/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/020125.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, January 25, 2002, Vol. 6, No. 18 Headlines ACME METALS: Seeks Extension of Exclusive Period to February 11 ALGOMA STEEL: Noteholders & USWA Nominees Assured of Board Seats AMERIGAS PARTNERS: Posts Improved Results in FY 2001 APPLICA INC: S&P Assigns B+ Bank Loan Rating with Stable Outlook BETHLEHEM STEEL: Reports Improved Liquidity Position in Q4 2001 BRILL MEDIA CO.: Fails to Make Interest Payment on Senior Notes BURLINGTON: Wants to Continue & Enter Risk Management Agreements CNC: S&P Hatchets Certs. 1994-1 Ratings after Kmart Downgrades CALICO COMMERCE: Arthur F. Knapp Discloses 6% Equity Stake CHIQUITA BRANDS: Seeks Extension of Removal Period Until March 8 CLASSIC VACATION: Selling Assets to Expedia for $5MM + Debts CLASSIC VACATION: CVGAC's Tender Offer Extended to Feb. 15 COMDISCO INC: Committee Taps Mr. Fortgang as Bankruptcy Counsel COMDISCO INC: M. Scanlan and V. Gallegos Disclose Equity Stakes CRESCENT OPERATING: Terminates Asset Sale Agreement with CEI CRESCENT REAL: S&P Puts Low-B Equity Ratings on Watch Negative CRESCENT REAL ESTATE: Eyes Pre-Pack Bankruptcy to Solve Problems ENA UPSTREAM: Case Summary & 20 Largest Unsecured Creditors ENRON CORP: Trizechahn Seeks Payment of $1.6MM Postpetition Rent ENRON CORPORATION: Kenneth L. Lay Resigns as Chairman and CEO EUROPEAN POWER: Fitch Downgrades $95MM Trust Notes Ratings to D EXODUS COMMS: Bringing-In Richard Ellis as Real Estate Broker FANSTEEL INC: Obtains Court Approval of First Day Motions FOUNTAIN VIEW: Snukal Retires as CEO But Stays as Board Member HEARTLAND TECHNOLOGY: Misses Payments & Considers Debt Workout ICG COMMS: Court Extends Lease Decision Period Until April 10 IT GROUP: Court Allows Debtors to Use Existing Bank Accounts KMART CORP: Fitch Junks Pass-Through Trusts 1995 K-1 & K-2 KMART CORP: Fitch Junks Secured Lease Bonds as Default Looms KMART CORP: Dorel to Continue Shipping After Court Assurance LTV CORP: Terminating Non-Union Retiree Benefits as of Jan. 31 LTV CORPORATION: Steel Debtor Agrees to Sell Warren Coke Plant LAIDLAW INC: Court Okays Dresdner Kleinwort as Investment Banker LOEWS CINEPLEX: Nov. Quarter Operating Revenues Drop to $175MM MARINER POST-ACUTE: Hires Montgomery McCracken as Local Counsel MCWATTERS MINING: Creditors & Shareholders Approve CCAA Plan PAC-WEST: S&P Further Junks Ratings Over Liquidity Concerns PACIFIC GAS: Seeks Okay to Ink Triparty Indenture Trustee Pact PANAMSAT: S&P Assigns BB Rating to $1.25BB Sr. Secured Bank Loan PENNZOIL-QUAKER: Will Release Q4 & Full-Year Results on Feb. 5 PLANVISTA: Agrees to Terms of New Bank Facility & Debt Workout POLAROID CORP: Intends to Continue Current Severance Program PSINET INC: Gets Okay to Sell Back IMSG Shares for $1.7 Million QUALMARK CORP: Fails to Comply with Nasdaq Equity Requirement SKEENA CELLULOSE: NWBC Withdraws $150MM Restructuring Plan Offer SUN HEALTHCARE: Seeks Approval to Hire Ernst & Young as Advisors TELIGENT: Senior Lenders Support Fixed Wireless Successor Firm TELIGENT: Court Fixes Feb. 20 Bar Date for Administrative Claims TERADYNE: S&P Assigns BB- Corp. Credit & Sr. Unsecured Ratings TRI-UNION: S&P Concerned About Uncertainty of Asset Sale Outcome UNITEDGLOBALCOM: Receives Valid Tenders of Notes & Consents U.S. STEEL CORP: S&P Places Low-B Ratings On Watch Negative WHEELING-PITTSBURGH: Wins Nod to Sell Prudential Stock at Market * BOOK REVIEW: George Eastman: Founder of Kodak and the Photography Business ********* ACME METALS: Seeks Extension of Exclusive Period to February 11 --------------------------------------------------------------- Acme Metals, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to further extend their Exclusive Periods. The Debtors wish to enlarge their Exclusive Period within which to propose and file a plan of reorganization through February 11, 2002 and their Exclusive Period within which to solicit acceptances of that Plan through April 15, 2002. The Debtors wish to promote reorganization through negotiation. In this regard, they are asking the Bankruptcy Court to afford them additional time to arrive at a consensual plan. The Debtors assert that the requested extension will provide them with the necessary time to determine whether its creditors are best served by a sale of substantially all of its assets or a recapitalization of its business. Acme Metals filed for chapter 11 bankruptcy protection on September 28, 1998. Brendan Linehan Shannon, Esq. and James L. Patton, Esq. at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring effort. When the company filed for protection from its creditors, it listed assets of $813 million and liabilities of $541 million. ALGOMA STEEL: Noteholders & USWA Nominees Assured of Board Seats ---------------------------------------------------------------- Algoma Steel Inc. (TSE: ALG) announced that the Ontario Superior Court of Justice ordered that the seven nominees of the Noteholder group and the three nominees of the United Steelworkers of America shall become directors of the Company upon implementation of Algoma's Plan of Arrangement. The seven nominees of the Noteholders are: William E. Aziz - Mr. Aziz has been a senior operating executive with several Ontario companies in the service, retail, transportation and technology sectors, specializing in rebuilding situations. David Baird - Mr. Baird is a senior counsel at the Toronto office of Torys LLP, with leading expertise in the restructuring of public companies. Michael E. Cahr - Mr. Cahr is the President and Chief Executive Officer of Ikadega, Inc., an Illinois-based provider of information content storage and data transfer architecture. Benjamin C. Duster - Mr. Duster is a Managing Director and head of the Financial Restructuring Group of Leary, Masson & Associates, based in Atlanta, Georgia. Patrick J. Lavelle - Mr. Lavelle has an extensive background in both business and government, including as Chairman of the Export Development Corporation and Chairman of the Business Development Bank of Canada. James J. Lawson - Mr. Lawson is a partner in the corporate department of the Toronto office of Torys LLP and, prior to joining Torys, was a senior executive in the telecom industry. Robert J. Milbourne - Mr. Milbourne is the Principal at Milbourne & Company, based in Vancouver, and was formerly the Chief Operating Officer and a director of Stelco Inc. The three nominees of the United Steelworkers of America are: John Kallio - Mr. Kallio is a Loader at Algoma's Plate and Strip Finishing and a current director of Algoma Steel. Murray Nott - Mr. Nott is a Senior Product Development Associate at Algoma Steel and a current director of Algoma Steel. Doug Olthuis - Mr. Olthuis is the United Steelworkers of America's Area Co-ordinator for Northwestern Ontario. Algoma Steel expects its Plan of Arrangement to be fully implemented and effective within the next few days. Algoma Steel Inc., based in Sault Ste. Marie, Ontario, is Canada's third largest integrated steel producer. Revenues are derived primarily from the manufacture and sale of rolled steel products, including hot and cold rolled sheet and plate. DebtTraders reports that Algoma Steel Inc.'s 12.375% bonds due 2005 (ALGOMA) currently trade in the low 20s. See http://www.debttraders.com/price.cfm?dt_sec_ticker=ALGOMAfor real-time bond pricing. AMERIGAS PARTNERS: Posts Improved Results in FY 2001 ---------------------------------------------------- AmeriGas Partners, L.P., the largest retail propane distributor in the United States, based on retail sales volume, reported that total revenues for fiscal 2001 (ended September 30, 2001) from retail propane sales increased $238.1 million reflecting (1) a $182.1 million increase as a result of higher average selling prices and (2) a $56.0 million increase as a result of the higher retail volumes sold. Wholesale propane revenues increased $61.9 million reflecting higher average prices and greater sales associated with product cost management activities. Cost of sales increased $207.7 million as a result of higher per unit propane product costs and the greater retail and wholesale volumes sold. Total margin increased $90.6 million due to the impact of higher-than-normal average retail unit margins and, to a lesser extent, the greater retail propane volumes sold. Retail propane unit margins in Fiscal 2001 benefited from gains on derivative hedge instruments and favorably priced supply arrangements. Operating income for fiscal 2001 was $133.8 million, whereas in fiscal 2000 the Company's operating income was $90.2 million. AmeriGas Partners, L.P. is a publicly traded limited partnership formed under Delaware law on November 2, 1994. The Company serves approximately 1.3 million residential, commercial, industrial, agricultural and motor fuel customers from approximately 700 district locations in 46 states. Operations are located primarily in the East Coast, Southeast, Midwest, Mountain Central and West Coast regions of the United States. Business is principally conducted through the Company's subsidiary, AmeriGas Propane, L.P. and its subsidiary, AmeriGas Eagle Propane, L.P. AmeriGas Eagle Propane, L.P. has a less- than-one percent minority limited partner. Common units, which represent limited partner interests, are traded on the New York Stock Exchange under the symbol "APU." AmeriGas Propane, Inc. is the general partner. The General Partner is a wholly owned subsidiary of UGI Corporation, a public company listed on the New York and Philadelphia stock exchanges. Through various subsidiaries, UGI has been in the propane distribution business for over 40 years. As of December 11, 2001, the General Partner and its subsidiary Petrolane have an aggregate 50.7% ownership interest in the Partnership. The General Partner is responsible for managing operations. There are three co-registrants: AmeriGas Finance Corp., formed on March 13, 1995, AmeriGas Eagle Finance Corp., formed on February 22, 2001 and AP Eagle Finance Corp., formed on April 12, 2001. As at September 30, 2001, the company's total current liabilities exceeded its total current assets by about $95 million. APPLICA INC: S&P Assigns B+ Bank Loan Rating with Stable Outlook ---------------------------------------------------------------- Standard & Poor's changed its rating outlook on Applica Inc. to stable from positive. In addition, Standard & Poor's assigned its single-'B'-plus senior secured bank loan rating to the company's $205 million revolving credit facility due December 2005. The bank facility will be used for general corporate purposes. At the same time, Standard & Poor's affirmed its single-'B'-plus corporate credit and senior secured debt ratings, as well as its single-'B'-minus subordinated debt rating. At December 31, 2001, total debt was $226 million. The outlook revision is based on weaker-than-expected sales for the important fourth quarter holiday selling season and the challenging retail environment for home appliances. The ratings reflect Miami Lakes, Florida-based Applica Inc.'s leveraged financial profile, as well as its participation in the small household appliance industry, which is mature. Standard & Poor's attributes a high level of business risk to this industry because of its relatively low margins and intense competition. These factors are partially mitigated by the strength of the Black & Decker brand name and the company's good cost structure. Applica announced that, because of the current recession, sales for the fourth quarter ended December 31, 2001, would be approximately $210 million, about 10% below the similar period in 2000. In addition to a previously announced $15 million fourth quarter after-tax charges for cost reduction and debt refinancing, the company may take an additional charge of about $12 million (after tax) for a product recall and devaluation of the Argentinean peso. Nevertheless, Applica has reduced its inventory by $60 million in 2001, which has helped produce cash flow partially used for the retirement of debt. The company's bank loan is a $205 million senior secured revolving credit facility. The facility is rated single-'B'- plus, the same as the corporate credit rating. The rating is based on preliminary terms and conditions and is subject to review once full documentation is received. Borrowings under the facility are limited to borrowing-base availability in a formula depending on the company's inventory and accounts receivable. The facility is secured by substantially all of the company's domestic assets, which may provide some measure of protection to lenders. However, based on Standard & Poor's simulated default scenario, it is not clear that a distressed enterprise value would be sufficient to cover the entire loan facility. Outlook: Stable Standard & Poor's expects Applica to stem its sales declines and to focus on margin improvement over the intermediate term while maintaining credit protection ratios appropriate for the rating. BETHLEHEM STEEL: Reports Improved Liquidity Position in Q4 2001 --------------------------------------------------------------- Bethlehem Steel reported improved liquidity at December 31, 2001, comprising cash, cash equivalents, and funds available under bank credit arrangements, of $276 million compared with $60 million at September 30, 2001. As previously reported, in conjunction with its Chapter 11 filing, the company obtained a $450 million debtor-in-possession (DIP) financing with General Electric Capital Corporation (GECC). Initial proceeds from the financing were used to repurchase $260 million in accounts receivable that had been sold under a previous credit facility. Also, the $290 million the company had borrowed under its inventory credit facility remains outstanding as secured debt. 2001 Review "2001 was an extremely challenging year for the domestic steel industry and Bethlehem", said Robert 'Steve' Miller, Chairman and CEO of Bethlehem Steel. "[Wednes]day, we reported a loss from operations (excluding net unusual non-cash charges) of $169 million and $494 million for the fourth quarter and year 2001. Looking ahead, however, we believe the domestic steel market will change for the better as the economy rebounds and steel imports are reduced. "There are signs that the U.S. economy is beginning to strengthen. The manufacturing sector appears to have bottomed out in December. Our order entry is improving and we, and others in the industry, have announced price increases for first quarter deliveries. Although auto sales are expected to be sluggish in the first half of the year, we anticipate growing strength in the demand for steel by the middle of the year as the economy continues to improve and customers replenish depleted inventories. "In early March, President Bush is expected to announce his actions to remedy the substantial injury caused to the domestic steel industry by the flood of imported steel. Five of six commissioners of the International Trade Commission recommended tariffs as high as 40 percent to address the injury. We believe the imposition of maximum tariffs is appropriate and necessary to reduce the levels of unfairly traded steel imports into the United States. We also believe that the elimination of inefficient, high cost steel capacity both here and abroad is essential to better balance global steel demand. "Bethlehem is continuing to pursue various strategic alternatives, including possible consolidation opportunities. Additionally, we are working to develop a reorganization plan to preserve production at Bethlehem's low cost, high quality steel assets and jobs for our employees. We expect to have adequate financial resources to sustain operations during the year 2002 while pursuing these opportunities." Bethlehem's fourth quarter of 2001 loss from operations of $169 million (excluding $351 million in non-cash charges discussed below) compares to a loss from operations for the fourth quarter of 2000 of $116 million (excluding a $6 million non-cash charge for closing our slab mill at Burns Harbor). These operating results decreased from a year ago mainly as a result of significantly lower realized prices and shipments. Prices, on a constant mix basis, were down by about 7%, and shipments declined by about 169,000 tons. Additionally, fourth quarter 2001 results include about $27 million in costs related to the unscheduled outage and repair of "D" blast furnace at its Burns Harbor Division. "D" blast furnace is currently producing at scheduled capacity. For the fourth quarter of 2001, Bethlehem reported a net loss of $547 million including unusual non-cash items totaling $351 million. In the fourth quarter, the company recorded impairment losses of about $344 million to write off the goodwill associated with its 1998 acquisition of Lukens Inc., the 110" plate mill at Burns Harbor, and a portion of its Chicago Cold Rolling facility. In addition, the company recorded a $7.5 million charge for employee benefit related costs for the previously announced reduction in its salaried non-represented workforce. Excluding unusual items discussed below, its loss from operations for 2001 was $494 million compared to a loss from operations of $96 million for 2000. This increased loss was primarily due to lower realized prices and lower shipments, partially offset by cost reductions. Prices, on a constant mix basis, declined by about 8% and shipments were lower by about 764,000 tons. Despite a 12% reduction in raw steel production, the company was able to reduce overall cost structure sufficiently that its operating cost per net ton shipped was about the same in 2000 and 2001. For the year 2001, Bethlehem's net loss was $1,950 million including net unusual charges totaling $1,356 million principally from the fourth quarter non-cash charges mentioned above and the $984 million non-cash charge to fully reserve Bethlehem's deferred tax asset recorded in the second quarter. Net unusual gains in 2000 were $21 million ($17 million after- tax) for gains on the sale of assets net of a charge for closing our slab mill at Burns Harbor. Excluding unusual items, Bethlehem's net loss for 2001 was $594 million compared with a loss of $135 million for 2000. Bethlehem's Future "Bethlehem has excellent steel facilities capable of producing high quality, low cost products to serve the requirements of our most demanding customers," said Mr. Miller. "Our goal is to ensure that our competitive facilities remain a key part of the North American steel industry. In order to accomplish that, however, we need a modern, flexible labor agreement with the USWA and a solution to our almost $5 billion retiree pension and healthcare obligations. Chapter 11 provides us with a structured process to achieve those required changes." DebtTraders analysts Daniel Fan and Blythe Berselli advise that Bethlehem Steel Corporation's 10.375% bonds due 2003 was last quoted at a price of 13.0. For real-time bond pricing, see http://www.debttraders.com/price.cfm?dt_sec_ticker=BTHSTL BRILL MEDIA CO.: Fails to Make Interest Payment on Senior Notes --------------------------------------------------------------- Brill Media Company LLC announced that it failed to make a cash interest payment of $6.3 million on its Senior Notes on December 17, 2001. The Company and Mr. Brill are actively exploring alternatives to restructure the capital of the Company. Revenues for the three months ended November 30, 2001 were $10.9 million, a $.9 million or 8% decrease from the prior comparative period. For the current quarter, Stations' revenues represented $4.2 million and Newspapers' revenues represented $6.7 million. Stations' revenues decreased $.4 million, or 10%, from the prior comparative period and the Newspapers' revenues decreased $.5 million, or 7%, from the prior comparative period. Both decreases were due to general economic conditions in the Company's markets, including weaker demand for advertising and the general state of affairs following the terrorist attacks of September 11, 2001. Operating expenses for the three months ended November 30, 2001 were $10.9 million, which remained relatively unchanged from the prior comparative period. As a result of the above, operating income for the three months ended November 30, 2001 was $.1 million, a decrease of $.8 million or 94% from the prior comparative period. Other expense for the three months ended November 30, 2001 was $4.1 million, which remained unchanged from the prior comparative period. Net loss for the three months ended November 30, 2001 was $4.1 million, an increase in loss of $0.9 million or 26% over the prior comparative period. This was primarily due to a reduction in revenue while maintaining adequate operational resources. Revenues for the nine months ended November 30, 2001 were $33.8 million, a $1.8 million, or 5%, decrease from the prior comparative period. For the year to date, Stations' revenues represented $13.0 million and Newspapers' revenues represented $20.8 million. Stations' revenues decreased $.8 million, or 6%, from the prior comparative period and the Newspapers' revenues decreased $1.0 million, or 5%, from the prior comparative period. Both decreases were again due to general economic conditions in the Company's markets, including weaker demand for advertising and the general state of affairs following the terrorist attacksof September 11, 2001. Operating expenses for the nine months ended November 30, 2001 were $32.1 million, which remained relatively unchanged from the prior comparative period. As a result of the above, operating income for the nine months ended November 30, 2001 was $1.7 million, a decrease of $1.9 million or 53% from the prior comparative period. Other expense for the nine months ended November 30, 2001 was $11.9 million, a $.1 million or 1% increase from the prior comparative period. Net loss for the nine months ended November 30, 2001 was $10.4 million, an increase in loss of $2.2 million or 26% over the prior comparative period. This difference is primarily due to a decrease in revenues and interest income reflective of reduced cash levels. The Company's ability to pay interest on the Senior Notes and the Senior Secured Facility when due, and to satisfy its other obligations, depends upon its future operating performance, and its ability to obtain funding from other sources, and will be affected by financial, business, market, technological, competitive and other conditions, developments, pressures, and factors, many of which are beyond the control of the Company. The Company is highly leveraged, and many of its competitors are believed to operate with much less leverage and to have significantly greater operating and financial flexibility and resources. Due to weakened economic conditions, the contraction of the financial markets and the general state of affairs following the terrorist attacks of September 11, 2001, the Company did not have sufficient cash available to make its semi-annual interest payment on the Senior Notes of $6.3 million on December 17, 2001. The Company was notified by the Trustee of the Senior Notes that continued failure to make the interest payment would constitute an event of default under the terms of the Indenture. Following an event of default, the Indenture permits the Trustee or the Holders of 25% in aggregate principal amount of the Senior Notes to declare the entire principal amount of the Senior Notes plus accrued interest, due and payable immediately. In addition, as of January 14, 2002, the Company failed to comply with certain covenants related to earnings coverage contained in the Senior Secured Facility. As a result, the Senior Secured Facility and certain other debt obligations would be in default and may be accelerated under the terms of their respective loan agreements. Brill Media Company, LLC is a diversified media enterprise that acquires, develops, manages and operates radio stations, newspapers and related businesses in middle markets. As of November 30, 2001, the Company owns, operates or manages thirteen radio stations serving four markets located in Pennsylvania, Kentucky/Indiana, Colorado and Minnesota/Wisconsin. The Company's newspaper businesses operate integrated newspaper publishing, printing and print advertising distribution operations, providing total-market print advertising coverage throughout a thirty-six-county area in the central and northern portions of the lower peninsula of Michigan. This operation offers a two-edition daily newspaper, twenty-three weekly publications, two monthly real estate guides, two web offset printing operations for Newspapers' publications and outside customers and three private distribution systems. Mr. Brill founded the business and began its operations in 1981. The Company's overall operations, including its sales and marketing strategy, long-range planning and management support services are managed by Brill Media Company, L.P., a limited partnership indirectly owned by Mr. Brill. BURLINGTON: Wants to Continue & Enter Risk Management Agreements ---------------------------------------------------------------- Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger PA, in Wilmington, Delaware, tells the Court, that Burlington Industries, Inc., managed various risks by entering into a variety of derivative contracts such as commodity (including cotton, wool and other raw materials), foreign exchange and interest derivative contracts, including forward contracts, options, swaps, caps and future contracts -- Risk Management Transactions. Mr. DeFranceschi says the Debtors routinely entered into such contracts under standard master agreements, including the International Swap Dealers Association Master Agreement. According to Mr. DeFranceschi, the Debtors analyzed their present need for such Risk Management Transactions and concluded that the continuation of existing Risk Management Transactions and the entry into new Risk Management Transactions in a manner consistent with the Debtors' pre-petition practices is reasonable and necessary to limit financial risks and volatility -- such as the risk that variations in the price of raw materials, currency exchange rates or interest rates will adversely affect the Debtors. Mr. DeFranceschi contends that the Debtors should be permitted to continue and enter into new Risk Management Transactions in the ordinary course of business, without the need to apply for Court approval. However, Mr. DeFranceschi informs Judge Walsh that several counterparties, with which the Debtors previously engaged for Risk Management Transactions, terminated such contracts on or shortly after the Petition Date. "The Debtors are concerned that past and potential counterparties will not do business with the Debtors without specific authorization for such transactions from this Court," Mr. DeFranceschi explains. Mr. DeFranceschi illustrates the three Primary Risk Management Transactions: (A) Raw Material Contracts As a manufacturer of softgoods for apparel and interior furnishings, the Debtors routinely enter into contracts to purchase raw materials, such as cotton and wool. In order to protect themselves from the volatility in the market for such materials, the Debtors may enter into a variety of different financial derivative contracts, including forward contracts, swaps and option contracts, or a combination of such contracts. The Debtors enter into such contracts pursuant to standard agreements that essentially allow them to "lock in" a specified price for their raw materials. For example, the Debtors routinely enter into forward contracts with respect to cotton and wool. Under such contracts, the Debtors agree to pay a certain amount of a raw goods supplier for materials to be delivered at a specified future date. This type of contract ensures that the Debtors can fix the price for key commodities used in the Debtors' businesses, thus locking in prices regardless of fluctuations in market prices -- and accordingly ensuring cost predictability for such materials and corresponding profit forecasting. (B) FX Facilities The Debtors routinely enter into contracts to buy and sell products in foreign countries. When the Debtors purchase products from foreign vendors, the Debtors sometimes must agree to pay for such goods in the currency of such vendor. In such a situation, the Debtors assume the risk that the U.S. dollar may decline in value, thus reducing the "buying power" of the U.S. dollar and effectively increasing the costs of such products to the Debtors. Because of this risk, the Debtors often may be at a competitive disadvantage in the overseas market. In addition, the Debtors make sales to customers in foreign currencies and as such assume the risk that the U.S. dollar may strengthen in value, thus reducing the "buying power" of the foreign currency and effectively reducing receipts from those sales. To reduce their exposure to fluctuations in foreign currency exchange rates, the Debtors may enter into FX facilities under which the Debtors can fix the amount of U.S. dollars that the Debtors are required to pay or are entitled to receive at a specified future date according to the value at which the U.S. dollar is trading at the time the Debtors enter into a contract to buy or sell products overseas. By entering into the FX facilities, the Debtors will be able to reduce their exposure to fluctuations in foreign currency exchange rates and thereby enter into contracts in the currency of the vendor or customer. Because of these protections against foreign currency rate volatility that a foreign exchange facility provides, companies that conduct business internationally routinely enter into FX facilities. Importantly, the Debtors do not use FX facilities as an investment or profit-making enterprise, but rather seek to enter into such facilities to protect themselves from market fluctuations. Essentially, the FX facilities that the Debtors seek to initiate or continue should be viewed as currency insurance policies, enabling the Debtors to compete without assuming the risks traditionally associated with currency fluctuations for customer/vendor transactions. (C) Interest Rate Swap Agreements In the ordinary course of business, the Debtors enter into interest rate swap agreements to alter the interest rate risk profile of outstanding debt, thus altering the Debtors' exposure to changes in interest rates. In a typical interest rate swap, one counterparty pays a fixed rate while the other assumes a floating interest rate based on the amount of the principal of the underlying debt. The underlying debt, referred to as the "notional amount" of the swap, does not change hands, only the interest payments are exchanged. The Debtors continuously monitor developments in the capital markets and only enter into such swap transactions with established counterparties having investment-grade ratings. Exposure to individual counterparties is controlled, and thus the Debtors consider the risk of counterparty default to be negligible. (Burlington Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900) CNC: S&P Hatchets Certs. 1994-1 Ratings after Kmart Downgrades -------------------------------------------------------------- Standard & Poor's lowered its ratings on five classes of CNC Pass-Through Certificates Series 1994-1. The ratings remain on CreditWatch with negative implications, where they were placed on Jan. 18, 2002. The rating actions are the result of the recent downgrades of K- Mart Corp., (Standard & Poor's 'D' rating) that filed a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code on Jan. 22, 2002. The collateral consists of a pool of credit leases with significant exposure to K-Mart Corp. The ratings of the certificates are highly dependent on the ratings of the underlying credit tenants. The certificates benefit from subordination and a $1.5 million reserve account. There are 58 outstanding loans with an aggregate principal balance of $136.1 million, down from 68 loans with an aggregate outstanding balance of $196.1 million at issuance. The loans are fully amortizing with an average loan balance of $2.3 million and a weighted average coupon of 9.37%. Most of the credit leases are not triple net bondable leases. Significant tenant exposure, expressed as a percentage of aggregate principal balance, includes K-Mart Corp. ('D') at 46%; Wal-Mart (double-'A') at 38%; and Food Lion (triple-'B'-minus) at 11%. Other tenants include Rite Aid (single-'B'); Winn Dixie (triple-'B'-minus); and Walgreens (single-'A'-plus). Two Food Lion and one Walgreens space are vacant, comprising 1.33% of the pool. Standard & Poor's will continue to monitor the transaction closely. Ratings Lowered And Remain On Creditwatch Negative CNC Pass-Through Certificates Series 1994-1 Class Rating To From Credit Enhancement A-1 BB+/Watch Neg A/Watch Neg 20% A-2 BB+/Watch Neg A/Watch Neg 20% A-3 BB+/Watch Neg A/Watch Neg 20% B B/Watch Neg BBB/Watch Neg 13% C CCC/Watch Neg BB/Watch Neg 6% CALICO COMMERCE: Arthur F. Knapp Discloses 6% Equity Stake ---------------------------------------------------------- Arthur F. Knapp beneficially owns 2,120,071 shares of the common stock of Calico Commerce, Inc. representing 6.0% of the outstanding common stock of that Company. Mr. Knapp holds sole voting and dispositive powers. The aggregate amount of funds required to purchase the 2,120,071 shares was approximately $2,617,129, which was paid out of the reporting person's personal funds. The stock was purchased for investment purposes. Calico Commerce, Inc. (OTCBB:CLIC) is a provider of interactive selling software for organizations selling complex products or services. As reported on Dec. 17, 2001, in the Troubled Company Reporter, Calico Commerce may seek protection under Chapter 11 of the U.S. Bankruptcy Code to facilitate the sale of substantially all its assets to PeopleSoft. CHIQUITA BRANDS: Seeks Extension of Removal Period Until March 8 ---------------------------------------------------------------- James H.M. Sprayregen, Esq., at Kirkland & Ellis, tells Judge Aug that Chiquita Brands International, Inc., is party to various prepetition lawsuits. Bankruptcy Rule 9027 gives Chiquita a short time within which to decide whether to transfer any prepetition lawsuits to the Southern District of Ohio for continued litigation and ultimate resolution of the underlying claim. The Plan contemplates that all claims will be resolved according to the Plan's terms. However, there is always a remote possibility that the Plan might not be confirmed. If the Plan were not confirmed for some bizarre reason, the Debtors do not want to throw away their right to make transfer and removal decisions. Against this backdrop, and purely for protective purposes, the Debtors sought and obtained an extension of their time within which to elect to remove any prepetition lawsuit against them to their home court in Cincinnati through the conclusion of the March 8 Confirmation Hearing. (Chiquita Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900) CLASSIC VACATION: Selling Assets to Expedia for $5MM + Debts ------------------------------------------------------------ Classic Vacation Group, Inc. (AMEX: CLV), a value-added provider of customized vacation products, said it has entered into an agreement to sell substantially all of the assets and the liabilities of its Classic Custom Vacations subsidiary to Expedia, Inc. (Nasdaq: EXPE) for $5.0 million in cash and the assumption by Expedia(R) of approximately $47 million of CLV's debt. In connection with the transaction, Three Cities Research, Inc. (TCR), the company's principal note holder, and Thayer Equity Investors III, L.P. (Thayer), the company's principal shareholder, have agreed to provide a payment of $0.26 per share to CLV's public shareholders. The transactions are anticipated to be completed late in the first quarter of 2002. In the agreement, Expedia will assume and then retire Classic Vacation Group's $47 million of debt including accrued interest by issuing shares of Expedia common stock to the note holders. After receiving payment on the debt, TCR and Thayer have agreed to contribute a portion of the proceeds they will receive to the company's public shareholders in the form of a $0.26 per share cash payment without requiring them to tender or otherwise dispose of their shares. TCR and Thayer have agreed to extend their announced tender offer to allow the Expedia transaction to proceed, and have agreed to terminate the tender offer within one business day after consummating the sale of the debt. After the completion of the sale of Classic Custom Vacations, Classic Vacation Group has agreed to liquidate and distribute any remaining assets to CLV shareholders. At this time, the company cannot assure that any proceeds will be available for distribution, and it is possible that the liquidation process could take up to six months or more to complete before any such liquidating distribution to shareholders can be made. Under New York law, the sale of the Classic Custom Vacations assets and the liquidating distribution will require the vote of two-thirds of CLV shareholders at a special meeting of shareholders at a place and time to be announced. However, Thayer and TCR together own greater than two-thirds of the currently outstanding shares of CLV and have entered into agreements with Expedia that they will vote in favor of these transactions. "We have been working hard to come up with an alternative transaction to the $0.15 per share tender offer for the public shareholders," said Debbie Lundquist, Classic Vacation Group chief financial officer. "With the agreement by TCR and Thayer to provide a payment to the public shareholders, this transaction ensures that the public shareholders will receive at least $0.26 per share." "This is a great opportunity for Classic Custom Vacations," said Ron Letterman, Classic Vacation Group president and chief executive officer. "As part of Expedia, Classic will have the resources it needs to continue to build its premier vacation brand. It also gives travel agents and consumers the financial assurance they require during these challenging times. With Expedia's resources we can strengthen our travel agent relationships by providing them with expanded product offerings, as well as online access and tools to increase their sales. Travel agents can trust that Classic remains committed to the travel agency distribution system." After the sale to Expedia, Letterman will remain as president of Classic Custom Vacations, a division of Expedia, and Lundquist will be named chief operating officer of the division. Rosa Buettner, senior vice president-sales, Lois Shore, senior vice president-marketing, Larry Flinders, executive vice president- operations, and Travis Shook, chief information officer, will continue with the division in their present capacities. Classic's offices will remain in San Jose, Calif. Expedia, Inc., operates Expedia.com, an independent, leading online travel service in the United States with localized versions in Europe and Canada. Expedia is ranked as the seventh largest travel agency in the U.S. according to Travel Weekly Magazine. Expedia.com also is available under Travel on the MSN(R)network of Internet services. Expedia, Expedia.com, and the airplane logo are either registered trademarks or trademarks of Expedia, Inc. in the United States, Canada and/or other countries. Microsoft and MSN are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. Classic Custom Vacations is a registered trademark of Classic Custom Vacations, Inc. in the United States. CLASSIC VACATION: CVGAC's Tender Offer Extended to Feb. 15 ----------------------------------------------------------- Three Cities Research, Inc., announced that the pending tender offer by CVG Acquisition Corporation for shares of Classic Vacation Group, Inc. (Amex: CLV) has been extended until 5:00 p.m., New York City time, on Friday, February 15, 2002, in order to permit completion of a purchase by Expedia, Inc., of Classic Vacation Group notes held by two entities principally owned by a Three Cities fund. The tender offer will be withdrawn when the note purchase takes place. CVG Acquisition Corporation is wholly owned by CVG Investment LLC, which in turn is 80% owned by Three Cities Fund III, L.P. and 20% owned by Thayer Equity Investors III, L.P. In its tender offer, CVG Acquisition Corporation offered to purchase all the Classic Vacation Group shares which Three Cities or Thayer did not already own for $0.15 per share. The tender offer, as previously extended, was scheduled to expire at 5:00 p.m., New York City time, on January 25. Classic Vacation Group announced its agreement to sell its principal subsidiary to Expedia, Inc., to be followed by liquidation of Classic Vacation Group. In connection with that transaction, Expedia will acquire Classic Vacation Group notes from CVG Investment LLC and another entity owned by Three Cities Fund III in exchange for Expedia shares with a value equal to the principal and accrued interest with regard to those notes. The agreements contemplate that the Expedia shares will be sold shortly after they are received. When that occurs, Three Cities will pay Classic Vacation Group's public shareholders $0.15 per share, and Thayer will pay the Classic Vacation Group public shareholders $0.11 per share, without requiring the public shareholders to tender or otherwise dispose of their shares. The public shareholders will also receive whatever per share amount is distributed by Classic Vacation Group when it is liquidated. A spokesman for Three Cities Research said, "As part of the transaction, Expedia will purchase Classic Vacation Group debt from entities principally owned by one of our funds for the full principal and accrued interest with regard to that debt, which will total approximately $47 million. When that happens, one of those entities will be withdrawing a $0.15 per share tender offer for Classic Vacation Group shares. In order to be sure the public shareholders of Classic Vacation Group will not be hurt by the withdrawal of that tender offer, when our fund receives payment for the debt, it will pay $0.15 per share to the public shareholders of Classic Vacation Group, without requiring them to tender or otherwise dispose of their shares. "The public shareholders of Classic Vacation Group will also be receiving $0.11 per share from Thayer Equity Investors, III, out of a payment we had agreed to make to Thayer if the tender offer were withdrawn to accommodate another transaction. In addition, they will receive their share of whatever is available for distribution upon liquidation of Classic Vacation Group after it sells Classic Custom Vacations to Expedia. Therefore, the public shareholders will receive substantially more as a result of the Expedia transaction than they would have received if the Three Cities tender offer were completed." At the close of business on January 22, 2002, 1,313,551 shares had been tendered in response to the tender offer. COMDISCO INC: Committee Taps Mr. Fortgang as Bankruptcy Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Comdisco, Inc., and its debtor-affiliates proposes to retain Chaim J. Fortgang as its counsel in these chapter 11 cases, on an hourly basis at a rate of $750 per hour. Committee Chair Randolph Thornton, from Citibank N.A., tells the Court that among the professional services Mr. Fortgang may be called to render are: (a) advisory, strategy and decision-making associated with negotiating the proposed sale transactions in conjunction with other advisors; (b) advising the Committee with respect to a plan of reorganization which may be proposed; (c) advocating the Committee's position in pleadings and in court appearances; (d) representing the Committee with respect to other transactions which may be proposed; (e) assisting in the examination of the Debtors' affairs and review of the Debtors' operations; and (f) attending hearings, and generally advocating positions and performing other professional services which further the interests of the creditors represented by the Committee. Mr. Thornton assures the Court that Mr. Fortgang will work closely with Latham & Watkins -- the Committee's proposed co- counsel -- so as not to duplicate efforts on behalf of the Committee. The Committee intends to reimburse Mr. Fortgang of actual expenses incurred in connection with the case that are not fixed and routine overhead expenses. Among other things, these expenses include: telephone and telecopier toll and other charges, mail and express mail charges, special or hand delivery charges, document processing, photocopying charges, travel charges, expenses for "working meals", computerized research, and transcription costs. Chaim J. Fortgang, Esq., informs Judge Barliant that he does not represent any interest adverse to the Debtors or to their estates in the matters upon which he is to be engaged. "I do not hold any claims against the Debtors and I will not represent any party-in-interest in these Chapter 11 cases except for the Committee," Mr. Fortgang swears. According to Mr. Fortgang, he is a "disinterested person" as the term is defined in Section 101(14) of the United States Bankruptcy Code. (Comdisco Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 609/392-0900) COMDISCO INC: M. Scanlan and V. Gallegos Disclose Equity Stakes --------------------------------------------------------------- Melissa L. Scanlan and Victoria Gallegos each hold trustee positions in the Dorene Pontikes Trust, which in turn holds shares of the common stock of Comdisco, Inc. Ms. Scanlan exercises sole voting and dispositive powers with respect to the following shares: 163,302 shares directly held, 14,443 shares held by the Alexa Scanlan Trust and 9,093 shares held by the Kellen Scanlan Trust. Ms. Scanlan shares voting and dispositive powers with respect to 165,120 shares held by the Pontikes Family Foundation and 11,440,650 shares held by the Dorene Pontikes Trust. Ms. Scanlan has shared dispositive power over 284,000 shares held in a trust in which she has a remainder interest. Ms. Gallegos exercises sole voting and dispositive powers over 112,624 shares held by the Victoria Gallegos 1995 Trust. Ms. Gallegos shares voting and dispositive powers with respect to 165,120 shares held by the Pontikes Family Foundation and 11,440,650 shares held by the Dorene Pontikes Trust. Ms. Gallegos has shared dispositive power over 284,000 shares held in a trust in which she has a remainder interest. Prior to May 8, 2001, the power to vote and direct the disposition of the shares owned by the Dorene Pontikes Trust and the Non-Exempt Marital Trust formed under the will of Kenneth N. Pontikes was held by Nicholas K. Pontikes. Until that time, the Dorene Pontikes Trust was included in a group Schedule 13D and amendments thereto filed with the SEC by Mr. Pontikes. On May 8, 2001, pursuant to a power of appointment, Mr. Pontikes removed all trustees of the two trusts, including himself, and appointed Ms. Scanlan and Ms. Gallegos trustees of the Dorene Pontikes Trust and as two of three trustees of the NEMT. To vote or dispose of securities in the trusts, the trustees must act by majority vote. Ms. Scanlan and Ms. Gallegos may each be deemed beneficial owners of the holdings of the Dorene Pontikes Trust and the NEMT. Mr. Pontikes retains a right to appoint and remove the trustees of these trusts and thus has a right to acquire voting and dispositive power and therefore may also be deemed to beneficially own the shares held by the trusts. The Dorene Pontikes Trust and the NEMT have each sold or otherwise disposed of shares since May 8, 2001. All Shares owned by the NEMT have been sold or distributed, and it is expected that the Dorene Pontikes Trust will make additional sales and distributions. As it presently stands Melissa L. Scanlan beneficially owns an aggregate of 12,076,608 shares of the common stock of Comdisco, Inc. representing 7.95% of the outstanding common stock of that Company. Victoria Gallegos beneficially owns an aggregate 12,002,394 shares, representing 7.90% of the outstanding common stock of Comdisco, Inc. The Dorene Pontikes Trust beneficially owns 11,440,650 shares, representing 7.53% of the outstanding common stock of the Company. CRESCENT OPERATING: Terminates Asset Sale Agreement with CEI ------------------------------------------------------------ Crescent Operating, Inc., (OTCBB:COPI.OB) announced the termination of its agreement with Crescent Real Estate Equities Company (NYSE:CEI)(CEI) for the purchase and sale of assets and stock. The Purchase Agreement had been described as part of the restructuring proposal in Crescent Operating, Inc.'s most recent proxy statement. As part of the restructuring proposal, CEI had committed to make a $10 million capital contribution to the Company's wholly owned subsidiary Crescent Machinery, in the form of preferred stock, which along with capital from a third party investment firm was expected to put Crescent Machinery on solid financial footing. Unfortunately, Crescent Machinery has not escaped the impact from the recessionary economic environment. Particularly post September 11th, the equipment rental and sales business has been affected by the overall reduction in national construction levels. CEI advised the Company that it was unwilling to make the additional investment that it believes would be necessary to provide adequate capitalization of Crescent Machinery and to satisfy lender concerns. Crescent Machinery continues to work with its lenders and the third party investor, but there is no assurance that an acceptable agreement can be reached. Also, as a result of the termination, Crescent Operating will not move forward with the previously announced rights offering. Without the closing of the Purchase Agreement included in the restructuring proposal, it is expected that Crescent Operating will be unable to continue as a going concern or to satisfy the principal conditions to the closing of its previously announced restructuring plan. CEI has advised the Company that it still desires to acquire the Company's Hospitality and Land Development segment assets, and the Company is in discussions with CEI to reach a mutually acceptable resolution, such as a pre-packaged bankruptcy or other restructuring. Crescent Operating is a diversified management company which through various subsidiaries and affiliates, owns, leases or operates a portfolio of assets consisting primarily of three business-class hotels, five luxury resorts and spas, an interest in a temperature controlled logistics operating company, an interest in three residential developments, and an equipment sales and leasing business. CRESCENT REAL: S&P Puts Low-B Equity Ratings on Watch Negative -------------------------------------------------------------- Standard & Poor's placed its ratings on Crescent Real Estate Equities Co., and Crescent Real Estate Equities L.P. on CreditWatch with negative implications. The CreditWatch placement reflects uncertainty following Crescent's announced termination of its agreement to purchase certain assets of Crescent Operating Inc. (COPI), an unrated, publicly traded company formed by Crescent. As a result of this termination, it is uncertain if COPI will be able to continue as a going concern. The CreditWatch placement impacts $600 million in public senior unsecured debt and preferred securities of Crescent. Crescent is expected to acquire certain COPI assets (resort/hotel lease interests in eight of Crescent's resort/hotel properties and the voting stock of Crescent's residential development corporations) either through a prepackaged bankruptcy or through a foreclosure, which should ultimately support Crescent's simplification efforts. Crescent (with undepreciated book value of assets of $4.7 billion at Sept. 30, 2001) recently announced net asset write-downs of $74.8 million for the fourth quarter of 2001 as a result of the agreement termination. In addition to this write-down, Crescent's income statement for the fourth quarter of 2001 will include an $18 million charge attributed to estimated costs related to COPI's assumed bankruptcy. COPI (with assets of $988 million) is currently Crescent's largest lessee, accounting for about 8% of Crescent's total revenues and 22% of funds from operations through its operations of Crescent's hotels/destination resorts/spas, temperature- controlled logistics, and residential development activities. COPI also operates an equipment sales and leasing business that does not have any direct operational or financial ties to Crescent. Crescent continues to evaluate structures regarding the operating interests of AmeriCold, currently held by COPI. Crescent's leverage and coverage measures are expected to be modestly negatively impacted by the COPI filing or foreclosure. In addition, Crescent management's fairly aggressive financial policy regarding share repurchases remains an additional credit concern. The company repurchased over $280 million of common stock during 2000, $77 million during 2001, and has over $400 million remaining on an existing board-authorized repurchase program. While current on-balance-sheet fixed-charge coverage is acceptable for the rating category at 2.4 times, this measure declines to about 2.0x if off-balance-sheet investments are fully consolidated. In addition, debt service and fixed-charge coverage measures are expected to decline over the next year, due to weakened fundamentals of the company's high-end residential and resort/hotel businesses, which have been operated within COPI, and softness in its core Houston and Dallas office markets. The extent of the decline in coverages is also somewhat dependent on the size of the company's ultimate share repurchases and how they are financed. Additionally, the company faces the near-term maturity of some low-coupon debt in September 2002, which is likely to be refinanced at a higher rate, further pressuring coverage measures. Standard & Poor's will meet with Crescent management shortly to assess the credit impact of a COPI bankruptcy or foreclosure upon Crescent. This CreditWatch placement, which implies that the ratings could be lowered or affirmed, is expected to be resolved in the next few months, as COPI works through either a bankruptcy or foreclosure and as the complete business and financial impact to Crescent is clearer. Ratings Placed On Creditwatch With Negative Implications Issue To From Crescent Real Estate Equities Co. Corporate credit rating BB/Watch Neg BB $200 mil. 6 3/4% preferred stock B/Watch Neg B Crescent Real Estate Equities L.P. Corporate credit rating BB/Watch Neg BB $150 mil. 6 5/8% senior unsecured notes due 2002 B+/Watch Neg B+ $250 mil. 7 1/8% senior unsecured notes due 2007 B+/Watch Neg B+ CRESCENT REAL ESTATE: Eyes Pre-Pack Bankruptcy to Solve Problems ---------------------------------------------------------------- Crescent Real Estate Equities Company (NYSE:CEI) said that it has terminated its agreement with Crescent Operating, Inc. (COPI) to purchase certain assets. According to John C. Goff, Chief Executive Officer, "As you know, in June 2001 Crescent entered into an agreement with COPI, the cornerstone of which was Crescent's intended purchase of the resort/hotel lease interests in eight of our resort/hotel properties and the voting stock of our residential development corporations. Included in our original proposal to COPI was our commitment to make a $10 million capital contribution to Crescent Machinery in exchange for convertible preferred stock, which along with capital from a third party investment firm was expected to put its machinery business on solid financial footing. Unfortunately, Crescent Machinery has not escaped the impact from the recessionary economic environment. Particularly post September 11th, the equipment rental and sales business has been affected by the overall reduction in national construction levels. We believe that in order to provide adequate capitalization of Crescent Machinery and satisfy lender concerns, substantial additional capital would have to be contributed. We are unwilling to make this non-core investment. Crescent Machinery continues to work with its lenders and third party investors, but there is no assurance that Crescent Machinery will be able to reach an acceptable agreement with its lenders to allow it to continue operations." "Without the closing of the asset purchase agreement, COPI will not be able to continue as a going concern or satisfy the principal conditions to the closing of its previously announced restructuring plan. Having said that, we are still committed to acquiring these assets and are working with COPI to reach a mutually acceptable resolution such as a pre-packaged bankruptcy but, if necessary, through a foreclosure. What this means, however, is that we will have to record different results than we would have if the contractual asset purchase agreement had been completed as originally planned," Goff added. Goff further stated, "Over the course of the last two years, we have focused on simplifying our strategy, proactively exiting non-core and non-strategic investments and strengthening our balance sheet. Integral to that strategy is the acquisition of certain COPI assets. However, our current plan results in an impact to our 2001 comparative FFO of $73.8 million, which falls into three categories. $41.1 million relates to COPI's liquidity shortfall primarily due to COPI's inability to consummate its intended recapitalization plan. Another $18.0 million relates to estimated costs we expect to incur in connection with the assumed COPI bankruptcy. The remaining $14.7 million relates to our re-valuation of the resort/hotel leases and interests in residential development corporations, as the original values were only appropriate assuming the proposed asset purchase agreement." With respect to the operating interest in AmeriCold that COPI owns, REIT tax rules prohibit Crescent from acquiring or owning the interest directly. Crescent, therefore, is evaluating structures that will permit Crescent's shareholders to obtain the value of that interest through a $15 million investment by Crescent. Crescent expects that it would be a condition to the acquisition that COPI use those proceeds to retire debt. Goff concluded, "While we are disappointed that the original proposal to resolve COPI is no longer viable, we are confident in Crescent's ability to acquire the desired assets in a timely manner. This will enable us to manage our resort/hotel and residential development investments more efficiently and should also lead to more predictable overall earnings in the future. After acquiring the assets, we will have completed the strategic initiatives that we laid out in 1999. Pursuant to our strategic plan, Crescent will continually move toward becoming a company with 80% to 90% of its assets in the office sector. We expect to target office property acquisitions as well as selectively develop office properties in markets where we either currently have achieved or plan to achieve a dominant position. We remain bullish on our stock and since initiation of the common share repurchase program have repurchased over $350 million, or 18.8 million shares. We believe our net asset value, considering the current economic environment, is in the $24 to $26 range." 2001 and 2002 FFO Guidance Crescent expects its 2001 FFO, before the non-recurring charges and other adjustments related to COPI, to be in the range of $2.25 to $2.27 per share. Including the non-recurring charges and other adjustments related to COPI, Crescent expects its 2001 FFO to be in the range of $1.45 to $1.47 per share. Crescent is revising its 2002 FFO guidance from the previously issued range of $2.15 to $2.30 per share to a range of $2.00 to $2.30 per share due to the continued uncertainty in the economy. The $.15 per share reduction in the low end reflects a broader range of both office property same-store NOI growth (now 0% to 4%) and average occupancy (now 90% to 93%) as well as adjusting for flat resort/hotel revenue per available room. The 2002 FFO range excludes the potential positive impact of any future investments or share repurchase activity. Crescent Real Estate Equities Company (NYSE:CEI) is one of the largest publicly held real estate investment trusts in the nation and, through its subsidiaries, owns and manages some of the country's most desirable properties. Its portfolio consists primarily of 75 office buildings totaling over 28 million square feet located in six states and 26 sub-markets primarily in the southwestern U.S., as well as world-renowned luxury resorts and spas and upscale residential developments. ENA UPSTREAM: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: ENA Upstream Company LLC 1400 Smith Street Houston, Texas 77002 Bankruptcy Case No.: 02-10232-ajg Type of Business: The Debtor purchases and holds assets for ENA's purchases at the wellhead and buys, sells, transports and gathers natural gas. Chapter 11 Petition Date: January 18, 2002 Court: Southern District of New York (Manhattan) Judge: Arthur J. Gonzalez Debtor's Counsel: Melanie Gray, Esq. Weil, Gotshal & Manges LLP 700 Louisiana, Suite 1600 Houston, Texas 77002 Telephone: (713) 546-5000 -and- Brian S. Rosen, Esq. Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8000 Total Assets: $79,141,963 Total Debts: $78,130,735 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Linder Oil Company, Trade Debt $3,680,970 A Partnership 1800 Carol Sue Ave., Ste. 6A Gretna, LA 70056-4114 Ph: 504-392-2004 Fax: 504-392-3243 Forest Oil Corporation Trade Debt $2,832,513 1660 Broadway Suite 2200 Denver, CO 80202 Ph: 303-812-1400 Fax: 303-812-1602 Bluebird Energy, Inc. Trade Debt $1,289,168 P. O. Box 14907 Irving, TX 75014-0907 Ph: 972-401-0752 Fax: 972-443-6450 Q-West Energy Company Trade Debt $1,147,821 P. O. Box 970-490 Dallas, TX 75397-0490 Ph: 972-233-8191 Fax: 972-991-0704 KCS Medallion Resources, Trade Debt $653,718 Inc. 7130 S. Lewis Ave. Ste. 700 Tulsa, OK 74136-5489 Ph: 918-488-8283 Fax: 918-488-8182 KCS Energy Service Inc. Trade Debt $602,539 5555 San Felipe Ste. 1200 Houston, TX 77056 Ph: 713-877-8006 St. Mary's Production, LLC Trade Debt $420,892 1717 Woodstead Ct. Ste. 207 The Woodlands, TX 77380 Ph: 281-367-8697 Fax: 281-364-4919 Energy Resource Trade Debt $221,974 Technology, Inc. Riceland Petroleum Trade Debt $200,818 Company Fairways Offshore Trade Debt $187,061 Exploration, Inc. Magnum Hunter Production, Trade Debt $115,808 Inc. ProGas, Inc. Trade Debt $111,026 Ralaco Ventures Trade Debt $105,163 Discovery Gas Trade Debt $94,179 Transmission, LLC Stone Energy Corporation Trade Debt $89,806 ANR Pipeline Company Trade Debt $81,179 EXCO Resources, Inc. Trade Debt $71,515 Louis Dreyfus Natural Trade Debt $66,403 Gas Corp. W&T Offshore, Inc. Trade Debt $60,471 KCS Resources, Inc. Trade Debt $36,801 ENRON CORP: Trizechahn Seeks Payment of $1.6MM Postpetition Rent ---------------------------------------------------------------- TrizecHahn Office Properties, Inc., and Enron Corporation are parties to four leases of non-residential real property in Houston, Texas: (a) Three Allen Center, (b) Two Allen Center, (c) Continental Center I (600 Jefferson Street), and (d) 500 Jefferson Street. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman, in New York, New York, tells Judge Gonzalez that the Debtors have neither assumed nor rejected the Leases. Mr. Indyke further informs the Court that to date, the Debtors have not paid the rent and other amounts reserved under the Leases for the post-petition period from December 2, 2001 through December 31, 2001, amounting to $1,651,657. According to Mr. Indyke, the Debtors continue to occupy the Leased Premises, or retain the right to attempt to assume and assign the Leases during its chapter 11 case. "In short, the Debtors are availing of current services and prospects for economic gain without making current payment," Mr. Indyke notes. Mr. Indyke argues that TrizecHahn is entitled to these post- petition amounts owed under the Leases: Three Allen Center $1,111,894 Two Allen Center 331,891 600 Jefferson 122,632 500 Jefferson 85,241 ---------- Total $1,651,657 In addition, Mr. Indyke explains that the Leases provide for interest charges on late rent payments from the date such payments are due until paid. The Leases further entitles TrizecHahn to recover from the Debtors reasonable attorneys' fees and expenses incurred in enforcing rent provisions of the Leases, Mr. Indyke adds. In the event the Debtors rejects the Leases, Mr. Indyke argues that such rejection should deemed effective only upon the date the Debtors actually vacate the Leased premises and surrenders possession of those properties to TrizecHahn. Through the time of its surrender, TrizecHahn asks Judge Gonzalez to require the Debtors to timely pay all post-petition rent and other amounts arising and due under the Leases including administrative expense for all such amounts. Accordingly, TrizecHahn also asks the Court to compel the Debtors to immediately pay all post-petition amounts including an administrative expense for all such amounts. (Enron Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392-0900) ENRON CORPORATION: Kenneth L. Lay Resigns as Chairman and CEO ------------------------------------------------------------- Enron (OTC: ENRNQ) announced that Kenneth L. Lay has resigned as Chairman of the Board and Chief Executive Officer of Enron Corp. Mr. Lay, who will also retire as an Enron employee, will remain on the company's Board of Directors. The Board, in cooperation with the Creditors' Committee in Enron's bankruptcy, is in the process of selecting a restructuring specialist to join the company who will assist in Enron's efforts to emerge from bankruptcy and, on an interim basis, serve as acting chief executive officer. "This was a decision the Board and I reached in cooperation with our Creditors' Committee," said Mr. Lay. "I want to see Enron survive, and for that to happen we need someone at the helm who can focus 100 percent of his efforts on reorganizing the company and preserving value for our creditors and hard-working employees. Unfortunately, with the multiple inquiries and investigations that currently require much of my time, it is becoming increasingly difficult to concentrate fully on what is most important to Enron's stakeholders." The Board intends to promptly focus on the selection of a new chairman. Enron markets electricity and natural gas, delivers energy and other physical commodities, and provides financial and risk management services to customers around the world. Enron's Internet address is http://www.enron.com DebtTraders reports that Enron Corp.'s 7.875% bonds due 2003 (ENRON1) are trading between 16 and 18. See http://www.debttraders.com/price.cfm?dt_sec_ticker=ENRON1 EUROPEAN POWER: Fitch Downgrades $95MM Trust Notes Ratings to D --------------------------------------------------------------- Fitch, the international rating agency, downgraded the Secured rating of the US$95 million Trust Notes issued by European Power Limited Company (EPLC) to 'D' from 'CC', and removed the rating from Rating Watch Negative. EPLC was effectively a risk transfer vehicle for Enron Corp (ENE), and the only source of funds for debt service and equity distributions under the terms of the transaction were payments received from ENE, now rated 'D', under the swap agreement. EPLC has no security over or recourse to the cash flows of the individual projects (in Italy, Poland and Turkey) whose performance indirectly affected payment on the notes. The rating of the notes has therefore been lowered to reflect the bankruptcy of the economic obligor, ENE and the absence of off- setting collateral. EXODUS COMMS: Bringing-In Richard Ellis as Real Estate Broker ------------------------------------------------------------- Exodus Communications, Inc., and its debtor-affiliates ask for permission to employ and retain CB Richard Ellis, Inc. as their real estate broker, nunc pro tunc to October 23, 2001. Adam W. Wegner, the Debtors Adviser for Corporate and Legal Affairs, relates that on October 23, 2001, the Debtors entered into an Exclusive Listing Agreement effective until October 22, 2002, with CB Richard Ellis, an international real estate broker with nearly 10,000 employees in 250 offices around the world. Pursuant to the Agreement, the Debtors engaged CB Richard Ellis as the exclusive agent to dispose of the Debtors' interest in: A. 31,000 square feet of shell space located in an IDC leased by the Debtors at 300 Boulevard East, Weehawken, New Jersey; and B. the 204,517 square foot IDC located at Two Gatehall Drive, Parsippany, New Jersey. Mr. Wegner contends that these Facilities are not necessary for the Debtors' ongoing business operations and therefore represent an unnecessary financial drain on the resources of the chapter 11 estates. Due to significant excess capacity in the IDC market, the Debtors believe that the space at these facilities is no longer necessary or important to their ongoing operations or plan of reorganization. David Schenkel, Managing Director of CB Richard Ellis Inc., tells the Court that pursuant to the Agreement, the Firm has agreed to use reasonable commercial efforts to sublease or assign the Facilities. In particular, the Firm has and will continue to provide the following services to the Debtors: A. on-site inspection and evaluation; B. market research reports; C. comprehensive financial analysis; preparation and distribution of marketing materials and promotional literature; C. marketing and promotion of the Facilities in accordance with the standard methods and procedures customarily employed by brokerage firms in connection with the marketing of similar space; D. solicitation of potential qualified tenants; E. arranging for and performing personal tours of the Facilities for prospective tenants; and F. performing such other services as are reasonably requested by the Debtors in furthering the marketing of the Facilities for sublease or assignment. According to Mr. Schenkel, in connection with the sublease or assignment of the Facilities, the Firm has agreed to accept fees on a commission basis. In particular, the Firm has agreed to a multi-tiered compensation arrangement and will earn a commission of 4% of the aggregate value of the total sublease or assignment obligation. In the event a cooperating broker is used, the Firm shall earn 1.5% of the aggregate value of total sublease or assignment obligation not to exceed $1,000,000. In addition, the cooperating broker shall earn 5% of the aggregate value of total sublease or assignment obligation not to exceed $2,500,000. The Firm has agreed that the commission will be earned upon the Closing, as defined in the Agreement, of the sublease or assignment. Any commission earned by the Firm pursuant to the terms of the Agreement will be paid as follows: A. One half of the commission shall be due and payable upon execution of the sublease, assignment and/or termination agreement by all parties, receipt of consent from Master Landlord and Debtors receipt of any security deposit and/or prepaid rent. B. The balance of the commission shall be due and payable three months thereafter. If the proposed tenant's obligation to pay rent phases in over time, Mr. Schenkel states that the Debtors' obligation to pay the second half of the commission shall be prorated, and paid out when the tenant starts to pay rent on each portion of the Facilities. In the event the proposed tenant abandons the Facilities prior to 100% occupancy, the Firm shall not be entitled to receive its remaining commission. The Debtors believe that the fees of the Firm are fair and reasonable in light of customary industry practice, market rates both in and out of chapter 11 proceedings and the scope of work to be performed pursuant to its retention. Mr. Schenkel assures the Court that insofar as he has been able to ascertain, the Firm has no connection with the Debtors, their creditors, or any other party in interest, or their respective attorneys or accountants, except as follows: A. The Firm is an international real estate services company with 10,000 employees in nearly 250 offices in 44 countries. The Firm's clients include many institutions and commercial corporations, some of which may be creditors or otherwise involved in these chapter 11 proceedings. As a result, the Firm has, had or may in the future have business relationships with one or more of the entities involved in this proceeding, and may in the future represent entities, which are claimants herein in matters totally unrelated to these pending Chapter 11 Cases. For example, a review of the notice list and other lists provided by Debtors' counsel identifies numerous companies with whom the Firm has conducted business in the past and is conducting business presently, including, for example: Goldman Sachs International; Morgan Stanley Dean Witter; Oppenheimer Funds; The TCW Group; Latham & Watkins; Morrison & Foerester; Orrick, Herrington & Sutcliffe; Pillsbury Winthrop; AT&T; Oracle Corporation; Turner Construction; Cabot Industrial Properties; Cisco Systems; Sun Microsystems; and Skadden Arps Slate Meagher & Flom. None of the Firm's services to those or any other entities, to my knowledge, have any relationship to the Debtors or the Chapter 11 Cases. B. An affiliate of Debtors, Exodus Internet Limited in the United Kingdom (a company not in bankruptcy) has entered into a European Real Estate Consultancy Agreement with CB Hillier Parker, an affiliate of CBRE in the United Kingdom. C. The Firm and Exodus Communications, Inc. are co-defendants in a lawsuit pending in the United States District Court for the District of New Jersey captioned Team Resources, Inc. v. Exodus Communications, Inc. et al., Case Number 00-CV-4754 (AJL). The Firm and the Debtors have not asserted claims against each other in this proceeding. (Exodus Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 609/392-0900) FANSTEEL INC: Obtains Court Approval of First Day Motions --------------------------------------------------------- Fansteel Inc., (OTC Bulletin Board: FNST) announced that its Chapter 11 Case and those of its U.S. subsidiary debtors in possession, each of which were commenced on January 15, 2002, will now be administered in the United States District Court for the District Of Delaware, by Judge Joseph Farnan. Pursuant to court orders entered on January 17 and 22, the Company and its affiliated Debtors' have obtained approvals for a variety of "First Day Motions", including approval of interim DIP Financing, of its cash management systems, of payments for employee wages and benefits, and of payments to critical vendors. As previously announced, Fansteel has entered into an agreement with the CIT Group/Commercial Services Inc., whereby CITCS has agreed to purchase receivables of the Company for a purchase price of up to $10 million. The agreement with CITCS is subject to bankruptcy court approval and the results of a public auction to be held in Delaware at 10:00 A.M. on February 27, 2002. A hearing to approve "bidding procedures' is scheduled to commence at 12:30 P.M. on February 14, 2002. Also as previously announced, the Company has also entered into an agreement with HBD Industries to provide interim debtor in- possession financing of up to $3 million, which would be repaid from the proceeds of the sale of receivables to CITCS or the winning bidder at the auction. HBD Industries is controlled by certain members of Fansteel's board of directors, E.P. Evans, R.S. Evans and T.M. Evans, Jr., who collectively also own approximately 46.56% of Fansteel's outstanding common stock. Upon court approval, which is expected shortly, the proceeds of the DIP Financing will be available to supplement the Company's cash flow. Management is continuing its consideration of the sale of one or more of its businesses and additional long-term debtor in possession financing as methods to obtain additional funding. However, there can be no assurance that any asset sales (which will require 20 days notice and an auction in bankruptcy court) or further debtor in possession financing will occur. Fansteel and its subsidiaries continue to operate their businesses in the U.S. and abroad. Fansteel's non-U.S. subsidiaries, including those in Mexico and the Caribbean, are not part of the filing. Fansteel intends to continue to manufacture, market and distribute its core products and to provide customer service and support for these products. In accordance with applicable law and court orders, pre-petition claims against Fansteel and its U.S. subsidiaries will be frozen pending court authorization of payment or consummation of a plan of reorganization. FOUNTAIN VIEW: Snukal Retires as CEO But Stays as Board Member -------------------------------------------------------------- Fountain View, Inc., a leading operator of 49 long-term care facilities with approximately 5,000 patients and 6,000 employees in California and Texas, announced the voluntary retirement of Robert Snukal as Chief Executive Officer after years of building the Company into a leader in its industry. "We thank Bob for all his dedication, achievement and hard work and wish him the best in the future," said Fountain View's Chief Restructuring Officer, Dennis Simon of Crossroads LLC. Mr. Snukal, whose retirement is effective immediately, remains a major shareholder, will continue to serve on the Board of Directors and will be a consultant to the Company. "This change will permit me to attend to my health and to spend more time with my family, will relieve me of administrative matters while allowing me to focus on initiatives vital to Fountain View's long-term success in my new role as a consultant to the firm," Mr. Snukal said. Fountain View said that it has begun a search for a new CEO. William Scott continues as the Company's Chairman. The Company also announced the hiring of Jose Lynch for the new position of President. Initially, he will focus on the oversight of all the Company's Texas operations. Mr. Lynch currently is senior vice president of long-term care operations in California for Mariner Health Network, and his previous operational experience includes roles at Country Villa, a Los Angeles company with 19 long-term care facilities, and at Beverly Enterprises, the Arkansas-based operator of 783 skilled nursing facilities, assisted living centers, home care and hospice agencies, and outpatient therapy clinics throughout the United States. "We are fortunate to have Jose joining our team," said Mr. Simon. "As Jose works together with our excellent existing team, we expect continued substantial achievements in our operations in the future." "Fountain View is a leader in this industry, and I am excited about the potential to help take it to even greater heights," said Mr. Lynch. "I look forward to working with and being a part of such a highly respected industry team." Last October, Fountain View filed for Chapter 11 protection under the U.S. Bankruptcy Code, citing its inability to resolve a litigation that resulted in a lien being placed on its bank accounts. The Chapter 11 filing was necessary to ensure continuation of patient care, the Company said. "While we have made significant achievements in the past three months and our latest quarterly profitability has risen significantly and is encouraging, much still remains to be done," Mr. Simon said. Fountain View is a leading operator of long-term care facilities and a leading provider of a full continuum of post-acute care services, with a strategic emphasis on sub-acute specialty medical care. The Company operates a network of facilities in California and Texas, including 43 skilled nursing and six assisted living facilities. In addition to long-term care, the Company provides a variety of high-quality ancillary services such as physical, occupational and speech therapy and pharmacy services. HEARTLAND TECHNOLOGY: Misses Payments & Considers Debt Workout -------------------------------------------------------------- Heartland Technology (Amex: HTI) said that it did not make the interest and principal payments due on December 31, 2001 in respect of a $550,000 promissory note maturing on that date. Pursuant to a subordination agreement among the holder of that note, the company and certain other creditors of the company, the company has 60 days from December 31, 2001 to make the payments under this note. The failure to cure the payment default before the expiration of the 60 day period would permit the holders of other notes of the company aggregating $9,650,000 in principal amount to declare their respective notes to be immediately due and payable. In addition, the company said that it did not make payments of interest and principal on maturity of six of its 13% Subordinated Notes maturing between December 22, 2001 and January 14, 2002 and aggregating $1,725,000 in principal, and to make payments of interest due December 31, 2001 on three other 13% Subordinated Notes maturing in February, March and October of this year having an aggregate principal amount of $650,000. Under the terms of 13% notes, if the company does not make any payment of overdue interest within five days after written demand is made by the holder or does not make a payment of principal when due, then the holder may declare the entire balance of the notes immediately due and payable. At this time, no written demand for payment has been received from the holders of these notes by the company. The company also disclosed that it has received written demand for payment of approximately $1,201,273 in interest and principal under a guaranty made by the company of a promissory note owing by one of its indirect subsidiaries, HTI Z Corp. (formerly Zecal Corp.), to Zecal, Inc. in connection with the purchase of the assets of Zecal, Inc. in April, 1998. The company stated that it is considering its options for restructuring its outstanding indebtedness, but could give no assurances that it will reach agreement with its creditors. This discussion of the effects of the payment defaults and the rights of the holders and other creditors of the company are qualified in their entirety by reference to the full text of the promissory notes and other agreements referred to above. Copies of forms of the promissory notes and other agreements have previously been filed by the company as exhibits to its periodic securities filings with the Securities Exchange Commission and may be viewed free of charge by interested parties at http://www.sec.gov ICG COMMS: Court Extends Lease Decision Period Until April 10 ------------------------------------------------------------- ICG Communications, Inc. and its subsidiaries and affiliated Debtors, represented by Timothy R. Pohl, Esq., at Skadden, Arps, Slate, Meagher & Flom, ask Judge Walsh to further extend the time within which the Debtors may assume or reject their unexpired leases of nonresidential real property until the earlier of (a) ninety days through and including until April 10, 2002, and (b) the effective date of a plan of reorganization for the Debtors, subject to the rights of each lessor under such leases to move the Court to shorten the Extension Period and specify a period of time in which the Debtors must determine whether to assume or reject a particular unexpired lease. For purposes of this Motion, the Debtors announce that the term "unexpired Leases" includes any agreement entered into in connection with or related to the leases, to the extent that such ancillary agreement constitutes lease of non-residential real property within the meaning of section 365 of the Bankruptcy Code. This Motion is not an admission by the Debtors that any document denominated a "lease" constitutes a lease of non-residential real property within the meaning of section 365 of the Bankruptcy Code. In addition to leases of nonresidential property, the Debtors are party to thousands of non-exclusive right of entry agreements, indefeasible right to use agreements, and collocation agreements, which grant the Debtors access to physical property owned by third parties for purposes of installing, maintaining and repairing their telecommunications cable and associated equipment or the right to utilize property nominally owned by a third party. Out of an abundance of caution, and to ensure that the extension of time requested in this Motion applies to all such Use Agreements, if any such Use Agreement is ultimately determined by this Court to be a lease of non-residential real property within the meaning of section 365 of the Bankruptcy Code, the Debtors include the Use Agreements in the scope of this Motion. As of the date of this Motion, the Debtors are lessees with respect to over 900 unexpired leases of nonresidential real property. Most, if not all, of the Unexpired Leases are for equipment facilities, telecommunications switch sites, warehouses and offices at which the Debtors operate their businesses. The Unexpired Leases and the premises covered thereby thus are integral to the Debtors' continued operations as they proceed toward a successful reorganization. Since the Petition Date, the Debtors have taken a number of steps to stabilize their businesses and lay the foundation for a successful reorganization. The Debtors' management and advisors have been aggressively pursuing strategic alternatives that may benefit the creditors of these entities, and have been creating a long-term business plan upon which a reorganization plan will ultimately be premised. The Debtors have also moved expeditiously to reject numerous executory contracts and unexpired leases to date. The Debtors' ultimate decision whether to reject, assume, or assume and assign particular Unexpired Leases, as well as the timing of such rejection, assumption, or assumption and assignment, depends in large part on the final structure of the Debtors pursuant to the plan of reorganization that is currently being negotiated with the Creditors' Committee and drafted by the Debtors, and the completion of the analysis of each individual lease. This process is well underway, but is not yet complete; the Debtors expect to file a reorganization plan in the very near future. The Debtors submit that it is prudent and appropriate to decide whether each of the Unexpired Leases that have not been assumed or rejected to date pursuant to their reorganization plan. Section 365(d)(4) of the Bankruptcy Code provides for the establishment of a deadline for the assumption or rejection of unexpired nonresidential leases, and permits an extension of the deadline for "cause". The term "cause" is not defined in the Bankruptcy Code. In determining whether cause exists for an extension of the assumption or rejection time period, courts rely on several factors, including the following: a. Whether the leases are primary assets and the decision to assume or reject such leases would be central to a plan of reorganization; b. Whether the debtor has had sufficient time to analyze its financial situation and the potential value of its assets in terms of its reorganization strategy; and c. Whether the lessor continues to receive postpetition rental payments. These three factors are amply satisfied in these cases. First, the premises governed by the unexpired leases are numerous and contain equipment facilities, telecommunications switch sites, warehouses and offices that are essential to the operation and ultimate reorganization of the Debtors' businesses. Second, the Debtors are not in a position to assume or reject each of the unexpired leases because the Debtors have not completed negotiating and drafting their plan of reorganization. Third, the Debtors generally are current on their postpetition rental obligations under the unexpired leases and have the financial wherewithal to remain so. Accordingly, ample "cause" exists to grant the requested extension period. The requested extension will not prejudice the lessors of the properties subject to the unexpired leases because: a. the Debtors are currently making required payments of monthly rent attributable to the period following the date of the Debtors' chapter 11 filing; b. the Debtors have the financial ability and intend to timely perform all of their obligations under the Unexpired Leases as required by the Bankruptcy Code; and c. in all instances, the Debtors propose to give individual lessors the express right to ask Judge Walsh to fix an earlier date by which the Debtors must assume or reject an unexpired lease, in accordance with the Bankruptcy Code, without shifting the burden of proof to the lessor. The Debtors assure Judge Walsh that courts overseeing large chapter 11 cases routinely have granted more than one extension of the assumption or rejection time period. Judge Walsh, reviewing this Motion, agrees with the Debtors' assessment of the facts and this case and grants the requested extension. (ICG Communications Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 609/392-0900) IT GROUP: Court Allows Debtors to Use Existing Bank Accounts ------------------------------------------------------------ The IT Group, Inc., and its debtor-affiliates request that all banks at which the Bank Accounts are maintained be authorized and directed to continue to administer the Bank Accounts as such accounts were maintained pre-petition, without interruption and in the usual and ordinary course, and to pay any and all checks, drafts, wires or ACH transfers issued on the Bank Accounts on account of any claims arising on or after the Petition Date so long as sufficient funds are in said Bank Accounts. Harry J. Soose, the Debtors' Senior Vice President, Chief Financial Officer and Principal Financial Officer, relates that prior to the Petition Date, the Debtors maintained, more than 250 domestic bank accounts located in various states through which IT Group managed cash receipts and disbursements for the Debtors' entire corporate enterprise. Additionally, certain Debtors and certain non-debtor affiliates of the Debtors have accounts in banks in twelve foreign countries. Mr. Soose submits that the Debtors routinely deposit, withdraw and otherwise transfer funds to, from and among the Bank Accounts by various methods, including check, wire transfer, automated clearing house (ACH) transfer and electronic funds transfer. The Debtors complete thousands of transactions per month through the Bank Accounts. The Debtors believe that all of the Domestic Bank Accounts, whether located within or outside the District of Delaware, are held at financially-stable banking institutions with FDIC or FSLIC insurance, or other appropriate deposit protection insurance. Mr. Soose believes that under the circumstances of the cases, it would be appropriate for this court to grant a waiver of the United States Trustee's requirement that the Bank Accounts be closed and that new post-petition bank accounts be opened. If enforced in these cases, such requirements would cause substantial disruption in the Debtors' business, thereby impairing their efforts to reorganize and pursue other alternatives to maximize the value of their estates. Therefore, in order to avoid delays in payments to administrative creditors, to ensure as smooth a transition into chapter 11 as possible with minimal disruption and to aid the Debtors and all of the Non-Debtor Affiliates in their collective efforts to successfully and rapidly complete these cases, Mr. Soose deems it important that the Debtors be permitted to continue to maintain their existing Bank Accounts and, if necessary, open new accounts. Gary A. Rubin, Esq., at Skadden Arps Slate Meagher & Flom LLP in Wilmington, Delaware, assures the Court that the Debtors represent that if the relief requested in this Motion is granted, they will not pay, and each of the banks at which the Bank Accounts are maintained will be directed not to pay, any debts incurred before the Petition Date other than as authorized by this Court. The Debtors continue to work closely with each of the banks that maintains Bank Accounts against which checks are drawn in order to ensure that appropriate procedures are in place so that checks issued prior to the Petition Date, but presented after the Petition Date, will not be honored absent approval from this Court. "Motion granted," Judge Walrath rules. (IT Group Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392- 0900) KMART CORP: Fitch Junks Pass-Through Trusts 1995 K-1 & K-2 ---------------------------------------------------------- Kmart Corporation Pass-Through Trusts, $65.3 million series 1995 K-1 and $82 million series 1995 K-2 are downgraded to 'CC' from 'CCC' by Fitch. In conjunction with the downgrade, both classes of certificates will remain on Rating Watch Negative. The rating action follows Fitch's review of the transaction in light of the bankruptcy filing of Kmart Corporation (Kmart). The 'CC' rating reflects Fitch's opinion that default of some kind seems probable. The certificates are currently collateralized by an assignment of rents on 16 properties guaranteed by absolute net leases to Kmart, in which Kmart is obligated to pay rental payments with no setoff, abatement or reduction. One of the properties is vacant and no longer operating as Kmart. Fitch downgraded its corporate ratings of Kmart to 'D' from 'CCC' after the company announced its plan to reorganize under Chapter 11 bankruptcy protection. The certificates will be monitored closely as Kmart exercises its option to affirm or reject its lease obligations in bankruptcy court on the 16 properties in this pool. DebtTraders reports that KMart Corp.'s 8.375% bonds due 2004 (KMART5) are trading between 45 and 48. See http://www.debttraders.com/price.cfm?dt_sec_ticker=KMART5for real-time bond pricing. KMART CORP: Fitch Junks Secured Lease Bonds as Default Looms ------------------------------------------------------------ Kmart Funding Corporation's secured lease bonds $96.6 million series F and $20.9 million series G are downgraded to 'CC' from CCC' by Fitch. Series A, B, C, D and E have previously been paid in full. The series F and series G certificates will also remain on Rating Watch Negative. The rating downgrades follow Fitch's review of this transaction in light of the bankruptcy filing of Kmart Corporation. The 'CC' rating reflects Fitch's opinion that default of some kind seems probable. The certificates are currently collateralized by an assignment of rents on 24 properties guaranteed by absolute net leases to Kmart, in which Kmart is obligated to pay rental payments with no setoff, abatement or reduction. The properties originally consisted of 19 Kmart stores, four former Builders Square stores and one apparel warehouse location. Fitch downgraded its corporate ratings of Kmart to 'D' from 'CCC' as it announced that its plan to reorganize under Chapter 11 bankruptcy protection. The certificates will be monitored closely as Kmart exercises its option to accept or reject its lease obligations in bankruptcy court on the 24 properties in this pool. KMART CORP: Dorel to Continue Shipping After Court Assurance ------------------------------------------------------------ Dorel Industries Inc. (TSE: DII.A, DII.B; NASDAQ: DIIBF) provided details on its exposure to Kmart in light of the retailer's announcement that the retail giant had filed for Chapter 11 bankruptcy protection. Dorel expects that it will incur an additional expense of no more than $0.05 per share related to its outstanding receivables from Kmart. This expense will be booked in the Company's December 31, 2001 results, to be released in February. The Company also confirmed that despite this event, it is maintaining its recently released earnings per share guidance for the 2002 fiscal year of $1.90 to $2.00 per share. The Company stated that its current accounts receivable exposure was limited due to the effective use of credit insurance and the close monitoring of the Kmart account. Going forward, Dorel intends to work with Kmart and continue shipping, once satisfactory assurances are obtained from the bankruptcy courts. Mr. Martin Schwartz, President and Chief Executive Office of Dorel stated, "We have enjoyed an excellent relationship with Kmart over the years and are hopeful that today's filing under the bankruptcy protection laws will allow Kmart to address its problems. We expect Kmart to once again be a strong partner going forward." Dorel Industries Inc. is a rapidly growing, consumer products manufacturer specializing in three product areas. Dorel's product offerings include juvenile products such as infant car seats, strollers, high chairs, toddler beds, cribs, infant health and safety aids, play-yards and juvenile accessories; a wide variety of ready-to-assemble (RTA) furniture for home and office use; and home furnishings such as metal folding furniture, chairs, tables, bunk beds, futons and step stools. Dorel employs approximately 3,800 people in nine countries. Major North American facilities are located in Montreal, Quebec; Cornwall, Ontario; Columbus, Indiana; Wright City, Missouri; Tiffin, Ohio; Dowagiac, Michigan; Cartersville, Georgia and Canton, Massachusetts. The Company's major divisions in the United States include Cosco, Ameriwood and Safety 1st. In Canada, Dorel operates Ridgewood and Dorel Home Products. European operations are carried out through Maxi-Miliaan B.V. in the Netherlands as well as Dorel (U.K.) in the United Kingdom. LTV CORP: Terminating Non-Union Retiree Benefits as of Jan. 31 -------------------------------------------------------------- The LTV Corporation and its debtor-affiliates seek authority to terminate certain retiree benefit plans for those individuals that the Retirees' Committee is authorized to represent: 1) The LTV Health Care Plan; 2) The LTV Life Insurance Plan; 3) The Welfare Benefit Plan for Retirees of New Kensington or the Coal Mining Companies - Plan of Insurance Benefits for Hourly Paid Employees of New Kensington Plant; and 4) The Donner-Hanna Welfare Benefit Plans. Due to severe liquidity constraints, the Debtors have idled their integrated steel assets and begun the process of seeking to sell these and other assets to third parties, as outlined in the APP. Because the Debtors have no encumbered assets available to pay retiree benefit claims incurred for services rendered to nonunion retirees after January 31, 2002, the termination of those benefits is necessary for the successful implementation of the APP and, ultimately, the confirmation of the Debtors' plan o reorganization. As of September 2001, the Debtors provided health coverage and other retiree benefits to approximately 13,100 nonunion retirees, and approximately 55,000 union retirees, their spouses or surviving spouses, and/or other eligible dependants under a number of different benefit plans. Although the benefit plans generally are contributory, meaning that participants pay a portion of the costs of the plans, the vast majority of the costs associated with the benefit plans are borne by the Debtors. The December 31, 2000 actuarial present value of the Debtors' future costs for the benefit plans is approximately $1.5 billion. For the calendar year ending December 31, 2000, the benefit plans had a cash cost to the Debtors of approximately $131 million, of which approximately $23 million represents the Debtors' costs for the benefit plans on the account of nonunion retirees. As such, the benefit plans, including benefit plans covering nonunion retirees, impose significant financial obligations on the Debtors' estates. In light of the idling and cessation of production at their integrated steel business, their overall deteriorating financial condition, the APP goal of selling these businesses and related assets and the unavailability of funds to make payments of retiree benefits after January 31, 2002, the Debtors have determined that it is necessary to terminate the retiree benefit programs covering nonunion retirees in order to permit them to preserve and maximize the value of their estates in connection with the implementation of the APP. Termination of retiree benefit obligations is described by the Debtors as "fair and equitable", insofar as it gives all unsecured creditors the opportunity to share in the distribution of the Debtors' limited assets, and insofar as the Debtors already have reached an agreement with the Union to limit retiree benefits paid to Union retirees. The APP contemplates, and the APP budget reflects, amounts to pay (a) current and accrued payroll for active employees, (b) wages and benefits for active employees that the Debtors expect will continue in the Debtors' employ for varying periods of time, (c) incurred but not reported medical claims for active and retired employees for a certain period of time, and (d) healthcare and COBRA administration costs. The APP budget does not allocate any funds for the payment of retiree benefits to nonunion retirees after January 31, 2002. Likewise, none of the funds advanced under the Tubular and Copperweld facilities are available to pay retiree benefits for nonunion retirees. The nonunion retirees continue to accrue claims to the detriment of other creditors. While the APP budget provides for certain retiree and COBRA benefits and IBNR claims in the short term, it does not provide for payment of retiree benefits on behalf of nonunion retirees after January 31, 2002. Accordingly, without termination of retiree benefits, the Debtors will be unable to implement the APP. The Debtors have met with the 1114 Committee and presented it with a proposal to modify the retiree benefits for the retirees represented by the Committee. At the meeting, the Debtors also reviewed their financial status and the APP with the Committee. The Debtors and the Committee have agreed to meet again; however, the Debtors have begun the process by bringing this Motion. (LTV Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 609/392-00900) LTV CORPORATION: Steel Debtor Agrees to Sell Warren Coke Plant -------------------------------------------------------------- LTV Steel Company, Inc., (OTC Bulletin Board: LTVCQ) said that it has agreed to sell its Warren (Ohio) Coke Plant to Warren Coke Corporation, an affiliate of Tonawanda Coke Corporation of Tonawanda, New York. Terms of the sale were not disclosed. The sale is subject to approval of the U.S. Bankruptcy Court and to higher or better offers submitted prior to a hearing in bankruptcy court scheduled for January 30, 2002. LTV said that the sale must be consummated by January 31, 2002. LTV currently is maintaining the Warren Coke Plant in a "hot idle", or operable, condition. The Company does not have the necessary funding under the Asset Protection Plan budget to maintain the hot idle status beyond January 31. If LTV is unable to consummate a sale by January 31, the Warren facility will be converted to a cold idle status, rendering it unsaleable as an operating coke plant. "We are very pleased that the Warren Coke Plant will again provide jobs and economic vitality to the local community. We hope this sale bodes well for the future of our other integrated steel assets and the re-employment of our people," said Glenn J. Moran, LTV's chairman and chief executive officer. LTV said that it is continuing its efforts to secure a new owner for its Chicago Coke Plant. However, if a sale is not completed by January 31, the Company will convert the facility to cold idle status. The Warren Coke Plant employed approximately 200 people. Annual production capacity is 500,000 tons. LAIDLAW INC: Court Okays Dresdner Kleinwort as Investment Banker ---------------------------------------------------------------- Laidlaw Inc., and its debtor-affiliates obtained the authority from Judge Kaplan to retain and employ Dresdner Kleinwort Wasserstein, Inc., as successor in interest to Wasserstein Perella & Co., as financial advisor and/or investment banker in the Debtors' chapter 11 cases. Notwithstanding the approval of the Fee Structure, Judge Kaplan emphasizes that Dresdner's fees and expenses in these cases shall be subject to approval of the Court upon proper application. "It is provided, however, that the approval of Dresdner's fees and expenses shall be subject to the standards contained in section 328(a) of the Bankruptcy Code and not subject to review for reasonableness under section 330 of the Bankruptcy Code," Judge Kaplan rules. The Court makes it clear that the United States Trustee retains all rights to object to Dresdner's interim and final fee applications (including expense reimbursement) on grounds including, but not limited to, the reasonableness standard provided in section 330 of the Bankruptcy Code. Judge Kaplan states that any Transaction Fees shall be paid to Dresdner at the time of closing of the applicable transaction; provided, however, that: (a) the Transaction Fees and the other fees and expenses shall be subject to approval of the Court upon proper application by Dresdner; (b) the Monthly Advisory Fees, the Opinion Fee and any other fees and expenses in addition to any Transaction Fees shall be paid to Dresdner only upon Court approval or in accordance with any other procedures for the compensation of professionals established by the Court in these cases; and (c) Dresdner will promptly return any fees and expenses paid to Dresdner, but subsequently disapproved by the Court, to the Debtors. (Laidlaw Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 609/392-0900) LOEWS CINEPLEX: Nov. Quarter Operating Revenues Drop to $175MM -------------------------------------------------------------- Loews Cineplex Entertainment Corporation, operating as a Debtor- in-Possession, saw operating revenues of approximately $174.8 million for the three months ended November 30, 2001 were $17.3 million lower than the three months ended November 30, 2000. Box office revenues for the three months ended November 30, 2001 of approximately $123.2 million were $10.5 million lower, and concession revenues of approximately $45.9 million were $6.0 million lower in comparison to the three months ended November 30, 2000. These decreases in operating revenues were due primarily to the significant number of theatres closed/disposed of subsequent to September 1, 2000 which primarily were overlapping theatre locations and underperforming theatres, including older, obsolete theatres that contributed only minimally to cash flow from operations or were operating at a loss, coupled with lower attendance volume at existing locations (which were negatively impacted in the short term by the tragic events of September 11, 2001 in the New York and Washington, D.C. metropolitan areas). This overall decrease in revenues is net of additional revenues of approximately $14.0 million primarily from new theatre openings and an improvement in admission revenues per patron of $0.20 for the three months ended November 30, 2001. Net loss for the three months ended November 30, 2001 was $61,276, as compared to the net loss of $185,895 for the same three months of 2000. Operating revenues of approximately $627.4 million for the nine months ended November 30, 2001 were $35.1 million lower than the nine months ended November 30, 2000. Box office revenues for the nine months ended November 30, 2001 of approximately $440.6 million were $18.9 million lower, and concession revenues of approximately $164.5 million were $13.2 million lower in comparison to the nine months ended November 30, 2000. These decreases were due primarily to the same causes as those cited above for the three month period. This overall decrease in revenues is net of additional revenues of approximately $48.2 million primarily from new theatre openings and an improvement in admission revenues per patron of $0.16 and concession revenue per patron of $0.03 for the nine months ended November 30, 2001. Net loss for the nine months ended November 30, 2001 was $115,654, as compared to the net loss of $280,745 for the same period of 2000. MARINER POST-ACUTE: Hires Montgomery McCracken as Local Counsel --------------------------------------------------------------- The Mariner Post-Acute Network, Inc. Debtors and the Mariner Health Group Debtors seek to employ Montgomery, McCracken, Walker & Rhoads, LLP in Wilmington, Delaware as their local bankruptcy co-counsel, nunc pro tunc as of Friday, January 4, 2002, in connection with the commencement and prosecution of numerous adversary proceedings the Debtors intend to file seeking to recover preferences, fraudulent conveyances, or other avoidance actions. Pursuant to Section 327(a) of the Bankruptcy Code, Debtors request approval to employ Montgomery, McCracken as its present Delaware bankruptcy counsel, Richards, Layton & Finger, is currently unable to pursue the volume of adversary proceedings anticipated for filing due to the press of other MPAN projects and the substantial legal representations it has undertaken for other firm clients. Due to the number of suits to be filed, and the January 17, 2002 deadline for the filing of these adversary proceedings, the Debtors find it necessary to seek additional Delaware counsel for this purpose. Powell, Goldstein, Frazer & Murphy; Stutman, Treister & Glatt; and Richards, Layton & Finger have discussed the division of responsibilities regarding representation of the Debtors with regard to these adversary proceedings and will make every effort to avoid and/or minimize duplication of effort between the four firms. The Debtors have selected Montgomery, McCracken as co-counsel because of the firm's extensive experience and knowledge in the practice of bankruptcy law, because of its expertise, experience and knowledge practicing before this Court, because of its proximity to the Court and because of its ability to respond quickly to emergency hearings and other emergency matters before the Court. The Debtors believe that Montgomery, McCracken is well qualified to represent them with respect to preference matters in a most efficient and timely manner. Montgomery, McCracken intends to apply to the Court for allowance of compensation and reimbursement of expenses in accordance with the Court's Stipulated Order Revising Interim Compensation Procedures dated January 11, 2001. The Debtors propose to compensate Montgomery, McCracken at its customary hourly rates in effect from time to time. The principal professionals and paraprofessionals designated to represent the Debtors and their current standard hourly rates are as follows: John Francis Gough $395.00 Natalie D. Ramsey $325.00 Richard G. Placey $295.00 Noel C. Burnham $295.00 Robert M. Bovarnick $295.00 Joanne Semeister $245.00 John H. Newcomer, Jr. $235.00 Christa A. Fabiani $185.00 Jennifer Taylor $150.00 Matthew Kelsey $140.00 Isabel Wehbe $110.00 Natalie D. Ramsey, partner of the law firm of Montgomery, McCracken, advises that Montgomery, McCracken has previously provided legal services to two of the Debtors, Prism Rehab Systems, Inc. and Pinnacle Advisory Group, during their pre- petition operations but no services have been provided to these Debtors since the filing of their bankruptcy cases. Ms. Ramsey reveals in her affidavit that Montgomery, McCracken has in the past represented, currently represents, or may in the future represent, the following parties in interest, who are current clients or affiliates thereof, in matters wholly unrelated to the preference litigation: PricewaterhouseCoopers, AmeriSource (now AmeriSourceBergen), EMC Corporation, U.S. West (Quest), Mellon Mortgage Company, Department of Housing & Urban Development. Ms. Ramsey believes that Montgomery, McCracken is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code. The Debtors submit that, to the best of their knowledge, the partners and associates of Montgomery, McCracken do not have any connection with or any interest adverse to the Debtors, their creditors, or any other party in interest, or their respective attorneys, except as set forth in the motion and affidavit. (Mariner Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 609/392-0900) MCWATTERS MINING: Creditors & Shareholders Approve CCAA Plan ------------------------------------------------------------ McWatters Mining Inc., said that its secured and unsecured creditors and shareholders voted overwhelmingly in favor of the Company's Plan of Compromise and Arrangement and Reorganization of Indebtedness and Liabilities and of Share Capital pursuant to the Companies' Creditors Arrangement Act (Canada) and the Companies Act (Quebec) (the Plan) in special meetings held earlier to approve the Plan. For each class of creditors, approval by a majority in number representing not less than 66-2/3% in value of the claims of the class of creditors represented at the applicable meeting was required. Results of each creditor class meeting vote: * Banks -100% of creditors representing 100% in value of the claims of the Banks who were represented at the meeting voted in favour of the Plan. These creditors will receive, in full and final satisfaction of their claims, a cash payment equal to $2.4 million on the implementation date of the Plan, with the balance owing (approximately $4.4 million plus interest) to be paid in instalments commencing in March 2004 and ending in December 2005. * Secured Debenture Holders -100% of creditors representing 100% in value of the claims of the Secured Debenture Holders who were represented at the meeting voted in favor of the Plan. These creditors will receive, in full and final satisfaction of their claims, a cash payment equal to $1.44 million and debentures to be issued by McWatters pursuant to the Plan (the Gold-Linked Convertible Debentures) in an aggregate amount of $0.96 million on the implementation date of the Plan. * Legal Hypothecs Holders -100% of creditors representing 100% in value of the claims of the Legal Hypothec Holders who were represented at the meeting voted in favor of the Plan. These creditors will receive, in full and final satisfaction of their claims, an aggregate cash payment of $2.775 million on the implementation date of the Plan. * Unsecured Creditors - approximately 98% of creditors representing approximately 81% in value of the claims of the Unsecured Creditors who were represented at the meeting voted in favour of the Plan. These creditors will receive, in full and final satisfaction of their claims, on the implementation date of the Plan, a number of new common shares of the Company at a price of $0.10 per new common share, up to a maximum of 50% of the value of their claims from a pool of 148,000,000 new common shares and, for each new common share received, one right to be used towards the acquisition of Gold-Linked Convertible Debentures, the whole as described in the Plan. Unsecured Creditors were also given the opportunity to participate in a $200,000 pool by receiving a cash payment of a maximum of $2,000, in full and final satisfaction of their claims, pursuant to the terms of the Plan. For each class of shareholders, approval by 3/4 of the holders of shares of each class who were represented at the respective special meeting was sought. Results of each shareholder class meeting vote: * Preferred Shareholders - approximately 99.5% of the votes cast at the meeting of preferred shareholders voted in favour of the Plan. Each preferred share will be exchanged for 1.29388 new common share of the Company and, for each new common share received, one right to be used towards the acquisition of Gold- Linked Convertible Debentures, the whole as described in the Plan. * Common Shareholders - approximately 99.5% of the votes cast at the meeting of common shareholders voted in favour of the Plan. Each common share will be exchanged for 0.28122 new common share of the Company and, for each new common share received, one right to be used towards the acquisition of Gold- Linked Convertible Debentures, the whole as described in the Plan. "We are very pleased with [Wednes]day's voting results which indicate a clear support for all the work that was accomplished since February 14 of last year" said Mrs. Claire Derome, President and CEO of McWatters. "None of this could have been possible without the strong support of all of McWatters' stakeholders. We now look forward to putting our new business plan into effect and proceeding with the expansion of the Sigma-Lamaque open pit mine" added Mrs. Derome. The Plan must now be ratified by the Superior Court of Quebec at a hearing scheduled to occur on January 28, 2002. Subject to receiving court approval and satisfactory discretionary relief from the relevant securities authorities and subject to the satisfaction or waiver of all other conditions precedent to the implementation of the Plan including the entering into of several contracts, implementation of the Plan is scheduled to occur on or about February 28, 2002. Creditors are reminded that in order to participate in the implementation of the Plan, a proof of claim together with a statement of account (an invoice or an affidavit) in support of their claim must be filed with the monitor, Richter & Associes Inc., by no later than February 20, 2002. If a proof of claim is not filed by February 20, 2002, the claim will be forever barred. For further information, creditors should contact Richter & Associes Inc. at (514) 934-3497. Detailed information on the rights to acquire Gold-Linked Convertible Debentures and on the Gold-Linked Convertible Debentures is contained in the Company's information circular dated December 17, 2001. McWatters is an important Canadian gold producer, with reserves of 1.7 million ounces of gold and total resources of 6.8 million ounces of gold. McWatters is also involved in developing an extensive portfolio of exploration properties. For additional information, visit the Company Web site at http://www.mcwatters.com PAC-WEST: S&P Further Junks Ratings Over Liquidity Concerns ----------------------------------------------------------- Standard & Poor's lowered its corporate credit and senior secured bank loan ratings on Pac-West Telecomm Inc. to triple- 'C' from single-'B'-minus. The rating on the $150 million senior unsecured notes due 2009 was also lowered to double-'C' from triple-'C'. The ratings remain on CreditWatch with negative implications. The downgrade is based on Standard & Poor's increased concerns that Pac-West may be challenged to have adequate funding for its business plan beyond 2002 despite having taken measures to reduce capital spending and overhead over the past year to conserve capital. Pac-West is projected to have cash usage in 2002 of about $20 million, against an estimated $70 million in cash and $30 million in bank availability at the end of 2001. However, liquidity could become even tighter if the company is unable to renew its $40 million bank facility, which expires in June 2002, or obtain alternative financing during 2002. Standard & Poor's is concerned that Pac-West's liquidity, irrespective of the bank facility expiring, may not provide sufficient cushion against significant execution risks because of its exposure to Internet service providers (ISPs) and reciprocal compensation, change in strategy, and weak fundamentals of the competitive local exchange carrier (CLEC) business. Pac-West is a facilities-based CLEC that operates in seven states in the West. It provides bundled voice, collocation, and data services to ISPs and small and medium enterprises (SMEs). The company's business model remains highly risky because it still derives more than 60% of its revenues from reciprocal compensation, whose rate will drop by 50% over the next 18 months, and ISPs, a segment that is expected to undergo further consolidation. Pac-West's revised strategy is to shift its focus to SMEs from ISPs, and concentrate on fewer geographical markets. The rating on the unsecured notes is two notches below the corporate credit rating because the concentration of bank debt and capital lease obligations relative to Standard & Poor's assessed realizable value of assets exceeds 30%. PACIFIC GAS: Seeks Okay to Ink Triparty Indenture Trustee Pact -------------------------------------------------------------- Pacific Gas and Electric Company and the Indenture Trustee ask the Court to enter an order, (i) authorizing the Debtor to enter into the Tri-Party Agreement with the Indenture Trustee and Wilmington Trust Company, (ii) appointing Wilmington Trust Company as successor trustee under the Indenture, and (iii) granting such other and further relief as is just. The Bank of New York is the Indenture Trustee under the Indenture, dated as of September 1, 1987, as supplemented by two supplemental indentures (collectively, the Indenture), among Pacific Gas and Electric Company and the Indenture Trustee. BNY Western Trust Company (BNY Trust), an affiliate of the Indenture Trustee, is the successor trustee pursuant to the First and Refunding Mortgage, dated December 1, 1920, among the Debtor, Mt. Shasta Power Corporation, Mercantile Trust Company (San Francisco) and The National City Bank of New York, as supplemented by fourteen supplemental indentures (collectively, the Secured Indenture). The Indenture Trustee submits that the filing of the bankruptcy petition by PG&E triggered an ongoing event of default under the Indenture. Such an alleged event of default under the Indenture creates a conflict of interest for the Indenture Trustee. Section 310(b)(1) of the Trust Indenture Act of 1939, as amended by the 28 Trust Indenture Reform Act of 1990 (collectively, the Trust Indenture Act), provides that an indenture trustee has a conflict of interest if securities issued pursuant to an underlying indenture are in default and "such trustee is trustee under another indenture under which any other securities . . . of an obligor upon the indenture securities are outstanding." The Trust Indenture Act requires that a trustee with a conflict of interest either resolve the conflict of interest or resign within 90 days after identifying the conflict of interest, provided the conflict of interest has not been cured, waived or otherwise eliminated. The Indenture Trustee determined that it was not possible to resolve the conflict of interest resulting from BNY Trust's position as trustee under the Secured Indenture. Therefore, on July 3, 2001, the Indenture Trustee provided written notice of its resignation as Indenture Trustee to the Debtor under the terms of the Indenture. Pursuant to Section 610(a) of the Indenture, the Indenture Trustee's resignation does not become effective until the acceptance of appointment by the successor Trustee in accordance with Section 611 [of the Indenture]" which requires, among other things, that the successor trustee satisfy the eligibility requirements to be trustee under the Indenture. The eligibility requirements require that the successor trustee (i) is a corporation organized and doing business under the laws of the United States, any State, or the District of Columbia, (ii) is authorized under applicable law to exercise corporate trust powers, (iii) have a combined capital and surplus of at least $50,000,000, (iv) is subject to supervision or examination by federal or state authorities, and (v) have its corporate trust office in the borough of Manhattan, City of New York. The magnitude of the utility's case made it difficult for the Indenture Trustee to find an eligible successor trustee that did not have a conflict of interest. After a diligent search, the Indenture Trustee believes it has found a suitable successor trustee -- Wilmington Trust Company, a state chartered commercial bank organized and existing under the laws of the State of Delaware. It is the only entity that is willing to serve as successor trustee. Wilmington Trust Company satisfies the Eligibility Requirements, with one exception: it does not have a corporate trust office in Manhattan, although it has a "drop agency" in Manhattan for the purpose of facilitating payments and transfers. The Debtor and the Indenture Trustee believe that Wilmington Trust Company should be appointed successor trustee notwithstanding the lack of a corporate trust office in Manhattan. The Indenture Trustee and the Debtor believe that Wilmington Trust Company's lack of a corporate trust office in New York will not have a material adverse effect on the noteholders. In addition, since the notes currently outstanding are represented by global notes held by a securities depository, the Debtor and the Indenture Trustee do not believe that the existence of a corporate trust office in Manhattan is a material requirement. Ownership of beneficial interests in the global notes is shown on, and transfers are effected through, the depository's book-entry registration and transfer system and thus a New York registrar and transfer agent is not necessary. Subject to this Court's approval, the Debtor, the Indenture Trustee and Wilmington Trust Company are prepared to enter into an Agreement of Resignation, Appointment and Acceptance (the Tri-Party Agreement). Under the Tri-Party Agreement, and subject to Court approval, Wilmington Trust Company will be appointed successor trustee. The Indenture Trustee will assign all of its rights, powers and trusts as trustee under the Indenture to Wilmington Trust Company. The Bank of New York is the Indenture Trustee under the Indenture, dated as of September 1, 1987, as supplemented by two supplemental indentures (collectively, the Indenture), among Pacific Gas and Electric Company and the Indenture Trustee. There are currently five series of notes outstanding under the Indenture under which The Bank of New York is the Indenture Trustee. As of the Petition Date the Debtor was, and still is, indebted for the following amounts: (a) in the aggregate liquidated amount of $2,207,250,000.00 on account of outstanding principal consisting of: (1) $680,000,000.00 aggregate principal amount of 7.375% Senior Notes due 11/1/2005, (2) $1,240,000,000.00 aggregate principal amount of floating rate notes due 10/31/01, (3) $147,250,000.00 aggregate principal amount of Medium Term Notes, Series B, (4) $76,000,000.00 aggregate principal amount of Medium Term Notes, Series C and (v) $64,000,000.00 aggregate principal amount of Medium Term Notes, Series D; and (b) in an aggregate liquidated amount of $40,361,072.64 on account of outstanding interest as of the Petition Date. The Debtor issued certain mortgage bonds pursuant to the Secured Indenture under which BNY Trust is the successor trustee. The mortgage bonds are secured by first-priority security interests and liens on virtually all of the Debtor's assets. (Pacific Gas Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 609/392-0900) PANAMSAT: S&P Assigns BB Rating to $1.25BB Sr. Secured Bank Loan ---------------------------------------------------------------- Standard & Poor's assigned its double-'B' bank loan rating to PanAmSat Corp.'s $1.25 billion senior secured credit facility, and assigned its single-'B' rating to the company's proposed $500 million senior unsecured note offering. These ratings were simultaneously placed on CreditWatch negative. At the same time, the rating on PanAmSat's $750 million senior unsecured notes was raised to double-'B' from double-'B'-minus, reflecting the notes' prospective ranking in the company's capital structure. In addition, all other ratings on PanAmSat and its parent, Hughes Electronics Corp., which owns 81% of PanAmSat, remain on CreditWatch negative, pending the outcome of Hughes' proposed merger with EchoStar Communications Corp. (B+/Watch Pos/--). As Standard & Poor's has indicated previously, the likely corporate credit rating on an EchoStar/Hughes/PanAmSat or EchoStar/PanAmSat merger would be either 'BB-' or 'B+', and PanAmSat's corporate credit rating would be equalized with that of its parent. The notching on the rating on PanAmSat's bank loan and senior secured and unsecured notes will not change, absent further changes in the company's capital structure. PanAmSat's new credit facility consists of a six-year $400 million term loan, a six-year $600 million term loan, and a $250 million revolving credit facility. The facility is secured by substantially all of the company's tangible and intangible assets. Amortization of the term loans does not begin until 2004. A number of financial covenants exist, including an initial 5 times total debt-to-EBITDA ratio. The majority of the company's assets and cash flow, aside from some older satellites, reside at the same level as the bank creditors. The existing $750 million and proposed $500 million senior unsecured notes also reside at this level. As part of the bank transaction, the $750 million senior notes will receive the same collateral and covenant package as the bank creditors, and will be pari passu in right of payment. Thus, the rating on these notes is the same as the bank loan rating. On a pro forma basis, about $1.75 billion of secured debt will be present in the company's capital structure. The proposed $500 million senior unsecured notes are notched down twice from the company's corporate credit rating, reflecting the significant level of secured debt in the capital structure. The rating on the secured creditors has been notched up once from the corporate credit rating, reflecting Standard & Poor's belief that adequate value exists for a full recovery of these loans under a distressed scenario. This is based on PanAmSat's investment-grade business profile, its high-margin cash flows, stable base of long-term contracts from largely creditworthy customers, $5.84 billion backlog, scarce orbital slots, and 21 satellites in orbit. At Sept. 30, 2001, the net book value of its satellites and other property plant and equipment was $3.2 billion. The satellite assets, which cost about $250 million to build and insure, are depreciated on a straight-line basis between 10 and 15 years. The company has spent more than $2 billion upgrading its fleet over the past few years. The ratings on PanAmSat will remain on CreditWatch until the outcome of the EchoStar transaction is known. Ratings Assigned Placed on CreditWatch Negative PanAmSat Corp. RATING $1.25 billion bank loan BB $500 million senior unsecured notes B Rating Raised and Remaining on CreditWatch Negative PanAmSat Corp. TO FROM $750 million senior unsecured notes BB BB- Ratings Remaining on CreditWatch Negative Hughes Electronics Corp. RATING Corporate credit rating BB+/B Commercial paper B PanAmSat Corp. Corporate credit rating BB- PENNZOIL-QUAKER: Will Release Q4 & Full-Year Results on Feb. 5 -------------------------------------------------------------- Pennzoil-Quaker State Company (NYSE: PZL) said that it will release fourth quarter and full year 2002 results before the market opens on Tuesday, February 5, 2002. The company will host a conference call at 9:00 a.m. CST that same day to discuss the earnings release and other matters of interest to the financial community. The conference call can be heard live at http://www.pennzoil-quakerstate.comand will be available for replay two weeks thereafter. The company also said that it will incur a pretax charge of up to $20 million in the fourth quarter, in addition to the restructuring expenses previously announced in June. The new charges are asset impairments resulting from the write-off of certain receivables related to the Chapter 11 bankruptcy filing of K-Mart, and charges related to the company's operations in Argentina due to that country's currency devaluation. Excluding special charges, the company reiterated its comfort with the current fourth quarter and full year 2001 consensus earnings estimates of 17 cents per share and 64 cents per share, respectively, for its recurring, continuing operations. "Obviously, the additional charges announced [Wednes]day are in light of very recent developments and are the appropriate, conservative actions to implement. We are hopeful that K-Mart is successful in its reorganization and expect to maintain a relationship with them," said James J. Postl, president and chief executive officer of Pennzoil-Quaker State Company. "Regarding 2002, we are positive about our prospects. I expect that our earnings will exceed $1 per share for the full year under the new accounting standards and that cash flow will be strong." Pennzoil-Quaker State Company is a leading worldwide automotive consumer products company, marketing over 1,300 products with 20 leading brands in more than 90 countries. The company markets Pennzoilr and Quaker Stater brand motor oils, the number one and number two selling motor oils in the United States. Jiffy Lube, a wholly owned subsidiary of Pennzoil-Quaker State Company, is the world's largest fast lube operator and franchiser. * * * In October 2001, Fitch rated Pennzoil-Quaker State Company's $250 million senior unsecured note issue 'BB-', while it maintained 'BB+' senior secured notes ratings. According to the international rating agency, Pennzoil's credit profile will remain weak given higher operating costs for Pennzoil, lower volumes in the lubricants and consumer products segment, and increased debt levels. Despite the weaker credit profile, the additional security given to the existing senior noteholders and new bank lenders is a significant benefit and is reflected in the above secured ratings. The level of subordinated debt included in the capital structure also enhances the secured note holders' positions. Security includes all U.S. intangible assets, inventory, and accounts receivables not sold in the securitization program. PLANVISTA: Agrees to Terms of New Bank Facility & Debt Workout -------------------------------------------------------------- PlanVista Corporation (NYSE: PVC) said that it has agreed to terms for a new credit facility with its existing lending group and a bank restructure, resulting in a significant reduction of its debt. The Company expects the credit facility and restructure to take effect within thirty (30) days, subject to documentation satisfactory to lenders and agreements with other noteholders. This transaction will strengthen PlanVista Solutions' position as an industry leader in medical cost containment and provides greater financial and operating flexibility. The new credit facility has a term of two years and is subject to interest at prime plus 1%, with monthly payments of interest commencing in the first quarter of 2002 and nominal quarterly amortization of principal commencing in June 2002. Under the terms of the restructure agreement, PlanVista Solutions will exchange approximately $28.6 million of bank debt for equity in the form of convertible preferred securities that cannot be exercised until 18 months after closing the transaction. In connection with the debt restructure, an existing non-bank subordinated note in the amount of $5 million will automatically convert into common equity. Company management indicated that, as of closing, its total debt is expected to be $40-45 million, which is approximately half of its debt as of 2001 year end. Company management indicated that it will initiate efforts to redeem the preferred securities within 6-9 months. If the securities are not redeemed within 18 months, their provisions will allow the holders thereof to acquire 51% of the Company utilizing a conversion rate of not less than $1.80 per share. The amount of the conversion and conversion rate may increase on or before closing. According to PVC Chairman and Chief Executive Officer Phillip S. Dingle, "This is a milestone in our strategic turnaround program, as we have now completed our divestiture and restructure activities. The support represented by our lending group's commitment will allow us to build upon a solid foundation with a strengthened balance sheet and significantly reduced debt, and will eliminate uncertainty about PlanVista Solutions. It also allows us to focus on executing our business plan, growing revenues, and continuing to improve operating results. Equally important, from our shareholders' perspective, the proposed restructure does not cause immediate dilution or damage our value proposition." Dingle added, "Whereas the competition used our balance sheet against us during 2001, we have now leveled the playing field. The competitive advantage we maintain by and through our superior products and services, technology, and work force make this a good day for PlanVista." The Company expects to file an 8K containing additional restructure terms which, among other things, provide that holders of the preferred stock will be entitled to receive dividends at a rate per annum equal to 10% during the first year and 12% thereafter, in each case compounded and payable quarterly in additional preferred stock (i.e., "pay-in-kind" or "PIK") issued at the same conversion rate. Preferred shareholders will also acquire representation on PVC's Board of Directors and can initially appoint three out of seven directors. If the Company fails to achieve certain agreed upon quarterly performance benchmarks, experiences a payment default on the remaining bank debt, or fails to redeem the preferred stock within 18 months, preferred shareholders may appoint four of the seven directors and will be given the right to participate in shareholder votes as if their shares were converted. Company management indicated it will provide earnings guidance for 2002 and release its fourth quarter 2001 financial results on February 19, 2002. PlanVista Solutions is a leading health care technology and product development company, providing medical cost containment for health care payers and providers through one of the nation's largest independently owned full- service preferred provider organizations. PlanVista Solutions provides network access, electronic claims repricing, and claims and data management services to health care payers and provider networks throughout the United States. Visit the company's Web site at http;//www.planvista.com POLAROID CORP: Intends to Continue Current Severance Program ------------------------------------------------------------ Polaroid Corporation and its debtor-affiliates seek the Court's authority to continue its current severance program for current employees. Greg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, recounts that the Court previously approved the Severance Program for Employees terminated on or before December 31, 2001. Under the Severance Program, Mr. Galardi reiterates, the Terminated Employee would be paid accrued, but unpaid vacation pay in a lump sum. Moreover, Mr. Galardi continues, the Debtors (at their sole option) may offer either: (a) four weeks of salary paid over time in line with standard Debtor payroll practices and one month of medical health benefits at Employee rates from the date of Termination, or (b) an approved leave of absence with pay and benefits for four weeks following termination. Mr. Galardi further states that the Debtors were granted authority to implement the Severance Program, provided that the cost of the Severance Program for those Employees terminated between October 20, 2001 and December 31, 2001 did not exceed $5,700,000. As of December 30, 2001, Mr. Galardi says, the Debtors expect to have terminated 416 employees. "The total cost of the Severance Program for the 416 Employees terminated between October 20, 2001 and December 30, 2001 is expected to equal $2,400,000," Mr. Galardi estimates. Mr. Galardi tells the Court that the Debtors intend to continue headcount reductions through the first quarter of 2002. To that end, Mr. Galardi relates, the Debtors expect to sever up to an additional 500 employees prior to March 31, 2002. "The Debtors expect the cost of the Severance Program for those Employees terminated between December 30, 2001 and March 31, 2002 to equal $3,300,000," Mr. Galardi informs Judge Walsh. Mr. Galardi points out that the cost of extending the Severance Program through March 31, 2002 will not exceed the cost that was expected to be incurred under the Severance Program for the period ending December 30, 2001. "This cost saving is primarily attributable to the large number of voluntary terminations by Employees to date," Mr. Galardi remarks. Under the Severance Program, Mr. Galardi explains, Employees who voluntarily terminate employment are not eligible for severance. According to Mr. Galardi, the Debtors' ability to continue a rational headcount reduction without provoking mass Employee defections is contingent upon the Debtors' ability to offer their Employees a reasonable severance program. "Unless the Severance Program is extended for an additional three months, the Debtors face the prospect of a demoralized workforce becoming increasingly distracted," Mr. Galardi warns. The Debtors assert that the implementation of the Severance Program is essential to their ability to retain the existing employees. "Finding new and qualified employees would be extremely difficult since they are busy seeking to sell all or part of their assets," Mr. Galardi explains. (Polaroid Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392-0900) PSINET INC: Gets Okay to Sell Back IMSG Shares for $1.7 Million --------------------------------------------------------------- Interactive Marketing Systems Group Pty Limited (IMSG) made a Buy-Back Offer to PSINet, Inc., to buy back and cancel 90 percent of the IMSG shares they hold in connection with the liquidation of its assets and a voluntary winding-up of its affairs. The Buy-Back Offer expired at 1:00 a.m. New York City time January 21, 20022 (the Acceptance Deadline). In order to meet the Acceptance Deadline, the PSINet Debtors sought and obtained an Emergency Order from the Court, pursuant to 11 U.S.C. Secs. 363(b), (f) and 1146(c) authorizing PSINet to sell shares it owns of IMSG back to IMSG free and clear of liens, claims, interests and transfer taxes and authorizing all actions by the Debtors necessary to effectuate the Sale, the exit of their investment in IMSG, and IMSG's related windup. PSINet expects that by selling its IMSG shares, it will fetch approximately US$1,708,8083 (AU$3,317,569) for its estate, based on the offered price of AU$3,378.38 per Series A Converting Preference Share and the exchange rate on December 22, 1999 of AU$1.0 = US$0.65. Payment for the shares sold would be made on January 28, 2002. PSINet would sell 90 percent and retain ten percent of the Preference Shares it currently holds, but because these retained shares will be stripped of their liquidation preference as part of the Buy-Back Offer, they will be pari passu with ordinary shares. As the equivalent of ordinary shares, PSINet would retain a 2.18 percent ownership interest (on a fully-diluted basis) in IMSG. These retained shares would have value based on IMSG's and its subsidiaries' remaining undistributed assets, which include intellectual property of an unknown market value owned by IMSG's U.S. subsidiary, Sharinga Networks, Inc. that IMSG is seeking shareholder approval to liquidate in a sale to Sharinga's co-founders or another bidder before January 30, 2002. If PSINet does not accept the Buy-Back Offer, it fears that the 1,091 Preference Shares it currently holds will be stripped of their existing liquidation preferences without PSINet's consent. If this happens, the Shares will be significantly devalued with no corresponding compensation to PSINet. PSINet would like to (a) accept the Buy-Back Offer, (b) vote the Shares by proxy in favor of all related actions necessary for IMSG to consummate the Buy-Back Offer and windup its business, and (c) take all actions necessary to effectuate the Sale and exit its investment in IMSG. IMSG is an Australian company (ACN 093 381 894) in the business of providing internet and virtual private network services. IMSG owns a U.S. subsidiary called Sharinga Networks, Inc. The Shares PSINet holds constitute 20 percent of the Preference Shares outstanding. PSINet acquired these Shares for investment purposes on December 22, 1999 for AU$3,000,000 (US$1,938,7624). While IMSG has not been profitable as an operating business, IMSG recently collected on a significant litigation judgment and thus has AU$29.5 million surplus cash above its capital requirements. Despite the availability of this cash for business operations, IMSG's Board has recommended to shareholders that IMSG wind up its affairs and distribute this cash and IMSG's other assets. It is the Debtors' understanding that the Committee does not oppose the Sale. The Debtors submit that PSINet's decision to sell the Shares pursuant to the Buy-Back Offer is an exercise of reasonable business judgment. The amount that PSINet will receive for the Shares, i.e. approximately US$1.7 million, is approximately equal to PSINet's initial investment. If PSINet does not accept the Buy-Back Offer, it expects that its distribution under the windup will be significantly less, because the Preference Shares will stripped, by a vote of the holders of the other Preference Shares, of the liquidation preference they currently have (stripping the preference from all of the Preference Shares is a condition to consummation of the Buy-Back Offer). PSINet's 20 percent holding of the Preference Shares series does not rise to the level at which PSINet could block a stripping vote by the requisite number of holders (75 percent). Moreover, PSINet believes that the offering price for the Shares under the Buy- Back Offer is a fair valuation of them. PSINet accepts the view of the IMSG Board (which contains a member elected by the holders of the Preference Shares), that IMSG has no clear way to profitability. In PSINet's business judgment, the Shares are at their maximum value now and should be sold at this time for the benefit of its estate. In PSINet's view, the Buy-Back Offer represents substantial value to its estate inasmuch as it provides favorable terms for the disposition of the Shares at a price that represents fair and reasonable consideration having a certain value. (PSINet Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 609/392-0900) QUALMARK CORP: Fails to Comply with Nasdaq Equity Requirement ------------------------------------------------------------- QualMark Corporation (Nasdaq:QMRK) is a world leader in designing, manufacturing and marketing HALT (Highly Accelerated Life Testing) and HASS (Highly Accelerated Stress Screening) systems. QualMark provides America's largest corporations with products that improve product reliability and allow them to get to market faster. QualMark said that it has requested a hearing to appeal a Nasdaq staff determination that the Company's common stock is subject to potential delisting from the Nasdaq SmallCap Market. On January 17, 2002, the Company received a letter from Nasdaq notifying the Company of Nasdaq's intent to delist the Company as of January 25, 2002. The delisting notification stated that the Company was no longer in compliance with either the minimum $2,000,000 in net tangible assets or $2,500,000 in stockholders equity requirement for continued listing on the Nasdaq SmallCap Market under Marketplace Rule 4310C(2)(B). QualMark is appealing the Nasdaq determination and will be presenting a plan to the Nasdaq for achieving the requirements for continued listing. Under Nasdaq rules a hearing request will stay the delisting of the Company's securities pending the Panel's decision. The Company is requesting an oral hearing allowing the common stock to continue to trade on the Nasdaq SmallCap Market. There can be no assurances that Nasdaq will grant the Company's request for continued listing. If Nasdaq should not rule in favor of the Company, QualMark intends for its stock to be traded on the OTC Bulletin Board. QualMark Corporation, headquartered in Denver, Colorado, is a leader in designing, marketing, and manufacturing accelerated life testing systems providing America's largest corporations with products that improve product reliability and allow them to get to market faster. The Company has installed more than 400 of its proprietary testing systems in 18 countries and operates six of its own testing and consulting ("ARTC") facilities in Denver, Colo., Santa Clara, Calif., Farmington Hills, Mich., Hopkinton, Mass., Huntington Beach, Calif., and Winter Park, Fla. QualMark has also formed international ARTC alliances in the United Kingdom, Ireland, Germany, the Netherlands, Italy, France and Sweden. The Company also offers engineering services and products that complement the core technologies of QualMark and other test equipment providers. SKEENA CELLULOSE: NWBC Withdraws $150MM Restructuring Plan Offer ---------------------------------------------------------------- NWBC Timber and Pulp Limited has withdrawn its $150 million restructuring plan offer for Skeena Cellulose Inc. (SCI). Daniel Veniez, NWBC's President and Chief Executive Officer said that the company is "satisfied that all reasonable avenues have been thoroughly explored". By renewing the exclusivity arrangement with the same party that it has been in negotiations with since last October, the Ministry of Competition, Science and Enterprise has effectively closed the door to other alternatives, the company stated. "Our proposal was not a quick fix, but represented a long term commitment to revitalize the company, and by extension, provide the basis for an economic recovery in the Northwest", stated Veniez. "We carefully developed a $150 million renewal plan that would allow Skeena to look to the future with confidence, and are proud of our efforts, and grateful for the support of the people of Northwest British Columbia", said Veniez. NWBC's Chairman, George S. Petty, stressed that NWBC is "surprised and very distressed" with the governments choice and approach to the Skeena matter. Mr. Petty indicated that despite the outcome of the Skeena project, "We support the BC Government's fundamental policy direction". "Premier Campbell's commitment to undoing the fiscal, institutional, and regulatory straightjacket imposed by the previous 10 years of NDP rule was one of the reasons why we returned to BC, and one we support", stated Mr. Petty. The Forest Practices Code has been particularly damaging to the industry in BC and is directly responsible for a cumulative addition of $250 million in cash costs to Skeena during the 1990's. SUN HEALTHCARE: Seeks Approval to Hire Ernst & Young as Advisors ---------------------------------------------------------------- Sun Healthcare Group, Inc., and its debtor-affiliates seek the Court's authority to employ Ernst & Young as its medical compliance, risk and quality management advisors, nunc pro tunc to November 1, 2001. Etta R. Wolfe, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, tells Judge Walrath that Ernst & Young's services are vital to the Debtors' ability to meet various federal compliance and quality improvement obligations. "Ernst & Young is well-qualified to perform the services and the Debtors know of no reason why they should not be retained," Ms. Wolfe adds. Ms. Wolfe states that Ernst & Young will assist the Debtors in complying with its Corporate Integrity Agreement obligations and that the Firm is expected to: (i) address the Debtors' need for clinical quality improvement by providing comprehensive performance measures which enable quality improvement targets to be identified; (ii) generate facility-specific reports immediately usable by clinical and administrative managers in order to improve facility operations; (iii) address the Debtors' need for corporate integrity by introducing software which will help prevent false claims; (iv) provide reports that assist executives with the identification of strengths and weaknesses of particular facilities, regions and managers; (v) address the Debtors' need for fair reimbursement by helping to identify inaccurate reporting of a patient's clinical status. Ms. Wolfe tells the Court that both parties have acknowledged the validity of a pre-petition claim filed by Ernst & Young for pre-petition real estate advisory services in the amount of $4,000,000. "However, if the Debtors' application to retain Ernst & Young will be approved by the court, Ernst & Young will waive the Pre-petition claim," Ms. Wolfe says. Ms. Wolfe further reports that the Debtors propose to compensate Ernst & Young for its services from the assets of its estate. Ms. Wolfe lists down the terms of payment that has been agreed upon between the Debtors and Ernst & Young: (i) the engagement will be for a minimum of one year, after which time the Debtors will have the option of renewal for an additional year; (ii) monthly fees will be based on all inclusive rate of $500 per month per facility, based upon a total facility count of approximately 250, that will be billed at the first of each month. Second year fees will be $450 per facility per month; (iii) an invoice was due and payable on January 2, 2002 in the amount of $125,000 for work performed in November 2001, plus additional fees for facilities up and running with Ernst & Young's services during January 2002. On February 1, 2002, a second invoice will be due and payable for work performed in December 2001 plus additional fees for all facilities using Ernst & Young during February 2002. Thereafter, an invoice will be due and payable monthly based upon the flat monthly rate; (iv) out-of-pocket expenses relating to any work undertaken will be charged separately and will include, but not limited to, such items as travel costs, lodging costs, as well as fees for any time incurred in considering or responding to discovery requests or participating as a witness or otherwise in any legal, regulatory or other proceeding as a result of the performance of the services; (v) the Debtors will have available 1,800 hours of professional time during the engagement relating to customization and periodic updating of software, orientation and training of the Debtors' employees, implementation assistance, as well as monthly advisory assistance. Additional project specific hours may be incurred at the Debtors' specific request and be billed separately at an average hourly rate of between $250 and $320. Kevin Cornish, Esq., a partner in Ernst & Young, in Atlanta, Georgia, asserts that Ernst & Young, its partners, principals, and employees do not have any connection with the Debtors, their creditors or any other party in interest, or their respective attorneys. Mr. Cornish relates that Ernst & Young previously had a contract with the State of Connecticut Department of Social Services in which Ernst & Young acted as the Medicaid intermediary. However, Mr. Cornish emphasizes that the Connecticut contract expired in March 2000 and so, Ernst & Young no longer provides those services. "Besides, the scope of the services to be provided by Ernst & Young to the Debtors does not in any way involve Medicaid issues of the type that were involved in the Connecticut contract," Mr. Cornish justifies. Mr. Cornish asserts Ernst & Young is a "disinterested person," as such term is defined in section 101(14) of the Bankruptcy Code. Since Ernst & Young began performing the Services for the Debtors upon execution of the Engagement Letter, Ms. Wolfe explains to Judge Walrath that the relief the Debtors are seeking be deemed effective nunc pro tunc to November 1, 2001. (Sun Healthcare Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., 609/392-0900) TELIGENT: Senior Lenders Support Fixed Wireless Successor Firm -------------------------------------------------------------- Teligent Inc., a provider of facilities-based fixed wireless services, said that Teligent's senior lending group supports a plan to utilize collateral proceeds to fund a successor company with the mission of providing fixed wireless services, including private line, transport, and wholesale services, in addition to resold services, in all of Teligent's 74 markets. The successor company, expected to be directly or indirectly owned by Teligent's senior lenders, will be operated by Teligent's existing senior management team. The successor company is expected to have sufficient assets and funding to reach positive cash flow within approximately two years. The emergence of the successor company is subject to legal approvals, including those of the U.S. Bankruptcy Court and federal and state regulators. Jim Continenza, Teligent's current COO, is expected to assume the role of CEO of the successor company. "Our senior lenders have placed a vote of confidence in our approach and ability to leverage the assets and grow this business, " said Mr. Continenza. "We believe the new company will have sufficient financial resources to aggressively pursue a variety of service opportunities, particularly wholesale, that leverage the speed, flexibility, and cost advantages provided by our fixed wireless technology." Teligent voluntarily filed for Chapter 11 bankruptcy on May 21, 2001, and is in the process of selling much of its retail related assets. Teligent recently announced the sale of assets of a subsidiary company, Executive Conference Inc., for approximately $60 million. Based in Herndon, Virginia, Teligent, Inc. is a provider of fixed wireless broadband communications offering business customers facilities-based fixed wireless services, including private line, transport, and wholesale services, in addition to resold services. Teligent's offerings of regulated services are subject to all applicable regulatory and tariff approvals. For more information, visit the Teligent website at: http://www.teligent.com TELIGENT: Court Fixes Feb. 20 Bar Date for Administrative Claims ---------------------------------------------------------------- IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN RE: ) Chapter 11 TELIGENT, INC., et al., ) Case No. 01-12974 (SMB) Debtors. ) Jointly Administered NOTICE OF ADMINISTRATIVE CLAIMS BAR DATE BY ORDER OF THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. NOTICE IS HEREBY GIVEN THAT the Court ahs established February 20, 2002 at 5:00 p.m. (New York Time) as the last day and time (the "Administrative Claims Bar Date") by which all persons and entities, including individuals, partnerships, corporations, estates, trusts and governmental units, holding Administrative Claims against any of the Debtors must file a proof of Administrative Claim. For purposes of this Notice, an "Administrative Claim" is any claims (as defined in 11 U.S.C. ss 101 (5)) with respect to which a holder intends to seek priority of payment pursuant to sections 503 and 507 (a)(1) of Bankruptcy Code, except that holders of the following types of administrative expense claims need not file requests for allowance of such Administrative Claims by the Administrative Claims Bare Date: (i) administrative claims of (a) professionals retained pursuant to sections 327 and 328 of the Bankruptcy Code and (b) the Debtors' prepetition Lenders (as defined in the Final Order (I)Authorizing the Use of Lenders' Cash Collateral and (II) Granting Adequate Protection Pursuant to 11 U.S.C. Secs. 361 and 363 dated June 13, 2001) and (ii) all fees payable and unpaid under 28 U.S.C. Sec. 1930. Any person who asserts an Administrative Claim and wishes to have such Administrative Claim allowed by the Court and paid by Debtors must file a proof of such Administrative Claim allowed by the Court and paid by Debtors must file a proof of such Administrative Claim either by mailing the original proof of claim to the United States Bankruptcy Court, re: Teligent, Inc., et al., PO Box 95, Bowling Green Station New York, New York 10274, or by hand delivery or overnight courier, to the United States Bankruptcy court, re: Teligent, Inc., et al., One Bowling Green, Room 534, New York, New York 10004, so as to be received on or before February 20,2002 at 5:00 p.m. (New York Time). All proofs of Administrative Claims must be submitted in a form in accordance with the Bankruptcy Code, the Bankruptcy Rules and the local rules of the United States Bankruptcy Court for the Southern District of New York. SHOULD YOU FAIL TO FILE A TIMELY PROOF OF ADMINISTRATIVE CLAIM, SUCH CLAIM SHALL NOT BE ALLOED BY THE COURT OR PAID BY THE DEBTORS. Kirkland & Ellis Kirkland & Ellis Citigroup Center 200 East Randolph Dr. 153 East 53 rd St. Chicago, IL 60601 New York, NY 10022 Matthew N. Kleiman James H.M. Sprayregen Anup Sathy Lena Mandel Phone: 312-861-2000 Phone: 212-446-4800 Fax: 312-861-2200 Fax: 212-446-4900 Counsel to the Debtors and Debtors in Possession TERADYNE: S&P Assigns BB- Corp. Credit & Sr. Unsecured Ratings -------------------------------------------------------------- Standard & Poor's assigned its double-'B'-minus corporate credit and senior unsecured debt ratings to Teradyne Corp. At the same time Standard & Poor's assigned its double-'B'-minus rating to Teradyne's $400 million senior unsecured note issue due 2006. The outlook is negative. The ratings on Teradyne reflect the company's good position in the semiconductor testing industry and moderate capitalization, offset by substantial volatility in its served market and substantial ongoing negative cash flows. Boston, Massachusetts-based Teradyne is a leading supplier of semiconductor testing machinery (67% of revenues in 2000); circuit board testing machinery (5%); and backplanes for electronic products (24%). Industry conditions have been eroding since late 2000, and Teradyne reported $1.4 billion sales in 2001, 47% of the $3 billion reported one year earlier. Sales in the December 2001 quarter totaled $220 million, only 27% of the year-earlier quarter. The company's semiconductor testing sector, in particular, has experienced substantial volatility, with quarterly sales running at 20% of the corresponding period of 2000. The semiconductor test operations reported a $114 million pretax loss for the first three quarters of 2001, compared to pretax income of $527 million for the first three quarters of 2000. Circuit board test equipment sales have also been depressed and unprofitable, while backplanes have been profitable. Overall gross margins are likely to be in the range of 5%-15%, while R&D expenses must remain high to support new product development initiatives, expected to be around 30% of near-term sales. R&D expenses were 20% of sales in 2001 and had averaged 12% of sales over the prior three years. The company continues to support its installed equipment base worldwide, with selling, general, and administrative expense (SG&A) likely to be around 30%-40% of revenues. EBITDA was negative in 2001, although it had been $856 million, 28% of sales, in 2000. Recognizing stressed markets, Teradyne reduced its workforce three times in 2001, eliminating 22% of its staff. The company also exited the flash memory test market in the September quarter. Overall business conditions remain challenging. Teradyne expects its March 2002 results to be in the same general range as seen in December, with revenues in the $200 million-$250 million area, while negative cash flows of around $75 million per quarter are expected to continue. The company has taken steps to support its financial flexibility, including the sale of the rated $400 million senior note issue in October 2001, in addition to a recent $25 million financing of company-owned buildings. Financial assets of $586 million at December 31, 2001, are expected to meet near- to intermediate-term operating requirements. Debt of $505 million, including capitalized leases, was 23% of capital. Outlook: Negative Teradyne's good industry position and current liquidity should provide a degree of near-term downside ratings protection. However, if industry conditions remain depressed beyond the next few quarters, or if the company's financial profile deteriorates materially, ratings could be lowered. TRI-UNION: S&P Concerned About Uncertainty of Asset Sale Outcome ---------------------------------------------------------------- Standard & Poor's revised the CreditWatch rating on Tri-Union Development Corp.'s corporate credit and senior secured ratings to developing implications from negative implications. The ratings were placed on CreditWatch negative on December 7, 2001. The rating action follows the announcement that during 2002, Tri-Union plans to sell all, or most, of its Texas and Louisiana Gulf Coast properties, in addition to its Gulf of Mexico reserves. These properties constitute 76% of Tri-Union's total assets. Tri-Union then plans on focusing on its California properties. The company stated that proceeds would be used for debt reduction and working capital needs. The developing CreditWatch implications reflect the uncertainty of the outcome of the asset sales. Upon the completion of the asset sales, or a portion of the asset sales, the ratings on Tri-Union will largely depend on the company's ability to meet near- and intermediate-term debt amortization and financial charges, along with an analysis of the viability of its restructured asset base. Ratings Placed On CreditWatch Developing Tri-Union Development Corp. Corporate credit rating CCC+ Senior secured debt B- UNITEDGLOBALCOM: Receives Valid Tenders of Notes & Consents ----------------------------------------------------------- IDT United, Inc., a corporation formed by IDT Venture Capital Corporation and Liberty UGC Bonds, Inc., a wholly-owned subsidiary of Liberty Media Corporation (NYSE: L, LMC.B), today announced that the consent condition has been satisfied with respect to its cash tender offer and solicitation of consents in respect of all outstanding $1,375,000,000 10-3/4% Senior Secured Discount Notes due 2008 of UnitedGlobalCom, Inc. Under the terms of the Offer, withdrawal rights have been eliminated. IDT United has given notice to the depositary that it has received valid and unwithdrawn tenders of Notes and consents from holders of at least 66-2/3% in principal amount at maturity of the outstanding Notes to the amendments to the indenture pursuant to which the Notes were issued, the termination of the related pledge agreements and release of all collateral from the lien of the Notes, the indenture and the pledge agreements and the waiver of any defaults and events of default that have or may have occurred under the Notes, the indenture or the pledge agreements, or which may occur thereunder, and compliance with the pledge agreements and certain provisions of the indenture. UnitedGlobalCom, Inc., has advised IDT United that it will promptly meet with (a) the trustee under the indenture to sign a supplemental indenture effecting the amendments to and waiver under the indenture and (b) the collateral agent under the pledge agreements to sign a termination agreement with respect to the pledge agreements. IDT United has been advised by Mellon Investor Services LLC, the depositary for the Offer, that, as of 9:30 a.m., New York City Time, on January 23, 2002, holders of the Notes had validly tendered and not withdrawn Notes representing $1,010,576,000 aggregate principal amount at maturity of the Notes. The purchase price for each $1,000 principal amount at maturity of Notes validly tendered and accepted for purchase will be $400. The tender offer is scheduled to expire at 5:00 p.m., New York City Time, on Friday, February 1, 2002, unless extended. Notes accepted for purchase pursuant to the Offer will be promptly paid for by IDT United. Salomon Smith Barney is the dealer manager and solicitation agent and Mellon Investor Services LLC is the depositary and information agent for the tender offer and the solicitation. Requests for documentation should be directed to Mellon Investor Services LLC at 888-788-1979. Questions regarding the transaction should be directed to Salomon Smith Barney at 800- 558-3745. IDT United, Inc. is 33% owned by Liberty Media Corporation. Liberty Media Corporation (NYSE: L, LMC.B) holds interests in a broad range of Domestic and International video programming, communications, technology and Internet businesses. U.S. STEEL CORP: S&P Places Low-B Ratings On Watch Negative ----------------------------------------------------------- Standard & Poor's placed its ratings on United States Steel Corp., on CreditWatch with negative implications. These actions follow the recent announcement that United States Steel Corp., National Steel and its majority shareholder, NKK Corp. of Japan have entered into an option agreement where U. S. Steel would acquire NKK's ownership in National Steel (approximately 53% of National Steel's outstanding shares). The option expires on June 15, 2002. If the option is exercised, NKK will receive warrants to purchase shares of United States Steel common stock in exchange for its National Steel shares. In addition, United States Steel will, if it exercises the option, offer to acquire the remaining shares of National Steel in exchange for equity. The proposed transaction remains subject to several conditions including, but not limited to: * Governmental actions to limit steel imports that have depressed markets in the U.S., principally through a strong remedy under Section 201 of the Trade Act of 1974; * The removal by the government of obligations of steelmakers in the U.S. that may be acquired by other U.S. steel companies, such as employee-related obligations (also known as legacy costs); * A substantial restructuring of National Steel's debt and other obligations; and, * Negotiation of a new labor agreement that would provide for meaningful reductions in operating costs. Standard & Poor's believes that overcoming these obstacles will prove challenging. However, United States Steel and National Steel would benefit from consolidation, because it would likely lead to capacity rationalization of higher cost operations, result in significant synergies, and allow more effective competition with encroaching steel minimills. Although the proposed deal is expected to be an equity transaction, the CreditWatch placement on United States Steel reflects Standard & Poor's concern that United States Steel might ultimately need to increase its debt levels to support National's operations, which could weaken its financial profile. Additional risks include the prolonged weakness in the U.S. steel industry and the negative impact on the company's financial flexibility. In completing its review, Standard & Poor's will monitor steel industry fundamentals and assess the potential impact of cost savings and trade barriers from the pending U.S. government reviews, and the ensuing financial profile of both companies. Ratings Placed on CreditWatch with Negative Implications United States Steel Corp. Ratings Corporate credit rating BB Senior unsecured debt BB WHEELING-PITTSBURGH: Wins Nod to Sell Prudential Stock at Market ---------------------------------------------------------------- Wheeling-Pittsburgh Steel Corporation, requests that Judge Bodoh authorize and approve the sale of certain shares of common stock of Prudential Financial, Inc., or WPSC's rights to receive those shares. WPSC explains that it has been notified that it is entitled to 84,113 shares of publicly traded common stock of Prudential Financial, Inc., as a result of the demutualization of The Prudential Insurance Company of America, with which WPSC had maintained various insurance policies and programs. Under the terms of the relevant demutualization plan, such stock is being held on behalf of WPSC at EquiServe Trust Company, N.A. WPSC desires to sell such stock at market prices to provide cash for WPSC's operations. The Bankruptcy Code permits a debtor to sell property, other than in the ordinary course of business, where the debtor has demonstrated a sound business justification for the proposed sale. The stock of Prudential Financial, Inc. is not needed for any business purpose by WPC. The proposed sale will be made in good faith at readily discernible market prices. WPSC submits that the sale is in the best interests of WPSC's estate and should be approved. Judge Bodoh enters an interim order setting a three-day response time and authorizes the sale of this stock in the absence of any objections timely filed and served. (Wheeling-Pittsburgh Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 609/392-0900) * BOOK REVIEW: George Eastman: Founder of Kodak and the Photography Business ------------------------------------------------------- Author: Carl W. Ackerman Publisher: Beard Books Softcover: 522 Pages List Price: $34.95 Review by Gail Owens Hoelscher Buy a copy for yourself and one for a colleague on-line at: http://amazon.com/exec/obidos/ASIN/1893122832/internetbankrupt George Eastman was a Bill Gates of his time. This biography of Eastman (1854-1932) provides a fascinating look at the inventions, management style, interests, causes, and philanthropies of one of America's finest scientist- entrepreneurs. Eastman's inventions transformed photography into a relatively inexpensive and enormously popular leisure activity. His company, Eastman Kodak, was one of the first U.S. firms to mass-produce a standardized product. Along with Thomas Edison, he ushered in the age of cinematography. Eastman was born in Waterville, New York. At the age of 23, while working as a bank clerk, Eastman bought a camera and set in motion a revolution in photography. At the time, photographers themselves mixed chemicals to make light-sensitive emulsions and covered glass plates (called "wet plates") with the emulsions, taking photographs before the emulsions dried. It was an awkward, messy and time-sensitive undertaking. Eastman developed a process using dry plates and in 1884 patented a machine to produce coated dry plates. He began selling photographic plates made using his machines, as well as leasing his patent to foreign manufacturers. With the goal of reducing the size and weight of photographic equipment, Eastman then began investigating possibilities for a flexible firm. He and William E. Walker developed the first such film, cut in narrow strips and wound on a roller device patented by Eastman. The Eastman Dry Plate and Film Co. began producing the film commercially in 1885. In 1888, Eastman patented the hand-held Kodak camera, designed specifically for roll film and initially priced at $25. (He made up the word "Kodak" using the first letter of his mother's maiden name, Kilbourne.) In 1889, Eastman began working with Thomas Edison, inventor of the motion picture camera. Edison's increasingly sophisticated models required a stronger, more flexible transparent film, which Eastman was able to deliver. He founded Eastman Kodak Co., in 1892 and began mass-producing a range of photographic equipment. Eastman was an astute businessman. He dealt shrewdly with competitors and sometimes fell out with former collaborators. Indeed, some of them filed and won patent infringement lawsuits against him. He was tireless in his inventing and entrepreneurial endeavors. In the early days, he often slept in a hammock at the factory and cooked his own food there. His mother regularly showed up and insisted that he go home for a good meal and full night's sleep! Eastman demanded much of his employees, but no more than de demanded of himself. "An organization," he said, "cannot be sound unless its spirit is. That is the lesson the man on top must learn. He must be a man of vision and progress who can understand that one can muddle along on a basis in which the human factor takes no part, but eventually there comes a fall." This book draws on the contents of 100,000 letters to and from Eastman's friends, family, investors, competitors, employees, and fellow inventors, along with Eastman's records and notes on his various inventions. The result is a meticulously detailed account of Eastman's myriad interests and hands-on management style, as well as the evolution of photography and a major 20th- century corporation. ********* 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. Bond pricing, appearing in each Thursday's edition of the TCR, is provided by DebtTraders in New York. DebtTraders is a specialist in global high yield securities, providing clients unparalleled services in the identification, assessment, and sourcing of attractive high yield debt investments. For more information on institutional services, contact Scott Johnson at 1-212-247-5300. To view our research and find out about private client accounts, contact Peter Fitzpatrick at 1-212-247-3800. Real-time pricing available at http://www.debttraders.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 2002. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $575 for 6 months delivered via e- mail. 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