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/raid1/www/Hosts/bankrupt/TCR_Public/990917.MBX T R O U B L E D C O M P A N Y R E P O R T E R Friday, September 17, 1999, Vol. 3, No. 180 Headlines AMEDISYS: Expects Improvement Despite Losses CAI WIRELESS SYSTEMS: Entities Report August 24th Sale Of Stock CAPITAL RESOURCES: Trustees Seeking Dismissal of ClaimsCITYSCAPE FINANCIAL: Intellectual Property Assignment Agreement COSTILLA ENERGY: Involuntary Stock Sales Change Liedtke Holdings DOW CORNING: 1999 Asian Sales Improve/U.S. Sales Weaker DEVLIEG-BULLARD: Order Authorizes Secured Post-Petition Financing FACTORY CARD OUTLET: Reports Second Quarter Results FEDCO: Committee Seeks To Terminate Exclusivity FEDCO: Order Approves Dayton Hudson Agreement GOSS GRAPHIC: Disclosure Statement and Plan HURRICANE HYDROCARBONS: Works On Restructuring IRIDIUM: Shifts Case To New York LLOYD'S SHOPPING CENTERS: Seeks To Employ Jacobowitz and Gubits METALLURG: Financial Information Reported For Quarter Ended 7/31 NATIONSWAY: Auctions Off Trucks, Trailers and Equipment NEUROMEDICAL SYSTEMS: Seeks To Increase Exclusivity Period NEXTWAVE: Can Companies or FCC Bid on Air Waves? NYEC INC: Confirmation Hearing Adjourned To October 13 PHILIP SERVICES: Disclosure Statement PRESLEY COMPANIES: General William Lyon Holds 6,189,589 Shares PSI INDUSTRIES: Agreed Final Financing Order RIGCO NORTH AMERICA: Taps Normarine Offshore Consultants RUSSELL CAVE: Joint Liquidating Plan of Reorganization SINGER COMPANY NV: Case Summary SINGING MACHINE CO: Sales Increase 58% From Previous Year SUBMICRON: Court Approves Asset Sale Bidding Procedures TELEPAD CORP: Plan of Reorganization Filed VENCOR: Creditors Consider Plan Exchange Debt For Stock WESTERN FIDELITY FUNDING: Court Grants Motion to Operate WORLDWIDE DIRECT: Seeks To Release Security Interests BOND PRICING FOR WEEK OF SEPTEMBER 13 ********** AMEDISYS: Expects Improvement Despite Losses -------------------------------------------- Amedisys, Inc. is a leading multi-regional provider of fully integrated alternate-site health care services. The company offers the following services: home health nursing services; infusion therapy; and ambulatory surgery centers. Amedisys Inc. operates 69 offices within a network of subsidiaries in the south and southeastern United States. For the three months ended June 30, 1999 the company's revenues were $28,758 as compared to the June 30, 1998 quarter revenues of $7,539. The net loss realized in the 1999 quarter was $1,455 compared to the 1998 same period net loss of $1,903. In the six months ended June 30, 1999 company revenues were $57,762 as compared to revenues of $15,681 in the same period of 1998. The net loss in the six months ended June 30,1999 was $3,953 while the six month period loss in 1998 was $4,424. Amedisys says it expects the quarterly losses to decrease throughout 1999 as the full benefit of the restructuring efforts are realized. CAI WIRELESS SYSTEMS: Entities Report August 24th Sale Of Stock --------------------------------------------------------------- As of August 24, 1999 the following entities, having sold all shares in a private transaction, no longer beneficially own any shares of common stock of CAI Wireless Systems Inc. On August 24, 1999 the following transactions were conducted: Shares sold by Resurgence Asset Management, L.L.C., 582,947 at a total cost of $16,322,516 and 386,687 at a total cost of $10,827,236. Shares Sold by Re/Enterprise Asset Management, L.L.C., 628,206 at a total cost of $17,589,768. Shares Sold by M.D. Sass Re/Enterprise International, Ltd., 87,684 at a total cost of $2,455,152. Shares Sold by Kingstreet Limited, 7,792 at a total cost of $218,176. Shares Sold by M.D. Sass Corporate Resurgence Partners, L.P., 582,947 at a total cost of $16,322,516. Shares Sold by M.D. Sass Corporate Resurgence International, Ltd., 299,003 at a total cost of $8,372,084. Shares Sold by M.D. Sass Re/Enterprise Partners, L.P., 140,459 at a total cost of $3,932,852. Shares Sold by M.D. Sass Re/Enterprise - II, L.P., 32,806 at a total cost of $918,568. Shares Sold by M.D. Sass Associates, Inc., 628,206 at a total cost of $17,589,768. Shares Sold by M.D. Sass Management, Inc., 87,684 at a total cost of $2,455,152. Shares Sold by M.D. Sass Investors Services, Inc., 454,941 at a total cost of $12,738,348. Shares Sold by M.D. Sass Associates, Inc. Employee Profit Sharing Plan, 6,526 at a total cost of $182,728. Shares Sold by the Resurgence Parallel Fund, LLC., 20,356 at a total cost of $569,968. Shares Sold by the M.D. Sass Re/Enterprise International Irrevocable Trust II, 7,792 at a total cost of $218,716. CAPITAL RESOURCES: Trustees Seeking Dismissal of Claims ------------------------------------------------------- U.S. bankruptcy trustees are seeking dismissal of claims made by a Kailua company, saying there is no hope for financial reorganization. Capital Resources International filed for Chapter 11 bankruptcy protection in January, a move aimed at forestalling eviction from the Kailua Town Center. The company was evicted two weeks ago, still owing $ 240,000 in back rent and promised improvements to the property. Attorneys for the company, now located in Waimanalo, say they won't contest the bankruptcy dismissal, an action U.S. Trustee Curtis Ching said is necessary because the company has no assets to liquidate. Capital Resources claims to have contracts worth $ 275 million to clean up oil spills in Azerbaijan, a former Soviet republic. CITYSCAPE FINANCIAL: Intellectual Property Assignment Agreement --------------------------------------------------------------- Cityscape Financial Corp., n/k/a AMC Financial Inc. and Cityscape Corp. seek approval and authorization to enter into a certain Intellectual Property Assignment Agreement by and among the debtors and Framework, Inc. pursuant to which Cityscape will assign its right, title and interest in certain loan origination computer software to Framework. CSC will reject the Framework Agreements and Framework will waive all claims against the debtors. (approximately $100,000) COSTILLA ENERGY: Involuntary Stock Sales Change Liedtke Holdings ---------------------------------------------------------------- The changes in the percentage of beneficial ownership of Costilla Energy common stock reported here are the result of shares beneficially owned by Cadell S. Liedtke which have been involuntarily sold due to financing arrangements with Prudential Securities Incorporated. As of August 31, 1999, Mr. Liedtke beneficially owned 828,460 shares of common stock constituting 5.9% of the total issued and outstanding shares of common stock of the company. Mr. Liedtke has the sole power to vote or to direct the vote and the sole power to dispose or direct the disposition of all of the shares of common stock attributed to him except for 60,000 shares held by the Liedtke Foundation. Mr. Liedtke is a director of the Liedtke Foundation and shares voting and dispositive power over the shares of common stock owned by the Liedtke Foundation with the other directors of the Liedtke Foundation. Cadell S. Liedtke financed certain purchases of shares of common stock under a brokerage account arrangement that he has with Prudential Securities Incorporated through a Command Account Margin Agreement. The Marion and Cadell S. Liedtke Family Charitable Foundation, through which Mr. Liedtke beneficially owns shares, has also entered into an Account Agreement with Prudential. To further secure Mr. Liedtke's borrowings under the Account Agreement, he has entered into a Pledge Agreement with Prudential whereby he pledged certain of the shares of common stock owned by him. Mr. Liedtke has transacted sales in shares of common stock during the sixty prior days, each of which was an involuntary sale transaction effected by Prudential under the financing arrangements described above. Each of these sales was transacted through a broker on the public market. 07/01/99 40,000 .119 07/02/99 40,000 .119 07/02/99 40,000 .119 07/06/99 40,000 .1638 07/07/99 40,000 .1492 07/07/99 40,000 .1492 07/08/99 40,000 .1492 07/09/99 40,000 .1492 07/12/99 40,000 .1492 07/13/99 20,000 .1492 07/13/99 40,000 .1492 07/14/99 40,000 .1492 07/15/99 40,000 .1492 07/16/99 40,000 .1492 07/22/99 40,000 .1492 07/23/99 40,000 .1492 07/26/99 40,000 .1492 07/29/99 40,000 .1492 07/30/99 40,000 .1492 08/02/99 29,000 .1492 08/03/99 30,000 .1492 08/04/99 25,000 .1492 08/04/99 10,000 .1502 08/04/99 40,000 .119 08/05/99 15,000 .1492 08/06/99 25,000 .1492 08/06/99 5,000 .1492 08/09/99 15,000 .1492 08/10/99 100,000 .1205 08/11/99 40,000 .1492 08/11/99 50,000 .1492 08/19/99 10,000 5/32 08/19/99 10,000 5/32 08/23/99 10,000 3/32 08/24/99 10,000 3/32 08/25/99 10,000 3/32 08/27/99 10,000 3/32 08/27/99 10,000 1/8 08/30/99 10,000 3/32 08/31/99 10,000 .09375 DOW CORNING: 1999 Asian Sales Improve/U.S. Sales Weaker ------------------------------------------------------ Net sales of Dow Corning Corporation for the six months ended June 30, 1999 were $1,281.7 million, essentially unchanged from net sales of $1,280.0 million for the six months ended June 30, 1998. Improved sales in the Asia operating segment, attributable to a partial recovery from the economic turmoil experienced during the first half of 1998, were offset by a weakening of sales in Europe and the Americas. The lower U.S.-dollar sales for Europe in 1999 compared to 1998 resulted from lower reported U.S.-dollar sales due to the strengthening of the U.S. dollar exchange rate against European currencies. The decline in net sales in the Americas operating segment was attributable primarily to a continued decline in demand for semiconductor- grade silicon. Net income for the six months ended June 30, 1999 was $47.3 million as compared to net income for the same period in 1998 of $100.8 million. DEVLIEG-BULLARD: Order Authorizes Secured Post-Petition Financing ----------------------------------------------------------------- The debtor, Devlieg-Bullard, Inc. is seeking to obtain post- petition financing under a commitment of up to $30 million under an agreement among The CIT Group/Business Credit, Inc., BNY Factoring, LLC, any additional financial institutions which become parties to that Credit Agreement and CITBC, as agent; and for the debtor to execute revolving loan promissory notes and term loan promissory notes. FACTORY CARD OUTLET: Reports Second Quarter Results --------------------------------------------------- Factory Card Outlet Corp. announced today results for its second quarter ended July 31, 1999. Net loss for the second quarter was $1.8 million or ($0.23) per diluted share, compared to a net loss of $0.8 million or ($0.11) per diluted share for the fiscal quarter ended August 1, 1998. The Company's net loss for the latest fiscal quarter included $2.0 million or ($0.27) per diluted share for professional fees and other costs related to the reorganization of the company. Sales for the second quarter ended July 31, 1999 decreased approximately 5.0% to $52.2 million from $54.7 million for the comparable quarter last year. During the quarter, the Company closed 27 stores, which closings contributed to this sales decrease. On a comparable store basis, sales for the second quarter decreased 1.5%. Comparable store sales continue to be adversely impacted by the reduced flow of merchandise resulting from issues associated with the Company's liquidity and the chapter 11 cases. Net loss for the six months ended July 31, 1999 was $17.8 million or ($2.38) per diluted share compared to a net loss of $0.2 million or ($0.03) per diluted share for the comparable six months last year. The Company's net loss for the six months included $14.6 million or ($1.94) per diluted share for 27 stores closing, professional fees and other costs related to the reorganization of the company and $1.3 million or ($0.17) per diluted share for the early retirement of amounts outstanding under a prior credit agreement. Sales for the six months rose to $104.8 million from $104.6 million for the comparable six months last year. On a comparable store basis, sales for the six months decreased 2.0%. Comparable store sales were adversely impacted by the reduced flow of merchandise resulting from issues associated with the Company's liquidity and the chapter 11 cases. Factory Card Outlet is a chain of company owned superstores offering an extensive selection of greeting cards, gift wrap, balloons, party supplies and other special occasion merchandise at everyday value prices. FEDCO: Committee Seeks To Terminate Exclusivity ----------------------------------------------- The Official Committee of Creditors Holding general unsecured claims seeks an order terminating the period during which only the debtor has the exclusive right to file and solicit acceptances in connection with a plan of reorganization. The Committee claims that the debtor's refusal to pursue a plan which commits to seek confirmation of the plan pursuant to the "cram down" provisions of the code if the class containing the debtors' members class votes to reject the plan exposes the creditors to the risk that the plan is unconfirmable and there may be substantial delays and additional costs associated with confirmation proceedings for an alternative plan. The Committee seeks to file its own plan which would be identical to the debtor's plan except that it would provide that the Committee would seek to confirm the plan over the objection of the member class. The Committee states that the debtor has no response to the Committee's inquiry as to what the debtor intends to do if the member class votes to reject the plan. "The debtor told the Committee that it will cross that bridge if and when it comes to it and that the Committee should trust the debtor to do the right thing. This position is unreasonable and unfair to creditors because it could result in substantial and unnecessary additional cost, reduced distributions to creditors and delays in payment." FEDCO: Order Approves Dayton Hudson Agreement --------------------------------------------- By order of the US Bankruptcy Court, Central District of California, Judge Alan M. Ahart, dated September 10, 1999, the debtor is authorized to enter into an agreement with Dayton Hudson for the sale of substantially all of the debtor's assets. GOSS GRAPHIC: Disclosure Statement and Plan ------------------------------------------- The debtors, Goss Graphic Systems, Inc., et al. are producers of newspaper and insert printing press systems and producers of commercial printing press systems. Goss' core business is the production of newspaper printing press systems. The purpose of the plan is to restructure the debtors' current lending facilities to provide the debtors with the ability to emerge from bankruptcy with the liquidity needed to move forward in their business activities. The debtors believe that the reorganization contemplated by the plan is in the best interests of their creditors and equity holders. The debtors, Stonington, certain pre-petition lenders and certain members of the pre-petition Committee and certain other holders of the Old Notes entered into a Forbearance, Lock-Up and Voting Agreement with respect tot he terms of the company's proposed plan of reorganization. A copy of both the Lock-Up Agreement and the underlying term sheet will be filed with the Bankruptcy Court. According to certain provisions of the Lock-Up Agreement the parties agreed that: Holders of the Old Notes would receive $112.5 million in New Notes and 3.25 million shares of the New Holdings Common Stock Stonington will make a $50 million capital contribution to the company Stonington would receive under the plan 6.75 million shares of the New Holding s Common stock The company would obtain a $50 million DIP financing facility funded by Stonington in the amount of $25 million and certain of the Pre-petititon Lenders in the amount of $25 million. Under the plan, holders of equity interests in all three debtors will receive no distribution. Treatment of Classes The treatment of classes with claims in Holdings is summarized as follows: Bank Secured Claims (Class H2) - $200M - Treated as Class S2- impaired. The treatment of Classes is Systems is summarized as follows: Class S2 claims Bank Secured Claims - $200 M - projected recovery: Trance B Revolving Credit Facility and the term loan facility - impaired. Class S4 General Unsecured Claims - $218M - projected recovery: 100% over nine months or in the ordinary course as comes due. Impaired. Class S5 claims - Old Note Claims - $233 M - projected recovery: $112.5 million in New notes plus 3.25 million share of New Holdings Common Stock, subject to dilution by the Management Equity. Impaired. The treatment of Classes holding claims in Realty is summarized as follows: Class R2 claims - LaSalle secured claims $25M - paid in full - unimpaired. Class R4 claims - Bank Unsecured Claims $200 M - treated as Class S2. Impaired. HURRICANE HYDROCARBONS: Works On Restructuring ---------------------------------------------- Hurricane Hydrocarbons Ltd., Calgary, Canada, said yesterday that it has developed a plan with bondholders to convert its large debts to common shares with the hope of emerging from bankruptcy as a stronger company, according to a newswire report. The company, known for its oil production operations in Kazakhstan, will file its plan in court on Sept. 20. The restructuring agreement, initiated in May after attempts to sell the company failed, was reached with a group holding two-thirds of the company's $175 million worth of Canadian and U.S. dollar- denominated bonds. Last month Hurricane said its cash flow has improved in recent months to a point where it would likely renegotiate the deal in its favor, but not until it completed the agreement with bondholders the Canadian Companies' Creditors Arrangement Act. IRIDIUM: Shifts Case To New York -------------------------------- The New York Times reports on September 16, 1999 that Iridium L.L.C., the first global satellite phone network, has moved its Chapter 11 bankruptcy proceedings to New York from Delaware. The move, approved on Monday in Federal Bankruptcy Court in Manhattan, is a concession to Iridium's bondholders. The Washington-based company, whose operations are supported by Motorola Inc., filed for bankruptcy last month in Delaware, shortly after a group of its bondholders sought an involuntary filing in New York. While there are not big differences between Delaware and New York bankruptcy law, the advantage for bondholders is that most of the big holders are in New York. Iridium has defaulted on $1.55 billion in bank loans, after failing to lure enough users to its 66-satellite global phone network. LLOYD'S SHOPPING CENTERS: Seeks To Employ Jacobowitz and Gubits --------------------------------------------------------------- The debtor, Lloyd's Shopping Centers, Inc., seeks authorization to employ Jacobowitz and Gubits, LLP as special tax counsel for the debtor. The firm will represent the debtor solely in connection ith pending and future proceedings to reduce real property assessed valuations and taxes for the shopping centers. The debtor claims that these services are essential t o the liquidation of claims for real property taxes, and are essential tot he debtor's success in confirming and consummating a plan of reorganization that will be in the best interests of the estate and its creditors. METALLURG: Financial Information Reported For Quarter Ended 7/31 ---------------------------------------------------------------- Metallurg Inc. is a leading international producer and seller of high quality metal alloys and specialty metals used by manufacturers of steel, aluminum, superalloys, titanium, chemicals and other metal consuming industries. The company operates in one significant industry segment, the manufacture and sale of ferrous and non-ferrous metals and alloys. It is organized geographically, with its core production facilities in the United States, the United Kingdom and Germany supported by a worldwide sales network. For the quarter ended July 31, 1999 the company's revenues were $116,052 with net losses of $3,091. In the six months ended on that date revenues were $233,865 and net losses $13,319. NATIONSWAY: Auctions Off Trucks, Trailers and Equipment ------------------------------------------------------- Buyers lined up to look over nearly 1,800 trucks and trailers and nearly 1,400 pieces of shop equipment at the Commerce City hub of bankrupt trucking company NationsWay on Tuesday. The terminal was already sold for $ 6 million in federal bankruptcy court in Phoenix, and liquidators have to get the property off the premises in two weeks. The court will hand out the auction's proceeds to creditors. The NationsWay Transport terminal in Phoenix was sold for $ 8 million, and the Harrisburg, Pa., terminal was sold for $ 4.1 million. The company, founded by Colorado Rockies co-owner Jerry McMorris, filed for Chapter 11 bankruptcy in May and then for complete liquidation. About 3,500 workers, including as many as 1,000 in Colorado, lost their jobs when the company shut down. About 40 former NationsWay employees are suing McMorris and nine other company executives to collect back wages. Employees are considered unsecured creditors, which means other creditors will get their money first. Many of the bidders at the Commerce City auction were owners of smaller companies looking for deals. "An opportunity like this doesn't come along every day," said Bill Huebner, president of Ace Steel and Recycling of Rapid City, S.D. Huebner planned to buy 20 or 30 trailers and use some of them as storage sheds. He was waiting for the bids to go down. Roger Waldner, owner of Sioux Falls Cartage in Sioux Falls, S.D., said he was amazed at the volume of rolling stock that NationsWay, the largest privately held U.S. trucking company, had in its inventory. "What we do in a year's worth of revenue, they did in an hour," Waldner said. The auctioneers, Taylor & Martin Inc. of Freemont, Neb., will go to other NationsWay hubs in Los Angeles, Sacramento, Calif., Salt Lake City and Portland, Ore. NEUROMEDICAL SYSTEMS: Seeks To Increase Exclusivity Period ---------------------------------------------------------- The debtor, Neuromedical Systems, Inc. seeks to increase the debtor's exclusive period to file a plan and solicit acceptances thereof. Prior to the Petition Date, the debtor operated as a healthcare technology company supplying screening and equipment and services to laboratories. As a result of escalating losses, the debtor entered into a purchase agreement with AutoCyte, Inc. pursuant to which AutoCyte agreed to purchase the debtor's intellectual property and certain related assets for cash and publicly traded stock worth an aggregate of approximately $13.8 million as of the Petition Date. The sale was consummated on May 17, 1999. The debtor states that it has made substantial progress toward formulating the essential elements of a consensual plan of reorganization supported by the Creditors' Committee. The debtor claims that the effect of an extension of the debtor's exclusivity periods will be to encourage the consensual resolution of outstanding issues and frustrate the efforts of any rogue creditors to disrupt on-going negotiations. The debtor is currently engaged in negotiations with the Creditors' Committee and with certain creditors which may affect the structure of the debtor's plan of reorganization; and the debtor believes that it may be able to conclude such negotiations within 30 days. The debtor requests that the court enter an order extending the exclusivity period to file a plan by thirty days, to October 13, 1999, and extending the exclusivity period to solicit acceptances to the plan by thirty days, to December 13, 1999. NEXTWAVE: Can Companies or FCC Bid on Air Waves? ------------------------------------------------ Gannett News Service reports on September 14, 1999 that NextWave Telecom Inc. is the focal point of what could result in national policy on how to allocate radio spectrum held by companies trying to reorganize their finances in bankruptcy court, an analyst said Monday. At issue: Whether the air waves NextWave Telecom Inc. in Hawthorne bought in 1996 for $ 4.7 billion at a Federal Communications Commission auction can be bid on by many companies or if the FCC alone can decide who can claim it. NextWave, however, says none of this will happen because it intends to both emerge from Chapter 11 bankruptcy court protection and retain the radio waves spectrum it bought three years ago. The company is scheduled to file a brief Tuesday with the U.S. Court of Appeals for the Second Circuit in Manhattan to stop efforts by the federal government to force it to relinquish its spectrum. In August, Nextel Communications in Reston, Va., announced that it reached an agreement with the FCC staff and the Justice Department to obtain NextWave's spectrum, entangled in bankruptcy court proceedings. The deal drew criticism from the Cellular Telecommunications Industry Association, a major wireless trade group. CTIA President Thomas Wheeler in a letter to FCC Chairman William Kennard said CTIA members would be adversely affected if the FCC staff gave one company an inside track to valuable spectrum because it "secretly negotiated an agreement with a single party" with no public notice of the plan. NextWave successfully bid $ 4.7 billion for the radio spectrum in 1996 but later argued, while under the protection of bankruptcy reorganization laws, that the value of its bid was reduced by the government when the FCC made more spectrum available. Judge Adlai S. Hardin Jr. of U.S. Bankruptcy Court agreed and ruled that NextWave's spectrum was worth $ 1.023 billion. The FCC continues to say that NextWave still owed $ 3.7 billion more and that if the company could not pay, it should forfeit its licenses. Nextel has said that it would be willing to pay $ 2.1 billion for NextWave's spectrum. It's common for start-up telecommunications and Internet companies to proceed on the idea that they will increase in value and their backers will sell it for huge profits. NYEC INC: Confirmation Hearing Adjourned To October 13 ------------------------------------------------------ The hearing to consider confirmation of the Second Amended Plan of Reorganization (Liquidation) jointly proposed by the debtors and the official Committee of Unsecured Creditors previously scheduled for September 9, 1999 at 2:00 PM has been adjourned to October 13, 1999 at 2:00 PM. PHILIP SERVICES: Disclosure Statement ------------------------------------- The debtors, Philip Services (Delaware) Inc., et al. seek approval of the debtors' Disclosure statement and approval of the solicitation procedures for confirmation of the plan and approval of a new hearing date for confirmation of the plan. Philip is an integrated metals recovery and industrial services company, which provides metals recovery and processing services, by-products recovery, and industrial outsourcing services to major industry sectors from over 230 locations across North America and Europe. The company's primary base of operations is in the US. Philip's revenues for the year ending December 31, 1998 were approximately $2 billion. AS of March 31, 1999, Philip and its direct and indirect subsidiaries reported total assets of approximately $1.13 billion and total liabilities of approximately $1.56 billion. The debtors are seeking a court order confirming that the debtors are not required to solicit votes from the Common Stockholders and securities class action claimants. A hearing with respect to the motion will be held on September 21, 1999. The debtors request that November 3, 1999 at 9:30 AM be set as the date for the confirmation hearing. PRESLEY COMPANIES: General William Lyon Holds 6,189,589 Shares -------------------------------------------------------------- General William Lyon beneficially owns an aggregate of 6,189,589 shares of Series A common stock, representing approximately 17.4% of the total number of shares of Series A common stock and approximately 11.7% of the total number of shares of Series A and Series B common stock of Presley Companies outstanding as of August 10, 1999. Of the 6,189,589 shares of Series A common stock beneficially owned by Mr. Lyon, 750,000 are shares that he has the right to acquire under to stock options granted by the company to him in 1994 in respect of his service as a director of the company. William Lyon Homes, Inc., a corporation which is controlled by Mr. Lyon, has entered into separate Stock Purchase and Sale Agreements with GS Credit Partners, L.P., ING (U.S.) Capital, L.L.C., and The Chase Manhattan Bank, as Trustee for First Plaza Group Trust, which provide for the purchase by WL Homes from such entities of an aggregate of 9,434,813 shares (subject to adjustment) of Series B common stock of the company, for a cash price of $0.655 per share. Presley Companies' Series B common stock is convertible on a share for share basis into shares of the company's Series A common stock. The consummation of the transactions contemplated by the Series B Stock Purchase Agreements is subject to numerous terms and conditions, including but not limited to the consummation of the transactions contemplated by a Restated Letter of Intent dated July 15, 1999, between the company, Presley Homes, a California corporation, and WL Homes. Mr. Lyon disclaims beneficial ownership of the company's Series A common stock into which the Series B shares are convertible until such time as the conditions set forth in the Series B Stock Purchase Agreements have been satisfied and the closing of the transactions contemplated by the Series B Stock Purchase Agreements has occurred. Mr. Lyon has the sole power to vote, or to direct the vote, and the sole power to dispose or direct the disposition, of all 6,189,589 shares of Series A common stock owned by him. On August 12, 1999, he sold an aggregate of 2,500,000 shares of Series A common stock for a cash price of $0.65 per share. Such sales were effected through privately-negotiated sale transactions not involving a broker or dealer. PSI INDUSTRIES: Agreed Final Financing Order -------------------------------------------- As of the Petition Date, the principal sum of approximately $6 million plus interest was due and payable by the debtor to LaSalle National Bank of Chicago. The debtor requires financing of up to approximately $700,000 in order to conduct its ongoing business. By order of the court entered September 3, 1999, the court approves the financing as agreed to by the Bank. The debtor and the Bank have agreed to the entry of this order. RIGCO NORTH AMERICA: Taps Normarine Offshore Consultants -------------------------------------------------------- The debtors, RIGCO North America, LLC and its debtor affiliates seek authorization to employ and retain Normarine Offshore Consultants (USA) Inc. The debtors seek to employ the firm to value the debtors' two semi-submersible drilling rigs, and to provide expert testimony concerning that valuation. Subject tot he court's approval, Normarine will charge a flat fee of $2,000 for its services in relation to the appraisal and an hourly rate of $325 for services in relation to testifying regarding the appraisal. RUSSELL CAVE: Joint Liquidating Plan of Reorganization ------------------------------------------------------ The plan of Russell Cave Company, Inc. f/k/a The J. Peterman Company is premised on the continuation and completion of the orderly liquidation of all assets of the debtor as well as the prosecution of Causes of Action. With respect to the existence of specific Causes of Action, the debtor's statement of financial affairs reflects numerous transfers by the debtor to other persons, including insiders, prior to the Petition Date, a substantial number of which might be subject to avoidance and recovery as preferences. According to the Statement, there are more than $12 million o f transfers involving approximately 250 different recipients. The credit card processors have withheld from the debtor as yet undetermined sums thought to be in excess of $1 million from sales of the debtor's inventory in order to satisfy expected chargeback claims. The Committee is currently investigating whether any causes of action exist against Heller Financial, inc. The auction sale of substantially all of the debtor's assets was held on march 5, 1999. The highest and best offer was from Paul Harris Stores, Inc. for the total purchase price of $10 million. Subsequent tot he closing Heller Financial received payment in full of its secured claim in the total amount of $5,161,560. Treatment of Claims Administrative Expenses may total as much as $722,831, and unpaid professional fees total $411,400. Allowed Priority Tax Claims - As of the Bar Date, the face amount of the priority tax claims totaled $193,000. Class 1 - Satisfied Claims - Heller Loan Claim, Heller DIP Loan Claim, the Vine Street Secured Claim, Administrative Expenses incurred and paid in full. Class 2 - Allowed Secured Customer Claims - Impaired. Class 3 - Allowed Miscellaneous Secured Claims - Impaired. Class 4 - Allowed Miscellaneous Priority Claims As of the Bar Date these claims totaled $516,023. Class 5 - Allowed Priority Customer Claims - AS of the Bar Date these claims totaled $148,531 Class 6 - Allowed Unsecured Claims - Each holder shall receive payment of its pro rata share of the cash in the distribution account after payment of allowed administrative and priority claims. AS of the Bar Date the face amount of the unsecured claims totaled $41,138,299. Impaired. Class 7 - Allowed Subordinated Claims - None - Impaired. Class 8 - Allowed Equity Interests - Cancelled upon consummation of plan. Impaired. SINGER COMPANY NV: Case Summary ------------------------------- Debtor: The Singer Company NV 915 Broadway 18th Floor New York, NY 10017-7108 Court: US Bankruptcy Court for the Southern District of New York Date Filed: 09/12/1999 Bankruptcy Petition #: 99-10578-brl Chapter: 11 Debtor's attorneys: Giorgio Bovenzi Skadden, Arps, Slate, Meagher & Flom LLP 919 Third Avenue New York, NY 10022-3897 (212) 735-2591 Fax : (212) 735-3577 Email: gbovenzi@skadden.com Jay M. Goffman Skadden, Arps, Slate, Meagher & Flom LLP 919 Third Avenue New York, NY 10022 (212) 735-2120 Fax : (212) 735-3742 Email: JGoffman@skadden.com U.S. Trustee ------------ United States Trustee Office of United States Trustee 33 Whitehall Street 21st Floor New York, NY 10004 (212) 510-0500 Total Assets: $1,237,686,000 Total debts: $611,782,000 Debt securities held by more than 500 holders: 7% Notes due 2003 Number of shares of preferred stock: 75,000 Number of shares of common stock as of January 2, 1999: 51,053,250 Brief description of debtor's business: The company, through its operating subsidiaries, is the leading manufacturer, marketer and distributor of consumer sewing machines with a market share of approximately 37% of all consumer sewing machines sold (excluding China, Soviet Republics and Eastern Europe) and markets and distributes in selected market other durable consumer products, including consumer electronic equipment, home appliances and home furnishings. SINGING MACHINE CO: Sales Increase 58% From Previous Year --------------------------------------------------------- The Singing Machine Co., Inc. announces that its sales for the year ended March 31, 1999, increased 58% to $9,547,816 from $6,056,101 for the prior year. According to the company the growth of the CD plus graphics electronic karaoke machines far surpassed its internal projections. This has continued into the current fiscal year as the orders placed by customers have grown to $15,500,000 from $8,100,000 at August 31, 1999, as compared to the same period a year ago. The company's family of products has enabled it to dramatically broaden the number of retailers and distributors of its products. The CD plus graphics machines are now in their fourth year of sales in the United States. This new technology has lowered the retail price point and made the products more user friendly and as a result the mass markets are reacting favorably to these two developments. Singing Machine Company is also benefitting from its emphasis on the sales of music software for its machines. The number of retailers and distributors ordering from its software library of over 2,700 titles is increasing as the number of CD plus graphics machines sold increases. The company is the only major company specializing in the karaoke category that offers complete lines of hardware (machines) as well as software (music). Historically, Singing Machine Company's operations have been seasonal, with the highest net sales occurring in the second and third quarters. In keeping with its historical sales patterns, sales for the first quarter of fiscal 2000 were $1,589,713, essentially flat when compared to the prior year of $1,650,782. However, net income increased nearly 60% to $39,482. Additionally, the present orders placed by the company's customers as of August 31, 1999 were $15,500,000, which is a strong indicator that sales and net income will increase dramatically in the fiscal 2000 year. The company's financial condition improved significantly with current assets growing to $2,760,447 from $1,813,098 as of March 31, 1999. Net worth increased to $2,379,682 as compared to $964,740 at March 31, 1999. This has enabled the company to have greater product financing capability, which was further enhanced by the recent increase in credit lines, as evidenced by the recent Bank Julius Baer & Co., LTD. $1,000,000 letter of credit line that the company announced last week. SUBMICRON: Court Approves Asset Sale Bidding Procedures ------------------------------------------------------- SubMicron Systems Corporation (OTC Bulletin Board: SUBM) announced that on September 9, 1999 it and its wholly-owned subsidiaries, SubMicron Systems, Inc., SubMicron Wet Process Stations, Inc. (doing business as Universal Plastics), and SubMicron Systems Holding I, Inc. received approval from United States District Judge Sue L. Robinson of certain bidding procedures to be used in connection with the proposed sale of substantially all of SubMicron's assets to Akrion LLC. The sale to Akrion LLC was announced on September 1, 1999, in conjunction with the filing by SubMicron of its Chapter 11 petitions in the United States Bankruptcy Court for the District of Delaware. As previously announced, SubMicron intends to sell to Akrion LLC substantially all of SubMicron's assets for cash and other considerations totaling approximately $55.5 million. Akrion LLC is sponsored by Sunrise Capital Partners, L.P., an affiliate of Houlihan, Lokey, Zukin & Howard, as well as SubMicron's existing lenders, Equinox Investment Partners L.L.C. and Celerity Silicon L.L.C. and members of SubMicron's management. Key elements of the Akrion LLC bid include the assumption of trade payables and the continued employment of substantially all of SubMicron's worldwide workforce. Under the approved bidding procedures, if any competing bids are submitted, SubMicron will conduct an auction on October 11, 1999 following which the Court will hold a hearing to approve the sale to the party offering the highest or best price. According to SubMicron's Chief Operating Officer, Robert Tetu, "We are pleased by Judge Robinson's decision to approve our proposed bidding procedures. This decision ensures that the entire SubMicron workforce, together with our suppliers and customers, will be fully supported both prior to and following the closing of this transaction. We are eager to begin the next stage in our company's history with the proper capitalization to support our continuing focus on customer satisfaction and innovation." SubMicron, through its subsidiaries, designs and manufactures advanced automated wafer surface preparation process equipment for use in the production of bare silicon wafers and semiconductor integrated circuits. SubMicron's primary products, known as "automated wet stations" perform precise and highly controlled cleaning and etching of silicon wafers onto which semiconductor devices are fabricated. SubMicron, through its subsidiaries, operates in North America, Europe and Asia and provides full equipment support and process knowledge to silicon wafer and semiconductor manufacturers for its products worldwide. SubMicron's Singaporean subsidiary, Akrion (S) Pte. Ltd. ("Akrion"), is not included in the bankruptcy filing, but SubMicron's shares of stock in Akrion will be among the assets sold. Akrion provides automated wet surface preparation solutions to manufacturers of semiconductor integrated circuits, bare silicon wafers and other electronic substrates, such as flat panel displays and photomasks, in the Asia Pacific Region. Akrion currently has operations in Korea, Singapore and Taiwan. TELEPAD CORP: Plan of Reorganization Filed ------------------------------------------ On September 1, 1999, the United States Bankruptcy Court in Wilmington, Delaware entered an order approving the appointment of Kurt F. Gwynne as Chapter 11 Trustee for Telepad Corporation. On March 17, 1999, Telepad filed a voluntary petition for relief under Chapter 11 of the federal Bankruptcy Code. The appointment of a trustee was requested by the creditors of Telepad following the resignation of Telepad's officers and directors in mid- August. Mr. Gwynne has filed a Disclosure Statement and a Plan of Reorganization with the Bankruptcy Court today. The proposed plan provides for, among other things, the payment in full of all allowed claims entitled to priority under the Bankruptcy Code. The proposed plan contemplates a pro rata payment of remaining proceeds to holders of certain nonpriority, unsecured claims. The plan, however, specifically extinguishes all legal and other interests of the holders of the company's common stock, preferred stock and redeemable warrants. Mr. Gwynne is attempting to serve all interested parties of record with a copy of the Disclosure Statement. The Bankruptcy Court in Wilmington, Delaware has scheduled a hearing on the Disclosure Statement for 9:00 a.m. on September 28, 1999. Any responses or objections to the Disclosure Statement must be filed with the Bankruptcy Court and served upon, among others, the Trustee's counsel, Eric Lopez Schnabel of Klett Lieber Rooney & Schorling, A Professional Corporation, 1201 Orange Street, Wilmington DE, 19807, on or before 4:00 p.m. on September 27, 1999. Interested parties of record are instructed to follow the directions found in the mailing initiated today. VENCOR: Creditors Consider Plan Exchange Debt For Stock ------------------------------------------------------- Vencor Inc.'s creditors apparently are discussing a plan to forgive much of the long-term health care company's $ 1.4 billion debt in exchange for all of the company's stock. Banks would own 56 percent of a restructured Vencor in return for forgiving debts. Holders of company notes and Vencor's landlord would own the rest, if parties agreed and a bankruptcy judge approved. The proposed framework is not good news for Vencor shareholders, who already have lost most of the value in their investments. The once high-flying stock, which traded around $ 9.50 a share as recently as May 1998, is now trading for pennies and was delisted from the New York Stock Exchange. "Vencor shareholders are going to end up with no equity if you add up (what the creditors are getting)," said John Roberts, analyst at Hilliard-Lyons in Louisville. "It comes to 100 percent, so that would leave zero for current Vencor shareholders." Officials at Ventas Inc., which owns the facilities that Vencor operates, announced the discussions Tuesday, one day after Vencor filed for protection under Chapter 11 of the U.S. Bankruptcy Code. "Ventas, Vencor's major creditors and Vencor have been engaged in negotiations for the last several months to restructure Vencor's debt and lease obligations," Steven Downey, Ventas' chief financial officer, said in a statement. "These negotiations have resulted in detailed terms for a proposed Vencor restructuring." It also was clear, however, that the "non-binding agreements in principle" to swap debt for stock have a long way to go before a final agreement. Most, but not all, creditors have agreed to the plan's basic terms, Vencor did not file a reorganization plan with its bankruptcy petition, and no legally binding agreements have been reached, Downey noted. Vencor said Wednesday that a bankruptcy court has entered orders allowing the company to pay employee wages and benefits as well as pay vendors, utilities and patient obligations. The judge also approved, on an interim basis, the company's $ 100 million "debtor-in-possession" financing with a bank group, which will be used to help finance Vencor's ongoing operations during restructuring. Vencor operates nursing homes and long-term care hospitals in 46 states. WESTERN FIDELITY FUNDING: Court Grants Motion to Operate -------------------------------------------------------- The US Bankruptcy Court for the District of Colorado entered an order on September 7, 1999 granting the motion of the Chapter 7 Trustee, Dennis W. King to operate the business of the debtor, Western Fidelity Funding Inc., on a limited basis for an additional 180 days from August 19, 1999 through and including February 15, 2000 in order to continue to wind down the business operations of the debtor and maximize the value of the estate's assets. WORLDWIDE DIRECT: Seeks To Release Security Interests ----------------------------------------------------- The debtors, Worldwide Direct, Inc., et al., seek authorization and approval of the release of security interests in assets of New Millennium Conquest Service Corporation and affiliate in exchange for delivery of proceeds of sale of assets. The debtor seeks authorization for SmarTalk to release its liens and security interests in the assets of New Millennium ConQuest Service Corporation (NMCSC) and its parent corporation, New Millennium Communications Corporation (NMCC) in connection with a sale of the assets of NMCSC. U.S. Operators has offered to purchase NMCSC's assets for an aggregate price of $1.25 million plus New Millennium's transaction costs. SmarTalk expects that any other credible offer would contain similar contingencies. SmarTalk requests authority to release the liens on the following terms and conditions: At closing of any sale transaction involving NMSCS, all proceeds from the sale, in an amount not less than $1.25 million will be transferred to SmarTalk. SmarTalk will retain its previously-granted liens in all assets of NMCSC that are not transferred tot he buyer. New Millennium will reaffirm its debt to SmarTalk and the validity and priority of SmarTalk's liens. New Millenium and the buyer will execute full and comprehensive releases. new Millennium will release and withdraw the proof of claim in an aggregate amount of more than $1.5 million. SmarTalk and the Committee have determined that it is unlikely that New Millennium will be able to fully satisfy its obligations under the Note or the Supplemental Notes, and that a sale of NMCSC's assets to a third party would be the best way to maximize the value of SmarTalk's interests in New Millennium. SmarTalk and the Committee have determined that the offer by U.S. Operators for the assets of NMCSC likely is the highest offer that will be received and that the release of SmarTalk's liens on the assets to be sold will maximize the amount of SmarTalk's recoveries from New Millenium. BOND PRICING FOR WEEK OF SEPTEMBER 13 ===================================== DLS Capital Partners, Inc., bond pricing for week of September 13, 1999 Following are indicated prices for selected issues: Acme Metal 10 7/8 '07 18 - 22 (f) Amer Pad & Paper 13 '05 42 - 44 Asia Pulp & Paper 11 3/4 '05 68 - 70 E & S Holdings 10 3/8 '06 47 - 49 Fruit of the Loom 8 7/8 '06 33 - 36 Geneva Steel 11 1/8 '01 15 - 17 (f) Globalstar 11 1/4 '04 65 - 66 Hechinger 9.45 '12 10 - 13 (f) Integrated Health 9 1/2 '07 23 - 25 (f) Iridium 14 '05 11 - 12 (f) Just for Feet 11 '09 22 - 25 Loewen 7.20 '03 55 - 57 (f) Planet Hollywood 12 '05 26 - 28 (f) Purina Mills 9 '10 22 - 25 (f) Samsonite 10 3/4 '08 85 - 87 Service Merchandise 9 '04 13 - 14 (f) Sunbeam 0 '18 16 1/2 - 17 1/2 TWA 11 3/8 '06 65 - 67 United Artists 9 3/4 '08 31 - 34 Vencor 9 7/8 '05 26 - 28 (f) Zenith 6 1/4 '11 20 - 22 (f) ********** 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. 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