/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/981216.MBXT R O U B L E D C O M P A N Y R E P O R T E R Wednesday, December 16, 1998, Vol. 2, No. 245 Headlines ACME METALS: Committee Objects to Modification AHERF: Judge Postpones Question Session AMF BOWLING: Statement of Changes in Beneficial Ownership ANKER COAL: Reports Loan and Security Agreement APS HOLDING: Seeks Exclusivity Extension To March 29 AQUA VIE: Requests Return Of Old Stock Certificates BEDFORD FAIR: Fingerhut Acquires Catalog BRUSH CREEK: Reverse Stock Split To Save Nasdaq Listing CELLPRO: Court Approves Acquisition COLUMBIA/HCA: Plans To Spin Off Hospitals COMMERCIAL FINANCIAL: Petition Lists Assets Of $415 Million CONTINENTAL AIRLINES: Underwriting Agreement Reported EDISON BROTHERS: Quarterly Report For Period Ended Oct. 31 FIRST MERCHANTS: Stock Ownership Reported FPA MEDICAL: To Sell Unit To Doctors GLOBAL MOTORSPORT: Amendment To Tender Offer Statement GOLF TRAINING SYSTEMS: Closes Operations GORGES: Accepts Tenders Of Approximately $30 Million GUNTHER INTERNATIONAL: Stock Acquisition Reported HAGERSTOWN FIBER: Dismissal of Case KENILWORTH SYSTEMS: Resumes Plans For "Roulabette" LIBERTY HOUSE: Biz Plan Deadline Extended To January 22 LYNX GOLF: Seeks Order Approving Disclosure Statement MAXICARE HEALTH: Stock Ownership Reported MOBILEMEDIA CORP: Modifies Issuance of Rights and Warrants NEW INDIGO RESOURCES: Interim Results for First Quarter NORD RESOURCES: Legal Action Against Directors/Officers NORTH AMERICAN: Arthur Andersen Quits PENNCORP FINANCIAL: Supplement to Prospectus PITTSBURGH PENGUINS: Judge Approves $20M Loan PONDEROSA FIBRES: Court Lets Exclusivity Expire RDM SPORTS GROUP: Trustee Taps Special Counsel SABACOL INC: Files For Protection Under Chapter 11 SOUTHERN PACIFIC: Committee Fights For CIBC Oppenheimer SOUTHERN PACIFIC: Committee Supports Pentalpha Employ STAR NEWCO: Proposed Sale of Elgen Division For $1.325M TORONTO'S SKYDOME: To Be Auctioned ********* ACME METALS: Committee Objects to Modification ---------------------------------------------- The Official Committee of Unsecured Creditors of Acme Metals Incorporated and five of its subsidiaries files an objection to the motion of the unofficial committee of trade creditors of Alpha Tube Corporation seeking to modify the court's order authorizing the maintenance of the debtor's existing cash management system (among other things). The Official Committee states that the Alpha Creditors choose to ignore the fact that Alpha has been and remains a part of the financially and operationally intertwined family of affiliated debtors from which Alpha has received and could continue to receive benefits. The Committee also states that the terms of the proposed DIP financing will sufficiently protect the interests of Alpha's unsecured trade creditors. The Committee points out that Alpha's obligations to the Lender under the DIP facility will be junior to all prepetition and post-petition trade claims against Alpha and Alpha's chapter 11 administrative expenses. The Committee also states that the Alpha creditors will be protected under the DIP facility by the eligibility requirements to be imposed therein. "Alpha's cash will only continue to upstreamed if the sum of Alpha's Eligible Receivables and Eligible Inventory exceeds 110% of the sum of Alpha's prepetition and post-petition trade debt to non-affiliates and Alpha's chapter 11 administrative expenses." If Alpha's eligible current assets drop below the required amounts, Alpha will cease to participate in the Cash Management System. Thus the terms of proposed DIP facility will ensure that the claims of Alpha's trade creditors are fully protected by current assets which are sufficient to pay them in full. The Committee urges the court to deny the Alpha Trade Creditors' motion to modify the cash management system in its entirety. AHERF: Judge Postpones Question Session --------------------------------------- The Pittsburgh Post-Gazette reports on December 9, 1998 that U.S. Bankruptcy Court Judge M. Bruce McCullough yesterday put off a meeting that he had scheduled to publicly question officers and executives of the Allegheny Health, Education and Research Foundation. In an order that appeared on the court docket late yesterday, McCullough said he would wait to hold the hearing, which had been scheduled for Friday, until after the Office of the U.S. Trustee appointed a trustee to manage the bankrupt foundation. The appointment is expected this week. Objections to the hearing were delivered to court last week from members of AHERF's executive and audit committees as well as from William P. Snyder III, former chairman of the AHERF board, and Dr. Barbara F. Atkinson, former dean of the Allegheny University of the Health Sciences medical school. Anthony M. Sanzo, the chief executive of AHERF at the time of bankruptcy, and Joseph D. Dionisio, AHERF's financial chief at the time, also objected. "The bankruptcy court does not have authority to initiate and to conduct, as principal interrogator, the public inquisition defined by the {order}" Sanzo's lawyer argued in court papers. When McCullough first suggested the meeting in September, he said he wanted to meet with executives and officers to get to the bottom of the foundation's finances. "At some point we're going to have to determine what they were doing and who was doing it," McCullough said at the time. In his formal order in November, the judge said he would not put officers and executives from AHERF under oath but that he would ask them questions. McCullough said that once he finished with his questions, there might be time to open the floor for questions from the public. In either case, McCullough invited the public to submit questions to him in advance of the meeting. AMF BOWLING: Statement of Changes in Beneficial Ownership --------------------------------------------------------- Terence O'Toole and Richard A. Friedman, managing directors of Goldman, Sachs & Co.("Goldman Sachs") and Peter M. Sacerdote, a limited partner of The Goldman Sachs Group, LP report to the SEC that The Goldman Sachs Group, L.P. is the general partner of and owns a 99% interest in Goldman Sachs. Goldman Sachs and GS Group may be deemed to own beneficially and indirectly in the aggregate 29,966,593 shares of Common Stock, par value $.01 per share, of AMF Bowling, Inc. through certain investment partnerships of which affiliates of Goldman Sachs and GS Group are the general partner, managing general partner or managing partner. Goldman Sachs is the investment manager of one or more of the Limited Partnerships. GS Group owns beneficially and directly immediately exercisable warrants to purchase 870,000 shares of Common Stock. AMF Bowling, Inc. Zero Coupon Convertible Debentures due 2018 are convertible at any time prior to maturity into shares of Common Stock at a conversion rate of 8.6734 shares per $1,000 principal amount at maturity. On November 12, 1998, the Limited Partnerships entered into an agreement with certain other investors, pursuant to which the parties thereto agreed to make open market purchases of the Company's Debentures and 12 1/4% Senior Subordinated Discount Notes due 2006 from time to time for their respective accounts in agreed-upon proportions. The Debenture & Note Purchase Agreement provides that each party thereto may terminate its participation in such open market purchases by providing written notice of such termination to the other parties thereto. There can be no assurance that the Limited Partnerships or any of the other parties to the Debenture & Note Purchase Agreement will acquire any additional Debentures thereunder or, if such securities are acquired, the amount of securities so acquired. Accordingly, on November 13, 1998, November 16, 1998 and November 17, 1998, the Limited Partnerships purchased $8,387,000, $4,193,000 and $60,303,000, respectively, in principal amount of Debentures. Goldman Sachs and GS Group may be deemed to own beneficially and indirectly in the aggregate 632,143 shares of Common Stock by reason of the ownership by the Limited Partnerships of $72,883,000 principal amount in Debentures. ANKER COAL: Reports Loan and Security Agreement ----------------------------------------------- In a Form 8K Current report filed with the SEC, Anker Coal Group Inc. reports that on November 21, 1998, certain subsidiaries of Anker Coal Group, Inc.(the "Company") entered into a Loan and Security Agreement (the "Loan Agreement") with Foothill Capital Corporation ("Foothill") as administrative agent. The Loan Agreement has a term of 4 years and provides for a $15 million term loan facility and a $40 million revolving credit facility. A portion of the loan proceeds was used to retire the Company's existing credit facility with The Chase Manhattan Bank and others. The term loan provides for repayment based upon a seven- year amortization schedule and is payable in 46 installments of principal in the amount of $178,571 and a final installment equal to the unpaid balance of principal and accrued interest. The term loan shall bear interest at a per annum rate of two and one-half percentage points (2 1/2%) above the prime rate announced by Norwest Bank Minnesota, N.A. Availability under the revolving credit facility is based on 85% of eligible accounts receivable created in the ordinary course of business and 65% of eligible inventory which is held for sale in the ordinary course of business, less certain reserves. The revolving credit facility shall bear interest at a per annum rate of one percentage point (1%) above the prime rate announced by Norwest Bank Minnesota, N.A. The Company is subject to certain financial covenants relating to minimum cash flow and maximum capital expenditures. APS HOLDING: Seeks Exclusivity Extension To March 29 ---------------------------------------------------- APS Holding Corp. is asking the court to extend its exclusive periods to file a reorganization plan and solicit acceptances for the third time, this time through March 29 and April 28, respectively. "During the Second Extension, it became clear to the Debtors that they would be unable to reorganize by means of one or more stand alone plans of reorganization," asserts the Nov. 21 motion. "Thus, the Debtors concentrated their efforts on maximizing the value of the Debtors' estates via numerous asset sales," rather than fashioning reorganization plans. The objection deadline was yesterday. A hearing on the extension is scheduled for tomorrow.(Federal Filings Inc. 15-Dec-98) AQUA VIE: Requests Return Of Old Stock Certificates --------------------------------------------------- Aqua Vie Beverage Corporation (OTC BB:AVBCD), announced today that it has made a formal request to the Depository Trust Corporation (DTC), the firm that holds most of Aqua Vie's stock in street name, to return all old Aqua Vie stock certificates with Cusip number 03838F-10-8 to the Company, in exchange for the new post reverse Aqua Vie certificates with Cusip number 03838F-20-7. This formal request is pursuant to Aqua Vie's previously announced 1 for 5 reverse stock split that took effect on November 16th. This request was also made to individual shareholders of Aqua Vie and all other known organizations holding Aqua Vie shares. (It is requested that these certificates be returned to the attention of Pam Grey, Atlas Stock Transfer 5899 South State Street, Salt Lake City, Utah 84107. As previously announced, the Board of Aqua Vie Beverage Corporation held a meeting on November 13th whereby the above mentioned 1 for 5 reverse split of its stock was discussed and approved. As announced on November 16th, this reverse stock split was one part of the corporate restructuring needed to facilitate a capital structure that would provide common stock for the planned late 1998 and early 1999 financing arrangements, to acquire the services of certain individuals, and to provide adequate funding to facilitate the 1999 World Wide Sales and Marketing Campaign. Additionally, many shareholders that have held their shares for several years may have received a notice from the bankruptcy trustee concerning a hearing to be held on December 29, 1998. The purpose of this hearing is for the court to review and approve the trustee's and his attorney's final fees and expenses. Today's Aqua Vie Beverage Corporation, as it is now restructured, is not a party in this matter as this hearing only concerns the "old" corporation. The shareholders in the old corporation, whose investment positions were effectively eliminated in late 1997, pursuant to a court ordered bankruptcy liquidation sale, le, have had an ownership position renewed in the new Aqua Vie Beverage Corporation as one part of the corporate restructuring. BEDFORD FAIR: Fingerhut Acquires Catalog ---------------------------------------- Fingerhut Companies Inc. announced that it has entered into an agreement to acquire Bedford Fair Industries, a cataloger of women's apparel that filed chapter 11 in September 1997, according to a newswire report. Fingerhut, a leading database marketing company that sells a broad range of products and services through catalogs, direct mail and the Internet, said the bankruptcy court approved the acquisition on Dec. 11. The transaction is expected to close in early January 1999. (ABI 15-Dec-98) BRUSH CREEK: Reverse Stock Split To Save Nasdaq Listing ------------------------------------------------------- The Sacramento Bee reports on December 10, 1998 that Brush Creek Mining and Development Inc., teetering on the brink of insolvency, announced a 10-for-1 reverse stock split Wednesday that will allow its shares to remain on the Nasdaq Stock Market. The move, subject to shareholder approval at a special meeting Dec. 23, would boost the value of each Brush Creek share over the $1 mark, which is the Nasdaq minimum. Exchange officials were prepared to remove the company from the market, effective Friday, if no action was taken to increase the share price. "We've been trading below a dollar a share for the last 90 days," said Larry Stockett, chief executive officer of the Grass Valley firm. "The only way to get it above that is a reverse split." Stockett, who rode into town as a business-rescuing "white knight" in November, plans to seek shareholder direction on a number of issues at the special meeting. They include proposed settlements on a number of lawsuits in which the firm is involved. Among the major issues to be put to shareholders is a proposal to increase the authorized shares of company stock from 10 million to 50 million. That would allow it to proceed with planned acquisitions of U.S. Cement in Las Vegas and McLaughlin Engineering and Mining Inc. in Temecula. Wednesday's stock split announcement is just the latest dramatic move by Brush Creek, which has recently undergone financial and managerial turmoil. The company laid off its entire work force of 30 in July and is embroiled in a dispute with Volcanic Resources, its primary investment partner. Sierra County, in October, seized the company's bank account and mining equipment because of unpaid property taxes. Stockett, who is also CEO of U.S. Cement, hopes to turn Brush Creek's fortunes around by effectively converting Brush Creek into a holding company, with the mining operation, the cement company and McLaughlin becoming subsidiaries. The tax write-offs enjoyed by Brush Creek would help boost profits at U.S. Cement and allow it to seek public investment. Stockett wants other mining operations to pay for the rights to operate at Brush Creek's mines. Stockett has been working without compensation and said he plans to continue doing so until the company has its first profitable quarter. CELLPRO: Court Approves Acquisition ----------------------------------- Irvine, Calif.-based Nexell Therapeutics Inc., a subsidiary of VIMRX Pharmaceuticals Inc., announced that a bankruptcy court has approved Nexell's acquisition of CellPro Inc.'s assets, according to a newswire report. CellPro, operating under bankruptcy protection, will sell certain intangible assets, including intellectual property, patents, antibodies and related cell banks, research and license rights to Nexell in exchange for $3 million in VIMRX securities. (ABI 15-Dec-98) COLUMBIA/HCA: Plans To Spin Off Hospitals ----------------------------------------- According to a report in The Wall Street Journal on December 15, 1998, Columbia/HCA Healthcare Corp. outlined plans to spin off dozens of its facilities into two new hospital companies in a filing with the SEC. In the lengthy filings, Columbia disclosed the formation of two companies, LifePoint Hospital s Inc. and Triad Hospital s Inc., which would operate independently as publicly traded corporations. The spinoffs are expected to be completed by the end of the first quarter pending approval by the IRS of their tax-free status and an SEC review. They represent one of the most ambitious elements in Columbia's strategy to reinvent itself as a smaller company of about 230 hospitals, down from about 345. COMMERCIAL FINANCIAL: Petition Lists Assets Of $415 Million ----------------------------------------------------------- Commerical Financial Services Inc.'s Chapter 11 petition, filed Dec. 11, estimates assets and liabilities at about $415 million and $208 million, respectively. The Tulsa, Okla.-based credit card debt collector noted that it has between 200 and 999 creditors but predicted that funds will be available for distribution to unsecured creditors. A major company creditor who had purchased the Commercial Financial's asset-backed securities obtained a temporary restraining order on Dec. 10 limiting the company's access to its cash position. To prevent a "chain of events that in all likelihood would have caused other creditors to begin litigation as well," the company filed for bankruptcy Friday evening. Commercial Financial, which is reportedly under investigation by the Securities and Exchange Commission and the Oklahoma Securities Commission stemming from allegations that the company improperly inflated the securities' performance, hired Goldman Sachs & Co. last month to evaluate strategic options and receive bids from potential buyers. (Federal Filings Inc. 15-Dec-98) CONTINENTAL AIRLINES: Underwriting Agreement Reported ----------------------------------------------------- Continental Airlines, Inc., a Delaware corporation (the "Company"), filed a current report with the SEC including an Underwriting Agreement dated December 8, 1998 proposing to issue and sell, subject the terms and conditions stated therein, to Morgan Stanley & Co. Incorporated and Credit Suisse First Boston Corporation (the "Underwriters") $200,000,000 aggregate principal amount of its 8% Senior Notes due 2005 to be issued pursuant to the provisions of an Indenture dated July 15, 1997 between the Company and Bank One, N.A., as trustee. The complete filing is available via the Internet at: http://www.sec.gov/Archives/edgar/data/0000950129-98- 004980.txt EDISON BROTHERS: Quarterly Report For Period Ended Oct. 31 ---------------------------------------------------------- Edison Brothers Inc. filed its quarterly report with the SEC for the quarterly period ended October 31, 1998. The company reports a net loss of $55 million for the 39 weeks ended October 31, 1998. Net sales for the 13 weeks and 39 weeks ended October 31, 1998 were $212.3 and $623.4 million, respectively, a decrease of 1.7% and 7.8% from the comparable periods of 1997. The decrease reflected a 6.2% decrease in the average number of stores in operation between the first 39 weeks of 1997 and first 39 weeks of 1998. Same-store sales increased 2.2% for the 13 week period and declined 2.7%for the 39 week period. As a result of higher than expected operating losses, the Company had to amend the minimum net worth covenant under the Credit Facility in April 1998 and again in August 1998. As of October 31, 1998, the Company's net worth, as defined, was$11.7 million in excess of the minimum requirement. As a result of 1998 operating losses and a diminishing amount of availability under the Credit Facility, the Company has experienced shortened trade credit terms with certain vendors and has had to issue domestic letters of credit to procure certain merchandise ($9.4 million outstanding domestic letters of credit as of October 31,1998). The Company's continuation as a going concern will depend on, to varying degrees, the following factors: 1. Significant improvement in the profitability of operations. 2. No significant further shortening or restriction of trade credit. 3. Securing additional sources of liquidity or financing, such as an increase in the advance rate under the Credit Facility. The Company is currently in the process of implementing significant expense reduction programs and has hired an advisor to help it to procure additional external financing. There can be no assurance that these efforts will be successful. FIRST MERCHANTS: Stock Ownership Reported ----------------------------------------- As of November 10, 1998 Herzog, Heine, Geduld, Inc. ("HHG") reports to the SEC ownership of 725,177 shares of common stock of FIRST MERCHANTS ACCEPTANCE CORP. representing 11.34% of the outstanding Common Stock. FPA MEDICAL: To Sell Unit To Doctors ------------------------------------ The San Diego Union And Tribune reports on December 10, 1998 that FPA Medical Management Inc. won a bankruptcy judge's approval to sell its Axminister Medical Group unit to a group of doctors for $1.35 million, ending the presence of the struggling physicians-practice manager in the California health-care market. U.S. bankruptcy Judge Peter Walsh approved the sale of Axminister's health-care network as part of FPA's effort to reorganize itself after filing for Chapter 11 protection in July. A cash crunch had left the company unable to pay doctors, employees and the interest on its bonds. To help stem losses, FPA officials decided to sell Los Angeles- based Axminister back to the group of doctors who had previously sold the practice to FPA, lawyers said. Axminister's network of 20 doctors provides health-care coverage to 17,000 consumers. FPA bought the network in 1997 for $16.2 million in stock. "This sale marks FPA's exit from the California market," said John Butler, FPA's main bankruptcy lawyer, at a hearing in Wilmington yesterday. FPA's bankruptcy case is being handled there. Practice managers buy up doctors' practices and clinics, handling the administrative duties and negotiating with insurers in return for a percentage of the practices' income. Under FPA's reorganization plan, bondholders and lenders will give up their claims in return for stock and warrants in the reconstituted company. A hearing on the reorganization plan is set for Jan. 12. GLOBAL MOTORSPORT: Amendment To Tender Offer Statement ------------------------------------------------------ Global Motorsport Group Inc. reports to the SEC an amendment number 3 to Schedule 14D-1 Tender Offer Statement. This Amendment No. 3 amends and supplements the Tender Offer Statement on Schedule 14D-1 filed with the SEC on November 16, 1998 by GMG Acquisition Corp. (the "Purchaser"), a Delaware corporation and an indirect, wholly-owned subsidiary of Stonington Acquisition Corp., a Delaware corporation, to purchase all outstanding shares of Common Stock, par value $.001 per share, of Global Motorsport Group, Inc., a Delaware corporation, and the associated preferred share purchase rights issued pursuant to the Rights Agreement, dated as of November 13, 1996, between the Company and American Stock Transfer & Trust Company, as Rights Agent, at a purchase price of $19.50 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated November 16, 1998, and in the related Letter of Transmittal (which together with the Offer to Purchase constitutes the "Offer"). The press release issued states: December 10, 1998 - Global Motorsport Group, Inc. today announced that the Delaware Chancery Court has denied Golden Cycle's motion for preliminary injunctive relief seeking, among other things, an injunction of the tender offer and merger and invalidation of the termination fee and expense reimbursement provisions provided by the merger agreement between Stonington and Global Motorsport Group, Inc. Pursuant to the merger agreement, GMG Acquisition Corp., an entity controlled by Stonington, commenced a tender offer on November 16, 1998 for all of the outstanding shares of common stock of Global for $19.50 in cash net per share. The pending tender offer by GMG Acquisition Corp. is scheduled to expire at 12:00 midnight, New York City time on Monday, December 14, 1998. Stonington announced that it intends to complete the tender offer at such time and accept for payment all validly tendered and not properly withdrawn Global shares, subject to the satisfaction or waiver of the conditions described in the tender offer, including shares representing at least a majority of the total outstanding shares of common stock of Global on a fully diluted basis being validly tendered and not properly withdrawn. GOLF TRAINING SYSTEMS: Closes Operations ---------------------------------------- Golf Training Systems, Inc. (OTC Bulletin Board: GTSXQ) announced that the assets of the Company will be sold at court auction on December 17, 1998. Depending on the results of this auction, the pending Chapter 11 case will either be dismissed or converted to Chapter 7. The Company had attempted to restructure through Chapter 11, however, the Company was not able to generate the needed sales levels. Extensive layoffs and cutbacks have been unsuccessful in changing the profitability of the operation enough to manage the total debt and overhead requirement. As a result, the closure of the Company will take place through the court and auction process. The Company's stock was delisted from the Nasdaq exchange and currently is traded as a bulletin board stock. Golf Training Systems developed and marketed golf learning and training products for the golfer. The primary products include the Coach, the Glove, the Computer Coach and the Right Link. GORGES: Accepts Tenders Of Approximately $30 Million ---------------------------------------------------- Gorges/Quik-to-Fix Foods, Inc. announced on December 1, 1998 that it had accepted tenders of approximately $30 million in principal amount of its 11 1/2% Senior Subordinated Notes Due 2006, Series B (the "Notes"), or approximately 30% of the Notes outstanding, and that its tender offer for the Notes had been terminated. The purchase price for the Notes ($320 per $1,000 principal amount, including all accrued and unpaid interest to and through December 1, 1998 to holders who tendered before 10:00 a.m., New York City time on December 1, 1998) has been deposited with IBJ Schroder Bank & Trust Company, the Trustee for the Notes for prompt payment to the holders who tendered. In connection with the consummation of the tender offer, the Company waived all conditions to the tender offer, including, but not limited to the Senior Financing Condition, the Equity Contribution Condition, the Bridge Financing Condition, the Minimum Tender Condition and the General Conditions. The purchase price was paid with the proceeds for the sale of common stock by the Company's parent holding company to one or more of its existing shareholders. GUNTHER INTERNATIONAL: Stock Acquisition Reported ------------------------------------------------- On November 24, 1998, Four-Fourteen Partners, LLC, a Delaware limited liability company ("4-14P"), acquired from Four Partners, a New York general partnership ("FP"), 494,189 shares of Common Stock and Loan Warrants exercisable for 2,105,688 shares of Common Stock. The transfer from FP to 4-14P was made at the fair market value of the shares of Common Stock and the Loan Warrants. FP is a member of Gunther Partners, LLC, a Delaware limited liability company ("GP"). Beneficial ownership of securities of the issuer by other members of GP and agreements between FP and the other members of GP have been previously reported in Amendment No. 5 to the Schedule 13D of FP filed with the Securities and Exchange Commission on October 7, 1998. HAGERSTOWN FIBER: Dismissal of Case ----------------------------------- On December 10, 1998 an order of dismissal was entered by the Honorable Stuart M. Bernstein in the case of Hagerstown Fiber Limited Partnership, debtor. KENILWORTH SYSTEMS: Resumes Plans For "Roulabette" -------------------------------------------------- Kenilworth Systems Corporation of New York filed SEC FORM reporting that on September 23, 1998 the Registrant, Kenilworth Systems Corporation emerged from Chapter 7 bankruptcy proceedings, when the Trustee for the Kenilworth Estate paid, in cash, one hundred percent of all approved creditor claims, administration fees and expenses out of the $4,424,056 proceeds from the sale of substantially all of the assets of the Kenilworth Estate, recoveries of receivables and interest income. Kenilworth resumed operations planning to develop "Roulabette" a wagering system for casino table games that heretofore has not been available. (Copyright States News Service States SEC-12/09/98) LIBERTY HOUSE: Biz Plan Deadline Extended To January 22 ------------------------------------------------------- The major parties in Liberty House Inc.'s chapter 11 case have agreed to push back the deadline for the retailer's preliminary 1999 business plan until Jan. 22. The latest agreement calls for Liberty House to present the plan to the creditors' committee and the company's lenders at a meeting in Los Angeles during the week of Jan. 25. Presentation of the business plan, including a summary forecast for 2000 and 2001, must occur by Jan. 29. The stipulation, approved Dec. 7, modifies the parties' previous agreement regarding exclusivity. The Nov. 3 stipulation extended the retailer's exclusive period to file a reorganization plan through Feb. 28, provided any proposal is consensual. That agreement had required Liberty House to deliver its business plan by Dec. 4. (The Daily Bankruptcy Review and ABI Copyright c December 15, 1998.) LYNX GOLF: Seeks Order Approving Disclosure Statement ----------------------------------------------------- On January 19, 1998 the debtor, Lynx Golf, Inc., f/k/a Lynx Acquisition Corporation will move the court for entry of an order approving its Disclosure Statement regarding its plan of reorganization and approving the forms of ballot, and the form of notice of confirmation hearing. MAXICARE HEALTH: Stock Ownership Reported -------------------------------------------- Heartland Advisors Inc. reports sole voting power over 2,312,700 shares of common stock and beneficial ownership of 3,475,400 shares of common stock (19.4% of the class) of Maxicare Health Plans Inc. The shares of common stock to which this Schedule relates are held in investment advisory accounts of Heartland Advisors, Inc. MOBILEMEDIA CORP: Modifies Issuance of Rights and Warrants ---------------------------------------------------------- The disclosure statement for MobileMedia's third amended joint reorganization plan modifies, among other things, the provisions governing the issuance of rights and warrants under the plan. The Dec. 3 filing notes that rights, which entitle Class 6 unsecured claim holders to purchase up to 108.5 million common and class B common shares of MobileMedia buyer Arch Communications Group Inc., have a $2 exercise price. The rights will constitute between 55.1% and 73.1% of Arch capital shares outstanding on the effective date. Moreover, the paging concern set the exercise price for warrants issued under the plan at $2 plus 20% of the return from the effective date to the Sept. 1, 2001, warrant termination date. The actual exercise price will be subject to adjustments based on, among other things, the issuance of dividends, rights, options or warrants to Arch stockholders as well as reclassification of outstanding Arch debt. MobileMedia and Arch announced their $700 million merger plan on Aug. 20 which would result in the creation of a $1.8 billion Arch subsidiary. (Federal Filings Inc. 15-Dec-98) NEW INDIGO RESOURCES: Interim Results for First Quarter ------------------------------------------------------- New Indigo Resources Inc. ("New Indigo") recorded a loss of $329,000 ($0.02 per share) for the three months ended September 30, 1998, which compares to a loss of $64,000 ($0.005 per share) for the three months ended September 30, 1997. New Indigo's general operating expenses increased to $308,000 compared to $123,000 for the first quarter ended September 30, 1997, primarily due to increased salaries, legal and audit expenses, and interest costs. Exploration and development expenditures incurred during the period decreased to $683,000 compared to $830,000 for the comparable period in 1997. Under the terms of a support agreement signed on December 4, 1998 with Lytton Minerals Limited ("Lytton"), the balance of the advance payable to Lytton at September 30, 1998 was converted to a term loan due June 30, 1999. In addition, Lytton has agreed to increase the amount of the term loan up to an additional $600,000. New Indigo and partner Lytton (operator) conducted a summer field program on the Jericho and Greater Jericho project areas between July and early September 1998. The program resulted in the identification of numerous high potential targets, and a series of moderate potential targets New Indigo is very encouraged by the early success of the 1998 exploration program, and plans to continue the exploration for new kimberlites on the current property holdings in 1999. The program will consist of further investigation of the identified geophysical targets, primarily through ground geophysics, and will lead to a spring 1999 exploration drilling program. New Indigo's primary goal is to discover additional kimberlites in close proximity to the existing discoveries, thus enhancing the economics and scale of the Jericho Project. All litigation brought by Mr. H. Miller and the Fern Trust against the Company has been terminated by agreement, and all relevant parties will be executing mutual releases. The settlement is subject to court* approval. Discussions are taking place between New Indigo and Lytton regarding a future amalgamation between the two companies. The directors of New Indigo believe that an amalgamation will generate substantial benefits for the shareholders by consolidating the jointly held diamond property interests under one corporate entity. Mr. Fred Sveinson resigned as Chief Operating Officer of the corporation in August, and Mr. James Sandison resigned from his position as director in November. Mr. Douglas Scharf was appointed to the Board of Directors of the Company in November. NORD RESOURCES: Legal Action Against Directors/Officers ------------------------------------------------------- MIL Investments, S.A. ("MIL"), a significant shareholder of Nord Resources Corporation (NYSE:NORD), commenced a legal action on December 2, 1998 in Dallas, Texas, on behalf of Nord, against Nord Pacific Limited, W. Pierce Carson, Edgar F. Cruft,Terrence H. Lang and Hicor Corporation (the "Defendants"). Nord is the controlling shareholder of Nord Pacific Limited ("Nord Pacific"), a publicly traded company listed on The Toronto Stock Exchange (TSE:NPF). Messrs. Carson, Cruft and Lang are each directors and officers of both Nord and Nord Pacific. The lawsuit is a derivative action, brought on behalf of Nord against its directors and officers, and alleges that the defendants unlawfully directed money from Nord to fund Nord Pacific at a time when those funds were desperately needed by Nord. These activities are alleged to constitute conspiracy, negligence and a breach of the fiduciary duty of the named Nord directors and officers. The action claims ordinary and punitive damages against the Defendants totaling more than US$50 million. A jury trial has been requested. Separately, in filings made with the U.S. Securities and Exchange Commission this week, MIL has disclosed that it has made recent market purchases of Nord shares. These purchases were made for investment purposes and reflect MIL's belief in the underlying value of Nord's 50% interest in the Sierra Rutile Limited joint venture. These purchases and the derivative action underscore MIL's determination to protect both its investment and the investments of the other Nord shareholders in the face of the actions taken by Nord's present management. NORTH AMERICAN: Arthur Andersen Quits -------------------------------------- On December 4, 1998, North American Gaming and Entertainment Corporation (the "Company") received a letter from its independent accountant, Arthur Andersen LLP, that it was terminating the client-auditor relationship between Arthur Andersen LLP and the Company. There were no disagreements with Arthur Andersen LLP on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to its satisfaction, would have caused it to make reference to such disagreement in its report. Neither of the reports of Arthur Andersen LLP on the Company's financial statements for the Company's fiscal years ended December 31, 1997 and 1996 contained an adverse opinion or disclaimer of opinion, or was modified as to uncertainty, audit scope, or accounting principles. PENNCORP FINANCIAL: Supplement to Prospectus -------------------------------------------- Penncorp Financial Group Inc. reports to the SEC a ninth supplement to Prospectus dated March 9, 1998, as amended and supplemented (the "Prospectus"), of PennCorp Financial Group, Inc. (the "Company") relating to the offer and sale by the Selling Security holders (as defined in the Prospectus) of (i) (x) up to 2,875,000 shares of $3.50 Series II Convertible Preferred Stock, par value $0.01 per share (the "Convertible Preferred Stock"), of the Company and (y) up to 4,118,911 shares of common stock, par value $0.01 per share (the "Common Stock"), of the Company or such other number of shares of Common Stock resulting from an adjustment to the conversion price of the Convertible Preferred Stock pursuant to the antidilution provisions of the Certificate of Designation governing the Convertible Preferred Stock issuable upon conversion of the Convertible Preferred Stock, and (ii) the offer and sale by the Company of the Common Stock issuable upon conversion of the Convertible Preferred Stock. A table setting forth certain information as of December 4, 1997 (except as otherwise indicated) as to the security ownership of the Selling Security holders is available via the Internet at http://www.sec.gov/Archives/edgar/data/0000950134-98- 009574.txt PITTSBURGH PENGUINS: Judge Approves $20M Loan --------------------------------------------- Despite objections by some creditors, yesterday bankruptcy judge Bernard Markovitz agreed to allow the Pittsburgh Penguins hockey team to borrow $20 million from French bank Societe Generale; the ruling will enable the team to meet payroll today and stay in business until the beginning of the 1999-2000 season, the Associated Press reported. The judge agreed to the loan after the bank renegotiated the terms; the team will pay 7.5 percent interest. The Penguins, which are operating under chapter 11 protection, owe about $125 million, in addition to the new $20-million loan, but on Friday Judge Markovitz ruled that the team could not borrow an additional $18.5 million from the National Hockey League. (ABI 15-Dec-98) PONDEROSA FIBRES: Court Lets Exclusivity Expire ----------------------------------------------- The U.S. Bankruptcy Court in Reading, Pa., dealt Ponderosa Fibres of Pennsylvania Partnership another blow by allowing exclusivity to expire, opening the door to the possibility of a reorganization plan from the creditors' committee. In a brief Dec. 4 order, Judge Thomas Twardowski denied both the partnership's bid for a 90-day extension and the committee's request to terminate exclusivity in order to file a competing proposal. "The court finds that: (1) Debtors have not established 'cause' for extending the exclusivity period as required by 11 U.S.C. 1121(d); and (2) in light of my denial of Debtors' motion to extend the exclusivity period and the fact that the original 180 day exclusivity period expired...there is no exclusivity period to dissolve," as the committee had requested. (The Daily Bankruptcy Review and ABI Copyright c December 15, 1998) RDM SPORTS GROUP: Trustee Taps Special Counsel ---------------------------------------------- The Chapter 11 Trustee in the case of RDM Sports Group, Inc., and its affiliate debtors seeks to employ Cahill, Christian & Kunkle, Ltd. as special counsel to handle litigation with General Electric Company and to retain litigation experts in the ordinary course of business. The Chapter 11 Trustee seeks authority to compensate such experts on a current basis up to a maximum aggregate of $500,000 without further order of the court. A hearing to consider the application will be held on January 5, 1999 at 10:00 AM in Courtroom 1201, US Courthouse, Richard B. Russe33ll Building, 75 Spring Street, SW, Atlanta, Georgia. SABACOL INC: Files For Protection Under Chapter 11 -------------------------------------------------- Saba Petroleum Company (Amex: SAB) announced on December 15, 1998 that its wholly-owned subsidiary, Sabacol, Inc. ("Sabacol"), has filed for the protection of its assets under Chapter Eleven of the U.S. Bankruptcy Code. Sabacol's assets, located solely in Colombia, consist of a 50% interest in a 118 mile pipeline and varying interests in heavy oil producing properties. Sabacol has undertaken this action to protect its asset base and to provide adequate time to develop a re-organization plan for the benefit of its creditors and shareholder. At the time of filing, Sabacol had reported that it had current liabilities of $4.6 million. Due to a 41% decline in oil prices since December 31, 1997, fully burdened costs are expected to exceed revenues. Under present operating procedures and conditions, the producing properties are uneconomic. Sabacol is not the operator of the properties and has notified the operator of its intent to audit all relevant operating documents and all financial transactions for 1996, 1997 and 1998. Any potential future action would be based on results of the audit. Furthermore, a new management team has been appointed for Sabacol to protect its assets and develop an effective re-organization plan. Saba's Management Committee stated, "Since inheriting the daily management of the Company, various corrective measures are being taken to provide active direction throughout the Company. The current debt-load and declining oil prices require a proactive plan to preserve all of the Company's assets. In addition, the Committee is aggressively working toward the consummation of the planned merger with Horizontal Ventures, Inc. ("HVNV") in order to implement the new business plan of the combined companies." Under the planned strategy, with a low-debt structure and high degree of liquidity, the combined company will focus on applying HVNV's proprietary horizontal drilling technology to the enhancement of its reserves in California, increasing its production, processing its oil at its wholly-owned asphalt refinery and efficiently placing the asphalt into the stable asphalt market. This strategy is expected to provide a firm hedge to oil price fluctuations and thus the current oil price will have little relevance to the merged company's business results. Saba Petroleum Company is an independent energy company with oil and gas production and development activities in North America and Colombia. In the United States, the Company's primary areas of activity are California, Louisiana and New Mexico. The Company also has large land positions and exploration options on exploratory projects in the U.S.A., Indonesia and the United Kingdom. SOUTHERN PACIFIC: Committee Taps CIBC Oppenheimer ------------------------------------------------- The Official Creditors' Committee of Southern Pacific Funding Corporation, debtor, seeks approval of the employment of CIBC Oppenheimer Corp for the purpose of evaluating and advising the Committee with respect to the proposed sale of the assets of a subsidiary of the debtor, Southern Pacific Mortgage Limited, an originator and seller of whole loans in the United Kingdom. BOMAC Capital Mortgage Inc. objected to the application on the grounds that the proposed compensation is unreasonable, CIBC Oppenheimer is not disinterested and CIBC Oppenheimer is not entitled to indemnification. The Committee argues that the compensation is reasonable, that CIBC Oppenheimer does not have to be disinterested and that the firm is entitled to indemnification. SOUTHERN PACIFIC: Committee Supports Pentalpha Employ ----------------------------------------------------- The Official Creditors' Committee of Southern Pacific Funding Corporation is seeking approval to employ Pentalpha Group LLC for the purpose of advising the Committee with respect to issues concerning the valuation and liquidation of the financial instruments comprising the major assets of the debtor. BOMAC Capital Mortgage Inc. objected to the application on the grounds that the compensation is unacceptable, nunc pro tunc appointment should not be allowed, Pentalpha has not made disclosures of disinterestedness, and indemnification is improper. BOMAC objects to the $45,000 retainer and the performance incentive fee. The Committee states that the compensation is reasonable within the industry, that nunc pro tunc employment is appropriate, that Pentalpha is disinterested and that indemnification is proper. STAR NEWCO: Proposed Sale of Elgen Division For $1.325M ------------------------------------------------------- On December 7, 1998 the court ordered that a hearing shall be held on December 22, 1998 on the motion of debtor, Star Newco Inc. for entry of an order pursuant to the bankruptcy code for approval of the sale of all assets of the debtor's Elgen Division. The sale is pursuant to an asset purchase agreement dated December 2, 1998 by and among Capital Hardware Supply, Inc. and the debtor. Pursuant to the agreement, Capital would purchase the assets as a going concern for a purchase price of $1.325 million. The asset purchase agreement is subject to higher and better offers. TORONTO'S SKYDOME: To Be Auctioned ---------------------------------- SkyDome Corp. has announced that Toronto's 60,000-seat SkyDome will be put up for auction; the sports facility filed for bankruptcy protection in November, citing liabilities of about C$60 million, Reuters reported. The value of the building has been placed at C$125 to C$150 million. PricewaterhouseCoopers, the court-appointed trustee, will supervise the auction and prepare information packages for interested parties under strict confidentiality agreements. SkyDome also announced that it is seeking a stay of proceedings in its reorganization until February 28, since a bidding process requires more time. Several parties have already expressed interest. (ABI 15-Dec-98) ********* 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 * * *