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/raid1/www/Hosts/bankrupt/TCR_Public/991221.MBX T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, December 21, 1999, Vol. 3, No. 245 Headlines AMERICAN TRACK: Chapter 11 Trustee Moves for Conversion ARM FINANCIAL: Sale to Occur Soon in Prepackaged Bankruptcy Case AQUAGENIX, INC.: Judge Ray Doles-Out Brief Exclusivity Extension BELL GEOSPACE: Interim Okay to Use Imperial's Cash Collateral BREED TECHNOLOGIES: Shares Agony of Deconsolidating Schedules CAMBIOR, INC.: Agnico-Eagle Eyes Troubled Miner for Takeover CENCOR, INC.: Plan Change Allows for Small Shareholder Recovery CLARIDGE HOTEL: 4th Order Allowing Continued Cash Collateral Use CODON PHARMACEUTICALS: Keeping Any Competing Plans at Bay CRIIMI MAE: Judge Looks for Dec. 23 Disclosure Statement Filing DISCOVERY ZONE: Lease Buy-Back Extracts $300,000 from Landlord DISCOVERY ZONE: Estate Still Has Two Leases With Potential Value EDISON BROTHERS: $200K Bonuses to Retain 20 Wind-Down Employees FRUIT OF THE LOOM: Former President Holland Returns to Assist FWT, INC.: Noteholder Committee Needs to See Final Documents GENERAL RENTAL: Case Summary & 20 Largest Unsecured Creditors GENESIS DIRECT: MCI Negotiates for 48-Hour Disconnect Notice GREATE BAY: UST to Probe & Explore Ernst & Young's Relationships HARNISCHFEGER: Committee Inquires About $300M AP&P Arbitration HEALTHCOR HOLDINGS: Jackson Healthcare Works as Collection Agent HVIDE MARINE: Tanker Operator Emerges from Chapter 11 ICO GLOBAL: Nasdaq Delists Shares INCOMNET, INC.: Ironwood Takes Assignment of Foothill DIP Loan INCOMNET, INC.: Ironwood Backs Retention Program & Exclusivity JAY JACOBS: Committee Selects Attorneys & Accountants JUST FOR FEET: Universal Capital Wins Bid for $12 Mil GOB Sale JUST FOR FEET: Bankruptcy Services LLC to Serve as Claims Agent KMART CORPORATION: Puts $1.7 Billion in New Financing in Place LONG-TERM CAPITAL: To Fold After Repayment of Bail-Out Loans MALIBU ENTERTAINMENT: Discloses Cash Won't Last Until Year-End MERIDIAN CORPORATION: Hasn't Paid a Dime to IBM Postpetition MONDI OF AMERICA: Needs Bar Date Set to File Plan by January 18 MONDI OF AMERICA: Creditors to Gather in Wilmington January 7 NAYA, INC.: Canadian Water-Bottler Says Orders are Being Filled NEI WEBWORLD: Pump & Dump Scheme Propels Bankrupt Firm's Stock NEWCARE HEALTH: Judge Fixes January 28 Bar Date NOVACARE, INC.: Sale to Select Medical Likely Nets $10 Million OPTEL, INC.: Closes on $60 Million CIT/Foothill DIP Facility PICO MACOM: UST Calls Creditors to Woodland Hills on January 18 PLANET HOLLYWOOD: Assumes Walt Disney Leases in Orlando & Paris PURINA MILLS: Resuming Purchasing Activities from St. Louis SABRATEK CORP.: Commences Chapter 11 Reorganization in Delaware SGL CARBON: 2nd Amended Plan Transmitted to Creditors for Voting SYRATECH CORP.: Warehouse Sale-Leaseback Generates $29.1 Million TELETRAC, INC.: Stipulation Fixes 14% Senior Note Claim Amount VOICE IT: Case May Convert if No Plan is Filed by December 30 WESTSTAR CINEMAS: Committee Makes Bid for Chapter 11 Trustee Meetings, Conferences and Seminars ********* AMERICAN TRACK: Chapter 11 Trustee Moves for Conversion ------------------------------------------------------- Robert H. Slone, the Chapter 11 Trustee of the Estate of American Track Systems International, Inc., moves the United States Bankruptcy Court for the District of Delaware for entry of an order converting American Track's reorganization proceeding to a liquidation under chapter 7 of the Bankruptcy Code. Since his appointment as the Chapter 11 Trustee, Mr. Slone has sold virtually all of the Estate's tangible assets. Mr. Slone is convinced that distribution of the proceeds of estate assets under Chapter 7 of the Bankruptcy Code will be more economical than a distribution through a Chapter 11 plan process. Judge Walrath will consider the Trustee's Motion at a hearing scheduled for January 12, 2000. ARM FINANCIAL: Sale to Occur Soon in Prepackaged Bankruptcy Case ---------------------------------------------------------------- ARM Financial Group, Inc. (OTC Bulletin Board: ARMGA) signed a definitive agreement whereby Western and Southern Life Insurance Company will acquire the Company's insurance subsidiaries, Integrity Life Insurance Company and National Integrity Life Insurance Company. The acquisition by Western and Southern will be implemented in a chapter 11 case to be commenced by ARM under the Bankruptcy Code, subject to the approval of the Bankruptcy Court. Under the terms of the agreement, the purchase price of approximately $119 million, which is subject to a number of downward price adjustments, will be placed in an escrow account for a period of eighteen months or longer before any remaining proceeds would be distributed. In connection with the Western and Southern transaction, ARM has also entered into settlement agreements with certain institutional creditors of ARM and Integrity whereby, among other things, certain obligations and contingent liabilities of ARM and its subsidiaries would be extended, released or compromised, subject to the closing of the transaction with Western and Southern. To the extent that there are funds remaining in escrow after any downward purchase price adjustments, certain payments will be made to institutional creditors for a portion of the obligations that were extended, released or compromised. There can be no assurance that the net proceeds from the sale (after taking into account the purchase price adjustments and the escrow provisions relating to the institutional settlement agreements) will be sufficient to satisfy the claims of the Company's creditors or enable a distribution to shareholders. The Company expects to file a Form 8-K with the Securities and Exchange Commission as soon as possible with respect to these transactions. "We are pleased that we have reached an agreement with Western and Southern, one of the highest rated companies in the industry today," said John R. Lindholm, president -- Integrity Life Insurance Company. "This transaction provides enhanced value for Integrity and National Integrity policyholders. After the closing, we would anticipate a dramatic improvement in our credit ratings. We are particularly grateful to our distributors and policyholders who have remained loyal and patient throughout this process. Ohio Insurance Director Lee Covington and his staff have been invaluable in facilitating this sale. Likewise, New York Superintendent of Insurance Neil Levin and his staff have been tremendously supportive throughout this process." The closing of the transaction is subject to the approval of the Ohio Department of Insurance, the New York Department of Insurance, and the Bankruptcy Court, as well as to other customary conditions to closing. The transaction is expected to close late in the first quarter of 2000; however, there can be no assurance as to obtaining the required approvals or the timing of the closing of the transaction. ARM Financial Group, Inc. -- with a Web site at http://www.armfinancial.com-- provides annuities through its insurance subsidiaries, Integrity Life Insurance Company and National Integrity Life Insurance Company. Retail face-amount certificates are issued through SBM Certificate Company. ARM Securities Corporation provides broker and product support. ARM Financial Group, Inc. is headquartered in Louisville, Kentucky. Western and Southern is part of the Western-Southern Enterprise, a financial services group which also includes Western-Southern Life Assurance Company, Columbus Life Insurance Company, Touchstone Advisors, Fort Washington Investment Advisors, Todd Investment Advisors, Countrywide Financial Services, Capital Analysts and Eagle Realty Group. Assets owned or under management by the group exceed $20 billion. Upon completion of this transaction, such assets will total $25 billion. Western and Southern is rated A++ (Superior) by A.M. Best, AAA (Highest) by Duff & Phelps, AAA (Extremely Strong) by Standard & Poor's, and Aa2 (Excellent) by Moody's. AQUAGENIX, INC.: Judge Ray Doles-Out Brief Exclusivity Extension ---------------------------------------------------------------- Considering the request by Aquagenix, Inc., and Aquagenix Land Water Technologies, Inc., for an extension of their exclusive periods during which to file and solicit acceptances of a plan of reorganization, Judge Raymond B. Ray determined that a short extension would be appropriate but a longer extension will require further consideration. Accordingly, Judge Ray will entertain a Second Motion for an extension of the Debtors' exclusive periods at a hearing tomorrow, as he simultaneously considers the merits of entering a final order authorizing the Debtors' use of their Lenders' cash collateral and an agreement to provide the Lenders with adequate protection. Chad P. Pugtach, Esq., represents the Debtors from his office in Fort Lauderdale, Florida. BELL GEOSPACE: Interim Okay to Use Imperial's Cash Collateral ------------------------------------------------------------- Imperial Bank and Bell Geospace, Inc., entered into a Starter Kit Loan and Security Agreement in 1998 to finance certain receivables, including $466,000 owed by Texaco. At the time of Bell's chapter 11 filing in Delaware, Bell owed Imperial roughly $1.2 million. Unless it was provided with adequate protection of its security interest, Imperial was unwilling to permit Bell use of any monies collected on account of those receivables. Bell "has an immediate and continuing need to use the Cash Collateral in order to avoid immediate and irreparable harm to its business," attorneys from Connolly Bove Lodge & Hutz LLP, representing Bell, argued in Bankruptcy Court last week before Judge Walrath. Pending a final hearing on January 7, 2000, Judge Walrath ruled that Bell will be allowed to continue using Imperial's cash collateral because Imperial's security interests, she found, are adequately protected by an equity cushion. To provide Imperial with further comfort, Judge Walrath directs that Imperial be granted a replacement lien for all cash collateral used by Bell post-petition. BREED TECHNOLOGIES: Shares Agony of Deconsolidating Schedules ------------------------------------------------------------- Because of (a) the substantial size and scope of their businesses, (b) the complexity of their financial affairs, (c) the limited staffing available to perform an internal review of their accounts and affairs, and (d) the press of business incident to the commencement of their chapter 11 cases, BREED Technologies, Inc., and its 16 debtor-affiliates tell the Bankruptcy Court in Delaware that it will not be possible to assemble, prior to January 3, 2000, all of the information necessary to complete and file Schedules of Assets and Liabilities and Statements of Financial Affairs on an entity-by- entity basis. BREED asks Judge Walrath to extend their time to file entity-by- entity Schedules and Statements to February 2, 2000. The Debtors remind Judge Walrath that they filed Consolidated Schedules and Statements on December 6, 1999. BREED indicates that the United States Trustee does not oppose the requested extension, so long as the Debtors agree to cooperate with all reasonable requests from creditors for information pertaining to their particular claim. "The Debtors represent that they will respond promptly to all such requests," Mary F. Caloway, Esq., of Duane, Morris & Hechscher LLP in Wilmington assures Judge Walrath. Separately, BREED asks for a further extension of its time within which to remove, pursuant to 28 U.S.C. Sec. 1452, pre- petition lawsuits pending in Courts outside of the District of Delaware to the District of Delaware to the latest to occur of (a) March 20, 2000 or (b) the day which is 30 days after entry of an order terminating the automatic stay with respect to the particular action sought to be removed. CAMBIOR, INC.: Agnico-Eagle Eyes Troubled Miner for Takeover ------------------------------------------------------------ Writing for Reuters from Toronto, Scott Anderson reports that Canadian gold miner Agnico-Eagle Ltd., flush with cash after securing a long-term loan, indicates it is eyeing one of the crown jewels of troubled miner Cambior Inc. Montreal-based Cambior has been hit hard by the volatile price of gold and is struggling to refinance its debt and reorganize its operations. Agnico-Eagle is in a good position to make acquisitions after it said Thursday it had closed a $100-million, 8-year bank facility with a syndicate of banks. The rich Doyon mine is particularly appealing to Agnico-Eagle which has mined next door for more than 30 years. Cambior produced 463,000 ounces of gold in the first nine months of 1999, with Doyon accounting for 180,000 ounces. "If we're given the opportunity, I think we'd have to (consider the property)," David Garofalo, Agnico-Eagle's vice-president of finance told Reuters. "We'd have to because it's in our belt and nobody can evaluate the property better than we can...Given that their prime asset is right on our belt, there's a good possibility that if given the opportunity, we will kick the tires." Garofalo tells Mr. Anderson there had been no talks with Cambior on a possible deal. But he said he expected Cambior, which two months ago hired financial adviser Bunting Warburg Dillon Read Inc. to look at ways to boost shareholder value, including possible asset sales, will step up its courtship with mining firms in the New Year. Agnico-Eagle's new facility is secured by a first charge on its LaRonde Mine and is intended partly to finance capital costs related to the expansion of the LaRonde Mine to 5,000 tons per day and partly for general corporate purposes. Agnico-Eagle said a first tranche of $75 million would be made available over the next 15 months as key construction and ore reserve conversion milestones are met. A second tranche of $25 million will also be made available, at the company's option. The banks also provided for up to $75 million of 8-year credit lines for metal price, interest rate and foreign exchange hedging. "It certainly gives us fodder to expand and to grow and potentially acquire things," Garofalo said of the loan. Meanwhile, Cambior is trying get its house in order through restructuring which sparked rumors that its creditors would push for the unbundling of the company's mines to be sold as smaller packages to medium-sized mining companies. Cambior spokeswoman Victoria Putnam refused to say at what phase the reorganization stood. But, the miner did say that the options could include the sale of substantial gold and base metal assets, a corporate transaction, or reorganization resulting in the sale of gold assets or base metal assets. CENCOR, INC.: Plan Change Allows for Small Shareholder Recovery --------------------------------------------------------------- The United States Bankruptcy Court for the Western District of Missouri, Western Division, approved a Second Motion to Modify the Prepackaged Plan of Reorganization for CenCor, Inc. The amendment comes nearly five years after CenCor (a consumer finance concern) obtained confirmation of its prepackaged plan. The Second Modification provides that, if a holder of a New Note has failed to tender his New Note to the Trustee or CenCor on or before July 1, 2001, the New Note shall become null and void, and any unclaimed principal related to such New Note shall become the property of and shall be released to CenCor (or any liquidating trust established as the successor to CenCor) for distribution to CenCor's shareholders. CLARIDGE HOTEL: 4th Order Allowing Continued Cash Collateral Use ---------------------------------------------------------------- The Claridge at Park Place, Incorporated, and The Claridge Hotes and Casino Corporation have the consent of their secured lenders, represented by Norman K. Kinel, Esq., and Hollace T. Cohen, Esq., of Whitman Breed Abbott & Morgan LLP, to continue using cash collateral through December 17, 1999, under the terms of a Fourth Interim Consent Order presented to Judge Judith H. Wizmur in the U.S. Bankruptcy Court for the District of New Jersey. The Claridge's use of their Lenders' cash collateral may not vary by more than 10% of a budget estimating: Week Ending Week Ending Dec. 10, 1999 Dec. 17, 1999 ------------- ------------- Cash inflows $2,740,000 $2,540,000 Cash outflows $3,817,800 $2,741,685 CODON PHARMACEUTICALS: Keeping Any Competing Plans at Bay --------------------------------------------------------- Codon Pharmaceuticals, Inc., and Oncor, Inc., ask Judge Farnan to extend their exclusive period during which to solicit acceptances of their Second Amended Chapter 11 Plans of Liquidation through February 29, 2000. The Debtors remind Judge Farnan that their Joint Disclosure Statement was approved on November 15, 1999 and the Court scheduled a confirmation hearing for January 12, 2000. The Debtors have no particular reason to believe that confirmation will be derailed, but they don't want to be distracted from continued negotiation with their Creditors' Committee by the fear that someone is out there soliciting support for a competing plan. "The Debtors merely desire to maintain the status quo, while continuing to work with the Committee to confirm their plans," says Edwin J. Harron, Esq., of Young Conaway Stargatt & Taylor LLP, counsel to Codon and Oncor. CRIIMI MAE: Judge Looks for Dec. 23 Disclosure Statement Filing --------------------------------------------------------------- Judge Duncan W. Keir in the U.S. Bankruptcy Court for the District of Maryland granted Criimi Mae, Inc., and its affiliates a one-week extension, through Dec. 23, to file their proposed disclosure statement. The company requested the extension as they finalize the proposed treatment under an Amended Plan of two of their largest secured creditors: Merrill Lynch Mortgage Capital, Inc., and German American Capital Corporation. Under the Amended Plan, Merrill Lynch and GACC will continue as secured lenders to Reorganized CMI. The continuation of these loans are a cornerstone of CMI's Amended Plan of Reorganization, Richard Wasserman, Esq., of Baltimore-based Venable, Baetjer and Howard, LLP, relates. "The Debtors believe that the Official Committee of Equity Security Holders of CMI will be supporting the Amended Plan," advises Stanley J. Samorajczyk, Esq., of Akin, Gump, Strauss, Hauer & Feld, L.L.P., in Washington, D.C., explaining that this short extension will allow last-minute changes in the documents to catch-up with last-minute negotiations necessary to wind-up this just-over-a-year-old chapter 11 proceeding. DISCOVERY ZONE: Lease Buy-Back Extracts $300,000 from Landlord -------------------------------------------------------------- Rosana Square Partnership leases property located in Overland Park, Kansas, to Discovery Zone, Inc., under a 1992 Lease Agreement. The Debtors have no use for the property, having closed-up their FunCenters and sent their employees home. Rosana wants the property back while the Debtors want to market the below-market rental rates offered under the Lease Agreement. Opening its check book, Rosana offers to pay DZONE $300,000 to recapture its property. Subject to higher and better offers to be submitted by December 27, 1999, DZONE agrees to vacate and surrender the Overland Park Property to Rosana. Brendan Lineham Sannon, Esq., of Young Conaway Stargatt & Taylor LLP represents DZONE in its chapter 11 proceeding. DISCOVERY ZONE: Estate Still Has Two Leases With Potential Value ---------------------------------------------------------------- Discovery Zone, Inc., and its 3 affiliated debtors terminated their business operations in June 1999, and, since that time, the Company has sold substantially all of its assets. DZONE still has two unexpired non-residential real property leases kicking around. To avoid premature assumption of those Leases, triggering needless administrative priority claims, and to avoid premature rejection of the Leases, risking the loss of value extractable in an assumption and assignment transaction, the DZONE asks Judge Farnan to extend the date by it must decide whether to assume or reject the Leases to February 17, 2000. EDISON BROTHERS: $200K Bonuses to Retain 20 Wind-Down Employees --------------------------------------------------------------- Edison Brothers Stores, Inc., and its 7 affiliated debtors, as previously reported in the TCR, ceased operation of all retail stores and completed transactions for the assumption and assignment, rejection or other disposition of virtually every retail store lease by July 30, 1999. At this time, Edison is primarily engaged in the disposition of their remaining assets and the reconciliation of filed proofs of claim. In April 1999, as detailed in the TCR, Edison obtained approval of a Key Employee Retention & Severance Program. That Program contemplated continued service by vital employees for a 3 to 12 month period. The Debtors project they will need to continue employing 20 individuals through January 8, 2000 and 8 individuals through April 8, 2000, in order to complete a winding-down of the business. Accordingly, Edison asks Judge Walrath to (A) extend the Key Employee Retention & Severance Program through April 2000 and (B) authorize payment of Retention Bonuses equal to one month's salary on January 8, 2000 and April 8, 2000. The Debtors estimate these additional Retention Bonuses will cost $200,000. FRUIT OF THE LOOM: Former President Holland Returns to Assist ------------------------------------------------------------- Fruit of the Loom, Ltd. (NYSE: FTL) announces the appointment of John B. Holland to the Board of Directors. The Board also announced Mr. Holland's appointment as Executive Vice President of Operations. Mr. Holland, the Company's former President and Chief Operating Officer for over twenty years from the mid- seventies to the early nineties, had rejoined the Company in October of this year to consult with Dennis Bookshester, the Acting Chief Executive Officer and to oversee the Company's manufacturing operations and completion of its 2000 business plan. On behalf of the Board, Dennis Bookshester commented that, "We are grateful to John for his willingness to rejoin the Company at this critical time. John's knowledge and experience will be instrumental in helping the Company achieve its business plan." In October, FTL announced that Mr. Holland rejoined the Company to consult with Dennis Bookshester, the Acting Chief Executive Officer, to oversee the Company's manufacturing and completion of its 2000 business plan. FTL additionally announced at that time that it had reached agreement with its syndicated bank group on a waiver of the financial covenants under the Company's senior credit agreements through January 31, 2000, and signed a commitment with a new lender to replace the current receivables backed facility. The new receivables backed facility, FTL related, subject to a definitive purchase agreement and other documentation satisfactory to the new lender as well as normal representations and warranties customary with similar financings, will not be subject to credit rating defaults. Further, in October, the Company reported that its final bond payment with respect to its 7 7/8% unsecured senior notes of approximately $45 million, and the Company's other obligations with respect to its 8 7/8% senior notes and other debt agreements were made as scheduled. FWT, INC.: Noteholder Committee Needs to See Final Documents ------------------------------------------------------------ Joseph F. Postnikoff, Esq., of McConnell & Goodrich in Fort Worth, Texas, serving as local counsel to the Official Committee of Noteholders appointed to represent the interests of the holders of $105 million of 9-7/8% Senior Subordinated Notes due 2007 tell the Honorable Massie Tillman that the Committee must see final versions of corporate documents for Reorganized FWT, Inc., before they can walk arm-in-arm with FWT into an uncontested confirmation hearing. The Committee has asked for the documents and the Disclosure Statement filed by the Debtors in support of the Second Amended Plan of Reorganization for FWT, Inc., dated as of November 16, 1999, says the documents will be provided to the Committee. For whatever reason, they haven't arrived. In all events, if FWT wants to confirm its plan and take it effective on December 31, 1999, the Committee needs the documents ASAP. Wendell H. Adair, Jr., Esq., and Mindy A. More, Esq., of Stroock & Stroock & Lavan's office in New York, serve as lead counsel to the Noteholders' Committee. GENERAL RENTAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: General Rental, Inc. 2101 N.W. 33rd Street Suite 500 Pompano Beach, Florida 33069 Type of Business: Rental company Petition Date: December 16, 1999 Chapter: 11 Court: District of Deleware Judge: Walrath Debtor's Counsel: Barry N. Seidel, Esq. Joseph H. Smolinsky, Esq. Sonnenschein Nath & Rosenthal 1221 Avenue of the Americas, 24th Floor New York, New York 10020-1089 David Peress, Esq. Young, Conway, Stargatt & Taylor P.O. Box 391 11th Floor Rodney Square North Wilmington, Delaware 19899 Total Assets: Between $1.1 million to $50 million Total Debts: Between $1.1 million to $50 million 20 Largest Unsecured Creditors: Bank of America Revolving Loan $9,037,918 Associates Commercial Corp. Equipment Financing $4,732,754 Ingersoll-Rand Company Equipment Financing $1,483,667 American Equipment Leasing Equipment Financing $1,110,340 Multiquip, Inc. Trade $1,062,937 Charles W. Jones Promissory Note $798,082 The Stanley Works Rent $660,587 Pincorp, Inc. Promissory Note $508,786 Withrop Resources Corp. Lease $474,044 Hood Management Services, Inc. Promissory Note $393,900 Southern Rental Services, Inc. Promissory Note $287,301 Clay County Rentals, Inc. Promissory Note $284,882 Lew Hudson & Associates, Inc. Equipment Financing $278,788 TrueServe Corporation Trade $248,681 Alto US, Inc. Trade $245,292 Bruce Norman Non-compete Contract $233,000 Inter/National Rental Insurance Insurance Premiums $192,160 Mike Sorell Non-compete Contract $161,644 Sam H. Tagliarino Non-compete Contract $154,297 US Markets, Inc. Lease $144,949 GENESIS DIRECT: MCI Negotiates for 48-Hour Disconnect Notice ------------------------------------------------------------ Catalog retailer Genesis Direct, Inc., and its twenty-some debtor-affiliates whose chapter 11 cases pend before Judge Gambardella in Newark, New Jersey, agrees to provide MCI WorldCom, Inc., MCI TelecommunicationsCorporation and their affiliates, with (i) an immediate $300,000 cash payment, (ii) $80,000 bi-weekly payments and (iii) every 15-day true-ups, in order to provide MCI with adequate assurance of future payment pursuant to 11 U.S.C. Sec. 366. Under a Stipulation approved by Gambardella, all payments must be delivered by wire transfer. If payments are not received on time, MCI may pull the plug on Genesis' telecommunication services on 48 hours' notice. Kurt F. Gwynne, Esq., and Robert P. Simons, Esq., of Klett Lieber Rooney & Schorling, represent MCI's interests in Genesis' cases. GREATE BAY: UST to Probe & Explore Ernst & Young's Relationships ---------------------------------------------------------------- Connections between Ernst & Young LLP; E&Y Restructuring, LLC; Greate Bay Hotel and Casino, Inc., and its debtor-affiliates; parties-in-interest in Greate Bay's chapter 11 cases, including Park Place Entertainment Corp., Merrill Lynch and Merrill Lynch Asset Management, and everybody's attorney, accountants, and financial advisors "must be probed and explored and require additional disclosure," Richard L. Schepacarter, Esq., an Attorney-Advisor to Patricia A. Staiano, the United States Trustee for Region III, tells Judge Judith H. Wizmur sitting in the United States Bankruptcy Court for the District of New Jersey, before the Department of Justice can consent to allowing Greate Bay's official committee of unsecured creditors to retain E&Y as its accountants. The U.S. Trustee's objection is preliminary, Mr. Schepacarter cautions, as "there are several factual issues that must be explored and expanded upon." Fee sharing, fee splitting, and violation of 11 U.S.C. Sec. 504, are among the evils the U.S. Trustee sees in E&Y's retention application and affidavits in support thereof. Expect extensive discovery, Mr. Schepacarter hints, and "a more formal objection upon the completion of discovery." Samuel E. Star leads E&Y Restructung LLC's engagement from New York. HARNISCHFEGER: Committee Inquires About $300M AP&P Arbitration -------------------------------------------------------------- The Official Committee of Unsecured Creditors for Harnischfeger Industries Inc. asked Judge Walsh in Delaware late last week to direct Beloit Corp. to produce documents concerning a $300 million arbitration proceeding pending in Singapore. The claim related to Beloit's 1996 sale of papermaking machines to Asia Pulp & Paper. HEALTHCOR HOLDINGS: Jackson Healthcare Works as Collection Agent ---------------------------------------------------------------- Jackson Healthcare Systems, Inc., landed a contract with HealthCor Holdings, inc., and its 7 affiliated chapter 11 debtors, for collection of outstanding receivables owed to the Debtors. Prior to the Petition Date, Jackson purchased a portion of the Debtors' operations. Picking-up the collection work is a good fit that makes good business sense, the Debtors relate in their Motion papers presented to Judge McGuire in Dallas. Tempe, Arizona-based Jackson and the Debtors agree that Jackson will earn a one-third contingency fee on all receivables actually collected. HVIDE MARINE: Tanker Operator Emerges from Chapter 11 ----------------------------------------------------- As reported last week in the TCR, Hvide Marine, Inc., obtained bankruptcy court approval of its Plan of Reorganization that restructures the company's balance sheet and frees the company from the stigma of the chapter 11 process. How does the Plan work; what did it actually do? Here's a brief explanation: With a fleet of 274 vessels, operating primarily in the energy and chemical industries, Hvide will be reincorporated in Delaware but will retain its corporate offices in Fort Lauderdale, Fla. The company will continue to be led by existing management but a new board will be elected by the new shareholders. Who are those new shareholders? The old creditors owed roughly $430 million. To finance on-going working capital needs, a consortium of lenders led by Deutsche Bank structured a new credit agreement. "We have put Chapter 11 behind us and, in the process . . . reduced overhead costs substantially," said Jean Fitzgerald, chairman, president and chief executive. "While much has been accomplished, much remains to be done." More information about Reorganized Hvide is available at http://www.hvide.comon the Company's Web site. ICO GLOBAL: Nasdaq Delists Shares --------------------------------- After suspending trading of shares in ICO Global Communications Ltd., on August 27, 1999, the Nasdaq issued a statement last week relating that the share are delisted as of December 16, 1999. INCOMNET, INC.: Ironwood Takes Assignment of Foothill DIP Loan -------------------------------------------------------------- Incomnet, Inc., and Incomnet Communications Corporation commenced their chapter 11 cases in September 1999, and entered into a DIP Financing pact with Foothill Capital Corporation. Under the $6,000,000 DIP Facility, Foothill requires the Debtors to (a) secure a $3,000,000 capital infusion by November 22, 1999, (b) file a plan of reorganization by December 1, 1999, (c) and pay-off the DIP Facility by February 28, 2000. The Debtors didn't secure the $3 million infusion; the remaining deadlines won't be met. Incomnet's option, in the event it is unable to meet these deadlines, is, pursuant to the DIP Credit Agreement, to file a motion to liquidate by January 15, 2000. Well past the eleventh-hour, Ironwood Telecom, LLC, stepped forward with the solution to save Incomnet from a fire sale of its assets: take an assignment of Foothill's claims. Ironwood provided Incomnet, Inc., with a $17 million cash infusion in November 1998 to payoff a bank loan, a loan to MCI/Worldcom and provide Incomnet with working capital for ongoing operations. In connection with the extension of those funds by way of a secured loan, Incomnet purchased preferred stock in Incomnet for $1,175,000 and loaned an additional $2,125,000 to John Casey, the Chairman of Incomnet's parent, ICC, Inc., so he could buy some preferred stock. Ironwood now agrees to step-in to Foothill's shoes, waive the currently- problematical defaults under the DIP Facility and, in short, establish a control position at nearly every layer of Incomnet's capital structure. Based in Irvine, California, Incomnet is a switchless reseller, providing some 92,000 consumers and small businesses with discount long-distance telephone service. Annual sales exceed $30 million, and the company employs 126 workers. During their chapter 11 cases, Incomnet has succeeded in negotiating a new, favorable rate agreement with Worldcom Network Services, Inc., walked away from a host of burdensome contracts, cutting monthly operating expenses by $250,000, and reducing the employee headcount to save another $173,000 per month. To boost revenue, the company is focused on a more lucrative e-commerce strategy and a multi-level marketing structure. Upon assignment of the DIP Facility from Foothill to Ironwood, Ironwood will advance an additional $1.4 million under the DIP Facility. The Company is confident that its cost-cutting measures and newly-discovered source of funding will pave the way to a successful emergence from chapter 11. Lee R. Bogdanoff, Esq., of Klee, Tuchin & Bogdanoff LLP in Los Angeles represent the Debtors before the U.S. Bankruptcy Court for the Central District of California, Santa Ana Division. INCOMNET, INC.: Ironwood Backs Retention Program & Exclusivity -------------------------------------------------------------- Ironwood Telecom, LLC, the newly-discovered source of financing that stepped forward to prevent a wholesale liquidation of Incomnet, Inc., and Incomnet Communications Corporation, advises Judge Ryan that it lends its full support to the Incomnet's requests to (A) implement an Employee-Incentive Program and (B) extend Incomnet's exclusive period during which to file a plan of reorganization into the first quarter of 2000. "Ironwood believes that the employee-inventive program . . . is necessary to the cintinued smooth operations of the Debtor and retention of key personnel," says Mary H. Rose, Esq., of Proskauer Rose LLP in Los Angeles, serving as counsel to Ironwood. Moreover, Ms. Rose adds, "sufficient funds are available to fund the Incentive program, and the amounts involved are relatively modest in light of the Debtors' successful post-petition operating performance." The 90-day extension of the Debtors' exclusive period is "reasonable and justified," Ironwood says, as "the Debtors are engaged in active discussions with Ironwood, other creditors, the Creditors' Committee, and potential investors regarding the terms of a plan of reorganization. In Ironwood's opinion, these discussions are progressing toward formulation of a feasible reorganization plan." As the creditor with the most at stake in these chapter 11 cases, Ironwood urges the Court to grant these two Motions in every respect, Ms. Rose tells Judge Ryan. JAY JACOBS: Committee Selects Attorneys & Accountants ----------------------------------------------------- The Official Unsecured Creditors' Committee appointed in the second round of chapter 11 cases commenced by Seattle, Washington-based Jay Jacobs, Inc., and J.J. Distributing Company advises Judge Glover that it has selected its professionals. Accordingly, the Committee asks for permission to retain: Lead Counsel Robert Ezra, Esq. Ezra & Brutzkus, APC Encino, California Local Counsel Lawrence R. Ream, Esq. Bullivant Houser Baily, P.C. Seattle, Washington Accountants Larry Jacobs Stonefield Josephson, Inc., CPAs Santa Monica, California Terms of the engagements between the Committee and its professionals were not available at press time. JUST FOR FEET: Universal Capital Wins Bid for $12 Mil GOB Sale -------------------------------------------------------------- Universal Capital Group prevailed at an auction held on December 16, 1999, in the U.S. Bankruptcy Court for the Southern District of Ohio, when it submitted the winning bid to manage the inventory liquidation, approximating $12 million, for six Ohio- based Just for Feet superstore retail outlets. Minneapolis- based Universal Capital will conduct going-out-of-business sales at four outlets in Columbus, Ohio and one outlet each in Dayton and Cincinnati, Ohio. MBA Marketing Corporation, headquartered in Columbus, filed a petition for Chapter 11 relief on November 2nd, 1999, after a prolonged dispute with former franchisor, Just For Feet. MBA Marketing changed the name of its stores last fall to 1st FOR FEET and in November began liquidating four locations in the Dayton and Cincinnati area, with the goal to develop a reorganization plan for the remaining six outlets in Ohio. MBA Marketing, which opened its first Just For Feet outlet in Columbus in 1990, retails a broad array of high-quality name brand sports merchandise including footwear and apparel from such famous makers as Nike, Reebok, Adidas and Asics to ECCO, Timberland and Rockport. Mike Catain, Universal Capital Group President and COO, said, "It is unfortunate that MBA Marketing was unable to develop a successful reorganization plan to operate the remaining six Ohio Just for Feet stores. We are, however, confident that we can assist them in efficiently handling the going-out-of-business sales. Our role is two-fold: one, to liquidate all merchandise as quickly as possible and two, equally important, ease the transition for the fine associates at Just for Feet, many of whom have been employed by the retailer for years." Company officials said the sale started Friday, December 17, 1999 and will continue until all merchandise is liquidated. Universal Capital said that it retained a number of store employees to handle the GOB sales and that financial incentives and job-placement assistance will be provided for those employees retained to handle the store closing process. JUST FOR FEET: Bankruptcy Services LLC to Serve as Claims Agent -------------------------------------------------------------- Ron Jacobs advises that Bankruptcy Services LLC was selected to serve as the Official Claims Agent in the chapter 11 cases commenced by Just for Feet, Inc., et al., before the U.S. Bankruptcy Court for the District of Delaware. "The debtors estimate that they have thousands of creditors," Alan B. Miller, Esq., and Adam C. Rogoff, Esq., of Weil, Gotshal & Manges LLP, advise Judge McKelvie. The Debtors' estates will pay all of Bankruptcy Services' transaction, data processing and documents and data storage fees, under the terms of an agreement dated December 7, 1999. KMART CORPORATION: Puts $1.7 Billion in New Financing in Place -------------------------------------------------------------- On December 6, 1999, Kmart Corporation entered into a $1.1 Billion Three-Year Revolving Credit Agreement and a $600 Million 364-Day Revolving Credit Agreement between Kmart Corporation, a Michigan corporation, several banks, financial institutions and other entities from time to time parties to the agreement; individually, and The Chase Manhattan Bank, a New York banking corporation, as Administrative Agent for the lenders, Chase Securities Inc., as Lead Arranger and Book Manager, Bank of America, National Association, as Syndication Agent, BankBoston, N.A., as Co-Documentation Agent, and Bank of New York, as Co- Documentation Agent. LONG-TERM CAPITAL: To Fold After Repayment of Bail-Out Loans ------------------------------------------------------------ The bank consortium controlling Long-Term Capital Management has been paid back all its original bail-out money, bringing the extraordinary hedge fund saga near to a close, William Lewis reports from New York via the Financial Times. LTCM, Mr. Lewis recalls, escaped bankruptcy last September when 14 financial institutions put up $3.63bn at short notice to prevent a meltdown of the world's financial markets. Last week, the consortium confirmed it had paid itself the remaining $925m of its original investment. "A small amount of profit remains to be distributed over the next few weeks, after which LTCM will be declared dead," Mr. Lewis writes. The consortium's announcement comes as John Meriwether and five other former partners of LTCM, make the first investments of their new $250 million hedge fund, named JWM to pursue "similar investment strategies as LTCM, but with a lower level of leverage and a greater degree of disclosure." JWM, named after Mr. Meriwether, has received funding from investors in the US, Europe and Asia. It is being advised by Deutsche Bank, the German bank. MALIBU ENTERTAINMENT: Discloses Cash Won't Last Until Year-End -------------------------------------------------------------- "Internally generated cash has been insufficient to fund its working capital, debt service and capital expenditure requirements for the past several years and the Company presently expects that it will not have sufficient cash resources to fund its operations through the end of December and the rest of the winter season unless it is able to generate cash through asset sales or some other transaction," Malibu Entertainment Worldwide, Inc. (AMEX: MBE), discloses in its latest quarterly report filed with the Securities and Exchange Commission, cautioning that it may need to "take extraordinary steps to preserve cash and satisfy its obligations or to restructure its obligations, including seeking to curtail normal operations at various facilities, liquidating assets or otherwise significantly altering its operations." Malibu Entertainment owns and operates 25 family-oriented entertainment centers under the names SpeedZone, Malibu Grand Prix, and Mountasia Family Fun Centers. Each center offers a combination of attractions, including scaled Grand Prix-style racetracks, miniature golf, video arcades, bumper boats, batting cages, and concession stands. At September 30, 1999, Malibu's $100 million balance sheet reflects a $6.5 million working capital deficit. Losses exceed $12 million for the 9-month period ending September 30, 1999. MERIDIAN CORPORATION: Hasn't Paid a Dime to IBM Postpetition ------------------------------------------------------------ International Business Machines Corporation and IBM Credit Corporation hold nearly a million dollars of pre-petition claims against Meridian Corporation and its Debtor-affiliates whose cases pend before the United States Bankruptcy Court for the Western District of Tennessee. Those claims arise under various pre-petition agreements for which the Debtors have yet to decide whether they should be assumed or rejected. IBM is troubled having its agreements with the Debtors in limbo. More troubling, however, is that nearly a million dollars of claims have arisen post-petition and IBM hasn't seen a dime. Accordingly, IBM moves the Court for entry of an order compelling Meridian to (A) decide now whether to assume or reject the Agreements and (B) in all events, pay all post- petition obligations without further delay. MONDI OF AMERICA: Needs Bar Date Set to File Plan by January 18 --------------------------------------------------------------- To flush-out all pre-petition claims against Mondi of America, Inc., Mondi International (California) Corp., Mondi International (Colorado) Corp., and Belville Investments of Hilton Head, S.C., Inc., these chapter 11 Debtors ask Judge Walsh to fix January 31, 2000, as the deadline for creditors to file their proofs of claim. In light of the bankruptcy filing by their parent, Mondi Textil GmbH, in Germany and the sale of the Mondi trademark, it is clear that these Debtors must liquidate their assets. A Bar Date, the Debtors explain, is a key ingredient necessary for that process to be completed. The Debtors indicate that they are working diligently to complete their Schedules of Assets and Liabilities and Statements of Financial Affairs, and have every intention of filing those materials on December 23, 1999. At a recent hearing before Judge Walsh, the Debtors disclosed that they anticipate filing a disclosure statement in support of a liquidating plan on or before January 18, 2000. With that in mind, they have every reason to believe confirmation of a plan will occur in the first-quarter of 2000. MONDI OF AMERICA: Creditors to Gather in Wilmington January 7 ------------------------------------------------------------- The United States Trustee for Region III will convene a meeting of the creditors of Mondi of America, Inc., Mondi International (California) Corp., Mondi International (Colorado) Corp., and Belville Investments of Hilton Head, S.C., Inc., at 1:00 p.m. on January 7, 2000, in Room 2313 of the J. Caleb Boggs Federal Building located at 844 King Street in Wilmington, Delaware. The Mondi Debtors filed for chapter 11 protection on November 1, 1999. The Debtors' proceedings are jointly administered under case number 99-3986 (PJW). Jeffrey S. Sabin, Esq., and Matthew Weber, Esq., of Schulte Roth & Zabel LLP serve as lead counsel to the Mondi debtors. Young Conaway Stargatt & Taylor, LLP, serves as local counsel. NAYA, INC.: Canadian Water-Bottler Says Orders are Being Filled --------------------------------------------------------------- From Montreal, Jan Ravensbergen, writing for The Gazette, reports that Naya Inc., says it intends to continue filling orders at its 140-employee Mirabel bottling plant -- even though it has declared itself insolvent and has sought temporary protection from its creditors. "We are re-organizing; it's an ongoing process," said company official Anita Jarjour. Asked whether Naya intends to continue in business, she responded with an emphatic "yes!" "We are able to deliver all of our orders and to respect all of our orders," Jarjour added. Last Wednesday, the Gazette relates, Naya filed a formal notice of intention to make a proposal to its creditors. That temporary protection is available under the federal Bankruptcy and Insolvency Act. A company declaring itself insolvent is unable to pay its bills on a timely basis. The move was triggered in large part by Naya's loss of a lucrative distribution contract last May with Coca-Coca Enterprises, Jarjour said, and by "the consequences of all of that." Naya's annual sales have tumbled to about the $100-million level, Jarjour said, from 1998 sales of $165 million. The Coca- Cola distribution channel accounted for two-thirds of Naya's sales in the U.S., Naya's major market, Jarjour said. The company had said in March that it had turned an $11.5-million profit last year, and that sales and profits had been growing at a 30-per-cent annual clip. Coke ended the distribution deal effective May 19, after it had entered the business with the Disani brand last February. A deal by which Coke had agreed to buy Naya in 1996 for $161 million fell through, and in September 1998 Naya shelved plans for a public share issue to raise as much as $95.2 million. Richter & Associates Inc., reportedly serves at the Trustee overseeing Naya's insolvency proceedings. NEI WEBWORLD: Pump & Dump Scheme Propels Bankrupt Firm's Stock -------------------------------------------------------------- The Securities and Exchange Commission charged three Southern California men with allegedly using Internet chat rooms to pump up the stock of a small, virtually defunct company of which they owned a significant share, then dumping the stock after reaping a quick $364,000. The SEC, which filed charges against the three men, said, due to the defendant's actions, the price of NEI Webworld Inc. [NYSE:NEIP] rose from 13 cents per share Friday a week ago to more than $15 shortly after the market opened last Monday. Two of the three men were arrested on Wednesday and charged with conspiracy to commit securities fraud. Dallas, Tex.-based NEI Webworld -- a former commercial printing company with no Internet operations whatsoever -- is currently in bankruptcy liquidation and has no assets or business operations. According to SEC reports, the three men -- two of whom are recent UCLA graduates -- used computers in one of the school's libraries, and multiple aliases, to send hundreds of messages that fraudulently claimed the company soon would be acquired by a privately held San Jose, Calif., firm, LGC Wireless Inc. "Let this serve as a warning to con men: if you use the Internet to manipulate our securities markets, we can and will find you," said SEC Enforcement Director Richard H. Walker in a statement Wednesday. "Though the perpetrators in this case went to great lengths to hide from us, we discovered them within a matter of days. And investors who frequent message boards should be warned as well: Internet postings may be informative but many are no more valuable than graffiti." The SEC's actions represent an unusually quick turnaround time for enforcement of Internet-related securities fraud. The three men -- Arash Aziz-Golshani of Beverly Hills, Calif., Allen Derzakharian of La Crescenta, Calif., and Hootan Melamed of Pomona, Calif. -- reportedly began their scheme Nov. 12, sending messages on three separate Internet bulletin boards -- including Yahoo Finance, Raging Bull and Freerealtime.com -- stating that the outstanding shares of "fast moving" NEI would be acquired by LGC Wireless. Shortly after the stock hit above $15 per share, the three men dumped their shares. When news of the supposed merger failed to materialize, the stock's value plummeted, tipping off SEC investigators. Erich Schwartz, a spokesman for the SEC, said this case was unusual in that it marks the first time investigators have seen evidence of online stock price manipulation in which the perpetrators are not in some way affiliated with the company in question. "This is about as pure an Internet fraud case as they get," said Schwartz. "None of these three men were affiliated with either company they claimed were going to merge. But they managed to carefully plot it out so that, in creating a large number of message accounts, managed to create the appearance that this information was emanating from a wide variety of sources, a fact that no doubt made it appear more credible." Schwartz added a word of caution for those looking to make a quick buck on the Internet without first doing their homework. "I think one of the most important lessons of this case, from an educational standpoint, is that the traffic that appears on Internet message boards ought to be considered with a very large grain of salt, especially announcements of acquisitions that haven't yet been announced by the companies themselves," he said. The SEC is currently in the process of expanding its Internet surveillance task force. In the fiscal 2000 omnibus appropriations bill approved last month, the SEC's enforcement division received $7 million to police the Web for Internet- related securities fraud. The commission currently is soliciting bids from several contractors to develop Internet surveillance technologies to help track down electronic fraud. (Brian Krebs for Newsbytes 16-Dec-1999) NEWCARE HEALTH: Judge Fixes January 28 Bar Date ----------------------------------------------- January 28, 2000, is the deadline for creditors of Newcare Health Corporation and its 21 debtor-affiliates to file their proofs of claim with the United States Bankruptcy Court for the District of Massachusetts (Western Division). The January 28 Bar Date also applies to (i) all requests for payment of administrative claims incurred between the June 22, 1999, Petition Date and December 31, 1999, and (ii) all proofs of interest by equity holders. Proof of claim forms should be completed and returned to the Bankruptcy Clerk in Worcester. David Hadas, Esq., of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., represents the Chapter 11 Examiner appointed in the Debtors' cases; Victor G. Milione, Esq., of Nixon Peabody, LLP serves as counsel to the Debtors; and John J. Monaghan, Esq., of Holland & Knight represents the interests of the Official Committees of Unsecured Creditors. NOVACARE, INC.: Sale to Select Medical Likely Nets $10 Million -------------------------------------------------------------- On November 19, 1999, NovaCare, Inc., and its wholly owned subsidiary, NC Resources, Inc., sold their outpatient physical therapy and occupational health business to Select Medical Corporation. The sales price was $200.0 million of which the proceeds were reduced by the amount of debt assumed by Select. Of the remainder, $36.8 million has been placed in escrow in support of certain representations made by the company, including minimum working capital of $86.0 million, collectibility of accounts receivable, net of reserves, as of closing and certain contingent earnout payments. The company is also obligated to pay certain investment banking fees, a guaranteed fee approximating $12.8 million as of September 30, 1999, to the company's former subsidiary, NovaCare Employee Services, Inc., $5.0 million related to severance costs to be paid by the company as a result of terminations which may be made by Select within the first twelve months following closing and other costs associated with the transaction. These costs are estimated to total $26.7 million. OPTEL, INC.: Closes on $60 Million CIT/Foothill DIP Facility ------------------------------------------------------------ OpTel, Inc has closed a $60 million asset-based secured revolving credit facility from The CIT Group/Business Credit, Inc. and Foothill Capital Corporation.The company expects that proceeds of the facility will fund its working capital requirements while under Chapter 11 protection. OpTel is a network based provider of integrated communications services, including local and long distance telephone, cable television and high speed Internet access services in the United States. It currently provides cable television and telecommunications services in a number of metropolitan areas including Los Angeles, San Diego, San Francisco, Phoenix, Denver, Houston, Dallas-Fort Worth, Chicago, Indianapolis, Atlanta, Miami-Ft. Lauderdale and Orlando-Tampa. OpTel is majority owned by Le Groupe Videotron Ltee, owner of the second largest cable television operator in Canada. PICO MACOM: UST Calls Creditors to Woodland Hills on January 18 --------------------------------------------------------------- As previously reported in the TCR, Pico Macom, Inc., located in Lakwview Terrace, California, filed its chapter 11 petition in the United States Bankruptcy Court for the Central District of California on November 17, 1999. The Clerk assigned case number SV 99-23304-AG to the proceeding. Ron Bender, Esq., of Levene, Neale, Bender & Rankin, in Los Angeles, represents the Debtor. The United States Trustee will convene a meeting of Pico Macom's creditors at 12:30 p.m. on January 18, 2000, at 21041 Burbank Boulevard, Room 126, in Woodland Hills, California. The Clerk advises creditors that no deadline has been set for filing proofs of claim in the Debtors' chapter 11 case. PLANET HOLLYWOOD: Assumes Walt Disney Leases in Orlando & Paris --------------------------------------------------------------- Planet Hollywood International, Inc., and its debtor-affiliates, ask Judge Farnan in Delaware to approve their decision to assume certain restaurant and store leases with EDL Hotels SCA, Walt Disney World Co., and Walt Disney World Hospitality & Recreation Corporation. "Assumption of the leases is integral to the Debtors' business plan, will prevent declaration of defaults against foreign assets not subject to this Court's jurisdiction, and represents the sound exercise of the Debtors' business judgment," Thomas Avallone, Planet Hollywood's Executive Vice President, Chief Financial Officer and Chief Accounting Officer, tells Judge Farnan. The specific Leased Premises for which Planet Hollywood seeks to assume the underlying Lease Agreements are: (A) the Planet Hollywood restaurant located at Walt Disney World Resort in Orlando, Florida, (B) the Planet Hollywood Superstore in Orlando, and (C) the Planet Hollywood restaurant located at the Disneyland Paris Resort in Paris, France. PURINA MILLS: Resuming Purchasing Activities from St. Louis ----------------------------------------------------------- Purina Mills, Inc., will resume its ingredient purchasing activities in St. Louis starting in early January, 2000. These activities are currently performed in Wichita, Kansas, by Koch Nutrient Services, which is a division of Koch Agriculture Company, a subsidiary of Purina's current parent company, Koch Industries, Inc. Approximately 35 new jobs will be created in the purchasing, inbound logistics, risk management and related accounting areas at Purina's corporate headquarters. As previously reported, the reintegration of the purchasing function is an important step in Purina's financial restructuring, which the Company is executing in Chapter 11. Darrell Swank, CFO of Purina, stated, "The Company is excited about resuming purchasing activities in St. Louis and welcoming many former Purina employees back as well as new individuals to our organization. We believe this effort will allow us to capture certain key operational improvements which are a major focus of our restructuring. To date, the restructuring process is progressing as planned, with the Company aiming to emerge from Chapter 11 with a significantly improved capital structure as an independent Company during the second quarter, 2000." In related news, Purina reported today, November monthly financial results of approximately $19 million generated in cash flow from operations and approximately $9.4 million of earnings before interest, taxes, depreciation and amortization expense, and restructuring costs (EBITDA). In addition, the Company currently has a significant liquidity position with over $25 million in cash, plus borrowing availability on its $50 million Debtor-In-Possession Bank Facility, which was previously approved by the Bankruptcy Court in November. Purina Mills is America's largest producer and marketer of animal nutrition products. Based in St. Louis, Missouri, the Company has 49 plants and approximately 2500 employees nationwide. Purina Mills is not affiliated with Ralston Purina Company, which is the registered owner of the trademarks "Purina," the checkerboard logo and Purina Dog Chow brand and Purina Cat Chow brand pet foods. SABRATEK CORP.: Commences Chapter 11 Reorganization in Delaware --------------------------------------------------------------- Sabratek Corp. -- self-described as a company that develops, produces and markets technologically-advanced, user-friendly and cost-effective therapeutic and diagnostic medical systems designed specifically to meet the unique needs of the alternate- site health care market -- sought protection from its creditors Friday by commencing a reorganization under chapter 11 of the United States Bankruptcy Code in Wilmington, Delaware. The Skokie, Illinois-based company lists assets of $100.4 million and total liabilities of $104.6 million as of November 30, 1999, including $85 million owed on account of its 6% Convertible Notes due 2005. On December 2, 1999, the Board of Directors of Sabratek was informed by KPMG LLP that its auditors' reports issued with respect the Company's financial statements for the years ended December 31, 1998, 1997 and 1996 should no longer be relied upon. Last month the company was delisted from the NASDAQ. SGL CARBON: 2nd Amended Plan Transmitted to Creditors for Voting ---------------------------------------------------------------- Obtaining approval of a Debtor's Second Amended Disclosure Statement Pursuant to 11 U.S.C. Sec. 1125 from Chief Judge Farnan at a hearing held on December 6, 1999, in support of the Second Amended Plan of Reorganization proposed SGL Carbon Corporation for the resolution of its chapter 11 proceedings pending in Wilmington, Delaware, SGL has transmitted that Plan to creditors for voting. The Official Committee of Unsecured Creditors supports the Plan and urges creditors to vote to "accept" the Plan as they cast their ballots. Holders of General Unsecured Claims will recover 100 cents-on- the-dollar plus 8.5% interest from the Petition Date. The holders of the Alleged Graphite Electrodes Antitrust Claims have the option of (a) continuing to litigate their claims, in which case Reorganized SGL will honor any judgment, or (b) participating in a settlement pact hammered-out during the chapter 11 cases providing for deferred payments and Customer Credits. The holders of an estimated $91 million of Exchangeable Bond Guarantee Claims will emerge as the owners of a 61.2% stake in Reorganized SGL. Existing equity holders will see their stake in the Reorganized Company diluted to a 38.8% interest. Creditors' ballots must be received no later than January 10, 2000, to be counted. Chief Judge Farnan will entertain the Company's request to confirm the Plan on at a hearing in Wilmington on January 18, 2000. SYRATECH CORP.: Warehouse Sale-Leaseback Generates $29.1 Million ---------------------------------------------------------------- Syratech Corporation, through an indirect wholly-owned real estate trust, sold its warehouse property located at 135 American Legion Highway, Revere, Massachusetts to Lyme Properties, LLC for a price of $29,110,000. Simultaneously with the sale of the property, Lyme Properties, LLC leased back to an affiliate of Syratech a portion of the building representing approximately 239,000 square feet for a period of one year. TELETRAC, INC.: Stipulation Fixes 14% Senior Note Claim Amount -------------------------------------------------------------- Norwest Bank, Minnesota, National Association, in its capacity as the Indenture Trustee for the holders of $105,000,000 of 14% Senior Notes due 2007 issued by Teletrac, Inc., filed a proof of claim in July 1999, asserting $110,230,586.67 due and owing in the Debtor's chapter 11 case pending before Judge Walrath in Delaware. In September 1999, Norwest obtained relief from the automatic stay in the bankruptcy proceeding, allowing it to exercise its rights against certain Pledged Collateral partially securing the 14% Notes. The Pledged Collateral, Norwest and the Debtors now agree, was worth $21.7 million at September 10, 1999, thus reducing the Noteholders' claims by that amount. Another dispute arises in determining the amount of the Noteholders' allowed claims, however, because, in 1997, the Debtor issued certain detachable warrants in consideration of an original issue discount in connection with an Exchange Offer completed pursuant to a Private Offering Memorandum dated July 31, 1997. Norwest calculates that the Noteholders are owed an additional $7.4 million. The Debtor responds to that claim by saying that Norwest didn't account for amortization of the OID and, probably, there are other issues that could be discussed. Rather than litigate any of the Debtor's issues, Teletrac and Norwest agree and stipulate that, after receiving their Pledged Collateral, the Noteholders will hold an $82,412,907.24 allowed general unsecured claim in Teletrac's chapter 11 case. VOICE IT: Case May Convert if No Plan is Filed by December 30 ------------------------------------------------------------- At a hearing held December 14, 1999, before Judge Brumbaugh in Denver, Colorado, in the chapter 11 case commenced by Voice It Worldwide, Inc., the Court agreed to: (A) defer consideration of the adequacy of the Debtors' disclosure statement, (B) allow the Debtor to submit a further amended plan and disclosure statement no later than December 30, 1999, and (C) table motions by the United States Trustee, Renaissance Growth and Income Fund, Inc., and the Official Unsecured Creditors' Committee to convert the case to a liquidation proceeding under chapter 7 of the Bankruptcy Code. Bonnie, Bell, Esq., in Denver, Colorado, represents the Creditors' Committee. WESTSTAR CINEMAS: Committee Makes Bid for Chapter 11 Trustee ------------------------------------------------------------ Charging WestStar Holdings, Inc., WestStar Cinemas, Inc., and their debtor-affiliates with a "total abdication" of their fiduciary responsibilities and obligations to their creditors, the Official Unsecured Creditors Committee asks Judge Farnan in the U.S. District Court for the District of Delaware to appoint a Trustee. The Committee asserts that WestStar has: (a) abdicated control over negotiations for the sale of its assets; (b) released tens of millions of dollars in claims the company held against its directors, shareholders and lenders, and (c) prevented the Committee from acting as it should to salvage value for the benefit of its constituency. Who gains by the evils the Committee asserts? The significant shareholders, the Committee says, pointing fingers at: * Warburg Pincus Ventures, L.P., * BNY Capital Corporation, * CIBC WG Argosy Merchant Fund II, LLC, * Metropolitan Life Insurance Company and * the Malina Family Limited Partnership. There are always unavoidable conflicts present in a bankruptcy case between shareholders and creditors, the Committee acknowledges. Unfortunately, the Committee explains to Judge Farnan, WestStar has elected to resolve each of those conflicts by disregarding their fiduciary duties to creditors. The "startling level of self-dealing" must stop, the Committee cries. The way to make it stop is through the appointment of Trustee pursuant to 11 U.S.C. Sec. 1104. A Trustee, the Committee urges, "is essential to remedy the vacuum created by [WestStar's] abdication of responsibility and self-dealing. . . ." Meetings, Conferences and Seminars ---------------------------------- January 10-15, 2000 LAW EDUCATION INSTITUTE, INC. Bankruptcy Law C.L.E. Program Marriott Vail Mountain Resort, Vail, Colorago Contact: 1-414-228-5810 January 13-15, 2000 AMERICAN LAW INSTITUTE Real Estate Financing Documentation: Coping with the New Realities Doubletree La Posada Resort, Scottsdale, Arizona Contact: 1-800-CLE-NEWS February 24-26, 2000 AMERICAN LAW INSTITUTE Chapter 11 Business Reorganizations Walt Disney World, Orland, Florida Contact: 1-800-CLE-NEWS February 27-March 1, 2000 NORTON INSTITUTES ON BANKRUPTCY LAW Norton Bankruptcy Litigation Institute I Olympic Park Hotel, Park City, Utah Contact: 1-770-535-7722 March 2-5, 2000 COMMERICAL LAW LEAGUE OF AMERICA 1st Annual Winder Conference Radisson Resort Hotel, Scottsdale, Arizona Contact: 1-561-241-7301 or 1-213-487-7550 March 9, 2000 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES Spring Seminar Somewhere in New Orleans, Louisiana Contact: 1-803-252-5646 or info@nabt.com March 9-10, 2000 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Healthcare Restructurings: Successful Strategies for Managing Distressed FinancesConference on The Regal Knickerbocker Hotel, Chicago, Illinois Contact: 1-903-592-5169 or ram@ballistic.com March 23-25, 2000 SOUTHEASTERN BANKRUPTCY LAW INSTITUTE, INC. 26th Annual Southeastern Bankruptcy Law Institute Marriott Marquis Hotel, Atlanta, Georgia Contact: 1-770-451-4448 March 30-April 2, 2000 NORTON INSTITUTES ON BANKRUPTCY LAW Norton Bankruptcy Litigation Institute II Flamingo Hilton Hotel, Las Vegas, Nevada Contact: 1-770-535-7722 April 3-4, 2000 PRACTISING LAW INSTITUTE 22nd Annual Current Developments in Bankruptcy and Reorganization Conference PLI Conference Center, New York, New York Contact: 1-800-260-4PLI April 5-8, 2000 TURNAROUND MANAGEMENT ASSOCIATION Spring Meeting Pointe Hilton Squaw Peak Resort Phoenix, Arizona Contact: 1-312-822-9700 or info@turnaround.org April 6-7, 2000 AMERICAN LAW INSTITUTE Commercial Securitization for Real Estate Lawyers Walt Disney World, Orlando, Florida Contact: 1-800-CLE-NEWS April 10-11, 2000 PRACTISING LAW INSTITUTE 22nd Annual Current Developments in Bankruptcy and Reoorganization Conference Grand Hyatt Hotel, San Francisco, California Contact: 1-800-260-4PLI May 4-5, 2000 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Bankruptcy Sales & Acquisitions The Renaissance Stanford Court Hotel San Francisco, California Contact: 1-903-592-5169 or ram@ballistic.com June 29-July 2, 2000 NORTON INSTITUTES ON BANKRUPTCY LAW Western Mountains Bankruptcy Law Institute Jackson Lake Lodge, Jackson Hole, Wyoming Contact: 1-770-535-7722 August 14-15, 2000 TURNAROUND MANAGEMENT ASSOCIATION Advanced Education Workshop Loewes Vanderbilt Plaza, Nashville, Tennessee Contact: 1-312-822-9700 or info@turnaround.org September 12-17, 2000 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES Convention Doubletree Resort, Montery, California Contact: 1-803-252-5646 or info@nabt.com September 21-22, 2000 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. 3rd Annual Conference on Corporate Reorganizations The Regal Knickerbocker Hotel, Chicago, Illinois Contact: 1-903-592-5169 or ram@ballistic.com November 3-7, 2000 TURNAROUND MANAGEMENT ASSOCIATION Annual Conference Hyatt Regency, Baltimore, Maryland Contact: 1-312-822-9700 or info@turnaround.org The Meetings, Conferences and Seminars column appears in the TCR each Tuesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* A listing of Meetings, Conferences and Seminars appears each Tuesday in the TCR. Bond pricing, appearing each Friday, is supplied by DLS Capital Partners, Dallas, Texas. ********* 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., Trenton, NJ, and Beard Group, Inc., Washington, DC. Debra Brennan, Yvonne L. Metzler and Marlen O. Del Mar, 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. 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