/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/001017.MBX T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, October 17, 2000, Vol. 4, No. 203 Headlines 919 FEE ASSOCIATES: Chapter 11 Plan Confirmed & Ready for Consummation AIR CANADA: CBRS Reaffirms BB Unsecured Debenture Rating & Negative Outlook AMERICAN ECO: Taps Rabin Brothers as Auctioneers AMERICAN METROCOMM: Creditors' Committee Names Professionals AMERISERVE FOOD: Outlines Road to Confirmation by Late November AMERISERVE: Chicago & Mexican Assets Fetch $17,500,000 for Estate AUTORESEARCH LABORATORIES: Case Summary and 20 Largest Unsecured Creditors BOB AND JEAN'S: Case Summary and 19 Largest Unsecured Creditors BREED TECHNOLOGIES: Management Shake-Up Follows Filing of Chapter 11 Plan CAMBEX CORPORATION: Delivers Registration Statement for 50.3% of Shares CELLNET DATA: Schlumberger Debates Ownership of BCN Royalty Payments CENTER MUTUAL: S&P Assigns BBpi Financial Strength Rating to Insurer COSTILLA ENERGY: Advises Court & Creditors that Plan Took Effect on Oct. 1 DENBURY RESOURCES: Appoints 60% Shareholder as New Director FREDERICK'S OF HOLLYWOOD: Proposes $865,000 Key Employee Incentive Plan GLOBALSTAR TELECOMMUNICATIONS: Partners Agree to Purchase Equity for $56MM GOLDEN STAR: Appealing American Stock Exchange's Decision to Delist Shares GRAEME LIMITED: Court Approves Disclosure Statement for One-Penny Plan HASBRO, INC.: Moody's Lowers Long & Short Term Rating To Baa1 & Prime-2 HMKR, INC.: Court Fixes October 27 as Deadline for Filing Proofs of Claim IGI, INC.: Completes Sale of Poultry Vaccine Business for $14,800,000 IGI, INC.: Discloses Director & Officer Changes KAISER GROUP: Subsidiary Announces Exchange Offer Extended to Oct. 27, 2000 LAIDLAW, INC.: Extends Solicitation Deadline to 5:00 p.m. Tomorrow LANGSTON CORPORATION: Employs Berwind Financial as Investment Banker LIVENT, INC.: Confirmation Hearing on 3rd Amended Plan Set for Nov. 15 LUMBER INSURANCE: A.M. Best Downgrades Financial Strength Rating To B NATIONAL BOSTON MEDICAL: Claims Bar Date Set at November 20, 2000 ORIX CREDIT: Fitch Affirms BBB+ & F2 Long And Short Term Debt Ratings OUTBOARD MARINE: Moody's Junks Ratings on Unsecured Note Issues PACER TECHNOLOGY: Shareholders Will Convene for Annual Meeting on Nov. 21 PRECISION AUTO: Announces Completion of Refinancing and Year-End Results PSA, INC.: Selects Finley, Colmer and Company as Financial Advisor RIVER'S EDGE: Case Summary RIVERWOOD INTERNATIONAL: Sells Latin American Subsidiary to Pay Down Debts SCOUR, INC.: Web Host Faces $250 Billion of Video Pirating Claims SHOWSCAN ENTERTAINMENT: Seeks To Extend Lease Decision Period to January 12 SMALLWORLDWIDE PLC: 98% of Shareholders Tender Shares to GE Power Systems STROUDS, INC.: U.S. Trustee Will Conduct Meeting of Creditors on Nov. 3 STROUDS, INC.: Delaware Court Gives Nod to $50M DIP Financing Agreement TITANIUM METALS: Ratifies New Four-Year Collective Bargaining Agreement US WOOD: Obtains Extension of 365(d)(4) Deadline to January 27 WASTE MANAGEMENT: Names Bradley Holcomb as VP & Chief Procurement Officer WHX CORP: Tinkers with the Terms of Senior Noteholder Solicitation WSR CORPORATION: Asks for Extension of Exclusive Period through January 8 XEROX CORP.: Fitch Downgrades Sr Debt Rating To BBB- & On Watch Negative ********* 919 FEE ASSOCIATES: Chapter 11 Plan Confirmed & Ready for Consummation ---------------------------------------------------------------------- 919 Fee Associates LP and 919 Third Avenue Associates LP, debtors filed voluntary petitions for relief under Chapter 11 on July 28, 2000. The US Bankruptcy Court, Southern District of New York entered an order on October 3, 2000 approving the Disclosure Statement and the debtors' solicitation of votes with respect to the plan. The Confirmation Hearing was held on October 3, 2000, and the plan was confirmed. On the Effective Date, the aggregate amount of $11,178,763 that is reserved in the Escrow Account to fund the payment of allowed general unsecured claims shall be reserved from the cash collateral account in order to pay all allowed administrative expenses, allowed priority tax claims, allowed priority claims and allowed general unsecured claims. AIR CANADA: CBRS Reaffirms BB Unsecured Debenture Rating & Negative Outlook --------------------------------------------------------------------------- CBRS has reaffirmed the rating on Air Canada's (AC) Unsecured Debentures at BB. The Company is in the process of integrating Canadian Airlines International (CAI), acquired last year at a cost of approximately $3 billion, consisting primarily of debt. The acquisition has left AC with a much weaker credit profile and this is expected to be the case for the next couple of years. As a result of the integration of CAI, AC now controls over 80% of domestic traffic. The Company will be in a position to double its cash flow and service its enormous debt load more comfortably. The Company recently warned of a second half earnings' shortfall, due to higher fuel, labour and integration costs, (a significant portion of which were one-time expenses) as well as foregone revenues associated with the threat of a pilots' strike. Therefore, given the potential of weaker operating results coupled with AC's vulnerable financial condition, the Rating Outlook is revised to Negative from Stable. Corporate Profile Air Canada, combined with CAI is the world's 11 th largest airline, with major hubs in Toronto, Montreal and Vancouver, serving over 200 destinations on 5 continents with a fleet of over 370 aircraft. The Company is an original member of The Star Alliance, the world's most comprehensive airline partnership. Credit Strengths a) Competitive position: dominant domestic market share and growing high-margin transborder operations b) Cash flow expected to double by 2001, aided by CAI contribution and shift from domestic to transborder and international capacity c) Synergies to be extracted from CAI conservatively projected d) Workforce stability given recent settlements e) Relatively light fleet requirements f) New T2 hub at Toronto's Pearson airport to solidify stranglehold on Canadian market by 2003 Credit Risks a) One of the weakest balance sheets of all North American carriers b) Very high leverage, even by historical standards, exacerbated by the CAI merger and new accounting conventions c) Rising unit fuel and labour costs d) Potential pressure on transborder yields with entry of America West into Toronto and SouthWest Air into Buffalo, NY e) A quasi-monopolistic domestic market position resulting in more government scrutiny and the additional burden of allaying public opinion AMERICAN ECO: Taps Rabin Brothers as Auctioneers ------------------------------------------------ American Eco Holding Corp., et al. seeks court authority to retain Rabin Brothers Auctioneers as Auctioneer to the debtors. The debtors ask the Honorable Sue L. Robinson for authority to employ and retain Rabin Brothers Auctioneers in association with Capital Recovery Group as their auctioneer and sales consultant to sell certain assets of debtor Turner Group, Inc., which includes CA Turner Construction Company and Lake Charles Construction Company and authorization to sell certain assets at public auction including excess or obsolete furniture, equipment and vehicles no longer necessary to the operation of the debtors' businesses. The auctioneer has agreed to pay the debtors a guaranteed price of $260,000. The auctioneer will receive 10% of gross auction sales, and a 10% buyer's premium charged to each buyer of any asset. The auctioneer shall retain the first $35,000 above the guaranteed amount as reimbursement for its auction costs. AMERICAN METROCOMM: Creditors' Committee Names Professionals ------------------------------------------------------------ The Official Committee of Unsecured Creditors of American Metrocomm Corporation, et al. seeks court authority to retain Arthur Andersen LLP as financial advisors tot he Committee with the US Bankruptcy Court, Delaware. The firm will render the following professional services inter alia: -- Analyze and assist in developing and preparing business plans and financial projections; -- Assist the Committee is assessing strategic options; -- Analyze potential preference payments, fraudulent conveyances and other causes of action; -- Analyze and assist in the development and the negotiation of the plan of reorganization; -- Analyze the documents necessary for the confirmation of a plan in this proceeding, including the disclosure statement, liquidation analysis and business plan model; -- Advise and asset the Committee in reviewing plan provisions with a focus on maximizing potential credit recoveries; -- Render expert testimony, if necessary, on behalf of the Committee; -- Advise and assist on reorganization tax issues; -- Attend, when necessary, court hearings; -- Perform any other services that the Committee or their counsel deem necessary. The firm will charge its customary hourly rates, which range as follows: Partner/Principal $420-$600 Director/Manager $330-$490 Senior Associate $230-$310 Associate $170-$220 Analyst $120-$150 The Committee also seeks appointment of Young Conaway Stargatt & Taylor, LLP as counsel to the Committee effective August 30, 2000. The firm will provide legal advice to the Committee with respect to its powers and duties, and will assist the Committee in evaluating the various pleadings, investigating the conduct of the debtor, and assisting the committee in evaluating any plan of reorganization. The firm will appear in court on behalf of the committee. The firm will charge its customary hourly rates for its services. They range from $250 per hour to $315 per hour. AMERISERVE FOOD: Outlines Road to Confirmation by Late November --------------------------------------------------------------- AmeriServe Food Distribution, Inc. announces that the United States Bankruptcy Court in Wilmington, Del., has approved an extension of the maturity date of the DIP financing facility to and including October 30, 2000. The court also authorized further DIP financing extensions past October 30, 2000, that are agreed to in the future by AmeriServe and its DIP lenders. In addition, the Bankruptcy Court approved the bidding procedures and protections in connection with the sale to McLane Company. The Court has set the following initial schedule for the Plan of Reorganization filed by AmeriServe in connection with the sale to McLane Company: October 16, 2000 -- Hearing to Approve Plan of Reorganization Disclosure Statement and Solicitation Procedures October 26, 2000 -- Auction Date (if other bidders for AmeriServe) November 17, 2000 -- Hearing to Approve Assumption/Assignment/ Rejection of Executory Contracts and Leases November 28, 2000 -- Hearing to Approve Plan of Reorganization Confirmation Hearing to Approve Sale to McLane (or higher and better bidder) Hearing to Resolve Administrative Claims 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. AMERISERVE: Chicago & Mexican Assets Fetch $17,500,000 for Estate ----------------------------------------------------------------- AmeriServe Food Distribution, Inc. 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. AUTORESEARCH LABORATORIES: Case Summary and 20 Largest Unsecured Creditors -------------------------------------------------------------------------- Debtor: Autoresearch Laboratories, Incorporated 6735 S. Old Harlem Avenue Chicago, IL 60638 Type of Business: Commercial testing laboratory, mainly for automotive industry products. Chapter 11 Petition Date: October 10, 2000 Court: Northern District of Illinois - Eastern Division Bankruptcy Case No.: 00-29573 Judge: John D. Schwartz Debtor's Counsel: James P. Wognum, Esq. 122 S. Michigan Ave., Suite 1290 Chicago, IL 60603 (312) 427-5427 Total Assets: $ 4,016,011 Total Debts : $ 3,292,169 20 Largest Unsecured Creditors: ETMC Carnegie Mellon University Trade Debt-reference oil $ 141,359 Dana Corporation Trade Debt-axles $ 111,669 John Baudino Deferred Salary $ 92,084 Comed Utility Service $ 79,011 Mosbeck Industrial Equipment Trade Debt $ 61,423 F.J. Blatz Trade Debt-consultant $ 47,619 Castle Engineering Co. Trade Debt $ 37,312 Test Engineering, Inc. Trade Debt-test parts $ 33,538 Nicor Utility $ 31,899 Specified Fuels Trade Debt-test fuel $ 28,399 Amoco Oil Co. Trade Debt-test $ 26,230 Village of Bedford Park Utility $ 22,506 Merrill Lynch Employee Healthcare funding $ 22,220 Bearcat Leasing Corp. Equipment lessor $ 21,733 N.M.M.A. Trade Debt-test regist. $ 18,058 Amstein & Lehr Legal Services $ 15,255 Darns & Moore Trade Debt $ 13,990 Richard A. Sholts Trade Debt $ 13,800 McDermott, Will & Emery Legal services $ 13,776 Distinctive Business Products Equipment lessor $ 10,919 BOB AND JEAN'S: Case Summary and 19 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Bob and Jean's, Inc., D/B/A St. Croix Custom Cruises 3045 Hunter Drive Medina, Minnesota 55340 Type of Business: St. Croix Custom Cruises operates charted and public boat cruise services including food and liquor operations in Tampa, Florida and Prescott, Wisconsin. Chapter 11 Petition Date: October 6, 2000 Court: District of Minnesota Bankruptcy Case No.: 00-34084 Judge: Chief Judge Gregory F. Kishel Debtor's Counsel: Steven H. Silton, Esq. 821 Marquette Avenue Suite 901 Minneapolis MN 55402 (612) 359-6142 Total Assets: $1,629,614.37 Total Debts : $1,202,258.61 19 Largest Unsecured Creditors: MBNA Credit Card Purchases $ 19,133 Bank of America Credit Card Purchases $ 8,510 Universal Card Credit Card Purchases $ 8,452 Chase Credit Card Purchases $ 6,668 US West Dex $ 6,195 First Card Credit Card Purchases $ 6,104 Florida Dept. Rev/Sales Tax $ 5,843 Choice Credit Card Purchases $ 5,305 Visa Credit Card Purchases $ 4,850 Wisconsin Dept. of Revenue $ 4,000 MBNA Credit Card Purchases $ 3,963 Advanta Credit Card Purchases $ 3,672 GTE Advertising $ 3,259 A-1 Printers $ 3,000 Hubbard's Marina $ 2,224 AT&T Universal Card Credit Card Purchases $ 1,073 Island Oasis $ 1,055 Emily Sherry Wages $ 964 Florida Suncoast Tourism $ 900 BREED TECHNOLOGIES: Management Shake-Up Follows Filing of Chapter 11 Plan ------------------------------------------------------------------------- Breed Technologies, Inc., one of the world's largest automotive occupant restraint suppliers, intends to file an amended Plan of Reorganization in connection with its pending Chapter 11 bankruptcy proceeding, which provides for an internal restructuring of its business and a nearly one billion dollar reduction in the company's outstanding debt. The company also announced that John Riess, a member of Breed's Board of Directors and the former Chairman of the Board and Chief Executive Officer of Gates Rubber Company, has been named the company's Chief Executive Officer replacing Johnnie Cordell Breed. In commenting on the proposed plan Riess stated, "This filing is the beginning of the end of a long, extensive process to find a solution to Breed's financial difficulties." Breed had previously filed a proposed plan, which provided for either an internal restructuring or a sale to a third party. Riess noted that, "While Breed's Board of Directors considered a number of options, including the sale of the business to several interested third parties, it was ultimately determined that continuing as a `stand-alone' enterprise with substantially reduced debt is in the best interests of Breed, its customers, its creditors and its employees." The company did not comment further on the specifics of the Plan stating that the entire document will be available for review when it is filed with the United States Bankruptcy Court in Delaware within the next few days. The company further announced that its Vice Chairman, President and Chief Operating Officer, Charles J. Speranzella, Jr., will be leaving the company. The Board of Directors and Mr. Riess have requested that Mr. Speranzella remain with the company for a period of transition. "Chuck's experience and familiarity with Breed's business and its customers will be invaluable to making a smooth transition," said Mr. Riess, who added that no additional management changes are foreseen for the immediate future. The company expects that once the adequacy of the Disclosure Statement which accompanies the Plan of Reorganization is approved by the Bankruptcy Court, which is expected to take place in the mid-October, it will take approximately two months for the bankruptcy process to be completed. CAMBEX CORPORATION: Delivers Registration Statement for 50.3% of Shares ----------------------------------------------------------------------- Cambex Corporation has announced the sale, by certain of its securityholders, of shares of common stock that may constitute up to 50.3% of the company's issued and outstanding common stock as of August 31, 2000. The company will not receive any proceeds from the sale of the shares of common stock by the selling securityholders. However, it will receive the sale price of any common stock that it sells to Thumberland Limited under a common stock purchase agreement, or upon the exercise for cash of the warrants exercisable for shares of common stock held by other selling securityholders, including warrants it issued to Thumberland. Cambex will pay the costs of registering the shares, including legal fees. The selling securityholders may offer shares of the common stock on the OTC Bulletin Board in negotiated transactions or otherwise, or by a combination of these methods. The selling securityholders may sell the shares through broker-dealers who may receive compensation from the selling shareholders in the form of discounts or commissions. CELLNET DATA: Schlumberger Debates Ownership of BCN Royalty Payments -------------------------------------------------------------------- Cellnet Data Systems, Inc., et al., the surviving debtor under the amended and restated joint consolidated liquidating plan of reorganization of CellNet Data Systems, Inc. and its subsidiaries confirmed by the Bankruptcy Court, District of Delaware on August 16, 2000 replies to the "Response of Schlumberger to CellNet's Motion to Determine Ownership of BCN Royalties." According to the debtor, Schlumberger misstates the issues and mischaracterizes the operative documents that determine those issues. Schlumberger faults CellNet for purportedly trying "to create an ambiguity in the documents" when, in fact, Cell Net has squarely contended that the key document, a Letter of Amendment of March 24, is wholly unambiguous. Schlumberger states that its right to receive royalty payments is inextricably linked to the ownership of the technology and cannot be separated. CellNet states that the court should consider evidence outside of the four corners of the contracts between the parties. The debtor states that Schlumberger excluded the BCN Assets and Liabilities from the Asset Purchase Agreement, and it believed that it was escaping any obligation to license the technology it was buying to BCN. The Court disagreed, entering an order decreeing that the sale was not free and clear of BCN's rights, but rather BCN maintained its rights to use the technology even after the sale. On March 24, Schlumberger excluded the BCN Assets and liabilities from the purchase agreement. However, the debtor argues, Schlumberger didn't condition its relinquishment of the BCN royalties on a favorable ruling by the court and did not reclaim the royalties in subsequent amendments negotiated between the parties. Thus, the debtor concludes, the royalties remain with CellNet as contracted. The debtor further states that Schlumberger believed that the BCN joint venture was likely to prove unprofitable, and that Schlumberger walked away from the BCN Assets and Liabilities in part because it had relations with Bechtel, BCN's parent, in other arenas and that it did not want to harm those relations by ongoing disagreements with Bechtel over the joint venture. Finally, CellNet states that its representative s told Schlumberger that CellNet would endeavor to realize value for the BCN assets and liabilities, including the royalty rights, from Bechtel or others if Schlumberger excluded them from its purchase. CENTER MUTUAL: S&P Assigns BBpi Financial Strength Rating to Insurer -------------------------------------------------------------------- Standard & Poor's today assigned its double-'Bpi' financial strength rating to Center Mutual Insurance Co. (Center Mutual; NAIC: 34606). The rating reflects weak operating performance and limited capitalization. Partially offsetting factors include healthy premium growth in the last five years and good product-line diversification. -- The company, founded in Rugby, North Dakota in 1917, is licensed in three states and operates in North Dakota (81%) and South Dakota (19%). Writing through an independent agency system, Center Mutual's product lines consist of private passenger auto liability (33%), auto physical damage (30%), homeowners' multi-peril (15%), farmowners' multi-peril (11%), and allied (3%). Major Rating Factors: -- Operating performance, as measured by Standard & Poor's earnings adequacy model, is weak at year-end 1999. The company averaged a net income of $110,000 from 1995 through 1999. Return on revenue (excluding realized capital gains) averaged negative 1.64% over the same period. -- The combined ratio in 1999 was 107.1%, a slight increase from 106.9% in the prior year. Reserves were increased slightly over the past two years, but not enough to significantly affect these figures. -- Capitalization, although relatively strong for the current level of premium volume, is a limiting factor when the company's geographic diversification is considered. Changes in local-market regulation and large storms have the potential to severely affect the $5.1 million in surplus. -- Net premiums written have been relatively stable in the last three years, with only slight fluctuations from the current level of $9.3 million. Combined growth since 1995 is a healthy 22%. COSTILLA ENERGY: Advises Court & Creditors that Plan Took Effect on Oct. 1 -------------------------------------------------------------------------- The plan of reorganization of Costilla Energy, Inc. as restated to reflect all amendments and modifications dated September 15, 2000 was confirmed by the Honorable Ronald King by order dated and entered on September 15, 2000. The Effective Date of the plan is October 1, 2000. Debtor's counsel is Henry J. Kaim, Esq., at Sheinfeld Maley & Kay PC. DENBURY RESOURCES: Appoints 60% Shareholder as New Director ----------------------------------------------------------- On October 4, 2000, the Board of Directors of Denbury Resources Inc., elected Ms. Carrie Wheeler, age 29, of San Francisco, California to the Board of Directors to fill a vacancy created by the resignation of Mr. David Stanton with a term expiring at the next annual general meeting of the shareholders in May, 2001. Ms. Wheeler is a principal with the Texas Pacific Group which owns approximately 60% of the company's issued and outstanding common stock. FREDERICK'S OF HOLLYWOOD: Proposes $865,000 Key Employee Incentive Plan ----------------------------------------------------------------------- Frederick's of Hollywood, Inc. and its subsidiaries seek court authority to implement an employee incentive plan. A hearing will be held on October 26, 2000 at 10:00 AM, Courtroom 1568, Los Angeles, Calif. The debtors have identified 24 employees who are critical to their operations and reorganization. The key employees are highly qualified, have developed essential relationships with vendors, and bring unique expertise in the critical areas of merchandising, marketing, financial management and other key functional areas. The debtors state that they need to implement the Employee Incentive Plan to encourage their key employees to remain with the company, especially during the upcoming peak selling seasons. Under the Employee Incentive Plan each key employee is eligible to receive a stay bonus equal to between 10 and 50 percent of that employee's annual base salary. If all possible stay bonuses are paid, the total under the plan for current employees will total approximately $865,000. The employee incentive program will be funded pursuant to a plan of reorganization or sale. No stay bonuses will be paid if the debtors cannot successfully confirm a plan of reorganization or sell their assets. The debtors claim that without the employee incentive plan, many of the debtors' key employees will resign, thereby hampering the debtors' operations and the reorganization. GLOBALSTAR TELECOMMUNICATIONS: Partners Agree to Purchase Equity for $56MM -------------------------------------------------------------------------- Globalstar Telecommunications Limited entered into subscription agreements dated September 22, 2000 with five of its founding partners, Loral Space & Communications Ltd., Vodafone plc, Qualcomm Incorporated, Elsacom N.V. and TE.SA.M. (a France Telecom/Alcatel partnership), under which the partners agreed to purchase an aggregate of 5,246,208 shares of GTL common stock for $56.2 million. Of this amount, Loral, the managing general partner of Globalstar, L.P., agreed to purchase 1,120,187 shares for $12 million. The share purchases are based on a price of $10.7125 per share, the average of the high and low prices of GTL common stock for the ten trading days ending September 21, 2000. The transaction, which was subject to customary closing conditions, was expected to close by September 29, 2000. GTL will use the proceeds of the sale to purchase ordinary partnership interests in Globalstar, which, in turn, will use the proceeds for general corporate purposes including capital expenditures, operations (including marketing and distribution of phones and services) and interest expense. GTL has also completed the first take down of shares under its purchase agreement with Bear, Stearns International Limited dated September 18, 2000. On September 22, 2000, GTL sold 1,000,000 shares of common stock to Bear Stearns for $9,293,000. GOLDEN STAR: Appealing American Stock Exchange's Decision to Delist Shares -------------------------------------------------------------------------- Golden Star Resources Ltd. has filed an appeal against the American Stock Exchange's intention to remove the company's shares from listing on the Exchange. The appeal process is expected to take some time and during this period the company's shares will continue to be listed and traded on the Exchange. Trading on the Toronto Stock Exchange should not be affected by the determination made by the American Stock Exchange. Golden Star will also utilize the appeal period to review the alternatives available to the company in the event that the appeal is unsuccessful and an alternative listing forum in the United States is required. The decision of the Exchange to de-list the company's shares is in strict compliance with the Exchange's guidelines and is based on several factors including Golden Star's greater than five year history of negative earnings and the low price at which the company's shares are currently trading. Golden Star's appeal of the Exchange's decision will focus on the negative impact that recent low gold prices have had on these tests and the positive impact that continuing operations at Bogoso coupled with the impact of the planned acquisition of the Prestea gold concession may have on the company's earnings and share price. GRAEME LIMITED: Court Approves Disclosure Statement for One-Penny Plan ---------------------------------------------------------------------- After a hearing on September 19, 2000, the court entered an order approving the Disclosure statement of the First Amended Plan of Liquidation of the Official Committee of Unsecured Creditors for Semi-Tech Group , of the Official Committee of Unsecured creditors of Graeme Limited, Semi-Tech Corporation and ISTM Investments (Barbados) Inc. The Confirmation Hearing shall commence on November 9, 2000 at 10:00 AM, before the Honorable Burton R. Lifland, US Bankruptcy Court, Southern District of New York. Attorneys for the Official Committee of Unsecured Creditors for the Semi- Tech Group debtors are Milbank, Tweed, Hadley & McCloy LLP. The plan sets forth how claims against and equity interests in the Semi- Tech Group will be treated following the liquidation of the assets under Chapter 11. The plan is premised upon effecting a liquidation of the assets of the Semi-Tech Group. The plan provides that holders of Allowed Class 3 Unsecured Claims will receive a pro rata Distribution of the Available Cash, which is currently projected to be at least $6 million and which, at a minimum must be at least $4 million. The debtor estimates and aggregate amount of $584,000,000 in unsecured claims. The amount each claimant will receive is dependent on the success of causes of actions against third parties. In addition the plan provides for the establishment of a litigation limited liability company into which the debtors' and their estates will contribute all of their causes of actions. HASBRO, INC.: Moody's Lowers Long & Short Term Rating To Baa1 & Prime-2 --------------------------------------------------------------------- Moody's lowered the long-term and short-term ratings of Hasbro Inc. to Baa1 and Prime-2 from A2 and Prime-1, respectively. The outlook is negative. This concludes a review that was initiated on August 3, 2000. The downgrade followed the company's announcement that second half results will be below expectations and that restructuring charges will be necessary to lower costs in the business. Results are being negatively affected by soft U.S. sales of Pokemon toys and Star Wars products, a shortage of electronic components needed for certain of its products, and losses at its interactive unit. The negative outlook reflects the uncertainties surrounding the company's final restructuring plans and the resolution of losses in its interactive businesses. In addition, Moody's has concerns that a generally soft retail environment could affect toys sales during the holiday season. Moody's said that the company's ratios for the year 2000 will be weak for the current rating level. Therefore, further ratings pressure could result either from any additional negative news this year, or failure to show improvement in results and financial strength in 2001. The following ratings were downgraded: a) Senior Unsecured debt rating to Baa1 from A2 b) Prospective rating for subordinated debt to (P)Baa2 from (P)A3 c) Rating of the company for short-term debt to Prime-2 from Prime-1 Moody's pointed out that the company's risk profile was raised when management decided earlier this year to adopt a more aggressive financial posture through the acceleration of share repurchases in a debt-financed Modified Dutch Auction Tender Offer. Leverage has risen in recent years due to a number of acquisitions. At the same time, the company had become increasingly dependent on more volatile sources of revenue, including products related to the success of various hit movies. Furthermore, softness for certain products at retail and problems with sourcing chips are contributing to the pressure on this year's result, which is heavily weighted to the second half. In Moody's view, the toy industry has experienced a fundamental shift in the predictability of earnings due to changing play patterns, the increasing appeal of interactive toys, and the greater correlation of certain sales with the less certain success of movies, books and other entertainment industry ventures. Hasbro's restructuring plan will reduce the cost base and attempt to focus on more core products that have longer and more consistent life-cycles. Moody's noted Hasbro's diversified portfolio of toy, game and lifestyle products with leading global market positions. At the same time, the company faces the challenge of responding to rapidly changing play patterns and a resulting shift away from traditional toys. Hasbro has made good progress in developing an array of interactive products, including those that leverage its leading positions in games, but while it has good content, its execution of an interactive strategy has not been successful. The evolution of the industry into technology and entertainment-oriented products also changes the scope of competition and the company's business risk profile. Hasbro's business is seasonal, with the greatest sales and cash collections occurring in the second half of the calendar year. Because the company has several very large customers, there is also a high degree of concentration risk, some of it with retailers who have recently faced significant challenges. Although the company halted ongoing share repurchases after its August earnings warning, its retained cash flow for the year will be significantly impaired by lower earnings and earlier share buybacks. Hasbro, Inc. headquartered in Pawtucket, Rhode Island, is a worldwide leader in children's and family leisure time and entertainment products and services, including the design, manufacture and marketing of games and toys ranging from traditional to high-tech. HMKR, INC.: Court Fixes October 27 as Deadline for Filing Proofs of Claim ------------------------------------------------------------------------- On October 2, 1999, HMKR, Inc., f/k/a Homemaker Industries, Inc. filed a voluntary petition for relief under Chapter 11 of title 11 of the US Code with the US Bankruptcy Court, Southern District of New York. By order of the court, October 27, 2000 is set as the Bar Date, the last date by which all entities who hold claims against the debtor which arose prior to the Filing Date are permitted to file proofs of claim or interest (with certain defined exceptions). The debtors are represented by Alec P. Ostrow and Walter Benzija of Salomon Green & Ostrow, PC. Counsel to the Creditors' Committee is Alan Halperin and Christopher Battaglia of Halperin & Associates. IGI, INC.: Completes Sale of Poultry Vaccine Business for $14,800,000 --------------------------------------------------------------------- On September 15, 2000, the IGI, Inc. consummated the sale of the assets associated with its Poultry Vaccine Business to Lohmann Animal Health International, a Georgia general partnership. The Vineland Sale was effected pursuant to an Asset Purchase Agreement dated June 19, 2000 between the two companies. The buyer, formerly known as "Vineland International," is a general partnership, the general partners of which are Avian Health GmbH, a German limited liability company with principal offices in Visbek-Recterfeld, Germany, and Vineland Laboratories Inc., a Delaware corporation, which is a wholly-owned subsidiary of Avian Health GmbH. Avian Health GmbH is an affiliate of Lohmann & Co. AG, a German company with principal offices in Cuxhaven, Germany. Avian Health GmbH and the other companies that are part of the Lohmann Group are generally engaged in the production of avian vaccines and in other avian and animal businesses. In exchange for receipt of the Poultry Assets, Lohmann Animal Health assumed liabilities of the Poultry Business in the aggregate equal to $2,300,000 and paid the company cash in the amount of $12,500,000. A portion of the cash purchase price equal to $500,000 was paid directly into an escrow fund maintained by Key Trust Company, N.A., under an Escrow Agreement dated September 15, 2000 between the company, the buyer and the escrow agent, to secure potential liability for any downward adjustments to the purchase price under the Vineland Agreement as a result of a decrease in the net working capital of the Poultry Business between March 31, 2000 and September 15, 2000, the date of the consummation of the Vineland Sale and indemnification obligations of the company. IGI, INC.: Discloses Director & Officer Changes ----------------------------------------------- On September 12, 2000, IGI's Board of Directors elected Earl R. Lewis to fill the vacancy on the Board as a result of the resignation of Paul D. Paganucci. Mr. Lewis currently is the President and Chief Executive Officer of Thermo Instrument Systems, Inc. Also, on September 12, 2000, the company's Board of Directors appointed Robert E. McDaniel as its interim Chief Executive Officer. Mr. McDaniel joined the company in 1998 as Vice President and General Counsel and was promoted to the position of Executive Vice President in 1999. Prior to joining IGI, Mr. McDaniel was General Counsel of Presstek, Inc. He had previously been in private practice as an office and an officer and shareholder at the law firm of Devine, Millimet & Branch, P.A., where Mr. McDaniel represented public companies, institutions and individuals. Before going into private law practice, Mr. McDaniel served as an attorney at the U.S. Department of Justice in the United States Attorney's Office for the District of Columbia. Earlier, on September 5, 2000, IGI announced that it appointed John Ambrose as President and Chief Operating Officer of the company. Mr. Ambrose is a 35-year veteran of the pharmaceutical and healthcare industries who began his career with Eli Lily and has held positions at Upjohn, Medserv and Fresenius Medical Care. Mr. Ambrose's most recent position was Vice President of Sales and Marketing at Digitrace Care Services of Boston, Massachusetts. Mr. Ambrose succeeds Paul Woitach who resigned. On July 13, 2000, IGI announced that it appointed Domenic N. Golato as Senior Vice President and Chief Financial Officer of the company. Mr. Golato was formerly the Vice President and Chief Financial Officer of IVC, Inc., a publicly traded manufacturer of vitamins and nutritional products. Prior to that he was the Vice President and Chief Financial Officer of RF Power Products, Inc., a publicly traded manufacturer in the semi-conductor and flat panel industries. Mr. Golato succeeds Manfred Hanuschek, who resigned for personal and family reasons. Effective September 15, 2000, Mr. Golato also assumed the positions of Treasurer and Chief Accounting Officer. Mr. Golato succeeds Charles Carroll in these positions. Mr. Carroll resigned for personal and family reasons. In addition, on September 5, 2000, the company announced that it had shifted the responsibilities of two Senior Vice Presidents, promoting James Wehrmeyer to the position of President, IGI Petcare division and Rajiv Mathur to the position of President, IGI Consumer Products and Cosmetics division. KAISER GROUP: Subsidiary Announces Exchange Offer Extended to Oct. 27, 2000 --------------------------------------------------------------------------- Kaiser Government Programs, Inc., a subsidiary of Kaiser Group International, Inc. (OTC Bulletin Board: KSRG), announced that it has extended to 5:00 p.m. eastern time on Friday, October 27, 2000 the expiration date of its exchange offer of guarantee rights for put rights relating to Kaiser Group International, Inc.'s $125 million, 12% Senior Subordinated Notes due 2003. LAIDLAW, INC.: Extends Solicitation Deadline to 5:00 p.m. Tomorrow ------------------------------------------------------------------ Laidlaw Inc. (NYSE: LDW; TSE: LDM) says that it is further extending the expiration date of the consent solicitations relating to its debentures and notes, previously scheduled to expire on Friday, October 13, 2000, to 5:00 p.m., New York City time, Wednesday, October 18, 2000. Laidlaw has also announced that definitive documentation for the secured financing facilities for certain of its subsidiaries, and the subrogation agreement between Laidlaw and certain financial institutions is expected to be available by the end of the day Monday, October 16, 2000 in the Investor Information section on the company's website at http://www.laidlaw.com. If approved by the bondholders, the financing arrangements would provide the following: - A revolving line of credit in an amount up to $150 million with a letter of credit sub-facility in an amount up to $50 million from a group of financial institutions led by Canadian Imperial Bank of Commerce. - A revolving line of credit in an amount up to $125 million with a letter of credit sub-facility in an amount up to $25 million for Greyhound Lines, Inc. from Foothill Capital Corporation. Stephen Cooper, Laidlaw's vice chairman and chief restructuring officer indicated, "The consent solicitation process has resulted in a very positive response from the bondholders. As required by the solicitation, we are extending the expiration date to provide the bondholders access to the financing documents for at least 48 hours. Bondholders who have not yet submitted their consent materials are encouraged to do so. In particular, holders of debentures under the 1991 indenture, which were originally issued by Scott's Hospitality Inc., should submit their materials immediately," added Mr. Cooper. Laidlaw is soliciting consents from its bondholders to waive compliance with certain provisions of the indentures relating to the incurrence of secured indebtedness, thus allowing these financing facilities to be put in place. The terms and conditions of the consent solicitations and the financing facilities are set forth in the definitive documentation available on the Laidlaw Web site and are described in the consent solicitation statements and related documents. The consent solicitation statements, dated September 18, 2000, have been previously delivered to Laidlaw's bondholders. Identified below are the securities and their related CUSIP numbers to which the consent solicitations relate. Security CUSIP -------- ----- (x) 10.95% Debentures, Series A Due 2001 810197-AA-1 (x) 8.50% Debentures, Series B Due 2002 810197-AB-9 7.70% Debentures Due 2002 50730K-AA-5 7.05% Debentures Due 2003 50730K-AB-3 7.875% Debentures Due 2005 50730K-AG-2 8.25% Debentures Due 2023 50730K-AD-9 8.75% Debentures Due 2025 50730K-AH-0 5.75% Exchangeable Notes Due 2000 of Laidlaw One, Inc. 507307-10-6 6.65% Debentures Due 2004 50730K-AK-3 6.50% Debentures Due 2005 50730K-AM-9 7.65% Debentures Due 2006 50730K-AP-2 6.70% Debentures Due 2008 50730K-AN-7 6.72% Debentures Due 2027 50730K-AL-1 (x) Issued as Scott's Hospitality Inc. Laidlaw Inc. is a holding company for North America's largest providers of school and intercity bus transportation, municipal transit, patient transportation and emergency department management services. LANGSTON CORPORATION: Employs Berwind Financial as Investment Banker -------------------------------------------------------------------- The Langston Corporation seeks court authority (District of Delaware) to employ Berwind Financial, LP to serve as the investment banker for the debtor. The professional services that Berwind will render to the debtor shall include, but not be limited to, the following: a) Providing investment banking services with regard to any potential transactions involving the debtor, whether by way of a recapitalization, merger, consolidation, negotiated purchase or otherwise; b) Locating a purchaser of the debtor's assets or stock; c) Negotiating the terms of a sale of the debtor's assets or stock - from the letter of intent tot he definitive purchase agreement; d) Attempting to arrange the financing required for the restructuring and recapitalization of the debtor; e) Assisting the debtor's other professionals in consummating a transaction; and f) Performing all other investment banking services for the debtor which may be necessary and proper. Compensation will be payable to Berwind as follows: An initial fee of $10,00, a monthly fee of $5,000 beginning on October, 2000, plus reimbursement of expenses. LIVENT, INC.: Confirmation Hearing on 3rd Amended Plan Set for Nov. 15 ---------------------------------------------------------------------- The US bankruptcy Court for the Southern District of New York entered an order dated September 29, 2000 approving the amended Disclosure statement for the Third Amended Joint Plan of Reorganization with respect to Livent (US) Inc., et al. other than Livent Inc. A hearing will be held before the Honorable Arthur J. Gonzalez, US Bankruptcy Judge, at the US Bankruptcy Court, Alexander Hamilton US Custom House, One Bowling Green, New York on November 15, 2000 at 2:OO PM. LUMBER INSURANCE: A.M. Best Downgrades Financial Strength Rating To B --------------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength ratings of the Lumber Insurance Companies, Framingham, MA, to B (Fair) from B++ (Very Good). The downgrade reflects the group's weakened capitalization driven by deteriorating operating performance. Since 1997, the group's operating results have been plagued by substantial underwriting losses due to continued price competition, severe weather related losses, adverse loss reserve development from prior accident years' and operational inefficiencies. Reserve strengthening over the past several years in the general liability, workers' compensation and automobile liability lines added to the group's poor underwriting results. In an effort to improve operating results, management sold the renewal rights on two of its worst performing operations, Midwest lumber and franchised automobile business, effective July 1, 2000. However, because of significant underpricing, reserves for both books of business have continued to develop adversely through the first three quarters of 2000. As a result, the group's surplus declined from $97 million in 1997 to $40 million as of September 30, 2000. Management has implemented a number of initiatives designed to enhance capital. These initiatives include withdrawing from unprofitable businesses and markets, implementing double digit rate increases on its core lines of business, and tightening underwriting standards. Also, management has been successful in improving operating efficiencies and reducing overall expenses through consolidating and streamlining billing, underwriting and claims processes and reducing headcount. However, the group will not realize the full benefits of its rate increases and expense savings until 2001. In an effort to stabilize its balance sheet, management is in the process of negotiating various reinsurance agreements ranging from loss portfolio transfers to increased utilization of quota share reinsurance for 2000 and beyond. These actions should reduce the strain in the intermediate term on the group's capital position. However, a failure to execute these plans, or a continuation of poor operating performance, may result in further downward ratings adjustments. NATIONAL BOSTON MEDICAL: Claims Bar Date Set at November 20, 2000 ----------------------------------------------------------------- The US Bankruptcy Court for the District of Massachusetts established November 20, 2000 at 12:00 noon as the last day for filing proofs of claim against National Boston Medical, Inc., a Nevada corporation, National Boston Medical, Inc., a Delaware Corporation and Bontempi Instruments Plus, Inc. for any and all claims incurred before August 21, 2000. ORIX CREDIT: Fitch Affirms BBB+ & F2 Long And Short Term Debt Ratings --------------------------------------------------------------------- ORIX Credit Alliance, Inc.'s (Credit Alliance) long- and short-term debt ratings are affirmed at 'BBB+' and 'F2', respectively, by Fitch. The long- term Outlook has been revised from Stable to Negative. Credit Alliance's ratings reflect the company's good risk-adjusted capitalization, appropriate funding strategy, and long operating history with consistent performance. Additionally, the ratings consider the covenant protection provided by the company's bank facilities and private placement loan agreements. Rating concerns center on Credit Alliance's weakening asset quality and profitability measures, its size relative to key competitors, the heightened competitive environment in the commercial finance industry, and exposure to economically cyclical industries. Approximately $2.1 billion of securities are affected by this rating action. Credit Alliance announced today that it has changed its name to ORIX Financial Services, Inc. (OFS). OFS will serve as holding company to its three business groups: Equipment Finance, Business Credit, and the newly formed Structured Finance group. Historical underpinnings of the Credit Alliance ratings have been the company's conservative management, steady operating performance, and well- defined business model. However, in recent years, these strengths have been challenged by the increasingly competitive landscape within the commercial finance industry, resulting in weakening asset quality and reduced profitability. In an effort to regain operating momentum and improve its competitive position within the industry, Credit Alliance has made several significant changes over the past 18 months. During this period, the company consolidated its distribution network, re-assessed its commitment to several industries and businesses, and appointed a new chief executive officer. Credit Alliance will focus on diversifying the business as well as improving the company's market position in its core market over the near- term. As part of this strategy, the company will strive to diversify its receivable base by investing in additional equipment types/industries; develop a structured finance business that will focus on larger transactions; establish a syndication capability; extend its asset management expertise; and emphasize higher margin direct originations. Nevertheless, continued weakness in asset quality and profitability measures coupled with execution risk related to the company's aforementioned near-term strategic objectives has caused Credit Alliance's Rating Outlook to be revised from Stable to Negative. In recent years, Credit Alliance's asset quality measures have steadily weakened due to recessions in several of the cyclical industries it finances as well as a problem small-ticket leasing portfolio purchased from Bankvest Capital Corp. Credit quality was also negatively impacted by the company's 1999 branch consolidation, which required significant management attention. Annualized net chargeoffs remain manageable and represented 0.59% of average owned net receivables for the quarter ended June 30, 2000. However, non-performing receivables, defined as non-accruing receivables plus repossessed assets, as a percentage of owned net receivables stood at 4.19% at June 30, 2000, its highest level in five years. While management is focused on reducing non-performing assets, and has intensified its efforts with respect to managing repossessed inventory, Fitch believes it will take some time for problem receivables to work their way through the portfolio and likely result in somewhat higher chargeoffs over the near- term. Additionally, given Credit Alliance's middle-market customer orientation and historical experience, Fitch believes the company's asset quality measures would likely decline further under a more stressful economic environment. From an operating perspective, Credit Alliance continues to report modest results, particularly relative to many of its competitors. Net income totaled $34.1 million for the fiscal year ended March 31, 2000, an 11.9% decline compared to fiscal 1999's results. Profitability, measured as return on average managed assets, declined for the fourth consecutive year and totaled 1.06% in fiscal 2000. Driving the company's operating results were continued margin compression driven by heightened competitive pressures and rising funding costs; increased credit costs; and additional restructuring charges associated with the fiscal 1999 branch network consolidation. While the company maintains a solid long-term operating record, Fitch believes Credit Alliance will be challenged to reverse profitability trends in a meaningful manner over the near-term as heightened industry competition continues to constrict both receivable growth and margins in its core business. Credit Alliance remains well capitalized on a risk-adjusted basis. Nevertheless, in recent years, the company's receivable growth has outpaced internal capital formation, causing leverage to steadily rise. At June 30, 2000, leverage, defined as total debt divided by equity, stood at approximately 5.94 times (x), a level Fitch views as acceptable for the assigned rating category. Established in 1963 and headquartered in Secaucus, New Jersey, Credit Alliance is a commercial finance company focused on providing equipment financing and leasing, asset-based lending, structured financing and insurance for middle market companies in the U.S. and Canada. OUTBOARD MARINE: Moody's Junks Ratings on Unsecured Note Issues --------------------------------------------------------------- Moody's Investors Service lowered the following debt and corporate ratings of Outboard Marine Corporation: a) $160 million 10.75% Guaranteed (by four of its operating subs.) Senior Unsecured Notes, due 2008, to Caa1 from B3; b) $65.2 million 9.125% Senior Unsecured Sinking Fund Debentures, due 2017, to Caa1 from B3; c) $5 million Medium Term Notes, due 2001, to Caa1 from B3; d) $150 million Senior Secured Revolving Credit Facility, as amended, due 12/31/01, Tranche A to B2 from B1 and Tranche B to B3 e) Outboard Marine's senior implied rating was also lowered to B3 from B2 and f) the unsecured issuer rating was lowered to Caa2 from Caa1. In addition, the ratings outlook has been changed to negative. The lower ratings address concern for the company's ability to continue to finance its working capital needs and operations and reflect Outboard's continued high leverage and insufficient debt coverage due to its weak operating performance. The B2 rating on Tranche A of the amended bank facility reflects the benefits of the collateral package which include a priority security interest in all of the assets of Outboard and the guarantees of four operating subsidiaries. The B3 rating on the sponsor funded Tranche B reflects its security interest in the same collateral package, but its priority is subordinated to that of the other lenders. The Caa1 ratings on the unsecured obligations reflect their effective subordination to the secured credit facility. However, the ratings also reflect the significant equity contributions ($105 million in preferred stock and warrants) subordinated debt ($15 million) and the recent $45 million in revolving credit support made by Quantum Industrial Partners LDC, an investment affiliate of Soros Fund Management, over the last 12 months (this is in addition to the initial investment of $277 million made in 1997); the continued strong market for the company's boat products and its well recognized brand names. The negative outlook reflects the risk that Outboard may not be able to regain its lost share of the engine market, resulting from its manufacturing and vendor problems; the risk that a downturn in the economy could further depress sales; the risk that the company will not be able to get its product to the dealers for a third selling season and the possibility that its modest liquidity may hinder its ability to build inventory into fiscal 2001. Total revenues for the six months ended June 30, 2000 showed a minimal decline to $566 million. Boat sales (48% of total sales) increased 14% from the same period in 1999, while engine sales (52% of the total) dropped 11%. The company reports that new boat designs have resulted in improved sales and maintained operating margins of approximately 2%. Engine sales experienced a 4% market share decline (32% to 28%) due to manufacturing problems stemming from the FY 1999 FICHT engine start-up problems and the FY 2000 supplier issues. As reported by the company, its strategy to outsource the manufacturing of certain engine parts in an attempt to reduce costs, resulted in major production delays in the early part of 2000, excess costs and lost sales of 14,000 units. For the six months ended June 30, 2000 Outboard's gross profit margin was 16% versus 22% in 1999 and the reported operating loss was $35.8 million versus an operating profit of $37.1 million in the prior year. During the first six months of 2000, Outboard needed to rely on $100 million in additional sponsor contributions to support negative operating performance (EBITDA of a negative $8.8 million), interest expense of $17.9 million, net CAPEX of $12.5 million and short term working capital needs of $33.7 million. The $85 million in equity infusions in the form of warrants and preferred stock, along with a $15 million subordinated loan and a $20 million preferred stock purchase in July 2000, have allowed the company to meet its financial obligations to date. The additional sponsor support in the form of $45 million in revolving credit availability is expected to provide Outboard with some liquidity relief. However, debt coverage is expected to remain negative for the next several quarters, putting further pressure on the company's liquidity and its ability to meet financial covenants in fiscal 2001. The restricted cash on hand, which is required under the 10.75% Senior Unsecured Note Indenture to fund one year's interest on these notes and all senior debt, was $22.7 million as of September 30, 2000. This reserve account is available to Outboard for interest payments, if on quarterly basis excess cash (as defined under the indenture) is less than the required senior interest expense for the up coming quarter. The company has made its required sinking fund payments under the 9.125% Senior Unsecured Debentures through April 2004. Outboard has experienced turnover in the senior management team put in place at the time of the 1997 purchase and recently hired a new President/CEO/COO to focus on the supplier and manufacturing problems. However, without improvements in the manufacturing process, reductions in the added costs and a return to historical engine sales volume, it is likely the company could continue to show losses and negative cashflow into fiscal 2001. In addition, the company will need to have sufficient liquidity available during the first quarter of fiscal 2001, when it needs to build inventory for the second and third quarter peak selling seasons. The company's $150 million revolving line of credit was recently amended via the Tenth Amendment (signed 10/10/2000), which eliminates certain financial covenants through December 2000 and should allow the company to more regularly have availability of the full $150 million. The credit facility has now been structured with a $105 million Tranche A, supported by a borrowing base and funded by the existing lenders; and a $45 million Tranche B to be funded with additional support from the sponsor, Quantum. Tranche B shares in the security interest in all assets of Outboard and the subsidiary guarantees, but pursuant to an agreement between Quantum and the lenders, its collateral position is subordinated to that of the Tranche A lenders. Current outstandings under the credit facility are $97.5 million, consisting of $51.4 million in loans and $46.1 million in letters of credit. The additional $45 million provided by Quantum brings the total amount of support provided to Outboard in fiscal 2000 to $165 million. The company has reported that affiliates of the sponsor and Soros Fund Management may give consideration to purchasing its 10 3/4% and 9 1/8% senior notes if the price is deemed advantageous. Outboard has also mentioned it may need to review strategic alternatives or asset sales to meet its financing requirements. Based in Waukegan, Illinois, Outboard Marine Corporation is a leading manufacturer and marketer of marine engines, boats and accessories under the brand names of Johnson, Evinrude, Chris-Craft, Four Winns, Stratos, Lowe and Princecraft. PACER TECHNOLOGY: Shareholders Will Convene for Annual Meeting on Nov. 21 ------------------------------------------------------------------------- The annual meeting of shareholders of Pacer Technology will be held at the Hilton Hotel, Ontario Airport, 700 North Haven Avenue, Ontario, California, at 9:00 A.M. Pacific Time, on Tuesday, November 21, 2000, for the following purposes: 1. To elect the following nominees to serve as directors of the company for a term of one year or until their successors are elected and qualify: Ellis T. Gravette Jr., Carl E. Hathaway, John G. Hockin II, W. T. Nightingale, III, and Larry K. Reynolds. 2. To approve an Amendment of the Articles of Incorporation to effectuate one of the following alternative reverse stock splits of Pacer's outstanding shares: (i) a 1-for-3 reverse stock split; (ii) a 1-for-4 reverse stock split; or (iii) a 1-for-5 reverse stock split, with the Board of Directors having the authority to determine which of these reverse stock splits to effectuate. All shareholders of record as of the close of business on September 25, 2000 will be entitled to notice of and to vote at the annual meeting. PRECISION AUTO: Announces Completion of Refinancing and Year-End Results ------------------------------------------------------------------------ Precision Auto Care, Inc. (Nasdaq: PACI) announced for the fiscal year ending June 30, 2000, a loss of $18.4 million, or $2.96 per share, compared with a loss of $21.0 million, or $3.43 per share, for the prior year. For the quarter ending June 30, 2000, the Company incurred a loss of $14.2 million, or $2.26 per share, compared to a loss of $10.1 million, or $1.64 per share for comparable quarter in 1999. Included in this loss are special charges of $7.0 million for impairment of goodwill and $4.0 million related to the sale of certain assets. The Company's CEO, Louis M. Brown Jr. stated "the prior fiscal year was significantly impacted by write-offs associated with the Company's sales of businesses. These actions coupled with the restructuring efforts currently underway are designed to position the Company to focus on its core auto care and franchising businesses and improve operating results." Brown also stated "the Company has been successful in completing a refinancing of its Senior Debt and negotiated extensions of its board debt totaling $5.5 million for 12 months. The refinancing and extensions will enable the Company to pursue its restructuring and profit improvement objectives." Although the Company has refinanced its Senior Debt and negotiated extensions of other debt, in the event that the Company is unable to accomplish its strategic objectives or is otherwise unable to generate revenues sufficient to cover operating expenses, the Company would not be able to sustain operations at the current level. This would require the Company to further reduce expenses and liquidate certain assets. Precision Auto Care, Inc. is the world's largest franchisor of auto care centers, with 564 operating centers as of October 12, 1999. The Company franchises and operates Precision Tune Auto Care, Precision Auto Wash, and Precision Lube Express centers around the world, and offers a vertically integrated organization with manufacturing and distribution subsidiaries. PSA, INC.: Selects Finley, Colmer and Company as Financial Advisor ------------------------------------------------------------------ PSA Inc., ETS Payphones, Inc. and ETS Vending, Inc. seek court authority to employ Finley, Colmer and Company as financial advisor to the debtors and their affiliates. Finley will render the following services to the debtors: -- Advise and assist the debtors' management in organizing resources and activities in order to manage the Chapter 11 case, with a goal of developing a confirmable plan of reorganization. -- Advise and assist the debtors' management, as necessary, in connection with the preparation of certain required financial information, including reports required to be filed with the US Trustee, operating reports, business plans, and other financial analysis relating to the debtors' financial and business operations; -- Advise and assist the debtors' management in financial and related matters respecting negotiations on matters related to confirmation of a plan of reorganization and any proposed DIP or exit financing; -- Assist in the development of detailed business and cash flow plans and models to be used in an overall restructuring of the debtors' balance sheet; -- Evaluate the debtors' plans for overhead reductions and assist in developing supplemental expense reduction or cash conservation programs as deemed necessary; -- Render expert testimony and litigation support services, as requested, regarding the feasibility of a plan of reorganization and other matters, as requested by the debtors' ;management or counsel; -- Advise and assist the debtors in assessing the value of various assets, business units and security interests; -- Advise and assist the debtors in the sale of any assets and/or business units. The firm is seeking approval of a $100,00 retainer. Thereafter, the firm will bill according to current hourly rates of advisors expected to be most active in the case: Marcus A. Watson $325 Peter Colmer $325 Jim Jennings $150 Jim Sullivan $150 David Haddon $110 RIVER'S EDGE: Case Summary --------------------------- Debtor: River's Edge Development, L.L.C. 6157 North Northwest Highway Chicago, IL 60631 Chapter 11 Petition Date: October 12, 2000 Court: Northern District of Illinois Bankruptcy Case No.: 00-30021 Judge: Robert E. Ginsberg Debtor's Counsel: Jeffrey K. Gutman, Esq. Heldrich, Gutman & Associates 401B N. Lincoln Avenue Chicago, IL 60618 (773) 472-4500 Total Assets: $ 2,484,250 Total Debts : $ 97,829 RIVERWOOD INTERNATIONAL: Sells Latin American Subsidiary to Pay Down Debts -------------------------------------------------------------------------- On October 3, 2000, Riverwood International Corporation, along with its joint venture partner, Cia Suzano de Papel e Celulose, completed the sale of the jointly-held subsidiary Igaras Papeis e Embalagens S.A. to Klabin Argentina S.A., a subsidiary of Industrias Klabin de Papei e Celulose S.A., for $510 million, including the assumption of $112 million of debt. In connection with this transaction, the company entered into an amendment dated September 12, 2000, effective October 3, 2000, to its credit agreement dated March 20, 1996. Under the amendment, the company applied $120 million and $25 million of the sale proceeds to its 2001 and 2002 term loan maturities, respectively; and applied the remaining portion of the proceeds ($48 million) to the company's revolving credit facility. In addition, certain of the financial covenants included in the credit agreement were amended. SCOUR, INC.: Web Host Faces $250 Billion of Video Pirating Claims ------------------------------------------------------------------ Internet entertainment concern Scour, Inc., Reuters reports, which filed for Chapter 11 in Central District of California listing $4 million of debt, could face a whopping $250 billion of liability from pending litigation. Company spokesman for Scour, Inc., Dawn Rusalov said, that the company listed only $1.2 million in assets. Scour uses its Web site for consumers who wants to swap video and audio files online. The companies that are included in the lawsuit are worried that the company includes pirated copies of the videos they offer. Scour recently laid off 12 of its 70 employees. SHOWSCAN ENTERTAINMENT: Seeks To Extend Lease Decision Period to January 12 --------------------------------------------------------------------------- The debtor, Showscan Entertainment, Inc. has filed a motion seeking a court order extending the time to assume or reject unexpired leases of non-residential real property to January 12, 2001. This is the debtor's first request for an extension of the Section 365(d)(4) deadline. The debtor is represented by Ian S. Landsberg of the firm Liner Yankelevitz Sunshine & Regenstreif LLP. The debtor is party to four unexpired leases consisting of an office and commercial building and two storage facilities. The debtor is a provider of movie-based motion simulation attractions. That is, the attractions combine a short action film with multi-channel sound systems and synchronized seat movement to create the perception of an immersive entertainment experience. The debtors state that it is premature to determine the assumption or rejection of its leases. SMALLWORLDWIDE PLC: 98% of Shareholders Tender Shares to GE Power Systems ------------------------------------------------------------------------- General Electric Company reports that the initial offer period of its tender offer (being made by its wholly owned subsidiary, GE Power Systems Equities, Inc.) to purchase all of the outstanding ordinary shares and American depositary shares representing ordinary shares (collectively, "shares") of Smallworldwide plc expired at 9:30 a.m., New York City time and 2:30 p.m., London time, on October 2, 2000. The 90% minimum tender condition has been satisfied and the tender offer has been declared unconditional in all respects. The subsequent offer period commenced October 3, 2000, and will expire at 9:30 a.m., New York City time and 2:30 p.m. London time, on Tuesday, October 31, 2000, unless otherwise extended. Remaining outstanding shares tendered during the subsequent offer period may not be withdrawn, and shares properly tendered during the subsequent offer period will be immediately accepted and paid for promptly. As of 9:30 a.m., New York City time and 2:30 p.m., London time, on October 2, 2000, 7,809,753 shares had been tendered pursuant to the offer and not withdrawn (including shares tendered through notice of guaranteed delivery), which constitutes approximately 98% of the total number of Smallworld's outstanding shares. These shares include shares tendered by certain of Smallworld's officers and directors who, prior to the commencement of the offer, had irrevocably committed to tender or procure the tender of an aggregate of 1,113,700 shares (or approximately 14% of the outstanding shares). Payment for accepted shares will be made promptly. STROUDS, INC.: U.S. Trustee Will Conduct Meeting of Creditors on Nov. 3 ----------------------------------------------------------------------- Strouds, Inc. filed a Chapter 11 case in the US Bankruptcy Court, district of Delaware on September 7, 2000. Attorneys for the debtors are Bennett J. Murphy of Hennigan, Bennett & Dorman, Los Angeles, Calif. and David B. Stratton of Pepper Hamilton LLP. A meeting of creditors is set for November 3, 2000 at 9:00 AM, 844 King Street, Room 2313, Wilmington, DE 19801. STROUDS, INC.: Delaware Court Gives Nod to $50M DIP Financing Agreement ----------------------------------------------------------------------- Strouds, Inc., announced that it received final Court approval of its $50 Million Debtor-in-Possession (DIP) financing agreement. Under the terms of the DIP agreement, The CIT Group/Business Credit and Foothill Capital Corporation will provide $50 million in financing to fund Strouds' operations during its voluntary restructuring under Chapter 11. "The DIP financing agreement will provide adequate financial resources to fund our post-petition vendor and employee obligations and other operating requirements as Strouds moves forward in its restructuring," said John P. Brincko of Brincko Associates, Inc., the Company's financial restructuring advisors. "With our final DIP financing in place, as a result of the efforts of CIT and Foothill and the support of the vendor community and our employees, Strouds will be well-positioned to fund its operations and to provide its customers with a full selection of merchandise for the upcoming holiday season and beyond. We are greatly encouraged by the support of our vendor community and appreciate the many vendors who are now shipping to us on improved terms. Their recent cooperation and support have already contributed to improvements in our business." The Company filed Chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware in Wilmington on September 7, 2000. Strouds, Inc., the Linen Experts(R), is a specialty retailer of bed, bath, tabletop and other home textile products. The Company currently operates 60 stores in five states and also markets its home products through its web sites, www.linenexperts.com and www.strouds.com. TITANIUM METALS: Ratifies New Four-Year Collective Bargaining Agreement ----------------------------------------------------------------------- Titanium Metals Corporation reports that the hourly workers at its Henderson, Nevada plant have ratified a new, four year collective bargaining agreement. The new contract, which was effective October 2, 2000, provides for modest increases in wages and pensions over its term. The agreement covers approximately 300 production and maintenance workers at the Nevada facility who are represented by the United Steel Workers of America (Local 4856). Titanium Metals Corporation, headquartered in Denver, Colorado, is a leading worldwide integrated producer of titanium metal products. US WOOD: Obtains Extension of 365(d)(4) Deadline to January 27 -------------------------------------------------------------- The US Bankruptcy Court, District of Delaware, entered an order on September 27, 2000 granting the motion of US Wood Products, Inc. to assume or reject unexpired leases of nonresidential real property. The debtor's time to assume or reject each of the Unexpired Leases is extended to January 27, 2001. WASTE MANAGEMENT: Names Bradley Holcomb as VP & Chief Procurement Officer ------------------------------------------------------------------------- Waste Management Inc. (NYSE:WMI) announces the appointment of Bradley J. Holcomb as vice president and chief procurement officer. Mr. Holcomb will direct Waste Management's procurement activities with responsibility for developing and implementing a company-wide procurement process to optimize the company's purchasing activities. He will report to Chuck Williams, senior vice president, operations. "Procurement is an area where we believe the Company has significant opportunities," said Williams. "Most purchasing has been done at a local level in the past, which does not leverage the buying power of the total business. Brad's experience and knowledge in procurement should bring real value to Waste Management." Mr. Holcomb joins Waste Management from American Precision Industries Inc., where he was vice president, supply chain management and chief procurement officer. During his tenure, he reorganized the company's supply chain business processes and implemented "best practices." Prior to American Precision Industries Inc., Mr. Holcomb was vice president, global procurement and materials management for Praxair Inc. At Praxair, he was responsible for the complete remake of the organization's global sourcing. From 1976 to 1996, Mr. Holcomb worked for Eastman Kodak Company where he held various positions including general manager, product development, and director, supplier relationship management -- corporate purchasing. Mr. Holcomb earned a bachelor's degree in engineering science and a master's degree in industrial engineering from Arizona State University in Tempe, Ariz. He also holds a master's degree in chemical engineering from the University of Rochester in Rochester, N.Y. Mr. Holcomb and his wife, Suzanne, have two children. Waste Management Inc. is its industry's leading provider of comprehensive waste management services. Based in Houston, the Company serves municipal, commercial, industrial and residential customers throughout North America. WHX CORP: Tinkers with the Terms of Senior Noteholder Solicitation ------------------------------------------------------------------ WHX Corporation reports that its consent solicitation relating to its 10-1/2% Senior Notes due 2005 was further amended to provide for additional limitations on certain actions to be taken by WHX, including without limitation, amending certain covenants to further restrict WHX's ability to make restricted payments, incur additional indebtedness or utilize proceeds from asset sales. The expiration date for the consent solicitation remained October 4, 2000. WHX commenced soliciting consents from holders of its Notes to amendments of certain covenants and other provisions of the indenture governing the Notes on September 18, 2000. The detailed terms and conditions of the consent solicitation are contained in the consent solicitation statement dated September 18, 2000, in Supplement No.1 dated September 29, 2000 and in Supplement No. 2 dated October 3, 2000. Information agent for the consent solicitation is Innisfree M&A, Incorporated, and Donaldson, Lufkin & Jenrette is acting as Solicitation Agent for the solicitation. WHX is a holding company that has been structured to invest in and/or acquire a diverse group of businesses on a decentralized basis. WHX's primary businesses currently are Handy & Harman, a diversified manufacturing company whose strategic business segments encompass, among others, specialty wire, tubing, and fasteners, and precious metals plating and fabrication, and WPC, a vertically integrated manufacturer of value-added and flat rolled steel products. WHX's other businesses include Unimast Incorporated, a leading manufacturer of steel framing and other products for commercial and residential construction and WHX Entertainment Corp., a co-owner of a racetrack and video lottery facility located in Wheeling, West Virginia. WSR CORPORATION: Asks for Extension of Exclusive Period through January 8 ------------------------------------------------------------------------- WSR Corporation, R&S/Strauss, Inc., National Automotive Stores, Inc. and National Auto Stores Corp., debtors, filed a motion to extend exclusive periods in which to file a Chapter 11 plan and solicit acceptances thereto by ninety days. A hearing to consider the motion will take place on November 1, 2000 at 3:00 PM before the Honorable Mary F. Walrath, US Bankruptcy Court, District of Delaware. The debtors' exclusive period to propose a plan or plans under the Bankruptcy Code is scheduled to expire on October 9, 2000 and the related solicitation period is scheduled to expire on December 8, 2000. The debtors seek extensions through January 8, 2000 and March 9, 2001, respectively. The requested extensions are necessary to afford the debtors sufficient time to resolve or seek resolution by the court of the failure of R&S Parts and Service, LLC and SBCG, LLC as purchasers of substantially all of the debtor's operating assets to make required payments for those assets under a certain promissory note executed in connection with the sale of the assets and file, solicit votes with respect to and confirm their plan. AS partial payment for the assets, the purchaser executed a promissory note in favor of R&S in the principal amount of approximately $4.8 million. The purchaser failed to make the first payment on the note asserting a right to setoff its payment obligation. The debtors so far have been unable to resolve the dispute (The purchaser has refused to turn over $1.6 million). An agreement with respect to settlement of environmental claims is currently pending before the court, and the debtors and their professionals continue to reconcile claims of creditors. For all of the foregoing reasons, the debtors request that the court approve the extension of exclusivity. XEROX CORP.: Fitch Downgrades Sr Debt Rating To BBB- & On Watch Negative ------------------------------------------------------------------------ Fitch has downgraded Xerox Corp. (Xerox) and its subsidiaries' senior debt rating to 'BBB-' from 'A-' and the company's U.S. commercial paper (CP) program to 'F3' from 'F2'. The rating actions reflect the company's decreasing financial performance, uncertainties surrounding the company's business model and operating strategy going forward, and the potential for reduced liquidity. The ratings are placed on Rating Watch Negative. In addition to Xerox Corp., ratings affected are: Xerox Credit Corp. and Xerox Capital (Europe) plc's rated senior debt, Xerox Corp.'s $7.0 billion CP program, which is shared with Xerox Credit Corp. and Xerox Capital (Europe) plc, and Xerox Capital de Mexico, S.A. de C.V.'s $200 million U.S. CP program. Xerox recently indicated that it will report a financial loss for the third quarter, due to declining sales, strong competition and pricing pressures, unfavorable currency exchange rates, and additional investments for its internal operations. As a result of continuing weakened financial results, the company has announced that asset dispositions, major cost reductions, and other measures will be taken in order to realign the company's business model. Although the company's recently announced reduction in its dividend results in annual cash flow savings of approximately $400 million relieving some liquidity pressures, given current market conditions Xerox has accessed its $7.0 billion committed revolving credit agreement in support of the CP program. The company's revolver expires in Oct. 2002 and Xerox is currently in compliance with all covenants. However, based on indicated third quarter financial results, there will be less cushion for the company's tangible net worth covenant. Credit statistics for the first half of 2000 ending June 30, 2000, show Xerox's leverage, measured by total debt (including the financing segment) to the latest twelve months EBITDA, increasing to 6.5 times (x) compared to 4.6x at Dec. 31, 1999. Similarly, Xerox's core leverage (defined as core non-financing debt divided by core EBITDA) also increased for the twelve- month period to more than 2.0x from 1.5x at year-end 1999. The company's total leverage has been steadily increasing since 1997. For the same time period, Xerox's interest coverage ratio (including the financing segment) declined to 3.1x from 4.2x at Dec. 31, 1999. Due to worsening financial results anticipated for the third quarter, further pressure will be put on the company's overall and core credit protection measures. Fitch believes that credit protection measures will continue to be challenged for the next few quarters, despite the benefits of some asset dispositions, the resultant cash flow savings from the dividend cut, and some anticipated cost savings. Xerox Corp. develops, manufactures, and markets document processing equipment and provides document facilities management services worldwide. ********* 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 * * *