/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/991021.MBX T R O U B L E D C O M P A N Y R E P O R T E R Thursday, October 21, 1999, Vol. 3, No. 204 Headlines ALLIED HEALTH: Files Chapter 7 BIKES USA: To Liquidate Before Year's End BRUNO'S: Seek Extension To Assume/Reject Leases CALIFORNIA COASTAL: Edelman Group Owns 7.46% Common Stock CALIFORNIA COASTAL: Stockholders Approve Restrictions COMPLETE MANAGEMENT: Case Summary & Largest Unsecured Creditors COMPLETE MANAGEMENT: Files Chapter 11 ERLY INDUSTRIES: Disagreement With Deloitte & Touche FAVORITE BRANDS: Seeks Approval of Asset Purchase Agreement FILENE'S BASEMENT: Seeks Court Approval of (New) Professionals FORCENERGY: Parties Objects to Disclosure Statement GOLDEN STAR: Acquires 70% Of Ghanaian Gold Mining Company INCOMNET INC: Order Honoring Employee Benefits INTERNATIONAL PRECIOUS: Meeting of Creditors KENETECH: Court Denies Former Holders of Preferred Stock LOEWEN: Schedules of Assets and Liabilities Presented To Court LOEWEN: Seek Court OK To Hire Zolfo Cooper LONG JOHN SILVER'S: Stipulation Regarding Insurance Policies MARVEL ENTERPRISES: Sells Italian Subsidiary: Panini SpA NATIONAL RESTAURANTS: Bar Date for Filing Proofs of Claim NU-KOTE: Hearing on Creditors' Disclosure Statement PRICHARD ALA: Lists $2.7 Million Liabilities READING CHINA: Seeks To Retain Auditors of Plan RUSSELL CAVE: Operating Report For Month Ending 9/30/99 SEMI-TECH: Seeks Time To Assume/Reject Unexpired Leases STARTER: Order Authorizes Retention of DJM Asset Management SUN HEALTHCARE: Seeks Approval of $200 Million DIP Financing Pact SUN HEALTHCARE: Trustee Schedules Meeting of Creditors TRANSTEXAS: High River Asks To File Fraudulent Transfer Complaint UNIVERSAL SEISMIC: Motion For Substantive Consolidation ********* ALLIED HEALTH: Files Chapter 7 ------------------------------ On October 14, 1999, Allied Health Options, Inc. ("AHO"), a wholly owned subsidiary of United Medicorp, Inc., (OTC Bulletin Board: UMCI) filed a voluntary petition in the United States Bankruptcy Court for the Northern District of Texas to liquidate pursuant to Chapter 7 of Title 11 of the United States Bankruptcy Code. The filing was made primarily due to the insolvency of AHO. At October 14, 1999, the net liabilities of AHO totaled approximately $1.8 million of which approximately $700,000 represents unsecured intercompany loans from United Medicorp, Inc. Based in Dallas, Texas, United Medicorp, Inc., provides medical insurance claims processing, accounts receivable management, collection agency services to healthcare providers nationwide and interim staffing services to healthcare business offices. BIKES USA: To Liquidate Before Year's End ----------------------------------------- Yesterday an Alexandria, Va. bankruptcy judge approved a motion to liquidate Bikes USA, an Alexandria-based chain of bicycle stores, The Washington Post reported. Citing heavy debt associated with aggressive expansion and declining bikes sales across the country, the company field for chapter 11 protection earlier in the month. The company also cited the growing popularity of in-line skating and the very hot, dry summer that kept a lot of "casual" bicyclists indoors. Bikes USA listed $2 to $10 million in assets and $10 to $50 million in liabilities. CFO Randy Gillet said yesterday that the company "has always been over-leveraged, but the problem was exacerbated by the weather. We just ran out of liquidity." Gillett also said the company's lender, Paragon Capital LLC, has pressured the retailer to begin early going-out-of-business sales. Paragon CEO Stewart Cohen said "It's not in our tactics to pressure anybody," but he did say that it made little sense for the company to continue hemorrhaging money. "The company either had to be sold or liquidated," Cohen said. Bikes USA, which operates 11 stores in the Washington area, four in Atlanta, three in Miami, two in North Carolina and one in Orlando, Fla., began as the Bicycle Exchange in 1978. (ABI 20-Oct-99) BRUNO'S: Seek Extension To Assume/Reject Leases ----------------------------------------------- The Debtors ask the Court for a Fourth, and final, extension of the deadline within which, pursuant to 11 U.S.C. Sec. 365(d)(4), they must decide whether to assume or reject each of their non- residential real property leases. The Debtors ask that the deadline be extended through confirmation of their plan of reorganization. The Debtors tell Judge Robinson that it is clear a plan of reorganization will be confirmed in these cases and that confirmation will occur in a relatively short period of time. Moreover, the Debtors have made substantial progress in rationalizing their real estate holdings. The Debtors suggest that the bulk of their leases will be assumed under the plan that is ultimately confirmed. The Debtors are, however, focusing their attention on a small group of marginally performing stores that may be closed before these are concluded. (Bruno's Bankruptcy News Issue 26; Bankruptcy Creditor's Service Inc.) CALIFORNIA COASTAL: Edelman Group Owns 7.46% Common Stock --------------------------------------------------------- A.B. Edelman Management Company, Inc. owns 362,403 shares (comprised of shares owned by Edelman Value Partners, L.P.) of the common stock of California Coastal Communities Inc. with shared voting and dispositive power. This amount represents 3.60% of the outstanding common stock of California Coastal Communities. Asher B. Edelman & Associates LLC owns 387,716 shares (comprised of shares owned by Edelman Value Fund, Ltd.)with shared voting and dispositive power. This amount represents 3.85% of the outstanding common stock of California Coastal Communities. Asher B. Edelman owns 750,119 shares (comprised of shares owned by Edelman Value Partners, L.P. and shares owned by Edelman Value Fund, Ltd.) with shared voting and dispositive power, representing 7.46% of the outstanding common stock of California Coastal Communities. Edelman Value Fund, Ltd. owns 387,716 shares with shared voting and dispositive power and representing 3.85% of the outstanding shares of common stock of California Coastal Communities. Edelman Value Partners, L.P. owns 362,403 shares with shared voting and dispositive power and representing 3.60% of the outstanding shares of common stock of California Coastal Communities. CALIFORNIA COASTAL: Stockholders Approve Restrictions ----------------------------------------------------- California Coastal Communities, Inc., in response to an unsolicited written consent from a majority of its stockholders, has amended its certificate of incorporation in order to preserve the ability of the company to utilize its $190 million of tax loss carryforwards. The amendments prohibit future purchases of the company's common stock by persons who would become new 5% holders, and also prohibit current holders of over 5% from increasing their positions, except in certain permissible circumstances which would not jeopardize the company's ability to use its tax loss carryforwards. As a result of transactions by holders of over 5% of the company's common stock and repurchases by the company over the past year, the company has experienced an ownership shift of approximately 38%. Since under the Internal Revenue Code the company's use of its tax loss carryforwards would be severely restricted (based on its market capitalization) if it experiences an ownership change of 50% or more, the company's majority stockholders requested that the Board of Directors enact the amendments, which have been determined to be in the best interests of the company and its stockholders. COMPLETE MANAGEMENT: Case Summary & Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Complete Management Inc. 245 West 31st Street, Mezzanine New York, NY 10001 Type of business: The debtor was a physician practice management company that provid4ed non-medical management services to physicians' practices. It is now a healthcare financial services company, providing asset-based lending, billing, collection and other services to healthcare entities. Court: Southern District of New York Case No.: 99-10857 Filed: 10/12/99 Chapter: 11 Debtor's Counsel: Alec P. Ostrow Salomon Green & Ostrow, P.C. 919 Third Avenue New York, NY 10022-3904 (212) 319-8500 Fax : (212) 319-8505 Email: ostrow@salomongreenostrow.com Total Assets: $144,094,087 Total Liabilities: $89,600,000 No. of shares of preferred stock 0 0 No. of shares of common stock 14939730 983 20 Largest Unsecured Creditors: Name Nature Amount ---- ------ ------ Prospect Street High Income Portfolio Inc. Debentures $8.7 million Barry W. Blank Debentures $5.9 million Paulson Investment Co. Debentures $4.3 million Jonathan Stanton Co. Debentures $2.4 million Green Tree Vendor Svcs. Corp. Judgment $1.2 million Arthur Andersen LLP Computer Consulting $1.1 million Robert A. Levinson Debentures $900,000 Medic Vision IT Healthcare $846,192 Copelco Copiers, FAX Machines $750,000 Illiana Douglas Debentures $330,000 Jefferson Medical Medical supplies $300,000 Sanwa Bank Teleradiology Project $300,000 Dr. Sidney G. Friedman Debentures $268,000 RA Properties, Ltd. Debentures $200,000 Sheela D. Havas Trust Debentures $200,000 Ray W. Rowney, Jr. Debentures $180,000 Dr. Singh CMI Liability $170,000 Allied St. George Office Lease $120,000 Edward H. Gold Debentures $101,000 CTC Communications Telephone Services $100,000 COMPLETE MANAGEMENT: Files Chapter 11 ------------------------------------- Complete Management Inc. (CMI), New York, filed a voluntary petition for reorganization with the US Bankruptcy Court for the Southern District of New York, under Chapter 11 of the U.S. Bankruptcy Code on Tuesday, October 12, 1999. On March 17, 1999 the Company defaulted on its 8% Convertible Subordinated Debentures due August 15, 2003 and its 8% Convertible Subordinated Debentures due December 15, 2003. Since then, CMI has worked with an informal committee of debentureholders to finalize a term sheet for a plan of reorganization. The Term Sheet between the Company and the Debentureholders Committee was signed on Friday, October 8, 1999. The Term Sheet proposes an exchange of debt for equity in a reorganized CMI. In the Chapter 11 filing, CMI is represented by Salomon Green & Ostrow, P.C. as legal advisor and by Loeb Partners Corporation as financial advisor. The Debentureholders Committee is represented by Kelley Drye & Warren LLP as legal advisor and Houlihan, Lokey, Howard & Zukin as financial advisor. The Chase Manhattan Bank is the Indenture Trustee on the Debentures. The filing in federal court in New York will allow the Company to continue its operations under the protection of the bankruptcy court while it finalizes discussions with Debentureholders and other major creditors on a Plan for Reorganization. The Company will implement a plan to reorganize its capital structure and continue to focus on strengthening the Company's operations and financial position. CMI is a healthcare financial services company. The Company owns Intertech Penta Group, a healthcare billing and collections company based in Syosset, New York. The Company also has a majority stake in CMI Capital, based in Port Washington, New York. CMI Capital is an asset-backed lender to the healthcare industry. In addition, the Company owns Medical Management, Inc. a provider of Magnetic Resonance Imaging services to New York area hospitals. CMI's Chairman and CEO, Steven Rabinovici, stated: "With the Physician Practice Management Business behind us and a reorganized capital structure, we feel that the new CMI can go forward as a profitable healthcare financial services company. This Chapter 11 filing will allow us to work with our creditors on finalizing our restructuring plan. The new Company will be smaller and more focused, with a much reduced debt burden." ERLY INDUSTRIES: Disagreement With Deloitte & Touche ---------------------------------------------------- Deloitte & Touche LLP is no longer serving as the principal accountant for the audit of the financial statements of Erly Industries Inc. In a letter from Deloitte & Touche LLP to the Securities and Exchange Commission dated September 14, 1999, it appears that there is a disagreement between Deloitte & Touche and Erly as to the timing and circumstances of the accounting firm's ceasing to serve as Erly's principal accountant. The company says it believes that Deloitte & Touche ceased to serve in such capacity on or about February 1, 1999. The accounting firm's position is that the client-auditor relationship ended on September 14, 1999. Both parties agree that Deloitte & Touche was not retained to perform an audit of the company's financial statements for the fiscal year ended March 31, 1999. Deloitte & Touche's reports for the years ended March 31, 1997 and March 31, 1996 did not contain an adverse opinion, disclaimer of opinion, modification, or qualification. An audit for the fiscal year ended March 31, 1998 was not completed by Deloitte & Touche in light of the fact that the company filed a voluntary petition for reorganization on September 28, 1998. An audit was not performed for the latest fiscal year ending March 31, 1999 while the company was in bankruptcy proceedings. Prior to Deloitte & Touche's resignation, there were no disagreements between it and present or prior management of Erly Industries on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure. On or about March 1, 1999, Erly engaged Postelwaithe & Netterville, LLP as its principal accountant to audit its financial statements. Postelwaithe & Netterville is currently in the process of auditing Erly's balance sheet at August 20, 1999. The decision to engage Postelwaithe & Netterville was approved by the board of directors. FAVORITE BRANDS: Seeks Approval of Asset Purchase Agreement ----------------------------------------------------------- The debtors, Favorite Brands International Holding Corp. et al. seek approval of an Asset Purchase Agreement by and among the debtors and Nabisco Inc., Nabisco Brands Company and Nabisco Technology Company, purchasers. The debtors seek approval of bidding procedures and the Asset Purchase Agreement. The purchase price is $475 million. A qualified bidder must offer at least $12 million over the purchase price, with increasing increments of $1 million. In the event of a successful bid other than the purchasers', the debtors will pay to the purchasers a termination fee of $8.3 million plus fees and disbursements. Without the approval by the court of the termination fee, the purchasers will withdraw their offer. By order dated October 8, 1999, the Honorable Peter J. Walsh approved the Bidding Procedures. The auction will be held at the offices of Skadden, Arps, Slate, Meagher & Flom, 333 West Wacker, Chicago, Illinois. The auction will begin on November 10, 1999 at 9:00 AM and continue if necessary to November 11, 1999. FILENE'S BASEMENT: Seeks Court Approval of (New) Professionals -------------------------------------------------------------- The debtors, Filene's Basement, Inc. and Filene's Basement Corp. seek an expedited determination of the debtor's application to employ a financial advisor and consultant and accountant and auditor under general retainer. The debtors seek authority to employ Jonathan Altman and Altman and co. as financial advisor and consultant for the debtors under a general retainer for services rendered and to be rendered during the cases. The debtors seek to provide Altman and co. with a retainer in the amount of $100,000, which amount will be paid from the $400,000 retainer which Pricewaterhouse Coopers will return to the debtors. Currently the firm's hourly rates for partners range from $275 to $390. The debtors also seek authority to employ Lewis Jaffe and Arthur Andersen LLP as accountant and auditor for the debtors. The debtors seek to provide Andersen with a retainer in the amount of $100,000, which amount will be paid from the $400,000 retainer which PricewaterhouseCoopers will return to the debtors pursuant to the decision of the court to remove PricewaterhouseCoopers. FORCENERGY: Parties Objects to Disclosure Statement --------------------------------------------------- BP Amoco, Chevron USA Production Company, Great Plains Resources, Inc., Mobil Oil Exploration and Producing Southeast, Inc., and Union Oil Company of California object to the joint Disclosure Statement of Forcenergy Inc. and Forcenergy Resources Inc. The objecting parties have claims against the debtors which are secured by liens on certain of the debtors' property. They have various executory contracts with the debtors in the form of Joint Operating Agreements relating to the purchase of hydrocarbons. The objecting parties allege that in the debtors' plan of reorganization they state that they will reject the Joint Operating Agreements but retain a right to amend that action. The debtors have the same right to amendment with Minerals Leases, Master Service Agreements, Seismic contracts, Oil and Gas Purchase Contracts, Forcenergy Operating Agreements, Office Leases and Farmout Agreements, Easements and Surface Rights. Because of their right to amend their decision to accept or reject these agreements, the objecting parties can not determine whether to accept or reject the plan. Therefore, they conclude that the Disclosure Statement does not contain adequate information for the objecting parties to make a determination. GOLDEN STAR: Acquires 70% Of Ghanaian Gold Mining Company ---------------------------------------------------------- On September 30, 1999, Golden Star Resources Ltd., a Canadian company, and Anvil Mining NL, an Australian company, completed their previously announced acquisition of 70% and 20%, respectively, of the common shares of Bogoso Gold Limited, a Ghanaian company. The Government of Ghana retained its remaining 10% equity interest in Bogoso Gold Ltd. Bogoso Gold Ltd. is the owner of an operating gold mine in the Republic of Ghana, which the company and Anvil intend to continue to operate. The acquisition was completed by way of a purchase agreement among the company, Anvil and a consortium of banks led by the International Finance Corporation and Deutsche Investitions und Entwicklungsgesellschaft mbH of Germany. The initial purchase price for Bogoso Gold Ltd. was $6.5 million, which was funded using working capital and proceeds from the company's August 24, 1999 offering of its subordinated convertible debentures, common shares and warrants. The acquisition also included the assignment to the company and Anvil of 78% and 22%, respectively, of the existing indebtedness of Bogoso Gold Ltd., previously owed to the banks and totaling approximately $34 million. Golden Star Resources and Anvil may be required to make additional future payments to the banks, depending on the then- current price of gold and the potential acquisition of ore in Ghana outside of the region of Bogoso Gold Ltd.'s mining interests. These payments may not exceed $10 million and are expected to be funded from Bogoso Gold Ltd.'s cash flow. The company and Anvil will also pay $5 million to the banks upon the first anniversary of the commencement of commercial mining of sulphide ore at the Bogoso Gold Ltd. mine. INCOMNET INC: Order Honoring Employee Benefits ---------------------------------------------- Judge John E. Ryan entered an order on October 5, 1999 providing that Incomnet Communications Corporation is authorized on an interim basis, to pay any employee who is terminated postpetiton: severance pay and accrued benefits, not to exceed $4,300 per employee. The hearing regarding all other relief requested shall be continued to October 7, 1999 at 9:30 AM. INTERNATIONAL PRECIOUS: Meeting of Creditors -------------------------------------------- A bankruptcy case concerning International Precious Metals Corp. aka International Platinum Corp. was filed on June 19, 1999 and was converted to a case under Chapter 7 on October 1, 1999. A meeting of creditors is set for November 8, 1999 at 8:30 AM at the Office of the US Trustee, 2929 N. Central Avenue, 8th floor, Room 820, Phoenix, Arizona. Proof of claims must be received by the bankruptcy clerk's office by February 7, 2000. The debtor's attorney is Michael W. Carmel, Ltd., 80 E. Columbus Ave., Phoenix, Arizona. KENETECH: Court Denies Former Holders of Preferred Stock -------------------------------------------------------- Kenetech Corporation reports that the Court of Chancery of the State of Delaware entered judgment in favor of Kenetech in an action brought by former holders of its preferred stock. In the action-captioned Quadrangle Offshore (Cayman) LLC and Cerberus Partners, L.P. v. Kenetech Corporation, plaintiffs alleged, among other things,(1) that Kenetech was in liquidation and had been in liquidation prior to the mandatory conversion of the preferred stock on May 14, 1998,(2) that the plaintiffs were entitled to receive a liquidation preference for each share of preferred stock in any distribution Kenetech might make, and(3)that Kenetech had acted in bad faith with respect to the holders of preferred stock. Vice Chancellor Myron T. Steele ruled in favor of Kenetech on all counts and denied the relief requested by plaintiffs. Mark Lerdal, resident and CEO of Kenetech stated, "The company is pleased with the Court's decision. We can now move forward with this cloud removed." LOEWEN: Schedules of Assets and Liabilities Presented To Court -------------------------------------------------------------- The Debtors presented their Schedules of Assets and Liabilities and Statements of Financial Affairs to the Bankruptcy Court, in compliance with 11 U.S.C. Sec. 521 and Rule 1007 of the Federal Rules of Bankruptcy Procedure. Separate Schedules and Statements are filed for each legal entity that sought protection under chapter 11. Loewen Group International, Inc., accounting for its equity interests in its subsidiaries and all intercompany receivables and payables as of the Petition Date, discloses: $6,010,188,599.63 in total assets; $3,286,466,106.69 in Secured Claims; and $1,667,897,901.16 in Unsecured Claims. (Loewen Bankruptcy News Issue 13; Bankruptcy Creditor's Service Inc.) LOEWEN: Seek Court OK To Hire Zolfo Cooper ------------------------------------------ The Debtors seek the Court's authority to employ Zolfo Cooper, LLC, as their special financial advisors and restructuring accountants in these reorganization proceedings. The Debtors presently anticipate that Zolfo Cooper will, among other things: (a) assist management in developing a long-term Business Plan at the operating entities level, incorporating the objectives included in LGII's strategic plan currently being developed by the Debtors' general financial advisor, Wassertein Perella & Co.; (b) assist management in developing strategic and tactical plans for the implementation of the Business Plan, including specific actions to be taken, assignment of responsibilities and timelines for accomplishing objectives; (c) assist management in designing and implementing specific action plans to streamline operations, reduce overhead and other operating costs, including conducting an evaluation of the costs and benefits of such plans; (d) assist management in forecasting, planning, controlling and otherwise managing cash flow; and (e) provide such other services as may be required by the Debtors. Zolfo's engagement, the Debtors say, will supplement and not duplicate the roles of these other advisors because Zolfo Cooper will focus on financial plan issues, while Wasserstein and KPMG will address, among other things, capital structure, asset valuation, merger and acquisition, accounting and auditing issues. Because of their respective well-defined roles, Zolfo Cooper, Wasserstein and KPMG will not duplicate services that they provide to the Debtors. The activities of Zolfo Cooper, Wasserstein and KPMG will be coordinated carefully to ensure that services provided to the Debtors by each firm are not duplicative. Pursuant to the terms of a September 8, 1999, Engagement Letter, and subject to the Court's approval, Zolfo Cooper will charge for its services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date services are rendered. The general ranges of rates currently charged by Zolfo Cooper professionals expected to provided services in these cases are: Position Hourly Rate -------- ----------- Principals $375-$425 Professional Staff $150-$375 Paraprofessional and Support Personnel $75-$125 The Engagement Letter also provides that, in the event that the Debtors hire any principal or employee of Zolfo Cooper within one year after the date of the final invoice rendered by Zolfo Cooper with respect to its engagement by the Debtors, the Debtors will pay to Zolfo Cooper a fee equal to 150% of the aggregate first year's annualized compensation, including any guaranteed or target bonus, to be paid to Zolfo Cooper's former principal or employee. In addition to the compensation structure described above, the Engagement Letter provides that the Debtors will indemnify Zolfo Cooper under certain circumstances, except that the Debtors will not indemnify Zolfo Cooper against claims arising from its gross negligence or willful misconduct. The indemnification provision applies to the employees, representatives, agents and counsel of Zolfo Cooper. LONG JOHN SILVER'S: Stipulation Regarding Insurance Policies ------------------------------------------------------------ The debtors, Long John Silver's Restaurants, Inc., et al. filed a stipulation related to insurance policies issued by Kemper National Insurance Companies. The parties agree that Kemper shall have an allowed other secured claim under the plan in the amount of $1,905,401. Kemper shall pay $870,379 of the funds to or as directed by the debtors. MARVEL ENTERPRISES: Sells Italian Subsidiary: Panini SpA -------------------------------------------------------- Marvel Enterprises, Inc. has completed the sale of its Italian subsidiary Panini SpA to ID4 Holding SpA, a newly created company owned jointly by Fineldo SpA, an Italian conglomerate engaged in various consumer product and financing businesses and controlled by Vittorio Merloni, and the Senior Management of Panini. In connection with ID4's purchase of the Panini equity, for which Marvel received a nominal price, ID4 also purchased all of Panini's outstanding U.S. bank debt and Marvel was released from its guarantee of $27 million of that bank debt. Marvel made a cash payment of $11.2 million to Panini's bank lenders to obtain its release from the $27 million guarantee. Marvel also announced that Panini would continue as Marvel's international publishing licensee under a five-year license entered into as part of the sale. Panini is engaged in the children's activity sticker business under the Panini brand name, the comic and kid's publishing businesses and the adhesive paper business through its Adespan Division. Panini was a subsidiary of Marvel Entertainment Group, Inc. when that company was acquired by Marvel, then called Toy Biz, Inc., in October, 1998. Since that time, Panini has been held by Marvel for disposition and the guarantee of Panini's bank debt has been carried on Marvel's balance sheet as a $27 million long-term liability. Peter Cuneo, Marvel's President and CEO, commented that: "The terms of this sale are very positive for Marvel. We were able to dispose of this subsidiary and at the same time enhance stockholder value by eliminating our $27 million guarantee liability for only $11.2 million. We look forward to the royalties that we will receive from our long-term license with Panini, under which Marvel's market-leading comics will continue to be distributed throughout Europe, South America and Asia. Marvel's characters represent cultural icons to kids and young adults both here in North America and also throughout the 40 plus countries where our comics and other licensed products are available." Vittorio Merloni, President of Fineldo SpA, and Aldo Sallustro, Chief Executive Officer of Panini, were pleased to announce the return of Panini to Italian ownership (one of the key companies in Modena, Panini's headquarters) and have confirmed that there are key programs in development to expand Panini's activities. Marvel Enterprises, Inc. is one of the world's most prominent entertainment-based companies, with operations in the licensing comic book publishing and toy businesses. Through its ownership of over 3,500 proprietary characters, the company has published comic books for over 60 years in the United States and numerous foreign countries. The company licenses the right to use its characters in a wide range of products such as apparel, snack foods, video games and collectibles as well as for television series and feature films. NATIONAL RESTAURANTS: Bar Date for Filing Proofs of Claim --------------------------------------------------------- The US bankruptcy Court for the Southern District of New York has entered an order setting the last date (Bar Date) for filing proofs of claim on December 15, 1999, 5:00 PM. NU-KOTE: Hearing on Creditors' Disclosure Statement --------------------------------------------------- The hearing for consideration of the Disclosure statement filed by the Lenders and the Committees is set for November 9, 1999 at 1:30 PM in Courtroom 2, Customs House, 701 Broadway, Nashville, TN. PRICHARD ALA: Lists $2.7 Million Liabilities -------------------------------------------- The city of Prichard, Ala., which recently filed for chapter 9 protection, has listed its liabilities at nearly $2.7 million, but it is expected that when the full list of debts is compiled, the city will have $3.5 million in liabilities, according to a newswire report. The Internal Revenue Service is the largest creditor, owed $417,000 in Social Security and income tax withholding. (ABI 20-Oct-99) READING CHINA: Seeks To Retain Auditors of Plan ----------------------------------------------- The debtors, RCG Liquidation Company (f/k/a Reading China and Glass Inc.) and its affiliates seek an order authorizing the retention and employment of Belfint Lyons & Shuman as auditors of the debtors' plan. The debtors seek to employ and retain Belfint Lyons & Shuman to audit the qualified retirement plan to ensure compliance with the US Department of Labor Rules and Regulations for reporting and disclosure under ERISA as required to terminate the qualified retirement plan. Compensation will not exceed $16,000 plus expenses. RUSSELL CAVE: Operating Report For Month Ending 9/30/99 ------------------------------------------------------- Russell Cave Company Inc. f/k/a The J. Peterman Company reports net income of $448,078 for the month ending September 30, 1999 as compared to a net loss for the month of August of $2,473,390. Cash on hand at the end of the month is $4,745,029. SEMI-TECH: Seeks Time To Assume/Reject Unexpired Leases ------------------------------------------------------- The debtors, Graeme Limited, Semi-Tech Corporation, and ISTM Investments (Barbados) Inc. seeks an order extending the debtors' time to assume or reject unexpired leases of non-residential real property by approximately 90 days, through February 8, 2000. The lease covers the premises leased under the Valecon Lease, Markham, Ontario, the premises from which the debtors conduct their operations. At this point it is unclear to the debtors who long they will need to utilize this space. Granting the extension will prevent the disruption of the work of the debtors. STARTER: Order Authorizes Retention of DJM Asset Management ----------------------------------------------------------- The US Bankruptcy Court for the District of Delaware entered an order authorizing the debtors to retain DJM Asset Management LLC as valuation consultant respecting real property leaseholds for the debtors. The debtors are authorized to pay a $7,500 retainer to DJM and DJM shall be compensated at a flat rate of $750 per leasehold valuation performed and provided plus expenses. SUN HEALTHCARE: Seeks Approval of $200 Million DIP Financing Pact ----------------------------------------------------------------- Prior to the Petition Date, Sun and its debtor and non-debtor affiliates funded their day-to-day working capital needs from (i) a $1,200,000,000 Senior Credit Facility led by Bank of America, N.A., dated October 8, 1997 and (ii) a $15,000,000 Amended and Restated Loan Agreement, dated as of December 8, 1998, with Heller Healthcare Finance, Inc. The pre-petition credit facilities granted the Prepetition Lenders liens on various property. As of June 30, 1999, the Debtors admit the outstanding balance under the Heller Facility totals approximately $13,500,000, including principal, interest and fees. The CIT Group/Business Credit, Inc., and Heller agree to provide the Debtors with up $200,000,000 of new financing in exchange for replacement liens to adequately protect and secure all Prepetition Loans and superpriority claim status for all Postpetition Loans pursuant to 11 U.S.C. Sec. 364. CIT commits to lend up to $165,000,000; Heller commits to $35,000,000. At the Petition Date, the Debtors held approximately $20,000,000 of unencumbered cash. That amount of money is insufficient to fund day-to-day working capital needs, Matthew G. Patrick, Sun's Vice-President and Treasurer, told Judge Walrath at the First Day Hearing. The Postpetition Financing, Mr. Patrick explained, will provide adequate working capital, enable the Debtors' to meet their postpetition obligations as they become due, and will provide vendors, governmental agencies and parties-in- interest with comfort. The Debtors say their need for access to the Cash Collateral and the DIP Financing is immediate, to preserve their businesses and continue operations. The DIP Facility, with Judge Walrath's interim approval at the First Day Hearing, provides Sun, on an interim basis through the time of a Final Hearing, with access to up to $100,000,000 to be used to fund shortfalls projected to total $76,800,000 under a Operationally, the Debtors covenant with the Lenders that their patient census for any period of four consecutive weeks will not fall below 87% in the aggregate, except for the period from December 1 to January 1 of each year, the patient census may drop to 86%. Stuart Hirschfield, Esq., of Dewey Ballantine LLP in New York City serves as counsel to the DIP Lenders. SUN HEALTHCARE: Trustee Schedules Meeting of Creditors ------------------------------------------------------ The United States Trustee for Region III has scheduled an organizational meeting for the purpose of forming one or more official committees of the Debtors' creditors. That meeting will be held in Wilmington, at the Hotel Dupont located corner of 11th and Market Streets, at 10:00 a.m. on Friday, October 22, 1999. John "Jack" McLaughlin, Esq., is the attorney for the U.S. Trustee in charge of Sun's chapter 11 cases. Contact the Office of the U.S. Trustee at 215-597-4411 for additional details. TRANSTEXAS: High River Asks To File Fraudulent Transfer Complaint ----------------------------------------------------------------- High River Limited Partnership, seeks leave to file a fraudulent transfer complaint on behalf of the estates of TransAmerican Refining Corporation (TARC) and TransAmerican Energy Corporation (TEC) against the New Lenders. High River is a significant holder of TEC's 11-1/2% Senior Secured Notes due 2002 and 13% Senior Secured Discount Notes due 2002 and is thus a creditor of TEC. High River states that TEC was victim of fraudulent transfers by TEC and TARC. This transaction transferred substantially all of TARC's assets to Orion Refining Corporation a subsidiary of TCR Holding. Control of both TCR Holding and Orion and thus TARC's assets was transferred to the New Lenders for a bargain price. "As an integral part of this transaction, TEC fraudulently released its lien against and security interest in substantially all of TARC's assets, to the detriment of the TEC Note holders. This lien had previously secured an intercompany obligation of TARC to TEC, which obligation had been collaterally assigned by TEC to secure its obligations to the TEC Note holders. TCW, one of the new lenders now has the ability to enter into financing transactions with Orion on terms highly favorable to TCW - with implied interest rates of between 45 and 60 % - and highly detrimental to the interests of TEC and the holders of the TEC Notes. The harm to the TEC Note Holders, according to High River, arises from the fact that their recovery is materially affected by the value of the Orion common stock, which is diminished by such outrageous financing terms. This control also will enable the New Lenders to engineer a further transaction which would have the effect of diluting the Orion common stock, thus diminishing the value of the TCR Voting Preferred stock and injuring the holders of the TEC notes. UNIVERSAL SEISMIC: Motion For Substantive Consolidation -------------------------------------------------------- Universal Seismic Associates Inc. and Universal Seismic Acquisition Inc., debtors, seek substantive consolidation. The debtors assert that creditors dealt with the entities a s a single economic unit and did not rely on their separate identity in extending credit. The debtors also state that their affairs are so entangled that consolidation will benefit all creditors. ********* The Meetings, Conferences and Seminars column appears in the TCR each Tuesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. 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