/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/991027.MBX T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, October 27, 1999, Vol. 3, No. 208 Headlines ADVANCED TECHNOLOGIES: Group Wins Bidding For Contracts ALTIVA FINANCIAL: Possible Sale Of Stockholders Shares AMERICAN TRACK: Seeks Authority To Sell Certain Assets AMERICAN TRACK: Seeks To Appoint F.H. Fall Liquidations DEVLIEG-BULLARD: Powermatic Assets Sold DISCOVERY ZONE: Seeks Extension To Assume/Reject Leases FORCENERGY: North Central Oil Opposes Rejection of Agreements GENERAL KINETICS: Sales Up But Losses Continue GOLDEN BOOKS: Seeks Authority To Sell and Assign Certain Assets GREATE BAY: Hearing To Consider Confirmation of Joint Plan HECHINGER: Seeks Approval of Bid Procedures INTERNATIONAL META: IPIQ Objects To Motion To Covert Case LATTICE SEMICONDUCTOR: Acquisition Of Vantis Affects Bottom Line LATTICE SEMICONDUCTOR: To Raise $200 Million LOIS USA: Possible Bankruptcy For Chicago Unit MACMILLAN BLOEDEL: Farallon Group Holds Aggregate 7.7% Of Stock MCA FINANCIAL: Seeks To Appoint Successor Indenture Trustees NU-KOTE HOLDING INC: Hearing For Appointment of Examiner NU-KOTE: Sells Certain Subsidiaries To Scottish Corporation PHAR-MOR: December 10th Set For Stockholder Annual Meeting RECYCLING INDUSTRIES: Stipulation and Order SEMI-TECH: Response To IBJ Whitehall Attempt to Lift Stay SUCCESS MAGAZINE: Auction To Be Held November 1 TAL WIRELESS: Reports No Revenue, Pays Professional Fees VENCOR: Motion To Sell Burbank Hospital For $5,725,000 WESTERN DIGITAL: Announces First Quarter Results WIRELESS ONE: Officers and Directors of Reorganized Wireless ********* ADVANCED TECHNOLOGIES: Group Wins Bidding For Contracts ------------------------------------------------------- A group of companies headed by Hinkle, Meyer & Harscher LLC of Paris won the bidding yesterday for 1,373 underground storage tank-removal contracts owned by Advanced Technologies International of Lexington. U.S. Bankruptcy Judge William S. Howard approved the sale after ATI dramatically switched sides to endorse the Hinkle, Meyer & Harscher bid that was backed by Bank One, ATI's largest creditor, and by a committee of unsecured creditors. The surprising move meant that after nearly 24 hours of disagreement, one bid could be recommended unanimously to Howard. "If I heard what I thought I heard I ," began Steve Barker, an attorney for Bio Systems Technology Inc., after ATI dropped its support of the Bio Systems bid. "You heard the debtor (ATI) switch teams," interjected Howard, who approved the sale minutes later. The decision appears to clear the way for Hinkle, Meyer & Harscher and its affiliated companies -- Hinkle Contracting Corp.; Haworth, Meyer & Boleyn Inc.; Shield Environmental Associates Inc.; and Commonwealth Technology Inc. -- to begin work almost immediately on projects ATI agreed to do before it filed Chapter 11 bankruptcy in February. Most of the projects involve removal of aging underground gasoline tanks at service stations and convenience stores in Kentucky and five other states. Speed is important because some of the property owners face possible federal fines and penalties if their projects are not completed by Dec. 31, ATI attorney W. Thomas Bunch told Howard yesterday as he explained ATI's decision to "switch teams." On Tuesday, with no agreement on a winner after two rounds of bidding, Howard ordered a third and final round of sealed bidding that afternoon. All five second-round bidders participated, but attorneys and accountants who met into the night could not agree on a winner. The bids involved different percentages of gross revenue -- expected to be at least $17 million -- from the projects, as well as different payment schedules. When Bunch reported the deadlock to Howard yesterday, the judge remarked, "Why am I not surprised." Bunch said the Hinkle, Meyer & Harscher bid had "a net, present- day value" of $903,142, including $350,000 in upfront payments. The value of the Bio Systems bid was $879,864, he said, but it could be worth much more since 51 percent of Bio Systems is owned by Technologies International Holdings Inc., the same Lexington company that owns ATI and Meridian Transport Co. The three Technologies International companies are in Chapter 11, so 51 percent of the profits from Bio Systems work would flow to creditors. Howard had previously expressed concern about Bio Systems' "insider" connection with ATI, and he said yesterday that the law requires bankruptcy judges to give "special scrutiny" in such situations. He ordered both sides to present witnesses to defend and explain their bids. But ATI's decision to throw its support to Hinkle, Meyer & Harscher made the hearing unnecessary. Other bids were submitted by NESCO of Tulsa, Okla., and groups of companies headed by Foppe Technical Group Inc. of Cincinnati and Environmental Systems Corp of Knoxville. The removal of the underground tanks is paid for by the state-run Petroleum Storage Tank Environmental Assurance Fund, which receives state gasoline tax receipts. The 1,373 contracts do not include 88 previously unfinished high- priority projects awarded earlier to Maverick Environmental and Construction Services of Stanford for quick completion. Maverick, which was part of the Bio Systems bidding group, has completed 37 of the projects and started 22 others, said the company's president, Jeff Jones. ALTIVA FINANCIAL: Possible Sale Of Stockholders Shares ------------------------------------------------------ Altiva Financial Corporation is distributing a prospectus which describes Altiva Financial Corporation (formerly, Mego Mortgage Corporation) and the sale of 6,974,614 shares of its common stock that: - are owned by certain of its stockholders or - may be acquired by certain of the company's stockholders, if they convert their shares of its Series A convertible preferred stock into shares of company common stock or - may be acquired by certain of the company's optionholders upon exercise of their options to purchase common stock. Altiva will not receive any of the proceeds from the sale of the shares of common stock. The holders of the common stock will determine if, and when, the shares will be sold and will receive the proceeds from the sales. For details in the prospectus access http://www.sec.gov/cgi-bin/srch-edgar?0 000950144-99- 012032 on the Internet, free of charge. Altiva Financial Corporation is a specialized consumer finance company that funds, purchases, makes and sells consumer loans secured by deeds of trust on one-to-four family residences. These loans primarily are used to purchase one-to-four family residences, refinance existing mortgages, consolidate debt and/or finance home improvements. AMERICAN TRACK: Seeks Authority To Sell Certain Assets ------------------------------------------------------- Robert H. Slone, the Chapter 11 Trustee of the estate of American Track Systems, Inc. seeks entry of an order approving the sale of certain assets, including inventory of debtor pursuant to a public auction. AMERICAN TRACK: Seeks To Appoint F.H. Fall Liquidations ------------------------------------------------------- Robert H. Slone, the Chapter 11 Trustee of the estate of American track Systems, Inc. seeks entry of an order approving the appointment of F.H. Fall Liquidations to conduct a public auction sale to liquidate certain assets of the debtor. Fall's rate for the services to be rendered to the Trustee will be a commission of ten (10%) percent of the gross sale proceeds. DEVLIEG-BULLARD: Powermatic Assets Sold --------------------------------------- On October 15, 1999, DeVlieg-Bullard, Inc. sold to Powermatic Corporation, an affiliate of JET Equipment & Tools, Inc., virtually all of the assets of the company's Powermatic division in substantial accordance with the terms of an asset purchase agreement dated August 26, 1999. At an auction held by the Bankruptcy Court for the Northern District of Ohio on September 27, 1999, the buyer agreed to pay $8.5 million in cash for the Powermatic assets, including the assumption of certain liabilities and subject to adjustment based on the value of certain assets at closing. The sale of the assets was approved by the Bankruptcy Court. Proceeds from the sale of approximately $7.38 million were used to repay a portion of the company's indebtedness to The CIT Group/Business Credit, Inc. and BNY Factoring LLC. DISCOVERY ZONE: Seeks Extension To Assume/Reject Leases ------------------------------------------------------- The debtors, Discovery Zone, Inc. and its debtor affiliates seek an extension of time within which the debtors must elect to assume, assume and assign, or reject unexpired leases of non- residential real property. The debtors ask to extend the deadline for two remaining unrejected leases. The debtors state that additional time will help them make an informed and intelligent decision; and that since the consummation of the sale to CEC, the debtors have endeavored to complete the orderly liquidation of their remaining assets, and have not had to the time to consider whether to assume or reject the leases. FORCENERGY: North Central Oil Opposes Rejection of Agreements ------------------------------------------------------------- North Central Oil Corporation opposes the debtor's motion to reject integral portions of its assignment to North Central of interests in "South Pass" Louisiana. North Central states that the court should deny the motion because the assignment is not executory, the joint operating agreements are neither executory nor divisible from their related unit agreements, and the debtor has not exercised good business judgment in bringing this motion, which would produce substantial liability for Forcenergy and administrative havoc at South Pass. GENERAL KINETICS: Sales Up But Losses Continue ---------------------------------------------- In rendering its financial report for the quarter ended August 31, 1999 General Kinetics Inc. had net sales for continuing operations of approximately $2.4 million compared to net sales of approximately $0.8 million for the quarter ended August 31, 1998. For the three months ended August 31, 1999, the company had an operating loss of $296,400 compared to an operating loss of $345,000 for the comparable quarter of the prior year. GOLDEN BOOKS: Seeks Authority To Sell and Assign Certain Assets --------------------------------------------------------------- The debtors, golden Books Family Entertainment, Inc., et al. seek court authority to sell their Sturtevant, Wisconsin printing operations. The operations are a significant drain on their profitability due to the lack of capacity utilization and the consequent significant operating losses, the high cost of the lease for their printing facility, significant long-term debt obligations in connection wit the printing facility and related assets and burdensome collective bargaining agreements with certain employees at such facility. All of the foregoing prevents the debtors from being able to manufacture their products a t a commercially competitive rate. Thus the debtors determined that it was in their best interest to enter into a transaction with a strategic business partner who would purchase the printing operations. The debtors have entered into an Asset Purchase Agreement with Artech Capital Corporation, a Canadian corporation, and a printing services agreement. It is the Purchaser's requirement that the transactions close before October 29, 1999, and therefore the debtors seek a determination on an expedited basis. The total consideration to be paid under the purchase agreement is $6 million. The purchase agreement requires that the debtors satisfy approximately $600,000 of unsecured pre-petition obligations to certain equipment suppliers on the Closing Date. GREATE BAY: Hearing To Consider Confirmation of Joint Plan ---------------------------------------------------------- A hearing to consider confirmation of the plan of Greate Bay Hotel and Casino, Inc. and its affiliated debtors will be held before The Honorable Judith H. Wizmur, US Bankruptcy Judge, US Bankruptcy Court, 15 N. 7th Street, Camden NJ 08102, at December 17, 1999 at 9:00 AM. Objections to the plan must be made on or before November 24, 1999 at 4:00 PM. HECHINGER: Seeks Approval of Bid Procedures ------------------------------------------- At this juncture, the debtors anticipate a significant inventory of vacant or partially vacant real estate assets, which will cost a minimum of $7 million each month to carry and must be sold. In order to provide a fair and competitive process for the sale of the Properties, the debtor request a hearing for the court to consider entry of an order approving the Bid Procedures and the Bid Incentives, approving the form and manner of notice of these procedures, approving the forms of the Agreements and scheduling a hearing date to approve the sale of the Properties. The debtors suggest that they are entertaining stalking horse bids, and they propose a break-up fee of 3% to such a bidder plus expense reimbursement of up to $150,000. A key component of the Bid Procedures is the ability to accept bids on an individual property or on multiple properties as part of a package. A sale of multiple properties as part of a package can be beneficial to the debtors as a result of the obvious transactional cost saving. The debtors are seeking to extend the time to assume or reject leases until December 31, 1999. The debtors request that the court schedule two hearings to allow the debtors to effectuate the proposed sales. The first hearing requested is the preliminary hearing. The court has scheduled the hearing to be held on November 1, 1999 at 11:00 AM to schedule the sale hearing. The debtors have requested that the sale hearing be held on December 9, 1999 at 9:30 AM. Package bids and all other bids seeking to obtain the Bid Incentives if any shall be due by November 15, 1999. If a Stalking Horse Bid is to be chosen, the debtors intend to do so by November 17, 1999 and serve notice of such selection on the Core Notice parties and affected potential bidders within two days thereafter. Pursuant to the Bid Procedures, the deadline to enter a Closed Bid on any or all of the properties is anticipated to be at noon on November 24, 1999. Once all bids are received, the debtors shall choose Top Qualified Closed Bidders. The Open Auction, if any shall b held on November 30, 1999 at the time and place set forth in the Bid Procedures. INTERNATIONAL META: IPIQ Objects To Motion To Covert Case --------------------------------------------------------- IPIQ Corporation filed an objection to the motion to covert the case to a case under Chapter 11 filed by Art Langer and James Clark ("movants"). IPIQ requested financial information from the movants to verify the movants' ability to fund the $4 million commitment promised in the motion. A follow-up letter was sent against requesting proof financial ability. This estate is, according to IPIQ, administratively insolvent. The imposition of additional administrative expenses, and attorney fees should not be wasted on the "misguided folly" of these movants. The motion indicates that the movants are operating under the assumption that $4 million will be sufficient to finance the Chapter 11 operations of IMS and pay all creditors and provide a dividend to shareholders. Of approximately $7.6 million of scheduled debt, $3 million worth of unsecured claims were filed in response to the Chapter 7 bar date notice. In addition, IPIQ has debt under the court's DIP orders of approximately $2.3 million plus interest and expenses. According to IPIQ the movants provide no explanation of how IPIQ's interest in the residual license in the `927 Patent(or other intellectual property) will be used by IMS without IPIQ's consent or adequate protection of IPIQ's interests. IPIQ has no confidence in the ability of the movants to address these issues, and while IPIQ states that it would welcome a serious offer for resolving its debt, neither IPIQ nor any other creditor can "countenance and other pie-in-the-sky scheme and the attendant waste of limited resources." LATTICE SEMICONDUCTOR: Acquisition Of Vantis Affects Bottom Line ---------------------------------------------------------------- Lattice Semiconductor Corporation had net revenues of $94,973 for the three months ended October 2, 1999. In the same period of 1998, ended September 26, 1998 net revenues were $48,088. The company experienced net losses of $4,970 in the 1999 quarter as compared to net income of $9,870 in the same period, 1998. For the six-month period ended October 2, 1999 net revenues were $154,711 with net losses of $56,133. In the similar period of 1998 net revenues were $96,116 with net income of $19,686. The results of operations for the three month and six month periods ended October 2, 1999 include the effect of the acquisition of Vantis from June 16, 1999. LATTICE SEMICONDUCTOR: To Raise $200 Million -------------------------------------------- Lattice Semiconductor Corporation announced that it intends, subject to market and other conditions, to raise approximately $200 million (excluding proceeds of the over-allotment option, if any) through an offering of convertible subordinated notes to qualified institutional investors. No other details were provided. The Company stated that it intends to use the net proceeds of the offering to repay the bank debt incurred to acquire Vantis Corporation in June 1999. Any offers of the securities will be made only by means of a private offering memorandum. The securities to be offered will not be registered under the Securities Act of 1933, as amended, or applicable state securities laws, and may not be offered or sold in the United States absent registration under the Securities Act and applicable state securities laws or available exemptions from such registration requirements. Oregon-based Lattice Semiconductor Corporation designs, develops and markets the broadest range of high-performance ISP(TM) programmable logic devices (PLDs). Lattice introduced ISP devices to the industry in 1992. Lattice acquired Vantis, the Corporation that invented the PLD, in June 1999. With double the engineering and sales resources, the combined company will focus on developing and delivering innovative programmable products to a complementary customer base. Lattice/Vantis products are sold worldwide through an extensive network of independent sales representatives and distributors, primarily to OEM customers in the communication, computing, industrial and military end markets. LOIS USA: Possible Bankruptcy For Chicago Unit ---------------------------------------------- The Chicago Tribune reports on October 26, 1999 that now that ad agency-parent Lois USA has filed for bankruptcy in New York, the future of its Lois/EJL Chicago unit looks downright bleak. In fact, agency insiders look for a Chapter 11 bankruptcy filing for the local office as well. Depleted by account losses--the latest being Turtle Wax Inc.--the Chicago office is still open, but there's only paper shuffling and administrative matters being cleared up, as virtually the entire staff of 110 has left to seek other employment opportunities. Staffers at Lois/EJL, who declined to be identified, say they received their last paycheck for work through Oct. 15, but without any severance or vacation pay. The New York office under the Lois USA banner also is pretty much shut down. The parent in New York listed assets of $57 million and liabilities of $71 million in a voluntary petition filed late last week with U.S. Bankruptcy Court in Manhattan. How much of those liabilities constitute tardy media payments couldn't immediately be determined. Recurring rumors indicate that at least one large media payment of $4 million to $5 million was used to make payments on a bank loan. Principals of Dallas-based ad agency Fogarty & Klein, acquired by Lois USA two years ago, Monday told this column they have reached an agreement to buy back their agency from the parent, a deal expected to close in mid-November. Publicly held Lois USA paid nearly $10 million for Fogarty & Klein. To be determined is how the proceeds from the buyback will be used by Lois USA. Lois/EJL has a 12-year lease running through February 2010 for nearly 42,000 square feet on two floors of 111 E. Wacker Drive, having relocated to that building on March 1. The annual rent there is $930,000, or $77,500 a month. A property manager at Lincoln Property Co. said the firm was completely in the dark about what was going on at Lois until that agency's financial problems appeared in the media. Principals of the agency in New York declined comment and a lawyer with Togut, Segal and Segal in New York offered few details about the bankruptcy filing. MACMILLAN BLOEDEL: Farallon Group Holds Aggregate 7.7% Of Stock ----------------------------------------------------------------- The Farallon Capital group holds an aggregate 9,254,460 shares of the common stock of MacMillan Bloedel Ltd. The stock ownership is distributed as follows: Managers of the group: Andrew B. Fremder, David I. Cohen, Enrique Boilini, Jason M. Fish, Joseph F. Downes, Meridee A. Moore, Richard B. Fried, Stephen L. Millham, William F. Mellin, William F. Duhamel and Thomas F. Steyer each share voting and dispositive power over the entire 9,254,460 shares, representing 7.7% of the outstanding common stock of MacMillan Bloedel. Farallon Capital Institutional Partners II, L.P., hold 381,270 shares, or 0.3% of the outstanding shares; Farallon Capital Institutional Partners III, L.P., 540,100 shares, or 0.4%; Farallon Capital Insitutional Partners, L.P., 2,182,600 shares, or 1.8%; Farallon Capital Management LLC, 3,847,390 shares, or 3.2%; Farallon Capital Partners, L.P., 2,126,980 shares, or 1.8%; Farallon Partners, L.L.C., 5,407,070 shares, or 4.5%; Fleur E. Fairman, 5,407,070 shares, or 4.5%; and Tinicum Partners, L.P., 176,120 shares, or 0.1%. MCA FINANCIAL: Seeks To Appoint Successor Indenture Trustees ------------------------------------------------------------ MCA Financial Corp. seeks to appoint successor indenture trustees for subordinated debentures. MCA seeks authority to enter into Tripartite agreements under which agreements MCA will accept the resignation of First Union as trustee, paying agent and registrar of the Indentures and appoint US Bank Trust and Norwest Bank as successor trustee, paying agents and registrars of the 1996 Indenture and the 1997 Indenture, respectively. NU-KOTE HOLDING INC: Hearing For Appointment of Examiner -------------------------------------------------------- Certain securities claimants are seeking appointment of an Examiner in the case of Nu--Kote Holding, Inc. and its debtor affiliates. A hearing before Judge Lundin, US Bankruptcy Court Middle District of Tennessee, Nashville Division, is scheduled for November 9, 1999 at 9:00 AM. The securities claimants' state that an Examiner should be appointed because the debtor's present management participated in fraud, engaged in false and misleading statements and omissions, and breached their fiduciary duty of due care tot he shareholders. The scope of the Examiner's duties should be defined to include the investigation of whether actions by current directors and/or officers placed their personal interests over the interests of shareholders and creditors. NU-KOTE: Sells Certain Subsidiaries To Scottish Corporation ----------------------------------------------------------- Nu-kote Holding Inc., as part of its overall strategic objective of restructuring its operations, announces that Nu-kote International, Inc., a wholly owned subsidiary of Nu-kote, has sold certain of its wholly owned subsidiaries to Pelikan Hardcopy Europe Limited, a Scottish corporation. The subsidiaries sold include Pelikan Productions A.G., Pelikan Scotland Limited, Greif-Werke GmbH, Pelikan Hardcopy Asia Pacific Limited, and Dongguan Pelikan Hardcopy Limited. Under the terms of the agreement, Pelikan will pay $16.5 million at the close of the transaction in exchange for all of the capital stock or equity interests of the companies. The company has filed a motion in the United Bankruptcy Court for the Middle District of Tennessee and received approval for the sale. This disposition is part of Nukote's efforts to dispose of non- essential assets and focus on the restructuring of its core business in the North America. Nu-kote's North American Operations will retain the rights to market its products under the Pelikan brand name in the United States, Canada and Mexico, with the purchaser having the right to market its products under the Pelikan brand name throughout the rest of the world. In addition, Nu-kote will continue to market its products under the Nu-kote brand name anywhere in the world. The company will also maintain its business forms operations in France. Through its operating subsidiaries, Nu-kote produces supplies for printers, copiers, fax machines and ink jet printers, sold primarily in North America and Europe. PHAR-MOR: December 10th Set For Stockholder Annual Meeting ---------------------------------------------------------- Stockholders of Phar-Mor Inc. are invited to attend the annual meeting of shareholders to be held at The Willard Inter- Continental Hotel, 1401 Pennsylvania Avenue, Washington, D.C. 20004 on Friday, December 10, 1999, at 10:00 a.m. (local time). Matters to be considered and voted upon are: Election of one director to hold office until his successor is duly elected and qualified; Amendment of the Phar-Mor, Inc. 1995 Director Stock Plan by changing the annual automatic grant date thereunder from October 1 to July 1; Ratification of the selection by the Board of Directors of Deloitte & Touche LLP as the company's independent public accountants. The Board of Directors has fixed the close of business on October 1, 1999 as the record date for the purpose of determining shareholders entitled to notice of and to vote at the meeting. RECYCLING INDUSTRIES: Stipulation and Order ------------------------------------------- The debtors, the Unsecured Creditors' Committee and General Electric Capital Corporation, as agent and lender stipulate that a hearing on the debtors' motion to extend exclusive periods in which to file a plan of reorganization and to solicit acceptance thereto, and the Creditors' Committee's objection thereto will be heard on November 15, 1999 at 1:30 PM. The debtors agree to send the Committee prior notice of any Sale motion for the sale of substantially all of the debtors' assets, and a term sheet. SEMI-TECH: Response To IBJ Whitehall Attempt to Lift Stay ---------------------------------------------------------- The Official Committee of Unsecured Creditors of The Singer Company, NV responds to the motion of IBJ Whitehall Bank & Trust Company for entry of an order which seeks to lift or modify the automatic stay. The Committee has filed an application seeking to retain KPMG LLP as accountants and financial advisors. KPMG, LLP has alerted the Committee to the potentially serious and adverse tax consequences that could result, both in the US and internationally, from any change in ownership due to IBJ Whitehall becoming the new owner of approximately 49.6% of the outstanding common stock of Singer. "The potential adverse worldwide tax consequences to the Singer Estates could be devastating and irreversible." SUCCESS MAGAZINE: Auction To Be Held November 1 ----------------------------------------------- The assets of Success Multimedia Enterprises (the owner of Success Magazine) will be sold at auction on November 1st, 1999, at 3:00pm, and will be held at the offices of Robinson Brog Leinwand Greene & Gluck, P.C. in New York. For more details, including the terms and conditions of the sale as set forth in the Court's order, access the Bankruptcy court's website at www.nysb.uscourts.gov or call A. Mitchell Greene, Esq. at (212) 586-4050. All offers must be presented with a check in the amount of 10% of the bid NO LATER THAN October 31st, 1999. The minimum offer that would be entertained is $ 5.8 million. The assets include valuable Internet rights to the brand name and years of valuable content both for on-line and print media, as well as other holdings. Mayflower Capital, LLC, a North Carolina limited liability company, has already submitted a bid to buy the assets of Success Multimedia Enterprises. Several New York City-based magazine publishers, including Inc. Magazine, have also expressed interest in purchasing the assets of the title. "We are happy to report that, in the interests of consistency and journalistic integrity, we will publish a December issue of Success-to hit newsstands in late November, '99," notes Peter R. Morris, Chairman and owner of Success Magazine. TAL WIRELESS: Reports No Revenue, Pays Professional Fees -------------------------------------------------------- Tal Wireless Networks Inc., having filed Chapter 11 bankruptcy action in 1997, with the company's directors continuing in possession, but subject to the supervision and orders of the Bankruptcy Court, report zero revenue and activity for the month of September 1999. The only reportable item was a charge of $6,517 for professional fees under reorganization attempts. Consequently, the company shows a net loss for the month of September in that amount, $6,517. As previously stated by the company it plans to liquidate assets and review the claims of its various creditors. It is unclear at this time whether there will be any funds available for distribution to shareholders. Once this information has been determined, the company may file a Plan of Reorganization with the Bankruptcy Court. VENCOR: Motion To Sell Burbank Hospital For $5,725,000 ------------------------------------------------------ The Debtors purchased an acute care facility located on Glenoaks Boulevard in Burbank, California, in August 1997, hoping to convert it into a long-term care hospital. That plan fell apart. The Debtors closed the facility in November 1998; the vacant property costs $10,000 per month to maintain. With the assistance of Re/Max Tri-City Realty and CB Richard Ellis, Inc., the Debtors secured three offers for the purchase of the Burbank Property: (1) a low-ball $1,000,000 cash offer; (2) a $3,000,000 offer; and (3) a $5,725,000 offer carrying various zoning and site approval contingencies and a longer-than-usual due diligence period. On April 1, 1999, the Debtors accepted the $5,725,000 offer advanced by BelmontCorp notwithstanding the risks because it was significantly superior to the other offers. BelmontCorp intends to construct a 160-unit senior assisted living facility on the Property. In all events, a Closing must occur on or before February 18, 2000. The Debtors ask the Court, pursuant to 11 U.S.C. Sec. 365(a), for permission to assume the Purchase and Sale Agreement and, pursuant to 11 U.S.C. Sec. 363(b)(1), for permission to sell the property to BelmontCorp. WESTERN DIGITAL: Announces First Quarter Results ------------------------------------------------ Western Digital Corporation reports revenue of $407.0 million and a net loss of $106.3 million for its first quarter ended October 2, 1999. The net loss includes restructuring charges of $32.3 million, primarily related to the transfer of all desktop hard drive production from Singapore to Malaysia, and $37.7 million of special charges to cost of sales for the product recall announced on September 27, 1999. Also included in the first quarter loss is an extraordinary gain of $90.6 million for the redemption of some of the company's debentures for common stock. Excluding the non- recurring charges and the extraordinary gain, the net loss would have been $126.9 million. In the year earlier period, Western Digital reported revenue of $650.9 million and a net loss of $194.7 million. The results for the first quarter of 1999 included special charges of $84.5 million. Excluding these special charges, net loss for the first quarter of 1999 would have been $110.2 million. Chuck Haggerty, chairman, president and chief executive officer of Western Digital, stated: "The first quarter was another very competitive pricing environment in the hard drive industry, complicated for Western Digital by the product recall. The operations recovery plan is on schedule: 90% of the affected drives have been captured and are being reworked; volume production resumed last week of the WD Caviar 6.8GB/platter series with new chips; all major OEM customers have reviewed and accepted the corrective action plan; and we expect to be back to normal production levels in the first week of November." "We are in qualification at all major OEM customers with our next generation WD Caviar desktop series, the 9.1GB and 10.2GB/platter platforms, and expect to be volume shipping to customers in October. In the Enterprise market, Haggerty noted that the company's shipments will begin to shift in the next several quarters to more of the 10,000 RPM drives as the company expands its offerings in the high end and entry-level segments of this market. "WD's hard drives continue to win industry and customer accolades," Haggerty continued. "In the first quarter, PC World, VAR Business and StorageReview.com recognized WD hard drives for industry-leading quality and performance in their annual surveys." "Our efforts to create the industry's most efficient manufacturing operation have resulted in annualized cost savings of about $100 million. We expect to achieve additional efficiencies and savings throughout our organizations in the next several quarters." The company made further progress in its diversification efforts into audio/visual storage solutions and networked attached storage solutions in the first quarter. In the A/V space, Western Digital introduced the WD Performer, its first hard drive specifically for the home entertainment market and featuring WhisperDrive acoustics technology. The WD Performer is in qualification with a number of consumer electronics and set top box manufacturers. The company also introduced its innovative StreamWeaver technology for its next-generation WD Performer drives, to enable consumers to efficiently handle multiple streams of data in the home entertainment environment. "By developing unique technology that facilitates the growth of this market and by partnering with consumer AV leader Sony, we aim to establish WD as a major industry player over the next year in this fast-growing emerging space," said Haggerty. Haggerty indicated that Connex, a wholly-owned subsidiary of Western Digital, will be introducing its first network attached storage system shortly and that initial shipments are scheduled for January 2000. "Combined with our initiatives to restore the core hard drive business to health and peak efficiency, the efforts in audio visual and network attached storage solutions are key elements in transforming the WD business model in the long term," said Haggerty. Western Digital Corporation is a manufacturer of hard drives used for information storage in desktop computers, servers, workstations and home entertainment electronic products. Through its Connex subsidiary, the company serves users of network- attached storage systems and enterprise-wide storage area networks. Western Digital was founded in 1970 and has long been noted for its storage and end-market systems-level design knowledge. The company's products are marketed to leading systems manufacturers and selected resellers under the Western Digital brand name. WIRELESS ONE: Officers and Directors of Reorganized Wireless ------------------------------------------------------------ As provided in the plan of reorganization, the debtor is obligated to inform creditors and the Committee of its Board of Directors and Officers for its reorganized company. The Board of Directors of Reorganized Wireless will consist of three members. The debtors have been advised by MCI WorldCom Inc. that the initial members will be Bernard J. Ebbers, Charles T. Cannada and Scott D. Sullivan. President and Chief Executive Officer will be Henry Burkhalter; Executive Vice President and Chief Operating Officer will be Ernest D. Yates; Executive Vice president, Chief financial officer and Secretary will be Henry G. Schopfer and Senior Vice President and General Counsel will be Thomas G. Noulles. ********* 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. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *