/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/990308.MBXT R O U B L E D C O M P A N Y R E P O R T E R Monday, March 8, 1999, Vol. 3, No. 45 Headlines BARGAIN BARN: Files Chapter 11 BROTHERS GOURMET: Committee Objects To Ernst & Young BROTHERS GOURMET: Requests Time To Assume/Reject Leases BROTHERS GOURMET: Seeks Extension of Exclusivity CITYSCAPE FINANCIAL: Bar Date Set For March 22 CITYSCAPE FINANCIAL: Court Approves Loan Brokerage Deal CITYSCAPE FINANCIAL: Seeks Approval To Retain KPMG CODED COMMUNICATIONS: Order Converts Case To Chapter 7 CROWN BOOKS: Committee Taps Substitute Accountants IRIDIUM LLC: Issues Statement Regarding Financing LEVITZ FURNITURE: Gets Exclusivity Extension MAIDENFORM: Seeks Court OK To Sell Jacksonville Property ONCOR INC: Shaya Elected Acting President and CEO PARAGON TRADE: Equity Committee Objects To Settlement PARAGON TRADE: Kimberly-Clark Objects To P&G Settlement PAYLESS CASHWAYS: Annual Meeting Set For April 21 PHP HEALTHCARE: Bar Dates Set - March 30 PONDEROSA FIBRES: Taps Cleary, Gottlieb as Special Counsel RAND ENERGY: Court Approves Sale of Mississippi Assets SOLO SERVE: To Auction 20 Store Leases STAMOR CORP: Paragon Capital to Help Fine's Regain Footing TAPISTRON: Hardeman Confirmed As President THE PHARMACY FUND: Bar Date Set For April 1 TELEGROUP: Emergency Order For Use of Cash Collateral THE J. PETERMAN: Goes To Auction Today UNITED COMPANIES: Court Approves Commitments From Greenwich VOICE IT WORLDWIDE: Bar Date For Filing Proofs of Claim BOND PRICING FOR WEEK OF MARCH 1, 1999 ********* BARGAIN BARN: Files Chapter 11 ------------------------------ The Cincinnati Enquirer reports on February 27, 1999 that Bargain Barn Inc. in Mason has filed for Chapter 11 bankruptcy protection and is seeking to sell all assets of the business in order to pay off creditors. According to court documents filed this week, the business will be sold to the owner's son and daughter-in-law for $40,000. Of the proceeds, $10,000 will be paid to the Internal Revenue Service and $30,000 will pay unsecured creditors 30 cents on the dollar. There are no remaining secured creditors, according to the court filing. Bargain Barn is owned by George Hunt, who is described in the filing as "elderly and not in a position to continue operating the business." Advertisements for the sale of the business had been placed, but no other offers were made. Approximate value of the business assets, including the name, is $35,650. BROTHERS GOURMET: Committee Objects To Ernst & Young ---------------------------------------------------- The Official Committee of Unsecured Creditors of Brothers Gourmet Coffees Inc. objects to the debtors' application for entry of an order authorizing the employment and retention of Ernst & Young LLP as accountants and auditors for the debtors. The Committee states that the proposed retention is wholly and completely unnecessary. The debtors assert in their motion that they are seeking to hire Ernst & Young to assist the debtors in complying with certain SEC reporting requirements. In this case, the debtors' public securities have been de- listed from trading on any national market or exchange and it is a foregone conclusion that the debtors' common stock has no chance of receiving any distribution on account of their interests. The value or lack thereof of the debtors' common stock is well known and such knowledge would in no way be increased through the filing of periodic Forms 10-Q or 10-K. The Committee asserts that stockholders will have access to "adequate information" under the present circumstances when a disclosure statement is approved in connection with the Chapter 11 plan process. The Committee also states that retaining Ernst & Young to audit and/or prepare the debtors' financial statements would serve no rational purpose and would only result in the imposition of additional, unnecessary reductions in the recovery of the debtors' unsecured creditors. BROTHERS GOURMET: Requests Time To Assume/Reject Leases ------------------------------------------------------- The debtors, Brothers Gourmet Coffees, Inc., et al., seek a court order extending the period to assume or reject unexpired leases of nonresidential real property. To date, the debtors remain party to approximately 25 unexpired leases which are essential assets of the debtors' chapter 11 estates. Many of the unexpired leases are for warehouse space that currently is part of Brothers' direct store delivery network, and are critical to Brothers' operations.. On February 17, 1999 an auction for the sale of the debtor's business was conducted. The successful bidder has not yet been determined. The final decisions regarding many of the unexpired leases may depend significantly upon factors such as the identity of the Successful Bidder and the resulting structure of sale ultimately adopted. Therefore, by this motion, the debtors seek an order extending the period during which the debtors must assume or reject the unexpired leases until the earlier of (I) May 14, 1999, or (ii) confirmation of a plan of reorganization in the debtors' Chapter 11 cases, without prejudice to their right to seek further extension. BROTHERS GOURMET: Seeks Extension of Exclusivity ------------------------------------------------ The debtors, Brothers Gourmet Coffees, Inc., et al., seek a court order extending the exclusive periods during which the debtors may file a plan of reorganization and solicit acceptances thereof. On February 17, 1999 an auction for the sale of the debtor's business was conducted. The Creditors' Committee is continuing to review information regarding the bids, and a successful bidder has not yet been selected. The debtor anticipates that the plan will need to be amended, irrespective of which entity is the successful bidder, but the extent of the required changes will depend upon which bid is ultimately selected. The debtors are requesting that the Solicitation Period be extended to May 14, 1999. The debtors file a plan and a proposed Disclosure Statement, have received an evaluated a number of bids, and have conducted an auction for the sale of their business. CITYSCAPE FINANCIAL: Bar Date Set For March 22 ---------------------------------------------- The Bankruptcy Court for the Southern District of New York entered an order establishing March 22, 1999 as the last day for filing proofs of claim against either one or both of the debtors, Cityscape Financial Corp. and/or Cityscape Corp. CITYSCAPE FINANCIAL: Court Approves Loan Brokerage Deal ------------------------------------------------------- The Bankruptcy Court for the Southern District of New York entered an order approving and authorizing Cityscape Corp., debtor, to enter into a certain loan brokerage agreement with Hanover Capital Partners, Ltd. CITYSCAPE FINANCIAL: Seeks Approval To Retain KPMG -------------------------------------------------- The debtors, Cityscape Financial Corp., and cityscape Corp., seek authorization to retain and employ and compensate KPMG LLP as independent public accountants to perform certain limited work for the debtors. The firm will perform an audit of the debtor's consolidated financial statements, assist with the pre-petition of the 10K to be filed with the SEC and render tax consulting services with respect to the debtors' foreign, federal, state and local income tax returns. The debtors seek authorization to pay the firm $123,630 for certain computer consulting services rendered following the Petition Date. CODED COMMUNICATIONS: Order Converts Case To Chapter 7 ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware entered an order on the motion of the Liquidating Trustee for Renaissance Capital Partners, II , Ltd. converting the case of Coded Communications Corporation, et al., to a case under Chapter 7 of the Bankruptcy Code. CROWN BOOKS: Committee Taps Substitute Accountants -------------------------------------------------- The Official Committee of Unsecured Creditors for the debtors, Crown Books Corporation and its affiliates, apply to the Court for an order approving the substitution of J.H. Cohn LLP as substitute accountants and financial advisors to the Committee. Initially, the accounting firm of M.R. Weiser & Co. LLP was appointed in this case. However, the entire professional staff of the Business Investigation Services group of M.R. Weiser are now associated with the accounting and consulting firm of J.H. Cohn LLP. J.H. Cohn LLP's customary hourly rates range from $340/hour for a partner to $165 per hour for a senior accountant. IRIDIUM LLC: Issues Statement Regarding Financing ------------------------------------------------- On March 1, 1999, Iridium LLC issued the following press release stating that the company is aggressively addressing the challenges related to the initial rollout of service. In doing so the company states, "we are committed to working very closely with our lenders and will continue to keep them informed of the company's ongoing progress. At this point, Iridium has not engaged in any discussions regarding the modification of the subscriber and revenue targets contained in the company's $800 million Senior Secured Credit Agreement. However, with current projections showing that initial delays with Iridium's global service rollout will likely cause the company to fall short of the first quarter target numbers, we do expect that we will be working with our banks to modify these milestones going forward. This is not an indication of how Iridium will fare in the months ahead, nor does it affect the company's ability to meet its debt payment obligations. We believe our banks will agree and will continue to support the Iridium program. It is important to note that the causes of the delays in Iridium's subscriber ramp-up have not been associated with the level of market demand for our product, which we believe to be strong, but rather with distribution problems such as shortages of phones, pagers and fully- trained sales channels. Iridium is encouraged by the progress in resolving these distribution issues. The Iridium system is providing an excellent level of service worldwide. Customers in the industrial and government markets, who are presently evaluating the service, are providing us highly positive feedback and we believe they will be significant customers of Iridium satellite phones and pagers. Both product manufacturers, Motorola and Kyocera, are now shipping subscriber equipment and are capable of meeting market demand. And we expect that, as more service providers begin actively selling Iridium products and services over the next few weeks, Iridium's presence in the market will increase. Iridium LLC became the world's first global satellite phone and paging company on November 1, 1998. The network of 66- low earth orbiting satellites, combined with terrestrial cellular systems, enables subscribers to communicate virtually anywhere in the world using one phone and pager, one phone number, and receiving one monthly bill. Customers access participating local cellular networks when available, and the Iridium satellite network when outside terrestrial cellular coverage. Iridium World Communications, Ltd. (NASDAQ: IRID) is the public investment vehicle of Iridium LLC. Iridium is a registered trademark and service mark of Iridium LLC (C) 1999." LEVITZ FURNITURE: Gets Exclusivity Extension -------------------------------------------- Levitz Furniture Inc. was granted court approval of three key motions at a hearing Tuesday in the U.S. Bankruptcy Court for the District of Delaware, including an exclusivity extension and an extension of time under its DIP financing agreement. Judge Joseph J. Farnan granted a 90-day extension of the exclusive periods in which Levitz can formulate a plan of reorganization and solicit plan acceptances. The court order extends exclusivity to July 7. The court also approved a motion to extend the furniture retailer's DIP financing pact to June 7. The deal had been scheduled to expire on March 5. The court also approved an increase in the amount available under the loan. (The Daily Bankruptcy Review and ABI c March 5, 1999) MAIDENFORM: Seeks Court OK To Sell Jacksonville Property -------------------------------------------------------- The debtors, Maidenform Worldwide, Inc., et al., seek court approval to sell certain assets located at 11801 Central Parkway, Jacksonville, Florida to Investment Property Group Management Company, Inc., as purchaser, for a purchase price of $3.1 million, subject to higher and better offers. The property was formerly used by the debtors as a distribution center, was closed pursuant to a settlement agreement with the debtors' union employees when debtor consolidated all of its domestic distribution operations at the facility located in Fayetteville, North Carolina. While there were 15 initial interested parties in the property, only two parties made offers after preliminary diligence, and the first offer was later withdrawn. After payment of costs, fees and expenses, the debtor will pay the remaining net proceeds to repay an equivalent amount of the amounts outstanding under the DIP loan. The debtor anticipates that upon such repayment, such funds will immediately be available to be re-borrowed by the debtor under the terms and conditions of the DIP Loan, thus ensuring that the debtor has access to repaid amounts to fund its ongoing working capital needs. ONCOR INC: Shaya Elected Acting President and CEO ------------------------------------------------- Oncor Inc. reports to the SEC on February 26, 1999 that Joseph Shaya has been elected Acting President and Chief Executive Officer of the company. PARAGON TRADE: Equity Committee Objects To Settlement ----------------------------------------------------- Paragon Trade Brands Inc.'s official committee of equity security holders object to the settlement with Procter & Gamble. According to a report in The Wall Street Journal on March 4, 1999, the committee claims that Weyerhaeuser co. which created Paragon in 1993 should pay some of the settlement costs. The committee said that the settlement is just slightly less than the $178.4 million judgment levied against Paragon by a Delaware court, so even if the company loses at appeal, it won't be much worse off. PARAGON TRADE: Kimberly-Clark Objects To P&G Settlement ------------------------------------------------------- Kimberly-Clark Corporation ("K-C")complains that Paragon Trade Brand Inc.'s motion for an order authorizing and approving the settlement with Procter & Gamble Company ("P & G") seeks approval of a single settlement agreement but makes it clear that the desired benefits to the estate will only be achieved through settlements with both P&G and Kimberly-Clark. Kimberly Clark states that it makes no sense to burden the estate by putting one piece of the settlement puzzle in place without the assurance that the second piece will be forthcoming. PAYLESS CASHWAYS: Annual Meeting Set For April 21 ------------------------------------------------- Payless Cashways filed notice with the SEC that the Annual Meeting of Stockholders of Payless Cashways,Inc. will be held at the Kansas City Marriott Downtown, 200 West 12th Street, Kansas City, Missouri, on Wednesday, April 21, 1999 at 10:00 a.m. to elect two Class II directors to a term of three years each as set forth in the Proxy Statement. PHP HEALTHCARE: Bar Dates Set - March 30 ---------------------------------------- The U.S. Bankruptcy Court for the District of Delaware entered an order in the case PHP Healthcare Corporation establishing March 30, 1999 as the general claims bar date. PONDEROSA FIBRES: Taps Cleary, Gottlieb as Special Counsel ---------------------------------------------------------- The debtor, Ponderosa Fibres of Washington, LP is seeking authorization to employ and retain Cleary, Gottlieb, Steen & Hamilton as special counsel for the debtor. In order to effectively implement a plan of reorganization and effectuate such a plan during the pendency of this Chapter 11 case, the debtor will require the assistance of experienced outside corporate and tax counsel to assist in negotiating with its bondholders and restructuring its bond debt. The firm has served as the debtor's corporate and tax counsel since 1997 and is familiar with the debtor's business. The firm of Richards, Layton & Finger, PA is the debtor's bankruptcy counsel in this case, and the debtor assures the court that the firms will not duplicate their services to the debtor. RAND ENERGY: Court Approves Sale of Mississippi Assets ------------------------------------------------------ The debtor's sale of the Mississippi Assets to Rebel is approved by the Bankruptcy Court of the Northern District of Texas Dallas Division. The terms of the transaction include the payment of $9 million in cash, a 2% overriding royalty interest in certain leases; a conveyance of certain properties located in Texas, a release of Rebel's administrative expense claim and Rebel's payment to the debtor for liens on the Bazor #1 well. By separate orders the Court approves the debtor's motion to assume a certain Exploration Agreement and Operating agreements with Rebel Drilling Company, LP. The court also approves the bid procedures in connection with the sale of the debtor's New Mexico and Texas oil and gas properties to KUKUI. Any offers to acquire the Sale Assets from third parties must exceed KUKUI's purchase price by $150,000. SOLO SERVE: To Auction 20 Store Leases -------------------------------------- On Thursday the U.S. bankruptcy court for the Western District of Texas approved a request that Solo Serve Corp. auction of 20 store leases, according to the San Antonio Express-News. Judge Ronald B. King okayed the motion made by the San-Antonio-based retailer, provided that bidders "provide adequate assurance of future performance, or [a bid] won't be approved," King said. "We're not going to railroad any landlords." The off-price retailer, which filed chapter 11 in January, specializes in selling a wide range of apparel and accessories at discounted prices. The company had previously filed chapter 11 in July 1994 and emerged from bankruptcy one year later. (ABI 05-Mar-99) STAMOR CORP: Paragon Capital to Help Fine's Regain Footing ---------------------------------------------------------- Paragon Capital announced that it will provide $3.5 million of DIP financing to Stamor Corp. d/b/a Fine's (Fine's), a 66-year-old young men's casual apparel chain based in Norfolk, Va. Planning to return to it's diverse product mix and refocus on its core stores during the next 18 months, Fine's has sought out one of the retail industry's new sources of working capital. For Fine's, merchandising has been the issue, explained President & CEO Mitchell Fine. In recent years, its stores became too trendy, too focused on brands and too high-priced. This narrowed its customer base, leading to decreased market share. Fine's has been operated by the same family since it was founded in 1933. With 36 stores in seven mid-Atlantic states, the company offers casual apparel for young men ages 18 to 35. Experiencing poor back-to-school and holiday seasons in 1998, the company elected to close seven stores last December-six in North Carolina and one in Virginia. It filed for Chapter 11 protection on February 4, 1999. Paragon Capital is a partnership between The Ozer Group LLC of Needham, Mass., and Foothill Capital Corporation of Los Angeles. TAPISTRON: Hardeman Confirmed As President ------------------------------------------ Tapistron International, Inc. announced the sudden and unexpected death of President J. Darwin Poe. Mr. Poe had served as President and Chief Executive Officer of Tapistron since July 1995, when he was brought in to turn the Company around. Poe successfully led the Company through its Chapter 11 reorganization, and its recapitalization, while at the same time improving product service and revitalizing the Company's marketing effort. A special Board meeting was called Tuesday, March 2, 1999, and the election of Mr. Rodney C. Hardeman as President of Tapistron was confirmed. Mr. Hardeman has over twenty-five years of sales and marketing experience within the carpet industry, and has served as a Director of the Company since January 1998, and Executive Vice President of Sales and Marketing at Tapistron since August 1998. The Board of Directors' meeting will be held March 18, 1999, at which time a new director for the board will be proposed for election to fulfill the vacancy created by Mr. Poe's untimely death. THE PHARMACY FUND: Bar Date Set For April 1 ------------------------------------------- By order of the Bankruptcy Court of the Southern District of New York, all persons and entities that assert a claim against The Pharmacy Fund, Inc. or Pharmacy Fund Receivables, Inc. which arose prior to September 9, 1999 must file a written proof of such claim by April 1, 1999. A meeting of creditors is scheduled for April 14, 1999 at 1:00 PM at the Office of the United States Trustee, 80 Broad Street, 2nd Floor, New York, New York 10004. TELEGROUP: Emergency Order For Use of Cash Collateral ----------------------------------------------------- The debtor, Telegroup, Inc. was authorized by the court to use the Secured Creditor's cash collateral up to the sum of $8 million through the conclusion of the preliminary hearing. Foothill Capital Corporation asserts a secured claim against the debtor as of the Petition Date in the principal amount of $25,000,000. A preliminary hearing will be held on March 9, 1999. THE J. PETERMAN: Goes To Auction Today -------------------------------------- Lexington, Ky.-based J. Peterman company goes on the auction block this morning, according to a newswire report. The company filed chapter 11 on Jan. 25, 1999. A group with American Eagle Outfitters has already offered to buy the bankrupt company. (ABI 05-Mar-99) UNITED COMPANIES: Court Approves Commitments From Greenwich ----------------------------------------------------------- United Companies Financial Corporation (NYSE: UC) announced that it has received approval from the U.S. Bankruptcy Court of its previously announced financing commitments from Greenwich Capital Financial Products, Inc. and The CIT Group/Business Credit, Inc. Under the terms of the agreements, the Company has available an interim aggregate of $225 million in debtor- in-possession financing which will provide working capital while the Company seeks to reorganize to operate in a whole loan sale environment. Greenwich Capital and The CIT Group will provide an interim secured warehouse facility of $150 million and Greenwich Capital has committed to an interim revolving flow-through purchase commitment of $75 million. The financing commitments will go up to $300 million under the warehouse facility and $200 million under the purchase facility upon satisfaction of certain conditions and final approval of the bankruptcy court at a hearing presently scheduled for March 18, 1999. United Companies Financial Corporation is a specialty finance company that provides consumer loan products nationwide through its lending subsidiary, UC Lending(R). VOICE IT WORLDWIDE: Bar Date For Filing Proofs of Claim ------------------------------------------------------- The United States Bankruptcy Court for the District of Colorado entered an order dated February 22, 1999 requiring that proofs of claim in the debtor's Chapter 11 case be filed with the court on or before March 29, 1999. BOND PRICING FOR WEEK OF MARCH 1, 1999 From DLS CAPITAL PARTNERS, INC -------------------------------------- Following are indicated prices for selected issues: Acme Metal 10 7/8 '07 11 - 13 (f) Amer Pad & Paper 13 '05 59 - 61 Amresco 9 7/8 '05 75 - 78 Atel 0/14 1/2 '04 13 - 15 Asia Pulp & Paper 11 3/4 '05 62 - 64 Boston Chicken 7 3/4 '05 5 - 6 (f) Brunos 10 1/2 '05 13 - 15 (f) Cityscape 12 3/4 '04 12 - 14 (f) E & S Holdings 10 3/8 '06 36 - 38 Globalstar 11 1/4 '04 66 - 69 Geneva Steel 11 1/8 '01 19 - 22 (f) Hechinger 9.45 '12 27 - 35 Hills 12 1/2 '02 95 - 96 Loewen 7.20 '03 58 - 60 Mobilemedia 9 3/8 '07 13 - 16 (f) Penn Traffic 8 5/8 '03 44 - 46 (f) Planet Hollywood 12 '05 22 - 25 Royal Oak 12 3/4 '06 18 - 25 (f) Samsonite 10 3/4 '08 75 - 77 Service Merchandise 9 '04 23 - 24 (f) Sunbeam 0 '18 11 - 12 Trism 10 3/4 '00 48 - 50 Trump Castle 11 3/4 '05 74 - 76 Zenith 6 1/4 '11 28 - 30 (f) ********* 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 * * *