March 2, 2000
Willcox & Gibbs Schedules Confirmation Hearing
Willcox & Gibbs Inc. announced that the hearing for
confirmation of its chapter 11 plan has been scheduled for April 3,
according to a newswire report. The disclosure statement will be mailed
to creditors this week, and if the plan is confirmed Willcox & Gibbs
expects to emerge from chapter 11 in mid-April. The Carteret, N.J.,
company also said it has entered into a commitment letter with Banc of
American Commercial Finance Corp. for a $26 million revolving credit
facility. Implementation of the new credit facility is subject to
certain conditions, including negotiation and execution of definitive
documentation, completion by the lender of its due diligence review and
confirmation of the plan. Willcox & Gibbs is the largest distributor
in North America of replacement parts, supplies and ancillary equipment
to manufacturers of apparel and other sewn products.
McCaw Plans to Combine ICO and Iridium with His Project
Cellular phone pioneer Craig McCaw is planning to combine ICO
Global Communications Ltd. and Iridium LLC, both in chapter 11
currently, with his own proposed Teledesic project to create global
voice-and-data network, according to documents he has filed in the
bankruptcy cases of the two companies and interviews, The Wall
Street Journal reported. He hopes to acquire the two companies and
combine them with his satellite network to provide telephone service and
high-speed Internet access. McCaw is leading a $1.2 billion bailout of
ICO and is proposing to invest about $600 million to take control of
Iridium. In documents filed in bankruptcy court last week, McCaw said he
planned to transfer ownership of ICO to a new company, temporarily named
New Satco. If he wins control of Iridium, he said he would merge it into
New Satco. He also said that it is 'possible' that Teledesic, which has
raised $1.5 billion of an expected $10 billion financing, also would be
acquired by New Satco. A Wit Soundview analyst said McCaw's plan makes
sense and that he's 'treating [radio] frequencies like real estate. He
looks at these programs that just aren't working, so he'll buy it and
figure out how to make it work.' The analyst compared this deal to
McCaw's 1995 takeover of Nextel Communications Inc., whose cell phones
double as two-way radios.
According to a term sheet circulating among Iridium creditors, McCaw
and primary contractor Motorola Inc. have proposed to take a 78 percent
stake in a restructured Iridium for $600 million. About $260 million in
cash and $50 million in notes would got the banks that hold $800 billion
in Iridium notes, and they would get a three percent stake in the new
Iridium. The remaining $600 million would become working capital for the
new Iridium. Some lenders are opposed to this plan; they argue McCaw and
Motorola are being allowed to buy the system for very little money. One
group of creditors filed motions last month to block the takeover and
sought permission to sue Motorola for problems that contributed to
Iridium's problems. A spokesman for McCaw said the term sheet is out of
date but did not comment on the proposal to take over Iridium.
America's Best Furniture Warehouse to Close Six
Stores
Hilco Great American Group announced that the bankruptcy court in Salt
Lake City, Utah, approved the firm as the consultant to dispose of the
inventory in six of the America's Best Furniture Warehouse stores in
Colorado, Nevada, Utah and Idaho that will be closed, according to a
newswire report. Going-out-of-business sales will begin within the next
two weeks, and America's Best will continue operating its remaining
three locations. The company will begin a cash raising sale immediately
in the stores to remain open.
This End Up to Close 65 Stores
TEU Holdings Inc., Richmond, Va., announced yesterday that it
will seek court approval to close 65 of its 135 retail stores, all of
which operates under the trade name This End Up, according to a newswire
report. TEU Holdings and 122 affiliated companies filed chapter 11 in
Delaware on Feb. 17. The stores to be closed constitute less than 25
percent of the chain's consolidated sales volume for the first eight
months of its fiscal year ending May 31, 2000. Those stores are
primarily located in outlying regions, either too small to support the
company's product lines or unprofitable due to high operating costs.
Consolidation of sales to the Northeast market will reduce
transportation and delivery costs and improve profitability. The
closings are expected to be completed by April 30.
Duff & Phelps Credit Rating Co. Does Not Change
Integrated Health Services' Rating
After reviewing the Feb. 2 chapter 11 filing of Integrated
Health Services Inc. (IHS), Duff & Phelps Credit Rating Co. confirms
that a rating watch action is not necessary at this time for GMAC
Commercial Mortgage Securities Inc., Series 1997-C2, according to a
newswire report. The Litchfield/IHS loan is secured by 41 skilled
nursing homes and two retirement centers, which are leased and operated
by IHS of Lester Inc., a wholly owned subsidiary of of IHS. Litchfield
Corp., the borrower, has notified GMAC that at this time it expects to
continue paying timely debt service in full.
Martin Color-Fi Signs Merger Agreement
Martin Color-Fi Inc. (MCF), Edgefield, S.C., announced it has
signed a merger agreement with an affiliate of Dimeling, Schreiber &
Park, a Philadelphia-based investment partnership which specializes in
private equity investments primarily in the form of chapter 11
reorganizations. If the agreement is approved by the bankruptcy court
and consummated, all of the currently outstanding MCF shares will be
canceled, and new MCF shares will be issued to Dimeling, Schreiber &
Park. That company will become the sole shareholder of restructured MCF
upon effectiveness of the merger. The agreement will be reflected in the
reorganization plan that MCF expects to file shortly in the District of
South Carolina. The agreement provides that it is subject to competing
overbids.
'Bleed Out' Bankruptcy Schemer Sentenced
U.S. Attorney Ted L. McBride announced that Terry Anderson,
formerly of Aberdeen, S.D., was sentenced this week to 15 months in
prison on a charge of fraud in relation to the 1993 chapter 11
bankruptcy of Home Care Pharmacy Services Inc., according to the
Department of Justice. A federal grand jury indicted Anderson on July
21, 1999, and he entered a guilty plea in January. The court held that
the chapter 11 bankruptcy was a 'bleed out' scheme designed to defraud
bankruptcy creditors by improperly shifting assets of the former
Aberdeen pharmacy to a similar business operated by Anderson in
Jamestown, N.D., and thus deprive the bankruptcy estate of valuable
assets that could have been used to pay creditors of the South Dakota
business. Anderson admitted that after the chapter 11 was involuntarily
converted to a liquidation proceeding for inactivity, he filed a false
document in bankruptcy court that failed to disclose the transfer of
assets to the North Dakota business. The case was the product of the
U.S. Attorney's Bankruptcy Fraud Task Force and was prosecuted by
Assistant U.S. Attorney Craig Peyton Gaumer.
AmeriServe Seeks to Sell Equipment Unit in $53M
Deal
AmeriServe Food Distribution Inc. (AMSV) is asking the bankruptcy court
for authorization to sell its foodservice equipment division to stalking
horse bidder Arbor Private Investment Co. LLC for $32.5 million cash
plus the assumption of more than $20 million in liabilities. The
division to be sold distributes restaurant equipment and supplies to
quick-service and casual dining restaurants across the U.S. such as
Burger King Corp. (DEO) and TGI Friday's.
Courtesy of
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