/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/991229.MBX T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, December 29, 1999, Vol. 3, No. 251 Headlines ANKER COAL GROUP: Receives Permit for Mining Operation ARM FINANCIAL: Reports Filing Bankruptcy To SEC ARM FINANCIAL: Signs Definitive Agreement For Sale BOYDS WHEELS: Changing Accountants CARMODY INC: Case Summary & 20 Largest Unsecured Creditors CODA ACQUISITION: Seeks To Reject Leases CROWN PAPER: Successfully Amends Financial Requirements DAILEY: Motion For Final Decree Effective December 31, 1999 DANKA BUSINESS SYSTEMS: Completes $218 Million In Investments EAGLE GEOPHYSICAL: Shareholders Object To Sale EAGLE GEOPHYSICAL: Shareholders Seek Committee EVANS,INC: Seeks Rejection of Unexpired Leases FIRSTPLUS FINANCIAL: Beal Bank's Objection To Compromise FORCENERGY: Orders Authorize Sale and Assignments FORSTMANN & CO: Sells Wool Mfg Business To Victor Forstmann FOSTER WHEELER: Three Units File Chapter 11 Petitions GLOBALSTAR TELECOMMUNICATIONS: Agreement To Sell Stock GRAHAM-FIELD: To Voluntarily Reorganize Under Chapter 11 JUMBOSPORTS: To Assume and Assign Leases to Sports Authority KCS ENERGY: Reaches Restructuring Agreement with Noteholders LENOX HEALTHCARE: Order Authorizes Use Of NHC Cash Collateral LENOX HEALTHCARE: Pursues Rejection of Leases LOIS USA: Seeks Order To Pay Retention Bonuses LONG ISLAND: Case Summary & 11 Largest Unsecured Creditors MOBILE ENERGY SERVICES: Third Motion For Use of Cash Collateral NEWCOR: EXX Inc Purchase Additional Shares PLANET HOLLYWOOD: Assumption of Travelers Insurance Agreement PLANET HOLLYWOOD INTERNATIONAL: Stock For the King PLANET HOLLYWOOD: Seeks Approval of Agreement WASTEMASTERS INC: Rescinds Agreement with Continental Investment ********* ANKER COAL GROUP: Receives Permit for Mining Operation ------------------------------------------------------ Anker Coal Group, Inc. announces that the West Virginia Division of Environmental Protection issued the long-awaited permit for Anker's surface mining operation in Grant County, West Virginia. Anker was forced to idle this surface mine when it had mined all of its then permitted reserves and was unable to get a new permit for its adjacent coal properties. Since that time, Anker has been working with the Division of Environmental Protection to secure the new permit. Bill Kilgore, Chairman and CEO of Anker, said that "the issuance of this permit is a significant event for Anker and an important element in the company's turnaround." Mr. Kilgore added that "with the new permit, we plan to resume operations at the surface mine as soon as possible and expect to begin coal production by April 2000." ARM FINANCIAL: Reports Filing Bankruptcy To SEC ----------------------------------------------- On December 20, 1999 ARM Financial Group Inc. filed a voluntary petition for bankruptcy or receivership protection under Chapter 11 of the U.S. Bankruptcy Code. The action was filed in the United States Bankruptcy Court for the District of Delaware, case No.: 99-4430. The company is acting as debtor in possession. ARM FINANCIAL: Signs Definitive Agreement For Sale -------------------------------------------------- ARM Financial Group, Inc. has 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. 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. 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. "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 or early in the second quarter of 2000; however, there can be no assurance as to obtaining the required approvals or the timing of the closing of the transaction. BOYDS WHEELS: Changing Accountants ---------------------------------- Prior to the closing of Boyds Wheels Inc.'s bankruptcy filing, the company's independent accountant was Squar, Milner & Reehl LLP. In April 1999, in accord with the bankruptcy plan, the company issued new common stock to Automotive Performance Group, Inc. such that Automotive Performance held 80% of the company's common stock. Subsequent to Automotive Performance Group's assuming control of Boyds Wheels, the former accountant was dismissed on December 17, 1999. This action was taken as part of Automotive's plan to consolidate all audits of it and its subsidiaries under one independent accountant. The purpose of this action was said to be to increase efficiency of the audits. The decision to change accountants was recommended and approved by the board of directors and was made in accordance with the routine operating procedures of Automotive. On December 17, 1999, Grant Thornton LLP was engaged by Boyds Wheels as its new principal independent accountant to audit its financial statements. CARMODY INC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Carmody, Inc. 220 Ferris Avenue White Plains, NY 10603 Petition Date: December 14, 1999 Chapter: 11 Court: Souther District of New York Judge: Adlai S. Hardin Jr. Debtor's Counsel: David B. Shaev, Esq. 350 Fifth Avenue Suite 1700 New York, NY 10118 Total Assets: $ 2,744,862.95 Total Debts: $ 791,562.60 List of Creditors Holding 20 Largest Unsecured Claims: Wilson Management Associates, Inc. $48,497.97 Pirrotti & Pirrotti $5,849.66 Byram Concrete & Supply Co. Inc. $65,685.09 NYS Dept. of Labor $50,000.00 Internal Revenue Service (US Dept. of Justice)$296.01 A & R Concrete $11,867.00 State Insurance Fund $207,115.00 Labor Ready $ 3,207.05 Internal Revenue Service (US Dept. of Justice) $158,060.52 NYS Dept. of Taxation & Finance $43,672.96 Internal Revenue Service (US Dept. of Justice) $54,369.61 Internal Revenue Service (US Dept. of Justice) $4,139.04 Internal Revenue Service (US Dept. of Justice) $34,377.27 NYS Dept. of Taxation & Finance $27,936.00 Mason Tenders District Counsel $23,632.92 NYS Dept. of Taxation & Finance $15,918.13 NYS Dept. of Taxation & Finance $8,709.70 Internal Revenue Service $ 9,988.90 Internal Revenue Service $ 4,999.99 Nationwide Cellular $ 3,838.00 CODA ACQUISITION: Seeks To Reject Leases ---------------------------------------- By order of The US Bankruptcy Court, Southern District of New York, Coda Acquisition Group, Ltd. is authorized to reject 23 leases. The leases cover properties in California, Indiana, Florida, Illinois, Louisiana, Massachusetts, Texas, New York, Hawaii, and Michigan. CROWN PAPER: Successfully Amends Financial Requirements ------------------------------------------------------- Crown Vantage Inc. reports that, in working with the company's senior secured lenders, it has successfully amended three financial covenant requirements for the fourth quarter of 1999. The amendments restored compliance with the tangible net worth requirement and facilitated compliance with two other financial covenant ratios at the end of the fiscal fourth quarter. The company's third quarter financials filed on November 11, 1999, reported that Crown Paper Co. (a wholly-owned subsidiary) no longer complied with the tangible net worth requirement contained in its senior secured debt indentures. It also reported that it did not anticipate complying with the quarterly cash flow-to-debt and interest coverage ratios under those indentures at the end of the fourth quarter 1999. In the same quarterly report, Crown Vantage noted that Crown Paper Co. would not comply with fiscal 2000 financial covenants as extended weakness in the paper markets prevented it from achieving the original financial covenants established at the peak of the paper market cycle in 1995. Appropriate modification to the covenants in the loan agreement for fiscal 2000 will be addressed in the first quarter with senior secured lenders. Crown Vantage is a world manufacturer of value-added papers for printing, publishing and specialty packaging. With nine mills internationally, the company has capacity to manufacture more than 750,000 tons of specialty papers per year. The company's diverse products are tailored for the special needs of target markets. End users include specialty magazines and catalogs, financial printing and corporate communications, packaging and product labels, coffee filters and disposable medical garments, etc. DAILEY: Motion For Final Decree Effective December 31, 1999 ----------------------------------------------------------- Dailey International, Inc. and its affiliates filed a motion for final decree effective December 31, 1999. A hearing on the motion will take place on January 6, 2000. DANKA BUSINESS SYSTEMS: Completes $218 Million In Investments ------------------------------------------------------------- Danka Business Systems PLC announces the completion of $218 million in investments for an aggregate 218,000 new convertible participating shares of Danka and an amendment to the company's Credit Agreement providing financing through March 31, 2002. Equity funds managed by affiliates of The Cypress Group LLC invested $200 million in 200,000 new convertible participating shares of Danka. Under the terms of the agreement with Cypress, Danka has expanded its Board of Directors from nine to eleven members, and, with effect from December 17, 1999, James L. Singleton and Anthony D. Tutrone have been appointed to the board of Danka as non-executive directors. Both Mr. Singleton and Mr. Tutrone are executives of Cypress. "We are pleased with Cypress' commitment to Danka's future and look forward to Jamie's and Tony's contributions as new members of our Board," commented Larry K. Switzer, Chief Executive Officer of Danka. In addition, The Prudential Assurance Company Limited, a subsidiary of Prudential Corporation plc, invested $18 million for an additional 18,000 new shares of the same issue. "The investments by Cypress and Prudential are a substantial vote of confidence in Danka and will be instrumental in our future growth," continued Switzer. The net proceeds to Danka for the share subscription by Cypress and Prudential total approximately $204.6 million, after deducting estimated transaction expenses. Eighty-five percent (85%) of the net proceeds, or approximately $174 million, of the share subscription has been used to make a required repayment of Danka's existing bank indebtedness and the remainder will be used for general corporate purposes. The new participating shares are entitled to dividends equal to the greater of 6.5% per annum and ordinary share dividends on an as converted basis. Dividends will be paid in the form of additional participating shares for the first five years. The participating shares are convertible into ordinary shares at a conversion price of $3.125 per ordinary share (equal to $12.50 per ADS), subject to adjustment in certain circumstances to avoid dilution of the interests of participating shareholders. The new participating shares (218,000) have voting rights initially corresponding to approximately 23% of the total voting power of Danka's capital stock. The terms of the participating shares issued to Cypress and Prudential are set out in full in the articles of association of Danka, which were adopted at the extraordinary general meeting of its shareholders on December 17, 1999. Details of the terms of the shares are also included in the circular sent to Danka's shareholders and the proxy sent to Danka's U.S. shareholders and American Depositary shareholders on November 24, 1999. Upon the closing of the Cypress investment and receipt by the bank lenders of he required payment from the net proceeds received, Danka and its bank lenders entered into an amendment to its Credit Agreement with effect from December 1, 1999. While Danka plans to refinance its principal bank indebtedness during the first quarter of calendar 2000, the amendment provides Danka with a commitment of approximately $750 million through March 31, 2002. Mr. Switzer continued, "We are delighted with the confidence and continued support our bank lenders have provided to us and are pleased to have their financing commitment to the company into 2002. With this amendment, we are in a stronger position to evaluate all our refinancing options." The amendment also amends, among other things, the minimum net worth covenant and removes any obligation of Danka to use its best efforts to sell Danka Services International, Danka's document outsourcing division. The amendment also provides that the $10 million payment which would have been due upon such sale became due upon the completion of the issue of the participating shares to Cypress, which payment has now been made. As a result of the reduction in the company's outstanding indebtedness, the payment due under the Credit Agreement on December 31, 1999 has been reduced from approximately $4.7 million to approximately $3.8 million. In addition, if the bank indebtedness remains outstanding at March 31, 2000, the payment due on that date has been reduced from approximately $9.3 million to approximately $7.5 million. Danka, headquartered in London, England, and St. Petersburg, Florida, is one of the world's largest independent suppliers of office imaging equipment, supplies and services. Danka provides office products and services globally in 30 countries around the world. Danka's ordinary shares are listed on the London Stock Exchange and its ADSs are listed on NASDAQ. Cypress is a private equity firm which currently manages more than $3.5 billion of equity capital on behalf of major public and private pension funds, university endowments, trusts and other leading financial institutions. Cypress seeks to invest alongside experienced executives in growth businesses to achieve long term capital appreciation. The Cypress professionals have employed this strategy in numerous other investments such as Infinity Broadcasting Corporation, Lear Corporation, R.P. Scherer Corporation, Cinemark USA, Inc., Williams Scotsman, Inc., Frank's Nursery & Crafts, Inc., WESCO International, Inc. and ClubCorp, Inc. EAGLE GEOPHYSICAL: Shareholders Object To Sale ---------------------------------------------- The shareholders of Eagle Geophysical, Inc., et al. believe that the consideration of $44 million offered for the assets in the debtors' motion is inadequate and does not represent an arms length transaction, and that approval of debtors' motion would severely impair the value of Eagle's other assets. Specifically, they claim that the offer does not take into consideration the value of the combined with the included seismic equipment, as well as software licenses, goodwill and contracts for the vessel. In addition, the proposed interest rate of 3% does not represent a rate typical of an arms length transaction. EAGLE GEOPHYSICAL: Shareholders Seek Committee ---------------------------------------------- The shareholders of Eagle Geophysical, Inc., et al. ask that a shareholders committee be formed to pursue inter alia the following actions: That a Trustee be appointed and that officers/directors of Eagle be forbidden from taking further actions damaging to the interests of creditors and shareholders of the company, and that contracts held by the company be executed by the company in order to produce income and value. That a full and impartial audit of the companies records be conducted immediately. That an investigation of all present and past directors and officers of the company be conducted to determine if sufficient cause exists to bring formal criminal charges against them. That an unbiased appraisal of the company's assets, both tangible and intangible be made to determine the fair market value of the company. That once a fair market value for the company has been established, an exhaustive attempt be made to find an acquisition or merger partner for the company. EVANS,INC: Seeks Rejection of Unexpired Leases ---------------------------------------------- The debtors, Evans, Inc., et al. seek authority to reject up to six of its unexpired leases as of December 31, 1999. Three leases, currently vacant are in Illinois at Yorktown Square Shopping Center, in Lombard, Illinois; Orland Square Shopping Center in Orland Park, Illinois; and Harlem & Irving Plaza Shopping Center in Norridge, Illinois. The other three leases that the debtors seek authority to reject as of December 31, 1999 relate to a small retail store at Evergreen Plaza in Evergreen Park, Illinois, a retail location in Washington, DC and an office lease in New York City. The time to assume or reject the leases expires on February 29, 2000. The debtors also seek authority to reject four unexpired leases as of February 29, 2000. The relate to retail stores located in Evergreen Plaza Shopping Center in Evergreen Park, Illinois, Ford City Shopping Center in Chicago, Illinois, River Oaks Center in Calumet City, Illinois and North Riverside Shopping Center in North Riverside, Illinois. FIRSTPLUS FINANCIAL: Beal Bank's Objection To Compromise -------------------------------------------------------- Beal Bank, SSB files an objection to the motion to approve a compromise of controversy with Western Interstate Bancorp, FirstPlus Financial Group, Inc., and related entities, which was filed with the court on November 17, 1999. The compromise proposed gives the debtor the right to market and sell the stock of WIB, the stock of FirstPlus Bank, and the Servicing Business in order to generate cash to repay the WIB Note. Beal Bank has a first priority lien and security interest in all of these assets and a Right of First Refusal on any proposed sale. The motion, according to Beal Bank, makes no provision for the treatment of Beal Bank's security interest, and also fails to recognize Beal Bank's rights under the Right of First Refusal Agreement. If the debtor is given the authority to market and sell, the WIB stock, the FirstPlus Bank stock and the Servicing Business, Beal Bank states that it will affect its rights under the Right of First Refusal Agreement, despite the fact that these assets are not property of the debtor's bankruptcy estate. Beal Bank proposes financing allowing for a loan amount up to $20 million without granting the releases sought by Security Lending Group, LLC, the debtors' proposed lender. FORCENERGY: Orders Authorize Sale and Assignments ------------------------------------------------- The US Bankruptcy Court for the Eastern District of Louisiana entered an order authorizing sales and assignments of certain oil and gas interests and related contracts to Linder Energy Company and Louisiana General Oil Company and assumption of contracts. By separate order the court authorized the sale and assignment of certain oil and gas interests and related contracts to CNG Producing Company. FORSTMANN & CO: Sells Wool Mfg Business To Victor Forstmann ----------------------------------------------------------- On November 5, 1999, Forstmann & Co. sold its wool manufacturing business and related assets, including its manufacturing plant in Dublin, Georgia, and all of its inventories and accounts receivable, to Victor Forstmann, Inc., an affiliate of Victor Woolens. Certain other assets, including plants and equipment located in Louisville and Milledgeville, Georgia, were not sold and the company intends to sell such assets as promptly as is possible in one or more liquidation sales. This transaction was in compliance to an order of the United States Bankruptcy Court for the Southern District of New York, which approved the sale on November 4, 1999, following an auction conducted under the Court's auspices on November 3, 1999. The company filed a voluntary petition of reorganization under Chapter 11 of the United States Bankruptcy Code in July 1999. The purchase price paid by Victor Forstmann, Inc. was $13.6 million (subject to adjustment), all of which was paid by the company to the its secured creditors as required in the bankruptcy proceeding. The liquidation of Forstmann & Co.'s remaining assets is expected to take several months and will be under the direction of Rodney J. Peckham, President and Chief Executive Officer of the company. In connection with this transaction, the company changed its name to FSMN Liquidation Corp. from Forstmann & Company, Inc. FOSTER WHEELER: Three Units File Chapter 11 Petitions -------------------------------------------------------------- Three Foster Wheeler Corp. subsidiaries have filed for Chapter 11 protection in the U.S. Bankruptcy Court in Delaware. Foster Wheeler has agreed to a restructuring of debt for RRRP Robbins Inc., Robbins Resource Recovery Partners LP and RRRP Illinois Inc. with the Franklin High Yield Tax-Free Income Fund and with CIBC World Markets Corp. The Robbins Resource Recovery Facility is owned by the village of Robbins, Ill., and is operated under a long-term lease by Robbins Resource Recovery Partners L.P. In October, the company announced it had signed a definitive restructuring agreement with 80 percent of the bondholders and had agreed, as its remaining financial obligation, to be responsible for $113 million of the new tax-exempt bonds. The company also said it would file a prepackaged bankruptcy plan and sell the incinerator. Pending the sale of the company, Foster Wheeler said it will operate the facility for up to two years with no operational guarantees and full cost reimbursement. "We forged this exit strategy in order to protect our shareholders from further financial losses related to this project. Our exit from involvement in the Robbins waste-to-energy facility, which has significantly impacted our earnings for the last two years, is an essential part of our overall plan to financially strengthen the corporation," Foster Wheeler CEO Richard J. Swift said in October. Swift blamed project losses on the repeal of the Illinois Retail Rate Law in 1996. Under the original law, Robbins could have sold electricity to utilities at the same rate that utilities charge their customers. State officials changed the law to include only facilities that generate electricity from landfill-produced methane gas. The company could not generate enough revenue to cover operating costs after the law was repealed, Swift had said. Analysts agreed that the plant would be making money if the retail law had not been changed. Foster Wheeler spokeswoman Rita Kraeber said the Chapter 11 filing follows in line with the plans announced in October, but would not comment further. The company said it expected to file a reorganization plan Dec.1 and sought court orders allowing its units to continue normal operations while they reorganize. GLOBALSTAR TELECOMMUNICATIONS: Agreement To Sell Stock ------------------------------------------------------ Globalstar Telecommunications Limited has entered into an agreement to sell $150 million of 9% Convertible Preferred Stock due 2011 in an offering exempt rom registration. The Preferred Stock will be convertible into shares of common stock at a conversion price of $25.9569 per share. Globalstar Telecommunications Limited will apply the proceeds to purchase Convertible Preferred Partnership Interests in Globalstar, L.P. Globalstar L.P., in turn, will use the proceeds from the sale of the Convertible Preferred Partnership Interests for continued deployment of the Globalstar mobile satellite-based telephone system and for general corporate purposes. The Preferred Stock will be offered only to qualified institutional buyers and to certain accredited institutional investors. The Preferred Stock has not been registered with the Securities & Exchange Commission and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. GRAHAM-FIELD: To Voluntarily Reorganize Under Chapter 11 -------------------------------------------------------- Graham-Field Health Products, Inc. (OTC Bulletin Board: GFIH), announced that the Company and certain of its subsidiaries filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the District of Delaware. Prism Enterprises, a Graham-Field subsidiary in San Antonio, Texas, did not file a petition for bankruptcy. The Company also announced that, as a result of the filings, it has been able to secure a commitment for a Debtor-in-Possession (DIP) credit facility for up to $38.75 million. The financial institutions providing the credit facility include IBJ Whitehall Business Credit Corporation, Deutsche Financial Services Corporation, PNC Bank, NA and National City Commercial Finance, Inc. The DIP facility, which is expected to receive preliminary court approval tomorrow, will provide the Company with the liquidity to pay its suppliers for post-petition goods and services, and to pay employees without disruption. The Company anticipates that the DIP facility will provide sufficient liquidity to carry it through the completion of its debt restructuring. "We have the financing in place to continue to operate the business," said Mr. Thomas J. Opladen, Chairman of the Graham- Field Board of Directors. "Today's filing will have no effect on our ability to manufacture or distribute our products. For our customers and suppliers, the filing will make it easier to do business with the Company," said Mr. Opladen. The Company also today announced the appointment of David A. Hilton as President and Chief Executive Officer. Mr. Hilton specializes in start-up and turnaround enterprises. Most recently, he turned around J.E. Morgan Knitting Mills, the largest manufacturer of thermal underwear in the country. Mr. Hilton replaces John G. McGregor, who resigned. The Company also announced that Robert J. Gluck, its Chief Financial Officer, resigned his position and that a search would be conducted for his replacement. Both Mr. McGregor and Mr. Gluck are members of the professional management firm of Jay Alix and Associates, which will provide a smooth management transition. As part of the filing, the Company will request from the court various measures to provide for the effective operation of the Company. These include measures to assure that the filing will have no effect on the payment of salaries, wages and benefits to the Company's employees. The Company will also request approval of a program to retain key personnel. To assist the Company in executing its restructuring strategies, the Company has retained the firm of Rothschild Inc. to provide investment-banking services. Graham-Field Health Products, Inc., headquartered in Bay Shore, New York, manufactures, markets and distributes medical, surgical and a wide range of other healthcare products into the home healthcare and medical/surgical markets. JUMBOSPORTS: To Assume and Assign Leases to Sports Authority ------------------------------------------------------------ The debtors, JumboSports, Inc. and its debtor affiliates seek court authority to assume and assign unexpired non residential real property leases for its Raleigh, North Carolina and Brandon, Florida locations to the Sports Authority. The debtor will receive $2 million, as opposed to an earlier agreement for $2.5 million. KCS ENERGY: Reaches Restructuring Agreement with Noteholders ------------------------------------------------------------ KCS Energy, Inc. (NYSE: KCS) announced today that it has reached an agreement on a restructuring with the holders of more than two-thirds of the Company's 8.875% Senior Subordinated Notes due January 15, 2008 and more than a majority of its 11% Senior Notes due January 15, 2003. In addition, KCS announced that the holders of its Senior Notes have agreed to certain amendments to the governing indenture which will facilitate implementation of the restructuring. "We are very pleased to have such a high level of support from our noteholders on a restructuring plan that will permit KCS to reduce total indebtedness and obtain new financing to replace the two existing bank credit facilities," said KCS President and Chief Executive Officer James W. Christmas. "Our agreement also allows us to continue to pay our trade creditors in the ordinary course of business." Under the terms of the agreement, current shareholders will retain 100% of the common stock on the restructuring effective date and employees and trade creditors will continue to be paid in the ordinary course of business. Senior Subordinated Noteholders will exchange $125 million principal amount of such notes, together with accrued interest claims, for $46.875 million in cash and newly issued redeemable convertible preferred stock. KCS may redeem the preferred stock for 12 months from the effective date of the restructuring plan as follows: For $15.625 million if completed within 6 months of the effective date; For $20.625 million if completed from 6 to 9 months of the effective date; and For $25.625 million if completed from 9 to 12 months of the effective date. If the Company does not redeem the new preferred stock, it will be convertible into 49.9% of the outstanding common stock, assuming full conversion of such preferred stock. On the effective date, Senior Noteholders will receive a cash payment for interest due as of January 15, 2000, totaling $16.5 million. Consenting Senior Noteholders will exchange their existing notes for new 11% Senior Notes due January 15, 2005, which will be secured by a junior lien on the Company's assets. The remaining Senior Notes will be reinstated. The agreement also provides that KCS will receive options to repurchase at least $50 million of its new Senior Notes at $850 per $1,000 principal amount plus accrued interest prior to July 15, 2000. The Company is currently negotiating the terms of a new senior secured credit facility that will replace its two current bank facilities. Under the terms of the restructuring agreement, the Company must finalize the terms of a satisfactory financing commitment by January 15, 2000. To effectuate the agreement, the parties have agreed KCS will commence a case under Chapter 11 of the Bankruptcy Code by January 18, 2000. In addition, KCS obtained the consent of the majority of the Senior Noteholders to amend the indenture governing the Company's 11% Senior Notes due January 15, 2003. Among other things, the amendment would permit KCS to replace its two existing bank credit facilities with a new senior secured credit facility providing up to $190.0 million of indebtedness, to reduce to 2.0- to-1.0 the EBITDA (earnings before interest, taxes and DD&A) coverage ratio required for the Company to incur additional indebtedness until March 31, 2001, and to purchase its 8.875% Senior Subordinated Notes due January 15, 2008 and to expend up to $26.0 million to acquire or retire the newly issued preferred stock of the Company. KCS is an independent energy company engaged in the acquisition, exploration, development and production of natural gas and crude oil with operations in the Mid-Continent and Gulf Coast regions. The Company also purchases reserves (priority rights to future delivery of oil and gas) through its Volumetric Production Payments (VPP) program. For more information on KCS Energy, Inc., please visit the Company's web site at http://www.kcsenergy.com. To receive KCS' latest news and other corporate developments via fax at no cost, please call 800-PRO-INFO. Use company code KCS. See also http://www.frbinc.com. LENOX HEALTHCARE: Order Authorizes Use Of NHC Cash Collateral -------------------------------------------------------------- The US Bankruptcy Court for the District of Delaware entered an interim order authorizing the debtors, Lenox Healthcare, Inc., et al., continued use of NHC/OP, LP cash collateral. The amount of Petition Date Collateral is deemed to be $1,649,352. LENOX HEALTHCARE: Pursues Rejection of Leases --------------------------------------------- The debtors, Lenox Healthcare, Inc., et al., seek court approval of the rejection of five nonresidential real property leases and a management agreement and related agreements. The five leases relate to real estate including nursing home facilities, some of which are closed. The facilities include Blue Hills Healthcare Center, Kansas City, Missouri; Center for Geriatric Nursing and Rehabilitation Center, Evansville, Indiana, The Huber Restorium, St. Petersburg, Florida; Mill Valley Healthcare Center, Mill Valley, California; Litchford Falls Healthcare & Rehabilitation Center, Raleigh, North Carolina. The management agreement covers Montvue Nursing Home, Luray, Virginia. LOIS USA: Seeks Order To Pay Retention Bonuses ---------------------------------------------- The debtors, Lois/USA, Inc. and its affiliates seek court approval to pay Retention Bonuses to critical employees which amount to approximately $96,000. LONG ISLAND: Case Summary & 11 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Long Island City Associates, L.P. c/o Alan Kahn & Associates 240 West 35th Street New York, NY 10001-2506 Petition Date: December 16, 1999 Chapter: 11 Court: Southern District of New York Judge: Stuart M. Bernstein Debtor's Counsel: Jill A. Abrams Rattet Hollander & Pasternak, LLP 550 Mamaroneck Avenue Suite 510 Harrison, NY 10528 Jonathan S. Pasternak Rattet Hollander & Pasternak, LLP 550 Mamaroneck Avenue Suite 510 Harrison, NY 10528 Total Assets: Between $ 1,000,001 to $ 10,000,000 Total Debts: Between $ 1,000,001 to $ 10,000,000 11 Largest Unsecured Creditors: Abilene Heating Group $ 529.34 Croker Fire Drill $ 389.70 Dynamic Elevator $ 2,174.30 Edmar $ 703.36 John Corrieri $ 4,543.26 Karisen Contracting Corp. $ 10,000.00 Patrick O'Connell, P.E. $ 1,000.00 Safari Pest Control $ 80.00 Sholom & Zuckerbrot $ 3,945.33 Regency Savings Bank $ 3,243,345.25 Long Island City Mortgage Partners $ 350,000.00 MOBILE ENERGY SERVICES: Third Motion For Use of Cash Collateral --------------------------------------------------------------- The debtors, Mobile Energy Services Company, LLC and Mobile Energy Services Holdings, Inc., seek a final order authorizing the debtors to use cash collateral for the period from January 1, 2000 through and including April 30, 2000. It is critical to the debtors to be able to use cash collateral pursuant to the Budget. In order to continue their business operations, the debtors need to purchase fuel, provide for the payments to employees, maintain the Energy Complex and pay overhead costs. If the debtors are forced to shut down their operations, the debtors' business as a whole will be irreparably harmed. NEWCOR: EXX Inc Purchase Additional Shares ------------------------------------------ Between December 3, and December 17, 1999 EXX Inc. purchased additional shares of Newcor Inc.'s common stock, raising its beneficially ownership to 652,200 shares, or 13.25% of the outstanding common stock of Newcor. David A. Segal, controlling shareholder of EXX, exercises shared voting and dispositive power with EXX over the 652,200 shares, and owns 24,000 additional shares over which he exercises sole voting and dispositive power. Mr. Segal's aggregate holdings represent 13.74% of the outstanding shares of common stock of Newcor. During the most recent transactions EXX Inc. purchased 55,900 shares of Newcor common stock using cash on hand. As the controlling shareholder of EXX, Mr. Segal may be deemed to share indirect beneficial ownership of the shares reported by EXX but disclaims all beneficial ownership to the shares owned by EXX. Mr. Segal owns the 24,000 shares of Newcor common stock in his own name and acknowledges beneficial ownership of these 24,000 shares. PLANET HOLLYWOOD: Assumption of Travelers Insurance Agreement ------------------------------------------------------------- The debtors, Planet Hollywood International, Inc., et al., debtors, seeks an order approving the assumption of Travelers Insurance Agreement. A hearing on the motion will take place on December 30, 1999 at 11:00 AM. The debtors seek approval of an agreement with The Travelers Indemnity Company regarding the terms of the debtors' general liability and workers compensation policies. The debtors will deliver Letters of Credit in the aggregate amount of $2.2 million to assure payment under the agreement. PLANET HOLLYWOOD INTERNATIONAL: Stock For the King -------------------------------------------------- His Royal Highness Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud and Kingdom Planet Hollywood, having recently sold some Planet Hollywood International Inc.'s common stock, now beneficially owns 10,167,000 shares, exercising sole voting and dispositive power among them, and representing 10.14% of the outstanding shares of common stock of the company. His Royal Highness and Kingdom Planet Hollywood acquired the Class A common stock initially for investment purposes and depending upon market conditions and other factors, in the future His Royal Highness and Kingdom Planet Hollywood may, among other things, dispose of all or a portion of the remaining Class A common stock. His Royal Highness and Kingdom Planet Hollywood have determined to sell, from time to time and depending upon market conditions, a substantial portion of the shares of Class A common stock currently beneficially owned. The exact number of shares to be sold will depend upon a number of factors, including market conditions, as mentioned. During December His Royal Highness and Kingdom Planet Hollywood have sold in the over the counter market an aggregate of 2,690,000 shares of Class A common stock for an aggregate sales price of $188,811.00. PLANET HOLLYWOOD: Seeks Approval of Agreement --------------------------------------------- The debtors, Planet Hollywood International, Inc., et al seek entry of a court order approving the agreement between the debtors and ECE, SA de CV. A hearing on the motion will take place on January 18, 2000 at 2:00 PM. The agreement is regarding settlement of a dispute over franchise fees, royalty payments and memorabilia lease payments owed, and amendment or termination of certain agreements, approving assumption of the Operative Agreements, as amended and approving related escrow agreement. Pre-petition ECE developed franchise locations in Spain, Mexico, the Caribbean and South America, and incurred debts to Planet Hollywood for franchise fees, royalty payments and memorabilia lease payments under the Operative Agreements. Planet Hollywood contends that $3 million is currently owing. By way of general summation, the agreement provides that ECE shall pay to the debtors the sum of $1.3 million. Future royalties shall be paid at a rate of 5% in Mexico and the Caribbean, and 3% in Spain, subject to increased sales; and there will be a moratorium on certain other payments. The debtor shall also regain franchise rights to Puerto Rico. The debtor believes that the agreement is in the best interest of the estates, and requests that the court approve same. WASTEMASTERS INC: Rescinds Agreement with Continental Investment ---------------------------------------------------------------- WasteMasters, Inc. (OTC Bulletin Board: WAST) announced that it has reached agreement with Continental Investment Corporation to rescind a prior agreement in which Continental acquired 5,000,000 shares of the Company's Preferred Stock and 4,500,000 shares of its Common Stock. The 5,000,000 shares of Preferred Stock were convertible into 25,500,000 shares of the Company's Common Stock or 19.2% of issued shares at 3Q99. Continental is currently in bankruptcy and the transaction must be approved by the Bankruptcy Court. However, Continental has made all appropriate filings and awaits a hearing on the matter in early January. According to the terms of the recission, WasteMasters, Inc. will return shares it holds in Continental and one of its subsidiaries, Continental Technologies Corporation as well as pay $590,000 to Continental. WasteMasters, Inc. will receive an operating landfill in Missouri that was included in the original transaction. In addition, a warrant that would have given Continental 100,000,000 shares of WasteMasters Common Stock in exchange for 1,000,000 of Continental Common Stock will be cancelled. WasteMasters previously notified Continental that it would not honor the warrant. This move completely eliminates the possibility of future litigation. Douglas Holsted, President of the Company, stated: "It has taken a long time to completely separate Continental and WasteMasters. However, the outcome is tremendous. With the Court's approval, we will reduce our outstanding stock by 30,000,000 shares, bring in an operating asset, and eliminate potential litigation. Continental separates from us, gets their stock back and enough cash to allow them to concentrate on their difficulties. We don't anticipate any problems with the approval from the bankruptcy judge and the effect of the agreement will be posted in the first quarter financials." David N. Fuselier, of the Ridgefield Group, the Company's turn- around consultant, stated, "When fully approved this transaction brings back into treasury over $7,500,000 of WAST shares, effectively a 20% gain for its shareholders, neutralizes future litigation which would have taken years and hundreds of thousands in legal expense to settle and, ultimately, adds revenues and strengthens the balance sheet." "The original transaction was structured by old management at both WasteMasters and Continental and had many flaws from the start. For over a year now, new management at both companies has sought an equitable recission of the original transaction," said current Chairman and CEO Leon Blaser of WasteMasters. "This is a vital settlement for WasteMasters and Continental." WasteMasters operates landfills and transfer stations and utilizes the proprietary technology of its proposed wholly owned subsidiary Startec, Inc. (OTC Bulletin Board: STIN) to generate tax credits in the waste industry. ********* 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. 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