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/raid1/www/Hosts/bankrupt/TCR_Public/981109.MBXT R O U B L E D C O M P A N Y R E P O R T E R Monday, November 9, 1998, Vol. 2, No. 219 Headlines APS HOLDING: Deadline For Filing Proofs of Claim BIG RIVERS: Reaches Agreement With Union BOSTON CHICKEN: Reports Third Quarter Results CGE FORD: Won't Pursue Liquidating Plan CAMELOT MUSIC: Applies to Withdraw Registration Statement CAMPO ELECTRONICS: Converts To Chapter 7-Deal Falls Through CITYSCAPE FINANCIAL: Court Approves Retention of Jay Alix CRIIMI MAE: Announces Special Servicers of Mortgage Pools CRIIMI MAE: Trustee Names Committee For Criimi Mae Unit DIGICASH: Seeks Chapter 11 Protection DOMINION BRIDGE: Extension To File Creditor Proposal GANTOS INC: Announces Three Year $40 Million Facility HOME CHOICE HOLDINGS: Files Annual Report With SEC INCOMNET: Gets $5 Million Bridge Financing For Turn Around IMARK TECHNOLOGIES: Case Summary & 20 Largest Creditors INTERNATIONAL HERITAGE: Accountants and Officers Resign IRIDIUM LLC: Reports Third Quarter Results MC LIQUIDATING: Auction For Microwave Network Announced MERIS LABORATORIES: Consummates Sale of Assets to Unilab NORDICTRACK: CML Announces Bankruptcy Filing PITTSBURGH PENGUINS: File Petition Against City Councilman RAMTRON INTERNATIONAL: In Tight Financial Spot SCORES ENTERTAINMENT: Case Summary & 20 Largest Creditors SUN TELEVISION: Taps Nassi/Alco/Hilco Venture For GOB Sales TVX GOLD: Reports Production Improving VISTA PROPERTIES: Files Pension Fund Trustee's Plan WESTBRIDGE CAPITAL: Amends Plan For Underwriter Claims ********* APS HOLDING: Deadline For Filing Proofs of Claim ------------------------------------------------ APS Holding Corporation and its affiliates, as debtors, published a notice in The Wall Street Journal, November 6, 1998 that all creditors of the debtors are required to file on or before 4:00 pm on December 31, 1998 a completed and executed proof of claim form on account of any claim against any of the debtors. BIG RIVERS: Reaches Agreement With Union ----------------------------------------- The Evansville Courier reports on October 14, 1998 that Big Rivers Electric Corp. and a union that represents the utility's remaining employees reached agreement this week on a new four-year labor contract. The contract, which takes effect Thursday, will give workers a 3 percent raise in each of the next four years. Big Rivers, which filed for bankruptcy in 1996, in July turned over operation of its generating plants to Western Kentucky Energy, a subsidiary of Louisville Gas & Electric Co. of Louisville. Big Rivers still has 90,000 customers in 22 counties served by Henderson-Union, Green River, Jackson Purchase Energy Corp. and Meade County RECC distribution co-ops. The lease of its power plants to Western Kentucky Energy reduced the number of Big Rivers union employees from more than 400 to 28. Remaining Big Rivers union employees are at its electric power transmission department on Airline Road in Henderson. The contract was extended for a year in October 1997 while Big Rivers and LG&E continued to work out the lease. Big Rivers and Western Kentucky now have separate agreements with Local 1701 of the International Brotherhood of Electrical Workers. Other changes in the agreement include improvements in medical coverage, improvements in the retirement and 401(k) plans and revisions in work rules that are designed to improve productivity and flexibility, the company and union said in a joint statement. Big Rivers reaches agreement with union Only 28 workers left at restructured utility HENDERSON, Ky. -- Big Rivers Electric Corp. and a union that represents the utility's remaining employees reached agreement this week on a new four- year labor contract. The contract, which takes effect Thursday, will give workers a 3 percent raise in each of the next four years. Big Rivers, which filed for bankruptcy in 1996, in July turned over operation of its generating plants to Western Kentucky Energy, a subsidiary of Louisville Gas & Electric Co. of Louisville. Big Rivers still has 90,000 customers in 22 counties served by Henderson-Union, Green River, Jackson Purchase Energy Corp. and Meade County RECC distribution co-ops. The lease of its power plants to Western Kentucky Energy reduced the number of Big Rivers union employees from more than 400 to 28. Remaining Big Rivers union employees are at its electric power transmission department on Airline Road in Henderson. The contract was extended for a year in October 1997 while Big Rivers and LG&E continued to work out the lease. Big Rivers and Western Kentucky now have separate agreements with Local 1701 of the International Brotherhood of Electrical Workers. Other changes in the agreement include improvements in medical coverage, improvements in the retirement and 401(k) plans and revisions in work rules that are designed to improve productivity and flexibility, the company and union said in a joint statement. BOSTON CHICKEN: Reports Third Quarter Results --------------------------------------------- Boston Chicken, Inc. (Nasdaq: BOSTQ) announced results of operations for its third fiscal quarter ended October 4, 1998. The company reported third quarter 1998 company revenue of $261.0 million compared with $110.8 million for the third quarter of 1997. The increase in company revenue is due to an increase in the number of Boston Market company restaurants, as well as an increase in the number of company restaurants for Einstein/Noah Bagel Corp. (Nasdaq: ENBX), a majority owned subsidiary of the company, as a result of the conversion of area developer loans. Therefore, revenue is not readily comparable to prior quarters. While company revenue in the third quarter has increased year-over-year because of the increased number of company- owned restaurants, weekly net sales per Boston Market restaurant were down 18.3% from the year-ago period. Net systemwide Boston Market restaurant revenue was $207.9 million for the third quarter of 1998 compared with $265.1 million for the year-ago period, or down 21.5%. The company recorded $260 million of special charges in the third quarter, including $105.5 million of restaurant closure costs and other charges related to the company's voluntary filing for Chapter 11 bankruptcy protection on October 5, 1998. The special charges also include a $110.7 million charge related to the assets recorded in connection with the restructuring of the company's 1996 Master Lease, a $25.5 million provision for potential loan losses and $18.3 million of charges primarily related to financing costs and other asset write-downs. Including third quarter charges, the company has recorded $595.1 million of special charges thus far this year. Primarily as a result of the special charges, the company reported a net loss for common stockholders for the third quarter of 1998 of $290.8 million, or $3.79 per diluted share, compared with net income of $11.0 million, or $0.16 per diluted share for the third quarter of 1997. Year-to- date, the company's net loss is $727.9 million, or $9.93 per diluted share. J. Michael Jenkins, Boston Chicken chairman, chief executive officer and president, said, "While Boston Market sales and customer counts continue to decline from year-ago levels, we have improved restaurant operations and cash flow. By quarter end, the rate of decline in customer counts improved by 5% over the second quarter. Despite the sales decline, third quarter company-operated store operating cash flow margins were 9.6% of net sales, or $19.7 million versus 5.8%, or $15.2 million, in the third quarter 1997. Jenkins continued, "Although we are pleased with our progress, an unfortunate, but not unexpected, result of the publicity from our Chapter 11 filing has been a 7-9% decline in customer counts so far in the fourth quarter." On October 26, 1998, the company received final approval of its $70 million Debtor-in-Possession (DIP) credit facility, $35 million of which was used to refinance a pre-petition 1998 liquidity facility. "As part of our reorganization, we are working to reduce our current debt of over $900 million by nearly two-thirds. We hope to exchange our three issues of subordinated convertible debentures, totaling approximately $627 million, for equity. A reduced debt burden, the recent closing of underperforming restaurants, continued efforts to improve operational performance and our strong brand image are the cornerstones of our plan of reorganization," said Lawrence E. White, Boston Chicken executive vice- president and chief financial officer. The Creditor Committee, consisting primarily of bondholders, has indicated it is willing to exchange the convertible subordinated debentures and other unsecured debt for all of the equity of the reorganized company. "Although the company is exploring opportunities to preserve some value for existing stockholders, there can be no assurance that existing stockholders will retain any value," White cautioned. The company has been notified by the Nasdaq Stock Market ("Nasdaq") of Nasdaq's determination that the company is not in compliance with the net tangible assets requirement or the alternative $5 minimum closing bid price requirement for continued listing of its common stock on the Nasdaq National Market. The company has a hearing scheduled with Nasdaq on November 19, 1998 regarding these compliance issues. There can be no assurance that the hearing will result in continued listing of the common stock on the Nasdaq National Market. Delisting of the common stock from Nasdaq could have a material adverse effect on the market price of, and the efficiency of the trading market for, the company's common stock. CGE FORD: Won't Pursue Liquidating Plan --------------------------------------- CGE has decided not to proceed with its liquidating reorganization plan and, at least for now, has acquiesced to the plan from indenture trustee U.S. Bank Trust N.A. that calls for resurrecting CGE's Illinois waste tire-to-energy plant. After CGE also informed the court at Monday's scheduled disclosure statement hearing that the company is not withdrawing its plan, U.S. Bank pledged to amend its disclosure statement in order to address the objections that were filed and submit the new disclosure statement and plan Nov. 17. Ordering that no further disclosure statement hearings were necessary, the court decided that U.S. Bank's amended disclosure statement would have interim approval when it was filed and that the amended filing would be sent to interested parties for voting thereafter. (Federal Filings Inc. 06-Nov-98) CAMELOT MUSIC: Applies to Withdraw Registration Statement --------------------------------------------------------- In a letter filed with the SEC, Camelot Music Holdings, Inc., a Delaware corporation states that it is making an application for the withdrawal of the Company's Registration Statement relating to the Company's Common Stock, $.01 par value. The Company seeks to withdraw the Registration Statement in light of the proposed stock-for-stock merger between the Company and Trans World Entertainment Corporation. The definitive merger agreement is subject to customary closing conditions, including approval by both Trans World and Camelot stockholders, and is expected to close early next year. Under the Merger Agreement, each stockholder of the Company will receive 1.9 newly issued shares of Trans World common stock for each share of Common Stock, and the Company will become a wholly owned subsidiary of Trans World. CAMPO ELECTRONICS: Converts To Chapter 7 As Deal Falls Through ------------------------------------------------------ In a UPI newswire brief of November 5, 1998 it was reported that a bankruptcy judge is expected to decide whether 20 Campo Appliance, Electronics, and Computers stores can be sold to the parent company of A-1 Appliances. If the deal is approved, at least some of the stores would be reopened under the Campo name. The Campo stores were closed almost two weeks ago when they could no longer meet their obligations under a bankruptcy reorganization plan. On November 6, 1998 a newsire report announced that a deal to reopen seven of 20 closed Campo appliance and computers stores fell through after the parent of the A-1 Appliances chain withdrew its' offer to buy the stores. That came as Campo changed its bankruptcy claim from Chapter 11 reorganization to Chapter 7 liquidation status. A court trustee now will decide how the company's inventory will be sold off, whether to other companies, or at a public going out of business sale. Campo once had 36 stores in six states. CITYSCAPE FINANCIAL: Court Approves Retention of Jay Alix --------------------------------------------------------- On October 29, 1998, Judge Adlai S. Hardin, Jr. entered an order authorizing the debtors, Cityscape Financial Corp. and Cityscape Corp., to retain the firm of Jay Alix & Associates to assist the debtors with compiling information for the examiner and compiling information for the schedules and statement of financial affairs to be filed with the court. CRIIMI MAE: Announces Special Servicers of Mortgage Pools --------------------------------------------------------- CRIIMI MAE Inc.(NYSE: CMM), the commercial mortgage company operating under Chapter 11 protection since October 5, 1998, today announced the designation of Banc One Mortgage Capital Markets, LLC (BOMCM) as special servicer on approximately $28 billion of CMBS representing 32 commercial mortgage pools, subject to the consent and other procedural requirements contained within the respective servicing agreements. CRIIMI MAE Services Limited Partnership (CMSLP), an affiliate operating outside of bankruptcy court purview, will continue to perform special servicing for the 32 commercial mortgage pools as sub-servicer for BOMCM. This new arrangement maintains continuity in the ongoing asset management by CMSLP of specially serviced loans while adding the oversight, financial capacity and depth of BOMCM's highly rated special servicing. CRIIMI MAE Inc. remains the owner of the subordinated CMBS for each of the 32 commercial mortgage pools and, as such, retains all rights pertaining to the ownership of these CMBS including the right to replace the special servicer. "We have brought in Banc One to allay rating agency concerns stemming from CRIIMI MAE Inc.'s reorganization filing. We hope this will contribute to investor confidence and enhance the stability of the CMBS market while we move towards reorganizing the company," said CRIIMI MAE Inc. president H. William Willoughby. He added that there have been no losses of principal in portfolios for which CMSLP has been special servicer. CRIIMI MAE: Trustee Names Committee For Criimi Mae Unit ------------------------------------------------------- The U.S. Trustee has appointed a separate unsecured creditors' committee for Criimi Mae Management Inc., a subsidiary of mortgage REIT Criimi Mae Inc. The three- member panel consists of Dun & Bradstreet (interim chair), Andrews Office Products, and Ad Solution. The recently- formed committee is seeking approval to hire Paul Nussbaum and Martin Fletcher of Whiteford Taylor & Preston LLP as counsel to, among other things, evaluate whether it's necessary to seek the appointment of an examiner or trustee. The Baltimore law firm will assist the panel in an "investigation of the acts, liabilities and financial condition of the Debtor, the operation of the Debtor's business and the desirability and profitability of continuing such businesses." (The Daily Bankruptcy Review and ABI Copyright c November 6, 1998) DIGICASH: Seeks Chapter 11 Protection ------------------------------------- DigiCash Inc. announced that it has filed for chapter 11 protection after reducing its staff from 50 in February to just six, CNET reported. The electronic cash pioneer liquidated its operations in the Netherlands, where the company was founded, in September, and the company is seeking new investors or a buyer for its software technology. DigiCash has been running off a bridge loan from its venture capital investors since June. Most of its $4 million in liabilities is owed to its initial venture capital financiers who extended the bridge loan. The company's eCash enables consumers to make anonymous payments of any amount; the anonymity differentiates this product from other e-cash schemes, the company said. DigiCash's intellectual property includes patents, protocol and software systems that can be used for applications like online electronic voting. (ABI 06-Nov-98) DOMINION BRIDGE: Granted Extension To File Creditor Proposal --------------------------------------------------- Dominion Bridge Corporation and its subsidiary Cedar Group of Canada were granted a new extension until December 10, 1998 to file their Proposal to their respective creditors, pursuant to notices of intention filed on August 11, 1998, under the Bankruptcy and Insolvency Act. GANTOS INC: Announces Three Year $40 Million Facility ----------------------------------------------------- November 3, 1998 -- Gantos, Inc. (Nasdaq:GTOS) announced that it has executed a commitment letter to refinance the working capital facilities of Gantos into a $40 million facility with Foothill Capital Corporation and Paragon Capital LLC. The Foothill/Paragon facility is a three year facility and will replace Gantos' current $40 million facility with Fleet Bank. The consummation of the Foothill/Paragon facility is subject to several conditions, including documentation satisfactory to Foothill/Paragon and the absence of a material adverse change in the business of Gantos. Gantos expects, subject to the satisfaction of these conditions, to consummate the refinancing in mid-November. Gantos also announced that it has terminated its proposed merger with HOM Holding, Inc., the sole stockholder of Hit or Miss, in accordance with the terms of the merger agreement previously executed in May 1998. Arlene Stern, President & Chief Executive Officer of Gantos, stated that "We are pleased that Foothill and Paragon have committed to financing Gantos' operations for the next three years. The new facility contains more favorable borrowing terms for Gantos, which in turn strengthens our financial position and allows Gantos to continue the progress it has made in its turnaround. The new facility will allow us to focus on growing our business, while maintaining our vendor and landlord relationships and service to our customers." HOME CHOICE HOLDINGS: Files Annual Report With SEC -------------------------------------------------- Home Choice Holdings Inc. filed its annual report for the fiscal year ended December 31, 1997. The aggregate market value of the 10,621,950 shares of Common Stock held by non-affiliates of the registrant at the closing sales price on March 27,1998: $212,439,000 The number of shares of Common Stock outstanding as of the close of business on March 27, 1998: 16,967,121 Revenue increased $106.8 million, or 86%, to $231.0 million for the year ended December 31, 1997 from $124.2 million for the comparable period in 1996. Net income decreased $5.2 million, or 472.7% to a loss of $4.1 million for the year ended December 31, 1997, from an income of $1.1 million for the comparable period in 1996, and as a percentage of revenue, net income decreased to a negative 1.7% from a positive .9% for the comparable period in 1996. These decreases occurred primarily as a result of higher amortization of intangibles, operating losses attributable to the 34 new stores opened by RTO during the year ended December 31, 1997, expenses related to the Company's store name change program initiated in 1997, and increased corporate expenses related to integration of the RTO Acquisitions, the 1996 Alrenco Acquisitions and the 1997 Alrenco Acquisitions. The decrease in net income for1997 is partially offset by lower business combination costs and related key executive signing bonuses expensed in 1997 as compared to those expensed in 1996. INCOMNET: Gets $5 Million Bridge Financing For Turn Around ---------------------------------------------------------- A business wire report of November 6, 1998 reports that Irvine-based telecommunications and network marketing company Incomnet Inc. (Nasdaq:ICNT) announced that it completed a $5 million loan transaction which will serve as the bridge financing to an anticipated $20 million secured credit facility expected to be completed by mid-December. The completion of this bridge financing follows a series of recent accomplishments in the company's turn-around strategy headed by its new President and Chief Executive Officer, Denis Richard. The company has in the last few months changed most of its board members and senior management of both the parent company and its principal communications subsidiary, National Telephone & Communications Inc. (NTC). Jack Casey is Incomnet's new Chairman and long-time shareholder who, in addition to orchestrating the recently announced board change, acquired highly dilutive preferred stock that was convertible, upon an increase in the number of authorized common shares, into approximately 26% of the company's common stock. Another tranche of this highly dilutive preferred stock convertible into approximately 7% of the company's common stock (when available) was acquired by the bridge loan lender. Both Casey and the bridge loan lender are required to allow the company to buy back these shares at cost plus carried cost, which is substantially less than the company's recent trading price. If, for corporate reasons, the buy-back is not possible within the next year, these shares will be made available to shareholders through a rights offering. Casey remains a significant shareholder of the company even after accounting for this buy-back program or rights offering. "We have under very difficult circumstances gained the confidence and support of our shareholders and creditors, including our network provider, MCI WorldCom. MCI WorldCom has not only provided financing support but also agreed to significantly reduce NTC's service commitment to MCI WorldCom while at the same time providing a new aggressive rate program," reported Richard. In connection with the bridge loan, the company issued warrants to purchase 500,000 shares of common stock at $1 per share. The bridge loan is secured by a pledge of stock sale proceeds of a subsidiary other than NTC and other assets of the company. The $20 million secured credit facility, expected to close in December 1998, remains subject to a number of conditions that must be satisfied prior to Dec. 15, including resolution of certain litigation on terms acceptable to the lender. Upon completion of the $20 million secured credit facility, the company will issue to the lender warrants to purchase 2 million shares of Common Stock at $1.00 per share, and warrants to purchase 1 million Common shares at $2.25 per share. The price and number of warrants are subject to adjustment based on the performance of the company. The credit facility will be secured by most of the assets of the company and NTC. After completion of the $20 million secured credit facility in December 1998, First Bank will be completely paid-off and NTC will no longer be in default to MCI WorldCom. First Bank and WorldCom have agreed to forbear from taking any actions under current NTC defaults until Dec. 15, 1998, to allow the company to complete this financing. No assurances can be given that the company will be successful in completing the $20 million secured credit facility by Dec. 15, 1998 or at all. Incomnet provides cost-saving products primarily in the telecommunications industry. Incomnet's subsidiary NTC, is a reseller of long distance and other communications products to residential and small business customers through its independent sales representatives using a network marketing strategy. IMARK TECHNOLOGIES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Imark Technologies, Inc. 530 Herndon Parkway Suite 100 Herndon, VA 20170-5226 Type of business: Development stage company engaged in the business of developing and marketing the CD-MAX, NET-MAX and NET-MAX+ systems, based upon its proprietary technology, which is designed to allow publishers of professional, corporate, library and education information to sell information to end-users on a usage basis. The company's systems consist of proprietary metering and encryption software and bill services. Court: Eastern District of Virginia Case No.: 98-17963 Filed: 10/29/98 Chapter: 11 Total Assets: $716,597 Total Liabilities: $1,275,315 No. of shares of common stock - 4,373,270; 2,300 holders 20 Largest Unsecured Creditors: Name Nature Amount ---- ------ ------ International Advance, Inc. Secured Loans 465,000 Autonomy Software License 170,000 Gross, Phil Loan and Salary 125,000 Monroe Parkway LLC Real Estate Lease 89,595 Vallath, Ram Salary 86,957 Ginsburg, Feldman & Bress Trade Credit 54,675 Greenberg, Traurig Trade Credit 42,612 Wachovia Bank, N.A. Bank Loan 42,263 RMR & Associates, Inc. Trade Credit 41,198 Ernst & Young Trade Credit 37,308 Gallagher, Michael Salary 35,000 Newcourt Capital/AT&T Capital Equipment Lease 34,488 SGC Associates Consulting Pay 22,676 Schnipper, Steve Subordinated Secured Loan 20,000 Murray Hill Associates, LP Real Estate Lease 19,241 Core Communications Trade Debt 18,763 Insurance Premium Finance, Inc. Trade Debt 14,187 UUNET Technologies, Inc. Trade Debt 12,392 Backweb License (Disputed) 12,075 CIVS Trade Debt (Disputed) 10,216 INTERNATIONAL HERITAGE: Accountants and Officers Resign ------------------------------------------------------- On October 23, 1998, Eilers, Jones, Brown & McLeod, CPA's, PA, resigned as the Company's certifying accountants due to the fact that the Certifying Accountants are no longer independent. The written resignation was received by the Company November 3, 1998. On October 20, 1998, in a special meeting of the Board of Directors, the Board accepted the resignation of O. Kenneth Rudd, III, Executive Vice President of the Company. On October 24, 1998, at the regularly scheduled meeting of the Board of Directors, the Board accepted the resignation of Robert M. Hukezalie, Chief Operating Officer, Kevin D. Jones, Chief Information Officer and Christopher A. Reid, Vice President and Chief Compliance Officer. The Board also accepted the resignation of Georgina Marie Mollick, Vice President of Legal Affairs and Assistant Corporate Secretary as an officer of the Company and Angie C. Stewart, Corporate Secretary for the Company and its subsidiaries. Ms. Mollick and Ms. Stewart will continue to be employed by the Company. In the October 24, 1998, Board of Director's Meeting, the Board resolved to waive any contractual or other restriction upon its Independent Retail Sales Representatives ("IRSRs") which would limit or impede them from contracting with other network marketing companies. This action was taken in order to allow the Company to take steps to convert its operations from a multi-level marketing company to a direct marketing company. The Company will eliminate the recruitment of new IRSRs from its marketing plan and will continue to market its existing product lines consisting of fine jewelry, collectibles, sports equipment, telecommunications services and a proprietary line of skin care and nutritional products through all forms of media, including print, radio and television advertising. The Company will reduce its number of employees and consolidate its offices as part of this change in operations. On October 26, 1998, John D. Brothers, Chief Operating Officer submitted his resignation to the Board of Directors. It is anticipated that Mr. Brothers' resignation will be accepted at the next meeting of the Board. On October 24, 1998, at the regularly scheduled meeting of the Board of Directors, the Board accepted the resignation of Harry B. Mains and John W. Hemmer. On October 25, 1998, Evonne B. Eckenroth submitted her resignation to the Board of Directors. It is anticipated that Ms. Eckenroth's resignation will be accepted at the next meeting of the Board. IRIDIUM LLC: Reports Third Quarter Results ------------------------------------------ Iridium LLC reported to the SEC that during the third quarter the company made substantial progress toward meeting its goal of achieving worldwide service availability. For the quarter ending September 30, 1998, costs incurred and capitalized for the communications systems assets totaled $128 million. Since inception, amounts capitalized for the communications systems assets have totaled approximately$3.47 billion. The net loss for the three months ending September 30, 1998, was $364 million. On October 28, 1998 and November 1, 1998, Iridium LLC issued press releases concerning the pager testing, satellite maintenance launch schedule, the expected progress of improvements and software enhancements, expected operational and software improvements, the transition to commercial service, gateway status, handset and pager production schedules and volumes, handset and pager demand levels, certain licensing and regulatory approvals, the integration of service providers and roaming partners, customer leads and other sales- related data and the expected markets for Iridium services. Many of these statements assume that Iridium will transition smoothly from a development stage company to an operating company. A full-text copy of the filing is available via the Internet at: http://www.sec.gov/Archives/edgar/data/0000950133-98- 003676.txt MC LIQUIDATING: Auction for Microwave Network Announced ------------------------------------------------------- MC Liquidating Corp. f/k/a Midcom Communications, Inc., debtor, published a notice in The Wall Street Journal On November 6, 1998 that an auction for the Microwave Network formerly operated by PacNet, Inc. will be held on November 16, 1998 at 3:00 pm at the offices of Mayer Brown & Platt, 190 South LaSalle Street, Chicago, Illinois 60603. Each bid must be for at least $420,000 in cash. All subsequent bids after the first succeeding bid shall be in minimum amounts of $10,000, or such other amounts to be determined by the Disbursing Agent and the Committee in their sole discretion at the auction. MERIS LABORATORIES: Consummates Sale of Assets to Unilab -------------------------------------------------------- Meris Laboratories Inc. (MERS), of San Jose, California, a debtor in a Chapter 11 bankruptcy case pending in the United States Bankruptcy Court for the Central District of California, announced today that it has consummated the sale of substantially all of its assets to Unilab Corporation, a Delaware corporation pursuant to an asset purchase agreement that was approved by the Bankruptcy Court following a hearing conducted on October 28, 1998. The purchase price paid to Meris consisted of a convertible subordinated note for $14,000,000 and $2,520,000 in liabilities payable to Meris in equal installments over 72 months. The Note has an 8-year term with a $3.00 per share conversion price, and bears a 7.5% per annum interest rate. In addition to Meris' customer list, Unilab acquired substantially all of the assets of Meris and assumed certain liabilities. Meris previously announced that it had filed to reorganize under Chapter 11 of the Bankruptcy Code. Meris now expects to file a plan of reorganization under which it will distribute all of the net proceeds of the sale to its creditors, subject only to the satisfaction of certain administrative and other priority liabilities. Because the proceeds received from the asset sale to Unilab are less than Meris' indebtedness, It is unlikely that holders of Meris' common stock will receive any proceeds in the reorganization. NORDICTRACK: CML Announces Bankruptcy Filing -------------------------------------------- CML Group, Inc. (NYSE:CML) announced that the Company's NordicTrack subsidiary has filed for protection under Chapter 11 of the U. S. Bankruptcy Code. NordicTrack will move quickly to wind down its business operations and sell its assets. Separately, CML has reached an agreement with its secured lenders to amend its credit facility and to provide CML with a forbearance period through January 31, 1999. CML's secured creditors have also agreed to continued credit availability for its profitable Smith & Hawken subsidiary during the forbearance period. During this period, CML will seek to recapitalize so as to reduce its debt load and provide its Smith & Hawken subsidiary with additional working capital. John Pound, Chairman and Chief Executive Officer of CML, said: "Over the past nine months, we have explored a wide range of alternatives for NordicTrack. We aggressively investigated sale opportunities while also working to restructure the company, cut costs, and reposition it as a viable specialty retailer of fitness products. There was no meaningful acquisition interest that we could uncover in NordicTrack in its present configuration and given its troubled results." Mr. Pound continued: "We will seek to reap the highest price for NordicTrack's assets. Concurrently, we will seek to further balance our capital structure through a potential reduction of debt and infusion of equity. We have engaged BancBoston Robertson Stephens Inc. to assist us in pursuing opportunities for raising equity capital and they are working aggressively to explore these opportunities." Mr. Pound further continued: "Our secured creditors understand Smith & Hawken's potential value and have indicated that they will work with us as we seek to establish a new capital structure. Smith & Hawken has been operating under difficult circumstances due to CML's overall financial condition, and has none the less been healthy, profitable and growing. CML Group, Inc. also reported that it is in discussions with the New York Stock Exchange regarding continued listing of its stock by the Exchange. CML also indicated that it is making contingency plans for the listing of its stock on an alternative national automated trading market, in the event that the NYSE should decide against continued listing of CML's securities at some future point in time. The Company said it intends to provide its investors with continued access to trading, as the Company pursues the plan that it announced on November 5, 1998, to sell the assets of its NordicTrack division and to recapitalize and attract growth capital to its profitable Smith & Hawken division. PITTSBURGH PENGUINS: File Petition Against City Councilman ---------------------------------------------------------- The Pittsburgh Penguins have filed a petition blaming City Councilman Jim Ferlo for the team's declining ticket sales, attributing this to Ferlo's proposal to keep the Penguins out of the Civic Arena until the team pays its nearly $1 million in back taxes, The Pittsburgh Post- Gazette reported. The team said it lost more than $200,000 because of the public discussions about Ferlo's proposal. The team has asked the court to order the city to reimburse the team and to bar the council from considering Ferlo's Oct. 27 legislation to revoke the team's Civic Arena permit until the taxes are paid. An emergency hearing has been scheduled for Nov. 13 before Hon. Bernard Markovitz. (ABI 06-Nov-98) RAMTRON INTERNATIONAL: In Tight Financial Spot ---------------------------------------------- The Gazette reports on November 1, 1998 that Ramtron International Corp. raised $17.4 million from investors in February, and that deal was supposed to give the Colorado Springs computer-chip company a financial boost and a bridge to profitability. Instead, the deal backfired, and once again Ramtron finds itself in a financial tight spot that's distracting officials from the company's real business - exploiting a promising computer chip technology. This time, the situation threatens to undermine the company's viability. The latest round of difficulty is rooted in some terribly complicated financial circumstances, but the situation boils down to this: Ramtron owes a select group of investors millions of shares of stock it doesn't have. The company can create new shares, upsetting the rest of the shareholders. Or it can pay off the investors, bleeding off critical cash. Or it can try to renegotiate its February deal. In February, Ramtron raised $17.4 million by selling something called Series A convertible preferred stock to about 20 private investors. Ramtron planned to use about $7 million to pay off a loan. The rest would pay Ramtron's manufacturing partners, which were beginning to "ramp up" production of Ramtron's two primary chip products. The investors received preferred shares. Each of those preferred shares gave them the right to buy a share of common stock as of May 25. The agreement's formula set the price at $10 per share, but it wouldn't have been a good deal for investors. In late May, Ramtron stock was trading around $5 per share. Ramtron had been hoping that a small rally in the price of its stock that began in February would continue through the year. The hope was that owners of the convertible preferred shares would have been willing to grab their common shares, then sell them into the stock rally, making money on their sales. Instead, Ramtron stock began to slide after the February deal was struck. So the investors waited, and Ramtron stock continued to slide. Then the problems really began. There was a provision in the February investment agreement that changed the conversion formula after Sept. 1. Instead of paying $10 a share to convert into common stock then, the investors could convert based on the lowest trading price of Ramtron common stock for 22 trading days before the conversion. It wouldn't have been a problem if Ramtron stock were trading at $10 a share or even a little less. But by September, Ramtron stock had dipped to below $2 a share. It became cheap for the investors to convert their preferred shares into common stock. Meanwhile, at the lower conversion price, the investors got more common shares than they would have at the higher price. Investors converted so many preferred shares that by the end of October, Ramtron had hit the ceiling on the number of common shares it's allowed to have: 62.8 million. The company now has nearly one-third more common shares on the market than it had at the beginning of the year. Investors who hold the preferred shares are entitled to keep converting - less than half of the $17.4 million worth of preferred shares have been converted. At Ramtron's current trading price, the conversions would add about 30 million shares of common stock. But Ramtron has no more stock available. To convert more, Ramtron shareholders would have to OK more common shares. That's not something they'll do lightly. Authorizing more shares will only further dilute their stake in the company and likely would keep the stock price low. Because Ramtron shares are trading below $1, the stock no longer meets Nasdaq requirements to remain listed on the market. Nasdaq has not notified Ramtron of plans to de-list its stock. If Nasdaq were to de-list Ramtron stock, that would significantly reduce the company's exposure on the market and make it tougher for investors to buy and sell Ramtron stock. Meanwhile, Ramtron's $7 million loan is past due. The lender, the National Electrical Benefit Fund, extended a June 30 deadline to Sept. 30. SCORES ENTERTAINMENT: Case Summary & 20 Largest Creditors --------------------------------------------------------- Debtor: Scores Entertainment, Inc. d/b/a Scores Showroom 333 East 60th Street New York, NY 10021 Type of business: Owner and operator of a restaurant and night club featuring cabaret entertainment located at 333 East 60th Street New York, NY. Court: Southern District of New York Case No.: 98B47779 Filed: 10/29/98 Chapter: 11 Debtor's Counsel: Scott K. Levine Sherri D. Lydell Platzer, Swergold, Karlin, Levine,Goldberg & Jaslow, LLP 150 East 52nd Street New York, NY 10022 (212)593-3000 Total Current Assets: $237,283 Total Liabilities: $3,863,974 20 Largest Unsecured Creditors: Name Nature Amount ---- ------ ------ A.Bohrer, Inc Vendor 13,334 Bally's Total Fitness/Sports Rent 210,836 Beehive Dist. Vendor 8,644 Bell Atlantic Yellow Pages Advertising 33,141 Charmer Industries Vendor 16,773 Crenlex Inc. Vendor 5,361 Daniel Hirsch Loan 16,000 First Corporate Sedan Vendor 4,075 Fred Massimo Loan 26,500 Hanover Communications Publicist 132,410 Law office of Kral, Clerkin Legal Services 13,830 Lockwood Trade Journal Vendor 5,500 Michael Guerre Loan 21,500 NALA Consulting Guarantee 171,576 PROP Mechanical, Inc. Vendor 7,828 Praxis Int'l Vendor 8,287 Richard Krasilovsky Loan 22,500 Sion Elmalem Vendor 7,889 Sultana Distributing Loan 134,267 Velvet Records Vendor 8,250 SUN TELEVISION: Taps Nassi/Alco/Hilco Venture For GOB Sales ----------------------------------------------------------- Sun Television & Appliances, Inc. has selected a joint venture of Nassi Group LLC, Alco Capital Group, and Hilco/Great American Group as the stalking horse to conduct closing sales at the retailer's remaining stores. The agreement, which is subject to higher bids at an auction next week, guarantees the consumer electronics chain 76% of the cost value of store inventory. Sun filed for bankruptcy on Sept. 16 amid a liquidity crunch and later received court approval to close 29 of its 59 stores. Gordon Brothers Retail Partners LLC won the auction to handle those closing sales by guaranteeing 76.4% of store inventory worth an estimated $37.8 million. On Monday, citing weak performance and the lack of vendor support, the retailer announced its decision to liquidate and said closing sales at the remaining locations are expected to wrap up by the end of the year. (Federal Filings Inc. 06-Nov-98) TVX GOLD: Reports Production Improving -------------------------------------- TVX Gold Inc. reported net earnings of US$0.1 million in the third quarter of 1998, compared to net earnings of US$1.6 million in the same quarter a year ago. The company's share of gold equivalent production was 138,200 ounces (72,800 ounces of gold and 3.8 million ounces of silver) in the quarter, a 30 per cent increase over the 106,600 ounces (89,400 ounces of gold and 1.2 million ounces of silver) produced in the third quarter last year. Total cash costs were 15 per cent lower in this quarter at US$182 per ounce compared to US$213 in the third quarter last year. Both production and cash costs continued to improve in the third quarter compared to the first six months of the year when 106,900 and 114,400 ounces of gold equivalent were produced at cash costs of US$210 and US$188 in the first and second quarters respectively. Revenue and operating cash flow were US$40.6 million and US$14.6 million in this quarter compared to US$45.8 million and US$20.5 million in the corresponding quarter last year. Metal prices reported in the third quarter were US$311 per gold equivalent ounce (US$374 for gold and US$4.00 for silver) compared to US$368 (US$380 and US$4.50) in the same quarter the previous year. Production in the quarter was above plan and cash costs per ounce were lower than plan at four of the company's five joint ventures. Difficulties at the company's Brasilia mine's new recovery plant continued during the period. The annual production forecast at Brasilia has been reduced by 50,000 ounces, 25,000 ounces being the company's 49 per cent share, and consequently the company revised its 1998 forecast from 530,000 gold equivalent ounces to 505,000 ounces. Continued strong cost performance at the company's 50 per cent owned and operated New Britannia mine coupled with similar performances at the company's other joint ventures, offset Brasilia's increased cash costs and maintain the company's forecast at less than US$200 per ounce. The final bankable feasibility study on the (Greek) Skouries gold copper porphyry deposit was completed in September by Kvaerner Metals. The study estimates construction costs of US$240 million (in mid-1998 terms) before confirmation of European Union grants estimated at up to 40 per cent of capital costs. The bankable feasibility study incorporates a three stage mining plan with open pit used in the initial years, sub- level caving in the middle years and block caving in the later years. Production in the first five years is expected to average approximately 200,000 ounces of gold and 35,000 tonnes of copper per year, with a cash operating cost of less than US$25 per ounce, net of copper credits at US$0.80 per pound. VISTA PROPERTIES: Files Pension Fund Trustee's Plan --------------------------------------------------- In a current report filed with the SEC, Vista Properties filed a copy of the pension fund trustee's first amended plan of reorganization (August 26, 1998) amending the Form 8-K previously filed on October 2, 1998. A full-text copy of the filing is available via the Internet at: http://www.sec.gov/Archives/edgar/data/0000914317-98- 000652.txt WESTBRIDGE CAPITAL: Amends Plan For Underwriter Claims ------------------------------------------------------ With the sole objection withdrawn, the court last week approved Westbridge Capital's amended disclosure statement and set a Dec. 17 confirmation hearing. Underwriters Forum Capital Markets L.P. and Raymond James & Associates Inc. had objected to the original disclosure statement on numerous grounds and promised to similarly object to the insurance holding company's reorganization plan according to their Oct. 21 filing. The objection was withdrawn, however, with an agreement that the underwriters would receive an allowed general unsecured claim of up to $250,000. Forum Capital and Raymond James are defendants in a class action suit against Westbridge and others for alleged fraud and misrepresentation. Under the amended plan, the underwriters' claims will include those asserted for "reimbursement, contribution or indemnification (including pursuant to any indemnification agreement) on account of or relating to a Claim for damages or rescission arising out of the purchase or sale of 7 1/2/% Convertible Notes or 11% [senior notes], to the extent that such Claims arise in connection with the Putative Class Action and the Final Settlement Agreement." (Federal Filings Inc. 06-Nov-98) *********** The Meetings, Conferences and Seminars column appears in the TCR each Tuesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Bond pricing, appearing each Friday, is supplied by DLS Capital Partners, Dallas, Texas. S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter, co- published by Bankruptcy Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc., Washington, DC. Debra Brennan and Lexy Mueller, Editors. Copyright 1998. All rights reserved. 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 * * *