/raid1/www/Hosts/bankrupt/TCR_Public/000426.MBX
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, April 26, 2000, Vol. 4, No. 81
Headlines
APEX GLOBAL: Telia Internet To Acquire Substantially All Assets
ALTIVA FINANCIAL: Reports Cessation of Loan Originations
AMERICAN HEALTH: Dropped From List of Approved HMOs
ATLANTIC GULF: Year-End Results Reflect Restructuring
AVIATION SALES: Auditor Expresses Doubt
BAPTIST FOUNDATION: IRS Not To Pursue Claims
BIRMINGHAM STEEL: Subsidiary Completes Agreements
CAMBIOR INC: Net Loss For 1999 - $358 Million
CAMBRIDGE INDUSTRIES: Forced To Sell Stake
COLONIAL DOWNS: Jacobs Announces Loan
COSTILLA ENERGY: Louis Dreyfus Natural Gas Announces Acquisition
CRIIMI MAE: Sells CMBS
DYERSBURG CORPORATION: Moody's Downgrades Notes
DYNEX CAPITAL: Reports 1999 Results
FAMILY GOLF CENTERS: Eyeing for Bankruptcy Protection
FOSTER LUMBER: Case Summary and 20 Largest Unsecured Creditors
HARNISCHFEGER: Motion To Sell Beloit's Assets To 5 Jt Venturers
HARVARD PILGRIM: State Revises Plan
HRPT PROPERTIES TRUST: S&P Revises Outlook to Negative
HVIDE MARINE: Hires Industry Veteran
IDAHO TIRE: Case Summary
INTEREX: Tripp Lite Acquires Company For An Undisclosed Amount
INTERPLAY ENTERTAINMENT: Greater Loss Caused By Subsidiary
JINEY JUNGLE: Exits Birmingham, Tuscaloosa Markets
LAMONTS APPAREL: To Sell Assets To Gottschalks Inc.
LEVITZ: Twelfth Extension of Exclusivity
MARQUIP: Files for Chapter 11 Bankruptcy Protection
MISSISSIPPI MANAGED: HMO To Be Liquidated
MONTGOMERY WARD: Motion To Establish Distribution Trust
OCEAN RIG NORWAY: Moody's Confirms Secured Rating
OWENS CORNING: Domenico Cecere Named COO
NORTHPOINT COMMUNICATIONS: Moody's Assigns Caa1 To Senior Notes
ROBERDS: President Quits
STEPHEN LAWRENCE: Files For Chapter 11
TELEGEN: Files Reorganization Plan
THIS END UP: Recovery Doubtful
TRIFOX: Angoss Software Issues Update On Litigation Proceedings
UNITED ARTISTS: To Close Two Uptown Cinemas
UNITED MEDICORP: 1999 Loss Raises Doubt
UNITED STATES EXPLORATION: Announces Settlement Agreement
VISTA EYECARE: Case Summary
WASTE MANAGEMENT: To Sell Assets To Waste Corporation of America
WORLDTEX INC.: Moody's Downgrades Notes; Assigns Negative Outlook
Meetings, Conferences and Seminars
*********
APEX GLOBAL: Telia Internet To Acquire Substantially All Assets
---------------------------------------------------------------
Telia International Carrier, a leading supplier of IP information
services and infrastructure-based networks with a presence in
both Europe and the United States, announced that its North
American subsidiary Telia Internet, Inc. has been approved for
the acquisition of substantially all of the operating assets of
Apex Global Information Services, Inc. (AGIS). The U.S
Bankruptcy court in Detroit, Michigan accepted Telia Internet
Inc.'s offer in cash and assumption of certain liabilities to the
debtor's estate in the Chapter 11 proceedings that began on
February 25, 2000, after AGIS encountered severe liquidity
problems.
ALTIVA FINANCIAL: Reports Cessation of Loan Originations
--------------------------------------------------------
Altiva Financial Corporation (Nasdaq: ATVA) reported that as of
Friday, April 14, 2000 it had ceased origination of loans and had
reduced staff by 90% in both Atlanta and its wholly owned
subsidiary, The Money Centre in Charlotte, North Carolina.
The above actions were taken when an immediate cash infusion into
the company was not available. Consequently the Company was not
able to continue normal operations. The company is pursuing an
orderly winding-down of business activities and is seeking an
arrangement with its creditors.
AMERICAN HEALTH: Dropped From List of Approved HMOs
---------------------------------------------------
According to a report from Copley News Service on April 17, 2000,
American Health Care Providers has been dropped from the list of
approved HMOs for Illinois state workers, retirees and others
covered by the state's employee benefits plan for the coming
fiscal year.
American POS, another managed-care product of the same company,
also will not be a choice for state workers starting in July.
AHCP President Asif Sayeed expressed surprise at the state's
decision to drop his company after twelve years, and said
American Health Care representatives were trying to contact
officials at CMS to reverse the decision.
The Department of Insurance moved in mid-February in Cook County
Circuit Court to force the suburban Chicago-based firm into
liquidation, claiming its debts exceed its assets by about $25
million. Sayeed has denied that the company can't pay its bills.
HCFA officials announced this week they will terminate a Medicare
contract with American Health, claiming that the financially
troubled HMO does not have enough doctors and hospitals to
guarantee seniors adequate access to medical care. The Medicare
contract expires May 1, giving 4,000 Cook County, Ill.,
beneficiaries less than two weeks to find new coverage.
According to HCFA, seniors will be able to choose from four other
managed care plans contracted with Medicare. The state argues
that American Health is financially insolvent, although the
company is fighting this allegation.
ATLANTIC GULF: Year-End Results Reflect Restructuring
-----------------------------------------------------
Atlantic Gulf Communities Corporation (OTC Bulletin Board: AGLF)
reported results of operations for the residential real estate
developer's quarter and full year ending December 31, 1999.
Atlantic Gulf Communities, which is now in the third phase of a
restructuring program, reported a 1999 net loss of $ 78.3 million
or $ 6.33 per share on revenues of $ 75.6 million. The loss
reflects a fourth quarter writedown of inventory and mortgages
receivable of $ 20.4 million. The results compare to a year-end
1998 net loss of $ 8.0 million or $ 0.68 per share on revenues of
$ 83.8 million.
The company received a "going concern opinion" from its
independent auditors due to its recurring operating losses,
certain existing defaults under project indebtedness and its
current inability to repay such project indebtedness. The
company also disclosed that if its financial strategy does not
generate sufficient funds to retire its corporate-level
indebtedness and outstanding preferred stock, and provide
sufficient operating cashflow, the company will need to consider
other alternatives, including, but not limited to, a capital or
debt restructuring or a federal bankruptcy filing.
For the quarter ending December 31, 1999, the company reported a
net loss of $ 32.6 million or $ 2.70 per share on revenues of $
30.8 million, compared to a net loss of $ 0.9 million or $ 0.08
per share for the fourth quarter, 1998.
Atlantic Gulf Communities is a residential real estate developer.
Its current holdings include WestBay, a 696-unit community near
Naples, Florida, and Chenoa, a 577-unit community near Glenwood
Springs, Colorado.
AVIATION SALES: Auditor Expresses Doubt
---------------------------------------
Aviation Sales Co. (Nasdaq: AVS) said in its annual report with
the Securities and Exchange Commission that its independent
auditor, Arthur Andersen LLP, has raised substantial doubt about
the company's ability to continue as a going concern, reports
Federal Filings Newswire.
The Miami-based company reported a net loss of $ 21.7 million, or
$ 1.56 per diluted share, for 1999, down from net income of $
25.5 million, or $ 2.01 per share, in 1998.
The company hasn't been in compliance with certain financial
covenants of its revolving loan agreement, and the lenders have
agreed to waive the covenant violations and other matters until
May 31.
According to the SEC filing, the company has insufficient funds
to repay this loan and a default could result in cross defaults
under certain other financing arrangements and leases, which is
the main reason for the auditors opinion.
The revolving loan had an outstanding balance of $ 269.6 million
on Dec. 31, 1999.
The company said that it is taking actions to reduce debt through
the sales of assets, including the potential sale of its
manufacturing operations.
In other news, the company said it will move to its newly
constructed headquarters in Miramar this week.
Aviation Sales is an independent provider of parts and repair and
inventory services.
BAPTIST FOUNDATION: IRS Not To Pursue Claims
--------------------------------------------
Internal Revenue Service won't try to collect more than $100
million in back taxes from the foundation, nor will it require
investors over age 70 1/2 to pay penalties on their frozen IRA
accounts.
A lawyer for the foundation told a U.S. Bankruptcy Court judge
that the IRS has tentatively agreed not to pursue claims against
the foundation that could have substantially reduced the amount
of money left to repay investors.
"We believe we have negotiated an agreement with the IRS that
does not impact investors," said Craig Hansen, a lawyer for the
foundation. "It is a very generous waiver."
Hansen said the agreement has been approved by officials in the
IRS' Phoenix and regional offices, and is expected to be approved
soon at the federal level.
IRS officials had been investigating the tax-exempt status of the
foundation, which filed for Chapter 11 bankruptcy protection in
November. The foundation, whose former officials are under
investigation for securities fraud, listed liabilities of $640
million, $590 million of which is owed to the 13,000 investors.
It listed assets of $240 million.
The foundation is seeking Bankruptcy Court permission to
liquidate its assets and return approximately 40 cents on the
dollar to its investors over the next three to five years.
Current foundation officials had expressed concern that the IRS
would file a claim for back income taxes covering the past 10
years. Hansen said the amount of the claim would have exceeded
$100 million.
There also had been some concern among older investors that the
IRS would charge them penalties on their individual retirement
accounts. IRA holders older than 70 1/2 are required to withdraw
and pay taxes on a portion of their money or face penalties.
Because the foundation froze investor accounts last August,
holders of IRAs were unable to make the distributions. Foundation
officials requested a waiver from the minimum distribution
requirement.
Hansen said the foundation and the company reached a payback
agreement that won't result in financial problems for the
company's retirement homes.
BIRMINGHAM STEEL: Subsidiary Completes Agreements
-------------------------------------------------
American Steel & Wire Corp. in Cuyahoga Heights has completed
agreements for long-term supplies of semi-finished steel billets,
which the company rolls into bars and rods. The company's parent,
Birmingham Steel Corp., said the suppliers include Iscor Ltd. in
South Africa and Acos de Minas Gerais SA in Brazil. The supply
agreements, which are keys to American Steel & Wire's turnaround,
will enable the company to produce 50,000 tons of bars and rods
monthly, about 65% of capacity.
CAMBIOR INC: Net Loss For 1999 - $358 Million
---------------------------------------------
For the year ended December 31, 1999, revenues totaled $332
million compared to $344 million in 1998. Earnings before
interest, taxes, depreciation and amortization (EBITDA), or
operating margin, totaled $82 million in 1999 compared to $89
million in 1998. Cash flow from operations was $17 million (24
cents per share) compared to $86 million ($1.23 per share) in
1998; the significant decrease is due to restructuring costs and
higher interest expenses.
In 1999, the Company incurred a restructuring charge of $57
million that is mainly composed of the costs caused by the
reduction and rescheduling of the Company's gold hedging program.
For the fourth quarter of 1999, revenues totaled $81 million
compared to $77 million in 1998. Earnings before interest,
taxes, depreciation and amortization (EBITDA) totaled $16 million
in 1999 compared to $17 million for the corresponding quarter in
1998. As part of the year-end 1999 revision, Cambior re-evaluated
all of its mining assets in the context of an asset disposal
program and current market conditions, and thus incurred a
writedown of mining assets totaling $294 million. This writedown
of mining assets is mainly attributable to the zinc assets as
announced in March 2000 ($118 million), and to a devaluation of
the base metal mining projects ($70 million) and the gold mining
projects ($38 million). The Omai mine was written down by $40
million as a consequence of the lower realized gold price related
to the reduction of the hedging program and the impact of
increased fuel prices on operating costs. In addition, the Doyon
mine was also written down by $19 million mainly to reflect a
decrease in proven and probable mining reserves and without
taking into account the mineral resources.
Consequently, the net loss for 1999 is $358 million ($5.07 per
share) compared to a net loss of $11 million (16 cents per share)
in 1998. The net loss for the fourth quarter is $332 million
($4.70 per share) compared to a net loss of $24 million (33 cents
per share) in the fourth quarter of 1998.
According to the modified and amended credit facility, Cambior
must make interim payments totaling not less than $75 million by
June 30, 2000, including restructuring fees, deferred additional
interest and the $8 million amount related to the improvement of
the gold hedging position. In addition, Cambior must make
satisfactory arrangements by September 30, 2000 to repay or
refinance the balance of its loan by December 31, 2000.
Cambior Inc. is a diversified international gold producer with
operations, development projects and exploration activities
throughout the Americas. Cambior's shares trade on the Toronto
and American (AMEX) stock exchanges under the symbol "CBJ".
CAMBRIDGE INDUSTRIES: Forced To Sell Stake
------------------------------------------
According to a report in Crain's Detroit Business on April 17,
2000, minority auto supplier Mexican Industries is trying to
force troubled plastics molder Cambridge Industries Inc. to sell
its stake in a joint venture both companies own.
Detroit-based Mexican Industries accuses Cambridge of being
insolvent and not putting the required capital into Dos Manos
Technologies, according to a lawsuit filed last week in Wayne
County Circuit Court. Mexican Industries owns 52 percent of Dos
Manos, an injection molding operation, and Cambridge 48 percent.
But Madison Heights-based Cambridge, which put together a
financing agreement with its banks and customs last month, said
it is solvent and the allegations made by Mexican Industries are
false.
Two weeks ago, Cambridge said it reached an agreement with its
banks and customers that would provide enough cash flow to keep
the company going until it completes the sale of a division or
the entire company.
Mexican Industries offered to buy out Cambridge's stake in Dos
Manos, but Cambridge refused, said Joseph DeVito, corporate
attorney for Mexican Industries. The company wants a judge to
order Cambridge to sell its interest in Dos Manos because the
joint venture is in danger of not meeting its contractual demands
to General Motors Corp., DeVito said. An agreement between the
two partners says that if one becomes insolvent and the other
wants to continue operating Dos Manos, the insolvent partner
"shall sell" its interest in the company, according to the
lawsuit.
Mexican Industries, which reported 1998 revenue of $161.7
million, has loaned Dos Manos $6.5 million, according to the
lawsuit.
Cambridge reported a net loss of $30.3 million on revenue of
$541.1 million for 1999. In February, the company hired Morgan
Stanley Dean Witter & Co. of New York to look for buyers.
Sieg said sale talks are moving swiftly and Cambridge management
is narrowing down offers. He said the lawsuit will not upset the
sale process.
COLONIAL DOWNS: Jacobs Announces Loan
--------------------------------------
Colonial Downs Holdings, Inc. (NASDAQ: SCM: CDWN) which, through
its subsidiaries, holds the only licenses to own and operate a
pari-mutuel horse-racing course and satellite racing centers in
Virginia announced that it received a commitment from CD
Entertainment Ltd., an affiliate of Jeffrey P. Jacobs and largest
shareholder of the Company, to loan the Company $ 1.5 to $ 2
million.
Such funds are expected to be sufficient to meet the Company's
operational liquidity needs through June 2001. The Company is
obligated to repay its $15 million credit facility from PNC Bank,
N.A. that comes due on June 30, 2000. Negotiations with PNC and
guarantors of the credit facility are in process.
The CD Entertainment loan ensures that Colonial Downs will be
able to conduct its 32 day thoroughbred meet (September 4 through
October 17) and its 40 day standardbred meet (October 27 through
December 31). "We will continue to offer quality thoroughbred and
standardbred racing in 2000 at our world class racing
facilities," stated Ian M. Stewart, President of the Company.
"Our premier event, the Virginia Derby will be held on October 7,
2000. We look forward to building on prior years' success for our
2000 racing season."
Colonial Downs Holdings, Inc. is a Virginia corporation organized
in November 1996 to pursue opportunities for pari-mutuel
horseracing and wagering in Virginia. The Company, through its
subsidiaries, holds the only unlimited licenses to own and
operate a pari-mutuel horseracing course and satellite wagering
facilities/racing centers in Virginia. Colonial Downs Holdings,
Inc. became a publicly held company in March 1997 and trades on
the NASDAQ Small Cap System under the symbol CDWN.
COSTILLA ENERGY: Louis Dreyfus Natural Gas Announces Acquisition
----------------------------------------------------------------
Louis Dreyfus Natural Gas Corp. (NYSE: LD) announced that it has
entered into an agreement to acquire the oil and gas assets of
Costilla Energy, Inc. (Costilla) for $100 million.
The properties are primarily located in south Texas, including
Lavaca County where the Company has already experienced
considerable drilling success, and also in the Permian Basin of
west Texas and southeast New Mexico, and will complement the
Company's already sizeable holdings in these areas. Costilla
filed for reorganization in accordance with Chapter 11 of the
United States Bankruptcy Code on September 3, 1999. The
acquisition will be subject to normal and customary approval by
the bankruptcy court and other governmental authorities.
Mark Monroe, President and Chief Executive Officer, commented
"This purchase, which we will fund with borrowing from our credit
facility, fulfills all our key acquisition criteria. It is
predominantly natural gas, located in our core operating regions
and provides us with future drilling opportunities."
Louis Dreyfus Natural Gas is an independent energy company
engaged in the acquisition, development, exploration, production
and marketing of natural gas and crude oil.
CRIIMI MAE: Sells CMBS
----------------------
CRIIMI MAE Inc. (NYSE: CMM) sold seven classes of subordinated
commercial mortgage-backed securities ("CMBS") rated BB to CCC
and unrated from First Union-Lehman Brothers-Bank of America
Commercial Mortgage Trust, Series 1998-C2. The CMBS were sold to
Lehman ALI, Inc. ("Lehman") pursuant to a consent order signed by
Judge Duncan W. Keir on April 18, 2000. The transaction
generated aggregate sales proceeds of $140 million.
CRIIMI MAE used approximately $113 million of these sale proceeds
to retire the debt associated with these securities owed to
Lehman and First Union National Bank. The remaining proceeds,
approximately $27 million, will be used primarily to fund CRIIMI
MAE's plan of reorganization. This sale, along with the February
2000 sale of subordinated CMBS from Morgan Stanley Capital I,
Inc. Series 1998-WF2, which generated approximately $46 million
of aggregate sales proceeds, are positive steps in the
reorganization process contemplated by the Company's Second
Amended Joint Plan of Reorganization.
On October 5, 1998, CRIIMI MAE Inc. and two affiliates filed for
protection under Chapter 11 of the U.S. Bankruptcy Code. Before
filing for reorganization, the Company had been actively involved
in acquiring, originating, securitizing and servicing multi-
family and commercial mortgages and mortgage related assets
throughout the United States. Since filing for Chapter 11
protection, CRIIMI MAE has suspended its loan origination, loan
securitization and CMBS acquisition businesses. The Company
continues to hold a substantial portfolio of subordinated CMBS
and, through its servicing affiliate, acts as a servicer for
its own as well as third party securitizations. As previously
announced, on March 31, 2000, CRIIMI MAE and two of its
affiliates filed their Plan and proposed Amended Joint Disclosure
Statement with the US Bankruptcy Court for the District of
Maryland in Greenbelt, Maryland. The Bankruptcy Court has
scheduled a hearing for April 25 and 26, 2000 on approval of the
Disclosure Statement.
DYERSBURG CORPORATION: Moody's Downgrades Notes
-----------------------------------------------
Moody's Investors Service downgraded to B3 from B1, the rating of
Dyersburg Corporation's $110 million guaranteed senior secured
credit facility, and to Ca from Caa1, the rating of the company's
$125 million issue of 9.75% guaranteed senior subordinated notes,
due 2007. The senior implied rating of Dyersburg was lowered to
Caa1 from B2 and the issuer rating was lowered to Caa2 from B3.
The rating outlook is stable.
The downgrade reflects the continuing operating losses and margin
deterioration due to a decline in demand for core products;
increased competitive pressure from imports and lack of
significant margin improvements from the integration of AIH Inc.
("Alamac"). The downgrade further reflects systems integration
risks, supply bottlenecks as well as insufficient coverage of
fixed charges on a ration basis.
Continued softness in the knit and fleece markets, coupled with
increased price pressure from cheaper imports, resulted in a
25.4% decrease in sales in fiscal year 1999. In the first quarter
of fiscal year 2000, sales decreased 9.3% compared to sales in
the first quarter of 1999. Outerwear and stretched fabrics
continued to under-perform throughout most of fiscal 1999 and the
first quarter of fiscal 2000. Lower production levels due to
certain operating inefficiencies caused a sharp decline in gross
profit margin to 13% in 1999 from 17.6% in 1998. Similarly,
operating profit margin, adjusted for one-time charges, decreased
to 2.2% in 1999 from 8.7% in 1998. However, due to the closing of
two manufacturing facilities in the fiscal 2000 and certain cost
savings associated with them, Dyersburg's profitability margins
have slightly increased in the first quarter of fiscal 2000. The
gross profit margin in the first quarter of fiscal 2000 increased
to 15.4% from 14.4% for the comparable period last year, and the
operating profit margin increased to 3.9% from 2.9% in the first
quarter of fiscal 1999. Prior to the changes in sales environment
and to the acquisition of Alamac, gross profit margin had trended
above 20%, and operating profit margin above 10%.
In response to oversupply of low-priced garment imports, the
company implemented a restructuring program in late 1999, which
included the sale of some strategic assets and the closing of
some of its facilities. Although the restructuring slightly
improved profitability margins, utilization of assets still
remains depressed. As such, return on assets, measured as EBIT to
average total assets, decreased to 2.0% in fiscal 1999 from 10.5%
in fiscal 1998. For the last twelve months ending January 1,
2000, return on assets continued to be weak, at only 2.2%,
suggesting the potential for further asset impairment.
On August 19, 1999, Dyersburg entered into a new guaranteed and
secured senior credit facility replacing its existing one. The
facility consists of a three-year $84 million revolving line of
credit and a three-year $26 million term loan. As a result of the
refinancing of the bank debt, total available funds decreased to
$110 million from $140 million.
Improved seasonal working capital in the in the first quarter of
fiscal 2000 resulted in decreased borrowing from the revolving
facility line. As of January 24, 2000, the company had
approximately $15 million availability under its revolving
facility agreement, which should decrease in accordance with
seasonal working capital needs. Moody's remains concerned with
Dyersburg's high debt leverage. As of January 1, 2000 debt
accounted for 68.2% of the company's capitalization, up from
64.9% a year ago, and approximately 7.2 times the cash flow for
the last twelve months ending January 1, 2000. Significantly
deteriorated interest protection measures raise a concern over
Dyersburg's ability to cover its fixed charges in the future.
Interest coverage, measured as EBITDA less capital expenditures
to interest expense, is insufficient at 0.86 times, for the last
twelve months ending January 1, 2000. Coverage of fixed charges,
including rents and debt principal repayments, is also
insufficient, at approximately 0.4 times for the last twelve
months ending January 1, 2000, and does not show any signs of
major improvement.
The level of Dyersburg's fixed charges is significant given its
current cash generation. The term loan provides for scheduled
monthly amortization of $0.425 million, which began in February
1, 2000. Additionally, the company has significant capital lease
liabilities. Cost savings from closing of two plants in the first
quarter of 2000 are offset by decreased profitability, and in
order to regain momentum, Dyersburg would need to rebuild its
outerwear business going forward. Moody's also recognizes
Dyersburg's seasonal working capital needs in the first half of
the year but believes that existing financing should be adequate
to maintain ongoing working capital.
The B3 rating on the credit facility reflect the benefits of the
perfected first priority lien on all assets of the company and
its subsidiaries as well as the borrowing base formula of the
revolver and the amortizing structure of the term facility. The
bank facility is guaranteed by the company and all subsidiaries.
The Ca rating on the senior subordinated notes reflects the
structural subordination of the notes to the secured bank loan
and to the unsecured creditors of the operating subsidiaries. The
notes are guaranteed by the company and its present and future
domestic subsidiaries. The three notch differential between the
Ca rating and the Caa1 Senior Implied rating, reflects Moody's
expectation that some portion of this debt will be restructured.
Dyersburg Corporation, based in Dyersburg, Tennessee, is a
vertically integrated manufacturer of knit fleece, jersey,
circular knit fabrics and stretched fabrics which are sold to
manufacturers of men's, women's and children's apparel, and which
include infant sleepers and blankets, and adult outerwear
apparel.
DYNEX CAPITAL: Reports 1999 Results
-----------------------------------
Dynex Capital, Inc. (NYSE:DX) last week reported a net loss of $
81.3 million or $ 7.39 per common share for the fourth quarter of
1999, versus a net loss of $ 16.9 million or $ 1.75 per common
share for the fourth quarter of 1998. For 1999, the Company
reported a net loss of $ 75.1 million or $ 7.67 per common share,
versus net income of $ 19.6 million or $ 0.57 per common share
for 1998.
At December 31, 1999, the Company's recourse borrowings were
$537 million, versus $ 1.0 billion at December 31, 1998. The
Company is currently in violation of certain covenants in certain
borrowing agreements, and has not received written waivers for
these covenant violations as of today's date. Such covenant
violations may permit the lenders to accelerate the debt as due
and payable upon written notice to the Company, although
currently no lender has done so. The Company's focus will
continue to remain on the repayment of recourse debt primarily
through the sale of assets. Many of the Company's secured
recourse borrowing facilities mature during the second quarter of
2000, and there can be no assurance that the related lenders will
renew or extend such borrowing facilities at their maturity.
FAMILY GOLF CENTERS: Eyeing for Bankruptcy Protection
-----------------------------------------------------
On April 18, 2000, The Chicago Sun-times reported that Family
Golf Centers Inc. will probably seek protection under U.S.
bankruptcy laws if it cannot amend or get a waiver from its new
credit agreement by May 5. The New York-based golf center
operator said that if it cannot get another waiver or amendment,
some $ 126.6 million will come due immediately.
FOSTER LUMBER: Case Summary and 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Foster Lumber Company, Inc.
17943 Highway 27A
Shiloh, GA 31826
Petition Date: April 4, 2000 Chapter 11
Court: Northern District of Georgia
Bankruptcy Case No.: 00-17156
Judge: W. Homer Drake
Debtor's Counsel: Robert B. Whatley
113 Ridley Ave.
LaGrange, GA 30240
Tel: 706-884-3059
Fax: 706-882-4062
Email: rwhatley@charter.net
Total Assets: $ 1,529,255
Total Debts: $ 9,450,266
20 Largest Unsecured Creditors
First Peoples Bank
PO Box 1178 $ 5,500,000
Pine Mountain, GA Collateral FMV
31822 $ 1,350,255
First Peoples Bank
PO Box 1178 $ 1,150,000
Pine Mountain, GA Collateral FMV
31822 $ 500,000
First Peoples Bank
PO Box 1178 $ 577,000
Pine Mountain, GA Collateral FMV
31822 $ 1,350,255
First Union (Money
Store) $ 372,726
2840 Morris Ave. Collateral FMV
Union, NJ 07083 $ 140,000
First Union (Money
Store) $ 231,000
Applied Automation Tech. $ 127,112
First Peoples Bank $ 120,769
Collateral FMV
$ 1,350,255
First Peoples Bank $ 114,104
Collateral FMV
$ 1,350,255
Georgia Power $ 93,396
Phenix Lumber $ 85,295
J.W. Miller $ 65,720
Meriwether Bank & Trust $ 53,590
Citicorp Leasing Co. $ 52,991
Collateral FMV
$ 4,000
Concord Commercial $ 147,723
Corporation Collateral FMV
$ 100,000
Cameron & Barkley $ 44,176
First Peoples Bank $ 35,155
Collateral FMV
$ 1,350,255
Harris Count $ 34,965
Perceptron $ 32,768
U.S. Dept Transportation $ 23,401
TransAmerica Insurance $ 22,378
HARNISCHFEGER: Motion To Sell Beloit's Assets To 5 Jt Venturers
---------------------------------------------------------------
The Court granted the debtors' motion authorizing Beloit US and
Beloit Canada Ltd. to sell some of their assets to certain Joint
Venturers free and clear of all liens, claims and encumberances
and transfer taxes.
The Debtors explained that other than assets covered in the 5
Asset Purchase Agreements approved by the Court pursuant to the
Beloit Auction, Beloit US has additional assets to be sold. The
Court approved the debtors' sale of the Assets to any party that
offers the highest and best bid for the Assets.
The Debtors affirm that although the Assets were not the subject
of any bids pursuant to the Auction, numerous parties have
investigated and inspected the assets. Their financial advisor,
Lawrence E. Young of Jay Alix and Associates, has informed
numerous parties that the Assets were still available, the
Debtors relate. Mr. Young specifically identified the
Assets and outlined bidding procedures. Pursuant to that, Mr.
Young has received seven bid proposals for the Assets. Mr Young
evaluated the proposals and, after lengthy negotiations, chose
the Buyer's bid as the stalking horse bid.
The Buyer has deposited $1,144,550.00 for the purchase of the
assets at a price between $16,252,470.00 and $21,502,470.00 the
actual amount of which will depend on:
(i) whether the Buyer decides to purchase the Beloit Facility
pursuant to due diligence to be completed on or before April 3,
2000;
(ii) the result of negotiations over environmental cleanup
liability for the other two of the three Properties - the R&D
Facility and the Fab Shop - together known as the Rockton
Properties, which are under a Consent Decree issued by the
Illinois Environmental Protection Agency for which Beloit US, as
the record land owner, has certain environmental cleanup
liability.
The Purchase Price will be:
(1) $16,252,470.00 if (a) Beloit Facility is not purchased, and
(b) Beloit US is relieved of all
environmental cleanup liability and the Rockton Properties
is transferred to the Buyer, or Beloit US retains ownership of
the Rockton Properties;
(2) $17,502,470.00 if (a) Beloit Facility is purchased, and
(b) Environmental cleanup liability in
connection with Rockton Properties is as in (1);
(3) $20,252,470.00 if (a) Beloit Facility is not purchased, and
(b) The Rockton Properties shall be
transferred to the Buyer on the Final Payment Date free of
any environmental cleanup liability or past or future
environmental liens and the Buyer is entitled to assign the
benefits of such agreement to any subsequent owner of the
Rockton Properties;
(4) $21,502,470.00 if (a) Beloit Facility is purchased, and
(b) Environmental cleanup liability in
connection with Rockton Properties is as in (3).
If the Beloit Facility is to be purchased, the Buyer shall assume
responsibility for any environmental liabilities related to the
Beloit Facility. If no agreement over environmental cleanup
liability for the Rockton Properties is reached, then the sale of
such Properties shall be canceled. Beloit US and the Buyer may,
by further mutual written agreement, make arrangements for
payment other than the above-described options.
The Asset Purchase Agreement provides for the Buyer to liquidate
some Excess Assets, with all gross proceeds paid to Beloit US and
the Buyer charging a 10% buyer's premium, half of which shall be
paid to Beloit US, consistent with payment terms utilized by
other liquidators working for the Debtors, and the Buyer shall
charge no expenses for selling the Excess Assets.
The Asset Purchase Agreement provides for Beloit US to withdraw
from consideration, on or before the Closing Date, 4 combinations
of the real estate and equipment located at 5 Sites. In the event
of such withdrawal by Beloit US, the Buyer is entitled to a
Break-Up Fee equal to 3.5% of the allocation price for the
withdrawn Sites, and the Purchase Prices shall be reduced
accordingly. If such withdrawal should cause the Purchase Price
to be less than $10,450,000, then the Buyer can choose to have
the Asset Purchase Agreement become null and void.
The Debtors tell the Court that they arrived at the stalking
horse offer after vigorous negotiations with numerous parties and
will continue to evaluate bid proposals to ensure that the
Purchase Price is the highest and best offer. They further inform
the Court that an auction will be conducted in the event
additional bids of $100,000.00 or more higher than the Purchase
Price are received on or before 4:00 p.m., April 14, 2000.
To maintain consistency with other agreements approved by the
Court, the Asset Purchase Agreement provides for a list of assets
which Valmet Corporation will have the option to lease for one
year, and which Valmet will have the option to purchase.
The Buyer includes:
* MBA Acquisition Inc., Ltd.
* Enterprise Dynamics, Inc.
* Stargate Realty Acquisition Co.
* Yoder Machinery Company
* Weldon F. Stump and Company, Inc.
* Mohawk Machinery, Inc.
* Giuffre I, LLC
* Perfection Machinery, Inc.
(Harnischfeger Bankruptcy News - Issue 22; Bankruptcy Creditor's
Services Inc.)
HARVARD PILGRIM: State Revises Plan
-----------------------------------
The Boston Globe reports on April 19, 2000 that the state, which
took over the HMO January 4 because of losses topping $ 200
million last year, revised last week its rehabilitation plan for
Harvard Pilgrim Health Care, allowing the release of severance
pay to 25 of 38 former HMO employees who had objected to the
original plan.
If the Supreme Judicial Court approves the amended plan, the
state will be able to release Harvard Pilgrim from receivership.
Regulators asked the court to reject an objection from Health
Care For All, a consumer advocacy group, recalls Liz Kowalczyk.
It argues that the state must inform the public of Harvard
Pilgrim's true financial status before releasing it from
receivership, but doing it would put the company at a competitive
disadvantage, the state said.
HRPT PROPERTIES TRUST: S&P Revises Outlook to Negative
------------------------------------------------------
Standard & Poor's revised its outlook on HRPT Properties Trust to
negative from stable. In addition, ratings were affirmed on the
company and its rated debt.
This outlook revision reflects HRPT's ownership interest in
(unrated) Senior Housing Properties Trust (Senior Housing), a
REIT that faces significant challenges given the troubled
situation for certain of its health care operator/tenants.
Newton, Mass.-based HRPT is a REIT that owns a US$2.7 billion
portfolio (cost basis) of 195 office properties containing 19.6
million square feet.
The portfolio has good stability characteristics, as it is 98%
leased with an average remaining lease term of about seven years.
Furthermore, about 53% of HRPT's rental revenues are derived from
tenants with an investment grade rating. The largest tenant is
the U.S. government, accounting for almost 20% of HRPT's
rental revenues.
However, the trust has a 49.3% interest (US$112.1 million market
value) in Senior Housing, a REIT that invests in senior and
health-care-related housing. Two of Senior Housing's tenants,
Integrated Health Services and Mariner Post-Acute Network Inc.,
have filed for bankruptcy. The agreements with these tenants are
being renegotiated and remain subject to approval by the
bankruptcy courts. The new agreements include the potential for
reduced rents/interest to Senior Housing or the REIT's assumption
of certain facilities, whereby it would re-lease or sell the
properties. To date, Senior Housing has recognized US$30
million in impairment losses, and it has announced a substantial
(50%) cut to its common dividend. HRPT recognized US$14.8
million in losses in 1999, representing its share of these
impairments. In addition, the announced dividend cut is expected
to reduce HRPT's dividend income by about US$15 million, which
equates to about 8% of funds from operations in 1999.
HRPT's financial risk profile has weakened, but it currently
remains sufficient for the rating. Debt-to-book capitalization of
about 47% is up from historical levels of 30% to 40%, as much of
the trust's growth in 1999 was debt-financed due to the difficult
equity markets for REITs. HRPT's debt maturity schedule, however,
is very manageable, with the only significant near-term debt
maturity being US$40 million in convertibles, which come due in
October 2001. The trust intends to reduce leverage with proceeds
from asset sales. HRPT is currently negotiating the sale of 10
office properties and intends to use the expected US$150 million
to US$160 million net proceeds to reduce outstanding debt. Cash
flow coverage remains sufficient at 3.1 times (x) debt service
and just under 3.0x, adjusting for the reduced dividend income
from Senior Housing. HRPT maintains good internal flexibility,
with a large, essentially unencumbered portfolio of good quality
office properties. The trust also has access to a US$500 million
unsecured bank revolver (US$132 million outstanding).
HVIDE MARINE: Hires Industry Veteran
--------------------------------------
Hvide Marine has hired Gerhard E. Kurz, a maritime industry
veteran to assume control of the Fort Lauderdale company in its
fifth month after emerging from bankruptcy.
Kurz, who retired March 1 as president of Mobil Shipping and
Transportation Co. (MOSAT) after Mobil's acquisition by Exxon.
spent 36 years with Mobil.
Hvide operates tugboats and tankers and its fortunes are heavily
tied to the oil industry. Founded in 1958 by Hans Hvide, who died
last month, the company went public in 1994 and underwent a
massive fleet expansion financed by debt. When oil prices
nosedived in 1998, the company's revenue shrank, forcing it to
seek more favorable terms for its debt.
IDAHO TIRE: Case Summary
------------------------
Debtor: Idaho Tire Recovery, Inc.
3707 East Linden
PO Box 487
Caldwell, ID 83606
Chapter 11
Court: District of Idaho
Bankruptcy Case No.: 00-00968
Judge: Terry L. Myers
Debtor's Counsel: Howard R. Foley
Foley & Freeman, Chartered
77 East Idaho Street, Suite 300
PO Box 10
Meridian, ID 83680
Tel: (208) 888-9111
Fax: (208) 888-5130
Total Assets: $ 1 million above
Total Debts: $ 1 million above
INTEREX: Tripp Lite Acquires Company For An Undisclosed Amount
--------------------------------------------------------------
The Chicago Sun-Times reports that Tripp Lite, a Chicago-based
No. 1 maker of power-protection equipment such as surge
protectors for computers, has purchased Interex, maker and
retailer of electronic cable and connectivity products for an
undisclosed amount. Interex, which entered Chapter 11
reorganization in January, rang up 1999 sales of more than $ 36
million. Privately held Tripp Lite said it would add about 30
employees to its South Side operation for the additional work.
INTERPLAY ENTERTAINMENT: Greater Loss Caused By Subsidiary
----------------------------------------------------------
According to an article in the Los Angeles Times on April 18,
2000, Interplay Entertainment Corp., an Irvine maker of
entertainment software, said Monday that it restated its fourth-
quarter and annual financial results to show a greater loss
caused by changes in the results of a minority-owned subsidiary.
Interplay said that a $ 1.7-million reduction in income from
restated results of Virgin Interactive Entertainment Ltd. pushed
its own fourth-quarter loss to $ 9.6 million, or 35 cents a
share, from its previously posted loss of $ 7.8 million, or 29
cents a share. For last year, Interplay's loss widened to $ 41.7
million, or $ 1.86 a share, from previously reported loss of $ 40
million, or $ 1.78 a share.
Virgin's restatement came after Interplay announced its results a
month ago. Interplay said its reduced share of Virgin's earnings
did not affect its operating income.
The Irvine game maker attributed its losses to delays in the
releases of three new games and one-time expenses for bad debt,
restructuring charges and discontinued operations. The company
also took a $ 5.4-million charge to reserve its deferred tax
asset.
JINEY JUNGLE: Exits Birmingham, Tuscaloosa Markets
--------------------------------------------------
Jitney Jungle Stores of America, Inc. today announced the closure
of seven grocery stores in the Birmingham and Tuscaloosa, AL.
Markets.
Ron Johnson, President and Chief Executive Officer of JJSA, Inc.
said, "The exit from the Birmingham and Tuscaloosa markets
through the closure of these seven grocery stores is part of our
transition into a smaller more viable company. Our objective
since the bankruptcy filing back in October 1999, has been to use
the reorganization process to strengthen our business operation
and this exit is an important step in achieving this objective."
Johnson added, "Jitney expects to emerge from bankruptcy by the
end of the year without debt and with a financial structure in
place that will enable us to compete successfully in the years to
come."
The company currently operates 152 grocery stores, 48 gas
stations and 10 liquor stores in Mississippi, Alabama, Louisiana
and Florida.
LAMONTS APPAREL: To Sell Assets To Gottschalks Inc.
---------------------------------------------------
Lamonts Apparel Inc. (OTC:LMNTE), which operates 38 casual
lifestyle and apparel stores in five Northwestern states,
announced the signing of an agreement that allows Gottschalks
Inc. (NYSE:GOT), a regional department store chain that operates
42 department stores and 20 specialty apparel stores in the
West and Northwest, to acquire Lamonts' stores as an asset
purchase, subject to approval by the Bankruptcy Court.
Under the agreement, Gottschalks will acquire all of Lamonts'
store leases, fixtures and equipment. Gottschalks also intends to
offer employment to substantially all of Lamonts' store employees
and managers.
In anticipation of a new owner, Lamonts' current inventory will
be sold; a hearing is scheduled for May 8, 2000, to review the
inventory sales, which would commence on or about May 10, 2000. A
hearing on the asset purchase agreement is scheduled for May 15,
2000.
Lamonts' 115 corporate employees in Kirkland, in the Greater
Seattle area, will continue to receive compensation and benefits
for at least 60 days, or until June 24, 2000. When the sale is
finalized, Lamonts' corporate-office staff will be released to
pursue other employment opportunities.
The committee representing Lamonts' unsecured creditors has
indicated support for the sale. The company anticipates
completion of its reorganization proceedings within the next
eight months.
Founded in 1967, Lamonts Apparel operates 38 stores in Alaska,
Idaho, Oregon, Utah and Washington. The company has headquarters
in Kirkland, employs approximately 1,500 people and has annual
sales of approximately $210 million. The company voluntarily
filed to reorganize under Chapter 11 on Jan. 4.
Founded in 1904, Gottschalks is a regional department-store chain
based in Fresno, Calif., with annual sales including leased
departments of approximately $568 million.
LEVITZ: Twelfth Extension of Exclusivity
----------------------------------------
Assured by the Debtors that negotiations progress toward a
consensual plan of reorganization in these chapter 11 cases,
Judge Walrath granted Levitz a twelfth extension of their
exclusive period within which to file a plan of reorganization
through May 31, 2000, together with a concomitant extension of
their exclusive period during which to solicit acceptances of
that plan through July 31, 2000. (Levitz Bankruptcy News Issue
31; Bankruptcy Creditors' Services, Inc.)
MARQUIP: Files for Chapter 11 Bankruptcy Protection
---------------------------------------------------
According to a report in The Wisconsin State Journal,
Marquip, the maker of equipment for the corrugated paper
industry, has filed for federal bankruptcy protection after
saying that it would cut about 300 jobs at its plants in Madison
and in Phillips in Price County because of turmoil in the paper
industry two months ago.
MISSISSIPPI MANAGED: HMO To Be Liquidated
-----------------------------------------
According to The Associated Press, the only HMO in the state that
provided Medicaid coverage, Mississippi Managed Care Network, was
declared insolvent by Hinds County Chancellor Stuart Robinson and
has been ordered into liquidation.
Special Assistant Attorney General Mark Haire told the Associated
Press, that there is no hope for the company, based on a review
of its assets and liabilities and for the HMO's remaining assets
will be sold to pay any outstanding claims. "They never gave us
the financial information we were looking for and were late
filing monthly financial statements and paying claims", Haire
added.
MONTGOMERY WARD: Motion To Establish Distribution Trust
--------------------------------------------------------
Class 3 Unsecured Claims against Montgomery Ward and Lechmere are
satisfied, pro rata, under the Debtors' confirmed plan of
reorganization, from the Class 3 Distribution Pool. For purposes
of making pro rata distributions, the Reorganized Debtors have
estimated the size of the pool of Class 3 Claims. As a result,
three distributions have been sent to Class 3 Creditors to date:
a 20.3% initial distribution; a 1.0% second distribution; and a
3.7% third distribution.
The Reorganized Debtors are still sitting on $152.5 million for
the benefit of Class 3 Creditors. If the present system of
quarterly distributions envisioned under the Plan continues,
after allowance and disallowance of disputed claims, the
Reorganized Debtors see that they'll be in the business of making
subsequent distributions for the next five years. The
Reorganized Debtors note that a fourth 1.5% distribution is
slated for May.
Against that backdrop, the Reorganized Debtors ask Judge Walsh to
approve the establishment of a Distribution Trust to be backed by
an insurance policy underwritten by ACE USA, Inc. The Policy
will afford creditors the option of accepting an accelerated
28.75% total payment on account of their allowed claims.
The benefits to the Reorganized Debtors are obvious, relieving
them of substantial administrative costs and burdens.
The Insurer has required that the Reorganized Debtors obtain a
90% acceptance rate of the accelerated payment option. With that
in mind, the Reorganized Debtors propose to deem each of the
15,000 affected creditors as having accepted the option unless
they opt out using a form that must be delivered to Logan & Co.
by May 31, 2000. (Montgomery Ward Bankruptcy News Issue 48;
Bankruptcy Creditors' Services, Inc.)
OCEAN RIG NORWAY: Moody's Confirms Secured Rating
-------------------------------------------------
Moody's Investors Service confirmed a B3 rating on Ocean Rig
Norway AS's (ORN) $225 million of 10.25% senior secured notes and
$125 million of floating rate notes (Libor + 4.75%), each due
2008. The senior implied rating is raised from Caa1 to B3 and the
senior unsecured issuer rating is raised from Caa2 to Caa1. This
concludes Moody's review for downgrade. The outlook is stable,
though dependent on satisfactory resolution of ORN's $50 million
to $60 million shortfall in liquidity forecasted by 4Q2000 for
final rig construction costs. Moody's believes the liquidity
shortfall can be resolved within the next six months. The stable
outlook is also prospective to rig completion but these risks
appear to be compatible with the B3 rating.
Moody's believes that ORN and the noteholders face several
pivotal challenges. During 2000, ORN must (1) arrange liquidity
sufficient to cover rig completion; (2) win a drilling contract
able to support ORN's post-completion financial and operating
cost structures - this may require ORN to assign management of
the rigs to an established rig contractor; (3) absent a drilling
contract, arrange sufficient liquidity to tide ORN over until a
contract is arranged; (4) complete the rigs. The fact that the
controlling shareholder wants to sell his 30% interest may
accelerate resolution of these challenges.
Upon rig completion, ORN projects that the break-even cash flow
for the rigs is $132,000/day ($48 million per year) while in
operating mode, including $60,000/day of interest expense and
$17,200/day of principal installments. If the rigs are not on
contract and are in lay-up mode instead, ORN estimates cash costs
of $99,000/day ($36 million per year), including interest and
installments. The current market for ultra deepwater
semisubmersibles is in the range of $150,000/day for 6 to 12
month contracts and may be higher for shorter term contracts. A
recent drillship contract went for $225,000/day for a 90 day or
one well contract.
OWENS CORNING: Domenico Cecere Named COO
------------------------------------------
Domenico Cecere, today, was named executive vice president and
chief operating officer for Owens Corning, according to Glen H.
Hiner, chairman and chief executive officer. The announcement
was made at the company's annual meeting in Toledo, Ohio.
NORTHPOINT COMMUNICATIONS: Moody's Assigns Caa1 To Senior Notes
---------------------------------------------------------------
Moody's Investors Service has assigned Caa1 ratings to NorthPoint
Communications Group, Inc.'s $400 million of 12.875% senior notes
due 2010, and to its senior unsecured issuer rating. Moody's has
also assigned a senior implied rating of B3 to the company. The
outlook is stable. This is the first time Moody's has rated
NorthPoint.
The rating recognizes risks which include those typical for a
company in the early phase of its operations including continued
negative cash flows (EBITDA) for the next several years and rapid
geographic expansion; a focus on a single technology which is not
yet mature; a dependency on third-parties to sell the service;
and our view that the company will aggressively broaden its
strategy over the next several years. The rating also recognizes
the company's success to date in developing its DSL network
including a significant co-location footprint; and the growing
end-user demand for high speed Internet access.
The Caa1 rating on the notes reflects the notes structural
subordination to the $250 million secured credit facility. The
senior notes are issued by the ultimate holding company,
NorthPoint Communications Group, Inc. (NPCG) and are not
guaranteed by subsidiaries. The borrower of the $250 million
credit facility is NorthPoint Communications Inc., a wholly-owned
subsidiary of NPCG. The credit facility is secured by a lien on
all assets and is guaranteed by the parent.
NorthPoint provides dedicated Internet access services via DSL
technology. The company introduced commercial service in San
Francisco in March 1998. NorthPoint has been aggressively
building its DSL network and developing its distribution channels
during the past two years. NorthPoint currently operates in 37
markets and expects to reach 60 markets with 1,700 central office
co-locations by the end of the year. This continues to be an
aggressive roll-out, although to date the company seems to be
successful in its execution.
We believe NorthPoint's wholesale sales strategy is appropriate
given the early stage of the company's development. A wholesale
approach allows the company to focus its resources on network
development in the earlier years, while minimizing the cost and
management of a large sales force. NorthPoint provides access to
Internet service providers (ISPs) who resell the company's DSL
services to small and medium-sized businesses and residential
customers. Although the company plans to remain a service
wholesaler for the foreseeable future, Moody's believes
NorthPoint's strategy may evolve over time to include a larger
base of commercial customers supported by its own dedicated sales
force. We have witnessed this wholesale-to-retail migration by
other service providers in the past and recognize the operational
and financial risks that such a migration entails including
building a large sales force and a more complex billing and
customer servicing operation.
We expect NorthPoint will have to broaden its product mix over
time. The company is predominantly a provider of dedicated
Internet access services today. Given the higher access speeds
and significant cost advantage that NorthPoint (and other DSL
carriers) will enjoy relative to other service providers, they
should be able to attract a good customer base in the near term.
However, we also expect that over time the pricing differential
will be eroded by increased DSL competition from new competitors
and incumbents. In order to develop a sustainable advantage, non-
pricing related characteristics will increase in significance.
This could include additional services, such as voice and data
center services. The company has recently shown an interest in
partnering with content developers and distributors.
Nevertheless, the uncertainty in how the company progresses
beyond its initial DSL access service yields an element of risk.
NorthPoint has recently announced joint ventures with Call-Net in
Canada and VersaTel in Western Europe to provide DSL services in
those markets. We expect these ventures will follow a similar
business model as that employed by NorthPoint in the US.
NorthPoint has contributed some upfront capital to these
initiatives and the company expects that these units will be
self-financed going forward.
NorthPoint has recently realigned the management team. Liz
Fetter, NorthPoint's COO since March 1999, has succeeded Michael
Malaga as CEO. Malaga will remain Chairman of NorthPoint and run
the company's European venture, VersaPoint. Finally, Michael
Glinsky was hired as the new CFO in April 2000.
Under the current plan, Moody's would expect cash flow (EBITDA)
to remain negative for at least three years. Also, we believe the
company's cash on hand plus availablity under the credit facility
can satisfy its expected capital needs for the next 18 months.
Yet we remain somewhat cautious since further geographic and
business expansion could impact the company's profile over this
time.
ROBERDS: President Quits
-----------------------
Upon resigning, Robert Wilson, the president of Roberds Inc.,
sated, "The company is downsizing rapidly, and it makes sense.
The company will be less than half the size it was less than a
year ago, and I want to find growth opportunities again."
In addition to being president, Mr. Wilson was secretary, chief
administrative officer and general counsel of Roberds.
STEPHEN LAWRENCE: Files For Chapter 11
------------------------------
On April 20,2000, The Record (Bergen County, NJ) reports that the
Stephen Lawrence Co., a family-owned producer of wrapping paper
and related products, filed for Chapter 11 bankruptcy protection.
The Moonachie operation said it was experiencing cash-flow
problems. In a statement, the company said it had received
numerous inquiries to purchase "substantially" all of its assets.
TELEGEN: Files Reorganization Plan
----------------------------------
Telegen Corp., announced that it has filed its reorganization
plan in the U. S. Bankruptcy Court for the Northern District of
California, subject to court approval at a hearing scheduled for
May 25, according to a newswire report. The company expects to
complete reorganization by June 30. Telegen Corp., headquartered
in San Mateo, California, is developing a proprietary flat panel
display technology known as HGED, as well as hardware and
software solutions for Internet-delivered MP3 digital music.
The Company's stock is traded under the symbol TLGNQ.OB.
THIS END UP: Recovery Doubtful
------------------------------
The Richmond Times Dispatch reports on April 15, 2000 that
Richard A. Sebastiao, the chain's acting chief executive officer,
is not optimistic about the company's ability to emerge
successfully from Chapter 11, but said a buyer has made an offer
for a portion of the business. He did not provide details of the
offer.
According to the article, developments indicate that This End
Up's financial, distribution and logistical problems have not
improved since the chain filed for Chapter 11 bankruptcy
protection in mid-February.
Sebastiao does not think it is possible for This End Up to
operate on its own once the chain shuts down 65 of its 135
stores. The 65 stores are the chain's worst-performing locations.
Approximately 60 of those have closed already.
This End Up, which employs about 1,600 workers, has three key
divisions. One makes roughly 60 percent of the furniture the
company sells. Another operates the retail stores, which account
for 70 percent of the chain's annual revenues. Another segment
sells the furniture to colleges or other institutions.
The chain's creditors have said This End Up probably will be sold
or liquidated.
TRIFOX: Angoss Software Issues Update On Litigation Proceedings
---------------------------------------------------------------
According to the Market News Publishing via COMTEX, Angoss
Software Corporation obtained an order in the State of California
entitling it to enforce its damages judgment, currently valued at
in excess of Cdn. $5 million, against TRIFOX. TRIFOX, which is a
private California-based software development company and is
currently operating under chapter 11 bankruptcy protection, made
an informal settlement proposal to ANGOSS, payable over time.
ANGOSS is currently the only material creditor of TRIFOX.
UNITED ARTISTS: To Close Two Uptown Cinemas
-----------------------------------------
The president of the financially struggling United Artists
Theatre Circuit Inc. told the Journal last week that the company
intends to close its two Uptown cinemas, Winrock 6 Theatre and
Coronado 6 Theatre, and build a 12- to 14-screen cineplex with
stadium seating, which has more of an incline and plusher seats,
in that part of town, recalls Michelle Pentz of the Albuquerque
Journal.
In addition, UA plans to add one screen to the Starport 9
Cottonwood Mall Theatre in the Cottonwood Mall one of the chain's
top-producing New Mexico theaters and to convert the Cottonwood
theater to stadium seating later this year, said United Artists
president Kurt Hall.
According to Ms. Pentz, in late 2000 or early 2001, the company
will expand its Four Hills 10 Theatre at 13120 Central SE near
Tramway, as well as install stadium seating. Done two screens at
a time, the switch to the tiered stadium seating takes a few
months, Hall said.
UNITED MEDICORP: 1999 Loss Raises Doubt
---------------------------------------
Negatively impacted by losses from discontinued operations and
revenue reductions in its continuing operations, United Medicorp,
Inc. (OTC Bulletin Board: UMCI) announced today a loss in 1999.
Revenue from continuing operations in 1999 was $ 3,158,341, down
24% percent compared to 1998. Net income from continuing
operations in 1999 was $ 38,516, down 90% compared to 1998.
Revenues and net income from continuing operations declined
primarily due to previously announced losses and restructuring of
significant customer contracts. As a result, the Company's
independent auditor's report stated that these factors raise
substantial doubt about the Company's ability to continue as a
going concern. Discontinued operations in 1999 produced a net
loss of $ 815,687, an increase of 253% compared to 1998. The net
loss in 1999 was $ 777,171, an increase of 536% compared to 1998.
The 1999 basic and diluted loss per share was $ .0270 compared to
the 1998 basic and diluted earnings per share of $ .0060 and $
.0058, respectively.
Based in Dallas, Texas, United Medicorp, Inc., provides medical
insurance claims processing, accounts receivable management,
collection agency services to healthcare providers nationwide.
UNITED STATES EXPLORATION: Announces Settlement Agreement
---------------------------------------------------------
United States Exploration Inc.(ASE:UXP) announced that it has
entered into two agreements and a letter of intent that, if
consummated, will resolve the existing default under its
principal credit facility.
The Company has been in default under its loan agreement with ING
(U.S.) Capital LLC since September 1998. As of March 31, 2000,
the outstanding loan amount due ING was $31,250,000 plus accrued
past-due interest of approximately $ 2,222,000. These amounts are
secured by substantially all the Company's oil and gas
properties. ING has granted the Company (or its designee) an
option to purchase the ING loan for a total of $17,000,000 at any
time on or before May 15, 2000. The Company paid $500,000 for the
option. The Company may extend the option until May 31, 2000, by
paying an additional $500,000 on or before May 15, 2000. All
amounts paid for these options would be credited against the
purchase price of the loan if the option is exercised.
The Company has also entered into an agreement with Bruce D.
Benson, its Chairman of the Board, Chief Executive Officer and
President, for the purchase by Mr. Benson of 3,000,000 shares of
common stock for $1.10 per share or a total of $3,300,000. On
April 24, 2000, the closing price of the Company's common stock
on the American Stock Exchange was $0.69 per share. At the time
the purchase is consummated, Mr. Benson's employment agreement
would be amended to extend its term for an additional year, or
until August 6, 2001. The amendment would also provide for a
severance payment of $1,000,000 to Mr. Benson in the event that
he is terminated by the Company without cause prior to the end of
the term of the agreement, the Company defaults under the
agreement or a majority of the board of directors changes during
the period. The agreement with Mr. Benson is conditioned upon the
purchase of the ING loan pursuant to the exercise of the option
and the completion of a new credit facility as described below.
The Company has also entered into a letter of intent with a new
lender to provide a $24,000,000 credit facility. Of the
amount,$12,000,000 would be available to fund the purchase of the
ING note and the remaining $12,000,000 would be available for
future development of the Company's properties under certain
conditions. The loan would bear interest at the rate of 10% per
annum and be repayable in varying quarterly installments based on
the Company's cash flow beginning in June 2000 and continuing
through December 2009. In addition, the lender would be granted a
6% overriding royalty interest, proportionately reduced, in all
of the Company's existing wells in Colorado and in any new wells
drilled by the Company in Colorado while the loan remains
outstanding. The Company would have the right to repurchase a
portion of these royalties after the Lender has achieved a 15%
per annum return on investment.
The initial proceeds of the new borrowing, together with the
proceeds of the sale of stock to Mr. Benson and internally
generated funds, would be used to fund the purchase of the ING
loan. However, because the letter of intent with the new lender
is not binding, there can be no assurance that the agreement for
the new credit facility will be successfully completed. If the
Company is unable to complete the arrangements for a new credit
facility prior to the expiration of the ING option, whether
pursuant to the existing letter of intent or otherwise, it would
be unable to purchase the ING loan and ING could elect to pursue
its remedies under its existing credit agreement with the
company.
United States Exploration, Inc. is engaged in the acquisition,
exploration, production and marketing of natural gas and crude
oil in North America. The Company's principal reserves and
producing properties are located in northeast Colorado. The
Company's common stock trades on the American Stock Exchange
under the symbol UXP.
VISTA EYECARE: Case Summary
----------------------------
Debtor: Vista Eyecare, Inc.
296 Grayson Highway
Lawrenceville, GA 30045
Petition Date: April 5, 2000 Chapter 11
Court: Northern District of Georgia
Bankruptcy Case No.: 00-65214
Judge: James Massey
Debtor's Counsel: Dennis S. Meir
Michael D. Langford
Paul M. Rosenblatt
Todd C. Meyers
KillPatrick Stockton, LLP
1100 Peachtree Street
Suite 2800
Atlanta, GA 30309
(404) 815-6500
Total Assets: $ 100 million above
Total Debts: $ 100 million above
WASTE MANAGEMENT: To Sell Assets To Waste Corporation of America
----------------------------------------------------------------
Waste Management, Inc. (NYSE: WMI) today announced that the
Company and certain subsidiaries have reached a definitive
agreement to sell certain of its North American solid waste
businesses and one million cubic yards of disposal to Waste
Corporation of America (WCA) for approximately $110 million. In
addition, WCA will assume closure and post closure liabilities.
The transaction, which is expected to be completed in the third
quarter, is subject to approvals from various state and federal
agencies as well as other normal and customary closing
conditions.
Waste Management said the transaction will include 10 waste
collection businesses in Arkansas, Kentucky, Missouri, Nebraska,
Oklahoma and Texas; 12 landfills in Arkansas, Kansas, Kentucky,
Missouri, Nebraska, Oklahoma and Texas; and 7 transfer stations
in Arkansas, Missouri, Nebraska and Oklahoma.
The sale of these businesses stems from Waste Management's
strategy to re-focus on and strengthen the profitability of its
core North American solid waste operations. The Company's
subsidiaries are in discussions with other parties regarding the
divestiture of international businesses, as well as other non-
core and certain other non-integrated solid waste assets in North
America. The Company intends to use the proceeds of these
divestitures primarily to reduce debt, and to make selective
tuck-in acquisitions of solid waste businesses in North America.
Waste Management, Inc. is its industry's leading provider of
comprehensive waste management services. Based in Houston, the
Company serves municipal, commercial, industrial, and residential
customers throughout the United States, and in Canada, Puerto
Rico and Mexico.
WORLDTEX INC.: Moody's Downgrades Notes; Assigns Negative Outlook
-----------------------------------------------------------------
Moody's Investors Service downgraded the rating on the credit
facility of Worldtex, Inc. ("Worldtex") to B2 from Ba2, and
lowered the rating on its 9.625% issue of senior unsecured notes
due 2007, to Caa1 from B1. At the same time, the senior implied
rating was lowered to B3 from Ba3, and the issuer rating was
lowered to Caa1 from B1. The rating outlook is negative.
The downgrade is prompted by the company's continuous lackluster
operating performance impacted by less favorable product mix in
narrow elastics, a weak pricing environment in covered elastic
yarns; industry oversupply; high start up costs for narrow
elastic business; and operating inefficiencies associated with
some of the company's yarn production facilities. The ratings
assume a favorable refinancing of the company's credit facility,
for which the company received an amendment and waiver of
covenant violations through June 30, 2000. While the ratings are
constrained by the company's deteriorated credit profile, the
ratings also acknowledge Worldtex's solid position as a niche
player and its strong market share.
The negative outlook reflects the risk of continued deterioration
in profitability. Should earnings levels fail to improve, Moody's
believes the company will need to restructure its public debt.
Worldtex has shown uneven operating performance in the past
several quarters. Global industry overcapacity and increased
price pressure from cheaper foreign imports are among the factors
contributing to decreased profitability of Worldtex. The company
experienced significantly lower demand in the US and Europe for
covered elastic yarns. Further, the company's decision to shift
away from production of higher margin narrow elastics due to
decreased demand from intimate apparel producers, adversely
affected Worldtex's profitability. In addition, the company's
largest consumer of commodity narrow elastics - Fruit of the Loom
-filed for protection from its creditors in December of 1999,
causing swings in the company's narrow elastic shipments.
The gross profit margin of Worldtex decreased to 15.9% in the
fiscal 1999 from 17.8% a year ago missing Moody's 1999
expectations. By the same token, normalized EBIT and EBITDA
margins both decreased by approximately one percentage point to
6.7% and 12.2%, respectively, in 1999 causing deterioration in
interest protection measures. As such, EBIT-based interest
coverage for the fiscal 1999 was 0.96 times, a decrease from 1.06
times a year ago, and EBITDA-based interest coverage decreased to
1.74 times in fiscal 1999 from 1.82 times a year ago. Increased
borrowings under the revolver, along with decreased profitability
resulted in higher leverage as measured by total debt-to-EBITDA
of approximately 6.2 times in fiscal 1999, up from approximately
6.0 times a year ago.
Going forward, Moody's remains concerned with Worldtex's ability
to meaningfully grow its earnings. The company's domestic covered
elastic yarn business has been deteriorating, and Europe's
stretch fabrics sales have not outpaced the decline. Demand for
the higher margin narrow elastics has slowed in part due to lower
purchase levels by some of the company's intimate apparel
clients.
The B2 rating on the company's $25 million secured and guaranteed
revolving credit facility due 2003, reflects the benefits of a
borrowing base formula of 85% of domestic receivables and 50% of
domestic inventories, as well as security, evidenced by a pledge
of the capital stock of each domestic subsidiary and 65% of the
stock of foreign subsidiaries. The facility is guaranteed by all
of the domestic operating subsidiaries. Under the credit
agreement, foreign subsidiaries may borrow up to $22.4 million on
a secured basis under other credit facilities at the operating
level. As December 31, 1999, due to the operating issues,
Worldtex had a very tight liquidity, only $5 to $8 million
available under its credit agreement.
The Caa1 rating on the $175 million issue of 9.625% senior
unsecured notes due 2007, reflects the effective and structural
subordination of the notes to the secured bank facility as well
as to the senior debt of the subsidiaries, which totaled $8.2
million as of December 1999. The notes are guaranteed by the
domestic subsidiaries.
Worldtex, Inc., based in Hickory, North Carolina, is a leading
manufacturer of covered elastic yarns and narrow elastic fabrics
for use in apparel. Its operating subsidiaries include Regal
Manufacturing, Inc., in Hickory, NC; Elastex Inc., in Asheboro,
NC; Filix Lastex, S.A., in Troyes, France; Rubico, Inc., in
Montreal, Quebec, Canada; Fibrexa, Ltda., in Bogota, Colombia; as
well as Elastic Corporation of America, Inc., the narrow elastic
division, in Columbiana, AL.
Meetings, Conferences and Seminars
----------------------------------
April 27-30, 2000
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
J.W. Marriott, Washington, D.C.
Contact: 1-703-739-0800
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
May 15, 2000
AMERICAN BANKRUPTCY INSTITUTE
2nd Annual New York City Bankruptcy Conference
Association of the Bar of the City of New York,
New York, New York
Contact: 1-703-739-0800
May 26-29, 2000
COMMERCIAL LAW LEAGUE OF AMERICA
52nd Annual Meeting of the New England Region
Colony Hotel, Kinnebunkport, Maine
Contact: 1-617-742-1500 or richard@landayleblang.com
June 8-11, 2000
AMERICAN BANKRUPTCY INSTITUTE
7th Annual Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, Michigan
Contact: 1-703-739-0800
June 14-17, 2000
ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
16th Annual Bankruptcy & Restructuring Conference
Swissotel, Chicago, Illinois
Contact: 1-541-858-1665 or aira@ccountry.net
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
July 13-16, 2000
AMERICAN BANKRUPTCY INSTITUTE
7th Annual Northeast Bankruptcy Conference
Doubletree Hotel, Newport, Rhode Island
Contact: 1-703-739-0800
July 21-24, 2000
National Association of Chapter 13 Trustees
Annual Seminar
Adams Mark Hotel, St. Louis, Missouri
Contact: 1-800-445-8629 or info@nactt.com
August 3-5, 2000
ALI-ABA
Fundamentals of Bankruptcy Law
Seaport Hotel and Conference Center,
Boston, Massachusetts
Contact: 1-800-CLE-NEWS
August 9-12, 2000
AMERICAN BANKRUPTCY INSTITUTE
5th Annual Southeast Bankruptcy Workshop
Hyatt Regency, Hilton Head Island, South Carolina
Contact: 1-703-739-0800
August 14-15, 2000
TURNAROUND MANAGEMENT ASSOCIATION
Advanced Education Workshop
Loews 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 15-16, 2000
AMERICAN BANKRUPTCY INSTITUTE
Views From the Bench 2000
Georgetown University Law Center, Washington, D.C.
Contact: 1-703-739-0800
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
September 21-23, 2000
AMERICAN BANKRUPTCY INSTITUTE
Litigation Skills Symposium
Emory University School of Law, Atlanta, Georgia
Contact: 1-703-739-0800
September 21-24, 2000
AMERICAN BANKRUPTCY INSTITUTE
8th Annual Southwest Bankruptcy Conference
The Four Seasons, Las Vegas, Nevada
Contact: 1-703-739-0800
November 2-6, 2000
TURNAROUND MANAGEMENT ASSOCIATION
Annual Conference
Hyatt Regency, Baltimore, Maryland
Contact: 312-822-9700 or info@turnaround.org
November 27-28, 2000
RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC.
Third Annual Conference on Distressed Investing
The Plaza Hotel, New York, New York
Contact: 1-903-592-5169 or ram@ballistic.com
November 30-December 2, 2000
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Camelback Inn, Scottsdale, Arizona
Contact: 1-703-739-0800
The Meetings, Conferences and Seminars column appears
in the TCR each Tuesday. Submissions via e-mail to
conferences@bankrupt.com are encouraged.
*********
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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