/raid1/www/Hosts/bankrupt/TCR_Public/010411.MBX
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, April 11, 2001, Vol. 5, No. 71
Headlines
AMERICAN ARCHITECTURAL: Bankruptcy Delays Form 10-K Filing
AMERICAN COMMERCIAL: Losses Trigger Moody's Ratings Downgrade
ARMSTRONG HOLDINGS: Hires Kasowitz as Property Damage Counsel
ARMSTRONG HOLDINGS: President & CEO Resigning April 30
BANYAN STRATEGIC: Amends Sale Agreement With Denholtz Management
BRIDGE INFORMATION: Reuters Considers Bid for Certain Assets
C1 COMMUNICATION: Ontario Court Grants Protection from Creditors
CPSC: Penn Octane Gets Remaining 50% of Pipelines & Facilities
DANKA BUSINESS: Selling DSI To Pitney Bowes For $290 Mil in Cash
DEAN FOODS: Fitch Places Senior Notes & CP Ratings On Watch
EVERGREEN FUNDING: Moody's Cuts Ratings On 3 Classes of Notes
FACTORY CARD: Secures $10 Million Exit Financing Facility
FRUIT OF THE LOOM: Asks To Extend Solicitation Period To Sept 28
FRUIT OF THE LOOM: Files Lawsuit Against Gildan Activewear
GENESIS HEALTH: Judge Wizmur Proposes Appointing a Fee Examiner
HARNISCHFEGER: Names Post-Emergence Directors & Officers Slate
HEDSTROM CORP: Banks See 83% Recovery & Pennies to Unsecureds
ICG COMMUNICATIONS: Assumes KMC Telecom Lease for PRI Circuits
IMPERIAL SUGAR: Unsecured Creditors' Committee Appointments
INTEGRATED HEALTH: Extra Closet & Novacare Agree To Reject Lease
KMART CORPORATION: Shareholders to Convene on May 15 in Detroit
LOEWEN: Teamsters Request Rule 2004 Document Production
MAVESA: NYSE To Delist American Depositary Shares From Trading
MEGA MICRO: Completes Liquidation of Computer Retail Unit
NAZARETH LIVING: Fitch Places BBB- Bond Rating On Watch
NETWORK FOREST: Obtains Extension Of Time To Submit CCAA Plan
PACIFIC GAS: Court Okays Continued Use Of Current Business Forms
PILLOWTEX: Taps Stern Stewart & Co. As Strategic Consultants
RAYTHEON: Taking $275-325MM Charge in Q1 for Halted Operations
SERVICE MERCHANDISE: Eyes Bondholder Interest Payment Recovery
SHOWSCAN ENTERTAINMENT: Creditors Committee Objects to Financing
SOUTHERN CALIFORNIA: Agrees With State To Restore Finances
SOUTHWESTERN LIFE: Posts $4.8MM Net Loss In Fourth Quarter 2000
STELLAR FUNDING: Ratings On Class A-3, A-4 Notes Put On Watch
SUNTERRA CORPORATION: Engages Deloitte & Touche As Auditors
TELEGEN CORPORATION: Foresees $7 Million Net Loss For FY 2000
TRANS WORLD: American Airlines Completes Acquisition Of Assets
UNIVERSAL BROADBAND: Proposes Two-Key Employee Retention Program
US OFFICE: Judge Gives Final Nod On $25 Million DIP Loan Pact
W.R. GRACE: Names David B. Siegel as Chief Restructuring Officer
W.R. GRACE: Retains Kirkland & Ellis As Lead Counsel
* Meetings, Conferences and Seminars
*********
AMERICAN ARCHITECTURAL: Bankruptcy Delays Form 10-K Filing
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On December 18, 2000, American Architectural Products
Corporation filed for voluntary bankruptcy protection under
Chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court in the Northern District of Ohio.
Consequently, the Company has expended significant effort
accumulating and reporting information required by the
Bankruptcy Court, working on a plan of reorganization, and
determining the impact of the Bankruptcy filing on the company's
financial statements and disclosure requirements. This has
resulted in the delayed closing of the year-end 2000 financial
records for some of the Company's subsidiaries and operating
divisions. Therefore, the Company has been delayed in compiling
the information necessary for completing the audit of its
financial statements for 2000. The Company indicates it will
file its Annual Report on Form 10-K with the Securities &
Exchange Commission as promptly as possible following
finalization of its audited financial statements for 2000.
The Company expects to record in excess of $2 million of
reorganization costs directly related to the bankruptcy.
On February 23, 2001, the Company announced the shutdown of its
Ottawa, Ohio facility. The Company is in the process of
determining the accounting implications of this decision.
The Company is also determining the amount of impairment of any
long-lived assets, if any, as a result of the bankruptcy filing
and other recent events.
AMERICAN COMMERCIAL: Losses Trigger Moody's Ratings Downgrade
-------------------------------------------------------------
Poor operating performance resulting in substantial losses
prompted a ratings downgrade on several notes of American
Commercial Lines LLC.
About $9 million slipped out of the company's treasury as
operations last year slowed down due in part to mother nature's
refusal to cooperate with the company.
The company blamed some of its losses to low water levels and
unusual ice conditions on its U.S. transport routes, which
heavily impacted the company's 2000 fourth quarter balance
sheet. Adding to the woes were the higher fuel costs last year,
and the reduction in grain exports to Asia.
American Commercial operates some 5000 barges, providing
transportation throughout the inland United States and Gulf
Intracoastal Waterway Systems.
The following notes suffered downgrades from Moody's Investors
Service:
-- $535 million senior secured bank facility, to B1 from
Ba2
-- $300 million 10 1/4% senior unsecured notes, to B3 from
B1
-- Senior implied rating, to B2 from Ba3
-- Issuer rating, to Caa1 from B2
According to Moody's, the downgrade reflects the agency's
concern over the company's ability to meet revised covenants
under its secured credit facilities as well as its obligation on
its short-term debt.
"Opportunities to reduce debt will be constrained by large
interest and lease rent expense burden and the volatility in
operating results resulting primarily from fluctuations in grain
rates, fuel costs, and river conditions," Moody's noted.
Moody's said grain rates remain one of the more volatile
components of the company's revenue stream. The rating agency
cited that the import restrictions on corn by Japan and Korea
last year adversely affected shipping rates and continues to
impact the operation of American Commercial.
Furthermore, the reduction in grain prices prompted farmers to
store their supplies, hence reducing barge demand on key routes,
Moody's said.
Meanwhile, lower water levels restricted movement along
waterways and reduced the company's ability to tow a full load
of barges, reducing cost efficiency, and unusually severe ice
conditions reduced operations and increased maintenance costs
due to ice damage.
Based in Jeffersonville, Indiana, American Commercial Lines LLC
is the leading provider of river barge in the U.S. and the
Parana/Paraguay River system in South America.
ARMSTRONG HOLDINGS: Hires Kasowitz as Property Damage Counsel
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During the pendency of these cases, Armstrong Holdings, Inc.
will require the assistance of experienced outside counsel to
help preserve, protect, and enhance their estates in connection
with asbestos property damage and related issues, including
services to advise and to represent the Debtors in the
litigation of all asbestos property damage claims.
Kasowitz, Benson, Torres & Friedman, LLP, in New York, Newark,
New Jersey, and Houston, Texas, has served as one of the
Debtors' outside counsel since September, 1999. The prepetition
services that Kasowitz has rendered for the Debtors relate
directly to the preservation of the Debtors' estates and the
operation of the Debtors' business. Also, during those years,
the firm has developed a high level of legal expertise and
knowledge of the Debtors' businesses and potential claims that
may be asserted against the Debtors, and many close working
relationships with the Debtors' officers and employees relating
to asbestos property damage litigation.
Accordingly, Walter Gangl, an authorized officer of Armstrong
World Industries, on behalf of the Debtors, asked Judge Joseph
Farnan to authorize the employment of Kasowitz, Benson, Torres &
Friedman, LLP as special asbestos property damage counsel to the
Debtors.
The services of Kasowitz are necessary:
(a) To enable the Debtors to conduct their business during
their Chapter 11 cases in a lawful, efficient, and effective
manner;
(b) To defend and prosecute asbestos property damage
litigation other than that involving asbestos products personal
injury liability and to address other issues relating to
asbestos property damage litigation; and
(c) To advise, counsel, and represent the Debtors in
connection with asbestos property damage and related issues
including advising, counseling, and representing the Debtors in
the litigation of all alleged property damage claims.
Kasowitz will be entitled to receive compensation based on its
standard hourly rates. Kasowitz's current customary hourly rates
are:
Partners $625 to $400
Associates $400 to $125
Paraprofessionals $110 to $ 95
In 2000, Kasowitz received approximately $273,633 from the
Debtors for services rendered and expenses incurred in
connection with the prepetition services.
Marc Kasowitz, a member of Kasowitz, Benson, Torres & Friedman,
LLP, assured Judge Farnan that the firm does not hold or
represent any interest materially adverse to the Debtors, their
creditors or other parties-in-interest in matters upon which the
firm is to be engaged. Kasowitz has provided asbestos property
damage litigation services to the Debtors since September, 1999.
Mr. Kasowitz believes that such representation is not adverse to
the Debtors' best interests or the interests of their creditors.
However, in the interest of full disclosure, Marc Kasowitz
disclosed that through Kasowitz' conflict-of-interest database,
these relationships were identified:
(i) In matters unrelated to these bankruptcy cases, the
firm represented persons who are creditors or affiliates of the
Debtors' creditors such as Citibank, N.A., Marine Midland, and
Salomon Smith Barney, Inc.
(ii) Kasowitz does not currently represent but in the past
has represented, in matters wholly unrelated to these cases,
persons who are creditors of affiliates of the Debtors'
creditors: Chase Manhattan Bank, Merrill Lynch & Co., Inc., The
Bank of New York and Reliance National Insurance.
(iii) In matters wholly unrelated to these cases, Kasowitz is
representing, or in the past has represented these persons who
are principal underwriters, attorneys, and depositories in
certain transactions with the Debtors: Salomon Smith Barney,
Inc. and HSBC Securities, Inc.
(iv) In matters wholly unrelated to these cases, Kasowitz is
representing, or in the past has represented ArvinMeritor.
ArvinMeritor is an entity for which an officer or director of
the Debtors serves or served within the past three years as an
officer or director.
(v) In matters wholly unrelated to these cases, Kasowitz
represents, or has in the past represented, certain bankrupt
and/or non-bankrupt defendants named in asbestos litigation and
certain asbestos litigation trusts.
Mr. Kasowitz said that in light of the scope of Kasowitz'
proposed retention as special asbestos property damage counsel
for the Debtors, it is anticipated that no actual or potential
conflicts will arise as a result of these representations.
Kasowitz will, however, continue to provide professional
services to entities or persons that may be creditors, insurers,
or other parties- in-interest in these cases, provided that such
services do not relate to, or have any direct connection with
these cases. Mr. Kasowitz believes that such services on behalf
of the others will not impair the firm's ability to perform
fully and zealously the proposed professional services on behalf
of the Debtors. (Armstrong Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
ARMSTRONG HOLDINGS: President & CEO Resigning April 30
------------------------------------------------------
Armstrong Holdings, Inc. (NYSE: ACK) said that Marc R. Olivie,
47, president and CEO of Armstrong Floor Products, has announced
his resignation effective April 30 to join American Standard
Companies, Inc., a $7.6 billion company, as president of the
global plumbing sector of the business. American Standard is one
of the world's largest manufacturers of plumbing products with
sector sales last year of $1.8 billion.
Olivie had been promoted in October 2000 to his current
position. He joined Armstrong in 1996 as president, Worldwide
Building Products Operations, the ceiling segment of the
Armstrong businesses.
"Marc has made significant contributions to the vinyl flooring
operation in his short tenure," said chairman and CEO Michael D.
Lockhart. "Previously at Building Products, Marc ensured that
segment retained its vitality and continued to invest in new
products and productivity enhancements." He added, "This is a
wonderful opportunity at American Standard for Marc to run a
business which is nearly 50 percent larger than Armstrong's
vinyl flooring business, and it is an opportunity that will
allow him to leverage his international experience and
perspective."
Prior to joining Armstrong, Olivie was president of Sara Lee
Champion, Europe, based in Italy. Earlier in his career, Olivie
was vice president and general manager of Midas, Inc.'s European
operations and a consultant with McKinsey & Company, Inc.
Olivie, a native of Antwerp, Belgium, graduated from the
University of Antwerp with a degree in business management and
engineering. He is a member of the board of directors for the
Pennsylvania Academy of Music and OneBuild.com, and he also
serves on the board of trustees for the Eisenhower Exchange
Fellowships in Philadelphia.
"Marc brings a broad range of global business experience to our
company, having managed operations in the Americas, Asia,
Europe, and the Middle East," said Fred Poses, chairman and
chief executive officer of American Standard Companies Inc.
"That experience, coupled with a strong background in
manufacturing operations and marketing, makes him an ideal
leader for our global plumbing business."
American Standard Companies, Inc., headquartered in Piscataway,
N.J., is a global manufacturer with market leading positions in
three businesses: air conditioning systems under the Trane and
American Standard brands, automotive products including WABCO
electronic brakes, and plumbing products. American Standard
employs approximately 60,000 people.
Armstrong World Industries is a global leader in the design,
innovation and manufacture of interior finishing solutions, most
notably floors and ceilings. Based in Lancaster, Pa., Armstrong
has approximately 15,000 employees worldwide. In 2000,
Armstrong's net sales totaled more than $3 billion. Additional
information about the company can be found on the Internet at
www.armstrong.com.
BANYAN STRATEGIC: Amends Sale Agreement With Denholtz Management
----------------------------------------------------------------
Banyan Strategic Realty Trust (Nasdaq: BSRTS) has executed a
Second Amendment to the previously announced contract with
Denholtz Management Corporation for the sale of all of Banyan's
real estate assets. The amendment clarifies that the purchaser's
initial earnest money of $1.5 million is now non-refundable and
schedules the closing date for all but three properties on May
11, 2001, with an automatic extension to as late as June 11,
2001, if various lender requirements cannot be met by the
earlier date. Banyan expects to receive $185.5 million in gross
proceeds on the first closing date.
Of the three remaining properties, Banyan is permitted to sell
both its Riverport Property in Louisville, Kentucky and its
Northlake Festival Shopping Center in Atlanta, Georgia to third
parties or it may elect to "put" these properties to Denholtz at
agreed upon prices any time between the first closing and
January of 2002. The final property, University Square in
Huntsville, Alabama, remains subject to the contract of sale
with Denholtz. The closing for this property is scheduled for
December 19, 2001.
If Denholtz ultimately purchases the entire Banyan portfolio,
Banyan anticipates gross proceeds of $224 million, reflecting a
$2 million discount from the purchase price agreed to on January
8, 2001.
The amendment executed on April 9, 2001, further provides that
the purchaser's non-refundable earnest money deposit of
$1,500,000 will be increased to $2,250,000 on the date Denholtz
receives a firm commitment for financing, but not later than
April 30, 2001. Following the first closing, the sum of $1
million will remain in escrow to secure Denholtz' performance
under the deferred closings.
Banyan's interim president and CEO, Larry Schafran, commenting
on the Denholtz transaction, stated: "We are very pleased that
we have concluded the negotiations over this amendment in an
expeditious manner. We view the commitment of Denholtz, as
evidenced by the substantial non-refundable earnest money
deposit, as being solid. We are looking forward to the initial
and subsequent closings."
Banyan also announced that in order to avoid additional expenses
and duplication of effort, the first quarter distribution to
shareholders will be combined with the initial distribution of
sale proceeds following the closing. Banyan explained that it
has revised its forecast for liquidating distributions based on
the revised closing schedule. The Trust expects to distribute a
total of $6.00-$6.10 per share from the liquidation of the
Trust. The initial distribution, which is currently expected to
occur within thirty days of the first closing, is anticipated to
be approximately $5.00 per share inclusive of the first quarter
distribution. The balance of the funds is currently expected to
be distributed during the first quarter of 2002. Because of
Banyan's previous adoption of a Plan of Termination and
Liquidation, these distributions are treated for income tax
purposes as a return of capital to the extent of each
shareholder's basis in his or her stock.
Banyan Strategic Realty Trust is an equity Real Estate
Investment Trust (REIT) that owns primarily office and
flex/industrial properties. The properties are located in
certain major metropolitan areas of the Midwest and Southeastern
United States, including Atlanta, Georgia and Chicago, Illinois,
and smaller markets such as Huntsville, Alabama; Louisville,
Kentucky; Memphis, Tennessee; and Orlando, Florida. Banyan's
current portfolio consists of properties totaling 3.5 million
rentable square feet. As of this date Banyan has 14,291,940
shares of beneficial interest outstanding.
BRIDGE INFORMATION: Reuters Considers Bid for Certain Assets
-------------------------------------------------------------
Reuters, the global information, news and technology group,
confirmed that it was considering submitting a bid to acquire
certain assets of Bridge Information Systems Inc. Bridge is the
subject of a Chapter 11 bankruptcy proceeding in the United
States Bankruptcy Court in the Eastern District of Missouri. The
company is considering this as a result of the evolving
situation.
Reuters, the global information, news and technology group,
plays a significant role in the functioning of the financial and
media markets. Reuters strategy is to make the financial markets
work on the Internet. Reuters is the world's largest
international news and television agency with 1,957 journalists,
photographers and camera operators in 185 bureaus serving 153
countries, gathering and edited news in 24 languages. Reuters
premier position is based on a reputation for speed, accuracy
and impartiality as well as for continuous technological
innovation. Reuters supplies news and information to over 900
internet websites. Instinet, an independently managed subsidiary
of Reuters, is the world's largest electronic agency brokerage
firm. It covers the equities and fixed income markets. On June
30, 2000, the Group employed 17,067 staff in 215 cities in 98
countries.
C1 COMMUNICATION: Ontario Court Grants Protection from Creditors
----------------------------------------------------------------
C1 Communications Inc. announced that the Superior Court of
Ontario has granted it protection against its creditors under
the Companies' Creditors Arrangements Act, comparable to Chapter
11 protection with the U.S. Bankruptcy Court. The Company said
the filing was the result of "the current turmoil in the
financial markets." (New Generation Research, April 9, 2001)
CPSC: Penn Octane Gets Remaining 50% of Pipelines & Facilities
--------------------------------------------------------------
Penn Octane Corp. (Nasdaq:POCC) reported that the company
recently completed a settlement with CPSC International Inc.
("CPSC") and Cowboy Pipeline Service Co., which provides the
company with the remaining 50% interest (100% in total) in the
portion of the pipelines, terminal facility and related land,
permits or easements previously constructed and/or owned by CPSC
and leased to the company.
The United States Bankruptcy Court where CPSC filed for
protection under Chapter 11 of the United States Bankruptcy Code
during March 2000, has entered an order approving the
settlement. The acquired assets generally consist of a LPG
terminal facility in Matamoros, Mexico and pipelines which
connect the company's Brownsville, Texas terminal facility to
the Matamoros terminal facility.
In addition, as part of the settlement, the company conveyed to
CPSC all of its rights to certain property. Additional
information concerning the terms of the settlement, including
financial terms and related matters, is contained in the
company's Current Report on Form 8-K filed with the Securities
and Exchange Commission on April 6, 2001.
In the company's quarterly report on Form 10-Q for the quarter
ended Jan. 31, 2001, as filed with Securities and Exchange
Commission on March 20, 2001, the company reflected its
interests in the foregoing assets as if the settlement had been
completed based on the terms of a preliminary settlement
agreement between the parties. The final terms of the settlement
did not deviate in any material respect from the preliminary
terms previously reported.
Under the terms of the settlement, the parties also provided
mutual general releases with respect to previous disputes and
claims among the parties.
The portion of the acquired assets that is located in Mexico is
owned by the company's affiliate, Termatsal, S.A. de C.V., a
Mexican company, and was purchased by Termatsal with funds
provided by CPSC. All amounts owing to CPSC from Termatsal in
connection with the purchase were transferred to the company.
The company currently has an option to acquire 100% of the
common stock of Termatsal for a nominal amount. The company
expects to complete the acquisition of Termatsal in the near
future. Until such time, the company will account for its
investment in the acquired assets owned by Termatsal as an
investment in Termatsal.
Richter, president of the company, stated: "The acquisition
finally brings closure to the long and difficult struggle to
maintain our economic interest in the acquired assets and at the
same time preserve the company's ability to continue to use the
acquired assets until the matter was satisfactorily resolved.
"The construction of the acquired assets which was originally
scheduled to be financed over 10 to 15 years was actually
substantially paid for in less than one year from the start of
operations of the acquired assets. Unfortunately, the company
financed most of the acquisition under less than ideal
conditions and such resulted in it incurring significant
additional capital and operating costs.
"Furthermore, the company devoted a significant amount of its
management resources towards resolving its disputes with CPSC.
As a result of the settlement, the company has been able to
recover many of the unexpected significant cash outflows it was
required to make through offsets against the purchase price
provided for in the settlement. With the settlement complete,
the company and management can begin to focus once again on the
operation of its core business."
Penn Octane is a leading supplier of Liquefied Petroleum Gas to
Mexico. Penn Octane leases a 132-mile, six-inch pipeline which
connects from a pipeline in Kleberg County, Texas to its
terminal in Brownsville which has historically served as a
trans-shipment point for truck delivery to Mexico, and is
capable of serving as a trans-shipment point for railcar
delivery to customers in the United States, Canada and Mexico.
The company and its affiliates also own and operate a 21-mile
pipeline which connects the terminal in Brownsville to a storage
and distribution terminal in Matamoros. The company also
utilizes a 12-inch propane pipeline which connects certain gas
plants in Corpus Christi, Texas to its pipeline in Kleberg
County.
The company's network is further enhanced due to the 155 miles
of pipeline it has rights to use to transport LPG to and from
its storage facility in Markham, Texas and access to other
facilities which enhance the company's ability to bring LPG and
refined products to and from northeastern Mexico.
DANKA BUSINESS: Selling DSI To Pitney Bowes For $290 Mil in Cash
----------------------------------------------------------------
Danka Business Systems PLC (Nasdaq:DANKY) announced a definitive
agreement to sell its outsourcing division, Danka Services
International (DSI), to Pitney Bowes Inc. (NYSE:PBI), a global
provider of integrated mail and document management solutions,
for $290 million in cash.
"I am delighted that we've been able to reach an agreement that
benefits all parties," said P. Lang Lowrey, Danka's Chief
Executive Officer. "Pitney Bowes will provide a strong platform
for the development of DSI's business. In addition, we've
achieved our financial goal for the sale, which will enable us
to move forward in completing our restructuring plan. We are
optimistic that our shareholders and senior lenders will view
this agreement as positively as we do."
Danka announced an integrated three-part plan to reduce and
refinance its debt on February 20, 2001. First is the sale of
DSI, with proceeds to be used primarily to repay a substantial
portion of Danka's existing bank debt. Second is an exchange
offer for all $200 million of Danka's outstanding 6.75%
convertible subordinated notes due April 1, 2002. The Company
recently extended the exchange offer until April 30, 2001, and
as of March 20, 2001 had received tenders from holders of
$89,333,000 in aggregate principal amount, representing
approximately 44.7% of the outstanding notes. Third is the
refinancing of Danka's existing senior credit facility, and the
Company expects the DSI sale agreement to accelerate the
progress of these negotiations.
"Pitney Bowes will make a great partner for DSI's customers and
employees," noted Randy Miller, president of Danka's DSI
division. "Their services, relationships, and worldwide presence
make Pitney Bowes a strategic fit for our business. With their
support, we are looking forward to improving and expanding our
business operations."
"Pitney Bowes Management Services is one of the fastest growing
components of our business and comprehensive document management
is one of the most valuable services we offer our customers.
With this acquisition Pitney Bowes becomes one of the most
important global providers in this market," commented Pitney
Bowes Chairman and CEO, Michael J. Critelli.
Completion of the proposed sale is contingent upon the approval
of Danka shareholders, and a circular containing the notice
convening the necessary extraordinary general meeting will be
sent to shareholders soon. The terms of the transaction are
subject to the approval of Danka's senior lenders, consent for
the assignment of contracts being obtained from certain DSI
customers, and certain regulatory clearances being obtained in
the United States and in certain European countries. The sales
price is subject to adjustment depending on DSI's net assets at
closing. Danka expects to close the sale of DSI on or before
June 30, 2001.
DSI is a leading provider of document management services with
more than 300 customers worldwide. In the nine months ended
December 31, 2000, DSI generated earnings from operations of
$17.3 million on revenues of $218.5 million. DSI's net assets
were $92.6 million as of December 31, 2000.
Danka also announced that it recently paid approximately $40.7
million of quarterly principal and interest due on its senior
revolving and term credit facilities. The principal portion of
the payment, approximately $30 million, fully repays the
existing term loan facility. A balance of approximately $520
million remains on the senior revolving credit facility. In
addition, the Company recently paid its semi-annual interest
payment of $6.75 million due under its $200 million 6.75%
convertible subordinated notes due April 1, 2002.
About Danka
Danka Business Systems PLC, headquartered in London, England and
St. Petersburg, Florida, is one of the world's largest
independent suppliers of office imaging equipment and related
services, parts and supplies. Danka provides office products and
services in approximately 30 countries around the world.
Danka Services International (DSI), the outsourcing division of
Danka Business Systems PLC, provides on- and off-site document
management services, including the management of central
reprographics departments, the placement and maintenance of
photocopiers, print-on-demand operations and document archiving
and retrieval services.
About Pitney Bowes
Pitney Bowes is a $4 billion global provider of integrated mail
and document management solutions headquartered in Stamford,
Connecticut. Pitney Bowes serves over 2 million businesses of
all sizes in more than 130 countries through dealer and direct
operations. For additional information about Pitney Bowes,
please visit its website at www.pitneybowes.com.
DEAN FOODS: Fitch Places Senior Notes & CP Ratings On Watch
-----------------------------------------------------------
Fitch has placed Dean Foods Company's `BBB+' rated senior
unsecured notes and `F2' rated commercial paper program on
Rating Watch Negative.
This action follows the company's announcement that it has
reached an agreement to be acquired by Suiza Foods (Suiza). The
newly formed company will be named 'Dean Foods Company.'
As currently structured, Suiza will exchange $21 in cash and
0.429 shares of its stock for each share of Dean with no cap or
collar. The transaction, which is expected to be accounted for
as a purchase, is valued at $2.5 billion including the
assumption of $1 billion of Dean's debt and is subject to
shareholder and certain regulatory approvals.
It is expected to close during the third quarter of 2001.
Approximately $1 billion of securities are affected.
The merger is expected to change the landscape of the dairy
industry, making the newly formed company the first dairy in the
United States capable of servicing customers on a national
basis.
Fitch expects the newly formed company will be a strong partner
for large national retailers. The resulting company will have
about $10 billion in sales and $0.9 billion in EBITDA with
approximately 70% of its revenue base derived from fluid dairy
and approximately a 30% market share.
The combined company's portfolio will include fluid dairy, ice
cream, cultured products, other non-carbonated beverages,
pickles, and powders.
While Fitch anticipates that the new Dean Foods Company will
benefit from manufacturing, selling, distribution, and
administrative synergies, the sizeable debt load incurred from
acquisitions and share repurchases will result in credit
protection measures that are substantially weaker than those of
the existing Dean Foods.
The new company is expected to have approximately $4 billion of
debt, including $0.6 billion of mandatory redeemable trust
preferred securities.
Its total debt as a multiple of EBITDA is expected to be
approximately 4.6 times (x), and EBITDA coverage of interest is
estimated to be about 2.9x. As a result of the weakened credit
profile, the Rating Watch is changed to Negative from Evolving.
Resolution of the Rating Watch will be determined after a
detailed review of the combined company focusing on operating
synergies as well as financial policies going forward.
In a highly fragmented and competitive market, the existing Dean
Foods is the second-largest processor of milk and a leading
producer of ice cream in the United States.
The company is also one of the largest pickle producers and
marketers in the United States with sales nationwide.
Approximately 50%-60% of the company's products are sold as
private labels.
The new company is expected to be the largest dairy in the
United States and the only dairy capable of servicing customers
on a national basis.
EVERGREEN FUNDING: Moody's Cuts Ratings On 3 Classes of Notes
-------------------------------------------------------------
Three classes of notes issued by Evergreen Funding Ltd. were
downgraded by Moody's Investors Service for loss of par and
deterioration in the credit quality of the underlying portfolio.
They are the following: (1) the U.S. $195,000,000 Class A
Floating Rate Senior Notes Due November 2010, (2) the U.S.
$38,000,000 Class B Floating Rate Senior Subordinate Notes Due
November 2010, and (3) the U.S. $19,000,000 Class C Subordinate
Notes Due November 2010.
Moody's said as a result of this latest rating action, the Class
A Notes (previously rated Aa2) are now rated A1, the Class B
Notes (previously rated Ba1) are now rated B2, and the Class C
Notes (previously rated Caa1) are now rated Ca.
FACTORY CARD: Secures $10 Million Exit Financing Facility
---------------------------------------------------------
On March 26, 2001, Factory Card Outlet Corp. and the Creditors'
Committee appointed in its pending case under chapter 11 of
title 11 of the United States Code entered into a definitive
agreement with Factory Card Holdings, Inc. regarding a
transaction which would provide Factory Card with funding to
enable it to emerge from chapter 11. The agreement, which is
subject to, among other things, confirmation of a plan of
reorganization that would have to be voted upon by creditors,
provides for an investment of at least $10 million in Factory
Card upon its emergence from chapter 11, at least $6 million of
which would be in the form of equity. The agreement also
provides for a break-up fee of $600,000 and an expense
reimbursement of up to $400,000, both to be paid to Factory Card
Holdings in the event an alternative transaction were to be
consummated by Factory Card. The payment of such amounts is
subject to the approval of the Bankruptcy Court.
In addition, on or about March 19, 2001, Factory Card Outlet
executed the Eighth Amendment to Debtor In Possession Loan and
Security Agreement. Pursuant to the Amendment, the "Maturity
Date" of Factory Card's debtor in possession facility has been
extended from March 23, 2001 to the earlier to occur of July 31,
2001 and the effective date of a plan of reorganization.
Additionally, because, among other reasons, Factory Card did not
require a $50 million facility, the amount of the facility was
reduced to $32,500,000, thereby reducing certain fees. The
Amendment also provides for a special sub-line advance. Further,
there is a $100,000 amendment fee which is payable on the
earlier to occur of July 31, 2001 or the date of the
acceleration of Factory Card's obligations under the facility.
It is contemplated that the latter should only occur upon
Factory Card's emergence from chapter 11.
FRUIT OF THE LOOM: Asks To Extend Solicitation Period To Sept 28
----------------------------------------------------------------
Fruit of the Loom, Ltd., pursuant to section 1211(b) asked Judge
Walsh for an extension until September 28, 2001, to permit it
adequate time to gain approval of the disclosure statement
solicit acceptances of the plan. Fruit of the Loom's current
solicitation period expires on April 30, 2001.
Ms. Stickles told the Court that since the petition date, Fruit
of the Loom, in addition to handling administrative matters and
business complications that accompany any chapter 11 filings,
has been working diligently and resolutely to do two things.
First, it has developed a business plan to serve as the
cornerstone of a plan of reorganization. Second, it has finally
filed a plan of reorganization. This process however, has been
arduous and time-consuming given the size and complexity of
Fruit of estates and the numerous intercreditor issues.
Since the petition date, Fruit of the Loom has substantially
stabilized its operations, which was a precondition to the
development of a long term business plan; reviewed and
streamlined its business operations; formulated a long term
business plan; and engaged in the myriad tasks required to
negotiate and formulate a plan of reorganization.
Fruit of the Loom has now filed its plan of reorganization and
disclosure statement. However, before Fruit of the Loom could
even request a hearing date for consideration of the disclosure
statement, the creditors committee appointed in these cases
filed a motion to stay all proceedings with respect to the plan
and disclosure statement. Fruit of the Loom believes that the
additional time requested is appropriate for consideration and
resolution of the other various issues.
Fruit of the Loom assured Judge Walsh that the extension request
is in good faith and is not a negotiating tactic in any way.
Fruit of the Loom and its professionals recognize the need to
deal with all parties in interest in the cases and have
consistently conferred with all constituencies. Debtor has no
intention of discontinuing its exchange of views if this motion
is granted. (Fruit of the Loom Bankruptcy News, Issue No. 26;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
FRUIT OF THE LOOM: Files Lawsuit Against Gildan Activewear
----------------------------------------------------------
Underwear manufacturer Fruit of the Loom is suing Gildan
Activewear Inc. and has accused its competitor of stealing trade
secrets to grab a competitive edge in the apparel business,
according to the Associated Press. "This case is about
industrial espionage at the highest corporate level and the
lengths to which predatory competitors will go to obtain
commercial advantage," Fruit of the Loom alleged in its lawsuit.
Lawyers for the Fruit of the Loom asked for unspecified damages
and a court order to prohibit the Montreal-based Gildan from
using production and sales forecasts allegedly obtained in
November. U.S. District Judge Joan Gottschall issued a temporary
restraining order against Gildan.
Fruit of the Loom alleges that former manager Elizabeth Walton
passed critical documents to her ex-employer, David Cherry, one
of five Fruit of the Loom executives who fled the company in
recent years as it wallowed in bankruptcy protection. Fruit of
the Loom filed for bankruptcy on Dec. 29, 1999. (ABI World,
April 9, 2001)
GENESIS HEALTH: Judge Wizmur Proposes Appointing a Fee Examiner
---------------------------------------------------------------
In both Genesis Health Ventures, Inc. & The Multicare Companies,
Inc.'s joint cases, the Court, on its own motion, ordered
parties concerned to show cause why a fee examiner selected by
the court should not be appointed, to examine all applications
for fees and expenses which exceed $50,000 per month, and to
report to the court on its findings.
Judge Wizmur said in the order that it appears to the Court that
substantial professional fees and expenses are incurred in this
case. In view of this, the Court anticipates that lengthy,
complex and substantial fee applications will be presented to
the court for review and approval, and that the assistance of a
fee examiner in reviewing the applications would be helpful to
the court.
Joint Response of the Debtors, The Committee and Mellon Bank
In response, the Debtors, the Creditors' Committee, and Mellon
Bank N.A., as Agent for the syndicate of secured lenders of the
Debtors, proposed that a professional fee evaluation committee
(the Fee Committee) be established to evaluate and make written
recommendations to the Court in advance of fee hearings
concerning fees and expenses which exceed $50,000 per month and
to report to the Court on its findings.
The parties proposed that the Fee Committee be comprised of
(a) a member of the Debtors' senior management,
(b) a member of the Creditors' Committee, and
(c) a representative of Mellon.
The responding parties explained that Mellon is being suggested
as a member of the Fee Committee because it is a major
constituent in the Debtors' cases and is likely to be the holder
of a substantial portion of the equity of the reorganized
Debtors. The Debtors, the Creditors' Committee, and Mellon
further proposed to include a representative of the Office of
the United States Trustee on the Fee Committee in the event a
member of such Office desires to participate.
The responding Debtors note that Fee Evaluation committees have
been used successfully in other chapter 11 cases, citing in re
Serv. Merch. Co., Ch. 11 Case No. 99-02649-GP3-11 (Bankr. M.D.
Tenn.); in re R.H. Macy & Co., Inc., Ch. 11 Case No. 92-40477
(BRL)(Bankr. S.D.N.Y.); In re Zale Corp., Ch. 11 Case No. 92-
30001-SAF-11 (Bankr. N.D. Tex.)(fee committee comprised of five
representative business persons involved in the case and an
assistant U.S. Trustee).
The responding parties believe that a Fee Committee, rather than
a fee examiner, would be in a far better position to assist the
Court in evaluating the reasonableness and appropriateness of
the Fee Applications because the Fee Committee, as proposed,
will consist of representatives of the Debtors and the vast
majority of the claims in these chapter 11 cases who
collectively have substantive knowledge of the importance and
complexity of all the assignments performed by all the
professionals.
Moreover, as the representatives of the economic interests in
these cases, they have an incentive to assure that the estates
are properly charged for the work performed, the parties
asserted.
The Debtors, the Creditors' Committee, and Mellon also believe
that the professionals involved in the case are more likely to
dispute objections raised by a fee examiner, resulting in
additional burden on the Court in resolving those issues. On the
other hand, fee recommendations or objections made by the Fee
Committee, whose members will have substantive knowledge of the
actual work performed, are more likely to be accepted by the
professionals submitting Fee Applications, the responding
parties told Judge Wizmur.
Finally, the responding parties do not believe that the costs of
an outside fee audit would be justified. The responding parties
point out that, if the fee examiner audits the Fee Applications
without any knowledge of the substance of the matters, its
analysis is likely to have little value and will lead to
extensive additional time spent by the professionals to explain
or justify the amounts applied for or dispute the fee examiner's
analysis. If the fee examiner spends the time to understand the
substance and complexity of the matters involved, that knowledge
will, at best, simply duplicate the knowledge of the members of
the proposed Fee Committee.
For these reasons, the Debtors, the Creditors' Committee, and
Mellon believe the interest of the Debtors' estates, creditors,
and all parties in interest would best be served by the adoption
of the Fee Committee, rather than the appointment of a fee
examiner.
Comment of the United States Trustee
The United States Trustee supported the Court's idea for the
appointment of a fee auditor under Section 105(a) and/or Fed. R.
Evid. 706(a) in the Genesis cases.
The UST drew attention to the position taken by the Third
Circuit Court of Appeals In re Busy Beaver Bldg. Centers, Inc.
19 F.3d at 843. The UST noted that while holding that bankruptcy
courts have a mandatory, independent duty to review fee
applications, regardless of whether parties in interest
(including the United States Trustee, debtors and creditors)
object, the Third Circuit Court of Appeals has acknowledged that
the review process imposes significant, but necessary, burdens
on bankruptcy judges.
Accordingly, the 3rd Circuit encouraged bankruptcy courts to
take necessary steps to enhance the efficiency of fee
application review:
"[W]e [have stated that] . . . we do not intend that a district
[or bankruptcy] court, in setting an attorney['s] fee, become
enmeshed in a meticulous analysis of every detailed fact of the
professional representation. It... is not our intention that the
inquiry in the adequacy of the fee assume massive proportions,
perhaps even dwarfing the case in chief . . . Because time is
precious, the reviewing court need only correct reasonably
discernable abuses, not pin down to the nearest dollar the
precise fee to which the professional is ideally entitled."
The UST noted that Delaware bankruptcy courts, cognizant of the
Third Circuit's efficiency concerns (and with the endorsement of
at least one district court), have previously appointed fee
auditors under section 105 in order to discharge their
responsibilities under sections 330 and 331. The UST believes
that appointing a fee auditor to review and to comment upon
interim and final fee applications under Section 105 will
streamline the court's oversight duties under sections 330 and
331.
Moreover, the Court's appointment of a fee auditor under section
105(a) here would facilitate the Court's mandatory, independent
review under section 330. Accordingly, the UST believes that the
Court should exercise it equitable powers under section 105(a)
and appoint a fee auditor to assist it in discharging its
mandatory, independent review of professional fee applications
submitted by debtor and Committee professionals.
Appointing a Fee Auditor under Fed. R. Evid. 706(a) will also
preserve applicants' procedural due process rights, the UST
comments. This will provide the Court with a disinterested means
of identifying and reporting on problems with applications, the
UST observes. The fee auditor's reports will also provide
applicants with advance warning of the Court's concerns,
enabling applicants to prepare explanations and/or
clarifications prior to scheduled hearings, the UST. In this
way, a fee auditor will preserve applicants' due process rights
as well as promote fairness, the UST added.
Therefore, the UST thinks that the Court should appoint a Fee
Auditor under Section 105(a) and/or Fed. R. Evid. 706(a) in
order to facilitate its mandatory, independent review of Interim
and Final Professional Fee Applications. (Genesis/Multicare
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
HARNISCHFEGER: Names Post-Emergence Directors & Officers Slate
--------------------------------------------------------------
Pursuant to the Third Amended Joint Plan of Reorganization,
Harnischfeger Industries, Inc. have identified:
(I) the Directors and Officers of the New Debtors;
(II) the Directors and Officers of the Liquidating Debtors;
and
(III) the Plan Administrator
(I) New Debtors
(A) New HII Directors and Officers:
Each such director (or managers, in the case of limited
liability companies) will serve from and after the Effective
Date pursuant to the terms of each New Debtor's New Certificate
of Incorporation (or New Operating Agreement, in the case of a
limited liability company), other constituent documents, and the
applicable state corporation law. The classification and
designation of each New Debtor's Directors or mangers
will be consistent with each New Debtor's New Certificate of
Incorporation (or New Operating Agreement, in the case of a
limited liability company).
The Nominees for the Board of Directors for New HII are:
Name Affiliation
---- -----------
Steven L. Gerard Century Business Services, Inc.
Ken C. Johnsen Geneva Stee
James R. Klauser Wisconsin Energy Corp.
Richard B. Loynd Furniture Brands International, Inc.
P. Eric Siegert Houlihan Lokey Howard & Zukin
James H. Tate Thermadyne Holdings Corporation
John Nils Hanson Harnischfeger Industries, Inc.
The compensation package for the non-employee directors of New
HII will be:
Annual Retainer $30,000
Board Meeting Fee $1,250 per Board Meeting
Committee Meeting Fee $1250 per Committee Meeting for
Committee Members
$1,500 per Committee Meeting for
Committee Chairs
Stock Options To be set by the New HII Board in combination with
the New Stock Option Plan.
Mr. Hanson will receive no additional compensation for his
services as a director of New HII.
The Officers have been identified to be:
Annual % Bonus
Name Title Base Salary Opportunity
---- ----- ----------- -----------
John Nils Hanson President & CEO $682,500 60%
James A. Chokey Ex. Vice President, $293,500 60%
Law and Govt. Affairs
and General Counsel
Dennis R. Winkleman Ex. Vice President, $232,000 50%
Human Resources
Robert W. Hale Ex. Vice President $280,000 60%
Wayne F. Hunnell Ex. Vice President $273,000 60%
Michael S. Olsen Vice President,
Controller and
Chief Accounting Officer
Gary E. Lakritz Vice President - Tax
Eric B. Fonstad Secretary and
Associate General Counsel
Kim R. Kodousek Associatet General Counsel
and Assistant Secretary
Kenneth J. Stark Assistant Treasurer
(B) New HII Subsidiary Directors, Managers and Officers
Each New Debtor subsidiary of New HII (other than New Joy and
New P&H and their respective subsidiaries) will have the
following directors (or managers, in the case of limited
liability companies) and officers:
Name Title
---- -----
John Nils Hanson Directors/Managers
Michael S. Olsen Directors/Managers
Dennis R. Winkleman Directors/Managers
John Nils Hanson President
Michael S. Olsen Vice President
Eric B. Fonstad Secretary
Kenneth J. Stark Treasurer
The directors, managers and officers of the New HII Subsidiaries
(other than New Joy and New P&H and their respective
subsidiaries) are all employees of New HII and will receive no
additional remuneration for their services as directors,
managers or officers.
(C) New Joy Directors and Officers
Name Title
---- -----
Wayne F. Hunnel Director
Michael S. Olsen Director
John Nils Hanson Director
John Nils Hanson Chief Executive Officer
Wayne F. Hunnell President and Chief Operating Officer
G. Allan Osterwise Senior Vice President Sales & Marketing
Thomas Van Tassel Senior Vice President - Operations
Michael S. Olsen Vice President & Chief Financial Officer
Eric B. Fonstad Vice President and Secretary
Kim R. Kodousek Vice President and Assistant Secretary
Dennis M. White Vice President Global Quality
Larry R. Buschling Vice President - Engineering
Kenneth J. Stark Treasurer
Ronald R. Bartunek Assistant Treasurer
Lawrence J. Lepidi Associate General Counsel and Assistant
Secretary
The directors and officers of New Joy are all employees of New
Joy or New HII and will receive no additional remuneration for
their services as directors, managers or officers.
(D) New Joy Subsidiaries Directors and Officers
Name Title
---- -----
Wayne F. Hunnell Director
Michael S. Olsen Director
John Nils Hanson Director
Wayne F. Hunnell President
Michael S. Olsen Vice President
Eric B. Fonstad Secretary
Kenneth J. Stark Treasurer
The directors and officers of the New Joy subsidiaries are all
employees of New Joy or New HII and will receive no additional
remuneration for their services as directors, managers or
officers.
(E) New P&H Directors and Officers
Name Title
---- -----
Robert W. Hale Director
Michael S. Olsen Director
John Nils Hanson Director
John Nils Hanson Chairman
Robert W. Hale President and Chief Executive
Officer
Michael S. Olsen Vice President and Chief Financial
Officer
Eric B. Fonstad Vice President and Secretary
Kenneth J. Stark Vice President and Treasurer
Scott J. Alexander Vice President and General Manager
Mark Hardwick Vice President and Product Manager
Neil Massey Vice President - Manufacturing
Operations
Douglas Blom Vice President and General Manager -
International Group
Barry J. Turley Vice President and General Manager
Edwin P. Quinn Vice President and General Manager
Louise Hermsen Vice President - Planning & Support
Service
Kim R. Kodousek Vice President and Assistant
Secretary
Bruce Rockenfield Vice President - Human Resources
John DiClemente Vice President and General Counsel
Eugene Fuhrmann Vice President and Controller
Randy Klocke Assistant Treasurer
(F) New P&H Subsidiaries Directors, Managers and Officers
Name Title
---- -----
Robert W. Hale Director
Michael S. Olsen Director
John Nils Hanson Director
Robert W. Hale President
Michael S. Olsen Vice President
Eric B. Fonstad Secretary
Kenneth J. Stark Treasurer
The directors, managers and officers of the New P&H subsidiaries
are all employees of New P&H or New HII and will receive no
additional remuneration for their services as directors,
managers or officers.
(II) Liquidating Debtors
As of the Effective Date, David J. Boland will be the sole
Officer and Director of each Liquidating Debtor other than
Beloit and will hold the title of President.
(III) Plan Administrator
The Plan Administrator will be David J. Boland who will contract
with BDO Seidman, LLP with respect to his duties as Plan
Administrator. (Harnischfeger Bankruptcy News, Issue No. 40;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
HEDSTROM CORP: Banks See 83% Recovery & Pennies to Unsecureds
-------------------------------------------------------------
Hedstrom Corp., Inc., et al. represented by Weil, Gotshal &
Manges LLP and Richards, Layton & Finger, PA, filed its
Disclosure Statement on March 23, 2001.
Overview of distributions under the plan:
* Administrative Expense Claims - estimated at $36,013,000 -
estimated recovery - 100%
unimpaired
* Priority tax claims - estimated at $129,562 -
estimated recovery - 100%
unimpaired
* Other priority claims - estimated at $0 - 100% recovery
unimpaired
* Senior Secured Bank Claims - estimated at $189,701,000
estimated recovery - 83%
impaired.
* Miscellaneous secured claims estimated at $6,372,000
100% estimated recovery
unimpaired
* Qualified Trade claims - up to $25 million
estimated recovery - 10%
impaired
* General Unsecured Claims estimated at $33,100,000
estimated recovery - 4.5%
impaired
* Senior subordinated notes claims
estimated at $114,003,000
nominal recovery
impaired
* Senior Discount Notes Claims - estimated at $34,792,000
nominal recovery - impaired
* Convenience Claims - estimated at $1.9 million
estimated recovery - 8%
impaired
* Intercompany claims - estimated at $296,310,279
estimated recovery - $0
impaired
* Insider Notes Claims - estimated at $2.5 million
estimated recovery $0
impaired
* Equity interests
estimated recovery - $0-per-share
impaired
The debtors believe that through the plan, holders of allowed
claims will obtain a substantially greater recovery from the
estates of the debtors than the recovery that they would receive
if the assets of the debtors were liquidated under Chapter 7.
The plan will afford the debtors the opportunity and ability to
continue in business as a viable concern and preserve ongoing
employment for the debtors' employees.
ICG COMMUNICATIONS: Assumes KMC Telecom Lease for PRI Circuits
--------------------------------------------------------------
ICG Communications, Inc. sought the Court's authority to assume
a contract between ICG Telecom Group, Inc., and KMC Telecom,
Inc., under which the Debtor leases circuits called "PRIs" from
KMC. Certain of these leased PRIs are described by the Debtor as
critical components of the Debtors' telecommunications network,
and essential to the continued operation of the Debtors'
businesses. Further, the Debtor has renegotiated the KMC
agreement to provide it with significant new benefits.
As of the date of the Motion, Telecom leases approximately 3000
PRIs from KMC and pays KMC $585 per PRI per month, or
approximately $1.755 million per month in the aggregate.
However, while Telecom leases and pays for 3000 PRIs from KMC,
Telecom currently sends traffic on only approximately 460 PRIs
of the total 3000. The remaining PRIs were contracted for in
expectation of future growth and build-out of the ICG network.
Under the terms of the KMC agreement, Telecom has the right to
terminate or disconnect individual PRIs not actively being used,
if Telecom so desires. Doing so enables Telecom to cease paying
the contractual price for the disconnected PRI. However,
disconnection also requires Telecom to pay a termination fee to
KMC. Were Telecom to elect to discontinue the approximately 2540
PRIs not currently in use, the contractual termination liability
would be approximately $11 million. While the Debtors believe
this liability constitutes a prepetition claim because the
obligation, although contingent, arose at the time the contract
was entered into, KMC has asserted that because the act of
disconnection would occur after the Petition Date, the resulting
liability would constitute an administrative priority claim
rather than a general, unsecured claim.
To eliminate the expense of paying the $585 per month for unused
PRIs, to settle potential disputes regarding the legal status of
the contractual termination liability, and to reduce overall
costs and expenses, the Debtors have negotiated revised terms
for the KMC agreement. The principal terms, as revised, are:
(a) Commencing March 2001 the price charged by KMC to
Telecom per PRI is reduced from $585 to $450 per month;
(b) Commencing March 2001, Telecom will be required to pay
only for PRIs actually used; i.e., a reduction from 3000 to
approximately 460 PRIs;
(c) Telecom will pay 50% of the contractual termination
liability in 12 equal monthly payments, commencing in March
2001; and
(d) The term of the KMC agreement is amended to two years
commencing March 2001.
Additionally, the parties have agreed that Telecom will pay KMC
for February 2001 services in the total amount of $1.2 million,
compared with the $1.755 million that was actually due and
owing.
Based on these economic terms, Telecom's ongoing PRI payments to
KMC would be reduced from the currently monthly rate of $1.755
million to approximately $670,000 per month for year one
(inclusive of all termination liabilities), and approximately
$207,000 per month for year two by which time the termination
liabilities will be paid. In addition, all claims of KMC, which
total approximately $3.2 million for unpaid prepetition PRI
chares and any claims for the portion of the termination
liability not paid (approximately $5.5 million) are waived.
The Debtors proudly asserted that these new claims are most
beneficial in that the monthly PRI costs will reduced
dramatically, potential termination liability will be
eliminated, and an existing undisputed prepetition claim will be
waived. In addition, Telecom will be able to continue, on a
cooperative consensual basis, its relationship with one of its
most significant circuit vendors. Accordingly, the Debtors
submit that this consensual settlement embodied in the modified
terms of the agreement is highly favorable and ask that they be
authorized to assume the KMC agreement, as modified.
Judge Walsh ordered that the KMC agreement is assumed by the
Debtors, as amended by the terms of the Motion. (ICG
Communications Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
IMPERIAL SUGAR: Unsecured Creditors' Committee Appointments
-----------------------------------------------------------
Patricia A. Staiano, United States Trustee, has appointed the
members of an Official Committee of Unsecured Creditors to serve
in Imperial Sugar Company's chapter 11 cases:
The members of the Committee are:
William Wallace Sprague, Jr.
10 East Taylor Street
Savannah, Georgia 31401
Phone: (912) 651-4852
Fax: (912) 651-5155
William Rupp Steinhauer
Route 1, Box 167
Hardeeville, South Carolina 29927
Phone: (843) 784-3533
Fax: (843) 784-3387
Liberty Tax Exempt Fund
C/o Liberty Funds Group LLC
One Financial Center
Boston, Massachusetts 02111
Attn: Harold J. Marcus, Vice President
Phone: (617) 772-3894
Fax: (617) 737-0358
Scana Energy Trading LLC
1426 Main Street
Mail Code 130
Columbia, South Carolina 29218
Attn: Beaumont B. Covert, Esq.
Phone: (803) 217-1255
Fax: (803) 217-7931
United States Trust Co. of New York
2001 Ross Avenue, Suite 2700
Dallas, Texas 75201
Attn: Bill Barber
Phone: (214) 754-1255
Fax: (214) 754-1303
Lehman Brothers, Inc.
200 Vesey Street
3 World Financial Center, 11th Floor
New York, New York 10285
Attn: John K. Sweeney
Phone: (212) 526-9383
Fax: (212) 526-4159
Metropolitan Life Insurance Company
334 Madison Avenue
P. O. Box 633
Convent Station, New Jersey 07945
Phone: (973) 254-3423
Fax: (973) 254-3032
(Imperial Sugar Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
INTEGRATED HEALTH: Extra Closet & Novacare Agree To Reject Lease
----------------------------------------------------------------
Pursuant to a warehouse facility lease between The Extra Closet,
Inc. (Landlord) and Novacare, the Integrated Health Services,
Inc. Debtors occupy certain premises located at 30 West 330
Butterfield Road, Warrenville, IL 60555, Unit 78.
The Debtors and the Landlord wish to provide for the rejection
of the Lease and the surrender of the Premises to the Landlord,
by way of a Stipulation and Order of which they seek the Court's
approval.
The parties agreed that:
(1) The Debtors are authorized and empowered, pursuant to
Section 365(a) of the Bankruptcy Code, to reject the Lease
effective as of March 31, 2001.
(2) The Debtors will surrender the Premises in its then
current condition on or before the Effective Date.
(3) Upon the approval of this Stipulation and Order by the
Court, the Landlord will have a post-petition administrative
claim against the Debtors for all accrued and unpaid rents due
under the Lease arising during the period from the Filing Date
through the Effective Date, and will retain any rights it may
have with respect to accrued and unpaid rents due under the
Lease arising prior to the Filing Date, subject to the Landlord
having properly and timely filed a proof of claim with the
Court.
(4) The Landlord will retain possession of all personal
property of the Debtors located at the Premises and will have
the right to sell or dispose of the property in any manner and
retain any funds realized from such disposition; the Debtors
will have no obligation to remove any personal property from the
Premises and will abandon and relinquish all rights in and to
such personal property as of the Effective Date.
(5) Except as set forth in the Stipulation and Order, as of
the Effective Date, the Landlord will be deemed to have fully
released, relinquished and discharged all claims against the
Debtors arising out the rejection of the Lease.
(6) The Debtors are authorized and empowered to remain in
the Premises through and including the Effective Date.
(Integrated Health Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
KMART CORPORATION: Shareholders to Convene on May 15 in Detroit
---------------------------------------------------------------
The 2001 Annual Meeting of Stockholders of Kmart Corporation
will be held at the Detroit Opera House, 1526 Broadway, Detroit,
Michigan on Tuesday, May 15, 2001, beginning at 10 a.m. E.T.,
for the following purposes:
(1) To elect one Class I director for a term expiring in
2002, one Class II director for a term expiring in 2003 and four
Class III directors for terms expiring in 2004.
(2) To ratify the appointment of PricewaterhouseCoopers LLP
as independent accountants of the Company for the 2001 fiscal
year.
(3) To act upon a stockholder proposal, if presented at the
Meeting, requesting that the Company endorse the Coalition for
Environmentally Responsible Economies (CERES) Principles.
(4) To act upon a stockholder proposal, if presented at the
Meeting, concerning vendor standards.
(5) To transact such other business as may properly come
before the Meeting or any adjournment of the Meeting.
Stockholders of record of Kmart common stock at the close of
business on March 16, 2001 are entitled to notice of and to vote
at the Meeting or any adjournment of the Meeting.
LOEWEN: Teamsters Request Rule 2004 Document Production
-------------------------------------------------------
Teamsters Local 127 Legal Assistance Funds requested the Court
to order 10 of The Loewen Group, Inc. Debtors, which are among
the funeral homes that the Association represents, to produce
their books and records, under Fed. R. Bankr. Pro. 2004, for the
ten years preceding their filing of chapter 11 cases, including
the time before Loewen Group International, Inc. acquired them.
The 10 Debtors identified are:
* Brown Funeral Home, No. 99-1335
* Chrastka Funeral Home, No. 99-1379
* Community-Opyt Funeral Home, Ltd, No. 99-1388
* Fitzpatrick Funeral Services, Ltd., No. 99-1477
* Furman Funeral Home, Inc., No, 99-1503
* Mount Auburn Funeral Home, Inc., No. 99-1750
* OBC Acquisitions, Ltd., No. 99-1797
* Weinstein Brothers, Inc., No. 99-2045
* Windridge Funeral Home, Ltd., No. 99-2072
* Zefran Funeral Home, Ltd., No. 99-2090
The Funds explained that they need to quantify their claims
against these funeral homes for two reasons. First, because
these debtors have not rejected the labor contracts under 11
U.S.C. Section 1113, they are deemed to have assumed those
contracts, and the Funds claims, if any, will be entitled to
administrative priority. Second, Loewen International may sell
these funeral homes, as it did when it sold Association member
Ruzich Funeral Home's assets, in which case, the Movants said,
the Court conditioned the sale's closing on the Funds' pre-
petition claim being paid in full.
Teamsters asserted that the Funds' trustees are authorized to
audit contributing employers to see if they are delinquent in
contributing to the Funds. And because the applicable
limitations period is Illinois's ten-year statute, the Funds
sought to audit these funeral homes' books and records for the
ten years preceding their filing dates.
Teamsters related that in August 1998 and January and February
2000, the Funds began auditing these funeral homes. These
audits, the Movants said, revealed delinquencies in each funeral
home, ranging from $3,709.03 for Fitzpatrick Funeral Services,
Inc. to $557,423.52 for Weinstein Brothers, Inc.
Teamsters told the Court that the delinquencies don't span the
full ten year limitations period but Loewen International
refused to provide the Fund's auditors any payroll records prior
to its acquiring the Association-member funeral homes or its
acquisition documents. The Funds need these materials for at
least three reasons. First, Loewen International would be liable
for the Funds' debt if it acquired the Association members'
stock. Second, even if it only acquired the funeral homes'
assets, those homes still might have successor liability.
Finally, even if Loewen International and its funeral homes are
off the hook for any pre-acquisition delinquencies, the sellers
might still be liable. So the Funds need these books and records
to pursue their claims against the sellers.
Teamsters told the Court that "on January 27, 2000, the Funds'
counsel -David S. Allen - sent a letter to Loewen
International's attorney - Brian Easley - confirming that Loewen
International
* had instructed the Association-member funeral homes to
provide the Funds' auditors - Thomas Havey & Associates with 10
years of records;
* had arranged to produce its Vancouver payroll records to
the Funds' auditors.
The parties further agreed to defer the issue of how Loewen
International acquired the funeral homes - by stock purchase or
assets sale - until the auditors decided whether there are any
delinquencies prior to Loewen's acquisitions.
However, Loewen International has not honored its promise to
produce these documents after more than one year, Teamsters told
the Court.
According to the Movants, as Loewen has not responded to the
Funds' request, the Funds drew upon Rule 2004 and requested that
the Court order Loewen International and the 10 debtors
identified and all others acting in concert with them to
produce, within seven days after the Court enters an order
granting this motion, the following documents and other tangible
things to the Funds for the period June 1, 1989 through June 1,
1999:
* Employer's remittance reports to any health and welfare,
pension, and legal assistance funds;
* Employer's payroll records;
* Federal withholding tax and social security reports;
* State of Illinois income tax withholding reports;
* Federal and State of Illinois unemployment compensation
reports;
* Any other records, reports, or documents that may relate
to non payment of welfare, pension, and legal assistance
contributions;
* Cash disbursement records;
* Records of cash receipts and accounts receivable;
* All paperwork regarding funerals indicating who arranged
and directed the funeral, who drove the vehicles for the
funeral, who drove during the removal process, and who drove
during any service or pick-up trips, including but not limited
to the drivers' logbook, case files, records, and contracts for
each funeral;
* All funeral director licenses or copies thereof, which
Illinois, county, or municipal law requires each funeral home to
display;
* Automobile or commercial liability insurance policies,
showing the number and type of vehicles the business owns; and
* Stock certificates or other documentation showing the
funeral homes' owners.
A hearing has been set for April 19, 2001, at 09:30 a.m. The
Objection Deadline is April 2, 2001 at 4:00 p.m. (Loewen
Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
MAVESA: NYSE To Delist American Depositary Shares From Trading
--------------------------------------------------------------
Mavesa, S.A. (NYSE: MAV) said that as a result of the
acquisition of over 98% of its outstanding shares of common
stock, including shares represented by American Depositary
Shares (ADSs), by a wholly-owned subsidiary of Primor Alimentos,
C.A., Mavesa no longer meets the New York Stock Exchange's
continued listing criteria and standards, and that Mavesa will
not oppose the delisting of its ADSs from the NYSE. Mavesa
anticipates that the ADS program will be terminated in the near
future, and that termination will be publicly announced.
MEGA MICRO: Completes Liquidation of Computer Retail Unit
---------------------------------------------------------
Mega Micro Technologies Group (OTCBB:MGGA) announced the
liquidation of its wholly owned subsidiary, Mega Micro, Inc.
(Mega).
Mega was a retail/wholesale computer technology hardware company
operating in San Diego, California.
MGGA effectuated the liquidation of Mega on March 22 through a
purchase by an unaffiliated company for the amount of $200,000
plus the tender of 500,000 shares of MGGA's common stock that
was held by a previous founder of MGGA and a principal of the
acquiring company.
Mega had a net asset value at the time of sale of approximately
$50,000 and had operated at a loss for almost ten months prior
to the sale. MGGA management had determined, that given the
significant downturn of the retail computer hardware industry
and gross margin percentages, it was in MGGA's best interest to
sell Mega prior to funding any additional cash deficit.
In addition to the liquidation of Mega, MGGA has initiated an
overall corporate restructuring program. As part of the
restructuring, Thomas Embrogno, MGGA's president and COO, and
David Steffey, VP of Operations and CFO, have resigned effective
today. Mr. Embrogno and Mr. Steffey will continue to assist MGGA
as advisors. Bruce Voss, a MGGA director, also resigned
effective April 2.
Robert M. Stander, MGGA's chairman and CEO, has taken over as
acting president. Mr. Stander is skilled in corporate
reorganizations and restructuring plans.
Due to the recent plan of restructuring, MGGA will be
rescheduling the previously announced Special Stockholder's
meeting, which was to be held on Monday, April 9, 2001.
About Mega Micro
MGGA has been striving to become a provider of business-to-
business (B2B) electronic commerce ("e-commerce") solutions. In
light of current market conditions and difficulties in the B2B
and e-commerce industry, MGGA is evaluating its future business
prospects on a daily basis.
MGGA, although undercapitalized, plans to leverage its
experience in hardware sales and networking services along with
strategic alliances to offer clients the ability to collect data
from multiple sources, distribute this data throughout the
client's workflow and present the data as web content.
NAZARETH LIVING: Fitch Places BBB- Bond Rating On Watch
-------------------------------------------------------
Fitch places its 'BBB-' rating for Nazareth's Living Center
(NLC) approximately $20 million outstanding Industrial
Development Authority of the County of St. Louis, Missouri,
health-care facilities refunding revenue bonds (Nazareth Living
Center), series 1999, on Rating Watch Negative, meaning the
bonds may be downgraded.
The action stems from NLC's declining financial results, which
at audited fiscal year-end Sept. 30, 2000, indicated a rate
covenant violation. NLC recorded a bottom-line loss of (9.5)%
and coverage well below its 1.2 times (x) rate covenant for
fiscal year (FY) 2000.
Liquidity remains slim at 116 days cash on hand and 28% cash to
debt. NLC's declined financial performance in FY 2000 is mainly
attributed to an 18% increase in salaries and wages expense.
Management increased wages to maintain competitiveness and to
reduce its reliance on agency nurses, which cost $600,000 in FY
2000.
As of February 2001, the use of contract labor is down
substantially; however, NLC has not received the full savings
with the increase in salaries. Financial statements at 3-month
end Dec. 31, 2000, indicate improved performance with debt
service coverage of 2.1x, an excess margin of 2.6% and 135 days
cash on hand.
NLC continues to benefit from the residency agreement with the
Sisters of St. Joseph of Carondelet, which guarantees
reimbursement for unfilled beds. Fitch will monitor NLC's
ability to stabilize financial performance in the near term and
will re-evaluate upon receiving audited year-end financial
statements.
Located in St. Louis, Missouri, NLC is a type C continuing care
retirement community operating 134 residential care units and
140 skilled nursing beds.
NETWORK FOREST: Obtains Extension Of Time To Submit CCAA Plan
-------------------------------------------------------------
Value Holdings, Inc. (OTC Bulletin Board: VALH), a holding
company formed to acquire and consolidate industrial
distribution businesses relating to the lumber and general
building materials industry, disclosed that its wholly owned
subsidiary, Network Forest Products has been granted an
extension of time to submit its plan of accommodation with
creditors by the Ontario Superior Court of Justice under
Companies' Creditors Arrangement Act.
Network reported that its largest creditor, GMAC Commercial
Credit Canada has advanced nearly $1.5 million (Canadian
Dollars) since March 7, 2001 for the purchase of inventory.
GMAC, which is not subject to the order under the CCAA, has
indicated that daily funding will continue subject to Network
providing a satisfactory financial restructuring plan to GMAC.
As part of the restructuring plan being implemented by
management, Network Forest Products has implemented various cost
cutting measures including the consolidation of operations,
restructuring of business units and the phasing out of certain
job categories. The company has been able to fulfill orders and
maintain relations with its customers. Suppliers are being paid
on a COD basis.
"We are making significant strides in our restructuring plan,"
said Mr. Maker. "We are moving forward with support of our
bankers and our management team."
Additionally, Network undertook a physical count of its
inventory as part of the restructuring and the implementation of
a new perpetual inventory system. The physical count produced a
result different from the inventory amount reported on Value
Holdings' recent quarterly report. Value Holdings has amended
the quarterly report to reflect the change and has recorded an
extraordinary charge of $10.8 million.
About Value Holdings, Inc.
Value Holdings, Inc. is a holding company formed to acquire and
consolidate industrial distribution businesses relating to the
wood and general building materials industry. The corporate goal
is to build well-run independent subsidiaries that have solid
market niches with compounded growth rates in terms of revenues
and earnings.
PACIFIC GAS: Court Okays Continued Use Of Current Business Forms
----------------------------------------------------------------
At Pacific Gas and Electric Company's behest, Judge Montali
granted PG&E authority to continue using their existing supplies
of business forms (including, but not limited to, letterhead,
purchase orders, invoices, contracts and checks), without the
need to follow the United States Trustee's operating guideline
that all business forms used by a chapter 11 debtor bear a
"debtor-in-possession" legend. Parties doing business with the
Debtor undoubtedly will be aware, Judge Montali observed, as a
result of the size and notoriety of the Debtor and this case, of
PG&E's status as a chapter 11 debtor-in-possession. Changing
Business Forms immediately would be expensive and burdensome to
the Debtor's estate and extremely disruptive to daily business
operations. Accordingly, until existing stock is depleted, the
Debtor may continue using their prepetition business forms.
(Pacific Gas Bankruptcy News, Issue No. 1; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
PILLOWTEX: Taps Stern Stewart & Co. As Strategic Consultants
------------------------------------------------------------
Pillowtex, Inc. sought court authority to retain and employ
Stern Stewart & Co. as strategic consultants to assist the
debtors with the formulation and implementation of their
strategic business plan.
The firm will render strategic consulting services to the
debtors to complete the debtors' three-year strategic plan that
will serve as the cornerstone for a plan or plans of
reorganization. Stern Stewart will work with the debtors'
senior management to establish a process to identify, measure
and evaluate possible strategic alternatives by gathering and
compiling company and industry data, creating operational models
of the debtors' resources, activities, customers and products to
quantify the potential effects of possible alternatives; and
establishing risk profiles for each strategic alternative.
* Stern Stewart will undertake industry analysis and
component valuation to assist management in drawing conclusions
as to what processes the debtors should target for growth;
* Assist management is the collection, mapping,
identification and analysis of the economic costs of operational
processes and provide an enterprise-wide process map, populated
by credible data, to help identify and simulate the impact of
proposed actions on economic profitability;
* Evaluate opportunities to increase value by further
reducing inventory, eliminating overhead, streamlining SKUs,
making operations more efficient, rationalizing unprofitable
customers, and determining the optimal overall asset base;
* Propose a series of steps leading to smaller capital
requirements and higher near-term cash flow; an
* Unlock the value of the data assets stored in the
recently completed enterprise resource planning system
implementation and other low-level data collections systems.
Stern Stewart intends to charge a flat monthly rate of $181,850
and expenses. They anticipate that their total estimated fees
will be $727,500. The debtors are represented by Morris,
Nichols, Arsht & Tunnell, Delaware and Jones, Day, Reavis &
Pogue, Ohio and Texas.
RAYTHEON: Taking $275-325MM Charge in Q1 for Halted Operations
--------------------------------------------------------------
Raytheon Company (NYSE: RTNA, RTNB) said it plans to take a
first quarter charge to discontinued operations of between $275
million and $325 million to reflect the estimated cost required
to complete two Massachusetts construction projects on which it
has performance guarantees. Raytheon's outlook for earnings from
continuing operations is unaffected by this charge. Consolidated
operating cash flow is likely to be affected by the full amount
of the charge over the next 4 to 6 quarters.
Raytheon has completed an initial assessment of the two projects
and believes that its net cash outflow will be between $275
million and $325 million, which is within the range of exposure
projected for these projects in Raytheon's annual report on form
10-K filed on March 5. The assessment is the company's current
best estimate of the net cash flow needed to complete the two
projects, based primarily on information provided by Washington
Group International (WGI). The company's estimate of its
exposure on other guaranteed projects referred to in its 10-K
filing has not changed, and therefore the company is not
modifying the high end of its range of exposure for all
guaranteed projects.
On March 8 Washington Group International Inc., an Ohio
corporation (WGI Ohio), the prime contractor on the projects,
abandoned both work sites. WGI Ohio is a subsidiary of WGI, a
Delaware corporation. On March 15 the Supreme Court of New York
ordered Sithe Energies Inc., developer of the two projects, to
terminate its contract with WGI for default, triggering
Raytheon's performance guarantees. The guarantee commitments
predated the sale of Raytheon's engineering and construction
business to WGI. Under the sale agreement, WGI is required to
indemnify Raytheon for all amounts expended by Raytheon to
complete the projects, and Raytheon is entitled to full cash
reimbursement for those amounts within three days after demand
for payment. In addition, Raytheon has common law and equitable
rights as a performing guarantor to seek reimbursement from WGI
Ohio as the defaulting contractor. Due to the uncertainties of
the financial position of WGI and WGI Ohio, Raytheon does not
intend to recognize for accounting purposes the value of its
potential claims against WGI, although it intends to pursue all
avenues to maximize its recovery.
The ultimate outcome will depend on a number of factors,
including resolving issues with vendors and subcontractors
relating to amounts claimed by them to be due and unpaid by WGI
Ohio at the time it stopped working on the projects, any delays
in the project schedule arising prior to WGI Ohio's termination,
and any further delays arising as a result of WGI's failure to
fulfill its obligations under its contracts.
Raytheon also announced that it has hired Duke Fluor Daniel to
complete construction on the two projects. The two projects, an
800-megawatt power plant in Weymouth, Mass., and a 1,600-
megawatt power plant in Everett, Mass., are due to be completed
in the Spring of 2002.
With headquarters in Lexington, Mass., Raytheon is a global
technology leader in defense, government and commercial
electronics, and business and special mission aircraft.
SERVICE MERCHANDISE: Eyes Bondholder Interest Payment Recovery
--------------------------------------------------------------
In connection with their avoidance action regarding an alleged
preference arising from the $13.5 million interest payment made
to BNY which, in its capacity as indenture trustee and paying
agent, in turn disbursed to Service Merchandise Bondholders
within the 90 days prior to the Petition Date, the Service
Merchandise Company, Inc. Debtors asked the Court to lift the
Bank of New York Stay so that they can expedite action in
seeking class certification by a month, instead of serving a
complaint seeking recovery on each of the numerous individual
bondholders.
The Debtors told Judge Paine that payment to BNY, made late and
outside the ordinary course of business, is the subject of an
alleged preference as well as a subject of the Joint Review. The
Creditors have asserted that the Debtors could have avoided this
payment altogether had the Debtors commenced their chapter 11
cases in January 1999.
Because of the numerous individual defendants involved, the
Debtors have determined that the most efficient way is to file a
complaint naming a defendant class. Information from BNY shows
that approximately $600,000 of the Payment was paid to 756
Bondholders and the remaining $12,900,000 was transmitted to the
Depository Trust Corporation (DTC), the registered holder of
more than $286 million in principal amount of the Bonds, which
holds these Bonds in its name on behalf of the ultimate
beneficial owners of the Bonds. If sued individually, each of
the potentially thousands of Bondholders would be defendants and
each would require individual service and litigation. This would
entail substantial time and expense, the Debtors anticipated.
Moreover, the Debtors have determined that a number of the
Bondholders are sophisticated institutional investors. If some
of these are named defendant representatives in a class, they
can vigorously defend the claim, in contrast to the hundreds of
elderly or unsophisticated Bondholders. This will facilitate the
streamlining of the Adversary Proceedings, the Debtors noted.
However, their desired course of action and schedule, the
Debtors told Judge Paine, is hampered by the BNY Stay pursuant
to the Court's order governing the Adversary Proceedings, in
which Judge Paine directed that the complaint would be sealed
and service of process on all defendants would be stayed until
April 14, 2001 - ten days after the deadline for filing motions
to be heard at the April 24, 2001 omnibus hearing. As a result,
the Debtors note, the earliest that any motion for class
certification can be filed is May 2, 2001, for hearing at the
May 22, 2001 omnibus hearing - more than 60 days after the
filing of the class action complaint.
The Debtors explained that the mere filing of a class action
complaint does not guarantee that the case will be accepted by
the Court as a class action. In order for an action to proceed
as a class action, the extra step of class certification is
involved, in which the Court must affirmatively certify the
class after a hearing to determine whether certain requirements
are met. In practice, this means that after a class action
complaint is filed, the party seeking class treatment brings a
motion for the Court to certify a class and to appoint lead
plaintiffs or lead defendants to represent the class. This
class certification requirement delays the time before the
substance of the case can be pursued by the Debtors. Moreover,
until a class is certified by the Court, there is an element of
uncertainty as to whether the Debtors will be required to serve
hundreds or thousands of individual defendants.
The Debtors drew the Court's attention to the Federal Rules of
Civil Procedure, under which Debtors have only 120 days after
the complaint is filed to serve process on all defendants. Under
the current schedule with the BNY Stay in place, Debtors cannot
bring a motion for class certification until the May 2001
omnibus hearing - more than 60 days after the filing of the
class action complaint. 68 days will have passed before the
Debtors even know whether this Court will certify a defendant
class.
If the Court were to refuse to certify the case as class action,
Debtors will have only 52 days remaining to serve the thousands
of individual Bondholders across the country. In the exercise of
their fiduciary duties, the Debtors cannot wait that long.
Therefore, in the absence of relief from the BNY Stay, they must
begin serving the Complaint on individual Bondholders
immediately upon expiration of the stay. This action would be
costly but essential if the stay is not modified, the Debtors
told Judge Paine.
On the other hand, if their motion is granted, the Debtors are
prepared to file their motion for class certification to be
heard at the April 24, 2001 omnibus hearing. The Debtors believe
that accordingly, by adhering to the following schedule, the
parties will be able to accelerate the schedule of the planned
Bondholder Action by a full month.
Mar l4, 2001 Debtors file class action complaint
Mar 27, 2001 Court lifts BNY Stay
Mar 28, 2001 Debtors serve process on class
representatives
Mar 30, 2001 Debtors file motion for class
certification
Mar 31 - Apr 17 Discovery on class certification issues
Apr 19 Last day to file responses to motion for
class cert.
Apr 23 Last day for Debtors to reply to
responses to motion for class
certification
Apr 24 Hearing on Debtors' motion for class
certification
The Debtors represented that Bankruptcy courts have found
defendant class actions to be suitable for prosecuting
preference actions. Moreover, by limiting the number of
defendants served, the relief sought obviates BNY's concerns
that it will receive a substantial number of phone calls for
information about the complaint, the Debtors contended.
Therefore, the Debtors requested that the Court (i) modify the
BNY Stay and allow the Debtors to serve process on the limited
number of representative defendants specifically named in the
Debtors' complaint; (ii) set a schedule for the Debtors' Motion
for class certification.
Objection of the Bank of New York
The Bank of Now York, as indenture trustee for holders of the 9%
Senior Subordinated Debentures issued by Service Merchandise,
objected to the Debtor's Motion. The Trustee makes it clear that
it does not object to the Debtor being allowed to serve the
complaint and motion to certify a class upon the Trustee and a
limited number (less than ten) of holders of the Bonds. However,
the Trustee pointed out that:
(1) Any proposed class representative or class member
should have the right to seek a modification of any schedule on
discovery and on the class certification motion and any
objection dates;
(2) The proposed order submitted in connection with the
Motion should contain more detail as to the scope of all
discovery, and timing of responses to written discovery since
the total discovery period to be allowed is less than the 30 day
period allowed under the Federal Rules of Civil Procedure;
(3) The Debtor should be required to turn over information
it has which is relevant to the Class Certification Motion
including discovery it has obtained in the course of its
investigation of this potential class action, pursuant to Rule
26(a), upon the filing of such Class Certification Motion;
(4) The Bondholders' due process rights should not be
trampled;
(5) The period proposed by the Debtor for completing
discovery and a hearing on the class certification motion is too
short.
BNY told the Court that, the Bank, as trustee, and its legal
counsel are not serving and do not anticipate serving in the
future, as a representative of any group or class of Bondholders
in the Preference Action. As the allegations in the Preference
Action make it clear, the Trustee is not similarly situated to
its Bondholders in connection with the Preference Action.
However, the Trustee is concerned that the Bondholders who are
likely to be named potential class representatives be afforded
basic due process rights in the Preference Action, BNY told the
Court.
The Trustee also told the Court that Counsel for the Trustee has
confirmed that the Debtor has not, as of the filing of the
Motion, identified all potential class representatives, nor were
such persons or institutions served with the Motion.
Accordingly, such parties cannot respond to the motion. It is
likely that the first opportunity they will have to respond to
the schedule that will be imposed by this Motion is after they
have been served with the Class Certification Motion, the
Trustee observes. As with the Procedures Motion, the Trustee is
concerned with the estoppel effect any order entered in
connection with this Motion may have upon the Bondholders
and their putative class representatives.
Moreover, the Bank expects that, following receipt of the Class
Certification Motion, it is likely that potential class
representatives will have to undertake numerous tasks including
retention of counsel, counsel's review of the complaint and
Motion, counsel's review of the law on defendant class actions,
and related issues, consideration of the issues to be certified,
what discovery need be taken, and the scheduling of such
discovery, in connection with the Class Certification Motion.
Accordingly, the Trustee believes it is unlikely that the
potential class representatives will be able to prepare for the
Class Certification Motion within the limited amount of time the
Debtor has proposed. That is especially the case if the
individual Bondholders chosen to represent the class are
unfamiliar with legal process or do not have access to legal
counsel on a regular basis.
The Trustee suggested that there are other options available to
the Debtor such as exercising the discretion granted to it in
the February 27 Order and not pursuing individual Bondholders
who allegedly received $5,000 and less. The Trustee told the
Court that its review of its register shows that of the 756
Bondholders, 750 received less than $5,000 of the payment at
issue. In fact, the overwhelming majority (approximately 590)
received $1,000 or less. Assuming there are a total of 3,000
Bondholders, and assuming a proportional number of Bondholders
receiving more than $5,000 under the DTC system, the Trustee
infers that there are less than 30 Bondholders who received more
than $5,000 of the payment sought to be recovered. The Debtor
would have no difficulty serving such a small number of
Bondholders between April 13 (when the stay on service of
process is lifted) and July 13 2001, the Trustee asserted. This
would save legal costs too, the Trustee added.
The Trustee also suggested the option of having the Court extend
the 120 day period provided for in Rule 4(m), as the Court may
find that the litigation of the Class Certification Motion is
sufficient cause for such extension.
The Trustee also proposed that, to preserve the due process
rights of the Bondholders who are likely to be named as
potential class defendants, a Telephonic Status Conference be
held on or about April 10, at which time the potential defendant
class representatives or their counsel could seek a modification
of any of the deadlines or schedules imposed upon them, and
address any other issues in connection with the Class
Certification Motion.
The Trustee further proposed that the Court should set deadlines
in the order for serving responses to written discovery.
Moreover, to the extent the proposed status conference is
rejected by the Court, BNY suggests that the proposed order
should (a) limit the scope of the discovery to issues only
relevant in connection with the Class Certification Motion; and
(b) provide more detail as to the deadlines for responses to
written discovery.
In conclusion, the Trustee requested that the Court sustain the
objection and put into its order that:
(a) the Court will hold a status conference in connection
with the Class Certification Motion, including requests to
modify the discovery, response or hearing schedule entered in
connection with this Motion;
(b) provide deadlines in the Order for serving responses to
written discovery; and
(c) require that the Debtor, pursuant to Rule 26(a)(1)
turnover to the Trustee and the potential class representatives
all information identified in Rule 26(a)(1) which is relevant to
the Class Certification Motion, including the names, addresses
and phone numbers of all Bondholders the Debtor has discovered
through the date of the Class Certification Motion, and, to the
extent known, the amount each such Bondholder received of the
alleged voidable payment.
Debtors' Reply
The Debtors first pointed out that BNY's objection is untimely
because it is filed after the objection deadline.
If the Court were to consider BNY's Objection, the Debtors
contended, with respect to BNY's discovery-related requests,
that no significant discovery is necessary because all
Bondholders were similarly situated and the Bondholder class
will have identical defenses.
In any event, the Debtors said, the appropriate procedure is for
Debtors to negotiate such matters as interim discovery dates
and, if necessary, timing of status conferences with counsel for
the named class representatives, and the best solution is for
the Court to set the Debtors' proposed schedule as a preliminary
schedule without prejudice to requests for modification of the
schedule from any of the named class representatives.
Regarding BNY's criticism about the Debtors' failure to give
potential class representatives notice of the Motion, the
Debtors argue that it was at BNY's request that the Court's
order prohibited the Debtors from serving any complaint on BNY
or the Bondholders for a period of 30 days. The Debtors believed
that the Court's order prohibited any contact with Bondholders
that would alert them to the preference action in advance of
BNY's notice.
Finally, the Debtors noted that BNY's Objection belittles
Debtors' concerns about being able to serve thousands of
potential individual Bondholder defendants by claiming that
Debtors can always get an extension of time to serve the
complaint under Rule 4(m) of the Federal Rules of Civil
Procedure. The Debtors pointed out that such an extension is not
one that Debtors can rely upon. In contrast, the authorities
suggest that the only way to obtain a Rule 4 (m) extension is
for the party seeking the extension to first have made a good
faith effort to fully perform service on all defendants, the
Debtors noted. Accordingly, the Debtors contended that if their
class certification motion is unsuccessful, they will be put to
the task of serving as many individual Bondholder defendants as
possible before they can petition the Court for an extension of
time under Rule 4 (m). It is precisely this needless expenditure
of the estate assets that Debtors are trying to avoid, the
Debtors argued.
Accordingly, the Debtors requested that the Court overrule BNY's
objection and, as requested in the Debtors' motion, modify its
Stay Order to permit the Debtors to serve the class action
complaint on a limited number of named Bondholders and to set a
preliminary schedule, as set forth in the Motion, for the motion
for class certification.
The Court's Order
The Court finds that there will be no prejudice to BNY or its
bondholders by modifying the Stay Order to allow limited service
in order that the Debtors may commence the class certification
process. Therefore, the Court ordered that BNY's Objection is
overruled and the Debtors' motion is granted to the extent
necessary for the Debtors to serve BNY and certain
representative defendants consisting in part of institutional
investors.
Pursuant to the Court's order, the Debtors will file a motion to
certify a defendant class in the Bondholder Action on or before
March 30, 2001, and discovery on class certification issues will
be completed by April 17, 2001. All responses to the motion for
class certification will be filed on or before April 19, 2001,
and any reply will be filed on or before April 23, 2001, the
Court's order says. The motion will be heard on April 24, 2001
at 9:30 a.m. (Service Merchandise Bankruptcy News, Issue No. 17;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
SHOWSCAN ENTERTAINMENT: Creditors Committee Objects to Financing
----------------------------------------------------------------
The Official Committee of Unsecured Creditors for Showscan
Entertainment, Inc. filed its opposition to the debtor's motion
for interim and final orders approving postpetition financing.
The Committee asserted that the motion would allow Octograph,
Inc., the estate's major secured creditor, to obtain a lien
against the estate's major unencumbered asset, the Film Library,
and to later foreclose on that lien, while creditors and
administrative claimants potentially take nothing and the
case potentially winds up in Chapter 7.
The Committee stated that the debtor contends that it will run
out of cash without the immediate infusion from Octograph. The
Committee states that it is time for Octograph to contractually
commit to funding the plan. If Octograph will not make such a
commitment, the Committee asserts that the motion should be
denied.
In addition, the Committee asserted that there is no evidence
that the debtors attempted to obtain alternative financing and
that there is yet no valuation of the Film Library. In addition
the proposed financing includes "extremely onerous" provision
such as cross-collateralization and judicial allowance of the
validity, priority and amount of Octograph's approximately $6.5
million pre-petition secured claim. The Committee also complains
that the negotiations may not have been at arms' length; and the
Committee questions whether Octograph already has de facto
control over the debtor.
SOUTHERN CALIFORNIA: Agrees With State To Restore Finances
----------------------------------------------------------
At a joint press conference with Governor Gray Davis, Edison
International Chairman, President and CEO John E. Bryson
announced agreement on a plan to restore Southern California
Edison to financial health.
"This negotiated resolution with the Governor is far preferable
for our company and our employees and for our customers than is
going into bankruptcy," said Bryson.
"Through difficult negotiations over many weeks," Bryson noted,
"we believe we have achieved a practical approach. Our customers
and the state's economic vitality will benefit greatly from a
financially healthy utility which can retain experienced and
skilled employees and can invest the billions of dollars needed
to maintain a sound electric infrastructure system.
"The blunt reality remains that we in California face a large
challenge in restoring overall stability to the California
electric system," Bryson said. "Our employees at Edison can make
a large difference in helping to meet that challenge. Vital work
remains to be done with the Governor, the Legislature, the
California Public Utilities Commission, and other policymakers,
but this agreement is a large first step toward restoring
stability for much of Southern California."
This more detailed agreement follows the framework announced in
a February 23 preliminary agreement with the Governor. It was
approved by the Edison International and SCE boards of directors
this morning. Implementation will require further action by the
California Legislature and the state Public Utilities
Commission. Both Governor Davis and Bryson have urged swift
action by both bodies.
Major terms of the agreement include:
-- The state will receive a primary utility asset -- SCE's
12,000-mile transmission system. SCE employees will operate and
maintain the system through a contractual arrangement with the
state.
-- Edison International and SCE commit to no less than $3
billion of capital investment in utility infrastructure over the
next five years.
-- For the next 10 years, SCE will sell the output from its
power plants under cost-based, rather than market-based,
pricing.
-- For the next 10 years, Edison Mission Energy's
unregulated Sunrise power plant will sell its output exclusively
to California under cost-based pricing.
-- SCE agrees to forego development of 20,000 acres of its
Big Creek and Eastern Sierra hydroelectric properties and grants
conservation easements in perpetuity to the state for land and
habitat preservation on these properties.
-- SCE will gain a means of repaying the debt it incurred
buying power for its customers during the current rate freeze.
-- Upon implementation of this agreement by the Legislature
and CPUC, SCE will drop its lawsuit against state regulators.
A copy of the Memorandum of Understanding is available at
http://www.edisoninvestor.com/financialexc/SCE_MOU.pdf
Based in Rosemead, Calif., Edison International (NYSE: EIX) is
the parent company of Southern California Edison, Edison Mission
Energy, Edison Capital, Edison O&M Services, and Edison
Enterprises.
SOUTHWESTERN LIFE: Posts $4.8MM Net Loss In Fourth Quarter 2000
---------------------------------------------------------------
Southwestern Life Holdings, Inc. (Nasdaq: SWLH) reported a net
loss of $4.8 million or $0.53 per share for the fourth quarter
of 2000 and a net loss of $69.1 million or $7.63 per share for
the full year. This compares to a net loss of $111.7 million or
$12.34 per share for the fourth quarter of 1999 and a net loss
of $200.7 million or $22.16 per share for all of 1999. The
Company's 1999 fourth quarter and full year losses per common
share have been restated for purposes of comparison to reflect
common shares currently outstanding as a result of the Company's
recapitalization effective June 13, 2000.
The reduced losses compared to the prior year reflect the
completion of the recapitalization which, among other things,
reduced debt and interest costs and eliminated preferred stock
dividend requirements. In addition, the Company is continuing
its efforts to reduce expenses. The prior year quarter was also
impacted by an impairment of intangibles associated with the
sale of the former Payroll Sales Division totaling $95.5 million
in the fourth quarter of 1999. For the full year of 1999 an
additional $58.5 million was incurred for an impairment
provision associated with assets of businesses held for sale.
During the fourth quarter of 2000, the Company undertook an
analysis of its reserving and other actuarial practices. As part
of this review, the Company discovered that the method utilized
to calculate deferred policy acquisition costs and policy
liabilities on certain term policies was not correctly
reflecting reinsurance ceded. As a result of correcting this
methodology, deferred policy acquisition costs decreased
approximately $6.5 million and policy liabilities increased
approximately $1.0 million, which resulted in a combined net
after-tax loss of $4.9 million during the quarter. The Company
evaluated the effect of the corrections on prior periods and has
concluded that the effects would not be material to financial
position, results of operations or cash flow for those periods.
The loss for the quarter also includes additional severance
costs of $473,000 and additional policy liabilities of
approximately $2.3 million associated with the settlement of a
lawsuit. The recorded liability reflects costs the Company
considers likely to be incurred based only on known or
reasonably estimable factors. Therefore, the ultimate cost to
the Company may be greater than estimated and may have a
material adverse effect on the Company's financial condition,
results of operations and cash flows.
In addition to the fourth quarter items, the Company's net loss
for the full year included, among other things:
-- $12.9 million of losses on sales of investments;
-- $8.4 million loss on sale of Waco, Texas operations;
-- Approximately $11.0 million of additional income tax
expense principally reflecting an evaluation of the Company's
ability to utilize net operating loss carryforwards and capital
loss carryforwards as a result of the recapitalization and other
factors;
-- An additional $2.8 million incurred in the third quarter
and $2.1 million incurred in the second quarter as a result of
certain litigation and associated costs;
-- Approximately $11.4 million of costs associated with
bankruptcy and recapitalization; and
-- Restructuring charges of $735,000.
Also included in the net loss is an extraordinary loss of
approximately $2.4 million ($.27 per common share outstanding)
reflecting a premium of approximately $1.1 million paid on the
redemption of the Company's existing senior debt pursuant to the
recapitalization as required by the indenture for early payoff
and approximately $1.3 million of unamortized loan costs that
were written off as all of the Company's existing senior debt
and bank credit facility were repaid as part of the
recapitalization. The Company's Quarterly Report on Form 10-K,
filed with the Securities and Exchange Commission, discusses in
more detail the Company's financial condition and results of
operations.
The Company's common stock trades on the Nasdaq National Market
under the trading symbol "SWLH".
The Company is an insurance holding company the principal
operating subsidiary of which is Southwestern Life Insurance
Company, headquartered in Dallas, Texas. Southwestern Life
markets and underwrites life and health insurance, annuities and
long-term care insurance throughout the United States.
STELLAR FUNDING: Ratings On Class A-3, A-4 Notes Put On Watch
-------------------------------------------------------------
Standard & Poor's placed its ratings on the class A-3 and class
A-4 notes issued by Stellar Funding Ltd. and co-issued by
Stellar Funding CBO Corp., on CreditWatch with negative
implications.
The rating on the class A-3 notes was lowered to single-'A'-
minus from triple-'A', and the rating on the class A-4 notes was
lowered to double-'B' from single-'A' on Feb. 13, 2001.
The CreditWatch placements reflect the continuing deterioration
in the collateral pool credit quality and an increase in the
pool default rate since the ratings downgrades.
According to the March 9, 2001 trustee report, $36.9 million or
approximately 14% of the total collateral pool is in default.
Among the $36.9 million, $4.5 million was reported as defaulting
following the Feb. 13, 2001 ratings downgrades.
In addition, the ratings on two other bonds (approximately $8.5
million) listed as performing assets on the March 9, 2001
trustee report were downgraded to 'D' on April 3 and April 4,
2001, respectively.
The new defaults have resulted in the continuing violation of
the overcollateralization test, where defaults are immediately
excluded from the collateral pool for the calculation of the
overcollateralization ratio.
The overcollateralization test (currently 85.44% versus the
required minimum of 101.0%) has been out of compliance since
April 2000.
In the coming weeks, Standard & Poor's will perform new cash
flow analysis and will review the results from the cash flow
model runs and Standard & Poor's default model to evaluate the
effect of credit deterioration on the current ratings for the
class A-3 and A-4 notes.
Outstanding Ratings Placed On Credit Watch With Negative
Implications:
Stellar Funding Ltd./Stellar Funding CBO Corp.
Class Rating
To From
A-3 A-/Watch Neg A-
A-4 BB/Watch Neg BB
SUNTERRA CORPORATION: Engages Deloitte & Touche As Auditors
-----------------------------------------------------------
Arthur Andersen LLP, the independent accounting firm that
audited the financial statements of Sunterra Corporation for the
years ended December 31, 1999 and December 31, 1998, was
dismissed by the Company effective as of March 19, 2001. This
action was approved by the Audit Committee of the Board of
Directors of Sunterra. The Arthur Andersen LLP firm did not
audit any financial statements for Sunterra for any period after
the fiscal year ending December 31, 1999.
On March 19, 2001, Sunterra, upon receipt of an order of the
United States Bankruptcy Court for the District of Maryland
authorizing such engagement, formally engaged Deloitte & Touche
LLP to audit the Company's financial statements. Such engagement
was approved by the Audit Committee of the Board of Directors of
Sunterra.
Sunterra Corporation and certain of its affiliates are debtors
in possession under Chapter 11 of the United States Bankruptcy
Code.
TELEGEN CORPORATION: Foresees $7 Million Net Loss For FY 2000
-------------------------------------------------------------
Telegen Corporation has informed the SEC that Form 10-KSB for
the year ended December 31, 2000 could not be filed within the
prescribed period because the Company was unable to complete
certain information necessary to file a timely and accurate
report on the financial aspects of the Company. Such inability
could not have been eliminated without unreasonable effort and
expense, according to Telegen.
Telegen states: "It is anticipated that the results of
operations for the year ended December 31, 2000 will reflect a
loss of approximately $7,000,000, compared to a loss of
approximately $1,000,000 for the prior year."
TRANS WORLD: American Airlines Completes Acquisition Of Assets
--------------------------------------------------------------
A new era in aviation history begins as American Airlines
successfully completed its acquisition of most of the assets of
Trans World Airlines, Inc. The combined company will offer
travel to more than 300 cities worldwide on more than 900
aircraft, with an expanded and more convenient flight schedule.
Effective Monday, TWA will be operated by TWA Airlines LLC, a
wholly owned subsidiary of American Airlines. In the near term,
the two airlines will operate independently, including separate
reservations systems, payroll systems, aircraft, procedures and
policies. TWA employees, passengers and ticketholders will enjoy
business as usual during the transition period. Following the
transition period, TWA LLC will be fully integrated into
American's operations. Robert W. Baker, vice chairman of
American Airlines, will assume the role of CEO of TWA LLC, and
former TWA President and Chief Executive Officer Captain William
F. Compton will serve as president.
Donald J. Carty, chairman and CEO of American Airlines, said,
"Today, we celebrate a true milestone for the employees and
customers of both American Airlines and TWA. The combination
marks the beginning of a new era in aviation, as we bring
together some of the most valuable assets and some of the best
people in the industry.
The groundbreaking airline we are creating will offer expanded
service to customers and increased opportunity for employees,
and will provide significant value to American Airlines
shareholders."
Robert W. Baker said, "I am delighted to welcome TWA employees
to the American family, and I look forward to working with Bill
Compton to ensure a smooth transition. While we still have a lot
of operational details to work out, I am extremely excited by
the opportunity to bring together two of the industry's best
workforces and to begin to deliver benefits to our customers. It
is important to emphasize that, for now, TWA passengers and
ticketholders should expect no changes. TWA reservations
centers, ticketing procedures, most Aviators policies and most
Ambassador Clubs will continue to operate as normal. We'll
provide ample notice of any changes that will affect
passengers."
Captain William F. Compton added, "This marks the beginning of
the next chapter in TWA's storied history. I have known and
admired American's management team for many years, and I look
forward to working with them to build a prosperous future for
American Airlines. Significantly, this transaction ensures a
continued presence in the communities TWA serves and continued
opportunities for TWA employees."
American Airlines announced earlier this year that it had agreed
to purchase substantially all the assets of Trans World
Airlines, Inc. through a U.S. Bankruptcy Court proceeding for
approximately $625 million in cash and the assumption of
aircraft operating leases.
American Airlines, Inc.
American Airlines and its regional airline affiliate, American
Eagle Airlines, together serve more than 240 cities in 49
countries and operate approximately 4,100 daily flights.
American Airlines, which traces its beginnings to 1926, today
operates a fleet of 720 modern jetliners and employs more than
103,000 people worldwide. American Airlines and American Eagle
are both wholly owned by AMR Corp. (NYSE: AMR).
UNIVERSAL BROADBAND: Proposes Two-Key Employee Retention Program
----------------------------------------------------------------
Universal Broadband Networks, Inc. seeks an order authorizing it
to implement a retention plan in order to prevent its two key
employees from terminating their employment with the debtor.
Without these employees, the debtor claims that the debtor's
reorganization efforts will be jeopardized, "if not rendered
impossible."
Upon court approval, the debtors would pay $14,000 in bonuses to
the employees and $8,000 per month in monthly bonuses. The
employees would continue working at hourly rates of $200 and $80
per hour, and they would receive lump sum bonuses of $15,000 and
$7,000 respectively.
The debtors are represented by Albert, Weiland & Golden LLP.
US OFFICE: Judge Gives Final Nod On $25 Million DIP Loan Pact
-------------------------------------------------------------
Chief Judge Peter J. Walsh signed a final order granting U.S.
Office Products Co. authority to obtain $25 million in post-
petition financing and use cash collateral, according to
documents recently obtained by DBR. The hearing was held March
26 before the U.S. Bankruptcy Court in Wilmington, Del. Judge
Mary Walrath had given the company interim authorization on
March 6 to obtain a $25 million debtor-in-possession facility
and use cash collateral, pending the final hearing. (ABI World,
April 9, 2001)
W.R. GRACE: Names David B. Siegel as Chief Restructuring Officer
----------------------------------------------------------------
W. R. Grace & Co. (NYSE: GRA) related that David B. Siegel has
been given new business leadership responsibility by being named
to the newly created post of Chief Restructuring Officer
following last week's voluntary filing for reorganization under
Chapter 11 of the U.S. Bankruptcy Code. Siegel will continue to
serve as Grace's Senior Vice President and General Counsel.
"In addition to existing responsibilities as general counsel,
David will provide the leadership and management skills
necessary to develop a plan of reorganization for the Company,"
said Paul J. Norris, W. R. Grace's Chairman, President and Chief
Executive Officer. "Under his direction, the Company will be
able to address the growing demands on Grace created by the
unexpected increase in asbestos claims."
"A federal court-supervised Chapter 11 filing provides the best
forum for Grace to achieve predictability and fairness in the
claims settlement process," continued Norris. "It is our
intention to emerge from the Chapter 11 process as a stronger,
financially sound company. I am confident that David and his
team will be able to achieve these goals and resolve this
difficult issue."
Siegel joined Grace in 1977 as corporate counsel and has since
held several positions in Grace's corporate legal office. He was
elected to his current position in September 1998. Prior to
Grace, Siegel was associated with the New York law firm of
Kelley, Drye & Warren.
Siegel earned his B.A. degree from Columbia University and his
J.D. degree from New York University School of Law.
"The appointment made will allow others in the Company to
concentrate their efforts on serving our valued customers and
ensuring the long term growth of our business," stated Norris.
"Grace is a fundamentally sound company with annual revenues of
$1.6 billion and we have a clear leadership position in all of
our major markets, many of them in industries vital to the
economy. The combination of our strong cash flow and previously
announced financing from the Bank of America provides the
Company with sufficient liquidity to meet our future obligations
to employees, suppliers and vendors. We look forward to
concluding this process as soon as is possible."
Grace is a leading global supplier of catalysts and silica
products, specialty construction chemicals and building
materials, and container products. With annual sales of
approximately $1.6 billion, Grace has over 6,000 employees and
operations in nearly 40 countries. For more information, visit
Grace's web site at www.grace.com.
W.R. GRACE: Retains Kirkland & Ellis As Lead Counsel
----------------------------------------------------
W.R. Grace & Co., and its debtor-affiliates asked Judge Newsome
for permission to employ Kirkland & Ellis as their lead
bankruptcy counsel pursuant to 11 U.S.C. Sec. 327(a).
Specifically, Kirkland & Ellis will:
(a) advise the Debtors with respect to their powers and
duties as debtors in possession in the continued management and
operation of their businesses and properties;
(b) attend meetings and negotiate with representatives of
creditors and other parties in interest;
(c) take all necessary action to protect and preserve the
Debtors' estates, including the prosecution of actions on the
Debtors' behalf, the defense of any action commenced against the
Debtors, negotiations concerning all litigation in which the
Debtors are involved, including, but not limited to, mass-tort
litigation, and objections to claims filed against the estates;
(d) prepare on behalf of the Debtors all motions,
applications, answers, orders, reports, and papers necessary to
the administration of the estates;
(e) negotiate and prepare on the Debtors' behalf a plan of
reorganization, disclosure statement, and all related agreements
and/or documents, and take any necessary action on behalf of the
Debtors to obtain confirmation of such plan;
(f) represent the Debtors in connection with obtaining
postpetition loans;
(g) advise the Debtors in connection with any potential
sale of assets;
(h) appear before this Court, any appellate courts, and the
United States Trustee and protect the interests of the Debtors'
estates before such Courts and the United States Trustee;
(i) consult with the Debtors regarding tax matters; and
(j) perform all other necessary legal services and provide
all other necessary legal advice to the Debtors in connection
with the Chapter 11 Cases.
From Kirkland & Ellis' office in Chicago, James H.M. Sprayregen,
Esq., leads the team of attorneys representing W.R. Grace.
Partners David M. Bernick, Esq., Reed S. Oslan, Esq., Andrew R.
Running, Esq., Mark E. Grummer, Esq., and Associates James W.
Klapp, III, Esq., Christopher B. Sullivan, Esq., Douglas G.
Smith, Esq., Scott A. McMillin, Esq., Kristin E. Rooney, Esq.,
Samuel A. Schwartz, Esq., Roger J. Higgins, Esq., and David A.
Codevilla, Esq., round-out the K&E legal team.
David B. Siegel, Senior Vice President and General Counsel of
W.R. Grace & Co., advised the Court that the Company paid K&E
approximately $2,100,000 for prepetition services over the past
6 months or so and paid a $1,500,000 retainer to K&E in
contemplation of these chapter 11 cases.
Mr. Sprayregen attested that Kirkland & Ellis is a
"disinterested person" as that term is defined in 11 U.S.C. Sec.
101(14) of the Bankruptcy Code, as modified by 11 U.S.C. Sec.
1107(b), because the Firm, its partners, counsel and associates:
(a) are not creditors, equity security holders or insiders
of the Debtors;
(b) are not and were not investment bankers for any
outstanding security of the Debtors;
(c) have not been, within three years before the date of
the filing of the Debtors' Chapter 11 Cases, (i) investment
bankers for a security of the Debtors, or (ii) an attorney for
such an investment banker in connection with the offer, sale, or
issuance of a security of the Debtors; and
(d) are not and were not, within two years before the date
of filing of the Debtors' Chapter 11 Cases, a director, officer,
or employee of the Debtors or of any investment banker for a
security of the Debtors.
Mr. Sprayregen advised that he undertook a conflict check. While
he is confident that neither he, K&E, nor any partner, counsel
or associate of the Firm represents a party-in-interest other
than the Debtors in connection with these chapter 11 cases, that
search uncovered many relationships with certain W.R. Grace
vendors, customers, lenders and other parties-in-interest in
matters wholly unrelated to W.R. Grace's chapter 11 cases:
* ABN AMRO Bank N.V.
* ABN AMRO Chicago Corp.
* ABN AMRO Informational Technology Services
* ABN AMRO Private Equity
* AIG Capital Partners, Inc.
* Akzo Coatings, Inc.
* Akzo Nobel, Inc.
* Alcoa, Inc.
* American International Group, Inc.
* American National Bank & Trust
* Amoco Oil Co.
* Amoco Production Co.
* Angus Chemical Company
* Atofina Chemicals, Inc. (f/k/a ELF Atochem North America,
Inc., a/f/k/a Pennwalt Corp.)
* Atofina Petro-Chemicals, Inc.
* Banc America Capital Investors II, L.P.
* Banc of America Securities, L.L.C. Montgomery Division
* Banc One Capital Markets, Inc.
* Banc One Mezzanine Corp.
* Banc One Mezzanine/Prairie Cap Mezzanine
* BancAmerica Capital Investments
* BancAmerica Corporation
* BancAmerica Robertson Stephens;
* Bank of America Capital Corporation
* Bank of America Corporation
* Bank of America N.T. & S.A.
* Bank of America, N.A.
* Bank of Montreal, Dank of America
* Bank One Corp.
* Bank One N.A.
* Barclays Bank P.L.C.
* BASF Corp.
* Bayer A.G.
* Bayer Corp.
* BP Amoco Chemical Company
* BP Amoco, PLC
* BP Energy Ltd.
* BP International Ltd.
* Cameron Ashley Building Products
* Canada Trust
* Chase Bank of Texas, N.A.
* Chase Capital Partners
* Chase Capital Partners
* Chase Manhattan Banc, Irwin Trust
* Chase Manhattan Bank Trust
* Chase Manhattan Private Bank
* Chase Merchant Banking
* Chase Merchant/CIBC Wood Grundy
* Chevron Corp.
* Chevron Phillips Chemical Company, L.P.
* Chevron Research & Technology Co.
* Chevron U.S.A.
* Citibank F.S.H.
* Citibank Global Asset Management
* Citibank, N.A.
* Citicorp Diner's Club, Inc.
* Citicorp Mezzanine III, LP.
* Citicorp Mezzanine Investment
* Citicorp Mezzanine Partners, L.P.
* Citicorp US, Inc.
* Citicorp Venture Capital, Ltd.
* Citigroup, Inc.
* Climax Molybdenum Marketing Corp. and Phelps Dodge
Corporation
* Colgate-Palmolive Company, Inc.
* Conoco, Inc.
* Crown Cork & Seal Co., Inc.
* CSI Holdings Corp.
* CVC Capital Funding, L.L.C.
* CVC Capital Partners Limited
* Daramic, Inc.
* DavCo Restaurants
* Deknatel
* Deposit Guaranty Corp.
* Deposit Guaranty National Bank
* Dow Corning Corp.
* Dresdner Bank
* Dresdner Kleinwort Benson
* Dupont/Tempe, Arizona
* E.I. Dupont DeNemours and Company, Inc.
* ELF Atochem S.A.
* Equilon Enterprises, LLC
* Fabro Oriented Polymers, Inc.
* Fibertech Group, Inc.
* First Chicago Corp.
* First Chicago Equity Corp.
* First Chicago Venture Corp.
* First National Bank of Chicago
* First Union Corporation
* First Union National Bank
* G.E. Capital Fleet Services, Inc.
* Gary A. Messersmith and Joe E. Coleman as Trustees of the
Jaime Abercrombie Robinson 1967 Trust
* General Electric Corp.
* General Latex & Chemical Co.
* Graphic Design Technologies
* Great Lakes Chemical Corp.
* Guardian Industries Corp.
* Hampshire Chemical Company
* Henkel Corp.
* Honeywell (Gomar) - Linden, New Jersey
* Honeywell International, Inc.
* HSBC Private Equity Europe, Ltd.
* HSBC/Marine Midland
* Huttig Building Products, Inc.
* IMC Global, Inc.
* International Media Group
* J.P. Morgan Chase & Co.
* J.P. Morgan Securities, Inc.
* Jacques Gliksherg, an officer of Bank of America N.T. &
S.A.
* Joseph Rygiel, an officer of Bank of America N.T. & S.A.
* Kaneb Pipeline Operating Partnership, L.P.
* Kemet Electronics Corp.
* Kenab Services, Inc.
* Kennecott Energy Co.
* LaFarge Corp.
* LaSalle National Bank
* Loctite Corp.
* Marco Viola, an officer of Bank of America N.T. & S.A.
* Mitsui - New York, New York
* Mitsui & Co. (U.S.A.), Inc.
* Mobil Oil Company
* Neenah Foundry Company
* Northern Trust Bank
* Northern Trust Corp.
* O'Sullivan Graev
* Polyfibron Technologies, Inc.
* Polymer Group, Inc.
* Redland Aggregate North America, Inc.
* Reilly Industries, Inc.
* Rio Tinto Iron & Titanium, Inc.
* Robert Grady, senior managing director of Robertson,
Stephens & Co.
* Safeway, Inc.
* Shell Chemical Company
* Shell Oil Company
* Smith Barney Inc.
* Stephen Zimmer, an officer of Bank of America N.T. & S.A.
* Sun Refining Marketing Company
* Sunoco Products Company
* Sunoco, Inc.
* Texas Commerce National Bank Association
* The Citibank Private Bank
* The Dow Chemical Company, Inc.
* The Intertech Group, Inc.
* The John Nuveen Company
* The Saint Paul Companies, Inc.
* The Salvation Army
* The Toronto Dominion Bank
* Thomas C. Benison, an officer of Bank of America N.T. &
S.A.
* Thomas E. Reilly, an officer/director of Bank One.
* Toronto Dominion Capital, Inc.
* Toyota Motor Corp.
* United States Gypsum Company
* USG Corp.
* Vulcan Materials, Inc.
* Wachovia Bank and Trust Company
* Wachovia Bank and Trust Company, N.A.
* Wachovia Bank of North Carolina
* Wachovia Capital Associates, Inc.
* Wachovia Capital Inc.
* Wachovia Rank of North Carolina
* Wendy's Restaurants
Mr. Sprayregen is convinced that none of these relationships
impair his or his Firm's disinterestedness.
Out of an abundance of caution, Mr. Sprayregen makes certain
asbestos litigation-related disclosures:
Babcock & Wilcox
K&E represents The Babcock & Wilcox Company and certain of its
affiliates in respect of its ongoing chapter 11 reorganization
that is currently under the jurisdiction of the United States
Bankruptcy Court for the Eastern District of Louisiana, Case
Nos. 00-10992, 10993, 10994 and 10995. To the best of Mr.
Sprayregen's knowledge, Babcock & Wilcox and the Debtors are not
adverse to each other in any matters, including, but not limited
to, any litigation relating to asbestos (or, for that matter,
any other litigation), nor have the Debtors or Babcock & Wilcox
asserted any claims against each other. There is a possibility,
however, that future claims and/or litigation could be brought
in which the Debtors and Babcock & Wilcox could be adverse to
one another. For example, the Debtors belong to an Unofficial
Committee of Asbestos Health Claim Co-Defendants Creditors that
filed a motion with the Louisiana Bankruptcy Court on January
22, 2001, seeking appointment of a Futures Representative for
contribution and other claims that may be filed in the future.
The filing of this motion suggests that the Debtors may file a
contribution or other claim against Babcock & Wilcox before the
claims bar date set by the Louisiana Bankruptcy Court of July
30, 2001 (as is typically the case in asbestos-related chapter
11 proceedings where large numbers of asbestos co- defendants
tend to file contribution or cross-claims as a matter of
routine). Babcock & Wilcox may take similar actions in these
Chapter 11 Cases. In the event of any adversity between the
Debtors and Babcock & Wilcox, K&E will not represent either the
Debtors or Babcock & Wilcox with respect to any such claims.
K&E's representation of Babcock & Wilcox as section 327(a)
counsel was challenged in the Babcock & Wilcox proceeding on the
ground that the fling of the complaint rendered K&E not
disinterested as to Babcock & Wilcox; after extensive briefing
and argument, that challenge was denied by order of U.S.
Bankruptcy Judge Jerry A. Brown on November 3, 2000 (appeal of
which was denied by order of United States District Court Judge
Sarah Vance on January 29, 2001, on the grounds that
interlocutory appeals of bankruptcy courts' determinations about
attorney disqualification are routinely declined because such
matters are questions of fact that are not the proper subject
for interlocutory appeal; furthermore, the appeal did not
contain a controlling issue of law in which there was a
substantial difference of opinion).
Brown & Williamson
K&E represents Brown & Williamson Tobacco Corporation in
litigation relating to asbestos and tobacco. In particular, K&E
represents Brown & Williamson with regard to a purported class-
action lawsuit against certain cigarette manufacturers filed in
September, 2000, with an amended complaint filed on December 22,
2000, entitled In re Simon II Litigation, Case No. 2000 CV 05332
(E.D.N.Y.). In Simon II, plaintiffs seek to (i) consolidate into
a non-opt-out punitive damages class (i.e., putative class
members may not opt-out of the class) and build upon the
punitive damages claims of certain underlying currently-pending
complaints and actions generally characterized as smokers'
actions, union health fund actions, third-party payor actions
and actions brought by asbestos entities and (ii) consolidate
into an opt-out class (i.e., the putative class members may opt-
out of the class at their discretion) with respect to fraudulent
conduct claims and build upon the compensatory damages claims of
certain underlying currently-pending complaints and actions
generally characterized as smoker's actions, union health fund
actions, third-party payor actions and actions brought by
asbestos entities. In the Simon II complaint, plaintiffs define
these actions as the "Underlying Actions." The Simon II
complaint seeks to certify a class of plaintiffs with respect to
Underlying Actions containing several subclasses, one of which
subclasses would include, inter alia:
"Certain Asbestos Entities and Asbestos Entities Trusts,
including: (i) all manufacturers, distributors and producers of
asbestos or asbestos-containing products ("Asbestos Entities")
that as of September 6, 2000, were subject to the supervision of
a United States Bankruptcy Court or a United States District
Court exercising bankruptcy jurisdiction; (ii) all Asbestos
Entities that (a) have in the past been, but are not now,
subject to the supervision of a United States Bankruptcy Court
or a United States District Court exercising bankruptcy
jurisdiction, and (b) have, by the date this Subclass is
certified, asserted a claim or claims against Defendants arising
from Defendants' fraudulent scheme to shift their liabilities to
the asbestos industry, as described herein; and (iii) successors
to Asbestos Entities' liabilities for asbestos-related personal
injuries that as of the date of this Complaint are or have in
the past been subject to the supervision of a United States
Bankruptcy Court or a United States District Court exercising
bankruptcy jurisdiction ("Asbestos Entities' Trusts")."
Simon II complaint at 14-15. To date, the putative class sought
in Simon II has not been certified. Even if such a class were to
be certified, the subclass described above does not, on its
face, include the Debtors (without specific, affirmative action
by the Debtors to assert a claim as described above) because the
Petition Date in the Chapter 11 Cases is after the date of the
Simon II complaint. Finally, although the Debtors are not
included in either the putative opt-out class or the putative
non-opt-out class, on the Petition Date, the automatic stay
provisions of the Bankruptcy Code immediately preclude any such
class or classes from proceeding in Simon II on behalf of the
Debtors. To the best of Mr. Sprayregen's knowledge, the Debtors
are not parties in any of the Underlying Actions and the Debtors
are not among the companies covered by the putative Simon II
class, were such a class to be certified.
K&E also represents Brown & Williamson in a case brought by the
Johns-Manville Trust that is now pending before the same court
as Simon II under the caption Falise v. American Tobacco, CV-99-
7392. On January 25, 2001, a mistrial was declared in Falise
after an eight-week trial, with the jury split 10-2 in favor of
the tobacco defendants. A motion to dismiss Falise under Fed. R.
Civ. P. 50 has been filed and is currently pending before the
Falise Court.
K&E also represents Brown & Williamson in other asbestos-related
litigation matters involving Owens Corning and its affiliated
entity, Fibreboard Corporation, H.K. Porter Co. and Raymark
Industries, Inc. Brown & Williamson also has been sued by other
plaintiffs with alleged asbestos liability, specifically, Kaiser
Aluminum & Chemical Corp., Asbestos Claims Management Corp. (fka
National Gypsum Co.), Combustion Engineering, T&N, Ltd.,
Uniroyal Holdings, Inc., A.P. Green Industries, Inc, and A. P.
Green Services, Inc.
To the best of Mr. Sprayregen's knowledge, Brown & Williamson
and the Debtors are not adverse to each other in any litigation
relating to tobacco or asbestos (or, for that matter, any other
litigation). There is a possibility, however, that future
litigation could be brought in which the Debtors and Brown &
Williamson could be adverse to one another. In the event of any
such adversity between Brown & Williamson and the Debtors, the
Debtors have agreed that K&E will not represent any interest
adverse to the Debtors and cannot and will not represent the
Debtors with regard to any claims against Brown & Williamson.
Further, the Debtors have consented to K&E's ongoing
representation of Brown & Williamson and of the Debtors under
the above-mentioned circumstances.
Center for Claims Resolution
In addition, it is possible that the Debtors would have claims
against the Center for Claims Resolution, of which organization
one or more K&E clients is or has been a member. Additionally,
the CCR could have claims against the Debtors. The Debtors have
agreed that K&E would not represent them in connection with any
such claim, and K&E has agreed that it would not represent a
party adverse to the Debtors that was party to such a claim. K&E
will not participate in evaluating any potential claims against
the CCR.
Armstrong World Industries
K&E has also been retained by Armstrong World Industries, Inc.,
to provide legal advice regarding various asbestos liability and
related issues in connection with Armstrong's chapter 11
proceeding in this Court, Case No. 00-4471 (JJF). K&E's
representation of Armstrong is subject to court approval. To the
best of my knowledge, Armstrong and the Debtors are not adverse
to each other in any litigation relating to asbestos (or, for
that matter, any other litigation), nor have the Debtors or
Armstrong asserted any such claims against the other. There is a
possibility, however, that future claims and/or litigation could
be brought in which the Debtors and Armstrong could be adverse
to one another. In the event of any adversity between the
Debtors and Armstrong, K&E will not represent either the Debtors
or Armstrong with respect to any such claims. K&E will not
participate in evaluating any potential claims against
Armstrong.
Other Asbestos Litigation Targets
K&E represents hundreds of additional clients, some of whom
maybe subject to asbestos-related claims and may, theoretically,
assert asbestos-related claims against the Debtors or against
whom the Debtors may assert asbestos-related claims. Because of
the broad sweep of asbestos litigation, K&E is not necessarily
aware of which of its clients that may have such potential
claims unless there is an existing matter on which the Debtors
and a client are adverse or the K&E client's role in asbestos
litigation is well-known. With regard to the latter situation,
for example, K&E has represented, and from time to time
continues to represent, USG Corporation or its subsidiary,
United States Gypsum Co., in certain asbestos- related matters.
To the best of Mr. Sprayregen's knowledge, the USG Entities and
the Debtors are not adverse to each other in any litigation
relating to asbestos (or, for that matter, any other
litigation), nor have the Debtors or the USG Entities asserted
any such claims against the other. There is a possibility,
however, that future claims and/or litigation could be brought
in which the Debtors and the USG Entities could be adverse to
one another. In the event of any adversity between the Debtors
and the USG Entities, K&E will not represent the USG Entities
with regard to any claims against the Debtors, and K&E will not
represent the Debtors with regard to any claims against the USG
Entities. K&E will not participate in evaluating any potential
claims against the USG entities or any other entities that are
clients of K&E.
* * *
W.R. Grace told the Court that it retained K&E in late 2000 in
contemplation of these chapter 11 cases. Prior to the Petition
Date, K&E received approximately $2,100,000 for its bankruptcy
counsel. In addition, K&E received a $1,250,000 retainer from
W.R. Grace for post-petition services. K&E will bill the Debtors
at the Firm's [undisclosed] customary hourly rates. (W.R. Grace
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
* Meetings, Conferences and Seminars
------------------------------------
April 19-21, 2001
ALI-ABA
Fundamentals of Bankruptcy Law
Pan Pacific Hotel, San Francisco, California
Contact: 1-800-CLE-NEWS
April 19-22, 2001
American Bankruptcy Institute
Annual Spring Meeting
J.W. Marriott, Washington, D.C.
Contact: 1-703-739-0800 or http://www.abiworld.org
April 26-29, 2001
COMMERCIAL LAW LEAGUE OF AMERICA
71st Annual Chicago Conference
Westin Hotel, Chicago, Illinois
Contact: Comlawleag@aol.com
April 30-May 1, 2001
PRACTISING LAW INSTITUTE
23rd Annual Current Developments
in Bankruptcy and Reorganization
PLI California Center, San Francisco, California
Contact: 1-800-260-4PLI or http://www.pli.edu
May 14, 2001
American Bankruptcy Institute
NY City Bankruptcy Conference
Association of the Bar of the City of New York
New York, New York
Contact: 1-703-739-0800 or http://www.abiworld.org
May 25, 2001
American Bankruptcy Institute
Canadian-American Bankruptcy Program
Hotel TBA, Toronto, Canada
Contact: 1-703-739-0800
June 7-10, 2001
American Bankruptcy Institute
Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, Michigan
Contact: 1-703-739-0800 or http://www.abiworld.org
June 13-16, 2001
Association of Insolvency & Restructuring Advisors
Annual Conference
Hyatt Newporter, Newport Beach, California
Contact: 541-858-1665 or aira@ccountry.com
June 14-16, 2001
ALI-ABA
Partnerships, LLCs, and LLPs: Uniform Acts,
Taxations, Drafting, Securities, and Bankruptcy
Swissotel, Chicago, Illinois
Contact: 1-800-CLE-NEWS
June 18-19, 2001
American Bankruptcy Institute
Investment Banking Program
Association of the Bar of the City of New York,
New York, New York
Contact: 1-703-739-0800 or http://www.abiworld.org
June 21-22, 2001
RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC.
Bankruptcy Sales & Acquisitions
The Renaissance Stanford Court Hotel,
San Francisco, California
Contact: 1-903-592-5169 or ram@ballistic.com
June 25-26, 2001
TURNAROUND MANAGEMENT ASSOCIATION
Advanced Education Workshop
The NYU Salomon Center at the Stern School
of Business, New York, NY
Contact: 312-822-9700 or info@turnaround.org
June 28-July 1, 2001
NORTON INSTITUTES ON BANKRUPTCY LAW
Western Mountains, Advanced Bankruptcy Law
Jackson Lake Lodge, Jackson Hole, Wyoming
Contact: 770-535-7722 or Nortoninst@aol.com
June 28-July 1, 2001
American Bankruptcy Institute
Hawaii CLE Program
Outrigger Wailea Resort, Maui, Hawaii
Contact: 1-703-739-0800 or http://www.abiworld.org
June 30 through July 5, 2001
National Association of Chapter 13 Trustees
Annual Seminar
Marriott Hotel and Marina, San Diego, California
Contact: 1-800-445-8629 or http://www.nactt.com
July 13-16, 2001
American Bankruptcy Institute
Northeast Bankruptcy Conference
Stoweflake Resort, Stowe, Vermont
Contact: 1-703-739-0800 or http://www.abiworld.org
July 26-28, 2001
ALI-ABA
Chapter 11 Business Reorganizations
Hotel Loretto, Santa Fe, New Mexico
Contact: 1-800-CLE-NEWS
August 1-4, 2001
American Bankruptcy Institute
Southeast Bankruptcy Conference
The Ritz-Carlton, Amelia Island, Florida
Contact: 1-703-739-0800 or http://www.abiworld.org
September 6-9, 2001
American Bankruptcy Institute
Southwest Bankruptcy Conference
The Four Seasons Hotel, Las Vegas, Nevada
Contact: 1-703-739-0800 or http://www.abiworld.org
September 7-11, 2001
National Association of Bankruptcy Trustees
Annual Conference
Sanibel Harbor Resort, Ft. Myers, Florida
Contact: 1-800-445-8629 or http://www.nabt.com
September 13-14, 2001
ALI-ABA
Corporate Mergers and Acquisitions
Washington Monarch, Washington, D. C.
Contact: 1-800-CLE-NEWS or http://www.ali-aba.org
September 14-15, 2001
American Bankruptcy Institute
ABI/Georgetown Program "Views from the Bench"
Georgetown University Law Center, Washington, D.C.
Contact: 1-703-739-0800 or http://www.abiworld.org
October 3-6, 2001
American Bankruptcy Institute
Litigation Skills Symposium
Emory University School of Law, Atlanta, Georgia
Contact: 1-703-739-0800 or http://www.abiworld.org
October 12-16, 2001
TURNAROUND MANAGEMENT ASSOCIATION
2001 Annual Conference
The Breakers, Palm Beach, FL
Contact: 312-822-9700 or info@turnaround.org
October 16-17, 2001
International Women's Insolvency and
Restructuring Confederation (IWIRC)
Annual Fall Conference
Somewhere in Orlando, Florida
Contact: 703-449-1316 or
http://www.inetresults.com/iwirc
November 29-December 1, 2001
American Bankruptcy Institute
Winter Leadership Conference
La Costa Resort & Spa, Carlsbad, California
Contact: 1-703-739-0800 or http://www.abiworld.org
January 31 - February 2, 2002
American Bankruptcy Institute
Rocky Mountain Bankruptcy Conference
Westin Tabor Center, Denver, Colorado
Contact: 1-703-739-0800 or http://www.abiworld.org
January 11-16, 2002
Law Education Institute, Inc
National CLE Conference(R) - Bankruptcy Law
Steamboat Grand Resort
Steamboat Springs, Colorado
Contact: 1-800-926-5895 or
http://www.lawedinstitute.com
February 7-9, 2002 (Tentative)
American Bankruptcy Institute
Rocky Mountain Bankruptcy Conference
Westin Tabor Center, Denver, Colorado
Contact: 1-703-739-0800 or http://www.abiworld.org
March 15, 2002 (Tentative)
American Bankruptcy Institute
Bankruptcy Battleground West
Century Plaza Hotel, Los Angeles, California
Contact: 1-703-739-0800 or http://www.abiworld.org
April 18-21, 2002
American Bankruptcy Institute
Annual Spring Meeting
J.W. Marriott, Washington, D.C.
Contact: 1-703-739-0800 or http://www.abiworld.org
May 13, 2002 (Tentative)
American Bankruptcy Institute
New York City Bankruptcy Conference
Association of the Bar of the City of New York,
New York, New York
Contact: 1-703-739-0800 or http://www.abiworld.org
June 6-9, 2002
American Bankruptcy Institute
Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, Michigan
Contact: 1-703-739-0800 or http://www.abiworld.org
June __, 2002
American Bankruptcy Institute
Delaware Bankruptcy Conference
Hotel Dupont, Wilmington, Delaware
Contact: 1-703-739-0800 or http://www.abiworld.org
December 5-8, 2002
American Bankruptcy Institute
Winter Leadership Conference
The Westin, La Plaoma, Tucson, Arizona
Contact: 1-703-739-0800 or http://www.abiworld.org
April 10-13, 2003
American Bankruptcy Institute
Annual Spring Meeting
Grand Hyatt, Washington, D.C.
Contact: 1-703-739-0800 or http://www.abiworld.org
December 5-8, 2003
American Bankruptcy Institute
Winter Leadership Conference
La Quinta, La Quinta, California
Contact: 1-703-739-0800 or http://www.abiworld.org
April 15-18, 2004
American Bankruptcy Institute
Annual Spring Meeting
J.W. Marriott, Washington, D.C.
Contact: 1-703-739-0800 or http://www.abiworld.org
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
*********
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 are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
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, Larri-Nil Veloso, Aileen Quijano and 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-
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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 ***