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/raid1/www/Hosts/bankrupt/TCR_Public/980810.MBXT R O U B L E D C O M P A N Y R E P O R T E R Monday, August 8, 1998, Vol. 2, No. 155 Headlines AHERF: Judge To Hear From Creditors AHERF: Receives Okay on Emergency Loan AMGAM ASSOCIATES: Independent Bankruptcy Trustee Sought ARIZONA CHARLIE'S: Icahn Wins Initial Endorsement BOSTON CHICKEN: Faces Delisting DEBBIE REYNOLDS: Judge Ups The Bid FPA: Delisting Process Begins GULF RESOURCES: Order Approves Local Counsel to Trustee HOMELAND HOLDING: Files Quarterly Report HOMEPLACE STORES: Salton/Maxim Seeks Allowance of Claim HOSPITAL STAFFING SERVICES: Seeks Extension to File Plan MOUNTAIN BOARD SPORTS: Case Summary & 20 Largest Creditors ONE PRICE CLOTHING: Reports Stock Option Agreement OWENS CORNING: Groupe Porcher Announces Joint PAYLESS CASHWAYS: Court Enters Final Decree PETRO UNION: Registration Statement Filed with SEC REDHOOK ALE: Selling Its Beer-Making Equipment RIVERWOOD HOLDING: Quarterly Report SINGER: Guarded Optimism With Improved Financial Results SUNBEAM: Denies Working with Dunlap SYQEST TECHNOLOGY: To Layoff 950, Cut Manufacturing TCC INDUSTRIES: Quarterly Report UNISON HEALTHCARE: Seeks Order Fixing Bar Date UNITED HEALTHCARE: Merger in Jeopardy WANG LABORATORIES: Changes Fiscal Year End WELCOME HOME: Court Sets Hearing on Disclosure Statement WESTERN FIDELITY: Objects to Committee's Conversion Motion ********* AHERF: Judge To Hear From Creditors ----------------------------------- Federal Bankruptcy Court Judge M. Bruce McCollough is expected to hear arguments this morning from a small parade of creditors who want him to put conditions on the use of new financing that was arranged so that Allegheny General Hospital's parent foundation and its troubled Philadelphia hospitals can continue operating while they reorganize. Among those filing petitions raising limited objections to the financing arrangements for Allegheny Health, Education and Research Foundation were the trustees of the University of Pennsylvania; QualMed Plans for Health Inc., a managed care insurer; South Jersey X-Ray Supply Co.; the Philadelphia College of Osteopathic Medicine; First Union National Bank; and the state Department of Labor and Industry. (Pittsburgh Post Gazette - 08/06/98) AHERF: Receives Okay on Emergency Loan -------------------------------------- On August 6, 1998 Allegheny Health, Education and Research Foundation received the okay on an emergency loan. That loan will keep the foundation going while a bidding process takes place next week on eight of its hospitals in the Philadelphia area. Among the bidders is Tenet Healthcare Corporation of Santa Barbara, California, the nation's second-largest for-profit hospital chain. The Pittsburgh Tribune-Review reports the other bidder is likely to be Nashville, Tennessee-based Vanguard Health Systems. The bids are expected to be received in bankruptcy court in Pittsburgh August 13. AMGAM ASSOCIATES: Independent Bankruptcy Trustee Sought ------------------------------------------------------- International Game Technology and Dolphin Press, Inc. as creditors of the former Gold Shore Casino, are requesting that the court replace management in the cases "In re AMGAM Associates, a Mississippi General Partnership d/b/a Gold Shore Casino" and "In re Amercican Gaming & Resorts of Mississippi, Inc., d/b/a American Gaming Corportaion" with an outside independent bankruptcy Trustee. The preliminary hearing date set by the court is August 11, 1998. ARIZONA CHARLIE'S: Icahn Wins Initial Endorsement ------------------------------------------------- Financier Carl Icahn won an initial endorsement Wednesday from Nevada casino regulators in his bid to assume control of two bankrupt Las Vegas resorts. The state Gaming Control Board recommended the New York billionaire be allowed to temporarily participate in management at Arizona Charlie's pending full licensing. Icahn also was recommended to take over the Stratosphere hotel-casino. Icahn has a reputation for investing in undervalued properties, making immediate operational changes and selling out after turning quick profits. (Detroit News- 08/06/98) BOSTON CHICKEN: Faces Delisting ------------------------------- According to an article in The Wall Street Journal on August 7, 1998, Boston Chicken failed to meet a minimum bid price of $5 a share for 30 consecutive trading days. To be in the Nasdaq National Market listings, the stock needed to meet that requirement, and failed to meet it from mid-May to the end of June. Boston Chicken has 90 days to bring its stock price up before it faces delisting. After that it can ask for a waiver, or it can elect to be listed on Nasdaq's small-cap list. The company said it intends to remain on the Nasdaq National Market, but it could have trouble meeting its financial obligations if it can't restructure its senior debt and raise cash. DEBBIE REYNOLDS: Judge Ups The Bid ---------------------------------- U.S. Bankruptcy Court Judge Robert Clive Jones reopened bidding on the bankrupt resort, saying he was required by law to get the most money possible for the property. The World Wrestling Foundationn thought it had bought the hotel-casino at bankruptcy auction Wednesday for $9 million. On Thursday, representatives of the Stamford, Conn. company told Jones they had settled with some creditors, and their actual purchase price would be closer to $10,158,000. Orlando, Fla. time-share developer David Siegel, stung by the fact he was not among the creditors offered a deal by the WWF, then told Jones he would pay $10.5 million for the hotel, which includes 150 rooms and 43 time-share units. Jones said he was obligated to seek the highest bid to protect creditors, and would reopen the bidding process. The two groups exchanged bids until Siegel folded after the WWF offered $10.65 million. Siegel offered $14 million for the property last year, but the bankruptcy court rejected that offer at the time. FPA: Delisting Process Begins ----------------------------- The Nasdaq National Market has begun the process of delisting shares of FPA Medical Management, now worth just 12 1/2 cents apiece as the once high-flying company seeks bankruptcy protection. Nasdaq had previously given FPA until the end of September to meet listing requirements, but the company said yesterday that its July 19 bankruptcy filing had led Nasdaq to move more quickly. FPA, which is moving its headquarters from San Diego to Miami, said the current Nasdaq process could lead to delisting as soon as Tuesday. Meanwhile, two of FPA's business partners -- Foundation Health Systems Inc. and PacifiCare Health Systems Inc. -- said FPA's financial troubles had hurt their second-quarter results. FPA shares fell 3 1/8 cents to close at 12 1/2 cents. Los Angeles-based Foundation, one of California's largest managed health-care companies, said it would include a $50 million charge on property it leased to FPA in results it announces next week. Foundation sold some doctors' groups to FPA in 1996 but kept the related medical clinics, which it leased to FPA under an agreement that obligated FPA to eventually buy them. Santa Ana-based PacifiCare, another major player in managed care, said it had set aside $35 million in "provider insolvency reserves" during the quarter primarily to cover potential FPA-related shortfalls. PacifiCare has terminated many of its contracts with FPA. Known as a physician practice management company, FPA typically receives fixed payments from large HMOs such as Foundation and PacifiCare in exchange for providing all medical services to plan members. Growing through a series of acquisitions from 1994 to 1997, FPA's annual revenues jumped from about $18 million to more than $1 billion. But the company continued to lose money and ran into a cash crisis. (San Diego Union Tribune - 08/06/98) GULF RESOURCES: Order Approves Local Counsel to Trustee ------------------------------------------------------- In the case of Gulf Resources Corporation, debtor, Judge Leif M. Clark entered an order on July 20, 1998 approving the employment of Oppenheimer, Blend, Harrison & Tate, Inc. as local counsel to Charles Bearden, the Chapter 11 Trustee. HOMELAND HOLDING: Files Quarterly Report ---------------------------------------- Homeland Holding Corporation filed a quarterly report with the SEC for the quarter ended June 30, 1998. Net sales for the 12 weeks and 24 weeks ended June 20, 1998, increased 6.2 % and 3.6%, respectively, from the net sales of the corresponding period of 1997. Comparable store sales for the 12 weeks and 24 weeks ended June 20, 1998, increased by 0.4% and decreased by 2.1%, respectively, as compared to the corresponding periods of 1997. The Company's EBITDA for the 12 weeks ended June 20, 1998, declined to $5.0 million or 4.1% of net sales, from the EBITDA of $5.4 million or 4.7% of net sales for the corresponding period in 1997. For the 24 weeks ended June 20, 1998, EBITDA was $ 10.6 million or 4.3% of net sales compared to $11.1 million or 4.7% for the corresponding period of 1997. Net loss for the 12 weeks ended June 20, 1998, was $2.8 million or $0.57 per share compared to a net loss of $2.5 million or $0.53 per share for the corresponding period in 1997. Net loss for the 24 weeks ended June 20, 1998, was $5.2 million or $1.07 per share compared to a net loss of $4.8 million or $1.01 per share for the corresponding period in 1997. HOMEPLACE STORES: Salton/Maxim Seeks Allowance of Claim ------------------------------------------------------- Salton/Maxim Housewares, Inc. is a pre-petition creditor of HomePlace Stores, Inc., HomePlace Stores Two, Inc., HomePlace Management, Inc. and HomePlace Holdings, Inc. selling various housewares and appliances to the debtors. Salton's proof of claim is $1,303,328 net of the return of goods approved by the court. Salton is seeking entry of an order pursuant to Section 502 of the Bankruptcy Code allowing its pre-petiton proof of claim. HOSPITAL STAFFING SERVICES: Seeks Extension to File Plan -------------------------------------------------------- Hospital Staffing Services, Inc. and its debtor affiliates, are seeking an extension of the deadline to file a disclosure statement and plan or reorganization and extension of exclusivity period. The debtors request an extension to file their Disclosure Statement and Plan of Reorganization in order to have additional time to accurately and comprehensively review and revise their draft Chapter 11 Plan of Reorganization. The debtors seek an extension within which they may exclusively file a plan until August 17, 1998. The debtors anticipate filing a Joint Plan of Reorganization and have substantially completed a draft plan. Hospital Staffing Services of Tennessee Inc. is involved in extensive litigation with the Department of Health and Human Services, the Health Care Financing Administration and Wellmark, Inc. Trial preparation is in progress and settlement negotiations are underway, the outcome of which would substantially effect the debtors' joint plan of reorganization. The claims bar date in these cases is July 21, 1998. MOUNTAIN BOARD SPORTS: Case Summary & 20 Largest Creditors ---------------------------------------------------------- Debtor: Mountain Board Sports, LLC 1275 A Vapor Trail Colorado Springs, CO 80916 Type of business: Manufacture, Sale and marketing of mountain boards. Court: District of Colorado Case No.: 98-18651 Filed: 06/19/98 Chapter: 11 Debtor's Counsel: John C. Eastlack 2125 N. Academy Blvd. Colorado Springs, Co. 80909-1591 (719) 597-8085 Unsecured Creditors: Name Amount ---- ------ AFCO 7,326 AT & T Universal Business 7,033 Rhonda Abrams 6,000 Ackerly Airport 5,318 CCM 9,330 Circus 46,000 Cukjati Designs 22,122 Elk Creek Partners 37,452 Greenball Corp 17,248 IMG Outdoors 13,388 Industrial Gasket Inc. 9,893 Jantex 5,507 Johnson Bearing & Supply 6,115 James Lee 15,000 Jane Lee 10,000 Evan Lipstein 60,000 Joseph M. Manak, Esq. 26,216 Mikron Manufacturing 162,842 Minolta Business Systems 18,990 Surfer Publications 6,447 Western Spray Painting 135,555 Wilson sonsini Goodrich & Rosati 25,414 ONE PRICE CLOTHING: Reports Stock Option Agreement -------------------------------------------------- One Price Clothing Stores Inc. reports to the SEC a stock option agreement covering 80,000 shares par value $.01 per share of common stock. A full-text copy of the filing is available via the Internet at: http://www.sec.gov/Archives/edgar/data/0000812446-98- 000015.txt OWENS CORNING: Groupe Porcher Announces Joint Venture ----------------------------------------------------- On July 31, 1998, Owens Corning announced the formation of a new joint venture, which will acquire the Company's yarns and specialty materials business. The joint venture partner in the new company is Groupe Porcher Industries, Badinieres, France. Owens Corning will receive approximately $550MM in cash and will continue to participate as a 49% partner in the new entity. Owens Corning has been evaluating the disposition of its yarn business, electing the joint venture route as the best value for the company and its shareholders. While Owens Corning has transferred certain proprietary technology to the venture, this joint venture structure will permit Owens Corning to protect both its yarns technology and its aligned composites business intellectual property. The ability to safeguard Owens Corning's intellectual property and to continue to participate in the yarns market were significant factors in the decision. The joint venture agreements were signed on July 31, 1998. Closing of the transaction is anticipated on or before September 30, 1998. PAYLESS CASHWAYS: Court Enters Final Decree ------------------------------------------- The court entered a Final Decree on July 15, 1998 in the case of Payless Cashways, Inc., debtor. PETRO UNION: Registration Statement Filed with SEC -------------------------------------------------- Horizontal Ventures, Inc. has registered for offer and sale, on behalf of certain of its security holders, a total of 679,735 shares of the Company's no par value common stock. The Common Stock offered hereby is being sold for the accounts of these certain security holders and the Company will not receive any proceeds from the sale of Common Stock by the Selling Security Holders. No Selling Security Holder is required to sell. This prospectus which is part of a registration statement on file with the Securities and Exchange Commission was filed pursuant commitments made to the Selling Security Holders. A full-text copy of the filing is available via the Internet at: http://www.sec.gov/Archives/edgar/data/0001001348-98- 000081.txt REDHOOK ALE: Selling Its Beer-Making Equipment ---------------------------------------------- Redhook Ale Brewery Co. said yesterday it will sell the beer-making equipment at its original Fremont facility. Redhook, the Seattle-based specialty brewer, suspended producing beer at Fremont and said yesterday there's little prospect of resuming brewing there since it has unused capacity at its facilities in Woodinville and Portsmouth, N.H. The company said it will keep its Trolleyman Pub open and will expand its retail operations there. Redhook will sell production equipment, but took a $5.2 million charge against earnings to reflect its reduced value. That produced a second-quarter loss of $3.3 million, or 43 cents a share, compared with a profit of $71,000, or 1 cent a share, a year ago. Sales were roughly flat at $9.9 million. But the company said operating income was nearly double the year-ago quarter. (Seattle Post-Intelligencer; 08/05/98) RIVERWOOD HOLDING: Quarterly Report ----------------------------------- Riverwood Holding's net sales in the second quarter of 1998 increased by $11.9 million, or 4.1 percent, compared with the second quarter of 1997. The Company's gross profit for the second quarter of 1998 increased $20.9 million, or 59.3 percent, to $56.3 million from $35.3 million in the second quarter of 1997. The company's net sales in the first six months of 1998 increased by $10.2 million, or 1.8 percent, compared with the first six months of 1997. Net Sales in the Coated Board business segment increased $19.1 million, or 3.7 percent, in the first six months of 1998 to $531.2 million from $512.1 million in the first six months of 1997. The Company's income from operations in the second quarter of 1998 increased by $10.1 million, to $10.3 million from $0.2 million in the second quarter of 1997, while operating margin as a percent of Net Sales increased to 3.4 percent from 0.1 percent. (Loss) from Operations in the Containerboard business segment increased $9.8 million to a loss of $2.7 million in the second quarter of 1998 from a (Loss) from Operations of $12.5 million in the second quarter of 1997. The company's income from operations in the first six months of 1998 increased by $19.1 million to $17.6 million from a loss of $1.5 million in the first six months of 1997, while operating margin as a percent of Net Sales was 3.1 percent. SINGER: Guarded Optimism With Improved Financial Results -------------------------------------------------------- Singer on Friday reported a narrower-than-expected second- quarter net loss, aided by its restructuring plan, raising hopes for the sewing machine giant's recovery from three years of weak performance. Singer posted a net loss of $2.3 million, or 4 cents per share, on revenues of $311.6 million for the quarter, compared with net income of $12.8 million, or 25 cents per share, on revenues of $280.8 million a year ago. On July 23, Singer had forecast posting a net loss of $3 million for the second quarter following stiff losses for the prior two quarters. The company said the year-ago results are not fully comparable since they did not include results of G.M. Pfaff AG, the German sewing machine company Singer acquired Dec. 31, and were not influenced by the substantial devaluations that took place in Asia in the second half of 1997. Singer said every geographic area and business line was profitable at the operating income level, including the United States and Europe, which experienced substantial turnarounds from year-ago losses. Gross margins and operating margins improved from a year ago. Stephen H. Goodman, president and chief executive officer of Singer, said the company's increased emphasis on balance sheet management is also producing results. Comparing balance sheet data in the first half of the year, inventories and receivables were reduced by 14 percent, or more than $130 million. Total debt is down by more than $115 million. "Singer is recovering after significant losses in the fourth quarter of 1997 and the first quarter of this year," Goodman said. "We remain profitable in Asia, including the important Thailand market, despite the substantial devaluations and economic turmoil there." "We are making meaningful progress in solving operating problems at our consumer products business in the United States, which has been profitable for the last two quarters. Additionally, Pfaff is making important earnings contributions in the U.S. and Europe," he said. He added, "Importantly, we continue to expect to be profitable for the year as a whole." Singer, the world's largest consumer sewing machine maker and a leading industrial machine company after the acquisition of Pfaff, launched a restructuring plan in December. The plan included cutting one-fourth of its work force, or 5,968 jobs, and bringing back Goodman, a former treasurer for Singer, as CEO. SUNBEAM: Denies Working with Dunlap ----------------------------------- Sunbeam has announced it will not be able to report its second- quarter financial results until late September. The consumer appliance company said its audit committee has determined it will take until that time to issue restated financial statements for 1997 and possibly 1996. Sunbeam is the target of a government investigation of alleged accounting irregularities. Sunbeam says former chairman and CEO Al Dunlap and former chief financial officer Russell Kersh have resigned from its board of directors. Sunbeam and the former executives have agreed not to take legal action against each other for six months. Sunbeam says it will pay accrued vacation pay of $52,000 to Dunlap and $68,000 to Kersh, but no severance or other payments to either man. While Sunbeam said it is not cooperating with Dunlap and Kersh to develop legal defense strategies, the Denver Post, reported on August 6, 1998, that ousted chairman Al Dunlap and Sunbeam Corp. are working together to fight shareholder lawsuits and cooperate in an investigation into the company's accounting practices. Maureen Bailey, a spokeswoman for Sunbeam, said the company had no immediate comment. According to the Denver Post, Dunlap and the company will share information and legal strategies with respect to the shareholder lawsuits filed after Dunlap was dismissed and regarding the ongoing investigation by the Securities and Exchange Commission. SYQEST TECHNOLOGY: To Layoff 950, Cut Manufacturing --------------------------------------------------- Computer disk-drive maker Syquest Technology Inc. will cut 950 workers, or about 85 percent of its work force, and end manufacturing at a California plant in a bid to cut costs in half. Syquest, known as a pioneer of popular removable disk-drives and cartridges, said in a statement issued late Thursday that conditions in the personal computer and data storage business had forced it into the sweeping restructuring. As well as ending manufacturing at its Fremont, Calif., plant, Syquest said it will scale back spending on marketing and research and make other cost-cutting moves at its Penang, Malaysia, manufacturing plant. The company said sales for the quarter ended June 30 will be slightly below those of the prior quarter, and operating losses slightly higher. For its second fiscal quarter ended March 31, Syquest had an operating loss of $29.9 million on sales of $47 million. It expects sales to fall further in its fourth quarter ending Sept. 30, and will post charges related to the restructuring. Syquest expects revenues to show seasonal strength in the quarter ended Dec. 31. Syquest said its restructuring will reduce its expenses to less than half their previous level. The company said on July 20 it had hired investment firm CIBC Oppenheimer to help it review strategic alternatives, such as partnerships, ventures or acquisitions. Syquest stock fell about 28 cents to 56 cents in morning trading Friday on Nasdaq. TCC INDUSTRIES: Quarterly Report -------------------------------- TCC Industries Inc. reports a net profit for the three months ended June 30, 1998 of $452,000 on revenue, including proceeds from sale of securities and loans, of $67,923,000 as compared to a loss of $888,000 on revenue of $2,532,000 for the same period in 1997. On September 19, 1997 the Company sold substantially all of the assets of its manufacturing segment for $6,000,000 in cash and the assumption of its liabilities by the purchaser and reported a loss on sale of $457,000. Consolidated gross profit from continuing operations increased $1,699,000 to $2,176,000 in the second quarter of 1998 when compared to $477,000 for the same period in 1997. The Company reported a net loss for the six month period ended June 30, 1998 of $897,000 on revenue, including proceeds from sale of securities and loans, of $69,787,000 as compared to a loss of $1,121,000 on revenue of $4,633,000 for the same period in 1997. UNISON HEALTHCARE: Seeks Order Fixing Bar Date ---------------------------------------------- The debtors, Unison Healthcare Corporation, and related proceedings, requests that the court establish a general proof of claim filing deadline of September 15, 1998. UNITED HEALTHCARE: Merger in Jeopardy ------------------------------------- The announcement by United Healthcare Inc. that it would take a $900 million charge to realign its business has raised questions about its proposed merger with Humana Corp. and spooked shareholders of both companies. The Kentucky Department of Insurance abruptly canceled a hearing on the merger of the two giant health maintenance organizations that was scheduled to begin Friday. Humana issued a statement saying it would work with United's management to understand the problem and its potential effect on the proposed merger. Shareholders of both companies are scheduled to vote on the deal Aug. 27. United Healthcare's share price closed sharply lower, after the managed care company reported a $565 million after-tax loss in the second quarter. The reported loss included a $900 million restructuring charge. On the positive side, the Minneapolis-based company posted record revenues of $4.2 billion in the second quarter and record health plan membership of 6.7 million. United Healthcare closed down 15 at 37 7/8, with more than 20 million shares traded on the New York Stock Exchange. WANG LABORATORIES: Changes Fiscal Year End ------------------------------------------ The Board of Directors of Wang Laboratories Inc. voted on July 22, 1998 to change the company's Fiscal Year End from June 30 to December 31. WELCOME HOME: Court Sets Hearing on Disclosure Statement -------------------------------------------------------- Judge Cornelius Blackshear set a hearing to consider the approval of the Disclosure Statement of the debtor, Welcome Home Inc., a/k/a The Glorious Nest, Home Again, f/k/a Cape Craftsman, Inc. on August 27, 1998. August 24, 1998 is fixed as the last date for filing and serving written objections to the disclosure statement. WESTERN FIDELITY: Objects to Committee's Conversion Motion ---------------------------------------------------------- Western Fidelity Funding objects to the court entering an order granting the motion of the Creditors' Committee to convert the case to a Chapter 7. The debtor states that it has created a viable business with a positive cash flow. The debtor states that the proposed plan will reorganize a feasible business with little likelihood of reappearing in court. The debtor states that the time taken to reorganize its administration and business has been necessary and reasonable. The debtor states that to turn around a business the size of the debtors' operations cannot be done quickly. The prejudice to creditors due to the accumulated operating losses is far outweighed by the benefit they will receive in reorganization. The debtor believes a plan is feasible which will more than double the cash payout to creditors over a liquidation, and leave the creditors with a significant share of the reorganized debtor after payout. Continuation of the case to reorganization is simply not prejudical to the interests of the creditors, and is demonstrably beneficial to the estate. ********* 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 * * *