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/raid1/www/Hosts/bankrupt/TCR_Public/020319.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, March 19, 2002, Vol. 6, No. 55 Headlines ANC RENTAL: Seeks Okay to Hire Brown Brothers as Inv. Bankers ADVANCED LIGHTING: Bear Stearns Ends Hellman Stock Forced Sales AIR CANADA: Appoints Three New Executives to Support Strategies AMERICAN AIRLINES: S&P Places BB Rated LA Bonds on Watch Neg. AMRESCO: S&P Drops Class B-1F Certificates Junk Rating to D ANCHOR GLASS: Two Weeks to Cerberus-Backed Chapter 11 Prepack AREMISSOFT CORPORATION: Voluntary Chapter 11 Case Summary AVAYA INC: S&P Assigns BB- Rating to Proposed $300MM Debt Issues BANYAN STRATEGIC: Acquires Partner's Interest in Northlake Tower BE INCORPORATED: Files Certificate of Dissolution in Delaware BORDEN CHEMICALS: Court Okays PVC Plant Sale Bidding Protocol BURLINGTON: Asks Court to Extend Exclusive Period to Sept. 16 CALL-NET: Names 3 Additional Appointees to Board of Directors CHELL GROUP: Will Hold Annual Shareholders' Meeting this Month CLAXSON INTERACTIVE: May Take Steps to Restructure Units' Debts COMDISCO INC: Intends to Implement Claims Settlement Procedures CONOCO CANADA: Completes $8.2M Senior Note Consent Solicitation CONSECO FINANCE: Limited Financial Flexibility Concerns Fitch CORAM HEALTHCARE: Court Appoints Arlin Adams as Chap. 11 Trustee CROWN CORK: DebtTraders Sees Significant Value in Bonds DOMAN INDUSTRIES: Dec. 31 Balance Sheet Upside-Down by $241MM DOMAN INDUSTRIES: Misses Semi-Annual Payment on 8-3/4% Sr. Notes DOMAN INDUSTRIES: S&P Junks Rating On Ongoing Liquidity Concerns EVTC INC: Restructures Innovative Waste Tech. Asset Purchase ENRON: Energy Debtor Intends to Sell Contracts to Constellation ENTREPORT CORP: Fails to Meet AMEX Continued Listing Standards EXODUS COMMS: MGE UPS Systems Wants Prompt Decision on Contract FEDERAL-MOGUL: Wants Lease Decision Deadline Moved to October 1 GIMBEL VISION: Bob McInnes Resigns as Director Effective Mar. 13 GLOBAL CROSSING: Ray L. Olofson Sues Officers & Directors GRAHAM PACKAGING: Selling 2 Italian Operations to Serioplast GUILFORD MILLS: Wins Court Nod to Employ Togut Segal as Counsel HQ GLOBAL: Seeks Approval to Obtain $30 Million DIP Facility HAYES LEMMERZ: Gets OK to Hire Lazard Freres as Fin'l Advisors HICKMAN EQUIPMENT: Court Taps PricewaterhouseCoopers as Receiver ICG COMMS: Enters Bond & Letter of Credit Pact with Wells Fargo IFCO SYSTEMS: Won't Make Interest Payment on 10-5/8% Sr. Notes IT GROUP: Committee Signs-Up The Bayard Firm as Co-Counsel IASIAWORKS INC: PricewaterhouseCoopers Bows-Out as Accountants INTEGRATED HEALTH: Seeks Okay to Transfer Indianapolis Facility INT'L FIBERCOM: Employing Gerard Klauer as Financial Advisor KAISER ALUMINUM: Gains OK to Continue Workers' Compensation Plan KAISER CENTER: Case Summary & 20 Largest Unsecured Creditors KEYSTONE CONSOLIDATED: Exchange Offer for 9-5/8% Notes Expires KMART CORP: Court Okays Rockwood Gemini as Real Estate Advisors KMART CORP: Store Closure Drags GMAC Certificates Ratings Down KMART CORP: Fitch Keeping Watch on Morgan Stanley Transactions KMART CORP: Fitch Concerned About Impact on CSFB Transactions KMART CORP: Deutsche Bank Alex. Brown Offering 25% for Claims LERNOUT & HAUSPIE: Court Confirms Dictaphone's 3rd Amended Plan LUMINANT WORLDWIDE: Plan of Reorganization Expected on April 6 MARINER POST-ACUTE: Court Okays CDL, P.C. as Debtor's Co-Counsel MISSION RESOURCES: S&P Concerned About Deteriorating Liquidity NATIONAL STEEL: Brings-In Lazard Freres as Investment Bankers NATIONSRENT INC: Look for Schedules & Statements on March 19 NEOMEDIA TECH.: Violates Nasdaq Continued Listing Standards PACIFIC GAS: Argues over Sovereign Immunity in 2nd Amended Plan PENTON MEDIA: S&P Assigns B- Rating to $50M Senior Secured Notes PINNACLE HOLDINGS: Fails to Make Payment on 5.5% Conv. Notes POLYMER GROUP: Commences Fin'l Workout to Reduce Debt by $550MM+ SHARON STEEL: Today Should be the End of an Eight-Year Case SILVERLEAF RESORTS: Defaults on 10.5% Senior Subordinated Notes STARTEC GLOBAL: UK Unit Enters into Voluntary Administration STRATUS SERVICES: Sets Annual Shareholders' Meeting for Mar. 28 TECSTAR: Wins Court Nod to Employ Donlin Recano as Claims Agent TELENETICS CORP: Annual Shareholders' Meeting Set for May 15 TOWER AUTOMOTIVE: S&P Downgrades Corporate Credit Rating to BB TWINLAB CORP: Receives Amendment to Revolving Credit Facility USG: Prudential Seeks Stay Relief to Pursue Appeal vs. Debtors W.R. GRACE: Seeks Court Approval of Proposed Litigation Protocol WILLIAMS SCOTSMAN: S&P Rates $500M & $200M Secured Loans at BB- WOLVERINE TUBE: S&P Concerned About Weakening Cash Flow Measures * Full-Day Asbestos Seminar in New York City on March 26 ********* ANC RENTAL: Seeks Okay to Hire Brown Brothers as Inv. Bankers ------------------------------------------------------------- ANC Rental Corporation, and its debtor-affiliates ask the Court for permission to employ and retain Brown Brothers Harriman & Co. as investment bankers, nunc pro tunc to December 27, 2001. Wayne Moor, the Debtors' Senior Vice President and Chief Financial Officer, tells the Court that ANC selected Brown Brothers, with the support of the Official Committee of Unsecured Creditors, because the Firm specializes in financial advisory work in corporate restructurings and distressed situations including assets sales, mergers and dispositions. Moreover, Brown Brothers is a recognized leader in restructuring because of its innovative solutions to complex financial restructurings. In addition, Brown Brothers has acquired knowledge and understanding of the Debtors' businesses in the short time span they've been working with the Debtors. Mr. Moor informs the Court that Brown Brothers: A. To the extent it deems necessary, appropriate and feasible, familiarize itself with the business operations, properties, financial condition and prospects of the Debtors; B. Analyze the Debtors' financial liquidity and financing requirements; C. Evaluate the Debtors' debt capacity and alternative capital structures; D. Advise the Debtors and provide strategic financial analysis with respect to their alternatives, including the formulation of and implementation of a restructuring or sale; E. Advise and assist the Debtors in developing, identifying and evaluating any proposed restructuring, financing or sale; F. Advise and assist the Debtors in obtaining DIP financing and its attendant amendments and extensions; G. Assist the Debtors in the preparation of marketing materials including offering memoranda, management presentations to assist potential investors or acquirers in a business and financial evaluation of the Debtors or their assets; H. Assist the Debtors' management in preparing for and engaging in direct discussions with potential investors and acquirers concerning the business and financial performance and prospects of the Debtors; I. If the Debtors determine to consider or undertake a restructuring and financing, advise and assist the Debtors in structuring and effecting such a transaction or transactions; J. Advise with respect to the value and terms of securities offered by the Debtors in connections with a restructuring or financing; K. Assist in the development of a negotiating strategy and if requested by the Debtors, assist in negotiations with the Debtors' creditors and other interested parties with respect to a potential restructuring, financing or sale; L. Advise and assist in the formulation of an effective strategy and means for effecting a restructuring plan or financing on an advantageous basis, including assistance in the selection of one or more placement agents with respect to the placement of asset-backed debt financing; M. If the Debtors determine to consider a sale, provide financial advise and assistance to the Debtors in connection with any proposed or potential sale, including identifying potential acquirers, and at the Debtors' request, contacting such potential acquirers; N. Advise as to the probable valuation range obtainable from any sale under current market conditions; O. Assist the Debtors in assessing the respective interest of potential investors or acquirers in consummating a financing or sale involving the Debtors; P. Assist the Debtors in preparing various supplementary material that potential investors or acquirers might reasonably request in connection with a financing or sale; Q. If requested, prepare and deliver to the Debtors customary fairness opinions in connection with any proposed or potential sale; and R. Provide such other advisory services as are customarily provided in connection with the analysis and negotiation of a restructuring plan, financing or sale as reasonably requested by the Debtors. John P. Molner, General Partner and head of the Corporate Finance/Mergers & Acquisitions Department at Brown Brothers Harriman & Co., relates that Brown Brothers will receive a monthly advisory fee of $200,000 per month from December 27, 2001 through April 26, 2002 and $150,000 per month from April 27, 2002 until the engagement terminates. Brown Brothers will also be entitled to a Transaction Fee in the event of either a sale or restructuring. In the event of a Sale, Mr. Molner discloses that a Transaction Fee will be equal to: 2.000% of the first $75,000,000 of aggregate value (for a maximum of $1,500,000), plus 1.500% of aggregate value between $500,000,000 and $600,000,000 (for a maximum of $1,500,000), plus 1.125% of aggregate value between $600,000,000 and $955,000,000 (for a maximum of $4,000,000). In the event of a Restructuring, the Transaction Fee will be equal to $1,500,000. Mr. Molner assures the Court the firm does not have any relationships with parties-in-interest in these cases that are adverse to the Debtors. However, Mr. Molner discloses that Brown Brothers and its affiliates previously provided investment services unrelated to the Debtors to Federal Express, Lucent Technologies, Michelin America, Northwest Airlines, United Airlines, US Airways, Hewlett Packard, Amerada Hess, AT&T, Arthur Andersen, Lexington Insurance, Lumbermans Mutual Casualty, Allianiz Insurance Company, Continental Causality, Commerce and Industry Insurance, Walt Disney Co., General Motors, Star Excess Liability Insurance, Liberty Mutual Fire Insurance, New Hampshire Insurance Co., Paul Hastings Janofsky & Walker. The firm also previously maintained, or may from time to time maintain, wholesale banking relationships, including foreign exchange, letters of credit and nostro accounts, with AMBAC, Bank of Austria Creditanstalt, Bank of Montreal, Bank of New York, Bank of Nova Scotia, Bank of Tokyo Mitsubishi, Bank of Brussels Lambert, BNP Paribas, Capital Bank, Chase Manhattan, Credit Industriel et Commercial, Citibank, Congress Financial, Credit Agricole, Credit Suisse First Boston, Deutsche Banc, First Union National Bank, Fleet Bank, General Motors, Heller Financial, Lehman Brothers, Lombard (now World Bank of Scotland), MBIA, Natwest (now World Bank of Scotland), Nesbitt Burns, Provident, Rabobank, RZB Finance LLC (Raiffenissen Zenitralbank Ossterreich AG), Summit, Textron, and United Dominion Trust. Brown Brothers and its affiliates may from time to time provide, or previously provided, Portfolio Management services to Lawrence J. Ramaekers, Continental Life Insurance and Essex and General Insurance Co. Ltd. (ANC Rental Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 609/392-0900) ADVANCED LIGHTING: Bear Stearns Ends Hellman Stock Forced Sales --------------------------------------------------------------- Advanced Lighting Technologies, Inc. (Nasdaq: ADLT) announced the end of forced sales of ADLT common stock to satisfy margin loans of Wayne R. Hellman, the Company's Chairman and CEO. The Company has been informed by Bear Stearns that the entire outstanding amount of the only remaining margin loans secured by Mr. Hellman's stock has been paid. Bear Stearns also stated that it had made forced sales of 106,400 shares of Mr. Hellman's stock from February 28, 2002, the date of Mr. Hellman's latest report to the SEC, through March 13, 2002. As a result of these sales, Mr. Hellman owns approximately 601,500 shares individually, and has the power to vote a total of approximately 1,995,900 shares (or 7.5% of the voting power of the Company). Although no report is due to be filed with the Securities and Exchange Commission until April 10, the Company expects that Mr. Hellman will report these sales as soon as practicable. Mr. John Breen, Chairman of the Executive Committee of the ADLT Board, commented, "It is very unfortunate that Bear Stearns felt it necessary to liquidate so many of Mr. Hellman's shares at distressed prices. However, the Board and Mr. Hellman believe that the end of these forced sales will be good for the Company and its shareholders. Mr. Hellman has agreed not to obtain margin loans secured by his ADLT stock without the consent of the Board, so we do not expect the situation to arise again." Advanced Lighting Technologies, Inc. is an innovation-driven designer, manufacturer, and marketer of metal halide lighting products, including materials, system components, systems and equipment. The Company also develops, manufactures and markets passive optical telecommunications devices, components and equipment based on the optical coating technology of its wholly owned subsidiary, Deposition Sciences, Inc. * * * As reported in the Feb. 15, 2002, edition of Troubled Company Reporter, Standard & Poor's lowered its corporate credit rating on Advanced Lighting Technologies Inc., a designer, manufacturer, and marketer of metal halide lighting products, to triple-'C'-plus from single-'B' due to increased financial risk. At the same time, all ratings were removed from CreditWatch where they were placed December 19, 2001. The Solon, Ohio-based company has about $135 million in debt. The outlook is negative. "The downgrade is based on ADLT's weaker-than-expected operating performance, significantly deteriorating credit protection measures, a heavy debt burden, and very constrained liquidity," said Standard & Poor's credit analyst Brian Janiak. AIR CANADA: Appoints Three New Executives to Support Strategies --------------------------------------------------------------- Air Canada President and Chief Executive Officer, Robert Milton, announced three key executive appointments designed to support the airline's strategic business objectives. Commenting on the appointments, Milton said: "We are extremely pleased to welcome aboard three individuals who have proven track records in their respective fields. I am confident they will strengthen our team as we move forward with our strategy and continue to respond to the changing marketplace." Air Canada's focus has been to strengthen and diversify the various products, services and brands within the company's portfolio. Air Canada has recently launched several new initiatives including Tango, Air Canada Jetz and destina.ca while continuing to strengthen its existing businesses that include the mainline airline, Air Canada Regional, Aeroplan, Air Canada Technical Services and Air Canada Vacations. Montie Brewer, formerly Senior Vice President Planning at United Airlines, joins Air Canada as Executive Vice President, Commercial. He will be responsible for all commercial aspects of Air Canada including Tango, Air Canada Jetz, Air Canada Vacations, as well as new businesses, and will oversee network planning, marketing and scheduling. Brewer brings more than 20 years of aviation experience, during which time he planned and developed over 20 hub operations worldwide, managed low cost airline operations as president of United Shuttle and successfully restructured the route networks of three carriers. His appointment is effective April 1, 2002. He will be located at the airline's Montreal headquarters. Allister Paterson, formerly Executive General Manager Commercial at Air New Zealand, joins Air Canada as President and Chief Operating Officer of the airline's wholly owned subsidiary, Air Canada Vacations, a major Canadian tour operator. Prior to assuming overall commercial responsibilities for Air New Zealand, including network and product development, marketing, sales and alliances, Paterson held the position of Vice President Sales North America for Canadian Airlines for 7 years. His appointment is effective April 1, 2002. He will be based in Toronto. Kevin Howlett joins Air Canada as Vice President Labour Relations. Previously, he was Vice President Labour Relations at the airline's wholly owned regional airline subsidiary, Air Canada Regional, where he was responsible for all aspects of human resources, labour relations and corporate safety. Prior to this, Howlett held the position of Vice President Labour Relations with Canadian Airlines for 12 years. His appointment is effective immediately. Canada is the national anthem; Air Canada, the national airline. The dominant carrier in Canada, it directly serves about 150 destinations, mainly in Canada and the US, with a fleet of more than 240 planes and about 135 regional aircraft. It expanded in 2000 with the acquisition of Canadian Airlines, which had been its main domestic rival. Air Canada has combined its three regional airlines -- Air Nova, Air Ontario, and AirBC -- into a single subsidiary, Air Canada Regional. Through the Star Alliance, led by UAL's United Air Lines, Air Canada reaches more than 800 destinations in 130 countries. The company has announced plans to cut 7,500 jobs in response to higher fuel costs and a slowdown in business travel resulting from terrorist attacks in the US. As reported in the December 4, 2001, edition of Troubled Company Reporter, Standard & Poor's downgraded its senior unsecured debt rating for Air Canada to 'B' from 'B+', reflecting reduced asset protection for unsecured creditors and application of revised criteria for "notching" down of such debt ratings based on the proportion of secured debt in a company's capital structure. According to the report, the rating actions did not indicate a changed estimate of default risk, but rather poorer prospects for recovery on senior unsecured obligations if the affected airline were to become insolvent. AMERICAN AIRLINES: S&P Places BB Rated LA Bonds on Watch Neg. ------------------------------------------------------------- Standard & Poor's said it assigned its double-'B' rating to the $298.2 million Regional Airports Improvement Corporation Facilities Sublease Revenue Bonds, series 2002A-1, 2002B, and 2002C, financing American Airlines Inc.'s (BB/Watch Neg/--) Terminal 4 project at Los Angeles International Airport, and placed the ratings on CreditWatch with negative implications. "The rating is equivalent to American Airlines' corporate credit rating, because American is obligated under a lease to pay rentals that will cover bond principal and interest," said Standard & Poor's credit analyst Philip Baggaley. The rating is placed on CreditWatch because the ratings for American are currently on CreditWatch. The bonds benefit also from a guaranty by American's parent AMR Corp. (BB/Watch Neg/--), but this is not viewed as the primary source of credit support, as a guaranty is a senior unsecured obligation and AMR's senior unsecured debt is rated double-'B'-minus. The bonds refinance $33.5 million debt issued in connection with a 1984 project and fund new projects at American's Los Angeles International Airport Terminal 4. Ratings of AMR Corp., and its principal operating subsidiary, American Airlines Inc., remain on CreditWatch with negative implications, where they were placed September 13, 2001 (along with those of other U.S. airlines). The corporate credit ratings of each were downgraded to current levels September 20, 2001. Ratings are supported by a solid competitive position, an eroded but still better-than-average balance sheet, and satisfactory financial flexibility in the form of cash, bank lines, and unsecured assets. These positives are more than offset by substantial financial damage and ongoing risks relating to the industrywide crisis since September 11, 2001, and fairly high operating costs that could increase further with an upcoming pilot contract likely to be negotiated later in 2002. American, with the April 2001 acquisition of the assets of Trans World Airlines Inc., surpassed United Air Lines Inc. as the world's largest airline. American has an extensive route network: the largest in the U.S. domestic market, by far the largest in Latin America, and one of the largest on routes to Europe, though with a more limited presence in the Asia/Pacific region. AMR reported a substantial fourth-quarter 2001 net loss ($734 million before federal cash grants and other special items; $798 million including such items). The fourth-quarter loss brought AMR's full-year deficit to $1.4 billion before special items ($1.8 billion after such items). However, as at other U.S. airlines, revenue generation is gradually improving from a September 2001 low point. AMR's daily cash operating loss, which averaged $8.5 million to $9 million during the fourth quarter, had declined to an average of $6 million by December. Liquidity remains satisfactory, with a year-end cash balance of $3 billion, an undrawn $1 billion bank line arranged in January 2002, and $6 billion of unsecured aircraft. Ongoing cash drain and liquidity initiatives have lifted total debt to about $20 billion, from $14 billion at year-end 2000. Lease-adjusted net debt to capital is about 76% as of December 31, 2001 (versus 66% a year earlier), still one of the industry's better leverage ratios. AMRESCO: S&P Drops Class B-1F Certificates Junk Rating to D ----------------------------------------------------------- Standard & Poor's lowered its rating on AMRESCO Residential Securities Corp. Mortgage Loan Trust 1998-1's class B-1F mortgage loan pass-through certificates to 'D' from triple-'C'. Class B-1F is part of the fixed-rate loan group in this transaction. Concurrently, ratings are affirmed on all other classes of AMRESCO 1998-1. The lowered rating on the class B-1F certificates reflects the fact that the class has suffered principal write-downs of $441,309.53 as of February 2002. The class B-1F certificates were protected from losses by excess interest cash flow and overcollateralization. Currently the overcollateralization has been exhausted, and monthly excess interest cash flow, currently $362,365 and declining, has not been sufficient to cover realized losses. Monthly losses averaged $607,264 during the past three months. It is anticipated that future potential losses will be realized from the $13.4 million in foreclosure and REO volume reported in the February 2002 distribution report. The affirmed ratings on all of the other AMRESCO 1998-1 certificates reflect the adequate credit support provided to each of the classes, despite the pool's poor performance. In each case, the credit support for each class has increased from its original percentage. The more senior certificates are benefiting from the shifting interest support feature in this transaction. The subordinate certificates continue to represent a larger portion of the transaction, resulting in greater support percentages for the rated certificates. Class M-2F, the next class senior to class B-1F, enjoys credit support of $15,672,771 in subordination and $3,538,935 in 12-month projected excess interest, which Standard & Poor's believes is presently adequate to protect the certificate holders from future losses. Currently, approximately 20.90% of the unpaid pool principal balance is delinquent, with approximately 16.49% seriously delinquent (that is, 90-plus days, foreclosure, and REO). Cumulative realized losses total approximately 5.66% of the issued amount. At issuance, the mortgage collateral backing all of the AMRESCO 1998-1 certificates consisted of 15- to 30-year, fixed-rate, subprime loans secured by first liens on owner-occupied, single- family detached residential properties. Rating Lowered AMRESCO Residential Securities Corp. Mtg. Loan Tr 1998-1 Mortgage loan pass-thru certs Rating Class To From B-1F D CCC Ratings Affirmed AMRESCO Residential Securities Corp. Mtg. Loan Tr 1998-1 Mortgage loan pass-thru certs Class Rating A-3 AAA A-4 AAA A-5 AAA A-6 AAA M-1F AA M-2F A M-1A AAA M-2A A B-1A BBB- DebtTraders reports that Amresco Inc.'s 10% bonds due 2004 (AMMB04USR1) are trading between 23 and 26.5. See http://www.debttraders.com/price.cfm?dt_sec_ticker=AMMB04USR1 for real-time bond pricing. ANCHOR GLASS: Two Weeks to Cerberus-Backed Chapter 11 Prepack ------------------------------------------------------------- Anchor Glass Container Corporation announced that it had entered into a definitive agreement with Cerberus Capital Management L.P. pursuant to which Cerberus will invest $100 million of new capital in Anchor ($80 million of which will be in the form of equity capital) and Anchor will effect a significant restructuring of its existing debt and equity securities. The proposed plan of reorganization will result in Anchor's existing senior bank facility being replaced in its entirety by a new $100 million credit facility, Anchor's first mortgage notes remaining outstanding and being paid an amount to compensate them for their waiver of certain change of control provisions, Anchor's unsecured notes being repaid in cash at 100% of their principal amount, Anchor's Series A Preferred Stock (which has a current accrued liquidation value of approximately $82 million) receiving a cash distribution of $22.5 million and Anchor's Series B Preferred Stock (which has a current accrued liquidation value of approximately $106 million) receiving a cash distribution of $3.0 million. All of Anchor's other unaffiliated creditors, including trade creditors, will be unimpaired and be paid in full in the ordinary course. Anchor's outstanding Common Stock will be cancelled and receive no distribution under the plan. The plan will be effected through a "pre-arranged" case under Chapter 11 of the Bankruptcy Code. It is anticipated that Anchor will commence the formal bankruptcy proceeding within the next two weeks. The closing of the transactions is subject to a number of conditions, including the confirmation of a plan of reorganization by the United States Bankruptcy Court, the absence of any material adverse change in the business of Anchor, the settlement of a shareholder derivative action currently pending in Delaware Chancery Court, receipt of any required governmental approvals and third party consents and other closing conditions. In connection with the proposed plan, Anchor will not make the interest payment on its senior unsecured notes due March 15 or the interest payment on its first mortgage notes due April 1, although all accrued interest on the first mortgage notes will be paid upon confirmation of the plan. Rick Deneau, the President and Chief Operating Officer of Anchor, stated that "the Cerberus agreement is an important milestone for Anchor and will allow us to complete the significant financial restructuring that was necessary for Anchor. The transaction will remove a significant amount of indebtedness from Anchor's balance sheet and will put Anchor on a solid financial footing to continue as one of the leading glass manufacturers in the United States. The management of Anchor is delighted to have Cerberus as our new equity owner and to remove the uncertainty that has been associated with Anchor over the past twelve months." Merrill Lynch & Co. acted as exclusive financial advisor to Anchor in connection with the proposed transaction. AREMISSOFT CORPORATION: Voluntary Chapter 11 Case Summary --------------------------------------------------------- Debtor: AremisSoft Corporation dba Juno Acquisitions, Inc. Two Meridian Crossings, Suite 800 Minneapolis, Minneapolis 55423 Bankruptcy Case No.: 02-32621 Type of Business: The Debtor develops enterprise resource planning (ERP) software for midsized companies in the manufacturing (35% of sales), health care, hospitality, and construction industries. Its ERP applications automate and manage such processes as accounting, customer service, and sales and marketing for BAE SYSTEMS, Regal Hotel International, Ericsson, and other customers. Chapter 11 Petition Date: March 15, 2002 Court: District of New Jersey (Newark) Judge: Rosemary Gambardella Debtors' Counsel: Paul R. DeFilippo, Esq. Gibbons, DelDeo, Dolan, Griffinger et al One Riverfront Plaza Newark, New Jersey 07102-5497 973-596-4500 AVAYA INC: S&P Assigns BB- Rating to Proposed $300MM Debt Issues ---------------------------------------------------------------- On March 15, Standard & Poor's assigned a `BB-` rating to Avaya Inc.'s proposed $300 million senior secured notes due 2009. Proceeds of the notes will be used to fully repay all amounts outstanding in the company's revolving credit agreement, with the remaining proceeds used for general corporate purposes. The notes are secured by a second priority security interest in the stock of most of the company's domestic subsidiaries, 65% of the stock of a foreign subsidiary which holds the company's foreign intellectual property rights, and substantially all of the company's domestic non-real property assets. The security interest in the collateral securing the notes will be subordinated to the security interest in the collateral securing the company's obligations to the lenders under its credit agreement. The company has about $1.5 billion in debt and capitalized operating leases outstanding. At the same time, Standard & Poor's affirmed its other ratings on Basking Ridge, New Jersey-based Avaya, the leading supplier of enterprise voice communications equipment. The outlook is negative. Ratings continue to reflect the company's good position in the enterprise voice networking industry, ongoing maintenance revenues from its large installed base, and the company's conservative financial practices, as well as industry trends toward an open, combined voice- and data-communications architecture. Avaya anticipates that revenues for the March 2002 quarter will decline about 4% sequentially and will be about 33% below the year-ago period. Weak revenues are likely to persist over the intermediate term as the company's enterprise customer base continues to defer the largely discretionary purchase of new communications equipment. Avaya's cost structure entails substantial field support operations, which are necessary to maintain customer satisfaction, as well as high R&D expenditures essential to the development of successor product lines. As business conditions weakened in 2001, the company undertook cost-reduction actions. While EBITDA was $212 million in the strong March 2001 quarter, profitability dwindled thereafter, to only $39 million in the December quarter. EBITDA for calendar year 2001 was $565 million. Pro forma debt (including $538 million capitalized operating leases and $200 million securitized trade receivables) to EBITDA was about 2.7 times for the year. EBITDA for the March 2002 quarter is expected to be $30 million to $50 million, as weak conditions persist. Covenants in the revolving credit agreement call for minimum EBITDA of $20 million for the quarter ending March 31, 2002; $80 million for the two quarters ending June 30, 2002; $180 million for the three quarters ending Sept. 30, 2002; $300 million for calendar 2002, and $400 million for each four-quarter period thereafter. The company had announced plans in January to reduce annualized costs $180 million to $200 million to help meet these requirements, even if revenues do not grow materially. Still, further revenue declines could affect the company's ability to meet these financial covenants. EBITDA calculations exclude certain restructuring charges. Operating cash flows were negative $92 million in the December quarter. Avaya retains sufficient intermediate term financial flexibility, with $452 million cash pro forma for a new sale of common stock to Warburg Pincus Equity Partners and a planned public equity offering and nearly $1 billion available in its recently renegotiated $1.25 billion revolving credit agreement at Dec. 31, 2001. The company intends to divest its connectivity solutions business, whose revenues were $1.3 billion in the fiscal year ended September 30, 2001. The unit's revenues and profitability have also been substantially affected by economic conditions. Nevertheless, sale of the connectivity business is expected to generate significant proceeds, further bolstering Avaya's balance sheet, although the size of the revolving credit agreement would be somewhat reduced. Consistent with Standard & Poor's non-investment-grade notching practices, the company's outstanding senior unsecured debt is rated two notches below the secured revolving credit agreement. Outlook If Avaya does not materially strengthen its operating profitability, ratings could be lowered in the next few quarters. BANYAN STRATEGIC: Acquires Partner's Interest in Northlake Tower ---------------------------------------------------------------- Banyan Strategic Realty Trust (Nasdaq: BSRTS) announced that it has acquired the interests of its partner, M & J Wilkow, Ltd., in the Northlake Tower Festival Mall in Atlanta, Georgia. The shopping center was previously owned by Banyan and affiliates of Wilkow in a joint venture. In addition, Banyan announced that the property manager has been changed from M & J Wilkow, Ltd. to Spectrum Cauble Management, LLC of Atlanta, Georgia. The purchase price paid to Wilkow by Banyan was $1.3 million, adjusted by certain prorations and credits. Wilkow had an approximate 20% interest in the property's cash flow and an approximate 30% interest in its capital proceeds. The Northlake Tower Festival Mall is a 304,000 square foot power center located in the northeast Atlanta suburb of Tucker. It is occupied by 41 retail tenants including Toys R Us, AMC Theaters, PetSmart and Office Max. The center is currently 97 % leased. Commenting upon the acquisition, Banyan's Interim President and Chief Executive Officer, L.G. Schafran, said, "In keeping with the Trust's Plan of Termination and Liquidation adopted in January of 2001, we have acquired full control over our Northlake Property. We believe this acquisition will allow us to better position the asset for sale. We have had a long and prosperous relationship with M & J Wilkow and are grateful for their contribution to the success of this asset." Banyan noted that its other two assets, 6901 Riverport Drive in Louisville, Kentucky and University Square in Huntsville, Alabama, remain under separate contracts of sale to third parties. The closings on those two properties, if the contracts are not terminated pursuant to various purchaser rights, are scheduled to occur in the second calendar quarter. Banyan Strategic Realty Trust is an equity Real Estate Investment Trust (REIT) that, on January 5, 2001, adopted a Plan of Termination and Liquidation. On May 17, 2001, the Trust sold approximately 85% of its portfolio in a single transaction and now owns interests in three (3) real estate properties located in Atlanta, Georgia (the subject matter of this Press Release); Huntsville, Alabama (which is the subject matter of the Trust's press release of March 4, 2002); and Louisville, Kentucky (which is the subject matter of the Trust's press release of February 21, 2002). As of this date, the Trust has 15,496,806 shares of beneficial interest outstanding. BE INCORPORATED: Files Certificate of Dissolution in Delaware ------------------------------------------------------------- Be Incorporated (Nasdaq:BEOS) announced that it has voluntarily delisted from, and will no longer be traded on, the Nasdaq National Market. Also, Be filed a certificate of dissolution with the Delaware Secretary of State in accordance with the plan of dissolution approved by stockholders on November 12, 2001 and as set forth in the Definitive Proxy Statement filed on October 9, 2001. The record date, for purposes of determining the stockholders that will be eligible to participate in the final distribution of Be's assets, if any, was set as March 15, 2002. Be's stock transfer books were closed as of the end of trading on March 15, 2002, and it has ceased recording transfers of shares of its common stock. Pursuant to Delaware law, Be will continue to exist for three years after the dissolution becomes effective or for such longer period as the Delaware Court of Chancery shall direct, solely for the purposes of prosecuting and defending lawsuits (including but not limited to pursuing its antitrust case against Microsoft), settling and closing its business in an orderly manner, disposing of any remaining property, discharging its liabilities and distributing to its stockholders any remaining assets, but not for the purpose of continuing any business. In accordance with the plan of dissolution, after payment in full of all claims finally determined to be due, Be will make distributions of any remaining assets (including assets acquired after the record date), if any, only to stockholders of record at the time of closure of its stock transfer books on the record date, March 15, 2002. The timing and amounts of any such distributions will be determined by Be's Board of Directors in accordance with the plan of dissolution. Be may also establish a liquidating trust for the purpose of pursuing the antitrust litigation against Microsoft, liquidating the remaining assets of Be, paying or providing for the payment of Be's remaining liabilities and obligations, and making distributions to Be's stockholders. If a liquidating trust is established, stockholders will receive beneficial interests in the assets transferred to the liquidating trust in proportion to the number of Be's shares owned by such stockholders as of the record date. On November 12, 2001, Be stockholders approved the sale of substantially all of Be's intellectual property and other technology assets to a subsidiary of Palm, Inc., and the subsequent dissolution of the company in accordance with the plan of dissolution. Pursuant to the terms of the asset purchase agreement with Palm, Be retained certain rights, assets and liabilities in connection with the transaction, including its cash and cash equivalents, receivables, certain contractual liabilities under in-licensing agreements, and rights to assert and bring certain claims and causes of action, including under the antitrust laws. On November 13, 2001, Be completed the sale of its assets to the Palm subsidiary. Be's headquarters have moved to Mountain View, California and it can be reached at P.O. Box 391420, Mountain View, CA 94041. Be can be found on the Web at http://www.beincorporated.com BORDEN CHEMICALS: Court Okays PVC Plant Sale Bidding Protocol ------------------------------------------------------------- Borden Chemicals and Plastics Operating Limited Partnership (BCP) announced that the United States Bankruptcy Court for the District of Delaware has approved the bidding process for BCP's polyvinyl chloride (PVC) plant in Illiopolis, Illinois. As previously announced, BCP has executed an asset purchase agreement with Formosa Plastics Corporation, Delaware (Formosa) for the assets and operations of the plant. Under the approved bid procedures and auction process, other interested parties may submit competing bids by 4:00 p.m., March 21, 2002, through BCP's investment banker, Taylor Strategic Divestitures, Washington DC. If competing bids are determined to be fully binding commitments that comply with the court-approved procedures, an auction will be held for qualified bidders on March 25, 2002. A hearing will follow on March 27, 2002, to obtain court approval of the highest and best offer. BCP and its subsidiary, BCP Finance Corporation, filed voluntary petitions for protection under Chapter 11 of the U.S. Bankruptcy Code on April 3, 2001. BCP Management, Inc. (BCPM), the general partner of BCP, and Borden Chemicals and Plastics Limited Partnership (BCPLP), the limited partner of BCP, were not included in the Chapter 11 filings. DebtTraders reports that Borden Chemical & Plastics' 9.500% bonds due 2005 (BCPU05USR1) (an issue in default) are quoted at a price of 5. For real-time bond pricing, see http://www.debttraders.com/price.cfm?dt_sec_ticker=BCPU05USR1 BURLINGTON: Asks Court to Extend Exclusive Period to Sept. 16 ------------------------------------------------------------- Burlington Industries, Inc., and its debtor-affiliates seek the Court's approval to: (i) extend the period during which the Debtors have the exclusive right to file a plan or plans of reorganization by approximately six months, through and including September 16, 2002; and, (ii) extend the period during which the Debtors have the exclusive right to solicit acceptances through and including November 15, 2002. Paul N. Heath, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, reports that the Debtors have faced increasing financial stress prior to the Petition Date -- despite their integrated operations, diverse product lines, valuable brand names, strong market presence and proactive pre- petition restructuring efforts. Since the Petition Date, Mr. Heath relates that majority of the Debtors' time and efforts have been devoted to stabilizing their business operations and completing the transition to operations in chapter 11. The Debtors have been working diligently to achieve these tasks through: (i) the implementation of the various forms of relief granted by this Court on the Petition Date to allow the Debtors to maintain business as usual to the fullest extent possible; (ii) the retention of professionals necessary to the Debtors' reorganization efforts; (iii) the negotiation, documentation and approval of the Debtors' post-petition financing facility and the resolution of related issues with certain of the DIP Facility lenders; (iv) the approval and implementation of a key employee retention program to stabilize the Debtors' workforce; and (v) the completion of the complex and time-consuming process of preparing and filing the Debtors' schedules of assets and liabilities and statements of financial affairs. Mr. Heath further reports about the Debtors' development of a business model designed to strengthen their core business operations and overall profitability going forward. "This new business model forms the basis of the Strategic Business Plan," Mr. Heath adds. Mr. Heath asserts that in light of the Debtors' substantial progress on the Strategic Business Plan and other key issues, an extension of the Exclusive Periods is warranted. "Such an extension is necessary to provide the Debtors' key constituencies with an opportunity to evaluate the assumptions and projections contained in the Strategic Business Plan," Mr. Heath says. The extension will also provide the Debtors with an opportunity to finalize, implement and validate the Strategic Business Plan. In addition, Mr. Heath tells the Court that the Debtors also need to complete a number of tasks including their review of executory contracts and unexpired leases and the establishment of a general claims bar date and related claims administration procedures. "Only after these important steps are completed will the Debtors be in a position to develop their plan of reorganization," Mr. Heath states. Counsel to the Creditors' Committee and the Debtors' pre-petition secured lenders have informed the Debtors that their constituencies support the six- month extension requested. "The size and complexity of the Debtors' case alone may constitute cause for the extension of the exclusive periods," Mr. Heath notes. Furthermore, Mr. Heath adds that a claims bar date has not yet been established. The Debtors believe that finalizing, implementing and validating the Strategic Business Plan and participating in discussions with their various constituencies regarding the reorganization process, together with the day-to- day tasks of operating their businesses, will consume the bulk of their time and efforts in the coming months. Mr. Heath relates that an extension of the exclusive periods is justified by progress in the resolution of issues facing the Debtors' creditors and estates. The Debtors' achievements in resolving key restructuring issues to date include: (i) negotiating, documenting and obtaining Court approval of the DIP Facility, which has addressed the Debtors' current liquidity needs; (ii) developing an initial Strategic Business Plan, which once finalized, implemented, validated and updated, likely will serve as the basis for the Plan; (iii) implementing certain aspects of the Strategic Business Plan to reduce costs and strengthen the Debtors' core businesses; (iv) negotiating and implementing the Key Employee Retention Program to stabilize the Debtors' workforce and provide necessary incentives to the Debtors' key employees to remain in the Debtors' employ during the pendency of these chapter 11 cases and devote their efforts to the Debtors' successful reorganization; (v) implementing the various forms of relief granted by the Court on the Petition Date to preserve the Debtors' relationships with critical customers, vendors and service providers; (vi) completing the complex and time-consuming process of preparing and filing the Schedules; (vii) developing and obtaining Court approval of miscellaneous asset sale procedures to facilitate the efficient disposition of non-core assets, including surplus equipment and property; (viii) beginning to review and analyze the hundreds of executory contracts and unexpired leases to which one or more of the Debtors are parties; and, (ix) establishing effective lines of communication with the Creditors' Committee, the DIP Lenders, the Debtors' pre- petition secured lenders and other parties in interest. Accordingly, Mr. Heath assures the Court that the extension requested will not harm the Debtors' creditors or other parties in interest. "The relief requested will not result in a delay of the plan process; rather, it will permit the process to move forward in an orderly fashion," Mr. Heath adds. (Burlington Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392-0900) CALL-NET: Names 3 Additional Appointees to Board of Directors ------------------------------------------------------------- Call-Net Enterprises Inc. (TSE: CN, CN.B) announced the names of three additional proposed independent appointees to the company's Board of Directors, pursuant to its previously announced comprehensive recapitalization by way of a Plan of Arrangement. The Board will be appointed as part of the Plan of Arrangement to be approved at the noteholder and shareholder meetings on April 3, 2002. The three additional proposed directors are Robert Franklin, Wendy Leaney and Barry Campbell. The Management Proxy Circular dated February 22 set out that, as part of the Plan of Arrangement, Call-Net's Board of Directors will be enlarged to 11 and named eight proposed appointees to the Board. A supplement to the Management Proxy Circular will be distributed to Call-Net's securityholders shortly that will provide further information about the three additional proposed appointees announced Thursday. Mr. Franklin is Chairman of Placer Dome Inc., ClubLink Corporation, and ELI Eco Logic Inc. and also serves as a director of Toromont Industries Ltd. Ms. Leaney is President of Wyoming Associates Ltd., a Toronto private investment and consulting firm, and was formerly Managing Director of the Communications Group at TD Securities Inc. She is a director of Canadian Western Bank and Corus Entertainment Inc. Mr. Campbell is a Senior Counselor of APCO Worldwide, a public affairs and strategic communications firm, former Chairman and CEO of its Canadian operations, and President of Barry R. Campbell Strategies Inc. He was previously a Member of Parliament and Parliamentary Secretary to the Minister of Finance. Mr. Campbell is also a director of the Toronto International Film Festival Group. The other proposed appointees to Call-Net's Board of Directors, pursuant to the Plan of Arrangement, are: Call-Net Chairman Lawrence Tapp, Dean, Richard Ivey School of Business; William Linton, the company's President and Chief Executive Officer; Dennis Belcher, Executive Vice President, Bank of Nova Scotia; Robert Gillespie, Chairman and CEO, General Electric Canada Inc.; Arthur Krause, Executive Vice President, Sprint Corporation; Keith Paglusch, President, Sprint E/Solutions; David Rattee, Chairman, President and CEO, CIGL Holdings Ltd.; and Joseph Wright, a director of a number of Canadian companies. Call-Net Enterprises Inc. is a leading Canadian integrated communications solutions provider of local and long distance voice services as well as data, networking solutions and online services to businesses and households primarily through its wholly-owned subsidiary Sprint Canada Inc. Call-Net, headquartered in Toronto, owns and operates an extensive national fibre network and has over 100 co-locations in nine Canadian metropolitan markets. For more information, visit the Company's Web sites at http://www.callnet.caand http://www.sprint.ca DebtTraders reports that Call-Net Enterprises Inc.'s 9.375% bonds due 2009 (CN09CAR1) are quoted at a price of 29. See http://www.debttraders.com/price.cfm?dt_sec_ticker=CN09CAR1for real-time bond pricing. CHELL GROUP: Will Hold Annual Shareholders' Meeting this Month -------------------------------------------------------------- As soon as a date is determined the Chell Group Corporation will be sending notice to its shareholders of the upcoming Annual Meeting. The Annual Meeting of the Company, a New York corporation, will be held at 10:00 a.m., local time, on March __, 2002, (date yet to be determined) at the offices of the Company, 14 Meteor Drive, Toronto, Ontario, Canada M9W 1A4, for the following purposes: (A) To elect an eight member Board of Directors to serve until the next Annual Meeting of Shareholders of the Company or until their successors are duly elected and qualified; (B) To authorize the issuance of shares of the Company's common stock upon the conversion of notes issued pursuant to a private offering being conducted by the Company; (C) To authorize the issuance of shares of the Company's common stock pursuant to a Share Purchase Agreement dated December 13, 2001 by and among the Company, Chell Merchant Capital Group, Inc., Logicorp Data Systems Ltd., Logicorp Service Group Ltd., and the individuals and entities which own all of the issued and outstanding shares of Logicorp Data and Logicorp Group and ratify the transaction contemplated by the Share Purchase Agreement; (D) To authorize the issuance of shares of the Company's common stock upon the conversion of shares of the Company's Preferred Stock issued pursuant to a Securities Exchange Agreement dated February 6, 2002 by and between the Company and The Shaar Fund Ltd.; (E) To authorize the issuance of shares of the Company's common stock upon the conversion of shares of the Company's Preferred Stock issued pursuant to a Securities Exchange Agreement dated February 6, 2002 by and between the Company and Triton Private Equities Fund, L.P.; (F) To authorize the increase in the number of common shares authorized for issuance by the Company from 50,000,000 to 75,000,0000; (G) To ratify the Board of Directors' selection of Lazar Levine & Felix LLP as the auditors for the Company for the 2002 fiscal year; and (H) To consider and transact such other business as may properly come before the Annual Meeting and any adjournments thereof. In accordance with the provisions of the Company's By-laws, the Board of Directors has fixed the close of business on February 6, 2002 as the date for determining the shareholders of record entitled to receive notice of, and to vote at, the Annual Meeting and any adjournments thereof. Chell Group Corporation (NASDAQ Small Cap: CHEL) is a technology holding company seeking to create value by acquiring and growing undervalued technology companies. The company, which is considered for delisting from Nasdaq due to noncompliance of listing requirements, reported a working capital deficit of about $3.2 million as of November 30, 2001. CLAXSON INTERACTIVE: May Take Steps to Restructure Units' Debts --------------------------------------------------------------- Claxson Interactive Group, Inc. (Nasdaq: XSON), a multimedia provider of branded entertainment content to Spanish and Portuguese speakers around the world, reported financial results for the three and twelve months ended December 31, 2001. Claxson was formed on September 21, 2001 in a merger transaction which combined El Sitio, Inc., media assets contributed by Ibero-American Media Partners II, Ltd., and other media assets contributed by members of the Cisneros Group of Companies. Pro forma combined financial results for the twelve months ended December 31, 2000 and 2001 are presented as if the merger transaction had been effected on January 1 of each of the reported years. Consolidated financial results for the twelve months ended December 31, 2001 are also provided. Historical information for IAMP, El Sitio and the other assets comprising Claxson is provided in Claxson's registration statement on Form F-4 as filed with the U.S. Securities and Exchange Commission, which became effective on August 15, 2001. Claxson's full year 2001 pro forma combined results reflect $18.1 million in merger expenses and severance costs, resulting from the merger transaction and other post-merger restructuring and integration initiatives. These expenses have increased Claxson's operating losses and negative cash flows, which have also been negatively affected by the recent devaluation and economic situation in Argentina where Claxson has significant operations. Claxson is evaluating a number of alternatives and taking certain steps including, among others, the possible restructuring of some of its subsidiaries' debt including renegotiation of applicable covenants, as well as other commitments. Claxson believes that if these steps are not successfully completed in a timely manner, it is likely that its auditors will express a "going concern" opinion in connection with Claxson's annual report on Form 20- F to be filed with the Securities and Exchange Commission in June 2002. In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets which requires an initial impairment test for goodwill and intangible assets. Claxson has not yet determined if any impairment charge will result from the adoption of this statement. Net revenues for the three months ended December 31, 2001 totaled $28.9 million. Pro forma net revenues for the twelve months ended December 31, 2001 totaled $113.8 million, decreasing 11.3% from pro forma net revenues of $128.3 million in the year 2000, due primarily to a decline in Internet advertising revenues. Claxson's pro forma combined results reflect the aggregate performance of its business lines: pay television; broadcast radio and television; and Internet and broadband. Business line performance highlights are provided as a supplement to this press release. Claxson also holds an 80.1% equity interest in Playboy TV International (PTVI), a joint venture with Playboy Enterprises, Inc. (NYSE: PLA). Claxson does not control PTVI and therefore its interest in PTVI is not consolidated for reporting purposes. Subscriber-based fees for the three-month period ended December 31, 2001 totaled $15.0 million. For the twelve months ended December 31, 2001, pro forma subscriber-based fees totaled $62.4 million, which comprised approximately 55% of total pro forma net revenues and represented a 5.2% increase from pro forma subscriber-based fees of $59.3 million in the year 2000. Claxson's basic package of owned and represented channels reached a total of approximately 54 million aggregate subscribers at December 31, 2001. Advertising revenues for the three-month period ended December 31, 2001 were $11.3 million. For the twelve months ended December 31, 2001, pro forma advertising revenues were $42.7 million, which comprised approximately 38% of Claxson's total pro forma net revenues and represented a 32.6% decrease from pro forma advertising revenues of $63.4 million in the year 2000. This decrease in advertising revenues in 2001 was due primarily to the decrease in Internet advertising revenues from $21.4 million in 2000 to $5.9 million in 2001, reflecting the scaling down of the Internet operations during 2001. During the fourth quarter, Claxson secured distribution and sales rights for the Fashion TV pay television franchise in Latin America; completed the acquisition of the El Metropolitano newspaper in Chile; completed the sale of its DeCompras e- commerce business in Mexico and continued the process of divesting its connectivity services assets in Brazil. Terms of these transactions have not been disclosed. Operating expenses for the three months ended December 31, 2001 were $40.0 million. Pro forma operating expenses for the twelve months ended December 31, 2001 totaled $174.4 million, decreasing 15.7% from pro forma operating expenses of $206.9 million for the year 2000, due primarily to a decrease in Internet marketing expenses. Net loss for the three months ended December 31, 2001 was $62.1 million. This loss included a charge of $29.8 million due primarily to a foreign exchange loss on certain U.S. dollar denominated debt held by Claxson's Argentine subsidiary as a result of the Argentine currency devaluation which, for accounting purposes, was effective as of December 31, 2001. Subsequent to December 31, 2001, the Argentine currency has continued to devalue resulting in further exchange rate losses. Pro forma net loss for the twelve months ended December 31, 2001 and December 31, 2000 were $167.0 million, and $121.1 million, respectively. As of December 31, 2001, Claxson had a balance of cash and cash equivalents of $15.2 million and $113.0 million in debt. Playboy TV International For the three months ended December 31, 2001, and for the twelve months ended December 31, 2001, Playboy TV International (PTVI) and its affiliated companies recorded combined pro forma net revenue of $10.7 million and $40.5 million, respectively. The loss for the three months ended December 31, 2001 included charges of $11.6 million for the reductions in value of certain programming rights, share based compensation under a Phantom Stock Option Plan and severance. PTVI and its affiliated companies ended the period with 25 international television networks in 53 countries. PTVI has incurred net losses and working capital deficiencies. Unless PTVI's financial obligations can be restructured, PTVI will remain primarily dependent on capital contributions from Claxson to fund shortfalls. Claxson is in the process of taking certain steps to restructure its capital structure, however, there can be no assurance that Claxson will be successful in doing so. These steps are not expected to be completed prior to the time the audit of the PTVI financials is completed. As a result, it is expected that PTVI's auditors will express a going concern opinion on the financial statements for the year ended December 31, 2001. Nasdaq Update On February 14, 2002, Claxson received notification from Nasdaq that its common shares had failed to maintain a minimum market value of publicly held shares (MVPHS) of $5.0 million for 30 consecutive trading days as required by Nasdaq rules, and that Claxson would have until May 15, 2002 to regain compliance with Nasdaq's continued listing requirements. In addition, on February 28, 2002, Claxson received a notification from Nasdaq that its common shares had failed to maintain a minimum bid price of $1.00 for 30 consecutive trading days required by Nasdaq rules, and that Claxson would have until May 29, 2002 to regain compliance with Nasdaq's continued listing requirements. Claxson is evaluating several options in case it cannot regain compliance within the set period, including filing an application for transferring its securities to The Nasdaq SmallCap Market and applying for quotation on the OTC Bulletin Board. Claxson (Nasdaq: XSON) is a multimedia company providing branded entertainment content targeted to Spanish and Portuguese speakers around the world. The company has a portfolio of popular entertainment brands that are distributed over multiple platforms through Claxson's assets in pay television, broadcast television, radio and the Internet. Claxson was formed through the merger of El Sitio and assets contributed by members of the Cisneros Group of Companies and funds affiliated with Hicks, Muse, Tate & Furst Inc. Headquartered in Buenos Aires, Argentina, and Miami Beach, Florida, Claxson has a presence in all key Ibero-American countries and in the United States. COMDISCO INC: Intends to Implement Claims Settlement Procedures --------------------------------------------------------------- Comdisco, Inc., and its debtor-affiliates seek the Court's authority to implement an informal claims reconciliation program -- the Settlement Procedures -- to settle and allow certain claims against their estates. Felicia Gerber Perlman, Esq., at Skadden, Arps, Slate, Meagher & Flom, in Chicago, Illinois, relates that approximately 4,300 claims -- totaling $11,000,000,000 -- have been scheduled and filed against the Debtors to date. "There are about 2,600 unsecured claims totaling $16,700,000 asserted against the Debtors," Ms. Perlman adds . . . and many of these claims are ripe for settlement. Thus, the Debtors seek to establish the Settlement Procedures in order to facilitate the reconciliation of such claims in an efficient manner. "Given the large number of claims and the relatively small amount claimed by the majority of the claims, the potential benefit of utilizing the proposed Settlement Procedures are evident," Ms. Perlman notes. To individually seek Court approval to reconcile a large number of settlements would be burdensome on the Court and an unnecessary drain on the time and other resources of the Debtors. Thus, for the sake of both judicial efficiency as well as maximizing the Debtors' estates, the Debtors propose that: -- under the Settlement Procedures, the Debtors would communicate informally with the appropriate holders of claims in an attempt to reach a consensus on the amount and treatment of such claims. The Debtors would solicit agreements to allow the affected claims in reduced amounts, representing a compromise between the amounts reflected on the Debtors' and the creditors' books. -- to assist in the implementation of an informal reconciliation program, the Debtors seek the Court's authority to settle the claims within these established parameters: (a) for claims where the allowed amount is under $100,000, the Debtors request authority to allow such claims in amounts that the Debtors determine in their business judgment to be in the best interests of their estates, without need for Court approval or further notice; (b) except as set forth in the next provision, for claims where the allowed amount is above $100,000, the Debtors request authority to allow such claims in amounts that the Debtors determine in their business judgment to be in the best interests of their estates, subject to the notice and approval procedures; (c) for claims where the discrepancy between the allowed amount and the claimed amount does not exceed 10%, the Debtors request authority to allow such claims in amounts that the Debtors determine in their business judgment to be in the best interests of their estates, provided, however, that where such 10% or less discrepancy exceeds $100,000, prior to making such a compromise, the Debtors will be subject to the notice and approval procedures in the next provision; (d) Notice and Approval Procedures. The Debtors shall notify counsel to the Creditors' Committee, the Equity Committee, and the United States Trustee of the terms of all settlement agreements with respect to the claims described in the preceding two provisions. If each of the Notice Parties indicates its approval in writing or none of the Notice Parties provide counsel for the Debtors with written notice of an objection to the respective settlement agreement within ten days after the date the notice is mailed, the Debtors shall be authorized to accept and consummate the settlement agreement and record an allowed claim in the settled amount. If any of the Notice Parties object to the settlement, the Debtors will file a motion to approve the proposed compromise. The Debtors will submit quarterly status reports to the Notice Parties indicating the claims settled. "The principal objective of the proposed Settlement Procedures is the settlement of affected claims as quickly and cost- effectively as possible by streamlining the procedures for obtaining approval of settlements and by permitting certain holders of claims to pursue payment from third parties instead of from the Debtors' estates," Ms. Perlman explains. Furthermore, Ms. Perlman informs the Court that the proposed procedures for resolving the claims will not apply to settlements that involve an "insider" as defined in section 101(31) of the Bankruptcy Code. (Comdisco Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 609/392-0900) CONOCO CANADA: Completes $8.2M Senior Note Consent Solicitation --------------------------------------------------------------- Conoco Canada Resources Limited, a subsidiary of Conoco Inc. (NYSE: COC), successfully completed its consent solicitation with respect to its US$8.2 million in outstanding 8.25 percent senior notes due 2017, effectively eliminating the Corporation's financial reporting obligations under these notes. As a result of this solicitation, and the previously announced successful completion of the solicitations with respect to its senior notes due 2005 and 2006, the Corporation will no longer be required under these notes and the trust indentures under which they were issued to file periodic reports with the Alberta Securities Commission or provide equivalent financial information to the noteholders. As previously announced, Conoco Inc. has irrevocably guaranteed the Corporation's payment obligations on the notes and has agreed to provide the trustee for the notes copies of Conoco's required U.S. SEC filings. Conoco Canada Resources Limited is a Canadian-based exploration and production company with primary operations in Western Canada, Indonesia, the Netherlands and Ecuador. Conoco Inc. is a major, integrated energy company active in more than 40 countries. CONSECO FINANCE: Limited Financial Flexibility Concerns Fitch ------------------------------------------------------------- Fitch Ratings announced that the ABS Group has completed the initial phase of the Conseco Finance Corp. (CFC) securitization review originally announced on Feb. 5, 2002. The review is intended to determine, across all asset types, if performance has deteriorated outside of the ranges anticipated by the current ratings. The ABS group's review included transactions backed by the following asset types: Recreational Vehicle loans, Credit Card receivables, Equipment leases, Truck loans and Dealer Floorplan loans. Based on that review, the class B tranches of the 1996 B, C, D; 1997 A, B, C, D and 1998-A Green Tree Recreational, Equipment and Consumer Trust transactions are rated 'B' and are removed from Rating Watch Negative where they were placed on Dec. 3, 2001. The class B tranches of these transactions are guaranteed by CFC and normally carry a rating equivalent to CFC's senior unsecured rating, currently 'CCC'. The class B tranches were placed on Rating Watch while Fitch determined if the excess spread, which is also available to cover losses, was sufficient to maintain ratings higher than CFC's rating. Credit enhancement for the class B tranches was deemed to be consistent with the current ratings based on losses experienced to date and future loss expectations. Ratings on the Conseco Finance Vehicle Trust 2000-B truck transaction are downgraded as listed below and remain on Rating Watch Negative. The downgrades reflect continued deterioration in CFC's truck portfolio well outside of Fitch's original expectations. This transaction was originally placed on Rating Watch on Aug. 30, 2001 and initially downgraded on Dec. 13, 2001 due to a slowing economy, volatile fuel prices, and a decrease in transport traffic, which contributed to an increase in delinquencies and loss frequency. Cash flow from vehicle liquidation at the time had fallen short of expectations resulting from a weakening wholesale market and slower disposition timelines. Since then, loss frequency has remained high and recovery rates have shown little improvement. Fitch does not expect these conditions to improve in the near future. Fitch Ratings remains concerned with the limited financial flexibility of CFC as reflected by Fitch's current senior unsecured rating of 'CCC'. It is unclear at this point, what impact further deterioration in CFC's financial profile might have on the quality of the company's servicing operations. Fitch will continue to closely monitor CFC's various securitizations with particular emphasis on the truck and credit card portfolios as these portfolios are longer term loans (trucks) or are of a more recent vintage (credit cards). Green Tree Recreational, Equipment and Consumer Trust -- Series 1996 B class B 'B'; -- Series 1996 C class B 'B'; -- Series 1996 D class B 'B'; -- Series 1997 A class B 'B'; -- Series 1997 B class B 'B'; -- Series 1997 C class B 'B'; -- Series 1997 D class B 'B'; -- Series 1998 A class B-C, B-H 'B'; *All classes are removed from Rating Watch Negative. Conseco Finance Vehicle Trust 2000-B -- Class A-2 to 'BBB+' from 'AAA'; -- Class A-3 to 'BBB' from 'AAA'; -- Class M-1 to 'BB' from 'A'; -- Class M-2 to 'B' from 'BBB'; -- Class B from to 'CCC' from 'BBB-'; *All classes remain on Rating Watch Negative. DebtTraders reports that Conseco Finance's 8.796% bonds due 2027 (CNC10) are trading between 22 and 25. See http://www.debttraders.com/price.cfm?dt_sec_ticker=CNC10for real-time bond pricing. CORAM HEALTHCARE: Court Appoints Arlin Adams as Chap. 11 Trustee ---------------------------------------------------------------- Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware has approved the appointment of Arlin M. Adams, Esq., as the Chapter 11 Trustee for Coram Healthcare Corporation (OTCBB:CRHEQ) and Coram, Inc. Judge Adams is retired from the U.S. Court of Appeals for the Third Circuit and is of counsel to the law firm of Schnader, Harrison, Segal & Lewis in Philadelphia. "Coram's Board of Directors and management welcome the appointment of Judge Adams as Chapter 11 trustee," said Daniel D. Crowley, Coram's Chairman, President and CEO. "We believe this is the best way to complete an equitable and timely resolution of this reorganization while Coram continues to provide quality care and service to patients and customers." Coram filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code on August 8, 2000 with the support of the lenders holding Coram, Inc.'s principal debt. The Company's operating subsidiaries have continued to maintain normal patient services and business operations, paying trade creditors currently throughout the process. Denver-based Coram Healthcare Corporation, through its subsidiaries, including all branch offices, is a national leader in providing specialty infusion therapies and support for clinical trials. CROWN CORK: DebtTraders Sees Significant Value in Bonds ------------------------------------------------------- DebtTraders reports that on February 14, Crown Cork & Seal held a conference call to discuss fourth quarter and full-year 2001 results. DebtTraders analyst Matthew Breckenridge, CFA, says, "Despite what we would consider weak operating results and a lukewarm management call, we still continue to believe that there is significant value in Crown Cork & Seal, but we now find the later maturities a more attractive alternative to the earlier maturities." He continues, "Due to a significant increase in price, we recommend switching out of the 7.125% Notes due '02 and the 6.75% Notes due April 15, 2003 into later notes that have significantly lower prices. We believe that this is a prudent measure considering that we believe that management will attempt a debt restructuring that would most likely result in a partial debt-for-equity swap. We believe that the swap would result in limited upside for the near-term notes, while significant risks remain." "Following the public conference call, we had a chance to discuss with management its plan for a difficult debt amortization schedule. We have included some of the key points of that call below," Mr. Breckenridge adds. He added that with the CCK's impending sale of two pharmaceutical packaging manufacturing facilities, as announced on March 4, DebtTraders "believe[d] that the net proceeds from the sale w[ould] likely range from $55 to $65 million, or 6.0 times to 7.0 times [their] estimated $9 million in EBITDA generated from the assets." "Based upon the Company's results and our discussion with management," the DebtTraders analyst explains, "we now believe that there is significant value in later maturities, as we are now confident that the Company will not declare bankruptcy because we believe that management is working to extend the earlier maturities and extend the bank loan." Thus, a bankruptcy filing or an out-of-court restructuring proceedings would be futile, and would not be beneficial to any of the concerned parties. Mr. Breckenridge elucidates, "Because the Company is not tremendously levered (LTM debt-to-EBITDA is 6.3 times, LTM debt-to-EBITDA minus asbestos payments is 7.4 times), we believe that Crown Cork is a viable company that has an aggressive debt amortization schedule. We believe that if management can successfully negotiate a debt extension, much of the risk in the later bonds will be eliminated." According to DebtTraders, Crown Cork & Seal's 8.375% bonds due 2005 (CCK7) are trading between 69 and 71. See http://www.debttraders.com/price.cfm?dt_sec_ticker=CCK7for real-time bond pricing. DOMAN INDUSTRIES: Dec. 31 Balance Sheet Upside-Down by $241MM ------------------------------------------------------------ Rick Doman, President of Doman Industries Limited, released the Company's fourth quarter and 2001 results. These results include a write-down of capital assets, as well as a charge related to the early adoption of a new accounting standard for foreign currency translation of long-term debt, which are described in more detail below. Sales Sales for the year ended December 31, 2001 were $770.0 million compared to $955.4 million in 2000. Sales in the fourth quarter of 2001 decreased to $161.2 million from $228.4 million in the same quarter of 2000. Sales in the solid wood segment were $532.0 million for the year ended December 31, 2001 compared to $573.9 million in 2000. Solid wood sales in the fourth quarter of 2001 decreased to $118.4 million from $147.3 million in the same period of 2000, mainly as a result of lower sales realizations and volumes for lumber. Pulp sales for the year ended December 31, 2001 were $238.0 million, compared to $381.5 million in 2000. Pulp sales in the fourth quarter of 2001 decreased to $42.8 million from $81.1 million in the same period of 2000, as a result of lower sales volumes and prices. EBITDA EBITDA for the year ended December 31, 2001 decreased to $11.9 million from $166.8 million for the year ended December 31, 2000. In the fourth quarter of 2001, EBITDA was (negative) $13.0 million compared to $0.6 million in the immediately preceding quarter and $38.7 million in the fourth quarter of 2000. EBITDA for the solid wood segment in the fourth quarter of 2001 was (negative)$8.7 million compared to $18.1 million in the third quarter of 2001 and $26.9 million in the fourth quarter of 2000. Results for the fourth quarter of 2001 were adversely impacted by a $7.5 million pre-tax provision for countervailing and antidumping duties imposed by the U.S. Department of Commerce on shipments of softwood lumber to the United States in the fourth quarter. In the absence of a negotiated settlement, the final amount of duty that will apply, if any, will depend on determinations yet to be made by the United States government and by any reviewing courts, NAFTA or WTO panels. As a result of the softwood lumber dispute and in order to manage its inventory levels, the Company took extensive downtime at both its sawmill and logging operations in the fourth quarter of 2001. The average lumber price, net of the provision for duties, was $510 per mfbm in the fourth quarter of 2001 compared to $548 per mfbm in the previous quarter and $604 per mfbm in the fourth quarter of 2000. EBITDA for the pulp segment in the fourth quarter of 2001 was (negative)$2.4 million compared to $(16.3) million in the immediately preceding quarter and $13.6 million in the fourth quarter of 2000. After taking shutdown for the full third quarter, our Squamish NBSK pulp mill operated and produced 48,389 ADMT in the fourth quarter before taking market shutdown in early December as a result of continuing weak pulp markets. Our Port Alice dissolving sulphite pulp mill produced 22,097 ADMT in the fourth quarter compared to 17,588 ADMT in the third quarter but took downtime for the last six weeks of the year. Cash flow from operations for the year ended December 31, 2001, before changes in non-cash working capital was (negative)$104.3 million compared to $64.1 million for the year ended December 31, 2001. After changes in non-cash working capital, cash provided by operations was $30.5 million in 2001 compared to $27.0 million in 2000. Cash flow from operations in the fourth quarter of 2001, before changes in non-cash working capital was (negative) $52.0 million compared to $12.4 million in the fourth quarter of 2000. After changes in non-cash working capital, cash provided by operations was $24.1 million in the fourth quarter of 2001, the same as the fourth quarter of 2000. Write-down of Capital Assets and Adoption of New Accounting Standard During the past year, the Company has reviewed the carrying value of its capital assets, including its pulp mills assets, and determined that, based on economic conditions and operating plans, carrying values should be written down. As a result, as at December 3, 2001, the Company recorded a $291.7 million charge to write-down capital assets to their estimated net recoverable amounts. The Company adopted the Canadian Institute of Chartered Accountants new standard for foreign currency translation of long-term debt in the fourth quarter and restated prior quarter and prior year results to give effect to the new standard. The new standard requires that unrealized foreign exchange gains and losses on long-term debt be included in earnings in the period incurred whereas the previous standard required that unrealized foreign exchange gains or losses on long-term debt be amortized to earnings over the remaining life of the long-term debt. Prior year and quarter numbers included in this Press Release have been restated to reflect this new accounting standard. Full footnotes to the Company's financial statements will be included in the Company's Annual Statutory Report. Earnings The net loss before capital asset write-downs for the year ended December 31, 2001 was $143.6 million and after write-downs was $412.9 million, compared to a net loss of $39.8 million for the year 2000. The net loss before capital asset write-downs for the fourth quarter of 2001 was $53.4 million and after write-downs was $322.6 million, compared to a net loss of $2.6 million for the fourth quarter of 2000. Market and Operations Review Lumber prices in the U.S. as measured by SPF 2 x 4 lumber, averaged approximately US$221 per mfbm in the fourth quarter of 2001 compared to US$199 per mfbm in the same period of 2000 and US$287 per mfbm in the third quarter of 2001. The current price of approximately $290 per mfbm reflects a strong U.S. housing market with January starts at a seasonably adjusted annual rate of 1,678,000. Lumber prices in Japan improved in the fourth quarter but continuing economic problems and currency weakness remain a concern. The uncertainty created by the on-going softwood lumber dispute has resulted in major disruptions to the Company's lumber and logging operations. Recognizing that a permanent resolution may take some time, the Company supports current Canadian governmental discussions to implement an interim border tax to be levied on Canadian lumber shipped to the U.S. that sells below a threshold level. The interim measures respond to U.S. claims that low-priced commodity grade lumber from Canada competes unfairly with U.S. production and excludes high-value products that are not produced in significant quantities in the U.S. The proposals assume a resolution of softwood issues at the earliest possible date and removal of the interim border tax at that time. If a negotiated settlement is not achieved, the U.S. Department of Commerce is scheduled to deliver its final determination in both the countervail and antidumping cases in late March. In the event of affirmative rulings by the U.S. trade authorities, Canadian shippers would be required to make duty payments in cash after the end of May. The Company is unable to predict if and when the outstanding softwood trade issue will be settled or interim measures adopted or the terms thereof. NBSK pulp markets remained weak in the fourth quarter and although list prices to Europe increased marginally by US$20 per ADMT to US$470 per ADMT in December, prices have since fallen back to US$440 to US$450 per ADMT. Norscan inventories increased from 1.5 million tonnes at the end of September to 1.7 million tonnes at year end. Prices are predicted to remain depressed in the first half of 2002. Closing The Company continues to face adverse market conditions in its pulp segment. In its solid wood segment, market conditions are very unsettled as a result of the current softwood trade issue with the United States. Doman Industries Limited is a British Columbia based coastal integrated forest products company engaged in timber harvesting, sawmilling, value-added lumber re-manufacturing and the production of dissolving sulphite and kraft pulp. The Company has an annual allowable cut of approximately 4.2 million cubic metres. The Company's manufacturing plants consist of nine sawmills with a combined annual production capacity of 1.2 billion board feet, two pulp mills with an annual production capacity of 260,000 tonnes of NBSK pulp and 160,000 tonnes of dissolving sulphite pulp, a log merchandising plant, and a value added lumber re-manufacturing plant with an annual drying and production capacity of approximately 80 million board feet. At December 31, 2001, Doman Industries reported a total shareholders' equity deficit of $241 million. DOMAN INDUSTRIES: Misses Semi-Annual Payment on 8-3/4% Sr. Notes ---------------------------------------------------------------- Doman Industries Limited announces that, as a result of current industry, financial and market circumstances, including the uncertainty surrounding any settlement or interim resolution relating to the softwood lumber tariff trade dispute and depressed pulp prices, it did not make its scheduled March 15, 2002 semi-annual interest payment on its outstanding 8.75% US$388 million senior unsecured notes maturing 2004. Pursuant to the terms of the notes, the Company has 30 days to make the requisite payments, prior to it constituting an event of default. The Company will continue its ongoing operations and monitor trade and other developments closely. A further announcement will be made as required. DOMAN INDUSTRIES: S&P Junks Rating On Ongoing Liquidity Concerns ---------------------------------------------------------------- Standard & Poor's lowered its ratings on Doman Industries Ltd. to `CCC' on March 14, 2002. The rating is still on CreditWatch Negative. The downgrade stems from ongoing liquidity concerns, particularly regarding the company's upcoming C$26 million interest payment due March 15, 2002, on the 8.75% senior unsecured notes outstanding. Although Doman managed to increase liquidity during the fourth quarter of 2001, operations continue to drain cash flow as the company's funds from operations for the period were substantially more negative than during the third quarter. The company's ability to generate cash during the first quarter of 2002 remains unclear, as continuing weak demand, compounded by duties imposed pursuant to the Canada-U.S. softwood lumber dispute, has led to extensive downtime. Furthermore, the first quarter is typically a period of cash drain for forest products companies as they harvest logs and increase their receivables and inventories in expectation of the approaching building season. During fourth-quarter 2001, Doman's lumber mills operated at about 36% of capacity, while its pulp mills operated at 67% of capacity. On average through 2001, the company's lumber and pulp mills operated at around 46% and 67% of capacity, respectively. DebtTraders reports that Doman Industries Ltd.'s 12% bonds due 2004 (DOM2) are trading between 19 and 24. See http://www.debttraders.com/price.cfm?dt_sec_ticker=DOM2for real-time bond pricing. EVTC INC: Restructures Innovative Waste Tech. Asset Purchase ------------------------------------------------------------ EVTC, Inc. (Nasdaq: EVTC) announced revisions in its acquisition of the assets of Innovative Waste Technologies, LLC. The transaction will now consist of the acquisition of all of the ownership interests of IWT in exchange for a package of EVTC common stock and options to purchase EVTC common stock. The transaction will be subject to approval by the stockholders of EVTC. Management began conducting business operations as an integrated company, effective as of March 1, 2002. In a related action by EVTC's board, each of Guy Harrell and Gary Tipton, the Chief Executive Officer and Vice President of IWT, respectively, have joined the board of EVTC. In accordance with its recently announced strategic plan, EVTC has agreed in principle for the sale of its Ballast and EMC subsidiaries. Upon completion of such sales, EVTC will have substantially reduced its outstanding debt obligations. Any such transactions are subject to execution of definitive purchase documents and the approval by certain of EVTC's lenders. Full Circle, as the remaining operational division of EVTC after the sale of Ballast and EMC, plans to introduce new technologies during the current quarterly period and, in the coming weeks, to re-staff its personnel after new management is fully in place. Innovative Waste Technologies (IWT) holds patents and patent applications on technologies for wastewater, water treatment and soil remediation. These technologies provide for treating of contaminated wastewater through an electrical process and are believed to be more economical and safe than other methods presently available in a market having an estimated value of over 60 billion dollars annually. Industries to be targeted by EVTC following the acquisition of IWT are expected to include oil and gas production facilities, oil and gas refineries, major port facilities, industrial shipping companies, industrial waste water and environmental remediation projects, as well as other applicable industries. * * * As reported in the March 14, 2002 edition of Troubled Company Reporter, EVTC, Inc. (Nasdaq: EVTC) is no longer in compliance with the market capitalization requirements for continued inclusion of its securities with The Nasdaq Stock Market under Marketplace Rules 4310(C)(2)(B). As disclosed in its public filings made with the Securities and Exchange Commission during February of 2002, the staff granted the Company's request for an oral hearing before a Nasdaq Listing Qualifications Panel to hear the Company's opposition to any delisting of its securities. By its March 4th letter, the staff advised the Company that the Panel would consider additional submissions from the Company regarding its noncompliance with the market capitalization requirements when rendering a decision following the March 1, 2002 panel hearing with respect to the previously disclosed deficiencies. ENRON: Energy Debtor Intends to Sell Contracts to Constellation --------------------------------------------------------------- Irene M. Goldstein, Esq., at LeBoeuf, Lamb, Greene & MacRae LLP, in New York, relates that Enron Energy Services, Inc., contacted 12 companies who it thought would be interested in acquiring its Retail Contracts to supply power to customers located in Texas, Maine and Massachusetts. Constellation Power Source, Inc., presented the Debtors with the best offer. Enron Energy wasted no time and quickly entered into an agreement with Constellation. Under a definitive Purchase and Sale Agreement, the Debtors will assign, sell, transfer, set over and deliver to Constellation all of its right, title, benefit, privileges and interest in and to the Retail Contracts. Among the principal terms of the Purchase and Sale Agreement are: Purchase Price: The base purchase price for the Retail Contracts: (i) shall be equal to the sum of the base mid- market purchase price and the base mass- market purchase price, and (ii) shall be determined by the parties at the time of execution of the Purchase and Sale Agreement by reference to then current market prices. Based on market prices as of February 28, 2002, the Base Purchase Price would equal $57,000,000 in the aggregate and would consist of a Base Mid- Market Purchase Price of $30,200,000, which equals the sum of: (A) $7,000,000 for Texas, (B) $20,000,000 for Maine, and (C) $3,200,000 for Massachusetts, and a Base Mass-Market Purchase Price of $26,800,000, which equals the sum of: (A) $24,000,000 for Texas, and (B) $2,800,000 for Massachusetts (there are no Mass-Market Contracts in Maine). At the closing, the Base Mid-Market Purchase Price and the Base Mass-Market Purchase Price shall each be subject to an adjustment for the Retail Contracts terminated prior to closing and an index price adjustment based on the market value of the non-terminated Retail Contracts at closing. At the closing, Buyer shall pay: (a) an amount equal to the Closing Mid-Market Purchase Price less $1,000,000 to the Seller, (b) $1,000,000 to an indemnification escrow account, and (c) the Closing Mass-Market Purchase Price to a purchase price escrow account. The Base Mass-Market Purchase Price shall be subject to further adjustment 150 days following closing to reflect Retail Contracts terminated by customers or deemed terminated for customer non- payment during this 150 day adjustment period. Closing Date: The closing of the transactions contemplated under the Purchase and Sale Agreement will take place on the later of: (i) the second business day following the expiration of the ten day period following the entry by the Bankruptcy Court of the Bankruptcy Court Order, (ii) if applicable, the date of termination or expiration of all waiting periods under the Hart-Scott Rodino Act, and (iii) the satisfaction and waiver of all closing conditions. Post-Closing Indemnity: Constellation and the Debtors agree to indemnify each other for certain claims arising out of, among other things, any inaccuracy or breach of a representation or warranty contained in the Purchase and Sale Agreement, and any breach of, or default in the performance of, any covenant, agreement or obligation to be performed pursuant to the Purchase and Sale Agreement. In no event shall either party's aggregate liability under the Purchase and Sale Agreement exceed an amount equal to $1,000,000. Ms. Goldstein emphasizes that the sale of the Retail Contracts to Constellation is subject to higher and better offers -- and the Debtors would be delighted to receive superior offers. (Enron Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 609/392-0900) ENTREPORT CORP: Fails to Meet AMEX Continued Listing Standards -------------------------------------------------------------- EntrePort Corp. (AMEX: ENP), announced that the company signed a formal ACQUISITION AGREEMENT with Advanced Communications Technologies (Australia) Pty Ltd., for ENP to acquire a minority equity interest in the Australian based company and for ACT to acquire a majority interest in ENP, with funding to ENP. Full details of the transaction will be announced within the next 10 days. The agreement is subject to certain closing conditions, including but not limited to, shareholder approval, the approval of the American Stock Exchange, and the companies' completion of satisfactory due diligence. ACT is in the business of developing leading edge communications equipment technology for the wireless communications industry, and during the last four years in Australia has developed and filed several patent applications regarding a revolutionary new Software Defined Radio multiple protocol wireless base station technology known as SpectruCell. EntrePort received a notice from the American Stock Exchange that it intended to file an application with the Securities and Exchange Commission to strike the company's common stock from listing and registration on the Exchange. The American Stock Exchange staff stated that the company's financial condition and/or operating results appear to be unsatisfactory in that the company has incurred net losses of $1.9 million and $4.9 million in its past two fiscal years ended Dec. 31, 2000, as well as $8.0 million for the nine months ended Sept. 30, 2001. (Section 1002(b).) In addition, the American Stock Exchange staff stated that the company's operating results are unsatisfactory and its financial condition is impaired, raising questions about whether it will be able to continue operations or meet its financial obligations as they mature (Section 1003(a)(iv)). The staff also expressed concern about the company's stock price of 6 cents per share at March 7, 2002 (Section 1003(f)(v).) The staff further stated that the company had failed to comply with Section 132(e) in failing to furnish the Exchange with information concerning the company's progress in obtaining additional cash to fund operations and/or entering into any other arrangement that would allow the company to comply with the Exchange guidelines. Concurrent with the signing of the definitive agreement with ACT Australia, the company has appealed this determination and requested a hearing before a committee of the Exchange. There can be no assurance the company's request for continued listing will be granted. EntrePort Corp. (Amex: ENP) develops and distributes a proprietary learning management system that combines off-line and online measurable productivity training and education and delivers it six ways in order to teach people the way they learn best. By combining proven off-line training and the traditional ASP model to professional education and "learning style" research, EntrePort has created the "Learning Service Provider" (LSP) model. EXODUS COMMS: MGE UPS Systems Wants Prompt Decision on Contract --------------------------------------------------------------- Noel C. Burnham, Esq., at Montgomery McCracken Walker & Rhoads LLP in Wilmington, Delaware, informs the Court that MGE UPS Systems, Inc., is a party to various service agreements with Exodus Communications, Inc., and its debtor-affiliates. Under those Agreements, MGE maintains and services a variety of equipment in the Debtor's data centers. In connection with the sale of the Debtor's assets to Cable & Wireless, the Debtors informed MGE that these service agreements would be assigned to the Purchaser and that a cure amount of approximately $1,100,000 would be paid to MGE. At or around the time of the sale, the Debtors or the Purchaser withdrew the service agreements from the list of contracts to be assigned, but the Debtor nonetheless agreed with the Purchaser that it would provide the benefit of the service agreements to the Purchaser. Mr. Burnham believes that this 'arrangement' serves no purpose other than to postpone or avoid the cure payment that the Debtor has previously admitted is owing to MGE. This 'arrangement' is also completely inconsistent with the practical realities of the post-sale relationship between MGE and the Purchaser. The equipment that MGE services and the data centers in which the equipment is located are owned by the Purchaser. When this equipment needs to be serviced, it is the Purchaser (not the Debtors) that requests the service. Mr. Burnham points out that the Purchaser has even gone so far as to inform MGE that its agreements have been assigned to the Purchaser and has proposed new terms and conditions. There is nothing in the Bankruptcy Code that provides that a debtor may, instead of assuming and assigning a contract to a purchaser, require the contract party (i.e., MGE) to provide services under the contract for the purchaser of the debtor's assets. Finally, the Debtor's 'arrangement' puts MGE in a legally uncomfortable position because it is unclear what the parties' rights are vis-a-vis one another. For example, if the Purchaser believes it has a claim against MGE on account of MGE's work, does the Debtor assert that claim against MGE on the Purchaser's behalf or does the Purchaser assert it directly against MGE? And, is the Purchaser bound by any limitations on damages in the contracts between MGE and the Debtor? Mr. Burnham submits that there is no valid reason for delaying the decision to assume or reject these service agreements. The Debtor and the Purchaser should not be allowed to consummate the sale of the Debtor's assets on the back of MGE. The MGE service agreements need to be immediately assumed or rejected, and, if assumed, the cure amounts that the Debtor has admitted are owing thereunder need to be paid. Mr. Burnham notes that not only is MGE in doubt as to the status of the MGE Agreements vis-a-vis the Debtor's estate, but the Debtor's actions with respect to the MGE Agreements have no basis in reality and appear to be designed solely to postpone or avoid the payment of a cure amount to MGE that the Debtor has admitted is owing to MGE. The Debtor's actions are not sanctioned by the Bankruptcy Code; the Code is clear that in order for a contract to be assigned to a purchaser, the debtor must assume it and then assign it; the debtor cannot sell the assets to which the contract relates and then agree to make the benefits of the contract available to the purchaser and avoid the cure payment thereunder. Mr. Burnham tells the Court that it is unfair for the Debtor to seek, through a legal fiction that has no basis in reality, to evade its responsibilities under the Bankruptcy Code and to deprive MGE of a cure payment, which it is owed. Also, the Debtor's actions have increased MGE's risk because the parties are in an uncertain legal relationship vis-a-vis one another. MGE requests therefore, that this Court enter an Order pursuant to Sec. 365(d)(2) of the Bankruptcy Code compelling the Debtor to immediately assume or reject the MGE Agreements. (Exodus Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 609/392-0900) FEDERAL-MOGUL: Wants Lease Decision Deadline Moved to October 1 --------------------------------------------------------------- Federal-Mogul Corporation, and its debtor-affiliates request the entry of an order, pursuant to section 365(d)(4) of the Bankruptcy Code, granting a further extension of the period in which they may elect to assume, assume and assign, or reject non-residential real property leases. The Debtors ask for an extension through and including October 1, 2002, without prejudice to their right to request a further extension. James E. O'Neill, Esq., at Pachulski Stang Ziehl Young & Jones P.C. in Wilmington, Delaware, informs the Court that the approximately 90 leases to which the Debtors are parties cover a number of the Debtors' significant facilities. Moreover, immediately after the Petition Date, the Debtors' management and professionals were consumed with effecting a smooth transition to the chapter 11 environment, including responding to information requests and concerns of the Committees and various creditor constituencies, handling the typical business emergencies that occur immediately following the commencement of a chapter 11 case of a large operating company, and addressing the Debtors' initial reporting requirements. During the first extension period granted by the Court, the Debtors' management and professionals have expended considerable energies on employee retention issues, addressing the transfer litigation pending before Judge Wolin, resolving issues raised by numerous parties-in-interest, and commencing negotiations aimed at the formulation of a consensual plan of reorganization in these cases. Mr. O'Neill points out that the Debtors' management and professionals have also been able to turn their attention to moving forward with the Debtors' reorganization business plan during the First Extension Period. In particular, as part of the Debtors' reorganization business plan, the Debtors are in the process of: A. consolidating their facilities to eliminate redundancies and inefficiencies, and B. shifting certain manufacturing efforts to portions of the country and the world more suitable to the Debtors' businesses. Mr. O'Neill adds that the Debtors are in the process of evaluating each and every leased facility and the surrounding market for alternative space to determine whether it would be beneficial to move from any of their leased facilities and/or whether there would be an opportunity to obtain modifications to the terms of existing leases with their landlords. The Debtors anticipate that the foregoing process will fake at least an additional 6 months beyond April 1, 2002. Pending the Debtors' election to assume or reject the Real Property Leases, Mr. O'Neill assures the Court that the Debtors will perform all of their obligations arising from and after the Petition Date in a timely fashion, including payment of postpetition rent due, as required by section 365(d)(3) of the Bankruptcy Code. As a result, there should be little or no prejudice to the Lessors as a result of the requested extension. (Federal-Mogul Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 609/392-0900) GIMBEL VISION: Bob McInnes Resigns as Director Effective Mar. 13 ---------------------------------------------------------------- Gimbel Vision International Inc. announced today that Mr. Bob McInnes has resigned as a director of GVI effective March 13, 2002. A director of GVI since 1995, Mr. McInnes has resigned to attend to other business commitments. "On behalf of the board, I would like to thank Mr. McInnes for his service and dedication and extend our best wishes to him in the future," said Clifford James, Chairman of the Board of Directors. "During the seven years that Mr. McInnes served on the board, he made many valuable contributions to GVI." Gimbel Vision International Inc. is a public Corporation that owns or is partnered with refractive vision correction centres in Canada, the United States, Thailand and China. To date, GVI's surgeons have performed over 80,000 refractive eye surgeries. Gimbel Vision International Inc. shares are listed on the Canadian Venture Exchange and trade under the symbol "GBV". * * * As reported in the Dec. 5, 2001 edition of Troubled Company Reporter, Gimbel Vision's Eugene, Oregon, USA laser eye surgery centre defaulted under its lease agreement with Hillside Financial International LLC with respect to the lease of a surgical laser. The default resulted from declining financial results of the centre and, as a consequence of the declining results, delinquent lease payments. Among other effects of the default, the lessor has the right to declare the remaining approximate $445,000 balance of the lease, for which the Corporation is a guarantor, immediately due and payable. The Corporation is in discussion with the lessor in an attempt to remedy this situation. Under terms of the aforementioned lease, the Corporation could be in cross-default of other agreements with certain other of its creditors. The future success of the Corporation depends on the continued support of these and other creditors. GLOBAL CROSSING: Ray L. Olofson Sues Officers & Directors --------------------------------------------------------- Ray L. Olofson filed a lawsuit against Gary C. Winnick, Joseph P. Perrone, Dan J. Cohrs, and Thomas Casey of Global Crossing Ltd., in the United States District Court for the Central District of California. Mr. Olofson asserts five causes of action for: A. Violation of ERISA; B. Defamation; C. Intentional interference with contract; D. Negligent interference with contract; E. Intentional interference with prospective economic advantage; F. Negligent interference with prospective economic advantage; Brian C. Lysaght, Esq., at O'Neill Lysaght & Sun LLP in Santa Monica, California, explains that this case is about attempts by the defendants to artificially prop up the price of defendant Global Crossing Ltd.'s stock by engaging in misleading transactions and accounting methods which gave the appearance that Global Crossing Ltd. was generating hundreds of millions of dollars in sales and cash revenues that did not actually exist. After plaintiff learned of the misleading transactions and accounting methods, he confronted defendants and their response was shocking. Fearful that their scheme to artificially prop up the price of the stock would be revealed to the public, defendants first attempted to force plaintiff to participate in actions, which could have been interpreted as implicating him in the conspiracy. When plaintiff refused, Mr. Lysaght claims that defendants caused plaintiff to be fired. Further, after defendants' scheme was made public, plaintiff was publicly accused of extortion. Plaintiff has therefore suffered damage in numerous ways, including general, special and presumed damages for defamation, and damages arising from defendants' interference with contract and interference with prospective economic relations, and a substantial reduction in the value of Plaintiff's retirement savings plan which has been rendered largely worthless as a consequence of defendants' scheme. In addition to their other fiduciary duties, Mr. Lysaght submits that ERISA fiduciaries have a duty not to mislead participants, and a duty to voluntarily disclose truthful information in order to ensure that participants have all information needed to exercise rights under the Savings Plan. The defendants repeatedly breached the fiduciary duties they owed Plaintiff when they: A. offered Global Crossing Ltd. stock as an investment option for employee contributions to the Savings Plan; B. encouraged and induced employees to invest their plan contributions and Global Crossing Ltd. stock including a matching program that, as of January 1, 2001, was limited to Global Crossing Ltd. stock; and C. made both intentional and negligent misrepresentations regarding the value of the stock, the prospects of Global Crossing Ltd., and in particular misrepresentations and omissions regarding the purpose and value of various transactions as herein alleged, which had the effect of overstating "Cash Revenues" and "Adjusted EBITDA." As a consequence, Global Crossing Ltd. stock was not a prudent investment and defendants knew that. Mr. Lysaght tells the Court that each of the defendants knowingly participated in these fiduciary breaches, enabled their co-fiduciaries to commit such fiduciary breaches by their own failure to comply with the provisions of 29 U.S.C. 1104(a). Each defendant had knowledge of the breaches of their co- fiduciaries and failed to make reasonable efforts to remedy such breaches. The breaches of fiduciary duty give rise to the presumption that, but for the breaches of fiduciary duty, the participants and beneficiaries in the Savings Plan including Plaintiff would not have maintained their investment in Global Crossing Ltd. and would have instead moved their plan assets to the most profitable alternative investment available. As a direct and proximate result of the defendants' wrongful conduct as herein alleged, Plaintiff has been damaged in the form of lost value of his Global Crossing Ltd. stock in the Savings Plan. Mr. Lysaght contends that on February 15, 2002, Global Crossing Ltd. convened a "town hall" meeting at its offices in Beverly Hills. In attendance were approximately 60-70 employees who worked at the Beverly Hills offices of Global Crossing Ltd. and Global Crossing Development Company. During that meeting, defendant Winnick publicly accused Plaintiff of extortion by stating in sum or substance that, "The definition of an extortionist is Roy Olofson." This statement is false, defamatory and constitutes slander per se. As a direct and proximate result of the above-described slanderous statement, Mr. Lysaght relates that Plaintiff has suffered harm to his reputation, shame, mortification and hurt feelings all to his general and specific damage in an amount to be proven at trial. The conduct was done with the intent to deprive Plaintiff of his legal rights and property, and to otherwise cause injury to Plaintiff, all of which constitutes despicable conduct, which subjected Plaintiff to cruel and unjust hardship in conscious disregard of his rights. This malicious and oppressive conduct warrants the imposition of exemplary and punitive damages. On April 14, 1998, Mr. Lysaght states that Plaintiff and Global Crossing Development Company entered into a written contract of employment. Beginning on or after Plaintiff's conversation on June 1, 2001 with Perrone and continuing through December 2001, defendants intentionally interfered with the Employment Contract by, inter alia, falsely advising management that Plaintiff's allegation was unjustified and had been raised for an improper purpose. Defendants' intentional interference with the Employment Contract was done to facilitate their plan and scheme to keep the price of Global Crossing Ltd.'s stock artificially high and with the knowledge and intent that their actions would actually interfere with Plaintiff's Employment Contract. According to Mr. Lysaght, beginning on or about April 14, 1998, Plaintiff and Global Crossing Development Company entered into an economic relationship, which economic relationship had the probability of future economic benefits to Plaintiff. Defendants had knowledge of the existence of the foregoing economic relationship. Beginning on or after Plaintiff's conversation on June 1, 2001 with Perrone and continuing through December 2001, defendants intentionally attempted to disrupt the economic relationship between Plaintiff and Global Crossing Development Company in the manner hereinabove alleged. Defendants' actions were independently wrongful because they were false and fraudulent, constituted securities fraud, and otherwise constituted unfair competition in violation of Business and Professions Code section 17200, et seq. In December 2001, Mr. Lysaght relates that defendants succeeded in actually disrupting the economic relationship alleged above by causing Plaintiff to be terminated retroactive to November 30, 2001. This disruption was a direct and proximate result of defendants' intentional interference as herein alleged. As a direct and proximate result of defendants' intentional interference, Plaintiff has been damaged in the form of lost salary, lost bonuses, and other lost employment benefits, the full value of which will be determined at trial. The aforementioned conduct was done with the intent to deprive Plaintiff of his legal rights and property, and to otherwise cause injury to Plaintiff, all of which constitutes despicable conduct which subjected Plaintiff to cruel and unjust hardship in conscious disregard of his rights. Mr. Lysaght contends that this malicious and oppressive conduct warrants the imposition of exemplary and punitive damages. Unless restrained, defendants threaten to continue to disrupt Plaintiff's business relationships with Global Crossing Development Company and with other prospective employers to Plaintiff's great and irreparable injury, for which damages would not afford adequate relief, in that they would not completely compensate for the injury to Plaintiff's business reputation and goodwill. (Global Crossing Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900) GRAHAM PACKAGING: Selling 2 Italian Operations to Serioplast ------------------------------------------------------------ As part of a continuing restructuring of its European business, Graham Packaging Company, L.P., announced it has signed an agreement to sell two Italian manufacturing operations, the Societa Imballaggi Plastici S.r.l. in Campochiaro and Graham Packaging Italy S.r.l. in Sovico, to Serioplast S.P.A. Terms of the sale were not disclosed. Graham Packaging, a global producer of customized blow-molded plastic containers for branded food and beverage products, household and personal-care products, and automotive lubricants, has owned and operated the facilities in Campochiaro and Sovico since 1992. "We are pleased that Serioplast, a well-known Italian blow- molding company, is acquiring the plants and that they will continue to produce blow- molded bottles for the household and personal-care markets," said Ashok Sudan, vice president and general manager of Graham Packaging Europe. "We appreciate the fine effort the employees have given us over the last decade and wish them much success in the future." Over the past two years Graham Packaging has strengthened its management team in Europe, invested approximately (US) $50 million in European locations, and focused its most productive technology on key strategic customers. The company opened new plants in Poland and Spain and expanded a plant in Belgium in 2001, and plans to open a new plant in France later this year. It is in the process of closing a manufacturing plant in Wrexham, Wales. "As a natural and necessary part of global business, there will always be facilities opening and closing in various places around the world," said Philip R. Yates, chief executive officer of Graham Packaging. "As we go forward, Graham Packaging will continue to focus on doing business with major, strategic customers, those who value the capabilities of a global supplier. In order to achieve a competitive advantage for our customers, we will continue to focus on plants using the latest, high-output technologies and will locate these plants on site with our customers wherever possible." Graham Packaging employs approximately 4,000 people at nearly 60 plants throughout North America, Europe, and Latin America and produces more than six billion containers per year. Worldwide sales for the 12 months ending in September 2001 were approximately $900 million. At July 1, 2001, the company reported that its total liabilities eclipsed its total assets by about $400 million. GUILFORD MILLS: Wins Court Nod to Employ Togut Segal as Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approves the retention and employment of Togut, Segal & Segal LLP, under a general retainer, as bankruptcy counsel for Guilford Mills, Inc., and its chapter 11 debtor-affiliates. As Counsel to the Debtors, Togut will be: a) assisting in the preparation of financial statements, schedules of assets and liabilities, statement of financial affairs, and other reports and documentation required by the Bankruptcy Code; b) representing the Debtors at hearings on matters pertaining to their affairs as debtors-in-possession; c) prosecuting and defending litigated matters that may arise during these chapter 11 cases; d) negotiating, formulating, and confirming a plan or plans of reorganization for the Debtors; e) counseling and representing the Debtors concerning the assumption or rejection of executory contracts and leases, administration of claims, and numerous other bankruptcy related matters arising from these cases; f) performing such other bankruptcy services that are desirable and necessary for the efficient and economic administration of these chapter 11 cases. Togut will charge the Debtors for services at its customary hourly rates: $510 to $625 per hour for partners and $100 to $425 per hour for paralegals and associates. Guilford Mills, Inc., a world-wide producer and seller of warp knit, circular knit, flat-woven and woven velour fabric filed for chapter 11 protection on March 13, 2002. Albert Togut, Esq. at Togut, Segal & Segal LLP, represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $551,064,000 in total assets and $409,555,000 in total debts. HQ GLOBAL: Seeks Approval to Obtain $30 Million DIP Facility ------------------------------------------------------------ HQ Global Holdings Inc. and its debtor-subsidiaries ask the U.S. Bankruptcy Court for the District of Delaware for authority to tap into a $30,000,000 DIP Facility on an interim basis and schedule a final hearing with respect to the DIP Facility to give them access to the full amount to fund on-going working capital needs. The Debtors argue that obtaining access to postpetition financing to service their customers is important to continue their ordinary course business operations. Immediate access to postpetition financing will gain public confidence that the Debtors have more than sufficient resources available to maintain their operations. The Debtors also mention that the financing facility will afford them to achieve certain strategic business decisions to maximize the value of their estates for all stakeholders. Under the Debtor in Possession Revolving Credit Agreement, by and among HQ Global, as borrower, HQ Holdings and the other Debtors, as guarantors, and BNP Paribas, for itself, as administrative agent, the Debtors intend to borrow $30,000,000 as postpetition credit facility. Pending a DIP Facility final hearing, the Debtors wants the Court to authorize them to obtain interim loans under the DIP Facility in an amount not to exceed $10,000,000. HQ Global Holdings Inc., one of the largest providers of flexible office solutions in the world, filed for chapter 11 protection on March 13, 2002. Daniel J. DeFranceschi, Esq. at Richards, Layton & Finger, P.A. and Corinne Ball, Esq. at Jones, Day, Rtavis & Pogue represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed an estimated assets of more than $100 million. HAYES LEMMERZ: Gets OK to Hire Lazard Freres as Fin'l Advisors -------------------------------------------------------------- Hayes Lemmerz International, Inc., and its debtor-affiliates obtained a Court order authorizing their employment and retention of Lazard Freres & Co. LLC as financial advisors and investment bankers, nunc pro tunc to the Petition Date. The professional services that Lazard will render to the Debtors as reasonably requested are expected to include: A. Review and analyze the Debtors' business, operations and financial projections; B. Evaluate the Debtors' potential debt capacity in light of its projected cash flows; C. Assist in the determination of an appropriate capital structure for the Debtors; D. Assist in the determination of a range of values for the Debtors' on a going concern and liquidation basis; E. Advise the Debtors on tactics and strategies for negotiating with its various groups of Creditors and/or other stakeholders; F. Render financial advice to the Debtors and participate in meetings or negotiations with Creditors and/or other stakeholders in connection with any Restructuring Transaction; G. Advise the Debtors on the timing, nature, and terms of any new securities, other consideration or other inducements to be offered to its Creditors and/or other stakeholders in connection with any Restructuring Transaction; H. Assist the Debtors in preparing any documentation required in connection with the implementation of a Restructuring Transaction; I. Provide financial advice and assistance to the Debtors in developing and obtaining confirmation of a plan of reorganization, as the same may be modified from time to time; J. Assist the Debtors with respect to any potential sale of any subsidiaries, divisions or assets to a third party resulting in a Business Combination, including assistance and advice with respect to the structure of and negotiations relating to the Sale Transaction and participation in any solicitation and marketing efforts that may be undertaken by the Debtors related to the Sale Transaction, including preparation of solicitation materials or similar documents and contact with third parties in connection with the Debtors' marketing efforts; K. Assist in arranging financing for the Debtors; L. Advise and attend meetings of the Debtors' Board of Directors and committees; M. Provide testimony, including expert testimony where warranted, in any proceeding in any judicial forum; and N. Provide the Debtors with other customary general restructuring advice. The Debtors have been advised that fees for the services rendered in these cases will be as follows: A. Monthly Advisory Fees - The Debtors shall pay Lazard a monthly financial advisory fee of $200,000 in cash for each month during Lazard's engagement. Monthly Advisory Fees paid or payable during the first 12 months of Lazard's engagement under the Engagement Letter shall be credited against the Restructuring Transaction Fee. Monthly Advisory Fees incurred after the first 12 months of Lazard's engagement under the Engagement Letter shall not be credited against any fee payable under the Engagement Letter; B. Restructuring Transaction Fee. In the event the Debtors consummate a Restructuring Transaction, the Debtors shall pay Lazard a Restructuring Transaction fee in the amount of $8,800,000 in cash, payable promptly upon closing of such Restructuring Transaction; C. Sale Transaction Fees: a. If, whether in connection with the consummation of a Restructuring Transaction or otherwise, the Debtors consummate a Sale Transaction incorporating all or substantially all of their assets of the majority of the Debtors' equity interests, Lazard shall act as the investment banker in connection therewith. Lazard's compensation for such services shall be the Monthly Advisory Fees and the Restructuring Transaction Fee. b. In the event that the Debtors consummate a Sale Transaction relating to certain of the Debtors' business lines, divisions or operating groups, the Debtors shall pay Lazard a fee in cash based on the Aggregate Consideration. Any Limited Sale Transaction in which Lazard does not act as the investment banker will not result in a cash fee payable to Lazard. One- half of any Limited Sale Transaction Fee shall be credited against any subsequently payable Restructuring Transaction Fee; and c. Any fee described above shall be paid upon closing of the applicable Sale Transaction, provided that Lazard recognizes that is must comply with any applicable provisions of the Bankruptcy Code. Barry W. Ridings, Managing Director of Lazard Freres & Co. LLC, states that the Firm also will seek reimbursement for reasonable out-of-pocket expenses, and other fees and expenses, including reasonable expenses of counsel, if any. Lazard will follow its customary expense reimbursement guidelines and practices in seeking expense reimbursement from the Debtors. As part of the overall compensation payable to Lazard under the terms of the Engagement Letter, the Debtors have agreed to certain indemnification and contribution obligations. Lazard and the Debtors believe that such provisions are customary and reasonable for financial advisory and investment banking engagements, both out-of-court and in chapter 11. (Hayes Lemmerz Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-0900) HICKMAN EQUIPMENT: Court Taps PricewaterhouseCoopers as Receiver ---------------------------------------------------------------- Effective, immediately, PricewaterhouseCoopers Inc. is the Receiver of Hickman Equipment (1985) Limited having been appointed by the Supreme Court of Newfoundland and Labrador. The Receiver will take possession of the assets of the Company and will determine the optimal means of liquidating its property in the best interests of creditors. A stay of proceedings remains in effect so that the work of the Receiver can occur in an orderly manner. On February 7, 2002, the Company obtained an order under the Companies' Creditors Arrangement Act. The CCAA order gave the Company the flexibility it needed to try to reorganize its affairs. Since that time the Company has arranged for Ontrac Equipment Services Inc. to establish itself as the John Deere dealer for Newfoundland and Labrador in the former Company locations at Mount Pearl, Grand Falls, Corner Brook and Goose Bay. Said Hubert Hunt, Executive Vice-President of the Company; "We are pleased that since February 7 a John Deere dealership has been re-established in Newfoundland and Labrador. Many former employees have been rehired and our customers are obtaining the service that they require. Now we have decided that the best means of completing the liquidation of the Company's assets is through a Court-appointed Receiver; accordingly, we applied to the Court for the appointment of the Receiver. We will work with PricewaterhouseCoopers to ensure that creditors receive the maximum return possible." The Company is separate and distinct from other Hickman companies in Newfoundland and Labrador. Albert Hickman, Chairman of the Hickman Group of Companies, said: "Our other companies are unaffected by this action. For Hickman Motors, Hickman Saturn Saab Isuzu, Hickman Leasing and Terra Rent-A-Car, it is business as usual." ICG COMMS: Enters Bond & Letter of Credit Pact with Wells Fargo --------------------------------------------------------------- ICG Communications, Inc. and its subsidiaries and affiliates, Debtors, represented by Marion M. Quirk, Esq., at Skadden Arps Slate Meager & Flom LLP, ask Judge Walsh for approval and authorization (i) to enter into a performance bond and letter of credit agreement, and (ii) for relief from stay to permit future setoff. On or about March 2, 2002, Debtor ICG Telecom Group, Inc. entered into a network services agreement with a large Internet Service Provider. Due to "certain confidentiality provisions" the Debtors refuse to name the particular ISP in this Motion. Pursuant to the ISP Agreement, ISP will purchase certain telecommunications services from Telecom on a monthly basis. Under the ISP Agreement, the Debtors are required to obtain a performance bond in the amount of $2.4 million, which represents the Debtors' anticipated monthly revenue under the ISP Agreement. While the Debtors believe that entering into the ISP Agreement constitutes an ordinary course of business transaction and thus that court approval of such agreement is not required, the Debtors tell Judge Walsh they bring this Motion from an abundance of caution. Accordingly, the Debtors negotiated the terms and conditions of a performance bond in the amount of $2.4 million with Principal and Travelers Casualty and Surety Company. The Debtors regularly execute performance bonds in the ordinary course of business. However, out of an abundance of caution, the Debtors ask Judge Walsh's authority to enter into the Performance Bond. As a condition to executing the Performance Bond, Travelers required the Debtors to obtain a letter of credit to secure the Debtors' payment obligation with respect to such bond. Accordingly, the Debtors negotiated the terms and conditions of an irrevocable standby letter of credit with Wells Fargo Bank. As security for the Letter of Credit, the Debtors were required to pledge approximately $2.4 million of Debtor ICG Holdings, Inc.'s cash collateral. Accordingly, in order to comply with Travelers' conditions for providing the Performance Bond, the Debtors seek this Court's authority to execute the Letter of Credit. In addition, the Debtors seek relief from the automatic stay to permit Wells Fargo to offset any future advances made on the Letter of Credit against the Security. The Debtors are unable to procure a performance bond without posting a letter of credit to support the bond and securing the letter of credit with cash. The Debtors have negotiated the Performance Bond at arm's length and pursuant to their business judgment, which is to be accorded so long as it does not run afoul of the provisions of and policies underlying the Bankruptcy Code. The Performance Bond and Letter of Credit clearly satisfy the business judgment standard. The ISP Agreement is highly beneficial to the Debtors. The ISP Agreement, among other things, expands the Debtors' telecommunications network, increases the Debtors' revenues, and establishes the Debtors' relationship with one of the largest Internet Service Providers. The ISP would not enter into the ISP Agreement unless the Debtors obtained a performance bond. Likewise, Travelers would not provide a performance bond unless the Debtors obtained a letter of credit. In addition, the Performance Bond and Letter of Credit are the product of arms' length negotiation between the Debtors and Travelers and Wells Fargo, respectively. Accordingly, the Debtors believe that entering into the Performance Bond and executing the Letter of Credit are in the best interests of the Debtors' estates, creditors and other parties in interest. The Debtors further argue that relief from the automatic stay to allow Wells Fargo to offset any future advances made on the Letters of Credit against the Security is appropriate under section 362(d)(i) because, until the Letter of Credit expires, there is no available equity in the Security for the benefit of the Debtors. In addition, unless and until the pledged Security becomes available to the Debtors, such security is not necessary for the Debtors' effective reorganization. Finally, Wells Fargo will not execute the Letter of Creditor, which is critical to the Debtors' ability to obtain the Performance Bond, and, therefore, to perform its obligations under the ISP Agreement, absent the grant of such relief. (ICG Communications Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 609/392-0900) IFCO SYSTEMS: Won't Make Interest Payment on 10-5/8% Sr. Notes -------------------------------------------------------------- IFCO Systems N.V. (Nasdaq:IFCO)(Frankfurt:IFE) announced that it will not make an interest payment of EUR10.625 million on its 10-5/8% Senior Subordinated Notes due 2010. This interest payment is due on March 15, 2002. IFCO has taken this step in light of the commencement of discussions with its bondholders concerning a consensual reorganization of the Company's balance sheet to reduce its debt and interest burdens. Under the indenture governing the notes, IFCO has 30 calendar days to make the interest payment before an "event of default" under the indenture will have occurred. IFCO has previously announced that it has retained ING Barings Limited as its exclusive financial advisor concerning the EUR200 million, 10- 5/8% Senior Subordinated Notes due 2010. Together with ING Barings Limited, its financial advisor, the Company intends to explore with its bondholders various options to reduce its total debt burden as well as its interest payment obligations. IFCO intends to operate its business and satisfy its obligations consistent with its normal business practices. IT GROUP: Committee Signs-Up The Bayard Firm as Co-Counsel ---------------------------------------------------------- The Official Committee of Unsecured Creditors, in the chapter 11 cases of The IT Group, Inc., and its debtor-affiliates, seeks to appoint and retain The Bayard Firm, P.A. as its co-counsel. John J. Hale, Committee Co-Chair, tells the Court that the Committee's selection of Bayard is based on the firm's experience and knowledge and because of the absence of any conflict of interest. The Committee expects Bayard to: A. provide legal advice with respect to the Committee's powers and duties; B. assist in the investigation of the Debtors' acts, conduct, assets, liabilities, and financial condition, the operation of the Debtors' businesses, and any other maters relevant to the case or to the formulation of a plan of reorganization or liquidation; C. prepare, on behalf of the Committee, necessary applications, motions, complaints, answers, orders, agreements and other legal papers; D. review, analyze, and respond to all pleadings filed by the Debtors and appear in the court to represent necessary motions, applications and pleadings and to otherwise protect the interest of the Committee; and, E. perform all other legal services for the Committee that may be necessary and proper in these cases. The primary attorneys and paralegals expected to represent the Committee and their corresponding rates are: Professional Rate -------------------- ------------ Jeffrey M. Schlerf $350/hr Eric M. Sutty $225/hr Anthony M. Saccullo $190/hr Pamela Polack (paralegal) $125/hr Bayard advised the Committee that the firm may have previously represented or opposed, may currently or in the future represent or oppose, in matters totally unrelated to these chapter 11 cases, entities that are claimants of the Debtors or other parties in interest. The Bayard Firm's past and current clients in matters unrelated to the Debtors' Chapter 11 cases are the following: Allstate Life Insurance Company, The Bank of New York, Bank of Nova Scotia, Citicorp, Comerica Bank, Credit Lyonnais, Fluor Daniel Environmental Services, First Union Bank, Goldman Sachs & Company, Merrill Lynch, Societe Generale.In addition, the firm's past and current parties that Bayard may be currently, or in the past may have been, adverse to in matters unrelated to the Debtors' Chapter 11 cases, include: the Bank of New York, First Union Bank, Merrill Lynch and affiliates, Xerox Corp., Stone & Webster. (IT Group Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900) IASIAWORKS INC: PricewaterhouseCoopers Bows-Out as Accountants -------------------------------------------------------------- On March 7, 2002, PricewaterhouseCoopers LLP resigned as independent accountants of iAsiaWorks, Inc. The reports of PricewaterhouseCoopers LLP on the financial statements for the past two fiscal years contained no adverse opinion or disclaimer and were not qualified or modified as to uncertainty, audit scope or accounting principle. iAsiaWorks has not yet engaged new independent accountants. iAsiaWorks works for businesses that want to work in Asia. The company provides data center services to businesses that include Digital Island and DoubleClick, targeting customers that are establishing or extending their operations within the Asia/Pacific region, primarily in Hong Kong and Taiwan. It also serves Asian businesses looking to move into US markets. Formerly AUNET, the company has expanded through acquisitions, including AT&T EasyLink Services Hong Kong, Silicon Valley-based Web Professionals, and Australia's Cyberhost. Newbridge Capital Group and Institutional Venture Partners are among the firm's investors. In 2001 the company divested all operations in Korea. At June 30, 2001, the company had a working capital deficit of about $33 million. INTEGRATED HEALTH: Seeks Okay to Transfer Indianapolis Facility --------------------------------------------------------------- Integrated Health Services, Inc., and its debtor-affiliates, including Cambridge Group of Indiana, Inc., move the Court, pursuant to sections 105(a), 363(b), and 365(a) and (b) of the Bankruptcy Code, and Rules 6004 and 6006 of the Bankruptcy Rules, for authority to divest of a facility known as "Integrated Health Services of Indianapolis at Cambridge" which is located at 8530 Township Line Road, Indianapolis, IN 46260, and to transfer it to Cambridge Manor, L.L.C. Specifically, the Debtors seek approval of (1) a Transfer Agreement, by and among the Transferor, Cambridge Manor, L.L.C., and Mediplex of Indiana, Inc., the Landlord; (2) a Stipulation and Order Among Debtors, the United States of America, and Cambridge Manor, L.L.C. regarding the transfer of the Facility (the Medicare Stipulation); and (3) the Debtors' assumption and assignment of the Transferor's Medicare provider number and provider reimbursement agreement to the New Operator. The Facility's projected year 2002 EBITDAR is $596,143. After payment of rent in the amount of $1,777,787, however, the Facility would have pro-forma EBITDA of negative $1,181,644. Moreover, in light of the magnitude of the negative EBITDA for this Facility, Debtors believe that it is not feasible to bring this Facility into profitability by means of rent concessions or any other means. Therefore, the Debtors concluded that the Facility was of little or no value to the Debtors' estates. The Debtors previously sought to reject the Facility Lease. The Landlord filed a Limited Opposition to the Debtors' Rejection Motion. Thereafter, the Debtors, the Landlord and the New Operator, successfully concluded an arms-length negotiation of the terms of the Transfer Agreement, pursuant to which, (among other things), (i) New Operator agreed to assume operational responsibility for the Facility, and (ii) the parties agreed to terminate the Facility Lease. New Operator has elected to accept an assignment of the Transferor's Medicare provider number, and together with the Transferor, entered into the Medicare Stipulation with the United States and the Debtors which provides for the Debtors' assumption and assignment of the Transferor's Medicare provider number to New Operator. The Transfer Agreement The Transfer Agreement governs the transition of the Facility to New Operator in accordance with applicable state and federal law, and provides for the termination of the Facility Lease. With respect to IHS' Guaranty of the obligations of the Transferor, the Landlord and the FINOVA Capital Corp. have agreed to release IHS from any and all rights, claims, demands, causes of action and judgments which they may have against IHS arising from or related to the agreements. The Transfer Agreement provides for: (i) the transfer to New Operator of all resident lists and records (to the extent transferable in accordance with applicable law) as the same shall exist at the Effective Time, and originals or copies of all of Transferor's books and records (but excluding data on computer software, other than resident records) pertaining solely to the foregoing; (ii) the transfer of Resident Trust Funds; (iii) the employment of Transferor's employees; (iv) the disposition of unpaid accounts receivable; (v) access to the Transferor's records; (vi) the rejection, and the assumption and assignment of vendor, service and other agreements to which Transferor or IHS is a party; (vii) the use of leased personal property located at the Facility; and (viii) and the preparation and filing by the Transferor of final Medicare and Medicaid cost reports. The Transfer Agreement grants New Operator the option of assuming the Transferor's Medicare provider number and provider reimbursement agreement (the Medicare Provider Agreement) and Medicaid provider number and provider reimbursement agreement (the Medicaid Provider Agreement). In the event that New Operator makes such an election, and the Transferor assumes and assigns the Medicare Provider Agreement to the New Operator, the New Operator must assume and satisfy those obligations and liabilities under said Medicare Provider Agreement which arise after the Effective Time. If any payments are required in order to cure any defaults as a condition to New Operator's assumption of the Medicare Provider Agreement, then New Operator is required to pay those sums. In this case, New Operator has elected to accept an assignment of the Transferor's Medicare Provider Agreement, and the United States has calculated that no Cure Payment is required. New Operator has assumed responsibility for obtaining its own Medicaid Provider Agreement. New Operator assumes all risk arising out of failure to obtain new Medicare and/or Medicaid provider numbers or agreements with respect to the Facility. New Operator has agreed not to discharge or cause the discharge of any Medicare or Medicaid beneficiaries who are residents or patients of the Facility immediately prior to the Effective Time by reason of New Operator's inability to bill Medicare or Medicaid with respect to such residents or patients. New Operator further agrees to indemnify Transferor and IHS from and against all damages, claims, losses, penalties, liabilities, actions, fines, costs and expenses incurred by Transferor which arise out of New Operator's failure to accept assignment of the Medicare and/or Medicaid Provider numbers or agreements, including, but not limited to, the discharge from the Facility of any Medicare or Medicaid beneficiary who was, immediately prior to the Effective Time, a resident or patient of the Facility, and New Operator's failure to deliver adequate or timely notice of the rejection of the Provider Agreements in accordance with applicable state and federal laws. The Medicare Stipulation The Medicare Stipulation provides for the Debtors' assumption and assignment of the Medicare Provider Agreement to the New Operator. No Cure Payment is required, and all claims under the Medicare Provider Agreement that CMS has against Debtors and/or New Operator for monetary liability arising under the Medicare Provider Agreement before the Effective Date are satisfied, discharged and released upon the Effective Date. The Debtors submit that the transfers of property, and the actions which are described in the Transfer Agreement, are prudent and appropriate, and that entering into the Transfer Agreement represents an exercise of sound business judgment which should be approved and authorized by the Court. Integrated Health Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 609/392-0900) INT'L FIBERCOM: Employing Gerard Klauer as Financial Advisor ------------------------------------------------------------ International Fibercom, Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Arizona to employ the investment banking firm of Gerard Klauer Mattison & Co., Inc. as their exclusive financial advisor. The will look to Gerard for help in: -- analyzing, structuring, negotiating and effecting of a business combination, restructuring of indebtedness or other transactions; and -- such other activities as may be reasonable and proper for the Debtors to undertake relating to such transactions. The Debtors believe that Gerard Klauer has the experience, expertise, and resources to provide the multi-faceted financial advisory services they needed in these cases. Particularly, Gerard Klauer intends to advise the Debtors on: a) alternatives with regard to the sale of the entire company; b) select assets or operating divisions or other transactions that could cause change of control of the Debtors; c) assist the Debtors in valuation analysis of assets to be sold; d) assist prospective purchasers in conducting due diligence investigations of the Debtors; e) counsel the Debtors as to strategy and tactics for discussions and negotiations with potential purchasers and, if requested by the company, participate in such discussions and negotiations; f) advise the Debtors as to the structure and form of proposed transactions; g) assist the Debtors in evaluating bids and negotiating final terms; h) prepare pro forma financial projections and valuation analyses related to combining the Debtors; i) select assets or operating divisions with other entities in the context of business combinations; j) provide fairness opinions; k) if necessary, assist the IFCI Entities in negotiating and executing definitive agreements and filing regulatory documents; and l) assist the IFCI Entities in its negotiations with creditors. The Debtors intend to pay Gerard Klauer a transaction fee payable in cash upon any closing of any business combination and a portion of the purchase price, based upon the purchase price, subject to a minimum transaction fee of $750,000, determined as: 1) 2% on the first $50 million of the purchase price; plus 2) 1.5% on the next $100 million of the purchase price; plus 3) 1% on any additional amounts of the purchase price in excess of $150 million. The Debtors paid a non-refundable retainer of $50,000 to Gerard Klauer which will be credited against any transaction fees payable to Gerard Klauer in connection with any business combination. International Fibercom, Inc. resells used, refurbished communications equipment, including fiber-optic cables. The Company filed for chapter 11 protection on February 13, 2002. Robert J. Miller, Esq. at Bryan Cave, LLP represents the Debtors in their restructuring efforts. KAISER ALUMINUM: Gains OK to Continue Workers' Compensation Plan ---------------------------------------------------------------- Kaiser Aluminum Corporation, and its debtor-affiliates sought and obtained authority to continue all current workers' compensation programs and pay related prepetition claims and expenses. In addition, the Court authorizes the Debtors to make payments on account of prepetition workers' compensation claims arising under self-insured workers' compensation programs formerly maintained by certain of the Debtors. Daniel J. DeFranceschi, Esq., at Richards Layton & Finger in Wilmington, Delaware, relates that for Longshore Workers and employees in 19 states, the Debtors maintain a high-deductible workers' compensation program with Old Republic Insurance Company, under which: A. insurance coverage is provided for workers' compensation claims for losses up to the applicable statutory workers' compensation liability limit, with a $1,000,000 deductible per occurrence and B. the Debtors are obligated to pay an annual premium of $339,856. To secure the Debtors' obligations under the Insured Program, the Debtors have posted collateral, in the form of an irrevocable $3,320,000 letter of credit for the benefit of Old Republic. As of the Petition Date, the aggregate amount of outstanding claims under the Insured Program was approximately $1,600,000. Mr. DeFranceschi states that the Debtors currently operate as self-insured employers in the states of Louisiana, Ohio and Washington and maintain self-insured workers' compensation programs in those states. To cover part of the Debtors' exposure under the Self-Insured Programs, the Debtors maintain a separate high-retention excess workers' compensation program with Old Republic, under which: A. after a per occurrence retention of $1,000,000, insurance coverage is provided for losses up to the applicable statutory workers' compensation liability limit; and B. the Debtors are obligated to pay an $80,394 annual premium. To secure the Debtors' obligations under the Self-Insured Programs, the Debtors were required to: A. establish a cash escrow account in the State of Washington, which currently has a balance of $17,070,350; B. post a $1,100,000 irrevocable letter of credit for the benefit of Louisiana; and C. post a $10,000 irrevocable letter of credit for the benefit of Ohio. The Debtors estimate that the aggregate amount of claims accrued but not yet paid as of the Petition Date was approximately $7,925,032 for Washington, $2,953,449 for Louisiana and $662,820 for Ohio. Mr. DeFranceschi tells the Court that the Debtors operated self-insured workers' compensation programs for employees located in nine states and for Longshore Workers, under which, the Debtors paid claims directly through claims agents. Because workers' compensation claims typically have a long payout period, the Debtors face ongoing liability for the outstanding claims under the Former Self-Insured Programs. The Debtors estimate that the aggregate amount of claims accrued under the Former Self-Insured Programs but not yet paid as of the Petition Date was approximately $13,175,264, the substantial majority of which are claims asserted by former employees residing in West Virginia. To secure the Debtors' obligations under the Former Self insured Programs, the Debtor were required to post irrevocable letters of credit with four of the nine states: A. a $1,000,000 letter of credit for the benefit of West Virginia, B. a $402,967 letter of credit for the benefit of California, C. a $455,000 letter of credit for the benefit of Florida and D. a $300,000 letter of credit for the benefit of Oklahoma. Claims in all states except West Virginia are handled and processed for the Debtors by a third party administrator, RskCo, which charges a fee of $250,000 per policy year for its services, which is paid quarterly. In addition to this annual fee, RskCo charges separate handling fees for ongoing, open claims, generally less than $15,000 per quarter. The third party administrator for West Virginia claims is Acordia, which charges a flat fee of $15,000 per year. Mr. DeFranceschi contends that it is critical that the Debtors be permitted to continue the Insured Programs and the Self- Insured Programs and ensure that any Current Programs Claims are paid. If the Insured Program and Self-Insured Programs are not maintained, the Debtors would be required to make alternative arrangements for workers' compensation coverage -- almost certainly at a much higher cost-because such coverage is required under many state laws, with Draconian remedies if an employer fails to comply with such laws. In fact, if workers compensation coverage is not maintained as required by those laws, employees could bring lawsuits for potentially unlimited damages, the Debtors' ongoing business operations in certain states could be enjoined and the Debtors' officers could be subject to criminal prosecution. Furthermore, the Debtors believe that any delay in the timely payment of the Current Programs Claims would have a negative impact on the morale of the Debtors' current employees at a time when the support of such employees is most critical. In contrast, Mr. DeFranceschi points out that the payment of the Current Programs Claims will permit the Debtors to continue their operations in the states in which they currently have employees without interruption. The Debtors are also authorized, in their sole discretion, to pay prepetition claims that become payable postpetition under the Former Self-Insured Programs in all states with letters of credit other than West Virginia. Although the Debtors do not currently have employees in these states, Mr. DeFranceschi submits that each of these states holds a letter of credit in an amount that is more than sufficient or close to sufficient to satisfy the outstanding claims in that state. If the Debtors do not continue to pay the Secured Former Programs Claims, the applicable state agency will draw down its letter of credit. Because draws under the letters of credit will be treated as borrowings under the Debtors' postpetition financing facility, s the amount of those letters of credit immediately would become postpetition loans. In contrast, by continuing to pay the Secured Former Programs Claims, Mr. DeFranceschi notes that the Debtors would only be required to make periodic payments over the life of those claims. It is therefore advantageous to continue paying Secured Former Programs Claims as they come due, rather than immediately incur a postpetition interest-bearing obligation in the full amount applicable letter of credit. With respect to the Former Self-Insured Programs for former Longshore Workers, West Virginia and states without letters of credit (Illinois, Maryland, Missouri, Pennsylvania and Rhode Island), the Debtors are permitted to waive, in their sole discretion, the protections granted by the automatic stay to the extent necessary to permit the applicable federal or state workers' compensation agency to take such actions as are necessary to pay the workers' compensation claims under those Former Self-Insured Programs. The Debtors propose assisting holders of Unsecured Former Programs Claims to seek payment of those claims from the appropriate state or federal agency. The Debtors anticipate that a transition period, not to exceed 90 days, will be required until this new approach to Unsecured Former Programs Claims is implemented. To insure coverage during the Transition Period, the Debtors request authority, in their sole discretion, to pay Unsecured Former Programs Claims that become due and payable during the Transition Period, regardless of whether such claims are payable from another source. In addition, the Debtors are authorized, in their sole discretion, to pay all costs incident to the Insured Programs, Self-Insured Programs and Secured Former Programs Claims, such as processing fees and accrued but unpaid charges for the administration of these programs and claims. Mr. DeFranceschi explains that payment of the Prepetition Processing Costs is justified because the failure to pay any such amounts might disrupt services of third-party providers with respect to these programs and claims. By paying the Prepetition Processing Costs, the Debtors may avoid even a temporary disruption of such services and thereby ensure that their current and fonner employees obtain all workers' compensation benefits without interruption and they remain in compliance with applicable state law at all times. In addition, the Debtors represent that they have sufficient cash reserves, together with anticipated access to sufficient debtor in possession financing, to pay the amounts described herein in the ordinary course of their businesses. Finally, the Court orders that all applicable banks and other financial institutions be authorized and directed to receive, process, honor and pay any and all checks drawn on the Debtors' accounts to pay the Current Programs Claims, Secured Former Programs Claims and Prepetition Processing Costs, whether the checks were presented prior to or after the Petition Date, provided that sufficient funds are available in the applicable accounts to make the payments. Mr. DeFranceschi asserts that each of these checks can be readily identified as relating directly to the authorized payment of the Current Programs Claims, Secured Former Programs Claims and Prepetition Processing Costs. Accordingly, the Debtors believe that checks other than those relating to authorized payments will not be honored inadvertently. (Kaiser Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900) KAISER CENTER: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Lead Debtor: Kaiser Center, Inc. 300 Lakeside Drive, Suite 130 Oakland, California 94612-3524 Bankruptcy Case No.: 02-10819 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Alwis Leasing, LLC 02-10818 Chapter 11 Petition Date: March 15, 2002 Court: District of Delaware (Delaware) Debtors' Counsel: Paul Noble Heath, Esq. Daniel J. DeFranceschi, Esq. Richards, Layton & Finger One Rodney Square P.O. Box 551 Wilmington, Delaware 19899 Phone: 302-651-7700 Fax : 302-651-7701 and Corinne Ball, Esq. Jones, Day, Reavis & Pogue 599 Lexington Avenue, 32nd Floor New York, New York 10022 Phone: 212/326-3939 Estimated Assets: $10 to $50 Million Total Debts: $1 to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Alameda County Tax Collector Tax Debt $723,000 1221 Oak Street Oakland, California 94612 City of Oakland Tax Debt $300,000 Business Tax Section 250 Frank Ogawa Plaza Suite 1320 Oakland, California 94161 Pacific Gas & Electric Trade Debt $340,000 Company 1919 Webster Street Oakland, California 94612 William D White Trade Debt $196,000 Company Inc. DMS Janitorial Company Trade Debt $22,000 Stuart Dean Company Trade Debt $37,000 City of Oakland Parking Tax Tax Debt $25,000 Onyx Environmental Trade Debt $16,000 Services, LLC Dan Foss Graham Trade Debt $11,000 Precision Balancing Service Trade Debt $7,000 Simpson Gumpertz & Heger Trade Debt $6,000 East Bay MUD Trade Debt $5,000 Waste Management Trade Debt $4,000 Biagini Waste Reduction Inc. Trade Debt $2,000 Bank of America Trade Debt $1,000 IHI Environmental Services Trade Debt $1,000 Valley Building Maintenance Trade Debt $1,000 MCI Worldcom Telephone Bill Trade Debt $1,000 Consolidated Lock, Inc. Trade Debt $1,000 IOS Capital Trade Debt $1,000 KEYSTONE CONSOLIDATED: Exchange Offer for 9-5/8% Notes Expires -------------------------------------------------------------- Keystone Consolidated Industries, Inc. (OTC Bulletin Board: KESN) announced that its exchange offer to holders of its $100 million 9-5/8% Senior Secured Notes expired at 5:00 p.m., New York City time on March 14, 2002, with $93,850,000 aggregate principal amount of the Senior Secured Notes having been properly tendered for exchange. All other conditions of the exchange offer have been satisfied or waived by the Company, and on March 15, 2002, the Company notified the trustee for the Senior Secured Notes that it has accepted the $93,850,000 aggregate principal amount tendered for exchange. The Company also announced that documents related to the $10 million subordinated loan from the County of Peoria, Illinois, to the Company have been executed and the funds are being held in escrow by a bank in Peoria, Illinois, pending completion of certain other documentation. Keystone Consolidated Industries, Inc. is headquartered in Dallas, Texas. The Company is a leading manufacturer and distributor of fencing and wire products, carbon steel rod, industrial wire, nails and construction products for the agricultural, industrial, construction, and original equipment markets and the retail consumer. Keystone is traded on the OTCBB under the symbol KESN. KMART CORP: Court Okays Rockwood Gemini as Real Estate Advisors --------------------------------------------------------------- Judge Sonderby granted Kmart Corporation and its debtor- affiliates the authority to hire Rockwood Gemini Advisors to help assist them in evaluating their real estate properties. Rockwood Gemini Advisors is a joint venture consisting of Rockwood Realty Associates LLC and Gemini Realty Advisors LLC. Rockwood Realty is a real estate investment banking firm specializing in providing real estate advisory and transactional services to distressed corporations and their real estate departments, insurance companies, real estate investment trusts, pension fund advisors, foundations, lenders and private investors. Gemini Realty, on the other hand, is a real estate consulting firm experience in advising distressed operating companies. Its activities include but are not limited to advising companies in complex restructuring assignments concerning the reduction of real estate operating and occupancy costs, and most efficient operation and use of real estate assets, and advising companies on all real estate matters during bankruptcy proceedings and reorganization or liquidation efforts. Moreover, Judge Sonderby rules that all compensation and reimbursement of expenses (including expenses arising from indemnity claims) to be paid to Rockwood Gemini shall be subject to prior approval of the Court. However, Judge Sonderby notes that in the light to Rockwood Gemini's flat fee arrangement: (i) monthly invoices required pursuant to the interim compensation order entered in these cases need only consist of a brief narrative of the services provided during the previous month (redacted to protect confidential information but otherwise sufficient to describe the services provided) and the amount of any expenses for which reimbursement is sought, and (ii) in interim and final fee applications, a listing of time spent by day by individual Rockwood Gemini personnel and a description of the services provided by Rockwood Gemini during the application period (redacted to protect confidential information but otherwise sufficient to describe the services provided) may be substituted for detailed individual time entries. Furthermore, the Court mandates that all requests of Rockwood Gemini for payment of indemnity pursuant to the Retention Agreement arising during the pendency of these Chapter 11 cases shall be made by means of an application and shall be subject to review by the Court to ensure that payment for such indemnity conforms to the terms of the Retention Agreement and is reasonable based upon circumstances of the litigation or settlement in respect of which indemnity is sought. Judge Sonderby further modifies the Retention Agreement to provide that in no event shall Rockwood Gemini be indemnified if the Debtors or a representative of their estates assert a claim which is determined by a final order of a court of competent jurisdiction to have arisen out of Rockwood Gemini's own bad- faith, self-dealing, reckless and willful misconduct or negligence. In the event that Rockwood Gemini seeks reimbursement for attorney's fees from the Debtors pursuant to the Retention Agreement, Judge Sonderby emphasizes that the invoices and supporting time records from such attorneys shall be included in Rockwood Gemini's own applications. "Such invoices and time records shall be subject to the United States Trustee's guidelines for compensation and reimbursement of expenses as well as Court approval," Judge Sonderby adds. Under the terms of a Retention Agreement, Rockwood Gemini will: (a) Prepare a proprietary financial model for the purpose of valuing the Debtors' portfolio of fee-hold and leasehold interests and calculate their value on a property-by- property basis in the current marketplace; (b) Conduct in-depth meetings with key personnel of the Debtors to discuss valuation potentials and define any operational issues that may affect the valuation of the Debtors' real estate interests; (c) Work with the Debtors to identify and, where possible, resolve or quantify any unresolved issues or detriments to value. An important component of the initial evaluation of the real estate interests is the minimization of such issues, such as the effect of any new governmental zoning or environmental regulations; (d) Review and analyze all pertinent and available documentation and data regarding the Debtors real estate assets, including, but not limited to, leases, lease amendments, etc.; (e) Conduct in-depth market analyses utilizing proprietary databases, public records, GIS systems, Internet databases and interaction with local real estate professionals; (f) Physically inspect, where necessary, the Debtors' real estate interests, including any improvements to the real estate, in order to evaluate location, site, physical condition and market appeal and constraints compared with competitive properties or future sites in the market area; (g) Determine the maximum additional development potential for each parcel, if appropriate, and the potential impact on the value of existing improvements; (h) To the extent deemed necessary and, with the prior approval of the Debtors, engage and supervise outside consultants including engineers, environmental consultants, architects, and zoning experts, to assist in specific critical areas that might include, but not necessarily be limited to: (i) analyzing the condition of the existing physical improvements, (ii) evaluating any environmental issues, (iii) summarizing existing zoning regulations, and (iv) ascertaining a "hard" price for any such work which might be required to realize the best value for the particular real estate interest; (i) Determine if any development land or competing improved real property will be coming on the market and if there are any new developments contemplated or possible given the availability of suitable sites, and, if so, what impact they may have on the Debtors' real estate interest; (j) Based largely upon the information obtained during the initial stages of the Assignment, prepare detailed financial models for the Debtors' real estate interests including a detailed discussion regarding the underlying assumptions utilized in developing the financial models; (k) Based on due diligence, analysis and valuation, prepare a strategic action plan that: (i) clearly identifies and quantifies complex issues; (ii) assesses and values alternative courses of actions; (iii) provides for the most effective means of achieving the Debtors' objectives; (l) Prepare a comprehensive written report for the Debtors' real estate interests, which will include thorough descriptive information, market data, area information, and all other information necessary for the Debtors to effectively evaluate the real estate interests in the marketplace; (m) Prepare a portfolio database of the Debtors' real estate interests in Excel form for confidential internal use by the Debtors' management and its legal and other advisors; (n) Work directly with the Debtors' management, staff, its counsel, its outside brokers and other advisors in their review of the Debtors' real estate interests, and the competitive marketplace for such assets; and (o) Prepare and present regular and thorough status reports to the Debtors regarding the execution of the Assignment and attend regular Comdisco staff meetings with the Debtors regarding current real estate issues. As compensation for the services, the Debtors will pay Rockwood Gemini a flat monthly fee of $150,000. The Debtors will also pay Rockwood Gemini an additional $75,000 per month at such time that Rockwood Gemini begins to assist the Debtors with any real estate disposition matters. Furthermore, the Debtors will reimburse Rockwood Gemini for the actual and reasonable out-of-pocket expenses incurred such as costs associated with preparation of written reports, all travel-related expenses, outside printing costs, database and licensing fees, and other administrative expenses. Upon execution of the Retention Agreement, Rockwood Gemini received a due diligence fee of $300,000 together with $116,129 representing Rockwood Gemini's monthly fee prorated for the period of January 8, 2002 through January 31, 2002. (Kmart Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900) KMART CORP: Store Closure Drags GMAC Certificates Ratings Down -------------------------------------------------------------- Standard & Poor's placed its ratings on the class K and L commercial mortgage pass-through certificates of GMAC Commercial Mortgage Securities Inc.'s series 2000-C2 on CreditWatch with negative implications. The CreditWatch placement reflects Kmart Corp.'s ('D' rating) March 8, 2002 announcement of the closure of 284 underperforming stores. Standard & Poor's has identified two loans with a combined balance of $14.7 million, or 1.92% of the pool, that have been slated for closure. Both loans are secured by properties solely occupied by Kmart and are located in Illinois, one in Chicago, and one in Aurora. This is in addition to four delinquent loans totaling $12.6 million, or 1.65% of the pool, one of which is in special servicing. The ratings will remain on CreditWatch negative until the impact of these six loans on the certificates can be determined. At this point no other rated certificates are affected. Ratings Placed On Creditwatch Negative GMAC Commercial Mortgage Securities Inc. Pass-through certificates series 2000-C2 Rating Class To From Credit Enhancement K B+/Watch Neg B+ 2.65% L B/Watch Neg B 2.15% Other Currently Rated Classes GMAC Commercial Mortgage Securities Inc. Pass-through certificates series 2000-C2 Class Rating Credit Enhancement A-1 AAA 21.49% A-2 AAA 21.49% B AA 17.44% C A 13.78% D A- 12.39% E BBB 9.86% F BBB- 8.60% G BB+ 5.31% H BB 4.55% J BB- 3.79% KMART CORP: Fitch Keeping Watch on Morgan Stanley Transactions -------------------------------------------------------------- Fitch Ratings places the $7.7 million class J of Morgan Stanley Capital I Inc.'s commercial mortgage pass-through certificates, series 1997-HF1 at 'B-' on Rating Watch Negative. The remaining classes are affirmed as follows: $63.4 million class A-1, $215.5 million class A-2 and interest-only class X at 'AAA', $55.7 million class B at 'AA+', $34 million class C at 'A+', $27.8 million class D at 'BBB+', $9.3 million class E at 'BBB', $41.7 million class F at 'BB', $4.6 million class G at 'BB-' and $10.8 million class H at 'B'. The $6.2 million class K is not rated by Fitch. The Rating Watch reflects the weakening of the transaction due to the number of loans of concern in the transaction, including a loan with Kmart exposure. There is one loan, which has Kmart as a tenant with a 1.9% exposure by loan balance. Kmart has decided to close this store pending bankruptcy court approval. Fitch has also identified eleven other loans of concern (10.5%) in the pool. There is one loan (0.2%) in special servicing which as of the February distribution date is current on its payments. In addition to the specially serviced loan, there are ten other loans with DSCRs below 1.0x (10.3%) based on trailing-twelve- month (TTM) financials. Fitch will continue to monitor the progress of the Kmart bankruptcy and the impact on the ratings in this transaction. KMART CORP: Fitch Concerned About Impact on CSFB Transactions ------------------------------------------------------------- Fitch Ratings places these classes on Rating Watch Negative of Credit Suisse First Boston Mortgage Securities Corp., commercial mortgage pass-through certificates, series 1997-C2: $73.3 million class F currently rated 'BB' and $14.7 million class G at 'BB-'. The following two classes are downgraded: $29.3 million class H to 'CCC' from 'B', and $14.7 million class I to 'CCC' from 'B-'. The remaining classes are affirmed as follows: $79.1 million class A-1, $322.3 million class A-2, $523.3 million class A-3 and interest-only class A-X are affirmed at 'AAA', $95.3 million class B at 'AA', $80.6 million class C at 'A', AND $95.3 million class D at 'BBB-'. The $26.7 million class E and $40.4 million class J certificates are not rated by Fitch. The rating actions reflect the weakening of the transaction due to the number of loans of concern in the deal including the loans with Kmart exposure. There are nine loans, which have Kmart as a tenant totaling 6.8% exposure by loan balance. Of these loans, Kmart has rejected five of the leases thus far. Fitch will continue to monitor the progress of the Kmart bankruptcy for further lease rejections and the impact on the ratings in this transaction. Fitch has also identified several other loans of concern (9.5%) in the pool. There are twenty-one loans in special servicing, five of which are real estate owned (REO) loans (1.13%). Of the five REO loans, three (0.9%) are credit tenant lease (CTL) loans guaranteed by Furrs. The remaining two loans are secured by an Oregon storage facility and a Comfort Inn located in Garland, TX, respectively. All five REO loans have suffered from vacancy issues due to bankruptcies of tenants or a weak hotel market. Fitch Ratings will continue to monitor this transaction as surveillance is ongoing. KMART CORP: Deutsche Bank Alex. Brown Offering 25% for Claims ------------------------------------------------------------- Deutsche Bank Alex. Brown Inc. is offering creditors 25 cents- on-the-dollar for their claims against Kmart Corporation. Among other contingencies, including the "right not to accept any claims presented and the right to increase or decrease our offer level depending on market conditions," Vice President Duane Massicci and Director Matt Doheny say in a letter circulated to Kmart's creditors earlier this month, "[a]ll claims must be supported by invoice documentation and an officer in the company must attest to the validity of the claim and the claim amount." Messrs. Masucci and Doheny can be reached in New York at (212) 469-5389. LERNOUT & HAUSPIE: Court Confirms Dictaphone's 3rd Amended Plan --------------------------------------------------------------- Following the withdrawal of all confirmation objection, Dictaphone's Third Amended Plan, including the Plan Supplement, which Judge Wizmur finds to be a technical or non-material change, is confirmed by Judge Judith H. Wizmur. Judge Wizmur enters an Order making the required findings of fact and law to support confirmation, based in part on the hearing testimony of Tim S. Ledwick, Dhruv Narain, and Joseph D'Amico of Dictaphone. Judge Wizmur finds that Dictaphone's plan adequately and properly identifies and classifies all claims and classes, and is in compliance with the Bankruptcy Code. She also finds that adequate and sufficient notice was provided to all parties entitled to receive the same of the Plan, as amended and supplemented. Judge Wizmur finds that the Plan as amended and supplement is proposed by Dictaphone in good faith and not by any means forbidden by law, and that any payment made or to be made by Dictaphone or a person issuing securities or acquiring property under the Plan for services or for costs and expenses, or in connection with these cases or the Plan, has been approved by, or is subject to approval by, the Court. In particular, Judge Wizmur finds that the fees and expenses described in the exit facility are reasonable. As to the "best interests of creditors" test for confirmation, Judge Wizmur finds that: (1) The liquidation analyses contained in the Disclosure Statement and in other evidence at the confirmation hearing have not been controverted by other evidence. The methodology used and assumptions made in connection with the liquidation analysis, as supplemented by other evidence at the confirmation hearing, are reasonable. (2) Each holder of a claim or equity interest in each impaired class either has accepted the plan or will likely receive or retain under the plan on account of such claim or equity interest property of a value, as of the Effective Date, that is not less than the amount that such holder would receive or retain if Dictaphone were liquidated under chapter 7 of the Bankruptcy Code on such date. No class made any election under Bankruptcy Code section 1111(b)(2). The treatment of administrative expenses and priority tax claims under the Plan satisfies the Code's requirements, respectively, for those types of claims. The fees paid and to be made to the United States Trustee have been made timely and in full, or will be paid as administrative claims. Based on the record, the Plan and Dictaphone meet the feasibility test. Judge Wizmur finds that reasonable prospects exist that Reorganized Dictaphone may achieve financial stability and success. Judge Wizmur finds that, based on the record, the best chance for Dictaphone's "continued profitability" is its prompt emergence from chapter 11. The evidence at the hearing showed, to Judge Wizmur's satisfaction, that Dictaphone can make the payments promised under the Plan and will be able to perform its post-confirmation obligations. Consequently, confirmation of the plan is not likely to be followed by the liquidation, or the need for further financial reorganization, of Dictaphone or any successor to Dictaphone. She further finds that the principal purpose of the Plan is not the avoidance of taxes or the avoidance of Section 5 of the Securities Act of 1933, and no governmental unit has requested that Judge Wizmur not confirm the Plan for this reason. The Plan makes provision for the continuation of retiree benefits at the level established by the Bankruptcy Code prior to confirmation of the Plan for the duration of the period during which Dictaphone is obligated to make such payments. The Need for Cram-Down With the exception of Classes 9 and 10, each class of claims or equity interests entitled to vote accepted the plan or is not impaired under the plan. Since not all impaired classes of claims or equity interests have accepted the Plan, the requirements of the Bankruptcy Code have not been met, thus requiring resort to the "cram-down" provisions of the Code. At least one class of impaired claims has accepted the Plan, determined without including any acceptance of the Plan by any insider of Dictaphone holding a claim in the class, and satisfying this prong of the test. Judge Wizmur finds that the Plan is "fair and equitable" and does not discriminate unfairly against the rejecting Classes 9 and 10. Specifically, Judge Wizmur finds that, as to the rejecting classes: (1) The holder of any claim or equity interest that is junior to the claim or equity interest of the rejecting classes will not receive or retain under the plan, on account of such junior claim or equity interest, any property, and (2) With respect to the claims or equity interests, the claims and equity interests in the rejecting classes have no value. Thus, Judge Wizmur concludes that the Plan satisfies the cram- down requirements as to each of the rejecting classes. The Exit Facility Judge Wizmur finds that GMAC has signed and delivered the exit facility commitment letter, and she authorizes Dictaphone to enter into the commitment facility on the terms and conditions described in the letter. The Securities Exemption To the extent, if any, that they constitute "securities", Judge Wizmur finds that the issuance and distribution of (i) the Dictaphone New Common Stock, (ii) Dictaphone New Warrants (and any Dictaphone Common Stock issued upon exercise of the Dictaphone New Warrants), and (iii) the Litigation Trust Beneficial Interests, under the Plan have been duly authorized and, when issued as provided in the Plan, will be validly issued, fully paid, and nonassessable. The offer and sale of these properties is in exchange for claims, or principally in exchange for claims and party for cash and property, within the Bankruptcy Code. To the extent that any of these items constitute securities, the offering of such items is exempt and the issuance and distribution of such items will be exempt from Section 5 of the Securities Act of 1933 and any state or local law requiring registration prior to the offering, issuance, distribution or sale of securities, and all of these items will be freely tradable by the recipients, subject to the Code's definition of an underwriter and compliance with any rules or regulations of the SEC, if any, applicable at the time of any future transfer of such securities or instruments, and any applicable restrictions on transferability. Assumed Contracts and Leases Subject to the payment of cure amounts as appropriate, the contracts and leases described by Dictaphone to be assumed are found to be valid and existing contracts or unexpired lease interests in the property subject to the leases. None of Dictaphone's rights have been or shall be released or waived through the assumption of these contracts and leases as assumed, and none of the contracts and leases will be terminated by the assumption. Judge Wizmur finds there is no default in any of these leases and contracts, nor will there exist any event or condition that, with the passage of time, shall constitute such a default. She finds that Reorganized Dictaphone has provided adequate assurance of its future performance of its obligations under these leases and contracts. Judge Wizmur therefore approves the assumption of these contracts and leases, and their assignment to Reorganized Dictaphone. The Intercompany and Intercreditor Settlements By confirming the Plan, Judge Wizmur approves these settlements and grants the Debtors' Motion, described below, for the same. (L&H/Dictaphone Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 609/392-0900) * * * Dictaphone Corporation, one of the oldest brands in America and a leader in dictation, speech recognition and communications recording solutions for medical and commercial applications, announced that its chapter 11 plan of reorganization was confirmed on March 13, 2002 by the United States Bankruptcy Court for the District of Delaware. The company expects to emerge from chapter 11 by the end of this month as a standalone entity and not as a subsidiary of Lernout &Hauspie (L&H), its current parent. Upon emergence, Dictaphone's unsecured creditors will own 100% of the common stock of the company, prior to customary dilution for the company's incentive program. Under the plan of reorganization, certain creditors will also receive warrants for the rights to acquire additional shares, and certain other creditors will receive, in the aggregate, $27.3 million of subordinated notes to be newly issued by the company. "With the blanket of chapter 11 lifted and in light of recent R&D investment and key technology acquisitions, we are well positioned for growth in our multiple businesses. My positive view of Dictaphone's future is also reflected in the Dictaphone creditors' overwhelming support of our plan and in their desire to participate in our company vision and value appreciation as equity owners," said Rob Schwager, Dictaphone President and Chief Executive Officer. Dictaphone was acquired by Lernout and Hauspie (L&H), a Belgium- based speech and language company, in May 2000. Within months of the acquisition, L&H and certain of its U.S. subsidiaries, including Dictaphone, filed for chapter 11 protection. During the bankruptcy case, Dictaphone entered into a long term licensing arrangement for what was L&H's award winning speech recognition engine, language data and natural language software development tools. Additionally, Dictaphone acquired from L&H (and certain of its affiliates) its PowerScribe(R) product, the healthcare industry's leading speech recognition system. As the leader in large-scale dictation systems for the healthcare market, Dictaphone has recently introduced the EXSpeech system, which allows its hospital and clinic customers to reduce transcription costs by approximately 30%. The transcription labor costs for hospitals in the United States are over $6 billion annually, presenting Dictaphone with a significant growth opportunity as it pioneers this new market. Looking to the future, Schwager said "Over the course of the last 5 years, Dictaphone has gone through a dramatic transformation from being a longtime provider of hardware based products to become a leading developer and supplier of software based systems in the healthcare, public safety and call center markets. While the past 16 months of bankruptcy have certainly presented challenges, the acquisition of advanced speech technology, the substantially increased investments in our R&D, the reduction of debt to less than 20% of pre-bankruptcy levels and the heightened determination of our employees have resulted, we believe, in a newly energized, better equipped and more valuable Dictaphone which is now poised for growth." The company has also received a $30 million commitment from GMAC Business Credit, LLC under a revolving credit facility to meet its ongoing working capital needs. "Dictaphone will emerge from chapter 11 with a stronger balance sheet and with dramatically reduced debt, allowing us to more effectively manage and make necessary investments in our business. I'm also pleased to report that during 2001, despite the highly unusual corporate circumstances and a challenging economy, Dictaphone was able to meet its annual performance goals and to establish momentum going into 2002." Schwager said. Schwager concluded, "We are very appreciative for all of the support provided by our customers, suppliers, employees and advisors during this critical time. That support will enable the company to emerge from chapter 11 on an accelerated timetable. We believe we will be able to demonstrate that such support was warranted by continuing to provide to our customers superior technology and services and also present an increasing value to our new shareholders." Dictaphone is a leader in the development, manufacture, marketing, service and support of highly scalable communications recording and dictation systems which incorporate advanced speech and natural language technology focused upon the healthcare, public safety and call center markets. Dictaphone also owns and operates an electronics manufacturing facility in Melbourne, Florida, which produces complex electronics products and components for Dictaphone and third-party customers. Dictaphone is headquartered in Stratford, Connecticut, and has worldwide marketing, sales, service and support organizations throughout United States, the United Kingdom, Canada and Europe. LUMINANT WORLDWIDE: Plan of Reorganization Expected on April 6 -------------------------------------------------------------- As previously reported, on December 7, 2001, Luminant Worldwide Corporation and certain of its direct and indirect subsidiaries filed a voluntary petition for reorganization relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas, Houston Division, under jointly administered Case No. 43445-H3- 11. The purpose of the Chapter 11 Proceeding is currently to facilitate the sale of all of the Debtors' assets. On January 2, 2002, the Bankruptcy Court declared that Lante Corporation had submitted the highest and best bid and approved the sale of substantially all of the Debtors' assets to Lante. On January 7, 2002, Luminant and Lante entered into an Amended and Restated Asset Purchase Agreement, memorializing the terms of the sale as presented in the successful bid at the auction held in open court. Under the Amended Agreement, in exchange for substantially all of Debtors' assets, Lante agreed to (i) assume certain liabilities involving contracts assigned to Lante, (ii) pay to Lante at the closing $5.2 million in cash, (iii) pay to Luminant an amount in cash equal to 75 percent of accounts receivable not more than 90 days old as of the closing date and unbilled work-in-progress related to professional consulting services as of the closing date which would be billed in the ordinary course of business but for the sale of assets; and (iv) make payment to Luminant with respect to accrued vacation and other paid leave obligations of Luminant arising prior to the closing date. The closing date of the sale of the assets to Lante pursuant to the Amended Agreement was January 8, 2002. Lante paid $5.2 million in cash for Luminant's client contracts and relationships, intellectual property, software assets and certain tangible assets. In addition, Lante paid approximately $2.6 million for the accounts receivable not more than 90 days old as of the closing date and unbilled work-in-progress related to professional consulting services as of the closing date which would be billed in the ordinary course of business but for the sale of assets. Luminant currently has no ongoing operations. On February 15, 2002, the Bankruptcy Court entered an order authorizing the appointment of H. Malcolm Lovett, Jr. as president and sole director of each of the Debtors. All other officers and directors of the Debtors were terminated or resigned at or prior to this time. The Debtors and the Official Committee of Unsecured Creditors expect to file a plan of reorganization pursuant to the Bankruptcy Code. The exclusive period in which the Debtors must file the Plan or by which the Debtors must seek an extension is April 6, 2002. Luminant currently expects to file the Plan prior to this date or to seek an extension to file the Plan soon thereafter. The monthly operating report of Luminant for January 2002 shows total assets of $11,806,116 and total liabilities of $43,345,632. Based on its review of the remaining assets, Luminant believes that the remaining liabilities of the Debtors are greater than the value of their assets. The Debtors are currently in the process of liquidating all of their assets. Accordingly, Luminant expects that any Plan will result in the cancellation of all equity interests in Luminant. Because Luminant has significantly limited resources, has no ongoing business and expects to emerge from the Chapter 11 proceeding with a cancellation of all equity interests, Luminant does not plan to complete any audit for the fiscal year ended December 31, 2001 or to file an annual report on Form 10-K or any subsequent quarterly reports on Form 10-Q unless otherwise required by the Bankruptcy Court or the U.S. Securities and Exchange Commission. MARINER POST-ACUTE: Court Okays CDL, P.C. as Debtor's Co-Counsel ---------------------------------------------------------------- Mariner Post-Acute Network, Inc., and its debtor-affiliates obtained Court approval to employ the law firm of Christopher D. Loizides, P.C. in Wilmington, Delaware as bankruptcy co-counsel in connection with the commencement and prosecution of a limited number of adversary proceedings the Debtors intend to file seeking to recover preferences, fraudulent conveyances and other turnover actions. The Debtors, subject to the provisions of the Bankruptcy Code, the Bankruptcy Rules and the Local Rules, will compensate CDL, P.C. at its customary hourly rates in effect from time to time. The current standard hourly rates of the principal professionals and paraprofessionals designated to represent the Debtors are as follows: Christopher D. Loizides $185.00 per hour Magdalen Braden $145.00 per hour (Mariner Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 609/392-0900) MISSION RESOURCES: S&P Concerned About Deteriorating Liquidity -------------------------------------------------------------- The 'B+' ratings for Mission Resources Corp., have been placed on CreditWatch with negative implications. The CreditWatch listing reflects Standard & Poor's heightened concerns regarding the potential deterioration in Mission's liquidity stemming from possible violations of financial covenants in the company's $200 million bank credit facility and the upcoming redetermination of that facility's borrowing base. The borrowing base of Mission's bank credit facility is $125 million and Mission currently has about $35 million drawn down, leaving incremental available borrowing capacity of $90 million. Standard & Poor's is concerned that, depending on the duration and magnitude of lower commodity prices, availability under Mission's bank facility may be reduced at a time of diminished cash flows. Depending on the magnitude of the borrowing base reduction and the outcome of negotiations with Mission's bankers regarding its financial covenants (which would affect the company's financial flexibility), Standard & Poor's could either affirm or lower Mission's ratings. Standard & Poor's does not expect that the borrowing base will be dropped below the level of outstanding borrowings, because of the low utilization of the facility, the asset protection afforded by Mission's reserves, and management's recently announced initiatives to improve near-term financial performance, including operating expense reduction, asset sales that could realize $10 million to $15 million, and possible merger combinations that would deleverage the company. Mission also has pledged to internally finance capital expenditures, and has cut its budget for 2002 to $27 million; however, Mission's capital expenditure cut could adversely affect the company's near-term production profile. While Mission is not in violation of any financial covenants under its credit agreement, the company could breach certain covenants as early as the end of the first quarter of 2002 if oil and gas prices were to fall. The current credit agreement requires that Mission maintain EBITDA interest coverage of more than 2.5 times and debt to EBITDA of less than 3.5x. NATIONAL STEEL: Brings-In Lazard Freres as Investment Bankers ------------------------------------------------------------- National Steel Corporation and its debtor-affiliates seek the Court's approval to employ and retain Lazard Freres as their investment bankers, effective as of the Petition Date. Ronald J. Werhnyak, National Steel's Vice President, General Counsel and Secretary, relates that the Debtors selected Lazard Freres because they believe the firm is uniquely qualified for the task. "Lazard Freres has substantial expertise in advising financially-troubled companies in connection with in and out of court reorganizations and is experienced in debt restructuring, merger and acquisition advisory and related issues," Mr. Werhnyak notes. Specifically, in its capacity as the Debtors' pre-petition investment bankers, Lazard Freres has developed knowledge of the Debtors' financial and business operations and worked with the Debtors on numerous matters. Lazard Freres has provided and will provide services for the Debtors such as: (a) assisting the Debtors in negotiating with the agent banks and other members of the Debtors' bank credit facility with respect to various matters; (b) acting on the Debtors' behalf in arranging the proposed debtor-in-possession financing; (c) assisting in developing the communications strategy for employees, vendors and customers; (d) advising management and the board of directors with respect to various financial matters; (e) meeting with the lenders and their advisors in connection with the restructuring process; (f) assisting the Debtors and their consultants and counsel in evaluating its businesses, assets and operations; (g) assisting the Debtors in developing a proposed employee retention and severance program; and (h) advising and attending meetings of National Steel's Board of Directors and its committees. Furthermore, Mr. Werhnyak lists additional services expected of Lazard Freres: (a) a review and analysis of the Debtors' business, operations and financial projections; (b) advising and assisting the Debtors in securing Debtor-in- possession financing, if required; (c) evaluating the Debtors' debt capacity in light of its projected cash flows; (d) assisting in the determination of an appropriate capital structure for the Debtors; determining a range of values for the Debtors on a going-concern basis; (e) advising the Debtors on tactics and strategies for negotiating with the Stakeholders and other appropriate parties; (f) rendering financial advice to the Debtors and participating in meetings or negotiations with the Stakeholders and other appropriate parties in connection with the Debtors' restructuring; (g) assisting the Debtors in preparing documentation required in connection with the Debtors' restructuring; (h) advising and attending meetings of the Debtors' Board of Directors and its committees; (i) providing testimony, as necessary, in any proceeding before the Bankruptcy Court; and (j) providing the Debtors with other appropriate general restructuring advice. Frank A. Savage, Managing Director at Lazard Freres, tells the Court that Lazard Freres will bill $200,000 per month and request reimbursement for its actual and necessary expenses. In addition, Mr. Savage reports that the firm will also receive a cash fee equal to $6,000,000 upon the completion of a Restructuring. Certain broad "Indemnification Provisions are considered a part of the compensation payable to Lazard Freres," Mr. Savage adds. Mr. Savage explains that the compensation structure reflects the difficulty of the extensive assignments Lazard Freres expects to undertake and the potential for failure. Mr. Savage informs Judge Squires that during the period prior to the Petition Date, the Debtors paid Lazard Freres $600,000 for pre-petition services rendered and $37,098 for out-of-pocket expenses. The pre-petition payments include monthly financial advisory fees for the months of January and February 2002 plus a $200,000 retainer. The expense payments reflect reimbursement of expenses billed for January and February 2002 plus a $25,000 expense advance. The Debtors and Lazard Freres agree that the engagement may be terminated following 10 days written notice at any time without liability or continuing obligation. To the best of the Debtors' knowledge, the officers and employees of Lazard Freres does not have any connection with the Debtors, their creditors or any other parties in interest. Mr. Savage admits that Lazard Freres may have worked for pre- petition lenders of the Debtors, post-petition creditors, the Debtors counsel and other parties in interest in the past; however, its relationship to these firms is not related to these cases. Thus, Lazard Freres is a "disinterested person" as defined under Section 101(14) of the Bankruptcy Code. Mr. Savage assures the Court that Lazard Freres do not have an interest materially adverse to the interests of the estates or of any class of creditors or interest holders of the Debtors. (National Steel Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900) NATIONSRENT INC: Look for Schedules & Statements on March 19 ------------------------------------------------------------ NationsRent Inc., and its debtor-affiliates ask the Court to extend the time within which the Debtors must file the schedules and Statements by an additional 14 days -- from March 5, 2002, through and including March 19, 2002. Michael J. Merchant, Esq., at Richards Layton & Finger P.A. in Wilmington, Delaware, submits that to date, the Debtors have made substantial progress toward the completion of the Schedules and Statements. The Debtors, however, believe that they will not be in a position to complete and file the Schedules and Statements by March 5, 2002, the date required by the Court in the Extension Order. Nevertheless, recognizing the importance of the schedules and Statements in these chapter 11 cases, the Debtors intend to complete the Schedules and Statements as quickly as possible under the circumstances. The substantial size and complexity of these cases, coupled with the volume of material that must be compiled and reviewed by the Debtors' limited staff to complete the Schedules and Statements for all of the Debtors continues to provide ample "cause " for justifying, if not compelling, the requested extension. A hearing on the motion is scheduled on April 2, 2002, and by application of Local Rule 9006-2, the deadline is automatically extended to that date. (NationsRent Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-0900) NEOMEDIA TECH.: Violates Nasdaq Continued Listing Standards ----------------------------------------------------------- NeoMedia Technologies, Inc. (NASDAQ: NEOM) said that it has requested a hearing before a NASDAQ Listing Qualifications Panel to review a NASDAQ Staff Determination received earlier this week. Charles T. Jensen, NeoMedia's CFO, vice president and treasurer, said the Staff Determination (received March 11) indicated that as of December 31, 2001, NeoMedia did not comply with either the minimum $2,000,000 net tangible assets or the minimum $2,500,000 stockholders' equity requirement for continued listing set forth in Marketplace Rule 4310(C)(2)(B), and that NeoMedia securities were, therefore, subject to delisting. Jensen said NeoMedia immediately responded by requesting a hearing before a NASDAQ Listing Qualifications Panel to review the Staff Determination, noting that while there can be no assurance the Panel will grant NeoMedia's request for continued listing, the request by NeoMedia for a hearing will stay the delisting pending the Panel's decision. Jensen also said that should NeoMedia not reach a successful conclusion with regard to continued listing on The NASDAQ SmallCap Market, it intends for its stock to be traded via the OTC Bulletin Board(R) (OTCBB). Relationship with SBI E2-Capital/SOFTBANK is Key Charles W. Fritz, NeoMedia's chairman and CEO, said his company's relationship with SBI E2-Capital (USA) Inc., ("SBI E2- Capital USA") SOFTBANK Investment Group Japan's U.S. investment banking arm, as its investment banker, "is an important step in implementing our new strategic initiative, stabilizing and solidifying NeoMedia now and in the future." He said SBI E-2 has placed a majority (51.5% of outstanding shares) ownership of NeoMedia since the relationship was announced late last year (see "NeoMedia Engages SBI E2-Capital (USA) Inc., SOFTBANK Investment Group Japan's U.S. Investment Banking Arm," Business Wire, September 26, 2001). On February 14, 2002, NeoMedia issued 19,000,000 shares of its common stock at a price of $0.17 per share through SBI E-2 Capital. The shares were issued in exchange for limited recourse promissory notes maturing at the earlier of 90 days from the date of issuance, or 30 days from the date of registration of the shares. The gross proceeds of this transaction will be approximately $3,230,000 upon maturity of the notes, including a payment of $190,000 made to NeoMedia by the investors. NeoMedia Technologies, Inc. -- http://www.neom.com-- develops technologies that link physical information and objects to the Internet, marketing services under the PaperClick(TM) trademark. In addition, NeoMedia's Systems Integration Group specializes in Open & Storage System solutions and automating print production operations. PACIFIC GAS: Argues over Sovereign Immunity in 2nd Amended Plan --------------------------------------------------------------- The Plan Proponents, Pacific Gas and Electric Company and PG&E Corporation, argue the State and the CPUC have waived their ability to assert sovereign immunity in this Chapter 11 Case through their extensive participation in the Debtor's chapter 11 proceedings because both the State and the CPUC have availed themselves of the Bankruptcy Court's jurisdiction to: (1) file claims in the Chapter 11 Case, (2) appear on the merits in critical matters, and (3) file a term sheet for a competing plan, which it filed on February 13, 2002. The Proponents believe the cumulative effect of their involvement and participation has been to surrender whatever sovereign immunity the State or the CPUC might otherwise have possessed. (1) Claims To date, the State of California (through multiple agencies) has filed more than $1.2 billion in claims in the Chapter 11 Case. The State's claims (at least fifty-five of them) embrace a wide range of matters. (2) Appearances on the Merits. The State and the CPUC also have participated in the Chapter 11 Case in many other significant ways that the Proponents believe individually, or in the aggregate, are a waiver of sovereign immunity. Among other things, the State has become the most active critic of the Plan. (3) Term Sheet. In addition, on January 8, 2002, the CPUC filed an objection as "a creditor and party in interest in this chapter 11 case" urging the Bankruptcy Court to terminate the Debtor's period of exclusivity and to "permit the Commission to file and solicit acceptances to its Alternate Plan" of reorganization. In this objection, the CPUC characterized itself as "a critical player in this case" and indicated that "the Commission is prepared to describe the salient features of its Alternate Plan and, with this Court's permission, to file a plan and disclosure statement in short order." The Attorney General, on behalf of the State and eleven named agencies thereof, specifically joined in the CPUC's objection on January 9, 2002. The Bankruptcy Court sustained the objection in part and, by order dated February 3, 2002, granted the CPUC permission to file a term sheet setting forth the components of its proposed alternative plan. The CPUC filed its term sheet in accordance with the Bankruptcy Court's order on February 13, 2002. At a hearing on February 27, 2002, the Bankruptcy Court terminated the Debtor's exclusivity for the limited purpose of allowing the CPUC to file a competing plan. The Proponents believe that, despite any disclaimers or reservations of rights made by the State and/or its various entities, the State's actions have waived any Eleventh Amendment immunity with respect to the Debtor's entire bankruptcy proceeding. The Proponents believe that a State or State agency cannot invoke its immunity selectively, even if it repeatedly claims that its actions are not meant to waive its Eleventh Amendment immunity. For these reasons, the Proponents believe that the CPUC and the State have waived their sovereign immunity with respect to the Plan, and seek relief in the Plan accordingly. However, if the Bankruptcy Court determines that the State and the CPUC have not waived their sovereign immunity with respect to the Plan, the Proponents will amend the conditions to confirmation to substitute findings of fact or conclusions of law for any declaratory or injunctive relief presently sought against the CPUC or the State. (Pacific Gas Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 609/392-0900) PENTON MEDIA: S&P Assigns B- Rating to $50M Senior Secured Notes ---------------------------------------------------------------- On March 14, 2002, Standard & Poor's lowered its ratings on Penton Media Inc. and removed them from CreditWatch. The current outlook is developing. Standard & Poor's also rated the company's proposed Rule 144A $150 million senior secured notes due 2007 at 'B-'. Proceeds from the notes and a $50 million preferred stock issue will be used to repay approximately $180 million in existing bank term debt and provide some modest near-term liquidity. The downgrade reflected the significant deterioration of Penton's credit profile as a result of the recession and post- September 11 travel industry and advertising downturn. Expectations are for additional weakness in the first half of 2002 and uncertainty exists about when key credit measures will improve. Penton, based in Cleveland, Ohio, is one of the leading trade magazine publishers and event organizers in the U.S. with more than 65 controlled circulation magazines and 135 trade shows and conferences. Total debt following the proposed refinancing will be $335 million. Penton had an extremely difficult year in 2001 due to its heavy exposure to the troubled technology and manufacturing sectors, which represent about 75% of total revenue, and a severe decline in profitability following the terrorist attacks in the U.S. The sharp drop in revenue in the fourth quarter was particularly harmful to Penton because it holds several of its largest and most profitable events in this quarter. Fourth quarter EBITDA, adjusted for restructuring charges, dropped almost 70% in 2001 compared with 2000 when it represented about 44% of the full year's profit. In light of the difficult industry environment and ongoing weakness in key sectors, Penton has taken significant restructuring actions including laying off 23% of its staff, closing 22 offices, and discontinuing numerous unprofitable magazines and events. Still, profits in the first half of 2002 are likely to decline and it is unclear when and by how much they might rebound. In addition, with event renewal rates and prepayments low, Penton is unlikely to benefit from significant cancellation revenue this year after collecting more than $20 million last year. The proposed refinancing is crucial to restoring liquidity as it will provide $26 million in excess cash and resolve financial covenant violations under Penton's current bank loan. The refinancing also includes a new $40 million secured borrowing base revolving line of credit that will not have any financial covenants, providing Penton with liquidity and access to capital during this difficult period. Ratings incorporate no tolerance for using cash to prepay subordinated debt, as allowed in limited quantity under the secured notes indenture. Preserving liquidity is critical, in Standard & Poor's opinion, until profits and key credit ratios improve measurably. Leverage was high with debt to EBITDA of 9.1 times at the end of 2001 and EBITDA coverage of interest expense was thin at 1.3x. Both of these measures are likely to deteriorate further for at least the next two quarters. Outlook The ratings could be lowered further if Penton is unable to improve its profitability by late 2002 or maintain adequate liquidity to manage its business during this difficult period. Conversely, ratings could be raised over the intermediate term if improving industry conditions and Penton's substantial cost reductions lead to a meaningful increase in profits and key credit measures over the next several quarters. PINNACLE HOLDINGS: Fails to Make Payment on 5.5% Conv. Notes ------------------------------------------------------------ As previously publicly disclosed, pursuant to a forbearance agreement between Pinnacle Holdings Inc. (Nasdaq: BIGT), its subsidiaries , including Pinnacle Towers Inc., and the lenders under Pinnacle's senior credit facility, Pinnacle Tower's current ability to distribute funds to Pinnacle Holdings to fund the interest payable due March 15, 2002 to holders of Pinnacle Holdings 5.5% Convertible Subordinated Notes as of March 1, 2002 is limited. Such interest payment was not made. If such payment is not made within 30 days of when due, then, subject to the terms of the governing indenture, the holders of 25% in principal amount of the Convertible Notes may be able to declare the $200 million principal amount of the Convertible Notes, together with accrued and unpaid interest, immediately due and payable. If the Convertible Note holders or, upon expiration of the forbearance agreement, the bank lenders, were to accelerate the maturity of amounts due under the Convertible Notes or Pinnacle's senior credit facility, respectively, Pinnacle's 10% Senior Discount Notes due 2008 may subsequently become payable. If any of such debt becomes payable, Pinnacle Holdings and Pinnacle Towers would not have sufficient funds to immediately repay the indebtedness of theirs that is so payable, and one or both of them could have to seek to reorganize its indebtedness under Chapter 11 of the Bankruptcy Code. Pinnacle Holdings believes it will likely have to attract additional capital in order to be able to address the financial challenges it currently faces. Pinnacle Holdings has been actively seeking additional capital and considering ways to deleverage its capital structure with the assistance of its advisors. As previously disclosed, and based on the feedback that Pinnacle Holdings has received in response to its capital raising efforts to date, raising additional capital at this time would likely not be possible without significantly restructuring its indebtedness. Such restructuring can take significant time to negotiate and implement and will likely have to be implemented by means of a reorganization under chapter 11 of the U.S. Bankruptcy Code. Any such debt restructuring may result in holders of Pinnacle Holding's common stock and Convertible Notes receiving de minimus interests in Pinnacle Holdings, if any. There can be no assurance that Pinnacle Holdings will in the future make the interest payment due today or any other interest or principal payments on the Convertible Notes. Pinnacle is a leading provider of communication site rental space in the United States and Canada. At December 31, 2001, Pinnacle owned, managed, leased, or had rights to in excess of 4,400 sites. Pinnacle is headquartered in Sarasota, Florida. For more information on Pinnacle visit its web site at http://www.pinnacletowers.com DebtTraders reports that Pinnacle Holdings Inc.'s 10% bonds due 2008 (BIGT1) are quoted at a price of 21. See http://www.debttraders.com/price.cfm?dt_sec_ticker=BIGT1for real-time bond pricing. POLYMER GROUP: Commences Fin'l Workout to Reduce Debt by $550MM+ ---------------------------------------------------------------- Polymer Group, Inc. (NYSE: PGI) announced details of a comprehensive financial restructuring that upon completion will result in the reduction of more than $550 million in debt. Highlights of the restructuring include: * A major equity investment from CSFB Global Opportunities Partners, L.P. (GOP). The investment will include the following: -- $50 million cash investment to be used to reduce senior indebtedness -- $25 million letter of credit to support certain amortizations of bank debt -- $394.4 million in PGI Senior Subordinated Notes owned by GOP (representing approximately 67% of all outstanding Notes) to be exchanged for equity * An offer to exchange all of PGI's remaining Senior Subordinated Notes for new notes due 2008 * A proposed 1-for -10 reverse stock split to be voted on at a special shareholders meeting The successful completion of the financial restructuring will result in: * A reduction of more than $550 million in debt and an increase of more than $550 million in shareholders equity * GOP will own 87.5% of the Company's equity * Existing shareholders will retain a 12.5% equity position Under the terms of the exchange offer, PGI is offering to exchange all of its 9% Senior Subordinated Notes due 2007 and all of its 8.75% Senior Subordinated Notes due 2008 (other than those notes owned by GOP) for, at the option of the holders, either new 8.5% senior subordinated notes due 2008 or new 9.75% senior subordinated discount notes due 2008. For each $1000 principal amount outstanding of the existing Notes, the Company is offering $300 of new senior subordinated notes or $375 of new senior subordinated discount notes. The new senior subordinated discount notes at maturity will have a principal value of $678. The Company is not making any separate payment with respect to the accrued but unpaid interest on the existing Notes tendered for exchange. The Company has also been in discussions with the Senior Secured Lenders under the Company's existing Credit Facility with respect to a possible amendment. Based upon those discussions, the Company believes that it will be able to reach an agreement with the Senior Secured Lenders on the terms of the Amended Credit Facility, although the Company has not received a final commitment from any of the Lenders for the Amended Credit Facility. The exchange offering memorandum and consent solicitation statement will be mailed to holders of the Notes. The exchange offer is scheduled to close on April 15, 2002 and is conditioned upon, among other things, the acceptance of 95% of the Notes not held by GOP and the Company entering into the Amended Credit Facility. The Company is also seeking consents from the Note holders to amend restrictive covenants contained in the existing indentures and allow PGI to not make certain accrued but unpaid interest payments on any existing Notes not tendered for exchange. In order to consummate the comprehensive financial restructuring, the Company will hold a special shareholders meeting to approve a 1-for-10 reverse stock split, authorize the issuance of 22.4 million new shares (post split) to GOP and approve certain amendments to our restated certificate of incorporation and bylaws. If approved, GOP will own 87.5% of all outstanding shares and existing shareholders will own 12.5% of all outstanding shares. Officers and directors of the Company, and their affiliated entities, beneficially own, or report the beneficial ownership of, approximately 46.8% of the Company's existing common stock. PGI has been advised that such persons plan to vote their shares in favor of the reverse stock split, the issuance of the new shares to GOP and the amendments to the restated certificate of incorporation and bylaws. Additional information about the special shareholders meeting will be filed shortly with Securities and Exchange Commission and mailed to all shareholders. Commenting on this announcement, Polymer Group Chairman, President and CEO, Jerry Zucker, stated, "We are extremely pleased to have structured a transaction with CSFB Global Opportunities Partners. This comprehensive financial restructuring will reduce the Company's debt level by more than $550 million and will provide PGI with a very solid capital structure." Polymer Group, Inc., the world's third largest producer of nonwovens, is a global, technology-driven developer, producer and marketer of engineered materials. With the broadest range of process technologies in the nonwovens industry, PGI is a global supplier to leading consumer and industrial product manufacturers. The Company employs approximately 4,000 people and operates 25 manufacturing facilities throughout the world. Polymer Group, Inc. is the exclusive manufacturer of Miratec(R) fabrics, produced using the Company's proprietary advanced APEX(R) laser and fabric forming technologies. The Company believes that Miratec(R) has the potential to replace traditionally woven and knit textiles in a wide range of applications. APEX(R) and Miratec(R) are registered trademarks of Polymer Group, Inc. DebtTraders reports that Polymer Group Inc.'s 9.0% bonds due 2007 (PGI1) are quoted at a price of 27. See http://www.debttraders.com/price.cfm?dt_sec_ticker=PGI1for real-time bond pricing. SHARON STEEL: Today Should be the End of an Eight-Year Case ----------------------------------------------------------- The Honorable Warren W. Bentz will convene a telephonic hearing at 11:00 a.m. this morning from his courtroom in Erie, Pennsylvania, to consider Sharon Steel Corporation's motion to dismiss its chapter 11 cases and transfer a substantial portion of the estate's remaining assets to the Company's secured lenders. Sharon Steel and its debtor-affiliates filed for chapter 11 protection on November 30, 1992. The Debtors disposed of substantially all of their assets in the years that followed. The amount realized from the liquidation of the Debtors' assets was sufficient to repay a substantial portion of the allowed amount of the bank lenders' secured claims (as reduced by agreement between the Debtors, the Creditors' Committee and the lenders) and a portion of the Debtors' postpetition obligations. No monies are available to make distributions to prepetition creditors. Thus, the Debtors are unable to obtain confirmation of a plan of reorganization. Since there's no business to reorganize and noting to fund a chapter 11 plan, the Debtors ask Judge Bentz to dismiss the chapter 11 cases. Herbert P. Minkel, Jr., Esq., (Telephone 212/218-6437) represents Sharon Steel. SILVERLEAF RESORTS: Defaults on 10.5% Senior Subordinated Notes --------------------------------------------------------------- Silverleaf Resorts, Inc. announced updated information with regard to its previously announced liquidity issues and other operational matters. In February 2001, the Company disclosed significant liquidity issues arising primarily from its failure to close a new credit facility with its largest secured creditor. Since then, the Company and its financial advisors have attempted to develop and implement a plan to return the Company to a more stable financial condition. The Company has remained in default under its credit facilities with its three principal secured lenders, but they have each agreed to forebear taking any action as a result of the Company's defaults and to continue funding so long as the Company continues to comply with the terms of interim arrangements with these lenders. Unless extended, these interim arrangements expire on March 31, 2002. In addition, the Company remains in default with its fourth secured lender, which has tentatively extended its payment terms. The Company is also in default with respect to $66.7 million of its 10-1/2% senior subordinated notes due 2008. The Company will immediately commence an exchange offer with the holders of these existing notes. Under the terms of the exchange offer, holders will be offered a combination of cash, new notes, and Silverleaf common stock for their existing notes. The exchange offer may not be consummated unless at least 80% in principal amount of the existing notes are tendered. Additionally, under the terms of the exchange offer, the indenture related to the existing notes will be amended to waive existing defaults, eliminate substantially all restrictive covenants, and subordinate the existing notes to the new notes. If the exchange offer is successful, holders of the existing notes will acquire 65% of the Company's outstanding common stock. The principal amount of each new note issued will be only 50% of the principal amount of each existing note exchanged. The interest rate of the new notes will be fixed between 5% and 8%, depending upon the actual percentage of existing notes exchanged by the pricing date. The Company has negotiated restructured two-year revolving credit facilities with its three principal secured lenders as well as a restructured revolving off-balance sheet facility with another financing source. Funding under all of these facilities is dependent upon successful completion of the exchange offer. If Silverleaf is unable to consummate the exchange offer, there can be no assurance that it will be able to obtain sufficient financing to continue its operations. The Company is reporting revenue of $285.8 million, a net loss of $59.9 million for the year ended December 31, 2000, compared to restated revenue of $230.4 million, restated net income of $17.7 million for the year ended December 31, 1999. Amounts reported for the quarter ended December 31, 2000 were revenue of $68.5 million, a net loss of $45.3 million, compared to restated revenue of $64.1 million, restated net income of $3.2 million for the quarter ended December 31, 1999. At December 31, 2000, due to its announced liquidity concerns and related uncertainties, the Company incurred one-time charges of $15.5 million to write-down inventories, $5.4 million to record the impairment of land and land held for sale, $3.1 million to write-off unsold inventory of vacation intervals from certain managed resorts, and $0.9 million to write-off intangible assets established in connection with the acquisition of these managed resorts. Additionally, the Company substantially increased its provision for uncollectible notes in 2000 to provide for poorer performance in the Company's notes receivable portfolio which resulted from a general downturn in the economy and the elimination of programs that had been in place to bring delinquent notes current. The additional amount provided was approximately $85 million. In the fourth quarter of 2000, the Company also wrote-off its receivable from Silverleaf Club and incurred a charge of $7.5 million. The Company's independent auditors disclaimed an opinion on the consolidated balance sheet of the Company and its consolidated subsidiaries as of December 31, 2000 and the related consolidated statements of operations, shareholders' equity, and cash flows for the year ended December 31, 2000 because of pervasive uncertainties regarding the Company's ability to continue as a going concern. The Company also announced that it would restate its consolidated financial statements for 1998, 1999, and the first three quarters of 2000 as a result of adjustments identified in connection with finalizing its December 31, 2000 financial statements. The adjustments recorded in the Company's restated consolidated financial statements decrease the Company's previously reported net income by $997,000 and $1.6 million for the years ended December 31, 1998 and 1999, respectively. The adjustments decrease the Company's previously reported total assets by $1.0 million and $2.0 million as of December 31, 1998 and 1999, respectively. The adjustments to the Company's previously announced quarterly results for 2000 decrease the Company's previously reported net income by $311,000, $6.3 million, and $18.2 million for the quarters ended March 31, 2000, June 30, 2000, and September 30, 2000, respectively. The adjustments decrease the Company's previously reported total assets by $2.1 million, $9.5 million, and $37.2 million as of March 31, 2000, June 30, 2000, and September 30, 2000, respectively. The specific items, that resulted in adjustments are summarized as follows: -- The Company has significantly increased its provision for uncollectible notes and the related allowance for the quarters ended June 30, 2000 and September 30, 2000. -- Effective in the fourth quarter of 2000, the Company adopted SAB No. 101 and modified its method of accounting for sampler sales, which resulted in the adjustment of sampler sales and the direct costs associated with these sales. -- The Company identified certain errors in accounting that had occurred during the prior periods that resulted in the Company either recognizing revenue that it had not yet earned or failing to cancel sales that were properly rescinded by its customers during the respective periods. These errors include the failure in some cases to properly apply interest payments and membership dues, and to properly reconcile debt balances and lender lock box activity related to pledged notes receivable. -- The Company changed the treatment of the costs associated with its prepaid marketing lists from a capitalized cost amortized over its useful life to an expense. The Company also corrected the classification of customer notes receivable activity on its consolidated statement of cash flows from an investing activity to an operating activity. -- Additional write-offs include litigation costs that the Company originally believed would be covered under the Company's insurance policies. The Company has begun the process of preparing the amended reports necessary to restate its previously released financial statements. Silverleaf intends to file these amended reports with the Securities and Exchange Commission as soon as is practicable. Based in Dallas, Texas, Silverleaf Resorts, Inc. currently owns and/or operates 19 resorts in various stages of development. Silverleaf Resorts offer a wide array of country club-like amenities, such as golf, swimming, horseback riding, boating, and many organized activities for children and adults. Silverleaf has a managed ownership base of over 124,000. STARTEC GLOBAL: UK Unit Enters into Voluntary Administration ------------------------------------------------------------- Startec Global Communications Corporation (OTC Bulletin Board: STGC.OB) announced that one of its subsidiaries, Startec Global Communications U.K. Ltd., has filed, on a voluntary basis, for management of its affairs, business and property by a Court appointed administrator. The action by Startec U.K. has been taken in order to enable the company to settle approximately 500,000 pounds Sterling ($690,000) in accounts payable while continuing to operate in the U.K. Startec U.K. currently has four employees, all of whom, it is intended, will remain. A petition for management by an administrator was presented on March 12, 2002 in the Chancery Division of the High Court of Justice in London. The U.K. filing is equivalent to filing for reorganization under Chapter 11 in the United States. Startec U.K. has proposed the appointment of Smith & Williamson as administrators of the Company. That appointment will take place provided that an administration order is made, the hearing of which is to be held on April 11, 2002. Under the provisions of U.K. law, the administrators will manage Startec U.K. with the intent of ensuring: * the survival of Startec U.K., and the whole or any part of its undertaking, as a going concern; or * a more advantageous realization of Startec U.K.'s assets than would be effected on a winding up of the company. A Startec spokesperson stated that Startec U.K. anticipated emerging from administration in four to six months. Startec Global Communications is a facilities-based provider of Internet Protocol communication services, including voice, data and Internet access. Startec markets its services to ethnic residential communities located in major metropolitan areas, and to enterprises, international long-distance carriers and Internet service providers transacting business in the world's emerging economies. Startec, through its subsidiaries, provides services through a flexible network of owned and leased facilities, operating and termination agreements, and resale arrangements. Startec has an extensive network of IP gateways, domestic switches, and ownership in undersea fiber-optic cables. STRATUS SERVICES: Sets Annual Shareholders' Meeting for Mar. 28 --------------------------------------------------------------- The Annual Meeting of the Stockholders of Stratus Services Group, Inc. will be held on Thursday, March 28, 2002 at 500 Craig Road, Suite 201, Manalapan, New Jersey 07726 at 10:00 a.m., local time, for the following purposes: 1. To consider and vote upon a proposal to sell the assets of the Company's Engineering Services Division to SEA Consulting Services Corporation, a Delaware corporation, pursuant to an Asset Purchase Agreement among the Company, the Purchaser and certain other parties. 2. To elect a new Board of Directors of the Company. 3. To consider and vote upon a proposal to adopt the Company's 2002 Equity Incentive Plan. 4. To consider and vote upon a proposal to approve the issuance to the holders of the Company's Series A Convertible Preferred Stock, $.01 par value per share, of the full number of shares of common stock, $.01 par value per share, to which such holders are entitled upon conversion of the Preferred Stock. 5. To consider and vote upon a proposal to approve the issuance to the holders of the Company's 6% Convertible Debentures of the full number of shares of common stock to which such holders are entitled upon conversion of the 6% Debentures. 6. To consider and vote upon a proposal to approve the issuance of up to 5,000,000 shares of common stock, or securities convertible into up to 5,000,000 shares of common stock, at prices which may be below the book and market value of the common stock. 7. To consider and vote upon a proposal to amend the Company's Amended and Restated Certificate of Incorporation to effect a reverse split of the outstanding shares of the Company's common stock. 8. To transact such other business as may properly come before the meeting or any adjournment thereof. Holders of common stock and Preferred Stock of record at the close of business on March 5, 2002, are entitled to notice of and to vote at the meeting. Stratus is a national provider of business productivity consulting and staffing services through a network of thirty-two offices in eight states. Through its SMARTSolutions technology, Stratus provides a structured program to monitor and reduce the cost of a customer's labor resources. The Company has a dedicated engineering services staff providing a broad range of staffing and project consulting. Through its Stratus Technology Services, LLC joint venture, the Company provides a broad range of information technology staffing and project consulting. At September 30, 2001, the company reported a working capital deficiency of about $1.5 million, and currently, is subject to delisting from Nasdaq due to noncompliance of certain continued listing requirements. TECSTAR: Wins Court Nod to Employ Donlin Recano as Claims Agent --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approves the employment of Donlin, Recano & Company, Inc. as claims, noticing and balloting agent for the chapter 11 cases of Tecstar, Inc. and its affiliated debtors. In their motion, the Debtors pointed out that there are significantly more than 200 creditors and parties in interest to whom certain notices must be sent. It is in this regard that the Debtors saw the need to employ Donlin Recano as claims agent for the Court in these chapter 11 cases. As Claims Agent, Donlin Recano will: a) prepare and serve required notices in these chapter 11 cases; b) within 5 business days after the service of a particular notice, file with the Clerk's Office an affidavit of service that includes a copy if the notice serves, a list of persons to whom notice was served along with their addresses and the date and manner of service; c) maintain copies of all proofs of claim and proofs of interest filed in these cases; d) maintain official claims registers in these cases by docketing all proofs of claim and proofs of interest in a claims database; e) implement necessary security measures to ensure the completeness and integrity of the claims registers; f) transmit to the Clerk's Office a copy of the claims registers in a weekly basis, unless requested by the Clerk's Office on a more or less frequent basis; g) maintain a current mailing list for all entities that have filed proofs of claim or proofs of interest and make such list available to the Clerk's Office or any party-in-interest upon request; h) provide access to the public for examination of copies of the proofs of claim or proofs of interest files in these cases without charge during regular business hours; i) record all transfers of claims and provide notice of such transfers as required; j) comply with applicable state, federal, municipal and local statutes, ordinances, rules, regulations, orders and other requirements; k) provide temporary employees to process claims, as necessary; l) promptly comply with such further conditions and requirements as the Clerk's Office or the Court may at any time prescribe; m) provide balloting and solicitation services, including preparing ballots, producing personalized ballots and tabulating creditor ballots on a daily basis; and n) provide such other claims processing, noticing, balloting and related administrative services as may be requested from time to time by the Debtors. Donlin Recano will also assist the Debtors on data processing and ministerial administrative functions including: a) the preparation of their schedules, statements of financial affairs and master creditor lists; b) if necessary, the reconciliation and resolution of claims; and c) acting as solicitation and disbursing agent in connection with the chapter 11 plan process. The fees and expenses incurred by Donlin Recano will be treated as an administrative expense of the Debtors' chapter 11 estates and will be paid in the ordinary course of business. Donlin Recano will submit to the U.S. Trustee, copies of invoices it submits to the Debtors for services rendered. Specific rates of Donlin Recano, however, are not disclosed. Tecstar, Inc. manufactures high-efficiency solar cells that are primarily used in the construction of spacecraft and satellite. The Company filed for chapter 11 protection on February 07, 2002 in the U.S. Bankruptcy Court for the District of Delaware. Tobey M. Daluz, Esq. at Reed Smith LLP and Jeffrey M. Reisner at Irell & Manella LLP represent the Debtors in their restructuring efforts. When the company filed for protection from its creditors, it listed estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. TELENETICS CORP: Annual Shareholders' Meeting Set for May 15 ------------------------------------------------------------ The 2002 Annual Meeting of Shareholders of Telenetics Corporation, a California corporation, will be held at 9:30 a.m. local time on May 15, 2002 at 25111 Arctic Ocean, Lake Forest, California 92630 for the following purposes: 1. To elect six directors to the board of directors; 2. To consider and vote upon a proposal to approve an amendment to the Restated and Amended Articles of Incorporation to increase the authorized shares of common stock from 50,000,000 shares to 100,000,000 shares; 3. To ratify the selection of BDO Seidman, LLP as independent certified public accountants to audit the financial statements of Telenetics for the fiscal year beginning January 1, 2002; and 4. To transact such other business as may properly come before the Annual Meeting or any adjournment or adjournments thereof. The board of directors has fixed the close of business on March 25, 2002 as the record date for the determination of shareholders entitled to notice of, and to vote, at the Annual Meeting and all adjourned meetings thereof. Telenetics is exploring the remote regions of data collection. Shifting its focus from heavy-duty wireline modems to industrial wireless monitoring and data collection systems, the company makes systems that automate utility meter reading, oil and gas monitoring, traffic management, and other remote monitoring functions. In addition to its wireless systems, Telenetics continues to offer industrial grade modems and fiber-optic line drivers. The company has also licensed rights to manufacturer Motorola networking products that it markets as its Sunrise Series. Customers include United Parcel Service and General Electric. Former CEO Michael Armani owns about 10% of Telenetics. At June 30, 2001, Telenetics recorded a working capital deficit of $700,000. TOWER AUTOMOTIVE: S&P Downgrades Corporate Credit Rating to BB -------------------------------------------------------------- On March 14, 2002, Standard & Poor's lowered its long-term corporate credit rating on Tower Automotive Inc. to `BB' and removed the rating from CreditWatch where it was placed December 6, 2001. The Grand Rapids, Michigan-based Tower is a supplier of automotive original equipment structural components and assemblies. The credit rating outlook is negative. The downgrade reflects the deterioration in Tower's financial flexibility following a challenging year in which the company has had to deal with declining automotive production, significant launch activity, and delayed program launches by key customers. Standard & Poor's 's believes that 2002 will be another challenging year for Tower and that the company's financial profile will remain weaker than previously expected. The ratings are based on the assumption that Tower will take steps to bolster its financial flexibility over the near term and that restructuring efforts underway will lead to a gradual improvement in operating performance. The ratings on Tower reflect its leading niche position (albeit in a cyclical and highly competitive industry) offset by an aggressive financial profile. Tower is a leading manufacturer of modular vehicle structures and suspension systems for the original equipment automotive industry. Specific products include full-frame and engine cradles, upper-body structural assemblies, suspension systems, mechanical assemblies, and precision stampings. Tower has been experiencing significant earnings pressure due to the slowdown in the North American original equipment automotive market; increased pricing pressures; market share losses by its two largest customers, Ford Motor Co. and DaimlerChrysler; and significant launch costs for new vehicle platforms. These factors led to a significant deterioration in credit protection measures during the past year. In 2001, the company reported a net loss of $267.5 million (including a restructuring and asset impairment charge of $383.7 million). Funds from operations to debt, which was about 29% in 1999, is now estimated to be in the mid- to upper-teen percentage area. Some improvement is expected in credit protections measures this year, although the magnitude will depend to some extent on the market acceptance of several key new platforms. As a result of earnings and cash flow pressures during the past year, Tower faces very tight covenants. In addition, borrowing capacity under its credit lines has been severely curtailed by covenant limitations. The ratings incorporate the expectations that Tower will retain access to credit lines and that it will take steps to increase its borrowing capacity over the near term. The ratings are also based on an expectation that funds from operations to debt (treating the trust preferred securities as equity) will remain at or above current levels and improve such that it will average in the low- to mid-20% area over the course of the business cycle. Debt to EBITDA (adjusted for operating leases and accounts receivable sales and treating the trust preferred securities as equity) is currently about 3.6 times and is expected to moderate to the 3.0x area. Outlook Failure to improve financial flexibility over the near term could lead to further downgrades. TWINLAB CORP: Receives Amendment to Revolving Credit Facility ------------------------------------------------------------- Twinlab Corporation (NASDAQ:TWLB) announced that it has completed an amendment to its Revolving Credit Facility. The amendment, among other things, revised the financial covenant relating to maintaining specified levels of earnings from operations as measured before interest expense, income taxes and depreciation and amortization expense ("EBITDA") for the term of the facility (March 2004) and increased the interest rate on borrowings by 0.25%. Twinlab Corporation, headquartered in Hauppauge, N.Y., is a leading manufacturer and marketer of high quality, science- based, nutritional supplements, including a complete line of vitamins, minerals, nutraceuticals, herbs and sports nutrition products. USG: Prudential Seeks Stay Relief to Pursue Appeal vs. Debtors -------------------------------------------------------------- Karen C. Bifferato, Esq., at Connoly Bove Lodge & Hutz, LLP, brings a Motion on behalf of Prudential Insurance Company of America, and two of its subsidiaries, PIC Realty and 745 Property Investments. Prudential and 745 ask Judge Newsome to modify the automatic stay so they can pursue an appeal to the United States Court of Appeals for the Third Circuit against United States Gypsum Company. Ms. Bifferato relates to Judge Newsome that in October 1987, Prudential sued U.S. Gypsum and other former manufacturers of asbestos containing materials in the United States District Court for the District of New Jersey seeking damages caused by U.S. Gypsum's products in real estate properties owned or formerly owned by Prudential. On June 20, 2001, after 14 years of litigation, and five days before USG Corporation filed for Chapter 11 protection, the Federal Court granted summary judgment in favor of U.S. Gypsum. Prudential seeks a modification of the automatic stay so that it can 1) request the New Jersey Federal Court to certify an Order as a Final Judgment against U.S. Gypsum in accordance with Rule 54(b) of the Rules of Federal Civil Procedure if the United States Court of Appeals for the Third Circuit holds that the June 20, 2001 Order is not final pursuant to 28 U.S.C. Section 1291, and 2) appeal the June 20, 2001 Final Judgment to the United States Court of Appeals for the Third Circuit. She offers that the Motion should be granted because it serves the interest of judicial economy, will not prejudice the bankrupt estates or Debtors, and will facilitate the resolution of a long-standing and substantial claim. The suit originated because Prudential wanted to recover the hundreds of millions of dollars in costs resulting from the presence of the Debtors' products in Prudential's owned or formerly owned properties and the consequent ACM monitoring, abatement and removal. Prudential alleged in Federal Court that defendants, including U.S. Gypsum, engaged in a pattern of racketeering activities in violation of the RICO Act, 18 U.S.C. Section 1961, et seq. Prudential also asserted various state-law claims, principally product liability causes of action, against U.S. Gypsum and the other defendants. The Federal Court action was intensely litigated for the past 14 years. Pretrial discovery was completed in December 1996, the Federal Court entered a Final Pretrial Order. Prior to the Order's entry U.S. Gypsum and several other defendants filed a series of summary judgment motions, including motions seeking: * summary judgment on certain of Prudential's claims arguing that those claims were barred by a 1996 settlement in a Pennsylvania State Court Class Action, and * summary judgment to dismiss Prudential's RICO claims and to dismiss from Federal Court the remaining state-law claims. The Federal Court deferred action on all the motions while Prudential pursued a Petition in the Pennsylvania State Court seeking a declaration that Prudential had effectively opted out of the Pennsylvania State Court Class Action, or alternatively that Prudential should be allowed to opt out nun pro tunc. Prudential's Petition in the Pennsylvania State Court was denied was denied, as were its subsequent appeals, including a Petition for Writ of Certiorari to the United Stated Supreme Court. In March 2000, U.S. Gypsum and the other defendants refiled their summary judgment motions in the Federal Court. The motions were fully briefed and argued. On June 20, 2001, the Federal Court issued its Opinion and Order Granting U.S. Gypsum's Motion for summary judgment. Specifically, the Federal Court 1)dismissed Prudential's RICO claims as barred by the four-year limitations period, 2)granted in part and denied in part U.S. Gypsum's Motion for partial summary judgment dismissing certain of Prudential's claims, finding that those claims had been resolved as part of a settlement in the Pennsylvania State Court Class Action, and 3)dismissed Prudential's remaining state-law claims against U.S. Gypsum from Federal Court without prejudice to be refiled in state court because the Federal Court refused to continue to exercise supplemental jurisdiction. Prudential appealed the June 20, 2001 Order on July 18, 2001. The United States Court of Appeals for the Third Circuit raised the question whether the June 20, 2001 Order was an appealable final order pursuant to 28 U.S.C. Section 1291 and required the parties to brief the issue by August 13, 2001. The parties briefed the issue and a decision from the Appeals Court is still pending. As a side note, Ms. Bifferato explains that, while not directly relevant to this Motion, the Judge should be aware that all the other defendants have sought either Chapter 11 protection under the Bankruptcy Code or dissolved. When Prudential began its suit in 1987, there were eight defendants; * U.S. Gypsum * United States Mineral Products * W.R. Grace & Co.-Conn * Asbestospray Corporation * National Gypsum Company * Celotex Corporation * Keene Corporation and * Pfizer Pfizer was voluntarily dismissed from the case in 1991. National Gypsum, Celotex and Keene each filed for Chapter 11 protection in 1990 and 1991. The Action in Federal Court continued against the non-bankrupt companies, U.S. Gypsum, USMP, Grace and Asbestospray. In 1997 Asbestospray dissolved as a corporation, its remaining insurance coverage was virtually exhausted and counsel would no longer represent it. In April 2001, Grace filed for Chapter 11 Bankruptcy protection. USMP joined in U.S. Gypsum's summary judgment motion concerning the RICO claims. On July 13, 2001, the Federal Court entered a separate Order, dismissing Prudential's RICO claims against USMP and dismissing the remaining state-law claims against USMP for lack of jurisdiction. On July 23, 2001 USMP filed for Chapter 11 protection. Prudential is filing a separate motion, like this one, in the USMP bankruptcy proceeding. Ms. Bifferato states that the Court should modify the automatic stay, as it has the authority and discretion to do so in appropriate circumstances. 11 U.S.C. Section 362(d)(1) says: On request of a party of interest and after notice and a hearing, the court shall grant relief from the stay provided under subsection (a) of this section, such as by terminating annulling, modifying, or conditioning such stay -- (1) for cause. . . . Though Section 362(d) does not define "cause", Ms. Bifferato asserts that case law has established that "cause" is a fact specific inquiry to be determined on a case by case basis. Relief from the automatic stay can be, and often is, granted to allow a pre-bankruptcy litigation in another forum to proceed. COLLIER ON BANKRUPTCY par. 362.07[3][a] (15th ed. 2001). A three part, balancing test is generally used to determine whether cause exists to allow relief from the stay so that a non-bankruptcy litigation can continue in another forum, says Ms. Bifferato. See e.g., Continental Airlines, Inc. v. American Airlines, 152 B.R. 420, 424 (D. Del. 1993). The balancing test considers: * Whether any great prejudice to either the bankrupt estate or the debtor will result from continuation of the civil suit; * Whether the hardship to the non-bankrupt party by maintenance of the stay considerably outweighs the hardship of the debtor; and * The probability of the creditor prevailing on the merits. Ms. Bifferato states that applying the balancing test and the factors identified in that test to the circumstances of Prudential's litigation against U.S. Gypsum, the test strongly supports modifying the stay. Allowing Prudential's appeal will not prejudice the bankrupt estate or Debtor, as at the point of appeal, the Third Circuit has stated: It is generally in the best interests of the Estate to allow an appeal to go forward. Borman, 946 F. 2d at 1037. See also Celotex, 128 B.R. at 482. Prudential has the right to appeal, and it would be most efficient to let it do so. If U.S. Gypsum prevails on appeal, certain substantive claims will be resolved in favor of the estate. The estate has nothing to lose by allowing the appeal to go forward. U.S. Gypsum has already litigated the matter in Federal Court, briefed the issues and is familiar with the law and facts. It will not be prejudicial for U.S. Gypsum to brief and argue the same issues on appeal. The balance of hardship, as well as judicial economy, clearly favors allowing Prudential' appeal to proceed. "Prudential spent hundreds of millions of dollars removing and abating the hazards posed by the ACM manufactured and sold by U.S. Gypsum," Ms. Bifferato reminds Judge Newsome. Prudential has pursued claims to recover those costs for 14 years, and has well-founded and legitimate interests in resolving those long-standing claims. Allowing the appeal now will advance those interests. Prudential will appeal now if the stay is lifted. If it isn't, Prudential will file its claim in the bankruptcy proceedings. If some of those claims are denied by the Federal Court, Prudential will appeal then. Either way, Prudential has a right to appeal, and Ms. Bifferato offers that judicial economy favors lifting the stay now. Prudential has a strong probability of prevailing on the merits of its appeal. The third prong of the test requires only a "slight" showing of probability. The District Court's June 2001 decision is inconsistent with its earlier decision. The Federal Court's finding in 2001, that Prudential knew, or should have known, of its RICO claim at least four years before its claims were asserted in 1987. Nine years earlier, however, Ms. Bifferato recalls, on the identical record, the District Court found that there were disputed issues of material fact precluding summary judgment. The Prudential Ins. Co. et al. v. United States Gypsum Co. et al., Civ. Action No. 87-4227 (D.N.J. 1993). (USG Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 609/392-0900) W.R. GRACE: Seeks Court Approval of Proposed Litigation Protocol ---------------------------------------------------------------- W. R. Grace & Co., and its debtor-affiliates propose a litigation protocol that, they say, is "focused, legally sound and manageable." This protocol will enable Judge Fitzgerald to reach an early decisions on two threshold issues: (A) A threshold issue common to every claim arising out of Grace's Zonolite attic insulation product is whether reliable scientific evidence demonstrates that this product is capable of causing disease. If the evidence proffered by the claimants on this general causation issue is insufficient to satisfy the standards established by the Supreme Court in Daubert v. Merrell Dow Pharms., 509 U.S. 579 (1993), then all of the attic insulation claims against Grace (which may number in the tens of thousands) lack merit as a matter of law and must be dismissed. (B) Similarly, a threshold issue common to all bodily injury claims is whether the Grace products to which claimants were exposed (e.g., Monokote-3, 4 and 5) are capable of causing disease. Absent reliable scientific evidence that these products cause disease, claims for exposure to these products must be dismissed. If this Daubert proceeding resulted in a finding that ZAI claimants lack such reliable scientific evidence, ZAI claims would be precluded on several grounds, including the absence of any product or design defect, lack of causation, and the economic loss doctrine. With respect to the traditional asbestos property damage claims (primarily MK-3 claims), many claims may be barred by the statute of limitations under the doctrine of constructive notice, and there's a Daubert question about whether there is reliable scientific evidence that MK-3 poses an unreasonable risk to building occupants. The Debtors say that, contrary to the PD Committee's assertion, these issues are not too individual for common resolution; the Debtors' reliance on Daubert summary judgment proceedings and, if necessary, common-issue trials is neither novel nor unprecedented, and the proposed appointment of a ZAI claimant committee would not preclude other claimant counsel from participating. The Debtors claim that, rather than litigating these common issues, the PD Committee would prefer that Judge Fitzgerald simply assume the validity of the traditional property damage claims through an estimation process that relies on statistical extrapolation from Grace's prepetition settlements. However, the Federal Rules forbid the use of prior settlements to establish liability, say the Debtors. Nor would it be possible to confirm a plan of reorganization in these cases without addressing these disputed liability issues. Grace's shareholders are entitled to a finding of the actual value of asserted asbestos claims, based on all available defenses, before any conclusion can be reached by Judge Fitzgerald as to whether a proposed plan provides for a distribution to asbestos claimants greater than their claims merit. The PD Committee is said by the Debtors to be also wrong when it asserts that the Bankruptcy Code is the exclusive mechanism for reorganizing companies with asbestos liabilities. The Code merely sets forth certain tests which, when satisfied, will authorize a channeling injunction to protect the debtor and other entities from present and future asbestos claims. Nothing in the Code limits or supersedes a court's authority to issue injunctions or exercise other powers in connection with a plan of reorganization outside the scope of the Code channeling section. Nor is there anything in the language of that section that restricts claims allowance and disallowance process prior to confirmation of a chapter 11 plan. To the contrary, the fact that a Code trust requires the approval of at least 75% of those claimants voting necessarily implies that the Debtors retain the authority to move for allowance or disallowance of invalid claims; otherwise the success or failure of the vote on the trust could be decided by those with meritless claims. The Debtors' proposed asbestos property damage litigation protocol would proceed along two parallel tracks, one for ZAI claims litigation, and one for traditional property damage claims. To implement this protocol, the Debtors ask that Judge Fitzgerald adopt the Debtors' proposed case management schedule. ZAI Litigation Track (1) The Debtors ask Judge Fitzgerald to schedule the period from June 1, 2002, through November 29, 2002, for discovery regarding whether ZAI poses an unreasonable threat of harm. Unless good cause were shown to extend this discovery period, no ZAI discovery with a response date of later than November 29, 2002, would be allowed. (2) The Debtors will file omnibus objections, a consolidation motion, and related Daubert/summary judgment motions based on the absence of a reliable scientific basis for the alleged risk of harm from ZAI. The Debtors ask that Judge Fitzgerald approve January 2, 2003, as the date for submission of the Debtors' omnibus objections and Daubert/summary judgment motions, February 3, 2003, as the date for the claimants' response, and February 27, 2003, as the date for the Debtors' reply. The Debtors ask that a hearing on the summary judgment motions be held shortly thereafter. In the event that Judge Fitzgerald finds material, disputed facts, the Debtors ask that a common-issue bench trial be conducted early in 2003 to decide the unresolved issues. Asbestos Property Damage Litigation Track (1) As part of its preliminary report, the Debtors will identify, with respect to asbestos property damage claims, (i) already pending cases that could continue to be litigated in other courts, subject to regular reporting to Judge Fitzgerald; (ii) claims subject to statute of limitations defenses; (iii) claims subject to res judicata defenses; and (iv) claims subject to a Daubert motion based on a lack of reliable scientific based for the alleged product risk. (2) The Debtors ask that, with respect to asbestos property damage claims, Judge Fitzgerald approve February 3, 2003, as the deadline for submission of the Debtors' summary judgment motion with respect to the issue of the statute of limitations under the constructive notice doctrine with respect to res judicata issues, and that briefing be completed in time for a hearing in April 2003. (3) The Debtors also ask that discovery concerning the scientific support for the allegation of Monokote product risk occur from February 2003 through September 2, 2003; and that the Debtors file omnibus objections and related Daubert/summary judgment motions on September 15, 2003. (4) After hearing on the Debtors' omnibus objections and Daubert/summary judgment motions, any unresolved issues with respect to asbestos property-damage claims will be set for a bench trial beginning in the fourth quarter of 2003. The trial would resolve any remaining Daubert issues and any other unresolved common issues, such as statute of limitations, causation, the economic loss doctrine, and product risk. (W.R. Grace Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 609/392-0900) WILLIAMS SCOTSMAN: S&P Rates $500M & $200M Secured Loans at BB- --------------------------------------------------------------- Standard & Poor's on March 13, 2002, assigned its 'BB-' rating to Williams Scotsman Inc.'s $500 million secured revolving credit facility and $200 million secured term loan, both of which mature on December 31, 2006. At the same time, Standard & Poor's placed its corporate credit rating of `B' for the mobile- office lease company on CreditWatch with positive implications. The CreditWatch placement is based on the company's improved financial flexibility should the new facilities be successfully placed, as well as the recent placement of $150 million of unsecured notes. The ratings on the revolving credit facility and term loan assume the successful placement of the notes. The corporate credit rating reflects Williams Scotsman's strong number-two position in the somewhat recession-resistant mobile- office leasing business, offset by an aggressive financial profile. The Baltimore, Maryland-based company's fleet consists of close to 94,000 units leased through a North American network of 88 locations. The company's market share is about 25%, second to GE Capital Modular Space (approximate 28% market share), with the third-largest competitor trailing at less than one-third of Williams Scotsman's market share. Williams Scotsman and GE Capital Modular Space are the only two national companies, with the balance of the industry highly fragmented. Mobile-unit leasing tends to be somewhat recession-resistant due to the wide customer base that operates in approximately 470 industries, including construction, education, healthcare, and retail. Leasing mobile-office units for certain purposes offers customers flexibility and lower costs over building permanent facilities. In addition, Williams Scotsman has the flexibility to redeploy assets to different geographic areas to fit supply and demand. As a result, the company's utilization rates have been relatively stable, in the low-to-mid 80% range, resulting in predictable and stable cash flow. Williams Scotsman's financial profile remains relatively weak due to increasing levels of debt to expand its fleet. Pretax interest coverage has averaged in the mid-1x area, EBITDA coverage at around 2x, and funds from operations to debt at around 10%. These are all adequate for the rating category, but substantially below levels achieved by higher-rated transportation equipment lessors. The company's debt to capital is still in excess of 100%, due to negative equity as a result of its recapitalization in 1997. However, the equity deficit is narrowing and will likely turn positive in 2002. The company's financial flexibility, adequate for the rating, is significantly weaker than that of its major competitor, GE Capital Modular Space, due to its privately held status, limited access to the capital markets, and significant portion (approximately 39%) of assets encumbered. Continued strong demand for mobile-office units should result in stable cash flow, with current ratings likely to support increased capital spending or acquisitions if demand warrants. However, if demand were to weaken, Williams Scotsman has the ability to reduce capital spending to maintain its strong utilization levels, as well as its credit ratios. Therefore, the company's financial profile is expected to remain relatively consistent over the next few years despite capital spending levels. WOLVERINE TUBE: S&P Concerned About Weakening Cash Flow Measures ---------------------------------------------------------------- On March 13, 2002, Standard & Poor's lowered its ratings to 'BB-' on Wolverine Tube Inc., reflecting the likelihood that challenging market conditions will keep cash flow protection measures at weak levels for several years. The ratings on Wolverine remain on CreditWatch with negative implications, pending outcome of the company's negotiations to refinance its $200 million revolving credit agreement which expires April 30, 2002. About $100 million is outstanding under that facility. The new corporate credit rating would be affirmed if Wolverine's refinancing actions result in a satisfactory level of financial flexibility and liquidity. Wolverine's credit quality incorporates a business profile with defensible positions in niche segments, offset by a narrow product line, cyclical markets, significant customer concentration, and a moderately aggressive use of debt. Wolverine, a major manufacturer of custom engineered, value- added copper and copper alloy tubing, holds leading market shares in commercial products, which account for about 68% of pounds shipped and roughly 80% of gross profits. The largest market is the heating, ventilation, and air conditioning industry, with a significant amount of activity related to the ordinary replacement of unitary air conditioners. Sales of these products are sensitive to cooling season weather patterns. Wolverine also holds a large share of the global market for copper technical tubing used to increase heat transfer in large commercial chiller systems. Still, more than 55% of sales are derived from consumer appliance, automotive, industrial and heavy equipment, plumbing wholesalers, and other industries. Maintenance of the company's competitive position should be sustained by its technical expertise, breadth of product offerings, long-established customer relationships, and an expanding global presence. Key business drivers include: * ongoing demand for environmentally friendly refrigerants and more energy-efficient equipment; * increasing demand for fabricated products because of the trend toward outsourcing by many of Wolverine's customers; * general economic conditions; * and further globalization of activities (25% to 30% of sales are outside the U.S.) at the request of North American customers. Earnings in a number of markets were severely hurt by the U.S. recession, especially large commercial air conditioning equipment, and heavy industrial and general industrial applications. Continuing economic weakness will probably prevent results from experiencing any recovery this year. An earnings rebound is expected in 2003, because of better economic conditions with their beneficial impact on all product lines. Operating margins have eroded in recent years to less than 9%, reflecting in part lower volumes and pricing for technical tubing. But on the plus side, a considerable portion of the cost of goods sold reflects the cost of copper, which is generally passed along to customers. Return on capital has experienced sharp deterioration to about 6%, as a result of depressed profitability and an elevated debt load. Capital outlays for 2002 are likely to be much lower than the $28 million of the previous year. Nevertheless, given the current earnings environment, debt reduction from aggressive levels will be difficult this year. Consequently, the funds from operations to total debt ratio is expected to remain in the low end of the 10% to 15% range over the near term. An economic rebound should lift that measure to the appropriate 15% to 20% range in the next few years. Total debt to EBITDA is also expected to improve from the aggressive 5.0 times to a more appropriate level of less than 3.5x. * Full-Day Asbestos Seminar in New York City on March 26 -------------------------------------------------------- Claims Resolution Management Corporation (CRMC), a pioneer in asbestos claims resolution, and Tillinghast-Towers Perrin, an actuarial and management consulting firm for financial services companies, announce a joint seminar entitled "The $200 Billion Question: Understanding the Financial Impacts of Asbestos Litigation" to be held on Tuesday, March 26, in New York City. The seminar will educate financial analysts, insurers, reinsurers and auditors on the growing financial asbestos crisis, estimated at $200 billion in liabilities in the U.S. alone. "Asbestos litigation is one of the most critical issues facing businesses today, and much more far-reaching than the Enron bankruptcy, yet relatively few in the business community understand the asbestos debate and how it will affect them financially," said David Austern, President of CRMC. "With decades of experience in asbestos litigation, bankruptcy, claims processing and forecasting, we've assembled the country's leading experts so that attendees can better understand this complicated topic and its financial impact." With the number of asbestos claims growing and an increasing number of companies facing litigation and bankruptcy, professionals within the financial and insurance industries must understand the factors driving this growth, what companies are likely to be affected, and the cost to companies, employees, investors, and insurance and reinsurance companies. Experts will discuss these topics in addition to examining the history and current status of asbestos litigation, trends in personal injury claims, forecasting, the status of existing bankruptcies, how liabilities affect insurance companies, legislative developments, as well as the effects of asbestos litigation on the bottom line of a company. This all-day seminar will also include a luncheon keynote presentation from Tillinghast-Towers Perrin Principal David Powell on the financial impact of the September 11 World Trade Center tragedy. For more information on this groundbreaking seminar, please contact Angela A. Alexander at 623/856-5145 or alexana@towers.com, or visit the Tillinghast-Towers Perrin Web site at www.tillighast.com. About Tillinghast-Towers Perrin Tillinghast-Towers Perrin provides management consulting to financial services companies worldwide. In addition, its health sector practice consults to organizations that finance and manage health care risks. The company consultants help clients improve business performance through quantitative analysis, insight and execution. Tillinghast-Towers Perrin is part of Towers Perrin, one of the world's largest independent consulting firms, with nearly 9,000 employees and 78 offices in 74 cities worldwide. Additional information is available at www.tillinghast.com. About Claims Resolution Management Corporation (CRMC) Claims Resolution Management Corporation (CRMC), a pioneer in asbestos claims processing, guides trusts and law firms through all stages of the claims resolution process for asbestos and other toxic tort personal injury claims, contribution claims, and indemnity claims. CRMC has processed more than a half-million claims and has paid claimants over $2.7 billion. e-ClaimsT is the first interactive, Web-based tool to provide business intelligence and electronic claims handling services, which encompass everything from litigation and structuring of a trust to injury categorizations, claims forecasting and financial management. CRMC was created in 1999 as a separate entity to handle claims processing for the Manville Personal Injury Settlement Trust (the Trust), formed in 1989 after the bankruptcy of the Johns- Manville Corporation, the largest asbestos producer in the United States. Staffed by former Trust employees, CRMC provides clients such as the PACOR, Eagle-Picher and UNR trusts with the knowledge, expertise, extensive data and solutions gained from 14 years' experience processing asbestos claims. CRMC's profits are channeled back into the Trust and go to asbestos victims. For more information, go to http://www.claimsres.com ********* 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, Donnabel C. Salcedo, Ronald P. Villavelez and Peter A. Chapman, Editors. Copyright 2002. All rights reserved. ISSN: 1520-9474. 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