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/raid1/www/Hosts/bankrupt/TCR_Public/000727.MBXT R O U B L E D C O M P A N Y R E P O R T E R Thursday, July 27, 2000, Vol. 4, No. 146 Headlines APPLIED THERMAL: Files Chapter 11 ASPLUND COFFEE: Case Summary and 20 Largest Unsecured Creditors BREED TECHNOLOGIES: Seeks Extension of Time To Remove Actions DRKOOP.COM: Milberg Weiss Announces Class Action Suit ELECTRO-PLATING: Case Summary and 20 Largest Unsecured Creditors GRACE COMMUNITY: Purchased by E.C.C. HARNISCHFEGER: Equity Applies To Employ Goldin As Advisor HARNISCHFEGER: Protests Against Chase Manhattan in Australia KEATHLEY AVIATION: May File For Chapter 7 Liquidation LE'SLAM SPORTS BAR: To File For Bankruptcy; Closed Since Friday MEDPARTNERS PROVIDER: Order Approves Stipulation LEASING SOLUTIONS: Court Authorizes Sale to MLSC LEVITZ FURNITURE: Net Loss of $66.9 Million For Fiscal Year MARINER: Motion To Assume JCE and Fichera Agreements/Amendments MCA FINANCIAL: Order Approving Disclosure Statement MMH HOLDINGS: Seeks To Implement Employee Retention Program MOSSIMO INC: Announces Dismissal of Involuntary Petition PAGENET: Receives Approval of Motions from Bankruptcy Court PLANET HOLLYWOOD: Launches New Web Page RANDALL'S ISLAND: Sale of Certain Non-Residential Real Property RECOM SYSTEMS: Drops Chapter 7 for Chapter 11 SHARPSVILLE QUALITY: Filed for Chapter 11 Bankruptcy SILVER CINEMA: Theatres To Remain Open SOUTHERN MINERAL: Confirmation of Plan of Reorganization TEXAS HEALTH ENTERPRISES: Objections to Disclosure Statements US DIAGNOSTICS: Shareholders To Sell 70 Facilities ********* APPLIED THERMAL: Files Chapter 11 --------------------------------- A Tulsa firm that designs heat transfer equipment has laid off all but five of its 22 employees after filing for Chapter 11 bankruptcy. Applied Thermal Systems Inc. "needs some breathing room," said Neal Tomlins, attorney for the firm. It is engaged in "highly specialized" work for power plants. In its filing with the Bankruptcy Court for the Northern District of Oklahoma in Tulsa, the firm claimed assets of $ 5.8 million and debts of $ 7.25 million. Among the 20 largest creditors owed $ 4.62 million are five Tulsa-area firms, two firms from the Oklahoma City area and three Canadian companies. The court filing listed the Oklahoma City area firms as ESCOA, owed $ 409,829, and Petrofab Inc. of Moore, owed $ 88,384. The largest creditor listed was Express Metal Fabricators of Locust Grove, which is owed $ 1.66 million. Tomlins said Charles A. Martin, president, owns all the stock in Applied Thermal Systems. ASPLUND COFFEE: Case Summary and 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Asplund Coffee Company, Incorporated 14295 James Road, Suite 200 Rogers, MN 55274 Type of Business: Roasts and distributes coffee Chapter 11 Petition Date: July 19, 2000 Bankruptcy Case No.: 00-33056 Judge: Gregory F. Kishel Debtor's Counsel: William I. Kampf 53387 Kampf & Associates, P.A. 901 Foshay Tower 821 Marquette Avenue Minneapolis MN 55402 Tel.:(612) 339-0522 Total Assets: $ 1,412,877 Total Debts: $ 1,898,493 20 Largest Unsecured Creditors Ronnoco Coffe Co. $ 135,392 Cafe Imports $ 102,508 St. Paul Properties $ 78,000 Liberty Carton $ 73,477 Probat $ 31,216 Impact Vending $ 27,598 McGarvey's/Superior $ 25,971 Royal Cup Dine-Mor $ 23,194 Froehling Anderson $ 20,415 Pac One $ 9,597 Fetco $ 8,102 Winthrop & Weinstine $ 7,800 Jobelle Coffee $ 7,713 Bryn Mawr Tire $ 5,849 Pitneyworks $ 5,530 Bloomfield $ 4,841 General Packaging $ 4,655 Sovran $ 4,417 Cecilware Corp $ 4,243 Overwrapps $ 4,099 BREED TECHNOLOGIES: Seeks Extension of Time To Remove Actions ------------------------------------------------------------- The debtors, Breed Technologies, Inc., et al. seek entry of an order extending the period within which the debtors may remove actions pursuant to 28 USC section 1452 and Rule 9027 of the Federal Rules of Bankruptcy Procedure. The debtors seek entry of an order further extending the time by which they may file notices of removal through and including November 20, 2000 with respect to civil actions pending as of the Petition Date. The debtors claim that the extension sought will afford them an additional opportunity to make fully informed decisions with respect to removal of the pre-petition actions and will ensure that the debtors do not forfeit valuable rights under Section 1452. The debtors are a party to numerous actions in various state and federal courts, but they have not had an opportunity to fully develop a strategy for the pre-petition actions. To date, the debtors have negotiated comprehensive settlements with certain of its major customers and suppliers, including General Motor Corporation and Atlantic Research Corporation. The debtors have filed their schedules and statements of financial affairs as well as monthly operating reports. The debtors anticipate filing a plan of reorganization and accompanying disclosure statement in the next few weeks. DRKOOP.COM: Milberg Weiss Announces Class Action Suit ----------------------------------------------------- The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a class action lawsuit was filed on July 20, 2000, on behalf of purchasers of the securities of Drkoop.com Inc. ("Dr.koop.com" or the "Company") (NASDAQ: KOOP) between June 8, 1999, and March 30, 2000, including all persons who purchased the common stock of Dr.koop.com pursuant to or traceable to the Company's initial public offering (the "IPO") on June 8, 1999, or subsequently in the open market. A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss' website at: http://www.milberg.com/drkoop/ The action, numbered 100CA439-JN, is pending in the United States District Court for the Western District of Texas, Austin Division, located at 655 E. Durango Blvd., San Antonio, TX, 78206, against defendants Dr.koop.com, Susan Georgen-Saad (Chief Financial Officer), Donald Hackett (Chief Executive Officer and President), John F. Zaccaro (Vice Chairman of the Board), and Nancy Snyderman (Director). The Honorable James Nowlin is the Judge presiding over the case. The complaint charges that defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The complaint alleges that the prospectus (the "Prospectus") issued in connection with the IPO was materially false and misleading for several reasons. For example, the complaint alleges that the Prospectus highlighted the purported benefits the Company would derive from its relationship with HealthMagic Inc., a provider of Internet technology to health related businesses and that HealthMagic would continue to develop the Company's Personal Medical Records ("PMR") product, among other technologies. This statement was materially false and misleading, as alleged in the complaint, because it failed to disclose that the PMR product was in early stages of development and required extensive reworking before it could be commercially deployed. On March 30, 2000, the Company filed its Form 10-K for fiscal 1999 which revealed that the Company's relationship with HealthMagic was unsatisfactory and would be terminated, and that the Company's independent auditors raised substantial doubt about Dr.koop.com's ability to continue as a going concern. In response to these revelations, the price of Dr.koop.com common stock plunged by 41%, falling from $6 1/4 per share to 3 11/16 per share. If you bought the securities of Dr.koop.com between June 8, 1999, and March 30, 2000, you may, no later than September 12, 2000, request that the Court appoint you as lead plaintiff. CONTACT: Milberg Weiss Bershad Hynes & Lerach, LLP, New York Steven G. Schulman or Samuel H. Rudman, 800/320-5081 Email: drkoopcase@milbergNY.com Website: http://www.milberg.com URL: http://www.businesswire.com ELECTRO-PLATING: Case Summary and 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Electro -Plating Engineering Co., Inc. 45 W. Ivy Avenue St. Paul MN 55117 Type of Business: Plating of nickel and zinc onto finished parts provided by customers, and manufacturing of coil which is plated and sold to those in the vending business. Chapter 11 Petition Date: July 10, 2000 Court: District of Minnesota Judge: Nancy C. Dreher Debtor's Counsel: William I. Kampf Kampf & Associates, P.A. 901 Foshay Tower 821 Marquette Avenue Minneapolis MN 55402 Tel.: 612-339-0522 Total Assets: $ 2,889,000 Total Debts: $ 1,823,000 20 Largest Unsecured Creditors State Fund Mutual $ 52,000 Murphy Ins $ 30,000 Atlas Temporaries $ 25,537 NSP $ 17,000 Kraft Chemical $ 16,761 U.S. Filter $ 11,571 Felhaber Larson Fenlon & Vogt $ 11,500 Hoffland Environmental $ 8,391 Safety Kleen $ 7,500 DPC Industries $ 5,688 N American Wire $ 5,600 Toyota Motor Credit $ 5,000 Fremont Ind. Inc. $ 4,832 JRM Machine Co $ 3,494 WRCA Wire $ 2,289 Savenich Butler Gerlach $ 2,270 St. Paul Steel Co. $ 1,886 Safeguard Business Systems $ 1,743 Weber Electric $ 1,599 Industrial Polishing $ 1,030 GRACE COMMUNITY: Purchased by E.C.C. ------------------------------------ Evangelical Congregational Church Retirement Village (ECC) bought the bankrupt Grace Community Inc., according to the Harrisburg Patriot. The E.C.C. fiduciaries said that the contracts of Grace Community with its residents would be honored despite the sale. Grace Community, which is also known as Stone Ridge Village, has 150 apartments, 31 cottages, 60 skilled nursing beds, and 30 assisted living units. It filed for Chapter 11 bankruptcy protection in 1999 in the U.S. Bankruptcy Court of Harrisburg. (The Harrisburg Patriot 7/20) HARNISCHFEGER: Equity Applies To Employ Goldin As Advisor --------------------------------------------------------- The Official Committee of Equity Security Holders asks the Court to approve the employment of Goldin Associates, L.L.C. as financial advisors for the Committee at a monthly fee of $45,000 for a minimum of three months, plus a success fee of $55,000 per month for the term of Goldin's engagement in the event that a plan of reorganization is confirmed and results in distribution to equity holders of Harnischfeger Industries, Inc. The Committee's proposal also provides for reimbursement of reasonable out-of-pocket expenses. The Committee tells the Court they intend to work closely with Goldin and other professional advisors to ensure that there is no duplication of services. Specifically, the Committee desires that Goldin will: (i) Review and comment on the feasibility of business plans prepared by the Debtors and, if necessary, propose modifications or alternatives; (ii) Advise the Committee on the value of the Debtors' domestic and international operations as going concerns and the value of major estate assets, including real estate and inventory; (iii) Support counsel to the Committee with the proffer of expert valuation testimony; (iv) Monitor any undertaking by the Company and its advisors to effect a sale of the entire company or any of its significant operating units; (v) Review any proposals for the sale of estate assets and represent equity holders in related discussions; (vi) Review and make recommendations regarding the capital structure of a reorganized Harrnischfeger; (vii) Monitor the analysis, negotiation, and resolution by the Company of claims made against the Company; (viii) Perform other related services as the Committee or its counsel may reasonably request. The Committee notes that Goldin is well qualified, and has the experience and knowledge for the job. The Committee also believes that Goldin does not hold or represent any other equity having an interest adverse to the Debtors or the Committee's constituents in connection with HII's chapter 11 cases. The Debtors object to the proposal. First, the Debtors contend that the services are not necessary because they see that the equity would be a deficit of $1,025,151 after a restructuring charge of approximately $1 billion, and it appears unlikely that any value will be distributed to HII's shareholders. These are reported in the Debtors' Form 10K for the period ended October 31, 1999 and Form 10Q filed with the SEC on June 14, 2000. Second, the Debtors contend that the proposed fees are unfair because if approved, they will be paid by the Debtors for no benefit to the Debtors' estates. The Debtors further point out that the application does not include any proposed retention agreement for Goldin, and includes no justification for the proposed fees. The Debtors remark that to the extent that the Equity Committee wishes to conduct an investigation utilizing Goldin's services, the Committee can do so without seeking authorization from the court and if Goldin makes a substantial contrubution to the Debtors' estates, it can apply for reimbursement of reasonable fees and expenses under section 503(b) of the Bankruptcy Code. (Harnischfeger Bankruptcy News Issue 25; Bankruptcy Creditor's Service Inc.) HARNISCHFEGER: Protests Against Chase Manhattan in Australia ------------------------------------------------------------ According to the AAP NEWSFEED on July 26, 2000, thousands of unionists will take part in a nation-wide protest on July 27 outside the Chase Manhattan offices. The bank gave a loan to a mine machinery company that has locked out workers for 15 weeks. South Coast Labor Council secretary Arthur Rorris said unionists would take part in the noon protests at Chase Manhattan offices in Canberra, Hobart, Sydney, Perth, Brisbane and Melbourne. The protests are in support of 73 Joy Mining Machinery workers who have been locked out of their Moss Vale factory, in the New South Wales southern highlands, after management attempted to shut unions out of pay talks. Two weeks ago Joy management issued a new lock out notice after workers refused to accept an offer to return to work for a four-week trial period. AMWU state secretary Paul Bastian said the workers rejected the offer, because management had threatened them with a further lockout if they failed to behave in an appropriate manner or negotiate in good faith. As well as locking out workers, Joy has sought court injunctions against union officials, who were handed subpoenas from the company claiming personal damages of up to $700,000. Joy Mining has refused to comment to media throughout the dispute. But Chase Manhattan Bank has now been targeted by unions after they discovered the bank gave Joy Mining parent company Harnischfeger Industries a $750 million loan for a company restructure. Harnischfeger Industries has filed for Chapter 11 bankruptcy in the United States. Earlier this month union representatives were thrown out of Chase Manhattan's Sydney offices during a protest. But Mr Rorris said the July 27 action would be part of a co-ordinated effort around the country. KEATHLEY AVIATION: May File For Chapter 7 Liquidation ----------------------------------------------------- President Thomas Keathley of Keathley Aviation asked that the Chapter 11 case be dismissed, and awaits Bankruptcy Judge Margaret Mahoney's decision. Keathley added, "We want to file a lawsuit against some people who have essentially put us out of business," [and] "We've looked for seven months, but we can't find a lawyer that will take the case while it's in bankruptcy. If we get the bankruptcy dismissed, we can get a lawyer on a contingency basis, and then we can follow up on a lawsuit." The Pensacola based firm has about $5.2 million, and is likely to file for Chapter 7 liquidation. LE'SLAM SPORTS BAR: To Filoe For Bankruptcy; Closed Since Friday ----------------------------------------------------------------- The Columbian (Vancouver, WA.) reports on July 25, 2000, That Le'Slam Sports Cafe, the Orchards sports bar owned by former Portland Trail Blazers stars Kermit Washington and Kevin Duckworth, will file for bankruptcy. The establishment has been closed since Friday, but Washington said he hopes to reopen it this week, at least temporarily. Le'Slam has struggled since it opened in 1996, Washington said Monday afternoon. He said he has already lost $ 400,000 his entire retirement savings on the bar and restaurant at 11808 NE Fourth Plain Road. Duckworth invested somewhat less and has not been as closely involved with the business. Except for brief periods during the football and basketball seasons, Washington said, Le'Slam never made a profit and has accumulated $ 300,000 in debt. He said it would have been smart to close a long time ago, but he refused to give up. "I didn't want people to say 'Kermit couldn't do it. He's just a basketball player. He's in over his head,'" Washington said. "I still think we have some class, and until the end I hope we have some dignity." The breaking point came Friday, he said, when the state ordered Le'Slam closed because of $ 24,000 in unpaid taxes. By reorganizing under Chapter 11 bankruptcy protection, which he plans to file by Wednesday, Washington said he believes he will be able to reopen the restaurant later this week. Football season is just over a month away, and Washington said he hopes things will turn around by then. If they don't, though, he said the restaurant might not even last a month. "I'm playing a game of poker," Washington said. "I should have thrown in the cards two years ago when I still had money left, and I still had things of value." Why hasn't the restaurant worked? Washington said it certainly isn't for lack of effort. For most of the past four years, he said, he has put in 12-hour days seven days a week. Washington greets nearly all the customers, and he said he does everything from scrubbing the toilet to mopping the floor himself. MEDPARTNERS PROVIDER: Order Approves Stipulation ------------------------------------------------ MedPartners Provider Network, Inc., debtor, seek entry of a court order approving the stipulation entered into between MPN and PacifiCare of California. The stipulation establishes the agreed amount of Pacificare's prepetition claim against MPN for purposes of voting on MPN's chapter 11 plan and for purposes of establishing PacifiCare's eligibility of receiving distributions pursuant to the MedPartners Funding Commitment under the MPN Chapter 11 plan and the agreed amount of PacifiCare's remaining unpaid post-petition claim. Specifically, pursuant to the stipulation, MPN and PacifiCare have agreed that, for the purposes of the MPN Chapter 11 plan, Pacificare shall hold a prepetition Allowed MPN Claim of a Consenting Plan in the amount of $7.07 million plus Reimbursement Claims and a post petition claim of $0. LEASING SOLUTIONS: Court Authorizes Sale to MLSC ------------------------------------------------ By order entered on July 13, 2000, the US Bankruptcy Court for the Northern District of California authorized the sale to Manufacturers' Leasing Services Corp. of specified leases and the equipment underlying such leases. LEVITZ FURNITURE: Net Loss of $66.9 Million For Fiscal Year ----------------------------------------------------------- According to an article in The Palm Beach Post on July 22, 2000, Levitz Furniture said it had a net loss of $66.9 million, or $2.22 a share, for the fiscal year ended March 31. The furniture retailer reported a loss of $ 94.4 million, or $3.15 a share, a year earlier. The company said net sales dropped to $ 525.1 million this year from $653.1 million a year earlier. Same-store sales, however, rose 2.8 percent this year after falling 0.1 percent in fiscal 1999. Boca Raton-based Levitz (OTC-BB: LVFIQ, 9 cents) closed 15 stores in June 1998 and 27 stores in January 1999 as it left underperforming markets, including Florida. It now operates 64 stores in 13 states. In its 10-K filing with the Securities and Exchange Commission, the company said it is developing a reorganization plan to help the company emerge from Chapter 11 bankruptcy protection. Last month, a Delaware court blocked a management services agreement between Levitz and Seaman Furniture of Woodbury, N.Y., that was to be the basis of the company's reorganization plan. MARINER: Motion To Assume JCE and Fichera Agreements/Amendments ----------------------------------------------------------------- Mariner Post-Acute Network, Inc. and its wholly owned subsidiary, American Pharmaceutical Service, Inc. move the Court for an order authorizing them to assume the JCE Consulting Agreement and the Fichera Employment Agreement, in their respective amended forms. Since November 1999, the Debtors have retained JCE as an independent contractor of APS and employed Russ Fichera as Chief Financial Officer of APS. JCE provides services for APS "in the nature of those typically provided by the Chief Executive Officer." Mr. Thomas Dixon, the President of JCE, has been primarily responsible for performing JCE's obligations under the JCE Consulting Agreement. The JCE Consulting Agreement currently provides for compensation of $25,000 per month. Additionally, in the event of all or substantially all of APS's assets before a certain specified date, JCE will be entitled to $700,000 in additional compensation. If no such sale occurs, XE shall receive $350,000. The Fichera Employment Agreement provides that Fichera will receive a base salary of $250,000 per annum ($20,833.33 per month). Additionally, Fichera will receive $500,000 upon either (1) a sale, merger, or dissolution of APS's assets, or (2) following a Change of Control, if Fichera is terminated without Cause or if he terminates his employment with Good Reason. The Debtors believe that JCE and Fichera have been instrumental in implementing measures to improve APS's performance that have enhanced value to the estates. The Debtors desire to continue to have the services of JCE and Fichera, both well qualified and familiar with APS's business operations and assets. However, in light of the Debtors' current business plans and the filing of their chapter 11 cases, the Debtors believe that the existing JCE Consulting Agreement and Fichera Employment Agreement need to be amended The terms of the Existing Agreements need to be amended to (1) comport with the Debtors' reorganization strategy, and (2) compensate JCE and Fichera based in part upon the amount of value they would be able to generate for the Debtors through their efforts at APS. Moreover, in light of the Debtors' chapter 11 filings and their current restructuring strategy, certain provisions in the existing JCE Consulting Agreement and the Fichera Employment Agreement could expose the Debtors to substantial liabilities if not modified as provided in the Amendments. The Debtors tell Judge Walrath that as a result of good faith, arms' length negotiations, they have entered into the respective Agreement Amendments with JCE and Fichera. In summary, the Amendments provide for: JCE and Fichera will continue to provide services in the nature of those typically provided by the Chief Executive Officer and Chief Financial Officer of APS, respectively, as provided in the Existing Agreements. In addition, JCE and Fichera also will, among other things, (1) participate in the development and implementation of APS's restructuring strategy, including any divestitures, and (2) negotiate the terms of any contemplated divestiture. In the case of JCE, Thomas Dixon shall remain the individual principally responsible for performing the services of JCE. The term of the JCE's and Fichera's employment shall continue until a confidential date which the Debtors believe is a reasonable amount of time to implement their APS reorganization strategy. The Amendments will substantially alter the manner of compensation for JCE and Fichera. The Debtors believe that these changes are highly beneficial to their estates, because they will serve as incentives to maximize the amount of net value generated to the estates, while reducing the total compensation payable to JCE and Fichera if they are unable to achieve that value. The Debtors have sought and obtained the Court's authorization to file the Amendments as well as the Existing Agreements under seal because the Amendments contain confidential information regarding the Debtors' reorganization strategy because the Confidential Agreements contain sensitive information pertaining to the Debtors' efforts to restructure APS, including information regarding timing and valuations, disclosure of which would likely cause serious, irreparable harm to the Debtors' reorganization efforts. Pursuant to this, the Confidential Agreements will remain confidential and will be made available only to: the US Trustee, the Creditors' Committee (other than those members that are competitors or might be an acquirer), Chase, the DIP Lenders, the members of the bank steering group of which Chase is a member, and their advisors. The Chase Manhattan Bank, for itself and as agent for the Prepetition Lenders, asks the Court for authority to file the Statment of the Chase Manhattan Bank, as Agent, in support of the Debtors' motion to assume Dixon and Fichera Employment Agreements under seal, because the statement refers to confidential and sensitive information relating to the Debtors' business operations. The Official Committee of Unsecured Creditors of MPAN has filed a limited objection under seal to the Debtors' Motion. (Mariner Bankruptcy News - Issue 7; Bankruptcy Creditor's Service Inc.) MCA FINANCIAL: Order Approving Disclosure Statement --------------------------------------------------- By order entered on July 20, 2000, the US Bankruptcy Court, Eastern District of Michigan, Southern Division, entered an order approving the Second Amended Disclosure Statement as containing adequate information. Objections to the Second Amended Plan must be in writing and filed and served no later than August 14, 2000. The hearing on confirmation of the Second Amended Plan shall be on Monday August 21, 2000 at 3:00 PM in the Courtroom of the Honorable Steven W. Rhodes, 211 W. Fort Street, Courtroom 1825, Detroit, Michigan. The claims bar date is extended to October 31, 2000. The plan is a liquidating plan. An agent will be appointed to liquidate the remaining assets of the debtors and distribute them in accordance with priorities established under the Bankruptcy Code. MMH HOLDINGS: Seeks To Implement Employee Retention Program ----------------------------------------------------------- The debtors, MMH Holdings, Inc., et al. seek to implement an Employee Retention Program with the US Bankruptcy Court, District of Delaware. A hearing on the motion has been scheduled for 2:00 PM on August 8, 2000 before the Honorable Sue L. Robinson, US District Court, 844 King Street, Wilmington, DE. The proposed modification would shorten the length of time from May 31, 2000 to January 1, 2001 that the employees designated to participate in the Retention program would have to stay with the debtors to be eligible to receive the retention bonus in the event that the debtors pursue confirmation of a plan of reorganization. In addition, although the debtors do not believe that they will exceed the $1.65 million that the court authorized them to pay in retention bonuses to certain designated employees, the debtors request authority to increase the amount available to pay retention bonuses to $1.665 million. MOSSIMO INC: Announces Dismissal of Involuntary Petition -------------------------------------------------------- Mossimo, Inc. (OTCBB:MGXO.OB) today announced that on July 25, 2000, the United States Bankruptcy Court dismissed the involuntary bankruptcy petition filed against the Company on May 16, 2000. Founder and President Mossimo Giannulli commented, "We are pleased to have this issue resolved and we can now fully concentrate our energies on growing our business with the Target Corporation (NYSE:TGT). We want to thank them for their support during this process and look forward to capitalizing on the opportunities that lie ahead." Founded in 1987, Mossimo, Inc. is a designer of men's and women's sportswear. PAGENET: Receives Approval of Motions from Bankruptcy Court ----------------------------------------------------------- Court Affirms Employee Compensation, Payment of All Vendors in the Ordinary Course, and Continuation of All Customers ServicesPaging Network, Inc. (Nasdaq:PAGE) said the U.S. Bankruptcy Court for the District of Delaware approved various first-day motions in connection with its voluntary reorganization under Chapter 11, filed with the court. Among other motions, the court approved PageNet's requests to continue all employee compensation and benefits plans; customer sales, support and service activities; and payment of all funds due to suppliers in the ordinary course. A motion permitting PageNet's bank group to provide Debtor-In-Possession (DIP) financing also was approved by the court. Representatives of bondholders owning a substantial majority of PageNet's bonds appeared before the court to voice support for the PageNet reorganization and merger with Arch Communications Group, Inc. In addition, representatives of all of PageNet's banks appeared to voice their support. (Business Wire 7/25) PLANET HOLLYWOOD: Launches New Web Page --------------------------------------- Planet Hollywood is continuing its fight back from bankruptcy with the launch of a new Web site for Hollywood movie fans around the world, at http://www.PlanetHollywood.com. "This is not a restaurant Web site," said chairman and CEO Robert Earl. "We've taken elements of what makes Planet Hollywood restaurants appealing and created a daily destination on the Web," he added. The company filed for US Chapter 11 bankruptcy protection last year, but has since received a cash infusion, closed a number of its money-losing restaurants worldwide, and improved service. The new Web site offers live celebrity chats, footage of celebrity events, merchandise, games, contests and movie, television and celebrity news. In an arrangement with Web auctioneer eBay, site visitors will also be able to bid on authenticated movie memorabilia, including the signpost from the TV show M*A*S*H, a vest worn by John Wayne, and a Star Trek tricorder.(Newsbytes.com, http://www.newsbytes.com.11:32 CST(20000725/WIR) RANDALL'S ISLAND: Sale of Certain Non-Residential Real Property --------------------------------------------------------------- On July 31, 2000 at 10:00 AM, a hearing will be held to consider the motion of the debtors, Randall's Island Family Golf Centers Inc., et al. for orders authorizing and approving the sale of 36 fee-owned properties and leasehold interests and related personal property to the highest and best bidder(s), free and clear of all liens, claims, encumbrances, and interests and exempt from any stamp, transfer, recording or similar tax. This motion is intended to supersede the Global Bidding Procedures Motion, as there were not firm-enough offers for the properties to effectively utilize the global bidding procedures proposed in the Global Bidding Procedures Motion. The debtor will abandon or reject those properties that remain unsold. The debtors believe that the sale of the properties, individual driving ranges and ice skating properties, by public auction will enable the debtors to realize the highest and best offer, if any, for such properties, and thereby maximize the value for and benefit to the debtors' estates. RECOM SYSTEMS: Drops Chapter 7 for Chapter 11 --------------------------------------------- The Sacramento Business Journal reported on July 14, 2000 that Recom Managed Systems Inc. of Roseville, which said in May it would file for Chapter 7 bankruptcy and dissolve, has decided to reorganize its debt instead. So on June 26 it filed under Chapter 11 of the U.S. Bankruptcy Code. Creditors will meet this month to consider any debt payback plan proposed for the company. Recom (OTC:RMSIQ) sold flat-rate computer and Internet services. It laid off its 18 employees late last year after the funding it expected never came. Recom expects at least one investor to propose a debt repayment plan, to maintain the company as a publicly traded shell. That investor, who apparently will file a debt payment plan to get control of the company, has asked to remain anonymous, said Recom CEO Jack Epperson. Recom never filed for Chapter 7, Epperson said. "We found an investor interested in the public shell. And a (Chapter 11 debt) reorganization allows shareholders and creditors to get some value." Shell companies are sometimes bought by private companies that want to go public without going through an initial public offering. They get the shell and merge their existing company into it. Recom has declared debt claims of $ 1 million to $ 2 million. Its assets are encumbered by a lien favoring a secured creditor, Comerica Bank. The company has won a motion to let outsiders submit reorganization plans to the Bankruptcy Court immediately. Recom became publicly traded in November 1998, when it was formed in a reverse merger. It filled the shell of the inactive Mt Olympus Enterprises of Salt Lake City, which sold water and traded over the counter. When Recom shut down, Epperson said the company's idea and management were working, but its lack of operating capital kept it from moving forward. The company is 12 percent owned by Recoin Technologies, a Roseville vendor of government information systems. Recom Managed Systems never ran a profit its stock traded at 6 cents per share this week, off from a 52-week high of $ 4. SHARPSVILLE QUALITY: Filed for Chapter 11 Bankruptcy ---------------------------------------------------- Sharpsville Quality Products Co. filed for Chapter 11 bankruptcy protection. The president and chief executive, Harry Kokkins, said that the company started having trouble when its two major customers, American Alloy and Clark Material Handling, filed for bankruptcy. The foundry has assets of $3.8 million and debts of $4.9 million. Sharpsville, f/k/a Shenango Inc., is a maker of ingot molds that is used for manufacturing steel. Shenango was closed in the early 1990s, and its employees bought it for $1.3 million. (Associated Press 7/21) SILVER CINEMA: Theatres To Remain Open -------------------------------------- According to an article in The Detroit News on July 25, 2000, the Main Art Theatre and the Maple Art Theatre will remain open despite the bankruptcy of their parent company, Silver Cinemas International -- the parent company of Landmark Theatres, which owns both the Main Art and Maple Art. Landmark, the nation's largest chain of art cinemas, owns 52 theaters in 11 states. Silver Cinemas owns more than 80 discount and art-house theaters. "We are selectively closing some theaters," said Tom Andrus, chief financial officer for Silver Cinemas. "But (the Main Art and Maple Art) are theaters that are performing well." Silver Cinemas filed for Chapter 11 bankruptcy protection after it was forced to close 17 discount theaters that could not compete in a strong economy, when people can afford to pay full ticket prices at a plush multiplex. SOUTHERN MINERAL: Confirmation of Plan of Reorganization --------------------------------------------------------- Southern Mineral Corporation (OTC Bulletin Board: SMINQ.OB) and certain of its subsidiaries announced that on July 21, 2000 the United States Bankruptcy Court for the Southern District of Texas, Victoria Division entered the order confirming their Second Amended Plan of Reorganization filed May 2, 2000, as Amended, ("Plan"). The Plan is expected to become effective on August 1, 2000. Southern Mineral Corporation is an oil and gas acquisition, exploration and production company that owns interests in oil and gas properties located along the Texas Gulf Coast, Canada and Ecuador. The Company's principal assets include interests in the Big Escambia Creek field in Alabama and the Pine Creek field in Alberta, Canada. The Company's common stock is quoted on the OTC Bulletin Board under the trading symbol "SMINQ.OB". TEXAS HEALTH ENTERPRISES: Objections to Disclosure Statements ------------------------------------------------------------- Walter R. Geisler, individually and as legal representative of the estate of Ruth Simmons, having filed a proof of claim in the sum of $7.9mm pursuant to a final judgment, and is a secured creditor of the estates of Texas Health Enterprises, Inc. and HEA Management Group, Inc. The judgment is secured by two supersedeas bonds and a promissory note secured by a certain deed of trust, mortgage assignment, security agreement and financing statement on a piece of real property located in Wichita Falls, Texas. Geisler objects to the Disclosure Statement filed by the debtors and the Committee. Among Geisler's many objections, he states that the plan does not provide for the Geisler secured claim, and to the extent that the plan purports to class the Geisler claim with other claims arising from personal injury or wrongful death litigation, the plan violates Section 1122. Geisler's claim is not substantially similar to these other claims since it is fixed and liquidated, and secured by two bonds and a deed of trust. Essentially, Geisler claims that that the plan must provide for the treatment of Geisler's claim on the assumption that Geisler's claim is found to be wholly valid and enforceable. Geisler also states that the plan violates Section 510 since it provides the categorical subordination of the punitive damage portion of claims. Geisler states that the plan classifies separately claims containing punitive damages from other general unsecured claims. In addition, the plan purports to release the debtors' principals, officers and directors, and essentially disallows "Subordinated Claims" without any basis in law or fact. The plan also purports to pay nothing to "Subordinated Claims" and provides "any liens securing payment of such Claims shall be held for the benefit of Class 5 and 6 Creditors." Geisler asserts that this provision imposes a constructive trust or avoids any lien securing a punitive damage claim without the necessity of filing an adversary proceeding, and thereby violates the Bankruptcy Code and a lien creditor's due process rights. Geisler also complains of the inadequacy of the Disclosure Statement: That the Disclosure Statement fails to identify the debtor's principal assets, a $30 million malpractice claim against the attorneys and other parties who defended the debtors in Geisler's suit in state district court; What the effect will be on other creditors if the debtors fail to eliminate or subordinate the punitive portion of the Geisler claim or avoid the lien and bond securing that portion of the Geisler claim; The Disclosure Statement fails to provide any relevant or meaningful information to evaluate whether or not the claims against Woody Kern or other insiders should be released. Fails to provide or explain the basis for any claims of insiders, including Woody Kern's claims. Fails to identify the process by which the subordination of claims will be determined. The plan gives a cursory overview of indictments arising in 1992. The Disclosure Statement fails to disclose that the suit filed against Geisler and Simmons is subject to a Motion to Dismiss for the Plaintiff's failure to properly serves the suit. The Disclosure Statement fails to provide any insight into a business plan, does not explain occupancy level rates, or how they will increase, fails to describe avoidance actions, does not evaluate alter-ego claims. The Disclosure Statement fails to identify administrative claims, and gives no explanation as to losses over the past twelve months, fails to identify personal injury claimants, fails to describe state of Texas issues, and gives no explanation why payment of unsecured claims will be subordinated to the payment of on-going expenses and claims of the debtor. No explanation is provided as to why the debtors should not seek to refinance its corporate headquarters for 80-90% of its appraised value. The Disclosure statement indicates that the debtors are attempting to obtain a $6 million secured line of credit with an asset-based lender, fails to identify Geisler's secured claim on the Wichita Falls property, fails to identify PCK's partners and fails to describe any of the circumstances surrounding Horizon CMS transactions, and in particular, transfer of f $16.25 million from the debtors to Kern in 1996. Geisler asks that the court withhold approval of the Disclosure Statement. US DIAGNOSTICS: Shareholders To Sell 70 Facilities -------------------------------------------------- According to South Florida's Dbusiness.com, ballots were filled by shareholders of US Diagnostics (Nasdaq: USDL) to sell all of its 70 facilities. Diagnostics' board members will liquidate the company's assets, unless the imaging firm seeks a new way of earning money. President and CEO, Joseph A. Paul says "We are pleased that the stockholders have confirmed our plan to restructure the company," [and] "we intend to move quickly to implement the plan and we are determined to maximize shareholder value through the sale process or the reinvestment of the sale proceeds." US Diagnostics Inc., which is based in West Palm Beach does magnetic resonance imaging, mammography, ultrasound and X-ray technologies. After going public in 1994, reports from SEC states that, what pushed it deeper into debt was after it acquired other facilities. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. Debra Brennan, Yvonne L. Metzler, Edem Alfeche and Ronald Ladia, Editors. Copyright 2000. All rights reserved. ISSN 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *