/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/990302.MBXT R O U B L E D C O M P A N Y R E P O R T E R Tuesday, March 2, 1999, Vol. 3, No. 41 Headlines ABLE TELECOM: Asensio & Co. Predicts Possible Delisting AHERF: Trustee, Creditors To Review AGH Merger BENNETT FUNDING: Scam is Century's Largest, Trustee Says BOSTON CHICKEN: Court To Cut Cash Flow Requirement BROTHERS GOURMET: Taps Ernst & Young COMMERCIAL FINANCIAL: Dispute May Go Before District Court CROWLEY, MILNER: Notice of Auction DOW CORNING: Dow Corning Reports Fourth Quarter Results EQUALNET CORP: Proposed Disclosure Statement JUMBOSPORTS: Taps Zolfo Cooper LIVENT: Seeks More Time to Submit Plan MARINE MANAGEMENT: Notice of Hearing For Sale of Assets MCA FINANCE: Officials Examine Demise of MCA MONTGOMERY WARD: Behind GE bailout of Ward's NATIONAL ENERGY: Exco Interested in Purchase ONCOR INC: Files For Chapter 11 Protection ONEITA INDUSTRIES: Seeks Co-Exclusivity With Lenders RECYCLING INDUSTRIES: Seeks Chapter 11 Protection SALANT: Phillips-Van Heusen To Get Dress Shirts Licenses SGL CARBON: Stipulation and Order With Ford Motor Credit UNITED COMPANIES: Intends to File Chapter 11 USN COMMUNICATIONS: Notice Of Intent To Sell Assets Meetings, Conferences and Seminars ********* ABLE TELECOM: Asensio & Co. Predicts Possible Delisting ------------------------------------------------------- The following is issued by Asensio & Company, a member of the National Association of Securities Dealers: Able Telcom Holding Corp. (Nasdaq: ABTEE) expects to recognize a $3.3 million loss on the purchase of its notes and $10 million on the purchase of its Series B preferred stock. These $13.3 million of losses do not include the material charges to income that may result from Able's modification of its preferred and warrant agreements. These events occurred in 1999. According to Arthur Andersen LLP Able's seventh auditor in 10 years, these transactions would have reduced basic earnings per share by $1.95 and shareholders' equity by $9.3 million in 1998. Using Arthur Andersen's figures, Able's tangible stockholders' equity at October 31, 1998 would be negative $0.5 million. Able's negative equity may be greater as of January 31, 1999, which is the end of its first quarter. As a result, Able's stockholders'equity may be insufficient to meet the minimum qualifications to continue to list and trade Able's shares on Nasdaq. This negative equity resulted despite Arthur Andersen allowing Able to book at least a $15.1 million non-cash, non-operating increase to income in 1998. In fact, Arthur Andersen made a number of other serious and highly questionable allowances that had a large, artificially positive impact on Able's 1998 statements. These included allowing Able to book a $40.1 million reserve by simultaneously creating $38.8 million in goodwill, and omitting Able's 1998 pro forma net loss from its pro forma disclosures. As a result of this omission Arthur Andersen's statement does not disclose MFS' 1998 first half loss of $21.5 million. We firmly believe that Arthur Andersen's audit opinion, consolidated financial statements and accompanying notes each materially misrepresent Able's actual insolvent condition. Arthur Andersen rendered their opinion on Able's October 31, 1998 statements on February 17, 1998. On February 17th Able used an advance under its existing WorldCom Master Agreement to purchase through an affiliate its defaulted securities ("event"). Apparently, Arthur Andersen believed that it could rely on this event, which occurred 109 days after the audit's "as of" date, to avoid a going concern qualification. This serious timing discrepancy, along with Able's continuing grave financial condition after the event, make Arthur Andersen's decision extremely questionable. Furthermore, Arthur Andersen's opinion is dated after the end of the first quarter. This creates the possibility that investors may believe Arthur Andersen's opinion is current. It is not. Most importantly, when describing the event Arthur Anderson failed to specifically disclose Able's repeated failure to repay the notes when due, to obtain needed funding and to meet its preferred holders' redemption demand. We firmly believe that Arthur Andersen's conduct and material omissions are flagrantly fraudulent. AHERF: Trustee, Creditors To Review AGH Merger ---------------------------------------------- The Pittsburgh Post-Gazette reports on February 27, 1999 that Allegheny General Hospital and its suburban affiliates appear to have reached a merger agreement that their bankrupt parent foundation's trustee, and possibly its creditors, can live with. William Scharffenberger, the trustee who is overseeing the bankruptcy reorganization of Allegheny Health, Education and Research Foundation, and the foundation's creditors are expected over the weekend to receive copies of a letter of intent worked out between the AGH hospital network, known as Allegheny University Hospitals- West, and the Western Pennsylvania Health System. Reached yesterday, Scharffenberger said he had not yet seen the letter of intent, which spells out terms of the merger, but had been kept apprised of details as it was being cobbled together and expected to give it his approval. "I assume it's going to follow the lines of what we agreed and concurred with and what I understand the creditors committee has also concurred with, so I assume everybody will be on board," he said. An attorney representing one of AHERF's largest creditors, however, said he had not yet received word of an agreement. Neal Colton, attorney for HealthAmerica, said late yesterday that it was possible that an agreement had been reached but that he had not yet been informed. Winning the approval of AHERF's trustee and creditors has loomed as a potential stumbling block to AUH-West's plans to merge. Getting it, however, doesn't mean there still aren't other hurdles. The AUH-West hospitals, which need a merger partner to avoid insolvency, and West Penn must still reach a definitive agreement. Before one can be concluded, West Penn must complete an exhaustive review of AUH-West's finances in a process known as "due diligence." Reaching a definitive agreement also remains contingent on West Penn obtaining all of the necessary financing to take over the AUH- West hospitals. In addition to AGH, the institutions in the network are Forbes Health System, Canonsburg Hospital and Allegheny Valley Hospital. Highmark Blue Cross and Blue Shield has agreed to provide about $125 million, but that commitment remains contingent on the results of the due diligence, said spokesman Mike Weinstein. And it is only a little more than a third of an estimated $370 million of AUH-West bond debt that West Penn would have to assume. The AUH-West hospitals, which announced plans to seek a merger partner in October, initially argued that they did not need the approval of AHERF's creditors because they were not part of the $1.5 billion bankruptcy case that the foundation filed in July. The creditors, however, have been building a legal case in bankruptcy court that they were entitled to a share of the sale proceeds. Irrespective of the legal parrying, AUH-West President Anthony Sanzo conceded that, as a practical matter, any sale would need both the trustee's blessing and the creditors' . The West Penn offer, the only one the hospitals received after nearly four months of searching, was, in fact, conditioned on their approval. How much creditors will realize from the sale could not be immediately determined. Terms of the West Penn/AUH-West agreement have not yet been disclosed. However, few observers of the situation expect that the creditors, who will receive only pennies on the dollar for claims against the eight bankrupt Philadelphia hospitals that AHERF sold in November, will receive enough from the AUH-West sale to make much of a dent in their losses. In other issues related to AHERF's bankruptcy yesterday, federal Judge M. Bruce McCullough, who is overseeing the case, ordered AUH- West's law firm, Kirkpatrick and Lockhart, to give him a detailed accounting of their AHERF billings for a full year preceding its July 21 bankruptcy filing. McCullough noted that financial documents filed in the case indicated that the law firm had been paid $288,361 within the three months before the filing. Payments made within 90 days of a bankruptcy filing can be questioned by the court to determine whether they were made in "preference" to others who were also owed money. McCullough also said that Kirkpatrick, which had represented AHERF at the outset of the case, is now representing the AUH-West hospitals in situations "adverse" to the foundation. McCullough also ordered two other firms consulting in the bankruptcy, Deloitte & Touche and the Lewing Group, to explain their billings at a hearing on March 9. AHERF's creditors have questioned the fees legal and professional firms charged the foundation and the necessity of the work they performed. The court also extended until June 18 the deadline for those owed money by AHERF and its bankrupt subsidiaries to file claims. The old deadline had been Wednesday. BENNETT FUNDING: Scam is Century's Largest, Trustee Says -------------------------------------------------------- Bennett Funding Group Inc.'s massive Ponzi scheme that defrauded numerous investors was perpetuated by a series of factors, including the "chutzpah" of the son of the company's founder, the neglect of company auditors, and the naivete of certain brokers and investors, according to the report the company's chapter 11 Trustee. "This massive $1.5 billion imbalance represents the proceeds of one of the largest frauds of the 20th century," Richard Breeden, former head of the Securities and Exchange Commission from 1989 to 1993, stated in a report outlining the company's fraud scheme. Breeden estimated that for the six years prior to Bennett's March 29, 1996, petition date, about 12,000 investors and 245 banks invested more than $2.4 billion to purchases interests from Bennett backed by commercial equipment leases. However, under the Ponzi scheme, Bennett only entered into $980 million in real leases during the same period. The trial of Patrick Bennett, the accused mastermind of the fraud scheme, resumes today, with jurors deliberating for a seventh day. (The Daily Bankruptcy Review and ABI March 1, 1999) BOSTON CHICKEN: Court To Cut Cash Flow Requirement -------------------------------------------------- The Wall Street Journal reports on March 1, 1999 that Boston Chicken Inc. said that the U.S. Bankruptcy Court in Phoenix agreed to lower the operating cash flow the restaurant chain has to achieve each month to meet its terms of its credit agreement. The IP facility provided $70 million in funding. $35 million of that was used to refinance short-term debt immediately after filing for protection from creditors. The company borrowed $21 million and has $14 million left according to a spokeswoman for the company. BROTHERS GOURMET: Taps Ernst & Young ------------------------------------ The debtors, Brothers Gourmet Coffees, Inc., et al. seek authorization to employ and retain Ernst & Young LLP as accountants and auditors for the debtors. The debtors request court approval to employ Ernst & Young under a general retainer to provide services with respect to accounting, auditing, tax planning, consulting and other related services in the Chapter 11 cases. The firm will audit the debtors' annual consolidated financial statements, render tax services, review the books and records of the debtors, review quarterly financial statements and consult with management regarding the restructuring of the debtor. The firm will charge its customary hourly rates which range from $659 per hour for partners and principals to $114 per hour for seniors and staff consultants. COMMERCIAL FINANCIAL: Dispute May Go Before District Court ---------------------------------------------------------- The Journal Record reports on February 26, 1999 that jurors could be the ones to decide whether the couple who founded Commercial Financial Services owes the company about $18 million. CFS, a debt-collection company that sought bankruptcy protection in December, filed a complaint against Bill and Kathryn Bartmann to recover the money. But the Bartmanns' attorney denied they owe three years worth of monetary advances. The payments represented bookkeeping errors and distributions to major shareholders, the Bartmanns said through their attorney. The couple filed a motion last week in U.S. Bankruptcy Court seeking to take CFS' complaint to trial in U.S. District Court. "There are disagreements over the facts in the case, and the Bartmanns felt they would be best served by a jury trial," said their attorney, Jim Reed. "We expect to prevail regardless of whether this issue is heard in bankruptcy court or before a judge," said company spokeswoman Sharon Price. The Bartmanns maintain majority ownership of the company but no longer are involved in daily operations. The Tulsa firm buys delinquent credit card debt from the nation's largest banks and tries to persuade the debtors to pay. CFS sent layoff notices to 1,541 workers last month in an effort to cut costs. Since then, 127 former workers have been rehired to fill vacant jobs. The recall allows the company to keep enough employees to be viable, Price said. An undisclosed number of additional former employees are being asked to come back beginning next week. She said CFS also is hiring part-time workers for the weekend and evening shifts so the company can offer full-time workers more attractive day shifts as an incentive. CROWLEY, MILNER: Notice of Auction ---------------------------------- Crowley, Milner and Company, et al., debtor, published a notice of auction in The Wall Street Journal on March 1, 1999. A hearing will be held on March 23, 1999 at 3:00 PM to consider the final bids for the debtors' assets, including approval of the Asset Purchase Agreement between the debtors and Value City Department Stores Inc. which provides for the acquisition by Value City or the prevailing bidder of five Crowley's stores and three Steinbach stores and the Group Store-related assets deemed necessary by Value City to operate these locations for a purchase price of $5,335,000 subject to higher and/or better offers. DOW CORNING: Dow Corning Reports Fourth Quarter Results ------------------------------------------------------- Dow Corning Corporation (NYSE: GLW) today reported global sales for the fourth quarter of 1998 of $639.8 million, down 4 percent from $668.3 million reported for the same period last year. Sales for all of 1998 were $2.57 billion, down 3 percent from $2.64 billion in 1997. Consolidated net income was $48.4 million for the fourth quarter, down 21 percent from $61.5 million reported in the fourth quarter of 1997. For the full year, net income was $206.7 million, down 13 percent from $237.6 million for 1997. These results will be included in the Company's final 1998 consolidated financial statements. "The Company's 1998 financial results are not final because they do not include the impact of charges or other adjustments, if any, which the Company may take currently or in the future to reflect the potential financial impact of the Company's current proposed Chapter 11 plan of reorganization," said John Churchfield, Dow Corning's vice president for planning and finance and chief financial officer. "As these Chapter 11 proceedings progress, we will finalize our 1998 consolidated financial statements. It is possible that, amounts recorded in the Company's final 1998 consolidated financial statements may be revised. The amount of any such revision could have a material effect on Dow Corning's financial position and results of operations. "The 1998 results reported above include a fourth quarter $28.1 million pre-tax restructuring charge ($17.7 million after tax)," Churchfield said. "This restructuring involves the closure of certain facilities in the Americas, Europe, and Asia and the consolidation of activities previously performed at those sites. These actions are a result of the company's ongoing business process reengineering efforts. They are designed to improve operating efficiencies and to better meet customers' expectations. "The negative drag of a strong U.S. dollar and demand weaknesses, which began in Asia and spread to other parts of the world, made 1998 a challenging year," Churchfield added. "While we have yet to see any significant strengthening of short-term growth prospects, our underlying business remains healthy." The financial position and results of operations of the Company are summarized in the table below: In thousands of dollars 1998 1997 1996 Net Sales $2,568.0 $2,643.5 $2,532.3 Gross profit 796.1 847.6 858.3 Net income 206.7 237.6 221.7 Current assets $1,355.2 $1,378.8 $1,524.7 EQUALNET CORP: Proposed Disclosure Statement -------------------------------------------- On February 9, 1999, the debtor, Equalnet Corporation, filed a proposed first amended Disclosure Statement in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division. The plan classifies claims and interests separately in accordance with the Bankruptcy Code and provides different treatment for different classes of claims and interests. Class 1 - Administrative Claims - payment in full on Distribution Date. Estimated at $1.5 million. Class 2 - Priority Non-Tax Claims - Payment in full on Distribution Date. The debtor believes that these claims, if any, are negligible. Class 3 - Priority-Tax Claims - Allowed amount of claims in quarterly cash payments over a period not exceeding six years after the date of assessment of such claim with interest. The debtor estimates that the aggregate amount of allowed priority tax claims is $800,000. Class 4 - Convenience Claims of $1,000 or less - Payment in full on Distribution Date. The debtor estimates that Allowed Convenience Claims total less than $100,000. Class 5,6,7,8 and 9 relate to specific holders of Secured Claims: Class 5 - Secured Claims of RFC Corporation arising under account receivable purchase agreements with the debtor. To be paid by the reorganized debtor. RFC was owed approximately $2.6 million on the Chapter 11 filing date secured by virtually all of the debtor's $4.6 million in accounts receivable. Class 6 - Secured Claims of Equalnet Communications corp. To be paid by the reorganized debtor, but no payments may be made without the written consent of the Creditors' Trust so long as the Unsecured Creditors' Trust owns any common stock in ECC. The $10 million secured loan remains unpaid, and is reflected in the debtor's schedules. Class 7 - Secured Claims of Netco Acquisition, LLC Same treatment as Class 6. The debtor's schedules reflect NAL as having a secured claim of $400,000. Class 8 _ Secured Claims of Willis Group LLC - Same treatment as Class 6. The debtor's schedules reflect the Willis Group as having a secured claim of $1.8 million. Class 9 - Secured Claims of Genesee Fund Limited - Portfolio B. Same treatment as Class 6. The debtor's schedules reflect the Genesee Fund as having a secured claim of $1.5 million. Class 10 - Non-Affiliated Secured Claims to be paid by the reorganized debtor in accordance with agreement between the holder of each such secured claims and the debtor. Class 11 - General Unsecured Claims other than those held by affiliates or insiders of the debtor - To receive pro rata beneficial ownership in the Unsecured Creditors' Trust The debtor's schedules reflect General Unsecured Claims to numerous vendors and suppliers in the aggregate amount of $31,738,000. Class 12 - Subordinated Claims - Pro rata cash distributions from the unsecured creditors' trust after all allowed Class 11 claims have been paid in full. Class 13 - Equity interests of the debtor - To be canceled on the Effective Date of the plan, whereupon the New EqualNet Stock will be issued ECC. JUMBOSPORTS: Taps Zolfo Cooper ------------------------------ The debtors JumboSports Inc., Guide Series, Inc., and Property Holdings Company I, as debtors, file their application for authorization to employ Zolfo Cooper, LLC as special financial advisors and bankruptcy consultants for the debtors nunc pro tunc to February 3, 1999. It is anticipated that Zolfo Cooper will advise and assist management in organizing the debtors' resources and activities in order to manage the Chapter 11 process and communicate with customers, lenders, suppliers, employees, shareholders and other parties in interest; assist in the development of a plan of reorganization and underlying business plan; advise the debtors in controlling and managing cash, and if necessary in obtaining DIP financing, advise and assist in the claims process and provide expert testimony if necessary. The firm charges on a n hourly basis, ranging from $425 per hour for principals to $150 per hour for professional staff. LIVENT: Seeks More Time to Submit Plan -------------------------------------- Broadway producer Livent Inc. filed arguments Friday against two motions, one from attorneys for E.L. Doctorow, the author of the novel "Ragtime," and one from the team that created the musical. Doctorow's attorneys are scheduled to ask a bankruptcy court on Wednesday to order Livent to settle its debts with them. Doctorow said he is owed $137,461, and the creative team is owed $385,748. Livent, however, argued that there was not enough time to sort out its affairs and submit a plan. Livent said it has paid and continues to pay all its debts since the filing, but those debts were incurred pre-petition. Livent, which filed for bankruptcy protection in the United States and Canada, asked for more time on Thursday, and a hearing on the request is scheduled for March 17. Livent wants until July 30 to file its plan.(ABI 01-Mar-99) MARINE MANAGEMENT: Notice of Hearing For Sale of Assets ------------------------------------------------------- The debtor, Marine Management Systems, Inc. published notice of a hearing for the sale of substantially all assets of the debtor. A hearing will be held on March 23, 1999 at 2:00 PM in the US Bankruptcy Court for the District of Connecticut, Bridgepo9rt l Division, to consider the sale of the substantially all of the debtor's assets to SpecTec Connecticut, Inc. for $1,025,625. Any competing proposals for all or substantially all of the assets must equal or exceed $1,075,625. MCA FINANCE: Officials Examine Demise of MCA -------------------------------------------- Crains Detroit Business reports on February 8, 1999 that a state-appointed conservator is trying to figure out what blew up at Southfield-based MCA Financial Corp. State officials and competitors said rapid changes in the mortgage market might have been the culprit. State officials also raised 'serious concerns" about the existence of mortgages pledged as collateral to MCA's financial backers. State banking Commissioner Patrick McQueen seized MCA on Jan. 28, saying he was doing so because "the company was essentially in a free fall with no apparent control or direction." That action, under the state Mortgage Brokers, Lenders and Servicers Licensing Act, came six days after the big mortgage lender and property manager announced it was shutting down its mortgage operations. The order said about $4.4 million in mortgages to an MCA affiliate, Rimco Financial, had been pledged more than once as collateral to MCA's financial backers, a group of banks led by Chase Bank of Texas N.A. In another example, the order said $14.3 million in mortgage pledged as collateral to loans from the banks "had been either previously pledged to third parties or were not in existence." On Jan. 29, McQueen said he was not yet willing to say what might have killed MCA or whether the company can be rehabilitated. "The problems are much more broad than mortgage servicing," he said. "There are individual investors that are involved. There are a number of lenders that are involved. It's a very complex situation." Former MCA Financial Vice Chairman Thomas Cronin said he's as bewildered by MCA's shutdown as anyone. Cronin resigned as an MCA officer in January 1997 because, he said, he wanted to try out a new idea for selling securities based on short-term loans. But he remained an MCA Financial director until Jan. 17, when he resigned. Cronin said he was unaware of any plans to close the company when he quit the board just five days before MCA's shutdown and had resigned because "I thought I had been put at conflict because I'm a lender" to MCA. MCA reported a loss of $615,353 on revenue of $28.7 million in the quarter that ended Oct. 31, compared with net income of $764,784 on revenue of $18.1 million in the same quarter a year earlier. For the nine months that ended Oct. 31, the company lost $1.8 million on revenue of $82.3 million, compared with net income of $2.9 million on revenue of $55.6 million in the year-earlier period. According to its statements, MCA made $374.5 million in "nonconforming" loans in its fiscal year that ended Jan. 31, 1998, more than double the $140.9 million in the fiscal year that ended Jan. 31, 1997. Nonconforming loans include those to bruised-credit buyers and those with higher loan- to-value ratios than allowed by conventional or government guarantee mortgage programs. MONTGOMERY WARD: Behind GE bailout of Ward's -------------------------------------------- Crains Chicago Business reports on February 8, 1999 that by agreeing to pay $650 million to help fund beleaguered retailer Montgomery Ward & Co.'s emergence from bankruptcy, GE Capital Services threw a lifeline to a business it desperately wants to preserve: Ward's credit card operation. The article states that the deal between GE--Ward's largest shareholder and a big creditor--and other debt holders came last week after skittish suppliers began cutting back inventory shipments and creditors drew up a plan to liquidate the company. With that looming threat, Connecticut-based GE agreed to end months of negotiations and pay creditors $650 million, or about 24 to 28 cents on the dollar--topping an earlier offer in the teens--to pull Ward's out of Chapter 11 bankruptcy protection this summer, according to sources familiar with the negotiations. In return, GE will acquire Ward's profitable direct-marketing business, Schaumburg- based Signature Group. GE also will forgo a $1.1-billion claim against the retailer and share equity in the reorganized company with Ward's CEO Roger Goddu and his management team. The handsome sum to be paid by GE--whose costs could top $1 billion after court expenses and a bankruptcy line of credit are covered--is not viewed as a vote of confidence in Ward's retail business. Rather, it is an effort to preserve the value of Ward's private- label credit card, which GE acquired in 1988. A GE Capital spokesman says the company set aside reserves to cover a substantial portion of the anticipated losses from the $1.1-billion claim. GE had a list of reasons to enter a deal with creditors, the spokesman says. Topping the list was to acquire Signature, not to keep the credit unit afloat. Before Ward's bankruptcy filing, the business had fetched an offer of $1 billion from HFS Inc., now New Jersey-based Cendant Corp., but Ward's rejected it as too low. Ward's later put Signature up for auction, but suitors grew cautious, partly because Signature, which markets products to Ward's shoppers, suffered from the decline in shoppers at the stores. Like Signature, Ward's credit business is closely tied to Ward's stores, and during the last year, the credit card portfolio has fallen to $3 billion to $3.5 billion from $4 billion. At one time, GE earned as much as $200 million to $250 million annually on the credit business, Ward's creditors say. While GE contends that the business suffered after the bankruptcy, creditors say it still is highly profitable. A liquidation--had Ward's creditors succeeding in persuading a court to approve one--would have been a big blow to GE. That's because customers tend to stop paying credit card bills to stores that go out of business. Ward's said it plans to step up its rollout of a new store model this year, increasing the number of remodelings to 40 from 20. Still, the agreement between GE and creditors does not guarantee that customers will return to Ward's. NATIONAL ENERGY: Exco Interested in Purchase -------------------------------------------- Exco Resources Inc., a newly-formed oil and gas acquisition company, said Friday that it wants to buy National Energy Group Inc. for $58 million in cash, plus an undisclosed number of Exco shares, according to a newswire report. National Energy, which is in chapter 11, has about $100 million in assets and about $30 million in revenues. Exco said it made the offer in the form of a restructuring plan to National Energy's bondholders. (ABI 01-Mar-99) ONCOR INC: Files For Chapter 11 Protection ------------------------------------------ The Baltimore Sun reports on February 27, 1999 that Oncor Inc., the once promising Gaithersburg biotechnology company, filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Wilmington, Del., yesterday. In its filing, the company listed $6.5 million in debts and $7.41 million in assets. Among the largest creditors: Johns Hopkins University, which is owed more than $473,000. Oncor had research agreements with Hopkins. The 15-year-old company, which at one time attempted to position itself as a provider of pioneering cancer tests, has been suffering financially since at least March when it fired long-time CEO and founder Stephen Turner and disclosed that it had only enough cash to remain in business for a few months. Since then, the company, which has never been profitable, has sold or surrendered most of its revenue and technology assets to meet debts. The sell-off included its research products division, one of its strongest revenue-producing units, for $3.2 million. And in November, Oncor surrendered its chief technology asset -- a genetic test for the recurrence of cancer -- to a creditor that had called due a $4.1 million loan. In turn, the unidentified creditor sold rights to Oncor's HER2/neu cancer test to Ventana Medical Systems Inc. of Tucson, Ariz., for $5.5 million. Earlier this month, the company raised $1 million by selling all of the common shares it held in an affiliate, Appilgene Oncor SA in Paris, to Quantum Biotechnologies Inc. in Montreal. According to the company's last financial report, dated Sept. 30, 1998, Oncor lost $20.9 million for the first nine months of its fiscal year on revenue of approximately $9.5 million. ONEITA INDUSTRIES: Seeks Co-Exclusivity With Lenders ---------------------------------------------------- Oneita Industries Inc. is asking the court to extend to May 19 co-exclusivity rights for both the company and its lenders to file an amended reorganization plan. In addition, the lenders granted Oneita an interim extension of its debtor-in-possession loan maturity date to March 19, with talks under way about something more "permanent," according to an attorney involved in the case. The lenders agreed to support Oneita's last exclusivity extension request, to Feb. 18, provided that the lenders had the option of filing their own plan any time after Dec. 17. The one caveat to the agreement between Oneita and its lenders is that any plan submitted by lenders must be supported by either the majority, or two-thirds of lenders' claims. (The Daily Bankruptcy Review and ABI Copyright c March 1, 1999) RECYCLING INDUSTRIES: Seeks Chapter 11 Protection ------------------------------------------------- Recycling Industries, Inc. announced it has filed for reorganization under Chapter 11 of the United States bankruptcy code. This proceeding was filed in the U.S. Bankruptcy Court for the District of Colorado. The Chapter 11 filing includes Recycling Industries and all of its operating subsidiaries. This action was taken in an effort to assure its creditors, employees, and customers that it will continue operations while it completes its restructuring. According to a report in The Wall Street Journal on March 1, 1999, the Englewood, Colorado company, which recycles metals at 42 facilities in 12 states, said it had been struggling to service its debt and fund continuing operations and blamed its woes on the lowest scrap-steel prices in 30 years. For its fourth fiscal quarter ended September 30, 1998, the company reported a loss of $35.9 million on $64.5 million in sales. In connection with the reorganization proceedings, the Company's senior lender will provide Recycling Industries a debtor-in-possession credit facility. The Company expects that this new credit facility will enable the Company to meet its current financial needs and provide the necessary time to complete a longer term financial restructuring. Recycling Industries, Inc. Chairman and CEO Thomas J. Wiens said, "Recycling Industries, Inc. joins several other steel related companies that have filed for Chapter 11 protection in the last several months. Record tonnage of imported steel has damaged the U.S. steel industry and the many suppliers to the steel industry like Recycling Industries. The flood of imported finished steel helped cause the price for scrap metal to drop to 30-year lows during the second half of 1998. In many of our markets, we saw prices drop from $150 per ton to less than $85 per ton and volumes cut in half. I am unaware of other industries that can remain untouched when foreign companies dump government subsidized products into U.S. markets. This unprecedented drop in scrap prices and demand, and the resulting lack of sufficient liquidity has made it difficult for Recycling Industries to service its debt and fund ongoing operations. We have diligently examined other courses of action, but have been left no other recourse." "Market conditions have improved over the last 45 days, and it is our intention to continue our efforts to restructure the Company's existing indebtedness through discussions with our creditors under the protection of the bankruptcy laws. Recycling Industries is committed to diligently pursuing the Chapter 11 process to a successful conclusion and to emerge expeditiously," Wiens said. Mr. Wiens also announced that Raymond C. Lawhon would assume the position of President of the Company. Mr. Wiens said, "As President of Recycling Industries, Ray Lawhon will be responsible for financial and operational aspects of the Company. Restoring the Company to operational health and profitability is the major objective of management during these difficult market conditions. Mr. Lawhon is a seasoned 'hands on' professional that has worked in major private and publicly traded companies." SALANT: Phillips-Van Heusen To Get Dress Shirts Licenses -------------------------------------------------------- Supreme International Corporation (Nasdaq: SUPI) and Phillips-Van Heusen Corporation (NYSE: PVH) today jointly announced the signing of a letter of intent under which Supreme will license the dress shirt category domestically for the John Henry and Manhattan brands to Phillips-Van Heusen. This transaction will close immediately following the completion of Supreme's purchase of the brands from Salant Corporation. Terms of the transaction were not disclosed. The John Henry brand is distributed in department store chains and the Manhattan brand to mass merchants. Supreme International designs, imports, and markets men's and boys' fashion. SGL CARBON: Stipulation and Order With Ford Motor Credit -------------------------------------------------------- On February 4, 1999, the debtor, SGL Carbon Corporation and Ford Motor Credit Company entered into a stipulation and agreement regarding a commercial lease agreement pursuant to which the debtor has leased certain vehicles from Ford. The parties are seeking court approval of the agreement, which is a continuation of the debtor's Master Lease Agreement with respect to its leased vehicles, including its tractors. UNITED COMPANIES: Intends to File Chapter 11 -------------------------------------------- United Companies Financial Corporation (NYSE:UC) announced today that it and certain of its subsidiaries will each commence reorganization cases under chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware in Wilmington by the close of business today. The Company also announced that it has received commitments from Greenwich Capital Financial Products, Inc. and The CIT Group/Business Credit, Inc. to provide an aggregate of $500 million of debtor-in-possession financing and loan purchase facility, subject to Bankruptcy Court approval. Greenwich Capital and The CIT Group will provide working capital to the Company and Greenwich Capital will purchase, on a whole loan basis, the Company's home-equity loan originations. The Company intends to continue to maintain its business and operations while it pursues reorganization under chapter 11. The agreements with Greenwich and CIT will provide the Company with the flexibility and time necessary to establish itself as a whole loan sale company. The Company also announced that its Board of Directors has named Deborah Hicks Midanek as Chief Executive Officer. Ms. Midanek replaces J. Terrell Brown, who will continue his 90-day leave of absence and remains a member of the Board. Further, the Company announced that it has closed an additional 28 under-performing UC Lending(R) branches as well as eight satellite offices as it continues to match production volume with financing capabilities. In addition, as part of its transition to a whole loan sale operation, the Company will close or sell its GINGER MAE(R) subsidiary. United Companies Financial Corporation is a specialty finance company that provides consumer loan products nationwide through its lending subsidiary, UC Lending(R). The Company's Common and Preferred Stock trade on the New York Stock Exchange under the symbols "UC" and "UCPRI" respectively. USN COMMUNICATIONS: Notice Of Intent To Sell Assets --------------------------------------------------- The debtors, USN Communications, Inc., et al., published a notice of intent to sell substantially all of their assets in The Wall Street Journal on March 1, 1999. A hearing will be held on April 2, 1999 at 1:00 PM before the Honorable Peter J. Walsh, US Bankruptcy Court for the District of Delaware, 6th Floor, 824 Market Street, Wilmington, Delaware 19801, on the motion authorizing the debtors to sell substantially all of the debtors' assets, other than the common stock of USN Wireless, Inc. to CoreComm Limited pursuant to a certain Asset Purchase Agreement. The agreement provides for the sale of substantially all of the USN assets for cash determined by a formula which the debtors estimate will yield approximately $27,000,000 together with certain warrants to purchase shares of CoreComm common stock and a contingent payment based on revenues. The company will consider an alternate bid only if it provides for cash consideration of at least $2 million greater than the cash consideration set forth in the agreement, subject to certain other qualifications. Meetings, Conferences and Seminars ---------------------------------- 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 INSTITUTES 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 25-26, 1999 The American Law Institute -- American Bar Association Committee on Continuing Professional Education Commercial Securitization for Real Estate Lawyers Doubletree La Posada Resort, Scottsdale, Arizona Contact: 1-800-CLE-NEWS 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 5-6, 1999 PRACTISING LAW INSTITUTE 21st Annual Current Developments in Bankruptcy and Reorganization Conference PLI Conference Center, New York, New York Contact: 1-800-260-4PLI or info@pli.edu April 15-18, 1999 AMERICAN BANRKUTPCY INSTITUTE Annual Spring Meeting J.W. Marriott, Washington, DC Contact: 1-703-739-0800 April 19-20, 1999 PRACTISING LAW INSTITUTE 21st Annual Current Developments in Bankruptcy and Reorganization Conference Grand Hyatt, San Francisco, California Contact: 1-800-260-4PLI or info@pli.edu April 22-23, 1999 AMERICAN LAW INSTITUTE -- AMERICAN BAR ASSOCIATION COMMITTEE ON CONTINUTING PROFESSIONAL EDUCATION Conference on Revised Article 9 of the Uniform Commercial Code Sheraton New York Hotel, New York, New York Contact: 1-800-CLE-NEWS April 22-25, 1999 COMMERCIAL LAW LEAGUE OF AMERICA 69th Annual Chicago Conference Westin Hotel, Chicago, Illinois Contact: 1-312-781-2000 or clla@clla.org 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 April 30-May 4, 1999 INTER-PACIFIC BAR ASSOCIATION Annual Meeting and conference, including a one-day program on cross-border insolvencies Shangi-La Hotel, Bangkok, Thailand Contact: 011-66-2-233-0055 May 28-31, 1999 COMMERCIAL LAW LEAGUE OF AMERICA 51st Annual New England District Meeting Equinox Resort, Manchester Village, Vermont Contact: 1-413-734-6411 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 10-15, 1999 COMMERCIAL LAW LEAGUE OF AMERICA 105th Annual Convention Chateau Mont Tremblant, Mont Tremblant, Quebec Contact: 1-312-781-2000 or clla@clla.org 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 August 29-September 1, 1999 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES 1999 Convention Grove Park Inn, Asheville, North Carolina Contact: 1-803-252-5646 or info@nabt.com 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 The Meetings, Conferences and Seminars column appears in the TCR each Tuesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* The Meetings, Conferences and Seminars column appears in the TCR each Tuesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Bond pricing, appearing in each Friday edition of the TCR, is provided 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 1999. 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 * * *