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/raid1/www/Hosts/bankrupt/TCR_Public/001122.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, November 22, 2000, Vol. 4, No. 229 Headlines ACCESSAIR: Airline Takes Flight With Low Introductory Fares AFA PRODUCTS: Involuntary Case Summary AMF BOWLING: SEC Issues Subpoena Inquiring on Financial Earnings COMMERCIAL METALS: Fitch Affirms BBB+ Senior Debt Rating CONTINENTAL SPRAYERS: Involuntary Case Summary CROWN VANTAGE: Auction Process in Place to Test KPS' $35MM Bid DRKOOP.COM: Says Cash Burn Rate Has Decreased Significantly DYNEX CAPITAL: Pays Down Bank Facility by $89MM in 3rd Quarter EASTERN PULP: Subsidiary Shuts Down Machine, Sends Home 41 Workers ELDER-BEERMAN: Reports Mixed Third Quarter Results ELDER-BEERMAN: Announces Grand Opening of Jasper, Indiana Store INDESCO INTERNATIONAL: Involuntary Case Summary INTERNOS CORP: Online Provider Files Chapter 11 in Alexandria KAISER GROUP: Subsidiary Completes Sr. Sub. Note Exchange Offer KASPER ASL: Chase Manhattan Grants Covenant Waiver MARKEL INTERNATIONAL: A.M. Best Puts Senior Debt Ratings at bbb METAL MANAGEMENT: Metal Recycler Files for Chapter 11 in Delaware METAL MANAGEMENT: Case Summary and 37 Largest Unsecured Creditors METAL MANAGEMENT: Recycling Firm Halt Status Modified By Nasdaq OWENS CORNING: Wants to Reimburse 401(k) Plan Stock Losses PACIFICARE HEALTH: S&P Gives Senior Debt a BB- Rating PILLOWTEX: U.S. Trustee To Convene Organizational Meeting PORT BARRE: Textile Plant Closes & Considers Bankruptcy SPINTEK GAMING: Gaming Firm Files Chapter 7 Petition in Nevada SUN HEALTHCARE: Shareholder Urges Appointment of an Examiner THERMATRIX INC: Reports Positive EBIT in Third Quarter TWINLAB CORP: Weak 3Q Sales Prompts Moody's to Lower Ratings VACATION VILLAGE: Case Summary and 20 Largest Unsecured Creditors VENCOR, INC: Stipulates to Relief from Stay for Negligence Claim * Meetings, Conferences and Seminars ********* ACCESSAIR: Airline Takes Flight With Low Introductory Fares ----------------------------------------------------------- After almost a year of being suspended, AccessAir is flying again and enticing passengers of its low fares, The Associated Press reports. The airline's new chairman, John Ruan III, says that AccessAir intends to build a reputation for dependability. AccessAir's first flight from Des Moines airport left on the dot last week, carrying 50 people on its Boeing 737 jet. Ruan sees that AccessAir's market presence will lower central Iowa's air fares. Competitors, Ruan predicts, will begin to match some of AccessAir's low fares. AccessAir filed for bankruptcy protection under Chapter 11 last November. With 400 employees, the airline ran daily flights from Des Moines to New York; Colorado Springs, Colo.; Moline, Ill.; and Los Angeles. AFA PRODUCTS: Involuntary Case Summary -------------------------------------- Alleged Debtor: AFA Products, Inc. 950 Third Avenue, New York New York 10022 Involuntary Petition Date: November 17, 2000 Case Number: 00-15451 Chapter 11 Court: Southern District of New York Petitioner's Counsel: David M. Friedman, Esq. Kasowitz, Benson, Torres & Friedman, LLP 1633 Broadway New York, New York 10019 (212) 506-1700 Petitioners: Oaktree OCM Unpaid interest Opportunities Fund, L.P. (plus default interest and premium, if any) $1,102,968 U.S. Bancorp Libra, Unpaid interest a Division of U.S. (plus default interest Bancorp Investments, Inc. and premium, if any) $ 663,000 Salomon Brothers Asset Unpaid interest Management (plus default interest and premium, if any) $ 639,843 Pacholder High Yigh Unpaid interest $ 85,312 Yield Fund, Inc. (plus default interest and premium, if any) AMF BOWLING: SEC Issues Subpoena Inquiring on Financial Earnings ---------------------------------------------------------------- The Securities and Exchange Commission is investigating AMF Bowling, The New York Times reports. The SEC issued a subpoena "seeking documents concerning the company's financial statements and accounting practices and policies." The company's latest quarterly report states that the company is "in the process of producing" the necessary documents the SEC requires. AMF CFO Stephen E. Hare declined to comment when approached. Optimistic, however, AMF indicates that it does not believe "that this inquiry by the SEC will have a material adverse effect on the company or its financial statements." COMMERCIAL METALS: Fitch Affirms BBB+ Senior Debt Rating -------------------------------------------------------- Fitch affirms the 'BBB+' rating on Commercial Metals Co.'s (CMC) senior unsecured debt and the 'F2' rating on its 3(a)3 $200 million commercial paper program. The Rating Outlook is Negative. The ratings are supported by CMC's strong fundamental business position in steel, metals and related materials, which has provided revenue and EBITDA growth over the last five years. Despite global oversupply conditions in steel and nonferrous metals, the company has maintained solid earnings and a sound financial profile. Credit concerns on the operating side are based on the cyclical and highly competitive business conditions that CMC faces in its steel manufacturing and fabricating operations, which contribute about 74% of operating profits. Continued low- priced steel imports into CMC's core U.S. market in addition to aggressive pricing tactics from competitors have put pricing pressure on domestic steel producers. Should there be a favorable resolution of rebar anti-dumping lawsuits filed by some steel producers, the pricing situation would likely improve. The negative outlook reflects worse-than-expected credit protection measures resulting from debt-financed share repurchases in the most recent fiscal year and the possibility that those measures may not materially improve in the next year or two. In fiscal 2000, debt increased $73 million as the company spent $42 million to repurchase shares. EBITDA covered interest incurred 6.1 times (x) and leverage, as measured by total debt to EBITDA, was 2.2x, both weaker than the levels anticipated in the rating. While CMC has not committed itself to significant share repurchase activity, conditions could arise that would result in such activity. CMC may be a participant in steel industry consolidation as well. Aside from market factors over which the company has no control, Fitch expects operating performance to remain solid, if not improve, in the coming year. Steel production in fiscal 2001 should significantly improve at the South Carolina rolling mill reflecting near completion of its ramp up. In addition, losses on the large structural fabrication projects should diminish due to management improvements. Commercial Metals Company, headquartered in Dallas, manufactures, recycles and markets steel and metal products and related materials. CMC is a vertically integrated minimill company that operates through its network of more than 115 locations worldwide. In total, more than 75% of the company's business is steel related, although the other businesses contribute meaningfully to overall returns. CONTINENTAL SPRAYERS: Involuntary Case Summary ---------------------------------------------- Alleged Debtor: Continental Sprayers International, Inc. 950 Third Avenue, New York New York 10022 Involuntary Petition Date: November 17, 2000 Case Number: 00-15453 Chapter 11 Court: Southern District of New York Petitioner's Counsel: David M. Friedman, Esq. Kasowitz, Benson, Torres & Friedman, LLP 1633 Broadway New York, New York 10019 (212) 506-1700 Petitioners: Oaktree OCM Unpaid interest Opportunities Fund, L.P. (plus default interest and premium, if any) $1,102,968 U.S. Bancorp Libra, Unpaid interest a Division of U.S. (plus default interest Bancorp Investments, Inc. and premium, if any) $ 663,000 Salomon Brothers Asset Unpaid interest Management (plus default interest and premium, if any) $ 639,843 Pacholder High Yigh Unpaid interest $ 85,312 Yield Fund, Inc. (plus default interest and premium, if any) CROWN VANTAGE: Auction Process in Place to Test KPS' $35MM Bid -------------------------------------------------------------- A bankruptcy court authorized Crown Vantage Inc. and its wholly- owned subsidiary, Crown Paper Co., to move forward in the sale of its assets to KPS Special Situations Fund LP, Dow Jones reports. Company counsel Douglas P. Bartner, Esq., of Shearman & Sterling added that the Bankruptcy Court in Oakland, Calif., approved proposed auction procedures without modification. The official committee of unsecured creditors and the Company's secured lenders lend their support to the auction process and KPS' purchase. The auction procedures call for other interested parties to submit their bids before Jan. 3. If a qualified bid exceeds KPS' bid by $1.25 million, then an auction will then be held on Jan. 9 at the San Francisco offices of Shearman & Sterling. As previously reported in the Troubled Company Reporter, KPS signed a letter of intent to purchase Crown Paper's assets for $17.5 million in cash and a $17.5 million note payable in seven years. Crown Vantage and Crown Paper filed for bankruptcy protection under Chapter 11 in March 15 in the U.S. Bankruptcy Court in Oakland. The filings exclude Crown Vantage's U.K. operations. The companies maintain the exclusive right to file a Chapter 11 plan in their cases through Dec. 25. DRKOOP.COM: Says Cash Burn Rate Has Decreased Significantly ----------------------------------------------------------- Drkoop.com, Inc. (Nasdaq: KOOP), a leading Internet Health Network with more than two million registered users, announced operating and financial results for the third quarter ended September 30, 2000. Total revenue for the third quarter was $2.0 million, compared with $2.9 million for the same period of 1999. Net loss attributable to common stockholders for the third quarter was $57.9 million, or $1.60 per share, compared to $20.6 million, or $.0.68 per share, for the third quarter of 1999. The third quarter loss reflected $48.0 million of non-cash expenses from stock based charges primarily associated with transactions entered into in connection with the company's private placement of preferred stock and warrants in August 2000 versus $1.6 million in the third quarter of 1999. The net cash used in operating activities decreased from $31.0 million in the third quarter of 1999 to $8.5 million in the 2000 period as a result of the company's cost reduction efforts. "We are happy to put this transitional quarter behind us," said Richard Rosenblatt, CEO of drkoop.com. "We are very pleased with our progress thus far, having assumed management less than 40 days before the end of the quarter. Our team has implemented a very methodical approach to the turn-around and has redefined the direction and positioning of the company. We created a culture of financial discipline, greatly expanded the company's focus on business-to-business revenues, and solidified our partnership with Siemens/SMS and our many hospital partners. The cash burn rate has been significantly reduced and we anticipate it will continue to decline. Our next step is to continue winning customers, positioning the company for revenue growth and profitability." Recent positive changes in drkoop.com include: - Completed a $27.5 million cash investment in August 2000 - Significantly reduced the cash burn rate - Reduced workforce by more than 30% - Strengthened existing partnership with Siemens/Shared Medical Systems (SMS) - Grown the business-to-business side of revenues - Acquired drDrew.com, increasing registered members to more than two million - Building skilled, qualified senior management team "We are confident drkoop.com is back on track and will remain a leader in e-health. With much of the clean-up behind us, we can now focus on execution," added Ed Cespedes, drkoop.com President. drkoop.com is a leading Internet Health Network providing measurable value to individuals worldwide. Its mission is to empower consumers with the information and resources they need to become active participants in the management of their own health. The drkoop.com Network is built from relationships with other Web sites, healthcare portals and traditional media outlets, and integrates dynamic, medically reviewed content, interactive communities and consumer-focused tools into a complete source of trusted healthcare information. Its strategic alliance with Shared Medical Systems (SMS) makes drkoop.com a leader in promoting secure online interaction between patients, their physicians and local healthcare organizations. With more than two million registered users worldwide, drkoop.com has strategic relationships with numerous online organizations. The company's content is also featured on web sites representing more than 420 healthcare facilities nationwide. DYNEX CAPITAL: Pays Down Bank Facility by $89MM in 3rd Quarter -------------------------------------------------------------- Dynex Capital, Inc. (NYSE: DX) reported a net loss of $836,000 or $0.35 per common share for the third quarter of 2000, versus net income of $320,000, or a net loss of $0.25 per common share for the third quarter of 1999, and a net loss of $68.7 million or $6.28 per common share for the second quarter 2000. For the third quarter, the Company reported net interest margin on its investment portfolio of $1.3 million, compared to $1.9 million during the second quarter 2000 and $12.3 million during the third quarter of 1999. The decrease in net interest margin for the third quarter 2000 was primarily due to the decrease in the Company's interest earning assets, coupled with an increase in the Company's average cost of funds. The Company's average interest earning assets for the third quarter 2000 were $3.5 billion, compared to $4.6 billion for the third quarter 1999, and $3.9 billion for the second quarter 2000. The decrease in average assets resulted primarily from the impact of sales of loans and securities in the second quarter, and to a lesser extent from prepayments. In addition, the Company's average cost of funds increased to 7.65% in the third quarter 2000, versus 7.35% in the second quarter 2000 and 6.28% for the third quarter 1999. The increase in the cost of funds had the effect of reducing the Company's interest spread on its assets, which decreased to 0.40% for the quarter compared to 1.32% for the third quarter 1999, and 0.46% for the second quarter 2000. The increase in the Company's cost of funds was partially offset by resets on certain of the Company's underlying ARM assets, which had a weighted average yield of 8.05% in the third quarter versus 7.81% in the second quarter. At September 30, 2000, the Company had recourse borrowings of $143 million, comprised primarily of $97 million related to the Company's senior unsecured notes due July 2002 and $40 million borrowed under short-term repurchase agreements. Additionally, as of September 30, 2000, the Company had short-term credit obligations of $76 million related to letters of credit on multifamily tax-exempt bonds. The bank credit facility relating to these letters of credit expired as of the end of October. The Company is currently negotiating a ninety-day extension on the bank credit facility and believes it will come to a satisfactory resolution with the lender group on such extension. The Company reported that general and administrative expenses for the third quarter, including general and administrative expenses of the Company's unconsolidated affiliates, decreased to $1.6 million versus $2.3 million for the second quarter 2000, and $2.7 million for the first quarter of 2000. Regarding the results for the third quarter, Thomas H. Potts, President of the Company, stated, "We continue to make progress on our primary focus, which is to payoff the remaining bank credit facility. During the third quarter, we repaid $89 million of borrowings under such facility through the sale of various multifamily loans. The bank credit facility still supports our obligations on a pool of tax-exempt bonds relating to ten multifamily properties. We expect construction to be complete on all these properties this quarter, removing one of the major impediments to the sale or securitization of this pool. We are hopeful that we will be able to pay off the bank credit facility within the requested ninety day extension time-period." "The loss for the third quarter primarily reflects the $746,000 loss we incurred as a result of the sale of the funding notes and the related auto loans that were acquired from AutoBond Acceptance Corporation. Additionally, the net interest margin on our investment portfolio declined $0.6 million quarter-to- quarter. As our interest earning assets continue to decline, we would expect further erosion of our net interest margin. However, we should also see further declines in our general and administrative expenses." Mr. Potts commented further, "We feel the recently announced merger with California Investment Fund, LLC is in the best interests of the Company. We will also be focusing our efforts on facilitating and ensuring a successful completion of the impending merger." Dynex Capital, Inc. is a financial services company that elects to be treated as a real estate investment trust (REIT) for federal income tax purposes. EASTERN PULP: Subsidiary Shuts Down Machine, Sends Home 41 Workers ------------------------------------------------------------------ Brewer, Maine-based Eastern Fine Paper Inc., The Associated Press reports, plans to shut down its paper machine and send 41 employees home. "This was a very difficult decision for us," Joseph H. Torras Jr. told the AP. Mr. Torras, president and chief operating officer of the mill, explains that operations need to be streamlined and the mill's efficiency needs to increase in order to secure the future of the mill's 400 other employees. The paper mill's parent company, Eastern Pulp & Paper Corp., filed for bankruptcy protection under Chapter 11 in Maine in September. The company listed assets of $187.8 million and debts of $181.3 million in its bankruptcy petition. ELDER-BEERMAN: Reports Mixed Third Quarter Results -------------------------------------------------- The Elder-Beerman Stores Corp. (Nasdaq:EBSC) incurred a net loss of $1.4 million for the 13 weeks ended October 28, 2000, excluding $10.7 million in pre-tax charges relating to the company's new strategic plan announced on August 11, 2000 and the closing of one store. Normalized basic and diluted earnings per share equaled a loss of $0.10, compared to income from continuing operations of $0.05 in the third quarter of 1999. Including the charges relating to the strategic plan and store closing, Elder-Beerman incurred a net loss of $8.2 million or $.58 per basic and diluted share for the third quarter. Total revenues for the quarter rose 3.9 percent over last year to $161.9 million. Total sales for the quarter increased 3.7 percent over last year to $154.6 million, and comparable sales for the quarter increased 0.7 percent. Third quarter comparable sales reflect sales for stores open more than 13 months. Elder-Beerman incurred a net loss of $4.1 million for the 39 weeks ended October 28, 2000, excluding $17.4 million in pre-tax charges for development and implementation of the company's new strategic plan and the closing of three stores. Normalized basic and diluted earnings per share equaled a loss of $0.28 compared to a loss from continuing operations of $0.02 for the same period of 1999. Including the charges related to the strategic plan and store closings, Elder-Beerman incurred a net loss of $15.2 million or $1.05 per basic and diluted share. Total revenues year-to-date rose 2.4 percent over last year to $449.5 million. Total sales year-to-date increased 2.3 percent over last year to $427.6 million, and comparable sales year-to- date decreased 0.9 percent. Frederick J. Mershad, chairman and chief executive officer, stated, "The retail landscape is changing and Elder-Beerman is evolving through its three-part strategic plan to meet our customers' needs. Since the announcement of the plan in August, we have been working hard on its implementation. We believe that our strategic plan provides the best opportunity to compete for customers' business and grow in today's retail environment." The company's new strategic plan calls for: - A shift in the company's merchandising strategy to provide a better value proposition to customers. The company will intensely focus on five businesses -- ladies' and men's moderate sportswear, denim, textiles and shoes -- and plans to emphasize its strong cosmetics business as a differentiator from discounters and other moderate department stores. The company's goal is to offer customers a competitive combination of price and selection of merchandise in these categories. The customers will see the full effect of this strategy beginning in Spring 2001. - Growth of new concept stores. The company had two successful new concept store openings in October 2000 in Howell, Michigan and West Bend, Wisconsin, and will grand open its third new concept store this year on November 17 in Jasper, Indiana. This gives the company five new concept stores, with plans to accelerate new concept store growth in 2001. The company has already announced one new store for Spring 2001 in Stevens Point, Wisconsin. The company believes that these new stores, with their smaller (55,000 square feet) footprint, more convenient layout and other features, represent the future for new store growth at Elder-Beerman. Located in smaller, underserved markets, the concept stores emphasize convenience and service, with unique features such as centralized customer service centers that are always staffed, self select formats in cosmetics and shoes, and The Zone, a combined juniors and young men's shop that creates an exciting specialty store within a store. The company is also incorporating some of the most successful operational elements of the concept stores into existing company stores over the next year. About one-half of the stores have now been modified, with the balance to be converted following the Christmas 2000 shopping season. - A more efficient organization. The company expects to achieve expense reductions of $10 to $12 million pretax in fiscal 2001 and an additional $5-$7 million pretax in fiscal 2002. These savings will be achieved by tailoring the Elder-Beerman organization to provide only those functions essential to support the strategic plan, and by reengineering many functions in the company to make them more efficient. In commenting on the strategic plan, Mershad noted, "Our ultimate goal is to bring value to our shareholders. We feel that the best way to achieve that goal is by offering a better value proposition to our customer -- a competitive combination of price and selection in our merchandise and convenience and service in our stores. Our strategic plan is focused on achieving these goals." Regarding the third quarter, Mershad added, "Due to slower sales than planned in the third quarter, we increased our markdown rate to clear slow moving merchandise. Because of this disciplined approach, our inventory levels are on plan as we approach the Christmas shopping season in the fourth quarter." The nation's ninth largest independent department store chain, The Elder-Beerman Stores Corp. is headquartered in Dayton, Ohio and operates 63 stores in Ohio, West Virginia, Indiana, Michigan, Illinois, Kentucky, Wisconsin and Pennsylvania. Elder-Beerman also operates two furniture superstores. ELDER-BEERMAN: Announces Grand Opening of Jasper, Indiana Store --------------------------------------------------------------- The Elder-Beerman Stores Corp. (Nasdaq:EBSC) announces the Grand Opening for its newest department store in Jasper, Indiana located in the Germantown Shopping Center on US Highway 231 on the north side of Jasper. There will be a ribbon cutting ceremony at 8:00 a.m. The 55,000 square-foot store is the third new concept store Elder- Beerman has opened this fall and the fifth total. The company has announced that its sixth concept store in Stevens Point, Wisconsin will open in the spring of 2001. Growth of the concept store format in smaller markets is a key element of the company's three- part strategic plan announced in August of this year. "Retail is entering a new phase," stated Frederick J, Mershad, Elder-Beerman's chairman and chief executive officer. "And we believe our three-part strategic plan is allowing us to evolve from a traditional department store to a new kind of store. Our goal is to keep the best traits of a fashion department store and offer a competitive balance of price, selection, convenience and service - in short, to offer the best value we can to our customers." "The growth of our concept stores is very important to our three- part strategic plan," Mershad continued. "Concept store growth, along with our emphasis on value in our merchandising strategy and the increased efficiencies of our organizational structure, allows us to develop our own niche in a crowded retail landscape. Jasper fits perfectly into our new store strategy in terms of location and demographics. We look forward to serving new customers in that community." Like the other concept stores the Jasper store will carry a mix of brand name fashion merchandise for men, women, juniors, young men and children; a full assortment of home furnishings; and cosmetics and fragrances, including Estee Lauder, Clinique, Lancome and Elizabeth Arden. Elder-Beerman has designed its concept stores to enhance the customer shopping experience through a more convenient store layout and high-capacity fixturing that will attractively display more merchandise in less space. The Jasper store incorporates Elder-Beerman's concept store innovations, including: - Centralized customer service centers - Strategically located centers throughout the store will be staffed during all store hours to facilitate fast and easy purchases for the customer with Elder-Beerman's new proprietary point of sale system. These service centers and the new point of sale system help Elder-Beerman to provide the fast and efficient service that today's customer needs. - Self-select cosmetics - All of the fragrances and about 50 percent of the treatment products will be available on open shelves for shopping convenience. - The Zone - A combined juniors' and young men's shop creates an exciting specialty store within a store for the next generation of Elder-Beerman customers. - Bridal registry kiosk - Using a touch-screen activated computer customers gain immediate access to a couple's registry wish list. Elder-Beerman offers free, personal bridal registry consultation by appointment. The nation's ninth largest independent department store chain, The Elder-Beerman Stores Corp. is headquartered in Dayton, Ohio and now operates 63 department stores in Ohio, West Virginia, Indiana, Michigan, Illinois, Kentucky, Wisconsin and Pennsylvania. Elder- Beerman also operates two furniture superstores. INDESCO INTERNATIONAL: Involuntary Case Summary ----------------------------------------------- Alleged Debtor: Indesco International, Inc. 950 Third Avenue, New York New York 10022 Involuntary Petition Date: November 17, 2000 Case Number: 00-15452 Chapter 11 Court: Southern District of New York Petitioner's Counsel: David M. Friedman, Esq. Kasowitz, Benson, Torres & Friedman, LLP 1633 Broadway New York, New York 10019 (212) 506-1700 Petitioners: Oaktree OCM Unpaid interest Opportunities Fund, L.P. (plus default interest and premium, if any) $1,102,968 U.S. Bancorp Libra, Unpaid interest a Division of U.S. (plus default interest Bancorp Investments, Inc. and premium, if any) $ 663,000 Salomon Brothers Asset Unpaid interest Management (plus default interest and premium, if any) $ 639,843 Pacholder High Yigh Unpaid interest $ 85,312 Yield Fund, Inc. (plus default interest and premium, if any) INTERNOS CORP: Online Provider Files Chapter 11 in Alexandria ------------------------------------------------------------- The Washington Post reports that Internos Corp.'s plan to go public has been halted after the online provider filed for bankruptcy protection under Chapter 11. Internos filed a chapter 11 petition on Nov. 9 in the U.S. Bankruptcy court in Alexandria, listing assets and debts of $1 million to $10 million each. Founded in 1996 by Donald Hyde, Internos provides business solutions for the commercial and residential construction, railroad and toy industries. KAISER GROUP: Subsidiary Completes Sr. Sub. Note Exchange Offer --------------------------------------------------------------- Kaiser Group International, Inc. (OTC Bulletin Board: KSRG) announced that its subsidiary, Kaiser Government Programs, Inc. (KGP), has completed an exchange offer to recordholders, as of August 14, 2000, of Kaiser Group International, Inc.'s senior subordinated notes due 2003. Such holders were offered an opportunity to surrender their rights under a guarantee of their notes previously issued by KGP in exchange for the right to cause KGP to repurchase shares of preferred stock that will be issued to them pursuant to the Plan of Reorganization of Kaiser Group International, Inc. if KGP receives certain proceeds from Kaiser- Hill Company, LLC (KGP put rights). The holders of approximately 99.4% of the principal amount of the notes accepted the exchange offer. Certificates representing the KGP put rights will be distributed in connection with the initial distribution made by Kaiser Group International, Inc. under its Plan of Reorganization. Until certificates representing the KGP put rights are distributed, the KGP put rights will trade together with the notes as a single unit. Accordingly, if a noteholder who participated in the exchange offer elects to trade its notes, the noteholder's right to receive the Put Right Certificate will transfer together with the sold notes. However, after certificates for the KGP put rights have been distributed, the KGP put rights will trade as a security separate from the notes and under their own CUSIP number. KASPER ASL: Chase Manhattan Grants Covenant Waiver -------------------------------------------------- Kasper A.S.L., Ltd. (Nasdaq: KASP) announced that it has entered into an amended agreement with the lenders of the company's Revolving Credit Facility, led by The Chase Manhattan Bank, that will enhance the company's liquidity and financial flexibility and waive compliance with certain financial covenants and all existing defaults. As previously announced, the Company did not make its September 30, 2000 semi-annual interest payment of approximately $7.2 million to holders of its 13% Senior Notes. Kasper is currently engaged in discussions with an ad hoc committee of its noteholders for the purpose of reaching a restructuring that will allow the company to meet its obligations and enhance its short- and long-term ability to pursue its strategic plans. Kasper A.S.L., Ltd. is a leading marketer and manufacturer of women's suits and sportswear, as well as career dresses. The Company's product lines are sold in over 2,000 retail locations throughout the United States, Europe, the Middle East, Southeast Asia and Canada, and the Company's retail outlet stores. The Company currently distributes its products under the KASPER A.S.L.(R), ANNE KLEIN(R), ANNE KLEIN2(TM), A LINE ANNE KLEIN(TM), LeSUIT(R), and ALBERT NIPON(R) labels. The Company also licenses its ANNE KLEIN(R), ANNE KLEIN2(TM), KASPER(R) and ALBERT NIPON(R) labels for various men's and women's products MARKEL INTERNATIONAL: A.M. Best Puts Senior Debt Ratings at bbb --------------------------------------------------------------- A.M. Best Co. has lowered the financial strength ratings of Markel International--formerly known as Terra Nova Insurance (UK) Holdings plc.--to A- (Excellent) from A (Excellent), the senior debt ratings of Markel Corp. to bbb from bbb+ and its preferred stock rating to bb+ from bbb. A.M. Best has affirmed the financial strength ratings of Markel's North American operations. The rating actions reflect the adverse loss reserve development and erosion of profitability at Markel International, management's aggressive acquisition appetite that has allowed financial leverage at Markel Corp. to increase to 51%--debt plus preferred stock/ total capital--and the decline in available cash flow coverage of fixed holding company obligations. A majority of Markel's debt obligations, including a sizable bank facility, mature in 2003. The acquisition of Terra Nova has introduced more volatility with respect to loss reserve levels and earnings. These actions take into account the increased dependence upon Markel's North American operations to service the debt obligations of the holding company over the near-term. In addition, the significant increase in goodwill has compromised the quality of capital partially offset by the unrealized economic value embedded within the company's loss reserves. Over the past twelve months, the surplus of Markel International has declined by nearly 50% due to reserve strengthening, severe weather related losses and charges associated with discontinued operations including certain Lloyds syndicates. A.M. Best expects Markel International will continue to be challenged over the near- term by the inadequate pricing and weak underwriting controls that existed prior to its acquisition and led to the reserve deficiencies. The corrective actions implemented by Markel Corp. are expected to bring Markel International's balance sheet strength and operating performance more in-line with that of its core operations over the longer-term. These actions include re- underwriting the continuing programs, eliminating programs that are unable to generate adequate margins and implementing strong underwriting controls and standards. Despite the rating actions relating to Markel International and the senior debt and preferred stock ratings of Markel Corporation, the North American operation's ratings were affirmed reflecting management's commitment and A.M. Best's expectation that financial leverage will be reduced significantly over the near-term, favorably impacting interest coverage and reducing burden on the North American operations to service its holding company obligations. The rating affirmation is also supported by the North American operation's strong level of capitalization, solid position within the specialty lines market and consistently strong operating results. The strong capital position of these operations is enhanced by significant economic value embedded within its loss reserves, which has been amassed through consistently conservative reserving practices. Operating results have further benefited from management's conservative underwriting and reserving philosophy coupled with their proven underwriting expertise. Markel Corp., based in Glen Allen, Va., markets and underwrites specialty insurance products and programs to a variety of niche markets on both an admitted and excess & surplus lines basis. These products and programs are marketed through affiliated as well as unaffiliated agents and brokers. Markel Corporation ranks among the 75 largest publicly traded property/casualty writers in the United States. As of September 31, 2000, Markel Corp. reported total assets of $5.3 billion and equity of $690.8 million. The following existing debt ratings were lowered: -- Markel Corporation --senior debt rating lowered to "bbb" from "bbb+". -- Markel International plc (formerly Terra Nova Insurance (UK) Holdings plc) --senior debt ratings lowered to "bbb" from "bbb+". -- Markel Capital Trust I --preferred stock rating downgraded to "bb+" from "bbb". The financial strength ratings of the following members of Markel were lowered to A- (Excellent) from A (Excellent): -- Terra Nova (Bermuda) Holdings Ltd. -- Terra Nova Insurance Co. Ltd. -- Terra Nova Insurance Co. Ltd. The financial strength rating of the following member of Markel was lowered to A- (Excellent) from A (Excellent) and placed under review with developing implications pending its sale: -- Corifrance The financial strength rating of the following member of Markel, which has been placed into runoff, was downgraded to B+ (Very Good) from A (Excellent): -- Terra Nova (Bermuda) Insurance Co. Ltd. The financial strength ratings of the following members of Markel were affirmed at A (Excellent): -- Markel North America Insurance Group -- Essex Insurance Co. -- Evanston Insurance Co. -- Markel Insurance Co. -- Markel American Insurance Co. The A- (Excellent) financial strength ratings of the following members of Markel were affirmed: -- Associated International Insurance Co. -- Deerfield Insurance Co. METAL MANAGEMENT: Metal Recycler Files for Chapter 11 in Delaware ----------------------------------------------------------------- A Chicago-based metal recycling company, Metal Management Inc. filed for Chapter 11 protection together with 28 affiliates in the U.S. Bankruptcy Court in Wilmington, Delaware, Dow Jones reports. Metal Management previously announced that they have reached an agreement with an informal committee representing bondholders and lenders under its senior secured credit facility on a complete balance sheet, with new equity converted from $180 million debt. According to Dow Jones, company holders deals with 10% senior subordinated notes due 2008 to 99% company's common stock replacement to their notes. And on company's current terms, the 12.75% senior secured notes due 2004 remains outstanding. In court papers, according to Reuters, the company listed $698.4 million in assets and $484.4 million in total debts as of June 30. Out of the 20 largest unsecured creditors, most are bondholders with claims ranges from $1 million to $29 million. METAL MANAGEMENT: Case Summary and 37 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Metal Management, Inc. 500 North Dearborn Street Suite 405 Chicago, Illinois 60610 Affiliates: California Metals Recycling, Inc. CIM Trucking, Inc. Firma, Inc. Firma Plastic Co., Inc. MacLeod Metals Co. Metal Management Aerospace, Inc. Metal Management Alabama, Inc. Metal Management Arizona, L.L.C. Metal Management Connecticut, Inc. Metal Management Gulf Coast, Inc. Metal Management Indiana, Inc. Metal Management Memphis, L.L.C. Metal Management Midwest, Inc. Metal Management Mississippi, L.L.C. Metal Management Northeast, Inc. Metal Management Ohio, Inc. Metal Management Pittsburgh, Inc. Metal Management Realty, Inc. Metal Management S & A Holdings, Inc. Metal Management Services, Inc. Metal Management Stainless & Alloy, Inc. Metal Management West Coast Holdings, Inc. Metal Management West, Inc. metals.com, inc. MTLM Arizona, Inc. Proler Southwest Inc. Reserve Iron & Metal Limited Partnership Trojan Trading Co. Type of Business: Metal Management, Inc. and its affiliates are the largest full-service metals recycler in the United States, with approximately 50 recycling facilities in 14 states. Their operations consist primarily of collecting and processing ferrous and non-ferrous metals for resale to metals brokers, steel producers and producers and processors of other metals. Chapter 11 Petition Date: November 20, 2000 Court: District of Delaware Bankruptcy Case No.: 00-04303 Debtor's Counsel: Joel A. Waite, Esq. Young Conaway Stargatt & Taylor, LLP 1100 North Market Street Wilmington, Delaware 19899 (302) 571-6600 Total Assets: $ 698,381,000 Total Debts : $ 484,443,000 37 Largest Unsecured Creditors: Goldman Sachs & Co. Tony Davis 85 Broad St., 29th Fl New York, NY 1004 (212) 902-0412 Bond Fax:(212) 346-2708 Indebtedness $ 29,335,000 MFS Investment Management Bob Howard 500 Boylston Street, 23rd Fl Boston, MA 02116 (617) 954-5973 Bond Fax:(617) 954-6604 Indebtedness $ 27,240,000 Kemper High Yield Fund Bob Horton 222 South Riverside Plaza Chicago, IL 60606 (312) 537-8841 Bond Fax:(312) 537-8589 Indebtedness $ 21,680,000 Grandview Capital Mgmt, LLC 820 Manhattan Avenue, Ste 200 Manhattan Beach, CA 90266 (310) 376-5274 Bond Fax:(310) 376-1274 Indebtedness $ 16,545,000 Alliance Capital Management Kate Kutasi 1345 Ave. of the Americas 38th Floor New York, NY 10105 (212) 969-7590 Bond Fax:(212) 969-5820 Indebtedness $ 13,950,000 Sun America Asset Management Paul Kunz 733 3rd Avenue New York, NY 10017 (212) 551-5935 Bond Fax:(212) 551-5935 Indebtedness $ 7,000,000 TCW Leveraged Income Trust Robert Sosa 1100 Santa Monica Boulevard, Suite 2000 (310) 235-5951 Bond Fax:(310) 235-5965 Indebtedness $ 4,450,000 TCW Leveraged Income Trust Robert Sosa 1100 Santa Monica Boulevard, Suite 2000 (310) 235-5951 Bond Fax:(310) 235-5965 Indebtedness $ 2,500,000 Lazarov Brothers, Inc. David Lazarov 8637 Sandy Hill Cove West Cardova, TN 38018 (901) 309-2438 Fax:(901) 309-2438 Note Payable $ 2,111,111 Kemper Strategic Income Fund Bob Horton 222 South Riverside Plaza Chicago, IL 60606 (312) 537-8841 Bond Fax:(312) 537-8589 Indebtedness $ 1,830,000 Kemper High Yield Portfolio Bob Horton 222 South Riverside Plaza Chicago, IL 60606 (312) 537-8841 Bond Fax:(312) 537-8589 Indebtedness $ 1,820,000 Kemper High Yield Fund II Bob Horton 222 South Riverside Plaza Chicago, IL 60606 (312) 537-8841 Bond Fax:(312) 537-8589 Indebtedness $ 1,750,000 CSX Transportaion Diane Slaughter 6735 South Point Drive South Bldg J675 Jacksonville, FL 32216-6177 (904) 279-6332 Fax:(904) 279-6330 Trade $ 1,159,630 Kemper High Income Trust Bob Horton 222 South Riverside Plaza Chicago, IL 60606 (312) 537-8841 Bond Fax:(312) 537-8589 Indebtedness $ 960,000 Kemper High Yield Opportunity Fund Bob Horton 222 South Riverside Plaza Chicago, IL 60606 (312) 537-8841 Bond Fax:(312) 537-8589 Indebtedness $ 870,000 Southwire Co. Jan McCain One Southwire Drive Carrollton, GA 30119 (770) 832-4530 Fax:(770) 832-4482 Trade $ 863,752 National Metals Co. B.J. Shapiro 4401 62nd Street Scottsdale, AZ 85251 (602) 920-9122 Fax:(480) 994-1736 Note Payable $ 786,967 Norfolk Southern John Brown 125 Spring Street Atlanta, GA 30303 (404) 527-3360 Fax:(404) 527-2966 Trade $ 524,063 Pratt & Whitney Jeff Bridge P.O. Box 13466 Newark, NJ 07188-0466 (860) 565-0357 Fax:(860) 565-5941 Trade $ 466,059 Kemper Multi-Market Income Trust Bob Horton 222 South Riverside Plaza Chicago, IL 60606 (312) 537-8841 Bond Fax:(312) 537-8589 Indebtedness $ 460,000 Ferrous Processing & Trading James Probst M&M Construction 9100 John Kronk Detroit, MI 48210-0166 (313) 582-2910 Fax:(313) 582-8817 Trade $ 442,831 Caterpillar Paula Spitz P.O. Box 348 Aurora, IL 60507 (630) 895-5047 Fax:(630) 859-6058 Trade $ 391,368 Republic Technologies John George 3770 Embassy Parkway Akron, OH 4433-8367 (330) 670-3114 Fax:(330) 670-3026 Trade $ 371,339 Allied Tube & Conduit Phil Baumister Dept. CH 10415 Palatine, IL 60055-0415 Trade $ 344,313 Alflex Corp. Denise Hall 2630 El Presidro St. Long Beach, CA 90810 (310) 886-8300 Fax:(310) 631-3602 Trade $ 295,754 Port Authority of New Jersey and New York Donna Koerner 260 Kellogg Street Port Newark, NJ 07114 (973) 690-3486 Fax:(973) 690-3494 Trade $ 264,591 Tube City Tom Lippert P.O. Box 2000 Glassport, PA (412) 678-6141 Fax:(412) 675-8295 Trade $ 258,126 Welded Tube Co. of America Trade $ 242,911 Davis, Graham & Stubbs LLP Trade $ 188,720 Champion Labs Trade $ 184,283 Zorko Alternator Service Trade $ 177,517 AK Steel Trade $ 139,411 Rose Metal Recycling Trade $ 132,507 Intermatic-Spring Grove Trade $ 132,338 AM Castle Trade $ 123,900 LA Scrap Iron and Metal Trade $ 120,893 Texas Tube Co. Trade $ 119,907 METAL MANAGEMENT: Recycling Firm Halt Status Modified By Nasdaq --------------------------------------------------------------- The Nasdaq Stock Market has placed the shares of Metal Management Inc. to "news pending" from "additional information requested, Dow Jones reports. The shares will remain halted unless the company pleases Nasdaq's request. The shares were halted last week with its price at 16 cents. Metal Management has agreed with its bondholders to restructure its balance sheet thru Chapter 11 bankruptcy reorganization. OWENS CORNING: Wants to Reimburse 401(k) Plan Stock Losses ---------------------------------------------------------- Owens Corning asks Judge Walrath for permission to contribute $2,200,000 in cash to the Owens Corning Stock Fund, one of the 401(k) plans offered by the Debtors to their employees. The Debtors explain that from September 29, 2000, through October 4, 2000, many of the Plan's participants elected to liquidate all of their Owens Corning Stock Fund investments and transfer the proceeds from those stock sales into other 401(k) Plans. During this four-day period, David S. Kurtz, Esq., of Skadden, Arps, Shate, Meagher & Flom, relates, Plan Participants redeemed 2,102,383 shares of Owens Corning stock. The 401(k) Plan is set-up so that Plan Participants receive cash for their shares in an amount equal to the closing price on the day of the sale. Accordingly, based on the terms of the Plan, Plan Participants were guaranteed to receive $5,135,192 for the shares they sold. To cover the $2.2 million shortfall, and following customary practice, the Plan Trustee sold an additional 1,872,794 shares held in the Plan. The Plan Participants who did not elect to sell their shares now cry foul. "[T]he loss," Mr. Kurtz says, "has provoked an outcry from many rank-and-file employees. [Some 11,000] employees who lost [value] feel that they were harmed on account of their loyalty to the Debtors in refraining from liquidating their Owens Corning Stock Fund accounts. Unfortunately, these events have significantly impacted employee morale at this critical early stage of these reorganization cases." Accordingly, the Debtors ask for permission to replenish their employees' 401(k) Plan account balances to account for the unintended effect triggered by the confluence of unusually large redemptions and the declining price of Owens Corning stock. The $2.2 million reimbursement, the Debtors asset, is soundly reasonable, will reinvigorate the workforce and will demonstrate the Debtors' solid commitment to their employees at a time when such action will be most appreciated. (Owens-Corning Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392- 0900) PACIFICARE HEALTH: S&P Gives Senior Debt a BB- Rating ----------------------------------------------------- Standard & Poor's removed from CreditWatch its ratings on PacifiCare Health Systems Inc. These ratings had been placed on CreditWatch on Oct. 11, 2000, with negative implications. Subsequently, Standard & Poor's lowered its counterparty credit and senior debt ratings on PacifiCare to double-'B'-minus from double-'B'-plus. The outlook is stable. These rating actions are based on numerous uncertainties in the wake of PacifiCare's announcement of lower earnings, which include the company's ability to adapt to the increasing number of shared- risk contracts with providers and the reduced flexibility of its operating companies to produce cash for the consolidated organization. These fundamental changes in operations could ultimately affect PacifiCare's current competitive advantages. In addition, new management, particularly an as-yet-unnamed chief financial officer, will need to demonstrate its approach to adverse business conditions. Major Rating Factors: --PacifiCare's earnings profile is a primary concern because it had been a key ratings strength. Operating EBITDA for the first nine months of 2000 was $423 million. With full-year 2000 earnings now projected at $480 million, earnings will fall below the $650 million-$700 million expected. Results in 2001 will be affected more dramatically, with EBITDA estimated by Standard & Poor's to be in the $250 million- $300 million range. Interest coverage, which Standard & Poor's analyzes on a pretax earnings basis, would be 1.5 times (x) to 2x interest. However, the variation in 2001 earnings could be significantly greater. --Liquidity remains at a good level as of Sept. 30, 2000, but is expected to be challenged in 2001 as medical claim trends continue to exceed premium yields projected by the company. --Standard & Poor's considers PacifiCare's risk-based capital position to be marginal, with a capital adequacy ratio of about 82% for year-end 1999 based on Standard & Poor's proprietary financial model. Required statutory capital exceeded the amount required by all states within which PacifiCare does business. Standard & Poor's expects PacifiCare's capital position to remain marginal through 2001 or until the health subsidiaries' earnings have been stabilized. --PacifiCare's debt-to-total-capital ratio as of Sept. 30, 2000, was 30%, which Standard & Poor's considers acceptable for the rating category. Debt leverage and debt service are expected to remain at this level in the near term. Standard & Poor's also notes that as of Sept 30, 2000, PacifiCare's level of goodwill is an aggressive 114% of equity, up from year-end 1999 levels because of its share-repurchase program. The goodwill is being amortized over periods ranging from three to 40 years and primarily reflects the strong operations in the Western region, including California. About half of this goodwill, held at regulated entities, is generally not recognized as an asset under statutory accounting principals. Any future goodwill writedowns related to unprofitable markets could affect the company's current level of debt leverage. --PacifiCare holds a strong business position as a regional managed care organization. With more than 4 million members, PacifiCare operates HMOs in nine states, with key market shares in California, Colorado, Oklahoma, Arizona, and Texas. Its Texas presence strengthened through the February 2000 acquisition of the Harris Methodist Texas Health Plan Inc.'s 250,000 members. PacifiCare covers more than 1 million members in its Medicare+Choice programs. Specialty products offered by the company include dental, vision, life, behavioral health, and pharmacy management. PILLOWTEX: U.S. Trustee To Convene Organizational Meeting --------------------------------------------------------- This week, the United States Trustee for Region III will schedule an organizational meeting for the purpose of forming one or more official committees of the Debtors' creditors. That meeting will be held in Philadelphia or Wilmington. Each of the 50 largest unsecured creditors will receive an invitation to that meeting directly from the Office of the U.S. Trustee. Ordinarily, the U.S. Trustee for Region III appoints one official committee of unsecured creditors and appoints the 7 largest debtholders willing to serve on that single committee. Daniel K. Astin, Esq., is the attorney for the U.S. Trustee in charge of Pillowtex's Chapter 11 cases. Contact the Office of the U.S. Trustee at 215-597-4411 for additional details about the time, date and place for the organizational meeting. (Pillowtex Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., 609/392-0900) PORT BARRE: Textile Plant Closes & Considers Bankruptcy ------------------------------------------------------- A former Fruit of the Loom textile plant, after almost a year of independent operations has shut its doors and has no funds to pay its employees, The Associated Press reports. PBA President Kevin Stevenson, who informed employees that he intends to sell his house to cover their paychecks. PBA already has started the first steps in filing for bankruptcy. Stevenson assured the employees that their paychecks will be the first ones dealt when the bankruptcy proceedings commence. The Port Barre, La.-based firm suffered after a major customer failed to pay its bill, which the company had already ordered large amounts of material for that account. Not just that, the cloth that was delivered for another major account, was found defective. "If you've got no raw materials, you've got no business," Stevenson said. "It eats up all your cash. A large corporation could have covered it, but we couldn't." SPINTEK GAMING: Gaming Firm Files Chapter 7 Petition in Nevada -------------------------------------------------------------- An SEC filing states that Spintek Gaming Technologies Inc. and two affiliates filed for Chapter 7 liquidation in the U.S. Bankruptcy Court of Nevada, Dow Jones reports. The firm said on Oct. 16 that it was financially drained and could not continue operations, "beyond the next few days." Spintek failed to raise adequate financing to cover its variant dues including payroll, sales expenses and marketing. The Las Vegas-based firm's Chapter 7 filing was assigned case number 00-18626. Timothy S. Cory was appointed as trustee. Spintek Gaming Technologies focuses on the developing, acquiring and marketing diversified technology, including unique gaming industry products. SUN HEALTHCARE: Shareholder Urges Appointment of an Examiner ------------------------------------------------------------ Peter C. Kern asks the U.S. Bankruptcy Court in Wilmington to appoint an examiner to, among other things, investigate and report on Sun Healthcare's financial condition and operations. Kern tells the Court that he is the owner of approximately 3.5 million shares of Sun's common stock, and as such, believes that he is Sun's largest shareholder. Kern recalls that, prior to the filing of the Debtors' bankruptcy cases, Sun, Sun's senior secured lenders and representatives of Sun's bondholders held negotiations concerning the terms of a plan of reorganization. Agreement was reached on a plan (the Proposed Plan) shortly after the bankruptcy filings and the terms are contained in Sun's 8-K filing dated October 26, 1999. Kern says that, upon information, he believes that negotiations concerning the Proposed Plan are ongoing. Such Proposed Plan eliminates Sun's existing common stockholders and certain layers of subordinated debt, without consideration. Kern points out to the Court that the Proposed Plan was negotiated without input from any organized group of Sun's common stockholders. Kern previously requested that United States Trustee appoint an official committee of equity holders but the United States Trustee declined to do so. Kern then filed a motion seeking appointment of an official committee of equity security holders. The Equity Committee Motion was denied by the court. By this motion, Kern asks Judge Walrath to appoint an Examiner in the Debtors' cases. Kern steers Judge Walrath's attention to Section 1104(c)(2) of the Bankruptcy Code which provides that, upon the request of a party of interest, and provided no trustee has been appointed, the court shall order the appointment of an examiner if "the debtor's fixed, liquidated, unsecured debts, other than debts for goods, services, or taxes, or owing to an insider, exceeds $5,000,000." Sun's fixed, liquidated, unsecured debt, other than debt for goods, services, or taxes, or owing to an insider, Kern says, far exceeds $5,000,000 and no trustee has been appointed in these cases. Under the circumstances, Kern contends, appointment of an examiner is required. Kern asks that the Court order the appointment of an examiner and direct the examiner to include in his or her report an analysis of Sun's projections including the extent to which additional revenue generation and/or cost reduction measures may be available to Sun which would improve Sun's future financial performance. Judge Walrath is scheduled to hear arguments on the Motion today, Wednesday, November 22, 2000 at 9:30 a.m. (Sun Healthcare Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 609/392-0900) THERMATRIX INC: Reports Positive EBIT in Third Quarter ------------------------------------------------------ Thermatrix Inc. (OTC: TMXIQ) announced results for the quarter ended September 30, 2000. The Company generated earnings, before reorganization items and income taxes, of $81,000, a significant improvement over the prior year period loss of $1.8 million. After $241,000 in Chapter 11 expenses and $120,000 for the accretion of preferred stock dividend requirements, the Company recorded a net loss attributable to common stock of $287,000 or $0.04 per share. This compares favorably with the net loss of $1.2 million or $0.15 per share recorded for the quarter ended September 30, 1999. Revenues for the quarter ended September 30, 2000 were $7.5 million compared to $5.5 million recorded in the comparable quarter of the prior year. The revenues for fiscal year 1999 have been restated to account for discontinued operations as a result of the appointment by Wexford Management LLC of an administrative receiver in the United Kingdom for all of the assets of the Company's U.K. subsidiaries. For the nine months ended September 30, 2000, the Company generated earnings, before reorganization items and income taxes, of $684,000, a significant improvement over the prior year period loss of $4.4 million. After $2.8 million in Chapter 11 expenses and $360,000 for the accretion of preferred stock dividend requirements, the Company recorded a net loss attributable to common stock of $2.5 million or $0.32 per share. This compares favorably with the net loss of $4.4 million or $0.57 per share recorded for the nine months ended September 30, 1999. Revenues for the nine months ended September 30, 2000 were $22.6 million compared to $15.5 million recorded in the comparable period of the prior year which were also restated for the reason mentioned above. "We are very pleased that our focus on bottom- line results continues to show progress," said Daniel S. Tedone, President and Chief Executive Officer. "However, we must undergo more improvement in all areas of our operations to ensure a healthy and stable commercial enterprise in the longer term and we are making every effort to achieve such betterment." Thermatrix is an industrial company primarily serving the global market of continuously operating facilities for a broad range of industries that include refining, chemical, steel, pharmaceutical, pulp and paper, electric utility, co-generation, and industrial manufacturing. Thermatrix provides a wide variety of air pollution control solutions, including its unique flameless thermal oxidation technology, as well as a wide range of engineered products and services to meet the needs of its clients. TWINLAB CORP: Weak 3Q Sales Prompts Moody's to Lower Ratings ------------------------------------------------------------ Moody's Investors Service Inc. downgraded the rating of Twin Laboratories Inc., a subsidiary of Twinlab Corp., a maker and marketer of vitamins and nutritional supplements. The move followed Twinlab's announcement it was investigating $8 million in missing inventory, would be discontinuing a product line and reporting weak sales for the third quarter. Twin Laboratories' $40 million of senior subordinated notes, due 2006, were downgraded to a Caa2, which means that bonds are in such poor standing that they "may be in default or there may be present elements of danger with respect to the principal or interest." The notes had been rated B3, which is below investment grade and indicates that there is little assurance that holders will receive payments on the notes. Twinlab declined comment on the downgrade. On Wednesday, Twinlab, Hauppauge, N.Y., which makes Nature's Herbs herbal supplements, among other products, announced it was delaying filing third- quarter earnings while it investigated inventory missing from its Utah warehouse where it manufacturers herbal products. The company said it was uncertain how the missing inventory would affect quarterly net income. VACATION VILLAGE: Case Summary and 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Vacation Village, Inc. 6711 Las Vegas Blvd. South Las Vegas, NV 89119 Type of Business: Hotel, Casino, Restaurants, Bars Chapter 11 Petition Date: November 17, 2000 Court: District of Nevada Bankruptcy Case No.: 00-18832 Judge: Robert C. Jones Debtor's Counsel: William L. McGimsey, Esq. 601 E. Charleston Blvd. Las Vegas, NV 89104 (702) 382-9948 Total Assets: $ 148,737,968 Total Debts : $ 21,287,249 20 Largest Unsecured Creditors: Gary & Jill Heers $ 63,897 Cheryl & Henry Nolte $ 50,000 Tim & Patti Heers $ 45,000 Nevada Power Company $ 43,732 Ron Heers $ 39,241 Cal East Foods Co. $ 30,434 Anchor Games $ 22,991 Southern Wine/Comstock $ 22,258 Associated Pathologist Lab $ 16,084 Casino Data Systems, Inc. $ 15,723 WMS Gaming, Inc. $ 15,290 Western Money Systems $ 14,706 Cheryl Nolte $ 10,000 Employers Insurance Co. of Nevada $ 9,214 Computer Bus. Solutions, Inc. $ 7,824 Nevada Beverage Co. $ 7,110 James K. Chin, Architect $ 6,797 Philip Abramowitz, Esq. $ 5,517 Bally Gaming, Inc. $ 5,445 Nevada Bell $ 5,309 VENCOR, INC: Stipulates to Relief from Stay for Negligence Claim ---------------------------------------------------------------- The Debtors consent to and have obtained Judge Walrath's stamp of approval of an agreement and stipulation with Arnett Baker to permit her to prosecute her pre-petition claim against Vencor, Inc. over alleged negligence. The Debtors have determined that there is an insurance policy issued in favor of Vencor. The Debtors agree to a modification of the automatic stay solely to the extent necessary to permit the Plaintiff to collect any judgment in respect of any recovery of damages in the underlying action from any available insurance proceeds, and to continue to assert an unsecured prepetition claim in these bankruptcy proceedings, solely for the portion of such judgment that cannot be satisfied by available insurance proceeds, to the extent that Plaintiff has previously asserted such a claim in a timely and properly filed proof of claim. The parties also agree to mutual general release of claims over the matter. (Vencor Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 609/392-0900) * Meetings, Conferences and Seminars ------------------------------------ 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 8-9, 2001 ALI-BABI Corporate Mergers and Acquisitions Renaissance Stanford Court, San Francisco, California Contact: 1-800-CLE-NEWS 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 May 17-18, 2001 RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC. Bankruptcy Sales & Acquisitions The Renaissance Stanford Court Hotel, San Francisco, California Contact: 1-903-592-5169 or ram@ballistic.com June 13-16, 2001 Association of Insolvency & Restructuring Accountants Annual Conference Hyatt Newporter, Newport Beach, California Contact: 541-858-1665 or aira@ccountry.com 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, 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 * * *