January 62000

January 6, 2000

Creditors File Involuntary Petition Against KCS Energy

Noteholders of KCS Energy Inc. filed a petition yesterday in
the District of Delaware seeking to place Houston-based KCS into chapter
11, according to a newswire report. Court documents indicate that the
creditors have claims of $23.1 million for 11 percent senior notes due
2003, together with interest, liquidated damages and fees. The
noteholders include the Offit High Yield Fund with an $11 million claim,
the Prudential Insurance Co. of America with a $2.9 million claim and B
III Capital Partners LP with a $9.2 million claim. Last month KCS said
it planned to file chapter 11 by Jan. 18 and that lenders had agreed to
provide up to $190 million in credit. The company also said it would
restructure more than two-thirds of its 8.875 percent senior
subordinated notes due January 2008 and the 11 percent notes. At the end
of September the company's reported liability was $437 million, none of
which is long-term debt.

Largest Massachusetts HMO in Receivership

Accounting errors at Harvard Pilgrim Health Care, the largest
HMO in Massachusetts, have left the company with millions of dollars
more in losses than anticipated and a court order placing it into
receivership, the Associated Press reported. Last week the HMO closed
its 125,000-client Rhode Island operation because of significant losses
there. The court order came Tuesday after the HMO announced accounting
errors for loss estimates that increased from $100 million to more than
$170 million. Massachusetts Insurance Commissioner Linda Ruthardt said
that using one accounting standard, the company has a $40 million
balance, but using another, which values buildings less and takes future
liabilities into account, the company would be in the red. The order for
receivership prevents creditors from seeking payment from Harvard
Pilgrim through bankruptcy and it requires a plan for rehabilitating the
company to be submitted to the court within 30 days. A representative
for Harvard Pilgrim said the irregularities were found as the company
prepared a bond deal.

Imperial Home Decor Group and Affiliates Seek Bankruptcy
Protection

The Imperial Home Decor Group Inc., Cleveland, said yesterday
that it and its U.S. affiliates filed petitions yesterday for chapter 11
in the District of Delaware, according to a newswire report. The
affiliates included in the filing are the Imperial Home Decor Group (US)
LLC, Vernon Plastics Inc., Imperial Home Decor Group Holdings LLC and
two additional non-operating subsidiaries, WDP Investments Inc. and
Marketing Services Inc. The company's Canadian operations were not
included in the filing. The company also announced that the bankruptcy
court has granted immediate approval to borrow up to $25 million of its
newly obtained, two-year debtor-in-possession credit facility with the
Chase Manhattan Bank for up to $75 million. A hearing to approve the use
of the balance of the funds is scheduled for Feb. 2. Imperial Home Decor
Group is a designer, manufacturer and distributor of residential
wallcoverings products.

The Custom Shop Seeks to Sell Assets

The Custom Shop (TCS) has signed an agreement subject to court
approval to sell substantially all of its assets as part of its chapter
11 filing in the District of Delaware, according to a newswire report.
Custom Shop Corp. and three affiliates filed chapter 11 on Monday. TCS
also filed a motion seeking approval of a $1.5 million
debtor-in-possession facility with Bell Street Funding LLC. The proposed
buyer is TCS.com Acquisition Corp. (TAC), a company created for the
purpose of purchasing and operating certain Custom Shop stores and the
Franklin, N.J., custom shirt production facility. TCS plans to request a
hearing on the sale in February. Founded in 1937, the Custom Shop
manufactures and sell shirts high-end custom-made shirts and suits at 60
stores in 21 states and Washington.

Court Throws Out SGL Filing Seeking Chapter 11 Protection

Finding that SGL Carbon Corp.'s chapter 11 filing was not made
in good faith as the company was trying to gain leverage in civil
antitrust litigation, the Third U.S. Circuit Court of Appeals in
Philadelphia has thrown out the bankruptcy filing, The Wall Street
Journal reported. The U.S. unit of SGL Carbon AG of Germany filed
for bankruptcy protection in Delaware in December 1998 and claimed that
the threat of being wiped out by civil antitrust litigation was enough
to justify protection from its creditors. The company, based in
Charlotte, N.C., had been hit with civil antitrust claims by steel
producers after the U.S. Department of Justice opened an investigation
of the German parent and whether it conspired to suppress and eliminate
competition in the graphite-electrodes industry in the mid-1990s. In
May, the German parent agreed to pay a $135 million fine and pled guilty
to conspiracy. Late last month the appeals court found that SGL could
not show the bankruptcy filing prevented any 'imminent harm.' Philip
Bentley, an attorney representing the creditors' committee, said the
ruling means that a company will have to show concrete harm from
litigation, like a bank refusing to lend it money, before a court will
allow a bankruptcy filing. Bentley also said that SGL was not the first
company to have its filing dismissed for this reason, but that it is the
largest. An attorney for SGL said it will not refile for bankruptcy
protection and has not decided whether to appeal the decision.

Law Professor Named to Lead Fed's Consumer
Council

Dwight Golann, a professor of law for Suffolk University in Boston,
was named chairman of the Federal Reserve Board's Consumer Advisory
Council, according to The Wall Street Journal. The council
advises the Fed on consumer financial-services issues, including the
Fed's responsibilities under the Consumer Credit Protection Act. The
council meets three times a year in Washington.

Ninth Circuit—U.S. Bankruptcy Judges for
Reappointment

Comments for the judge(s) should be submitted no later than January
31, 2000 to the following address: Office of the Circuit Executive, P.O.
Box 193939, San Francisco, CA 94119-3939, Attn: U.S. Bankruptcy Judge(s)
Reappointment; Fax: (415) 556-6179

Two Bankruptcy Judge Positions in S.D.N.Y. Open

The Second Circuit Judicial Council invites application from highly
qualified candidates for two bankruptcy judge positions for the Southern
District of New York. The people selected will maintain chambers in New
York City at Bowling Green. The selection process will be confidential
and competitive. Applicants will be considered without regard to race
color, age (over 40), gender, religion, ethnicity, national origin or
disability. The term of office is 14 years, and the current salary is
$129,996 per annum (effective January 1, 2000). Basic qualifications
include: 1) admission to practice before the highest court of at least
one state, the District of Columbia or the Commonwealth of Puerto Rico;
2) membership in good standing in every bar in which membership is held;
and 3) at least five years of legal practice experience. Application
forms may be obtained by calling, writing or faxing a request to: Office
of the Circuit Executive, U.S. Courthouse, 40 Foley Square, Room 2904,
New York, NY 10007. Phone: (212) 857-8700; Fax (212) 857-8680.
Application packages must be received no later than Jan. 14.

Visit
target='_parent'>http://www.abiworld.org/employment/listings.html
for other court position openings or to post a job
listing.

OpTel Creditor Panel Seeks To Retain Financial Adviser

OpTel Inc.'s (OTEL) official committee of unsecured creditors is seeking
to retain Houlihan Lokey Howard & Zuckin Capital as its financial
adviser. The financial firm would assist the committee in analyzing and
monitoring the company's business operations and financial condition;
update the assessment of the company's business plan; review filings
submitted to the bankruptcy court, including a chapter 11 plan and plan
disclosure statement; assess financing options; perform valuation
analyses; and provide other financial advisory services as needed.

Courtesy of
href='http://www.fedfil.com/bankruptcy/developments.htm'>The
Daily Bankruptcy Review Copyright ©
January 6, 2000..