/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/991109.MBX T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, November 9, 1999, Vol. 3, No. 217 Headlines AAMES FINANICAL: Former Keybank CEO To Lead Company Turnaround AAMES FINANCIAL: Reports First Quarter Net Income AMERICAN BANKNOTE: Reaches Preliminary Agreement With Noteholders AMF BOWLING: Announces Third Quarter Operating Results BAPTIST FOUNDATION: Plans Bankruptcy Filing BREED TECHNOLOGIES: Taps Jones, Day as Special Litigation Counsel BREED TECHNOLOGIES: Taps Wasserstein Perella as Advisors BROTHERS GOURMET: Seeks Extension of Exclusivity FACTORY CARD OUTLET: Needs More Time To Assume/Reject Leases JUST FOR FEET: Noteholders Agreement Calls For Chapter 11 Filing KEVCO: Increase In Authorized Shares Of Stock On Meeting Agenda LEVITZ: Continues Reorganization Efforts LONG JOHN: Order Authorizes Employ of KPMG Peat Marwick MARVEL ENTERPRISES: Dickstein Reduces Stock Holdings To Under 5% MERIDIAN CORP: Order Allows Rejection of Leases NATIONAL OILWELL: Acquires Skytop Brewster Assets NOVACARE: Asset Sale Expected To Yield Gain In 2nd Quarter NOXSO CORP: Combined Hearing On Disclosure Statement and Plan OXFORD HEALTH PLANS: Announces Third Quarter Results OXFORD HEALTH PLANS: President William M. Sullivan Resigns PEACHTREE NATURAL: Atlanta Gas Light Receives Interim Relief PHILIP SERVICES: Moves Ahead with Solicitation of Canadian Plan RECYCLING INDUSTRIES: Seeks To Extend Exclusivity SANYO AUTOMOTIVE: Order Authorizes Interim Financing SILICON GAMING: Reports Change In Majority Of Directors TELEGROUP, INC: Taps PricewaterhouseCoopers as Accountants TRISM: James F. Higgins Holding 10.2% Of Company Stock TRISM, INC: Order Approves Second Amended Disclosure Statement UNITED COMPANIES: Seek Extension To Assume or Reject Leases TRANSTEXAS: Objections To Confirmation of Plan VENTAS INC: Reaches Agreement On Long-Term Debt Restructuring WORLD VISION: Court Ousts Principals WSR CORP: Order Extends Exclusive Periods Meetings, Conferences and Seminars ********* AAMES FINANICAL: Former Keybank CEO To Lead Company Turnaround -------------------------------------------------------------- Aames Financial Corporation, a leader in subprime home equity lending, has announced that A. Jay Meyerson has been appointed chief executive officer of the company by its board of directors. The company also announced that Mr. Meyerson was appointed to the Board of Directors effective November 1, 1999. Mr. Meyerson, 52, has more than 20 years experience in the consumer finance industry and is the former chief executive officer and chairman of KeyBank USA. He succeeds Mani Sadeghi, a director of Aames who has been acting as interim chief executive since May. "The appointment of Jay is the last phase of a management transition plan that ensured a seamless and orderly succession," said Mr. Sadeghi. "Jay brings operating experience, analytical depth, and well-established leadership abilities to Aames. His appointment is a major step toward the achievement of our strategic objectives of positioning Aames as a prudent, profitable, and innovative leader in the home equity industry." From 1994 to 1997, Mr. Meyerson was the chief executive and chairman of KeyBank USA, the $22 billion (assets) national consumer finance business of KeyCorp. In that role he led the company's expansion into an array of consumer finance businesses including the acquisition of Champion Mortgage, a large East Coast subprime home equity lender. Most recently, Mr. Meyerson was a managing director at KPMG national financial services consulting practice. In addition, he had held senior positions at Wells Fargo Bank, Ameritrust Corporation, and Society Corporation. "I look forward to leading Aames as the company's turnaround is gaining momentum," said Mr. Meyerson. "I am confident that we can now focus on the execution of our business plan to create significant value for our shareholders, nationwide customer base and our broker network. As we move forward, Aames' strategic objectives are to demonstrate sustained operating profitability, grow the business prudently and invest in technologies that leverage Aames' core origination and servicing capabilities." Aames Financial Corporation is a leading home equity lender that currently operates 102 retail branches, and 44 broker offices, serving customers across the country. AAMES FINANCIAL: Reports First Quarter Net Income ------------------------------------------------- Aames Financial Corporation, a leader in subprime home equity lending, reports its results of operations for the three months ended September 30, 1999, reporting net income of $791,000 compared to a $2.2 million net loss in the prior year's quarter. "This quarter marks Aames' return to operating profitability, which is indicative of the progress of the company's turnaround. Additionally, the company successfully completed a series of capital transactions, including an additional $25.0 million dollar investment by Capital Z in August and the recently completed $25.0 million rights offering and related stand-by commitment. The company was also successful in completing a $400.0 million securitization, the company's first since September 1998, and continued to execute sales in the whole loan market," said Mani A. Sadeghi, an Aames director who served as Aames' interim Chief Executive Officer until the recently announced appointment of A. Jay Meyerson to that position. "The securitization also had the positive effect of increasing the total portfolio of loans serviced to approximately $3.9 billion from $3.8 billion reported at June 30, 1999." Total revenue for the quarter was $60.9 million, up modestly from $57.8 million reported in the comparable quarter in 1998, which included $15.3 million of hedge related charges. Total expenses during the September 1999 quarter were $59.6 million as compared to $61.0 million in the comparable period a year ago. "This decline reflects the early results of the company's continuing cost reduction efforts," said Mr. Sadeghi. Mr. Sadeghi continued, "Total loan origination volume amounted to approximately $523.5 million for the quarter, up $11.4 million, or 2.2%, from the $512.1 million in origination volume reported for the quarter ended June 30, 1999. While down from $725.1 million in originations during the three months ended September 30, 1998, the current quarter's origination volume reflects management's decision to decrease its reliance on the correspondent market and focus on profitably growing core retail and wholesale operations." Mr. Sadeghi expressed his appreciation for the involvement of those shareholders who participated in the company's recently completed rights offering. The rights offering, along with the related stand-by commitment, resulted in an additional $25.0 million of equity (prior to expenses) for the company. Mr. Sadeghi said, "The cmpany's results demonstrate progress in implementing its turnaround objectives, which have come in spite of continuing competitive lending markets, unstable capital markets and a rising interest rate environment. With the successful conclusion of the rights offering, we now have $169.0 million in total shareholders' equity and we believe we are positioned to continue to execute our business plan and meet these external challenges." "Looking forward, the management team at Aames is committed to achieving the company's strategic objectives of enhancing operating profitability through prudent cost management and being an innovative leader in the subprime home equity industry," said Mr. Meyerson, Aames' new CEO, "We will focus on cost-efficient origination of quality loans, efficient servicing, and improved execution in securitization and whole loan markets." Aames Financial Corporation is a subprime home equity lender currently operating 102 retail branches and 35 broker offices serving customers across the country. AMERICAN BANKNOTE: Reaches Preliminary Agreement With Noteholders ----------------------------------------------------------------- American Banknote Corporation has reached an agreement in principle on the terms of a financial restructuring with the Informal Committee of the 11-1/4% Senior Subordinated Noteholders who hold more than 85% of those notes; a holder of the company's Convertible Subordinated Notes who holds in excess of 95% of those notes; and more than 55% of the holders of the 10-3/8% Senior Secured Notes. The restructuring will result in the substantial deleveraging of the company by cancelling, in its entirety, the existing $95 million (plus accrued interest) of 11 1/4% Senior Subordinated Notes in exchange for approximately 10.5 million shares of new common stock and by cancelling, in its entirety, the existing Convertible Subordinated Notes in exchange for approximately 220,000 shares of new common stock. The 10 3/8% Senior Secured Notes will be amended to allow the company to make the next two interest payments (December,1999 & June,2000) with additional notes in lieu of cash. In addition, the restructuring contemplates that existing shareholders will receive approximately 900,000 shares of new common stock (subject to certain possible adjustments) and 5 year warrants to purchase approximately 600,000 shares of new common stock in exchange for existing common stock outstanding. Under the agreement in principle, (i) obligations on the company's 11-5/8% Senior Unsecured Notes will be paid as they become due (with past due interest on completion of the restructuring); and (ii) trade obligations and ordinary course payables will also be paid as they come due in accordance with customary terms. The restructuring does not affect any of the company's domestic and foreign subsidiaries nor any of their respective creditors or employees. "The company is pleased that it was able to reach a mutually beneficial arrangement with its noteholders and intends to implement the restructuring expeditiously" said Morris Weissman, Chief Executive Officer of American Banknote Corporation. Additionally, Weissman pointed out that "This significant deleveraging will serve to strengthen the company overall and give it appropriate financial flexibility to implement its business strategy going forward." The agreement is subject to a number of conditions, including definitive documentation. American Banknote Corporation is a leading global full-service provider of secure transaction solutions in carefully selected markets along three major product groups: Transaction Cards & Systems, Printing Services and Document Management, and Security Printing Solutions. A combined strategy of operating along product lines and constant expansion of its electronic transaction activities worldwide reflects the rapidly changing field of commerce. AMF BOWLING: Announces Third Quarter Operating Results ------------------------------------------------------ AMF Bowling, Inc. announces, in its operating results for the third quarter ended September 30, 1999, consolidated revenue of $182.8 million, a 6.2% increase compared with $172.1 million for the same quarter of 1998. For the nine months ended September 30, 1999, AMF reported consolidated revenue of $546.5 million, a 4.9% increase compared with $521.2 million for the same period of 1998. "We have a lot of work ahead of us, but I was pleased that U.S. constant center revenue grew by 7.5% in this last quarter. In addition, I was encouraged that recurring EBITDA increased for both Bowling Centers and Bowling Products during this quarter versus last year," noted Roland Smith, President and CEO of AMF. "And although our corporate expenses exceed last year, the increase includes some one-time expenditures such as the strategic assessment of our business by Bain." For the third quarter of 1999, net loss was $45.0 million compared with a net loss of $35.6 million in the third quarter of 1998. The company recorded a valuation allowance for net operating loss and foreign tax credits which increased net loss by $21.4 million in the third quarter of 1999. It recorded an extraordinary gain of $64.5 million in the third quarter of 1999 related to the purchase of zero coupon convertible debentures that was part of AMF's recapitalization plan. Net loss before extraordinary item was $109.5 million for the third quarter of 1999. For the nine months ended September 30, 1999, net loss was $117.8 million compared with a net loss of $72.0 million for the same prior year period. Net loss before extraordinary item was $182.3. As part of its previously announced recapitalization plan, on July 28, 1999, the company completed a rights offering to existing stockholders and a tender offer for a portion of its outstanding zero coupon convertible debentures due 2018 at a discount to carrying value. In the rights offering, AMF raised $120 million in equity capital and used approximately $72 million of the proceeds to fund the purchase of the debentures resulting in an extraordinary gain of $64.5 million. As a result, the company now has approximately 83,597,550 shares of common stock outstanding. Proceeds of $30 million from the rights offering were contributed as equity to AMF Bowling Worldwide, Inc. which repaid amounts due under its revolving credit facility. At September 30, 1999, AMF had total debt of $1,233.1 million, of which $179.0 million was outstanding under the revolving credit facility, compared to $1,344.0 million, of which $163.0 million was outstanding under the revolving credit facility, at December 31, 1998. As the largest owner and operator of bowling centers in the world, AMF is a leading provider of family fun and recreation. The company owns and operates 539 bowling centers throughout the world, with 417 centers in the U.S. and 122 centers in 10 other countries. AMF is also a world leader in the manufacturing and marketing of bowling products, manufactures and sells the PlayMaster, Highland and Renaissance brands of billiards tables, and owns the Michael Jordan Golf Company. BAPTIST FOUNDATION: Plans Bankruptcy Filing ------------------------------------------- The Baptist Foundation of Arizona plans to file for bankruptcy protection within several days in order to facilitate a restructuring plan, according to a newswire report. More than 13,000 people are owed about $590 million, according to the Foundation, which was created to manage money for Southern Baptist charities. Officials plan to give investors the choice of a cash-out option worth 20 cents on the dollar or shares in a newly created for-profit company. Up to $40 million is available for the cash-out plan. In August, the Arizona Corporation Commission halted Foundation security sales because it allegedly misrepresented investment returns. It also said the Foundation does not have the money in its corporate accounts to cover money owed investors. Investors and state regulators criticize the restructuring plan, which they say leaves too many questions unanswered. (ABI 08-Nov-99) BREED TECHNOLOGIES: Taps Jones, Day as Special Litigation Counsel ----------------------------------------------------------------- The debtors, Breed Technologies, Inc. seek to retain and employ Jones, Day, Reavis & Pogue as special litigation counsel to handle and conduct the ongoing litigation against AlliedSignal Inc. and to reduce to judgment an award from the Tokai Rika Arbitration. BREED TECHNOLOGIES: Taps Wasserstein Perella as Advisors -------------------------------------------------------- The debtors, Breed Technologies, Inc. seek to retain and employ Wasserstein Perella & Co., Inc. as financial advisors. The debtors anticipate that Wasserstein will render financial advisory and related services to the debtors with respect to a possible sale and as needed in these cases. The Engagement letter provides for a monthly financial advisory fee of $125,000. BROTHERS GOURMET: Seeks Extension of Exclusivity ------------------------------------------------ The debtors, Brothers Gourmet Coffees, Inc., et al. seek an extension of the exclusive period during which the debtors may solicit acceptances of their plan of reorganization. A hearing to consider the relief will be held on November 16, 1999. The debtors currently contemplate that the hearing to consider confirmation of the First Amended plan will take place on December 17, 1999. The debtors therefore request, out of an abundance of caution that the court extend the Solicitation Period until January 19, 2000. FACTORY CARD OUTLET: Needs More Time To Assume/Reject Leases ------------------------------------------------------------ The debtors, Factory Card outlet Corp. seek an extension of the time within which they may assume or reject unexpired leases of nonresidential real property. A hearing will be held on November 15, 1999. the debtors request a further extension to and including February 24, 2000. Since the Commencement Date, the debtors have assumed and assigned or rejected 40 leases, or approximately 18% of the 224 leases to which they were a party as of the Commencement Date, and the debtors have exited the Texas and Kansas markets entirely. The debtors are engaged in an ongoing review and analysis of their stores and corresponding leases in order to determine which stores and leases should be components of the debtors' business operations after they emerge from Chapter 11. ICO GLOBAL: To File Plan by Jan. 15 Under Deal with McCaw --------------------------------------------------------- Under its recently announced financing deal with Craig McCaw's Eagle River Investments Ltd., ICO Global Communications has agreed to file a reorganization plan by Jan. 15, which is outlined in recent court filings. The plan will provide that McCaw and other participants supplying financing will convert $500 million of the loans into 40.5 percent of the total shares of new ICO common stock issued in the reorganization plan's effective date. In addition, McCaw will underwrite $700 million in exit financing, which will constitute 34.5 percent of the total issued and outstanding shares of ICO on the plan's effective date. (The Daily Bankruptcy Review and ABI November 8, 1999) JUST FOR FEET: Noteholders Agreement Calls For Chapter 11 Filing ---------------------------------------------------------------- Just For Feet, Inc. has reached an agreement with an Ad Hoc Committee representing the holders of a substantial majority of the principal amount of its $200 million 11% Senior Subordinated Notes due 2009, with respect to a consensual restructuring of the company's debt and equity. In accordance with the terms of the agreement, the company and its subsidiaries will file a petition for relief under Chapter 11 of the Bankruptcy Code in order to effect a pre-negotiated plan of reorganization that implements the consensual restructuring. Under the agreement, the noteholders have agreed to support the payment of trade claims in the ordinary course of Just for Feet's business for those trade creditors that continue to support the company and as such those trade creditors will not be impaired or negatively impacted by the contemplated restructuring. Upon the effectiveness of a proposed reorganization plan, the holders of the notes and certain unsecured creditors will receive 100% of the reorganized company's common stock issued and outstanding on that date subject to dilution for warrants and options to be issued under the reorganization plan. As an incentive, the company's management team will receive a limited number of options to purchase new common stock of the reorganized company. The company's currently outstanding common stock will be extinguished and, subject to numerous conditions, including, approval by the Bankruptcy Court in the Chapter 11 case, current stockholders will receive a pro rata distribution of warrants to purchase up to 10% of new common stock. The warrants will be priced at a substantial premium to the fair market value of the new common stock and will only provide value to current stockholders if the new common stock appreciates to an amount sufficient to fully satisfy allowed unsecured claims including the notes. In addition, the company did not make the interest payment due November 1, 1999 under the notes. The agreement provides that the noteholders will refrain from taking certain actions to enforce the notes or the obligations of Just For Feet under the indenture due to Just For Feet's failure to make the November 1, 1999 interest payment. "The conversion of $200 million of notes to equity under the contemplated restructuring substantially improves the company's financial condition as it will reduce the company's overall indebtedness by approximately 50% and will allow the company to aggressively pursue its operational turnaround", commented Helen M. Rockey, Chief Executive Officer of Just For Feet. "I am pleased that a cornerstone of the agreement with the Ad Hoc Committee provides that our trade vendors, who are our partners, will continue to be paid in the ordinary course of business." The agreement and the proposed reorganization plan are subject to numerous conditions, including that the plan be confirmed by the Bankruptcy Court. There is no assurance that the plan will be successfully implemented, or that there will not be modifications to the terms of the Agreement. Just For Feet, Inc. currently operates both large format superstores and smaller specialty stores that specialize in brand-name athletic and outdoor footwear and apparel. The Just For Feet superstores feature a full line of sports related apparel, a high level of customer service and a distinctive combination of entertainment elements creating an exciting shopping experience. The company currently operates 151 Just For Feet superstores in 26 states and Puerto Rico and 173 company and 39 franchised specialty stores in 23 states and Puerto Rico. KEVCO: Increase In Authorized Shares Of Stock On Meeting Agenda --------------------------------------------------------------- Kevco Inc. is inviting its shareholders to attend the annual meeting of shareholders to be held at 10:00 a.m., local time, on November 22, 1999, at the Marriott Courtyard, 3150 Riverfront Drive, Fort Worth, Texas 76107. The items of business for the meeting are: Election of directors; adoption of an amendment to the Articles of Incorporation authorizing: an increase in the total number of authorized shares of capital stock from 100,000,000 to 150,000,000; and an undesignated class of preferred stock, par value $0.01 per share, two series of preferred stock, and a class of noncommon stock, par value $0.01 per share; and adoption of the 1999 stock option plan. Only shareholders of record at the close of business on October 29, 1999 are entitled to notice of and to vote at the meeting. LEVITZ: Continues Reorganization Efforts ---------------------------------------- Levitz Furniture continues to work on its reorganization efforts, South Florida Business Journal reported. The 80-year-old furniture retailer plans to keep its Boca Raton, Fla., headquarters open and continue operating 64 stores in 13 states, primarily in the Northeast and the West. Levitz filed chapter 11 in 1997 and closed 27 stores, including six in Florida. Although the company has unveiled a new multi-media campaign, Dr. Dennis Palkon, a business professor at Florida Atlantic University said, "It will be very, very difficult" to turn Levitz around. "The sector they're in makes it very, very difficult today." (ABI 08- Nov-99) LONG JOHN: Order Authorizes Employ of KPMG Peat Marwick ------------------------------------------------------- On October 22, 1999, the court entered an order authorizing and approving the employment and retention of KPMG Peat Marwick LP as auditors for the debtors, Long John Silver's Restaurants, Inc., et al. MARVEL ENTERPRISES: Dickstein Reduces Stock Holdings To Under 5% ----------------------------------------------------------------- The following entities ceased, as of October 28, 1999, to be the beneficial owners of more than five percent of the outstanding shares of Marvel Enterprises Inc. Dickstein & Co., L.P. now owns 1,240,797 shares, representing 3.7% of the outstanding shares, and exercises sole voting and dispositive power over said shares. This amount includes 211,601 shares of common stock that Dickstein & Co., L.P. has the right to acquire upon conversion of 203,659 shares of the company's 8% Convertible Exchangeable Preferred Stock held. Dickstein International Limited owns 226,701 shares, or 0.7% of the outstanding shares, also exercising sole voting and dispositive power over these shares, which includes 212,368 shares of common stock that Dickstein International Limited has the right to acquire upon conversion of 204,397 shares of Preferred Stock held by it. Dickstein Partners, L.P., owns 1,240,797 shares representing 3.7% of the outstanding shares with shared voting and dispositive powers. This includes the 211,601 shares of common stock mentioned above which is issuable upon conversion of 203,659 shares of Preferred Stock that may be deemed to be beneficially owned by Dickstein Partner, L.P. Dickstein Partners Inc. owns 1,467,498 shares, with shared voting and dispositive powers. This amount represents 4.3% of the outstanding shares of Marvel Enterprises and includes 423,969 shares of common stock issuable upon conversion of 408,056 shares of Preferred Stock that may be deemed to be beneficially owned by Dickstein Partners Inc. Mark Dickstein owns 16,667 shares with sole powers, and 1,467,498 shares with shared voting and dispositive power, representing 4.4% of the outstanding shares of the company. This amount includes 423,969 shares of common stock issuable upon conversion of 408,056 shares of Preferred Stock that may be deemed to be beneficially owned by Mr. Dickstein and 6,667 shares of common stock issuable upon exercise of options also held by him. Elyssa Dickstein owns 53,550 shares with sole power to vote or direct the voting of, and sole power to dispose of, or direct the dispostion of the 53,550 shares. This represents 0.2% of the outstanding shares of Marvel Enterprises and consists of 53,550 shares of common stock that she has the right to acquire upon conversion of 51,540 shares of Preferred Stock held by her. Together the entities beneficially own an aggregate of 1,537,715 shares of common stock, representing approximately 4.5% of the common stock outstanding. Percentages are based upon 33,532,222 shares of common stock reported outstanding at August 27, 1999 in the company's proxy statement dated September 3, 1999 for the 1999 Annual Meeting of Stockholders held on September 30, 1999. Each share of Preferred Stock is convertible into 1.039 shares of common stock (subject to certain anti-dilution adjustments), votes generally with the common stock as a single class on the basis of the number of shares of common stock into which it is convertible, and votes as a separate class on certain matters as provided in the company's Restated Certificate of Incorporation. From October 29 through November 2, the above entities sold an aggregate of 2,500,000 shares of Preferred Stock, in each case at a price of $6 3/8 per share as follows: On October 29, Dickstein & Co. sold 385,296 shares; on November 1, Dickstein & Co. sold 1,300,000 shares, 500,000 of which were sold in an open market transaction; on November 2, Dickstein & Co. sold 514,704 shares, Dickstein International sold 200,000 shares and Elyssa Dickstein sold 100,000 shares. Other than the November 1 open market sale of 500,000 shares by Dickstein & Co., the sale by the entities of the remaining 2,000,000 shares were effected in privately negotiated transactions. In connection with the sale by the above of an aggregate of 814,704 shares of Preferred Stock to Classic Heroes, Inc., Biobright Corporation and Isaac Perlmutter T.A., on November 2, 1999, certain of the selling parties entered into an agreement with the purchasers in which, among other things, effective upon the sale of the shares, each of the Dickstein Entities signatory to the Letter Agreement and Mark Dickstein, as Dickstein Designator, waive their rights under the Stockholder's Agreement to have a Dickstein Designee nominated and/or elected as a Director and that they relinquish all other rights under the Stockholder's Agreement. MERIDIAN CORP: Order Allows Rejection of Leases ----------------------------------------------- The US bankruptcy Court for the Western District of Tennessee entered an order allowing and authorizing the debtors to reject leases of real property situated at: 11882 Greenville Avenue, Suite 106B Dallas, Texas 2650 N. Military Trail, Boca Raton, Florida 600 East Carpenter Freeway, Irving, Texas One Vantage Way, Nashville, Tennessee NATIONAL OILWELL: Acquires Skytop Brewster Assets ------------------------------------------------- National Oilwell Inc., Houston, announced today that it has acquired the assets of Skytop Brewster Co. out of bankruptcy in a cash transaction valued at about $2 million, according to a newswire report. National Oilwell Products and Technology Group President Pete Miller said, "The acquisition of Skytop Brewster augments National Oilwell's existing line of well servicing and mobile land rigs and allows us to complete more effectively in the lower horsepower mobile rig market." (ABI 08-Nov-99) NOVACARE: Asset Sale Expected To Yield Gain In 2nd Quarter ---------------------------------------------------------- On October 19, 1999, NovaCare, Inc., a Delaware corporation and its wholly-owned subsidiary, NC Resources, Inc., a Delaware corporation, sold the company's 64% ownership interest in NovaCare Employee Services, Inc., a Delaware corporation. The sale was completed as part of a tender offer for all of NovaCare Employee Services' outstanding common stock dated September 15, 1999 by New Plato Acquisition, Inc., a wholly-owned subsidiary of Plato Holdings, Inc. In conjunction with the tender offer, the company received $2.50 per share for its 19,400,000 shares of NovaCare Employee Services common stock, or $48.5 million. Of this amount, $13.4 million has been placed in escrow with respect to the company's guarantee of a four-year contract with NoveCare Employee Services to supply services to the company's remaining operating division. The company is also obligated to pay certain investment banking fees, management bonuses and other costs associated with the transaction. These costs are estimated to total $4.1 million. As a result of this sale, NovaCare expects to report a gain in the second quarter of fiscal 2000. Based on information as of June 30, 1999, this gain is estimated to be $6.9 million. NOXSO CORP: Combined Hearing On Disclosure Statement and Plan -------------------------------------------------------------- By legal notice published in The Wall Street Journal, November 8, 1999, Noxso Corporation announces that the Disclosure statement of the debtor has been conditionally approved. Any objections to the plan must be filed by November 29, 1999. A combined hearing on the Adequacy of the Disclosure Statement and confirmation of the plan will be held at US Bankruptcy Court, 3rd Floor, Historic US Courthouse, 31 E. 11th Street, Chattanooga, Tenn. 37402 on December 2, 1999 at 10:00 AM. OXFORD HEALTH PLANS: Announces Third Quarter Results ---------------------------------------------------- Oxford Health Plans, Inc. reports net income of $28.3 million for the quarter ended September 30, 1999. For the nine months ended September 30, 1999, net income was $18.2 million. "We are enthusiastic about our third quarter results, which were ahead of our expectations. The quarter's results benefited from the combined effect of our initiatives to improve health care and administrative efficiencies," said Oxford Health Plans' Chairman and Chief Executive Officer, Norman C. Payson, M.D. The quarter's results were impacted by non-recurring items and changes in prior period estimates of medical costs. The company recorded a pre-tax gain of $7.0 million on the sale of its Direct Script, Inc. subsidiary. This gain was offset by net pre-tax restructuring charges aggregating $19.9 million primarily relating to (i) severance and other costs associated with previously announced workforce reductions and consolidation of certain of the company's office facilities and (ii) the write-off of certain computer equipment and leases no longer used in operations as a result of the company's turnaround plan. "These steps were taken to further reduce administrative costs and to enhance the company's competitive position in light of improvements in service performance and reductions in claims and correspondence inventories," said Marvin P. Rich, the company's Chief Administrative Officer. Health care services expense benefited from net favorable changes in prior period estimates of medical costs aggregating $19.6 million. "Even excluding these net favorable changes in prior estimates of medical costs, the medical loss ratio was 80.8%," said Dr. Payson. "This compares favorably with a medical loss ratio of 88.9% for the third quarter of last year. Our administrative loss ratio was 13.8% for the quarter compared to 15.1% for the third quarter of last year." Revenues for the quarter ended September 30, 1999 were $1.1 billion, compared to $1.2 billion in the third quarter last year. As of September 30, 1999, Oxford's total membership was approximately 1,629,100 compared to 1,688,700 as of June 30, 1999. The company reported cash flow from operations of $90.2 million for the quarter ended September 30, 1999. As of September 30, 1999, the company had $1.07 billion in current cash and marketable securities and over $230 million in cash in the parent company. After giving effect to the fourth quarter payment for additional insurance described below, Oxford's parent company cash is still expected to exceed $200 million at year-end. The company also noted a $44 million reduction in the amount of outstanding provider advances at September 30, 1999 to $62 million, compared to $106 million at June 30, 1999. The reduction was attributable to progress in collections and offsets against both current claims and provider reconciliations. "Improved operating results, collections of receivables and progress on provider advances, as well as the divestitures of non-strategic assets, all contributed to the significant improvement in operating cash flow," said Yon Y. Jorden, Oxford's Chief Financial Officer. "The company anticipates positive operating cash flow for the fourth quarter and next year," added Jorden. Oxford also announced that it has acquired new insurance policies providing $200 million in additional coverage for certain future defense costs, judgments and settlements, if any, incurred by the company and individual defendants in certain pending lawsuits and investigations, including, among others, the securities class action pending against the company and certain of its directors and officers and the pending stockholder derivative actions. Subject to the terms of the policies, the insurers have agreed to pay 90% of the amount, if any, by which covered losses exceed $175 million, inclusive of approximately $40 million of coverage remaining under preexisting insurance. The aggregate amount of insurance under these new policies is limited to $200 million and the aggregate amount of new insurance in respect of defense costs other than judgments and settlements, if any, is limited to $10 million. The policies do not cover taxes, fines or penalties imposed by law or the cost to comply with any injunctive or other non-monetary relief. A non-recurring charge of $24 million for premiums and other costs will be included in Oxford's results of operations for the fourth quarter of 1999. "Part of the company's turnaround plan involved eliminating or mitigating the problems of the past," said Dr. Payson. "The company is pleased to have this new insurance, which should provide comfort to the company's shareholders and policyholders that Oxford has added protection against a significantly adverse development or result in these cases," said Dr. Payson. Dr. Payson continued, "with the company's improvements in operations and systems and improved financial performance, we have reached a major inflection point. We will now turn our creative energies to our next strategic initiative, growth. Oxford's growth efforts, as in the past, will focus on consumer preference, emphasizing outstanding participating physicians, customer service and consumer-friendly health plans. We are enthusiastic about our prospects." Founded in 1984, Oxford Health Plans, Inc. provides health plans to employers and individuals in New York, New Jersey and Connecticut, through its direct sales force, independent insurance agents and brokers. Oxford's services include traditional health maintenance organizations, point-of-service plans, third-party administration of employer-funded benefits plans and Medicare plans. OXFORD HEALTH PLANS: President William M. Sullivan Resigns ---------------------------------------------------------- Oxford Health Plans, Inc. announced that its President, William M. Sullivan, had resigned from the company to pursue other interests. Mr. Sullivan joined Oxford in 1988 and helped build the company. He was named President in 1998. "Bill made an enormous contribution to Oxford through our turnaround and we wish him every success in his future endeavors," said Dr. Payson. Kevin Hill, Senior Vice President of Sales and an Oxford employee since 1989, has been promoted to Executive Vice President and will assume responsibility for sales and marketing. Mr. Hill and the company's Executive Vice President for Medical Delivery, Charles G. Berg, will report directly to Dr. Payson. PEACHTREE NATURAL: Atlanta Gas Light Receives Interim Relief ------------------------------------------------------------ The bankruptcy court overseeing the Peachtree Natural Gas chapter 11 case has granted Atlanta Gas Light Co. (AGLC) further interim relief; the court gave approval for Peachtree to pay AGLC about $2.2 million by Nov. 15, according to a newswire report. Four payments will be applied toward service Peachtree will receive from AGLC through that date. Peachtree filed chapter 11 on Oct. 26, and on the following day AGLC filed a motion in court requesting permission to file a petition with the Georgia Public Service Commission seeking the assignment of Peachtree's customers to creditworthy natural gas marketers. Under the terms of the temporary relief, AGLC will delay moving forward on its motion. The relief also maintains restrictions on Peachtree's capability to use gas in storage. The hearing on AGLC's motion for relief from the automatic stay will reconvene on Nov. 15. (ABI 08-Nov-99) PHILIP SERVICES: Moves Ahead with Solicitation of Canadian Plan -------------------------------------------------------------- Philip Services Corp., Hamilton, Ontario, said that an Ontario court has dismissed final objections to its reorganization plan, which should permit completion of both the Canadian and U.S. reorganization plans by the end of the month, according to The Wall Street Journal. The metals-recovery and industrial service company, which filed for bankruptcy protection in June in Canada and the United States, will proceed with a vote on the Canadian plan by secured creditors, which involves transferring assets to new entities. Recently the U.S. bankruptcy court approved Philip's U.S. plan. (ABI 08-Nov-99) RECYCLING INDUSTRIES: Seeks To Extend Exclusivity ------------------------------------------------- The debtors, Recycling Industries, Inc. seek to extend the debtors' exclusive periods within which to file and solicit acceptances of a plan of reorganization to and through December 30, 1999 and February 28, 2000. The debtors state that cause exists to extend the Exclusive Periods on the ground that this extension will provide Peter J. Solomon Co., the debtor's investment banker with the opportunity to complete its marketing efforts, its evaluation of the various asset purchase offers and its assessment of potential restructuring alternatives. SANYO AUTOMOTIVE: Order Authorizes Interim Financing ---------------------------------------------------- The debtors, Sanyo Automotive Parts, Ltd. and ABS Brakes Inc. are authorized and empowered to borrow such amount or amounts as may be made available to the debtor by the lender in an amount not to exceed $12 million. The debtors will pay the pre-petition lenders $5.12 million as a partial permanent reduction of the pre-petition lender debt, and will execute and deliver Replacement Notes in the aggregate principal amount of $1.53 million. SILICON GAMING: Reports Change In Majority Of Directors ------------------------------------------------------- At the close of business on October 15, 1999, there were 14,588,571 shares of Silicon Gaming Inc.'s common stock issued and outstanding. The company anticipates that on or about November 12, 1999, the transactions contemplated by the Restructuring Agreement will be completed and the Board of Directors of the company will be reconstituted and fixed at three directors. Effective as of the closing of the transactions, it is anticipated that Mr. William Hart, Mr. Kevin R. Harvey and Mr. Thomas J. Volpe will resign as directors of the company and that Mr. Rob Reis and Mr. Stanford Springel will be appointed as new directors to fill the vacancies created by the resignations. Mr. Andrew Pascal, a current director of the company, will remain a director after the closing. The closing will not occur and the new directors will not begin their term until after the expiration of the ten-day period beginning on the later of the date of the filing of the Information Statement with the Securities and Exchange Commission or the date of mailing of the Information Statement to the company's stockholders. For full details in the Restructuring Agreement access, on the Internet, http://www.sec.gov/cgi-bin/srch-edgar?0001012870-99- 003962 free of charge. TELEGROUP, INC: Taps PricewaterhouseCoopers as Accountants ---------------------------------------------------------- The debtor, Telegroup, Inc. seeks to employ PricewaterhouseCoopers as its accountants in this case. The debtor seeks the advice of the firm as consultant to assist in the reconciliation of the purchase price of the debtor's assets to Primus Telecommunications. Specifically, issues have arisen concerning the allocation of the purchase price of the stock fo certain of the debtor's European subsidiaries. PricewaterhouseCoopers will assist the debtor in investigating and resolving these issues to maximize the value to be received by the debtor and its estate from the Primus transaction. TRISM: James F. Higgins Holding 10.2% Of Company Stock ----------------------------------------------------- James F. Higgins reports holding sole voting and dispositive power over 584,324 shares of common stock of Trism, Inc. This represents 10.2% of the outstanding shares of common stock of the company. On October 20, 1999, James F. Higgins purchased (i) 448,979 shares of the common stock of Trism, Inc. from Hillside Capital Incorporated in a private sale for a purchase price per share of $0.00091 and (ii) 100,665 shares of the common stock of Trism, Inc. from John N. Irwin III in a private sale for a purchase price per share of $0.00091. Each of the aforementioned transactions were effected in New York, New York TRISM, INC: Order Approves Second Amended Disclosure Statement ------------------------------------------------------------ The US Bankruptcy Court for the District of Delaware, entered an order approving the Second Amended Disclosure Statement of Trism, Inc. et al. A hearing to consider confirmation of the debtors' second amended joint plan of reorganization will be held on December 9, at 2:00 PM before the Honorable Sue L. Robinson. UNITED COMPANIES: Seek Extension To Assume or Reject Leases ----------------------------------------------------------- The debtors, United Companies Financial Corporation, et al. seek an extension of the period within which the debtors may assume or reject unexpired leases of nonresidential real property. The debtors seek an extension of the period up to and including the date of confirmation of the debtors' Chapter 11 plan. The debtors' primary operations consist of their loan servicing. The debtors' business strategy is to enter into a transaction with a third party that will result in the assumption by an experienced and qualified sub-servicer of all the servicing functions set forth in the debtors' pooling and servicing agreements. The eventual structure of the Servicing Transaction may have an impact on the debtors' determination as to whether to assume or reject the Remaining Leases. The debtors have retained Clayton Advisory, Inc. to provide advisor y services for the sale of the foreclosed properties and currently are seeking an advisor for the sale of the owned whole loans. TRANSTEXAS: Objections To Confirmation of Plan ---------------------------------------------- Chanoco Corp. and Edge Petroleum Exploration Co. each filed objections to confirmation of the second amended plan of reorganization proposed by the debtors, TransTexas Gas Corporation, and its affiliates. The Talon Group, working interest owners and overriding royalty owners of 57 leases and four producing wells also objected to confirmation of the plan. VENTAS INC: Reaches Agreement On Long-Term Debt Restructuring ------------------------------------------------------------- Ventas, Inc., the Louisville-based real estate company, has reached an agreement with over 95 percent of its lenders on terms to restructure all of Ventas' debt on a long-term basis, including the $275 million bridge loan which had been due on October 30, 1999. "This long-term debt restructuring plan, along with the planned reorganization of Vencor and our ongoing negotiations with the federal government, are critical elements in our plan to move Ventas forward," Ventas CEO Debra A. Cafaro said. "The consummation of the long-term debt restructuring will permit the company to pay dividends to our shareholders, and will give the company time and flexibility to further improve its capital structure. The plan is very attractive because of its long-term nature and also because it does not require us to sell assets, refinance or raise equity in the near term." The structure of the new Ventas credit facility, which will replace the approximately $974 million outstanding under the current credit facility, will include: A new $25 million revolving line of credit. $200 million of Tranche A indebtedness that will be priced at Libor plus 275 basis points with a maturity date of December 31, 2002. Tranche A will receive approximately $50 million of principal when the long-term debt restructuring closes, $50 million within thirty days after Vencor's plan of reorganization becomes effective and thereafter all excess cash flow from Ventas until $200 million in total has been paid down on the debt. Tranche B consists of $300 million of debt bearing interest at Libor plus 375 basis points, maturing on December 31, 2005. It will receive a one-time paydown of excess cash held by Ventas within 30 days after the Vencor bankruptcy plan becomes effective. Tranche B will also receive scheduled paydowns of $50 million in 2003 and $50 million in 2004 with the balance due in 2005. Tranche C consists of approximately $474 million of indebtedness priced at Libor plus 425 basis points, with a maturity of December 31, 2007. There are no scheduled paydowns. The entire credit facility is pre-payable without penalty or premium. This new facility will be secured with liens on Ventas' real property assets. Also, Ventas will pay a one percent restructuring fee of approximately $10 million, a portion of which (approximately $2.5 million) was paid on October 29 in connection with the extension of the bridge loan. The remainder of the fee is payable upon closing of the new credit facility. The deal is subject to customary terms and conditions, including completing documentation of the transaction by January 31, 2000. While there are no assurances the restructuring will be completed, management is committed to the successful implementation of this transaction. The agreement provides that Ventas can pay only minimum Real Estate Investment Trust ("REIT") dividends (equal to 95 percent of its taxable income) until $200 million of the outstanding debt is paid down. Following that date, Ventas will have the flexibility to pay dividends at a more normalized level. Ventas expects to make the required dividend payments for 1999 in 2000, some time after the long-term restructuring closes. The 1999 dividend may be satisfied by a combination of cash and a distribution of Vencor equity, which Ventas expects to receive as part of the Vencor reorganization. Under the terms of the waiver and extension agreement, Ventas has received a four-month extension of the $275 million bridge loan, during which period the replacement credit facility will be documented, and a waiver of certain covenants under its existing Credit Agreement. However, two holders of the bridge loan who have not consented to the waiver and extension (representing approximately $20 million or 7 percent of the bridge loan principal amount) may assert a right to seek repayment of their portion of the bridge loan currently. The waiver and extension will expire on February 28, 2000, and will terminate before such date if (i) an event of default under the credit facility occurs and is continuing, and is not waived, (ii) Vencor, Inc.'s case under Chapter 11 of the United States Bankruptcy Code becomes a liquidating Chapter 11 or is converted to a case under Chapter 7 of the Code, or (iii) Ventas fails to comply with any covenants in the agreement. Ventas' long-term debt restructuring plan follows the mid- September Chapter 11 bankruptcy filing by Vencor, Inc., Ventas' principal tenant. It is expected that Vencor will file its reorganization plan and disclosure statement later this year and Vencor has stated that it expects its reorganization plan to become effective in the first quarter of 2000. Ventas' debt restructuring agreement provides that Vencor must emerge from bankruptcy by December 31, 2000. "It is important for Vencor to return to financial well-being so that Ventas is assured of a dependable revenue stream from its principal tenant," Cafaro said. "We believe Vencor's problems have largely been caused by changes in the government's Medicare payments." Congress currently is considering possible improvements to the Medicare reimbursement system. Merrill Lynch continues to act as financial advisor to Ventas, Inc. in connection with the long-term debt restructuring. Ventas, Inc. is a real estate company whose properties include 45 hospitals, 219 nursing centers and eight personal care facilities operating in 36 states. Ventas intends to qualify as a REIT for the year ending December 31, 1999. World Vision: Court Ousts Principals ------------------------------------ The bankruptcy court overseeing the chapter 11 case of World Vision Entertainment Inc., a music distribution firm accused of swindling investors out of $50 million, has ousted World Vision principals A. Michael Jalliet and Steven Brewer and ordered them to turn over their office keys, mail service, computer systems and record-keeping equipment, according to The Orlando Business Journal. Roy Kobert, an attorney representing the creditors, asked the court to make this move saying, "This bankruptcy's ship must be commandeered and boarded by a chapter 11 trustee." At least 16 civil lawsuits have been filed against World Vision, accusing them of selling unregistered securities. World Vision listed assets of $102.5 million in its initial disclosures, but the bankruptcy judge threw out the financials and ordered the firm to refile-or face losing its protection against creditors. An attorney for Jaillet and Brewer acknowledges that some call their actions a "Ponzi scheme" but "that's not the real scenario at all," he said. He said that established banks have reserve systems they use in loan transactions and "nobody says the banks are employing a Ponzi scheme." (ABI 08-Nov-99) WSR CORP: Order Extends Exclusive Periods ----------------------------------------- The US Bankruptcy Court for the District of Delaware entered an order granting an extension of the exclusive period within which the debtors may file a plan or plans of reorganization through and including December 13, 1999, and the exclusive period within which the debtors may solicit acceptances of any such plan(s) through and including February 13, 2000. Meetings, Conferences and Seminars ---------------------------------- November 11-13, 1999 AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION COMMITTEE ON CONTINUING PROFESSIONAL EDUCATION 11th Annual Advanced ALI-ABA Course of Study: The Emerged and Emergine New Uniform Commercial Code New York Hilton Hotel, New York City Contact: 1-800-CLE-NEWS November 17-20, 1999 AMERICAN BAR ASSOCIATION'S LATIN AMERICAN LAW SUBCOMMITTEE & THE ASSOCIATION OF COMMERCIAL BANKS OF THE DOMINICAN REPUBLIC Educational Exchange Case De Campo Resort, LaRomana, Dominican Republic Contact: 1-703-739-0800 November 29-30, 1999 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Distressed Investing '99 The Plaza Hotel, New York, New York Contact: 1-903-592-5169 or ram@ballistic.com December 2-4, 1999 AMERICAN BANRKUTPCY INSTITUTE Winter Leadership Conference La Quinta Resort & Club, La Quinta, California Contact: 1-703-739-0800 December 9-11, 1999 STETSON COLLEGE OF LAW 24th Annual Seminal on Bankruptcy Law & Practice Sheraton Sand Key Resort Clearwater Beach, Florida Contact: 1-727-562-7830 or cle@law.stetson.edu January 10-15, 2000 LAW EDUCATION INSTITUTE, INC. Bankruptcy Law C.L.E. Program Marriott Vail Mountain Resort, Vail, Colorago Contact: 1-414-228-5810 February 27-March 1, 2000 NORTON INSTITUTES ON BANKRUPTCY LAW Norton Bankruptcy Litigation Institute I Olympic Park Hotel, Park City, Utah Contact: 1-770-535-7722 March 23-25, 2000 SOUTHEASTERN BANKRUPTCY LAW INSTITUTE, INC. 26th Annual Southeastern Bankruptcy Law Institute Marriott Marquis Hotel, Atlanta, Georgia Contact: 1-770-451-4448 March 30-April 2, 2000 NORTON INSTITUTES ON BANKRUPTCY LAW Norton Bankruptcy Litigation Institute II Flamingo Hilton Hotel, Las Vegas, Nevada Contact: 1-770-535-7722 May 4-5, 2000 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Bankruptcy Sales & Acquisitions The Renaissance Stanford Court Hotel San Francisco, California Contact: 1-903-592-5169 or ram@ballistic.com June 29-July 2, 2000 NORTON INSTITUTES ON BANKRUPTCY LAW Western Mountains Bankruptcy Law Institute Jackson Lake Lodge, Jackson Hole, Wyoming Contact: 1-770-535-7722 September 21-22, 2000 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. 3rd Annual Conference on Corporate Reorganizations The Regal Knickerbocker Hotel, Chicago, Illinois Contact: 1-903-592-5169 or ram@ballistic.com ********* 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 * * *