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/raid1/www/Hosts/bankrupt/TCR_Public/991015.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, October 15, 1999, Vol. 3, No. 200 Headlines AILEEN INC: Objects To Conversion of Case BMJ MEDICAL: Court Approves DIP Financing BREED TECHNOLOGIES: Partnership is Crashing CARVER CORP: Motion To Terminate Exclusivity CODON PHARMACEUTICALS: Hearing To Consider Disclosure Statement COHO ENERGY: Expands On Reason For Chapter 11 Filing COSTILLA ENERGY: Committee Taps Weil, Gotshal & Manges CRIIMI MAE: Merrill Lynch Objects To Bidding Provisions EVANS INC: Converts Chapter 7 Case to Chapter 11 FASTCOMM COMMUNICATIONS: Annual Meeting Set For Late October FRANKLIN COVEY: Plans Core Business Restructuring GREATE BAY: Third Amended Disclosure Statement and Plan GULF STATES STEEL: Seeks Extension of Exclusivity HARNISCHFEGER: Operating Report For Month Ending July 31, 1999 HARVARD INDUSTRIES:Franklin Advisers Own 9.5% Of The Common Stock IRIDIUM: Motorola May Take Charge Related to Bankruptcy JITNEY-JUNGLE: IRT Comments on Bankruptcy LOEHMANN'S: Seeks Approval For Sale of Leases MICHAEL PETROLEUM: Requests Response To Revised Proposal NEXTWAVE: NextWave Telecom Announces iBridge OKURA & CO: Asks Court To Disallow Trustee's Claim OKURA & CO: Disclosure Statement Contains Adequate Information PHONETEL: Opposes Objections of Cerberus To Confirmation of Plan PRESLEY COMPANIES: Special Meeting Called To Consider Merger SAMSONITE: Rights Offering To Holders Of Company's Common Stock SOUTHEAST COMMUNITY: Judge Grants Hospital Two-week Extension SUN HEALTHCARE: Enters Property Agreement With Omega Healthcare SUN HEALTHCARE: Files Voluntary Petition for Bankruptcy VENCOR: New Operating Agreements For Nursing Homes VENTAS, INC: Cohen & Steers Beneficial Owners Of 10.01% Of Stock WESTERN DIGITAL: Retires $125 Million Zero Coupon Debentures BOND PRICING FOR WEEK OF OCTOBER 12,1999 ********* AILEEN INC: Objects To Conversion of Case ----------------------------------------- The debtors, Aileen, Inc. et al. object to the application of the United States Trustee for an order converting the case to a Chapter 7 case. The debtors assert that although they discontinued their business operations, they have, with the concurrence and support of the committee, continued their efforts to dispose of their remaining assets. Through creative partitions of the unsold real estate properties, the debtors have succeeded in concluding three sale transactions within the past 13 months. The debtors seek to close on tow potential sale transactions involving the Edinburg Plant and the Flint Hill Plant. The proposed sale of the Edinburg Plant, if consummated will add $175,000 to the estate and will result in the discharge of l$160,000 mechanic's lien and the payment of more than n $150,000 in unpaid estate taxes. Aileen is hopeful that Rappahannock County will conclude a purchase of the Flint Hill Plant, which would resolve ongoing environmental problems and water contamination at that site, as only a governmental entity will be able to buy that site, and eliminate the problems. The disposition of these plans could at least improve the prospects for a feasible plan. The debtors ask that the Trustee' s motion be denied or in the alternative , that the hearing be delayed until January 14, 2000. BMJ MEDICAL: Court Approves DIP Financing ----------------------------------------- The US Bankruptcy Court for the District of Delaware entered an order extending the DIP Financing provided the debtor to the close of business on January 31, 2000. BREED TECHNOLOGIES: Partnership is Crashing -------------------------------------------- Crain Communications Inc. Automotive News reports on October 11, 1999 that Breed Technologies Inc.'s joint venture with Siemens AG - a partnership formed to produce smart airbags and safety restraint systems - is crashing. Both companies confirmed last week that they are holding talks to dissolve BSRS Restraint Systems GmbH, a two-year-old joint venture. The move followed Breed's Chapter 11 filing in bankruptcy court last month in Delaware. ''Breed could no longer meet its financial obligations due to its precarious business situation,'' said Siemens spokesman David Ladd. Siemens, a large electronics supplier based in Munich, Germany, specializes in electronic sensors and software. Breed, which is based in Lakeland, Fla., makes airbags, inflators, seat belts and other components. Together, the two companies had hoped to challenge the two giants in the safety restraints segment, TRW Inc. and Autoliv Inc. Siemens is expected to find another partner to replace Breed. Industry analyst Scott Upham said the joint venture's dissolution represents ''a disappointment for both.'' BSRS and others who geared up to supply complete safety restraint systems have met intense competition. Moreover, automakers have hesitated to embrace ''one-stop shopping,'' in which the customer buys all safety restraint components from one supplier. Instead, automakers are treating seat belts, inflators and airbags as commodities, seeking the lowest possible price on each. The automakers generally seek separate bids on the all- important electronics and software. Perhaps most important, automakers are very cautiously evaluating smart airbags, which detect a passenger's size and position in an effort to avoid injuries caused by airbags. BSRS's failure is not unique to that industry. Takata Corp., a supplier of seat belts, airbags and electronics, and Temic Bayern-Chemie GmbH dissolved their joint venture in the early 1990s, Upham said. The 50-50 joint venture with Siemens was seen as a coup for Breed when it was formed in 1997. Siemens enjoyed considerable prestige as a first-rate electronics supplier. And Breed obtained a critical cash infusion of $115 million from Siemens as part of its equity stake in the venture. The cash made it possible for Breed to acquire AlliedSignal Inc.'s safety restraints division in 1997. The AlliedSignal business doubled Breed's revenues and rounded out its product offering, making it North America's largest seat belt supplier. But the AlliedSignal unit failed to deliver the cash flow needed to cover Breed's hefty debts. Siemens says the impending demise of the joint venture has not discouraged it from pursuing the safety restraints business. Electronics are the key components in future airbag systems, said spokesman Ladd. The two partners will reclaim the plant and equipment each contributed to the joint venture. Siemens supplied its crash-test facility in Alzenau, Germany, along with test equipment and offices. Breed supplied the Sterling Heights, Mich., test facility it had obtained from AlliedSignal. Most of the joint venture's 240 employees will be transferred to their respective companies. However, Siemens won't get much back for its $115 million investment. As part of the original deal, Siemens had obtained a 13 percent equity stake in Breed stock. Breed shares, which once traded as high as $45, were selling last week for 38 cents. CARVER CORP: Motion To Terminate Exclusivity -------------------------------------------- The Ad Hoc Equity Committee of the debtor, Carver Corporation, seeks an order terminating the exclusivity period and allowing the Equity Committee to submit a competing plan of reorganization. The Committee states that Robert W. Carver, President of the debtor ahs proposed a plan that involves a purchase of the debtor by Carver's company, Sunfire corporation. The Equity Committee believes that Carver has under-valued the debtor, offering unsecured creditors 50 cents on the dollar. In this case, Equity argues that there is an advantage to allow a competing plan. The Equity Committee believes it can propose a plan that will further improve the e treatment of the debtor's creditors, either directly or indirectly. CODON PHARMACEUTICALS: Hearing To Consider Disclosure Statement --------------------------------------------------------------- A hearing will be held on November 3, 1999 at 10:00 AM before the Honorable Joseph J. Farnan Jr. in the US District Court for the District of Delaware, 844 King Street, 5th Floor, Wilmington, Delaware to consider the adequacy of the information contained in the disclosure statement of Codon Pharmaceuticals, Inc. and Oncor, Inc. COHO ENERGY: Expands On Reason For Chapter 11 Filing ---------------------------------------------------- Coho Energy, Inc. has indicated that the decision to seek protection under Chapter 11 of the U.S. Bankruptcy Code was taken by Coho and certain subsidiaries because the company now believes that the resolution of a restructuring could not be completed without the protection and assistance of the bankruptcy court. Timing of the bankruptcy filing was imposed by several factors including the acceleration of the company's $240 million indebtedness by its bank creditors on August 19th, the inability of the banks and the bondholders (the two large creditor groups) to reach a satisfactory agreement with each other, and the potential for one of the bondholder's being granted a summary judgement in its lawsuit against the company for full payment of principal and past due interest. The lack of liquidity during the restructuring period has made the process of working through this problem more difficult. Coho is continuing to discuss a solution to its capital needs with the banks, the bondholders and other potential investors. The company expects to file a plan of reorganization with the bankruptcy court in the near future. Coho Energy Inc., is a Dallas based independent oil and gas producer focusing on exploitation of underdeveloped oil properties in Oklahoma and Mississippi. COSTILLA ENERGY: Committee Taps Weil, Gotshal & Manges ------------------------------------------------------ The statutory committee of unsecured creditors appointed in the Chapter 11 case of Costilla Energy, Inc. applies for approval to employ and retain Weil, Gotshal & Manges LLP as counsel for the Committee. CRIIMI MAE: Merrill Lynch Objects To Bidding Provisions ------------------------------------------------------- Merrill Lynch Mortgage Capital Inc., the debtor's largest creditor, objects to the motion to approve bidding protection provisions of the Apollo Stock Purchase agreement and deposit escrow agreement. The Bid Protection Motion seeks approval of the "bidding protection provisions" contained in the Stock Purchase Agreement executed by CMI and AP-CM, LLC on September 9, 1999. Merrill Lynch states that pursuant to the stock purchase agreement, and under certain circumstances, Apollo may make an equity investment in the debtor. There are contingencies that would allow Apollo to terminate the agreement at no cost to itself. Merrill Lynch specifically objects to the "lock-up provision" which places serious obstacles before any interested potential investor and serves to discourage rather than encourage, other bidders from competing with Apollo. Apollo is also granted a substantial break-up fee despite the fact that Apollo is not obligated to do anything under the Stock Purchase Agreement. Merrill Lynch asserts that the chilling effect of the Lock-Up is detrimental to the parties-in-interest, and the Break-Up fee would be a windfall to Apollo. EVANS INC: Converts Chapter 7 Case to Chapter 11 ------------------------------------------------ Evans Inc. has converted its Chapter 7 involuntary bankruptcy filing into a voluntary Chapter 11 reorganization case, according to an Oct. 12 petition filed with the U.S. Bankruptcy Court in Manhattan. The company's Chapter 11 petition was filed under its Evans-Rosendorf of Maryland Inc. and Koslow's Inc. affiliates. The company listed assets and liabilities of $39.8 million and $30.1 million, respectively. (The Daily Bankruptcy Review and ABI October 14, 1999) FASTCOMM COMMUNICATIONS: Annual Meeting Set For Late October ------------------------------------------------------------ The annual meeting of shareholders of FastComm Communications Corporation, a Virginia corporation, will be held on October 28, 1999, at 4:30 p.m. local time, at the Holiday Inn, Holiday Drive, Sterling, Virginia for the following purposes: 1. To elect four (4) directors of the company; 2. To consider and act upon a proposal to approve a 1999 Stock Option Plan; and 3. To ratify the appointment of BDO Seidman, LLP as the independent auditors for the company for the fiscal year ending April 30, 2000; FRANKLIN COVEY: Plans Core Business Restructuring ------------------------------------------------- Franklin Covey Co., Salt Lake City, said Monday that it plans to restructure its core business through job cuts, new acquisitions and an increased online presence, according to Reuters. The company, which specializes in time-management products and seminars, had reported a fourth quarter net loss of $21.6 million and a profit of $15.6 million, and says it plans to reduce its worldwide workforce of 4,200 by 600 positions. The company also plans to sell Publishers Press, its commercial printing arm, and has acquired Professional Resources Organization, which specializes in measuring the impact and return on corporate investments in training and consulting. The deal is expected to close by the end of the first quarter of fiscal 2000.(ABI 14-Oct- 99) GREATE BAY: Third Amended Disclosure Statement and Plan ------------------------------------------------------- Treatment of Claims under the plan: Class Description Estimated Amount Terms ----- ----------- ---------------- ----- Class 1 Priority Claims de minimus Paid in full Class 2 Allowed Claims of old notes $191,473,000 Satisfied by new notes and new common stock (approx. 83% to 99% of claim) Class 3 Other secured claims $400,000 Paid in full or otherwise treated under plan Class 4 General unsecured claims $7M Pro rata payment (approx. 60% of claim) Class 5 Intercompany Notes $18,482,000 New notes in full amount of claim Class 6 Subordinated claims 0 none Class 7 Old Common Stock n/a none GULF STATES STEEL: Seeks Extension of Exclusivity ------------------------------------------------- The debtor states that this is a complex and large case. The debtor has not yet proposed or filed a plan of reorganization, and it would have been impossible to do so due to the volume of work required and the existence of various contingencies that must be resolved before a plan can be prepared. The debtor used its initial exclusive period to resolve its liquidity crisis and to formulate its positions with respect to individual equipment lessors and financiers and to prepare a business plan. The debtor still needs to obtain a lender and investors to provide financing or capital, obtain a federal loan guaranty, negotiate a new collective bargaining agreement, settle potential environmental claims with the Department of Justice; and await expiration of the November 29, 1999 bar date. The debtor requests that the court enter an order extending the exclusive plan period and the exclusive acceptance period to February 29, 2000 and April 30, 2000 respectively. A hearing will be held on October 22, 1999 at 9:30 AM to consider the debtor's motion. HARNISCHFEGER: Operating Report For Month Ending July 31, 1999 -------------------------------------------------------------- HARNISCHFEGER INDUSTRIES, INC. Consolidated Balance Sheet ------------------------------ 31-Jul-99 Total Assets $2,448,520,000 Total Liabilities $2,448,520,000 HARNISCHFEGER INDUSTRIES, INC. Consolidated Statement of Income -------------------------------- Month Ending 31-Jul-99 REVENUES Net sales and other income total 423,118,000 Net Income ($1,019,403,000) HARNISCHFEGER INDUSTRIES, INC. Consolidated Statement of Income -------------------------------- 9 Months Ended 31-Jul-99 ---------------- REVENUES Net sales and other income total 1,377,447,000 Net Income ($1,110,060,000) HARVARD INDUSTRIES:Franklin Advisers Own 9.5% Of The Common Stock ----------------------------------------------------------------- The securities reported here are beneficially owned by one or more open or closed-end investment companies or other managed accounts which are advised by direct and indirect investment advisory subsidiaries of Franklin Resources, Inc. These advisory contracts grant to the adviser subsidiaries all investment and/or voting power over the securities owned. Therefore, the adviser subsidiaries are deemed to be the beneficial owners of said securities. Charles B. Johnson and Rupert H. Johnson, Jr. each own in excess of 10% of the outstanding common stock of Franklin Resources Inc. and are the principal shareholders of that company. Sole power to vote or to direct the vote on the common stock shares of Harvard Industries, Inc. held by Franklin Resources, Inc. is as follows: Franklin Resources, Inc.: 0 Charles B. Johnson: 0 Rupert H. Johnson, Jr.: 0 Franklin Advisers, Inc.: 939,290 Sole power to dispose or to direct the disposition of the shares held belongs to: Franklin Resources, Inc.: 0 Charles B. Johnson: 0 Rupert H. Johnson, Jr.: 0 Franklin Advisers, Inc.: 939,290 The shares held represent 9.5% of the outstanding common stock shares of Harvard Industries, Inc. IRIDIUM: Motorola May Take Charge Related to Bankruptcy -------------------------------------------------------- Motorola Inc., a major shareholder in Iridium LLC, may take further charges against earnings in the fourth quarter related to Iridium's chapter 11 bankruptcy case, The Wall Street Journal reported. Motorola announced Tuesday night that it took a $994 million Iridium-related charge in the third quarter and that if there isn't "significant progress toward the implementation of a financial restructuring of Iridium" by the end of the year, Motorola may take a special charge in the fourth quarter to increase reserves and take any appropriate write-down. Satellite telephone services provider Iridium filed for chapter 11 protection in September. (ABI 14-Oct-99) JITNEY-JUNGLE: IRT Comments on Bankruptcy ----------------------------------------- IRT Property Company (NYSE: IRT) announced today that, based upon a preliminary analysis, yesterday's Chapter 11 bankruptcy filing of Jitney Jungle, which also operates as Delchamps Supermarkets, is expected to have minimal impact on the Company. IRT leases ten stores to Jitney Jungle/Delchamps for a total of 418,000 square feet. Jitney Jungle/Delchamps accounted for 4.9% of the Company's revenues for the year ended December 31, 1998. Two of the ten stores were already closed at the time of the filing. The Company expects that the leases on these two stores will be disavowed and is in various stages of negotiation to re-lease these two stores. Public statements by Jitney Jungle have indicated their filing will not result in additional store closings. Thomas H. McAuley, chairman and chief executive officer, stated, "Jitney Jungle/Delchamps has been a valued tenant for over six years and is a dominant supermarket operator in its core markets of Mississippi, Alabama, Louisiana, and the Florida panhandle. Our conservative philosophy has been to diversify our tenant mix and focus on dominant supermarket-anchored shopping centers in order to minimize any concentration in one tenant. The resulting benefits have been proven time and again throughout our 30-year history, and we will continue to pursue this strategy to create value for our shareholders." A self-administered equity real estate investment trust, IRT specializes in Southeastern United States shopping centers. Anchor tenants include Publix, Kroger, Harris Teeter, Wal-Mart, Kmart and other popular national and regional chain stores. The portfolio of 97 shopping center investments includes approximately 10 million square feet of retail space. LOEHMANN'S: Seeks Approval For Sale of Leases --------------------------------------------- The debtor, Loehmann's Inc. seeks an order approving the assumption, assignment and sale of the debtors interest in certain real property leases. A hearing to consider the motion will be held on October 27, 1999 at 4:00 before the Honorable Mary F. Walrath. Since commencement of the case the debtor obtained an order authorizing it to conduct store closing sales at 14 of its stores. The debtor expects the GOB sale s to be completed in and around November, 1999. In connection with its decision to close the GOB stores, on September 29, 1999, the debtor obtained a court order approving the bidding procedures and setting October 18, 1999 as the auction date for the sale of the leases. The debtor now seeks authority to assume, assign and sell its interests in the leases. The store locations are as follows: Arcadia, CA Daly City, CA West Covena, CA Danbury, CT Ft. Lauderdale, FL Boston, Mass. Burlington, MA Natick, MA Queens, NY Cleveland, OH Cincinnati, OH Memphis, TN Seattle, WA MICHAEL PETROLEUM: Requests Response To Revised Proposal -------------------------------------------------------- On October 5, 1999, representatives of Michael Petroleum Corporation and the company's financial advisor met with representatives of the Unofficial Creditors' Committee for holders of the company's 11 1/2% Senior Notes due 2005 and the Committee's financial advisor, regarding the company's revised debt restructuring proposal to its noteholders. The principal terms of the revised proposal contemplates an exchange of New Senior Notes and common stock of the company for the outstanding indebtedness represented by the Senior Notes. On October 1, 1999 Michael Petroleum did not make its approximately $7.8 million interest payment then due on the Senior Notes. The Indenture governing the terms of the Senior Notes provides for a 30-day grace period before an event of default will occur under the Indenture as the result of a failure to timely pay interest. The proposal would result in the company's existing common stockholders owning 50% of the company's outstanding common stock, immediately following the proposed restructuring. In addition, the existing common stockholders would receive performance-based warrants having exercise prices beginning considerably in excess of the estimated initial fair market value of the restructured company's common stock. The company's representatives requested that the Committee return with a formal response to its revised restructuring proposal by mid-October, with a view toward reaching an agreement in principle concerning the terms of the restructuring by November 1, 1999. Michael Petroleum is continuing to negotiate with its senior bank lender regarding its $23 million outstanding senior bank facility indebtedness. The current terms of this facility require monthly mandatory reductions in the borrowing base, and in total amount outstanding, of $1.5 million per month, beginning on October 31, 1999. Any such payment default or an acceleration in maturity of the company's senior bank indebtedness will constitute an event of default under the Indenture governing the Senior Notes. NEXTWAVE: NextWave Telecom Announces iBridge -------------------------------------------- NextWave Telecom, Inc., today announced its entry into the high- speed wireless Internet market with the introduction of iBridge, the first wireless service specifically designed to provide affordable high-speed Internet access and a low-cost alternative to local telephone service for tens of millions of consumers and small businesses. Based on next-generation digital wireless technology, this leading-edge service will be offered across the country to meet the explosive demand for high-speed access to the Internet. "For the first time millions of consumers and small businesses will have an affordable and convenient way to be freed from their slow dial-up Internet connections and experience the future of broadband, 'always-on', Internet access," said Allen Salmasi, NextWave Telecom's chairman and CEO. iBridge's 'always on' wireless Internet connection ends the inconvenience of dial-up and busy signals, and provides users with Internet access speeds more than 20 times faster than the typical dial-up connection used in American homes. Consumers will experience dramatically reduced waiting times and will finally be able to take full advantage of increasingly popular multimedia Internet applications such as full-motion-video, CD-quality music, interactive education through university and high school extension programs, online three-dimensional gaming, and video conferencing. "Millions of consumers and small businesses have been trapped across the digital divide," added Salmasi. "The problem is that in too many cases, high-speed Internet access is simply not available to consumers and small businesses, or it's just too expensive. That's why less than one percent of the homes and schools in the U.S. have high-speed Internet access today." "iBridge is an innovative, low-cost solution that will be available nationwide, enabling consumers to tap into the full multimedia potential of the Internet. iBridge will also provide residential and small business customers with complete local telephone service. Customers and small businesses will receive up to 16 wireless 'telephone lines' that fully use their house wiring and existing telephones. iBridge can either replace or complement their existing local telephone service." NextWave plans to launch its iBridge service on a commercial basis in San Diego within 60-90 days after its confirmation and will be introduced in over 40 markets, including New York, Los Angeles, Boston, Seattle, Portland, Houston, Baltimore/Washington, D.C., and Denver in 2000. Another advantage to iBridge is its ability to provide customers with rapid service activation. Unlike other approaches to high-speed Internet service, such as DSL or cable modems, that often require customers to wait weeks or months for activation, NextWave's iBridge is designed to provide customer activation within forty-eight hours of the time an order is placed. "Because iBridge is wirefree, we don't have to dig up neighborhoods laying expensive cables or new telephone lines to the customer's home or business in order to provide our service. In many cases we expect to activate a customer the same day they place an order within our coverage area, including areas not currently served by cable, copper wire or fiber installations," Salmasi said. "NextWave's investors and vendors have pledged nearly a billion dollars of new equity to support and enable the independent build-out of the Company's innovative nationwide broadband fixed wireless and PCS network," said Salmasi. "The solid commitment provided to NextWave by the investment community and equipment vendors also extends to supporting the Company as it works towards confirmation of its reorganization plan." NextWave, which is currently operating under bankruptcy protection, expects confirmation of its reorganization plan and its emergence from Chapter 11 before the end of the year. NextWave will offer its iBridge service to consumers and small businesses through a network of highly experienced service distribution partners uniquely qualified to market and support the iBridge service. The Company intends to partner with Internet Service Providers ("ISPs"), Internet portal and content providers, long distance companies, Competitive Local Exchange Carriers ("CLECs"), Incumbent Local Exchange Carriers ("ILECs"), Value-Added Resellers (VARs) and other companies to distribute its iBridge service. NextWave's wholesale business plan has also long been recognized as an unparalleled opportunity for minority and other small business entities to enter the wireless business through resale. About NextWave NextWave Telecom, Inc., (www.nextwavetel.com) was organized in 1995 as a leading provider of wireless high-speed Internet access and voice communications services to the consumer and business market on a nationwide basis. NextWave holds a total of 95 PCS licenses, covering more than 166 million POPs coast to coast, that include all top 10 U.S. markets, 28 of the top 30 markets, and 40 of the top 50 markets. NextWave's carriers' carrier strategy will allow existing carriers and new service providers to market NextWave's network services through wholesale airtime arrangements offered by the company. In September 1999, NextWave announced that its Plan of Reorganization had been approved by its creditors and shareholders and that Texas Pacific Group, Oak Investment Partners and BFD Equity Associates are leading an investor group that has committed over $ 700 million of new equity to support NextWave's Plan of Reorganization. Other major investors include Bay Harbour Management, Joseph Littlejohn & Levy, Canyon Capital and other major financial institutions. OKURA & CO: Asks Court To Disallow Trustee's Claim --------------------------------------------------- The Trustee filed a claim, on behalf of Okura Japan in the debtor's case for the amount of $140,319,654. Okura America has also filed a proof of claim in the Japanese proceeding, asserting claims in the aggregate amount of $131,455,644. The debtor asserts that the claims asserted by the Trustee are not valid and should therefore be disallowed and expunged in its entirety. Because Okura Japan has not paid the Banks in full, and according to information given the debtor has not paid the Banks at all, the Trustee's Guaranty Claims against the debtor must b3e denied. The debtor also complains that the Trustee has provided the debtor with insufficient evidence to determine the validity of the Operating Claims. Even assuming that the claims are valid, the debtor states that they should be reduced to zero as a result of the debtor's setoff against such claims. OKURA & CO: Disclosure Statement Contains Adequate Information -------------------------------------------------------------- By order of the US Bankruptcy Court, Southern District of New York, the First Amended Disclosure Statement of the debtor, Okura & Co.(America) Inc. was approved on October 4, 1999. The hearing on the confirmation of the plan shall be held on November 12, 1999 at 10:30 AM in Courtroom 523, One Bowling Green, 5th Floor, New York. PHONETEL: Opposes Objections of Cerberus To Confirmation of Plan ---------------------------------------------------------------- PhoneTel Technologies, Inc. and Cherokee Communications, Inc., debtors, oppose the objections of Cerberus Partners LP to confirmation of the debtors' plan. Confirmation of the plan will effectuate the conversion of the claims of the holders of PhoneTel's 12% Senior Notes into equity interests in reorganized PhoneTel, which will in turn enable the debtors to emerge from bankruptcy with improved capital structures and balance sheets and significantly reduce debt service obligations. In order to gain acceptance of the plan, the Unofficial Noteholders' Committee agreed to permit a recovery on account of a majority of equity interests. Cerberus is a holder of certain warrants and it contends that it must be treated as a general unsecured creditor under the plan. The debtors assert that on account of such warrants Cerberus is properly classified and treated under the plan as holding equity interests. PRESLEY COMPANIES: Special Meeting Called To Consider Merger ------------------------------------------------------------ A special meeting of stockholders of The Presley Companies will be held at the executive offices of The Presley Companies, located at 19 Corporate Plaza, Newport Beach, California, on Friday, November 5, 1999 at 6:30 a.m. Pacific Time. Stockholders will consider and vote upon a proposal to adopt a certificate of ownership and merger underwhich The Presley Companies will merge with and into Presley Merger Sub, Inc., a newly-formed Delaware corporation and wholly owned subsidiary of The Presley Companies, with Presley Merger Sub, Inc. being the surviving corporation. In the merger, each outstanding share of common stock of The Presley Companies will become exchangeable for 0.2 share of common stock of Presley Merger Sub, Inc. Upon completion of the merger, the surviving corporation will be named "The Presley Companies." The Board of Directors of Presley fixed September 15, 1999 as the record date to determine the stockholders entitled to notice of and to vote at the special meeting. For the proxy statement and prospectus access http://www.sec.gov/cgi-bin/srch-edgar?0000892569-99-002623on the Internet, without charge. SAMSONITE: Rights Offering To Holders Of Company's Common Stock --------------------------------------------------------------- Samsonite Corporation is distributing to the holders of its common stock transferable rights to purchase up to an aggregate of 12,500,000 shares of its common stock at a cash subscription price of $6.00 per share. The total purchase price of shares offered in this rights offering will be $75,000,000 if the rights offering is fully subscribed. No person will be entitled to receive rights unless he or she was a stockholder of record as of the close of business on September 30, 1999. The rights will expire if they are not exercised by 5:00 p.m., New York City time, on October 29, 1999, the expected expiration date of this rights offering. The company may, in its sole discretion, extend the period for exercising the rights. Rights which are not exercised by the expiration date of the rights offering will expire and will have no value. SOUTHEAST COMMUNITY: Judge Grants Hospital Two-week Extension -------------------------------------------------------------- Washington Bankruptcy Judge S. Martin Teel Jr. has set an Oct. 27 deadline for the Greater Southeast Community Hospital to find a new investor or liquidate, according to The Washington Post. Creditors, who are owed about $70 million, agreed yesterday to give hospital officials more time to seek financing and prevent the hospital from closing, but they are not likely to agree on another extension. D.C. Mayor Anthony Williams said last week that the city would not bail the hospital out again; since May it has directed $8.5 million to the hospital, including a $3.1 million loan that the hospital must repay. Doctors Community Healthcare Corp., Scottsdale, Ariz., has offered $24 million for the hospital. The Alexandria, Va. U.S. Trustee's office asked Judge Teel to order the hospital to retain separate attorneys for each of its four subsidiaries and corporate entities, instead of relying on hospital attorney David E. Rice. B. Amon James of the trustee's office said that Rice should not be allowed to represent all of them because the facilities have borrowed, lent or transferred money to one another, and each would have to protect its conflicting interests in the event of a sale, liquidation or litigation. Judge Teel overruled Amon's objection but did say he would appoint a special counsel later if the conflicts become more clearly defined. (ABI 14-Oct-99) SUN HEALTHCARE: Enters Property Agreement With Omega Healthcare --------------------------------------------------------------- Omega Healthcare Investors, Inc. (NYSE:OHI) ("Omega") announced it has entered into a comprehensive property agreement with Sun Healthcare Group, Inc., Albuquerque, New Mexico ("Sun"). The agreement was reached in anticipation of and in connection with Sun's filing today for Chapter 11 reorganization with the Federal Bankruptcy Court at Wilmington, Delaware. Omega owns and leases fifty-four properties to Sun under long-term operating leases involving an original Omega investment of $ 239 million and annual current rents of $ 25.3 million. The agreement will be promptly submitted for bankruptcy court approval and is intended to result in confirmation of master leases with respect to fifty healthcare properties in fourteen states. The agreement provides that Omega will forbear from taking action to recover possession of the properties or otherwise enforce its rights, pending action by the bankruptcy court approving the agreement. The fifty properties, whose leases are to be confirmed by the court, have current operating coverages of 2.0, an original investment of $ 219 million and $ 23.2 million in annual rents. Four facilities involving an original investment of $ 19.8 million and annual rents of $ 2.1 million will be transitioned to other operators after entry of the court order. All four properties are the subject of negotiations with new operators and will be managed for the account of Omega if operating leases are not in place upon entry of the court order. The re-acquired properties have coverages under 1.0 and the near term FFO impact from the agreement is expected to be approximately $ 1.8 million annually ($ .09 per share), beginning in the fourth quarter. Sun is current in its rental payments to Omega through the month of October on all fifty-four properties and Omega holds security deposits of $ 3.4 million in cash or letters of credit. Omega will actively monitor and manage its position pending receipt of the confirming court order. Omega also holds mortgages on four properties currently owned and leased by third parties to Sun, which are not affected by the agreement. These properties have interest coverage of 2.0. Essel W. Bailey, Jr., Chief Executive Officer, stated: "We are pleased to reach agreement to define our ongoing relationship with Sun. Sun executives have been forthright and decisive and have managed the process well. Both Omega and Sun want this reorganization to occur in a manner least likely to disrupt patients or adversely affect patient care. We expect Sun to maintain the high standards of patient care which it has always delivered, and this agreement assures us and regulatory authorities that care of patients will continue to receive high focus." Mr. Bailey continued: "The present operating environment is a challenge to all operators and investors in the healthcare industry. To illustrate the turmoil, two of the re-acquired properties operated profitably with satisfactory coverages prior to the implementation of PPS rates in January. Our ability to quickly bring matters to closure with Sun will benefit the company and free Omega executives to concentrate on other opportunities and challenges, avoiding time-consuming litigation. We expect that our agreement will be confirmed by the court within approximately 45 days." Omega is a Real Estate Investment Trust investing in and providing financing to the long-term care industry. As of September 30, 1999, its portfolio includes 241 healthcare and assisted living facilities with more than 25,000 beds located in 29 states and operated by 28 independent healthcare operating companies. SUN HEALTHCARE: Files Voluntary Petition for Bankruptcy -------------------------------------------------------- Sun Healthcare Group, Inc. (OTC Bulletin Board: SHGE) announced today that Sun and its U.S. operating subsidiaries have filed voluntary petitions with the U.S. Bankruptcy Court for the District of Delaware to reorganize under chapter 11 of the U.S. Bankruptcy Code in order to restructure the company's debt obligations. The company elected to seek court protection in order to facilitate its efforts to restructure its capital and lease obligations. To ensure that the company has the short-term working capital necessary to operate its business, it has obtained a commitment for up to $200 million in debtor-in-possession ("DIP") financing with a group led by The CIT Group/Business Credit, Inc. and Heller Healthcare Finance, Inc. Sun has requested the Court's permission to access the DIP financing to fund normal business operations and other cash needs during the bankruptcy proceeding. "Deep cuts in Medicare reimbursement exceeded all industry expectations, and severely impacted the company's ability to service its current capital structure. This situation, coupled with a significant decline in the market demand for ancillary services, resulted in the need for us to lower our operating costs and significantly reduce our indebtedness," said Andrew L. Turner, Sun's chairman and chief executive officer. Mark Wimer, president, added, "Most important, court protection under chapter 11 ensures that we can continue to serve our patients and our customers' patients while we reorganize." Because of significant debt repayment obligations, the company has been in negotiations with its banks and senior bond holders in anticipation of the need to restructure its obligations. The company believes that it is close to reaching an agreement with the banks and bond holders on the key terms for a financial restructuring. The Court protection afforded by chapter 11 will enable the company to develop a plan of reorganization with the goal of emerging from bankruptcy in a stronger financial position. The company is also in discussions with some of the owners of the nursing homes it operates in an effort to renegotiate certain leases. Headquartered in Albuquerque, N.M., Sun Healthcare Group, Inc. is a diversified international long-term care provider. Sun companies operate long-term and postacute care facilities in the United States, the United Kingdom, Spain, Germany and Australia. Sun subsidiaries provide therapy and pharmacy services, fulfill the medical supply needs of nursing homes, and offer a comprehensive array of ancillary services for the healthcare industry. VENCOR: New Operating Agreements For Nursing Homes -------------------------------------------------- Vencor is party to five triple-net nursing home Operating Leases located in: Grand Prairie, TX Lubbock, TX (two) McBain, MI Deckerville, MI After suffering operating losses from its operation of these five Facilities, Vencor sublet the Texas Facilities to Texas Health Enterprises, Inc., and Health Enterprises of Michigan, Inc. (a THEI affiliate), charging THEI annual rent approximately $135,000 more than Vencor paid to HCPI and Mr. Doyle. THEI couldn't make money operating the Facilities either, filed its own chapter 11 cases, rejected the Subleases and, over Vencor's objection, obtained permission from the Texas Bankruptcy Court to close the Facilities and transfer residents to other facilities operated by THEI. Negotiations between Vencor and THEI followed. Vencor paid THEI $155,000 in order to keep the Facilities open and locate new operators. After an exhaustive search, Vencor located new operators with which Vencor has, subject to Judge Walrath's approval, entered into agreements with new operators. Accordingly, with the new Operating Agreements in place, Vencor will pay out $1,117,727 more to the Landlords than it collects from the New Operators. Vencor computes that immediate rejection of the subleases would expose it to $1,464,268 of rejection damage claims. The Debtors argue this is the best course of action at this time, and is a reasonable exercise of their business judgment, because closing the Facilities would do irreparable harm to those operations. Entry into the New Operating Agreements, the Debtors suggest, will keep their options open as to the ultimate disposition of these Facilities. (Vencor Bankruptcy News Issue 4; Bankruptcy Creditor's Service Inc.) VENTAS, INC: Cohen & Steers Beneficial Owners Of 10.01% Of Stock ---------------------------------------------------------------- The investment advisor firm of Cohen & Steers Capital Management, Inc., beneficially owns 10.01% of the outstanding common stock of Ventas, Inc. The firm exercises the sole voting power of 5,939,000 shares, and sole dispositive power over 6,801,400 shares. WESTERN DIGITAL: Retires $125 Million Zero Coupon Debentures ------------------------------------------------------------ On October 6, 1999, Western Digital Corporation settled a transaction retiring in the aggregate $125 million principal amount of its Zero Coupon Convertible Subordinated Debentures due 2018 in exchange for shares of its common stock. As a result of this transaction and previous transactions, the company has retired debentures in the aggregate principal amount of $432.1 million and issued in exchange 15,058,855 shares of common stock. The total number of shares of common stock outstanding as of October 6, 1999, following these transactions, was 112,323,538. BOND PRICING FOR WEEK OF OCTOBER 12,1999 ======================================== DLS Capital Partners, Inc., bond pricing for week of October 12, 1999 Following are indicated prices for selected issues: Acme Metal 10 7/8 '07 18 - 20 (f) Amer Pad & Paper 13 '05 22 - 26 Asia Pulp & Paper 11 3/4 '05 69 - 70 E & S Holdings 10 3/8 '06 38 - 42 Fruit of the Loom 8 7/8 '06 40 - 44 Geneva Steel 11 1/2 '01 19 - 20 (f) Globalstar 11 1/4 '04 62 - 64 Hechinger 9.45 '12 9 -12 (f) Integrated Health 9 1/2 '07 7 - 10 (f) Iridium 14 '05 11 - 12 (f) Just For Feet 11 '09 15 - 18 Loewen 7.20 '03 48 - 50 (f) Planet Hollywood 12 '05 28 - 30 (f) Purina Mills 9 '10 22 - 26 (f) Revlon 0 '01 15 - 17 Service Merchandise 9 '04 13 - 15 (f) Sunbeam 0 '18 16 - 17 TWA 11 3/8 '06 48 - 50 United Artists 9 3/4 '08 24 - 28 Vencor 9 7/8 '05 20 - 22 (f) Zenith 6 1/4 '11 17 - 20 (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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