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/raid1/www/Hosts/bankrupt/TCR_Public/980612.MBXT R O U B L E D C O M P A N Y R E P O R T E R Friday, June 12, 1998, Vol. 2, No. 115 Headlines AL TECH: Gets 5 More Months to Restructure APPLIANCE RECYCLING: Files Form 13G with the SEC BOYDS WHEELS: Plans to Auction Fixed Assets DOW CORNING; First Quarter Profit Rises FRETTER: Court Extends Exclusive Periods GDANSK SHIPYARD: Attracts Several Bids GENERAL WIRELESS: Justice Department Challenges Decision GLOBAL ASSOCIATES: EDO to Acquire Technical Services HOMELAND HOLDING: Files Form S-8 with the SEC JACKSON BROOK: Tennessee Company Hired as New Manager NABISCO: Second Quarter Charge of $268 Million NEXTWAVE: Wins FCC Auction - Files For Bankruptcy PHC INC: Files SEC FORM 8K PEACOCK FINANCIAL CORPORATION: Files FORM S-8 with the SEC POLAROID: Announces Slumping Sales SHOPPING.COM: Markley Replaces McNulty SINGING MACHINE: Form 10-QSB for Quarter Ended 6/30/97 UNDERWATER WORLD: Charts Path Out of Bankruptcy VOXEL INC: Files for Chapter 11 Protection VITALE: A&P Bidding for Five Foodtown Markets WSR CORPORATION: Files Chapter 11 Bankruptcy Petition WESTMONT INDUSTRIES: Fate of Westmont to Be Decided Aug 29 WET SEAL: Files Quarterly Report with the SEC WOODLANDS: Owners of Woodlands Appeal Chapter 7 action ********* AL TECH: Gets 5 More Months to Restructure ------------------------------------------ A bankruptcy judge has given AL Tech Specialty Steel Corp. an additional five months to continue its restructuring. The corporation, which filed for Chapter 11 protection on Dec. 31, has been given an extension for restructuring until Oct. 31. "We continue to meet or exceed our plan through the first five months of the reorganization," Sanvidge said. "We are looking for slow, steady growth to keep to the plan. We are defining products and looking for higher margin products that are more profitable," he said. (Buffalo News - 06/07/98) APPLIANCE RECYCLING: Files Form 13G with the SEC ------------------------------------------------ In Form 13-G filed with the SEC, Appliance Recycling Centers of America reports 218,789 common shares of stock pursuant to this report beneficially owned. This includes 131,289 common shares owned by the clients of Perkins Capital Management, Inc., and 87,500 common shares owned by the Perkins Opportunity Fund. Perkins Capital Management, Inc. disclaims beneficial ownership in the Perkins Opportunity Fund shares. The percent of class is 19.2%. This includes a percentage of class of 11.5% by clients of Perkins Capital Management, Inc. and 7.7% by the Perkins Opportunity Fund. BOYDS WHEELS: Plans to Auction Fixed Assets ------------------------------------------- Boyds Wheels, bankrupt since January, will auction its fixed assets this week and even that might not kill off the company. The wheel maker's bankruptcy attorney said Monday that Boyds' officials continue to talk to competitors about a buyout and hold out hope that a company called Boyds' Wheels might resume operation. Boyds' Wheels' attorney, Jeff Golden said that the company hopes to raise from $5 million to $10 million by selling everything from heavy machinery to motorcycle jackets. The company also might sell the assets of its wholly owned subsidiary, Hot Rods by Boyd. In addition, Boyds' plans to sell its Stanton distribution center, with a minimum asking price of about $1.8 million, Golden said. It's unclear how many cents on the dollar will be repaid to unsecured creditors. Boyds' biggest secured creditor, City National Bank, is owed about $8 million. Unsecured creditors, including vendors and other businesses, are owed about $4 million. After this week's auction, Golden hopes to resume talks with other wheel makers who might want the company's designs and its brand name. "The name still means something with consumers," Golden said. "That's the basis for the interest." For information about the auction, call Hackman Capital Partners at (310) 473-8900. (Orange County Register; 06/02/98) DOW CORNING; First Quarter Profit Rises --------------------------------------- Dow Corning Corp.'s first-quarter profit rose 2.8 percent as increased silicon sales and lower bankruptcy reorganization costs offset a strong dollar and rising operating expenses. The specialty chemicals maker said first-quarter net income rose to $54.9 million, or $21.96 per basic share, from $53.4 million, or $21.36 per basic share, in the year- earlier quarter. Sales rose 2.6 percent to $649.1 million from $632.7 million. Dow Corning is a joint venture equally owned by Dow Chemical Co. and Corning Inc. The company said a strengthening dollar eroded the value of foreign sales, which contributed more than half of overall 1997 revenue, for products such as fluids and sealants. FRETTER: Court Extends Exclusive Periods ---------------------------------------- By order entered June 2, 1998, the court approved the motion of debtors, Fretter, Inc., et al., seeking an extension of exclusive periods. The debtors and the Creditors' Committee shall have the exclusive right to file a plan or plans of liquidation through and including September 1, 19998. The debtors and the Creditors' Committee shall have the exclusive right to obtain acceptance of such a plan or plans through and including November 2, 1998. GDANSK SHIPYARD: Attracts Several Bids -------------------------------------- At least three serious bids for the bankrupt Gdansk shipyard have been received by the administrator of the bankruptcy assets. A decision, originally expected for the end of May, is now not likely to come before the end of June. One prominent bidder is the Gdynia Shipyard. Another offer for Stocznia Gdanska was made by the KBO Shipbuilding group, a joint venture of Marine Metal, Regan Consult and Navimor Intertrade. The latter is part of the former marine foreign trade monopoly Navimor. KBO said that it plans to invest $70m in the yard. Stocznia Szczecinska shipyard in Szczecin, large bulk operator Polish Steamship Co (PSC) and the Gdansk repair yard, Remontowa, are a third consortium also bidding for Gdansk. Other offers are expected, including two international bids from Canada and Greece. The Gdansk yard has continued operating while in receivership. The fact that Gdansk is building three containerships even though it is in bankruptcy, is mainly due to the German tax law. The ships had been ordered when the old, favourable tax regime was still in force in Germany and had to be completed by the yard where they were ordered, otherwise investors in shipping funds would have lost large tax benefits. Gdansk Shipyard went bankrupt in June 1996. The bankruptcy was formally brought about by the government, which owned 60% of the company. The remainder was held by the workforce. (LLoyds List International - 06/10/98) GENERAL WIRELESS: Justice Department Challenges Decision -------------------------------------------------------- The Justice Department is challenging an April 24 decision by the U.S. Bankruptcy Court for the Northern District of Texas. It lets General Wireless Inc. retain the licenses it won at a 1997 government auction even though the company hasn't fully paid the government for them. One of the biggest bidders in that auction, General Wireless bid $1.06 billion for 14 licenses to offer the next generation of wireless communications known as PCS - personal communications services. The government Monday appealed a court decision that let a company involved in bankruptcy proceedings retain valuable communications licenses.(San Antonio Express News - 06/09/98) GLOBAL ASSOCIATES: EDO to Acquire Technical Services ---------------------------------------------------- EDO Corporation (NYSE:EDO) announced that it has agreed to acquire the assets of the Technical Services Group, Falls Church, Va., a unit of Global Associates Ltd., for $4.8 million in cash. Global Associates currently is operating under Chapter 11 bankruptcy protection. A hearing on the matter is expected in early summer 1998. The Technical Services Group, which had revenue for the most recent twelve- month period of approximately $12 million, provides operations and systems analysis to the Department of Defense and other governmental agencies. EDO Corp. designs and manufactures advanced electro optical, electronic, mechanical, acoustic and composite products for the defense and aerospace industries. JACKSON BROOK: Tennessee Company Hired as New Manager ----------------------------------------------------- Quorum Health Resources of Tennessee has been hired to manage Jackson Brook. The firm, which specializes in hospital management, sales and mergers, runs 400 other hospitals across the country. David Hillman, a lawyer for the South Portland institution, also said the financial crisis that drove the hospital into bankruptcy in March is over. However, the hospital still owes its creditors at least $7 million. Hillman said emergency managers have stabilized the hospital's finances, doubled the number of patients and planned two new treatment services. Nine buyers have expressed interest in Jackson Brook, including Maine Medical Center and Mercy Hospital, Hillman said, and the South Portland hospital could be sold in six months. It's unclear what the hospital's total debt is, but Jackson Brook's top 10 creditors have filed claims for $7.4 million in unpaid bills. The state of Maine is among the hospital's major creditors. Gary Brooks, who ran the hospital for Allomet Partners, said Monday that the number of patients has climbed from 30 to 60 since late March, and that Jackson Brook would be offering two new services. A new psychiatric intensive care unit will open Monday, and a juvenile transition unit to help youths move from hospitals to the community will go into operation by August, he said. Brooks declined to comment on the operations of the previous owner. But he said Allomet had improved operations by shutting down an unprofitable geriatric unit, cutting costs in insurance and pharmaceuticals and seeking more competitive bids for services. Hillman, the hospital's lawyer, said Brooks had stabilized the hospital's finances several weeks sooner than expected. Jackson Brook remained in operation partly because the Department of Human Services agreed to the early release of $2.3 million in payments to the hospital after it went bankrupt. Portland Press Herald -06/09/98) HOMELAND HOLDING: Files Form S-8 with the SEC --------------------------------------------- Homeland Holding Corp. reports that a total of 432,222 shares have been reserved for issuance pursuant to options granted or to be granted under the company's 1996 Stock Option Plan and are being registered. The proposed maximum aggregate offering price of 176,000 of such shares that are subject to outstanding options has been calculated based on the weighted average exercise price of such outstanding options of $6.19 per share. The proposed maximum aggregate offering price of 256,222 of such shares that are not subject to outstanding options has been calculated based on the average of the high and low sales prices of the Common Stock as reported on the NASDAQ National Market System on June 4, 1998, which average price was $7.8125 per share. The Common Stock of the Company is traded on the NASDAQ National Market System under the symbol "HMLD." NABISCO: Second Quarter Charge of $268 Million ---------------------------------------------- Nabisco Holdings Corp., said Monday it will take a second- quarter charge of about $268 million, or three times estimated earnings, to slash costs by firing about 3,100 workers and closing nine factories. The company will take another $118 million in pretax charges over the next year as it pares its work force by 6 percent. Chief Executive James Kilts will use the $100 million in annual savings to boost ad spending by a third to try to regain sales lost to rival Keebler Foods Co. Nabisco's shares fell 13 percent to a four-month low as the size of the charges surprised investors, who expected earnings to start rising again later this year. The restructuring is Nabisco's second in two years aimed at reducing expenses, costing more than $1 billion in pretax charges. (San Antonio Express News - 06/09/98) NEXTWAVE: Wins FCC Auction - Files For Bankruptcy -------------------------------------------------- NextWave Telecom Inc. joined the number two and three bidders, Pocket Communications and General Wireless Inc. respectively, in filing for Chapter 11 bankruptcy protection to avoid paying the full prices for the C-block licenses. Last Friday, a US Appeals Court rejected an appeal by NextWave to block the FCC's debt payment rules for the personal communications services (PCS) license payments until the case is resolved, forcing the company to declare bankruptcy. NextWave, like all other bidders, had until yesterday to chose a method of payment for the licenses. The bankruptcy filing angered FCC Chairman William Kennard who said, " (the filing) underscores again the urgent need for Congress to make clear that the licenses to use the public's airwaves are public assets, not private property that can be tied up in bankruptcy." "NextWave now seeks judicial permission to break the deal it made when it bid on the licenses," he said. Noting that "an overwhelming majority of C-block licensees have either elected one of the restructuring options or decided to continue under their current payment terms," Kennard said "it is unfortunate that NextWave has chosen bankruptcy. Bankruptcy is a drastic measure that benefits no one." The auction generated net revenues of some $10.2 billion for Uncle Sam, with NextWave winning 56 licenses for $4.2 billion, Pocket Communications winning 43 licenses on bids of $1.4 billion, and General Wireless bidding $1 billion for 14 licenses. NextWave had planned to pay for the licenses with money it raised through an initial public offering, but Wall Street soured on wireless providers, and NextWave's IPO failed to raise enough cash. According to NextWave's appeal, the options offered by the FCC "are not commercially viable and will have the opposite effect from the relevant statutory mandate that the FCC facilitate the prompt entry of small business competitors into the emerging PCS industry." NextWave is hoping to receive the same discounts General Wireless received last April, when federal bankruptcy judge Steven Felsenthal ruled that the licenses won by General Wireless were worth only $166 million. The ruling meant that General Wireless only had to pay the FCC an additional $58 million to receive the licenses, for which it bid $1 billion. "The April 24 General Wireless ruling undermines the heart of the auction process," Kennard said. "The winning bidder's promises to pay the full amount of the winning bid." The US Justice Department, meanwhile, appealed the General Wireless ruling last week, claiming the company still owes almost $900 million for the licenses. "While we will pursue this appeal, Congress also should take action by enacting legislation to clarify that bankruptcy should not be used to hold auctioned licenses captive," Kennard added. NextWave said the nine-month lag time between when the company bid on the personal communications services licenses and when they became available for use reduced their value. The company also said the delay interfered with its ability to raise financing. "The material delay caused by the inaction of the FCC completely frustrated the ability of (NextWave) to obtain the financing necessary to build out their PCS systems and to make the installment payments to the FCC on the acquired licenses," NextWave said in its bankruptcy filing. (Newsbytes; 06/09/98 and San Diego Union Tribune - 06-09- 98) PHC INC: Files SEC FORM 8K -------------------------- "On May 26, 1998, PHC, Inc.'s wholly owned subsidiary, Quality Care Centers of Massachusetts, Inc., doing business as Franvale Nursing and Rehabilitation Center, filed for reorganization under Chapter 11 of the United States bankruptcy Code in the Eastern Division of the District of Massachusetts at Boston, Massachusetts. On May 27, 1998 on motion of Franvale, the court authorized the appointment of Joseph Braunstein as the Chapter 11 Trustee. On May 29, 1998, the Bankruptcy Court terminated the Chapter 11 proceeding determining that there was no likelihood of reorganization since the prospective acquirer of the facility was now imposing certain terms unacceptable to all interested parties and that the transfer of patients and liquidation of assets could be as readily effectuated in a state court receivership under the aegis of the Massachusetts Health Care Statutes and accordingly dismissed the Chapter 11 case. On June 1, 1998, on the Petition of the Attorney General of the Commonwealth of Massachusetts on behalf of the Department of Public Health with the acquiescence of Franvale, Robert Griffin was appointed by J. Kottmyer as Receiver to transfer the patients and close the facility expeditiously. The management of PHC does not believe that the liquidation of the assets of Quality Care Centers of Massachusetts, Inc. will have a substantial impact on PHC's financial position as previously reported. Quality Care Centers of Massachusetts, Inc. posted a loss from Discontinued Operations of approximately $1.8 million in the nine months ended March 31, 1998 and $1.9 million in the previous fiscal year. The elimination of this loss will enhance the profitability of PHC." PEACOCK FINANCIAL CORPORATION: Files FORM S-8 with the SEC ---------------------------------------------------------- Peacock Financial Corporation reports a Consulting Agreement with Corporate Stock Promotions LLC. The title of the "plan" is: "Corporate Stock Promotions, LLC./Compensation Contract", and the company whose securities are to be offered pursuant to the plan is Peacock Financial Corporation. (2) Corporate Stock Promotions, LLC is a consultant to Peacock, and in such consulting capacity has entered into a written compensation contract for services rendered. Such written compensation contract is defined as an "Employee Benefit Plan". The securities to be offered: (1) 40,000 shares of registrant's common stock. (2) The Capital Stock to be issued are the common shares of the company that are fully paid and non assessable, with the same rights and privileges as all other common stock shareholders of the registrant. POLAROID: Announces Slumping Sales ---------------------------------- Polaroid Corp., the world's largest instant photography company, is expected to announce today that second-quarter profits will be less than forecast because of slumping sales, analysts said. Polaroid alerted analysts after the close of trading Monday that it will make an announcement on an unspecified subject. Two months ago, the company gave analysts a heads- up one day before it reported a big first- quarter loss. Analysts now are betting Polaroid again will divulge a problem with earnings. The company is struggling to boost sales of its older products as investors await the arrival later this year and in 1999 of Polaroid's first batch of new products in a generation. The stock fell 22 percent in the past 12 months as Polaroid's sales hovered just above $2 billion a year, as they have the entire decade. SHOPPING.COM: Markley Replaces McNulty -------------------------------------- On June 1, 1998, the Board of Directors of Shopping.Com accepted the resignation of Robert J. McNulty from his positions as President and Chief Executive Officer and as a board member of Shopping.com for personal reasons. The Company has appointed John Markley as Chief Executive Officer and President to replace Mr. McNulty and assume such responsibilities effective immediately. Mr. Markley has also been appointed to the board of directors to fill the vacancy created by Mr. McNulty's resignation. Mr. Markley is currently the founder of Allwoods Management Group providing management consulting to businesses primarily in the areas of retailing and real estate. Effective June 1, 1998, the Company entered into a Termination and Buy-Out Agreement with Mr. McNulty terminating his Employment Agreement dated May 1, 1997 whereby he will receive cash consideration, which is to be paid over the next two years and options to purchase shares of the Company's common stock. Effective June 1, 1998, the Company entered into a three year consulting agreement with Cyber Depot, Inc., a California corporation whereby Cyber Depot's principal, Mr. Robert McNulty, will act as a consultant to the Company providing general services relating to the operation, promotion, strategic planning marketing, geographic expansion and financing of the Company's business. SINGING MACHINE: Form 10-QSB for Quarter Ended 6/30/97 ------------------------------------------------------ The report of the independent auditors of The Singing Machine Company Inc. on its 1997 financial statements express substantial doubt about the company's ability to continue as a going concern. The independent auditors attributed this substantial doubt to substantial net operating losses in the fiscal year ended March 31, 1997 and an accumulated deficit of approximately $10.0 million. The auditors have further noted that the Company experienced a substantial decline in sales. The Company is currently dependent on the financing provided by Asia-Tech & Bankers Capital to allow it to make inventory purchases in advance of the peak holiday selling season. The Company does not have a dedicated line of credit in place to finance its seasonal needs for inventory purchases. The discontinuance of financing currently in place could result in the Company being forced to curtail its operations. The financial statements do not include adjustments relating to the recoverability and classification of the recorded carrying value of assets or the amounts or classifications of other liabilities that might be necessary should the Company be unable to successfully negotiate additional inventory financing and continue as a going concern. There were 2,883,582 shares of Common Stock, $.01 par value, issued and outstanding at June 30, 1997. A full-text copy of the filing is available via the Internet at: http://www.sec.gov/Archives/edgar/data/0000943440-98- 000042.txt UNDERWATER WORLD: Charts Path Out of Bankruptcy ----------------------------------------------- The UnderWater World aquarium at the Mall of America has prepared a turnaround plan that includes significantly reduced rent, partial payoffs to some bondholders and marketing strategies such as construction of "an enormous shark" around one set of the mall's elevators. The plan does not reduce interest rates or lengthen payback on the debt that helped put the attraction into deep water last year. But the plan could set the stage for the discounted sale of the attraction, with proceeds going to the senior bondholders. The plan faces a preliminary hearing June 17 and perhaps a subsequent vote by bondholders and claimholders. UnderWater World attorney James Baillie said that because the plan was developed with creditors' representatives, aquarium officials are optimistic it will be approved. President Erik Pedersen said he might try to negotiate a buyout of the attraction, which cost about $26 million to develop. The plan estimates the buyout value at more than $8 million, and Pedersen said he has commitments for about two-thirds of that amount. But he stressed that he does not know whether senior bondholders would accept such an offer. Under the amended reorganization plan, holders of $16.4 million in senior bond debt would be paid from the attraction's excess cash flow. Subordinated, or junior, bondholders would receive pro rata shares of a $650,000 pool equivalent to about 10 percent of the $6.5 million principal amount. If the subordinated bondholders vote against the proposal, they run the risk of getting nothing, Pedersen and Baillie said. A key part of the plan provides for significantly reduced rent payments to the Mall of America - $358,000 per year plus 15 percent of gross revenue over $6.5 million. The aquarium's current lease requires payments of about $1.2 million per year, including utilities and taxes, although full monthly payments have not been made since the Chapter 11 filing. The mall not only would forgo the balance of those reduced payments, it also would refund $325,000 that senior bondholders said should not have been paid to the mall because of legal priorities for the aquarium's revenues. If the June 17 hearing leads to voting by bondholders and creditors, another court hearing likely will be scheduled this summer to confirm the plan's provisions. (Twin Cities Star-Tribune; 06/05/98) VITALE: A&P Bidding for Five Foodtown Markets --------------------------------------------- Five North Jersey Foodtown supermarkets would be converted to the A&P label under a deal negotiated by a federal bankruptcy court official. The Foodtown stores in Old Tappan, Washington Township, Dumont, Hoboken,and Kearny would be sold to Montvale-based A&P. All are owned by Vitale Foodtown Inc. of Old Tappan, which filed for Chapter 11 bankruptcy protection in November. The fate of the Vitale Foodtown store in River Edge is uncertain. The sale is subject to approval by the U.S. Bankruptcy Court in Newark, which could come next week, said Michael Rourke, a spokesman for A&P. Details of the deal were not available Friday. The deal was negotiated by Ed Bond, an accountant from West Orange who has appointed "responsible officer" by the court. Vitale, which at one time operated 12 Foodtown stores in Bergen, Hudson, and Essex counties, closed stores in Midland Park and Saddle Brook about a month ago. Depending on what happens in River Edge, no Foodtowns will remain in Bergen County if the sale to A&P goes through.(Record New Jersey - 06/06/98) VOXEL INC: Files for Chapter 11 Protection ------------------------------------------ Medical imager Voxel Inc. filed for bankruptcy Tuesday, saying it hopes to stay in business while it figures out how to pay off a $1.9 million arbitration loss. The 32-employee company, which is trying to develop a device that will create three-dimensional holographic X- rays, filed for Chapter 11 protection in Santa Ana. If, as expected, the court grants Voxel protection, the company can put off paying its creditors for an unspecified period. Voxel's biggest creditor is General Scanning Inc. The Watertown, Mass.-based company last month was awarded $1.9 million, capping a two-year dispute with Voxel. Voxel officials said they filed for bankruptcy only after payment negotiations with GSI broke down. "They've insisted on full payment or a security interest in our (patents), which we're not prepared to give up," said Allan Wolfe, Voxel's chief executive. Victor Woolley, GSI's chief financial officer, said his company isn't pushing Voxel into bankruptcy. "Voxel doesn't have cash to last beyond this quarter," Woolley said. Voxel now needs cash, and Wall Street probably isn't an option. The company has held two public offerings since late 1994 and seen its stock trade as high as $9. It closed Tuesday at $1.25, unchanged. Wolfe said a "large company," which he declined to name, is interested in financing Voxel. He added that the Food & Drug Administration has approved a prototype of Voxel's device which took 10 years to develop and that some companies have placed orders pending Voxel's ability to manufacture its product for the mass market. (Orange County Register - 06/03/98) WSR CORPORATION: Files Chapter 11 Bankruptcy Petition ----------------------------------------------------- WSR Corporation, (Strauss Auto) located at 9A Brick Plant, South River, NJ 08802-1098 filed for Chapter 11 bankruptcy protection on June 9, 1998, Case 98-1241. The debtor's affiliates National Automotive Stores, Inc. and National Auto Stores Corp. filed bankruptcy cases in June 1998. Creditors holding the largest unsecured claims were Alliance Corporate Finance Group, Inc., with a subordinated bank debt in the sum of $13,400,000 and R&S Strauss, Inc., with an intercompany claim in the amount of $26,242,000. The 111 store regional auto parts chain was squeezed by national rivals moving into the Northeast. Last year, the chain had sales of roughly $175 million, with most of its stores in the New York metropolitan area. The 40 Strauss stores in new York are not expected to close. WESTMONT INDUSTRIES: Fate of Westmont to Be Decided Aug 29 ---------------------------------------------------------- The fate of Westmont Industries Bhd (WIB) and its wholly- owned subsidiary Sabah Shipyard Sdn Bhd (Saship) will be known on August 29 when WIB presents the details of its restructuring proposals to the High Court. Creditors of the group are expected to vote on the proposals on the same day. If accepted, the restructuring process will start by the end of the year, group director Datuk Jaffar Indot told reporters at a briefing yesterday. WIB and Saship owe its creditors about RM970 million. Of the amount, WIB owes RM66.49 million, of which RM61.09 million is due to unsecured creditors which include financial institutions, RM869,000 to partially-secured creditors and RM4.88 million to unsecured general creditors, including hire-purchase and leasing companies. Saship's debt amounts to RM907.3 million, including RM197.91 million owed to WIB and a provision of RM312 million for bad debts. The proposals will be binding on all WIB's creditors if it is approved by 75 per cent of the creditors in terms of value and 50 per cent in the number of each class of creditors, said Jaffar. WIB posted a pre-tax loss of RM664.79 million on a turnover of RM376.61 million. Group loss after tax stood at RM715.58 million. "The new board found that the preliminary unaudited results for the financial year, which was originally announced as a profit after tax of RM54.9 million, could not be substantiated," said Mohd Desa. The High Court had on February 4 1998 granted a restraining order allowing WIB to proceed with the restructuring scheme. The scheme includes a proposal to reduce 33 sen for each fully paid-up RM1 WIB share, in order to reduce the balance of accumulated losses by RM77.7 million. This will be followed by a restricted issue to WIB's major shareholder, Swascojuta Sdn Bhd - holding 21.8 per cent - to raise about RM61.15 million. "Liquidation of WIB is not a viable alternative as most creditors will not receive full payment while shareholders' investment in WIB will likely be rendered valueless," said Mohd Desa. (Business Times; 06/09/98) WET SEAL: Files Quarterly Report with the SEC --------------------------------------------- Wet Seal Inc. reports that sales in the first quarter of fiscal 1998 ended May 2, 1998 were $104,845,000 compared to sales in the first quarter of fiscal 1997 of $95,563,000, an increase of $9,282,000 or 9.7%. Net income was $3,488,000 in the first quarter of fiscal 1998 compared to $3,515,000 in the first quarter of fiscal 1997. As a percentage of sales, net income was 3.3% in the first quarter of fiscal 1998 compared to 3.7% in the first quarter of fiscal 1997. A full-text copy of the filing is available via the Internet at: http://www.sec.gov/Archives/edgar/ 0001047469-98-023397.txt WOODLANDS: Owners of Woodlands Appeal Chapter 7 action ------------------------------------------------------ A federal judge last week granted a request by creditors to convert the financially troubled track from a slow Chapter 11 financial reorganization case into an involuntary Chapter 7 liquidation proceeding. That means a relatively quick sale to new owners is now in the works. However, the Chapter 7 conversion was appealed Monday by the track's lawyers. In their latest appeal, The Woodlands owners asked what would happen if the track is sold under the rules of Chapter 7 but they later win their Chapter 11 appeal and are authorized to pursue their own financial reorganization plan. Under the Chapter 7 proceeding, Woodlands President Bruce Rimbo was ousted from his management post and Overland Park lawyer Eric C. Rajala was appointed by the court to supervise the track's day-to-day affairs until it is sold. The track's lawyers also seek to overturn that decision and return temporary control of the track to The Woodlands' parent firm, California-based Hollywood Park Inc., until all appeals are resolved. Kansas City, Kan., federal bankruptcy Judge John T. Flannagan in April rejected the track's intricate reorganization plan and cleared the way for a competing plan submitted by creditors. Last week's conversion to a Chapter 7 proceeding set aside those Chapter 11 options. If the Chapter 7 sale occurs, there is only one announced bidder to date. He is William M. Grace, a St. Joseph businessman who heads the track's largest creditor group. Grace has other gambling interests in Missouri, Kansas and Iowa. (Kansas City Star - 06/10/98) ********* 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 * * *