/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/000629.MBXT R O U B L E D C O M P A N Y R E P O R T E R Thursday, June 29, 2000, Vol. 4, No. 127 Headlines ACME METALS: Seek Extension of Exclusivity ACTION INDUSTRIES: Filing of Plan and Disclosure Statement AUTOINFO INC: Preliminary Approval of Disclosure Statement BAPTIST FOUNDATION: Opposes Reconstitution of Committee BIG PARTY: Case Summary and 20 Largest Unsecured Creditors COLONIAL DOWNS: Racetrack To Change Name CONSECO: Reports Name Wendt as Next CEO CONTIFINANCIAL: Court Allows Sale of Servicing Platform DISTRICT MEMORIAL: Case Summary and 20 Largest Creditors DIAMOND DISMANTLING: Files For Chapter 11 Protection DYNACORE HOLDINGS: Reaches Agreement With Committee FLOORING AMERICA: NYSE Suspends Trading, Seeks To Delist Issues GEOTELE.COM: Hearing to Approve Disclosure Statement GOSS GRAPHIC: Entry of Final Decree GRANITE BROADCASTING: Moody's Revises Ratings Outlook To Negative GST TELECOM: Toronto Exchange Suspends Trading of Shares GULF STATES STEEL: Bankruptcy Administrator Lists Objections INTEGRATED HEALTH: Key Employee Retention Program IVYNET CORP: Certificate of Full Performance From Trustee JOAN AND DAVID: Rejection of Real Property Leases JUST FOR FEET: Grant & Eisenhofer Announces Class Action LEVITZ FURNITURE: Injunction On Agreement with Seaman Furniture MARTIN COLOR-FI: Announces Confirmation of Plan PATHMARK STORES: Merger Failure Wounds Big Investors PLANET HOLLYWOOD: Shaq Joins The Team PREMIER LASER SYSTEMS: Bar Date Set For August 25, 2000 SAFETY-KLEEN: U.S. Trustee's Appointment to Committee STAGE STORES: Announces Final Court Approval of DIP Financing SYSTEM SOFTWARE: Meeting of Creditors TOKYO SOWA BANK: To Be Sold to Ross-Led Fund TREESOURCE INDUSTRIES: Seeks Approval To Post $4MM As Surety VISION TWENTY-ONE: Largo Closing Still A Go ********* ACME METALS: Seek Extension of Exclusivity ------------------------------------------ The debtors, Acme Metals Incorporated, seek an order further extending the debtors' exclusive periods within which the debtors may file a plan of reorganization and solicit acceptances thereto. The debtors' exclusive periods have been previously extended six times. The debtors seek an extension of their Exclusive Proposal Period and Exclusive Solicitation Period for approximately 90 days, to and including September 29, 2000 and November 29, 2000 respectively. The debtors have received a preliminary proposal from a third party to acquire the debtors' steelmaking operations. The debtors believe that the proposal should be pursued and developed. In addition the debtors believe that a decision by the Emregency Steel Guarantee Loan Board regarding proposed exit financing with Citicorp USA is imminent. Also during the previous extensions of exclusive periods, active discussions occurred between Alpha Tube and the recently6 reconstituted Alpha Committee. Agreement in principle has been reached regarding most of the issues affecting treatment of the allowed unsecured claims of Alpha Tube's trade creditors under a joint plan of reorganization. The only unresolved material economic issue is the rate of post-petition interest which would apply to Alpha Tube trade creditors' claims. The debtors believe that an agreement should be reached in the near future. ACTION INDUSTRIES: Filing of Plan and Disclosure Statement ---------------------------------------------------------- The Official Committee of Unsecured creditors of Action Industries Inc. filed a plan of reorganization for Action Industries Inc. and General Vision Services, Inc., debtor, on June 16, 2000. The Bankruptcy Court for the Southern District of New York has scheduled a hearing for July 11, 2-00 at 10:00 AM to consider whether an order should be entered approving the Disclosure Statement. AUTOINFO INC: Preliminary Approval of Disclosure Statement ---------------------------------------------------------- AutoInfo, Inc. (OTCBB:AUTO) announced that it has received the preliminary approval of its Disclosure Statement by the Bankruptcy Court at a hearing held on Tuesday June 27, 2000. Final approval is subject to the furnishing of certain additional information and the making of limited modifications. The Company intends to make the necessary modifications and seek the appropriate authorizations to proceed to solicit votes concerning its Plan of Reorganization within the next two weeks. The Company anticipates that a hearing to consider confirmation of the Plan of Reorganization will be scheduled during the first two weeks of August 2000. The Plan of Reorganization provides, among other things, for the issuance of approximately 9,540,000 shares of Common Stock to AutoInfo's existing creditors. Existing shareholders hold approximately 7,757,000 shares of Common Stock. On Thursday, June 22, 2000, AutoInfo announced that it had entered into an agreement to acquire Sunteck Transport Co., Inc. ("Sunteck"), a full service third party transportation logistics provider, and it's wholly owned subsidiary, Ubidfreight.com, in exchange, upon closing, for 10 million shares of AutoInfo Common Stock. William Wunderlich, President and Chief Financial Officer of AutoInfo stated, "now that we have received Bankruptcy Court approval of our Disclosure Statement which includes the Sunteck transaction, we can move expeditiously to the confirmation of our reorganization plan." Mr. Wunderlich added, "we will finalize our business plan and begin to seek out potential investors enabling us to consummate the merger." All documents on file in this case, Case No. 00-10368, including the Merger Agreement and the revised Disclosure Statement and Plan of Reorganization can be viewed on the Bankruptcy Court's Internet site as follows: http://ecf.nysb.uscourts.gov/index.html BAPTIST FOUNDATION: Opposes Reconstitution of Committee ------------------------------------------------------- The debtors, Baptist Foundation of Arizona, Inc., ask that the court deny the pending applications to reconstitute the Collateralized Investors Committee. The debtors claim that the current members of the Committee adequately represent all allegedly collateralized investors. The debtors claim that the court order establishing the committee did not limit committee membership to only those investors that owned a 100% of alleged secured instruments. The debtors say that they have not observed conduct on the part of the members that would indicate that any member is not discharging their fiduciary duties as a member. The debtors state that the committee was formed for the sole purpose of representing allegedly collateralized investors in the determination of whether collateralized and unsecured investors should be treated equally. The Committee was formed to participate and litigate the interests of the allegedly secured investors in connection with an anticipated adversary proceeding brought by the debtors. The anticipated adversary proceeding will be brought as a non-opt out defendant class action. A defendant non-opt class action is the only vehicle that can bind all allegedly secured investors through a single action and prevent re-litigation of the same issues by multiple individual investors. The named individual defendants in the anticipated adversary proceeding will be members of the committee who hold only allegedly secured investments. Thus, the named defendants from the committee will adequately represent all allegedly collateralized investors in the class proceedings under Rule 7023. The debtors state that the current membership of the Committee is sufficient under the bankruptcy code and sufficient for the anticipated adversary proceedings. BIG PARTY: Case Summary and 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: The Big Party Corporation 1457 VFW Parkway Boston, MA 02132 Petition Date: June 23, 2000 Chapter 11 Court: District of Delaware Bankruptcy Case No.: 00-02852 Judge: Gregory M. Sleet Debtor's Counsel: Laura Davis Jones Pachulski, Stang, Ziehl, Young and Jones 919 North Market Street, 16th Floor PO Box 8705 Wilmington, DE 19899-8705 Tel:(302) 652-4100 Total Assets: $ 10 million above Total Debts: $ 10 million above 20 Largest Unsecured Creditors Amscan PO Box 71603 Chicago, IL 60694 $ 1,728,094 Unisource Worldwide Inc. PO Box 360051 Northeast Lockbox Pittsburgh, PA 15250 $ 510,278 Unique Industries, Inc. 2400 S. Weccacoe Avenue Philadelphia, PA 19148 $ 402,187 Am Source Inc. PO Box 29130 New York, NY 10087 $ 309,922 Creative Expressions Group, Inc. PO Box 642185 Pittsburgh, PA 15264 $ 279,042 Merriam Graves Dracut Ind. $ 209,359 Carlton Cards $ 199,575 Hallmark Marketing Corp. $ 156,385 Converting Inc. $ 139,183 Worthington Cylinder Corp. $ 124,550 American Greetings $ 116,208 Berwick Industries, Inc. $ 110,962 U.S. Baloon $ 109,921 Cindus Corp. $ 93,051 Medford Associates Ltd. Ptshp $ 88,668 Rhodes Inc. $ 85,284 ADVO $ 79,916 Kendall $ 75,778 Independent Packaging Inc. $ 73,989 Fun Express $ 72,063 COLONIAL DOWNS: Racetrack To Change Name ----------------------------------------- The Daily Press reports on June 22, 2000 that Colonial Downs Holdings Inc.'s coming annual meeting that will be held on Aug. 2, shareholders will be asked to take off "Downs" from its corporate name making it Colonial Holdings Inc. The move will serve as a sign of interest for the company's desire to delve into other businesses, according to company president Ian M. Stewart. "We've always been looking at other opportunities for the last couple of years because (of) the difficulty of expanding in Virginia," Stewart relates. Also, one of the company's largest shareholders and CEO, Jeffrey Jacobs whose family has personally given their guarantee will take care of Colonial Downs' existing bank debt. CONSECO: Reports Name Wendt as Next CEO --------------------------------------- The Wall Street Journal reported that the company's board will soon meet to approve former General Electric Co. executive Gary C. Wendt as Conseco's new chief executive officer. Conseco shares jumped 30 percent, or more than $1.87, to more than $8 in heavy early trading Wednesday on the New York Stock Exchange. Speculation Tuesday that Wendt would replace founder and former chief executive Stephen Hilbert helped lift Conseco shares close 14 percent, or 81 cents, higher on the day at $6.50. GE Capital, the company's finance division which Wendt formerly headed, is GE's largest and most profitable subsidiary. However, Colin Devine, an analyst with Salomon Smith Barney in New York, said in a research report that Conseco faces major obstacles, including about $1 billion in debt scheduled to be repaid by the end of September. He also said "there is no certainty" Conseco will succeed in selling Conseco Finance, the consumer finance business put up for sale in March. A Conseco spokesman declined to comment on the newspaper's report Wednesday, repeating the company's public plans to appoint a new chief executive by the third quarter. "In the stockholders meeting (Friday), we mapped out strategy and believe the financial resources we have at our disposal are adequate to meet our financial needs," said Jim Rosensteele, spokesman for the Carmel-based Conseco. Dow Jones and Bloomberg News also identified Wendt as a contender for the post. CONTIFINANCIAL: Court Allows Sale of Servicing Platform ------------------------------------------------------- ContiFinancial Corporation (OTCBB:CFNI) announced on June 27, 2000 that it has received approval from the United States Bankruptcy Court, Southern District of New York, to sell its ContiMortgage servicing platform and rights to Fairbanks Capital Corp. ("Fairbanks"). The two companies expect to complete the transaction within 30 to 45 days. ContiFinancial had reached agreement to sell the unit to Fairbanks in early May, with the stipulation that court approval would be necessary under Section 363 of the Bankruptcy Code. Alan Fishman, CEO of ContiFinancial said, "We are extremely pleased that the Court has allowed this transaction to proceed. It represents the best possible resolution for our creditors and for our loyal employees who have worked so hard during some very trying times." Fairbanks has indicated that it expects to expand the Hatboro, Pa.-based servicing operation of ContiMortgage, which currently employs over 400 people. Fairbanks is one of the highest rated specialty servicers in the country with over ten years of residential real estate loss mitigation experience. Fairbanks is headquartered in Salt Lake City, Utah. Its investors include FSA Portfolio Management, Inc., Nomura Principal Capital Group Holding Trust, PMI Mortgage Insurance Co., GE Equity and FGIC Services, Inc. ContiFinancial Corporation is a financial services company with headquarters in New York City. DISTRICT MEMORIAL: Case Summary and 20 Largest Creditors -------------------------------------------------------- Debtor: District Memorial Hospital 415 Whitaker Lane Andrews, NC 28901 Type of Business: Provider of medical services for Andrews, NC and surrounding areas. Petition Date: June 6, 2000 Chapter 11 Court: Western District of North Carolina Bankruptcy Case No.: 00-20069 Debtor's Counsel: T. Bentley Leonard Leonard & Biggers, PA 274 Merrimon Avenue Ashville, NC 28801 Tel:(828) 255-0456 Total Assets: $ 7,333,787 Total Debts: $ 4,157,896 20 Largest Unsecured Creditors General Medical Corp $ 129,378 Smith Drug Company $ 118,625 Mission/St. Josephs HCS $ 100,000 Division of Medical Assistance $ 81,140 Quorom Health Resources $ 77,873 Midwest Surgical $ 58,873 Services Inc. (disputed) $ 5,000 (secured) Alliance Imaging Inc $ 53,075 Internal Revenue Service $ 51,774 Baxter IV Systems $ 46,631 Mary V Kilpatrick $ 42,039 Abbot Labs $ 39,996 Alliant Foodservice Inc $ 37,953 Jane M Carver $ 35,541 Allan Wood $ 33,591 Smithkline Beecham Clinical $ 30,059 Haywood County Hospital $ 29,182 Putnam Investment Co $ 27,650 Lawayne & Arlene LaFontsee $ 26,283 Peter & Judy Berglund $ 24,233 Allegiance Healthcare $ 23,712 DIAMOND DISMANTLING: Files For Chapter 11 Protection ---------------------------------------------------- According to an article in Crain's Detroit Business on June 26,2000, Detroit-based Diamond Dismantling Inc. filed for Chapter 11 protection this month in U.S. Bankruptcy Court in Detroit as it litigates two court cases. The article reports that the demolition company's resume includes the 1997 demolition of the 17-story Wolverine Hotel downtown, residential demolitions, environmental dirt hauling and plant stripouts. The company has worked in several different states. Diamond President and CEO Gerald Fodale said the June 13 bankruptcy filing was a culmination of three events that hurt the business this past year. First, Diamond and the city of Detroit were named in a lawsuit by Bloomfield Hills-based Oppmac Inc. Oppmac claims it holds a $1.7 million mortgage on the 35-acre Packard Motor Car Co. site on East Grand Boulevard and that the city foreclosed for back taxes without notifying the company. Diamond's demolition and redevelopment work was halted last year while the case is pending. The case is ongoing. Next, Fodale said, Diamond landed a contract in Philadelphia that went sour because of what he described as an "unfriendly labor market." The third blow came to Diamond, Fodale said, when it faced a lawsuit from Clinton Township construction company John Carlo Inc. John Carlo won a summary judgment for $1.2 million in Macomb County Circuit Court stemming from a contract Carlo had with Diamond for hauling sediment. Fodale said he filed an appeal about a month ago with the Michigan Court of Appeals. Fodale said Diamond employees will continue to operate the business. He said he has been meeting with creditors and trade unions to update them on the situation. Diamond has estimated assets of $3.5 million and liabilities of $5 million, according to the bankruptcy petition. Unsecured creditors with the largest claims include John Carlo; Kelly Tractor of Miami, Fla., owed $280,393; Browning-Ferris Industries of Northville, owed $247,125; and Carleton Farms Landfill in New Boston, owed $180,106. Fodale said the company had about $28 million in sales in 1998 and $15 million in sales in 1999. DYNACORE HOLDINGS: Reaches Agreement With Committee --------------------------------------------------- Dynacore Holdings Corporation (formerly Datapoint Corporation (OTCBB:DTPTQ)) announced on June 27, 2000 that an agreement in principle had been reached with the Official Unsecured Creditors' Committee appointed in the Corporation's Chapter 11 case pending in the United States Bankruptcy Court for the District of Delaware. (Case No. 00-1853(PJW)). The agreement, which is subject to, among other things, filing of a Plan of Reorganization, vote of creditors and approval by the Bankruptcy Court, provides for the distribution of approximately $34.8 million in cash to Debenture holders and other unsecured creditors from the proceeds of the previously approved sale of Dynacore's European operations and certain U.S. assets to Datapoint NewCo I Limited. Such cash distribution is expected to be not less than 60% of the face value of the outstanding 8 7/8% Convertible Subordinated Debentures due 2006 (the "Debentures"), excluding accrued interest. At the time of confirmation of the Plan of Reorganization, Dynacore is expected to have remaining working capital of approximately $4 million after fees, expenses and certain escrow items required in the sale. Dynacore will have no debt at that time. The agreement provides that when the reorganized Dynacore emerges from Chapter 11: (i) Debenture holders and other unsecured creditors will receive 25% of the equity of the reorganized corporation, 3 out of 7 seats on the Board of Directors, and 40% of a Patent Litigation Trust, to be formed to pursue the Corporation's patent litigation and otherwise to defend them, (ii) current Exchangeable Preferred Shareholders will receive 23.5% of the equity of the reorganized corporation, and 3.5% of the Patent Litigation Trust, (iii) current Common Shareholders will receive 41.5% of the equity of the reorganized corporation; and (iv) current officer management will receive 10% of the equity of the reorganized corporation as part of a settlement of certain officer administrative claims that include contract cancellation and other contractual entitlements. The Plan of Reorganization of the Corporation is expected to be filed within 30 days. Pursuant to the agreement, with respect to its remaining 56.5% interest in the Patent Litigation Trust, Dynacore will distribute to its post-bankruptcy shareholders 75% of the first $100 million of net proceeds received, if any, after adjustment for corporate tax. The Corporation also announced today that it had changed its fiscal year end to December 31. The sale of its European Operations is consistent with the direction of the Corporation to focus its efforts and resources on acquiring, developing and marketing software with Internet and E-commerce applications. The previously acquired Corebyte Networks(tm) product family (www.corebyte.com), highlights this effort. The Corebyte subsidiary has developed an intelligent browser-based communications networking system. With a single interface, users of Corebyte Networks(tm) products directly access every application necessary to manage their enterprise from basic E-mail to advanced group computing tools. Corebyte Networks(tm) products users seamlessly share and exchange valuable information, selectively and securely, within their networked community and across enterprises via the Internet. Companies that standardize their network on Corebyte Networks(tm) products gain all the benefits of the Internet and eliminate the fear of obsolescence. FLOORING AMERICA: NYSE Suspends Trading, Seeks To Delist Issues --------------------------------------------------------------- The New York Stock Exchange suspended trading of Flooring America Inc.'s (FRA) common shares and 9 1/4% notes due Oct. 15, 2007, and it will apply to delist the issues. "Abnormally low selling price" and the company's petition for reorganization under Chapter 11 filed with the U.S. Bankruptcy Court on June 15 at Atlanta are basically the reasons for the exchange's actions. GEOTELE.COM: Hearing to Approve Disclosure Statement ---------------------------------------------------- On June 29, 2000 at 10:00 AM, at the US Bankruptcy Court, Southern District of NY before the Honorable Burton R. Lifland, a hearing will be held to consider the entry of an order approving the Disclosure Statement of Geotele.Com, Inc. f/k/a Transco Research Corporation. GOSS GRAPHIC: Entry of Final Decree ----------------------------------- Goss Graphic Systems, Inc., et al. seek court entry of a final decree closing these chapter 11 cases. The Reorganized Debtors have substantially consummated the plan and all expenses have been paid. GRANITE BROADCASTING: Moody's Revises Ratings Outlook To Negative ----------------------------------------------------------------- Moody's changed the outlook on Granite Broadcasting's long term debt ratings to negative and lowered the "b3" rating on its $216 million of 12.75% cumulative exchangeable preferred stock to "caa". Granite's $152 million of 8.875% senior subordinated notes, due 2008, $59 million of 9.375% senior subordinated notes, due 2005, and $134 million of 10.375% senior subordinated notes due 2005 are rated B3. Granite's $240 million secured, guaranteed revolving credit facility, maturing 2005 is rated Ba3. The senior implied and issuer rating at Granite are B1 and B2, respectively. The change in outlook reflects the asymmetry between the near term cash requirements and the uncertain longer term cash flow returns Granite expects from its transaction to acquire the NBC affiliation for its KNTV station. In the near and intermediate term, the transaction heightens Granite's already high leverage, reverses its recent efforts to reduce leverage, and prospectively erodes the company's formerly improving debt protection measurements. The NBC/KNTV affiliation agreement requires that Granite pay NBC $362 million in nine annual installments, with the initial payment of $61million due January 1, 2002. Granite will also grant NBC a warrant to acquire 2.5 million shares of the Company's common stock at an exercise price $12.50 per share and a warrant to purchase 2.0 million shares of common stock at an exercise price of $15.00 per share. (The price is currently between $6.00 and $7.00) NBC has a right of first refusal on the sale of KNTV. NBC will also have the right to terminate the San Francisco affiliation if it elects to acquire an attributable interest in another station in the San Francisco-Oakland-San Jose DMA upon payment to Granite of a fee of $14.5 million. The KNTV transaction creates sizable cash demands, including substantial capital and sales infrastructure spending, on an already significantly leveraged enterprise. For the last twelve months ended 3/31/2000, EBITDA/interest coverage at Granite was thin at 1.3 times, and leverage high with (total debt + preferred)/EBITDA approximating 11.5 times. Although the expectation is that EBITDA coverage of interest will improve over time, operating flexibility at Granite will remain tight because of Granite's obligations to NBC. Granite's pro forma fixed charge coverage, adjusted for its NBC and WB affiliation payments, is expected to hover around 1 times over the near term. The negative outlook also incorporates Moody's view that highly leveraged television broadcasters, such as Granite, are especially vulnerable to contractions in television advertising spending as well as the increasingly competitive media market for advertising dollars. Additionally, Moody's remains concerned that the recent ratings decline at the WB network may adversely impact the profitability and high growth of Granite's large market WB affiliates (approximately 30% of total revenues). The ratings and outlook also acknowledge that Granite is interested in developing multiple station positions in its markets. Thus, Moody's believes that leverage will remain high as Granite may continue to acquire and develop positions in its existing markets. Yet, Granite's ratings continue to benefit from its diversified network affiliations, which provide some insulation from a downturn at any of the networks. Granite also benefits from its geographical diversification, which buffers it from adverse periods in the economic cycle. Furthermore, many of Granite's stations are well positioned in their markets and Granite has seen strong growth from its WB affiliated stations. Granite's ratings also rely on the value of the company's asset base and stable cash flows. In the past, Granite has been able to sell assets in order to reduce leverage or fund other acquisitions. During 1998, Granite disposed of its Grand Rapids and Lansing assets for $170 million. Granite also raised approximately $160 million from the sale of KEYE, its Austin, Texas CBS affiliated station in August of 1999. Granite used $95 million of proceeds from the latter to reduce its bank debt and repurchase some of its public debt. Moody's also recognizes the potential benefits of the KNTV transaction to Granite. Granite will immediately benefit from KNTV's presence in the San Francisco DMA, which is a $640 million advertising market. KNTV's value is likely to rise as the NBC affiliation helps to build a brand in a substantially more attractive market. The KNTV transaction also continues to build Granite's relationship with NBC. Paxson Communications, partially owned by NBC, is also in the process of building a marketing relationship with Granite. Together, they have signed a joint sales agreement for the San Francisco-San Jose-Oakland region, hence providing more comprehensive advertising packages to a wider variety of advertisers. The Ba3 rating on the bank credit facility reflects the superior position of the bank facility in the capital structure and the adequacy of the collateral coverage provided by the Granite's asset base. The B3 senior subordinated rating reflects its contractual subordination to the secured facility. The rating on Granite's 12.75% preferred stock is downgraded from "b3" to "caa" to reflect the size of its growing obligation, deep subordination within the capital structure, and the limited potential for recovery in a distressed scenario. Over the intermediate term, management is likely to consider replacing the preferred with a subordinated note in an effort to reduce the associated expense. Granite Broadcasting is a television broadcaster headquartered in New York, New York. GST TELECOM: Toronto Exchange Suspends Trading of Shares -------------------------------------------------------- Dow Jones reports on June 27, 2000 that the Toronto Stock Exchange has suspended the shares of GST Telecommunications Inc. (GSTXQ) from trading, effective immediately, for failure to meet the requirements for continued listing. The company, which filed for Chapter 11 bankruptcy protection the U.S. Bankruptcy Court on May 17, doesn't object to the decision to suspend trading in its shares, according to a news release. GULF STATES STEEL: Bankruptcy Administrator Lists Objections ------------------------------------------------------------ The US Bankruptcy Administrator recommends that the following items be addressed and/or included in the Disclosure statement prior to approval: Information regarding the timing, implementation and how the proposed capital improvements will actually impact and improve the debtor's financial future should be provided. There are no projections or specific information showing how the capital improvements make the debtor's continued operation more feasible than it is today; The compensation for all of the executive officers is not provided; The actual cost of the financing, including professional fees paid to the lenders under the loan documents should be disclose; A breakdown of the administrative expenses should be provided; A breakdown of the secured claim holders should be provided; The exculpatory provisions are too broad; Exhibits have not been provided; The Bankruptcy Administrator asks that the references to its fees be deleted. INTEGRATED HEALTH: Key Employee Retention Program ------------------------------------------------- The Debtors tell Judge Walrath they cannot afford to lose their Key Employees. To ensure that their Key Employees continue to provide integral management and other necessary services during the chapter 11 cases, the Debtors seek authority under sections 105(a) and 363(b)(1) of the Bankruptcy Code to establish retention program for Key Employees. The Key Employee Retention Program has two components: I. Stay Bonuses - ranging from 25% to 100% of salary; - depending on previous contractual commitments and seniority level; - reducible by the outstanding balance of loans grante but in the event of a change in control, or departure of a key executive, the loans may be forgiven - an amount equal to the approximate federal, state and local tax liability for loan proceeds to puorchase or maintain an interest in IHS shares of stock - for IHS, payable in three installments (1/3 six months from Filing Date, that is, August 2, 2000, 1/3 one year from the Filing Date, that is, February 2, 2001, and 1/3 onn the effective date of a plan of reorganization; - for RoTech, which has a less stable envirnment, payable quarterly each year, effective as of January 1, 2000, for as long as RoTech is in chapter 11, or is owned by IHS. - total cost estimated for the Stay Program is $3.7 million for IHS and $5.4 million for RoTech. II. Enhanced Performance Incentive Payments - on group basis - equal to 5% of the increase in EBIDTA above business plan, - payable 45 days following the filing of the Debtors' Form 10-K - will supplement the Debtors' normal incentive compensation program The Debtors assert that the Retention Program represents the Debtors' exercise of sound business judgment and approval of it is essential to preserve and maximize the value of their assets through the reorganization process. Judge Walrath will entertain the Debtors' Motion at a hearing scheduled for June 21, 2000. (Integrated Health Bankruptcy News Issue 5; Bankruptcy Creditors' Services Inc.) IVYNET CORP: Certificate of Full Performance From Trustee --------------------------------------------------------- IvyNET Corporation announced it received a Certificate of Full Performance from BDO Dunwoody Limited, the Trustee appointed in respect of the proposal by IvyNet under the Bankruptcy and Insolvency Act, last June 2, 2000. Under the proposal, company's creditors can choose to have their claim either in cash or by a combination of cash and a convertible note from the company. The convertible note is convertible into 50,000,000 common shares of the company, subject to shareholder and regulatory approval. In addition, on June 26, 2000 the Canadian Dealing Network Inc. ("CDN") notified the Company that, in view of the recent reorganization, the Company no longer meets CDN's requirements for quotation as, in CDN's view, the Company is no longer carrying on an active business. CDN has indicated that trades will continue to be reported to CDN in compliance with part VI of the Securities Act (Ontario) where necessary. JOAN AND DAVID: Rejection of Real Property Leases ------------------------------------------------- The debtor, joan and david helpern incorporated, seek authority to reject certain unexpired leases for the debtor's stores located at (1) Cherry Creek, Denver, Colorado and (2)N. Georgia Premium Outlets Shopping Center, Dawsonville, Georgia. A hearing on the motion will be held on June 30, 2000at 10:00 AM. The debtor wishes to reject the leases to save significant funds. Newmark Retail Financial Advisors LLC, the debtor's business and restructuring advisor has determined that the leases have little or no assignment value. On July 6, 2000 the debtor will present a stipulation reject the unexpired lease between the debtor and Dallas Galleria Limited to the Honorable Stuart M. Bernstein. The debtor will vacate and surrender possession of the store on or before June 30, 2000. The Landlord has agreed to pay to the debtor $17,000 as consideration for the termination and rejection of the lease. The debtor believes that the use of the Dallas Galleria store is not necessary to its continued operations. JUST FOR FEET: Grant & Eisenhofer Announces Class Action -------------------------------------------------------- A Consolidated Class Action Complaint has been filed in a securities class action captioned State of Wisconsin Investment Board, et al. v. Harold Ruttenberg, et al., Civil Action Nos. CV 99-BU-3097-S and CV 99-BU-3129-S in the United States District Court for the Northern District of Alabama. This class action is brought against defendants Harold Ruttenberg, Eric L. Tyra, Peter Berman, Cooper Evans, Patrick Lloyd, Don-Allen Ruttenberg, Michael Lazarus, Helen Rockey, Scott C. Wynne, Randall L. Haines, Adam Gilburne, Deloitte & Touche LLP, Steven H. Barry, and Karen Baker (collectively, "Defendants"), on behalf of all persons and entities (other than Defendants and affiliated persons of Defendants) who purchased common stock of Just For Feet, Inc. ("Just For Feet" or the "Company") between May 5, 1997 and November 1, 1999 (the "Class Period") and who have suffered a loss. The Consolidated Complaint alleges that, during the Class Period, defendants Harold Ruttenberg, Eric Tyra, Scott Wynne and Deloitte & Touche, LLP, with the knowledge, assistance and participation of the other Defendants, orchestrated a scheme to defraud public shareholders and purchasers of Just For Feet securities. In sum, the alleged scheme entailed publishing fraudulent and false financial statements for Just For Feet for a minimum of three fiscal years, that materially overstated sales, profits and income; understated costs; overstated accounts receivable, inventories, equipment, fixed assets and stockholders' equity; and understated significant liabilities. The alleged scheme also included the concealment of the material omitted facts. The Consolidated Complaint alleges that the fraud concerns at least nine specific areas of accounting gimmicks, including: (1) creating a fraudulent kickback scheme from Just For Feet's advertising agency in order to increase revenues; (2) creating false billings and receivables for booth assets donated by shoe manufacturers; (3) creating other false vendor billings and receivables; (4) failing to write off bad debt; (5) failing to book required loss reserves; (6) understating its cost of sales through the improper use of acquisition accounting; (7) improperly capitalizing inventory costs and expenses that should have been reported as current operating expenses; (8) overstating ending inventory by not accounting or reserving for obsolete or missing inventory and by arbitrarily writing up the costs of inventory that was transferred between stores or divisions; (9) overstating earnings and understating liabilities by improperly accounting for leaseholds. The Consolidated Complaint further alleges that Just for Feet knowingly maintained woefully inadequate accounting and inventory control systems. The Consolidated Complaint asserts claims under Section 10(b) of the Exchange Act, 15 U.S.C. Section 78j(b) and Rule 10b-5, 17 C.F.R. 240.10b-5, promulgated thereunder by the Securities and Exchange Commission (the "SEC"); Section 18 of the Exchange Act, 15 U.S.C. Section 78r; Section 20(a) of the Exchange Act, 15 U.S.C. Section 78t(a); and common law fraud and professional negligence. The following plaintiffs have been appointed to a temporary lead plaintiff Committee in this class action: State of Wisconsin Investment Board, Kenneth D. Bush, Edward E. Eubank, Jr. and John Michael. Any member of the Class who desires appointment to the final lead plaintiff Committee or who wishes to act solely as lead plaintiff must file such a petition with the Court within sixty (60) days of the date of this Notice. LEVITZ FURNITURE: Injunction On Agreement with Seaman Furniture --------------------------------------------------------------- The Delaware Chancery Court has issued a preliminary injunction and opinion that puts on hold a management contract and a shared services agreement between Seaman Furniture Co. and Levitz Furniture Inc. (LVFIQ), under which Seaman was to perform the general day-to-day management of Levitz's 20 or so East Coast stores. The Boca Raton, Fla.-based furniture retailer and 11 affiliates filed for Chapter 11 bankruptcy protection on Sept. 5, 1997. MARTIN COLOR-FI: Announces Confirmation of Plan ----------------------------------------------- On June 27, 2000 Martin Color-Fi, Inc. ("MCF") announced that its Plan of Reorganization ("Plan") was confirmed at a hearing in bankruptcy court in the District of South Carolina on Monday, June 26, 2000. The Plan provides for a merger between MCF and an affiliate of Dimeling, Schreiber & Park ("DS&P"), a Philadelphia, Pennsylvania-based investment partnership that specializes in private equity investments primarily in the form of Chapter 11 reorganizations. All of the stock of the corporation surviving the merger will be owned by DS&P. Stephen A. Zagorski, President and Chief Operating Officer of MCF, commented: "I am delighted with the confirmation of our Plan of Reorganization. It represents a significant milestone in the evolution of our company, and we anticipate that the merger contemplated by the Plan will be consummated in early July. I am pleased that both the secured and unsecured lenders supported our Plan and, of course, am disappointed that there will be no recovery for any of our existing MCF shareholders." Bill Quinn of DS&P commented: "We are very pleased that the order confirming the Plan of Reorganization has now been entered. It marks an important step toward our purchase of Martin Color-Fi, which we feel has significant potential for growth." Martin Color-Fi, Inc. produces polyester fibers and pellets from recycled plastic materials such as soft drink bottles, off-class packaging resins, polyester fiber waste and film waste. The Company uses these materials to produce polyester fibers for a wide range of markets, including automotive fabrics, carpet, apparel, home furnishings, industrial fabrics and construction reinforcement materials. The Company also produces yarns from synthetic fibers, as well as dyes and pigments. PATHMARK STORES: Merger Failure Wounds Big Investors ----------------------------------------------------- The Star-Ledger reports on June 22, 2000 that Pathmark Stores' failure to find a merger partner has seriously affected some of the grocer's largest bondholders, not excluding Fidelity Investments. According to annual and semi-annual reports filed with the SEC, the Pathmark bonds have maimed the performance of Fidelity's funds. Pathmark plans to file bankruptcy protection under Chapter 11 this summer with a $ 1.5 billion debt on its tail. One of the proposals stated was that it will swap debt for equity, taking off from its books $ 1 billion in debt. PLANET HOLLYWOOD: Shaq Joins The Team ------------------------------------- Planet Hollywood announced that Los Angeles Lakers center Shaquille O'Neal has become the company's latest celebrity shareholder, according to the Associated Press. O'Neal, the NBA's regular season and finals MVP, will make personal appearances at restaurants in his new role. In addition, the restaurant company is adding "The Shaq Shake" to its menu. "I plan to do for Planet Hollywood as I have done for the Lakers," O'Neal said. The Orlando-based company filed for chapter 11 last year and closed nine of its 32 U.S. locations. In addition, former president William Baumhauer resigned, and Keith Barish, who started the venture with chairman and CEO Robert Earl and actors Sylvester Stallone, Demi Moore, Arnold Schwarzenegger and Bruce Willis, also left the company. Earlier this year, Schwarzenegger announced he was leaving the company; Earl said that he is planning to add more celebrity investors in the near future. (ABI 28-Jun-00) PREMIER LASER SYSTEMS: Bar Date Set For August 25, 2000 ------------------------------------------------------- The US Bankruptcy Court for the Central District of California, Santa Ana Division entered an order establishing August 25, 2000 as the last date for the filing of proofs of claims against Premier Laser Systems, Inc. and EyeSys-Premier, Inc. SAFETY-KLEEN: U.S. Trustee's Appointment to Committee ----------------------------------------------------- The United States trustee for Region III invited Safety-Kleen's largest creditors and other parties-in-interest to an organizational meeting for the purposes of receiving indications of interest and statements of willingness to serve on one or more official committees of unsecured creditors to be appointed pursuant to 11 U.S.C. Sec. 1102(a)(1). Scores of creditors stepped forward, jockeying for seats on any committee and lobbying for the appointment of multiple committees. Frederick J. Baker, Esq., Senior Assistant U.S. Trustee, decided and announced at the organizational meeting that the body of unsecured creditors will be represented in these chapter 11 cases by one 6-member Official Committee of Unsecured Creditors by: (1) U.S. Bank Trust National Association, as Indenture Trustee 100 Wall Street, Suite 1600 New York, NY 10005 Attention: Daniel R. Fisher (212) 361-2299 (2) The Bank of Nova Scotia Trust Company of New York One Liberty Plaza New York, NY 10006 Attention: George E. Timmes (212) 225-5422 (3) Teachers Insurance and Annuity Association of America 730 Third Avenue New York, NY 10017 Attention: Roi G. Chandy (212) 916-6139 (4) Holnam, Inc. 6211 Ann Arbor Road Dundee, MI 48131 Attention: John V. Hefferman (734) 529-4323 (5) Creamer Investments, Inc., f/k/a Ract, Inc. 136 East South Temple, Suite 1300 Salt Lake City, UT 84111 Attention: Jean I. Everest, II (801) 236-9700 (6) New Pig Corporation [Pig stands for Partners in Grime] One Pork Avenue Tipton, PA 16684 Attention: Bernard Edward Stapelfeld (814) 684-0133 STAGE STORES: Announces Final Court Approval of DIP Financing ------------------------------------------------------------- Stage Stores Inc. announced on June 27, 2000 that its three year, $450 million debtor-in-possession credit agreement with Citicorp USA Inc. as agent (the "DIP Financing") was given full and final approval by the U.S. Bankruptcy Court for the Southern District of Texas in an order dated June 26, 2000. Jack Wiesner, chairman, interim chief executive officer and president, commented, "We are pleased to receive final court approval for the full amount of the DIP Financing. This financing will help ensure that the company has significant liquidity to meet our financial obligations in the ordinary course of business." Stage Stores Inc. brings nationally recognized brand name apparel, accessories, cosmetics and footwear for the entire family to small towns and communities throughout the United States. The company currently operates more than 600 stores in 33 states, primarily under the Stage, Bealls and Palais Royal names. SYSTEM SOFTWARE: Meeting of Creditors ------------------------------------- A meeting of creditors in the case of System Software Associates, Inc. is set for July 14, 2000 at 10:00 AM, 844 King street, Room 2313, Wilmington, DE. TOKYO SOWA BANK: To Be Sold to Ross-Led Fund -------------------------------------------- The failed Tokyo Sowa Bank Ltd. said Tuesday it was to be sold to a US investment fund led by financier Wilbur Ross in the fund's second takeover of a Japanese lender. The government's Financial Reconstruction Commission (FRC) had selected Ross' Asia Recovery Fund as the buyer for Tokyo Sowa, which was declared insolvent and placed under state control in June last year, the bank said. "We have signed a basic accord on our bank's transfer of operations to Asia Recovery Fund Ltd.," said Tokyo Sowa in a statement. "We will proceed with discussions between the two parties for a final transfer of operations." The agreement marks only the third outright takeover of a Japanese bank by foreigners, including the FRC's decision last month to hand over the failed Kofuku Bank Ltd. to the Asia Recovery Fund. The Long-Term Credit Bank of Japan Ltd. (LTCB) became the first Japanese bank to fall outright into foreign hands in February, when a syndicate led by Ripplewood Holdings LLC of the United States won the right to buy it. LTCB was relaunched as Shinsei Bank this month. Shinsei, along with travel agent HIS Co., was also in the running to take over Tokyo Sowa Bank, which was established in 1950. The FRC had chosen the Ross fund because its proposal called for the government to pump less public money into the insolvent bank than the Shinsei and HIS proposals, Kyodo News reported. Ross, 62, who owns US investment firm WL Ross and Co., is a famed figure in US financial circles who until March was executive managing director of Rothschild and Co. Ross is seeking to create a holding company under which to put both Osaka-based Kofuku and Tokyo Sowa, Kyodo quoted FRC sources as saying. The Tokyo-based bank filed a bankruptcy application with the FRC, set up in 1998 to shore up Japan's crumbling financial industry, for public protection last year. Its capital-to-asset ratio was 2.4 percent just before it collapsed, far below the four percent required by Japan's Financial Supervisory Agency for banks operating domestically. The Tokyo-based bank, strangled by bad loans, collapsed with a huge capital deficit of 102.2 billion yen (971 million dollars). (Agence France Presse 27-Jun-2000) TREESOURCE INDUSTRIES: Seeks Approval To Post $4MM As Surety ------------------------------------------------------------ The debtors, Treesource Industries, Inc., et al. seek court approval to post approximately $4 million of cash or cash equivalents as surety for certain of the debtors' workers compensation and timber obligations. The motion shall be heard on Friday July 7, 2000 at 11:00 AM before the Honorable Samuel J. Steiner in Room 407, Park Place Building, 1200 Sixth Avenue, Seattle, Washington. The debtors currently have surety bonds from Frontier Insurance Company in the approximate amount of $6 million. The debtor has posted approximately $1 million of collateral, in the form of a zero coupon bond, to secure Frontier's $6 million bonding obligation. Frontier's debt rating was recently downgraded, and Frontier no longer qualifies as an adequate surety accepted by certain federal and state agencies. Therefore, the debtors must replace certain of the surety bonds from Frontier with bonds from a different surety company or with sufficient cash collateral. The debtors estimate that Frontier will still be an acceptable bonding company for certain of the debtors' obligations. However, approximately $4 million of the debtors' obligations will require another form of surety. The debtors propose to post their own collateral, in the form of letters of credit or similar cash equivalents, directly with the state and federal agencies as necessary. The debtors will need to pay from cash on hand and/or borrow $4 million form their DIP Facility with GE Capital Corporation in order to make these required security deposits. VISION TWENTY-ONE: Largo Closing Still A Go -------------------------------------------- The St. Petersburg Times reports on June 22, 2000 that despite the cancellation of Opticare Health Systems buyout with Vision Twenty-One Inc., the company will still proceed with its plan of closing its headquarters in Largo by the end of August. And, about 35 employees will be sent home while the company is consolidating its corporate functions in either Baltimore or Boca Raton. The eye-care company is presently under restructuring of its debt or selling its assets while its struggling as an independent firm. ********* 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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