August 72000

Woman

Sentenced in Bankruptcy Scam

Sandra Lynn Williams, a former bankruptcy petition-preparer,

was sentenced July 24 in federal district court in San Diego

to eight months in federal prison and ordered to pay $8,525

in restitution to debtors and renters in a rent-skimming scam,

according to a Department of Justice report. She was sentenced

on 15 felony counts of preparing and filing false bankruptcy

petitions to stall eviction proceedings. Under the business

name the “Legal Rights Center,” Williams placed ads in the Pennysaver

magazine stating that she could help tenants facing imminent

eviction to remain in their apartments “rent free” in exchange

for a fee. After collecting a fee of $300-500, she filed partial

bankruptcy petitions in the names of the renters, causing the

eviction to be stayed for several months. The renters did not

know a bankruptcy would be filed in their names, but because

the bankruptcies were incomplete, all cases were dismissed after

a hearing when no one appeared. Williams filed more than 100

such cases in the bankruptcy scheme.

Master

Graphics DIP Financing Agreement Approved

Master

Graphics Inc. announced Friday that it received interim approval

from the bankruptcy court of its $12 million debtor-in-possession

(DIP) financing agreement to fund the company's operations during

its restructuring process, according to a newswire report. The

pre-petition lenders have agreed to extend up to an additional

$12 million in post-petition financing to fund the Cordova,

Tenn.-based company's ongoing operating needs during its voluntary

restructuring under chapter 11. The order from the court permits

the company to borrow up to $4.5 million immediately upon execution

of loan agreements with the remaining $7.5 million becoming

available upon completion of the company's operating plan. The

court also approved the company's employee retention program,

developed by Master Graphics to provide an added measure of

job and financial security to employees during its restructuring.

Master Graphics and its wholly owned subsidiary, Premier Graphics

Inc., filed its chapter 11 case on July 7 in the U.S. Bankruptcy

Court for the District of Delaware in Wilmington.

Adelphia/OpTel

Deal Given Green Light

After several months of discussion, Adelphia has agreed to purchase

Dallas-based OpTel, according to a newswire report. OpTel's

official unsecured creditors' committee worked with the company

in negotiating the asset-sale agreement with Adelphia and supports

the deal, according to the motion. OpTel filed chapter 11 on

Oct. 28, listing assets of $540.4 million and liabilities of

$496.2 million. Since that time, the company has been seeking

buyers for its cable television assets in an attempt to reorganize

around its telecommunications assets. OpTel expects that CIT

Group/Business Credit Inc., Foothill LC Capital Corp. and its

other secured creditors will consent to the sale, noting that

proceeds from the asset sale will enable it to pay in full all

amounts owed to the secured creditors who have liens on the

assets. The sale will also provide funds to pay administrative

and priority claims and other critical unsecured claims, and

will enable OpTel to distribute a dividend to all other unsecured

creditors. The assets to be sold to Adelphia include about 24,000

basic and bulk subscribers in the Los Angeles- and San Diego-area

markets. The company is also a party to about 100 other executory

contracts and non-residential real-property leases, the assignment

of which is also essential to the sale.

American

Eco Files For Bankruptcy

American Eco Corp. of Houston and Toronto, as well as 23

affiliates, filed chapter 11 Friday in the U.S. Bankruptcy Court

in Delaware, according to a newswire report. The company also

has filled chapter 11 in Canada under the Companies Creditors

Arrangement Act for MM Industra Limited of Halifax, Nova Scotia;

CCG Development, Inc. of Toronto; and Industra Service Corp.

of Vancouver, B.C., and their respective subsidiaries. The petition

for one of the affiliates, American Eco Holding Corp., listed

the consolidated financial data for all 24 entities as $233.4

million and the debts as $195.9 million including $117.0 million

in unsecured senior notes. GE Capital Corp. has a secured claim

of $27 million. The largest unsecured creditor listed in court

papers is State Street Bank and Trust Co., Boston, the trustee

for the senior notes. Unsecured bondholders and their claims

include Dreyfus Corp. of New York, $20.8 million; Mitchell Hutchins

Asset, New York, $12.5 million; Putnam Investments, Boston,

$10.5 million; and Grace Brothers Ltd., $9.4 million. Eco is

a consolidator of outsourcing services to the energy, pulp and

paper, power generation and construction management service

industries.