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/raid1/www/Hosts/bankrupt/TCR_Public/990602.MBX T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, June 2, 1999, Vol. 3, No. 105 Headlines ABRAXAS PETROLEUM: To Exchange Senior Secured Notes Recently Issued AFP IMAGING: Among Other Woes Holder of Note Wants $2.5 Million ANCHOR GLASS: Higher Volume Sales, Lower Margin = Net Loss ASCENT ASSURANCE: Health Coverage Remains A Precarious Endeavor BISCAYNE APPAREL: In Liquidation Hoping To Rise Again BRADLEES: Distributing Summary Financial Plan To Vendors/Creditors CALCOMP TECHNOLOGY: Formally Advising Stockholders of Liquidation CELLPRO: Obtains Confirmation Of Reorganization Plan CRESCENT JEWELERS: Retains Reorganization Expert DAILEY INTERNATIONAL: Announces Filing Chapter 11 DAILEY INTERNATIONAL: Case Summary & 20 Largest Creditors DANKA BUSINESS: Selling 90% Of Danka Services International EQUALNET COMMUNICATIONS: Uphill Battle Sliding EQUITEX INC: Company Changes Method Of Reporting FINE HOST: Court Confirms 2nd Amended Reorganization Plan FIRST UNION REAL ESTATE: Assets Sold To Satisfy Bank Loans FPA MEDICAL: Court Confirms Second Amended Reorganization Plan GARGOYLES INC: "Looking Good" Despite Lower Net Sales GIBSON GREETINGS: Greater Losses On The Way? HUNGARIAN TELEPHONE: Equity Investment By Citizens International INTERACTIVE NETWORK: Looking For New Independent Accountants INTERNATIONAL WALLCOVERINGS: Extension of CCAA Protection IRIDIUM: Receives 30-Day Extension From Lenders KMART: No Longer a Guarantor Under Hechinger's Credit Facility LAMONTS APPAREL: Upcoming Annual Meeting To Consider Amendments LEVITZ FURNITURE: Receives Court Approval of 10th Amendment To DIP LIVENT: Definitive Agreement Reached With SFX Entertainment MONTGOMERY WARD: Confirmation Hearing Set MONTGOMERY WARD: Klaff Realty Acquires Real Estate Assets NATIONSWAY: Ex- Employees Plan Boycott ON STAGE ENTERTAINMENT: Receives Notice of Default OXFORD HEALTH PLANS: Memberships Down, Revenues Down PEOPLES CHOICE TV: Sprint Exercises Option/Purchases 670,000 Shares RIVERWOOD HOLDING: Workforce Reduced In Effort At Profitability ROOM PLUS: Loses Qualifications For Nasdaq Listing SAFEGUARD HEALTH: Executes Agreements To Restructure Debt SALANT CORP: Open Market Transactions Yield Major Stock Ownership TAL WIRELESS: Losses Mount, May Lack Funds For Shareholders TELEGROUP INC: Announces Sale to PRIMUS THORN APPLE: Response In Objection To Termination of Exclusivity TRANS WORLD AIRLINES: Preferred Stock To Go On The Block TRISM INC: Brown Hired To Assist In Recapitalization Plan WORLDCORP: 15.1% Ownership in Stock Now Resides With Investment Firm Meetings, Conferences and Seminars ********* ABRAXAS PETROLEUM: To Exchange Senior Secured Notes Recently Issued ------------------------------------------------------------------- As soon as the Registration Statement filed with the SEC becomes effective Abraxas Petroleum Corp. will offer to exchange 12 7/8% Senior Secured Notes Due 2003, Series B for any and all outstanding 12 7/8% Senior Secured Notes Due 2003. The exchange offer will expire at a date to be determined once the exchange can be officially announced. The 12 7/8% Senior Secured Notes Due 2003 were originally offered and sold on March 26, 1999. They will mature on March 15, 2003 and bear interest at the annual rate of 12 7/8%, payable semi-annually beginning on September 15, 1999. They are secured by most of the company's current and future assets other than certain excluded assets, and rank senior in right of payment to any of the subordinated indebtedness and rank equally with any of the senior indebtedness. They are subject to redemption or repurchase by Abraxas under certain circumstances. The 12 7/8% Senior Secured Notes Due 2003, Series B are being offered in exchange for an equal principal amount of the company's outstanding Senior Secured Notes. They evidence the same indebtedness as the outstanding Senior Secured Notes and are entitled to the benefits of the indenture under which those notes were issued. The company reports that the new notes are substantially identical in all material respects to the outstanding Senior Secured Notes, except for certain transfer restrictions and registration rights. AFP IMAGING: Among Other Woes Holder of Note Wants $2.5 Million --------------------------------------------------------------- AFP Imaging Corp. has rendered its first quarter 1999 financial report which shows a net loss of $1,213,513 on revenues of $6,700,297. In the same period of 1998 revenues were $8,548,583 but losses sustained were $1,758,113. The company's working capital at March 31, 1999, decreased approximately $1,318,800 from June 30, 1998. AFP financed the repurchase of its common stock from a former director through available cash funds and has also reported a current liability on a promissory note to the former owner of an acquired business. AFP Imaging has a senior credit facility consisting of a $9.85 million revolver and term loan facility. This credit line is reported by the company as sufficient to finance ongoing working capital requirements assuming that the company's losses from operations do not continue for a material period of time, and, the company is not required to make current payments on the promissory note to the former owner of a recently acquired business. The revolver loan is secured by available and eligible inventory, accounts receivable, and specific intangibles. This facility requires that certain financial ratios and net worth amounts be maintained. The company says it is currently in compliance with all of its covenants and terms, with the exception of the debt service coverage ratio. Its senior lender has orally waived compliance with such coverage ratio for the quarter ended March 31, 1999. Such waiver is subject to negotiating more restrictive terms and conditions relating to certain areas, including documentation and reporting, revised formula borrowing, and limitations on payments to subordinated noteholders. The lender has orally agreed to this waiver after noting that fiscal 1999 operations were negatively impacted by the significant operating expenses associated with the company's new digital dental product lines. This facility was renewed in July 1997 and expires in July 2000. AFP Imaging is dependent upon its existing credit facilities to finance its overall operations. At March 31, 1999, the company currently had available $1.7 million of unused lines of credit for short-term financing needs plus cash and cash equivalents of $625,000. The holder of the promissory note has declared such promissory note in default for non-payment of $500,000 due on January 4, 1999 and elected to accelerate the full principal unpaid balance thereof of $2.5 million. The company believes it has a variety of counterclaims and is not in default. As per its asset purchase agreement dated December 24, 1997, this dispute will be resolved through mediation and then binding arbitration. Currently all parties are seeking an amicable resolution through the mediation process. No specific dates or location have been determined for the mediation process. The promissory note is subordinated to the terms of the company's senior credit facility. ANCHOR GLASS: Higher Volume Sales, Lower Margin = Net Loss ---------------------------------------------------------- Anchor Glass Container Corp. was formed in January 1997 to consummate the Anchor acquisition. On February 5, 1997, adhering to an asset purchase agreement, the company acquired substantially all of the assets, and assumed certain liabilities, of Anchor Glass Container Corporation (the "Old Anchor"), now being liquidated in an amended proceeding under Chapter 11 of the U.S. Bankruptcy Code. The company purchased eleven operating glass container manufacturing facilities and other related assets in the Anchor acquisition. Prior to the Anchor acquisition, the present company had no operations. Net sales for Anchor Glass Container Corp. for the 1999 first quarter were $146.9 million compared to $149.2 million for the first quarter of 1998, a decline of $2.3 million on a volume increase of approximately 8%. This slight decrease in net sales dollars was reported by the company to be the result, principally, of a shift in sales to slightly higher volume, lower margin, product lines in the 1999 first quarter. The company had a net loss in the first quarter of 1999 of approximately $6.1 million as compared to a net loss of $7.7 million in 1998. ASCENT ASSURANCE: Health Coverage Remains A Precarious Endeavor --------------------------------------------------------------- Ascent Assurance Corp., formerly Westbridge Capital Corp., derives its revenue primarily from premiums from its accident and health insurance products and, to a significantly lesser extent, from fee and service income, income earned on invested assets and gains on the sales or redemptions of invested assets. On September 16, 1998 Westbridge filed bankruptcy under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware. On March 24, 1999, Westbridge's certificate of incorporation and by- laws were amended and restated in their entirety and as a result, Westbridge changed its corporate name to "Ascent Assurance, Inc." The company's Board of Directors was then reconstituted as of that date into a classified board consisting of six directors (with two directors in each class), three of which were appointed by Credit Suisse First Boston Corporation, then Westbridge's largest creditor, one of which was appointed by the creditors' cmmittee and two of which were appointed by the company. Until June 24, 1999, the holders of the new preferred stock have the right to designate one additional director. In the first quarter of 1999 Ascent realized a net income of $208 on revenue of $36,590. Last year, in the same quarter, operating as Westbridge, the company incurred a net loss of $4,966 on revenues of $44,929. Pre-tax income increased by $6.0 million for the first quarter of 1999 as compared to first quarter of 1998. A $3.8 million improvement in underwriting results, a $1.4 million decline in interest expense on debt retired/canceled on March 24, 1999 and a $1 million decline in reorganization expenses were the principal contributors to the improvement in pre-tax income for this early part of 1999. Ascent's principal assets consist of the capital stock of its operating subsidiaries and invested assets. Accordingly, Ascent's sources of funds are primarily comprised of dividends from its operating subsidiaries, advances and management fees from non- insurance subsidiaries, and tax payments under a tax sharing agreement among Ascent and its subsidiaries. As of March 31, 1999, Ascent held approximately $8.9 million in unrestricted cash and invested assets. During the three months ended March 31, 1998, the insurance subsidiaries of Westbridge, now Ascent Assurance, experienced adverse loss ratios and declining persistency on certain old medical expense and medicare supplement products. Ascent says that now the insurance subsidiaries have developed new insurance products with more stringent underwriting procedures and lower agent commissions. In addition, the insurance subsidiaries are implementing rate increases to the extent approved by state regulatory authorities or offering higher deductible benefit options on certain old lines of business in order to mitigate the effect of adverse claims experience on such old lines. The insurance subsidiaries also implemented a policyholder retention program designed to mitigate the impact of declining persistency on such old lines receiving rate increases. However, Ascent expects that the insurance subsidiaries will continue to incur operating losses on these old lines of business until such time as the necessary rate increases can be fully implemented and realized, and until sales of new products reach targeted production levels. Although reported loss ratios improved for the three months ended March 31, 1999, there can be no assurance that the impact of any additional rate increases approved will result in consistent profitability on such old lines, or that targeted production levels will be reached and sustained. As indicated above, for the three months ended March 31, 1999 and 1998, the insurance subsidiaries received capital contributions totaling approximately $.4 million and $1.1 million, respectively, from Ascent. To the extent that the insurance subsidiaries experience further statutory operating losses, additional capital may be required. BISCAYNE APPAREL: In Liquidation Hoping To Rise Again ----------------------------------------------------- Biscayne Apparel Inc. in liquidation, has paid its bank lenders all of the net proceeds arising from any sale or liquidation of its assets or operations. The company does not anticipate that such net proceeds will be adequate to satisfy all of its liabilities. Accordingly, the company and its creditors will negotiate with respect to the payment of less than all of such obligations, and the company indicates it cannot predict the outcome of such negotiations. Additionally, the company says it cannot predict whether its creditors other than its bank lenders will assert claims against the company arising from its operations. The company's liabilities to its banks were wholly satisfied during the first quarter of 1999. In order to have effected an orderly sale of the majority of its assets, excluding accounts receivable, and the operations of M&L International Inc., Biscayne Apparel and M&L filed for protection under Chapter 11 of the Bankruptcy Code on February 5, 1999. The company anticipates that the net proceeds from the finalization of the M&L sale and the ultimate liquidation of M&L's remaining assets, principally accounts receivable, will be sufficient to repay M&L's liabilities. Biscayne perceived that Biscayne Apparel II and Mackintosh would be unable to wholly satisfy their remaining obligations and accordingly, BAII and Mackintosh, as reported here earlier, sought protection under Chapter 11 of the Bankruptcy Code on April 30, 1999. Once the remaining assets of Biscayne Apparel and its subsidiaries are sold, collected and/or liquidated, liabilities are paid or settled and matters related to the bankruptcy filing are resolved, the company will seek a buyer and/or an operating entity desiring to merge into a publicy-held company. There can be no assurance that the company will be successful in completing such a transaction. BRADLEES: Distributing Summary Financial Plan To Vendors/Creditors ------------------------------------------------------------------ Beginning on May 26, 1999, Bradlees, Inc. will distribute to its banks and other credit providers summaries of its first-quarter (thirteen-week) financial results ended May 1, 1999, including a comparison to the company's summary financial plan for the fiscal year ended January 29, 2000 ("fiscal 1999").The company is distributing the quarterly performance against its plan to its banks and other credit providers to facilitate their credit analyses. The company stresses that the quarterly performance information should not be relied upon for any other purpose. The company says it is distributing the performance information publicly solely because it is being distributed to a large number of the company's vendors for purposes of their credit analyses. The company's independent public accountants have not examined, reviewed or compiled this information. The information contained in the report is subject to future adjustments and such adjustments could materially affect the reported information. CALCOMP TECHNOLOGY: Formally Advising Stockholders of Liquidation ----------------------------------------------------------------- Some time in June CalComp Technology Inc. will be sending out formal statement to its shareholders of its definitive liquidation. All holders of record of common stock as of the close of business on May 12, 1999 will be receiving the mailings. As of that date, 47,120,650 shares of common stock and 1,000,000 shares of preferred stock were outstanding. As reported in an earlier edition of this Reporter the liquidation and dissolution plan of the company calls for the sale (or sales) of substantially all of CalComp's remaining assets and, after payment of all the claims, obligations and expenses owing to the company's creditors, by cash and in-kind distributions (if any) to the holders of the Preferred Stock (up to the $60.0 million, plus accrued and unpaid dividends, aggregate liquidation preference of the Preferred Stock), with the remainder (if any) to holders of the common stock on a pro-rata basis, and, if deemed necessary, appropriate or desirable by the company's Board of Directors, by distributions of its assets and funds from time to time to one or more liquidating trusts established for the benefit of stockholders (subject to the claims of creditors), or by a final distribution of its then remaining assets to a liquidating trust established for the benefit of stockholders (subject to the claims of creditors). Based on the anticipated value of the company's assets and the amounts owed to creditors of CalComp, the company does not believe it will have any funds or assets remaining to make distributions to either preferred or common stockholders. Therefore, it is highly unlikely that any distributions will be made to stockholders. In conformance with Delaware General Corporation Law, and the company's incorporation and stock designation certificates, the affirmative vote of the holders of a majority of the outstanding shares of common stock entitled to vote and the outstanding shares of preferred stock, each voting separately as a class, is required to approve any plan of liquidation and dissolution. Lockheed Martin, as holder of a majority of the outstanding shares of common stock (85%) and holder of all outstanding shares of Preferred Stock (100%) of the company, has executed and delivered a written consent approving CalComp's plan of liquidation and dissolution. Accordingly, the statement mailed to shareholders will not be asking for a proxy and no stockholders meeting will be held to consider approval of the plan. The plan of liquidation and dissolution will not become effective, until at least twenty days after the mailing of the company's statement to shareholders. CELLPRO: Obtains Confirmation Of Reorganization Plan --------------------------------------------------- On May 21, 1999 the United States Bankruptcy Court for the Western District of Washington, issued an order confirming CellPro, Incorporated's second amended plan of reorganization dated May 10, 1999. CRESCENT JEWELERS: Retains Reorganization Expert ------------------------------------------------- Friedman's Inc. (Nasdaq: FRDM), announced today that Crescent Jewelers, a West Coast-based privately-owned jewelry retailing affiliate of Friedman's, has retained Kenneth C. Henry, Managing Director, Financial Advisory Services, Business Recovery Services Group at PricewaterhouseCoopers LLC. Mr. Henry will serve initially as Executive Vice President - Reorganization becoming Chief Executive Officer in the event of a Chapter 11 Bankruptcy filing. Crescent Jewelers is a specialty retailer of fine jewelry based in Oakland, California, and operates a total of 149 stores in 7 western states. Friedman's Inc. is a specialty retailer of fine jewelry based in Savannah, Georgia. The Company is a leading operator of fine jewelry stores in power strip centers. At May 28, 1999, the Company operated a total of 495 stores in 22 states of which 294 were located in power strip centers and 201 were located in regional malls. The Company's Class A Common Stock is traded on the Nasdaq National Market (Nasdaq Symbol, FRDM). DAILEY INTERNATIONAL: Announces Filing Chapter 11 ------------------------------------------------- As previously announced, Dailey International Inc. (OTC Bulletin Board: DALY) and certain of its subsidiaries filed in the United States Bankruptcy Court for the District of Delaware petitions for relief under Chapter 11 of the Bankruptcy Code. These filings were made in accordance with the terms of the acquisition agreement announced last week among the Company, certain of its subsidiaries and Weatherford International, Inc. (NYSE: WFT) ("Weatherford"). The plan contemplates that all trade creditors' claims will be paid as and when they come due in the ordinary course of business or in full on the effective date of the plan. Consummation of the acquisition and debt restructuring is subject to a number of conditions, including consummation of the Chapter 11 plan, which requires, among other things, Bankruptcy Court approval. Dailey International is a leading provider of specialty drilling equipment and services to the oil and gas industry and designs, manufactures and rents proprietary downhole tools for oil and gas drilling and workover applications worldwide. Weatherford International, Inc. is one of the world's largest providers of equipment and services used for the exploration and production of oil and natural gas. DAILEY INTERNATIONAL: Case Summary & 20 Largest Creditors --------------------------------------------------------- Debtor: Dailey International, Inc. One Lawrence Center 2507 North Frazier Conroe, TX 77303 Danbury, CT 06810 Type of business: An integratged provider of specialty services and technologically advanced downhole tools to the oil and gas industry on a worldwide basis. Court: District of Delaware Case No.: 99-1233 Filed: 05/28/99 Chapter: 11 Debtor's Counsel: Robert Albergtotti Haynes & Boone LLP 901 Main St. 3100 Nations Bank Plaza Dallas Texas Laura Davis Jones Young Conaway Stargatt & Taylor LLP 11th Floor Rodney Square North Wilmington, Delaware 19801 Total Assets: $251,036,000 Total Liabilities: $303,188,000 No. of shares of preferred stock: 5 million authorized - none issued No. of shares of common stock: 20 million authorized 5,703,655 issued 5,129,504 outstanding 20 Largest Unsecured Creditors: Name Nature Amount ---- ------ ------ Weatherford Senior Notes 61,187,500 Oaktree Capital Mgmt. LLC Senior Notes 41,469,528 Lehman Brothers, Inc. Senior Notes 32,597,641 Salom,on Brothers Asset Mgmt Senior Notes 19,585.937 Wellington Management Co. Senior Notes 13,257,292 Federated High Income Bond Fund Senior Notes 12,456,953 AGE High Income Fund Senior Notes 11,013,750 High Yield Portfolio Senior Notes 9,173,125 Eaton Vance High Income Portfolio Senior Notes 8,525,458 Luterhan Brotherhood Senior Notes 7,138,342 Federated High Yield Trust Senior Notes 6,781615 Credit Swiss Asset Mgmt Senior Notes 5,608,854 Prudential Insurance Co. Senior Notes 5,098,958 Cerberus Partners Senior Notes 4,079,167 Oppenheimer Strategic Income Fund Senior Notes 3,273,229 Travelers Senior Notes 3,773,229 Federated Core Trust Senior Notes 3,314,323 Oppenheimer High Yield Fund Senior Notes 2,855,417 Delaware Mgmt Co Senior Notes 2,549,479 AETNA Senior Notes 2,294,531 DANKA BUSINESS: Selling 90% Of Danka Services International ----------------------------------------------------------- On May 20, 1999 Danka Business Systems PLC announced that it had signed a definitive agreement to sell its outsourcing division, Danka Services International to a newly formed company controlled by Schroder Ventures, an international private equity group. Under the terms of the agreement, Danka will sell a 90 percent interest in its outsourcing business, which has net assets of approximately $104 million, for $300 million. Danka will retain a minority interest of 10 percent in the business and has entered into long-term agreements with DSI to provide equipment, parts, supplies and service. Larry K. Switzer, Danka's Chief Executive Officer, has indicated that the sale of DSI will generate cash, refocusing assets on the company's core business and yet give opportunity to continue to benefit from the growth in the outsourcing business worldwide. He says proceeds from the sale will be used to reduce the company's bank debt by approximately $200 million and retain nearly $100 million in working capital. For the twelve months ended March 31, 1999, DSI had revenue over $275 million and over $25 million in operating profit. DSI, which is headquartered in Rochester, New York, has over 3,000 employees and offices throughout the United States, Canada and Europe. Danka Business Systems PLC headquartered in London, England and St. Petersburg, Florida is one of the world's largest independent suppliers of office imaging equipment and related services, parts and supplies. Danka provides office products and services in over 30 countries around the world. Schroder Ventures is one of the world's leading private equity groups with $3.5 billion of funds under management. Schroder Ventures has operations in the United Kingdom, France, Germany, Italy, Japan, Hong Kong, Singapore, India, Canada and the United States. EQUALNET COMMUNICATIONS: Uphill Battle Sliding ----------------------------------------------- EqualNet Corporation, one of Equalnet Communication's operating subsidiaries, and EqualNet Wholesale Services, Inc., a wholly owned nonoperating subsidiary of EqualNet filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Court for the Southern District of Texas, in Houston, Texas. Under Chapter 11, certain claims against EqualNet in existence prior to the filing of the petitions for relief under the federal bankruptcy laws are stayed while EqualNet continues business operations as a debtor-in- possession. On October 2, 1998 Wholesale filed its motion to convert its bankruptcy proceeding from a Chapter 11 reorganization to a Chapter 7 liquidation. EqualNet as debtor-in-possession, will continue to manage and operate EqualNet's assets and business pending the confirmation of a reorganization plan and subject to the supervision and orders of the Bankruptcy Court. The company has filed its disclosure statement which includes its reorganization plan. The Bankruptcy Court approved the disclosure statement for the plan of reorganization of EqualNet on March 1, 1999. On April 28, 1999, the Bankruptcy Court confirmed the plan of reorganization subject to funding which is set by the bankruptcy Court to be May 24, 1999. The Chapter 11 filing by EqualNet, as well as related circumstances and the losses from operations continue to raise substantial doubt about the company's ability to continue as a going concern. So far this year, during the first quarter, the company's losses were $5,117,972 on revenues of $9,345,633. For the first quarter of 1998 the company lost $4,042,131 on revenues of 5,765,688. There can be no assurance the company will have the capital resources necessary to implement projected business activities and return to profitability. It is highly likely the company will need additional capital to complete the funding of the plan of reorganization and to continue in business during its restructuring phase. Also, the company intends to issue 3,000,000 shares of its common stock to the Trustee of the Creditor's Committee in the EqualNet Bankruptcy as partial payment of obligations under the plan of reorganization. In addition to the capital required to fund EqualNet's plan of reorganization, the company expects that it will need additional capital to fund new marketing initiatives and new business ventures, such as Intelesis and its proposed acquisition of NCS. The company believes that the rate at which it will be able to develop these new marketing initiatives and new business ventures will be directly related to the amount of new capital it has available. Equalnet intends to raise the capital it requires for these activities through possible private placements of its debt and equity securities. There can be no assurance it will be able to raise the capital it will require. If the company is not able to raise the required capital, it may have to curtail its marketing initiatives and not be able to realize the full potential of these or other potential business ventures. EQUITEX INC: Company Changes Method Of Reporting ------------------------------------------------ On January 4, 1999, Equitex Inc. withdrew its election to be treated as a business development company subject to the Investment Company Act. As a result of this withdrawal, the company is now required to present its financial statements consistent with those of a normal operating company as opposed to a business development company. Because the company was a business development company for the quarter ended March 31, 1998 profit and loss figures for the 1998 quarter reflect a different formulation to that of a regular business operating company and therefore may be of little comparason value. However, revenues for the quarter ended March 31, 1999 were $582,609 as compared to pro-forma revenues of $493,780 at March 31, 1998 and actual revenues of $261,321 for the company's business development company operations for the same period. Of these revenues, $360,261 are attributed directly to the operations of Equitex while $222,348 are attributed to its consolidated subsidiaries, all of which came from the operations of Triumph Sports Inc. Neither First TeleServices Corp. or VP Sports Inc. generated revenues during the quarter. Of these revenues, $222,348 were sales generated by Triumph's retail stores while $315,564 were realized gains on Equitex' investments most of which was received from the sale of certain of the company's shares of IntraNet Solutions. For the quarter ended March 31, 1999, Equitex recorded a net loss of $475,344 as compared to pro-forma net income of $88,125 for the quarter ended March 31, 1998. Equitex reports that several factors accounted for the net loss in the current year as opposed to net income for the same period in 1998 on a pro-forma basis including consolidation of the company's subsidiaries. Of the net loss, Triumph accounted for approximately $26,000 while First TeleServices Corp. accounted for about $84,000. In addition, a one-time non-cash consulting fee paid with Equitex' common stock totaling $150,000 in expenses was recorded during the quarter which contributed to the loss as well as a $222,561 bonus to officer which was accrued but not paid during the quarter. During the first quarter of 1999, the company received a total of $2,100,000 before expenses from the sale of preferred stock and $1,183,000 from the sale of common stock in a private placement. As a result of the aforementioned sales of the company's securities along with the proceeds from sales of certain of the company's investments which totaled in excess of $400,000, Equitex had a cash position at March 31, 1999 of $1,520,419 all but a very small portion of which was held directly by the company, not its subsidiaries. FINE HOST: Court Confirms 2nd Amended Reorganization Plan --------------------------------------------------------- On May 18,1999,the U.S. Bankruptcy Court for the District of Delaware in Wilmington confirmed the second amended plan of reorganization of Fine Host Corporation, as modified by their modifications to the second amended plan of reorganization dated May 17, 1999. Information as to the assets and liabilities of the company, as presented to the Court, the number of shares of common stock of the company issued and outstanding, the number of shares of common stock of the company reserved for future issuance in respect of claims and interests filed and allowed under the reorganization plan, and the aggregate total of such numbers is contained in the reorganization plan and can be viewed by accessing http://www.sec.gov/cgi-bin/srch-edgar?0001011584-99-000007on the Internet, free of charge. FIRST UNION REAL ESTATE: Assets Sold To Satisfy Bank Loans ---------------------------------------------------------- First Union Real Estate Equity & Mortgage Investments was required to reduce its bank loans outstanding to $80 million by April 30, 1999 and to $50 million by June 30, 1999. The remaining balance of $50 million must be repaid by August 11, 1999. The comapny, on May 5, 1999 sold four shopping centers resulting in $36.1 million of net proceeds of which $33.4 million was utilized to reduce the bank loan balance to $56.4 million based on March 31, 1999's outstanding borrowing. The remainder of the proceeds of $2.7 million, were used to partially repay the bridge loan. Although the required reduction in the bank loans was made after April 30, 1999, the company was not in default under the bank loan agreements. Additionally, First Union sold eight apartment complexes on May 12, 1999 resulting in net proceeds of $46 million after the purchaser assumed $37.5 million of mortgage debt secured by four of the apartment complexes. The net proceeds consisted of $24.9 million in cash after prorations and fees and 530,000 shares of common stock of the purchaser which is a Real Estate Investment Trust (REIT). First Union used $24.9 million of the net cash proceeds to reduce bank borrowings to a balance of $31.5 million based on March 31, 1999's balance outstanding. The company intends to sell the REIT shares as market conditions allow with the proceeds from the sale of these shares used to repay the note payable and bank loans. Net loss in the first quarter 1999 was $4,663 as compared to a net loss of $3,579 in 1998. The net loss for 1999 was reduced by $.5 million in capital gains resulting from the sale of the shopping center in February 1999. Mortgage loan interest income declined by $.5 million when comparing 1999 to 1998. Interest income suffered a decline caused by the repayment of a mortgage investment secured by a shopping mall in Fairmount, WV, in January 1998 and the repayment of a mortgage investment secured by an office building in Cleveland, OH, in May 1998. Total revenues for the first quarter 1999 were $79,413 as compared to the like quarter of 1998 at $80,354. FPA MEDICAL: Court Confirms Second Amended Reorganization Plan -------------------------------------------------------------- After four days of hearings, the Bankruptcy Court for the District of Delaware confirmed the Modified Second Amended Plan of Reorganization for FPA Medical Management Inc., according to a newswire report. The plan provides for the sale of substantially all of the company's operations in transactions valued at about $108.2 million. The major creditors, the debtor-in- possession (DIP) and pre-petition lenders, the Unsecured Creditors' Committee and the company's major payors-Humana, Prudential and Pacificare-supported the plan. Consummation of the plan is expected to occur in June and it includes and affects FPA and 98 affiliated debtor entities. Gotham Mid-Town Management Inc. and Virginia Medical Associates P.C. were excluded from the reorganization plan and continue as chapter 11 DIPs. FPA and various affiliates and subsidiaries filed chapter 11 petitions in Delaware on July 19, 1998 and various dates thereafter, through August 7, 1998. FPA Medical Management is a national physician practice management organization. (ABI 28-May-99) GARGOYLES INC: "Looking Good" Despite Lower Net Sales ----------------------------------------------------- Gargoyles designs, assembles, markets and distributes a broad range of sunglasses and eyewear products. The company competes primarily in the premium sunglass markets by offering a diverse line of products marketed under a number of brands owned by the company or licensed from third parties. The company's principal brands include Gargoyles Performance Eyewear, Gargoyles Protective Eyewear, Hobie Polarized Sunglasses, Stussy EyeGear, Anarchy Eyewear, Angel Eyewear, Tomichi Studio and Private Eyes. The company operates both directly and through three wholly-owned subsidiaries: H.S.C., Inc., a Washington corporation, Sungold Eyewear, Inc., a Washington corporation, and Private Eyes Sunglass Corporation, also a Washington corporation. Net sales decreased to $9.3 million for the quarter ended March 31, 1999 from $11.5 million for the quarter ended March 31, 1998. This decrease was said to be primarily due to the disposition of various unprofitable businesses during 1998, which included the sale of the company's Timberland Eyewear division, the termination of the Ellen Tracy License Agreement and the closing of the company's London office. The company's net income was $232,000 for the quarter ended March 31, 1999 compared to a net loss of $1.5 million for the quarter ended March 31, 1998. GIBSON GREETINGS: Greater Losses On The Way? -------------------------------------------- Gibson Greetings Inc. experienced a loss of $3,868 and $8,852 for the quarters ended March 31, 1999 and 1998, respectively. Effective May 11, 1999, the company entered into a 364-day revolving credit agreement which provides $30,000 for general corporate purposes, replacing a similar facility that expired in April 1999. There were no borrowings outstanding under the former agreement at March 31, 1999. Gibson Greetings, Inc. operates in a highly competitive industry dominated by two companies. The company's mass-merchandiser customer base, which typically operates on low margins, is particularly susceptible to financial constraints and to offers of more favorable terms from competitors of the company which, Gibson says, have significantly greater financial resources. As a result, the company has, for some time, faced strong competitive pressures with regard to both price and terms of sale. It is anticipated that these pressures will continue and contribute to the company reporting full-year 1999 results that are expected to be even significantly below the results of the twelve months ended December 31, 1998. HUNGARIAN TELEPHONE: Equity Investment By Citizens International ---------------------------------------------------------------- Through a series of common and preferred stock purchases, as well as settlement of obligations through stock issuance by Hungarian Telephone to Citizens International Management Services, the latter together with CU Capital Corp., its affiliate, have become beneficial owners of 9,228,126 shares of common stock in Hungarian Telephone & Cable Corp. On May 12, 1999 Hungarian Telephone and Telegraph Corp. and Citizens International entered into a stock purchase agreement which resulted in ownership of 48.8% of common stock being owned by CIMS and CUCC. The total in common stock shares assumes a conversion of the preferred stock held by Citizens International at the rate of 10 shares common stock for each one share preferred. Thirty thousand shares of preferred stock may therefore be converted into three hundred thousand shares of common stock and when added to the common stock owned by Citizens International and its affiliate the beneficial ownership reached the 9,228,126 shares reported. As reported earlier, Hungarian Telephone entered into an agreement with Postabank es Takarekpenztar Rt. to improve its capital structure. One condition of the agreement, among others, required the additional equity investment by Citizens International in Hungarian Telephone. Therefore, the two companies have entered into the stock sale/purchase transactions in furtherance of the requirements placed upon Hungarian Telephone by Postabank. INTERACTIVE NETWORK: Looking For New Independent Accountants ------------------------------------------------------------ Interactive Network Inc. and KPMG LLP have each decided that it is in the best interest of Interactive that KPMG LLP, the company's former independent accountants engaged to audit the company's financial statements, be replaced with an accountant more suitable to the company's current budgetary needs. This decision was made for Interactive by Bruce Bauer, Chief Executive Officer of Interactive, and ratified by the Executive Committee of Interactive's Board of Directors. KPMG LLP's resignation was effective on May 20, 1999. The company is currently in the process of identifying a successor accountant with the assistance of KPMG LLP. INTERNATIONAL WALLCOVERINGS: Extension of CCAA Protection --------------------------------------------------------- International Wallcoverings Ltd. announced that a further extension to its stay of proceedings under the Companies' Creditors Arrangement Act ("CCAA") was granted by the Court until June 30th , 199time to pursue its restructuring alternatives. Toronto Stock Exchange SYMBOL:IWL-0- (CanadianCorporate-05/28/99) IRIDIUM: Receives 30-Day Extension From Lenders ----------------------------------------------- Iridium LLC (NASDAQ; IRID) announced that it has received from its lenders a 30-day waiver -- to June 30, 1999-- of the financial covenants relating to customers and revenues under its $800 million Senior Secured Credit Facility. Iridium is evaluating alternatives to restructure its indebtedness and reduce financing costs and intends to use these 30 days to get a consensus among its investors and creditors on a plan to restructure the capitalization of the company. "This extension allows us to make the important changes in our marketing and distribution strategy, which will help us drive sales," said CEO John A. Richardson. "At the same time we will continue to work with our creditors, Motorola and our other strategic investors to identify the financial strategy required for commercial success." KMART: No Longer a Guarantor Under Hechinger's Credit Facility -------------------------------------------------------------- Kmart Corp. continues to show profitable results with revenues of $8.1 billion and net income of $67 million in the first quarter of 1999. These figures are up from the same quarter last year when sales revenues were $7.5 billion with $47 million in net income. Kmart indicates the increases were primarily due to improved merchandise assortments including exclusive private label lines such as Martha Stewart Everyday, Route 66 apparel and accessories, as well as Jaclyn Smith and Kathy Ireland ladies apparel. Kmart converted 132 stores to the Big Kmart format during the quarter. The Builders Square operations are now part of Hechinger Company, an affiliate of Leonard Green and Partners LP. Hechinger operates in the highly competitive "do-it-yourself" marketplace. On February 22, 1999, Hechinger indicated that it might not be in compliance with the EBITDA covenant contained in its bank agreement for its second quarter, ended April 3, 1999, and arranged with its lenders for a temporary waiver. On March 18, 1999, Hechinger entered into a new secured credit facility which replaced all existing credit facilities. Although Kmart continues as a guarantor for certain of Hechinger's lease-related obligations, Kmart and LGP do not provide any guarantees under the new credit facility as they had under a previous supplemental credit facility. LAMONTS APPAREL: Upcoming Annual Meeting To Consider Amendments --------------------------------------------------------------- The annual meeting of stockholders of Lamonts Apparel, Inc. will be held at the offices of the company, 12413 Willows Road N.E., Kirkland, Washington, on July 9, 1999 at 10:00 a.m. local time. Only stockholders of record at the close of business on May 17, 1999 are entitled to notice of, and to vote at, the meeting and any adjournments or postponements of the meeting. Among other matters the stockholders will vote to elect five directors to hold office until the next annual meeting of stockholders; will vote on whether to approve an amendment to the company's Certificate of Incorporation eliminating the prohibition against the issuance of nonvoting equity securities; and will consider approval of certain amendments to Lamonts Apparel, Inc. 1998 Stock Option Plan. LEVITZ FURNITURE: Receives Court Approval of 10th Amendment To DIP ------------------------------------------------------------------ To provide continued access to working capital financing, the Debtors have sought and obtained Judge Walrath's approval of a Tenth Amendment to the DIP Financing Facility. The Tenth Amendment gives the Debtors with access to up to $10,000,000 provided by M.D. Sass Corporate Resurgence Partners, L.P., through December 31, 1999, in exchange for a $200,000 Closing Fee plus 2% of the unused commitment per annum. The Tenth Amendment additionally puts the mechanisms in place to permit the Debtors to apply the proceeds from the Sale/Leaseback Transaction and the Bulk Sale Transaction to $58,000,000 of Term Loans under the DIP Facility and pay off those obligations in full. The Debtors note that the Term Loans carry a 16% interest rate; repayment of those borrowings results in clear economic benefits to the Debtors' estates. Further, the Tenth Amendment permanently reduces the face amount of the DIP Facility from $260,000,000 to $125,000,000. The Debtors will pay less in unused line fees and has no need for continued access to more than $125,000,000 of super-priority senior secured working capital financing. The face amount will be further reduced at the closing of the Bulk Sale Transaction by the amount of Net Cash Disposition Proceeds received from the Bulk Sale Transaction. EBITDA targets are modified under the Tenth Amendment to: For the Period EBITDA Shall Be No Less Than -------------- ---------------------------- April 1, 1999 through June 30, 1999 $2,500,000 April 1, 1999 through September 30, 1999 $7,000,000 The current consortium of Revolving Lenders under the DIP Facility are: * BT Commercial Corporation * LaSalle National Bank * Heller Financial, Inc. * TransAmerican Business Credit Corporation * Finova Capital Corporation (Levitz Furniture Bankruptcy News Issue 30;Bankruptcy Creditors' Service) LIVENT: Definitive Agreement Reached With SFX Entertainment ----------------------------------------------------------- Canadian Corp News reports on June 1,1999 that SFX Entertainment, Inc. [NASDAQ: SFXE] and Livent Inc. announced they have entered into a definitive purchase agreement for SFX to acquire substantially all of Livent's assets and the rights to current and future Livent productions, in exchange for consideration including cash, deferred payment rights and warrants to purchase SFX common stock at premiums. The agreement, which is subject to approval by bankruptcy courts in the U.S. and Canada and appropriate U.S. and Canadian regulatory authorities, is expected to close on or before September 30, 1999.As part of the agreement, SFX will acquire the Ford Center for the Performing Arts in New York, the Pantages Theatre in Toronto and the Ford Center for the Performing Arts/Oriental Theater in Chicago. SFX also will assume rights to current Livent productions including Fosse, Ragtime and the Canadian production of Phantom of the Opera, as well as Livent productions in development. The Ford Centre for the Performing Arts in Vancouver and Livent's Toronto headquarters building are not part of the agreement, but SFX will enter into a lease of Livent's headquarters. Robert F. X. Sillerman, Executive Chairman of SFX Entertainment, Inc., said, "We are very pleased to have reached this agreement with Livent to acquire some of North America's premier theatrical venues and productions. Livent's properties offer an ideal fit with SFX's current business, enhancing SFX's ability to present outstanding live entertainment events." Roy Furman, Chairman and Chief Executive Officer of Livent, said: "Livent's core assets and creativity remain strong, and our people are doing wonderful work. We anticipate that SFX will be able to realize the full potential of our shows, theaters and personnel, and to build on Livent's creative successes." SG Cowen Securities Corporation acted as exclusive financial advisor to Livent. Willkie, Farr & Gallagher provided Livent legal counsel in the U.S. and Stikeman, Elliott of Toronto provided Canadian legal counsel. SFX has 82 venues including 16 amphitheaters in all of the top 10 markets and owns or operates venues in 31 of the top 50 markets overall. SFX also develops and manages touring Broadway shows, selling subscription series in 38 markets that maintain active touring schedules. MONTGOMERY WARD: Confirmation Hearing Set ----------------------------------------- The court will convene a hearing for the purpose of considering confirmation of the Proponents' Plan on July 15, 1999, at 9:30 a.m. in Wilmington, Delaware. MONTGOMERY WARD: Klaff Realty Acquires Real Estate Assets ----------------------------------------------------------- At a recent bankruptcy auction, Chicago-based Klaff Realty was the successful bidder for a twenty-two store portfolio of former Montgomery Ward's stores totaling 1,935,496 square feet. All the properties are situated in high-profile, established retail markets, with a main concentration in the Midwest. Ninety percent of the stores are located in malls, and ten percent are freestanding buildings. Klaff Realty has been actively acquiring Montgomery Ward properties since 1998. "This portfolio represents many valuable redevelopment opportunities," said Klaff Realty's Marty Wynne, Senior Vice President/Retail Properties. This is the second time in as many years that Klaff Realty has acquired a significant portfolio of property from Montgomery Ward. In 1998, the firm purchased 31 locations from the Chicago-based retailer. Klaff Realty has been engaged in the acquisition, development, financing, leasing and management of mixed-use, office and retail space since 1981. To date, the company has acquired and redeveloped properties totaling approximately 6,500,000 square feet of retail space and valued in excess of $400,000,000. A leader in identifying underutilized retail locations, Klaff Realty, LP has been involved in the successful redevelopment and repositioning of retail properties throughout the country. NATIONSWAY: Ex-Employees Plan Boycott ------------------------------------- The Rocky Mountain News reports on May 29, 1999 that former corporate employees of NationsWay Transport said Friday that they plan to picket the Colorado Rockies and campaign for a boycott of home games until team owner Jerry McMorris pays their back wages. McMorris, founder of NationsWay and chairman of the Rockies, filed for Chapter 11 bankruptcy May 20 and abruptly shut the company down. Employees learned this week that they should not expect to receive paychecks for their last two weeks of work, vacation or bonuses. Attorneys do not expect enough cash to remain for unsecured creditors, including employees, after the company is liquidated. "When the owner of your company pays the Rockies millions and millions of dollars and they can't pay us, it makes you a little hot under the collar," said Valerie Whiddon, a payroll associate at NW's downtown offices. Without their last two weeks' pay, which was expected Tuesday, some of the laid-off employees are facing the Memorial Day weekend and beyond with just a few dollars in their bank accounts. Unemployment checks are not likely to show up for several weeks, they said. The women said they have 10 NW employees who promise to picket Friday's Rockies game at Coors Field and expect to sign up more. Teamsters members picketed Sunday's game. McMorris, who founded NationsWay at age 19 and expanded the company into the nation's largest privately held trucking firm, said the Rockies should not be brought into the collapse of NW. McMorris said that he asked the Bankruptcy Court in Phoenix to pay the workers out of the assets but that the matter is out of his hands. The employees at the corporate headquarters said that they have heard nothing from the company and that a promised hot line has never materialized. Unlike the unionized drivers, they have no representation in the bankruptcy. The Colorado Labor Department is planning sessions to help laid- off NationsWay employees deal with unemployment issues, including job searching, resumes, applying for unemployment compensation and petitioning thBankruptcy Court for back pay, Labor Department spokeswoman Rosemary Marshall says. Marshall says 641 workers have applied for unemployment compensation. (Rocky Mountain News - 05/29/99) ON STAGE ENTERTAINMENT: Receives Notice of Default -------------------------------------------------- On Stage Entertainment, Inc. (Nasdaq: ONST, ONSTW) announced that it received a notice of default from Imperial Commercial Credit and Investment Corporation ("ICCMIC"), the first mortgage lender on the Company's dinner theaters in Florida and California and its live theatrical venues in the greater Myrtle Beach, South Carolina area. The Company is currently negotiating with ICCMIC to cure the default through a continuation of a Company restructuring to improve cash flow and a restructuring of the debt. The Company is also exploring other financing alternatives with ICCMIC, a potential refinancing of the ICCMIC debt and the potential sale of certain assets of the Company. However, there can be no assurance that the Company will be able to cure the default, effect an appropriate restructuring or develop an alternative financing strategy. Summary of First Mortgage Debt - In March 1998, ICCMIC agreed to provide the Company with up to $20,000,000 of mortgage financing. Concurrently, the Company used $12, 500,000 of the facility to fund the cash portion of acquisition of assets from Gedco USA, Inc., which consisted primarily of two dinner theaters, a retail shopping complex and a piano bar in the greater Orlando area and one dinner theater in Buena Park, California. On June 30, 1998, the Company used an additional $1,100,000 to fund the cash portion of the purchase of a fee simple interest in the Legends Theater in Surfside Beach, South Carolina, and the purchase of a leasehold interest in the Eddie Miles Theater in North Myrtle Beach, South Carolina. In October 1998, the Company used an additional $550,000 for working capital purposes. The initial $12,500,000 loan and the subsequent $1,650,000 in loans extended by ICCMIC to On Stage under the mortgage financing facility bear interest at the rate of 9.06% and 9.9%, respectively. Events Leading up to the Default Letter - The Company was able to make the January and February 1999 payments due under the ICCMIC facility but was late in making each of those payments. As a result of those delinquencies, the Company incurred late charges and default interest, which it was unable to pay. As of May 26, 1999, the Company had not made its payments to ICCMIC due March 1, 1999, April 1, 1999 or May 1, 1999. Status of Negotiations with ICCMIC - The Company has met with the Chief Executive Officer and General Counsel of ICCMIC in an attempt to negotiate a resolution of the defaults, and an appropriate refinancing or restructuring of the debt. The Company intends to continue to pursue its negotiations with ICCMIC. However, there can be no assurance that the Company and ICCMIC will be able to come to a resolution of the default or that ICCMIC will not commence foreclosure proceedings. On Stage Entertainment, Inc. produces and markets theatrical productions and operates live theaters and dinner theaters worldwide. OXFORD HEALTH PLANS: Memberships Down, Revenues Down --------------------------------------------------- Total revenues for the quarter ended March 31, 1999 were $1.03 billion, down 15.4% from $1.21 billion during the same period in the prior year for Oxford Health Plans. Net earnings attributable to common stock for the first quarter of 1999 totaled $3.2 million, or four cents per share, compared to a net loss of $45.3 million, or 57 cents per share, for the first quarter of 1998. Oxford cites poorer results of operations for the first quarter of 1998 due to significantly higher medical costs and approximately $25.0 million in charges for severance and other costs expected to be incurred in connection with the restructuring of certain administrative and management functions. Membership in the company's fully insured commercial health care programs as of March 31, 1999 decreased by approximately 149,000 members (9%) from the level of such membership as of March 31, 1998 and by 46,500 members (3%) since year-end 1998. The decline since year-end 1998 is due to reductions in members in noncore states and in the company's core commercial markets. Membership in government programs decreased by approximately 240,000 members (69%) compared to March 31, 1998, reflecting the exit of the company from the Medicaid market in total and from the withdrawal or restructuring of the Medicare business in several markets. PEOPLES CHOICE TV: Sprint Exercises Option/Purchases 670,000 Shares ------------------------------------------------------------------- On May 20, 1999, Sprint Corporation exercised its option to purchase the shares of common stock owned by Tudor Investment Corp., Paul Tudor Jones II, The Raptor Global Fund Ltd., The Raptor Global Fund L.P., The Upper Mill Capital Appreciation Fund Ltd., Tudor Proprietary Trading L.L.C. and Tudor BVI Futures Ltd. The option to purchase the shares was granted to Sprint in furtherance of the Stockholder and Option Agreement, dated April 26, 1999, among Sprint and certain of the companies named above. The transaction left no beneficial ownership in the hands of the former shareholders. Sprint Corporation acquired a total of 670,000 shares common stock at a per share price of $10. RIVERWOOD HOLDING: Workforce Reduced In Effort At Profitability --------------------------------------------------------------- Riverwood Holding Inc. has sustained first quarter 1999 losses as it did in the first quarter of 1998. On revenues of $255,867 the 1999 period loss was $26,479. During the first quarter of 1998 revenues were slightly higher at $265,435 with losses sustained of $34,545. In connection with the companys' global restructuring program initiated in the fourth quarter of 1998, Riverwood has plans to reduce its European workforce by approximately 300 employees in 1999 and to implement other initiatives designed to improve productivity and profitability across the global organization. The cost of this program was approximately $25.6 million and is expected to be completed in 1999. The company recognizes 50% of the operations of Igaras Papeis e Embalagens S.A. in Brazil. On January 14, 1999, the Central Bank of Brazil changed the foreign exchange policy by eliminating the exchange rate band, which had been used as a means to control the fluctuation of the Real against the U.S. dollar. The exchange rate is now determined by market forces. As a consequence of such change, the Real suffered a significant devaluation related to the U.S. dollar during the beginning of 1999. At this time, it is not practicable to determine whether or at what level the exchange rate will stabilize as well as the effect of such exchange rate fluctuations on Igaras' long term operations or the company's investment in the net assets of Igaras. ROOM PLUS: Loses Qualifications For Nasdaq Listing -------------------------------------------------- Effective May 14, 1999, the securities of Room Plus Inc. were delisted from the Nasdaq SmallCap Market. The Nasdaq listing qualifications staff decided to delist such securities because it determined that the company failed to meet the net tangible assets, bid price and bankruptcy requirements as stated in the Nasdaq Marketplace Rules. SAFEGUARD HEALTH: Executes Agreements To Restructure Debt --------------------------------------------------------- SafeGuard Health Enterprises, Inc. (Nasdaq: SFGD) announced that it has executed definitive agreements to restructure the Company's debt. As previously announced, the Company and its senior note holders have agreed to amend its $32,500,000 senior notes to provide for an increase in the current interest rate from 7.91% to 9.91% with reductions to 7.91%, when the Company has satisfied certain conditions. The Company has paid all interest due to the holders and has received a waiver of all existing defaults and events of default. Various technical terms, covenants and provisions of this agreement relating to consolidated net worth, interest expense coverage and limitations on consolidated total debt were amended. Additionally, the Company will issue the holders non- transferable, except under certain circumstances, and cancelable warrants to acquire 382,000 shares of the Company's common stock, which are exercisable at any time after January 1, 2000, and prior to December 31, 2003, at a price per share of $4.54. If by December 31, 1999, the Company's debt to the holders is satisfied in full, the warrants will be automatically canceled. The Company has also executed definitive agreements with its line of credit lender for a new $8,000, 000 loan maturing January 29, 2000. The initial interest rate is prime plus 4% and thereafter decreases to prime plus 1.5% until paid in full, when the Company has satisfied certain conditions. The Company is also required to make certain principal payment reductions and may repay the lender in full prior to the new maturity date without penalty. The Company has paid all interest due to the lender and has received a waiver of all existing defaults and events of default. The Company also announced that it has received a letter from Nasdaq indicating that the Company no longer meets the tangible net asset requirement for continued Nasdaq National Market System listing. The Company has requested a hearing to review this matter and has been advised that its request for a hearing will postpone any delisting action pending a final decision by Nasdaq. In the interim, the Company's stock will continue to be traded on the Nasdaq National Market System. SafeGuard is a specialized health care marketing company, providing dental benefits to approximately one million members in 27 states and the District of Columbia. The Company contracts with more than 6,300 client organizations and provides benefits through nearly 17,000 contracting providers. The Company's sales force sells its various products through a network of independent brokers, agents and consultants. SALANT CORP: Open Market Transactions Yield Major Stock Ownership ----------------------------------------------------------------- Salant Corporation has reported ownership by Magten Asset Management Corp. and Talton R. Embry in the common stock of Salant Corporation of 65.49% and 65.60%, respectively, of the outstanding common stock. The company's statement revealed that Magten Asset Management Corp., a Delaware corporation, is a registered investment adviser, has investment discretion over certain managed accounts of its investment advisory clients and certain private investment funds for which it serves as general partner or investment manager. Talton R. Embry is a managing director and the sole shareholder of Magten. Mr. Embry has investment discretion over various pension plans of Magten. Magten and Mr. Embry are deemed to beneficially own 6,549,935 and 6,560,443 shares of common stock, respectively. All shares are held by the managed accounts. Also, all of the shares were purchased in open market transactions. The shares of common stock were distributed to Magten and Mr. Embry in exchange for 10.50% bonds of Salant Corp. The bonds were purchased for an aggregate purchase price of $72,426,586. The funds for the purchase of the bonds came from each managed account's own funds, the working capital of each private investment funds and the fund of the pension plans. While the common stock beneficially owned by the parties is held for investment purposes it is understood that Mr. Embry is a member of the Board of Directors of Salant Corp. and as such has had discussions with the management of the company. The purchasing parties indicate that they have not entered into any agreements or arrangements relating to the common stock. TAL WIRELESS: Losses Mount, May Lack Funds For Shareholders -------------------------------------------------------------------- In accordance with the requirement of Tal Wireless Network's bankruptcy proceedings the company has filed its monthly financial status report with the United States Bankruptcy Court, Northern District of California, San Jose Division for the month of April 1999. The company has registered, for the month of April, a loss of $2,657,510. October 6, 1997 marked the date of the filing of a voluntary petition for protection under Chapter 11 of the Federal Bankruptcy Laws in the United States Bankruptcy Court by Tal Wireless. In keeping with the provisions of the bankruptcy Tal Wireless' existing directors will continue in possession but subject to the supervision and orders of the Bankruptcy Court. The company plans to liquidate assets and review the claims of its various creditors. It is unclear at this time whether there will be any funds available for distribution to shareholders. Once this information has been determined, the company may file a plan of reorganization with the Bankruptcy Court. TELEGROUP INC: Announces Sale to PRIMUS --------------------------------------- Telegroup, Inc. (Nasdaq:TGRPQ) announced that the United States Bankruptcy Court for the District of New Jersey has approved the sale of its retail customer base and related assets in the United States, Japan and Hong Kong, as well as its European subsidiaries, whose operations are exclusively retail, to PRIMUS Telecommunications Group, Incorporated. The proposed purchase price is approximately $72 million in cash and debt securities. In addition, the court approved the sale of the Gemini IRU for $4.5 million to Viatel Global Telecommunications and the Company's Los Angeles switch site for $1.1 million to Comdisco, Inc. THORN APPLE: Response In Objection To Termination of Exclusivity ---------------------------------------------------------------- The debtor, Thorn Apple Valley, Inc. et al. disagrees with the Creditors' Committee over the Committee's interpretation of an order which the Committee says gives the Lender veto power over any plan. The debtor states that the Committee's motion to terminate exclusivity is based on a false premise, and that the debtor did not give the Bank Group a veto over the plan. The debtor says that the Committee implies that terminating exclusivity would move the case forward. The debtor argues that there is no cause to terminate exclusivity. The debtor states that there is no acrimony among the debtor's principals and no companion case where exclusivity has already terminated, as in prior case law. The debtor says that it has moved unusually quickly to market itself to prospective purchasers and plan investors, received six letters of intent and has kept the Bank Group and the Committee 's professionals advised of its progress along that process. The debtor also says that even if the Bank Group had veto power, the debtor's commitment to use its best efforts to file a plan promptly which acceptable to its Bank Group does not constitute cause to terminate exclusivity. Further the debtor has retained the investment banking firm of Peter J. Solomon to assist it in the process of entering into a sale transaction or plan of reorganization and the debtor has also engaged Jay Alix & Associates to prepare a draft operating plan going forward. TRANS WORLD AIRLINES: Preferred Stock To Go On The Block -------------------------------------------------------- Trans World Airlines Inc. has filed a supplement to their Prospectus dated February 5, 1998. The purpose of the supplement is to inform of the availability for sale of 1,460,700 shares of 9 1/4% cumulative convertible exchangeable Preferred Stock, of Trans World Airlines, Inc. offered by the selling holders. The selling holders have notified Trans World, in writing, of their intention to sell the shares of Preferred Stock and the supplement to the company's Prospectus has been filed in response to the request of these shareholders. TRISM INC: Brown Hired To Assist In Recapitalization Plan --------------------------------------------------------- Trism Inc. is a long haul trucking transportation company. It subsidiaries, TSMT, Diablo and CIW service customers in the munitions and explosives market and are collectively the largest transporters of Department of Defense munitions in the continental United States. TSMT and CIW operate throughout the continental United States with Diablo's market focus primarily in the western regions of the United States. Trism Environmental Services ("TES"), a division of TSMT, provides service to customers in the hazardous waste and radioactive materialsm market and is the largest transporter of hazardous waste materials in the United States. TES operates throughout the United States, but its primary market focus is east of the Mississippi. Additionally, Trism Inc. has heavy haul and logistics operations. The former transports particularly weighty, over-sized, large dimensional loads. The logistics operation specializes in the management of freight by truck, largely by engineering and construction companies. Net loss for the quarter ended March 31, 1999, amounted to $3.8 million compared to a net loss of $1.9 million in the first quarter of 1998. Operating revenue decreased $3.5 million, or 4.9% from the first quarter 1998 to 1999. On May 10, 1999, the company engaged BT Alex.Brown to assist in the formulation of the company's recapitalization plan. WORLDCORP: 15.1% Ownership in Stock Now Resides With Investment Firm -------------------------------------------------------------------- Rothschild Recovery Fund L.P. has used its discretionary authority to purchase convertible debentures of Worldcorp Inc. The purpose of the transaction was to buy and dispose of the debentures for investment purposes. Beneficial ownership of the converted shares will reside in Rothschild Recovery Associates LLC, general partner of Rothschild Recovery Fund L.P., Cheryl G. Gordon and Wilbur L. Ross, Jr. The latter two will be acting in their capacity as the managing members of the general partner. Assuming conversion of the convertible debentures into the common stock of Worldcorp, the Fund, the General Partner, Cheryl G. Gordon, and Wilbur L. Ross, Jr. would beneficially own 2,475,769 shares of Worldcorp common stock , which represents 15.1% of the 16,359,014 shares of common stock which would be outstanding upon conversion of the convertible debentures. Rothschild Recovery Fund has indicated that the Fund, and, indirectly, Rothschild Recovery Associates LLC, Ms. Gordon and Mr. Ross would exercise shared investment power with respect to the converted shares. The principal business of Rothschild Recovery Fund L.P. is to provide significant financial returns through investments in distressed securities and through selected financing arrangements for companies in bankruptcy proceedings. As already mentioned, the Fund initially acquired the convertible debentures for investment purposes. Subsequently, the Fund, and indirectly its General Partner, Cheryl G. Gordon and Wilbur L. Ross, Jr., became co- proponent of Worldcorp's plan of reorganization for bankruptcy which was initially filed in the United States Bankruptcy Court for the District of Delaware on February 12, 1999. The first amended plan of reorganization of Worldcorp was filed in the United States Bankruptcy Court for the District of Delaware on March 23,1999. Meetings, Conferences and Seminars ---------------------------------- June 3-6, 1999 AMERICAN BANRKUTPCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800 June 7-8, 1999 TURNAROUND MANAGEMENT ASSOCIATION Advanced Education Workshop Le Meridien, Dallas, TX Contact: 1-312-822-9700 or ljfialkoff@turnaround.org June 17-19, 1999 AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION COMMITTEE ON CONTINUING PROFESSIONAL EDUCATION Fundamentals of Bankruptcy Law Conference Crowne Plaza Hotel, Seattle, Washington Contact: 1-800-CLE-NEWS 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 26-28, 1999 AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION COMMITTEE ON CONTINUING PROFESSIONAL EDUCATION Real Estate Defaults, Workouts and Reorganizations San Francisco, California Contact: 1-800-CLE-NEWS 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 September 27-28, 1999 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Conference on Corporate Reorganizations Regal Knickerbocker Hotel, Chicago, Illinois Contact: 1-903-592-5169 or ram@ballistic.com October 6-9, 1999 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES 73rd Annual Meeting San Francisco Marriott, San Francisco, California Contact: 1-803-957-6225 October 22-26, 1999 TURNAROUND MANAGEMENT ASSOCIATION 1999 Annual Conference The Fairmont--Atop Nob Hill, San Francisco, CA Contact: 1-312-822-9700 or ljfialkoff@turnaround.org November 29-30, 1999 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Distressed Investing '99 The Plaza Hotel, New York, New York Contact: 1-903-592-5169 or ram@ballistic.com 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. 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, Yvonne L. Metzler 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. 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