/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/981215.MBXT R O U B L E D C O M P A N Y R E P O R T E R Tuesday, December 15, 1998, Vol. 2, No. 244 Headlines AHERF: Accused Of Raiding Affiliates AMERICAN RICE: Term Sheet Agreed To; Exclusivity Extended BN1 TELECOMMUNICATIONS: Court Grants Sale Motion BOSTON CHICKEN: Nasdaq Delists Common Stock and Bond Issues BRUSH CREEK: Holds Upbeat Conference Call with Shareholders CARSON PIRIE: Bank One to Pay Carson $42.5 Million CENTENNIAL COAL: Applies to Retain Greenebaum Doll CHEMTRAK INCORPORATED: Files for Chapter 11 Protection CIAO CUCINA: Files for Chapter 11 Protection in Cincinnati CML GROUP: NordicTrack Auction Nets $12.5 Million CODED COMMUNICATIONS: Files for Chapter 11 Protection COMMERCIAL FINANCIAL: Debt Collector Files for Chapter 11 CRIIMI MAE: Seeks Approval of Use of Collateral DALT'S RESTAURANTS: Sold to Carlton Restaurants DOMINION BRIDGE: Granted Extension to Submit Proposal FIESTA OLE: Chapter 11 Case Converts to Liquidation FSM MARKETING: Communications Firm Files for Bankruptcy GANTOS, INC.: Registering 375,000 Shares for Open Trading GOLDEN BOOKS: Update On Restructuring Efforts GREATE BAY: Seeks Approval of Employment Agreement HOMEPLACE STORES: Taps Milbank, Tweed LYKES BROTHERS: Switches Flags in Atlantic, Cargo at Risk MAIDENFORM: Bar Date Set For January 15, 1999 MOBILEMEDIA CORPORATION: Disclosure Statement Approved NEXAR TECHNOLOGIES: Company Predicts Insolvency Looms NU-KOTE HOLDING: Creditors Committee Appointed OKURA & CO: Seeks Sale of A.F. Seideman PENN TRAFFIC: Taking Steps to Restructure Balance Sheet PLANET HOLLYWOOD: Lenders Restrict Credit Availability R&S/STRAUSS: Seeks Exclusivity Extension With New CEO RAND ENERGY: Latimer To Replace Rand RAND ENERGY: Seeks Compromise With Domain Energy RIO GRANDE: Seeks Time to Assume or Reject Leases SCOTT CABLE: Government Defeats Plan Confirmation SINGING MACHINE: Files Annual Earnings Report SOUTHERN PACIFIC: Intends To Employ KPMG Peat Marwick SYQUEST: Offering Customers On-Line Technical Support TECHNIMAR INDUSTRIES: Hearing on Motion To Dismiss/Convert VENTURA PORT: Chapter 9 Case is Completed VOICE IT: Application Approved To Retain Accountant YOUNG MINDS: Announces Plan of Reorganization Meetings, Conferences and Seminars ********* AHERF: Accused Of Raiding Affiliates ------------------------------------ The Pittsburgh Post-Gazette reports on December 8, 1998 that in the latest twist in the saga of a fallen empire, the two top ousted officers of the bankrupt Allegheny health system have been accused of raiding $65.2 million in restricted funds from Forbes Health System and Allegheny Valley Hospital to pay off a bank loan. Forbes and Allegheny Valley say former Chief Executive Officer Sherif Abdelhak and former Chief Financial Officer David McConnell diverted the funds in late April, when a Mellon Bank-led lending consortium demanded an $89 million payment after the financially hemorrhaging Allegheny Health, Education and Research Foundation violated terms of the loan. To raise the money, Abdelhak directed McConnell to "liquidate sufficient funds" from an account set aside to finance property replacement and renovation at Forbes and Allegheny Valley, as well as from other unspecified AHERF sources, according to an April 22 memo filed yesterday with the U.S. Bankruptcy Court by Forbes and Allegheny Valley. The memo authorizes McConnell to seize the money despite the lack of board approval, and to replace it with AHERF endowments or other restricted funds that, presumably, could not be made available immediately. Forbes and Allegheny Valley, collectively called Allegheny University Medical Centers, say neither their separate boards of directors nor their senior executives were informed of the action. Several current and former AHERF directors, including developer Ira Gumberg, former head of the parent board's audit committee, have said directors were unaware of the loan until informed after the fact by Abdelhak. "I was stunned when I heard," Gumberg, also a Mellon board member, told the Post-Gazette editorial board last week. Anthony Sanzo, who replaced Abdelhak as AHERF's chief executive, said the action violated a resolution passed earlier this year prohibiting the transfer of funds from the parent organization's Western hospitals without review. AHERF would not comment beyond the filing, but sources familiar with the situation said McConnell essentially took cash out of Forbes and Allegheny Valley and replaced it with restricted funds and I.O.U.'s from other affiliates and the parent company. AHERF subsequently filed for bankruptcy. Forbes and Allegheny Valley made their accusations in a joint proof-of-claim filing in which they are seeking repayment of the funds taken from them - $45 million from Forbes and $20.2 million from Allegheny Valley. Allegheny General also has said it anticipates making a proof-of- claim filing related to the Mellon loan repayment. Creditors in the AHERF bankruptcy must file claims to get in line with the tens of thousands of other lenders and suppliers owed an estimated $1.5 billion. Abdelhak, reached at his home by phone, would not comment. A message was left on McConnell's home phone seeking comment. In their filing, Forbes and Allegheny Valley, which both merged into AHERF in early 1997, said they took steps to protect their funds and the raid on their accounts violated the merger agreement. At the time of the raid, losses were mounting at AHERF and its Philadelphia hospitals, and a deal to sell six of its nine Eastern Pennsylvania hospitals was falling through. Repayment of the Mellon loan only worsened the Allegheny organization's deteriorating condition, leading some to charge that the Pittsburgh-based bank hastened AHERF's collapse. Frank Cahouet, the Mellon Bank chairman and Allegheny General chairman who is heading an effort to rescue the hospitals, last week maintained that he was unaware of the loan or the repayment. Representatives from Mellon and the three other banks in the consortium - Toronto Dominion, Bank One and First Chicago - had been negotiating for weeks with top AHERF executives to restructure the terms and push back a payment date when the demand was made for full and immediate repayment. AMERICAN RICE: Term Sheet Agreed To; Exclusivity Extended --------------------------------------------------------- Federal Filings, Inc., reports that American Rice, Inc., won an extension of its exclusive period for filing a reorganization plan to Jan. 31 after telling the court that the company has negotiated a term sheet with the holders of its 13% first mortgage notes due 2002. The rice processor is negotiating revisions to the term sheet, and will soon seek to negotiate that plan with the creditor constituencies in this case, according to the company. Given the size and complexity of the Chapter 11 case, "an intelligible, constructive and consensual plan of reorganization could not feasibly be filed within the 120 day period established by [Bankruptcy Code section 1121]." Citing its progress to date, American Rice noted it has sold its unprofitable olive business, settled its litigation with Tenzer Co. over a real estate venture in Houston, established financing agreements with secured creditors, and responded to numerous creditor requests for adequate protection and automatic stay relief. BN1 TELECOMMUNICATIONS: Court Grants Sale Motion ------------------------------------------------ Despite the objections of the Creditors' Committee, the court finds that the FirstCom bid for the assets of BN1 Telecommunications will yield the highest and best value to the estate for the assets to be transferred. The debtor's sale motion is granted and all objections have been withdrawn. BOSTON CHICKEN: Nasdaq Delists Common Stock and Bond Issues ----------------------------------------------------------- As widely reported, the Nasdaq delisted the common stock and bond issued in Boston Chicken, Inc., after a hearing last week. BOSTQ stock has traded for less than a dollar- per-share for months. The Nasdaq has threatened to delist Boston Chicken since August. "Bond holders may soon be handed all of the equity in the company to satisfy the $625 million in debt owed to them. Such a move would leave shareholders with nothing," one published report indicated. The company's securities will continue to be quoted by the National Quotation Bureau (also known as the "Pink Sheets" and the "Yellow Sheets"). BRUSH CREEK: Holds Upbeat Conference Call with Shareholders ----------------------------------------------------------- Brush Creek Mining and Development, Inc. (Nasdaq: BCMDE), told the press about a one-half hour conference call held with its shareholders last week. The purpose of the call was to discuss the significant progress the company has reached in settling its financial and legal problems, the status of the company's listing with Nasdaq SCM, the announced 10 for 1 reverse stock split and the other items scheduled to come before the shareholders at the rescheduled Special Meeting of Shareholders now to be held on Saturday, January 30, 1998 at 1:00 p.m. (in order to give the maximum opportunity for shareholders to attend and for the proxy solicitation materials to reach the shareholders holding stock in street name). Mr. Stockett emphasized that the company is now positioned to achieve a dramatic step forward after recovering from the brink of bankruptcy, which it no longer anticipates as an option. The company plans to complete its acquisitions of U.S. Cement and McLaughlin Engineering and will be seeking shareholder approval by proxy solicitation. CARSON PIRIE: Bank One to Pay Carson $42.5 Million -------------------------------------------------- Bank One Corp. agreed to pay $42.5 million to Milwaukee- based Carson Pirie Scott & Co. to settle claims that Bank One officials in Wisconsin improperly removed funds from Carson's accounts just before it filed for bankruptcy, according to a report appearing in the Milwaukee Sentinel & Journal. The settlement between Bank One Wisconsin and Carson, a unit of Saks Inc., was approved Wednesday by a judge in U.S. Bankruptcy Court in Milwaukee, coming a little more than a month after the U.S. Supreme Court rejected Bank One's appeal of lower court rulings that Carson Pirie's predecessor company was entitled to recover $37.6 million removed from its bank account just before its Chapter 11 filing in 1991. Carson Pirie Scott also was seeking $24 million in interest, according to the Sentinel & Journal. Proffitt's Inc. acquired both the Carson Pirie Scott and Saks chains earlier this year for a total of $3.62 billion in cash, stock and assumed debt. The company then changed its name to Saks Inc. CENTENNIAL COAL: Applies to Retain Greenebaum Doll -------------------------------------------------- The debtors, Centennial Coal Inc. and its affiliates seek court authorization to employ and retain Greenebaum Doll & McDonald PLLC as special counsel to the debtors. The debtors are requesting such authorization to retain Greenebaum as special counsel to advise the debtors with respect to certain matters of Kentucky law arising in connection with the continued operation of the debtors. Sidley & Austin and Young Conaway are acting as reorganization co-counsel for the debtors. Greenebaum has indicated a willingness to act on the debtors' behalf at its normal and customary rates for matters of this type, which range from $360 per hour form members and $25/hour for clerks. CHEMTRAK INCORPORATED: Files for Chapter 11 Protection ------------------------------------------------------ On November 23, 1998, ChemTrak Incorporated filed a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The petition was filed in the U.S. Bankruptcy Court for the Northern District of California (Case No. 98-59473 asw) in San Jose, California. The directors and officers of the Company remain in possession of the Company's Assets and business. CIAO CUCINA: Files for Chapter 11 Protection in Cincinnati ---------------------------------------------------------- Ciao Cucina Corporation (OTC BBS: CIAO) filed to reorganize under Chapter 11 of the federal Bankruptcy Code last week. The filing was made in the U.S. Bankruptcy Court for the Southern District of Ohio. The Company's downtown Cincinnati and Washington, D.C., restaurants will remain in operation following finalization of a new financing agreement. The Harper's Point and Cleveland restaurants were each sold in separate transactions, the terms of which were not disclosed. In conjunction with the filing, Ciao Cucina hired Elliot H. Jablonsky as President of the Company, replacing Dean DiGiacinto. Mr. Jablonsky will lead the Company through the reorganization. Mr. Jablonsky announced that, "Ciao Cucina Corporation's revised business plan will allow the Company to develop its two leading restaurants in Cincinnati and Washington, D.C. The reorganization period will provide us with time to resolve certain issues, including a lawsuit for over $2 million that was recently filed by the City of Coral Gables, Florida." The lawsuit was filed in connection with a lease agreement for the development of a new restaurant that the Company was not able to pursue. Mr. Jablonsky continued, "The success of our open restaurants should set the stage for Ciao Cucina to emerge from reorganization as a stronger company." Mr. Jablonsky founded and owned the Cactus Pear, a company with two Cincinnati restaurants. He has participated in several other successful Cincinnati area restaurants including the Waterfront, Tellers of Hyde Park and Watson's Brew House. In addition, Mr. Jablonsky has assisted with the development and operation of Cafe Odyssey, located in Minneapolis at the Mall of America and at the Pavilions in Denver. Further management changes include the election of Bridget Ringel to Director of Operations and Assistant Secretary and the resignation of Marvin Rosenberg as a director of the Company. Ringel previously served as manager of the downtown Cincinnati Ciao Cucina location DiGiacinto, while continuing to oversee Scalea's, the successful restaurant he opened last year with the popular Chef Anita Hirsch, served as President of Ciao Cucina Corporation during the period that the board reviewed long-term options for the Company. Jablonsky expressed thanks for the efforts of DiGiacinto and other members of Scalea's management, who assisted in the evaluation efforts. The Ciao Cucina restaurants offer an innovative Italian Mediterranean menu with daily chef's specials, an extensive wine list and gourmet antipasti buffet. CML GROUP: NordicTrack Auction Nets $12.5 Million ------------------------------------------------- Stalking horse bidder Icon Health & Fitness Inc. won a "spirited" auction Wednesday for NordicTrack's assets with a $12.5 million offer, nearly double Icon's initial bid, Federal Filings, Inc., reported yesterday. The cash purchase price is $9.5 million plus a royalty expected to total $3 million over the next several months. In placing a value on the royalty for court purposes, NordicTrack gave an estimate of $1 million since the $3 million isn't guaranteed. Icon, a NordicTrack creditor, agreed to buy the company's inventory of finished and refurbished goods, work-in-process and parts, trademarks and trade names and other intellectual property, as well as certain contracts. NordicTrack had estimated the actual value of the assets at $10.1 million: $5.8 million for finished goods; $817,867 for refurbished goods; and $3.5 million for work-in-process and parts. CODED COMMUNICATIONS: Files for Chapter 11 Protection ----------------------------------------------------- Coded Communications Corporation of Delaware advised the SEC in a Form 8-K filing that it and its wholly-owned subsidiaries, Coded Mobile Communications, Inc. and Decom Systems, Inc., filed petitions for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on December 10, 1998. COMMERCIAL FINANCIAL: Debt Collector Files for Chapter 11 --------------------------------------------------------- Commercial Financial Services (CFS), a Tulsa, Okla.-based debt collecting company, filed for bankruptcy protection late Friday, according to the Associated Press. Oklahoma regulators recently began an investigation of the company, which buys delinquent credit card debt at low prices from 15 of the country's largest banks and then tries to coax debtors into paying those debts. CFS said in a statement that it filed for bankruptcy after one of its creditors filed a lawsuit. CFS pioneered the process of pooling delinquent accounts and offering them as asset-backed bonds. The company came under investigation after an anonymous letter was sent out to credit rating firms in October. The letter, questioning collection rates, alleged that money coming into some of the delinquent accounts actually came from those selling accounts and not from getting the debtors to pay. CFS began an internal investigation when the letter became public. CFS, founded in 1986, collected $954 million from debtors last year, compared to about $274 million in 1996. (ABI 14-Dec-1998) CRIIMI MAE: Seeks Approval of Use of Collateral ----------------------------------------------- On December 4, 1998, the debtor, CRIIMI MAE Inc., et al, filed a motion seeking to use collateral pursuant to the terms of a Stipulation and Agreed Order between CRIIMI MAE, Inc. ("CMI") and German American Capital Corporation ("GACC"). The Stipulation provides that the debtors are authorized to use GACC's cash collateral to the extent and upon the terms agreed to by the parties. As of the Petition Date, the outstanding principal balance of the GACC Loan is approximately $177,508,216. Pursuant to the agreement, CMI pledged its interest in certain securities identified in the schedule to the Stipulation. The securities generate proceeds, dividends, distributions and income periodically, which is paid to GACC or the debtors, as the case may be, on a monthly basis. CMI alleges that the value of the securities is substantially in excess of the GACC Loan and to the extent that GACC holds a validly perfected security interest in the securities and income, GACC is adequately protected against any loss by the value of the Securities in excess of the GACC Loan. DALT'S RESTAURANTS: Sold to Carlton Restaurants ----------------------------------------------- Carlton Restaurants Worldwide Inc., Dallas, which owns the TGI Friday's restaurant chain, announced it has finalized the purchase of four Dalt's, Inc., sites, satisfying its $3 million claim against its former division; the Dalt's chain has company-owned restaurants in Worthington, Ohio; Burbank, Calif.; Nashville, Tenn., and Indianapolis, Business First reported. Worthington-based investors gained control of Dalt's from TGI Friday's in early 1995 for about $7 million with plans to expand the chain. Dalt's filed for chapter 11 in Indianapolis on May 28 after double-digit sales declines. Dalt's had listed assets of $4.26 million and secured debt of $4.9 million and unsecured debt of $1.3 million. TGI Friday's was the largest secured creditor, and it took over management of the four corporate restaurants the day after the bankruptcy filing. Carlson plans to keep Dalt's operating as a separate entity, rather than fold them into the TGI Friday's chain. (ABI 14-Dec-1998) DOMINION BRIDGE: Granted Extension to Submit Proposal ----------------------------------------------------- Canadian Corporate News reports that Dominion Bridge Corporation and its subsidiaries (Cedar Group of Canada and Davie Industries Inc.) were granted a new delay, until January 22, 1999, to file their Proposal to their respective creditors, pursuant to notices of intention filed on August 11, 1998, under the Bankruptcy and Insolvency Act. FIESTA OLE: Chapter 11 Case Converts to Liquidation --------------------------------------------------- Early this month the bankruptcy court converted Fiesta Ole Fast Food Chain's chapter 11 case to a chapter 7 proceeding for liquidation, according to The Post Register. The Idaho-Falls, Idaho-based fast food chain has closed five of its restaurants and a trustee has been appointed to administer the property for the court. FSM MARKETING: Communications Firm Files for Bankruptcy ------------------------------------------------------- FSM Marketing Communications, Louisville, Ky., previously known as Fessel, Siegfriedt & Moeller, has filed for chapter 7 protection with assets of $230,000 and liabilities of $692,510, according to Business First. Kupper Parker Communications, a St. Louis ad agency, was to acquire the agency this past summer, but FSM's financial problems led Kupper to purchase only FSM's advertising accounts and office furnishings. Although Kupper was reluctant to provide details, it did state that FSM ran into financial difficulties when two of its clients filed for bankruptcy. Kupper Parker hired FSM's staff and is operating as Kupper Parker Communications FSM. (ABI 14- Dec-1998) GANTOS, INC.: Registering 375,000 Shares for Open Trading --------------------------------------------------------- On behalf of Elliott Associates, L.P, NBD Bank, Gordian Group, L.P., Cardinal Recovery Partners, and Argyle, L.T.D., holding approximately 96% of certain bonds issued by Gantos, Inc., the Company has filed a Registration Statement with the SEC to register the noteholders' shares and warrants for trading in the open market. GOLDEN BOOKS: Update On Restructuring Efforts --------------------------------------------- Golden Books Family Entertainment, Inc. (NASDAQ-GBFE) (the "Company") updated the market on its ongoing restructuring efforts. While the Company continues its discussions with the Steering Committee representing the holders of its 7.65% Senior Notes due 2002, representatives of the 8.75% Convertible Trust Originated Preferred Securities due 2016 (the "TOPrS"), and other creditor constituencies in connection with a possible restructuring of its indebtedness, the Company is not proceeding with the transactions outlined in its press release of November 5, 1998. The Company has paid and will continue to pay its trade obligations. Golden Books Family Entertainment, Inc., is the leading publisher of children's books in North America and owns one of the largest libraries of family entertainment copyrights. The Company creates, publishes and markets entertainment products for children and families through all media. GREATE BAY: Seeks Approval of Employment Agreement -------------------------------------------------- A hearing has been set for January 4, 1999 at 10:00 am before the Honorable Judith H. Wizmur, for the motion of the debtors, Greate Bay Hotel and Casino, Inc., GB Holdings, Inc., and GB Property Funding Corp., authorizing the debtor to enter into an employment agreement with John P. Belisle as President and CEO. Belisle began working for the debtor in July 1998. The principal terms of the agreement are a term of one year, retroactive to July 28, 1998, a salary of $450,000, and other benefits. The previous president, Richard Knight, was removed as CEO of the Sands in retaliation for the rejection of a certain burdensome Management Agreement. However, Knight spent less than 50% of his time at GBHC and Knight's reductions in credit and marketing were viewed negatively by the remainder of GBHC's executive management and mid and line level personnel as jeopardizing the customer base of GBHC. HOMEPLACE STORES: Taps Milbank, Tweed ------------------------------------- Homeplace Stores, Inc. and its three corporate affiliates are seeking authorization to retain and employ Milbank, Tweed, Hadley & McCloy as of November 18, 1998 as counsel for the debtors. Milbank will render general legal services as needed, including bankruptcy/restructuring, corporate, tax, finance litigation, real estate and securities assistance and advice. The firm will charge for its legal services on an hourly basis. The attorney expected to have primary responsibility for this case charge between $490 per hour and $140 per hour. LYKES BROTHERS: Switches Flags in Atlantic, Cargo at Risk --------------------------------------------------------- In a move that will drastically reduce its U.S.-flag dependency and jeopardize its ability to carry government cargo, the Journal of Commerce reports, the Tampa-based Lykes Lines will begin using four foreign-flag vessels in January on its North Atlantic service, citing a senior industry source. The four new vessels, each reportedly capable of carrying about 1,700 20-foot container units and likely to be chartered, are expected to replace three U.S.-flag ships currently run by Lykes on its Sprint service. Those vessels, each capable of carrying some 2,100 TEUs and under charter from Crowley Maritime Corp., have been sold to the Military Sealift Command. Lykes was forced to find the new capacity because its charter agreements with Crowley will end with the sale. The reduction in U.S.-flag capacity is expected to severely hamper Lykes' ability to bid for dwindling, yet lucrative, cargo preference shipments required to move on U.S.-flagged, -built and -crewed vessels. Lykes had been the largest-volume carrier of that cargo, which includes military shipments and food aid, before it filed for bankruptcy protection in 1985 and was sold to CP Ships. MAIDENFORM: Bar Date Set For January 15, 1999 --------------------------------------------- In the case of Maidenform Worldwide, Inc., et al, the Court established January 15, 1999 at 5:00 PM as the last date time for filing proofs of claim against the debtors. MOBILEMEDIA CORPORATION: Disclosure Statement Approved ------------------------------------------------------ MobileMedia Corporation announced that its Disclosure Statement was approved by Judge Walsh sitting for the U.S. Bankruptcy Court for the District of Delaware. The approval of the Disclosure Statement will allow the Company to distribute its Third Amended Plan of Reorganization (the Plan) to its creditors for a vote and, once approved by its creditors and the Court, will allow the Company to move forward to complete its merger with Arch Communications Group, Inc. (Nasdaq:APGR) and exit Chapter 11. MobileMedia said that the Plan has the support of its Official Committee of Unsecured Creditors. The Plan and the Disclosure Statement reflect the terms of the Company's proposed merger with Arch, and are scheduled to be distributed to MobileMedia's creditors no later than Dec. 24, 1998. The deadline for voting on MobileMedia's Plan of Reorganization is Jan. 27, 1999 and the Court has set Feb. 3, 1999 as the hearing date for confirmation of the Plan. The merger with Arch will create the nation's second largest paging company with more than 7 million units-in-service throughout the United States. The Plan and the merger are subject to various conditions, including Court, regulatory and Arch shareholder approvals. "The approval of the Disclosure Statement is one of the final steps to enable MobileMedia to emerge from bankruptcy," said Joseph A. Bondi, Chairman-Restructuring of MobileMedia and a managing director of turnaround consultants Alvarez & Marsal, Inc. "The proposed merger with Arch will be a very successful conclusion to our reorganization and we look forward to emerging from Chapter 11 as part of a larger, stronger company that is well-positioned to compete successfully in today's wireless messaging market." C. Edward Baker, Jr., Arch's Chairman and Chief Executive Officer, said, "With today's Court approval of MobileMedia's Disclosure Statement, and Arch's plan to distribute Proxy Statements to our shareholders next week, both companies look forward to receiving all necessary approvals soon and proceeding toward a merger closing in February 1999." MobileMedia filed a voluntary petition for Chapter 11 under the U.S. Bankruptcy Code on Jan. 30, 1997. MobileMedia and Arch announced their intention to merge on Aug. 20, 1998. NEXAR TECHNOLOGIES: Company Predicts Insolvency Looms ----------------------------------------------------- Nexar Technologies Inc., announced last Thursday that due to the company's inability to obtain new financing and concern among its creditors, Nexar anticipates that it will soon commence insolvency proceedings. In addition, Nexar anticipates its common stock will be delisted from The Nasdaq Stock Market as early as Friday, Dec. 11, 1998 due to the company's failure to satisfy Nasdaq listing requirements. Upon delisting from Nasdaq, the company's stock may continue to be traded over-the-counter until any such insolvency proceedings are resolved, although the company warned that it could not ensure that such trading would occur or continue. NU-KOTE HOLDING: Creditors Committee Appointed ---------------------------------------------- The U.S. Trustee appoints the following members to the Official Unsecured Creditors Committee in Nu-kote International, Inc. 1. Clyde Williams, President Williams Die & Mold 2. Don Weingarten, Assistant Treasurer Cresent 3.Roger Botting, Pres. Regina Botting, Treas. Cargo UK, Inc. 4. Craig Ichinose, President Sercomp Corporation 5. Henry Venturoni, National Sales Manager Radex Imaging International OKURA & CO: Seeks Sale of A.F. Seideman --------------------------------------- Okura & Co.(America), Inc., has filed a motion which seeks entry of an order authorizing the debtor to enter into a certain letter agreement with Mike Schall dated October 12, 1998 pursuant to which Schall will be paid $805,000 to the debtor: (1) for the debtor's 2,00 shares of common stock of A.F. Seideman, Co., inc. and (2) in full satisfaction of Seideman's financial obligations to the debtor which total approximately $803,000. By filing its motion, the debtor is soliciting competing offers for the purchase of the interests. A hearing is scheduled on December 29, 1998 at 9:30 am in the US Bankruptcy Court, Southern District of New York, Alexander Hamilton Custom House, One Bowling Green, NY. The debtor has marketed the assets to prospective purchasers, and has received no bids other that the Schall bid. Shall is the key employee of Seideman and Seideman has considerably less value without Schall. PENN TRAFFIC: Taking Steps to Restructure Balance Sheet ------------------------------------------------------- Financially-troubled Penn Traffic Co., based in Syracuse, announced its plans to convert a substantial portion of its hefty $1.6 billion debt load to stock. The move would reduce Penn Traffic's interest expenses and free up more money to fund its struggling grocery and wholesaling operations, noted the Buffalo News. Penn Traffic Chairman Gary D. Hirsch said the company has begun working with a committee comprised of holders of principal amounts of more than 40% of its senior notes, and 50% of its subordinated notes for the purpose of negotiating a consensual restructuring of its outstanding securities. In return, the informal committee has agreed to support full repayment to the company's trade creditors. In addition, Fleet Bank, which is the agent for Penn Traffic's $250 million secured revolving credit facility, has signaled its support for the company's restructuring attempts. "These are important steps for the company," Hirsch told the Buffalo News. "We are encouraged that a consensual restructuring can be achieved, thereby reducing our debt obligations and enhancing (our) ability to operate profitably in the future." Hirsch served as CEO for when Grand Union deleveraged its balance sheet through a pre-packaged chapter 11 plans. PLANET HOLLYWOOD: Lenders Restrict Credit Availability ------------------------------------------------------ Planet Hollywood International Inc., Orlando, Fla., announced that its lenders have cut the company's borrowing power and are requiring the company to put its headquarters up for sale, The Wall Street Journal reports. Recently the restaurant chain cut 70 employees from its corporate staff and said that although management expects that operating cash flow can pay expenses and service debt obligations, it obtained bank waivers after violating certain lending covenants in recent months. Last week, the lenders, led by SunTrust Bank Central Florida NA, canceled the company's $65-million multi-currency revolving credit agreement and amended a $35 million leveraged-lease facility that must be paid off by June 30. At the end of the third quarter, Plant Hollywood reported it was carrying $258.9 million in debt and $327 million in shareholders' equity on its books. (ABI 14-Dec-1998) R&S/STRAUSS: Seeks Exclusivity Extension With New CEO ----------------------------------------------------- R&S/Strauss Inc. has rehired its former chief executive officer and asked for a 60-day extension of its exclusive period to file a reorganization plan, through Feb. 9. "The Debtors and their professionals are continuing to conduct due diligence, financial analysis and other related work attendant to the evaluation of potential business combinations or transactions with third parties, including potential acquirers of the Debtors or their assets," the auto parts retailer asserted in its recent motion. The company also is exploring a stand-alone plan. In addition, R&S noted that it has closed 17 under-performing stores since filing for Chapter 11 in June and made strides in normalizing trade credit. Under an arrangement approved last month, the retailer posts a $3 million letter of credit in favor of MEMA Financial Services Group Inc. for the benefit of vendors who extend credit on normalized trade terms. A hearing on the exclusivity extension request is set for Dec. 23. (ABI and Federal Filings, Inc. 14-Dec-1998) RAND ENERGY: Latimer To Replace Rand -------------------------------------- The debtor, Rand Energy Company, seeks to reject the employment agreement with Jeffrey S. Rand, President of Rand Energy Company. Rand's salary was $500,000 per year. In October, 1998, the debtor's Board of Directors decided to replace the debtor's existing management with James R. Latimer, II as the debtor's new CEO. Latimer will receive a salary of $30,000 per month for an initial term of six months, with an option to extend such term for an additional six months. The debtor hired Latimer as its President and CEO on October 25, 1998 and he immediately began providing services to the debtor. RAND ENERGY: Seeks Compromise With Domain Energy ------------------------------------------------ The motion of Rand Energy Company, debtor, is set for hearing before the Honorable Steven Felsenthal on December 11, 1998 at 9:30 AM. Rand Energy Corporation files this motion to compromise controversies with Domain Energy Production Corporation related to Operating Agreement, FarmOut Agreement and Motion to Transfer Interest to Domain free and clear of liens, claims, and other interests. The compromise requires the debtor to transfer its working interests in the prospects and leases in the New State 28 Prospect to Domain. The debtor agrees to assign and assume the FarmOut agreement with Collins & Ware to Domain. Without this agreement, the debtor would resign as the operator under the State 28 Operating Agreement and Domain would become the operator. The debtor recognizes that it does not have the current financial ability to pay drilling expenses for exploratory wells on and around the State 28 Prospect. If the Operating Agreement remains in effect without modification, the debtor is in danger of losing its working interests in certain leases in the State 28 Prospect by being in non-consent status. The compromise removes the debtor's obligation and provides the debtor with overriding royalty interests I exchange for debtor's transfer of its working interests to Domain. Under the compromise, an area of mutual interest is created in the New State 28 Prospect and the debtor is granted a 3% overriding royalty interest in any farmout or lease rights obtained by Domain in the area of mutual interest for a period of three years. RIO GRANDE: Seeks Time to Assume or Reject Leases ------------------------------------------------ Rio Grande, Inc. and its debtor affiliates filed a motion to extend the time for the debtors to assume or reject unexpired leases of non-residential real property. The debtors are parties to a number of oil and gas leases which may be argued to be non-residential real property leases. According to the debtor, the oil and gas leases are valuable assets and are integral to the continued operation of the debtors' business. The sixty day deadline to assume ore reject the leases expires on January 11, 1998. The debtors intend to file a plan of reorganization which will assume each oil and gas lease. Debtors seek an order extending the time within which to assume or reject the oil and gas leases through the confirmation of a plan of reorganization. SCOTT CABLE: Government Defeats Plan Confirmation ------------------------------------------------- The bankruptcy court denied confirmation of Scott Cable Communications, Inc.'s chapter 11 reorganization plan Friday and ruled in favor of the Internal Revenue Service's right to some $30 million in proceeds from the $165 million sale of the cable company's assets, according to a report from Federal Filings, Inc. The court, FedFiles says, heard oral arguments Nov. 23 on plan confirmation from Scott Cable and the U.S. Attorney's Office in Bridgeport, on behalf of the IRS and the Department of Justice. In a sweeping victory for the IRS, the court sustained all three of the government's objections in denying confirmation of Scott Cable's plan. Friday's ruling states that the capital gains tax owed from the proposed sale to InterLink would amount to an administrative expense. Second, the court ruled the plan violates the Anti-Injunction Act. Lastly, the court found that Scott Cable proposed the plan for the principal purpose of tax avoidance. SINGING MACHINE: Files Annual Earnings Report --------------------------------------------- For the year ending March 31, 1998, The Singing Machine Co., Inc., reports a net loss in its Form 10-KSB filed with the SEC last week. A full-text copy of the filing is available at no charge via the Internet at: http://www.sec.vog/cgi-bin/srch-edgar/SINGING+adj+MACHINE As a percentage of total revenues, the Company's net sales in the aggregate to its five largest customers during the fiscal years ended March 21, 1997 and 1998, were approximately 79% and 89% respectively. For the fiscal 1998 period, Target accounted for 36%, J.C. Penney 19%, Fingerhut, 11% and Best Buy, 22%. SOUTHERN PACIFIC: Intends To Employ KPMG Peat Marwick ----------------------------------------------------- The debtor, Southern Pacific Funding Corporation proposes to employ KPMG Peat Marwick LLP for the purposes of providing debtor with accounting services including tax consulting, tax return preparation, and financial statement and report preparation. The application seeks employment effective as of October 1, 1998. During the 90 days before the petition date, the debtor paid KPMG fees of approximately $264,450. A hearing on the application is scheduled for December 22, 1998 at 9:15 AM in courtroom 1 of the US Bankruptcy Court, Suite 700, 1001 S. W. Fifth Avenue Portland, Oregon. SYQUEST: Offering Customers On-Line Technical Support ----------------------------------------------------- Help for users hit by bankrupt SyQuest can now turn to a new Web site at http://www.syquestsupport.comfor technical support. Since November, the official SyQuest Web site has been off-line, leaving users with few places to turn for support. The new Web site offers detailed technical support instructions for Macintosh users and promises Windows support within a week. The site features six areas, including tips, setup instructions, a glossary of terms and a message board for visitors to post questions or share their insight. A news and announcements area lists the current status of SyQuest Technologies official support and recent news stories on the company's situation. TECHNIMAR INDUSTRIES: Hearing on Motion To Dismiss/Convert ---------------------------------------------------------- A motion has been filed by the U.S. Trustee to dismiss or convert the case of Technimar Industries, Inc. A hearing will be held on January 6, 1999 at 9:30 am before the Honorable Robert J. Kressel, in Courtroom 8 West, U.S. Courthouse, 300 S. Fourth Street, Minneapolis, Minnesota. VENTURA PORT: Chapter 9 Case is Completed ----------------------------------------- Ventura Port District, which owns and operates Ventura Harbor in Ventura, Calif., was the first government entity in the Central District of California to file a petition for chapter 9 protection; last week, Bankruptcy Judge Robin Riblet entered a final decree closing the municipal debt adjustment case, according to a news release. The Port District filed chapter 9 in August 1993 after acknowledging that it did not have the money to pay a $15.56 million judgment obtained by Ventura Group Ventures Inc., the assignees of a claim of a former tenant of the district. Pursuant to the chapter 9 debt adjustment plan, the Port District's general unsecured creditors have received their pro rate share of the sum of $7,803.363 from the proceeds of the sale of revenue bonds. In addition, the Port District distributed $950,000 to the California Department of Boating and Waterways. Irving Sulmeyer and David S. Kupetz of Sulmeyer, Kupetz, Baumann & Rothman, Los Angeles, served as counsel to the Ventura Port District. (ABI 14- Dec-1998) VOICE IT: Application Approved To Retain Accountant --------------------------------------------------- By order of the court on December 7, 1998, the debtor, Voice It Worldwide, Inc. is authorized to retain Ehrhardt, Keefe, Steiner & Hottman, PC to render services in regard to the preparation of Federal income tax returns, to advise the debtor as to tax matters, and to assist the debtor in adjusting books of account from which such tax returns may be compiled and advice given. The firm will be compensated upon application to the Bankruptcy Court. YOUNG MINDS: Announces Plan of Reorganization --------------------------------------------- Young Minds, Inc., the self-described "Redlands-based, global leader in UNIX CD-Recordable and CD-Rom mass storage solutions," announced the filing of a plan of reorganization with the United States Bankruptcy Court, Riverside Division. The company incurred severe financial hardship after a failed public offering in 1996, filed for chapter 11 protection and filed a reorganization plan December 7, 1998. The reorganization plan will, the Company explains, restructure approximately $5 million in trade debt among 200 creditors. The plan will also reconfigure the ownership of stock among approximately 100 equity holders. "Since the filing of the Chapter 11, Young Minds has significantly reduced its overhead so that the entity is now producing significant positive cash flow to fund the plan of reorganization," according to Evan Smiley of Albert, Weiland & Golden, LLP, a Costa Mesa-based law firm. As a company with a solid clientele of at least 300 of the Fortune 500 companies, Young Minds has been able to retire substantially all of its secured debt from the post-- bankruptcy positive cash flow." Over the five-year length life of the plan of reorganization, Young Minds projects approximately $29 million in income. The plan will allow the company to emerge from bankruptcy by April, 1999. "The reorganization of Young Minds was made possible because of the loyal support we have received from our customers and our sales and technical support staff," said David H. Cote, chief executive officer of Young Minds, Inc. "Our company intends to return this show of loyalty through the recently announced reorganization which, in turn, will allow us to pay off our creditors. Resources will also be invested in maintaining and upgrading our product line with several exciting announcements planned for 1999 including the enhancement of the CD studio product with 8X recording capacity and the release of DVD Studios." Young Minds maintains a Web site at http://www.ymi.com providing additional information about the company's products, customers and services. ********* Meetings, Conferences and Seminars ---------------------------------- January 9-14, 1999 Law Education Institute Bankruptcy Law Course -- 1999 National CLE Conference Marriott's Vail Mountain Resort, Vail, Colorado Contact: 1-414-228-5810 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 4-6, 1999 AMERICAN BANRKUTPCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, Colorado Contact: 1-703-739-0800 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, 1999 NORTON INSTITUTES ON BANKRUPTCY LAW Norton Bankruptcy Institute I Olympic Park Hotel, Park City, Utah Contact: 1-770-535-7722 March 18-21, 1999 NORTON INSTUTUTES ON BANKRUPTCY LAW Norton Bankruptcy Litigation Institute II Flamingo Hilton Hotel, Las Vegas, Nevada Contact: 1-771-535-7722 March 19, 1999 AMERICAN BANRKUTPCY INSTITUTE Bankruptcy Battleground West Century Plaza Hotel, Los Angeles, California Contact: 1-703-739-0800 March 25-27, 1999 Southeastern Bankruptcy Law Institute, Inc. 25th Annual Southeastern Bankruptcy Law Institute Marriott Marquis Hotel, Atlanta, Georgia Contact: 1-770-451-4448 April 15-18, 1999 AMERICAN BANRKUTPCY INSTITUTE Annual Spring Meeting J.W. Marriott, Washington, DC Contact: 1-703-739-0800 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 June 3-6, 1999 AMERICAN BANRKUTPCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800 July 1-4, 1999 NORTON INSTITUTES ON BANKRUPTCY LAW Western Mountains Bankruptcy Law Institute Jackson Lake Lodge, Jackson Hole, Wyoming Contact: 1-770-535-7722 July 15-18, 1999 AMERICAN BANRKUTPCY INSTITUTE Northeast Bankruptcy Conference Mount Washington Hotel & Resort Bretton Woods, New Hampshire Contact: 1-703-739-0800 August 4-7, 1999 AMERICAN BANRKUTPCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton, Amelia Island, Florida Contact: 1-703-739-0800 September 16-18, 1999 AMERICAN BANRKUTPCY INSTITUTE Southwest Bankruptcy Conference The Hotel Loretto, Santa Fe, New Mexico Contact: 1-703-739-0800 December 2-4, 1999 AMERICAN BANRKUTPCY INSTITUTE Winter Leadership Conference La Quinta Resort & Club, La Quinta, California Contact: 1-703-739-0800 ********* A listing of meetings, conferences and seminars 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 * * *