/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/980526.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, May 26, 1998, Vol. 2, No. 103 Headlines ALLIANCE ENTERTAINMENT: Files Plan and Disclosure Statement AMERICAN ENTERTAINMENT: Debtor Retains Special SEC Counsel BARNEY'S, INC.: Plan by Committee, Bay Harbor & Whippoorwill BONNEVILLE PACIFIC: Trustee Moving toward Confirmation BOYDS WHEELS: Committee Asks for Rule 2004 Exam of Debtor BRADLEES, INC.: $24.7 Million First Quarter Loss BRADLEES, INC.: McKelvey Appointed Vice President-Treasurer BRUNO'S, INC.: Requests Exclusivity Extensions into 1999 BUILDERS TRANSPORT: Case Summary & 20 Largest Creditors BUSTER BROWN: BNY Commits to Post-Emergence Financing Pact CPT CORPORATION: Final Distribution Announced DAKOTA MINING: Files for Chapter 11 Protection EAGLE-PICHER: Files Prospectus for Exchange Offers EDISON BROTHERS: Nomura Cuts Ownership Stake to 4.5% ELDER-BEERMAN: First Quarter Results Announced FPA MEDICAL: Financial Health Deteriorating Rapidly GEOTEK COMMUNICATIONS: Discloses 16.17% Equity Interest HILLS STORES: DDJ Capital Discloses 9.6% Equity Interest HOSPITAL STAFFING: New VP of Finance & CFO Joins Company HOSPITAL STAFFING: TRO Against HHS & HCFA Resumes Cash Flow INTERNATIONAL META: Resistance to Bid for Equity Committee ITHACA INDUSTRIES: DDJ Capital Discloses 17.5% Interest JACKSON-HECHT: Principals Admit Bankruptcy Auction Misdeeds KENETECH CORPORATION: First Quarter Results KIA MOTORS: Ford Negotiating with Creditors for 51% Stake LA GEAR: Million Dollar Shoe Sale Approved LASER STORM: Files for Chapter 11 Protection MANHATTAN BAGEL: First Quarter Results MERCURY FINANCE: NYSE Pushes to Delist Shares NAMCO CYBERTAINMENT: Consensual Amended Plan on the Way NL FINANCIAL: Hires William B. Dyer as Interim CEO NL FINANCIAL: Trustee to Depose Principals NORTHEAST TRACTOR: Trade School Ordered to Liquidate ONE-STOP WIRELESS: Prepay Joins in Bid for Change of Venue PAN AM: Reaches Agreement with NationsBank PEACOCK FINANCIAL: First Quarter Results PEGASUS GOLD: Files Form 10-K for 1997 Calendar Year PORTACOM WIRELESS: First Quarter Results QUADRAX CORPORATION: First Quarter Results RDM SPORTS: Lenders Agree to Fund Trustee & Litigation REEVES INDUSTRIES: Special Shareholders' Meeting Called SEARCH FINANCIAL: Court Gives Final Okay to A&K Employment SILICON GAMING: DDJ Capital Takes 6.4% Equity Position SUNBELT NURSERY: 9 Stores Fetch $2 Million TAPISTRON INTERNATIONAL: Amends Stock Registration Statement WASTE SYSTEMS: DDJ Capital Discloses 58.8% Interest WASTEMASTERS, INC.: First Quarter Results WELCOME HOME: Exclusivity Extended to July 17, 1998 XCL LTD.: Annual Meeting Called for June 30, 1998 ZENITH ELECTRONICS: To Restructure Under Prepackaged Plan ZENITH ELECTRONICS: NYSE to Delist Common Stock Meetings, Conferences and Seminars ********* ALLIANCE ENTERTAINMENT: Files Plan and Disclosure Statement ----------------------------------------------------------- Alliance Entertainment Corp. and 14 of its direct and indirect subsidiaries filed their Joint Plan of Reorganization and a Disclosire Statement in support thereof late Wednesday. The Joint Plan sets forth the following classes of claims and their treatment in the event the Debtors achieve confirmation of the Plan: Class: Administrative Claims Estimated Claims: $10,173,000 Treatment: Each holder of an Allowed Administrative Claim shall be paid 100% of the unpaid allowed amount of such Claim in Cash on the later of: (a) the Effective Date or as soon thereafter as reasonably practicable; and (b) the first Business Day after the date that is 29 calendar days after the date such Claim becomes an Allowed Claim or as soon thereafter as reasonably practicable. Notwithstanding the immediately preceding sentence, Allowed Administrative Claims incurred in the ordinary course of business of Execusoft, One Stop, One Way, Matrix or A.E. Land and on ordinary business terms unrelated to the administration of these Reorganization Cases (such as trade and vendor Claims other than Major Creditor Secured Administrative Claims) shall be paid, at the relevant Debtor's or Reorganized One Stop's option, in accordance with ordinary business terms for payment of such Claims. Class: Priority Tax Claims Estimated Amount: $47,000 Treatment: Each holder of an Allowed Priority Tax Claim shall receive 100% of the unpaid allowed amount of such Claim in Cash or, at the sole option of Reorganized One Stop, a Tax Note or a combination thereof, on the later of: (a) the Effective Date or as soon thereafter as reasonably practicable; and (b) the first Business Day after the date that is 29 calendar days after the date such Claim becomes an Allowed Claim or as soon thereafter as reasonably practicable. Class: Allowed Priority Claims Estimated Amount: $0 Treatment: Each holder of an Allowed Priority Claim shall receive 100% of the allowed amount of such Claim in Cash on the later of: (a) the Effective Date or as soon thereafter as reasonably practicable; and (b) the first Business Day after the date that is 29 calendar days after the date such Claim becomes an Allowed Claim or as soon thereafter as reasonably practicable. Class: Allowed DIP Bank Claims Estimated Amount: $29,018,000 Treatment: The DIP Agent, as agent for the holders of DIP Bank Claims, shall be paid 100% of any unpaid Allowed DIP Bank Claim and the outstanding and unpaid fees and expenses of the DIP Agent and the DIP Banks, including but not limited to the reasonable fees and expenses of Zalkin, Rodin & Goodman, LLP in Cash on the Effective Date or as soon thereafter as reasonably practicable but in any event not later than the date on which a Cash Distribution is first made to any other Person under the Plan. Class: DIP Guaranty Claims Estimated Amount: $0 Treatment: There shall be no distribution on account of the DIP Guaranty Claims, as the holders of the Allowed DIP Guaranty Claims shall have been satisfied in full through the payment of the related DIP Bank Claims. Class: Allowed Major Creditor Secured Administrative Claims Estimated Amount: $22,624,000 Treatment: Each holder of an Allowed Major Creditor Secured Administrative Claim shall receive a Distribution equal to 100% of the unpaid allowed amount of such Claim: (a) in Cash; (b) by return of the respective Major Creditor's products which are then in Reorganized One Stop's possession and eligible to be returned to such Major Creditor pursuant to its established returns policies (with the value of such products, for Distribution purposes, calculated at cost); or (c) some combination of Cash and such products, with the form of such Distribution at the sole discretion of Reorganized One Stop, provided, however, that the amount of Cash so distributed to such Major Creditor shall not exceed the amount of post-consummation credit extended by such Major Creditor to Reorganized One Stop pursuant to the respective Major Creditor Agreement. Such Distribution shall be made on the later of: (x) the date such Claims would be paid in the ordinary course of Reorganized One Stop's business or as soon thereafter as reasonably practicable; and (y) on or within 10 days following the Effective Date Class: MLO -- Allowed Mechanics' Lien/Offset Claims Estimated Amount: $87,000 Treatment: Each holder of an Allowed Mechanics' Lien/Offset Claim shall receive, at the respective Debtor's option and to the extent such Claim is secured by collateral in the possession of a Debtor: (a) 100% of the allowed amount of such Claim in Cash on the later of: (i) the Effective Date or as soon thereafter as reasonably practicable; and (ii) the first Business Day after the date that is 29 calendar days after the date such Claim becomes an Allowed Claim or as soon thereafter as reasonably practicable; or (b) the return of the relevant collateral. To the extent a Claim is partially an Allowed Mechanics' Lien/Offset Claim based on an offset right and partially an Allowed Claim of another type, such Mechanics' Lien/Offset Claim shall be deemed to have been setoff only to the extent of the allowed amount of the allowed liquidated, nondisputed, noncontingent Claim owing from the relevant Debtor and the relevant claimant shall have a Claim classified in another relevant Class for any excess of such Claim over the amount set off. If a Claim is fully an Allowed Mechanics' Lien/Offset Claim based on an offset right, the allowance of such Claim shall not affect any obligations or liabilities due and payable (at such time) to the relevant Debtor that are in an amount in excess of the amount offset and the payment of all amounts due and owing as of the Effective Date to such Debtor and the turnover of any property of such Debtor held by such claimant on account of any unliquidated, disputed or contingent right of setoff shall be a precondition of the allowance of such Mechanics' Lien/Offset Claim. Class: AEL-IDB -- A.E. Land Mortgage Claim Estimated Amount: $5,980,000 Treatment: The A.E. Land Mortgage will be Reinstated. No default rate, premium, or compound interest shall be allowed. Class: Allowed Fee Claims Estimated Amount: $6,781,000 (as of the conclusion of the Reorganization Case) Treatment: Each holder of an Allowed Fee Claim shall receive 100% of the unpaid allowed amount of such Claim in Cash on the later of: (a) the Effective Date or as soon thereafter as reasonably practicable; and (b) the first Business Day after the date which is 29 calendar days after the date such Claim becomes an Allowed Claim or as soon thereafter as reasonably practicable. Class: AEC-PSL -- Allowed Prepetition Secured Bank Claims Estimated Amount: $137,116,000 Treatment: The Prepetition Bank Agent, as agent for the holders of the Allowed Prepetition Secured Bank Claims, shall receive: (a) 87.5% on a fully diluted basis of the New Common Stock of Reorganized Alliance; (b) all Net Cash Proceeds, as that term is defined in the DIP Facility, generated by the liquidation of the Dissolving Debtors and Dissolving Nondebtor Affiliates; and (c) 100% of the capital stock of Concord (to the extent such stock is then held by any of the Debtors); (d) Cash in an amount equal to 100% of any outstanding and unpaid adequate protection payments required by the DIP Order; and (e) Cash in an amount equal to 100% of the reasonable outstanding and unpaid fees of the Prepetition Banks and the Prepetition Bank Agent, including but not limited to the fees and expenses of Milbank, Tweed, Hadley & McCloy and Policano & Manzo. Class: GUA - Classes for each Debtor other than Alliance Prepetition Credit Agreement Guaranty Claims Estimated Amount: $42,965,000 Treatment: Holders of Prepetition Credit Agreement Guaranty Claims shall receive no Distribution on account of such Claims. Class: OSG-MAJ(1) through OSG - MAJ(6); OWR-MAJ(1) through OSG-MAJ(6); IND-MAJ(1) through IND-MAJ(6) Major Creditor Secured Claims Estimated Amount: $75,156,000 Treatment: Each holder of an Allowed Major Creditor Secured Claim against One Stop, in full satisfaction of such Claim, shall receive a Cash Distribution of a portion of $5 million equivalent to the ratio of such unpaid amount to all Allowed Major Creditor Secured Claims against One Stop. Each holder of a Major Creditor Secured Claim against any Debtor other than One Stop shall receive no Distribution on account of such Claim. Notwithstanding anything to the contrary in the Plan, each Major Creditor waives its right to receive any Distribution on account of any unsecured prepetition Claims it may assert against any of the Debtors. Class: Intercompany Claims Estimated Amount: N/A Treatment: Intercompany Claims of each Debtor, Concord or Nondebtor Affiliate against all other Debtors, Concord or Nondebtor Affiliates shall receive no Distribution under the Plan and shall be canceled or forgiven, at the option of each Debtor or Nondebtor Affiliate, as the case may be. Intercompany Claims of any Nondebtor Affiliate against any other Nondebtor Affiliate shall be unaffected by the Plan. Class: NPC Classes for All Debtors -- General Unsecured Claims Estimated Amount: $211,012,000 Treatment: Each holder of an Allowed General Unsecured Claim against any Debtor, including Senior Subordinated Notes Claims against Alliance, shall receive no Distribution on account of such Claim; provided, however, that each holder of an Allowed Claim in Classes AEC-NPC, EXS-NPC, OWR-NPC, MTX-NPC, AEL-NPC and OSG-NPC, shall be entitled to receive, on account of such Allowed Claim, a number of Warrants calculated pursuant to section 6.5 of the Plan, and provided, further, that each such holder shall be given a Trust Certificate in a denomination equal to one unit for each dollar of such holder's Allowed General Unsecured Claim against the respective Debtor. Each Trust Certificate shall be classified with respect to the particular Debtor against which the related Claim is held. Class: AEC-16B -- Securities Claims Estimated Amount: N/A Treatment: Each holder of a Securities Claim against Alliance shall receive no Distribution on account of such Claim. Class: AEC-PRF and -EQT Classes for all Debtors -- Interests Estimated Amount: N/A Treatment: Each holder of an Interest in any Debtor shall receive no Distribution on account of such Interest. Alliance has asked the Bankruptcy Court in Manhattan to set a hearing on the adequacy of the Debtors' Disclosure Statement for June 23, 1998. AMERICAN ENTERTAINMENT: Debtor Retains Special SEC Counsel ---------------------------------------------------------- Judge Derby for the United States Bankruptcy Court in Baltimore has authorized American Entertainment Group, Inc., AEG Entertainment Limited and Chaos International, Inc., to retain and employ Paul A. Fischer, Esq., and the law firm of Jorden Burt Boros Cicchetti Berenson & Johnson LLP as Special Counsel to represent the Debtors in SEC investigation matters. BARNEY'S, INC.: Plan by Committee, Bay Harbor & Whippoorwill ------------------------------------------------------------ The Official Committee of Unsecured Creditors of Barney's, Inc. and Bay Harbour Management L.C. and Whippoorwill Associates, Inc. announced Friday that they have reached an agreement in principle with Isetan Company Limited and Isetan of America, Inc. concerning the terms of a proposed joint plan of reorganization for Barney's, Inc. and its affiliates. The Plan provides for the infusion of up to $68.8 million in new equity, which when combined with bank financing will enable the Company to exit Chapter 11 with sufficient capital to support its business plan and provide the necessary liquidity for its future operations. The Plan Proponents believe that the Company has substantially completed a major restructuring of its operations and has drastically reduced its costs. As a result, the Company's core business has been restored to an operating performance level which the Company has not experienced in several years. Moreover, the Committee said, the enthusiasm and commitment of the Company's valued employees, and the increasing confidence shown by the vendor community, coupled with the results of the restructuring led by Thomas C. Shull, the Company's President and Chief Operating Officer, makes the Company well positioned for future growth and profitability. Under the terms of the Plan, unsecured creditors (other than Isetan) in exchange for their allowed claims will receive new common stock and short term, transferable rights to subscribe on a pro rata basis for $50 million in new common stock. Bay Harbor and Whippoorwill -- the Plan Investors, who together hold approximately $133 million or 41.5% of the estimated $320 million in unsecured claims -- have agreed on behalf of their discretionary accounts to backstop the rights offering. In consideration for their backstop of the rights offering and sponsorship of the Plan, the Plan Investors also will subscribe for an additional $10 million in new common stock and will have a four-month option to purchase up to an additional $8.8 million in new common stock, which option will be exercisable only to the extent the Plan Investors would not receive more than 53.6% of the new common stock. The Company's existing equity interests will be canceled. Under the Plan, all litigation with Isetan will be settled and Isetan will be the sole owner of the Company's three flagship stores in New York City, Chicago and Beverly Hills. The reorganized Company will enter into modifications of the long-term leases with Isetan for such stores, which leases will provide for annual aggregate rent during the first five years of $12 million, and thereafter the annual aggregate rent will be $15 million plus certain rent adjustments. In addition, Isetan will receive: (i) approximately $25.6 million in cash, including approximately $3.1 million in respect of an administrative claim, (ii) a five-year note having a principal amount of $22.5 million, (iii) a five-year note in the initial principal amount of $3 million which increases at the rate of $3 million per annum, such that the entire $15 million principal amount is due after five years, (iv) 5% of the new common stock, and (v) a three-year non-transferable warrant to purchase 2.25% of the new common stock. The Plan also provides for Barney's Japan, which is owned by Isetan, to retain an exclusive license for the Barney's name in Japan, and to operate an existing business in Singapore. The reorganized Company will enter into an extension and modification of the long-term license agreement with Barney's Japan. Isetan has further agreed that its license for the Barney's name for the balance of Asia will be transferred to a new entity to be 70% owned by the reorganized Company and 30% owned by Isetan. Discussions with certain holders of equipment lease obligations concerning their treatment under the Plan and discussions with representatives of the Pressman family, who own or control the existing equity interests, concerning their treatment under the Plan and their future roles and responsibilities in the reorganized Company, are ongoing. The Plan Proponents are hopeful of reaching a consensual arrangement shortly. However, if no such arrangement is reached, they are prepared to proceed with the Plan process and have the Plan confirmed by the Bankruptcy Court. Under the Plan, the percentage allocation of new common stock to be received by each group is as follows: 93.5% to unsecured creditors (including stock issued on account of claims, in the rights offering and the $10 million subscription by the Plan Investors); 5.0% to Isetan; and 1.5% to the Pressmans (assuming an agreement is reached with members of the Pressman family). The foregoing percentages exclude the Plan Investors' option and Isetan's warrant as discussed above. The Plan Proponents expect to file the Plan and a related disclosure statement with the Bankruptcy Court by June 15, 1998 or as soon thereafter as is practicable. The agreement in principle reached among the Plan Proponents and Isetan is subject to certain conditions, including the preparation and approval of definitive documentation, obtaining the requisite consent of creditors, Bankruptcy Court approval, and obtaining acceptable bank financing for the reorganized Company. The Committee, Bay Harbor and Whippoorwill stated that this has been a long and difficult process, and they are enthusiastic about the terms that have been agreed upon and look forward to working together towards a successful conclusion to the Company's Chapter 11 cases. Mr. Raymond Shapiro, the mediator appointed by the Bankruptcy Court for the Company's Chapter 11 cases, stated, "I support the settlements achieved by the parties and believe that the terms of the creditor plan provide the basis for a prompt exit from the Chapter 11 process." BONNEVILLE PACIFIC: Trustee Moving toward Confirmation ------------------------------------------------------ Roger G. Segal, the Chapter 11 Trustee for Bonneville Pacific Corporation, reports that the estate sits on $154,981,141.93 of cash as of April 30, 1998. The cash will be used to fund payments to creditors under the Trustee's Plan of Reoganization filed April 22, 1998. The Trustee believes that his Proposed Plan, if confirmed by the Bankruptcy Court, would resolve most of the legal and factual disputes which currently affect the Company. A hearing by the Bankruptcy Court on the adequacy of the Disclosure Statement, as well as a hearing on the "Trustee's Motion Regarding Plan Confirmation Issues", is currently scheduled for June 3, 1998 at 10:00 a.m. BOYDS WHEELS: Committee Asks for Rule 2004 Exam of Debtor --------------------------------------------------------- The Official Committee of Unsecured Creditors of Boyds Wheels, Inc., tells the California bankruptcy court that it wants to continue its investigation of potential claims against certain insiders, directors, officers and outside third-parties. To analyze the Debtors' financial affairs and the potential claims, the Committee needs more data. The Debtor has declined to provide the Committee with the data, saying the information is confidential. In a move to get its hands on the information, the Committee turns to the Court with a request for an order authorizing it to examine the Debtor and its officers under Rule 2004. BRADLEES, INC.: $24.7 Million First Quarter Loss ------------------------------------------------ Bradlees Inc. said losses in the first quarter narrowed to $24.7 million, or $2.18 a share, from $32 million, or $2.81 a share, in the same period of 1997. The company said sales rose to $293 million, up $16.5 million from the $277 million recorded a year earlier. Bradlees said sales gained even though it closed six stores in February of the latest quarter. Bradlees has proposed and filed a plan of reorganization with the bankruptcy court in Manhattan; a hearing on the Company's disclosure statement is scheduled for May 27, 1998. If all goes as planned, the Company expects to emerge from Chapter 11 this fall. BRADLEES, INC.: McKelvey Appointed Vice President-Treasurer ----------------------------------------------------------- Bradlees, Inc., announced the appointment of Paul R. McKelvey as Vice President-Treasurer. He will report to Neil Moses, Senior Vice President-Chief Financial Officer. Mr. McKelvey will be responsible for Risk Insurance, Taxation, and Financial Services for the Company. Reporting directly to Paul will be Mark Frazier, Director of Risk Finance, Mike Kszystyniak, Director of Tax, and John Livingstone, Manager of Financial Services. Mr. McKelvey has extensive experience in the capital markets, commercial, and investment banking arenas. Prior to joining Bradlees, he was Director of Corporate Treasury for EMC Corporation and Assistant Treasurer-Corporate Finance for Duracell International, Inc. Mr. McKelvey is a Certified Public Accountant in the State of Connecticut and began his career with Price Waterhouse. He earned his M.B.A. at the University of Connecticut in June of 1979 and his B.B.A. at St. Bonaventure University in New York in 1974. BRUNO'S, INC.: Requests Exclusivity Extensions into 1999 -------------------------------------------------------- Bruno's asks Judge Robinson in Delaware for an extension of its exclusive period during which to file a plan of reorganization through January 15, 1999 togather with an extension of its time during which to solicit acceptances of such plan through March 15, 1999. The Company noted that explosion last month at its Birmingham Distribution Center caused significant disruption in operations. Bruno's also expressed disappointment with vendors because only 36 vendors are participating under the DIP agreement and only 45% of the goods the Debtors receive are sold under ordinary credit terms. BUILDERS TRANSPORT: Case Summary & 20 Largest Creditors ------------------------------------------------------- Debtor: Builders Transport, Inc. 1477 Hampton Road McDonough, Georgia and 2029 West DeKalb Street Camden, South Carolina 29020 Court: Northern District of Georgia Filed: 05/21/98 Chapter: 11 Case No.: 98-68798 Affiliated Debtor Case No. ----------------- ------- Builders Transport, Incorporated 98-68799 CCG Corp., Inc. 98-68800 Builders Transport of Texas, Inc. 98-68801 Alstaff, Inc. 98-68802 Applied Logistic Systems, Inc. 98-68803 Grand Prairie Land Company 98-68804 Debtors' Counsel: Donald L. Rickertsen, Esq. Holland & Knight, LLP 1201 West Peachtree Street, Suite 2000 Atlanta, GA 30309-3400 (404) 817-8500 Financial Condition as of December 31, 1997: Total Assets: $209,329,000 Total Liabilities: $235,786,000 Nature of Business: The Debtor and its affiliates are principally engaged in the truckload carrier industry and transport a wide range of commodities in both intrastate and interstate commerce. 20 Largest Unsecured Creditors: Name Nature Amount ---- ------ ------ FMB Trust Subord. Debentures $50,000,000 NationsBanc Leasing Corp. Deficiency 1,800,000 EFS National Bank Fuel & Cash Cards 1,000,000 Bridgestone Tires 500,000 BP Oil, Inc. Fuel 300,000 Fleetcharge/Navistar Repairs & Parts 200,000 Amerada Hess Corporation Fuel 200,000 ComData Network Parts & Repairs 200,000 AT&T Communications 200,000 Crawford & Company Claims Adjuster 150,000 Hightower Advertising 150,000 Fletcher & Springer, LLP Attorney 100,000 Dothan Tarpaulin Products Tarps 100,000 Goodyear Tire & Rubber Tires 100,000 McGriff Treading Tires 100,000 Anderson, Daniel & Cox Attorney 100,000 Fletcher's Cobre Tire Tires 100,000 Qualcomm Incorporated Communications 100,000 MEI Corp. Parts 50,000 Corvel Corp. Medical Bill Auditing 50,000 BUSTER BROWN: BNY Commits to Post-Emergence Financing Pact ---------------------------------------------------------- Buster Brown Apparel, Inc., et al., have sought and obtained court authority to pay BNY Financial a $50,000 deposit and a $93,750 Commitment Fee in consideration of a Commitment Letter pursuant to which BNY will provide the Debtors with a Post-Effective Date Financing Facility providing (a) funding to pay off any borrowings under the $20 million DIP Facility provided by Foothill Capital and (b) sufficient working capital for on-going operations. BNY's Commitment Letter fulfils one of the conditions precedent to confirmation of the Amended Joint Plan of Reorganization proposed by the Debtors, The Chase Manhattan Bank, Cerberus Partners, L.P., and Merrill Lynch and filed with the Bankruptcy Court in Chattanooga on May 7, 1998. The Debtors will pay a $93,750 Closing Fee to BNY on the Effective Date. CPT CORPORATION: Final Distribution Announced --------------------------------------------- The United States Bankruptcy Court for the District of Minnesota entered an order confirming an Amended Plan of Reorganization in 1991 for CPT Corporation. That Plan was substantially consummated by the Reorganized Debtor in 1991. Recently, the Court reopened CPT's case to permit distribution of New Shares to to general unsecured creditors (including holders of CPT's 10% Convertible Subordinated Debentures due November 15, 2001) and holders of Old Equity Interests. Friday, CPT published notice of its intention to make a final distribution under the plan; the establishment of a June 30, 1998 Bar Date for noting eligibility to participate in the final distribution; and instructions for the exchange of bonds for new shares. Bondholders and other creditors are instructed to contact Norwest Bank Minnesota, N.A., at 612-450-2448 for copies of the plan, other documents, or other information. DAKOTA MINING: Files for Chapter 11 Protection ---------------------------------------------- The Board of Directors of Dakota Mining Corporation announced Friday that its sole gold producing subsidiary, USMX of Alaska, Inc., filed a voluntarily chapter 11 petition in Denver, Colorado. Dakota and its subsidiaries have not been able to resolve their severe liquidity and other financial problems. Neither Dakota nor its other operating subsidiaries have filed for bankruptcy at this time, although, Dakota said, they may determine to do so in the future as a result of their financial conditions. Alan R. Bell, President and Chief Executive Officer of Dakota, stated, "We have been in discussions with our debenture holders, principal secured lenders and creditors for several weeks now, but have failed to reach agreement on a debt restructure that would allow the Company to continue as a going concern." The $1.1 million 90-day interim financing facility provided by N M Rothschild & Sons, Limited has expired, as a result of which Rothschild has applied the cash collateral account to satisfy that loan. Dakota and its subsidiaries now owe an aggregate of in excess of $38 million of which approximately $18.4 million is owed to the holders of Dakota's convertible debentures, $9.7 million is owed to Rothschild, $3.7 million is owed to Gerald Metals, Inc. and $5.4 is owed to D. H. Blattner and Sons. Of these amounts, USMXAK owes on a secured basis $9.7 million to Rothschild, $1.7 million to Blattner and $0.7 million to other trade creditors. Bell continued, "Daily operations will continue in the production of gold at Illinois Creek. Operations at other Dakota subsidiaries have already been discontinued except for limited reclamation and compliance activities." Dakota continues to request that various state and federal agencies permit it to draw down on existing cash bonds for the purpose of funding reclamation and permit obligations at certain mine sites. The Company has approximately $9 million in cash bonds associated with its Illinois Creek, Stibnite, Gilt Edge and Goldstrike mine sites. The Company cautioned that here can be no assurance it will succeed in obtaining the release of these funds or that the funds will be adequate to satisfy all compliance obligations. EAGLE-PICHER: Files Prospectus for Exchange Offers -------------------------------------------------- Eagle-Picher Industries, Inc., filed its Prospectus with the SEC detailing its offer to exchange $1,000 principal amount of its 9 3/8% Senior Subordinated Notes due 2008 (the 'New Notes'), registered under the Securities Act of 1933, as amended for each $1,000 principal amount tendered of its outstanding 9 3/8% Senior Subordinated Notes due 2008 (the 'Old Notes') of which $220 million aggregate principal amount is outstanding. Eagle-Picher explains that the form and terms of the New Notes are identical in all material respects to the form and terms of the Old Notes, except for certain transfer restrictions and registration and other rights relating to the exchange of Old Notes for New Notes. The New Notes evidence the same debt as the Old Notes and will be issued under the Indenture governing the Old Notes. Concurrently with the Notes Exchange Offer, Eagle-Picher Holdings, Inc., a Delaware corporation, which owns all of the capital stock of the Company, is offering to exchange shares of Parent's 11 3/4% Series B Cumulative Redeemable Preferred Stock for any and all of its 14,191 outstanding shares of 11 3/4% Series A Cumulative Redeemable Exchangeable Preferred Stock EDISON BROTHERS: Nomura Cuts Ownership Stake to 4.5% ---------------------------------------------------- Nomura Holding America, Inc. reports that, during the period from January 16, 1998 to May 13, 1998, it disposed of an aggregate of 280,800 shares of Edison Common Stock at an average selling price of $7.7119 per share. This lowers Nomura's current equity stake in Reorganized Edison to 4.5%. ELDER-BEERMAN: First Quarter Results Announced ---------------------------------------------- The Elder-Beerman Stores Corp. (Nasdaq: EBSC) reported total sales for the first quarter hit $126.7 million, with comparable sales for the first quarter increasing 10.1% over 1997. The Company reported a net loss of $436,000, or $0.03 per share in the reorganized company, versus a $3.3 million loss ($26.36 per share loss) for the 13 weeks ended May 3, 1997. Earnings before interest, income taxes, depreciation, amortization and expenses related to the Company's reorganization, or "EBITDA(R)," improved to $5.3 million for the first quarter, an increase of 19.5% over last year's first quarter EBITDA(R) of $4.5 million. Improvement in EBITDA(R) is the most meaningful measure for comparing Elder-Beerman's fiscal 1998 performance to fiscal 1997 because the Company's 1997 financial statements were significantly impacted by reorganization-related expenses. Frederick J. Mershad, Chairman and Chief Executive Officer, noted, "Our 1998 first quarter performance continues our trend from 1997, during which we achieved the second-best operating performance in our history. Our department store comparable sales gains were strong in each of the first three months of the year and increased 10.6% for the quarter. Strong sales, particularly in better and moderate women's sportswear, men's clothing and sportswear, furniture and domestics, and a consistent flow of new merchandise to our stores contributed to these results. Operating income improved largely from the leveraging of selling, general and administrative expenses across our higher sales base. Our first quarter results continue to affirm our merchandising and store operations strategy, which leaves us well- positioned for the balance of the year." FPA MEDICAL: Financial Health Deteriorating Rapidly --------------------------------------------------- FPA Medical Management Inc. shares fell 33 percent yesterday on news that the manager of physician practices was given a June 11 deadline by creditors to get its troubled finances in order. The San Diego-based company is in technical default on some of its loans, according to a recent filing with the Securities and Exchange Commission. The shares have lost about three-quarters of their value since Friday, when the company reported earnings far below estimates. FPA Medical has grown rapidly through acquisitions and has taken on more than it can handle. While this has worried investors in the past, the financial problems now emerging call its survival into question, analysts said. "The concern has shifted to something much more severe, and that's whether the company can stay afloat," said John Ederer, an analyst at Volpe Brown Whelan & Co. who has a "neutral" rating on the stock. Dr. Stephen Dresnick, FPA's new chief executive officer, said the company has been working with its bankers to resolve technical issues that pushed the company out of compliance with its senior debt covenant. "We were out of compliance with certain ratios," Dresnick explained. He added that FPA has been meeting regularly with its bank group, which issued a waiver allowing the company time to resolve the debt issue. The waiver will be reviewed on June 11. "I can't stress enough that we have not missed any payments and we have not been late with any payments," Dresnick said. "We have a plan of action to address the operational issues." In its SEC filing, FPA Medical said that it had $12.4 million in cash at the end of March, down from $23.9 million as of Dec. 31. "The biggest issue is probably the lack of working capital," Ederer said. Profit before charges in the first quarter fell to $449,000 from $2.6 million in the year-ago period, the company said last week. The company also said it plans to take a pretax restructuring charge of as much as $200 million in the second quarter. FPA Medical is now facing bigger challenges, though, analysts said. The company will need to secure short-term credit to satisfy its creditors, and if it does manage to survive in the short term, it will have to change dramatically to keep going. "They're going to have to really chop this thing big time," said Michael LeConey, an analyst at Dirks & Co. with a "buy" rating on the stock. "Most of these companies have just grown faster than they really could adjust, because it was a great idea at the right time." Early last week, Moody's Investors Service lowered its rating on FPA Medical's 6.5% Convertible Subordinated Debentures "B3" from "B2" and its rating on the company's senior secured credit to "B1" from "Ba3." The ratings are all below-investment grade. Moody's said it lowered the ratings due to FPA Medical's "rapidly deteriorating operating results." FPA Medical also has been hit with a class-action lawsuit by shareholders in federal district court in California. The suit charges the company, some of its executives and directors and Foundation Health Corp., now part of Foundation Health Systems Inc., with issuing false information about FPA Medical's operations to drive up its stock price. (San Diego Union And Tribune 21-May-1998). GEOTEK COMMUNICATIONS: S-C Discloses 16% Equity Interest -------------------------------------------------------- S-C RIG Investements-III, L.P., and certain affiliated entities disclose in a recent amendment to their Schedule 13-D filed with the SEC, that S-C holds a 16.17% equity stake in Geotek Communications, Inc. HILLS STORES: DDJ Capital Discloses 9.6% Equity Interest -------------------------------------------------------- Reporting the following purchases and sales of shares in Hills Stores Company: TYPE: PURCHASE AGGREGATE DATE OR SALE SHARES PRICE ---- -------- ------ --------- 3/10/98 SALE (25,000) $(71,122.59) 3/11/98 PURCHASE 1,000 $3,832.50 3/12/98 SALE (15,000) $(68,934.66) 3/17/98 PURCHASE 5,000 $19,525.00 3/18/98 PURCHASE 18,400 $82,465.11 3/19/98 PURCHASE 7,500 $35,850.00 3/20/98 PURCHASE 40,000 $192,762.51 4/8/98 PURCHASE 23,400 $104,539.50 4/15/98 PURCHASE 5,900 $24,514.50 4/16/98 PURCHASE 13,600 $55,433.60 4/17/98 PURCHASE 20,000 $78,412.00 5/7/98 PURCHASE 11,200 $49,336.00 5/14/98 SALE (5,000) $(24,749.15) DDJ Capital Management LLC currently reports beneficial ownership of 1,004,734 Shares -- approximately 9.6% of the outstanding Shares of the Company. HOSPITAL STAFFING: New VP of Finance & CFO Joins Company -------------------------------------------------------- Hospital Staffing Services, Inc., filed a Form 8-K with the SEC disclosing the appointment of Steve Martin as Vice President of Finance and Chief Financial Officer. The Company noted that Mr. Martin brings to the Company over twenty years of in-depth experience in finance and operations with both public and private organizations. Mr. Martin's areas of expertise include capital acquisition, growth planning, operations management and strategic planning, primarily in health care, high-tech, service and manufacturing environments. Mr. Martin's health care experience includes working with companies such as Lutheran General Hospitals, Paragon Home Care and Care One. Combined with other industry experience, he has held such positions as Group Controller, Director of Financial Planning, Vice President of Operations, Chief Financial Officer and Senior Vice President for Marketing and Venture Development. In these past positions, Mr. Martin has gained considerable experience in board representation; private and public fund raising and capital acquisition; financial planning and reporting; work-outs; business dissolution; audit, legal and public reporting; budgeting; new businesses development; and product life-cycle projection. The Company additionally indicated that Mr. Martin was elected to a seaton the Company's Board of Directors. HOSPITAL STAFFING: TRO Against HHS & HCFA Resumes Cash Flow ----------------------------------------------------------- On May 6, 1998 Hospital Staffing Services of Tennessee, Inc. (a fully owned subsidiary of Hospital Staffing Services, Inc.) filed an adversary complaint against the Department of Health and Human Services, Health Care Financing Administration, and Wellmark, Inc., as financial intermediary. Further, the Company filed an emergency motion for a temporary restraining order in an effort to temporarily restrain HHS, through HCFA, from withholding the Medicare revenues generated by the operations of the Company. On May 15, 1998, the Honorable Raymond B. Ray, Bankruptcy Judge for the Southern District of Florida, entered a temporary restraining order enjoining further withholding of Medicare reimbursements pending order of the Court. In addition, the order required HCFA to immediately wire transfer $441,373 to the Company representing funds improperly withheld since the bankruptcy filing and such order further requires HCFA to reinstate the periodic interim payments to the Company as they become due. Judge Ray found that "the Plaintiff's success on the merits is highly likely, irreparable harm will result in the event the Debtor is not able to obtain access to the funds which were withheld post petition and/or rely upon future revenues from post petition services, the threatened injury to the Plaintiff and its affiliates far outweighs any harm that may result to the Defendants in the event that the Court enters the injunction, where the balance of the harm weighs in favor of the Plaintiff, and the public interest will be served by the entry of the injunction." INTERNATIONAL META: Resistance to Bid for Equity Committee ---------------------------------------------------------- A consortium of shareholders in International Meta Systems, Inc., pitching for formation of an official equity committee to represent their interests has met resistance from the Debtor. The Debtor points to its schedules of assets and liabilities to show that the Company is insolvent. Moreover, the Debtor "is unaware of any event . . . which would indicate that 'substantial value' exists for holders of equity interest." Formally, the Debtor says that it neither endorses nor opposes the formation of an equity committee. But, "[g]iven [the] Debtor's financial condition and apparent lack of equity, it would be unusual to form a committee to protect equity that does not appear to exist," the Debtor tells the Bankrupty Court in Austin, Texas. ITHACA INDUSTRIES: DDJ Capital Discloses 17.5% Interest ------------------------------------------------------- Reporting the following purchases and sales of shares in Ithaca Industries Inc: TYPE: PURCHASE AGGREGATE DATE OR SALE SHARES PRICE ---- -------- ------ --------- 5/11/98 PURCHASE 26,600 $95,350.36 5/12/98 PURCHASE 300,000 $1,084,380.00 DDJ Capital Management, on behalf of The Galileo Fund, L.P. and B III Capital Partners, L.P. LLC, discloses beneficial ownership of 17.5% of the outstanding shares in Ithaca. JACKSON-HECHT: Principals Admit Bankruptcy Auction Misdeeds ----------------------------------------------------------- The two principals of a once-prominent partnership that auctioned property for bankrupt estates in the New York area pleaded guilty Friday to stealing money from the proceeds of sales. Abbot Jackson and Richard Hecht of Jackson-Hecht Associates pleaded guilty in federal court in Manhattan to embezzling more than $120,000. The men admitted they had taken the funds to cover cash-flow problems. The charges resulted from a criminal referral by the federal bankruptcy trustees' offices in the New York City boroughs of Manhattan and Brooklyn. Until it was placed in involuntary bankruptcy in 1996, Jackson-Hecht Associates was a prominent auction house for proceedings in the New York area. The two defendants face up to 10 years in prison. (Reuters 22-May-1998) KENETECH CORPORATION: First Quarter Results ------------------------------------------- For the three-month period ended March 31, 1998, Kenetech Corporation reports a net loss of $4,765,000 on $3,487,000 in total revenues. KIA MOTORS: Ford Negotiating with Creditors for 51% Stake --------------------------------------------------------- Ford Motor Co. is forming a consortium with creditors of Kia Motors Corp. to secure a controlling 51% stake in the ailing firm, according to a report from Agence-France Presse. "The basic position of Ford is that it will not take over Kia Motors on its own. Instead, it is seeking to form a consortium with other local creditor banks to secure a 51% stake," a Kia Motor spokesman told AFP. The official further said Ford's move is in line with its strategy to increase its market share in Asia through Kia and Ford's affiliate Mazda of Japan and to cope with the ongoing mergers and acquisitions among the world's automakers. Kia owes creditors more than 10 trillion won (7.2 billion dollars) -- too much for Ford to take on alone, industry industry sources told AFP. Kia Motors, under court receivership in South Korea, indicated that it hopes to submit a plan detailing how it will settle debts by the end of August. LA GEAR: Million Dollar Shoe Sale Approved ------------------------------------------ Judge Barry Russell for the bankruptcy court in Los Angeles has given his okay to the sale of 269,707 (plus or minus 5%) pairs of shoes by LA Gear, Inc., to ACI International, at $5.75 per pair. The sale yields approximately $1.7 million to the Debtor's estate. LASER STORM: Files for Chapter 11 Protection -------------------------------------------- Laser Storm, Inc. announced Friday that it filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Colorado. Laser Storm has suffered significant losses over the last 2 years as a result of its attempt to make the transition from a manufacturer to an operator of Laser Tag Arenas. Although the Company was seeking additional funding since the underwriter of its IPO shut down its West Coast operations in late 1996, the lack of financial backing led Laser Storm to sell or close all of its company-owned stores and lay off more that 100 employees. Bob Cooney, Laser Storm's CEO, commented, "The filing of Chapter 11 is a necessary step in turning Laser Storm around. The closing of several of our company-owned stores left us with several million dollars of contingent liabilities from real estate leases. It was proving impossible to move Laser Storm forward with that huge cloud hanging over us." Cooney continued, "We intend to file our plan of reorganization in the next several weeks. In the meantime, our plan is to focus our energy on the sales, marketing and research and development of our award-winning Laser Tag systems." Laser Storm sells interactive laser tag systems to family entertainment centers and amusement parks around the world. Its award-winning games are located in 42 states and 20 countries. MANHATTAN BAGEL: First Quarter Results -------------------------------------- For the three-months ended March 31, 1998, Manhattan Bagel Company, Inc., and its subsidiaries, report a net loss of $398,337 on total revenues of $7,685,694. MERCURY FINANCE: NYSE Pushes to Delist Shares --------------------------------------------- Shares in Mercury Finance Co., a lender of auto loans to people with bad credit, were suspended from trading on the New York Stock Exchange after the lender said it would file for Chapter 11 bankruptcy protection earlier this month. The NYSE said it would apply to the Securities and Exchange Commission to delist Mercury's stock. NAMCO CYBERTAINMENT: Consensual Amended Plan on the Way ------------------------------------------------------- On May 4, 1998, within its exclusive period, Namco Cybertainment, Inc., filed its Plan of Reorganization in Delaware. The Company did not file a disclosure statement at that time but said that supporting document should be filed by May 18, 1998. Now, based on negotiations with its Creditors' Committee, Namco says that it intends to file an Amended Plan by the end of the month of May. Accordingly, the Debtor asks the Judge Walsh for an extension of its time to file a disclosure statement--this time in support of the Amended Plan--through May 29, 1998. NL FINANCIAL: Hires William B. Dyer as Interim CEO -------------------------------------------------- At the time NAL Financial Group, Inc., filed its chapter 11 petition, a significant number of the Debtor's officers and directors were terminated or resigned their positions. As a result, the Company has been without a CEO since March 23, 1998. To fill this void, the Company asks the Florida bankruptcy court for authority to employ William B. Dyer as its Interim CEO. The Debotr has agreed to pay Mr. Dyer $20,000 every two weeks and reimburse his travel, entertainment and temporary housing expenses. The Debtors do not relate to the Court any of Mr. Dyer's prior subprime lending experience. NL FINANCIAL: Trustee to Depose Principals ------------------------------------------ Arthur Halsey Rice, Esq., serving as Trustee in the chapter 11 case commenced by NAL Financial Group, Inc., has served notice of his intention to examine Robert J. Carlson, John T. Schaeffer, and David H. Shier on May 29, 1998 at NAL's corporate offices concerning all matters relative to NAL or any of its affiliates pursuant to Rule 2004. The three gentlemen have also been instructed to bring "any documents, notes, memoranda, magnetic tapes, computer disks or tangible evidence of any nature whatsoever in any way related to NAL Financial Group, Inc. or any of its affiliates" with them when deposed. NORTHEAST TRACTOR: Trade School Ordered to Liquidate ---------------------------------------------------- The federal bankruptcy court in Portland has ordered a Manchester, Oregon career school to go out of business. The court Wednesday denied the tractor-trailer school's request to refinance and reorganize. Judge Mark Vaughn indicated, however, a willingness to let programs already under way at the bankrupt Northeast Tractor-Trailer School and Northeast Career Schools to be completed. (Portland Press Herald 22-May-1998) ONE-STOP WIRELESS: Prepay Joins in Bid for Change of Venue ---------------------------------------------------------- Prepay Technologies, L.L.C., a creditor of One-Stop Wireless of America, Inc., et al., joins the Investors' Motion requesting the the venue of One-Stop's bankruptcy case be changed from Delaware to the Central District of California. Prepay repeats the Investors' argument that the Debtors' operations are based in California and adds that all transactions between the Debtors and Prepay took place in California. PAN AM: Reaches Agreement with NationsBank ------------------------------------------ Pan Am Corp. reached a repayment agreement with its lender, NationsBank, before the charter carrier took its bankruptcy reorganization plan before Judge Cristol. NationsBank was owed $26.5 million as the leading secured creditor but agreed to accept $20.5 million cash from the company and vote for confirmation of a plan to end the bankruptcy case. As part of the talks, Guilford Transportation Industries Inc. upped its offer to Pan Am for the airlines' remnants by $1 million to $29.5 million. Guilford -- a New England freight railroad operator based in North Billerica, Mass. And controlled by Pittsburgh's Mellon family -- plans to expand Pan Am's charter operations. Greenwich, Conn.-based Wexford Management pulled out of the bidding Monday following Guilford's increased offer. PEACOCK FINANCIAL: First Quarter Results ---------------------------------------- For the three-month period ended March 31, 1998, Peacock Financial Corporation and its subsidiary report a net loss of $269,659 on revenue of $243,658. Current assets -- all cash -- total $13,142, versus $1,332,602 in current liabilities. PEGASUS GOLD: Files Form 10-K for 1997 Calendar Year ---------------------------------------------------- Pegasus Gold, Inc., filed its Form 10-K with the SEC last week, reporting a $512,832,000 net loss on sales of $226,463,000 for the 1997 calendar year. A full-text copy of the filing is available via the Internet at no charge at http://www.sec.gov/Archives/edgar/data/746961/0001047469-98- 021377.txt on the SEC's Web site. Pegasus says that it expects to continue operating its three producing mines while various alternatives are evaluated. These alternatives could include the sale or refinancing of the Company's existing investments in producing mines. External advisers have been retained by the Company to assist in the preparation of a Plan of Reorganization which the Company expects to submit to the Bankruptcy Court during the second half of 1998. PORTACOM WIRELESS: First Quarter Results ---------------------------------------- For the three-month period ended March 31, 1998, PortaCom Wireless, Inc., reports a net loss of $566,674 on no revenues. QUADRAX CORPORATION: First Quarter Results ------------------------------------------ For the three-month period ending March 31, 1998, Quadrax Corporation reports a $2,118,721 net loss on $4,235,929 in net sales. RDM SPORTS: Lenders Agree to Fund Trustee & Litigation ------------------------------------------------------ RDM Sports Group, Inc.'s lenders have agreed to the creation of a fund consisting of $5.5 million of cash collateral to be used to pursue causes of action against a host of parties as well as to pay administrative costs and the Chapter 11 Trustee's fees. Trustee William Hays and the committees of RDM's unsecured creditors and bondholders intend to jointly propose a liquidation plan that will establish a liquidating trust to pursue RDM's causes of action. (Federal Filings, Inc. 22-May-1998). REEVES INDUSTRIES: Special Shareholders' Meeting Called ------------------------------------------------------- Matec Corporation, f/k/a Reeves Industries, Inc., has called for a Special Meeting of its shareholders to be held at the offices of the Company, 75 South Street, Hopkinton, Massachusetts 01748, on June 18, 1998, at 10:00 A.M. for the purposes of: (1) The election of six directors; (2) Consideration and vote upon a proposal to reincorporate the Company in Maryland and cash out certain stockholders; and (3) Such other matters as may properly come before the meeting. The Company explains to shareholders that there are two purposes of the Reincorporation. First, in connection with it approximately 1,700 Stockholders who each own less than 100 shares of the Common Stock will cease to be Stockholders and will receive cash in lieu of fractional shares in the Maryland Company. At March 19, 1998, such stockholders owned an aggregate of 35,948 shares, representing 1.3% of the shares outstanding. This will result in savings in administering stockholder accounts estimated at $11,500 per year. Second, the Company will be able to avoid Delaware's annual franchise tax which for the year ended December 31, 1997, totaled $11,200. The Company anticipates having to pay the same amount in franchise taxes for future years if it continues as a Delaware corporation. As a Maryland corporation, the Company would not be subject to such annual taxes other than the property tax filing fee of $100, provided that Maryland does not alter its current laws. In addition to cashing out its holders of less than 100 shares and avoiding the annual Delaware franchise tax, a number of changes will be effected as a result of the Reincorporation. Such changes are described below under the headings "Certain Consequences of the Reincorporation" and "Comparison of Rights of Stockholders of the Company and Stockholders of the Maryland Company." The Company lists Dimensional Fund Advisors as a 5% shareholder in a Proxy Statement filed with the SEC last week. SEARCH FINANCIAL: Court Gives Final Okay to A&K Employment ---------------------------------------------------------- Finding that, notwithstanding the firm's represention of a creditors' committee in prior chapter 11 cases by subsidiaries of Search Financial Services, Inc., Judge McGuire in Dallas ruled that Andrews & Kurth LLP should be allowed to represent affiliates of Search Financial in its pending chapter 11 proceeding. After reviewing objections by the United States Trustee, secured creditor Hall Phoenix/Inwood, Inc., and other interested parties, Judge McGuire ruled that A&K and its attorneys "represent no interest adverse to the estates," and, therefore, "are disinterested persons as that term is defined under Sec. 101(14) of the Bankruptcy Code, as modified by Sec. 1107(b)." SILICON GAMING: DDJ Capital Takes 6.4% Equity Position ------------------------------------------------------ In a Schedule 13-D filed with the SEC, DDJ Capital Management LLC discloses, on behalf of B III Capital Partners, L.P., and others, ownership of a 6.4% stake in Silicon Gaming, Inc. For the three-month period ended March 31, 1998, Silicon Gaming reported a net loss of $6,764,000 on $4,026,000 of revenue. Copies of Silicon Gaming's latest Forms 10-K and 10-Q are available at no charge via the Internet at: http://www.sec.gov/cgi-bin/srch-edgar?SILICON+adj+GAMING Silicon Gaming is engaged in the design, development, production, marketing and sale of what it believes will be the next generation of interactive slot machines for use in casinos and other gaming establishments. The Company's first product, Odyssey(TM), combines an advanced multimedia gaming platform with software-based games that the Company believes to be more engaging and entertaining than other gaming devices currently available and will, as a result, generate increased win per machine for the casino operator. SUNBELT NURSERY: 9 Stores Fetch $2 Million ------------------------------------------ Idaho-based SummerWinds Garden Centers paid about $2 million for all nine Valley Tip Top Nursery stores in a Bankruptcy Court liquidation of Sunbelt Nursery Group of Dallas. The new owner says it will revamp the stores and improve their merchandise and service. Tip Top's Scottsdale store will close, but SummerWinds is renegotiating leases at the Tempe and Glendale stores. (Arizona Business Gazette 21-May-1998) TAPISTRON INTERNATIONAL: Amends Stock Registration Statement ------------------------------------------------------------ Tapistron International, Inc., filed an Amended Registration Statement with the SEC last week in connection with registration of shares of common stock issued in a recent post-emergence private placement transaction. Tapistron's Common Stock is listed on the OTCBB system under the symbol "TAPI." On May 15, 1998, the last reported sales price for the Company's Common Stock was $0.31 per share. Tapistron filed a Voluntary Petition for a Chapter 11 Bankruptcy on June 21, 1996. The original Plan of reorganization of Tapistron International, Inc., was filed with the Court on November 21, 1996. An Amended and Restated Plan of Reorganization of Tapistron International, Inc., was filed with the Bankruptcy Court on March 14, 1997 and confirmed on August 18, 1997. Under the Amended Plan, all creditors will be paid in full (unless the creditor elected to accept a discounted amount of the creditor and the Company agreed to different terms). As provided for in the Amended Plan, each unsecured creditor will receive its pro rata share (based on the amount of its allowed claim compared to the total of unsecured claims) of (i) cash in the amount of $500,000 plus (ii) its pro rata share of a second aggregate payment of $500,000 together with interest, payable at $50,000 per new machine sale by the Company. Additionally, each unsecured creditor could then elect one of two options with respect to the payment of the balance of its claim: either the sum of 15% of the balance of its claim ("Option 1"); or the creditors pro rata share of 1,000,000 shares of Common Stock issued by the Company ("Option 2"). At any time on or prior to September 30, 2000 (the "Final Settlement Date"), each unsecured creditor electing Option 2 must, at the sole and absolute discretion of the Company, receive either an additional cash payment or additional shares of Common Stock based on the value of the Common Stock for the period that is not less than five (5) nor more than thirty-five (35) trading days prior to the Final Settlement Date. The total amount received by the unsecured creditors pursuant to Option 2, either in additional stock or cash, equals its pro rata share of the difference between the total amount of unsecured claims less all principal amounts to be paid pursuant to the first $500,000 and the second aggregate amount of $500,000. If between the August 29, 1997 and the September 30, 2000 the average of the closing prices of the Company's common stock for any five (5) consecutive trading day period multiplied by 1,000,000 exceeds the balance of unsecured claims multiplied by factor for time value or if any unsecured creditor shall sell, pledge, or trade stock, directly or indirectly, issued to it, then such creditor shall no longer be entitled to any further distribution on the Final Settlement Date. As a subsequent event, the Company's Amended Plan provided that the Company would do a private placement for $2,500,000. As of August 6, 1997, the private placement was completed. As a result, the bankruptcy court confirmed the Amended Plan on August 18, 1997, the Amended Plan became effective as of August 29, 1997. A full-text copy of Tapistron's Amended Registration Statement is available at no charge via the Internet at: http://www.sec.gov/cgi-bin/srch-edgar?TAPISTRON A copy of Tapistron's confirmed amended plan is included as an exhibit. WASTE SYSTEMS: DDJ Capital Discloses 58.8% Interest --------------------------------------------------- DDJ Capital Management, LLC, B III Capital Partners, L.P. and DDJ Capital III, LLC disclose in a Form 13-D ownership of a 58.8% interest in Waste Systems International, Inc. On June 26, 1997, B III Capital Partners, L.P. (the "Fund") purchased 50,000 Shares of Series A Convertible Preferred Stock (the "Preferred Stock") through a private placement transaction for cash in the amount of $5,000,000.00. Pursuant to the terms of the Preferred Stock, the shares of Preferred Stock may, at the option of the holder, be converted at any time or from time to time into Common Shares. The Preferred Stock may by converted into 3,555,556 Common Shares (taking into account the reverse stock split since such date). On February 12, 1998, the Fund purchased Subordinated Notes and 11,851 Common Shares (taking into account the reverse stock split) pursuant to a private placement for cash. $40,000 of the purchase price was allocated to the purchase of the Shares. On May 11, 1998, the Fund purchased $20,000,000 face amount of 7% Subordinated Notes due 2005 (the "Notes") under Rule 144A, following a private placement to the Initial Purchaser, for cash in the amount of $20,000,000. The Fund may, at any time after receipt of approval by the Company's stockholders of the optional conversion provisions of the Notes until payment of the Notes, convert the Notes into Shares at a conversion price per share equal to $10.00 per Share, subject to adjustment. WASTEMASTERS, INC.: First Quarter Results ----------------------------------------- For the three-month period ended March 31, 1998, WasteMasters, Inc. and its subsidiaries report a $1,050,324 net loss on $6,538 of revenue. On a proforma basis, eliminating $2,725,132 of current liabilities as a result of the Chapter 7 Bankruptcy filings by five of the Company's subsidiaries on February 16, 1998, WasteMasters reports a $1,227,996 net loss on $3,403,790 in revenues for the three-month period ended March 31, 1998. WELCOME HOME: Exclusivity Extended to July 17, 1998 --------------------------------------------------- Judge Blackshear has granted Welcome Home, Inc., an extension of its exclusive period during which to file a plan of reorganization through July 17, 1998, together with an extension of its time within which to solicit acceptances of such plan through September 11, 1998. XCL LTD.: Annual Meeting Called for June 30, 1998 ------------------------------------------------- An Annual Meeting of Shareholders of XCL Ltd. will be held at 10:00 a.m., Central Daylight Savings Time, on Tuesday, June 30, 1998, in The Monterey Room of the Hyatt Regency Houston at George Bush Intercontinental Airport, 15747 JFK Boulevard, Houston, Texas 77032, for the purposes of: 1. Electing three Class II directors for three-year terms, each to hold office until the 2001 Annual Meeting of Shareholders and until a successor shall have been elected and shall have qualified; 2. To adopt amendments to the Company's Amended and Restated Certificate of Incorporation: (A) to eliminate the requirement for: (i) holders of Common Stock to vote on amendments affecting outstanding Preferred Stock and (ii) stockholders to ratify Bylaw amendments adopted by the Board of Directors and (B) to require the approval of at least a majority of the outstanding shares of Amended Series A Preferred Stock for the creation of a class of Preferred Stock equal in preference to the Amended Series A Preferred Stock; 3. To ratify the Board's amendments of the Company's Amended and Restated Bylaws: (i) to change the month in which the Company holds its Annual Meeting of Shareholders from May to June and (ii) to eliminate the requirement for stockholders ratification of Bylaw amendments adopted by the Board; and 4. The transaction of such other business as may properly come before the Meeting or any adjournments thereof. ZENITH ELECTRONICS: To Restructure Under Prepackaged Plan --------------------------------------------------------- Zenith Electronics Corporation (NYSE: ZE) announced that its board of directors has unanimously approved in principle a financial restructuring to be implemented through a prepackaged plan of reorganization. Zenith said the financial restructuring is key to management's plan to execute a comprehensive operational restructuring. Zenith indicated that the terms of the financial restructuring were separately reviewed by a special committee of independent directors, which recommended approval to the board. "Today, we are taking a major step forward in our efforts to improve Zenith's financial health and to rebuild Zenith into a brand and technology leader," said Jeffrey P. Gannon, Zenith president and chief executive officer. Financial Restructuring Under the prepackaged plan, trade creditors and vendors will not be impaired and will continue to be paid in the ordinary course of business. In addition, Zenith will continue to pay employees' wages, salaries and benefits, and will continue to fulfill obligations to customers throughout the reorganization. Zenith said that it also has reached an agreement in principle with LG Electronics Inc. (LGE), Zenith's majority stockholder, for LGE's support and participation in the plan. Under the plan, LGE will convert approximately $200 million of Zenith obligations to LGE into common stock of the company, representing 100% of the equity in the restructured Zenith. In addition, approximately $210 million of claims held by LGE will be exchanged for certain Zenith manufacturing assets in Mexico and secured notes due 2008 on which interest may be paid in kind under certain circumstances. LGE will provide an additional $60 million of credit support to help finance the implementation of the plan. Zenith and LGE are in discussions with third-party lenders about additional financing. The plan provides for current holders of the company's 6-1/4% convertible subordinated debentures to receive $40 million of new 6-1/4% subordinated debentures maturing in 2010. It is currently contemplated that the claims of all other creditors will either not be impaired by the plan or be consensually restructured. The restructuring will reduce Zenith's outstanding debt by approximately $250 million. Under the plan, all outstanding common stock will be canceled, and holders of common stock will receive no distribution. On this news, Zenith shares fell sharply after the market closed Thursday, losing $1.375 to 62-1/2 cents. Zenith will file the restructuring plan with the Securities and Exchange Commission shortly and thereafter solicit acceptance of the plan. Upon receiving the necessary level of acceptance, Zenith intends to initiate a prepackaged reorganization proceeding under Chapter 11. The Associated Press reports that the bankruptcy filing will take place in Delaware. Zenith said that it hopes to emerge from chapter 11 before year-end 1998. Operational Restructuring In connection with the financial restructuring, Zenith also is implementing a broad operational restructuring plan designed to leverage Zenith's technology, brand and distribution strengths. "We will make fundamental changes in the way Zenith does business," Gannon said. "That means focusing on our high-tech engineering talents and our strong brand name, while de-emphasizing costly manufacturing operations." A key element of the plan is to outsource more products and components. For example, while continuing its leading-edge technology developments, Zenith plans to purchase certain finished goods from LGE, which has agreed in principle to buy several of Zenith's Reynosa, Mexico, TV plants through an exchange of debt for those assets. Zenith also said it is seeking buyers and/or strategic alliances for other ongoing businesses, including its color TV picture tube and computer display tube operations in Melrose Park, Ill., and its wood cabinet and projection TV operations in Juarez, Mexico. The operational restructuring also will involve maintaining Zenith's strong research and engineering capabilities, capitalizing on its patented digital television technologies, focusing on more profitable consumer electronics product segments and distribution channels, enhancing customer service and parts operations, and expanding its accessories business. Additionally, the company is seeking an investor for Zenith's digital set-top box and cable modem Network Systems business. The Chicago Tribune says about 1,000 employees holding corporate and research and development jobs in Glenview will remain employed. However, the fate of about 9,000 manufacturing employees nationwide remains unclear, the Tribune added. John Koo, president and chief executive officer of LG Electronics, said, "Zenith is an important part of LG's North American strategy, and we support Zenith's decision to seek a prepackaged reorganization as a prudent and efficient way to restore Zenith to operational and financial health. Jeff Gannon and his management team have developed a business plan that we believe is the right one to return Zenith to a position of strength and technological leadership." Upon completion of the reorganization, the company will be a subsidiary of LG Electronics with Gannon continuing as Zenith president and CEO. Gannon and his management team will continue to lead the U.S.-based company. Contingencies The restructuring is subject to a number of conditions, including definitive documentation and receipt of necessary approvals from Zenith creditors and the court presiding over the prepackaged plan. LGE's support is subject to Zenith securing additional financing, executing its business plan and other conditions. In addition, LGE's ability to participate fully in the proposed restructuring remains subject to approval by Republic of Korea regulatory authorities. There can be no assurance, Zenith cautioned, that the proposed restructuring will be consummated or that completion of such restructuring will not be delayed. ZENITH ELECTRONICS: NYSE to Delist Common Stock ----------------------------------------------- The New York Stock Exchange suspended trading in shares of Zenith Electronics Corp. Friday and announced that it will apply to the Securities and Exchange Commission to delist Zenith. The NYSE explained that Zenith fell below the Exchange's requirements of at least $12 million in tangible assets available to common stock and average after-tax income for the past three years of at least $600,000. ********* Meetings, Conferences and Seminars ---------------------------------- 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 14th Annual Bankruptcy & Reorganization Conference Grand Hyatt Hotel, San Francisco, California Contact 1-541-858-1665 or aia@ccountry.net 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, Chicago, 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, Tucson, 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 Mid-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 April 26-27, 1999 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Bankruptcy Sales, Mergers & Acquisitions The Mark Hopkins, 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. ********* A listing of Meetings, Conferences and Seminars appears each Tuesday in the TCR. 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 * * *