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/raid1/www/Hosts/bankrupt/TCR_Public/991118.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 18, 1999, Vol. 3, No. 224 Headlines AAMES FINANCIAL: Joins LendingTree With Online Loan Offers AMPACE CORP: Order Approves Fourth Amended Disclosure Statement BUILDERS TRANSPORT: T. Rowe Price No Longer Holding Shares CRAGAR INDUSTRIES: Michael R. Miller Named President CROWN PAPER: Year-To-Date Revenues Down, Losses Up FIELD'S AIRCRAFT: Files Voluntary Petition in Chapter 11 FILENE'S BASEMENT: Order Extends Time To Assume/Reject Leases FWT, INC: Noteholders Committee Objects To Disclosure Statement GENESIS DIRECT: Consent Order Sets Bar Date HARNISCHFEGER: Jeffrey T. Grade's Motion for $5.7 MillionHVIDE MARINE: John Blankley Sells At $ 0.25/Share MCGINNIS PARTNERS: Joint Plan of Reorganization PAGING NETWORK: Strong Capital Holds 3.7% Of Common Stock PARAGON TRADE BRANDS: Best Auction Bid Made By Wellspring PLUMA INC: Seeks Authorization of Sale of Real Property PURINA MILLS: Gets Final Approval of $50 Million DIP Credit Pact RAND ENERGY: Confirmation of Final Joint Plan of Reorganization RAYTECH CORP: Announces Third Quarter Results RUSSIA VALUE FUND, LP: Approval of Disclosure Statement SHOE CORP: Seeks Extension To Assume/Reject Leases SOURCEONE WIRELESS: Seeks Extension To Assume/Reject Leases STUART ENTERTAINMENT: Committee Taps Adelman Lavine SUN HEALTHCARE: Committee Taps Otterbourg, Steindler TALK AMERICA: Plan of Reorganization TERRA INDUSTRIES: Reports $67 Million Loss Year-To-Date TOKHEIM: Babson & Company No Longer Holding Shares VENCOR: Motion To Sell Kingfish Headquarters Development Site WESTSTAR CINEMAS: Final Order Authorizing Post-Petition Financing WILLCOX & GIBBS: Files Revised Plan of Reorganization ZENITH: Reports Improved Third Quarter Results ********* AAMES FINANCIAL: Joins LendingTree With Online Loan Offers ---------------------------------------------------------- Aames Financial Corporation will provide mortgages and home equity loan offers online via the LendingTree Network at WWW.LENDINGTREE.COM. LendingTree is the online loan marketplace that connects consumers seeking loans to a network of lenders who compete for their business for a variety of loan types including home mortgage, home equity, automobile financing, personal loans and credit cards "Lending Tree continues to experience incredible growth in the demand for mortgages and debt consolidation home equity loans,"said Doug Lebda, CEO and founder of LendingTree. "Aames' commitment to consumers with sub-prime credit affords all types of consumers shopping for loans on our site with the opportunity to receive and compare multiple loan offers, regardless of credit history." Aames CEO, Jay Meyerson said, "We are very pleased to begin our strategic relationship with LendingTree. Today, more and more of our target consumers are taking advantage of the shopping opportunities available on the internet and its important for Aames to be among the lenders who vie for that business. By partnering with LendingTree we are taking the first step in our commitment to building an on-line origination platform for Aames." "Joining the LendingTree network enables Aames Home Loan to offer loan products online to consumers throughout the country," said Celinda Moore, Senior Vice President and Director of the company's Retail Internet Lending Group. "Aames is unique among on-line lenders both in having operated a central customer service center for 14 years and in having access to more than 100 retail offices nationwide which creates multiple ways to interact with our customers." According to Aames, LendingTree's online loan marketplace provides consumers with an unprecedented level of control, convenience and choice via a simple online loan form that once submitted can result in multiple loan offers. Consumers receive offers from as many as four lenders who compete for their business. Aames Home Loan is a member of the Aames Financial Corporation group of companies, headquartered in Los Angeles. The company offers mortgages and debt consolidation equity loans to borrowers who don't meet conventional guidelines. Founded in 1954, the company currently has 102 retail branches and 44 broker offices serving consumers across the country. LendingTree, Inc. is the online loan marketplace that connects consumers with a network of lenders who compete for their business. Loan types include mortgage, home equity, personal, auto and credit cards. Founded by Doug Lebda in 1996 and based in Charlotte, N.C., LendingTree is led by veterans in the banking, financial services and information technology industries. LendingTree has strategic relationships with priceline.com, Bloomberg.com and AutobyTel and currently has more than 10,000 affiliate Web sites. LendingTree is an equal opportunity provider. AMPACE CORP: Order Approves Fourth Amended Disclosure Statement --------------------------------------------------------------- A Disclosure Statement filed by Ampace Corporation and Ampace Freightlines, Inc. and the Official Unsecured Creditors' Committee was approved by the US Bankruptcy Court for the District of Delaware. December 2, 1999 is fixed for the hearing on confirmation of the plan to be held at the US Bankruptcy Court for the District of Delaware, 824 Market Street, Wilmington, Delaware 19801 at 4:00 PM. The plan provides for the reorganization of the debtors, the continued operation of the debtors' Calhoun, Georgia business operations and the liquidation of all of the non-operating assets pursuant to an equity infusion through the issuance of new common stock, the sale of some or all of the assets, the pursuit of avoidance actions and the collection of outstanding accounts receivable. The debtors, creditors' committee and Blackwater have negotiated terms of a definitive stock purchase agreement. BUILDERS TRANSPORT: T. Rowe Price No Longer Holding Shares ---------------------------------------------------------- T. Rowe Price Associates, Inc., an investment adviser, and T. Rowe Price Small-Cap Value Fund, Inc., a Maryland corporation, have reported that they are no longer holding shares of stock in Builders Transport Inc. CRAGAR INDUSTRIES: Michael R. Miller Named President ---------------------------------------------------- CRAGAR Industries, Inc. (OTC Bulletin Board: CRGR) today reported that its Board of Directors has appointed Michael R. Miller as CRAGAR's President, effective immediately. Mr. Miller, who is also a Director, Chief Operating Officer and Secretary of the Company, replaces Michael L. Hartzmark, who will continue on as Chairman of the Board and Chief Executive Officer.1 The Board of Directors stated, "Mike Miller has done a wonderful job in turning around our company and helping us to achieve the improved operating results in 1999. He has also been a major force in helping to transform and reposition the Company with the previously announced transactions with WELD RACING, Inc. and Carlisle Tire & Wheel Co. We have great confidence that Mike will do a great job in implementing the next stage of CRAGAR's plan, which is to develop and implement a strategy to extend CRAGAR's brand into other automotive products." CRAGAR Industries, Inc. is an international designer, producer, and seller of custom wheels and wheel accessories for cars, trucks, vans, sport utility vehicles, racing vehicles, and motorcycles. CROWN PAPER: Year-To-Date Revenues Down, Losses Up -------------------------------------------------- Crown Paper Co. and subsidiaries is a major producer and marketer of value-added paper products for a diverse array of end-uses. The company is a wholly owned subsidiary of Crown Vantage Inc. The company operates in two segments: printing and publishing papers and specialty papers. Printing and publishing papers are primarily for applications such as special interest magazines, catalogs, books, custom business forms, corporate communications and promotions (e.g. annual reports and stationery) and other graphics applications. Specialty papers are principally for food and retail packaging applications and conversion into such items as coffee filters, labels, cups and plates. For the three months ended September 26, 1999, net revenue was $166,329 with net loss of $19,661. In the first nine months of 1999 the company reports net revenue of $572,376 with resulting net loss of $61,607. For comparison, the three-month period ended September 27, 1998 saw net revenue for the company of $211,768 and net loss of $4,297. The nine month 1998 period showed net revenue of $648,987 and net loss of $25,597. FIELD'S AIRCRAFT: Files Voluntary Petition in Chapter 11 -------------------------------------------------------- Fields Aircraft Spares, Inc. (Nasdaq: FASIQ, formerly Nasdaq: FASI) announced that the Company and its four subsidiaries have filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code (United States Bankruptcy Court for the Central District of California). 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. In announcing the Chapter 11 filings, the Company's management emphasized that such filings will have no significant impact on operations. According to Brian Aune, the Company's Chief Financial Officer, "The Chapter 11 filing will permit the Company to restructure its bank credit line, as well as provide relief regarding an unfavorable long-term lease on a facility not necessary for the Company's current operations, and thereby emerge from the reorganization as a properly-capitalized company." The reorganized company, according to Mr. Aune, will have a financial structure that will facilitate increased purchases and inventory stocking levels, thereby enabling customer orders to be filled on an even more timely basis. Nasdaq has notified the Company that trading will be halted pending the continued listing hearing scheduled for December 2, 1999. The Company's trading symbol has been changed to "FASIQ" effective November 12, 1999. FILENE'S BASEMENT: Order Extends Time To Assume/Reject Leases ------------------------------------------------------------ The debtors, Filene's Basement, Inc. and Filene's Basement Corp. were granted an extension of time in which the debtors may assume or reject the GOB leases and the operating store leases. The debtors are presently conducting going-out-of-business sales at 18 store locations. The debtors continue to operate approximately 51 stores. The time during which the debtors may assume or reject GOB leases shall be extended to January 20, 2000 or as the sale concludes, if earlier. The time during which the debtors may assume or reject operating store leases is extended to January 20, 2000. However, no rejections shall be effective prior to December 31, 1999. FWT, INC: Noteholders Committee Objects To Disclosure Statement --------------------------------------------------------------- The Official Committee of Noteholders of FWT, Inc. objects to the Disclosure Statement of the debtor because the debtor fails to provide sufficient disclosure about its history, financial condition, assets and business operations. According to the Committee, the plan violates claim classification requirements and treats holders of 9-7/8 Senior subordinated notes in Class 3B differently from the Class 3A unsecured general claims. The plan improperly classifies the unsecured claims in a separate class and treats the Noteholder claims in a discriminatory manner. The plan improperly classifies Brocko, Inc's loan as a secured claim. The committee also points out discrepancies between the plan and the Disclosure Statement. GENESIS DIRECT: Consent Order Sets Bar Date ------------------------------------------- By Consent Order entered November 4, 1999, the US Bankruptcy Court for the District of New Jersey established November 30, 1999 as the bar date and final date on which proofs of claim or interests are to be filed in the case of The Edge Company Catalog, LLC. HARNISCHFEGER: Jeffrey T. Grade's Motion for $5.7 Million --------------------------------------------------------- Jeffrey T. Grade, the Debtors' former Chief Executive Officer, asserts his entitlement to cash compensation pursuant to (i) a Termination and Release Agreement dated May 24, 1999; (ii) a Long-Term Compensation Plan for Key Executives dated December 17, 1998 and (iii) a Supplemental Retirement and Stock Funding Plan dated December 6, 1998. Accordingly, Mr. Grade filed a proof of claim in the Debtors' cases for $5,746,267. Mr. Grade desires to assign his Claim to a third party, and, in connection with that assignment, is required to obtain an order from the Bankruptcy Court allowing his Claim. By this Motion, Mr. Grade requests entry of such an order pursuant to 11 U.S.C. Secs. 105(a) and 502(a). This Motion, Mr. Grade argues, provides any creditor or party in interest with the opportunity to object to his Claim and satisfies the requirement for a hearing on any such objection as required by Rule 3007 of the Federal Rules of Bankruptcy Procedure. Mr. Grade indicates that he consents to a reduction of the 30-day requirement for notice of any objection to this Claim. Leonard P. Goldberger, Esq., of White & Williams LLP in Philadelphia represents Mr. Grade in the Debtors' chapter 11 cases. (Harnischfeger Bankruptcy News Issue 15; Bankruptcy Creditor's Service Inc.) HVIDE MARINE: John Blankley Sells At $ 0.25/Share ------------------------------------------------- John H. Blankley of Ft. Lauderdale, Florida has disposed of the following shares of the common stock of Hvide Marine Inc.: 894 shares sold on April 1, 1999 and 1,000 shares sold on October 8, 1999. In each instance the shares were sold at $ 0.25 per share. LEVITZ: Tenth Motion To Extend Exclusivity ------------------------------------------ Without objection, Judge Walrath granted the Debtors' a tenth extension of their exclusive periods within which to file a plan of reorganization and solicit acceptances of that plan. Specifically, through and including January 31, 2000, the Debtors have the exclusive right to file a plan of reorganization; through March 31, 2000, the Debtors have the exclusive right to solicit acceptances of that plan. These extensions are without prejudice to the Debtors' right to seek further extensions. Even though the Debtors filed their proposed plan on July 7, 1999, Sally Henry, Esq., representing the Debtors reminded Judge Walrath, the Company continues to investigate and consider various alternatives for an ultimate exit from Chapter 11. Many of these alternatives -- without further detail -- may dictate substantial amendments to the currently-filed plan, Ms. Henry indicated. Ms. Henry stressed that the Debtors are spending time considering alternative restructuring proposals with one goal in mind: maximizing the ultimate return to their creditor constituencies. At the request of the core parties-in-interest, Judge Walrath agreed to convene a status conference in December, 1999, to review the Debtors' reorganization efforts. There is no indication whether that status conference will be held in open court or behind closed doors. It is clear that Resurgence and Apollo are still at the negotiating table. MCGINNIS PARTNERS: Joint Plan of Reorganization ----------------------------------------------- On October 27, 1999, the US Bankruptcy Court for the Western District of Texas, San Antonio Division entered an order approving the Disclosure Statement filed by McGinnis Partners Focus Fund, LP. December 1, 1999 is fixed for the hearing date on the confirmation of the plan. Classes of Claims and Interests Class 1 - Secured Claims - Impaired - No claimants Class 2 - Priority Non Tax Claims - Unimpaired - No claimants Class 3 - Unsecured Claims - Impaired - Total Claims - $117,028,601. Estimated Recovery Percentage: Undetermined Class 4 - Rescission Claims - Impaired - Total Claims $1,358,409 - Estimated Recovery Percentage: Undetermined Class 5 - Investor Interests - Impaired - Total interests value $186,699,460 Estimated Recovery Percentage: Undetermined The debtors were performance-oriented investment funds formed for the purpose of achieving long-term capital appreciation through investing in global markets. PAGING NETWORK: Strong Capital Holds 3.7% Of Common Stock --------------------------------------------------------- Strong Capital Management, Inc. and Richard S. Strong, Chairman of the Board of Strong Capital Management, Inc., beneficially own an aggregate 3,829,660 shares of the common stock of Paging Network Inc. The aggregate amount held represents 3.7% of the outstanding shares of common stock of the company. Each of Strong Capital Management, Inc. and Richard S. Strong have sole voting power over 3,668,700 shares, and sole dispositive power over the aggregate 3,829,660 shares. Strong Capital Management, Inc. is an investment advisor firm, having been granted discretionary dispositive power over its clients' securities and in some instances has voting power over such securities. Any and all discretionary authority which has been delegated to Strong Capital may be revoked in whole or in part at any time. Richard S. Strong, in addition to being Chairman of the Board of Strong Capital Management, Inc. is its principal shareholder. PARAGON TRADE BRANDS: Best Auction Bid Made By Wellspring --------------------------------------------------------- On July 12, 1999, the Bankruptcy Court approved certain bidding procedures, an expense reimbursement and a termination fee relating to a proposed investment by Wellspring to acquire Paragon Trade Brands Inc. as part of a plan of reorganization. The bidding procedures provided for the consideration of competing investment proposals from other qualified bidders and for the filing by the company of a stand-alone plan of reorganization. The Equity Committee filed a motion for amended findings with respect to the Bankruptcy Court's July 12, 1999 order. The Bankruptcy Court then denied the Equity Committee's motion. The Equity Committee has appealed the Bankruptcy Court's order and the denial of its motion to the Georgia District Court. On November 5, 1999, the company and the Equity Committee filed a joint motion seeking to extend the briefing schedule in the matter pending the completion of ongoing global settlement discussions between the parties. On August 25, 1999, with the support of the Creditors' Committee, the company had filed its Plan with the Bankruptcy Court. The Plan provides an alternative to the Wellspring Proposal. In accordance with Bankruptcy Court-approved auction procedures, an alternative transaction competing with the Wellspring Proposal was proposed to the company on September 15, 1999. An auction was commenced on September 21, 1999. The auction continued until the company, after consultation with the Committees, P&G and K-C, determined to conclude the auction on October 4, 1999. At the conclusion of the auction, the company, after consultation with the Committees, P&G and K-C, determined that Wellspring had submitted the best bid. On October 15, 1999, the company and the Creditors' Committee, as co-proponents, jointly filed the Amended Plan which incorporates the Wellspring Proposal, as modified by the company after consultation with its various creditor constituencies. The Amended Plan also provides that, in the event the proposed Wellspring transaction is not consummated, the proponents may pursue confirmation of a stand- alone plan of reorganization. The Amended Plan specifies, among other things, the type and amount of value to be distributed under either the Wellspring or the stand-alone alternative, as the case may be. The Bankruptcy Court has set a hearing date of November 17, 1999 to consider approval of the Disclosure Statement. By Order of the Bankruptcy Court on July 20, 1999, the company's exclusivity period, during which time only the company could propose a plan of reorganization, was extended through and including August 31, 1999. By order of the Bankruptcy Court on October 26, 1999, the company's exclusive right to solicit acceptances to the Amended Plan has been extended through and including January 31, 2000. During the above the company has operated as a debtor-in- possession and reports three and nine months 1999 financial statistics which indicate net losses in both periods. Net loss for the three months ended September 26, 1999 was $5,235 on net revenues of $128,507, and in the nine month period ended on that same date net losses were $20,839 on net revenues of $372,599. In the same periods of 1998 the three month report saw net income of $4,024 on net revenues of $136,993, and the nine month 1998 period showed net income of $13,399 on net revenues of $402,281. PLUMA INC: Seeks Authorization of Sale of Real Property ------------------------------------------------------- Pluma, Inc. seeks entry of an order authorizing the sale to Louis Kennedy, buyer, of real property known as the Vesta, Virginia and Martinsville, Virginia sewing facilities. The total cash purchase price is $1,865,000. The contract calls for a closing date on November 30, 1999. PURINA MILLS: Gets Final Approval of $50 Million DIP Credit Pact ---------------------------------------------------------------- Purina Mills Inc. received on Nov. 15 final bankruptcy court approval of a $50 million debtor-in-possession (DIP) financing pact led by Chase Bank of Texas N.A. Counsel to Purina Mills said several objections to the DIP loan were resolved consensually at Monday's hearing. Late last week, Bank One Trust Co., indenture trustee for Purina Mills' nine percent senior subordinated notes due 2010, filed a conditional objection concerning the extent of the security interests given to the lenders. (The Daily Bankruptcy Review and ABI November 17, 1999) RAND ENERGY: Confirmation of Final Joint Plan of Reorganization --------------------------------------------------------------- By order entered November 3, 1999, the US Bankruptcy Court for the Northern District of Texas, Dallas Division entered an order finding and approving the joint plan of reorganization for Rand Energy Company. The plan is a liquidating plan that the court finds is feasible. Substantially all of the debtor's assets other than causes of action and receivables have been liquidated during the case. The structure of the plan and mechanisms for implementation of the plan are reasonable and appropriate. RAYTECH CORP: Announces Third Quarter Results --------------------------------------------- Raytech Corporation (NYSE:RAY) announced net income for the thirteen-week period ended October 3, 1999 amounting to $3.4 million, or $.98 per basic share as compared with $3.1 million or $.90 per basic share for the corresponding period in 1998. Albert A. Canosa, President and Chief Executive Officer of Raytech Corporation, stated, "We continue to expand our sales growth as evidenced in the 4 percent increase over the prior year. Our depth of knowledge in the friction industry is recognized by our customer base as we work together in developing new materials and techniques to improve efficiency and durability." Net Sales Up 1.6% for Quarter, Up 4.0% Year-to-Date Raytech Corporation showed strong performance in the third quarter posting sales of $ 62.5 million for the thirteen-week period ended October 3, 1999 as compared to $ 61.5 million for the same period in the prior year. Net sales for the thirty-nine week period of $195.6 million showed an increase of $7.6 million, 4.0 percent, over the prior year amount of $188.0 million. The wet friction segment reported increased sales of $3.4 million or 2.9 percent as compared to the same period in the prior year. The rise in sales is primarily the result of increased unit production among the automotive original equipment manufacturers and the sales of new products to this customer base, which is reflected in the reported sales increase of $9.6 million in the automotive original equipment market sector over the prior year. Domestic car and light truck sales are expected to reach 17 million units in 1999 according to industry analysts, which would be the record year for sales in this industry. The heavy duty markets continue their decline as a result of the economic downturn in Asia and Latin America. In addition, the demand for heavy duty equipment was affected by a decline in orders from the oil and mining industries. Sales in this market decreased $1.0 million as compared to last year. However domestic sales of heavy duty equipment is expected to remain stable. Demand for agricultural equipment remains weak as the farm sector continues to feel the effects of depressed agricultural commodity prices and reduced domestic farm income. Sales in this market decreased $5.2 million or 45 percent over last year. Sales in the Aftermarket segment increased by $5.8 million over the same period in the prior year, equating to a 13 percent growth rate. Improved sales reflected deeper penetration into the current customer base and sales of new products and the penetration of new markets. The sales of dry friction products in the North American aftermarket, a new market for 1999, continued during this quarter. Operating Profit Up 1.8% for Quarter, 2.9 Percent Year-to-Date Worldwide operating profits in the third quarter of $5.6 million reflected an increase of 1.8 percent over the same period in the prior year. Earnings in the third quarter of 1998 were $5.5 million. Operating profits for the nine months ended October 3, 1999 of $21.6 reflected an increase of $.6 million or 2.9 percent over the prior year's amount of $21 million for the same nine- month period. The wet friction segment reported operating profits of $4.0 million for the quarter ended October 3, 1999 as compared to $3.4 million for the same period in 1998, an increase of 17.6 percent. The recorded operating profit for the 39-week period ended October 3, 1999 of $13.9 million reflects an increase of $.4 million over the same period in the prior year, an increase of 3.0 percent. This increase was driven by increased sales of $3.4 million during this period and the improved gross profit in the third quarter. The aftermarket segment reported operating profits of $2.8 million for the quarter ended October 3, 1999, an increase of $.3 million over the same period in the prior year. The 12.5 percent increase in operating profits reflects improved sales of $1.2 million. The recorded operating profit for the 39-week period ended October 3, 1999 of $8.6 million reflects an increase of $1 million over the same period in the prior year. The increased operating profit of 13.2 percent over the prior year was due to the increased sales of $5.8 million during this 39- week period as compared to the same period in the prior year. The Company has been under the protection of the U.S. Bankruptcy Court relating to asbestos personal injury and environmental liabilities since March 1989. The ultimate liability of the Company with respect to asbestos-related, environmental or other claims cannot presently be determined. Raytech Corporation is headquartered in Shelton, Connecticut, with operations serving world markets for energy absorption and power transmission products, as well as custom-engineered components. RUSSIA VALUE FUND, LP: Approval of Disclosure Statement ------------------------------------------------------- On October 27, 1999, the US Bankruptcy Court for the Western District of Texas, San Antonio Division entered an order approving the Disclosure Statement filed by Russia Value Fund, LP. December 1, 1999 is fixed for the hearing date on the confirmation of the plan. SHOE CORP: Seeks Extension To Assume/Reject Leases -------------------------------------------------- Shoe Corporation of America, Inc. and its affiliate SCOA License, Inc. seek an order further extending the time within which the debtors must move to assume or reject their unexpired leases of nonresidential real property. The debtors seek an order extending for an additional 120 days, up to and including April 9, 2000, the time in which they must move to assume or reject certain unexpired leases of nonresidential real property. The debtors are lessees, sublessees or assignees with respect to approximately 125 unexpired leases of nonresidential real property. The unexpired leases are an integral part of the debtors' business as the premises subject to such leases include store space used by SCOA to operate its retail footwear operations. The debtors' immediate focus in on the critical holiday retain season, and it will be impossible for the debtors to adequately assess the leases and license agreements without an extension. Because of the complexity of the ongoing reorganization process, the debtors have not had a sufficient opportunity to determine the value of each lease in light of future business plans. SOURCEONE WIRELESS: Seeks Extension To Assume/Reject Leases ----------------------------------------------------------- The debtor, Sourceone Wireless, Inc. and Aquis Communications Inc., purchaser of substantially all of the debtor's assets have been working to identify which leases will be assume. However the parties have not yet been able to complete the identification process, and request entry of an order extending the deadline to and including November 30, 1999. STUART ENTERTAINMENT: Committee Taps Adelman Lavine --------------------------------------------------- The Official Unsecured Creditors' Committee seeks to employ Adelman Lavine Gold and Levin as co-counsel to the Committee. The firm will provide the following services: Give the Committee legal advice with respect to its duties and powers in the case; To assist the Committee in its investigation of the acts, conduct , assets, liabilities, and financial condition of the debtor, the operation of the debtor's business and the desirability of the continuance of such business; To participate with the Committee in the formulation of a plan; To assist the Committee in requesting the appointment of a Trustee or examiner, should such action become necessary; SUN HEALTHCARE: Committee Taps Otterbourg, Steindler ----------------------------------------------------- The Official Committee of Unsecured Creditors of Sun Healthcare Group, Inc., et al., has disclosed that it selected the New York- based law firm of Otterbourg, Steindler, Houston & Rosen, P.C., as its lead counsel in these chapter 11 cases. William M. Silverman, Esq., leads the engagement, assisted by Rosanne A. Finkel, Esq. TALK AMERICA: Plan of Reorganization ------------------------------------ The debtor, Talk America, Inc. seeks an order confirming its plan of reorganization. Classification of Claims and Interests: Unclassified claims are not impaired. Class 1 - Impaired - Allowed secured claims held by Keycorp Class 2 - Unimpaired - Allowed secured claims held by NTFC Capital Corp Class 3 - Unimpaired - Allowed secured claims held by Greenpages Class 4 - Impaired - Allowed Secured claims held by Paymentech Class 5 - Unimpaired - Allowed secured claims and priority claims held by the City of Portland for personal property taxes Class 6 - Impaired - Allowed Priority claims Class 7 - Unimpaired Allowed Unsecured claims of the holders of refund claims Class 8 - Impaired - Allowed unsecured claims other than class seven claims, including without limitation the class claim if any and any claims held by the MacRoberts plaintiffs. Class 9 - Impaired Holders of equity interests in the debtor Paymentech shall have an allowed secured claim of $1,413,780. The reorganized debtor shall continue to perform under the terms of the Merchant Agreement assumed by the debtor in the underlying bankruptcy proceeding. TERRA INDUSTRIES: Reports $67 Million Loss Year-To-Date ------------------------------------------------------- Terra Industries Inc. reported a net loss of $16.9 million for the 1999 third quarter compared with a $21.8 million net loss in 1998. These losses were sustained where net revenue was reported at $173,478 for the 1999 quarter, and $171,544 for the 1998 quarter. The corporation reported a net loss of $67.3 million for the nine months ended September 30, 1999 compared with net income of $10.5 million in 1998. Reported net revenue was $585,402 and $647,671 respectively. On June 30, 1999, Terra Industries sold its Distribution business segment to Cenex/ Land O' Lakes Agronomy Company for a preliminary purchase price of $485 million. The preliminary purchase price is subject to post closing adjustments and final audit. The corporation expects to finalize post-closing adjustments, complete the final audit and collect remaining balances due from the sale prior to December 31, 1999. In the sales transaction, Cenex/ Land O' Lakes Agronomy acquired all rights to the Distribution business' earnings from April 1, 1999 forward. Included in the sale were the corporation's approximately 400 retail farm service centers in the U.S. and Canada, and its 50% ownership position in the Omnium chemical formulation plants. The corporation retained ownership of approximately $25 million in accounts receivable and approximately 40 storage or retail sites associated with Distribution operations. Reserves for doubtful accounts of approximately $15 million have been recorded by the corporation in order to value the retained accounts receivable at estimated net realizable value. The retained sites had a zero net book value at September 30, 1999 as costs of disposal are estimated by Terra Industries to approximate sales proceeds. TOKHEIM: Babson & Company No Longer Holding Shares -------------------------------------------------- David L. Babson and Company Incorporated, investment adviser, with principal business location at Cambridge, Massachusetts, advises that the firm no longer is deemed the beneficial owner of shares of common stock of Tokheim Corporation since Babson and Company no longer holds shares in Tokheim. VENCOR: Motion To Sell Kingfish Headquarters Development Site -------------------------------------------------------------- In 1997, Vencor acquired what is called the Kingfish Property, consisting of: (A) a lease with an option, expiring on September 1, 2003, to purchase a two-acre development site located at 144 N. Sixth Street in Louisville, Kentucky, and (B) ownership of four adjacent buildings located at 615, 617, 619 and 621 West Main Street in Louisville, Kentucky. The Debtors intended to develop the property to house a new 27- story, 540,000 square foot headquarters complex. The Kingfish Property is currently vacant and the Debtors have abandoned their plans to develop the site. The Kingfish Property costs the Debtors $51,000 per month in rent under the purchase Option Agreement. Chicago-based Sheldon Good & Company Auctions solicited sealed bids for the Kingfish Property in April 1999. The bids were supposed to be opened on September 28, 1999. Because of the Debtors' chapter 11 filings, the auction was postponed. By this Motion, the Debtors ask the Court for permission to restart the auction process and solicit sealed bids to be opened on November 22, 1999. Sheldon Good and the Debtors will then negotiate for further increases in the bids until November 30, 1999. Pursuant to 11 U.S.C. Sec. 363, free and clear of all liens, the Debtors will thereafter sell the property to the entity submitting the highest and best offer. Sheldon will be paid a $25,000 commission, plus a 4% incentive for each property selling for more than $1,500,000, plus a 6% incentive for each property selling for less than $1,500,000. (Vencor Bankruptcy News; Issue 7 - Bankruptcy Creditor's Service Inc.) WESTSTAR CINEMAS: Final Order Authorizing Post-Petition Financing ---------------------------------------------------------------- The US Bankruptcy Court for the District of Delaware entered an order on November 5, 1999 authorizing the debtors to enter into the terms of their post-petition financing agreements and Credit Agreement with a syndicate of financial institutions consisting of lenders arranged by Canadian Imperial Bank of Commerce. The debtors may borrow up to an aggregate of $10 million subject to the terms of the agreements. WILLCOX & GIBBS: Files Revised Plan of Reorganization ----------------------------------------------------- Willcox & Gibbs, Inc. said that it had filed with the Bankruptcy Court a revised Plan of Reorganization and Disclosure Statement in its Chapter 11 bankruptcy case. The revised plan provides for the following treatment of creditors and interest holders: -- Secured creditors are unimpaired. -- Holders of Series B Notes (and certain general unsecured creditors as described below) will receive a pro rata share of 95% of the common equity of the reorganized Willcox & Gibbs. -- General unsecured creditors, including trade creditors, may elect to receive one of the following: -- For claims of less than $1,000 (and claims voluntarily reduced by the holder to $1,000), forty cents for each dollar of allowed claim, payable in cash on the effective date of the plan. -- For larger claims, the holder may elect the following: -- Cash equal to 30% of the allowed claim, but not more than a payment of $3,000. -- A Note in an amount equal to 75% of the allowed claim, payable on the seventh anniversary of the effective date of the plan, without interest. In the case of a trade creditor electing this option, who agrees to extend credit on certain terms to the reorganized companies after the effective date of the plan, such creditor's Notes will be paid in seven equal annual installments. -- A pro rata share, together with holders of Series B Notes as described above, of 95% of the common equity of the reorganized Willcox & Gibbs. -- Holders of existing Common Stock of Willcox & Gibbs will receive a pro rata share of 5% of the common equity of Willcox & Gibbs and warrants to purchase additional shares. A hearing in the Bankruptcy Court on the adequacy of the Disclosure Statement has been scheduled for December 22, 1999. If the Disclosure Statement is approved at that time, a hearing on confirmation of the Plan of Reorganization could be scheduled for January or February 2000. Willcox & Gibbs is the largest distributor in North America of replacement parts, supplies and ancillary equipment to manufacturers of apparel and other sewn products. Willcox & Gibbs is currently operating as a debtor and debtor in possession under Chapter 11 of the Bankruptcy Code. ZENITH: Reports Improved Third Quarter Results ---------------------------------------------- Zenith Electronics Corporation reported improved financial results for the third quarter of 1999. The company's third-quarter net loss, excluding restructuring charges and reorganization items, was $5.8 million in 1999, compared with $18.6 million in 1998. Including $7.2 million of restructuring charges and reorganization items, Zenith reported a 1999 third-quarter net loss of $13.0 million. In the 1998 third quarter, including $100.4 million of restructuring charges, the company reported a net loss of $119.0 million. Third-quarter 1999 results benefited from significantly lower operating expenses, resulting primarily from Zenith's operational restructuring, and reduced interest expense due to better inventory and cash management. Total third-quarter sales were $228 million in 1999, compared with $230 million in 1998. Despite the fact that Zenith was operating under Chapter 11 during most of the third quarter, Consumer Electronics sales increased slightly compared with the 1998 quarter, reflecting the strong support from Zenith customers and dealers during the company's restructuring. Sales of Network Systems products declined somewhat due to the phase-out of analog set-top boxes since the third quarter of 1998. Zenith's prepackaged plan of reorganization was confirmed by the U.S. Bankruptcy Court on Nov. 5 and Zenith emerged from Chapter 11 on Nov. 9 as a wholly-owned subsidiary of LG Electronics Inc. (LGE). For the first nine months of 1999, Zenith reported a net loss, excluding restructuring charges and reorganization items, of $44.4 million compared with a net loss of $80.0 million in the sale period in 1998. The company reported a 1999 nine-month net loss of $59.0 million, including $14.6 million of restructuring charges and reorganization items. In the first three quarters of 1998, the company reported a net loss of $187.8, including $ 107.8 million of restructuring charges. Nine-month sales were $596 million in 1999 and $675 million in 1998. Founded in 1918, Zenith Electronics Corporation, based in Glenview, Ill., is a long-time U.S. leader in electronic entertainment products and leading developer of digital high- definition television (HDTV) technologies. LGE, based in Seoul, Korea, is a global leader in consumer electronics with operations in 180 countries and annual sales of more than $9 billion. ********* 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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