/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/990806.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, August 5, 1999, Vol. 3, No. 151 Headlines AZTECH NEW MEDIA: Granted Reorganization Plan Filing Extension BRUNO'S: Seeks Permission To Sell Homewood, Alabama Property CALDOR: Sued for $26M By Liquidators CONTIFINANCIAL CORP: June/July Bring Changes In Senior Management CONXUS COMMUNICATIONS: MCI Worldcom Seeks To Terminate Services COSTILLA ENERGY: Involuntary Sale By Stockholder/ 15.6% Ownership DAILEY INTERNATIONAL: Seeks Extension to Assume/Reject Leases FPA MEDICAL: Bahadur Resigns as Trustee FULCRUM DIRECT: Order Extends Exclusivity HECHINGER: Taps Ernst & Young as Consultants IMAGYN MEDICAL: Court Grants Additional Financing IRIDIUM: Chase Manhattan Wants Motorola to Guarantee $300 LESLIE FAY: Increase in Net Sales LEVEL ONE COMMUNICATIONS: Farallon Partners Purchase Shares LIBERTY HOUSE: Rescheduling of Hearing on Disclosure Statement PHILIP SERVICES: Order Authorizes Surety Bonds and Indemnity PRIMARY HEALTH SYSTEMS: Interim Order For Amended DIP READING CHINA: Order Approves Sale of Property RECYCLING INDUSTRIES: Applies For Approval of Sale of Assets RECYCLING INDUSTRIES: Seeks Extension to Assume/Reject Leases RECYCLING INDUSTRIES: Seeks To Reject Contract With COO SA TELECOMMUNICATIONS: DIP Reports For April/May TEXAS HEALTH ENTERPRISES: Files Chapter 11 THORN APPLE: Order Amends DIP Financing Order TOROTEL INC: Notifies That Filing For Fiscal Year Will Be Late TRANSTEXAS GAS: Committee Seeks To File Adversary Proceeding USCI INC: Loss Of RadioShack Account Continues To Drain Company WTD INDUSTRIES: Experiencing Net Losses/Lacks Credit Facility DLS CAPITAL PARTNERS: Bond Pricing for Week of August 2, 1999 ********** AZTECH NEW MEDIA: Granted Reorganization Plan Filing Extension -------------------------------------------------------------- Toronto-based Aztech New Media Corp., which publishes consumer entertainment and game software as well as compilations of third- party software, announced it has received an extension of September 14 to file a proposed restructuring plan, according to a newswire report. After experiencing difficulties with cash flow and obtaining additional financing, Aztech originally filed a notice of intent to file a restructuring proposal on June 30. "We are grateful that we have received an extension to file a new restructuring plan," said Aztech President William A. Nicholls. "We believe the additional time will allow the company to move forward with its business and attempt to regain the sales momentum experienced in the past several years."(ABI 05-Aug-99) BRUNO'S: Seeks Permission To Sell Homewood, Alabama Property ------------------------------------------------------------ The Debtors move the Court for permission to sell a 7.4 acre tract of land and a 76,000 square-foot building located at 100 Greensprings Highway in Homewood, Alabama, to Compass Bank for $2,250,000. Until 1995, the Debtors operated a FoodMax Store on the property. Deteriorating performance necessitated closing that Store. Since 1995, Graham and Company has marketed the property to some 200 strategic purchasers. The debtors are convinced that the Compass offer is the highest and best they'll see. By this Motion, the Debtors ask Judge Robinson for authority to (i) consummate the sale pursuant to a Purchase and Sale Contract dated June 18, 1999, with Compass and (ii) pay a 5% brokerage fee from the proceeds of the sale. CALDOR: Sued for $26M By Liquidators ------------------------------------ Responsive Database Services, Inc. reported on July 23, 1999 that Caledor was sued for $26 million by its liquidation charging that the company deliberately miscalculated the value of its inventory. The three liquidators who conducted the Caldor Corp. going-out- of-business sale on Monday filed a $26 million lawsuit against the defunct retailer seeking a return of excess funds they paid to win the GOB contract. The suit was filed in Manhattan Bankruptcy Court by The Ozer Group, Gordon Brothers Retail Partners and Schottenstein/Bernstein Capital Group. The three plaintiffs, who paid $233.7 million to win the contract, estimated an inventory valuation of $190.2 million. However, that contract provided for inventory adjustments and refunds in case the final valuation was less than the estimated amount. After final inventory reports were available, a dispute arose over Caldor's inventory valuation of $178.2 million versus the liquidators' much lower valuation of $154.2 million. In addition to the $24 million difference between the two valuations, the liquidators are seeking an additional $2 million for incidental expenses connected to the going-out-of-business plan. CONTIFINANCIAL CORP: June/July Bring Changes In Senior Management ----------------------------------------------------------------- Several changes in the senior management and the Board of Directors of Contifinancial Corporation have occurred since the end of fiscal year 1999. In June 1999, Daniel J. Willett resigned his position as Senior Vice President and Chief Financial Officer; Mr. Willett was replaced by Frank W. Baier, who now holds the titles of Senior Vice President, Chief Financial Officer and Treasurer. James E. Moore resigned as President, Chief Executive Officer and a Director of the company in July 1999; Mr. Moore was replaced by Alan H. Fishman, who now holds those titles. James J. Bigham resigned as Chairman of the Board of Directors in July 1999; he was replaced by Mark R. Baker. CONXUS COMMUNICATIONS: MCI Worldcom Seeks To Terminate Services --------------------------------------------------------------- MCI Worldcom and its affiliates ("the Service Providers") seek an order permitting the termination of the provision of telecommunications services and the related services agreements. The Service Providers say that their exposure increases by approximately $6,700 per day or $200,000 per month. They claim that they are entitled to adequate assurances which they have not received. The debtors are continuing to operate at a loss, and since they are not able to provide adequate assurance, the Service Providers are entitled to terminate the provision of telecommunication services to the debtors, and the related agreements. COSTILLA ENERGY: Involuntary Sale By Stockholder/ 15.6% Ownership ----------------------------------------------------------------- At the end of June 30, 1999, Cadell S. Liedtke beneficially owned 2,202,460 shares of common stock, constituting 15.6%, of the total issued and outstanding shares of common stock (14,101,580 shares) of Costilla Energy Inc. The changes in the percentage of beneficial ownership are the result of shares which have been involuntarily sold by Mr Liedtke under financing arrangements with Prudential. Mr. Liedtke has the sole power to vote and to dispose of all of the shares of common stock mentioned except for 60,000 shares held by the Liedtke Foundation. Mr. Liedtke is a director of the Liedtke Foundation and shares voting and dispositive power over the shares of common stock owned by the Liedtke Foundation with the other directors of the Liedtke Foundation. Mr. Liedtke, during May and June, sold over 500,000 shares of common stock of Costilla Energy, each of which was an involuntary sale transaction effected by Prudential under the financing arrangements mentioned above. Each of the sales was transacted through a broker on the public market. DAILEY INTERNATIONAL: Seeks Extension to Assume/Reject Leases ------------------------------------------------------------- The debtors, Dailey International Inc., et al. seek an order extending the time within which the debtors must assume or reject unexpired leases of nonresidential real property to October 1, 1999. A hearing will be held on August 19, 1999. The debtors are party to agreements involving real property in the course of their downhole products and services and under- balanced drilling services businesses. The debtors view their interests in the agreements and their rights thereunder as very valuable property rights. Because of the nature of their cases and the pending proposed plan, the debtors need additional time to consider which leases to assume or reject. The debtors believe that the estates and creditors would be better served if any disputes were addressed in connection with confirmation of the plan. FPA MEDICAL: Bahadur Resigns as Trustee --------------------------------------- Due to pressing responsibilities and conflicting work schedules, the designated Trustee, B.N. Bahadur has tendered his resignation from his appointment as Trustee of the FPA Creditor Trust. Joseph A. Pardo has been designated as successor trustee by the Trust Advisory Board, effective July 20, 1999. FULCRUM DIRECT: Order Extends Exclusivity ----------------------------------------- By order of the court dated July 23, 1999, the debtors, Fulcrum Direct, Inc. are granted an extension of the exclusive period within which Fulcrum may file a plan or plans of liquidation through and including September 30, 1999 and the debtors are granted an extension of the exclusive period within which the debtors may solicit acceptances of any such plan through and including November 30, 1999. HECHINGER: Taps Ernst & Young as Consultants -------------------------------------------- The debtors, Hechinger Investment Company of Delaware, Inc. et al. seeks authority to retain and employ Ernst & Young LLP as the debtors' consultants for the limited purpose of assisting the debtors in the implementation of a "Year 2000 Readiness Program" and a JDA software system package. Compensation will be payable to E&Y on an hourly basis ranging from $451-502 for a partner, $315 to $442 for a director/senior manager, $238 to $298 for a manager, $162-$221 for a senior consultant, and $132-$145 for staff. IMAGYN MEDICAL: Court Grants Additional Financing ------------------------------------------------- The court entered an order on July 20, 1999 granting Imagyn Medical Technologies, Inc., et al. additional secured postpetition financing on a superpriority basis; use of cash collateral, adequate protection and scheduled a final hearing for August 12, 1999. The additional post-petition financing shall increase by $4 million. IRIDIUM: Chase Manhattan Wants Motorola to Guarantee $300 Million ----------------------------------------------------------------- Post-Newsweek Business Information, Inc. (Newsbytes) reports on August 4, 1999 that Chase Manhattan has said it wants Motorola [NYSE:MOT] to guarantee $300 million of its $800 million to Iridium. In a filing made this week with the Securities and Exchange Commission, Iridium notes that Chase Manhattan sent the company a letter on July 29 stating that a default on a credit agreement between Iridium and a Chase-led consortium has taken place. Newsbytes understands that the letter said that Iridium is now "required to demand that Motorola provide a guarantee of $300 million of Iridium's borrowings under the secured credit agreement and that Iridium has failed to make such a demand on a timely basis." The letter also reportedly says that Iridium would also be in default of its $750 million credit agreement guaranteed by Motorola, if an initial default occurred. In the SEC filing, however, Motorola noted that there has been no triggering of a default under the credit agreement, so no guarantee requirement condition has arisen. The bad news doesn't stop with these issues, however, as Newsbytes notes that if Chase's request for a guarantee is valid, then Iridium is technically in default of $1.45 billion in senior loan notes. Iridium officials were not available for comment, with the press office on answerphone. However, reports on CNN suggest that the company refutes any suggestion that a trigger condition has taken place, and that all agreements are in place until August 11. As reported previously by Newsbytes, after lurching from one problem to another this year, the satellite phone operator slashed its handset pricing by up to 75 percent, as well as more than halving its call rates from the beginning of July. This action was taken because of Iridium's continuing failure to reach its subscriber sales targets. August 11 is now the next "D- Day" for the company, at which stage it must reach 27,000 subscribers - a level that the firm was originally targeted to reach in March. During late July, Leo Mondale, Iridium's chief financial officer, said that filing for bankruptcy court protection isn't a realistic option . Reports have also suggested that Motorola is prepared to sink $400 million into the operation - enough to maintain the firm's major marketing momentum - providing around $1.5 billion of Iridium's bonds are surrendered in return for a 25 percent stake in the satellite operator. This move may be enough to turn Iridium from a lame duck into a realistic proposition. It would also increase Motorola's stake in the operation to some 40 percent, Newsbytes notes. LESLIE FAY: Increase in Net Sales ---------------------------------- The Leslie Fay Company, Inc. (Nasdaq: LFAY) reported today a 34.1% increase in net sales to $38.5 million for its second quarter ended July 3, 1999, from $28.7 million for its second quarter ended July 4, 1998. Gross profit margin of 25.6% for the first quarter of 1999 compared with 26.1% for the year-ago quarter. Excluding the operations of Warren Apparel Group acquired on October 27, 1998, Leslie Fay's net sales for the second quarter of 1999 increased 0.9% to $28.9 million from $28.7 million for the year ago period, and the gross profit margin was 22.8%. Leslie Fay's net income for the second quarter of 1999 decreased to $968,000, or $.16 per basic share and $0.15 per diluted share, from net income of $1.4 million, or $0.20 per basic share and $0.19 per diluted share, for the year-ago quarter. Excluding $534,000 in Other Expenses in the second quarter of 1999 in connection with its pending merger agreement -- equal after taxes to $0.05 per basic and diluted share, income per basic share grew $0.01, or 5 percent. The company said it expects a similar charge next quarter in connection with the pending merger agreement. "Our performance for the second quarter, seasonally one of our weakest, met our overall expectation despite mixed results for our core Leslie Fay lines," John J. Pomerantz, Leslie Fay's chairman and CEO, said in making the announcement. "We are tracking as planned through the first half to substantially improve sales, gross margin and EBITDA for the full year." He added: "Warren Group's career, evening and social occasion dresses continued to better our expectation in terms of revenue growth and gross margin; and, with the start of the spring season, we have begun seeing improved margins at Warren as a result of our strategy for this newly acquired business. "In our Leslie Fay dress line, we saw improvements in sales revenue, especially for large sizes," he added. "But we also experienced some weakening in gross margin due to higher markdowns to clear out seasonal inventory. "In our career sportswear group, a 16.2 percent decline in sales revenue for the second quarter from the year-ago second quarter resulted from the timing of shipments, with more product being shipped in the first quarter than in the second quarter of 1999 by comparison with the first two quarters of 1998. Total sportswear sales for first half 1999 were up 7.9%. Results included the impact of markdowns to move current inventory. "Our higher operating expenses, reflecting the addition of Warren, were in keeping with our expectation. Our trailing 12- month EBITDA through the second quarter of 1999 grew to $12.0 million, or 6.7% of trailing sales, from $9.1 million, or 6.4% of trailing sales, for the comparable pro forma 12-month, year-ago period -- up 31.9%. We remain on target in executing our business growth strategy, which calls for revenue growth from $132 million in 1997 to over $215 million by the end of 2000--a three-year compound annual growth rate of 17.5%." The company's EBITDA for its second quarter of 1999 was $1.2 million, or $73,000 below that for the year-ago quarter. The company defines EBITDA as operating income before interest, taxes, depreciation, amortization, stock-based compensation, and amortization of excess revalued net assets over equity. Leslie Fay's results for the second quarter for 1999 and 1998 each include a $1.1 million offset to operating expenses, representing the amortized portion of the amount by which revalued net assets exceeded stockholder equity on June 4, 1997, the date the company emerged from bankruptcy. This positive, non cash offset to expenses amounted to $0.18 per diluted share, for the 1999 period and to $0.16 per diluted share, for the 1998 period. Leslie Fay's balance sheet at the end of its second quarter of 1999 included $417,000 in total debt, working capital of $37.3 million, and stockholders' equity of $42.7 million, up from year- end 1998 stockholders' equity of $36.4 million. For the first half of fiscal 1999, Leslie Fay's net sales increased 34.7% to $99.6 million from $73.9 million for the first half of fiscal 1998. Gross profit margin of 26.6% for the first half of 1999 compared with 26.4% for the year-ago half. Excluding the operations of Warren Apparel Group, Leslie Fay's net sales for the first half of 1999 increased 7.5% to $79.5 million from $73.9 million for the year ago period, and the gross profit margin for first-half 1999 was 25.2%. Leslie Fay's net income for the first half of 1999 increased to $5.2 million, or $.87 per basic share and $0.84 per diluted share, from net income of $5.1 million, or $0.76 per basic share and $0.72 per diluted share, for the year-ago quarter. Excluding $534,000 in Other Expenses in connection with its pending merger agreement -- equal after taxes to $0.05 per basic and diluted share, income per basic share was $0.92 and income per diluted share was $0.89. The company's EBITDA for its first half of 1999 grew 22.7% to $7.9 million from $6.4 million for the year-ago half. Leslie Fay also announced today that, in connection with its pending merger with two private investment funds advised by Three Cities Research, Inc., proxy materials have been released for mailing, and the annual shareholder meeting at which a vote on the merger will occur, has been set for August 24. If the merger were approved, the cash exchange would be completed in early September. In May 1999, Leslie Fay announced the merger agreement, subject to stockholder approval. The agreement contains a shareholder cash election provision. Under the agreement, the Three Cities Research funds may be able to acquire up to 1,111,966 additional shares and Leslie Fay may be able to acquire up to 1,000,000 shares of the approximately six million Leslie Fay shares outstanding. Leslie Fay would be the surviving corporation in the merger and remain a public company. LEVEL ONE COMMUNICATIONS: Farallon Partners Purchase Shares ----------------------------------------------------------- Farallon Capital Partners, for the partnerships and managed accounts together, hold an aggregate of 2,472,600 shares of the common stock of Level One Communications Inc. This amount represents 6.3% of the class of securities currently outstanding. Below is listed the beneficial ownership secured by the number of shares owned, each entity shares voting and dispositive power over the individual amounts shown. Farallon Capital Partners, L.P. 611,400 shares 1.6% Farallon Capital Institutional Partners, L.P. 527,200 1.3% Farallon Capital Institutional Partners II, L.P.119,600 0.3% Farallon Capital Institutional Partners III, L.P.158,300 0.4% Tinicum Partners, L.P. 34,300 0.1% Farallon Capital (CP) Investors, L.P.42,900 0.1% Farallon Capital Management, L.L.C. 978,900 2.5% Farallon Partners, L.L.C. 1,493,700 3.8% Enrique H. Boilini 2,472,600 6.3% David I. Cohen 2,472,600 6.3% Joseph F. Downes 2,472,600 6.3% William F. Duhamel 2,472,600 6.3% Fleur E. Fairman 1,493,700 3.8% Jason M. Fish 2,472,600 6.3% Andrew B. Fremder 2,472,600 6.3% Richard B. Fried 2,472,600 6.3% William F. Mellin 2,472,600 6.3% Stephen L. Millham 2,472,600 6.3% Meridee A. Moore 2,472,600 6.3% Thomas F. Steyer 2,472,600 6.3% The net investment cost (including commissions) for the shares held by each of the Partnerships and Managed Accounts is set forth below: Entity Shares Held Approximate Net Investment Cost ------ ----------- --------------------------------- FCP 611,400 $31,167,618.70 FCIP 527,200 $27,117,720.22 FCIP II 119,600 $6,106,911.25 FCIP III 158,300 $8,153,194.47 Tinicum 34,300 $1,759,276.05 FCCP 42,900 $2,192,338.99 Managed Accounts 978,900 $49,764,818.32 The purpose of the acquisition of the shares is for investment, and the acquisitions of the shares by each of the Partnerships and the Managed Accounts were made in the ordinary course of business and were not made for the purpose of acquiring control of the company according to the entities. LIBERTY HOUSE: Rescheduling of Hearing on Disclosure Statement -------------------------------------------------------------- the hearing date for the disclosure statement is now rescheduled to be heard on September 17, 1999, 10:00 AM, US Bankruptcy Court, District of Hawaii, First Hawaiian Tower, 1322 Bishop Street, Suite 350L, Honolulu Hawaii 96813. PHILIP SERVICES: Order Authorizes Surety Bonds and Indemnity ------------------------------------------------------------ On July 27, 1999, the Honorable Mary F. Walrath granted an order authorizing the debtors and the Canadian entities to execute and deliver the Inter-Creditor Agreements between the Canadian Imperial Bank of Commerce and London Guarantee Insurance Company on behalf of itself and other Surety Participants and the post- petition indemnity agreement. The surety may from time to time issue bid bonds, performance bonds, labour and material payment bonds, lien bonds, release of holdback bonds, undertakings and other writings obligatory in the nature of a bond on behalf of a debtor in respect of the obligations of such debtor under contracts entered into by such debtor. The debtor and the surety will enter into certain indemnity agreements pursuant to which a debtor is obliged to indemnify the surety in full for any loss or damages that the surety may suffer arising from the issue of one or more bonds for the benefit of such debtor and pursuant to which such debtor will grant a security interest in individual bonded contracts, receivables and assets. PRIMARY HEALTH SYSTEMS: Interim Order For Amended DIP ----------------------------------------------------- On July 28, 1999 the US Bankruptcy Court for the District of Delaware entered an interim order granting the debtors authorization to enter into a first amendment and related loan documents, and to consummate any and all transactions contemplated. The debtors are authorized to obtain additional postpetition financing pursuant to the Creditor Agreement and loan documents in a maximum principal amount outstanding not to exceed $26.5 million. The debtors are authorized to borrow an additional $3.206 million under the credit agreement, as amended pending the final hearing. A final hearing shall be held on August 24, 1999. READING CHINA: Order Approves Sale of Property ---------------------------------------------- The US Bankruptcy Court for the District of Delaware entered an order on July 21, 1999 authorizing and approving the sale of a certain parcel of nonresidential real property in Newark, Delaware, three leases personal property and certain trade names to Jay R. Brinsfield or his nominee, a primary stockholder of Reading China, CEO of Reading China and Chairman of the Board of Directors. RECYCLING INDUSTRIES: Applies For Approval of Sale of Assets ------------------------------------------------------------ Recycling Industries of Texas, Inc. and Recycling Industries of South Carolina Inc. seek approval of the sale of assets to TMG Realty Ltd. The debtors have entered into an asset purchase agreement to sell certain of the real and personal property used in two scrap metal processing facilities located in Harlingen and San Juan, Texas, a shredder located in Georgetown, South Carolina, and certain personal property used at another facility located in Brownsville, Texas. The aggregate consideration to be paid to the debtors is $1.6 million. The asset purchase agreement calls for an overbid by any competing bidder of not less than $150,000 and a breakup fee in the amount of $100,000 in the event that a sale to a competing bidder is consummated. RECYCLING INDUSTRIES: Seeks Extension to Assume/Reject Leases ------------------------------------------------------------- The debtors, Recycling Industries, Inc. seek a court order granting a further 122 day extension of time in which to assume or reject the remaining nonresidential real property leases, through and including December 27, 1999. The debtors have already moved to reject approximately ten leases, and to assume approximately seven others. Three leases remain, which are the subject of this motion, which have a total monthly rent of approximately $21,000. RECYCLING INDUSTRIES: Seeks To Reject Contract With COO ------------------------------------------------------- The debtor, Recycling Industries, Inc., seeks to reject the executory employment contract with Harold J. Rouster, Senior Vice President and Chief Operating Officer. SA TELECOMMUNICATIONS: DIP Reports For April/May ------------------------------------------------ Acting as debtor-in-possession since filing Chapter 11 bankruptcy proceedings SA Telecommunications Inc. has submitted operating statements for the months of April and May 1999. Showing zero revenues in each of the two months, April figures reported a $13,088 net income, May a net loss of $14,265. Major expenses of the periods were for wages, payroll taxes, professional fees and rental/lease payments. TEXAS HEALTH ENTERPRISES: Files Chapter 11 ------------------------------------------ After a series of civil lawsuits, criminal charges, lease problems and Medicare-related losses, Texas Health Enterprises Inc., a Denton, Texas-based nursing home operator, filed chapter 11 in the U.S. Bankruptcy Court for the Eastern District of Texas in Plano, The Wall Street Journal reported. Texas Health had been renegotiating its leases on its properties, which total some 95 homes. While agreements had been reached on 12 of its properties, the company couldn't complete agreements with the terms of the other leases, and the company is set to turn control of several facilities in Michigan and Texas over to their respective state officials. Texas Health attributed its financial troubles to current Medicare reimbursement rates and unpredictable payments, and since 1996 the U.S. Health Care Finance Administration and the Texas Department of Health and Human Services Long Term Care have penalized the company with some $800,000 in fines for alleged poor care of its residents. (ABI 05-Aug-99) THORN APPLE: Order Amends DIP Financing Order --------------------------------------------- The court entered an order on July 19, 1999 providing that the DIP Facility will consist of a revolving credit facility of up to $57.4 million, which amount shall include all pre-petition indebtedness other than the prepetition term loan plus the New Funds Amount. The maximum amount of the New Funds Amount is $17.4 million, and termination provisions provide for the event of a non-occurrence of the sale to IBP. TOROTEL INC: Notifies That Filing For Fiscal Year Will Be Late -------------------------------------------------------------- On April 19, 1999, a transaction was completed whereby Torotel sold substantially all of the assets of its wholly owned subsidiary, OPT Industries, Inc., which was located in Phillipsburg, New Jersey. As a result of the sale, management personnel spent a substantial amount of time on the transfer of OPTs accounting records and other business matters to Torotels offices in Grandview, Missouri. In addition, Torotel says information required from third parties was not received in a timely manner for management to prepare certain disclosures plus allow time for the review by Torotels independent auditors. As a result of these factors the company will be late in filing its year-end financial statements with the SEC. TRANSTEXAS GAS: Committee Seeks To File Adversary Proceeding ------------------------------------------------------------ The Official Committee of Unsecured Creditors of TransTexas Gas Corporation, et al. seeks leave of the court to file an adversary proceeding on behalf of TransAmerican Refining Corporation (TARC). The Committee alleges that TARC has colorable claims against TCR Holding Corporation and TransContinental Refining Corporation d/b/a and n/k/a Orion Refining Corporation (ORION) for breach of their agreements to assume certain liabilities associated with the transfer of certain assets from TARC to TCR and then to Orion. One such payment is owed to B&G Crane Service, Inc. in the amount of $5.871 million. B& G is currently a member of the Committee. The committee does not know if other creditors are still unsatisfied. USCI INC: Loss Of RadioShack Account Continues To Drain Company --------------------------------------------------------------- USCI Inc. says it has and will continue to experience significant operating and net losses and negative cash flow from operations. The loss of the RadioShack account in October 1998 further accelerated the losses and negative cash flow the company had previously experienced. In response to the RadioShack termination, USCI reduced its workforce from 280 to 85 employees, which included a substantial number of customer service and collection personnel and reduced its leased facilities from 23,000 square feet to 18,000 square feet. The reductions in personnel resulted in reduced effectiveness of the company's customer service and collection departments causing higher churn rates. Total revenues for the three months ended March 31, 1999, consisting primarily of subscriber sales, were $5,797,402 as compared to $9,178,056 for the three months ended March 31, 1998. The decreased revenues for the 1999 quarter, according to the company, are attributable to a net decline in the subscriber base. USCI incurred net losses of $1,945,460 and $11,558,689 for the 1999 quarter and the 1998 quarter, respectively. WTD INDUSTRIES: Experiencing Net Losses/Lacks Credit Facility ------------------------------------------------------------- TreeSource Industries, Inc. is a corporation organized in Oregon in 1983, which, through its subsidiaries, manufactures softwood and hardwood lumber and by-products. The company changed its name effective October 27, 1998 from WTD Industries, Inc. to TreeSource Industries, Inc. The company markets its products primarily in the United States and Canada. WTD (TreeSource) manufactures a variety of softwood lumber products, predominantly from Douglas fir, hemlock, and white fir. It sells softwood lumber to a large number of customers, primarily distribution centers and wholesalers and directly to large retailers. Softwood lumber is used in a variety of applications, including residential and commercial construction, packaging, and industrial uses. Additionally, the company produces a small quantity of hardwood lumber in sizes targeted principally for the furniture and cabinet industries. Wood chips, a by-product of the manufacturing process, are sold principally to pulp and paper manufacturers. The company is licensed to use, and to grant licenses for others to use, in North America and Mexico, a patented technology called GREENWELD(R) that enables the gluing of green or unseasoned lumber. It used the GREENWELD(R) process in its fingerjointing operation during fiscal 1999. During fiscal 1999, the company generated income from its licensing activity which accounted for less than 1% of net sales. The company's rights to grant licenses for others to use GREENWELD(R) are for sale. WTD (TreeSource) does not have a credit facility for working capital and therefore relies on cash provided by its operations to fund its working capital needs. There can be no assurance that such cash will be sufficient to fund the company's operations. Substantially all of the company's assets are pledged to secure its primary debt obligation. If the company is unable to reach an agreement with its senior lenders on modified debt terms, such failure would have a material adverse effect on the company's business, financial condition and results of operations. Year end figures for the 1999 fiscal year ended April 30, 1999 show $10,246 net loss on revenue of $195,012. For comparison, fiscal 1998 netted a loss of $12,150 against revenues of $242,051. DLS CAPITAL PARTNERS: Bond Pricing for Week of August 2, 1999 ------------------------------------------------------------- Following are indicated prices for selected issues: Acme Metal 10 7/8 '07 14 - 17 (f) Amer Pad & Paper 13 '05 59 - 61 Asia Pulp & Paper 11 3/4 '05 71 - 73 Boston Chicken7 3/4 '05 1 - 3 (f) E & S Holdings 10 3/8 '06 51 - 53 Geneva Steel 11 1/4 '01 20 - 21 (f) Globalstar 11 1/4 '04 63 - 65 Hechinger 9.45 '12 15 - 20 (f) Iridium 14 '05 21 - 22 (f) Jitney Jungle 10 3/8 '07 32 - 35 Just for Feet 11 '09 32 - 35 Loewen 7.20 '03 65 - 66 (f) Planet Hollywood 12 '05 17 - 20 (f) Purina Mills 9 '10 43 - 46 Samsonite 10 3/4 '08 86 - 88 Service Merchandise 9 '04 20 - 21 (f) Sterling Chemical 11 3/4 '06 73 - 75 Sun Healthcare 9 1/2 '07 12 - 15 (f) Sunbeam 0 '18 16 - 17 TWA 11 3/8 '06 61 - 63 Vencor 9 7/8 '05 26 - 30 (f) Zenith 6 1/4 '11 20 - 24 (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 * * *