/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/991104.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, November 4, 1999, Vol. 3, No. 214 Headlines AVOCA NATURAL GAS: Seeks Administrative Claims Bar Date CALDOR: Kranzco Signs Lease With Ames CLARIDGE HOTEL: Chairman of Board Resigns COLORADO CASINO: Files Chapter 11 COSTILLA ENERGY: Objects To Dawson's Request For Relief CRIIMI MAE: Hearing Postponed Until after Nov. 15 DAEWOO: Rescue Plans Set For Major Daewoo Firms DAUPHIN TECHNOLOGY: Engages Grant Thornton LLP As New Auditors EAGLE CAPITAL: Trustee's First Amended Disclosure Statement FORCENERGY: Voting Procedures Approved By Court GENESIS DIRECT: Seeks Authority To Sell Assets GREATER SOUTHEAST: Judge Grants One Day Delay in Announcement HARNISCHFEGER: IAM-Backed Group Makes Offer for Beloit Corp HVIDE MARINE: Court Approves Disclosure Statement JITNEY-JUNGLE: Creditors Attempt to Move Case to Mississippi JUST FOR FEET: Shoe Retailer Files Pre-packaged Bankruptcy MAXIM GROUP: Change Of Corporate Name On Meeting Agenda MONTGOMERY WARD: Klaff Announces $8.6M Sale of Two Properties NIAGARA MOHAWK: Cash Flow Significantly Improves OPTEL: Files Chapter 11 Bankruptcy/Lists Assets & Liabilities OPTEL: Fiscal Year & Fourth Quarter Results Reported PLAY BY PLAY TOYS: Delays Year-End Financial Filings PRESLEY COMPANIES: Waiver of Minimum Requirement In Tender Offer PURINA MILLS: Reports Bankruptcy Filing To SEC SGL CARBON: Positive Outlook for the Fourth Quarter of 1999 STEEL HEDDLE: Names New President STUART ENTERTAINMENT: Court Approves Key Executive Agreements STUART ENTERTAINMENT: Court OK's Corporate Headquarters Lease STUART ENTERTAINMENT: Extension of Period To Assume/Reject Leases STUART ENTERTAINMENT: Objects To Power Bingo's Motion For Relief TENET HEALTHCARE: First Year in Philly a Success TOROTEL: Reduction Of Par Value Of Common Stock On Agenda TRANSTEXAS GAS: Claimants Seek To Intervene UNITED COMPANIES: Equity Objects To Exclusivity Extension USCI INC: Zuckerman Holding Less Than 5% Of Common Stock WSR CORP: Hearing To Consider Bonus Program ZENITH: Receives Favorable Bankruptcy Court Ruling ********* AVOCA NATURAL GAS: Seeks Administrative Claims Bar Date ------------------------------------------------------- The debtors, Avoca Natural Gas Storage and affiliates request the entry of an order establishing a bar date for filing requests for payment of administrative claims against the debtors. The debtors request that the court fix 4:00 PM on January 17, 2000 as the deadline for all creditors to file requests with the court for administrative claims. CALDOR: Kranzco Signs Lease With Ames ------------------------------------- Nov. 3, 1999--Kranzco Realty Trust (NYSE:KRT), a real estate investment trust, announced it has signed a lease with Ames Department Stores, Inc. (NASDAQ:AMES) for the 113,000 square foot former Caldor store at Bristol Commerce Park, Bristol, PA. The 20-year lease is valued at more than $ 6 million. Ames, headquartered in Rocky Hill, CT, is the nation's largest regional full-line discount retailer with annual sales of nearly $ 4 billion. It operates more than 455 stores, including 155 Hills Stores acquired earlier this year, in 19 states and the District of Columbia. The Bristol Commerce Park store is scheduled to open in March 2000, in time for the Easter shopping season. CLARIDGE HOTEL: Chairman of Board Resigns ----------------------------------------- The Claridge Hotel and Casino Corporation, which operates the Claridge Casino Hotel through its subsidiary, The Claridge at Park Place, Incorporated, announced today that Robert M. Renneisen has resigned as Chairman of the Board of Directors but will remain a member of the Board. Additionally, Mr. Renneisen will no longer serve as Chief Executive Officer. James M. Montgomery, President of Houze, Shrouds and Montgomery, Incorporated, a management consulting firm, and a director of the Claridge since March 1995, has been named Chairman. Frank A. Bellis, Jr., currently Senior Vice President and General Counsel, has been appointed by the Board of Directors to succeed Mr. Renneisen as Chief Executive Officer. Additionally, Mr. Bellis has been named to serve as a member of the Board of Directors. This action is being taken in order to streamline the executive management team and, through the appointment of Mr. Bellis, bring greater focus to the bankruptcy reorganization efforts. Mr. Renneisen will work with the current executive management team to assure a smooth transition. On August 16, 1999, The Claridge Hotel and Casino Corporation and The Claridge at Park Place, Incorporated filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in order to facilitate a financial restructuring. The Claridge Casino Hotel opened in July 1981 and has 59,000 square feet of casino gaming space. The Claridge Hotel and Casino Corporation is a closely held public corporation and is the issuer of $85 million of 11-3/4% First Mortgage Notes which are publicly traded on the New York Stock Exchange under the symbol CLAR02. COLORADO CASINO: Files Chapter 11 --------------------------------- Colorado Casino Resorts, Inc., announced that it has filed for restructuring under Chapter 11 of the U.S. Bankruptcy Code. The Company's subsidiaries, Double Eagle Resorts, Inc., and Creeker's, Inc., were not part of the filing. The Company's subsidiary casino operations will not be negatively affected by the restructuring. Gaming operations will continue as usual, with no effect on employees, customers, or vendors. "Casino operations will continue as normal," said Michael S. Smith, the Company's acting president and CEO. "The filing was necessary to restructure the large debt load burdening the parent corporation. Even if improving subsidiary operational cash flows increase by 200% over its 1998 numbers, absent restructuring, the parent corporation still cannot service its $27 million debt." Smith added, "So far, most creditors recognize CCRI's fiscal predicament and they understand our restructuring goals. Continued cooperation and ongoing discussions will hopefully lead to a smooth and quick restructuring. The Company remains committed to the new marketing and operational plans that have been implemented recently at the subsidiaries." The Company anticipates no loss of jobs as a result of the filing. Colorado Casino Resorts, Inc. is in the business of developing and operating casino and hotel resort properties. Through its wholly owned subsidiaries, Creeker's Inc. and Double Eagle Resorts, Inc., CCRI is the owner of Creeker's Casino and the Double Eagle Hotel & Casino, both located in Cripple Creek, Colorado. COSTILLA ENERGY: Objects To Dawson's Request For Relief ------------------------------------------------------- Costilla Energy, Inc., debtor, objects to the motion of Dawson Geophysical Company for relief from the automatic stay. The debtor is in the business of exploring, developing, and producing oil, gas, and other petroleum resources. Its mineral interests are located in South Texas, the Permian Basin Region of West Texas and Southeast New Mexico and East Texas. The debtor asserts that Dawson did not engage in the activities required in order to be granted a lien. According to the debtor, Dawson is an unsecured creditor and therefore not entitled to a secured claim and has no standing to assert the right to foreclose on property of the estate. Further, the debtor states that Dawson is adequately protected by the collateral securing its obligation. Dawson's asserted lien claim is $521,883 and the leases are worth $1.5 million. The debtor continues to pursue the sale of its assets, and argues that any deviation from that effort with a lifting of the stay may harm the reorganization process. CRIIMI MAE: Hearing Postponed Until after Nov. 15 ------------------------------------------------- On November 1, 1999, Judge Duncan W. Keir of the United States Bankruptcy Court in Greenbelt, MD approved a motion (filed by CRIIMI MAE Inc. with the support of the Official Committee of Unsecured Creditors and the Official Committee of Equity Securities Holders (the "Committees")) to postpone until after November 15, 1999 the hearing on the pending motion to approve the bidding protection provisions in the Stock Purchase Agreement ("Agreement") entered into by CRIIMI MAE with an affiliate of Apollo Real Estate Advisors IV, L.P. ("Apollo") on September 9, 1999. Likewise, the date for the Company and two affiliates to file the proposed disclosure statement with respect to its Joint Plan of Reorganization was extended to the same date. The Court approved the immediate payment of $400,000 to Apollo for reimbursement of expenses incurred with respect to the Agreement, continuing negotiations, due diligence and related matters. The Court was advised of active discussions among the Company, Apollo and the Committees to fashion an amended plan of reorganization that can be supported by such parties. On October 5, 1998, the Company and two affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code. Before filing for reorganization, the Company had been actively involved in acquiring, originating, securitizing and servicing multi- family and commercial mortgages and mortgage related assets throughout the United States. Since filing for Chapter 11 protection, CRIIMI MAE has suspended its loan origination, loan securitization and CMBS acquisition businesses. The Company continues to hold a substantial portfolio of subordinated CMBS and, through its servicing affiliate, acts as a servicer for its own as well as third party securitizations. DAEWOO: Rescue Plans Set For Major Daewoo Firms ----------------------------------------------- SEOUL, Nov 2 (Reuters) - Domestic creditors of South Korea's four key Daewoo Group units proposed on Tuesday swapping up to $25 billion of their debt for equity as one measure to nurse the firms through a group-wide liquidity crisis. Most creditors of unlisted Daewoo Motor Co, Daewoo Corp, Daewoo Heavy Industries Co and Daewoo Electronics Co expressed their consent on the steps at meetings on Tuesday, officials at creditor banks said. After Tuesday's meetings, final discussions on the proposals involving all creditors will be held in about two weeks to approve or reject the proposals, they said. "It will take two weeks or so until meetings of all creditors take place because domestic creditors will have to discuss with foreign creditors," said a spokesman for Korea Development Bank, main creditor to Daewoo Motor and Daewoo Heavy. Foreign creditors last week balked at freezing Daewoo's debt, insisting that they be consulted on the restructuring plans. About $5 billion of Daewoo Group's $51 billion debt is owed to foreigners. Financial Supervisory Commission (FSC) chairman Lee Hun-jai said in an unscheduled meeting with local reporters he was optimistic that foreign creditors would accept the proposals. "The negotiations would be based on the approved workout plans. The negotiations would take time but not more than one month," Lee said. The Korean stock market appeared optimistic about a resolution, with foreign buying pushing the composite index up 1.55 percent to 890.18 at the close. Shares of the three listed major affiliates all gained, with Daewoo Corp grabbing the highest turnover at 34.7 million shares, up 130 won to 1,040. Korea First Bank, Hanvit Bank and Korea Development Bank said separately they proposed swapping a combined five trillion won ($4.2 billion) of debt owed by the four Daewoo firms for equity. They also proposed local creditors jointly buy a combined 25 trillion won worth of new convertible bonds from the four companies either in cash or in exchange for debt. South Korea's second-largest business conglomerate is in the midst of a major workout to stave off bankruptcy stemming from its mountain of debt. The process involves restructuring its 12 main affiliates. Workout plans for the four affiliates are being closely scrutinised as these are the biggest businesses in the group and have the most exposure to foreign loans. Separately, a spokeswoman for Korea Asset Management Corp (KAMCO), a state agency that buys bad debt for resale, told Reuters on Tuesday it was ready to play a key role in selling off units of the Daewoo Group. "We would have to decide whether to put (loan assets) up for international auction or whether we work it ourselves," KAMCO's Michelle Han said. She said a meeting of economy ministers on Thursday would determine the value of the Daewoo affiliates' non-performing loans and how much of that KAMCO would take over. These and other plans for the 12 Daewoo Group affiliates would still be subject for discussion among foreign creditors which hold some 10 percent of the group's debt. FSC chairman Lee also said he believed restructuring plans for Daewoo Telecom Co and Ssangyong Motor Co, which were turned down on Monday, would in the end be approved. Domestic creditors of Daewoo Telecom and Ssangyong are due to meet again within 10 days but officials at the two banks have said they were unsure whether the workout proposals would be revised for the new meetings. Korea First Bank, the main creditor bank of Daewoo Telecom, had proposed exchanging 1.49 trillion won of Daewoo Telecom's debt for equity or convertible bonds. Ssangyong's main creditor Chohung Bank had proposed swapping 130 billion won of the company's debt for equity plus $240 million in trade financing.($1-1,196 won) DAUPHIN TECHNOLOGY: Engages Grant Thornton LLP As New Auditors -------------------------------------------------------------- On October 27, 1999, Dauphin Technology, Inc.engaged Grant Thornton LLP as its new independent accountants to audit the company's financial statements. No further information was given, neither was there any information proffered concerning the company's former accounting firm. EAGLE CAPITAL: Trustee's First Amended Disclosure Statement ----------------------------------------------------------- Prior to its bankruptcy filing, the debtor sold pools of mortgage loans in transactions commonly known as "securitizations." In such securitizations, a pool of mortgage loans then owned by the debtor were sold by the debtor to third parties and the debtor was separately retained in such by the securitizations as a contract servicer of the respective pool of mortgage loans. On January 14, 1999, the Bankruptcy Court appointed Walter O'Cheskey as Trustee. He has conducted an orderly liquidation and wind down of the debtor's affairs. Under this plan, the secured creditors which have not obtained their collateral will be allowed to do so. Any remaining claim of the Secured Creditors will be treated under this plan as an unsecured claim. This plan provides for the sale, liquidation or retention of substantially all other assets of the debtor by the Trustee for the benefit of the holders of allowed claims and/or interests. The plan provides for the settlements with several secured creditors, notably, Heller Financial Inc. The plan also provides for the distribution of the Retained Assets for the payment of the debtor's creditors. FORCENERGY: Voting Procedures Approved By Court ----------------------------------------------- The debtors are authorized by the court to employ Arthur Andersen LLP as the voting agent. The voting deadline proposed by the debtors for accepting or rejecting the plan and approved by the court is 5:00 PM on November 30, 1999. All procedures proposed for voting by each class are approved by the court. GENESIS DIRECT: Seeks Authority To Sell Assets ---------------------------------------------- The debtors, Genesis Direct, Inc., et al. seek court authority to sell substantially all of their assets of the Proteam.com an d Voyager businesses. There shall be a minimum bid of $10 million to begin the auction sale. All offers subsequent to the opening bid must exceed the prior offer by no less than $250,000. A hearing on the motion shall be conducted on November 4, 1999 at 10:00 AM before the Honorable Rosemary Gambardella, US Bankruptcy Court, District of New Jersey. The debtor states that the proposed auction sale is not a sub rosa plan of reorganization, and that such a sale prior to filing of a plan is permissible. By separate motion, the debtors seek an immediate sale of The Edge Company Catalog, LLC pursuant to a certain Asset Purchase Agreement with Damark International Inc. The purchaser has insisted that the asset sale close on or before December 7, 1999, in order to take advantage of the up-coming holiday season. GREATER SOUTHEAST: Judge Grants One Day Delay in Announcement ------------------------------------------------------------- Bankruptcy Judge S. Martin Teel Jr. yesterday granted a one-day delay in the announcement of Greater Southeast Community Hospital's proposed sale to this afternoon, The Washington Post reported. David E. Rice, an attorney for the Washington hospital, did not disclose the name of the firm bidding for the hospital but said he would provide details today. If the hospital fails to find an investor, the judge would have to order Greater Southeast's liquidation. (ABI 03-Nov-99) HARNISCHFEGER: IAM-Backed Group Makes Offer for Beloit Corp ----------------------------------------------------------- The International Association of Machinists and Aerospace Workers (IAM) is pleased to announce that a consortium of KPS Special Situations Fund, L.P. and Pegasus Capital and Advisors L.P. ("the KPS/Pegasus Group") submitted a letter of intent on October 27th, 1999 to purchase the assets of Beloit Corporation, a subsidiary of Harnischfeger Industries Inc. Harnischfeger filed for protection from its creditors pursuant to the Chapter 11 Bankruptcy code on June 7, 1999. The Consortium intends to finalize discussions with the creditors of Harnischfeger on an expeditious basis, and a buyout could occur within 60 days of the court's approval of the KPS-Pegasus Group's letter of intent. IAM understands that completion of the buyout is subject to additional due diligence that would be completed within the 60 day period, but is not subject to financing contingencies. The IAM strongly advocates the sale of the Beloit assets to the KPS/Pegasus Group and encourages the Harnischfeger Creditors Committee to complete a sale on an accelerated basis. The IAM strongly encourages the political leadership of each affected community, state and region to express their public support of the sale of Beloit to the KPS/Pegasus as a going concern. The IAM and the KPS/Pegasus Group are in advanced discussions with respect to an employee participation in the buyout, and we are pleased that KPS/Pegasus intends to work with all Beloit's employees and stakeholders to make the company a success. The KPS/Pegasus Group plans to continue to operate the Blackhawk facility, which the IAM believes will bring substantial value to the creditors. Blackhawk is the only facility capable of completing the APP order for two paper-making machines. Beloit employs about 5,000 workers in the U.S., Poland, Canada, England, Brazil and France. The majority of the workers are in the U.S. The IAM represents several hundred employees in plants in Wisconsin, Illinois, and Pennsylvania. IAM understands, subject to a final due diligence review, that the KPS/Pegasus Group intends to recapitalize and restructure Beloit and continue a substantial portion of Beloit's operations as a going concern. If Beloit did not continue operation as a viable going concern, it would be an inexcusable tragedy for thousands of working families in the United States, America's manufacturing base and technological leadership. Beloit is one of the worlds leading, and the only U.S. based, manufacturer of capital equipment, replacement parts, roll and technical service providers to the global pulp, paper and forest products industries. Beloit has installed approximately 70% of the world's paper machines and is a technological leader in this field. The retention of this technology and manufacturing base is a strategic U.S. asset. KPS Special Situations Fund, L.P. is a $210 million private equity fund, which invests, in distressed situations, often in partnership with employees. Pegasus Capital and Advisors, L.P. is a $600 million private equity fund with a similar investment focus. These two groups have a strong knowledge of the pulp, paper and forest products industries through other investments. HVIDE MARINE: Court Approves Disclosure Statement ------------------------------------------------- Hvide Marine Incorporated (OTC Bulletin Board: HMARQ) announced approval by the United States Bankruptcy Court for the District of Delaware of the Disclosure Statement regarding the Company's proposed Plan of Reorganization. The Plan, which was filed on October 1 and amended on November 1, has the support of the Official Committee of Unsecured Creditors in Hvide's Chapter 11 case, including representatives of the holders of approximately 63% of Hvide Marine's $300 million of 8 3/8% Senior Notes and nearly 50% of its outstanding Trust Convertible Preferred Securities. "The decision by the Court allows us to proceed with the solicitation of votes on the Plan of Reorganization," commented Jean Fitzgerald, Chairman, President and CEO. "The solicitation package will be mailed later this week to creditors, shareholders and other interested parties, and a confirmation hearing is scheduled for Wednesday, December 1. We are encouraged by developments to date and remain on schedule to emerge from Chapter 11 by year- end or early next year." As previously announced, the Company filed for Chapter 11 protection on September 8, 1999. At that time, the Company also entered into a $60 million debtor-in-possession credit facility to provide sufficient liquidity throughout the period of reorganization to fulfill customer contracts and pay employees, vendors and trade creditors. Under the terms of the Plan of Reorganization, holders of the Company's 8 3/8% Senior Notes would exchange their Senior Notes for 9,800,000 shares of common stock of the reorganized Hvide Marine, representing 98% of the new common equity; holders of the Trust Convertible Preferred Securities would receive 200,000 shares of common stock of the reorganized Hvide Marine, representing 2% of the new common equity, together with warrants to purchase an additional 125,000 shares; and holders of the Common Stock would receive warrants to purchase 125,000 shares of the common stock of the reorganized Hvide Marine. The warrants would be exercisable at $38.49 per share and would have a term of four years. Completion of the Plan is subject to various conditions, among them obtaining refinancing for the Company's bank borrowings, including those under the debtor-in-possession credit facility announced on September 9. Discussions with potential lenders regarding a refinancing package are ongoing. Completion of the Plan is also subject to confirmation by the Court. With a fleet of 275 vessels, Hvide Marine is one of the world's leading providers of marine support and transportation services, primarily to the energy and chemical industries. Visit Hvide on the Web at www.hvide.com. JITNEY-JUNGLE: Creditors Attempt to Move Case to Mississippi ------------------------------------------------------------ Stating that "[T]his case has brought forum shopping to an entirely new level of inappropriateness," three Mississippi power companies are asking the U.S. Bankruptcy Court for the District of Delaware to transfer Jitney-Jungle Stores of America Inc.'s bankruptcy case to Southern Mississippi. Specifically, the power companies assert that Jitney-Jungle created its Delaware bankrupt subsidiary P&S Operations Inc. solely to allow the company to file for bankruptcy in the state. (The Daily Bankruptcy Review and ABI November 3, 1999) JUST FOR FEET: Shoe Retailer Files Pre-packaged Bankruptcy ---------------------------------------------------------- Just For Feet Inc., Birmingham, Ala., announced yesterday that it has agreed to file a pre-packaged chapter 11 one day after missing an $11 million interest payment on $200 million in bond debt and less than a week after it announced it would close 85 specialty shops, according to the Associated Press. The company reached the agreement with a majority of holders of its 11 percent senior subordinated notes due 2009; they would gain control of 100 percent of the reorganized company's stock after it emerges from bankruptcy. Per the agreement, the majority of the noteholders have agreed not to take action against the company. The athletic footwear chain said the agreement will cut the company's overall indebtedness by 50 percent and "allow the company to aggressively pursue its operational turnaround." (ABI 03-Nov-99) MAXIM GROUP: Change Of Corporate Name On Meeting Agenda ------------------------------------------------------- The annual meeting of shareholders of The Maxim Group, Inc. will be held on Tuesday, December 14, 1999 at 10:00 a.m., at the principal office of the company located at 210 TownPark Drive, Kennesaw, Georgia, during which time the following matters will be considered: (1) Election of three (3) directors to serve for a term of three years and until their successors are elected and qualified; and (2) Approval of an amendment to the Certificate of Incorporation of the company to change the corporate name to "Flooring America, Inc.". Only shareholders of record at the close of business on November 1, 1999 will be entitled to notice of and to vote at the meeting or any adjournments or postponements thereof. MONTGOMERY WARD: Klaff Announces $8.6M Sale of Two Properties ------------------------------------------------------------- Klaff Realty LP has announced the sale of two retail properties it had previously acquired from Montgomery Wards in two separate transactions. The properties, totaling 195,000 square feet, were sold for a total of $8.6 million. The first property sold comprises a vacant, 110,000-square-foot facility that is part of Valley View Mall, a regional mall in Roanoke, Va. This property was sold to the owner of the mall, Faison, for $5.25 million. Klaff originally acquired the facility at a bankruptcy auction of Montgomery Wards properties in the spring of 1999. The second property sold is an 88,000-square-foot facility attached to College Hills Mall in Normal, Ill. Klaff originally acquired the property at a bankruptcy auction of Montgomery Wards properties in 1998. That same year, Klaff leased 94 percent of the space to Hobby Lobby, the national hobby store chain. The facility was just sold to a private investor for $3.35 million. Klaff is continuing to redevelop and reposition the nine remaining properties of the former Montgomery Wards retail sites it acquired in two separate portfolios in 1998 and 1999. In partnership with Lubert-Adler Real Estate Opportunity Fund, Klaff purchased 49 retail stores located around the country from the Chicago-based retailer in March 1998. In a May 1999 transaction, Klaff purchased a second portfolio of 22 Montgomery Wards sites. The following are the remaining properties in the portfolio of Montgomery Ward sites that Klaff Realty LP acquired in 1999. Southridge Mall 1111 S.E. Army Post Rd. Des Moines, IA 109,054 sf Kirkwood Mall 513 Kirkwood Mall Bismark, ND 101,438 sf Sunbury Plaza SC 1125 N. 4th Street Sunbury, PA 57,402 sf Cheyenne 1510 E. Pershing Road Cheyenne, WY 88,243 The following are the remaining properties in the portfolio of Montgomery Ward sites that Klaff Realty LP acquired in 1998. Orange Blossom 7531 S. Orange Blossom Orlando, FL 101,351 sf Outlet World Site 301 34th Street North St. Petersburg, FL 14,200 sf Terrace Mall 3545 W. Broadway Robbinsdale, MN 189,672 sf Mohawk Mall 420 Baltown Road & State Schenectady, NY 169,194 sf Prestonwood Town Center Prestonwood Blvd. Dallas, TX 24,411 sf NIAGARA MOHAWK: Cash Flow Significantly Improves ------------------------------------------------ Niagara Mohawk Holdings, Inc.'s cash flow has significantly improved as the company completes the first year of the full impact of the Master Restructuring Agreement with a group of Independent Power Producers, and the POWERCHOICE agreement. Niagara Mohawk Holdings, Inc. is the parent company of Niagara Mohawk Power Corporation, a regulated energy delivery company. Although the Master Restructuring Agreement has and will continue to depress earnings because of the amortization of the $4 billion regulatory asset recorded in connection with it (a non-cash charge), the lower payments to Independent Power Producers more than offset the higher interest costs incurred to finance the Master Restructuring Agreement. The increased cash flow from operations, together with the proceeds from the sale of the company's coal and hydro electric generating assets and a cash refund from the Internal Revenue Service received earlier this year, has allowed Niagara Mohawk to retire over $1 billion in debt during 1999. "We have followed through on our strategy to retire capital and have begun to rebuild shareholder value," said William E. Davis, chairman and chief executive officer of Niagara Mohawk Holdings. Earnings before interest, income taxes, depreciation and amortization (EBITDA) for the 12 months ended September 30, 1999, were $1.3 billion, an increase of approximately $400 million compared to the 12 months ended September 30, 1998. The significant improvement in EBITDA is due primarily to the reduction in payments to the Independent Power Producers. The company reported a loss in the third quarter of 1999 of $31.7 million, as compared to earnings of $8.5 million, for the third quarter in 1998. The non-cash amortization of the Master Restructuring Agreement regulatory asset reduced earnings in the third quarter of 1999 by $62.8 million, and by $20.9 million, in the third quarter of 1998. Results in the third quarter of 1999 also reflect the cost of the early redemption of approximately $670 million of long-term debt, which reduced earnings in the third quarter by $13.1 million. Earnings for the third quarter of 1998 were lower by 5 cents per share as a result of incremental expenses incurred to restore service following a severe windstorm. The company reported a loss of $43.4 million, for the 12 months ended September 30, 1999, as compared to a loss of $132.3 million, for the 12 months ended September 30, 1998. Niagara Mohawk's lower aggregate fuel and purchased power costs, partly offset by increased interest charges, improved earnings by $158.7 million during the 12-month period ended September 30, 1999. This improvement was offset by the non-cash amortization of the regulatory asset of $230.3 million. This reflects the first year of the full impact of the Master Restructuring Agreement and POWERCHOICE. Results for the 12 months ended September 30, 1999, also reflect the costs of the early redemption of approximately $822 million of long-term debt, which reduced earnings in this period by $23.8 million. The loss for the 12-month period ended September 30, 1998, includes the impact of the one-time, non-cash POWERCHOICE charge of $171.1 million after-tax taken in June 1998 and the incremental costs of the January ice storm. Electric revenues in the third quarter of 1999 were $853.6 million, down 0.7 percent from the third quarter of 1998, primarily due to POWERCHOICE rate reductions and lower wholesale sales. For the 12 months ended September 30, 1999, electric revenues were $3.2 billion, down 3.0 percent compared to the 12 months ended September 30, 1998. Natural gas revenues in the third quarter of 1999 were $73.7 million, up 3.8 percent from the third quarter of 1998. For the 12 months ended September 30, 1999, natural gas revenues were $573.9 million, down 3.4 percent compared to the 12 months ended September 30, 1998. OPTEL: Files Chapter 11 Bankruptcy/Lists Assets & Liabilities ------------------------------------------------------------- On October 28, 1999, OpTel, Inc. and certain of its affiliates and subsidiaries announced a voluntary Chapter 11 filing in the United States Bankruptcy Court in Delaware. The filing allows the company to operate its businesses in the normal fashion under court protection while it continues discussions with representatives of certain major creditors and others on a restructuring plan. The company expects to have sufficient liquidity throughout the period of reorganization to ensure payment of its obligations incurred on an ongoing basis. The company anticipates that it will complete its restructuring and emerge from Chapter 11 during 2000. The petitions filed by the company have appended a consolidated exhibit which reflects that on a consolidated basis, the company has assets of approximately $540,424,000 and liabilities of approximately $496,220,567. The company's assets consist primarily of its video and telecommunications networks and customers, and its liabilities include primarily secured debt owed to two banks of approximately $10,000,000, other secured debt, capital lease claims, publicly traded 13% Senior Notes of approximately $226,218,611, publicly traded 11 1/2% Senior Notes of approximately $203,833,333, and unsecured trade liabilities. The instant filing is occasioned by the continued need for substantial capital and, in its existing condition, inability to obtain additional public or private debt and/or equity financing. "Today's filing helps the company to serve its customers and operate its systems while it restructures its business," commented Michael Katzenstein, newly appointed President and CEO. R. Douglas Leonhard, an OpTel director since 1998 and who was named Chairman of the Board today said, "The company will be managed to preserve the value of its assets and customers and to conserve capital to fund our ongoing operations. We believe we have embarked on a course of action which will benefit our creditors, employees and customers." Optel Inc. is a provider of communications services, including local and long distance telephone, cable television and high speed Internet access services, to residents of multiple dwelling units in the United States. In each market that it serves, it seeks to become the principal competitor in the multiple dwelling units marketplace to the incumbent local exchange carrier and the incumbent franchise cable television operator by providing a package of voice, video and Internet access services at competitive prices. The company currently provides cable television and telephone services in a number of metropolitan areas including Houston, Dallas-Fort Worth, Los Angeles, San Diego, San Francisco, Miami, Fort Lauderdale, Orlando, Tampa, Phoenix, Denver, Chicago, Atlanta, Indianapolis, and Greater Washington, D.C. The company currently provides Internet access services in Houston, Dallas-Fort Worth, Denver and San Francisco. OPTEL: Fiscal Year & Fourth Quarter Results Reported ---------------------------------------------------- OpTel, Inc released its unaudited financial results for the fourth quarter and the twelve months of the fiscal year ended August 31, 1999. Net loss attributable to common equity for the quarter amounted to $30.7 million versus $30.8 million for the fourth quarter of 1998. Net loss attributable to common equity for twelve months of fiscal 1999 amounted to $114.6 million versus $83.1 million in fiscal 1998. These results are subject to potential audit adjustments. On October 28, 1999 OpTel, and certain of its affiliates and subsidiaries, filed for protection under Chapter 11 of the US bankruptcy laws. The filing allows the company to operate its businesses in the normal fashion under court protection while it continues discussions with representatives of certain major creditors and others on a restructuring plan. Optel indicates it expects to have sufficient liquidity throughout the period of reorganization to ensure payment of its obligations incurred on an ongoing basis. The company anticipates that it will complete its restructuring and emerge from Chapter 11 during 2000. OpTel is a leading network based provider of integrated communications services, including local and long distance telephone, cable television and high speed Internet access services in the United States. The company currently provides cable television and telecommunications services in a number of metropolitan areas including Los Angeles, San Diego, San Francisco, Phoenix, Denver, Houston, Dallas-Fort Worth, Chicago, Indianapolis, Atlanta, Miami-Ft. Lauderdale and Orlando- Tampa. OpTel is majority owned by Le Groupe Videotron Ltee, owner of the second largest cable television operator in Canada. PLAY BY PLAY TOYS: Delays Year-End Financial Filings ---------------------------------------------------- On October 25, 1999, Play By Play Toys & Novelties completed a refinancing of its senior indebtedness, a restructuring of its subordinated debentures, and settlement of a lawsuit with the former shareholders of an acquired company. The company's existing senior credit facility had expired July 31, 1999, although the company had obtained extensions through October 29, 1999. In addition, the company was in default under its subordinated debentures prior to the restructuring. According to the company, due to the significant burden placed on its accounting and finance staff by the refinancing and restructuring, and the timing of these very significant subsequent events, the company could not, without unreasonable effort or expense, have prepared its financial information and other required disclosures in order to timely file its annual report for the fiscal year ended July 31, 1999. Play By Play Toys & Novelties, Inc. expects to report a significant loss for the year ended July 31, 1999 versus net income of $8.4 million for the prior fiscal year. The company attributes the anticipated loss to a decline in net sales of approximately 12%, principally in the company's domestic retail and international operations and certain significant charges to be recorded in the fourth quarter in connection with the company's decision to accelerate its inventory reduction initiatives and to write-down the guaranteed royalty advances on certain entertainment character licenses the company believes it will be unable to earn out over the lives of the agreements. Because the company is in the process of finalizing its financial statements it is unable to quantify with certainty the impact of the above-described charges. PRESLEY COMPANIES: Waiver of Minimum Requirement In Tender Offer ----------------------------------------------------------------- William Lyon and William H. Lyon have waived the minimum share tender requirement in connection with their tender offer for up to 10,678,792 outstanding shares of Series A common stock of The Presley Companies, a Delaware corporation, at a price of $0.655 per share. The offer initially was conditioned upon there being validly tendered and not withdrawn prior to the expiration of the offer at least 1,989,180 Series A shares. The offer is no longer conditioned upon the tender of a minimum number of Series A shares. All other terms and conditions of the offer remain unchanged from those set forth in the offer to purchase dated October 7, 1999. PURINA MILLS: Reports Bankruptcy Filing To SEC ---------------------------------------------- On October 28, 1999, Purina Mills, Inc., as part of an overall financial restructuring, the company and ten of its affiliates commenced reorganization cases under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The company said it will promptly file a proposed plan of reorganization, underscoring its goal of completing its reorganization and emerging from Chapter 11 as quickly as possible. During the restructuring, the company says its operations and ingredient supply will not be affected. According to the company, the business will continue to supply and service its customer base without interruption. The financial restructuring is necessary due to the current downturn in commodity prices and depressed agricultural markets, particularly in the swine sector, that have restricted the company's ability to service debt associated with the purchase of Purina Mills by Koch Industries, Inc. in 1998. The company said all operations otherwise were cash flow positive. In papers filed with the Bankruptcy Court, the company listed unsecured debt of over $350 million arising largely from the 1998 purchase transaction. Purina Mills also announced that it has received a commitment for up to $50 million in Debtor-In-Possession (DIP) financing from a group of lenders led by Chase Bank of Texas, N.A. This new financing will provide the company with working capital during its reorganization. According to the company, Chase Bank of Texas, N.A. agreed to provide the DIP financing after a review of the company's business plan. Purina Mills said it anticipates focusing on its core businesses, implementing its strategic business plan and taking the steps necessary to become a strong, stand-alone enterprise, independent of Koch Industries. Under the company's anticipated plan of reorganization, all unsecured debt will be converted to equity in a reorganized Purina Mills. Koch Industries' equity interests in Purina Mills through its parent corporation, PM Holdings, would be canceled. The company said that the original concept of the Koch-Purina relationship was to develop a number of operational synergies and strategic initiatives to create a world-class agriculture business. This included taking advantage of Koch's expertise in commodity trading, risk management and use of alternative ingredients in feed products through a proprietary Koch technology. According to the company, however, these synergies failed to materialize. "Unquestionably, under these circumstances, the current downturn of the agriculture markets, especially swine, had a dramatic impact on our ability to service our acquisition-related debt," said Brad Kerbs, Purina Mills' President and Chief Operating Officer. "But apart from that debt, our financial condition is sound. We anticipate we will operate on a positive cash flow basis going-forward." Plans call for Koch to return all operational functions, which had been transferred to Koch's base in Wichita, back to Purina Mills' headquarters in St. Louis. According to Mr. Kerbs, the Chapter 11 filing will allow Purina Mills to restructure its debt and emerge from the reorganization as a properly capitalized company. The reorganized Purina Mills, said Mr. Kerbs, will have a clear commitment to customers and employees, control of its own destiny and a financial structure that will give the 105-year-old animal nutrition company a healthy balance sheet as it begins the new millennium. In September, Purina Mills announced management and operational changes designed to better serve local markets by segmenting its business into two profit centers, its Dealer and Livestock Production Systems businesses. Both profit centers will take independent actions to evolve to best serve their respective dealers and customers, the company said. Mr. Kerbs emphasized that the decision to engage in a financial restructuring will allow Purina Mills to continue to focus on its long-standing relationships with independent dealers and livestock production systems. "But, given current markets where there is an oversupply of both feed and animal products, we have adjusted our business models to better manage our resources," said Mr. Kerbs. "Supporting the substantial acquisition-related debt in this environment was just not possible." Darrell Swank, Purina Mills' Chief Financial Officer, said that, without the company's $350 million subordinated debt and with the financial security of the $50 million in DIP financing, the company is well positioned to adjust to current market conditions. Purina Mills is America's largest producer and marketer of animal nutrition products. Based in St. Louis, Missouri, the company has 49 plants and 2500 employees nationwide. Purina Mills is not affiliated with Ralston Purina Company, which is the registered owner of the trademarks "Purina," the checkerboard logo and Purina Dog Chow brand and Purina Cat Chow brand pet foods. SGL CARBON: Positive Outlook for the Fourth Quarter of 1999 ----------------------------------------------------------- "The positive upward trend in both sales and earnings recorded in the second quarter of the year continued in the third quarter with a slightly slower pace. Third quarter operating results in the Carbon and Graphite Business Area (CG) improved slightly compared to the previous quarter despite lower volumes due to seasonal and shipment effects. The Technical Products Business Area (TE) was affected by once-off costs," explained Robert Koehler, Chairman of the Executive Committee of SGL CARBON AG (NYSE: SGG), at the presentation of third quarter results in Frankfurt/Main, Germany. Consolidated sales in the third quarter of 1999 were DM 479 million, 5% lower than in the second quarter. In the Carbon and Graphite Business Area, seasonal influences and delays in some delivery dates led to sales of DM 262 million, dropping 9% against the excellent results recorded in the second quarter of 1999. Third quarter sales in the Specialty Graphite Business Area (SG) rose by 4% to DM 101 million. In the semiconductor business, a gradual improvement in business conditions is now noticable. Third quarter sales in the Technical Products Business Area (TE) decreased slightly to DM 115 million. Although development in brake disc materials and fuel cells components remained strong, the slump in the chemicals industry and seasonal effects in the corrosion protection business had a negative impact. Sales for the first nine months of the year amounted to DM 1,396 million, down 15% year on year. At DM 55 million, third quarter operating results were 12% below the previous quarter's level. The operating results for the CG business however increased, despite a seasonally influenced drop in graphite electrode volumes. The reasons for the rise were improved capacity utilization and initial cost savings from our restructuring program. The results of SG exhibit the beginning of the expected turnaround with slightly improved operating results over the previous quarter, while TE results declined compared to the previous quarter due to seasonal effects, higher research and development cost and start-up costs relating to the expansion of carbon fiber capacity in Scotland. At DM 136 million, the operating results for the first nine months of this year were still substantially less than those for 1998, mainly due to the weak first quarter. The anti-trust proceedings in North America are nearing their conclusion. Most of the remaining US civil suits have now been almost completely settled. The settlement agreements, which must be approved by the U.S. bankruptcy court overseeing the Chapter 11 case filed by SGL CARBON Corporation, will release both SGL CARBON Corporation and SGL CARBON AG of all claims. This will allow the Company to start resolving the Chapter 11 proceedings of the US subsidiary. The acquisition of Siershahn/Germany-based Keramchemie GmbH (KCH), which is subject to the approval of the anti-trust authorities, represents a major step in our previously communicated TE expansion strategy. With 1998 sales of approx. DM 530 million, KCH is one of the leading suppliers in the industrial corrosion protection business. The company's activities supplement SGL CARBON's own business -- currently approx. DM 200 million in sales -- in terms of both products and regional presence. The merger is intended to produce a global corrosion protection business with a competitive market position and technological edge. As previously announced in our outlook for the second half of 1999, we expect strong sales and earnings in the last quarter especially in the CG Business Area. All in all, fourth quarter results should be above those for same quarter of the previous year, thus confirming the upward trend of the second and third quarters. "As already explained at the beginning of the year, 1999 is to be seen as a transitional year to create the basis for future growth. The expected resolution of our anti- trust problems in the near future, the expansion of the TE Business Area and the planned price increases for graphite electrodes in Western Europe make us confident that we are on track to regain our former strength," said Koehler. STEEL HEDDLE: Names New President --------------------------------- Robert W. Dillon has been named President of Steel Heddle, the Greenville, South Carolina, based textile machinery accessory manufacturer. Mr. Dillon, a thirty-year Steel Heddle veteran, brings to his new position a strong and unusual combination of experience and expertise in textile technology, sales, marketing, and manufacturing. His career at Steel Heddle began in 1969 following his graduation from the Philadelphia College of Textiles & Science where he received his degree in Textile Marketing & Management. Mr. Dillon's responsibilities have included District Sales Engineer, Marketing Manager, Vice President of the Heddle Division, and Executive Vice President. In these positions, many of Steel Heddle's major accomplishments have been achieved by expanding its presence in the growing international markets of Japan and Southeast Asia. Steel Heddle, in addition to its leadership position in domestic markets, is now recognized as a global leader in supplying weaving accessories to the world market. Mr. Dillon becomes only the twelfth President of Steel Heddle in its 101 years of operation. He succeeds B. G. (Bennie) Team, who stepped down at the end of October, after serving as president for eight years. Steel Heddle also operates an expanding Rolled Wire Products Division in Westminster, South Carolina. In addition to its textile wire capabilities, this operation is producing products for the growing photovoltaic wire market, as well as flat wire products for the automotive, electronics, computer and aircraft markets. Other Steel Heddle plants are located in North Carolina and Mexico. STUART ENTERTAINMENT: Court Approves Key Executive Agreements ------------------------------------------------------------- On October 26, 1999, the US Bankruptcy Court for the District of Delaware entered an order approving and authorizing the debtor, Stuart Entertainment Inc. to enter into certain portions of thw employment agreements, as amended, with the five key executives. STUART ENTERTAINMENT: Court OK's Corporate Headquarters Lease ------------------------------------------------------------- By court order entered on October 22, 1999, the debtor, Stuart Entertainment Inc. is authorized to enter into a commercial office space lease for its corporate headquarters with L&B 8200 Normandale, Inc. The lease covers a building located at 8200 Normandale Boulevard, Bloomington, Minnesota. STUART ENTERTAINMENT: Extension of Period To Assume/Reject Leases ----------------------------------------------------------------- On October 27, 1999, the US Bankruptcy Court for the District of Delaware entered an order extending the period within which the debtor must assume or reject executory contracts and unexpired leases. The period is extended through and including December 14, 1999. STUART ENTERTAINMENT: Objects To Power Bingo's Motion For Relief ---------------------------------------------------------------- Power Bingo Group has filed a motion seeking to compel the debtor, Stuart Entertainment, Inc. to comply with the terms of a License Agreement. The debtor believes that PBG is not entitled to compel the debtor's specific performance of an executory contract that has not yet been assumed or rejected, and the debtor objects to the relief requested in the motion. The debtor asserts that this is a distribution agreement, not a license agreement. The debtor further argues that it cannot be compelled to specifically perform an executory contract pending the debtor's assumption or rejection of that contract. TENET HEALTHCARE: First Year in Philly a Success ------------------------------------------------ The eight Philadelphia-area Tenet hospitals, formerly bankrupt and hemorrhaging one million dollars a day, are collectively beyond break even and are keenly focused on customer satisfaction and community benefit as they prepare to commemorate their first anniversary under new ownership. Lee Domanico, senior vice president of Tenet Healthcare's Pennsylvania Region, told a press briefing today that after one year "there is no question that the healing has begun and that our vital signs are getting stronger." Despite many challenges, he said the hospitals are collectively operating in the black and that they are fixated on achieving excellence in every facet of customer service. Domanico, praising the hospitals' new, comprehensive customer service program, said there has been "remarkable improvement" in the patient satisfaction ratings since Tenet began operating the formerly bankrupt hospitals last November 10. The hospitals in the group are: City Avenue, Elkins Park, Graduate, Hahnemann University, Medical College of Pennsylvania, Parkview, St. Christopher's Hospital for Children, and Warminster. The Tenet official said each hospital and every employee should feel proud of their accomplishments over the past year. And there are tribute activities taking place across the area to mark the milestone. TOROTEL: Reduction Of Par Value Of Common Stock On Agenda --------------------------------------------------------- Matters to be considered at the annual meeting of the shareholders of Torotel, Inc., a Missouri corporation, will be the election of three members to serve on the Board of Directors of the corporation until the next annual meeting of shareholders and until their successors have been duly elected and qualified, unless they shall sooner die, resign or be removed; and to consider and vote upon a proposal to reduce the par value of the corporations common stock from $.50 per share to $.01 per share and to reduce the stated capital of the corporation effective upon the close of business on the day a Certificate of Amendment to the corporations Articles of Incorporation and any other documents necessary to effect a reduction in stated capital are filed with the Secretary of State of Missouri. While the exact date has not yet been announced the company intends to hold it on a Monday at 4:30 p.m. local time, at the corporations offices in Grandview, Missouri. TRANSTEXAS GAS: Claimants Seek To Intervene ------------------------------------------- Alykonis Shipping Corp. and Seaport Shipping Corp. seek leave to intervene and join in the motion of High River Limited Partnership for leave to file a fraudulent transfer complaint or in the alternative for emergency discovery. The claimants state that they were the victims of a fraudulent transfer by TARC and/or TEC and/or Orion Refining Corp., debtors. The claimants assert that they have requested the schedules of liabilities transferred ultimately to Orion and those retained by TARC. The debtor has refused to provide the requested schedules. They also have asked for an explanation of the basis on which certain of TARC creditors were paid, and why they were the only creditors not paid. They particularly wonder why the provisions of the Bulk Sales Act were waived. The creditors claim that the TARC transaction is avoidable as an intentional and constructive fraudulent transfer. Due to the fact that the confirmation hearing is set for November 9, the creditors seek relief on an expedited basis. The creditors have filed a separate motion objecting to the Disclosure Statement of the debtors stating that the plan seeks court approval of a fraudulent transfer. UNITED COMPANIES: Equity Objects To Exclusivity Extension --------------------------------------------------------- The Official Committee of Equity Security Holders objects to the motion of the debtors for an order extending the exclusivity period during which the debtors may file a plan of reorganization and solicit acceptances thereto. The Equity Committee objects to the extension on the grounds that the debtors have failed to make any progress toward a consensual plan of reorganization, the debtors have failed to protect and preserve the remaining assets in the estates; the debtors have failed to develop or implement a business plan at any time during the eight month pendency of these cases; and the debtors have failed to minimize their fees and expenses. USCI INC: Zuckerman Holding Less Than 5% Of Common Stock -------------------------------------------------------- USCI Inc. has reported that Howard Zuckerman, as beneficial owner of 3,000,000 shares of common stock in the company, exercising sole voting and dispositive powers over those shares, now holds less than 5% of the outstanding shares of common stock of USCI Inc. WSR CORP: Hearing To Consider Bonus Program ------------------------------------------- A hearing will be held on November 11, 1999 to consider the motion of the debtors, WSR Corporation and its affiliates, seeking authorization for a reorganization bonus program and amending the employment contract of Alfred Woods. ZENITH: Receives Favorable Bankruptcy Court Ruling -------------------------------------------------- Zenith Electronics Corporation announced that the U.S. Bankruptcy Court said that Zenith's prepackaged plan of reorganization will be confirmed subject to technical modifications to the plan. The modifications apply to releases in favor of third parties and do not affect any distributions to creditors or other provisions of the plan. "We are very pleased with the court's ruling," said Jeffrey P. Gannon, Zenith president and chief executive officer. "We expect the confirmation order will be entered and Zenith will emerge from Chapter 11 shortly." ********* 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. 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