October 182000

Lawyer

Pleads

Guilty

to

Bankruptcy

Fraud

A

Saugus,

Mass.,

lawyer

pled

guilty

to

two

counts

of

bankruptcy

fraud

for

concealing

about

$140,00

from

his

bankruptcy

creditors

and

making

a

false

statement

concerning

his

income,

according

to

the

U.S.

Department

of

Justice.

Sheldon

Newman

pled

guilty

on

Friday

to

two

counts

of

bankruptcy

fraud

for

concealing

assets

and

making

a

false

statement

concerning

his

assets

in

his

bankruptcy

pleadings.

In

1996,

Newman

had

received

a

substantial

civil

judgment

against

him,

and

the

person

who

sued

him

sought

Newman’s

assets.

In

June

of

that

year,

a

state

superior

court

judge

issued

an

order

joining

Newman

from

disposing

of

accounts

receivables

or

other

funds

received

arising

from

his

practice.

He

contacted

a

client

and

asked

for

a

$165,000

payment

for

past

legal

services

in

the

form

of

four

checks.

He

then

filed

chapter

7

in

Boston

on

Oct.

4,

1996.

He

also

filed

schedules

of

his

assets

and

debts,

but

failed

to

list

as

an

asset

his

client’s

three

remaining

checks,

totaling

$135,000.

He

is

scheduled

for

sentencing

on

Jan.

24,

2001,

and

faces

five

years

in

prison,

a

$250,000

fine

restitution

and

three

years

of

supervised

releases

on

each

of

the

two

counts

charged.

Retailer

Paul

Harris

Files

for

Bankruptcy

Women's

specialty

retailer

Paul

Harris

Stores

Inc.,

plagued

by

liquidity

problems

and

slower-than-expected

sales,

yesterday

said

it

had

filed

for

bankruptcy

in

the

U.S.

Bankruptcy

Court

for

the

Southern

District

of

Indiana 

and

had

arranged

to

sell

most

of

the

assets

of

its

J.

Peterman

Co.

catalog

unit,

according

to

Reuters.

Three

of

the

company's

wholly

owned

subsidiaries,

Paul

Harris

Retailing

Inc.,

Paul

Harris

Merchandising

Inc.

and

Paul

Harris

Distributing

Inc.,

also

filed

chapter

11.

J.

Peterman,

best

known

for

its

quirky

catalog

that

featured

hand

drawn

pictures

and

lengthy

descriptions

of

its

merchandise,

was

purchased

by

Paul

Harris

in

1999

for

$10

million,

but

had

filed

for

bankruptcy

before

the

acquisition.

Paul

Harris

said

the

sale

of

J.

Peterman

will

yield

an

immediate

cash

infusion

of

$4.3

million,

and

LaSalle

Bank

National

Association,

a

unit

of

ABN

AMRO

Holding

NV

(AAH.AS),

will

provide

up

to

$45

million

of

debtor-in-possession

financing.

Kitty

Hawk

Receives

Court

Approval

of

Disclosure

Statement

Kitty

Hawk

Inc.

announced

yesterday

that

the

bankruptcy

court

presiding

in

its

chapter

11

case

approved

its

disclosure

statement,

according

to

a

newswire

report.

Creditors

should

be

receiving

the

statement

and

other

materials

this

week.

"Since

filing

for

chapter

11

relief

this

past

May,

the

company

has

refocused

on

its

core

businesses

of

scheduled

overnight

freight

service

and

its

Boeing

727

air

freight

charter

contracts,

including

its

U.

S.

Postal

Service

and

BAX

Global

contracts,"

said

Tilmon

J.

Reeves,

president

and

chief

executive

officer.

"These

will

be

the

centerpieces

of

the

company's

business

as

it

exits

from

chapter

11."

Kitty

Hawk's

reorganization

plan

provides

for

payment

in

full

of

its

bank

creditors

and

distribution

of

all

of

the

stock

of

the

reorganized

company

to

Kitty

Hawk's

unsecured

creditors

and

cancellation

of

all

of

the

company's

stock

issued

prior

to

the

chapter

11

filing.

Kitty

Hawk,

based

in

Dallas,

expects

confirmation

of

its

plan

in

mid-December

and

to

implement

its

plan

effective

Jan.

1,

2001.

Icahn

to

Make

New

Bid

for

the

Claridge

A

casino

company

controlled

by

financier

Carl

Icahn

will

revise

its

bid

for

the

bankrupt

Claridge

hotel

in

Atlantic

City,

N.J.,

countering

front-runner

Park

Place

Entertainment

Corp.,

whose

offer

is

being

weighed

by

Claridge

management,

according

to

Reuters.

Icahn-controlled

GB

Holdings

Inc.,

owner

of

the

Sands

Atlantic

City

casino,

will

submit

its

new

offer

before

the

Nov.

13

deadline.

GB

Holdings

previously

made

a

bid

that

it

valued

at

about

$105

million—most

of

that

in

stock—compared

with

an

all-cash

bid

valued

at

$81

million

by

Park

Place.

Claridge

management

received

four

offers

for

the

bankrupt

hotel

last

week

but

chose

to

pursue

the

Park

Place

offer

because

it

was

all

in

cash.