/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/980421.MBXT R O U B L E D C O M P A N Y R E P O R T E R Tuesday, April 21, 1998, Vol. 2, No. 78 Headlines AL TECH: Seeks Extension of Exclusivity AR ACCESSORIES: On Auction Block BARRY'S JEWELERS: Reaches Agreement For Plan COLUMBIA HCA: Sells Surgery Centers for $550 Million GTE WIRELESS: Tower Meeting Canceled in Anderson GIBSON'S HOLDING: Seeks Extension of Exclusivity GUY F. ATKINSON: Exclusivity Extended To April 30 HOME HOLDINGS: Committee Objects to Intervention JACKSON BROOK: Mercy and Maine Both Interested in Purchase KIA MOTORS: To Resume Production KIA MOTORS: Union, Receivers Seek Settlement on Strike LOT$OFF CORP: Completes Sale of Contingent Claim MAIDENFORM: Settlement Agreement With Bratex MAIDENFORM: Taps Real Estate Broker MOBILEMEDIA: Reportedly in Talks With Metrocall MONTGOMERY WARD: Seeks Exclusivity Extension to 1/29/99 NAL FINANCIAL: Seeks Authority to Sell Portfolios PEGASUS GOLD: Reports 1997 Year-End Results QUADRAX CORP: To Employ Special Corporate Counsel RIVER OAKS: Receives Final DIP Approval SA TELECOMMUNICATIONS: Seeks Bar Date THE WIZ: Seeks 90-Day Exclusivity Extension To July 1 TIE COMMUNICATIONS: Files For Bankruptcy - Lays Off 150 TOWN & COUNTRY: Disclosure Statement Approved VENTURE STORES: Order Establishes Bar Dates VENTURE STORES: Court Enters Orders WESTERN PACIFIC: Charter Airline is Buying the Leftovers WESTMORELAND COAL: Amends its Reorganization Plan Meetings, Conferences and Seminars ********* AL TECH: Seeks Extension of Exclusivity --------------------------------------- Al Tech Specialty Steel Corporation is seeking to extend the period during which the debtor shall have the exclusive right to file a plan to and including August 31, 1998 and the period during which the debtor shall have the exclusive right to solicit acceptances of the plan to October 30, 1998. The debtor states that it has made progress in its case. The debtor has drafted a five-year business plan, and the debtor has held informal discussions with representatives of the Merger Banks. Formal negotiation with the United Steelworkers of America are ongoing. Claims against the debtor total $238,460,579. The debtor has obtained a Bar Date, and the debtor has rejected several leases and executory contracts. The debtor obtained an order authorizing the natural gas purchase agreement, and the debtor has made extensive efforts, according to the debtor, to evaluate and coordinate the sale of a variety of real property and personal property that is no longer useful or necessary to the debtor's operations. AR ACCESSORIES: On Auction Block -------------------------------- AR Accessories Inc. is to be sold at auction May 6 in U.S. Bankruptcy Court in Milwaukee. Company executives have said there was a possibility that a buyer might purchase the former Amity Leather as an ongoing business, but it appears more likely that the 81-year-old company will be shut down. Company executives say there are several prospective purchasers for the company, but they declined to disclose names, citing confidentiality agreements. Executives have testified in court that the sale is unlikely to garner enough money to provide any proceeds for distribution to unsecured creditors. In its bankruptcy petition, the company listed debts of $69.96 million and assets of $61.76 million. The debt includes $42 million of secured debt owed to Bank One Wisconsin, Firstar Bank Milwaukee, and Harris Bank and Trust in Chicago. AR shut down its manufacturing operation in West Bend recently but maintains a headquarters on Brown Deer Road in Brown Deer and a distribution center in West Bend. The company also runs a chain of 70 retail stores known as Wallet Works. The Wallet Works division also is under Bankruptcy Court protection. A motion approved by Bankruptcy Judge James E. Shapiro sets the opening bid for the entire AR business at $13.5 million, and $4 million for the Wallet Works business. The minimum bid for the West Bend real estate is $2.8 million. Bidders can bid for the entire company or for specific parts of the company. Shapiro has denied the company's motion to pay stay-put bonuses of $132,496 to Pendergast and to Paul Christensen, vice president of human resources and administration. The bonuses were opposed by both U.S. Trustee John R. Byrnes and by United Paperworkers International Union Local 7915. The union represents 192 AR workers who are owed more than $250,000 in vacation pay. (Milwaukee Sentinel Journal - 04/16/98) BARRY'S JEWELERS: Reaches Agreement For Plan -------------------------------------------- Barry's Jewelers announced that it has reached agreement with key constituents in its Chapter 11 proceeding regarding the terms of a consensual plan of reorganization. Under the terms of the plan agreement, the Bank Group, the Official Unsecured Creditor's Committee, the Official Bondholder's Committee, the Unofficial Equity Committee and Barry's generally have agreed to the following treatment of creditors and shareholders: 1. The Pre-Petition Bank Group will be paid in full. 2. General Unsecured Creditors will be paid the lesser of 15 cents on the dollar or $2.55 million (to be distributed on a pro rata basis). Claims of General Unsecured Creditors are currently estimated to be approximately $15 million to $17 million. 3. The Pre-Petition Bondholders have agreed to convert their pre-petition claim of approximately $58 million into equity of reorganized Barry's. In addition, they will ultimately be entitled to participate, pro rata, in an infusion of $15 million in new equity capital. DDJ Capital, Mitchell Hutchins and/or funds managed by them (which collectively hold approximately 50 percent of Pre-Petition Bondholders Claims) agreed in principle to contribute to Barry's an amount equal to the above mentioned $15 million minus any amount contributed by other bondholders. 4. Existing equity will be entitled to receive its pro-rata share of warrants to purchase up to 5 percent of the stock of reorganized Barry's. Other provisions of the agreement include that the management team for reorganized Barry's will be headed by Randy McCullough as chief executive officer and by Peter Healey as chief financial officer, subject to the execution of definitive employment agreements. The board of reorganized Barry's shall be a seven-member board to be appointed as follows: One member to be nominated by the Bondholder Committee, two members to be nominated by DDJ Capital, two members to be nominated by Mitchell Hutchins, and, subject to the execution of definitive employment agreements, McCullough and Healey. The parties also agreed that Barry's may relocate its headquarters office space to Austin, Texas, and to support the continued use of cash collateral until the earlier of the effective date of the plan or Aug. 31, 1998, subject to a budget. Moreover, the agreement provides for the resolution of various litigation matters on or before the effective date of the plan. Most of the foregoing is subject to certain conditions, including bankruptcy court approval of the Barry's plan. In announcing the agreement to the court, Barry's informed Judge Vincent Zurzolo that it expected to have its plan and disclosure statement on file by April 30, 1998. The hearing date for approval of the adequacy of the disclosure statement has been set for June 3, 1998, at 2:30 p.m. Commenting on the announced plan, Healey observed: " Most importantly, the $15 million equity infusion, combined with the conversion to equity by the Pre-Petition Bondholders, will allow Barry's to emerge as one of the better capitalized companies in the retail jewelry industry. COLUMBIA HCA: Sells Surgery Centers for $550 Million ---------------------------------------------------- Columbia HCA/Healthcare Corp. has agreed to sell the Woodward Park Surgicenter in Fresno and 33 other outpatient surgery centers in 12 states to Healthsouth Corp. in Birmingham, Ala., for $550 million, company officials announced Thursday. Nashville-based Columbia, one of the nation's largest for- profit hospital chains has been under investigation by the government for possible Medicare and Medicaid fraud. The company recently had a management shake-up and revealed plans to sell off nearly one-third of its 336 hospitals and health-care businesses in an effort to trim operations. The sale will effectively move Columbia out of the Fresno market. Columbia had a short-lived and financially troubled business partnership with Fresno-based physicians group Valley PrimeCare, known as Columbia-PrimeCare. Together the local doctors and Columbia operated primary group medical sites in Fresno and Oakhurst. Last year, Columbia sold the practices it had capitalized to Community Health System in Fresno. Valley PrimeCare filed bankruptcy. Healthsouth will grow to include 212 outpatient surgery centers with the purchase, expected to be completed by September. Columbia will have 116 surgery centers left.(FresnoBee - 4/17/98) GTE WIRELESS: Tower Meeting Canceled in Anderson ------------------------------------------------ An attempt to settle lawsuits involving Anderson Township, the Ohio Department of Transportation and cellular phone companies has failed. GTE Wireless and AirTouch Cellular have filed lawsuits asking for court authorization to erect cellular phone towers in Anderson on land leased from ODOT. Officials from Anderson, ODOT, and the Ohio Township Association had scheduled a meeting last week. However, ODOT canceled the meeting shortly before it was scheduled to begin in Columbus. "I absolutely was flabbergasted," said Anderson Township Trustee President Russell Jackson. ODOT canceled after the department's attorneys advised it would not be prudent to hold discussions while the lawsuits were in progress. "They had agreed to hold the meeting," said Jackson, "even though they knew full well the lawsuits were in progress. Then their attorneys turned around and said it wasn't a good idea to hold the meeting while the lawsuits were in progress. It was quite strange." The state township association wanted to attend the meeting because townships across the state are facing problems similar to Anderson. ODOT is leasing land beside interstates to cellular phone companies in a move expected to bring $20 million a year in lease payments to the department. In Anderson, GTE Wireless and AirTouch are leasing land from ODOT to build 200-foot towers near Interstate 275. AirTouch proposes building a tower at the cloverleaf at U.S. 52, while GTE Wireless wants to build one off Five Mile Road. Jackson says the leases violate his township's zoning laws, and neither ODOT, nor the cellular phone companies, have the right to disregard them. The two cellular phone companies have asked Franklin County Common Pleas Court to rule that their leases from ODOT are not subject to township zoning. Anderson Township has asked Hamilton County Common Pleas Court Judge Ralph Winkler to issue a restraining order stopping erection of the towers. The township has also asked Franklin County Common Pleas Court to dismiss the AirTouch and GTE suits. Winkler later this month will consider issuing the restraining order. So far, Anderson has spent $24,000 in its legal battle. Jackson had hoped the meeting which ODOT canceled would have led to a settlement. As the legal battle continues, he says the community will be forced to spend even more taxpayer dollars. Trustee Peggy Reis said, "It is ridiculous for the township to have to spend taxpayer money to protect residents against the actions of a state agency which is also funded by taxpayer money." (Cincinnati Post - 04/16/98) GIBSON'S HOLDING: Seeks Extension of Exclusivity ------------------------------------------------ Gibson's Holding Company et al., debtors, are seeking an extension of the period during which the debtors have the exclusive right to file a plan or plans of reorganization by approximately 30 days through May 18, 1998 and extending the period during which the debtors have the exclusive right to solicit acceptances of such plan or plans by approximately thirty days through June 15, 1998. The debtors state that they have made significant progress in addressing the operational and financial problems which led to the filing of these cases. The restoration of better trade credit to be one of the debtors' priority goals. They have implemented a reclamation claims settlement program, and they have developed a three year plan with the Committee. They must still resolve their pre-petition federal income tax liabilities, in excess of $4 million prior to the confirmation of a plan of reorganization. GUY F. ATKINSON: Exclusivity Extended To April 30 ------------------------------------------------- The court extended Guy F. Atkinson Co. of California's exclusive right to file a reorganization plan and solicit plan acceptances until April 30 and July 1, respectively, subject to certain terms and conditions. Atkinson has agreed not to file a plan that lacks the support of the official creditors' committee, Wells Fargo Bank N.A. as agent for the banks, and bonding companies Fidelity & Deposit Co. of Maryland and American Insurance Group of Cos., without first making a good faith attempt to meet and confer with them. (Federal Filings Inc. 17-Apr-98) HOME HOLDINGS: Committee Objects to Intervention ------------------------------------------------ The Official Committee of Unsecured Creditors objects to the motion for leave to intervene filed by certain policyholders of Home Insurance Company. The Committee understands that the debtor will file a detailed objection to the motion, which the Committee fully supports. The movants hold no required direct interest in the debtor. At best, they are creditors of the debtor's subsidiary have "purchased comprehensive general liability, umbrella and excess policies from Home Insurance." Furthermore, the Committee states that the movants' interests are already adequately represented, if not by Home Insurance, then certainly by the Insurance Commissioner of New Hampshire. This intervention also will only delay this case, which has a hearing on confirmation scheduled for April 29 and April 30, 1998. JACKSON BROOK: Mercy and Maine Both Interested in Purchase ---------------------------------------------------------- Mercy Hospital announced Thursday it wants to buy Jackson Brook Institute, the bankrupt psychiatric hospital in South Portland. The hospital's announcement that it wants to provide nonprofit mental-health services elated state health officials who have been hoping for a local owner of Jackson Brook. It also prompted Maine Medical Center, Mercy's principal competitor in Portland, to reveal that it also wants to purchase the financially troubled hospital. Officials at Mercy and Maine Med both said it would be good to put Jackson Brook in the hands of local, nonprofit owners. But a lawyer for Jackson Brook said the hospitals would have to compete with other buyers in a process that will balance the interests of Jackson Brook, its creditors and Maine's health-care system. In an agreement with the state that was accepted by the court, the owners agreed to sell the hospital within eight months to satisfy creditors. If an owner cannot be found by the deadline, JBI's parent company may lose any say over who buys the hospital. At that point, authority would rest entirely with the bankruptcy court. It's unclear what the hospital's total debt is, but Jackson Brook's top 10 creditors have filed claims for $7.4 million in unpaid bills. Mercy's chief executive officer, Howard Buckley, said Thursday the hospital was prepared to do "whatever it takes, within sound business practices," to restore Jackson Brook to a sound footing. He said Mercy also was interested in running the Smith House, a series of free-standing clinics also operated by Jackson Brook's owners that provide outpatient services to clients from York to Augusta. Mercy's announcement had the effect of forcing the hand of MaineHealth, the parent company of Maine Med, to announce its interest in Jackson Brook. MaineHealth has insisted it was only studying the possibility of bidding for Jackson Brook. On Thursday, the state's largest health system put its cards on the table. "We're ready and we're very interested," said Vincent Conti, Maine Med's president. "We need to be a little more visible now in our interest." With a 26-bed psychiatric unit and the state's largest outpatient mental-health program, Maine Med has been considered the top local candidate. Both hospital administrators said they would consider joining forces on a proposal to buy Jackson Brook. But competing offers also are a possibility. Jackson Brook remains in operation, largely because the Department of Human Services agreed to the early release of $2.3 million in payments to the hospital after it went bankrupt. (Portland Press Herald; 04/17/98) KIA MOTORS: To Resume Production -------------------------------- Kia Motors Co. union has announced plans to resume production after receiving written assurance negating the possibility of a third-party takeover. Union spokesman Lee Jung-haeng said, "Workers decided to put a partial end to the four-day halt, as extension of the strike may harm the very purpose of our just demand." Lee added, "If the government and creditors do not come up with a comprehensive answer by Friday, the general strike will continue on April 27." He said a joint press conference will be held by unionists from South Korea's six automakers to unveil pending strike plans. Court-appointed manager Ryu Jong-yul was allowed into Kia Motors building in downtown Seoul, four days after about 50 union members blocked his entry last Thursday. About 11,000 union members began the rally in Seoul fearing the court-appointed outside manager might arrange a third- party takeover of the cash-strapped company. Production halted Thursday at Kia's Sohari and Asan factories, with production capacity of 3,000 cars per day. The Seoul District Civil Court initiated the Kia Group's court receivership process on Wednesday by appointing Ryu Jong-yeul, former vice president of South Korea's Hyosung Industries Co, as manager for Kia and Asia Motors. Kia Group was the nation's 8th largest conglomerate until it defaulted on loans surpassing $5.36 billion (7.5 trillion won) on July 15, 1997. (UPI:International - 04/20/98) KIA MOTORS: Union, Receivers Seek Settlement on Strike ------------------------------------------------------ Kia Motors' union, receivers seek settlement on strike Striking workers at South Korea's ailing Kia Motor Corp. backed down from their hardline stance Sunday to seek an agreement with receivers on ending their strike. "Talks are under way between union leaders and receivers," a Kia Motors spokesman told AFP. "Options included a union proposal to end the strike in return for a pledge by receivers that the company will not be sold to a third party," he said, indicating Kia's 13,800 union members may end their strike soon. The dialogue followed three days of labor protests, prompted by a court decision last Wednesday to put Kia under receivership. Labor strife subsided Sunday, but some 1,000 dissidents and radical students rallied at a park in Seoul to support the militant Korean Confederation of Trade Unions (KCTU). The KCTU, one of South Korea's two umbrella union groups, has threatened to organize a general strike next month if the government goes ahead with its harsh economic restructuring. The Sunday rally turned into an anti-US protest, with slogans accusing Washington of forcing South Korea to accept a humiliating 57-billion-dollar bailout from the International Monetary Fund. "We need renegotiations on the harsh terms of the IMF bailout," a dissident leader said. But Kia's workers were absent, showing their new tactic following a change in their management. On Saturday, receivers replaced Kia Motors president Park Je-Hyuk with Song Byung-Nam, head of Kia Information System. Park has offered to resign since Kia's union launched the strike last Thursday. "Union leaders believe the strike has failed to win public support," the Kia spokeman said. The government of President Kim Dae-Jung, who took office in February, has appealed for industrial peace, urging both unions and management to avoid a showdown through dialogue. Lay-offs were a key condition demanded by the IMF in return for the bailout agreed in December, ending South Korea's hallowed lifetime employment practice. But KCTU leaders argued that union workers understood companies must layoff employees to overcome the financial crisis, but not when they refuse to reform themselves before taking it out on the workers. Some 10,000 workers nationwide are losing their jobs daily in South Korea, mostly among white-collar workers in financial institutions and management sections of huge family-run conglomerates. (AgenceFrancePresse- 04/19/98) LOT$OFF CORP: Completes Sale of Contingent Claim ------------------------------------------------ LOT$OFF Corporation reported that it completed a corporate reorganization involving the formation of a partnership to effect the sale of a contingent claim on a portion of its potential net proceeds from a judgment the United States District Court in San Antonio entered in its favor against The Chase Manhattan Bank for the bank's role in the conversion of certain shares of the Company's old common stock. The Company has received $5,800,000, or 58 cents on the dollar, from the partnership for a $10,000,000 portion of the judgment against Chase. On December 4, 1997, "after having considered the entire record, including the jury's answers to the special interrogatories," United States District Judge H.F. Garcia confirmed a jury's November 20, 1997 verdict obtained in the Company's lawsuit against Chase and others, and the Court entered the judgment against Chase in the Company's favor for $148,575,000 plus costs of court, pre-judgment interest and post-judgment interest. While the Company has no material present financial obligation to the partnership, upon receipt of net proceeds from Chase, or otherwise, attributable to the judgment, the limited partners could receive as much as $9,000,000 - $10,000,000 according to a scheduled payout with respect to their contingent claim. Coincident with the closing of the transaction, the Company amended its credit agreement with its asset based lender with whom the Company has a $15,000,000 revolving credit facility waiving any and all defaults. MAIDENFORM: Settlement Agreement With Bratex -------------------------------------------- Maidenform Worldwide Inc, et al, debtors, seek approval of a settlement agreement with Bratex Dominicana C. Por A. Bratex is an unaffiliated, third party foreign contractor that sews and finishes the debtors' merchandise. The Bratex Agreement resolves all disputes between the parties related to the debtors' previous obligations. The agreement also establishes a revised arrangement based on production commitments. The Bratex Agreement runs until December, 1999. MAIDENFORM: Taps Real Estate Broker ----------------------------------- Maidenform Worldwide Inc, et al, debtors, seek to hire Cushman & Wakefield of New Jersey, Inc. to serve as exclusive real estate broker of the disposition of certain real property, the debtors' distribution facilities in Jacksonville, Florida and Corlandville, New York. MOBILEMEDIA: Reportedly in Talks With Metrocall ----------------------------------------------- MobileMedia is reportedly in talks to be purchased by Metrocall Inc., the second largest domestic paging company and an issuer to the high yield market. MobileMedia postponed a disclosure hearing involving the terms of its bankruptcy because of continued discussions with its creditors and outside parties last week. Sources said Metrocall was the more likely buyer, although Arch Communications has to be considered a suitor as well. MobileMedia's distressed bonds traded up for the week, from about 9 to 12.5 on the news last week. Sources said the addition of MobileMedia's three million in paging subscribers and its two-way technology spectrum it owns would be a good fit for Metrocall, which has about four million in paging units. Under the exit strategy devised by MobileMedia, the bank lenders were to receive another $150 million in new debt as well as equity, while the subordinated bondholders were expected to receive only 3% in equity. (Copyright American Banker Inc. - Bond Buyer 1998 HighYieldReport- 04/20/98) MONTGOMERY WARD: Seeks Exclusivity Extension to 1/29/99 ------------------------------------------------------- In keeping with its goal of filing a plan of reorganization by early 1999, Montgomery Ward is seeking to extend its exclusive plan filing and solicitation periods to Jan. 29,1999 and March 30, 1999, respectively. "It is unrealistic to think that the Debtors or any creditor or other party in interest will be in a position to formulate, promulgate and build a consensus to support a reorganization plan before the end of the year," the retailer asserted. (Federal Filings Inc. 20- Apr-98) NAL FINANCIAL: Seeks Authority to Sell Portfolios ------------------------------------------------- NAL Financial Group, Inc., debtor, and its affiliates, files a motion for entry of an order authorizing the sale of the debtor's loan and lease portfolios. The debtors own the Textron portfolios, in which they believe they have equity in excess of $3.5 million. The debtors also own the Greenwich Portfolios and certain additional portfolios. The debtors have set May 4, 1998 as the auction date. PEGASUS GOLD: Reports 1997 Year-End Results ------------------------------------------- Pegasus Gold Inc. reported its year-end results. As reported earlier, the Company's six mines produced 469,952 ounces of gold in 1997 at a total cash cost of $308 per ounce, compared to 497,340 ounces at a total cash cost of $301 per ounce a year earlier. During the fourth quarter of 1997, the Company produced a total of 116,902 ounces of gold compared to 146,107 ounces in the fourth quarter of 1996. Total cash costs in the fourth quarter of 1997 were $339 per ounce compared to $303 per ounce for the same period in 1996. For 1997, the Company reported a net loss of $512.8 million or $12.40 per share, compared to a net loss of $21.6 million or $0.53 per share in 1996. The net loss for 1997 included $482.1 million, or $11.66 per share, for the effects of property write-downs, restructuring charges, increased estimates of future closure and reclamation costs, the write-down of available for sale securities, and losses on foreign exchange contracts, offset by gains from the closeout of the hedge portfolio. The net loss for 1996 included the effects of accelerated depreciation and amortization, increased estimates of future closure and reclamation costs and property write-downs totaling $19.4 million, or $0.48 per share. Excluding the effects of the above, the net loss for 1997 would have been $30.7 million or $0.74 per share, compared to $2.2 million or $0.05 per share in 1996. Following a recalculation of the ore reserves using a gold price of $350 per ounce, a review of the carrying value of its mineral properties, and the close-out of the entire hedge portfolio, the Company recorded after-tax, non- cash property write-downs totaling $90.3 million in the fourth quarter 1997. The write-downs include Florida Canyon ($25.6 million), Montana Tunnels ($24.4 million), Mt. Todd ($25.3 million), and $15.0 million of other property write- downs at Zortman, Pullalli, and Beal Mountain. As a result, the Company had a net loss of $76.9 million, or $1.85 per share in the fourth quarter of 1997, compared to a loss of $12.1 million or $0.30 per share in 1996. The Company reassessed the recoverability of the carrying value of its operating and development properties during the fourth quarter of 1997, in light of the close- out of the Company's entire hedge portfolio in December 1997 and January 1998. With no price protection for current or future gold production, the Company adjusted the gold price used in the impairment test to the spot price of $305 per ounce for 1998 plus the forward curve for future years. As a result of this reassessment, after- tax, non-cash property write- downs were recorded at Florida Canyon and Montana Tunnels of $25.6 million and $24.4 million respectively, in the fourth quarter. In addition, the Company received an updated estimate of the fair value of the Mt. Todd assets. The revised estimate resulted in an additional write-down of $25.3 million for Mt. Todd. As previously reported, the Company has decided that it will not construct the Zortman Extension Project and will proceed with the reclamation of the existing site. Factors contributing to this decision included the IBLA's inaction on the appeal of the Record of Decision and the recalculation of the ore reserves at $350 per ounce gold which shows that the project cannot support the $30 to $40 million capital investment necessary to construct the expansion. The Company determined that at current gold prices, and with a reduced reserve base, the project is uneconomic, and therefore, the Company wrote down the remaining development costs and equipment totaling $9.1 million. The Company also recorded a provision of $41.8 million to accrue the remaining reclamation liabilities at the site, and $4.4 million to accrue anticipated care and maintenance costs. Additionally, in the fourth quarter of 1997, the Company recorded a $5.0 million write-off of the remaining development costs at the Pullalli Project. Currently, the Company is attempting to sell the project. In December 1997 and January 1998, the Company closed out all its forward sales contracts. This was in response to a demand by certain of the Company's lenders who exercised the right to set-off any proceeds received from the close- out of forward sales contracts against the balances owing to the lenders under the Revolving Credit Facility (the ``Facility''). In total, the Company has recorded a $88.7 million gain on closeout of these contracts, comprised of $53.0 million relating to contracts closed out in 1997 and $35.7 million for mark-to-market adjustments for closeouts in January 1998. $30.5 million of the proceeds on closeout were received in cash with $58.2 million of the proceeds used to offset a portion of the foreign currency losses and balances owing to the lenders under the Facility. The Company had losses on disposition of assets and investments in 1997 totaling $28.1 million including $18.4 million of losses on foreign currency contracts, $10.4 million of losses on the disposition of investments and mark-to-market adjustments of investment securities, and $0.7 million of gains on the disposal of fixed assets. Revenues in 1997 from the sale of gold and other metals, excluding the effects of hedging activity, declined 15 percent to $185.4 million, compared to $219.4 million in 1996, as a result of lower production. The Company's average realized price for gold in 1997 was $415 per ounce, compared to $426 in 1996 and an average spot gold price of $337 per ounce for 1997. The use of forward sales and other hedging programs added $41.1 million to revenue in 1997, (excluding the $88.7 million gain on the closeout of the hedge portfolio), compared to $20.3 million in 1996. During the fourth quarter of 1997, revenues from gold and other metals totaled $49.3 million, compared to $67.5 million in 1996. The Company realized $373 per ounce of gold in the quarter, compared to $424 per ounce for the same quarter in 1996. The average spot price was $306 per ounce in the last quarter of 1997. During 1997, revenues from the sale of other metals contributed 14 percent to the total sales of the Company. Other metal revenues increased in 1997 by 14 percent to $31.7 million compared to $27.9 million in 1996. The higher revenue is attributable primarily to higher production of zinc and lead combined with an increased realized price for zinc at Montana Tunnels. Average realized prices for 1997 were $4.60 per ounce, $0.54 per pound, and $0.26 per pound for silver, zinc, and lead, respectively, compared to $5.05, $0.49, and $0.28, respectively, in 1996. Sales of other metals were $5.7 million in the fourth quarter of 1997, compared to $5.7 million during the same period of 1996. Fourth quarter 1997 realized prices were $4.82 per ounce, $0.45 per pound, and $0.19 per pound for silver, zinc, and lead, respectively, compared to $4.27, $0.50, and $0.29, respectively, in the fourth quarter of 1996. During the fourth quarter of 1997, operations ceased at both Beal Mountain and Black Pine as ore deposits were mined out. During this time the Mt. Todd Mine was placed on care and maintenance. The Company's ongoing operations include Florida Canyon, Montana Tunnels and Diamond Hill which are expected to produce approximately 300,000 ounces of gold at an average total cash cost of $250 per ounce in 1998. Total exploration expenditures for 1997 and 1996 were $10.1 million and $19.0 million, respectively. Expensed exploration and evaluation expenditures decreased 15 percent in 1997 to $6.5 million, compared to $7.7 million last year, as the Company focused it efforts on mine site exploration. For 1998, the total exploration and evaluation program is expected to be $4.3 million of which $3.9 million is expected to be expensed. The Company had $22.6 million in cash and cash equivalents and a total of $108.2 million in current assets as of December 31, 1997. The Company currently has $33.7 million cash on hand after receiving $9.3 million from hedge close-outs in January 1998 which will be used as its working capital going forward. The Company expects that its cash and cash equivalents are adequate to meet its cash requirements through 1998. General and administrative expenses decreased 27 percent to $9.7 million from $13.2 million in 1996, primarily because of a reduction in the Company's workforce, decreased travel and outside service costs, and an effort to conserve cash, partially offset by higher salary and benefit costs, including the cost of severance. In 1997, operating activities generated cash flow of $25.8 million compared to $19.7 million during 1996. Increased cash flow is attributable to favorable changes in working capital accounts, primarily accounts receivable. Decreased accounts receivable are attributable to decreased production in December 1997, compared to December 1996, the deconsolidation of the accounts of Pegasus Gold Australia (PGA), and quicker turnover of accounts receivable compared to 1996. Cash flow from operations before working capital changes for 1997 was $7.9 million compared to $38.0 million a year ago due to lower production, lower realized prices and higher cash costs. Capital expenditures in 1997 totaled $65.1 million, compared to $233.9 million a year earlier in 1996. The majority of the capital was spent on completing and commissioning the milling and processing facility at Mt. Todd. Subsequent to the Company filing for protection under Chapter 11 on January 16, 1998, a Creditors' Committee was formed. The committee consists of nine creditors, of which three represent lenders under the revolving credit facility, three represent convertible subordinated note holders and three are trade creditors. The first meeting of creditors (the ``341'' meeting) was held in Reno, Nevada on March 9, 1998. The Company has asked the court to fix May 26, 1998 as the ``Bar Date'', the deadline for parties-in-interest to file proofs of claim and interest. A notice of the Bar Date will be sent to all pre-petition creditors. As well, the Company has filed a motion, as it continues to work on finalizing a plan of reorganization, requesting an extension of the exclusive period during which to file a plan of reorganization through July 31, 1998 and the exclusive period to solicit acceptances of such plan through September 30, 1998. It is the Company's goal to propose a plan of reorganization by July 31, 1998 and to conclude these cases by year-end. The Bankruptcy Court has scheduled a hearing on May 13, 1998 to hear this motion. QUADRAX CORP: To Employ Special Corporate Counsel ------------------------------------------------- Quadrax Corporation, the debtor, is requesting court authority to employ the firm of Hale and Dore LLP as special corporate counsel for the debtor. The firm will advise and represent the debtor with respect to SEC matters, NASDAQ listing rules and regulations, tax matters and other corporate and general legal matters. Hale and Dorr will not duplicate the services of Winograd, Shine & Zacks, PC. RIVER OAKS: Receives Final DIP Approval --------------------------------------- River Oaks Furniture, Inc., a designer and manufacturer of upholstered furniture primarily to large furniture chains, said today that it has received final Court approval of up to $32.9 million in debtor-in-possession (DIP) financing. BNY Financial Corporation will provide the financing, which the Company says will give it the resources it needs to complete its restructuring and successfully emerge from Chapter 11, as early as the end of this year. Additionally, the Company announced a major new commitment to improved customer service, specifically in the areas of product quality, delivery and reliability. According to Richard Redden, interim chief executive officer of River Oaks, "The new financing is a vote of confidence by the financial community that will permit us to resume competitive purchasing of goods for the benefit of our retail customers. Moreover, this added support will enable the Company to return to historic levels of customer service and reliable on-time delivery, which suffered as a result of the Company's recent difficulties. River Oaks reported sales of approximately $120 million in 1997. Its founders, Stephen L. Simons, chairman, and John D. Nail, president, remain active in the Company, which for many years was one of the fastest growing furniture manufacturers in the country. More recently, the Company which was founded in 1987 has been burdened with liquidity problems, primarily as a result of the 1995 restatement of its financial statements and declining profit margins in its 1997 and first quarter 1998 fiscal business. SA TELECOMMUNICATIONS: Seeks Bar Date ------------------------------------- The debtors, SA Telecomunications, Inc, and it s affiliated companies seek an order fixing June 1, 1998 as the last date and timer for the filing of proofs of claim against the debtors. THE WIZ: Seeks 90-Day Exclusivity Extension To July 1 ----------------------------------------------------- Claiming to be in a position to file a consensual plan within 60 days, the Wiz has asked for a 90-day extension of the company's exclusive periods for filing a reorganization plan and soliciting plan acceptances to July 14 and Sept. 12, respectively. The retailer noted that its first months in bankruptcy were spent preserving the value of its assets, soliciting and analyzing competing purchase offers, and completing the asset sale to Cablevision Electronics Inc. (Federal Filings Inc. 17-Apr-98) TIE COMMUNICATIONS: Files For Bankruptcy - Lays Off 150 ------------------------------------------------------- Tie Communications Inc. has laid off 150 workers - about five in its Overland Park headquarters - and filed for bankruptcy as it prepares itself for sale. The layoffs and attrition have resulted in the loss of 200 jobs in the past month. The company filed for bankruptcy last week in California, where it receives 20 percent of its business, according to Bill Brandt of Development Specialists Inc. of Chicago, a consultant who is advising the company on its restructuring. The company, founded in 1971, has been through one previous bankruptcy and three owners in a dozen years. Company officials could not be reached for comment. Tie, which sells telecommunications equipment, services and long distance, had revenue of about $100 million in 1997 and roughly broke even for the year, Brandt said. The company owes about $30 million to creditors, Brandt said. NationsBank is owed $14 million, unsecured creditors are owed $11 million, and owed taxes amount to about $3.5 million, he said. "The reason we are in bankruptcy is not because of any imminent inability to repay our obligations," he said. If the company can be sold for more than $30 million, creditors will be fully compensated, Brandt said. But the company decided to file for bankruptcy when it realized it might not sell for a high enough price to cover its debts, he said. Tie should be worth roughly $45 million, and potential buyers on both coasts, as well as Kansas City, have expressed interest in Tie, Brandt said. Meanwhile, the company is streamlining its staff in Kansas City and 20 regional offices and additional field offices. Kansas City Star - 04/18/98) TOWN & COUNTRY: Disclosure Statement Approved --------------------------------------------- Town & Country Inc.'s disclosure statement relating to its second amended reorganization plan was approved at yesterday's hearing. Solicitation packages will be mailed on Tuesday and a confirmation hearing is scheduled for May 26. (Federal Filings Inc. 17-Apr-98) VENTURE STORES: Order Establishes Bar Dates ------------------------------------------- The court entered an order setting May 29, 1998 as the general bar date in the case of Venture Stores, Inc. VENTURE STORES: Court Enters Orders ----------------------------------- The court in the case of Venture Stores, Inc. entered an order authorizing the assumption of the Credit Card Merchant Agreement with Wells Fargo and First Data. The court in this case authorized the assumption o the retail purchase agreement with General Electric Company. The court authorized the debtor to return certain prepetition goods to vendors and to Handelman Company. The court entered an order authorizing the employment and retention of D.G. Hart Associates, Inc, for the official Committee of Unsecured Creditors. WESTERN PACIFIC: Charter Airline is Buying the Leftovers --------------------------------------------------------- A Florida-based charter airline is buying the remnants of now-defunct Western Pacific Airlines, with possible ongoing impact on Colorado Springs. Star Air, part of Palm Beach Aerospace, will pay $350,000 for a handful of WestPac's assets, including operating certificates issued by the Department of Transportation and the Federal Aviation Administration. A federal bankruptcy judge in Denver, still overseeing WestPac's shutdown, has approved the deal, expected to close next week. The charter airline - which specializes in air service to sports teams and rock stars - will receive WestPac's flight manuals, maintenance records, spare- parts inventory, some office furniture and equipment, and the WestPac name and related trademarks. But WestPac official reckoned that Star would set up an office at the Colorado Springs Airport, considering the purchase of office furniture. Airport officials, though, said they haven't been notified of that. Another official close to the deal said that some sort of announcement about local operations might be made in the coming weeks. Star Air and Palm Beach Aerospace operate one Boeing 747SP, configured with 100 seats, and a handful of other, smaller jets. But the company doesn't have DOT or FAA authority to fly. Instead, sources said, Star Air acts as a kind of broker, arranging the charters and providing the plane, then hiring another company - one with valid operating certificates - to do the flying. One source said the company flew the Canadian hockey team to Japan for the recent Winter Olympic Games. The company also has contracts with several professional sports teams to handle their travel, and has flown rock groups such as the Rolling Stones and Fleetwood Mac during recent world tours, a Star Air attorney said. But now, Star apparently wants to get out of the middleman business. The company approached Pan American Airlines earlier this year, trying to buy Pan Am's extra, valid flying certificates. That deal - which Pan Am officials said was to be $1.5 million - fell through. Terry Hickman, who retired as Pan Am's director of safety and security last month, said the offer to WestPac represents a new low-ball for the industry: "$350,000 has just put a new dollar figure on a (FAA) certificate. Traditionally, an operating certificate is somewhere north of $1 million." The Star Air deal was struck with Smith Management, WestPac's former lender which stopped financing the airline in late January. Bankruptcy court records show that Smith Management, which has pumped about $30 million into WestPac since December, will wind up with a net loss on its investment of roughly $20 million. For now, a handful of WestPac officials - including five managers required to remain on staff to keep the operating certificates valid - are winding up the airline's liquidation. The process should be completed by the end of May, officials said. (Gazette- 04/17/98) WESTMORELAND COAL: Amends its Reorganization Plan ------------------------------------------------- Colorado Springs-based Westmoreland Coal Co., in Chapter 11 bankruptcy since December 1996, has filed its amended reorganization plan and reported net 1997 income of $28.2 million, down from $38.3 million for the previous year. The bankruptcy protection filing came after Westmoreland failed to reach a settlement with the United Mine Workers of America Retiree and Pension Fund over outstanding benefit obligations for 5,000 retirees. The company said it would continue to dispute the more than $260 million in claims against Westmoreland filed by three of UMWA's benefits and pension funds. Operating income for 1997 was $33.6 million compared to a loss of $800,000 for 1996. Although Westmoreland can't pay dividends to shareholders while in Chapter 11, the company reported per share income of $3.34 for 1997 compared to $4.80 the previous year. Optika announces drop in revenue: Colorado Springs-based Optika announced Thursday that revenues for the first quarter, ended March 31, 1998, decreased 18 percent to $3.7 million, compared with $4.5 million in the previous year. The company experienced a net loss in the first quarter of 1998 of $1.3 million, or $0.19 per share, compared with a net income of $73,000, or $0.01 per share in the same period last year. Mark K. Ruport, president, CEO and chairman of Optika, said the losses reflect the introduction of the company's eMedia product during the quarter. (Gazette- 04/17/98) 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 27, 1998 THE NEW YORK BAR ASSOCIATION Continuing Legal Education Seminar: "The Bankruptcy Code and New York Matrimonial Law -- Anticipating and Dealing with Insolvency in a Divorce" Southgate Tower Hotel, New York City Contact: 1-800-582-2452 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 7-9, 1998 AMERICAN LAW INSTITUTE-AMERICAN BAR ASSOCIATION 20th Annual Advanced ALI-ABA Course of Study in Banking and Commercial Lending Law Renaissance Stanford Court Hotel San Francisco, California Contact: 1-215-243-1630 May 18, 1998 THE NEW YORK BAR ASSOCIATION Continuing Legal Education Seminar: "The Bankruptcy Code and New York Matrimonial Law -- Anticipating and Dealing with Insolvency in a Divorce" Buffalo Hilton, Buffalo, New York Contact: 1-800-582-2452 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 28-30, 1998 THE NEW YORK BAR ASSOCIATION Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Seattle, Washington Contact: 1-800-CLE-NEWS 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 4-6, 1998 AMERICAN LAW INSTITUTE-AMERICAN BAR ASSOCIATION Fundamentals of Bankruptcy Law Charleston Place, Charleston, South Carolina Contact: 1-800-CLE-NEWS 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 23-25, 1998 AMERICAN LAW INSTITUTE-AMERICAN BAR ASSOCIATION Chapter 11 Business Reorganizations (Advanced Course) Santa Fe, New Mexico Contact: 1-800-CLE-NEWS 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 September 17-20, 1998 COMMERCIAL LAW LEAGUE OF AMERICA Midwest Mid-Year Meeting Oak Brook Hills Resort & Hotel Oak Brook, Illinois Contact: 1-616-372-6500 September 21-23, 1998 STATES' ASSOCIATION OF BANKRUPTCY ATTORNEYS 7th Annual States' Taxation and Bankruptcy Conference Hotel Santa Fe, Santa Fe, New Mexico Contact: 1-505-827-0728 September 25-26, 1998 VIRGINIA CONTINUING LEGAL EDUCATION 13th Annual Nid-Atlantic Institute on Bankruptcy and Reorganization Practice Boar's Head Inn, Charlottesville, Virginia Contact: 1-800-979-8253 October 8-10, 1998 AMERICAN LEGAL INSTITUTE-AMERICAN BAR ASSOCIATION Real Estate Defaults, Workouts, and Reorganization Charleston, South Carolina Contact: 1-800-CLE-NEWS 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 May 3-4, 1999 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Bankruptcy Sales, Mergers & Acquisitions San Francisco, California Contact 1-903-592-5169 or ram@ballistic.com 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 * * *