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Lernout to Detail Restructuring This
Week
Belgium's beleaguered Lernout & Hauspie (L&H) said on
Friday that it might disclose plans to sell all or part of itself this
week when it appeals against a recent court decision denying it
bankruptcy protection, according to a Reuters report. The
developer of speech recognition technology also said it would give more
details about the state of its operations when it files its appeal in
the Belgian town of Ghent early next week.
“We are continuing to [negotiate] with outside parties with
potential interest in parts of the company and the whole of the
company,” said L&H Chairman Roel Pieper. “Some of these
discussions are at an early stage, some are more serious. We are
going to consider everything possible at the moment as we try to get the
concordat,” he added, referring to the Belgian equivalent of U.S.
chapter 11 bankruptcy. L&H's translation business is seen as
the most attractive to suitors since it runs virtually independent of
the other units. Fortis analyst Patrick Michielsen said L&H
needed help to stay in business. “The restructuring is going
to depend on outside partners,” he said.
Athey Products Corp. Announces Bankruptcy
Court Ruling
Athey Products Corp., a street-sweeping and material-handling
equipment manufacturer, announced Friday that it filed a voluntary
chapter 11 petition Friday in the U.S. Bankruptcy Court for the Eastern
District, Raleigh Division, on Dec. 8. The court heard and
approved certain of the Wake Forest, N.C.-based company's initial
motions on Dec. 14. The court approved the company's motion for
authorization to use cash collateral, and its motion for payment of
wages to employees and salaries to officers. This approval will
enable the company to recall many of its employees and resume production
of its products pending further proceedings. Also approved was a motion
to retain Nachman Hays Consulting Inc. for management consulting and
transaction services.
Medline Acquires SunChoice Medical
Supply
Medline Industries Inc. Friday announced that it has reached an
agreement to acquire certain assets of SunChoice Medical Supply Inc.,
subject to U.S. Bankruptcy Court approval, according to a newswire
report. Sun Healthcare Group Inc., the parent company of
SunChoice, is currently reorganizing under chapter 11. SunChoice
provides medical supplies, durable medical equipment and
over-the-counter medications primarily to the long-term care market.
Medline is the largest privately held manufacturer and distributor of
health care supplies in the United States. Under the agreement,
the Mundelein, Ill.-based Medline will purchase certain assets of
SunChoice, including product inventory.
TSR Declares Bankruptcy
A New Jersey bankruptcy judge has kept the doors of the largest
privately held paging company in the United States from closing —
protecting 2.5 million subscribers from losing their service for at
least a little while longer, according to a newswire report.
Rosemary Gambardella, chief justice of the U.S. Bankruptcy Court in
Newark, has begun work to prevent TSR Wireless of Fort Lee, N.J. from
selling off its assets. To keep operations going, Gambardella has
allowed a bankruptcy attorney to use TSR's company accounts as well as a
pool of $21 million in company cash holdings. If a buyer is not
found, the company will be dissolved and the service stopped. The
company filed for chapter 7 liquidation last week, five days after
closing its doors and laying off most of its1,700 employees. The
abrupt closure caused confusion and threw the company's operations, its
employees, and many of its 2.5 million subscribers into limbo. TSR
competitor, Metrocall Inc. of Alexandria, Va., had begun negotiations to
buy the company, but talks broke down just prior to the Dec. 4
bankruptcy announcement.
Quentra Networks Files Chapter 11
Telecommunications provider Quentra Networks Inc. announced on
Friday that it filed for protection chapter 11 protection, according to
a Reuters report. Bruce Ballenger, Quentra's recently appointed
chief executive, the company would continue to maintain normal business
operations. Its core business going forward will be the delivery of
bundled e-commerce and telecom services, he said. The New
York-based Quentra recently announced that it had taken actions to
significantly lower its operating expenses, including reducing its work
force, primarily in retail and international telecom operations. It said
it plans to consolidate the majority of its remaining operations and
employees.
Celebrity Athletes Sue Planet Hollywood
Four celebrity athletes, including top professional golfer Tiger
Woods, have sued Planet Hollywood International Inc., alleging the
bankrupt theme retailer and restauranteur breached its contracts with
them, according to a Reuters report. In papers filed on Friday in
the U.S. District Court in Delaware, the plaintiffs, including tennis
champions Andre Agassi and Monica Seles, Hall of Fame quarterback Joe
Montana, and Woods, said they notified Planet Hollywood last month that
they consider their 1996 endorsement contracts to be terminated.
The contracts called for the athletes to receive shares of Planet
Hollywood common stock in exchange for personal appearances and the use
of the celebrities' names, likenesses and certain memorabilia for
promoting the company's restaurant chain. The plaintiffs have
asked that the memorabilia be placed in custody and inventoried, and
that the court award unspecified damages and legal costs.
The company’s plaintiffs allege that Planet Hollywood defaulted
on its contracts by rejecting them in the plan of reorganization, under
which it expects to emerge from chapter 11 bankruptcy. Planet
Hollywood filed for bankruptcy in the U.S. Bankruptcy Court in Delaware
on Oct. 1, 1999 and began dismantling its All Star Cafe restaurant
chain, which is also named as a defendant in the lawsuit. Judge
Joseph Farnan of the U.S. District Court has scheduled an emergency
hearing on Monday to consider a request that he bar Planet Hollywood
from using the sports figures' photographs or names.
Pickle Maker Vlasic's Ratings Sour, Bankruptcy Possible
Vlasic Foods International Inc., the pickle maker known for its
mascot stork with the Groucho Marx voice, saw its credit ratings fall
late this week after it warned in a Securities and Exchange Commission
filing that it may seek bankruptcy protection, according to a Reuters
report. Moody's Investors Service and Standard & Poor's cut
their ratings on the Cherry Hill, N.J.-based company's debt and credit
lines to low junk grades. Vlasic earlier this week reported a huge
first-quarter loss and said it was likely to default on a debt issue and
failed to comply with terms of the credit line.
Vlasic said it is not in compliance with certain covenants under its
$320 million senior credit line, but has obtained a waiver through Feb.
28. The company also said it is “unlikely” to make a
$10.25 million payment due Jan. 2 on its $200 million senior
subordinated notes that mature on July 1, 2009. One condition of
the credit line waiver is that Vlasic fund an escrow account for the
note payment by Dec. 28. If it doesn't do that, the banks could
accelerate repayment of the bank loan and block the interest payment on
the notes.
U.S. Regulators Issue Rules to Stabilize California Power
U.S. regulators approved a series of steps Friday aimed at fixing the
crisis in California power markets, which have nearly run out of the
electricity needed to fuel rampant economic expansion in the nation's
largest and richest state, according to a Reuters report.
Commissioners with the Federal Energy Regulatory Commission (FERC)
unanimously adopted a plan directing wholesale power markets and state
officials to mend what the agency sees as a state mess caused by a 1996
incoherent deregulation plan.
The federal action comes at a time when California has barely avoided
blackouts caused by a lack of supply, surging demand and skyrocketing
natural gas prices. The spike in wholesale prices have brought the
state's largest utilities to the brink of bankruptcy, draining some $8
billion from the cash reserves of PG&E Corp's Pacific Gas and
Electric and Edison International's Southern California Edison.
Financial analysts have said, however, that despite spending far more
to buy electricity than it charges consumers, Pacific Gas & Electric
Co. it isn't facing the imminent bankruptcy that politicians fear.
Right now the company can pay its bills, but the utility could be
plunged into a financial crisis if it doesn't get a rate hike or other
new sources of cash soon. The utility has already borrowed $4.6 billion
to buy electricity at high market rates. Lenders won't keep making loans
to the company and power producers won't keep selling it electricity
unless they see strong evidence that they're going to be repaid.
The California Public Utilities Commission will meet Thursday to
consider PG&E's arguments that it has met the legal requirements to
hike rates.
Natural Wonders Files for Bankruptcy
Protection
Science and nature products retailer Natural Wonders Inc. said yesterday
that it was seeking bankruptcy protection, citing weak holiday sales,
according to a Reuters report. The Fremont, Calif.-based company,
which last month said its third quarter loss grew nearly 25 percent to
$4.86 million, said it filed a chapter 11 petition with the U.S.
Bankruptcy Court in Oakland, Calif.
“We were unable to work out an alternative with our secured
lenders quickly enough to protect the other constituencies of the
company, including our shareholders, employees, vendors and
landlords,” said Peter Hanelt, Natural Wonders' chief
executive. The company operated 309 stores as of Dec 17. The
Fremont, Calif.-based company said it believed the filing would help it
reorganize and continue operations as a going concern.
Restaurant Teams International Acquires Kelly's Coffee &
Fudge
Restaurant Teams International Inc. (RTIN) Friday announced the
acquisition of Kelly's Coffee and Fudge of Beverly Hills, a 26-unit
franchise operation of coffee houses located throughout Southern
California, Arizona, and Nevada, according to a newswire report.
Kelly's, founded in 1985, filed for bankruptcy early this month in
federal bankruptcy court in Los Angeles. The Longview, Texas-based
RTIN expects the reorganization to be complete by the end of the first
quarter of 2001.
Bradlees in Talks With Lenders, Liquidation
Possible
Discount retailer Bradlees Inc. said on Tuesday in a filing with the
Securities and Exchange Commission that it is in talks with lenders to
re-work the terms of a revolving credit agreement and was exploring
several options, including liquidation, according to a Reuters
report. The Braintree, Mass.-based company, which emerged from
chapter 11 bankruptcy last year, said that current projections show
there may not be sufficient cash flow from operations to comply with a
$290 million credit line. The revolver requires the company to
maintain $50 million of available cash from Dec. 15 to Jan. 15.
Bradlees is talking with lenders to modify or waive the covenant to
avoid a default under the loan and to allow for the continuation of
operations. The company said it is considering various
alternatives including strategic combinations and partial or complete
liquidation.
Bankruptcy Court Approves Adequacy of Vencor's Disclosure
Materials
Vencor Inc. Friday announced that the U.S. Bankruptcy Court for the
District of Delaware has approved the adequacy of the information
contained in the Louisville, Ky., company's fourth amended disclosure
statement and the short-form of the fourth amended disclosure statement,
according to a newswire report. The company intends to distribute the
disclosure materials on or before Dec. 29 to solicit approval of the
company's fourth amended plan of reorganization filed with the court on
Dec. 14. Vencor and its subsidiaries filed voluntary petitions for
reorganization under chapter 11 with the court on Sept. 13, 1999.
Vencor is a national provider of long-term health care services which
primarily include nursing centers and hospitals.
AdminiQuest Bankrupt, Software Glitch Ends Business
A costly glitch in its software products has crippled the Colorado
Springs, Colo.-based AdminiQuest Inc., forcing the startup company to
file for bankruptcy and liquidate its business, according to a newswire
report. AdminiQuest, which provides web-based business services
for the insurance industry, began removing its software from the
Internet in September after a technician found problems with the
product. The company originally thought the problems could be fixed in
several weeks, but now estimates it will need $6.5 million and at least
a year.
AdminiQuest filed for chapter 11 bankruptcy in Denver on Nov. 13. The
filing has now been converted to chapter 7 bankruptcy, and Darnell Dent,
the president and chief operating officer of AdminiQuest, said he
expects to hand over the keys to the company's office next week.
Judge Approves $290 Million Loan For Wheeling-Pitt
A $290 million loan that will allow Wheeling Pittsburgh Steel Corp. to
continue operating has been approved by a federal bankruptcy judge
overseeing the company's reorganization, the company said today.
Bankruptcy Judge William Bodoh granted tentative approval for the
loan last month, and finalized the decision on Wednesday.
The steel maker filed for chapter 11 on Nov. 16 in Youngstown, Ohio,
citing competition from steel imports. The loan from Citibank M.A. will
enable Wheeling- Pittsburgh's 4,800 employees to continue working to
meet orders. Wheeling-Pittsburgh, a subsidiary of WHX Corp., is
the nation's ninth-largest integrated steel producer and operates plants
in Ohio, Pennsylvania and West Virginia.
Aetna Could Announce Restructuring, Layoffs
Aetna Inc. is expected today to announce its financial forecast for next
year, which could include restructuring-related charges and a
potentially large number of layoffs, according to the Wall Street
Journal. The nation’s largest health insurer last week
scheduled a conference call for this morning “to discuss the
company’s financial outlook for 2001.” Aetna has seen
higher medical costs increases than its competitors. Last month,
John W. Rowe, the new chief executive, said the health care business
next year would surpass this year’s results, but didn’t
provide more guidance. That type of guidance is expected today and
may include plans for a large number of layoffs, which could be 12
percent of the company’s workforce.
Decora Industries Gets Interim OK For $18.1 Million Under DIP
Loan
The U.S. Bankruptcy Court in Wilmington, Del., has granted Decora
Industries Inc. interim approval to borrow $18.1 million under its $20
million debtor-in-possession (DIP) revolving credit agreement, pending a
final hearing on the loan. Judge Joseph J. Farnan scheduled a
final hearing on the facility, which is being offered by syndicate of
lenders led by collateral agent Ableco Finance LLC and administrative
agent The CIT Group/Business Credit Inc., for Dec. 20, according to an
order the judge signed on Dec. 5.
Courtesy of
href='http://www.fedfil.com/bankruptcy/developments.htm'>The Daily
Bankruptcy Review Copyright © December 18,
2000.
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