/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/991228.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 28, 1999, Vol. 3, No. 250 Headlines ACCESS AIR: Gets Approval for State Loan ADLER COLEMAN: Court Rules that SPIC Need Not Pay Claims ALTIVA FINANCIAL: Beginning To Implement Strategic Initiatives ARM FINANCIAL: Case Summary & 20 Largest Unsecured Creditors BAPTIST FOUNDATION: Applies To Retain Odyssey Capital Group LLC CODA ACQUISITION: Deadline For Filing Proofs of Claim CRIIMI MAE: Files Amended Plan DAEWOO MOTOR: South Korean Government To Sell Daewoo Motor Co. HARNISCHFEGER: Bid on Beloit Corp. To Be Made Public in January INCOMNET: Order Approves Employ of Dickstein Shapiro JUST FOR FEET: Possible Buyout in Early January KAMPEN & ASSOCIATES: Confirmation Hearing Set LOEWEN: Motion For Approval of $70M Neweol Factoring Pact MEDPARTNERS PROVIDER: Seeks Emergency Extension To Solicit Votes MOBILE ENERGY: Seeks Extension of Time To Assume/Reject Leases MOBILE ENERGY: Seeks Order Further Extending Exclusive Periods PLAY BY PLAY TOYS & NOVELTIES: Net Sales Decrease 13.8% POWER PLUS: Proceeding to Implement Plan RCG LIQUIDATION: Seeks Extension of Exclusivity RRRP ROBINS, INC.: Case Summary & 20 Largest Unsecured Creditors SAMSONITE: For Quarter - Net Sales and Net Losses Increase STUART ENTERTAINMENT: Court Authorizes Attorneys For Committee SUN HEALTHCARE: States' Motion For Relief From DIP Order WESTSTAR CINEMAS: Committee's Motion For Trustee or Examiner WESTSTAR CINEMAS: Order Authorizes Auction Rules WORLDLINK: Moody's Downgrades Class B Notes WTD INDUSTRIES: Substantial Concerns, But Net Revenue Up XCL LTD: Receives Notice from Majority Bondholder Meetings, Conferences and Seminars ********* ACCESS AIR: Gets Approval for State Loan ---------------------------------------- Bankrupt Des Moines-based airline Asset Air announced today that it has received court approval for a $1 million loan from the state of Iowa, according to a newswire report. The approval reverses Bankruptcy Judge Russell Hill's decision not to allow the airline to receive the loan, which the court said would give too much control to a Des Moines investor who had agreed to secure the loan. The loan clears the way for the airline, which had suspended its daily flights since its chapter 11 filing, to run interim charter service while it reorganizes. However, controversy surrounds the airline's bankruptcy case as documents that it has filed show its pre-loan assets to be one-tenth what the company had reported in its original bankruptcy petition, and its liabilities are roughly half its original estimate. ADLER COLEMAN: Court Rules that SPIC Need Not Pay Claims -------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York ruled last week that the Securities Investor Protection Corp. (SPIC) and Edwin Mishkin, trustee for the bankrupt brokerage firm of Adler, Coleman Clearing Corp., do not need to pay certain customer claims regarding bankrupt New York-based Hanover Sterling & Co. because the claims were based on fraudulent securities transactions, according to a newswire report. In a Dec. 15 ruling, Bankruptcy Judge James L. Garrity agreed with SPIC that Hanover Sterling & Co., for which Adler, Coleman is a clearing firm, had engaged in a series of fraudulent stock transactions designed to benefit its preferred customers in the face of the firm's inevitable failure. The court found that as Hanover's employees realized the firm was collapsing and that stocks in the customer accounts could not be sold for the prices that Hanover Sterling quoted, the employees entered fictional transactions in preferred customers' accounts that gave the illusion that the preferred customers had sold their portfolios at high prices. The fictional sales were then used to order "blue chip" stocks. The SPIC, created in 1970 to provide certain protection against losses to investors in the event of a brokerage firm's failure, provides up to $500,000 for claims for securities, including $100,000 for cash claims. The court held that the fraudulent transactions were made without customer knowledge or had never actually been executed, thereby disqualifying the customer claims from SPIC protection. "While SPIC was clearly designed to protect customers of failed broker- dealers, it was not intended to be a vehicle for shifting investor accounts from worthless securities to cash or securities with value by means of fraudulent manipulation," the court said. ALTIVA FINANCIAL: Beginning To Implement Strategic Initiatives -------------------------------------------------------------- During the last eight months of fiscal 1998, Altiva Financial Corporation's operations consisted principally of (1) liquidating its portfolio of loans to repay outstanding debt; (2) maintaining its systems and retaining personnel necessary to resume operations while exploring alternatives to locate new capital; and (3) designing and beginning to implement its strategic initiatives. During fiscal year 1999, the company continued to pursue its strategic initiatives, including the purchase of lending platforms in Las Vegas, Nevada and Charlotte, North Carolina. The company did not begin to produce significant loan volume until July 1999. Such production was attributable to production by The Money Centre, Inc. that was acquired by the company in July 1999. As a result, the company does not believe that its results for the fiscal year ended August 31, 1999 are comparable to the company's results for the fiscal year ended August 31, 1998. Altiva produced $119.1 million of loans during fiscal 1999 compared to $338.9 million in fiscal 1998 and $526.9 in fiscal 1997. Net losses decreased $91.9 million to $2.1 million in fiscal year ending August 31, 1999 from net losses of $94.0 million during fiscal year ending August 31, 1998. The loss for the twelve months ended August 31, 1998 was primarily the result of continued low loan production and difficulty in selling closed loans. The decrease in net losses for the twelve months ending August 31, 1999 resulted from the reduction in the company's business while the company pursued its new strategic initiatives and from a substantially lower mark down on the company's mortgage related securities during this period. Additionally, during fiscal year 1998, sales of loans were generally made for cash, and were for less than par value, thus contributing to losses. ARM FINANCIAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Arm Financial Group, Inc. 515 West Market Street Louisville, KY 40202 Type of Business: Insurance Company whose subsidiaries specializes in asset accumulation businesses with particular emphasis on retirement savings and investment products. Petition Date: December 20, 1999 Chapter 11 Court: District of Delaware Judge: Peter J. Walsh Debtor's Counsel: Pauline K. Morgan Rodney Sq. North P.O. Box 391 Wilmington DE, 19899-0391 (302) 571-6600 Total Assets: $ 37,231,222 Total Debts: $ 48,141,756 GenAmerica Corporation Term Loan $ 38,000,000 Merrill Corporation Trade Debt $ 37,022 Duff & Phelps Credit Rating Co. Trade Debt $ 20,000 Relco Electric, Inc. Trade Debt $ 10,630 Document Sciences Corp. Trade Debt $ 7,455 Ajilon Trade Debt $ 6,565 Ray Ackerman Millwork & Supply Co. Trade Debt $ 6,164 Carpet Decorators Inc. Trade Debt $ 4,670 OTT Communications, Inc. Trade Debt $ 3,241 Norstan Communications Trade Debt $ 3,093 US Bank Trade Debt $ 2,560 Compaq Computer Corp. Trade Debt $ 1,980 Xerox Corporation Trade Debt $ 1,548 Central American Airways, Inc. Trade Debt $ 1,472 Marco Business Products, Inc. Trade Debt $ 680 New Ulm Telecom, Inc. Trade Debt $ 621 Laser Technologies, Inc. Trade Debt $ 538 Dearborn Financial Institute, Inc. Trade Debt $ 454 Krueger International, Inc. Trade Debt $ 420 Federal Express Corporation Trade Debt $ 409 BAPTIST FOUNDATION: Applies To Retain Odyssey Capital Group LLC --------------------------------------------------------------- The debtors, Baptist Foundation of Arizona, Inc., are applying for an order authorizing the employment and retention of Odyssey Capital Group LLC as financial advisors to the debtors. The debtors seek to retain the firm with respect to developing a voluntary and orderly plan of liquidation, asset valuation and general banking services. Odyssey will be paid a flat monthly fee of $25,000 for its services in the bankruptcy proceeding. CODA ACQUISITION: Deadline For Filing Proofs of Claim ----------------------------------------------------- Coda Acquisition Group, Ltd, debtor, filed a notice of deadline for the filing of proofs of claim against the debtor. All persons and entities holding claims of any kind against the debtor that arose on or before the Petition Date are required to complete and file a duly executed proof of claim for so that it is actually received not later than 5:00 PM New York time on January 28, 2000. CRIIMI MAE: Files Amended Plan ------------------------------ CRIIMI MAE Inc. (NYSE: CMM) and its affiliates CRIIMI MAE Holdings II, L.P. and CRIIMI MAE Management, Inc. filed their Amended Joint Plan of Reorganization (the "Plan") and proposed Disclosure Statement with the United States Bankruptcy Court, District of Maryland, Greenbelt Division (the "Bankruptcy Court") on December 23, 1999. The Plan was filed with the full support of the Official Committee of Equity Security Holders, which is a co-proponent of the Plan. Merrill Lynch Mortgage Capital Inc. ("Merrill Lynch") and German American Capital Corporation ("GACC"), two of the Company's largest secured creditors, would provide exit financing under the Plan as part of the recapitalization of the Company. The Plan contemplates total recapitalization financing aggregating at least $873 million (the "Recapitalization Financing"). Under the amended Plan, Merrill Lynch and GACC would remain secured creditors and would provide a significant portion of CRIIMI MAE's Recapitalization Financing. Additional Recapitalization Financing would be obtained from other existing debtholders and from the sale of the same commercial mortgage- backed securities ("CMBS") that were to be sold pursuant to the Joint Plan of Reorganization filed by CRIIMI MAE and its affiliates with the Bankruptcy Court on September 22, 1999. CRIIMI MAE and its affiliates may seek new equity capital from one or more investors although new equity is not required to fund the Plan. The Company is filing a Form 8-K with the Securities and Exchange Commission, which will include the Plan and proposed Disclosure Statement as exhibits. The Company's proposed Disclosure Statement is subject to approval by the Bankruptcy Court after notice and a hearing. No date has yet been set for a disclosure statement hearing. On December 20, 1999, the Official Committee of Unsecured Creditors of CRIIMI MAE Inc. filed its own plan of reorganization and proposed disclosure statement which, in general, provide for the liquidation of the assets of the Company and its debtor affiliates through the use of various liquidating trusts which would be controlled by representatives of various holders of claims. The company's amended plan, at odds with the creditors' committee plan, states that Criimi Mae would reorganize with funds provided by two of the company's largest secured lenders, German American Capital Corp., a unit of Deutsche Bank, and Merrill Lynch Mortgage Capital Inc. U.S. Bankruptcy Judge Duncan Keir, who will decide which plan will be confirmed, had authorized the creditors' committee, as well as the equity committee, to file competing plans after the company's filing period expired on Sept. 10. Criimi Mae had filed its joint plan of reorganization Sept. 22, but until now neither committee had exercised its rights to file competing plans. Criimi Mae filed chapter 11 Oct. 5 with $2.78 billion in assets and $2.15 billion in liabilities. The above discussion of the plans is qualified in their entirety by reference to the entire plans. On October 5, 1998, the Company and two affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code. Before filing for reorganization, the Company had been actively involved in acquiring, originating, securitizing and servicing multi- family and commercial mortgages and mortgage related assets throughout the United States. Since filing for Chapter 11 protection, CRIIMI MAE has suspended its loan origination, loan securitization and CMBS acquisition businesses. The Company continues to hold a substantial portfolio of subordinated CMBS and, through its servicing affiliate, acts as a servicer for its own as well as third party securitizations. DAEWOO MOTOR: South Korean Government To Sell Daewoo Motor Co. -------------------------------------------------------------- The South Korean government's Financial Supervisory Commission (FSC) reported yesterday that it has decided to sell Daewoo Motor Co., a unit of South Korea's financially troubled Daewoo Group, via a closed bidding process, according to a newswire report. The FSC said they chose closed bidding over open bidding to save time in the process, and that the government plans to receive bids from interested parties in January and February. General Motors Corp. submitted its proposal last week to Daewoo creditors and South Korean government representatives, offering Daewoo Motor creditors a one-third equity stake in exchange for part of the auto maker's debts. In addition, GM has said they plan to add their own management and technical resources by using Daewoo as a GM source of inexpensive cars and utility vehicles for developing markets. Ford Motor Co. has also expressed an interest in acquiring Daewoo and plans to meet in January with the Korean Development Bank, Daewoo Motor's lead creditor. Daewoo Motor is one of 12 units of the debt-riddled Daewoo Group that are part of a restructuring plan being arranged by Daewoo Group's domestic creditors. HARNISCHFEGER: Bid on Beloit Corp. To Be Made Public in January --------------------------------------------------------------- According to a report in the Milwaukee Journal Sentinel on December 23, 1999, Harnischfeger Industries Inc. is looking through multiple bids for its Beloit Corp. unit that is to be auctioned off in January, but it does not expect to go public with a bid until January. Bob Dangremond, Harnischfeger's chief restructuring officer, said Wednesday that it will take a couple weeks to consider the complex bids and make sure they are compared on an equal basis before a bid is chosen. Other bidders then can try to outbid that bid before struggling Beloit Corp., a pulp and papermaking equipment maker, is auctioned off via bankruptcy court in Delaware. St. Francis-based Harnischfeger filed for Chapter 11 bankruptcy protection in June. It hopes to sell Beloit Corp. by mid-January as Harnischfeger begins to reorganize. The move will leave Harnischfeger solely as a mining equipment maker. INCOMNET: Order Approves Employ of Dickstein Shapiro ---------------------------------------------------- The US Bankruptcy Court for the Central District of California, Santa Ana Division entered an order authorizing the debtor to employ Dickstein Shapiro Morin & Oshinsky LLP as special trademark counsel and authorizing the a draw down on post petition retainer. JUST FOR FEET: Possible Buyout in Early January ----------------------------------------------- Just For Feet, a high-flying retailer of athletic shoes before it ran into financial trouble, could be bought out in early January. Helen Rockey, chief executive of the Birmingham-based retailer, said she has signed confidentiality agreements with two bidders and will decide between them next month. The agreement prevents her from revealing the companies' names or how much they are willing to spend, she said. "We should know something by the first week of January, or the second week at the latest," she said Thursday. "It will mean the end of Just For Feet as we know it," said Jack Taylor, a retail professor at Birmingham-Southern College. Just For Feet filed for Chapter 11 bankruptcy protection Nov. 4 as it wrestled with cash flow and inventory problems. The chain had about 400 employees in its Birmingham headquarters and operated 350 stores before its troubles started. When they hit, Just For Feet announced the closure of 85 specialty stores. Possible buyers could include Mahwah, N.J.-based Footstar Inc., owner of 546 Footaction stores; New York's Venator Group Inc., which operates Foot Locker and Champs Sports; and Ft. Lauderdale, Fla.-based Sports Authority. Ms. Rockey said it's too early to know what will happen to the company's 30-acre headquarters in Birmingham if a sale occurs. Some changes have already taken place. Ms. Rockey said Don Allen Ruttenberg, son of Just For Feet founder Harold Ruttenberg, earlier this month resigned as vice president. The senior Ruttenberg, who remains as chairman, no longer comes to the office, but is involved in board meetings via telephone, she said. KAMPEN & ASSOCIATES: Confirmation Hearing Set --------------------------------------------- Kampen & Associates is a real estate development and investment company that acquires undeveloped land for the purpose of development and/or sale. Kampen & Associates, Inc., owns one unimproved parcel of real estate in Pierce County, Washington with an estimated value of $8 million. The parcel has been surveyed for 575 individual residential lots. The debtor has been awaiting final plat approval by the County. In April of 1999, the debtor was purchased by Affordable Homes of America, Inc., a publicly traded company. The debtor has no paid employees, and no monthly expenses other than a $5000 payment on the option to purchase Mountain Meadows. Kampen & Associates had obtained a $1.5 million loan from the Shoalwater Bay Indian Tribe and secured it with the option to purchase Mountain Meadows. Kampen & Associates, Inc. was unable to make the balloon payment and the Indian Tribe began its foreclosure on the option to purchase. Pursuant to the plan, the debtor will receive an influx of cash from its parent company, Affordable Homes of America, Inc., which has received a loan from a European Bank. This would allow for the repayment of all creditors in full. A hearing to confirm the Chapter 11 plan of reorganization and approve the Disclosure Statement of the debtor, Kampen & Associates, Inc. is set for 9:30 PM at the US Bankruptcy Court, 1200 Sixth Avenue, Judges Courtroom, Seattle, Washington 98101. The plan is proposed by Kampen for the resolution of Kampen & Associates, Inc.'s outstanding creditor obligations. Treatment of claims as provided in the plan are as follows: Class 1 - Priority claims - Paid in full - No priority claims have been filed in the case. Class 2 - Shoalwater Bay Indian Tribe - Cascade Land Depository - Class 2 claims are unimpaired under this plan and shall receive a cash payment from Kampen in the amount of their claim plus simple interest at the legal rate at the time of distribution of the funds. Class 3 - Allowed Unsecured Claims - The Class 3 Allowed Secured Claims are unimpaired under this plan. Class 4 - Disputed Claims are impaired. All unsecured claims and disputed claims will be treated as if they are disallowed until the claim is resolved by the court. If a disputed claim is allowed by the court in full or partially, the allowed claim will be paid as part of the appropriate class. Kampen does not dispute any claims at this time, but reserves the right to dispute claims as proof of claims are filed. Class 5 - Shareholders: Impaired. All Equity interest holders of the debtor shall remain in existence following the Effective Date. The holder of such interest shall receive the balance of the debtor's estate under this plan after all unclassified claims and claims Classes 1 through 4 inclusive have been paid in full. The debtor has listed the option to purchase the parcel known as Mountain Meadows. This is a parcel with the potential for 575 residential homes. It is located in Pierce County, Washington. LOEWEN: Motion For Approval of $70M Neweol Factoring Pact --------------------------------------------------------- The Debtors want authority to enter into a $70 million factoring transaction with one of their nondebtor affiliates, Neweol (Delaware), L.L.C. If Judge Walsh approves this transaction, then Neweol will also file a chapter 11 bankruptcy petition, and the DIP Agreement will be amended to include Neweol as a borrower under the Agreement. The Debtors believe that this factoring transaction with Neweol would provide financing and tax advantages for fiscal year 1999. In order to get these advantages this year, the factoring transaction must be completed on or before December 31, 1999. Immediately following Judge Walsh's stamp of approval, the various Debtors will collectively sell approximately $70 million in aggregate face amount of at-need funeral home accounts receivable and preneed cemetery accounts receivable to Neweol. This sale will be financed by an intercompany loan from Loewen Group International, Inc. First Union National Bank, the agent bank for the post-petition lenders under the DIP Agreement, will consent to this transaction if Neweol files for chapter 11 protection and is joined as a borrower under the DIP Agreement before the transaction is closed. Before Neweol files for chapter 11 protection, it will pay some affiliates of the Bank of Montreal approximately $4.7 million for obligations arising from prior factoring transactions. Neweol's chapter 11 petition will be consolidated with the Debtors' bankruptcy petitions, but only for procedural purposes. (Loewen Bankruptcy News Issue 16; Bankruptcy Creditor's Service Inc.) MEDPARTNERS PROVIDER: Seeks Emergency Extension To Solicit Votes ---------------------------------------------------------------- MedPartners Provider Network Inc., debtor, is seeking authority for a thirty day extension of the time period during which only the debtor may seek acceptance of a plan of reorganization. Over two months have passed since the debtor circulated the plan to the Creditors Committee and yet the debtor still has not yet received from the Committee or any other constituents any significant comments to or feedback on the plan. The debtor requests that the court not prejudice the debtor by allowing the exclusivity period to terminate due solely to the inaction of the committee. MOBILE ENERGY: Seeks Extension of Time To Assume/Reject Leases -------------------------------------------------------------- The debtor, Mobile Energy Services Company LLC and Mobile Energy Services Holdings, Inc. seek an order further extending the time within which the debtors may assume or reject unexpired leases of nonresidential real property. The debtors seek an extension to and including April 30, 2000. The leases are central to the debtors' operations and all of the debtors' facilities including the Energy Complex are located on the leased premises. Both the debtors and the creditor would suffer irreparable injury through the possible reversion of the Energy Complex to the respective landlords in the event of a premature rejection of the leases. The debtors will not be able to obtain and analyze the necessary information prior to the January 15, 2000 deadline. Until the debtors complete their negotiations with Kimberly- Clark, the Steering Committee for the bondholders and with affiliates of the debtor, the result of which will have a direct impact on the debtor's business plans, the debtors can not make a decision with respect to the leases. MOBILE ENERGY: Seeks Order Further Extending Exclusive Periods -------------------------------------------------------------- Mobile Energy Services Company LLC and Mobile Energy Services Holdings, Inc. seek an order further extending their exclusive periods. The debtors seek a 110-day extension of the debtors' plan filing exclusivity period and the debtors' solicitation exclusivity period. The debtors request extensions to and including April 30, 2000 and June 29, 2000, respectively. To date, the debtors have not prepared or filed a plan of reorganization because the debtors continue to work with the Steering Committee concerning the formulation of a proposed plan of reorganization; the debtors and the Steering Committee continue to negotiate with Kimberly-Clark in an attempt to resolve the issues raised by Kimberly-Clark's decision to cease pulping operations at the Pulp Mill; and the debtors continue to work on the development of additional business opportunities for the debtors. Although substantial activity has occurred since the Petition Date, the debtors are not yet in a position to propose and solicit a plan of reorganization. PLAY BY PLAY TOYS & NOVELTIES: Net Sales Decrease 13.8% ------------------------------------------------------- Net sales for the fiscal quarter ended October 31, 1999, for Play By Play Toys & Novelties, Inc., decreased 13.8%, or $7.7 million, to $48.0 million from $55.7 million in the comparable period in fiscal 1999. The company indicates that the decrease in net sales was primarily attributable to the decrease in domestic net toy sales of 20.2% or $7.9 million to $31.2 million comprised principally of a $4.8 million decrease in domestic retail sales and a $3.6 million decrease in domestic amusement sales from the comparable period in fiscal 1999. On the reported sales the company saw a net loss of $1.2 million in the 1999 quarter while the net loss in the same quarter of 1998 was $1.4 million. POWER PLUS: Proceeding to Implement Plan ---------------------------------------- Investing is the priority for Power Plus Corporation, a public company dual listed on The Alberta Stock Exchange in Canada and the Over-The-Counter Electronic Bulletin Board in the United States. The primary activities of the company fall into two categories: investing in operating companies; and, carrying on business through subsidiary operating companies. Accordingly, Power Plus Corporation has been the parent of subsidiaries that hire employees, procure merchandise for resale, purchase or build capital assets and carry on specialty retail businesses operating in Canada and the US, primarily selling batteries and battery-related products, wireless telecommunications products and portable fashion electronics. On January 31, 1998 Power Plus USA sought protection under Chapter 11 of the US Bankruptcy Code. Power Plus USA remained in possession of its assets. With no expectation of any short-term improvement in this crisis, the company subsequently announced on May 8, 1998, that Power Plus Canada had also sought protection from creditors by filing a Proposal under the Bankruptcy and Insolvency Act Canada. Power Plus Canadian remained in possession of its assets pending a determination as to whether the operations could be refinanced or sold as a going concern. On June 29, 1998, the company realized its security pertaining to the indebtedness of Power Plus USA and foreclosed on its remaining assets and sold them, including its list of pager customers, and ceased carrying on business in the US. On November 26, 1998, the company sold the shares of Power Plus Canada and certain related intellectual properties to an arm's-length third party that conducts a similar business in Canada. The sale was made pursuant to a share purchase agreement dated October 30, 1998, between the company, as vendor, and BPI as purchaser. All of the company's retail operations in Canada and the US had been conducted through Power Plus Canada and Power Plus USA and all of the capital assets employed in carrying on the retail business were owned by them. The company no longer has any retail operations nor operating assets and is currently undergoing reorganization, implementing its 1999 Reorganization Plan. Reporting in Canadian dollars the company reports that the three months ended October 31, 1999 yielded revenues of $2,300 and net losses of $201,378. In the nine months ended that date revenues were $8,244 and net losses $854,150. For comparison, the quarter ended October 31, 1998 saw revenues of $30,523 and net losses of $400,756 and the nine months ended October 31, 1998 revenues were reported as $136,320 and net losses $36,544. While management cannot give any assurances as to the future outlook for the company, conditional regulatory approval to the 1999 Reorganization Plan was granted on April 29, 1999 and the company will be proceeding to implement its plan and seek a professional opinion as to the extent and applicability of the company's substantial tax loss carry forwards. Upon implementation of the 1999 Reorganization Plan and finalization of the company's tax opinion, management has indicated it intends to aggressively pursue diversified investment opportunities targeting to maximize shareholder value. RCG LIQUIDATION: Seeks Extension of Exclusivity ----------------------------------------------- RCG Liquidation Company, formerly known as Reading China and Glass, Inc. seeks a 60-day extension of the debtors' exclusive periods within which to file a plan or plans of reorganization and solicit acceptances thereto. The debtors seek the entry of an order extending the exclusive filing period through and including February 23, 2000 and the period to solicit acceptances thereof through and including April 24, 2000. The debtors have liquidated substantially all of their assets and have initiated the claims administration and reconciliation process. The debtors are currently reviewing the Committee's comments to their proposed plan and disclosure statement, and will incorporate certain of the Committee's suggestions into the plan. According to the debtors, granting them the opportunity to finalize the plan is the most cost-effective and expeditious way to conclude these cases. Such extension should allow the debtors sufficient time to complete and file the plan and disclosure statement as well as to make any amendments that may become necessary prior to approval of the disclosure statement. RRRP ROBINS, INC.: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: RRRP Robins, Incorporated PerryVille Corporate Park Attn General Counsel Clinton NJ 08809-4000 Debtor Affiliates: RRRP, L.P. & RRRP, Illinois, Inc. Petition Date: December 1, 1999 Chapter 11 Court: District of Delaware Judge: Peter J. Walsh Debtor's Counsel: Scott D. Cousins 222 Delaware Avenue 15th Floor Wilmington DE, 19899 (302) 655-4880 20 Largest Unsecured Creditors: Franklin High Yield Tax - Free Income Debenture $202,375,000 Eaton Vance - High Yield Municipal Bond Debenture $40,500,000 Strong Municipal Advantage Debenture $20,350,000 Strong High Yield Municipal Bond Debenture $15,250,000 Prudential Insurance Debenture $14,000,000 Capital Research - American High Inc. Debenture $10,990,000 Van Kampen Debenture $3,000,000 FW Zack, Inc. Trade $31,687 American International Materials, Ltd. Trade $312,202 Moody National Bank Debenture $300,000 Village of Robbins Scholarship $255,631 Eagle Services Corp. Trade $220,357 Deangelis, Aldo A. Service $155,429 J&H Marsh & McLannen 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 An Outside International Company Debenture $49,312 Land & Lakes Company Trade $43,640 SAMSONITE: For Quarter - Net Sales and Net Losses Increase ---------------------------------------------------------- Samsonite Corporation's consolidated net sales increased from $199.1 million in the three months ended October 31, 1998,to $208.2 million in the three months ended October 31,1999, an increase of $9.1 million, or 4.6%. Fiscal 2000 sales were negatively impacted by the decline in the value of the Belgian franc compared to the U.S. dollar. Without the effect of the exchange rate difference, fiscal 2000 sales would have increased by $13.6 million, or approximately 6.8%. Consolidated net sales increased from $519.4 million in the nine months ended October 31, 1998 to $579.5 million in the nine months ended October 31, 1999, an increase of $60.1 million, or 11.6%. In the quarter ended October 31, 1999 the company had net losses of $7,845 while the similar period in 1998 saw net losses of $3,415. The net losses in the nine month period ended October 31, 1999 were $26,066 as compared to net losses of $44,254 in the same period of 1998. STUART ENTERTAINMENT: Court Authorizes Attorneys For Committee -------------------------------------------------------------- The US Bankruptcy Court for the District of Delaware entered an order authorizing the official unsecured creditors' committee to employ attorneys. The Official Unsecured Creditors' Committee of Stuart Entertainment Inc. is authorized to employ as counsel Adelman Lavine Gold and Levin, to represent it under a general retainer effective as of September 2, 1999. SUN HEALTHCARE: States' Motion For Relief From DIP Order -------------------------------------------------------- Twelve state Medicaid agencies have asked the Court to vacate part of its interim order approving the Debtors' DIP on the grounds that it violates the Eleventh Amendment to the United States Constitution. The States challenge that part of the Court's order that generally prohibits them from recouping any payments owed to the Debtors against any pre-petition state claims against the Debtors. With some exceptions, the Eleventh Amendment prohibits suits against a state in federal court without the state's consent. The twelve states argue that, although they are not being sued in federal bankruptcy court, the Court's Order still violates the Eleventh Amendment because it prevents the states from recouping funds that they would otherwise recoup as a result of their prior overpayments to the Debtors, or as a result of obligations by the Debtors to the states. The states base their argument in large part on a federal court decision that Congress cannot constitutionally abrogate the states' Eleventh Amendment immunity from suit through section 106(a) of the bankruptcy Code. In re Sacred Heart Hospital of Norristown, 133 F.3d 237 (3d Cir. 1998). The twelve states joining in the Motion are Alabama, Connecticut, Idaho, Illinois, Louisiana, Maryland, Missouri, New Hampshire, New Jersey, New Mexico, Oklahoma and Virginia. Judge Walrath will hold a hearing on the States' Motion on January 27, 2000. (Sun Healthcare Bankruptcy News Issue 17; Bankruptcy Creditor's Services, Inc.) WESTSTAR CINEMAS: Committee's Motion For Trustee or Examiner ------------------------------------------------------------ A hearing on the motion of the Official Unsecured Creditors Committee for an order appointing a Chapter 11 Trustee or, in the alternative, and examiner, which was originally scheduled to be held on December 30, 1999 will be held before the Honorable Joseph J. Farnan, Jr., US Bankruptcy Court for the District of Delaware, 844 King Street, Wilmington, Delaware, on Jsnuary 11, 2000 at 12:30 p.m. WESTSTAR CINEMAS: Order Authorizes Auction Rules ------------------------------------------------ Judge Joseph J. Farnan, Jr. entered an order authorizing and approving auction rules, break-up fee and notice procedures with respect to a sale hearing on the motion of the debtors, WestStar Cinemas, Inc. and its affiliates for authority to sell substantially all assets of the bankruptcy estates. The WestStar debtors are authorized to solicit bids and conduct the auction with respect to the proposed sale of their assets. The Asset Purchase Agreement, subject to higher bids provides for WF Cinema to acquire the assets for $91 million in cash plus additional consideration including repayment of debt. When the sale is consummated, the debtors will have liquidated their assets and no longer will conduct business operations. Bidding will commence at $95 million, with overbids in increments of $1 million. A hearing on the sale will be held on January 11, 2000 at 12:30 PM. WORLDLINK: Moody's Downgrades Class B Notes ------------------------------------------- $250.0 Million of Debt Securities Affected. New York, December 22, 1999 -- Moody's Investors Service has downgraded the rating of the $43,000,000 Class B Senior Secured Fixed Rate Notes Due 2012, and confirmed the rating of the $207,000,000 Class A Senior Secured Floating Rate Notes Due 2009. Moody's placed the tranches under review for downgrade on March 10, 1999 as a result of deterioration of the credit quality of the collateral pool. Since the closing date, several credits have been downgraded or have defaulted, thus raising the credit risk associated with the Class B Notes to the point where the risk was no longer consistent with the tranche's rating. The agency noted that, while the current portfolio characteristics do not warrant a downgrade of the rating of the Class A Notes, further deterioration of the portfolio may result in such a downgrade. According to Moody's, the downgrade resulted from (i) an approximate 5% loss of par in the underlying collateral pool and (ii) a deterioration in the credit quality of the collateral pool. The portion of the collateral pool rated Caa1 or lower currently accounts for over 11% of the portfolio (including defaulted securities). RATING ACTION: Issuer: Worldlinx CBO, Limited: The rating of the following tranche was confirmed: Tranche description: $207MM Class A Senior Secured Floating Rate Notes, Due 2009 Rating: Aa2 The rating of the following tranche was downgraded: Tranche description: $43MM Class B Senior Secured Fixed Rate Notes, Due 2012 Previous Rating: Baa3 New Rating:Ba2 WTD INDUSTRIES: Substantial Concerns, But Net Revenue Up -------------------------------------------------------- On September 27, 1999, TreeSource Industries, Inc. (its chartered name) and certain of its wholly-owned subsidiaries, filed for voluntary reorganization under chapter 11 of the U.S. Bankruptcy Code. On October 28, 1999 the company filed a Plan of Reorganization in U.S. Bankruptcy Court that, if confirmed, would result in the cancellation of the company's current common and preferred stock. Due to the filing for protection under chapter 11 of the Code, there exists substantial doubt about the company's ability to continue as a going concern. However, over the three and six month periods ending October 31, 1999 the company has increased its net revenues over that of the same period of 1998. Net revenue for the 1999 three month period was $59,313 as opposed to $51,240 for the same quarter in 1998. For the six months ended October 31, 1999 the company showed net revenues of $126,601 while in the same six month period on 1998 net revenues were $98,901. The company experienced a net loss in the three month, 1999, period of $725, but realized a net gain of $5,621 in the six months ended October 31, 1999. For comparison, in 1998, the three month period saw a net loss of $324 and the six month period's net losses were $943. XCL LTD: Receives Notice from Majority Bondholder ------------------------------------------------- XCL Ltd. (AMEX:XCL) announced that on December 22, 1999, it received a notice of default from three trusts managed by Trust Company of the West (the "Investment Funds"), which holds approximately 50.67 percent of the outstanding principal amount of the $75,000,000 Senior Secured Notes (the "Notes") issued by XCL Ltd. The Investment Funds issued this notice of default under the Bond Indenture based on the company's failure to make interest payments due on May 3, 1999, and November 1, 1999. As a result of this declaration of default, the voting or consensual rights and powers with respect to the stock of XCL-China, Inc., which has been pledged to secure the Notes, become vested in the Trustee. XCL-China, Inc. holds the company's interest in the Zhao Dong Block, which is located in the shallow water area of Bohai Bay, People's Republic of China. Based on the instructions from the Investment Funds, the Trustee voted to remove the existing Board of Directors of XCL-China and to elect in their place as the sole director of XCL-China, Eric Scroggins. The company has also been informed that Mr. Scroggins, acting as the sole director of XCL-China, has adopted resolutions on behalf of XCL-China, Inc. concerning the petition for Involuntary Bankruptcy previously filed against XCL-China by Apache China LDC, a wholly owned subsidiary of Apache Corporation. Based on the resolutions adopted, XCL-China is (1) authorized and directed to withdraw its opposition to the involuntary Chapter 7 bankruptcy proceeding currently pending in the United States Bankruptcy Court for the Western District of Louisiana in Opelousas; and (2) authorized and directed to convert the involuntary Chapter 7 proceeding to a voluntary Chapter 11 proceeding; and (3) to retain Douglas S. Draper, Jan M. Hayden and the law firm of Heller, Draper Hayden & Horn of New Orleans, La., as bankruptcy counsel in its reorganization under Chapter 11 of the Bankruptcy Code. Further, the company understands that the Investment Funds have entered into a Forbearance and Standstill Agreement with Apache China LDC and Apache Corporation whereby neither Apache Corporation nor Apache China shall seek to dismiss or convert the Chapter 11 Proceeding, or seek the appointment of a trustee, an examiner with expanded powers or a responsible person to manage the affairs of XCL-China during the term of this Agreement unless XCL-China joins in any such application, and that no employee, agent, contractor, consultant, officer or member of the board of directors of XCL-China or XCL holding such position or office on or prior to December 19, 1999, shall be an officer or member of the Board of Directors of XCL-China during the term of this Agreement without the written consent of Apache Corporation or Apache China. The company is evaluating its options to respond to the actions taken by the Investment Funds. XCL Ltd. is an oil and gas exploration and production company with operations in the People's Republic of China. Operations are conducted through wholly owned subsidiaries. The company's Common Stock trades on the American Stock Exchange and the London Stock Exchange Limited. 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 Finances Conference 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 Reorganization 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, Marlen O. Del Mar and Ronald Ladia, 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 * * *