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/raid1/www/Hosts/bankrupt/TCR_Public/991210.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 10, 1999, Vol. 3, No. 239 Headlines ACCESSAIR: Flies Charters Again AMERICAN BANKNOTE: Files Pre-Negotiated Financial Restructuring BAPTIST FOUNDATION: Order Authorizes Employ of Ernst & Young BOBBY ALLISON WIRELESS: Stock Ownership Reported BREED TECHNOLOGIES: Given Extension Until December 15 COLORADO CASINO: Hearing On Adequacy of Disclosure Statement CONTINENTAL INVESTMENT: Consents to Bankruptcy Relief ELECTRO CATHETER: Late To File Financial Information FLORIDA COAST: Notice of Hearing To Consider Confirmation of Plan FOAMEX INTERNATIONAL: Reports Stock Ownership HARNISCHFEGER: Sales Heavy For Stock HECHINGER INVESTMENT: Auction Results ICO GLOBAL: Court Approves Initial Stages of Plan IMAGICA ENTERTAINMENT: Third Quarter Results IRIDIUM: Expects Growth Market in Uganda JUMBOSPORTS, INC: Seeks To Assume and Assign Leases JUMBOSPORTS: Motions To Sell Real Property LEARNINGSMITH: To Close All of Its Stores LE PELICAN: Owner of Replica of Warship Faces Bankruptcy MONTGOMERY WARD: Sammy Sosa Signs Five-Year Endorsement Deal PLUMA INC: Order Grants Motion To Sell Sewing Facility PREMIER SALONS: Seeks Extension To Assume/Reject Leases RRRP ROBBINS INC: Case Summary & 20 Largest Unsecured Creditors SERVICE MERCHANDISE: NYSE Suspends Trading of Securities SMOKY RIVER COAL: Opportunity To Acquire Smoky River Coal SOURCE MEDIA: Conveys Certain Assets SUN HEALTHCARE: Plan Calls For Bonuses To Executives TED PARKER: Last Date For Filing Proofs of Claim TV FILME: Reaches Agreement In Principle With Committee UNITEL VIDEO: Intends To File Unaudited Operating Reports VERTEX COMPUTER: Reports Delay in Filing Financial Statement WESTSTAR CINEMAS: Seeks Court Approval of $90M Sale of Assets BOND PRICING FOR WEEK OF DECEMBER 6 ********* ACCESSAIR: Flies Charters Again ------------------------------- Des Moines, Iowa-based AccessAir is back in the air, but with charter flights only, for the time being, according to ABC News. The company filed for bankruptcy protection late last month and is seeking new financing. The airline is using one plane to fly the Carolina Hurricanes to National Hockey League games, and it may use other planes for charter to fly college football fans to bowl games. The charters are providing some income, but airline officials say they still need more financing to resume commercial service. (ABI 09-DEC-99) AMERICAN BANKNOTE: Files Pre-Negotiated Financial Restructuring --------------------------------------------------------------- American Banknote Corporation announced that, consistent with the previously announced agreement in principle with the Informal Committee of the 11-1/4% Senior Subordinated Noteholders, it has filed in the United States Bankruptcy Court for the Southern District of New York a petition and plan of reorganization under Chapter 11 so as to implement the consensual prearranged financial restructuring whereby, among other things, holders of the Corporation's 11-1/4% Senior Subordinated Notes will convert that debt into shares of new common stock. 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 10.6 million shares of new common stock and by cancelling, in its entirety, the existing Convertible Subordinated Notes in exchange for approximately 221,000 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 due in December,1999 and 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 proposed plan of reorganization, (I) obligations on the Company's 11-5/8% Senior Unsecured Notes will be paid as they become due (with past due interest paid 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 debt restructuring has moved expeditiously with cooperation from all concerned. American Banknote will emerge from this process with a much improved capital structure and financial flexibility to grow and expand its core businesses. We are very grateful for the support we are receiving during this challenging time", said Morris Weissman, Chairman & CEO. Implementation of the restructuring is subject to consummation of the Chapter 11 plan, which requires, among other things, Court approval, and no assurances of such approval can be given. This press release is not an offer with respect to any securities or solicitation of acceptances of a Chapter 11 plan. Such an offer or solicitation will be made in compliance with all applicable laws. 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. BAPTIST FOUNDATION: Order Authorizes Employ of Ernst & Young ------------------------------------------------------------ By order entered on November 15, 1999, the US Bankruptcy Court for the District of Arizona granted the motion of the debtors, Baptist Foundation of Arizona, Inc. to employ and retain Ernst & Young LLP as special advisors for the companies. This order will be final when an official Creditor's Committee has been appointed, receives notice and has an opportunity to object. BOBBY ALLISON WIRELESS: Stock Ownership Reported ------------------------------------------------ James S. Holbrook, Jr. beneficially owns 49,578 shares of common stock with sole voting and dispositive powers, and 339,976 shares of common stock with shared voting and dispositive powers in Bobby Allison Wireless Corporation. This represents 38% of the outstanding shares of common stock of the company. Sterne, Agee & Leach Group, Inc., Sterne, Agee & Leach, Inc. and The Trust Company of Sterne, Agee & Leach, Inc. each share voting and dispositive power on 290,398 shares of the company's common stock. Sterne, Agee & Leach Group, Inc. also beneficially owns 105,820 shares, exercising sole voting and dispositive powers, while Sterne, Agee & Leach, Inc. exercises sole power over 35,000 shares. Additionally The Trust Company of Sterne, Agee & Leach, Inc. beneficially owns, and exercises sole voting and dispositive power over 100,000 shares. In each case the entities hold 32.8% of the outstanding common stock of Bobby Allison Wireless Corporation. Holbrook is the President and CEO of Sterne, Agee & Leach Group, the Chairman of the Board of Directors, President and Chief Executive Officer of Sterne, Agee & Leach, Inc. and the Chairman of the Board of Directors of the Trust Company. Holbrook is also a director of Bobby Allison Wireless. The principal business of Sterne, Agee & Leach Group is that of a holding corporation. Sterne, Agee & Leach Inc. and the Trust Company are wholly-owned subsidiaries of Sterne, Agee & Leach Group. The principal business of Sterne, Agee & Leach, Inc. is that of a registered broker-dealer registered under the Securities Exchange Act of 1934, as amended. The principal business of the Trust Company is the provision of trust services including fiduciary powers chartered under the banking laws of the State of Alabama. Holbrook, Sterne, Agee & Leach Group, Sterne, Agee & Leach Inc. and each applicable officer and director intend to hold the securities for investment purposes. BREED TECHNOLOGIES: Given Extension Until December 15 ----------------------------------------------------- Breed Technologies Inc. has been given an extension until Dec. 15 to submit a business plan to its lenders on the future projections for the company, which filed Chapter 11 on Sept. 20. Robin Kovaleski, vice president of investor relations and corporate communications, said a full restructuring plan will then be submitted to the bankruptcy court on Feb. 15. She said the company continues to explore two paths -- restructuring or selling the company. The board of directors met this week to review bids from companies interested in purchasing all or part of Breed. Final bids will be submitted to the court in January. Kovaleski said accountants with Ernst & Young also are conducting the company's annual audit. Once finished, Breed will be able to issue its annual financial report. COLORADO CASINO: Hearing On Adequacy of Disclosure Statement ------------------------------------------------------------ A Disclosure Statement was filed by Colorado Casino Resorts, Inc. A hearing will be held on the adequacy of such Disclosure Statement on January 12, 2000, at 10:00 AM, in Bankruptcy Courtroom C, US Custom House, 721 19th street, Denver, Colorado. CONTINENTAL INVESTMENT: Consents to Bankruptcy Relief ----------------------------------------------------- Continental Investment Corporation (Pink Sheets: CICG) today consented to relief pursuant to Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Texas-Dallas Division. On January 13, 1999, a group of alleged creditors filed an involuntary Chapter 11 bankruptcy petition against the Company in the United States Bankruptcy Court for the Northern District of Georgia-Atlanta Division. On March 19, 1999 an Order was entered to transfer the case from the United States Bankruptcy Court for the Northern District of Georgia-Atlanta Division to the United States Bankruptcy Court for the Northern District of Texas-Dallas Division. In the Order for Relief, the Company disputed that the petitioning creditors are valid creditors of the Company and/or have valid claims in this case, and that the Company had reserved all rights to dispute their claims as part of the proceedings. ELECTRO CATHETER: Late To File Financial Information ---------------------------------------------------- Having declared Chapter 11 bankruptcy in May 1999, Electro Catheter Corporation will be late in filing financial information with the SEC. The company will not be able to complete the information needed in a timely fashion due to manpower constraints and the need to complete an audit. The due date for filing of the information had been November 29, 1999. FLORIDA COAST: Notice of Hearing To Consider Confirmation of Plan ----------------------------------------------------------------- By order dated December 1, 1999, the US Bankruptcy Court for the District of Delaware approved the Disclosure Statement for the joint Chapter 11 plan of Florida Coast Paper Holding Company, LLC and its affiliated debtors. On January 5, 2000 at 2:00 PM a hearing will commence before the Honorable Peter J. Walsh, US Bankruptcy Court for the District of Delaware to consider confirmation of the amended joint Chapter 11 plan of Florida Coast Paper Holding Co., LLC and affiliates and the Ad Hoc Committee of Holders of 12 3/4% First Mortgage Notes Due 2003. FOAMEX INTERNATIONAL: Reports Stock Ownership --------------------------------------------- Foamex International Inc. reports that Rus, Inc. is the beneficial owner of 2,684,903 shares of the common stock of the company. This amount represents 10.7% of the outstanding shares of common stock of Foamex. Rus holds the sole power to vote, or direct the voting of, and sole power to dispose of, or direct the disposition of, all 2,684,903 shares. HARNISCHFEGER: Sales Heavy For Stock ------------------------------------ The Milwaukee Journal Sentinel reports on December 7, 1999, that the heavy sell-off of Harnischfeger Industries Inc. stock continued Monday after the New York Stock Exchange announced Friday that it would take the company off its listing after trading Wednesday. Harnischfeger stock lost 58.82% of its value Monday, falling 62.5 cents a share to close at 43.75 cents. Volume was more than 4.2 million shares, up from Friday's 1.2 million shares, which was the most that had been traded since mid-July. The St. Francis-based maker of mining and papermaking machinery filed for Chapter 11 bankruptcy protection in early June and is trying to sell its Beloit Corp. unit. Its stock has traded in the $1 range since midsummer after closing last year at nearly $11 a share. The stock has fallen from $49 a share three years ago. HECHINGER INVESTMENT: Auction Results ------------------------------------- The debtors, Hechinger Investment Company of Delaware, Inc., et al., announce that Hechinger Enterprises was the winning bidder for properties located at 2051 Chain Bridge Road, Vienna, VA; 7770 Richmond Highway, Alexandria, Virginia; and 3415 Simpson Ferry Road, Camp Hill PA. ICO GLOBAL: Court Approves Initial Stages of Plan ------------------------------------------------- TELECOMWORLDWIRE reports on December 7, 1999 that a US bankruptcy court has approved the initial stages of a plan that aims to provide ICO Global Communications, which filed for Chapter 11 protection in August, with the funding it needs to exit from bankruptcy. Under the plan, a group of investors will provide USD500m in financing by the end of January 2000 while an additional USD700m is expected to be invested in the company by the end of 2Q'2000. With the investment, it is hoped that ICO will be able to launch its planned global mobile satellite services in 2Q'2001. IMAGICA ENTERTAINMENT: Third Quarter Results -------------------------------------------- Imagica Entertainment Inc. continued to experience difficulties in the third quarter in returning to profitability. The company indicates this has been due to its being unable to achieve a production level that will insure profitability. As a result the company has continued to turn down business because of production constraints. To overcome this problem Imagica has entered into a 15 year lease on a 55,000 sq. ft. production facility that will allow it to more than double its production capacity. To achieve that increased volume this space allows the company to currently enter into a lease for three additional print production lines and high speed materials preparation equipment and new material handling equipment. Management expects these changes will position the company to be profitable starting in fiscal 2000. In its recent report, for the nine months ended February 28, 1999, Imagica cited revenues of $2,350,469 and net losses of $1,096,775. In the same nine month period of 1998 Imagica's revenues were $1,989,786 and net losses were $125,185. IRIDIUM: Expects Growth Market in Uganda ---------------------------------------- WIRELESS TODAY reports on December 8, 1999 that mobile-satellite provider Iridium's [IRIDF] African operation this week launched service in Uganda, where thriving agricultural and tourism industries are expected to drive the country's growth from one of the continent's poorest economies. Iridium Africa is providing service through Mobile Telephone Network Uganda. The company, which distributes Iridium services in 54 African countries and in Cyprus and Turkey, expects high demand in Uganda's agricultural and tourism sectors. Handsets to be used with Iridium's network will sell for $1,225 and pagers for $335. Uganda's 21 million POPs are served by just 81,000 wireline connections. Mobile Telephone has 12,000 subscribers, but wireless service is impeded by limited cellular build-out and wireline infrastructure. Telecom infrastructure is concentrated in highly populated areas where returns on investments are greatest. That concentration includes 80 percent of the country's digital phone lines in its capital, Kampala. Thus, large parts of Uganda are without telecom services. The Iridium system allows its handsets to communicate with a constellation of 66 LEO satellites at a polar orbit of 780 kilometers. The parent company filed for Chapter 11 bankruptcy protection after subscriber revenues fell far short of expectations. Telecommunications entrepreneur Craig McCaw is talking to Iridium officials about investing in the company as part of his strategy to enter the satellite communications market earlier than 2004 with his planned broadband Teledesic system. McCaw also has agreed to provide up to 62 percent of the $1.2 billion in equity funding that he and Indian media entrepreneur Subhash Chandra will invest to pull mobile-satellite provider ICO Global Communications [ICOFQ] out of bankruptcy. JUMBOSPORTS, INC: Seeks To Assume and Assign Leases --------------------------------------------------- The debtors, JumboSports Inc., and its affiliates seek authority to assume and assign unexpired non-residential real property leases for its Raleigh, North Carolina and Brandon, Florida locations to the Sports Authority. Pursuant to the offer received from The Sports Authority, the debtor will receive $2.5 million in cash for its assumption and assignment of the Raleigh Lease and the Brandon Lease to The Sports Authority. JUMBOSPORTS: Motions To Sell Real Property ------------------------------------------ By separate motions, the debtors, JumboSports Inc., and its affiliates seek court authority to sell real property located in Wichita, Kansas, Stockton, California and Louisville Kentucky. 6959 East 21st Street North, Wichita Kansas: The purchaser is TMD Southglen, LLC. The total purchase price for the property is $3.3 million. Any competing bidder must start at $3.31 million and all subsequent higher bids must be in incremental increases of at least $10,000. The debtor is currently conducting a going- out-of-business sale at its store located on the real property. The sale will be completed on or before January 15, 2000. 6221 West Lane, Stockton, California - The debtor closed its sporting goods store located on the real property in 1998. The purchaser is Michael E. Brown. The total purchase price for the real property including building and improvements is $2.75 million. Any competing bid must be in the amount of $2.76million and all subsequent higher bids must be in incremental increases of at least $10,000. 100 Urton Lane, Middletown, Kentucky. The debtor anticipates that the going-out-of-business sale will be completed on or before January 15, 2000. The debtor anticipates that the going out-of-business sale will be completed on or before January 15, 2000. E&H Integrated Systems, Inc. is the proposed purchaser of the property. The total purchase price is $3.69 million. Any competing bid must start at $3.7 million and all subsequent higher bids must be in incremental increases of at least $10,000. A hearing to consider all three motions will be held on December 23, 1999 at 1:30 PM before the Honorable C. Timothy Corcoran, III, Sam M. Gibbons Courthouse, 801 North Florida Avenue, Tampa, Florida 33602. LEARNINGSMITH: To Close All of Its Stores ----------------------------------------- Educational toy retailer Learningsmith Inc. plans to shutter its 87 stores, including the one in MacArthur Center. The Burlington, Mass.-based company, which sells games and toys with an educational emphasis, told managers Thursday that it would liquidate all of its stores, according to employees at several stores around the nation. The sales to kick off the liquidation have begun, but employees said they have not been given a closing date. Company officials contacted Monday would not comment. The beleaguered retailer was launched in 1991 by Boston entrepreneur Marshall Smith in conjunction with the WGBH Educational Foundation. WGBH, Boston's public television affiliate, reportedly still owns a minority stake. Smith had founded the Videosmith and now-defunct Paperback Booksmith chains. A year later, Boston venture capital firm Halpern, Denny & Co. took a majority stake in the company, fueling it with cash for rapid expansion. Last year, the company got a $30 million line of credit from Paragon Capital Corp., a Needham, Mass.-based lender, and the company announced plans to double the size of its then 67-store chain. The Boston Herald, citing unnamed sources, reported Saturday that the company was expected to file for Chapter 11 bankruptcy protection. Still, store managers interviewed Monday said the news had caught them off-guard. "I really don't know why we're closing - the news surprised me immensely," said Michael Flores, sales supervisor for a store in Washington, D.C. Ed Ladd, general manager for MacArthur Center, said that the company had not officially notified the mall of any plans to close the store there, which is about 3,700 square feet. Learningsmith is the second merchant at MacArthur Center to close because of companywide problems. Last month, Just For Feet Inc., a troubled athletic footwear retailer, closed its Athletic Attic store there shortly before filing for Chapter 11 bankruptcy. LE PELICAN: Owner of Replica of Warship Faces Bankruptcy -------------------------------------------------------- The captain of Le Pelican, a replica of the warship used by the French explorer Sieur d'Iberville, says that his ship needs to find a port soon that will draw tourists or he will be forced into bankruptcy, ABC News reported. The warship has sailed the waters around New Orleans for more than four years and is being restored. The owner said he may sail on to Florida, but Louisiana officials are interested in keeping the ship local because of its ties to the former territory. (ABI 09-Dec-99) MONTGOMERY WARD: Sammy Sosa Signs Five-Year Endorsement Deal ------------------------------------------------------------ Sammy Sosa, baseball's record-breaking home run slugger, has signed a five-year endorsement deal with Chicago-based retailer, Montgomery Ward. "Sammy Sosa's appeal to a wide audience and the excitement he generates make him the perfect representative for the new Wards' and our exciting new direction," said Roger Goddu, chairman and chief executive officer of Wards. "Sammy is an example of the great things that happen when you combine talent, hard work and a tremendous attitude, and we're thrilled to add him to the Wards' team." Sosa's five-year deal will include broadcast television and radio commercials, print advertising, public appearances, merchandise and autograph sessions. Terms of the exclusive agreement were not disclosed. "I know this is a great time in Wards history, and I'm proud to become part of their team," said Sosa. "I look forward to working with them over the next five years and participating in the rollout of their new prototype stores." The new Wards prototype stores will feature a circular racetrack design which creates a comfortable, aesthetically pleasing shopping environment with clear sight-lines, bright signage and a user-friendly layout that promotes cross-shopping. "Wards is creating a store for the next millennium by providing today's time-crunched shoppers with an experience that is both enjoyable and efficient," said Goddu. "We encourage shoppers to visit a nearby Wards. We're proud of the progress we have made, particularly in our merchandise assortment and customer service." PLUMA INC: Order Grants Motion To Sell Sewing Facility ------------------------------------------------------ The debtor, Pluma, Inc. is authorized to sell its real estate located in Chatham, Virginia consisting of 16.32 acres of real estate upon which is situated a building and improvement. The Employment of Michael Fox International, Inc. is also authorized. February 1, 2000 at 9:30 AM at the US Bankruptcy Court, 101 South Edgeworth Street, Greensboro, North Carolina is set as the date, time and place for a hearing to consider the confirmation of the sale. PREMIER SALONS: Seeks Extension To Assume/Reject Leases ------------------------------------------------------- Premier Salons International, Inc., debtor, seeks to extend the period to assume or reject unexpired leases of nonresidential real property. Premier Salons is a party to approximately four unexpired leases of nonresidential real property. The aggregate amount of rent owed by Premier Salons per year is approximately $2,022,530. The unexpired leases are valuable assets of the estates and are integral to the continued operation of their business. The debtors state that an extension of time is appropriate in order to allow Premier Salons to review the unexpired leases in the context of developing a comprehensive business plan and ultimately a plan of reorganization. Premier Salons has not had an adequate opportunity to completely review each of the unexpired leases and determine the economics of each such lease, whether it is burdensome to the estate and how it will fit in with the debtor's ongoing business operations. Premier Salons proposes that the deadline for assuming or rejecting the unexpired leases be extended to and including the Confirmation Date. RRRP ROBBINS INC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: RRRP Robbins Inc. aka Foster Wheeler Robbins Inc. Robbins Resource Recovery Partners, LP RRRP Illinois, Inc. Perryville Corporate Park Clinton, New Jersey 08809-4000 Court: US Bankruptcy Court for the District of Delaware Case: 99-4271 Chapter: 11 Filed: December 1, 1999 Debtor's Attorney: Scott D. Cousins, Esq. Greenberg Traurig PA 1201 Orange Street, Suite 7808 Wilmington, Delaware List of 20 Largest Unsecured Creditors: Creditor - Type of Claim - Amount --------------------------------- Franklin High Yield Tax - Free Income Debenture - up to $202,375,000(value of security unknown) Eaton Vace - High Yield Municiipal Bond debenture up top $10,500,000 (value of security unknown) Strong Municipal Advantage debenture up to $20,350,000 (value of security unknown) Strong High Yield Municipal Bond debenture up to $15,250,000 (value of security unknown) Prudential Insurance debenture up to $14,000,000 (value of security unknown) Capital Research - American High Inc. debenture up to $10,990,000 (value of security unknown) Van Kampen debenture up to $3,000,000 (value of security unknown) FW Zack, Inc. trade $331,687.14 American International Materials, Ltd. trade $312,202.12 Moody National Bank debenture up to $300,000 (value of security unknown) Village of Robbins scholarship $255,631.03 Eagle Services Corp. trade $220,357 Deangelis, Aldo A. services $155,429 J&M Marsh & McLennan Inc Workmans Comp $134.381 Newton County Development Corp trade $113,535 TXU Energy Services trade $82,464 ARI Environmental Inc. trade $50,283 Field Technologies, Inc. trade $49,312 Tamdem Formerly Labor World debenture up to $49,312 (value of security unknown) Land & Lukes Co. trade $43,640 SERVICE MERCHANDISE: NYSE Suspends Trading of Securities -------------------------------------------------------- The Tennessean reports on December 3, 1999, that the New York Stock Exchange suspended trading of the securities of Service Merchandise Co., which began a Chapter 11 bankruptcy reorganization in March. The NYSE is asking the Securities and Exchange Commission to approve the delisting of the Nashville-based retailer's common stock, 8 3/8% senior notes due Jan. 15, 2001, and 9% debentures due Dec. 15, 2004. The exchange is seeking to remove the common stock because the company filed for bankruptcy and is not meeting criteria for total stockholders' equity and market capitalization, both measures of a company's value. The exchange requires that companies have stockholders' equity or total corporate assets minus total liabilities of at least $ 50 million and global market capitalization of at least $ 50 million. Market capitalization is figured by multiplying a company's outstanding shares by its stock price. Also, the exchange suspended trading of the senior notes and debentures both debt instruments because the company is not able to meet its obligations on the debt. Since the bankruptcy, Service Merchandise Co. Inc. stock has continued to trade, but at levels below 50 cents. Shares closed yesterday at 28 cents, up 3 cents. At one point in the 1980s, Service Merchandise was one of the top performers on the New York Stock Exchange. Shares declined in recent years as the company's sales decreased. It filed for bankruptcy earlier this year after it was unable to boost sales by reformatting its stores and changing its product mix. A company spokeswoman said the action will not impact business as usual, and that the company will not appeal the decision. SMOKY RIVER COAL: Opportunity To Acquire Smoky River Coal --------------------------------------------------------- Canada NewsWire reports on December 8, 1999, that an opportunity exists to acquire Western Canada's only privately owned coal producer. Smoky River Coal Limited ("Smoky River'') or ("The Company'') is presently operating under the Companies Creditors Arrangements Act ("CCAA''), and the sales transaction is being managed by PricewaterhouseCoopers Inc. ("PwC'') in the context of a Court supervised bidding process. Smoky River's operations are located near Grande Cache, Alberta which has a population of approximately 4,000 (430 kilometres west of Edmonton). The Company has approximately 400 employees. Smoky River's coal leases in the Grande Cache area cover nearly 30,000 hectares (74,130 acres) in a block approximately 29 kilometres long and 19 kilometres wide. The geological resource within the Smoky River lease area is estimated to be over 500 million tonnes. A demonstrated recoverable reserve of approximately 100 million tonnes of low volatile metallurgical coal has been defined, split approximately evenly between surface and underground recoverable reserves. Annual production over the past five years has been in the range of 2 to 3 million tonnes of metallurgical coal for export to steel mills in Asia, Europe, Latin America and the U.S.A. and thermal coal to a power plant located adjacent to Smoky River's operations. The Company presently operates a preparation plant, underground mine and surface mine. Smoky River also has an ownership interest in Neptune Bulk Terminals (Canada) Ltd, located at the Port of Vancouver allowing shipment of up to three million tonnes annually. The Court has approved the Bid Process which is expected to be finalized by an Order on December 13, 1999, and includes among other things, authorizing PwC to solicit offers to acquire Smoky River as a going concern (in whole or in part), an en bloc sale (in whole or in part) or separate bids on asset packages. It is PwC's preference for either a going concern or en bloc sale. The Bid Process Order will fix a tight timetable for the bidding process. This process is to include mailing letters to interested parties by December 7, 1999 along with advertising the solicitation process, preparing a sales package for prospective purchasers by December 10, 1999 and making available a data room to qualified parties by December 13, 1999. Final bids are to be received by PwC by 3:00 PM MST on January 21, 2000. An application for Court approval is scheduled for January 31, 2000. SOURCE MEDIA: Conveys Certain Assets ------------------------------------ On November 17, 1999, Source Media Inc. conveyed certain assets relating to its "VirtualModem" and "Interactive Channel" products and businesses to SourceSuite LLC, a Delaware limited liability company, in exchange for a 50% ownership interest in SourceSuite. Insight Interactive, LLC contributed $13 million to SourceSuite in exchange for a 50% interest in SourceSuite. Upon the formation of SourceSuite, Insight Interactive acquired 842,105 shares of Source Media's common stock, representing approximately 6% of the company's issued and outstanding stock, for a purchase price of $12 million in cash. Source Media also issued to Insight Interactive five-year warrants to acquire up to 4,596,786 shares of its common stock at an exercise price of $20.00 per share. SUN HEALTHCARE: Plan Calls For Bonuses To Executives ---------------------------------------------------- A Sun Healthcare Group plan would provide six-figure bonuses for executives if they can guide the company through bankruptcy reorganization. Sun plans to spend more than $7.5 million on incentive payments to keep the executives and more than 900 other employees from leaving the Albuquerque-based nursing home company, the Albuquerque Journal reported in a copyright story Wednesday. Andrew Turner, the company's founder, chairman and chief executive officer, would receive the biggest bonus: $500,000. Other proposed executive bonuses range from $125,000 to $350,000, the Journal reported. Sun, one of the nation's largest nursing home chains, filed for bankruptcy protection from creditors under Chapter 11 of the U.S. Bankruptcy Code on Oct. 14 in Delaware. The company listed more than $1.8 billion in assets and $2.1 billion in debts in its petition. The company blamed most of its losses on flagging Medicare fees. The company reported a $236.9 million loss during the third quarter that ended Sept. 30, compared with a loss of $1 million in the third quarter last year. Revenue for the third quarter was $629.6 million, compared with $814.4 million for 1998's third quarter. An official with the Service Employees International Union, which represents workers in about 30 Sun nursing homes, said it is ironic that Sun executives who oversaw creation of Sun's financial woes could be rewarded for cleaning them up. "It's really rather offensive," said Arvid Muller, a senior research analyst with the union, which represents certified nursing aides. The company last week asked a U.S. bankruptcy judge in Delaware to approve the incentive program. A hearing is expected later this month. "The reason for establishing the retention program is to ensure that key employees continue to provide essential management and other necessary services" during Sun's reorganization, the company said in court documents. Sun and its affiliated companies said their "ability to stabilize and preserve their business operations and assets will be substantially hindered if (they) are unable to retain the services of these key employees." Muller said Sun also needs to develop a plan for retaining workers who are directly involved in caring for nursing-home residents. The aides earn about what fast-food workers do, making it difficult for Sun and other nursing-home chains to attract and keep quality aides. "We strongly disagree with the (union's) comments," Sun said in a statement. "As we have stated previously, it was the change in the Medicare-reimbursement system that pushed this and other companies into Chapter 11 bankruptcy." Two-thirds of the employees who would be eligible for retention payments work in nursing homes, the company said. "They are crucial to our ability to provide quality patient care," Sun said. Sun is working with its creditors on a plan to reorganize the company's debt. The reorganization plan is expected to leave Sun's common stock worthless. TED PARKER: Last Date For Filing Proofs of Claim ------------------------------------------------ The US Bankruptcy Court for the District of Delaware entered an order requiring all persons who wish to assert a claim against Ted Parker Home Sales, Inc. or Carolina Home sales, Inc., d/b/a Victoria Homes, arising prior to July 22, 1999, to file a proof of claim with the debtors' claims agent, Logan & Co., on or before December 31, 1999. TV FILME: Reaches Agreement In Principle With Committee ------------------------------------------------------- On August 13, 1999, TV Filme Inc. reached an agreement in principle with a committee representing holders of its outstanding 12-7/8% senior notes due 2004 regarding a restructuring of its indebtedness. The company is in the process of completing negotiations of the documentation required for such restructuring. Because of these developments, TV Filme has not been able to evaluate all of the consequences which could affect it and its business or to determine the most accurate and appropriate disclosure to be made. Accordingly, the company reports it is unable, without unreasonable effort and expense, to file its quarterly report for the period ended September 30, 1999 within the prescribed period. Although the company's financial statements are presented pursuant to United States generally accepted accounting principles in U.S. dollars, the company's transactions are consummated in both REAIS and U.S. dollars. Inflation and devaluation in Brazil have had, and are currently having, substantial effects on the company's results of operations and financial condition. As a result of the changes in exchange rates during the periods presented, the period-to-period comparisons of the company's results of operations are not necessarily meaningful and should not be relied upon as an indication of future performance. However, the company reports that for the three months ended September 30, 1999 compared to the three months ended September 30, 1998, net loss increased to $(16.7) million versus $(9.4) million, or 77%, primarily due to a decrease in operating loss, offset by the write-off of capitalized bond issuance costs, reduced interest income and an increase in recorded currency exchange loss. Net loss for the nine months ended September 30, 1999 increased from $(29.2) million to $(61.8) million, or 111%. For the three months ended September 30, 1999 compared to the three months ended September 30, 1998, revenues decreased by 45%, to $6.1 million from $11.0 million, primarily due to an average devaluation of the REAL of 62% between the periods. Revenues for the nine months ended September 30, 1999 decreased by 45% compared to the nine months ended September 30, 1998, due primarily to an average devaluation of the REAL of 57% between the periods. In both cases, the revenue decrease was partially offset by revenues from the company's proprietary premium channel and high-speed Internet service. UNITEL VIDEO: Intends To File Unaudited Operating Reports --------------------------------------------------------- On November 24, 1999, Unitel Video, Inc. submitted to the Securities and Exchange Commission a request to confirm that the Commission would not recommend enforcement action against the company if it implements modified reporting procedures described in its request. Accordingly, Unitel Video does not intend to file an annual report for the fiscal year ended August 31, 1999. In lieu thereof, the company intends to file with the Commission certain unaudited operating reports that it is required to file with the United States Bankruptcy Court for the District of Delaware. Further, during the pendency of the company's proceedings under Chapter 11 of Title 11 of the United States Code (until the effectiveness of the company's plan of reorganization), Unitel Video currently does not intend to file with the Commission any annual or quarterly reports. In lieu thereof, the company intends to file with the Commission certain unaudited operating reports that it is required to file with the Bankruptcy Court. Due to the events preceding the company's filing under the Bankruptcy Code and the financial distress of the company, the company did not report, in a current report, on the disposition of an amount of assets during July 1999 which was likely "significant". The company indicates it is currently in the process of determining whether a current report was required to have been filed in connection with this disposition; if and when the company determines that such a filing was required, it will make such a filing. VERTEX COMPUTER: Reports Delay in Filing Financial Statement ------------------------------------------------------------ Vertex Computer Cable & Product will delay filing the most recent financial statements with the Securities and Exchange Commission. While the company's auditors are currently in the review process the company has requested an extension from the SEC for the filing of its quarterly report. Vertex states that due to replacing its computer system in an effort to become Y2K compliant the necessary financial information has yet to be finalized. WESTSTAR CINEMAS: Seeks Court Approval of $90M Sale of Assets ------------------------------------------------------------- WF Cinema has agreed to acquire the debtors' assets for a purchase price of $90 million in cash; an additional $1 million payable on the closing date, and the payment by WF of all sums owing with respect to the DIP Financing, and all cure claims. WF Cinema will pay taxes due and certain unpaid liabilities. Viacom and Time Warner have executed guaranties of certain of WF Cinema's obligations under the Asset Purchase Agreement. One contingency of the agreement is that the closing date of the sale is January 31, 2000. Overbids of $95 million will be considered, and will proceed in increments of $1 million until the highest bid emerges. A break-up fee is provided to WF Cinema in the amount of $1 million. The debtors assert that the purchase price is fair and reasonable. In addition to the proposed sale agreement, the parties have entered into a Management Agreement regarding specified theatres, which agreement is also before the court. BOND PRICING FOR WEEK OF DECEMBER 6 =================================== DLS Capital Partners, Inc., bond pricing for week of December 6, 1999 Following are indicated prices for selected issues: Acme Metal 10 7/8 '07 12 - 15 (f) Amer Pad & Paper 13 '05 8 - 12 (f) Asia Pulp & Paper 11 3/4 '05 80 - 82 E & S Holdings 10 3/8 '06 35 - 38 Fruit of the Loom 8 7/8 '06 7 - 8 Geneva Steel 11 1/8 '01 11 - 13 (f) Globalstar 11 1/4 '04 62 - 64 Hechinger 9.45 '12 12 - 14 (f) Integrated Health 9 1/2 '07 7 - 9 (f) Iridium 14 '05 6 - 7 (f) Loewen 7.20 '03 52 - 54 (f) Pillowtex 10 '06 38 - 42 Planet Hollywood 12 '05 28 - 30 (f) Purina Mills 9 '10 24 - 26 (f) Revlon 0 '01 21 - 23 Rite Aid 6.70 '01 84 - 86 Sunbeam 0 '18 15 - 16 TWA 11 3/8 '06 40 - 42 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. 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 * * *