/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/990921.MBX T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, September 21, 1999, Vol. 3, No. 182 Headlines AAMES FINANCIAL: Annual Meeting Adjourns For Voter Response AHERF: Attorney Makes Statement For Gumberg AMEDISYS: Sells Two Outpatient Surgery Centers AMPACE CORP: Committee Seeks To Adjourn Hearing APS: Fourth Motion To Extend Time To Assume & Reject Leases APS: Motions To Sell Properties BROTHERS GOURMET: Brummer Objects To Extension of Exclusivity COSTILLA ENERGY: Reports Filing of Chapter 11 Bankruptcy to SEC COSTILLA ENERGY: Loses Court Battle/Sizeable Judgment CROWN BOOKS: Seeks Order Approving Retention of Grant Thornton DISCOVERY ZONE: Applies To Employ Keen Realty EAGLE GEOPHYSICAL: Fails To Make Interest Payment On Senior Notes FILENE'S BASEMENT: Wins Final Okay for $135 Million DIP Loan GENESIS HEALTH VENTURES: Seeks To Increase Authorized Shares GENEVA STEEL: Applies To Employ Fenwick & West as Special Counsel HARNISCHFEGER: First Motion For Extension of Exclusivity HARNISCHFEGER: Beloit To Close Two Plants; Union Kicks Tires INCOMNET INC: Taps Klee, Tuchin & Bogdanoff IONICA: Files Complaint Against Parent Group JUST FOR FEET: Delays Filing Financial Reports With SEC LEVITZ: Seeks Approval of 13th DIP Facility Amendment LOEHMANNS INC: Seeks To Extend Exclusive Periods MERRY-GO-ROUND: Employees Sell Priority Claims at 50% Discount OAHU CONSTRUCTION: Files Chapter 11 PERK DEVELOPMENT: Entry of Order Confirming Plan of Liquidation PHP HEALTHCARE: Seeks Authority To Abandon Stock Interest PROTEAM.COM: Common Stock De-Listed RECYCLING INDUSTRIES: Order Authorizes Severance Program RENAISSANCE COSMETICS: Committee Replies To DPC's Objections RIGCO NORTH AMERICA: Withdraws Motion For DIP Financing STUART ENTERTAINMENT: No objection to Counsel/Financial Advisor VENCOR: Reports Filing For Bankruptcy Protection To SEC VENCOR: Court Issues First Day Orders/Approves Stipulation VENCOR: To Honor Pre-Petition Patient Obligations WESTSTAR HOLDINGS: Files Chapter 11 Meetings, Conferences and Seminars ********** AAMES FINANCIAL: Annual Meeting Adjourns For Voter Response ----------------------------------------------------------- The annual meeting of stockholders of Aames Financial Corporation, which was convened on September 13, 1999, has been adjourned to Friday, September 24, 1999, in order to provide stockholders with additional time to vote their shares with respect to proposal number One. This proposal, if approved, would increase the number of authorized shares of the company's common stock. All business other than the vote on proposal number One was concluded at the meeting on September 13, 1999. The company reports that the overwhelming number of the votes received to date have been in favor of proposal number One. However, brokers cannot vote their customer's shares on this issue without specific instructions from their clients. The company feels that many stockholders assume their broker will vote their shares for them, and therefore the total vote on this one issue is less than a majority. The affirmative vote of a majority of the votes entitled to be cast by the holders of all outstanding shares of common stock, voting together as a class, is required for the adoption of proposal number One. Aames cautions that if the stockholders do not approve the common stock proposal: The company will not be able to complete its pending rights offering; the dividend rate on the company's outstanding Series B and Series C Convertible Preferred Stock will increase from 6.5% to 15% per annum; the Series B and Series C Convertible Preferred Stock will continue to be able to participate in dividends and rights in liquidation on an as converted basis with holders of the common stock in any remaining assets after the liquidation preference is paid on the Series B and Series C Convertible Preferred Stock. AHERF: Attorney Makes Statement For Gumberg ------------------------------------------- David H. Ehrenwerth, attorney for Ira Gumberg, issued the following statement in response to the complaint filed by the AHERF bankruptcy trustee against Mellon Bank: "The trustee's allegation -- based on nothing but unfounded surmise --that Ira Gumberg played a role in any demand that AHERF repay its loan or in AHERF's decision to make the repayment is absolutely false. He knew nothing about any demand for repayment or about AHERF's repayment of the loan until after the repayment had been made. That will be clear when all the facts are known, and, until such time, Mr. Gumberg will have no further comment." AMEDISYS: Sells Two Outpatient Surgery Centers --------------------------------------------- Effective September 1, 1999, Amedisys, Inc., by an asset purchase agreement, sold certain assets, subject to the assumption of certain liabilities, of its wholly-owned subsidiary, Amedisys Surgery Centers, L.C., to United Surgical Partners International, Inc. The assets and liabilities sold related to two free- standing outpatient surgery centers operated by Amedisys Surgery Centers, Amedisys Surgery Center of Pasadena and Amedisys Surgery Center of South Houston. The assets of the Surgery Centers will be acquired by two Texas Limited Partnerships organized by United Surgical Partners and its wholly-owned subsidiaries. In consideration for the assets of the Surgery Centers, Amedisys Surgery Centers received $11,000,000. At closing, $10,562,000 was payable immediately to Amedisys Surgery Centers with a three- month $300,000 note receivable due, payable in monthly installments of $100,000 plus interest at an effective interest rate of 10%. In addition to cash considerations, United Surgical Partners agreed to pay off certain creditors of Amedisys Surgery Cemters for debts related to the Surgery Centers of $1,101,083. Subject to certain exceptions, the assets sold consisted primarily of $60,000 cash; all accounts and notes receivable; inventory; prepaid items; land; equipment, surgical instruments, furniture, fixtures, and leasehold improvements; office supplies; records and files; transferable governmental licenses, permits, and authorizations; trade names, goodwill, computer software, and operating rights; and rights in, to and under specified licenses, contracts, leases, and agreements. The liabilities being assumed by United Surgical Partners include, subject to certain exclusions, the current liabilities of Amedisys Surgery Centers and the obligations and liabilities under certain leases and contracts arising on or after September 1, 1999. AMPACE CORP: Committee Seeks To Adjourn Hearing ----------------------------------------------- The Official Committee of Unsecured Creditors of Ampace Corporation and Ampace Freightlines, Inc. seek to adjourn the hearing to consider the adequacy of the debtor's amended Disclosure Statement. The Committee and potential investors seek to conduct necessary due diligence on an expedited basis in connection with the promulgation of an alternative transaction for the debtors. The Committee states, "as rare as a "smoking gun" is in Chapter 11, this is it." The Committee states that the debtors failed to disclosure the competing plan proposal, and the investors and the Committee urgently need a short item to refresh the investors' past t due diligence, then to proceed on an expedited basis with a Committee plan based on any new resulting term sheet and resulting binding agreement. The Committee anticipates resistance from the debtors and therefore moves the court to compel the needed due diligence. The Committee claims that reasonable additional due diligence must be afforded to the investors to update their prior information; and that allowing the investors to conduct their due diligence is in the he best interests of the estates. The Committee asserts that the Disclosure Statement hearing should be briefly adjourned to allow submission of the alternative plan transaction. APS: Fourth Motion To Extend Time To Assume & Reject Leases ----------------------------------------------------------- The Debtors are party to seven leases for which they believe assumption and assignment for value is a better alternative than outright rejection. The Debtors have placed each property with a broker to market their leasehold interests as widely as possible. By this Motion, the Debtors ask that the deadline by which they must decide to assume and assign or reject these seven leases be extended, pursuant to 11 U.S.C. Sec. 365(d)(4), through the earlier of (i) confirmation of the Joint Plan and (ii) November 15, 1999. APS: Motions To Sell Properties ------------------------------- Team Hi-Dust 4x4, Inc., offers $213,000 to purchase all of the Debtors' interests in property at a location to be disclosed in Norfolk, Virginia. The Debtors marketed the Property through Virginia Commercial Real Estate Services; those marketing efforts generated only one expression of interest in the Norfolk Property. Accordingly, the Debtors seek the Court's authority, pursuant to 11 U.S.C. Sec. 363, to sell the Norfolk Property to Hi-Dust free and clear of all liens and pay VCRES a customary percentage brokerage fee. Several expressions of interest in the Debtors' property located at 718-730 West Allen Street in Allentown, Pennsylvania, culminated in the Debtors' acceptance of a $50,000 cash offer from Michael Turczyn, Sr., for the purchase of the Allentown Property. By this Motion, the Debtors seek the Court's authority to consummate the sale and pay a brokerage fee to Hawley Realty, Inc. For $87,500 in cash, Kenneth D. Franks offers to purchase the Debtors' interests in property located at 3225 Franklin in Midland, Texas. The Debtors have marketed the Midland Property for months through Southwest Commercial Investments, Inc., and Mr. Frank's is the highest and best offer received for the Midland Property. BROTHERS GOURMET: Brummer Objects To Extension of Exclusivity ------------------------------------------------------------- Craig Brummer, d/b/a Viva Cafe Company has negotiated for the purchase of the debtors' interest in the P&G Supply Agreement, referred to as the "Remaining Assets." In the course of negotiations, Brummer was asked to share his Business Pan in order to obtain P&G's and the Committee's support for the transactions (for which the purchase price has been raised by Brummer from $2 million to $5 million). Brummer now alleges that the debtors have decided to operate as a "private label roaster," using Brummer's business plan as the debtor's model. Brummer alleges that there is no reason for this fourth request for extension of exclusivity. Notably, Brummer points out that the debtor's plan, which has not yet been set for hearing was a pure liquidation plan, and never reflected an intent to continue as a going concern. Brummer points out that the Remaining Assets continue to decrease in value as the delay continues. Brummer states that the exclusive period should be terminated and Brummer should be allowed to file a plan of reorganization that provides for the acquisition by Brummer of the Remaining Assets with distributions to be paid to creditors in accordance with the Bankruptcy Code. COSTILLA ENERGY: Files Chapter 11 Bankruptcy ------------------------------------------- On September 3, 1999, Costilla Energy, Inc. filed a petition for relief under Chapter 11 of the United States Bankruptcy Code. The case is pending in the United States Bankruptcy Court for the Western District of Texas, Midland-Odessa Division. The company remains in possession of its properties and in control of its operations as a debtor-in-possession, and intends to file a plan of reorganization as soon as practicable. COSTILLA ENERGY: Loses Court Battle/Sizeable Judgment ----------------------------------------------------- On August 18, 1999, a judgment was entered against Costilla Energy Inc. and the other defendants in a lawsuit styled GNK, Inc. v. Graham D. Williford, Carl Ed Williford, Harriette Williford-Whatley, Homer Paul Bonner, in his capacity as Trustee of Eric Wayne Wilson Trust No. 1 and the Hariette-Williford- Whatley 1987 Trust and Costilla Energy, Inc., in the District Court of Freestone County, Texas, 87th Judicial District. All of the defendants were found jointly and severally liable for actual damages in a total amount of $562,248.36. In addition, Costilla Energy was also found liable for additional actual damages of $2.00 and exemplary damages in the sum of $5,000,000. The company anticipates that it will appeal this judgment. Two days prior to the judgment, on August 16, 1999, the company received notice from the Nasdaq Stock market that its common stock would no longer be listed on the Nasdaq National Market. CROWN BOOKS: Seeks Order Approving Retention of Grant Thornton -------------------------------------------------------------- The debtors, Crown Books Corporation and its affiliates seek an order approving the retention of Grant Thornton, LLP as their special auditors. The debtors require the assistance of the firm to audit the current year end balance sheet of Crown Books Corporation and the related statements of earnings , retained earnings and cash flows for the period then ended. Grant will also assist the company in the preparation of its Form 10-K, and its Form 10-Q for each quarter of the fiscal year once SEC re- registration has been completed. Total fees for the services described are estimated to be $171,500. DISCOVERY ZONE: Applies To Employ Keen Realty ---------------------------------------------- The debtors, Discovery Zone, Inc. and its affiliates seek authority to em ploy Keen Realty Consultants, Inc. as special real estate consultant. The debtor requires the services of real estate consulting firm t sell, reject or otherwise dispose of the leases in the Chapter 11 cases. Following entry of the sale order and the cessation of business operations, the debtors lack sufficient staff to address the issues and difficulties that will be encountered in attempting to quickly and efficiently dispose of their property. To obtain the highest and best prices for the property and minimize claims asserted against their estates, the debtors need the assistance of Keen, whose officers and senior staff will actively assist the debtors in maximizing the value of their property. EAGLE GEOPHYSICAL: Fails To Make Interest Payment On Senior Notes ----------------------------------------------------------------- Eagle Geophysical, Inc. announces that it has not made the interest payment on its $100 million 10 3/4% Senior Notes due 2008 within the 60 day grace period for the payment. This semi- annual interest payment of $5,375,000 was due on July 15, 1999, subject to a 60 day grace period. This grace period expired September 13, 1999. Eagle has retained the investment banking firm of CIBC World Markets to serve as its financial advisor in connection with a potential restructuring and recapitalization of the company. Eagle is continuing its efforts to negotiate a debt restructuring and/or recapitalization of the company, and hopes to announce the results of its restructuring efforts within the next one to two weeks. The company provides onshore and offshore seismic data acquisition services to the petroleum industry. FILENE'S BASEMENT: Wins Final Okay for $135 Million DIP Loan ------------------------------------------------------------ Filene's Basement Inc., following a contested hearing Wednesday before the U.S. Bankruptcy Court in Boston, won final approval of its $135 million debtor-in-possession financing pact with GE Capital Corp. and Paragon Capital LLC. U.S. Bankruptcy Judge William Hillman (D. Mass.) signed the order Thursday. Jay Indyke of Kronish Lieb Weiner & Hellman LLP, counsel to Filene's official committee of unsecured creditors, told Federal Filings Business News that the panel filed an objection to the proposed DIP loan on Sept. 14, but most of the myriad issues the panel raised were resolved during the hearing. (ABI 20-Sept-99) GENESIS HEALTH VENTURES: Seeks To Increase Authorized Shares ------------------------------------------------------------ GENESIS HEALTH VENTURES INC. is preparing a proxy statement to send to its shareholders advising of a special meeting of stockholders on a date yet to be announced. The meeting is being called to ask stockholder consideration and approval of an amendment to Genesis' articles of incorporation increasing the number of authorized shares of common stock from 60,000,000 to 200,000,000 shares and creating a class of non-voting common stock. The company will also be asking stockholders to approve, in connection with the restructuring of the joint venture relating to its ownership of The Multicare Companies, Inc. and in accordance with the rules of The New York Stock Exchange, the issuance of the following securities: 12.5 million shares of voting common stock, warrants to purchase 2 million shares of voting common stock, 24,369 shares of Series H Senior Convertible Participating Cumulative Preferred Stock, which is initially convertible into 27,850,590 shares of voting common stock, and 17,631 shares of Series I Senior Convertible Exchangeable Participating Cumulative Preferred Stock, which is initially convertible into 20,149,410 shares of non-voting common stock. The transactions to which the securities proposed to be issued relate are described in the company's proxy statement. In connection with the transactions described, in exchange for these securities Genesis will receive, among other things, $50 million in additional equity capital. Only shareholders as of a record date yet to be announced, or their duly appointed proxies, may attend the meeting. Seating will be limited. The company states that admission to the meeting will be on a first-come, first-served basis. Registration and seating will begin at 9:30 a.m. on the day of the special meeting and each shareholder may be asked to present valid picture identification, such as a driver's license or passport. The company will not permit cameras, recording devices and other electronic devices at the meeting. GENEVA STEEL: Applies To Employ Fenwick & West as Special Counsel ----------------------------------------------------------------- The debtor, Geneva Steel, applies for an order approving the employment of Fenwick & West LLP as special counsel to the debtor on certain employment matters. Specifically the matters include general employment counseling and a court complaint, and an EEOC charge. The professionals of the firm expected to work on the case charge hourly rates as follows: Partners $300-$500 Associates $175-300 Paralegals $60-150 HARNISCHFEGER: First Motion For Extension of Exclusivity -------------------------------------------------------- To "avoid premature formulation of a chapter 11 plan of reorganization" and to "ensure that the plan that is formulated takes into account the interests of all of the Debtors, their employees, their creditors and their estates," the Debtors ask the Court, pursuant to 11 U.S.C. Sec. 1121(d), for an extension of their exclusive period during which to file a plan of reorganization through February 7, 2000, and a concomitant extension o their exclusive period during which to solicit acceptance of such plan through April 7, 2000. The Debtors argue, in light of applicable case law, this extension is warranted because (a) these cases are large and complex, (b) the Debtors have demonstrated progress in the chapter 11 proceedings thus far, and (c) the extension requested will not harm creditors. "It is simply unrealistic," the Debtors say, "to expect that any party --be it the Debtors or any other creditor or party in interest -- would be in a position to formulate, promulgate and build consensus around a reorganization plan any earlier than February 7, 2000." "Apart from proceedings before [the] Court," the Debtors add, they and their professionals "have been working arduously toward a successful restructuring," meeting with domestic and international bankers and Committee representatives to discuss restructuring issues regarding not only the Debtors, but the numerous non-Debtor foreign affiliates as well. Although significant progress has been made, much work must still be done to build a consensus for a plan with the relevant constituents and to develop a cogent plan of reorganization. (HARNISCHFEGER Bankruptcy News Issue 11; Bankruptcy Creditors' Service Inc.) HARNISCHFEGER: Beloit To Close Two Plants; Union Kicks Tires ------------------------------------------------------------ Citing a soft Asian market and light demand, Beloit announced it will cut 350 factory jobs in Beloit, Wisconsin, and Rockton, Illinois, by January 31, 2000, according to reports appearing in the Milwaukee Business Journal and on newswires. Beloit currently employs 1,100 people and has laid off 500 to 600 workers in recent years. According to the Business Journal, Beloit informed workers of the move at a meeting the morning of September 8, 1999, quoting Mike Hornby, a business representative for Machinists Lodge 1197. The Company is expected to shift production to plants in Poland and Brazil, Hornby continued, adding that the Company will also outsource the production of some parts to other manufacturers. Employees will continue to report to work until current orders are filled, but new orders will be shifted to other Beloit facilities, spokesman Peter E. Rosenberg told the Associated Press. Representatives of the International Association of Machinists and Aerospace Workers say they contacted Harnischfeger in early August about buying Beloit Corp. and Joy Manufacturing. Steve Sleigh, director of strategic resources at the union's Washington-area offices, told the Milwaukee Journal Sentinel that Harnischfeger's response has been "less than enthusiastic." Mr. Sliegh fears Harnischfeger may only be interested in selling the entire company. Not so, Robert Dangremond tells the Sentinel, stressing that the company will consider all its options, including selling all or part of the company. Dangremond confirmed to the Sentinel that he had talked with a representative of KPS Special Situations Fund, the group working with the Machinists union. However, he said there had been no further contact. (HARNISCHFEGER Bankruptcy News Issue 11; Bankruptcy Creditors' Service Inc.) INCOMNET INC: Taps Klee, Tuchin & Bogdanoff ------------------------------------------- The US Bankruptcy Court for the Central District of California, Santa Ana Division has scheduled a hearing for October 7, 1999 at 9:30 AM for the debtors' application to employ Klee, Tuchin & Bogdanoff LLP as Reorganization counsel. IONICA: Files Complaint Against Parent Group -------------------------------------------- Friday Ionica PLC, a British telecoms group, filed a complaint against its parent group, Ionica Group PLC, to give unsecured creditors' claims priority over the group's claims and to give creditors access to the estimated 27 million pounds ($43.78 million) in cash, according to Reuters. A spokesman for Ernst & Young, the Administrator for Ionica, said that the company's unsecured creditors are owed at least 220 million pounds. Most of Ionica's creditors are in the United States; it filed chapter 11 in Manhattan on December 11, 1998. (ABI 20-Sep-99) JUST FOR FEET: Delays Filing Financial Reports With SEC ------------------------------------------------------- The quarterly report to the Securities & Exchange Commission for the quarter ended July 31, 1999 of Just For Feet, Inc. will not be filed timely. The company is in the process of finalizing a new credit facility to replace its existing credit facility and says consummation of the new credit facility, which is expected within 3 to 5 days, will have a material impact on the discussion of the company's liquidity to be contained in the financial statements to be filed. Just For Feet Inc. expects to report a 28.8% increase in net sales from $175.3 million for the quarter ended July 31, 1998 to $225.8 million for the quarter ended July 31, 1999. However, the company expects to report a net loss of $25.9 million for the quarter ended July 31, 1999 compared to net earnings of $8.0 million for the quarter ending July 31, 1998. The increase in net sales was primarily attributable, according to the company, to the opening of 58 new superstores and 68 new specialty stores since July 31, 1998 and an increase in comparable store sales of 0.9%. The company reports the net loss in the second quarter of fiscal 1999 was primarily due to lower gross margins and higher store operating and net interest expenses resulting from the carrying costs of and efforts to alleviate significant amounts of excess inventory. LEVITZ: Seeks Approval of 13th DIP Facility Amendment ----------------------------------------------------- In exchange for a $150,000 Amendment Fee payable to Deutsche Bank Alex Brown, formerly BT Commercial Corporation, as agent to the DIP Lenders under the DIP Credit Agreement, the Lenders agree to a Thirteenth Amendment to the DIP Facility granting the Debtors request that the Maturity Date for the DIP Facility be extended from December 31, 1999 to June 30, 2000. Additionally, the Debtors and the DIP Lenders agree that the Revolving Commitment will be reduced, on December 31, 1999, to $95,000,000, and the Revolving Lenders will be: BT Commercial Corporation $16,869,159 LaSalle National Bank $16,869,159 Heller Financial, Inc. $15,981,308 TransAmerica Business Credit Corporation $11,542,056 Finova Capital Corporation $16,869,159 GMAC Business Credit L.L.C. $16,869,159 Further, the Debtors covenant that Minimum EBITDA will not be less than: For the Period Minimum EBITDA -------------- -------------- April 1, 1999 to September 30, 1999 $0 April 1, 1999 to December 31, 1999 $4,000,000 April 1, 1999 to March 31, 2000 $9,000,000 The Debtors note their need for continued working capital financing, believe the terms are fair reasonable, and believe that this DIP Facility Amendment will enable them to continue moving toward the ultimate goal of creating value for their estates and emerging from chapter 11. Accordingly, pursuant to 11 U.S.C. Secs. 364(c) and (d), the Debtors ask Judge Walrath for her approval of the 13th Amendment. (LEVITZ Bankruptcy News Issue 37; Bankruptcy Creditors' Service Inc.) LOEHMANNS INC: Seeks To Extend Exclusive Periods ------------------------------------------------ The debtor, Loehmann's, Inc. seeks a court order extending its exclusive periods in which to file a Chapter 11 plan and solicit acceptances thereto. Extending the Debtor's exclusive period will enable the Debtor, the Creditors' Committee and other creditor constituencies to continue to explore various restructuring alternatives, develop a plan with maximum creditor support, conclude plan negotiations and confirm a plan. This is the debtor's first request for an extension of exclusivity. The debtor has obtained approval of a significant post-petition secured financing facility from Congress Financial Corporation that allows it to operate its business on a going- forward basis with sufficient capital for its operations. The debtor intends to retain DJM Asset Management LLC to review and appraise its leases. The debtor has filed a motion requesting that the court set November 8, 1999 as the deadline for the parties holding prepetition claims against the debtor to file proofs of claim. The debtor has entered into a management agreement with EIG Management, Inc., engaging Elliot I. Green as Interim Chief Financial Officer. And a management retention and severance plan has been approved by the court. PricewaterhouseCooopers has been retained as strategic retail consultant tot he debtor, and the debtor continues to evaluate the profitability of all of its stores. Due to the progress in the case and the size and complexity of the case, the debtors believe e that the extension of exclusivity is warranted. The debtor requests that the court grant its motion to extend the periods during which only the debtor may file a plan and acceptances thereof to and including January 13, 2000 and March 13, 2000, respectively. MERRY-GO-ROUND: Employees Sell Priority Claims at 50% Discount -------------------------------------------------------------- Court records in the Merry-Go-Round Enterprises, Inc., et al., chapter 7 cases reflect the sale of at at least two priority claims held by MGR employees at 50% of their face amount. Liquidity Solutions, Inc., of Hackensack, New Jersey, filed notices of the transfer of various employees' claims reflecting a 50-cents-on-the-dollar purchase price. Deborah H. Devan, Esq., the MGR Trustee based in Baltimore, has indicated in Court pleadings it is likely that priority claims will be paid in full and a small dividend may reach prepetition general unsecured creditors. OAHU CONSTRUCTION: Files Chapter 11 ------------------------------------ Oahu Construction Co. Ltd., one of Hawaii's oldest construction companies, has filed for chapter 11 protection, according to The Pacific Business News. Attorney Ted Pettit of Case, Bigelow and Lombardi, Honolulu, said that the Bank of Hawaii, which is owed about $10 million, has a blanket lien on all Oahu Construction assets. He said that the company is negotiating with the bank, its largest creditor, and other major creditors. The company's problems began in 1998 when it lost its ability to obtain bonding due to financial problems caused by a downturn in the industry. Assets include heavy equipment, appraised at $5.4 million, and furniture and fixtures valued at another $100,000, and Pettit said the company has outstanding accounts receivable of more than $10 million. "We anticipate liquidating or selling off through bankruptcy some of the large heavy equipment and scaling down the company to manage the remaining contracts," Pettit said.(ABI 20- Sep-99) PERK DEVELOPMENT: Entry of Order Confirming Plan of Liquidation --------------------------------------------------------------- On September 8, 1999, an order was entered by the US Bankruptcy Court, Western District of New York, confirming the debtors' amended plan of orderly liquidation under Chapter 11 of the Bankruptcy Code. The plan provides for the continued liquidation of each debtor's remaining assets. PHP HEALTHCARE: Seeks Authority To Abandon Stock Interest -------------------------------------------------------- The debtor, PHP Healthcare Corporation seeks authority to abandon its stock interest in D.C. Chartered Health Plan Inc. Because the Nations Bank's interest in the DCC Stock is clearly established, the debtor believes that it is in the best interests of its estate to abandon the DCC Stock so as to allow NationsBank to shoulder the burden of attempting to liquidate this portion of its collateral. AS of the Petition Date, the outstanding principal balance of the Pre-petition loans totaled approximately $80 million. Abandoning the DCC Stock is the most efficient resolution for the estate, as it allows NationsBank to regain possession and control of its collateral in accordance with a certain Security Agreement and applicable non-bankruptcy law. A hearing has been scheduled before the Honorable Mary F. Walrath, US Bankruptcy Judge on September 30, 1999 at 9:30 AM in the US Bankruptcy Court for the District of Delaware, 824 Market Street, 6th Floor, Wilmington, Delaware 19801. PROTEAM.COM: Common Stock De-Listed ----------------------------------- Genesis Direct, Inc., doing business as PROTEAM.com, (Nasdaq:PRTM) today announced that its common stock will be delisted from the Nasdaq National Market, effective at the close of business on September 16, 1999. PROTEAM.com, which filed a petition for bankruptcy protection under Chapter 11 of the Bankruptcy Code on August 19, 1999, no longer meets the Nasdaq Stock Market maintenance requirements. Trading in PROTEAM.com's common stock was halted by the Nasdaq National Market on August 19, 1999. In light of its condition, the Company does not currently intend to list its common stock on any other trading market. PROTEAM.com is a leading e-tailer specializing in the marketing and sales of sports and sports related products to both fans and participants. The Company offers products directly to consumers through several targeted websites and complementary catalogs, television and radio advertising and other electronic broadcast and print media. RECYCLING INDUSTRIES: Order Authorizes Severance Program -------------------------------------------------------- On September 10, 1999, the US Bankruptcy Court for the District of Colorado entered an order authorizing the employee severance and retention program of Recycling Industries, Inc. and its affiliated debtors. RENAISSANCE COSMETICS: Committee Replies To DPC's Objections ------------------------------------------------------------ The Official Committee of Unsecured Creditors replies to the opposition of DPC Acquisition Corp. tot he joint motion of the debtors, Committee and senior lenders for an order authorizing the debtors to draw a letter of credit posted by DPC Acquisition Corp. The Committee asserts that both the Asset Purchase Agreement signed by DPC and the Form Agreement included a limitation clarifying that the inventory included in Acquired Assets was subject to the Settlement. The Committee states that all bidders knew or should have known about the Houbigant inventory dispute prior to the closing. DPC conducted due diligence prior to the auction. DPC had the opportunity to review the transcript, and no one forced DPC to bid at the auction. The Committee further states that if DPC executed the Asset Purchase agreement without sufficient time to study it, no one can be blamed except DPC. The Committee states that contrary to DPC's unsupported statement, DPC did not contract to purchase assets including the Houbigant inventory. DPC contracted to purchase the debtors' inventory subject tot he settlement, and is not entitled to a price adjustment from the purchase price of $29 million. RIGCO NORTH AMERICA: Withdraws Motion For DIP Financing ------------------------------------------------------- The debtors, RIGCO North America LLC and its affiliates seek to withdraw their motion for post-petition secured financing stating that as long as the debtors are permitted to use cash collateral, there is not a need for the debtors to obtain post- petition secured financing by a DIP lender. STUART ENTERTAINMENT: No objection to Counsel/Financial Advisor --------------------------------------------------------------- The debtor, Stuart Entertainment, Inc. certifies that the objection deadline passed with respect to the retention of Squire, Sanders & Dempsey LLP as co-counsel for the debtor. The debtor certifies that the objections deadline passed with respect to the employment of Saul, Ewing, Remick & Saul LLP as co-counsel for the debtor. The debtor also certifies that the objection deadline passed with respect to the employment of Wasserstein Perella & Co. Inc. as financial advisor to the debtor. VENCOR: Reports Filing For Bankruptcy Protection To SEC ------------------------------------------------------- Vencor, Inc. and several of its subsidiaries reported to the SEC filing a petition for protection under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court in Delaware. In announcing the Chapter 11 filing, company management emphasized that the filing has been organized to permit normal operations of its nursing centers, hospitals, and ancillary services business. The company also announced that it has obtained agreements for debtor-in-possession financing with a bank group led by Morgan Guaranty TrustCompany of New York in the aggregate principal amount of $100 million. The DIP financing and existing cash flows, upon bankruptcy court approval, will be used to fund the company's ongoing operations. Along with the petition, Vencor also has a plan of reorganization in progress that includes terms negotiated with key parties, including Vencor's bank lenders, subordinated debtholders, and Ventas, Inc., the company's primary landlord. In addition, a settlement is in progress with the Department of Justice, acting on behalf of the Health Care Financing Administration and the Department of Health and Human Services' Office of the Inspector General, concerning the government's outstanding claims against the company, including outstanding routine reimbursement issues. Edward L. Kuntz, chairman, chief executive officer and president of Vencor, stated, "Filing for reorganization was necessary to enable us to create a sustainable capital structure, while we continue to provide high-quality healthcare services to those people who cannot take care of themselves." Kuntz added, "The reorganization also was necessary because of the dramatic changes impacting the long-term care industry, most notably decreased Medicare reimbursement. We believe we are taking the appropriate steps to assure that we emerge from the reorganization process with a sound capital structure that will enhance the vital services that our dedicated employees provide to our patients, residents, and customers." Vencor, Inc. is a long-term healthcare provider operating nursing centers, hospitals, and ancillary contract services in 46 states. VENCOR: Court Issues First Day Orders/Approves Stipulation ----------------------------------------------------------- Vencor, Inc. reports to the SEC that the United States Bankruptcy Court for the District of Delaware entered first day orders granting authority to the company and its subsidiaries to pay pre-petition and post-petition employee wages, salaries, benefits and other employee obligations. The Court also approved orders granting authority, among other things, to pay pre-petition claims of certain critical vendors, utilities and patient obligations. Until approval of its plan of reorganization, the company intends to pay post-petition claims of all other vendors and providers in the ordinary course of business. The Court also approved, on an interim basis, the company's $100 million debtor-in-possession financing with a bank group led by Morgan Guaranty Trust Company of New York. The final hearing on the DIP Financing is scheduled for October 1, 1999. The DIP financing and existing cash flows will be used to fund the company's ongoing operations during the restructuring. During the restructuring, the company and Ventas, Inc. have entered into a stipulation for the payment by Vencor Inc. of a reduced monthly rent payment of approximately $15.1 million beginning in September. The stipulation was approved by the Court. The reduced rental payment for September was due on September 16 with the remaining monthly rental payments required to be made on the fifth day of each month or the first business day thereafter. Beginning in September, the difference between the base rent under the company's existing master leases with Ventas and the reduced monthly rent payment of approximately $15.1 million will accrue as an administrative expense, subject to challenge in the Chapter 11 case. Unpaid August rent of approximately $18.9 million will constitute a claim by Ventas in the Chapter 11 case. The stipulation also continues to toll any statutes of limitations or other time constraints in a bankruptcy proceeding for claims that might be asserted by the company against Ventas. The stipulation expires on October 31, 1999, but automatically renews for one-month periods unless either party provides a fourteen-day notice of termination. The stipulation also may be terminated prior to its expiration upon a payment default by the company, the consummation of the company's plan of reorganization or the occurrence of certain defaults under the DIP Financing. VENCOR: To Honor Pre-Petition Patient Obligations -------------------------------------------------- The Debtors have sought and obtained the Court's authority to honor all prepetition obligations to patients and residents under all of their Patient Service Programs in place at the Petition Date, including: (A) Medicaid Eligibility Refunds. At times, a resident is admitted to a nursing home pending an eligibility determination by Medicaid. The family pays the bills pending that determination. In the event Medicaid okays the admission, Medicaid pays Vencor and Vencor refunds payments to the family. (B) Prepayment Refunds. Nursing home bills are generally paid monthly in advance. When a resident dies, leaves, or is discharged, Vencor usually owes a refund for a partial month's service. (C) Overpayment Refunds. It is common for patients, their insurers and other Payors to overpay for services provided by Vencor, entitling those entities to refunds. (D) Patient Trust Accounts. The Debtors hold small banks of money for certain residents in Trust. Those small banks aggregate approximately $5,100,000. Judge Walsh makes it clear that, although the Debtors are authorized to honor these obligations, they are not required to honor them and no part of his order confers any entitlement to any creditor. WESTSTAR HOLDINGS: Files Chapter 11 ----------------------------------- Encino, Calif.-based WestStar Holdings Inc. and three affiliates filed chapter 11 Friday in the U.S. Bankruptcy Court for the District of Delaware, according to Reuters. WestStar is the holding company for WestStar Cinemas Inc., which operates 54 theatres and 300 screens under the Mann label, including the famous Mann's Chinese Theater in Hollywood. WestStar estimated its assets and liabilities each exceed $100 million. The liabilities consist mostly of bank debt, for which Canadian Imperial Bank of New York is the agent. According to court papers, the secured portion of the bank debt is not listed and the unsecured portion is $25 million. Cinamerica Theatres, Burbank, Calif., has an unsecured note claim for $2.5 million, and the remaining 20 largest creditors have trade and fee claims ranging from $70,000 to $2 million. CEO Michael H. Solomon said that increasing costs related to the build-up of multiplexes is a major factor in the filing, the Los Angeles Times reported. (ABI 20-Sep-99) Meetings, Conferences and Seminars ---------------------------------- September 24-25, 1999 VIRGINIA CONTINUING LEGAL EDUCATION 14th Annual Mid-Atlantic Institute on Bankruptcy and Reorganization Practice Boar's Head Inn, Charlottesville, Virginia Contact: 1-800-979-8253 September 27, 1999 INTERNATIONAL WOMEN'S INSOLVENCY AND RESTRUCTURING CONFEDERATION 5th International Meeting Barcelona, Spain Contact: 1-703-449-1316 September 27-28, 1999 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Conference on Corporate Reorganizations Regal Knickerbocker Hotel, Chicago, Illinois Contact: 1-903-592-5169 or ram@ballistic.com October 5-6, 1999 INTERNATIONAL WOMEN'S INSOLVENCY AND RESTRUCTURING CONFEDERATION Fall International Meeting San Francisco Marriott, San Francisco, California Contact: 1-703-449-1316 October 6-9, 1999 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES 73rd Annual Meeting San Francisco Marriott, San Francisco, California Contact: 1-803-957-6225 October 22-26, 1999 TURNAROUND MANAGEMENT ASSOCIATION 1999 Annual Conference The Fairmont--Atop Nob Hill, San Francisco, CA Contact: 1-312-822-9700 or ljfialkoff@turnaround.org November 11-13, 1999 AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION COMMITTEE ON CONTINUING PROFESSIONAL EDUCATION 11th Annual Advanced ALI-ABA Course of Study: The Emerged and Emergine New Uniform Commercial Code New York Hilton Hotel, New York City Contact: 1-800-CLE-NEWS November 17-20, 1999 AMERICAN BAR ASSOCIATION'S LATIN AMERICAN LAW SUBCOMMITTEE & THE ASSOCIATION OF COMMERCIAL BANKS OF THE DOMINICAN REPUBLIC Educational Exchange Case De Campo Resort, LaRomana, Dominican Republic Contact: 1-703-739-0800 November 29-30, 1999 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Distressed Investing '99 The Plaza Hotel, New York, New York Contact: 1-903-592-5169 or ram@ballistic.com December 2-4, 1999 AMERICAN BANRKUTPCY INSTITUTE Winter Leadership Conference La Quinta Resort & Club, La Quinta, California Contact: 1-703-739-0800 February 27-March 1, 1999 NORTON INSTITUTES ON BANKRUPTCY LAW Norton Bankruptcy Litigation Institute I Olympic Park Hotel, Park City, Utah Contact: 1-770-535-7722 March 30-April 2, 1999 NORTON INSTITUTES ON BANKRUPTCY LAW Norton Bankruptcy Litigation Institute II Flamingo Hilton Hotel, Las Vegas, Nevada Contact: 1-770-535-7722 May 4-5, 2000 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Bankruptcy Sales & Acquisitions The Renaissance Stanford Court Hotel San Francisco, California Contact: 1-903-592-5169 or ram@ballistic.com June 29-July 2, 1999 NORTON INSTITUTES ON BANKRUPTCY LAW Western Mountains Bankruptcy Law Institute Jackson Lake Lodge, Jackson Hole, Wyoming Contact: 1-770-535-7722 ********** 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. 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