/raid1/www/Hosts/bankrupt/TCR_Public/010409.MBX
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, April 9, 2001, Vol. 5, No. 69
Headlines
ADVANCED DEPOSITION: Files Chapter 11 Petition In Massachusetts
ALADDIN GAMING: Moody's Cuts Senior Secured Debt Rating To B3
ANCHOR GLASS: Senior Notes' Ratings Down To Junk Levels
ARIEL CBO: Moody's Places Two Classes of Notes On Watch
ARMSTRONG WORLD: Creditors Retain Houlihan As Investment Banker
AVICI SYSTEMS: Founder Liquidates Shares Upon Lender's Demand
BRIDGE INFORMATION: Judge Okays $11.5 Million Retention Program
BRIDGE INFORMATION: Rolls-Out New Terminal Software
CARESIDE INC.: Recurring Losses Raise Going Concern Doubts
CLARION CBO: Moody's Cuts Senior Notes' Ratings To Ba2 & Caa1
CMI INDUSTRIES: Commences Cash Tender Offer For Notes Due 2003
CRIIMI MAE: Foresees $12 Million Net Loss For 2000
DELILAND FOODS: Case Summary and 20 Largest Unsecured Creditors
DEVLIEG-BULLARD: Retains Henry Horadan As Tax Consultant
DEVLIEG-BULLARD: Disclosure Statement Hearing Is On April 17
EINSTEIN/ NOAH: New World Agrees to Support Reorganization Plan
ENVIRONMENTAL SAFEGUARDS: Misses To Pay Debts On Time
EQUALNET COMMUNICATIONS: Court Gives Nod On $8 Mil Asset Sale
eTOYS INC.: Wilmington Court Okays Asset Sales To Three Buyers
FINOVA GROUP: Hires Gibson, Dunn & Crutcher as Lead Counsel
FRIEDE GOLDMAN: Debt Ratings Further Slip To Low-C Levels
FRONTSTEP: Q3 Losses Will Trigger Covenant Compliance Problems
GENESIS HEALTH: Taps Dietrich & Young as Litigation Counsel
GNI GROUP: Disclosure Statement Hearing Scheduled On April 23
HARNISCHFEGER: Agrees To Settle EPA Claim Outside of Bankruptcy
HENLEY HEALTHCARE: Comerica Bank Forecloses on all U.S. Assets
HENLEY HEALTHCARE: Appoints Len de Jong As New Board Chairman
HUNTWAY: Plans to Appeal NYSE's Decision to Delist Shares
ICG COMMUNICATIONS: Rule 9027 Removal Period Extended To June 12
IMPERIAL SUGAR: Equity Committee Hires Bell Boyd as Counsel
INTEGRATED HEALTH: Moves To Reject Sublease For Facility in CA
KEVCO INC.: Agrees to Sell Better Bath Division For $10 Million
LASIK VISION: Intends To File For Bankruptcy Protection
LEINER HEALTH: Moody's Junks Senior Debt Ratings
LOEWEN GROUP: Seeks Clarifying Order On Sale Purchase Agreement
MMH HOLDINGS: Disclosure Statement Hearing Set For April 10
PACIFIC GAS: Files Chapter 11 Petition in San Francisco
PACIFIC GAS: Case Summary and 20 Largest Unsecured Creditors
PACIFIC GAS: BCSI Initiates Case-Specific Newsletter Coverage
PLAINWELL: Engages Houlihan Lokey to Explore Strategic Options
PREMIER SALONS: Disclosure Statement Hearing Set For April 19
PSINET: Unit Sells Interest in Decan Groupe For Euro 38.6MM Cash
RBX CORP.: Bankruptcy Judge Approves Debt Restructuring Plan
SENSAR CORPORATION: Continues To Explore Investment Options
SERVICE MERCHANDISE: Court Fixes Time To Assume Or Reject Leases
SHOWSCAN: Disclosure Statement Hearing To Proceed On May 2
SOMNUS MEDICAL: Looking For Funds To Sustain Operations
SUNTERRA CORPORATION: Gets Court's Nod On New DIP Financing
TEK DIGITEL: Expects More Losses in 2001
TEKNI-PLEX: Debt Ratings Down To Low-B Levels
WORLD ACCESS: Noteholders Issue Default Notice
WORLDWIDE WIRELESS: Posts Increasing Losses in FY 2000
ZANY BRAINY: Creditors Set April 16 Deadline To Get New Funding
BOND PRICING: For the week of April 9-13, 2001
*********
ADVANCED DEPOSITION: Files Chapter 11 Petition In Massachusetts
---------------------------------------------------------------
Advanced Deposition Technologies, Inc. (NASDAQ: ADTC) (BSI: DTI)
said that it had filed a Chapter Eleven Bankruptcy voluntary
petition with the District Court in Boston, Massachusetts and
that Ernst and Young had resigned from their responsibilities as
financial auditors for the Company both in the United States as
well as in Spain. This decision was unanimously approved by the
ADTECH Board of Directors partially due to actions, taken or
anticipated by the Bank of Canada against the Company. The
Company believes this filing will permit the Company to continue
worldwide production and sales of its products while resolving
operational issues and overdue accounts receivable with its 81%
owned Spanish subsidiary, DNA-ADTECH S.A.
Glenn J. Walters, CEO, stated, "We remain committed to
continuing the supply of metallized film products with our
customers and we appreciate the tremendous efforts our staff has
made over the past several weeks to deal with this difficult
situation. The continued support of our staff, customers and
suppliers combined with resolving financial and operational
issues with our Spanish subsidiary will be key elements to an
expedient exit from the Chapter Eleven process."
Advanced Deposition Technologies, Inc. is a technology and
market leader for metallized thin films, coatings and components
thereof. The Company has primary product divisions in markets
for electronic capacitors, microwave food packaging and
electronic packaging materials selling in over fifty countries
along with subsidiaries in Spain and Malaysia. The Company owns
or has licenses to more than 36 patents and 10 patents pending.
On a selective basis the Company licenses its proprietary thin
film technologies and patents to partners who can accelerate
revenue and earnings growth of A.D.TECH's unique products and
technologies on a global basis.
ALADDIN GAMING: Moody's Cuts Senior Secured Debt Rating To B3
-------------------------------------------------------------
Moody's Investors Service lowered the rating of Aladdin Gaming
LLC's $410 million senior secured credit facilities to B3 from
B2, while it also lowered to Caa3 from Caa2 the senior discount
notes due 2010 of Aladdin Gaming Holdings, LLC and its co-issuer
and subsidiary Aladdin Capital Corp. All ratings are under
review for possible further downgrade.
Moody's believes that although the company is confident that it
has enough cash resources to fund current operations, these
funds are not enough to meet required debt service payments in
fiscal year 2001.
The company is heavily relying to a keep well agreement with its
sponsors, which require the latter to make cash equity
contributions to Aladdin if it fails to comply with minimum
fixed charge coverage ratios mandated by the bank agreement.
Moody's says management should consider alternatives to improve
the company's liquidity profile such as asset sales.
During its review, Moody's will focus on the recovery prospects
for both the senior secured facilities and the senior discount
notes.
Aladdin Gaming Holdings, LLC and its co-issuer and subsidiary,
Aladdin Capital Corp. developed the Aladdin casino resort on the
Las Vegas Strip. The company is based in Las Vegas, Nevada.
ANCHOR GLASS: Senior Notes' Ratings Down To Junk Levels
-------------------------------------------------------
A considerable erosion on the company's liquidity, coupled by
the weak financial condition of its parent company combined to
pull down the ratings of Anchor Glass Container Corporation.
According to Moody's, the liquidity issue is caused by the
sequential deterioration in the company's financial condition,
primarily arising from its "inability to pass through escalating
natural gas and other raw material costs, and exacerbated by no
revenue growth."
Also, increased selling and general administrative costs are
driving the reduction in Anchor's profitability, Moody's said.
The downgrade affected the following notes:
-- $50 million 9.875% senior unsecured notes due 2008, to
Caa2 from B3
-- $150 million 11.25% first mortgage notes due 2005, to
Caa1 from B2
-- senior implied rating, to Caa1 from B2
Meanwhile, Moody's said the rating downgrade also reflects the
weak financial condition of its parent company, Toronto-based
Consumers Packaging Inc. (Caa2 senior unsecured rating, on
review for downgrade)
Moody's also explained that the negative outlook is reflective
of the Anchor's credit statistics that indicates that it will
likely be under pressure for a long period.
Based in Tampa, Florida, Anchor Glass Container Corporation is a
US manufacturer of glass containers, supplying the beverage,
food producers, and consumer products manufacturers nationwide.
ARIEL CBO: Moody's Places Two Classes of Notes On Watch
-------------------------------------------------------
Two classes of notes issued by Ariel CBO, Limited were placed
last Thursday on the negative watchlist for possible downgrade
by Moody's Investors Service.
Accordingly this is due to the continued deterioration in the
credit quality of the underlying collateral portfolio and for
sizeable par loss.
Moody's noted that over 25% of the portfolio's investments have
been rated Caa1 or lower (including defaulted securities). The
Average Portfolio Rating test was being violated, Moody's said.
Moody's also said that the Maximum Cumulative Maturity Profile
Test and the Collateral Debt Securities Requirements were also
being violated.
"The deterioration of credit quality experienced by the
portfolio, as well as significant par loss, may have increased
the expected losses associated with these rated classes to the
point where the risks may no longer be consistent with the
current ratings," Moody's said.
Below are the notes placed on the negative watchlist:
-- $91 million senior notes due 2009
-- $18.5 million second priority senior notes due 2009
ARMSTRONG WORLD: Creditors Retain Houlihan As Investment Banker
---------------------------------------------------------------
Mark Felger and David Carickhoff of the firm Cozen and O'Connor,
together with Robert Drain, Andrew Rosenberg, and Alexander
Rohan of the firm Paul, Weiss, Rifkind, Wharton & Garrison,
representing the Official Committee of Unsecured Creditors of
Armstrong World Industries, Inc., asked Judge Farnan to
authorize the retention of Houlihan Lokey as its financial
advisor and investment banker in connection with the Debtors'
chapter 11 cases and in accordance with the terms of the letter
agreement dated January 11, 2001. The Creditors' Committee also
asked Judge Farnan to approve the proposed fee structure,
including the indemnification provisions set forth in the Letter
Engagement. Furthermore, the Committee requests that the
retention be made to apply retroactively to January 4, 2001, as
it was on that day that Houlihan Lokey commenced post-petition
services for the Committee.
Six weeks prior to their application for Houlihan Lokey's
retention, the firm has been active and familiarized itself with
the Debtors so as to be able to advise and assist the Creditors'
Committee in respect of these chapter 11 cases. The Committee
believes that the retention of Houlihan Lokey is in the best
interest of the creditors, the Debtors and their estates.
It is necessary to retain Houlihan Lokey to provide these
services to the Committee:
(a) Valuation analyses of the Debtors as going concerns;
(b) Valuation analyses of the Company's asbestos exposure;
(c) Review of and consultation on the potential divestiture
acquisition and merger transactions for the Company;
(d) Review of and consultation on the potential divesture,
acquisition and merger transactions for the Company;
(e) Review of and consultation on the capital structure
issues for the reorganized Company, including debt
capacity;
(f) Review of and consultation on the financial issues and
options concerning potential plans for reorganization,
and coordinating negotiations with respect thereto;
(g) Review of and consultation on the Company's operating
and business plans, including an analysis of the
company's long term capital needs and changing
competitive environment;
(h) Testimony in court on behalf of the Creditors'
Committee, if necessary;
(i) Any other necessary services as the Creditors'
Committee or its counsel may request from time to time
with respect to the financial, business, and economic
issues that may arise.
As compensation for its services, Houlihan Lokey will charge the
Debtors' estates as follows:
A Monthly Fee of $225,000.00 commencing as of January 4,
2001 for a period of one year. For the second year, the
Monthly Fee shall be $200,000.00. For the third year, the
Monthly Fee shall be $175,000.00. For the fourth year, the
Monthly Fee shall be $150,000.00. For the fifth year, the
Monthly Fee shall be $125,000.00 and a fee of $100,000.00
per month thereafter for the duration of the Debtors'
Chapter 11 cases.
Donald V. Smith, a senior managing director of Houlihan, Lokey,
Howard & Zukin, Inc., assured Judge Farnan that the firm is a
disinterested person within the meaning of the Code. However in
the interest of full disclosure, Smith reveals certain
relationships of the firm with parties or potential parties in
interest in these cases:
(i) From time to time, Houlihan Lokey has provided
services, and will likely continue to provide services to
certain creditors of the Debtors and various other parties
adverse to the Debtors in matters unrelated to these cases;
(ii) It is possible that employees of Houlihan Lokey hold
interests in mutual funds or other investment vehicles that may
own the Debtors' securities.
Although the firm may have provided, currently provides, and may
in future provide services to person who may be creditors or
equity securities holders, Donald Smith assured Judge Farnan
that such services pertain to matters unrelated to the Debtors.
(iii) Houlihan Lokey may also work with banks, insurance
providers, legal and financial institutions which may represent
or may themselves be claimants in these cases. Mr. Smith assures
Judge Farnan that none of these relationships constitutes an
interest adverse to the Creditors' Committee in the matters upon
which Houlihan Lokey is to be employed.
(iv) Houlihan Lokey currently serves as financial advisor to
the Official Committee of Unsecured Creditors of Owens Corning,
which may assert claims in these Chapter 11 cases.
Mr. Smith told Judge Farnan that if the employment of Houlihan
Lokey is approved, the firm will not accept any engagement or
perform any service in these cases for any entity or person
other than the Creditors Committee. Houlihan Lokey will,
however, continue to provide professional services to, and
engage in commercial or professional relationship with, entities
or persons that may be creditors of the Debtors or otherwise are
potential parties-in-interest in these cases provided that such
services will not relate to these cases. (Armstrong Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-
0900)
AVICI SYSTEMS: Founder Liquidates Shares Upon Lender's Demand
-------------------------------------------------------------
Avici Systems (Nasdaq:AVCI), announced that Hank Zannini, one of
the founders of Avici, was forced to liquidate 300,000 shares of
his holdings in Avici stock on a demand call from his lender,
Merrill Lynch Private Finance Inc., pursuant to a demand loan
and collateral agreement.
About Avici Systems
Avici Systems Inc., headquartered in North Billerica, Mass., is
a developer of next-generation Internet backbone platforms that
optimize and drive creation of all-optical "speed-of-light"
networks. Designed to bring packet intelligence to the core of
optical networks, Avici's technologies offer superior
scalability, resiliency and port density enabling just-in-time
bandwidth provisioning, high reliability and the quality of
service needed for carriers and ISPs to support mission-critical
applications of the future. Visit Avici's World Wide Website at
http://www.avici.com.
BRIDGE INFORMATION: Judge Okays $11.5 Million Retention Program
----------------------------------------------------------------
U.S. Bankruptcy Judge David P. McDonald approved Bridge
Information Systems Inc.'s motion to implement an $11.5 million
performance and retention program for Bridge's key employees,
according to Dow Jones. The judge noted that all involved
parties believe that the amounts in the program are reasonable.
Bridge filed for chapter 11 on Feb. 15. McDonald also approved
some other motions, including the sale of Bridge property in
Creve Coeur, Mo., for nearly $1.8 million.
Lloyd A. Palans, an attorney with Bryan Cave LLP, said that the
program covers about 7 percent of Bridge's workers. Bridge
requested that $8.5 million be approved for performance
retention and an additional $3 million for contingent payments.
Another Bridge attorney, Gregory D. Willard, told the court that
potential bidders continue to conduct due diligence on Bridge.
He said that there are several bidders interested in buying all
or part of Bridge, and Bridge hopes to receive those bids within
a few days, but did not name the interested parties. (ABI World,
April 5, 2001)
BRIDGE INFORMATION: Rolls-Out New Terminal Software
---------------------------------------------------
Bridge Information Systems Inc. (BRIDGE(R)), one of the world's
leading providers of financial information services, announced
the global launch of BridgeActive1 version 7.1 for the financial
markets. BridgeActive1 is a breakthrough in workstation
software, providing a completely open framework for data
applications.
BRIDGE now offers the most comprehensive integrated desktop
solution for the financial services industry. BridgeActive1
simplifies the desktop and makes viewing market data easier,
thereby satisfying the requests of financial institutions while
addressing technology professionals' needs. BridgeActive1
provides simultaneous access to quality information from BRIDGE
and other premium information sources, often presenting that
data in an enhanced format that is superior to what the vendors
themselves provide. Financial institutions with numerous
platforms now have the benefit of relying on a single front-end.
BridgeActive1's Visual Linking, using standard Microsoft Visual
Basic for Applications (VBA) and fully open programmable
controls, allows IT departments to easily build custom sheets,
function keys and navigation bars to quickly access favorite
displays and content.
"We are pleased to work with BRIDGE, a long-time supporter
of Microsoft technology, to enhance its existing workstation
offerings for the financial services industry," said Bill
Hartnett, Microsoft's General Manager, Global Financial
Services.
"The integration of market data and market functionality on a
user's desktop is long overdue. By using the power of
Microsoft's Visual Basic for Applications, BridgeActive1
empowers all users with added flexibility and extensibility."
David Roscoe, BRIDGE President said, "The launch of
BridgeActive1 represents the culmination of a two-year global
development effort to make this superior desktop solution a
reality. BridgeActive1 is the major 'value' component to our
global desktop strategy. We view this as a tremendous
opportunity for BRIDGE to capitalize on the financial
marketplace's requirement for a truly open architecture."
"BridgeActive1 is the only product of its kind, offering
connectivity to all major platforms, open COM API (Component
Object Model Application Programming Interface) and a 100%
COM/ActiveX compliant container and controls in addition to
Microsoft's VBA," said Matt Brennan, BRIDGE Global Product
Manager, Open Workstation, based in Asia. "BridgeActive1
provides the infrastructure to simplify the desktop."
BridgeActive1 is built on the revolutionary and completely
open COM API known as the Desktop Integration Framework (DIF).
This open architecture and mutliplatform design allows
BridgeActive1 users to simultaneously and seamlessly access
information from BridgeFeed, Triarch and TIB. With the addition
of the new version of Bridge Trading Room System (BTRS) release
4.0, BridgeActive1 will be the only market data desktop with the
ability to connect to all major platforms. In addition, users
can write custom controls to DIF and access all available data
regardless of its source and publish information into the
datalayer, making proprietary information available to any
control on the desktop.
"BridgeActive1 was built in conjunction with a number of
strategic development partners, to ensure it would meet the
demanding needs of the financial community," said Harry Temkin,
Executive Vice President, Product Marketing/Development. "We
expect to meet our goal of installing 8,000 BridgeActive1
workstations by the end of 2001."
BridgeActive1 includes a full suite of premium quality
controls such as: Analytics; Athena; Full Quote; IndexWatch;
MarketWatch; OptionWatch; Ticker; Time & Sales; DynaQ;
ZoomDynaQ; and WebBrowser for viewing market data. BridgeActive1
also introduces the latest release of Fixed Income analytic
controls.
"This release is the ideal showcase for our latest offering of
pre-trade analytics," Temkin added. The addition of Asset Swaps
analysis, Eurostrip hedging and International CTD support will
successfully broaden an already extensive application suite that
references the industry's highest quality database of over three
million cash instruments."
Standard packaging can be installed to provide out of the
box, easy navigation through the in-depth coverage provided by
BRIDGE and its subsidiary Telerate. These navigation
capabilities are available across each major market sector and
global region. (Bridge Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
CARESIDE INC.: Recurring Losses Raise Going Concern Doubts
----------------------------------------------------------
Careside, Inc. is focused on designing products intended to
perform routine diagnostic blood tests in doctors' offices,
hospital rooms, patient homes or anywhere a patient is receiving
medical attention. Careside's first product in development is a
compact portable device with related disposables that performs
chemistry, electrochemistry, immunochemistry and coagulation
testing.
Arthur Andersen LLP, auditors for the firm has rendered an
auditors opinion citing the fact that the Company has suffered
recurring losses from operations and has accumulated a
significant deficit that raises substantial doubt about its
ability to continue as a going concern.
CLARION CBO: Moody's Cuts Senior Notes' Ratings To Ba2 & Caa1
-------------------------------------------------------------
Moody's Investors Service lowered two classes of notes issued by
Clarion CBO, Limited as its growing credit risks have gone
beyond the limit of the previous ratings.
Moody's said the growing credit risks of the notes is due to the
deterioration of Clarion's collateral portfolio, which includes
a number of defaulted securities -- a large number of it rated
Caa1 or lower.
Also, the CBO has violated both the senior Par Value Test and
the second priority Par Value Test. The Average Portfolio
Ratings Test, Maximum Cumulative Maturity Profile Test, and
Collateral Debt Securities Requirements were also violated,
Moody's said.
Below are the notes affected by the downgrade:
-- $51 million second priority senior notes due 2009, to
Ba2 from Baa3
-- $10 million senior subordinated notes due 2009, to Caa1
from B1
Both notes will remain under watch negative for possible further
downgrade.
CMI INDUSTRIES: Commences Cash Tender Offer For Notes Due 2003
--------------------------------------------------------------
CMI Industries, Inc. commenced a cash tender offer for all $75.3
million principal amount of its outstanding 9-1/2% Senior
Subordinated Notes due 2003. In connection with the Offer, CMI
is also soliciting consents for the elimination of certain
covenants and events of default in the indenture.
The offer expires on Thursday, May 3, 2001 at 12:00 midnight,
New York City time, unless extended or previously terminated.
The consent solicitation expires on Friday, April 20, 2001 at
5:00 p.m., New York City time, unless extended or earlier
terminated. Payments for validly tendered Notes will be made
promptly following the expiration of the offer. The purchase
price is $160 per $1,000 principal amount of Notes and the
consent payment is $20 per $1,000 principal amount of Notes for
a total consideration of $180 per $1,000 principal amount of
Notes.
Any holder who tenders Notes also must consent to the proposed
amendments. Holders will not be able to consent to the proposed
amendments without tendering their Notes. Notes tendered after
the consent date, but before the expiration date, will only be
entitled to the purchase price.
The offer is contingent upon specified conditions, including the
receipt of consents of holders of at least 90% of aggregate
principal amount of the outstanding Notes and the receipt of
requisite financing. The Company is currently in discussions
with lenders to provide a new senior secured credit facility,
but has not received a firm commitment.
On April 3, 2001, the Company filed its Annual Report for the
fiscal year- ending December 30, 2000 on Form 10-K with the SEC
which included a going concern opinion from the Company's
auditor. As of today, the Company has not made its scheduled
semi-annual interest payment on the Notes and has entered the
30-day grace period with respect to such payment. The lender
under the Company's existing credit facility has granted the
Company a waiver in respect of the cross-default provisions of
the existing credit facility due to the failure of the Company
to make the semi-annual interest payment due April 2, 2001.
Subject to applicable law, CMI may amend, extend or terminate
the offer at any time. The offer is made only upon, and is
subject to, the terms and conditions contained in the Offer to
Purchase and Consent Solicitation and the Consent and Letter of
Transmittal, both dated April 5, 2001.
CMI Industries, Inc., and its subsidiaries manufacture textile
products that serve a variety of markets, including the home
furnishings, woven apparel, elasticized knit apparel and
industrial/medical markets. Headquartered in Columbia, South
Carolina, the Company operates manufacturing facilities in
Clarkesville, Georgia; Clinton, South Carolina; Greensboro,
North Carolina; and Stuart, Virginia. The Company had net sales
from continuing operations of $194.7 million in 2000.
The complete terms of the offer are contained in the Offer to
Purchase and Consent Solicitation documents dated April 5, 2001.
Note holders are urged to read the documents carefully.
Questions or requests for assistance concerning the offer should
be directed to Banc of America Securities LLC, which will act as
the exclusive dealer manager for the offer, at (888) 292-0070
(toll-free). Requests for additional copies of documents may be
directed to the information agent, D.F. King & Co., Inc. at
(800) 207-3159 (toll-free). The depositary agent for the Offer
is Chase Manhattan Bank/Chase National Corporate Services.
CRIIMI MAE: Foresees $12 Million Net Loss For 2000
--------------------------------------------------
Unless it must adjust the impairment of certain commercial
mortgage-backed securities due to recently discovered underlying
loan defaults, Criimi Mae Inc. expects to recognize a net loss
of $12 million for 2000, compared with a loss of $132 million in
1999, according to a non-timely Form 10-K filed Tuesday with the
Securities and Exchange Commission. Meanwhile, the commercial
real estate investment trust is working "diligently" with a
group of lenders to finalize documentation for a loan that will
provide the reorganizing company with funds to emerge from its
two and one-half year old chapter 11 case, said Criimi Mae
spokesman James T. Pastore. (ABI World, April 5, 2001)
DELILAND FOODS: Case Summary and 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Deliland Foods Corporation
196-19B Emmet Street
Newark, NJ 07114
Chapter 11 Petition Date: April 5, 2001
Court: District of Delaware
Bankruptcy Case No: 01-01303-jkf
Judge: Hon. Judith K. Fitzgerald
Debtor's Counsel: Victoria Watson Counihan, Esq.
Greenberg Traurig, LLP
1000 West Street, Suite 1540
Wilmington, DE 19801
(302)661-7000
Total Assets: $3,598,490
Total Debts: $4,191,913
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Leali Holdings $ 370,000
West Middlesex Road
Wheatland, PA 16161
Contact: John Leali
Carolina Turkeys Trade Debt $ 115,628
City of Philadelphia Utilities $ 95,085
Water Revenue Bureau
Green Bay Dressed Beef Trade Debt $ 65,550
Smithfield Trade Debt $ 63,543
H&S Provisions, Inc. Trade Debt $ 60,402
Sunnyside Foods, Inc. Trade Debt $ 56,006
Schmalz's European Trade Debt $ 53,213
Prov. Inc.
Peco Energy Utilities $ 49,680
Brewster Dairies Trade Debt $ 49,569
Excel Corp. Trade Debt $ 48,041
Losurdo Foods, Inc. Trade Debt $ 43,644
Armour Swift (ConAgra Foods) Trade Debt $ 39,674
Robert Sgromolo $ 37,359
Lundy Packing Co. Trade Debt $ 34,697
Berk Lombardo Packing Trade Debt $ 33,454
EMR Innovations Financial $ 32,935
Software
Gusto Packing Co., Inc. Trade Debt $ 31,878
Schreiber Foods, Inc. Trade Debt $ 31,671
Dilworth, Paxson, Legal Services $ 30,775
Kauffman & Kalish
DEVLIEG-BULLARD: Retains Henry Horadan As Tax Consultant
--------------------------------------------------------
By order entered on March 20, 2001 by the US Bankruptcy Court,
Northern District of Ohio, Eastern Division, Devlieg-Bullard,
Inc. was authorized to retain and employ Henry A. Horadan, Tax
Consultant. for the debtor.
DEVLIEG-BULLARD: Disclosure Statement Hearing Is On April 17
------------------------------------------------------------
Devlieg-Bullard, Inc. filed its liquidating plan of
reorganization and the related Disclosure statement. A hearing
will be held at the U.S. Bankruptcy Court, Northern District of
Ohio, Akron, Ohio, on April 17, 2001 at 10:00 AM on a motion to
consider approval of the Disclosure Statement.
Shawn M. Riley and Sean D. Malloy of the firm McDonald, Hopkins,
Burke Haber Co., LPA, Cleveland , Ohio, are attorneys for the
debtors.
EINSTEIN/ NOAH: New World Agrees to Support Reorganization Plan
---------------------------------------------------------------
New World Coffee-Manhattan Bagel, Inc. (Nasdaq: NWCI) entered
into an agreement with the Trustee of the Boston Chicken Plan
Trust, the majority stockholder of Einstein/Noah Bagel Corp. to
support confirmation of the Plan of Reorganization filed by the
Trustee in the Chapter 11 cases of ENBC and Einstein/Noah Bagel
Partners, L.P. (ENBP), now pending in the United States
Bankruptcy Court for the District of Arizona. In addition, New
World announced that it has also entered into an agreement with
one of the Trustee's proposed exit lenders for the Plan, to
confirm New World's support for the Plan.
The Plan was filed by Gerald Smith in his capacity as Trustee of
the Boston Chicken Plan Trust, which arose from the Boston
Market bankruptcy proceeding. Mr. Smith, as Trustee, owns 51% of
the outstanding common stock of ENBC. The Plan delivers more
value to the creditor stakeholders of ENBC than they would
receive under the asset sale contract presently before the
Court, as the Plan proposes to pay in full or reinstate all
allowed creditor claims in the ENBC and ENBP cases. The Plan
also benefits the public stockholders of ENBC by granting them
an ownership stake in the reorganized company if it is approved,
as compared to receipt of no consideration or value under the
proposed asset sale.
Under the Plan, holders of ENBC's 7.25% Debentures due June 2004
shall be given the option of converting to equity in the
reorganized ENBC or having their bonds reinstated through
payment of all accrued interest and future compliance with the
terms of the Indenture. New World owns and controls
approximately $61.5 million of such Debentures.
Pursuant to New World's agreement with one of the Trustee's
proposed exit lenders, New World agreed to convert its
Debentures to equity in reorganized ENBC. Under the conversion
price and formulae in the Plan, New World anticipates receiving
approximately 3.9 million shares of reorganized ENBC's new
common stock.
Smith and New World expect that substantially all present
employees and officers of the reorganized ENBC and ENBP will
continue to work for the reorganized companies.
New World Coffee-Manhattan Bagel, Inc. currently franchises,
licenses or owns stores under its four brands in 26 states and
Washington, D.C. The Company is vertically integrated in bagel
dough manufacturing and coffee roasting, with plants in New
Jersey, California and Connecticut.
ENVIRONMENTAL SAFEGUARDS: Misses To Pay Debts On Time
-----------------------------------------------------
Environmental Safeguards, Inc. is engaged in the development,
production and sale of environmental remediation and recycling
technologies and services to oil and gas industry participants,
waste management companies and other industrial customers,
through its wholly-owned subsidiaries National Fuel & Energy,
Inc. and OnSite Technology, L.L.C. OnSite has four wholly-owned
subsidiaries, OnSite Environmental UK Ltd., OnSite Venezuela,
Inc., OST Equipment Leasing L.L.C. and OnSite Mexico, L.L.C.,
and two 50%-owned subsidiaries, OnSite Colombia, Inc. and OnSite
Arabia, Inc., through which it operates in foreign locations.
The environmental remediation and recycling services that are
provided involve the removal of hydrocarbon contaminants and
valuable drilling fluids from soil using indirect thermal
desorption remediation and recycling technology. Services are
provided on-site or at the central location to which the
customer hauls the contaminated materials.
Since its inception, the Company has expended a significant
portion of its resources to develop markets and industry
awareness of the capabilities of its indirect thermal desorption
remediation and recycling/ reclamation process. The Company's
efforts have been focused primarily on hydrocarbon soil
contamination inherent in oil and gas exploration activities.
The Company's efforts to develop markets and produce equipment
have required significant amounts of capital including long-term
debt secured by the Company's ITD units and related ITD
technology. The Company has incurred recurring net losses and
has been dependent on revenue from a limited customer base to
provide cash flows. The Company completed its most significant
service contract in December 2000 and is currently exploring
ways to replace the revenue. During the year ended December 31,
2000 the Company experienced a tightening of cash reserves and
took actions to delay payments on its senior secured debt. The
delay of principal and interest payments of approximately
$1,233,000 in 2000 will result in the Company's payment of
approximately $3,825,000 of principal and interest payments on
senior secured debt in 2001. These 2001 debt payments and
expected continuing losses will further strain the Company's
liquidity. In addition, as of December 31, 2000, the Company's
current liabilities exceeded its current assets by $258,000.
These factors raise substantial doubt about the Company's
ability to continue as a going concern.
During the years ended December 31, 2000, 1999 and 1998, the
Company's largest customer accounted for 50%, 58% and 71% of
revenue, respectively. On January 2, 2001, the contract with
this customer expired without renewal.
Effective March 1, 2001, the Company entered into an agreement
with its primary lenders and holders of its outstanding
preferred stock that resulted in the Company's continued
compliance with covenants provided in the senior secured debt
and preferred stock agreements and with increased financial
flexibility to pursue new market opportunities for its ITD
technology. The agreement provides for a three-month deferral of
all principal and interest payments (both currently due and
previously deferred) due in March on the Company's senior
secured debt.
At the end of the deferral period, if the Company is engaged in
good faith negotiations for the sale of the Company, the sale of
a subsidiary, the sale of substantially all of the company's
assets, or the sale of substantially all assets of its
subsidiaries, then all deferrals will be extended to July 8,
2001, and from month to month thereafter until the consummation
of the financing transaction or the termination of good faith
negotiations. Also, Environmental Safeguards received a three-
month deferral on preferred dividends due in March, with a
possible continuing deferral on the same basis as the senior
secured debt. The agreement was designed to allow the Company to
conserve working capital while strategic plans are being
considered and pursued. In exchange for the deferral of senior
secured debt and preferred stock dividend payments, the
conversion price of the Series D Preferred Stock was reset at
the default rate of $0.37 per share. This change in the
conversion price would result in further dilution to the
Company's stockholders in the event that the Series D Preferred
Stock is converted into its Common Stock. Environmental believes
the value attributable to the change in conversion feature
should not have a material effect on its financial position,
results of operations and cash flows.
EQUALNET COMMUNICATIONS: Court Gives Nod On $8 Mil Asset Sale
-------------------------------------------------------------
By order entered on March 23, 2001, by the US Bankruptcy Court,
Southern District of Texas, Houston Division, the court
approved the Sale Motion of Equalnet Communications Corp.,
EqualNet Corporation and USC Telecom, Inc. with CCC GlobalCom
Corp., Inc.
The debtors agreed to a proposed purchase price not to exceed $8
million. The purchase price provides for the assumption of up to
$7.5 million of RFC Capital Corporation's claim and a cash
payment of $500,000 together with the debtors' assumption and
assignment to CCC of certain unexpired leases and executory
contracts.
eTOYS INC.: Wilmington Court Okays Asset Sales To Three Buyers
--------------------------------------------------------------
A Delaware bankruptcy court approved the sale of eToys Inc.'s
assets at distribution centers to three buyers, according to
Reuters. The failed online toy store has yet to sell its
inventory. eToys, which filed for bankruptcy protection last
month, will sell furniture, fixtures and equipment at a
distribution center in Blairs, Va. to Unique Industries Inc. for
$360,000. Skechers USA plans to buy furniture, fixtures and
equipment at eToys' distribution center in Ontario, Calif., for
$835,000, while Pennyworth Sales Inc. will buy the same type of
assets at eToys' headquarters in Los Angeles. (ABI World, April
5, 2001)
FINOVA GROUP: Hires Gibson, Dunn & Crutcher as Lead Counsel
-----------------------------------------------------------
Gibson, Dunn & Crutcher is an international law firm, of more
than 700 attorneys, with extensive expertise and experience in
the fields of debtors' and creditors' rights and business
reorganizations under chapter 11. Gibson Dunn has represented
the FINOVA Group Inc., and related affiliates since 1986, in
matters such as mergers and acquisitions, public and private
offerings of securities, tax issues, labor and employment
matters and various litigations. In November 2000, FINOVA
employed Gibson Dunn in connection with the restructuring of
their bank loans and debt securities, including the possible
commencement and prosecution of the chapter 11 cases. As a
result of the prepetition services, Gibson Dunn is thoroughly
familiar with FINOVA's business operations, financial affairs
and corporate structure. In addition, the firm has assisted
FINOVA in exploring several strategies for proceeding through
and exiting from the chapter 11 cases. Such experience with
FINOVA's affairs, argued, Mr. Collins, will enable Gibson Dunn
to provide the most efficient and cost effective services
available during the cases, facilitating reorganization efforts.
Specifically, FINOVA sought to employ Gibson Dunn to:
(a) provide legal advice in respect to FINOVA's powers and
duties as debtors in possession;
(b) take all necessary action to protect and preserve
FINOVA's estates, including any litigation in furtherance of
this goal;
(c) prepare all necessary motions, applications, answers,
orders, reports and papers in connection with the administration
of the estates;
(d) negotiate and prepare a plan or plans of reorganization
and all related documents and to prosecute the plan through the
confirmation process; and
(e) perform all other necessary legal services in
connection with the chapter 11 cases.
During the 14-month period preceding commencement of these
cases, FINOVA paid Gibson Dunn $4,990,474.65 for services
performed and expenses incurred. That amount may not include
fees and costs incurred immediately prior to the petition
because they have not yet been posted in Gibson Dunn's
accounting system. FINOVA paid Gibson Dunn a $200,000 retainer
to cover unbilled fees and costs and to be held as security for
payment of the postpetition services and related expenses in
connection with these chapter 11 cases.
Gibson Dunn's professionals will bill at their customary hourly
rates:
Partners and of counsel $440 to $620
Associates $215 to $420
Legal Assistants $50 to $250
FINOVA indicated that it will separately seek approval to retain
the Delaware law firm Richards, Layton & Finger to serve as co-
counsel in the Chapter 11 cases. FINOVA has discussed a division
of responsibilities with both firms. The law firms state they
will make every effort to avoid unnecessary duplication of
services while obtaining maximum advantage from their respective
expertise, knowledge of Debtor's business and proximity to this
Court. In addition, FINOVA may employ additional law firms to
serve in special counsel capacities to handle specific issues
that will not be addressed by the other two firms.
Jonathan M. Landers Esq., leads the team of Gibson Dunn lawyers,
assisted by Kathryn A. Coleman, Esq., Janet M. Weiss, Esq.,
Courtney A. Schael, Esq., Lois F. Dix, Esq., M. Natasha
Labovitz, Esq., and Craig A. Bruens, Esq.. Mr. Landers assures
the Court that, following a search of its computerized client
database, Gibson Dunn represents no other entity in FINOVA's
chapter 11 cases and is a "disinterested person" as that term is
defined in section 101(14) of the Bankruptcy Code. Mr. Landers
discloses tat Gibson Dunn has represented certain of FINOVA's
present and former directors and officers, all of who have been
named as defendants in a consolidated securities class action
lawsuit pending in U.S. Court for the District of Arizona
captioned In re FINOVA Group Inc. Securities Litigation No. CIV-
00-619-PHX-SMM. The plaintiffs in that case assert claims under
Sections 11, 12 and 15 of the Securities Act of 1933 and
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
The allegations relate to FINOVA's March 27, 2000 announcement
that a $70,000,000 loan by its distribution and finance channel
line of business would be written off.
Accordingly, pursuant to 11 U.S.C. Secs. 327(a) and 328(a) and
Rule 2014(a) of the Federal Rules of Bankruptcy Procedure,
FINOVA requested that Judge Walsh approve the employment of
Gibson Dunn under a general retainer. (Finova Bankruptcy News,
Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900)
FRIEDE GOLDMAN: Debt Ratings Further Slip To Low-C Levels
-------------------------------------------------------------
Barely a month since its last downgrade, Friede Goldman Halter,
Inc. suffered another downgrade from Moody's Investors Service
Thursday, sliding down even further in the rating ladder.
Friede Goldman's $185 million par value of 4.5% convertible
subordinated notes due 2004 slipped to Ca from Caa3. Also, the
company's senior implied rating deteriorated to Caa2 from Caa1,
while its senior unsecured issuer slid to Caa3 from Caa2.
It has been two years now since the company was placed on rating
watch negative, and has been downgraded several notches since
then. Its recent downgrade came in March 8 this year.
The company continues to suffer from a depleted treasury and
currently faces a looming default on its $4.2 million note
coupon payment on April 14. This due date is already a 30-day
extension from the March 14 original due date.
Friede Goldman says it is in serious negotiations to arrange
intermediate term senior secured debt funding in order to raise
sufficient liquidity to operate business in a stabilized manner.
But Moody's believe that, assuming the negotiations are
successful, the financing may not close before the April 14
expiration of the 30-day grace period.
According to Moody's, the company's woes stem from long-standing
cost overruns and delays encountered on four deepwater semi-
submersible drilling rig newbuild projects. As a result, the
company is suffering severe liquidity shortfalls.
The company, however, has had encouraging success in building
its non-energy sector order book. But the problem in its energy
sector segment have offset that success.
"The company's weak liquidity position has the dominant impact
on its near term prospects," Moody's said.
Friede Goldman Halter, Inc. is headquartered in Gulfport,
Mississippi. It is currently involved in two advanced semi-
submersible rigs each for Petrodrill and Ocean Rig, the four
ill-fated projects causing the present woes of the company.
FRONTSTEP: Q3 Losses Will Trigger Covenant Compliance Problems
--------------------------------------------------------------
Frontstep, Inc. (Nasdaq: FSTP), a leading global provider of
business systems for midsize distributors and manufacturers,
announced that revenues and earnings for the fiscal third
quarter ended March 31, 2001 will fall significantly short of
previous expectations. The company cited delays in closing new
customer agreements due to changing global economic conditions
as the main reason for the unexpected shortfall.
Revenues for the fiscal third quarter are now expected to be
approximately $27 million. As a result, the company now expects
to report a loss from operations for the quarter of between
$0.55 and $0.65 per share, exclusive of special charges.
"The results we expect to report for the third quarter are
clearly a disappointment for us. We believe that the revenue
shortfall is a result of timing, and we will capture most of it
in later periods. But that does not change our situation with
respect to the third quarter," said Stephen A. Sasser, president
and chief executive officer. "Like many software companies, our
sales tend to occur predominantly at the end of the quarter when
customers typically make commitments and execute agreements.
However, late in this quarter many customers, themselves
experiencing the effects of the softening economy, elected to
postpone spending decisions. As a result, a significant portion
of the revenue we would have recognized simply did not
materialize. What makes it more frustrating is that in most
cases customers had already selected Frontstep as the software
vendor of choice. We are encouraged by the fact that the
pipeline of new business remains strong.
"Frontstep has, over the past 18 months, been successfully
transitioning from a narrowly-focused provider of enterprise
resource planning (ERP) software into a provider of innovative
network-centric solutions that allow companies to streamline and
automate their business processes including those that involve
customers, sales and channel partners, and suppliers," added
Sasser. "Further, we believe the validity of our strategy was
evident in the company's results for the quarter ended December
31, 2000. During that period, the company demonstrated strong
revenue performance based on our new product vision.
"While it is abundantly clear that the economy has slowed, what
is less clear is the magnitude of the slowdown or its duration.
To ensure the company is financially capable of continuing our
transition and product advancements, we have determined the need
to restructure our operations worldwide, and today, we have
begun to take the necessary actions. These actions will result
in a significantly lower cost structure without compromising our
ability to execute our strategy," Sasser concluded.
The company stated the restructuring efforts are expected to
yield cost reductions in the $26-28 million range over the next
few months, which represents a reduction of 22-25% of the
company's operating costs. The actions taken by the company
include a reduction of approximately 20% of the company's
worldwide workforce, closing of certain facilities, termination
of certain products and programs that are not critical to the
company's mission, and the write-off of certain accounts
receivable and other assets. As a result, Frontstep expects to
take total restructuring charges and asset write-offs of between
$10-12 million, pre-tax, primarily in the third quarter. Of this
amount, approximately $8 million are non-cash charges.
The company also noted that expected results for the quarter
would place it in noncompliance with certain covenants of its
credit facility and that it will have additional near-term cash
availability requirements. However, preliminary discussions with
the company's lenders have been positive and discussions are
ongoing. The company believes that its lenders will continue to
support them during this challenging period.
Outlook
Sasser said he remains confident about the future of Frontstep.
"The third quarter results, while not something we anticipated,
are the result of economic conditions -- not a result of our
products or our ability to deliver. The restructuring we have
announced today will make us leaner without compromising our
ability to meet the needs of our customers or our ability to
continue towards our goal of becoming the leading provider of
business software solutions to midsize companies. We expect that
the restructuring will allow us to return to profitability and
achieve positive operating cash flow in the near term."
About Frontstep
With more than 4,000 customers worldwide and over 20 years of
industrial experience, Frontstep is a leading global provider of
e-business, supply chain and enterprise management software for
midsize distributors and manufacturers. Headquartered in
Columbus, Ohio, Frontstep provides the products, expertise and
access to online communities to execute a collaborative business
strategy, from automating internal business processes to
connecting with customers and suppliers over the Internet.
Frontstep delivers a comprehensive suite of software and
services, including enterprise management, CRM, online customer
sales and service, Web-driven channel management, supply chain
management, e-procurement, collaboration and integration. For
more information on Frontstep, visit http://www.frontstep.com.
Frontstep is a trademark of Frontstep Solutions Group, Inc. All
other trademarks mentioned are the property of their respective
owners.
GENESIS HEALTH: Taps Dietrich & Young as Litigation Counsel
-----------------------------------------------------------
Pursuant to the Ordinary Course Order, Dietrich & Young, P.C.
was retained by Genesis Health Ventures, Inc. & The Multicare
Companies, Inc. as of the Commencement Date. As of December
2000, Dietrich & Young's monthly billings to the Debtors have
exceeded the Fee Cap of $25,000 per month governing the
employment of ordinary course professionals. Moreover, the
Debtors anticipate that Dietrich & Young's monthly billing
will continue to consistently exceed the Fee Cap.
Accordingly, the Debtors sought and obtained the Court's
approval for the employment of Dietrich & Young as their Special
Litigation Counsel nunc pro tunc to December 1, 2000, pursuant
to section 327(e) of the Bankruptcy Code, to perform accounts
receivable and general litigation services that are required to
effectively and efficiently operate their businesses during the
pendency of GHV's chapter 11 cases.
The Debtors submitted that the requested employment of Dietrich
& Young is necessary for the uninterrupted and effective
continuity of operations.
Moreover, the Debtors believe that the firm is both well
qualified and uniquely able to represent them as special
litigation counsel during the pendency of their chapter 11 cases
in a most efficient and timely manner.
Dietrich & Young has been employed by GHV as special counsel to
perform litigation services since 1995. During the five years,
the Debtors represent, Dietrich & Young has become thoroughly
familiar with GHV's accounts receivable and general litigation
issues. The Debtors find that accordingly, Dietrich & Young has
the necessary background to effectively deal with many of the
potential accounts receivable and general litigation issues and
problems which may arise in connection with the operation of the
Debtors' businesses during these chapter 11 cases. More
specifically, Dietrich & Young has prosecuted and is continuing
to prosecute on behalf of the Debtors accounts receivable and
other lawsuits in federal and state courts, in addition to
routinely handling collection of accounts receivable claims
before federal and state healthcare agencies.
Therefore, the Debtors believe that the continued employment of
Dietrich & Young is in the best interests of the Debtors, their
creditors, and all parties in interest.
The Debtors told the Court that in their intention, the
functions to be performed by Dietrich & Young will not be
duplicative of those of Weil, Gotshal & Manges LLP, Richards,
Layton & Finger, P.A., and all other parties retained by the
Debtors. Specifically, the Debtors intend that Dietrich & Young
will not undertake any representation of them related to the
prosecution of these chapter 11 cases, including with respect to
the negotiation, proposal, and prosecution of any plan of
reorganization.
The Debtors proposed to pay Dietrich & Young its customary
contingency fee rate, as set forth in the Dietrich Affidavit:
Attorneys:
Brian Scott Dietrich $225.00 per hour
George Guyer Young, III $225.00 per hour
Shareholders/Attorneys $225.00 per hour
Associates (non-share holders) $185.00 per hour
Consulting Attorneys
(non-member referral attorneys) $225.00 per hour
Paralegals $85.00 per hour
Law Clerks $85.00 per hour
Administrative Staff $65.00 per hour
Dietrich & Young intends to apply to the Court for allowance of
compensation and reimbursement of expenses in accordance with
applicable provisions of the Bankruptcy Code, the Bankruptcy
Rules, the United States Trustee Guidelines, and the Local
Rules.
Within 90 days prior to the Commencement Date, Dietrich & Young
received from the Debtors approximately $70,198.88 for services
rendered and $2,640.15 in reimbursement of related expenses.
Dietrich & Young has a prepetition claim against the Debtors in
the approximate amount of $33,047 for unpaid services rendered
in respect of the Debtors' litigation matters.
Dietrich & Young submitted that notwithstanding the claim, it
does not represent or hold any interest adverse to the Debtors
or their estates with respect to the matters on which Dietrich &
Young is to be employed as stated in the affadivit of Mr. Brian
Scott Dietrich, Esquire, a member of Dietrich & Young, P.C. Mr.
Dietrich believes that Dietrich & Young is eligible for
employment by the Debtors pursuant to Section 327(e) of the
Bankruptcy Code and Bankruptcy Rule 2014. (Genesis/Multicare
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
GNI GROUP: Disclosure Statement Hearing Scheduled On April 23
-------------------------------------------------------------
On March 23, 2001, The GNI Group, Inc., et al. filed a joint
plan of reorganization and a Disclosure statement with respect
to such plan. A hearing will be held on April 23, 2001 at 10:30
AM in the US Bankruptcy Court for the Southern District of
Texas, Houston Division to consider he Disclosure Statement.
Objections must be filed with the court on or before April 17,
2001. Attorneys for the debtors are Annette W. Jarvis of
LeBoeuf, Lamb, Greene & MacRAE, LLP, Salt Lake City, Utah and W.
Steve Smith and Blanche A. Duett of W. Steve Smith, PC, Houston,
Texas.
HARNISCHFEGER: Agrees To Settle EPA Claim Outside of Bankruptcy
---------------------------------------------------------------
The United States Department of Justice on behalf of the
Environmental Protection Agency filed a proof of claim (No.
10284) against Joy Technologies Inc. (d/b/a Joy Mining
Machinery), pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. Sections
9601-9675, involving two sites: Breslube-Penn Superfund Site
and Route 52 Superfund Site.
In their Second Omnibus Claims Objection, the Harnischfeger
Industries, Inc. Debtors objected to various claims including
Claim No. 10284.
After exchanging factual information relating to the Breslube-
Penn Superfund Site with the goal of reaching a settlement, and
due consideration of the matter, the United States and Debtor
agreed that settlement efforts are hindered by the absence of
factual information that will not become known until after the
conclusion of this bankruptcy proceeding.
As a result, the Parties desire that their respective claims and
defenses relating to the Breslube-Penn Superfund Site not be
determined or adjudicated in this bankruptcy proceeding, but
rather be preserved and resolved in due course after the
conclusion of this proceeding and outside of this bankruptcy
proceeding.
The Parties agreed and stipulated, and sought the Court's
approval to their stipulation that, the Debtor's liability, if
any, with respect to the Breslube-Penn Superftnid Site will be
determined by non-bankruptcy law and procedure, and no plan
confirmed in the Debtor's case may discharge the Debtor of any
such liability.
The Stipulation says that the Debtor disputes any such
liability, and the Parties acknowledge that this Stipulation and
Order is executed as a matter of administrative convenience, and
shall not be used by either Party as evidence bearing on any
liability related to the Breslube-Penn Superfund Site.
The Stipulation provides that the United States will not attempt
to pursue the Debtor with regard to the Breslube-Penn Superfund
Site in the bankruptcy case, by filing a proof of claim or
otherwise, and the Debtor will take no action in this bankruptcy
proceedings that is intended to resolve the United States'
claims related to the Breslube-Penn Site.
The Stipulation further provides that Claim No. 10284 is deemed
withdrawn insofar as it relates to the Breslube-Penn Superfuind
Site, and Debtor's objection to Claim No. 10284 is deemed
withdrawn insofar as it relates to the Breslube-Penn Site.
The parties expressly agreed that the Stipulation and Order only
pertains to the United States' claims related to the Breslube-
Penn Superfund Site, while other matters are addressed in Claim
No. 10284, and such other matters and the amounts claimed are
not affected by this Stipulation and Order. (Harnischfeger
Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
HENLEY HEALTHCARE: Comerica Bank Forecloses on all U.S. Assets
--------------------------------------------------------------
Henley Healthcare Inc. (OTCBB:HENL) has previously defaulted on
its indebtedness owed to Comerica Bank - Texas. Comerica Bank -
Texas has now foreclosed on substantially all of the Company's
U.S. operating assets, and those assets have been sold to a
third party for approximately $900,000. The proceeds of this
sale have been used to reduce the indebtedness owed by the
Company to Comerica Bank. These assets include but are not
limited to Fluidotherapy, Cybex, Tru-Trac and the MicroLight
Laser 830. The Company anticipates that Comerica Bank will also
foreclose on and sell the Company's Sugar Land and Belton
facilities and its accounts receivable in the near future. The
proceeds from those sales will also be used to reduce the
Company's indebtedness to Comerica Bank.
In addition to the remaining indebtedness owed to Comerica Bank,
the Company has a substantial amount of outstanding indebtedness
owed to Maxxim Medical and unpaid vendors. In addition the
Company may incur significant monetary penalties under the terms
of its Series B and C Preferred Stock due to the delisting of
its common stock. The Company is actively seeking additional
equity or debt financing, and is discussing with Comerica,
Maxxim and its vendors a restructuring of the Company's
indebtedness. Such restructuring may include the issuance of
equity securities to repay its outstanding indebtedness. Any
such issuance of equity securities will substantially dilute the
interest of the Company's current shareholders. There can be no
assurances that such restructuring or equity financing will
occur. In the event the Company is unable to quickly restructure
its outstanding indebtedness and secure additional financing,
the Company will not have the funds to satisfy its obligations
and may be required to seek protection under the federal
bankruptcy laws.
Due to the Company's financial situation, all of its U.S.
employees have been terminated. In addition, until the Company
can obtain financing and retain an accounting staff, the Company
does not expect that it will be possible to file its annual
report on Form 10-K.
HENLEY HEALTHCARE: Appoints Len de Jong As New Board Chairman
-------------------------------------------------------------
Henley Healthcare Inc. (OTCBB:HENL) announced that the company's
board of directors has appointed Len de Jong as chairman
effective March 27, 2001. Mr. de Jong was previously appointed a
director and president. Mr. de Jong also serves as the president
and chief executive officer of the Company's subsidiary, Enraf-
Nonius B. V. Enraf-Nonius, which is located in Delft, The
Netherlands, is a worldwide producer and supplier of products
and services in the field of physiotherapy and active
rehabilitation. Mr. de Jong replaced Dr. Pedro A. Rubio who
resigned as a director and as chairman on March 27, 2001.
At the March 27 meeting, the Board also elected Mr. Tom
Doodkorte and Mr. John Van Groningen as directors. Messrs.
Doodkorte and Van Groningen are also employed by Enraf-Nonius.
In addition, Dr. Pedro Rubio, Terry Manning and Gabe Shaheen
resigned as directors at the March 27 meeting. Prior to that
meeting, Walt Cunningham and James Sturgeon also resigned as
directors, and Mr. Sturgeon also resigned as CFO of the Company.
HUNTWAY: Plans to Appeal NYSE's Decision to Delist Shares
---------------------------------------------------------
Huntway Refining Company (NYSE: HWY) said it intends to timely
request a review of the determination by The New York Stock
Exchange (NYSE) to delist its common stock. Huntway anticipates
that its common stock will continue to be listed on the NYSE
until at least the next scheduled review date, which Huntway
understands will be announced by the NYSE shortly, as a request
for a review ordinarily stays delisting until the review occurs.
As previously announced on March 20, 2001, Huntway and Valero
Energy Corporation (NYSE: VLO) have executed a definitive
agreement under which Valero is to acquire Huntway for an
enterprise value of approximately $78 million or $1.90 in cash
per share of common stock. Huntway currently anticipates that a
special meeting of stockholders to vote on such transaction will
be held by the end of May 2001 and will close shortly
thereafter.
Huntway is considering its alternatives if the NYSE does not
reverse its determination to delist Huntway stock and if prior
to the effective time of any delisting the transaction with
Valero has not closed.
Huntway Refining Company owns and operates two refineries at
Wilmington and Benicia, California, which primarily process
California crude oil to produce liquid asphalt for use in road
construction and repair, as well as smaller amounts of gas oil,
naphtha, kerosene distillate and bunker fuels.
ICG COMMUNICATIONS: Rule 9027 Removal Period Extended To June 12
----------------------------------------------------------------
At the Petition Date, the ICG Communications, Inc. Debtors were
parties to lawsuits pending in state and federal courts across
the country. Pursuant to Rule 9027 of the Federal Rules of
Bankruptcy Procedure, the Debtors asked the Court to extend
their statutory period of time within which they must decide
whether to remove a legal proceeding from the court in which it
is pending to the District of Delaware for resolution.
The Debtors have not had a full opportunity to investigate their
involvement in the prepetition lawsuits, and decisions about the
appropriate forum in light of the Chapter 11 proceedings would
be imprudent at this early juncture, the Debtors argued.
Accordingly, the Debtors asked that the time within which they
must decide whether to remove any Prepetition Lawsuit be
extended to the later to occur of (a) June 12, 2001, or (b) 30
days after entry of an order terminating the automatic stay with
respect to any particular action sought to be removed.
Judge Walsh granted the Motion and ordered the requested
extension. (ICG Communications Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
IMPERIAL SUGAR: Equity Committee Hires Bell Boyd as Counsel
-----------------------------------------------------------
The Committee of Equity Security Holders in Imperial Sugar
Company's Chapter 11 cases requested Judge Robinson to authorize
the Committee to retain Bell, Boyd & Lloyd LLC, as counsel
for the Committee.
Lawrence R. Spieth of Dimensional Fund Advisors, Chairman of the
Committee, told the Court that the Equity Committee sought the
retention of Bell Boyd as counsel to render the following legal
services:
(a) Advising the Committee as to its rights, powers and
duties;
(b) Advising the Committee in connection with proposals and
pleadings submitted by the Debtors or others to the Court;
(c) Investigating the Debtors' actions and the estates'
assets and liabilities;
(d) Advising the Committee in connection with negotiation
and formulation of any reorganization plan;
(e) Reviewing all applications and motions filed by parties
other than the Committee and to represent the Committee's
interest in and outside of Court with respect to all
applications and motions;
(f) Generally advocating positions that further the
interests of the creditors represented by the Committee; and
(g) performing such other services as are in the interests
of the Debtors' creditors.
The Equity Committee requested that Bell Boyd be compensated at
the firm's normal hourly billing rates prevailing at the time
services are rendered and that the fees, any necessary and
actual expenses incurred by Bell Boyd, in the course of its
representation, as well as any advances for fees or expenses, be
allowed subject to Court approval as administrative expenses of
the Debtors' estates.
Michael Yetnikoff, an attorney at Bell Boyd, declared that Bell
Boyd changes its billing rates from time to time. The current
hourly rates in effect for Bell Boyd professionals potentially
involved in these matters are:
Name Rate
---- ----
David F. Heroy $490
Steven L. Harris $300
Robert V. Shannon $320
Michael Yetnikoff $250
Rosanne Ciambrone $250
John S. Delnero $250
Erik W. Chalut $180
Mr. Yetnikoff assured Judge Robinson that Bell Boyd is a
disinterested person within the meaning of bankruptcy law,
neither holding nor representing any interest adverse to the
Debtors, and having no known connection with the Debtors, their
creditors, any parties, their respective attorneys and
accountants, the U.S. Trustee or any person employed in the
Office of the U.S. Trustee. However, he disclosed that Bell Boyd
has, in the past year, represented, and may continue to
represent, Harris Insight Funds, an affiliate of a creditor to
the Debtors, in matters unrelated to these cases.
Mr. Yetnikoff guaranteed that investigation continues regarding
any other possible connection between Bell Boyd and other
parties-in-interest will continue, and that a supplemental
disclosure will be filed, if and when any additional material
connections are discovered. (Imperial Sugar Bankruptcy News,
Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900)
INTEGRATED HEALTH: Moves To Reject Sublease For Facility in CA
--------------------------------------------------------------
Integrated Health Services, Inc. sought the Court's authority,
pursuant to Sections 105 and 365 of the Bankruptcy Code and Rule
6006 of the Bankruptcy Rules, to reject the Sublease by and
among IHS (Sublessee) and C. Peter Leggett and Park Regency
Ltd. I (Leggett and Regency together as Sublessor), as extended
and amended by certain Sublease Extension and Amendment, related
to real property and improvements pertaining to a long-term
nursing Facility located at West La Habra Boulevard, La Habra,
California 90361.
Management's review of the Facility has revealed that the
Facility loses approximately $432,029 per year. The Facility's
earings before interest, taxes, depreciation, amortization and
rent (EBITDAR) total approximately $209,332. The annual base
rent under the Sublease is $641,361. Based upon this, the
Facility's annual earnings before interest, taxes, depreciation
and amortization (EBITDA) is approximately negative $432,029.
The Debtors have concluded that the Facility and the Sublease
are of no value to the Debtors' estates. Rejecting the Sublease,
the Debtors believe, and orchestrating the orderly transfer of
the Facility's operations to a non-Debtor operator, is therefore
in the best interests of the Debtors' estates and creditors.
(Integrated Health Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
KEVCO INC.: Agrees to Sell Better Bath Division For $10 Million
---------------------------------------------------------------
Kevco, Inc., in connection with the Company's plans to sell
certain operating units, has reached an agreement in principle
to sell its Better Bath Division to Drew Industries Incorporated
for an aggregate purchase price of $10.0 million, plus the
assumption of certain contracts. The Company has filed motions
with the United States Bankruptcy Court in Fort Worth seeking
approval for the sale as well as associated bidding and auction
procedures. The Company will seek Court consideration of the bid
procedures as promptly as possible. The bid procedures, if
approved by the Court, will include a break-up fee to Drew
Industries in the event the Company sells Better Bath to a
higher bidder. The bid procedures will also provide for minimum
bidding increments that must be met before the Company could
entertain higher bids. The Company anticipates a hearing on the
sale in late April.
Kevco filed voluntary petitions for reorganization under Chapter
11 of the United States Bankruptcy Code. The petitions were
filed in the United States Bankruptcy Court for the Northern
District of Texas on February 5, 2001.
Kevco, headquartered in Fort Worth, Texas, is a wholesale
distributor and manufacturer of building products for the
manufactured housing and recreational vehicle industries.
LASIK VISION: Intends To File For Bankruptcy Protection
-------------------------------------------------------
Icon Laser Eye Centres Inc. said its Lasik Vision Corp. and
Lasik Vision Canada Inc. subsidiaries are filing for bankruptcy.
``Greater than anticipated operating liabilities at Lasik
Vision, exacerbated by a work stoppage by Lasik Vision doctors,
has necessitated this action so that Icon can focus its
resources on addressing the needs of Lasik Vision's patients
while continuing to offer Icon's patients the best value in
laser vision correction services,'' Icon chairman Ernest Remo
said April 2.
Vancouver-based Lasik Vision, one North America's largest
providers of low-cost laser eye correction surgery, was acquired
by Icon for $40 million in January 2001. Icon suspended
operations at its Lasik Vision locations March 28 after it said
it couldn't make payroll. Icon chief executive Simone Mencaglia
will ``develop a comprehensive strategy to address the needs and
concerns of former Lasik Vision patients who have been disrupted
by the current circumstances,'' the company said. (New
Generation Research, April 5, 2001)
LEINER HEALTH: Moody's Junks Senior Debt Ratings
------------------------------------------------
The ratings of vitamins and health supplement manufacturer
Leiner Health Products, Inc. now stand in the lower 'C' levels.
Moody's Investors Service cut several ratings of the company due
to Leiner's continuing losses and reduced cashflow.
The bond rating agency, however, recognized that these losses
are due to the slowdown in the U.S. vitamin and nutritional
supplement mass market, which dates back to 1998.
But Moody's took notice in its downgrade the negative operating
income of the company last year, which amounted to $9 million in
the third quarter ended December 31,2000.
In assigning the lower rating, Moody's also cited the need for
the company to address and amend its credit facility, tight
liquidity, and high risk of default.
Approximately $85 million of debt securities were affected by
the recent downgrades. They are the following:
-- $85 million senior subordinated notes due 2007, down to
C from Caa1
-- senior implied, down to Caa1 from B2
-- senior unsecured issuer, down to Ca from B3
Leiner Health Products Inc. is headquartered in Carson, CA, and
manufactures vitamins, minerals and nutritional supplements for
the U.S. mass
LOEWEN GROUP: Seeks Clarifying Order On Sale Purchase Agreement
---------------------------------------------------------------
In preparation for closing the sale of the Sale Locations, The
Loewen Group, Inc. Debtors discovered that the title commitments
for certain of the Sale Locations as listed in the Sale Motion
did not match the Debtors records. In particular,
(1) the title commitment for the Sale Locations identified
in the Sale Motion as being owned by Hawks Funeral Home, Inc.
(the LGII Sale Locations) indicated that those Sale Locations
were actually owned by Hawks Funeral Home, Inc. and LGII as
tenants in common;
(2) the title commitment for the Sale Location known as
Tipton Funeral Home (the Tipton Location) indicated that the
Tipton Location was owned by Debtor Gray Funeral Service, Inc.
rather than Gray Gish, Inc.;
(3) the title commitment for the Sale Locations comprising
the Lowell- Tims Funeral Homes (the Lowell-Tims Locations)
indicated that the Lowell- Tims Locations were actually owned by
LGII, rather than Lowell Holdings, Inc.;
(4) the title commitment for the Sale Locations known as
Nashville Funeral Home and Batesville Funeral Home and, together
with the LGII Sale Locations, the Tipton Location, the Lowell-
Tims Locations indicated that those locations were owned by
Debtor Maxwell Holding Company, Inc. rather than Nashville
Funeral Home, Inc. and Batesville Funeral Services, Inc.
At the request of the Purchaser and Commonwealth Title, the
title insurer for this transaction, the Debtors sought a
clarifying order approving the addition of LGII, Gray Funeral
Service and Maxwrell as Selling Debtors under the Sale Order and
the Amended Purchase Agreement.
Subject to the Court's approval, the Selling Debtors will be:
Loewen Group International, Inc.
Batesville Funeral Services, Inc.
Nashville Funeral Home, Inc.
Colonial Services, Ltd.
Fryberger Acquisition, Inc.
Hawks Funeral Home, Inc.
Quiring Monument Company
Janousek Funeral Home, Inc.
Boyd E. Braman Mortuary, Inc.
Loewen (Oklahoma), Inc.
Gray Funeral Service, Inc.
Gray Fish, Inc.
Greer Funeral Home, Inc.
Kiesau Funeral Home, Inc.
Lowell Holdings, Inc.
Area Funeral Services, Inc.
HM Acquisition, Inc.
Patterson Greer Funeral Home, Inc.
Seeger Funeral Home, Inc.
Chism-Smith Funeral Home, Inc.
Dudley M. Hughes Funeral Home, Inc.
Ed C. Smith & Brothers Funeral Directors, Inc.
Hughes Funeral Homes, Inc.
Hughes Southland Funeral Home, Inc.
Hughes Funerals, Inc.
Benton County Memorial Park, Inc.
Southeastern Cemeteries Association
Pittsburgh Cemetery Company
Sunset Funeral Home, Inc.
Park Cemetery of Carthage, Inc.
Moon Cemetery Association
Memorial Park of Ada, Inc.
Crown Hill Memorial Park, Inc.
Maxwell Holding Company, Inc.
Missouri Cemetery Management, Inc.
Request for Authority to Withdraw Certain
Excess Principal and Interest From Trust Funds
The debtors asserted that, under the Amended Purchase Agreement,
in connection with the sale of certain of the Sale Locations
that are located in Arkansas, they are entitled, subject to
regulatory approval, to make withdrawals of excess principal and
interest from certain preneed trusts (the Arkansas Trust Funds)
related to the Arkansas Sale Locations. The Arkansas Insurance
Department, the Debtors said, has informed the Debtors that the
Withdrawals will be approved only after AID is provided with
proof from the Court appointed trustee in these cases that the
Debtors are the appropriate entity to receive property of the
estate.
The Debtors reminded the Court that they are continuing in
possession of their respective properties and are operating and
managing their businesses, as debtors in possession, pursuant to
sections 1107 and 1108 of the Bankruptcy Code. Thus, there is no
court-appointed trustee entitled to collect the excess principal
and interest from the Arkansas Trust Funds. Instead, the Debtors
are the appropriate recipients of those funds.
Accordingly, the Debtors sought a clarifying order from the
Court:
(1) making clear that the Debtors are the appropriate
parties to receive the Withdrawals on behalf of their respective
estates and creditors;
(2) authorizing the addition of LGII, Gray Funeral Service,
Inc. and Maxwell Holding Company, Inc. as Selling Debtors under
the asset purchase agreement documenting the sale of property to
Charter Funerals, Inc. (Loewen Bankruptcy News, Issue No. 36;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
MMH HOLDINGS: Disclosure Statement Hearing Set For April 10
-----------------------------------------------------------
A hearing on the Disclosure Statement of MMH Holdings, Inc., et
al. is re-scheduled for 9:30 AM on April 10, 2001 before the
Honorable Sue L. Robinson, US District Court, Wilmington, DE.
Attorneys for the debtors are Klett Rooney Lieber & Schorling
and Proskauer Rose LLP.
PACIFIC GAS: Files Chapter 11 Petition in San Francisco
-------------------------------------------------------
Pacific Gas and Electric Company, the utility unit of PG&E
Corporation (NYSE: PCG), filed for reorganization under Chapter
11 of the U.S. Bankruptcy Code in San Francisco bankruptcy
court. The company said it is taking this action in light of its
unreimbursed energy costs which are now increasing by more than
$300 million per month, continuing CPUC decisions that
economically disadvantage the company, and the now unmistakable
fact that negotiations with Governor Gray Davis and his
representatives are going nowhere.
Neither PG&E Corporation nor any of its other subsidiaries,
including its National Energy Group, have filed for Chapter 11
reorganization or are affected by the utility's filing.
"We chose to file for Chapter 11 reorganization affirmatively
because we expect the court will provide the venue needed to
reach a solution, which thus far the State and the State's
regulators have been unable to achieve," said Robert D. Glynn,
Jr., Chairman of Pacific Gas and Electric Company. "The
regulatory and political processes have failed us, and now we
are turning to the court."
Glynn added, "Our objective is to move through the Chapter 11
reorganization process as quickly as possible, without
disruption to our operations or inconvenience to our customers.
Throughout this crisis, our 20,000 employees have been and
remain committed to providing safe and reliable service to the
13 million Californians who depend on us to deliver their gas
and electricity."
Pacific Gas and Electric Company decided to file for the
protection of Chapter 11 primarily due to:
-- Failure by the state to assume the full procurement
responsibility for Pacific Gas and Electric's "net open
position" as was provided under AB1X. This has the
result of increasing financial exposure to unreimbursed
wholesale energy procurement costs, which the utility
estimates to be approximately $300 million or more per
month.
-- The impact of actions by the California Public Utilities
Commission (CPUC) on March 27, 2001, and April 3, 2001,
that created new payment obligations for the company and
undermined its ability to return to financial viability.
-- Lack of progress in negotiations with the state to
provide recovery of $9 billion in wholesale power
purchases made by the utility since June 2000, which
have not been recoverable in frozen rates.
-- The adoption by the CPUC of an illegal and retroactive
accounting change that would appear to eliminate our
true uncollected wholesale costs.
"In addition, despite Pacific Gas & Electric's best efforts to
work with the State of California to reach a consensual,
responsible, fair and comprehensive solution to California's
energy crisis, no agreement has been reached with the Governor
and the Governor's representatives have dramatically slowed the
pace and the progress of discussions over the past month.
"Furthermore since last fall, we have filed comprehensive plans
for resolving this matter with the CPUC, but they have not acted
affirmatively on them," said Glynn.
On October 4, 2000, Pacific Gas and Electric sought emergency
rate action by the CPUC. In November 2000, we filed our rate
stabilization plan, which, if adopted, would have increased
electric prices by an initial 25 percent, compared with the 46
percent recently adopted by the CPUC. Neither request was acted
upon. Had the state acted at that time:
-- Pacific Gas and Electric would have been kept
creditworthy;
-- Pacific Gas and Electric would have been able to enter
into long-term power purchase contracts at prices lower
than those announced by the state;
-- The state would not have had to almost exhaust the
state's budget surplus by spending billions of dollars to
purchase power for the utility's customers;
-- The state would not now need to issue billions of dollars
in bonds to cover these power purchases; and
-- The state would not now be advancing a proposal to spend
billions of dollars to purchase the state's three
investor-owned utility's electric transmission systems.
"This year, the state has spent more than $3 billion on power
purchases and, with the CPUC, has arranged to be reimbursed for
these expenses," noted Glynn. "In contrast, since June Pacific
Gas and Electric Company has spent $9 billion in excess of
revenues to pay for power for its customers and exhausted its
ability to continue borrowing, but there has been no progress on
a plan to reimburse it for those expenditures as provided by
law.
"Statements by the Governor and other public officials since
last September gave us reason to believe that a solution could
be reached outside the context of Chapter 11 that would restore
the utility's financial viability and enable it to meet its
financial obligations equitably. However, these statements have
not been followed up by constructive actions, and a
reorganization in Chapter 11 is now the most feasible means of
resolution."
The utility will utilize existing resources to continue
operating its business during bankruptcy, including paying
vendors and suppliers in full for goods and services received
after the filing. The utility will pay electric commodity
suppliers as provided by law. The utility intends to continue
normal electric and gas transmission and distribution functions
during the Chapter 11 process. Employees will continue to be
paid. Health care plans and other benefits for employees and
most retirees will continue. The utility's qualified retirement
plans for retirees and vested employees are fully funded and
protected by federal law.
PACIFIC GAS: Case Summary and 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Pacific Gas & Electric Company
77 Beale Street
San Francisco, CA 9412
Type of Business: An electric and gas utility providing electric
and gas services to Northern and Central California.
Chapter 11 Petition Date: April 6, 2001
Court: Northern District of California
Bankruptcy Case No: 01-30923-dm
Judge: Hon. Dennis Montali
Debtor's Counsel: James L. Lopes, Esq.
William J. Lafferty, Esq.
Jeffrey L. Schaffer, Esq.
Janet A. Nexon, Esq.
Jerome B. Falk, Jr., Esq.
Gary M. Kaplan, Esq.
Steven E. Schon, Esq.
Clara J. Shin, Esq.
Amy E. Margolin, Esq.
Peter J. Drobac, Esq.
Sarah M. King, Esq.
Howard, Rice, Nemerovski, Canady, Falk &
Rabkin
7th Floor, Three Embarcadero Center
San Francisco, California 94111
Phone:(415) 434-1600
Fax:(415) 217-5910
Total Assets: $24,183,000,000
Total Debts: $18,400,000,000
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
The Bank of New York, as Floating Rate $ 2,207,250,000
Indenture Trustee Notes Due 2001
101 Barclay St. - 21W
New York, NY 10286 Senior Notes
Tel:(212)815-5763 Due 2005
Fax:(212)815-5917
Medium Term Notes,
Series B, C & D
California Power Exchange Power Purchases $ 1,966,000,000
100 E. Freemont Ave. Bldg. A9
Alhambra, CA 91803-4737
Tel:(626)537-3144
Fax:(626)537-3191
Bankers Trust Co., as Refunding Revenue $ 1,302,100,000
Indenture Trustee bonds
4 Albany St. 4th Floor 1997 Series A-C,
New York, NY 10006 1996 Series A-F
Tel:(212)250-6378
Fax:(212)250-6727
California Independent Power Purchases $ 1,228,800,000
System Operator and Grid Fees
P.O. Box 639024
Folsom, CA 95630-9017
Tel:(916)351-4450
Fas:(916)351-3350
Bank of America, N.A. Unsecured $ 938,461,000
555 California St. 12th Flr. Revolver
San Francisco, CA 54104-1502
Tel:(415)622-3456
Fax:(415)622-6632
U.S. Bank, as Pollution Control $ 310,000,000
Indenture Trustee Bonds,
P.O. Box 64111 1992 Series B,
Saint Paul, MN 55164-0111 1993 Series A-B
Tel:(651)244-8311
Fax:(651)244-1433
Calpine Gilroy Power Purchases $ 57,928,385
Cogeneration, L.P.
San Jose, CA 94586
Tel:(925)600-2005
Fax:(925)600-8924
Calpine Greanleaf, Inc. Power Purchases $ 49,452,611
465 California St. #600
San Francisco, CA 94104
Tel:(925)445-8000
Fax:(925)500-8924
Crocket Cogen, a Georgia Power Purchases $ 48,400,572
Limited Partnership
195 S. LaSalle St.
Chicago, IL 60603
Fax:(619)615-7663
Calpine King City Cogen LLC Power Purchases $ 45,706,378
San Jose, CA 94568
Tel:(925)600-2005
Fax:(925)600-8924
El Paso Merchant Energy Gas Power Purchases $ 40,147,245
2500 City West Blvd. Ste.1400
Houston, TX 77042
Tel:(713)420-4985
Fax:(713)420-2108
GMF Power Systems, L.P. Power Purchases $ 40,122,073
Tel:(925)427-1041
Fax:(925)427-0414
Geysers Power Company, LLC Power Purchases $ 32,867,878
Tel:(925)600-2061
Fax:(925)600-8924
BP Energy Company Gas Purchases $ 29,523,530
Houston, TX 77079
Tel:(281)366-6277
Fax:(281)366-5925
Enron Canada Corporation Gas Purchases $ 28,210,551
Tel:(403)974-6931
Fax:(403)974-6795
Chevron U.S.A. Production Co. Gas Purchases $ 24,718,334
P.O. Box 840659
Dallas, TX 75284-0659
Tel:(972)702-0019
Fax:(461)392-2990
Sempra Energy Trading Corp. Gas Purchases $ 23,849,455
Stamford, CT 06902
Tel:(203)355-5607
Fax:(203)355-5001
Calpine Pittsburgh Power Purchases $ 22,576,506
Power Plant
50 W San Francisco St.
San Jose, CA 95113
Tel:(408)995-5115
Fax:(408)995-0505
Wheelabrator Shahta Energy Power Purchases $ 21,506,087
Co., Inc.
Anderson, CA 96007
Tel:(530)365-9172
Fax:(530)365-2035
Sierra Pacific Industries Power Purchases $ 19,800,248
Anderson, CA 96007
Tel:(530)378-8000
Fax:(530)378-8242
PACIFIC GAS: BCSI Initiates Case-Specific Newsletter Coverage
-------------------------------------------------------------
For additional background information about Pacific Gas and
Electric Company's business operations, the California
Electricity Crisis and what happened in Judge Montali's
courtroom Friday afternoon, pick-up a free copy of the first
issue of PACIFIC GAS BANKRUPTCY NEWS, published by Bankruptcy
Creditors' Service, Inc., at:
http://www.bankrupt.com/pacificgas.txt
PLAINWELL: Engages Houlihan Lokey to Explore Strategic Options
--------------------------------------------------------------
PLAINWELL INC., a specialty paper and tissue manufacturer, hired
the investment banking firm of Houlihan Lokey Howard & Zukin to
explore strategic options available to the company, including
the sale of some or all of its paper manufacturing facilities,
as it operates under Chapter 11 bankruptcy protection.
"We have a fiduciary responsibility to explore strategic options
available to the company which will maximize the value of the
organization as well as benefit our customers and our
employees," said Gary A. Hayden, company president and chief
operating officer. "These options could dramatically shorten the
path out of Chapter 11 and provide assurance to our valued
customers of a stable source of supply."
PLAINWELL INC. filed for Chapter 11 protection on November 21,
2000. The company operates tissue mills in Eau Claire, Wis., and
in Ransom and Pittston, Penn., as well as an affiliate operation
in Memphis, Tenn. The company also owns a specialty paper mill
in Plainwell, Mich., at which it had ceased operations on
November 6, 2000.
According to Hayden, the company's tissue production facilities
in particular could be attractive to potential acquirers. "As
tissue suppliers increasingly seek to partner with their
national accounts, a key factor is to have production facilities
close to their customers' major markets for lower transportation
costs and improved logistics," he said. "We believe our
Wisconsin and Pennsylvania mills can satisfy this criteria for
several organizations."
PREMIER SALONS: Disclosure Statement Hearing Set For April 19
-------------------------------------------------------------
On March 20, 2001 Premier Salons International, Inc. and GEMM
Holdings, Inc. filed a joint plan of reorganization and a
proposed Disclosure Statement. A hearing to consider the
approval of the Proposed Disclosure Statement will be
held before the Honorable Roderick R. McKelvie, Wilmington
Delaware at 12:15 PM on April 19, 2001.
Objections shall be filed so as to be received by the court no
later than 12:00 PM, April 17, 2001.
The debtors are represented by Christopher R. Cawston of Weil
Gotshal & Manges, LLP, Miami, Florida and Richard, Layton &
Finger, PA, Wilmington, DE.
PSINET: Unit Sells Interest in Decan Groupe For Euro 38.6MM Cash
----------------------------------------------------------------
PSINet Inc. (NASDAQ:PSIX) announced that its wholly owned
subsidiary, Metamor Holdings (France), has completed the sale of
its entire ownership interest in Decan Groupe to Getronics
International BV.
Net cash proceeds to Metamor Holdings (France) were
approximately Euro 38.6 million, with an additional Euro 5
million being placed in escrow for one year.
As previously announced, PSINet's current cash resources, and
any cash generated by additional asset sales, are not expected
to be sufficient to meet PSINet's anticipated cash needs absent
successful implementation of one or more financial or strategic
alternatives currently under consideration by PSINet, and PSINet
cannot provide any assurance that, even if any such alternatives
are implemented, it will not run out of cash.
Headquartered in Ashburn, Virginia, PSINet is the Internet Super
Carrier offering global e-commerce infrastructure, end-to-end IT
solutions and a full suite of retail and wholesale Internet
services through wholly-owned PSINet subsidiaries.
Services are provided on PSINet-owned and operated fiber,
satellite, web hosting and switching facilities, providing
direct access in more than 900 metropolitan areas in 27
countries on five continents.
RBX CORP.: Bankruptcy Judge Approves Debt Restructuring Plan
------------------------------------------------------------
U.S. Bankruptcy Court Judge William Stone Jr. approved the
disclosure of industrial foam maker RBX Corp.'s debt
restructuring plan in Roanoke, Va., according to TheDeal.com.
Creditors will vote on the plan on July 6. RBX filed for
bankruptcy on Dec. 6. RBX said that it has secured $35 million
in debtor-in-possession (DIP) funding from PPM Financial to help
cover operating costs. RBX, which makes foam used in packaging
and insulation, among other products, also has plants in North
Carolina, Illinois, Ohio, Missouri, Georgia and California. (ABI
World, April 5, 2001)
SENSAR CORPORATION: Continues To Explore Investment Options
-----------------------------------------------------------
Sensar Corporation (Nasdaq: SCII) is continuing to explore
various investment options to enhance shareholder value. Sensar
currently holds minority investments in Jigami Corporation and
Nex2, LLC.
In order to execute its strategy of making minority investments
in private companies, Sensar must comply with the Investment
Company Act of 1940. As reported in Sensar's Annual Report on
Form 10-K for the year ended December 31, 2000, Sensar is
attempting to qualify as a business development company under
the Investment Company Act. Sensar does not, however, currently
meet all of the requirements for a business development company
election. Specifically, Sensar will need to cancel or otherwise
negotiate the termination of substantially all of its
outstanding stock options and, subject to shareholder approval,
grant new options in compliance with the requirements of the
Investment Company Act applicable to business development
companies. Further, the current percentage of Sensar's assets
invested in qualifying assets may not be sufficient to allow
Sensar to become a business development company, or Sensar may
need to increase the percentage of its assets invested in
qualifying assets in order to maintain a business development
company election.
If Sensar is able to satisfactorily resolve these issues, it
intends to promptly file an election to become a business
development company. If Sensar is unable to meet the
requirements for a business development company, it may be
necessary for Sensar to register as an investment company under
the Investment Company Act. Registered investment companies are
subject to restrictions and regulations that are significantly
more burdensome than those applicable to business development
companies. As a result, it may not be practical for Sensar to
register as an investment company, and it may be necessary for
Sensar to dispose of its investments or take other actions
necessary to ensure compliance with the Investment Company Act.
If Sensar is unable to become a business development company and
does not register as an investment company, Sensar will have to
abandon its strategy of making minority investments in private
companies and either acquire an operating business or liquidate
its assets.
Sensar has received notice from Nasdaq that its common stock
will be delisted from the Nasdaq SmallCap Market at the open of
business on April 11, 2001. The Nasdaq Staff has informed Sensar
that the delisting is primarily due to the fact that Sensar
continues to lack tangible business operations and does not
currently qualify as a business development company under the
Investment Company Act. Although Sensar disagrees with the
Nasdaq Staff's determination, Sensar does not believe it would
be prudent at this time to expend resources to appeal this
decision. Following the delisting, Sensar expects that its
common stock will trade on the OTC Bulletin Board.
Sensar intends to continue to pursue its investment strategy,
subject to compliance with the Investment Company Act. Sensar
expects that it could take several months to determine whether
or not it is feasible for the company to become a business
development company. Further, certain shareholder approvals may
be required in connection with an election to become a business
development company or any alternative course of action.
Accordingly, Sensar has decided to reschedule its annual
shareholders' meeting for the Fall of 2001. The time and date of
the annual meeting will be announced at a later date.
SERVICE MERCHANDISE: Court Fixes Time To Assume Or Reject Leases
----------------------------------------------------------------
Subsequent to the filing of the motion, Service Merchandise
Company, Inc. reached agreements with some of the landlords, and
accordingly sought and obtained the Court's approval for the
different deadlines agreed upon with respect to different
groups of the go-forward stores.
However, four leases remain the subject of objections filed by
the landlords. As stated in the Court's Memorandum and Order,
the Debtors have been granted authority for an extension of
deadline for assumption and rejection of these leases through
July 30, 2001.
July 30, 2001 Deadline for Leases with Objecting Landlords
These are leases with respect to:
Store # Location Landlord
------- -------- --------
172 Jacksonville, FL Argyle Village Shopping Center, L.P.
433 Longview, TX Baton Associates, L.P.
428 Pensacola, FL Baton Associates, L.P.
106 Indianapolis, IN Castleton Shopping Center, Inc.
Argyle Village Square Shopping Center Limited Partnership
objected to an extension of the deadline to the date of
confirmation of a plan because according to Argyle's
understanding, the store is profitable and the Debtors
intend to utilize it in their ongoing operations as suggested by
the approximately $1,000,000 spent to improve the leased space.
Moreover, the lease is a below market lease, the landlord told
the Court. Therefore, the landlord believes there is no
justification for an indefinite extension of time to decide to
assume the lease. Argyle told the Court that it is trying
to sell its shopping center, and the fact that the Debtors have
not assumed the lease negatively impacts Argyle in its sales
process. In comparison there is no corresponding prejudice to
the Debtors as it is clear Service's lease with Argyle will
ultimately be assumed, the landlord told the Court.
Baton Associates contended that the Bankruptcy Code envisions a
situation where landlords receive a prompt decision on
assumption or rejection, and open-ended extensions are
disfavored. The uncertainty of perpetual delay, Baton said, is a
detriment to the landlord that outweighs any benefit to the
Debtors.
Castleton Shopping Center, Ltd. alleged that the Debtors
defaulted under the Lease for the sum of $43,204.89. Moreover,
with Service Merchandise as the anchor tenant for the shopping
center surrounding the Leases Premises (the Strip Mall), the
remaining tenants in the vicinity of the Leases Premises are
continuing to defect delays in the Debtors' bankruptcy
reorganization, Castleton said. The landlord complained that it
is unable to attract permanent tenants to the Strip Mall as a
result of its inability to give assurances regarding the future
of the Service Merchandise store. Castleton contended that the
Debtor has had adequate time to decide which leases it wants to
assume and which leases it wants to reject, and should not be
allowed to continue to use the protection of the Bankruptcy Code
at the expense of landlords such as Castleton.
In its Memorandum and Order, the Court stated that upon
balancing the equities of both the landlord's need for certainty
and the Debtors' need to maximize its assets by making an
informed and reasonable decision about valuable assets of the
estate, the Court finds that an appropriate extension is 120
days past the March 31, 2001 deadline. As the 120 days extension
runs on Sunday, July 29, 2001, the Court orders that the
deadline for assumption or rejection of the leases at Stores
106, 172, 428 and 433 be extended to July 30, 2001.
Agreed Deadline of January 31, 2002 with Simon Property
Upon the agreement of the Debtors and Simon Property Group,
L.P., the Court has authorized that the deadline is extended
through the earlier of confirmation or January 31, 2002 with
respect to the Debtors' Store Numbers 58, 287, 291, 318, 340,
342, 383, 475 and 535
Agreed Deadline of January 31, 2002 with New Plan Excel Realty
Upon the agreement of the Debtors and New Plan Excel Realty
Trust, the Court has authorized that the deadline is extended
through the earlier of confirmation or January 31, 2002 with
respect to the Debtors' Store Numbers 51, 166 and 482.
Agreed Deadline of January 31, 2002 with Kimco
Kimco 420, Inc., Kimco Ocala 665, Inc., Kimco Stuart 619, Inc.,
Kimco West Melbourne 668, Inc. Kimco Development of Gastonia,
Inc., Kimsworth, Inc. first filed a limited objection to the
Debtors's motion asserting that the Court has no power to grant
extension of the time to assume or reject the unexpired leases
through confirmation because the enactment of Section 365(d)(4)
in 1984 indicates that Congress intended to change that practice
to protect landlords by requiring assumption or rejection to
occur within 60 days or else the lease would be deemed rejected.
The parties subsequently agreed and sought and obtained the
Court's approval that the deadline be extended through January
31, 2002 with respect to the Debtors' Store Numbers 19, 33, 68,
176, 245 and 378.
Court's Order for Extension to Confirmation Or Earlier Dates
Having entertained the Debtors' request, objections, responses
and reply, the Court issues an order with respect to the
Debtors' motion. As in the Memorandum addressing the objections
by the three objecting landlords, the Court states in the Order
that cause exists to extend the Secton 365 deadline.
Accordingly, the Court ordered that:
(1) The deadline is extended through the date of
confirmation of a plan of reorganization with respect to Stores
as to which parties did not file an objection to the motion:
No. 81 in Burlington, MA
No. 261 in Little Rock, AR
No. 271 in Birmingham, AL
No. 415 in Monroe, LA
(2) The deadline is extended to the earlier of confirmation
or January 31, 2002 with respect to Stores:
Number Location
------ --------
72 Evansville, IN
73 Clarksville, IN
98 Bloomingdale, IL
126 Roseville, MI
168 North Miami, FL
188 Swansea, MA
260 Lakeland, FL
303 Altamonte Spring, FL
531 Sterling Heights, MI
533 Novi, MI
786 Greensburg, PA
(3) As stated in the Memorandum, the Deadline is extended
to July 30, 2001 with respect to Stores:
No. 106 in Castleton, IN
No. 172 in Orange Park, FL
No. 428 in Pensacola, FL
No. 433 in Longview, TX
(4) The deadline is extended through the date of
confirmation of a plan of reorganization as to all other Go-
Forward Stores or other unexpired leases of any type.
Judge Paine directed the Debtors to timely perform all of their
obligations under the leases as required by section 365(d)(3) of
the Bankruptcy Code, pending the assumption or rejection of the
unexpired leases with respect to these stores.
Judge Paine also made it clear that so long as a motion is filed
by the applicable Section 365 deadline to (i) assume and/or
assign a particular lease, or (ii) extend the applicable Section
365 Deadline, the unexpired leases will not be deemed rejected
unless and until the Court so Orders. (Service Merchandise
Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
SHOWSCAN: Disclosure Statement Hearing To Proceed On May 2
----------------------------------------------------------
The U.S. Bankruptcy Court, Central District of California, Los
Angeles Division, entered an order continuing the hearing on the
Disclosure Statement of Showscan Entertainment Inc. to May 2,
2001 at 9:30 AM. The court ordered that the debtor shall file
and serve a second amended disclosure statement and plan by
April 13, 2001. Written objections must be received by debtor's
counsel by April 27, 2001. Enid M. Colson of Liner, Yankelevitz,
Sunshine & REGENSTREIF LLP represent the debtors.
SOMNUS MEDICAL: Looking For Funds To Sustain Operations
-------------------------------------------------------
Somnus Medical Technologies, Inc. designs, develops,
manufactures and markets innovative medical devices that utilize
its proprietary temperature controlled radiofrequency technology
for the treatment of upper airway disorders. The Company's
Somnoplasty System provides physicians with a suite of products
designed to offer minimally invasive, curative treatment
alternatives for disorders of the upper airway, including
obstructive sleep apnea syndrome, OSAS, chronic turbinate
hypertrophy and habitual snoring, and coagulation of tissue in
the head and neck which may include tonsils.
The Company has incurred significant operating losses since the
commencement of its operations in 1996. As of December 31, 2000,
there was an accumulated deficit of approximately $59 million.
Somnus indicates it expects those losses to continue based on
its current and projected sales and marketing, general and
administrative, and research and development expenses. Because
its available funds are low the Company will either need to
raise cash soon or sell the Company. Somnus expects to raise
additional funds through the issuance of equity or debt, but the
consummation of a financing is uncertain. If unable to raise
sufficient new funds it is unlikely that the Company will be
able to continue its operations. Somnus says it may never
generate sufficient revenue to sustain its business.
The Company's revenues for 2000 and 1999 were derived primarily
from sales of its Somnoplasty System, consisting of the control
units and disposable devices, to private practices, hospitals,
clinics and sleep clinics. Net revenues increased in 2000 to
$12,062,000 from $11,665,000 in 1999 and $7,356,000 in 1998. The
year over year increase was $397,000 or 3.4 percent from 1999 to
2000 and $4,309,000 or 59 percent from 1998 to 1999.
The net loss was $10,707,000 for 2000, $13,150,000 for 1999, and
$19,328,000 for 1998. Somnus says it expects its operating
losses will continue for at least the next couple of years.
SUNTERRA CORPORATION: Gets Court's Nod On New DIP Financing
-----------------------------------------------------------
Sunterra Corporation received approval from the United States
Bankruptcy Court for the District of Maryland to enter into a
new debtor-in-possession financing agreement with Greenwich
Capital Markets, Inc., an affiliate of the Royal Bank of
Scotland.
"We are pleased to have Greenwich Capital as our lender as we
work towards completing our reorganization process," said Greg
Rayburn, CEO of Sunterra. "This instrument is a critical part of
our commitment to maintain the high quality of our resorts
worldwide and to deliver exceptional vacation experiences for
our owners."
The new financing agreement will replace Sunterra's existing
debtor-in-possession instrument, will provide a revolving line
of credit and would be available potentially to retire certain
of Sunterra's pre-petition secured debt obligations. Sunterra
expects to enter into the new financing agreement and close the
refinancing of the existing instrument as promptly as
practicable.
Sunterra is one of the world's largest vacation ownership
companies with owner families and resorts in North America,
Europe, the Pacific, the Caribbean and Japan.
TEK DIGITEL: Expects More Losses in 2001
----------------------------------------
TEK DigiTel Corporation develops equipment for use by
individuals and small businesses that converts analog voice data
to a digital format suitable for network transmission using
standard Internet Protocols (IP). The equipment, known as a
"gateway," consists of proprietary computer hardware and
software that connects a standard telephone to the Internet or
other digital network. This Voice over IP (VoIP) technology
allows users to transmit all of their voice and fax
communications using the Internet, instead of the conventional
telephone network.
TEK DigiTel Corporation has incurred losses since its inception
and expects to incur losses in the future. The Company has
incurred operating losses since its inception in 1998 and
through December 31, 2000, have accumulated a deficit of
$6,836,427. In 2000 and 1999, it incurred net losses of
$3,447,005 and $2,162,088, respectively.
The Company introduced its products to market in 1999 and have
had limited sales as its product gains market acceptance and it
develops its sales and marketing channels. While TEK expects its
sales to increase in the future, the Company says it cannot give
assurance that it will experience such growth. Future prospects
must be considered in light of the risks, expenses and
difficulties frequently encountered by companies in new and
rapidly evolving industries. To address these risks and achieve
profitability and increased sales levels, TEK must, among other
things, establish and increase market acceptance of its products
and systems, respond effectively to competitive pressures, offer
high quality customer service and support, introduce, on a
timely basis, advanced versions and enhancements of its products
and successfully market and support such advanced versions and
enhancements.
TEK says it expects to continue to incur operating losses in
2001 and may incur operating losses thereafter. The Company says
it cannot give assurance that it will achieve or sustain
significant sales or profitability in the future. TEK has not
been able to fund its operations from cash generated by its
business, and indicates that it may not be able to do so in the
future.
The Company does not currently have sufficient cash on hand to
fund its planned future operations. As such, it will need to
raise additional funding. Failure to secure needed additional
financing, if and when needed, may have a material adverse
effect on its business, financial condition and results of
operations. If additional funds are raised through the issuance
of equity securities, the net tangible book value per share may
decrease, the percentage ownership of current stockholders may
be diluted and such equity securities may have rights,
preferences or privileges senior or more advantageous to the
common stockholders.
The Company also can provide no assurance that additional
financing will be available on terms favorable to it, or at all.
If adequate funds are unavailable or are not available on
acceptable terms, it may not be able to take advantage of
unanticipated opportunities, develop new products or otherwise
respond to competitive pressures. Such inability could have a
material adverse effect on its business, financial condition or
results of operations.
If the Internet does not continue to grow as a medium for voice
communications, TEK's business will suffer as it is completely
dependent on the infrastructure of the Internet for its success.
Grant Thornton, LLP, of Vienna, Virginia, auditors for TEK
DigiTel Corporation issued the following statement in it's
Auditors Opinion: ".....the Company incurred a net loss of
$3,447,005 during the year ended December 31, 2000 and has
incurred net losses since its inception. In addition, the
Company's working capital requirement to sustain its business
for a period of one year far exceeds the available working
capital resources....Those conditions raise substantial doubt
about the Company's ability to continue as a going concern."
TEKNI-PLEX: Debt Ratings Down To Low-B Levels
---------------------------------------------
The prospects for Tekni-Plex is bleak within the near and
intermediate term.
This was the opinion bared by Moody's Investors Service as it
lowered the ratings of the company's $440 million secured
facility to B1 from Ba3.
The rating agency also confirmed the B3 rating assigned to the
existing $275 million 12.75% senior subordinated notes due 2001.
The company's senior implied rating is B1.
According to Moody's, the downgrade had to be undertaken because
pressures on the already impaired balance sheet of the company
has reached the maximum tolerance point for the existing ratings
category.
"In Moody's opinion, Tekni-Plex's current credit statistics do
not afford cushion for further erosion in financial
flexibility," the rating agency said.
Moody's says these pressures are exerted by the incremental
effects of the ongoing customer de-stocking, rising average raw
material costs, higher selling and general administrative
expenses, and the increasingly challenging pricing environment.
The corporate headquarter of Tekni-Plex is in Somerville, New
Jersey. The company is a leading diversified manufacturer of
packaging products and materials for the consumer products,
healthcare and food packaging industries.
WORLD ACCESS: Noteholders Issue Default Notice
----------------------------------------------
World Access, Inc. (Nasdaq: WAXS) disclosed that, as
anticipated, it has received a notice of default from the
holders of its 13.25% Senior Notes due 2008 as a result of its
failure to re-initiate a tender offer for approximately $161.4
million of outstanding Notes.
As previously announced, the Company has engaged UBS Warburg to
assist in restructuring of the Notes and other obligations,
following the Company's conclusion that it has insufficient
financial resources to both fund the tender obligation and meet
operating cash requirements.
In addition, World Access has been notified that the Noteholders
have filed an involuntary bankruptcy petition in Delaware. The
Company is evaluating the petition with its advisors and intends
to meet with the petitioners to determine if an agreement with
respect to a consensual restructuring can be reached.
World Access also reported that its Board of Directors has
evaluated the funding requirements for its subsidiary, TelDaFax
AG, and has approved a plan to meet the obligations of TelDaFax
to Deutsche Telekom AG, its largest vendor, in accordance with
previously discussed terms. The funding plan is contingent on
the approval of the ad hoc committee of the Noteholders, which
is expected to meet this morning to evaluate the proposal. World
Access informed DT of the Board's approval of funding. However,
TelDaFax circuits were disconnected beginning Thursday at 11:00
a.m. Central European Time. World Access will have further
discussions with DT based on the outcome of the Noteholder
meeting and hopes to have all TelDaFax circuits restored.
About World Access
World Access is focused on being a leading provider of bundled
voice, data and Internet services to small- to medium-sized
business customers located throughout Europe. In order to
accelerate its progress toward a leadership position in Europe,
World Access is acting as a consolidator for the highly
fragmented retail telecom services market, with the objective of
amassing a substantial and fully integrated business customer
base. To date, the Company has acquired several strategic
assets, including Facilicom International, which operates a Pan-
European long distance network and carries traffic for carrier
customers, NETnet, with retail sales operations in 9 European
countries, and WorldxChange, with retail accounts in the U.S.
and Europe. World Access, branding as NETnet, offers services
throughout Europe, including long distance, internet access and
mobile services. The Company provides end- to-end international
communication services over an advanced asynchronous transfer
mode internal network that includes gateway and tandem switches,
an extensive fiber network encompassing tens of millions of
circuit miles and satellite facilities. For additional
information regarding World Access, please refer to the
Company's web site at www.waxs.com .
WORLDWIDE WIRELESS: Posts Increasing Losses in FY 2000
------------------------------------------------------
Worldwide Wireless Networks Inc. (OTC BB:WWWN), announced
financial results for its fiscal 2000 year, ended December 31,
2000.
For the year ended December 31, 2000, the Company reported
revenues of $3,351,878 compared to $1,980,203 for the fiscal
year 1999. Revenues for fiscal year 2000 increased by 398% as
compared to revenues of $841,841 for the fiscal year 1998.
Growth in revenues is attributed to new customer acquisitions
and new service contracts.
Net loss for the fiscal 2000 year was $4,655,372, compared to a
net loss of $2,051,252, for the fiscal year 1999. Contributing
to the increase in losses, were a number of one-time write offs
and other non-recurring expenses associated with: restructuring
operations to improve services; reducing overall operating
expenses; and eliminating business activities or relationships
that did not meet the companies revised criteria for acceptable
profit margins.
"While we had an increase in revenues, our losses increased
substantially as well," stated Mr. Jerry Collazo, President and
acting CEO of Worldwide Wireless Networks. "Part of the loss is
due to restructuring as we have incurred a number of one-time
costs associated with divesting ourselves of unprofitable
services and relationships and enhancing our network operations
in Orange County. The Company has also been very aggressive in
streamlining operations, evaluating unprofitable customers and
converting them into accounts that are in-line with our new
profit model. Expanding the capacity and performance of our
existing facilities will allow us to cost-effectively add new
wireless customers that will provide our targeted profit
margins. We anticipate Q1 2001 to show similar losses as we
continue our efforts in rebuilding a solid foundation from which
to grow the Company and capitalize on market opportunities. The
economic downturn and the collapse of DSL providers has enhanced
our wireless value proposition and has created additional sales
opportunities. In comparison to wired services, we can offer a
lower cost product and we can provide service in 24 to 48 hours
as opposed to 4 to 6 weeks for DSL or frame relay. While the
value proposition to our customer is lower costs and faster
service, the value to our company and shareholders is higher
profit margins than our wired competitors by eliminating the
local loop fees that are typically 30 to 40% of the wired
service cost of sales."
About Worldwide Wireless Networks
Worldwide Wireless Networks is a data-centric wireless
communications company headquartered in Orange, California. The
Company specializes in high-speed, broadband Internet access
using an owned wireless network. Other products and services
include frame relay, collocation services and network
consulting.
The Company serves all sizes of private and public sector
accounts. For more information, visit them on the Web at
www.wwwn.com.
ZANY BRAINY: Creditors Set April 16 Deadline To Get New Funding
---------------------------------------------------------------
Zany Brainy Inc., an educational toy retailer, announced that
one of its major suppliers has halted shipments to the
retailer's warehouses until the troubled company gets a new line
of credit, according to the Associated Press. First Union Corp.
said the company was in default and froze Zany Brainy's credit
line last month. Zany Brainy has until April 16 to find a new
banker. That agreement prevents creditors from taking legal
action against the retailer, but it doesn't prevent them from
withholding shipments. The chairman of Learning Curve
International Inc., the Chicago toy manufacturer that stopped
shipments to Zany's warehouses on Wednesday, said he expects
Zany to recover.
Last year, the King of Prussia, Pa.-based Zany Brainy lost about
$9.3 million on a failed Internet joint venture and had
difficulties integrating the Noodle Kidoodle store chain. The
company's stores remain open and fully stocked. That could
change, however, as toy suppliers are worried that the retailer
eventually might seek bankruptcy protection. (ABI World, April
5, 2001)
BOND PRICING: For the week of April 9-13, 2001
----------------------------------------------
Following are indicated prices for selected issues:
Amresco 9 7/8 '04 52 - 54
Arch Comm 12 3/4 '07 32 - 34
Asia Pulp & Paper 11 3/4 '05 15 - 18(f)
Chiquita 9 5/8 '04 46 - 48(f)
Federal Mogul 7 1/2 '04 12 - 14(f)
Fruit of the Loom 6 1/2 '03 57 - 58(f)
Friendly Ice Cream 10 1/2 '07 55 - 58
Globalstar 11 3/8 '04 3 - 4(f)
Level 3 Com 9 1/8 '08 63 - 65
Oakwood Homes 7 7/8 '04 38 - 40
Owens Corning 7 1/2 '05 26 - 28 (f)
PSI Net 11 '09 8 - 10 (f)
Revlon 8 5/8 '08 42 - 44
Sterling 11 3/4 '06 44 - 47
Trump AC 11 1/2 '06 64 - 66
TWA 11 3/8 '06 2 - 4 (f)
Weirton Steel 10 3/4 '05 38 - 40
*********
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 are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
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
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Group, Inc., Washington, DC USA. Debra Brennan, Yvonne L.
Metzler, Larri-Nil Veloso, Aileen Quijano and Peter A. Chapman,
Editors.
Copyright 2001. All rights reserved. ISSN: 1520-9474.
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