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/raid1/www/Hosts/bankrupt/TCR_Public/980803.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, August 3, 1998, Vol. 2, No. 150 Headlines ALLEGHENY HEALTH: Entering into Hospital Sale Contracts ALLIANCE ENTERTAINMENT: Plan Confirmed AMBASE: Second Quarter Results CHERRY COMMUNICATIONS: World Access Reports Progress in Merger CONCORDE CAREER: Second Quarter Results CROWN BOOKS: Intends to Close 14 D.C. Area Stores FIRST ENTERPRISE: Court Converts Case To Chapter 7 FORMAN PETROLEUM: S&P Lowers Ratings to CCC- FRUEHAUF TRAILER: Disclosure Statement Okayed GLOBAL MOTORSPORT: S&P Rates Senior Discount Notes CCC+ HANLIN GROUP: Pleads Guilty in Georgia to Environmental Crimes HARVARD INDUSTRIES: Roger Burtraw Retires MARVEL ENTERTAINMENT: Announces Agreement on Revised Plan NORTHWESTERN PACIFIC: Staff Quit Cash-Strapped Railroad PARAGON TRADE: Announces Second Quarter Results PORTACOM WIRELESS: Consummates Plan's Stock Sale to VDC Corp. QUARTERDECK CORP.: Restructuring Undercut by Procomm Y2K Suit SCOOP, INC.: Files for Chapter 11 Protection SOLV-EX CORP.: Canadian & US Courts Okay Reorganization Plan SOUTHWEST ROYALTIES: S&P Lowers Credit Ratings to CCC+ ********* ALLEGHENY HEALTH: Entering into Hospital Sale Contracts ------------------------------------------------------- Allegheny Health, Education and Research Foundation (AHERF) and its Board of Trustees announced that it has reviewed and approved the following proposals for the successful transition of its Eastern Region entities: (1) AHERF and Vanguard Health Systems, Inc. (Vanguard Health), reached a definitive agreement and executed a contract for the purchase by Vanguard Health of eight of the Allegheny University Hospitals, East, and Allegheny University Hospitals, Centennial located in the Philadelphia area including: * 618-bed Allegheny Hahnemann; * 465-bed Allegheny MCP; * 183-bed St. Christopher's Hospital for Children; * 330-bed Allegheny Graduate; * 228-bed Allegheny City Avenue; and * 200-bed Allegheny Parkview, all of Philadelphia; * 180-bed Allegheny Bucks County of Warminster, PA; and * 280-bed Allegheny Elkins Park of Elkins Park, PA. The contract also calls for Vanguard Health to accept responsibility for the network of primary care physicians and specialty group practices in Allegheny University Medical Practices, East. Additionally, AHERF, in cooperation with Vanguard Health, is also committed to developing a long-term plan for Allegheny University of the Health Sciences, which after completion of the sale would remain an independent, not-for-profit organization. The closing of the transaction is pending regulatory and court approval. (2) The AHERF and Allegheny University Hospitals, New Jersey Boards of Trustees and the Board of Directors of Catholic Health East, parent organization of Our Lady of Lourdes Healthcare Services, Inc. (Lourdes), signed a binding letter of intent for Lourdes to purchase Allegheny University Hospitals, Rancocas of Willingboro, NJ, pending the necessary regulatory approvals. (3) Simultaneously, AHERF's Board of Trustees received a letter of intent from Tenet Healthcare and has agreed to complete due diligence with Tenet relative to a possible definitive proposal that would then be advanced to the Bankruptcy Court. Tenet has offered to buy the eight hospitals in Allegheny University Hospitals, East and Allegheny University Hospitals, Centennial, and related assets. The Tenet offer also includes a commitment to work with AHERF on a long-term plan to secure the continued independence and financial security of the University. Anthony Sanzo, newly appointed president and chief executive officer of AHERF, said, "It is important to underscore our Board of Trustees' responsibility to ensure that we fully explore all alternatives in light of the complex business and financial issues our organization faces and to advance the best solutions for all involved. We maintain our obligation to review additional offers made by other health care organizations interested in acquiring AHERF's Eastern Region entities and providing them full opportunity to pursue a transaction. All interested parties will be afforded an opportunity to make offers in accordance with the procedures established by the Bankruptcy Court." AHERF employs 2,292 staff in the parent organization statewide, 2,076 staff and faculty in Allegheny University Medical Practices statewide, and in the Philadelphia region 14,913 staff and 1,741 full-time and part-time faculty. ALLIANCE ENTERTAINMENT: Plan Confirmed -------------------------------------- The United States Bankruptcy Court in Manhattan confirmed the plan of reorganization proposed by Alliance Entertainment to emerge from chapter 11. The plan contemplates that a syndicate of banks led by Chase Manhattan will take control of the company, after extending $50 million in interim financing last year. Alliance will be taken private through the chapter 11 process. Matthew Feldman, Esq., of Willkie, Farr & Gallagher said that looks for the company's plan to become effective by mid-August. AMBASE: Second Quarter Results ------------------------------ AmBase Corporation (OTC Bulletin Board:ABCP) (the "Company") announced Friday a net loss of $351,000 for the second quarter ended June 30, 1998, bringing the company's six-month net loss to $654,000. At June 30, 1998, the Company's assets consisted principally of $35 million of cash and cash equivalents and investments in U.S. Treasury Bills with maturities of less than one year, and a receivable from Home Holdings. At June 30, 1998, the Company's liabilities, including reserves for contingent and alleged liabilities of $75 million, exceeded total recorded assets of $49 million by approximately $26 million. In June 1998, the Company paid $12,700,000 to the IRS for tax and estimated interest in full satisfaction of the Company's Fresh Start tax liability. This amount was previously reserved for as part of the Company's income tax reserves account. On July 30, 1998, pursuant to the Home Holdings, Inc. ("Home Holdings") Bankruptcy Plan, as amended (the "Home Holdings Bankruptcy Plan") the Company received $15,200,000 in full satisfaction of all the Company's claims relating to Home Holdings other than certain disputed claims. The Company has significant alleged tax liabilities and is a defendant in various lawsuits and proceedings, the ultimate outcome of which could have a material adverse effect on its financial condition and results of operations. CHERRY COMMUNICATIONS: World Access Reports Progress in Merger -------------------------------------------------------------- As previously reported, on May 12, 1998, World Access, Inc. entered into a definitive Agreement and Plan of Merger and Reorganization with Cherry Communications Inc. (d/b/a Resurgens Communications Group) ("RCG") whereby the Company will acquire RCG in a merger transaction. World Access also entered a Share Exchange Agreement and Plan of Reorganization with the sole shareholder of Cherry Communications U.K. Ltd., whereby the Company will acquire Cherry U.K. in a share exchange transaction. In connection with the Merger, World Access advises in a Form 8-K filed July 27 with the SEC, the creditors of RCG will receive a total of 9,375,000 shares of common stock of WAXS INC.("New World Access"). New World Access is a wholly-owned subsidiary of the Company that will become the parent of the Company upon the completion of the previously reported acquisition of the shares of NACT Telecommunications, Inc. not already owned by the Company and the holding company reorganization that will be completed in connection with the acquisition. In connection with the echange, the Shareholder will receive a total of 1,875,000 shares of New World Access common stock, a portion of which will be held in escrow. Both the Merger and the Exchange is subject to the satisfaction of certain conditions customary in similar transactions, including the approval of the Company's sockholders and the consummation of the Holding Company Reorganization. The consummation of the Merger is also subject to the Bankruptcy Court's approval and confirmation of RCG's Plan of Rorganization. In addition, the Merger Agreement is subject to the approval of the Bankruptcy Court. Finally, the consummation of the Merger is a condition to the consummation of the Exchange, and the Exchange is a condition to the consummation of the Merger. CONCORDE CAREER: Second Quarter Results --------------------------------------- Concorde Career Colleges, Inc., (CCDC) based in Kansas City, Missouri, reported revenue of $8,339,000 for the three-months ended June 30, 1998, and a net loss of $453,000. The Company said that rvenues were down because of its declining student population. Student population at June 30, 1998, decreased 23% from June 30, 1997. The Company has taken the following steps in an effort to increase enrollments: * a new advertising program was implemented including new television commercials and new print ads, * a new National Director of Student Recruiting was hired, * a new student recruitment training program was implemented, and * a marketing consultant was retained to focus and improve advertising results. In September 1997, the Bureau of Consumer Protection of the United States Federal Trade Commission (the "FTC") notified the Company that it was conducting an inquiry related to the Company's offering and promotion of vocational or career training. During June 1998, the FTC presented the Company with a proposed complaint and consent order concerning the inquiry. The Company recently met with representatives of the FTC and is considering various available options in response to this action. CROWN BOOKS: Intends to Close 14 D.C. Area Stores ------------------------------------------------- Crown Books Corp., announced that it will close 14 of its 38 Washington, D.C., area stores and cut 225 jobs, The Washington Post reported. The closings are part of the 79 stores that will be closed nationwide, and 1,250 jobs will be eliminated. The closings are subject to bankruptcy court approval; Crown filed chapter 11 on July 14. The company has asked the Delaware Court for approval to close the chain's weakest performing stores. (ABI 31-Jul-1998) FIRST ENTERPRISE: Court Converts Case To Chapter 7 -------------------------------------------------- The U.S. Bankruptcy Court in Chicago has converted First Enterprise Financial Group Inc.'s chapter 11 case to chapter 7. Daniel Hoseman was named chapter 7 trustee. A status hearing is set for Aug. 20. First Enterprise announced in April that it would close its doors after three companies for which the sub- prime auto lender serviced installment sale contracts terminated their servicing agreements. (ABI & Federal Filings, Inc. 31-Jul- 1998) FORMAN PETROLEUM: S&P Lowers Ratings to CCC- -------------------------------------------- Standard & Poor's Friday lowered its senior debt and corporate credit ratings on Forman Petroleum Inc. to triple-'C'-minus from triple-'C'-plus and affirmed its triple-'C'-minus preferred stock rating on the company. The ratings were removed from CreditWatch, where they were placed April 1, 1998. The outlook is negative. This action, S&P said, follows indications that there is a significant possibility the company will not meet its interest payment on Dec. 1, 1998. Despite a sizable increase in production during the first half of 1998 versus the same period in 1997, given the current weakness in oil prices, the company's internal cash flows are not expected to be sufficient to cover the company's projected 1998 interest expense and capital expenditures. Further, the company lacks a bank credit facility, thus its ability to cover the anticipated cash flow shortfall is extremely limited. FRUEHAUF TRAILER: Disclosure Statement Okayed --------------------------------------------- The court approved Fruehauf Trailer Corp.'s disclosure statement and extended the company's exclusive period for soliciting acceptances for its liquidating reorganization plan through Oct. 17. A plan confirmation hearing is set for Sept. 16. The court also approved the trailer manufacturer's settlement with Jartran Inc.'s bankruptcy trustee. The agreement resolves the trustee's adversary suit, which sought $1.9 million in alleged preferences, as well as about $46 million in claims asserted by Fruehauf against Jartran. (ABI & Federal Filings, Inc. 31-Jul- 1998) GLOBAL MOTORSPORT: S&P Rates Senior Discount Notes CCC+ ------------------------------------------------------- Standard & Poor's assigned its triple-'C'-plus rating to holding company Global Motorsport Group Inc.'s $25 million senior discount notes due 2009. Other GMGI credits were rated higher by S&P. The ratings, S&P explained, reflect Global Motorsport's position as the largest independent distributor of aftermarket parts and accessories for Harley-Davidson motorcycles, as well as the company's improving operating performance. These favorable characteristics are offset by thin pro forma interest coverages resulting from the impending leveraged buyout of the company by Fremont Partners L.P. S&P applauds GMGI's business concept, operations and performance, but notes that financial risk is relatively high, with pro forma operating cash flow coverage of total interest expense thin at 1.4 times (x) for the 12 months ended April 30, 1998. Pro forma cash interest coverage of 1.9x provides some near-term flexibility, as mandatory cash interest payments are not required on the senior discount notes until 2004. And, although the near-term operating outlook is favorable, S&P says, the company will need to significantly improve operating performance in the intermediate term to alleviate its debt burden and offset the accretion of the senior discount notes. HANLIN GROUP: Pleads Guilty in Georgia to Environmental Crimes -------------------------------------------------------------- The Florida Times Union reports that Hanlin Group Inc., a bankrupt New Jersey company that owned LCP Chemicals-Georgia Inc. pleaded guilty in federal court last week to seven violations of environmental laws including purposely dumping mercury and lead into public waters. The plea on behalf of Hanlin was entered by its lawyer, Robert J. Kipnees. Senior U.S. District Judge Anthony A. Alaimo accepted the plea after two federal agents testified to the nature of the offenses. After Kipnees made no objection to federal agents' testimony, the Union reported, Alaimo accepted the plea and said, "I find this the most arrogant and egregious violation of the environmental protection laws in this country." Hanlin Group's board of directors have reportedly agreed to pay up to $3.5 million in fines but that depends on payments to other creditors. The company has also agreed to make restitution as determined by the court and to submit a comprehensive environmental compliance plan before opening another chemical plant similar to LCP, which produced chlorine gas and caustic soda. Alaimo's statements on the seriousness of the offenses and the agents' testimony are in line with what U.S. Environmental Protection Agency officials said four years ago, that the closed chemical plant was home to the worst known contamination in the Southeast and perhaps the country. Conditions had gotten so bad at the plant before it closed that employees feared for their lives, said Paul D. Okerberg, a criminal investigator for the Environmental Protection Agency. Okerberg said the illegal storage and dumping of highly caustic wastewater contaminated with mercury justified those fears. HARVARD INDUSTRIES: Roger Burtraw Retires ----------------------------------------- Harvard Industries announced late last week that Roger Burtraw, executive vice president for operations, has retired from the company. Burtraw, 58, joined Harvard in 1991 as president of the Kingston-Warren subsidiary. He served as president of the company from February 1997 to June 1998. "We wish Roger the best in his new pursuits," said Roger G. Pollazzi, Harvard's chief executive officer. "He has been a valuable part of Harvard's management team and is widely respected in the industry." James B. Gray was named president earlier this month. Gray joins Harvard from Tenneco and reunites with Pollazzi and other management team members who executed the successful turnaround of The Pullman Company. "I'm fully confident in Jim Gray's ability to lead the company as we move toward emerging from Chapter 11," Pollazzi said. MARVEL ENTERTAINMENT: Announces Agreement on Revised Plan --------------------------------------------------------- Marvel Entertainment Group Inc., announced late last week that an agreement has been reached by Toy Biz, Marvel's chapter 11 trustee, representatives of Marvel's senior secured lenders, representatives of Marvel's unsecured creditors, representatives of Marvel's equityholders and certain other parties, according to a newswire report. They agreed to support a revised version of Marvel's eorganization plan that was proposed by Toy Biz and Marvel' senior secured lenders and confirmed on July 13 by the District Court for Delaware. The plan that was confirmed lacked the support of the unsecured creditors' committee and the committee of equityholders. Both have agreed to withdraw their appeals on the confirmation order and support the new version of the plan. (ABI 31-Jul-1998) NORTHWESTERN PACIFIC: Staff Quit Cash-Strapped Railroad ------------------------------------------------------- The San Francisco Chronicle reported Friday that the financially strapped Northwestern Pacific Railroad hit more rough track yesterday with the announcement that its entire staff is quitting. Executive Director Dan Hauser and his four employees resigned, effective Friday, saying the Eureka-based railroad has run out of money. "I think it's tragic and unfortunate for the railroad," Hauser told the Chronicle, "but it may dramatically bring home to some of the (Governor Pete Wilson) administration officials that there is a problem." Hauser said the railroad's continued operation is vital to North Bay plans to run a commuter line in Marin and Sonoma counties. "The freight railroad would help get heavy truck traffic off the highway," he said. "Operation of the railroad also helps reserve the North Bay's rail corridor for the commuter line and could eventually help subsidize passenger operations." "The resignations were accepted with gratitude and regret," the Chronicle quoted Ruth Rockefeller of Willits, who chairs the railroad's board, as saying. "They were not being paid, and we really had no hope for income. It was a mutual decision that things could not go on the way things were." Rockefeller said the authority's seven unpaid board members will run the agency. "This railroad is of vital importance to the area. It must not go under, and I intend to do everything I can to see that it doesn't," she said. "Until we can get freight moving throughout the system, we won't have the revenue to build up the track. Freight will give us revenue to build up track for inter-city (passenger) service." The railroad is about $6 million in debt to contractors and suppliers, most of it related to $23 million in track damage from winter storms in 1993, 1995 and 1997. The tracks run from Eureka to Novato and Napa, but the only portion now operating is from Willits in Mendocino County to Schellville in Sonoma County, the Chronicle reported. PARAGON TRADE: Announces Second Quarter Results ----------------------------------------------- Paragon Trade Brands, Inc. (NYSE:PTB) reports net earnings of $3.4 million for the quarter ended June 28, 1998, on net sales of $127.0 million. Earnings before interest, taxes, depreciation and amortization and bankruptcy costs, EBITDA, for the second quarter totaled $12.0 million. The Company said that net earnings was positively impacted by improved contributions to income from foreign joint ventures and the recognition of tax benefits previously reserved. EBITDA was depressed by approximately $2.3 million in charges associated with a royalty payable to The Procter & Gamble Company under a Conversion Agreement, which allowed the Company to complete its conversion to a new product design after an unfavorable patent judgment, and lower sales volume. This decrease was partially offset by savings from manufacturing efficiencies realized during the quarter. For the six months ended June 28, 1998, the Company reported net earnings of $9.4 million on net sales of $265.3 million. Commenting on the second quarter results, Chief Executive Officer, Bobby Abraham, said, "Retailers tend to plan promotional activities at least 13 weeks in advance. The temporary uncertainty caused by the P&G patent judgment and our subsequent Chapter 11 filing in early January interrupted our customers' normal promotional planning cycles, negatively impacting our April and May sales volume. As we moved through the quarter, however, sales volume recovered as our customers recognized the strength of our company. The full impact of this continuing support from our customers is expected to be reflected in sales in the third and fourth quarters. In addition, our foreign ventures continue to perform well, and their contributions to earnings are expected to contribute to the future growth of the Company. All in all, we are pleased that we are able to report increased net earnings in comparison with the same period last year despite the temporary dip in sales and the burden of expenses related to the P&G patent judgment and Chapter 11 filing. All of this bodes well for our ability to grow earnings in the future." PORTACOM WIRELESS: Consummates Plan's Stock Sale to VDC Corp. ------------------------------------------------------------- In a Form 13-D filed with the SEC last week it was disclosed that PortaCom Wireless, Inc., consummated the sale to the Issuer VDC Corp., Ltd., of 2,000,000 common shares and warrants to purchase, at an exercise price of $4.00 per share, an additional 4,000,000 common shares of Metromedia China Corp. ("MCC"). In consideration for the sale of such assets and subject to certain adjustment features, PortaCom received 5,300,000 newly issued common shares and the right to utilize a maximum of $3,000,000 in cash (the "Cash") to satisfy claims (the "Claims") made against the Issuer in its bankruptcy proceedings. In June, VDC, ProtaCom and Klehr, Harrison, Harvey, Branzburg and Ellers, LLP (the "Escrow Agent") entered into an agreement whereby the Issuer delivered to the Escrow Agent the common shares which are to be held by the Escrow Agent until distribution of the common shares is made to PortaCom's creditors and stockholders in satisfaction of the Claims. Also in June, PortaCom and MCC entered into an agreement whereby it acknowledged and agreed that MCC holds a valid, perfected, first-priority replacement lien on 50% of the common shares. Further, PortaCom and VDC entered into a June agreement whereby VDC agreed to pay PortaCom an amount, either in cash or in additional common shares, according to a predetermined formula based upon the market price of common shares and MAC common shares. QUARTERDECK CORP.: Restructuring Undercut by Procomm Y2K Suit ------------------------------------------------------------- Software developer Quarterdeck Corp. [NASDAQ:QDEK] experienced an up-and-down day today: While the company released optimistic plans to return to profitability sometime over the next two financial quarters, it was also slapped with a lawsuit in the New York State Supreme Court for selling software that it reportedly knew was not Year 2000 compliant. The lawsuit, which was filed by Against Gravity Apparel Inc. in New York, alleges that Quarterdeck continued to promote and sell its Procomm Plus version 4.0 for Windows 95 software, even after it was aware that the product did not properly calculate the impact of the century's turning in less than two years. The class-action suit claims that Procomm Plus, a telecommunications-oriented product used on mailing systems for electronic bulletin boards, displays an incorrect date after December 31, 1999. Instead of reading the January 1, 2000, date correctly, the software projects a date of Year 101. In the suit, the prosecution is claiming that Quarterdeck had previously admitted the flaw existed but continued to sell the product to customers without giving any solution to the problem or warning that an error existed. The suit also says that the only way to continue utilizing the product with a correct Year 2000 adaptation is to upgrade to the company's Procomm Version 4.70 which is Y2K compliant. It estimates that Quarterdeck sold tens of thousands of copies of the software after it was aware that a flaw existed. The time period of these sales would have been from November, 1996 to July, 1997, according to the suit. The program retails between $139 to $179. Neither Quarterdeck or Against Gravity Apparel would comment on the lawsuit for this story. Quaterdeck also announced that it would return to profitability sometime in the next six months. The company has undergone restructuring for the last month. In addition to its restructuring which featured a 25 percent cut in employees, Quarterdeck says sales have taken a slight turn for the better. Reported By Newsbytes News Network http://www.newsbytes.com MARINA DEL RAY, CALIFORNIA, U.S.A., 1998 JUL 31. By Matt Hines, Newsbytes. SCOOP, INC.: Files for Chapter 11 Protection -------------------------------------------- Scoop, Inc. (OTC: SCPI) filed a voluntary petition for relief under chapter 11 of the United States Bankruptcy Code Friday morning. The Company listed assets of approximately $950,000 and liabilities of approximately $1,400,000 in its voluntary petition. Scoop said that it intends to continue operating its business until a sale of substantially all its assets is approved. Scoop, Inc. is represented by the law firm of Lobel & Opera, based in Irvine, California. Scoop announced that Karl Karlsson and Michael Baum have resigned as members of the board of directors. For the three months ending June 30, 1998, Scoop posted net sales of $633,400, gross profit of $224,500 and a net loss of $643,200. In the corresponding period in 1997, net sales amounted to $485,700, gross profit was $229,200 and the net loss amounted to $1,081,500. SOLV-EX CORP.: Canadian & US Courts Okay Reorganization Plan ------------------------------------------------------------ U.S. and Canadian judges last week paved the way for Albuquerque- based Solv-Ex Corp. to emerge from Chapter 11 bankruptcy** protection. Bankruptcy judges in Albuquerque and in Alberta, Canada, met in a joint session via telephone to consider Solv- Ex's reorganization and tentatively agreed to sign an order to accept the company's plan. "I hope for everyone involved that this (reorganization) will be a success," U.S. Bankruptcy Court Judge Mark McFeeley said at the end of Wednesday's hearing. Both McFeeley and Canadian Justice S.J. LoVecchio said they would sign an order confirming Solv-Ex's plan. The order probably will be finished and signed by Friday. "This is a great day for Solv-Ex, the shareholders and creditors," Solv-Ex vice president Herb Campbell said. "It's been nearly a year since we went into this." Solv-Ex says it has developed a process to extract a tar-like substance called bitumen from oil sands in Canada. The company has built an extraction plant in Canada. Solv-Ex will emerge from Chapter 11 immediately after the judges sign the confirmation order, said Solv-Ex attorney John Phillips. After that, cash dividends to Solv-Ex's creditors will be paid within 30 days. Those creditors will be paid by either Solv-Ex or the Canadian monitor assigned to the case, depending on where the creditors are located. Solv-Ex shareholders will be notified of a stock exchange the company will execute in about 120 days. The exchange will be a one- for-one trade, Phillips said. In addition to the exchange, Solv-Ex shareholders will be issued a warrant to buy an additional share of the company's stock for each three shares they already own. "That's a little something extra we wanted to do for all the shareholders who've stuck with us through this," Campbell said. With his tentative approval of Solv-Ex's reorganization plan, McFeeley denied a request by the U.S. Securities and Exchange Commission to delay Wednesday's hearing. As previously reported, the SEC had asked the court to delay the proceedings to give creditors more time to weigh fraud allegations against the company and its executives made by the SEC in a separate civil lawsuit. (Albuquerque Journal 30-Jul-1998) SOUTHWEST ROYALTIES: S&P Lowers Credit Ratings to CCC+ ------------------------------------------------------ Standard & Poor's lowered its corporate credit and senior debt ratings on Southwest Royalties Inc. to triple-'C'-plus from single-'B'-minus and its bank **loan** rating to single-'B' from single-'B'-plus Friday. The outlook, S&P said, is negative. S&P explained that the downgrade reflects the company's severely constrained cash flow generation and financial flexibility as a result of currently depressed oil prices. With oil realizations having fallen to about $13 per barrel, the company, whose production is about 72% oil, is not generating sufficient cash flow to cover its interest burden. Further, the company has suspended capital expenditures and, while its Permian Basin oil production is long lived and fairly stable, production will begin to decline in the absence of reinvestment. Southwest's financial flexibility to cover its cash flow shortfall is very limited given its lack of access to its bank credit facility, S&P related. Cash balances are currently just over $19 million which, barring higher oil prices, provide only limited ability to meet the company's financial obligations. The company could sell certain exploration and production assets without further constraining cash flows and it could monetize its investments in its Red Oak real estate and Sierra well servicing subsidiaries. ********* A calendar of Meetings, Conferences and Seminars column appears each Tuesday in the TCR. 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. ISSN 1520-9474. 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 * * *