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/raid1/www/Hosts/bankrupt/TCR_Public/000918.MBX T R O U B L E D C O M P A N Y R E P O R T E R Monday, September 18, 2000, Vol. 4, No. 182 Headlines AMERISERVE FOOD: Tricon Expresses Delight With Ameriserve Filing a Plan BELL FURNITURE: Furniture Manufacturer Selling Facility in Chapter 11 BROWNSVILLE GENERAL: Fayette County Hospital Facing Insolvency BURLINGTON INDUSTRIES: Board Approves Five-Point Improvement Plan CAMBIOR INC: Concludes Copper Project Sale with Empresa Minera Del Peru CEDAR BRAKES: Moody's Assigns Baa2 Long-Term, Senior Secured Rating CONSECO: Finalizes Lending Agreements With Lehman Brothers DECORA INDUSTRIES: Unveils Strategic Restructuring Program DOTCOMFAILURES.COM: Company Closures & Layoffs Website Will End Business EINSTEIN/NOAH BAGEL: Committee Supports Company's Plan of Reorganization GC COMPANIES: May Seek Bankruptcy Protection Unless Creditors Are Content GENESIS/MULTICARE: MultiCare Committee Retains Kasowitz Benson as Counsel GRAHAM FIELD: Hires Mr. Michael Crouch As New Executive Vice President HARNISCHEFEGER INDUSTRIES: Equity Committee Retains Klehr As Local Counsel INDIAN HILLS: Case Summary and 20 Largest Unsecured Creditors INTEGRATED HEALTH: Long-Term Business Plan Should Hit Table on October 18 LOEWEN GROUP: Knauff's Moves for Relief to Foreclose Mortgaged Premises MALIBU ENTERTAINMENT: Lender Adds 15-Day Forbearance of Debt Obligations MC SALES: Case Summary and 12 Largest Unsecured Creditors MEDPARTNERS: Los Angeles Court Confirms Provider's Plan of Reorganization OMNOVA SOLUTIONS: Fitch Downgrades Senior Unsecured Debt Rating to BBB- REGAL CINEMAS: Doing its Best to Avert a Bankruptcy Filing SAFETY-KLEEN: Puts Employment Agreement With L. Singleton Before Court SANDS HOTEL: Carl Icahn's Bid Approved, Topping Park Place's Offer SCAFFOLD CONNECTION: Alberta Court to Consider Plan at December 8 Hearing SHONEY'S, INC.: Operating Losses Continue into Third Fiscal Quarter SUN HEALTHCARE: Omega Says Sun Isn't Meeting its Obligations THEBIGSTORE.COM: Dot.com Retailer Faces Lawsuits & Involuntary Chapter 7 TRANSTEXAS GAS: Reports Encouraging Operating Results For Second Quarter VLASIC FOODS: Reports Break Even 4th Quarter Results; Lazard Still at Work WEDDING PERFECTIONS: Bid4Assets.com To Liquidate Bridal Business WESTSIDE HOUSES: Housing Firm Files for Chapter 11 Protection in New York WORTHINGTON INDUSTRIES: Moody's Downgrades Senior Debt Ratings To Baa2 * Bond pricing for the week of September 18, 2000 ********* AMERISERVE FOOD: Tricon Expresses Delight With Ameriserve Filing a Plan ----------------------------------------------------------------------- Tricon Global Restaurants, Inc. (NYSE:YUM) announced that it views the filing of a proposed plan of reorganization by AmeriServe Food Distribution, Inc. in U.S. Bankruptcy Court as a significant step in the ultimate transition of AmeriServe's U.S. distribution business to McLane Company, Inc. As previously announced, AmeriServe has reached a definitive agreement, subject to certain conditions, to sell its U.S. distribution business to McLane. AmeriServe is currently the principal distributor of supplies to KFC, Pizza Hut and Taco Bell corporate and franchised restaurants in the United States. "This is a very important milestone in the resolution of the AmeriServe bankruptcy and the transition process to McLane," said David Novak, Chief Executive Officer of Tricon Global Restaurants. "We have worked closely with our franchise community and purchasing cooperative to find a positive solution to the AmeriServe bankruptcy. We are pleased the sale to McLane will lead to better service from a well-capitalized partner and, going forward, will not have a significant, long-term economic impact on Tricon. A positive resolution to the AmeriServe bankruptcy is now close at hand," Novak added. As part of the proposed plan of reorganization, Tricon will fund certain amounts to AmeriServe to facilitate a global settlement with holders of allowed secured and administrative priority claims in the bankruptcy. In exchange, Tricon will receive the proceeds from AmeriServe's remaining inventory, accounts receivable and certain other assets, which will be primarily realized over the next twelve months. The plan of reorganization also provides for the dismissal of the legal action previously filed by AmeriServe against Tricon seeking payment of approximately $101 million in distribution fees for services rendered by AmeriServe prior to the bankruptcy filing. Tricon has previously accrued for, but withheld payment of these fees. Through the end of the second quarter of this year, Tricon had incurred an unusual charge of $67 million relating to funding provided to AmeriServe under a debtor-in-possession revolving credit facility and certain collateral guarantee obligations to the secured lenders of AmeriServe. These items are described in Tricon's Form 10-Q filed for the quarter ended June 10, 2000. Tricon expects to take additional one-time charges in the third and fourth quarter of this year as the final plan of reorganization is implemented. Based on currently available information, Tricon expects that its total future net exposure in connection with the AmeriServe bankruptcy will be in the range of $80 million to $100 million. This amount includes the positive financial impact from recovery on the assets received from AmeriServe and the $101 million in distribution fees retained by Tricon, as described above. It is expected that these additional expenses will be reflected as unusual charges. It is Tricon's current expectation that the sale of AmeriServe's U.S. distribution business to McLane will be completed during the fourth quarter of this year. The plan of reorganization is subject to confirmation by the creditors of AmeriServe, and approval by the U.S. Bankruptcy Court. Tricon is the world's largest restaurant company in terms of system units, with more than 30,000 restaurants in over 100 countries and territories. Tricon's three brands, KFC, Pizza Hut and Taco Bell, are the global leaders of the chicken, pizza and Mexican restaurant categories, respectively. Total worldwide system sales were nearly $22 billion in 1999. BELL FURNITURE: Furniture Manufacturer Selling Facility in Chapter 11 --------------------------------------------------------------------- Bell Furniture Industries Inc., a Loveland, Ohio, nationwide distributor of furniture which recently filed Chapter 11, has laid off about 11% of its workforce and put one of its facilities on the selling block. Bell, which saw its sales decline 25% last year--to around $71 million, is being pressured by competition in the industry but nonetheless intends on reorganizing and remaining in business. (New Generation Research, Inc., 14- Aug-00) BROWNSVILLE GENERAL: Fayette County Hospital Facing Insolvency -------------------------------------------------------------- The 84-year-old, Brownsville General Hospital might end operations unless employees allow a pay cut to help keep the facility on its toes, The Associated Press reports. Even though the hospital has little debt, it will be insolvent, if the current inflow of patient doesn't multiply, CFO Emile Malboeuf said. "It would be a long, slow death because of the hospital's overall financial health." The Fayette County hospital lost $1.65 million last year, but is projecting a loss of up to $1.2 million this year. BURLINGTON INDUSTRIES: Board Approves Five-Point Improvement Plan ----------------------------------------------------------------- Burlington Industries, Inc. (NYSE: BUR) announced that its Board of Directors has approved a five- point plan designed to strengthen the company's future profitability and financial flexibility. This plan will result in a 4th quarter charge for restructuring, asset write downs and impairment of approximately $65-75 million, including approximately $15 million of cash costs, primarily for severance and lease cancellation fees. The company will also incur approximately $13 million of runout charges related to this restructuring, primarily in the first two quarters of fiscal 2001. In addition, as a result of a change in accounting, the company will write off all historic enterprise goodwill with a 4th quarter non-cash charge of approximately $464 million. George W. Henderson, III, Chairman and CEO, said, "We have outstanding capabilities within Burlington, but our performance this year is disappointing. Our results are due both to our own performance shortfalls as well as difficult market dynamics in some of the markets we serve. We are capable of doing better and we are committed to improving results." Henderson noted that current challenges include the casual dressing trend, a drop in exports to Europe because of the weakness of the Euro, price competition in denim, and retailers' efforts to reduce their inventories of interior furnishings products. Douglas J. McGregor, President and Chief Operating Officer, said, "The steps outlined in our five-point plan will give us the needed framework to improve our profitability and increase shareholder value. These actions are painful but essential for our long-term success." The five points in the plan are: (1) Realign operating capacity. The company will reduce capacity to better align its operations with current market demand and to assure the most efficient use of assets. This includes: * Closing a plant in Johnson City, TN and moving a portion of its production to other underutilized facilities. * Reducing operations at the Clarksville, VA facilities of the PerformanceWear segment. * Reducing the size of the company's trucking fleet and closing the Gaston trucking terminal located in Belmont, NC. (2) Eliminate unprofitable businesses. The PerformanceWear segment will exit its garment-making business, to include offering its facility in Cuernavaca, Mexico for sale. In addition, PerformanceWear will prune unprofitable product lines that do not meet expectations. Similar evaluations of other product lines and businesses that do not offer adequate profit potential will continue within all divisions. (3) Reduce overhead. The company has analyzed administrative and staff positions throughout the company, and identified a number of opportunities to consolidate and reduce cost. This will result in job reductions in division and corporate staff areas. (4) Pay down debt. Company-wide initiatives to sell non-performing assets, reduce working capital, and decrease capital expenditures will free up cash which will be used to reduce debt and improve financial flexibility. The company expects to initiate refinancing of its bank credit facilities in the near future. (5) Eliminate excess historic enterprise goodwill. In the fourth quarter of fiscal 2000, the company is changing its method for measuring impairment of its enterprise level goodwill from the undiscounted cash flow method to the market value method. At recent stock prices, this change in accounting will result in a one-time non-cash charge of approximately $464 million, or $8.83 per share in the fourth quarter of fiscal 2000. The company's bank credit agreements have been amended to allow for this change in accounting for goodwill, and the company is in compliance with its covenants. The closings and overhead reductions outlined above will result in the elimination of approximately 950 jobs in the United States and 650 jobs in Mexico. Commenting on the plan McGregor said, "Our operating results, particularly in the PerformanceWear segment, continue to fall short of expectations. We believe we have made a realistic assessment of our business, and we are taking a series of actions that will capitalize on our strengths and correct our weaknesses. For example, we are continuing to grow our top- performing Lees carpet business, which is enjoying its best year in history. The effective execution of our five-point plan is critical to achieving better cash flow and debt reduction which will allow us needed flexibility to grow. "We deeply regret the job losses that are a necessary part of this plan," McGregor said. "We will do everything we can to help the affected employees make the transition to other employment." Burlington Industries, Inc. is one of the world's largest and most diversified manufacturers of softgoods for apparel and interior furnishings. CAMBIOR INC: Concludes Copper Project Sale with Empresa Minera Del Peru ----------------------------------------------------------------------- Cambior Inc. announces that it concluded an arrangement with Empresa Minera Del Peru S.A. regarding the sale to a third party of Cambior's indirect 100% interest in the La Granja copper project in Peru. Under the agreed arrangement, Minero Peru, a state-owned Peruvian entity, has issued a public call for bids on an option to purchase Minero Peru's royalty interest in the La Granja Project. The winning bidder will be the party offering the highest option exercise price after agreeing to purchase the La Granja property from Cambior. The agreed arrangement also provides that the winning bidder and purchaser of the La Granja property will be conducting development work and committing to bring a mine into commercial production on the La Granja property within a specified time period. Cambior also announces that it is in final discussions with a third party which will commit (i) to submit a bid that meets at least Minero Peru's minimum bid requirements and (ii) to conclude an agreement with Cambior (the ``Cambior Agreement'') for the sale of Cambior's 100% interest in the La Granja property. Under the terms of the Cambior Agreement, the sale is expected to result in the payment of net proceeds to Cambior in excess of $34 million and is subject to the aforementioned third party being the winning bidder in addition to the usual conditions for transactions of this nature. To qualify for the bidding process regarding the acquisition of Cambior's 100% interest in the La Granja property and Minero Peru's royalty interest therein, all parties interested to bid shall have entered into a sale agreement with Cambior on substantially the same terms and conditions as those set forth in the Cambior Agreement and for an equivalent or higher purchase price. Minero Peru will make the bidding terms available for inspection by the interested parties as from September 18th, 2000; such parties will be entitled (i) to submit applications until November 10th, 2000 and (ii) to access the information and conduct site visits to the La Granja Project until November 16th, 2000. The receiving of envelopes and granting of the Award by Minero Peru should then occur on November 17th, 2000 and the closing of the transaction between all parties involved soon thereafter. This timetable is subject to amendments by the Peruvian authorities. In anticipation of this process, Cambior has established a data room for the benefit of all bidders at the Project site. Louis P. Gignac, President and Chief Executive Officer of Cambior, is pleased to state ``the closing of this transaction, scheduled for the fourth quarter 2000, will reduce the aggregate indebtedness to approximately $128 million, thereby considerably helping Cambior to refinance the remaining debt and stabilize its long-term financial situation''. Thus, after having met its $75 million repayment obligation on June 30, 2000 and thereby completed Phase I of its financial restructuring, this transaction will largely allow Cambior to complete Phase II which consists of reducing the debt level to approximately $115 million. Completion of Phase II should enable the Company to comply with its obligation to repay or refinance the balance of its loan by December 31, 2000. While there can be no assurance in that respect, management is highly confident that the Company will meet its financial obligation. Assuming the success of its financial restructuring, Cambior will focus on gold mining in the future, having retained all of its core gold assets, and will be better able to develop its gold properties to the benefit of its shareholders. Cambior Inc. is an international gold producer with operations, development projects and exploration activities throughout the Americas. Cambior's shares trade on the Toronto and American (AMEX-NASDAQ) stock exchanges under the symbol ``CBJ''. CEDAR BRAKES: Moody's Assigns Baa2 Long-Term, Senior Secured Rating ------------------------------------------------------------------- Moody's Investors Service assigned a Baa2 long-term, senior secured rating to Cedar Brakes I, L.L.C. Cedar Brakes is a special-purpose corporation formed to monetize the power-purchase contract between Newark Bay Cogeneration Partnership LP and Public Service Electric and Gas (PSE&G, Long Term Issuer Rating of Baa1). Cedar Brakes is indirectly owned by El Paso Energy Corporation (EPEC, Long-Term Senior Unsecured Debt Rating of Baa2) and Limestone Electron Trust. Under the terms of the transaction, El Paso Energy Corporation has inserted itself in the middle of the relationship between PSE&G and Newark Bay Cogeneration through contractual relationships among the parties. To meet its obligations to PSE&G, Cedar Brakes has signed an agreement with El Paso Merchant Energy (A subsidiary of El Paso Energy Corp.) that becomes effective on the date the Amended and Restated Power Purchase Agreement takes effect. This agreement, called the Powr Services Agreement. requires El Paso Merchant Energy to provide capacity and energy in the quantities and at the delivery points required under the amended PPA. The difference between the price Cedar Brakes pays to EPM, and the price it charges PSE&G, represents the margin that is being securitized. The proceeds of this offering will be used by Cedar Brakes I to purchase the original PPA and replace it with an amended and restated PPA that expires on August 31, 2013, as well as to fund a liquidity reserve and pay transaction costs. PSE&G benefits from the transaction by lowering its potential stranded costs, thereby enabling it to charge lower electrical rates to customers. On a net present value basis PSE&G is saving roughly $40 million. The transaction benefits El Paso Merchant Power by allowing it to decouple the provision of capacity and energy under the contract from the physical asset. Under the new contract the capacity and energy furnished to PSE&G is not required to be produced from the Newark Bay facility. This significantly reduces the investors' exposure to operational risks and allows much lower coverage ratios to receive a higher rating. Energy and capacity can be furnished from other El Paso plants within the Pennsylvania-Maryland-New Jersey interconnection market. The rating is supported by a payment stream that has a general credit quality of Baa1; however, there are several performance requirements that are guaranteed by Baa2 rated El Paso. The rating is further supported by internal liquidity resources available to Cedar Brakes that accrue through: (1) the $12.8 million liquidity reserve; (2) a total of $1.3 million due to coverage in excess of 1.0 times in the lowest year of 2012; and (3) the ability to deliver higher quantities each day as make-up deliveries provides some flexibility. The operating profit for Cedar Brakes is the difference between the money it receives from PSE&G and what it pays to EPM for capacity and energy. A complete Pre-Sale Report for Cedar Brakes I, L.L.C. is available at our website at www.moodys.com/projectfinance PSE&G is based in Newark, N.J. El Paso Energy Corporation is based Houston, Texas. CONSECO: Finalizes Lending Agreements With Lehman Brothers ---------------------------------------------------------- Conseco (NYSE:CNC) announced that it has reached agreement with Lehman Brothers to amend the existing lending agreements of its Conseco Finance subsidiary. These amendments provide for the upstreaming of cash associated with the previously announced asset disposition programs of Conseco Finance. Additionally, they provide for the upstreaming of operating cash flow over the longer term, which will facilitate the restructuring of the company's bank debt agreements. Conseco has been under new management since Gary C. Wendt joined the company as Chairman and CEO on June 29. The restructuring plan has been under construction since then. "We took immediate steps in July to bring the company to solid footing," said Wendt, "and those prompt actions have been very helpful to gaining the support of the financial community." Wendt called the agreement "the last remaining step toward finalizing the restructuring of the company's multi-bank lending facility." The actual execution of the amendments to the agreement is expected to occur at the closing of the bank debt restructuring. DECORA INDUSTRIES: Unveils Strategic Restructuring Program ---------------------------------------------------------- Decora Industries Inc. (OTC BB: DECOC) unveiled a strategic plan to improve the long-term potential of the Company. The main components of the plan involve engaging an advisor to explore strategies for restructuring the Company's indebtedness, concluding the arbitration hearing regarding its lawsuits against Newell Rubbermaid, gaining financial control of its German subsidiary and taking steps to optimize its value. First, Decora announced that Jefferies & Company, Inc., an investment banking firm, has been engaged to advise the Company on the implementation of a comprehensive restructuring of its bond indebtedness. Second, the hearing before the American Arbitration Association regarding the multi-million-dollar lawsuits filed by the Company against Newell Rubbermaid concluded on September 6, 2000. A judgment is anticipated no later than October 30, 2000. Finally, to gain financial control of its German subsidiary, Konrad Hornschuch, the Company revealed that an agreement has been reached with Dresdner Bank to waive its current loan default and fund a tender offer for the remaining minority shares of Hornschuch that it does not own. This action clears the way for transforming Hornschuch from an AG, a German designation for a public company, to a KG (a limited partnership), which will provide greater flexibility in managing corporate liquidity. In addition, Lazard & Co. GmbH has been engaged to advise the Company on how best to optimize value in the German subsidiary. Nathan Hevrony, Decora's Chairman, stated, "Hornschuch is an excellent consumer and industrial products manufacturing and marketing company, has performed well since the acquisition and is poised for significant progress in the future. However, senior management and the Board of Directors have determined that, at this time, we should investigate all options to optimize shareholder value both financially and strategically." Regarding the Newell Rubbermaid case, Ronald A. Artzer, President and Chief Executive Officer, said, "With the conclusion of the arbitration hearing, we look forward to the panel's decision on or before October 30, 2000. Our team presented a compelling argument in support of our claims and we are anticipating a favorable outcome." Artzer added, "The capital structure of Decora Industries needs to be addressed. We will work closely with our advisors in both Germany and the U.S. to develop a strategy to de-leverage the company and build shareholder value. We believe this strategic plan provides the framework for accomplishing that mission." Decora Industries, Inc. is a leading manufacturer and marketer of self- adhesive consumer surface-covering products including the prominent brands, Con-Tact(R) and d-c-fix(R). The Company also manufactures specialty industrial products utilizing its proprietary pressure-sensitive, self- adhesive release and protective coating technologies, which include Decora's proprietary Wearlon(R) release coating system. DOTCOMFAILURES.COM: Company Closures & Layoffs Website Will End Business ------------------------------------------------------------------------ Dotcomfailures.com the site that existed to sound the death knell of dot- com companies, went out of business, according to a newswire report. "Three months and $2.6 million later, Dotcomfailures.com is closed," read a message on the site, whose logo is "Kick 'em while they're down." The site was one of several that popped up after the April stock market downturn to act as a forum for rumors and news of closures and layoffs at dot-com companies. The Internet zeitgeist that created a stream of 20-something millionaires slowed suddenly after Wall Street grew tired of Net companies with huge valuations that continued to lose huge amounts of money. With funding harder to find, layoffs and closures soon followed-along with a massive public relations backlash that fueled the popularity of sites like Dotcomfailures.com. (ABI 14-Sep-00) EINSTEIN/NOAH BAGEL: Committee Supports Company's Plan of Reorganization ------------------------------------------------------------------------ Einstein/Noah Bagel Corp. (OTC Bulletin Board: ENBXQ) and the Official Committee of Unsecured Creditors appointed in the Company's Chapter 11 case (the "Committee") announced that they have reached agreement with respect to all outstanding issues regarding the Company's plan of reorganization (the "Plan"). The Committee, which was appointed by the United States Trustee to represent the interests of unsecured creditors of the Company and its subsidiary, Einstein/Noah Bagel Partners, L.P., consists of unsecured creditors holding in excess of $65 million of the Company's 7-1/4% Convertible Subordinated Debentures. The Committee supports the Plan proposed by the Company, although it reserves the right to challenge the distribution under the Plan to Bagel Store Development Funding, LLC. The Committee joins with the Company in urging unsecured creditors to vote to accept the Plan. The deadline for voting on the Plan is 4:30 p.m. (Eastern Daylight Time) on September 18, 2000. GC COMPANIES: May Seek Bankruptcy Protection Unless Creditors Are Content ------------------------------------------------------------------------- General Cinema Theatres operator, Reuters reports, GC Companies (GCX) may file for bankruptcy protection if it can't get creditors concessions. To avoid exploring other alternatives like selling assets or filing for bankruptcy, GC Companies should formulate a plan that the creditors would agree upon. GC Companies based in Chestnut Hill, Mass., operates more than 1,000 U.S. movie screens. The company reported loosing $10.1 million for the third quarter against revenues of $108.6 million. GENESIS/MULTICARE: MultiCare Committee Retains Kasowitz Benson as Counsel ------------------------------------------------------------------------- The Unsecured Creditors Committee of The Multicare Companies, Inc., asks the Court to approve the employment and retention of Kasowitz, Benson, Torres & Friedman as attorneys for the Committee, pursuant to sections 328 and 1103(a) of the Bankruptcy Code and rule 2014 of the Bankruptcy Rules. The Committee contemplates that KBT&F will be rendering services to the Committee in: (1) assisting, advising and representing the Committee with respect to the administration of the Multicare chapter 11 cases, overseeing matters for the Committee and providing all necessary legal advice with respect to the Committee's powers and duties and overseeing; (2) assisting the Committee in maximizing the value of the Debtors' assets for the benefit of all creditors; (3) pursuing confirmation of a plan of reorganization and approval of an associated disclosure statement; (4) conducting an investigation, as the Committee deems appropriate, concerning, among other things, the assets, liabilities, financial condition and operating issues of the Debtors; (5) commencing and prosecuting appropriate actions and/or proceedings on behalf of the Committee; (6) preparing on behalf of the Committee necessary applications, motions, answers, orders, reports and other legal papers; (7) communicating with the Committee's constituents and others; (8) performing all other legal services for the Committee as appropriate and necessary; Subject to the Court's approval, KBT&F will be compensated on an hourly basis, plus reimbursement of actual, necessary expenses incurred. The attorneys currently designated to represent the Committee and their current hourly rates, subject to periodic adjustments usually in January of each year, are: David S. Rosner $ 425 Athena F. Foley $ 250 (Genesis/Multicare Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900) GRAHAM FIELD: Hires Mr. Michael Crouch As New Executive Vice President ---------------------------------------------------------------------- Graham Field Health Products, Inc. (OTC:GFIHQ) a manufacturer and supplier of healthcare products, announced that Mr. Michael Crouch has joined the company as an Executive Vice President. Mr. Crouch comes with extensive experience in the marketing and sale of Medical Devices and joins the company after serving as President/General Manager of Stepic, a division of Horizon Medical Products, Inc. According to Graham Field's CEO, David Hilton, " ...we are confident that Michael Crouch, with his record of success, will help channel the momentum we have been building over the past several months. Initially, Michael will oversee our Sales and Marketing efforts to allow other members of our senior management team to focus more attention on the company's restructuring efforts as we navigate our way through the Chapter 11 process." Michael Crouch will direct the company's on site Marketing group and its Field Sales organizations with the goal of rebuilding the Graham Field franchise. "The opportunity we have with our stable of well known and established product brands, such as Everest and Jennings Wheelchairs, Lumex Ambulatory and Bath Safety Products, John Bunn Respiratory Products, and Smith & Davis Beds, is unmatched in the industry. By focusing in on these self manufactured products, and complementing them with well chosen distributed products, I am confident that we can re-establish the company's market share and revenue base." Graham Field Health Products, Inc. is headquartered in Bay Shore, New York and manufactures, markets, and distributes durable medical equipment, medical/surgical supplies and furnishings from operations situated in the United States, Canada, and Mexico. HARNISCHEFEGER INDUSTRIES: Equity Committee Retains Klehr As Local Counsel -------------------------------------------------------------------------- Judge Walsh authorized the Official Committee of Equity Security Holders of Harnischfeger Industries, Inc., to employ Klehr, Harrison, Harvey, Branzburg & Ellers LLP as local counsel to the Committee in connection with the commencement and prosecution of the Harnischfeger chapter 11 cases, nunc pro tunc to October 25, 1999. The Equity Committee tells the Judge that Klehr Harrison is well-qualified for the role. The Equity Committee believes that in certain circumstances Klehr Harrison may assist the Committee by appearing in Court without the Committee's counsel Berlack Israels, thus saving significant costs to the estates. Klehr Harrison will receive compensation for services in the range of: Partners $ 225 - $ 360 Associates $ 125 - $ 225 Paralegals $ 85 - $ 100 (Harnischfeger Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., 609/392-0900) INDIAN HILLS: Case Summary and 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Indian Hills Station Limited Partnership, a Nevada L.P. 915 Mica Drive Carson City, NV 89705 Type of Business: Real estate and food mart, gas station, car wash Chapter 11 Petition Date: September 14, 2000 Court: District of Nevada Bankruptcy Case No.: 00-32665 Judge: Gregg W. Zive Debtor's Counsel: Geoffrey L. Giles, Esq. PO Box 93 Reno, NV 89504 (702) 329-4999 Total Assets: $ 2,900,000 Total Debts : $ 1,821,228 20 Largest Unsecured Creditors: A & A Construction Corp $ 68,016 Sundance Service $ 27,226 Jonh Goode & Associates $ 23,403 Dan Ward Electric $ 16,232 Lane Supply Inc $ 12,761 Systems Installation $ 6,700 Carson Valley Landscapin $ 6,113 Sight & Sound Tech $ 2,511 Heller Financial $ 2,430 Orix Credit $ 2,200 NRC Roofing $ 1,809 Western Sign Service $ 1,662 Woodworking Spec. Inc. $ 1,657 Citidel Broadcasting $ 1,637 Record Courier c/o Collection Services Of NV $ 1,425 Sight and Sound $ 429 INTEGRATED HEALTH: Long-Term Business Plan Should Hit Table on October 18 ------------------------------------------------------------------------- Stating that it's committed to develop a long-term business plan by Oct. 18, Integrated Health Services Inc., is seeking a 123-day extension of the exclusive periods during which only the company would be permitted to file a Chapter 11 plan. The proposed extension, which would be the company's second, would extend through Jan. 31, 2001, the exclusive period during which other parties would be prohibited from filing a plan from Sept. 29. If the company files a plan by Jan. 31, other parties would be further prohibited from filing a plan through April 2, 2001. (ABI 14-Sep-00) LOEWEN GROUP: Knauff's Moves for Relief to Foreclose Mortgaged Premises ----------------------------------------------------------------------- Juanita Knauff, through her attorneys, Duane, Morris & Heckscher LLP, tells the Court that Knauff Funeral Home, Inc. has defaulted on mortgage payment secured by property at 512 East Noble Avenue, Williston, Florida 32696 but has retained use of the mortgaged premises. Furthermore, Ms. Knauff suspects that the Funeral Home may be misusing the premises, thus causing it to decline in value. According to Ms. Knauff, the Funeral Home is past the due date of February 13, 2000 for one annual installment in the amount of $40,000, plus interest in the amount of $36 per day. The original principal amount of the Promissory Note, drawn in February 1998 in favor of Juanita Knauff, was $400,000. The total amount due and owing as of July 13, 2000 was $363,666 plus costs and expenses. Ms. Knauff therefore seeks relief from the automatic stay in order to proceed with an action in the Levy County Court of Florida to foreclose the mortgage and to pursue any other state remedies to which she is entitled. (Loewen Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 609/392-0900) MALIBU ENTERTAINMENT: Lender Adds 15-Day Forbearance of Debt Obligations ------------------------------------------------------------------------ Malibu Entertainment Worldwide, Inc. (OTC Bulletin Board: MBEW) announced that its primary lender agreed to an additional 15-day forbearance of debt obligations that became due on June 30, 2000. The holder of $20.6 million of secured debt has agreed to refrain from exercising any of its remedies under the loan until September 30, 2000. The Company and its primary lender are discussing the possibility of amending and restating the Company's credit agreement to modify the Company's obligations. There can be no assurance that the Company and this lender will be able to reach an agreement or, if so, as to the timing, terms or effect thereof. As previously announced, to comply with its obligations under the loan agreement with its primary lender and as part of the Company's strategic plan, the Company is attempting to divest certain assets in an effort to generate cash to fund its working capital, debt service and capital expenditure requirements and to repay indebtedness. There can be no assurance that the Company will be able to complete such divestitures, or, if so, as to the timing, terms or effects thereof. As previously announced, if the Company is unsuccessful in selling these assets, in obtaining other financing or in modifying the terms of its existing indebtedness or if the proceeds of such sales are significantly less than their recorded value, the Company may be required to liquidate assets, significantly alter its operations or take other extraordinary steps to preserve cash and satisfy its obligations. If the Company is unable to take such actions or they are not sufficient to permit the Company to continue to operate, the Company may seek or be forced to seek to restructure or reorganize its liabilities, including through proceedings under the federal bankruptcy laws. Headquartered in Dallas, Texas, Malibu Entertainment Worldwide, Inc. is a leader in the location-based entertainment industry, operating 20 parks in 7 states under the SpeedZone, Malibu Grand Prix and Mountasia brands, primarily clustered in Texas, California, Georgia and Florida. The Company's plans, estimates and beliefs concerning the future contained in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those reflected herein due to a variety of factors that could effect the Company's operating results, liquidity and financial condition, such as risks associated with the Company's need to generate cash, general economic conditions, the ongoing need for capital improvements, changes in demographics, competitive considerations and other factors. MC SALES: Case Summary and 12 Largest Unsecured Creditors --------------------------------------------------------- Debtor: MC Sales, LLC 1916 Palomar Oaks Way, #150 Carlsbad, CA 92008 Type of Business: Wholesale distribution of sportscards, non-sports and gaming cards, supplies, memorabilia and related items. Chapter 11 Petition Date: September 11, 2000 Court: Southern District of California Bankruptcy Case No.: 00-08942 Judge: Peter W. Bowie Debtor's Counsel: James W. Beshears, Esq. Attorney at Law 401 West A St, #1950 San Diego, CA 92101 (619) 233-7079 Total Assets: $ 4,245,000 Total Debts : $ 3,099,128 12 Largest Unsecured Creditors: Upper Deck Company Attn: Trip Hooker 5909 Sea Otter Place Carlsbad, CA 92008 (972) 448-9044 Trade Debt Disputed $ 1,065,298 Wizards of the Coast Dept. #5019 P.O. Box 34936 Seattle, WA 98124 (425) 204-5390 Trade Debt $ 728,256 Pacific Trading Cards 18424 Highway 99 Lynnwood, WA 98037 1 (800) 551-2002 Trade Debt $ 254,006 Dart Trading Cards Trade Debt $ 59,337 Playoff Trade Debt $ 38,400 Rembrandt Trade Debt $ 29,449 Treasure Island Trade Debt $ 20,660 Beckett Trade Debt $ 14,194 DHL Shipping Trade Debt $ 10,679 Westex, Inc. Trade Debt $ 1,986 UPS Shipping Trade Debt $ 1,317 Standard Truck Line Trade Debt $ 700 MEDPARTNERS: Los Angeles Court Confirms Provider's Plan of Reorganization ------------------------------------------------------------------------- Caremark Rx, Inc. (NYSE: CMX) announced that the plan of reorganization for its wholly owned subsidiary MedPartners Provider Network, Inc. (MPN) was confirmed by the U.S. Bankruptcy Court in Los Angeles. Caremark said that MPN's creditors (hospitals, health plans, and other health care providers) voted overwhelmingly to approve the Plan, with approval votes totaling over 99% in amount of all claims voted. The Company said that MPN anticipates commencing payments to creditors under the Plan in approximately one month. The payments under the Plan have been accounted for in discontinued operations. Mac Crawford, Chairman of the Board and Chief Executive Officer of Caremark Rx, Inc. said, "The confirmation of MPN's reorganization plan marks the final major step in exiting the physician practice management business. We are pleased to have finally resolved this matter." Caremark is a leading prescription benefit manager (PBM), providing comprehensive drug benefit services to over 1,200 health plan sponsors and holding contracts to serve over 20 million participants throughout the U.S. Caremark's clients include managed care organizations, insurance companies, corporate health plans, unions, government agencies and other funded benefit plans. The company operates a national retail pharmacy network with over 50,000 participating pharmacies, three state-of-the-art mail service pharmacies, the industry's only FDA regulated repackaging plant, and seventeen JCAHO-accredited specialized therapeutic pharmacies for delivery of advanced medications to patients with chronic or genetic diseases and disorders. OMNOVA SOLUTIONS: Fitch Downgrades Senior Unsecured Debt Rating to BBB- ----------------------------------------------------------------------- Fitch has downgraded Omnova Solutions' senior unsecured debt rating to 'BBB-' from 'BBB'. The Rating Outlook is Stable. Credit protection measures have weakened mainly as a result of rising petroleum-based raw material prices, particularly Styrene and Butadiene. The impact of raw material pricing has hurt the Performance Chemicals business as Styrene-Butadiene Latex (SB Latex) price increases to the paper and carpet industry have not kept pace with Styrene and Butadiene price increases. Significant difficulties have been encountered in putting price increases through to the paper industry, which is consolidating. Styrene and Butadiene prices have risen with oil prices, but have also risen because of tight supply. Styrene operating rates and margins are expected to remain high for at least the duration of the year. Competitors who are integrated upstream into Styrene production will continue to have a cost advantage in marketing SB Latex while Styrene margins remain high. The Decorative and Building Products business has also seen raw material pricing increases through PVC. However, the impact has been much smaller than that seen in the Performance Chemicals business. Operating income margins in the first half of 2000 have decreased to approximately 10 percent in the Decorative and Building Products business, demonstrating that this segment can still generate income despite raw material pricing pressures. The decorative segment has also been negatively impacted by a downturn in the manufactured housing sector and a distribution realignment, which has slowed PVC wallcovering sales. The company's debt consists of $150 million, which has been drawn on a $300 million revolving credit facility expiring September 2004. Debt was incurred as a result of a $200 million dividend payment to GenCorp at the time of the spin-off. Recently the company initiated a $75 million receivables program, the proceeds of which were used to reduce debt to current levels and to repurchase shares of common stock. Including the receivables program balance, debt/EBITDA has increased to greater than 3.25 times, while EBITDA/interest coverage has decreased to the middle to low- middle single-digit range. Omnova Solutions was created when GenCorp Inc. spun off its Performance Chemicals and Decorative and Building Products business units in 1999. A leading producer of SB Latex polymers and specialty chemicals used in the paper, carpet and other industries, Omnova also produces PVC-based decorative components and finished surfaces, used in a variety of commercial and residential applications. REGAL CINEMAS: Doing its Best to Avert a Bankruptcy Filing ---------------------------------------------------------- Faced with industry-wide overbuilding and mounting debts, Regal Cinemas is cutting back as it tries to avoid filing for bankruptcy protection, according to the Miami Herald. Regal, the nation's largest theater operator, is negotiating with local landlords to cancel the leases for two new megaplexes under construction and to close a number of existing theaters, including some only a few years old. Regal says it will at least delay plans for two Miami-Dade projects once scheduled to open next year: a 28-screen theater at Dolphin Mall and a 16-screen theater planned for Jeff Berkowitz's Kendall Village Center. Industry sources say it's likely that those theaters will never open under the Regal name. (ABI, 14-Sep-00) SAFETY-KLEEN: Puts Employment Agreement With L. Singleton Before Court ---------------------------------------------------------------------- By this Motion, the Debtors seek authority to retain and enter into an employment agreement with Mr. Larry Singleton as Chief Financial Officer of Safety-Kleen Corp. Mr. Singleton has thirty years of management, business restructuring and income tax experience. Since 1999, Mr. Singleton has served as the Executive Vice President of Gulf States Steel, Inc. of Alabama and assisted with its reorganization under Chapter 11. In addition, Mr. Singleton has directed both a privately-held agribusiness company and New Energy Corporation of Indiana through complex financial restructuring transactions. Notably, Mr. Singleton also served as the Executive vice President and Chief Financial officer of Alert Centre, Inc. for over three years and assisted that organization in its transition out of Chapter 11 proceedings. Upon execution of the Singleton Agreement, Mr. Singleton will serve as the Chief Financial Officer. The salient terms of the Singleton Agreement are: Term and Duties: The term of the Singleton Agreement is for 2 years. Salary and Bonus: Mr. Singleton shall receive an annual base salary of $50,000 per month. if Mr. Singleton is employed by the Company on the date that either a plan of reorganization is consummated or on the date of the sale of substantially all of the assets of the Company then, within fifteen (15) days of such consummation or sale, the Company shall pay to Mr. Singleton a bonus of $500,000 in recognition of his efforts in facilitating such reorganization or sale, Termination: If the Company terminates Mr. Singleton's employment for any reason other than (i) Cause, (ii) death or (iii) Disability, or if Mr. Singleton terminates his employment for Good Reason, then, the Company shall pay to Mr. Singleton, not later than 30 days following the Date of Termination, (x) any unpaid amounts of his Annual Base Salary earned through the Date of Termination, plus (y) a severance payment equal to 4 months of his Annual Base Salary if Mr. Singleton's family has not relocated to Columbia, South Carolina or 1 year of his Annual Base salary it Mr. Singleton's family has relocated to Columbia, South Carolina (which determination shall be made by the Board of Directors of the Company). (Safety-Kleen Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900) SANDS HOTEL: Carl Icahn's Bid Approved, Topping Park Place's Offer ------------------------------------------------------------------ Billionaire financier Carl Icahn moved a step closer to owning the Sands Hotel & Casino on Wednesday after New Jersey regulators endorsed his plan to pull it out of bankruptcy, according to a newswire report. Icahn, who owns two Las Vegas casinos, won out over Park Place Entertainment Corp. (PPE) in his bid to take over the Atlantic City, N.J.-based Sands, in part because the casino's unsecured creditors voted in favor of Icahn. The takeover, which had already been approved by U.S. Bankruptcy Court Judge Judith Wizmur, will take effect Sept. 29. The state Casino Control Commission approved Icahn's plan to invest $65 million in cash and issue $110 million in new bonds to prop up the casino, which continued to operate while reorganizing in bankruptcy. The commission also granted the Sands a new four-year license, ruling that Icahn's takeover made it financially stable. Icahn will begin paying off the vendors and other creditors who were owed $6.7 million when the Sands filed for chapter 11 in January 1998. It reported losses of more than $35 million annually for the three years prior to the bankruptcy filing. (ABI 14-Sep- 00) SCAFFOLD CONNECTION: Alberta Court to Consider Plan at December 8 Hearing ------------------------------------------------------------------------- As previously disclosed, Scaffold Connection Corporation's formal Plan of Arrangement and Compromise received the approval of its shareholders, secured creditors and unsecured creditors. The Corporation is now in the process of obtaining the necessary regulatory approvals in respect of the issuance of securities and approval of the Court of Queen's Bench of Alberta. The Court has set hearing dates of November 13 and November 27 to adjudicate the claims of certain creditors, and a date of December 8, 2000 for the hearing relating to the final approval of the Plan. The Company also continues to seek the lifting of the various cease trade orders, but to date no decision has been made by the applicable securities regulators. SHONEY'S, INC.: Operating Losses Continue into Third Fiscal Quarter ------------------------------------------------------------------- Shoney's, Inc. (OTC Bulletin Board: SHOY) announced results for its third quarter and forty-week period ended August 6, 2000. For the third quarter of fiscal 2000, a twelve-week period, the Company reported a net loss of $14.8 million, or $0.29 per share, compared with a net loss of $17.5 million, or $0.35 per share, for the third quarter of 1999. Net loss from continuing operations was $14.5 million or $0.29 per share compared to a net loss from continuing operations of $18.3 million or $0.37 per share in the prior year. Third quarter 2000 revenues were $200.8 million compared with $222.3 million for the same period last year. Revenues for the third quarter of fiscal 2000 reflect an overall comparable store sales decrease of 0.1%, the closure of 78 under-performing restaurants and the sale of 21 Shoney's restaurants to franchisees since the beginning of the third quarter of 1999. During the third quarter of 2000, franchisees closed 34 Shoney's Restaurants and one Captain D's restaurant. Third quarter 2000 results from continuing operations include: * pre-tax gains related to the sale of property, plant and equipment -- $1.7 million * pre-tax non-cash asset impairment charges -- $12.8 million In the comparable period of 1999, the Company recorded: * pre-tax gains related to the sale of property, plant and equipment -- $1.2 million * pre-tax non-cash asset impairment charges -- $18.4 million. Commenting on third quarter results, Raymond D. Schoenbaum, chairman of the board of Shoney's, Inc., said, "Our Captain D's concept continues to show improved sales and profitability. Same store sales were a positive 3.0% increase over the prior year. Although the results from Shoney's restaurants remain below what we had hoped to achieve, our new management team has begun implementing programs and procedures aimed at increasing sales and reducing prime costs to acceptable levels." "We believe Shoney's new management team has identified the key elements necessary to move this concept in the right direction. We expect that future results will favorably reflect the results of these strategies," added J. Michael Bodnar, president and CEO, Shoney's, Inc. The most significant development of the third quarter, Schoenbaum added, was the successful completion of the financial restructuring plan which reduced the company's total debt by $69 million and generated an after-tax gain of approximately $80 million or $1.59 per share. "The restructuring enabled us to create immediate value for our shareholders," Schoenbaum said. For the forty-week period ended August 6, 2000, the Company reported a net loss of $13.3 million, or $0.26 per share, compared with a net loss of $28.4 million, or $0.58 per share, for the comparable period a year ago. Loss from continuing operations for the forty-weeks ended August 6, 2000 was $14.1 million, or $0.28 per share, compared to a loss from continuing operations of $29.9 million, or $0.61 per share, in 1999. For the forty-week period, the Company reported total revenues of $653.3 million compared with $744.7 million for the same period last year. Revenues for the forty-week period were impacted by an overall comparable store sales decrease of 0.2%, the closure of 127 under-performing restaurants and the sale of 19 Shoney's Restaurants to franchisees during 1999. During the forty-week period of 2000, the Company closed one Shoney's Restaurant, sold 12 Shoney's Restaurants to franchisees, opened one Captain D's and closed one Captain D's. Franchisees opened twelve Shoney's Restaurants (all of which were sold from the Company to franchisees), closed forty-one Shoney's Restaurants and closed two Captain D's. Income from continuing operations for the forty-week period includes: * pre-tax gains related to the sale of property, plant and equipment $6.6 million * pre-tax non-cash asset impairment charges -- $12.8 million Income from continuing operations in the forty-week period of 1999 includes: * pre-tax gains related to the sale of property, plant and equipment -- $16.1 million * pre-tax charge related to certain litigation -- $14.5 million * pre-tax non-cash asset impairment charges -- $18.4 million * pre-tax expenses related to certain litigation -- $3.6 million. Headquartered in Nashville, Tennessee, Shoney's, Inc. owns, operates and franchises 1,048 restaurants in 28 states, including 616 Company-owned and 432 franchised restaurants, under the names Shoney's Restaurants and Captain D's Seafood Restaurants. Shoney's, Inc. is traded on the Over the Counter Bulletin Board under the symbol "SHOY." SUN HEALTHCARE: Omega Says Sun Isn't Meeting its Obligations ------------------------------------------------------------ Omega Healthcare Investors, Inc., and OHI of Texas, Inc. complain that SunBridge Healthcare Corporation is not meeting obligations pursuant to the assumption of an executory contract, a forbearance contract and operational transfer agreements. Accordingly, Omega and OHI of Texas move the Court, pursuant to 11 U.S.C. sections 105, 365 and 503, to compel SunBridge to perform the Court's Assumption and Rejection Order authorizing assumption of a Forbearance Agreement and certain Lease Agreements and related Agreements, rejection Of certain Lease Agreements, transfer of assets and other relief. Omega further asserts that the obligations should be elevated to administrative expense priority against the estate, given that the contract has been assumed. Specifically, Omega and OHI of Texas accuse SunBridge of not meeting obligations with respect to: (1) payment of accrued pre-petition employee benefits; (2) payment of pre-petition taxes; (3) reconciliation of accountings of patient trust funds and the transfer of such patient trust funds to the Transferees and seek the Court's authority to compel SunBridge to perform such obligations. The Debtors object and the matter is continued to September 22, 2000. The Arguments (1) Accrued Employee Benefits Omega and OHI Texas assert that under Section 4.1 of the SunBridge Transfer Agreements, SunBridge must pay Accrued Employee Benefits to eligible employees of the Transferred Facilities if required by applicable law or by employment or union contracts. Omega quotes: "Subject to the approval of the Bankruptcy Court, Prior Operator [Lessee] shall pay each of the employees of the Facility for services provided prior to the Effective Date as and when due in accordance with applicable law and any applicable employment or union contracts, including but not limited to vacation pay, sick time and any other accrued paid time off [Accrued Employee Benefits] to which the employees are entitled by law or under the terms of such employment or union contracts. Prior Operator shall remain solely liable for demands, claims, or actions (including all costs and expenses related to the settlement thereof) made by the employees of the Facility for such payments, and for any and all other demands, claims or actions of such employees arising out of their employment by Prior Operator." Omega contends that under section 1.014(a) of the Texas Payday Act, an employer must pay the employee his wages in full within six days after discharge and wages as defined in the Act refer to wages under a written agreement or under a written policy of the employer. Omega then draws the Court's attention to SunBridge's most recent addendum to the Employee Handbook, which provides that SunBridge's employees are entitled to accumulate their Accrued Employee Benefits and, upon termination of employment, receive the cash surrender value of any unused benefits: "When an employee terminates and is determined to be eligible for the payment of unused PTO [Employee Benefits] ..., payment will be based on the "earned" portion of the balance and paid out at -fifty percent (50%) of full value." Omega alleges that SunBridge, in its February 29, 2000 response to the request of OHI Texas for payment, SunBridge told OHI Texas that it is not liable under both Section 4.1 of the OHI Texas Transfer Agreement and Texas law to reimburse OHI Texas for Accrued Employee Benefits. SunBridge, however, explains in its response to the Omega motion that the Debtors and their counsel have not had an opportunity to finalize a response with respect to the disputed employee benefits because they did not receive the Exhibits to Omega's motion until two days before the deadline for objection, but they promise to report to the Court on their final determinations at or before the hearing. (2) Operational Expenses Omega contends that SunBridge is therefore liable for all operational expenses (including real and personal property taxes) attributable to the period prior to the Effective Date, citing Section 6.1 of SunBridge Transfer Agreements: "Utility charges for the billing period in which the Effective Date occurs, real and personal property taxes, prepaid expenses and other items of revenue or expense attributable to the Facilities shall be prorated between Prior Operator SunBridge and New Operator as of the Effective Date. In general, such prorations shall be made so as to reimburse Prior Operator for prepaid expense items and to charge Prior Operator for prepaid revenue items or expenses to the extent that the same are attributable to the period on and after the Effective Date." The Debtors argue that the disputed prepetition tax claims would be, in the ordinary course, "rent" obligations of the Debtors to Omega under the relevant leases. As such, those claims were released, under the Forbearance Agreement which provides for, with limited and heavily negotiated exceptions, a very broad release by Omega of claims against the Debtors. Accordingly, the Debtors believe that they are not obligated to pay the prepetition tax amounts referred to by Omega and that they are in compliance with the Forbearance Agreement and the Assumption and Rejection Order. In support of their argument, the Debtors cite Section XI.B of the Forbearance Agreement: "[e]xcept for the Lessees' Monetary Obligations, Lessors acknowledge and agree that the Lessees have paid Lessors all Base Rent, Minimum Rent and other monetary amounts owing to Lessors under the Leases through the date hereof. Upon the Effective Date, other than with respect to amounts owing under the Rejected Leases which shall be handled as set forth in Section IV hereof and amounts owing for the period between the date of this Agreement and the Effective Date under the Leases that pursuant to Section V hereof are to be assumed, each Lessor ... shall forever release and discharge each Lessee ... from any and all actions, claims, debts, demands, duties, expenses, judgments, liabilities and obligations whatever, whether known or unknown, whether from contract or tort, from the beginning of time to the Effective Date, arising out of or connected with, directly or indirectly, any of the Leases." (3) Patient Trust Funds Omega asserts that Section 2.l of the SunBridge Transfer Agreements requires SunBridge to provide to the designated Transferee a complete and properly reconciled accounting of patient trust funds held by the SunBridge on the Effective Date for the Transferee's review and approval: "On the Effective Date, Prior Operator shall prepare a true, correct and complete accounting (properly reconciled)... of any patient trust flmds... held by Prior Operator on the Effective Date for patients at the [Transferred] Facilities.., and shall submit the same to New Operator [Transferee] for its review and approval... In addition, after SunBridge and the designated Transferee agree upon the accounting, SunBridge is obligated to transfer such patient trust funds to the Transferee: "Within ten (10) days after Prior Operator and New Operator [Transferee] agree upon the accounting provided for in Section 2.1, Prior Operator hereby agrees to transfer such Patient Trust Funds to New Operator..." The Debtors tell the Court that, in response to Omega's correspondence to them, they have reviewed their records and provided to the new operators of the Transferred Facilities reconciliations of the relevant patient trust find accounts, but have not received any indication from those new operators that they have any objection to or questions with respect to such reconciliations. In addition, the Debtors report that they have transferred all of the relevant patient trust funds to such new operators, and none of the new operators have raised any objection with respect to such transfer. The Debtors tell Judge Walrath that they believe, and will continue to believe that they have complied with the Operations Transfer Agreements in these respects unless Omega can provide them with specific instances otherwise. (Sun Healthcare Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900) THEBIGSTORE.COM: Dot.com Retailer Faces Lawsuits & Involuntary Chapter 7 ------------------------------------------------------------------------ TheBigStore.com is in hot water, threatened with lawsuits and an involuntary bankruptcy petition. The Santa Ana, Ca. online retailer faces lawsuits by its creditors as well as accusations by former employees that its chief financial officer had engaged in fraud. In addition, claiming that TheBigStore owes it nearly $3.3 million, Ingram Micro Inc., a Santa Ana electronics-distribution company, is trying to force the company into a Chapter 7 liquidation. For a free copy of an article about TheBigStore, which laid off most of its workers but insists it is still in business, call 800-407-9044. (New Generation Research, Inc., 14-Aug-00) TRANSTEXAS GAS: Reports Encouraging Operating Results For Second Quarter ------------------------------------------------------------------------ TransTexas Gas Corporation (OTCBB:TTXG) reported that operating results for its second fiscal quarter ended July 31, 2000 included net income of $3.9 million, or $3.13 per common share on revenues of $43.4 million. This compares with a net loss of $7.0 million, or $0.12 per common share on revenues of $28.6 million in the prior year quarter. Year-ago figures reflect the company's ceasing the accrual of interest on certain pre- petition obligations subject to compromise, after April 30, 1999 as a result of the company's Chapter 11 filing. Earnings before interest, income taxes, litigation accruals, depreciation, depletion and amortization (EBITDA) for the quarter was $31.7 million, as compared to $15.6 million in the prior year quarter. Cash flow from operations was $30.2 million for the quarter versus $2.2 million in the previous year quarter. Total capital expenditures were $25.3 million, versus $5.9 million in the prior year. Sales of gas, condensate and natural gas liquids for the quarter were $42.8 million, up 52% from the previous year's $28.1 million. Total production volume for the quarter was 11.7 billion cubic feet of natural gas equivalent (Bcfe) compared to 11.6 Bcfe in the prior year quarter. Average natural gas pricing was $4.11 per thousand cubic feet (Mcf) during the three-month period vs. $2.26 per Mcf a year earlier. Average crude oil and condensate pricing was $29.50 per barrel (Bbl), up 65% from the previous year's $17.90 per Bbl in the year-earlier quarter. Depreciation, depletion and amortization decreased by $1.2 million due to a decrease in natural gas and condensate production, partially offset by a $0.25 per Mcfe increase in the depletion rate because of higher acquisition cost of properties, increased drilling and development costs and unsuccessful drilling results in prior periods. Lifting costs averaged $0.53 per thousand cubic feet equivalent (Mcfe), versus $0.39 per Mcfe in the prior year quarter. The increase was attributable primarily to increases in workover expenses. General and administrative expenses for the quarter were reduced to $4.6 million as compared to $5.9 million in the prior year quarter. The decrease was attributable primarily to a decline in professional fees. Six Month Results For the six months ended July 31, 2000, TransTexas reported net income of $1.7 million, or $1.35 per common share, on revenues of $81.9 million. This compares to a net loss of $42.8 million, or $0.74 per common share, on revenues of $47.6 million in the first six months of fiscal 2000. Gas, condensate and NGL revenues for the six months increased by $34.2 million from the prior period primarily due to increased oil and gas prices. Total production volumes for the six months were 23.2 Bcfe, versus 22.7 Bcfe in the prior year. Average natural gas pricing during the six- month period was $3.43 per Mcf versus $2.07 in the prior period. Crude oil and condensate prices increased to $28.89 per Bbl versus $15.82 in the prior year period. Operating expenses for the six months decreased 29% to $8.2 million from $11.5 million due primarily to decreases in salt water disposal and maintenance costs. TransTexas is engaged in the exploration, production and transmission of natural gas and oil, primarily in South Texas, including the Eagle Bay field in Galveston Bay. Copies of the company's filings with the Securities and Exchange Commission may be found on the Internet at http://www.sec.gov/cgi-bin/srch-edgar?transtexas+adj+gas. VLASIC FOODS: Reports Break Even 4th Quarter Results; Lazard Still at Work -------------------------------------------------------------------------- Vlasic Foods International (NYSE: VL) announced its fiscal 2000 fourth quarter and year-end results for the period ending July 30, 2000. The Company said that its strategic review process, which it is implementing together with Lazard Freres, is progressing and continues to be on schedule. The Company also said that its introduction of new and improved products in its "Swanson" frozen foods, "Vlasic" condiments and "Open Pit" barbecue sauce businesses were on-track for success in fiscal year 2001. Vlasic Foods reported fourth quarter sales of $206 million, compared to $275 million a year ago. Excluding sales from divested businesses, sales a year ago were $235 million. For the year, sales were $902 million, versus $967 million a year ago, excluding the impact of divested businesses. Reported sales in the prior year were $1.188 billion. As expected, earnings before interest and taxes (operating earnings) for the fourth quarter were break even. Net earnings from continuing operations for the quarter showed a loss of $11 million, or $0.24 per share versus earnings of $1.5 million, or $0.03 per share a year ago as the Company focussed on cash generation. Net loss for the year was $30.1 million or a loss of $0.66 per share. In the prior year the net loss was $126.3 million or $2.78 per share. The prior year included special charges, principally related to the divestiture of Swift-Armour, totaling $140.5 million or $3.09 per share. During the fourth quarter, the Company and its senior credit facility bank syndicate reached an agreement to extend its existing waiver of certain covenants of that facility through February 28, 2001. The Company made significant progress during the quarter on several new and improved product introductions, including: two additional varieties in its successful line of "Swanson" Potato Topped Pot Pies; a new six-item line of "Vlasic" peppers; and a new premium line of "Open Pit Grill Classics" barbecue sauces. Customer acceptance for each of these initiatives has already reached more than 80 percent of their targeted goals for the year. WEDDING PERFECTIONS: Bid4Assets.com To Liquidate Bridal Business ---------------------------------------------------------------- Bid4Assets.com has been commissioned to auction the remaining assets of Wedding Perfections, Inc. This Stoneham, Massachusetts-based company recently filed for Chapter 7 liquidation in the U.S. bankruptcy court, District of Massachusetts. The assets available for auction include an inventory of approximately 500 bridal dresses, shoes, computer and office equipment and other miscellaneous items. Wedding Perfections, Inc. was a retail establishment in Stoneham, Massachusetts. The owners filed for bankruptcy in May 2000. Pending court approval, the assets are available for inspection before the auction closes at 3 p.m. EST on Sept. 29, 2000. Interested buyers can schedule a time to inspect the inventory and equipment through Bid4Assets.com by sending an email to service@bid4assets.com or calling toll free (877) 427-7387. Bid4Assets.com CEO, Tom Kohn, said, "Bankruptcy professionals often spend large amounts of time and resources trying to liquidate hard-to-sell assets. Bid4Assets.com was created to bring the efficiencies of the Internet to this market in order to close sales faster and at higher returns. We have enjoyed success in selling a wide range of assets from bankruptcy estates, including the type of inventory and equipment being sold in this case. Our buyers network and our marketing model are enabling bankruptcy professionals to maximize returns to creditors." Bid4Assets.com, which has listed more than $1 billion of assets for auction in the last six months, is the leading Internet auction marketplace for high-value, distressed assets in four categories: financial instruments, real estate, intangible property and personal property. The company's secure, online trading solution creates a single, full-service marketplace giving sellers of distressed assets immediate access to a global pool of qualified buyers. Similarly, buyers of distressed assets simplify the acquisition process by gaining access to a centralized marketplace and by conducting transactions online, saving hours and money formerly spent at public outcry auctions. According to multiple sources, distressed assets in the categories offered by Bid4Assets.com exceeded $250 billion in 1999. WESTSIDE HOUSES: Housing Firm Files for Chapter 11 Protection in New York ------------------------------------------------------------------------- Westside Houses, Inc. filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of New York, listing total assets and liabilities of $10 to $50 million each.. The case number is 00-14255, and Judge Burton R. Lifland is presiding. The Company is represented by Arthur Steinberg of Kaye Scholer Fierman Hays & Handler, LLP. (New Generation Research, Inc. 14-Aug-00) WORTHINGTON INDUSTRIES: Moody's Downgrades Senior Debt Ratings To Baa2 ---------------------------------------------------------------------- Moody's Investors Service downgraded the senior debt ratings of Worthingon Industries, Inc. to Baa2 from Baa1. The downgrade concludes a review initiated on August 15, 2000 following Worthington's announcement of an agreement to acquire the assets of Metal Tech, Nex Tech and Galv Tech (The Techs) in an all-cash transaction valued at approximately $300 million, with a contingent additional payment of up to $40 million. The downgrade is based on significantly higher financial leverage and reduced debt protection measurements arising from this debt-financed acquisition, as well as an expectation that, despite projected debt reduction, the company will maintain a more leveraged capital structure in the future. The rating also considers Worthington's position as a leading domestic steel processor, its relatively stable margins, and the benefits arising from its diversified steel fabrication operations. The outlook is stable. Ratings downgraded are: * Worthington Industries, Inc. -- senior unsecured notes and senior unsecured credit facility rated Baa1 The Techs are independent galvanizing operations with a combined annual capacity of approximately one million tons per year. In acquiring The Techs, Worthington adds a significant increment to its galvanizing capabilities, while broadening its customer base. Combined with acquisitions, divestitures and processing capacity added in a recently- completed capital investment program, Worthington has increased its focus on steel processing and fabrication while expanding the breadth of its capabilities and the diversity of markets served. This corporate repositioning, while conferring strategic benefits, has been achieved at the expense of higher debt levels. Combined with a more aggressive approach to shareholder returns, Worthington's credit profile has been altered materially. Debt added in the current transaction will further weaken debt protection measurements, but it is expected that Worthington will use cash flow to reduce debt until an appropriate capital structure is achieved. The outlook is stable, based upon expectations that major acquisition and share repurchase activity will be curtailed until significant debt reduction is achieved. Worthington Industries, headquartered in Columbus, Ohio, is a leading national producer of processed steel products. Sales totaled approximately $2 billion in fiscal year (May) 2000. * Bond pricing for the week of September 18, 2000 ------------------------------------------------- Data is supplied by DLS Capital Partners, Inc. Following are indicated prices for selected issues: AMC Ent 9 1/2 '11 44 - 46 Amresco 9 7/8 '05 34 - 36 Advantica 11 1/4 '08 52 - 58 Asia Pulp & Paper 11 3/4 '05 58 - 60 Carmike Cinema 9 3/8 '09 28 - 30 (f) Conseco 9 '06 63 - 65 Fruit of the Loom 6 1/2 '03 54 - 56 (f) Genesis Health 9 3/4 '05 6 - 8 (f) Globalstar 11 1/4 '04 29 - 31 Loewen 7.20 '03 34 - 36 (f) Oakwood Home 7 7/8 '04 34 - 36 Owens Corning 7 1/2 '05 51 - 53 Paging Network 10 1/8 '07 36 - 38 (f) Pillowtex 10 '06 18 - 20 Revlon 8 5/8 '08 52 - 54 Service Merchandise 9 '04 7 - 9 (f) Trump Atlantic 11 1/4 '06 69 - 71 TWA 11 3/8 '06 42 - 44 ********* Bond pricing, appearing in each Monday's edition of the TCR, is provided by DLS Capital Partners in Dallas, Texas. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency-related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles available from Amazon.com -- go to http://www.amazon.com/exec/obidos/ASIN/189312214X/internetbankrupt-- or through your local bookstore. 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. 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 * * *