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/raid1/www/Hosts/bankrupt/TCR_Public/991203.MBX T R O U B L E D C O M P A N Y R E P O R T E R Friday, December 3, 1999, Vol. 3, No. 234 Headlines ABLE TELECOM: SEC Voices Concerns Regarding Acquisition ACCESS AIR: Attempts to Reassure Creditors BAPTIST FOUNDATION: To Institute Employee Retention Program BOSTON CHICKEN: McDonald's Signs Purchase Agreement CHS ELECTRONICS: Acquisitions Boost Nine Month Sales Figures DOW CORNING: Counsel of Physician Creditors Responds to Plan EQUALNET COMMUNICATIONS: Substantial Doubts About Future FACTORY CARD OUTLET: Seeks Authority to Incur Secured Debt FAMILY GOLF CENTERS: Revenues Increase As Do Net Losses FILENE'S BASEMENT; Seeks To Assume Employment Agreements FILENE'S BASEMENT: To Close Two Connecticut Stores on Saturday FORCENERGY: Objects To Adequate Assurance For Texaco FOSTER WHEELER: Three Subsidiaries File Chapter 11 GUY F. ATKINSON: Order Approves Disclosure Statement HVIDE MARINE: Reorganization Plan Expected to Be Confirmed JUMBOSPORTS: Joint Venture to Manage Global Asset Disposition LACLEDE STEEL: Exclusivity Extended as Plan Talks Proceed MCA FINANCIAL: Seeks Sixth Amendment to Financing Order MCCULLOCH: Will Enter Into a Purchase Agreement With Jenn Feng MERRY-GO-ROUND: Fidelity Says Snyder Weiner Just Doesn't Get It PAXSON COMMUNICATIONS: Increase In Revenues, Losses Persist PLANET HOLLYWOOD: Does Not Anticipate Profitability Until 2004 PLANET HOLLYWOOD: Seeks Extension To Assume/Reject Leases PREMIER SALONS: Seeks To Establish Bar Dates SANTA FE GAMING: Announces Sale Of Henderson Property SIRENA APPAREL: Seeks To Reject Factoring Agreement TELEGROUP INC: Disclosure Statement UNITED STATES EXPLORATION: Financial Reports Indicate Losses WSR CORP: Seeks Order Approving Collective Bargaining Agreement XCL LTD: Court Denies Motion To Dismiss Involuntary Petition BOND PRICING FOR WEEK OF November 29 ********* ABLE TELECOM: SEC Voices Concerns Regarding Acquisition ------------------------------------------------------- Able Telcom Holding Corp. (Nasdaq: ABTE) yesterday announced that the U.S. Securities & Exchange Commission ("SEC") has "concerns" regarding the accounting and disclosures of its acquisition of MFS Network Technologies, Inc. ("NT") from MCI/WorldCom, Inc. The Company claims that it is working to resolve the SEC's concerns. The press release announcing this serious and negative development has the headline "Able Telcom Holding Corp. Announces Continued Discussions with the SEC." Asensio & Company, Inc., a New York-based institutional investment bank specializing in corporate valuations and equity research, stated, "We believe this is intentionally misleading. Able had never disclosed that the SEC is investigating or has questioned their accounting and disclosures." The press release acknowledges that the controversy concerns at least $38.8 million. Able's current auditor, Arthur Andersen LLP, was hired on October 9, 1998 -- Able's seventh auditor in ten years. Able delayed the release of its audited financial statement for its fiscal year ending October 31, 1998 until February 24, 1999. In those statements, Arthur Andersen allowed the creation of a false reserve for losses on uncompleted contracts of $40.5 million. This so-called reserve was created by simply inflating the value of acquired assets, not by charging earnings. Able then used $15.3 million of this artificially created reserve to increase its reported earnings, converting a loss of $12.8 million to a net income of $2.5 million. Arthur Andersen is also the auditor for MCI/WorldCom. An Able bankruptcy may require MCI to make good on up to $495.5 million in outstanding NT performance bonds. However, merely technically avoiding declaring bankruptcy will not preserve any value for Able's shareholders. This was not the first time that Able's audited statements reflected false earnings according to Asensio. The Company's statements for 1993 and 1994 reported profits. These reported profits inflated Able's stock price and permitted insiders to cash out on options and conversion rights. In 1995 and 1996 Able wrote down all of these results, eliminating all previously reported earnings. ACCESS AIR: Attempts to Reassure Creditors ------------------------------------------ One day after filing chapter 11, Des Moines, Iowa-based Access Air is attempting to reassure its creditors, according to ABC News. Company President Rich Musal said that the company is determined to fly again, and that the first flight could take off within 30 days. The airline is $10 million in debt. (ABI 02-Dec- 99) BAPTIST FOUNDATION: To Institute Employee Retention Program ----------------------------------------------------------- The debtors, Baptist Foundation of Arizona, Inc. seeks court authority to implement an employee retention program with the companies' mid-level employees and seeks to assume certain severance agreements with employees. The companies estimate that the total cost of providing Retention Bonuses will be approximately $300,000. This estimate assumes that all current employees remain with the companies through the December 31, 2000 target date. The total post-petition severance payments total approximately $90,000. Given the importance of the employees to the companies' ongoing operations, the debtor seeks approval of the relief requested. BOSTON CHICKEN: McDonald's Signs Purchase Agreement --------------------------------------------------- McDonald's Corporation (NYSE: MCD) and Boston Chicken, Inc. today jointly announced that a Definitive Purchase Agreement has been signed by McDonald's subsidiary, Golden Restaurant Operations, Inc., (GRO) and Boston Chicken and its Boston Market related subsidiaries for the sale to GRO of the majority of the assets of Boston Market, including 751 restaurants, franchise rights for an additional 108 restaurants and certain related liabilities. The senior secured creditors of Boston Chicken, subject to government and bankruptcy court approvals, have accepted GRO's bid of $173.5 million, which will be comprised of cash and the assumption of certain liabilities. The sale would be completed as part of the Plan of Reorganization of Boston Chicken, Inc. and its Boston Market related subsidiaries in its Chapter 11 reorganization process. Boston Chicken's ownership interest in Einstein/Noah Bagel Corp. is not subject to the purchase agreement. Boston Chicken, which owns, operates and franchises Boston Market restaurants, filed a voluntary petition for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Arizona last year. "Through this transaction, McDonald's will acquire both Boston Market sites and the rights to the brand," said Jack M. Greenberg, Chairman and Chief Executive Officer of McDonald's Corporation. "The brand is well-established, with excellent employees, quality products, loyal customers, and future growth potential. Selected sites, where appropriate, will help support domestic restaurant growth for McDonald's, and accelerate opportunities for Chipotle Mexican Grill and Donatos Pizza over the next few years." "Because of the accomplishments of the employees of the Boston Market system in putting the business back onto a positive footing, we are committed to offering employment and career growth opportunities to all Boston Market restaurant and Support Center employees," said Jeffrey B. Kindler, Executive Vice President of McDonald's, who leads the McDonald's team which is managing this acquisition. "We are very encouraged to have such a strong buyer," said J. Michael Jenkins, Chief Executive Officer of Boston Chicken. "This commitment by McDonald's Corporation is a direct result of the tremendous job our employees have done over the past year in returning the business to positive comparable store sales and positive operating cash flow. Boston Market employees will have the opportunity for continued career development within the largest and most successful restaurant company in the world." Boston Chicken expects to file its Plan of Reorganization in December, 1999, and the Purchase Agreement with GRO is expected to close in mid-year 2000, although no dates have been established by the Bankruptcy Court. With current debt obligations totaling more than $900 million in bankruptcy, Boston Chicken has publicly disclosed for the past year that holders of Boston Chicken's equity securities will retain no value under a reorganization plan and Boston Chicken anticipates that its bond holders will not retain any value under the plan. Boston Chicken's equity and debt securities will be cancelled upon plan confirmation. Boston Chicken owns and operates restaurants under the Boston Market brand name. Boston Market specializes in fresh, convenient meals, featuring homestyle entrees, fresh vegetables, sandwiches, salads, and side dishes. Boston Market restaurants are located in 33 states and the District of Columbia, with the majority of sites in the Eastern and Midwestern United States. McDonald's is the world's leading food service organization, with more than 25,000 McDonald's restaurants serving more than 40 million customers a day in 118 countries. CHS ELECTRONICS: Acquisitions Boost Nine Month Sales Figures ------------------------------------------------------------ CHS Electronics Inc. announced in the second quarter of 1999, in response to lower, restated earnings in 1998 and disappointing results in the first quarter of 1999, it would begin a restructuring program to reduce operating cost by $30 million in 1998 and $40 million on an annual basis. Through September 30, 1999, 74% of the planned headcount reduction and 56% of the planned warehouse reduction were completed. In October 1999, due to defaults on certain bank loans, certain subsidiaries of the company in the United Kingdom, Germany and Austria have been placed in receivership or voluntary creditor protection. Additionally, In October 1999, the company commenced a program designed to reduce liabilities to sellers of businesses by disposing of all or a portion of the company's interests in certain of those operations. CHS has concluded agreements with seven of the sellers of the businesses and is in discussions with the original owners of seven other subsidiaries to dispose of those subsidiaries. Net sales decreased $101 million, or 4.7%, from $2,166.9 million in third quarter 1998 to $2,066.0 million in third quarter 1999. On those sales the company experienced net losses in the three month period of 1999 of $225,282 against a net gain in the similar period of 1998 of $6,643. Net sales increased $1.2 billion, or 21.0%, from $5,687.8 million in the nine months ended September 30, 1998 to $6,879.4 million in the nine months ended September 30, 1999 due entirely to acquisitions. Net losses in the 1999 nine months was $314,203 while in the first nine months of 1998 the company had a net gain of $32,718. DOW CORNING: Counsel of Physician Creditors Responds to Plan ------------------------------------------------------------ H. Jeffrey Schwartz, lead counsel for the Official Committee of Physician Creditors of Dow Corning Corp. stated that while pleased to see that patients will finally realize a recovery on silicone breast implant claims, he expressed dismay that the physician creditor claims were not resolved in the confirmed plan. Schwartz added, "For the Official Committee of Physician Creditors, the issues are not resolved, and we are definitely going to appeal this one." Schwartz, chairman of the Business Reorganization Practice Group of Benesch, Friedlander, Coplan & Aronoff LLP has served as bankruptcy counsel to Revco, D.S. the examiner to Phar-Mor Inc., Industrial General Corp., and Official Committee of Unsecured Creditors of The Flexible Corp. EQUALNET COMMUNICATIONS: Substantial Doubts About Future -------------------------------------------------------- For the three month periods ended September 30, 1999 and 1998, Equalnet Communications Corporation, operating as debtor-in- possession, reported pre-tax net operating losses of $0.8 million and $6.1 million, respectively, has a working capital deficiency, and debt in default. These conditions raise substantial doubt about the company's ability to continue as a going concern. Sales for the three months ended September 30, 1999 decreased 2.9% to $8.2 million compared to sales of $8.4 million for the same period of the prior year. Included in the net loss for the three months ended September 30, 1998 were $0.3 million of non- cash dividends to preferred shareholders not incurred in the current period. Excluding these non-cash distributions, net loss improved 73.0%, compared to the corresponding period in the prior year. FACTORY CARD OUTLET: Seeks Authority to Incur Secured Debt ---------------------------------------------------------- The debtors, Factory Card Outlet Corp., and Factory Card Outlet of America, Ltd. seek authority to incur secured debtor from AFCO Credit Corp. for the purpose of financing certain insurance premiums. AFCO will finance 75% of the aggregate amount of Insurance Premiums payable by the debtors pursuant to the policies, or $712,338. The debtors are required to pay the Insurance Companies $237,446 and AFCO is required to pay the amount financed and the debtors are required to pay to AFCO eight equal monthly installments of $91,226. (6 1/2% interest) If the debtors are not permitted to finance the payment fo the Insurance premiums, they will be compelled to borrow the amount financed against their DIP Facility which carries a minimum interest rate of 7%, which is fifty basis points higher than the Financing Charges. FAMILY GOLF CENTERS: Revenues Increase As Do Net Losses ------------------------------------------------------- Family Golf Centers Inc., designs, constructs, operates, and manages golf centers. The golf centers offer golf lessons and a wide variety of practice opportunities, including facilities for practicing driving, pitching, putting, chipping and sand play. In addition, most centers have a pro shop, miniature golf course, snack bar and electronic video games. The company also operates ice rinks and family sports super- centers consisting of ice rinks and other indoor recreational activities. Total revenue for the nine months ended September 30, 1999 was $126.8 million as compared to $94.7 million for the same period in 1998, an increase of $32.1 million (33.8%). The overall increase in revenue was attributable to having additional golf centers in operation during the 1999 period, as well as the revenue generated by the ice rink and Family Sports Supercenters. Net losses were sustained in both nine month periods: $64.3 million in 1999, and $5.8 million in the 1998. Total revenue for the three months ended September 30, 1999 was $44.1 million as compared to $38.6 million for the same period in 1998, an increase of $5.5 million (14.3%). Net loss in the 1999 three month period was $63.5 million, while in the 1998 three month period the company had a net gain of 1.8 million. FILENE'S BASEMENT: To Close Two Connecticut Stores on Saturday --------------------------------------------------------------- Filene's Basement Corp., Wellesley, Mass., will close its Manchester and Stamford, Conn. stores on Dec. 4, according to ABC News. Both stores are planning large sales and said they will stay open until all merchandise is sold. Filene's Basement is a retailer of discount brand-name apparel. (ABI 02-Dec-99) FILENE'S BASEMENT; Seeks To Assume Employment Agreements -------------------------------------------------------- Filene's Basement Corp. and its wholly owned subsidiary, Filene's Basement, Inc., debtors, seek a court order authorizing the debtors to assume the employment agreements of Samuel J. Gerson, Chairman and CEO of parent and Filene's Basement, and Steven Siegel, the executive vice president and CFO of the parent and Filene's Basement. The debtor also seeks to provide for an incentive bonus to the key executives based on financial performance exceeding agreed to targets; and to provide an emergence bonus for the key executives. The emergence bonus would be $1 million, to be split between Gerson and Siegel. The bonus pool would be an amount equal to 25% of the excess of targeted EBITDA, also allocated to Gerson and Siegel. FORCENERGY: Objects To Adequate Assurance For Texaco ---------------------------------------------------- Forcenergy opposes the assertion made by Texaco, Inc. and Texaco Exploration and Production, Inc. and Conoco Inc. that they are entitled to adequate assurance of future performance for future plugging and abandonment obligations with respect to oil and gas leases granted by the Minerals Management Service ("MMS") to which Forcenergy owns a present interest and a P&A Claimant is either a present co-owner or a predecessor in title. Forcenergy states that if the contracts are executory, the P&A claimants have adequate assurance that Forcenergy will perform. Forcenergy claims that when the purchase contracts were negotiated, the P&A claimants elected to receive a larger consideration for the transferred properties and to rely on Forcenergy's unsecured indemnity for P&A Liabilities. The debtor states that now the P&A claimants are trying to retrade the deal they negotiated to the detriment of Forcenergy and its creditors. The debtor states asks that the court no t allow one contract party to unilaterally modify binding contractual obligations without the agreement of and to the detriment of the other contract party. FOSTER WHEELER: Three Subsidiaries File Chapter 11 -------------------------------------------------- RRRP Robbins Inc., Robbins Resource Recovery Partners LP and RRRP Illinois Inc., all subsidiaries of Foster Wheeler Corp., filed chapter 11 on Dec. 1 in the U.S. Bankruptcy Court for the District of Delaware, according to Reuters. Included in the filing was an affidavit stating that a petition for RRRP Midwest Inc. had not been filed, but it was included in the restructuring. The three companies said that Foster Wheeler agreed to debt restructuring with the Franklin High Yield Tax- Free Income Fund and CIBC World Markets Corp. Court papers did not list the companies' asses or liabilities, but did state that unsecured creditors Franklin High Yield, Eaton Vance-High Yield Municipal Bond and Strong Municipal Advantage each listed debenture claims in millions of dollars. Foster Wheeler said that eventually it would file chapter 11 for its units and that an incinerator in Robbins, Ill. would be sold. A hearing was scheduled for yesterday afternoon regarding Foster Wheeler filing a reorganization plan. (ABI 02-Dec-99) GUY F. ATKINSON: Order Approves Disclosure Statement ---------------------------------------------------- The Amended Disclosure Statement of 1815831 Canada, Inc., formerly known as ATKN Holdings, Ltd., or Guy F. Atkinson Holdings, Ltd. is approved by the US bankruptcy Court for the Northern District of California by order entered on November 19, 1999. December 15, 1999 at 1:30 PM is fixed for the hearing on confirmation of the plan. HVIDE MARINE: Reorganization Plan Expected to Be Confirmed ---------------------------------------------------------- Hvide Marine Inc., Ft. Lauderdale, Fla., announced yesterday that the U.S. Bankruptcy Court for the District of Delaware is expected to confirm its chapter 11 reorganization plan, according to a newswire report. At a hearing held yesterday, all objections filed were either overruled or resolved, except for its $300 million exit financing. The bankruptcy court set a hearing date of Dec. 9 to resolve the financing issue and possibly confirm the reorganization plan. Hvide is working to refinance its outstanding bank borrowings, including those under its debtor-in-possession credit facility, with term loans, a revolving credit facility and senior secured second lien notes. Hvide Marine consists of a fleet of 274 vessels providing marine support and transportation services to the energy and chemical industries. (ABI 02-Dec-99) JUMBOSPORTS: Joint Venture to Manage Global Asset Disposition -------------------------------------------------------------- Gordon Brothers Group, LLC, of Boston, Ozer Group, LLC of Needham, MA, and Schottenstein Bernstein Capital Group, LLC of Columbus, OH announced today that they have been appointed as a joint venture to manage the disposition of all of the remaining assets of the Tampa, FL- based JumboSports, Inc. The United States Bankruptcy Court in Tampa, FL approved a transaction on Wednesday, November 24, 1999, that enables the joint venture to underwrite the global assets of JumboSports. Under the terms of the agreement, in addition to completing the inventory liquidation sales being conducted by the joint venture, it will manage the sale of the company's owned and leased properties, and furniture fixtures and equipment in the companies remaining 42 stores. The joint venture has underwritten those assets in excess of $81 million. "After working with all of our constituencies, our trade creditors, bondholders and bankers," explained Michael Worrall, president of JumboSports, "we determined that by having this strategic partnership manage the total disposition process of the company we will maximize the amount of return to our creditors." JumboSports filed for Chapter 11 bankruptcy protection in December, 1998. This past October the company won approval to sell or close all of the company's stores combined with an orderly wind-down of the remaining business. Closing sales were begun by the liquidation group in the stores on November 5, 1999. "We are particularly enthusiastic to be helping JumboSports with the disposition of its entire business," said Cory Lipoff, a principal and managing director of Gordon Brothers, "as there is a good deal of value in its owned and leased properties. Potential buyers have already expressed interest in the available real estate throughout the 18 states in which the stores are located." "We have been working extensively with the JumboSports" management team," added Bill Weinstein a principal of Ozer, "and have demonstrated the added value that we can bring to the process on their behalf." JumboSports was founded in 1982 and quickly established itself as a pioneer in the sporting goods superstore market. Competition from superstore rivals and a decline in the athletic shoe sector combined to weaken the company's performance and operating results. Founded in 1903, Gordon Brothers Group offers a full array of tactical and financing solutions to assist both healthy and underperforming companies, mainly in the retail sector. These solutions include advisory, real estate, strategic liquidation and financial services, as well as asset redeployment within mergers, acquisitions, strategic downsizings, and store relocation programs. During the last year, Gordon Brothers managed more than 2,000 stores for its client base, converting approximately $4 billion worth of inventory and locations into cash for retailers. Gordon Brothers has offices in Boston, New York, Chicago and London. Based in Needham, Mass., The Ozer Group is one of the country's leading retail consulting, business evaluation and asset disposition firms. In addition to helping companies maximize realization for their assets, Ozer manages human resources issues, real estate relationships and other critical areas that are affected when companies undergo change. Ozer's partners are directly involved in every project. Every year, they carefully select projects to which they can apply Ozer's unique approaches and resources. Schottenstein Bernstein Capital Group is one of the nation's most experienced companies in the retail services field. SBCG performs specialized services such as management consulting, inventory valuation/liquidation and retail acquisitions and dispositions. Its clients have included such notables as Federated Department Stores, Dayton Hudson, The Limited, Saks Fifth Avenue, Service Merchandise and Best Products. LACLEDE STEEL: Exclusivity Extended as Plan Talks Proceed --------------------------------------------------------- On Nov. 29, Laclede Steel Co. received bankruptcy court approval for an interim extension of its exclusive period to sponsor a plan of reorganization through Dec. 17. Additionally, the court entered an order to show cause why exclusivity shouldn't be extended through Jan. 31. The motion requesting the extensions of the exclusive periods to file a reorganization plan and then solicit votes in favor of it was filed jointly by the manufacturer of carbon and alloy steel products, its official committee of unsecured creditors and the United Steelworkers of America. (The Daily Bankruptcy Review and ABI December 2, 1999) MCA FINANCIAL: Seeks Sixth Amendment to Financing Order ------------------------------------------------------- The debtors, MCA Financial Corp. and its affiliates seek a court order further amending a financing order to allow additional use of cash collateral. The debtors are seeking authority to use an additional $845,000 of the Bank Group's cash collateral. The cash collateral will include certain items previously identified that total in excess of $500,000. MCCULLOCH: Will Enter Into a Purchase Agreement With Jenn Feng -------------------------------------------------------------- McCulloch North America, a 53-year-old tool manufacturer that has been reorganizing under a Chapter 11 plan since January, announced that it will enter into a purchase agreement with Jenn Feng, a Taiwan-based maker of power tools and lighting equipment. A bankruptcy court here approved the pact on Oct. 4. Jenn Feng, which already manufactures some McCulloch products under a licensing agreement, will own the company outright. Jenn Feng makes private-label tools for a number of manufacturers that include Milwaukee Electric Tool and Snap-On Tools. Jenn Feng also makes its own brand, Talon Tools, which is sold overseas. The publicly held company has production facilities in Taiwan and Shanghai. McCulloch stopped making its own products last November after closing its manufacturing plants in Arizona and Mexico. On June 30, Jenn Feng entered into an agreement to license the McCulloch name in three categories: electric garden lights, electric outdoor power equipment, and hand-held and bench top electric tools. Under the latest agreement, Jenn Feng will form a new company, the McCulloch Corp., that will own the company's brands and run all sales and marketing operations in North America. Jim White, the former vp-sales and marketing for McCulloch, will become the new McCulloch president. In an interview with NHCN, White spoke at length about McCulloch's ups and downs over the past year. "There wasn't any one thing" that pushed McCulloch from black to red ink, White said. "Companies [like McCulloch] have to be very good at supply chain management and more efficient at manufacturing." Consolidation among retailers and double-digit product return rates created a "tough environment" for McCulloch, he added. Shortly after it filed Chapter 11, McCulloch sold its European division to Husqvarna, a Swedish company that makes lawn mowers, snow throwers, chainsaws and other outdoor power equipment. Instead of liquidating the company's other assets, White put together a plan to reorganize McCulloch strictly as a marketing company. "I tied a ribbon around this [proposal] and brought it to the court," White recalled. After gaining court approval in April, White went looking for someone interested in licensing the McCulloch name. Representatives of McCulloch talked to a number of companies before selecting Jenn Feng to manufacture electric outdoor power equipment under the McCulloch name. The deal was sealed in July, which allowed just enough time for a booth at the National Hardware Show in Chicago. In addition to its outdoor power equipment, McCulloch introduced new products, such as electrical lighting and cordless power tools, made by Jenn Feng. With Jenn Feng as its new owner, McCulloch plans to reintroduce its well-known line of gas-powered chain saws in time for Fall 2000 sales. Ultimately, McCulloch intends to expand its gas product line to include string trimmers, blowers and hedge cutters. The company is also looking to license the McCulloch name for other types of outdoor equipment likes mowers, tillers and heaters, White said. MERRY-GO-ROUND: Fidelity Says Snyder Weiner Just Doesn't Get It --------------------------------------------------------------- Snyder, Weiner, Weltchek, Vogelstein & Brown, the Baltimore law firm that extracted a $185 million settlement from Ernst & Young LLP for the benefit of creditors of Merry-Go-Round Enterprises, Inc., "remains unwilling to recognize and accept a fundamental aspect of being a professional in a bankruptcy case," Bruce R. Zirinsky, Esq., of Cadwalader, Wickershal & Taft, is arguing on behalf of Fidelity Management & Research Company in response to Snyder Weiner's latest attempt to avoid bankruptcy court scrutiny of its claimed $74 million contingency fee. The fee, Fidelity continues to assert, is reviewable for its reasonableness under Sections 328(a) and 330 of the Bankruptcy Code and Rule 1.5 of the Maryland Rules of Professional Conduct. As previously reported, exclusively in the TCR, Fidelity stepped- up to the plate after Bear Stearns & Co. backed away from its fight to reduce Snyder Weiner's fee. Snyder Weiner, thinking it had squelched any questioning of its fee, launched an attack against Fidelity, arguing that Fidelity should be estopped from raising any fee-related issue since it had sat back and done nothing until Bear Stearns backed down. "The issue," Mr. Zirinsky tells Judge Stephen E. Derby, "is not the party raising the objection," as Sndyer Weiner would like the Court to think. The sole issue is the reasonableness of the fee. The identity of the objector is, Mr. Zirinsky suggests, a side show designed to frustrate the Court's mandate under the Bankruptcy Code to examine the merits of Snyder Weiner's fee request. PAXSON COMMUNICATIONS: Increase In Revenues, Losses Persist ----------------------------------------------------------- Paxson Communications Corporation's principal business is the ownership and operation of the largest broadcast television station group in the United States. On August 31, 1998, the company launched PAX TV, the programming that the company provides to its owned, operated and affiliated television stations and to certain cable system affiliates and satellite providers. PAX TV programming consists of family-friendly traditional entertainment television programs that have had or are having successful first runs on television, as well as original programs. Prior to launching PAX TV, the company aired long form paid programming consisting primarily of infomercials on its television distribution system. The company continues to carry infomercials at significantly reduced inventory levels. Certain of the company's stations broadcasting PAX TV were and continue to be operated pursuant to time brokerage or affiliation agreements. Consolidated revenues for the three months ended September 30, 1999, increased 97% (or $28.5 million) to $58.1 million over the same period in 1998. This increase was primarily due to the launch of PAX TV and increased distribution via television, cable systems and satellite. The company experienced a net loss of $129.7 million in that same quarter. In the comparable three months of 1998 revenues were $29.4 million and net loss was $53.0 million. Consolidated revenues for the nine months ended September 30, 1999, increased 83% (or $76.1 million) to $167.7 million over the same period in 1998. In the first nine months of 1998 revenues were $91.4 million. Net losses were experienced in both periods: $237.6 million in 1999 and $61.6 million in 1998. PLANET HOLLYWOOD: Does Not Anticipate Profitability Until 2004 -------------------------------------------------------------- Orlando, Fla.-based Planet Hollywood Inc., which filed chapter 11 in October, announced that the company does not expect to make any money until fiscal 2004, according to the Associated Press. The company filed an attachment to its reorganization plan in which company officials predicted that Planet Hollywood will lose more than $17 million annually during 2000 and 2001, $11.8 million in 2002 and $4.7 million in 2003, with projected earnings of $3.4 million by 2004. Prior to the filing, the company's top executives had expected the company to return to profitability sometime in 2000. The company's restructuring plan is expected to be confirmed by the Delaware bankruptcy court sometime in January. (ABI 02-Dec-99) PLANET HOLLYWOOD: Seeks Extension To Assume/Reject Leases --------------------------------------------------------- Planet Hollywood International, Inc. ("PHI") and 25 of its affiliates seek an order extending the debtors' time to assume or reject unexpired leases of nonresidential real property from December 11, 1999 the current deadline to the earlier of the date of confirmation of a plan of reorganization for the debtors and march 11, 2000. The debtors are currently lessees under approximately 24 unexpired leases of non-residential real property. The remaining leases are currently viewed as being integral to the debtors' ongoing operations and constitute assets of the debtors' estates. The debtors submit that until the plan is confirmed for the debtors, they are not in a position to finalize their future operating plans, and consequently wish to retain flexibility in respect of the assumption or rejection of the remaining leases. The debtors state that they expect that the plan will be confirmed by the court by the end of January 2000. PREMIER SALONS: Seeks To Establish Bar Dates -------------------------------------------- Premier Salons International, Inc., et al., seek to establish January 31, 2000 as the last date for all creditors and certain interest holders to file proofs of claim in these Chapter 11 cases. SANTA FE GAMING: Announces Sale Of Henderson Property ----------------------------------------------------- Santa Fe Gaming Corporation announces that its indirect-wholly owned subsidiary, Sahara Las Vegas Corp., has sold its approximate 40 acre parcel of real property in Henderson, Nevada to Station Casino's, Inc. Additionally, Santa Fe Gaming Corp., and its subsidiaries, Sahara Las Vegas Corp. and Santa Fe Hotel Inc. have entered into non-compete agreements with Station Casino's, Inc. and Santa Fe Gaming Corp. and Santa Fe Hotel Inc. have granted rights of first refusal with respect to the Santa Fe Hotel assets and securities. The total consideration received was approximately $37.2 million. In connection with the above referenced agreements, Sahara Las Vegas Corp. has agreed to the terms of an amendment to its indebtedness, under which a release of lien was granted on the Henderson property. Santa Fe Gaming Corporation owns and operates the Santa Fe Hotel and Casino in northwest Las Vegas and the Pioneer Hotel and Gambling Hall in Laughlin, Nevada. In addition, the company holds property on Las Vegas Boulevard for future possible development. SIRENA APPAREL: Seeks To Reject Factoring Agreement --------------------------------------------------- Sirena Apparel Group, Inc., debtor seeks a court order authorizing it to reject its pre-petition factoring agreement with Heller Financial Inc. The debtor has determined that it is in the best interest of the debtor and its estate to enter into a factoring agreement with Century Business Credit. TELEGROUP INC: Disclosure Statement ----------------------------------- Substantially all of the assets of Telegroup were previously sold to several unaffiliated purchasers. The plan provides for the prompt liquidation of all remaining assets of Telegroup and the distribution of cash to creditors according to the classification and treatment of claims as set forth in the plan. The debtor will not carry on any type of normal business activity. Summary of Treatment of Claims and Interests: Class 1 - Secured Claims - Unimpaired - Potential claims $171,620; paid in full. Class 2 - Priority Claims - Unimpaired - Potential claims $4,435,000 paid in full. Class 3 - Unsecured Claims - Impaired - potential claims $180,153,000 - Holders will receive a pro rata distribution of available cash. The projected distribution is 32.1%-34.2% Class 4 - Subordinated Notes - Impaired - No Distribution; notes canceled. Potential claims - $25,633,333 Class 5 - Interests - Impaired - No Distribution - Interests Canceled. UNITED STATES EXPLORATION: Financial Reports Indicate Losses ------------------------------------------------------------ United States Exploration Inc. produces oil and gas and operates gas gathering systems. The company's operations have historically been located in Kansas and Oklahoma. Effective May 15, 1998, the company acquired producing oil and gas properties in northeast Colorado which now constitute its principal oil and gas assets. The company's properties in Oklahoma were sold in three separate transactions in January and May of 1999. United States Exploration realized a net loss of $463,046 for the third quarter of 1999 compared to a loss of $1,513,828 for the third quarter of 1998. Including preferred stock dividends, the loss for the third quarter of 1999 was $516,226 compared to a loss of $1,582,608 for the third quarter of 1998. These losses were experienced against net revenues of $2,159,111 in the third quarter of 1999, and $1,278,525 in the comparable 1998 period. The company realized a net loss of $2,484,126 for the first nine months of 1999, compared to a net loss of $2,685,724 for the first nine months of 1998. Including preferred stock dividends, the loss for the first nine months of 1999 was $2,643,666 compared to a loss of $3,671,077 for the first nine months of 1998. Revenues in those periods were $5,768,651 in the 1999 nine months, and $3,168,004 in the 1998 nine months. WSR CORP: Seeks Order Approving Collective Bargaining Agreement --------------------------------------------------------------- The debtors request an order approving the Memorandum of agreement and authorizing the execution of the proposed New agreement. The term of the proposed New Agreement is increased from three to five years, through July 3, 2004. The increased cost associated with the New Agreement is calculated to be 9.6% over the five-year contract term. During the calendar years of the New Agreement commencing in the year 2000, the increased cost is calculated at $66,000, $290,000, $216,000 and $226,000 respectively. The Union has agreed to significant concessions, including a wage freeze through the end of 1999. Without the New Agreement, the debtors could face work interruptions or other costly labor problems that in turn would negatively impact the debtors' revenues and business recovery. XCL LTD: Court Denies Motion To Dismiss Involuntary Petition ------------------------------------------------------------ XCL Ltd. (AMEX:XCL) today announced that the U.S. Bankruptcy Court for the Western District of Louisiana, in Opelousas, has denied a Motion filed by its wholly owned subsidiary, XCL-China Ltd., to dismiss the Petition for Involuntary Bankruptcy that had been filed against XCL-China by Apache China LDC. The Court's decision was limited to a determination that Apache had standing to file that petition. The Court did not rule on the merits of Apache's petition, which will be decided at a later date. In addition, the Court ruled that Apache's filing of the Petition for Involuntary Bankruptcy stayed the arbitration XCL-China had filed against Apache China. The Court noted that it would consider a motion to lift that stay at the appropriate time, which, if granted, could allow that arbitration to move forward. If the Court does not lift the stay, then XCL-China's claims against Apache China will be tried and decided by the Bankruptcy Court. The disputes center on operations in the companies' Zhao Dong Block in the People's Republic of China. Apache China has asserted a$10 million claim against XCL-China for cash calls relating to operations on the Block, and XCL-China has commenced an arbitration proceeding challenging approximately $17 million in charges by Apache. XCL-China is reviewing the impact of the Court's ruling with its counsel. XCL-China will continue to vigorously press its claims against Apache. XCL Ltd. is an oil and gas exploration and production company with headquarters in Lafayette, Louisiana, and operations in the People's Republic of China. The company's Common Stock is traded on the American Stock Exchange and the London Stock Exchange Limited. BOND PRICING FOR WEEK OF November 29 ==================================== Following are indicated prices for selected issues: Acme Metal 10 7/8 '07 14 - 17(f) Amer Pad & Paper 13 '05 10 - 12(f) Asia Pulp & Paper 11 3/4 '05 81 - 83 E & S Holdings 10 3/8 '06 32 - 35 Fruit of the Loom 8 7/8 '06 11 - 13 Geneva Steel 11 1/8 '01 12 - 14(f) Globalstar 11 1/4 '04 62 - 64 Hechinger 9.45 '12 12 - 14(f) Integrated Health 9 1/2 '07 8 - 10(f) Iridium 14 '05 7 - 8(f) Loewen 7.2 '03 54 - 56(f) Pillowtex 10 '06 32 - 36 Planet Hollywood 12 '05 28 - 30(f) Purina Mills 9 '10 20 - 24(f) Revlon 0 '01 25 - 26 Rire Aid 6.7 '01 71 - 73 Sunbeam 0 '18 15 - 16 TWA 11 3/8 '06 42 - 44 United Artists 9 3/4 '08 20 - 24 Vencor 9 7/8 '08 20 -22(f) ********* 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. 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