/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/990712.MBX T R O U B L E D C O M P A N Y R E P O R T E R Monday, July 12, 1999, Vol. 3, No. 131 Headlines AMPACE CORP: Committee Seeks To Terminate Exclusivity ANESTHESIA SOLUTIONS: Seeks Authorization to Employ Lazar Potter BRAZOS SPORTSWEAR: Sale Of Operating Units Completed CENTENNIAL COAL: Seeks Extension to Assume/Reject Leases CITYSCAPE FINANCIAL: Confirmation Order Issued June 10 COLUMBIA HCA: Debt Securities May, From Time To Time, Be Sold DANKA BUSINESS SYSTEMS: Announces Sale Of Its Facsimile Business FACTORY CARD: SEC Supports Equity Committee GRAND UNION: Annual Meeting Scheduled For August GREATE BAY HOTEL: Hearing on Disclosure Statement HARNISCHFEGER INDUSTRIES: Court Approves $750 Million Financing HECHINGER: Seeks Authority To Reject Certain Leases HOME HEALTH: Taps Deloitte & Touche as Accountants and Auditors IMAGYN MEDICAL: Asks Court To Set August 23 as Bar Date IMAGYN MEDICAL: Seeks Approval of Special Counsel INSILCO HOLDING: Smialek Steps Down, New Officers Named LEVITZ FURNITURE: Outline of Joint Plan of Reorganization LIVENT, INC: Court Approves SFX Entertainment's Acquisition LOEWEN: Announces New Director and New CFO MCA FINANCIAL: Order Extends Exclusivity NATIONSWAY: Prepares for Liquidation OXFORD HEALTH PLANS: Discontinues Medicare Plan In Suffolk County PARAGON TRADE: Extension of Maturity Date of Financing RUSSELL CAVE: Agreed Order Fixes Bar Date SGSM ACQUISITION: Schwegmann Creditors File Suit TECHMEDIA: Files For Bankruptcy TELEGROUP INC: Court OK's Extension To Assume/Reject Leases TELETRAC INC: Meeting of Creditors THE COSMETIC CENTER: Seeks Approval of Lease Cancellations WESTMORELAND COAL: Anticipates Additional Tender Offer XCL LTD: Apache China Petition "Ludicrous & Wasteful" ********** AMPACE CORP: Committee Seeks To Terminate Exclusivity ----------------------------------------------------- The Official Committee of Unsecured Creditors of Ampace Corporation and Ampace Freightlines, Inc. seeks an order terminating the exclusive period for the debtors to solicit acceptances of their plan and authorizing the Committee to file its own Chapter 11 plan and Disclosure Statement and to solicit acceptances of such plan. The Committee states that the lack of interest in the debtors' sale effort has not led to a purchaser. There is no commitment for the sale of the debtors' assets and it appears that no parties are interested in acquiring the debtors as a going concern. The debtors have not negotiated a plan with the Committee, but have filed a plan to which the Committee objects. The Committee requests that the court schedule a hearing on the Committee's Disclosure Statement on July 13, 1999 or alternatively, adjourning the debtor's' Disclosure Statement hearing. ANESTHESIA SOLUTIONS: Seeks Authorization to Employ Lazar Potter ---------------------------------------------------------------- The debtor, Anesthesia Solutions, Inc. is seeking an order of the US Bankruptcy Court for the Middle District of Pennsylvania authorizing the debtor to employ and retain Lazar Potter Giacovas and Kranjac, LLP to represent the debtor as special counsel in an action pending in the Supreme Court of Kings County, New York. The debtor is requesting authorization to pay the firm a $5,000 retainer. BRAZOS SPORTSWEAR: Sale Of Operating Units Completed ---------------------------------------------------- Brazos Sportswear Inc., having filed for Chapter 11 bankruptcy protection on January 21, 1999, in the U.S. Bankruptcy Court for the District of Delaware has announced the sale of substantially all of the assets of Morning Sun, Inc., a Washington corporation and wholly owned indirect subsidiary of Brazos. The announcement came on June 14, 1999. The purchaser, New Solarco, Inc., agreed to pay $13,138,728 in cash (less the amount of pre-petition cure amounts), subject to certain adjustments as set forth in the purchase agreement. Solarco also agreed to the assumption of the assumed liabilities and assumed contracts of Morning Sun. The closing of the transactions occurred on June 28, 1999. "The sale of Morning Sun -- combined with the sale of the Gulf Coast Sportswear and Red Oak Sportswear units during the past six weeks -- represents a major step in Brazos previously-announced plan to sell substantially all of the assets of its business units," said Brazos' Interim Chief Executive Officer Clayton Chambers. "Through these divestitures, we have made continued progress toward maximizing the recovery to our creditors while ensuring the ongoing futures of the various operating companies and their valued employees." Mr. Chambers said the proceeds of the Morning Sun sale, like those of the Gulf Coast and Red Oak sales, will be used to reduce the outstanding balance under Brazos' debtor-in-possession (DIP) loan facility. The sales were conducted through competitive bidding procedures under Section 363 of the U.S. Bankruptcy Code. Morning Sun, founded in 1986, designs, manufactures and markets screen-printed apparel distributed through better department stores, specialty stores and catalogs. Its Top Stitch brand provides a diversified line of embroidered women's sportswear. With the sale of the Morning Sun operations Brazos has completed the sales of its operating units. Brazos Sportswear, Inc. is expecting to complete the disposition of the remaining assets of its business units in the next 60 to 90 days. Brazos Sportswear, Inc., designs, produces and markets moderately priced sportswear. CENTENNIAL COAL: Seeks Extension to Assume/Reject Leases -------------------------------------------------------- The debtors, Centennial Coal, Inc., Centennial Resources, Inc., CR Mining Company and B-Four, Inc., seek a court order extending the period within which the debtors may assume or reject unexpired leases of nonresidential real property by seventy-five days, to and including October 4, 1999. The debtors are parties to in excess of 100 unexpired leases of nonresidential real property that relate to property constituting the core of the debtors' mining activities and coal reserves. The debtors are also parties to certain unexpired leases of nonresidential real property that relate to property used by the debtors for administrative offices, coal-site offices, storage and otherwise in furtherance of their mining activities. Without the mining Leases, the debtors could not operate their businesses and conduct their mining activities. The debtors' new executive management team is in the process of assessing the role and necessity of each of the leases. The debtors believe that the extension will afford their new executive management team sufficient time to intelligently assess each Mining Lease and Additional Lease ultimate value and usefulness to the debtors' operations. A hearing on the motion will be held on July 16, 1999. CITYSCAPE FINANCIAL: Confirmation Order Issued June 10 ------------------------------------------------------ On June 10, 1999 the US Bankruptcy Court for the Southern District of New York granted an order confirming the first amended joint plan of reorganization of Cityscapte Financial Corp., and Cityscape Corp., debtors. COLUMBIA HCA:Debt Securities May, From Time To Time, Be Sold ------------------------------------------------------------ Columbia HCA Healthcare Corporation has filed a registration statement with the Securities and Exchange Commission utilizing a "shelf " registration process. Under this shelf process, the company may, from time to time, sell the debt securities described in its prospectus in one or more offerings up to a total dollar amount of $1,500,000,000. Columbia HCA Healthcare will issue the debt securities in one or more series under an indenture dated December 16, 1993 between the company and The First National Bank of Chicago. The indenture describes the terms of the debt securities and does not limit the amount of debt securities or other unsecured, senior debt that may be issued. The debt securities will be unsecured and will rank equally with all of the company's other unsecured and unsubordinated indebtedness. The indenture limits Columbia's ability and that of its subsidiaries under certain circumstances to secure debt by mortgages on its principal properties, by entering into sale and lease-back transactions or by issuing subsidiary debt or preferred stock. In a liquidation or reorganization of any of its subsidiaries, the right of holders of the debt securities to participate in any distribution is subject to the prior claims of creditors of that subsidiary, except to the extent that the company is creditor. Columbia/HCA Healthcare Corporation is a holding company whose affiliates own and operate hospitals and related health care entities. The term "affiliates" includes direct and indirect subsidiaries and partnerships of the company and joint ventures in which its subsidiaries are partners. At May 31, 1999, these affiliates owned and operated 205 hospitals and 79 freestanding surgery centers and provided extensive outpatient and ancillary services. The company's affiliates are also partners in several 50/50 joint ventures that own and operate 20 hospitals and 5 freestanding surgery centers which are accounted for using the equity method. Its facilities are located in 24 states, England and Switzerland. DANKA BUSINESS SYSTEMS: Announces Sale Of Its Facsimile Business ---------------------------------------------------------------- Danka Business Systems PLC, on June 18, 1999, announced that the company signed a efinitive agreement to sell its facsimile division, Omnifax, to Xerox Corporation. Under the terms of the agreement, Danka will sell its facsimile business, including net tangible assets of approximately $30 million, for $45 million in cash. Also included in the sale are the EBS and dex Business Systems divisions of Omnifax. Larry K. Switzer, Danka's Chief Executive Officer, commented, "The sale of Omnifax is consistent with our strategic objective of concentrating resources on the transition from an analog environment to integrated digital services in our core business worldwide. Having a separate division solely dedicated to selling facsimile equipment does not fit well with that long-term strategy. With the sale of Omnifax, Danka is now repositioned as an integrated supplier of premier digital office equipment and services worldwide." Brian L. Merriman, Chief Operating Officer, noted, "We are pleased that under the agreement, we have the ability to continue to sell fax equipment from manufacturers of our choice and will do so as an extension of our core copier sales force. We believe we can realize operating efficiencies by integrating the sales and service of fax equipment into our current field organization. Our sales force now has the ability to sell copiers, fax equipment and multi-functional equipment to our customers." For the twelve months ended March 31, 1999, Omnifax and its divisions reported revenue of over $110 million and over $13 million in operating profit. Omnifax, headquartered in Austin, Texas, has offices throughout the United States and over 600 employees. The transaction is subject to regulatory approval in the United States, approval by Danka's Bank Group and consent from certain Omnifax customers and suppliers. 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 thirty countries around the world. FACTORY CARD: SEC Supports Equity Committee ------------------------------------------- By letter to the Office of the US Trustee, the US Securities and Exchange Commission support the appointment of an equity committee in the case of Factory Card Outlet, Corp. The SEC points out that public investors own approximately two-thirds of the outstanding common stock of the debtor. The debtor lists book equity of $51 million, and shareholder equity of about $24 million. All of the company's filings indicate that the debtor is not hopelessly insolvent and its business remains constant. The fact that most of the shares are held by institutional investors is signification in the at the SEC staff believes that this supports the appointment of an equity committee in that such holders are typically knowledgeable, sophisticated investors and have the resources to participate on a committee. GRAND UNION: Annual Meeting Scheduled For August -------------------------------------------------- The annual meeting of stockholders of The Grand Union Company will be held at the Sheraton Crossroads Hotel, One International Boulevard, Mahwah, New Jersey 07495, beginning at 10:00 a.m. on Thursday, August 19, 1999, for the following purposes: To elect the following eleven (11) nominees to serve as directors: J. Wayne Harris, Jack W. Partridge, Jr., Gary M. Philbin, Martin Bernstein, Thomas R. Cochill, Joseph Colonnetta, Jacob W. Doft, David M. Green, Joseph V. Lash, Anthony Petrillo PricewaterhouseCoopers LLP as independent accountants of the company for the fiscal year ending April 1, 2000; and to transact any other business which properly presents itself at the meeting. Only stockholders of record at the close of business on July 2, 1999, will be entitled to notice of and to vote at the meeting. Proxy solicitations have gone out to those stockholders. GREATE BAY HOTEL: Hearing on Disclosure Statement ------------------------------------------------- A hearing on the adequacy of the Disclosure Statement of Greate Bay Hotel and Casino, Inc. And its affiiates will take place before the Honorable Judith H. Wizmur, US Bankruptcy Court for the District of New Jersey on August 2, 1999 at 2:00 PM. HARNISCHFEGER INDUSTRIES: Court Approves $750 Million Financing --------------------------------------------------------------- Harnischfeger Industries Inc., Milwaukee, announced that the U.S. Bankruptcy Court for the District of Delaware has approved a $750 million credit facility for the company with Chase Manhattan Bank, according to a newswire report. CEO John Nils Hanson said the company now has "substantial funding in place, which should further reassure customers, suppliers and employees worldwide that we can continue providing industry-leading support to the mining equipment and pulp and paper machinery markets." (ABI 09- July-99) HECHINGER: Seeks Authority To Reject Certain Leases --------------------------------------------------- Hechinger Investment Company of Delaware, Inc., et al., debtors, seek court authority to reject certain nonresidential real property leases. The debtors have determined that teach of the leases is not necessary for their continued operations and do not warrant their continuing administrative costs. The e leases are each above market value, and therefore cannot be assumed and assigned to a third party for value. The leases cover property locations as follows: Portland, OR Countryside, IL Midland, TX Bolingbrook, IL Matteson, IL Joliet, IL Tinley Park, IL Elgin, IL Palatine IL Las Vegas, NV Akron, OH Lorain, OH Evanston, IL Canton, OH Oakwood Village, OH Fort Gratiot (Port Huron), MI Harrisburg, PA HOME HEALTH: Taps Deloitte & Touche as Accountants and Auditors --------------------------------------------------------------- The debtors, Home Health Corporation of America, Inc., et al. Seek authority to employ Deloitte & Touche LLP as independent accountants and auditors to perform certain other accounting services for the debtors. The services to be rendered by Deloitte are primarily in connection with the auditing and reporting on the debtors' annual financial statements for the year ending June 30, 1999. Deloitte will provide assistance in connection with certain consulting , tax and other services which Deloitte may choose to perform. Deloitte's fees for the audit of the June 30, 1999 financial statements will be $150,000 plus actual out-of-pocket expenses. Deloitte's fees for each quarter Deloitte reviews will e $10,0000 plus expenses. The additional service s will be billed on an hourly rate. The additional services may include: General accounting , consulting and advisory services; Procedures relating to the debtors' operating and financial procedures, including management reporting, billing and other procedures; Assisting the debtors in the formulation of a plan of reorganization, including, but not limited to, procedures relating to the debtors' leases, assets, and liabilities and assisting the debtors in the preparation of a disclosure statement; Assisting the debtors with tax advisory services and reorganization consulting services in connection with the debtors' plan of reorganization. IMAGYN MEDICAL: Asks Court To Set August 23 as Bar Date ------------------------------------------------------- The debtors, Imagyn Medical Technologies, Inc., et al., request that the US Bankruptcy Court for the District of Delaware enter an order establishing August 23, 1999 as the last day by which all creditors of the debtors must file a proof of claim in these Chapter 11 cases. IMAGYN MEDICAL: Seeks Approval of Special Counsel ------------------------------------------------- The debtors, Imagyn Medical Technologies, Inc., et al. Seek authorization to employ Knobbe, Martens, Olson & Bear as special intellectual property counsel regarding the prosecution of certain patent applications pending before the United States Patent & Trademark Office as well as numerous foreign patent offices with respect to the debtors' MicroSpan and MicroLap product lines. The firm will charge its standard hourly rates which range from $95 per hour to $370 per hour for its services. The debtors are also seeking authorization to employ Farella Braun and Martel, LLP of California as special insurance coverage counsel, with regard to insurance coverage issues related to pending shareholder and derivative litigation. The firm will be paid its current standard hourly rates which range from $75 per hour to $425 per hour. The debtors are seeking authorization to employ Howard & Howard as special intellectual property counsel regarding the prosecution of certain patent applications pending before the US Patent & Trademark Office and various foreign jurisdictions with respect to the debtors' articulating endoscopic stapler and DetachaPort trocar and seal system product lines. The firm will charge its current standard hourly rates which range from $120 per hour to $200 per hour. The debtors are seeking authorization to employ Fish & Neave as special intellectual property counsel. The firm will continue prosecution of a pending US patent application relating to methods and apparatus for bioelectrical impedance measurement of cardiac output and preparation and prosecution of such continuations, continuations-in-part, divisionals, or reissue applications as deemed by the debtors to be appropriate in securing patent protection for such inventions and oversight of prosecution of the same patent application pending before the European Patent office and the Japanese Patent Office. The debtors are seeking authorization to employ Burns, Doane, Swecker & Mathis, LLP as special intellectual property counsel regarding the prosecution of certain patent applications pending before the US Patent & Trademark Office as well as numerous foreign patent offices with respect to the debtors' SiteSelect, DetachaTip reposaable and traditional surgical instrument product lines. The firm will charge its current standard hourly rates which range from $190 per hour to $360 per hour. INSILCO HOLDING: Smialek Steps Down, New Officers Named ------------------------------------------------------- On JUNE 25, 1999, Insilco Holding Co. announced that as part of its corporate-wide initiative to focus resources at key business units it has decided to reduce the company's corporate office staff and accelerate its planned divestiture of certain non-core businesses. In connection with these initiatives, Robert L. Smialek, Chairman, President and CEO, is leaving the company to pursue other interests. John F. Fort III, an Insilco board member, has been named non- executive Chairman of the Board. Former CFO, David A. Kauer, has been appointed to the post of President and Chief Executive Officer. Michael R. Elia, Vice President and Corporate Controller will assume the duties of Chief Financial Officer. Mr. Fort, who joined Insilco's Board earlier this year, is the former Chairman of the Board and Chief Executive Officer of Tyco International, where he remains a director. He is a member of the DLJ Merchant Banking Advisory Group and is also a director of Roper Industries, Dover Corporation and Thermadyne Holdings Corp. Mr. Kauer joined Insilco in 1993 as Treasurer, was named Vice President in April, 1997 and Chief Financial Officer in May, 1998. Prior to joining Insilco, Mr. Kauer spent twelve years in a variety of management positions at Johnson Controls. Mr. Elia rejoined Insilco in 1998 and held senior financial positions with Insilco's Technologies Group from 1983 to 1994. Prior to rejoining Insilco, he was Chief Financial Officer of Jordan Telecommunication Products, Inc. and served as Division Vice President and Controller and as Director of Strategic Planning for Fieldcrest Cannon, Inc. Mr. Elia began his career with Ernst and Young LLP in 1981. Insilco CEO, David A. Kauer, said, "Insilco will continue with its long-term strategy of creating shareholder value by building on businesses where it has a sustainable competitive advantage, while divesting other non-core businesses to fund that growth and to decrease outstanding debt. During the past year, we have completed several complementary acquisitions in contract cable assembly and precision stamped parts and have a pending acquisition in the heat exchanger market. At this time, we are in discussions with potential acquirers of certain of our non-core business units. We are also moving ahead with our strategy to lower our operating costs and this corporate action is an example of that effort." Insilco Holding Co., based in suburban Columbus, Ohio, is a diversified manufacturer of industrial components and a supplier of specialty publications. The company's industrial business units serve the automotive, electronics, telecommunications and other industrial markets, and its publishing business serves the school yearbook market. It had revenues in 1998 of $535.6 million. LEVITZ FURNITURE: Outline of Joint Plan of Reorganization --------------------------------------------------------- The Debtors propose a Joint Plan of Reorganization providing for the substantive consolidation of their estates, revesting of all of the Debtors' assets into Reorganized Levitz and distribution of Cash to priority creditors, reinstatement of secured debts, and distribution of New Common Stock to satisfy and compromise creditors' claims. All of the Debtors' public bonds and equity securities will be cancelled. The Joint Plan groups creditors' claims into classes based on their rights against the Debtors and outlines the treatment of those claims: Description Amount Treatment Recovery Class of Claims of Claims of Claims Estimate ----- ----------- --------- --------- -------- N/A Administrative Unspecified Cash on the 100.0% Priority Claims Effective Date or as and when due N/A Priority Unspecified Deferred 100.0% Tax payments Claims through the 6th anniversary of the assessment date with 7% interest Description Amount Treatment Recovery Class of Claims of Claims of Claims Estimate ----- ----------- --------- --------- -------- Class 1 Claims (other Unspecified Cash on the 100.0% than Effective Date Administrative Claims and Priority Tax Claims) entitled to priority under 11 U.S.C. Sec. 507(a) Class 2 Set-Off Claims Unspecified Entitled to 100.0% asserted by full Set Off Creditors under Sec. 553 Class 3 Secured Claims Unspecified Reinstated 100.0% (other than Claims under the DIP Facility) Class 4 Small Unspecified Cash equal to 25.0% Unsecured 25% of the Claims (less Face Amount than $1,000) of such Claim on the Effective Date Class 5 General Unspecified Pro Rata Unstated Unsecured share of Claims 50,000,000 shares of New Common Stock Class 6 Subordinated Unspecified No recovery 0.0% Claims, including fines and penalties Class 7 Intercompany Unspecified No recovery 0.0% Claims Class 8 Equity N/A No recovery N/A Interests The Reorganized Debtor will be authorized to issue 75,000,000 shares of New Common Stock, of which 50,000,000 will be issued pursuant to the Joint Plan and distributed to Class 5 Creditors. No fractional shares will be issued, and all fractional shares will revert to the Reorganized Debtor. The Joint Plan requires Bondholders to tender their certificates to the appropriate Indenture Trustee or the Disbursing Agent before receiving their shares of New Common Stock. Further, Bondholders who do not tender their certificates within one year of the Effective Date will forfeit any distributions. The Debtors make it clear that, at present, they have no intention to register the New Common Stock being distributed to Class 5 Creditors under the Securities Act of 1933. All of the Debtors' claims and causes of action arising under Chapter 5 of the bankruptcy code or otherwise will vest in Reorganized Levitz pursuant to 11 U.S.C. Sec. 1123(b)(3). By default, all Executory Contracts and Unexpired Leases are deemed to be assumed by the Debtors as of the Effective Date unless specifically rejected. (Levitz Furniture Bankruptcy News; Bankruptcy Creditors' Services Inc. Issue 32) LIVENT, INC: Court Approves SFX Entertainment's Acquisition ----------------------------------------------------------- Livent Inc. announced that U.S. and Canadian bankruptcy courts yesterday approved the sale of substantially all of its assets to SFX Entertainment Inc. for approximately $115 million, after no other bidders came forward at auction this week, according to a newswire report. The assets include theaters in New York, Chicago and Toronto, as well as the rights to certain current and all future Livent productions. The approval of the sale clears the way for SFX to complete its acquisition subject to final bankruptcy court orders memorializing the courts' ruling and appropriate clearance from Canadian regulatory authorities. Livent filed for bankruptcy protection last fall. LOEWEN: Announces New Director and New CFO ------------------------------------------ The Loewen Group Inc. (NYSE,TSE,ME:LWN) announced the appointment of Paul A. Houston as a director of the Company. Mr. Houston joins the Board of Directors, filling the vacancy arising from the recent retirement of Thomas M. Taylor. The company also announced the appointment of Michael A. Cornelissen as Chief Financial Officer of the Company. MCA FINANCIAL: Order Extends Exclusivity ---------------------------------------- By Order of the US Bankruptcy Court, Eastern District of Michigan, Southern Division, the exclusive periods of the debtors, MCA Financial Corp. and its affiliates are extended. The exclusive period within which only the debtors may file plans of reorganization is extended to September 8, 1999, and the deadline for the debtors to obtain acceptance of the plan is extended to November 8, 1999. NATIONSWAY: Prepares for Liquidation ------------------------------------ NationsWay Transport Service Inc., a Colorado-based trucking company in bankruptcy, reported that it is in the process of securing a third-party liquidator to sell its assets at auction, according to attorney Don Gaffney, The Denver Post reported. The company filed schedules of assets and liabilities in Phoenix on Tuesday, where it filed for protection, listing assets for the firm and its affiliates at $104 million and liabilities at $103 million. Gaffney said these figures are based on accountants' estimates of the depreciated book value of the assets and don't necessarily reflect their market value. NationsWay filed chapter 11 on May 20, intending to liquidate. Some 4,000 employees nationwide were laid off in the process. (ABI 09-July-99) OXFORD HEALTH PLANS: Discontinues Medicare Plan In Suffolk County ----------------------------------------------------------------- Oxford Health Plans, Inc., on June 30, 1999, announced its Medicare plans for the year 2000. The Oxford Medicare AdvantageSM plan will be discontinued in Suffolk County, effective January 1, 2000. Oxford will remain in the 20 other counties in the tri- state area where it already provides benefits. Later this summer, Oxford will release benefit adjustments, following approval by the Health Care Financing Administration. Oxford, along with North Shore-Long Island Jewish Health System, determined that the current Medicare environment did not allow them to continue to offer the Oxford Medicare Advantage plan to eligible individuals in Suffolk County as an alternative to Medicare fee-for-service. Oxford Health Plan has indicated that over the next few months, Oxford and North Shore-Long Island Jewish Health System will work cooperatively to ensure that Oxford's Medicare members in Suffolk County are transitioned as smoothly as possible and providers are aware of all of these changes. "In an environment of decreasing federal reimbursement and increasing health care costs, Oxford and North Shore-Long Island Jewish Health System have been forced to make this difficult decision affecting members who reside in Suffolk County," said Peter Haytaian, corporate director, government programs at Oxford. Oxford's service area in year 2000 will consist of 20 counties in New York, New Jersey and Connecticut, currently providing coverage for more than 100,000 members or approximately 90 percent of its existing Medicare population. In New York, Oxford will continue to offer the Oxford Medicare Advantage Plan in six counties: Bronx, Kings, Nassau, New York, Queens and Richmond. In New Jersey, the plan will be offered in 13 counties: Bergen, Burlington, Camden, Essex, Hudson, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset and Union. In Connecticut, Oxford will continue to offer Oxford Medicare Advantage in New Haven County. Founded in 1984, Oxford Health Plans, Inc. provides health plans to employers in New York, New Jersey and Connecticut, through its sales force and through independent insurance agents and brokers. Oxford's services include traditional health maintenance organizations, point-of-service plans, third-party administration of employer-funded benefit plans and Medicare+Choice plans. PARAGON TRADE: Extension of Maturity Date of Financing ------------------------------------------------------ The US Bankruptcy Court for the Northern District of Georgia, Atlanta Division, entered an order extending the maturity date of the existing postpetition financing to March 26, 2000 and allowing the debtor to revise certain financial and reporting covenants. The debtor may make capital expenditures during each of the four fiscal quarters ending on the date listed below in an aggregate amount as listed. June 27, 1999 $44.55 million September 26, 1999 $45.124 million December 26, 1999 $44.433 million March 26, 2000 $46 million RUSSELL CAVE: Agreed Order Fixes Bar Date ----------------------------------------- The US Bankruptcy Court for the Eastern District of Kentucky, Lexington Division entered an order providing that creditors and parties in interest holding claims against or equity interests in the debtor, Russell Cave Company, Inc. f/k/a The J. Peterman Company arising prior to or existing as of January 25, 1999 must file a proof of claim or interest on or before August 16, 1999. SGSM ACQUISITION: Schwegmann Creditors File Suit ------------------------------------------------ The official committee of unsecured creditors of SGSM Acquisition Co, parent of Schwegmann Giant Super Markets, filed a complaint against the company's lenders seeking to avoid alleged preferential and fraudulent transfers. Supervalu Holdings Inc., a major creditor, joined the panel in filing the lawsuit. According to the complaint, one week before its bankruptcy filing Schwegmann's granted the defendant's security interests in 65 percent of its inventory and all of the company's bank accounts. These liens allegedly gave the defendants millions of dollars of additional collateral to secure existing claims approximating $85 million. "This transaction is clearly avoidable as a preference pursuant to . . . the Bankruptcy Code," the complaint states. The complaint further alleges that the bank group failed to perfect the pre-petition liens prior to Schwegmann's bankruptcy filing. "[T]he defendants filed their new financing statement just after the commencement of the debtor's bankruptcy case, and took other post-petition actions to attempt to perfect their new liens, without seeking or obtaining relief from the automatic stay," according to the complaint. In addition, the complaint seeks a determination of the extent, validity and priority of certain liens asserted by the defendants. (The Daily Bankruptcy Review Copyright c July 9, 1999) TECHMEDIA: Files For Bankruptcy ------------------------------- Battered by a $92 million court judgment, Techmedia Computer Systems and founder Andrew Park filed for bankruptcy this week. They filed under Chapter 7 of the U.S. Bankruptcy Code, which gives a court-appointed trustee the power to sell Park's and Techmedia's assets to pay creditors. "They filed the (Chapter) 7 simply to preserve what they could for the creditors as a whole," said Techmedia's bankruptcy attorney, Martin Taylor. It's not yet clear how much Park, Techmedia and three other Park- controlled companies owe. But "the trigger, obviously, was the judgment coming down," Taylor said. Two years ago, Techmedia was a fast-growing maker of "white boxes," personal computers sold below the prices charged by name-brand PC makers. It had 250 employees and 1997 revenues of about $160 million. But eroding PC prices and a courtroom fight with its South Korean supplier sent Techmedia reeling. Techmedia sued computer equipment manufacturer Tae Il Media Co. Ltd. in 1997, alleging the supplier had failed to protect it against falling computer component prices. Tae Il countersued, claiming Techmedia failed to pay $136 million for products shipped between 1994 and 1997. In May 1998, a few weeks before Park was named a finalist for the Orange County Entrepreneur of the Year, the company laid off half its employees. Last month, an Orange County Superior Court jury sided with Tae Il. The judge ordered Techmedia's headquarters in Garden Grove and Park's mansion in Laguna Niguel sold to pay the Tae Il judgment. Taylor said the headquarters is probably worth $5 million to $5.5 million after paying down the mortgage. The mansion is worth $3 million to $4 million. "We think if it's sold, it should be sold for the benefit of all the creditors, not just Tae Il," Taylor said. TELEGROUP INC: Court OK's Extension To Assume/Reject Leases ----------------------------------------------------------- The US Bankruptcy Court for the District of New Jersey entered an order extending the time to assume/reject executory contracts and unexpired leases of non-residential real property to August 31, 1999. TELETRAC INC: Meeting of Creditors ---------------------------------- A Chapter 11 Bankruptcy Case was filed in the US Bankruptcy Court District of Delaware on June 9, 1999 In re: Teletrac, Inc. Attorney for the debtor is Norman L. Pernick 222 Delaware Avenue, Suite 1200, Wilmington, Delaware 19899. A meeting of creditors is set for July 30, 1999 at 1:00 PM, 844 King Street, Room 2313 Wilmington, Delaware. A hearing shall be held before the Honorable Mary F. Walrath, US Bankruptcy Judge on August 5, 1999 to consider an order approving the Disclosure statement of the debtor. Objections must be filed so as to be received on or before July 30, 1999 at 4:00 PM. THE COSMETIC CENTER: Seeks Approval of Lease Cancellations ---------------------------------------------------------- The debtor, The Cosmetic Center, Inc. Seeks court approval of the cancellation agreements between the debtor and its Landlords, Chelsea GCA Realty Partnership, Great Mall of the Bay Area Associates, LP and KPT Remic Loan, LLC. The leases cover stores at the following locations: Dawsonville, Georgia; Camarillo, California; Central Valley, New York; Napa, California; Aurora, Ohio; Flemington, New Jersey; Folsom, California; Milpitas, California; Petaluma, California; Kittery, Maine. WESTMORELAND COAL: Anticipates Additional Tender Offer ------------------------------------------------------ Westmoreland Coal Co. announced on July 1, 1999 that it expects to conduct an additional tender offer at $19 per depositary share for approximately 600,000 shares, the amount by which its tender offer earlier this year was oversubscribed. That tender offer was conducted in accordance with a settlement agreement entered into with the Official Committee of Equity Security Holders, the United Mine Workers of America, and certain UMWA health benefit and pension plans that facilitated Westmoreland's dismissal from Chapter 11, but which limited the tender offer to $20 million (or 1,052,631 shares at $19 per share) and prohibited further distributions of any kind to shareholders through June 30, 1999. Each depositary share represents one quarter of a share of the company's Series A Convertible Exchangeable Preferred Stock. The schedule and details of the tender offer have not been finalized, but Westmoreland says it is its intention to commence the tender offer as soon as practicable. On June 30, the depositary shares closed at $18-1/4 per share. The Westmoreland Board indicates that it considers resolution of issues related to future preferred stock dividends and accumulated but unpaid preferred dividends a priority in the continued revitalization of the company. The oversubscription of the earlier tender offer indicates that depositary shareholders wished to tender a significant number of additional shares under the terms of that offer. The company says it wants to accommodate this demand and believes that doing so benefits its other shareholders by reducing the overhang of existing accumulated but unpaid preferred dividends and future quarterly dividends on an attractive economic basis. Westmoreland's Board intends to continue to review the payment of preferred dividends and accumulated but unpaid preferred dividends as it evaluates the business opportunities available to the company. The Board's has as its highest priority increasing value for all shareholders. In light of these considerations, the additional tender offer is the only action the company intends to take with respect to preferred dividends and accumulated but unpaid preferred dividends at this time. It appears that in the near term most other available cash should be used for reinvestment rather than distributed in order to enhance the long-term value of the company for all shareholders and maintain compliance with the Master Agreement. The tender offer will be in lieu of the resumption of preferred dividends or payment of accumulated but unpaid preferred dividends at this time. The company is subject to continuing financial ratio tests, the payment of retiree health benefits and other obligations pursuant to the Master Agreement as well as to provisions of Delaware law applicable to a corporation's payment of dividends. Its obligations under the Master Agreement are secured by a declining balance contingent note through 2005 under the terms of that agreement. Westmoreland Coal Company, headquartered in Colorado Springs, Colorado, emerged from Chapter 11 on January 4, 1999 satisfying all debt obligations with interest and with its shareholders' interests undiluted. The company is currently engaged in western coal mining through its 80% owned subsidiary Westmoreland Resources, Inc. and independent power production through its wholly-owned subsidiary Westmoreland Energy, Inc. The company also holds a 20% interest in Dominion Terminal Associates, a coal shipping and terminal facility in Newport News, Virginia. XCL LTD: Apache China Petition "Ludicrous & Wasteful" ----------------------------------------------------------------- On June 29, 1999, XCL Ltd. issued a press release announcing that it received a petition filed with the United States Bankruptcy Court in Opelousas, La. by Apache China LDC, a wholly owned subsidiary of Apache Corporation. Apache asks the court to place XCL's wholly owned subsidiary, XCL-China Ltd., under bankruptcy protection, claiming XCL-China has not paid a $10 million debt related to the companies' joint venture in the People's Republic of China. Through their wholly owned subsidiaries, XCL and Apache each own a 50 percent interest in the 49 percent Foreign Contractor's share of the Zhao Dong Block, east of Beijing in the Bohai Bay. China National Oil and Gas Exploration and Development Corporation owns the remaining 51 percent share. "Apache's petition is baseless, and we will immediately contest the filing," said Marsden W. Miller, XCL chairman and chief executive officer. "The petition is ludicrous and wasteful. The money in question is money that XCL doesn't owe Apache to begin with. We're disappointed in Apache's actions but, unfortunately, not surprised. This is just another example of Apache's bullying tactics, foot-dragging and private agenda that have kept XCL's discoveries in the Zhao Dong Block from being developed in a timely manner. We would be producing oil now if Apache had spent half as much effort acting as a prudent operator as it is now in taking these actions." On June 28, 1999, XCL announced that it was seeking the removal of Apache China LDC as operator of the project. Grounds for Apache's removal include delays in developing the C/D Field on the Zhao Dong Block, failure to properly manage project costs and delays in exploration drilling. In a separate action, XCL has initiated a $17 million arbitration proceeding against Apache for unauthorized and wasteful spending. XCL is also seeking a refund of $7.2 million for amounts previously overpaid to Apache. "We are proceeding with our plans to remove Apache as operator and recoup our share of its excessive and unauthorized spending," said Miller. "This latest move by Apache reinforces that we are doing the right thing for our shareholders, bondholders and Chinese partners." ********** 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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