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FTC Sues Toysmart.com
The Federal Trade Commission (FTC) yesterday filed a lawsuit against
Toysmart.com, accusing the bankrupt online toy-seller of breaking a
promise to customers that it would never share private information about
them, according to the Associated Press. In a complaint filed in
U.S. District Court in Boston, the FTC said Waltham-based Toysmart is
violating its own assurances appearing on its Web site that 'when you
register with Toysmart, you can rest assured that your information will
never be shared with a third party.' Toysmart, which is majority-owned
by Walt Disney Co., ceased operations in May and began soliciting bids
for its assets, including customer lists and profiles. Internet privacy
activists protested, claiming that if the sale of that information were
allowed, it could encourage a wave of other failing dot-coms to abandon
privacy assurances in return for cash.
Toysmart has solicited bids for client information, but FTC attorney
Ellen Finn said it was unclear whether Toysmart has already sold any.
The complaint seeks to block bankruptcy actions until the privacy
question is addressed. TRUSTe, a San Jose, Calif., company that has
given its seal of approval to more than 2,000 sites that have met its
criteria for safeguarding their customers' privacy, had certified
Toysmart's privacy guidelines. It was TRUSTe that first brought Toysmart
to the FTC's attention. The spokesman for TRUSTe, Dave Speer, said,
'Bottom lineit's unacceptable, ethically wrong, and potentially
illegal for a company to say one thing and do something different.'
Frederick's of Hollywood Files for Chapter 11
Lingerie maker Frederick's of Hollywood Inc. filed for chapter 11
yesterday, according to the Wall Street Journal. The 54-year-old
company said it has been unable to push up its earnings or expand
operations largely because of the lingering cost of its 1997 leveraged
buyout. The bankruptcy filing, along with new financing, will allow the
company to firm up its cash flow and move ahead with a planned makeover
designed to de-emphasize the more risqué side of its business.
Last month, Wilshire Capital LLC, a Los Angeles investment firm, bought
Frederick's. Previously, Chicago investment group Knightsbridge Capital
Corp privatized Frederick's. The company said it would continue
operating normally through the bankruptcy proceedings.
AutoInfo Receives Bankruptcy Court Approval for its First Amended
Disclosure Statement
AutoInfo Inc.yesterday announced that it received approval of its first
amended plan of reorganization, as amended, by order of the bankruptcy
court dated Thursday, according to a newswire report. The Stamford,
Conn.-based AutoInfo will proceed to solicit votes concerning its first
amended plan of reorganization, as amended. On June 22, AutoInfo
announced that it had entered into an agreement to acquire Sunteck
Transport Co. Inc., a full-service third-party transportation logistics
provider, and it's wholly owned subsidiary, Ubidfreight.com, in
exchange, upon closing, for 10 million shares of reorganized AutoInfo's
common stock. Sunteck's holdings will constitute approximately 37
percent of the outstanding common stock of reorganized AutoInfo.
Liz Claiborne to Acquire Monet Group
Liz Claiborne Inc. yesterday announced that it received bankruptcy court
approval on Friday to acquire the majority of the assets of Monet Group
Inc. for a total purchase price of approximately $39.5 million,
including the value of debt assumed, according to a newswire report.
Monet filed for bankruptcy on May 11. New York-based Liz Claiborne
designs and markets women's and men's apparel and accessories; Monet is
a leading designer and marketer of branded fashion jewelry sold through
department stores. It is expected to profitably generate annual sales of
approximately $75 million this year. Consummation of the transaction is
subject to review under the provisions of the Hart-Scott-Rodino Act and
other customary closing conditions and is expected to close late this
month.
Tri Valley Growers to Restructure Through Chapter 11
Tri Valley Growers, one of the nation's largest canned fruit and tomato
processors, yesterday announced that in order to facilitate a
restructuring of the company, it has filed chapter 11, according to a
newswire report. The San Ramon, Calif.-based company filed its petitions
in the U.S. Bankruptcy Court for the Northern District of California in
Oakland. Tri Valley Growers announced it obtained a commitment for
approximately $270 million in debtor-in-possession (DIP) financing from
a group of financial institutions led by Bank of America Business Credit
to fund the company's operations during its voluntary restructuring
under chapter 11. The DIP financing, which is subject to court approval,
will provide funds for post-petition supplier and employee obligations,
as well as the company's ongoing operating needs during the
restructuring process.
Tri Valley President and Chief Executive Officer Jeffrey P. Shaw said
that Tri Valley Growers' financial performance has been impacted during
the past two years by the effects of unfavorable long-term contracts,
industry-wide oversupply of tomatoes and plants running under capacity,
which collectively stranded the company's attempts to achieve
profitability. Tri Valley Growers produces or markets approximately half
of the nation's canned peaches and apricots. The company also processes
and markets a sizable amount of the canned tomatoes. While it completes
restructuring, the company's food processing and canning operations,
warehousing, shipping and distribution system, transportation network,
consignment centers, equipment leasing and corporate offices will
operate as usual.
Jenna Lane Files Chapter 11
Jenna Lane Inc. announced today that in response to an involuntary
chapter 7 petition filed on June 30 against the New York-based company,
it has consented to the conversion of the proceeding to one under
chapter 11, according to a newswire report. HSBC Business Credit (USA)
Inc., Jenna Lane's pre-petition factor, has agreed to finance operations
during the pendency of its chapter 11 case.
TBS Shipping Noteholders Get New Stock, Warrants Under
Restructuring
TBS Shipping International Ltd.'s noteholders will receive new notes,
stock and warrants in exchange for their claims against the shipping
concern. The details of the company's financial restructuring are in a
proposed disclosure statement filed Thursday with the company's chapter
11 bankruptcy
petition in the U.S. Bankruptcy Court in Manhattan. In addition to
exchanging their $110 million in claims into $50 million in new notes,
company noteholders will receive new preferred shares, Class C common
shares and warrants to purchase additional common shares.
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