/raid1/www/Hosts/bankrupt/TCR_Public/011002.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, October 2, 2001, Vol. 5, No. 192
Headlines
360NETWORKS INC: Wants to Assume Amended Contracts with Dominion
AMES DEPARTMENT: 28 Utilities Want $3.5 Million of Deposits
AMF BOWLING: Parent Taps Arthur Andersen As Accounting Advisor
ARMSTRONG HOLDINGS: Gets Okay to Hire Andersen As Tax Advisor
ASSISTED LIVING: Files Chapter 11 with Prenegotiated Plan in DE
ASSISTED LIVING: Case Summary & 20 Largest Unsecured Creditors
ATLANTIC COAST: Executives Agree to Pay Cuts to Reduce Costs
BRIDGE INFORMATION: Rejecting MDC & Cantor Fitzgerald Contracts
CARMIKE CINEMAS: Files Reorganization Plan in Delaware
COMDISCO INC: Selling Company Aircraft to EMAX for $8 Million
DAIRY MART: Moody's Drops All Ratings After Chapter 11 Filing
ENTRADE: Will Seek Review of NYSE Decision to Suspend Trading
FEDERAL-MOGUL: Commences U.S. Chapter 11 & U.K. Administration
FEDERAL-MOGUL: Case Summary & 20 Largest Unsecured Creditors
GARDEN WAY: Court Fixes November 6 Claims Bar Date
GENESISINTERMEDIA: Nasdaq Halts Trading, Asking for More Info
GEOMAQUE EXPLORATIONS: In Talks With Lenders to Restructure Loan
HEILIG-MEYERS: Fitch Drops MacSaver Certificates to D From C
ICG COMMS: Gets Third Extension of Removal Period to February 7
LAIDLAW INC: Court Fixes October 16 General Claims Bar Date
LEINER HEALTH: Forbearance Period Further Extended to November 2
LOEWEN GROUP: Signs Up Butzel Long As Special Counsel
MARINER POST-ACUTE: Wants Lease Decision Time Extended to Jan 31
MAXICARE HEALTH: Court Fixes November 30 as Claims Deadline
MEMC ELECTRONIC: Observer Says TPG/E.ON Deal Shafts MEMC Equity
MESABA AIRLINES: Commences Restructuring After Terrorist Attacks
MESA AIR: Implements New Stock & Bonus Programs for Employees
NATIONWIDE COMPUTERS: Court Appoints Andy Plotzker As Liquidator
NEXTWAVE: Court Approves $2.5BB Debt Financing with UBS Warburg
ONSITE ACCESS: Needs Until Nov. 30 to Propose a Plan
ONSITE ACCESS: Court Fixes October 15 Bar Date for Filing Claims
OWENS CORNING: Wants Disclosure of Asbestos Claims Information
PACIFIC GAS: Court Okays Proposed Interim Compensation Protocol
PHAR-MOR: Moody's Junks Ratings Following Bankruptcy Filing
PILLOWTEX: Gets Okay to Pay Prepetition Personal Property Taxes
POWERBRIEF: Files Chapter 11 Petition in Texas
PSINET INC: Court Denies NTFC Relief From Automatic Stay
PUTNAM LOVELL/FEP: Fitch Places 8 Tranches on Watch Negative
QUANTUM MANAGEMENT: Lease Disposition Period Extended to Dec. 31
RANCH*1 INC: Creditors' Meeting Slated for October 9
STANDARD AUTOMOTIVE: Bank Lenders Agree to Forbear Until Oct. 5
TEXAS EQUIPMENT: US Trustee Sets Creditors' Meeting for Oct. 25
USG CORP: Panel Urges Court to Allow Members to Trade Securities
VIASOURCE COMMS: Chief Financial Officer Resigns
WASH DEPOT: Case Summary & 20 Largest Unsecured Creditors
WASTE SYSTEMS: Wants Exclusive Period Extended to October 31
WASTE SYSTEMS: Court Okays Sale of Mass. Assets to BFI for $2.4M
WHEELING-PITTSBURGH: Employees Ratify Labor Contract Extension
WINSTAR COMMS: Court Okays Arent Fox as Debtors' Special Counsel
* Lazard Launches New Distressed Debt Fund
*********
360NETWORKS INC: Wants to Assume Amended Contracts with Dominion
----------------------------------------------------------------
360networks inc. seeks the Court's authority to amend and assume
certain executory contracts with Dominion Telecom, Inc.
Alan J. Lipkin, Esq., at Willkie Farr & Gallagher, in New York,
New York, relates that 360networks is a party to two pre-
petition contracts with Dominion:
(1) the Agreement for Construction and Sale of Conduit System
dated May 2, 2001; and
(2) the Telecommunications System Maintenance Agreement dated
May 2, 2001.
The Construction Agreement, Mr. Lipkin explains, provides two
basic tasks for 360networks:
(a) to construct and sell to Dominion a 1 and 1/4 inch high
density polyethylene conduit for telecommunication
purposes along a route of approximately 30 miles between
Hays, Indiana and Chicago, Illinois; and
(b) to install and test certain fiber in the Conduit System.
However, Mr. Lipkin tells Judge Gropper, the Debtors no longer
believe performance of the installation and testing task would
provide a net benefit to the Debtors' estates. That's why, Mr.
Lipkin says, the Debtors would like to get the Court's authority
to enter into the First Amendment to the Construction Agreement
in order to relieve the Debtors from any obligation to install
and test fiber in the Conduit System.
As to the construction and sale, Mr. Lipkin notes, the Conduit
System has already been completed, and the Debtors and Dominion
are prepared to consummate the sale as provided under the
Construction Agreement. According to Mr. Lipkin, the
Construction Agreement also provides for Dominion, subject to
certain conditions precedent, to pay in excess of $1,290,000 to
360networks.
Mr. Lipkin also relates that the Debtors are required to
maintain the Conduit System in the future as provided in the
Construction Agreement. This task outlined in the Maintenance
Agreement, Mr. Lipkin explains.
Under the Maintenance Agreement, Mr. Lipkin says, Dominion is
required to pay 360networks, on a quarterly basis, the sum of
$400 per year per route mile of the Conduit System. Also, Mr.
Lipkin notes, the Debtors and Dominion seek approval of the
First Amendment to the Maintenance Agreement to provide two
types of assurances to Dominion:
(a) shorten the notice period after which 360networks must
begin to cure a non-payment default from 60 days to 30
days; and
(b) includes two provisions that would create an event of
default under the Maintenance Agreement if 360networks is
unable to perform either requested or emergency
maintenance within a specific time frame.
However, Mr. Lipkin notes, the cure specified in the amendment
for such an event of default is Dominion's ability to perform
the maintenance or engage a third party servicer, approved by
360networks, to perform the required maintenance and have
360networks pay the actual costs of such substituted
maintenance.
Mr. Lipkin asserts that the assumption of the Construction and
Maintenance Agreements would benefit the Debtors' estates
because the Debtors would:
(1) realize in excess of $1,290,000;
(2) be relieved of an unprofitable obligation to install and
test certain fiber in the Conduit System; and
(3) receive quarterly payments under the Maintenance
Agreement.
Although the assumption of the Agreements might give rise to
certain administrative liabilities (arising from, among other
things, certain indemnification provisions, and representations
and warranties in the Agreements), Mr. Lipkin relates, the
Debtors do not believe it is likely that any claims will be
asserted based on such provisions. (360 Bankruptcy News, Issue
No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900)
AMES DEPARTMENT: 28 Utilities Want $3.5 Million of Deposits
-----------------------------------------------------------
Finding that the relief requested is necessary and in the best
interest of Ames Department Stores, Inc. and their estates,
Judge Gerber approved the Debtors' first-day motion for an order
deeming utility companies adequately assured of future
performance and establishing procedure for determining adequate
assurance of payment for future utility services.
Pursuant to that Utility Order, 28 Utility Companies submitted
requests for additional adequate assurance on September 21, 2001
totaling approximately $3,500,000 in the aggregate. The Debtors
submit that based on the availability under their DIP financing
facilities and the administrative expense status afforded to
Utility Companies providing Utility Services to the Debtors
post-petition, the Utility Companies are adequately assured and
no further deposits or other security need be provided.
In a new motion filed with the Court, the Debtors now request
that the Court enter an order deeming these 28 Utility Companies
to be adequately assured of future performance by their
entitlement to an administrative expense claim for post-petition
Utility Services.
The Debtors submit the Utility Demands are unreasonable and
further submit the Utility Companies are adequately assured of
payment because the post-petition Utility Services are deemed to
be administrative expenses of the Debtors' chapter 11 cases. The
Debtors propose that the method of providing adequate assurance
be without prejudice to the rights of any Utility Company to
move this Court for additional assurance upon showing a material
adverse change to the Debtors that would justify the need for
additional adequate assurance.
Martin J. Beinenstock, Esq., at Weil Gotshall & Manges LLP in
New York, New York, tells the Court that the Debtors have a good
pre-petition payment history with the Utility Companies. To the
best of the Debtors' knowledge, there are few material defaults
or arrearages with respect to undisputed Utility Service
invoices.
Mr. Beinenstock says that it is well established that absent
substantial pre-petition payment defaults, a debtor-in-
possession's agreement to pay its utilities as an administrative
expense constitutes "adequate assurance" of its future
performance.
The Debtors represent that they will continue to pay, in the
ordinary course of business, all post-petition bills for Utility
Services, as billed and when due. The Debtors submit that
adequate assurance of payment to the Utility Companies is
manifestly evident in their chapter 11 cases, given the Debtors'
$755,000,000 debtor in possession financing facilities which
continue to provide the Debtors with more than sufficient
availability of funds with which to pay all post-petition
charges and other administrative expenses.
Mr. Beinenstock contends that the proposed method of furnishing
adequate assurance of payment for post-petition Utility Services
is in the best interest of the Debtors' estates and creditors.
If the Debtors obligated to pay approximately $3,500,000 in
Utility Demands, Mr. Beinenstock adds that the Debtors'
availability under their DIP financing facilities would be
diminished during the crucial Thanksgiving and Christmas
retailing seasons. (AMES Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
AMF BOWLING: Parent Taps Arthur Andersen As Accounting Advisor
--------------------------------------------------------------
AMF Bowling, Inc., presents the Court with its application to
employ and retain Arthur Andersen LLP as accounting and tax
advisors.
Chris Caesar, the designated corporate representative of the
Parent, informs the Court that prior to the commencement of this
chapter 11 case, the Parent employed Arthur Andersen LLP as its
accounting and tax advisors. The services rendered by Arthur
Andersen related to normal public accounting, tax advisory, and
other related accounting services incidental to the operation
and management of the Parent's business, which are necessary to
the administration of the Parent's estate.
Mr. Caesar states that the Parent wishes to engage Arthur
Andersen as tax and accounting advisors because of Arthur
Andersen's extensive knowledge of the Parent's financial and tax
information and the immediate need for the professional services
to be rendered in order for the Parent to be able to comply with
Federal securities and tax regulations.
Mr. Caesar adds that Arthur Andersen has had extensive
experience in reorganization proceedings and enjoys an excellent
reputation for services it has rendered in large and complex
chapter 11 proceedings.
Mr. Caesar asserts that the cost and delay of obtaining and
educating new accounting advisors who do not possess the
extensive knowledge of the Parent's financial and tax history
would be detrimental to the Parent's estate and believes that
the advisory services will add an additional dimension of
financial expertise to this case.
The nature and extent of the accounting and tax and services
that the Parent proposes to have Arthur Andersen render
includes:
A. rendering tax return preparation and other compliance and tax
consulting services;
B. rendering accounting assistance in connection with reports
required by the Securities and Exchange Commission (SEC);
C. assisting with such other matters as the Parent and Arthur
Andersen may agree to from time-to-time.
Arthur Andersen's current billing rates for professionals who
may be assigned to this case are:
Partners/Principals $425 - 600
Managers/Directors $310 - 525
Senior Consultants $180 - 495
Staff/Paraprofessionals $ 90 - 250
Mr. Caesar informs the Court that the Parent intends to engage
Arthur Andersen to review and analyze the Parent's quarterly
financial information to be filed with the SEC, pursuant to an
August 22, 2001 engagement letter.
The SEC Agreement confirms an arrangement with Arthur Andersen
to provide review and analysis of the Parent's June 30, 2001 and
September 30, 2001 quarterly financial information in
preparation for the Parent's filing with the SEC.
Arthur Andersen has estimated its fees for each review would be
$2,000 plus additional fees and costs and for the reimbursement
of reasonable out-of-pocket expenses. The Parent also intends
to engage Arthur Andersen to provide tax compliance services
pursuant to the August 28, 2001 engagement letter.
Mr. Caesar explains that the Tax Services Agreement confirms an
arrangement for the preparation of Federal and state income tax
returns and the fees estimated for such services will be $1,000
plus additional fees and costs and for the reimbursement of
reasonable out-of-pocket expenses.
Mr. Caesar states that Arthur Andersen shall be compensated in
accordance with the provisions of this Application and the
Court's Administrative Order Establishing Procedures for Interim
Compensation and Reimbursement of Expenses of Professionals.
However, the Parent seeks to have Arthur Andersen not be
required to submit detailed time entries for services rendered
in connection with the SEC Agreement and the Tax Services
Agreement as such engagements do not involve restructuring
services, are ordinary course services, and are billed on a
fixed fee basis which reflects a discount from Arthur Andersen's
normal hourly rates. Mr. Caesar asserts that the employment of
Arthur Andersen is necessary and essential to the administration
of this case and should be approved as it is necessary,
essential and in the best interests of the Parent's estate.
Richard C. McCullough, Jr., a partner in the independent public
accounting firm of Arthur Andersen LLP informs the Court that
Andersen has provided professional services to the Parent since
1996 but neither Andersen, nor any of its personnel, has any
relationship with the Debtor that would impair Andersen's
ability to provide professional services, including attest or
audit services, as to which professional and regulatory
requirements of independence exist.
Mr. McCullough asserts that Andersen has not had any prior
association with the Parent, any creditors of the Parent, or any
other parties in interest except:
A. As independent auditors, Andersen has audited the financial
statements of the Parent since 1996. Andersen has, since the
date of appointment as auditors, also performed various
accounting, advisory, consulting and tax services for the
Parent.
B. Andersen has performed professional services in unrelated
matters for certain of the creditors of the Debtor, including
HSBC Bank USA and Verizon Wireless. Andersen has provided to
these companies and their affiliates various professional
services that include auditing, accounting advisory, tax, and
business consulting services. Andersen has not been retained
to assist any of these entities with regard to this chapter
11 case.
C. Andersen has performed professional services in unrelated
matters for certain of the creditors and lenders of the
Debtor's affiliates, whose names appear on the initial list
of such affiliates' largest creditors, filed in the jointly
administered bankruptcy case of AMF Worldwide, Inc.,
including: Citibank, N.A., ABN Amro Bank N.V., Bank of
Hawaii, Bank of Nova Scotia, Bank of Scotland, City National
Bank, Comerica Bank, Credit Agricole Indosuez, Dresdner Bank,
Erste Bank, First Union National Bank, Foothill Capital
Corporation, General Electric Capital Corp., Imperial Bank,
Metropolitan Life Insurance Company, Natexis Banque BFCE,
National City Bank, PNC Bank Corp., PPM America, Inc., The
Sakura Bank, Ltd., Societe Generale, Stein Roe & Farnham Inc,
Transamerica Business Credit Corp., Brunswick Bowling &
Billiards, Mohawk Industries, Inc., Georgia Pacific
Corporation, Boise Cascade Office Products Corp., Franklin
Electric, Sysco Corporation, Lexmark International, Inc.,
Mayflower Vehicle Systems, Molex Inc., Adelphia, Alabama
Power Co., Ameren UE, American Electric Power, Ameritech,
AT&T, Bell Atlantic, Bellsouth, BGE, Cablevision, Central
Power & Light Co., Charter Communications, Columbia Gas,
Comcast, Consumers Energy, Cox Communications, Duke Energy,
Florida Power, GTE, GTE Wireless, Keyspan Energy, Lucent
Technologies, MCI Worldcom, Media One, Pacific Gas & Energy,
Reliant Energy, Southwestern Bell, Sprint, Time Warner,
Texaco, The Gas Co., Verizon, Xerox, Norfolk Southern Corp.,
Chelsea Piers Mgmt Inc., Spiegel Enterprises, Beverly Plaza
Partnership, Wells Fargo Bank, City of Chicago, John Hopkins
University. Andersen has provided to these companies and
their affiliates various professional services that include
auditing, accounting advisory, tax, and business consulting
services. Andersen has not been retained to assist any of
these entities with regard to this chapter 11 case or the
WINC Case.
D. Andersen has provided professional services and is currently
employed as the auditor, financial and tax advisor to the
Debtor's affiliates in the WINC Case. Andersen has been
employed in the WINC case to provide various professional
services, which include statutory audit, accounting advisory,
tax, and business consulting services. Notwithstanding the
foregoing, Andersen has not and will not assist any of the
Debtor's affiliates in the Debtor's bankruptcy case nor will
it have any relationship with such parties which would be
adverse to the Debtor's estate.
E. Andersen has provided professional services in unrelated
matters to certain equity security holders of the Debtor.
Andersen has provided to these companies and/or their
affiliates various professional accounting advisory, tax, or
business consulting services.
F. Andersen has worked, continues to work, and has mutual
clients with the law firms of Stroock & Stroock & Lavan LLP,
and Kutak Rock LLP, counsel for the Debtor.
G. The Debtor has additional creditors, equity security holders
and other parties with whom they maintain business
relationships beyond those identified in paragraphs (b)
through (d). Additionally, these creditors, equity security
holders and other parties may be represented by counsel in
addition to those firms identified in paragraph (e). Andersen
may have audit, tax, consulting or other professional
relationships with such entities or persons or Andersen may,
from time to time, perform professional services for such
entities or persons unrelated to the Debtor or its business
affairs.
Mr. McCullough relates that Andersen received compensation of
approximately $1.6 million from the Debtor and the Debtor's
affiliates related to services provided, including attest and
audit services, assisting in the preparation of various forms
and reports required to be filed with the Securities and
Exchange Commission and other regulatory entities, rendering tax
return preparation and other tax compliance and tax consulting
services, and restructuring services within one year prior to
the filing of these cases.
Mr. McCullough states that Andersen has not been retained to
assist any entity or person other than the Parent on matters
relating to this chapter 11 case and will not accept any
engagement or perform any service for any entity or person in
this chapter 11 case other than the Debtor if the application is
approved.
Mr. McCullough adds that Andersen will continue to provide
professional services to entities or persons that may be
creditors or equity security holders of the Debtor or parties-
in-interest in this chapter 11 case, provided that such services
do not relate to this chapter 11 case or the Parent. (AMF
Bankruptcy News, Issue No. 8 Bankruptcy Creditors' Service,
Inc., 609/392-0900)
ARMSTRONG HOLDINGS: Gets Okay to Hire Andersen As Tax Advisor
-------------------------------------------------------------
Judge Farnan allows Armstrong Holdings, Inc. to employ Arthur
Andersen LLP to serve as their tax consultant and tax return
preparers, and compensation and benefits consultants in these
chapter 11 cases.
Arthur Andersen will render tax consulting and return
preparation services to the Debtors which include:
(a) Preparation of federal and state income and franchise
tax returns;
(b) Preparation of tax account analysis;
(c) Calculation of FAS109 analysis and tax provisions;
(d) Response to notices from federal and state tax
authorities;
(e) Research regarding federal and state tax matters, as
requested by the Company. (Armstrong Bankruptcy News,
Issue No. 10; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
ASSISTED LIVING: Files Chapter 11 with Prenegotiated Plan in DE
---------------------------------------------------------------
Assisted Living Concepts, Inc. (AMEX:ALF), a national provider
of assisted living services, announced that it has reached an
agreement (the Plan Support Agreement) for a financial
reorganization with the holders (the Debenture Holders) of
$75,857,000 million aggregate principal amount (out of a total
of $161,250,000 million aggregate principal amount outstanding,
or approximately 47%) of its two series of convertible
subordinated debentures that will be implemented through a
prenegotiated plan of reorganization.
Pursuant to the Plan Support Agreement, on October 1, 2001, the
Company has filed a voluntary petition under Chapter 11 of the
U.S. Bankruptcy Code in the United States Bankruptcy Court for
the District of Delaware in Wilmington.
Pursuant to the Plan Support Agreement, upon the effective date
of the Prenegotiated Plan, (1) the Debentures and certain other
unsecured debt of the Company will be exchanged for (a) $40.25
million aggregate principal amount of seven-year secured notes
(the "New Senior Secured Notes"), bearing interest at 10% per
annum, payable semi-annually in arrears, (b) $15.25 million
aggregate principal amount of ten-year secured notes (the "New
Junior Secured Notes" and collectively with the New Senior
Secured Notes, the "New Notes"), bearing interest payable in
additional New Junior Secured Notes for three years at 8% per
annum and thereafter payable in cash at 12% per annum payable
semi-annually in arrears, and (c) 96% of the common stock of the
reorganized Company, and (2) existing holders of the Company's
common stock will exchange their stock for 4% of the common
stock of the reorganized Company.
The New Senior Secured Notes will be secured by (1) all
presently unencumbered real property owned by the Company and
its subsidiaries, and (2) any additional real property owned by
the Company and its subsidiaries that may become unencumbered on
or before the effective date of the Prenegotiated Plan.
The New Junior Secured Note will be secured by a junior lien on
the same collateral securing the New Senior Secured Notes. If
the aforementioned collateral has a fair market value of less
than $75.0 million as determined using an agreed upon formula,
then a junior security interest in the collateral securing the
Company's obligations under a proposed financing with Heller
Healthcare Finance will also be provided to meet this market
value requirement.
As part of the filing, and pursuant to the Plan Support
Agreement, the Company expects its vendors and trade creditors
to be paid in the ordinary course and to be unaffected by the
bankruptcy filing. The Plan Support Agreement also requires the
Debenture Holders to fully support the Prenegotiated Plan and
binds the transferees of any Debenture Holders to fully comply
with the terms of the Plan Support Agreement.
"The Plan Support Agreement is the product of months of intense
negotiations with the committee representing certain of the
Debenture Holders and is intended to optimize returns to the
Company's creditors and stockholders. We were pleased to
negotiate a deal that recapitalizes the Company's highly
leveraged capital structure while preserving ordinary course
trade claims. The Prenegotiated Plan, once effective, will
enhance the Company's ability to compete as a streamlined and
more flexible corporation," said Wm. James Nicol, the Company's
Chairman, President and Chief Executive Officer.
"More importantly, implementing the Prenegotiated Plan through a
voluntary bankruptcy petition will ensure that our operations
will continue without interruption throughout the restructuring
and will enable us, through our dedicated employees, to continue
to provide high quality service to our residents," Mr. Nicol
added.
The implementation of the Prenegotiated Plan is dependent upon a
number of conditions typical in restructures of this type
including, among other things, final documentation satisfactory
to the Debenture Holders, Court approval of the Prenegotiated
Plan and related solicitation materials and the Company's
acquisition of debtor-in-possession financing and takeout
financing upon the Company's exit from bankruptcy. The Company
expects the Prenegotiated Plan to be effective in early 2002. In
accordance with its policies, the American Stock Exchange may
suspend trading in the Company's common stock and Debentures as
a result of the Company's filing under Chapter 11 of the U.S.
Bankruptcy Code.
Subject to Court approval, the Company and Carriage House
anticipate entering into a debtor-in-possession facility with
Heller in an anticipated approximate principal amount of up to
$4.4 million. The DIP Facility will supplement the Company and
Carriage House's cash position in order to ensure that all on-
going working capital needs are met and will be secured by
certain properties of the Company and Carriage House and a
pledge of certain intercompany notes and the stock of certain
subsidiaries of the Company.
The DIP Facility will mature upon the earlier of the Company's
emergence from bankruptcy or twelve months from the effective
date of the DIP Facility. Principal will be payable at maturity
and interest will be calculated at 5.0% over three month LIBOR,
floating monthly, and payable monthly in arrears.
Concurrent with the closing of the DIP Facility and subject to
Court approval, it is anticipated that certain wholly-owned
subsidiaries of the Company will enter into an amendment of
their existing facility with Heller, which is guaranteed by the
Company in which the Company is a guarantor to, among other
things, extend the maturity of the Existing Facility to be
coterminous with the DIP Facility, to amend the interest to be
calculated at 5.0% over three month LIBOR, floating monthly,
payable monthly in arrears, and to finance the acquisition by
Texas ALC Partners, L.P. of sixteen properties currently leased
by Texas ALC from the current lessor thereunder, T and F
Properties, L.P. (the "Meditrust Properties" and the acquisition
by Texas ALC, the "Meditrust Acquisition").
Texas ALC's rights to proceed with the Meditrust Acquisition are
subject to and pursuant to an option granted by T and F
Properties, L.P. to Texas ALC Partners, L.P. or its assignee on
September 25, 2001. The Option expires on October 31, 2001. It
is anticipated that the DIP Collateral and the collateral for
the Existing Facility (including the Meditrust Properties when
acquired) will cross-collateralize both the DIP Facility and the
Existing Facility, as amended. The extension of the Company
guarantee is subject to the approval of the Court.
Subject to Court approval, it is anticipated that the DIP
Facility may be refinanced through an amendment of the Existing
Facility in connection with the exit from bankruptcy (the "Exit
Facility"). The principal amount of the Exit Facility will not
exceed $44.0 million and will mature 36 months from the date on
which the Company exits from bankruptcy. Principal will be
payable monthly in a monthly amount of $50,000 for the first
year, $65,000 for the second year and $80,000 for the last year
of the Exit Facility term. Interest will be calculated at 4.5%
over three month LIBOR, floating monthly (not to be less than
8%), and payable monthly in arrears. The Company will remain
liable for the entire amount of the Exit Facility as a
guarantor.
In September 2000, the Company reached an agreement to settle
the class action litigation relating to the restatement of the
Company's financial statements for the years ended December 31,
1996 and 1997 and the first three fiscal quarters of 1998. This
agreement received final court approval on November 30, 2000 and
the Company was subsequently dismissed from the litigation with
prejudice. The total cost of the settlement was approximately
$10,020,000 (less $1.0 million of legal fees and expenses
reimbursed by the Company's corporate liability insurance
carriers and other reimbursements of approximately $193,000).
On September 28, 2001, the Company made the final settlement
payment of $1.0 million.
ASSISTED LIVING: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Assisted Living Concepts, Inc.
11835 N.E. Glenn Widing Drive, Bldg E
Portland, OR 97220
Debtor affiliate filing separate chapter 11 petition:
Carriage House Assisted Living Inc.
Type of Business: The company, through its subsidiaries and
other
affiliates, owns, leases and operates assisted
living
residences.
Chapter 11 Petition Date: October 01, 2001
Court: District of Delaware
Bankruptcy Case No.: 01-10674 and 01-10670
Debtor's Counsel: Michael R. Nestor, Esq.
Young Conaway Stargatt & Taylor
P. O. Box 391
Wilmington, DE 19899
usa
302-571-6600
Fax : 302-571-1253
Email: bankruptcy@ycst.com
and
Robert A. Klyman, Esq.
Jonathan S. Shenson, Esq.
Sylvia K. Hamersley, Esq.
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071-2007
Tel: (213) 485-1234
Fax: (213)891-8763
Total Assets: $331,398,000
Total Debts: $252,035,000
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
LTC Properties Inc. 6% Convertible $22,520,000
300 E. Esplanade Drive Senior Subordinated
Suite 1860 Note Offered
Oxnard, CA 93030-1286 October 1997
Contact: Alex Chavez and
Wendy Simpson
P: (805)981-8655
F: (805)981-8663
National Health Investors, 5.625% Convertible $16,862,000
Inc. Senior Subordinated
100 Vine Street Note offered
Murfreesboro, TN 37130 April 1998
Contact: W. Andrew Adams
P: (615) 890-2020
F: (615) 890-0123
National Health Investors, 6% Convertible $13,025,000
Inc. Senior Subordinated
100 Vine Street Note offered
Murfreesboro, TN 37130 October 1997
Contact: W. Andrew Adams
P: (615) 890-2020
F: (615) 890-0123
BET Associates L.P. 6% Convertible $12,118,000
c/o Toll Brothers Inc. Senior Subordinated
3103 Philmont Avenue Note Offered
Huntingdon Valley, PA 19006 October 1997
Contact: Bruce E. Toll
P: (215)938-8024
F: (215)938-8019
LTC Properties Inc. 5.625% Convertible $6,028,000
300 E. Esplanade Drive Senior Subordinated
Suite 1860 Note Offered
Oxnard, CA 93030-1286 April 1998
Contact: Alex Chavez
P: (805)981-8655
F: (805)981-8663
Credit Suisse First Boston 5.625% Convertible $5,430,000
Corporation Senior Subordinated
5 World Trade Center Note Offered
New York, NY 10048 April 1998
Contact: Valentin Colon
P: (212)538-8661
F: (212)335-0591
MPA CO LLC 6% Convertible $4,474,000
1640 School Street Senior Subordinated
Moraga, CA 94556 Note Offered
P: (925)631-7929 October 1997
F: (925)631-9119
Bank of New York Bulk A/C 5.625% Convertible $3,991,000
c/o Goldman Sachs Senior Subordinated
Peterborough Court Note Offered
133 Fleet Street April 1998
London England
UK EC4A 2BB
Contact: Annika Bjorkland
P: 00-44-20-7774-1000
F: 00-44-20-7774-4477
Credit Research Trading 6% Convertible $3,552,000
and Capital Group LLC Senior Subordinated
One Fawcett Place Note Offered
Greenwich, CT 06830 October 1997
P: (203)629-6400
F: (203)629-6499
Bruce E. Toll 6% Convertible $3,350,000
1477 Rydal Road Senior Subordinated
Rydal, PA 19046 Note Offered
P: (215)938-8024 October 1997
F: (215)938-8019
LTC Properties Inc. 5.625% Convertible $3,000,000
300 E. Esplanade Drive Senior Subordinated
Suite 1860 Note Offered
Oxnard, CA 93030-1286 April 1998
Contact: Alex Chavez
P: (805)981-8655
F: (805)981-8663
MPA CO LLC 5.625% Convertible $2,000,000
1640 School Street Senior Subordinated
Moraga, CA 94556 Note Offered
P: (925)631-7929 April 1998
F: (925)631-9119
Bruce E. Toll 5.625% Convertible $2,000,000
1477 Rydal Road Senior Subordinated
Rydal, PA 19046 Note Offered
P: (215)938-8024 April 1998
F: (215)938-8019
Third Avenue Real Estate 6% Convertible $1,369,000
Value Fund Senior Subordinated
767 Third Avenue Note Offered
New York, NY 10017-2023 October 1997
Contact: Kerry Weltz
P: (212)888-2290
F: (212)888-2309
Third Avenue Real Estate 5.625% Convertible $1,100,000
Value Fund Senior Subordinated
767 Third Avenue Note Offered
New York, NY 10017-2023 April 1998
Contact: Kerry Weltz
P: (212)888-2290
F: (212)888-2309
BET Associates L.P. 5.625% Convertible $1,000,000
c/o Toll Brothers Inc. Senior Subordinated
3103 Philmont Avenue Note Offered
Huntingdon Valley, PA 19006 April 1998
Contact: Bruce E. Toll
P: (215)938-8024
F: (215)938-8019
Costa Brave Partnership 5.625% Convertible $1,000,000
II, LP Senior Subordinated
121-B Tremont Street Note Offered
Brighton, MA 02135-2455 October 1997
Contact: Seth Hamot
P: (617)787-2940
Chap Cap Partners, LP 6% Convertible $950,000
c/o Chapman Capital LLC Senior Subordinated
Continental Grand Plaza #411 Note Offered
300 N. Continental Blvd. October 1997
El Segundo, CA 90245
Contact: Robert Chapman
P: (213) 488-0430
Institutional Shareholder 5.625% Convertible $900,000
Services (ISS) Senior Subordinated
(262/ LaSalle Bank N.A.) Note Offered
1455 Research Blvd. April 1998
4th Floor
Rockville, MD 20850
Contact: Bruce Babcock
President
P: (301) 545-4555
F: (301) 545-4900
Leonard Tanenbaum 6% Convertible $870,000
17 Leisure Farm Drive Senior Subordinated
Armonk, NY 10504 Note Offered
October 1997
ATLANTIC COAST: Executives Agree to Pay Cuts to Reduce Costs
------------------------------------------------------------
Atlantic Coast Airlines (Nasdaq: ACAI), the Dulles, VA-based
United Express and Delta Connection carrier announced it is
taking the following steps as part of a company-wide cost
reduction program in concert with similar measures being taken
by its partners at United Airlines and Delta Air Lines:
* During a Board of Directors meeting on September 18th,
all ACA senior executives agreed to voluntary pay cuts,
plus an immediate suspension of all executive cash
bonuses. This results in an effective reduction of 30-
40% of potential cash compensation for this group.
* An immediate freeze on management and salaried merit pay
increases, the elimination of all remaining 2001 cash
bonus programs for both salaried and hourly employees,
and suspension of all 2002 cash bonus programs until
further notice.
* The elimination and consolidation of various
headquarters, management and support positions,
affecting 11% of ACA's corporate and administrative
employees.
* Additional cost-reduction measures in each department.
The company remains committed to continuing its regional jet
expansion as previously announced. ACA expects to operate 158
regional jets by the end of 2003, including 96 Canadair Regional
Jets (CRJs) and 62 Fairchild 328JETs. The company's current
fleet consists of 51 CRJs, 27 328JETs and 38 turboprops, for a
total of 116 aircraft.
Atlantic Coast Airlines operates as Delta Connection in the
Eastern United States and Canada, and as United Express in the
Eastern and Midwestern U.S. As of October 1, 2001, the company
will offer a systemwide schedule of more than 750 daily
departures, serving 60 destinations in the U.S. and Canada.
ACA employs over 4,000 aviation professionals. The common stock
of parent company Atlantic Coast Airlines Holdings, Inc. is
traded on the Nasdaq National Market under the symbol ACAI. For
more information, please visit the website at
http://www.atlanticcoast.com
BRIDGE INFORMATION: Rejecting MDC & Cantor Fitzgerald Contracts
---------------------------------------------------------------
Bridge Information Systems, Inc. seeks to reject these
contracts, effective as of October 14, 2001:
Counterparty Contract
------------ --------
Market Data Corporation Master Optional Services Agreement
between Telerate, Inc. and Market Data
Corporation dated February 23, 1990
Cantor Fitzgerald Agreement between Telerate, Inc. and
Securities Corp. Cantor Fitzgerald Securities Corp.
dated February 23, 1990 (as amended)
Gregory D. Willard, Esq., at Bryan Cave LLP, in St. Louis,
Missouri, tells the Court that the counterparties to the
contracts provide certain financial data to the Debtors. The
Debtors' annual costs under the contracts are approximately
$50,000,000, Mr. Willard reports.
Mr. Willard relates that these two contracts were among those
that the Debtors sought to assume and assign in connection with
their sale of certain business operations and assets to
Moneyline Network, Inc.
The counterparties have objected to the Debtors' requested
assumption and assignment of the contracts to Moneyline, Mr.
Willard reminds Judge McDonald. Mr. Willard adds that it
appears that the Debtors and the counterparties may be unable to
resolve these objections prior to the consummation of the sale
with Moneyline.
After October 14, 2001, Mr. Willard says, the contracts will be
unnecessary to the Debtors' ongoing operations because the
business operations that utilize the financial information
provided under the contracts will have been sold and transferred
to Moneyline. Therefore, Mr. Willard tells Judge McDonald, in
the business judgment of the Debtors, it is not in their best
interests to maintain the contracts beyond the rejection date.
For these reasons, the Debtors ask the Court for an order:
(i) approving the rejection of the contracts effective as of
the rejection date; and
(ii) requiring the counterparties to pay over to the Debtors
any and all amounts paid by the Debtors to
counterparties in respect of goods and/or services to be
provided under the contracts subsequent to the rejection
date.
The Debtors further request the Court to conduct a hearing on
this motion for October 10, 2001. (Bridge Bankruptcy News, Issue
No. 17; Bankruptcy Creditors' Service, Inc., 609/392-0900)
CARMIKE CINEMAS: Files Reorganization Plan in Delaware
------------------------------------------------------
Carmike Cinemas, Inc. (OTC Bulletin Board: CKECQ) announced that
it had filed its Disclosure Statement and proposed Plan of
Reorganization with the United States Bankruptcy Court for the
District of Delaware on Friday, September 28, 2001.
Before the Plan can be implemented, it must be confirmed by the
Bankruptcy Court following a vote on the Plan by certain
creditors and shareholders of the Company. The Company will be
able to commence the solicitation of votes for approval of the
Plan once the Bankruptcy Court has determined that the
Disclosure Statement is adequate.
The Plan provides for payment in full, with interest, of all
allowed creditors claims, including the claims of the Company's
Senior Secured Lenders, Senior Subordinated noteholders and
general unsecured creditors.
If the Plan is confirmed by the Bankruptcy Court as filed, the
new common equity of the Company will be comprised of the
following: the holders of $55 million of preferred stock will
convert their preferred stock into and be issued 39.9% of the
new common equity of the Company, the holders of up to $50
million of senior subordinated notes will have the right to
convert such notes into 28.1% of the new common equity of the
Company, the existing holders of common equity will be issued
22% of the new common equity of the Company and 10% of the new
common equity will be reserved for issuance under a management
incentive plan.
Carmike Cinemas currently operates 328 theatres in small to mid-
sized markets throughout 35 states. Visit Carmike's website,
http://www.carmike.com for theatre locations and showtimes.
COMDISCO INC: Selling Company Aircraft to EMAX for $8 Million
-------------------------------------------------------------
Comdisco, Inc. and its debtor-affiliates own a 1983 Dassault
Falcon 50, identified by Manufacturer's Serial Number 103 and
Current United States Registration, N370KP.
As part of its cost-cutting program, the Debtors decided they
would no longer maintain their corporate aircraft.
So by Motion, the Debtors ask Judge Barliant to approve the
sale of the Debtors' interest in the aircraft to EMAX Oil
Company or to the Successful Bidder.
John "Jack" Wm. Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, relates that Debtors sought the assistance of
Airborne Investments, Inc., a brokerage specializing in the sale
of aircraft, to sell and market the aircraft.
In return, Mr. Butler says, the Debtors have agreed to
compensate the Broker 2.5% of the Purchase Price plus expenses
incurred in the normal course for marketing and reasonable
travel expenses for its services.
Thus, by this Motion, the Debtors are also asking Judge Barliant
to approve the compensation arrangement with the Broker.
In marketing the aircraft, the Debtors and the Broker
(a) ran a full-page advertisement in the A/C Flyer -- a leading
national publication targeting the aviation community -- in
its June, July, August and September issues;
(b) advertised in the Wall Street Journal, every Tuesday and
Thursday since June 7, 2001;
(c) listed the aircraft with two online computer listing
services that specialize in the sale of aircraft, AMSTAT and
JETNET;
(d) marketed the aircraft on the website of the Broker at
www.Airborne-Investments.com;
(e) marketed through "Plane Fax," a subscription fax service
that is sent to aircraft dealers, brokers and other
interested parties.
As a result, Mr. Butler notes, more than 100 inquiries were
obtained and about 20 indications of interest were received.
For those parties indicating interest, they were provided with
information with respect to the aircraft. If they remain
interested, Mr. Butler relates, the Debtors and their
representatives initiate negotiations designed to solicit an
offer.
To date, Mr. Butler informs Judge Barliant, the Debtors receive
three written offers to purchase the aircraft. Upon evaluation
of each proposal, the Debtors concluded that EMAX's offer
represents the greatest overall benefit to the their estates.
Accordingly, the Debtors and EMAX have entered into an Agreement
that is subject to Court approval.
The salient terms of the Agreement between the Debtors and EMAX
are:
Purchase Price: $8,275,000
Escrow Deposit: An Escrow Deposit in the amount of $250,000
shall be deposited by the Purchaser on September 11, 2001 to
be held by the escrow agent until all conditions to closing
are satisfied by the Debtors.
Assets Included: The Proposed Sale will include all the
Debtors' right, title and interest in the Property.
Closing: The closing shall occur immediately following the
latest to occur of:
(i) approval of the Proposed Sale by this Court;
(ii) closing of the Escrow Deposit; and
(iii) payment of the Purchase Price.
Conditions to Closing: The Agreement is subject to higher
and better offers as well as Bankruptcy Court Approval.
Representations and Warranties: The Property shall be
conveyed "as is, where is."
Through this Motion, the Debtors seek the Court's authority to
sell the aircraft to EMAX or to the Successful Bidder, pursuant
to the proposed Bidding Procedures. Mr. Butler explains that
the proposed Bidding Procedures will permit the Debtors to
obtain the best recovery for the aircraft.
Wallace Edwin Poe, Jr., president of Airborne Investments, Inc.,
says, tells Judge Barliant that the market for aircraft similar
to the Debtors' property has recently softened resulting in
decreasing prices. Thus, Mr. Poe contends, there is a need for
the rapid sale of the Debtors' property in order to prevent
further price deterioration.
"In my opinion, the price offered for the Property is fair and
reasonable based on the condition of the aircraft, the number of
similar aircraft on the market and the expressions of interest
received as a result of the Debtors' marketing efforts," Mr. Poe
states in his affidavit. (Comdisco Bankruptcy News, Issue No. 8;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
DAIRY MART: Moody's Drops All Ratings After Chapter 11 Filing
-------------------------------------------------------------
Moody's Investors Service downgraded all ratings of Dairy Mart
Convenience Stores, Inc. following the September 24 bankruptcy
filing.
The rating outlook is negative and there is approximately $88
million of debt securities affected. This concludes the review
for downgrade commenced on July 31, 2001.
* $88.5 million of 10.25% senior subordinated notes (due 2004)
to Ca from Caa2,
* Senior Implied rating to Caa2 from B3, and
* Senior Unsecured Issuer rating to Caa3 from Caa1.
Moody's said that the rating action reflects the uncertain
prospects for the company following its bankruptcy filing. The
company's highly leveraged financial condition, the limited
liquidity buffer available to the company, and its aging store
base were also among the points considered by the rating agency.
Furthermore, the ratings also consider the lack of pricing power
in the company's two most important product categories, since
wholesale and retail prices of gasoline and tobacco move
according to macro-economic trends largely outside the control
of any single company.
However, the regionally recognized trade name could be a
continuing strength of the company, Moody's added.
Dairy Mart Convenience Stores, Inc. which operates or franchises
546 convenience stores in seven Midwestern states, is
headquartered in Hudson, Ohio.
ENTRADE: Will Seek Review of NYSE Decision to Suspend Trading
-------------------------------------------------------------
Entrade Inc. (NYSE:ETA) intends to seek a review of the New York
Stock Exchange's determination to suspend trading and seek
delisting of the company's common stock with the Exchange's
board level committee as allowed for by the Exchange's rules.
The Company also announced that it will seek to trade its common
stock on the OTC bulletin board so as to provide an alternate
trading market for its shareholders. The Company continues to
pursue its business goals and plans to make its delayed
regulatory filings with the SEC shortly.
Entrade, Formerly ARTRA GROUP, is focused on developing its
Nationwide Auction Systems, one of the leading asset liquidation
businesses in the US. Nationwide has facilities in California,
Delaware, Georgia, and Missouri. Entrade is also looking to
enhance its subsidiary's business through Internet technology.
The company continues to have equity positions in several online
B2B portals, like AssetControl.com and TruckCenter.com.
Entrade reorganized its operations and cut staff numbers in 2000
to stem the tide of losses.
FEDERAL-MOGUL: Commences U.S. Chapter 11 & U.K. Administration
--------------------------------------------------------------
Federal-Mogul Corporation (NYSE: FMO) announced that to separate
its asbestos liabilities from its true operating potential, the
company and its United States subsidiaries have voluntarily
filed for financial restructuring under Chapter 11 of the U.S
Bankruptcy Code.
In addition, Federal-Mogul subsidiaries in the United Kingdom
have filed jointly for Chapter 11 and Administration under the
U.K. Insolvency Act of 1986. No company subsidiaries outside of
the United States and the United Kingdom are included in these
filings.
The filings, made Monday in the U.S. Bankruptcy Court in
Wilmington, Delaware, and the High Court of Justice, Chancery
Division, London, England, enable Federal-Mogul to develop a
plan to resolve its asbestos liabilities.
During these restructuring proceedings, Federal-Mogul will
continue business operations without interruption, and with the
full support of its major customers and suppliers.
"Moving forward, Federal-Mogul will continue to serve its
existing customers, fulfill current contracts and secure new
business," said Federal-Mogul Chairman and Chief Executive
Officer Frank Macher. "I have been in close contact with many of
our major customers and suppliers, who have indicated that they
will support Federal-Mogul during the restructuring process."
Federal-Mogul intends to work closely with asbestos claimants
and other creditors to develop a financial reorganization plan
that will address asbestos claims and establish a viable capital
structure for the long-term growth and profitability of the
company's operations.
In conjunction with the filings, Federal-Mogul has obtained
commitments of up to $675 million in a new loan through debtor-
in-possession financing from a group of banks led by J.P. Morgan
Chase & Co. Following the U.S. Court's approval, Federal-Mogul
can use these funds to meet the future needs and obligations
associated with normal business operations. This includes
payment under normal terms to suppliers and vendors for all
goods and services that are provided after Monday's filing.
"After vigorously working for a legislative solution and
operating nine months with our new litigation approach for
managing asbestos claims, we have determined that the Chapter 11
and Administration processes are the only way we can effectively
structure payments for claimants without financially crippling
the operations of Federal-Mogul. This voluntary, but difficult,
decision to file enables us to continue our operations with the
same high level of commitment to our product quality and
innovative technologies required to competitively serve our
customers," said Macher. "Federal-Mogul is a very good company
with dedicated, talented employees. We have a long history and a
solid future providing we take this undeniably difficult
action."
No Federal-Mogul job losses or facility closures are expected as
a direct result of the filings. The company expects its
employees worldwide will continue to be paid in the normal
manner and that their benefits will not be disrupted. Federal-
Mogul's qualified U.S. and U.K. pension plans for retirees are
protected by law.
Macher said the goals of Federal-Mogul's restructuring include:
-- Continue business operations without interruption,
including the full support of its customers.
-- Continue to compensate and reward our employees as valued
corporate assets.
-- Create an environment where our employees can focus on
serving our customers without distractions.
-- Grow the business on a global basis.
-- Invest capital and human resources in core businesses for
our ongoing competitive advantage.
-- Develop advanced technologies to maintain performance
leadership.
-- Provide for asbestos claimants.
-- Complete the restructuring proceedings in a reasonable
time frame.
-- Treat creditors and shareholders fairly.
"The operations of Federal-Mogul are fundamentally sound,"
Macher said. "We have a clear leadership position in many of our
major markets, and our products are vital to the automotive
industry. We have a loyal, global customer base, strong
technology in our core products, and the best brand names in the
industry. These business strengths combined with our employee
talent forms a solid foundation for long term success.
"[Mon]day's action provides a means for effectively separating
our company's acquired asbestos liabilities from our true
operating potential, thus paving the way for Federal-Mogul to
emerge from the reorganization process as a stronger, more
competitive enterprise," Macher added. "We remain committed in
our efforts to bring about a legislative solution for managing
asbestos claims."
Federal-Mogul is one of more than 30 companies involved in
asbestos-related litigation to voluntarily file for Chapter 11
since 1982. Ten companies involved in asbestos-related
litigation have filed since January 1, 2000.
In the United Kingdom, the Administration Order is a court order
placing Federal-Mogul's U.K. businesses under the control of a
court-appointed administrator. The order is intended to preserve
the company's business and allow a reorganization of its assets
while protecting it from actions by creditors and asbestos
claimants. While these filings are independent of the U.S.,
every effort is being made to maintain a mutual goal of
reorganization.
For more information on Federal-Mogul's financial restructuring,
visit the company's web site at http://www.federal-mogul.com
Federal-Mogul expects to report its financial results for the
third quarter of 2001 in a Form 10-Q scheduled to be filed with
the Securities and Exchange Commission no later than November
14, 2001.
Headquartered in Southfield, Michigan, Federal-Mogul is an
automotive parts manufacturer providing innovative solutions and
systems to global customers in the automotive, small engine,
heavy-duty and industrial markets. The company was founded in
1899.
FEDERAL-MOGUL: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Case No. Debtor Entity
-------- -------------
01-10578 Federal-Mogul Global, Inc.
01-10580 T&N Limited
01-10582 Federal-Mogul Corporation
01-10585 Carter Automotive Company, Inc.
Chapter 11 Petition Date: October 1, 2001
U.S. Bankruptcy Court: United States Bankruptcy Court
District of Delaware
824 Market Street, 5th Floor
Wilmington, DE 19801
(302) 252-2900
Debtors' U.S. Counsel: Lawrence J. Nyhan,Esq.
James F. Conlan, Esq.
Kevin T. Lantry, Esq.
Sidley Austin Brown & Wood
10 South Dearborn St., 55th Floor
Chicago, IL 60603
(312) 853-7000
- and -
Laura Davis Jones, Esq.
Pachulski, Stang, Ziehl, Young & Jones
919 North Market St., 16th Floor
Wilmington, DE 19899
(302) 652-4100
U.K. Administrator: Simon Freakley
Kroll Buchler Phillips
84 Grosvenor Street
London W1X 9DF ENGLAND
+44 (0)20 7493 2550
The Federal-Modul Debtors provide the Court with a Consolidated
List of their 20-Largest Unsecured Creditors, noting that they
are scheduling the Senior Note claims (holding liens that rank
equally with their Bank Lenders) as unsecured because those
bonds may be undersecured. Bank of New York serves as the
Indenture Trustee for each of the Bond issues indicated.
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Bank of New York 7.5% Senior $564,000,000
101 Barclay Street Notes due 2009
New York, NY 10286
Attention:
Paul Schmalzel
914-773-5666
914-773-5645 (Fax)
Bank of New York 7.375% Senior $395,000,000
101 Barclay Street Notes due
New York, NY 10286 2006
Bank of New York 7.75% Senior $392,000,000
101 Barclay Street Notes due
New York, NY 10286 2006
Bank of New York 7.875% Senior $341,000,000
101 Barclay Street Notes due
New York, NY 10286 2010
Bank of New York 7.5% Senior $240,000,000
101 Barclay Street Notes due
New York, NY 10286 2004
Bank of New York 8.8% Senior $103,000,000
101 Barclay Street Notes due
New York, NY 10286 2007
Bank of New York 8.37% Medium $32,000,000
101 Barclay Street Term Notes due
New York, NY 10286 2001
Bank of New York 8.25% Medium $15,000,000
101 Barclay Street Term Notes due
New York, NY 10286 2005
Bank of New York 8.33% Medium $12,000,000
101 Barclay Street Term Notes due
New York, NY 10286 2001
Bank of New York 8.12% Medium $10,000,000
101 Barclay Street Term Notes due
New York, NY 10286 2003
Bank of New York 8.16% Medium $10,000,000
101 Barclay Street Term Notes due
New York, NY 10286 2003
Bank of New York 8.46% Medium $5,000,000
101 Barclay Street Term Notes due
New York, NY 10286 2002
State Street Bank & Trust Orangeburg, SC $4,050,000
Global Investor Services Grp IRB
Corporate Trust
PO Box 78
Boston, MA 01102-0778
Attention:
Brian Curtis
617-662-1770
617-662-1466 (Fax)
NTN Corporation Trade Payable $3,101,346
22193 Network Place
Chicago, IL 60673-1221
Attention:
Accounts Payable Dept.
847-298-7500
847-294-1248 (Fax)
Cummins Corporation Promissory Note $2,955,000
Box 3005
Columbus, IN 47202-3005
812-377-5000
812-377-3334 (Fax)
Waupaca Foundry Trade Payable $2,034,255
Box 68-9343
Milwaukee, WI 53268-9343
715-735-4951
715-735-4981 (Fax)
National City Bank of Indiana 1994 $1,605,000
Corporate Trust Department Logansport IRB
101 W. Washington Street
Indianapolis , IN 46255
Attention:
Cheryl Flaherty
317-267-7000
317-267-7658 (Fax)
Leggett & Platt Incorporated Trade Payable $1,222,483
135 Front Street
Monroe City, MO 63456
573-735-4567
573-735-4823 (Fax)
Kasper Industries Inc. Trade Payable $1,015,896
356 Expressway Court
Gaylord, MI 49735
989-705-1177
517-705-1611 (Fax)
General Electric Company Trade Payable $947,845
P.O. Box 91645
Chicago, IL 60693
and
1975 Noble Road
Cleveland, OH 44139
Attention:
Accounts Payable Dept.
800-518-8519
216-266-3317 (Fax)
GARDEN WAY: Court Fixes November 6 Claims Bar Date
--------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
establishes November 6, 2001 as the general bar date for filing
proofs of claim in the chapter 11 cases of Garden Way
Incorporated and affiliate debtor GWI Holding, Inc.
All entities holding claims against the Debtors that arose prior
to July 30, 2001 are required to file written proofs of claim,
with all supporting documentation, by 4:00 p.m. (Eastern
Standard Time) of November 6, 2001. Proofs of claim must be
mailed or delivered to:
Bankruptcy Services LLC
ATTN: Garden Way Claim Processing Department
Heron Tower, 70 East 55th Street, 6th Floor
New York, New York, 10022
Governmental units holding claims against the Debtors must file
a proof of claim on or before January 28, 2002.
If the Debtors amend their schedules of assets and liabilities
or statements of financial affairs, they will give notice of the
amendment to any affected creditor. Each such creditor will be
required to file a proof of claim at the later of:
(i) November 6, 2001 (the general bar date); or
(ii) the date that is 20 days after the date of the notice
of such amendment.
Garden Way Incorporated, one of the nation's largest
manufacturers of premium outdoor power equipment, filed for
chapter 11 protection on July 30, 2001 in the U.S. Bankruptcy
Court for the District of Delaware. M. Blake Cleary, Esq., at
Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware
represents the Debtors in their restructuring effort.
GENESISINTERMEDIA: Nasdaq Halts Trading, Asking for More Info
-------------------------------------------------------------
Ramy El-Batrawi, the CEO of GenesisIntermedia, Inc. (Nasdaq:
GENI) (Frankfurt: GIA) issued a statement in response to the
Nasdaq decision to halt trading of the Company's common shares.
"We are diligently working with Nasdaq to fulfill its request
for information. We have not yet received guidance with respect
to the timing of the resumption of trading, however, we are
hopeful that this situation will be resolved in a timely manner.
We know that this situation has caused frustration and
dissatisfaction among our shareholders, and we would like to
express our empathy, as well as our sincerest gratitude for the
expressions of support communicated to us during this time.
Please know that we are doing all we can to effect full
compliance with the Nasdaq request.
"To our knowledge, the only reason for the Nasdaq decision to
halt trading of our shares is what was provided in a Nasdaq
issued press release; 'additional information requested.' Any
other reports or circumstances that are being circulated
regarding our company have no credence or legitimacy. We are
meeting with Nasdaq next week to fulfill its request."
GenesisIntermedia operates the Centerlinq network of information
kiosks located in more than 30 shopping malls in 18 states.
Shoppers can use the kiosks to enroll in rewards programs, get
discount coupons, and access services from online vendors like
Stamps.com and ValueClick.
The company also collects consumer information from the kiosks
for use in its direct marketing efforts. In addition, it markets
several products through traditional infomercials, such as
videos based on the book Men Are From Mars, Women Are From
Venus. Chairman and CEO Ramy El-Batrawi owns about 43% of the
company.
GEOMAQUE EXPLORATIONS: In Talks With Lenders to Restructure Loan
----------------------------------------------------------------
Geomaque Explorations Ltd. (TSE: GEO) announced that it is
continuing to work with its principal lender, Resource Capital
Fund II LP of Denver, Colorado (RCF), on the restructuring of
its credit and security arrangements with RCF under the
agreement dated June 9, 2000 and has reached agreement
with RCF to extend the time to finalize the terms of this
restructuring to October 18, 2001.
In the meantime, RCF has deferred all payments required under
the Credit Agreement.
The Company's financial advisor, Haywood Securities Inc., is
assisting with this restructuring as well as examining all other
alternatives to further enhance shareholder value.
Geomaque Explorations Ltd. is an international mining company
that is producing gold from its Vueltas del Rio Mine in Honduras
and San Francisco Mine in Mexico, and exploring for precious
metals in the Americas.
HEILIG-MEYERS: Fitch Drops MacSaver Certificates to D From C
------------------------------------------------------------
Fitch downgrades ratings on the asset-backed certificates issued
by Heilig-Meyers Master Trust as follows:
* Series 1998-1 6.35% class B asset-backed certificates
downgraded to `D' from `C';
* Series 1998-2 floating-rate class B asset-backed
certificates downgraded to `D' from `C`.
The action is in response to interest shortfalls on the class B
certificates and Fitch's expectation that such shortfalls will
continue.
The `CC' rated class A certificates of both series 1998-1 and
series 1998-2 remain on Rating Watch Negative. The `CC' ratings
on the class A certificates indicate that default of some kind
is probable.
Collections have fallen further in the last few months after
averaging $33 million per month for December through April. July
and August collections totaled $18.8 million and $17.6 million,
respectively.
Taking into account the September 20 distribution, series 1998-1
class A certificates' remaining outstanding balance is $149.5
million, or 48% of their initial balance; series 1998-1 class B
certificates have not received any principal distributions.
Series 1998-2 class A certificates have $103.8 million
outstanding, or 45.1% of their initial amount; series 1998-2
class B has not received any principal distributions.
The pool is currently generating enough collections to meet
interest requirements on the class A certificates. That ability,
however, will be tested as collections approach the $10 million
per month level, which could occur as soon as December 2001.
Fitch will continue to monitor the ratings and take additional
actions if warranted. All ratings were originally placed on
Rating Watch Negative on August 18, 2000 following Heilig-Meyers
Co. filing for Chapter 11 bankruptcy protection. The securities
are backed by a pool of finance contracts made through
subsidiary MacSaver Finance for purchases at Heilig-Meyers
furniture stores.
ICG COMMS: Gets Third Extension of Removal Period to February 7
---------------------------------------------------------------
ICG Communications, Inc., and its subsidiaries and affiliates
ask Judge Walsh to further extend the time within which the
Debtors may remove proceedings pending as of the commencement of
these cases.
More specifically, the Debtors propose that the time by which
they may file notices of removal with respect to any pending
Actions be extended 120 days to the earlier to occur of (a)
February 7, 2002 or (b) 30 days after entry of an order
terminating the automatic stay with respect to any particular
action sought to be removed.
As of the Petition Date, the Debtors tell Judge Walsh they were
parties to hundreds of civil actions pending in various
jurisdictions around the United States and involving a variety
of claims, including claims sounding in contract and tort, as
well as claims arising under federal, state, and/or local
regulatory laws.
On January 31, 2001 and again on June 21, 2001 the Debtors
remind Judge Walsh he entered orders extending the time period
within which the Debtors may remove actions through the first to
occur of (a) June 12, 2001 and October 10, 2001, respectively or
(b) 30 days after the entry of an order terminating the
automatic stay with respect to the particular Action sought to
be removed.
By Motion, the Debtors request that Judge Walsh further
extend the removal period to February 7, 2002.
A further extension of the removal period is in the best
interests of the Debtors, their estates, their creditors and
other parties-in-interest. Since the commencement of these
chapter 11 cases, the Debtors' focus has been, first, on
stabilizing their businesses and, second, on formulating a
business plan that ultimately will form the basis of a plan or
plans of reorganization for the Debtors.
Consequently, the Debtors have not yet been able to conclude the
monumental task of analyzing the merits of removing each of the
hundreds of Actions to which they are a party. The proposed
extension of the removal period will afford the Debtors the
chance to make an informed decision with respect to the
benefits, if any, to be derived from removal of some or all of
the actions.
The Debtors submit that a further extension of the removal
period will not prejudice the non-debtor parties to the actions.
Each non-debtor party to an action that ultimately is removed
will continue to have the right to seek remand.
Further, an additional extension of the removal period will not
unduly delay the prosecution of the actions, as most, if not
all, of the actions remain subject to the automatic stay of
section 362(a) of the Bankruptcy Code. In short, a further
extension of the removal period simply will permit maintenance
of the status quo while the Debtors review, analyze, and
consider their options with respect to the actions.
Seeing no objection and after review of the Debtors' progress in
these cases, Judge Walsh enters an Order granting the Motion and
extending the removal period to February 7, 2002. (ICG
Communications Bankruptcy News, Issue No. 10; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
LAIDLAW INC: Court Fixes October 16 General Claims Bar Date
-----------------------------------------------------------
The Court directs that the General Claims Bar Date for all
claims against Laidlaw, Inc., and its affiliated debtors is
fixed at October 16, 2001. All creditors' proofs of claim
subject to the Bar Date are to be filed with:
Laidlaw Claims Processing Department
Logan and Company, Inc.
546 Valley Road
Upper Montclair, NY 07043
so that they are received on or before October 16, 2001.
(Laidlaw Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
LEINER HEALTH: Forbearance Period Further Extended to November 2
----------------------------------------------------------------
Leiner Health Products Inc. announced that it has reached an
agreement in principle to extend its previously announced
forbearance period until November 2, 2001.
The previous forbearance agreement that Leiner had entered into
with its bank lenders would have terminated on September 28. The
extension will allow the Company and its lenders additional time
to complete a financial restructuring plan.
Under the terms of the third forbearance agreement, Leiner's
bank lenders will continue not to exercise remedies available to
them during the forbearance period. As in the previous
forbearance agreements, the extension will terminate if the
company fails to make any payments as required thereunder or
fails to remedy any other default within two business days of
notice of such default.
Termination of restructuring discussions between the Company and
its various constituencies would result in a termination of the
third forbearance agreement.
Under the extension, all relevant terms of the previous
forbearance agreement remain in effect. The extension requires
the company to pay $150,000 in forbearance fees.
Robert Kaminski, Chief Executive Officer, said, "I am pleased to
report that as a result of the progress we have made on the
development of our restructuring plan, our bank lenders have
agreed to continue to work with us in our restructuring efforts.
With our recent positive earnings results and the continued
support and assistance of our bank lenders throughout this
process, we are optimistic about arriving at a consensual plan
of reorganization for Leiner."
Leiner Health Products Inc., headquartered in Carson,
California, is one of America's leading vitamin, mineral,
nutritional supplement and OTC pharmaceutical manufacturers.
The company markets products under several brand names,
including Natures Origin(TM), YourLife(R) and Pharmacist
Formula(R). For more information about Leiner Health Products,
visit http://www.leiner.com
LOEWEN GROUP: Signs Up Butzel Long As Special Counsel
-----------------------------------------------------
The Loewen Group, Inc. applies to the Court for the entry of an
order authorizing them to retain and employ Butzel Long as
special counsel in their chapter 11 cases, pursuant to section
327(e) of the Bankruptcy Code, and Rule 2014 of the Bankruptcy
Rules. In support of this Application, the Debtors submit (a)
the Affidavit of Timothy M. Labadie, a shareholder in Butzel and
(b) Butzel's Disclosure of Compensation.
The Debtors seek authority to retain and employ Butzel as
special counsel to provide legal services to the Debtors with
respect to certain matters arising in the State of Michigan,
including labor and employment and litigation matters arising
under United States and Michigan law. The Debtors require
knowledgeable counsel to render these essential professional
services.
The Debtors believe that Butzel is particularly well-suited for
the type of representation required by the Debtors. Butzel is a
Michigan law firm of approximately 200 lawyers with offices in
the cities of Detroit, Bloomfield Hills, Ann Arbor and Lansing.
Butzel's lawyers have substantial experience representing large
corporations in labor and employment and litigation matters.
Butzel is well qualified to provide the services requested and
also is intimately familiar with the matters for which it would
be retained. Butzel has provided legal services to the Debtors
since February 1998 with respect to labor and employment and
litigation matters arising in the State of Michigan. Butzel has
worked closely with the Debtors' management and has become well
acquainted with the legal and factual issues that would be the
subject of its retention.
Services to Be Provided by Butzel
The Debtors anticipate that Butzel will render legal advice to
the Debtors with respect to labor and employment and litigation
issues as needed throughout the remaining pendency of these
chapter 11 cases.
In particular, the Debtors anticipate that Butzel will perform,
among others, the following legal services relating to matters
arising in the State of Michigan:
(a) commence, defend and conduct litigation as necessary or
appropriate to assert rights held by the Debtors and to
protect assets of the Debtors in the State of Michigan;
(b) advise and assist the Debtors in connection with labor and
employment legal issues and litigation arising in the State
of Michigan; and
(c) advise and assist the Debtors in miscellaneous,
non-bankruptcy legal matters comparable to those services
provided prior to the Petition Date or as an Ordinary Course
Professional.
The Debtors expect that, because of the respective well-defined
roles, Butzel will not duplicate the services that the other law
firms retained by the Debtors are providing. Similarly, Butzel
will function cohesively with those other law firms, under the
direction of the Debtors, to ensure that the legal services
provided to the Debtors are not duplicative.
Payment of Fees and Expenses
Subject to the Court's approval, Butzel intends to: (a)
continue, as has been its practice, to charge the Debtors for
its legal services on an hourly basis in accordance with its
ordinary and customary hourly rates in effect on the date
services are rendered; and (b) seek reimbursement of actual and
necessary out-of-pocket expenses.
The hourly rates charged by Butzel professionals differ based
on, among other things, the professional's level of experience.
Butzel's hourly rates may change from time to time in accordance
with Butzel's established billing practices and procedures.
Timothy M. Labadie, an attorney and a shareholder of the Butzel
advise of the hourly rates of Butzel professionals as of
September 1, 2001:
Professional Position Hourly Rate
------------ -------- -----------
Carey A. DeWitt Shareholder/Employment $275/hour
Litigation
Daniel P. Malone Shareholder/Litigation $250/hour
Timothy M. Labadie Shareholder/Litigation $210/hour
Daniel N. Sharkey Associate/Litigation $175/hour
Cynthia J. Haffey Associate/Employment $170/hour
Litigation
Butzel intends to apply to the Court for payment of compensation
and reimbursement of expenses in respect of services provided
from and after August 1, 2001, in accordance with applicable
provisions of the Bankruptcy Code, the Bankruptcy Rules, the
Local Rules of this Court, the interim and final fee application
procedures applicable to other estate professionals in these
chapter 11 cases and any other applicable orders of the Court.
The Debtors made Prepetition Payments to Butzel in the aggregate
amount of $11,474.08 from their operating cash funds during the
year immediately preceding the Petition Date on account of fees
and expenses incurred by Butzel in respect of services provided
to the Debtors. Since the Petition Date, the Debtors have made
Postpetition Payments to Butzel in its capacity as an Ordinary
Course Professional in the aggregate amount of $366,013.63 on
account of fees and expenses incurred by Butzel prior to August
1, 2001 in respect of services provided to the Debtors.
Disclosure Concerning Conflicts of Interest
The Debtors notes that Butzel filed a proof of claim in Debtor
LGII's chapter 11 case asserting a claim in the amount of
$32,999.26 in respect of prepetition attorneys' fees and
expenses incurred in rendering services to the Debtors. The
Prepetition Claim was bifurcated by the Debtors into three
claims against three separate Debtors and reduced by an order of
the Court to the aggregate amount of $13,503.60 as follows: (a)
$1,557.79 against Debtor Loewen (Michigan), Inc.; (b) $9,330.33
against Debtor LGII; and (c) $2,615.48 against Debtor Ridgewood
Cemetery Company, Inc.
Based, and made in reliance, upon the Affidavit and the
Disclosure of Compensation, the Debtors submit that, to the best
of their knowledge, information and belief, Butzel represents no
interest adverse to the Debtors or their respective estates in
the matters for which Butzel is proposed to be retained. The
Debtors submit that their employment of Butzel would be in the
best interests of the Debtors and their respective estates and
creditors.
The Debtors recognize that, from time to time, Butzel has
represented, and likely will continue to represent, certain
creditors of the Debtors and various other parties adverse to
the Debtors in matters unrelated to these chapter 11 cases.
Besides, as Butzel has approximately 400 employees and 90
shareholders, it is possible that certain Butzel employees or
shareholders hold interests in mutual funds or other investment
vehicles that may own debt or equity interests in the Debtors.
Nevertheless, Butzel does not represent, and has not
represented, any entity other than the Debtors in matters
related to these chapter 11 cases, the Debtors tell the Court.
Based on a conflicts check of Butzel's client base for the past
five years, Mr. Labadie reveals to the Court interested parties
that currently employ or have formerly employed Butzel Long in
matters unrelated to the Debtors or their chapter 11 cases:
Name of Butzel Nature of Work
Clients/Affiliates Relationship Performed By Butzel
------------------ ------------ -------------------
Current Clients:
Cornerstone Asset Potential affiliate Advised regarding
Management, Inc. of unsecured creditor investment advisor
regulatory issues
Cornerstone Potential affiliate Provided general
Developers, Inc. of unsecured creditor business advice
Former Clients:
American Express Potential affiliate Advised on
Financial Advisors, of unsecured creditor financial
Inc. (closed matters upon
March 11, 1998) request
American Staffing, Potential affiliate Checked acquisition
Inc. (closed of unsecured creditor targets as to
August 17, 2000) compliance with
Michigan State
Business Tax
ARI Holdings, Inc. Potential affiliate Represented in
(closed of unsecured creditor litigation of
November 8, 2000) alleged breach of
stock purchase agr.
Bank One Trust Unsecured creditor Assist in removal
Company NA of trustee
(closed
November 30, 1999)
Batesville Casket Unsecured creditor Represented in
Company, Inc. non-litigation
(closed real estate matter
March 16, 1994)
Browning Ferris Unsecured creditor Defended wrongful
Industries, Inc. death claim and
(closed defended traffic
March 2, 1995) and weight citations
for truck operators
Cornerstone Potential affiliate Advised regarding
Enterprises, Inc. of unsecured creditor formation of company
(closed and general
October 15, 1992) corporate affairs
Wells Fargo N.A. Unsecured creditor Represented in fraud
(closed misrepresentation
September 20, 1999) case
(Loewen Bankruptcy News, Issue No. 47; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
MARINER POST-ACUTE: Wants Lease Decision Time Extended to Jan 31
----------------------------------------------------------------
Mariner Post-Acute Network, Inc. requests that, pursuant to
section 365(d)(4) of the Bankruptcy Code, the Court further
extend the date by which the Debtors must assume or reject the
Unexpired Leases to and including the earlier of (a) January 31,
2002 (or such later date as may be fixed on subsequent motion of
the Debtors) and (b) the effective date of a plan of
reorganization for the Debtors, including but not limited to the
276 Unexpired Leases designated on Exhibit A to the motion but
excluding the seven Excluded Leases identified on Exhibit B to
the motion.
The Debtors tell the Court that they are unable to make reasoned
decisions as to whether to assume or reject all the Unexpired
Leases before the deadline of September 17, 2001 afforded by the
previous extensions.
However, given the circumstances, the Debtors believe that they
should not be forced to forfeit their right to assume any of the
Unexpired Leases as a result of the "deemed rejected" provision
of section 365(d)(4) of the Bankruptcy Code, or be compelled to
assume all of leases prematurely in order to avoid rejection,
with the resultant imposition of potentially substantial
administrative expenses on their estates.
The Debtors represent that an extension is justified considering
the factors that constitute "cause" for an extension of the
section 365(d)(4) deadline.
First, the Unexpired Leases are valuable assets of MPAN Debtors'
estates and are integral to the continued operation of their
businesses.
Second, their cases are large and complex. Moreover, the
majority of the Unexpired Leases are unique and contain
different terms and market values particular to each landlord
and facility. As of the date of this Motion, the Debtors were
parties to over 280 unexpired leases of nonresidential real
property.
In order to make reasoned decisions to assume or reject facility
leases, the actual and anticipated financial performance of each
of the Debtors' leased facilities must be reviewed, and ongoing
operating results monitored and evaluated.
Another factor is that the Debtors need additional time to act
intelligently in making the judgment to assume or reject despite
the significant progress they have made. The Debtors remind the
Court that they have been forced to concentrate their efforts
over the course of the last few months on negotiating and
seeking Court approval of the Memorandum of Understanding with
the MPAN Senior Secured Lenders and the MHG Senior Secured
Lenders and the consummation of the transactions contemplated
thereby.
The Debtors are hopeful that, if the Court approves the MOU and
the transactions contemplated, they will be in a position to
finalize and seek confirmation of a plan or plans of
reorganization within the next few months, pursuant to which the
Debtors will make a final determination with respect to each of
the Unexpired Leases.
A further extension of the Section 365(d)(4) period will not
prejudice the Lessors under the Unexpired Leases, the Debtors
represent. In this regard, the Debtors tell the Court that they
have satisfied or will satisfy their Unexpired Lease-related
postpetition obligations. Moreover, any lessor may request that
the Court fix an earlier date by which the Debtors must assume
or reject its lease in accordance with section 365(d)(4) of the
Bankruptcy Code.
Therefore, the Debtors submit that the limited additional
extension requested is reasonable and necessary and will avert
the statutory forfeiture of valuable assets, promote MPAN
Debtors' ability to maximize the value of their chapter 11
estates, avoid the incurrence of needless administrative
expenses by minimizing the likelihood of the premature
assumption of a burdensome lease, and most importantly, help
preserve the health and safety of their patients and facility
residents.
Accordingly, the Debtors submit that the requested extension of
the period within which the Debtors may assume or reject the
Unexpired Leases should be granted.
A hearing on the motion is scheduled for October 15, 2001 at
2:00 p.m. (Mariner Bankruptcy News, Issue No. 19; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
MAXICARE HEALTH: Court Fixes November 30 as Claims Deadline
-----------------------------------------------------------
Maxicare, a California HMO, currently operating under Chapter 11
bankruptcy protection, announced that the U.S. Bankruptcy Court
for the Central District of California has entered an order
establishing procedures and deadlines for filing proofs of claim
against Maxicare relating to pre-petition debts.
November 30, 2001, at 4:00 p.m. Pacific Standard Time (Bar
Date), has been set as the last date by which all creditors must
file proofs of claim against Maxicare.
Notices will be mailed on or before September 28, 2001, to all
creditors listed on Maxicare's "Schedules of Assets and
Liabilities" that were filed with the U.S. Bankruptcy Court on
July 23, 2001 and amended on or about September 28, 2001 and to
other parties who have requested notice.
Interested parties may obtain a copy of the Notice concerning
these details as well as proof of claim forms and instructions
for proof of claim forms by mailing a written request to either
Stutman, Treister & Glatt Professional Corporation, attention:
Gary Klausner, 3699 Wilshire Boulevard, Suite 900, Los Angeles,
California 90010, or to Maxicare, attention: Proofs of Claim,
1149 South Broadway Street, 8th Floor, Los Angeles, California
90015 or by accessing Maxicare's website at
http://www.maxicare.com
Maxicare Health Plans, Inc., headquartered in Los Angeles, is a
managed healthcare company, with operations in California.
Maxicare, (MHP's California HMO subsidiary) filed for Chapter 11
bankruptcy protection on May 25, 2001.
MEMC ELECTRONIC: Observer Says TPG/E.ON Deal Shafts MEMC Equity
---------------------------------------------------------------
MEMC Electronic Materials, Inc. (NYSE: WFR) today announced that
Texas Pacific Group ("TPG") has entered into an agreement with
E.ON AG ("E.ON") to purchase E.ON's 72% interest in MEMC and all
of E.ON's outstanding loans to MEMC. TPG has proposed to
provide $150 million in new financing and to restructure the
acquired debt, substantially reducing the Company's total
indebtedness. Further, the agreement provides for lines of
credit and the infusion of additional liquidity, which the
Company expects will cover its cash needs both near- and long-
term. Consummation of the transaction, including the debt
restructuring, is subject to the fulfillment of certain
conditions, including the execution and delivery of definitive
agreements between MEMC and TPG, approval by MEMC's Board of
Directors and the receipt of any required regulatory approvals.
The transaction is expected to close during the fourth quarter.
"This is a great transaction for MEMC's customers, employees,
and public shareholders. We expect that our capital structure
will be significantly strengthened and we will have substantial
additional liquidity. Importantly, TPG's investment allows us to
continue our long-term fundamental strategies, thus ensuring
that America's only significant silicon wafer supplier will
continue to provide technologically advanced products to its
customers around the world," commented Klaus von Horde, MEMC's
Chief Executive Officer. "We look forward to having Texas
Pacific Group as a major shareholder in MEMC. TPG's extensive
experience in the semiconductor industry will be extremely
valuable to MEMC."
"MEMC will now have the strategy, team, and financing in place
to continue to serve its world class customer base and invest in
the new products and technologies necessary for long-term
success," commented John Marren, Partner, Texas Pacific Group.
"The Company's long tradition of innovation, proven technology
leadership and global presence have put MEMC in a strong
strategic position as the semiconductor cycle improves."
* * *
Larry Callahan (larryc@hntlgh.com or 314-236-2249) at Huntleigh
Securities in Saint Louis, Missouri, offers these comments about
the transaction:
"The deal that was announced between E.ON and MEMC and TPG
should be a coup for TPG. They basically received approximately
$800 million of senior debt and 50 million common shares of MEMC
Electronic Materials for $1 and an agreement to invest
additional amounts to provide working capital. Any proceeds to
E.ON are contingent on a huge rebound in MEMC's wafer business
in 2002. Needless to say minority holders of MEMC common other
than E.ON are unlikely to see any return at all given that the
$800 million of debt will likely be turned into equity and
existing equity cancelled. MEMC makes the basic silicon wafers
upon which circuits are etched to produce semiconductor chips.
It is a hugely capital intensive business which has very little
value added compared to the finished chips. It requires huge
amounts of electricity and huge wafer pulling machines in
vibration isolated and clean room conditions. The whole wafer
industry is struggling with low prices on 200 mm wafers and is
seeking creative financing options for the investment required
to produce the new generation of 300mm wafers in economical
production quantities. Even after canceling $800 million of debt
and additional common equity TPG will be facing additional
investment requirements to compete with huge wafer producers
like Shin-Estu. The massive cancellation of debt and likely
closure of additional facilities will at least give TPG a
platform which may enable them to profit when the chip industry
turns up after its worst one year decline in history. E.ON has
exhibited classic big company behavior in infusing huge amounts
of money into a marginal investment and then dumping it at what
appears to be a multi-decade low for the semiconductor
industry."
About MEMC
MEMC is a leading worldwide producer of silicon wafers for the
semiconductor industry. Silicon wafers are the fundamental
building block from which almost all semiconductor devices are
manufactured, such as are used in computers, mobile electronic
devices, automobiles, and other consumer and industrial
products. Headquartered in St. Peters, MO, MEMC operates
manufacturing facilities directly or through joint ventures in
every major semiconductor manufacturing region throughout the
world, including Europe, Japan, Malaysia, South Korea, Taiwan
and the United States.
MEMC's liabilities eclipsed $1.5 billion of reported assets on
the Company's June 30, 2001 balance sheet, following continued
quarter-by-quarter operating attributed to excess capacity,
declining prices and interest expense.
About Texas Pacific Group
Texas Pacific Group, founded in 1993 and based in Fort Worth,
TX, San Francisco, CA, and London, is a private investment
partnership with capital of more than $8 billion. The
partnership has made investments in over 30 companies in a broad
range of industries, including technology (Gemplus, Globespan,
ON Semiconductor, Seagate), consumer products (Del Monte Foods,
J. Crew, Punch Taverns), luxury goods (Bally, Ducati
Motorcycles) and healthcare services (Oxford Health Plans,
Magellan Health Services).
MESABA AIRLINES: Commences Restructuring After Terrorist Attacks
----------------------------------------------------------------
Mesaba Holdings, Inc., (Nasdaq:MAIR), parent company of Mesaba
Aviation, Inc., which operates as Northwest Jet Airlink and
Northwest Airlink in the Northwest Airlines system, announced
additional details about the airline's organizational
restructuring.
As previously reported, the restructuring is a direct result of
Mesaba's schedule adjustments following the terrorist attacks on
the United States and the resulting reduction in passenger
demand and increased costs including but not limited to
insurance, and new airport and airline security measures.
The airline's cost saving measures included cutting all
discretionary expenses and payroll reductions. The payroll
reductions involved a combination of voluntary and involuntary
furloughs, reduction in full-time and part-time hours, layoffs,
attrition and freezing open positions.
The net cost savings of these actions are equivalent to a
payroll reduction of approximately 650 fulltime employees.
As reported September 24, initial reductions in staff began with
a 30 percent reduction in officer and director level positions.
There was a 16 percent reduction with the combined layoffs of
salaried and administrative personnel completed yesterday and
today. Mesaba is still in the process of furloughing employees.
The combination of voluntary and involuntary furloughs will
result in approximately a 10 percent reduction of the following
employee groups combined: pilots, customer service agents,
flight attendants, maintenance and dispatch. Upon completion of
the furlough process, Mesaba expects an actual total workforce
reduction of approximately 400 employees system-wide.
"We continue to keep those affected by the September 11 attacks
in our thoughts and prayers but as President Bush has requested,
we must keep our companies moving forward successfully," said
Paul Foley, Mesaba president and CEO. "We appreciate the hard
work and dedication of our employees during this difficult time
and we are doing our best to assist those impacted."
Relief Packages
Mesaba has provided relief packages to impacted employees. The
furlough packages provide the continuation of health and flight
benefits in addition to the option of rejoining the airline when
passenger demand recovers. Depending on years of service with
the company, employees who were laid off were offered
severances, continuation of health and flight benefits and
outplacement assistance.
"As we move forward, Mesaba Airlines will continue to focus on
safety, operational excellence, cost control and process
improvements so the airline is in the best possible position
when passenger demand returns," Foley added. "When that happens,
we look forward to offering our furloughed employees the
opportunity to exercise their recall rights and rejoin the
airline."
Restructuring the Organization
Mesaba Airlines will move forward with Paul Foley continuing to
serve as president and CEO. In addition to his duties as chief
financial officer, Bob Weil will assume the duties of strategic
planning and business development.
John Spanjers, will continue in his role as vice president of
flight operations and assume the lead role in regulatory
responsibility with the Federal Aviation Administration; Scott
R. Bussell, remains as vice president technical operations; and
Bob Meekin is vice president of people and process. All
outstation regional managers will report directly to the vice
presidents of Minneapolis and Detroit hubs, Jeff Wehrenberg and
Joe Fillar respectively.
Prior to the terrorist attacks, Mesaba Airlines flew more than
800 flights a day and employed more than 3700 people.
Mesaba Holdings, Inc. is traded under the symbol MAIR on the
NASDAQ National Market. More information about Mesaba Airlines
is available on the Internet at http://www.mesaba.com
MESA AIR: Implements New Stock & Bonus Programs for Employees
-------------------------------------------------------------
Mesa Air Group, Inc. (Nasdaq: MESA) announced two programs for
employees impacted by the company's recent 10% pay reduction.
The first program will issue options to each affected employee
to purchase Mesa's common stock.
The total number of new options issued will be approximately
150,000; each affected employee will be issued 150 shares, which
will vest over a period of three years.
The Company will also initiate a bonus program, which will
restore employee lost wages, dependent upon future Company
profitability. Each affected employee will be repaid his or her
lost wages at such time as the company reports its first pre-tax
quarterly profit in 2002.
In addition, each eligible employee will receive a comparable
bonus in each subsequent quarter in which the Company is
profitable through the remainder of 2002. If the company remains
profitable throughout the year, each affected employee will be
repaid the amount of their reduction and receive extra bonus
compensation equal to three times the amount of their initial
lost wages.
Jonathan Ornstein, Mesa's Chairman and Chief Executive Officer,
fully expects next year to be a successful one for Mesa. "Our
employees have stood by us through difficult times and they will
be rewarded with our future success," stated Ornstein. "I have
received hundreds of positive responses from our people
regarding the actions we have taken to protect Mesa Airlines
and I have been touched and motivated by everyone who has
sacrificed during this period. We are happy to offer these
programs to our employees who have accepted a reduction in pay.
Given our expected future success, our employees will be able to
earn back the amount reduced from their wages and an additional
bonus equal to three times that amount. In addition, they
will have the opportunity to benefit, through stock options,
from a future increase in the Company's share price."
Mesa has recently concluded discussions with the AirLine Pilots
Association (ALPA) representing the Company's pilots, and the
International Association of Machinists (IAM) representing the
mechanics at the Company's Air Midwest subsidiary, who have both
rejected the Company's request for a 10%, 90 day pay reduction.
As a result, ALPA and IAM will not be included in this program.
The Company is continuing discussions with the Association of
Flight Attendants (AFA). "We are sincerely disappointed that
the unions representing our employees have chosen not to join
with the rest of our team during this difficult period," said
Ornstein.
Each of the Company's non-represented employee groups has taken
a 10%, 90 day reduction in pay. In addition, Ornstein and
President Mike Lotz have taken a 50% reduction in pay, and other
members of management have taken a 20% reduction.
NATIONWIDE COMPUTERS: Court Appoints Andy Plotzker As Liquidator
----------------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
New York appoints Andrew Plotzker as liquidator in Nationwide
Computers' chapter 11 case. Traub Bonaquist & Fox will
represent Mr. Plotzker, while Davis, Graber & Nasberg will
function as Mr. Plotzker's accountants.
Mr. Plotzker, as liquidator, will be responsible for the
possession and liquidation of all of the Debtor's assets. The
sale shall take place before the Bankruptcy Court at 300
Quarropas Street, White Plains, New York 10601, on October 31,
2001 at 9:45 a.m.
Judge Cornelius Blackshear adds that the motion of Olympus
America Inc. to convert Nationwide Computers' chapter 11 case to
a proceeding under chapter 7 is deemed withdrawn, without
prejudice.
Nationwide Computers & Electronics, Inc., a retailer of home
computer, electronics & entertainment inventory, filed for
chapter 11 protection on June 14, 2001 in the Bankruptcy Court
for the Southern District of New York. Jonathan Pasternak, Esq.,
at Rattet & Pasternak LLP in Harrison, New York, represents the
Debtor in its restructuring effort.
NEXTWAVE: Court Approves $2.5BB Debt Financing with UBS Warburg
---------------------------------------------------------------
NextWave Telecom Inc. announced that the Bankruptcy Court
overseeing the company's reorganization has granted its motion
to continue its Disclosure Statement Hearing until October 22nd.
At the hearing on the 22nd, the company will ask the Court to
approve the Disclosure Statement for solicitation of approvals
to its pending plan of reorganization, which was filed on August
6, 2001.
"Several weeks ago, NextWave was invited to participate in
discussions with other wireless carriers and the FCC to explore
ways to achieve a consensual resolution of litigation concerning
the company's PCS licenses," said Allen Salmasi, NextWave's
Chairman and CEO. "Although the issues are complex, and the
outcome uncertain, we have a fiduciary responsibility to explore
opportunities that could lead to a successful resolution of
these issues. We believe that a brief deferral of the approval
of the Disclosure Statement to further pursue these discussions
is in the best interest of NextWave's estate."
Neither the temporary delay in the Disclosure Statement Hearing,
nor the discussions, affect NextWave's preparations to proceed
with its reorganization. At a hearing Monday in federal court in
White Plains, New York, for example, the Court approved the
retention of UBS Warburg as the Company's financial advisor, and
approved the $2.5 billion UBS credit facility.
"NextWave continues to construct its wireless network in all 95
areas where the company currently is licensed to provide PCS
service," said Mr. Salmasi. "Pursuant to the contract we signed
with Lucent Technologies last June, the majority of NextWave
employees, working out of regional offices throughout the
country, and hundreds of employees of Lucent and other vendors,
continue to deploy wireless facilities in accordance with that
contract."
ONSITE ACCESS: Needs Until Nov. 30 to Propose a Plan
----------------------------------------------------
OnSite Access, Inc., seeks the approval of the Bankruptcy Court
for the Southern District of New York for the extension of
exclusive period to file a plan of reorganization to November
30, 2001 and the exclusive period to solicit acceptances for the
plan to January 31, 2002.
OnSite Access, Inc., a broadband telecommunications network
provider of data, voice and enhanced services to small and
medium-sized businesses, sought for chapter 11 protection on May
16, 2001. Frank A. Oswald of Togut Segal & Segal LLP in New
York, New York, represents the firm in their reorganization
efforts.
ONSITE ACCESS: Court Fixes October 15 Bar Date for Filing Claims
----------------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
New York orders the setting of the bar date in filing claims for
the chapter 11 case of OnSite Access, Inc., on October 15, 2001.
Judge Bohanon also orders the setting of the bar date for all
government on November 15, 2001.
OnSite Access, Inc., a broadband telecommunications network
provider of data, voice and enhanced services to small and
medium-sized businesses, sought for chapter 11 protection on May
16, 2001. Frank A. Oswald of Togut Segal & Segal LLP in New
York, New York, represents the firm in their reorganization
efforts.
OWENS CORNING: Wants Disclosure of Asbestos Claims Information
--------------------------------------------------------------
Owens Corning wants disclosure of certain settlement and other
information concerning pending and resolved asbestos personal
injury and property damage claims asserted against their
estates.
J. Kate Stickles, Esq., at Saul Ewing LLP in Wilmington,
Delaware, tells the Court that this information will important
to the proposed recipients -- the Future Claimants'
Representative and the Committees -- as they conduct their
respective valuation analyses, and will assist the Committees
and the Future Claimants' Representative in the fulfillment of
their statutory functions.
The Debtors regard the provision of such information
as critical to the advancement of the reorganization effort.
Ms. Stickles relates that a court order is a prerequisite to the
turnover of this information to avoid the possible breach by
Debtors of affirmative confidentiality covenants contained in
many of their settlement agreements.
Ms. Stickles contends that because the valuation of the claims
of asbestos creditors against the Debtors and the estimated
future asbestos liabilities are critical issues in this
bankruptcy, the estimation of Debtors' future asbestos
liabilities may be the single most important issue in this
reorganization.
In order to assist in the valuation issues, these parties have
retained attorneys and valuation experts:
A. Asbestos Committee has retained the services of the law firm
of Caplin & Drysdale, as well as the services of Dr. Mark
Peterson, who has appeared as an expert on valuation matters
in the bankruptcies of other prominent asbestos producers.
B. The Unsecured Creditors' Committee has retained Davis, Polk &
Wardwell as its counsel and Dr. Letitia Chambers as a
valuation expert; Dr. Chambers has previously testified with
respect to the valuation of asbestos claims in the bankruptcy
of Celotex, another asbestos producer.
C. The Futures Representative has retained the law firms of Kaye
Scholer and Young, Conaway, Stargatt & Taylor and intends to
retain a futures valuation consultant to assist him in his
representation of the future asbestos claimants.
The parties will require access to historical information
reflecting asbestos-related claims against the Debtor found in
two places:
A. the settlement agreements that the Debtors have entered,
including the agreements that were entered under the auspices
of the Debtors' National Settlement Program ("NSP"); and
B. the claims databases maintained by the Debtors to track the
asbestos-related claims against them.
Ms. Stickles relates that the Courts that have addressed
valuation questions with respect to other bankrupt asbestos
producers have concluded that this type of information is both
relevant and critical to an accurate valuation.
Ms. Stickles informs the Court that the Debtors has a long
history of resolving asbestos personal injury claims, and has
received over 925,000 asbestos personal injury claims alleging
exposure to an asbestos-containing product manufactured or
distributed by it between 1928 and 1973.
Since June of 1998, Ms. Stickles adds that the Debtors have also
participated in extensive program of settlement agreements
resolving over 80% of the pending pre-petition claims.
Ms. Stickles relates that the NSP Agreements represent the most
recent body of settlement values relating to present claims and
also contain negotiated values for future claims. Ms. Stickles
states that information cannot be disclosed without Court order
as the NSP Agreement provides that terms of the Agreement shall
remain confidential.
Apart from the NSP agreements, Ms. Stickles adds that the
Debtors have entered into numerous settlement agreements
containing a clause requiring a court order as a prerequisite to
the disclosure of the terms of the agreement at issue.
Ms. Stickles explains that the proposed Order is necessary to
authorize access to the settlement agreements and the databases
without which, such disclosure might breach the provisions of
various settlement agreements.
Ms. Stickles argues that the Debtors should not be forced to
breach their settlement agreements in order to move the
valuation process forward, and a court order will permit them to
honor their commitments to the plaintiffs that executed such
agreements.
Ms. Stickles asserts that the proposed Order limits recipients'
use of such information to ones that are legitimately related to
the proceedings in this reorganization. (Owens Corning
Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
PACIFIC GAS: Court Okays Proposed Interim Compensation Protocol
---------------------------------------------------------------
Upon the Joint Motion of Pacific Gas and Electric Company and
Official Creditors Committee, the Court approves the following
procedure for awarding interim compensation and reimbursement of
expenses to Professionals' and reimbursement of expenses to
Committee members (the term "Professionals" shall mean
attorneys, accountants and other professional advisors or
consultants that will be subject to the Bankruptcy Code
provisions relating to the employment and compensation of
professionals that are retained by the Debtor or the Committee.
It does not apply to those professionals employed by the Debtor
pursuant to its Amended Application for Authority to Employ and
to Continue the Employment of Special Counsel to Debtor in
Possession on Non-bankruptcy Mailers filed on June 22, 2001):
(A) Cover Sheet Application
(1) Commencing upon entry of an order approving the Motion,
and continuing each month thereafter, each Professional
seeking the payment of interim compensation concerning a
given calendar month(s) shall file with the Court and
serve on the Special Notice List, an abbreviated
application for interim compensation and reimbursement of
expenses (the "Cover Sheet Application").
The initial such filing by the Professionals shall cover
the time period from April 6, 2001 through June 30, 2001
and shall be filed and served no later than July 31,
2001. Professionals may elect to submit an initial Cover
Sheet Application covering a shorter time period,
provided that payment may be requested only for the time
period actually submitted.
Subsequently, the Cover Sheet Applications shall he filed
and served within 30 days after the end of the month for
which compensation is sought. A Professional may elect
not to submit a Cover Sheet Application during a
particular month, provided that such Professional shall
not be paid for work performed during such month until a
Cover Sheet Application is actually submitted.
(2) The Cover Sheet Application shall relate to services
rendered and expenses incurred during the given month(s);
shall seek payment of interim compensation in an amount
equal to 90% of the fees sought and 100% of the expenses
incurred during the prior month; and shall indicate the
amount requested, the total time expended, the names of
the professionals who performed the services, and the
hourly billing rate for each Professional.
The 90% amount shall apply for the period April 6 through
July 31, 2001. Thereafter, the monthly amount shall equal
85% of the fees sought.
(3) Each Professional electing to file a Cover Sheet
Application shall: (1) file their Cover Sheet Application
with the Court; and serve a copy of said Cover Sheet
Application on the Special Notice List. The Cover Sheet
Applications that are served on counsel for the
Committee, counsel for the Debtor and the Office of the
United States Trustee shall be served by overnight mail
and shall be accompanied by a detailed listing of the
time expended by the Professionals who performed the
services and the costs incurred during the month of the
Cover Sheet Application period.
(4) The Committee, the Debtor or the United States Trustee
may object to the payment of fees or reimbursement of
expenses in a Cover Sheet Application. Any such objection
must be filed with the Court and served on the Special
Notice List no later than the fifteenth day of the month
following the filing and service of the Cover Sheet
Application. If no objection is timely filed and served,
the Cover Sheet Application shall be deemed approved on
an interim basis, and the Debtor shall be authorized and
directed to make the payment requested therein. If an
objection is timely filed and served, then the Debtor
shall be authorized to make payment as requested in the
Cover Sheet Application only of the amounts, if any, that
are not in dispute. The disputed amounts, if any, in the
Cover Sheet Application shall be heard and resolved by
the Court at the next hearing to be held.
(B) Committee Members
(1) On a monthly and interim basis, members of the Committee
may seek reimbursement of expenses incurred in connection
with their performance of the duties of the Committee,
pursuant to Bankruptcy Code Section 503(b)(3)(F).
(2) Counsel for the Committee shall prepare a monthly summary
of such Committee member cost exhibits, file such summary
with the Court, and serve a copy on the Debtor and
its counsel and the United States Trustee no later than
30 days after the end of the month for which such
reimbursement is sought.
(3) The Debtor or the United States Trustee may object to the
reimbursement sought. Any such objection must be filed
with the Court and served on the Special Notice List no
later the fifteenth day of the month following the filing
and service of the reimbursement request. If no objection
is timely filed and served, the Debtor shall be
authorized and directed to pay 100% of the requested
expense reimbursement, on an interim basis. If an
objection is timely filed and served, then the Debtor
shall be authorized to make payment of only those amounts
that are not in dispute.
(4) The disputed amounts, if any, shall be heard and resolved
at the next hearing to be held.
(5) At the time that the Court holds hearings on interim fee
applications of Professionals employed at the expense of
the estate, the Court will also hold hearings on final
applications of Committee members for allowance and
approval of all expense reimbursements.
(6) Permissible expenses of Committee members shall not
include members' attorneys fees, unless otherwise
ordered.
(C) Interim Fee Application
(1) Notwithstanding the monthly fee request and payment
thereof pursuant to Cover Sheet Applications, within 45
days after the end of the each four-month period,
commencing with the period that ends July 31, 2001, (the
"Filing Deadline"), each Professional who has elected to
file a Cover Sheet Application or otherwise is seeking
interim compensation shall file with the Court and serve
on the Special Notice List an Interim Fee Application
with a summary of the activities of the Professional.
(2) The First Interim Application Period will include the
time from April 6, 2001 through July 3l, 2001.
The Professionals shall submit their applications in
printed form and electronically to the United States
Trustee in a format as set forth on Exhibit "B" of the
motion, unless the Court orders otherwise. I in
accordance with Bankruptcy Code Section 331, Bankruptcy
Rule 2016, the Northern District of California Bankruptcy
Local Rules and Compensation Guidelines and the
Guidelines of the Office of the United States Trustee.
(3) The Interim Applications shall seek approval of 100%
(including the 10% held back from monthly payments of the
requested interim compensation and reimbursement of
expenses, including any compensation and reimbursement
made pursuant to Cover Sheet Applications, during the
prior four-month period. Fifteen percent (15%) for the
second and subsequent Interim Applications.
(4) Any professional who fails to file an Interim Application
seeking approval of compensation and expenses previously
paid under this Order when due shall (1) be ineligible to
receive further monthly payments of fees or expenses
until further order of the Court and (2) may be required
to disgorge any fees paid since retention or the last fee
application, whichever is later.
(D) Time Records
The time records of Applicants shall be filed separate from
all other pleadings and shall be accompanied only by a cover
sheet indicating "Time Records Exhibit for the Period
___________ to ___________." Contrary to the practice for
other pleadings filed in this case, Applicants shall file
only an original and one copy of the Time Records Exhibit.
(E) Notice of Hearing
Within 7 calendar days following the Filing Deadline, the
reorganization counsel for Debtor shall file with the Court
and serve on the Special Notice List, a notice of the hearing
on the Interim Applications filed with respect to the subject
period that sets forth the total amount of compensation for
services rendered and reimbursement of expenses sought in
each Interim Application.
The Debtor shall be required to serve such notice twenty (20)
days prior to the hearing on the Interim Applications.
(F) Notice of Applications
Pursuant to the authority granted the Court under Federal
Rule of Bankruptcy Procedure 2002(i), the Professionals shall
be required to serve the Interim Applications, and the
pleadings relating to final allowance of fees and expenses in
these cases only on the Special Notice List, notwithstanding
Bankruptcy Rule 2002(a)(6).
Further, the time records of the Professionals need only be
served on the United States Trustee, counsel for the Debtor
and counsel for the Committee. The time records can be
accessed by the public at BMDS, 246 First Street, Suite 202,
San Francisco, California 94105. Tel: 415-371-0232, Fax: 415-
371-1973.
(G) Hearing Dates
The Court shall hold a hearing on Interim Applications for
each subsequent four-month period on a date not less than 25
days after the date on which reorganization counsel for
Debtor shall give notice. (Pacific Gas Bankruptcy News, Issue
No. 13; Bankruptcy Creditors' Service, Inc., 609/392-0900)
PHAR-MOR: Moody's Junks Ratings Following Bankruptcy Filing
-----------------------------------------------------------
Moody's Investors Service downgraded all ratings of Phar-Mor,
Inc. following the announcement that the company filed for
bankruptcy on September 24, 2001. Ratings lowered are as
follows:
* $41.3 million of 11.72% senior unsecured notes (due
September 2002) to Caa3 from Caa1,
* Senior Implied rating to Caa2 from B3, and
* Senior Unsecured Issuer rating to Caa3 from Caa1.
The rating outlook is negative while there is approximately $41
million of debt securities affected.
The rating action reflects the uncertain prospects for the
company following its bankruptcy filing, Moody's said. The
company's highly leveraged financial condition, the geographic
concentration in a few slow-growth markets, and the rigorous
competitive environment for prescription drugs and general
merchandise were also considered.
However, the company's market position in a few areas and
relatively modern store base continue to be strengths of the
company, the rating agency added.
Phar-Mor, Inc. operates 139 deep-discount drug stores in 24
states with 57% of the stores located in New York, New Jersey,
Pennsylvania, and Ohio. The company headquarters is Youngstown,
Ohio.
PILLOWTEX: Gets Okay to Pay Prepetition Personal Property Taxes
---------------------------------------------------------------
Judge Robinson granted the relief requested by Pillowtex
Corporation, subject to any necessary consent by the post-
petition lenders. The Court authorized the Debtors to pay pre-
petition taxes that are subject to first-priority statutory
liens.
Judge Robinson also permitted them to compromise and settle, and
to pay any claim of a governmental unit in respect of the pre-
petition taxes that are subject to first-priority statutory
liens.
Judge Robinson emphasized that the Debtors should give a notice
of any proposed payment or compromise of the pre-petition taxes
to their principal pre-petition and post-petition secured
lenders, and the Creditors' Committee, at least three days prior
to making any payment or consummating any settlement. (Pillowtex
Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
POWERBRIEF: Files Chapter 11 Petition in Texas
----------------------------------------------
PowerBrief Inc. (OTCBB:PWRB), a development stage enterprise,
who serves the legal community by providing a secure, Internet-
based platform for tightly integrated case management, including
document and discovery management, will voluntarily file today,
October 2, 2001, for reorganization under Chapter 11 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the Southern
District of Texas, Houston Division.
In early September, the Company was working towards a
contemplated transaction that would assure the continuance of
the Company's business strategies. The tragic events of
September 11, 2001, caused the interested party to indefinitely
postpone this transaction.
Since early in the second quarter of 2001, PowerBrief initiated
and continues to pursue financing and strategic alternatives to
meet its capital needs. The continued uncertainties in the
financial markets have contributed to the Company's inability to
raise additional capital or find a suitable strategic partner.
"PowerBrief is voluntarily taking this action because we believe
it will best protect the Company's assets for the benefit of our
creditors, customers, employees and other stakeholders while we
continue to evaluate our strategic alternatives," said Jim
Green, C.E.O and director. "Although we have taken dramatic
steps to counter the business and capital climate our Company
faces, we now find it necessary to seek assistance of the court
in order to have the time to reorganize our balance sheet, and
seek strategic alternatives for the Company."
PowerBrief Inc. serves the legal community by providing a
secure, Internet-based platform for tightly integrated case
management, including document and discovery management.
PowerBrief features a suite of applications that dramatically
improve collaboration, efficiency, risk management and client
advocacy. PowerBrief hosts its ASP offering with Intel(R) Online
Services Inc. Additional information about PowerBrief can be
found at the Company's Web site, http://www.powerbrief.com
PSINET INC: Court Denies NTFC Relief From Automatic Stay
--------------------------------------------------------
NTFC Capital Corporation moves the Court for relief from the
automatic stay, pursuant to section 362(d) of the Bankruptcy
Code, in order to seek leave of the Canadian court before which
PSINet Canada's insolvency proceedings are pending, to register
under Quebec law its interest in that portion of the Canadian
property located in the province of Quebec.
PSINet, Inc. and the Committee file a Joint Objection to the
motion. NTFC then file a Reply Memorandum of Law in Further
Support of the motion.
The Court conducted a hearing, and after due deliberation,
ordered that the motion is denied.
As is in NTFC's objection to the Debtors' Canadian Business Sale
Motion, NTFC seeks the relief in connection with the alleged
contribution by the Debtors as capital to its wholly owned
Canadian subsidiary, PSINet Limited (PSINet Canada), recent
equipment leases to which NTFC is a party and equipment under
the leases that cost allegedly in excess of $10 million.
NTFC relate that when it learned that its rights in the Quebec
NTFC Canadian Equipment might be negatively affected as a result
of a motion filed in the CCAA Proceedings relating to certain
claims of employees to be presented to the Ontario Court, it
filed a motion (the Canadian Lift Stay Motion) in the CCAA
Proceeding for a declaration that the stay in that proceeding
would not prevent registration of NTFC's rights of ownership (in
contrast with security) in the NTFC Equipment in Quebec as
against PSINet Canada and third party transferees of PSINet
Canada or, in the alternative, for relief from such stay to
permit registration.
Subsequent to that, PSINet USA argued before the U.S. Bankruptcy
Court that the automatic stay imposed by section 362(a) of the
Bankruptcy Code barred NTFC from pursuing the Canadian Lift Stay
Motion in the Ontario Court. The Committee argued in support of
the application of the automatic stay. In response to the U.S.
Bankruptcy Court's stated view on the issue, NTFC abandoned the
Canadian Lift Stay Motion.
To pursue the action, NTFC therefore files this motion for
relief from the automatic stay.
NTFC asserts that once it establishes that the relevant leases
or the equipment located in Quebec are the property of PSINet
Canada, the automatic stay imposed by section 362(a) of the
Bankruptcy Code is not implicated by NTFC's proposed action with
respect to such property in the Canadian court.
Nevertheless, even if the automatic stay were deemed applicable,
NTFC is entitled to relief from the stay because PSINet USA has
no equity in the subject leases and equipment and such property
is not necessary to an effective reorganization of the above-
captioned Debtors, NTFC argues.
NTFC argues that:
(A) the automatic stay imposed by 11 U.S.C. section 362(a) does
not apply for the following reasons:
(1) Section 362(a) of the Bankruptcy Code provides that the
filing of a chapter 11 case automatically stays, inter
alia, the following:
-- the commencement or continuation ... [of] action or
proceeding against the debtor that was or could have
been commenced before the commencement of the
[chapter 11 case] ... or to recover a claim against
the debtor that arose before the commencement of the
case under this title;
-- any act to obtain possession of property of the estate
or of property from the estate or to exercise control
over property of the estate;
-- any act to collect, assess, or recover a claim against
the debtor that arose before the commencement of the
case under this title.
However, PSINet USA and PSINet Canada are independent
juridical entities. A decision to allow NTFC to register
in Quebec its ownership interests in the Quebec Equipment
as against PSINet Canada does not constitute the
commencement or continuation of a legal proceeding
against PSINet USA.
(2) The section 362(a)(1) automatic stay applies only to acts
taken against PSINet USA, and not its non-debtor
subsidiaries and PSINet Canada is not a debtor in the
U.S. Bankruptcy Court.
(3) Once PSINet USA contributed the NTFC Leases and schedules
relating to the NTFC Canadian Equipment and such
equipment as capital to PSINet Canada, PSINet USA's only
interest in such property was that of a shareholder and
creditor of PSINet Canada. Where a debtor owns shares in
a non-debtor corporation, assets owned directly by the
corporation are not the property of the debtor's estate.
The automatic stay simply does not apply to the NTFC
Leases and schedules or the Quebec Equipment owned by
PSINet Canada.
(4) Section 362(a)(6) imposes the automatic stay to prevent
any act to collect, assess or recover a claim against
PSINet USA. The actions proposed by NTFC, the mere
registration of its ownership interests in the Quebec
Equipment do not trigger the application of this statute.
(5) The legislative history of section 362(a)(6) and
developed case law show that the statute is intended to
prohibit creditors from harassing debtors into payment of
claims. NTFC's actions do not constitute an attempt to
coerce PSINet USA, a sophisticated entity with
experienced and knowledgeable counsel, into repaying
NTFC's claims.
(6) section 362(a)(6) does not stay actions against non-
debtor entities, such as guarantors, sureties, joint
tortfeasors or co-obligors, who are liable with the
debtor on the creditors' claims.
(7) NTFC's claim against PSINet USA is not affected by any
action that NTFC takes in respect of the NTFC Canadian
Equipment because a creditor's bankruptcy claim is not
reduced or impaired by subsequent payments received from
third party obligors until such claim has been satisfied
in full.
(B) NTFC is entitled to relief from the automatic stay under
sections 362(d)(1) and (2) of the Bankruptcy Code if the
automatic stay is deemed applicable to the Quebec Equipment
owned by PSINet Canada for the following reasons:
(1) Cause exists under section 362(d)(1) of the Bankruptcy
Code considering:
* the lack of adequate protection of the property;
* a desire to permit an action to proceed to completion
in another tribunal;
* the lack of any connection with or interference with
the pending bankruptcy case;
* that it is patently unjust to apply the automatic stay
under the Bankruptcy Code to deny NTFC its rights
under Canadian law and to permit PSINet Canada to sell
the NTFC Canadian Equipment to Telus Corporation free
and clear of NTFC's liens;
* the applicability of the doctrine of international
comity.
Regarding "international comity", NTFC argues that in this
matter, Canada has a stronger interest in regulating the
protection and perfection of ownership interests against
tangible personal property located within its borders, given
that the Quebec Equipment was shipped directly from Nortel's
warehouses in Canada to PSINet Canada's facilities in Quebec
where it was installed and remains to date, that PSINet
Canada has used the Quebec Equipment in its operations. The
interest of the United States in applying its laws in respect
of the Quebec Equipment is much more tenuous than Canada's
interest, NTFC says. NTFC argues that the Bankruptcy Code and
its automatic stay provisions should not be permitted to
override applicable Canadian law, which may permit the
Canadian Lift Stay Motion.
NTFC also asserts that it is entitled to relief from the
automatic stay under section 362(d)(2) of the Bankruptcy Code
because (i) PSINet USA lacks equity in the NTFC Canadian
Equipment, (ii) such property is not necessary for PSINet
USA's reorganization.
NTFC asserts that PSINet USA lacks equity because it does not
own the Quebec Equipment and will not benefit directly from
the sale of such equipment by PSINet Canada to Telus
Corporation. Once NTFC satisfies its burden of proving that
PSINet USA lacks equity in the Quebec Equipment, section
362(g)(2) of the Bankruptcy Code shifts the burden of proving
that the Quebec Equipment is necessary for an effective
reorganization to the party opposing such relief, NTFC
argues.
In NTFC's opinion, the Quebec Equipment is decidedly
unnecessary to an effective reorganization of PSINet USA and
is entitled to relief from the automatic stay unless PSINet
USA demonstrates that the Quebec Equipment is essential to
PSINet USA's efforts to reorganize.
NTFC reiterates that the relief requested in this Motion
presumes that the NTFC Leases and schedules relating to the
Quebec Equipment and such equipment have been contributed as
capital to PSINet Canada. If that argument does not prevail,
the relief requested here and in the Canadian Lift Stay
Motion will have no adverse effect on the Debtors or any
party in interest, NTFC tells Judger Gerber.
In conclusion, NTFC requests the entry of an order (a)
determining that NTFC's actions to protect its interests in
respect of the Quebec Equipment solely as to PSINet Canada do
not violate the automatic stay because the stay does not
apply, (b) granting NTFC relief from the automatic stay to
permit NTFC to prosecute the Canadian Lift Stay Motion to
protect its interests in respect of the Quebec Equipment
solely as to PSINet Canada and (c) granting NTFC such other
and further relief as is just and proper.
Joint Objection By the Debtors and the Committee
The Debtors, by their attorneys, Wilmer, Cutler & Pickering,
together with the Committee, by its counsel, Wachtell, Lipton,
Rosen & Katz, file a Joint Objection to the motion of NTFC.
The Debtors and the Committee note that NTFC's motion is based
on the presumption that it will be successful in convincing the
Court that PSINet somehow "conveyed ownership" of the Equipment
to PSINet Limited, the same centerpiece as in NTFC's objection
to the Debtors' Motion to sell its Canadian business to Telus
Corporation.
As far as ownership is concerned, however, NTFC never filed any
financing statements with respect to the Equipment located at
PSINet facilities in the province of Quebec, Canada, and with
respect to the Equipment located at PSINet facilities in the
province of Ontario, Canada, NTFC filed financing statements
on April 30, 2001, within ninety days prior to Debtors' filing
of their Chapter 11 cases, the Debtors and the Committee tell
the Court.
If NTFC is unsuccessful in its "transfer of ownership" argument,
the motion is moot. Yet, the Telus sale hearing, will not be
conducted until the scheduled date of September 12, 2001
(continued to September 26, 2001). In short, what NTFC now seeks
is an advisory ruling.
For this reason, NTFC's motion is not ripe, the Debtors and the
Committee assert. Even assuming that NTFC's Motion were ripe,
relief from stay is simply unwarranted, for it would allow NTFC
to improve its position (from unsecured to secured status) and
recover upon its claim against PSINet, a U.S. Chapter 11 debtor
and the only party with financial obligations to NTFC, and at
the expense of all other unsecured creditors in these Chapter 11
estates, the Debtors and the Committee go on.
The Debtors and the Committee further point out to the Court,
that what NTFC seeks in essence is the Court's assistance for
that which the Bankruptcy Code prohibits -- the receipt of a
post-petition preference.
Specifically, the Debtors and the Committee argue as follows:
(1) The Motion Should Be Denied Because It Is Not Ripe
The ripeness doctrine determines whether a dispute or alaim has
matured to a point of warranting judicial intervention. To
evaluate ripeness, a court must look at the "fitness of the
issues for judicial decision and the hardship to the parties of
withholding court consideration." A claim is fit for review only
when it requires no further factual development to crystallize
the legal issues and aid the court in resolution.
NTFC has orally suggested that an exception to the ripeness
doctrine applies to this Motion. That exception is for
controversies that are "capable of repetition, yet evade
review."
This exception applies to issue of mootness - not ripetiess.
Furthermore, it does not apply to our facts. There is no
indication that this issue is susceptible to repetition and
there is no reason to think it will evade this or any other
Court's review. Courts also balance the hardship to the parties
in not rendering a decision. Abbott, 387 U.S. at 149. NTFC can
claim no counterbalancing hardship in not receiving its
requested advance, declaratory determination.
The Debtors have requested that the 10-day stay of effectiveness
of the sale order be waived and NTFC has contested that relief.
The 10-day stay, if granted, will permit NTFC with a full and
fair opportunity to have the Motion heard and to file its
registration statements.
Based on this, and for the reasons mentioned above, until the
Court has had a chance to rule on the merits of NTFC's "transfer
of ownership" argument, the Motion is simply not ripe.
(2) NTFC Is Wrong In Suggesting That The Automatic Stay Does
Not Apply
At a hearing to resolve certain questions concerning NTFC's
conduct without first having obtained relief from the stay in
the U.S. Court overseeing the bankruptcy cases of PSINet, the
Court recognized:
362(a) applies to [NTFC's attempts to perfect liens on the
Equipment without first obtaining relief from this Court],
subject to anybody coming up with some proof that says that any
representations to me by any party here turned out to be untrue,
[and because NTFC did not], section 362(a)(1) has been violated
or would be violated because it is an action, that is, the
action in Canada for leave to try to collect what is ultimately
a pre-petition claim against the estate, 362(a)(3) that it's an
act or exercise or control of the property of the estate for
separate reasons insofar as there is a record owne[r] by the
U.S. parent, and because of 48th Street Steakhouse principles
with respect to the value of the stock... [362(a)(1), it] is
also an act, as Mr. Charles argued, to try to recover on a claim
against the debtor if indeed NTFC's rights to get paid whatever
money it shelled out are obligations of the U.S. parent.
(3) No Cause Has Been Demonstrated For Relief From The Stay
Unsecured creditors like NTFC "bear[] [a] heavy and possibly
insurmountable burden of proving that the balance of hardships
tips significantly in favor of granting relief (from stay when
balanced) as against the hardships to the Debtor in denying
relief." NTFC has not demonstrated that "cause" exists for this
Court to modify the automatic stay.
If NTFC is permitted to assert liens on the property, the clear
result of all this will be to elevate NTFC to the status of a
secured creditor with respect to its U.S. claims, to the
detriment of all similarly situated unsecured creditors.
There is no "cause" for NTFC's request to elevate its status,
and it cites no cases in which such relief has been granted.
(4) Relief Under Section 362(d)(2) Is Inappropriate
NTFC's argument that it should receive relief from the automatic
stay because PSINet has no equity in the Equipment pursuant to
Section 362(d)(2)(A) of the Bankruptcy Code presumes that PSINet
no longer owns the Equipment. Even if PSINet Limited has
obtained the "rights to use" the Equipment (which it has not),
PSINet can take back the Equipment at any time.
Even if PSINet Limited owns the Equipment (which it does not),
it is clear that the PSINet estate -- as the largest creditor in
Canada and the sole shareholder of the Canadian subsidiaries --
is the real party in interest if the Equipment is sold. Thus,
the PSINet estate has equity in the Equipment and should receive
the value of the Equipment in Quebec until NTFC demonstrates
otherwise.
(5) The Sonnax Factors Are Inapplicable
NTFC next argues that under Sonnax Indus. Inc. v. Tri Component
Products Corp. (In re Sonnax Indus., Inc.), 907 F.2d 1280, 1285
(2d Cir. 1990), relief from the stay is appropriate. However,
the Sonnax case involves the question of whether to allow a
prepetition litigation to continue in another forum. That is not
what NTFC is seeking, for under the Protocol and by stipulation
of the parties, the U.S. Court is the Court that should hear and
resolve all issues involving the "transfer of ownership"
question.
In addition, Sonnax and its progeny make clear that even if a
creditor is allowed to continue prepetition litigation, it
cannot go beyond the point of getting a judgment, for to do so
would allow that creditor to "leap frog" to the front of the
line and obtain a recovery before similarly situated creditors.
(6) Comity Dictates No Different Result
The cross-border protocol approved by both the Canadian Court
and the U.S. Court provides that the issues raised in the Motion
and the NTFC Objection should be resolved by the U.S. Court. The
entire premise behind the Protocol is to ensure that the two
Courts worked in harmony throughout these cases. This is not a
case where, because of the absence of such a protocol, one court
ought fear stepping on the toes of another. Viewed in this
light, NTFC's arguments to the contrary are without merit.
Furthermore, by stipulation and order dated August 27, 2001,
NTFC agreed to address issues "concerning transfer of ownership
of the [Equipment] from the Debtors to [PSINet Limited]" in the
U.S. Court in the first instance.
Reply Memorandum of Law By NTFC
In response, NTFC files a Reply Memorandum of Law putting
forward four points in further support of the motion.
Point I: NTFC'S Motion Is Ripe For Decision
The United States Supreme Court has stated that the "basic
rationale" of the ripeness doctrine "is to prevent the courts,
through avoidance of premature adjudication, from entangling
themselves in abstract disagreements over administrative
policies. . ." Abbott Laboratories v. Gardner, 387 U.S. 136, 148
(1967) rev'd on other grounds, Califano v. Sanders, 430 U.S. 99
(1977); see Able v. U.S., 88 F.3d 1280 (2d Cir. 1996); Volvo
North American Corp. v. Men's International Professional Tennis
Council, 857 F.2d 55 (2d Cir. 1988).
A final resolution of the ownership question should not be a
condition precedent to the grant of stay relief NTFC seeks. All
NTFC seeks in the relief motion is to register its claimed
rights to the NTFC Canadian Equipment, a step permitted by
Canadian law, before this equipment is sold to a third party and
any unregistered rights are lost. Nothing in this request
requires a final factual finding that NTFC actually holds any
such rights; indeed, if PSINet USA is, at some later date, found
to own the NTFC Canadian Equipment NTFC's Canadian registrations
will be rendered moot and will have occasioned prejudice to no
one.
If NTFC's position on ownership proves to be correct and it is
prevented from registering its rights, it will be irreparably
harmed if a sale is approved and consummated.
PSINet USA argues audaciously that Bankruptcy Rule 6004(g)'s 10-
day stay will satisfactorily protect NTFC, while at the same
time acknowledging the Debtors seek a waiver of that stay.
PSINet USA does not explain how NTFC will be protected if the
Debtors' request for a waiver of the Rule 6004(g) stay is
granted.
Unless the Court rules on the Motion prior to a sale of the NTFC
Quebec Equipment, NTFC will be forced to either: (a) do nothing,
in which case its rights as a secured creditor if a sale is
approved and consummated will be lost, or (b) register its
rights in Canada and risk being sanctioned by this Court for
violation of the automatic stay. This is precisely the sort of
dilemma that betokens a ripe dispute.
Point II: Under Quebec Law Section 544 Of The Bankruptcy Code
Has No Application
The Debtors and the Committee mischaracterize the laws of Canada
and Quebec and the relief sought by NTFC in its Motion as a
postpetition attempt to perfect its security interest in the
Quebec Equipment.
Under Quebec law, NTFC is considered the owner of the NTFC
Canadian Equipment in Quebec regardless whether the NTFC Leases
are deemed to be financing arrangements or true leases under
United States law. No future factual development will influence
the ownership question: the NTFC Canadian Equipment is owned
either by PSINet USA or PSINet Canada. NTFC's ownership
interests in the Quebec NTFC Canadian Equipment are superior to
those of the Debtors and PSINet Canada, but may be subordinate
to the rights of third parties unless NTFC registers its
ownership interests in the Register of Personal and Movable
Rights in Quebec (the Quebec Registry).
The CCAA does not treat a debtor as a third party like section
544 does under the Bankruptcy Code. Consequently, under
applicable Canadian and Quebec law, NTFC is "perfected" as to
PSINet Canada, even though NTFC did not register its ownership
interest.
Since the commencement of a CCAA proceeding does not deem the
applicant to be a third party, there is apparently no reason
under Canadian law to prohibit NTFC from registering its
ownership rights in the Quebec NTFC Canadian Equipment.
If the pending sale of the NTFC Canadian Equipment to Telus
Corporation is approved, NTFC's interest in the Quebec NTFC
Canadian Equipment may be prejudiced.
In an abundance of caution and in deference to the U.S. Court's
preliminary view, NTFC seeks relief from the automatic stay to
file papers before the Ontario Court to seek relief from the
Canadian stay to register its ownership interests as against
PSINet Canada.
Point III: Quebec Law Should Be Applied Under Principles Of
International Comity
Application of the Protocol and the Stipulation are not intended
to, and do not, alter the Court's analysis of applicable law.
Requesting the Court to apply principles of comity in papers
that seek a determination of certain issues in the first
instance is consistent with, not in contravention of, the
Protocol and Stipulation. Because of the close nexus between the
Quebec NTFC Canadian Equipment and Quebec, Quebec law should
apply to issues in respect of the Quebec NTFC Canadian
Equipment.
Point IV: NTFC Is Free To Argue That The Stay Does Not Apply
PSINet USA and the Committee argue that this Court has already
decided that the stay applies. In fact, the entire discussion
quoted and relied upon by PSINet USA was prefaced by the
statement "It seems to me that without adjudicating as I do not
adjudicate any disputed issues of fact, at least material
disputed issues of fact, 362(a) applies to this . . ."
Indeed, the discussion arose during a status conference
precipitated on short notice by a letter from PSINet USA. No
briefs were submitted on this issue. In that context, the Court
did not render a final decision on the applicability of the
automatic stay, and nothing bars NTFC from raising this argument
here.
The cases cited in the motion supporting the inapplicability of
the stay, all of which involve actions against a third-party
non-debtor, are on point since NTFC only seeks relief from the
stay to register its interests against PSINet Canada, an entity
which is not a debtor in this proceeding. (PSINet Bankruptcy
News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-
0900)
PUTNAM LOVELL/FEP: Fitch Places 8 Tranches on Watch Negative
------------------------------------------------------------
Fitch places eight tranches from two mutual fund fee
securitizations on Rating Watch Negative. These are the only
mutual fund fee transactions rated by Fitch.
Putnam Lovell Finance Trust 1999-2
* $40,300,000 class A-2 notes 'A-';
* $10,400,000 class B notes 'BB-';
* $5,600,000 class C notes 'B'.
FEP Receivables Trust 2001-1
* $44,250,000 class A2-L floating-rate notes 'A';
* $30,375,000 class A3-L floating-rate notes 'BBB';
* $43,800,000 class A notes 'BBB';
* $5,000,000 class B-L floating-rate notes 'BB+';
* $5,000,000 class B notes 'BB+'.
This action is being taken due to the increased uncertainty of
the future fees generated by equity and bond mutual funds after
significant mutual fund net asset value (NAV) declines following
the tragic events of September 11.
Even prior to September 11, performance of these transactions
had been below expectations as a result of earlier market value
declines in mutual fund NAVs. Fitch had downgraded PLT 1999-2
class B and class C on July 25, 2001 to reflect these earlier
declines.
Fitch is undertaking additional analysis and will take
appropriate ratings action, which may include affirming existing
ratings, in the near future.
QUANTUM MANAGEMENT: Lease Disposition Period Extended to Dec. 31
----------------------------------------------------------------
United States Bankruptcy Court Judge Leif M. Clark extends the
period within which Quantum Southwest Medical Management, Inc.,
and Quantum Southwest Medical Associates may assume or reject
non-residential real property leases to the effective date of
the Debtors' confirmation hearing or alternatively, December 31,
2001.
The Debtors assure the Court that they are current in their
payment of all of their non-residential real property leases and
they are conducting a diligent review of the leases to avoid a
premature assumption or rejection.
Quantum Southwest Medical Management, Inc., and its affiliated
organizations manage 18 health centers in and around San
Antonio, Texas. Quantum Southwest Medical Associates, on the
other hand, is a Texas non-profit corporation formed to provide
and arrange for the provision of medical and health care
services to its members.
Quantum Southwest Medical Management, Inc., and Quantum
Southwest Medical Associates filed for chapter 11 protection on
July 18, 2001 in the Western District of Texas Bankruptcy Court.
Michael M. Parker, Esq., at Fulbright & Jaworski, represents the
Debtors in their restructuring effort. Subject to further
extensions, the Debtors exclusive period during which to file a
plan expires on November 15, 2001.
When Quantum Southwest Medical Management, Inc., filed for
protection from its creditors, it listed $9,300,000 in assets
and $13,500,000 in debt. Quantum Southwest Medical Associates
reported $15,400,000 in assets and $27,300,000 in total debts.
RANCH*1 INC: Creditors' Meeting Slated for October 9
----------------------------------------------------
The meeting of Ranch*1, Inc.'s creditors required by Section 341
of the Bankruptcy Code is scheduled for October 9, 2001, at 3:00
PM, at the Office of the United States Trustee, 80 Broad Street,
Second Floor, New York, NY 10004-1408. A representative of the
debtor will be present at the meeting to be questioned under
oath by the trustee and by creditors.
The deadline for creditors to file proofs of claim has yet to be
set by the Court. The company has requested Judge Gonzales to
establish November 15, 2001 as the Bar Date.
Ranch*1, Inc., a restaurant-chain specializing in grilled
skinless chicken breast sandwiches and healthy side dishes,
filed for chapter 11 protection on July 3, 2001, in New York.
Alan J. Brody, Esq., at Buchanan Ingersoll, P.C., represents the
Debtors in their restructuring effort.
When the company filed for protection from its creditors, it
listed $10,000,000 in assets and $14,100,000 in debt.
STANDARD AUTOMOTIVE: Bank Lenders Agree to Forbear Until Oct. 5
---------------------------------------------------------------
Standard Automotive Corporation (AMEX: AJX) announced that the
Company and its bank lenders under the Company's Term Loan and
Revolving Credit Facility have entered into an extension of the
forbearance agreement under the Credit Facility, expiring on
October 5, 2001.
The Company and the bank lenders are currently negotiating a
longer-term forbearance agreement.
Standard Automotive Corporation is a diversified company with
production facilities located throughout the United States,
Canada, and Mexico.
Standard manufactures precision products for the aerospace,
nuclear, industrial and defense markets; it designs and builds
remotely operated systems used in contaminated waste cleanup; it
designs and manufacturers trailer chassis used in transporting
maritime and railroad shipping containers; and it builds a broad
line of specialized dump truck bodies, dump trailers, and
related products.
Through its Providence Group, Standard provides engineering
professional services to both government and commercial
industry.
TEXAS EQUIPMENT: US Trustee Sets Creditors' Meeting for Oct. 25
---------------------------------------------------------------
The United States Trustee for Region 6 has called for a meeting
of Texas Equipment Corporation's Creditors to be held on October
25, 2001 at 4:10 p.m. in Room 310 at Federal Building, 1205
Texas Avenue in Lubbock, Texas 79401.
All creditors are invited, but not required, to attend. This
Official Meeting of Creditors offers the one opportunity in a
bankruptcy proceeding for creditors to question a responsible
office of Texas Equipment Corporation under oath.
United States Bankruptcy Judge Robert L. Jones has recently
approved the Trustee's motion to convert the case from Chapter
11 to Chapter 7.
Texas Equipment Corporation, a company specializes in the
distribution, sale, service and rental of equipment to the
agricultural industry, filed for Chapter 11 protection on July
5, 2001 in Northern District of Texas Bankruptcy Court. Mike
Calfin, Esq., represents the Debtors in their restructuring
effort.
USG CORP: Panel Urges Court to Allow Members to Trade Securities
----------------------------------------------------------------
Michael R. Lastowski, Esq., at Duane Morris & Heckscher LLP,
explains to Judge Newsome that The Official Committee of
Unsecured Creditors of USG Corporation appointed in the Debtors'
chapter 11 cases and certain lenders under the June 30, 2000
Five-Year Credit Agreement to which USG is a party request entry
of an order:
(i) permitting the members of the Committee (any listed
and any future Member, if any) and their affiliates to trade in
the USG Group's Securities upon the establishment of "Ethical
Walls"; and
(ii) permitting the Applicant Financial Institutions and
their Affiliates (Members) and any institution which might
become creditors of the USG Group, but who are not now Members
or Applicant Financial Institutions, to trade in the Debtors'
Securities upon the establishment and implementation of Ethical
Walls and in accordance with the terms and conditions of any
such order.
"Ethical Walls", as used in this instance, refers to procedures
established by an organization to isolate its trading activities
from its activities as a member of an official creditors'
committee. The procedures are to comply with the requirements
for insulating people from certain material nonpublic
information and function without disruption to the management
and operation of the organization.
The term "Financial Institutions" includes The Chase Manhattan
Bank, Bank One, NA Citibank, NA, Bank of America, NA, Toronto
Dominion (Texas), Inc., Sun Trust Bank, The Northern Trust
Company, The Bank of Tokyo, Ltd., Chicago Branch, Barclays Bank
PLC, Deutsche Bank AG, The Industrial Bank of Japan, Limited,
Morgan Guaranty Trust Company of New York, The Sanwa Bank,
Limited, Wachovia Bank, NA, Firstar Bank, NA, and The Fuji Bank
Limited and any other institution that is a "financial
institution" as defined in 31 U.S.C. Sec. 5312 and which avails
itself of the benefits and burdens of this order of this offer
by fining written notice of intent with the Court.
Mr. Lastowski explains that many, if not all, of the Financial
Institutions are themselves or are affiliated with, investment
advisors or managers that provide investment advisory services
to institutional, pension, mutual fund and high net-worth
clients and affiliated funds and accounts. These financial
parties may buy and sell securities and other financial assets
for their own portfolios.
All of them have a duty to maximize financial returns for their
clients or shareholders through the buying and selling of
Securities and other financial assets. By filing this Motion,
the Members and Financial Institutions acknowledge that they
have certain legal responsibilities regarding material nonpublic
information.
Mr. Lastowski continues that if the Members are barred from
securities trading during the pendancy of these cases because
they serve on the Committee and are involved in the
reorganization process, they risk loss of potentially beneficial
investment opportunities for their clients and themselves.
Likewise for the Financial Institutions. If the Members resign,
they risk their client's interests by not being involved in the
reorganization process. Likewise for the Financial Institutions.
To support this line of reasoning, Mr. Lastowski offers that the
bankruptcy court's effort to resolve this issue has resulted in
the allowance of members of official committees to trade in the
securities of the debtor conditioned on the construction of
Ethical Walls. He points Judge Newsome to similar procedures
adopted in Federated Department Stores, Inc.'s chapter 11 cases
before the U.S. Bankruptcy Court for the Southern District of
Ohio.
In the Federated cases, Fidelity Management & Research Company
moved for an order determining that it would not violate its
duties as a committee member by trading in the debtor's
securities if procedures referred to as an "Ethical Wall" or
"Chinese Wall" were implemented to insulate its trading
activities from its committee-related activities. Many
interested parties, including the debtors, responded positively
to this request.
The SEC filed a memorandum in support of Fidelity's motion,
"urging" the court to adopt the SEC's position that service on
an official committee and being engaged in the trading of
securities as part of regular business does not preclude the
ability to serve and trade the debtors' securities at the same
if the proper procedures are in place to prevent the
transmission of nonpublic information to traders.
The SEC also stated there is "no legal impediment to permitting
the service of such entities on official committees."
Judge Aug held in Federated's cases that Fidelity would not
violate its fiduciary duty as a committee member if it traded in
the debtors' securities if it traded with an appropriate Ethical
Wall.
The Federated order also outlined the procedures required to
construct and Ethical Wall:
-- written acknowledgement by personnel performing
committee work that they could receive nonpublic
information and were aware the Ethical Wall procedures
were in effect;
-- a prohibition on sharing of nonpublic committee
information with other employees that are not
responsible for performing and committee related
functions (except in-house legal counsel);
-- creation of separate file space for committee work that
is inaccessible o employees that are not responsible
for performing any committee-related functions;
-- restrictions on committee personnel's access to trading
information; and
-- a compliance review
Mr. Lastowski notes that in In re Harvard Industries, Inc., Case
No. 91-404 and 91-479 (HSB) and The Columbia Gas System, Inc. et
al, Case No. 91-803 (HSB) whose Delaware Bankruptcy Court orders
were essentially the same as the Federated order. In the cases
of Armstrong World Industries, Inc, et al, Case No.96-166 (JJF),
Favorite Brands International Holding Company Corp. Case No.99-
726 (PJW), and Ace-Texas,Inc. et al Case No. 96-166 (PJW), the
Delaware Bankruptcy Court allowed official committee members to
trade in the debtors' securities during the pendancy of the
cases if the committee members created and implemented Ethical
Wall procedures.
If, Mr. Lastowski explains, the relief sought is not granted, it
is likely the largest creditors with the most expertise and
experience will be discouraged from serving on creditors'
committees in other cases. He states that these creditors should
not be forced to choose between serving on a committee and
risking the loss of beneficial investment opportunities for
their clients or foregoing service and possibly compromising
responsibilities by taking a less active roll in the
reorganization.
By denying the motion, Financial Institutions would face similar
difficulties. It is for these reasons, the Members and Financial
Institutions request permission to trade in the Debtors'
securities with the implementation of Ethical Walls. (USG
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
VIASOURCE COMMS: Chief Financial Officer Resigns
------------------------------------------------
Viasource Communications, Inc. (Nasdaq: VVVV), a leading
nationwide broadband technology deployment organization,
announces the resignation of Executive Vice President and Chief
Financial Officer, Doug Betlach, effective immediately.
With the restructuring and reorganization initiatives of company
ongoing, Viasource's President, Colin McWay, announced,
"Effective [Fri]day, Doug Betlach, Executive Vice President and
Chief Financial Officer is resigning his position," said McWay.
"We deeply appreciate Doug's efforts and commitment to building
Viasource during his tenure with the company."
The company has appointed Scott Peterson, Operations Controller
as Interim Chief Financial Officer. "Scott has a thorough
understanding of our financial records as well as an
understanding of what the company needs to manage the day-to-day
business effectively," said McWay. "I look forward to continuing
to work with the entire Viasource team. One of my primary
objectives in my new expanded role for the organization will be
to keep an operations focus in the accounting department. Our
success is determined in the field. My job is to make sure they
have information to manage their business effectively while
making sure that Viasource maintains it's fiduciary
responsibility," said Peterson.
Viasource (http://www.viasource.net)is a leading independent
enabler of advanced broadband and other wired and wireless
communications technologies to residential and commercial
customers in the United States. The Company provides outsourced
installation, fulfillment, maintenance and support services to
leading cable operators, direct broadcast satellite operators
and other broadband Internet access providers, including DSL and
fixed wireless companies.
The Company also provides network integration and installation
services to a variety of other companies. The Company's services
are focused on the "last mile," defined as the segment of
communications that connects the residence or commercial
customer. The Company is the only provider of these services
with a nationwide footprint, currently employing over 2,500
employees around the United States.
The Company has been undertaking restructuring efforts, however,
it will likely be required to raise additional capital to fund
its future operations. Its ability to raise such capital in
amounts and on terms which are satisfactory is uncertain,
especially in light of the current market conditions.
If the Company is unable to raise additional capital or is
required to raise capital on terms and conditions that are less
satisfactory, it could have a material adverse effect on the
Company's financial condition, which could result in additional
operational restructuring and/or a sale or liquidation of
Viasource.
WASH DEPOT: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Lead Debtor: Wash Depot Holdings, Inc.
Sparkling Image
3519 East Main
Richmond, IN
765-966-2022
Debtor affiliates filing separate chapter 11 petitions:
Wash Depot I, Inc.
Wash Depot II, Inc.
Wash Depot III, Inc.
Wash Depot IV, Inc.
Wash Depot V, Inc.
Wash Depot VI, Inc.
Wash Depot VII, Inc.
Wash Depot VIII, Inc.
Wash Depot IX, Inc.
Wash Depot X, Inc.
Wash Depot XI, Inc.
Wash Depot XII, Inc.
Wash Depot XIII, Inc.
Wash Depot XIV, Inc.
Wash Depot XV, Inc.
Wash Depot XVI, Inc.
Wash Depot XVIII, Inc.
Wash Depot XIX, Inc.
Wash Depot XX, Inc.
Wash Depot XXI, Inc.
Wash Depot XXII, Inc.
Wash Depot XXIII, Inc.
Wash Depot Auto Centers, L.P.
Wash Rite, Inc.
Wash Depot N1, Inc.
Wash Depot A, Inc.
Wash Depot Cap I, Inc.
Wash Depot Capital, L.P.
Chapter 11 Petition Date: October 1, 2001
Court: District of Delaware
Bankruptcy Case Nos.: 01-10571 through 01-10577; 01-10579; 01-
10581; 01-10583; 01-10584; 01-10588; 01-
10590; 01-10592; 01-10595; 01-10597; 01-
10602; 01-10607; 01-10609; 01-10612; 01-
10616; 01-10624; 01-10628; 01-10631; 01-
10635; 01-10636; 01-10639; 01-10642; 01-
10645; 01-10648;
Debtors' Counsel: Michael R. Lastowski, Esq.
Duane, Morris & Heckscher LLP
1100 North Market Street
Wilmington, DE 19801
(302) 657-4900
and
Daniel C. Cohn, Esq.
Cohn, Kelakos, Khoury,
Madoff & Whitesell LLP
101 Arch Street
Boston, MA 02110
(617) 951-2505
Estimated Assets: over $100 million
Estimated Liabilities: over $100 million
List of Debtors' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Regency Savings Bank Secured & $20,000,000
David C. Heyton Unsecured Lender
11 West Madison Street
Oak Park, IL 60302
708-445-3262
fax: 708-445-3284
Michael G. Fazio & Fazio Seller Loan $3,105,436
Enterprises, Inc.
Michael G. Fazio
Four Seasons Hotel
200 Boylston Street, Unit 1101
Boston, MA 02116
617-426-3969
fax: 617-426-6057
Bruce Milan Seller Loan $1,187,530
25450 Franklin Park Drive
Franklin, MI 48024
248-855-5124
Simoniz USA Trade Debt $1,130,630
Bill Gorra (Chemicals Supplier)
201 Boston Turnpike
Bolton, CT 06043
860-646-0172
fax: 860-646-0691
Kerry Sprouse Stock Repurchase $1,001,000
4709 Papermill Rd Agreement
Suite 201
Knoxville, TN 37909
865-588-1000
fax: 865-588-1058
Wausau Underwriters Insurance $598,215
Insurance Companies
Russel Dame
100 Liberty Way
Dover, NH 03820-5808
800-320-7582
fax: 603-749-1904
Pennzoil-Quaker State Lube Oil Supplier $341,552
Tony Singer
700 Milam, Rusk Building,
5th Floor
Houston, TX 76102
713-546-6753
fax: 713-546-3847
Amy Williams Employee Sexual $232,000
Harassment Case-
Default Judgment
Barjan Products Trade Debt $231,729
Sonny's Enterprises, Inc. Trade Debt $197,760
Zep Manufacturing Company Trade Debt $144,700
Ernst & Young Tax Preparation $112,800
& Auditors
Aztec Trade Debt $103,683
Mobil Oil Company Oil Supplier $87,900
Superior Auto Extras/ Trade Debt $75,908
Greetings, Gifts, & Extras
David M. Leach & Seller Loan $75,000
Ramona Leach
Grant Thornton, LLP Auditors $57,992
AIG Insurance $55,828
Dusa Trade Debt $54,291
VPSI, Inc. Trade Debt $52,836
WASTE SYSTEMS: Wants Exclusive Period Extended to October 31
------------------------------------------------------------
Waste Systems International, Inc., asks the United States
Bankruptcy Court for the District of Delaware to extend the
exclusive period to file a chapter 11 plan of reorganization to
October 31, 2001 and the exclusive periods to solicit
acceptances for the plan to January 2, 2002.
Victoria Watson Counihan, Esq., at Greenberg Traurig LLP in
Wilmington, Delaware, tells the Court that the additional time
requested will be used to negotiate the reorganization plan in
order to permit the Debtors to pursue and attain the consensual
negotiated plan that chapter 11 is intended to foster.
Waste Systems International, Inc., an integrated non-hazardous
solid waste management company that provides solid waste
collection, recycling, transfer and disposal services to
commercial, industrial and municipal customers in the Northeast
and Mid-Atlantic Unites States, filed for chapter 11 protection
on January 11, 2001. Victoria Watson Counihan, Esq., at
Greenberg Traurig LLP represents the Debtors in their
restructuring effort.
WASTE SYSTEMS: Court Okays Sale of Mass. Assets to BFI for $2.4M
----------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
approves the motion of Waste Systems International, Inc., to
sell substantially all assets of WSI Massachusetts Hauling to
BFI Waste Services for $2,449,000.
The Court also orders that proceeds of the sale are to be paid
to satisfy claims of obligations to Orix Financial Services,
Inc. amounting to $519,680.84 and Associates Commercial
Corporation amounting $42,124.50.
The remainder of the proceeds, the Court directs, shall remain
with the Debtors' counsel pending confirmation of the Debtors'
chapter 11 plan of reorganization.
Waste Systems International, Inc., an integrated non-hazardous
solid waste management company that provides solid waste
collection, recycling, transfer and disposal services to
commercial, industrial and municipal customers in the Northeast
and Mid-Atlantic Unites States, filed for chapter 11 protection
on January 11, 2001. Victoria Watson Counihan, Esq., at
Greenberg Traurig LLP represents the Debtors in their
restructuring effort.
WHEELING-PITTSBURGH: Employees Ratify Labor Contract Extension
--------------------------------------------------------------
Wheeling-Pittsburgh Steel Corporation confirmed that its United
Steelworkers of America-represented employees voted to ratify
the recently-negotiated labor agreement. The pact must now be
approved by the bankruptcy court, which has a hearing scheduled
for Oct. 11.
"The ratification of this contract was a critical step in the
reorganization process," said James G. Bradley, president and
chief executive officer. "It lays the foundation for the future
success of the company and represents the commitment of every
employee to preserve jobs.
"This vote sends a strong message to our customers, our
suppliers and our creditors about the determination that our
employees have to ensure their futures and the future of this
company," Bradley said. "Wheeling-Pittsburgh Steel now is
positioned to complete its reorganization and be a viable
competitor in the domestic steel market."
The company is working to secure Byrd Bill financing as part of
its plan of reorganization. It expects to complete its
reorganization during the first half of 2002.
"I'm proud of our employees. They did what had to be done. Now
it is time for the federal government to complete its Section
201 investigation and take vigorous action against illegal
foreign steel. Comprehensive action against dumping is the only
way to restrict illegal imports when the United States economy
rebounds and steel demand and pricing begin to return to normal
levels."
Wheeling-Pittsburgh Steel is the ninth largest domestic
integrated steel manufacturer. It filed for Chapter 11
Bankruptcy protection on Nov. 16, 2000.
WINSTAR COMMS: Court Okays Arent Fox as Debtors' Special Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Distrgranted Winstar
Communications, Inc. the permission to employ Arent Fox Kintner
Plotkin & Kahn PLLC as their special counsel to advise on
matters related to Winstar New Media Company, Inc. and its
subsidiaries in these Chapter 11 cases.
The professional services that Arent Fox will render to the
Debtors include:
a) representation with respect to the sale of Winstar TV &
Video, Inc., and/or materially all of its material assets as
well as its affiliated company, Winstar Productions LLC;
b) representation with respect to the sale of Winstar Radio
Networks, LLC and/or materially all of its material assets
as well as its affiliated company, Winstar Radio Productions
LLC;
c) representation with respect to the sale of Winstar
Interactive Media Sales, Inc. and substantially all of its
material assets;
d) to provide legal advice with respect to the operations of
the New Media Companies so long as they continue to be
operated by the Debtors;
e) representation with respect to certain assets held by the
Debtors that are related to New Media subsidiary Winstar
Broadcasting Corporation;
f) to assist the Debtors' primary Bankruptcy Counsel in its
preparation of necessary applications, motions, answers,
orders, reports, and other legal papers relating to the New
Media Companies;
g) representation in the prosecution and defense of certain
litigation matters, primarily, but not exclusively relating
to the New Media Companies;
h) to perform all other legal services for the Debtors which
may be necessary and proper. (Winstar Bankruptcy News, Issue
No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900)
* Lazard Launches New Distressed Debt Fund
------------------------------------------
Lazard Alternative Investments today announced the launch of a
new investment strategy, Lazard Distressed Debt. Using this
strategy, Lazard will invest, on behalf of clients, in
distressed debt: the debt obligations of businesses that are, or
are perceived to be, financially troubled. Distressed debt often
involves reorganization proceedings under Chapter 11 of the U.S.
bankruptcy code.
"Distressed debt investments can offer potential for high risk-
adjusted returns, and they have low correlation to the U.S.
equity and fixed income markets," said Ali Wambold, Managing
Director, Lazard Alternative Investments. "Right now, we are
seeing greater investor interest in distressed debt, which has
been a strength of ours as a research capability for the past
decade. As investors, our team focuses mainly on debt in the
senior part of the capital structure, a more conservative form
of distressed debt investing."
Lazard's Approach to Distressed Debt Investing
The strategy will invest in 20-30 different credits and will
have an annual net performance objective of 15%-20%. Lazard
focuses its investment strategy on the more conservative end of
the distressed debt market. Lazard puts a premium on safety of
principal and is willing to forego excess returns if we believe
the risks to principal are excessive.
Co-portfolio managers Michael Weinstock and Andrew Herenstein
have worked together at Lazard analyzing and investing in
distressed debt since 1992, when they both joined Lazard's High
Yield Bond Department to develop a distressed debt research
capability. Mr. Weinstock and Mr. Herenstein were jointly named
Institutional Investor magazine's #1 distressed debt analysts in
1998. The distressed debt team includes Mr. Weinstock and Mr.
Herenstein, three additional research analysts, two traders and
two marketing specialists.
About Lazard Alternative Investments
Currently, Lazard manages alternative strategies in the United
States, Europe and Asia. Lazard's Alternative Investment
business developed as an outgrowth of Lazard's traditional
investment banking and asset management businesses. The skills
developed day-to-day through providing clients with their best
financial advice offered Lazard the opportunity to leverage its
resources for investment outside the traditional sphere. The
goal of Lazard Alternative Investments is to provide global
clients with investment solutions, and to offer enhanced returns
and diversification to traditional equity and fixed income
investments.
About Lazard
Lazard Freres & Co. LLC (Lazard), together with its affiliates,
presently manages over $70 billion for institutional and private
clients globally. Lazard, a New York Limited Liability Company
with roots dating back to 1848, provides a wide variety of
financial advisory and related services to its clients.
*********
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. Yvonne L. Metzler, Bernadette
C. de Roda, Ronald P. Villavelez 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.
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*** End of Transmission ***