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/raid1/www/Hosts/bankrupt/TCR_Public/980629.MBX T R O U B L E D C O M P A N Y R E P O R T E R Monday, June 29, 1998, Vol. 2, No. 126 Headlines ADVANTICA RESTAURANT: Capital Stock of Quincy's Sold ALLIANCE ENTERTAINMENT: Details New Credit Facility ALLIANCE ENTERTAINMENT: Reorganization Value In $100M-$120M AMERICAN RICE: Murphy Steps Down as Chairman and Director APPAREL AMERICA: Agreement with R.R. Swimwear, Inc. AUSTRALIS MEDIA: Bankruptcy Will Have No Effect on Austar BONNEVILLE PACIFIC: Shareholder Proposes Plan CARIBBEAN CIGAR: Announces Year-End Financial Results CARSON'S: Outlook Revised To Negative By S&P CLOTHESTIME: Chain Attempts Comeback CONINDAR: Files for Chapter 11 ESSEX CORPORATION: Reports New Accountants FPA MEDICAL: Stock Falls After Credit Rating Cut FRUEHAUF TRAILER: Files Amended Plan of Reorganization GRAND UNION: Petition Lists Liabilities Of $1.24 Billion H.K.PORTER: Federal Judge Approves a Settlement HARVEY ELECTRONICS: 1998 Annual Meeting of Stockholders JINRO COORS: Coors' $100 Million Offer Termed Too Low LONG-TERM CREDIT BANK: Japanese Banks Plan Merger MARVEL ENTERTAINMENT: Prepares to Exit Chapter 11 NEXTWAVE: Korean Investors Suffer Due to Bankruptcy PHILIPPINE AIRLINES: Sacked Pilots to File Suit SCORE BOARD: No Satisfactory Bids at Auction STORMEDIA: Completes Restructuring of its Bank Debt T.L.C. FOR GIRLS: Jenna Lane's Offer Accepted T.EATON: Healthy Profit for the First Quarter UNIFORET: S&P Lowers Uniforet Inc.'s Ratings VENTURE: July 15 Set for Completion of Liquidation ********* ADVANTICA RESTAURANT: Capital Stock of Quincy's Sold ---------------------------------------------------- Advantica Restaurant Group Inc. filed a form 8K with the SEc. The company reports that on June 10, 1998, the completed the sale of all the capital stock of Quincy's Restaurants, Inc., the wholly-owned subsidiary which operates the company's Quincy's Family Steakhouse Division, to Buckley Acquisition Corporation for $84.7 million (subject to adjustment),that includes the assumption by BAC of $4.2 million of debt. ALLIANCE ENTERTAINMENT: Details New Credit Facility --------------------------------------------------- Alliance Entertainment Corp.'s amended disclosure statement includes a term sheet for the reorganized music distributor's new working capital credit facility. The proposed post-confirmation facility, from an as yet unnamed lender, would be a three-year revolver of up to $75 million, including a $10 million letter of credit sub-line. At the company's option, the facility would bear interest at the reference rate plus 0.5 percent or LIBOR plus 2.25 percent, subject to certain restrictions. Availability would equal 85 percent of eligible domestic accounts receivable, plus 60 percent of eligible finished goods, plus 55 percent of eligible inventory covered by certain letters of credit, plus a seasonal over-advance of up to $10 million. Obtaining the new credit facility is a condition to consummation of Alliance's joint plan of reorganization. (Courtesy of The Daily Bankruptcy Review Copyright c June 26, 1998 - ABI 26-June-1998) ALLIANCE ENTERTAINMENT: Reorganization Value In $100M-$120M ----------------------------------------------------------- Alliance's amended disclosure statement estimates that the company's reorganization value is between $100 million and $120 million, based on a discounted cash flow analysis. The amended filing also addresses some of the numerous objections of the unsecured creditors' committee, such as the effect of the disposition of the music distributor's Concord Records Inc. unit on creditors. In an effort to quell committee concerns, the disclosure statement reveals the methodology Alliance and financial advisor Blackstone Group L.P. used to determine the post-confirmation valuation as well as details regarding the new working capital facility. (Federal Filings, Inc. 25-June-98) AMERICAN RICE: Murphy Steps Down as Chairman and Director --------------------------------------------------------- American Rice, Inc. ("ARI") announced that for Fiscal Year 1998 ending March 31, 1998, it would be writing off certain unproductive assets on its balance sheet and taking reserves for restructuring expenses. ARI also announced that Mr. Gerald D. Murphy is no longer the Chairman and a Director of ARI. The Board of Directors has not replaced Mr. Gerald Murphy as Chairman yet but is consulting with shareholders, bondholders and bankers before doing so. As part of its restructuring plan announced on April 20, 1998, ARI will be expensing $10.3 million unamortized financing expenses associated with its $100 million 13% mortgage notes due 2002. ARI is currently in default on these notes as it has not paid the semi-annual interest payment due February. In addition, ARI will be taking non- cash reserves to cover the risks associated with the collectability of the debt owed ARI by ERLY Industries, the recent $ 7 million judgment (including interest) against the Company in the Kingwood Lakes South litigation and is considering additional reserves associated with its restructuring plan. ARI announced on April 20 a restructuring plan to divest certain divisions and focus selling rice to its core branded markets in the US,Saudi Arabia and Japan. Major cost reductions are being implemented in order to reverse the operating losses experienced during the last 12 months. APPAREL AMERICA: Agreement with R.R. Swimwear, Inc. ----------------------------------------------------- In a FORM 8-K filed with the SEC, Apparel America Inc. reports that on June 11, 1998 it entered into an agreement with R.R. Swimwear, Inc., a wholly owned subsidiary of Maxine of Hollywood, Inc., for the sale of certain inventory of the company, as well as certain machinery and equipment and the exclusive license to use its trademarks. The company commenced a proceeding under Chapter 11 of the Bankruptcy Code on June 12, 1998, to implement the sale, subject to higher or better offer, which may be made in a hearing before the Bankruptcy Court to consider such sale. AUSTRALIS MEDIA: Bankruptcy Will Have No Effect on Austar --------------------------------------------------------- EUROPEAN MEDIA BUSINESS & FINANCE reported on June 25, 1998 that Australis Media Ltd.'s Chapter 11 bankruptcy filing will have no affect on United International Holdings' Australian multi-channel TV subsidiary Austar Entertainment. Austar, Australia's second largest pay-TV operator, boasts about 210,000 subscribers. Until May 20, Austar had distributed programming channels provided by Australis. Since the company's financial difficulties, however, (which include the appointment of a receiver and manager in Australia), Austar activated a number of replacement agreements for programming and satellite distribution with Foxtel and Optus Vision. Austar and Optus implemented a 50-50 satellite distribution joint venture which is operational and providing satellite transmission services to Austar. BONNEVILLE PACIFIC: Shareholder Proposes Plan --------------------------------------------- Wexford Management LLC proposed a plan of reorganization for Bonneville that offers senior creditors $33.8 million less than the Chapter 11 Trustee's plan and allocates the value of the savings to junior creditors and equity holders like Wexford. Although the plans are identical in most respects, the trustee's plan would pay more than $45.3 million in postpetition interest to senior creditors who may not legally be entitled to any interest, according to Wexford's June 19 disclosure statement. The shareholder's proposal uses the same interest rates as the trustee's plan, but proposes paying postpetition interest from May 28, 1996, "the first date when the Debtor's Estate arguably became solvent as a result of substantial litigation recoveries by the Trustee." (Federal Filings Inc. 25-June-98) CARIBBEAN CIGAR: Announces Year-End Financial Results ----------------------------------------------------- Caribbean Cigar Company (NASDAQ/CIGR) announced the results for its fiscal year ended March 31, 1998. Sales for fiscal 1998 were $5.8 million compared to sales of $7.3 million for fiscal 1997. This decrease reflected significantly increased competition in the premium cigar market. The Company reported a net loss in fiscal 1998 of $7.7 million, or $1.46 per basic and diluted shares, as compared to a net loss of $115,000, or $.03 per basic and diluted shares in fiscal 1997. The Company also reported that it has received notice from FINOVA Capital Corporation ("FINOVA") that the Company has 60 days to either repay the outstanding balance under the FINOVA line of credit of $1.5 million or FINOVA will proceed to foreclose its security interest in the Company's accounts receivable, inventory, furniture, trademarks and trade names, machinery and equipment, and other assets. The Company has requested the opportunity to meet with FINOVA to either request an extension of this deadline or a continuation of the credit facility arrangement. However, no assurance can be given that FINOVA will agree to any such extension or continuation. In the event the Company is unable to obtain another line of credit, or other capital from the public or private sale of equity or debt, FINOVA may choose to foreclose its security interest in the Company's assets listed above and dispose of those assets in an orderly liquidation. Any such event would result in the termination of the Company's operations, thereby forcing the Company to consider any and all alternatives available to it, including potential bankruptcy or other measures to protect the interests of the creditors and shareholders. No assurance can be given that any such alternative courses of action will be available to the Company on terms acceptable to the Company or at all. CARSON'S: Outlook Revised To Negative By S&P -------------------------------------------- Standard & Poor's today revised its outlook on Carson Inc. to negative from stable. The company's single-'B'-plus corporate credit rating, single-'B'-minus subordinated debt rating, and double-'B'-minus bank loan rating are affirmed. About $100 million of debt was outstanding as of March 31, 1998. The outlook revision follows the company's continued soft earnings from its core businesses, coupled with its announcement that it intends to acquire the stock of Johnson Products Co. Inc. for $70 million in cash. The acquisition will be funded from proceeds of a partial equity sale of Carson South Africa and the eventual divestiture of Cutex and is not expected to result in an increase in leverage. Still, the acquisition is a substantial transaction for Carson, increasing integration risks over the near to mid term. While reported sales were up 77% for the quarter ended March 31, 1998, and sales of the company's domestic core business increased 12.5%, the domestic ethnic hair care industry continues to be soft reflecting in part the effects of drug chain consolidation. Core sales are expected to continue soft through second quarter of fiscal 1998. Margins have been adversely impacted due to product mix, production inefficiencies, and higher infrastructure costs incurred to support the company's growth. Operating income margins fell to 5.7% from 8.9% earned for the year earlier period. Given softer earnings, debt protection measures, which had been expected to be commensurate with the rating, will erode somewhat. Carson's strong brand names and solid market positions should be strengthened by the Johnson acquisition and should resume their historical profitability in the second half of fiscal 1998. Standard & Poor's expects no further erosion in the company's credit profile. However, if debt protection measures do not recover to a level commensurate with the rating in the near to mid term, ratings could be lowered, Standard & Poor's said. CLOTHESTIME: Chain Attempts Comeback ------------------------------------ Clothestime Stores Inc. has a new $4 million advertising campaign. Chairman, CEO and majority owner David Sejpal himself is practicing its message: After outbidding his former boss and company co-founder John Ortega II, Sejpal and three management partners were tapped by a bankruptcy court in September to take control of what was formerly The Clothestime Inc. chain. Sejpal cautions patience. "What I have found is there is no magic bullet to fix it all," he said. Having shuttered marginal or unprofitable stores, the once-public company is now being guided through a refocusing and expansion drive. Sejpal has pulled the plug on what he said was a misguided attempt to move into the high-end contemporary niche; instead, he's trying to stock the stores with fashions that youthful shoppers will find to be both trendy and affordable. In its first full post-bankruptcy year, he said Clothestime is expected to post a profit for the first time since 1994 on flat revenue of roughly $200 million. That would be a change from the past three years, when Clothestime reported steadily declining revenue and red ink totaling $91 million. Today's company is roughly half of what it was at its 1994 peak, when it earned $8.2 million on revenue of $349.5 million. Since then, it has closed 272 stores and laid off 3,500 employees. Currently, Clothestime operates about 260 outlets with 2,000 employees in 15 states. Under terms of the agreement filed with bankruptcy court, Sejpal and his partners will take 100% ownership of the firm if they can pay former creditors $5 million over the next four years, plus an amount contingent on a formula based on the company's operations. That's in addition to a $3.5 million up- front payment Sejpal and his partners made to creditors when the company emerged from bankruptcy. Still, the $8.5 million-plus they will have to pay creditors is a far cry from the roughly $50 million owed at the time of the bankruptcy filing. But if the company falters and the outstanding payments to creditors are not fulfilled - an unlikely scenario, according to Sejpal - creditors could end up with as much as 50% of the new Clothestime. As a result of the workout agreement, Clothestime today is otherwise debt- free, Sejpal said. That has allowed it to move aggressively on potential new store locations and other expenditures. (Orange County Business Journal - 06/15/98) CONINDAR: Files for Chapter 11 ------------------------------ Conindar, a leading jeans producer in San Luis, Argentina, has appliced for preventive bankruptcy due to difficulties to pay piled up debts of US$24mil with local banks. Conindar has a 50% share in the jeans market, and the license to produce and distribute leading brands such as Wrangler, Calvin Klein, Route 66, Gaia, and was hit by successive financial crisis over the last years. In 1994 it has a Pesos$83mil turnover, a figure that dropped to Pesos$62mil in 1997. (SABI-06/26/98) ESSEX CORPORATION: Reports New Accountants ------------------------------------------ In a Form 8K filed with the SEC, Essex Corporation reports that effective June 22, 1998,the company selected Stegman & Company as its principal accountants to audit the Company's financial statements for the 1997 fiscal year. Stegman & Company is replacing Arthur Andersen LLP as the Company's principal accountants. Arthur Andersen LLP had been the Company's auditors since 1992 but was replaced for business considerations entirely unrelated to accounting standards or practices. FPA MEDICAL: Stock Falls After Credit Rating Cut ------------------------------------------------ FPA Medical Management Inc., a money-losing operator of physician practices, saw shares fall 27 percent after its credit rating was cut because it failed to make a $2.6 million interest payment. FPA shares fell 44 cents, to $1.18, on trading of 9.7 million. Earlier, the stock fell to a low of 75 cents, down from a high for the year of $25.13 on March 5. Standard & Poor's cut its rating on the San Diego company's debt to "default" after the stock market closed Wednesday, blaming the company's financial troubles on its rapid acquisition of unprofitable physician groups. Moody's cut its rating today. The declines in the stock have been aggravated by the unwillingness of FPA management to discuss the company's position as it seeks financing that would help it make the bond-interest payment before the securities go into default next month, said shareholder Joseph Newell, general partner of Tidewater Capital. "What frustrates most people is that they've been so mum on what's going on," said Newell. "I'm holding on to what I have because I believe they might be able to turn it around. I'm not adding to the position because trying to catch a falling knife can be very dangerous." Officials at the company, which is affiliated with some 7,900 doctors in 29 states, weren't available to comment. Like larger rivals Phycor Inc. and MedPartners Inc., FPA Medical has reported losses because it underestimated medical claims it needed to pay as it boosted market share through a string of acquisitions.(Orange County Register - 06/19/98) FRUEHAUF TRAILER: Files Amended Plan of Reorganization ------------------------------------------------------ Chriss W. Street, President and Chief Executive Officer of Fruehauf Trailer Corporation, announced the filing of Fruehauf's Chapter 11 Amended Plan of Reorganization and Disclosure Statement. A hearing for the Delaware Bankruptcy Court to approve the Amended Disclosure Statement is scheduled for July 28, 1998 at 2 p.m. in Delaware. Fruehauf's Plan and Disclosure Statement may be viewed at www.camhy.com. The Amended Plan calls for securities held by Fruehauf, which are presently valued at more than $25 million, to be distributed to Fruehauf's secured bondholders. Fruehauf's remaining assets, including its trailer manufacturing operation in Mexico and portfolio of properties, will be transferred to a liquidating trust, to be named the "End of the Road Trust", for the benefit of Fruehauf's creditors. Mr. Street will serve as Trustee for the liquidating trust. The Amended Plan reflects an agreement reached with all creditors' committees. Chriss Street stated that "Fruehauf's new management team is pleased that it reached an agreement which will allow both secured bondholders and unsecured creditors to participate in the End of the Road Trust." The Amended Plan calls for End of the Road Trust Certificates to be distributed to Fruehauf's creditors. The Certificates will be tradeable. One of the End of the Road Trust's most significant assets is ownership of Fruehauf de Mexico, a trailer manufacturing plant located in Mexico City. Chriss Street and his team of reorganization and manufacturing specialists assumed control of Fruehauf in late April of 1997. Since then, Fruehauf de Mexico has more than doubled its production of trailers, has generated operating profits (EBITDA) on a monthly basis since June 1997, and increased its market share to 35% in Mexico. GRAND UNION: Petition Lists Liabilities Of $1.24 Billion -------------------------------------------------------- Grand Union Co.'s Chapter 11 petition, filed yesterday in Newark, N.J., lists total assets and liabilities of about $964.4 million and $1.24 billion, respectively. The 222- store supermarket chain also filed its prepackaged reorganization plan after holders of more than 72% of its senior notes and all preferred stockholders voted in favor of the plan. The company's largest unsecured creditors include indenture trustee IBJ Schroder Bank & Trust Co. ($595 million), C&S of Brattleboro, Vt. ($11 million), and Freihofer Chas. Baking Co. of Goshen, N.Y. ($2.8 million). (Federal Filings Inc. 25-June-98) H.K.PORTER: Federal Judge Approves a Settlement ----------------------------------------------- In a class-action case that clears the way for at least 120,000 people to obtain money for asbestos-related illnesses, H.K. Porter Co. agreed to establish a $104 million trust fund to pay $2 billion in claims arising from injured workers, meaning people sickened by the company's products will receive 5 or 6 cents for every dollar of injuries they claim. H.K. Porter was a steam locomotive maker that in 1959 bought a manufacturer of asbestos-laden safety clothing. Asbestos has been linked to cancers and lung disease. H.K. Porter also owned steel-mill supply businesses. Attorney Douglas Campbell sued H.K. Porter in 1992, claiming that the company's owner, the late Thomas Mellon Evans, siphoned off $150 million in assets to avoid paying asbestos-related claims. The settlement approved by U.S. District Judge Gary Lancaster and U.S. Bankruptcy Judge Warren Bentz also settles the claim against Evans' estate. New York lawyer Jeffrey Sabin, who represents Evans' estate, agreed to provide $31 million to the trust fund. The balance of the fund will come from $47 million still held by H.K. Porter and $25 million from the Pennsylvania Insurance Guaranty Association. Campbell said the number of people claiming injuries from H.K. Porter products could rise to 558,000 because health problems related to asbestos can take 20 or more years to develop. HARVEY ELECTRONICS: 1998 Annual Meeting of Stockholders ------------------------------------------------------- The Annual Meeting of Stockholders of Harvey Electronics, Inc. will be held on July 23, 1998 at the Marriott At Glen Pointe, 100 Frank W. Burr Boulevard, Teaneck, NJ 07666 for the following purposes: 1. To elect six directors; 2. To ratify the appointment of Ernst & Young LLP as the Company's independent auditors for the fiscal year ending October 31, 1998; 3. To approve the Harvey Electronics, Inc. Stock Option Plan. JINRO COORS: Coors' $100 Million Offer Termed Too Low ----------------------------------------------------- Banks that are creditors of Jinro-Coors Brewing Co. in South Korea said Coors Brewing Co.'s offer to invest $100 million in the financially troubled Korean brewing venture is too low. News reports from Seoul said Coors coupled its offer of $100 million with a demand that creditors write off more than half of Jinro-Coors' $470 million in debt and turn the rest into equity in the venture. Coors Brewing was once a partner in Jinro-Coors, whose parent company is now bankrupt. A Coors spokeswoman said the Colorado brewer has "an offer on the table that we think is reflective of the business going forward." (The Denver Post) LONG-TERM CREDIT BANK: Japanese Banks Plan Merger ------------------------------------------------- Sumitomo Trust is planning a merger with Japan's troubled Long- Term Credit Bank, which has been foundering under huge problem loans, Japanese media reported today. The Long-Term Credit Bank, the 22nd largest bank in the world according to Forbes magazine, had become the focus of investors' concern at a time when Japan's banks are struggling to get out from under a mountain of bad debt. Shares in the LTCB plummeted Thursday as executives spelled out a drastic restructuring plan and hinted at a possible merger. Trading in shares for both Sumitomo Trust and LTCB were suspended on the Tokyo Stock Exchange after the reports emerged. MARVEL ENTERTAINMENT: Prepares to Exit Chapter 11 ------------------------------------------------- A hearing has been scheduled for June 30 to confirm the reorganization plan for Marvel Entertainment Group Inc., which filed for chapter 11 protection more than two-and-a-half years ago, according to a newswire report. Delaware District Court Judge Roderick McKelvie wrote a 20- page decision declaring a settlement proposed by the court-appointed trustee and senior lenders was fair. Under the settlement agreement, the Trustee has agreed to withdraw the appeal of the District Court decision upon consummation of the plan of reorganization. The Trustee, the Senior Secured Lenders of Marvel, Toy Biz and others will also exchange releases, including releases from the lawsuit commenced by Marvel. Ronald O. Perelman and certain of his affiliates and associates are defendants in Marvel's lawsuit but are not being released. The settlement agreement may be terminated by Toy Biz or the Senior Secured Lenders that have agreed to support the plan of reorganization if confirmation of the plan does not occur by June 30, 1998 or if consummation of the plan does not occur by August 15, 1998. It may also be terminated by the Trustee if confirmation of the plan of reorganization does not occur by August 15, 1998 or if consummation of the plan does not occur by September 30, 1998. Judge McKelvie rejected objections by investor Carl Icahn and unsecured creditors, who had argued that the settlement would result in losses. Under the plan, Marvel would merge with Toy Biz Inc., and secured lenders would receive a portion of equity in the new company and be paid 70 cents on the dollar for their $617 million of Marvel-related claims. In addition, equity holders would receive 12 million warrants, exercisable in several ways. (ABI 26-June -1998) NEXTWAVE: Korean Investors Suffer Due to Bankruptcy --------------------------------------------------- Many Korean companies which invested large funds in Nextwave Telecom are likely to suffer serious financial damages, as the U.S. based PCS operator requested the court to grant the Chapter 11 bankruptcy protection under the Federal Bankruptcy Code. Nextwave Telecom announced on June 11 that its 4 affiliated companies had filed for the bankruptcy protection as the companies were unable to pay the license fee for PCS business to FCC. Established in 1995 with a capital of $437 million, Nextwave Telecom has business rights in over 63 areas with a population of 110 million. Nextwave Telecom requested the court to order FCC to reduce the license fee of $4.7 billion by 80 percent and to re- arrange the terms of payment. Nextwave will have to follow the terms set by the FCC, including the return of the 15 MHz frequency, if the court does not grant the request. In the worst case scenario, all of Nextwave's business licenses may be canceled, causing the domestic companies which invested in Nextwave Telecom to lose all of their invested funds. Domestic companies which have invested a total of over $100 million in the US firm include LG Information and Communications with $30 million, Pohang Iron and Steel, Korea Electric Power and Il Jinn Co. each with $20 million, Seoul Mobile Telecom and Hung Chang Co. each with $5 million and Yuyang Information and Communications with $3 million. In particular, LG Information and Communications is set to receive a heavier blow as the Korean company had planned to supply $14 million worth of equipment including a PCS switching system and 7 base stations. A Ministry of Information and Communication official commented that possibilities are high for Nextwave Telecom to win the suit, since there is a precedent in which the bankruptcy protection was granted to a company under similar situations. (Korea Economic Weekly; 06/26/98) PHILIPPINE AIRLINES: Sacked Pilots to File Suit ----------------------------------------------- The union representing recently-sacked pilots of Philippine Airlines (PAL) said here Saturday it plans to file a suit against the airline, accusing it of carrying out an illegal lockout. "The leadership ... has decided to declare PAL management (guilty) of fomenting an illegal lockout situation. (We) intend to fight this out legally all the way to the Supreme Court," the group said in a statement. This came after more than 500 sacked union pilots raised the white flag and said they were returning to work on Friday only to be told by the management that it was too late and that they had already been considered fired for defying a June 9 return-to-work order. "We'll meet them in court when they do file that," said PAL senior vice-president Avelino Zapanta, charging that the union's strike was illegal in the first place. From only about 44 pilots during the strike, Zapanta said they had built up their pilots' corps to more than 105 pilots. PAL is also evaluating 20 pilots from Indonesia and Malaysia, he added. Zapanta said that with the new pilots, they would be announcing soon an increase in the number of PAL's international destinations, adding San Francisco and Fukuoka, Japan to its four previous destinations, Los Angeles, Singapore, Hong Kong and Narita, Japan. PAL had earlier said it would need 180 pilots to carry out their operations. The pilots' union had gone on strike on June 5 in protest at a recent cost-cutting early retirement scheme. The strike, which forced the loss-making airline to reduce its operations by 80 percent, further pushed PAL to the brink of bankruptcy. Since then, PAL has fired all the strikers, terminated 5,000 ground and cabin crew, and slashed its fleet to address a crushing 85.1 billion peso (2.1 billion dollar) debt while seeking protection from creditors. PAL management had said that the sacked pilots may re-apply but will lose their old seniority. The airline had been losing heavily in the past few years, incurring a record net loss of 205 million dollars in its last fiscal year. Under a rehabilitation plan, PAL would keep only 14 aircraft from its 54-strong fleet, sell 13 and cancel leasing or subleasing 27 others.(Agence France Presse - 06/27/98) SCORE BOARD: No Satisfactory Bids at Auction -------------------------------------------- The Score Board Inc., a Cherry Hill, N.J.-based marketer and licensor of sports and entertainment-related memorabilia and products, reported that its June 23 auction of assets failed to produce a bid satisfactory to the company, Congress Financial Corp. (its secured lenders) and its Unsecured Creditors' Committee, The Philadelphia Inquirer reported. However, the company is in negotiations for a sale of substantially all of its assets. The company filed chapter 11 in March and last month determined that it was unable to develop a viable business plan. (ABI 26-June- 98) STORMEDIA: Completes Restructuring of its Bank Debt --------------------------------------------------- In a press release dated June 1, 1998, Stormedia announced that it has completed the restructuring of its bank debt with a consortium of banks led by Canadian Imperial Bank of Commerce as well as a series of financing transactions. As a result of the restructuring, StorMedia is no longer in default under its CIBC bank debt. As part of the restructuring, StorMedia repaid $10 million of principal owing to the banks and issued warrants to purchase shares of Class A Common Stock.The balance of the CIBC bank debt continues to be outstanding and is fully secured. T.L.C. FOR GIRLS: Jenna Lane's Offer Accepted ------------------------------------------ Jenna Lane, Inc. announced that a wholly-owned subsidiary had purchased substantially all the assets of T.L.C. for Girls, Inc., a New York based manufacturer of children's apparel currently operating in Chapter 11 under the Bankruptcy Code, for an aggregate of $350,000. The transaction was consummated on June 19, 1998. The company previously had made an offer which was subject to an auction which was held June 18, 1998 in the Bankruptcy Court. The company was the only bidder for the T.L.C. assets. The company also is completing its contract manufacturer relationship with T.L.C., which permitted T.L.C. to manufacture its fall order file, approximating $4 million. The company also announced that its subsidiary, now known as T.L.C. for Kidz, Inc., has entered into an employment agreement with Walter Ginsberg, former President of T.L.C. Ginsberg will serve as President of T.L.C. for Kidz, Inc. and shall direct the sales and merchandising efforts of the Childrenswear Sales Group of Jenna Lane. T.EATON: Healthy Profit for the First Quarter --------------------------------------------- Canadian retailer T. Eaton Co. Ltd., which rose late last year from the brink of bankruptcy, rang up a healthy profit for the first quarter of 1998 Thursday. The venerable retailer, which was listed on the Toronto Stock Exchange for the first time in May, said its first- quarter earnings, for the period ended May 23, were C$2.4 million or C$0.30 per share on sales of C$421.7 million compared with a loss of C$71.5 million or C$8.87 per share on sales of C$430.3 million in the year-before quarter. Included in the profits was a one-time gain of C$85 million on the sale of its credit operations to Norwest Financial Capital Canada Inc. Though Eaton's officials refused to comment on what the company's earnings will be in future quarters without the one-time gain from the credit group, its April 17 preliminary prospectus forecasts net earnings of C$80 million and revenues of C$1.62 billion for a 44-week period between March 29, 1998 and January 30, 1999. Eaton's president George Kosich said the sale of the credit division and the initial public offering was instrumental in the turnaround of the beleaguered retail chain. The balance sheet did not reflect the C$165 million proceeds from the initial public offering. "We are encouraged by the progress we are making," he said in a teleconference. "We are implementing our strategic plan, and we know the plan is working where it has been implemented." Analysts hailed today's earnings release as a positive sign for the once-troubled company. Although the sales slipped, one analyst noted that the figures were based on only 64 stores across the country as it jettisoned a number its poorer performing stores. Today's first-quarter earnings statement marks another step in the comeback attempt of the 130-year-old Canadian retailer. Last month, Eaton's launched a C$175-million initial public offering after only emerging from bankruptcy protection in the fall.($1=$1.47 Canadian) (Reuters: International- 06/25/98). UNIFORET: S&P Lowers Uniforet Inc.'s Ratings -------------------------------------------- Standard & Poor's today lowered its corporate credit and senior secured debt ratings on Uniforet Inc. to single-'B' from single-'B'-plus and placed the ratings on CreditWatch with negative implications. About US$125 million of debt is affected. The downgrade reflects Uniforet's continuing weak credit protection measures resulting from a combination of operating problems and eroding lumber markets. Montreal- based Uniforet is a small forest products company engaged in the production of lumber, pulp, and paper. While some progress has been made toward a restructuring, Uniforet has not achieved the expected economies of scale necessary to permanently lower production costs at its lumber and pulp complex in Port-Cartier, Quebec. Modest improvements in paper prices are expected to be more than offset by a significant drop in lumber prices, which could in turn neutralize some of the anticipated operating progress. The CreditWatch placement reflects concerns about Uniforet's financial flexibility. Potential for near-term improvement exists as the company raises production levels. However, failure to achieve the expected economies of scale could strain the company's liquidity and result in a further downgrade. Standard & Poor's will continue to closely monitor the situation. VENTURE: July 15 Set for Completion of Liquidation -------------------------------------------------- Venture Stores Inc. is expected to complete its going-out- of-business sale by mid-July. Tina Schneider, a Venture spokeswoman, said July 15 was the target date for all Venture stores - including the seven in the Kansas City area - to complete the liquidation. Some stores could close before that date if all their merchandise is sold, she said. Kmart Corp., which is taking over nearly 50 Venture stores, has been eager to take possession so it can reopen them as Kmart stores in the fall. Five of the seven area Venture stores are being converted to Kmart stores. Once the Venture stores are closed, they will be relinquished to Kimco Realty Inc., which will re-lease most of the stores to Kmart. The Venture stores not being taken by Kmart are expected to be leased to other retailers, as yet unnamed. Meanwhile, Venture headquarters in the St. Louis area will be down to a skeleton crew next week. Tuesday will be the last day of work at Venture for most of the headquarters staff. Venture filed for bankruptcy reorganization this year. But the plan to rescue the retailer faltered, and the bankruptcy was converted to a liquidation.(Kansas City Star - 06/27/98) ********* The Meetings, Conferences and Seminars column appears in the TCR each Tuesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Bond pricing, appearing each Friday, is supplied by DLS Capital Partners, Dallas, Texas. S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter, co- published by Bankruptcy Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc., Washington, DC. Debra Brennan and Lexy Mueller, Editors. Copyright 1998. All rights reserved. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *