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/raid1/www/Hosts/bankrupt/TCR_Public/000802.MBX T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, August 2, 2000, Vol. 4, No. 150 Headlines ADVANTA CORPORATION: Moody's Places Ratings On Review For Downgrade AGTSPORTS INC: Completed Debt Conversion Reduces Liabilities by $500,000 ALKHAIR CORP: Albany Airport Travelodge Files for Chapter 11 Protection AMERICAN GAMING: To Be Acquired by WOW Entertainment CLARIDGE HOTEL: Reports $2.6 Million Second-Quarter Net Income COEUR D'ALENE: Moody's Assigns Junk Ratings to Convertible Subordinated Debt FOAMEX INTERNATIONAL: Bank of Nova Scotia Bank Will Take Stock for Debt GENESIS/MULTICARE: Motion to Maintain Existing Bank Accounts HARNISCHFEGER INDUSTRIES: Plan of Reorganization Drafted; Negotiation Underway HARRISBURG EAST: Uni-Invest Withdraws Bid for Shopping Mall; New Auction 8/24 HEALTHCARE RESOURCES: Case Summary and 20 Largest Unsecured Creditors INTEGRATED HEALTH: BellSouth Argues It's Not a Utility Under Sec. 366 JITNEY JUNGLE: Louisiana Court Really Declines to Dissolve Lessors' Committee LG&E CAPITAL: Fitch's Downgrades Credit Rating to BBB+ LOEWEN GROUP: Posts a $76.3 Million Second-Quarter Loss LOEWEN GROUP: Forest Park Moves to Reject Shreveport Monument Sales Agreement MARINER HEALTH: Texas Appeals from Order Prohibiting Setoffs & Recoupment MARK IV: Moody's Downgrades $644 Million of Subordinated Debt Ratings to B3 NORTHLAND CRANBERRIES: Halts Dividends Until "Strategic Alternatives" Reviewed OMEGA HEALTHCARE: Wechsler Harwood Files Class Action Lawsuit PAGING NETWORK: Involuntary Case Summary PRIME SUCCESSION: Case Summary and 20 Largest Unsecured Creditors SAFETY-KLEEN: Committee Retains Milbank Tweed as Lead Counsel TOKHEIM CORPORATION: Bank Group & Noteholders Reach Agreement in Principle U.S. LEATHER: Diedrich Acquires Tannery for $1.22 Million; to Reopen Aug. 17 U.S. WOOD: Files for Chapter 11 Bankruptcy US WOOD: Case Summary and 20 Largest Unsecured Creditors ********* ADVANTA CORPORATION: Moody's Places Ratings On Review For Downgrade ------------------------------------------------------------- Moody's Investors Service placed all credit ratings of Advanta Corporation (Advanta)(senior at B1), Advanta National Bank (ANB)(deposits at Ba2) on review for possible downgrade. The rating review will focus on two main issues, according to Moody's: (1) Moody's will consider the extent to which recent regulatory actions may affect Advanta's access to capital markets and its funding costs, which could affect its core profitability. (2) Moody's will also review the credit quality of Advanta's portfolios, particularly its mortgage portfolios, to determine whether the company's asset quality has deteriorated on a longer-term basis. Advanta generates positive cash flow, Moody's noted, and the company has adequate liquidity. In May 2000, Moody's placed the credit ratings of Advanta and ANB on review, direction uncertain, after the company announced that it was exploring strategic options for its mortgage and leasing operations. The mortgage operation accounts for about 50% of Advanta's earnings and 80% of its managed assets. The review for direction uncertain reflected the major shift in strategic direction at the company, Moody's said, as well as the broad range of options for possible use of the proceeds of any sale. In May 2000 the Office of the Comptroller of the Currency (the OCC) and ANB concluded an agreement which restricted the bank's ability to issue brokered deposits. Deposits are a significant component of Advanta's overall funding mix. Pursuant to discussions related to that agreement, ANB has now reached additional agreements regarding the assumptions it will use in calculating the value of its retained interests in securitizations and its allowance for loan losses. The OCC has stressed in various public announcements that its examiners are focusing more on potential risks for subprime lenders in general and it is increasing the regulatory capital requirements for such lenders, Moody's said. The changes in assumptions announced today by Advanta may not affect the underlying economics of Advanta's businesses, Moody's added. However, the rating agency said, the increased regulatory scrutiny and higher capital requirements may increase the company's funding costs, which could affect the company's core profitability. For the last several quarters Advanta has experienced a rise in nonperformers and charge-offs in its mortgage lending and leasing operations, Moody's said. The review will seek to clarify whether these trends reflect a long-term deterioration in credit quality or other factors. The following ratings are affected: (a) Advanta Corporation-B1 unsecured senior debt; (P) B1 senior shelf; B2 subordinated debt; (P) B2 subordinated shelf; B3 junior subordinated debt; (P) "b3" preferred shelf; (b) Advanta National Bank-Ba2 long-term bank deposits; Ba3 other senior obligations; Ba3 issuer rating; Ba3 senior unsecured bank notes; B1 subordinated bank notes; B1 subordinated debt; E+ bank financial strength rating; (c) Advanta Capital Trust I-"b3" preferred stock (d) Advanta Capital L.L.C. -(P) "b2" preferred shelf (e) Advanta National Bank's ratings for short-term obligations are not- prime and are therefore not affected. Advanta Corporation, based in Horsham, Pa., has approximately $13 billion in managed assets. AGTSPORTS INC: Completed Debt Conversion Reduces Liabilities by $500,000 ------------------------------------------------------------------------ AGTsports, Inc. (OTC Bulletin Board: AGTP) announced the results of its ongoing reorganization and the completion of debt conversion agreements with creditors reducing liabilities by more than $500,000. As of July 31, 2000, the Company has successfully completed debt-to-equity conversion agreements eliminating over 85% of outstanding liabilities incurred from former golf technology R&D efforts, which were discontinued in 1998. AGTsports, Inc. is now pursuing a reorganization plan designed to increase shareholder value by engaging a new business opportunity unrelated to the sports or recreation industries. With the assistance of independent auditors, Brimmer, Burek, & Keelan, LLP, of Tampa, FL, the Company has secured a certified audit for fiscal 1999 while maintaining public filings as required by the Securities and Exchange Commission. During the quarter ending June 30, 2000, the Company has eliminated significant liabilities to improve its balance sheet with the goal of completing a business combination with third parties by fiscal year end, September 30, 2000. While no assurances can be provided AGTsports, Inc. will be successful in these efforts, the Company has received numerous inquiries, and preliminary negotiations continue with potential business partners. AGTsports, Inc. is an investment holding company formed to invest in all types of businesses. For more information contact AGTP at: agtoffice@aol.com Tel. 303.437-9434 Fax: 303.691-8884. ALKHAIR CORP: Albany Airport Travelodge Files for Chapter 11 Protection ----------------------------------------------------------------------- Alkhair Corp., doing business as Albany Airport Travelodge at 622 Watervliet Shaker Road, filed a Chapter 11 bankruptcy petition Wednesday in U.S. Bankruptcy Court in Albany, New York. It listed assets of $4.01 million and liabilities of $3 million. Among the liabilities is a $2.1 million debt to Heller First Capital Corp. of Chicago. (New Generation Research, Inc. 31-Jul- 2000) AMERICAN GAMING: To Be Acquired by WOW Entertainment ---------------------------------------------------- The shareholders of WOW Entertainment, Inc., agreed to purchase all the shares of American Gaming & Entertainment, Inc. (OTCBB:AGEL) owned by Shamrock Holdings Group, Inc. and Richard C. Breeden, as Trustee of the Bennett Funding Group, Inc. (the "Sellers"). As part of the agreement, the Sellers have agreed to convert all of the preferred stock of AGEL owned by them into 360,588,361 shares of common stock of AGEL. The agreement by the shareholders of the Company to purchase the shares of AGEL owned by the Sellers, and the Sellers' agreement to convert the preferred shares of AGEL owned by them, are both subject to the approval of the United States Bankruptcy Court for the Northern District of New York. WOW and the Sellers anticipate an August 17, 2000 hearing date on these matters by the Bankruptcy Court. Promptly upon a closing of the stock sale, WOW anticipates completing a reverse merger whereby WOW will become a wholly-owned subsidiary of AGEL. Based in Indianapolis, Indiana, WOW develops and produces sports entertainment programming -- like the syndicated television series WOW-Women of Wrestling to premiere this Fall. CLARIDGE HOTEL: Reports $2.6 Million Second-Quarter Net Income -------------------------------------------------------------- The Claridge Hotel and Casino Corporation, operator of the Claridge Casino Hotel here, reported a net income of $2.6 million for the second quarter of 2000, compared to a net loss of $269,000 in the second quarter of 1999. For the six months ended June 30, 2000, the Corporation reported net income of $1.4 million compared to a $1.5 million net loss in the same period last year. Earnings before interest, taxes, depreciation and amortization, when adjusted to eliminate the effects of Claridge's related limited partnership structure ("Adjusted EBITDA"), were $4.3 million for the quarter ended June 30, 2000, and $4.7 million for the six months ended June 30, 2000, compared to Adjusted EBITDA of $3.4 million for the second quarter in 1999 and $5.7 million for the first half in 1999. Net income and Adjusted EBITDA for the first six months of 2000 included a $ 1.9 million expense for professional fees for legal, financial and other services related to the Corporation's Chapter 11 proceedings. Net loss and Adjusted EBITDA for the first six months of 1999 include the effect of the receipt of the settlement of Claridge's claim against the contractor and architect that built its self-parking garage. On August 16, 1999, The Claridge Hotel and Casino Corporation and The Claridge at Park Place, Incorporated filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in order to facilitate a financial restructuring. Therefore, beginning on August 16, 1999, the Corporation ceased to record interest expense related to its 11-3/4% First Mortgage Notes. Interest expense for the Notes, for the period April 1, 2000 to June 30, 2000 and January 1, 2000 to June 30, 2000, would have been $3.0 million and $6.2 million, respectively. Casino revenue in the second quarter increased 1.1% over casino revenue in the same period in 1999 while Casino Costs and Expenses decreased $1.3 million. "We are pleased to continue to report improved operating results on a year-to- year basis," stated Frank Bellis, chief executive officer, "Eliminating the effect of reorganization items in 2000, we saw a $1.6 million year-to-year improvement in Adjusted EBITDA in the second quarter of 2000. For the first six months of 2000, Adjusted EBITDA increased $2.9 million on a year-to-year basis after eliminating the effect of the garage settlement last year and reorganization items this year." The Claridge Hotel and Casino Corporation, through its subsidiary, The Claridge at Park Place, Incorporated, operates the Claridge Casino Hotel in Atlantic City. The casino hotel opened in July 1981 and has 59,000 square feet of casino gaming space. The Claridge Hotel and Casino Corporation is a closely-held public corporation. Its Corporate Bonds are publicly traded on the New York Stock Exchange under the symbol CLAR02. COEUR D'ALENE: Moody's Assigns Junk Ratings to Convertible Subordinated Debt ---------------------------------------------------------------------------- Moody's Investors Service downgraded its ratings for Coeur d'Alene Mines Corporation's convertible subordinated debentures to Caa2 from B3. The three Coeur d'Alene debentures downgraded to Caa2 are: * $28.3 million of 6% convertible subordinated debentures due 2002; * $93.4 million of 6.375% convertible subordinated debentures due 2004; and * $107.3 million of convertible subordinated debentures due 2005. Moody's lowered the company's senior implied rating to B3 from B1 and its senior unsecured issuer rating to Caa1 from B2. Moody's withdrew its "b3" rating for Coeur d'Alene's $140 million of 7% mandatory adjustable redeemable convertible preferred securities (MARCS) as these securities have been converted into common shares. The outlook for all ratings remains negative. The downgrades reflect Coeur d'Alene's high leverage, sizable near-term debt amortization, diminished shareholders' equity, high operating costs, and heavy dependence on one mine, the Rochester mine. The ratings are supported by Coeur d'Alene's cash and short-term investments of approximately $82 million, which it can use to retire a portion of its debt, fund operating losses, and for capital investments. Coeur d'Alene's debt totals $229 million, of which $28 million matures in June 2002, $93 million in January 2004, and $107 million in October 2005. Moody's expects the company to utilize its cash balance to retire the 6% convertible subordinated debentures maturing June 2002. However, the ability of the company to retire or refinance the $200 million of debentures maturing in 2004 and 2005 is highly speculative at this time given its high-cost mines and silver pricing trends. Silver accounts for slightly more than half of Coeur d'Alene's revenues. Gold provides the balance of the revenues, but none of the company's gold mines are profitable at today's low gold price. The price of silver has declined in the last two years, but at $5 per ounce is only 4% below its five-year average. The company does not hedge its silver production. Coeur d'Alene's silver and gold mines are high-cost operations. In 1999, its primary silver mines operated at an average full cost of $5.00 per ounce, equal to the current silver price. Full costs and cash costs have increased in the first half of 2000, averaging $5.37 and $4.31 per ounce of silver, respectively. Costs have also risen at its gold mines, to a cash cost of $322 per ounce in the first half of 2000. The Rochester mine is the company's only active mine that has been consistently profitable in the last three years. Its high-cost mines are largely responsible for Coeur d'Alene's nine consecutive years of losses from continuing operations. Lower gold prices in the last three years have exacerbated its losses and required $239 million of asset impairment writedowns. The losses and asset writedowns have reduced shareholders' equity to $44 million as of June 30, 2000. The market value of Coeur d'Alene's equity is currently $60 million. Coeur d'Alene Mines Corporation, headquartered in Coeur d'Alene, Idaho, produces silver and gold from mines located in Nevada, Idaho, Chile, and Australia. It had revenues of $109 million in 1999. FOAMEX INTERNATIONAL: Bank of Nova Scotia Bank Will Take Stock for Debt ----------------------------------------------------------------------- Foamex International Inc. (Nasdaq: FMXI), the leading manufacturer of flexible polyurethane and advanced polymer foam products, announced that it has reached an agreement with The Bank of Nova Scotia relating to the shares of Foamex Common Stock pledged to the Bank by an affiliate of Trace International Holdings, Inc., which is in bankruptcy. The agreement provides for a transfer of the Foamex shares pledged to the Bank which avoids triggering the "change of control" provisions in the Foamex subsidiaries' credit agreements and the indentures for their public debt. Under the agreement, the Bank will become the owner of less than 25% of the outstanding shares of Foamex Common Stock. The remainder of the Foamex Common Stock pledged to the Bank will be exchanged for a new class of Non-Voting Convertible Preferred Stock of Foamex. The Non-Voting Preferred Stock will not be entitled to dividends unless Common Stock dividends are declared. These transactions are conditioned upon a settlement agreement between the Bank and the Trustee for Trace being approved by the U.S. Bankruptcy Court for the Southern District of New York. Upon completion of the transaction, Trace will no longer own any shares of Foamex Common Stock. Jack Johnson, President and Chief Executive Officer of Foamex, stated, "We are extremely pleased by the successful resolution of the "change of control" issue that was created by the Trace bankruptcy. We are especially grateful to The Bank of Nova Scotia for working so diligently with us to effect a solution that is positive for all parties. We believe that completion of this transaction will instill greater confidence in Foamex by our customers, suppliers, creditors and shareholders." Foamex, headquartered in Linwood, Pennsylvania, is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The company also manufactures high-performance polymers for diverse applications in the industrial, aerospace, electronics and computer industries as well as filtration and acoustical applications for the home. Revenues for 1999 were $1.3 billion. For more information visit the Foamex web site at http://www.foamex.com. GENESIS/MULTICARE: Motion to Maintain Existing Bank Accounts ------------------------------------------------------------ The Operating Guidelines promulgated by the United States Trustee require that a chapter 11 debtor-in-possession close all of its bank accounts immediately following the commencement of a chapter 11 petition. The chapter 11 debtor is then supposed to open three post-petition bank accounts: one for general receipts and disbursements, one for payroll and one for taxes. Genesis Health Ventures, Inc., and its debtor-affiliates tell Judge Walsh that they maintain more than 250 pre-petition bank accounts into which they routinely deposit and from which they routinely withdraw funds by checks, wire transfers, and automated clearinghouse transfers. The Debtors believe that transition to chapter 11 will be smoother and more orderly if the Bank Accounts are continued. The MultiCare Companies, Inc., and its debtor- affiliates tell the Court that they maintain approximately 160 pre-petition bank accounts. The Debtors believe that their transition into chapter 11 will be smoother and more orderly if the Bank Accounts are left in place. Genesis and MultiCare assures Judge Walsh that checks issued or dated pre-petition will not be honored absent a prior order of the Court. Judge Walsh granted the Debtors relief from the U.S. Trustee's Operating Guidelines, authorizing the Debtors to use their prepetition bank accounts and treat these as debtor-in-possession accounts. (Genesis/Multicare Bankruptcy News, Issue No. 2; Bankruptcy Creditors Service Inc., 609/392-0900) HARNISCHFEGER INDUSTRIES: Plan of Reorganization Drafted; Negotiation Underway ------------------------------------------------------------------------------ Harnischfeger Industries, Inc., et al., tells the U.S. Bankruptcy Court in Wilmington that it completed drafting of a proposed plan of reorganization. The plan has not been filed with the Court. The Company says that it is still meeting with its Official Committee of Unsecured Creditors to "resolve certain pending issues." The Company, which has been operating under Chapter 11 protection since June 7, 1999, stated that although progress has been made, "a great deal of work and negotiation, however, must still be accomplished before a consensual reorganization plan can be filed with the court." (New Generation Research, Inc. 31-Jul-2000) HARRISBURG EAST: Uni-Invest Withdraws Bid for Shopping Mall; New Auction 8/24 ----------------------------------------------------------------------------- The 890,000-square-foot shopping mall, located in Swatara Twp. will be up for auction again after Uni-Invest Partnership's withdrew its bid for the property, the Patriot-News relates. U.S. Bankruptcy Court Judge Robert Woodside has scheduled a hearing to discuss new auction procedures for Harrisburg East Mall. The next planned auction will be held in Aug. 24. Lloyd T. Whitaker, an adviser to EQK in Atlanta, will ask the court and creditors to postpone the Aug. 24 schedule and move it to September to give seven or eight qualified buyers aside from Uni-Invest a full and fair opportunity to participate. HEALTHCARE RESOURCES: Case Summary and 20 Largest Unsecured Creditors ---------------------------------------------------------------------- Debtor: Healthcare Resources Corp. 101 East State Street Kennett Square, PA 19348 Type of Business: Healthcare Resources is a nursing center located in Willowgrove, Pennsylvania. Healthcare Resources provides skilled care for approximately 145 resident patients. Approximately 170 employees are staffed at Healthcare Resources. Chapter 11 Petition Date: July 31, 2000 Judge: Peter J. Walsh Court: District of Delaware Bankruptcy Case No.: 00-03196 Debtor's Counsel: Michael F. Walsh, Esq. Gary T. Holtzer, Esq. Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153 Tel:(212)310-8000 Mark D. Collins, Esq. Richard, Layton & Finger, P.A. One Rodney Square P.O. Box 551 Wilmington, DE 19899 Tel:(302) 658-6541 Total Assets: $ 11,141,000 Total Debts : $ 31,457,000 20 Largest Unsecured Creditors Sysco Food Services Inc. Trade Debt $ 26,583 Upper Moreland/Hatboro Trade Debt $ 11,511 Peco Energy Trade Debt $ 10,348 General Healthcare Resources Inc. Trade Debt $ 5,616 Mediq Incorporated Trade Debt $ 5,244 Bunzl Philadelphia Trade Debt $ 5,046 Firstat Nursing Services Trade Debt $ 4,007 Lehigh Valley Dairies Inc. Trade Debt $ 3,408 MPH Inc. Trade Debt $ 2,705 Decubiti Concepts LLC Trade Debt $ 2,248 Bell Atlantic Trade Debt $ 2,064 Favorite Nurses Trade Debt $ 2,018 National Industries Trade Debt $ 2,011 Montco Industrial Sanitation Trade Debt $ 1,836 Phoenix Mechanical Inc. Trade Debt $ 1,763 American Kitchen Machinery Trade Debt $ 1,731 On Site Health Services PC Trade Debt $ 1,723 Abington Memorial Hospital Trade Debt $ 1,557 Ergo Sciences Inc. Trade Debt $ 1,545 Low Rise Elevator Co. Inc. Trade Debt $ 1,341 INTEGRATED HEALTH: BellSouth Argues It's Not a Utility Under Sec. 366 --------------------------------------------------------------------- BellSouth Communications Systems, LLC only installs and maintains telecommunications hardware and software which Integrated Health Services bought from BellSouth and others. As such, BellSouth argues, it should not be subject to the Court's order prohibiting utilities from discontinuing, altering, or refusing services to the Debtors. The Debtors agree in a stipulation that they inadvertently included BellSouth in their motion as a utility subject to section 366 of the Bankruptcy Code, that BellSouth is actually not a utility for purposes of the Court's restraining order. Judge Walrath signed the order. (Integrated Health Bankruptcy News, Issue No. 6; Bankruptcy Creditors Service Inc., 609/392-0900) JITNEY JUNGLE: Louisiana Court Really Declines to Dissolve Lessors' Committee ----------------------------------------------------------------------------- The efforts of the Creditors Committee to dissolve the Lessors' Committee appointed by the United States Trustee in New Orleans, Louisiana, after the case was transferred there from Delaware, was rebuffed for a second time. The Bankruptcy Court in Louisiana has denied the Creditors Committee's motion for reconsideration of the Court's prior decision not to disband the Lessors Committee appointed in Jitney Jungle's chapter 11 cases. Separately, F&D Reports' Scrambled Eggs publication reports, the Jackson, Mississippi-based grocer received an extension of its time to assume or reject the leases for its remaining locations until September 10, 2000. Additionally, Jitney has queued-up motions to sell (a) three parcels of land, two with stores, fixtures and equipment, and (b) the fixtures and equipment in 16 locations for which it has previously rejected the leases. LG&E CAPITAL: Fitch's Downgrades Credit Rating to BBB+ ------------------------------------------------------ Fitch has downgraded the credit ratings of LG&E Capital Corp. from 'A-' to 'BBB+' following LG&E Energy Corp.'s $194 million after-tax write-down, $155 million of which relates to its non-regulated power supply obligations. LG&E Capital Corp.'s commercial paper rating remains 'F2'. The Outlook is Negative. The $155 million after-tax write-down primarily reflects an increase to reserves for higher loads, both forecasted and year to date, related to Oglethorpe Power (OPC) all-requirements supply contract. In addition, the charge reflects a change in the methodology for calculating its future obligations to supply under the OPC contract from an NPV amount to a nominal amount, and adjustments to reflect actual experience under certain power supply contracts. It is important to note that although the $155 million charge reflects both increased volumes and higher near-term price curve, the possibility of additional write-offs remains. Additionally, LGE's leverage ratio continues to be adversely affected from a series of write-downs from its obligation to supply. Since July 1998, the company has written off nearly $600 million in equity, resulting in significantly higher debt levels; debt/capitalization at June 30, 2000 was impacted by roughly 3.5 percent by the $194 million charge and has increased to approximately 64.5 percent on an unadjusted basis. To help hedge both its jurisdictional and non-jurisdictional supply obligation, LGE will purchase up to 10 gas-fried combustion turbines to provide a physical back-stop to its peak requirements. Some of the turbines will be built in the Southeast region to help cover the OPC load and are expected to be completed and operational by 2002. The company expects to finance these facilities with an off-balance-sheet financing. Other turbines could be utilized to cover the utilities' native load growth and will be financed at the utility level. With near-term turbine progress payments and commercial paper rollovers, LGE's liquidity and debt repayment have some level of execution risk. The company is currently arranging an accounts receivable securitization of its four primary subsidiaries (Louisville Gas & Electric, Kentucky Utilities, Western Kentucky Energy and LG&E Energy Marketing) with expected proceeds in the $100-125 million range. Additionally, the company continues to work toward a sale of midstream gas properties in the Southwest. An additional charge of $27 million reflecting the market value versus book value of these properties has also been booked in 2Q'00. LGE and PowerGen now expect their merger to close by the end of the year, pending completion of remaining regulatory approvals and satisfaction of other conditions necessary for closing. The company received notice today that it has obtained clearance under the Hart-Scott-Rodino Act. The transaction previously has been approved by the shareholders of both companies, the Kentucky Public Service Commission, the Virginia State Corporation Commission and the FERC. PowerGen's acquisition of LGE is not expected to be affected by these events. Under the merger agreement, charges related to LGE's OPC supply obligation have been excluded as a material adverse change. The company also took a $12 million charge for expenses related to the Powergen acquisition, rounding off the 2Q'00 charge. The credit ratings of Louisville Gas & Electric Company and Kentucky Utilities Company (KU) remain on Rating Watch Negative, where they were placed following the announced PowerGen plc acquisition of LGE for approximately $5.4 billion. Some level of convergence is expected between the utilities' credit ratings and those of LGE upon completion of PowerGen acquisition and/or as the acquisition financing, management and strategic plan for LGE becomes more certain. Fitch currently rates Louisville Gas & Electric's senior secured debt 'AA-', non-collateralized PCRBs 'A+', preferred stock 'A' and commercial paper 'F1'. Fitch rates KU's senior secured debt 'AA-', preferred stock 'A' and commercial paper 'F1'. Fitch is an international rating agency that provides global capital market investors with the highest quality ratings and research. Dual headquartered in New York and London with a major office in Chicago, Fitch rates entities in 75 countries and has some 1,100 employees in more than 40 local offices worldwide. The agency, which is a combination of Fitch IBCA and Duff & Phelps Credit Rating Co., provides ratings for Financial Institutions, Corporates, Structured Finance, Insurance, Sovereigns and Public Finance Markets worldwide. LOEWEN GROUP: Posts a $76.3 Million Second-Quarter Loss ------------------------------------------------------- Loewen Group, Inc., posted a net loss of $76.3 million for the second quarter, Reuters reports. John Lacey, Loewen's chairman, says that the funeral home is making progress with its reorganization, and the loss posted was due to "generally slow business conditions" of the funeral homes and cemetery operators in North America. In June 1999, Reuters recalls, Loewen filed for bankruptcy protection in United States and Canada because of its $2.3 billion debt. As part of its reorganization plan, the funeral home operator asked for approval from the bankruptcy court to sell some of its properties. Out of its 1,300 funeral homes and cemeteries, 371 was approved earlier this year by the court to be sold. LOEWEN GROUP: Forest Park Moves to Reject Shreveport Monument Sales Agreement ----------------------------------------------------------------------------- Forest Park Cemetery of Shreveport, Inc., Forest Park Cemetery West of Shreveport, Inc. and Loewen (Georgia), Inc., f/k/a Southeastern Advertising and Sales System, Inc., sought and obtained authority from Judge Walsh to reject a sales agreement with Shreveport Monument Cemetery under which Shreveport has the exclusive right to supply granite monuments for sale within the Cemeteries for 15 years beginning in June, 1994. Loewen told the Bankruptcy Court that Shreveport is currently not satisfying any orders for granite monuments placed by Forest Park on behalf of customers of the cemeteries. Consequently, Forest Park is unable to meet customer demand and has been forced to provide refunds to a number of customers. As a result, Forest Park's business operations and reputation with customers in the Shreveport, Louisiana community are suffering significantly. (Loewen Bankruptcy News, Issue No. 24; Bankruptcy Creditors Service Inc., 609/392- 0900) MARINER HEALTH: Texas Appeals from Order Prohibiting Setoffs & Recoupment ------------------------------------------------------------------------- Displeased with Judge Walrath's denial of the Nine States' Motion to vacate the first-day order prohibiting certain payors from withholding, offsetting, or recouping payments owed to debtors, the Texas Department of Human Services filed a notice of appeal indicating its intention to put Judge Walrath's ruling in the Mariner Health cases before the United States District Court for the District of Delaware for review. The State of Texas puts four issues before the District Court on appeal: (1) Whether the Bankruptcy Court lacked jurisdiction, as a result of the states' assertion of their Eleventh Amendment rights, to enter an order under 11 U.S.C. section 105(a) which prohibited State Medicaid Agencies from withholding, offsetting, or recouping payments awed to Debtors against any prepetition claims; (2) Whether the Bankruptcy Court erred in failing to require the Debtor to file an adversary proceeding in accordance with Bankruptcy Rule 7001 to seek the injunctive relief awarded against the Texas Department of Human Services; (3) Whether the Bankruptcy Court erred by entering a "comfort order" over the State's objection that it violated the State's Eleventh Amendment rights in violation of the Article III requirement that there be a "case of controversy;" and (4) Whether the Bankruptcy Court erred as a matter of law in denying the Texas Department of Human Services' motion to vacate the injunction which prohibit it from withholding, offsetting, or recouping payments owed to Debtors against any prepetition claims. (Mariner Bankruptcy News, Issue No. 7; Bankruptcy Creditors Service Inc., 609/392-0900) MARK IV: Moody's Downgrades $644 Million of Subordinated Debt Ratings to B3 --------------------------------------------------------------------------- Moody's Investors Service downgraded all of the ratings of Mark IV Industries, Inc. Mark IV's three issues of publicly traded subordinated notes aggregating $644 million were downgraded to B3, from Ba2. The $249 million of 7.5% senior subordinated notes due 2007 are expected to remain outstanding upon closing the proposed transaction, whereas the $250 million ($120 million remaining balance) of 7.75% senior subordinated notes due 2006 and the $275 million of 4.75% convertible subordinated notes due 2004 are entitled to be repaid upon a change of control. The existing $200 million senior secured revolving credit facility was downgraded to Ba3, from Baa3. Moody's also assigned a Ba3 rating to all tranches of the company's new senior secured credit facilities, which total $1,187.5 million. The borrowers consist of one U.S. operating subsidiary and two Italian operating subsidiaries ("Subsidiary Bank Borrowers") of holding company Mark IV. All borrowers are guaranteed by Mark IV. The senior implied rating has been downgraded to Ba3, from Baa3, and the senior unsecured issuer rating has been downgraded to B1, from Ba1. The company's debt ratings had been placed on review for possible downgrade on May 31, 2000, in response to the company's announcement that it had executed a definitive merger agreement with MIV Acquisition ("MIV"). MIV is an entity controlled by BC Partners, a European private equity group (which just raised its seventh fund in the amount of 3.5 billion Euros), along with Interbanca S.p.A, a leading Italian merchant bank. The company's new ratings incorporate the impact of the negotiation of definitive agreements regarding the structure and financing of the sale transaction, as well as the operating strategy for the company going forward. The ratings of the bank credit facilities and subordinated debt obligations that are being refinanced will be withdrawn upon their repayment in connection with the MIV merger transaction. The rating outlook is stable. The rating actions reflect Mark IV's high pro forma leverage, weakening cash interest coverage, low return on assets, and negative tangible equity due to pro forma goodwill equal to over one-third of total assets. The ratings additionally reflect exposure to several other risk factors, including the challenge of integrating recent acquisitions and successfully modifying the company's strategic focus. Over the past several years, Mark IV has undergone significant restructuring activity and has additionally executed a series of acquisitions and divestitures. These efforts are part of an ongoing process to improve the company's return on assets and refocus its operations on higher- margin and technology-oriented niche businesses, where it can achieve growth through leading market positions. While growth has been slow and the company's performance has been difficult to evaluate during this transition period, management fully believes that the company is now seeing the benefits of its repositioning activities. There is some flexibility under the new senior secured revolving credit facility to use revolving credit debt to finance future acquisitions, but any sizable acquisitions would require approval by all lenders. Mark IV's current business lines have widely varying margins. Approximately half of Mark IV's sales are to customers within the cyclical automotive industry, which is believed to be at a high point in its current cycle. However, Mark IV's automotive segment performance has been outpacing its industrial segment performance. The company is in the process of expanding globally, in order to meet customer needs. While this geographic diversification benefits the company, a higher portion of the revenues and asset base will reside outside the US. Mark IV is subject to high tax rates as a by-product of its foreign operating activities. In order to reduce the company's effective tax rate, the pending buyout transaction is being structured to include a high proportion of deeply subordinated securities with tax deductible PIK interest. The rating actions also consider Mark IV's strengths. These include the company's competitive state-of-the art manufacturing facilities, available capacity for growth, strong backlog of business, Tier I supplier status for 90% of its automotive OEM business, limited aftermarket activities, diversified and long-standing customer base and projected capital expenditures levels equal to roughly 90% of depreciation. Rationalization efforts over the past few years have resulted in a company with greater operating efficiencies, although further improvement is anticipated. The increased emphasis on technology and world class manufacturing facilities has resulted in high barriers to entry and strong growth prospects. Mark IV benefits from an experienced management team, most of whose members are expected to remain with the company upon closing the buyout transaction. While Mark IV bought back more than 25% of its outstanding shares during the last couple of years in reaction to its low stock price, this drain on liquidity will be eliminated when the company becomes private upon closing of the pending transaction. The company is also expected to benefit from the sponsorship of BC Partners and Interbanca S.p.A. The stable outlook reflects Mark IV's completion of the majority of its restructuring activities, and the upgrading of its manufacturing facilities. Upon closing the pending transaction as a private company, Mark IV may be better positioned to focus on producing operating results in the absence of pressures from the public markets. The MIV merger transaction is valued at approximately $2.1 billion ($23 per share). This is about 7.7x fiscal year end February 29, 2000 EBITDA. The purchase price represents a premium of about 8% over the company's stock price upon execution of the merger agreement on June 23, 2000, and 20% over the company's stock price prior to the announcement of the its intention to explore strategic alternatives. In order to finance the acquisition of Mark IV's stock, a total of $275 million in common equity will be invested by BC Partners, Interbanca, management ($10 million) and certain other parties. The following funds will also be invested in the form of deeply subordinated PIK securities with tax-deductible interest: A $260 million Equity Asset Sales Bridge ("EASB") initially provided by the Royal Bank of Scotland and Interbanca will be unconditionally guaranteed by funds advised by BC Partners and investors in the Interbanca syndicate. In the event that this deeply subordinated security remains outstanding after two years, it will then be assumed by the funds which provide the guarantee. The security will bear an interest rate of Libor + 1.25% on a PIK basis, and its guarantors will also receive a fee (in the form of PIK notes) equal to 11.6% minus the interest cost. The EASB will have a 10-year maturity. A $200 million deeply- subordinated 11.6% PIK stock loan will be provided by institutional investors selected by BC Partners, and a similar $80 million 11.6% shareholder PIK loan will be provided by funds advised by BC Partners. These securities will have maturities of nine and 10 years, respectively. None of these deeply subordinated securities will benefit from covenants, incurrence tests, or acceleration rights prior to full repayment of the senior secured credit facilities. However, there is potential for prepayment of the EASB loan, PIK stock loan and shareholder PIK loan interest and principal, in the event that there are substantial sales of certain assets. The PIK stock loan also contains change of control provisions. The senior secured credit facilities will consist of a $200 million six-and- one-half year revolving credit facility, a $587.5 million six-and-one-half year term loan A, and a $400 million six-and-three-quarter-year term loan B. The term loan B will have an accordion feature which will automatically extend its final maturity to eight years on such date that the 7.5% senior subordinated notes due 2007 are repaid in full. The co-borrowers under the credit facilities will be comprised of one domestic operating subsidiary and two Italian operating subsidiaries of Mark IV: Dayco Products, Inc. (US), Dayco Europe SrL (Italy) and Lombardini SrL (Italy). Amounts borrowed on the closing date of the transaction will refinance existing debt and cover fees and expenses pertaining to the transaction. Subsequent usage will cover working capital and general corporate needs. The Ba3 rating reflects the benefits and limitations of the collateral package, which will consist of a first priority interest in all assets of holding company Mark IV and any its domestic subsidiaries. No collateral pledges will be supplied by the non- domestic subsidiaries. Each of the credit facilities will receive a pari passu interest in the collateral package, and collateral sharing in the event of bankruptcy will be required among the lenders in all facilities, no matter which country the funds were drawn in. Additionally, guarantees will be provided by Mark IV and its domestic direct and indirect subsidiaries, and pledges will be provided for 100% of the stock of Mark IV and its direct and indirect domestic subsidiaries and for up to 65% of the stock of its foreign subsidiaries. The senior secured lenders are entitled to receive dollar-for- dollar debt prepayment out of at least the first $420 million in net proceeds received in connection with sales of certain assets, and 100% of the net proceeds from sales of all other assets. The revolving credit facility will be drawn at approximately $45 million upon closing. Up to $100 million (maximum $50 million in connection with any one acquisition) of this facility may be borrowed on a revolving basis in connection with permitted acquisitions. The Ba3 rating of the senior secured bank facilities is the same as the senior implied rating, reflecting limited tangible asset coverage. The issuer of the $250 million of the senior subordinated notes due 2007 is Mark IV, which is a holding company. The B3 rating reflects the contractual and new structural subordination of these notes to the secured credit facility. In contrast to two other subordinated note issues totaling $525 million which are required to be repaid upon the merger transaction, these unsecured notes do not benefit from any guarantees, incurrence tests restricting a change in control, limitations sales of assets, or additions of new debt. There is potential for certain new junior PIK securities to receive principal and interest payments ahead of these notes, in the event that there are substantial net proceeds from sales of certain assets, if any. In the event of another change of control, these remaining senior subordinated notes could potentially be repaid subsequent to the new PIK securities being provided through the equity funds. Upon closing the go-private transaction, leverage will initially be substantial. For example, pro forma LTM August 31, 2000 "Total debt/EBITDA" (excluding all of the deeply subordinated PIK notes) is 4.4x. This ratio would be significantly greater, were any of the deeply subordinated PIK notes included by virtue of certain debt-like characteristics. Pro forma LTM August 31, 2000 interest coverage, as measured by "EBITDA-CapEx/Cash Interest" is moderate at 1.8x. The company's future cash flow is expected to benefit from capital expenditures levels that are slightly less than depreciation. Since most of the facilities have already been upgraded to state-of-the-art status with adequate capacity, the company would have some flexibility to temporarily curtail capital spending. Pro forma debt-to-book capitalization will be moderate at 61% upon closing. Tangible book net worth will be negligible, due to the substantial goodwill that will be created upon the merger transaction. The pro forma EBITA return on total assets is substandard at less than 8%. Mark IV Industries, Inc., headquartered in Amherst, New York, is a leading manufacturer of engineered systems and components in three broad product categories: (i) Power Transmission and Engine-Related Products, which employ power transmission, air intake and power train technologies; (ii) Fluid Management, which applies fluid transfer, fluid power (hydraulics) and fuel handling technologies; and (iii) Transportation, which primarily consists of information display systems and intelligent vehicle highway systems (including EZ Pass). These systems and components serve automotive and industrial markets and are sold to original equipment manufacturers and as replacement products in the aftermarket. Mark IV enjoys Tier I supplier status with many of the world's largest automotive manufacturers. The company's customer base is located in diverse geographic markets, including the United States and Europe, and, to a lesser extent, Canada, South America and the Asia and Pacific Region. Mark IV operates 65 manufacturing facilities and 51 distribution and sales locations and employs approximately 15,600 people in 14 countries. Mark IV's revenues are approximately $2 billion per annum. NORTHLAND CRANBERRIES: Halts Dividends Until "Strategic Alternatives" Reviewed ------------------------------------------------------------------------------ Northland Cranberries Inc. suspended its quarterly cash dividend payments on Class A and Class B shares until it concludes it review of "strategic alternatives." The policy will be reviewed each quarter, the company says. Northland said in March it had hired U.S. Bancorp Piper Jaffray Inc. and Bank of America Securities L.L.C. to consider strategic alternatives, including the possible sale of the entire company or assets such as its bottle juices, because of continued low prices for its cranberry juice. Wisconsin Rapids- based Northland is a grower, handler, processor and market of cranberries and cranberry products. (Milwaukee Bizjournals.com 27-Jul-2000) OMEGA HEALTHCARE: Wechsler Harwood Files Class Action Lawsuit ------------------------------------------------------------- A class action against Omega Healthcare Investors, Inc. (NYSE: OHI) and certain of its officers and directors has been commenced in the United States District Court For The Southern District Of New York by Wechsler Harwood Halebian & Feffer LLP. The suit is on behalf of shareholders who purchased the common stock of Omega between April 13, 1999 and May 11, 2000. The complaint alleges that Omega and certain of its directors and executive officers violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that the defendants issued materially false and misleading financial statements contained in filings with the Securities and Exchange Commission and press releases, that, inter alia, overstated the Company's assets, revenues, income and earnings per share during the Class Period and further misrepresented the likelihood of continuing the payment of its existing dividend. On May 11, 2000, the Company finally announced that it had negotiated a cash infusion to stave off bankruptcy and would nonetheless cut its dividend. On this news, Omega's stock fell to between $4.00 and $5.00 per share. The Company's common stock had traded as high as $26.00 per share on the NYSE during the Class Period. However, the individual defendants and certain insiders fared better. During the Class Period, and shortly before, the individual defendants sold over thousands of shares of the Company's common stock at a price almost four times higher that Omega's stock was worth at the end of the Class Period. Contact, at 877-935-7400, Ramon Pinon, IV, Esq., for further information. PAGING NETWORK: Involuntary Case Summary ----------------------------------------- Alleged Debtor: Paging Network, Inc. 14911 Quorum Drive Dallas, Texas 75240 Type of Business: A leading provider of wireless communications services through U.S. and Canada with 8.4 million units in service Involuntary Petition Date: July 14, 2000 Case Number: 00-03098 Court: District of Delaware Judge: Gregory M Sleet Petitioners' Counsel: Seward & Kissel LLP One Battery Park Plaza New York, NY 10004 Tel:(212) 574-1200 Potter Anderson & Corroon LLP 1313 N. Market Street Wilmington, DE 19899 Tel:(302) 984-6000 Petitioners: Everest Capital Master Fund L.P. Peter Jinks and Eric Graham The Bank of Butterfield Bldg. 65 Front St., 6 Fl. Hamilton HM12 Bermuda Bond Debt $ 2,431,173 Quantum Energy Growth Partners C.V. Peter Jinks and Eric Graham The Bank of Butterfield Bldg. 65 Front St., 6 Fl. Hamilton HM12 Bermuda Bond Debt $ 1,014,576 Everest Capital Senior Debt Fund L.P. Bond Debt $ 50,000 PRIME SUCCESSION: Case Summary and 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Prime Succession, Inc. 3940 Olympic Boulevard, Suite 500 Erlanger, KY 41018 Type of Business: Debtor is the fifth largest provider of funeral, cremation and cemetery services in the United States, with funeral homes and cemeteries in nineteen states, primarily in non- urban areas. Chapter 11 Petition Date: July 31, 2000 Court: District of Delaware Bankruptcy Case No.: 00-02969 Debtor's Counsel: Pauline K. Morgan, Esq. Michael R. Nestor, Esq. Young Conaway Stargatt & Taylor, LLP 11th Floor-rodney Square North P.O. Box 391 Wilmington, Delaware 19801 Tel:(302)571-6600 Alan W. Kornberg, Esq. Jeffrey D. Saferstein, Esq. Dana S. Safran, Esq. Nkiruka R. Nwokoye, Esq. Penny L. Dearborn, Esq. Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the Americas New York, New York 10019 Tel:(212) 373-3000 Total Assets: $ 405,546,414 Total Debts : $ 314,423,963 20 Largest Unsecured Creditors U.S. Trust Company of New York 114 West 47th Street New York, NY 10036 Senior Sub Tel:(212) 852-1676 Notes $ 100,000,000 Batesville Casket Company, Inc. Highway 46 Batesville, IN 47006 Note $ 2,564,287 Jeff Gamble 405 Sharps Springs Road Former Owner Winchester, TN 37398 Obligation $ 2,555,777 Donald D. & Betty H. Taylor 512 Adams Street, S.W. P.O. Box 862 Former Owner Huntsville, AL 35801 Obligation $ 1,044,703 Greg Hilgendorf 114 Shelby Street Former Owner Covington, KY 41011 Obligation $ 749,066 Virgil L. Simpson P.O. Box 367 Former Owner Newburgh, IN 47630 Obligation $ 653,094 Wesbanco Bank Parkersburg 260 Gihon Village P.O. Box 3030 Former Owner Parkersburg, WV 26103 Obligation $ 346,617 Arnold D. Brown P.O. Box 5036 Former Owner Everglades City, FL 34139 Obligation $ 289,353 John R. Johnson P.O. Box 333 Former Owner Monroeville, AL 36461 Obligation $ 288,843 Frederick B. Hunter 1523 SE 7th Street Former Owner Ft. Lauderdale, FL 33316 Obligation $ 270,897 Cheryl Hunter Sullivan 4880 Hunter's Way Former Owner Boca Raton, FL 33434 Obligation $ 270,897 Don Bierschwale 711 S.E. Military Former Owner San Antonio, TX 78214 Obligation $ 258,450 Shoreline Bank Former Owner Obligation $ 232,523 Applied Retail Systems, Inc. Note $ 229,530 Joe Weatherford Former Owner Obligation $ 228,193 James R. Starks Former Owner Obligation $ 211,339 Charles A. Kern Former Owner Obligation $ 202,619 Robert L. Starks Former Owner Obligation $ 185,493 Bradford Lee Hunter Former Owner Obligation $ 180,598 Frederick B. Hunter, III Former Owner Obligation $ 180,597 SAFETY-KLEEN: Committee Retains Milbank Tweed as Lead Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Safety-Kleen's chapter 11 cases pending before the Bankruptcy Court in Wilmington advises the Court that it selected the New York and Los Angeles-based law firm of Milbank, Tweed, Hadley & McCloy as its lead counel in the Debtors' chapter 11 cases. Luc A. Despins, Esq., Peter R. Roest, Esq., and Susheel Kirpilani, Esq., lead the engagement. A formal application to retain the Firm, the Committee tells Judge Walsh, will be filed in the near future. Other matters of greater significance occupy the Committee's and Mr. Despins' time at the moment. (Safety-Kleen Bankruptcy News, Issue No. 5; Bankruptcy Creditors Service Inc., 609/392-0900) TOKHEIM CORPORATION: Bank Group & Noteholders Reach Agreement in Principle -------------------------------------------------------------------------- Tokheim Corporation (OTCBB: TOKME) announced that it has reached an agreement in principle, subject to definitive documentation, with representatives of its bank group and an informal committee of holders of its senior and junior subordinated notes to restructure the debt outstanding under the Company's bank credit facility and subordinated notes which at May 31, 2000 totaled approximately $504 million. It is anticipated that the restructuring will be accomplished through a prepackaged plan of reorganization for the Company and its U.S. subsidiaries pursuant to Chapter 11. The Company's non-U.S. subsidiaries are not expected to be affected. The Company will continue to pay its employees and trade creditors in the normal course of business. The restructuring plan will include continuing payment of these obligations during the restructuring period. Douglas K. Pinner, Chairman, President and Chief Executive Officer of Tokheim, stated: "The agreement in principle represents a major step to vastly improve the Company's liquidity, which has been strained by the substantial downturn in demand for petroleum dispensing systems caused by the broad consolidation among major oil companies and their subsequent reduction in capital investments as well as by the weakening of European currencies against the U.S. dollar. "The onset of the downturn and weakened European currencies also coincided with the first year of the Company's three-year integration plan following the acquisition of the RPS division of Schlumberger in October, 1998 which effectively doubled the Company's revenue base. The Company's revenue base had previously doubled upon the acquisition of Sofitam in 1996. The integration plan was accelerated in the face of rapidly changing business conditions and is both ahead of schedule and realizing economic benefits beyond those originally projected. The benefits of the accelerated integration mitigated but could not negate the impact on Tokheim of the unprecedented and severe industry downturn. "Once the planned restructuring is completed, Tokheim will emerge as a stronger company with a sound financial structure that is appropriate not only for today's level of business activity but also for the expected future growth of the business as the major oil companies and the distributor business segment resume normal levels of capital investment. "The restructuring of our domestic operations does not involve any factory closures or headcount reductions. Rather, it will provide the reinforced financial foundation on which Tokheim can continue to build its position as the global leader in its industry, bringing continued leadership in technology, quality focus and customer service." Under the terms of the agreement in principle, the existing bank credit agreement will be restructured to a $240 million debt facility comprising a 5 year senior term facility of approximately $140 million and a 5 year trust debt facility of $100 million. Interest on the trust debt facility will be accrued but not paid until at least December 31, 2002. Mr. Pinner added: "Importantly, our new agreement with the Company's bank group will substantially improve our liquidity by providing an additional $50 million debtor-in-possession facility to the Company, which will be converted into a 5 year revolving facility upon the Company's emergence from the restructuring process." In exchange for their notes, the holders of $260 million of senior and junior subordinated notes will receive approximately 90 percent of the equity value of the restructured Company, subject to dilution for warrants to existing shareholders and management options. Members of the bank group will also receive warrants for 10 percent of the equity. Existing common stock will be cancelled. Holders of existing common stock will receive "out of the money" warrants to purchase equity of the reorganized company. The Company's employees' rights to receive cash redemptions of preferred stock held by the Retirement Savings Plan (RSP) will be preserved. The Company announced that it will commence a solicitation of its debt holders to obtain formal approval of the restructuring plan. Tokheim indicated that the solicitation period is expected to begin in early August. As part of the Company's restructuring plan, Tokheim will defer the August 1, 2000 interest payments on its senior and junior subordinated notes. A continued deferral of the interest payments on the notes will constitute a default under the Company's existing bank credit facility and, following a 30 day grace period, constitute a default pursuant to the respective indentures under which the securities were issued. Tokheim also announced that for the fiscal second quarter ended May 31, 2000, the Company reported an operating loss of $4.7 million compared to an operating profit of $7.5 million in the second fiscal quarter of 1999. Sales in the 2000 second fiscal quarter were $134.8 million, compared to 1999 fiscal second quarter sales of $177.0 million. The results reflect business trends consistent with those experienced in the Company's first fiscal quarter ended February 29, 2000. A more detailed discussion of results of operations is included in the Company's Quarterly Report on Form 10-Q which will be filed with the Securities and Exchange Commission later today. Tokheim, based in Fort Wayne, Indiana has grown to become the world's largest producer of petroleum dispensing devices. Tokheim Corporation manufactures and services electronic and mechanical petroleum dispensing systems. These systems include petroleum dispensers and pumps, retail automation systems (such as point-of-sale systems), dispenser payment or "pay-at-the-pump" terminals, replacement parts, and upgrade kits. U.S. LEATHER: Diedrich Acquires Tannery for $1.22 Million; to Reopen Aug. 17 ---------------------------------------------------------------------------- According to a recent filing in the U.S. Bankruptcy Court, Judge Margaret Dee McGarity approved the sale of U.S. Leather, Inc., to Diedrich Acquisitions LLC, the Milwaukee Journal Sentinel reports. The tannery, located at 2615 W. Greves St. in Milwaukee's Menomonee Valley, is scheduled to reopen with a 30- person workforce in mid-August. The acquisition cost Diedrich $1.22 million for the building and equipment. U.S. Leather filed for protection from creditors under Chapter 11 bankruptcy in February with assets of $74.7 million and debts of $80.3 million. U.S. WOOD: Files for Chapter 11 Bankruptcy ------------------------------------------ Dow Jones reports that U.S. Wood Products, Inc., filed for voluntary Chapter 11 reorganization in U.S. Bankruptcy Court in Delaware. The corporation has assets of around $10 million to $50 million and debts reaching $50 million to $100 million. Laura Davis Jones, Esq., of Pachulski Stang Ziehl Young & Jones PC serves as bankruptcy counsel. According to Federal Filings Business News, U.S. Wood is also known under other trade names, including Down River International Forest Products, Goldenberg Group Inc., Allied Plywood Corp, Prime Source Building Products, Sequioia Supply, Texas Plywood, Southwest Plywood, EH Wood Products, and Westex Distributors. US WOOD: Case Summary and 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: US Wood Products, Inc. 11852 South Alameda Street Lynwood, CA 90262 Chapter 11 Petition Date: July 31, 2000 Court: District of Delaware Bankruptcy Case No.: 00-03198 Debtor's Counsel: Laura Davis Jones, Esq. Bruce Grohsgal, Esq. Pachulski, Stang, Ziehi, Young and Jones P.C. 919 North Market Street, 16th Floor P.O. Box 8705 Wilmington, DE 19899-8705 Tel:(302) 652-4100 Total Assets: $ 10,000,000 above Total Debts : $ 50,000,000 above 20 Largest Unsecured Creditors Tafisa Canada P.O. Box 5523 Burlington, VT 54025-523 Tel:(819) 583-2930 Fax:(888) 711-3472 Trade Vendor $ 634,958 Temple Inland 303 So. Temple Dr. Diboll, TX 75941 Tel:(409) 829-5511 Fax:(409) 829-7846 Trade Vendor $ 531,173 Longlac Wood Indust. P.O. Box 66512 AMF O'Hare Chicago, IL 60666-512 Tel:(888) 566-4522 Fax:(888) 783-0344 Trade Vendor $ 525,621 Panolam Industries, Ltd P.O. Box 7500 Huntsville, On P1H2J7 Canada Tel:(800) 672-6652 Trade Vendor $ 450,188 Williamette Industries File No.6647 Los Angeles, CA 90074 Tel:(803) 802-8075 Trade Vendor $ 442,440 Omnova/Gencorp Dept. LA 21008 Pasadena, CA 91185-1008 Tel:(800) 233-3150 Fax:(717) 366-4058 Trade Vendor $ 416,534 Louisiana Pacific P.O. Box 920022 Atlanta, GA 30392 Trade Vendor $ 401,848 International Paper Decorative Products Div P.O. Box 2156 Oshkosh, WI 54903 Tel:(414) 235-0440 Fax:(252) 823-0202 Trade Vendor $ 389,386 Duratex No. America Inc 1208 East Chester Dr. Suite 202 High Point, NC 27265 Tel:(800) 566-1500 Fax:(910) 885-1501 Trade Vendor $ 389,294 Sierapine Limited 2151 Professional Dr. Suite 200 Roseville, CA 95661 Tel:(209) 223-6000 Fax:(916) 772-3415 Trade Vendor $ 376,696 Ike Trading Co. Ltd. 8905 SW Nimbus Ave Suite 190 Beaverton, OR 97008 Trade Vendor $ 369,958 Atlantic Veneer Corp P.O. Box 6600 Beaufort, NC 28516 Tel:(919) 728-3169 Fax:(919) 728-4906 Trade Vendor $ 367,666 Avonite 1945 s. Highway 304 Belen, NM 87002 Tel:(500) 428-6648 Fax:(505) 864-1299 Trade Vendor $ 363,685 Formica Corp P.O. Box 92591 Chicago, IL 60675 Trade Vendor $ 347,812 States Industries, Inc. 29545 Enid Road East P.O. Box 7037 Eugene, OR 97401 Tel:(800) 233-8827 Fax:(541) 689-8051 Trade Vendor $ 342,301 Timber Products Co. P.O. Box 641855 Pittsburgh, PA 15264-1855 Tel:(541) 744-4233 Fax:(541) 744-5440 Trade Vendor $ 298,348 Columbia Forest Products P.O. Box 60709 Charlotte, NC 28260-0709 Tel:(503) 882-7281 Trade Vendor $ 253,962 West Fraser Mills Ltd Trade Vendor $ 249,169 DNP America, Inc. Trade Vendor $ 218,795 Wolstenholme Partners Trade Vendor $ 200,402 ********* A list of Meetings, Conferences and seminars appears in each Tuesday's edition of the TCR. Submissions about insolvency-related conferences are encouraged. Bond pricing, appearing in each Friday's edition of the TCR, is provided by DLS Capital Partners in Dallas, Texas. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* 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, Ronald Ladia, Zenar Andal, and Grace Samson, 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. 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