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/raid1/www/Hosts/bankrupt/TCR_Public/010115.MBX T R O U B L E D C O M P A N Y R E P O R T E R Monday, January 15, 2001, Vol. 5, No. 10 Headlines AMERICAN HOMESTAR: Files for Chapter 11 Protection in Texas AMERICAN HOMESTAR: Case Summary & 20 Largest Unsecured Creditors AMERICAN HOMESTAR: Nasdaq Halts Trading Pending More Information ARMSTRONG: Employs Richards Layton as Local Counsel AUDIOHIGHWAY.COM: Files for Chapter 11 Protection in San Jose BROADBAND WIRELESS: Receiver Fires President & CEO Ivan Webb COMMERCIAL CAPITAL: Fitch Lifts Watch on Series 3 Mortgage Bonds CONSTELLATION FINANCE: Fitch Puts Airline Notes on Rating Watch DARWIN NETWORKS: Case Summary and 20 Largest Unsecured Creditors DELTA AIR: American/TWA Deal Prompts Moody's to Revise Outlook DESIGN HOUSE: DHI Acquisition Completes Asset Purchase EXIDE CORP: Moody's Reviewing Ratings for Possible Downgrade FOXMEYER: Avatex to Wire $6 Million Settlement Payment to Trustee HARNISCHFEGER: Litigation Heats-Up Over Gelco Lease Claims HOLLYWOOD VIDEO: May Face Bankruptcy ICG COMMUNICATIONS: U.S. Trustee Appoints Creditors' Committee LERNOUT & HAUSPIE: Pays Shipping, Warehouse and Customs Charges LIDS CORPORATION: Wells Fargo Extends $25 Million DIP Financing LOEWEN: Selling 4 Funeral Homes & 2 Cemeteries for $1 Million LTV CORPORATION: Threatens Shut Down if Lenders Don't Cooperate OSAGE SYSTEMS: Inks Deal to Sell Assets to Pomeroy Computer OWENS-CORNING: Bonded Judgment Creditor Seeks Relief from Stay PILLOWTEX: Establishes Interim Professional Compensation Protocol SAFETY-KLEEN: Ryder Moves for Assumption of 287 Truck Leases STROUDS INC: Appoints Tom Paccioretti as President and CEO SUN HEALTHCARE: Stipulation Allows Insured Claim To Proceed TEARDROP GOLF: Bids for Assets to Begin at $18.6 Million TWA: Fitch Says Filing May Impact Aircraft Lease Securitizations USA BIOMASS: Delisted from Nasdaq Smallcap Market VENCOR: Proposes 16th Amendment to DIP Credit Agreement VLASIC FOODS: May Sell Pickle Business to H.J. Heinz Co. WASTE SYSTEMS: Files for Chapter 11 Reorganization WASTE SYSTEMS: Case Summary & 20 Largest Unsecured Creditors WHEELING-PITTSBURGH: Noteholders' Tap Hahn Loeser as Local Counsel WORLD CHAMPIONSHIP: Fusient Buys Money-Losing Wrestling Business ZENITH ELECTRONICS: TMA Honors Successful Turnaround Team * Bond pricing for the week of January 16, 2001 ********* AMERICAN HOMESTAR: Files for Chapter 11 Protection in Texas ----------------------------------------------------------- American Homestar Corporation (NASDAQ/ NMS:HSTR) commenced Chapter 11 bankruptcy proceedings on behalf of itself and 21 of its subsidiary companies. The affected subsidiaries are those engaged in retailing, manufacturing and franchising activities. The bankruptcies were commenced in the United States Bankruptcy Court for the Southern District of Texas. Certain of the Company's other subsidiaries-those engaged in insurance, financial and transportation services - did not commence any proceedings. The bankruptcy filings were necessitated by a severe and prolonged decline in manufactured home sales throughout the manufactured housing industry. Industry-wide sales declined approximately 24% between 1999 and 2000. At September 30, 2000 (the date of American Homestar Corporation's most recent 10-Q), the company reported total assets of $363 million and total liabilities of $279 million. Chapter 11 bankruptcy should allow American Homestar Corporation to restructure both its business operations and its indebtedness. The Company anticipates that it will file a plan of reorganization by April 30, 2001. American Homestar Corporation is a vertically integrated manufacturer and retailer of manufactured housing which also provides transportation and insurance services to its customers. AMERICAN HOMESTAR: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: American Homestar Corporation 2450 South Shore Blvd Ste 300 League City, TX 77573 Type of Business: A vertically integrated manufacturer and retailer of manufactured housing, which also provides transportation and insurance services to its customers. Chapter 11 Petition Date: January 11, 2001 Court: Southern District of Texas (Galveston) Bankruptcy Petition No.: 01-80017 Judge: Letitia Z. Clark Debtor's Counsel: Marvin Isgur, Esq. Floyd Isgur Rios & Wahrich, P.C. 700 Louisiana, Suite 4600 Houston, TX 77002 Telephone 713-222-1470 Fax 713-222-1475 Total Assets: $363.3 million Total Liabilities: $278.8 million List of Debtor's 20 Largest Unsecured Creditors: Creditor Nature of Claim Claim Amount -------- --------------- ------------ Massachusetts Mutual Life Senior Bond Debt $14,000,000 Insurance Co. 1295 State Street Springfield, MA 01111 Hare & Co. Series A Bond Debt $12,000,000 Address Unknown Massachusetts Mutual Life Series A Bond Debt $11,250,000 Insurance Co. 1295 State Street Springfield, MA 01111 Deutsche Financial Repurchase Unknown Services Corp. obligation 2625 S Plaza Dr., Ste 201 Tempe, AZ 85282 RiverHills Bank Repurchase Unknown Tommy Duren obligation P.O. Box 820-868 Vicksburg, MS 39182 Nations Credit Manufactuing Repurchase Unknown Housing Corporation of obligation America 6455 E Johns Crossing, Ste 325 Deluth, GA 30155 ITT Commercial Finance Corp. Repurchase Unknown n/k/a Deutsche obligation Deutsche Financial Services 3225 Cumberland Blvd Atlanta, GA 30339 Bombardier Capital, Inc. Repurchase Unknown P.O. Box 991 obligation 1600 Mountain View Dr. Colchester, VT 05446-0991 Northwestern Mutual Life Series A Bond Debt $10,000,000 Insurance Co. 720 F. Wisconsin Ave Milwaukee, WI 53202 Northwestern Mutual Life Senior Bond Debt $10,000,000.00 Insurance Co. 720 F. Wisconsin Ave Milwaukee, WI 53202 Allstate Life Insurance Co. Senior Bond Debt $8,500,000 3075 Sanders Rd, Ste G3A Northbrook, IL 60062-7127 Salkeld & Co. Senior Bond Debt $8,000,000 Address Unknown Allstate Insurance Company Senior Bond Debt $5,000,000 3075 Sanders Rd, Ste G3A Northbrook, IL 60062-7127 Hare & Co. Senior Bond Debt $5,000,000 Northern Life Insurance Co. Senior Bond Debt $4,500,000 c/o Rellastar Investment Research, Inc. 100 Washington Ave S, Ste 800 Minneapolis, MN 55401-2121 RellaStar Life Insurance Co. Series A Bond Debt $4,000,000 c/o Rellastar Investment Research, Inc. 100 Washington Ave S, Ste 800 Minneapolis, MN 55401-2121 American Bankers Life Assurance Senior Bond Debt $4,000,000 Company Inc. of Florida 11222 Quail Roost Dr., 4th Fl. Miami, FL 33157 Provident Mutual Life Series A Bond Debt $3,000,000 Insurance Company P.O. Box 1717 Valley Forge, PA 19482-1717 Provident Mutual Life Senior Bond Debt $3,000,000 Insurance Company P.O. Box 1717 Valley Forge, PA 19482-1717 Washington Square Advisers Senior Bond Debt $2,500,000 Private Placement Trust Fund c/o Washington Square Advisers, Inc. 100 Washington Ave S, Ste 700 Minneapolis, MN 55401-2121 AMERICAN HOMESTAR: Nasdaq Halts Trading Pending More Information ---------------------------------------------------------------- The Nasdaq Stock Market(SM) has changed the trading halt status of American Homestar Corporation (Nasdaq: HSTR) to "additional information requested." Trading in American Homestar was halted on January 11, 2001 at 8:13 a.m., Eastern Time, at a last sale price of 7/32. Trading will remain halted until the company has fully satisfied Nasdaq's request for additional information. ARMSTRONG: Employs Richards Layton as Local Counsel --------------------------------------------------- Armstrong Worldwide Industries and its debtor-affiliates ask the U.S. Bankruptcy Court for permission to employ Richards, Layton & Finger, P.A., in Wilmington, Delaware, as their local bankruptcy counsel in these Chapter 11 cases. Richard Layton will: (a) Advise the Debtors of their rights, powers, and duties as debtors and debtors-in-possession; (b) Take all necessary actions to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalves, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; (c) Prepare on behalf of the Debtors, as debtors in possession, all necessary motions, applications, answers, orders, reports, and papers in connection with the administration of the Debtors' estates; (d) Negotiate and prepare on behalf of the Debtors any plan(s) of reorganization and all related documents; and (e) Perform all other necessary legal services in connection with these Chapter 11 cases. Mark D. Collins, Esq., a director of Richards Layton, advises that the attorneys and paraprofessionals who will be performing the bulk of the work for the Debtors, and their respective hourly rates, will be: Mark D. Collins $ 340 Deborah E. Spivack $ 250 John H. Knight $ 240 Russell C. Silberglied $ 235 Paul N. Heath $ 180 Rebecca L. Booth $ 130 Diana M. Poole $ 95 These hourly rates are subject to periodic adjustment to reflect economic conditions and other factors. Mr. Collins advises that other attorneys and paraprofessionals may be performing services for the Debtors from time to time. Mr. Collins says that he performed a conflict check and, accordingly, discloses that AWI is an unsecured creditor in the bankruptcy case of Hechinger Investment Company, Inc., and its affiliates, in which the debtors are represented by Richards Finger. Also, Martin I. Lubaroff, a director of Richards Layton, is a director of Wachovia Bank Card Services, an affiliate of Wachovia Bank, itself a party in interest in these estates. In no event does the firm hold or represent any interest adverse to these estates or the Debtors in connection with the services for which approval of employment is sought. Richards Layton received a prepetition payment from the Debtors of $125,000. Such monies have been applied to any prepetition amounts owing for services rendered and expenses incurred, and any balance will be applied as a retainer. AUDIOHIGHWAY.COM: Files for Chapter 11 Protection in San Jose ------------------------------------------------------------- Audiohighway.com (Nasdaq: AHWY) has filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of California in San Jose, California. Audiohighway.com maintains a small technical and operations staff. In November 2000, audiohighway.com revealed that it was cutting back its business operations and laying off a substantial portion of its workforce. Due to a dramatic downturn in the financial markets and in particular, the market for Internet companies, audiohighway.com was unable to attract sufficient additional financing to maintain normal operations. After the reduction in work force, audiohighway.com continued to pursue strategic alternatives, but to date none has materialized. Therefore, audiohighway.com finds it necessary to seek bankruptcy protection. According to company officials, this action has been taken in an effort to protect company assets. The company anticipates it will file a plan of reorganization to restructure its debts in the near future. Audiohighway.com is a leading online media destination, offering one of the Internet's largest and most diverse libraries of free audio content. Visitors can access thousands of hours of music, audio books, news, entertainment, education and information from audiohighway.com in a number of formats (including MP3, RealPlayer(TM) and Windows(R) Media Player(TM)), through a variety of audio channels. audiohighway.com offers free audio and video content, which can be streamed directly to PCs or downloaded for future playback. BROADBAND WIRELESS: Receiver Fires President & CEO Ivan Webb ------------------------------------------------------------ Peter B. Bradford, Federally Appointed Temporary Receiver for Broadband Wireless International Corporation (OTC Bulletin Board: BBAN), said that the Board of Directors has terminated Ivan Webb as President/CEO of the company effective Thursday, December 28, 2000, removing any remaining official involvement held by Mr. Webb in Broadband Wireless International Corporation. The Board has also approved several resolutions which impact the organizational structure and operational preparation of the company. Organizational changes include the election of Mr. Albie L. Shaffer as Chairman of the Board of Directors, and Dr. Ron Tripp as Corporate Secretary and Treasurer. Additionally, the Board is very pleased to announce that Mr. Ron D. Harris has accepted an offer from the company to assume the position of C.O.O., effective January 5, 2001. Mr. Harris has been working with the Receivership and the current Board members for several months providing business planning analysis and also serving as Project Facilitator for the Broadband Wireless Application testing in Norman and Edmond, OK. Mr. Harris attended the University of Oklahoma, Norman and is a CPA, and has recently served as President of ENTEQ Solutions and Inacom Information Systems, both successful companies involved in the system integration/ information management industry. As C.O.O., Mr. Harris will be responsible for overseeing and administering all matters related to the company's deployment of Broadband Wireless services in the Oklahoma City market. Finally, the Board has approved moving forward immediately with an operational business plan which will provide for Broadband Wireless services to be offered to business and residential customers initially in the Greater Oklahoma City, Norman, and Edmond metro areas. The execution of this business plan is one component of the strategy to position the company appropriately for sustained viability, and should enable the company to have customers engaged in the next few months. At the same time, the Board is continuing to meet with several companies that have expressed an interest in merger or acquisition plans with BBAN; these discussions include the continuation of Broadband Wireless International Corporation to develop a significant base of operation in the Oklahoma City area. COMMERCIAL CAPITAL: Fitch Lifts Watch on Series 3 Mortgage Bonds ---------------------------------------------------------------- Commercial Capital Access One, Inc.'s commercial mortgage bonds series 3, $17.3 million class 3G are removed from Rating Watch Negative and is affirmed at 'B'. Fitch also affirms the $60.6 million class 3A-1, the $200.6 million class 3A-2, and the interest-only class 3-X at 'AAA'. The $45.5 million class 3B is affirmed at 'AA', the $43.4 million class 3C is affirmed at 'A', the $19.5 million class 3D is affirmed at 'BBB', the $6.5 million class 3E is affirmed at 'BBB-', and the $10.8 million class 3F is affirmed at 'BB'. Fitch does not rate the $17.3 million class 3H. The rating actions follow Fitch's annual review of the transaction, which closed in December 1998. The bonds are collateralized by 108 mortgage loans secured by 112 properties. Low income housing tax credit (LIHTC) multifamily properties (39% by principal balance) and office properties (26%) constitute the majority of the pool. The properties are located in 33 different states, with significant concentrations in Texas (16%) and North Carolina (11%). No loans have paid off since closing. Currently, one loan (1%) is 90-days delinquent and in the hands of the special servicer, GMAC Commercial Mortgage ('GMAC'). Sun America's limited guaranty on the 38 loans that it originated is still intact. Class 3G was placed on Rating Watch Negative on Dec. 15, 2000 due to the delay in the transfer of special servicing responsibilities from Dynex Commercial Services ('Dynex') to GMAC. At the time, Fitch was concerned with Dynex's ability to properly service the transaction in the absence of a standby special servicer. Special servicing responsibilities were formally transferred to GMAC on Dec. 21, 2000. Given GMAC's special servicer rating of 'CSS1', Fitch is no longer concerned, at this time, with the quality of special servicing for the transaction. Because of the recent transfers of servicing responsibilities, in particular primary servicing responsibilities from Dynex to GMAC (June 27, 2000), very limited operating information was available for the properties securing the transaction. As of January 11, 2001, GMAC was able to provide year-to-date (YTD) operating information, through September 2000, for 47% of the properties (based on principal balance). Based on this information, the comparable weighted-average (WA) debt-service coverage ratio (DSCR) increased, on an adjusted basis, to 1.42 times (x), as of YTD September 2000, compared to 1.33x, for the trailing-twelve months ended September 1999. Fitch considered 11 loans (11%) to be of particular concern, compared to 9% during the 1999 annual review. The loans of concern had either a weak DSCR (<1.0x), or a lack of current information coupled with a history of weak DSCRs. Healthcare loans accounted for 53% of the loans of concern, while LIHTC properties accounted for the balance. All of the LIHTC loans of concern were covered by the Sun America guaranty. Fitch assumed that the aforementioned 11 loans would default at various loss levels. Based on the hypothetical loss analysis, the current subordination levels, the limited exposure to delinquent loans, and the transfer of special servicing responsibilities to GMAC, Fitch removes class 3G from Rating Watch Negative and affirms all the ratings. Fitch will continue to monitor this transaction. CONSTELLATION FINANCE: Fitch Puts Airline Notes on Rating Watch --------------------------------------------------------------- Fitch places Constellation Finance LLC's 'BB' rated 9.8% airline receivable asset-backed notes, series 1997-1 on Rating Watch Negative. Constellation, 99% owned by Trans World Airlines, Inc., is a special purpose bankruptcy remote limited liability company organized to acquire TWA receivables. While the notes have some features of structured debt transactions, Fitch's rating is linked to the credit quality of TWA. The notes were issued in December 1997 and are due to begin their scheduled amortization on Jan. 15, 2001. Fitch's rating action reflects TWA's announcement that it is being acquired by American Airlines, Inc. and as part of the acquisition has filed for Chapter 11 bankruptcy protection. Fitch is currently monitoring the developments of this announcement and will take additional rating action upon completion of their review process. DARWIN NETWORKS: Case Summary and 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Darwin Networks, Inc. 13400 Eastpoint Centre Drive Louisville, Kentucky 40223 Type of Business: National provider of high speed Internet Access and data solutions Chapter 11 Petition Date: January 11, 2001 Court: District of Delaware Bankruptcy Case No.: 01-00095 Debtor's Counsel: Steven M. Yoder, Esq. The Bayard Firm 222 Delaware Avenue, Suite 900 P.O. Box 25130 Wilmington, DE 19899 (302) 655-5000 and Latham & Watkins Suite 5800, Sears Tower 233 South Wacker Drive Chicago, Illinois 60606 and Wyatt, Tarrant & Comb, LLP 2800 Citizen's Plaza Louisville, Kentucky 40202 Total Assets: $122,197,001 Total Debts: $62,814,220 List of the Debtor's 20 Largest Unsecured Creditors: Creditor Nature of Claim Claim Amount --------- --------------- ------------ Cisco Systems Capital Capital Lease $15,910,826 Jeff Riemenschneider Obligation P.O. Box 60000 San Francisco, CA 94160 tel:(773)695-8276 fax:(502)833-1730 NTPC Capital Corporation Capital Lease $10,864,746 Don Hansen Obligation P.O. Box 642888 Pittsburgh, PA 15264 tel:(404)329-4202 fax:(888)837-1668 Transamerica Business Capital Lease $4,370,065 Credit Corporation Obligation Darren Miller P.O. Box 70892 Chicago,IL 60673 tel:(860)409-4542 fax:(860)677-6473 Tut Systems Trade Debt $3,973,138 Ray Calibrese Corporate Treasurer 5964 W. Las Positas Blvd. Pleasanton, CA 94588 tel:(925)201-4502 fax:(925)460-3901 Xerox Company Trade Debt $1,606,576 Craig Haskins P.O. Box 828187 Philadelphia,PA 19182-8187 tel:(205)968-3315 fax:(205)970-4710 AT&T Trade Debt $1,530,764 Tamara Morris, Billing PO Box 16700 Mesa, AZ 85211 tel:(800)826-5758 fax:(812)246-0401 Interspeed Trade Debt $800,919 Rajeev Agarwal,CEO 39 High Street North Andover,MA 01845 tel:(978)688-6164 fax:(978)688-4798 National City Leasing Capital Lease $657,415 Corporation Obligation David Hudson Section #680 Louisville, KY 40289-0680 tel:(502)581-7778 Dell Financial Services Capital Lease $506,407 Sylvia Morales Obligation PO Box 4125 Trade Debt Carol Stream,IL 60197 tel:(888)660-3355 x48106 Suntech Trade Debt $502,075 Eric Fitner 844 Livingston Court Marietta, GA 30067 tel:(770)855-3800 fax:(770)977-5680 BellSouth Communicaton System Trade Debt $460,712 Claire Metz PO Box 70807 Charlotte, NC 28272-0807 tel:(540)983-6000 fax:(540)983-6284 WGCS,Inc. Trade Debt $457,275 Jennifer Reeder PO Box 2259 Wylie,TX 75098 tel:(972)429-1559 fax:(972)429-0952 Torsys Consulting,Inc. Trade Debt $445,695 Cliff Freeman 2201 E.El Segundo Blvd. El Segundo, CA 90245 tel:(310)760-4120 fax:(310)399-5484 Matsco Financial Corp. Capital Lease $366,681 Andy Speece Obligation 1900 Powell Street,Ste 1150 Emeryville,CA 94608 tel:(510)982-3320 Portal Software Inc. Trade Debt $348,752 Leonora Consoli PO Box 3760 Boston, MA 02241-3760 tel:(408)572-2346 fax:(509)461-4792 PMSI Project Mentors Trade Debt $338,733 Tom Meyers PO Box 420615 Atlanta,GA 30342-0615 tel:(404)459-3333 fax:(404)459-3330 Worldwide Fiber Optics,Inc. Trade Debt $305,839 Betsy Becker 3469 Parkway Center Court Orlando, FL 32808 tel:(407)292-4545 fax:(407)532-7434 Nomadix Trade Debt $266,723 Eric Larson 31355 Agoura Road Westlake Village, CA 91361 tel:(818)575-2444 fax:(818)597-1502 Henderson Electric Trade Debt $241,798 EMS Technologies Wireless Trade Debt $213,459 DELTA AIR: American/TWA Deal Prompts Moody's to Revise Outlook -------------------------------------------------------------- Moody's Investor Service confirmed that it has revised Delta Air Lines, Inc.'s rating outlook from stable to negative. This is due to the growing concern over the potential implications of the changes in the U.S. airline industry like the ongoing consolidation arrangements. The rating action took into consideration the company's competitive position as a leading US airline, favorable operating history, and sound financial condition. But the rating also took into account the potential of the latest development in the industry to put pressure on the company or urge it to look for strategic responses to support its position. Either way, the rating outlook recognizes the potential effects the developments may have on Delta's Baa3 senior debt rating over the immediate term. The ratings affected are: all Senior Unsecured ratings: Baa3; the Commercial Paper rating: Prime-3; the Senior Subordinate rating: Ba2; all Equipment Trust ratings: Baa1; all Enhanced Equipment Trust ratings: ranging from Aa2 to A3: the Senior Secured Shelf rating: Baa1; all IRB ratings: Baa3. Atlanta, Georgia-based Delta Air Lines, Inc. along with its subsidiaries, Atlantic South East Airlines, Inc. and Comair, Inc. is the largest US airline in terms of aircraft departures and passengers enplaned. It provides air transportation for passengers and freight throughout the United States and around the world. DESIGN HOUSE: DHI Acquisition Completes Asset Purchase ------------------------------------------------------ Executives at Design House have formed a new organization, DHI Acquisition Corporation, and have purchased the company. The new company, which will continue to operate as Design House, was formed by executives Todd Witte, Solomon Malka and Dennis Thums. In a deal solidified on Dec. 11, 2000, the group purchased all Design House inventory out of receivership, as well as the assets and brand names needed to run the company. Serving the home improvement industry since 1872, Design House's product lines include tub surround manufacturing, residential lighting and ceiling fans, bath products, door hardware and various millwork items. In addition to its offices in Germantown, Wis., the company will maintain Design House's offices in Taipei, Taiwan. "Design House is a special place for all of us, and we are excited to be in a position to turn around the company, which we all strongly believe in," said Witte, the company's new president. "We appreciate the patience and loyalty shown by our customers, suppliers and employees, and we are going to take the necessary steps to solidify the future and grow the business." Witte was formerly senior vice president of sales and marketing at Design House. Malka, who was formerly Design House' vice president of international operations, will head up the company's international operations and merchandising activities. Rounding out the executive team is Thums, who will head operations and serve as chief financial officer. Thums was formerly vice president of operations. Design House encourages customers to direct any inquiries to the customer service team. Based in Germantown, Wisconsin, Design House Inc. has been a major force in the building products and accessory industry for more than 125 years. Founded in 1872, the home improvement company manufactures and markets specialty millwork products as well as decorative bath products, residential lighting, ceiling fans and door hardware. The assets of the company were bought by DHI Acquisition Corp. on Dec. 11, 2000. EXIDE CORP: Moody's Reviewing Ratings for Possible Downgrade ------------------------------------------------------------ Exide Corporation's ratings were placed on review by Moody's Investor Service for possible downgrade. This is a reaction the company's announcement that it has received subpoenas from the United State's Attorney for the Southern District of Illinois concerning its past relationship with Sears, Roebuck & Co. The company, based on discussions with the US Attorney, believes that it is likely to be indicted in this criminal case or pay a substantial fine. Any settlement could negatively affect the company's debt protection measures and be the basis for ratings downgrades. The followings ratings are affected: (i) The Ba3 ratings of Exide's $925 million of senior secured bank credit facilities (including a $250 million senior secured revolving credit due 2003; a $150 million senior secured term loan A due 2003; and a $525 million senior secured term loan B due 2005); (ii) The B1 rating of Exide's $300 million of 10% senior unsecured notes due 2005; (iii) the B3 rating of Exide's $398 million of 2.9% convertible senior subordinated notes due 2005; (iv) Exide's Ba3 senior implied rating; and (v) Exide's B1 senior unsecured issuer rating. Exide's management has been fully cooperating with the government investigation in the hope of expediting the investigation. The company is also in litigation with certain members of its former management to recover damages concerning the same issues that have been the focus of the US Attorney's investigation. The company has stopped employing individuals who can be tied to the alleged Sears incidents in question. Exide (d/b/a as Exide Technologies) is a global leader of stored electrical energy solutions. Transportation, network and motive power batteries are produced for a broad range of uses within the industrial and transportation aftermarket and original equipment markets. Annual revenues are approximately $3.2 billion. FOXMEYER: Avatex to Wire $6 Million Settlement Payment to Trustee ----------------------------------------------------------------- The Honorable M. Bruce McCullough Bruce put his stamp of approval on a Settlement Agreement among Bart A. Brown, Jr., the chapter 7 trustee for FoxMeyer Corporation, FoxMeyer Drug Company and their debtor-affiliates, and Avatex Corporation. Early in FoxMeyer's 1996 bankruptcy saga, the Official Committee of Unsecured Creditors filed a lawsuit alleging that a $150 million pre-petition dividend upstreamed from FoxMeyer to Avatex constituted a fraudulent conveyance. Avatex compromised that claim with Mr. Brown by delivering a collateralized $8 million promissory note to FoxMeyer. This latest settlement further compromises that earlier settlement. Under the new settlement, Avatex agrees to deliver $6 million by wire transfer to the Trustee. At the January 8 hearing, Mr. Brown's counsel recited to Judge McCullough the run-of-the-mill arguments in support of a compromise and settlement under Rule 9019 of the Federal Rules of Bankruptcy Procedure. Mr. Brown makes the point that collection of the Avatex Note might prove to be difficult absent this settlement pact because Avatex is in poor financial health and Avatex's auditors have expressed doubt about its ability to continue as a going concern. In an unusual procedural move, David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP, serving as lead counsel to the Chapter 7 Trustee, filed the motion papers requesting approval of the Settlement Agreement under seal with the Bankruptcy Clerk. Judge McCullough reviewed the settlement pact on January 8 and signed an order approving the settlement. Judge McCullough has directed that his order not be entered on the Court's dockets until January 29, 2001, to allow creditors and other parties-in-interest the opportunity to interpose objections. HARNISCHFEGER: Litigation Heats-Up Over Gelco Lease Claims ---------------------------------------------------------- In response to an adversary proceeding initiated by Gelco Corporation, d/b/a GE Capital Fleet Services, defendants and counterclaimants Harnischfeger Industries, Inc., Beloit Corporation, Joy Technologies Inc. and Harnischfeger Corporation Inc. object to and request disallowance of claims numbered 10655, 10656, and 10654 filed by Gelco and scheduled claim numbered s4157. The counterclaiming Debtors also seek declaratory relief and injunctive relief. The Counterclaimants tell the Court that the matter is related to two Master Agreements between HII and GE Cap: (1) a Master Fleet Agreement effective as of October 12, 1995, in which HII is referred to as the Client; (2) a Master Lease Agreement effective as of February 10, 1998, in which HII is referred to as the Customer In connection with the Agreements, GE Cap has filed proofs of claim against HII, Beloit, and JTI which, collectively, effectively assert that HII, Beloit, and JTI are jointly and severally liable to GE Cap under the Master Lease Agreement: * Claim (no. 10655) in the amount of $1,214,129.30 against HII * Claim (no. 10656) in the amount of $1,214,129.30 against Beloit * Claim (no. 10654) in the amount of $1,214,129.30 against JTI GE Cap has not filed a proof of claim against Harnco, thus apparently does not claim that Harnco is jointly and severally liable under the Master Lease Agreement. The counterclaimants note that GE Cap is barred from asserting any claims against Harnco pursuant to the Court's order dated November 30, 1999. The Counterclaimants tell Judge Walsh that the agreements provide that "If more than one party executes [the Agreements as Client/Customer], each shall be jointly and severally liable hereunder," and because only HII executed the Agreements, Beloit, Harnco, and JTI are not liable to GE Cap under either Agreement. Request for Declaratory Relief (I) Obligation of HII Only In light of the circumstance, the Counterclaimants request the Court to declare that only HII is obligated to GE Cap under the Master Agreements and that Beloit, Harnco, and JTI are not jointly and severally liable on any claim that has been asserted or may be asserted by GE Cap based upon the Master Agreements. Otherwise, the claimants say, JTI, Harnco, and Beloit might be wrongfully saddled with administrative liabilities under 11 U.S.C. section 365(d)(lO) or wrongfully required to assume or reject the Master Agreements. Moreover, GE Cap's claim on account of alleged nonpayment under the Master Agreements might be allowed against Beloit and JTI. (II) Separate and Distinct Leases In the alternative, the claimants seek declaration that the leases are separate and distinct unexpired leases. The claimants tell the Court that the Master Agreements did not provide for the lease of any specific vehicles or for the payment of funds for the leasing of vehicles, but rather set forth general terms in the event schedules were executed for the leasing of vehicles and the payment of funds for the leasing of vehicles. As contemplated in the Master Agreements, the claimants relate, HII, Beloit, Harnco and JTI each entered into separate agreements with GE Cap for the lease of vehicles. The Debtors observe that the Master Agreements being necessary to but not sufficient for the leases to become effective. The counterclaimants note that each of them executed independent vehicle lease requests and related documents to GE Cap for their respective needs, with no knowledge as to the arrangements between GE Cap and the other counterclaimants, each autonomously managed its arrangements with GE Cap, made termination notices Independently and was under obligations unrelated to obligations of the other Counterclaimants. GE Cap issued invoices to each of them under the respective Lease. Each independently paid and accounted for the consideration paid and credits received, determined by the number of vehicles each chose to lease and the terms of each respective Lease. Objection to the Proofs of Claim HII, Beloit and JTI object to the claims filed against them respectively and request that the claim be disallowed because: -- The claims are duplicative: claim no. 10656 against Beloit and claim no. 10654 against JTI are each a duplicate of claim no. 10655 against HII; -- Each is not liable to GE Cap for any obligations owed to GE by any of the other debtors; -- Each objects to the alleged secured status of GE Cap's claim. Specifically, with respect to claim no. 10655 filed against it, HII also objects on the grounds that: (1) The amount set forth is overstated; (2) Should the Court determine that HII is liable to GE Cap for Beloit's obligations to GE Cap, then, pursuant to 11 U.S.C. section 502(d), HII objects to and requests disallowance of GE Cap's claim numbered 10655 on the same grounds set forth by Beloit. With respect to claim number 10656, Beloit also objects on the ground that: (1) Beloit has no contractual liability to GE Cap under any of the agreements attached to GE Cap's proof of claim; (2) Pursuant to 11 U.S.C. section 502(d), a creditor's claim against a debtor's estate must be disallowed if the creditor is a transferee of a transfer that is avoidable pursuant to 11 U.S.C. section 547 and recoverable under 11 U.S.C. section 550; in the present case, GE Cap is the transferee of transfers from Beloit that are avoidable pursuant to 11 U.S.C. section 547 and coverable pursuant to 11 U.S.C. section 550; With respect to claim numbered 10654, JTI objects on the ground that: (1) JTI has no contractual liability to GE Cap under any of the agreements atached to GE Cap's proof of claim; (2) Should the Court determine that JTI is liable to GE Cap for Beloit's obligations to GE Cap, then, pursuant to 11 U.S.C. section 502(d), JTI objects to and requests disallowance of GE Cap's claim numbered 10654 on the same grounds set forth by Beloit. With respect to claim numbered s4157 in the amount of $104,732.35 the counterclaimants object on the grounds that GE Cap has not filed a proof of claim against Harnco. Therefore, pursuant to the Court's order dated November 30, 1999 governing the filing of proofs of claim, GE Cap is barred from asserting any claims against Harnco, including, but not limited to, any claims that Harnco is jointly and severally liable to GE Cap for any obligations owed to GE Cap by any of the other debtors. Harnco objects to scheduled claim numbered s4157 on the ground that it has no contractual liability to GE Cap. Alleged Violations of Automatic Stay By GE Cap The Debtors draw the Court's attention to provisions under the Master Agreements regarding the surrender, sale or disposition, and terminal rent adjustment for leased vehicles. Section 8 of the Master Fleet Agreement: * Refund of Rental If the Net Proceeds exceed the Unamortized Book Value, [GE Cap] shall retain an amount equal to the Unamortized Book Value of the vehicle sold and client shall receive the excess as a refund of rental. * Rental Charge If the Net Proceeds are less than the Unamortized Book Value of the vehicle sold, but equal to or greater than the Guaranteed Residual, client shall pay [GE Cap], in cash, as a rental charge adjustment, the amount of the difference between the Net Proceeds and the Unamortized Book Value. Section 11 of the Master Lease Agreement: * Refund of Rental If the Net Proceeds exceed the Book Value (as to each Vehicle, its Capitalized Cost as defined in the Schedule, reduced by appropriate amortization), [GE Cap] shall retain an amount equal to the Book Value, and remit the excess to Customer as a refund of rental. * If the Net Proceeds are less than the Book Value, Customer shall pay [GE Cap] the amount of the difference. The Debtors tell Judge Walsh that these provisions were intended to be an incentive to HII, Beloit, Harnco and JTI to maintain lease vehicles in good condition. Before the Petition Date, the provisions were observed with respect to the "refund of rental" of purchased vehicles. If a buyer (usually the employee who had been operating the leased vehicle) approached Harnco or JTI with a cash bid for the vehicle, then Harnco or JTI would contact GE Cap (with no involvement on the part of HII) for approval of the bid. In nearly every case before the Petition Date, the Book Value of the purchased vehicles was $0. Upon approval of the bid and payment by the buyer, and in accordance with the terms of the Agreements, GE Cap would credit Harnco or JTI with the amount of the purchase price, less certain administrative services fees. In cases where a vehicle was returned to GE Cap at the end of its lease with no offer from a buyer outstanding, it was the practice under the Harnco Lease and the JTI Lease for GE Cap to sell the vehicle at auction, and to credit Harnco or JTI with the purchase price at auction, less certain administrative service fees, the Counterclaimants tell Judge Walsh. However, both before and after the Petition Date, GE Cap wrongfully and unilaterally changed the formula for leased vehicle purchases, depriving Harnco and JTI of their benefits, the counterclaimants allege. Specifically, they tell the Court that after the Petition Date, GE Cap began calculating the lessee's "refund of rental" by subtracting from the purchase price the "blue book" value, a figure deemed by GE Cap to reflect the market value of the vehicle, resulting in "refund of rental" of $0 typically. The counterclaimants further accuse that, after the commencement of their chapter 11 cases, GE Cap set off pre-petition rental payments allegedly owed to them against "refund of rental". The counterclaimants also complain that because of GE Cap's wrongful alteration of the terms of the Leases, Harnco and JIT have been forced to continue operating vehicles with excessive mileage in order to avoid recording losses. Accordingly, the Debtors claim that GE Cap has violated the automatic stay thus jeopardizing the ability of HII, Harnco ad JTI to successfully reorganize under the Bankruptcy Code. Based on this, HII, or in the alternative, Harnco and JTI request the Court to declare that GE Cap has willfully violated and disregarded the automatic stay, enjoin GE Cap from further violations of the automatic stay or, put differently, compel GE Cap to perform the Master Agreements and to award HII or in the alternative, Harnco and JTI actual damages, costs, attorneys' fees, and expenses for GE Cap's contractual breaches and willful violations of the automatic stay. In conclusion, the Counterclaimants request that the Court enter an order: (1) disallowing GE Cap's claim numbered 10656 against Beloit; (2) disallowing GE Cap's claim numbered 10654 against JTI; (3) disallowing GE Cap's claim numbered 10655 against HII; (4) declaring that HII only is obligated to GE Cap for vehicles leased pursuant to the Master Agreements or in the alternative, declaring that the Leases are separate and distinct unexpired leases for all purposes, including, but not limited to, assumption and rejection of unexpired leases pursuant to ll U.S.C. section 365, and the allowance and determination of administrative expenses claims and prepetition claims made pursuant to the Leases; (5) declaring that GE Cap has willfully violated and disregarded the automatic stay by taking actions to obtain possession of HII's or, in the alternative, Harnco's and JTI's property and by otherwise harassing or interfering with Harnco's and JTI's conduct of their chapter 11 cases; (6) awarding HII or, in the alternative, Harnco and JTI, actual damages, costs, attorneys' fees, and expenses for GE Cap's contractual breaches and willful violations of the automatic stay; (7) enjoining GE Cap from further violations of the automatic stay and compelling GE Cap to perform its obligations under the Master Agreements or, in the alternative, the Leases, including, but not limited to, its obligations in connection with the purchase of new vehicles to be leased to counterclaimants, the termination of leases, the sale of vehicles, and the refund of rental. (Harnischfeger Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 609/392-0900) HOLLYWOOD VIDEO: May Face Bankruptcy ------------------------------------ Hollywood Video, the nation's second-largest video rental chain, is struggling to survive and is more than $260 million in debt. If it can't pay its creditors, one analyst says that the Portland- based company might have to reorganize in bankruptcy court. Over the past year, Hollywood's stock price has dropped from about $14 to just over $1. (ABI 11-Jan-2001) ICG COMMUNICATIONS: U.S. Trustee Appoints Creditors' Committee -------------------------------------------------------------- Frederick J. Baker, Esq., Senior Assistant U.S. Trustee, has appointed these creditors to serve on the Official Creditors' Committee in ICG Communication's on-going chapter 11 reorganization: W. R. Huff Asset Management Co., LLC 67 Park Place Morristown, New Jersey 07960 Attn: Mr. Joseph R. Thornton Tele: (973) 984-1233 Fax: (973) 984-5818 Aetna Life Insurance Company Aetna Health & Life Insurance Company Corporate Health Insurance Company 151 Farmington Avenue, RTAA Hartford, Connecticut Attn: Mr. Brian J. Lessard Tele: (860) 273-8518 Fax: (860) 273-8560 Cerberus Capital Management, LP 450 Park Avenue, 28th Floor New York, New York 10022 Attn: Mr. Seth P. Plattus Tele: (212) 891-2120 Fax: (212) 891-1541 Conseco Capital Management 11825 North Pennsylvania Street Carmel, Indiana 46032 Attn: Mr. Eric Johnson Tele: (317) 817-6806 Fax: (317) 817-4115 Bank One, N.A. 100 East Broad Street, 8th Floor Columbus, Ohio 43215-0181 Attn: Mr. Eric Michael Stoller Tele: (614) 248-5579 Fax: (614) 248-5195 Lucent Technologies Inc. 5 Wood Hollow Road, Room 1165 Parsippany, New Jersey 07054 Attn: Mr. Ed Ronco Tele: (973) 581-4350 Fax: (530) 327-7188 Qwest Communications Corporation 555 17th Street, 12th Floor Denver, Colorado 80202 Attn: Ms. Wendy Wagner Tele: (303) 992-5338 Fax: (303) 992-1490 The Assistant U. S. Trustee assigned to these cases is Frank J. Perch, Esq., Tele: (302) 573-6491; Fax: (302) 573-6497. (ICG Communications Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900) LERNOUT & HAUSPIE: Pays Shipping, Warehouse and Customs Charges --------------------------------------------------------------- In the normal course of business the Lernout & Hauspie rely on particular common carriers to ship, transport and deliver goods, materials, and supplies to various places, including manufacturing facilities. It depends on the shippers for timely, consistent deliveries, and the shippers' services are key to the Debtors' operations. Goods which are in transit are often deposited at warehouses that are not owned or otherwise controlled by the Debtors, but rather are owned and/or controlled by independent third parties. In addition, depending on the origin of the goods at issue, it incurs various customs charges and duties attributable to the importation and exportation of such goods. As a result of the commencement of these Chapter 11 cases, some shippers and warehousemen who hold goods may refuse to release these goods pending payment of pre-petition shipping charges, thereby disrupting the Debtors' operations. Moreover, for certain of the goods, unless the Debtors pay the customers charges, the shippers and warehousemen may refuse to release, or may be prohibited from releasing, the goods. Unless the Debtors continue to receive delivery of goods on a timely and uninterrupted basis, its operations will be severely impacted, causing irreparable damage to its businesses and reorganization efforts. By this Motion the Debtors sought and obtained an Order authorizing them to pay those shipping and warehousing charges and customs charges deemed necessary or appropriate in its business judgment in order to obtain the release of goods ordered pre- petition and held by such shippers and warehousemen on account of unpaid invoices. The Debtors obtained this authority to make such payments in the amounts and to the extent necessary to satisfy undisputed, pre-petition shipping and warehousing charges and customs charges, and to satisfy the possessory liens, if any, on goods that may be held by a shipper or warehouseman or customs authority pending the payment of such shipping and warehousing charges or customs charges. (Lernout & Hauspie Bankruptcy News, Issue No. 2, Bankruptcy Creditors' Service, Inc., 609/392-0900) LIDS CORPORATION: Wells Fargo Extends $25 Million DIP Financing --------------------------------------------------------------- Retail asset-based lender Wells Fargo Retail Finance, of Boston, Mass., has provided a $25 million line of credit to Lids Corporation, of Westwood, Mass., the world's largest headwear retailer. Lids Corporation filed for Chapter 11 bankruptcy on Tuesday, January 4, 2000 in a Delaware Federal Bankruptcy Court. "Wells Fargo Retail Finance was a logical alternative for us," said Nancy Babine-Kucinski, Lids' Chief Executive Officer. "They showed from the beginning they could be practical and flexible in helping us to reorganize our business for the future." Lids Corporation is a privately held retailer of specialty headwear. The company was founded in 1992 and currently operates 388 stores in 47 states. These locations are supported by a Warehouse/Distribution Center located in Randolph, Mass. "Lids Corporation has a proven merchandising concept, and we look forward to supporting Nancy Babine-Kucinski and her management team," said Wells Fargo Retail Finance Senior Managing Director and Co-COO Andrew Moser. "We're pleased to help the company by providing the added liquidity necessary to help reposition the business for the future." Based in Boston, Mass., with additional offices located in Philadelphia and Los Angeles, Wells Fargo Retail Finance was formed in December 2000 when Foothill Capital of Los Angeles acquired the remaining interest in Paragon Capital LLC of Boston. As an autonomous, self-contained business unit, Wells Fargo Retail Finance has nearly $1.8 billion in retail commitments and is growing. LOEWEN: Selling 4 Funeral Homes & 2 Cemeteries for $1 Million ------------------------------------------------------------- Debtor-affiliates of The Loewen Group, Inc.: * Hadley Funeral Chapels, Inc., * Coge Investment Corporation, * Memorial Consultants of California, Inc. and * Lake Havasu Memorial Gardens. propose to sell: (A) Funeral Homes that are California corporations: (1) Hadley Funeral Chapels, Inc. doing business as Hadley Funeral Chapels, Inc. (Visalia)(2613) (2) Hadley Funeral Chapels, Inc. doing business as Hadley Funeral Chapels, Inc. (Farmersville)(2614) (3) Coge Investment Corporation doing business as Oceanside Mortuary (3153) (4) Memorial Consultants of California, Inc. doing business as Mountain Valley Mortuary (3563) (B) Cemeteries: (1) Memorial Consultants of California, Inc. a California corporation, doing business as Mountain Valley Memorial Park (5802) (2) Lake Havasu Memorial Gardens, Inc. an Arizona corporation, doing business as Lake Havasu Memorial Gardens (5823) As part of the Disposition Program, the Selling Debtors sought and obtained the Court's authority: (i) to sell the funeral home and cemetery businesses and related assets at the Sale Locations to the Purchaser that the Debtors determine has submitted the highest and best offer, free of all liens, claims and encumberances; and (ii) to assume and assign to the Purchaser the 7 executory contracts and unexpired leases, pursuant to section 363 of the Bankruptcy Code. Pursuant to an Asset Purchase Agreement, the Initial Bidder (Desert Cremation Society, Inc.) and the Debtors have agreed to a purchase price of $1,000,000 subject to higher and better offers, and to the Court's approval. All accounts receivable, transferable permits and goodwill relating to the businesses conducted at the Sale Location will be transferred to the Initial Bidder. The Initial Bidder agrees to pay, and to hold the Selling Debtor harmless from, all costs and other expenses associated with the sale, such as taxes, levies and license and registration fees. The Initial Bidder paid the Selling Debtors a deposit of $50,000 upon the execution of the Purchase Agreement and agrees to pay the remainder of the Purchase Price at the closing. In connection with the proposed sale of the Sale Locations, Neweol would sell and the Initial Bidder would purchase certain accounts receivable related to the Sale Locations pursuant to a purchase agreement between Neweol and the Initial Bidder. The amount of the Neweol Allocation will be determined immediately prior to closing. In accordance with the Net Asset Sale Proceeds Procedures, the Debtors will use the proceeds generated to repay any outstanding balances under the Replacement DIP Facility and deposit the net proceeds into an account maintained by LGII at First Union National Bank for investment, pending ultimate distribution on court order. Funds necessary to pay bona fide direct costs of a sale may be paid from the account without further order of the Court.( Loewen Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 609/392-0900) LTV CORPORATION: Threatens Shut Down if Lenders Don't Cooperate --------------------------------------------------------------- As a precautionary and prophylactic measure, in the unlikely event that LTV Corporation is unable to obtain permanent access to postpetition financing or the continuing use of their Prepetition Lenders' cash collateral, the Debtors present Judge Bodoh with a Motion seeking authority to take any and all actions necessary or appropriate in the exercise of their business judgment to: (i) discontinue their business operations and pursue a shut- down of their facilities; and (ii) in connection with this, comply with applicable federal, state and local regulations and protect public health and safety. The Debtors stress that their primary objective is to continue operating their businesses and reorganize in Chapter 11 for the benefit of their creditors, employees, retirees, customers, communities and other stakeholders, the Debtors lack sufficient liquidity to maintain ongoing operations without the immediate and permanent use of postpetition financing or use of cash collateral or other funds. While the Debtors are taking every available step to avoid a precipitous shut-down that would put 17,500 employees out of work, leave 100,000 retirees and their dependents without health care, and pose potentially serious safety issues to the general public, that possibility exists if the Debtors are unable to arrange for continued financing of its operations. OSAGE SYSTEMS: Inks Deal to Sell Assets to Pomeroy Computer ----------------------------------------------------------- Osage Systems Group Inc. (AMEX: OSE) has entered into a letter of intent (LOI) providing for the sale of operating assets and the business of Osage to Pomeroy Computer Resources Inc. (Nasdaq: PMRY). The purchase price is undisclosed at this time. The transaction is subject to a number of conditions, including negotiation of definitive agreements and customary approvals and consents. It is contemplated that the transaction will also be effected through the provisions of the U.S. Bankruptcy Code and will, accordingly, be subject to court approval. If the sale is completed, Pomeroy anticipates that the systems integration and consulting business of Osage will operate as additional branch offices of the company. "This proposed transaction should provide Pomeroy with the opportunity to acquire the business and capabilities associated with Osage's talented group of employees. It will also give the company a presence in geographies where we currently do not have facilities," commented Stephen E. Pomeroy, president of Pomeroy. Over the past several months, management of Osage has sought capital to fund prior obligations and support its operations. Until recently, Osage has been able to generate operating cash flow but has not had sufficient capital support to overcome past obligations and support operations. Because of its capital constraints, Osage has at times been unable to secure the necessary credit to purchase needed hardware and software for sale to its customers, resulting in lost sales opportunities. This has been a contributor to a major downturn in sales and operating cash flow in the fourth quarter. In light of Osage's inability to show a profit, its capital providers have been reluctant to continue to invest additional capital or fulfill their capital commitments. Currently, Osage does not have the cash availability to meet critical payments to maintain its operations independently. "The proposed sale to Pomeroy should permit the business of Osage to continue and develop as part of Pomeroy while providing the greatest value to Osage stakeholders," commented Phil Carter, chief executive officer of Osage. This transaction will take place under the provisions of bankruptcy laws. Osage has engaged Hodgson Russ LLP as bankruptcy counsel to advise on all creditor issues. About Osage Osage Systems Group (http://www.osage.com)designs, implements and supports eBusiness solutions for the Networked Economy(TM). With a comprehensive and fully integrated set of eBusiness capabilities, Osage strategically links infrastructure, integration, information, and intelligence. Osage partners, including Sun Microsystems, Cisco, Veritas, and Oracle, provide the industry-leading technologies that help shape Osage solutions, enabling customers to achieve a powerful Internet presence. Osage is the intelligent path for business leaders to follow in order to achieve optimum results in the robust, web- centered environment. OWENS-CORNING: Bonded Judgment Creditor Seeks Relief from Stay -------------------------------------------------------------- Alice Meinert, a creditor holding a bonded judgment against Debtor Owens Corning, asks the Bankruptcy Court to terminate the automatic stay and allow her to prosecute an appeal which Owens Corning has taken from her judgment against it. Mrs. Meinert's husband died in 1991 from a form of cancer caused by exposure to asbestos. Mrs. Meinert filed suit in District Court in Dallas County, Texas, against Owens Corning and other defendants, alleging that her husband's illness was caused by his exposure to asbestos-containing products manufactured by the various defendants. After settling with all of the other defendants, the case proceeded to trial against Owens Corning. The trial jury returned a verdict in favor of Mrs. Meinert and the trial court rendered judgment on the verdict for $3,788,000 in compensatory damages, $1,000,000 in punitive damages, and $63,099 in prejudgment interest and postjudgment interest until the judgment is paid at the statutory rate of 12%. Owens Corning posted a supersedeas bond in the amount of $5,578,764 through Continental Casualty Company to stay execution of the judgment pending appeal to the Court of Appeals for the Fifth District in Texas. Subsequently Owens supplemented this bond with an "increase rider" that increased security for the judgment to $6,015,363 to reflect postjudgment interest that had accumulated. Owens filed a second supplement increasing the bond amount to $6,450,231.70, and a third supplement increasing it to $6,815,444.82. The case has been presented in oral argument to the Court of Appeals in June, 2000; however, no opinion has been issued. Noting that the automatic stay of creditor action attendant upon the filing of a petition in bankruptcy stays all judicial proceedings against a debtor, including appeals prosecuted by the debtor from judgments against the debtor, Mrs. Meinert, through her attorney Brett M. Rosenthal of the Dallas, Texas, firm of Baron & Budd have asked that Judge Walrath terminate the bankruptcy stay to permit the appeal to continue to conclusion. (Owens-Corning Bankruptcy News, Issue No. 7, Bankruptcy Creditors' Service, Inc., 609/392-0900) PILLOWTEX: Establishes Interim Professional Compensation Protocol ----------------------------------------------------------------- Pillowtex has filed a Motion seeking judicial approval of a plan for establishing procedures for interim compensation and reimbursement of expenses for the various professionals employed by the Chapter 11 estates. On November 15, 2000, the Debtors filed applications to retain Jones, Day, Reavis & Pogue as lead counsel, and Morris, Nichols, Arsht & Tunnell as local counsel. The Debtors have also sought authority to employ E&Y Capital Advisors LLC as financial advisors; KPMG LLP as independent auditors and tax, accounting, and compensation advisors, and Arthur Andersen LLP as business consultants. The Debtors anticipate that, as these cases progress, they may need to retain other professionals in connection with their reorganization efforts. In addition, a statutory committee of unsecured creditors has been appointed and the Debtors anticipate that the committee will retain counsel and possibly other professionals to assist it in fulfilling its obligations in these cases. The Debtors have therefore requested entry of an order authorizing and establishing procedures for the compensation and reimbursement of court-approved professionals on a monthly basis. Such a procedure will streamline the professional compensation process and enable the Court and all other parties to monitor the professional fees incurred in these Chapter 11 cases more effectively. Specifically, the Debtors proposed that, except as otherwise provided in an order of the court authorizing the retention of a particular professional, the professionals be permitted to seek interim payment of compensation and reimbursement of expenses in accordance with the following procedures: No earlier than the 25th day of each calendar month, each Professional seeking interim compensation shall file an application for interim approval and allowance of compensation for services rendered and reimbursement of expense incurred during the immediately preceding month, and serve a copy of such fee application on the Debtors, counsel to the Debtors, the Office of the United States Trustee, counsel to the Creditors' Committee, counsel to any other official committee appointed in these cases, and counsel to the Debtors' proposed postpetition lenders. All fee applications will comply with the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, applicable Third Circuit law, and the Local Rules of this Court. Each Noticed Party will have twenty days after service of a fee application to object thereto. Upon the expiration of the objection deadline, the professional may file a certificate of no objection with the Court after which the Debtors are authorized to pay each professional an amount equal to the lesser of (i) 80% of the fees and 100% of the expenses required in the fee application; and (ii) 80% of the fees and 100% of the expenses not subject to an objection. If any Noticed Party objects to a professional's fee application, it must file with the Court and serve on the affected professional and each of the Noticed Parties a written objection, which must be filed with the Court and received by the affected Professional and the Noticed Parties on or before the Objection Deadline. Thereafter, the objecting party and the affected professional may attempt to resolve the objection on a consensual basis. If the parties are unable to reach a resolution of the objection within twenty days after service of the objection, the affected professional may either: (i) file the Objection with the Court, together with a request for payment of the difference, if any, between the Maximum Interim Payment and the Actual Interim Payment made to the affected professional; or (ii) forego payment of that amount until the next interim or final fee application hearing, at which time the Court will consider and dispose of the Objection if requested by the parties. Professionals will be required to submit their initial fee application on or before January 25, 2001. This initial fee application will cover the period from the Petition Date through and including December 31, 2000. At three-month intervals, each of the professionals must file with the court and serve on the Noticed Parties a request for interim Court approval and allowance of the compensation and reimbursement of expenses sought in the fee applications filed during the interim fee period. The Interim Fee Application Request must include a summary of the Fee Applications that are the subject of the request and any other information requested by the Court or required by the local rules. Each Professional must file its Interim Fee Application Request within 45 days after the end of the Interim Fee Period for which the request seeks allowance of fees and reimbursement of expenses. Each professional must file its first Interim Fee Application Request on or before April 16, 2001, and the first Interim Fee Application Request should cover the Interim Fee Period from the Petition Date through and including February 28, 2001. Any professional that fails to file an Interim Fee Application Request when due will be ineligible to receive further interim payment of fees or expenses under the compensation procedures until such time as a further Interim Fee Application Request is submitted by the professional. The Debtors shall request that the court schedule a hearing on the Interim Fee Applications at least once every six months, or at such other intervals as the Court deems appropriate. The pendency of an objection to payment of compensation or reimbursement of expenses will not disqualify a professional from the future payment of compensation or reimbursement of expenses under these compensation procedures. Neither (i) the payment of or the failure to pay, in whole or in part, monthly interim compensation and reimbursement of expenses under these compensation procedures, nor (ii) the filing of or failure to file an objection will bind any party in interest or the Court with respect to the allowance of applications for compensation and reimbursement of expenses of professionals. All fees and expense paid to professionals under the compensation procedures are subject to disgorgement until final allowance by the Court. The Debtors further requested that each member of the Creditors' Committee be permitted to submit statements of expense (excluding committee member counsel expense) and supporting vouchers to counsel to the Creditors' Committee, which will collect and submit the Creditors' Committee members' requests for reimbursement in accordance with the compensation procedure. (Pillowtex Bankruptcy News, Issue No. 3, Bankruptcy Creditors' Service, Inc., 609/392- 0900) SAFETY-KLEEN: Ryder Moves for Assumption of 287 Truck Leases ------------------------------------------------------------ Through its attorney David Carickhoff, Jr., and John T. Carroll, III, of the Wilmington, Delaware, firm of Cozen and O'Connor, Ryder Truck Rental, Inc., has brought a Motion seeking Judge Walsh's Order compelling Safety-Kleen to assume or reject 287 Truck Lease and Service Agreements with Ryder. Prior to the Petition Date, Ryder claimed that the Debtors had accumulated $946,697.38 in unpaid truck lease charges, which remain unpaid. Post-petition obligations have been paid as due, but the Debtors have not assumed or rejected the Leases, nor paid any part of the pre-petition obligation. Concurrently, Ryder filed a Motion seeking relief from the bankruptcy stay to setoff certain monies in its possession against the pre-petition obligations, which would reduce the liability to $251,624.16. If the Debtors rejected the Leases, Ryder would be damaged to the extent of the pre- petition obligation, any unpaid post-petition obligation, and would be entitled to lease termination damages in the amount of $4,919,534.13. Ryder has asked Judge Walsh to order Safety-Kleen to post a cash bond equal to one month's charges under the lease, or $650,000, and to order continued payment of all post-petition amounts due, and to grant Ryder the immediate right to repossess the vehicles in the event that the bond is not posted in the amount stated. The necessity of Ryder's tracking the actual position of each vehicle, together with the Debtors' pre-petition default, are cited by Ryder as support for the bond requirement. (Safety-Kleen Bankruptcy News, Issue No. 12, Bankruptcy Creditors' Service, Inc., 609/392-0900) STROUDS INC: Appoints Tom Paccioretti as President and CEO ---------------------------------------------------------- Strouds, Inc. appointed Thomas S. Paccioretti as President and Chief Executive Officer, effective December 1, 2000. Mr. Paccioretti succeeds John P. Brincko, who had been Interim President and Chief Executive Officer since September 2000. Mr. Brincko and international management consulting firm Brincko Associates, Inc. will continue as financial advisors to the Company. Mr. Paccioretti, 45, a Certified Turnaround Professional (CTP), has been actively involved in the direction and operation of Strouds since the Company began its voluntary restructuring under Chapter 11 on September 7, 2000. A Senior Vice President of Brincko Associates, which advises financially troubled companies and their investors, Mr. Paccioretti has more than 12 years of experience in crisis management, interim management and reorganization engagements. He has assumed senior management positions in turnaround situations within a variety of industries including retail, distribution, insurance, hospitality, construction, computer software and agriculture. Recent assignments include Interim CEO of Sullivan Kelly Associates and senior positions at Barneys New York, Mossimo, Inc., Calcomp/A Lockheed Martin Company, Progressive Dairies, Inc. and GENISCO. "Tom Paccioretti brings to this position an extensive background in corporate turnarounds and retail management, and we look forward to the benefits of his expertise as Strouds moves forward in the next critical phase of its voluntary restructuring under Chapter 11," said Bill Stroud, chairman and founder of Strouds. Strouds, Inc., the Linen Experts(R), is a specialty retailer of bed, bath, tabletop and other home textile products. The Company currently operates 70 stores in five states and also markets its home products through its Web sites, http://www.linenexperts.com and http://www.strouds.com. SUN HEALTHCARE: Stipulation Allows Insured Claim To Proceed ----------------------------------------------------------- Sun Healthcare consents to lift the automatic stay to permit the representative of James Steinhauer to file and serve a complaint on Sun and to permit the prosecution and defense of the State Court Action (whether filed in Federal or State Court) in connection with James Steinhauer's allegedly sustained injuries at Retirement Care Associates, Inc. d/b/a Orlando Health Care Center. Ronald Steinhauer, as next friend and legal guardian of James Steinhauer filed suit against Sun in the Circuit Court of the Ninth Judicial Circuit in and for Orange County, Florida (Case No. C1000-5257 Div 33). The parties agree that Claimant may enforce settlement or disposition in the court action to the extent such claims are covered by proceeds from any applicable Sun liability insurance policies and shall be entitled to assert a general unsecured claim in the Bankruptcy Court for such amount of the self-insured retention obligation of Sun, but Claimant shall not enforce to collect any amount from Sun, Sun's current and former employees, officers and directors, or any person indemnified by Sun or listed as an additional insured under any of Sun's Liability policies. Judge Walrath has given her stamp of approval to the agreement. (Sun Healthcare Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 609/392-0900) TEARDROP GOLF: Bids for Assets to Begin at $18.6 Million -------------------=------------------------------------ TearDrop(R) Golf Company (NASDAQ SC Symbol:TDRP) said that a hearing was scheduled on January 10 at 12:30 p.m. in the United States District Court for the District of Delaware in Wilmington, Delaware to approve the sale of substantially all of TearDrop's assets. A bid of $18 million has been entered by Gen-X Sport, Inc. The opening bid for interested bidders will begin at $18.6 million. Competitive bidders are invited to submit competing bid proposals, provided the terms of the offer are higher or more favorable to TearDrop and exceed the minimum bid requirement as approved by the court. Information may be obtained by contacting Charles Vihon, Esq., Arnstein & Lehr, 120 South Riverside Plaza, Chicago, IL 60606, Telephone 312-876-7100, Facsimile 312-876-0288. Those interested in participating in the bidding procedure must made their interest known no later than 5:00 p.m. Central Standard Time, January 15, 2001. All competing bids shall be submitted in writing and filed with the bankruptcy court, and served upon TearDrop, Congress Financial Corporation and counsel for the Creditors' Committee, no later than 5:00 p.m. Eastern Standard Time on January 17, 2001. Service lists can be obtained upon request. About TearDrop Golf Company The TearDrop(R) Golf Company (http://www.teardropgolf.com)isthe leading manufacturer of premium putters using ROLL-FACE(TM) Technology. TearDrop's wholly owned subsidiaries, Tommy Armour(R) Golf (http://www.armourgolf.com)and RAM(R) Golf (http://www.ramgolf.com),are two of the world's finest manufacturers of golf clubs and accessories. TWA: Fitch Says Filing May Impact Aircraft Lease Securitizations ---------------------------------------------------------------- The TWA bankruptcy filing is one part of American Airlines' plan to acquire the airline, and may lead to a renegotiation of certain TWA aircraft leases. TWA is an obligor in seven different aircraft operating lease pool securitizations rated by Fitch. As a percentage of initial appraised value, the aircraft leased by the airline place TWA among the top five obligors in the first four of the seven transactions listed. The aircraft in all transactions consist of recently manufactured, stage III noise compliant, Boeing or McDonnell Douglas commercial jet aircraft. Ranked by percentage of initial appraised value, the exposures to TWA leased aircraft in each of these seven securitizations are set forth below: -- 1. Pegasus Aviation Lease Securitization, series 1999-1 (top obligor in the pool and 16% of initial appraised value) -- 2. Pegasus Aviation Lease Securitization II, series 2000-1 (10.7% of initial appraised value) -- 3. Embarcadero Aircraft Securitization Trust, series 2000-1 (9.7% of initial appraised value) -- 4. Morgan Stanley Aircraft Finance (5.3% of initial appraised value) -- 5. AerCo Limited (3.3% of initial appraised value) -- 6. Aviation Capital Group Trust, series 2000-1 (2.1% of initial appraised value) -- 7. Airplanes Pass Through Trust (50 basis points of initial appraised value) Fitch is concerned that the rejection of certain TWA leases or the renegotiation of terms on certain TWA leases by American Airlines may adversely affect the cashflows available to the noteholders in the above mentioned securitizations. As a part of the cashflow stress scenarios run during the rating process, Fitch applies a level of lease payment reductions to address situations such as this. Fitch is currently monitoring the developments concerning this proposed acquisition, however, the actual impact of any potential lease renegotiations may not be known for several months. USA BIOMASS: Delisted from Nasdaq Smallcap Market ------------------------------------------------- Bell Gargens, Calif.-based USA Biomass Corp, a waste management firm which filed for bankruptcy protection on December 8, 2000 has been delisted from the Nasdaq Smallcap Market, Reuters reports. Last year, Nasdaq said that the company was not able to meet the required income and market capitalization. VENCOR: Proposes 16th Amendment to DIP Credit Agreement ------------------------------------------------------- Vencor seeks the Court's approval of the extension and sixteenth amendment of the DIP Credit Agreement dated September 13, 2000 which provides that: (1) The Stated Maturity Date of the Loans under the DIP Credit Agreement is extended from January 31, 2001 to March 31, 2001; (2) The time period within which the Debtors would be obliged to file with the Court a joint plan of reorganization and disclosure statement and an appropriate motion requesting the confirmation and consummation of the Plan, all in form and substance satisfactory to the Required Lenders, is extended to March 31, 2001; (3) The definition of "Borrowing Base" is amended to add borrowing Base levels for February 2001 and March 2001 of $47,793,095 (the level of the Tranche A Commitments on or about January 2, 2001, taking account of Commitment reductions to date primarily in connection with Asset Sales); (4) Section 2.05(a) of the DIP Credit Agreement is amended to extend the deadline for issuances of letters of credit to January 31, 2001; (5) Section 5.01(b) of the DIP Credit Agreement is amended to provide deadlines for the delivery by Vencor of financial statements and related information for January, February and March 2001; (6) The Cash Plan Supplement for February 2001 and March 2001 s approved; (7) The financial covenants set forth in Sections 6.01, 6.03 and 6.06 of the DIP Credit Agreement (which deal with Consolidated EBITDAR, Hospital Daily Census and Consolidated Capital Expenditures) are amended to provide test figures for February 2001 and March 2001; (8) The Debtors will pay to the DIP Agent an amendment fee in the aggregate amount of $100,000; and (9) A new clause is added to Section 7.02 of the DIP Credit Agreement: -- "Liens created in favor of PNC Bank, N.A., pursuant to the deposit Account Control Agreement by and among Vencor, PNC Bank, N.A., and the Collateral Agent." The Debtors submit that the Sixteenth Amendment has been negotiated at arms' length and in good faith. The Debtors believe that the Sixteenth Amendment and the proposed Amendment Fee are in the best interests of the Debtors and their estates and should be approved by the Court. (Vencor Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 609/392-0900) VLASIC FOODS: May Sell Pickle Business to H.J. Heinz Co. -------------------------------------------------------- H.J. Heinz Co. is negotiating to buy Vlasic Foods International's pickle business, days before Vlasic's creditors are expected to force the company to file for bankruptcy protection. Vlasic is expected to fetch about $250 million and Heinz is one of several suitors speaking to Vlasic about its pickle line. A deal could be announced by the end of the month. Vlasic - burdened by a $500 million debt load - is facing insolvency by the end of the month after missing a $10 million debt payment on Dec. 28, 2000, and receiving a grace period until Jan. 30. Besides its condiment business, Vlasic also markets the Swanson frozen food brand and has an international line. At least one analyst says Vlasic would not be a good investment for Heinz. "I could probably think of better uses of that money," said Jaine Mehring, an analyst at Salomon Smith Barney Inc. "The pickle business is one more thing where they are going to have to prove something, and they have enough of those brands."(ABI 11- Jan-2001) WASTE SYSTEMS: Files for Chapter 11 Reorganization -------------------------------------------------- Waste Systems International, Inc. (NASDAQ: WSII) and each of its 30 subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U. S. Bankruptcy Code. WSI will continue to operate its business while it seeks to reorganize under Chapter 11. The petitions were filed in U. S. Bankruptcy Court in Wilmington, Delaware on January 11, 2001. Following a review by its Board of Directors of the available alternatives, the Company determined that a Chapter 11 reorganization is in the best long- term interests of the Company and its stakeholders. "We expect that Chapter 11 will provide the Company with the opportunity to address its financial and capital structure challenges in an orderly and comprehensive fashion," said John Boyer, the Company's President and Chief Executive Officer. "The Company has arranged debtor in possession financing that we expect will provide the Company with sufficient funding to meet the expenses of running our business during the Chapter 11 proceedings. We need to deleverage the Company, and believe that Chapter 11 is the appropriate venue to seek to do that. We look forward to emerging from Chapter 11 as a stronger, more focused player in the waste management industry." Under Chapter 11, a company is protected from its creditors while it continues to operate its business and to negotiate a repayment plan. Waste Systems International is a fully integrated non- hazardous solid waste management company that provides solid waste collection, recycling, transfer and disposal services to commercial, industrial, residential and municipal customers within certain regional markets in Vermont, New Hampshire, Massachusetts, New York, Pennsylvania, and the Baltimore/Washington, D.C. area. WASTE SYSTEMS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Waste Systems International, Inc. 420 Bedford Street, Suite 300 Lexington, MA 02420 Debtor Affiliates: WSI Medical Waste Systems, Inc. WSI New York Holdings, Inc. WSI of New York,Inc. WSI Camden Transfer Station, Inc. Palmer Resource Recovery Corporation WSI Vermont Holdings, Inc. WSI Moretown Landfill, Inc. WSI of Vermont,Inc. WSI Burlington Transfer Station,Inc. WSI St. Johnsbury Transfer Station, Inc. WSI Waitsfield Transfer Station, Inc. WSI Massachusetts Holdings, Inc. Waste Systems International of Massachusetts Hauling,Inc. Waste Systems International of South Hadley, Inc. Waste Systems International Oxford Transfer Station,Inc. Waste Systems International Massachusetts Recycling, Inc. Waste Systems International Lynn Transfer Station, Inc. Spartan Consolidated, Inc. Sterling Packaging, Inc. WSI Pennsylvania Holdings, Inc. WSI Sandy Run Landfill, Inc. WSI Altoona Hauling, Inc. Mostoller Landfill, Inc. WSI Somerset Hauling, Inc. Community Refuse Service, Inc. WSI Harrisburg Hauling, Inc. WSI Mifflin County Landfill, Inc. WSI Maryland Holdings, Inc. Eastern Trans-Waste of Maryland, Inc. WSI Maryland Mauling, Inc. Type of Business: Solid waste collection, recycling, transfer and disposal services to commercial, industrial, residential and municipal customers. Chapter 11 Petition Date: January 11, 2001 Court: District of Delaware Bankruptcy Case No.: 01-00099 Debtor's Counsel: Scott D. Cousins, Esq. Greenberg Traurig, LLP 222 Delaware Ave. 15th Floor Wilmington, DE 19801 (302) 655-4880 and Daniel C. Cohn, Esq. Cohn & Kelakos LLP 101 Arch Street Boston, Massachusetts 02110 Telephone: 617-951-2505 Telecopier: 617-951-0679 Debtors' Financial Advisor: Peter S. Kaufman Gordian Group 500 Park Ave. New York, NY 10022 Total Assets: $202,415,070 Total Debts: $167,004,357 List of Debtor's 20 Largest Unsecured Creditors: Creditor Nature of Claim Claim Amount -------- --------------- ------------ Goldman, Sachs & Co. Noteholder - 11.5% $32,500,000 Contact: Patricia Baldwin 1 New York Plaza, 45th Floor New York, NY 10004 Tel: 212-902-8244 Fax: 212-902-1431 Bank of New York Noteholder - 11.5% $25,185,000 Contact: Cecile Lamarco 925 Patterson Plank Road Secaucus, NJ 07094 Tel: 201-319-3066 Fax: 201-319-3073 Morgan Stanley & Co. Noteholder - 11.5% $15,000,000 Incorporated Contact: Launa McAfee One Pierrepoint Plaza 7th Floor Brooklyn, NY 11201 Tel: 718-754-5266 Fax: 718-754-4291 Credit Suisse Asset Noteholder - 11.5% $4,400,000 Management Contact: Rich Lindquist 466 Lexington Avenue New York, NY 10017 Tel: 212-875-3500 Fax: 646-658-0728 Citibank, N.A. Noteholder - 11.5% $2,450,000 Contact: Marta Hoosain 3800 Citicorp Center Tampa Tampa, FL 33610-9122 Tel: 813-604-1190 Fax: 813-604-1155 ING Barings, LLC Noteholder - 11.5% $2,000,000 Corp. Actions Department Contact: Peter Russomondo 350 Park Avenue 2nd Floor New York, NY 10022 Tel: 212-409-0204 Fax: 212-409-0296 Waste Management, Inc. Disposal Vendor $1,940,000 Contact: Lee Solheid 4 Liberty Lane West Hampton, NH 03842 Tel: 603-929-3000 Fax: 603-929-3139 Boston Safe Deposit Noteholder - 11.5% $1,265,000 and Trust Company Contact: Constance Holloway c/o Mellon Bank, NA Center, Global Corp. Action Unit Room 153-3015 Pittsburgh, PA 15259 Tel: 412-234-2929 Fax: 412-234-7244 State Street Bank & Noteholder - 11.5% $1,095,000 Trust Company Contact: Joseph J. Callahan JAB 5NW 1776 Heritage Drive North Quincy, MA 02171 Tel: 617-985-6453 Fax: 617-537-5004 FUND-Phila. Main Noteholder - 11.5% $905,000 Contact: Marge Rozelle 123 South Road Street Philadelphia, PA 19106 Tel: 215-670-4622 National Earth Contractor $754,000 Products, Inc. Contact: Charles Gearhardt 245 Butler Avenue Lancaster, PA 17601 Tel: 717-390-9892 Fax: 717-390-9896 Investors Fiduciary Noteholder - 11.5% $750,000 Trust Company/SSB Contact: Joseph J. Callahan 1776 Heritage Drive Global Corporate Action, Unit JAB SNW No. Quincy, MA 02171 Tel: 617-985-6453 Fax: 617-537-5004 Firstar Bank, N.A. Noteholder - 11.5% $550,000 Contact: Carolyn Holt 425 Walnut Street Location CN-WM-06CT Cincinnati, OH 45201 Tel: 513-623-4450 Fax: 513-287-8372 Terry Hastings Lawsuit Settlement $550,000 337 Pakachoag Street Auburn, MA 01501 Tel: 508-873-4188 Fax: 508-791-1201 John Hastings 25 Wayside Road Westborough, MA 01581 Tel: 617-538-4219 Fax: 508-791-1201 Bankers Trust Noteholder - 11.5% $525,000 Company Contact: John Lasher C/o BT Services Tennessee, Inc. 648 Grassmere Park Drive Nashville, TN 37211 Tel: 615-835-3410 Fax: 615-835-3409 Investors Bank & Noteholder - 11.5% $500,000 Trust Company Contact: Joanne Lowe 200 Clarendon St. 15th Floor Hancock Tower Boston, MA 02116 Tel: 617-330-6562 Fax: 617-330-6549 Swiss American Noteholder - 11.5% $450,000 Securities, Inc. Contact: Glenn Pizer 100 Wall Street New York, NY 10005 Tel: 212-612-8749 Fax: 212-612-8741 Valley Quarries, Inc. Contractor $376,594 Contact: Ron Diehl P.O. Box J. Chambergsburg, PA 172-0809 Tel: 717-267-2244 Fax: 717-267-2521 Chase Manhattan Bank Noteholder - 11.5% $375,000 Orma-Trim, Supervisor 4 New York Plaza, 13th Floor New York, NY 10004 Tel: 212-623-6174 Fax: 212-623-4821 CE Remediation, Inc. Contractor $365,544 Contact: Sam Crouse 400 Penn Center Blvd., Suite 600 Pittsburgh, PA 15235 Tel: 412-823-5200 Fax: 412-823-9234 WHEELING-PITTSBURGH: Noteholders' Tap Hahn Loeser as Local Counsel ------------------------------------------------------------------ Official Noteholders' Committee appointed in Wheeling-Pittsburgh's chapter 11 cases presents Judge Bodoh with an application for his approval of the Committee's employment of the firm of Hahn Loeser & Parks LLP as local counsel for the Committee, nunc pro tunc to the Petition Date. The following legal services will be provided by Hahn Loeser to the Noteholders' Committee: (a) Advise the Noteholders' Committee concerning its rights, powers and duties under the Bankruptcy Code; (b) Advise the Noteholders' Committee concerning the administration of these Chapter 11 cases; (c) Advise the Noteholders' Committee concerning any efforts by the Debtors or other parties to collect and to recover property for the benefit of the Debtors' estates; (d) Counsel the Noteholders' Committee in connection with the formulation and negotiation and confirmation of a plan of reorganization and the documents related thereto; (e) Review the nature, validity and priority of liens asserted against the property of the Debtors and advise the Noteholders' Committee concerning the enforceability of such liens; (f) Review the nature, validity and priority of liens asserted against the property of the Debtors and advise the Noteholders' Committee concerning the enforceability of such liens; (g) Prepare on behalf of the Noteholders' Committee all necessary and appropriate applications, motions, notices, draft orders and other pleadings, and review all financial and other reports filed in these Chapter 11 cases; (h) Advise the Noteholders' Committee concerning, and prepare responses to, applications, motions, pleadings, notices and other pleadings and papers that may be filed in these Chapter 11 cases; (i) Advise and assist the Noteholders' Committee in connection with any potential disposition of property of the Debtors' estates; (j) Advise the Noteholders' Committee concerning proposed executory contract and unexpired lease assumptions, assignments and rejections; (k) Assist the Noteholders' Committee in claims analysis and resolution matters; (l) Commence and conduct any and all litigation necessary or appropriate to assert rights on behalf of the Noteholders' Committee, or otherwise further the goals of the Noteholders' Committee in these Chapter 11 cases; and (m) Perform all other legal services for and on behalf of the Noteholders' Committee that may be necessary or appropriate to assist the Noteholders' Committee in satisfying its duties under section 1103 of the Bankruptcy Code Lee D. Powar, Esq., a partner in Hahn Loeser, avers that his firm is disinterested within the meaning of the Bankruptcy Code and neither represents nor holds any interest adverse to the Committee, the Debtors or these estates on the matters for which approval of employment is sought. However, Mr. Powar discloses that the firm currently represents The CIT Group/Business Credit, Inc. and Foothill Capital Corporation, post-petition lenders to the Debtors, and The Chase Manhattan Bank, a prepetition lender to the Debtors, in matters unrelated to these Chapter 11 cases. These entities have provided the firm with written waivers concerning the firm's representation of creditors, including the Noteholders' Committee, in these Chapter 11 cases. The firm has also fully disclosed its representation of CIT, Foothill and Chase to the Noteholders' Committee and has informed the Noteholders' Committee that it would not commence on behalf of the Noteholders' Committee any adversary proceeding in which any of them is an adverse party. Mr. Powar further discloses that the firm represents PricewaterhouseCoopers LLP, one of the financial advisors to the Debtors, in a litigation matter, and in connection with alleged malpractice claims. The firm has worked with the Debtors' claims and noticing agent, Poorman-Douglas Corporation, in a Chapter 11 case in Pennsylvania, and with Stroock, Stroock & Lavan in a Chapter 11 proceeding in the Southern District of New York. The firm also provides a variety of services to American Electric Power, a creditor of the Debtors, and to BP Energy Company, another of the Debtors' creditors. The firm has previously performed legal services for Bank One Investment Management Group, an affiliate of Bank One NA. In each instance, these representations and relationships were not adverse to the estate on the matters for which employment is sought. The current hourly rates charged by those Hahn Loeser professionals and paraprofessionals who are anticipated to render a majority of the services to the Noteholders' Committee and their hourly rates are as follows: Partners: Lee D. Powar $ 395 Lawrence E. Oscar $ 290 Jean R. Robertson $ 210 Associates: Jeffrey M. Levinson $ 210 Michael B. Shuster $ 175 Julie L. Kaplan $ 150 Paralegals: Colleen M. Beitel $ 130 Joy H. King $ 120 Cheryl A. Sweeney $ 65 The anticipated range of hourly rates for attorneys and paraprofessionals at Hahn Loeser commencing January 1, 2001, is $230 to $415 for partners; $220 to $245 for of counsel; $135 to $210 for associates; and $80 to $135 for paraprofessionals. These rates are subject to change. (Wheeling-Pittsburgh Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900) WORLD CHAMPIONSHIP: Fusient Buys Money-Losing Wrestling Business ---------------------------------------------------------------- Fusient Media Ventures, an integrated media company that invests in high-potential, branded media properties, has entered into an agreement with Turner Broadcasting System, Inc. (TBS, Inc) to acquire the business of World Championship Wrestling (WCW), an industry leader in live action-based entertainment. Following the acquisition, TBS, Inc. will retain a minority interest in the WCW business and long-term programming rights. The proposed acquisition marks the return of Classic Sports Network founders Brian Bedol and Stephen Greenberg to the cable arena and the return of former WCW president Eric Bischoff to the world of professional wrestling. Celebrated for successfully building an entrepreneurial-based cable network, which they later sold to ESPN, Bedol and Greenberg went on to found Fusient Media Ventures. Fusient will take over all day-to-day operations of WCW, with Bedol as the new CEO. Bischoff, who helped build the WCW franchise into a ratings powerhouse during the mid-90s, will assume the role of president. The partnership of Bedol, Greenberg and Bischoff brings together more than 50 years of combined experience in the entertainment, television and sports industries. "We're going to reestablish the WCW as the champion of professional wrestling entertainment," said Brian Bedol, chief executive officer of WCW Incorporated. "There is huge untapped potential for the franchise and with Eric Bischoff on board we will crank everything up to make the WCW franchise even bigger, better, stronger and more entertaining than anything wrestling fans have ever experienced before." "We are pleased to have reached an agreement with Fusient Media Ventures that truly represents a win for all parties," said Bradley J. Siegel, president of general entertainment networks, TBS, Inc. "The Fusient management team's experience in programming, production and marketing at Classic Sports Network lends itself perfectly to the WCW business. Their entrepreneurial business-building expertise, combined with the powerhouse brands and distribution that TBS Superstation and TNT provide, will be a winning combination." The broad-based WCW franchise includes WCW Monday Nitro Live (TNT), one of the most popular programs on cable television; WCW Thunder (TBS Superstation), one of the network's most watched programs; WCW Worldwide, seen in syndication in 94% of the country; and 12 monthly pay-per-view specials that consistently are among the industry's top sellers. "Wrestling fans can rest assured that we will give the WCW the adrenaline shot it needs to once again become the most exciting brand of wrestling in the world," said Eric Bischoff. Bischoff began his career with the WCW in the early 1990s as an on-air announcer and rose through the ranks to become president of the company. Under his leadership, WCW became the top-rated wrestling franchise on television, an accomplishment that lasted for 96 weeks. About World Championship Wrestling World Championship Wrestling (WCW), a division of Turner Broadcasting System, Inc., is an industry leader in creating live action-based entertainment for millions of enthusiastic fans each week. About Fusient Media Ventures Fusient Media Ventures is focused on identifying, funding, developing and distributing next generation content and converged media brands. The company is headquartered in New York, with offices in Los Angeles. ZENITH ELECTRONICS: TMA Honors Successful Turnaround Team --------------------------------------------------------- When Zenith Electronics Corporation, America's last fully integrated TV manufacturer, faced $500 million of debt and an operating loss of almost $300 million late in 1997, it called on a team of well-known restructuring practitioners. Their plan resulted in Zenith's trimming its operating loss to $5.1 million in 1999 while maintaining a revenue level of about $1billion, and Zenith's successful emergence from Chapter 11 on Nov. 5, 1999. The new Zenith is a consumer electronics leader focusing on brand, distribution and technology and well positioned to participate in the TV industry's transition to digital TV and HDTV by sourcing product from companies such as its parent, LG Electronics. This Chicago-based team will be honored with the Chicago/Midwest Chapter of Turnaround Management Association (TMA) "Most Effective Restructure of a Company within a Chapter 11 Reorganization" Award at a breakfast forum Friday, Jan. 12 at 7:45 a.m. at the Mid-Day Club in Bank One Plaza, 10 South Dearborn, 56th Floor, Chicago. Panelists from the team will speak at 8:15 a.m. on how they overcome the legal challenges and opposition in carrying out a prepackaged plan that called for eliminating all of its publicly held common stock. The speakers include: -- Duncan Bourne, senior associate, and James A. Mesterharm, principal, at Jay Alix & Associates, a turnaround management firm -- Matthew N. Kleiman, Partner, at Kirkland & Ellis, a legal firm -- Thomas Halsch, vice president/senior transactor, from Citibank Structured Products Group Other members of the turnaround team include Bob Dangremond and Jan Ciancanelli from Jay Alix & Associates and Jamie Sprayregen from Kirkland & Ellis. The Chicago/Midwest Chapter, with nearly 400 members, is one of the largest TMA chapters. The Turnaround Management Association (http://www.turnaround.org),headquartered in Chicago, is the only international nonprofit association dedicated to the development of a stronger economy through corporate renewal. TMA has 32 chapters worldwide, with a membership of 4,100, who include financial advisors, turnaround managers, lenders, attorneys, and judicial and government personnel who participate in corporate financial turnarounds and restructuring. * Bond pricing for the week of January 16, 2001 ---------------------------------------------- Following are indicated prices for selected issues: AMC Ent 9 1/2 '09 66 - 69 Amresco 9 7/8 '05 54 - 56 Asia Pulp & Paper 11 3/4 '05 36 - 38 Chiquita 9 5/8 '04 48 - 50 Conseco 9 '06 82 - 84 Federal Mogul 7 1/2 '04 29 - 31 Globalstar 11 3/8 '04 10 - 12 Oakwood Homes 7 7/8 '04 35 - 38 Owens Corning 7 1/2 '05 26 - 28(f) PSI Net 11 '09 33 - 36 Pacific G & E 6 1/4 '04 84 - 86 Revlon 8 5/8 '08 48 - 51 Saks 7 '04 77 - 79 Sterling Chemical 11 3/4 '06 50 - 52 Teligent 11 1/2 '07 16 - 18 Tenneco 11 5/8 '09 56 - 58 TWA 12 '02 77 - 80(f) ********* Bond pricing, appearing in each Monday's edition of the TCR, is provided by DLS Capital Partners in Dallas, Texas. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles available from Amazon.com -- go to http://www.amazon.com/exec/obidos/ASIN/189312214X/internetbankrupt -- or through your local bookstore. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group, Inc., Washington, DC USA. Debra Brennan, Yvonne L. Metzler, May Guangko, Aileen Quijano, Peter A. Chapman, Editors. Copyright 2001. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $575 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. *** End of Transmission ***