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/raid1/www/Hosts/bankrupt/TCR_Public/970924.MBXT R O U B L E D C O M P A N Y R E P O R T E R Wednesday, September 24, 1997, Vol. 1, No. 23 In This Issue ALPHASTAR: Sale of Assets ANCHOR RESOLUTION: Disclosure Statement BARNEY’S: Shull’s Services Approved CAMPO ELECTRONICS: Wants More Time to File Plan CRAIG CONSUMER ELECTRONICS: More Time for HQ Lease Decision FELD & FELD: Employs Fee Auditor FLEXEL: Objection to Pension Plans in Disclosure GUY F. ATKINSON: Hearing to Set Claim Filing Date HAMBURGER HAMLET: Effective Date of Revised Amended Plan LEVITZ: Closing Stores, Selling Inventory, Rejecting Leases L’IL THINGS: Assumption of Discover Card Services LIL’ THINGS: Proofs of Claim, Reorganization Plan Dates MONTGOMERY WARD: Lump Payment to Keep Direct Marketing PIC ‘N PAY: Motion for Final Decree WESTERN FIDELITY: Deadline to File Proofs of Claims ------ ALPHASTAR: Sale of Assets -------------------------- Alphastar Television Networks, Inc., wants to sell $8.36 million in core inventory (primarily digital receivers and satellite dishes) and $1.23 million in non-core inventory (equipment and accessories) and to obviate the need for present repeated sale applications to court. Alphastar believes the sale of non-core inventory is an ordinary course of business transaction, but as the Official Committee of Unsecured Creditors disagrees and says the sale is subject to bankruptcy court approval, it proposes the following. It will give a two-day notice before the sale if the item has a cost basis of more than $2,500 or gross sale value over $1,000; for cost basis or gross sales price of $2,500 or $1,000 or less, respectively, the debtors would like to sell without further notice. Alphastar will release a final report of all sales after all or nearly all the inventory has been sold. ANCHOR RESOLUTION: Disclosure Statement --------------------------------------- Anchor Resolution Corp. has filed an Amended Disclosure Statement with respect to its Second Amended Joint Liquidating Plan of Reorganization. Following is the distribution of claims. Amount Classes (millions) Treatment Recovery ------- ---------- --------- -------- 1-4 $25 Not impaired 100% Administrative Expense Claims, Priority Tax Claims, Priority Non-Tax Claims, and Convenience Claims 5 Senior Secured $160 Impaired 100% principal Noteholder Claims plus 1% whole market 6 Other Secured $70 Impaired 100% 7 Senior Debt $104.1 Impaired 53.3% (on prepetition claims principal, accrued pre- and postpetition interest 8 Subordinated $204.8 Impaired 0% Debenture Claims 9 Other Unsecured $163.7 Impaired 19.5% Claims 10 Intercompany $0 Canceled 0% Claims 11 & 12 Interest in Anchor $0 Canceled 0% and Recycling BARNEY’S: Shull’s Services Approved ------------------------------------ Barney’s, Inc., and Meridian Ventures have signed an agreement under which Meridian will provide the services of Thomas C. Shull as Barney’s president, COO, and member of the executive management committee. Meridian will also provide the services of one full-time consultant and one 50 percent part-time senior consultant. For these services, it will receive $85,000 per month. Barney’s will also pay Meridian a flat fee of $8,500 per month for overhead, health care costs, and other expenses. Under the terms of the agreement, Barney’s will reimburse reasonable and out-of-pocket expenses incurred on appropriate business, and to pay Meridian and Shull for reasonable attorneys’ fees incurred in connection with the services agreement not to exceed $20,000. After Barney’s auditors certify statements for fiscal year ending August 2, 1998, Barney’s will pay Meridian a performance bonus of $75,000 plus five percent of the difference between the debtor’s earnings for this term over the plan’s projected earnings, up to a total maximum bonus of $400,000. The agreement commenced September 1, 1997, and runs through February 28, 1998, with up to three automatic extension terms of two months each. CAMPO ELECTRONICS: Wants More Time to File Plan ------------------------------------------------ Campo Electronics, Appliances, and Computers, Inc., would like a first extension of time to file its plan of reorganization Campo says it has closed unprofitable stores, arranged postpetition financing, and hired a new management team. But it needs an additional 105 days from the current October 2 filing deadline to evaluate the company’s future course in light of its financial performance during the Christmas retail season. It will request an extension of the deadline to January 15, 1998, to file its plan of reorganization. A hearing is set for October 1, 1997, before Judge T. M. Brahney in New Orleans. Hearings will be held the same day on Campo’s motion to assume unexpired leases on eight stores and its corporate offices in Covington, Louisiana, and a second extension from October 4, 1997, through the Christmas selling season on time to assume or reject leases for five stores and warehouses. CRAIG CONSUMER ELECTRONICS: More Time for HQ Lease Decision ----------------------------------------------------------- Craig Consumer Electronics, Inc., has asked Judge Kay March, of the Central District of California bankruptcy court to extend the deadline to assume or reject the lease on its corporate headquarters in Cerritos, California. The 45,000- square-foot building is where the debtor conducts all of its business and also contains a warehouse for storage, distribution, and testing of inventory; there, says Craig, it is critical to current operations. The company is in the process of evaluating its current position and future operations and has agreed with the lessor to an extension of time to assume or reject the lease to and including the date of the confirmation of a plan of reorganization. FELD & FELD: Employs Fee Auditor -------------------------------- Feld & Feld, Benmol, Inc., has hired a fee auditor, Legalgard of Philadelphia, Pennsylvania, with the approval of the bankruptcy court in the District of Delaware. The cost management company will review the numerous applications the company says will be filed for payment of professional fees and reimbursement of expenses in significant amounts. FLEXEL: Objection to Pension Plans in Disclosure ------------------------------------------------ Flexel, Inc., has received an objection to its Disclosure Statement for the Plan of Liquidation from the Pension Benefit Guaranty Corporation. The corporation says the statement does not give creditors critical information they need to know such as when and how Flexel’s pension plans will be terminated and how termination will affect creditors’ recoveries; whether the stockholders will get more value out of the bankruptcy beyond the $1 million cash they have already taken; and how the proposed liquidation plan curtails certain rights that the creditors would otherwise have under the bankruptcy code. PBGC filed proofs of claim including an estimated liability of $11.5 million for unfunded benefit liabilities, making it one of the largest creditors. GUY F. ATKINSON: Hearing to Set Claim Filing Date ------------------------------------------------- A hearing is set for October 10, 1997, before Judge Thomas Carlson in San Francisco, to establish December 15, 1997, as the deadline for filing proofs of claim in the Guy F. Atkinson Company of California chapter 11 proceedings. HAMBURGER HAMLET: Effective Date of Revised Amended Plan -------------------------------------------------------- Hamburger Hamlet restaurants, Inc., announces its Revised Third Amended Joint Plan of Reorganization took effect on September 16, 1997, the first business date 11 days after entry of the confirmation order on September 4. LEVITZ: Closing Stores, Selling Inventory, Rejecting Leases ----------------------------------------------------------- Levitz Furniture Incorporated requests permission of the court to close 11 store locations; sell inventory, trade fixtures, and equipment free and clear; and reject the leases that Levitz is unable to market after the completion of the sale of the merchandise at the stores. Closing the stores, says the company, is sound business judgment, and the DIP financing facility requires Levitz to close at least 20 stores by the end of the year The 11 stores to be closed are in Duluth, Atlanta, Marietta, and Morrow, Georgia; Ft. Lauderdale and Orange Park, Florida; Cincinnati, Ohio; Reno, Nevada; Woodbridge, Virginia; and two in Houston, Texas. L’IL THINGS: Assumption of Discover Card Services ------------------------------------------------ LiL’ Things, Inc., has asked the court for permission to assume its credit card service agreement with Discover Card Services, Inc., which allows Discover Card holders to purchase goods and services at LiL’ Things stores. LiL’ Things says participation in the credit card program is important to the continuation of operations, as the percentage of sales by credit card is significant and loss of those revenues would impact projected earnings and the ability to reorganize. Gross prepetition card sales for the year ending May 31, 1997, were $3.781 million and net card sales were $3.588 million. Furthermore, the company says, the inability to accept cards could put stores at a competitive disadvantage and harm customer relations at a time when customer loyalty and patronage is critical. LIL’ THINGS: Proofs of Claim, Reorganization Plan Dates ------------------------------------------------------ The deadline for filing proofs of claim is December 12, 1997, in Northern District of Texas, Dallas Division. Lil’ Things, Inc., wants an extension of the exclusive period to file a plan; the current period ends October 8 and the solicitation period ends December 8, 1997. The company says it has made significant efforts to stabilize management and operations; it has secured DIP financing from GBFC, Inc.; and it is working to replenish inventory levels, and to evaluate store leases. It has closed 11 stores, started closing sales at two stores, and rejected three unexpired leases. Furthermore, it has cut overhead by 30 percent and is currently only about one percent behind planned sales figures. But because a substantial portion of LiL’ Things’ profits are generated during the Christmas/Hanukkah season and those figures will encourage creditors to negotiate a plan of reorganization, the company would like to extend the exclusive period until January 31, 1998. This will give it time to evaluate real estate leases and store performance after the holiday season MONTGOMERY WARD: Lump Payment to Keep Direct Marketing ------------------------------------------------------ Montgomery Ward Holding Corp. seeks authority to assume direct marketing program agreements with five suppliers of unique merchandise (the syndicators). Ward will pay cure amounts aggregating approximately $2 million, representing the aggregate prepetition indebtedness of the company to the syndicators, who agree to receive a cash payment equal to 75 percent of the cure amount with the balance to be retained as an administrative claim. Because each of the syndicators is a small enterprise, they require payment for shipments before the can procure the next round of merchandise, says Ward. Therefore, payment of the cure amount is a prerequisite to the continued operation of Ward’s direct marketing program. There will be a hearing on October 1, 1997, in the district of Delaware. PIC ‘N PAY: Motion for Final Decree ----------------------------------- Pic ‘N Pay Stores, Inc., has requested entry of a final decree closing its chapter 11 bankruptcy proceedings. The company says it has fully consummated its reorganization plan, substantially all distributions have been made, and about 3,000 claims aggregating over $96 million have been resolved except for a handful of disputed claims to be resolved at or before the hearing on final decree set for October 22, 1997, in the District of Delaware. At this point, the company’s board of directors and NationsBank as its controlling shareholder are focused on strategies to sell the company or get investment capital to enhance its expansion. Finality of the bankruptcy case, says Pic ‘N Pay, is critical to attract potential purchasers and investors. WESTERN FIDELITY: Deadline to File Proofs of Claims --------------------------------------------------- The bankruptcy court of the district of Colorado has set the deadline for filing proofs of claims regarding Western Fidelity Funding, Inc., for November 12, 1997. S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc., Washington DC. Debra Brennan and Rebecca A. Porter, Editors. Copyright 1997. All rights reserved. This material is copyrighted and any commercial use, resale or publication in any form (including e- mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $575 for six months delivered via e-mail.Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951- 6400. * * * End of Transmission * * *