Weiner’s Stores Retains DJM Asset
Management to Dispose of 39 Stores
The U.S. Bankruptcy Court for the District of Delaware has approved
Weiner’s Stores’ retention of DJM Asset Management LLC as
real estate advisor to dispose of selected properties in three states,
according to a newswire report. DJM will market 39 retail leases
in locations throughout Texas, Louisiana and Arkansas.
Weiner’s, a family apparel retailer, operates 141 stores in Texas,
Louisiana, Arkansas, Mississippi and Alabama. It has been
operating under bankruptcy since October. Based in Melville, N.Y.,
DJM Asset Management LLC helps retailers dispose of unwanted locations.
Regent Las Vegas Files For Bankruptcy
The 16-month-old Regent Las Vegas casino filed for chapter 11 bankruptcy
protection last week, citing as the primary culprits construction delays
and cost overruns before the property's July 1999 limited opening,
according to The Las Vegas Review-Journal. The move
followed a September default on $5 million worth of payments owed to
creditors that led to restaurant closures, the layoff of 259 workers and
the departure of a Regent president who held his job for just two
months.
In recent weeks, executives of the property's parent company, Swiss
Casinos of America, have been talking with creditors to renegotiate
repayment of the property's $220 million-debt package. The Regent
will remain open and no additional layoffs are planned. The
privately owned Regent, which opened as The Resort at Summerlin, lists
assets of $296.4 million against liabilities of $365.8 million.
Armstrong Defaults on Debt, Company Can't Repay $50 Million to
Investors
Armstrong Holdings Inc. Wednesday defaulted on a bank credit line,
further complicating the global building products firm's struggle to
avoid bankruptcy, according to the Intelligencer Journal
Lancaster. Armstrong said the default was triggered by the
company's inability to repay $50 million to investors holding commercial
paper that matured Wednesday. Armstrong and other companies sell
commercial paper, which are short-term debt securities, to investors to
raise money to fund their business operations. Typically,
Armstrong uses a bank credit line to cover its commercial paper
obligations. The failure to repay the maturing paper violated the
financial terms of Armstrong's $450 million bank credit line which
expires in October 2003. The lender could now move up the
expiration date on the credit line.
Stan Steinreich, an Armstrong spokesman, said terms of the company's
bank financing include “cross default” provisions, one of
which triggered the default on the bank credit line. That means
Armstrong now runs the risk of the first default causing a cascading
effect, resulting in more defaults on its debt obligations in the coming
weeks. Because of the Thanksgiving holiday weekend, the
ramifications of Armstrong's default won't be clear until later this
week. Steinreich thought it was the first time the Lancaster,
Penn.-based Armstrong had defaulted on any of its debt in the firm's
140-year history. Last week, Armstrong disclosed in a U.S.
Securities and Exchange Commission filing that it was in a cash crunch,
which may force the company to consider seeking bankruptcy protection.
Armstrong is saddled with an estimated $1.4 billion in asbestos
liabilities.
BioShield Defaults On Purchase of AHT Assets
AHT Corp. announced Friday that the U.S. Bankruptcy Court for the
Southern District of New York terminated the agreement between AHT and
BioShield Technologies Inc. dated Sept. 22 in which BioShield agreed to
purchase the assets of AHT for approximately $15 million in cash and
stock, according to a newswire report. BioShield advised the
Tarrytown, N.Y.-based AHT that it was unable to secure the funds
necessary to consummate the asset purchase agreement. At AHT's most
recent Bankruptcy Court hearing, BioShield failed to show evidence of
its ability to provide additional interim financing to AHT. AHT
said that it has sold its operating assets to Cybear Inc., pursuant to
§ 363 of the U.S. Bankruptcy Code, in consideration of a credit bid
of Cybear's $4 million claim and senior security interest in AHT's
assets. AHT will use its remaining assets to pursue the BioShield
litigation and to finalize the business affairs of the company.
AHT's pending $70 million lawsuit against BioShield and certain of its
officers and directors, which was to be settled as part of the purchase
of assets, will continue in full force. This lawsuit was filed against
Bioshield on Sept. 7 for fraudulently inducing AHT to enter into a
merger agreement announced on July 3 and then breaching that agreement.
AHT has added additional counts to the original lawsuit against
BioShield, with respect to BioShield's breach of the merger
agreement. AHT believes that BioShield and the individual
defendants have significant assets as well as liability insurance
coverage that could be used to satisfy a judgment against them.
Responsive Research Adds CFI Mortgage Inc. to Its Client List Of
Emerging Growth Companies
Responsive Research Inc. Friday announced that it has been retained
by CFI Mortgage Inc. (CFIM) as its Investor Relations Coordinator,
according to a newswire report. The Coconut Creek, Fla.-based CFIM
is in a turnaround situation, having emerged from bankruptcy and
produced profitability within the last year. Responsive Research
President Richard C. Winkel said that CFIM, which provides mortgage
services through a large network of mortgage brokers and financial
professionals, meets and exceeds Responsive’s criteria as an
emerging growth company.
“This quarter represents more than the fact that it was the
first profitable quarter since taking over in July 1999,” Steve
Williams, CFIM Chairman and CEO, said. Just 14 months ago, CFIM
had a negative $10 million in shareholder equity and was operating under
the reorganization plan. There were no operating subsidiaries producing
revenue. We have a shareholder equity in excess of $1 million, and
our subsidiaries are in full operation and now focused on revenue growth
and profit.”
Daewoo’s Big Contractor Escapes Default
Fears of mass bankruptcy among hundreds of auto parts suppliers for the
insolvent Daewoo Motor Co. eased on Saturday when its main contractor
escaped default, according to a newswire report. Korea Delphi
Automotive Systems, the country's largest auto parts maker, was financed
to settle 32 billion-won bonds due to mature on Saturday, said its main
creditor, Korea Development Bank (KDB).
Delphi has been vulnerable to a chain of bankruptcy since Daewoo
Motor, which used 74 percent of Delphi-made parts, went bankrupt Nov.
8. Delphi's bankruptcy would have a huge impact on the country's
auto industry and economy as it has 297 sub-contractors
nationwide. Despite the good news for Delphi and its
sub-contractors, fears remain of a chain of bankruptcies among other
suppliers.
The Havana Group Inc. Obtains $2 Million Credit Line from Wells
Fargo
The Havana Group Inc. (HVGP) Friday announced that its wholly owned
subsidiary, Phillips & King International Inc., obtained a $2
million working capital line of credit from the Wells Fargo Bank,
according to a newswire report. Wells Fargo, the bank of record at
Phillips & King for 10 years, provided the new credit facility
through its affiliate, Wells Fargo Business Credit Inc.
Phillips & King International's reorganization plan was confirmed
by the U.S. Bankruptcy Court for the Southern District of California and
was deemed effective on Aug. 4. The North Canton, Ohio-based HVGP
purchased Phillips & King for cash, stock and assumption of certain
liabilities. HVGP is a direct marketer of tobacco products,
which include tobaccos, smoking pipes, make-your-own cigarettes, cigars,
and smoking accessories. Phillips & King International Inc. is
a California-based wholesale distributor of cigars, pipes, tobaccos and
smoking accessories.
Panel Rules Against Former Council Member in Bankruptcy
Case
A federal appeals panel on Friday ruled that a judge in Kansas City
properly dismissed the bankruptcy case of civic activist and former City
Council member Richard Tolbert, according to The Kansas City
Star. Tolbert, who has filed for personal bankruptcy eight
times since 1997, had appealed the dismissal of his seventh filing in
April, arguing that Chief Bankruptcy Judge Arthur B. Federman
misunderstood why he had filed.
The Bankruptcy Appellate Panel for the Eighth Circuit ruled Friday
that Federman had sufficient grounds to dismiss the case and bar Tolbert
from refiling for 180 days.
“(Federman’s) finding that (Tolbert) abused the
bankruptcy process is amply supported by the record,” said
Judge Barry S. Schermer of the bankruptcy appeals panel.
Tolbert said Friday that he plans further appeals.
