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/raid1/www/Hosts/bankrupt/TCR_Public/991012.MBX T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, October 12, 1999, Vol. 3, No. 197 Headlines ANKER COAL: Proceeds With Proposed Restructuring BOSTON CHICKEN: Harry's Farmers Market Unable To Fund Settlement CFI MORTGAGE: Avoidance Of Chapter 7 Dependent Upon Plans Success CFI MORTGAGE: Letter of Intent to Acquire Interest in Inventek COMMODORE APPLIED TECHNOLOGIES: Revises Merger Agreement CRIIMI MAE: Order Extends Time To File Disclosure Statement FAVORITE BRANDS: Agrees To Sell Assets To Nabisco, Inc. GULF STATES STEEL: Order Authorizes Retention of Arthur Andersen HARNISCHFEGER: Committee To Work Toward Plan HARNISCHFEGER: Files Third Quarter 10-Q HECHINGER: Notice of Designated Lead Bidder HECHINGER: Seeks Approval of an Extension of Exclusivity HOME HEALTH: 13th Order Approving Use of Cash Collateral IMAGYN MEDICAL: Seeks Order Approving Settlement Compromise LAROCHE INDUSTRIES: Engages PricewaterhouseCoopers LONDON FOG: Announces Closing of Over 100 Outlet Stores MARVEL ENTERPRISES: Dickstein Resigns As Director NATIONSWAY: Denver Claims It's Owed Unpaid Taxes ONSALE INC: Egghead.com, Inc. Activates Web Site PARAGON TRADE: Equity Committee May Proceed Against Weyerhaeuser PINNACLE BRANDS: Court Further Extends Exclusivity RAM ENERGY: Possible Bankruptcy Candidate SGL CARBON: Seeks To Extend Time To Assume or Reject Leases STAFF BUILDERS: Sells Chelsea Computer Consultants, Inc. QUEEN SAND: Deephaven & KA Investments Hold 26.6% Of Stock VENCOR INC: Receives Final Court Approval Of DIP Financing WESTERN DIGITAL: Retires Debentures By Issuing Common Stock ZENITH ELECTRONICS: LGE Lashes Out at the Equity Security Holders Meetings, Conferences and Seminars ********* ANKER COAL: Proceeds With Proposed Restructuring ------------------------------------------------ Anker Coal Group, Inc. held a conference call on October 4, 1999, with the noteholders previously identified by the company as eligible to participate in the proposed restructuring of its 9- 3/4% Senior Notes due 2007. During the conference call, the company reported that earnings before interest, taxes, depreciation and amortization ("EBITDA") for the eight-month period ended August 31, 1999, exceeded EBITDA for the period as forecasted in the projected summary financial statements which the company had filed with the SEC on October 1, 1999. In addition, the Company provided the following information to the noteholders after the conference call: 1. The average annual tonnage subject to the company's current long-term sales contracts for the periods set forth below is as follows: AVERAGE ANNUAL TONS PERIOD SUBJECT TO LONG-TERM CONTRACTS ------ ------------------------------ 1 to 3 years 5,377,000 4 TO 8 years 2,863,000 9 to 15 years 1,576,000 2. The projected mine life for each of the company's deep mines is as follows: COUNTY MINE PROJECTED LIFE ------ ---- -------------- Upshur County, WV Spruce #1 Mine 4.4 years Spruce #2 Mine 11.0 years Spruce #3 Mine 6.5 years Barbour County, WV Sentinel Mine 15.0 years Harrison County, WV Sycamore Creek Mine 7.0 years Garrett County, MD Steyer Mine 10.0 years Raleigh County, WV Baybeck Mine 2.0 years Grant County, WV Stoney River Mine 13.0 years The projected life indicated above for each deep mine is based on estimates of reserves that have been proven and assigned to a specific mine through the company's current drilling program. Other reserves controlled for the mines have been indicated in geologic studies, but require additional drilling before these reserves can be classified as proven. The projected mine lives are also based on current reserve control, current mining plans, projected coal prices, projected annual production and other factors, and are subject to risks and uncertainties, including, but not limited to, variations in geological conditions and other factors affecting mining conditions. The Spruce #3 Mine referred to above is projected to be in production in 2003. The Stoney River Mine is projected to resume production in 2001. BOSTON CHICKEN: Harry's Farmers Market Unable To Fund Settlement ---------------------------------------------------------------- Harry's Farmers Market, Inc. (Nasdaq: HARY) reported that it has entered into an agreement to sell its distribution facility to a company that purchases and manages distribution facilities across the country. As consideration for the facility, Harry's will receive $ 5.3 million plus certain equipment from the building. Part of the proceeds will be used to repay approximately $ 2.75 million on a mortgage note payable, which includes a prepayment penalty. As part of the agreement, Harry's has agreed to lease back a portion of the facility. Harry's will use the remaining approximately $ 2.3 million in proceeds for working capital purposes. The sale is subject to an inspection period that expires on October 22, 1999, during which time the buyer may exercise its right to terminate the sale agreement and its escrowed funds will be returned. Subsequent to the end of such inspection period, the buyer has 20 business days to close the transaction or forfeit the escrowed funds. There can be no assurances the transaction will close on the terms or timetable described herein. In addition, Harry's announced today that it has been unable to secure the funds necessary to consummate the previously reported proposed settlement with Boston Chicken, Inc. within the timeframe set out by the U.S. Bankruptcy Court. Harry's intends to continue to pursue a settlement with Boston Chicken, Inc. and any successor entity; however, any new transaction between the parties would require further approval of the U.S. Bankruptcy Court. There can be no assurances that any such proposed settlement will be consummated. Harry's owns and operates concept megastores and convenience stores specializing in perishable food products fresh fruits and vegetables; fresh meats, poultry and seafoods; fresh baked goods; freshly made ready-to-eat, ready-to-heat and ready-to-cook prepared foods; and deli, cheese and dairy products. Harry's stores also feature lines of specialty, hard-to-find and gourmet nonperishable food products that are complimentary to the fresh food offerings. In addition, Harry's stores carry kitchen-oriented housewares, floral items, natural health and beauty care items, and a full line of wines and imported and domestic beers. Harry's bakery and prepared foods departments are fully-integrated food manufacturing operations. Harry's presently owns and operates three megastores and five Harry's In A Hurry convenience stores all in the in the Atlanta, Georgia metropolitan area. CFI MORTGAGE: Avoidance Of Chapter 7 Dependent Upon Plans Success ----------------------------------------------------------------- On March 10, 1999, CFI Mortgage Inc. commenced a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the Southern District of Florida. On June 11, 1999, the bankruptcy court confirmed a plan of reorganization through which CFI was discharged from any debt that arose before the date of confirmation. As a result of the confirmation of the plan, CFI is no longer threatened by any litigation, claims, and assessments which may have existed as of December 31, 1998. The plan provides for an infusion of $800,000 by a lender which is secured by CFI's assets. The lender has the option of converting the loan to common stock of CFI at a rate to be determined after the effective date of the plan. Each general creditor is to receive one share of common stock for each dollar of debt in the reorganized CFI. The preferred stockholder of Series "A" and "B" convertible preferred stock will receive 2 million shares of common stock in exchange for the preferred stock in the reorganized CFI. The company's subsidiary, Direct Mortgage Partners, Inc. was not a party to the petition for relief under Chapter 11. Only debts that were guaranteed by CFI and two other creditors will be satisfied by issuance of common stock for each dollar of debt in the reorganized CFI. As of March 31, 1999 and December 31, 1998 liabilities of Direct Mortgage Partners that are not guaranteed by CFI amounted to $1,539,341, respectively. The company reported no revenue for the quarter ended March 31, 1999 but sustained net losses of $44,110. In the same period of 1998 revenue reported was $5,961,070 with net income of $26,504. The company's ability to return to normal operations is totally dependent on the success of its voluntary plan of reorganization and subsequent additional capital infusion. If this plan is not successful or the additional capital is not forthcoming or is insufficient, management intends to move the company into a Chapter 7 bankruptcy liquidation. Such conditions raise substantial doubt about the company's ability to continue as a going concern. CFI MORTGAGE: Letter of Intent to Acquire Interest in Inventek -------------------------------------------------------------- CFI Mortgage, Inc. (OTC Bulletin Board: CFIM), a diversified consumer finance company, announced it has executed a letter of intent to acquire a majority interest in privately-held Inventek, Inc. (doing business as Surfside Software Systems(TM)) of Clearwater, FL. The company is a leader in the development and marketing of transportation software systems in the United States and Canada. Stephen Williams, CFI president and chief executive officer, said "this strategic acquisition marks our entry into the technology- based software solutions and cost containment industry and positions CFI for accelerated growth in the new millennium." Williams said the "diversification of CFI through acquisitions of this nature will insure the company's future competitiveness in the financial services industry," adding that he expects "the licensing of software products with applications in the financial services industry could provide a profit center for the company in the near term." The company, discharged from Chapter 11 bankruptcy March 10, 1999, also said it has brought current all of its filings with the Securities & Exchange Commission, including its 1998 annual report on Form 10K and its first and second quarterly reports for the periods ended March 31 and June 30, 1999. Williams said Surfside, an IBM Business Partner since 1996, has been acclaimed by industry experts as one of the leading producers of software product solutions. Surfside began operations in 1994 with the development of Transware(TM) software, which maximizes client scheduling, cashiering, accounting and insurance administration capabilities. Surfside also has developed a module that manages preventative maintenance, inventory purchasing and cost analysis. Surfside is presently developing nationwide distribution through resellers and distributors and offers 24-hour, seven-days-a-week support service. As an IBM Business Partner, Surfside is positioning itself to be an innovator in wireless technologies, client-server architecture and electronic commerce (e-commerce). COMMODORE APPLIED TECHNOLOGIES: Revises Merger Agreement -------------------------------------------------------- Commodore Applied Technologies, Inc. announces new terms for its merger agreement with Global Energy Investors, Inc. Under the terms of the revised definitive agreement, Global will become a wholly owned subsidiary of Commodore with the issuance of a total of twelve and one-half (12.5) million shares of Commodore common stock to the shareholders of Global. Nine (9) million shares will be issued upon closing with the remaining three and one-half (3.5) million shares deposited into escrow and disbursed if, between the closing and the second anniversary of the closing, Commodore's stock will have traded at or above $3.00 for twenty (20) consecutive trading days. The merger is contingent upon the approval of the respective boards of directors of Commodore and Global, completion of at least a $5.0 million net financing by October 31, 1999, and approval by the Commodore shareholders at the 1999 annual meeting. Upon completion of the merger, Robert McFarlane, the former National Security Advisor to President Ronald Reagan, and Robert Traylor, a 40-year veteran in the nuclear industry and co-founder and former CEO of Management Analysis Company, a leading nuclear power consulting firm, principal officers and shareholders of Global, will be nominated for election to the Commodore Board. If elected, Mr. McFarlane will assume the position of Chairman and Chief Executive Officer and Mr. Hannesson and Mr. Traylor will be named Vice-Chairmen. Mr. Hannesson will remain President of the company. Immediately following Commodore's acquisition of Global, the combined companies will focus their attention primarily on the following: Expansion of Commodore's existing businesses, including Commodore Advanced Sciences, Inc., with approximately $80 million of contract backlog including the WIPP contract at Carlsbad, NM and the application of Commodore's SET(TM) Technology to the decontamination of radioactive mixed wastes and the destruction of chemical weapons. Expansion of Global's existing business for the development of independent power generation projects which currently consists of the development of more than 2,000 megawatts of power plant projects in emerging foreign markets. Acceleration of Global's plan for the acquisition of nuclear power plants located in the United States. Acceleration of Commodore's plan for the treatment of nuclear waste. As Mr. McFarlane previously stated: "This merger brings together two solid companies whose sum will be far greater than their individual parts. The synergy between us is very strong." CRIIMI MAE: Order Extends Time To File Disclosure Statement ----------------------------------------------------------- The US Bankruptcy Court for the District of Maryland entered an order extending the time for the debtors to file a Disclosure Statement to October 15, 1999. FAVORITE BRANDS: Agrees To Sell Assets To Nabisco, Inc. ------------------------------------------------------- On September 28, 1999, Favorite Brands International, Inc., its subsidiaries Sather Trucking Corp. and Trolli Inc. and its parent Favorite Brands International Holding Corp., signed an agreement to sell substantially all of their assets to Nabisco, Inc. and its affiliates for $475 million in cash. The sale is subject to approval by the U.S. Bankruptcy Court and to regulatory approval and other customary conditions. There can be no assurance that these conditions will be satisfied or that the sale will be completed. GULF STATES STEEL: Order Authorizes Retention of Arthur Andersen ---------------------------------------------------------------- The US Bankruptcy Court for the Northern District of Alabama Eastern Division entered an order authorizing the retention of Arthur Andersen LLP as accountants to the debtor, nunc pro tunc to September 3, 1999. HARNISCHFEGER: Committee To Work Toward Plan -------------------------------------------- The Official Committee of Unsecured Creditors tells Judge Walsh that, in reliance on the Debtors' representations that they and their advisors will work diligently toward the development of one or more plans of reorganization and will file such plan or plans of reorganization on or before the February 7, 2000, it has no objection to the request for an extension of the exclusive periods. The Committee, however, expressly reserves its right to object to any further extension of the Exclusivity Periods. Moreover, in the event that the Debtors and their advisors do not make adequate progress toward the proposal of one or more plans of reorganization prior to February 7, 2000, and the Committee reserves its right to petition the Court pursuant to 11 U.S.C. Sec. 1121(d) to reduce or terminate the Exclusivity Periods. While the number of Debtor entities and affiliates combined with the aggregate of over $2 billion in non-insider prepetition debts no doubt properly classifies these chapter 11 cases as large, the Committee suggests, the cases may not all be unusually complex. Organizationally, the Debtors appear to be a portfolio of three lines of businesses owned by a common parent holding company. While there appears to be certain operating relationships within each of the Harnco, Joy and Beloit businesses that are coordinated with their debtor and non-debtor affiliates on a world-wide basis, there seems to be little, if any, overlap in personnel, manufacturing or other operations between the three businesses. This apparent operational independence should simplify the analysis of the chapter 11 strategy of each of these companies. Similarly, the Committee says, the capital structure of the HHI portfolio of companies does not appear unusually complex with most of the institutional debt held at the parent level. Based on the information available to the Committee at this time, therefore, the Committee believes that the organization and capital structure of the three portfolio companies may be sufficiently straightforward to facilitate the prompt development of a plan of reorganization for HII or separate plans for each of the major business subsidiaries. The Committee, in short, recognizes that Beloit is the Debtors' problem. In the latest quarter, the Mining Businesses reported an operating loss of $88 million while Beloit lost $464 million. These results tend to indicate that while Harnco and Joy may be responding to the challenges in their industries, Beloit is not. It is also clear that whatever the effect of the industry-wide conditions have been on Beloit, the effects have been magnified by poor judgment in the past. Beloit's experience with the paper-making venture in Fitchburg Massachusetts, the cost overruns in several engineering, procurement and construction contracts, and the sale of expensive machinery to non-creditworthy customers are a few of the many examples where Beloit's financial condition has been worsened by factors not related to exogenous industry-wide trends. 13. The Debtors must quickly resolve the tension between attempting to use enterprise values of Harnco and Joy to subsidize a potential turnaround of Beloit's operations, versus the very real risk that a turnaround will remain illusive and the subsidy will prove unrecoverable. "The Committee will not stand by and watch asset values at Joy and Hamco fund endless losses at Beloit," the Committee tells Judge Walsh. The Committee firmly believes that the next four months should be sufficient for the Debtors to develop and file one or more plans of reorganization. "Not only should the four- month period be sufficient, but it must be sufficient. Continuing cash losses at Beloit of the magnitude realized in recent months would constitute, in the Committee's view, grounds for, among other things, shortening, or even terminating, the Exclusivity Periods." * * * In light of the Committee's comments, delivered to the Court at the last minute, Judge Walsh directed that the Court would entertain the Debtors' Motion at the next omnibus hearing on October 28, 1999. (Harnischfeger Bankruptcy News Issue 12; Bankruptcy Creditor's Service Inc.) HARNISCHFEGER: Files Third Quarter 10-Q --------------------------------------- Harnischfeger filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q, for the quarter ending July 31, 1999. A full-text copy of the filing is available at no charge via the Internet at http://www.sec.gov/Archives/edgar/data/801898/0000801898-99- 000014.txt HECHINGER: Notice of Designated Lead Bidder ------------------------------------------- Hechinger Investment Company of Delaware Inc., et al. designate KIMCO Realty Corporation as a designate Lead Bidder and KIMCO's bid a designated lead bid with respect to certain properties. The aggregate purchase price is $50 Million. Overbids shall be at least 110% of the purchase price and a Break-Up Fee of 3% of the purchase price is provided in the proposed Asset Purchase Agreement. There are approximately 29 properties covered by the agreement, and 27 leases, with locations in Houston, TX, Spring, TX, Crestwood, MO, Indianapolis, IN, Clearwater FL, Kalamazoo, MI, Wichita, KS, Hamburg, NY, Chippewa Twp., PA, Racine, WI, Westminster, CO, Niagra Falls, NY, and Milwaukee, WI, Turnersville, NJ, Glendale, CO, Flint MI, Wichita KS, West Allis, WI, Milwaukee, WI, Grand Rapids, MI, Lancaster PA, West Mifflin, PA, Fort Collins, CO, Austin TX, Denver CO, Carnegie, PA and Dundalk, MD. HECHINGER: Seeks Approval of an Extension of Exclusivity -------------------------------------------------------- The debtors, Hechinger Investment Company of Delaware, Inc., et al. request that the court approve an extension of the exclusive periods during which the debtors may file a plan of reorganization and solicit acceptances thereto. The debtors are currently conducting numerous asset sales. The debtors have only begun to conduct an auction for the fee and leased properties relating to the initial 89 store closings. The are soliciting bids from third parties with interest in purchasing their leasehold interests and fee owned properties and are rejecting unexpired leases where appropriate. The plan negotiation process among the constituents has not begun, and an extension of time to determine the value of the estates is required before a plan can be negotiated and filed. Consequently the debtors are requesting an extension of the debtors' exclusive filing period and exclusive solicitation period to and including January 11, 2000 and March 9, 2000, respectively. HOME HEALTH: 13th Order Approving Use of Cash Collateral -------------------------------------------------------- The US Bankruptcy Court for the District o of Delaware entered an order on October 4, 1999 granting the debtors, Home Health Corporation of America, Inc., et al. the right to use cash collateral to pay those items delineated in the budget. The debtors may exceed items for the salary wages and benefits by 5% and may deviate from any other budgeted line items by any amount, so long as they do not exceed the total amount budgeted for expenditures. IMAGYN MEDICAL: Seeks Order Approving Settlement Compromise ----------------------------------------------------------- The debtors, Imagyn Medical Technologies, Inc., et al. seek an order approving a settlement compromising and dismissing class action and derivative action. A hearing to consider approval of the motion will take place on October 18, 1999 at 2:30 PM. Imagyn Medical Technologies Inc., et al. request that the court authorized the debtors to enter into a global settlement in connection with three related pre-petition actions: a consolidated securities class action a shareholder derivative action and an arbitration respecting insurance coverage for claims asserted in the class action and derivative action. The global settlement provides for the settlement of the Class Action for the sum of $5.75 million, which sum will be paid into a settlement fund for class members by National Union Fire Insurance Company of Pittsburgh Pa. on the defendants' behalf, and which payment is effectively conditioned upon he dismissal of the both the Class Action and the Derivative Action. LAROCHE INDUSTRIES: Engages PricewaterhouseCoopers -------------------------------------------------- On October 4, 1999, LaRoche Industries Inc., a Delaware corporation, engaged the services of PricewaterhouseCoopers to review the company's capital structure and business strategy and to develop recommendations for strengthening the company's competitive and financial position in light of both the current market conditions and projected cash requirement matters reported by the company. LONDON FOG: Announces Closing of Over 100 Outlet Stores ------------------------------------------------------ A joint venture composed of Hilco/Great American Group and Schottenstein Bernstein Capital Group LLC was appointed by the U.S.Bankruptcy Court in Delaware as the agent to dispose of over $100 million of inventory in 108 London Fog outlet stores. Store closing sales will commence at once under the direction of the Hilco/Great American Group and Schottenstein Bernstein Capital Group LLC. Hilco/Great American Group executive vice president, Harvey M. Yellen stated, `The joint venture partners are very pleased to have been selected by London Fog to assist them with their restructuring. Our joint venture comprises the foremost specialists in retail liquidation. The joint venture has paid top dollar to London Fog and we look forward to providing excellent value to consumers in the store closing sales.` Hilco/Great American Group and Schottenstein Bernstein Capital Group LLC are leading retail consulting, business evaluation and asset disposition firms. These joint venture partners offer quick, flexible and creative solutions to retailers of all sizes throughout North America. MARVEL ENTERPRISES: Dickstein Resigns As Director ------------------------------------------------- The following entities either own or have divested themselves of the common stock of Marvel Enterprises Inc.: Dickstein & Co., L.P., 3,526,600 shares, exercising sole voting and dispositive power, representing 9.8% of the outstanding shares of common stock; Dickstein International Limited, 434,502 shares, with sole voting and dispositive power representing 1.3% of the outstanding shares; Dickstein Partners, L.P., 3,526,600 shares, sharing voting and dispositive power over the 9.8% represented by its holdings; Dickstein Partners Inc., 3,961,102 shares with shared voting and dispositive power on the 10.9% of outstanding shares of the company, Mark Dickstein, 16,667 shares with sole voting and dispositive power, and 3,961,102 shares with shared voting and dispositive power represented by his 10.9% holdings; and Elyssa Dickstein with sole voting and dispositive power on her 157,450 or 0.5% share of the company. Dickstein Focus Fund L.P., Elyssa Dickstein, Jeffrey Schwarz, and Alan Cooper as Trustees U/T/A/D 12/27/88, Mark Dickstein, Grantor, and Mark Dickstein and Elyssa Dickstein, as Trustees of the Mark and Elyssa Dickstein Foundation no longer have shares in the company. On October 4, 1999, Mark Dickstein resigned as a director of Marvel Enterprises Inc. Under the terms of the stockholders' agreement, Mr. Dickstein designated Mr. Chaim Y. Edelstein as a successor nominee to serve as the "Dickstein Designee" on the company's Board of Directors. Together the reported persons beneficially own an aggregate of 4,135,219 shares of common stock, representing approximately 11.3% of the common stock outstanding. NATIONSWAY: Denver Claims It's Owed Unpaid Taxes ------------------------------------------------ The Denver Post reports on October 6, 1999 that Denver officials claim the bankruptcy estate of NationsWay Transport Service Inc. owes the city $294,750 in unpaid taxes and that the defunct trucking company has agreed to set aside proceeds from a recent sale of equipment at NationsWay's Denver headquarters until the city's claim is resolved. According to Denver Assistant City Attorney Eugene Kottenstette, NationsWay has agreed to "segregate" money received from the Sept. 27 auction of office equipment and to maintain at least $800,000 in one of its bank accounts. Those funds would be used to pay Denver should the city prevail in its case against NationsWay. The trucking operation is controlled by Jerry McMorris, one of the owners of the Colorado Rockies. Denver officials had assessed the value of furniture and equipment at NationsWay's Denver offices at $868,000. On Tuesday, a hearing before a U.S. Bankruptcy Court judge in Phoenix was to consider Denver's tax claims and NationsWay's response, but the court extended the date for taking up Denver's concerns, Kottenstette said. There also have been out-of-court talks between Denver officials and representatives of NationsWay's estate about settling the case. The city claims NationsWay owes business and occupational taxes, personal property taxes and use taxes. On May 20, NationsWay and its affiliates filed for Chapter 11 protection in the Phoenix court. In subsequent court filings, the companies filed documents with the bankruptcy court listing total assets of $104 million and liabilities of $103 million. At that time, NationsWay's lawyers cautioned that the asset value was based on accountants' assessment of the book value of assets and it did not necessarily reflect the proceeds NationsWay would get from the sale of assets. ONSALE INC: Egghead.com, Inc. Activates Web Site ------------------------------------------------ Egghead.com, Inc. intends to activate a web site related to the proposed merger of Egghead with Onsale, Inc. The web site should be in place at this reporting as Egghead intended to release the web site to its shareholders beginning on or after October 4, 1999. A description of the web site follows: A blue banner spans the top and left border of each page. The upper left corner contains the text: "egghead.com merger news." The upper right corner contains the text: "Merger with Onsale, Inc." The left border of the page contains several buttons which link directly to portions of Egghead's proxy statement. The bottom of each page contains navigational links to the previous and next pages, as applicable, and to the top of that page. The home page of the web site contains a copy of the letter from George Orban, the Chief Executive Officer of Egghead, to Egghead's shareholders that was previously mailed to Egghead's shareholders together with Egghead's proxy statement related to the merger. The second page of the web site contains a copy of the notice of special meeting of shareholders from Brian Bender, the Chief Financial Officer of Egghead, to Egghead's shareholders that was previously mailed to Egghead's shareholders together with Egghead's proxy statement related to the merger. The remaining pages of the web site contain the body of the proxy statement that was previously first mailed to Egghead's shareholders on September 24, 1999. Each line item in the table of contents contains a hyper-link to the corresponding section of the proxy statement. Certain page references and defined terms within the document also contain hyper-links to the corresponding pages or definitions. PARAGON TRADE: Equity Committee May Proceed Against Weyerhaeuser ---------------------------------------------------------------- On October 1, 1999, the US Bankruptcy Court for the northern District of Georgia, Atlanta division, entered an order allowing the Official Committee of Equity Security Holders to prosecute claims against Weyerhaeuser Company in the name of the estate. The claims arise from or relate to the transactions by which Paragon was formed and purchased assets from Weyerhaeuser, including , but not limited to, claims for indemnity or breach of representations or warranties under a certain Asset Transfer Agreement or Intellectual Property Agreement, claims for contribution, indemnity, or breach of fiduciary duty arising from or relating to the transaction; any other claims or theory arising from or relating to the transaction; and objections and counterclaims to the claims filed by Weyerhaeuser in its proof of claim in this proceeding. PINNACLE BRANDS: Court Further Extends Exclusivity -------------------------------------------------- The US Bankruptcy Court for the District of Delaware entered an order extending for approximately 60 days the periods during which only the debtors may file a plan and solicit acceptances thereof. Each of the debtors shall have the exclusive right to file a plan to and including November 1, 1999; and if the debtors file a plan on or before November 1, 1999, the time period within which each of the debtors shall have the exclusive right to solicit acceptances for their plan is extended to and including January 3, 2000. RAM ENERGY: Possible Bankruptcy Candidate ----------------------------------------- Mergers and Acquisitions Report reported on October 11, 1999 that some analysts believe that RAM Energy, Inc. may be the next small oil company to file the bankruptcy, while others said the company may be able to restructure itself without declaring Chapter 11. The article states that, "RAM faces a legitimate possibility of bankruptcy," according to Chase Manhattan Corp. high yield analyst Tom Parker. The company will at least need to restructure at some point, he said, noting that RAM is carrying too much debt relative to its cash flow. RAM's $108 million in 11.5% senior unsecured notes have seen a fairly steady trajectory downward, Parker said. The bonds opened 1999 at 65, fell to 52 by the end of June, and are currently trading at 43, he said. He declined to speculate on how low the bonds might drop. RAM bought back $7 million worth of bonds last year. RAM's lenders, Den Norske Bank and Union Bank of California, have reduced the company's credit facility from $50 million to $25 million, and have accelerated the maturity date. RAM has not missed any coupons yet, but if it cannot fund capital expenditures it may end up in Chapter 11 according to an anonymous source for the article. Tulsa, Okla.-based RAM is engaged in the exploration and production of oil and gas in Oklahoma, Texas and New Mexico. RAM lost $3 million for the second quarter on revenue of $7.8 million, compared to a year-earlier loss of $2.4 million on revenue of $8.2 million. RAM CFO John Longmire said, however, that the company would not receive an increase above $25 million for its credit facility even if the reserve report shows much higher numbers. Ram's agreement with its lenders doesn't allow for a deeper credit base, he said. The lenders also accelerated the maturity date of the revolver, originally scheduled for 2003, to June 2000. That called for RAM to pay $10 million by Sept. 30, although it recently got an extension until the end of the year, and then $5 million per quarter until next June, he said. The company had to concede certain requirements to Den Norske, which is getting out of providing finance for small, independent energy companies, he said. RAM will be able to make the payments, he predicted. Any of RAM's assets are for sale at the right price, Longmire said, although he declined to name a takeout price. The company has received no expressions of interest of which he's aware, he said. RAM's best bet is to stay afloat as long as it can, Parker said. Oil and gas prices will continue to rise, so the longer RAM stays away from bankruptcy court, the more favorable a deal it can strike with its creditors when the time comes, he said. SGL CARBON: Seeks To Extend Time To Assume or Reject Leases ----------------------------------------------------------- The debtor, SGL Carbon Corporation, seeks an order further extending the time within which the debtor shall assume or reject unexpired leases of non-residential real property. The debtor seeks an extension for 120 days, to and including February 14, 2000 the time in which it must move to assume or reject its unexpired leases of nonresidential real property. The debtor is lessee or sublessee with respect to approximately 15 unexpired leases of nonresidential real property. Because of the complexity of the ongoing reorganization process, the debtor has not had a sufficient opportunity to determine the value of each lease in light of future business plans. The debtor has already filed a reorganization plan. The debtor is engaged in the business of manufacturing, marketing and distributing certain carbon and graphite products. STAFF BUILDERS: Sells Chelsea Computer Consultants, Inc. -------------------------------------------------------- Staff Builders, Inc., one of the nation's largest home health care and staffing providers, has sold its entire interest in a majority-owned subsidiary, Chelsea Computer Consultants, Inc. to a subsidiary of MSX International of Auburn Hills, Michigan for $17.5 million, subject to a post-closing net asset book value adjustment. Of the purchase price, $14.5 million was paid in cash and $3 million was held back (pending completion of the spin-off of Staff Builders' home health care division), $500,000 of which was assigned to a former principal of Chelsea. Staff Builders also announced that the company is moving forward with the proposed spin-off of the home health care division, working actively toward completion. "We are pleased to have completed the sale of our ownership of Chelsea Computer Consultants," said Stephen Savitsky, Staff Builders Chief Executive Officer. "We are now focused on completing the proposed spin-off of our home health division as expeditiously as possible." Staff Builders, Inc. is an international provider of home health care services with over 107 locations in 25 states and the District of Columbia, as well as master franchises in Japan, Spain and Brazil. Staff Builders also provides supplemental staffing personnel under contractual arrangements to hospitals, nursing homes, clinics and other health care facilities with 56 locations in 27 states. QUEEN SAND: Deephaven & KA Investments Hold 26.6% Of Stock ---------------------------------------------------------- 26.6% of the outstanding shares of common stock of Queen Sand Resources Inc. is owned by Deephaven Market Neutral Master Fund LP, Deephaven Private Placement Trading Ltd. and KA Investments LDC. The former two companies are British Virgin Island organizations while the latter is of Cayman Island registration. Sole voting & dispositive power is held by each and represented in the 11,832,879 shares owned. This amount includes 371,428 shares of common stock held by KA Investments LDC., 11,461,442 shares of common stock issuable upon assumed exercise on September 30, 1999 of repricing rights held by KA Investments LDC entitling the acquisition of repricing shares (however, the actual number of shares of common stock issuable as repricing shares will fluctuate with the price of the common stock). VENCOR INC: Receives Final Court Approval Of DIP Financing ---------------------------------------------------------- Vencor, Inc. has received final approval from the United States Bankruptcy Court for the District of Delaware on the company's $100 million debtor-in-possession financing with a bank group led by Morgan Guaranty Trust Company of New York. The DIP Financing and existing cash flows will be used to fund the company's operations during the restructuring. As of October 1, 1999, the company had no outstanding borrowings under the DIP Financing. The Court also approved the company's motion to establish a vendor reclamation procedure. Vencor and its subsidiaries filed voluntary petitions for reorganization under Chapter 11 with the Court on September 13, 1999. The company is a long-term healthcare provider operating nursing centers, hospitals, and contract ancillary services in 46 states. WESTERN DIGITAL: Retires Debentures By Issuing Common Stock ----------------------------------------------------------- On September 30, 1999, Western Digital Corporation closed a transaction retiring in the aggregate $100 million principal amount of its Zero Coupon Convertible Subordinated Debentures due 2018 in exchange for shares of its common stock. As a result of this transaction and previous transactions, the company has retired debentures in the aggregate principal amount of $307.1 million and issued in exchange 10,121,355 shares of common stock. The total number of shares of common stock outstanding as of September 30, 1999, following these transactions, was 107,386,038. ZENITH ELECTRONICS: LGE Lashes Out at the Equity Security Holders ----------------------------------------------------------------- LGE Electronics, Inc. (LGE) submitted a statement to "underscore the complete lack of evidence for the accusations of wrongdoing by LGE that have been made by the Official Committee of Equity Security Holders and its individual member Nordhoff Investments, Inc." LGE asserts that the Equity objectors have no evidence that LGE imposed a plan of reorganization on Zenith. "The Equity objectors have failed to provide even a shred of evidence to support their conspiracy theory." According to LGE, the Equity Objectors also have no factual basis for their repeated allegation that the plan of reorganization was imposed by LGE through the exercise of its majority control and without the meaningful participation of others. The evidence, according to LGE show that the plan was the product of a fair and open process of negotiation among multiple constituencies, including LGE, Zenith management, the Special Committee, the Citicorp lenders, and the ad hoc committee of debenture holders. After LGE made its initial proposal, the Special Committee obtained significant concessions from LGE including an increase from $26 million to $40 million of the face amount of the new debentures to be issued to the bondholders, and the elimination of a "no shop" provision from the proposed restructuring agreement. The Bondholders Committee, after an investigation of its own, agreed to accept the plan after LGE made further concessions, which raised the amount of the new debentures to $50 million. LGE continues that the Equity Objectors have no evidence of their allegations that LGE interfered in efforts to pursue a sale or transaction with a third party. LGE also states that there is no evidence for the disallowance, equitable subordination or "recharacterization" of LGE's claims. LGE concludes that Zenith's prepackaged plan was not devised under LGE's exclusive direction and for LGE's sole benefit. LGE states that the record demonstrates that it evolved through negotiations with multiple constituencies and as a result of concessions by LGE, providing significant value to Zenith's general unsecured creditors and subordinated debenture holders - all of whose claims would be wiped out if LGE walked away and Zenith were liquidated. Meetings, Conferences and Seminars ---------------------------------- October 22-26, 1999 TURNAROUND MANAGEMENT ASSOCIATION 1999 Annual Conference The Fairmont--Atop Nob Hill, San Francisco, CA Contact: 1-312-822-9700 or ljfialkoff@turnaround.org November 4-5, 1999 MID-SOUTH COMMERCIAL LAW INSTITUTE Assessing the Present and Looking to the Future The Doubletree Hotel, Nashville, Tennessee Contact: 1-423-549-7000 or mmiller@bdbc.com November 11-13, 1999 AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION COMMITTEE ON CONTINUING PROFESSIONAL EDUCATION 11th Annual Advanced ALI-ABA Course of Study: The Emerged and Emergine New Uniform Commercial Code New York Hilton Hotel, New York City Contact: 1-800-CLE-NEWS November 17-20, 1999 AMERICAN BAR ASSOCIATION'S LATIN AMERICAN LAW SUBCOMMITTEE & THE ASSOCIATION OF COMMERCIAL BANKS OF THE DOMINICAN REPUBLIC Educational Exchange Case De Campo Resort, LaRomana, Dominican Republic Contact: 1-703-739-0800 November 29-30, 1999 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Distressed Investing '99 The Plaza Hotel, New York, New York Contact: 1-903-592-5169 or ram@ballistic.com December 2-4, 1999 AMERICAN BANRKUTPCY INSTITUTE Winter Leadership Conference La Quinta Resort & Club, La Quinta, California Contact: 1-703-739-0800 February 27-March 1, 2000 NORTON INSTITUTES ON BANKRUPTCY LAW Norton Bankruptcy Litigation Institute I Olympic Park Hotel, Park City, Utah Contact: 1-770-535-7722 March 23-25, 2000 SOUTHEASTERN BANKRUPTCY LAW INSTITUTE, INC. 26th Annual Southeastern Bankruptcy Law Institute Marriott Marquis Hotel, Atlanta, Georgia Contact: 1-770-451-4448 March 30-April 2, 2000 NORTON INSTITUTES ON BANKRUPTCY LAW Norton Bankruptcy Litigation Institute II Flamingo Hilton Hotel, Las Vegas, Nevada Contact: 1-770-535-7722 May 4-5, 2000 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Bankruptcy Sales & Acquisitions The Renaissance Stanford Court Hotel San Francisco, California Contact: 1-903-592-5169 or ram@ballistic.com June 29-July 2, 2000 NORTON INSTITUTES ON BANKRUPTCY LAW Western Mountains Bankruptcy Law Institute Jackson Lake Lodge, Jackson Hole, Wyoming Contact: 1-770-535-7722 ********* 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, 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 * * *