/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/000125.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, January 25, 2000, Vol. 4, No. 17 Headlines AMERICAN PAD: Case Summary and 20 Largest Unsecured Creditors BASIC LEASING COPORATION: Case Summary BRUNO'S: Huff's Emergency Motion to Stay Confirmation Order CORAM RESOURCE: Seeks Order Extending Use of Cash Collateral DECISIONONE HOLDINGS: Holders Report Owning 56.2% of Common Stock FILENE'S BASEMENT: Seeks To Reject Leases FRUIT OF THE LOOM: US Trustee Schedules 1st Meeting of Creditors GOLDEN OCEAN: Case Summary & 16 Largest Unsecured Creditors HARVARD PILGRIM: Moody's Assigns A Caa1 To Series 1998 Bonds ITHACA INDUSTRIES: Net Sales Decrease; Net Loss of $1.2 Million KCS ENERGY INC.: Case Summary KMART: Reports Rising Revenues LEVITZ: Fifteenth DIP Amendment MARINER: Motions to Honor Prepetition Sales & Use Tax Obligations MT. KISCO EXECUTIVE CENTER: Case Summary NEUROMEDICAL: Committee Replies To Claims PENNCORP FINANCIAL: Enters Confidentiality Agreement PHARMACY FUND: Order Confirms Amended Joint Plan PLANET HOLLYWOOD: Judge Approves Plan PRATT & WHITNEY: To Cut 1,700 Jobs SGL CORPORATION: Order Dismisses Chapter 11 Petition SHOE CORP: Opposes Motion To Convert Cases To Chapter 7 STARTER: Seeks Approval of Disclosure Statement SUN HEALTHCARE: Seeks To Reject Orlando Lease/Medicare Agreement TECMAR TECHNOLOGIES:Case Summary & 15 Largest Unsecured Creditors TECMAR TECHNOLOGIES:Case Summary & 20 Largest Unsecured Creditors TRISM INC: Seeks Time To Either Assume or Reject Leases TULTEX CORP: Creditors To Compel Filing of Schedules UNIPRIME CAPITAL ACCEPTANCE, INC.: Files for Chapter 11 UNITED COMPANIES: Equity Committee Taps Saul, Ewing USCI INC: Significant Operating and Net Losses Meetings, Conferences and Seminars ******** AMERICAN PAD: Case Summary and 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: American Pad & Paper Co. 17034 Preston Rd, Suite 700 Dallas, TX 75252-5613 Type of Business: Holding company with no separate operations and owns, directly or indirectly, 100% of the outstanding common stock of all its subsidiaries. Petition Date: January 10, 2000 Chapter 11 Court: District of Delaware Judge: Roderick R. McKelvie Debtor's Counsel: Mark D. Collins Richards, Layton & Finger PO Box 551 Wilmington, DE 19899 (302) 658-6541 D. J. Baker Gibson, Duan & Crutcher LLP 200 Park Avenue New York, NY 10166 (212) 351-4000 Total Assets: $496,000,000 Total Debts: $521,000,000 20 Largest Unsecured Creditors Bank of New York Noteholder $ 130,000,000 International Paper Trade $ 4,564,970 Georgia Pacific Trade $ 3,696,130 Kimberly Clark Trade $ 2,128,508 House Cascade Paper Group Trade $ 1,226,705 JJ Collins Trade $ 1,177,807 Gilman Paper Trade $ 1,020,952 Papercone Co. Trade $ 1,003,633 Appleton Paper Trade $ 784,802 Gadge USA Trade $ 736,000 Mafcote Industries Inc. Trade $ 735,162 Avpex International Trade $ 616,716 WeyerHaeuser Paper Trade $ 558,377 Fox River Trade $ 468,858 Chapco Carton Trade $ 388,982 Flyer Graphics Trade $ 388,629 National Starch & Chemical Co. Trade $ 343,912 Wausau Paper Mills Trade $ 330,830 Paper Tyger Trade $ 319,212 Wausau Insurance Trade $ 202,481 BASIC LEASING COPORATION: Case Summary -------------------------------------- Debtor: Basic Leasing Corp. Port Kearny, Building 12A South Kearny, New Jersey 07032 Petition Date: January 20, 2000 Chapter 11 Court: Southern District of New York Judge: Arthur J. Gonzalez Debtor's Counsel: Alan Nisselson Brauner Baron Rosenzweig & Klein, LLP 61 Broadway, 18th Floor New York, New York 10006 (212) 797-9100 Assets and Liabilities are estimated to be between 1 million to 10 million. BRUNO'S: Huff's Emergency Motion to Stay Confirmation Order ----------------------------------------------------------- W. R. Huff Asset Management Co., L.L.C., asks Judge Robinson to stay her Order confirming the Debtors' Second Amended Reorganization Plan pending Huff's appeal of the Confirmation Order. Huff holds $290 million of 10-1/2% subordinated notes issued by Bruno's, Inc. Huff is out of the money under the Plan. Huff's motion argues that, absent a stay: the Debtors and their insiders--including Kohlberg, Kravis, Roberts & Co. and its affiliates--will engage in a series of self-benefiting transactions, including the distribution of cash and securities in the reorganized Debtors, the completion of exit financing, and the effectuation of releases and exculpations of various parties from potentially valuable estate and third-party claims. The consummation of these transactions may very well render Huff's appellate rights moot and effectively deprive Huff of its due process rights to an appellate review of the Confirmation Order. Huff believes that a stay of the Confirmation Order is appropriate because Huff is likely to prevail on its appeal of the Plan and Confirmation Order. Huff argues that the Plan should not have been confirmed for the following reasons. First, the Plan is not "fair and reasonable" because "KKR and other shareholders" have the exclusive right to acquire property of the debtors, while subordinated bond holders receive nothing." KKR and its affiliates own more than 80% of the outstanding stock of Bruno's. Second, "the voting creditors and other parties in interest were afforded improper and misleading disclosure regarding the debtors' complete abdication of their responsibility to assess adequately potential preference recovery actions...." Third, "the Plan fails to comply with Section 510 of the bankruptcy code in that it enforces only a portion of the subordination agreement entered into by holders of the Notes and denies them their concomitant subrogation rights." Fourth, "the Debtors, in their effort to obtain releases of KKR and other insiders, agreed to a sale of estate assets to or for the benefit the banks [sic] without adequately seeking higher or better offers, as the Code and applicable case law require...." Fifth, "essential elements of the Plan sprung from the overriding interests of the Debtors' insiders, the Banks, and the Debtors' largest trade creditors to release each other from avoidance liability." Sixth, "the Debtors made no evidentiary showing that their assumption of zero value for potential fraudulent conveyance, preference, and breach of fiduciary duty and mismanagement claims has a basis in fact." Seventh, "the Plan does not contain non-consensual third-party releases." Eighth, the Plan violates the requirement in section 1129(b) of the Bankruptcy Code "that a cramdown plan be 'fair and equitable'" because "the Plan will provide value to the Banks that exceeds 100% of their allowed claims...." (Bruno's Bankruptcy News Issue 31; Bankruptcy Creditor's Service Inc.) CORAM RESOURCE: Seeks Order Extending Use of Cash Collateral ------------------------------------------------------------ The debtors, Coram Resource Network, Inc. seek entry of an order extending through and including February 29, 2000, the debtors' authority to use cash collateral. The debtors believe that to the extent the security interested asserted by the lenders are valid and perfected, the lenders are over-secured. A hearing on the motion will be held on February 3, 2000 at 10:00 AM. Pursuant to a Credit Agreement, the lenders agreed to make loans up to an aggregate principal amount of $60 million to Coram Inc. As of the Petition Date there is approximately $37 million dollars due and owing to the lenders pursuant to the Credit agreement plus $2.5 million contingently owed in respect of issued but undrawn letters of credit. DECISIONONE HOLDINGS: Holders Report Owning 56.2% of Common Stock ----------------------------------------------------------------- DLJ Capital Investors, Inc. and DLJMB Funding II, Inc. own and hold sole voting and dispositive power over 7,025,500 shares of the common stock of DecisionOne Holdings. They own and hold shared powers over 7,995,513 such shares, with the total holding representing 56.2% of the outstanding shares of common stock of the company. Donaldson Lufkin & Jenrette Securities Corporation owns, with sole powers, 11,542 shares, representing .1% of the outstanding common stock shares of DecisionOne Holdings, while Donaldson Lufkin & Jenrette, Inc. owns, with sole powers, 7,037,042 shares, 8,007,055 shares with shared powers. This ownership represents 56.3% of the outstanding shares of the company. Michael Isikow beneficially owns 970,013 shares with sole powers, and 7,995,513 shares with shared powers, representing 7.8% of the outstanding shares of DecisionOne. He is a Vice President of MBPII INC, which is the general partner of certain of the DLJ Funds. Because Isikow is an employee of Funding II, Isikow and Funding II may be deemed to share voting and dispositive power over each other's shares. On December 29, 1999, (i) Funding II purchased an aggregate of 6,153,970 Shares from Partners II, Partners II-A, Offshore II, Diversified, Diversified-A, Millennium, Millennium-A, UKIP 1997, Growth II, CEO and DLJCC (see below) for a total consideration of $1.00 from cash on hand, and (ii) Isikow purchased an aggregate of 970,013 Shares from EAB and ESC for a total consideration of $1.00 in cash from his personal funds. The Sellers believe that the shares have no value and the sale transactions were undertaken to close out the Sellers' financial interest in the shares. DLJSC acquires and disposes of Units in the ordinary course of its market-making activities). As of December 22, 1999, DLJSC owned 6,075 Units. FILENE'S BASEMENT: Seeks To Reject Leases ----------------------------------------- The debtors, Filene's Basement Inc. and Filene's Basement Corp. seek to reject store leases covering premises located in Worcester and North Attleboro, Massachusetts; Will Grove, Pennsylvania; Orange, Connecticut and Rockville, Maryland. The going out of business sales have been concluded, and despite diligent marketing efforts there is no interest from potential purchasers of the leases, and the debtors have determined that the leases must be rejected. The debtors request that the rejection be effective January 26, 2000 because the debtors will otherwise be liable to pay rent for stores not generating revenue. Therefore, the debtors request that the court schedule a hearing on or before January 26, 2000. FRUIT OF THE LOOM: US Trustee Schedules 1st Meeting of Creditors ---------------------------------------------------------------- Pursuant to 11 U.S.C. Sec. 341(a), the United States Trustee for Region III will convene a meeting of the Debtors' creditors on February 18, 2000 at 1:00 p.m. in Room 2313 of the Federal Building in Wilmington located at 844 King Street. All creditors and parties in interest will receive written notice of this meeting. All creditors are invited, but not required, to attend. The first official meeting of creditors is the one time in the Debtors' chapter 11 cases when a senior officer is required to appear and answer creditors' questions about the company's financial affairs under oath. GOLDEN OCEAN: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Golden Ocean Group, Limited PO Box 265, STE 6, Tower Hill House Le Bordage, St. Peter Port GY13QU Channel Islands, United Kingdom Type of Business: Holding companies which, through their affiliates, are in the business of acquiring, disposing, owning, managing, operating, leasing and chartering ocean-going vessels including very large crude carriers and dry bulk carriers and engaging in certain related activities. Petition Date: January 14, 2000 Chapter 11 Court: District of Delaware Judge: Sue L. Robinson Debtor's Counsel: Laurie Selber Silverstein Potter Anderson & Corroon, LLP Hercules Plaza, 1313 N. Market St. PO Box 951 Wilmington, DE 19899-0951 (302) 984-6000 Total Assets: $ 881,000,000 Total Debts: $ 880,000,000 Bankers Trust Company Agent $ 291,382,000 Kawasaki Heavy Industries, Guarantee $ 230,000,000 Capricorn Transport Inc. Guarantee $ 114,417,092 Bright Freedom Maritime, SA Guarantee $ 78,418,928 Bright Future Maritime, SA Guarantee $ 77,475,613 Polestar Carriers Limited Guarantee $ 77,161,021 Credit Agricole Indesuez, Deutsche Schiffsbank Guarantee $ 68,586,473 Chase Manhattan Bank, Banque Nationale de Paris (Hong Kong), Nedship Merchant Bank (Asia) Terence Yeung Guarantee $ 64,997,366 Griffin Shipping Inc. Guarantee $ 59,618,000 Hyacinth Shipping Corp. Guarantee $ 50,696,314 Aquarius Shipping Inc. Guarantee $ 41,480,970 Sea Winner Shipping Guarantee $ 38,865,607 Big Horn Maritime, SA Guarantee $ 35,238,034 Aries Shipping SA Guarantee $ 21,594,956 Harris Toibb Guarantee $ 10,908,000 Cobelfret (Luxembourg) SA Settlement $ 6,500,000 HARVARD PILGRIM: Moody's Assigns A Caa1 To Series 1998 Bonds ------------------------------------------------------------- $190.5 MILLION OF BONDS AFFECTED. NEW YORK, Jan 21, 2000 -- Moody's Investors Service has assigned an underlying rating of Caa1 to $190.5 million of outstanding Series 1998 bonds issued for Harvard Pilgrim Health Care. The rating assignment follows the unprecedented January 4, 2000 takeover of Harvard Pilgrim Health Care Inc. (HPHC) by the Commonwealth of Massachusetts which placed HPHC in receivership, and investor interest in the underlying credit quality of HPHC. Moody's underlying risk assessment for these bonds reflects our belief that there would be high recovery to bondholders and that the Commonwealth will actively participate in HPHC's turnaround plan. Series 1998 bonds are currently rated Aaa based on the insurance policy from FSA. Of the $190.5 million gross par outstanding, FSA's net exposure is $96.38 million. Rehabilitative Plan Due Within 30 Days The move into receivership was made possible by the HMO Insolvency Bill passed by the Massachusetts Legislature in November 1999. The bill gives the Commissioner of Insurance the ability to put an HMO under its supervision and insure that the health care providers the HMO has contracted provide coverage to the HMO's members. The court has ordered a rehabilitative plan for HPHC to be completed within 30 days. Moody's will be able to better ascertain the potential of any receivable write-offs by our rated hospitals at that time. The move into receivership legally bars providers from suing HPHC for payments past due. It is estimated that HPHC owes the Commonwealth's hospitals $300 million for claims made during calendar 1999. The forced receivership of HPHC by the Department of Insurance followed a report by HPHC that its losses for fiscal 1999 would exceed $150 million - more than 50% greater than anticipated. With over one million members, the HMO is the largest third party payer after governmental payers and a major source of revenue for industry participants in Massachusetts. Moody's is still analyzing the potential fall-out of a worst case scenario for bondholders, in which providers are forced to write-off millions in uncollectible receivables if HPHC is liquidated or sold to a for-profit with its liabilities excluded from the sale price. We believe that this scenario, at the present time, is unlikely given the interest by the Department of Insurance and hospital providers in ensuring HPHC's survival, and the desire to keep a for-profit HMO from entering what has historically been a not- for-profit payer market. Moody's currently rates 25 acute care institutions with $3.7 billion of debt outstanding. Moody's has surveyed all the hospitals in its portfolio to determine the existing exposure to HPHC and how the relationship with this important payer has changed post-receivership. HPHC experienced early difficulties integrating the computer systems of Harvard Community Health Plan with Pilgrim Health Care after these two plans merged in 1995. This problem, coupled with a pricing strategy to facilitate market growth, laid the foundation for the current financial difficulty. Without having the information system capabilities to determine the correct actuarial run-rate for pricing its services, HPHC could not provide timely and accurate production of key provider/patient management reports that would have identified this as a problem sooner. The quality and reliability of any HMO's information systems is the key to the success of its operations. In hindsight, this critical function was under-performing at HPHC and reportedly continued to be below industry norms. HPHC has publicly stated that its systems could not handle the magnitude of claims that required processing on a daily basis. Moody's Will Continue to Monitor This Situation Moody's will be actively monitoring the developments of the turnaround plan being considered by the Department of Insurance to determine the credit impact on our rated hospitals. We believe that receivership is the first step toward resolving the HPHC financial crisis; however, we need to explore the Commonwealth's commitment to HPHC and its members before we assess whether HPHC's receivership will result in rating downgrades for any of the contracting hospitals. Moody's intends to publish a more detailed report following the release of findings by the Department of Insurance in early February. ITHACA INDUSTRIES: Net Sales Decrease; Net Loss of $1.2 Million --------------------------------------------------------------- The net sales of Ithaca Industries Inc. decreased from $51.9 million to $39.1 million for the thirteen weeks ended October 31, 1998 and October 30, 1999 respectively. The company indicates that this decrease is a result of a decrease in orders from its major customers because of excess inventory levels and overall weakness in their retail sales. The company reported a net loss of $1.2 million in the 1999 quarter as compared to a net gain of $0.8 million in the 1998 period. Net sales decreased to $123.0 million for the thirty-nine weeks ended October 30, 1999 from $145.1 million for the thirty-nine weeks ended October 31, 1998. This decrease reflects customer product line changes, lowering of in-store inventory levels and weakness in certain distribution channels serviced by the company. The net loss in the six month period of 1999 was $2.2 million while in the same six month period of 1998 the company saw a net gain of $1.0 million. KCS ENERGY INC.: Case Summary ------------------------------ Debtor: KCS Energy Inc. 5555 San Felipe Road Houston, Texas 77056 Type of Business: An independent oil and gas company engaged in the acquisition, exploration, exploitation and production of domestic oil and natural gas properties. Petition Date: January 5, 2000 Chapter 11 Court: District of Delaware Judge: Peter J. Walsh KMART: Reports Rising Revenues ------------------------------ Kmart Corporation, in reporting it's financial information for the periods ending October 27, 1999, shows net sales revenue of $8,057 with net income of $43 for the quarter, and net revenue of $24,958 with net income of $14 for the six month period. Comparable periods in 1998 saw the quarter's net sales revenues at $7,642, the six month net revenue at $23,273, with net incomes of $38 and $165 respectively. On June 11, 1999, Hechinger Company, which had previously acquired substantially all of the operating assets of Kmart's former subsidiary Builders Square, Inc., filed for Chapter 11 bankruptcy protection. In the second quarter of 1999, Kmart recorded a non-cash charge of $354 million, $230 million after tax, which reflects Kmart's best estimate of the impact of Hechinger's default on lease obligations for up to 110 former Builders Square locations which are guaranteed by Kmart. On September 9, 1999, Hechinger announced that it would liquidate its stores. During the third quarter of 1999, certain locations with leases guaranteed by Kmart were subject to auction by Hechinger as part of its liquidation. The remaining locations with leases guaranteed by the company were subject to auction on November 30, 1999. Kmart is currently assessing the results of these auctions and believes its reserve to be adequate. Kmart has guaranteed leases for properties operated by certain former subsidiaries including Borders Group, Inc., OfficeMax, Inc., and The Sports Authority, Inc. The present value of the lease obligations guaranteed by Kmart is approximately $420 million. The possibility of the company having to honor its contingent obligations is dependent upon the future operating results of the former subsidiaries. LEVITZ: Fifteenth DIP Amendment ------------------------------- Judge Walrath approved a Fifteenth Amendment of the Debtors' DIP Credit Agreement. Under the Fifteenth Amendment, the Overadvance Term Lender will provide another $5,000,000. This money will be used to reduce other outstanding borrowings under the revolving credit line portion of the Debtors' post-petition financing facility. The Debtors continue to concentrate their retail operations in geographic areas where they have a strong market presence and to close stores in areas where their presence is not as strong. These substantial operational changes have caused many one-time transaction costs. The additional $5,000,000 is necessary to meet these costs and to enable the Debtors to continue to implement their business plan. The Overadvance Term Lender will advance the $5,000,000 on a subordinated basis to the existing Revolving Credit. (Levitz Bankruptcy News Issue 42; Bankruptcy Creditor's Service Inc.) MARINER: Motions to Honor Prepetition Sales & Use Tax Obligations ----------------------------------------------------------------- The MPAN Debtors estimate they owe no more $300,000 and the HEALTH Debotrs estimate they owe no more than $100,000 to various Taxing Authorities for prepetition sales and use tax obligations. Pursuant to 11 U.S.C. Sec. 507(a)(8), these claims are entitled to priority over many other claims against the Debtors' estates. To confirm a plan of reorganization, 11 U.S.C. Sec. 1129(a)(9)(C) requires full payment of these Tax Claims. Not paying these Tax Claims would lead to the Taxing Authorities taking aggressive collection action, the Debtors believe. Accordingly, by this Motion, the Debtors sought and obtained Judge Walrath's permission to pay all claims for prepetition sales and use taxes, without prejudice to their right to contest the amount of tax owed to any particular Taxing Authority. (Mariner Bankruptcy News Issue 2; Bankruptcy Creditor's Service Inc.) MT. KISCO EXECUTIVE CENTER: Case Summary ---------------------------------------- Debtor: Mt. Kisco Exec. Center, Inc. 590 Franklin Avenue Mt. Vernon, NY 10550 Petition Date: January 19, 2000 Chapter 11 Court: Southern District of New York Judge: John J. Connelly Debtor's Counsel: Jonathan S. Pasternak Rattet & Pasternak, LLP 550 Mamaroneck Ave-Ste 510 Harrison NY 10528 (914) 381-7400 Total Assets: $ 4,200,000 Total Debts: $ 4,230,500 NEUROMEDICAL: Committee Replies To Claims ----------------------------------------- The Official Committee of Unsecured Creditors of Neuromedical Systems, Inc. replies to the further response to objections of debtor and the official committee of unsecured creditors of the debtor to the claims filed by claimants Herman Erdan, Leonard Fuchs and Jackie Herbst. Erdan, Fuchs and Herbst each filed claims of $50 million. The committee states that the complaint does not support the assertion of a claim by each of the claimants. The Committee asserts that the claimants have never proven their claims. The warrants to be issued pursuant to letters purporting to include a strike price per share would never have been "in the money" - consequently none of the claimants was damaged as a result of the debtor's alleged failure to issue those warrants. The committee claims that only Herbst may assert a claim in good faith to the extent of $2.55 million based upon the performance of the stock of the debtor. The purported transaction between the debtor and the claimants was a contingent, commissioned-based agreement to issue warrants at a certain strike price for 50% of the shares the claimants allegedly caused to be sold. the debtor purported to agree further to dilute its equity in connection with the claimants' activities in raising equity. It appears that the claimants agreed to perform services, rather than pay cash, in exchange for the issuance of warrants. Claimants never had an expectation that they would be creditors of the debtor; rather, their expectations appear to be that of equity. Claimants have no claim that a certain amount was to be paid for their alleged services, or that a guaranteed minimum would be paid; they allege only that they were to be issued warrants to purchase stock of the debtor. Claimants' rights and claims, if any were only to engage in securities transactions, exercising warrants, purchasing debtor's common stock at the quoted strike price and selling the debtor's common stock at the market price. If there were no breach or if claimants were granted specific performance of the alleged contracts, Herbst would be entitled to realize a benefit, if any, from the trading of the securities of the debtor. PENNCORP FINANCIAL: Enters Confidentiality Agreement ---------------------------------------------------- Vicuna Advisers, Partners and Capital, together with WNP Investment Partnership have executed a confidentiality agreement with PennCorp whereby they have agreed, among other things, to limit trading of their Preferred Stock to other preferred shareholders of PennCorp who have executed confidentiality agreements with PennCorp. These Groups have held discussions with the management of PennCorp and its representatives and other preferred shareholders of PennCorp who have executed confidentiality agreements with PennCorp. On December 21, 1999, PennCorp and its advisors invited holders of approximately 74% of its outstanding Preferred Stock, including Advisors, to a meeting to hear a presentation regarding a proposed restructuring of PennCorp and PennCorp's progress on a proposed plan to sell substantially all of the assets of its operating subsidiaries. Although Advisers believed that PennCorp's goal in calling the meeting was to build a consensus among the members of the Ad Hoc Committee for the Restructuring, PennCorp instead indicated its intention to move forward with the sale of its subsidiaries and then consummate a liquidation of PennCorp in a Chapter 11 bankruptcy. In response to this information, on December 23, 1999, the Ad Hoc Committee delivered a letter to the board of directors of PennCorp objecting to this course of action and calling for the Board's acceptance of a Restructuring of PennCorp. The Vicuna Group and WNP believe that the Restructuring on the terms set forth in the Ad Hoc Committee's term sheet is the only viable alternative for PennCorp at this juncture to insure maximum value to PennCorp's stakeholders, including holders of Preferred Stock, or any value to the holders of the common stock. Advisors, as part of the Ad Hoc Committee, intends to take all actions at its disposal (including litigation) to prevent the consummation of the sale. Vicuna Advisers, Partners and Capital, together with WNP may be deemed to be a member of a group within the meaning of Rule 13d- 5(b) with the other members of the Ad Hoc Committee, but they expressly disclaim such membership in a group and beneficial ownership of the shares held by such other members of the Ad Hoc Committee. Vicuna Advisors LLC, Vicuna Partners LLC and Joshua G. Welch, own 335,000 shares of $3.375 Convertible Preferred Stock and 461,600 shares of $3.50 Series II Convertible Preferred Stock, totaling 1,402,488 common stock equivalents. These amounts represent 14.6% of $3.375 Convertible Preferred Stock, 16.1% of $3.50 Series II Convertible Preferred Stock, or 4.6% of common stock equivalents. They exercise shared voting and dispositive powers over the Preferred Stock held. Vicuna Capital I L.P. owns 231,600 shares of $3.375 Convertible Preferred Stock and 342,150 shares of $3.50 Series II Convertible Preferred Stock, totaling 1,002,590 common stock equivalent, with sole voting and dispositive powers. These amounts represent 10.1% of $3.375 Convertible Preferred Stock, 11.9% of $3.50 Series II Convertible Preferred Stock, or 3.3% of common stock equivalents. WNP Investment Partnership L.P. owns 103,400 shares of $3.375 Convertible Preferred Stock and 119,450 shares of $3.50 Series II Convertible Preferred Stock, totaling 399,898 common stock equivalents. WNP holds sole voting and dispositive power over the stock which represents 4.5% of $3.375 Convertible Preferred Stock, 4.2% of $3.50 Series II Convertible Preferred Stock, or 1.4% of common stock equivalents. Partners is the general partner of Capital and WNP and Advisors is the investment adviser to Capital and WNP. Welch is the Managing Member of Partners and Advisors. The principal business of each of Capital and WNP is to make investments in common and preferred stock and other interests in business organizations, domestic or foreign, with the principal objective of appreciation of capital invested. The principal business of Partners is to act as general partner of Capital and WNP. The principal business of Advisors is to provide portfolio management services to Capital and WNP. The source of funds used to purchase the shares of Preferred Stock owned was working capital of Capital and WNP. The amount of such funds was $6,136,584 for the Shares owned by Capital and $2,418,236 for the Shares owned by WNP. PHARMACY FUND: Order Confirms Amended Joint Plan ----------------------------------------------- On January 12, 2000, the Honorable Tina L. Brozman, entered an order confirming the amended joint plan for The Pharmacy Fund, Inc. and Pharmacy Fund Receivables, Inc. PLANET HOLLYWOOD: Judge Approves Plan ------------------------------------- A federal judge has approved Planet Hollywood International Inc.'s bankruptcy plan. As provided in the order, founder Robert Earl will remain CEO and Planet Hollywood will continue to operate with court protection while it restructures and sheds debt that it cannot repay, without totally liquidating the business. The company will have 21 company-owned restaurants in the United States and 10 overseas. Earl and several other major investors are injecting $30 million in new capital into the company, which was started 8 1/2 years ago with actors Sylvester Stallone, Demi Moore, Bruce Willis and Arnold Schwarzenegger as investors. Planet Hollywood closed nine poorly performing restaurants throughout the country just before declaring bankruptcy in October. It later closed one in Holland. Planet Hollywood plans to announce a new set of celebrity investors next month. PRATT & WHITNEY: To Cut 1,700 Jobs ---------------------------------- Jet-engine maker Pratt & Whitney, a unit of United Technologies Corp., said on Friday it will cut up to 1,700 jobs, or about 8.5 percent of its U.S. work force, by the end of the year to cope with a downturn in world aerospace markets. MOST OF THE cuts will be in Connecticut, and are in addition to the 2,000 cuts that the East Hartford, Conn.-based Pratt announced last August. Pratt employs about 31,000 people worldwide, including 20,000 in the United States and 13,000 in Connecticut. "The job cuts announced today are in addition to approximately 3,500 positions that Pratt & Whitney has been eliminating since the start of a major restructuring and consolidation effort in 1998," Pratt said in a news release. The latest reductions include about 1,500 hourly workers and 200 salaried positions. Most of the actions are in Connecticut, though there will be a "small impact" on Pratt workers in Georgia and Maine, Pratt spokesman Mark Sullivan said. "The bulk of the job reductions are the result of lower new engine deliveries over the next two to three years," Pratt said, adding that it will deliver less than 600 engines this year, compared to nearly 700 in 1999 and 800 in 1998. Pratt is one of the world's three big aircraft engine makers, along with General Electric Co. and Britain's Rolls-Royce Plc. SGL CORPORATION: Order Dismisses Chapter 11 Petition ---------------------------------------------------- On December 29, 1999, the Court of Appeals for the Third Circuit reversed a court order and instructed the court to dismiss the debtor's bankruptcy petition as having been filed in bad faith. Chaparral Steel Corporation and its affiliates purchased graphite electrodes from SGL Carbon Corporation and filed a proof of claim for antitrust damages arising from price-fixing activities which were the basis of the criminal guilty plea by SGL's parent corporation and CEO. Chaparral wrote a letter to Judge Farnan stating that SGL's proposed order for dismissal provides for only a partial dismissal hemmed in by a number of proposed qualifications and accommodations. Chaparral argues that upon the ruling of the Appellate Court, the case should have been dismissed. Chaparral argues that the bankruptcy court thought it had discretion to delay dismissal to allow the debtor to conduct an orderly liquidation. Chaparral offers its own proposed dismissal order. SHOE CORP: Opposes Motion To Convert Cases To Chapter 7 ------------------------------------------------------- Shoe Corporation of America, Inc. and its affiliated debtors oppose the oral motion of the Official Committee of Unsecured Creditors made at a hearing before the court on December 30, 1999 and the supplement to oral motion of Creditors Committee to convert cases to Chapter 7. The debtors have two separate parties interest in the possible acquisition of the debtors' businesses. The debtors believe that the process and interest will be severely curtailed if a Chapter 7 trustee is appointed at this time upon the conversion of the cases. The debtor is still operating its footwear departments in over 35 states in over 200 host stores, and they believe that a Chapter 7 trustee may not be in a position to continue those operations as that is generally not the role of a Chapter 7 trustee. The debtors also believe that to avoid conversion is allowing some hope of recovery for the creditors, as opposed to no recovery under a conversion. STARTER: Seeks Approval of Disclosure Statement ----------------------------------------------- SC New Haven Corporation, formerly known as Starter Corporation and its affiliates have agreed with their secured bank lenders and David A. Beckerman, former CEO of the debtors with respect to the terms of the Joint Plan of Liquidation. The plan substantially incorporates a term sheet agreement between the Lenders and Beckerman, whereby the Lenders provide a portion of the distributions to which they otherwise would be entitled to general unsecured creditors and Beckerman assures that priority claims and administrative claims are paid in full and funds an additional sum to general unsecured creditors. The debtors wish to solicit acceptances with respect to the plan, and seek to have the court consider approval of the Disclosure Statement on February 16, 2000 at 3:00 PM before Judge Peter J. Walsh. SUN HEALTHCARE: Motion To Reject Orlando Lease and Medicare Agreement ------------------------------------------------------------ The Debtors sought Bankruptcy Court approval of a stipulation, lease transfer agreement, and operations transfer agreement for some of their long-term assisted care facilities. The Department of Health and Human services objected to the Debtors' proposed transfer on the ground that it would impermissibly effect a transfer of Debtors' Medicare provider agreements in violation of Medicare regulations and bankruptcy law. HHS argued that in order for the Medicare provider agreements to be transferred, the Debtors would have to assume and assign the Medicare provider agreements pursuant to section 365 of the Bankruptcy Code. The Debtors believe they have an approach that will eliminate HHS' objection. They ask Judge Walrath to approve their rejection of the lease and Medicare Provider Agreement, and their entry into a lease termination agreement and operations transfer agreement, for the Orlando Health Care Center. Under the agreements, the new operator of this Florida facility-- Avante at Orlando, Inc.-- will not bill under the Debtors' Medicare provider agreement. Instead, the Medicare Provider Agreement will be rejected along with the lease. The Debtors estimate that rejecting this lease and transferring operational and financial responsibility to Avante will save them $296,307 per year. The Debtors' landlord agrees with this approach. Their landlord also agrees to waive his rejection claim under the lease, which could be as much as $838,191. TECMAR TECHNOLOGIES:Case Summary & 15 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Tecmar Technologies Int'l. Inc. 1900 Pike Road, Building E Longmont, CO 80501 Petition Date: January 20, 2000 Chapter 11 Court: District of Delaware Judge: Joseph J. Farnan Jr. Debtor's Counsel: Laura Davis Jones 919 North Market St, Suite 1600 Wilmington, DE 19801 (302) 652-4100 15 Largest Unsecured Creditors BDO Seidman, LLP Trade Debt $ 12,000.00 Christiania Bank og Kredikasse Trade Debt $ 2,000.00 Colin Biggers & Paisley Trade Debt $ 2,087.00 Featherson, Patrick Alleged Severance $ 82,572.00 Gambit AS Trade Debt $ 3,000.00 Imation Enterprises, Inc. Convertible Debenture $ 650,871.00 Imation Enterprises, Inc. Guarantee $ 290,000.00 Iomega Corp & Iomega Malaysia Promissory Note $1,537,691.00 Jessop & Company, PC Trade Debt $ 22,157.00 Krendl, Krendl, Sachnoff & Way Trade Debt $ 6,523.00 Oslo Stock Exchange Listing fees $ 6,675.00 R. R. Donnelly Trade Debt $ 5,313.00 State of Delaware Taxes $ 5,800.00 Wiersbolm Mellbye & Bech Trade Debt $ 1,500.00 Winton Associates, Inc. Finder's fee $ 130,000.00 TECMAR TECHNOLOGIES:Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Tecmar Technologies Inc. 1900 Pike Road, Building E Longmont, CO 80501 Petition Date: January 20, 2000 Chapter 11 Court: District of Delaware Judge: Joseph J. Farnan Jr. Debtor's Counsel: Laura Davis Jones Pachulski, Stang, Ziehl, Young & Jones P.C. 919 North Market St, Suite 1600 Wilmington, DE 19801 (302) 652-4100 20 Largest Unsecured Creditors Verbatim Corporation Trade debt $453,980.00 Manufacturer's Services Trade debt $334,344.00 Imation Enterprises, Inc. Trade debt $288,175.00 Veritas Software Trade debt $253,162.00 West World Productions, Inc. Trade debt $230,000.00 Target Logistics Services Trade debt $163,913.00 Fu Yu Manufacturing Ltd. Trade debt $115,879.00 Arrow Semiconductor Trade debt $113,548.00 Yeti/TBO Trade debt $110,900.00 Kinko's Copy Center Trade debt $107,640.00 Keystone Resort Trade debt $102,909.00 Savoir Trade debt $102,564.00 Rand Technology, Inc. Trade debt $ 99,303.00 Circle International - Den Trade debt $ 99,150.00 Sicon International Trade debt $ 92,025.00 Featherston, Patrick Alleged severance $ 82,573.00 expenses Global Computer Supplies Trade debt $ 78,294.00 CMP Media, Inc. Trade debt $ 76,981.00 American Airlines Trade debt $ 74,700.00 Staffing Solutions Trade debt $ 67,719.00 TRISM INC: Seeks Time To Either Assume or Reject Leases ------------------------------------------------------- The debtor, Trism, Inc. has already rejected or assumed all of its leases. Because the Effective Date has not occurred, the debtors, out of an abundance of caution seek to extend the 365(d)(4) deadline to avoid any argument that the leases are deemed rejected. The debtor seeks an extension for a period up to and including the earlier of the Effective Date or February 18, 2000. TULTEX CORP: Creditors To Compel Filing of Schedules ---------------------------------------------------- The Unsecured Creditors Committee requests entry of an order directing the debtors to file schedules and statements. A hearing will be held on January 19, 2000. Among first-day orders, the debtor was granted an extension of time for filing schedules and statements of affairs to March 17, 2000, a total of 105 days from the Petition Date. The Committee states that it is hindered by a lack of information in the case. The Committee learned through a press release that the debtor closed its US manufacturing operations and that it ran out of availability under the DIP Credit Facility with the Bank Lending Group. Without adequate information the Committee cannot protect the interests of the unsecured creditors. UNIPRIME CAPITAL ACCEPTANCE, INC.: Files for Chapter 11 ------------------------------------------------------- Uniprime Capital Acceptance, Inc., (OTC:UPCA), announced on January 21, 2000, that it filed for protection under Chapter Eleven of the Federal Bankruptcy Act in the District of Arizona as a means to reorganize the company and to seek the release of its assets from the SEC freeze imposed against prior management. This action was taken by new management in an effort to put the assets to use by the debtor in possession for the benefit of the approximately one thousand (1,000) shareholders and creditors. The SEC is seeking to have the assets disgorged into a Fund for the benefit of eighty-three (83) shareholders who purchased shares from the company between June 16, 1999 and August 13, 1999. UNITED COMPANIES: Equity Committee Taps Saul, Ewing --------------------------------------------------- By order entered January 12, 2000, the Official Committee of Equity Security Holders was granted authority to employ and retain the law firm of Saul, Ewing, Remick & Saul LLP nunc pro tunc to June 7, 1999. USCI INC: Significant Operating and Net Losses ---------------------------------------------- USCI Inc. has experienced and will continue to experience significant operating and net losses and negative cash flow from operations. Total revenues for the nine months ended September 30, 1999, consisting primarily of subscriber sales, were $12,627,075 compared to $32,517,023 for the nine months ended September 30, 1998. Total revenues for the three months ended September 30, 1999, consisting primarily of subscriber sales, were $2,703,650 as compared to $11,214,089 for the three months ended September 30, 1998. The decrease in revenues for the 1999 nine months and the 1999 quarter is said by the company to be directly attributable to a substantial net decline in its subscriber base. The company incurred net losses of $7,279,193 and $30,298,997 for the 1999 nine months and the 1998 nine months, respectively, and $3,970,828 and $8,791,129 for the 1999 quarter and the 1998 quarter, respectively. Historically, USCI's revenues have consisted of commissions earned as an activation agent for cellular and paging carriers and, since the last quarter of 1996, revenues from the resale of cellular services. Since completion of its transition in 1998 to becoming a reseller, USCI does not receive material revenues from agency commissions. The company bills its customers for monthly access to the underlying carrier's cellular network, cellular usage based on the number, time and duration of calls, the geographic location of both the originating and terminating phone numbers, extra service features, the applicable rate plan in effect. Consequently USCI must pay the wholesale cost of these services to the underlying carriers. The company is seeking additional debtor-in-possession financing, an expansion of the current cash collateral financing and restructuring of certain debt. There are no commitments with regard to additional sources of financing and there is no assurance that any such commitments will be obtained in the foreseeable future. According to the company, failure to obtain such financing or restructure its debt may compel USCI and all of its subsidiaries to seek protection under the federal bankruptcy statutes or otherwise cease operating and wind up its business affairs. Meetings, Conferences and Seminars ---------------------------------- February 24-26, 2000 ALI-ABA 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 Winter Conference Radisson Resort Hotel, Scottsdale, Arizona Contact: 1-561-241-7301 or 1-213-487-7550 March 8-10, 2000 RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC. Healthcare Restructurings: Successful Strategies for Managing Distressed Finances The Regal Knickerbocker Hotel, Chicago, Illinois Contact: 1-903-592-5169 or ram@ballistic.com March 10 & 11, 2000 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES Spring Seminar Hotel Monteleone, New Orleans, Louisiana Contact: 1-803-252-5646 or info@nabt.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 Conference The Pointe Hilton Squaw Peak Resort Phoenix, Arizona Contact: 1-312-822-9700 or info@turnaround.org April 6-7, 2000 ALI-ABA Commercial Securitization for Real Estate Lawyers Walt Disney World, Orlando, Florida Contact: 1-800-CLE-NEWS April 10-11, 2000 PRACTISING LAW INSTITUTE 22nd Annual Current Developments in Bankruptcy and Reoorganization Conference Grand Hyatt Hotel, San Francisco, California Contact: 1-800-260-4PLI May 4-5, 2000 RENAISSANCE AMERICAN MANAGEMENT & 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 MANAGEMENT & 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 2-6, 2000 TURNAROUND MANAGEMENT ASSOCIATION Annual Conference Hyatt Regency, Baltimore, Maryland Contact: 312-822-9700 or info@turnaround.com 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, Edem Alfeche and Ronald Ladia, Editors. Copyright 2000. All rights reserved. ISSN 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $575 for six months delivered via e-mail. 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