/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/980702.MBXT R O U B L E D C O M P A N Y R E P O R T E R Thursday, July 2, 1998, Vol. 2, No. 129 Headlines AGROBANKA: GE Sets Foot in Czech Banking AMERICAN RICE: Reviewing Disclosure and Accounting Policies AUTOLEND GROUP: Needs Court OK of Auditors and Counsel BUILDERS TRANSPORT: Notification of Late Filing CAI WIRELESS: Offers Pre-Packaged Reorganization Plan CHATCOM INC: Changed Principal Accountants CORAM HEALTHCARE: Restructuring of Rollover Notes DATA 1 INC: Plan of Reorganization Approved DECADE NEW YORK: Case Summary & 20 Largest Creditors EAGLE PICHER: Files Quarterly Report EMERGENT GROUP: Announces $200 Million Bank Line Facility EQUITEX: First TeleServices Merges With Equitex FPA MEDICAL: Hires New CFO FRUEHAUF TRAILER: Bankruptcy Information by Email GALAXY FOODS: First Annual Profit Since 1991 GEOTEK: CEO Steps Down HEARTPORT INC: S&P Affirms Ratings HONDO OIL: Considering Chapter 11 Filing INDUSTRIAL IMAGING CORP: New Auditors Engaged LEVITZ FURNITURE: Seeks Extension for Filing Form 10K MTL, CHEMICAL LEAMAN: Ratings Put on S&PWatch Negative MARINELAND OCEANARIUM: Bankruptcy Judge to Choose Buyer MOBILEMEDIA: Arch Closes Financing Deal NEW YORK FASHION: Files For Chapter 11 Protection NIKE: Reports Revenues and Earnings For Fourth Quarter PIONEER OIL: To Implement Chapter 11 Plan RBX CORPORATION: Reaches Agreement With Banks RELIANCE ACCEPTANCE: Court OK's Wallace Sanders STROUDS: Reports Its First Quarter Results SUNBEAM: Maybe the 1997 Statements Were Off YOUNG BROADCASTING: S&P Assigns CreditWatch ZENITH: Secures New Financing ********* AGROBANKA: GE Sets Foot in Czech Banking ---------------------------------------- It was reported that General Electric (GE)(US) bought the healthy part of the bankrupt bank Agrobanka (AGB) (Czech Republic) on 22 June 1998. GE took over deposits of 30 bil Kc from AGB and all the bank's branch network. GE will also take over the majority of AGB's 3,000 employees. The firm will go on using the name Agrobanka. The European Bank for Reconstruction and Development (EBRD) did not enter the project in the end. EBRD together with GE was to take over the healthy part of AGB originally. The old part of AGB, which controls assets worth about 28 bil Kc and keeps its bank license at the moment, will go into bankruptcy shortly. The central bank has invested about 20 bil Kc in the part of AGB. (Access Czech Republic Business - 6/23/98) AMERICAN RICE: Reviewing Disclosure and Accounting Policies ----------------------------------------------------------- American Rice Inc. filed a Form 12b-25 with the SEC reporting a late filing of its Form 10K for the period ending March 31, 1998. The Company is in the process of reviewing a number of disclosure and accounting policy issues with its accountants and legal counsel. Due to the timing and difficulty of the review and reporting process the additional expense would be unreasonable. AUTOLEND GROUP: Needs Court OK of Auditors and Counsel ------------------------------------------------------ AutoLend Group, Inc. notified the SEC of a late filing of its form 10K caused by the bankruptcy proceedings in obtaining court approval of new auditors and SEC Counsel. The company also reports anticipated changes expected in the results of operations of the current fiscal year as compared to those presented in the last fiscal year. The Company is currently reorganizing under Chapter 11. In addition, the Company ceased purchasing installment receivables in December 1995 and life insurance policies in September 1994 and does not at this time intend to recommence such activities. Accordingly, decreases of approximately $1 million and $425 thousand in the revenues from installment receivables and life insurance policies, respectively will be shown on the statement of operations for the current year. An extraordinary gain on early extinguishment of debt of approximately $3 million was recognized in the current year relating to the early retirement of debentures. In addition, a non-cash conversion cost of $6 million was recognized due to the conversion of debentures during the year. Furthermore, net equity has improved by approximately $8.4 million from the prior year. BUILDERS TRANSPORT: Notification of Late Filing ----------------------------------------------- Builders Transport Inc. notified the SEC of a late filing of its form 11K. The company stated that the Plan Administrator for the Builders Transport, Inc. Employees Retirement Savings & Profit Sharing Plan is in the process, in conjunction with the Company, of compiling additional information needed to complete the financial statements required by the independent auditors. The independent auditors require the additional information in order to render their opinion. CAI WIRELESS: Offers Pre-Packaged Reorganization Plan ----------------------------------------------------- CAI Wireless Systems, Inc. announced that it has commenced a solicitation of votes with respect to a pre-packaged reorganization plan pursuant to which CAI will restructure its financial obligations. The solicitation is being sent to the holders of CAI's 12 1/4% Senior Notes due 2002 (the "Senior Notes") and certain other impaired creditors. Although the Reorganization Plan was developed in the course of discussions and negotiations with the Company's senior lender and an Unofficial Committee representing approximately 73% of the outstanding Senior Notes, the Plan has not yet been approved or endorsed by any creditor or the Unofficial Committee. Under the Company's proposed Reorganization Plan, holders of the Senior Notes will receive approximately $16,400,000 in cash, $100,000,000 of new Senior Notes due 2004 and 91% of the equity of the reorganized CAI. The holder of CAI's $30,000,000 12% Subordinated Note and the holders of CAI's Subordinated Promissory Notes due September 29, 2000 issued by CAI in connection with the acquisition of wireless cable assets in the Baltimore and Washington markets will receive their pro rata share of the remaining 9% of the new common stock of the reorganized CAI. The Reorganization Plan does not provide any recovery for CAI's current common shareholders or other equity-based interest holders. CAI's trade creditors, including all ITFS or MMDS licenseholders that lease excess capacity to CAI's various subsidiaries, will remain unimpaired and be paid in the ordinary course of CAI's operations. The Company has arranged for debtor-in-possession (DIP) financing in the principal amount of $60,000,000, $48,000,000 of which will be used to repay CAI's pre- petition senior secured loan. The balance, approximately $12,000,000, will be provided to the Company to allow CAI to operate through the Chapter 11 case. In connection with the solicitation, the Company has received an extension of the maturity date of the 13% Senior Secured Notes to July 30, 1998. CAI, in conjunction with BT Alex. Brown Incorporated, its financial advisor, is also seeking commitments for an exit facility intended to provide the reorganized CAI with working capital for at least one year following the consummation of the bankruptcy. The Voting Deadline for the solicitation is July 27, 1998. If CAI receives the requisite number of acceptances from the impaired creditors, CAI intends to commence its Chapter 11 case shortly thereafter. For the fourth quarter ended March 31, 1998, sales were $6,644,000 versus $8,589,000 for the comparable year-ago quarter. The decrease was primarily due to the Company's strategy of not pursuing analog-based video subscriber growth. Net loss for the most recent fiscal quarter was $(131,537,000) or $(3.31) per common share, versus $(24,805,000) or $(0.70) per common share, for the comparable year-ago quarter. For the year ended March 31, 1998, sales were $28,622,000 versus $36,327,000 for the year ended March 31, 1997, primarily due to the Company's strategy of not pursuing analog-based video subscribers while it evaluates its business opportunities. Net loss for the most recent fiscal year was $(230,073,000) or $(6.02) per common share, versus $(82,298,000) or $(2.38) per common share, for the fiscal year ended March 31, 1997. CHATCOM INC: Changed Principal Accountants ------------------------------------------ ChatCom, Inc. reported to the SEC that its Form 10K would be filed late. The company previously reported that the Company changed its principal independent accountants in February 1998. As a result of the Company's liquidity problems and the change in the Company's accountants, the Company experienced a delay in the scheduling and completion of the audit of the Company's financial statements for the fiscal year ended March 31, 1998. For the foregoing reasons, the Company requires additional time to prepare its Annual Report on Form 10-KSB for the fiscal year ended March 31, 1998. It is anticipated that a significant change in results of operations from the fiscal year ended March 31, 1997 will be reflected by the earnings statement to be included in the Annual Report on Form 10-KSB for the fiscal year ended March 31, 1998 due to a reduction in net sales during fiscal 1998 as compared to fiscal 1997 caused, in part, by the return of certain equipment previously purchased from the Company by a foreign distributor during fiscal 1998, increased research and development expenses during fiscal 1998 and the Company's liquidity problems during fiscal 1998 which caused the Company to incur additional nonrecurring expenses. The Company is expected to record a net loss of approximately $7,773,000 for fiscal 1998 on revenues of approximately $7,271,000 as compared to a net loss of $4,601,000 on revenues of $9,103,000 for fiscal 1997. CORAM HEALTHCARE: Restructuring of Rollover Notes ------------------------------------------------- Coram Healthcare Corporation announced that the Company completed the restructuring of its Subordinated Rollover Notes on June 30, 1998. The restructuring required, among other conditions, the approval of Coram's shareholders. That approval was received at the Company's Annual Stockholder Meeting on June 24, 1998. As previously announced, the debt restructuring involves an exchange of the Rollover Notes for two debt instruments: $150.0 million of Series A Subordinated Notes with an initial annual interest rate of 9.875%; and, approximately $87.9 million of Series B Convertible Subordinated Notes at an interest rate of 8%. In addition, all warrants issued in connection with the Rollover Notes have been returned and cancelled. The holders of the Series A and Series B Notes have also agreed to extend to Coram $60 million of senior secured debt subject to the completion of definitive agreements. "The debt restructuring is one in a series of steps we have taken to return Coram to profitability," said Donald J. Amaral, Coram's Chairman and Chief Executive Officer. "The new debt instruments reduce our interest expense by approximately $17 million annually and strengthen our balance sheet." Separately, Coram announced that Mr. Amaral had signed an amendment to his employment agreement, which extends his employment with the Company until May 2000. Coram Healthcare is a leading provider of high quality, complex patient care provided outside the hospital. The Company's mission is to work with patients, physicians, payors and other health care providers to develop better models of care for those with serious or chronic medical conditions. DATA 1 INC: Plan of Reorganization Approved ------------------------------------------- On June 19, 1998, the U.S. Bankruptcy Court, Middle District of Florida, Tampa Division entered the order confirming Data 1, Inc.'s (Nasdaq E.B.B. symbol:DMEM) Plan of Reorganization which provides for fair and equitable payment to all creditors and allows Data 1, Inc. to immediately move forward with its new business plan. "The company has worked long and hard in solving its past problems and is now focused on reestablishing its business and creating an exciting and profitable future," said Howard Davidsmeyer, Chairman of the Board. DECADE NEW YORK: Case Summary & 20 Largest Creditors ---------------------------------------------------- Debtor: Decade New York LLC 1115,1117-1119 First Avenue New York, NY 10021 Type of business: Operator of Restaurant, Dance-Supper Club Court: Southern District of New York Case No.: 98B44621 Filed: 06/26/98 Chapter: 11 Debtor's Counsel: Alex Spizz Todtman, Nachamie, Hendler & Spizz, P.C. 425 Park Avenue New York, NY 10021 (212) 754-9400 Total Assets: $2,169,901 Total Liabilities and Members' Equity: $2,169,901 20 Largest Unsecured Creditors: Name Nature Amount ---- ------ ------ NY State Dept of Tax and Finance Taxes 405,839 IRS Taxes 293,525 Adeline Moskowitz Security Deposit 220,946 Winslow Bank & Trust Loan 184,207 Dining a La Card Loan 62,479 Larry Mizel Loan 80,464 NYC Dept of Finance Taxes 34,726 NYS Dept of Labor Taxes 30,148 TCG Telephone 31,236 Charmer Industries Trade 24,371 Oxford Health Plan EE Benefits 21,895 Martin Scott Wines Trade 15,606 Heller Financial Group Deposit 14,761 Marcel Bequillard Furniture/Services 14,559 Mel Evans & Assoc Placement Fee 13,000 Con Edison 0002-2 Electric 10,943 Tricana Importers Trade 9,860 Xerox Lease Copier 9,836 EAGLE PICHER: Files Quarterly Report ------------------------------------ Eagle Picher Holdings Inc. reports that its net sales were $219.9 million for the second quarter ended May 31, 1998, a decrease of $22.3 million or 9.2% from the comparable period of 1997. Included in the results of the second quarter of 1997 are $32.6 million of sales of the Divested Divisions, which, if excluded, would result in an increase in the Company's quarterly net sales of approximately 4.9%. As a result of the Acquisition of the Company by Granaria Industries B.V. from the Trust as of February 24, 1998, which was accounted for as a purchase, the Company's results of operations and financial position for periods after February 24, 1998 are not comparable to prior periods. Due to the differences in the asset bases, it is preferable to compare EBITDA rather than operating income. EBITDA increased from $28.0 million in the three months ended May 31, 1997 to $30.1 million for the same period in 1998 or 7.5%. The Company generated cash from operations in the second quarter of 1998 despite the net loss of $9.3 million. EBITDA of $30.1 was sufficient to cover interest payments of $7.1 million and capital expenditures of $9.1 million. EMERGENT GROUP: Announces $200 Million Bank Line Facility --------------------------------------------------------- Emergent Group, Inc. (Nasdaq/NM: EMER) announced that it has obtained a new, three-year, $200 million bank line facility, agented by The CIT Group/Business Credit, Inc., to support its mortgage loan origination growth. This facility replaces the prior one-year facility which matured on June 30 and contains no minimum net worth or leverage ratio requirements. "The Company is encouraged with monthly progress in reducing costs and increasing cash flow," according to Jack Sterling, the Company's Chief Executive Officer. "The decision in April to sell whole loans for cash instead of securitizing such loans contributed to cash flow improvements in May and June. The Company is developing several initiatives in its process flow to increase the percentage of leads converted to closed loans, and expects this to contribute to higher loan origination activity for the third quarter of 1998." The Company is continuing to seek additional efficiencies and expense reductions to lower its operating losses and return to profitability. "Although the benefit of our recently announced reductions to overhead totaling $3 million per quarter will not be evident until July, general and administrative expenses are down in both May and June, and these improvements are expected to continue," stated Kevin J. Mast, the Company's Chief Financial Officer. The Company anticipates announcing its earnings for the second quarter at the end of July or early August. Emergent Group, Inc. is a diversified financial services company headquartered in Greenville, South Carolina, which specializes in non-prime first- and second-lien residential mortgage loans; loans to small businesses partially guaranteed by the U.S. Small Business Administration; asset-based loans to small businesses secured by inventory and accounts receivable; mezzanine-level financing to small businesses with equity kickers; and management of a venture capital fund. Emergent currently has approximately 1,100 employees and operates in 42 states. EQUITEX: First TeleServices Merges With Equitex ----------------------------------------------- First TeleServices Corp., an Orlando financial services company, announced plans to merge with Colorado-based Equitex Inc. Equitex will issue 625,000 shares of stock in exchange for all of the shares of First TeleServices. The merger is subject to a negotiation of a definitive agreement and board approval. FPA MEDICAL: Hires New CFO --------------------------- FPA Medical Management Inc., the financially troubled manager of physician practices, said Monday that it has hired a new chief financial officer and entered advanced negotiations to obtain additional financing. The San Diego-based company said it has named Thomas J. Allison as new chief financial officer, replacing Douglas Kerner. FPA Medical said Kerner left to pursue other interests. FPA Medical said it currently has no intentions to seek Chapter 11 bankruptcy protection, although it might consider a prepackaged Chapter 11 case later this year. Recently, FPA Medical said it was behind on payments to doctor groups in California, Nevada and Arizona. It also said it had missed a $2.6 million interest payment owed to debt holders. In the first quarter ended March 31, FPA lost $9.1 million, or 20 cents a share, on revenue of $392.2 million. Investors appeared pleased with the announcement of the new CFO. In trading Monday, shares of FPA Medical were up 50 cents, or 53 percent, to $1.43 3/4 on the Nasdaq stock market. (Orange County Register - 06/23/98) FRUEHAUF TRAILER: Bankruptcy Information by Email ------------------------------------------------- The New York City law firm of Camhy Karlinsky & Stein LLP is using its website ( http://www.camhy.com) in the Fruehauf Trailer Corporation bankruptcy case to make Fruehauf's proposed plan of reorganization available to the many thousands of Fruehauf's creditors. Notices of Fruehauf's October 1996 bankruptcy were mailed to over 110,000 potential creditors. Eventually, over $3.8 billion in claims were filed against Fruehauf. Under Fruehauf's plan, a relatively small number of secured creditors and tax authorities will receive almost all of Fruehauf's assets, leaving assets presently valued at just over $1 million to be distributed among the many thousands of Fruehauf's unsecured creditors. "The large number of claimants means that printing and mailing Fruehauf's plan documents would be very expensive and would consume a significant part of Fruehauf's assets to be distributed to unsecured creditors," says Attorney David Neier. Delaware Bankruptcy Judge Peter J. Walsh has already allowed Fruehauf to eliminate sending notice of its proposed plan by mail to the thousands of Fruehauf's stockholders and instead to publish notices in various newspapers. Fruehauf's stock was listed on the New York Stock Exchange and was widely held. Under Fruehauf's plan, Fruehauf's stock will be canceled and stockholders will receive nothing. So as to allow all of Fruehauf's potential creditors to gain some knowledge of Fruehauf's plan, Camhy Karlinsky & Stein LLP has agreed to what is believed to be a first; the distribution of bankruptcy plan documents from a law firm website, www.camhy.com. Just recently, one page notices that were mailed to over 8,000 creditors who filed claims with the Delaware bankruptcy court and whose claims have not yet been ruled upon by the court included information to access the full set of Fruehauf's plan documents from the World Wide Web. People who cannot access the Web can order the full set of Fruehauf's plan documents from Ikon/Knight Rider in Delaware for a fee of $12 plus postage. GALAXY FOODS: First Annual Profit Since 1991 -------------------------------------------- Galaxy Foods Co. posted its first annual profit since relocating to Orlando from Pennsylvania in 1991. The maker of healthy cheese and other dairy-related products earned $377,523 for the fiscal year ended March 31, compared with a loss of $2.7 million the year before. Meanwhile, total sales jumped 20 percent to $20.6 million. Galaxy Foods President Angelo Morini expects the company to gradually increase sales and profits over the coming months. GEOTEK: CEO Steps Down ---------------------- Geotek Communications, Inc. (NASDAQ: GOTK) (Pacific: GEO), a provider of mobile logistics systems, today announced that Yaron I. Eitan has stepped down as Chief Executive Officer of the Company and resigned from its Board of Directors. Anne E. Eisele, Geotek's Chief Financial Officer, also has been named Chief Administrative Officer. Separately, the Company announced the departure of Michael McCoy, Executive Vice President and Chief Operating Officer, and Dr. George Calhoun, Senior Vice President of Strategic Marketing. Dr. Calhoun will remain on the Company's Board of Directors with William Spier, Chairman, Richard T. Liebhaber and Richard Krants. HEARTPORT INC: S&P Affirms Ratings ---------------------------------- Standard & Poor's affirmed its single-'B' corporate credit and bank loan ratings on Heartport Inc. Additionally, Standard & Poor's affirmed its triple-'C'-plus rating on Heartport's $86.25 million 7.25% convertible subordinated notes due 2004. The outlook has been revised to developing from positive. The ratings on Heartport Inc. are affirmed reflecting uncertainty regarding the acceptance of Heartport's instruments, weak financial results, and narrow product offerings that are subject to changes in technology. It remains uncertain as to whether Heartport's devices will gain widespread acceptance by the surgical community over the longer-term. Additional market entry of competing devices might also impact pricing going forward. Still, Heartport is advantaged by being the first company to develop supplies for minimally invasive heart surgery for arrested hearts. The company's weak financial performance, expectations for continued losses and continued cash needs dominate its credit profile. HONDO OIL: Reports Status of Listing and Reserves ------------------------------------------------- Hondo Oil & Gas Company announced that its shares will no longer be traded on the American Stock Exchange as the Company has withdrawn its appeal of the Exchange's delisting decision. Instead, its shares have begun trading over-the-counter on the electronic bulletin board under the symbol 3HOGL. In April 1998 the Company announced that the rate of decline in production from its Opon No. 3 and Opon No. 4 gas wells in Colombia had been higher than expected during the first five months of production. Recent testing of the wells is complete. An analysis of the test results by the Company's independent reserve engineers has concluded that it will become uneconomic (operating costs will exceed operating revenues) to produce the wells before the end of fiscal 1998 and that the drilling of additional wells would be uneconomic (net profit over the life of a new well would be less than the cost to drill it). The Company is considering its available alternatives in light of its current financial situation, which may include, among others, negotiation with the Company's existing creditors, dissolution of the Company, or a filing under the applicable bankruptcy law. INDUSTRIAL IMAGING CORP: New Auditors Engaged --------------------------------------------- Industrial Imaging Corporation reports to the SEC that on June 1, 1998, the company engaged BDO Seidman, LLP as its new independent auditors for the company's fiscal year ending March 31, 1998. During the Fiscal 1995, Six Months 1996, Fiscal 1997 and the subsequent interim periods, the Registrant did not consult with BDO on items which involved (i) the application of accounting principles to a specified transaction, either completed or proposed, (ii) the type of audit opinion that might be rendered on the Registrant's financial statements, or (iii) the subject matter of a disagreement or event set forth in Item 304(a)(1)(iv) of Regulation S-B. LEVITZ FURNITURE: Seeks Extension for Filing Form 10K ----------------------------------------------------- Levitz Furniture Incorporated (OTC-BB: LVFIQ), and its wholly owned subsidiary, Levitz Furniture Corporation announced today they had reached an agreement with the lenders under their credit agreement with respect to the terms of an amendment to that agreement, which will permit LFI and Levitz to remain in compliance with the agreement. The amendment will be submitted for approval by the Courtin Levitz' Chapter XI reorganization case. Because the failure to obtain such an amendment would have a material impact on their financial statements, and Court approval cannot be obtained in time for the timely filing of their 1998 Annual Reports on Form 10-K, LFI and Levitz today filed a Form 12b-25 with the Securities and Exchange Commission requesting a 15- day extension for the filing of those Annual Reports. LFI and Levitz believe the Court will approve the amendment but no assurances can be given as to such approval or its timing. MTL, CHEMICAL LEAMAN: Ratings Put on S&PWatch Negative ------------------------------------------------------ Standard & Poor's today placed its ratings of MTL Inc. and Chemical Leaman Corp. on CreditWatch with negative implications. The CreditWatch placement follows MTL's announcement that it intends to acquire Chemical Leaman in a largely debt- financed transaction for approximately $257 million, including assumed Chemical Leaman debt. The merger should improve the company's competitive position, but will cause the company's financial profile to deteriorate at least in the near term. Pro forma for the transaction, MTL will become the largest stainless steel tank truck company in North America with combined revenues of approximately $654 million in 1997. For both companies, the merger diversifies the tank truck customer base and should provide cost savings and asset productivity improvements from greater lane density and backhaul opportunities. The merger also expands MTL's product offering into additional high-margin (tank cleaning) and rapidly growing, noncapital-intensive businesses (logistics and freight brokerage). MTL's debt leverage will increase significantly. Total debt is estimated to rise to about $440 million. The heightened debt level would cause total debt to earnings before interest, taxes, depreciation, and amortization (EBITDA) to elevate initially to about 5.8 times (x) and EBITDA interest coverage to weaken to about 2.0x before consideration of potential cost savings and adjustments for nonrecurring charges totaling $20 million of EBITDA per year. If initial estimated cost savings are achieved without ad verse surprises (such as unexpected customer leakage) and industry conditions remain stable, MTL's credit ratios could be restored to premerger levels. In this case, total debt to EBITDA could fall to about 5.0x and the EBITDA interest coverage run rate could rise to about 2.2x. MARINELAND OCEANARIUM: Bankruptcy Judge to Choose Buyer ------------------------------------------------------- A bankruptcy judge is scheduled to choose today between four competing offers for 140 acres of resort property surrounding the Marineland oceanarium, land that includes hotels, a campground, marina and restaurant. Each of the four bidders has pledged to help restore the struggling, 10-acre oceanarium. Reviving the rundown resort facilities is considered crucial to the survival of the 60-year-old attraction, which has its own financial troubles. The separately owned companion resort property has attracted an unexpected amount of attention because of its prime oceanfront and interior acreage. (Florida Times Union 30-June-98) MOBILEMEDIA: Arch Closes Financing Deal --------------------------------------- Should it choose to act on an acquisition of MobileMedia Corp., Arch Communications Group Inc. [APGR] now has the financial flexibility to do so. Arch has completed a refinancing program that "positions Arch to participate in ongoing industry consolidation," said Executive Vice President Roy Pottle, the company's chief financial officer. Arch, the third-largest U.S. paging operator in terms of subscribers served, was identified by MobileMedia a week ago as one of a number of potential suitors. MobileMedia, also a major player in the domestic paging market, is seeking to emerge from Chapter 11 federal bankruptcy status. The refinancing takes the form of a new $400 million bank credit facility; a $25 million private placement of convertible preferred stock; and the issuance of $130 million in senior notes. The 10-year notes, issued by wholly-owned subsidiary USA Mobile Communications Inc. II, will pay interest at the rate of 12.75 percent. The subsidiary has been renamed Arch Communications Inc. Chairman and CEO Ed Baker Jr. called the refinancing "a tremendous step forward." Among other things, it means the elimination of $156 million of near- term amortization that Arch was facing as a result of the USA Mobile acquisition, completed three years ago. NEW YORK FASHION: Files For Chapter 11 Protection ------------------------------------------------- New York Fashion Organization Inc., a statewide chain of upscale women's apparel boutiques, has filed for protection under Chapter 11 of the U.S. bankruptcy code. NYFO, a six-store chain that opened its first store in 1978, NYFO filed with the bankruptcy court in Norfolk on June 24, reporting $670,000 of assets and $427,518.18 in liabilities. Chapter 11 entitles owners Sheldon and Susan Isenberg to a spell of breathing room from its 85 to 90 creditors, clothing vendors, manufacturers and jewelry suppliers while they design a reorganization plan, and a way to pay creditors all or a portion of what they owe. Local NYFO shops are at 222 W. 21st St., Norfolk, and LaPromenade Shopping Center, Virginia Beach. The others are in Fredericksburg, Midlothian and two in Richmond. Sheldon Isenberg attributed the problems to a miscalculation in merchandising. He stressed that he plans to keep all of the area stores open, retain all 30 employees and leave their benefit plans intact. (Virginian Pilot Ledger Star-06/30/98) NIKE: Reports Revenues and Earnings For Fourth Quarter ------------------------------------------------------ NIKE, Inc. (NYSE: NKE)reported revenues and earnings for the Company's fourth quarter and fiscal year ended May 31, 1998. Fourth quarter revenues were $2.31 billion, down 3 percent from $2.37 billion last year. Fourth quarter net loss was $67.7 million or $0.23 per diluted share, which includes a pre-tax restructuring charge of $129.9 million, or $79.5 million after taxes, or $0.27 per diluted share. Excluding the restructuring charge, the Company's net income was $11.8 million or $0.04 per diluted share, compared to $155.8 million, or $0.52 per diluted share in the prior year. For the fiscal year ended May 31, 1998, revenues increased 4 percent to a record $9.6 billion, compared to $9.2 billion in fiscal 1997. Including the charge, full year net income totaled $399.6 million or $1.35 per diluted share. Exclusive of the charge, net income decreased 40 percent to $479.1 million or $1.62 per diluted share compared to $795.8 million or $2.68 per diluted share. Fourth quarter fiscal 1998 earnings were reduced by a restructuring charge of $129.9 million. The restructuring charge relates to the Company's plans to better align its overall cost structure and organization with planned revenue levels. PIONEER OIL: To Implement Chapter 11 Plan ----------------------------------------- Pioneer Oil and Gas Co., a tiny exploration firm based in Salt Lake City, has received U.S. Bankruptcy Court permission to seek creditor approval for its proposed Chapter 11 reorganization plan. The company, whose shares are traded over-the-counter and quoted on NASDAQ's bulletin board system, says the plan will allow it to pay off all of its creditors for approximately $300,000. Pioneer, however, does not yet have the $300,000. "We have several alternatives for raising the money," says Pioneer's president, Don J. Colton. He said the company will be seeking help from its existing stockholders, who will be offered additional shares in the company. It can also try to get debt financing or sell some of its assets, which include interest in 30 stripper wells in Wyoming, Colorado and Utah. Stripper wells produce under 10 barrels of oil a day. Pioneer filed for Chapter 11 protection in February 1997, a month after a California jury ordered it to pay Unocal Corp. of El Segundo $563,158 in a dispute over cleanup costs at a drilling site. The company said it was forced to seek bankruptcy protection because of the award and because Unocal was seeking an additional $2 million to clean up oil- filled sump pits at the site in Santa Maria, Calif. The Utah company contended the sumps, which are oil-filled World War II era reserve pits buried under 8 feet of fill, were not disclosed by Mobil when the property was sold to Pioneer in 1987. "The major creditor, Unocal, which holds over two-thirds of the dollar amount, has agreed to the plan," says Colton, who noted the company will no longer be involved in litigation concerning the California property. (Salt Lake Tribune; 06/30/98) RBX CORPORATION: Reaches Agreement With Banks --------------------------------------------- RBX Corporation, a major manufacturer of closed cell rubber foam and mixed rubber compounds, announced today that it has reached agreement with its banks to waive and revise certain loan covenants through year-end. RBX expects its current revolving credit facility, cash flow from operations and asset sale proceeds to provide adequate liquidity to satisfy all of its current cash flow needs. Separately, the company announced that is has reorganized RBX Corporation top management into an "Office of the President." The company announced a series of actions to offset recent poor performance at its Conover operation. These actions include replacement of the Conover operations manager and initiation of manufacturing process and efficiency improvement measures including headcount reductions. Upon the successful implementation of these initiatives, RBX management expects the Conover plant to exceed breakeven prior to year-end. In addition, the company has underway the sale of certain company non-core assets which will generate approximately $8 million in cash proceeds. Further headcount reductions of a least 125 employees will occur at company operations other than Conover. Frank Roland, president of RBX Corporation, commented on the company's new initiatives by adding: "These short term objectives will be followed by market and product management changes aimed at maximizing RBX Corporation's position as the country's leading producer of closed cell foam products." RELIANCE ACCEPTANCE: Court OK's Wallace Sanders ----------------------------------------------- The court authorized Reliance to retain Wallace Sanders & Co. as its public auditors after striking a provision from the proposed order that sought to force the subprime lender's former auditors to turn over their work papers to Wallace Sanders. Reliance argued that Wallace Sanders needs access to the audit work papers of the company's prior auditors, KPMG Peat Marwick LLP. KPMG argued that the request "goes far beyond the professional standards regarding an auditor's duty to provide access to its work papers to a successor auditor." STROUDS: Reports Its First Quarter Results ------------------------------------------ Strouds, Inc. (Nasdaq:STRO) reported sales and net earnings for the thirteen weeks ended May 30, 1998 compared with the corresponding period a year ago. For the thirteen week period ended May 30, 1998, the Company had a net loss of $596,000, or $0.07 per basic and diluted share, compared with a net loss of $2,999,000, or $0.35 per basic and diluted share, for the same thirteen week period last year. Net sales for the first quarter were $55,015,000 compared with $50,451,000 for the corresponding period a year ago. Comparable stores sales increased for the first quarter by approximately 8.4%. Charles Chinni, President and Chief Executive Officer, commented, "Our sales growth momentum continued during the first quarter as we continue to refine our merchandise content in our stores. May comparable sales growth was the strongest in 4 years. We are optimistic about our restructuring efforts and continued improvement." Strouds is a specialty retailer of bed, bath, tabletop and other home textiles products in the United States. At May 30, 1998, the Company operated 66 stores in five states. SUNBEAM: Maybe the 1997 Statements Were Off -------------------------------------------- According to a report in The Wall Street Journal on July 1, 1998 Sunbeam Corp. admits that 1997 financial statement audited by Arthur Andersen LLP may not be accurate, and "should not be relied on." Deloitte & Touche has now joined the team to review the reports. The review is focusing on the company's "bill and hold" practice. It isn't clear whether Sunbeam followed proper accounting methods for recording those sales. Sunbeam's booking of sale s has been challenged in shareholder suits filed against the company in recent months. The matter is also the subject of an informal investigation by the SEC. The company claims that it it continuing negotiations with bankers, seeking waivers on covenants on $1.7 billion in loans that faced default on June 30 in light of the expected second-quarter loss. Sunbeam is also expected to make an exchange offer for Coleman Co. YOUNG BROADCASTING: S&P Assigns CreditWatch ------------------------------------------- Standard & Poor's today placed its double-'B'-minus corporate credit and bank loan ratings, and single-'B' subordinated debt rating of Young Broadcasting Inc. on CreditWatch with "developing" implications. This follows Young Broadcasting's June 29, 1998 announcement that it will explore strategic alternatives for the company, including a merger or sale of the company, to maximize shareholder value. Developing implications mean that the ratings may be either raised or lowered. Standard & Poor's will resolve the CreditWatch listing following company actions. Ratings will reflect the capital structure of the merged or surviving entity. ZENITH: Secures New Financing ----------------------------- Zenith Electronics Corporation entered into a $125 million secured credit agreement with a banking group led by Citicorp. The agreement amends the company's existing Citicorp facilities and provides increased borrowing capacity to help fund Zenith's working capital requirements through year-end 1998. The increased availability under the amended Citicorp credit agreement supplements $45 million of financing provided earlier this year by Zenith's largest stockholder and creditor, LG Electronics Inc. (LGE). LGE has extended Zenith's right to borrow under such financing through Dec. 31, 1998. Zenith President and CEO Jeffrey P. Gannon said, "Our amended credit agreement, combined with the continuing strong support of LGE, provides needed financial flexibility as we implement our major financial and operational restructuring." In May, Zenith announced plans to restructure its debt through a prepackaged plan of reorganization later this year. The company intends to file a registration statement related to the restructuring with the Securities and Exchange Commission shortly. ********* 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 * * *