March 27, 2000
Network Connection Files Chapter 11
Broadband entertainment, information and e-commerce systems
developer Network Connection Inc. yesterday announced that it filed for
chapter 11 protection in the U.S. Bankruptcy Court for the Eastern
District of Pennsylvania, according to Dow Jones. The Philadelphia-based
company said that it would continue to maintain its assets, operate its
businesses and manage its affairs as a debtor-in-possession. Earlier
this month, the developer of electronic-commerce systems said it would
discontinue and suspend domestic operations and focus on its U.K.
businesses.
Homes.com Files for Bankruptcy
Homes.com filed for bankruptcy on Friday, just one week after cutting
its workforce by 40 percent, according to EcommerceTimes.com. The
company’s attorney, David Caplan, said that the filing stems from
a legal dispute over a lease at a Florida facility that houses
Homes.com's Internet servers. He also said that the company is expected
to remain open and fully operational during bankruptcy proceedings. The
bankruptcy filing came almost a year to the day after the Menlo Park,
Calif.-based Homes.com acquired $38.5 million in funding from some of
the best-known venture capitalists in Silicon Valley, including Hummer
Winblad Venture Partners, Kinetics Ventures and Lighthouse Capital.
Sears Buys Former Wards Stores, Auto Centers
No. 2 U.S. retailer Sears, Roebuck and Co. yesterday announced that it
purchased 18 former department stores and 10 auto centers from
Montgomery Ward, according to Reuters. Terms of the sale were not
disclosed. The auto centers will be converted into Sears Auto Centers.
The department store chain plans to remodel and then reopen the
department stores by next spring. Sears said that it could potentially
service about 2.4 million former Montgomery Ward service contract
customers under an agreement with Aon Innovative Solutions Inc. The
company also said that it would acquire some assets of Ward’s
national repair business, A&E Signature Service. Montgomery Ward
filed for chapter 11 bankruptcy protection in December.
Substance Abuse and Rehabilitation Firm Emerges from
Bankruptcy
A Mclean, Va.-based nonprofit substance and alcohol abuse and mental
rehabilitation firm yesterday announced that it emerged from its chapter
11 reorganization on March 21, 2001, according to a press release.
'We're quite pleased to have helped the organization to get back on its
feet,' said attorney Alexander M. Laughlin of Gold Morrison &
Laughlin PC. The nonprofit company, which was unnamed, filed for chapter
11 protection when its charitable contributions dropped drastically.
Additional pressures brought on by the revised competitive bidding
processes on federal contracts also contributed to the firm’s
financial distress prior to the bankruptcy filing.
Scholastic Declines to Bid for eToys
After completing its evaluation of the possible discount purchase of
selected assets of bankrupt eToys yesterday, Scholastic announced that
it did not submit a bid for any eToys assets and will not be purchasing
eToys inventory, according to a company press release. The company
concluded that the acquisition of selected eToys assets did not meet
Scholastic's threshold for accelerating or reducing the costs of its web
initiatives. Scholastic is the world's largest publisher and distributor
of children's books.
Bondholders Seek To Convert Flooring America Chapter 11 To Chapter
7
Bondholders of Flooring America Inc. yesterday announced that they want
to convert the company's chapter 11 reorganization case to a chapter 7
liquidation, according to Dow Jones. The U.S. Bankruptcy Court in
Atlanta is scheduled to consider the request at a hearing tomorrow.
State Street Bank & Trust Co., which represents the bondholders,
said in a request that if the case is allowed to maintain under chapter
11, the Kennesaw, Ga.-based Flooring America would continue to incur
administrative expenses. Flooring America has already liquidated its
operating assets, including its retail stores and franchise operations,
and its real estate holdings. The company now has miscellaneous real
estate holdings and accounts receivable remaining. Flooring America,
which distributed floor covering, and 22 affiliates filed for chapter 11
on June 15, 2000, listing total assets of $342.5 million and debts of
$252.2 million.
PG&E Says Banks Agree to Extend Forbearance Until April
13
PG&E Corp. said the banks that provided the struggling California
utility with $1 billion in credit have agreed to extend a forbearance
agreement until April 13, according to Dow Jones. The lenders had
previously agreed to hold back on the facility until March 6. PG&E
also said that it may take an after-tax charge of up to $4.1 billion for
the fourth quarter and the year ended Dec. 31. The size of the charge,
if one is taken at all, will depend on if the utility can recover some
or all of its power costs through the regulatory process. PG&E and
Southern California Edison (SoCal Edison), have warned of possible
bankruptcy due to $13 billion in debts from high wholesale power costs
that the two firms can't pass on to customers under terms of
California's flawed deregulation plan.
AVTEAM Inc. Files for Chapter 11 Protection
AVTEAM Inc. announced today that it, along with its two wholly-owned
subsidiaries, AVTEAM Engine Repair Corp. and AVTEAM Aviation Field
Services Inc., have filed petitions for chapter 11 protection with the
U.S. Bankruptcy Court for the Southern District of Florida in Miami-Dade
County, according to a press release.
The global supplier of aftermarket engines, engine parts and aircraft
components also announced that it has entered into a cash collateral and
financing arrangement with Bank of America N.A. for an interim period of
45 days. The agreement stipulates that Bank of America will permit the
AVTEAM to utilize all rents, revenues, income and profits derived from
its property under the same terms and conditions as reflected in certain
credit documents entered into between the company and Bank of America.
The cash collateral and financing arrangement is subject to U.S.
Bankruptcy Court approval.
United Artists Raised by S&P After Bankruptcy
Emergence
United Artists Theater Co.’s ratings were raised to 'B-minus' from
'D' by Standard & Poor's, following the company's emergence this
month from bankruptcy reorganization, according to Reuters. S&P
assigned the 'B-minus' rating, with a stable outlook, to the corporate
credit and restructured $252 million credit line of United Artists, the
Denver-based No. 6 U.S. movie theater operator with 1,604 screens at 216
theaters. United Artists emerged from bankruptcy on March 2, with
Denver-based billionaire Philip Anschutz getting a reported 60 percent
of the equity. According to Reuters, S&P said 'the ratings reflect
the company's still aggressive–although significantly
improved–financial profile, its improved theater circuit, and the
enhanced flexibility resulting from reduced mandatory lease terms and
monthly lease payments on certain properties.'
Owens Corning Told to Move Forward with Tobacco Case
A bankruptcy court on Monday told bankrupt building materials-maker
Owens Corning to go ahead with its lawsuit against the tobacco
companies, despite opposition from the tobacco industry, according to
Reuters. The Toledo, Ohio-based maker of Pink Panther Fiberglas
insulation, which filed for chapter 11 in October after a slew of costly
asbestos-related liability claims, had sued tobacco companies like R.J.
Reynolds Tobacco Holdings Inc., alleging many asbestos injuries were due
to smoking, not asbestos exposure. A successful settlement in the case
against the tobacco industry potentially could bring Owens Corning a
bundle of money it needs to repay its creditors.
Judge Judith Fitzgerald told a bankruptcy court in Wilmington, Del.,
on Monday that Owens Corning could press ahead with its lawsuit, using
its current pool of lawyers–although it must draft new motions for
a joint prosecution agreement and hire Mississippi-based law firm
Forman, Perry, Watkins, Krutz & Tardy as special counsel in the
case. The joint prosecution agreement is among nine law firms, including
Forman Perry, that are assisting Owens Corning in the tobacco
litigation, reported Reuters.
Frank's Nursery & Crafts Has Final OK For $100 Million DIP
Loan
Frank's Nursery & Crafts Inc. won final court authorization to enter
a $100 million debtor-in-possession (DIP) financing agreement with a
group of banks led by Wells Fargo Retail Finance LLC. Although three
objections to the DIP financing were filed, they were all resolved or
overruled by the U.S. Bankruptcy Court in Baltimore. Responding to
objections raised by the newly formed creditors' committee, Wells Fargo
agreed to amend certain provisions of the loan agreement, including
deleting seven parcels of real estate from the list of 'core properties'
and clarifying the company's right to borrow under the so-called special
real estate line provision of the agreement.
Courtesy of
href='http://www.fedfil.com/bankruptcy/developments.htm'>The Daily
Bankruptcy Review Copyright
© March 27, 2001
Thanks for visiting Today's Bankruptcy Headlines. New articles
are posted here each business day.