/raid1/www/Hosts/bankrupt/TCR_Public/981020.MBX
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, October 20, 1998, Vol. 2, No. 205
Headlines
2CONNECT EXPRESS: Court Confirms Plan of Reorganization
AL TECH: Universal Stainless Announces Letter of Intent
APS HOLDING: Court Ok's Future Sales -- Without Approval
AMERICAN PAD & PAPER: Amended Revolving Credit Agreement
ANDOVER APPAREL: Files Annual Report With SEC
ANESTHESIA SOLUTIONS: Seeks Extension of Exclusivity
ARROW AUTOMOTIVE: Files Voluntary Chapter 11 Petition
CAI WIRELESS: Files Plan With SEC
CENTENNIAL RESOUCES: Nod For $10.5 Million Interim DIP
CRIMI MAE: Berman, DeValerio Files Class Action
FULLER-AUSTIN: Applies To Retain Richards, Layton
GILA MONSTERS: Creditors Pursue Better Deal
HARRAH'S JAZZ: Court Confirms 3rd Amended Plan
HAYES CORP: Reaffirms Commitment To Support Analog Modem
HEARTLAND WIRELESS: Common Stock De-listed By Nasdaq
IMC MORTGAGE: $33 Million Credit and Seeking Sale
KIA MOTORS: Hyundai Wins Bidding
LANCASTER MALT: Files Chapter 11 Petition
MAIDENFORM: Seeks Employment Agreements
MARVEL ENTERTAINMENT: Plan Consummated October 19, 1998
MEDICAL RESOURCES INC: Stock Ownership Reported
MILFORD RESOLUTION: Notice of Confirmation Order
MITA INDUSTRIAL: Relatives Received 1.2 Billion Yen
OXFORD HEALTH PLANS: Reports $10.4 Million Purchase
R&S/STRAUSS: Exclusivity Extended 60 Days By Agreement
RIVER OAKS: Reaches Agreement With Primary Lender
SEARCH FINANCIAL: Court Approves Disclosure Statement
SOUTHEAST BANKING: Trustee Suspends Creditor Distribution
UNISON HEALTHCARE: Order Grants Severance Packages
WELCOME HOME: Designation of Effective Date
Meetings, Conferences and Seminars
*************
2CONNECT EXPRESS: Court Confirms Plan of Reorganization
-------------------------------------------------------
2Connect Express, Inc. (OTC Bulletin Board: CNTCQ)
announced that the Bankruptcy Court, Southern District of
Florida, executed an Order confirming 2Connect's Plan of
Reorganization. The Effective Date of the Plan of
Reorganization will be October 26, 1998, 10 days following
confirmation.
As previously disclosed, 2Connect entered into an agreement
with Sterne, Agee & Leach, Inc. on August 27, 1998 whereby
Sterne Agee will, as of the Effective Date of the Plan of
Reorganization, acquire out of bankruptcy 100% of the
equity interests of 2Connect and 2Connect will retain the
Coral Square store lease and certain store fixtures. In
consideration for such acquisition, Sterne Agee will make a
new value contribution to the bankruptcy estate for
the benefit of 2Connect's creditors in the amount of
$175,000 which funds are currently in escrow. To effect
this transaction and in accordance with the Plan of
Reorganization, as amended, upon the Effective Date, all of
the current and existing Common Stock of 2Connect will be
forever extinguished and canceled and 2Connect will issue
new shares of Common Stock to Sterne Agee which shall
constitute 100% of the issued and outstanding shares.
Consequently, the existing shareholders of the Common Stock
of 2Connect will not retain any interest in the post-
bankruptcy estate for their extinguished and canceled
interests.
2Connect filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code on January 12, 1998,
and subsequently closed all of its stores except the store
at Coral Square Mall in Coral Springs, Florida.
2Connect has liquidated most of its assets and has reduced
overhead to skeleton levels. The Coral Square store has
operated since June 16, 1998, under a Management Agreement
with Bobby Allison Cellular Systems of Florida whereby
Bobby Allison is responsible for all expenses related to
that store and is entitled to any profits or losses that
it generates.
AL TECH: Universal Stainless Announces Letter of Intent
-------------------------------------------------------
Universal Stainless & Alloy Products, Inc. (Nasdaq:USAP)
today announced results for the third quarter and nine-
month period ending September 30, 1998. The Company also
announced that it has signed a letter of intent to acquire
the assets of AL Tech Specialty Steel Corporation.
Additionally, the Company announced that it is initiating
an open market share repurchase program.
For the 1998 nine month period, net income was $4,328,000,
versus net income of $5,611,000, or $0.88 per diluted
share, in the same period last year. Net sales for the
nine month period were $59,489,000 versus $61,661,000 a
year ago.
Mac McAninch, President and Chief Executive Officer of
Universal Stainless stated, "Although we expect current
industry conditions to continue, we have begun to see an
increase in orders from the power generation
and aerospace markets, and expect demand from our service
center customers to slowly improve based on current
inventory levels. Despite this difficult environment, we
are confident that we will be solidly profitable in the
fourth quarter. Based on early indications, we expect
earnings per diluted share to be in the range of 10 to 12
cents."
Separately, the Company announced that it has signed a
letter of intent to acquire the assets of AL Tech Specialty
Steel Corporation in a transaction valued at approximately
$38 million, of which approximately $24 million is
related to the acquisition of accounts receivable and
inventory. Funding for the transaction will consist of a
note approximating $17 million, assumed
liabilities of $8 to $10 million, and cash between $11 and
$13 million. AL Tech, headquartered in Dunkirk, New York,
is a producer of finished specialty steel products
including bar, rod and wire, with sales of $84 million for
the twelve months ended September 30, 1998. Universal, a
producer of semi-finished and certain finished specialty
steels, had net sales of approximately $79 million for the
same period. AL Tech filed a voluntary petition for
reorganization under Chapter 11 of the Federal Bankruptcy
Code on December 31, 1997 related to the earlier
bankruptcy filing of its parent, Sammi Steel Co., Ltd. of
Korea, under Korean insolvency laws.
The potential acquisition of AL Tech is consistent with
Universal's strategy to expand upon its product
capabilities, maximize the use of its core assets,
which include its primary melt shop, electro slag and
vacuum arc remelting facilities and universal rolling mill,
and increase its manufacture of finished products. Upon
completion of the acquisition, Universal's revenues will
nearly double, and finished specialty steel products will
represent more than 50% of its revenue mix compared with 9%
year to date. The addition of AL Tech also will
substantially broaden Universal's customer base.
The transaction is subject to a number of conditions,
including approval of AL Tech's plan of reorganization by
the bankruptcy court.
Universal Stainless & Alloy Products, Inc., headquartered
in Bridgeville, Pa., manufactures and markets semi-finished
and finished specialty steels, including stainless steel,
tool steel and certain other alloyed steels. The Company's
products are sold to rerollers, forgers, service centers
and original equipment manufacturers, which primarily
include the power generation and aerospace industries.
APS HOLDING: Court Ok's Future Sales -- Without Approval
--------------------------------------------------------
The court has approved APS Holding Corp.s' procedures
governing sales of some or all of its Big A stores and
Installers' Service Warehouses either alone or in small
groups without need to seek court approval for each
transaction unless there are objections. APS told the
court it has received offers for some of the stores from
parties unable to purchase large numbers of stores or other
assets in a single transaction. As a result, the greatest
possible value would be achieved if the stores, including
inventory, receivables, and fixed assets, could be sold
alone or in small groups, the auto parts retailer asserted.
The court approved APS' motion despite objections from the
U.S. Trustee and the unsecured creditors' committee.
(Federal Filings Inc. 10-19-98)
AMERICAN PAD & PAPER: Amended Revolving Credit Agreement
--------------------------------------------------------
On September 30, 1998, American Pad & Paper Company issued
a press release announcing that its lending group,
consisting of 20 financial institutions, have amended the
original revolving credit agreement that matures in July,
2001. This agreement provides the Company with a $300
million revolving credit facility with the usual and
customary covenants and restrictions. It eliminates all
prior defaults and allows the Company to reclassify over
$270 million from short-term debt back to long-term debt.
On October 7, 1998, the Company issued a press release
announcing an update of its restructuring plans designed to
reduce costs, increase margins, improve customer service,
and better balance manufacturing capacity to market
demands. Following the Company's August 17, 1998
announcement that it will consolidate it continuous forms
business, American Pad & Paper is now moving forward with
other major rationalization plans that should be completed
in 1999. These plans include plant and warehouse
consolidations, equipment rationalization moves,
plant/product changes and the addition of new distribution
centers. This restructuring plan is expected to net an
18%reduction in space and net a 7% reduction in its
workforce, primarily from manufacturing. These actions will
impact most plant sites and will require restructuring
charges as the Company previously indicated in July.
On October 14, 1998, the Company issued a press release
announcing the resignation of Timothy E. Needham, President
and Chief Operating Officer. Mr. Needham will finalize his
duties on October 30, 1998. Mr. Needham will continue
to serve as a consultant to the Company for a period of
time.
ANDOVER APPAREL: Files Annual Report With SEC
---------------------------------------------
On June 3, 1998 the Company changed its name from Andover
Togs, Inc. to The Andover Apparel Group, Inc.
Net sales for the three months ended August 31, 1998 were
$5,520,000, an increase of $1,699,000 or 44.5% from 1997
net sales of $3,821,000 in the comparable period in 1997.
The net loss was $315,000 for the three months ended August
31, 1998. The increase in sales is primarily attributable
to sales resulting from the Company's Rugrat'r' sales agent
agreement which the Company entered into during its second
fiscal quarter and an increase in sales of the Company's
other products to the Company's largest customer as well as
to new customers.
The company reported a net loss of $1.2 million on net
sales of $13,232,00 for the nine months ended August 31,
1998, an increase in net sales of $1,115,000 or 9.2% from
$12,117,000 in the comparable period in 1997.
ANESTHESIA SOLUTIONS: Seeks Extension of Exclusivity
----------------------------------------------------
The debtor, Anesthesia Solutions, Inc. is seeking to extend
the exclusivity periods for filing a plan and soliciting
acceptances, asking until February 14, 1999 and April 15,
1999 respectively. If no objections and request for a
hearing are filed before November 5, 1998, the Court will
act on the motion without a hearing.
ARROW AUTOMOTIVE: Files Voluntary Chapter 11 Petition
-----------------------------------------------------
Arrow Automotive Industries, Inc. (ASC:AI) announced that
it has filed a voluntary petition for reorganization under
Chapter 11 of the United States Bankruptcy Code. The
petition was filed in the United States Bankruptcy Court
for the District of Massachusetts, Western Division.
Under Chapter 11, Arrow intends to continue to operate
under court protection from creditors while seeking to work
out a plan of reorganization. Arrow's existing lenders have
agreed, subject to bankruptcy court approval, to provide
funding to continue operations.
Arrow stated that negotiations are continuing with Motorcar
Parts and Accessories, Inc., Torrance, California
(NASDAQ:MPAA) for the purchase of Arrow's electrical parts
division and its clutch and crankshaft re-manufacturing
divisions, which Arrow estimates produced approximately 70%
of its net sales in fiscal 1998. Arrow expects that it may
receive competing bids from other prospective purchasers
following its Chapter 11 filing. Arrow noted, however,
that there can be no assurance that such negotiations
and/or bidding process will be successful or that, if
successful, the resulting transaction will form the basis
of a Plan of Reorganization satisfactory to Arrow's
creditors. It is anticipated that, concurrently with the
sale of its electrical parts, clutch and crankshaft re-
manufacturing divisions, Arrow will pursue the sale or
other divestiture of its remaining business assets,
including the various other mechanical product lines, the
inventory and equipment relating to those product lines,
and its real estate.
"Arrow's decision to seek protection under Chapter 11 of
the Bankruptcy Code is necessary to permit a restructuring
directed toward preserving our electrical parts, clutch and
crankshaft re-manufacturing businesses," said Jim
L. Osment, Arrow's President and Chief Executive Officer.
Arrow said that its filing was a result of losses incurred
during its 1998 fiscal year and the first quarter of its
current fiscal year, as well as pressure imposed by its
principal lenders. For the nine months ended March 28,
1998, Arrow reported a net loss of $3,448,000 on net sales
of $64,056,000. Arrow estimates additional losses of over
$2,800, 000 for the fourth quarter of fiscal 1998, and
expects that the first quarter of 1999 will show a loss as
well.
Arrow remanufactures a variety of replacement parts for
domestic and imported vehicles for distribution throughout
the United States and Canada.
CAI WIRELESS: Files Plan With SEC
---------------------------------
CAI Wireless Systems Inc. filed a current report, Form 8k
with the SEC.
The debtor's reorganization plan was confirmed by the
Bankruptcy Court on September 30, 1998 and consummated
October 14, 1998. In connection with the consummation of
the Plan, CAI has issued and outstanding 15,000,000 shares
of common stock, par value $.01 per share, and has reserved
1,575,000 shares of Common Stock for issuance upon the
exercise of certain options granted to management and
warrants issued to BT Alex. Brown Incorporated, CAI's
financial advisor, pursuant to the Plan.
A full-text copy of the filing is available via the
Internet at:
http://www.sec.gov/Archives/edgar/data/0000914749-98-
000015.txt
CENTENNIAL RESOUCES: Nod For $10.5 Million Interim DIP
------------------------------------------------------
Centennial Resources Inc. received interim approval to
borrow up to $10.5 million under a $15 million debtor-in-
possession credit agreement with Bankers Trust Co., as the
agent for certain pre-petition lenders, as well as
permission to use cash collateral, pending a final hearing.
The court concluded that the coal mining and marketing
concern's need for financing was critical and immediate.
The order states that the interim funds will consist of
$4.5 million in revolving loans and a $6 million term loan
that will be distributed pursuant to a weekly budget.
Centennial's pre-petition lenders, to whom the company owes
about $77.25 million, have consented to the use of cash
collateral and the priming of their liens by the DIP loans,
provided that, among other things, the company doesn't use
the professional fee carve-out to contest or object to the
validity of the pre-petition obligations. (Federal Filings
Inc. 10-19-98)
CRIMI MAE: Berman, DeValerio Files Class Action
-----------------------------------------------
Berman, DeValerio & Pease LLP has filed a Class
Action against certain officers and directors of CRIIMI MAE
INC. (NYSE: CMM) in the United States District Court for
the District of Maryland (Southern Division). The suit is
brought on behalf of all persons or entities who purchased
the common stock of CRIIMI MAE between June 30, 1998 and
October 5, 1998, inclusive.
The complaint alleges that during the Class Period certain
officers and directors of CRIIMI MAE -- a commercial real
estate investment trust -- violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, by
among other things, misrepresenting CRIIMI MAE's true
financial condition and operating performance.
Specifically, the Complaint alleges that the defendants
misrepresented that CRIIMI MAE's financial condition as
strong and that it was largely insulated from market
fluctuations. In fact, on September 25, 1998,
defendants told the market that CMM would meet analysts'
earnings expectations for the third quarter of 1998 and
would sustain dividend levels. In addition, defendants
claimed that, despite a volatile market, the Company would
be able to meet all collateral calls. Despite this
assurance, only ten days later, defendants shocked the
market by announcing that the Company had filed for
bankruptcy protection due to its inability to meet
collateral calls from vendors. As a result, trading in the
Company's securities has been halted. The Complaint alleges
that members of the Class purchased their CRIIMI MAE
securities at artificially inflated prices.
FULLER-AUSTIN: Applies To Retain Richards, Layton
-------------------------------------------------
Fuller-Austin Insulation Company is seeking court
authorization to employ and retain Richards, Layton &
Finger, PA as Co-Counsel to the Legal Representative. The
firm will charge between $135 and $250 per hour for its
attorneys' services in this case. The firm will provide
legal advice with respect to the Legal Representative of
the debtor, provide legal advice with respect to
confirmation of a plan of reorganization, and appear in
court to protect the interests of the Legal Representative.
GILA MONSTERS: Creditors Pursue Better Deal
-------------------------------------------
The Arizona Daily Star reports on October 15, 1998 that
Tucson businesses have banded together to chase money the
bankrupt Tucson Gila Monsters hockey team owes them.
Poor results last year - on the scoreboard and at the
turnstiles - left the Gila Monsters skating on thin
financial ice, resulting in the team's filing for
Chapter 11 bankruptcy protection Dec. 22.
On Sept. 8 the Gila Monsters filed a plan for
reorganization that calls for merchants owed $170,591 in
unsecured debts to receive 20 cents on the dollar.
Annoyed at the settlement amount offered and the pace of
the case, 11 area merchants banded together to form a
creditors' committee, a move that was approved by the U.S.
Bankruptcy Court Sept. 25.
Tucson attorney Rob Charles of Lewis & Roca is representing
the creditors' group. Charles said the team's July monthly
operating report shows the organization was $4,130.07 in
the hole, he said. Yet the team proposed to pay the West
Coast Hockey League $100,000 in three annual installments;
priority creditors, which include taxes, $5,200;
attorneys and other professional fees about $55,000; and
unsecured creditors $34,118.20.
HARRAH'S JAZZ: Court Confirms 3rd Amended Plan
----------------------------------------------
On October 13, 1998, the court confirmed the third amended
joint plan of reorganization under Chapter 11 of the
Bankruptcy Code, filed by the debtors, together with the
plan proponent Harrah's Entertainment, Inc. On October 19,
1998 at 9:45 am the Bankruptcy Court will conduct a hearing
on approval of the Plan Documents.
HAYES CORP: Reaffirms Commitment To Support Analog Modem
--------------------------------------------------------
Hayes Corporation (Nasdaq:HAYZQ, formerly HAYZ) today
announced that during the third quarter, the Company
recorded an increase in modem sales for the first
time this year. In addition, Hayes reaffirmed its
commitment to support its analog modem business.
"We are pleased to say that in an industry where modem
manufacturers continue to suffer from lagging sales, Hayes
has increased its modem sales in the third quarter by six
percent over the previous quarter," said Steve Mank, Hayes'
Chief Operating Officer. "We contribute part of this
success to recent ISP acceptance and integration of V.90
technology, which resulted in overall increased demand for
Hayes' V.90 products."
"Industry analysts have suggested that there will only be
three to four successful analog modem suppliers by 1999,
and Hayes is well-positioned to be one of them," continued
Mank. "While Hayes remains committed to developing and
delivering emerging broadband technologies, we pledge to
continue to play an active role in the analog modem market
by aggressively engineering, producing, selling, and
supporting analog modems as long as the market demands
them."
Shirley Borghi, Hayes' Senior Director of Strategic
Marketing, added, "We worked very closely with our channel
partners during September and implemented an extremely
aggressive distribution promotion. This promotion, which
was designed to benefit everyone from our channel partners
to the end-user, was so well accepted that we have extended
the promotion through the month of October."
HEARTLAND WIRELESS: Common Stock De-listed By Nasdaq
----------------------------------------------------
Heartland Wireless Communications, Inc., America's largest
wireless cable company, was notified by The Nasdaq Stock
Market, Inc. that effective at the close of business on
October 15, 1998, Heartland's common stock will no longer
be listed on The Nasdaq Stock Market.
The company previously had disclosed in its public filings
that the listing of its common stock was under review by
Nasdaq for failing to meet minimum closing bid and net
tangible asset requirements. Heartland had requested a
waiver of these requirements pending the consummation of
its previously announced proposed plan of reorganization.
Yesterday, Nasdaq informed the company that a panel had
determined not to grant the requested waiver. The company
may request Nasdaq to review the panel's decision within 15
days of the date of the decision. At this time, however,
the company does not expect that it will request such a
review.
Heartland believes that its common stock currently may be
eligible to trade on the OTC Bulletin Board, but only until
the company files its plan of reorganization with a U.S.
bankruptcy court, which the company has stated that it
intends to file on or before November 13, 1998.
The company may reapply for a Nasdaq listing if the
company's plan of reorganization is consummated and if the
company meets the criteria for such listing at that time.
There can be no assurance that the company's plan of
reorganization will be successful or that the plan would
allow the company to meet these criteria.
IMC MORTGAGE: $33 Million Credit and Seeking Sale
-------------------------------------------------
IMC Mortgage Company reached an agreement on October 15,
1998 for a $33 million standby revolving credit facility
with Greenwich Street Capital Partners, II, L.P., and
certain affiliates ("Greenwich Street").
The facility is available to provide working capital for a
period of up to 90 days, during which time the Company
intends to explore financial and strategic
alternatives including the possible sale of the Company.
The terms of the new facility result in substantial
dilution of existing common stockholders' equity
equating to a minimum of 40%, up to a maximum of 90%, on a
fully diluted basis, depending on (among other things)
when, or whether, a change of control transaction occurs.
The Company has also entered into inter-creditor
arrangements with its three largest warehouse and residual
certificate lenders which have agreed to a "standstill"
keeping their facilities in place for up to 90 days in
order for the Company to explore its financial
alternatives. In addition, the Company has entered into a
forbearance and inter-creditor agreement with respect to
its $95 million revolving bank credit facility, which has
matured by its terms.
In view of, among other things, reductions in available
cash and credit resources, the Company has retained
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ")
to advise the Company as to financial and strategic
alternatives. The Company is actively working with DLJ to
seek a long-term investor in the Company or a sale or
similar transaction resulting in a change of control of the
Company.
Pursuant to the $33 million Greenwich Street facility,
Greenwich Street received a $3.3 million commitment fee,
and exchangeable preferred stock representing the
equivalent of 40% of the fully diluted equity of the
Company, for making the facility available to the Company.
The Greenwich Street facility provides that under certain
circumstances, upon the Company entering into a definitive
agreement which effectuates a change of control of the
Company, Greenwich Street may elect either to receive (a) a
repayment of the facility, plus accrued interest at 10% per
annum, and a take-out premium or (b) additional preferred
stock.
The Company has historically sold treasury securities short
to hedge against interest rate movements affecting the
mortgage loans held for sale. Over the last several weeks
the Company has paid approximately $40 million net to
cover margin calls on short treasury positions. The Company
has now closed its short treasury positions, and is not
currently hedging its mortgage loans held for sale.
Payments to close short treasury positions since the end of
the prior fiscal quarter ended June 30, 1998, have totaled
approximately $47.5 million net. During the same period,
the Company has paid approximately $12 million to cover
margin calls from its significant warehouse and interest-
only and residual certificate lenders based on revaluation
by these lenders of their underlying collateral position.
The Company does not expect to meet earnings expectations
for the quarter ended September 30, 1998, and presently
anticipates the possibility of a third quarter loss.
KIA MOTORS: Hyundai Wins Bidding
--------------------------------
Outbidding Ford Motor Co. and two domestic competitors,
Hyundai Motor Co. was tentatively selected today as the
winner in an auction to take over bankrupt Kia Motors Corp.
The selection of Hyundai, South Korea's No. 1 car maker,
however, is subject to approval by creditor banks, who have
made no secret of their hope that cash-rich Ford would win
the auction.
Hyundai's bid beat offers by the U.S. auto giant and South
Korea's Daewoo Motors Co. and Samsung Motors Inc., Kia
officials said.
The government had backed Ford in the hope it would pump
much needed hard currency into the country and boost
foreign investor confidence in its economy. But Kia
officials said Ford was disqualified because it offered to
buy the stock of Kia's commercial vehicle arm, Asia Motors,
at a price lower than its face value of $3.78 per share.
The state-run Korea Development Bank, representing about 50
creditor banks, said it would take about a week to decide
whether to accept Hyundai's bid.
Meanwhile, Hyundai president Chung Mong-kyu told a news
conference his company would seek investments from Ford and
other foreign and domestic auto makers in its takeover bid.
Chung said Hyundai demanded that creditors write off $5.5
billion of Kia's debt of $8.4 billion. Hyundai already
owes its own creditors $5.58 billion, compared with assets
of $6.79 billion. Kia officials said the selection of
Hyundai was made by two neutral, outside firms Anderson
Consulting Co. of the United States and Banque Nationale de
Paris of France.
Kia officials said Hyundai submitted the best combination
of requested debt reductions and stock price bids for Kia
and Asia Motors. Without giving any reasons, Kia officials
said they decided not to disclose details of the auction,
including debt write-offs. The auction was the third
since August "Now, it's up to creditor banks whether to
award the bidding to Hyundai or Ford," Lee Jong-dae, Kia's
chief planning official, said.
The national Yonhap news agency, quoting unidentified
sources, said creditor banks have reservations about the
amount of debt write-off demanded by Hyundai.
In two previous failed auctions, creditor banks offered to
write off $2.1 billion of Kia's $8.4 billion debt. But the
potential buyers all demanded further debt reduction.
LANCASTER MALT: Files Chapter 11 Petition
-----------------------------------------
LANCASTER MALT BREWING CO., which brews beer and operates
and pub and restaurant at West Walnut and Plum streets, has
filed for Chapter 11 bankruptcy protection.
The filing Monday in U.S. BANKRUPTCY COURT in Reading,
follows the Chapter 11 filing earlier this month of
LANCASTER MALT PROPERTY ASSOCIATES, which owns the
building which houses the brewery and restaurant.
The company will continue to operate while it reorganizes
its finances, said attorney Dale Lapp. The filing shields
the company from its creditors during the restructuring.
In the court papers, both entities listed assets of
$500,000 to $1 million. The brewing company listed debts
of $750,000 to $1.5 million, while the real estate
partnership listed debts of $500,000 to $1 million.
(Intelligencer Journal Lancaster - 10/15/98)
MAIDENFORM: Seeks Approval of Employment Agreements
---------------------------------------------------
Maidenform Worldwide, Inc. et al., is seeking court
approval authorizing the debtors to enter into employment
and option agreements with Paul Mischinski and Maurice
Reznik. Under the agreement, Mischinski, President and
CEO, will receive a base salary starting at $325,000 per
year an annual bonus, based upon certain financial targets,
severance pay, and options to purchase 4% of the
reorganized Company's common stock. Reznik, Executive VP
of product and customer management is to receive a base
salary starting at $295,000, an annual bonus, severance
pay, and options to purchase 1.5% of the reorganized
company's common stock.
Securing the employment of these executives is an important
element of the debtors' reorganization efforts. The debtor
states that the terms of the employment agreements are
reasonable and competitive within the industry. The
employment agreements have been approved by the debtors'
independent Board of Directors and the debtors' post-
petition lending group.
MARVEL ENTERTAINMENT: Plan Consummated October 19, 1998
-------------------------------------------------------
Marvel Entertainment Group Inc. reports to the SEC that the
plan of reorganization for Marvel Entertainment Group,
Inc. that was proposed by the company and certain senior
secured lenders of Marvel, in the bankruptcy cases of
Marvel and various subsidiaries of Marvel in the District
Court for the District of Delaware was consummated on
October 1, 1998. Pursuant to the Plan, MEG Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary
of the company, merged with and into Marvel, with Marvel
continuing as the surviving corporation and as a wholly-
owned subsidiary of the Registrant.
As a result of the Merger, the company acquired all of the
tangible and intangible assets of Marvel. The assets
acquired include plant, equipment and other physical
property which were used by Marvel in its operations.
MEDICAL RESOURCES INC: Stock Ownership Reported
-----------------------------------------------
In a Form 13D/A registered with the SEC, TJS Partners,
L.P., TJS Management, L.P., TJS Corporation, and Thomas J.
Salvatore report beneifical ownership of 1,197,293 Shares
of common stock of Medical Resources Inc., which
constituted approximately 13.967% of the 8,572,000 Shares
outstanding as of October 2, 1998
MILFORD RESOLUTION: Notice of Confirmation Order
------------------------------------------------
An order confirming the first amended joint consolidated
liquidating plan of reorganization of Milford Resolution,
Inc. was entered by the U.S. District Court for the
District of Delaware.
Proofs of claim with respect to rejected executory
contracts or unexpired leases must be received on or before
4:00 pm on November 2, 1998.
MITA INDUSTRIAL: Relatives Received 1.2 Billion Yen
---------------------------------------------------
According to a Kyodo news report on October 15, 1998,
relatives of the former president of failed photocopier
maker Mita Industrial Co. have received some 1.2 billion
yen in illegal dividends since 1986, before the company
effectively went bankrupt in August, sources close to the
firm said Saturday.
The former president, Yoshihiro Mita, 59, was arrested
Tuesday on suspicion of violating the Commercial Code by
paying dividends after falsifying the firm's earnings
reports.
Falsification of the reports began in 1986, according to
the firm's court - appointed provisional administrator.
The administrator also said that more than 90% of the
company's some 51 million shares, with a face value of 50
yen per share, were held by Mita's relatives
and affiliate firms, and that shares held by 13 relatives
of Mita accounted for about 60% of total shares.
According to the sources, Osaka-based Mita Industrial
actually reported profits for only four business years --
from 1988 to 1990 and 1997 -- after it began inflating
company accounts in 1986. The firm paid dividends of up to
10% on its share in the eight fiscal years in the red.
Relatives of Mita received unlawful dividends of some 150
million yen per year, and total profits stood at about 1.19
billion yen at the end of the 1997 business year.
Mita himself received about 60 million yen every year as a
dividend, and his total profits rose to some 500 million
yen, the sources said.
The Osaka District Public Prosecutors Office also found
that the company had underreported its 10 billion yen in
earnings by 50% in the account settlements
of the 1989 and 1990 business years.
Prosecutors suspect that the profits were underreported in
those two years to balance the books by offsetting the
false earnings reported in the past.
The company, however, could not help falsifying its account
because business deteriorated with the collapse in the
early 1990s of the bubble economy, the sources said.
Mita Industrial applied Aug. 10 for a bailout under the
Corporate Rehabilitation Law, effectively going bankrupt
with debts of more than 200 billion yen. Mita explained
that the collapse stemmed from foreign exchange
fluctuations and excessive expenses for research and
development.
At a press conference in August, Mita admitted to
falsifying the accounts, saying the company had chosen to
do so to keep getting bank loans.
Mita Industrial is suspected of having inflated its
accounts by 37 billion yen since 1986, the sources said.
OXFORD HEALTH PLANS: Reports $10.4 Million Purchase
---------------------------------------------------
Oxford Health Plans, Inc. (NASDAQ: OXHP) announced that
Health Risk Management, Inc. of Minneapolis, Minnesota
("HRM") has signed a definitive agreement to purchase the
shares of capital stock of Oxford Health Plans (PA), Inc.,
its wholly-owned Pennsylvania HMO subsidiary
("OXPA"), for $10.4 million subject to regulatory
approvals.
OXPA is a Pennsylvania-licensed HMO serving approximately
65,000 Pennsylvania Medicaid members and 7,000 commercial
members. Since April 1998, HRM has assumed
the medical costs risk of OXPA's 65,000 Pennsylvania
Medicaid members. Oxford will continue to serve
approximately 8,400 PPO members in Pennsylvania through
Oxford Health Insurance, Inc., but the Company expects that
membership to decrease over time.
OXPA will work closely with HRM to ensure continuity of
care and a smooth transition for its members. The
transaction is expected to close by year-end,
subject to receipt of required regulatory approvals.
Oxford also recently announced its plan to withdraw from
the Florida market and the signing of an agreement to
effectively transfer its Illinois membership to Blue Cross
and Blue Shield of Illinois. These moves, which are part of
Oxford's turnaround plan, will enable the company to focus
on its core commercial business in the New York City tri-
state area.
Health Risk Management (NASDAQ: HMRI), headquartered in
Minneapolis, delivers electronically integrated health plan
management services through its Quality FIRST(R) Medical
Risk Management System(SM), which features electronic
clinical support guidelines and comprehensive reporting
services. HRM also markets national provider networks,
disability/workers' comp management, disease/demand
management and administrative services including electronic
claimpayment. HRM's clients include self-insured employers,
HMOs, PPOs, IPAs, insurance companies, unions, hospital
systems and government entities to clients nationwide and
in Canada.
Oxford Health Plans, Inc. is based in Norwalk, Connecticut.
The product lines of its subsidiaries include traditional
health maintenance organizations, point-of-service plans,
third-party administration of employer funded benefit
plans, Medicare plans and Medicaid plans. Oxford markets
its health plans to employers in several states through its
direct sales force and through independent insurance agents
and brokers.
R&S/STRAUSS: Exclusivity Extended 60 Days By Agreement
------------------------------------------------------
The court extended R&S/Strauss Inc.'s exclusivity for 60
days after R&S reached an agreement with the official
creditors' committee for the shorter-than-requested
extension. The committee agreed to the 60-day extension
but didn't file an objection to the company's request for a
120-day extension. The auto parts retailer had asked for
an extension of its exclusive periods to file a
reorganization plan and solicit plan acceptances through
Feb. 4 and April 5, respectively. Citing some of
its accomplishments to date, R&S said it has set up a due
diligence data room for third parties that have expressed
interest in the business. (Federal Filings Inc. 19-Oct-98)
RIVER OAKS: Reaches Agreement With Primary Lender
-------------------------------------------------
River Oaks Furniture has reached an agreement with its
primary lender to restructure the company's debt.
The restructuring leaves River Oaks with 381 employees,
down from a high earlier this year of more than 1,000
workers at plants in Belden, Fulton, Booneville, New
Albany, Baldwyn, McKenzie, Tenn., and Compton, Calif.
In the last two weeks, the company closed its New Albany
and Fulton manufacturing operations, leaving manufacturing
plants in Baldwyn and Compton, and corporate headquarters
in Fulton.
The agreement with BNY Financial Corp. will allow the
company to present a Chapter 11 bankruptcy plan to
bankruptcy court by December. In addition, former River
Oaks chairman Steve Simons and former president John Nail
have ended their association with the company, the company
announced Wednesday.
Len York, acting chief executive officer of River Oaks and
an official with corporate turnaround firm OSNOS & Co.,
said a new CEO will be named soon. "Since filing Chapter
11 in March of this year, River Oaks has made dramatic
progress in streamlining its operations, reducing operating
costs and enhancing operating efficiencies," York said.
He said the company had repaired damage to customer
relationships caused by the financial difficulties by
consolidating manufacturing capacity while enhancing
product quality and delivery.
Those decisions are "putting River Oaks well on track to
emerge from the reorganization process as a streamlined,
efficient manufacturer tightly focused on serving our
valued customers," York said.
River Oaks had filed a bankruptcy petition in March,
listing assets of $57.8 million and liabilities of $45.8
million. The bankruptcy court later approved $32.9 million
in debtor-in-possession financing through BNY Financial Co.
(Commercial Appeal Memphis -10/16/98)
SEARCH FINANCIAL: Court Approves Disclosure Statement
-----------------------------------------------------
Search Financial Services Inc. ("SFSI") announced that the
Bankruptcy Court has approved the Third Amended Joint
Disclosure Statement (the "Disclosure Statement") of SFSI
and its subsidiaries, Search Financial Services Acceptance
Corp., MS Financial, Inc. and Search Funding Corp. (with
SFSI, the "Debtors") related to the Debtors Third Amended
Joint Plan of Reorganization (the "Plan"). A hearing to
consider confirmation of the Plan is scheduled for November
10, 1998.
In general, the Plan provides for the substantive
consolidation of the Debtors and the liquidation of the
Debtors' remaining assets for the benefit of a Trust and
the Trusts' beneficiaries. The Plan also contemplates a
sale of SFSI's consumer finance operations (or,
alternatively, a sale of an interest in those operations)
approximately 90 days following confirmation, with the
proceeds to be received by the Trust for distribution to
Trust beneficiaries. Those beneficiaries are, first, the
Debtors' creditors.
If all allowed creditor claims are satisfied, then
preferred shareholders would receive distributions from the
Trust. However, it is not likely that preferred
shareholders will receive any distribution, although a
distribution to them is possible depending on the value
realized for the Debtors' assets, including the consumer
finance operations. Further, it is contemplated that
neither holders of common stock nor holders of warrants
will receive any distributions although claims have been
filed on behalf of warrant holders claiming that the
redemption feature of the warrants should be treated as
part of the class of general unsecured creditors and for
other relief. The Bankruptcy Court has not ruled on these
claims. All preferred stock, common stock and warrants will
be cancelled under the terms of the Plan, and all causes of
action of the Debtors will become property of the Trust.
During the 90-day period for sale of SFSI's consumer
finance operations, those operations will continue to be
managed by their current, experienced management, provided
certain financing contingencies are satisfied. There can
be no assurance that a sale of all or a part of SFSI's
consumer finance operations will be consummated. If no
acceptable bid for a purchase of or investment in those
operations is received, the Trustee of the Trust will be
free to operate the consumer finance business through
management of his choice, liquidate the assets of that
business or take any other action deemed appropriate by the
Trustee to maximize value for the beneficiaries of the
Trust.
The Plan settles all of the Debtors' claims against Hall
Phoenix/Inwood, Ltd. ("Phoenix") in exchange, among other
things, for Phoenix's agreement to advance any funds
necessary for payment of allowed administrative and
priority payment claims, the payment of which are a
condition to confirmation of a plan under the Bankruptcy
Code.
SFSI also announced that its consumer finance subsidiaries
have received a commitment from FINOVA Capital Corporation
("FINOVA") to provide the consumer finance subsidiaries
with a five-year, $30 million revolving line of credit and
an additional $5 million operating facility to refinance
those subsidiaries' current revolving credit agreement with
Hibernia National Bank and fund the continuing operations
of the consumer finance subsidiaries following
confirmation of the Plan. All loans under the FINOVA
commitment would be secured by the assets of the consumer
finance subsidiaries. The FINOVA commitment is subject to
review and final approval by senior management and the
Board of Directors of FINOVA, completion of due diligence,
negotiation and execution of definitive loan documents and
confirmation of the Plan with a form of Bankruptcy Court
order acceptable to FINOVA. Two of the consumer finance
subsidiaries currently have a $3.5 million revolving credit
line with FINOVA that was entered into in August 1998.
Consummation of the FINOVA commitment would satisfy the
financing contingency referred to above. Loan covenants
will require that the current senior management and Board
of Directors of the consumer finance companies continue to
manage those companies unless FINOVA otherwise consents.
George C. Evans, Chairman and Chief Executive Officer of
SFSI, said "After lengthy negotiations to reach a
settlement with Phoenix that would provide greater
assurance that preferred shareholders would receive some
distribution under a plan, it became increasingly apparent
that no plan could be confirmed for the benefit of
creditors or shareholders unless funds were provided
from an outside source to fund allowed administrative and
priority claims. Under the law, no plan could be confirmed
unless payment of those claims was provided for at
confirmation. Phoenix agreed to advance those funds, as
well as to provide up to $500,000 to finance the consumer
finance operations on an interim basis if the financing
package for those operations with FINOVA does not close as
anticipated . Under those circumstances, and given the
uncertainty of success in any action to subordinate
Phoenix's claim that would have increased the likelihood of
distributions for preferred shareholders, settling with
Phoenix and proposing the Plan with Phoenix's concurrence
was, in my opinion, the best alternative for creditors
while preserving the possibility, however remote, of some
recovery for preferred shareholders."
Search Financial Services Inc. was a specialized financial
services company engaged in the purchasing, financing, and
servicing of non-prime automobile installment loans
originated by franchised and independent automobile
dealers. Search discontinued purchasing non-prime
automobile installment loans in early February 1998, but
continues to service a small amount of non-prime automobile
installment loans that remain in its portfolio. Search also
continues to purchase, finance, and service direct non-auto
consumer finance and home equity loans generated through
Search's 19 branch offices located in six states and in
Puerto Rico. Search common shares and its 9%/7% convertible
preferred shares trade under the symbols "SFSIQ" and
"SFIPQ", respectively.
SOUTHEAST BANKING: Trustee Suspends Creditor Distribution
---------------------------------------------------------
Jeffrey H. Beck, the bankruptcy trustee for Southeast
Banking Corp., Miami, announced that it has suspended the
previously approved distribution of $100 million to
creditors of the failed bank holding company, according to
a newswire report. The suspension is the result
of a recent ruling from the U.S. Court of Appeals for the
Eleventh Circuit in a dispute between holders of Southeast
Banking Corp. senior and subordinated bonds. The court held
that the Bankruptcy Code had eliminated the "Rule of
Explicitness" on which lower courts had relied in refusing
to direct payment of post-bankruptcy interest, costs
and fees to senior noteholders. The bankruptcy court has
scheduled a status conference for Oct. 26 to consider the
appeals court decision and whether distribution can proceed
in a lesser amount or on other terms. If the suspension,
ordered at the trustee's request,is lifted, he will make
the distribution. Southeast Banking filed for bankruptcy in
1991 after its banks were seized by federal and state
regulators. (ABI 16-October-98)
UNISON HEALTHCARE: Order Grants Severance Packages
--------------------------------------------------
The court entered an order finding that the assumption of
the employment contracts for the debtors' mid-level
management employees, is a valid exercise of the debtors'
reasonable business judgment; and adoption and
implementation of the severance packages constitutes a
valid exercise of the debtors' reasonable business judgment
essential to the continued operation of the debtors'
businesses. The total annual salary and the total
severance amount of the mid-level management employees is
$1,231,800.
WELCOME HOME: Designation of Effective Date
-------------------------------------------
Pursuant to the Second Amended Plan of Reorganization of
Welcome Home Inc. and Jordan Industries, Inc. dated and
confirmed on September 28, 1998, the Debtor-in-Possession,
Welcome Home Inc., hereby designates November 2, 1998 as
the Effective Date.
Meetings, Conferences and Seminars
----------------------------------
October 16-20, 1998
TURNAROUND MANAGEMENT ASSOCIATION
1998 Annual Conference
The Westin Hotel, Chicago, Illinois
Contact: 1-312-857-7734
October 22-25, 1998
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
72nd Annual Meeting
Wyndham Anatole Hotel, Dallas, Texas
Contact: 1-803-957-6225
November 9-10, 1998
RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC.
Conference on Corporate Restructurings: Asia
Indonesia * Thailand * South Korea
The Radisson Empire Hotel, New York, New York
Contact: 1-903-592-5169 or ram@ballistic.com
November 17-18, 1998
AIC WORLDWIDE
Retail Credit Card Management & Collections
Chicago Hilton & Towers, Chicago, Illinois
Contact: 1-212-714-1444
November 20-23, 1998
COMMERCIAL LAW LEAGUE OF AMERICA
78th Eastern District Meeting
New York Marriott World Trade Center, New York
City
Contact: Warren Pinchuck, New Hyde Park, New
York
November 30-December 1, 1998
RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC.
Distressed Investing '98
The Plaza Hotel, New York, New York
Contact: 1-903-592-5169 or ram@ballistic.com
December 3-5, 1998
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Westin La Paloma, Tuscon, Arizona
Contact: 1-703-739-0800
December 10-12, 1998
THE AMERICAN LAW INSTITUTE-AMERICAN BAR ASSOCIATION
The Emerged & Emerging New Uniform Commercial Code
Sheraton New York Hotel, New York City
Contact: 1-800-CLE-NEWS
January 28-February 1, 1999
COMMERCIAL LAW LEAGUE OF AMERICA
38th Annual Southern District Meeting
Royal Sonesta Hotel, New Orleans, Louisiana
Contact: 1-423-971-1551
February 18-21, 1999
COMMERICAL LAW LEAGUE OF AMERICA
Annual Western District Meeting
Monte Carlo Hotel & Casino Resort,
Las Vegas, Nevada
Contact: 1-702-382-9558
Febraury 28-March 3, 1998
NORTON INSTITUTES ON BANKRUPTCY LAW
Norton Bankruptcy Institute I
Olympic Park Hotel, Park City, Utah
Contact: 1-770-535-7722
March 18-21, 1998
NORTON INSTUTUTES ON BANKRUPTCY LAW
Norton Bankruptcy Litigation Institute II
Flamingo Hilton Hotel, Las Vegas, Nevada
Contact: 1-771-535-7722
April 26-27, 1999
RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC.
Bankruptcy Sales, Mergers & Acquisitions
The Mark Hopkins, San Francisco, California
Contact: 1-903-592-5169 or ram@ballistic.com
April 28-30, 1999
INTERNATIONAL FEDERATION OF INSOLVENCY PROFESSIONALS
INSOL Bermuda '99 Conference of the Americas
Castle Harbour Marriott Resort
Contact: INSOL@weil.com
*************
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. 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
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