/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/000225.MBX T R O U B L E D C O M P A N Y R E P O R T E R Friday, February 25, 2000, Vol. 4, No. 39 Headlines AHERF: Lawsuits Filed to Recover Money Plundered From Funds AMBASSADOR EYEWARE: Case Summary and 20 Largest Creditors APPLE ORTHODONTIX: Discussions For Affiliation ATC GROUP: Seeks Order Extending Time To Assume/Reject Leases AURORA FOODS, INC.: S&P Lowers Ratings, On Watch Developing CHARTER BEHAVIORAL: Case Summary and 20 Largest Creditors DEVLIEG BULLARD: Seeks Authority To Use Cash Collateral FACTORY CARD OUTLET: Appoints New Chief Financial Officer FRUIT OF THE LOOM: Seeks To Retain Herbert Mines Associates GARY PLAYER DIRECT: General Assignment For Benefit of Creditors GIBSON'S-HOMAN CO: Files Chapter 11 Petition HC HOLDINGS: Seeks to Reject 10 Unexpired Leases LEVITZ FURNITURE: Shareholders report Holdings LIFEONE INC: Signs Letter of Intent For Reverse Merger LOEWEN: Seeks Time To Assume/Reject Leases L.V.C.I. INCORPORATED: Case Summary PRECISION AUTO CARE: Annual Shareholder Meeting Set For April 12 QUADRAX CORP: Mayer Rispler & Co. Voted Auditors SIZZLER INTERNATIONAL: Announces Operating Results SIZZLER INTERNATIONAL: Completes Repurchase of Common Stock TANNER'S: RTIN Holdings Announces Terms of Acquisitions TRANSTEXAS GAS: Plan Confirmed TRISM INC: Consummates Plan of Reorganization UNIFORET INC.: Moody's Downgrades Debt Rating; Sr Secured To Ca UNITED COMPANIES FINANCIAL: Exclusivity Extension Granted BOND PRICING - For week of February 21,2000 ********* AHERF: Lawsuits Filed to Recover Money Plundered From Funds ----------------------------------------------------------- Tenet Healthcare Corp. (NYSE:THC), through its subsidiary Tenet HealthSystem Philadelphia Inc., today filed in United States Bankruptcy Court in Pittsburgh two major lawsuits in connection with the bankruptcy of the Allegheny Health, Education and Research Foundation (AHERF). The suits were filed against the officers and trustees of AHERF and against Mellon Bank to recover restricted endowment funds misappropriated for operational uses. "Today's filings represent an important step in restoring the charitable endowments raided by the AHERF organization, and the support of the Attorney General's office in this effort will be very valuable," said Barry A. Wolfman, senior vice president of operations for Tenet's Pennsylvania region. "The officers and trustees of AHERF had a duty to use these funds for their intended purposes -- research, medical education, indigent care, or other specific use the donor intended. The donors never intended these funds to be used to keep a bankrupt organization operating so it could pay off its bankers." The first suit was filed jointly by Pennsylvania Attorney General D. Michael Fisher and Tenet on behalf of two non-profit charitable organizations, Philadelphia Health and Education Corp. (PHEC) and the Philadelphia Health and Research Corp. (PHRC). The suit against the officers and trustees of AHERF seeks to recover $70 million or more that was diverted from charitable restricted assets of these organizations to fund AHERF's distressed operations. The multimillion-dollar endowment shortfall affected indigent care, research, supplies, equipment purchases and medical education provided by PHEC and PHRC. These restricted endowment accounts were held in trust at Mellon Bank. In the spring of 1998, in one glaring example of the misuse of funds, AHERF had defaulted on paying its medical malpractice insurance premiums and was having trouble paying for essential supplies such as blood. The officers and trustees named in the lawsuit allowed AHERF to pay for more than $1 million for private golf club memberships and for tickets to sporting events. The second suit, filed by Tenet, PHEC and PHRC, seeks to recover damages from Mellon Bank and its parent, Mellon Financial Corp. According to the lawsuit, Mellon aided and abetted the scheme of AHERF's senior management to finance AHERF's distressed operations by misappropriating charitable restricted assets. Further, much of the looting of the endowment funds was accomplished through inter-company loans of the restricted assets. Thus, prior to the commencement of the looting, AHERF established a new internal loan committee to oversee and approve such loans. The committee was chaired by Mellon's chairman emeritus, and two other Mellon executives also sat on the committee. According to the lawsuit, while Mellon Bank was allowing these funds to be raided, AHERF was repaying its $87 million loan obligation to the bank group headed by Mellon. Tenet Healthcare, through its subsidiaries, owns and operates 113 acute care hospitals with 27,707 beds and numerous related health care services. The company employs approximately 118,100 people serving communities in 17 states and services its hospitals from a Dallas-based operations center. Tenet's name reflects its core business philosophy: the importance of shared values among partners -- including employees, physicians, insurers and communities -- in providing a full spectrum of health care. Tenet can be found on the World Wide Web at www.tenethealth.com. AMBASSADOR EYEWARE: Case Summary and 20 Largest Creditors --------------------------------------------------------- Debtor: Ambassador Eyewear Group, Inc. 3600 Marshall Lane Bensalem, PA 19020 Type of Business: Debtor designs, markets, sources and distributes highly-quality prescription eyeglass frames and non- prescription sunglasses to department and specialty stores, optical chains and eyewear boutiques. Petition Date: February 15, 2000 Chapter 11 Bankruptcy Case No.: 00-00985 Court: District of Delaware Judge: Joseph J. Farnan, Jr. Debtor's Counsel: David W. Carickoff, Jr. Cozen and O'Connor Chase Manhattan Centre 1201 N. Market Street, Suite 1400 Wilmington, DE 19801 302-295-2000 Total Assets: $ 12,536,962 Total Debts: $ 29,516,335 20 Largest Unsecured Creditors Han Seo Eyewear Co. Trade Debt $ 1,686,605 Kunhwa Optical Mfg. Trade Debt $ 1,200,000 See Kiang Op. Mfg. Co. Trade Debt $ 893,891 Well Arts Op. Fac. Ltd. Trade Debt $ 700,671 Sunreeve Optical Trade Debt $ 307,891 Jaeil Optical Corp. Trade Debt $ 258,513 RJ Customhouse Broker Trade Debt $ 238,440 Merrill Corp Trade Debt $ 213,769 New Star Corp. Trade Debt $ 213,535 La Fenices RL Trade Debt $ 206,603 Price Waterhouse Coopers Trade Debt $ 200,000 Windsor Optical Trade Debt $ 200,000 Houndsooth Corp. Trade Debt $ 150,000 Gibbons, Del Deo, Dolan Trade Debt $ 125,000 Chun Bo Trade Debt $ 121,247 Hoi Tat Optical Trade Debt $ 101,466 Leisure Concepts Trade Debt $ 101,000 Styl-Rite Optics Inc. Trade Debt $ 96,250 Martins SRL Trade Debt $ 88,176 Int'l Vision Expo Trade Debt $ 73,040 APPLE ORTHODONTIX: Discussions For Affiliation ---------------------------------------------- Orthodontic Centers of America, Inc. (NYSE:OCA) announced it has entered into discussions with Apple Orthodontix, Inc. (AMEX:AOI) to affiliate with up to 47 orthodontic practices presently affiliated with Apple. Apple filed for protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code on January 27, 2000. Apple provides practice management services to orthodontic practices in the United States and Canada. As of September 30, 1999, Apple had service agreements with 58 practices representing 88 orthodontists in 117 offices throughout the United States and Canada. Subject to acceptance by Apple's senior secured creditors, OCA intends to enter into a definitive agreement to acquire up to 47 of Apple's service agreements and related practice assets. The proposed Asset Purchase Agreement and subsequent closing of the transaction would be subject to review and approval by the United States Bankruptcy Court for the District of Delaware, and consent by the orthodontists whose service agreements are being acquired. Orthodontic Centers of America, Inc., founded in 1985, is the leading provider of practice management services to orthodontic practices. ATC GROUP: Seeks Order Extending Time To Assume/Reject Leases ------------------------------------------------------------- The debtors, ATC Group Services Inc., et al. seek an order extending the time to assume or reject unexpired leases of non- residential real property through the earlier of May 1, 2000 or the date of confirmation of a plan of reorganization. Currently the debtors remain lessees under approximately 91 leases from which they manage or conduct their business operations. The debtors claim that the sheer complexity of these cases and the number of leases involved support a finding of cause to extend the time to assume/reject leases. The debtors have expended a considerable amount of time and energy to continue their business operations as well as develop and confirm an effective plan of reorganization.. They have resolved issues with trade creditors, obtained final court approval of DIP credit agreement that provides for a revolving creditor and term loan facility of up to $40 million, and obtained non-binding term sheets containing commitments for $40 million in exit financing. The leases are one of the debtors' most valuable assets. Without the leases, the debtors would lose valuable facilities and be unable to continue to provide its services to its clients. AURORA FOODS, INC.: S&P Lowers Ratings, On Watch Developing ----------------------------------------------------------- Standard & Poor's lowered its corporate credit and bank loan ratings for Aurora Foods Inc. to single-'B' from double-'B'. The subordinated debt rating was lowered to triple-'C'-plus from single-'B'-plus. In addition, these ratings are placed on CreditWatch with developing implications. Developing implications mean that the ratings could be raised, lowered, or affirmed. About $600 million of rated debt is affected. The downgrade follows Aurora's announcement that its Board of Directors has formed a special committee to investigate the company's accounting practices. The practices immediately under investigation relate primarily to the accrual of trade promotion expenses in 1999, but a broader review of the company's accounting practices for prior years also will be conducted. Additionally, senior management changes and potential operating issues are significant rating concerns. Absence of meaningful financial and operating information over the near term could result in the withdrawal of the rating. Aurora Foods is a leading manufacturer and marketer of branded foods, including Duncan Hines baking mixes, Log Cabin and Mrs. Butterworth's syrup, Van De Kamp's and Mrs. Paul's frozen seafood, Aunt Jemima frozen breakfast products, Celeste pizza, Chef's Choice frozen skillet meals, and Lender's bagels. CHARTER BEHAVIORAL: Case Summary and 20 Largest Creditors ---------------------------------------------------------- Debtor: Charter Behavioral Health Systems, LLC 1105 Sanctuary Parkway Suite 400 Alpharetta, GA 30004 Petition Date: February 16, 2000 Chapter 11 Bankruptcy Case No.: 00-00989 Court: District of Delaware Judge: Roderick R. McKelvie Debtor's Counsel: Laura Davis Jones Pachulski, Stang, Ziehl, Young & Jones 919 North Market Street Suit 1600 Wilmington, DE 19801 (302)652-4100 Total Assets: $ 10 to 50 million(estimate) Total Debts: $ 100 million more(estimate) 20 Largest Unsecured Creditors Owen Healthcare Trade Debt $ 2,440,858 Rubin Postaer Trade Debt $ 2,378,204 Berry Network Trade Debt $ 1,843,214 ServiceMaster 3 Yr Contract $ 1,544,000 Manning Selvage&Lee PR Services $ 89,744 Reynolds and Reynolds Trade Debt $ 83,229 Green Spring Health Trade Debt $ 76,171 Administar Federal $ 75,027 River Rouge Trade - Rent $ 75,000 Atlanta Hilton Trade Debt $ 74,769 ML Strategies Prof Service $ 72,311 Thomas Breidenstein Stlmt of Contract $ 69,519 AON Consulting Prof Service $ 67,486 KALB Industries,NV Construction $ 60,233 SRC Software Trade Debt $ 69,374 Nat'l Car Rental Trade Debt $ 57,118 McKesson General Trade Debt $ 53,622 Hill Rom Trade Debt $ 53,268 Arthur Anderson,LLP Prof Service $ 41,043 Alston & Bird LLP Prof Service $ 30,373 DEVLIEG BULLARD: Seeks Authority To Use Cash Collateral ------------------------------------------------------- The debtor states that the current DIP Financing Agreement was to expire on February 15, 2000. The debtor has determined that it can survive and proceed to a reorganization if it has the use of cash. The debtor no longer requires DIP Financing, but according to the terms of the financing orders the debtor is prevented from using cash collateral. The debtor claims that since the Petition Date, the lenders have reduced their exposure by over $10 million. They state that the Original DIP Financing Order and the Credit Agreement serve as the means by which the Lenders repay themselves through their control of debtor's cash. The debtors claim that the lenders are attempting a forced liquidation of the debtor. FACTORY CARD OUTLET: Appoints New Chief Financial Officer -------------------------------------------------------- Factory Card Outlet Corp. (FCPYQ) announced today that James D. Constantine will become the Company's Chief Financial Officer effective March 3, 2000. Mr. Constantine will replace Frederick G. Kraegel, who has decided to make the change at this time so that he can spend more time with his family. Mr. Kraegel resides in Richmond, Virginia. Mr. Constantine served as the Senior Assistant Treasurer of Sears, Roebuck and Co. from 1991 to December, 1999. Factory Card Outlet is a chain of company owned stores offering a vast assortment of party supplies, greeting cards, gift wrap and other special occasion merchandise at everyday value prices. On March 23, 1999, the Company filed a petition for reorganization under chapter 11 of title 11 of the United States Code and is currently operating as a debtor in possession. The Company continues to focus its efforts on reaching agreement with the Official Committee of Unsecured Creditors regarding a Plan of Reorganization. FRUIT OF THE LOOM: Seeks To Retain Herbert Mines Associates ----------------------------------------------------------- The debtors, Fruit of the Loom, Inc., et al. seek court authority to assume the debtors' pre-petition agreement with, or in the alternative, to retain Herbert Mines Associates as executive search consultants. The firm will locate and present to the debtors for interviews, individuals with experience in the textile and apparel industries, with a manufacturing background; and who either now or in the past have been a CEO of a company of substantial size. If the court authorizes the pre-petition agreement, the debtors will be required to pay HMA $146,664 pursuant tot he fee arrangement. The debtors states that assumption of the HMA agreement is far more preferable than engaging another executive search firm. The debtors state that the key economic terms of the HMA agreement, a 25% fee is less than the typical market fee of 33 1/3%. GARY PLAYER DIRECT: General Assignment For Benefit of Creditors --------------------------------------------------------------- Gary Player Direct. Inc. (OTC Bulletin Board: GPLY), announced today that the Company had executed a General Assignment for the Benefit of Creditors on February 21, 2000. The Assignee is The Hamer Group of Sherman Oaks, California. The Company has been conducting its operations as Gary Player Direct since April of 1999 following the merger of Golf One Industries, Inc. d/b/a Gary Player Direct with and into Grafix Corporation. Prior to the merger with Grafix Corporation, Golf One Industries and two subsidiary corporations -- Rhino Marketing, Inc. and Gran Prix Marketing, Inc. -- were in the business of manufacturing and distributing golf clubs. These subsidiaries commenced their business in 1995 and 1997, respectively. Since inception, the Company's cash requirements have exceeded its cash flow from operations and, at December 31, 1999, the Company had a working capital deficit of $18,011,565. As a result, the Company had been dependent on loans and sales of securities to continue its operations. In addition, at December 31, 1999 the Company has reported in its 10-QSB current liabilities of approximately $18.6 Million and losses for the nine months ended December 31, 1999 in excess of $9.5 Million. During the past several weeks, the Company's bank accounts have been levied upon by creditors of the Company making operations extremely difficult to continue. The Company is a public company required to file reports with the Securities & Exchange Commission. As of October 1999, certain SEC reports had not been filed by the Company and on October 19, 1999, the Company's common stock was delisted from trading on the Nasdaq OTC Bulletin Board. Upon assuming control of the Company in October of 1999, the Company's present Board of Directors took appropriate steps to comply with the Company's reporting obligations and relist the common stock on the Nasdaq OTC Bulletin Board. The Company completed its outstanding SEC reports and subsequently the Company's common stock was approved for quotation on the Nasdaq OTC Bulletin Board on or about January 14, 2000. The financial statements prepared for the September 30, 1998 and March 31, 1999 fiscal years and subsequent periods revealed the existence of liabilities well in excess of those anticipated by the Board. In an effort to restructure the Company, the Board made an extensive search to find a strategic partner or a merger candidate to resolve the operating difficulties experienced by the Company. As a result of the Company's significant liabilities and pending and threatened litigation, the Company was unsuccessful in completing any acquisitions, mergers or sales transactions. Additionally, the Company was unsuccessful in finalizing an asset purchase agreement that had been previously negotiated by the Company's prior management with The Player Group to obtain a perpetual license to utilize the name Gary Player and the associated trademarks. The Company considered seeking protection under the United States Bankruptcy Code, but believed that executing a General Assignment for the Benefit of Creditors would be more effective and allow for a greater potential recovery to the creditors of the Company. The Company's management has evaluated its options in light of the Company's financial condition. California law provides for an orderly liquidation of assets by an independent Assignee. Upon the occurrence of the General Assignment for the Benefit of Creditors, The Gary Player Group's Direct Marketing Agreement with the Company was automatically terminated and The Gary Player Group revoked the license in favor of the Company to utilize the name Gary Player Direct as the Company's corporate name. The Direct Marketing Agreement between the Company and The Gary Player Group contains specific provisions that provide for the immediate termination of the Direct Marketing Agreement based on insolvency, bankruptcy or the making of an assignment for the benefit of creditors. Mr. Player and The Player Group notified the Company on numerous occasions that Mr. Player's reputation built throughout five decades of golf has been irreparably harmed by constant complaints from members of the general public. Under existing bankruptcy law and case law decisions applicable in California and Delaware, a Chapter 11 debtor-in-possession cannot compel a licensor (such as The Gary Player Group) to consent to an assignment of the licensee's rights under a license agreement to a third party without the explicit consent of the licensor. The Company was unable to obtain such consent from The Gary Player Group so the commencement of Chapter 11 would bring no benefit to the creditors and would increase costs to the Company. The Company accepted the resignations of Mr. Marc Player as the interim President and Chief Executive Officer of the Company as well as a member of the Board of Directors, Pamela J. Campbell as a Director, Thomas P. Gallagher as a Director and Chairman, and Carl Casareto as Executive Vice President. In addition, upon the occurrence of the Assignment, it is anticipated that secured creditors of the Company's subsidiaries Gran Prix Marketing, Inc. and Rhino Marketing, Inc. will commence foreclosure proceedings on the assets of those entities. The Hamer Group, Inc. will notify all creditors and shareholders of the Company by mail as to the procedures to be followed for the submission of claims against the Assignment estate. The Assignee will furnish creditors and shareholders with a claim form which should be completed and returned to the Assignee in accordance with the instructions to be furnished by the Assignee. GIBSON'S-HOMAN CO: Files Chapter 11 Petition -------------------------------------------- According to a report in Crain's Cleveland Business on February 21, 2000, Gibson-Homans Co., a Twinsburg-based maker of caulks, sealants, wallcover adhesives and roof and driveway coatings, filed a Chapter 11 petition last Tuesday, Feb. 15, in U.S. Bankruptcy Court in Akron, the company listed assets of $26.1 million and liabilities of $35.2 million. Gibson-Homans has been searching for a new owner since mid-1999. With its largest shareholders unwilling to provide more capital, Gibson-Homans began to look for someone that would. Last September, the company reportedly hired McDonald Investments Inc., an investment banking firm owned by KeyCorp, to identify potential buyers for the company, which generated $60 million in revenue last year. The company's two largest secured creditors, National City Corp. of Cleveland and Provident Bank of Cincinnati, also wanted to see the company file for Chapter 11, a company spokesman said. The two banks are still owed a total of $7 million under a $13.5 million credit line. HC HOLDINGS: Seeks to Reject 10 Unexpired Leases ------------------------------------------------ The debtors, HC Holdings, Inc., Custom Shop Corp., Drexel Shirt Co. Inc. and The Custom Shop Fifth Ave. Corp. seek to reject ten unexpired leases of nonresidential property. Acquisition Corp. has notified the debtors that it does not intend to assume the leases. As the Sale Motion contemplates the sale of substantially all the debtors' assets, the debtors no longer have use for the leases. The rejected leases cover the following locations: Old Orchard Skokie, Illinois Fashion Outlet of Las Vegas Las Vegas, Nevada MacArthur Norfolk, Virginia Dearborn Fairlane Town Center Dearborn, Michigan Twelve Oaks Mall Novi, Michigan 60 Wall Street New York, NY Columbus City Center Columbus, Ohio Westfarms Farmington, Conn Boylston Street Boston, MA Gavidas Commons Minneapolis, MN LEVITZ FURNITURE: Shareholders report Holdings ---------------------------------------------- Court Square Capital Limited, Citibank, N.A., Citicorp, Citigroup Holdings Company, and Citicorp Inc., bank and parent holding company, beneficially own 4,764,888 shares of the common stock of Levitz Furniture Inc. The shares represent 15.9% of the outstanding shares of common stock of the company and are comprised of 1,280,000 shares of voting common stock beneficially owned by Court Square Capital Limited, a subsidiary of Citibank, N.A., and includes 3,484,888 shares of non-voting common stock beneficially owned by Court Square Capital Limited, all or a portion of which may be converted into voting common stock. LIFEONE INC: Signs Letter of Intent For Reverse Merger ------------------------------------------------------ LifeOne, Inc. (LONE) announced that it has signed a non-binding letter of intent to complete a reverse merger with Communicata Limited (www.communicata.com), a Scotland-based e-business incubator and developer of e-business solutions. The letter of intent contemplates that Communicata would merge with and into LifeOne, or a wholly-owned subsidiary of LifeOne, and that Communicata shareholders will own 90 percent of the post-merger shares. LifeOne, Inc., formerly National Affiliated Corporation, filed for protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Maryland on December 3, 1999. On that date, the Office of the United States Trustee appointed Charles R. Goldstein as Chapter 11 trustee of the Company pursuant to the order of the United States Bankruptcy Court for the District of Maryland. The letter of intent with Communicata is non-binding and is subject to a number of contingencies, including the approval of the United States Bankruptcy Court. LOEWEN: Seeks Time To Assume/Reject Leases ------------------------------------------ The Debtors are working diligently, they say, the restructure their business operations but have yet to validate their business plan with the key constituencies. As a result, the Debtors find that they are simply unable to determine at this time whether assumption, assumption or assignment or rejection of their non- residential real property leases is in the best interests of their estates and creditors. To avoid premature rejection of a beneficial lease or improvident assumption of a burdensome lease, the Debtors ask Judge Walsh to extend, pursuant to 11 U.S.C. Sec. 365(d)(4), their time within which to decide how to dispose of leases through the time of confirmation of their plan of reorganization. This open-ended extension is not without precedent, the Debtors argue, pointing to identical relief granted by Judge Walsh in In re Montgomery Ward Holding Corp., Case No. 97-1409 (PJW)(Bankr. D. Del. Feb. 19, 1999), by Judge Balick in In re Continental Airlines, Inc., Case No. 90-932 (HSB) (Bankr. D. Del. Jan. 27, 1992), and by other courts overseeing multi-billion dollar reorganizations, including In re Federated Department Stores, Inc., No. 1-90-00130, 1990 Bankr. LEXIS 425 (Bankr. S.D. Ohio Mar. 6, 1990). (Loewen Bankruptcy News - Issue 19; Bankruptcy Crediotr's Service Inc.) L.V.C.I. INCORPORATED: Case Summary ----------------------------------- Debtor: L.V.C.I. Inc. A Nevada Corp. dba Meadows Inn 525 E. Bonanza Rd Las Vegas, NV 89101 Type of Business: Motel renting to daily, weekly, and monthly tenants Petition Date: February 16, 2000 Chapter 11 Court: District of Nevada Bankruptcy Case No.: 00-11088 Judge: Linda B. Riegle Debtor's Counsel: James F. Lisowski, Sr. Lisowski Law Firm, CHTD. 1661 E. Flamingo Rd Suite #6 Las Vegas, NV 89119 702-737-6111 Total Assets: $ 1,627,000 Total Debts: $ 3,000,000 Largest Unsecured Creditors Nevada Beverage Trade $ 2,277 Bonanza Beverage Trade $ 590 Thyssen Dover Elevator Trade $ 274 Brady Industries Trade $ 573 MGC Communications Trade $ 341 Southern Wine Trade $ 194 Las Vegas Food Distributors Trade $ 179 Deluca Trade $ 590 Western Cash Register Service $ 184 Commercial Lighting Trade $ 208 McLeod Telephone $ 180 Allstate Fire Equip Service $ 131 Alltel Telephone $ 84 Clark County Produce Trade $ 179 Carlson Electric Service $ 191 Pepsi Bottling Group $ 126 Capital Crossing Bank First Trust Unknown Arvis Forest Second Trust Unknown PRECISION AUTO CARE: Annual Shareholder Meeting Set For April 12 ----------------------------------------------------------------- The annual meeting of shareholders of Precision Auto Care, Inc. for 1999 will be held at the company's headquarters located as 748 Miller Drive,S.E., Leesburg, Virginia on April 12, 2000 at 11:00 a.m., for the following purposes: 1. To elect three Class II Directors to serve for a term of three years; 2. To consider approval of the issuance of 71,111 shares of common stock by the company in payment of interest in connection with a $2,000,000 Subordinated Debenture due September 30, 2000; 3. To consider approval of the adoption of the 2000 Outside Directors' Stock Plan and the reservation of 50,000 shares for issuance thereunder; 4. To consider approval of the appointment of Ernst & Young LLP as independent auditors for the fiscal year ending June 30, 2000. Only holders of shares of common stock of record on the books of the company at the close of business February 23, 2000 will be entitled to notice of and to vote at the 1999 annual meeting. QUADRAX CORP: Mayer Rispler & Co. Voted Auditors ------------------------------------------------ Quadrax Corporation confirms that on December 27, 1999, the Board of Directors, upon the recommendation of management, voted to appoint Mayer Rispler & Company, P.C. to act as independent auditors for the company for the fiscal year ending December 31, 1998 and December 31, 1999, replacing Livingston & Haynes, P.C. Livingston & Haynes, P.C. had not commenced work on the audit, and had no differences of opinion with the company concerning its financial reports or accounting principles. The decision to change accountants was recommended by the Board of Directors. SIZZLER INTERNATIONAL: Announces Operating Results -------------------------------------------------- Sizzler International, Inc. has announced certain preliminary operating results for the third quarter of fiscal 2000 as well as the outcome of a number of strategic moves undertaken to position the company for continued growth. As a result of these actions and its previously announced strategic growth plan, Sizzler anticipates achieving additional positive results for the remainder of the year. When Sizzler reports its third quarter earnings on March 8, 2000, the company expects to announce increases in its U.S. Sizzler and Australian KFC comparable store sales and guest counts. The increase in the U.S. Sizzler guest counts represents the first increase reported in over two years. Similarly, the company expects to report third quarter increases in revenues over fiscal 1999's third quarter. These successes reflect Sizzler's ongoing emphasis on restaurant operations including cost controls, positive customer response to the enhanced food quality and cooking methods, and early success Sizzler has achieved with its store remodeling program. The company plans to continue with the implementation of its previously announced strategic growth plan. Among the primary goals of this plan are the remodeling and repositioning of domestic restaurants, which has yielded positive results since its initiation in the Fall of 1999, the acquisition of a proven restaurant concept, the expansion and repositioning of Asian stores, and the co-branding of its Australian KFC restaurants. As previously reported, the company has also completed the repurchase of approximately half of the 1.5 million shares of common stock it has been authorized to repurchase by its Board of Directors. Between Sizzler's November 11, 1999 announcement that its Board of Directors had authorized the repurchase of up to 1.5 million shares, and February 4, 2000, the company had bought 706,700 shares of its common stock, all in open market transactions. Subject to applicable law and other factors, the company expects to continue its previously announced stock repurchase program. The company also announced the final financial adjustments related to its 1996 Chapter 11 reorganization, including a $6.6 million charge to third quarter earnings. The charge resulted from the completion of an extensive review of the complex financial issues that resulted from the reorganization. "As a new management team, we have devoted most of the last year to re-positioning the company to achieve excellent results going forward. Part of this task involved the closure of any open items remaining from the 1996 Chapter 11 reorganization," remarked Charles Boppell, President and CEO of Sizzler International. "Operationally, we have not been affected by the reorganization for quite some time. However, we recognized that certain financial matters remained outstanding which required a thorough evaluation. After our extensive review of the numerous claims filed during the reorganization and other related costs, management believes that there will be no further financial costs or impacts from the reorganization, and is therefore comfortable in finalizing the reorganization accounting with this $6.6 million charge." Following the filing of its Chapter 11 reorganization in 1996, Sizzler was presented with claims from approximately 10,000 creditors. At that time, in estimating the expected costs the company would incur from the reorganization, the company evaluated the costs for claims, legal services, losses on property sales, the write-down of balance sheet items, and other items. Sizzler estimated the sum total of the reorganization and restructuring costs to be $108.9 million, and took a reserve in that amount in consultation with its outside advisors. Sizzler anticipates that all allowed claims of its creditors will be paid in full plus interest. After an assessment of all of the costs associated with the reorganization, Sizzler's management has determined that the original $108.9 million estimate may be lower than the final expected cost by $6.6 million. As such, Sizzler will recognize a $6.6 million charge against earnings on its third quarter 2000 income statement, which will be released March 8, 2000. Importantly, because the final payment was made to the trustee in January 2000, the company does not anticipate any further cash outlay. The company has now settled substantially all of the original claims and does not anticipate any further charges relating to the reorganization. To date, Sizzler has closed sale-leaseback transactions for 43 of the 67 KFC and Sizzler Australian restaurants included in the sale-leaseback program the company announced in November 1999. Sizzler expects to close sale-leaseback transactions for 16 properties during the fourth quarter of its fiscal 2000, which will end on April 30, 2000. The company expects to realize approximately US $34 million in cash once the sale-leaseback program is complete. Of this amount, Sizzler has already received approximately US $25 million from the transactions that have closed. The company will utilize the proceeds of the sale- leaseback to finance the capital expenditures made as part of its strategic growth plan, including the aforementioned restaurant remodeling and repositioning. The sale-leaseback transactions are being conducted on a property-by-property basis. Overall, the transactions are expected to generate a net gain of approximately US $3.3 million. Those that are sold for more than the book value are expected to produce a net gain of approximately US $8.8 million. Those that are sold at less than the book value are expected to generate a net loss of approximately US $5.5 million. The company is required under Generally Accepted Accounting Principles to recognize all losses immediately and defer any gains over the life of the leases. As such, the company expects to make a non-cash charge of $5.5 million in its third quarter earnings and defer the $8.8 million gain over the life of the leases, which average 8 years. The net effect of the sale-leasebacks is expected to affect Sizzler's fiscal 2001 earnings by less than $0.01 per share. The company does not anticipate the recognition of any further losses in connection with the anticipated sale-leaseback of its Australian properties. "Although the accounting treatment of our Australian sale- leaseback transactions forces us to record a non-cash charge and defer our gains, we remain convinced that this event will create a significant amount of shareholder value, and give us the primary financial means for implementing our growth strategy, " commented Steven Selcer, Sizzler's CFO. A net operating loss carry-forward of approximately $134 million is available to Sizzler to offset future taxable earnings for purposes of reducing the company's income tax payments. However, the benefit of this net operating loss carry-forward could not be recognized until Sizzler demonstrated that it was "more likely than not" capable of realizing the benefits through profitable operations. As a result of Sizzler's 12 consecutive quarters of profitability, as well as the $8.8 million of deferred gain to be recognized from the sale-leasebacks, the company believes that it has sufficiently demonstrated that it is "more likely than not" capable of recognizing a benefit from the net operating loss carry-forward. Accordingly, Sizzler will record an income tax benefit on its third quarter 2000 income statement amounting to $5.9 million. SIZZLER INTERNATIONAL: Completes Repurchase of Common Stock ----------------------------------------------------------- Sizzler International, Inc. has completed the repurchase of approximately half of the 1.5 million shares of common stock it has been authorized to repurchase by its Board of Directors. Between Sizzler's November 11, 1999 announcement that its Board of Directors had authorized the repurchase of up to 1.5 million shares, and Feburary 4, 2000, the company had bought 706,700 shares of its common stock, all in open market transactions. "We continue to believe that Sizzler's stock is significantly undervalued, both in terms of financial performance as well as our growth potential. The growth in our revenues and net income, as well as very favorable valuation ratios when compared to our restaurant industry peers, result in the conclusion that Sizzler's stock price is strongly undervalued. Since we are undervalued on both growth and value measures, we believe Sizzler's stock should be attractive both to growth and value investors alike, and we intend to lead the way by continuing to increase our investment in the company's future." said Charles Boppell, President and CEO of Sizzler International. Subject to applicable law and other factors, the company expects to continue its previously announced stock repurchase program. The program will be conducted from time to time on the open market or in negotiated transactions. Sizzler currently has approximately 28 million shares of common stock outstanding. Sizzler International, Inc. operates, franchises or joint ventures 347 Sizzler restaurants worldwide, in addition to the 101 KFC restaurants in Queensland, Australia. TANNER'S: RTIN Holdings Announces Terms of Acquisitions ------------------------------------------------------- RTIN Holdings, (OTCBB:RTIN), Longview, Texas, has paid $325,000 in Cash and an additional $125,000 in indemnity for certain officers and directors of the now defunct Tanners Restaurant Group Inc. (OTCBB:ROTI). The$450,000 represents full payment for substantially all the assets of all the subsidiaries of Tanner's Restaurant Group Inc. The sale has been approved by the US Bankruptcy Court in Atlanta, GA. With historical annual revenues of $9 million and 8 operating restaurant producing an estimated $1.2 million in EBITDA, the company expects an impact on earnings by nearly $0.10 cents per share in this division. RTIN Holdings has paid $3.1 million dollars for the privately held Regulatory Solutions Inc. (RSI). The purchase is to be paid in three installments, one payment each year with mandatory conversion into restricted common stock of the company. The stock's conversion price will be an average of the stock's price 30 days prior to the conversion. Additionally there is an earn- out provision for the company's principal management upon meeting certain performance guidelines set forth in the agreement. Current management of RSI anticipates meeting or exceeding these guidelines respectively. Based on projected revenues of $ 4,200,000, the company is anticipating earnings of $0.15 per share from this division, in the year 2000. Stanley L. Swanson, CEO stated, "I believe we are finally building the company we have all been waiting for. With several opportunities for expansion and growth, it pleases me to see that we now have depth and growing professional resources to assist us with the future of RTIN." Curtis A. Swanson, CFO stated, "The diversification that the current acquisitions have given us, sets the tone of RTIN as a holding company. We have not lost our focus in the restaurant industry, nor have we lost sight of ongoing acquisitions within the restaurant industry. We are simply going to limit our involvement in operations to focus on Franchising and explore the world of acquisitions. There are many well-run, very profitable businesses to acquire and I want to be focused on growth opportunities, not the day to day operations of the subsidiaries. We have secured operational professionals that will assist us within our most management intensive industry, and we feel confident in our future." When commenting on the recent acquisition of RSI, Mr. Swanson said; "I don't think anyone fully understands the positive impact this transaction will have on this company and our shareholders in the future. Mr. Wasserman, CEO of RSI is truly an expert in the field of regulatory compliance and brings with him a tremendous base of knowledge, contacts, and resources with which we plan to develop a leading internet presence for business to business commerce in the regulatory, safety, and training segments. The RSI products are something that virtually every business in America needs. The ability to reduce liability exposure for owners and shareholders alike as well as provide a safe, healthy environment for people to work is a universal issue. We are tremendously optimistic about what this new acquisition provides in the way of future opportunities for RTIN and our shareholders." Restaurant Teams International, Inc. is a public holding company whose stock trades on the fully reporting NASDAQ OTC BB. TRANSTEXAS GAS: Plan Confirmed ------------------------------ TransTexas Gas Corporation reports that the United States Bankruptcy Court for the Southern District of Texas, Corpus Christi Division, has signed an order confirming the company's Plan of Reorganization under Chapter 11 of the United States Bankruptcy Code. The Plan will take effect and be consummated on the Effective Date, which is expected to be as soon as is practicable. On the Effective Date, the company's existing securities, including a $450 million Senior Secured Note, $115.8 million of Subordinated Notes and all of its issued and outstanding shares of common stock will be canceled. The company will issue $200 million in New Senior Secured Notes, shares of New Senior Preferred Stock, shares of New Junior Preferred Stock, shares of new common stock, Warrants to purchase additional shares of new common stock, and cash to the holders of the Senior Secured Note claim. Holders of the Subordinated Notes and old common stock, as well as holders of general unsecured claims, will receive no direct distributions under the Plan. However, the holders of the Senior Secured Note claim have agreed to reallocate a portion of their Plan distribution as follows: (i) holders of Subordinated Note claims will receive either cash, shares of New Senior Preferred Stock, or Shares of New Junior Preferred Stock, (ii) holders of general unsecured claims will receive cash and shares of New Senior Preferred Stock, and (iii) holders of old common stock will receive shares of new common stock and Warrants. Other classes of creditors will receive distributions as outlined in the Plan. Holders of allowed claims and interests as of 5:00 p.m. (CST) on February 15, 2000 (the Distribution Record Date) were to be entitled to participate in Plan distributions. The company also expects, in connection with the consummation of the Plan, to execute a $52.5 million exit financing facility and amend its existing DIP Credit Agreement and Revolving Accounts Receivable Credit Facility. TRISM INC: Consummates Plan of Reorganization ---------------------------------------------- TRISM, Inc., reputedly the nation's leading transportation company specializing in the transportation of heavy weight, over- dimensional, environmental, and secured materials has consummated its Plan of Reorganization. In accordance with the Plan, the company converted $86.2 million of existing Senior Subordinated Notes into an aggregate principal amount of $30 million of New Senior Subordinated Notes, due 2005, bearing interest at the rate of 12% per annum and 95% of the new common stock of the reorganized TRISM. Existing common stockholders will receive 5% of the new common stock of the reorganized TRISM. Under the Plan, the company significantly reduced its long-term debt, will pay all trade debt in full, secured a multiyear $42.5 million financing arrangement and, under the direction of its current management team, will continue with its multifaceted specialized transportation and logistics operations. Ed McCormick, Chairman of the Board and Chief Executive Officer of TRISM, Inc. stated the following, "We are pleased to bring closure to this process and look forward to successfully building on a leaner and well capitalized TRISM. I would like to personally thank our customers, suppliers, lenders and management team for their support and efforts during this process. Our entire company is excited about the opportunities at TRISM as we continue setting the standard of being the premier specialized transportation company in North America." UNIFORET INC.: Moody's Downgrades Debt Rating; Sr Secured To Ca --------------------------------------------------------------- Moody's Investors Service downgraded the senior secured debt ratings of Uniforet, Inc. to Ca From Caa1. This action is prompted by the company's increasingly tight liquidity, and the recent announcement by the company that it does not expect to be able to make the April 15, 2000 coupon payment on its long term notes. Uniforet has experienced prolonged poor performance at its Tripap mill uncoated groundwood mill, and severe liquidity problems have developed. Existing C$30mm credit facilities are now fully utilized, and the company has not been able to access additional short-term funding. Moody's believes that the company's facilities are relatively high cost, and the enterprise value of the company is well below current outstanding debt. The rating reflects the possibility that investors could suffer a material loss of principal. Uniforet is a Montreal, Quebec based manufacturer of lumber, pulp, and groundwood papers. UNITED COMPANIES FINANCIAL: Exclusivity Extension Granted --------------------------------------------------------- United Companies Financial Corporation and certain of its subsidiaries filed a plan of reorganization on February 16, 2000 in connection with their chapter 11 cases which are pending in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. At a hearing held on February 16, 2000, the Bankruptcy Court generally extended the exclusivity periods during which only the company may file a plan of reorganization and solicit acceptances thereto to May 1, 2000 and June 26, 2000, respectively, but also granted permission to the official committee of equity security holders appointed in the chapter 11 cases to file a proposed plan of reorganization. The company's proposed plan of reorganization provides for distributions to creditors and equity interest holders in the event that the company or its assets are either sold or remain as a going concern. In the event of a sale transaction, the proceeds of such transaction will be distributed among the holders of the company's bank claims, senior note claims and general unsecured claims. In the event the company or its assets are not sold, ninety-five percent of the company's reorganized equity would be distributed to holders of bank claims, senior note claims and general unsecured claims, four percent to subordinated bondholders and, assuming senior classes of creditors consent, one percent to existing equity interest holders. Additionally, in either event, a liquidation trust would be created containing certain potential claims and causes of action, if any. The beneficial interests in the trust are proposed to be distributed in differing amounts dependent upon whether the company and its assets are sold. The company has reserved its right to amend the proposed plan of reorganization. On December 29, 1999, the company announced the execution of a letter agreement for the sale of the company's financial assets to EMC Mortgage Corporation, subject to definitive documentation, higher and better offers and approval of the Bankruptcy Court. The company announces that negotiation of the definitive documentation for the contemplated EMC transaction continues and, additionally, that other prospective purchasers are currently conducting due diligence. United Companies Financial Corporation is a specialty finance company that historically provided consumer loan products nationwide and currently provides loan services through its lending subsidiary, UC Lending(R). The company filed for chapter 11 on March 1, 1999. BOND PRICING - For week of February 21,2000 =========================================== DLS Capital Partners Inc., Following are indicated prices for selected issues: Acme Metal 10 7/8 '07 17 - 19 (f) Ameriserve 8 7/8 '06 15 - 18 (f) Asia Pulp & Paper 11 3/4 '05 85 - 86 E & S Holdings 10 3/8 '06 37 - 40 Fruit of the Loom 8 7/8 '06 5 - 7 (f) Genesis Health 9 3/4 '05 16 - 18 Geneva Steel 11 1/8 '01 19 - 21 (f) Globalstar 11 1/4 '04 56 - 58 Hechinger 9.45 '12 6 - 9 (f) Integrated Health 9 1/4 '08 4 - 6 (f) Iridium 14 '05 3 - 4 (f) Loewen 7.20 '03 50 - 52 (f) Paging Network 10 1/8 '07 63 - 65 (f) Pathmark 11 5/8 '02 32 - 34 Pillowtex 10 '06 42 - 44 Revlon 8 5/8 '08 41 - 43 Rite Aid 6.70 '01 82 - 84 Service Merchandise 9 '04 12 - 13 (f) Sunbeam 0 '18 14 - 15 TWA 11 3/8 '06 36 - 38 United Artists 9 3/4 '08 2 - 5 Vencor 9 7/8 '08 18 - 20 (f) ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. 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