CORP: Continuance of Hearing On Disclosure Statement --------------------------------------------------------------- The emergency hearing on the Disclosure Statement of the debtor, Systemsoft Corporation, will be continued until October 9, 1999 at 2:00 PM. THORN APPLE VALLEY: Assets Sold To IBP, Inc. For $109 Million ------------------------------------------------------------- On August 26, 1999, Thorn Apple Valley, Inc. completed the sale of substantially all of its assets to IBP, Inc. The consideration for the transaction was approximately $109 million, which was used to repay certain creditors of Thorn Apple Valley and to pay certain costs and expenses associated with its bankruptcy proceeding. IBP also assumed certain liabilities of Thorn Apple Valley and its subsidiaries in connection with the transaction. Thorn Apple Valley had filed a voluntary petition for relief under Chapter 11 of the Federal Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Michigan, Southern Division on March 5, 1999. URL: Owners Put URL Up for Sale ------------------------------- The owners of Endpoint! put their URL, http://www.isales.com,up for sale yesterday in an effort to avoid bankruptcy, according to a newswire report. The Cupertino, Calif., developer of sales automation software is facing a heavy debt load, increased competition and the loss of several key employees. In addition, costs associated with a major glitch in a supplier's software package have complicated the financial situation. Endpoint! President Neal Amsden said that its URL may be one of its most valuable assets. He said the isales.com URL "could work for hosted sales software, an auction site, e-commerce tools or any number of general online retail ventures. It's a great URL." Endpoint! will auction the URL late this month. ********** 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. 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