/raid1/www/Hosts/bankrupt/TCR_Public/980414.MBX
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, April 14, 1998, Vol. 2, No. 72
Headlines
2CONNECT: Creditors' Committee Objects to Auction Sale
AMES DEPARTMENT: Rolando de Aguiar Named New CEO
APOGEE ENTERPRISES: Big Losses Due to Nonrecurring Charges
ARENZANO TRADING: Case Summary & 20 Largest Creditors
BN1 TELECOMMUNICATIONS: Order Authorizes Employ of Counsel
BOSTON CHICKEN: CEO Paid $457,693 Salary in 1997
ERD WASTE: Seeks Extension to Assume or Reject Leases
EVANSVILLE BREWERY: Auctioneer Hopes to Raise $1MM
HALLA GROUP: Sells Halla Pulp and Paper Co. to Bowater
MOLTEN METAL: Applies to Employ Counsel
MONTGOMERY WARD: Seeks to Amend $1,000,000,000 DIP Facility
NETS INC: Memorandum of Law in Support of Plan
OSORIO & WATKIN: Trustee to Oversee Collection of Money
SAMSUNG HEAVY INDUSTRIES: To Sell Division to Volvo
WRT ENERGY: Settlement of Preference Claims
ZILOG INC: New CEO Works to Reverse Decline
Meetings, Conferences and Seminars
*********
2CONNECT: Creditors' Committee Objects to Auction Sale
------------------------------------------------------
The Creditors' Committee files an objection to the
debtor's motion to conduct an auction sale of inventory
outside the ordinary course of business.
The Committee states that it does not have sufficient
information to allow the order to be entered on such short
notice to creditors. The Committee has filed a motion to
convert this case and believes that a trustee would be
better suited to hold the auction sale and to deal with
the auctioneer. The debtor contemplates auctioning all of
its remaining inventory in such auction.
AMES DEPARTMENT: Rolando de Aguiar Named New CEO
------------------------------------------------
On April 1, 1998, Ames Department Stores, Inc. entered
into an employment agreement with Rolando de Aguiar to
retain his services as the Company's Executive
Vice President-Chief Financial Officer. That agreement
calls for his services to commence on April 14, 1998.
APOGEE ENTERPRISES: Big Losses Due to Nonrecurring Charges
----------------------------------------------------------
In its most recent Form 8K filed with the SEC, Apogee
Enterprises Inc., stated that the Company had net
losses for both the fourth quarter and full-year fiscal
1998, mainly due to nonrecurring charges and operating
losses related to the Company's exit from its Asian and
European curtainwall operations. For the fourth quarter,
in addition to previously announced nonrecurring charges
totaling $35.9 million pre-tax or $1.26 diluted per share
related to exiting its European curtainwall operations,
the Company incurred $32.0 million in operating losses
related to its Asian and European curtainwall operations.
While the Auto Glass segment also reported a
fourth quarter loss, both the Glass Technologies segment
and the remaining businesses of the Building Products &
Services segment were profitable in the fourth quarter.
Russell Huffer, President and CEO said, "While we expected
a tough fourth quarter, we did not anticipate the magnitude
of the operating losses from international curtainwall."
For the fiscal year ended February 28, 1998, Apogee had a
net loss of $51.1 million or $1.84 diluted per share,
compared with net earnings of $26.2 million or $0.93
diluted per share in the prior year. The fiscal 1998 net
loss included nonrecurring charges totaling $61.9 million
or $1.83 diluted per share, including the previously
announced $35.9 million pre-tax charge in the fourth
quarter and the $26.0 million pre-tax charge in the third
quarter, plus operating losses of $53.8 million or $1.20
diluted per share related to the Asian and European
curtainwall operations being exited by Apogee.
Apogee had a fiscal 1998 operating loss of $55.3 million,
due to a $96.4 million operating loss in Building Products
& Services resulting from nonrecurring charges and
operating losses related to its exit from Asian and
European curtainwall. Auto Glass operating income
decreased 25 percent in fiscal 1998 to $15.0 million, as
its fourth quarter loss offset a 10 percent increase in
operating income through the first nine months of the year.
Glass Technologies continued to show strong growth, with
operating income up 37% to $27.3 million, led by excellent
performance in each of its businesses.
ARENZANO TRADING: Case Summary & 20 Largest Creditors
-----------------------------------------------------
Debtor: Arenzano Trading Co.,Inc.
500 7th Avenue
New York, NY 10018-4502
Type of business: Manufacturer, wholesaler and importer of
ladies' suits
Court: Southern District of New York
Case No.: 98-42508-brl Filed: 04/9/98 Chapter: 11
Debtor's Counsel: Joshua J. Angel
Jeffrey K. Cymbler
Angel & Frankel, PC
460 Park Avenue
New York, NY 10022-1906
(212) 752-8000
Total Assets: $4,849,964
Total Liabilities: $4,152,242
No. of
Amount Holders
------ -------
Fixed, liquidated secured debt $1,225,205 1
Contingent secured debt $0 0
Disputed secured debt $0 0
Unliquidated secured debt $0 0
Fixed, liquidated unsecured debt $2,927,037 300
Contingent unsecured debt $0 0
Disputed unsecured debt $0 0
Unliquidated unsecured debt $0 0
No. of shares of preferred stock 0 0
No. of shares of common stock 100 2
20 Largest Unsecured Creditors:
Name Nature Amount
---- ------ ------
Forstmann & Co. Trade $747,906
Arc Mills Corp. Trade $341,924
Texfi Blends Trade $247,443
Zelouf International Trade $92,731
W.A.F./SO Textiles Trade $78,604
Century Trading Trade $78,493
Consoltex, Inc. Trade $76,823
Carleton Woolen Mills Trade $64,917
Griffel & Lobel Trade $54,387
Handler Textile Trade $54,402
Manhattan Button Trade $49,539
BWD Insurance Trade $42,755
Southern Textile Trade $30,532
Delta Mills Market Trade $24,410
Sun Pads Trade $18,156
Samuel Goldstein & Co., PC Trade $13,900
Hi-Fashion Fabrics Trade $10,987
La Gibbs Resources Trade $7,791
Charter Fabrics Trade $6,151
BN1 TELECOMMUNICATIONS: Order Authorizes Employ of Counsel
----------------------------------------------------------
The court approved the application of the debtor, BN1
Telecommunications, Inc. to employ Roetzel & Andress as its
general bankruptcy counsel.
BOSTON CHICKEN: CEO Paid $457,693 Salary in 1997
------------------------------------------------
It was reported in The Wall Street Journal on April 13,
1998 that Scott A. Beck, the CEO of Boston Chicken, Inc.,
was paid a salary of $457,693 last year until October.
In addition he received options to buy shares of stock.
The company said that his compensation reflected his
"personal performance and his contribution to the
development and implementation of corporate strategy."
In 1997 Boston Chicken's stock dropped 82%.
ERD WASTE: Seeks Extension to Assume or Reject Leases
-----------------------------------------------------
The debtors, ERD Waste Corp., et al, seek an order
extending the debtors' time to assume or reject certain of
their leases of nonresidential real property until June
30, 1998. The debtors request that the order further
authorize their decision to reject one of their other real
property leases in Waco, Texas.
The debtors believe that their six remaining leases may
prove to be vital to their continued operations and to the
viability of effectively seeking to restructure their
debts and to reorganize their affairs.
The debtors are currently negotiating a deal that could
result in the transfer of at least a portion of Chases's
secured claim to another third party which, if done in
conjunction with new financing, the debtors believe will
form the basis for a plan of reorganization.
The debtors do not want to make a hasty decision to assume
or reject the leases during the initial period of their
cases which could irreparably damage the debtors.
The debtors seek an extension until June 30, 1998.
EVANSVILLE BREWERY: Auctioneer Hopes to Raise $1MM
--------------------------------------------------
Brewers, bottlers, equipment brokers, scrappers and local
company bargain hunters joined the curious Tuesday in the
chilly old beer plant where packaging and bottling lines,
rolling stock and the tool room were sold off in the first
of a two-day auction.
A larger concentration of Evansville-area residents are
expected at the hulking brick complex today at Lloyd
Expressway and Fulton Avenue when effects from the Sterling
Rathskeller will be offered with other antiques,
collectibles and memorabilia.
They will be the last assets of the Evansville Brewing Co.,
Indiana's last major brewer and the bearer of a 147-year-
old local brewing heritage, until December, when it bottled
its last batch of beer. Saddled with crushing debt, the
company formed by local investors in 1987 filed for
bankruptcy in October.
Stuart Millner, president and chief auctioneer with
National Industrial Services Inc. of St. Louis, said he
hopes to raise at least $1 million and up to $1.5 million
by the time the last grain storage and processing, lab and
office equipment is sold this afternoon. When Millner
began the auction just after 10 a.m. Tuesday offering
assorted tools and electrical controls, 300 buyers had
registered. "That's good for us," he said.
The crowd throughout the day Tuesday averaged about 100.
The biggest single purchase Tuesday among some 2,500 lots
of items appeared to be a programmable pallet loader and
stacker, purchased for $75,000 by Tony Varni, an owner of
the 7-Up Bottling Co. in Modesto, Calif. The brewery bought
the machine three years ago for $275,000.
Jerry Alvey, a former plant engineer at the Evansville
brewery who now holds that position at the Samuel Adams
Brewery in Cincinnati, bid on the palletizer, too. He said
he is in the process of upgrading equipment at the
former Hudepohl-Schoenling brew house bought by the
national Adams company last year.
Maurice Bryan, an owner of the 140-year-old Gluek Brewing
Co. of Cold Springs, Minn., said he expected to spend
$10,000 by day's end Tuesday, or about 10 cents on the
dollar for the conveying equipment he sought. "We're
trying to move up to stainless steel conveying equipment,"
he said.
Mike Durnin, a head of the Pittsburgh Brewing Co. regional
sales office in Evansville and a former Evansville Brewing
executive, bought a shrink wrapping machine for $32,500 and
a capper for 40-ounce bottles. Pittsburgh Brewing
bought the Evansville Brewing Co. beer brands and is
scheduled to ship the first beer back to Evansville next
week.
But only the capper appeared destined for Pittsburgh:
Packaging equipment broker Bill Seawright of Lavonia, Ga.,
later bought it from Durnin. Seawright earlier paid
$20,000 for another packaging machine. "What their
problem is here is that the equipment that's not obsolete
needs a lot of updating on it," he said.
In the tool room, a Delta table drill press went for $100,
a large band saw for $1,400 and a Duke shop press for
$1,000. DeWayne McKnight of Murray, Ky., and Roger
Tompkins of Hudson, Iowa, were among the buyers looking for
equipment to resell intact or for scrap. McKnight
bought a pasteurizer for $1,400.
The brewery real estate was bought by a group that includes
Evansville business man John Smith, who also attended the
auction. (Evansville Courier 04/08/98)
HALLA GROUP: Sells Halla Pulp and Paper Co. to Bowater
------------------------------------------------------
South Korea's Halla Group has sold its wholly-owned
Halla Pulp and Paper Co. Ltd. to Bowater Inc. of the United
States for 175 million dollars as part of the **bankrupt**
group's restructuring.
A Halla official said Sunday the fresh money will be used
to pay off the group's liabilities, but gave no further
details. Halla, once the country's 12th-largest
conglomerate based around ship-building, went belly up in
December, a victim of the country's financial crisis.
(Agence France Presse - 04/13/98)
MOLTEN METAL: Applies to Employ Counsel
---------------------------------------
Molten Metal Technology, Inc. and its affiliates as
debtors are seeking, with the asset of the Official
Committee of Unsecured Creditors, authority to employ the
law firm of Hamilton, Brook, Smith & Reynolds as special
intellectual property counsel.
The debtors hold approximately 100 pending domestic and
foreign patents and patent applications. The debtors
need the services of the firm to submit applications
seeking to patent new and additional technologies.
The firm has been engaged by the debtors previous to the
bankruptcy filing, and the firm will charge its customary
hourly rates, between $90 and $370.
MONTGOMERY WARD: Seeks to Amend $1,000,000,000 DIP Facility
-----------------------------------------------------------
Judge Walsh approved the agreement by GECC and the Debtors
to revise Minimum EBITDA targets to be not less than:
Fiscal Quarter Revised EBITDA Target
-------------- ---------------------
For the three Fiscal Months ending
The first Fiscal Quarter of 1998 $(125,000,000)
For the six Fiscal Months ending
The second Fiscal Quarter of 1998 $(150,000,000)
For the nine Fiscal Months ending
The third Fiscal Quarter of 1998 $(185,000,000)
For the twelve Fiscal Months ending
The fourth Fiscal Quarter of 1998 $(185,000,000)
For the twelve Fiscal Months ending
The first Fiscal Quarter of 1999 $(175,000,000)
For the twelve Fiscal Months ending
The second Fiscal Quarter of 1999 $(150,000,000)
The Debtors asked Judge Walsh to approve the Amendment of
their Postpetition Loan Agreement with General
Electric Capital Corporation by lowering the EBIDTA
Covenant Levels so as to avoid an anticipated default in
this Covenant on or before April 1998, and to approve as
well the Debtors' payment of a fee of $1,000,000 to GECC
for such amendment.
The Debtors' counsel told Judge Walsh that, originally,
the Bank Group had filed an Objection to the Amendment on
the grounds that the Debtors failed to satisfy the "sound
business purpose" test required under the Code in order to
obtain approval for out-of-the-ordinary course activities.
Counsel for the Creditors' Committee intervened to make a
statement about the payment of the million dollar fee to
GECC. GECC's dominance in this case is such, said the
Counsel, that it should not be exacting a million-dollar
fee for relaxing the Covenant.
Judge Walsh replied that GECC was exercising a legal right.
It may be disappointing, said Judge Walsh, but this does
not obviate GECC's right to be paid for making concessions
to the Debtors. The million-dollar fee is within the
ballpark of fees paid for such concession, bankruptcy and
non-bankruptcy. (Montgomery Ward Bankruptcy News 09-Apr-1998)
NETS INC: Memorandum of Law in Support of Plan
----------------------------------------------
Nets Inc., the debtor, and the Official Committee of
Unsecured Creditors state that the reorganization plan of
the debtor meets all standards for confirmation set forth
in the Bankruptcy Code and the proponents request that the
plan be confirmed.
OSORIO & WATKIN: Trustee To Oversee Collection of Money
-------------------------------------------------------
Judge James F. Queenan Jr. authorized the appointment of an
interim trustee in the confusing affairs of Osorio and
Watkin, D.M.D., PC, a partner in an ambitious
but failed chain of dental clinics in New England.
The dental chain, which at one time was said to operate as
many as 35 clinics, disintegrated two months ago when
Osorio and Watkin's partner, First New England Dental
Centers Inc. of Malden, filed for Chapter 11 protection
against creditors in Delaware.
When Osorio and Watkin failed to meet its payments to two
of its major lenders, the lenders petitioned
the court for an involuntary bankruptcy declaration,
shortly thereafter followed by a motion for an interim
trustee to oversee the collection of accounts receivables.
The two lenders, Imprimus Investors LLC and Wexford
Spectrum Investors LLC, both of Greenwich, Conn., claim
they provided $15 million in bridge financing to the dental
chain in July 1997, but that no payments on the notes had
been made.
The partnership continues to owe dentists and other clinic
employees about $1.2 million in back wages, according to
one estimate. It is believed that possibly as much as $2
million continues to be outstanding in Osorio and Watkin's
accounts receivable.
Lawyers representing different groups of former Osorio and
Watkin dentists said about $600,000 had been collected so
far but they could not tell Judge Queenan how aggressive
the dentists were in their collection efforts.
Judge Queenan said that there was reason for concern that
dentists might not have enough incentive to hasten
collection. The judge also expressed concern that some of
the dentists were not represented and that some questions
could arise about which money should go to the Osorio and
Watkin estate. (Telegram Gazette Worcester - 04/10/98)
SAMSUNG HEAVY INDUSTRIES: To Sell Division to Volvo
---------------------------------------------------
Samsung Heavy Industries says it expects to sell its
construction equipment division to a unit of Swedish auto
maker Volvo in a deal valued at $765 million. The big
Korean shipbuilder says the sale would be the largest ever
by a South Korean company to foreign interests.
(The Wall Street Journal 13-Apr-1998)
WRT ENERGY: Settlement of Preference Claims
-------------------------------------------
WRT Creditors' Liquidation Trust, by its Trustee, Goldin
Associates, LLC is seeking authority to settle preference
claims of $75,000 or less. 368 of the 400 preference
actions seek recoveries of $75,000 or less. These claims
seek a total of $3,910,246 with an average claim of
$10,625.
Settlements of preference claims exceeding $75,000
totaling approximately $4.86 million, will continue to be
brought before the court for approval. The relief
requested does not extend to claims other than preference
claims.
ZILOG INC: New CEO Works to Reverse Decline
-------------------------------------------
Zilog Inc. recently lost one of its major customers, Lucent
Technologies Inc. Sales to Lucent in 1996 were $38
million, or 13 percent of Zilog's total revenues.
And prices for the application-specific computer chips
Zilog makes have fallen 10 percent to 20 percent in the
past three quarters, cutting into profits.
Standard & Poor's lowered its outlook on the company from
"positive" to "negative." S&P also said it may lower
Zilog's bond ratings later this year if the company does
not improve its financial picture. But Zilog officials
said the company is doing fine and is in an expansion mode.
"We know we have too much debt expense," Bob Collins, chief
financial officer at Zilog, said, "but we recapitalized the
company that way to have money to invest in future growth."
The recapitalization of the company happened when Zilog was
purchased in January by Texas Pacific Group, which
specializes in turning struggling companies around.
Zilog is $280 million in debt since the recapitalization.
Interest payments are $28 million a year. In the first
half of this year, the company expects to earn $10 million
in before-tax profits. The earnings estimate is what
triggered the "negative" rating, said Bruce Hyman, a
director at Standard & Poor's. But he said the Campbell,
Calif.-based company "has a strong fundamental core
business. They're not close to going bankrupt."
Zilog has $80 million in cash on hand, and that's enough
for the debt payments for three years, Collins said.
Lucent used one of Zilog's chips in a computer modem, but
the modem has been redesigned and doesn't need the chip.
The strategies of the company being implemented by the new
CEO Curt Crawford include:
Expanding the market reach for existing Zilog products by
introducing them to new geographic areas and into new
products.
Investing more in research and development to create new
products.
Possibly acquiring other companies.
Another plus for the company is several undisclosed new
products that will come out this year. (Idaho Statesman
04/10/98)
Meetings, Conferences and Seminars
----------------------------------
April 20-21, 1998
THE PRACTICING LAW INSTITUTE
20th Annual Current Developments in Bankruptcy
and Reorganization
San Francisco Hilton & Tower, San Francisco,
California
Contact: 1-800-260-4PLI
April 23-24, 1998
NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
1998 Spring Education Seminar
Hawthorne Suites Hotel, Charleston, South Carolina
Contact: 1-803-252-5646
April 30-May 3, 1998
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Grand Hyatt, Washington, D.C.
Contact: 1-703-739-0800
May 1-3, 1998
NATIONAL ASSOCIATION OF CONSUMER BANKRUPTCY ATTORNEYS
6th Annual Convention
Fountainbleau Hilton Resort, Miami, Florida
Contact: 1-703-803-7040
May 22-25, 1998
COMMERICAL LAW LEAGUE OF AMERICA
50th New England District Annual Meeting
Ocean Edge Resort & Golf Club
Cape Cod, Massachusetts
Contact 1-617-720-1355
May 31-June 5, 1998
COMMERICAL LAW LEAGUE OF AMERICA
CLLA Credit Institute
Marquette University, Milwaukee, Wisconsin
Contact 1-312-781-2000
June 3-6, 1998
ASSOCIATION OF INSOLVENCY ACCOUNTANTS
Seminar
San Francisco, California
Contact 1-541-858-1665
June 8-9, 1998
TURNAROUND MANAGEMENT ASSOCIATION
Advanced Education Workshop & Legislative Conference
Radisson Plaza, Charlotte, North Carolina
Contact 1-312-857-7734
June 11-12, 1998
RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC.
1st Annual Conference on Corporate Reorganizations
The Palmer House, Chicgo, Illinois
Contact 1-903-592-5169 or ram@ballistic.com
June 11-14, 1998
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, Michigan
Contact: 1-703-739-0800
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
July 16-19, 1998
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Sea Crest Resort, Falmouth, Massachusetts
Contact: 1-703-739-0800
July 23-24, 1998
THE PRACTICING LAW INSTITUTE
How to Handle Consumer Bankruptcy Cases: A Practical
Step-by-Step Guide
PLI Conference Center, New York City
Contact: 1-800-260-4PLI
July 24-29, 1998
COMMERICAL LAW LEAGUE OF AMERICA
104th Annual Convention
Ritz Carlton, Amelia Island, Florida
Contact: 1-312-781-2000
August 6-9-1998
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
Daufuskie Island Club & Resort,
Hilton Head, South Carolina
Contact: 1-703-739-0800
September 9-13, 1998
NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
Annual Convention
Sheraton El Conquistador, Tuscon, Arizona
Contact: 1-803-252-5646
September 17-20, 1998
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
The Inn at Loretta, Santa Fe, New Mexico
Contact: 1-703-739-0800
October 16-20, 1998
TURNAROUND MANAGEMENT ASSOCIATION
1998 Annual Conference
The Westin Hotel, Chicago, Illinois
Contact 1-312-857-7734
November 30-December 1, 1998
RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC.
5th Annual Conference on Distressed Debt
Plaza Hotel, New York, New York
Contact 1-903-592-5169 or ram@ballistic.com
December 3-5, 1998
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Westin La Paloma, Tucson, Arizona
Contact: 1-703-739-0800
The Meetings, Conferences and Seminars column appears
in the TCR each Tuesday. Submissions via e-mail to
conferences@bankrupt.com are encouraged.
*********
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 Lexy Mueller, Editors.
Copyright 1998. 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 * * *