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/raid1/www/Hosts/bankrupt/TCR_Public/990604.MBX T R O U B L E D C O M P A N Y R E P O R T E R Friday, June 4, 1999, Vol. 3, No. 107 Headlines AMERICAN GAMING: Reorganization Or Liquidation Looms On The Horizon AMGAM ASSOCIATES: Hearing on Disclosure statement and Plan APOGEE ENTERPRISES: Sells Harmon Ltd./Curtainwall & Window Systems BELDEN & BLAKE: Target Oilfield Stock Sold, Co. Revenues Down BRAZOS SPORTSWEAR: Red Oak Sale BRAZOS SPORTSWEAR: Seeks Order Establishing June 18 as Bar Date CENTENNIAL CELLULAR: Sale Of Senior Notes Pending CFS: Files Proposal to Sell Fixed Assets DIXONS US HOLDINGS: Seeks Extension to File Disclosure Statement FACTORY CARD: Seeks Authority To Schedule Auction FIRST UNION: Transacts Multiple Sales To Help Retire Debt FORCENERGY: Seeks Order Authorizing Employ of Arthur Andersen GULF STATES STEEL: Defaults Continue On Line Of Credit And Mortgages HVIDE MARINE: Obtains Waiver On Credit Noncompliance JPE INC: Selling Off Stock To Reduce Indebtedness LACLEDE CHAIN: R.J. Rigging Co. Seeks Relief From Stay LINEN SUPERMARKET: Order Authorizes Employ of Jenner & Block LIVENT: OK's SFX's $115 Million Offer LOEWEN GROUP: Information About Case MAIDENFORM WORLDWIDE: Solicitation of Votes To Accept or Reject Plan NETMED: New President/CEO Plus New Chairman, Richards Resigns QUALITECH STEEL: Order Authorizes Employ Of David Blackwell, CEO READING CHINA: Seeks To Extend Exclusive Periods READING CHINA: Setting Date To Conduct Auction RENAISSANCE COSMETICS: Files for Bankruptcy Protection STARTER CORP: Seeks To Liquidate Foreign Subsidiaries STARTER CORPORATION: To Close 19 Outlet Stores SUN HEALTHCARE: Banks Block Sun Healthcare Payments THE PENN TRAFFIC COMPANY: Committee Applies To Retain Counsel TRANSTEXAS GAS: Annual Meeting In Houston In July UNITED COMPANIES: Court Approves Committee's Professionals WIRELESS ONE: Seeks Order Extending Exclusive Period WIRLESS ONE: Seeks Order Establishing July 23 as Bar Date WORLDWIDE DIRECT: Seeks To Retain Executive Sounding Board ZENITH ELECTRONICS: Debenture Holders To Agree To Exchange BOND PRICING: For Week of June 1, 1999 ********* AMERICAN GAMING: Reorganization Or Liquidation Looms On The Horizon ------------------------------------------------------------------- American Gaming and Entertainment is in dire circumstances, reporting no revenue for the first three months of 1999 the company incurred a net loss of $1,863,000. In the same period in 1998 revenues of $189,000 resulted in net losses of $1,911,000. Given the company's present financial and liquidity position, the legal problems being faced and the litigation against it, the business of the company is unlikely to continue to be the ownership of equity interests in casino gaming. The company had available cash of approximately $622,000 as of March 31, 1999. and states it believes that such cash is sufficient to fund the company's operations, excluding the company's obligations to Shamrock and, if applicable, Bennett Management, through the middle of 1999, based on its current level of operations and projected expenditures. The company does not anticipate receiving additional funds and therefore will probably not have sufficient cash to operate beyond such date. The company would then need to pursue a formal plan of reorganization or liquidation. AMGAM ASSOCIATES: Hearing on Disclosure statement and Plan ---------------------------------------------------------- The hearing to consider approval of the Second Disclosure Statement for the first amended joint plan of liquidation of AMGAM Associates and American Gaming and Resorts of Mississippi Inc., d/b/a American Gaming Corporation, filed on May 24, 1999 will be held before Jerry A. Brown, Bankruptcy Judge, Courtroom 705 Hale Boggs Federal Building 501 Magazine Street, New Orleans, Louisiana on Friday, June 25, 1999 at 10:00 AM. APOGEE ENTERPRISES: Sells Harmon Ltd./Curtainwall & Window Systems ------------------------------------------------------------------ On May 13, 1999, Apogee Enterprises, Inc. announced that it had completed the sale of the stock of its large-scale domestic curtainwall business, Harmon Ltd., to CH Holdings, Inc., a private company located in St. Louis, Missouri. Harmon Ltd.is the nation's largest designer and installer of curtainwall and window systems for nonresidential construction. In fiscal 1999, Harmon Ltd. generated revenues of approximately $85 million. By comparison, Apogee reported fiscal 1999 consolidated net sales of approximately $793 million, which excluded the following discontinued operations: domestic and international curtainwall operations, and the Norment detention & security unit. Headquartered in Minneapolis, Apogee Enterprises, Inc. is a world leader in technologies involving the design and development of value-added glass products, services and systems. Organized in two business segments, the Glass Technologies businesses are leaders primarily in architectural glass and high-end glass coatings for the electronics markets, while the Glass Services businesses are leaders in replacement auto glass and building glass services. BELDEN & BLAKE: Target Oilfield Stock Sold, Co. Revenues Down ------------------------------------------------------------- Net loss, for Belden & Blake Corp., decreased $2.1 million from a net loss of $6.3 million in the first quarter of 1998 to a net loss of $4.2 million in the first quarter of 1999. The company said this decrease was the result of the $6.0 million decrease in depreciation, depletion and amortization expense offset by a $4.2 million decrease in the company's operating margin. Total revenues decreased $4.4 million to $35,356 in the first quarter of 1999 compared to $39,803 in the first quarter of 1998. In April 1999, Belden & Blake and its wholly-owned subsidiary, The Canton Oil & Gas Company, entered into a stock sales agreement with an oilfield supply company for the sale of Target Oilfield Pipe and Supply Company, a wholly-owned subsidiary of COG. The buyer will purchase all of the issued and outstanding shares of capital stock of TOPS from COG. The company expects to close this transaction in June 1999. The company's borrowing base at December 31, 1998 was $170 million. On January 15, 1999, the company's borrowing base was redetermined at $126 million. The company had $154 million outstanding under this agreement at December 31, 1998 which resulted in the company having a borrowing base deficiency of $28 million. Belden & Blake agreed with the lenders, to reduce this deficiency by $14 million on March 22, 1999 and by the remaining $14 million on May 10, 1999. On March 22, 1999, the company made a $14 million payment to reduce the outstanding amount under the credit agreement to $140 million. At March 31, 1999, the outstanding balance under the credit agreement was $140 million. The funds for the payment were provided by internally generated cash flow and a term loan provided by Chase Manhattan Bank. This term loan provided borrowings of $9 million and was originally due on September 22, 1999. Interest is payable monthly at LIBOR plus 1.5%. On May 10, 1999, the company and its lenders amended the credit agreement to increase the company's borrowing base from $126 million to $136 million, subject to redetermination in November, 1999, and Belden & Blake paid $4 million to reduce the outstanding loan balance to $136 million. The company is further required to make additional payments of $5 million on the earlier of the receipt of aggregate proceeds from asset sales totaling $5 million or August 10, 1999 and $5 million on November 9, 1999, which will lower the borrowing base and outstanding balance to $126 million. Future borrowing base revisions will require approval from all lenders and any deficiency must be repaid within 30 days of the effective date of the redetermination. The amended agreement increased the interest rate to LIBOR plus 2.5% and provided certain covenant ratio relief. The company paid approximately $2 million in fees to the lenders and expenses associated with the amendment. The company's $9 million term loan from Chase Manhattan Bank originally due September 22, 1999, has been extended to June 27, 2000. The company expects to be able to meet its 1999 debt service requirements through internally generated cash flow, the sale of non-strategic assets, additional debt, the infusion of additional equity and/or the use of instruments in financial futures markets. The credit agreement contains a number of covenants that, among other things, restricts the ability of the company and its subsidiaries to dispose of assets, incur additional indebtedness, prepay other indebtedness or amend certain debt instruments, pay dividends, create liens on assets, enter into sale and leaseback transactions, make investments, loans or advances, make acquisitions, engage in mergers or consolidations, change the business conducted by the company or its subsidiaries, make capital expenditures or engage in certain transactions with affiliates and otherwise restrict certain corporate activities. In addition, under the credit agreement, the company is required to maintain specified financial ratios and tests, including minimum interest coverage ratios and maximum leverage ratios. The agreement requires a minimum working capital ratio of 1.00 to 1.00. As of March 31, 1999, the company's working capital ratio was 1.13 to 1.00. As part of the May 10, 1999 amendment, Belden & Blake and its lenders have agreed to exclude the current portion of certain long term debt from this calculation. After making these adjustments the working capital ratio as of March 31, 1999 was 1.60 to 1.00. BRAZOS SPORTSWEAR: Red Oak Sale ------------------------------- The immediate sale of the Red Oak Sportswear Division is the debtors' last remaining alternative to preserve the value of the Red Oak Assets for the benefit of the debtors and their creditors. Otherwise, the debtors will be forced to liquidate its assets. The debtors request that the court enter a sale order approving the purchase agreement and authorizing the sale. Pursuant to a certain purchase agreement for the sale of substantially all of the operating assets of the debtors' Red Oak Sportswear Division, the debtors entered into an agreement with Red Oak Acquisition Inc. as purchaser for a base purchase price of $3.75 million plus the assumption of certain liabilities. The closing will be no later than June 30, 1999. BRAZOS SPORTSWEAR: Seeks Order Establishing June 18 as Bar Date --------------------------------------------------------------- Brazos Sportswear, Inc., et al. seeks a last date for filing requests for payment of administrative claims and expenses. The debtors seek entry of an order establishing June 18, 1999 as the deadline for all persons and entities who have or assert administrative claims and expenses that were incurred between January 22, 1999 and May 31, 1999. A hearing to consider approval of the debtors' proposed sale of all of the assets of their various business units is presently scheduled for June 14, 1999. The debtors expect that following the sale, few, if any employees will remain available to administer the administrative claims reconciliation process. CENTENNIAL CELLULAR: Sale Of Senior Notes Pending ------------------------------------------------- Centennial Cellular Corp. has registered a stock exchange offering with the SEC in which the company is offering to exchange all of the notes sold in a private offering for new registered notes. The exchange offer will expire on a date yet to be determined. The offer is comprised of 10 3/4% Senior subordinated notes due 2008 totaling $370,000,000. The terms of the new notes are substantially identical to the outstanding notes, except for the fact that they will not have transfer restrictions and registration rights. The new notes will not be listed on any exchange or quoted on NASDAQ. CFS: Files Proposal to Sell Fixed Assets ----------------------------------------- The Daily Oklahoman reports on May 27, 1999 that the latest step toward selling financially troubled Commercial Financial Services Inc. was taken Wednesday when the company filed a proposal in bankruptcy court to sell its "fixed" office assets for $16.5 million to Worldwide Asset Management LLC of Atlanta. The sale of the debt-collection company through a bankruptcy court auction isn't anticipated until July. At that time, a closing could also be concluded, CFS spokeswoman Sharon Price said. Crucial to the sale is a new agreement by Worldwide for servicing delinquent credit-card accounts of the asset-backed security holders, who also would have to approve the sale. These trust-owned accounts serviced by CFS have an estimated value of $1.7 billion. Fred C. Caruso, CFS president, said he plans to immediately schedule informational meetings with the security holders to provide them with details of Worldwide's proposal. "It is important for CFS, Worldwide and the official committee of asset-backed security holders" to support and approve the deal, he said. Caruso said that "sale of the CFS is clearly the best option to restore the company to profitability, retain jobs and preserve the most value for the estate and its creditors." Worldwide is managed by Frank J. Hanna Jr., a part owner in the limited liability company. He is an Atlanta entrepreneur and a longtime worker in the debt-collection industry. Hanna plans to continue operations at both the Tulsa and Oklahoma City offices of CFS and "plans to add 200 new collectors by year's end," Price said. Worldwide and Hanna have not kept interest in acquiring CFS a secret, as was required by other interested companies. Hanna visited CFS locations in Oklahoma City and Tulsa in April. Price described the "fixed" office assets as telephones, computers and other equipment used in debt collection. Filed Wednesday were the proposed rules for the sale that require approval by the court as well as major creditors. Similar filings were made before Chief Bankruptcy Judge Dana L. Rasure auctioned off its London-based international subsidiary for $7 million in February and its Gulfstream IV executive jet for $23 million in March. Those rules set an opening bid, minimums for each successive bid, method of payment and other requirements. The proposed bid procedures are "so the sale can go smoothly," Price said. CFS filed for Chapter 11 bankruptcy protection to reorganize in the U.S. Bankruptcy Court for the Northern District of Oklahoma on Dec. 11. The company said it has received 20 expressions of interest, assisted seven potential buyers and had "extensive negotiations" with three suitors before reaching an agreement in principle with Worldwide. Since filing bankruptcy, CFS has laid off about 1,200 employees. The company has 1,520 workers remaining in Tulsa and Oklahoma City. In reorganizing the company, Caruso said Wednesday collections have increased per person by 200 percent, the payoff per account has gone up by 6 cents on the dollar and operating expenses had been cut by 40 percent. DIXONS US HOLDINGS: Seeks Extension to File Disclosure Statement ---------------------------------------------------------------- The debtors, Dixons U.S. Holdings, Inc., and its affiliates seek entry of an order authorizing the filing of a Chapter 11 plan without a disclosure statement. After discussions with the Creditors' Committee, the debtors have prepared a revised liquidating plan, disclosure statement and certain other ancillary documents for the Committee's review and final comment. The debtors anticipate filing the amended plan and a disclosure statement that are supported by the Creditors' Committee within the next thirty days. The debtors request an additional thirty days to file a disclosure statement. The debtors intend to use the additional time to finalize the amended plan and disclosure statement so that they can begin their Chapter 11 liquidating plan. FACTORY CARD: Seeks Authority To Schedule Auction ------------------------------------------------- Factory Card Outlet Corp. and Factory Card Outlet of America Ltd., debtors, have determined to cease the operation of 27 Factory Card Outlet Stores all of which are leased by the debtors. It is anticipated that all or substantially all of the store closing sales will be concluded by June 30, 1999 and in no event later than July 31, 1999.The debtors have retained DJM Asset Management LLC to assist them in the sales. The debtors proposed to conduct an auction on June 16, 1999 at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, NY. The stores are located in St. Charles, Illinois; Mt. Vernon, Illinois; Skokie, Illinois; Indianapolis, Indiana; Houston, Texas; Tyler, Texas; Ft. Worth, Texas; Texarkana, Texas; Columbia, South Carolina; Tampa, Florida; San Antonio, Texas; Nashville, Tennessee; Sugarland, Texas; Sanford, Florida; Columbus, Ohio; San Antonio, Texas; Olathe, Kansas; Lewisville, Texas; Knoxville, Tennessee; Shawnee, Kansas; Katy, Texas; Manassas, Virginia; Laurel, Maryland; Alexandria, Virginia(2); Richmond, Virginia. FIRST UNION: Transacts Multiple Sales To Help Retire Debt --------------------------------------------------------- First Union Real Estate Investments earlier announced its intention to sell substantial assets to satisfy debt. In mid-May it announced the sale of its Woodland Commons shopping center in a transaction that totaled $21.6 million, including the assumption of an $11.5 million mortgage. The net proceeds of $9.32 million, after closing costs and first mortgage indebtedness, have been used to make a partial prepayment of the bridge loan. Woodland Commons is a 170,000-square-foot neighborhood shopping center located in the upscale community of Buffalo Grove, Illinois, a suburb of Chicago. First Union Real Estate Investments had acquired the property in 1995. Also included in the transaction was the sale to Sunrise Development of a 2.6-acre tract adjacent to Woodland Commons where Sunrise is building a 73-bed assisted-living center. The Trust had announced in mid-January that it had contracted to sell its 2,105 apartment units to one buyer. After completion of its due diligence, the potential buyer of the portfolio had requested several material changes to the contract including a price reduction. After careful review, the Trust decided that the requested changes to the contract were unacceptable and, although the Trust is continuing discussions with the potential buyer, it is currently pursuing other alternatives including other buyers and/or the refinancing of all or part of the portfolio. First Union Real Estate Equity and Mortgage Investments is a NYSE- listed, stapled-stock real estate investment trust (REIT) headquartered in Cleveland. In March First Union Real Estate Investments announced the sale of one of its office buildings, the Beck Building, in a transaction that totaled $2.15 million. The net proceeds of approximately $1.77 million, after closing costs and adjustments, were used to make a partial re-payment of the bridge loan. Located in Shreveport, Louisiana, the 162,000 square foot Beck Building currently with 147 tenants was acquired by the Trust in 1974. In April First Union Real Estate Investments announced the sale of its Sutter Buttes office center in a transaction that totaled $3.8 million. The net proceeds from the sale of approximately $3.6 million, after closing costs and adjustments, were used to make a partial repayment of the Trust's outstanding bridge loan. Located in Marysville, California, the 427,000 square foot facility was acquired by the Trust in 1979. The property (formerly called Peach Tree Center) through 1985 had been operated as an enclosed shopping mall. A flood, caused when a nearby earthen levee broke, badly damaged the property in 1986. The Trust has had limited success in leasing the property since that time. The Trust began to officially market Sutter Buttes for office use in 1997. At present, it is 54% occupied. On May 6, 1999 First Union Real Estate Investments announced that the Trust completed the sale of four retail properties located in the Pacific Northwest to Center Oak Properties for approximately $37.5 million in cash. The properties include Valley North and Valley Mall, located in Wenatchee and Union Gap, Washington, respectively, and two sister properties, Mall 205 and Plaza 205, in Portland, Oregon. Center Oak Properties is a private real estate company headquartered in Torrance, California, specializing in the redevelopment of well located, underperforming properties. Center Oak has recently completed several transactions in the Northwest including the purchase of a mall in East Wenatchee, which is slated for redevelopment. The Trust also announced that it has entered into a contract with GP Properties, Inc., an affiliate of Jager Management, to sell its Fingerlakes Mall in Auburn, New York, for $2.5 million and Mountaineer Mall in Morgantown, West Virginia, for $11. million. The purchaser delivered a $2,050,000 non-refundable deposit which can be applied to the purchase of either property. The closing is scheduled to occur in the beginning of June. The net proceeds of all these sales will be used to pay down the Trust's short-term debt. FORCENERGY: Seeks Order Authorizing Employ of Arthur Andersen ------------------------------------------------------------- The debtors, Forcenergy, Inc. and Forcenergy Resources Inc. filed an application for an order authorizing the employment of Arthur Andersen LLP as accounting consultants and financial advisors. The firm will provide accounting, tax consulting and advisory services. The debtors may also apply in the near term to retain PricewaterhouseCoopers as auditors. The hourly billing for professionals at Arthur Andersen range from $124 to $462. The professionals primarily responsible for this matter will be Dean E. Swick whose hourly rate is $357 and Robert T. Ladd whose hourly rate is $462. GULF STATES STEEL: Defaults Continue On Line Of Credit And Mortgages -------------------------------------------------------------------- As previously indicated in Gulf States Steel was unable to make the interest payment on its 13 1/2% Series B first mortgage notes due 2003 on May 15, 1999. That date represented the expiration of the 30-day cure period from the original interest payment date of April 15, 1999. Gulf States is continuing its confidential discussions with a representative committee of noteholders covering the full range of financial restructuring alternatives and obtaining consent to additional borrowings. The committee has indicated to Gulf States that it has no present intention of accelerating the notes. Gulf States default also caused a cross default under the company's working capital line of credit with Fleet Capital Corporation and Congress Financial Corporation which have continued to advance funds under the facility despite the default. HVIDE MARINE: Obtains Waiver On Credit Noncompliance ---------------------------------------------------- Hvide Marine Incorporated and certain guarantors, on May 17, 1999, entered into an amendment agreement which addressed a waiver to the company's amended and restated revolving credit and term loan. In this agreement the company's bank lenders agree to waive, until June 30, 1999, the company's noncompliance, as of March 31, 1999, with certain covenants in the credit facility. Citibank, N.A., will act as administrative agent, BankBoston, N.A., as documentation agent. JPE INC: Selling Off Stock To Reduce Indebtedness ------------------------------------------------- Net sales for the quarter ended March 31, 1999 were $24.2 million compared to $69.4 million for the same period in 1998 for JPE Inc. Net income for the quarter ended March 31, 1999 was $2.1 million as compared to a net loss of $3.3 million for the quarter ended March 31, 1998. Plastic Trim, Inc. and Starboard Industries, Inc., subsidiaries of JPE filed reorganization plans with the Bankruptcy Court which were confirmed on April 16, 1999. Under these plans, PTI's and Starboard's unsecured creditors as of September 15, 1998 will be paid 30% of their pre-petition claims. This will result in a forgiveness of liabilities of approximately $3.9 million. On March 26, 1999, JPE sold the stock of Industrial & Automotive Fasteners, Inc. to MacLean Acquisition Company for approximately $20.0 million. The sales agreement required certain vendors to compromise their accounts receivable from IAF to 30% of the outstanding balance and union employees to accept annuity contracts in lieu of their postretirement health care and life insurance benefits. JPE recorded a gain in the first quarter of 1999 for the forgiveness of these liabilities of approximately $3.5 million, offset by a loss on the sale of stock of approximately $4.0 million. The net proceeds of $19.2 million from this sale were used to pay down their U.S. Bank debt. On April 28, 1999, JPE Inc. reached a definitive agreement with ASC Holdings LLC and Kojaian Holdings LLC, in which the buyers will acquire common and preferred stock of JPE to initially have voting control and an economic interest of 95% of the company. The buyers will be issued 9,441,420 shares of common stock and 1,560,000 shares of preferred stock, subject to adjustment. Each share of preferred stock issued to the buyers will have all rights and privileges, including voting, distribution and dividend rights, equal to 50 shares of common stock. The buyers will invest $18.4 million in the company and will provide or arrange a loan to JPE in the amount of approximately $51.6 million. LACLEDE CHAIN: R.J. Rigging Co. Seeks Relief From Stay ------------------------------------------------------ R.J. Rigging Company seeks relief from the automatic stay in order to proceed in certain pending litigation in Ohio state court against Laclede Chain Manufacturing Company, debtor, but solely with respect to the debtor's insurance proceeds. Rigging is seeking damages in excess of $1.4 million. The debtor's interests are being represented by its insurance carrier. Therefore, Rigging's argues that the debtor will not be unduly burdened or prejudiced if this motion is granted and the Ohio Action is permitted to continue against the debtor. LINEN SUPERMARKET: Order Authorizes Employ of Jenner & Block ------------------------------------------------------------ The Trustee's application to employ Jenner & Block as special counsel to the trustee is granted. The firm will serve as special counsel for the purpose of representing the Trustee to collect on a default final judgment obtained in the adversary proceeding entitled John P. Barbee, Trustee v. Selfix, Inc. The firm will be retained on an hourly basis, however, its total compensation, exclusive of costs, shall not exceed 33.33% of the net recovery. LIVENT: OK's SFX's $115 Million Offer ------------------------------------- The struggling Canadian musical producer of Broadway hits such as "Fosse" and "Ragtime" said in court papers filed Wednesday that it agreed to be bought for up to $115 million. Toronto-based Livent Inc. accepted the offer from SFX Entertainment, the nation's leading producer of live music shows, after SFX agreed to buy most of the assets of the company with theaters in New York, Chicago and Toronto. In court papers filed Wednesday in U.S. Bankruptcy Court in Manhattan, Livent acknowledged that it had aggressively tried to sell its business after learning of massive accounting irregularities a year ago. Livent sought bankruptcy protection in November after a new management team headed by former Walt Disney Co. President Michael Ovitz said it spotted the fraud by the company's Canadian founders, Garth Drabinsky and Myron Gottlieb. In January, U.S. federal prosecutors in Manhattan filed fraud and conspiracy charges against Drabinsky and Gottlieb, accusing them of stealing $4.6 million from the company in the early 1990s and then doctoring the books to hide it. Both have denied any wrongdoing and remain in Canada. Livent said in its court papers Wednesday that the new owners realized that a quick sale was the only way to rescue the business known for "producing artistically well received but economically burdensome productions," the papers said. The abrupt filing for bankruptcy protection, though, interrupted the effort to sell the business, setting off a "whirlwind of chaos as the media in both the United States and Canada predicted an early demise and liquidation of the debtors' business," the company said. Livent said it had received offers from several parties seeking to acquire substantially all of the company's assets and after lengthy and intense negotiations with many of the suitors had settled on SFX Entertainment. Although SFX Entertainment had agreed to pay up to $115 million for substantially all of the company's assets, other bids will be accepted according to a schedule set by the bankruptcy court, Livent said. U.S. Bankruptcy Court Judge Arthur J. Gonzalez set a hearing for June 9. LOEWEN GROUP: Information About Case ------------------------------------ If you would like to find out more about the multi-billion dollar, cross-border insolvency concerning The Loewen Group, Inc., and its hundreds of affiliated debtors, point your Web browser to http://bankrupt.com/loewen.txtfor a free copy of Loewen Bankruptcy News. MAIDENFORM WORLDWIDE: Solicitation of Votes To Accept or Reject Plan -------------------------------------------------------------------- On May 19, 1999, the U.S. Bankruptcy Court for the Southern District of New York entered an order approving the disclosure statement with respect tot he First Amended and Restated Joint Plan of Reorganization, dated May 18, 1999 for Maidenform Worldwide, Inc., Mainform, Inc. and NCC Industries, Inc. The court has fixed July 14, 1999 at 10:00 AM as the date and timer for the hearing to consider confirmation of the plan. The confirmation hearing will be held before the Honorable Cornelius Blackshear, US Bankruptcy Judge, in Room 601 of the United States Bankruptcy Court, Alexander Hamilton U.S. Custom House, One Bowling Green, New York, New York 10004-1408 at such date and time. NETMED: New President/CEO Plus New Chairman, Richards Resigns ------------------------------------------------------------- On May 26, 1999, NetMed, Inc. announced that David J. Richards resigned as Chairman and CEO of the Company, and from its Board of Directors, and that the Board had elected James F. Zid as Chairman, and Trevor Ferger as President and CEO. "NetMed has many challenges, both financial and in product development," said Ferger. "It is our goal to put the company on firm financial footing and continue the development of the OxyNet(R) oxygen concentrator." NetMed is in the business of developing and marketing medical technology. It recently lost its license to market the Papnet(R) system of automated Pap smear screening as a result of the bankruptcy reorganization of the licensor, Neuromedical Systems, Inc. NetMed, through its OxyNet subsidiary, is currently developing the OxyNet(R) oxygen concentration device, which the company is developing for the home healthcare and other markets. QUALITECH STEEL: Order Authorizes Employ Of David Blackwell, CEO ---------------------------------------------------------------- Judge Anthony J. Metz III entered an order authorizing the employment of David Blackwell as the debtor's Chief Executive Officer. Blackwell will be paid an annualized salary of $300,000, for a term of six months commencing May 19, 1999. READING CHINA: Seeks To Extend Exclusive Periods ------------------------------------------------ The debtors, Reading China and Glass Inc. and affiliates are seeking to extend the debtors' exclusive periods in which to file a Chapter 11 plan and to solicit acceptances thereof. The debtors seek an extension of approximately 90 days through and including August 25, 1999 to file a plan, and through and including October 25, 1999 to solicit acceptances to such plan. The debtors say that they are pursuing a consensual liquidation, and their efforts in completing and resolving the cases warrants such an extension. READING CHINA: Setting Date To Conduct Auction ---------------------------------------------- An order was entered by the US Bankruptcy Court for the District of Delaware authorizing the conduct of an auction of the debtors' leases on June 3, 1999 at 1:00 PM. A hearing will be held on the proposed sale, assumption and assignment of any and all leases by the debtors on June 11, 1999 at 2:00 PM. RENAISSANCE COSMETICS: Files for Bankruptcy Protection ------------------------------------------------------ Renaissance Cosmetics Inc. and eight subsidiaries filed chapter 11 yesterday in the District of Delaware, according to Reuters. The Stamford, Conn.-based company has estimated assets of less than $50 million and unsecured debt of almost $270 million. Among the largest unsecured creditors are the U.S. Trust Co. of New York, the trustee for a $200 million claim of 11.75 percent senior notes due 2004 and General Electric Capital Corp., which has a contingent bank loan of $65 million. The company said that since last year, it has been "negotiating with an informal committee representing a majority of the holders of the senior notes to restructure its obligations." (ABI 03-June-99) STARTER CORP: Seeks To Liquidate Foreign Subsidiaries ----------------------------------------------------- The debtors, Starter Corporation, et al. seek court authorization for its board of directors to take corporate action to initiate the liquidation of its non-debtor Foreign Subsidiaries. Starter owns 100% of the outstanding shares of stock of the Foreign Subsidiaries. In light of the debtors' liquidation, the Foreign Subsidiaries have already experienced resignation of many employees. The debtors have determined that absent an immediate orderly liquidation of the foreign Subsidiaries, the debtors will not be able to maximize the value of the Foreign Subsidiaries. To liquidate the Foreign Subsidiaries, actions must be taken relating to issues of employment, payment of debt, the liquidation of inventory and the collection of outstanding commercial debt. STARTER CORPORATION: To Close 19 Outlet Stores ---------------------------------------------- Starter Corporation et al., debtors, seek a court order approving the closing of certain stores, and authorizing "Going-Out-Of- Business Sales" of merchandise. A hearing will be held on the motion before the Honorable Peter J. Walsh, 5th Floor, Marine Midland Plaza, 824 Market Street, Wilmington, Delaware 19801, on June 18, 1999 at 2:30 PM. In addition, the debtors seek to enter into an agency agreement with The Ozer Group LLC and Schottenstein Bernstein Capital Group LLC for the conduct of an auction. The stores are located in New Haven, CT; Foley, AL; Niagara Fall, NY; Birch Run MI, Williamsburg, VA; Branson MO, Central Valley NY; Pleasant Park WI; Commerce, GA; Las Vegas NV; Cedar Rapids, Iowa; West Branch MI; Osage Beach, MO; Mosines WI; Jeffersonville, OH; Jackson, NJ; Riverhead, NY; Memphis, TN. The debtors have determined that they cannot reorganize on a stand alone basis. Pursuant to the terms of the agency agreement, the debtors may elect a guaranteed recovery of 32.43% of the value of the merchandise measured at "retail" or a guaranteed recovery of 31.25% of the value of the merchandise measured at retail, and if the proceeds of the sales exceed the 31.25% guaranteed recovery plus expenses of the sales and the agent's 2% fee, the debtors and the agent will then share the excess proceeds equally. The foregoing pricing for the 19 store transaction assumes that the merchandise to be sold has an aggregate retail value of approximately $9 million to $10 million. The debtors estimate that under the 32.43% Guaranteed Amount, the sales will provide a minimum recovery of approximately $2,918,000. Under the Alternate Guaranteed Amount, the sales will generate a minimum recovery of approximately $2,812,000. The Agent will also arrange for the sale of all furniture, fixtures and equipment. Simultaneously, the debtor seeks an extension of the time period to assume or reject the debtors' leases. The debtors seek an additional ninety day extension of time in which to assume or reject the leases to allow sufficient time for the sales to be consummated. SUN HEALTHCARE: Banks Block Sun Healthcare Payments ---------------------------------------------------- Sun Healthcare Group, which reported huge losses in the last two quarters, failed to pay $7 million in interest to bondholders after a group of banks blocked the payments, the company said. The country's third-largest nursing home company owes the banks $826 million, said Sun Healthcare spokeswoman Phyllis Goodman on Wednesday. The company has not missed payments on that debt but has not been able to renegotiate contractual agreements with the banking group. The agreements expired May 28. Failure to pay the interest moves Sun Healthcare closer to bankruptcy, Murray Innes, an analyst for Credit Lyonnais Securities in New York, said. Goodman said the company was reviewing options with the banks. "Bankruptcy is on the list, but it is just one of several alternatives," she said. The Albuquerque, N.M.-based Sun Healthcare has the money on hand to pay the bondholders and can pay its day-to-day trade obligations, Goodman added. The company has been trying to renegotiate terms of some of its major loans for several months, Goodman said. The bank group, headed by Bank of America, consists of about 50 financial institutions. As a senior lender, the group has the power to block the interest payment. Sun Healthcare is reeling from losses it has blamed on changes in the Medicare payment system for long-term care. The company lost $761.1 million, or $13.34 a share, in the fourth quarter of 1998. It reported a first-quarter loss this year of $113.1 million, or $1.96 a share. THE PENN TRAFFIC COMPANY: Committee Applies To Retain Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors of The Penn Traffic Company and its three affiliated debtors seeks a court order authorizing the Creditors' Committee to retain and employ Akin, Gump, Strauss, Hauer & Feld LLP as of May 15, 1999 as counsel for the Committee and to substitute Akin Hum for Stroock & Stroock & Lavan LLP. The change in firms is due to the fact that Daniel H. Golden and Lisa G. Beckerman were partners at Stroock who were primarily responsible for representation of the Committee, and they are both now members of Akin Gump. TRANSTEXAS GAS: Annual Meeting In Houston In July ------------------------------------------------- Transtexas Gas will hold its annual meeting on Friday, July 9, 1999, beginning at 10:00 a.m., central daylight time, at The Hotel Sofitel, 425 North Sam Houston Parkway East, Houston, Texas 77060. The matters to be voted on include the election of two persons to serve as Class III directors of the company for a three-year term; and any other matters that may properly come before the annual meeting or any postponements or adjournments thereof. The record date for the annual meeting was May 12, 1999. Only stockholders of record at the close of business on the record date are entitled to receive notice of and to vote at the annual meeting. UNITED COMPANIES: Court Approves Committee's Professionals ---------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware entered an order approving the retention of professionals for the Official Committee of Unsecured Creditors. The court approved retention of Wachtell, Lipton, Rosen & Katz as counsel; PricewaterhouseCoopers LLP as accountants and reorganization consultants for the Committee and Morris, Nichols, Arsht & Tunnelll as Co-Counsel for the Committee. WIRELESS ONE: Seeks Order Extending Exclusive Period ----------------------------------------------------- Wireless One, Inc., debtor, seeks entry of an order extending the exclusive period during which the debtor may file and solicit acceptances of a plan of reorganization. The debtor is in the midst of evaluating the effect of a fundamental shift in the debtor's industry on the debtor's proposed plan of reorganization -- a shift that has caused a similar jump in the value of the debtor's business. The debtor's stock and bond prices have skyrocketed in recent weeks, and the debtor requests that the exclusivity period be extended so that it may continue to evaluate these significant events. The debtor seeks entry of an order extending the exclusive period during which the debtor may file a plan of reorganization and solicit acceptances of such plan from the original expiration date of June 11, 1999 to and including October 31, 1999. This is the debtor's first such request. WIRLESS ONE: Seeks Order Establishing July 23 as Bar Date --------------------------------------------------------- The debtor, Wireless One, Inc. seeks establishment of July 23, 1999 as the general claims bar date in the Chapter 11 case of Wireless One, Inc. Proofs of claim must be received on or before 4:00 PM, Eastern Time on the Bar Date. WORLDWIDE DIRECT: Seeks To Retain Executive Sounding Board ---------------------------------------------------------- Worldwide Direct, Inc., et al. filed an application for authority to employ Executive Sounding Board Associates, Inc. and Eugene I. Davis as CEO. The Committee supports the engagement and retention by the debtors of Eugene I. Davis and ESB as their CEO. ZENITH ELECTRONICS: Debenture Holders To Agree To Exchange ---------------------------------------------------------- Zenith Electronics has filed a registration statement with the SEC and as soon as effective will be soliciting from each holder of its impaired claims as at the close of business on a date yet to be determined, acceptance of a prepackaged plan of reorganization under chapter 11 of Title 11 of the United States Code, as amended. The prepackaged plan provides, among other things, that as of the date the prepackaged plan becomes effective, holders of the company's 6 1/4% convertible subordinated debentures due 2011 having an aggregate principal amount outstanding of $103.5 million, issued under the indenture dated as of April 1, 1986 between the company and State Street Bank & Trust Company, as trustee, shall receive a pro rata distribution of $50 million of new 8.19% debentures due 2009. In the event that holders of the old subordinated debentures do not approve the prepackaged plan, however, the prepackaged plan provides for a "cram down" mechanism with respect to the class composed of the holders of the old subordinated debentures. If such a "cram down" is approved by the Bankruptcy Court, holders of the old subordinated debenture claims would receive no distribution and retain no property. While the company believes this treatment is permissible under the Bankruptcy Code, certain case law exists that may permit a contrary conclusion. In addition, under the prepackaged plan, all equity interests, including the company's common stock, will be cancelled and the holders thereof will receive no distributions and retain no property on account of such interests. Confirmation of the prepackaged plan pursuant to section 1129 of the Bankruptcy Code is subject to judicial approval of this solicitation and the terms of the prepackaged plan including, as necessary, under the "cram down" provisions of the Bankruptcy Code. Members of a committee of holders of old subordinated debentures have entered into an agreement with Zenith Electronics in which they have agreed to vote for and support the prepackaged plan. The members of the debenture committee have informed the company that they collectively hold or control over 50% of the outstanding principal amount of the old subordinated debentures. The members of the debenture committee are Loomis Sayles & Company, L.P., Mariner Investment Group and Caspian Capital Partners L.L.P. The debenture committee has retained Crossroads Capital Partners LLC as its financial advisor and Hebb & Gitlin as its legal advisor. LG Electronics Inc., a corporation organized under the laws of the Republic of Korea, has entered into an agreement with Zenith Electronic in which it has agreed to vote for the prepackaged plan. LGE holds all of the LGE claims. Complete information on the above proposal may be read in its entirety by accessing http://www.sec.gov/cgi-bin/srch- edgar?0000950131-99-003505 and http://www.sec.gov/cgi-bin/srch- edgar?0000950131-99-003506 on the Internet, free of charge. BOND PRICING: For Week of June 1, 1999 -------------------------------------- DLS CAPITAL PARTNERS, Inc. Following are indicated prices for selected issues: Acme Metal 10 7/8 '07 9 - 11 (f) Amer Pad & Paper 13 '05 65 - 68 Asia Pulp & Paper 11 3/4 '05 74 - 76 Boston Chicken 7 3/4 '05 5 - 6 (f) Cityscape 12 3/4 '05 9 - 11 (f) E & S Holdings 10 3/8 '06 47 - 52 Geneva Steel 11 1/2 '01 20 - 22 (f) Globalstar 11 1/4 '04 62 - 64 Hechinger 9.45 '12 6 - 8 (f) Iridium 14 '05 24 - 26 Loewen 7.20 '03 60 - 62 (f) Penn Traffic 8 5/8 '03 44 - 46 (f) Planet Hollywood 12 '05 20 - 23 (f) Samsonite 10 3/4 '08 75 - 77 Service Merchandise 9 '04 19 - 20 (f) Sun Healthcare 9 1/2 '07 16 - 18 (f) Sunbeam 0 '18 15 - 16 TWA 11 3/8 '06 51 - 52 Vencor 9 7/8 '05 20 - 22 (f) Zenith 6 1/4 '11 26 - 28 (f) ********* The Meetings, Conferences and Seminars column appears in the TCR each Tuesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Bond pricing, appearing in each Friday edition of the TCR, is provided by DLS Capital Partners, Dallas, Texas. S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter, co- published by Bankruptcy Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc., Washington, DC. Debra Brennan, 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. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *