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/raid1/www/Hosts/bankrupt/TCR_Public/990310.MBXT R O U B L E D C O M P A N Y R E P O R T E R Wednesday, March 10, 1999, Vol. 3, No. 47 Headlines ATLAS CORP: Court Ok's Counsel To Atlas Precious Metals BONNEVILLE PACIFIC: Meets with Advisor to Consider Sale CHAPEL COMPANY: Case Summary & 20 Largest Creditors CLARK BAR: Files For Bankruptcy CORONA RANCH: Files Chapter 11 DEPALMA PRINTING: Case Summary & 20 Largest Creditors EDISON BROS: To File Bankruptcy - Again FASTCOMM: Reports Third Fiscal Quarter Results GENEVA STEEL: Taps Counsel For Cases in Mexico GENEVA STEEL: Seeks Court Authority To Employ Parr Waddoups HOMESTAKE MINING: Buys Argentina Gold IMARK TECHNOLOGIES: Notice of Confirmation of Plan JUMBOSPORTS: Notice of Hearing LAWRENCE GROUP: Trustee To Be Appointed NU-KOTE: Court Denies Exclusivity Request PAYLESS CASHWAYS: Seeks Less Expensive Headquarters PENN TRAFFIC: Seeks Restructuring PHILIP SERVICES: Reaches Accord To Redo Debt READING CHINA AND GLASS: Bar Date Set For April 26 RIO GRANDE: Order Confirms Plan ROASTERS CORP: Order Confirms Plan SCOTT CABLE: Going Back To Court With IRS USTEL: Evaluating Options, Including Bankruptcy VOICE IT: Order Fixes Date For Filing Disclosure Statement WILSHIRE FINANCIAL: Hearing Set For Disclosure Statement WIRELESS ONE: Meeting of Creditors WORLDWIDE DIRECT: Seeks Authority To Retain Consultant ********* ATLAS CORP: Court Ok's Counsel To Atlas Precious Metals ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado approved the application of the debtor Atlas Precious Metals Inc. to employ Sender & Wasserman, PC as counsel to Atlas Precious Metals Inc. BONNEVILLE PACIFIC: Meets with Advisor to Consider Sale ------------------------------------------------------- Bonneville Pacific Corp. said on Monday that it met with its bankruptcy-court appointed financial advisor, CIBC Oppenheimer Corp., which will help the energy company decide whether to sell some or all of its assets, according to a newswire report. CIBC Oppenheimer will solicit bids from interested parties for some or all of the operations of the company. (ABI 09-Mar-99) CHAPEL COMPANY: Case Summary & 20 Largest Creditors -------------------------------------------------- Debtor: Chapel Company, Inc. 1537 Glen Avenue Moorestown, NJ 08057 Affiliates Filing Chapter 11: Chapel Distribution Inc. DePalma Printing Co. Inc. Court: District of Delaware Case No.: 99-518 Filed: 03/08/99 Chapter: 11 Debtor's Counsel: David Fournier, Esq. Pepper Hamilton LLP 1201 Market Street P.O. Box 1709 Wilmington, DE (312) 777-6500 20 Largest Unsecured Creditors: Name Amount ---- ------ Adpel Associates 46,200 Amerihealth Insurance Co. 89,048 Case Paper Company 46,508 Central Lewmar Paper 424,503 Delaware Valley Bindery 96,000 Direct Mail 22,600 Fell Brothers 29,513 GCIU Local 14 48,609 GE Richards 82,120 Gould Paper 79,712 Graphic Systems, Inc. 67,250 Kenney and Kearney 54,646 Keystone Printing Ink Co. 25,702 Monarch Ink 23,287 Pittman Company 92,868 RIS Paper 123,234 UPS 29,168 Unisource 45,000 WWF Paper Corporation 46,508 XPEDX 30,752 CLARK BAR: Files For Bankruptcy ------------------------------- The maker of the Clark Bar filed for Chapter 11 bankruptcy protection Monday after years of financial turmoil. "Clark has had many problems in the past several years," Clark Bar America Inc. spokeswoman Diana Scally said. "Unfortunately, it's just gotten to the point where we need protection from creditors." Company officials have worked for the past 18 months on a restructuring plan but ran out of time and had no option but to seek bankruptcy protection in federal court, Scally said. The candy bar ran into trouble once before when its previous maker filed for bankruptcy protection. The filing will enable Clark to keep operating under a court's supervision while it develops a plan for returning to solvency, to facilitate a restructuring or a sale of all or parts of the retail organization. It was the best option to keep some 100 employees working to produce the signature Clark Bar, a chocolate-coated peanut butter crunch bar, and other variations, Scally said. Officials are discussing bringing in new investors or selling the company; no immediate layoffs are expected, Scally said. CORONA RANCH: Files Chapter 11 ------------------------------ Corona Ranch LLP, a limited partnership backed by real estate developer Legacy Partners Development Inc., has filed chapter 11 in an attempt to restructure tax debt on a 20-acre residential property in Corona, Calif., The Business Press reported. Corona Ranch filed chapter 11 on Feb. 27, and listed liabilities of at least $1 million. Primary creditors include the city of Corona, Riverside County, the Corona-Norco Unified School District and Legacy Partners. (ABI 09-Mar-99) DEPALMA PRINTING: Case Summary & 20 Largest Creditors ----------------------------------------------------- Debtor: DePalma Printing Company, Inc. 1537 Glen Avenue Moorestown, NJ 08057 Affiliates Filing Chapter 11: Chapel Distribution Inc. Chapel Company Inc. Court: District of Delaware Case No.: 99-519 Filed: 03/08/99 Chapter: 11 Debtor's Counsel: David Fournier, Esq. Pepper Hamilton LLP 1201 Market Street P.O. Box 1709 Wilmington, DE (312) 777-6500 20 Largest Unsecured Creditors: Name Amount ---- ------ Ailing and Cory 8,469 Creative Laminating 8,171 De Palma Enterprise 39,575 Dilworth Paxson 17,350 Dynamic Die Cutting 9,210 Equitable Life 10,787 Fox Bindery 39,833 Freedman Die Cutters 10,827 Graphic Solution 20,800 Graphic Systems Inc. 16,843 Invincible Business Forms 9,368 Valey Die Cutting 9,238 Vulcan Binder 15,329 XRC Inc. of New Jersey 9,596 AJ La Course 12,555 Lindenmeyer-Munroe Paper 27,831 M&M Die Cutting 14,162 Pano Dot 68,292 Public Service 10,653 TBC Color Imaging 22,407 EDISON BROS: To File Bankruptcy - Again --------------------------------------- Severe competition and disappointing operating results will force Edison Brothers Stores Inc. to file for bankruptcy Tuesday morning, company officials said. Edison, a national retail discount chain that sells apparel and footwear, on Monday said it is filing for bankruptcy protection in Delaware under Chapter 11 of the U.S. Bankruptcy Code. The filing will enable Edison to keep operating under a court's supervision while it develops a plan for returning to solvency, to facilitate a restructuring or a sale of all or parts of the retail organization. Edison officials said they have no plans to lay off workers in its stores and distribution centers, although officials said 250 positions at its headquarters had been eliminated. Edison emerged from a previous Chapter 11 reorganization in September 1997, and a new management team took over the company in January 1998. Edison operates Bakers and Wild Pair footwear stores, 5-7-9 junior apparel stores, Riggings, JW, Coda and Repp Ltd., Big and Tall menswear stores and Repp by Mail men's catalog. Shares of Edison were unchanged at 31 1/4 cents in light trading on the Nasdaq Stock Market. Bankruptcy Creditors' Service, Inc., resumed publication of Edison Brothers Bankruptcy News following yesterday's filing in Wilmington, Delaware. A copy of the 25th issue of the newsletter, including a consolidated list of the Debtors' 35 largest unsecured creditors, is posted at: ftp://bankrupt.com/Bankruptcy_News/Edison_Brothers/ along with free back issues from the Edison Brothers I bankruptcy cases. FASTCOMM: Reports Third Fiscal Quarter Results ---------------------------------------------- FastComm Communications Corp. (OTC BB:FSCX) reported today its financial results for the third quarter of fiscal 1999, ended 30 January 1999. Revenue for the period was $1.7 million, down from $2.1 million in the same quarter of the previous fiscal year. There was a net loss of $1.2 million ($.10 per share), which included reorganization related charges of $215,000. This compared favorably to a $3.2 million ($.31 per share) loss a year ago. On a fiscal year to date basis, the Company reported revenue of $4.0 million, down from $5.6 million for the corresponding period of the previous fiscal year. There was a net loss of $4.8 million ($.38 per share), which included reorganization related charges of $529,000. This compared to a $6.9 million ($.69 per share) loss a year ago. "The Chapter 11 continues to hamper our selling efforts," said Peter C. Madsen, FastComm president. "We filed our final disclosure statement and plan of reorganization with the endorsement of the creditors committee. We look forward to the confirmation of our plan and anticipate emerging from Chapter 11 shortly." The Company continues to reduce its operating overheads. Third quarter selling, general and administrative expenses decreased $134,000 or (11%) when compared with the previous quarter and $771,000 or (43%) when compared with that of the third quarter of the previous fiscal year. On a fiscal year to date basis, such costs have declined over $1.5 million or (29%). GENEVA STEEL: Taps Counsel For Cases in Mexico ---------------------------------------------- The debtor, Geneva Steel Company applies to employ Skadden, Arps, Slate, Meagher & Flom LLP ("Skadden") and Gonzalez Luna y Perez De Acha ("GLP") as special counsel for the specified special purpose of representing Geneva in proceedings involving "anti-dumping" duties imposed by Mexico against Geneva. One matter, requiring immediate attention is the appeal of the effect of the "sunset" provision on the plate-in-coil steel anti-dumping order. The other two matters involve cut-length steel plate and hot-rolled sheet steel. The debtor has agreed to pay $25,000 as a retainer for GLP to pursue the proceeding regarding plate-in-coil steel and seeks immediate approval for this payment so that GLP can file the general power of attorney on Geneva's behalf. If successful, Geneva will owe an addition contingency fee of $50,000 to GLP. Geneva states that if it becomes able to sell plate-in-coil steel in Mexico, Geneva will realize, potentially millions of dollars in revenue from sales. With regard to Cut-length plate steel, Geneva requires the services of Skadden and GLP to ensure SECOFI's compliance with a certain overturned order. Geneva previously paid GLP $100,000 for its work in this matter. Skadden bills for each of these matters by the hour. With regard to the hot-rolled sheet steel Skadden and GLP filed a new proceeding. Geneva has already paid $18,750 to GLP as its share of this litigation. If successfully overturned, so that Geneva is allowed to sell hot-rolled sheetsteel in Mexico, Geneva will owe GLP an additional $18,750. Skadden attorneys bill at an hourly rate ranging from $390- $600 per hour for partners, $375 per hour for counsel and $180-$360 per hour for associates. GENEVA STEEL: Seeks Court Authority To Employ Parr Waddoups ----------------------------------------------------------- The debtor, Geneva Steel, seeks court authority to employ the Salt Lake City law firm of Parr Waddoups Brown Gee & Loveless, as special counsel. The firm will render the following professional services: Environmental permitting, compliance, rule-making; Administrative water right filings in the vicinity of Geneva's properties; Preservation of Geneva's limestone and iron mining properties; Ongoing operations of Geneva and its subsidiaries; CPICOR Management Company LLC negotiation of agreements with the US Department of Energy; Mechanics and other liens against Geneva property Property and sales tax and other assessments against Geneva and its property; The acquisition and disposition of real and personal property; Securities compliance, disclosure; Employment-related matters, excluding negotiation of collective bargaining. The firm will also represent Geneva in litigation and regulatory matters that are currently pending or that may arise during the case other than bankruptcy matters. The customary hourly rates for Parr Waddoups attorneys who will likely be asked to perform services for Geneva presently range from $120 to $235 per hour. HOMESTAKE MINING: Buys Argentina Gold ------------------------------------- Giant U.S. miner Homestake Mining Co. joined its major gold producing rivals in the acquisition arena Monday with a $200-million friendly takeover of upstart Canadian exploration firm Argentina Gold Corp. The all-stock transaction gives San Francisco-based Homestake, one of North America's largest gold companies, 60-percent control over the prized Veladero gold mining project in Argentina's northwestern San Juan province. Veladero is estimated to contain 4.5 million ounces of gold and 100 million ounces of silver, though Argentina Gold officials have said the mine could ultimately yield as much as 20 million ounces of gold. "Based on recent independent surveys and our own due diligence, we believe that the Veladero property is a superb gold asset with exceptional upside potential," Homestake Chief Executive Jack Thompson said in a press release following the takeover. Homestake, a conservative gold producer with operations in the United States, Canada, Australia and Latin America, said it would begin an aggressive drilling program to increase Veladero's reserves later this year. The deal is a slap in the face for Canada's Barrick Gold Corp. which launched late last year a bitterly contested and ultimately unsuccessful C$160-million, or C$5.00 a share, takeover bid for Argentina Gold. Barrick, which owns the remaining 40 percent of Veladero, allowed that bid to expire one month ago. Although Homestake appeared the winner in the race for the prized project, analysts expressed concerns the U.S. company had paid too high a premium for its catch. Under the terms of the agreement, investors will receive 0.545 Homestake shares for each Argentina Gold share tendered, a 63-percent premium on Argentina Gold's close of C$4.80 a share Friday on the Vancouver Stock Exchange. Argentina Gold shares rose C$2.10 to C$6.90 a share in late afternoon trading Monday on the VSE. Homestake said it planned to issue about 21 million shares, equal to 8.8 percent of the company's outstanding shares, to complete the deal. Homestake shares were unchanged at $14.40 a share Monday on the American Stock Exchange. If Argentina Gold shareholders approve the deal, which is expected to occur within the next two months, Homestake will become the third major gold player to poach an up-and- coming producer in the past four months.($1=$1.52 Canadian) IMARK TECHNOLOGIES: Notice of Confirmation of Plan -------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of VA, Alexandria Division entered an order on March 3, 1999 confirming the plan of reorganization filed by Imark Technologies, Inc. JUMBOSPORTS: Notice of Hearing ------------------------------ On March 23, 1999 at 1:30 PM the court will conduct a final evidentiary hearing to consider the application of the debtor, JumboSorts Inc., and its affiliates for authorization to employ Jefferies & Company, Inc. as financial advisor for the debtor. LAWRENCE GROUP: Trustee To Be Appointed --------------------------------------- Judge Robert Littlefield Jr. ruled on Feb. 26 that a trustee should be appointed in the Lawrence Group Inc. bankruptcy case to shepherd the Schenectady, N.Y., company through reorganization, according to a newswire report. The judge agreed with Fleet National Bank of Providence, R.I., that a trustee should be appointed but he rejected the bank's alternative request that the two-year-old case be converted to chapter 7 liquidation. Fleet is indenture trustee for Alpha Trust, the financial vehicle to which Lawrence Group owes $27 million. (ABI 09-Mar-99) NU-KOTE: Court Denies Exclusivity Request ----------------------------------------- Bankruptcy Judge Keith Lundin has denied Nu-Kote's request for an extension on exclusivity, according to a law firm involved in the case. Judge Lundin determined that the Nu- kote cases would move forward if exclusivity were not extended, and he determined that the "reasons they [the debtors] haven't been able to get there don't arise or don't rise to the level of cause, in my opinion, to extend the exclusivity period." The debtors had argued that the time spent in bankruptcy court hearings and in stabilizing the business, when coupled with the size and complexity of the cases, justified an extension of exclusivity. The lender group, which is owed $142 million and is represented by Dan Stewart and Bill Wallander of Winstead Sechrest & Mincik and Paul Jennings of Bass Berry & Sims, had argued that an extension of exclusivity would block the lenders from competing on a fair and level playing field and further frustrate case resolution. (ABI 09-Mar-99) PAYLESS CASHWAYS: Seeks Less Expensive Headquarters --------------------------------------------------- Payless Cashways Inc., Kansas City, is preparing to move its corporate headquarters in efforts to reduce costs during its chapter 11 reorganization, according to The Kansas City Business Journal. A decision on the new location will be made within a few weeks, according to the company. The home improvement retailer said its two priorities are to reduce costs and to find a situation "conducive to our associates." Some 500 people are employed at the headquarters. The nearby suburb of Lee's Summit is under consideration. (ABI 09-Mar-99) PENN TRAFFIC: Seeks Restructuring --------------------------------- The Albany Times Union reports on March 3, 1999 that Penn Traffic Co., which operates P&C Foods supermarkets in central New York and several other stores in Ohio, West Virginia and Pennsylvania, listed assets of $1.51 billion and liabilities of $1.70 billion in bankruptcy documents. The Syracuse company, which reported more than $3 billion in sales in 1998, filed for Chapter 11 protection from its creditors Monday in U.S. Bankruptcy Court in Wilmington. Penn Traffic sought restructuring after missing interest payments on $1.13 billion in senior and subordinated notes. "The debt restructuring process has moved forward very expeditiously with the cooperation of all parties," said company Chairman Gary Hirsch in a formal statement. The company said each 100 shares of common stock will be converted to one new share, the notes will be canceled and $100 million in new notes, 19 million shares of new common stock and warrants will be distributed. Among the largest unsecured creditors listed by Robert Davis, company vice president, were U.S. Trust Co. of New York, trustee for $407 million in notes; First Trust of California in San Francisco, trustee for $400 million in notes; and Norwest Bank Minnesota in Minneapolis, trustee for $125 million in notes. The company also owes more than $1 million each to Kraft General Foods of Philadelphia, Procter & Gamble Co. of Pittsburgh, General Mills Inc. of Pittsburgh and Coca Cola Bottling Co. of Cincinnati, according to court papers. PHILIP SERVICES: Reaches Accord To Redo Debt -------------------------------------------- Philip Services Corp. said it reached a debt-restructuring agreement with holders of more than 50% of the company's $1.07 billion of secured syndicated debt. As reported in The Wall Street Journal on March 9, 1999, the debtholders, including Carl Icahn agreed to a plan to convert the secured syndicated debt into $300 million of senior secured debt and $100 million of convertible notes. Under the plan, the balance of the syndicated debt would be exchanged for 90$ of the common shares of the restructured company and existing shareholders would hold as much as 10% of the shares of the restructured company. The plan requires approval by 2/3 of the holders of the total syndicated debt. The company hopes to stabilize its businesses through the debt restructuring. Philip has annual revenue of about $1.8 billion. READING CHINA AND GLASS: Bar Date Set For April 26 -------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware entered an order setting April 26, 1999 as the Bar Date in the case of Reading China and Glass, Inc. and its affiliates. All creditors of the debtors holding claims of any kind that arose on or before the Petition Date (October 29, 1998) must submit a proof of claim prior to 4:00 PM on April 26, 1999. RIO GRANDE: Order Confirms Plan ------------------------------- By order of the U.S. Bankruptcy Court for the Western District of Texas on March 5, 1999, the amended Chapter 11 plan of Rio Grande Offshore, Ltd., Rio Grande Gulfmex, Ltd., Rio Grande Desert Oil Company, Rio Grande Drilling Company and Rio Grande Inc. was confirmed. ROASTERS CORP: Order Confirms Plan ----------------------------------- On March 3, 1999 an Order was entered by the U.S. Bankruptcy Court for the Middle District of North Carolina confirming the First Amended Franchisee Plan of Reorganization filed on January 15, 1999 by the Official Committee of Franchisees. SCOTT CABLE: Going Back To Court With IRS ----------------------------------------- Scott Cable Communications Inc. and the Internal Revenue Service will go back to court today to seek a determination as to whether the government's tax claims are barred by the 1996 order confirming the company's prior plan of reorganization. The other issue the court will consider is whether Scott Cable can intervene on behalf of State Street Bank and Trust Co., as trustee for the junior subordinated secured pay-in-kind notes, in the adversary proceeding the government brought against the trustee. The adversary proceeding seeks to have the junior notes recharacterized as equity, or alternatively subordinated to the claims of the general unsecured creditors. The government asserts that if it was recharacterized, Scott Cable's tax liability arising from its $165 million sale to InterLink Communications Partners LLLP would be larger than the $37.4 million projected by the cable company. (The Daily Bankruptcy Review and ABI Copyright c March 9, 1999) USTEL: Evaluating Options, Including Bankruptcy ----------------------------------------------- USTel Inc. hired Ernst & Young to evaluate its operations and recommend alternatives to preserve value to the company's equity and debt holders, as well as its vendors and creditors. This includes the possible filing of a bankruptcy petition, according to a filing with the Securities and Exchange Commission. Separately, a forensic audit report conducted by Arthur Anderson revealed accounting errors, merger related expenditures, interested party transactions and management decisions that impacted the financial condition of USTel's Arcada Communications subsidiary. The report was initiated after the company's board of directors raised concerns regarding the financial condition of Arcada and the suspected non-disclosure of certain liabilities, inaccurate accounting procedures and interested party transactions. (The Daily Bankruptcy Review and ABI Copyright c March 9, 1999) VOICE IT: Order Fixes Date For Filing Disclosure Statement ---------------------------------------------------------- The date by which time the debtor, Voice It Worldwide, Inc. is required to file its Disclosure Statement is extended until April 21, 1999 by order of Judge Roland J. Brumbaugh U.S. Bankruptcy Judge, on March 3, 1999. WILSHIRE FINANCIAL: Hearing Set For Disclosure Statement -------------------------------------------------------- The debtor, Wilshire Financial Services Group, Inc. published a notice in The Wall Street Journal on March 9, 1999 of a hearing to consider approval of the debtor's disclosure statement and prepetition solicitation procedures and to consider confirmation of the debtor's plan of reorganization. On April 12, 1999 at 4:00 PM a hearing will be held to consider the approval of the debtor's Solicitation and Disclosure Statement dated February 1, 1999 and the debtor's procedures for solicitation of votes to accept or reject the debtor's prepackaged plan of reorganization under Chapter 11 of the Bankruptcy Code dated March 3, 1999. WIRELESS ONE: Meeting of Creditors ---------------------------------- A Chapter 11 case was filed In re Wireless One, Inc. on February 11 1999 in the United States Bankruptcy Court, District of Delaware. On April 16, 1999 a meeting of creditors will be held at 10:00 AM at 844 King Street, Room 2313, Wilmington Delaware 19801. WORLDWIDE DIRECT: Seeks Authority To Retain Consultant ------------------------------------------------------ Worldwide Direct, Inc. and its parent company SmarTalk TeleServices, Inc. and its subsidiaries seek an order approving and authorizing the debtors to retain Erich L. Spangenberg, former CEO of the debtor, as independent consultant. Spangenberg will be paid $200 per hour in addition to certain insurance and other benefits. The debtor is seeking Spangenberg's help in order to consummate the debtors' sale transaction. ********* 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 * * *