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Amendment Offers Possible Assistance for Seed Growers
At least one bankruptcy-related amendment was attached to the recent
crop insurance conference report. The $15-plus billion farm bill
included a $35 million government loan program for grass and alfalfa
seed growers, who are the largest group of creditors in the AgriBioTech
chapter 11 proceeding, currently pending before Bankruptcy Judge
Linda B. Riegle in the District of Nevada in Las Vegas. The
unprecedented amendment, which will likely be signed by President
Clinton, provides an interest-free 'bridge' loan to growers for 65
percent of their claims against AgriBioTech related to the 1999 grass
and alfalfa seed crop. The language for the amendment (H.R. 2559
§253) was crafted by the growers' attorney, ABI Immediate
Past-president Ford Elsaesser, and the Senate staffers for
Congresswoman Helen Chenowath-Hage (R-Idaho), Senator Larry Craig
(R-Idaho) and Senator Patty Murray (D-Wash.), with substantial
assistance from William Brandt and Mark Thomann of
Development Specialists Inc., which is running AgriBioTech pursuant to
the court order. Assistance was also provided by senior staff of
Secretary of Agriculture Dan Glockman. 'This was a unique bipartisan
effort, with help and support across the entire political spectrum,'
said Elsaesser. 'It's also a warning bell for growers of specialty crops
throughout the country about the political damage an agribusiness
bankruptcy can do.'
Anti Cyber-squatting Laws Flex Muscle as Bankruptcy Tool
Many companies in Connecticut are becoming litigants to use the federal
1999 Anticybersquatting Consumer Protection Act, The Connecticut Law
Tribune reported. Prior to this act, many Internet and
cyber-companies were opting to file bankruptcy, but under the act,
plaintiffs are not entitled to monetary damages unless the infringed
registered its domain name after November 1999. However, plaintiffs can
win the equitable remedy of having the name transferred to its rightful
owner. Read the full text of the article
HREF='http://www.law.com/cgi-bin/gx.cgi/AppLogic+FTContentServer?pagename=law…'
TARGET='window2'>here.
Stage Stores Files for Chapter 11
Stage Stores Inc., Houston, announced it filed for chapter 11 yesterday,
according to a newswire report. The company is in final negotiations for
a three-year, $450 million debtor-in-possession (DIP) credit facility
with Citicorp USA Inc. as an agent, subject to documentation and
bankruptcy court approval. In conjunction with the chapter 11 filing,
the company's stock will be subject to delisting from the NYSE. 'While
this course of action is very strong medicine for our company, filing
bankruptcy can have definite positive aspects for our customers,
employees and vendors,' said Jack Wisner, chairman, interim chief
executive officer and president of Stage Stores. The company will close
some of its more than 600 stores, offering job opportunities to
employees whose stores are closing. 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.
Bankrupt Michael Pete Gets Higher Bids
The unsecured creditors' committee of Michael Petroleum Corp. recently
received two bids for the company, according to a Dow Jones newswire.
Carrizo Oil & Gas Inc. offered $120 million, and Energen Resources Corp.
offered $110 million. The bids top the $104 million stalking horse bid
made by EnCap Energy Advisors LLC and El Paso Energy Corp., in which all
other bids must exceed to be acceptable. In a contested hearing
Wednesday, Michael Petroleum reaffirmed its support of the EnCap/El Paso
offer and tried to have the disclosure statement related to its
reorganization plan approved. Bankruptcy Judge Wesley W. Steen
(S.D. Texas) previously approved a $1 million breakup fee in connection
with the EnCap/El Paso stalking horse offer. At a June 12 hearing, Judge
Steen will consider approval of a motion establishing further bidding
procedures.
Court Converts Discovery Zone Bankruptcy to Chapter 7
The Discovery Zone Inc.'s chapter 11 bankruptcy case has been converted
to a chapter 7 liquidation, according to a newswire report. The case was
the company's second attempt to reorganize under chapter 11. Chief Judge
Farnan Jr. of the U.S. District Court in Wilmington, Del., stated, 'for
some time, most of the parties involved in this effort at reorganization
have realized that: (1) no workable plan could be created; (2) much of
the case's activity has been under the nature of a liquation; and (3)
this case should have been converted to a chapter 7 sooner.' The company
used chapter 11 to liquate and organize estate assets primarily for the
benefit of secured creditors. The trustee believes that the company was
unable to pay certain priority claims that generally must be paid before
chapter 11 can be confirmed. The children's indoor entertainment
company's case was based on arguments made at a hearing last month.
Cargo Furniture Reaches Out to This End Up
Cargo Furniture Inc. announced yesterday it will offer a 10 percent
discount to former This End Up retail customers who have already placed
a deposit with the now-bankrupt retailer, according to a newswire
report. This End Up filed for bankruptcy and has not announced plans to
liquidate the company. Fort Worth, Texas-based Cargo Furniture will
offer the discount through Aug. 31. 'We believe helping these retail
customers is the right thing to do as they face the real possibility of
lost deposits or orders going unfilled,' said Lisa Thornton, president
of Cargo.
AMEX To Delist Gencor
Industries Common Stock Thursday
The American Stock Exchange informed Gencor Industries Inc. (GX) on May
23 that the company's stock would be removed from the exchange's listing
Thursday, according to a Form 8-K filed Wednesday with the Securities
and Exchange Commission. The exchange made its decision after Gencor
failed to
complete an ongoing worldwide re-audit by May 9 so as to allow the
company to complete all SEC filing requirements. Gencor said in the
filing that it believes the re-audit 'is progressing well' considering
that the re-audit covers the company's operations for the 1998 and 1999
fiscal years.
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