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T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, November 18, 1997, Vol. 1, No. 61
Headlines
BCCI: Liquidators Project Second Dividend to Creditors
FIRST MERCHANTS: Ugly Duckling Completes Agreements
GAYLORD COS.: Files For Chapter 11 Protection
FLAGSTAR: Court OK's Deloitte & Touche
FLAGSTAR: Directors of Reorganized Flagstar
HOKKAIDO AKUSHOKU BANK: A Top Japanese Bank Insolvent
KOENIG: Requests Bar Date
MAIDENFORM: NCC Industries Seeks Approval To Sell Assets
MAIDENFORM: Seeks Accounts Receivable Deal with Creditek
MARVEL: Toy Biz Reports Third Quarter Financial Results
PAYLESS CASHWAYS: Seeks To Allow Certain Claims as Scheduled
PUDGIE'S CHICKEN: Third Quarter Results
RDM SPORTS GROUP: Foothill Responds to Flexible Flyer Sale
TOWN & COUNTRY : Files Pre-Arranged Plan
VOICE POWERED TECHNOLOGY: Status of Case
MEETINGS, CONFERENCES & SEMINARS
--------
BCCI: Liquidators Project Second Dividend to Creditors
------------------------------------------------------
At a meeting of the Depositors' Protection Association held
in Westminster last week, the Court-appointed Liquidators
for Bank of Credit and Commerce International announced
that BCCI creditors are likely to see a second dividend
by the summer of next year. The Liquidators project the
second dividend will be 11.5 cents-on-the-dollar, but could
be as high as 15.5 cents-on-the-dollar. The first dividend,
paid last year, paid 24.5% to BCCI creditors.
CRAIG CONSUMER: Seeks To Reject Employee Contracts
--------------------------------------------------
Craig Consumer Electronics, Inc. has filed a motion for Court
approval authorizing the rejection of the employment
contracts with Bonnie Metz, Managing Director, Hong Kong;
Richard I. Berger, President, Chief Executive Officer and
Chairman of the Board of Directors, and Anthony Mirando,
Senior Vice President and Director of Sales.
Debtor's decision to reject the employment agreements are
based on the debtor's best business judgment.
FIRST MERCHANTS: Ugly Duckling Completes Agreements
---------------------------------------------------
Ugly Duckling Corp. announced that it has entered into
several agreements related to the secured senior bank debt
and other aspects of the operations of First Merchants
Acceptance Corporation.
On July 11, 1997, FMAC filed for reorganization under
Chapter 11 of the Federal Bankruptcy Code. On August 21,
1997, Ugly Duckling announced that it had closed the
purchase of approximately 78 percent of the secured senior
bank debt from a group of commercial banks at a 10 percent
discount.
Now, Ugly Duckling announced that it has entered into an
agreement to purchase the remaining 22 percent of FMAC's
senior debt, subject to certain conditions precedent. The
senior debt currently totals approximately $85 million.
FLAGSTAR: Court OK's Deloitte & Touche
--------------------------------------
On November 7, 1997 the Bankruptcy Court approved the
employment of Deloitte & Touche as accountants to the
debtors on a nunc pro tunc basis.
FLAGSTAR: Directors of Reorganized Flagstar
--------------------------------------------
The Directors of Reorganized Flagstar are:
James B. Adamson, Chairman (Flagstar/Chairman, President,
CEO)
Robert H. Allen (R.H. Allen Associates/Marketing)
Ronald E. Blaylock (Blaylock & Partners, LP/ President and
CEO)
Robert Marks (Marks Ventures,Inc./President)
Charles F. Moran (Sears Roebuck & Co./Sr. Vice President,
Retired)
Elizabeth A. Sanders (The Sanders Partnership/Advisor,
Marketing)
Donald R. Shepherd (University of Michigan/ Charitable
Activities)
Two Directors to be selected in accordance with the
Confirmation Order.
GAYLORD COS.: Files For Chapter 11 Protection
---------------------------------------------
The Columbus Dispatch reported on November 16, 1997 that
Gaylord Cos., the locally based parent of six Little
Professor Bookstores and six Cookstores, said yesterday it
has filed for protection from creditors under Chapter 11 of
the U.S. Bankruptcy Code.
Gaylord, which raised $2.2 million in an initial public
offering in October 1995, reported sales of $12.3 million in
1996 and $13.7 million in 1995.
HOKKAIDO TAKUSHOKU BANK: A Top Japanese Bank Insolvent
------------------------------------------------------
Hokkaido Takushoku Bank Ltd., one of Japan's top 10
commercial banks, collapsed on Monday, marking the country's
worst banking failure since World War II. Executives of the
Sapporo-based Hokkaido Takushoku Bank announced yesterday
that their institution was effectively bankrupt.
All of the bank's senior executives formally resigned after
the announcement. The bank's president, Sadamasa Kawatani
blamed Hokkaido Takushoku's woes on bad loans made during
the speculative 1980s. Kawatani said his bank's operations
and assets, excluding non-performing loans, would be
transferred to North Pacific (Hokuyo) Bank Ltd., a regional
bank on the northern island of Hokkaido, "in a few months."
KOENIG: Requests Bar Date
-------------------------
Koenig Sporting Goods, Inc. requests that the Court fix a
date by which any and all proofs of claim must be filed.
The debtor claims that in order to consider the feasibility
of and confirmation of any plan of reorganization, the
debtor must assess the magnitude of claims that have been
or may be made against the debtor.
The debtor requests that the Bar Date be set for 60 days
from the date the Court enters the Order granting this
Motion.
MAIDENFORM: NCC Industries Seeks Approval To Sell Assets
--------------------------------------------------------
On December 1, 1997 NCC Industries, Inc., one of the debtors
in possession in the Maidenform Worldwide, Inc., et al.
Chapter 11 case, will seek an order authorizing the debtor's
sale of its assets located at 165 South Main Street,
Cortland, New York, to ASSA International Corp.
for a purchase price of $600,000.
MAIDENFORM: Seeks Accounts Receivable Deal with Creditek
---------------------------------------------------------
On December 1, 1997, Maidenform Worldwide, Inc. will seek
approval of the Court to enter into an accounts receivable
outsourcing agreement with Creditek Corporation. According
to the debtor, their accounts receivable management function
currently costs approximately $490,000 per year in salaries
and other related expenses.
By outsourcing their accounts receivable functions to
Creditek, The debtors claim that they would improve their
current accounts receivable capabilities and save money, as
the price for Creditek's services is approximately $360,000
per year.
MARVEL: Toy Biz Reports Third Quarter Financial Results
-------------------------------------------------------
Toy Biz, Inc. reported financial results for the third
quarter ended September 30, 1997. For the quarter, net
sales were $40.8 million with a net loss of $11.2 million,
or $0.41 per share, compared to net sales of $83.4 million
and net income of $11.4 million or $0.42 per share in the
third quarter a year ago. For the nine months ended
September 30, 1997, net sales were $109.6 million with a net
loss of $16.0 million or $0.58 per share, compared to net
sales of $167.6 million and net income of $19.2 million or
$0.70 per share for the first nine months of
1996.
The Company noted that the 1997 third quarter results
continued to be negatively impacted by extraordinary
charges, including professional service fees, sales
allowances and other transaction costs, relating to its
involvement in the Marvel Entertainment Group bankruptcy and
its proposal to combine Toy Biz with Marvel.
As previously announced, Toy Biz has put forward a proposal
to merge Toy Biz and Marvel. Under the terms of the
proposal, the senior secured lenders of Marvel would receive
a combination of cash and preferred and common securities
in the combined company. Toy Biz stockholders (other than
Marvel), would receive one share of common stock in the
combined entity for every share of Toy Biz common stock.
Pre-petition unsecured creditors of Marvel and Marvel equity
holders would receive warrants and subscription rights,
respectively, issued by the combined company.
Toy Biz further announced that senior secured lenders of
Marvel representing more than one-third of the outstanding
amount of Marvel's senior secured debt have agreed to
support Toy Biz's plan to combine with Marvel. Toy
Biz will continue to seek the consent of the remaining
Marvel lenders in order to reach the two-thirds threshold
that the proposal requires by November 21,1997. If it
obtains the requisite consents from Marvel's lenders, Toy
Biz will seek to have the proposal approved by the
Bankruptcy court through confirmation of a plan of
reorganization.
PAYLESS CASHWAYS: Seeks To Allow Certain Claims as Scheduled
------------------------------------------------------------
Approximately 5,900 proofs of claim or interest totaling in
excess of $1.4 billion have been filed against Payless
Cashways, Inc. Many proofs of claim were filed with no
stated claim, which Payless believes signifies the
claimant's agreement with the scheduled amount. Payless
seeks an Order allowing such claims at the scheduled
amounts.
A hearing will held on the motion on December 10, 1997.
PUDGIE'S CHICKEN: Third Quarter Results
----------------------------------------
Pudgie's restaurants, announced today its results for the
third quarter ended September 30, 1997.
The Company, which filed a petition for reorganization under
Chapter 11 of the Bankruptcy Code on September 18, 1996,
incurred a third quarter loss of $550,225 or $0.12 per
share, as compared to a net loss of $4,367,904 or $0.98 per
share for the comparable period last year.
The net loss for the nine month period ended September 30,
1997, was $1,896,926, or $0.42 per share, as compared to a
net loss of $6,408,762, or $1.43 for the nine month period
ended September 30, 1996.
Approximately 41% of the Company's 1997 losses through
September 30, 1997 were the result of non-recurring items
and bankruptcy related costs.
Total revenue for the 1997 third quarter was $1,631,816 as
compared to $3,223,448 for the same period last year, due to
the net decrease in the number of Company-owned restaurants
and the decrease in franchised restaurants from September
30, 1997 compared to September 30, 1996 as well as declining
same-store sales resulting from decreased advertising
expenditures.
On October 3, 1997, the Company filed a Plan of
Reorganization and related disclosure statement. If approved
by the Court at a hearing scheduled for November 25, 1997,
the Plan of Reorganization will be submitted to a vote by
the Company's creditors and stockholders.
RDM SPORTS GROUP: Foothill Responds to Flexible Flyer Sale
----------------------------------------------------------
Foothill Capital Corporation, as agent for a group of
lenders, creditors of the debtor, RDM Sports Group, Inc., et
al. has filed a response to the debtors' motion for an order
approving certain elements of the Asset Purchase Agreement
relating to the sale of certain assets of Sports Group, Inc.
(Flexible Flyer Division).
Foothill generally agrees with and supports the agreement.
Specifically, Foothill does not object to a "break-up" fee,
so long as the Court inquires into and determines that any
such fee is reasonable under the circumstances.
Foothill does not object to the proposed "no-shop" provision
of the Asset Purchase Agreement provided it is clear that
Foothill, the Creditors Committee and the Bondholders
Committee are not in any way prohibited from finding another
entity that would purchase the Flexible Flyer Division
assets at a price higher than that proposed under the Asset
Purchase Agreement.
Foothill does not object to the "right of first refusal" so
long as that right does not impair the ability to conduct
an auction of the Flexible Flyer Division.
TOWN & COUNTRY : Files Pre-Arranged Plan
-----------------------------------------
Town & Country Corp., the international jewelry
manufacturer, today announced that the company has
voluntarily filed a pre-arranged plan to reorganize under
Chapter 11 of the Bankruptcy Code. The filing will take
place at the holding company level only and does not
involve the company's operating
subsidiaries, Town & Country Fine Jewelry Group, Essex and
Anju, or their relationships with employees, customers and
suppliers.
Town & Country Corp., the parent company, said its major
bondholders have agreed, in principle, to the terms of a
restructuring plan in which almost all of their debt will be
converted into equity. Town & Country Corp. expects to
complete the proceeding in 90 days because it has the
support of the largest bondholders.
VOICE POWERED TECHNOLOGY: Status of Case
-----------------------------------------
On November 20, 1997 Voice Powered Technology International,
Inc. will submit a Status Report to the Bankruptcy Court,
answering specific questions of the Bankruptcy Court. The
debtor will report that it expects to file a reorganization
plan and disclosure statement before the date of the Status
Hearing, depending on its ability to finalize its
negotiations with its largest secured creditor, Franklin
Electronic Publishing, Inc.
November 17, 1997 is the Bar Date in the case.
MEETINGS, CONFERENCES & SEMINARS
--------------------------------
November 19, 1997
NASSAU COUNTY BAR ASSOCIATION and
SUFFOLK COUNTY BAR ASSOCIATION, jointly with
SUFFOLK ACADEMY OF LAW
1997 Annual Bankruptcy Law Update
Suffolk County Bar Center, Hauppauge, New York
Contact 1-516-747-4464
November 21-24, 1997
COMMERCIAL LAW LEAGUE OF AMERICA
77th Eastern District Meeting
New York Marriott World Trade Center, New York
December 3-4, 1997
STRATEGIC RESEARCH INSTITUTE
4th Annual Conference on Distressed Debt
Crowne Plaza Hotel, New York, New York
Contact 1-800-599-4950
December 4-6, 1997
AMERICAN BANKRUPTCY INSTITUTE
Winter leadership Conference
La Costa Resort & Spa, Carlsbad, California
Contact 1-703-739-1060
December 5-6, 1997
STETSON UNIVERSITY COLLEGE OF LAW
22nd Annual Bankruptcy Seminar
DoubleTree Surfside Resort Hotel,
Clearwater Beach, Florida
Contact 1-813-562-7830
DECEMBER 10-11, 1997
INSTITUTE FOR INVESTMENT RESEARCH
Investment Opportunities in Workouts & Turnarounds
Downtown Conference Center, New York, New York
Contact 1-212-661-3500
December 11-13, 1997
AMERICAN LAW INSTITUTE--AMERICAN BAR ASSOCIATION
9th Annual Advanced Court of Study,
The Emerged and Emerging New Uniform Commerical Code
Sheraton New York Hotel, New York, New York
Contact 1-800-CLE-NEWS, ext. 1630
December 15-16, 1997
PRACTISING LAW INSTITUTE
Basics of Bankruptcy and Reorganization
PLI Conference Center, New York, New York
Contact 1-800-260-4PLI or http://www.pli.edu
January 29-February 1, 1998
COMMERCIAL LAW LEAGUE OF AMERICA
37th Southern District Annual Meeting
Plaza San Antonio, San Antonio, Texas
Contact 1-972-285-0391
February 22-25, 1998
NORTON INSTITUTES ON BANKRUPTCY LAW
12th Annual Norton Bankruptcy Litigation Institute I
Olympia Park Hotel, Park City, Utah
Contact 1-770-535-7722
March 19-20, 1998
TURNAROUND MANAGEMENT ASSOCIATION
Spring Leadership Meeting
Hotel del Coronado, San Diego, California
Contact 1-312-857-7734
March 26-29, 1998
NORTON INSTITUTES ON BANKRUPTCY LAW
10th Annual Norton Bankruptcy Litigation Institute II
Flamingo Hilton, Las Vegas, Nevada
Contact 1-770-535-7722
May 22-25, 1998
COMMERCIAL LAW LEAGUE OF AMERICA
50th New England District Annual Meeting
Ocean Edge Resort & Golf Club, Cape Cod,
Massachusetts
Contact 1-617-720-1355
June 8-9, 1998
TURNAROUND MANAGEMENT ASSOCIATION
Advanced Education Workshop & Legislative Conference
Radisson Plaza, Charlotte, North Carolina
Contact 1-312-857-7734
July 2-5, 1998
NORTON INSTITUTES ON BANKRUPTCY LAW
Western Mountains Bankruptcy Law Institute
Jackson Lake Lodge, Jackson Hole, Wyoming
Contact 1-770-535-7722
October 16-20, 1998
TURNAROUND MANAGEMENT ASSOCIATION
1998 Annual Conference
The Westin Hotel, Chicago, Illinois
Contact 1-312-857-7734
The Meetings, Conferences and Seminars column appears
in the TCR each Tuesday. Submissions via e-mail to
conferences@bankrupt.com are encouraged.
--------
Bond pricing, appearing each Friday, is supplied by DLS
Capital Partners, Dallas, Texas.
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
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herein is obtained from sources believed to be reliable, but
is not guaranteed.
The TCR subscription rate is $575 for six months delivered
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