/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/990624.MBXT R O U B L E D C O M P A N Y R E P O R T E R Thursday, June 24, 1999, Vol. 3, No. 120 Headlines AHERF: Creditors Seek Damages of More than $1 Billion BN1 TELECOMMUNICATIONS: Order Confirms Plan BOSTON CHICKEN: Seeks Approval Of Purchase Proposal Process CARGO FURNITURE: Tandycrafts Reacquires Cargo After Default CENTENNIAL COAL: Seeks Consulting Agreement With Sumner CITYSCAPE: Amended Reorganization Plan Confirmed COYOTE SPORTS: Merger Agreement with Royal Precision Terminates ELDER BEERMAN: Despite Losses Company Seeks Acquisitions FLORIDA COAST: Noteholders Object to Postpetition Financing FORCENERGY: VECO Alaska's Notice of Lien GANTOS: Rescheduling Of Notes Gives Temporary Respite GB PROPERTY: Plan Filed Will Impact Stock & Mortgage Notes Held HARNISCHFEGER: Committee Chosen HARNISCHFEGER: Court Authorizes Wilmington Firm IRIDIUM: Agreement To Purchase Claircom is Terminated LAMONTS APPAREL: Company's Financials Show Slight Improvement LANDMARK FORWARDING: Seeks Reinstatement of Case LATTICE SEMICONDUCTOR: MFSC Ceases To Hold 5% Of Company's Stock LIVENT (US) INC: Deadline For Filing Proofs of Claim NU-KOTE: KPMG LLP Authorized As Accountants for Debtors PAGE AMERICA: Case Summary & 20 Largest Unsecured Creditors PITTSBURGH PENGUINS: Fox Sports Net Pittsburgh Joins Lemieux PLUMA INC: Seeks To Employ Brokers QUALITECH STEEL: Response to Enron Trade Resources Corp. RENAISSANCE COSMETICS: Committee Taps Kronish Lieb Weiner RYMER FOODS: Company Doubts It Can Surmount Continuing Losses SGSM ACQUISITION: Seeks Approval of Asset Purchase Agreement SGSM ACQUISITION: Seeks Approval Of Purchase Agreement TALK AMERICA: Final Order Approving Postpetition Financing TELEPAD CORP: Share Purchase Agreement WESTERN FIDELITY: Extension of Time to File Plan WIRELESS ONE: Debtor responds to Committee's Objection WORLDWIDE DIRECT: Committee Objects To Appointment of Trustee ********** AHERF: Creditors Seek Damages of More than $1 Billion ----------------------------------------------------- Creditors of Allegheny Health Education and Research Foundation (AHERF) yesterday said they will seek damages exceeding $1 billion from AHERF and at least 10 of the officers and directors who headed it up prior to the bankruptcy filing, The Pittsburgh Post-Gazette reported. The lawsuit filed yesterday in Bankruptcy Judge M. Bruce McCullough's court also included a request that the court relieve the creditors from a stay against such actions. Among the allegations in the suit are that AHERF officers and directors breached their fiduciary duties with "gross negligence, recklessness and even knowing misconduct." The suit also said that managers "took their charitable institutions on an uncontrolled journey of irresponsible acquisitions, financial manipulation, bureaucratic excess, lavish spending, grossly inappropriate use of funds and self-aggrandizement." The creditors also accuse the top officers of conflict of interest following the bankruptcy filing last July. According to the creditors, they will get less money to repay about $1.5 billion in debt because the top officials tried to insulate Allegheny General Hospital and three other AHERF hospitals from the bankruptcy while shedding Philadelphia area holdings. The focus thus far in the bankruptcy proceedings has been selling AHERF's assets to raise money to repay creditors. (ABI 23-June-99) BN1 TELECOMMUNICATIONS: Order Confirms Plan ------------------------------------------- On June 18, 1999, the US Bankruptcy Court for the Northern District of Ohio entered an order confirming the plan of reorganization of BN1 Telecommunications Inc. BOSTON CHICKEN: Seeks Approval Of Purchase Proposal Process ----------------------------------------------------------- Boston Chicken, Inc. (OTC Bulletin Board: BOSTQ) has filed a motion asking the U.S. Bankruptcy Court, District of Arizona, to approve procedures for submission to the company of binding purchase proposals from potential buyers. The motion, filed June 21, proposes dates for bid submission and negotiation, and selection of a purchaser for Boston Chicken. The company filed its voluntary petition for Chapter 11 bankruptcy protection in the same court on October 5, 1998. "We have been working with our financial advisors to develop the best way to successfully emerge from Chapter 11. As a result of discussions with our advisors, senior lenders and potential buyers, we decided it was time to institute a formal bid procedure," said J. Michael Jenkins, chairman, president and chief executive officer of Boston Chicken. In addition to setting deadline dates for selecting a buyer and filing a reorganization plan, the bid procedures include limited expense recovery for unsuccessful bidders, and payment of a "break-up fee" to the plan sponsor in the event an alternative buyer is chosen. The motion submitted to the Bankruptcy Court follows the Court's approval of a license agreement between Boston Chicken and H.J. Heinz Company (NYSE: HNZ). The agreement enables Heinz to manufacture and sell packaged foods to the retail trade under the Boston Market(R) trademark. "The approval of the Heinz agreement and the motion to formalize the bid procedure are very solid steps forward in our efforts to reorganize the company under the protection of the bankruptcy court," said Jenkins. Boston Chicken, Inc. operates and franchises restaurants under the Boston Market brand name that specialize in fresh, convenient meals, featuring homestyle entrees, fresh vegetables, sandwiches, salads and side dishes. There are 865 Boston Market restaurants in 33 states and the District of Columbia. Information on Boston Chicken and Boston Market is available at www.boston-market.com. CARGO FURNITURE: Tandycrafts Reacquires Cargo After Default ----------------------------------------------------------- Tandycrafts Inc. announced that it reacquired Cargo Furniture & Accents after Cargo defaulted on a $3.5 million loan. Tandycrafts, which makes home and office products, sold Cargo to employees in 1997. Cargo posted net sales of $17 million in 1998 and had sales growth near 25% in its Collection stores. Tandycrafts plans to convert the 800 square foot mall stores to the Collection store format. (The Wall Street Journal 23-June-99) CENTENNIAL COAL: Seeks Consulting Agreement With Sumner ------------------------------------------------------- The debtors, Centennial Coal, Inc. et al., seek authorization and approval of a consulting agreement among the debtors and Douglas P. Sumner. AS part of the plan to make changes to their executive management, the debtors have entered into a consulting agreement with Energy Ventures Analysis, Inc. Pursuant to the agreement, EVA will provide the debtors with a full range of operational and managerial services and will assume the duties performed by the debtors' current executive management team. In accordance with the agreement, two individuals associated with EVA will assume senior executive management positions with the debtors. The current president and CEO, Douglas Sumner will resign from the company but the debtors request that the court authorize Sumner's continued involvement with the company in the capacity of a consultant. Sumner will be paid a monthly consulting fee of $25,000 plus expenses. He is entitled to a stay bonus of $50,000 CITYSCAPE: Amended Reorganization Plan Confirmed ------------------------------------------------ The U.S. Bankruptcy Court in White Plains, N.Y., confirmed Cityscape Financial Corp.'s first amended reorganization plan on June 10 after a hearing the previous day. "All objections and responses to, and statements and comments regarding, the Plan, to the extent they have not been withdrawn prior to the entry of this Confirmation Order or are cured by the relief granted herein, are hereby expressly overruled and deemed withdrawn with prejudice," the court ruled in an order entered June 16. The consumer finance company filed an amended plan on March 26 that slashed the treatment afforded to the holders of senior note claims, general unsecured claims and subordinated debenture claims after failing to line up exit financing. However, Cityscape filed further amendments to the plan on April 27 after making revisions "in light of the fact that they have completed the preparation of their 1998 year-end financial information and are in the process of completing the preparation of their financial information for the first quarter of 1999." The modifications resulted in increased recoveries for the three classes. (The Daily Bankruptcy Review and ABI - June 23, 1999) COYOTE SPORTS: Merger Agreement with Royal Precision Terminates --------------------------------------------------------------- Coyote Sports Inc. (Nasdaq:COYT), and Royal Precision Inc. announced Tuesday that the merger agreement between the two companies has been terminated at the request of Royal Precision Inc. due to a material change in the business of Coyote Sports Inc. resulting in an inability to obtain suitable replacement long-term debt financing. Termination of the merger agreement and the failure to obtain replacement long-term financing will most likely have a material adverse effect on Coyote's business, operating results and financial condition. The company, which is not current with certain vendors, is undertaking a thorough review of its financial situation to develop a plan to restructure the company and its financial obligations. Certain substantial debt obligations of the company contain a demand feature. The company is in direct communication with its lenders and hopes to be able to obtain satisfactory accommodations to restructure its obligations. If the company is not able to obtain satisfactory accommodations from its lenders or obtain other financing, it may be forced to seek relief under the United States Bankruptcy Code. In addition, the company anticipates that its common stock is likely to be delisted from the Nasdaq SmallCap Market. Coyote Sports Inc. is a diversified sports manufacturing company that specializes in golf (Apollo and Unifiber golf shafts), cycling (Reynolds premium cycle tubing), and the manufacture of advanced composite materials used for sporting goods products. ELDER BEERMAN: Despite Losses Company Seeks Acquisitions -------------------------------------------------------- Elder Beerman Stores Corporation reports $157.2 million in revenue in the quarter ending May 1, 1999. Net loss for the period was $188,000. In the same quarter in 1998 revenue was $133.2 million with net loss of $436,000. In mid-year 1998, the company acquired Stone & Thomas for a purchase price of approximately $20.2 million in cash, subject to post-closing adjustments. Stone & Thomas operated 20 department stores located in West Virginia, Ohio, Kentucky, and Virginia under the name Stone & Thomas. As part of the company's acquisition of Stone & Thomas, a plan to exit certain activities resulted in the recording of liabilities for store closings, employee severance, lease buyouts, and other expenses. The company recorded an accrual of $6.8 million at the date of acquisition. The company has paid $3.9 million subsequent to the date of acquisition for these costs and the total amount accrued is expected to be paid by the end of the first half of 1999. Elder Beerman Stores indicates that it may, from time to time, consider acquisitions of department store assets and companies. Acquisition transactions, if any, are expected to be financed through a combination of cash on hand from operations, available borrowings under its credit facilities and the occasional possible issuance of long-term debt or other securities. Also, depending upon the conditions in the capital markets and other factors, the company says it will, from time to time, also consider the issuance of debt or other securities, or other possible capital market transactions, to refinance current indebtedness or for other corporate purposes. FLORIDA COAST: Noteholders Object to Postpetition Financing ----------------------------------------------------------- The Ad Hoc Committee of Noteholders of Florida Coast Paper Holding Company, LLC, et al. object to the debtors' motion for approval of a $500,000 DIP facility proposed by Stone Container Corporation. The Noteholders state that the motion should be denied because the facility is not sufficient to adequately preserve the debtor's paper pulp mill located in Port St. Joe, Florida, or to afford adequate protection to the Noteholders' interest in their collateral. The Noteholders say that the proceeds of the Stone DIP will be exhausted in fifteen days. The Noteholders propose a different credit facility with an initial credit facility of $2 million. The Noteholders' DIP is conditioned "only" upon the debtors' consent to termination of the exclusive periods. The mill has been closed since August, 1998 and the Noteholders claim that capital expenditures of between $30 and $40 million are required. In addition, a substantial workforce training program will be required. FORCENERGY: VECO Alaska's Notice of Lien ---------------------------------------- VECO Alaska, Inc. formerly VECO Construction, Inc. asserts an improvement lien on personal property against the Module, Forcenergy's Redoubt shoal exploratory drilling structures' living quarters for an unpaid balance of at least $1,542,229. GANTOS: Rescheduling Of Notes Gives Temporary Respite ----------------------------------------------------- As of May 1, 1999, Gantos Inc., a retailer of women's clothing, had $30.4 million in borrowings and $0.6 million in letters of credit outstanding under its loan and security agreements with Foothill Capital Corporation and Paragon Capital LLC, and approximately $3.0 million was available for borrowing under the Foothill/Paragon Facility. As of April 30, 1999 holders of approximately 96% in principal amount of the company's 12.75% notes issued under the Indenture, dated as of April 1, 1995, as amended, agreed to reschedule their portion of the principal payments on the notes underlying the Indenture. For holders of the remaining 4% in principal amount of notes, the payment schedule remains unaffected. The company and the Trustee under the Indenture are in the process of documenting an amendment to the indenture to reflect the new payment schedule. In exchange for such amendment to the payment schedule, the company issued the affected holders five-year warrants to purchase 475,000 of the company's common shares at an exercise price of $0.01 per share. The company has agreed to issue shares without transfer restrictions upon exercise of the warrants or to file a registration statement to register the resale of the common shares issuable upon exercise of those warrants. All stock warrants issued under this arrangement will be immediately vested and have a term of five years. The fair value of stock warrants issued, approximately $400,000, will be capitalized and will be charged to interest expense over the remaining term of the notes using the interest method. If the company's availability under the Foothill/Paragon Facility, trade credit or sales are lower than expected, or if the company's borrowing requirements or liquidity needs are higher than expected, the company could have insufficient liquidity to continue its current operation, its business, operations, liquidity, financial condition and results of operations could be materially adversely affected, and the company could be required to substantially reduce or discontinue its operations. In addition, there can be no assurance that the company will be able to meet the financial covenants under its borrowing arrangements for the next 12 months unless sales and trade credit substantially improve. Net sales for the thirteen weeks ended May 1, 1999 were approximately $40.8 million, an increase of approximately $1.7 million, or 4.4%, compared to net sales of approximately $39.1 million in the same period of the prior fiscal year. Losses, however, were registered at $142,000 for the 1999 period, and $745,000 in the 1998 period. GB PROPERTY: Plan Filed Will Impact Stock & Mortgage Notes Held --------------------------------------------------------------- On June 1, 1999, GB Property Funding Corp., GB Holdings, Inc., and Greate Bay Hotel & Casino, Inc., filed with the United States Bankruptcy Court for the District of New Jersey a plan of reorganization and disclosure statement. The plan calls for, among other things, the distribution to holders of first mortgage notes for the benefit of GBHC issued by GB Property Funding of $80 million, principal amount of new first mortgage notes and 100% of the new common stock of Holdings. The plan also provides that all of the outstanding common stock of Holdings, GB Property Funding and GBHC will be cancelled and that new common stock of GB Property Funding and GBHC will be issued to Holdings. There can be no assurance that the plan will be confirmed in its present form or that the transactions contemplated will actually be consummated. HARNISCHFEGER: Committee Chosen ------------------------------- Following a recess and private questioning with a handful of the candidates about their participation in the DIP Financing Facility and other parochial interests, Jack D. McLaughlin on behalf of the United States Trustee for Region III, announced that a single committee of creditors, with 9 members, will be appointed in the Debtors' chapter 11 cases. That committee will be comprised of the following creditors: * Conseco Capital Management, Inc. * First National Bank of Chicago * Georgia Pacific Corp. * HSBC Bank USA, as Indenture Trustee * IntelliGroup, Inc. * National Westminster Bank PLC * PNC Bank, N.A. * Rockwell International * United Steelworkers of America (Harnischfeger Bankruptcy News Issue 3; Bankruptcy Creditors' Service Inc.) HARNISCHFEGER: Court Authorizes Wilmington Firm ----------------------------------------------- The Debtors have sought and obtained the Court's authority to employ the Wilmington-based law firm of Young, Conaway, Stargatt & Taylor as local bankruptcy counsel. YCS&T proposes to charge the Debtors' estates $95 to $335 per hour for work performed by its attorneys and paraprofessionals. Specifically, YCS&T will: 1. provide legal advice with respect to its powers and duties as debtor in possession in the continued operation of its business and management of its properties 2. to prepare and pursue confirmation of a plan and approval of a disclosure statement 3. to prepare on behalf of the Debtors any necessary applications, motions, answers, orders, reports, and other legal papers 4. to appear in Court and to protect the interests of the Debtors before the Court 5. to perform all other legal services for the Debtors which may be necessary and proper in the proceeding YCS&T discloses that it received a retainer in connection with the bankruptcy planning, the preparation of initial documents, and the firm's proposed post-petition representation of the Debtors. A part of the payment has been applied to pre-petition balances and any remainder will constitute a general retainer as security for post-petition services and expenses. (Harnischfeger Bankruptcy News Issue 3; Bankruptcy Creditors' Service Inc.) IRIDIUM: Agreement To Purchase Claircom is Terminated ----------------------------------------------------- The Wall street Journal reports on June 23, 1999 that Iridium LLC said it has terminated a contract to purchase Claircom Communications Group, Inc., a provider of in-flight telephone services. Iridium said it was canceling the acquisition because it would not be consistent with current commercial priorities. LAMONTS APPAREL: Company's Financials Show Slight Improvement ------------------------------------------------------------- Lamonts Apparel, Inc., which operates 38 family apparel stores in five northwestern states, announced financial results for the first quarter ended May 1, 1999. Sales increased 4.5 percent over the first quarter last year on a comparable-store basis. Management attributed the gain in revenues to strong sales in the company's Alaska market and higher average inventory levels maintained across the chain. For the quarter ended May 1, 1999, Lamonts reported a net loss of $4.2 million on sales of $41.2 million compared with a net loss of $5.0 million on sales of $39.5 million for the same period last year. In other financial indicators for the first quarter ended May 1, 1999, Lamonts reported gross profit as a percent of sales of 34.3 percent compared with 30.1 percent for the first quarter last year. Operating and administrative expenses totaled 35.7 percent of sales for the quarter compared with 37.0 percent of sales last year. For the first quarter ended May 1, 1999, the company reported negative earnings before interest, taxes, depreciation and other non-cash adjustments of $0.6 million compared with negative $0.4 million for the first quarter last year. Lamonts Apparel, Inc. operates 38 family apparel stores in Alaska, Idaho, Oregon, Utah, and Washington. The company is well- known in the Northwest as a retailer of such brand name apparel as Alfred Dunner, Byer of California, Bugle Boy, Lee, Levi, Liz Claiborne, Nike, Ocean Pacific, OshKosh, Rafaella, Sag Harbor, and Woolrich. Lamonts is headquartered in Kirkland, Wash. in the greater Seattle area and employs approximately 1,500 people. LANDMARK FORWARDING: Seeks Reinstatement of Case ------------------------------------------------ The debtor, Landmark Forwarding, Companies, Inc. requests that the court re-instate its Chapter 11 bankruptcy case. The case was dismissed for failure to file a Disclosure statement and plan. The debtor filed its disclosure statement and plan on June 18, 1999. The plan provides for the payment in full of all creditors. LATTICE SEMICONDUCTOR: MFSC Ceases To Hold 5% Of Company's Stock ----------------------------------------------------------------- Lattice Semiconductor Corporation has filed a report with the SEC signifying that Massachusetts Financial Services Company, with 1,077,223 shares of Lattice Semiconductor common stock, has ceased to a beneficial owner of 5% or more of the company's common stock. The shares currently owned by Massachusetts Financial Services Company represent 4.6% of the outstanding shares of common stock of Lattice Semiconductor Corporation. LIVENT (US) INC: Deadline For Filing Proofs of Claim ---------------------------------------------------- A notice was published in the Wall Street Journal on June 23, 1999 providing that all creditors of the debtors are required to file on or before 5:00 PM New York time on July 21, 1999, a completed proof of claim form against any of the debtors. NU-KOTE: KPMG LLP Authorized As Accountants for Debtors ------------------------------------------------------- The US Bankruptcy Court for the Middle District of Tennessee, Nashville Division entered an order authorizing the debtors to hire KPMG LLP as accountants for the debtors. PAGE AMERICA: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Page America Group, Inc. C/o Barison Partners LLC One International Place Boston, Massachusetts 02110 The debtor owns all of the issued and outstanding stock of: Page America of New York, Inc. Page America of Pennsylvania, Inc. Adirondack Radio Telephone Co., Inc. Type of business: Provided Paging, messaging & information products and services Court: Southern District of New York Case No.: 99-10281 Filed: 06/16/99 Chapter: 11 Debtor's Counsel: Robin E. Keller Stroock & Stoock & Lavan LLP 180 Maiden Lane New York, NY 10038 Total Assets (Book Value): $12,442,452 Total Liabilities: $24,582,978 No. of Amount Holders ------ ------- Fixed, liquidated secured debt $24,273,136 4 Contingent secured debt $309,842 1 Disputed unsecured claims $0 2 Unliquidated unsecured debt $0 2 No. of shares of preferred stock 286,361 58 No. of shares of common stock 16,024,585 2057 20 Largest Unsecured Creditors: Name Nature Amount ---- ------ ------ Sandler Mezzanine Partners, LP 15% Subordinated Note 5,612,696 Sandler Mezzanine T-E Partners 15% Subordinated Note 2,516,937 Sandler Mezzanine Foreign Partners 15% Subordinated Note 1,206,188 Bowman & Co. 15% Subordinated note 14,937,315 NYC Commission on Human Rights Discrimination Lawsuit unknown NYS Dept. of Taxation & Finance NY State Utility Taxes unknown American Stock Transfer & Trust Indenture Trustee and stock transfer fees unknown PITTSBURGH PENGUINS: Fox Sports Net Pittsburgh Joins Lemieux -------------------------------------------------------------- Fox Sports Net Pittsburgh has made a deal with Mario Lemieux and his group of investors seeking to rescue the Pittsburgh Penguins from bankruptcy, The Pittsburgh Post-Gazette reported. Fox and SMG, the company that controls the Civic Arena, withdrew their own reorganization plan yesterday after Fox and Lemieux reached a deal. So tomorrow's bankruptcy hearing will address the two remaining plans: one by Lemieux and one by the National Hockey League (NHL). A bankruptcy attorney for Lemieux said, "It's not over yet," pointing out that Lemieux's group has not reached an agreement with SMG. One of the question marks in the bankruptcy case is an agreement with three insurance companies, which are owed $21 million by the team. Principal Life Insurance Co., Allstate Life Insurance Co. and TMG Life Insurance Co. voted against Lemieux's plan, but added an amendment to their ballot that if a deal could be reached by tomorrow that would change their votes. (ABI 23-June-99) PLUMA INC: Seeks To Employ Brokers ---------------------------------- The debtor, Pluma Inc. seeks court approval to employ Rives Brown, Inc. and Virginia Properties Inc. to list for sale 11.35 acres of real estate and buildings located in Henry County Virginia known as Beaver Creek. This property has been utilized by the debtor as corporate headquarters for its sales and management offices. The Listing Agreement provides an expiration date of October 25, 1999 and a listing price of $980,000, with a commission rate of 8% on listing price. QUALITECH STEEL: Response to Enron Trade Resources Corp. -------------------------------------------------------- The debtors, Qualitech Steel Corporation, and Qualitech Steel Holdings Corp. respond to the objection of Entron Trade Resources Corporation to the stipulated order reducing the exclusivity period. Enron states that the stipulation should be stricken because it was issued without notice to parties in interest. Enron also states that the order should be vacated because it disrupts the process of the order of the court approving auction procedures and "is inherently unfair to parties in interest such as Enron, who are barred from filing a plan of their own." The debtors state that Enron, as a bidder, was excluded from the designated group which could modify the bidding procedures "at any time." This exclusion was not objected to by Enron. The debtor states that it is entirely appropriate to exclude Enron, as a bidder, from the same designated group to whom exclusivity has been terminated so as to permit the filing of a plan. Enron has, according to the debtor, "fortunately elected to join the class of entities who seek to purchase the assets, while the parties to the stipulation continue to consider the alternative of a confirmable plan as a method of maximizing value to the estates' creditors, an overriding obligation of the debtors and Committee." Further, the debtor says that Enron is fully aware that the senior secured lenders have preserved their right to credit bid their senior lien position - clearing the field of all bidders. The debtor says that Enron has no expectations with regard to the process or outcome that requires the court to vacate the Stipulated Order. RENAISSANCE COSMETICS: Committee Taps Kronish Lieb Weiner --------------------------------------------------------- The Official Committee of Unsecured Creditors of Renaissance Cosmetics, Inc. et al. submits an application seeking approval to hire the firm of Kronish Lieb Weiner & Hellman LLP as its lead counsel. By separate application the Committee intends to apply for authority to retain Saul, Ewing, Remick & Saul as local counsel. RYMER FOODS: Company Doubts It Can Surmount Continuing Losses -------------------------------------------------------------- In the second quarter of 1999, Rymer Foods Inc. reported an increase in net sales from continuing operations as compared to the second quarter of 1998 of 47.9%, principally due, the company said, to expansion of its customer base and the acquisition of a complementary line of business. In fiscal 1998, the company reported a net loss from continuing operations of $2.0 million, the sixth loss from continuing operations in the last seven years, an improvement of $2.9 million from fiscal 1997. Historical operating losses raise substantial doubt about the company's ability to continue as a going concern. Revenues in the second quarter of 1999, ended May 1st, were $11,134,000 with net income of $137,000. In the same period of 1998 revenues were $7,530,000 and net income reached $549,000. SGSM ACQUISITION: Seeks Approval of Asset Purchase Agreement ------------------------------------------------------------ SGSM Acquisition Company, LLC, debtor, seeks court approval of an asset purchase agreement with Albertsons, Inc. for the debtor's leasehold interest in Store No. 2 located in Metairie, LA, Store No. 9 located in Chalmette, LA, Store No. 17 in Marrero, LA and the sale of the debtor's inventory. The purchaser agrees to pay $1.85 million purchase price plus the value of the inventory at cost. Overbids will be considered if they provide for at least $1,998,000 cash consideration. A break up fee of $55,500 is proposed for the purchaser in the event the debtor sells and assigns the property to another bidder. SGSM ACQUISITION: Seeks Approval Of Purchase Agreement ------------------------------------------------------ SGSM Acquisition Company LLC seeks an order approving the agreement for purchase and sale of a leasehold interest with Frank's Super Valu #3, purchaser for the debtor's leasehold interest in Store No. 44 located in LaPlace, LA. Under the agreement the debtor will receive $92,019 purchase price. TALK AMERICA: Final Order Approving Postpetition Financing ---------------------------------------------------------- The US Bankruptcy Court for the District of Maine entered an order granting authority for the debtor, Talk America Inc. to enter into post petition financing. The debtor is immediately authorized to borrow up to but not exceeding $750,000 and the debtor is authorized to use the loan proceeds under the loan document. TELEPAD CORP: Share Purchase Agreement -------------------------------------- L&E and Telepad entered into a Share Purchase Agreement in May, 1998. Telepad did not pay the amount due and owing on the note, despite repeated requests. The deficit now stands at approximately $667,000. L&E requests that the court hear its motion to compel Telepad to assume or reject the Share Purchase agreement at the same time as the hearing of an adversary proceeding against Telepad seeking a declaratory judgment that L&E had terminated the Share Purchase Agreement and that Christine LeMaire and Dean N. Eisenberger are the lawful and proper owners of all the shares of L&E. Telepad has stated that L&E is the debtor's principal asset generating the bulk of the debtor's sales and all of its profit. Pursuant to the Share Purchase Agreement Telepad was obligated to offer to L&E a capital investment of $330,000. Since this has not been done, and the debtor has not made any offer to pay the amount due under the note, L&E believes that Telepad will not honor any remaining obligations under the Share Purchase agreement. L&E states that its value as a going concern diminishes each day. L&E believes that unless the Share Purchase Agreement is either assumed or rejected, L&E will lose its current customers. By letter to the court, the debtor strenuously objects to a hearing on the Share Purchase Agreement the same day as the adversary proceeding. The debtors claim that resolution of the adversary proceeding may make the second hearing moot, and that they do not have the time to prepare for both for a hearing on June 29. WESTERN FIDELITY: Extension of Time to File Plan ------------------------------------------------ The US Bankruptcy Court for the district of Colorado entered an order extending the time for filing a fifth amended plan of reorganization and a fifth amended Disclosure Statement to July 9, 1999, and the hearing scheduled for June 21, 1999 for confirmation of the fourth amended plan is stricken. WIRELESS ONE: Debtor responds to Committee's Objection ------------------------------------------------------ The debtor, Wireless One, Inc. responds to an objection of the unofficial committee of noteholders to an order authorizing the debtor to enter into a commitment letter with Cerberus Capital Management LP and to incur a commitment fee and setting a schedule for consideration and approval of a new DIP financing with Cerberus. The debtor believes that the facility offered by Cerberus is more advantageous than both its current DIP facility and any other DIP facility previously discussed with the debtor. The debtor requests approval and authorization of its entry into a commitment letter describing the terms of the New DIP Facility proposed by Cerberus and the payment of associated fees, and the debtor requests an order setting a schedule for consideration of the New DIP facility. The modified Cerberus Commitment Letter commits Cerberus to provide the New DIP facility in the amount of approximately $36 million subject to certain conditions. The New DIP Facility will serve as exit financing which is an integral part of the debtor's efforts to confirm and consummate a plan of reorganization. WORLDWIDE DIRECT: Committee Objects To Appointment of Trustee -------------------------------------------------------------- The official Committee of Unsecured Creditors of Worldwide Direct Inc. et al. files a response and objection to the motion of Smartalk Action Group for appointment of a Trustee. The committee opposes the motion on the grounds that SAG's motion is both premature and the relief sought is not currently in the bet interest of the estates or its creditors. The appointment of a Trustee at this time would add another layer of costs and impede the Committee's efforts to move forward with a plan. ********** 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. 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