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/raid1/www/Hosts/bankrupt/TCR_Public/980609.MBXT R O U B L E D C O M P A N Y R E P O R T E R Tuesday, June 9, 1998, Vol. 2, No. 112 Headlines APS: First Request for Extension of Exclusivity ARAPAUR: Ricardo Mansur to Takeover Arapua Chain BRADLEE'S: PBGC Objects to Disclosure Statement BRADLEE'S: Operations for Five Weeks Ended April 4, 1998 BRUNO'S: Exclusivity Extension Approved BRUNO'S: Sale of Alabama Shopping Center CITYSCAPE: Files Form 8-K with SEC; Outlines Restructuring CITYSCAPE: Home Loan Notes On Fitch RatingAlert: Negative DRUG EMPORIUM: Sells Inventory to Close Arizona Stores FPA MEDICAL MANAGEMENT: Files SEC FORM 8K FIDELITY BANCORP: Files Form 10QSB/A with SEC FIRSTCITY: Liquidating Trust Intends to Extend Term FLORIDA TELEPHONE: Files Chapter 11 HOMEPLACE STORES: 12 Stores Closing; Bid Procedure Ok'd HOSPITAL STAFFING SERICES: Report of Stock Ownership HUNGARIAN BROADCASTING: Files Form 8-KA with the SEC LONG JOHN SILVER: DIP Pact Requires $14M EBITDA By Year-End MOTOROLA: Restructuring Charges of Almost $2 Billion PETRIE RETAIL: Seeks 30 Day Extension of Exclusivity PHILIPPINE AIRLINES: On the Brink of Bankruptcy PLAYNET TECHNOLOGIES: Files Chapter 11 SPENCER METAL: EPA Lowers Fine to Prevent Bankruptcy THERMADYNE HOLDINGS: Merger with Subsidiary of DLJ UNISON: Fails to Renegotiate $100 Million Debt VALLEY COMMERCIAL COLLEGE: Files Chapter 7 WOODLANDS RACETRACK: Judge Appoints Trustee Meetings, Conferences and Seminars ********* APS: First Request for Extension of Exclusivity ----------------------------------------------- The Debtors have sought and obtained an extension of their exclusive period during which to file a plan of reorganization through and including September 30, 1998. Concomitantly, the Debtors have sought and obtained an extension of their exclusive period during which to solicit acceptances of such plan through November 29, 1998. Matthew Feldman, Esq., representing the Debtors, recanted for Judge Walsh at a hearing yesterday the "monumental efforts" that the Debtors have put forth since the Petition Date to stabilize their operations; implement the DIP Financing Facility; and negotiate with landlords for more time to decide whether to assume or reject leases, with utility companies concerning deposits, and with reclamation claimants. In regard to vendor relationships, Mr. Feldman related that: 1. The Debtors have achieved a modicum of normal trade credit for approximately 11% of their total purchases; 2. Cash discounts have been reestablished at approximately 50% of their prepetition levels; 3. Goods are being purchased without deposits from virtually all vendors; Mr. Feldman described the Debtors' efforts in conducting a preliminary analysis of their operations and as a result, the positive steps the Debtors have taken to improve their overall performance since the Petition Date, including: A. a renewed focus on collection of past-due accounts receivable, including the hiring of employees specially trained for that purpose; B. the implementation of new credit policies regarding associate jobbers to reduce future credit exposure; C. the reorganization of upper management, including the expansion of duties and responsibilities of certain officers; and D. the development of operational and functional metrics by which to measure performance of management personnel. Mr. Feldman disclosed that the Debtors have, in fact, developed a preliminary long-range business plan setting forth detailed financial projections and a comprehensive set of strategies designed to restore profitability to their multifaceted enterprise. Declining to give the Court even a glimpse of what the Business Plan might envision, Mr. Feldman indicated, however, that "the Debtors must make substantial progress in many areas in order to effect an operational turnaround and position themselves to develop a feasible plan or plans of reorganization." Mr. Feldman confirmed that the Business Plan -- which is not publicly available -- was presented to the DIP Lenders and the Committee in May 1998. Against this backdrop, the Debtors argue, and in light of the sheer size and complexity of their estates, extension of the exclusive periods is warranted. Proposal of a plan at this time, the Debtors contend, would not allow for sufficient exploration of the strategic alternatives that must be considered. Termination of the exclusive periods, the Debtors argue, would defeat the very purpose of 11 U.S.C. Sec. 1121 -- allowing a meaningful and reasonable opportunity to negotiate with creditors and propose a plan of reorganization. Persuaded by the Debtors arguments, and in the absence of any objection, Judge Walsh Granted the Debtors' Motion in all respects. (APS Bankrutpcy News 04-June-98) ARAPAUR: Ricardo Mansur to Takeover Arapua Chain ------------------------------------------------- Investor Mr Ricardo Mansur, that controls the depaxrtment stores Mesbla and Mappin, has readied negotiations with creditors to take over the near bankruptcy household apliances chain Arapua. Agreements were settled with the main creditors Semp-Toshiba, Multibras, and Sharp. The proposal involves to take responsibilities in piled up debts of R$600mil, not including the bank debts of R$100mil neither arrear payments of Arapua's customers classified as receivable accounts. If the deal is completed Mr Mansur will be the largest player in the Brazilian retail trade. a position conquered over the last two eyars. (Source: O Globo Page: 29 Date: June 5, 1998 - SABI- 07-June-98) BRADLEE'S: PBGC Objects to Disclosure Statement ----------------------------------------------- The Pension Benefit Guaranty Corporation, which guarantees the payment of certain pension benefits upon termination of a pension plan -- like Bradlees' Pension Plans which cover more than 8,000 of the Debtors' employees, former employees, retirees and their beneficiaries -- covered by ERISA, objects to the Debtors' Proposed Disclosure Statement. The PBGC says that the Disclosure Statement fails to give creditors adequate information because it does not specifically state whether the reorganized Debtors will maintain the Pension Plans. Further, the Disclosure Statement does not reveal that the PBCG has filed $18 million of contingent claims on account of estimated unfunded benefit liabilities in the event the Pension Plans were terminated prior to confirmation. If the Disclosure Statement is approved on June 16, the Debtors then intend to mail copies of the Plan, Disclosure Statement, and Ballots to all creditors (whose claims are impaired under the Plan and who are creditors of record as of 5:00 p.m. on June 18, 1998) by June 30, 1998. If the Court will also fix (i) July 21, 1998, as the Voting Deadline for creditors to return their Ballots and (ii) July 27, 1998, as the deadline for the filing of any confirmation objections, this will pave the way for a Confirmation Hearing on August 11, 1998. BRADLEE'S: Operations for Five Weeks Ended April 4, 1998 -------------------------------------------------------- Total Sales 117,892,000 Leased sales 3,888,000 -------------- Net sales 114,004,000 Operating profit/(loss) (6,098,000) Profit/(Loss) before taxes (7,508,000) Net income/(loss) (7,508,000) BRUNO'S: Exclusivity Extension Approved --------------------------------------- The debtors obtained an extension of their Exclusive Period during which to file a plan of reorganization through January 15, 1999, and a concomitant extension of their Exclusive Period during which to solicit acceptances of such plan through March 15, 1999. BRUNO'S: Sale of Alabama Shopping Center ---------------------------------------- By this Motion, the Debtors are requesting authorization to sell the Roebuck Shopping Center, which they operate in Birmingham, Alabama. Roebuck consists of approximately 5.72 acres of real property, three of which are owned by the Debtors and 2.72 acres of which are leased by the Debtors, pursuant to a ground lease with Joe I. Griffin as Landlord. Approximately 61,500 square feet of retail shopping space is leased by the Debtors to 11 retail tenants in the Roebuck Center. The debtors received an offer from EIG Operating Partnership of $2,500,000 for the purchase of the Roebuck Center, which the Debtors consider to be the highest and best offer in the light of certain environmental problems at the Roebuck Center, as documented by Gallet & Associates in their Environmental Report of February 1998, which report was provided to EIG. EIG has delivered a $25,000 Deposit to the escrow agent and will pay $2,475,000 subject to certain prorations and adjustments on the day of the closing. The Debtors tell the Court that sale of the Roebuck Center is in the best interests of the Debtors, their Estates and their Creditors. The Debtors do not intend to operate a supermarket in the Roebuck Center in the future. Therefore, since the Debtors are not in the business of holding properties for investment purposes, and since by sell the Property to EIG, the highest and best bidder, the Debtors will generate cash and free up substantial human and other resources to devote to the operation of its core supermarket business, sale of the Roebuck Center is a sound exercise of the Debtors' business judgment. (Bruno's Bankarutpcty News Issue 10 - 06-June-98) CITYSCAPE: Files Form 8-K with SEC; Outlines Restructuring ---------------------------------------------------------- As part of Cityscape Financial Corp.'s ongoing efforts to restructure its balance sheet, the Company entered into a non-binding letter of intent on June 1, 1998 with representatives of holders of a majority of the Company's 12-3/4% Senior Notes due 2004 to support a proposed restructuring of the Company The Letter of Intent has been approved by the Company's Board of Directors. In addition, the Company has entered into negotiations with holders of its 6% Convertible Subordinated Debentures regarding the Proposed Restructuring. The Company presently intends to file a Chapter 11 petition and plan of reorganization in what is commonly known as a "prepackaged" bankruptcy filing within 60 days and to seek approval of its disclosure statement and confirmation of its plan shortly thereafter. The Proposed Restructuring, if approved, will significantly reduce outstanding indebtedness, eliminate mandatory cash interest payments and restore net worth. To achieve these objectives, the Proposed Restructuring will (i) result in a complete write-off of the Company's currently outstanding Common Stock, (ii) an extreme impairment of the Company's preferred stock, (iii) a severe impairment of the Company's Convertible Debentures and (iv) a substantial impairment of the Company's Senior Notes. In connection with the Company's restructuring efforts, the Company has determined (i) to defer the June 1, 1998 interest payment on its Senior Notes and (ii) to continue to defer the May 1, 1998 interest payment on the Convertible Debentures. The continued deferral of the Convertible Debenture interest payment constitutes an "Event of Default" pursuant to the Indenture under which such securities were issued. Separately, as part of the Proposed Restructuring, the Company has entered into negotiations regarding debtor in possession financing from Greenwich Capital Financial Markets, Inc. and The CIT Group/Equipment Financing, Inc. to increase the Company's existing warehouse lines of credit. CITYSCAPE: Home Loan Notes On Fitch RatingAlert: Negative --------------------------------------------------------- Fitch IBCA places Cityscape Home Loan Owner Trust's series 1997-I, class A1 through A4 and Cityscape Home Loan Owner Trust series 1997-II, class A1 through A6 notes on RatingAlert negative. The notes are currently rated 'AAA'. This rating action follows Cityscape Financial Corp.'s recent announcement of its plan to file a prepackaged Chapter 11 bankruptcy petition by Aug. 1, 1998. The RatingAlert reflects Fitch's concern regarding Cityscape's weak financial condition. Deterioration in pool performance or continued weakness in Cityscape's financial condition could necessitate a servicing transfer. Fitch will continue to monitor the company's ability to service the 1997-I and 1997-II portfolio. DRUG EMPORIUM: Sells Inventory to Close Arizona Stores ------------------------------------------------------ Drug Emporium Inc., Columbus, Ohio, will close all nine of its franchise stores in Arizona within the next two months, according to The Arizona Republic. Gordon Brothers Corp. paid $6 million for Drug Emporium of Arizona Inc.'s remaining inventory and equipment after the franchise filed for chapter 11 protection May 12. Under the agreement Drug Emporium signed with Gordon Brothers, it will pay about 46 percent of the proceeds of the sale to the former owner. The current owner bought the franchise in 1995 after the previous owner filed chapter 11. (ABI-08-May-98) FPA MEDICAL MANAGEMENT: Files SEC FORM 8K ----------------------------------------- The Company has received notice of, or has been served with, several federal and state court purported class action lawsuits. In Steven Friedland, Trustee, on Behalf of Himself and All Others Similarly Situated vs.FPA Medical Management, Inc., et al, Number 98CV 930 JM, filed in the United States District Court, Southern District of California, on May 18, 1998, the plaintiff, a current or former stockholder of the Company, seeks to bring this lawsuit on behalf of all persons who purchased common stock of the Company between March 6, 1998 and May 14, 1998. In this lawsuit, the plaintiff alleges violations of federal securities laws. In Michael Giglio and Roger Rubinger, on Behalf of Themselves and All Others Similarly Situated vs. FPA Medical Management, Inc., et al, Number 98CV 931 S, filed in the United States District Court, Southern District of California, on May 18, 1998, the plaintiffs, current or former stockholders of the Company, seek to bring this lawsuit on behalf of all persons who purchased common stock of the Company between February 27, 1997 and May 14, 1998. In this lawsuit, the plaintiffs allege violations of federal securities laws. In Harold M. Sucher, Individually, and On Behalf of a Class of Persons Similarly Situated vs. FPA Medical Management, Inc., et al, Number 98 CV 932 JM, filed in the United States District Court, Southern District of California, on May 18, 1998, the plaintiff, a current or former stockholder of the Company, seeks to bring this lawsuit on behalf of all persons who purchased common stock of the Company between February 27, 1997 and May 15, 1998. In this lawsuit, the plaintiff alleges violations of federal securities laws. In Rick Penick and Coralette Penick, Albert D. Barnabei and Nancy M. Barnabei, and Frederick M.Garson On Behalf of Themselves and All Others Similarly Situated vs. FPA Medical Management, Inc., et al, Number 98 CV 928 S, filed in the United States District Court, Southern District of California on May 18, 1998, the plaintiffs, current or former stockholders of the Company, seek to bring this lawsuit on behalf of all persons who purchased common stock of the Company between February 27, 1997 and May 14, 1998. In this lawsuit, the plaintiffs allege violations of federal securities laws. In Natale Longordo, On Behalf of Herself and All Others Similarly Situated vs. FPA Medical Management, Inc., et al, Number 98CV 939 K, filed in the United States District Court, Southern District of California, on May 19, 1998, the plaintiff, a current or former stockholder of the Company, seeks to bring this lawsuit on behalf of all persons who purchased common stock of the Company between February 27, 1997 and May 14, 1998.In this lawsuit, the plaintiff alleges violations of federal securities laws. In Murray Lebowitz, On Behalf of Himself and All Others Similarly Situated vs. FPA Medical Management, Inc. et al, Number 98 CV 949 TEG, filed in the United States District Court, Southern District of California, on May 20, 1998, the plaintiff, a current or former stockholder of the Company, seeks to bring this lawsuit on behalf of all persons who purchased common stock of the Company between February 27,1997 and May 14, 1998.In this lawsuit, the plaintiff alleges violations of federal securities laws. In Dan J.Craddock, On Behalf of Himself and All Others Similarly Situated vs. FPA Medical Management, Inc., et al, Number 721102, filed in the Superior Court of the State of California, County of San Diego on June 1, 1998, the plaintiff, a current or former stockholder of the Company, seeks to bring this lawsuit on behalf of all persons who purchased common stock of the Company between February 27, 1997 and May 15, 1998. In this lawsuit, the plaintiff alleges violations of state securities laws by the defendants. All of the foregoing complaints have been recently filed and most of them have been served on the Company. The Company is reviewing and evaluating the complaints and is currently unable to assess the merits of any of the claims contained in the complaints, the outcome of any of the lawsuits resulting from the filing of the complaints or the length of time it will take to resolve them. (States SEC - 06/06/98) FIDELITY BANCORP: Files Form 10QSB/A with SEC --------------------------------------------- In its Form 10QSB/A filed with the SEC, Fidelity Bancorp, Inc. announced that net income for the three months ended March 31, 1998 was $665,000 compared to $638,000 for the same period in 1997, an increase of $27,000 or 4.2%. The increase reflects an increase in net interest income of $68,000 or 2.7%, an increase in other income of $83,000 or 36.9%, a decrease in the provision for loan losses of $10,000 or 8.3%, and a decrease in the provision for income taxes of $50,000 or 13.1%. Partially offsetting these factors was an increase in other operating expenses of $184,000 or 11.8%. Net income for the six months ended March 31, 1998 was $1.33 million compared to $1.26 million for the same period in 1997, an increase of $72,000 or 5.7%. The increase reflects an increase in net interest income of $303,000 or 6.1%, an increase in other income of $117,000 or 28.5% and a decrease in the provision for loan losses of $10,000 or 4.3%. Partially offsetting these factors was an increase in other operating expenses of $356,000 or 11.3%. FIRSTCITY: Liquidating Trust Intends to Extend Term --------------------------------------------------- FirstCity Liquidating Trust announced today that there will be a hearing on Friday, June 12, 1998 in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division. At the hearing the Trust will request an extension of the life of the Trust from December 31, 1998 until January 3, 2000. Provisions to request such an extension and additional extensions, if necessary, are contained in the July 3, 1995 Reorganization Plan. Mr. Robert W. Brown, speaking for the Trust, said, "Although the Trust has operated very successfully, generating values far in excess of the maximum range anticipated in the Plan, there are some ongoing litigation and indemnity issues which will extend beyond the original expiration date, as well as some assets which may bring additional value if held a while longer." FirstCity Liquidating Trust is the entity formed to liquidate the assets of the former First City Bancorporation of Texas, Inc. Its Class B and Class C Certificates trade over the counter under the symbols FCFCL and FCFCZ, respectively. (PR Newswire; 06/05/98) FLORIDA TELEPHONE: Files Chapter 11 ----------------------------------- Telephone Company of Central California, Lake Mary, Fla., has filed for bankruptcy protection in part because of its rapid growth, according to The Orlando Sentinel. The local and long distance phone service provider was cited in this month's Entrepreneur magazine as the nation's second fastest growing small business just as the company was filing for bankruptcy. Elder Ripper, president of the company, said that most of its problems are associated with telecommunications service providers and that about 50 percent of its issues were created through its rapid growth. Ripper said the company began losing money because the large companies that sold it service, such as GTE, Sprint and WorldCom, were slow to handle service problems for Telephone Company's customers. Bankruptcy Judge Arthur C. Brisman has schedule a June 22 meeting of the company and its creditors. (ABI-08-May-98) HOMEPLACE STORES: 12 Stores Closing; Bid Procedure Ok'd ------------------------------------------------------- HomePlace Stores Inc.won court approval of bid procedures in connection with closing 12 more stores, give or take a few, and payment of either an $85,000 or $100,000 breakup fee to Hilco/Great American Group if its stalking horse bid is topped at a June 15 auction. While it identified 12 stores as candidates to be closed due to their "substantially" lower sales and profitability figures, HomePlace reserved its right to increase the number of store closings by four stores or reduce the number of closings by three. (Federal Filings Inc. 08-June- 98) HOSPITAL STAFFING SERICES: Report of Stock Ownership ---------------------------------------------------- By information filed in Schedule 13G pertaining to Hospital Staffing Services, Inc. Ronald E. Lusk reports sole voting power of 988,869 shares of common stock or 15.9% of the class. HUNGARIAN BROADCASTING: Files Form 8-KA with the SEC ---------------------------------------------------- On January 5, 1998, pursuant to the Reorganization Agreement, Hungarian Broadcasting Corp. acquired, all of the outstanding common stock of Global in exchange for 3.75 million shares of the Company's Common Stock, 1.25 million of which are to be held in escrow and delivered only upon Global meeting certain performance measures. On January 5, 1998 Global and Hungarian Broadcasting Project Kft. purchased 24% and 76%, respectively, of SZIV Television, a national satellite-to-cable broadcaster currently reaching approximately 1,500,000 television households through the AM Micro transmission system in Budapest and about 140 cable companies via satellite distribution in Hungary. GTN is entitled to 99% of all profits from Sziv, and HBP is entitled to the remaining 1%. In addition, GTN has an option to purchase HBP at any time for $15,000 or to appoint another investor to hold HBP upon the payment of $15,000. On January 5, 1998, Hungarian Broadcasting Corp. was purchased by Global Television Networks, Inc. and Hungarian Broadcasting Project Kft. GTN and HBP obtained a 24% and 76% interest in the Company, respectively. GTN is entitled to 99% of all profits from the Company and HBP is entitled to the remaining 1%. In addition, GTN has an option to purchase HBP at any time for $15,000 or to appoint another investor to hold HBP upon the payment of $15,000. Although the legal ownership structure of the Company indicates HBP having majority ownership, the economic substance of this structure is that GTN is the controlling shareholder and HBP is a nominee shareholder. Subsequent to the purchase of the Company, GTN's management has determined that the former management of Sziv had not fully and completely accounted for transactions entered into for the period ending March 31, 1998. Management is currently investigating this situation, but is confident that no material effect will occur upon the ultimate resolution of the issue. LONG JOHN SILVER: DIP Pact Requires $14M EBITDA By Year-End ----------------------------------------------------------- Covenants in Long John Silver's Inc.'s $65 million debtor-in-possession credit agreement with Chase Manhattan Bank require nearly $14 million of cumulative EBITDA by year-end. The DIP facility, which received interim approval June 2, also limits capital expenditures to $8.5 million for the period ending Dec. 30. The proposed facility matures on May 31, 1999. As of June 1, Long John Silver's owed about $244 million to Chase and the other prepetition lenders, secured by substantially all of the restaurant chain's assets. (Courtesy of The Daily Bankruptcy Review Copyright c June 8, 1998 - ABI 08-June-98) MOTOROLA: Restructuring Charges of Almost $2 Billion ---------------------------------------------------- Motorola Inc. Thursday announced a restructuring that includes sweeping layoffs and restructuring charges of almost $2 billion as Chief Executive Officer Christopher Galvin seeks to restore the financial fortunes of the company his grandfather founded.{Reuters:Financial- 06/05/98) Motorola Inc. and Lucent Technologies Inc. will collaborate on development of a next-generation microprocessor technology that is expected to speed refinement of wireless consumer devices ranging from cell phones with video capability to hand-held Web surfing tools and global positioning systems. The two companies will open and jointly operate a research center in Atlanta and cross-license key technology from each other, officials from both electronics giants said at news conference Tuesday in San Francisco. Neither company would disclose the size of its investment. (SF Examiner-06/03/98) PETRIE RETAIL: Seeks 30 Day Extension of Exclusivity ----------------------------------------------------- Petrie Retail Inc. is once again seeking a 30-day extension of its exclusive periods to file a reorganization plan and solicit plan acceptances as a "precautionary measure" in case more time is needed to finalize talks with the creditors' committee and Warburg Pincus Ventures L.P. regarding the plan they intend to propose jointly. Echoing assertions made in prior requests, Petrie said that although it has almost finalized negotiations and completed related drafting regarding the plan and disclosure statement, "additional time may be needed to complete these tasks." (Federal Filings Inc. 08-June-98) PHILIPPINE AIRLINES: On the Brink of Bankruptcy ----------------------------------------------- Philippine Airlines said Monday it was on the verge of bankruptcy after potential foreign investors called off talks following a crippling pilots' strike which entered its third day. A "conciliation meeting" mediated by Labour Secretary Cesenciano Trajano failed to break a deadlock between management and the 620-member Airline Pilots Association of the Philippines, officials said. Ninety-three of 125 scheduled flights were cancelled Monday, and Trajano gave the striking pilots until Tuesday to return to work, leaving it to the PAL management to take action if they refused. PAL management has already said it had sacked the 620 pilots who defied an earlier labour department order to return to work by noon Sunday, but the pilots said they had received no such order. The pilots are protesting at management's policy of early retirements for those who have reached 20 years of service or flown 20,000 hours, regardless of age. The retrenchment of one pilot sparked the strike Friday evening. "The illegal strike by pilots of Philippine Airlines has scared interested foreign investors into breaking off talks for a critical equity investment in PAL, dooming what may be the flag carrier's final chance to stave off financial collapse," PAL said in a statement. It said that "in an effort to stay afloat, PAL had been engaged in serious talks with a number of foreign carriers who were looking to take a significant equity stake in the airline. "But the work stoppage ... in open defiance of two government orders, has caused investors to lose interest in PAL," the statement added. Management did not identify the foreign carriers, but company sources said there had been talks with Northwest Airlines of the United States and two other firms for a possible bailout. PAL, controlled by ethnic Chinese tobacco and beer magnate Lucio Tan, said the strike had caused losses of between 150 million to 200 million pesos (3.8 to 5.1 million dollars) daily. This has pushed "the cash-strapped airline closer to the brink of insolvency," it said, noting that the national flag carrier was "already reeling from the worst financial crisis in its 57-year history" caused by the Asian financial crisis. Several Asian airlines including PAL have been hurt by the financial crisis as well as a tourism slump which has eaten into their earnings. In the fiscal year ending March 31, 1998, PAL suffered its largest ever net loss of 8.08 billion pesos (207 million dollars). In March 1998 alone, the airline lost about one billion pesos and in fiscal 1996-1997, it was in the red by 2.5 billion pesos. PAL operations for Monday were reduced to two round-trip flights -- to Tokyo- Narita and Singapore -- and 28 domestic flights. All were manned by 25 pilots in managerial positions, senior vice president for sales and services Avelino Zapanta said. The airline, which has a workforce of about 13,000, says that on average it operates 25 international and 50 domestic flights daily. Its European, US and Australian flights are "on hold as of today (Monday)," Zapanta said. There were angry scenes at several provincial airports Monday as stranded passengers demanded refunds or sought other flights. In Manila a small group of pilots picketed the PAL flight operations center near the international passenger terminal. "We are prepared for the long haul if necessary," union official Ronnie Cunanan said. Officials of the PAL ground crew and flight attendants' unions threw their "moral support" behind the pilots but said they would not be joining the strike. The strike hit the Philippines at a particularly sensitive time. It celebrates the centennial of its 1898 declaration of independence from Spanish colonial rule on Friday. (Agence France Presse - 06/08/98) PLAYNET TECHNOLOGIES: Files Chapter 11 -------------------------------------- PlayNet Technologies Inc., San Francisco, filed for chapter 11 protection in the District of Delaware late last week, listing liabilities of $19.5 million and assets of only $13,734, according to a newswire report. The company, which designs and distributes networked out-of-home entertainment terminals, has more than 200 unsecured claims of about $17.9 million. (ABI-08-May-98) SPENCER METAL: EPA Lowers Fine to Prevent Bankruptcy ---------------------------------------------------- The U.S. Environmental Protection Agency has fined Spencer Metal Finishing Co. on Mill Street $10,000 for violating several provisions of the Resource Conservation and Recovery Act, a federal waste-handling law. EPA officials said the company, which buffs, grinds, degreases and powder-coats metal parts, had illegally stored waste for five years without notifying the EPA or the Massachusetts Department of Environmental Protection. Nearly 20 drums of hazardous waste had been improperly labeled and stored at the factory, according to the EPA. "This penalty will get the company on the straight and narrow, environmentally, and will provide a safer working place for its employees and the surrounding neighborhood," said John P. DeVillars, administrator of the New England office of the EPA. According to the agency, the company did not have proper storage facilities for hazardous waste and did not properly manage the waste it generated. Waste containers were stored for several years on pallets set on a wood floor with no provision for secondary containment. Since the initial inspection by the EPA last June, the company has properly disposed of its hazardous waste, the EPA said. It has also agreed to close its hazardous waste storage area. The EPA said that because of the company's financial condition, the original proposed fine of $271,000 was reduced to $10,000 in order to prevent it from having to file for bankruptcy. (Telegram Gazette Worcester- 06/04/98) THERMADYNE HOLDINGS: Merger with Subsidiary of DLJ -------------------------------------------------- On May 22, 1998, Thermadyne Holdings Corporation and DLJ Merchant Banking Partners II, L.P. ("DLJMB") announced the closing of the merger of Mercury Acquisition Corporation, a subsidiary of DLJMB and affiliated funds and entities (the "DLJMB Funds"), with and into Thermadyne (the "Merger")and the associated recapitalization of Thermadyne. As a result of the transaction, the DLJMB Funds acquired approximately 80.6% of the outstanding Common Stock of Thermadyne. The Merger was approved by a majority of Thermadyne's stockholders at a special meeting held on May 21, 1998. The transaction was financed by (i) approximately $355 million of proceeds from a new senior secured loan facility entered into among Thermadyne Mfg. LLC, a subsidiary of Thermadyne ("Thermadyne LLC"), Donaldson, Lufkin & Jenrette Securities Corporation, as arranger, DLJ Capital Funding, Inc., as syndication agent, ABN AMRO Bank N.V., Chicago Branch, as administrative agent, Societe Generale, as documentation agent, and the other lenders party thereto,(ii) $94.6 million of proceeds from the issuance by Thermadyne of its 12 1/2% Senior Discount Debentures due 2008, (iii) $205.4 million of proceeds from the issuance by Thermadyne LLC and Thermadyne Capital Corporation, a subsidiary of Thermadyne LLC, of 9 7/8% Senior Subordinated Notes due 2008, and (iv) approximately $140 million of proceeds from the issuance by Thermadyne of common stock, preferred stock and warrants to the DLJMB Funds. The press release following the transaction announced: DLJ Merchant Banking Partners II, L.P. and affiliated funds and entities announced the completion of their previously announced acquisition of Thermadyne Holdings Corporation. Separately, Thermadyne announced that it had purchased $99,230,700 or 99.9% of the principal amount of its 10.25% Senior Notes due May 1, 2002 and $142,196,000 or 79.3% of the principal amount of its 10.75% Senior Subordinated Notes due November 1, 2003 pursuant to its April 23, 1998 offer to purchase such securities. Headquartered in St. Louis, Missouri, Thermadyne is a multinational manufacturer of cutting and welding products. Thermadyne had sales of $520.4 million and $131.8 million for the year ended December 31, 1997 and the three months ended March 31, 1998, respectively. UNISON: Fails to Renegotiate $100 Million Debt ---------------------------------------------- As expected, Unison HealthCare Corp. has filed for Chapter 11 bankruptcy. The Scottsdale health care company filed for protection to reorganize after it failed to renegotiate its $100 million debt. "It was going to have to happen whether we renegotiated it or not," said Michael Jeffries, who was brought on as president and chief executive to turn around the company. "We are in negotiations with note holders to restructure our debt and equity portion so that it would be anticipated that there would be a conversion of the debt to an equity position," he said. That means the note holders of the company's $100 million debt would become the new shareholders, and the current shareholders' interest would be severely diluted or eliminated, he said. The company filed Chapter 11 to avoid or delay actions by the company's creditors and lessors, which could cause the company to close its doors. This filing follows on the heels of a Chapter 11 filing of the company's Texas and Indiana operations. Those filings, from last year, most likely will be consolidated into the new Chapter 11 filing, which covers Unison and all of its operating subsidiaries. Unison's problems started surfacing in March 1996 when the company announced its intention to restate its earnings. That announcement sparked a shareholder lawsuit and the resignation of the co-founders of the company. "We have communication that the shareholder lawsuit is very close to settlement," said Jeffries. Unison operates 42 skilled-nursing facilities and six independent-living centers in several states. "We don't anticipate closing any facilities." The second order of business, he said, is to continue to negotiate with the company's creditors and landlords to achieve a reorganization plan that the majority of the parties can agree on and can be approved by the U.S. Bankruptcy Court. (Business Journal Phoenix - 06/05/98) VALLEY COMMERCIAL COLLEGE: Files Chapter 7 ------------------------------------------ California's Valley Commercial College, Modesto, Calif., filed for chapter 7 protection this week, listing $100,000 to $500,000 in debts owed to about 240 creditors, The Modesto Bee reported. The vocational business college abruptly closed its doors about three months ago after it lost federal funding for student loans and grants. The U.S. Department of Education took the action after its study indicated late payments for student refunds and misrepresentation of payment records. (ABI-08-May-98) WOODLANDS RACETRACK: Judge Appoints Trustee ------------------------------------------- U.S. Bankruptcy Judge John T. Flannagan in Kansas City, Kansas, last week appointed a bankruptcy trustee to take over operation of The Woodlands racetrack and to arrange for its sale at auction, according to The Kansas City Star. The Woodlands has been in bankruptcy for more than two years, and William Grace, its principal creditor and operator of several gaming facilities, is waiting to buy it. Flannagan granted a creditors' motion to convert the case from reorganization to liquidation. Attorney Eric C. Rajala will operate the track and arrange its sale, while attorney Janet Chubb will oversee pari-mutel betting at the track. The Woodlands has appealed Flannagan's rejection of its reorganization to the Bankruptcy Appellate Panel in Denver and now is seeking a stay from the BAP to try to freeze sale of the track until the appeal is resolved. (ABI-08-May-98) Meetings, Conferences and Seminars ---------------------------------- 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 June 15, 1998 AMERICAN BANKRUPTCY INSTITUTE & FEDERAL ENERGY BAR ASSOCIATION Utility Restructuring and Bankruptcy -- What Every Utilty Leader, Regulator, Attorney and Lender Needs to Consider as the Millennium (Armageddon!) Approaches Hilton Crystal City Hotel, Arlington, Virginia 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 24-27, 1998 NATIONAL ASSOCIATION OF CHAPTER 13 TRUSTEES 33rd Annual Seminar Portland Marriott, Portland, Oregon Contact: 1-601-355-6661 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 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 October 22-25, 1998 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES 72nd Annual Meeting Wyndham Anatole Hotel, Dallas, Texas Contact 1-803-957-6225 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, Tuscon, Arizona Contact: 1-703-739-0800 February 18-21, 1998 COMMERICAL LAW LEAGUE OF AMERICA Annual Western District Meeting Monte Carlo Hotel & Casino Resort, Las Vegas, Nevada Contact 1-702-382-9558 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. ********* 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. 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