/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/991126.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, November 26, 1999, Vol. 3, No. 229 Headlines AZTORE HOLDINGS: Successfully Reorganizes as Investment Company BOSTON CHICKEN: Third Quarter Financial Reports Will Be Delayed CRIIMI MAE: Hearing & Disclosure Statement Deadline Postponement CRIIMI MAE: Reports Third Quarter 1999 Results DOW CORNING: Motion To Use Pre-Funding To Pay Finance Committee EVANS INC: Bloomingdale's and Rich's Object To Assignment FORSTMANN & CO: Stock No Longer Held By Grace Bros. HARNISCHFEGER: Motion To Dissolve Receivables Company JUST FOR FEET: Universal Capital Submits Winning Bid LATTICE SEMICONDUCTOR: Changes Fiscal Year LEVITZ: Motion To Sell Mesquite Property To May For $1.5M LITTLE SWITZERLAND: Expands Board/Announces Additional Nominees LITTLE SWITZERLAND: One-For-Five Reverse Stock Split Proposed LITTLE SWITZERLAND: Receives Tax Benefits/Sells Antigua Store LITTLE SWITZERLAND: Transferred To NASDAQ SmallCap Market LOEWEN: Monthly Operating Report LONDON FOG: Focusing on Auction of Leases PAGENET: Reports Third Quarter Results PHILIP HOLZMANN: German Construction Company Declares Bankruptcy SIZZLER INTERNATIONAL: CEO Says Turnaround Plan Shows Promise SIZZLER INTERNATIONAL: Proposes Stock Buy-Back Plan SOUTHERN MINERAL: Financial and Operating Results SUN HEALTHCARE: Motion To Sell 3.28 Acres To TU Electric SUN TV: Approval of Disclosure Statements VENCOR: Motion To Assume & Assign Aircraft Purchase Agreement ********* AZTORE HOLDINGS: Successfully Reorganizes as Investment Company --------------------------------------------------------------- Aztore Holdings, Inc. (OTC "AZHG"), the successor to ShareData Inc., announced today that it has successfully implemented its reorganization plan and has been formally discharged from Chapter 11 bankruptcy. ShareData Inc., whose stock traded on the NASDAQ as "SHRD", originally filed for Chapter 11 bankruptcy in December 1993. ShareData filed its reorganization plan in May 1995 and its plan was confirmed by the Bankruptcy Court in December 1995. On January 1, 1996, the Company began operating as a closed-end, management investment company. It also performs consulting and investment banking services. Michael S. Williams, Aztore's President stated, "We are operating as an investment company under a unique exemption from regulation under the Investment Company Act of 1940. This is due to special provisions applying to companies reorganized in bankruptcy. However, to maintain this exemption, we must abide by certain restrictions. We do not believe these restrictions will materially limit our operations in the future. From a regulatory standpoint, we expect to file reports under the Securities Exchange Act of 1934 and become a fully reporting public company within the next six months." Aztore's Unaudited Interim Net Asset Value and Realized Gains for the period ended September 30, 1999. The Company estimates its net asset value is currently in excess of $ 4,000,000. This includes net realized gains on its portfolio during the nine months of 1999 in excess of $1,900,000. During this period, the Company also made two "bridge" loans, which were successfully collected upon the "bridge" events, earning the Company approximately $300,000. The Company also completed a merger advisory assignment in September 1999 and earned a fee of over $500,000. After these transactions, the Company estimates it still has a remaining federal tax net operating loss carry- forward of more than $6,000,000. Lanny R. Lang, Aztore's Chief Financial Officer stated, "We are not reporting our complete unaudited results for the quarter and nine-months ending September 30, 1999 at this time. There is still some uncertainty regarding our specific valuation and revenue recognition policies. We will not be able to finalize our financial statements, as an exempt investment company, until we can review our full valuation policies with our auditors. We are, however, reporting an estimated interim net asset value and our realized gains for the period, since we believe this information is material to shareholders' decisions about their investment. We are currently soliciting an independent accounting firm for completion of our audited financial statements for the years ending December 31, 1997 through 1999. This will allow the Company to file its Form 10 Registration Statement and apply for listing on the OTC-Bulletin Board," continued Lang. In its four years as an investment company, the Company has developed several significant investment positions, which include Profit Recovery Group International, Inc. (NASDAQ - "PRGX"), Beta Oil & Gas, Inc. (NASDAQ "BETA"), Ebiz Enterprises, Inc. (OTC - "EBIZ") and Sooner Holdings, Inc. (OTC-BB - "SOON"). The Company also has investment positions in Entrada Software, Inc., a Scottsdale, Arizona-based software company, which expects to be trading in early 2000; Quality Care Solutions, Inc., a Phoenix, Arizona-based medical claims software company integrated with proprietary Internet based processing capability and OHost Corporation, a Tempe, Arizona-based internet company, which controls the first fully bilingual, Korean language vertical internet portal called KoreaStation.com. The Company also holds an interest in each of the nine, non- trading public companies referred to as the "D-Bar companies". The D-Bar companies emerged from Chapter 11 bankruptcy in April 1998 after approval of a reorganization plan by the Bankruptcy Court in Ft. Worth, Texas. The plan that created these public companies was architected by Aztore. The Company received its interests in the D-Bar companies for its direct cash investment as well as its fees incurred during the reorganization as the advisor to the D-Bar companies' predecessor. In addition, the Bankruptcy Court in Phoenix, Arizona recently confirmed a similar reorganization plan for Technical Systems Integrators, Inc. ("TSI"), a Phoenix, Arizona-based technology company. TSI filed Chapter 11 bankruptcy in April 1999 after TSI's senior creditor group hired the Company in February 1999 to advise it on TSI's reorganization. The Aztore-architected reorganization plan for TSI creates six non-trading public companies. When TSI's plan becomes effective, the Company will receive an interest in each of these six companies for its direct cash investment as well as its fees incurred during the reorganization. Aztore Holdings, Inc. is a closed-end, management investment company which specializes in investing and lending to small public companies with high growth potential and/or which are financially extended. The Company also acts as a merchant and investment banker and as a consultant. The Company has approximately 8,000,000 shares of common stock outstanding as well as approximately 8,670,000 warrants equally divided into three series with exercise prices of $.50, $1.00 and $1.50. The Company has offices in Phoenix, Arizona and Houston, Texas with its corporate office located at 3710 East Kent Drive, Phoenix, Arizona 85044. For more information, please contact Michael S. Williams, President, at (480) 759-9400 or by E-mail at Mike@Aztore.com. BOSTON CHICKEN: Third Quarter Financial Reports Will Be Delayed --------------------------------------------------------------- As previously reported, PricewaterhouseCoopers, LLP, advised Boston Chicken that, absent sufficient competent evidential matter to support both the appropriateness of certain accounting methods and principles and the reasonableness of certain assumptions used by prior management in reporting certain estimates, PwC would likely be unable to opine on the Company's fiscal 1998 financial statements. The Company believed that its 1997 year-end financial statements and possibly certain other prior period financial statements would be re-audited and restated. However, PwC subsequently advised the Company it will not opine on the Company's 1997 or other prior period financial statements. In addition, PwC has advised the Company that because it will not opine on the 1997 year-end balance sheet, it also will not opine on the Company's 1998 cash flow or income statements, and is still in the process of auditing the Company's fiscal 1998 year-end balance sheet. Management believes it could be materially misleading to issue quarterly financial information prior to the completion of the 1998 year-end balance sheet audit and, therefore, does not expect to file its Quarterly Report on Form 10-Q for the quarter ended October 3, 1999 on a timely basis. Boston Chicken indicates that the results of operations for the third quarter of 1999 will be improved compared to the respective quarter in 1998 due to non-recurring store closure charges and loan impairments recorded in 1998. (Boston Chicken Bankruptcy News Issue 18; Bankruptcy Creditor's Service Inc.) CRIIMI MAE: Hearing & Disclosure Statement Deadline Postponement ---------------------------------------------------------------- Judge Duncan W. Keir of the United States Bankruptcy Court in Greenbelt, Md. rescheduled to November 1, 1999, a hearing on a motion by Criimi Mae Inc. to approve bidding protection provisions of the recently announced Stock Purchase Agreement with an affiliate of Apollo Real Estate Advisors IV, L.P. Judge Keir also extended to November 1, 1999, the due date for Criimi Mae Inc. and two affiliates to file their proposed disclosure statement for their Joint Plan of Reorganization. On September 9, 1999, Criimi Mae announced that Apollo agreed, subject to a number of conditions, to participate in financing an approximately $910 million plan of reorganization whereby Criimi Mae would emerge from Chapter 11. On October 5, 1998, the company and two affiliates filed for protection under Chapter 11 of the U.S. Bankruptcy Code. Before filing for reorganization, the company had been actively involved in acquiring, originating, securitizing and servicing multi-family and commercial mortgages and mortgage related assets throughout the United States. Since filing for Chapter 11 protection, Criimi Mae has suspended its loan origination, loan securitization and CMBS acquisition businesses. The company continues to hold a substantial portfolio of subordinated CMBS and, through its servicing affiliates, acts as a servicer for its own as well as third party securitizations. At the hearing scheduled for November 1, 1999, Judge Keir approved the motion (filed by Criimi Mae Inc. with the support of the Official Committee of Unsecured Creditors and the Official Committee of Equity Securities Holders) to postpone until after November 15, 1999 the hearing on the pending motion to approve the bidding protection provisions in the Stock Purchase Agreement. Likewise, the date for the company and two affiliates to file the proposed disclosure statement with respect to its Joint Plan of Reorganization was extended to the same date. The Court approved the immediate payment of $400,000 to Apollo for reimbursement of expenses incurred with respect to the Agreement, continuing negotiations, due diligence and related matters. The Court was advised of active discussions between the company, Apollo and the Committees to fashion an amended plan of reorganization that can be supported by the parties. CRIIMI MAE: Reports Third Quarter 1999 Results ---------------------------------------------- Criimi Mae Inc., for the three and nine months ended September 30, 1999, reports net income available to common shareholders for the three months ended September 30, 1999 was $8.1 million. On a tax basis, Criimi Mae had a loss for the third quarter of approximately $17.8 million. This compares to a net loss for last year's third quarter of approximately $8.7 million. For last year's third quarter, tax basis income available to common shareholders was approximately $19.9 million. For the first nine months of 1999, tax basis income was approximately $13.7 million, compared to approximately $57.3 million for the first nine months of 1998. The sale of unsecuritized mortgage loans in one of the company's warehouse facilities in the third quarter of 1999 resulted in cumulative losses of approximately $36.3 million. Criimi Mae's shareholders' equity decreased to approximately $259 million ($3.86 per diluted share) at quarter end, from approximately $281 million ($4.24 per diluted share) at June 30, 1999. The decrease in shareholders' equity during the quarter primarily resulted from an aggregate $30.5 million decrease in the fair value of the company's portfolio of commercial mortgage-backed securities (CMBS) and insured mortgage securities. The company's net interest margin decreased by approximately $370,000 on a tax basis for the third quarter of 1999 compared to the third quarter of 1998. The decreases in net interest margin were primarily due to an increase in interest expense related to certain financing facilities that were outstanding for only a portion of last year's third quarter, versus the entire third quarter of 1999. DOW CORNING: Motion To Use Pre-Funding To Pay Finance Committee --------------------------------------------------------------- Dow Corning and the Tort Claimants' Committee, as the Proponents of the Joint Plan, ask the Court for permission to use the $1,000,000 previously authorized for pre-funding of the Settlement Facility to pay fees and expenses for the members of the Finance Committee. Dow Corning relates that they and the Tort Claimants' Committee have agreed to the appointment of: Judge Katherine Kennedy, currently a District Judge in Harris County, Texas, as the Claims Administrator who will oversee the Settlement Facility's claims-processing and payment systems; and Frank Andrews, currently a Special Master in the MDL-926 litigation, as the individual to serve as the Appeals Judge; to the Finance Committee. The third individual to serve as the Special Master is not yet identified. To enable timely implementation of the Settlement Facility, assuming the Joint Plan is confirmed, the Debtor and the TCC believe it is necessary now to engage Judge Kennedy and Mr. Andrews in light of the numerous policy issues and procedural decisions that must be made to establish the Settlement Facility. The salaries to be paid to Judge Kennedy and Mr. Andrews, the Debtor advises Judge Spector, are to be determined by Judge Pointer in Alabama. (Dow Corning Bankruptcy News Issue 71; Bankruptcy Creditor's Service Inc.) EVANS INC: Bloomingdale's and Rich's Object To Assignment --------------------------------------------------------- Bloomingdale's Inc. and Rich's Department Stores, Inc. object to the assumption and assignment of certain executory license agreements between Bloomingdale's or Rich's as licensor, and Evan's Inc., one of the debtors, as licensee. Bloomingdale's asserts that it has not been provided with adequate assurance that Birger, or any other successful bidder will be able to perform the debtor's obligations under the Bloomingdale's License Agreement. Bloomingdale's requests that the cure amount for the License Agreement as $270,483. Rich's, as a means of preserving its rights, objects to the assignment of the License Agreement to any entity other than Birger, pending assurances that such entity will be able to perform under the assigned agreements. FORSTMANN & CO: Stock No Longer Held By Grace Bros. --------------------------------------------------- Grace Brothers, Ltd., broker/dealer, has announced that, as of November 19, 1999, it no longer holds stock in Forstmann & Co., Inc. HARNISCHFEGER: Motion To Dissolve Receivables Company ----------------------------------------------------- Under a Receivables Sale and Contribution Agreement among HII, Harnco, H&S, American Alloy, Joy and Harnischfeger Receivables Company, dated February 26, 1999, certain accounts receivable were sold on a revolving basis to HRC in exchange for which HRC paid cash and a subordinated note. The Sale Agreement also provided that HRC issue all of its stock to Harnco in exchange for which Harnco contributed $4,500,000 of receivables. Under a Receivables Transfer and Servicing Agreement among HII, Harnco, H&S, American Alloy, Joy, HRC and The Chase Manhattan Bank, as administrative agent and purchaser, dated February 26, 1999, HRC sold to Chase, as purchaser and on a revolving basis, all of HRC's right, title and interest in and to certain of the receivables and related property transferred to HRC under the Sale Agreement. HRC is a bankruptcy remote, non-debtor Delaware corporation, and HRC has no creditors. No receivables are being sold to HRC under the Sale Agreement. Because HRC no longer serves the purpose for which it was incorporated, the Harnco seeks Court authority to permit its Board of Directors to take all corporate action necessary to dissolve and wind-up HRC. (Harnischfeger Bankruptcy News-Issue 15; Creditor's Bankruptcy Services Inc. JUST FOR FEET: Universal Capital Submits Winning Bid ---------------------------------------------------- Universal Capital Group announced today that at an auction held on November 19, 1999 in the U.S. Bankruptcy Court for the District of Delaware, it submitted the winning bid to manage the inventory liquidation, approximating $90 million, for 37 Just for Feet (Nasdaq:FEET) superstore retail outlets. Minneapolis-based Universal Capital will conduct going-out-of-business sales at 37 outlets in ten states, including: four outlets in Minnesota; nine outlets each in New Jersey and New York; seven outlets in Virginia; two stores each in Massachusetts and Texas; and one store each in Alabama, California, Connecticut and Nevada. Just for Feet, headquartered in Birmingham Alabama, filed a petition for Chapter 11 relief on November 4th, 1999. The company retails a broad array of high-quality name brand sports merchandise including footwear and apparel from such famous makers as Nike and Reebok to Adidas and Asics. Mike Catain, Universal Capital Group President and COO, said, "Just in time for the holidays, consumers won't find better deals or selection on top name brand footwear and apparel. Already known for offering some of the best bargains in the sporting goods industry, Just for Feet's closing locations will now offer even lower prices to liquidate the excess inventory by Christmas." "In addition to offering the best selection of footwear, whether its for running, hiking or team sports, Just for Feet also offers some of the best deals on terrific apparel from socks to hats and everything in between. Just for Feet's special in-store Combat Zone is also an awesome place to shop for deeply-discounted closeout footwear with prices ranging up to 70% off." "Now is a great time for consumers to come in and shop for holiday gifts. We're selling everything to the bare walls and consumers won't believe the tremendous bargains we're offering until they see them! Come early for the best selection!" said Catain. Company officials said the sales will begin on Wednesday, November 24th and that the stores are being readied for the large crowds expected the day after Thanksgiving -- traditionally the year's biggest shopping day. Universal Capital said that they have retained a number of store employees to handle the going-out-of-business sales and that financial incentives and job-placement assistance will be provided for those employees that are retained to handle the store closing process. Job fairs may be held in some cities for interested prospective employers and Universal will make those announcements locally. Catain said, "Once again, Universal Capital tendered the winning bid to manage the inventory liquidation for a national retailer as a result of our ability to keep expenses low and, through a well-managed liquidation process, maximize the proceeds to the company and its creditors. Although a relative newcomer to the liquidation industry, we're quickly making our mark, which is evidenced by the number of deals we've managed this year alone." "Since the Fall of 1998, Universal has managed inventory liquidations for several well-known retail chains, including: Sun Television and Appliances, once a 59-store chain operating in eight states; LOT $OFF, a 45-store deep-discount chain operating in five states; MJDesigns, a 35-store specialty retailer of arts and crafts merchandise; Three D Bed & Bath, a 13-store specialty retail chain selling home textiles, decorative housewares and other home fashion items; Jay Jacobs, a 114-store specialty apparel chain; Pacific Linen, a 28-store home decor chain and now for 37 of Just for Feet's 300+ stores." Organized in 1996, Minneapolis-based Universal Capital Group is an established full-service retail consultant serving both retail management and asset-based lenders. Universal provides a variety of services including strategic store analyses, inventory evaluation, collateral monitoring and inventory liquidation. Universal also provides a mezzanine financing service to assist lenders and businesses with their funding and liquidity needs. The Company has handled liquidations in hundreds of locations throughout the United States, representing more than $500 million in merchandise sales. LATTICE SEMICONDUCTOR: Changes Fiscal Year ------------------------------------------ On November 9, 1999, the Board of Directors of Lattice Semiconductor Corporation, a Delaware corporation, approved a resolution to change its accounting from a fiscal year ending on the Saturday closest to March 31 to a fiscal year ending on the Saturday closest to December 31. Consequently the company will file an annual report for the nine-month fiscal year ending January 1, 2000. LEVITZ: Motion To Sell Mesquite Property To May For $1.5M --------------------------------------------------------- The Debtors' store located at 18633 LBJ Freeway in Mesquite, Texas, was closed and the property was put on the market. Grubbs & Ellis scouted for buyers. G&E's efforts culminated in a $1,500,000 cash offer from Mays & Company Real Estate Development, Inc., for the Debtors' fee simple interest in the Mesquite Property. By this Motion, the Debtors seek authority to consummate a sale of the Mesquite Property to Mays for $1,500,000 under the terms of a Purchase and Sale Agreement dated October 8, 1999. Although the Debtors are convinced that Mays' offer is the highest and best, the Debtors and Mays agree to subject Mays' offer to a competitive bidding process. Competing bidders may submit cash offers, starting at $1,575,000, to Debtors' counsel no later than December 7, 1999. If a competing bid is received, the Debtors will conduct an auction. Mays will be entitled to a $25,000 Break-Up Fee in the event its bid is topped by a competing bidder. The Debtors ask Judge Walrath for additional authority to pay G&E a 5% sales commission from the Sale Proceeds. (LEVITZ FURNITURE Bankruptcy News Issue 40; Bankruptcy Creditor's Service Inc.) LITTLE SWITZERLAND: Expands Board/Announces Additional Nominees --------------------------------------------------------------- Little Switzerland, Inc.'s Board of Directors has nominated Kenneth W. Watson and Peter R. McMullin for election at the company's annual meeting scheduled for December 21, 1999. Mr. Watson has been serving on Little Switzerland's board of directors since 1991, and Mr. McMullin since April 1999. Little Switzerland also announced that Seymour Holtzman, and Richard Siegel, have been appointed to the company's Board of Directors, effective as of the December 21/st annual meeting. The appointment of Mr. Holtzman and Mr. Siegel increases the size of Little Switzerland's Board of Directors from six to eight members. Mr. Holtzman is founder and chief executive officer of Jewelcor, Inc. and founder and former chief executive officer of Gruen Marketing Corporation. Mr. Holtzman has managed public companies for over 25 years and is currently a director of Ambanc Holding Company, Inc. Mr. Holtzman has been appointed a Class III Director whose term will expire at Little Switzerland's annual meeting of shareholders in 2000. Mr. Siegel is general counsel for Sturm Group, Inc., a private investment firm headed by Donald L. Sturm. He will be a Class I Director with a term expiring at the annual meeting of shareholders in 2001. Mr. Robert Baumgardner, President and CEO of Little Switzerland, praised the new board appointees, saying, "Seymour Holtzman is a recognized business leader. We look forward to benefiting from his keen insights and his many years of successful experience in the retail jewelry industry. Richard Siegel is a distinguished attorney whose counsel and guidance will be a tremendous asset as Little Switzerland continues its efforts to redevelop its business." LITTLE SWITZERLAND: One-For-Five Reverse Stock Split Proposed ------------------------------------------------------------- From its headquarters in St. Thomas, U.S. Virgin Islands, Little Switzerland, Inc. announces the company's Board of Directors has approved a one-for-five reverse stock split of its common stock. The company stated that this stock split is being undertaken in an effort to allow it to remain eligible for listing on Nasdaq. Nasdaq previously had informed Little Switzerland that it would not remain eligible for trading on Nasdaq unless it could show compliance with the continued listing requirements, including the minimum $1.00 per share bid requirement. As a result, the company has requested that Nasdaq permit a transfer to Nasdaq's SmallCap Market System. The Board of Directors will submit this reverse stock split proposal to stockholders for approval at the company's annual meeting of stockholders scheduled for December 21, 1999, with a record date of November 26, 1999. At the annual meeting, Class II Directors will be elected with a term expiring at the 2002 annual meeting. Little Switzerland, Inc. is a leading specialty retailer of brand name watches, jewelry, crystal, china, fragrances and accessories, operating 20 stores on six Caribbean islands, and two stores in Alaska cruise ship destinations. The company's primary market consists of vacationing tourists attracted by free-port pricing, duty-free allowances and a wide variety of high quality merchandise. LITTLE SWITZERLAND: Receives Tax Benefits/Sells Antigua Store ------------------------------------------------------------- Little Switzerland, Inc. has been notified by the Industrial Development Commission of the United States Virgin Islands ("IDC") that it has renewed certain tax benefits for its wholly-owned subsidiary, L.S. Wholesale, Inc., which had expired at the end of August 1998. The IDC further informed the company that the benefits will be applied retroactively to the end of August 1998 and are for a five year period. Thus, as a result of the renewal, L.S. Wholesale will enjoy the benefit of a 75% exemption from taxes on income received from activities conducted outside of the United States Virgin Islands, which results in an effective tax rate of approximately 9.3%. In addition, L.S. Wholesale will enjoy a 75% exemption from gross receipts tax. The company also has closed the sale of all of the assets and goodwill of its store located in Antigua for an aggregate purchase price of $2.0 million, of which the company has received a $1.5 million payment. The balance of the purchase price is to be paid in two installments in the spring of 2000. The company used the $1.5 million in proceeds to pay down its debt to its existing lenders under its credit facilities. Robert Baumgardner, president and chief executive officer of Little Switzerland, stated that, "The sale of the Antigua store is the company's first strategic step in reducing its current debt. Management continues to work towards obtaining alternative financing to address the overall liquidity and capital concerns of the company." Mr. Baumgardner concluded, "Management and the Board of Directors of Little Switzerland are continuing to review all of the company's strategic options which we believe are necessary to return the company to profitability." LITTLE SWITZERLAND: Transferred To NASDAQ SmallCap Market --------------------------------------------------------- Little Switzerland, Inc. has been notified by The Nasdaq Stock Market, Inc. that its common stock was to be transferred to The Nasdaq SmallCap Market(SM) effective at the opening of business on Friday, November 12, 1999. The company's new trading symbol will be "LSVIC." The company's president and chief executive officer, Robert Baumgardner, stated "We are pleased with NASDAQ's decision to permit the company's stock to be transferred to SmallCap. We believe that continued listing on NASDAQ is important to maintain liquidity for the company's stockholders. " The company's continued listing on SmallCap is subject to certain conditions, including (i) obtaining asset-based financing to pay down its existing debt and for working capital purposes and (ii) effecting a reverse stock split which is subject to approval by the company's stockholders at its annual meeting which is currently scheduled for December 21, 1999. Although the company indicates it will work diligently towards meeting these conditions, there is no assurance that it will be able to do so and that any actions proposed to be taken by the company to maintain its SmallCap listing will be effective. LOEWEN: Monthly Operating Report -------------------------------- THE LOEWEN GROUP, INC. reports total assets as of August 31, 1999 of $4,439,109,000. THE LOEWEN GROUP, INC. reports for the month ended August 31, 1999 net income of 145,000 Retained deficit, beginning of period (644,334,000) Retained deficit, end of period ($644,189,000) For the month ending September 30, 1999, THE LOEWEN GROUP, INC. Reports Net income for the period of 4,275,000 Retained deficit, beginning of period (644,189,000) Retained deficit, end of period ($639,914,000) THE LOEWEN GROUP, INC. reports for the month ended September 30, 1999, cash and cash equivalents at the end of the period of $72,130,000. LONDON FOG: Focusing on Auction of Leases ----------------------------------------- With several significant developments occurring on Nov. 19, London Fog Industries Inc. continues to make significant progress in its bankruptcy reorganization. The rainwear manufacturer and retailer submitted bidding procedures, outlined below, to the bankruptcy court on Friday regarding an auction of its retail store leases. Counsel for London Fog said that the company is in the process of evaluating its leases to see if they have value and should be assumed and then sold. (The Daily Bankruptcy Review and ABI November 24, 1999) PAGENET: Reports Third Quarter Results -------------------------------------- Paging Network, Inc. (Nasdaq:PAGE), which yesterday announced an agreement to merge with Arch Communications Group Inc., today reported financial results for the quarter ended September 30, 1999. Third quarter 1999 consolidated net revenues were $231.0 million, compared to $246.8 million reported in the same period last year. Consolidated Adjusted EBITDA(1) declined to $59.1 million, compared to $87.1 million in the third quarter of 1998. Consolidated Free Cash Flow(2) was negative $34.4 million in the 1999 third quarter, compared to a negative $31.8 million in the same period last year. Consolidated capital expenditures were $56.9 million in the third quarter of 1999, compared to $36.4 million in the second quarter of 1999 and $83.6 million in the third quarter of 1998. Third quarter 1999 consolidated net loss was $49.5 million, a loss of $0.48 per share. PageNet's core paging business generated net revenues of $223.4 million in the third quarter of 1999, compared to core paging revenues of $241.8 million in the third quarter of 1998. The company's core business generated Adjusted EBITDA of $71.4 million in the third quarter of 1999, a 24 percent decrease from third quarter 1998 levels. Vast Solutions, established in July 1999, generated $0.5 million in revenues in the third quarter of 1999, and reported a quarterly EBITDA loss of $9.1 ,million. PageNet said Vast has made significant progress on several initiatives, including business-to-business solutions for major companies, Internet-based wireless content services, and development of a network-independent wireless gateway for the wireless information industry. The company continues to be in compliance with the covenants of its domestic credit facility. Under the terms of this credit facility, PageNet is permitted to "add back" certain items to its domestic EBITDA to test compliance with credit facility covenants. In addition, Vast is operated as an unrestricted subsidiary and its results are not included in the compliance calculations. Excluding these numbers, the EBITDA for bank compliance purposes was $77.4 million in the third quarter of 1999. Under the terms of its senior subordinated notes, PageNet is currently restricted from incurring additional debt. As of November 5, 1999, the company had approximately $50 million in cash, which it considers sufficient for its needs into the first quarter of 2000. At the end of the third quarter, PageNet's long- term domestic debt was $1.946 billion, compared to $1.814 billion at June 30, 1999. The company experienced a net reduction of approximately 462,000 domestic units in service in the third quarter of 1999, mainly due to PageNet's continued rationalization of its customer base and intensifying price competition in the market for paging services. The company said approximately two-thirds of the loss in units in service was a result of continued weakness in PageNet's reseller channel, and that most of these losses were of subscribers to lower-cost numeric services. About 120,000 of the units lost are attributable to the previously disclosed cancellation of units from a national account relationship and the bankruptcy of a major reseller. Approximately 122,000 more of the net reductions represent reconciliation of PageNet's reseller account records as they are converted to the Centers of Excellence (COE) platform, as well as the elimination of certain non-revenue-generating "phantom" units. The company expects that price competition, conversions and systems reconciliation will continue to have a negative impact on the company's subscriber count in the fourth quarter. The company said the continuing loss of subscribers has been partially offset by gains in higher-end customers. Also, the company's salesforce reorganization has contributed to improved gross additions in units in service, which have been trending higher during the past four months. Core domestic third quarter 1999 average monthly service revenue per unit (ARPU) declined to $7.78 from $7.84 per unit in the second quarter of this year. Third quarter ARPU was 3 percent higher than the$7.59 reported in last year's third quarter. PageNet attributed the decline to the continuing impact of heightened price competition. PageNet said it held its operating expenses steady during the quarter by continuing to implement aggressive cost control policies. The quarter's decline in revenues, however, more than offset the impact of stable costs. PageNet said that it continued to focus on three key initiatives during the third quarter: the restructuring of its operations, the build-out and commercial launch of PageNet's advanced network, and the creation and commercialization of the business opportunities within Vast Solutions. PageNet's operational restructuring program is aimed at improving the performance and reducing the cost structure of PageNet's historical core business through the creation of four Centers of Excellence (COEs). The new structure also will provide the company with the operating platforms to facilitate long-term growth. The new COE platform now serves approximately 50 percent of PageNet's U.S. customers, an increase from the 25 percent level at the end of the second quarter. Offices transitioned in the third quarter include Denver, Louisiana, Michigan, Kansas City, St. Louis, Chicago and Boston. The company said it would continue to implement its plans to convert its direct and indirect customers to the COEs throughout the rest of this year and into the year 2000. PageNet has substantially completed the construction of its Reflex 25 advanced messaging network, and the company received the first Two Way units for the network in mid-October. The units are currently being tested on the advanced network, and the company expects to begin a large-scale usage test of the Two Way network late in the fourth quarter, when a larger number of units are delivered. The Company believes its network to be the largest of its kind, with the highest capacity and most density of coverage in the industry. In June, PageNet announced the formation of Vast Solutions to focus and accelerate the development and commercialization of several advanced wireless ventures. As part of PageNet's proposed merger with Arch Communications, Vast will become an independent entity. Vast said it is pleased with the progress being made on a number of initiatives, including creating several new alliances, products and services that were announced during the third quarter. During the quarter, Vast announced the first sale of the Wireless Extension for Unicenter TNG, a product developed jointly by Vast and Computer Associates International, Inc. Vast also announced the TWIST application leveraging alliances with Computer Associates and 3Com, along with new relationships with Critical Path and Siebel Systems. Vast has also made major strides in solidifying its management team and focusing its sales and marketing efforts on well-defined target markets and industry sectors. Paging Network, Inc. is a leading provider of wireless messaging and information services with more than 9 million subscribers in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and Canada. The company offers a full range of paging and advanced messaging services, including guaranteed-delivery messaging, two-way wireless e-mail, and global messaging. PageNet's wholly owned subsidiary, Vast Solutions, plans to introduce a variety of customized information services for pagers and other devices, partnering with content providers such as Yahoo!, CNN, Bloomberg, ESPN and others. Additionally, Vast Solutions develops integrated wireless solutions to increase productivity and improve performance for major corporations. Detailed information for PageNet services are available on the Internet at www.pagenet.com. PHILIP HOLZMANN: German Construction Company Declares Bankruptcy ---------------------------------------------------------------- Philipp Holzmann AG, a 150-year-old construction company in Germany, and the second largest such company in the country, filed for bankruptcy yesterday after it failed to reach an agreement with bankers on a $1.5 billion bailout, the Associated Press reported. Chancellor Gerhard Schroeder said he would meet today with creditors in a "last try" effort to save the company, which built opera houses and train stations in the19th century, as well as skyscrapers, bridges and dams in the 20th century. Schroeder is under pressure to reduce unemployment in Germany and said that the government would "use a lot of imagination" to help the company. One possibility is a government guarantee for a loan of $159 million. Holzmann employs about 18,000 people, as well as tens of thousands of workers at its suppliers. The company filed a bankruptcy application yesterday morning in district court in Frankfurt. A week ago the company shocked markets when it revealed losses of $1.3 billion because of what it called mismanagement by former executives; prior to this announcement, the company had said it was close to a turnaround after years of losses. (ABI 24-Nov-99) SIZZLER INTERNATIONAL: CEO Says Turnaround Plan Shows Promise ------------------------------------------------------------- Sizzler International, Inc. has experienced a 28% increase in earnings per diluted share and gains in its total revenues for the second quarter of fiscal 2000 ended October 17, 1999. Net income for the second quarter was $2.06 million versus $1.60 million in the same period a year ago. "Our gains in earnings primarily reflect the result of our continuing focus on cost controls combined with sales increases," said Sizzler International, Inc. President and CEO Charles Boppell. For the 12 weeks ended October 17, 1999, Sizzler reported revenues of $55.3 million, up 8.3% over the $51.0 million in the comparable period in Fiscal 1999. Commenting on Sizzler's recent results and new strategic focus, Boppell remarked, "We are solidly underway with our new management team's turnaround plan. By the middle of next year, we will have upgraded the quality of our food and improved the salad bar offerings in all of our company operated U.S. restaurants." "Although it is too early to draw definitive conclusions from the restaurants that are already featuring these improvements, the feedback we are getting from customers is very positive and same store growth is strong in those locations. We have also started remodeling our locations to give them a softer, quieter, and updated feel, but are still retaining our casual dining theme. This program is expected to be completed for the entire system by the middle of 2001," Boppell added. For the 24 weeks ended October 17, 1999, Sizzler reported revenues of $112.27 million versus $103.59 million in the same period last year, which is a gain of 8.4%. Net income for the first half was $4.57 million compared with $3.67 million in the same period a year ago. At October 17, 1999, Sizzler reported total assets of $111.15 million and shareholders' investment of $56.75 million. The company had 28,776,134 shares issued and outstanding, down from 28,797,828 at the end of fiscal 1999. "Due to the limited number of locations that have our new food and cooking methods, this quarter's company-wide same store results are not representative of the success of this new program. However, looking only at those locations offering the higher quality food, we have seen same store sales increase even in the early weeks following the change," remarked Mr. Boppell. Same store sales decreased 0.6% across all U.S. Sizzler locations, and increased 2.0% in the Australian Sizzler locations. Sizzler's KFC units posted a 6.4% increase in same store sales for the second quarter. In addition to strong same store sales increases for locations with new, higher quality food and improved cooking methods, Sizzler has seen an increase in customer counts and a shift in the entree choices of its patrons. "Since making these changes, guest counts have increased, which we believe is an indication of the stronger customer acceptance of our improved food and cooking methods. We also believe that by offering higher quality and giving customers better options, we will win back customers who haven't visited Sizzler in a while," Boppell said. Improvements in food quality and cooking methods began in selected company-owned Sizzler locations in late August, 1999, and will be complete in all locations by mid-2000. As of the end of the second quarter, one restaurant had been remodeled, with plans to complete all 266 domestic Sizzlers by the end of 2001. "Based on early indications of a successful turnaround strategy and other positive financial trends, we expect to achieve continuing gains in Sizzler's financial and operating performance through the end of Fiscal 2000 and in 2001. Contributing to the gains from our food quality and remodeling programs will be our share buy-back program and the completion of a successful acquisition," added Boppell. SIZZLER INTERNATIONAL: Proposes Stock Buy-Back Plan --------------------------------------------------- On November 11, 1999, Sizzler reported that its Board of Directors had approved the repurchase of up to 1.5 million shares, to be conducted from time to time in the open market or in negotiated transactions. Commenting on the share repurchase, Mr. Boppell said, "All of the elements of our strategic plan are intended to create additional shareholder value, including our plans for a stock buy-back. We believe our stock price does not adequately reflect the full value of our current business, nor the strong growth we are already beginning to create through the improvement in the quality of our meals and our restaurant remodeling. We believe that a stock buy-back will only accelerate the enhancement of shareholder value that is being created by these restaurant improvements, our plans to co-brand our Australian locations, and the long term growth we will create through a successful acquisition." Sizzler International, Inc. operates, franchises or joint ventures 345 Sizzler restaurants worldwide, in addition to 101 KFC restaurants in Queensland, Australia. The company owns 66 of its U.S. Sizzler locations and 31 Australian locations. The company franchises 187 Sizzler locations in the U.S. and 61 locations internationally. The company is listed on the New York Stock Exchange under ticker symbol SZ. SOUTHERN MINERAL: Financial and Operating Results ------------------------------------------------- Southern Mineral Corporation (OTC Bulletin Board: SMINQ.OB) announced financial and operating results for the third quarter and first nine months of 1999. For the third quarter of 1999, the Company reported income of $4.9 million or income of $0.38 per share on revenues of $13.7 million, compared to a net loss of $2.0 million or a loss of $0.16 per share on revenues of $6.7 million for the same period in 1998. The 1999 income is primarily the result of the gain on sale of domestic properties and increased oil and gas prices offset by decreased oil and gas revenues due to decreased production and restructuring costs relating to the terminated restructuring plan as filed with the Securities and Exchange Commission in July 1999. Oil and gas revenues for the third quarter 1999 were $6.6 million compared to oil and gas revenues of $6.7 for the same period in 1998. The decrease in revenues reflects a decrease in oil and natural gas liquids ("NGL") production of 21% to 200,373 barrels and a decrease in natural gas production of 42% to 1,219 MMcf in the third quarter of 1999 compared to the third quarter of 1998. Canadian production levels for the third quarter of 1999 are lower than comparable production levels in 1998 due in part to the sale of certain properties in the fourth quarter of 1998 and other factors including normal and unanticipated production declines. Domestic production levels are lower due primarily to the sale of the mineral and royalty interests in the first quarter of 1999, the sales of Brushy Creek and Texan Gardens Fields in the third quarter of 1999 and other factors including normal production declines. The decreased production was offset by an average realized oil price increase of 70% from $10.99 per barrel in the third quarter of 1998 to $18.94 per barrel in the third quarter of 1999. Average realized natural gas prices increased 40% to $2.37 per Mcf during the third quarter of 1999 compared to $ 1.69 per Mcf in same period a year earlier. The Company reported income for the nine months ended September 30, 1999 of $4.2 million or income of $0.33 per basic share on revenues of $30.6 million, compared to a loss of $4.8 million or a loss of $0.39 per basic share on revenues of $15.5 million in the same period in 1998. The 1999 income is primarily the result of the gain on sale of domestic properties offset by restructuring costs relating to the terminated restructuring plan as filed with the Securities and Exchange Commission in July 1999. Oil and gas revenues for the nine months ended September 30, 1999, were $ 18.4 million compared to oil and gas revenues for the same period in 1998 of $ 15.5 million. The increase in revenues reflects higher production volumes of both crude oil and NGL and increased natural gas and crude oil prices. Natural gas production in the nine months ended September 30, 1999 was 4,367 MMcf, essentially unchanged as compared to production for the same period in 1998 of 4,380 MMcf. The Company's crude oil and NGL production for the nine months ended September 30, 1999 increased 53% to 642,992 barrels as compared to 523,542 barrels for the same period in 1998. Production levels for the nine months ended September 30, 1999, when compared to 1998, reflect increased production from Canada beginning in July 1998, offset by decreased production related to property sales from Canada in the fourth quarter of 1998 and from domestic property sales of mineral and royalty interests in the first quarter of 1999 and Brushy Creek and Texan Gardens Fields in the third quarter of 1999. On October 29, 1999, the Company and its wholly-owned subsidiaries, BEC Energy, Inc., Amerac Energy Corporation, SMC Ecuador, Inc. and SMC Production, Inc., filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. District Court for the Southern District of Texas, Victoria Division. The Company and its debtor subsidiaries continue to operate as debtors-in-possession subject to the Bankruptcy Court's supervision and orders. The Company's Form 10-Q for the quarter ended September 30, 1999 was filed with the Securities and Exchange Commission and should be reviewed for more detailed discussions regarding the Company's historical financial performance and current financial situation. Southern Mineral Corporation is an oil and gas acquisition, exploration and production company that owns interests in oil and gas properties located along the Texas Gulf Coast, Canada and Ecuador. The Company's principal assets include interests in the Big Escambia Creek field in Alabama and the Pine Creek field in Alberta, Canada. The Company's common stock is quoted on the OTC Bulletin Board under the trading symbol "SMINQ.OB". SUN HEALTHCARE: Motion To Sell 3.28 Acres To TU Electric -------------------------------------------------------- The Debtors own a 3.38 acre parcel of vacant land located at the intersection of Lemmon Avenue East and Carlisle Street in Dallas, Texas. Sun acquired the property from Assisted Living Investments LLC, of which SunBridge is a member, in exchange for ALI's debt to SunBridge associated with the original purchase of the property. Sun has marketed the property since 1998; one deal, subject to a financing contingency, already fell apart. In March 1999, Texas Utilities Electric Company advanced an offer to purchase the property. Negotiations culminated in TU Electric's presentation of a Purchase Contract dated June 10, 1999, offering $4,680,000, in cash, subject to a re-zoning contingency and receipt of certain governmental entitlements. TU's re-zoning request has been approved by the City Planning Commission and City Council, paving the way for a Closing to occur before December 20, 1999. By this Motion, the Debtors ask Judge Walrath for authority to assume the Purchase Contract, pursuant to 11 U.S.C. Sec. 365, perform their obligations under the Purchase Contract, and sell the property. The Debtors are convinced that TU Electric's offer is the highest and best available. Although the Debtors have talked to over 75 potential purchasers for the property, they don't know who would step up to the plate if TU Electric were to walk away. Further, the zoning restrictions are significant and re-zoning entails a six-month review process before a final decision can be made. To assure that TU Electric's bid is, in fact, the highest and best offer, the Debtors will publish notice of sale and TU Electric agrees to subject its offer to a competitive bidding process, provided that any competing bid -- which can be presented in open Court on November 30, 1999 -- be no less than 110% of TU's purchase price. (Sun Healthcare Bankruptcy News Issue 5; Bankruptcy Creditor's Service Inc.) SUN TV: Approval of Disclosure Statements ----------------------------------------- After a hearing on November 15, 1999, the US Bankruptcy Court for the District of Delaware entered an order approving the Disclosure Statements of Sun TV Appliances, Inc. and its corporate parent, Sun Television and Appliances Inc. A confirmation hearing will commence on December 22, 1999 at 9:30 AM. December 17, 1999 at 4:00 PM is fixed as the last date for filing and serving objections to confirmation of the plan. VENCOR: Motion To Assume & Assign Aircraft Purchase Agreement ------------------------------------------------------------- In 1995, Vencor entered into a Purchase Agreement with The Cessna Aircraft Company, contracting to purchase a Citation Excel Model 560-XL aircraft. The airplane is current under construction, scheduled for delivery in March 2000, with $7,200,550 due at delivery. The Debtors determined in April 1999, that they don't want the airplane. Shortly thereafter, the Debtors entered into an agreement with 100SC Partners Limited Partnership providing that, upon delivery of the airplane to Vencor, Vencor will immediately sell the airplane to 100SC and receive $471,025 from 100SC. The Debtors relate that 100SC has already paid nearly $1,000,000 in progress payments to Cessna the 1995 Purchase Agreement. By this Motion, the Debtors seek authority to assume each of the purchase agreements without further delay and assign their interests in the 1995 Purchase Agreement with Cessna to 100SC in exchange for a $471,025 immediate cash payment. (Vencor Bankruptcy News Issue 7; Bankruptcy Creditor's Service Inc.) ********* 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 * * *