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/raid1/www/Hosts/bankrupt/TCR_Public/000621.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, June 21, 2000, Vol. 4, No. 121 Headlines ADVA INTERNATIONAL: Inks Definitive Agreement to Acquire Global Information AGRIBIOTECH: Congress Okays Interest Free Loans to Farmers for 65% of Claims APPLE ORTHODONTIX: August 9 Bar Date Fixed ARM FINANCIAL: Plan Contemplates 100% Recovery by Unsecured Creditors ASTORIA METALS: Case Dismissed at Debtor's Behest CHERRYDALE FARMS: Taps Lowenstein Sandler PC as Attorneys CUTLER MANUFACTURING: Mailbox Manufacturer Files for Chapter 11 in Tampa FACTORY CARD OUTLET: Seeks Approval of Letter of Intent FIRSTMARK CORPORATION: Door Remains Open for Recovery From Professionals GENERAL-ELECTRO: Debtors' Amended Disclosure Statement Approved GRAHAM-FIELD HEALTH: Taps WL Ross & Co LLC as Investment Banker GREAT TRAIN STORE: Lease Auction Slated for June 29 HEDSTROM HOLDINGS: Debtors Propose Key Employee Retention Program INACOM: DecisionOne Prepared to Provide On-Going Customer Support INACOM: AlphaNet Solutions Says It Will Provide Customer Support Too INACOM: ENTEX IT Service Implements Program to Transition Inacom Customers INACOM: Compaq Alleges Misdirection of Tens of Millions of Dollars to Lenders JAYHAWK ACCEPTANCE: Debt Acquisition Moves to Convert Case to Chapter 7 MAXIM GROUP: Lead Shareholder Class Counsel Wants to Amend Complaint MMH HOLDINGS: Needs More Time to File Schedules & Statements ONEITA INDUSTRIES: Prepetition Lenders Object to Sale of Trademarks PETSEC ENERGY: Houlihan Lokey to Orchestrate Sale Process PHILIP SERVICES: Following Restructuring, CFO & General Counsel Call it Quits PIETRAFESA CORP.: Vince Rua Signs Letter of Intent to Buy Garment Factory SUNPOINT SECURITIES: SIPC Paying $31 Million to Cover Investors' Losses TOWER AIR: Fleet Business Credit Seeks Sanctions UNITED COMPANIES: Plan Proposing 30% Distribution to Unsecured Proposed UNITED HOMES: Sheldon Good to Auction $30 Million Of Residential Property ********* ADVA INTERNATIONAL: Inks Definitive Agreement to Acquire Global Information --------------------------------------------------------------------------- ADVA International Inc. (OTC Bulletin Board: ADII) announced that it has entered into a definitive agreement to acquire all of the outstanding common shares of Global Information Group USA, Inc. (GIG) in exchange for 12,468,750 common shares of ADVA International Inc., or approximately 95% of the total number of common shares outstanding. This gives effect to a 10 for 1 reverse stock split effected by the Company in March 2000. The remaining 716,250 shares, approximately 5%, will continue to be held by the existing shareholders of the Company. Biotel Inc. (OTC Bulletin Board: BTEL), ADVA's largest shareholder, has also approved the Agreement. As a result of the transaction GIG will become a wholly owned subsidiary of the Company. The agreement contemplates that Anthony E. Mohr, President of GIG, will be appointed President and Chief Executive Officer of ADVA International Inc. and three new members, appointed by GIG, will be appointed to the ADVA board of directors, which shall consist of six members. Closing, which is subject to various conditions, is expected to occur by July 15th (subject to extension under certain circumstances). A federal bankruptcy court issued an order on May 5, 2000 approving an amendment to a previously approved Plan of Reorganization to accommodate this stock exchange transaction for the benefit of the ADVA creditors and shareholders. GIG will pay a transaction fee at closing of $300,000 which will be used for payment of certain expenses, with the balance to be paid to priority claims and unsecured creditors of Advanced Medical Products, Inc. Global Information Group develops and markets application software that runs on the LINUX Operating System. Its present software product, first developed for the UNIX OS, is believed to be the only complete 3D solid modeling, animation, and rendering system currently available on the LINUX OS. GIG software is used by Digital Media professionals in the production of: film and video special effects; animation; Computer Aided Design (CAD) and scientific visualization; Internet web site and print graphics; game development; and virtual television. Future GIG plans include the further development and acquisition of other LINUX-based applications and software products. AGRIBIOTECH: Congress Okays Interest Free Loans to Farmers for 65% of Claims ---------------------------------------------------------------------------- Farmers owed money by AgriBioTech, the seed company based in Henterdon, Nevada, now attempting to reorganize under chapter 11, may obtain interest- free, 18-month loans for up to 65% of the amount of their claims against AgriBioTech under a program approved by Congress. "Despite scattered grumbling," the Associated Press reports, "the bill sailed through Congress, passing by voice vote in the House, and by 91-4 in the Senate." APPLE ORTHODONTIX: August 9 Bar Date Fixed ------------------------------------------ The Honorable Karen K. Brown, U.S. Bankruptcy Judge for the Southern District of Texas, Houston Division, entered an order fixing August 9, 2000 as the deadline for all personas and entities to file proofs of claim interest against Apple Orthodontix, Inc. ARM FINANCIAL: Plan Contemplates 100% Recovery by Unsecured Creditors --------------------------------------------------------------------- On March 2, 2000, the court granted the debtor's motion seeking approval of the sale of substantially all of the debtor's assets to Western and Southern, the assumption by the debtor and assignment to Western and Southern of substantially all of the debtor's executory contracts and unexpired leases; and certain settlement agreements. The Asset Sale closed on March 3, 2000. The purchase price for the assets was $119.3 million, subject to adjustment. Due to the escrow mechanism and the accelerated nature of the sale of the Risk Securities, it is not anticipated that any proceeds from the Asset Sale will be distributed from the escrow to ARM. General Unsecured Claims in the case total approximately $4 million to $5 million and estimated recovery is 100%. Preferred shareholder interest amount to $75 million and the estimated recovery is between 13% and 18%. The plan provides for the liquidation of the debtor's remaining assets and the distribution of such assets in an orderly manner to its creditors and Interest holders. ASTORIA METALS: Case Dismissed at Debtor's Behest ------------------------------------------------- An article appearing in the Press-Telegram last week relates that a federal bankruptcy judge has dismissed a Chapter 11 bankruptcy filing by ship-repair firm Astoria Metals Corp., because, according to court records, the company believed that the bankruptcy court would not find in their favor in light of objections by the U.S. Trustee to the Debtor's retention of professionals alleged to not be disinterested based on an actual conflict of interest. AMC, the Press-Telegram recants, signed a five-year lease with the port in July 1999 with the intention of using 33 acres of the former naval yard, including a dry dock, to operate a ship-repair facility. After AMC accrued more than $700,000 in unpaid rent and securities, according to port officials, the harbor commissioners voted unanimously to evict the firm on January 31. The following day, the port filed an unlawful detainer lawsuit against AMC. AMC, in turn, filed its chapter 11 petition. CHERRYDALE FARMS: Taps Lowenstein Sandler PC as Attorneys --------------------------------------------------------- CDF Candy Company, f/k/a Cherrydale Farms, Inc., et al., seek court authority to employ and retain Lowenstein Sandler PC as attorneys for the debtor. The debtor's attorney, Kenneth A. Rosen, Esq., was previously affiliated with the firm of Ravin, Sarasohn, Cook, Baumgarten, Fisch & Rosen, PC. Effective as of February 12, 2000, Rosen became a director of Lowenstein Sandler, and due to his familiarity with the case, the debtors have decided to employ and retain Lowenstein Sandler, PC. CUTLER MANUFACTURING: Mailbox Manufacturer Files for Chapter 11 in Tampa -------------------------------------------------------------------------- Michael Sasso, writing for The Ledger in Lakeland, Florida, reports that mailbox manufacturer Cutler Manufacturing Corp. filed for chapter 11 protection in Tampa. Cutler makes cluster mailboxes for apartment complexes, commercial buildings, schools and military bases, among other customers. Cutler employs about 50 people. "We firmly believe that we can get this thing turned around and come out of it," Hal Holder Jr., company president, told Mr. Sasso late last week. Cutler's biggest customer traditionally has been the U.S. Postal Service. Among other problems, Mr. Sasso relates, the postal service has cut back its orders, cutting into the company's revenues. FACTORY CARD OUTLET: Seeks Approval of Letter of Intent ------------------------------------------------------- Factory Card Outlet Corp. and Factory Card Outlet of America, Ltd., seek approval of a certain Letter of Intent dated June 5, 2000 by and among SKM (Saunders, Karp & Megrue), the debtors and the Creditors' Committee. The Letter of Intent sets forth thee parties' intention, subject to SKM's completion of its due diligence, to enter into a transaction that will serve as the basis for a plan of reorganization. The Transaction contemplates, among other things, that SKM will contribute $19.5 million towards the debtors' reorganization in exchange for which SKM will receive either substantially all of the assets of the debtors or newly issued shares of common stock of reorganized Factory Car which represent 90 percent ownership interest in that entity, before dilution, and a $19.5 million 12% subordinated promissory note. Generally, the Letter of Intent contemplates that a plan would provide for unsecured creditors, whose claims may aggregate approximately $43 million, to receive approximately $5.4 million in cash, a portion of which may be available to provide for a convenience class, plus subordinated promissory notes aggregating $7 million and 10 percent of the newly issued shares of common stock of reorganized Factory Card, before dilution. In the event that the debtors' assets are sold or disposed of pursuant to an offer or plan of reorganization which is not approved by SKM or contemplated in the Letter of Intent, the debtors shall reimburse SKM for all costs and expenses incurred in connection with the Transaction, including without limitation, out-of-pocket expenses incurred by SKM and expenses of professionals, in an n amount not to exceed $1 million; and a break-up fee of $1 million. The debtors and the Creditors' Committee have ageed to a Solicitation Restriction that will provide SKM with a necessary incentive to complete its due diligence and enter into the Definitive Agreement which will form the basis for a plan of reorganization, while reassuring SKM that the debtors and the creditors' committee are not actively soliciting other proposals. The solicitation restriction does not prohibit either party from responding to inquiries or requests for information. FIRSTMARK CORPORATION: Door Remains Open for Recovery From Professionals ------------------------------------------------------------------------ Richard Carelli, writing for the Associated Press from Washington, reports that the Supreme Court refused to bar use of a federal anti-racketeering law against outside professionals accused of conspiring with a business client to commit fraud even if they did not help manage or operate the business. The High Court Justices, acting without comment Monday, let stand a Seventh Circuit decision that gave a broad scope to the conspiracy provisions of the Racketeer Influenced and Corrupt Organizations Act. The appeals court's ruling in January left a law firm and investment banking firm potentially liable to investors who were defrauded out of millions of dollars by a now- bankrupt Firstmark Corporation based in Indianapolis. The case is Raffensperger, Hughes & Co. v. Brouwer, 99-1637. GENERAL-ELECTRO: Debtors' Amended Disclosure Statement Approved --------------------------------------------------------------- By order of the US Bankruptcy Court, Western District of New York, entered on June 1, 2000, the amended Disclosure Statement filed by General-Electro Mechanical Corporation and dated May 31, 2000 is approved. June 27, 2000 is fixed for the hearing on confirmation of the plan at the US Bankruptcy Court, Western District of New York, Olympic Towers, 300 Pearl Street, Suite 350, Part I Courtroom, 3rd Floor, Buffalo, New York. In a letter to creditors urging acceptance of the plan, the Creditors' Committee explains that the plan provides for an initial distribution to unsecured creditors in July equal to almost 5 cents on the dollar with a further distribution of senior preferred shares of stock to be issued in August. The senior preferred shares offer unsecured creditors redemptions equaling an additional return of almost 45 cents on the dollar plus, potentially, dividends on the stock. The plan is being funded by General- Electro's parent company, an entity which did not enter bankruptcy. GRAHAM-FIELD HEALTH: Taps WL Ross & Co LLC as Investment Banker --------------------------------------------------------------- Graham-Field Health Products, Inc. and its affiliated debtors seek authority to employ WL Ross & Co LLC as their investment banker for the purpose of identifying and advising the debtors concerning opportunities for a transaction involving the potential sale of the stock or substantially all of the assets of Prism Enterprises, Inc. Specifically, WL Ross will: * Assist in performing financial analyses of the business operations, present financial condition and future prospects of Prism; * Prepare, in consultation with the debtors, an offering memorandum describing Prism and its business; * Develop, update and review with the debtors a list of potential parties to a Transaction and contact parties on the List as approved by the debtors; * Assist and advise the debtors in evaluating any Transaction; * As requested, participate and assist the debtors in negotiations with respect to any Transaction; * Advise and assist the debtors' management in making presentations to the debtors' Board of Directors with respect to any Transaction; and * As requested, and if appropriate, render an opinion to the debtors' Board of Directors as to the fairness from a financial point of view to the debtors' shareholders of the consideration to be received in respect of a Transaction. The Debtors agree to pay a commission based on an escalating scale: * 5% of consideration (as defined in the Engagement Letter) up to $1 million; plus * 4% of consideration between $1 million and $2 million; plus * 3% of consideration between $2 million and $3 million; plus * 2% of consideration between $3 million and $4 million; plus * 1% of consideration in excess of $4 million. GREAT TRAIN STORE: Lease Auction Slated for June 29 --------------------------------------------------- The debtors, The Great Train Store Company, et al. seek entry of a court order setting a date to conduction an auction of or otherwise sell the debtors' interests in certain real property leases; and approving bidding procedures and terms and conditions of such auction; establishing cure amounts and altering lease procedures; approving rejection of certain leases. The debtors have determined that an auction of their leases will enable them to realize the most value from the leases. The debtors request that the court establish June 27, 2000 at noon as the time to submit written bids in accordance with the procedures, and to establish June 29, 2000 at 10:30 AM as the date and time of the Auction. Scheduling the bidding deadline and Auction as requested will allow the debtors to minimize unnecessary administrative expenses. The debtors will seek to reject those leases which are not purchased at auction. HEDSTROM HOLDINGS: Debtors Propose Key Employee Retention Program ----------------------------------------------------------------- Hedstrom Holdings, manufacturers and marketers of well-established children's leisure and activity products, propose to implement a limited program of retention bonuses to encourage certain key employees to continue their employment with the debtors through March 30, 2001. The Key Employees whom the debtors propose to cover under the Retention Program comprise 39 management positions. The aggregate cost of the Retention Program, assuming all the key employees are eligible for all payments and a plan of reorganization does not become effective before March 30, 2001 is approximately $1.45 million. INACOM: DecisionOne Prepared to Provide On-Going Customer Support ----------------------------------------------------------------- DecisionOne Corporation says it is prepared to offer immediate technology support services to Inacom customers who are faced with an interruption in service as a result of Inacom's Chapter 11 filing on June 16, 2000. DecisionOne says it has formed a special task force to assess customers' unique support requirements, structure rapid transition plans and provide uninterrupted service to Inacom customers who have immediate and long-term needs. For a discussion of strategic options and customized support solutions, DecisionOne invites Inacom customers to call Bill Beaumont, DecisionOne's Vice President of Marketing, at 610-725-2510. INACOM: AlphaNet Solutions Says It Will Provide Customer Support Too -------------------------------------------------------------------- AlphaNet Solutions, Inc., stepped forward to say that it is offering support to the former employees and customers of Inacom Corp. in the northeast region. Following Inacom's June 16 announcement that it would be shutting down operations, AlphaNet began working with Inacom employees to provide assistance. "AlphaNet has been offering support to Inacom employees since the Friday announcement," said Donald Deieso, president & CEO of AlphaNet Solutions, Inc. "We have encouraged Inacom employees to call our human resources department to discuss opportunities." Inacom customers are invited to call AlphaNet at 800- 257-4263 or view AlphaNet's career opportunities at http://www.alphanetsolutions.com. Additionally, AlphaNet has put in place an emergency response plan for Inacom customers. The dedicated phone line for that service is 800-257-4263, extension 3166. "Inacom customers remain in need of quality IT services and support," said Dr. Deieso. "Our intent is to make this transitional period as seamless as possible for them. AlphaNet has the infrastructure, experience, and stability to provide services that enable companies to win in today's marketplace." INACOM: ENTEX IT Service Implements Program to Transition Inacom Customers -------------------------------------------------------------------------- ENTEX IT Service, Inc., unveiled a comprehensive program to provide continuity services to customers impacted by Inacom's June 16th Chapter 11 and operations closure announcement. Since Inacom's Friday announcement, ENTEX says, it has been engaged by a number of Inacom customers to provide immediate desk-side, help desk, break/fix, and LAN support services and has implemented processes to enable the rapid transition of infrastructure support to ENTEX. "Our concern is for the former customers and employees of Inacom and we have diligently worked to provide a smooth process to minimize the impact of this event on customer business and on the livelihood of employees," said John McKenna, CEO of ENTEX. ENTEX has implemented a toll-free Inacom customer support line, available at 800-597-2285, to initiate the process of transitioning infrastructure management responsibilities. An Inacom employee hotline is also available at 800-542-1092 and ENTEX has arranged employee conference calls for each day this week to answer questions and provide further information about opportunities within the Siemens company to candidates. More information is available on the company's web site at http://www.entex.com. INACOM: Compaq Alleges Misdirection of Tens of Millions of Dollars to Lenders ----------------------------------------------------------------------------- Custom Edge, Inc. and its parent Compaq Computer Corporation (NYSE: CPQ) filed an objection in Inacom's bankruptcy proceedings. In that filing, Compaq disclosed that Inacom and its lenders have received more than $94 million in Custom Edge's funds and requested that these funds be returned to Custom Edge. Custom Edge also disclosed that, pending resolution of the dispute, Custom Edge had withheld approximately $43 million in fees and other amounts payable to Inacom. "Compaq is confident that after the bankruptcy court completes its review it will protect Custom Edge's interest in the misdirected funds and in any other Custom Edge funds in dispute," said Jesse Greene, Compaq's Chief Financial Officer. JAYHAWK ACCEPTANCE: Debt Acquisition Moves to Convert Case to Chapter 7 ----------------------------------------------------------------------- Debt Acquisition Company of America IV, LP, The Auto Connection and Gary Malone Motors file a motion to convert the case. Jayhawk has deferred the majority of the payments due on Dealer Claims under the plan. The stock in Jaymed is the only source of payments for Dealer Claims, and the creditors assert that it is in their best interest that a Chapter 7 trustee be appointed to determine the best way to maximize the value of the Jaymed stock for the benefit of creditors, including making a determination as to whether to sell the Jaymed stock. MAXIM GROUP: Lead Shareholder Class Counsel Wants to Amend Complaint -------------------------------------------------------------------- By order dated February 8, 2000, the United States District Court for the Northern District of Georgia appointed Kirby McInerney & Squire LLP as Lead Counsel in the consolidated securities fraud class actions filed beginning May 1999 on behalf of purchasers of shares of Flooring America, Inc. (NYSE: FRA), then named the Maxim Group, Inc. (the "Company") (consolidated case No. 99-CV-1280). The consolidated class action complaint, which was filed on April 10, 2000, alleges that the Company and certain of its officers and directors had committed securities fraud by, inter alia, improperly reporting artificially inflated revenues and income. Indeed, as the Company admitted in May, July and October of 1999, the Company had reported false and misleading financial results for the fiscal year ended January 31, 1999, and each of the four quarters therein. The complaint alleges that these results, admittedly inflated by the company's improper recognition of revenues from vendor rebate programs, misled investor who purchased stock in a company whose losses were six times larger than it originally reported for fiscal 1999. The consolidated complaint was brought on behalf of all investors who purchased the Company's common stock between June 2, 1998 and July 13, 1999. Based upon recent events, Kirby McInerney & Squire will seek to file an amended consolidated complaint to take into account the Company's recent disclosure that it continued, via further improper recognition of revenue, to report false and inflated earnings not only for all four quarters of 1999 but for the first two quarters of fiscal 2000 as well. The new complaint will extend the class period to assert claims on behalf all investors who purchased Flooring America (or Maxim) common stock between June 2, 1998 and May 22, 2000, when the Company revealed the necessity for its most recent restatement of earnings. The amended consolidated complaint will allege a common, continuous course of misconduct during the extended class period, and will assert claims based on that common course of misconduct against certain present and former officers and directors of the Company (which, on June 15, 2000, filed for bankruptcy protection). MMH HOLDINGS: Needs More Time to File Schedules & Statements ------------------------------------------------------------ MMH Holdings, Inc., et al., ask the Court for an extension to and including June 30, 2000 to file schedules and statements of financial affairs. The debtors contend that the extension is necessary and warranted given the size and complexity of the debtors' bankruptcy cases and the location of books and records of the debtors at numerous offices including at some of the offices their non-debtor foreign affiliates. ONEITA INDUSTRIES: Prepetition Lenders Object to Sale of Trademarks ------------------------------------------------------------------- The prepetition lenders of Oneita Industries, Inc. object to the Trustee's Motion for order approving the sale of trademarks owned by Oneita Industries, Inc. saying that the collateral of the prepetition lenders including the trademarks constitutes the property of the Prepetition lenders which may not be sold without their express consent, and which is required in the first instance to be turned over to the prepetition lenders pursuant to the Lift Stay Order. The prepetition lenders do not consent to the sale by the Trustee of the Trademarks. The prepetition lenders are substantially under-secured in the Collateral. Therefore, they argue, that even if the Trustee has the right to sell the Trademarks without the prepetition lenders' consent, the debtor's estate has no interest in the Trademarks absent the agreement of the prepetition lenders to carve out funds for a distribution to unsecured creditors. In light of the foregoing, the Trademarks may not be sold by the Trustee, absent the express consent of the prepetition lenders. PETSEC ENERGY: Houlihan Lokey to Orchestrate Sale Process --------------------------------------------------------- Petsec Energy Ltd's (ASX: PSA and OTC BB: PSJEY) wholly-owned subsidiary, Petsec Energy Inc, reached an agreement with its unsecured creditors committee to sell the company. Andrew B Miller, Matthew R Niemann, and Brett A Lowrey, all at Houlihan Lokey Howard & Zukin Capital, LP in Los Angeles, will take the lead role in the sale process for the benefit of Petsec's unsecured creditors. Any sale transaction, of course, will be subject to bankruptcy court approval. Petsec, in turn, anticipates filing a Plan of Reorganization that will distribute the sale proceeds to creditors. That Plan contemplates that creditors will have no recourse against Petsec Energy Ltd. PHILIP SERVICES: Following Restructuring, CFO & General Counsel Call it Quits ----------------------------------------------------------------------------- Philip Services Corp. has launched a search for a chief financial officer and a general counsel after two executives resigned, reports Crain Communications Inc.'s Waste News. Philip Widman, chief financial officer, and Colin Soule, general counsel and corporate secretary, cited personal reasons for not relocating with the company to new corporate headquarters in Chicago, a move scheduled for September. Both executives said they had completed their goal in seeing Philip through reorganization. PIETRAFESA CORP.: Vince Rua Signs Letter of Intent to Buy Garment Factory ------------------------------------------------------------------------- The Times Union reports that Vince Rua has signed a letter of intent to purchase the assets of The Learbury Clothing Store -- a tailored men's clothing store in Syracuse, New York -- from Pietrafesa Corp. which sought Chapter 11 protection by filing a petition in Wilmington. The store, Rua told the Albany daily, is the oldest factory outlet in the country, is the retail arm of Pietrafesa Corp., a maker of tailored men's apparel. Rua declined to reveal how much he will pay for the store to the Times Union. The purchase price, of course, will have to be disclosed to the Bankruptcy Court before a transaction is approved. SUNPOINT SECURITIES: SIPC Paying $31 Million to Cover Investors' Losses ----------------------------------------------------------------------- The Securities Investor Protection Corp. will pay a record $31 million to restore stocks and cash to some 9,700 investors nationwide allegedly bilked by Texas-based Sunpoint Securities, Inc. Liquidation proceedings for Sunpoint began last November. SIPC announced the payment yesterday, the final day for filing claims, indicating that $25 million would repay amounts misappropriated from customer accounts and $6 million to cover administrative expenses and trustee fees. A report curculated by the Associated Press recalls that, in a settlement last month with the Securities and Exchange Commission, Sunpoint's former president and chief executive, Van R. Lewis III, agreed to pay a civil fine to be determined later. Lewis neither admitted to nor denied the SEC's allegations that he violated securities laws. TOWER AIR: Fleet Business Credit Seeks Sanctions ------------------------------------------------ In an emergency motion of Fleet Business creditor corporation for an order of contempt against the debtor and the Chapter 11 Trustee, Fleet alleges that the debtor is in default under a lease with Fleet, failing to pay monthly rent for December 1999, January, February, March, April and May 2000 in the aggregate of over $3 million. Fleet also contends that he debtor is flying aircraft subject to a stipulation that such aircraft in which Fleet maintains an interest would remain grounded until a business arrangement could be reached between the parties. UNITED COMPANIES: Plan Proposing 30% Distribution to Unsecured Proposed ----------------------------------------------------------------------- will be held before The Honorable Mary F. Walrath, US Bankruptcy Judge, 6th Floor, 824 Market Street, Wilmington, Delaware at 2:00 PM. United Companies Financial Corporation, et al., presents creditors with a plan of reorganization premised on the closing of various Sale Transactions prior to the Plan's Effective Date. All remaining assets will be liquidated and the proceeds distributed pursuant to the plan. The Plan contemplates that the Sale Transactions will generate $273,000,000, subject to adjustments with a ceiling price of $315,700,000 and a floor price of $258,300,000. With certain exceptions, upon the Effective Date, the plan provides for distribution of a combination of cash and/or litigation trust interests to holders of claims entitled to distributions under the plan. The plan provides the following estimated percentage recoveries of allowed claims or interests: * Bank Claim totaling $857,990.000 - 76.45% * Senior Note Claims totaling $229,900,000 - 50.35% * Borrower Litigation Claims - $14,000,000 - 30% * General Unsecured Claims - $20,000,000 - 30% UNITED HOMES: Sheldon Good to Auction $30 Million Of Residential Property ------------------------------------------------------------------------- Chicago-based Sheldon Good & Company Auctions has been retained by United Homes, Inc. to develop a national auction program for $30 million in residential properties. United Homes, which filed for protection from creditors under Chapter 11 earlier this year, has a portfolio of 313 finished and partially finished single-family homes and home sites throughout Illinois, Arizona and Michigan. "We believe this auction offers the largest portfolio of residential properties in a single event from a single developer," said Steve Good, president of Sheldon Good & Company Auctions. "Real estate auctions provide an accelerated marketing approach that reduces the time and costs of typical sales methods. In addition, auctions allow the seller to offer each property individually or in packages, and offer buyers great opportunities to purchase quality properties." According to Barry Chatz, an attorney with Kamensky & Rubinstein and chairman of the Unsecured Creditor's Committee, "Our committee felt the auction method would expedite the sale of these ideally located properties. These sites are highly desirable for homebuilders or homebuyers who want to purchase from one to dozens of homes or lots. All of the infrastructure, water and sewers are already in place." Locations where homes will be auctioned are: Arizona: Phoenix; Scottsdale; Cave Creek; Chandler Illinois: Waukegan; Antioch; Vernon Hills; Cary; Crystal Lake; Palatine Michigan: Caledonia; Holland; Grandville While exact dates and locations of the auctions have not yet been determined, concurrent auctions will likely take place in all three states during September 2000. The details of the auction are scheduled to be announced in late June. The United Homes properties may be sold individually or in packages for developers. Sheldon Good & Company Auctions will arrange third-party financing, as well as seminars and information packets for bidders. Additional details will be announced as they become available. For more information contact Sheldon Good & Company Auctions at (312) 346-1500. Headquartered at 333 W. Wacker Dr., Chicago, and with offices throughout the U.S. and Canada, Sheldon Good & Company has been ranked as the nation's largest real estate auction firm with annual sales of more than $6.5 billion in residential and commercial real estate. ********* A listing of Meetings, Conferences and Seminars appears each Tuesday in the TCR. Bond pricing, appearing each Friday, is supplied by DLS Capital Partners, Dallas, Texas. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. Debra Brennan, Yvonne L. Metzler, Edem Alfeche and Ronald Ladia, Editors. Copyright 2000. All rights reserved. ISSN 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *