/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/000417.MBXT R O U B L E D C O M P A N Y R E P O R T E R Monday, April 17, 2000, Vol. 4, No. 75 Headlines ABATTI FARMS: Case Summary and 20 Largest Unsecured Creditors ACME STEEL: To Up Prices of Hot Rolled Carbon; Alloy Steel AMERICAN ECO: S&P May Change Ratings AMERICAN LAMINATES: Assets To Be Auctioned In May AURORA FOODS: Class Action Commenced By Purchasers BUCKEYE EGG: Fly Infestations May Force It into Bankruptcy CHECKERS DRIVE-IN: Restaurants Sold To Pay Off Debt CRIIMI MAE: Reports Results For Fourth Quarter and Year-End DOW CORNING: Government Delays Emergence from Chap 11 Protection FACTORY CARD OUTLET: Seeks Extension of Exclusive Periods GULF STATES: Union Rejects Contract Offer MICROAGE INC: Files Chapter 11 Petition For Restructuring NEUMAN DISTRIBUTORS: Owes More Than $100 Million in Debts NEW ROCHELLE: Case Summary and 14 Largest Unsecured Creditors PLANET HOLLYWOOD: Wilbur Ross to Invest in Chain PRISON REALTY: CCA To Move Its Inmates RIGCO NORTH AMERICA: Court Approves Sale of FPS Laffit Pincay TAMBORIL CIGAR: Announces Chapter 11 Filing TIMESTONE CAPITAL: Case Summary TULTEX: Russell To Purchase of DISCUS TURBODYNE TECHNOLOGIES: Reports Financial Results UNITED ARTISTS: In Default Under Certain Covenants With Lenders UNITED HEALTHCARE: Seeks To Fix Administrative Claim Bar Date VENCOR: Announces Amendment To DIP Financing ********* ABATTI FARMS: Case Summary and 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Tony Abatti Farms, LLC 1736 Austin Road El Centro, CA 92243 Petition Date: April 11, 2000 Chapter 11 Court: Southern District of California Bankruptcy Case No.: 00-03709 Judge: Peter W. Bowie Debtor's Counsel: Michael D. Breslauer Solomon, Ward, Seidenwurm & Smith, LLP 401 B Street, Suite 1200 San Diego, CA 92101-4235 (619) 231-0303 Total Assets: $ 1 million above Total Debts: $ 1 million above 20 Largest Unsecured Creditors AmeriBrom, Inc. Trade Debt $ 27,381 Beta Seed, Inc. Trade Debt $ 45,548 Bud Ashurst Trade Debt $ 29,032 Freeman Balers Trade Debt $ 25,409 Greg Bentley Electric Trade Debt $ 77,223 Harvest Power, Inc Trade Debt $ 77,258 Heedstart Nursery Trade Debt $ 40,307 Imperial Harvest 322 Magnolia Avenue El Centro, CA 92243 Trade Debt $ 283,626 Imperial Irrigation District, PO Box 927 Imperial, CA 92251-0937 Trade Debt $ 298,179 KC Manufacturing Trade Debt $ 43,924 Lopez Packing Trade Debt $ 32,380 Pan America Underwriters Trade Debt $ 45,478 Poli-Twine Western Trade Debt $ 55,200 RDO Equipment Co. Trade Debt $ 36,328 SoCo Groups Trade Debt $ 51,164 Steve Nickus Agri. Trade Debt $ 144,485 Stoker Company, Inc. PO Box 907 Imperial, CA 92251 Trade Debt $ 662,570 The Dune Company of IV PO Box 4969 Yuma, AZ 85366 Trade Debt $ 738,803 Torrences Farm Implement Trade Debt $ 51,215 Zdonek & Wolowixz Trade Debt $ 46,569 ACME STEEL: To Up Prices of Hot Rolled Carbon; Alloy Steel ---------------------------------------------------------- Acme Steel Company announced it will increase transaction prices $20 per ton, for hot rolled carbon and alloy sheet and strip steel products, effective with new orders promised for delivery July 3, 2000 or later. Additional changes to the extras may be implemented as conditions warrant. Acme Metals Incorporated (OTC Bulletin Board: AMIIQ), through its operating subsidiaries, is a fully integrated producer of steel, steel strapping and strapping products, and welded steel tubing. On September 28, 1998, Acme Metals and its subsidiaries filed separate voluntary petitions for protection and reorganization under Chapter 11 of the United States Code. The Company is in possession of its properties and assets and continues to manage its business as debtor-in- possession subject to the supervision of the Bankruptcy Code. Its common stock is listed on the Bulletin Board of the National Association of Securities Dealers under the symbol AMIIQ. AMERICAN ECO: S&P May Change Ratings ------------------------------------ Standard & Poor's placed its triple-'C'-plus corporate credit rating and its triple-'C'-plus senior unsecured debt rating for American Eco Corp. on CreditWatch with "developing" implications. Developing implications mean that ratings could be raised, lowered, or affirmed. About $120 million of debt securities are affected. The CreditWatch listing follows American Eco's announcement that it has engaged Houlihan Lokey Howard & Zukin Capital to assist it in exploring strategic alternatives to maximize shareholder value, including a possible restructuring of the company or a potential business combination. Liquidity is very limited. As of Nov. 30, 1999, American Eco had about $5 million of cash and about $7.5 million in availability under its $30 million revolving credit facility. In addition, the company has an interest payment of $5.7 million, due May 15, 2000, associated with its $120 million, 9.625% senior unsecured notes. Failure of the company to address near-term liquidity issues could result in a default on its debt obligations. Credit quality, however, could be enhanced if American Eco is acquired by a financially stronger company. Houston, Texas-based American Eco is a consolidator of outsourcing services to the energy, pulp and paper, and power generation industries. The company also provides speciality fabrication services. Standard & Poor's will monitor developments as they unfold before taking a rating action. AMERICAN LAMINATES: Assets To Be Auctioned In May ------------------------------------------------- The Kansas City Star reports on April 11, 2000 that the assets of American Laminates Inc., a Kansas City, Kan.-based fixtures and countertop manufacturer that sought Chapter 11 protection in February, will be auctioned off next month. U.S. Bankruptcy Judge Frank Koger last week approved the sale of the company's equipment, furnishings and vehicles to Continental Plants Corp., an industrial auctioneer based in Beverly Hills, Calif., for $255,000. Continental, in turn, plans to sell the assets at a May 3 auction. "We'll open the plant for inspection the day before the auction. Interested bidders can also check out our Web site at www.conplants.com," said Randy Fridkis, a vice president of Continental Plants. American Laminates, which operated a 92,000-square-foot plant at 3200 Fairfax Trafficway in the Fairfax Industrial District, closed shortly after filing for bankruptcy Feb. 11. The company had liabilities of $4.7 million, including $2.5 million owed to Wells Fargo Business Credit Inc. American Laminates had 20 full-time employees at the time of the filing, down from more than 100 a couple of years ago, when it had estimated sales of $10 million to $20 million. The closely held company was founded 30 years ago and was owned by members of the Barksdale family. The company made display and storage products, custom-made countertops and other store fixtures for large retail chains such as Sears and Wal-Mart. In court filings, American Laminates cited aggressive cost cutting by those chains as a reason for its financial difficulties. After exhausting its equity and cash sources, the company filed for Chapter 11 bankruptcy in a last-ditch attempt to maximize its value as a going concern. Nearly $52,000 of the proceeds from the sale to Continental Plants will be distributed to Wells Fargo. $57,000 will go to the U.S. Small Business Administration, which held a first-security interest in the assets. The balance will be paid to various unsecured creditors. Grubb & Ellis/The Winbury Group is attempting to lease the building that housed the plant. The building is owned by a Beverly Hills-based partnership unrelated to Continental Plants. AURORA FOODS: Class Action Commenced By Purchasers -------------------------------------------------- Last week at the United States District Court, Northern District of California, Sirota & Sirota LLP, has filed a class action on behalf of the purchasers of the common stock of Aurora Foods, Inc. (NYSE: AOR) between April 28, 1999 and February 17, 2000 inclusive (the "Class Period"). The complaint alleges that the company and its officers or directors has falsified documents regarding Aurora's financial condition and performance during the Class Period. The complaint alleges that Aurora materially understated its expenses in violation of Generally Accepted Accounting principles. As a result, on February 18, 2000, Aurora was forced to announce that it would take a non-cash charge which would result in "material reduction in earnings for 1999 and possibly a small loss." If you purchased Aurora stock during the Class Period and wish to obtain further information, contact: Saul Roffe, Esq. Howard B. Sirota, Esq. Sirota & Sirota LLP 110 Wall Street New York, New York 10005 (212) 425-9055 (212) 425- 9093 (fax) or visit our website at www.sirotalaw.com. Please be advised that if you wish to move the court to be appointed lead plaintiff, you must do so by April 24, 2000. Sirota & Sirota LLP has extensive experience and has been involved, prosecuted numerous actions, and been appointed lead counsel for numerous actions involving securities fraud. BUCKEYE EGG: Fly Infestations May Force It into Bankruptcy ---------------------------------------------------------- Buckeye Egg, Newark, Ohio, the nation's fourth largest egg distributor, was ordered to reduce fly infestations that neighbors complained interfered with their everyday activities, the Associated Press reported. The company, which operates several barns in Ohio and ships to restaurants and groceries in 20 states, was ordered to take steps to eliminate the problem within 90 days, although the judge did not specify a penalty. Further, the judge prohibited construction permits for new egg facilities until the steps are taken and ordered the company to monitor fly populations. The company said that although it plans to follow environmental laws, implementing all of the steps could force it into bankruptcy. The action is part of a lawsuit the state filed Dec. 1 that accused the company of dumping dead chickens in a field, polluting creeks and causing infestations of flies and other insects. Buckeye Egg has 15 million chickens that produce 2.4 billion eggs a year, 4 percent of the nation's total production. (ABI 14-Apr-00) CHECKERS DRIVE-IN: Restaurants Sold To Pay Off Debt --------------------------------------------------- In a report circulated by The Courier-Journal, Checkers Drive-In Restaurants Inc., which merged with Rally's last August, has been selling off company-owned restaurants, 135 stores in the last three months, to beat a June 15 deadline for retiring what recently was as much as $ 52 million in debt. Checkers CEO Daniel Dorsch told The Courier "We're buying back bonds every single day." He also said "we're going to start growing company stores again in our fewer markets and require franchisees to build as well." The company has "a couple of lenders that want to do what's necessary" to make up the rest of the bonded debt and allow the company to continue past June, Dorsch added. CRIIMI MAE: Reports Results For Fourth Quarter and Year-End ----------------------------------------------------------- CRIIMI MAE Inc.,Inc., (NYSE: CMM) the commercial mortgage company that filed a voluntary petition to reorganize under Chapter 11 of the U.S. Bankruptcy Code on October 5, 1998, today reported results for the fourth quarter and the year ended December 31, 1999 under both generally accepted accounting principles (GAAP) and on a tax basis. CRIIMI MAE's 1999 results included a net loss under GAAP compared to net income in 1998 and a reduction in tax basis earnings compared to 1998. Under GAAP, net loss to common shareholders for the year ended December 31, 1999 was approximately $132.4 million, or a net loss of $2.45 per basic and diluted share. This compares with the prior year's net income of approximately $35.4 million, or net income of 75 cents per basic share and 74 cents per diluted share. For the fourth quarter of 1999, the net loss under GAAP was approximately $151.9 million, or a net loss of $2.72 per basic and diluted share. This compares with a net loss for the prior year's fourth quarter of approximately $11.7 million, or a net loss of 23 cents per basic and diluted share. In February 2000, CRIIMI MAE completed the sale of a portion of the CMBS Sale Portfolio to Morgan Stanley. The Company is currently engaged in discussions regarding the potential sale of the remainder of the CMBS Sale Portfolio. Applicable losses on the CMBS Sale Portfolio on a tax basis will be recognized at the time of sale. Tax basis income available to common shareholders for the year ended December 31, 1999 (after accrual of approximately $5.8 million for dividends to preferred shareholders) was approximately $31.7 million, or 57 cents per share, compared with approximately $66.7 million, or $1.38 per share, for 1998. Tax basis income declined for 1999 compared to 1998 primarily due to a $36.3 million realized loss in the third quarter of 1999 resulting from the sale of unsecuritized mortgage loans originated under the Citicorp Real Estate, Inc. mortgage loan conduit program. Tax basis income available to common shareholders for the fourth quarter of 1999 was approximately $18.0 million, or 32 cents per share, compared to approximately $9.4 million, or 18 cents per share for the same period of 1998. The increase primarily resulted from realized losses of approximately $4.5 million due to the impact of financial market volatility on a hedge position in the fourth quarter of 1998, and the Company wrote off net deferred costs of $3.3 million during 1998 associated with loans originated through its two mortgage loan conduit programs that it no longer intended to securitize. CRIIMI MAE's shareholders' equity decreased to approximately $219 million ($2.75 per diluted share) at December 31, 1999, from approximately $308 million ($4.89 per diluted share) at December 31, 1998. The decrease in shareholders' equity during 1999 primarily resulted from a decrease in the fair value of the Company's portfolio of CMBS and insured mortgage securities. The Bankruptcy Court has scheduled a hearing for April 25 and 26, 2000 on approval of the Disclosure Statement. Once the Disclosure Statement has been approved by the Bankruptcy Court, the Plan, together with the Disclosure Statement and appropriate ballots, will be sent to all impaired creditors and equity security holders for acceptance or rejection. DOW CORNING: Government Delays Emergence from Chap 11 Protection ---------------------------------------------------------------- According to a report in The Detroit News, the company's court- approved reorganization plan, which commits $ 3.2 billion to settle tens of thousands of implant claims that forced Dow Corning's Chapter 11 filing, raised objections from the Justice Department attorneys. The government urges the company to determine first which claimants received federally financed medical care before it can emerge from bankruptcy protection, relates The Detroit News. FACTORY CARD OUTLET: Seeks Extension of Exclusive Periods ----------------------------------------------------------------- The debtors, Factory Card Outlet Corp. and Factory Card Outlet of America, Ltd., seek approval of an extension of the exclusive periods during which the debtors may file a plan of reorganization and solicit acceptances thereof. A hearing on the motion will be convened on April 26, 2000 at 12:30 PM before the Honorable Joseph J. Farnan, Jr., US District Court for the District of Delaware, 844 King street, Wilmington, DE. The debtors believe that with a 60 day extension of the exclusive periods, they will reach an agreement with a third party which will contemplate a significant cash investment in the reorganized debtors that will be the basis for a feasible plan of reorganization, and that they will negotiation such plan with the creditors' committee and file the plan with the court. The debtors request an extension of their exclusive filing periods and their exclusive solicitation period to and including June 16, 2000 and August 18, 2000, respectively. GULF STATES: Union Rejects Contract Offer ----------------------------------------- According to the bankrupt company's chairman and chief executive officer Robert Schaal of Gulf States Steel, the future of the company is "extraordinarily uncertain" after union members rejected its latest contract offer, The AP reports. The contract, which calls for increases in life insurance, unemployment benefits and vacation benefits, is the key to qualifying for a $ 130 million loan backed by the Emergency Steel Loan Board that would help the company emerge from bankruptcy. Schaal, who was surprised and disappointed at the outcome, says that getting out of bankruptcy without the loan guarantee "would be a difficult and long road without some sort of assistance - not impossible but very difficult," recalls The Associated Press. MICROAGE INC: Files Chapter 11 Petition For Restructuring --------------------------------------------------------- MicroAge, Inc. (NASDAQ:MICA) announced that, to facilitate the restructuring necessary to continue its transformation into a business-to-business (B2B) technology solutions provider, the Company and certain subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code. In conjunction with the filing, MicroAge has received a commitment from a group of financial institutions led by Citibank, N.A. for$225 million in debtor-in-possession (DIP) financing. The DIP financing facility, which is subject to Court approval, is expected to provide adequate funding for all post-petition trade and employee obligations, as well as the Company's ongoing operating needs during the restructuring process. "The actions we have taken today, as painful as they are, will allow us to accelerate the transformation of the Company to effectively compete in the digital marketplace," said Jeffrey D. McKeever, Chairman and Chief Executive Officer. "Over the next several weeks and months, MicroAge will make the changes necessary to meet the demands of the dynamically changing computer industry. Business will go on as usual, and MicroAge will continue to operate without interruption. The quality standards we've been known for in the past remain important to our future. Our customers can continue to expect our ongoing commitment to fulfilling their needs. "During the past few months," McKeever continued, "the Company has taken significant steps to consolidate support functions for its two largest business units and to streamline its operations, which is expected by the end of the current quarter to reduce operating expenses by $164 million on an annualized basis. We recently introduced industry-leading e-commerce solutions and formed a separate e-business subsidiary, Eleris, specializing in the development of B2B e-commerce procurement solutions." McKeever said that in February, MicroAge restructured its management team, appointing Christopher J. Koziol to the positions of president and chief operating officer to head strategic development and day-to-day operations of the Company. "The new business model that we have developed will allow MicroAge to respond to the rapidly changing marketplace," Koziol stated. "MicroAge is evolving to serve the needs of businesses in a connected economy. This reorganization will allow us to focus on our strategic initiatives to become a leader in e-commerce and will expand our ability to unleash exciting new technologies. As we retool our operations, MicroAge will have the ability to deliver technology products and services more efficiently and effectively than ever before." McKeever noted that the decline in the Company's sales during the first quarter, predominantly related to a lack of client demand associated with Year 2000 concerns, resulted in constraints by the Company's lenders and a tightening of credit terms from its vendors; this made it more difficult to obtain sufficient product at prices and terms necessary to successfully meet customer needs and demand. "The new DIP financing and the priority status the Bankruptcy Court affords to payment for post-petition purchases of goods during this process should facilitate improved trade terms with our vendors," McKeever said. McKeever said that the Company is in contact with a number of its major vendors and "we expect them to support the Company during this process. We are encouraged by our new business model and the advantages it provides. We are confident that these changes will provide the foundation for our future success." The Company filed Chapter 11 petitions in the U.S. Bankruptcy Court for the District of Arizona in Phoenix for MicroAge, Inc. and its principal subsidiaries, including Pinacor, Inc. and MicroAge Technology Services, L.L.C. MicroAge, Inc., a Fortune 500 company, is a global provider of efficient technology solutions. The Company is composed of information technology businesses that deliver technology infrastructure solutions through ISO 9001-certified, multi-vendor integration services and distributed computing solutions to large organizations and computer resellers worldwide. The Company does business in more than 40 countries and offers over 250,000 products from more than 1,000 vendors backed by a suite of technical, financial, logistics and account management services. NEUMAN DISTRIBUTORS: Owes More Than $100 Million in Debts --------------------------------------------------------- According to a report in The Record (Bergen County, NJ) On April 13, 2000, Neuman Distributors owes more than $ 100 million in combined debts to Merck, Novartis, Pfizer, Schering- Plough, and nearly every other major pharmaceutical manufacturer, according to U.S. Bankruptcy Court filings in Newark. 1 NEW3 Franklin Lakes millionaire Samuel Toscano Jr. has owned Neuman since 1979, transforming it from a tiny drug supply warehouse in Paterson to a $ 2 billion distributor of pharmaceuticals and medical devices to thousands of New York-area hospitals and independent pharmacies. Moonachie-based Neuman filed for Chapter 11 bankruptcy protection Friday, laying off about 170 remaining workers. A skeleton staff of managers remains on hand to sort through a mess that eventually may force the company to liquidate. Its 330,000- square-foot automated warehouse, completed last year at a cost of $ 20 million, sits dormant across from Teterboro Airport. An assistant to Toscano said that in January, Neuman asked its creditors to help it form an out-of-court reorganization plan, but ultimately the creditors and others did not support it. Neuman had grown rapidly before 1999, acquiring several competing drug distributors in the Eighties and Nineties, and diversifying into different areas of health services in the last five years. In 1990, Neuman acquired James Wholesale Drug in Rahway along with its home health care subsidiary, Home Health Care of New Jersey. Four years later, Neuman bought OCP-America (formerly Ketchum Distributors), becoming the largest independent pharmacy distributor in the country with sales exceeding $ 1 billion. In 1996, Neuman acquired Advantage Pharmacy, the retail buying cooperative of the New Jersey Hospital Association, then purchased Drug Guild a year later. Forbes magazine named 1 NEW3 Neuman one of the top 500 privately held companies in the United States for five straight years. The magazine dropped Neuman from the list in 1999. NEW ROCHELLE: Case Summary and 14 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: New Rochelle Ford, Inc. A New York Corporation 200 Main Street New Rochelle, NY 10801 Type of Business: Operates an automobile dealership engaged in selling and servicing new and used Ford automobiles. Petition Date: April 5, 2000 Chapter 11 Court: Southern District of New York Bankruptcy Case No.: 00-20235 Judge: John J. Connelly Debtor's Counsel: Gary Ettelman Ettelman & Hochheiser, P.C. 100 Quentin Roosevelt Blvd. Garden City, NY 11530 Phone: (516) 227-6300 Fax: (516) 227-6307 Email: gettleman@e-hlaw.com Total Assets: $ 1million above Total Debts: $ 1million above 14 Largest Unsecured Creditors HSBC Bank USA 140 Broadway New York, NY 10005 $ 8,000,000 Ford Motor Company 660 White Plains Rd Tarrytown, NY 10591 $ 500,000 Dejay Realty $ 185,000 Battery Craft $ 28,628 Town Motors $ 17,532 Kea Advertising $ 14,075 Con Ed $ 7,375 Security First $ 7,310 Bell Atlantic $ 7,278 Auto Sunroof $ 4,973 American Express $ 4,699 Shoreline Oil $ 4,460 Ford Motor Credit Co. $ 4,176 Hesco $ 3,796 PLANET HOLLYWOOD: Wilbur Ross to Invest in Chain ------------------------------------------------ The investor Wilbur Ross told The New York Post that he and CIT Group would invest $15 million in the movie-theme restaurant chain. He also said it might emerge from bankruptcy protection. PRISON REALTY: CCA To Move Its Inmates -------------------------------------- Prison Realty Trust Inc. and its sister company Corrections Corporation of America express recently that they lost a total of $ 265 million in 1999 in a report obtained by the Telegraph- Herald. Their auditors says "substantial doubt about the ability of either company to continue as a going concern." CCA, which houses more than 3,900 inmates, has a possibility to be moved, Department of Corrections Secretary Jon Litscher told the Telegraph-Herald was one of their agency's contingency plans. "We would have to look at where our beds are and where they could be in an emergency situation," Litscher said, declining to disclose those plans for security reasons. RIGCO NORTH AMERICA: Court Approves Sale of FPS Laffit Pincay ------------------------------------------------------------- The US Bankruptcy Court for the Southern District of Texas entered an order authorizing the sale of FPS Laffit Pincay, to Energy Equipment Resource, Inc., or a company to be nominated by them for US $28.5 million. TAMBORIL CIGAR: Announces Chapter 11 Filing ------------------------------------------- Tamboril Cigar Co. (OTC Bulletin Board: SMKEE), a manufacturer and marketer of premium hand-rolled cigars, announced today that the Company has filed a voluntary petition for Chapter 11 relief in Miami, Florida, for the Company and two of its subsidiaries. The Company filed for Chapter 11 relief to seek a financial reorganization, to move forward and remain a going concern. The Company's decision to file for Chapter 11 reorganization resulted from various factors including deteriorating economic conditions in the cigar and tobacco industry. Under Chapter 11, the Company and these subsidiaries will continue to operate their businesses in the ordinary course under the protection of the bankruptcy court while seeking to finalize a plan of reorganization to implement its anticipated restructuring. In that regard, the Company anticipates filing a plan of reorganization within approximately 10 days. The plan is subject to review and approval by the Company's creditors and stockholders as well as the bankruptcy court. TIMESTONE CAPITAL: Case Summary ------------------------------- Debtor: Timestone Capital, Inc. c/o Corporation Trust of Nevada 6100 Neil Rd. Suite 500 Reno, NV 89511 Mailing Add: PO Box 8244 Wichita, KS 67209 Petition Date: April 11, 2000 Chapter 11 Court: District of Nevada Bankruptcy Case No.: 00-12587 Judge: Linda B. Riegle Debtor's Counsel: Gregory A. Koppe Koppe & Koppe 530 S. Third Street Las Vegas, NV 89101 (702) 382-3553 Total Assets: $ 1 million above Total Debts: $ 1 million above TOWER AIR: Committee Objects To Extension For Filing Schedules ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Tower Air, Inc. object to the debtor's motion for additional time to file schedules and statement of affairs. On March 13, 2000, the Office of the United States Trustee appointed GE Aircraft Engines, Pratt & Whitney, a division of United Technologies Corp., Texaco Inc., the Association of Airline Pilots, Inc., SC International, Inc. and the Port Authority of New York and New Jersey(ex officio) as the Creditors' Committee. The Committee selected the firms of Holland & Knight lLP and Blank Rome Comisky & McCauley LLP as its counsel. The Committee states that the information contained in the debtor's schedules and statement of affairs are critical to the committee and others. The Committee claims that it is not in a position to take an informed position on DIP financing because of its lack of information, and the Committee asks that the court deny the motion for extension. TULTEX: Russell To Purchase of DISCUS ------------------------------------- The United States Bankruptcy Court for the Western District of Virginia has approved the sale of the worldwide rights to the DISCUS and DISCUS Athletic brands from Tultex Corporation to Russell Corporation (NYSE:RML). The transaction, valued at $2,750,000, will be completed before the end of April. With worldwide rights, Russell intends to use the DISCUS brands in both its domestic and international operations. Preliminary work has begun on marketing opportunities in both areas. "While we are still in the early stages of development, DISCUS will certainly help enhance our portfolio of brands and offer access to new consumer segments," said Jack Ward, chairman, president and CEO. "The acquisition of the DISCUS brands further illustrates our efforts to develop and penetrate markets that provide opportunities for additional business growth." The company announced in March that it had signed an agreement to acquire the apparel operations of Haas Outdoors, Inc. and will create the Mossy Oak Apparel Company to strengthen its position in the outdoor apparel market. Russell Corporation is an international branded apparel company specializing in activewear, casualwear and athletic uniforms. Its major brands include Russell Athletic, JERZEES and Cross Creek. The Company's common stock is listed on the New York Stock Exchange under the symbol RML. TURBODYNE TECHNOLOGIES: Reports Financial Results ------------------------------------------------- Turbodyne Technologies Inc. (EASDAQ:TRBD) reported financial results for the fiscal year 1999, ended Dec. 31, 1999. Revenues for the year ended Dec. 31, 1999, were $50,218,161, compared with revenues of $40,858,000 for the year ended Dec. 31, 1998, an increase of $ 9,360,161, or 22.9 percent. Revenues in the Light Metals Division for 1999 were $48,503,000, compared with$40,135,000 in 1998. Revenues in the Engine Technology Division for 1999 were $1,715,161, compared with $723,000 in 1998. Turbodyne's Light Metals Division accounted for 96.6 percent of total sales for 1999, compared with 98.2 percent of total sales in 1998. Gross profit for fiscal 1999 decreased to $3,787,963, or 7.5 percent of sales, compared with $5,033,000, or 12.3 percent of sales, for fiscal 1998, a decrease of $1,245,037, or 24.7 percent. Gross profit for these years was primarily attributable to the Light Metals Division. The reduction in gross profit for fiscal 1999 primarily is attributable to two factors: the extraordinary costs associated with the relocation, consolidation and modernization of the Light Metals Division, and the shift in product mix from aftermarket wheel sales with higher gross margins to engine component sales with lower gross margins. Net loss for fiscal 1999 was $35,988,896, or 88 cents a share, an increase of $5,955,896, compared with a loss of $30,033,000, or 88 cents a share, in 1998. The fully diluted weighted average shares outstanding for the year was 40,952,987, compared with 34,232,000 a year ago. Cash used in operating activities for fiscal 1999 and 1998 was$10,458,798 and $18,269,000, respectively. The company has suffered a net loss in each of the last four years resulting in an accumulated deficit of $90,257,896 at Dec. 31, 1999. The report of the company's independent auditor notes that there is substantial doubt about the company's ability to continue as a going concern. Gerhard E. Delf, president and chief executive officer, noted: "1999 was a challenging year for Turbodyne as we implemented a significant restructuring of our operations. However, we enter the new millennium with a renewed focus on our core research and development competence and the product development and marketing strength of our recently announced joint development partner, Honeywell International Inc., a leading turbocharger manufacturer." During 1999, the company significantly restructured its operations to focus its resources on research and development of products using the company's technology. The principal elements of the restructuring are: The company sold the assets of the Light Metals Division, which accounted for 96.6 percent of total sales and 92.6 percent of gross profit for 1999, in a Chapter 11 bankruptcy proceeding. The company closed its offices in London, England; Paris, France; New York, New York; and Encinitas and Woodland Hills, Calif., and reduced the number of employees at its headquarters from 101 to 58. The company made substantial changes in management to emphasize research and development for the Dynacharger(TM) and the Turbopac(TM) product lines. The company has sought to settle many of the lawsuits and claims against it. The company raised an aggregate of $15,615,000 in capital, including issuance of stock options to employees and non- employees for services equal to $ 4,618,000, to finance the restructuring of its operations and continued research and development. The company shifted its emphasis from aftermarket applications to automotive original equipment manufacturers ("OEMs") for its Dynacharger(TM) product line and its Turbopac(TM) product line. The company entered into joint development and license agreements with Honeywell Turbocharging Systems, a division of Honeywell International Inc. (formerly "AlliedSignal Inc."), a leading manufacturer of turbochargers ("Honeywell"), under which the company and Honeywell jointly will continue the development of the Dynacharger(TM) and Turbopac(TM) product lines for production for the automotive industry. The company and Honeywell jointly are seeking to establish additional strategic relationships. Turbodyne Technologies Inc. is a leading engineering company in the design and development of charging technology to enhance the performance of internal combustion engines. The company's technology is based upon DC/AC, very high-speed, high-powered, electronically commuted electric motors, in the design and development of which the company is a leader. Turbodyne's headquarters is located in Carpinteria; the European business location is Frankfurt, Germany. Additional information about the company is available on the Internet at http://www.turbodyne.com. UNITED ARTISTS: In Default Under Certain Covenants With Lenders --------------------------------------------------------------- United Artists Theatre Company announced its results for the 52 weeks ended December 30, 1999. Consolidated revenue for 1999 was $631.4 million, versus $662.5 million for the year ended December 31, 1998. Earnings before interest, taxes, depreciation and amortization (EBITDA) was $61.3 million in 1999, versus the $87.9 million reported in 1998. United Artists' net loss available to common shareholders increased to $127.3 million for 1999 from the 1998 net loss of $98.0 million reflecting the lower EBITDA and a $25.3 million increase in asset write-offs and lease termination costs. Excluding the effect of the asset write-offs and lease termination costs, the 1999 net loss available to common shareholders increased slightly to $65.7 million as compared to $61.7 million in 1998. The Company said that operating income was adversely impacted in 1999 by the unprecedented level of new construction by its competitors in certain of its markets and by charges of $61.6 million for asset write-offs and lease termination costs relating to unprofitable theatres, many of which are being held for sale or have been closed. Net income available to common shareholders was also adversely impacted in 1999 by an increase in interest expense relating to higher market interest rates and higher average debt balances. The Company said that, upon certification of its 1999 financial results to its senior lenders, it will be in default of certain covenants of its senior secured credit facility. As a result of these anticipated covenant defaults, the decline in EBITDA and tightening liquidity situation, the Company has initiated discussions with its senior secured lenders to develop a plan to restructure and recapitalize the Company. On April 12, 2000, the senior secured lenders blocked the $12.3 million interest payment on the Company's$275 million subordinated debt due on April 15, 2000. The Company intends to present a consensual recapitalization plan to its subordinated lenders once a plan has been approved by the senior secured lenders. The Company has engaged as financial advisors, Houlihan Lokey Howard & Zukin, and as legal counsel, Kirkland and Ellis, to assist with its restructuring plan. Commenting on its 1999 results, Kurt Hall, President and Chief Executive Officer, said: "We are obviously very disappointed with our overall operating results. While the underlying fundamentals of the business remain sound, our results have been negatively impacted by the race to gain market share by several of our competitors. This over-spending and aggressive building by our competitors outside of their key market positions has resulted in lower revenue per screen, reduced operating margins, higher financial leverage, and very low returns on invested capital for the industry in general." Mr. Hall continued: "Despite this unfavorable competitive environment, we have made progress in several areas of our operating and investment plan. During the year, we improved our concession sales margins, successfully controlled non-film operating costs, and improved the performance of our Satellite Theatre Network and In-Theatre Advertising businesses. In addition, we closed 40 of our underperforming theatres (205 screens) and have made significant progress in early 2000 with respect to our plan to dispose of 55 additional under-performing theatres (371 screens). We continue to invest prudently to defend and, where necessary, expand in our existing core market positions. During 1999, we retrofitted three theatres (36 screens) with stadium seating, opened three new stadium theatres (37 screens), and started construction on an additional theatre (15 screens plus an IMAX) in Philadelphia. While our capital spending is significantly below that of our competitors, this more focused approach, combined with our disposition program, resulted in admissions per screen results compared to 1998 that out-paced industry results." Mr. Hall concluded by saying: "As there are signs that the level of industry capital spending is slowing rapidly, I am hopeful that the number of industry screens will be reduced to a level at which the industry can once again become profitable. We believe that after this period of industry asset and debt restructuring, same-theatre results will stabilize, and industry market valuations will be restored to historical levels. The discussions we have initiated with our senior secured lenders, if completed, will provide a stronger asset base and create a more appropriate capital structure with the liquidity required to pursue our focused investment and operating plan. With a restructured balance sheet, the Company will be well positioned to capitalize on the industry rationalization, improved operating fundamentals and industry market valuation recovery." United Artists is a leading operator of motion picture theatres with 2,018 screens in 283 locations. United Artists is privately held with publicly traded debt securities. UATC leases certain properties from a third party that has issued publicly traded pass-through certificates. UNITED HEALTHCARE: Seeks To Fix Administrative Claim Bar Date ------------------------------------------------------------- The debtor, United Healthcare System, Inc. seeks a court order fixing the bar date for filing proofs of Chapter administrative claim, and approving form and manner of notice to be provided to creditors. A hearing date is set for April 27, 2000 at 10:00 AM. VENCOR: Announces Amendment To DIP Financing -------------------------------------------- Vencor, Inc. announced that it has agreed with its lenders to amend the Company's DIP Financing, primarily to revise a financial covenant regarding the Company's minimum net amount of accounts receivable. As previously reported, the Company was not in compliance with this accounts receivable covenant at December 31, 1999. In the Amendment, the lenders also waived all events of default regarding this accounts receivable covenant that occurred prior to the date of the Amendment. As of April 12, 2000, the Company had no outstanding borrowings under the DIP Financing. Vencor and its subsidiaries filed voluntary petitions for protection under Chapter 11 with the United States Bankruptcy Court for the District of Delaware on September 13, 1999. Vencor, Inc. is a national provider of long-term healthcare services primarily operating nursing centers and hospitals. ********* 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. 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