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Abortion, Collection Practices Still Stalling Bankruptcy
Bill
After failing to break a deadlock over two issues in dispute, the CQ
Daily Monitor reported today that supporters of bankruptcy reform
legislation say that only Senate leadership can break the impasse and
move the bill. The bankruptcy measure has been bogged down for weeks
over the issue of the abortion clinic wording in the bill, which would
prevent those charged with violence against abortion clinics or clinic
workers from using bankruptcy to escape the related debts, and over the
issue of collection practices for bounced checks, which would limit the
ability of some debtors to collect attorney's fees in lawsuits accusing
debt collectors of harassment. The first face-to-face bipartisan
negotiations off the Senate floor yesterday failed to move the
legislation forward. 'Where we are is that leadership...will have to
make a final judgment on anything left in dispute,' said Charles E.
Grassley (R-Iowa), referring to Majority Leader Trent Lott (Miss.) and
Minority Leader Tom Daschle (S.D.). 'Everyone who has tried to solve
[the abortion-related provision] has failed.' In addition, Democrats say
they have not yet studied the collection practices provision. 'I don't
know where we are,' said Patrick J. Leahy (Vt.), the ranking Democrat on
the Judiciary Committee and the main opponent of the provision.
Checkers Receives $40 Million Credit Facility
Checkers Drive-In Restaurants Inc. received a commitment for a new $40
million credit facility from Textron Inc.'s Textron Financial Corp.
unit, according to a newswire report. The Clearwater, Fla.-based
hamburger chain said it will use part of the facility to retire its
remaining nine senior notes that will mature June 15. Checkers filed for
chapter 7 protection in January and has sold many of its restaurants.
Family Golf Centers Secures DIP Financing
Family Golf Centers Inc. announced yesterday that it received final
approval from the bankruptcy court of its $15 million
debtor-in-possession (DIP) financing from The Chase Manhattan Bank,
according to a newswire report. The Melville, N.Y., company said that
the entire DIP facility is now available for working capital and other
post-petition expenses of Family Golf and its domestic subsidiaries. The
Chase Manhattan Bank is currently the existing working capital lender
for Family Golf. The company filed for chapter 11 protection on May 4.
Illinois Attorney General Seeks Injunction
Illinois Attorney General Jim Ryan and Lake County, Ill., officials say
that the current bankruptcy proceedings of residential developer United
Homes Inc. have no bearing on the environmental complaint they filed
against the company last Wednesday, according to a newswire report.
Recent storms across the northern part of Illinois prompted Ryan to seek
an injunction to stop the unmonitored increase of silt into Lake
Catherine allegedly caused by the Springfield, Ill.-based company.
Ryan's Environmental Law Division said United Homes has had difficulty
complying with permits granted the site since at least April of last
year. United Homes filed for chapter 11 in protection in the U.S.
Bankruptcy Court for the Northern District of Illinois.
Microbest Seeks Chapter 11 Protection from Hostile
Insiders
Microbest Inc. announced yesterday that it filed for chapter 11 last
Thursday, according to a newswire report. The Boca Raton, Fla., company
filed for bankruptcy to protect shareholders, vendors, employees and
customers from two former insiders who made a hostile attempt to acquire
the company's assets to satisfy a judgment they received as a result of
a settlement negotiated in 1998. 'While engaged in good-faith
negotiations to resolve the issue, we became aware of separate,
aggressive maneuvers to obtain control of the company's cash flow and
physical assets. We moved quickly to protect the company,' said Chief
Executive Officer Michael J. Troup. Chief Financial Officer Bill Breslin
stated, 'It is our intention to present our plan of reorganization to
the bankruptcy court as quickly as possible.'
Zegarelli Group Settles Lawsuit
Zegarelli Group International Inc. (ZEGG) announced yesterday that it
has settled the lawsuit with the buyers of its contract packaging
business, according to a newswire report. ZEGG is currently operating
under chapter 11, and sources say that the settlement will enable the
company to work out an arrangement with creditors. As a result of the
settlement, ZEGG will receive $400,000 through August and will collect
$1.7 million plus interest in quarterly installments over six years.
Zegarelli markets a line of professional hair care products based in
Chatsworth, Calif.
Stage Stores's $450 Million DIP Facility Receives Interim
Approval
On Friday, Hon. Wesley W. Steen (S.D. Texas) approved a number of
first-day motions and a debtor-in-possession (DIP) facility of $450
million on an interim basis for Houston-based Stage Stores Inc., which
filed for chapter 11 on Thursday in Houston along with two subsidiaries.
A hearing for the final approval is set for June 26. The DIP facility is
funded by a group of banks for which CITICORP USA INC. is the agent.
Bankruptcy counsel are Andrew E. Jillson and Lynnette R. Warman
of Jenkens & Gilchrist PC, Dallas. Stage Stores sells brand-name
apparel, accessories, cosmetics and footwear to small communities in the
U.S., primarily under the names Stage, Bealls and Palais Royal.
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