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/raid1/www/Hosts/bankrupt/TCR_Public/000628.MBXT R O U B L E D C O M P A N Y R E P O R T E R Wednesday, June 28, 2000, Vol. 4, No. 126 Headlines ADVANCED MEDICAL: Agreement To Acquire Global Information Shares APRIA HEALTHCARE GROUP: Annual Meeting Set For July 19, 2000 ARIES VENTURES: Court Approves Non-Material Modifications to Plan CAMBRIDGE INDUSTRIES: Court Approves Meridian Purchase CHS ELECTRONICS: Motion To Continue Disclosure Statement Hearing COLONIAL DOWNS: Annual Meeting To Be Held On August 2, 2000 DAEWOO MOTORS: Competing Bids For Daewoo Ownership DAEWOO MOTORS: Three Bids Received GANTOS: Meeting of Creditors GULF STATES: Hopes To Emerge By September GULF STATES: Objections Of Committee To Plan INACOM: Intecom Offers Employment to Former Workforce INTEGRATED HEALTH: Termination of Griggs' Employment INTERACTIVE NETWORK: Committee Contacts Shareholders JUMER'S CASTLE: Plans To Sell Hotels To Pay Off Creditors KITTY HAWK: Motion To Require Calling of Shareholder Meeting LOGDIAN INC: Taps Eppich as Chief Financial Officer LUMENYTE INTERNATIONAL: Continued Disclosure Statement Hearing MALIBU ENTERTAINMENT WORLDWIDE: Stock Ownership Reported MANHATTAN BAGEL: New World Recaptures 13 Buffalo-Area Stores NEWSTAR MEDIA: Seeks Chapter 11 Protection NEXAR TECHNOLOGIES: Meeting of Creditors PETSEC ENERGY LTD: Agreement To Sell Petsec Energy Inc. PIXELON: Ousts Executives, Plans To File Chapter 11 PRIME RETAIL: Executes Term Sheets for $110 Million Financing QUAKER COAL: Whayne Supply Owed $3.78 Million By Branham & Baker QUANALYZE OIL: Meeting of Creditors ROBERDS: Notice of Rejection of Leases SAFETY COMPONENTS: Hearing To Consider Disclosure Statement SAXTON INC: Auditor Expresses Doubt On Saxton's Viability SINGER: Disclosure Statement Approved SONY CORP.: Expected to post huge loss SUPERIOR TOUR: Case Summary and 20 Largest Unsecured Creditors UNIFORET INC: S&P Raises Notes To CCC-Minus UNITED COMPANIES FINANCIAL: Hearing to Consider Sale Motion VERDANT BRANDS: Engages Investment Banking Firm WORLDCLASS PROCESSING: Business and Assets Acquired ********* ADVANCED MEDICAL: Agreement To Acquire Global Information Shares ---------------------------------------------------------------- ADVA International Inc. has entered into a definitive agreement to acquire all of the outstanding common shares of Global Information Group USA, Inc. 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., ADVA's largest shareholder, has also approved the agreement. As a result of the transaction Global Information Group will become a wholly-owned subsidiary of the company. The agreement contemplates that Anthony E. Mohr, President of Global Information Group, will be appointed President and Chief Executive Officer of ADVA International Inc. and three new members, appointed by Global, 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. Global 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. Global Information Group 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 Global Information Group plans include the further development and acquisition of other LINUX- based applications and software products. The LINUX OS is "open-source" software, distributed free on the Internet and via established market channels. It is developed, debugged and improved by an international community of programmers in cooperation with companies such as VA Linux (LNUX), Red Hat (RHAT), Silicon Graphics (SGI), IBM and many other major concerns in the computer industry. The application software market targeted by Global can be characterized as the "high volume/low price" segment of the computer market where users are rapidly embracing LINUX as a robust, stable and lower cost alternative to both UNIX and MS Windows. LINUX is widely believed to be the fastest growing computer operating system and the de facto alternative to both UNIX and Microsoft Windows, with continued growth in market share predicted by many industry analysts. APRIA HEALTHCARE GROUP: Annual Meeting Set For July 19, 2000 ------------------------------------------------------------ The annual meeting of stockholders of Apria Healthcare Group Inc. will be held at 8:00 A.M. on Wednesday, July 19, 2000 at Apria Healthcare Group Inc. Building Number 3500 - Grand Canyon Room, 3560 Hyland Avenue, Costa Mesa, California 92626. Items of Business to be considered will be: (1) To elect seven members of the Board of Directors, with such persons to hold office until the 2001 annual meeting of stockholders or until their successors are elected and qualified. (2) To transact such other business as may properly come before the annual meeting and at any adjournment thereof. Stockholders may vote if they were a stockholders of record on May 31, 2000. ARIES VENTURES: Court Approves Non-Material Modifications to Plan ----------------------------------------------------------------- On June 1, 2000, the United States Bankruptcy Court approved and entered an order authorizing non-material modification of Casmyn Corporation's Second Amended Chapter 11 Plan of Reorganization. The debtor, Casmyn Corp., a Colorado corporation, is now known as Aries Ventures Inc., a Nevada corporation, and is referred to herein as the "Company". The debtor's Second Amended Chapter 11 Plan of Reorganization was confirmed by the United States Bankruptcy Court on March 31, 2000 and became effective on April 11, 2000. The Order authorized the company to bypass the issuance of the New Goldco Warrants as provided for in the Plan, and instead to issue and distribute to its shareholders all or a majority of the common stock of the company's wholly-owned subsidiary that owns the company's mining investments and properties. On May 18, 2000, the name of the company's subsidiary incorporated in the state of Nevada that owns the company's mining investments and properties was changed from Goldco Ltd. to Resource Ventures, Inc. As a result of the foregoing, the company's Board of Directors has authorized the spin-off of all of the shares of common stock of Resource Ventures, Inc. effective July 1, 2000, to the company's shareholders of record on April 11, 2000. Accordingly, shareholders entitled to exchange their old securities for new securities under the Plan will receive one share of common stock and one common stock purchase warrant in Aries Ventures Inc. and in Resource Ventures, Inc., respectively. CAMBRIDGE INDUSTRIES: Court Approves Meridian Purchase ------------------------------------------------------ Cambridge Industries' Board of Directors announced that it has received approval from the United States Bankruptcy Court for the District of Delaware to sell substantially all of the company's assets to Meridian Automotive Systems, Inc. of Dearborn, Michigan. This action clears the way for Cambridge and Meridian to close the sale within the next few weeks. At that time, Meridian will assume ownership of the purchased assets. Additionally, the Meridian name will replace Cambridge's name in all affected locations. When the asset sale is complete, Meridian Automotive Systems will become a significant force in the automotive industry, supplying interior and exterior components to Original Equipment Manufacturers and other Tier 1 suppliers. Meridian's combined sales will exceed $1.2 billion with operations located throughout North America. "We welcome Cambridge employees, customers and suppliers to Meridian," said Robert Barton, chairman, president and CEO of Meridian Automotive Systems. "This acquisition gives us the opportunity to step up our efforts to plan, produce, and deliver complex modular systems that are in increasingly greater demand by all the OEM's. We now plan to move swiftly to close on the sale and begin the critical process of integrating the Cambridge assets into our operations. "The acquisition of Cambridge's assets by Meridian will result in one major supplier with great potential to grow in the future," said Barton. "This acquisition clearly supports our strategy to be a global leader in automotive exterior systems and selected interior modules." Cambridge has been operating under bankruptcy protection since May 10, when the company voluntarily filed petitions under Chapter 11 to facilitate completion of the sale process. Following close of the asset sale to Meridian, a small core of Cambridge management will oversee completion of remaining bankruptcy proceedings, including court-approved payments of secured and unsecured debt to Cambridge creditors. It is expected that most of the bankruptcy proceedings will be completed by the end of the year. "We are pleased at the court's timely decision -- we can now finalize the sale and transfer of Cambridge assets to Meridian in a prompt and efficient way, and ensure that the needs of our customers continue to be met," said Richard Crawford, founder and chairman of Cambridge. The purchase price for Cambridge's assets will include approximately $363 million in cash and the assumption by Meridian of certain current and accrued liabilities and certain employee- related obligations and adjustments. Major investors in Meridian's acquisition of Cambridge include Windward Capital Partners, L.P., Metropolitan Life Insurance Company, Northwestern Mutual Life Insurance Company, Credit Suisse First Boston and the Caisse de Depot et Placement du Quebec. Meridian Automotive Systems is headquartered in Dearborn, Mich. and has 13 locations in Michigan, Indiana, Kansas and Tennessee. Meridian is a leading supplier of technologically advanced front and rear end modules, signal lighting, console modules, instrument panels and other interior systems to Ford, GM, DaimlerChrysler, Toyota and other major Tier 1 parts suppliers. Headquartered in Madison Heights, Mich., Cambridge Industries is a Tier 1 plastic composites supplier to the automotive, light and commercial truck, and industrial products markets with facilities in the U.S., Canada, and South America. CHS ELECTRONICS: Motion To Continue Disclosure Statement Hearing ----------------------------------------------------------------- CHS Electronics, Inc., debtor, seeks entry of an order continuing the June 23, 2000 hearing on approval of the debtor's amended Disclosure Statement to the court's next available calendar date, June 26, 2000. The debtor will file its second amended plan of reorganization and amended Disclosure Statement on June 23, 2000 and requests that the court continue the hearing on approval of the debtor's amended disclosure statement for the next available date on the court's calendar, June 26, 2000. According to the debtor, the second amended plan of reorganization and amended disclosure statement address substantially all of the objections raised by the Trade Committee and contain terms that have been exchanged by the parties and were the topic of extensive negotiations between the parties for the past two weeks. COLONIAL DOWNS: Annual Meeting To Be Held On August 2, 2000 ----------------------------------------------------------- The annual meeting of shareholders of Colonial Downs Holdings, Inc., a Virginia corporation, will be held on August 2, 2000 at 2:00 p.m., local time, at Colonial Downs Racetrack, 10515 Colonial Downs Parkway, New Kent, Virginia for the following purposes: 1. To elect three Class III directors, each for a term of three years and until their respective successors are duly elected and qualified. 2. To amend the Articles of Incorporation of the company to reflect a change in name of the company to Colonial Holdings, Inc. 3. To ratify the appointment of the accounting firm BDO Seidman, LLP as independent auditors for the company for the current year. Transaction of any other business properly presented before the meeting will also be considered. Only shareholders of record at the close of business on June 26, 2000 are entitled to vote at the annual meeting. DAEWOO MOTORS: 3 bids received for it ------------------------------------- Daewoo Motor Co's auction office said it has received a joint proposal from DaimlerChrysler AG and Hyundai Motor Co, another joint proposal from General Motors Corp and Fiat SpA, and a solo proposal from Ford Motor Co for Daewoo Motor. The office plans to select one or two preferred negotiators for the auction of Daewoo Motor by the end of June, before naming the final winner in September. (AFX News Limited 26-Jun-2000) DAEWOO MOTORS: Competing Bids For Daewoo Ownership -------------------------------------------------- According to a report in The Wall Street Journal on June 27, 2000, the five-company contest to acquire South Korea's insolvent Daewoo Motor Co. is substantially reshaping the auto industry in Asia. General Motors Corp. and Italy's Fiat SpA said they would jointly bid for Daewoo. DaimlerChrysler AG and South Korea's largest auto maker, Hyundai Motor Co., announced an alliance that includes a joint Daewoo bid. Ford Motor Co. is bidding for Daewoo alone. A committee of Daewoo executives handling the sale will choose one or more of the bidders for further negotiations on Friday, and it hopes to complete the sale by September. Creditors are auctioning off Daewoo Motor as part of the breakup of Daewoo Group. The article states that the eventual winner of Daewoo may also get an advantage over its rivals in Asia. GM and Fiat announced that they will form a new company to own and operate Daewoo Motor. GM will be the largest holder, Fiat will own as much as 20%, and the rest will be held by Daewoo's creditors. GM had intended to pursue Daewoo solo, but says that an alliance with Fiat, will provide cost-saving and joint technology development plans and will help with the acquisition. GM owns 20% of Fiat's auto unit. DaimlerChrysler and Hyundai announced a strategic alliance that includes a joint bid for Daewoo Motor, joint development of small cars, and a 50-50 venture for commercial vehicles. DaimlerChrysler will buy 10% of Hyundai for $428 million and get a seat on Hyundai's board. The alliance gives DaimlerChrysler partners in two of Asia's most important car markets, Japan and Korea. DaimlerChrysler recently acquired 34% of Mitsubishi Motors Corp. of Japan. A DaimlerChrysler-Hyundai-Mitsubishi trio could also become a powerful combination in global markets. The Daewoo Motor sale will also shift the strategic balance in Asia. Daewoo has become a key element in the battle between GM and Ford for the title of world's largest car maker, and the two U.S. companies are likely the strongest candidates. How Hyundai will affect DaimlerChrysler's bid for Daewoo is uncertain. The participation of a Korean company may give the pair an advantage in a country where the car industry is seen as a symbol of national power. On the other hand, there is some concern about Hyundai attaining too dominant a position in the local market, of which Hyundai and its sister company, Kia Motors Corp., control about three- fourths. Who is trying to buy Daewoo Motor: General Motors and Fiat -- Will form new company to own Daewoo; GM will hold largest stake, Fiat up to 20% DaimlerChrysler and Hyundai Motor -- Bidding as part of wider strategic alliance that includes joint small-car development and a commercial-vehicle joint venture -- DaimlerChrysler buys 10% of Hyundai Ford Motor -- Will bid alone GANTOS: Meeting of Creditors ---------------------------- A bankruptcy case concerning Gantos, Inc. was originally filed under Chapter 11 on December 28, 1999 and was converted to a case under Chapter 7 on June 20, 2000. A meeting of creditors will be held on July 24, 2000 at 1:00 PM at the Bankruptcy Meeting Room, One Century Tower, 265 Church Street, Suite 1104, New Haven CT. GULF STATES: Hopes To Emerge By September ----------------------------------------- Gulf States, which went into Chapter 11 Bankruptcy last July 1, 1999, will present its disclosure statement this July 14 to Bankruptcy Judge James Sledge. Gulf States hopes to emerge from bankruptcy as soon as September of this year, attorneys for the company said. GULF STATES: Objections Of Committee To Plan ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Gulf States Steel of Alabama, Inc. object to the Disclosure Statement relating to the debtor's plan. The Committee asserts that the debtor fails to disclose the method used to determine the value of the debtor's business. Specifically the debtor asserts that the reorganized value of the debtor would be $135 million and the equity value would be $50 million. The debtor should disclose the specific assumptions made and the calculation used by Arthur Andersen to arrive at those figures. According to the Committee the debtor should disclose an estimate regarding the number of possible preference actions and the likelihood of recovery; the Disclosure Statement fails to adequately disclose the kind and nature of claims to be released; The plan impermissibly limits the pool of individuals or entities who may purchase or subscribe to purchase stock in the reorganized debtor to the holders of Mortgage Note Claims; the Disclosure statement fails to inform unsecured creditors whether the common stock of the Reorganized Debtor will have value and what will happen to that value if the Reorganized Debtor is unable to meet its financial projections; the Disclosure Statement does not disclose how the proceeds from proceeds arising from causes of actions which will be held in the trust to be set up under the plan will be distributed; the Disclosure Statement fails to disclose in sufficient detail the potential sale of the debtor's assets to a newly organized subsidiary owned by the debtor if the Class 3 cr4edditors vote to reject the plan; and the plan provides a premature termination of the Committee. INACOM: Intecom Offers Employment to Former Workforce ----------------------------------------------------- Philippe Lecat, chief executive officer of Intecom, aptly paraphrased Mark Twain yesterday by noting, "Reports of our demise have been greatly exaggerated." Executives of Addison, Texas-based Intecom, a leading provider of enterprise communications systems and call center solutions, barely noticed the news on Monday, June 19, that Omaha, Nebraska- based Inacom Corp. filed Chapter 11. Because Inacom had a division located in the Dallas area, Intecom was aware that similarities in the two companies' names led to some confusion in the past. The Intecom switchboard fielded occasional phone calls intended for Inacom, and packages intended for Inacom sometimes ended up in Intecom's mailroom. Yesterday, however, Intecom management was informed that news coverage of the Omaha company's Chapter 11 filing created rumors within its own industry. A handful of incredulous customers made phone calls to Intecom executives, who quickly allayed their concerns. And, several recruiters placed calls to surprised Intecom employees asking if they could be of service in finding them new jobs. "Our first reaction was to communicate with our employees, customers and partners to ensure that what appears to be a somewhat isolated rumor doesn't turn into widespread confusion," said Lecat. "But our next immediate thought was that some of the 4,000 people reportedly laid off by Inacom might like to come to work with us. Presumably these include a lot of skilled information technology employees and, frankly, we'd like to talk to them." Intecom, like many thriving technology companies in the Dallas area, has been unable to fill all the positions it has open for skilled employees, Lecat explained. With more than 500 employees total, Intecom currently has more than 40 positions available in its Addison, Texas, headquarters office alone. Lecat said Intecom placed a call yesterday to Inacom to determine if they could participate in any outplacement services offered to employees who were part of the layoffs. Intecom also is extending an open invitation to all Inacom employees to investigate employment opportunities through its Web site at www.intecom.com. In addition, resumes can be directed to Intecom Human Resources, 5057 Keller Springs Road, Addison, Texas 75001. "Intecom's growth is being fueled by new areas of business such as customer information networks, which enable companies to give their own customers greater access to information about purchases, accounts and other requests, whether using voice, email or the Web," said Lecat. "We have numerous positions open now to help us keep pace with the demand we're experiencing, and we expect that need to continue throughout the year," he added. About Intecom Dallas-based Intecom (www.intecom.com) is an innovative telecommunications company with a 20-year legacy of providing award-winning solutions to the business marketplace. Empowering organizations across all industries with customer relationship solutions, Intecom's comprehensive customer information networks and advanced enterprise communications solutions yield strategic business results. Intecom is a subsidiary of Aerospatiale Matra, a $14 billion French conglomerate. INTEGRATED HEALTH: Termination of Griggs' Employment ---------------------------------------------------- Under Prepetition Agreements dated October 21, 1997, Stephen P. Griggs would serve as President of RoTech through October 21, 2002, and would receive additional compensation and a warrant to purchase shares of IHS stock at a fixed price. The Debtors and Mr. Griggs have mutually agreed that it would be in their respective interests to terminate Mr. Griggs' employment with the Debtors. The two parties have accordingly entered into a Separation Agreement which modifies the terms of Mr. Grigg's severance agreement under the Prepetition Agreements. The Debtors agree to pay Mr. Griggs $3,000,000, of which $1,000,000 would be paid within 10 days after the Effective Date and the remaining $2,000,000 in equal monthly instalments over a period of three years. In return, Mr. Griggs agrees to post- termination non-compete, non-solicitation and confidentiality requirements and agrees to waive all claims against the Debtors, except indemnity claims. Mr Griggs will also relinquish his restricted stock rights in IHS under the Prepetition Agreements. The Debtors believe that the non-compete, non-solicitation and no-disparagement clauses would help RoTech's new president, under difficult circumstances, to stabilize and expand RoTech business. While recognizing that the proposed $300,000 payment to Mr. Griggs is in excess of the cap under the Bankruptcy Code, the Debtors contend that the inclusion of these clauses critical to the stabilization of RoTech business justifies such payments. The Debtors tell Judge Walrath they believe entry into the Separation Agreement does not require court approval and it is out of an abundance of caution that they submit the application for the Court's approval. However, the United States Department of Health and Human Services and the Frauds Section of the Civil Division of the Department of Justice file objection with the Court because the proposed payment of $3,000,000 to Mr. Griggs exceeds the maximum cap under 11 U.S.C. section 502(b)(7). The Departments point out that section 502(b)(7) limits damages from employment contracts basically to one year's salary and reflects congressional intent to protect the bankruptcy estate from exorbitant damages from the acceleration of long term employment contracts. The Departments also argue that the payment fails to satisfy the requirements for an administrative claim under 11 U.S.C. section 503(b) because it is not an actual and necessary cost of preserving the Debtors' estates. With regard to the noncompete, nonsolicitation and no- disparagement clauses that the Debtors get in return, the Departments tell Judge Walrath the Mr. Griggs' existing employment agreement already contains explicit, detailed restrictive convenants regarding confidentiality, nonsolicitation, nonpirating and noncompetition. The Departments further reveal that, as evidenced by pending litigation, RoTech's employees, other than Mr. Griggs, may have already started competing businesses on company time and misappropriated confidential company documents and information. The Departments contend that as these occurrences provide grounds for terminating Mr. Griggs for cause, there is certainly little justification to pay him $3,000,000. (Integrated Health Bankruptcy News Issue 5; Bankruptcy Creditors' Services Inc.) INTERACTIVE NETWORK: Committee Contacts Shareholders ---------------------------------------------------- Shareholders of Interactive Network Inc. are receiving a communication from a committee calling itself the Interactive Network Independent Shareholders Committee. The stated purpose of the committee is to help make the management and Board of Directors of Interactive Network "smarter and better able to manage your company going forward". They state their concern over what they term the lack of experience and depth of the INNN team, and are seeking to add to the Board of Directors "some of the professional guidance which current management is apparently unable to afford or attract". The committee notes that shareholders own more stock than management, and states that "proper representation with the best people available" is deserved by their shared interests. The committee includes the following in its communication..... "You should be aware that: o This Board and management has never filed Federal or State income taxes (see page 14 of INNN's Proxy Statement dated June 5, 2000); o This Board and management has failed to disclose any fairness opinion in connection with the important issue of transferring INNN's assets to Twin Entertainment, or any exploration or consideration of other options; o This Board and management, to the Committee's knowledge, has not completed any successful financing, despite having virtually no funds to operate or develop strategic alternatives; o This Board and management has failed, in our view, to maintain an effective dialogue with shareholders, to the point of refusing to respond to major shareholders on the issue of expanding the Board. o This Board and management has even failed to nominate five directors to fill your Board, which is the minimum required by the company's bylaws. In short, we believe that INNN's Board and management is missing some of the necessary ingredients of responsible corporate stewardship. The Committee believes that it has become imperative to take decisive action to establish effective leadership. Accordingly, the Committee is seeking your support to elect five highly qualified nominees by increasing the size of INNN's Board from five to nine seats." The Committee beneficially owns more than 1,000,000 shares of Interactive Network stock, and states the belief that its interests are closely aligned with that of other shareholders. JUMER'S CASTLE: Plans To Sell Hotels To Pay Off Creditors ----------------------------------------------- From Peoria, Ill., the AP reports on June 26, 2000 that financially troubled Jumer's Castle Lodge Inc. hopes to sell some of its five hotels to pay off creditors and reorganize, Gary Rafool, the chain's bankruptcy attorney says. The bankruptcy filing covers five hotels in Peoria, Bloomington, Galesburg, Champaign-Urbana and Bettendorf, Iowa. It does not include Jumer's Casino Rock Island and all other independently held businesses owned by the Jumer family. "All five hotels are on the market," Rafool said. "We'll sell enough to pay the liens and then see what we have left for a reorganization." The company, which filed for Chapter 11 protection in October, blamed its financial situation on the cost of capital upgrades and weaker than expected revenue growth. KITTY HAWK: Motion To Require Calling of Shareholder Meeting ------------------------------------------------------------ M. Tom Christopher, a member of the Board of Directors and a creditor, files an emergency motion to require the calling of an annual shareholders' meeting. Christopher requests that the court hear its motion and order Kitty Hawk to hold its 2000 annual meeting on July 15, 2000 with a record date of June 29, 2000. LOGDIAN INC: Taps Eppich as Chief Financial Officer --------------------------------------------------- Lodgian, Inc., (NYSE: LOD), today announced the following recent actions and update on various Company matters: Lodgian has appointed Thomas R. Eppich as its new Chief Financial Officer to replace Kenneth R. Posner, who has resigned. Mr. Eppich is a hands-on, senior associate with the firm of Jay Alix & Associates and has substantial prior experience as Chief Financial Officer for several companies with issues similar to Lodgian's. In addition, Mr. Eppich possesses more than twenty-five years of public accounting, auditing and financial consulting experience. His immediate focus will be on the completion of the 1999 audit, improving the timeliness of Lodgian's financial reporting and improving the internal systems and processes associated with its financial reporting. Although the timing of the completion of the 1999 audit and the filing of the Form 10-K are dependent on the completion of various matters, management anticipates filing the 1999 Form 10-K no later than the end of July. As noted in previous communications, management still does not anticipate any material changes to the Company's financial position at December 31, 1999 or its net loss for the year ended December 31, 1999 from the Company's financial statements reported in the Form 8-K filed on May 1, 2000. Management continues to believe Lodgian has adequate cash and anticipates being able to maintain a cash position sufficient to fund its operating and debt service obligations. However, due to existing restrictions contained in the Company's senior subordinated notes, Lodgian has decided to exercise its right to defer the June 30th dividend payment due on the Convertible Redeemable Equity Structured Trust Securities ("CRESTS"). Finally, Morgan Stanley Dean Witter continues to work with Lodgian to evaluate strategic alternatives. Lodgian, Inc. owns or manages a portfolio of 128 hotels with approximately 24,000 rooms in 35 states and Canada. The hotels are primarily full service, providing food and beverage service, as well as meeting facilities. Substantially all of Lodgian's hotels are affiliated with nationally recognized hospitality brands such as Holiday Inn, Crowne Plaza, Marriott, Sheraton, Hilton, Doubletree and Westin. Lodgian's common shares are listed on the New York Stock Exchange under the symbol "LOD." Lodgian is a component of both the Russell 2000(R) Index, representing small cap stocks, and the Russell 3000(R) Index, representing the broader market. LUMENYTE INTERNATIONAL: Continued Disclosure Statement Hearing ----------------------------------------------------------------- The hearing for approval of the Amended Disclosure Statement of Lumenyte International Corporation has been continued to July 5, 2000 at 3:30 PM in Courtroom 6C of the US Bankruptcy Court located at 411 West Fourth St., Santa Ana, California. MALIBU ENTERTAINMENT WORLDWIDE: Stock Ownership Reported -------------------------------------------------------- Superstar Dragsters, Inc. beneficially owns 4,633,922 shares of the common stock of Malibu Entertainment Worldwide Inc., with sole voting and dispositive powers. The shares owned represent 8.1% of the outstanding shares of the company. MANHATTAN BAGEL: New World Recaptures 13 Buffalo-Area Stores ------------------------------------------------------------ New World Coffee-Manhattan Bagel, Inc. (Nasdaq: NWCI) announced that it has recaptured 13 franchised Manhattan Bagel stores in the Buffalo, NY market. The Company, which expects the acquisition to be accretive to earnings immediately, intends to sell the stores to new franchisees. Collectively, the Buffalo stores generated in excess of $6.2 million in sales during 1999. The stores' assets, previously owned by former Manhattan Bagel franchisees, were acquired pursuant to a Chapter 11 Plan of Reorganization, jointly proposed by New World and the debtor, and approved by the Bankruptcy Court from the Western District of New York. The Company also received non-competition agreements from the former franchisees' principals, who originally operated the stores under the Bagel Brothers name before becoming Manhattan Bagel franchisees in 1996. Following the recapture, all 13 locations will use bagel dough and cream cheese produced in Manhattan Bagel's Eatontown, NJ factory, with the bagels boiled and freshly baked at the stores throughout the day. Additionally, all of the stores will convert to a new proprietary premium coffee program developed at New World's plant in Branford, CT. "Now that this favorable settlement has been completed, we look forward to re-franchising the stores and resuming our efforts to increase our market share in Buffalo and the surrounding areas," said Ramin Kamfar, New World chairman and CEO. "The Buffalo area has been a strong market for Manhattan Bagel, as underscored by the strong sales this group of stores has experienced since the first one opened 24 years ago." New World Coffee-Manhattan Bagel, Inc. currently franchises, licenses or owns stores under its four brands in 28 states and Washington, D.C. The Company is vertically integrated in bagel dough and cream cheese manufacturing, and coffee roasting, with plants in New Jersey, California and Connecticut. NEWSTAR MEDIA: Seeks Chapter 11 Protection ------------------------------------------ NewStar Media Inc. (OTC Bulletin Board: NWST) announced that it has filed a voluntary petition for Chapter 11 relief in the United States Bankruptcy Court for the Central District of California. Voluntary petitions and requests for joint administration were also filed on behalf of seven subsidiaries and affiliates of the Company. The Company's publishing division, which won Audie awards for one Audio Literature and five Dove Audio audio books at the Audio Publishers Association 5th Annual "Audie Awards" earlier this month, has had to substantially curtail operations due, as previously announced, to the severe shortage of working capital. The Company's bank, Chase, has consented to a limited use of cash collateral pending further negotiation of debtor-in-possession ("DIP") financing. The Company, in consultation with Chase, has engaged Crossroads LLC and J.D. Publishing, Ltd. to assist the Company in preparing a strategy to maximize value for the Company's businesses. The Company has not curtailed the operations of its television production and film and television distribution businesses. NewStar Media Inc. is a diversified entertainment company engaged in the publication of audio books, the distribution of audio books on its Internet site, AudioUniverse.com, and the production and distribution of television programming. NEXAR TECHNOLOGIES: Meeting of Creditors ---------------------------------------- A bankruptcy case concerning Nexar Technologies, Inc. was originally filed under Chapter 11 on December 17, 1998 and was converted to a case under Chapter 7 on June 19, 2000. A meeting of creditors will be held on July 17, 2000 at 1:00 PM, Office of the US Trustee, Franklin Square Tower, 600 Main Street, Suite 202, Worcester MA. PETSEC ENERGY LTD: Agreement To Sell Petsec Energy Inc. ------------------------------------------------------- Petsec Energy Ltd.'s wholly owned USA subsidiary, Petsec Energy Inc., has reached agreement with the unsecured creditors committee to sell Petsec Energy Inc. or all of its assets. The unsecured creditors committee was appointed following the Chapter 11 filing by Petsec Energy Inc. on April 13, 2000. Subject to approval by the Bankruptcy Court presiding over Petsec Energy Inc.'s Chapter 11 proceedings, Houlihan Lokey Howard & Zukin Capital, L.P. will be managing the divestiture process for Petsec Energy Inc. and the unsecured creditors committee. Houlihan Lokey will be distributing an information memorandum describing the assets of Petsec Energy Inc. to potential interested parties. All sale transactions will be subject to the approval of the Bankruptcy Court. Petsec Energy Inc. anticipates filing a Plan of Reorganisation which contemplates an agreed distribution of the sale proceeds to the creditors, the equity owner and certain of Petsec Energy Inc.'s senior management team in the USA. A copy of the term sheet which sets out the contemplated distribution may be viewed at http://www.sec.gov/cgi-bin/srch-edgar?0000950129-00-003255 on the Internet, free of charge. Petsec is an independent oil and gas exploration and production company operating in the shallow waters of the US Gulf of Mexico. The company's corporate office is in Sydney, Australia. Field operations are managed in the US from Lafayette, Louisiana. PIXELON: Ousts Executives, Plans To File Chapter 11 --------------------------------------------------- The Los Angeles Times reports on June 27, 2000 that the board of directors at Pixelon Corp. has forced out the company's management team and agreed to file for bankruptcy protection. According to the article, Pixelon's board met last week and ousted acting Chief Executive Paul Ward and at least one other top manager, according to company sources. Peter Foley, an executive with Unified Financial Services in New York, was named interim chief executive. "Management is trying to raise money and kick-start the company," Pixelon's bankruptcy attorney, Marc Winthrop of Winthrop Couchot in Newport Beach was quoted as saying. "I know that the company had lined up investors, but that fell through with the bankruptcy filing." Pixelon officials had tried to pull together a $ 70-million offer in January by New York Internet broadcaster On2.com, according to reports published in the Industry Standard, a "new-economy" magazine. But the deal fell through, and Pixelon eventually fired most of its remaining employees. The management shake-up comes just months after Pixelon burst onto the Internet scene last fall. Celebrating its launch, company founder Michael Adam Fenne used at least $ 10 million of the $ 23 million he had raised from investors to throw a lavish Las Vegas party hosted by comedian David Spade. It featured 10 performers, including the Who, Natalie Cole and Tony Bennett. In April, authorities in Virginia announced that Fenne's real name was David Kim Stanley and that he was a convicted felon who had bilked people out of hundreds of thousands of dollars and then failed to appear in court. Stanley had been on Virginia's most-wanted list for three years. Stanley surrendered to Virginia state police and is being held in a Wise, Va., jail. Adding to the company's troubles, three Pixelon creditors filed a petition in U.S. Bankruptcy Court in Santa Ana last month in an effort to force the company into bankruptcy. Pixelon executives initially said they would fight the petition. But given the management change, the company said it now plans to convert the involuntary Chapter 7 liquidation petition into a voluntary Chapter 11 bankruptcy by July 17. Pixelon owes more than $ 550,000 to the three companies that tried to force it into bankruptcy. PRIME RETAIL: Executes Term Sheets for $110 Million Financing ------------------------------------------------------------- Prime Retail, Inc. (NYSE: PRT, PRT.PRA, PRT.PRB) announced that it has reached agreement with Lehman Brothers to obtain up to $110 million in financing. The proposed financing would consist of (i) a $90 million loan partially secured by mortgages on, and pledges of equity interests in, certain outlet centers, with the remainder unsecured, and (ii) a $20 million mortgage loan on the Company's outlet center in Puerto Rico which is scheduled to formally open in July. The mezzanine loan will be LIBOR based, be for a term of two years (with a one-year extension), require fixed amortization each month and be pre-payable at any time. In addition, Lehman Brothers will be granted warrants to purchase common stock of the Company. The Puerto Rico mortgage loan will also be LIBOR based, be for a one-year term and require no amortization during the term. The Company also announced that it has retained Lehman Brothers as its financial advisor. The Company chose Lehman Brothers because it is a recognized leader in providing strategic advice to real estate companies. Additionally, they are one of the largest arrangers and providers of debt and equity to the real estate industry. "The addition of Lehman Brothers to our team will strengthen our efforts to restructure our debt and reduce our leverage in order to financially stabilize the Company and ultimately develop and implement strategies that enhance shareholder value," said Glenn D. Reschke, president and chief executive officer of the Company. The proceeds from these loans will be used to pay off up to $84 million of short term debt, with the remainder to be used for general corporate purposes, including the funding of programs to attract and retain tenants through increased marketing and capital improvements. Simultaneous with the completion of the proposed financing, the Company intends to modify the covenants under an existing debt obligation and has been working with Lehman Brothers and the existing lender to arrange for the necessary modifications. At the time of funding the Company expects to be in full compliance with all of its debt obligations. Closing on the loans from Lehman Brothers is subject to customary conditions as well as the other lender's agreement to the proposed loan modifications. The Company expects that the financing will be completed within the next 30-60 days. QUAKER COAL: Whayne Supply Owed $3.78 Million By Branham & Baker ---------------------------------------------------------------- Whayne Supply Co. is owed $3.78 million by Quaker Coal subsidiary Branham & Baker Coal, making it B&B's largest unsecured creditor and perhaps the single largest unsecured creditor in the entire Quaker bankruptcy case. Quaker and each of its 19 subsidiaries filed Chapter 11 petitions in U.S. Bankruptcy Court in Lexington on June 16. However, there apparently was not a schedule of unsecured creditors filed for every subsidiary, so it is not clear if there may be unsecured debts larger than the amount owed to Whayne. Other major unsecured claims against Branham & Baker include: Orica USA, $ 1.95 million; Williamson Oil & Tire, $804,000; Brandeis Machinery & Supply, $ 597,000; Associated Benefits, $554,000; Mining Materials Co., $381,000; Mining Technologies, $303,000; Action Petroleum, $300,000; CSX Transportation, $ 277,000; and Maxim Rebuild, $182,000. Quaker subsidiary Branham & Baker Underground Corp. owes $650,000 to Banks-Miller Supply, $450,000 to Joy Mining Machinery, $422,000 to Excel Mining Systems, $290,000 to M.J. Electric Enterprise, $221,000 to Bill's Electronics, $ 137,000 to Kenny Smith Timber and $132,000 to Rogers Petroleum Services. Another Quaker company, Panther Land Corp., lists Big Sandy Co., a land holding company, as its top unsecured creditor, claiming $1.18 million. This debt is for unpaid royalties. It also owes the Pike County, Ky., Circuit Court $ 133,750. Wyoming Pocahontas Land Co. owes $884,000 to RAG American Coal, $425,000 to Mine Managers & Associates, $257,000 to 4-Way Trucking, $236,000 to CSX Transportation and $145,000 to Walker Machinery. Still another subsidiary, Harrison Mining Corp., reports it owes $473,000 to Boich Group, $400,000 to Excel Mining Systems, $327,000 to Cravat Coal, $252,000 to Wheeling & Lake Erie Railway, $230,000 to Testa Machine Co., $192,000 to Ohio Central Railroad, $182,000 to Rothenbuhler & Sons, $177,000 to Joy Mining Machinery, $155,000 to Fosroc and $118,000 to Black Hills Coal Network. QUANALYZE OIL: Meeting of Creditors ----------------------------------- A bankruptcy case concerning Quanalyze Oil & Gas Corporation Inc. was originally filed under Chapter 11 on March 6, 2000 and was converted to a case under Chapter 7 on June 20, 2000. A meeting of creditors will be held on July 18, 2000 at 1:30 PM, San Antonio Room 333, US Post Office Blgg., 615 E. Houston St., San Antonio, TX 78205. ROBERDS: Notice of Rejection of Leases -------------------------------------- The debtor, Roberds, Inc. provides notice of its rejection of its lease agreements effective June 30, 2000 with respect5 to the following real property: 6875 Best Friend Road Doraville, Georgia 2150 Boggs Road Bldg. 6 Duluth, Georgia SAFETY COMPONENTS: Hearing To Consider Disclosure Statement ----------------------------------------------------------- A hearing will be held on July 19,2000 at 12:30 PM before the Honorable Joseph J. Farnan, US district Judge, in the United states District Court for the District of Delaware, J. Caleb Boggs Federal Building, Courtroom 6A, 844 King Street, Wilmington, DE to consider the adequacy of the information ctained in the Disclosure Statement of Safety Components International, inc., et al. SAXTON INC: Auditor Expresses Doubt On Saxton's Viability --------------------------------------------------------- The Las Vegas Review reports that an independent auditor, whose name was not available, questioned Saxton Inc.'s ability to continue as a going concern. The auditor's report in May showed that because of the cash flow shortage, Saxton's construction slowed during the last quarter of 1999, ending operations in Nevada and Utah in this year's first quarter. The Las Vegas- based homebuilder lost $2.4 million for the three-month period ended March 31 and was delisted from Nasdaq on that same month. Saxton has until June 28 to request a review of the delisting. SINGER: Disclosure Statement Approved ------------------------------------- The Honorable Burton R. Lifland of the U.S. Bankruptcy Court, Southern District of New York approved the amended Disclosure Statement of Singer Co. on June 22, 2000. SONY CORP.: Expected to post huge loss -------------------------------------- Electronics giant Sony will suffer a huge loss in the first quarter to June as it writes off cumulative advertising costs under the new United States accounting standard, according to a newspaper report. Sony will book 110 billion yen (about HK$8.19 billion) in group net loss in the quarter ending on June 30, Nihon Keizai Shimbun reported. The company will write off 95 billion yen worth of past promotional expenses accumulated in the movie business, which were previously recognized as part of its assets, the daily said. Sony will also revise down its net profit projection for the full year to March next year from 120 billion yen to 10 billion yen. The accounting standard will affect earnings of motion picture and television program producers and distributors after December 16. Sony previously estimated it would need to book US$950 million worth of one-time business costs. (South China Morning Post 26-Jun-2000) SUPERIOR TOUR: Case Summary and 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Superior Tour Services, Inc. a Nevada Corporation 4740 S. Valley View #200 Las Vegas, NV 89103 Petition Date: June 23, 2000 Chapter 11 Court: District of Nevada Bankruptcy Case No.: 00-14651 Judge: Robert C. Jones Debtor's Counsel: Philip K. Goldstein 609 S & 7th St Las Vegas, NV 89101 Tel:(702) 388-2004 Total Assets: $ 10 million over Total Debts: $ 10 million over 20 Largest Unsecured Creditors Internal Revenue Service Attn: Special Procedures 4750 West Oakey Blvd. Las Vegas, NV 89102 Taxes $ 700,000 ICP, Inc. Arrearage on Executory Contract $ 82,000 Coach USA Arrearage on Executory Contract $ 31,000 Transport Tires Arrearage on Executory Contract $ 30,314 Redburn Tire Company Arrearage on Executory Contract $ 19,816 Printing Copies and Arrearage on More (PCM) Executory Contract $ 9,607 Travelways Arrearage on Executory Contract $ 9,500 Cintas Corporation #59 Arrearage on Executory Contract $ 8,292 Quality Towing Arrearage on Executory Contract $ 6,200 Brady Industries Arrearage on Executory Contract $ 5,900 Brown Evans Arrearage on Executory Contract $ 4,065 Novus Windshield Repair Arrearage on Executory Contract $ 2,175 Trucks Parts Arrearage on and Entertainment Executory Contract $ 2,124 W.W. Grainger, Inc. Arrearage on Executory Contract $ 2,000 Unifirst Corporation Arrearage on Executory Contract $ 1,700 Smith Systems Arrearage on Executory Contract $ 1,059 RTSI Reno Tahoe Arrearage on Specialty Inc. Executory Contract $ 875 Bolt Center Arrearage on Executory Contract $ 875 Intermountain Coach Inc Arrearage on Executory Contract $ 354 Knowles Publishing Inc Arrearage on Executory Contract $ 200 UNIFORET INC: S&P Raises Notes To CCC-Minus ------------------------------------------- Standard & Poor's raised its corporate credit rating on Uniforet Inc. and its senior secured rating on the company's US$125 million 11.125% notes due 2006 to triple-'C'-minus from 'D'. After a recent repurchase, there is US$60.4 million of notes currently outstanding. At the same time, the ratings were placed on CreditWatch with negative implications. The rating action follows the restructuring of the company's debt, which consisted of the following: -- The payment on June 14, 2000, of interest due April 15, 2000; -- The repurchase of US$64.6 million of the rated notes; and -- The repurchase of C$13.3 million of unrated debentures. As part of the restructuring, Uniforet, a small Montreal, Que.- based pulp, paper, and lumber producer, received waivers from remaining bondholders that rescind acceleration of the notes. As such, bondholders may not seek to enforce their security as a result of the April 15 default. The current ratings reflect the uncertainty associated with the company's ability to make its Oct. 15, 2000, interest payment on the rated notes. The company is currently evaluating its strategic, operational, and financial alternatives, and a decision is expected before the next interest payment is due. Severe operational difficulties--as evidenced by a C$80.2 million write-down of Uniforet's Tripap uncoated paper mill--combined with the company's heavy debt burden will continue to constrain cash flow generation and jeopardise further debt service payments, Standard & Poor's said. UNITED COMPANIES FINANCIAL: Hearing to Consider Sale Motion ----------------------------------------------------------------- Pursuant to a certain agreement, the debtors have agreed to sell and the EMC Parties (as therein defined) have agreed to purchase the debtors' portfolio of mortgage loans and the real properties acquired as a result of the ownership of mortgage loans through foreclosure or otherwise. The purchase price will be approximately $318 million, subject to adjustment. A hearing to consider the Sale Motion and any and all Competing Offers will be held on August 15, 200 at 9:30 AM before the Honorable Mary F. Walrath, District of Delaware. At the same time, the court will consider the sale motion for the mortgage servicing operations of the debtors to the EMC parties for an estimated $436 million, also subject to competing offers. VERDANT BRANDS: Engages Investment Banking Firm ----------------------------------------------- Verdant Brands has retained the services of the investment banking firm of Goldsmith, Agio, Helms, & Lynner, Ltd., to assist the Company in pursuing the sale of its retail business. "Despite the operational difficulties we have experienced, our retail brands are strong in the marketplace," said Bruce Mallory, President and COO. "In particular, the Safer brand is in its second consecutive season of double-digit growth. Because the Company currently has inadequate capital to invest in the brand- building activities and infrastructure that this business requires to operate successfully, a sale of the retail portion of Verdant's business is being explored as a way of maximizing shareholder value." The Company also announces that it has received a default notice from GE Capital Credit as a result of loan covenant violations under its credit facility with GE Capital Credit. The Company is working with GE Capital Credit to address the financial problems and correct the defaults. The Company previously announced efforts to sell its commercial dealer business. Any cash generated from the sale of these business segments will be used to pay down the GE Capital debt and reduce the Company's ongoing working capital requirements. Verdant has pursued a strategy of growth through merger and acquisition since 1996, joining four businesses together and increasing sales revenues from approximately $15 million to $75 million in 1999. While successful in building the revenue base, the complexity of the businesses acquired, combined with decreased demand for some product lines because of industry changes and unfavorable weather patterns, has led to ongoing losses and cash flow problems. To address these difficulties, in May 2000 the Company engaged the services of The Platinum Group, a Minneapolis-based turnaround management company. Platinum has worked closely with Verdant's management and Board to assess the Company's businesses and define a strategy for addressing its financial problems and improving shareholder value. WORLDCLASS PROCESSING: Business and Assets Acquired --------------------------------------------------- Samuel Manu-Tech Inc. (SMT-TSE) announces that its Samuel Steel Pickling Group has acquired the business and assets of WorldClass Processing, Inc. (WorldClass). WorldClass, based in Ambridge, Pennsylvania (just north of Pittsburgh) is a toll-processor of hot rolled coils of carbon and stainless steel. Its capabilities include pickling, tempering, oiling, lube coating, slitting and edge trimming with an annual pickling capacity of 450,000 tons. In addition, it has a separate slitting line capable of processing 150,000 tons per annum. WorldClass has been operating as a debtor-in-possession since December 1998 when it filed for Chapter 11 Bankruptcy protection. The business will operate under the name of: WorldClass Processing Corp. A Division of Samuel Manu-Tech (U.S.) Inc. The Samuel Steel Pickling Group operates eight Push-Pull Pickling Lines in North America while its Technology Division designs and markets patented systems worldwide. Samuel Manu-Tech Inc. produces a wide range of steel and related industrial products and services from locations in Canada, the United States and the United Kingdom. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. Debra Brennan, Yvonne L. Metzler, Edem Alfeche and Ronald Ladia, Editors. Copyright 2000. All rights reserved. ISSN 1520-9474. 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