/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/990927.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, September 27, 1999, Vol. 3, No. 186 Headlines BARNEY'S: Sales Up/Losses Down In Quarter & 6-Month '99 Periods CENTENNIAL COAL: Frontier Insurance Objects To Settlement CENTRAL EUROPEAN: Mark A. Riely Holds 5.1% Of Stock DOW CORNING: Confirmation Objection; Creditors re Cram Down ELDER BEERMAN: Snyder Capital Purchases 19.6% Of Common Stock FEDCO: The Last of the Mohicans FILENES BASEMENT: Sustaining Losses In 1999 GARDEN BOTANIKA: Reports Latest 3- & 6-Month Financial Figures HARNISCHFEGER: Delays Financials/Warns Larger Losses HARNISCHFEGER: Seeks Approval of Vehicle Fleet Lease IMAGYN MEDICAL: Approval of Disclosure Statement INOTEK TECHNOLOGIES: Director Holds 32.8% Of Common Stock LIBERTY HOUSE: Consulting Services Agreement LOEHMANNS: Store Closures Cause $18.4 Million Charge MMH HOLDINGS: Pre-& Post-Recapitalization Financial Reports NATIONAL RECORD: Reschedules Annual Meeting Due To Printer Error OMEGA ENVIRONMENTAL: Financial Information For June & July PENN TRAFFIC: Successor's First Five Weeks - $8.7 Million Loss RUSSELL CAVE: Disclosure Statement and Joint Liquidating Plan TELETRAC INC: Seeks Authority to Approve Settlements TRANSTEXAS GAS: Chapter 11 Involvement Delays Filing Financials TRISM INC: Case Summary & 20 Largest Creditors VENCOR: Stipulation With Ventas Concerning Rent Payments WOVEN SHIRT: Sale of Assets To Four Star Realty Inc. ********* BARNEY'S: Sales Up/Losses Down In Quarter & 6-Month '99 Periods --------------------------------------------------------------- Barneys New York, Inc. and subsidiaries, is a retailer of men's and women's apparel and accessories and items for the home. On January 10, 1996, Barney's, Inc. and subsidiaries filed voluntary petitions for reorganization under chapter 11 of the United States Bankruptcy Code. The Predecessor company's plan of reorganization was confirmed on December 21, 1998 and became effective on January 28, 1999. Net sales for the three months ended July 31, 1999 were $76.7 million compared to $71.9 million a year ago, an increase of 6.7%. The company's net loss for the three months ended July 31, 1999 was $7.0 million compared to a net loss of $11.0 million for the three months ended August 1, 1998. Net sales for the six months ended July 31, 1999 were $162.5 million compared to $159.2 million a year ago, an increase of 2.1%. The company's net loss for the six months ended July 31, 1999 was $10.8 million compared to a net loss of $15.8 million for the six months ended August 1, 1998. CENTENNIAL COAL: Frontier Insurance Objects To Settlement --------------------------------------------------------- Frontier Insurance Company objects to the motion of the debtors, Centennial Coal, Inc. and affiliates seeking authorization of settlement of claims between the debtors and Sunrise Coal, Inc. The Insurance Company claims that the long term effect of the Settlement Agreement will be to transfer valuable assets out of the estate and allow costly reclamation and other environmental obligations to accumulate with the debtors. The insurance company states further that Centennial has a high probability of succeeding in the dispute; Centennial should have little difficulty in collecting a much greater amount from Sunrise. As surety, Frontier will be liable on its bond if Centennial fails to perform its reclamation obligations. The insurance company surmises that at the current time Sunrise owes the debtors almost $1.5 million. More than $600,000 of that amount would be attributable to maintenance services, which include reclamation. Under the Settlement Agreement Sunrise would pay to the debtors approximately $745,000. CENTRAL EUROPEAN: Mark A. Riely Holds 5.1% Of Stock --------------------------------------------------- Mark A. Riely is reported to have an aggregate number of shares of common stock representing 5.1% of the outstanding shares of common stock of Central European Media Enterprises. Of this amount he holds sole voting and dispositive power on 123,000 such shares, and shared voting and dispositive power on 819,200 shares. With respect to the shares of Class A common stock of the company which may be deemed to be beneficially owned by Riely, there is included 81,000 shares of common stock owned of record by Riely, 32,000 shares of common stock owned by an IRA F/B/O Riely (the "Mark Riely IRA"), 10,000 shares of common stock owned by a SEP IRA F/B/O Riely (the "Riely SEP IRA") with sole voting and dispositive power on the aggregate 123,000 shares. Of the 693,900 shares of common stock owned by Media Group Partners, L.P. which has a sole general partner, Media Group Management, Inc., of which Riely is a 75% shareholder, and 125,300 shares of common stock owned by Media Group Investments, Ltd., which has as its investment advisor Vercingetorix Corp., of which Riely is a 50% shareholder Mr. Riely has shared voting and dispositive powers. DOW CORNING: Confirmation Objection; Creditors re Cram Down ----------------------------------------------------------- Judge Spector entertained the final legal argument advanced by the Commercial Committee and large commercial creditors that, notwithstanding the Court's decision that the "legal rate of interest" payable on commercial claims is the Federal judgment rate rather than another rate of interest, the plan -- by paying less than the contract rate of interest -- fails the so-called fair and equitable test set forth in 11 U.S.C. Sec. 1129(b)(2). The Joint Plan, the Commercial Creditors contend, cannot be crammed down over their objection and dissent because the Joint Plan delivers value to shareholders before creditors are fully compensated, thus violating the hornbook absolute priority rule. By paying postpetition interest at the Federal judgment rate, in accordance with the Court's Care Interest Rate Opinion, on commercial claims, the Commercial Creditors explain, the Debtor has only satisfied the best interest of creditors test -- not the fair and equitable test. The Debtor argues that the United States Supreme Court rejects strict application of the absolute priority rule, thus permitting distributions to shareholders even when creditors come-up short. The Debtor points to the High Court's recent decision in Bank of America v. 203 N. LaSalle, 119 S.Ct. 1411 (1999). The Commercial Creditors, in turn, assert that 203 N. LaSalle is irrelevant to this analysis and the Debtor is doing nothing more than stringing together out-of-context sound bites from the decision. The Bank of New York, as Indenture Trustee for three tranches of public debt, takes vehement exception to the Debtor's suggestion in its pleadings that the Debtor has some lesser obligation to subsequent purchasers of Dow Corning's debt obligations than to the original purchasers. "The expectation of any purchaser of public debt," BNY stresses, "is that its debt will be paid in full prior to any return to the shareholders of the Debtor." The whole amount due a debt holder must be paid before shareholders recover from a debtor's estate; that whole amount includes principal plus interest at the contracted rate. The Commercial Committee's position is quite simple. Dow Corning is solvent. Commercial creditors have rejected the Joint Plan. Pre-bankruptcy shareholders are retaining 100% of the equity and no creditors will be harmed if commercial creditors' bargain is honored. Confirmation of the Joint Plan should be denied unless the Debtor pays post-petition interest at the contract rate. The Debtor maintains that all commercial creditors are being paid in full and that full payment of principal plus postpetition interest at the Federal judgment rate is the maximum to which commercial creditors are legally entitled. * * * Following the wrap-up of a multi-week confirmation hearing process, the core parties-in-interest submitted post-confirmation memoranda and, at Judge Spector's request, proposed findings of fact and conclusions of law to assist the Court in issuing its decision about whether to grant or deny confirmation of the Joint Plan. ELDER BEERMAN: Snyder Capital Purchases 19.6% Of Common Stock ------------------------------------------------------------- Snyder Capital Management, L.P. and Snyder Capital Management, Inc hold shared voting power over 2,786,600 shares of common stock of Elder Beerman Stores, and shared dispositive power over 3,150,650 shares. The aggregate amount of beneficially held common stock represents 19.6% of the outstanding common stock of Elder Beerman. Snyder Capital Management, L.P. is an investment adviser registered under the Investment Advisers Act of 1940. Snyder Capital Management, Inc. is the sole general partner of Snyder Capital Management, L.P. The latter is a Delaware limited partnership, the former a Delaware corporation. The multiple purchases were effected through public transactions with total funds expended for the common stock of $1,938,125,000. Snyder Capital Management, L.P. advises it acquired the stock on behalf of its advisory clients for the purpose of investment. According to the companies neither has any present plans or intentions to acquire or dispose of any securities of Elder Beerman other than on behalf of their advisory clients for the purpose of investment. Both Snyder Capital Management, L.P. and Snyder Capital Management, Inc. are wholly owned by Nvest Companies, L.P., a limited partnership affiliated with Nvest, L.P., a publicly traded limited partnership. The general partner of Nvest, L.P. and the managing general partner of Nvest Companies is an indirect, wholly owned subsidiary of Metropolitan Life Insurance Company ("MetLife"). As of June 30, 1998, MetLife beneficially owned all of the general partner interests in Nvest Companies and Nvest, L.P. and, in the aggregate, general partner and limited partner interests of Nvest Companies and Nvest, L.P. representing approximately 47% of the economic interests in the business of Nvest Companies. Snyder Capital Management Inc. and Nvest Companies operate under an understanding that all investment and voting decisions regarding advisory accounts managed by Snyder Capital Management L.P. are to be made by the two concerns and not by Nvest Companies or any entity controlling Nvest Companies. Accordingly, Snyder Capital Management Inc. and Snyder Capital Management, L.P. do not consider Nvest Companies or any entity controlling Nvest Companies to have any direct or indirect control over the securities held in managed accounts. FEDCO: The Last of the Mohicans ------------------------------- Discount Store News reported on September 6, 1999, Monday That the Fedco supercenter chain checked out its last customers and closed its doors forever this past summer. "The final chapter in a 50-year retailing history has come to an end," said George Rosenbaum, retail industry consulting firm president of Leo J. Shapiro & Associates. "It really is the end of an era." Fedco, a regional membership club warehouse founded in 1948 by a group of Los Angeles postal workers, was forced to declare Chapter 11 bankruptcy before it could sell its assets because it is a non-profit. Fedco was the oldest continuously operating membership retailer in the nation when it commenced its going out of business sales on July 21. "They were definitely the last of the Mohicans," said Sid Doolittle, of the retail industry consulting firm, McMillan/Dolittle Associates. Unable to grow and keep pace with the rapidly changing world of discount retailing, Fedco called it quits in July when it announced that it would sell its store locations to Dayton Hudson's Target Stores division for approximately $120 million. The liquidation sales are expected to net Fedco about $55 million, president Bob Stevenish told DSN. Any assets remaining after Fedco's inventory is liquidated, its property sold and its creditors are paid will be placed in a charitable trust that will serve the communities where Fedco once had stores. Fedco will emerge from Chapter 11 bankruptcy and the sale of it assets to Dayton Hudson's Target Stores division should be completed by mid-November. A consortium of four companies--Schottenstein Bernstein Capital Group, The Ozer Group, Hilco/Great American and The Nassi Group-- were selected by the U.S. Bankruptcy Court to liquidate the 10- store Fedco chain. A hearing is set for Sept. 15 in bankruptcy court to approve the final stages of the sale to Dayton Hudson. Fedco was founded as a non-profit retailer by 800 Los Angeles area postal workers tried to deal with a post-war wage freeze and rapidly rising prices. The postal workers each contributed $2 to become founding members of the Federal Employees Distributing Co., or Fedco. The idea was to take advantage of its members' combined buying power to obtain the lowest possible prices from wholesalers. Fedco eventually grew to have approximately 4 million members served by 10 general merchandise stores and three appliance stores located in five Southern California counties. Fedco predated discount stores such as Wal-Mart, Kmart and Target as well as membership retailers such as warehouse club Price Club and Bimart in the Pacific Northwest by 15 years. By Aug. 20, the bulk of the chain's merchandise was sold, yet bargain hunters still flocked to Fedco's store. The chain's non-profit status didn't provide an adequate mechanism to grow the chain to the size that would have been necessary to remain competitive. Years of haphazard management also crippled the retailer. FILENES BASEMENT: Sustaining Losses In 1999 ------------------------------------------- On August 23, 1999, Filenes Basement Corporation and its subsidiary filed voluntary petitions seeking relief under Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court for the District of Massachusetts. The company intends to operate its business during the reorganization process and entered into a $135 million debtor in possession financing facility on August 23, 1999. For the quarter ended July 31, 1999 the company's net sales were $144.0 million, up 9.6% from last year's second quarter sales of $131.4 million. Net loss for the quarter ended July 31, 1999 was $15.0 million, compared to net income of $1.0 million, for the quarter ended August 1, 1998. Net loss for the twenty-six weeks ended July 31, 1999 was $21.4 million, compared to net income of $0.3 million, for the twenty- six weeks ended August 1, 1998. The loss was reflected against sales of $281.0 million for the period ended July 31, 1999. Sales for the same period in 1998 were $259.0 million. GARDEN BOTANIKA: Reports Latest 3- & 6-Month Financial Figures -------------------------------------------------------------- On April 20, 1999, Garden Botanika Inc. filed a voluntary petition for relief under Chapter 11, of the United States Code with the United States Bankruptcy Court for the Western District of Washington at Seattle, Washington. The company indicates it expects to reorganize under Chapter 11 and propose a reorganization plan that provides for emergence from bankruptcy by or before 2001. Garden Botanika had 149 stores in operation at July 31, 1999 compared to 282 stores at August 1, 1998 and 252 stores at January 30, 1999. The average age of the company's stores at July 31, 1999 was 52 months. Net sales for the second quarter of fiscal 1999 were $13.5 million, compared to net sales of $20.8 million for the comparable prior period, a decrease of 35%. The company's operating loss decreased 82%, to $1.9 million from $10.1 million, in the respective quarters. As a percentage of net sales, the second quarter operating loss decreased to 13% from 49% in the comparable prior period. Net sales for the first six months of fiscal 1999 were $31.4 million, compared to net sales of $42.6 million for the comparable prior period, a decrease of 26%. The company's operating loss decreased from $15.2 million to $12.4 million, in the respective six-month periods. As a percentage of net sales, the operating loss was 36% in both periods. HARNISCHFEGER: Delays Financials/Warns Larger Losses ---------------------------------------------------- On June 7, 1999, Harnischfeger Industries, Inc. and its domestic operating subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Assessing the effects on the company's financial statements from the Chapter 11 filing and other developments occurring since the end of the last fiscal quarter, along with the departure of certain key operating and financial executives during this period (including the former chief financial and chief accounting officers), has caused the preparation of the company' financial reporting to take longer than anticipated. Once filed the company believes that the financial statements for the current periods will reflect significantly larger operating losses than the corresponding periods for the last fiscal year. HARNISCHFEGER: Seeks Approval of Vehicle Fleet Lease ---------------------------------------------------- GE Capital Fleet Services has supplied most of the Debtors' motor vehicles for the past four years under a Fleet Lease Agreement. Some time before the Petition Date, the Debtors say, they became dissatisfied with the services they were receiving from GE. In April 1999, the Debtors solicited bids from other vehicle rental companies. The Debtors received four bids, but did not move any further in the process of replacing GE. After the Petition Date, GE demanded that the Debtors pay all prepetition amounts owed pursuant to the Critical Vendor Order, and GE refused to lease any new vehicles until all prepetititon amounts owed were paid. Unpleasant conversations followed; the Debtors took another look at the four bids. From the four bids, the Debtors entered into further negotiations with PHH Vehicle Management Services. The final deal, for which the Debtors' seek the Court's approval at this juncture pursuant to 11 U.S.C. Sec. 363(b), provides the Debtors with equal or better service at a cost of $70,000 to $75,000 less per year. "The [PHH deal] makes good economic sense and is essential to the Debtors' reorganization efforts," the Debtors tell Judge Walsh. "The [PHH] Agreements will enable the Debtors to have access to as many vehicles as they require in their businesses at fair commercial terms. Thus, it is in the best interest of the Debtors' estates and their creditors to grant HII authority to execute the Agreements" with PHH. (Harnischfeger Bankruptcy News Issue 11; Bankruptcy Creditor's Service Inc.) IMAGYN MEDICAL: Approval of Disclosure Statement ------------------------------------------------ By order dated September 8, 1999,the US Bankruptcy Court for the District of Delaware approved the debtors' Disclosure statement in support of the debtors' joint amended plan of reorganization. On October 18, 1999 at 2:30 PM, a hearing will commence to consider confirmation of the plan. The plan provides that the debtors will satisfy creditors' claims through the restructuring of the Revolver and Term Loan, and in the case of the Term Loan, the distribution of New Common Stock; the issuance of New Common Stock in exchange for the claims of the holders of 12.5% Notes; the issuance of New Common Stock and New Warrants in exchange for the claims of the holders of 8.75% Convertible Subordinated Debentures, and the payment by cash or the issuance of New Common Stock to the holders of certain unsecured claims. The amended plan contemplates that: Administrative expenses will be paid in full; Priority Tax claims will be paid in full over time; Class 1 - Secured Revolving Credit Claims will be restructured as Refinanced Indebtedness under a New Revolving Credit Loan; The debtors estimate that claims in this class will be approximately $38.3 million. Class 2 - Secured Term Loan Claims will receive New Subordinated Term Note and other New Subordinated Term Loan Documents in full satisfaction of their claims; The debtors estimate that claims in this class will be approximately $15 million. Impaired. Class 3 - Other Secured Claims - unimpaired and will be paid in cash in full. The debtors estimate that claims in Class 3 will be $3 million. Class 4 - Priority Non-Tax Claims - unimpaired and will be paid in cash in full. Class 5A - Continuing Trade Claims, subject to the terms and conditions in the Agreement to Extend Trade Credit, shall receive the full amount of allowed claim, with no interest, by 12 equal quarterly installments; Impaired. The debtors estimate that claims in this class will be approximately $7.1 million. Class 5B - Convenience class shall provide for all allowed claims up to $1,000 and for all claims that are voluntarily reduced to $1,000 a cash payment for the full amount of such allowed claim; The debtor s estimate that claims in class 5-B will be approximately $500,000. Impaired. Class 6 - Residual Unsecured Claims will receive at each holders' election, (a) cash equal to the lesser of 20% of the amount of each Allowed Class 6 claim, and a pro rata share of $1 million or (b) a pro rata share, aggregated with the holders of Allowed Class 8 claims., of 8.8 million shares New Common Stock. The debtors estimate that the allowed claims in Class 6 will be approximately $10 million. Impaired. Class 7 - Certain indemnity claims will receive the benefit of the use of proceeds of insurance to make any payment on or settlement of litigation against such officers and directors that might be the basis for an indemnification claims, or they may be paid from the proceeds of insurance, if any. Impaired. Class 8 - 12.5% Notes will receive in full satisfaction of their claims pro rata share of the remainder of the 8.8 million shares of new common stock available after distribution to Class 6 claims, minus 200,000 shares of New Common Stock for distribution to class 9 claim; Impaired. Class 9 - 8.75% Convertible Subordinated Debentures will receive in full satisfaction of their claims pro rata share of 200,000 shares of New Common Stock, and the New Warrants; Impaired. The following classes shall not receive or retain any property under the plan: Class 10 - Intercompany claims Class 11 - Old Common Stock Interests Class 12 - Old stock Rights and Class 13 - Securities Claims INOTEK TECHNOLOGIES: Director Holds 32.8% Of Common Stock --------------------------------------------------------- David L. White, a director of Inotek Technologies Corporation, beneficially owns 32.8% of the common stock of the company by virtue of his holding 1,510,025 shares of common stock in the company. He exercises sole voting and dispositive powers over the shares so owned. As of August 17, 1999, Mr. White exercised a warrant to purchase 250,000 shares of Inotek common stock at a price of $0.28 per share. This warrant was granted February 11, 1991, and could be exercised at any time during the ten year period commencing on that date. As of August 23, 1999, Treble Investments, a partnership formed by Mr. White and Neal M. Young, was dissolved. At the time of dissolution, Treble Investments owned 2,140,950 shares of Inotek common stock. Upon the dissolution, Mr. White and Mr. Young each received 50% of the shares owned by Treble Investments. LIBERTY HOUSE: Consulting Services Agreement -------------------------------------------- The debtor, Liberty House, Inc. seeks authority to enter into a Consulting Services Agreement with JDA Software, Inc. Under the agreement, JDA will continue to work with the debtor to determine the functional requirements of the software modifications required by Liberty House; document Liberty House's requirements including preparation of a description of business requirements, the current functionality of Liberty House's software, a definition of the software modification and high level test plan; document Liberty House's requirements in technical terms, which identifies the specific programs, files, screens, and reports to be changed, and the specific changes to be made along with a cost estimate; develop, unit test and quality control test the software modifications; deliver the software modifications to Liberty House; assist Liberty House in performing acceptance testing on the software modifications; provide technical expertise in converting the data from Liberty House's existing mainframe system to its new AS400 system and provide installation expertise and project management services. The rates charged by JDA will range from $95 per hour to $260 per hour. Liberty House estimates that it will pay $2.6 million over the term of the Consulting Services Agreement to JDA. Forty employees are covered by the agreement, and this amount is within the overall budget for the debtor's information technology upgrade established by the debtor and the Committee. LOEHMANNS: Store Closures Cause $18.4 Million Charge ---------------------------------------------------- On May 18, 1999 Loehmanns Inc. filed a petition for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. Since the petition date, the company has continued to operate as a debtor-in-possession under the Bankruptcy Code. During the second quarter of fiscal 1999, the company implemented a plan to close 14 underperforming stores and, as a result, recorded a $18.4 million charge to continuing operations. These closures are intended to improve the company's future profitability and liquidity. The store closures will be materially completed by the end of September. Net sales of the company for the thirteen week period ended July 31, 1999, were $90.0 million as compared to $97.1 million for the comparable period in the prior year, a decrease of approximately $7.1 million or 7.3%. Sales for the six month period ended July 31, 1999 were $198.2 million versus $207.3 million during the comparable period last year, a decrease of $9.1 million, or 4.4%. Net loss for the company for the thirteen week period ended July 31, 1999, was $31.9 million compared to $2.2 million loss for the same period of 1998. Net loss for the six month period ended July 31, 1999 was $35.7 million as compared to the net loss of $0.4 million in the 1998 same period. MMH HOLDINGS: Pre-& Post-Recapitalization Financial Reports ----------------------------------------------------------- MMH Holdings, Inc. is a holding company whose sole direct subsidiary is Morris Material Handling, a manufacturer, distributor and service provider of "through-the-air" material handling equipment with operations in the United States, United Kingdom, South Africa, Singapore, Canada, Australia, Thailand, Chile and Mexico. On January 28, 1998, Harnischfeger Industries, Inc. reached an agreement with MHE Investments, Inc., an affiliate of Chartwell Investments Inc., for the sale of an approximately 80 percent common ownership interest in Harnischfeger Industries, Inc.'s Material Handling Equipment Business. The resulting transactions, which closed on March 30, 1998, led to a significant change in the capital structure and a reorganization of the underlying legal entities of the MHE Business. As a result of the recapitalization, MMH Holdings, Inc., a pre-existing company engaged in the MHE Business, became an indirect holding company for the operating entities engaged in the MHE Business. Specifically, Morris Material Handling, Inc. ("MMH" and collectively with its subsidiaries and their predecessors, the "company"), a newly formed wholly-owned direct subsidiary of Holdings, directly or indirectly acquired the various operating entities engaged in the MHE Business. Holdings was recapitalized in order to effect the redemption of certain shares of common stock of Holdings held by Harnischfeger Corporation. As a result of the reorganization of the legal entities of the MHE Business, Holdings and MMH became the successor companies to the MHE Business. On June 7, 1999, Harnischfeger Industries, Inc. and certain of its United States affiliates (including HarnCo) filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. For periods prior to the recapitalization closing, the financial information presented here represents the combined financial statements of the entities comprising the MHE Business. For purposes here, it is assumed that Holdings has historically owned the capital stock of MMH, that all of the assets of the MHE Business were owned by subsidiaries of MMH and that, immediately prior to the consummation of the recapitalization, the historical combined financial statements of Holdings were identical to those of the company. Net sales for the nine months ended July 31,1999 decreased $19.2 million, or 8.3%, to $212.5 million from $231.7 million for the nine months ended July 31, 1998. Net sales for the three months ended July 31, 1999 decreased $1.7 million, or 2.3%, to $72.7 million from $74.4 million for the three months ended July 31, 1998. Net loss in the nine months ended July 31, 1999 was $23.6 million as compared to net gain of $2.0 million in the same period of 1998. Net loss in the three months ended July 31, 1999 was $6.3 million, while net loss in the 1998 same period was $0.1 million. NATIONAL RECORD: Reschedules Annual Meeting Due To Printer Error ---------------------------------------------------------------- National Record Mart Inc. has rescheduled its annual meeting of stockholders. The meeting has been postponed until Thursday, November 4, 1999 at 9:30 a.m. local time, at the James H. Reed Building, 435 Sixth Avenue, Ninth Floor, Pittsburgh, Pennsylvania 15219. The principal business to be transacted at the annual meeting will be election of four directors, ratification of the grant of stock options to William A. Teitelbaum in June 1996 and July 1997, and ratification of the appointment of Ernst & Young LLP as independent auditors of the company for and the fiscal year ending March 25, 2000. Previously materials were sent out to stockholders relating to the annual meeting of stockholders originally scheduled for September 23, 1999. The company was recently advised by its printing and duplicating contractor that, due to the contractor's error, the meeting and proxy statement for the originally scheduled meeting omitted the pages containing the company's audited historical financial information. In order to provide sufficient time to recirculate this information and to allow stockholders a full opportunity to review the information prior to returning proxies for the annual meeting, the Board of Directors of National Record Mart determined to reschedule the meeting to Thursday, November 4, 1999. The Board of Directors established a record date of September 8, 1999 for such a meeting. OMEGA ENVIRONMENTAL: Financial Information For June & July ---------------------------------------------------------- Omega Environmental Inc., operating as debtor-in-possession, reports the following financial information for the month of June 1999 and the month of July 1999. At the end of July revenues reported were $1,151,924 with net losses of $444,335. The close of June showed revenues of $1,271.321 and net losses of $305,217. As of July 31, 1999, the company's borrowings from BNY Financial Corporation were $24,002,111. Omega negotiated continuance of debtor-in-possession financing through October 31, 1999. PENN TRAFFIC: Successor's First Five Weeks - $8.7 Million Loss ------------------------------------------------------------- On March 1, 1999, the Penn Traffic Company and certain of its subsidiaries filed petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. On May 27, 1999, the Bankruptcy Court confirmed the company's chapter 11 plan of reorganization and on June 29, 1999, the plan became effective in accordance with its terms. Consummation of the plan has resulted in (a) the former $732.2 million principal amount of senior notes being exchanged for $100 million of new senior notes and 19,000,000 shares of new common stock,(b)the former $400 million principal amount of senior subordinated notes being exchanged for 1,000,000 shares of new common stock and six-year warrants to purchase 1,000,000 shares of new common stock having an exercise price of $18.30 per share, (c) holders of Penn Traffic's formerly issued common stock receiving one share of new common stock for each 100 shares of common stock held immediately prior to the petition date, for a total of 106,955 new shares. As part of the plan, the company also authorized for issuance to officers and key employees options to purchase up to 2,297,000 shares of new common stock. The company's application to list the new common stock and warrants on the Nasdaq National Market has been approved. The company's plan also provides for the payment in full of all of the company's obligations to its other creditors. For the five week period ended July 31, 1999 the Successor company had net revenues of $240,966 with net loss of $8,762. In the eight week period preceding that, and ended June 26, 1999, the Predecessor company had revenues of $391,759 with net income shown of $492,797; while in the 13-week period ended August 1, 1998 the Predecessor company net revenues were $730,223 with a 13-week ended August 1, 1998 net loss of $23,498. RUSSELL CAVE: Disclosure Statement and Joint Liquidating Plan ------------------------------------------------------------- Russell Cave Company, Inc. fka The Peterman Company, debtor and the Official Committee of Unsecured Creditors jointly provide the Disclosure Statement. The plan is premised on the continuation and completion of the orderly liquidation of all assets of the debtor. Classes Impaired under the plan: Class 2 - Secured Customer claims Class 3 - Miscellaneous Secured Claims Class 6 - Unsecured claims Class 7 - Subordinated claims Class 8 - Equity interests With respect to the existence of specific causes of action, the debtor's statement of financial affairs reflects numerous transfers by the debtor to other persons, including insiders, prior to the Petition Date, a substantial number of which might be subject to avoidance and recovery as preferences. According to the statements, in the case of transfers aggregating more than $4,500 to any one recipient, such transfers aggregated more than $12 million and involved approximately 250 different recipients. The debtors claim that ADZ,Inc. an entity that was authorized to liquidate certain of the debtors' inventory has withheld as much as $860,000 of proceeds. The credit card processors have withheld from the debtor undetermined sums thought to be in excess of $1 million from the sales of the debtor's inventory in order to satisfy expected chargeback claims. The Committee is currently investigating whether any causes of action exist against Heller Financial Inc. The Committee is also investigating the propriety of First Chicago National Bank's action in dishonoring over $660,000 in checks issued by the debtor well prior to the petition date. TELETRAC INC: Seeks Authority to Approve Settlements ---------------------------------------------------- The debtor is seeking court authority and approval of settlements with Fleet Leasing Corp., Industrial Communications & Electronics, Inc., Etak, inc., MediaOne of South Florida, Inc. and Lease Corporation of America. The proposed settlements are as follows: Fleet Leasing Corporation - Claim $78,538 - The debtor requires the use of the equipment leased and the debtor seeks to assume the foregoing leases of computer equipment. Industrial Communications & Electronics, Inc. - Claim $75,846 Based upon three leases of tower space covering the Boston Market. The debtor has rejected the three leases, the claims shall be converted from a single Class 3 Miscellaneous Unsecured Claim into three separate Class 4 Category A Convenience claims,, each in the amount of $20,000. Etak, Inc - Claim in the amount of $825,574 based upon a software license agreement. The debtor assumes the agreement - upon approval the claim shall be deemed withdrawn. MediaOne of South Florida Inc. - Two tower leases to be assumed by the debtor, cure amount of $52,674 and claim withdrawn. Lease Corporation of America - Claim - $102,176 based upon lease of certain computer equipment. Cure amount of $3,789, claim withdrawn. TRANSTEXAS GAS: Chapter 11 Involvement Delays Filing Financials --------------------------------------------------------------- TransTexas Gas Corporation has advised the Securities & Exchange Commission that due to the Chapter 11 proceedings the company is involved in, all information necessary to complete the financial statements is not yet available. As a result filing of such information will be delayed. TRISM INC: Case Summary & 20 Largest Creditors ---------------------------------------------- Debtor: TRISM, Inc. 4174 Jiles Road Kennesaw, GA 30144 The following affiliated or related entities are each filing voluntary Chapter 11 bankruptcy petitions: Trism Heavy Haul, Inc. Trism Secured Transportation, Inc. Trism Logistics, Inc. Trism Equipment, Inc. Trism Specialized Carriers, Inc. Diablo Systems Incorporated Trism Eastern, Inc. Tri-State Motor Transit Co. Trism Special Services, Inc. Type of business: Trucking company that specializes in the transportation of heavy and over-dimensional freight and equipment, as well as materials such as munitions, explosives and radioactive and hazardous waste. Court: District of Delaware Case No.: 99-3364 Filed: 09/16/99 Chapter: 11 Debtor's Counsel: Laura Davis Jones Young, Conaway, Stargatt & Taylor, LLP 11th Floor Rodney Square North PO Box 391 Wilmington, Delaware 19899 (302) 571-6600 Total Assets: $203,568,387 Total Liabilities: $196,186,715 Number of shares of common stock 5,899,237 - 1,500 holders 20 Largest Unsecured Creditors: Name Nature Amount ---- ------ ------ US Bank Trust NA Sr. Subordinated Notes due $86,230,000 December 15, 2000 EFS Concord National Bank-Fuel Trade Payable 428,633 Bridgestone Trade Payable 376,184 Petro Shopping Centers Trade Payable 277,375 AT&T Trade Payable 258,491 Comdata Transceiver Trade Payable 236,246 Econofreight Trade Payable 200,000 Dedicated Distribution Trade Payable 176,926 Qualcomm, Inc. Trade Payable 137,258 Truckstop Distributors Trade Payable 109,651 Bandag, Inc. Trade Payable 87,088 Freightliner Trade Payable 85,000 Navistar Trade Payable 85,000 Comdata Pilot Car Service Trade Payable 78,743 Mobile Oil Corporation Trade Payable 70,213 Goodyear Tire Trade Payable 66,159 Pan Western Corp. Trade Payable 65,100 Holiday Inn of Joplin Trade Payable 64,664 Yokohama Trade Payable 59,225 Greyhound Lines Inc. Trade Payable 54,502 VENCOR: Stipulation With Ventas Concerning Rent Payments -------------------------------------------------------- The Debtors are party to four master leases and one individual nursing home lease. There is or may be substantial dispute between the Debtors and Ventas about: (1) the bona fides of the Lease Agreements, (2) whether the leases are subject to assumption, assignment or rejection under 11 U.S.C. Sec. 365, (3) to the extent Sec. 365 applies, whether the premises constitute nonresidential real property and the appropriate rent payable, and (4) whether Vencor and Ventas are separate entities or should be substantively consolidated. To obviate litigation of these issues for the time being, the Debtors and Ventas entered into a Stipulation providing that: (A) Vencor will continue making $15,133,556.50 monthly rental payments during the chapter 11 cases; (B) that rent shall constitute timely performance of the Debtors' rental obligations under the Lease Agreements for purposes of 11 U.S.C. Sec. 365(d)(3); (C) the Debtors will continue to honor their indemnification obligations to Ventas under the 1998 Reorganization Agreements; (D) Additional amounts Ventas believes are owed by the Debtors postpetition will accrue as an administrative claim junior to the DIP Lenders' claims, and the Debtors reserve their rights to contest that claim; (E) the Stipulation runs through October 31, 1999, and continues thereafter from month to month unless terminated on 14 days' notice; (F) no party may challenge the propriety of the $15,133,556.50 monthly payments made during the chapter 11 cases while the Stipulation is in effect; and (G) the statute of limitation imposed by 11 U.S.C. Sec. 548 with respect to Vencor Claims against Ventas is tolled until five days following termination of the Stipulation. Myron Trepper, Esq., and Michael J. Kelly, Esq., of Willkie Farr & Gallagher in New York and S. David Peress, Esq., of Young Conaway Stargatt & Taylor in Wilmington represent Ventas in the Debtors' chapter 11 cases. (VENCOR Bankruptcy News Issue 2; Bankruptcy Creditor's Service Inc.) WOVEN SHIRT: Sale of Assets To Four Star Realty Inc. ---------------------------------------------------- The Wall Street Journal September 24, 1999 published notice of application of Woven Shirt Manufacturing Co., LLC, et al. authorizing and approving the sale of specified business assets to Four Star Realty, Inc. or to a successful overbidder. A hearing will be held on October 1, 1999 in the US Bankruptcy Court for the Northern District of Mississippi. The purchase price is $925,000. All higher and better bids shall be in increments of $500,000. ********** The Meetings, Conferences and Seminars column appears in the TCR each Tuesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. 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