Action on Bankruptcy Overhaul a ‘Matter of Timing’
The November lame-duck congressional session came and went with no
Senate vote on the bankruptcy overhaul bill. The next opportunity
for consideration of the bankruptcy bill is when Congress returns Dec. 5
to complete work on outstanding appropriations bills, according to the
CQ Daily Monitor. Senate Majority Leader Trent Lott
(R-Miss.) promised that the measure would be the last piece of business
of the 106th Congress, but with no end in sight, Lott’s
communications director Susan Irby said of the vote, “That’s
just a matter of timing.” To consider the bill, the Senate
has to assemble the 60 votes needed to stop a filibuster by its
Democratic opponents. Although Sen. Charles Grassley (R-Iowa) said
there is enough support to end the filibuster, he noted that getting
members back for the lame-duck session could pose a problem. The
Senate fell seven votes short of attaining cloture on Nov. 16 because 16
senators were absent.
With the presidency still uncertain, industry members are wondering
if the chances of a stronger overhaul could improve under a George W.
Bush administration. Some have speculated that if Bush emerges as
the winner, President Clinton may be more inclined to sign the current
bill in an attempt to stave off a tougher version that could emerge from
a GOP White House. White House Chief of Staff John Podesta has
warned that it could be vetoed, but noted that there is the possibility
of Clinton overlooking White House criticisms.
Loewen Files Plan to Emerge From Bankruptcy
Funeral home operator Loewen Group announced yesterday that it has filed
a reorganization plan with the U.S. Bankruptcy Court in Delaware to
emerge from bankruptcy, according to a Reuters report. Loewen
filed the plan 18 months after it collapsed under $2 billion in debt and
was forced to seek protection from creditors in both the United States
and Canada. The plan to pay creditors with common stock in a
“new Loewen,” plus cash and new debt securities, will
require court and creditor approval. The company said it expects
some creditors to fight the plan.
Loewen, North America's second largest funeral home and cemetery
firm, owns and operates more than 1,100 funeral homes and more than 400
cemeteries in the United States, Canada and Britain.
Pillowtex Files Chapter 11
Pillowtex Corp. yesterday announced that it filed a chapter 11
petition in the U.S. Bankruptcy Court in Delaware, according to the
Associated Press. Pillowtex, which makes towels and pillows under
the Royal Velvet, Fieldcrest and Cannon brands, said last week it was in
default on $650 million in secured credit and was considering
bankruptcy. Pillowtex said it has received a commitment for $150
million in debtor-in-possession (DIP) financing from lenders led by Bank
of America to continue daily operations. The Dallas-based company
said it will continue paying and providing benefits to employees and
will honor existing customer-related practices.
SystemOne Technologies Announces Major Deal With Safety-Kleen
SystemOne Technologies Inc., formerly Mansur Industries Inc.,
yesterday announced that it has signed a major marketing and
distribution agreement with industry leader Safety-Kleen, according to a
newswire report. Under the agreement, Safety-Kleen will be
appointed the exclusive distributor of SystemOne washer equipment parts
in the United States, Puerto Rico, Canada and Mexico. SystemOne, based
in Miami, will retain the right to distribute its equipment outside of
these markets as well as retain the right, subject to a right of first
offer for Safety-Kleen, to market newly developed industrial and
commercial washers through other distribution channels. The
marketing agreement is expected to become effective by the end of the
fourth quarter, subject to approval of the U.S. Bankruptcy Court that is
administering Safety-Kleen's chapter 11 bankruptcy proceeding.
SystemOne Technologies designs, manufactures, sells
and supports a full range of self-contained, recycling industrial parts
washing products for use in the automotive, aviation, marine and general
industrial markets.
ICG Files for Chapter 11
ICG Communications Inc., a company that sells telephone and Internet
services to businesses, announced yesterday that it has filed for
chapter 11 bankruptcy in the U.S. Bankruptcy Court in Delaware,
according to a Reuters report. The Englewood, Colo.-based ICG said
it had secured a commitment for up to $350 million of new financing from
Chase Manhattan Bank. While $200,000 in financing is available
immediately, the remaining $150 million will be available when a number
of conditions are met. ICG has about $160 million in cash on
hand.
Massachusetts-Based Nursing Home Company Files for
Bankruptcy
Nursing home magnate Abe Gosman's CareMatrix Corp. was placed on life
support Friday, filing for chapter 11 bankruptcy protection in the U.S.
Bankruptcy Court in Delaware, according to the Boston
Globe. CareMatrix said that it intends to 'continue normal
business operations' at its properties while developing a reorganization
plan. The Boston-based company’s properties include 47
nursing homes, assisted living centers, and Alzheimer's care facilities
that it owned, leased, or managed at the end of last year. The
bankruptcy petition also reported assets of $228.6 million and
liabilities of $119 million, and estimated that the company has between
16 and 49 creditors. State Street Bank & Trust Co., the
trustee for CareMatrix's outstanding bonds, was listed as one of the
largest creditors.
Scour To Voluntarily Shut Down File-Sharing Exchange
Scour Inc., the world's leading Internet search destination for
digital entertainment, announced yesterday that it will voluntarily shut
down the Scour Exchange community within 48 hours to facilitate a
resolution of pending litigation and a sale of its assets in the U.S.
Bankruptcy Court, according to a newswire report. The announcement
came after the U.S. Bankruptcy Court approved the company's motion to
disable the file-sharing application.
Listen.com, a San Francisco-based company that integrates and
distributes online music products and services across a network of
sites, offered on Nov. 1 to purchase Scour for $5 million and 527,918
shares of Listen.com stock.
Scour's board and management have supported the Listen.com
proposal. Yesterday, CenterSpan Communications Corp., a Hillsboro,
Oregon-based developer and marketer of Internet software applications
for communication and collaborative information sharing, announced its
intent to submit a bid for Scour's assets.
Theater Chain Announces Third Quarter Losses
Regal Cinemas reported a $113.3 million loss for the third quarter
and revealed that it is in default of certain loan covenants. The
loss is compared with a $5.6 million profit a year ago. The
private theater chain — the nation's biggest with 4,500 screens
— said its current assets of $2.11 billion are exceeded by $2.17
billion in liabilities. That puts the Knoxville, Tenn.-based movie chain
in default of some loan terms. They further revealed that while
the company can make it through the end of the year, there's no
certainty it will be able to keep operating for another 12 months.
Analysts, who've been waiting for signs that Regal will join several
other exhibitors in bankruptcy court, said the latest announcement only
heightens concerns.
Like other exhibitors — including Carmike Cinemas and United
Theaters, who have already filed for chapter 11 proceedings —
Regal's debt woes involve cost hangovers from a recent
multiplex-building binge. The company indicated in a regulatory filing
accompanying its third-quarter financial results that its continued
expansion efforts in select markets are severely threatened its current
financial situation.
Bank of New York Expects Its Non-performing
Assets to Rise In Fourth Quarter
The Bank of New York Co. Inc. yesterday said that it expects its problem
loans to rise in the fourth quarter, after a company it lent money to
filed for bankruptcy in October, according to a Reuters report.
The New York-based banking company, the parent of one of the oldest
commercial banks in the country, said in a regulatory filing that it had
a $59-million exposure to a customer who filed for bankruptcy to protect
against asbestos claims. As a result, the bank said it expects its
non-performing assets, or loans with potential repayment problems, to
rise in the fourth quarter, compared with the third quarter.
The bank was among more than a dozen top participants in a June 1997
five-year revolving loan worth $2 billion to building-materials maker
Owens Corning Corp., according to Loan Pricing Corp. Owens Corning
filed for reorganization under chapter 11 on Oct. 5.
Confusion Continues as Wireless Auction Approaches
Dozens of wireless carriers will bid on airwave licenses worth tens
of billions of dollars in a government-run auction next month unless
politics or the courts get in the way. The Federal Communications
Commission (FCC) could announce as soon as Friday which companies have
been approved to bid in the Dec. 12 auction. The U.S. Court of
Appeals for the District of Columbia Circuit Court refused a stay
request Monday by NextWave Telecom, a troubled wireless network provider
that forfeited nearly 100 licenses when it filed for bankruptcy
protection. That followed an October decision by the U.S. Supreme Court
that cleared the way for the auctions.
Some lawmakers are looking to postpone the auction, and the D.C.
appeals court has yet to rule on the legality of the FCC's seizure of
NextWave's licenses, meaning auction winners of those licenses may have
to give them back. Potential bidders aren't entirely confident the
auction will occur as scheduled, nor are they sure they'll even get to
keep the airwave licenses they purchase. The FCC's Wireless Bureau
is reviewing applications filed last week, and any company approved to
bid on the NextWave licenses or any of the 400 participation in the
auction would have to make a significant down payment by Nov. 27.
Redford's Sundance Halts Art House Cinema Project
The three-year-old joint venture between General Cinemas and Robert
Redford’s Sundance organization to build art house theaters
throughout North America is as good as dead, according to a newswire
report. General Cinemas is owned by GC Cos. Inc., which filed for
chapter 11 bankruptcy in October. GC's filing proved to be the
final writing on the wall for the joint venture, as the Chestnut Hill,
Mass.-based exhibitor was to provide most of the funding for Sundance
Cinemas projects. That became impossible when it entered the
court-supervised reorganization and halted all of the company's
construction projects.
What may survive are a pair of solo proposals by Sundance to open
specialty theaters without its joint venture partner in two West Coast
sites — one at the historic Aero theater in Santa Monica, Calif.,
and another in San Francisco's landmark Presidio district. A
search is under way to find funding for the Aero and Presidio
projects.
Meanwhile, the death of the Sundance Cinemas joint venture —
although representatives declined to confirm anything — means two
high-profile theater projects in Philadelphia and Portland, Ore., will
go belly up. Efforts have failed to find alternative ways to fund the
projects. The half-completed Philly project would have placed a
theater on property owned by the University of Pennsylvania, a
co-financier on the development. The Portland theater, which is almost
75 percent complete, was being developed by the Rouse development
company for Sundance Cinemas.
Paracelsus Healthcare Corp. Reports Status
of Chapter 11 Proceeding
Paracelsus Healthcare Corp. (PHC) yesterday reported on the status of
its capital restructuring efforts through a chapter 11 proceeding,
according to a newswire report. PHC filed a voluntary chapter 11
petition in the U.S. Bankruptcy Court for the Southern District of Texas
on Sept. 15 as part of its ongoing effort to restructure its capital
obligations. The bankruptcy filing was limited to the parent
company, and did not include any of PHC's hospital subsidiaries.
Simultaneously with the commencement of its bankruptcy case, PHC filed a
reorganization plan that will effect its capital restructuring.
The Houston-based PHC, which operates as a debtor-in-possession (DIP),
elected to seek court protection in order to facilitate the
restructuring of its debt while continuing to maintain the normal
business operations of PHC's hospital subsidiaries.
PHC's hospital subsidiaries did not file for bankruptcy protection
and are expected to continue paying, in the ordinary and normal course
of business, all wages, benefits and other employee obligations, as well
as all outstanding and ongoing accounts payable to their contractors and
vendors. A $62-million credit facility secured at the subsidiary level
is not directly affected by PHC's bankruptcy filing. The company expects
cash on hand and cash generated from operations to be sufficient to meet
the working capital and capital expenditure needs of the hospital
subsidiaries during the restructuring process.
Owens Corning Asks Court To Approve Unit Merger With
Servicelane
Owens Corning Corp. is asking for bankruptcy court authorization to
enter into a merger agreement with Servicelane.com Inc., to combine its
home remodeling unit with the privately held Dallas-based e-commerce
company. The Toledo, Ohio-based, building products maker says the
combination with Servicelane.com will permit it to expand its 'sell,
furnish and install,' or SFI, business nationally over the next year.
The planned expansion of the SFI business includes Owens Corning
increasing by 250 the number of Lowes Home Improvement Warehouse stores,
a unit of Lowes Cos., from the 42 it currently serves.
Courtesy of
href='http://www.fedfil.com/bankruptcy/developments.htm'>The Daily
Bankruptcy Review Copyright © November 15,
2000.
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