/raid1/www/Hosts/bankrupt/TCR_Public/000523.MBX
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, May 23, 2000, Vol. 4, No. 101
Headlines
ACCESSAIR: Ruan Inc. Invests $13 Million
ADVOCAT INC: Reports First Quarter Earnings
AGIS INC: Telia Internet, Inc. Closes Acquisition
AHERF: Trustee Says Fees Have Been Paid
AMERICAN HOMEPATIENT: Reports First Quarter Loss
ARC INTERNATIONAL: Reports First Quarter Results
AUTOTOTE CORP.: Moody's Places Ratings Under Review
BOO.COM: Waiting To Hear From Potential Buyers
BREED TECHNOLOGIES: Evaluation of Exit Strategies In Final Stages
CHARTER BEHAVIORAL: Agreements To Sell Facilities
CONSECO INC: To Increase Provision For Loans
CRAFTSHOP.COM: Plans To File For Bankruptcy
CRIIMI MAE: Reports First Quarter Results
DAY RUNNER: Chief Executive Officer Resigns
DEVLIEG-BULLARD: Buyout Fund Agrees to Purchase Remaining Assets
GENESIS HEALTH: Extension of Forbearance Period
GENEVA STEEL: Still Considering Bankruptcy
GEOTEK COMMUNICATIONS: FCC Seeks Input On License Transfer
GST TELECOMMUNICATIONS: Completes Assumption of Sr Secured Notes
GST TELECOMMUNICATIONS: Time Warner Faces Competitive Bid
INNOVATIVE CLINICAL SOLUTIONS: Announces Bond Restructuring
KEY PLASTICS: Tries To Lock Up A Buyer
MICROAGE: Creditors Attempt To Block Financing Package
MICROAGE: To be Delisted From Nasdaq National Market
MIDPAC LUMBER/MAUI HOME: Problems Impedes Bankruptcy Proceedings
MOSSIMO INC: To Close Stores And Lay Off Employees
MOUNT AIRY: Purchased By Largest Creditor
MULTICARE COMPANIES: Extension of Forbearance Period
NATIONAL HEALTHCARE: Reports First Quarter Earnings
NIAGARA MOHAWK: Second Annual Shareholders Meeting
OPTIMARK: Might Run Out of Cash by September
PRECISION AUTO: Announces 3rd Quarter Results
PRISON REALTY: Reports First Quarter Losses
READING CO.: To Officially Close Doors
SAFETY-KLEEN: Will Not Make Interest Payment
SILVER CINEMAS: 17 Locations Closed
SMITH CORONA: Names New CEO
SORG PAPER: Paper Mill To Close
STONE & WEBSTER: Berman, DeValerio Announce Class Action Lawsuit
SUPERIOR NATIONAL: Seeks Approval of Employee Retention Plan
TOTAL RENAL: Auditors Expresses Doubt
UNITED TIRE: Folds Amid Varied Hardships
VERSATECH GROUP: Gets Creditor Protection
VISIONAMERICA: To Sell Care Centers
VISION TWENTY-ONE: Company As a Growing Concern
WAXMAN: Seeks Sale To Pay Down Debt
Meetings, Conferences and Seminars
*********
ACCESSAIR: Ruan Inc. Invests $13 Million
----------------------------------------
Des Moines-based Ruan Inc. plans to provide the $13 million
AccessAir needs to resume passenger airline service.
A reorganization plan filed Friday in U.S. Bankruptcy Court in
Des Moines says the company would provide all the investment the
start-up airline needs to resume commercial service.
Indianapolis-based American Trans Air helped with the
reorganization plan.
If the plan is approved by a judge, AccessAir would carry service
from Des Moines to Chicago, Los Angeles, Las Vegas and Orlando,
Fla.
Julie Evans, an AccessAir spokeswoman, said the plan involved a
"working relationship" with ATA, a 26-year-old charter airline
that flies to more than 400 destinations worldwide. "We're
shooting for July 1 to be back in the air, but I'd be surprised,
with FAA approval, if we'll make it before July 15th," she said.
Friday's filing deadline was set last month by Judge Russell
Hill. At a bankruptcy court hearing scheduled for June 1, Hill
could either approve the plan or require the airline to sell its
assets and go out of business. Liquidating the company would
generate $3.2 million, court papers said.
AccessAir, plagued by low ridership during its 10 months of
operation, suspended regular passenger flights and filed for
protection from creditors under Chapter 11 of the U.S. Bankruptcy
Code on Nov. 29, 1999.
The reorganization plan was filed days after the airline asked
the court to increase its loan limit to $4 million. A judge
previously authorized the airline to borrow up to $1.6 million
from Ruan Inc., which has made loans or investments to the
airline in recent months.
Evans said AccessAir continues to court other investors,
including some of the corporations that were original
stakeholders.
The family-owned Ruan companies have operations in trucking,
banking, real estate and other businesses. John Ruan III, who has
been leading efforts to save the airline, would serve as the
airline's new chairman.
Evans said the Ruan family is committed to saving AccessAir
because members believe the Des Moines area and the state need
the airline to help lower air fares and promote economic
development. AccessAir's court papers said the airline estimates
its 1999 losses at $30 million. The reorganization plan said a
management company would provide aircraft maintenance, ground
handling and other services. The company also plans to outsource
accounting and reservations work, the papers said. AccessAir had
operated a reservations center in Moline, Ill.
AccessAir had until Friday to submit a business and financial
plan that would enable the airline to resume operations and begin
paying off its $11.2 million debt, which includes loans from
state and local governments.
Assistant U.S. Trustee Jim Snyder has asked that AccessAir be
forced to liquidate its assets.
"So far I've seen nothing to change my mind," he said.
ADVOCAT INC: Reports First Quarter Earnings
--------------------------------------------
The Tennessean reports on May 16, 2000 that Franklin-based
Advocat Inc., a nursing home operator in the midst of
restructuring its debt, reported first-quarter earnings of
$ 85,000 vs. a loss of $983,000 in the year-ago period. Net
earnings per share were 2 cents vs. a net loss of 18 cents a
share in the year-ago quarter. Revenues were $ 47.3 million vs. $
46.7 million in the year-ago period. Shares of Advocat fell 10
cents yesterday to close at 20 cents.
AGIS INC: Telia Internet, Inc. Closes Acquisition
-------------------------------------------------
Telia Internet Inc., a wholly owned subsidiary of Telia North
America, Inc., announced that at 1:30 p.m., Friday, May 19, 2000,
it formally closed the purchase of substantially all operating
assets of Apex Global Information Services, Inc. (AGIS), pursuant
to a U.S. bankruptcy court order in Detroit, Michigan, entered on
April 25, 2000.
Telia North America (TNA), headquartered in Northern Virginia, is
a wholly owned subsidiary of Telia AB, Stockholm, Sweden. TNA
entered the U.S. market in 1998 as a wholesale provider of both
telecom and IP services.
AHERF: Trustee Says Fees Have Been Paid
---------------------------------------
William J. Scharffenberger, the trustee in the bankruptcy case
filing of Allegheny Health, Education and Research Foundation
reported that lawyers, accountants and others working on the case
have been paid $34 million and are owed another $11 million.
Deloitte & Touche, the accounting firm handling the foundation's
functions, has been paid $6.5 million.
Professional fee of $100 million has been set aside for lawyer
Mark Freedlander, a Pittsburgh attorney working on the case.
Trustee Scharffenberger and his assistant Fred Chbosky are paid
$10,000 per month and $285 per hour respectively.
According to Freedlander, some of the money for fees comes from
the sale of eight Philadelphia-area hospitals and a $25 million
settlement in which West Penn Hospital took over Allegheny
General and three other hospitals, The AP added.
AMERICAN HOMEPATIENT: Reports First Quarter Loss
------------------------------------------------
The Tennessean reports on May 16, 2000 that American HomePatient
Inc. reported a first-quarter net loss of $ 8.6 million compared
with a $ 5.6 million loss for the same quarter last year.
Per share, results were a loss of 55 cents, compared with a loss
of 37 cents for the first quarter of 1999. Company officials
attributed the decline to a drop in rental revenues as American
HomePatient exited certain managed-care contracts perceived to be
unprofitable. Bad debt expense also increased due to problems at
four of the company's billing centers.
ARC INTERNATIONAL: Reports First Quarter Results
------------------------------------------------
ARC International Corporation (AMEX:ATV) reported operating
results for the first quarter ended March 31, 2000. Consolidated
net sales (all figures reported in U.S.Dollars) for the first
quarter were $14,573,748, up 17% from the $12,425,005 reported
for the 1999 first quarter. The Company's revenues benefited from
a 57% increase in sales from its interest in Cabletel
Communications (AMEX:TTV) and a 10% gain in sales from its Sports
and Leisure segment. Sports and Leisure reflect the maturing of
operations at the Company's Rockville, MD ice rink as well as
gains from ice rink locations in Chesapeake, VA and East Lansing,
MI.
The Company's first quarter net loss of $4,304,269, or $0.25 per
share, reflects an increase in interest expense from higher
borrowings related to the Company's ice skate rink expansion
program and various interest penalties on loans. ARC noted that
its Sports Supply operation (IcePro) has been discontinued
as of May 5, 2000 as a result of revenue decline and significant
cash flow and liquidity problems.
As previously announced, the Company continues to experience a
severe liquidity problem and has inadequate working capital to
meet its cash requirements. The Company has been in discussions
with its lenders regarding these issues. In order to meet its
liquidity needs and fulfill its other obligations, the Company
continues to explore a number of options including, without
limitation, (i) raising additional financing through the issuance
of debt or securities, and (ii) selling certain assets of the
Company. There can be no assurances that the Company will be
successful in raising any additional funds, or that it will be
able to timely raise additional funds in order to meet its
current liquidity needs. If the Company is unable to raise
additional funds to meet its liquidity needs, or if creditors
pursue remedies before additional funds can be raised, the
Company will be required to consider alternative course of action
including, without limitation, seeking to reorganize by filing of
a voluntary petition seeking protection under the bankruptcy
laws.
ARC International Corp. is a developer and operator of, and
equipment supplier to, ice skating facilities in North America.
ARC also has significant equity holdings in Cabletel
Communications Corp., Canada's leading supplier of broadband
equipment, and Ballantyne of Omaha (NYSE: BTN), America's leading
manufacturer of motion picture projection and specialty
entertainment lighting equipment. Additional corporate
information is available at the Company's web site-
http://www.arc-atv.com.
AUTOTOTE CORP.: Moody's Places Ratings Under Review
---------------------------------------------------
Moody's Investors Service placed the ratings of Autotote
Corporation under review for possible upgrade. The ratings under
review include Autotote's B2 on the $110 million of senior notes,
due 2004, B1 on the $25 million senior secured credit facility,
and a Caa1 on the $35 million convertible subordinated
debentures, due 2001. In addition, ratings under review include
Autotote's B2 senior implied rating and its B3 senior unsecured
issuer rating.
Autotote announced that it has signed a definitive agreement to
acquire Scientific Games Holding Corp. (not rated by Moody's) for
$310 million in cash. The company also announced that Olivetti
Group has issued a commitment letter for $100 million in
preferred stock, and has an additional commitment for $10 million
in preferred stock from other investors, both of which will be
convertible into Autotote shares.
The combination of Autotote and Scientific Games will more than
double Autotote's current revenue and EBITDA base, and result in
more diverse product offerings. However, debt following the
closing of the transaction will more than double, based on our
preliminary expectations of the company's potential capital
structure.
Moody's review will focus on potential operating and cost
synergies following the acquisition, the legal and capital
structure, and the growth and capital spending plans of the new
entity.
Absent material acquisition synergies, it is possible that the
ratings could be confirmed at current levels based on our
preliminary expectations for thin coverage of interest expense
and low retained cash flows, offset by $110 million in preferred
stock.
Scientific Games provides a full range of lottery products,
integrated systems and support services to lotteries in more than
60 nations and 26 US states plus the District of Columbia, as
well as various commercial businesses around the globe. Currently
there are 38 US lotteries, including the District of Columbia.
The company has production or operating facilities in Georgia,
California and the United Kingdom, France, Germany, and Austria.
Autotote Corporation provides computerized wagering equipment,
computer software, management and satellite broadcast services
for on-track, off-track and inter-track wagering, lotteries and
legalized sports betting facilities. Autotote's systems are in
use in the United States, Europe, Canada, Mexico, Latin America,
New Zealand and the Far East.
BOO.COM: Waiting To Hear From Potential Buyers
----------------------------------------------
The Wall Street Journal reports on Monday, May 22, 2000,
that online sportswear retailer Boo.com will find out as early as
today whether a rescuer will emerge, liquidators KPMG said.
KPMG was appointed the liquidator for Boo.com late last week when
the firm became Europe's first big dot-com failure due to lack of
funds, just six months after its launch.
KPMG said several of the 42 prospective buyers initially
interested had paid refundable deposits of roughly $1.5 million
for a place on the list of serious contenders. A group of 30 Boo
staff are assisting KPMG in negotiations, which included product
demonstrations.
The business faces closure by Wednesday if it is unable to strike
a deal, a KPMG spokesman added.
Much of Boo's trouble was blamed on its marketing and advertising
spending, which consumed a large portion of the $135 million it
had raised from investors.
BREED TECHNOLOGIES: Evaluation of Exit Strategies In Final Stages
-----------------------------------------------------------------
According to a report in Plastics News on May 15, 2000, Breed
Technologies Inc. of Lakeland, Fla., announced May 10 its special
evaluation committee of the Board of Trustees is in the final
stages of "evaluating exit strategies" for the company.
Those include the potential sale of all of Breed's North American
operations, some of its divisions or a refinancing strategy that
would allow it to emerge in some form.
Current Chairwoman Johnnie Cordell Breed and her potential
partner, Ernie Green, have launched a bid to buy the business and
make it the largest U.S. minority automotive supplier, said
analyst Scott D. Upham, president of Ann Arbor, Mich.-based
Providata Automotive.
Other established automotive suppliers have submitted bids for
parts of Breed's holdings, Upham noted, including Delphi
Automotive Systems of Troy, Mich., and Autoliv Inc., the
Stockholm, Sweden-based worldwide maker of air bags, seat belts,
steering wheels, inflators and sensors.
In September 1999, Breed's domestic businesses entered Chapter 11
voluntarily, listing total debt of $1.6 billion.
CHARTER BEHAVIORAL: Agreements To Sell Facilities
-------------------------------------------------
Crescent Real Estate Equities Company (NYSE: CEI) announced that
agreements had been reached to sell a total of 23 of the 37
behavioral healthcare facilities leased to Charter Behavioral
Health Systems, LLC ("CBHS") for a total of approximately $110
million, subject to judicial approval in CBHS's bankruptcy
proceeding.
The agreements, which will be presented to the court for approval
on Thursday, May 25, 2000, are the product of negotiations
following the May 10, 2000 court hearing at which adequate bids
were received for only four facilities.
According to David M. Dean, Crescent's Senior Vice President --
Law and Administration, "We had expected that prospective buyers
would begin to bid seriously after the May 10 hearing, and we are
pleased to have achieved prices in line with our target prices on
these 23 facilities. The agreements have the consent of CBHS and
its secured creditors, but do not yet have the consent of its
unsecured creditors. If the agreements are approved at next
week's hearing, closing agreements will be subject to customary
conditions. If we are not successful in disposing of any
facilities within the CBHS bankruptcy proceeding, we intend to
seek to recover the facilities from CBHS and to market them
outside the bankruptcy proceeding."
CONSECO INC: To Increase Provision For Loans
--------------------------------------------
According to a report in The New York Times on May 16, 2000,
Conseco Inc. reported to the SEC that it would have to raise the
provision relating to guarantees on loans to certain officers and
directors by $65 million (after tax).
According to the article, the disclosure puts more pressure on
Conseco and its ability to pay its debts. Under new management,
Conseco has been trying to raise cash to finance the company's
debts most recently through the sale of $1.3 billion in loans of
its Conseco Finance Corporation unit, which it is trying to sell.
Conseco had already set aside a total of $42.3 million for $575.8
million in guarantees on loans that allowed 170 directors,
officers and crucial employees to purchase about 19 million
shares.
The company said it was negotiating with the banks to extend the
maturity date on about $150 million in loans due on May 31.
Another $425.8 million is due on Aug. 30, 2001.
Conseco said that as of March 31, the guaranteed bank loans
exceeded the value of the stock collateralizing the loans by
$358.5 million. Conseco said the increase in the provision was
required because its stock had declined further since March 31,
the date on which the current provisions are based.
The company said it had provided loans to participants for
interest payments on the bank loans totaling $54.9 million.
CRAFTSHOP.COM: Plans To File For Bankruptcy
---------------------------------------------
According to an article in The Boston Globe on May 16, 2000,
Craftshop.com, an online arts and crafts retailer backed by CMGI
Inc., plans to file for bankruptcy after floundering in a
competitive environment.
The filing would mark the first time one of CMGI's Internet
retail investments has taken the drastic step of making a
bankruptcy filing. CMGI's venture capital arm has a stake of
about 10 percent in Craftshop.com.
Craftshop.com also would be one of the first electronic retailers
to file for bankruptcy since investors began to tighten their
purse strings and abandon Internet stocks, industry observers
said.
But with their bankruptcy filing, Craftshop officials are
"admitting that there's not much hope for them to get out of the
hole," said Carrie Johnson, an analyst with Forrester Research in
Cambridge. "It means it's pretty much over."
The board of Craftshop.com, based in Norwalk, Conn., opted to
file for bankruptcy earlier this month, said Andy Thompson, a
board member and managing director of Primedia Inc., one of the
e-retailer's investors.
So far, the company has not decided whether to liquidate or
reorganize under bankruptcy protection, said Jillian K. Aylward,
a Boston attorney representing the company. Filing in either
Wilmington, Del., or Bridgeport, Conn., Craftshop.com will list
debts of between $1.1 million and $1.4 million.
CRIIMI MAE: Reports First Quarter Results
-----------------------------------------
CRIIMI MAE 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, reported results for the
quarter ended March 31, 2000.
CRIIMI MAE reported first quarter 2000 net income available to
common shareholders under generally accepted accounting
principles (GAAP) of approximately $4.0 million, or $0.07 per
basic share and $0.06 per diluted share, compared to
approximately $13.4 million, or $0.25 per basic share and $
0.23 per diluted share, for the same period in 1999.
GAAP results for the quarter ended March 31, 2000 included the
recognition of a $3.4 million impairment loss on a portion of the
Company's portfolio of commercial mortgage-backed securities
("CMBS") that it intends to sell as contemplated by the Company's
reorganization plan (the "CMBS Sale Portfolio"). Impairment of
$157 million on the CMBS Sale Portfolio was also recognized (as
to each CMBS, representing the difference between the cost and
fair value) as a charge to the income statement in the fourth
quarter of 1999. The additional $ 3.4 million impairment loss
recognized in the first quarter of 2000 reflects further declines
in the value of certain assets in the CMBS Sale Portfolio.
GAAP results for the first quarter of 2000 also included an
approximate $1.4 million realized loss resulting from the sale of
a portion of the CMBS Sale Portfolio.
First quarter 2000 net income reflects a decrease in unrealized
gain on warehouse obligation from $3.9 million in the first
quarter of 1999 to no gains in the first quarter of 2000. There
were no gains in the first quarter of 2000 principally because
all of the commercial loans originated under one of the warehouse
obligation facilities had been sold during 1999.
Consistent with the Company's plan of reorganization, on March
15, 2000, CRIIMI MAE elected for tax purposes to be classified as
a trader in securities effective January 1, 2000. Such trading
activity is, or is expected to be, in certain types of mortgage-
backed securities, including subordinated CMBS (the "Trading
Assets"). As a trader in securities, the Company will mark-to-
market its Trading Assets for the 2000 tax year and expects to do
so for future years.
The Company initially marked-to-market its Trading Assets on
January 1, 2000 and, as a result, recognized losses on those
Trading Assets of approximately $ 478 million (the "January 2000
Loss"). The January 2000 Loss is expected to be recognized evenly
over four years for tax purposes (i.e., approximately $120
million per year) beginning with the Year 2000. For the quarter
ended March 31, 2000, the estimated net operating loss for tax
purposes was approximately $14 million, or a loss of $0.22 per
weighted average share. This net operating loss includes one-
fourth (i.e., approximately $30 million) of this year's portion
of the January 2000 Loss. The tax basis net operating loss in the
first quarter of 2000 compares to tax basis income of
approximately $19.6 million, or $0.37 per weighted average share
for the first quarter of 1999.
Additionally, as a result of its trader election, the Company
will be required to mark-to-market its Trading Assets at the end
of each tax year and reflect those year-end adjustments as
unrealized ordinary gains and losses. In addition, CRIIMI MAE
expects to realize ordinary gains and losses during the
year on dispositions of its Trading Assets. So long as available,
net operating losses, including the allocable portion of the
January 2000 Loss, are expected to offset taxable income on an
annual basis. Readers should refer to the Company's Current
Report on Form 10-Q for the quarter ended March 31, 2000 for a
more complete discussion of the Company's trader election,
including related risks and the effect on taxable income (loss),
REIT distribution requirements and cash flows.
CRIIMI MAE's shareholders' equity increased to approximately $247
million ($ 2.92 per diluted share) at March 31, 2000, from
approximately $219 million ($ 2.75 per diluted share) at December
31, 1999. The increase in shareholders' equity during this period
primarily resulted from a net overall increase in the fair market
value of the Company's portfolio of CMBS and insured mortgage
securities, and net income under GAAP.
CRIIMI MAE and two of its affiliates filed their Third Amended
Joint Plan of Reorganization (the "Plan") and proposed Second
Amended Disclosure Statement (the "Disclosure Statement") with
the United States Bankruptcy Court on April 25, 2000. The Plan
was filed with the support of the Official Committee of
Equity Security Holders of CRIIMI MAE (the "Equity Committee"),
which is a co-proponent of the Plan. Subject to the completion of
mutually acceptable documentation regarding the treatment of
certain classes of claims, the Official Committee of Unsecured
Creditors of CRIIMI MAE (the "Unsecured Creditors' Committee")
has agreed to support confirmation of the Plan. Under the Plan,
Merrill Lynch and German American Capital Corporation, two of the
Company's largest secured creditors, would provide a significant
portion of the recapitalization financing contemplated by the
Plan.
During the April 25 hearing on approval of the Disclosure
Statement, Bankruptcy Judge Duncan W. Keir requested the filing
of additional legal briefs by May 9, 2000 on two issues raised at
the hearing. The issues raised relate to an objection to the
disclosure statement filed by Salomon Smith Barney Inc. and
Citicorp Real Estate, Inc. (together "SSB"). On May 9, 2000,
CRIIMI MAE filed its legal brief with the court, as did SSB. In
addition, the Equity Committee filed a brief in support of CRIIMI
MAE's position and the Unsecured Creditors' Committee filed two
briefs also in support of CRIIMI MAE's position. The SSB
objection is the only objection to CRIIMI MAE's Disclosure
Statement pending before the Bankruptcy Court. Once the
Disclosure Statement has been approved by the Bankruptcy Court,
the Plan, together with the Disclosure Statement and ballots,
will be sent to all impaired creditors and equity security
holders for acceptance or rejection.
Since filing for protection under Chapter 11 of the U.S.
Bankruptcy Code on October 5, 1998, CRIIMI MAE has suspended its
loan origination, loan securitization and CMBS acquisition
businesses. The Company continues to own a substantial portfolio
of subordinated CMBS and, through its servicing affiliate, acts
as a servicer for its own as well as third party securitizations.
DAY RUNNER: Chief Executive Officer Resigns
-------------------------------------------
The chief executive officer of the troubled datebook maker Day
Runner Inc. has stepped down after the company filed its
quarterly earnings report, which detailed continuing losses
and the possibility of its stock to be taken off from the Nasdaq
Stock Market and has hired Crossroads LLC to manage the company
and thereby naming principal John Ausura interim CEO while it is
still looking for new leadership.
DEVLIEG-BULLARD: Buyout Fund Agrees to Purchase Remaining Assets
----------------------------------------------------------------
According to a report in Crain's Cleveland Business on May 15,
2000, KPS Special Situations Fund L.P., a $210 million fund that
buys and restructures troubled manufacturing companies, has
offered to pay $32 million for DeVlieg-Bullard's remaining
machine tool plants in Twinsburg, Michigan, Illinois and
Pennsylvania.
Shawn Riley, a lawyer with McDonald, Hopkins, Burke & Haber Co.,
which is representing DeVlieg-Bullard, said the two companies
should sign a purchase agreement by this Friday, May 19. DeVlieg-
Bullard has been looking for a buyer since it filed for Chapter
11 bankruptcy protection from creditors last July.
GENESIS HEALTH: Extension of Forbearance Period
-----------------------------------------------
Genesis Health Ventures, Inc. (NYSE:GHV) announced that a
required majority of lenders under its Senior Credit Agreement
have agreed to extend the company's current forbearance period
through June 30, 2000 working with Merrill Lynch as its financial
advisor to revise the company's capital structure and the company
has agreed also to pay a substantial portion of current interest
payments due to senior bank lenders.
GENEVA STEEL: Still Considering Bankruptcy
------------------------------------------
Geneva Steel reported a $1.7 million net loss for the second
quarter, an improvement over last year's results, but perhaps not
enough to prevent a bankruptcy filing.
Although the company said net loss is a slight improvement on
last year's results, the company still plans to file for
bankruptcy citing that there is "no assurance market conditions
will continue to improve or that pricing and order volumes will
not decline."
However, the plan depends on whether the steel mill can secure
loan guarantees under the federal government's new Emergency
Steel Loan Guarantee Program.
GEOTEK COMMUNICATIONS: FCC Seeks Input On License Transfer
----------------------------------------------------------
The Federal Communications Commission is expected to seek public
input on the proposed transfer of 900 MHz dispatch radio licenses
in 14 major markets from Geotek Communications Inc.'s creditors
to Neoworld Inc., a start-up firm headed by the former president
of Nextel Communications Inc.
It is unclear whether the Geotek-Neoworld deal will face
opposition at the FCC.
Chadmoore Wireless Group Inc. and Southern Co., dispatch radio
firms that opposed Nextel's failed attempt to acquire all of
bankrupt Geotek's specialized mobile radio licenses, did not
indicate last week whether they will contest the transfer of
licenses to Neoworld. The permits currently are held by Geotek
secured creditors Hughes Electronics Corp. and Wilmington Trust
Co.
Mobex Communications Inc., which was outbid by Nextel for
Geotek's licenses in a private bankruptcy auction two years ago
and is arguably the harshest critic of Nextel, was unavailable
for comment.
After Neoworld and Geotek's secured creditors entered an asset
purchase agreement on March 24, there was grumbling in the SMR
industry over whether Neoworld-led by former Nextel executive
Brian McAuley and several ex-Motorola Inc. officials-was simply a
front for Nextel.
At one time, Nextel, the nation's top dispatch radio operator,
was in line to buy all 191 SMR licenses from bankrupt Geotek for
$150 million. But the Justice Department opposed the deal. Nextel
controls 3.1 million of the nation's 4.6 million SMR subscribers.
Nextel ultimately agreed to purchase only those 900 MHz licenses-
about 80 in all-outside of the 14 markets from which Nextel was
barred as part of a 1995 antitrust consent decree.
In exchange, U.S. District Judge Thomas Hogan last December
approved a Nextel-Justice plan to terminate the 10-year consent
five years sooner, on Oct. 30, 2000. Given that, it was suggested
that Nextel does not need a front company. That is, if it was
truly interested in Geotek's SMR licenses, Nextel could buy them
in five months.
"This is a substantial transfer of control," said an FCC
official.
Neoworld is based in Bloomfield, N.J., where Nextel was launched
by McAuley and Nextel Vice Chairman Morgan O'Brien in 1987.
Nextel did not return a call for comment on whether it has had
business discussions with Neoworld.
Neoworld has raised $150 million in private equity and is working
to arrange a $100 million credit line to pay for the wireless
licenses and roll out new digital dispatch radio services.
Neoworld did not disclose how much it paid for Geotek's licenses.
Of the $150 million Nextel offered to pay for all of Geotek's
wireless permits, $131 million accounted for the 14-market
licenses that Neoworld is buying from Geotek's creditors.
It is not clear whether the Geotek-Neoworld transaction will need
Justice Department approval.
McAuley said Neoworld has received positive feedback from SMR
dealers around the country. He said the technology decision will
be made in the next month or two.
Holding major ownership stakes in Neoworld are Madison Dearborn
Partners (21 percent), First Union Capital Partners L.L.C. (13.6
percent), Goldman Sachs & Co. (13.6 percent) and various others
(51.8 percent, none of whom individually hold a 10-percent or
greater interest).
GST TELECOMMUNICATIONS: Completes Assumption of Sr Secured Notes
----------------------------------------------------------------
GST Telecommunications, Inc. (Nasdaq: GSTX), announced that its
wholly-owned subsidiary, GST USA, has completed its planned
assumption of the 13 1/4% Senior Secured Notes due 2007 issued by
GST Equipment Funding. This assumption was required by the
indenture governing the 13 1/4% Notes.
GST Telecommunications, Inc., an Integrated Communications
Provider (ICP) headquartered in Vancouver, Wash., provides a
broad range of integrated telecommunications products and
services including enhanced data and Internet services and
comprehensive voice services throughout the United States, with a
significant presence in California and the West. Facilities-based
GST continues to focus on its western regional strategy by
anchoring its next generation networks in local markets and
connecting them via long haul fiber networks. Visit GST's Web
site at www.gstcorp.com.
GST TELECOMMUNICATIONS: Time Warner Faces Competitive Bid
---------------------------------------------------------
The Hawaii assets of GST Telecommunications, Inc. (Nasdaq: GSTX)
could come under local ownership and control if plans by a Maui
company come through. MBN Communications, Inc., based in Maui,
entered an agreement on April 27, 2000, with GST
Telecommunications, Inc. to acquire its Hawaii subsidiaries, GST
Telecom Hawaii, Inc. and GST Hawaii OnLine (HOL) for $76 million
in cash, a price equal to the book value of GST's total Hawaii
assets.
GST Telecommunications, which filed for protection under Chapter
11 of the U.S. Bankruptcy Code on May 17, 2000, has signed a
letter of intent with Time Warner Telecom, Inc. (Nasdaq: TWTC)
for the sale of substantially all the assets of GST for $450
million, or less than 50 percent of GST's total asset value. GST
owes its creditors approximately $1.2 billion. A large
percentage of the creditors are represented by Houlihan Lokey
Howard & Zukin. If the creditors accept the Time Warner offer
and ignore MBN's offer, they would leave as much as $40 million
on the table for the Hawaii assets alone.
Time Warner Telecom intends to seek an expedited hearing from the
U.S. Bankruptcy Court, with a final ruling on June 23, 2000. MBN
is attempting to purchase the Hawaii subsidiaries, which include
GST Telecom Hawaii, a Competitive Local Exchange Carrier (CLEC);
GST Hawaii OnLine, the state's largest Internet service provider;
and an undersea fiber-optic network that connects the six major
Hawaiian Islands; for fair value, and intends to present its plan
directly to GST's largest creditors.
MBN Communications Group is a privately held Hawaii corporation
with headquarters in Premier Place, located in the Maui Research
and Technology Park.
INNOVATIVE CLINICAL SOLUTIONS: Announces Bond Restructuring
-----------------------------------------------------------
Innovative Clinical Solutions, Ltd. (OTC Bulletin Board: ICSL.OB)
announced that it intends to recapitalize the Company by
restructuring its $100 million 6.75% convertible debentures due
2003 into ICSL common equity. The Company will seek to convert
this debt through a voluntary prepackaged plan of reorganization
of ICSL and its subsidiaries under Chapter 11 of the Bankruptcy
Code. The Company has opted to implement the recapitalization
through a prepackaged plan, rather than through an exchange
offer, primarily because this process enables the Company to
convert all $100 million of debentures so long as the plan is
approved by (i) holders of at least two-thirds (2/3) of the
principal amount of the debentures that actually vote on the plan
and (ii) more than one-half (1/2) of the number of
debentureholders who actually vote on the plan. Holders of more
than 50% of the principal amount of the debentures have agreed in
writing to vote in favor of the prepackaged plan. The plan must
also be confirmed by a U.S. Bankruptcy Court.
As would be the case in an exchange offer, only the
debentureholders would be affected by the prepackaged plan. The
Company fully expects to continue operating its businesses in the
normal course both before and during the Chapter 11 process and
that it will be authorized to pay all other lenders, customers,
trade creditors and employees in full, without interruption.
"This is not, in any way, a traditional Chapter 11 filing,"
Michael Heffernan, President and CEO of ICSL, stated. "The
prepackaged plan has already received the approval of ICSL's
largest individual bondholders who own over 50% of the
outstanding debentures and we have nearly completed negotiating
the final documents. I am pleased to say that no other lenders,
trade creditors or employees should be affected by this filing,
and that it should have no impact whatsoever on our day-to-day
activities or on our ability to meet our customer needs or our
financial commitments. After a thorough evaluation of all
available strategic alternatives," Mr. Heffernan continued,
"ICSL's Board of Directors has concluded that this proposed
transaction is in the best interest of all of the Company's
constituencies, including its employees, stockholders, customers,
bondholders and other lenders." Mr. Heffernan added, "In all,
this proposed recapitalization will give us a significantly
improved, relatively debt-free balance sheet. It will provide us
with the financial flexibility required to complete our
restructuring and continue the implementation of our growth
plan."
Under the proposed recapitalization, ICSL would issue new common
equity to its debentureholders and existing stockholders.
Following the recapitalization, approximately 90% of ICSL's
common stock will belong to the Company's debentureholders, with
the remaining 10% being distributed to existing shareholders in
exchange for their existing shares, subject to dilution by
options the Company proposes to issue to executive management and
outside directors. The process is designed to convert all of the
debentures into ICSL common stock. At the present time, it is
not possible to determine the value of the stock to be issued to
ICSL's stockholders in the recapitalization.
The Company's existing common stock has been trading on the OTC
Bulletin Board under the symbol "ICSL.OB" since being delisted
from the NASDAQ National Market on December 8, 1999. The Company
hopes to relist the new common stock on the Nasdaq National
Market following the recapitalization.
In January 1999, the Company embarked on an aggressive
restructuring plan that included: 1) Commit to three core
businesses--ICSL Clinical Studies, ICSL Network Management and
ICSL Healthcare Research, 2) Divest all non-core businesses, 3)
Recruit a new management team, 4) Strengthen its financial
structure, and 5) Develop and implement an aggressive growth
plan. The Company has substantially completed the first 3 phases,
and the proposed recapitalization will allow the Company to focus
on its growth plans.
"Post-transaction, we will continue to focus on growing our three
core business units. We will explore additional partnership
opportunities with pharmaceutical companies such as our
agreements with Novartis, Pharmacia and Andrx. In addition, we
will look for consolidation opportunities in the clinical
research investigative site management industry where 'critical
mass' is required," stated Michael Heffernan. "We have also
shown that we can grow our Network Management division as
evidenced by our recently announced new contracts totaling
approximately $5 million in new annual revenue."
ICSL's financial advisor is Donaldson, Lufkin & Jenrette
Securities Corporation.
Innovative Clinical Solutions, Ltd., headquartered in Providence,
Rhode Island, provides services that support the needs of the
pharmaceutical and managed care industries.
KEY PLASTICS: Tries To Lock Up A Buyer
--------------------------------------
According to a report in Crain's Detroit Business on May 15,
2000, automotive plastics supplier Key Plastics L.L.C. says it is
gaining interest from prospective buyers as it works its way
through Chapter 11 bankruptcy reorganization.
The Novi-based company reported May 5 it has prepared a memo
"designated to attract potential investors for a sale or other
restructuring transaction," Plastics News reported.
The custom injection molder, which entered Chapter 11 voluntarily
in March with $353 million in debt, has had a "significant"
amount of interest from potential buyers, according to a
statement from CEO David Benoit.
MICROAGE: Creditors Attempt To Block Financing Package
------------------------------------------------------
According to an article in The Arizona Republic on May 19, 2000,
a group of creditors is trying to block a key financing package
lined up by the company, saying it provides little new money for
the struggling computer distributor and gives the lenders too
much priority and control in the company's bankruptcy
reorganization.
The Official Joint Committee of Unsecured Creditors, is asking a
Bankruptcy Court judge to deny a $225 million financing package
from Citibank and related $27 million credit facility from IBM.
MicroAge announced the financing arrangements on April 13 when it
filed for bankruptcy protection in Phoenix. It said the money
will help fund its operations while it reorganizes its finances.
A judge gave preliminary approval to the package the day after
the filing, but the final hearing on the matter is scheduled for
May 22, 2000. The creditors' committee says it has been
negotiating with MicroAge to resolve its concerns, but wanted to
get on record with its objections in case the negotiations fail.
Specifically, the filing says, the committee objects to the
financing package because:
*A large chunk of the money - about $183 million - will
effectively be handed back to Citibank and IBM to cover pre-
bankruptcy debts. Other creditors have to wait in line.
MicroAge's own analysis shows that it will receive about $10
million in new borrowings.
*The fees to Citibank and IBM are too high. Citibank stands to
collect $3.8 million, or 1.7 percent of the financing package and
a collateral fee of $250,000. IBM is charging a fee of $825,000.
MICROAGE: To be Delisted From Nasdaq National Market
----------------------------------------------------
MicroAge, Inc. confirmed that Nasdaq has notified the Company
that the Nasdaq National Market will delist the Company's common
stock at the opening of business on May 22, 2000.
MicroAge and certain subsidiaries filed voluntary Chapter 11
petitions for reorganization in the U.S. Bankruptcy Court for the
District of Arizona in Phoenix on April 13, 2000.
Nasdaq told the Company that it took this action because the
Company no longer met the criteria for continued listing on the
exchange as a consequence of the Company's voluntary Chapter 11
filing. In spite of the action by Nasdaq, the Company intends to
remain current with respect to its reporting obligations
under the Securities Exchange Act of 1934. MicroAge, Inc., a
Fortune 500 company, provides B2B technology solutions and
infrastructure services. The Company is composed of information
technology businesses, delivering ISO 9001-certified, multi-
vendor integration services and 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 suppliers, backed by a suite of technical, financial,
logistics and account management services. More information about
MicroAge is available at www.microage.com.
MIDPAC LUMBER/MAUI HOME: Problems Impedes Bankruptcy Proceedings
----------------------------------------------------------------
Trustees in the bankruptcy cases of MidPac Lumber Co. Ltd. and
Maui Home Supply have run into a problem saying, they have only
been able to recover only scant information about the companies'
assets and liabilities since creditors forced them into Chapter 7
bankruptcy in January. Both companies were headed by California
businessman Kurt Glassman.
The trustees have been granted a second extension by U.S.
Bankruptcy Court to file schedules of assets and liabilities.
The new deadline is June 2.
MOSSIMO INC: To Close Stores And Lay Off Employees
--------------------------------------------------
According to a report in the Los Angeles Times on May 16, 2000,
Mossimo Inc. said that it will shut down its boutique at South
Coast Plaza in Costa Mesa having a dozen employees, and an outlet
store at the Ontario Mills shopping center in Ontario and will
lay off 90% of its
employees. The company also said its line of credit will dry up
by next month so it is renegotiating its credit line and is
seeking additional financing,
MOUNT AIRY: Purchased By Largest Creditor
------------------------------------------
Mount Airy Lodge, one of the largest and best-known Pocono
resorts, was purchased by its largest creditor at a sheriff's
sale Thursday, creating a windfall of back taxes for Monroe
County governments.
With all its assets sold, from hotel towels to the liquor
license, Mount Airy's hundreds of small creditors and the
shareholders of privately held corporations are likely to receive
nothing from the resort's bankruptcy case.
Pocono Associates, the lender that foreclosed, made the only bid,
at $ 27 million including costs. Mount Airy owes Pocono
Associates more than $ 32 million, so the company primarily will
be paying itself.
About $ 3 million will go to Monroe County, Paradise Township and
the Pocono Mountain School District for costs, fees and owed
property taxes.
Lawyers for Pocono Associates refused to comment on plans for
Mount Airy and two affiliated resorts in Paradise Township.
MULTICARE COMPANIES: Extension of Forbearance Period
----------------------------------------------------
The Multicare Companies, Inc. announced today that a required
majority of lenders under its Senior Credit Agreement has decided
to extend the company's current forbearance period through June
30, 2000 while working with Donaldson, Lufkin & Jenrette and
certain senior lenders to revise the company's capital structure
without making scheduled interest and principal payments to
senior lenders during the forbearance period, in a report in
Business Wire on May 16.
NATIONAL HEALTHCARE: Reports First Quarter Earnings
---------------------------------------------------
National HealthCare Corporation (AMEX: NHC), a long-term health
care company, announced first quarter earnings for the period
ended March 31 of 2,379,000 or 21 cents per share compared to
$2,237,000 or 20 cents per share for the same period last year.
Revenues for the quarter were $115,401,000 compared to
$107,929,000 for the same period a year earlier.
NHC is currently in default on certain financial covenants on a
loan it guarantees. NHC is negotiating with the lender to waive
the default but the negotiations are not complete. Accordingly,
NHC is unable to finalize the classification of its debt and
complete other portions of its financial statements and Form 10-Q
until the negotiations are complete.
Highlights of the quarter include adding a total of 24 long-term
health care beds to two existing centers and signing a management
contract for four centers in Seattle, Wash. area with a total of
442 beds.
NHC currently provides services to 106 long-term health care
centers with 13,977 beds. NHC also operates 34 homecare programs,
six independent living centers and assisted living centers at 17
locations. NHC's other services include managed care specialty
medical units, Alzheimer's units and a rehabilitation services
company.
NIAGARA MOHAWK: Second Annual Shareholders Meeting
--------------------------------------------------
Niagara Mohawk Holdings Inc. (NYSE: NMK) continues to make
progress on improving its financial stability as it marks the
50th anniversary of its regulated electricity and natural gas
delivery company, Niagara Mohawk Power Corp.
"The theme of responding to and leading change echoes through our
company's history. And so we enter our second half-century with a
renewed commitment to our shareholders, our customers and the
communities we serve," said company Chairman and CEO William E.
Davis. Davis made his remarks today at Niagara Mohawk Holdings'
annual meeting of shareholders.
"Niagara Mohawk is on the right course. I strongly believe our
strategy of reducing debt and buying back common stock will build
equity value for our shareholders," Davis said.
Over the last year, Niagara Mohawk Holdings has retired more than
$1.1 billion in debt which reduced annual interest costs by about
$85 million. In addition, the company has repurchased 15 million
shares of common stock. An additional 5 million shares were
bought by an intermediary on behalf of the company and can be
repurchased by September. In March, the company's board of
directors doubled to 40 million the number of shares the company
is authorized to repurchase by the end of 2002.
OPTIMARK: Might Run Out of Cash by September
--------------------------------------------
According to a report in Securities Industry News on May 15,
2000, Optimark Technologies had record losses of more than $135
million in 1999 due in part to low trading volumes. The firm's
continuing negative cash flows could cause it to run out of cash
by this September, said its independent auditor, Deloitte &
Touche.
According to the auditor's report filed with Optimark's Form 10
registration statement earlier this month at the Securities and
Exchange Commission, "The company's recurring losses from
operations raise substantial doubt about its ability to continue
as a going concern."
Elsewhere in the SEC filing, Optimark said, "While our financial
statements have been prepared assuming we will continue to
operate as a going concern, there is substantial doubt as to our
ability to do so." Though Optimark is not a public company, it is
required to file a registration statement with the SEC-and annual
and quarterly reports hereafter-because it now has more than 500
shareholders.
Optimark's ability to continue in business has been sustained by
$236 million raised in four private placements over the past
several years from major investors General Atlantic Partners, a
major venture capital firm; Japan's Softbank; Dow Jones; and a
number of major Wall Street firms. Among those holding stakes in
the fledgling trading system are PaineWebber, Merrill Lynch,
Goldman Sachs, American Century, Nasdaq, Credit Suisse,
BankBoston and founder William Lupien.
In 1999, the company generated about $3 million in revenue
compared with roughly $141 million in expenses. Losses in excess
of $135 million last year followed operational losses of $57.2
million in 1998, $20.4 million in 1997 and $7.2 million in 1996-
for an aggregate of $229.3 million since its founding in 1994.
For the first five trading days of May, total average daily
volume on Optimark was 104,760 (with a margin of error of 3
percent). This compares with average daily volumes of 165,000 in
April, 206,800 in March, 294,825 in February and 243,5000 in
January.
Concerning its operations, the firm said it currently pays IBM
$1.1 million a month for maintenance services for IBM software,
under an agreement in which IBM performs and manages certain
information systems activities and responsibilities in connection
with the computer system for the PCX. Optimark also pays IXnet
$770,000 a month for network services and customer support in
connection with the trading system.
The filing reveals that Phillip Riese, who joined Optimark as CEO
in November 1998, received a $1 million signing bonus, and earns
$425,000 in salary. He also received an additional $1 million
bonus upon completion of his first year as CEO.
PRECISION AUTO: Announces 3rd Quarter Results
---------------------------------------------
Precision Auto Care, Inc. (Nasdaq: PACI) today announced a loss
of $1.3 million or $(0.21) per share for the fiscal quarter
ending March 31, 2000, compared with a loss of $5.6 million or
$(0.92) per share for the comparable prior year quarter. For the
nine month period ending March 31, 2000, the Company reported a
loss of $4.2 million or $(0.69) per share, compared with a loss
of $10.9 million or $(1.79) per share for the prior year period.
Charles L. Dunlap, President and CEO, stated "the improvement in
the net loss versus the prior year period is due to a decrease in
operating expenses and the sale of non-performing assets. The
Company is continuing its efforts to improve operating margins
and to dispose of non-strategic assets."
The Company also reported that it is not currently in compliance
with certain financial covenants with regard to its bank credit
agreement. The bank has agreed to provide the Company with a
waiver concerning such non-compliance in return for certain
changes to the bank credit agreement. While documentation has not
yet been finalized, the changes agreed to include reducing the
line of credit by $30,000 per week for eight weeks and increasing
the interest rate for all existing and future advances by 1%.
PRISON REALTY: Reports First Quarter Losses
-------------------------------------------
Prison Realty Trust yesterday reported a first-quarter net loss
of $ 30 million, compared with a net loss of $ 24.8 million a
year ago. Per share, the struggling Nashville-based owner of
prisons lost 25 cents vs. 23 cents for the 1999 first quarter.
Funds from operations, a traditional measure of performance for
real estate investment trusts such as Prison Realty, were
negative $ 13 million or minus 11 cents a share for the quarter.
Those results came because the company set aside $ 71.2 million
to cover lease payments it wouldn't be able to collect from
sister company Corrections Corporation of America in the event of
a corporate restructuring, the company said.
READING CO.: To Officially Close Doors
--------------------------------------
Reading Company, which has a net worth of $130 million, is
officially closing its doors in Philadelphia this summer.
California lawyer James Cotter, who gained control of Reading
about a decade ago, has sold Reading's lingering railroad
property and other assets and reinvested the proceeds in a cinema
and live-theater business.
The company, which heads west to Los Angeles, is taking no
employees from the Philadelphia Office. Severance packages will
be given to those former workers.
SAFETY-KLEEN: Will Not Make Interest Payment
--------------------------------------------
Safety-Kleen Corp. (NYSE: SK) announced last week that the
Company is prohibited from making an interest payment on the
Company's 9-1/4 percent Senior Notes due 2009. In accordance with
the terms of the agreement between the Company and its senior
bank lenders, described in the Company's press release dated
April 14, 2000, the Company will not make the interest payment of
$10.4 million due May 15, 2000.
SILVER CINEMAS: 17 Locations Closed
-----------------------------------
Silver Cinemas has closed 17 of its 49 non-Landmark locations and
laid off 160 workers. The move is an effort to keep Silver
afloat after two years of steep losses. Auditor Deloitte & Touche
has questioned the company's survival prospects amid an
unfavorable climate in the industry.
Of the shuttered sites, 15 are discount theaters. Silver has been
discount-oriented since launching in 1996, but that market has
been shrinking.
SMITH CORONA: Names New CEO
---------------------------
Smith Corona has named Martin D. Wilson, 40, as new chief
executive officer of Smith Corona, replacing John A. Bermingham
and ending Bermingham's two-year reign. Company officials did
not give a reason for Bermingham's departure.
Wilson retains the titles of president, chief financial officer
and treasurer, positions he's held since October 1998 and May
1999, respectively.
SORG PAPER: Paper Mill To Close
--------------------------------
Specialty paper maker Sorg Paper Co. will shut down after
operating since 1852. It had been failing in recent years to keep
up with increasing competition. Parent company Wausau-Mosinee
Paper Corp. announced in March that the Mansfield, Ohio, mill -
one of the nation's oldest - would close May 15 unless a buyer
was found. Wausau-Mosinee heard only from possible buyers of the
plant's equipment, said Mike McDonald, senior vice president of
administration at the company in Mosinee, Wis.
Management will continue trying to sell the mill. Fifteen to 20
employees will stay on for perhaps a few months to maintain the
plant. - (The Plain Dealer; May 13, 2000)
STONE & WEBSTER: Berman, DeValerio Announce Class Action Lawsuit
----------------------------------------------------------------
Stone & Webster, Inc. was charged with issuing a series of false
and misleading statements about the financial condition and
business prospects of the Company in a shareholder class action
filed by Berman, DeValerio & Pease LLP in the United States
District Court for the District of Massachusetts on May 8, 2000.
The case, which alleges violations of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, was filed on behalf of all
persons and entities who purchased the common stock of Stone &
Webster during the period of April 27, 1999 through and including
April 28, 2000 (the "Class Period") and who suffered losses on
their investments.
Named as defendants are Stone & Webster, H. Kerner Smith and
Thomas Langford. The case involves a manipulation of financial
statements in which, among other acts of deception, defendants
knowingly or recklessly overstated S&W's results of operations,
revenues, expenses, net worth and income for the fiscal year
1999.
SUPERIOR NATIONAL: Seeks Approval of Employee Retention Plan
-------------------------------------------------------------
Superior National Insurance Group, Inc. (SNTL or Superior
National) announced that Los Angeles Superior Court Judge Frances
Rothchild continued until June 1, 2000, the motion of the
California Insurance Commissioner, Chuck Quackenbush, seeking
approval of a retention bonus plan for Superior National's
employees. Superior National was not provided with the bonus
retention plan document until minutes before the start of today's
emergency hearing requested by Commissioner Quackenbush. Superior
National requested the Superior Court to defer a decision until
after a scheduled May 26, 2000, jurisdiction hearing in United
States Bankruptcy Court, and the Superior Court agreed to defer
its ruling until June 1, 2000.
Superior National requested the continuance because Superior
National and Commissioner Quackenbush are currently before the
United States Bankruptcy Court, which oversees Superior
National's reorganization, on issues relating to Commissioner
Quackenbush's jurisdiction to expropriate the assets, facilities,
and personnel, of Superior National and other unrelated
companies. The motion regarding Commissioner Quackenbush's
jurisdiction is scheduled to be heard on Friday, May 26, 2000.
The Bankruptcy Court's decision will help resolve whether
Superior National or Commissioner Quackenbush is authorized to
pay for the retention and continued work of Superior National's
employees.
Counsel for Superior National informed the Superior Court that
Superior National fully supported the concept of a retention
bonus plan and believes it may be appropriate to improve the
structure of such a plan for its employees. Mr. Iain Nasatir,
counsel for Superior National, stated before the Superior Court,
"Superior National Insurance Group, Inc. fully endorses the idea
of paying a retention bonus to its current employees. For certain
selected key employees Superior National Insurance Group endorses
a retention bonus even greater than that proposed by the
Conservator."
Robert Nagle, SNTL Senior Vice President and General Counsel,
stated, "Superior National management has been attempting to
negotiate with Commissioner Quackenbush for the past 80 days the
status of Superior National's employees, and the Commissioner has
refused to even discuss the issue with us. The Commissioner's
delay is unconscionable in light of Superior National's
willingness to cooperatively resolve this and other important
issues with the Commissioner without the necessity of emergency
court hearings. We can not understand why Commissioner
Quackenbush appears to be determined to address these and
numerous other outstanding issues solely by court action.
Superior National management asks its employees to be patient for
the next ten days, and we are confident that they will benefit
from this short delay."
Superior National Insurance Group, Inc. is the parent company of
SN Insurance Services, Inc., SN Insurance Administrators, Inc.,
workers' compensation insurance servicing organizations operating
throughout the United States. Superior National previously
announced that it sought Chapter 11 protection in a petition
filed on April 26, 2000, and on March 3, 2000 announced that the
California Department of Insurance seized the assets and
operations of Superior National's four California domiciled
insurance subsidiaries.
TOTAL RENAL: Auditors Expresses Doubt
--------------------------------------
Total Renal Care Inc., which warned in April that its auditors
had expressed doubt about its ability to continue as a going
concern, said yesterday it reduced its net debt by about $58
million during the quarter. Total Renal Care has a large Tacoma-
based operation. This report includes information from Bloomberg
News and The Associated Press. (Seattle Post-Intelligencer 5/12)
UNITED TIRE: Folds Amid Varied Hardships
----------------------------------------
According to a report in Rubber & Plastic News on May 15, 2000,
United Tire & Rubber Co. Ltd., is probably heading for a breakup
and end due to its receivership, bankruptcy and an alleged
double-deal.
United Tire's manufacturing machinery and equipment was sold
March 30 to Indiana, Pa.- based tire company Specialty Tires of
America Inc. But Specialty Tires had to file suit against Ernst &
Young in Ontario Superior Court of Justice on April 28 to take
ownership of the equipment after it discovered the receiver
allegedly was reneging on its deal, according to the vice
president of Specialty Tires parent Polymer Enterprises Inc.
Specialty Tires had sent trucks to pick up the equipment the week
of April 4, but was turned away at the plant by Ernst & Young
representatives, who said the company did not have a sales
agreement. A letter to Specialty from the receiver dated April 27
said Ernst & Young had a "committed transaction in process" for
the equipment in which Specialty Tires had shown interest.
VERSATECH GROUP: Gets Creditor Protection
-----------------------------------------
According to Crain Communications - Plastic News on May 15, auto
parts maker, Versatech Group Inc. (Toronto) announced May 5 that
it has obtained creditors' protection a few days after Canadian
Imperial Bank of Commerce demanded full payment for all debts and
liabilities it owed and the other related companies through the
province of Ontario's Companies' Creditors Arrangement Act from
the Ontario Superior Court of Justice.
Protection extends to the company and four of its subsidiaries:
plastics injection molder Tarxien Components Corp., Versatech
Canada Ltd., Versatech Sealing Systems Inc. and Apex Metals Inc.
Not protected are its Hi-Craft Engineering Inc. subsidiary, which
inserts molds thermoplastic parts and assemblies, and its 49
percent interest in Commonwealth Regal Industries Inc.
VISIONAMERICA: To Sell Care Centers
-------------------------------------
For three consecutive quarters last year, Memphis-based
VisionAmerica Inc. stated sales were climbing each quarter - and
for the first two quarters, the company was profitable.
But the company said Friday it lost $ 33 million and now plans to
sell most of its centers.
In a prepared statement, VisionAmerica announced significant
write-offs and losses for last year, and that it plans to begin
to divest itself of most of its eye care centers.
Officials at the company's headquarters in the First American
Bank Building at 5350 Poplar, Suite 900, could not be reached for
comment.
VISION TWENTY-ONE: Company As a Growing Concern
-----------------------------------------------
Financial problems at Vision Twenty-One Inc. are so severe that
its auditor now questions how long the eye-care company can
survive.
More setbacks - including recurring losses and missing certain
loan payments - "raise substantial doubt about the company's
ability to continue as a growing concern," says the Ernst & Young
accounting firm in its client's latest report to the Securities
and Exchange Commission.
The financial document, submitted May 5, highlights more bad news
for investors who have seen the Largo company's stock value
evaporate since Vision Twenty-One went public at $ 10 a share in
August 1997.
The stock closed Monday at 50 cents a share for the company that
develops eye laser and surgery centers and offers other eye-care
services.
It faces expulsion from the Nasdaq National Market System for
filing SEC statements late and for not meeting unspecified
listing requirements. The company will talk to Nasdaq officials
May 25, but it said that "based upon current circumstances it is
unlikely it will meet (Nasdaq's) requirements."
WAXMAN: Seeks Sale To Pay Down Debt
------------------------------------
The Plain Dealer reports on May 13, 2000 that financially
strapped Waxman Industries Inc. could complete its efforts to pay
off its note holders soon, according to an analyst.
In a complex deal, Bedford Heights-based Waxman would sell its
44.3 percent interest in Barnett Inc., a Jacksonville, Fla.-based
marketer of plumbing, electrical and hardware products. With the
proceeds, Waxman could pay off most of its debt of about $127.6
million to its note holders. Waxman distributes plumbing and
hardware products.
Waxman said last week that it is also discussing several options
to fund the interest payment of $56 million due on June 1 to the
deferred-coupon note holders. Based on a discussion with the
bondholder committee, the company believes it will be able to
amend and extend the period of the debt-reduction agreement and
include resolution of this payment.
Among the possible solutions is the sale or collateralization of
a portion of the Barnett common stock to fund all or a portion of
the June 1 interest payment, Waxman said last week.
Waxman got into financial trouble with its 1989 purchase of a
Canadian company that was hurt by a recession. The losing venture
was closed in 1994. Waxman was also hit by declining demand for
its products in recent years.
Waxman reported last week that it had a net loss of nearly $6
million for its third quarter ended March 31 compared with net
income of $3.5 million for the same period last year, which
included sale of its U.S. Lock subsidiary for $10.2 million.
The net loss for nine months was $13.3 million, compared with a
loss of $2.5 million last year. Net sales for the third quarter
of 2000 was $19.8 million, compared with $22.2 million last year.
For nine months, the sales were $62.4 million this year compared
with $79.6 million last year.
Meetings, Conferences and Seminars
----------------------------------
May 26-29, 2000
COMMERCIAL LAW LEAGUE OF AMERICA
52nd Annual Meeting of the New England Region
Colony Hotel, Kennebunkport, 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
August 17-19, 2000
ALI-ABA
Banking and Commercial Lending Law -- 2000
Renaissance Stanford Court
San Francisco, California
Contact: 1-800-CLE-NEWS
September 7-8, 2000
ALI-ABA and The American Law Institute
Conference on Revised Article 9 of the
Uniform Commercial Code
Hilton New York Hotel, New York, New York
Contact: 1-800-CLE-NEWS
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
February 22-24, 2001
ALI-ABA
Real Estate Defaults, Workouts, and Reorganizations
Wyndham Palace Resort, Orlando (Walt Disney
World), Florida
Contact: 1-800-CLE-NEWS
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.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
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contained herein is obtained from sources believed to be
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The TCR subscription rate is $575 for six months delivered via
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are $25 each. For subscription information, contact Christopher
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