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/raid1/www/Hosts/bankrupt/TCR_Public/001011.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, October 11, 2000, Vol. 4, No. 199 Headlines AMERISERVE: Announces Agreement To Sell Chicago Consolidated for $12.5M APPLE ORTHODONTIX: Exclusivity Extended through December 1 BREED TECHNOLOGIES: Asks for Extension of Exclusive Period through Year-End CROWN VANTAGE: Asset Sale Pact with Crown Acquisition Stalls ELDER-BEERMAN: Expects to Repurchase 3,333,333 Shares At or Below $5.25 FOUNDATION STILL WATER: U.S. Trustee Will Convene 341 Meeting on Oct. 24 FRUIT OF THE LOOM: Committee's Bid to Retain Jeffrey Chanin Draws Fire GC COMPANIES: Maine Mall Cinema Stays Open During Theater Operator Dilemma GEN FIRE: Case Summary and 30 Largest Unsecured Creditors GENESIS/MULTICARE: Healthcare Resources Affiliate Files for Chapter 11 GRAND UNION: New Jersey Bankruptcy Court Approves $60M Post-Petition Loan GREATE BAY: Sands Hotel Extends Equity-Based Offer to Purchase Casino HEILIG MEYERS: Equity Committee Balks at Procedures for Future Asset Sales HEILIG-MEYERS: Court Approves Akin Gump & BDO Seidman Engagements ICG COMMUNICATIONS: Restructuring Calls for 300 Job Cuts INTELLISYS GROUP: MCSi Signs Agreement to Purchase Significant Assets LOEWEN GROUP: Prime Succession Terminates Administrative Service Agreement NATIONAL FINANCE: Ex-Employees Retaliate And Pursue Own Recovery Plan NATIONAL HEALTH: Tokyo-Mitsubishi Bank Extends Credit Facility to Nov. 10 PINNACLE BRANDS: UV Color South and Professional Packaging Object to Plan PRIME SUCCESSION: Pulls the Plug on Loewen Administrative Service Agreement RELIANT BUILDING: Associated Materials Purchases Alpine Assets for $7.5M RELIANT BUILDING: Second Amended Appointment of Creditor's Committee ROBERDS, INC.: Applies To Employ Skoda, Minotti as Auditor & Tax Advisor SAFETY-KLEEN: Burlington Northern Requests Okay to Set-Off Mutual Debts STROUDS, INC: Needs More Time, to Oct. 24, to File Schedules & Statements TESSERACT GROUP: Education Operator Files Chapter 11; Schools Unscathed TOYSMART.COM: Assuming & Assigning Various Software License Agreements VENCOR, INC.: Agrees to Lift Stay to Permit Recovery on Insurance Policies * Meetings, Conferences and Seminars ********* AMERISERVE: Announces Agreement To Sell Chicago Consolidated for $12.5M ----------------------------------------------------------------------- AmeriServe Food Distribution, Inc. announced it has signed an agreement to sell the assets of Chicago Consolidated Corporation to Consolidated Distribution Corporation for approximately $12,500,000 (subject to certain adjustments relating to inventory levels). CCC is AmeriServe's redistribution company. In a separate transaction, AmeriServe and CCC signed an agreement to sell the stock of PFS de Mexico S.A. de C.V. and Servicios AmeriServe, S.A. de C.V. to Pacific Star, S.A. de C.V. and Pacific Star Holding, S.A. de C.V. for approximately $5,000,000 (subject to certain adjustments relating to working capital). PFS de Mexico and Servicios AmeriServe are AmeriServe's distribution companies in Mexico. "These transactions are another positive step forward in AmeriServe's ongoing efforts to maximize value to our creditors, while continuing to serve our customers and employees well," said Ron Rittenmeyer, AmeriServe's President and Chief Executive Officer. Both the CCC asset sale and the Mexican stock sales are subject to, among other conditions, U.S. Bankruptcy Court approval. AmeriServe, headquartered in Addison, Texas, a suburb of Dallas, is one of the nation's largest distributors specializing in chain restaurants, serving leading quick service systems such as KFC, Long John Silver's, Pizza Hut and Taco Bell. APPLE ORTHODONTIX: Exclusivity Extended through December 1 ---------------------------------------------------------- The US Bankruptcy Court, Southern District of Texas, Houston Division entered an order on September 28, 2000 extending the Plan Proposal Period and the Solicitation Period of Apple Orthodontix, Inc. through and including December 1, 2000 and February 1, 2001, respectively. On the same date the court "dismissed" the motion of the Official Committee of practitioners of Apple Orthodontix, Inc. to appoint an Examiner. BREED TECHNOLOGIES: Asks for Extension of Exclusive Period through Year-End --------------------------------------------------------------------------- Breed Technologies, Inc. seeks to further extend the exclusive periods during which the debtors may file plans of reorganization and solicit acceptance of such plans with the US Bankruptcy Court for the District of Delaware. A hearing on the motion has been scheduled for 4:00 PM on October 26, 2000. The debtors request a further extension of the Exclusive Periods to December 31, 2000 and February 28, 2001, respectively. Two very significant purchase offers for the sale of substantially all the debtors' assets are under consideration. On August 7, 2000 the debtors filed a joint plan of reorganization of Breed Technologies, Inc. which plan was based in large part on the acquisition of Breed by Harvard Industries, Inc. pursuant to sale procedures set forth in the plan. The debtors are presently negotiating the terms of a sale to a third-party purchaser, and, if successful, will immediately prepare and file an emergency motion to approve sale procedures and a revised plan and Disclosure Statement. The debtors require an additional period of time in which to develop and document a revised plan of reorganization. The debtors believe that a plan acceptable to all creditors can be developed and implemented. The debtors request that the court further extend the period during which they have the exclusive right to propose a plan and solicit acceptances thereof until December 31, 2000 and February 28, 2001. Such an extension will, according to the debtors, allow them to fully negotiate and develop a plan that maximizes the return for creditors. CROWN VANTAGE: Asset Sale Pact with Crown Acquisition Stalls ------------------------------------------------------------ Crown Vantage Inc. (OTC Bulletin Board: CVANQ) and its wholly owned subsidiary Crown Paper Co., announced that the letter of intent dated September 11, 2000, between Crown Acquisition Corporation ("CAC") and Crown Paper has been terminated by CAC. As previously announced, the letter of intent contemplated the sale to CAC of substantially all of the assets of Crown Paper. CAC stated that it terminated the letter of intent because the definitive agreement had not been executed by September 27, 2000, and alleged that certain conditions precedent could not be satisfied by Crown Paper. Despite terminating the letter of intent, CAC has expressed interest in acquiring the St. Francisville mill. Bob Olah, CEO of Crown Vantage and Crown Paper, commented, "While we are disappointed that the CAC transaction will not progress as planned, we feel that certain requested changes to the letter of intent did not yield fair market value for the assets being discussed. However, we are encouraged by the interest shown by other parties, not only in the mills that CAC was to purchase, but in all of the Company's mills. We are currently working with these parties in the diligence process." Olah continued, "The Crown management team remains focused on our responsibility to negotiate a deal or package of deals that delivers maximum value and provides both the ability to continue serving our customers and the avenue to emerge from bankruptcy." Prior to the termination of the letter of intent, Crown sought and received an extension of the exclusivity period until December 25, 2000, for producing a plan of reorganization. ELDER-BEERMAN: Expects to Repurchase 3,333,333 Shares At or Below $5.25 ----------------------------------------------------------------------- The Elder-Beerman Stores Corp. (Nasdaq:EBSC) announced the preliminary results of its self-tender offer, which expired at 12:00 midnight, New York City time, on Thursday October 5, 2000. Elder-Beerman commenced the tender offer on September 8, 2000 to purchase up to 3,333,333 shares of its common stock at a price between $4.50 and $6.00 per share, net to the seller in cash, without interest. Based on a preliminary count by the depositary for the tender offer, Elder- Beerman expects to purchase 3,333,333 shares at $5.25 per share from the shares tendered at or below $5.25. Elder-Beerman also expects to purchase an additional 54,277 shares, or approximately 0.4% of the outstanding shares, which is the additional amount that may be purchased without amending or extending the tender offer. The total number of shares Elder- Beerman expects to purchase is 3,387,610 shares. Shares tendered at prices higher than $5.25 will be promptly returned. The actual number of shares to be purchased and the purchase price are subject to final confirmation and the proper delivery of all shares tendered and not withdrawn, including shares tendered pursuant to the guaranteed delivery procedure. Payment for shares accepted and return of all shares tendered but not accepted will occur as soon as practicable after determination of the number of shares properly tendered. After completion of the tender offer, Elder-Beerman will have approximately 11,285,076 shares of common stock outstanding. The dealer-manager for tender offer was Wasserstein Perella & Co. The nation's ninth largest independent department store chain, The Elder- Beerman Stores Corp. is headquartered in Dayton, Ohio and operates 62 department stores in Ohio, West Virginia, Indiana, Michigan, Illinois, Kentucky, Wisconsin and Pennsylvania. Elder-Beerman also operates two furniture superstores. Elder-Beerman has announced it will open a new concept store in Jasper, Indiana in November of 2000. FOUNDATION STILL WATER: U.S. Trustee Will Convene 341 Meeting on Oct. 24 ------------------------------------------------------------------------ A chapter 11 bankruptcy case concerning Foundation Still Waters, Inc. was filed on September 15, 2000. The debtor is represented by Craig Hansen of Squire Sanders & Dempsey, Phoenix, Az. A meeting of creditors will be held on October 24, 2000 at 4:30 PM, Office of US Trustee, Phoenix, Az. The judge assigned to the case is the honorable George B. Nielsen, US Bankruptcy Court District of Arizona, Phoenix Division. FRUIT OF THE LOOM: Committee's Bid to Retain Jeffrey Chanin Draws Fire ---------------------------------------------------------------------- Robert M. Dowd, Esq., of Griswold, Lasalle, Cobb, Dowd & Gin LLP, presents the Court with an Application on behalf of the Official Committee of Unsecured Creditors of Fruit of the Loom, Inc., seeking authority to retain Jeffrey Chanin LLC as investment advisors. Specifically, the Official Committee asks Chanin to: a) Assist the Committee in developing, coordinating, structuring and negotiating the terms and conditions of the Reorganization Plan; b) Estimate the value of securities to be issued to the Unsecured Lenders under the Reorganization Plan; c) Provide expert testimony regarding valuation and recoveries under the Reorganization Plan; d) Analyze potential divestitures; e) Assist the Committee in developing alternative plans, including contacting potential plan sponsors; f) Provide other and further financial advisory service Mr. Dowd states that Chanin will work diligently to ensure that no unnecessary duplication of effort occurs between Chanin and Arthur Andersen LLP, the Committee's existing financial advisors. Chanin agrees to advise the Committee in exchange for a $150,000 monthly fee plus reimbursement of out of pocket expenses. Chanin reserves the right to request a success fee. Steven R. Strom, Managing Director of Jeffery Chanin assures the Court that Chanin is disinterested. Mr. Strom relates that he conducted a search using a proprietary computer database and determined that Chanin holds no conflicts of interest. However, Chanin feels it appropriate to disclose its list of prior clients that are also involved in the Fruit of the Loom proceedings: Bank of New York, Bank of America, Bank of America Securities, Societe Generale, Credit Suisse First Boston, Fidelity, Merrill Lynch and First Trust. The Official Committee's request stinks like week-old boxer shorts, John H. Knight of Richards, Layton, & Finger, says in so many words, on behalf of Bank of America. BofA objects to Chanin's retention, reminding the Court that on February 8, 2000, the Official Committee filed the application to retain Arthur Andersen as financial advisor. On March 17, 2000, at the behest of the Official Committee, the Court approved the retention of Andersen as "accountant and financial advisor." The filing includes an affidavit by Perry M. Mandarino, an Andersen partner, in support of his firm's retention. Mr. Mandarino states that the range of services for which the Official Committee retained his firm is "quite broad." At the time, the Official Committee claimed that Andersen was to provide: a) Evaluation of the Reorganization Plan; b) Determination of the feasibility of the Reorganization Plan; c) Preparation of a going concern sale and/or liquidation value analysis; d) Tax and valuation analysis; e) Assistance in any divestitures; and f) Testimony on findings if required. Mr. Dowd tells the Court that a review of the Andersen fee applications indicate the firm has been extremely active on behalf of the Official Committee. Through July 26, 2000, Andersen submitted five fee applications for a broad array of services totaling $877,321 in fees and $40,559 in expenses, representing over 3,500 hours. According to Mr. Dowd, the application indicates Chanin will perform work that substantially duplicates the scope of services Andersen was retained to perform and has already rendered. Essentially, all services described in the application are within the express scope of Andersen's assignment. In addition, the Chanin application excludes a mandate for traditional investment banking services such as raising capital and issuance of fairness opinions that Andersen might not be qualified to provide. Unlike the Official Committee's prior request for additional litigation counsel, there is no allegation of conflict of interest to support retention. In fact, the application does not attempt to explain why retention of Chanin is necessary given Andersen's prior engagement. Andersen already provides the valuation services that the Official Committee desires from Chanin. Mr. Dowd suggests that attempts to retain a second financial advisor are attributable to the Official Committee's displeasure with the valuation opinions already expressed by Arthur Andersen and the implications that such valuation has for the Official Committee's position in the Fruit of the Loom proceedings. Expert opinion shopping will impose an additional administrative expense burden on an already burdened estate. Christopher J. Lhulier, Esq., of Pachulski, Stang, Ziehl, Young & Jones, interposes an objection on behalf of the Unofficial Committee of Secured Noteholders. The Unofficial Committee echoes many of the objections raised by Bank of America. J. Kate Stickles, Esq., speaking for Fruit of the Loom, objects to the Official Committee's Application too. The services provided will be duplicative within the scope of Andersen's retention. The new application by the Official Committee contains identical justification to that of the Arthur Andersen application. Ms. Stickles provides a chart of nomenclature used by the Official Committee in its application for retention of Andersen and that of Chanin. She attempts to prove that the engagements are redundant. She shows Judge Walsh a side-by-side chart that outlines the fee applications and descriptions of services performed to prove her claim of likely duplicity. Not content to let the parties with economic stakes in the outcome of FTL's chapter 11 cases to fight their own battles, Patricia A. Staiano, the United States Trustee for Region III objects to the Official Committee's Application. Daniel K. Astin, Esq., outlines two bases for the U.S. Trustee's objections: * First, Chanin requests a success fee without identifying any basis for calculating that fee; * Second, the Application indicates that Chanin may be entitled to indemnification for services provided, and indemnification, she argues, is inappropriate. (Fruit of the Loom Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 609/392-0900) GC COMPANIES: Maine Mall Cinema Stays Open During Theater Operator Dilemma -------------------------------------------------------------------------- In spite its parent theater company in financial incapability, Maine Mall Cinema will remain open for the public, the Portland Press Herald reports. Communications director, Brian Callaghan says, General Cinema has closed already 25 theaters in nine states. "These are very competitive times in the movie theater industry, and we're looking at selling theaters, closing some, renegotiating leases, and keeping the option of bankruptcy open as well," Callaghan added. The only seven-screen theater in Maine, owned by General Cinema has started operations since 1975. It's one of three first-run theaters in Greater Portland, along with Hoyt's theaters in Falmouth and South Portland. GC Companies Inc., which operates General Cinema is based in Chestnut Hill, Massachusetts. GEN FIRE: Case Summary and 30 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Gen Fire Inc. 1685 Shermer Road Northbrook, IL 60062 Affiliate: Blue Eagle Truck Lines, Inc. Chapter 11 Petition Date: October 5, 2000 Court: Eastern District of Illinois Bankruptcy Case No.: 00-29219 Judge: Erwin I. Katz Debtor's Counsel: Barry A. Chatz, Esq. Kamensky & Rubenstein 7250 N Cicero Ave. STE 200 Lincolnwood, IL 60712 (847) 568-5613 30 Largest Unsecured Creditors Siderca Corporation 4511 Brittmoore Road Houston, TX 77041 (713) 767-4444 $ 449,960 Hi-Temp, Inc. 75 E. Lake Street Northlake, IL 60164 (708) 345-5640 $ 324,291 Rhodia, Inc. 259 Prospect Plains Road Bldg. D Cranberry, NJ 0851 (609) 860-0103 $ 319,359 Worthington Steel $ 227,618 Alpha Tube Corp. $ 163,443 Plymouth Tube Co., USA $ 152,911 Anchor-Harvey Components $ 144,844 Mannesmann Pipe & Steel $ 137,143 Chicago Anodizing $ 128,384 Allegheny Rodney $ 115,698 Ebur Erhard Burkard GMBH $ 110,815 Valmont Industries, Inc. $ 88,375 Packaging Design Corp. $ 85,046 AGA Gas, Inc. $ 77,248 Topflight Corporation $ 73,009 Marsh & McLennan, Inc. $ 72,962 Tri Star Metals $ 70,111 Ceodeux $ 61,605 RES Mfg. Co. $ 61,161 Corey Steel $ 61,135 Mandel Metals, Inc. $ 59,368 H3R, Inc. $ 59,000 RET Enterprise Corp. $ 58,825 Shiloh Corporation $ 58,702 Goodyear Rubber $ 57,008 C.P. Screw $ 55,545 Victor $ 50,850 Worthington Cylinder Corp. $ 46,767 Saturn Steel, Inc. $ 45,196 GENESIS/MULTICARE: Healthcare Resources Affiliate Files for Chapter 11 ---------------------------------------------------------------------- Healthcare Resources Corp., formerly known as Homestead Center and Homestead Nursing and Rehabilitation Center, filed for relief under chapter 11 of title 11 of the United States Bankruptcy Code. The Bankruptcy Clerk assigned case number 00-03196 to the proceeding. Healthcare Resources is an affiliate of Genesis Health Ventures, Inc., and its chapter 11 case will be jointly administered with the GHV Cases. (Genesis/Multicare Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900) GRAND UNION: New Jersey Bankruptcy Court Approves $60M Post-Petition Loan ------------------------------------------------------------------------- Grand Union Co. (GUCO) has received interim court approval of its $60 million debtor-in-possession financing facility, according to a Form 8-K filed Thursday with the Securities and Exchange Commission. The U.S. Bankruptcy Court in Newark, N.J. approved the agreement at a hearing on which the supermarket operator filed for chapter 11 bankruptcy protection for the third time since 1995. (ABI 09-Oct-00) GREATE BAY: Sands Hotel Extends Equity-Based Offer to Purchase Casino --------------------------------------------------------------------- Alfred J. Luciani, President & CEO of the Sands Hotel & Casino announces that GB Holdings, Inc., the parent company of the Sands Hotel & Casino, has submitted a proposal to acquire the Claridge Casino Hotel in Atlantic City, New Jersey, that would permit the Claridge to emerge promptly from Chapter 11 bankruptcy proceedings. The proposal, which would include the issuance by the company of approximately 7.2 million shares of its common stock, is currently under review by the Claridge. Luciani said, "The transaction is beneficial to the Sands stockholders. It is expected to be immediately accretive to the Sands and would permit the combined companies to go forward as strong competitors in a marketplace that already includes a number of companies operating at multiple locations. With the consummation of this transaction the combined Sands-Claridge would be in a position to compete as equals with those companies. In addition, our proposal is clearly in the best interests of the Claridge employees, as the Sands would continue operations of the Claridge facility as a casino hotel." The company believes the offer is superior to alternative proposals when viewed from the perspective of the amount and form of consideration, the lack of risk of non-confirmation of the proposal, the timing and certainty of completion of the transaction, the structure of the proposal, and regulatory implications. Luciani stated that he anticipated the regulatory approvals for the acquisition would likely be obtained expeditiously. "GB Holdings, which is currently licensed to own the Sands Hotel & Casino, would not face the type of opposition based on economic concentration, as would be inherent in an application by a large, multiple-licensed casino operator in Atlantic City." HEILIG MEYERS: Equity Committee Balks at Procedures for Future Asset Sales -------------------------------------------------------------------------- The Official Committee of Equity Security Holders by its proposed counsel, Hunton & Williams, objects to the motion of Heilig-Meyers Company, et al. for an order establishing procedures for future asset sales. The debtors seek approval of procedures by which they may sell, without further order of the court, "individual stores and other assets... provided that the consideration received does not exceed $500,000 per store or $2 million per transaction in the event of a multiple-store sale." The motion seeks authority to conduct any proposed sale, without further order, provided that not objection is received to the proposed sale on not less than 10 days notice to the Creditors Committee, the Equity Committee, the interest landlords or lienholders, counsel for the DIP Lenders, and counsel to the agent for the debtors' pre-petition lenders. The Equity Committee has two primary objections to the motion. First, the motion does not provide adequate means or notice to ensure that any bid is fair consideration for the assets to be sold. The Equity Committee argues that at least three elements of the procedures are inadequate: a) Ten days is simply not enough time for financial advisers to the Equity Committee to evaluate a pending offer. b) There is no description of the information that will be provided to the Notice parties. c) There will be little or no basis upon which the Equity Committee or any other Notice Party will know if the proposed sale is at fair value unless there is ample opportunity for other potential bidders to consider making an offer on each proposed sale. Ten days is insufficient time to allow potential bidders to consider making a competing offer. The second principal objection of the Equity Committee to the motion is that, through the motion, the debtors may be down-sizing their store operations without ever announcing or seeking approval of such a plan a through a motion setting forth the basis for the debtors' business judgment. The Equity Committee is very concerned that the debtors will further reduce the number of stores in its operation through piece-meal sales of its stores and inventory in a fashion that effectively will limit the debtors' avenues and opportunities in any reorganization effort. Thus the authority in the motion could rise to a level of a sub rosa plan without adequate disclosure of the debtors' business plans and at a time when the debtors have not yet filed their schedules or statement of financial affairs and not yet participated in a meeting of creditors pursuant to Section 341. Because the motion is not sufficiently limited to only the 302 stores that were the subject of the GOB sale order, or to a specific number of additional store locations, the Committee argues that the motion may allow the debtors to circumvent the plan process in re-defining its role in the retail furnishing business. HEILIG-MEYERS: Court Approves Akin Gump & BDO Seidman Engagements ----------------------------------------------------------------- By order entered on September 25, 2000, the Official Committee of Unsecured Creditors of Heilig-Meyers Company, et al. is authorized to retain Akin, Gump Strauss, Hauer & Feld LLP as counsel to represent it as counsel. The court did not approve such retention nunc pro tunc to August 17, 2000. By order entered on September 25, 2000, the Official Committee of Unsecured Creditors of Heilig-Meyers Company, et al. was authorized to retain BDO Seidman, LLP as accountant. The court did not approve such retention nunc pro tunc to August 17, 2000. ICG COMMUNICATIONS: Restructuring Calls for 300 Job Cuts -------------------------------------------------------- ICG Communications, The Denver Post reports, cuts off 10 percent or 300 employees off its manpower nationwide as it restructures. Spokeswoman Silvia McLachlan, CEO Randall E. Curran and president Bill Beans, Jr., declined to comment about the layoffs or the restructuring activities. Facing financial difficulties, the Arapahoe County-based voice and data seller, also faces a lawsuit in behalf of investors brought by Weinstein Kitchenoff Scarlato & Goldman. According to investment analyst Roger Metz, who keeps track of ICG, he has no knowledge about the layoffs, and added that it wasn't a surprise. "It's absolutely not a surprise that this would happen. [ICG] is presumably in the midst of an overhaul internally," Metz said. INTELLISYS GROUP: MCSi Signs Agreement to Purchase Significant Assets --------------------------------------------------------------------- MCSi, Inc. (Nasdaq:MCSI) announced that it had signed an agreement to purchase a significant portion of the assets of Intellisys Group, Inc., a $150 million (annual) revenue integrator of audio-visual systems and products. This agreement is a part of a proposed Chapter 11 reorganization of Intellisys. Terms of the agreement were not announced. The closing of the asset acquisition agreement is subject to certain governmental and other approvals. "Going forward, this Intellisys - MCSI transaction will be quite potent," said Michael E. Peppel, Chairman, President and Chief Executive Officer of MCSi, Inc. "With the human and technical resources which will be available to MCSi, customers can expect a solution that is unparalleled in the industry. This relationship will represent the fusion of two industry pioneers that will translate into remarkable opportunities." "This transaction is a significant step forward for our organization," said Mike Gummeson, President and CEO of Intellisys. "The combination of Intellisys Group and MCSI will solve the resource and systems issues which have so severely hampered our company and create an industry powerhouse," Mr. Gummeson concluded. Headquartered in Westlake Village, California, Intellisys Group has 14 offices throughout California, Washington, Oregon, Colorado, Texas, Georgia and Massachusetts. Intellisys Group designs, sells, installs, services and supports integrated audio-visual presentation, conferencing, and networked media systems. It also sells a wide variety of portable presentation equipment. MCSi has emerged as the nation's leading systems integrator of state-of- the-art presentation and broadcast facilities. MCSi's foresight and ability to converge three key industries: audiovisual systems, broadcast media and computer technology, combined with design-build and engineering expertise, computer networking and configuration services, an extensive product line, and quality technical support services, has given MCSi a distinct advantage in the systems integration marketplace and contributed to the dramatic growth of the company. MCSi's scalable solutions address clients at every level of the business transaction continuum. Products and services are available directly through the Company and its sales specialists, many of whom provide enterprise-wide solutions and/or work exclusively with clients on strategic initiatives. Customers benefit from MCSi's years of experience, extensive product knowledge, and strong relationships maintained with manufacturers and technology leaders. LOEWEN GROUP: Prime Succession Terminates Administrative Service Agreement -------------------------------------------------------------------------- Mooting its request for relief from the automatic stay filed in Loewen Group International, Inc.'s chapter 11 case, Prime Succession, Inc., moves the Court for an order in its own chapter 11 proceeding pending before Judge Walsh (Bankruptcy Case No. 00-2969) authorizing it to reject the Administrative Services Agreement with LGII. Rejection of the ASA, Prime says, is a sound exercise of it business judgment because Prime has determined that the services covered under the ASA are not necessary for Prime's on-going operations. Moreover, by rejecting the ASA, Prime will eliminate substantial payment obligations under the Agreement. Alan W. Kornberg, Esq., Jeffrey D. Saferstein, Esq., and Dana Safran, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent Prime Succession in its on-going chapter 11 restructuring. (Loewen Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., 609/392-0900) NATIONAL FINANCE: Ex-Employees Retaliate And Pursue Own Recovery Plan --------------------------------------------------------------------- Former employees of National Finance Corp., intend to get back at the Company, The Times Union reports. NFC's former technology team now works for a software company that is based in Troy, Applied Cognetics LLC. Applied President, Chris Coulthrust was also a former NFC, who worked as a senior vice president of technology. Coulthrust was the original designer of the software that NFC claims considered one of its biggest assets. "We will make all of the code (to our mortgage software) public domain just to drive them out of business," he said. "We'll give away the licensing but sell the implementation, and the first money we get from that, we'll use to cover the payroll of all of the people that got laid off. That should make things even." Halfmoon, New York-based National Finance failed to find a buyer before it closed its doors in December. The lender is now trying to settle an involuntary Chapter 7 and is holding talks with potential investors to aid them in reopening within six months, President Tony Fisher said. NATIONAL HEALTH: Tokyo-Mitsubishi Bank Extends Credit Facility to Nov. 10 ------------------------------------------------------------------------- National Health Investors, Inc. (NHI and NHIPr - NYSE) announced that it received a 30 day extension to Nov. 10 on its Bank of Tokyo-Mitsubishi (BTMT) $102 million credit facility by making a payment of $7.5 million to reduce the principal. During the 30-day extension, NHI intends to enter into an amendment to the credit facility. The agreement in principle between the parties provides for collateralizing the BTMT credit facility and an existing $25 million Bank of Montreal term loan. The maturity date on the BTMT credit facility will be extended through Dec. 31, 2001 and the remaining balance on the Bank of Montreal loan will not be due until July 30, 2002. In addition, the banks are requiring substantial principal reductions over the next 14 months. NHI expects that the collateral for the credit facility and term loan will include a substantial portion of its first mortgage portfolio and the extended credit facility and term loan will bear an interest rate of LIBOR plus two percent. NHI also has a $38 million subordinated convertible debenture due on Jan. 2, 2001. NHI officials said a third and fourth quarter dividend would not be paid until the $38 million subordinated convertible debentures are paid in full or refinanced. Any dividend reduction or elimination will be used to pay required debt. Over time, NHI believes this debt reduction will enhance its cash flow. NHI fully intends to preserve its status as a Real Estate Investment Trust. Over the last several months, NHI and the banks have negotiated continuously regarding the credit renewal. While NHI believes an agreement in principal has been reached with the bank group regarding the terms and conditions of the new credit facility, no assurances can be given that a final agreement will be signed. If NHI is not able to renew the bank credit facility, it may be forced to seek one of the alternatives previously disclosed, including the sale of assets, merger, the sale of additional equity, or the filing for reorganization. PINNACLE BRANDS: UV Color South and Professional Packaging Object to Plan ------------------------------------------------------------------------- UV Color South, LP and Professional Packaging Systems, Inc. object to the confirmation of the joint plan of liquidation of Pinnacle Brands, Inc. et al. and the Bank Group. UVCS is an unsecured creditor holding a claim of approximately $1.3 million. UVCS objects to confirmation of the plan for the following grounds: a) By proposing the plan and pursuing claims only against Preference Defendants and releasing all claims against other recipients of avoidable preferential payments, the debtors have failed to comply with the provisions of Title 11, with the meaning of Section 1129 (a)(2) and the debtors have failed to propose the plan in good faith within the meaning of Section 1129(a)(3); b) The plan discriminates unfairly against the preference defendants and cannot be confirmed; and the plan is not fair and equitable and cannot be confirmed. Professional Packaging concurs and joins in with the objection filed by UV Color South LP and states that in addition, the plan does not meet the "Best Interests" test. PRIME SUCCESSION: Pulls the Plug on Loewen Administrative Service Agreement -------------------------------------------------------------------------- Mooting its request for relief from the automatic stay filed in Loewen Group International, Inc.'s chapter 11 case, Prime Succession, Inc., moves the Court for an order in its own chapter 11 proceeding pending before Judge Walsh (Bankruptcy Case No. 00-2969) authorizing it to reject the Administrative Services Agreement with LGII. Rejection of the ASA, Prime says, is a sound exercise of it business judgment because Prime has determined that the services covered under the ASA are not necessary for Prime's on-going operations. Moreover, by rejecting the ASA, Prime will eliminate substantial payment obligations under the Agreement. Alan W. Kornberg, Esq., Jeffrey D. Saferstein, Esq., and Dana Safran, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent Prime Succession in its on-going chapter 11 restructuring. (Loewen Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., 609/392-0900) RELIANT BUILDING: Associated Materials Purchases Alpine Assets for $7.5M ------------------------------------------------------------------------ Associated Materials Incorporated (Nasdaq: SIDE), announced that it has acquired substantially all of the assets of Alpine Industries, Inc. for $7.5 million in cash and the assumption of certain liabilities. Included in the acquired assets is Alpine's window fabrication facility located in Bothell, Washington. This facility manufactures vinyl windows for the new construction, manufactured housing and remodeling markets. Associated Materials' Alside division will integrate Alpine into its existing operations under the direction of Michael Caporale, Alside's President and Chief Operating Officer. Alside currently operates three vinyl window plants. The Company expects to retain most of Alpine's 200 employees and management team led by Kevin Kaestner. William W. Winspear, Chairman and Chief Executive Officer, commented: "We are very excited about the purchase of Alpine. This acquisition will increase Alside's presence on the West Coast as well as in the new construction and manufactured housing markets. Alpine has excellent people, solid product offerings and a loyal base of customers and suppliers. We look forward to growing Alpine's business and returning Alpine to its previous level of excellence." Net sales for Alpine's fiscal year ended March 31, 2000 were approximately $33.8 million. Alpine and its parent company, Reliant Building Products, Inc., filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code on July 11, 2000. Alpine's sales and profits were significantly impaired by the bankruptcy proceeding and Alpine is not currently expected to realize a profit for at least six months. The sale of Alpine's assets to Associated Materials was approved by the Bankruptcy Court. Associated Materials is a leading manufacturer of exterior residential building products, which are distributed through more than 75 company-owned Supply Centers across the country. Its Alside division produces a broad range of vinyl siding and vinyl window lines as well as vinyl fencing, vinyl decking and vinyl garage doors. The Company's operations also include AmerCable, a manufacturer of electrical cable used in mining, offshore drilling, transportation and other specialized industries. RELIANT BUILDING: Second Amended Appointment of Creditor's Committee -------------------------------------------------------------------- The following persons are appointed to the Official Creditor's Committee in the Chapter 11 case of Reliant Building Products, Inc. as submitted by William T. Neary, US Trustee. 1. Michael H. Gluckstein, Chair Guardian Industries Corporation Auburn Hills, MI 2. Michael T. Newsome Mikron/Zachary Scott & Co. Seattle, WA 3. Jonathan Petromelis, CPA Amesbury Group, Inc. Amesbury, Mass. 4. Brian Redpath Cardinal CG Buford, GA 5. Patrick T. Doyle Chelsea Building Products Oakmont, PA 6. Richard B. Weeks H.B. Fuller Company North American ASC Group St. Paul, MN 7. Michael Mandel Ryder Transportation Services Miami, Fla. 8. Garrett F. Charity PPG Industries, Inc. One PPG Place - 8th Floor Pittsburgh, PA 9. Jeffrey A. Ayres Bank One, NA Columbus, Ohio ROBERDS, INC.: Applies To Employ Skoda, Minotti as Auditor & Tax Advisor ------------------------------------------------------------------------ Roberds, Inc. seeks court authority to employ Skoda, Minotti, Reeves & Co., CPA, Ltd. as auditor and tax advisor. The debtor relies on the Affidavit of Kenneth L. Levine, Partner of the firm, and supervising partner of this assignment. Certain actions related to employee benefits plans of the debtor are necessary immediately according to the debtors. They include: a) An audit of Roberds, Inc. profit Sharing and Employee Retirement Savings plan for the years ended December 31, 1999 and 2000. b) Preparation of IRS Form 5500 for Roberds, Inc. Profit Sharing and Employee Retirement Savings Plan for the years ended December 31, 1999 and 2000. c) Audit of Roberds, Inc. Health and Welfare Benefit Plan for the years ended December 31, 1999 and 2000. d) Preparation of IRS Forms 5500 and 990 for Roberds, Inc. Health and Welfare Benefit Plan for the years ended December 31, 1999 and 2000. e) The IRS Forms 5500 are required to be filed with the IRS on or before October 16, 2000. The accounting firm which has been utilized by debtor for auditor, accounting and tax services, Deloitte & Touche LLP is unable to conduct the required audit and prepare the required IRS forms for several months due to a shortage of staff. The customary and proposed hourly rates of compensation for the professionals are as follows: partner $220-$240, manager $125-$135, support staff $75-$110. SAFETY-KLEEN: Burlington Northern Requests Okay to Set-Off Mutual Debts ----------------------------------------------------------------------- The Burlington Northern and Santa Fe Railway Company requests Bankruptcy Court authority, pursuant to 11 U.S.C. Secs. 362 and 553, for an order modifying the automatic stay to allow the Railroad to effect a setoff of certain mutual pre-petition claims and obligations between its and Safety- Kleen Corporation and to authorize the Railroad to file a proof of claim for the net amount owed to it after effecting a setoff. James R. Lackie, Esq., of Kean, Miller, Hawthorne, Varmond, McCowan & Jarman, L.L.P., in Baton Rouge, Louisiana, explains to the Court that the Railroad transports vast quantities of products for Safety-Kleen all over the country. At the Petition Date, Safety-Kleen owed the Railroad $1,250,466. Safety-Kleen provided certain pre-petition services to the Railroad, including recovery of oil and disposal of solids, and the Railroad owes Safety-Kleen $882,265 for those services. These amounts, Mr. Lackie argues, represent "mutually liquidated offsetting obligations," and set-off under Section 553 of the Bankruptcy Code is appropriate. Accordingly, the Railroad asks the Court to modify the automatic stay of to allow the setoff and for additional permission to file a proof of claim for the approximate net amount owed to it by Safety-Kleen after the setoff of approximately $368,201. (Safety-Kleen Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-0900) STROUDS, INC: Needs More Time, to Oct. 24, to File Schedules & Statements ------------------------------------------------------------------------- Strouds, Inc., debtor, seeks a court order further extending the time to file schedules, lists and statements of financial affairs. The debtor's deadline to file such statements and schedules is currently October 9, 2000, and the debtors seek to extend the time by an additional 15 days, until October 24, 2000. TESSERACT GROUP: Education Operator Files Chapter 11; Schools Unscathed ----------------------------------------------------------------------- The TesseracT Group Inc. (OTCBB: TSST) reported that it, along with its wholly-owned subsidiary Sunrise Educational Services Inc., filed voluntary petitions under Chapter 11 of the Bankruptcy Code on Oct. 6, 2000. TesseracT is a national leader in the operation of quality education programs through private and charter schools, and Sunrise owns preschools in Arizona which are part of the overall operations of TesseracT. Dr. Lucian Spataro, TesseracT's president and chief executive officer, stated, "TesseracT and Sunrise have filed for Chapter 11 protection as part of an ongoing effort to work out our financial problems with creditors while working in the best interests of students, employees and other interested parties. TesseracT's and Sunrise's school facilities remain open and fully operational." Spataro further stated, "Chapter 11 reorganization is designed to allow a business that is experiencing financial difficulties to restructure its business affairs." The companies believe that their normal operations will not be interrupted by the Chapter 11 filings. Prior to the Chapter 11 filings, TesseracT and Sunrise received a loan commitment of up to $1.2 million from TAI, LLC, for a line of credit to finance post-petition operations in the event cash flow of the companies are not sufficient to fund operations. This post-petition financing is subject to Court approval. TOYSMART.COM: Assuming & Assigning Various Software License Agreements ---------------------------------------------------------------------- Toysmart.com, LLC, seeks the Bankruptcy Court's approval for the terms and conditions of the assignment of certain of its software license agreements, Bkinformation.com reports. The bankruptcy court scheduled the hearing on November 7 and October 27 for the deadline to submit bids from interested parties or objections to the sale. The software license agreements subject to the motion are: (i) license agreement(s) with Great Plains Software, Inc.; (ii) license agreement(s) with Silknet Software, Inc; (iii) license agreement(s) with PaylinX Corporation; and (iv) certain license agreements with Microsoft. VENCOR, INC.: Agrees to Lift Stay to Permit Recovery on Insurance Policies ------------------------------------------------------------------------- Vencor, Inc., consents to modification of the automatic stay in its chapter 11 bankruptcy case to permit Susan Lebo and Jeanne Forkner, as Personal Representatives of the Estate of Marian Kathleen Forkner, to prosecute their claims against the Debtors to final judgment. The Debtors have determined that there is an insurance policy in favor of the Debtors relating to the allegations in the action. The lift of automatic stay is limited to the sole purpose of determining all issues of liability and damages, if any, against the Debtors. Any settlement of recovery is limited to applicable insurance proceeds. The Debtors do not consent to any further entitlement of the plaintiff to further distribution from the Debtors' estates on account of the judgment that may be entered, or to any collection from the Debtors or the Debtors' current and former employees, directors and officers. The plaintiff waives any and all claims for punitive damages and for recovery against Vencor and their present or former employees, officers and directors, any person or entity indemnified by the Debtors, and the Debtors' insurers. The Debtors agree that any settlement of the underlying action will include a general release of the plaintiff. (Vencor Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 609/392-0900) * Meetings, Conferences and Seminars ------------------------------------ October 17-18, 2000 INTERNATIONAL WOMEN'S INSOLVENCY AND RESTRUCTURING CONFEDERATION Annual Fall Conference Somewhere in Boston, Massachusetts Contact: bostwick@sherin.com November 2-6, 2000 TURNAROUND MANAGEMENT ASSOCIATION Annual Conference Hyatt Regency, Baltimore, Maryland Contact: 312-822-9700 or info@turnaround.org November 13-14, 2000 FULCRUM INFORMATION SERVICES, INC. The 2nd Annual Lending To & Investing In Troubled Health Care Companies Loews New York Hotel, New York, New York Contact: 1-800-869-4302 or www.fulcruminfo.com November 16-20, 2000 COMMERCIAL LAW LEAGUE OF AMERICA 80th Annual New York Conference Marriott World Trade Center, New York City Contact: CLLAmember@aol.com November 27-28, 2000 RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC. Third Annual Conference on Distressed Investing The Plaza Hotel, New York, New York Contact: 1-903-592-5169 or ram@ballistic.com November 30-December 2, 2000 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800 January 9-14, 2001 LAW EDUCATION INSTITUTE, INC. National CLE Conference on Bankruptcy Law Marriott, Vail, Colorado Contact: 1-800-926-5895 or www.lawedinstitute.com February 22-23, 2001 ALI-ABA Commercial Real Estate Defaults, Workouts, and Reorganizations Wyndham Palace Resort, Orlando (Walt Disney World), Florida Contact: 1-800-CLE-NEWS February 25-28, 2001 NORTON INSTITUTES ON BANKRUPTCY LAW Norton Bankruptcy Litigation Institute I Marriot Hotel, Park City, Utah Contact: 770-535-7722 or Nortoninst@aol.com February 28-March 3, 2001 TURNAROUND MANAGEMENT ASSOCIATION Spring Meeting Hotel del Coronado, San Diego, CA Contact: 312-822-9700 or info@turnaround.org March 28-30, 2001 RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC. Healthcare Restructurings 2001 The Regal Knickerbocker Hotel, Chicago, Illinois Contact: 1-903-592-5169 or ram@ballistic.com March 29-April 1, 2001 NORTON INSTITUTES ON BANKRUPTCY LAW Norton Bankruptcy Litigation Institute II Flamingo Hilton; Las Vegas, Nevada Contact: 1-770-535-7722 or Nortoninst@aol.com April 19-21, 2001 ALI-ABA Fundamentals of Bankruptcy Law Some Hotel in San Francisco, California Contact: 1-800-CLE-NEWS June 28-July 1, 2001 NORTON INSTITUTES ON BANKRUPTCY LAW Western Mountains, Advanced Bankruptcy Law Jackson Lake Lodge, Jackson Hole, Wyoming Contact: 770-535-7722 or Nortoninst@aol.com July 26-28, 2001 ALI-ABA Chapter 11 Business Reorganizations Hotel Loretto, Santa Fe, New Mexico Contact: 1-800-CLE-NEWS The Meetings, Conferences and Seminars column appears in the TCR each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* 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 * * *