/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/991227.MBX T R O U B L E D C O M P A N Y R E P O R T E R Monday, December 27, 1999, Vol. 3, No. 249 Headlines ABRAXAS STEEL & WIRE: Applying for Guaranty Under New Act ACME METALS: Joint Application For Payments of Trade Claims AMERICAN BANKNOTE CORPORATION: Case Summary CENTENNIAL COAL: Seeking Extension To Assume/Reject Leases CODON PHARMACEUTICALS: Seeks Extension of Exclusivity FEDCO: Confirmation of Plan FILENE'S BASEMENT: Motion To Approve Agreement FILENE'S BASEMENT: Taps ML Strategies, LLC FIRSTPLUS FINANCIAL: Seeks Approval fo Compromise FIVE PARK AVENUE: Case Summary and 10 Largest Unsecured Creditors FORCENERGY: Seeks Court OK To Assume Joint Operating Agreements GANTOS: Fails To File Latest Financial Statements GENEVA STEEL: Fourth Quarter Results IRIDIUM PROMOTIONS, INC.: Case Summary JUMBOSPORTS: Notice of Rejection of Leases LENOX HEALTHCARE: Needs Time To File Schedules and Financials LENOX HEALHCARE: Seeks Extension To Assume/Reject Leases LIBERTY HOUSE: Board Of Directors Taps Watson Wyatt LIBERTY HOUSE: Seeks Order Extending Time To Assume/Reject Leases LOIS USA: Taps Citrin Cooperman as Accountants METROTRANS: Announces Chapter 11 Filing ML CLO XII PILGRIM: Moody's Downgrades Class B and C Notes MONDI OF AMERICA: Seeking Time to File Schedules and Financials NATIONAL RESTAURANTS: Seeks Extension of Exclusive Period NEXTWAVE: Nextel's Proposal for NextWave Reviewed by DCR NEXTWAVE: Statement on Court Opinion of December 22, 1999 ONCOR INC: Seeks Extension of Exclusivity PLANET HOLLYWOOD: Order Approves Disclosure Statement SEMI-TECH: Last Date To File Proofs of Claim SGL CARBON: Settlement of Antitrust Claims SPORTS AUTHORITY: Moody's Confirms Sports Authority's Sub Notes STAR NEWCO: Seeks Entry Of Interim Financing Order STAR NEWCO: Seeks Extension of Exclusivity TECHNICLONE: Company's Continuation Dependent On Financing TELEGROUP, INC: Order Fixes Hearing Date For Disclosure Statement TRANSTEXAS GAS: Revenues and Losses Down BOND PRICING FOR WEEK OF DECEMBER 20 ********* ABRAXAS STEEL & WIRE: Applying for Guaranty Under New Act --------------------------------------------------------- Since early calendar 1999, Abraxas Steel & Wire Company has been attempting to finance its long-term strategic plan primarily consisting of the construction of a new, more efficient, low cost structural rolling mill. As yet the company has not been able to obtain the necessary financing, due, according to Abraxas, to the poor operating results caused largely by imports and because of the deterioration in the credit markets which traditionally provide funding to steel companies. Consequently, the company has decided to apply for a guaranty under the Emergency Steel Loan Guarantee Act of 1999. Under the Guarantee Act, domestic steel companies may apply for a United States government guarantee of up to 85% of the principal amount of a loan or loans of up to $250,000. According to the Guaranty Act regulations published on October 18, 1999, applications for guarantees under the Guarantee Act must be submitted to the United States Department of Commerce on or before January 31, 2000, and guarantees are anticipated to be awarded approximately six to eight weeks after the application deadline. In January, 2000 Abraxas anticipates filing a guarantee application that would allow it to raise approximately $170,000 in new senior debt. If the company is able to obtain a guaranty under the Guarantee Act in an acceptable amount with acceptable terms, it intends to use the proceeds of the guaranteed loan to finance its long-term strategic plan. Net sales for the company were $87.1 million on shipments of 284,493 net tons for the three months ended October 31, 1999, compared to $113.5 million on shipments of 295,059 net tons for the three months ended October 31, 1998. The company recorded a net loss for the quarter of $8.1 million, which included expenses of over $1.0 million associated with the anticipated new mill construction . In the first quarter of the prior year, the company announced the exit from a significant portion of its wire business, resulting in a net loss for the quarter of $24.6 million. ACME METALS: Joint Application For Payments of Trade Claims ----------------------------------------------------------- The debtor, Alpha Tube Corporation, and its Official Committee of Unsecured Creditors filed a joint application for an order permitting payments to satisfy allowed trade claims of consenting creditors, and authorizing related relief. A hearing to consider the application will take place on January 20, 2000. Alpha Tube made a settlement proposal regarding the treatment of Trade Claims, which proposal was accepted by the Alpha Committee. The most fundamental economic aspect of the Settlement Proposal concerns the compromise and payment of the Trade Claims asserted agaisnt Alpha Tube's estate at a 15% discount from the allowed principal amount of Trade Claims and the elimination of any postpetition interest. The decision by individual holders of Trade Claims to participate in the Settlement Proposal is completely voluntary. Any holder declining to participate will retain whatever rights it may have against Alpha Tube's estate on account of its Trade Claim and will be treated as part of the joint reorganization plan. The Settlement Proposal also requires the dissolution of the Alpha Tube Committee and the discharge of Togut, Segal & Segal LLP; Connolly, Bove, Lodge & Hutz; Wolf, Block, Schorr and Solis-Cohen LLP and Belisle & Associates LLC. AMERICAN BANKNOTE CORPORATION: Case Summary ------------------------------------------- Debtor: AMERICAN BANKNOTE CORP. 410 Park Avenue New York, New York 1002-4407 Petition Date: December 8, 1999 Chapter 11 Court: Southern District of New York Judge: Prudence Carter Beatty Debtor's Counsel: Kayalyn A. Marafioti Skadden, Arps, Slate, Meagher & Flom LLP 919 Third Avenue New York, NY 10022 (212) 735-2552 Total Assets: $ 207,785,000 Total Debts: $ 188,034,000 CENTENNIAL COAL: Seeking Extension To Assume/Reject Leases ---------------------------------------------------------- The debtors, Centennial Coal, Inc. seeks to extend the period within which the debtors may assume or reject unexpired leases of nonresidential real property for approximately 90 days, to and including April 6, 2000. A hearing on the motion will be held on February 4, 2000 at 9:30 AM. The debtors are parties to in excess of 100 unexpired leases of nonresidential real property that relate to property constituting the core of the debtors' mining activities and coal reserves. The debtors are also parties to certain unexpired leases of nonresidential real property that relate to property used by the debtors for administrative offices, coal-site offices, storage and otherwise in furtherance of their mining activities. The mining leases constitute the most important asset of the debtors' estates. Pursuant to their mining leases, the debtors are authorized to undertake mining activities on property owned by various lessors. Without the mining leases the debtors could not operate their business and conduct their mining activiites. The debtors' new executive management team has continued the process of familiarizing itself with the debtors' mining leases and additional leases and has continued to work toward making reasoned business decisions concerning particular mining leases and additional leases. However until a certain adversary proceeding against Kentucky Emerald Land Company, LLC and Summit Coal Company, LLC are determined, the debtors submit that it would not be possible to shape a meaningful plan of reorganization unless and until the issues underlying the Summit Sublease Litigation are resolved. In addition, the debtors are in negotiations with its other principal lessor concerning royalty rates and other issues arising under the related Mining Leases. These proceedings and negotiations have delayed the business decisions concerning the mining leases and additional leases. The debtors are seeking an extension of approximately ninety days to and including April 6, 2000. The debtors believe that the additional 90 days will afford their executive management team important and necessary time to intelligently assess each Mining Lease's and Additional Lease's ultimate value and usefulness to the debtors' operations and estates. CODON PHARMACEUTICALS: Seeks Extension of Exclusivity ----------------------------------------------------- The debtors, Codon Pharmaceuticals, Inc. and Oncor, Inc. seek an extension of the debtors' exclusive period within which to solicit acceptances to their Chapter 11 plans with the US Bankruptcy Court for the District of Delaware. The debtors seek a 60-day extension, from December 31, 1999 through and including February 29, 2000 of the period during which the debtors will maintain the exclusive right to solicit acceptances of their respective plans. The debtors have filed their plans and the cout has approved their Disclosure Statement. The debtors are in the process of soliciting votes, and claim to need the extension out of an abundance of caution. The debtors note that after lengthy negotiations, the Creditors' Committee supports the plan. FEDCO: Confirmation of Plan --------------------------- On December 6, 1999, the court entered its order confirming the plan of Reorganization, as amended, proposed by Federal Employees' Distributing Company and its Official Creditor's Committee. The Plan's Effective Date will be December 17, 1999. The court has set January 14, 2000 as the deadline for filing any claim arising as a result of the rejection under the plan of an executry contract or unexpired lease or asserting a cure amount under such contract or lease. Fedco's Counsel: Richard Levin & Peter W. Clapp Skadden, Arps, Slate, Meagher & Flom LLP 300 South Grnad avenue - Suite 3400 Los Angeles, CA Committee's Counsel: Jeffrey N. Pomerantz Pachulski, Stang, Ziehl & Young 10100 Santa Monica Blvd. - Suite 1100 Los Angeles, Calif. United States Trustee: Ron Maroko & Alvin Mar Office fo the United States Trustee Sutie 800 221 No. Figueroa Street Los Angeles, CA 90012 FILENE'S BASEMENT: Motion To Approve Agreement ---------------------------------------------- The debtors, Filene's Basement Corp. and Filene's Basement, Inc. filed a motion seeking entry of an order authorizing the debtors to enter into an agreement relating to the sales of jewelry at various locations with Ultra Stores, Inc. and Gordon Brothers Retail Partners LLC. Prior to the commencement of these cases, the debtors and Ultra entered into a certain licensing arrangement which provided inter alia for the use of space at certain of the debtors' locations to run jewelry concessions subject to payment to the debtors of various charges, including a commission equal to 10.5% of all gross sales made by Ultra at these concessions. Ultra continues to sell jewelry at various locations in which it has concessions. In connection with its GOB sales, the debtors and Ultra wished to continue with Ultra's existing sales of jewelry at the Phase I and Phase II GOB stores. As a result, the debtors, Ultra and GBRP agreed to enter into an agreement to allow Ultra to remain in its concessions during the GOB sales, provided that Ulta compensates Gordon Brothers for various costs and charges, including use and occupancy charges. The parties agreed that Ulta should compensate Gordon Brothers in the amount of 50% of the commission amount paid by Ultra to the debtors or 5.25% of gross Ultra Jewelry sales. Pursuant to the Jewelry Agreement, the remaining 50% of the commission shall be paid to the debtors. The debtors now seek court approval of the agreement. FILENE'S BASEMENT: Taps ML Strategies, LLC ------------------------------------------ The debtors, Filene's Basement Inc. and Filene's Basement Corp. seek authority to retain and employ Nancy J. Sterling and ML Strategies, LLC as the debtors' special public relations consultant. The firm will manage bankruptcy-related press and generate positive media coverage for the purpose of maintaining the debtors' public image while they undergo their Chapter 11 reorganization. FIRSTPLUS FINANCIAL: Seeks Approval fo Compromise ------------------------------------------------- The debtor, FirstPlus Financial Inc. seeks approval of a compromise of controversy with Teachers Insurance and Annuity Association, Putnam Investment Management, Merrill Lynch and American Express Financial Corporation(the "NIMS Bondholders") and Western Interstate Bancorp. The compromise generally provides for: The continued payment by Western Interstate Bancorp of the Servicer Fee Income into the NIMS Trust and the assumption of the obligation to pay the Servicer Fee Income into the NIMS Trust by any subsequent purchaser of WIB's servicing business. Recognition and acknowledgement of the NIMS Trust's interests and Beal Bank's interests in the Servicer Fee Income. The adjustment of required principal payments under the NIMS bonds. The payment of $7 million to the NIMS Trust from collections under the Western Interstate Bancorp Note. The adjustment of certain events of default under the documents and instruments establishing the NIMS Trust. Cancellation of the $30 million demand note. US Bank, as indenture trustee, has stated that its claims against the debtor may total well in excess of $100 million. US Bank has also filed an objection to the debtor's plan and Disclosure Statement. The debtor claims that litigation against the NIMS Bondholders would be very complex, time consuming and expensive. Each of the issues raised by US Bank in its Proofs of Claim would have to be separately litigated and resolved. Such litigation would require substantial expert testimony and accounting analysis. The debtor believes that the proposed compromise is in the best interest of all creditors of the estate. Among other things, the NIMS Bondholders' Agreement to adjust principal payments under the NIMS bonds and to cancel the $30 million demand note confers a substantial benefit to the estate. FIVE PARK AVENUE: Case Summary and 10 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Five Park Avenue, LLC 200 East 60th Street New York, NY 10021 Tax id: 13-3996335 Type of Business: Developing and operating a first class restaurant Petition Date: December 10, 1999 Chapter 11 Court: Southern District of New York Judge: Jeffry H. Gallet Debtor's Counsel: Ellen Werfel-Martineau Stein Riso Mantel Haspel & Jacobs LLP 254 S. Main Street New City, NY 10956 (914) 634-1010 Total Debts: $ 1,016,680.00 10 Largest Unsecured Creditors: Advocate Consulting Group Inc. Clevenger-Frable-Lavalle Harmin-Jablin Marino Gerazounis & Jaffe Associates, Inc Metropolitan Life Insurance Co. Mohoney, Cohen NYS Dept. of Tax & Finance Schneck Weltman & Hashmall Sperger, Dennenberg, ESQ. Winchester Properties, Inc., FORCENERGY: Seeks Court OK To Assume Joint Operating Agreements --------------------------------------------------------------- The debtors and Transworld Exploration and Production, Inc. seek approval of an agreed order concerning the assumption of joint operating agreements. GANTOS: Fails To File Latest Financial Statements ------------------------------------------------- Gantos Inc. has failed to timely file, with the Securities & Exchange Commission, its latest financial statements, at least in part, according to the company, because of its financial condition and in part because of the consolidation of most of the company's financial staff in Stamford, Connecticut, several members of the company's financial staff resigned during the third quarter of fiscal 1999, including its general ledger manager. During November and early December, the company's remaining accounting staff was involved in preparing information in connection with the company's Loan and Security Agreement, dated November 18, 1998, and various audits relating to that loan agreement, and in preparing budgets and projections relating to that loan agreement, in addition to its preparation of the quarterly financial statements and analysis for the October 30, 1999 financial statements. In addition, in July 1999, the company appointed Deloitte & Touche LLP as its new independent public accountants to audit and report on its financial statements for the year ending January 29, 2000. Despite these factors, the current financial information was expected to be filed mid-December. GENEVA STEEL: Fourth Quarter Results ------------------------------------ Geneva Steel reported a net loss of $63.5 million, or a loss of $3.78 per dilutive common share, for the fourth fiscal quarter ended September 30, 1999. This compares with a net loss of $21.6 million, or a loss of $1.51 per dilutive common share (after accounting for dividends on preferred stock), for the same period last year. The operating loss for the fourth fiscal quarter was $27.8 million, compared with an operating loss of $14.8 million during the same period last year. The net loss for the three months ended September 30, 1999 included $38.4 million of provisions relating to the Company's Chapter 11 proceeding, including for professional fees, write-off of deferred loan fees on the senior notes and for certain executory contracts expected to be rejected. Sales and tons shipped during the quarter were $89.7 million and 316,400 tons, respectively, compared with sales and tons shipped of $157.8 million and 443,900 tons, respectively, for the same period last year. For the fiscal year ended September 30, 1999, the Company reported a net loss of $185.1 million, or a loss of $11.33 per dilutive common share (after accounting for dividends on preferred stock). This compares with a net loss of $18.9 million, or a loss of $1.90 per dilutive common share (after accounting for dividends on preferred stock), for the same period last year. The operating loss for the year ended September 30, 1999, was $128.9 million, compared with operating income of $21.4 million during the same period last year. Sales and tons shipped during the year were $314.7 million and 1,100,300 tons, respectively, compared with sales and tons shipped of $720.5 million and 2,003,200 tons, respectively, for the same period last year. As of February 1, 1999 (the date of the Company's Chapter 11 filing), the Company discontinued accruing interest on its senior notes and dividends on its redeemable preferred stock. Contractual interest on the senior notes for the fourth fiscal quarter of 1999 was $8.3 million, which is not included in the Company's financial statements. Contractual dividends on the redeemable preferred stock as of September 30, 1999 were approximately $36.9 million, which is $8.4 million in excess of dividends accrued in the Company's balance sheet. Recent Operating Results: Concurrent with reduced production demand, weighted average sales price per ton of plate, pipe, sheet and slab products decreased by approximately 23.9%, 10.2%, 10.6% and 12.6%, respectively, as compared to the fourth fiscal quarter last year. Prices for the Company's products and the volume of orders have, however, recently begun to improve. In response to improving market conditions, the Company started a second blast furnace in September 1999, and expects to return to more normal operating levels in the second quarter of fiscal year 2000. Higher operating levels associated with a two-blast furnace operation has created additional working capital needs for the Company. These working capital needs will increase over the first and second quarters of fiscal year 2000 as production and inventory levels increase. There can be no assurance that market conditions will continue to justify a two-blast furnace operation, that pricing and order volumes will continue to improve, or that the Company will be able to obtain the requisite working capital from vendor credit, expanded borrowing capacity, or other sources to support increased production levels. The Company's operating costs per ton increased as compared to the same quarter last year. The overall average cost of sales per ton shipped increased primarily as a result of production inefficiencies associated with operating at levels that are significantly less than capacity. The recent surge in steel imports and resulting low level of orders, together with other market factors, caused production levels to decline. Operating costs per ton increased in part because fixed costs were allocated over fewer tons. In addition, the Company, in response to falling prices and higher costs, wrote- down the cost of its inventories to market prices, resulting in an adjustment of approximately $3.5 million, which increased cost of sales in the fourth fiscal quarter of 1999, as compared to the same period in the previous year. The Company has undergone several rounds of personnel reductions and other cost cuts in an attempt to at least partially offset the adverse cost effects of lower production rates. During most of fiscal year 1999, the Company also attempted to minimize production inefficiencies by limiting its production to a full, one-blast furnace level. As of December 21, 1999, the Company had $9.9 million available under the credit facility, with $43.4 million in borrowings and $2.4 million in letters of credit outstanding. Until recently, the Company's production activities were consuming cash. During the two months of October and November 1999, the Company's operations generated slight positive cash flow. Further improvement in market conditions will likely be necessary for the Company's production activities to become significantly cash flow positive. A reversal in the current market trend or a disruption in the Company's operations would likely cause the Company to return to negative cash flow. The Company is currently developing a plan of reorganization (the "Plan of Reorganization") through, among other things, discussions with the official creditor committees established in the Chapter 11 proceeding. The objective of the Plan of Reorganization is to restructure the Company's balance sheet to (i) significantly strengthen the Company's financial flexibility throughout the business cycle, (ii) fund required capital expenditures and working capital needs, and (iii) fulfill those obligations necessary to facilitate emergence from Chapter 11. In conjunction with the Plan of Reorganization, the Company intends to file an application in January 2000 for a government loan guarantee under the Emergency Steel Loan Guarantee Program (the "Loan Guarantee Program"). The application will seek a government loan guarantee for a portion of the financing required to consummate the Plan of Reorganization, with the remaining financing being provided through other means. In connection with preparing the loan guarantee application, the Company is in the final phase of selecting and negotiating terms with a major bank to serve as the primary lender under the Loan Guarantee Program. There can be no assurance that the Company will be selected to participate in the Loan Guarantee Program or that, with or without a guarantee, the Company can obtain the necessary financing to consummate the Plan of Reorganization. The Company requested and received an extension of its Chapter 11 exclusivity period, which now expires February 28, 2000. Management expects that a Plan of Reorganization will be completed and ready to file with the bankruptcy court during the first calendar quarter of 2000. The Plan of Reorganization will be conditioned on the Company being approved for a guarantee under the Loan Guarantee Program. There can be no assurance as to the actual timing for the filing of the Plan of Reorganization IRIDIUM PROMOTIONS, INC.: Case Summary -------------------------------------- Debtor: Iridium Promotions, Inc. 1575 Eye Street, N.W. Washington, DC 20005 Tax id: 52-2120341 Petition Date: December 16, 1999 Chapter 11 Court: Southern District of New York Judge: Cornelius Blackshear Debtor's Counsel: Erik R. Markus Wilmer, Cutler & Pickering 2445 M Street, NW Washington, DC 20037 202-663-6733 JUMBOSPORTS: Notice of Rejection of Leases ------------------------------------------ The debtor, JumboSports, Inc. and its affiliate debtors provided notice of reject of the following non-residential leases: 196 Centre at Riverchase, Birmingham, AL 5035 Harding Place, Nashville, TN 3500 Southside Blvd., Jacksonville, FL 9225 N. May, Oklahoma City, OK 3071 N. Rainbow Blvd., Las Vegas, NV 8221 -S East 61st Street, Tulsa, OK 7300 E. Independence Blvd., Charlotte, NC 2500 Williams Blvd., Kenner, LA 2075 Semoran Blvd., Winter Park, FL 1293 Shreveport/Barksdale Hwy., Shreveport LA 2084 Sherwood Forest Blvd., Baton Rouge LA LENOX HEALTHCARE: Needs Time To File Schedules and Financials ------------------------------------------------------------- The debtors, Lenox Healthcare, Inc. are seeking a court order authorizing the debtors to file schedules and statement of financial affairs on consolidated basis in lieu of separate schedules for each of the debtors. The debtors state that consolidated schedules will provide adequate and sufficient disclosure of the debtors' financial affairs. LENOX HEALHCARE: Seeks Extension To Assume/Reject Leases -------------------------------------------------------- The debtors, Lenox Healthcare, Inc. are seeking a court order extending the time within which the debtors may assume or reject unexpired leases of nonresidential real property. A hearing is scheduled for January 6, 2000 at 9:30 AM. The debtors seek an order extending the time to assume or reject leases by approximately 120 days, through and including May 1, 2000. The debtors are lessees under numerous leases for faciltes that are used to conduct the healthcare, assisted living, hospital, and administrative functions that comprise the debtors' businesses, and are assets of the debtors' estates. Given the number of leases, the complexity of the cases, and the size of the task of evaluating the unexpired leases, the debtors simply have not yet been able to assess the value of the marketability of the unexpired leases and make determinations with respect to which unexpired leases should be assumed and which, if any, should be rejected. LIBERTY HOUSE: Board Of Directors Taps Watson Wyatt --------------------------------------------------- The Board of Directors of Liberty House, Inc., seeks an order authorizing the debtor to employ Watson Wyatt & Company as the debtor's employee compensation, benefit and retention consultant. The debtor has experienced significant losses of senior management employees. The firm will conduct a comprehensive compensation and benefits survey. The Board desires that the debtor employ Watson Wyatt to provide independent professional consulting services relating to Liberty House's employee compensation practices and policies. LIBERTY HOUSE: Seeks Order Extending Time To Assume/Reject Leases ----------------------------------------------------------------- The debtor, Liberty House, Inc. seeks order extending time to assume, assume and assign, or reject unexpired nonresidential real property leases. The debtor asserts that although it has made significant progress in evaluating the leases, the debtor needs additional time and hereby requests the entry of an order extending the deadline to assume, assume and assign, or reject each of its leases until May 31, 2000. The debtor is evaluating a variety of reorganization alternatives, and the debtor does not want to assume or reject leases piecemeal, if in fact there is a deal to assume or reject all of the leases at once. LOIS USA: Taps Citrin Cooperman as Accountants ---------------------------------------------- The debtors, Lois/USA, Inc., Lois/USA Chicago, Inc. and Lois/USA New York Inc. seek to retain Citrin Cooperman & Company LLP as accountants for the debtors. Lois/USA is a full service advertising and marketing communications company with offices in New York, Los Angeles, Chicago, Houston, Austin and Dallas. The firm's services will generally include tax return preparation, SEC compliance and assisting the debtors' personnel in the preparation of the monthly operating reports required by the United States Trustee. METROTRANS: Announces Chapter 11 Filing --------------------------------------- Metrotrans Corporation (OTC Bulletin Board: MTRN) announced today that it has filed a voluntary petition for reorganization with the United States Bankruptcy Court for the Northern District of Georgia under Chapter 11 of the Federal Bankruptcy Code. The Company's decision to seek Chapter 11 protection was due to its continuing operating losses, past debts, and its inability to obtain additional asset- based financing. The Company continues in possession of its property and continues to operate and manage its business and financial affairs as a debtor-in-possession under the supervision and orders of the United States Bankruptcy Court for the Northern District of Georgia. An interim financing arrangement with Bank of America has been submitted for Court approval which would allow the Company to maintain current operations. As previously announced, the Company engaged the services of Legacy Securities Corporation in order to explore strategic alternatives related to satisfaction of its indebtedness, potentially including a sale of the business. As a result of Legacy's activities, interest has been shown by a number of potential buyers in acquiring some or all of the Company's assets in the near future, subject to Court approval. Additionally, the Company announced that Patrick L. Flinn and William C. Pitt III resigned from the Company's Board of Directors effective December 14 and 17, 1999, respectively. Metrotrans designs, manufactures and distributes shuttle and mid- size touring buses through Company operated sales centers and independent distributors in the United States and Canada and Puerto Rico. ML CLO XII PILGRIM: Moody's Downgrades Class B and C Notes ---------------------------------------------------------- New York, December 22, 1999 -- Moody's Investors Service has downgraded the rating of the U.S. $47,916,803 Class C Subordinated Notes due 2009 (rated as to principal only) and the $131,000,000 Class B Second Senior Secured Notes due 2009 issued by ML CLO XII Pilgrim America (Cayman) Ltd. According to Moody's, the downgrades result from continued deterioration of the credit quality of the collateral pool. Since Moody's last took action on the Class B and Class C Notes, the portfolio experienced additional defaults (par amount of approximately $14.5 million), primarily in the long-term health care industry. The rating agency noted that, including Defaulted Securities, more than 25% of the collateral pool is currently rated Caa1 or lower. According to the rating agency, the transaction continues to violate the Weighted Average Rating Test and the Class B Overcollateralization Test and, therefore, the expected loss associated with the Class C Notes, with respect to principal only, and the Class B Notes has increased to a point no longer consistent with ratings of Caa2 and Ba1, respectively. Moody's noted that the Collateral Manager has demonstrated an ongoing commitment to improve the credit quality of the rated Notes. Accordingly, Moody's is confirming the rating of the Senior Notes and is removing the Class B Notes from the negative Watchlist. RATING ACTION: DOWNGRADE Issuer: ML CLO XII Pilgrim America (Cayman) Ltd.: Tranche description: $131,000,000 Class B Second Senior Secured Notes due 2009; Previous Rating:Ba1 New Rating:Ba3 RATING ACTION: DOWNGRADE Issuer: ML CLO XII Pilgrim America (Cayman) Ltd.: Tranche description: $47,916,803 Class C Subordinated Notes due 2009; Previous Rating:Caa2 (with respect to principal only) New Rating:C (with respect to principal only) MONDI OF AMERICA: Seeking Time to File Schedules and Financials --------------------------------------------------------------- The debtors, Mondi of America, Inc. seeks an order extending time to file schedules, lists and statements of financial affairs. As a result of the inventory liquidation, the upcoming lease auction, the size and complexity of the debtors' businesses, the diversity of their operations and assets and the limited staffing available to gather, process and complete the schedules, the debtors require additional time to bing their books and record up to date and to collect the data needed for the preparation and filing of the schedules. The debtors are seeking an extension to and including December 23, 1999. NATIONAL RESTAURANTS: Seeks Extension of Exclusive Period --------------------------------------------------------- National Restaurants Management, Inc., et al., debtors, seek entry of an order extending the 180 day exlcusive period of the debtors. The debtors seek a one month increase of the 180 day exclusive period from January 3, 2000 to and including February 3, 2000. Kahn Consulting Inc. is financial advisor to the Committee, and Dewey Ballantine is counsel to the committee. Kahn and Committee Counsel have undertaken a comprehensive investigation of the financial condition of the NRM Companies in order to determine the value of the debtors. The valuation process has involved an analysis of the profitability of the operations of the NRM companies and the valuation of more than one hundred leases and executory contracts in order to determine the liquidation value of the NRM Companies. The debtor agreed to wait for the Valuation Analysis before seeking approval of their Disclosure Statement. However, the debtors need this extension while they wait. With the extension the exclusive period would be increased to and including February 3, 2000. NEXTWAVE: Nextel's Proposal for NextWave Reviewed by DCR -------------------------------------------------------- Duff & Phelps Credit Rating Co. (DCR) has preliminarily reviewed Nextel's filing that requests the Federal Communication Commission (FCC) clarify its policies regarding the receipt of waivers critical to Nextel in its efforts to acquire the debt and equity of NextWave Telecom Inc. It also outlines a proposed tender offer for NextWave's creditors and shareholders. Nextel Finance Company's secured bank facility is rated 'BB' (Double-B). Nextel's senior notes are rated 'B+' (Single-B-Plus) and its preferred stock is rated 'B-' (Single-B-Minus). Nextel's proposal for NextWave would total $8.3 billion, including a $2.5 billion stock component. Under the proposal, $5.3 billion in cash would be used to pay down NextWave's FCC license debt principal and interest as well as a bidding credit that was initially granted to NextWave as a Designated Entity (DE) licensee. The remaining $3.0 billion would go toward NextWave creditors ($ 500 million in cash) and shareholders ($2.5 billion in Nextel stock). Although it is still uncertain how Nextel's spectrum strategy will unfold, our current ratings incorporate certain assumptions regarding Nextel's pursuit and development of additional spectrum. In terms of the cost and funding sources that would be used for the spectrum alone under the new proposal, DCR believes that it would result in only modestly higher leverage than DCR's prior expectations. However, the company has not yet communicated how it will use the spectrum, which will in turn impact the incremental buildout costs and operating cash needs. Nextel's buildout and marketing plans related to the new spectrum, coupled with the type of the funding sources (debt vs. equity) that would be used for these incremental cash requirements, will be critical factors influencing Nextel's prospective credit quality. Regardless, a substantial spectrum acquisition of NextWave's size would enhance Nextel's competitive position, significantly improve capital efficiency and provide operating flexibility. DCR notes that a large number of variables remain unresolved with the NextWave bankruptcy, including: the ongoing court proceedings; NextWave's attempts to gain new backers and to formulate a more palatable reorganization plan; and the DE license transfer restrictions. If Nextel's plan is successful, control of NextWave may be subject to competing bids -- though there are no other major existing wireless operators that would be eligible to bid under current FCC license cap rules. Nextel had nearly 4.1 million digital subscribers at September 30, 1999. Nextel and Nextel Partners, of which Nextel owns a minority stake, have SMR licenses covering 250 million pops nationwide. Nextel's wholly owned unrestricted subsidiary, Nextel International, owns wireless investments in North America, Latin America and Asia. Nextel's indentures contain significant restrictions on cash infusions to Nextel International. NEXTWAVE: Statement on Court Opinion of December 22, 1999 --------------------------------------------------------- NextWave received the opinion of the United States Court of Appeals for the Second Circuit. Although we had hoped for an affirmation of the District Court's decisions, nevertheless, consistent with the opinion received, we are fully positioned to work closely with the Federal Communications Commission (the "FCC") to implement a market-based solution that results in the immediate assumption of the full amount of the original debt obligation, immediate payment of all accrued interest and principal to date while presenting a plan to the FCC and the bankruptcy court that is fully compliant with the FCC rules. NextWave has assembled a world class team -- comprised of strategic partners, financial institutions and highly qualified vendors -- to begin deploying one of the first of the third generation IP-based packet switched wireless networks in the world and put the licenses into productive use in the very near-term. ONCOR INC: Seeks Extension of Exclusivity ----------------------------------------- The debtors, Codon Pharmaceuticals, Inc. and Oncor, Inc. seek an extension of the debtors' exclusive period within which to solicit acceptances to Chapter 11 plans with the US Bankruptcy Court for the District of Delaware. The debtors seek a 60-day extension, from December 31, 1999 through and including February 29, 2000 of the period during which the debtors will maintain the exclusive right to solicit acceptances of their respective plans. The debtors have filed their plans and the cout has approved their Disclosure Statement. The debtors are in the process of soliciting votes, and claim to need the extension out of an abundance of caution. The debtors note that after lengthy negotiations, the Creditors' Committee supports the plan. PLANET HOLLYWOOD: Order Approves Disclosure Statement ----------------------------------------------------- The US District Court for the district of Delaware has approved the First Amended Disclosure statement for the first amended Joint Plan of Reorganization of Planet Hollywood International, Inc. and certain of its subsidiaries. A hearing to consider confirmation of the plan and any objections thereto will be held before the Honorable Joseph J. Farnan Jr, US District Court Judge, at the US District Court for the District of Delaware, J. Caleb Boggs Federal Building, 844 King Street, Room 2313 Wilmington, DE 19801 on January 20,2000 at 2:00 PM. SEMI-TECH: Last Date To File Proofs of Claim -------------------------------------------- All persons and entities holding claims of any kind against one or more of the debtors that arose on or before the Filing Date are required to file a singed original of a completed proof of claim form in respect of such claim so that it is actually received not later than 5:00 PM NYC time on January 14, 2000. SGL CARBON: Settlement of Antitrust Claims ------------------------------------------ The debtor, SGL Carbon Corporation, is engaged in the business of manufacturing, marketing and distributing certain carbon and graphite products. The debtor seeks the court's approval of various Graphite Electrodes Settlement Agreements. Although the debtor denies any involvement in the alleged conspiracy underlying the alleged antitrust claims, the debtor has negotiated and executed the settlement agreements. Each graphite electrodes customer that executes a settlement agreement has an allowed claim against the debtor. The largest percentage of aggregate purchases agreed to as a settlement amount between the debtor and any graphite electrodes customer is 23.6% of aggregate purchases. SPORTS AUTHORITY: Moody's Confirms Sports Authority's Sub Notes --------------------------------------------------------------- New York, December 22, 1999 -- Moody's Investors Service lowered the rating of The Sports Authority Inc.'s ("TSA") senior secured credit facility to B2 from B1 after the amount of the line was increased to $275 million from $200 million with no change in the collateral package. TSA's other debt ratings were confirmed as follows: Issuer rating at B3 Convertible subordinated notes at Caa2 TSA's senior implied rating remains B2. The rating outlook on all debt remains negative. The new rating of the bank debt reflects the potential for additional borrowings on a flat or declining base of collateral. The bank debt is secured by TSA's inventory and accounts receivables. The amendment allows for a significant increase in the amount of debt without an increase in the total amount of security, which reduces asset coverage from prior levels. Moody's also believes that the ongoing level of bank debt could be generally higher if bank borrowings are needed to finance working capital or other operating needs. The increase in the bank lines has benefitted vendors and holders of the subordinated notes by providing increased liquidity to finance working capital and necessary operating costs in the near term. Bank lenders are protected by a borrowing base formula which limits outstandings to 80% of credit card receivables plus the lesser of 67.5% of the cost value of eligible inventory (with an increase to 70% during peak periods), or 80% of appraised value of eligible inventory. TSA does not have to meet any financial covenants as long as borrowing availability remains above $25 million. The confirmed ratings and the bank rating continue to reflect Moody's concerns about the deterioration of TSA's franchise among consumers; the expectation that fixed charge coverage is unlikely to improve in the near term; and Moody's belief that TSA's inventories were heavy going into the fourth quarter. Moody's believes that the Summer Olympics in 2000 and the company's merchandising and company efforts with regards to merchandising and store configurations could boost sales in the coming year. The rating outlook on all debt remains negative. Moody's is concerned about the potential for soft holiday sales and the performance of winter sports goods and apparel as a result of the warm weather to date in many parts of the U.S. This could result in greater than expected low-margin clearance of inventory early in 2000. The Sports Authority, Inc., headquartered in Fort Lauderdale, Florida, operates 201 specialty sports stores throughout North America, and licenses its name for 18 stores in Japan. Sales are anticipated to be about $1.5 billion in 1999. STAR NEWCO: Seeks Entry Of Interim Financing Order -------------------------------------------------- The debtor, Star Newco, Inc. seeks to amend the November 10 Financing Order to extend the time within which the Committee may commence an adversary proceeding against the Lender. The motion also seeks to further amend the November 10 Financing Order to provide that the Expiration Date as defined in the November 10 Financing Order shall be extended to December 29, 2000; the Overadvance Period shall be increased and shall mean the period commencing on the Effective date and ending on December 29, 2000; the Overadvance Amount shall be increased to $1.8 million the "Line of Credit" shall be reduced to $5.8 million, the monthly amortization payment shall be decreased to $15,000 per month; and the Pre-petition agreements shall be extended from February 7, 2000 to December 29, 2000. STAR NEWCO: Seeks Extension of Exclusivity ------------------------------------------ The debtor, Star Newco, Inc. seeks an extension of the period within which the debtor shall have the exclusive right to file a plan of reorganization and to solicit acceptances thereof. The debtor seeks an extension of the Exclusive Filing Period of 180 days, through and including July 3, 2000, and an extension of the right to solicit acceptances through September 1, 2000. Extending the debtor's exclusive periods will, according to the debtor, enable it to consult with the Creditor's Committee and other creditor constituencies, to continue to prosecute the environmental litigation in which the debtor is involved, to see whether a negotiated resolution can be achieved in the litigation, and to determine whether the debtor's streamlined business operations can function effectively and profitably now that the debtor has sold its Elgen Division and refocused its efforts on its core business. TECHNICLONE: Company's Continuation Dependent On Financing ---------------------------------------------------------- Reporting only income from interest and "other" income Techniclone Corporation shows net losses of $5,663,000 on $61,000 income in the three months ended October 31, 1999 and net losses of $8,653,000 on income of $124,000 in the six months ended that same date. By comparison, in the three months ended October 31, 1998, the company had net losses of $3,504,000 on income of $84,000 and net losses of $7,352,000 on income of $161,000 in the six months ended that date. The company must raise additional funds to sustain research and development, provide for future clinical trials and continue its operations until it is able to generate sufficient additional revenue from the sale and/or licensing of its products. The company plans to obtain required financing through one or more methods including, obtaining additional equity or debt financing and negotiating additional licensing or collaboration agreements with another company. There is no assurances that it will be successful in raising such funds on terms acceptable to it, or at all, or that sufficient additional capital will be raised to complete the research, development, and clinical testing of the company's product candidates. The company's continuation as a going concern is dependent on its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain additional financing as may be required and, ultimately, to attain successful operations. Currently, the company does not have sufficient cash on hand to meet its obligations on a timely basis and is operating at significantly reduced levels. Management knows that additional capital must be raised in the near term to support the company's continued operations and other short-term cash needs. If the company does not raise additional cash by December 31, 1999, it may have to file for protection under the laws of bankruptcy and may have to adopt the liquidation basis of accounting. TELEGROUP, INC: Order Fixes Hearing Date For Disclosure Statement ----------------------------------------------------------------- A hearing on approval of the Disclosure Statement of the debtor, Telegroup, Inc., shall be held on January 27, 2000 at 10:00 AM before the Honorable William F. Tuohey at the US Bankruptcy Court, King Federal Building, 50 Walnut Street, 3rd Floor, Newark, NJ 07102. TRANSTEXAS GAS: Revenues and Losses Down ---------------------------------------- TransTexas Gas Corporation, debtor-in-possession, experienced net losses in the nine months ended October 31, 1999, of $46,134 on revenues of $77,043. The comparable period in 1998 saw net losses of $155,372 on revenues of $137,699. In the three month quarter ended on the same date, October 31, 1999, the company had net losses of $4,773 on revenues of $29,405; while in the same quarter of 1998 the net losses were $147,763 on revenues of $32,793. The company has filed its second Amended Plan of Reorganization with Court hearings in November. In the meantime efforts for Y2K readiness finds the company reporting some shortcomings which they are hastening to rectify. Despite TransTexas' best efforts to ready its systems and infrastructure for the Year 2000, there are many factors outside of TransTexas' control that could affect readiness for the Year 2000. Failure of significant third parties to complete their Year 2000 compliance programs could interrupt the supply of materials and contract services needed for TransTexas' operations. Disruptions to natural gas, condensate and NGL transportation systems controlled by third parties could result in reduced production volumes delivered to market. Such occurrences could have a material adverse effect on TransTexas' business, results of operations and financial position. Although the company does not currently anticipate any such problems, TransTexas is developing contingency plans to identify alternative suppliers of goods and services in the event of such third party nonreadiness. BOND PRICING FOR WEEK OF DECEMBER 20 ------------------------------------ DLS Capital Partners Inc. provides Following are indicated prices for selected issues: Acme Metal 10 7/8 '07 12 - 15 (f) Amer Pad & Paper 13 '05 8 - 12 (f) Asia Pulp & Paper 11 3/4 '05 84 - 85 E & S Holdings 10 3/8 '06 37 - 40 Fruit of the Loom 8 7/8 '06 5 - 7 (f) Geneva Steel 11 1/8 '01 11 - 13 (f) Globalstar 11 1/4 '04 60 - 62 Hechinger 9.45 '12 10 - 12 Integrated Health 9.45 '12 7 - 9 (f) Iridium 14 '05 5 - 6 (f) Loewen 7.20 '03 51 - 53 Pillowtex 10 '06 45 - 48 Planey Hollywood 12 '05 28 - 30 (f) Purina Mills 9 '10 24 - 26 (f) Revlon 0 '01 19 - 21 Rite Aid 6.70 '01 86 - 88 Sunbeam 0 '18 15 - 16 TWA 11 3/8 '06 39 - 40 United Artists 9 3/4 '08 20 - 24 Vencor 9 7/8 '08 20 - 22 (f) ********* A listing of Meetings, Conferences and Seminars appears each Tuesday in the TCR. Bond pricing, appearing each Friday, is supplied 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., Trenton, NJ, and Beard Group, Inc., Washington, DC. Debra Brennan, Yvonne L. Metzler, Marlen O. Del Mar and Ronald Ladia, 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. 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