March 29, 2000
Greate Bay Casino Reports Year-end Results
in Wake of Bankruptcies
Greate Bay Casino Corp., Egg Harbor Township, N.J., yesterday
reported a net loss of $3.1 million, or $0.59 per share, for the fourth
quarter of 1999 compared to a net loss of $825,000, or $0.16 per share
for the fourth quarter of 1998, according to a newswire report. The
company's net income for 1999 includes a gain of $85.6 million resulting
from the elimination of its equity in Pratt Casino Corp. and its
subsidiaries, which filed chapter 11 in May. The company's reported 1998
net income includes a gain of $27.5 million resulting from the
elimination of the its investment in its primary subsidiary, Greate Bay
Hotel and Casino Inc. (GBHC), which owns the Sands Hotel & Casino in
Atlantic City, N.J. GBHC filed for chapter 11 in January 1998. Under the
terms of a pre-negotiated plan of reorganization, consummated in
October, ownership and operating control of these entities by Greate Bay
was terminated. Greate Bay's remaining operations consist primarily of
Advanced Casino Systems Corp. (ACSC), a computer software company that
licenses casino information technology systems to the Sands and to
Hollywood Casino Corp., as well as to nonaffiliated casino
companies.
Court Approves United Systems Technology's
Purchase of Certain CPS Systems Assets
United Systems Technology Inc. (USTI), Dallas, announced yesterday
that the U.S. Bankruptcy Court for the Northern District of Texas
approved its bid for the purchase of certain assets of CPS Systems Inc.
at a bankruptcy auction held on March 24th, according to a
newswire report. USTI, which develops, markets and supports application
software for local governments and rural water districts, successfully
bid $200,000 in cash for the CPS City Fund Accounting and Utility
Billing source code, software support and licensing agreements for
approximately 60 customers located in Texas and Oklahoma. The assets
purchased also included the accounts receivable related to these
customers as well as substantially all of the fixed assets of CPS in its
Dallas office. USTI expects to close the transaction by the end of the
March.
DaimlerChrysler Buys Stake in Mitsubishi
Mitsubishi Motors, hurt by plunging sales and profits, announced
Monday that DaimlerChrysler AG will buy a controlling 34 percent stake
in Mitsubishi in a $2 billion deal, leaving Toyota Motor Corp. and Honda
Motor Co. as the lone independents among Japan's top five automakers,
The Associated Press reported. In the previous decade, Americans,
snapping up Toyota Corollas and Nissan Maximas, helped to push Ford
Motor Co. and the former Chrysler Corp. to the edge of bankruptcy.
However, thanks to booming U.S. and European economies in the 1990s and
a debilitating economic slump in Asia, Japan's automakers are struggling
for survival. 'It's good for Mitsubishi. At least they can survive,'
said Jeremy Tonkin, an auto analyst at Towa Securities Co. in Tokyo.
'These deals would have been unheard of five or 10 years ago,' he added.
The Mitsubishi-DaimlerChrysler alliance will create the world's
third-largest automaker, with annual production of 6.5 million vehicles,
ahead of Toyota's 5.19 million vehicles.
Russian Economy Stirring, But Economists
Still Cite Problems
In the wake of soaring oil prices, which have swelled budget
coffers, and foreign currency reserves, currently higher than at any
time since the 1998 ruble devaluation, Russia's economy is beginning to
improve, The Washington Post reported. However, foreign investors
and many Russian economists say that in spite of the momentary optimism,
Russia's economy has not yet resolved many structural problems,
including an unreformed banking system, long-deferred tax reform, the
continuing hemorrhage of capital abroad, and a failure to establish the
rule of law, including an effective bankruptcy statute and protection
for the rights of investors and property owners. In addition, the
economy remains fraught by widespread corruption. 'Without an economy,
Russia is a huge auto chassis without a motor,' said Eric Kraus, chief
strategist of Nikoil Capital Markets, a brokerage house. 'They have got
to re-establish a functioning motor. And you can't have an economy
function when everything gets stolen and pumped offshore and the assets
are systematically stripped.' A boom in the price of oil, Russia's chief
export, has eased many of the government's chronic budget woes, and a
recent deal on restructuring $32 billion in Soviet-era debt is the first
step toward Russia's return to global capital markets. According to a
recent World Bank study, the crisis stemming from chaos in the country's
payments process was a key factor in undermining Russia's economy in the
1990s. 'The overwhelming priority at this point is to dismantle this
system,' the study said, a move that could lead to growth and
restructuring of many troubled enterprises.
Online Music Retailer Could Face
Bankruptcy
CDnow Inc., a Fort Washington, Pa., online music retailer, faces
'substantial doubt about its ability to continue as a going concern,'
warned Arthur Andersen LLP, the company's auditors, according to The
Wall Street Journal. Arthur Andersen cited the company's recurring
losses from operations, its 'working capital deficiency' and
'significant payments' due this year on marketing agreements. CDnow said
it has enough cash to meet its payment obligations until Sept. 30, but
said it is 'actively seeking' financing or a merging partner.
New EOUST Director Appointed
Kevyn D. Orr, formerly acting director of the Executive Office for
U.S. Trustees (EOUST), has been appointed director, U.S. Attorney
General Janet Reno announced Monday. Orr had served as acting director
upon former EOUST Director Joseph 'Jerry' Patchan's retirement on Feb.
12. 'I am deeply honored to serve as director of an office dedicated to
guarding the integrity of the bankruptcy system and to ensuring that the
rights of all parties to bankruptcy cases are protected,' said Orr. Orr
said he plans to ensure that the U.S. Trustee Program (USTP) is prepared
to implement pending bankruptcy reform legislation, continue
administering the bankruptcy system with declining resources, and
preserve and protect the integrity of the bankruptcy system, including
increasing the efficiency of payment to creditors. Previously, Orr
served as deputy director of the EOUST from June 1995 to February
2000.
Semi-Tech and Bank of New York Settle
Dispute Over Singer Shares
Semi-Tech Corp. is seeking bankruptcy court approval of an agreement
that would allow the Bank of New York, as indenture trustee for the
company's secured notes, to foreclose upon and assume ownership of the
company's 49.6% interest in Singer Co. The agreement, if approved by the
court, would resolve disputes that have been going on since last summer
between Semi-Tech, the bank and certain holders of the company's senior
discount notes due 2003. The disputes relate to the bank's and
noteholders' rights to take control of about 25 million common shares in
Singer that are owned by Semi-Tech's indirectly wholly-owned bankrupt
subsidiary Graeme Ltd.
Courtesy of
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