/raid1/www/Hosts/bankrupt/TCR_Public/020419.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, April 19, 2002, Vol. 6, No. 77
Headlines
AAVID THERMAL: Balance Sheet Upside Down By $48.6MM As Of March
ADELPHIA BUSINESS: Retains Ordinary Course Professionals
ADELPHIA COMMUNICATION: SEC Issues Formal Order of Investigation
APPLIEDTHEORY CORPORATION: Files For Chapter 11 Protection
ATLAS: Exits Bankruptcy & Rebuilds Under New Corporate Structure
AUXER GROUP: Board Endorses Telecom Unit's Dissolution In Del.
BURLINGTON INDUSTRIES: Engages Hilco As Real Estate Agent
CALL-NET ENTERPRISES: S&P Rates $377 Million Senior Notes At B+
CALL-NET ENTERPRISES: Completes $25M Private Placement to Sprint
CALYPTE BIOMED: Winding Down Operations, May File For Bankruptcy
CARIBBEAN PETROLEUM: Wants to Hire Lavandero As Special Counsel
CEDARA SOFTWARE: Appoints Ramkumar & Millerick As New Directors
COMDISCO INC: Selling New Jersey Property to Omega for $2.37MM
CONE MILLS: S&P Cuts Credit Rating to CCC+ on Liquidity Concerns
CONTOUR ENERGY: May File For Bankruptcy If Debt Workout Fails
COVANTA ENERGY: Seeks Court Nod On $463 Mil DIP Financing Pact
CYGNIFI DERIVATIVES: Securing Further Co-Exclusivity Extension
DETROIT MEDICAL CENTER: Fitch Affirms $569MM Bonds Rating at BB+
DELTA FINANCIAL: Sets Annual Shareholders' Meeting on May 15
EARTHCARE: EarthLiquids Acquisition by USFilter to Move Forward
ENRON: Examiner Applies to Retain Goldin as Financial Advisor
EXIDE TECH.: Proposes To Establish Contract Rejection Protocol
EXIDE TECHNOLOGIES: Court Grants Access To $200MM DIP Financing
FIRST SOUTHERN: Nasdaq To Delist Shares On April 24
FISHER COMMS: Robin Campbell Discloses 10.4% Equity Stake
FISHER SCIENTIFIC: S&P Ups Rating to BB- on Stronger Cash Flows
FLAG TELECOM: Bondholders Demand Return Of $210 Million Transfer
FOCAL COMMS: Ernst & Young Replaces Arthur Andersen as Auditors
GMS TECHNOLOGIES: Voluntary Chapter 11 Case Summary
GENSYM CORPORATION: Taps PricewaterhouseCoopers As Accountants
GLOBAL DIAMOND: Knight Securities Discloses 14.5% Equity Stake
GRAHAM PACKAGING: Sells Entire Operations in Italy
HCI DIRECT: Wants to Appoint Innisfree as Noticing Agent
HUDSON RCI: Misses Interest Payment On 9-1/8% Senior Sub. Notes
I.P.C. GROUP: A.M. Best Downgrades Financial Rating To C From B+
INTEGRATED HEALTH: Seeks to Stretch Time Make Leases Decisions
KAISER: Asbestos Claimants Sign-Up Campbell & Levine as Counsel
LEVI STRAUSS: Fitch Lowers Senior Unsecured Debt Rating to B+
MCLEODUSA INCORPORATED: Emerges From Chapter 11 Bankruptcy
METRIS COS.: Fitch Cuts Credit Facility & Sr. Debt Ratings to B+
NATIONSRENT: Citizens Leasing Presses For $11 Mil Debt Payment
OCEAN POWER: Cornell, et al., Register 13.7MM Shares for Sale
ON SEMICONDUCTOR: Posts $50 Million First Quarter Net Loss
OPTICON MEDICAL: Secures DIP Financing to Fund Reorganization
ORBITAL IMAGING: Creditors Will Convene on May 8 in Virginia
PACIFIC GAS: Chairman Addresses Shareholders at Annual Meeting
PENTASTAR COMMS: Ceases Operations; Company Officers Resign
PHASE2MEDIA: Exclusive Plan Period Extended to April 30
RISCOMP INDUSTRIES: Case Summary & Largest Unsecured Creditors
QUESTRON TECHNOLOGY: GE Supply Wins Bid For All Assets
SAFETY-KLEEN: Waste Management's CWMI Unit Shows-Up in Court
SERVICE MERCHANDISE: Asks to Extend Grubb's Term Until April 30
STONERIDGE INC: S&P Rates Proposed $200MM Senior Notes at B
TEMBEC: Sees Higher Net Loss In Second Quarter
US AIRWAYS: Stockholders' Meeting Set For May 15 At Washington
VENTAS INC: Closes Senior Note Offering and New Credit Facility
VITECH AMERICA: Knight Securities Has 10.4% Equity Interest
WCI COMMUNITIES: S&P Assigns B Rating To $200MM Senior Sub Notes
WASTE SYSTEMS: Court Stretches Lease Decision Period to July 5
WACKENHUT CORP: Reports Losses Related To Chilean Operations
WILLCOX & GIBBS: Asks Court To Extend Exclusive Period to July 2
WINSTAR COMMS: Qwest Wants To Terminate Interconnection Pacts
ZAP: Disclosure Statement Hearing Scheduled For Today
* BOOK REVIEW: The Luckiest Guy in the World
*********
AAVID THERMAL: Balance Sheet Upside Down By $48.6MM As Of March
---------------------------------------------------------------
Aavid Thermal Technologies, Inc., a leading provider of thermal
management solutions and developer of computational fluid
dynamics software, announced operating results for the year
ended December 31, 2001 and preliminary results for the first
quarter ended March 30, 2002.
For the year ended December 31, 2001, total sales were $208.8
million, or 28.9% lower than the $293.6 million reported in the
prior year. Sales for the Company's software subsidiary, Fluent,
were $66.6 million, or 14.8% higher than the $58.0 million in
sales reported for 2000. Sales for the thermal management group,
Aavid Thermalloy, totaled $142.2 million in 2001, or 39.6% lower
than prior year sales of $235.6 million. The Company's Adjusted
EBITDA (adjusted earnings before interest, taxes, depreciation
and amortization, non-cash charges and non-recurring charges)
for the year ended December 31, 2001, was $8.9 million, compared
with $40.6 million for the year ended December 31, 2000.
The Company's audited financial statements contain a number of
notable items for the year ended 2001 which include the
following: (1) the Company took an impairment charge against its
intangible assets, including goodwill, of $116.6 million in
accordance with Statement of Financial Accounting Standards No.
121 (SFAS 121); (2) the Company recorded restructuring costs
during 2001 in its thermal management division totaling $17.0
million in order to reduce the Company's cost structure, and to
size the business to a level appropriate to current economic
conditions; and (3) solely due to the Company's non-compliance
with certain bank financial covenants, the Company had to re-
classify $169.9 million of long term debt as current in the
December 31, 2001 balance sheet; however, since December 31,
2001, the Company has entered into a forbearance agreement with
its senior lenders, and intends to resolve the covenant issues
prior to the end of the second quarter.
For the first quarter of 2002, total sales for the Company were
$47.3 million, approximately equal to the $47.4 million in sales
for the fourth quarter of 2001 and $14.4 million less than the
$61.6 million in sales reported for the first quarter of 2001.
Sales for the Company's software subsidiary, Fluent, were $20.8
million, or 14.9% higher than the $18.1 million in sales for the
fourth quarter of 2001, and 17.1% higher than first quarter 2001
sales of $17.7 million, which is consistent with its prior
growth rate. First quarter 2002 sales for the thermal management
group, Aavid Thermalloy, totaled $26.5 million, or 9.7% lower
than the prior quarter's sales of $29.4 million and 39.6% lower
than the $43.9 million in sales reported for the first quarter
of 2001.
The Company's Adjusted EBITDA for the first quarter of 2002 was
$6.5 million. This represents a $5.2 million increase from the
$1.3 million of Adjusted EBITDA for the fourth quarter of 2001
as well as a $0.5 million increase from the $6.0 million
reported in the first quarter of 2001. The Company attributes
the improved Adjusted EBITDA to its restructuring activities
taken during 2001 at Aavid Thermalloy and continued strong
performance by Fluent. In addition, the thermal management
division had a positive book to bill ratio for the entirety of
the first quarter of 2002.
The company's balance sheet shows that as of March 30, 2002,
Aavid only has total assets of $173,038,000 compared to total
liabilities of $221,672,000.
Company Background
Aavid Thermal Technologies, Inc. is a leading provider of
thermal management solutions for dissipating potentially
damaging heat from digital and industrial electronics, and
computational fluid dynamics (CFD) software, which permits
computer modeling and flow analysis of products and processes
that would otherwise require time-consuming and expensive
physical models and the facilities to test them.
Aavid serves a highly diversified range of markets, principally
in North America, Europe and the Far East.
Additional information on Aavid Thermal Technologies is
available on the World Wide Web at http://www.aatt.com
ADELPHIA BUSINESS: Retains Ordinary Course Professionals
--------------------------------------------------------
The Adelphia Business Solutions, Inc., and its debtor-affiliates
Debtors sought and obtained authority to retain Ordinary Course
Professionals that are used by the Company in the ordinary
course of their businesses. This authorization dispenses with
the requirement for the Debtors to submit separate employment
applications, affidavits, and secure separate retention orders
for each individual non-bankruptcy professional.
Judge Gerber also permits the Debtors to pay each Ordinary
Course Professional, without a prior application to the Court,
100% of the fees and disbursements incurred. This is upon the
submission to, and approval by, the Debtors of an appropriate
invoice setting forth, in reasonable detail, the nature of the
services rendered and disbursements actually incurred. This can
be up to the lesser of $30,000 per month per Ordinary Course
Professional or $300,000 per month, in the aggregate, for all
Ordinary Course Professionals.
If an Ordinary Course Professional seeks more than $30,000 per
month in fees, Judy G.Z. Liu, Esq., at Weil Gotshal & Manges LLP
in New York, New York, relates that the professional is required
to file a fee application for the full fee amount. This filing
must be in accordance with Sections 330 and 331 of the
Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, the
Local Bankruptcy Rules, the Fee Guidelines promulgated by the
United States Trustee, and any and all orders of the Court.
In addition, each Ordinary Course Professional must provide to
the Office of the United States Trustee and the Debtors and file
with the Court these documents. Such documents must be provided
within 15 days after the entry of an order granting this Motion
or after the engagement of the professional by the Debtors:
A. an affidavit certifying that the professional does not
represent or hold any interest adverse to the Debtors or
their estates with respect to the matter on which the
professional is to be employed and
B. a completed retention questionnaire.
The Debtors reserve the right to supplement the list of Ordinary
Course Professionals from time to time as necessary. In such
event, Ms. Liu states that the Debtors propose to file a notice
with the Court stating that the Debtors intend to employ
additional Ordinary Course Professionals and to serve the
notices on:
A. the Office of the United States Trustee for the Southern
District of New York,
B. the attorneys for an informal committee of holders of 12%
Senior Secured Notes due 2004 issued by ABIZ,
C. the attorneys for the statutory committee of unsecured
creditors appointed in these cases,
D. the attorneys for the Debtors' post-petition lenders, and
E. all other parties that have filed a notice of appearance in
these Chapter 11 cases.
Although certain of the Ordinary Course Professionals may hold
unsecured claims against the Debtors for pre-petition services
rendered to the Debtors, Ms. Liu does not believe that any of
the Ordinary Course Professionals has an interest adverse to the
Debtors, their creditors, or other parties-in-interest on the
matters for which they would be employed. Thus, all of the
Ordinary Course Professionals proposed to be retained meet the
special counsel retention requirement under Section 327(e) of
the Bankruptcy Code.
Ms. Liu assures the Court that all other professionals used by
the Debtors in the prosecution of these Chapter 11 cases will be
retained by the Debtors pursuant to separate retention
applications. The professionals will be compensated in
accordance with the applicable provisions of the Bankruptcy Code
and the Bankruptcy Rules.
According to Ms. Liu, the Debtors desire to continue to employ
the Ordinary Course Professionals to render services to their
estates similar to those services rendered prior to the
Commencement Date. These professionals perform a wide range of
legal, accounting, tax, real estate, finance, telecommunications
consulting, public relations, and other services for the Debtors
that impact the Debtors' day-to-day operations. It is essential
that the employment of the Ordinary Course Professionals, many
of whom are already familiar with the Debtors' affairs, be
continued on an ongoing basis so as to avoid disruption of the
Debtors' day-to-day business operations.
The Debtors submit that the proposed employment of the Ordinary
Course Professionals and the payment of monthly compensation on
the basis set forth above are in the best interest of their
estates and their creditors. Ms. Liu submits that the relief
obtained will save the estates the substantial expenses
associated with applying separately for the employment of each
professional and will avoid additional fees for the preparation
and prosecution of interim fee applications. Likewise, the
procedure outlined above will relieve the Court and the United
States Trustee of the burden of reviewing numerous fee
applications involving relatively small amounts of fees and
expenses.
The Debtors submit that, in light of the additional cost
associated with the preparation of employment applications for
professionals who will receive relatively small fees, it is
impractical and inefficient for the Debtors to submit individual
applications and proposed retention orders for each Ordinary
Course Professional. Accordingly, the Court dispenses with the
requirement of individual employment applications and retention
orders with respect to each Ordinary Course Professional
retained from time to time as of the Commencement Date.
(Adelphia Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
ADELPHIA COMMUNICATION: SEC Issues Formal Order of Investigation
----------------------------------------------------------------
Adelphia Communications Corporation (Nasdaq: ADLAE; formerly
ADLAC) has been informed by the Staff of the Securities and
Exchange Commission that the SEC has issued a formal order of
investigation in connection with the matters that are the
subject of Adelphia's previously disclosed SEC inquiry.
Adelphia Communications Corporation, with headquarters in
Coudersport, Pennsylvania, is the sixth-largest cable television
company in the country.
APPLIEDTHEORY CORPORATION: Files For Chapter 11 Protection
----------------------------------------------------------
AppliedTheory Corporation (Nasdaq: ATHY), the Internet
knowledge, development and managed hosting partner for hundreds
of large corporations and government agencies, announced that it
has filed voluntary petitions for reorganization under Chapter
11 of the U.S. Bankruptcy code. As part of the filing,
AppliedTheory announced that it has entered into separate
agreements with FASTNET Corporation (Nasdaq: FSST) to purchase
the company's network business, and with ClearBlue Technologies,
Inc. to purchase AppliedTheory's managed hosting services
business. Both contracts are subject to confirmation and
auction processes in the Chapter 11 proceeding.
AppliedTheory also announced that it has received a tentative
commitment for immediate debtor-in-possession financing, subject
to court approval, which will be used to fund post-petition
operating expenses, supplier obligations and personnel costs.
AppliedTheory CEO Danny E. Stroud reiterated that the company is
operationally strong and that providing consistent, world-class
customer service remains the foremost priority and focus.
AppliedTheory maintains a significantly strong leadership
position in the managed hosting services and related
applications development industry, with large enterprise
customers including the New York Department of Labor, the US
State Department, AOL Time Warner, Ingersoll-Rand, New York City
Health and Hospitals Corporation, the Denver Broncos and the
State of Hawaii.
"AppliedTheory's combination of industry legacy, loyal customer
base, dedicated employees and focused business model are
tremendous assets that we hope to leverage toward a speedy and
successful reorganization," said Stroud. "Over the last year, we
have acted assertively in response to very difficult economic
situations by closing unprofitable regional offices,
streamlining our workforce, and tightening our belt around
general administrative and operating expenses. By reorganizing
our capital structure AppliedTheory will be positioned to emerge
from Chapter 11 in its historical role as a leader in managed
hosting services."
The company said it is committed to keeping employees,
customers, shareholders and suppliers apprised of its progress
in this plan, and will make subsequent announcements relating to
the Chapter 11 reorganization as quickly as possible.
Industry pioneer AppliedTheory combines its unparalleled
knowledge base with the ability to build, integrate and manage
Internet business solutions in an increasingly complex online
economy. AppliedTheory's proactive responsiveness to changing
business requirements has earned the company a 95 percent
retention rate from customers that include AOL, America's Job
Bank and Ingersoll-Rand. The company offers a comprehensive and
fully integrated suite of managed hosting, connectivity and
security services, providing one of the industry's most reliable
single sources for large enterprise Internet needs. For
additional information about the company, visit
http://www.appliedtheory.com
ATLAS: Exits Bankruptcy & Rebuilds Under New Corporate Structure
----------------------------------------------------------------
Atlas Minerals Inc. releases its financial results for the year
ended December 31, 2001. The Company reports current assets of
$2.24 million and current liabilities of $.87 million, the
majority ($0.65 million) of which consists of payments to be
made to creditors as the result of future sales of certain non-
operating assets.
Over the last several months the Company has successfully
settled all outstanding lawsuits it had against various
insurance carriers for their failure to cover certain
environmental costs previously incurred by the Company. All of
these lawsuits arose as the result of the Company's need to
permit and implement remediation activities to mitigate alleged
environmental impact at the Company's past-producing uranium
processing mill located in Utah. Since mid-November, settlement
agreements have been reached with eight such insurance carriers
resulting in net cash to the Company, after payment of legal
fees and required distributions to creditors, of approximately
$1.2 million as of April 12, 2002.
The Company is also pleased to announce that effective December
31, 2001, the United States Bankruptcy Court for the District of
Colorado ordered that the Chapter 11 bankruptcy proceeding,
which the Company filed in September 1998, be closed.
According to Mr. Gary E. Davis, President of the Company, "these
successful insurance settlements are a tribute to the hard work
by the Company's staff, insurance advisors, and legal counsel.
With these proceeds, essentially all residual payables to
creditors associated with this environmental litigation will be
eliminated and, coupled with its emergence from bankruptcy, the
Company can now proceed with rebuilding into a profitable
operating entity."
In a separate action, an agreement has been reached with certain
Bolivian entities for the assumption by them of all of the
Company's remaining Bolivian assets and liabilities associated
with the Company's subsidiary, Arisur Inc., and its Andacaba
mine/mill complex. Although the Company's previous management
had announced in March 2001 that it had defaulted on the loans
to Arisur Inc. and essentially walked away from these
operations, there remained unquantifiable liabilities associated
with social payments to the miners. The Company believes that
this new agreement has now completely removed the Company from
Bolivia and all remaining uncertainties surrounding its previous
operations there.
In September 2001, the Company made sweeping changes both in its
management and in the composition of its Board of Directors. It
is the intention of the current management to remain in the
business of development and exploitation of natural resource
properties. Management's current efforts are being directed
toward the identification of possible acquisition opportunities
of smaller-scale properties, primarily in the sectors of
industrial minerals, base metals, precious metals and
oil/natural gas.
Commenting further on the Company's status, Mr. Davis said,
"these are exciting times for Atlas. It is not every company
that has the opportunity to start over with such a clean balance
sheet and with cash adequate to allow it to seriously look at
operating properties. I am pleased to be in the position to
contribute to raising Atlas from the ashes, a company (Atlas
Corporation) that was first listed on the NYSE in 1936 and that
has such a rich heritage."
AUXER GROUP: Board Endorses Telecom Unit's Dissolution In Del.
--------------------------------------------------------------
On March 18, 2002, the Auxer Group's wholly owned subsidiary,
Auxer Telecom Inc., was dissolved with the Delaware Secretary of
State. This action was approved by Auxer's Board of Directors on
March 15, 2002. Auxer Telecom was one of two wholly owned
subsidiaries in the Company's telecom group. CT Industries,
Inc. is the remaining telecom subsidiary.
The Auxer Group, Inc. is a holding company that trades on the
OTC Bulletin Board under the symbol AXGI. The company's
headquarters are in West Paterson, New Jersey. The Company has
formed two (2) groups with focuses on Telecommunications and
Automotive industries.
Auxer's December 2001 Balance Sheet reports a stockholders'
equity deficit of about $1.7 million.
BURLINGTON INDUSTRIES: Engages Hilco As Real Estate Agent
---------------------------------------------------------
Burlington Industries, Inc., and its debtor-affiliates seek the
Court's authority to employ and retain Hilco Real Estate LLC as
real estate consultants in these Chapter 11 cases.
Burlington Industries Senior Vice President John D. Englar tells
the Court that Hilco has a widespread reputation as a
diversified real estate consulting and advisory firm with
national commercial experience and has successfully marketed
real estate in a number of bankruptcies and out-of-court
restructurings, including the evaluation and disposition of more
than 153,000,000 square feet of leased and owned commercial
properties.
The Debtors anticipate that Hilco will provide these services:
(a) meeting with the Debtors to ascertain the Debtors' goals,
objectives and financial parameters;
(b) developing and designing a marketing program, consistent
with the real estate portion of a proposal dated February
25, 2002, for the sale of certain of the Debtors' owned
properties;
(c) identifying prospective purchasers of the Owned
Properties;
(d) coordinating and organizing a dual-bidding procedures and
sale process so as to maximize the attendance of all
interested bidders for the sale of the Owned Properties;
(e) at the Debtors' direction and on the Debtors' behalf,
negotiating the terms of purchase agreements for the sale
of the Owned Properties;
(f) providing to the Debtors, on a bi-monthly basis, a list
of all activity with respect to each Owned Property,
including the time and date of each showing of the Owned
Property and the identity of each prospective buyer;
(g) developing and implementing a comprehensive property
marketing plan by May 8, 2002; and
(h) performing such other services as may be requested by the
Debtors.
Pursuant to the Consulting Agreement dated April 8, 2002 between
the Debtors and Hilco, Hilco intends to charge for its
professional services rendered to the Debtors on these terms:
Gross Proceeds: Upon the closing of the disposition of the Owned
Properties, Hilco will be paid a fee equal to a
portion of the total amount of cash paid by the
buyers of the Owned Properties to the Debtors in
accordance with this fee structure:
-- 2% of the first $5 million;
-- 4% of all amounts between $5-mil and $10-mil;
-- 5% of all amounts between $10-mil and $19-
mil;
-- 7% of all amounts above $19 million.
Statesville
Plant and
Warehouse: As of December 17, 2001, Burlington granted the
real estate firm of Barlow & Triplett Realty
Company Inc. of Lenoir, North Carolina the right
to show a manufacturing plan and warehouse
located in Statesville, North Carolina to one of
B&T's clients for a period of six months. B&T
is entitled to a sales commission is the Client
is the buyer of the Statesville Properties. In
such event, Hilco will not receive any
compensation for such sale; provided, however,
that Burlington will reduce each tier of the
Commission Fee by an amount equal to the gross
proceeds of any such sale. In addition, if
Hilco identifies a buyer of either or both
Statesville Properties, offering a purchase
price equal to or greater than the Client, then
Hilco will be entitled to its full commission,
regardless of whether or not the buyer
identified by Hilco is the ultimate buyer.
Mount Olive
Plant: Burlington is in the process of negotiating the
sale of a plant located in Mount Olive, North
Carolina to a buyer located by Burlington. If
Hilco locates an alternative buyer willing to
purchase the Mount Olive Plant at a higher price
than currently being offered by the Buyer to
Burlington, Burlington may, in its sole
discretion, elect to sell the Mount Olive Plant
to the Alternative Buyer. In such event, the
Commission Fee will be modified as:
-- 2% of the first $5 million;
-- 4% of all amounts between $5-mil and $10-mil;
-- 5% of all amounts between $10-mil and $20-
mil;
-- 7% of all amounts above $20 million.
Expenses: Burlington will reimburse Hilco for all
reasonable out-of-pocket expenses incurred
during the engagement in connection with the
Owned Properties, payable promptly following
delivery of invoices setting forth in reasonable
detail the nature and amount of such expenses.
In addition, Burlington will reimburse Hilco for
all expenses incurred in connection with its
efforts to sell the Statesville Properties
without regard to whether Hilco identifies the
ultimate buyer.
Mr. Englar relates that Hilco will associate with NAI Southern
Real Estate, a real estate brokerage firm in Charlotte, North
Carolina for provision of the consulting and advisory services.
NAI Southern will at all times be an agent of Hilco for all
purposes under the Consulting Agreement, Mr. Englar says.
Hilco, Mr. Englar adds, is responsible for any and all
arrangements, including compensation arrangements, between Hilco
and NAI Southern. "Hilco shall indemnify and hold the Debtors
harmless for any claims, damages, actions or any other
liabilities whatsoever that may arise as a result of the
involvement of NAI Southern," Mr. Englar emphasizes.
The Consulting Agreement terminates on the earlier of:
(a) the effective date of a plan of reorganization confirmed
by the Court, and
(b) April 8, 2003.
It is provided, however, that Hilco or the Debtors may terminate
the Consulting Agreement for "cause" upon 30 days' prior written
notice. In addition, Hilco is entitled to a fee if, within 90
days of the termination of the Consulting Agreement, the Debtors
enter into a transaction to sell any Owned Property to an entity
that Hilco previously contacted and showed the property with
during the term of the Consulting Agreement.
Mr. Englar adds that the Consulting Agreement includes certain
indemnification provisions. In particular, Mr. Englar says, the
Consulting Agreement provides that Hilco and the Debtors will
defend, indemnify and hold the other and its principals,
members, officers, directors, agents and employees harmless from
and against any claim, damage, loss, expense, penalty or
liability of any kind, which arise from claims relating to
provision of services pursuant to the Consulting Agreement.
"The Debtors will indemnify Hilco for any claims relating to the
Debtors' failure to pay any taxes in accordance with applicable
law or any liability asserted by any of the Debtors' employees
against Hilco," Mr. Englar relates. However, Mr. Englar
clarifies, the Debtors will not indemnify Hilco for any matters
resulting from any breach of the Consulting Agreement as a
result of Hilco's negligence or willful misconduct.
Mitchell P. Kahn, President of Hilco Real Estate LLC, asserts
that the firm is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code. "Neither I, nor any
members of my firm holds or represents any interest adverse to
the Debtors' estates," Mr. Kahn adds.
(Burlington Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
DebtTraders reports that Burlington Industries's 7.250% bonds
due 2005 (BRLG05USR1) are trading between the prices 15 and
16.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BRLG05USR1
for real-time bond pricing.
CALL-NET ENTERPRISES: S&P Rates $377 Million Senior Notes At B+
---------------------------------------------------------------
Standard & Poor's assigned a 'B+' rating to Call-Net Enterprises
Inc.'s US$377.0 million 10.625% senior notes on April 16, 2002.
At the same time, the long-term corporate credit rating on the
company was raised. Outlook is positive.
The ratings reflect Call-Net's national franchise in Canada, and
improvement in its subscriber mix and financial risk profile,
following the company's successful C$2.6 billion
recapitalization in April 2002.
The ratings also take into consideration Sprint Corp.'s 10.0%
equity ownership and strategic alliance, which provides Call-Net
with access to Sprint's technology, network, purchasing power,
and related trademarks. Still, increasing competition from
incumbent providers in the small and midsize business
telecommunications market, Call-Net's exposure to declining
long-distance prices, and the execution risks associated with a
revised business plan remain concerns.
Call-Net, through its wholly owned operating subsidiary, Sprint
Canada Inc., is the second-largest alternative telecom carrier
in Canada. Call-Net offers long-distance, local, and digital
subscriber line (DSL)-based broadband services to businesses in
major centers across Canada. Despite long-distance pricing
pressure, growing traffic volumes using a hybrid 'on-net'
strategy, a higher percentage of data and local access revenues,
as well as regulatory relief should help stabilize operating
margins (before depreciation and amortization) at around 20.0%
over the medium term. The company's capacity to leverage
Sprint's operational expertise, and the speed with which Call-
Net can deploy broadband access in the large urban markets and
increase local access penetration remain key to the successful
implementation of its strategy over the near term.
Outlook
Despite continued erosion in the long-distance segment and
increasing competition in high growth areas, the improvement in
Call-Net's financial risk position will help mitigate the risks
associated with the company's entry into new local and data
markets. The combination of a favorable regulatory environment
and successful execution of its local access strategy could lead
to a ratings upgrade.
Operating Profile
Call-Net's financial risk has decreased significantly following
the recapitalization. Debt to capitalization is expected to
improve to around 67.0% in 2002 from a high of 188.0% in 2001,
while EBITDA interest cover should approach 2.3 times in 2002,
up from 0.8x in 2001. Despite continued price pressure
reflective of the current competitive operating environment,
earnings and cash flow generation should improve from increasing
local access revenue growth in the latter part of 2002, as Call-
Net builds out its local footprint and continues the migration
of on-net traffic. Potential carrier cost reductions as a result
of the Canadian Radio-television and Telecommunications
Commission (CRTC) price-cap decision expected in May 2002 also
could provide additional near-term profit margin improvement.
Call-Net benefits from adequate cash balances that, combined
with operating cash flow, are expected in the near term to be
sufficient to support modest annual capital requirements. The
company currently expects to be cash flow positive in 2005 when
its local footprint buildout is completed. Nevertheless, the
maintenance of reasonable annual revenue growth in both local
and data services markets will be key in maintaining this
liquidity absent other sources of funding.
CALL-NET ENTERPRISES: Completes $25M Private Placement to Sprint
----------------------------------------------------------------
Call-Net Enterprises Inc. (FON, FON.B) announced the completion
of a private placement of 1,191,987 class B non-voting shares
for an aggregate purchase price of $25,000,000 to Sprint
Communications Company L.P.
There are no selling fees or commissions payable and the funds
received will be used for general corporate purposes.
"Completing this private placement is the final step in the
restructuring of the balance sheet that puts Call-Net in a
strong position to compete and build value for all our
stakeholders," said Bill Linton, Call-Net's President and Chief
Executive Officer. "Combined with the ten-year branding and
technology services agreement that will add to our product
offerings, this investment expands and solidifies the business
relationship between Call-Net and Sprint."
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. Call-Net Enterprises is listed on
the Toronto Stock Exchange under the symbol FON for the common
shares and FON.B for the non-voting Class B shares. 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% bond
due 2009 (CN09CAR1) are trading 26.5 and 28.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CN09CAR1for
some real-time bond pricing.
CALYPTE BIOMED: Winding Down Operations, May File For Bankruptcy
----------------------------------------------------------------
Calypte Biomedical Corporation (OTCBB:CALY), a public healthcare
company dedicated to the development and commercialization of
urine-based diagnostic products and services, announced that it
has begun to wind down its operations and may soon have to file
for bankruptcy.
The Company said it is laying off more than half its workforce,
effective immediately. It is also taking steps to maximize the
value of the company over the next several days. Without
additional outside investment, Calypte said it will no longer be
able to sustain operations from its existing revenues and
current financing lines.
Calypte Biomedical Corporation headquartered in Alameda,
California, is a public healthcare company dedicated to the
development and commercialization of urine-based diagnostic
products and services for Human Immunodeficiency Virus Type 1
(HIV-1), sexually transmitted diseases and other infectious
diseases. Calypte's tests include the screening EIA and
supplemental Western Blot tests, the only two FDA-approved HIV-1
antibody tests that can be used on urine samples. The company
believes that accurate, non-invasive urine-based testing methods
for HIV and other infectious diseases may make important
contributions to public health by helping to foster an
environment in which testing may be done safely, economically,
and painlessly. Calypte markets its products in countries
worldwide through international distributors and strategic
partners.
CARIBBEAN PETROLEUM: Wants to Hire Lavandero As Special Counsel
---------------------------------------------------------------
Caribbean Petroleum LP and its debtor-affiliates seek permission
from the U.S. Bankruptcy Court for the District of Delaware to
employ Marcos A. Ramirez Lavandero, Esq., and the Law Firm of
Ramirez Lavandero & Associates as their special insurance, tort
and contract counsel.
The Debtors wish to tap Ramirez Lavandero for legal advice with
respect to certain insurance issues, tort issues and ongoing
contract negotiations with Promo Export for the renewal of a
pipeline contract and certain pending matters in which the
Carribean Petroleum LP is a party.
Due to its substantial experience in the matters and its
extensive experience in Puerto Rican law and its knowledge in
the Debtors' business, the Debtors believe that Ramirez
Lavandero is well qualified to represent them effectively and
efficiently. The Debtors explain that hiring Ramirez Lavandero
will rid them of the costs of the "learning curve" which would
result from employment of a different firm.
The Debtors agree to compensate Ramirez Lavandero for its
services at its hourly rates plus reimbursement of the necessary
and actual expenses incurred. As of the Petition Date, Mr.
Lavandero's hourly rate was $125.
Caribbean Petroleum L.P. distributes petroleum products and
owns/leases real property on which service stations selling
petroleum products are stored and sold to retail customers. The
Company filed for chapter 11 protection on December 17, 2001.
Michael Lastowski, Esq. and William Kevin Harrington, Esq. at
Duane, Morris & Heckscher LLP represent the Debtors in their
restructuring efforts.
CEDARA SOFTWARE: Appoints Ramkumar & Millerick As New Directors
---------------------------------------------------------------
Michael M. Greenberg, Chairman and Chief Executive Officer of
Cedara Software Corp. (TSE: CDE/Nasdaq:CDSW), announced that
Ram Ramkumar has been appointed to Cedara's Board of Directors,
replacing Paul Echenberg on Cedara's Board.
Ram Ramkumar is President and Chief Executive Officer of Inscape
Corporation, a TSE listed company, and a leading designer,
manufacturer and distributor of high quality office furniture.
Mr. Ramkumar holds a Bachelor of Technology degree from the
Indian Institute of Technology, an MBA from the University of
Toronto and is a Chartered Accountant. Since joining Inscape
Corporation as President in 1988, under Mr. Ramkumar's
leadership, the company has grown from annual revenues of just
over $20 million to $173 million in fiscal year 2001.
"The Board and management are grateful for the valuable
contributions of Paul as director of Cedara since January 1991,"
stated Dr. Greenberg. "His guidance and commitment have been
constant. At the same time, we are excited about the prospective
impact of Ram on the evolution of the Company."
Dr. Greenberg also announced the appointment of John J.
Millerick to Cedara's Board of Directors, replacing Thomas J.
Miller Jr.
John J. Millerick is Senior Vice President, Chief Financial
Officer and Treasurer of Analogic. Prior to joining Analogic in
January 2000, Mr. Millerick served as Senior Vice President and
Chief Financial Officer of CalComp Technology, Inc. He had
served previously in senior financial positions for both Digital
Equipment Corporation and Wang Laboratories, Inc. and has over
25 years of financial experience with large, high-tech
organizations in the United States, Europe, and Asia-Pacific.
Mr. Millerick holds a BA in Mathematics from the College of the
Holy Cross and an MBA from Dartmouth College's Amos Tuck School
of Business Administration.
"On behalf of the Board and management, I would like to thank
Tom for his significant contributions and to welcome John to
Cedara's Board. We continue to value Analogic's contribution to
the success of Cedara."
Cedara Software Corp., based in the greater Toronto area, is a
leading medical imaging software developer. Cedara serves
leading healthcare solution providers and has long-term
relationships with companies such as Cerner, GE, Hitachi,
Philips, Siemens, and Toshiba. Cedara offers its OEM customers a
rich array of end-to-end imaging solutions. The Cedara
Foundation Technology supports Windows and Unix. This
continuously enhanced imaging software is embedded in 30% of
MRIs sold today. Cedara offers components and applications
that address all modalities and aspects of clinical workflow
including: 3D imaging and advanced post-processing; volumetric
rendering; disease-centric imaging solutions for cardiology; and
streaming DICOM for web-enabled imaging. Cedara's picture
archiving and communications systems (PACS) solutions, Cedara
I-View (TM), Cedara I-Read (TM) and Cedara I-Report (TM) are
sold via systems integrators and distributors around the world.
Through its Dicomit Dicom Information Technologies Inc.
subsidiary, Cedara provides an ultrasound and DICOM connectivity
solutions to OEM customers.
At December 31, 2001, Cedara Software reported a working capital
deficit of close to CDN$10 million, and a total shareholders'
equity deficit of CDN$99.8 million.
COMDISCO INC: Selling New Jersey Property to Omega for $2.37MM
--------------------------------------------------------------
The Comdisco, Inc., and its debtor-afiliates seek the Court's
authority to sell their interest in a property located at 600
Heron Drive in Logan, New Jersey to Omega Engineering, Inc.
George N. Panagakis, Esq., at Skadden, Arps, Slate, Meagher &
Flom, in Chicago, Illinois, explains that the property is being
sold because it is an outdated and vacated facility that is not
being utilized by the Debtors in the conduct of their current
business. "As part of their post-petition restructuring
program, the Debtors are disposing surplus property including
surplus real estate," Mr. Panagakis adds.
Mr. Panagakis relates that the Debtors, together with their
Broker -- Smith Mack & Company, have engaged in marketing
efforts with respect to the property. "As a result, the Debtors
received a written offer to purchase the property from Omega
Engineering," Mr. Panagakis says.
The Debtors have evaluated the terms and benefits of the offer.
The offer is significantly higher than other offers that have
been made for the property. "The Debtors believe that accepting
the proposal from Omega Engineering is the best way to maximize
the value of the property for the benefit of their estates and
creditors," Mr. Panagakis reports. Accordingly, if the Court
grants this motion, the Debtors have no indication that Omega
Engineering would be unable or unwilling to consummate the
transaction.
The Debtors and Omega Engineering entered into an Agreement in
connection with the proposed sale of the property, which
provides that:
Purchase Price: $2,375,000 in cash or received wire transfer of
immediately available funds, with $100,000 to
be paid to an escrow holder, upon execution of
the Agreement, subject to collection and the
remainder payable at closing.
Assets Included: All of the Debtors' right, title and interest
in the property.
Conditions
to Closing: The Agreement is subject to Bankruptcy Court
approval.
Representations: The Debtors and Omega Engineering each offer
standard representations and warranties.
However, the proposed sale will be on an "as
is, where is" basis and the Debtors will
provide no representations or warranties with
respect to the condition of the property.
(Comdisco Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
CONE MILLS: S&P Cuts Credit Rating to CCC+ on Liquidity Concerns
----------------------------------------------------------------
On April 16, 2002, Standard & Poor's lowered its credit ratings
for Greensboro, North Caolina-based Cone Mills Corp. to 'CCC+'
and removed the ratings from CreditWatch, where they were placed
on March 13, 2001.
The downgrade reflected Standard & Poor's concerns about the
company's liquidity and refinancing risk over the following 12
months. Although Cone Mills extended the maturity on its credit
facility until January 2003, there is still a concern about the
company's ability to arrange financing on a longer-term basis.
Furthermore, the company's $27 million senior notes are also due
at the same time, and even though the principal amortization
under the notes was also extended, the arrangement is temporary.
Cone Mills has acknowledged its key focus is now to restructure
its balance sheet, and to expand its denim producing capacity in
Mexico. However, additional capacity, in the form of a new denim
manufacturing facility in Mexico, is constrained due to the lack
of capital.
Cone Mills' operating performance and credit measures in recent
years have been negatively affected by the troublesome operating
environment for U.S.-based textile companies and a difficult
retail market for its customers, primarily apparel
manufacturers, particularly Levi Strauss and Co. and VF Corp. As
a result, the company's volumes and operating margins declined
across all operating segments. Although management has taken
positive steps to divest non-core, unprofitable operations, such
as closing its Raytex finishing plant, selling the John Wolf
decorative fabrics business, and exiting the khaki business,
denim pricing and volume remain pressured. Although operating
results should improve modestly because of restructuring efforts
undertaken in 2001, Standard & Poor's expects operating results
and credit protection measures will remain weak through 2002.
For the year-ended Dec. 28, 2001, EBITDA to interest was 1.4
times, the operating margin before depreciation and amortization
was about 6%, and total debt to EBITDA was almost 10x.
Outlook
The ratings could be lowered if the company is unable to renew
its credit facility or obtain alternative financing. Conversely,
the ratings could be raised if the company is able to complete a
longer-term financing arrangement and improve operating results.
CONTOUR ENERGY: May File For Bankruptcy If Debt Workout Fails
-------------------------------------------------------------
Contour Energy Co. has engaged an investment banking firm to
evaluate strategic corporate options that may be available to
the Company and provide advice regarding those options. As
previously disclosed, the loss of our natural gas price hedges
as a result of the Enron bankruptcy has eliminated our downside
price protection in an environment of highly volatile and
uncertain commodity prices. This has reduced our ability to fund
our targeted capital expenditure program while concurrently
servicing our outstanding debt obligations.
The Company has entered into discussions with certain holders of
its public debt that may lead to a restructuring transaction. A
possible outcome of the discussions may include conversion of a
significant portion of the Company's debt into equity. If we are
unsuccessful in negotiations with debt holders, the Company may
be forced to seek protection under federal bankruptcy
regulations. Even a successful restructuring transaction may
require a bankruptcy filing in which the affected parties have
agreed to a plan of reorganization. We have informed the
trustees that payment of interest totaling $15.4 million due
April 15, 2002 on the two classes of debt will be deferred
pending results of negotiations.
Contour Energy Co. is engaged in the exploration, development,
acquisition and production of natural gas and oil.
Contour Energy Co. common stock is traded on the OTC Bulletin
Board under the symbol CONC.
COVANTA ENERGY: Seeks Court Nod On $463 Mil DIP Financing Pact
--------------------------------------------------------------
On March 14, 2001, Covanta Energy Corporation and certain of its
subsidiaries entered into a Revolving Credit and Participation
Agreement with Bank of America, N.A., as Administrative Agent,
Co-Arranger and Co-Book Runner, and Deutsche Bank AG, New York
Branch, as Documentation Agent, Co-Arranger and Co-Book Runner,
for a consortium of lenders comprised of:
ABN AMRO Bank N.V.
Bank of Montreal
Bank Of Tokyo-Mitsubishi (Canada)
Bayerische Hypo-und Vereinsbank AG
BNP Paribas
Bryden Management Corporation IV
Canadian Imperial Bank Of Commerce
Clarica Life Insurance Company
Commerzbank AG
Credit Lyonnais Canada
Credit Lyonnais New York Branch
Credit Suisse First Boston
Dresdner Bank AG, Grand Cayman Branch
Dresdner Bank Canada
Firstar Bank, N.A.
First Union National Bank
Fleet National Bank
HSBC Bank Canada
HSBC Bank USA
IIB Bank [IFSC Branch]
KBC Bank N.V.
Landesbank Hessen-Thuringen Girozentrale
National Westminster Bank plc
Royal Bank of Scotland, plc
S.C. Stormont Corporation
San Paolo IMI S.p.A.
Societe Generale
SunTrust Bank
The Bank of New York
The Bank of Nova Scotia
The Chase Manhattan Bank
The Dai-Ichi Kangyo Bank, Limited
The Fuji Bank, Limited
The Huntington National Bank
The Industrial Bank of Japan Trust Company
The Sanwa Bank, Limited, New York Branch
The Sumitomo Bank of Canada
The Sumitomo Trust & Banking Co., Ltd. NY Branch
The Tokai Bank, Limited - New York Branch
The Toronto-Dominion Bank
UBS AG and
Westdeutsche Landesbank Girozentrale
This Master Credit Facility consolidated most of the Company's
major outstanding credit facilities into one credit facility.
The Master Credit Facility, is secured by substantially liens on
all of the Company's assets pursuant to the terms of a Security
Agreement, dated as of March 14, 2001, among the Debtors and the
Prepetition Agents for (a) the lenders under the Pooled
Facilities, (b) the lenders with Revolving Loan Exposure (c) the
lenders under the Opt-Out Facilities and (d) the holders of the
9.25% debentures. The Collateral includes all unencumbered
tangible and intangible real, personal and mixed assets and
property, including, without limitation, all accounts
receivable, contract rights, books and records, general
intangibles, choses and things in action, patents, trade names,
trademarks, service marks, copyrights, customer lists, computer
programs, tax refunds and claims and investment property
(including shares of stock and other equity interests owned by
such Debtor in its subsidiaries), and certain equipment,
machinery, furniture, furnishings, fixtures, deposit accounts
and real property, and all additions and accessions to, and
proceeds (including insurance proceeds), replacements and
products of, the foregoing.
As of the Petition Date, the Debtors owe the Pre-petition
Lenders approximately $477,000,000 million (including
approximately $372,000,000 with respect to unfunded letters of
credit and approximately $105,000,000 with respect to funded
letters of credit), plus accrued interest, fees and other
charges.
The Debtors have insufficient available sources of working
capital from the Pre-petition Secured Parties' Cash Collateral
or other financing to carry on the operation of their business
without new DIP Financing. The Debtors' ability to maintain
business relationships with their vendors and suppliers, pay
necessary employees and otherwise finance their operations is
essential to Covanta's continued viability.
Deborah M. Buell, Esq., at Cleary, Gottlieb, Steen & Hamilton,
adds, "the Debtors' critical need for financing is immediate."
In the absence of access to the Pre-petition Secured Parties'
Cash Collateral and the DIP Financing, continued operation of
the Debtors' business will be impossible, a precipitate
liquidation will ensue, and immediate and irreparable harm to
the Debtors' estates will occur, Ms. Buell says.
It is essential that Covanta immediately instill their
employees, suppliers and customers with confidence in the
Company's ability to reorganize. Absent that confidence, the
Debtors will not have the resources or support necessary to
maintain operations and preserve their values as going concerns.
The salient terms of the DIP Financing facility are:
Borrowers: Covanta Energy Corporation and each of its
123 U.S. debtor-in-possession subsidiaries
Lenders: Bank of America, N.A.,
Deutsche Bank AG, New York Branch, and
a consortium of other unidentified lenders
Administrative
Agent: Bank of America, N.A.
Documentation
Agent: Deutsche Bank AG, New York Branch
Co-Lead
Arrangers: BofA and Deutsche Bank
Facilities: The DIP Facility provides financing in two
tranches:
The Tranche A Facility provides $95,000,000
in the form of an $80,800,000 revolving line
(which includes a $41,000,000 sublimit for
loss sharing loans) and $14,200,000 to back
letters of credit.
The Tranche B Facility provides $367,840,000
to replace outstanding letters of credit.
Immediately, the Tranche B Facility will be
used to replace letters of credit totaling
$286,455,227:
Project/Purpose Amount Issuer
--------------- ------ ------
Detroit $162,527,031 UBS AG
Babylon Equity Bonds $28,301,944 UBS AG
Huntington Equity Bonds $31,661,528 UBS AG
Workers Compensation $7,520,423 DKB
Workers Compensation $14,951,617 DKB
Workers Compensation $7,500,093 Huntington
Hennepin $18,880,552 Commerzbank
Quezon DSR $11,802,039 BofA
Port Authority $3,000,000 BofA
LICA $300,000 BofA
Following final approval of the DIP Facility,
the Tranche B Facility will be used to replace
letters of credit totaling $81,408,735:
Project/Purpose Amount Issuer
--------------- ------ ------
Workers Compensation $8,465,297 First Union
Alexandria Equity Bonds $14,503,767 Westdeutsche
Indianapolis Equity $33,648,740 Westdeutsche
Stanislaus Equity Bonds $18,875,253 Westdeutsche
Hennepin (Step-Up) $4,195,678 BofA
Fairfax $900,000 SunTrust
Greenway $820,000 Chase
Tranche A
Availability: Amounts available for cash borrowing under the
Tranche A Facility are limited to certain fixed
amounts reflected in a non-public Monthly
Budget and non-public cash flow projections
delivered to the Lenders, subject to these
month-by-month Advance Limits:
Calendar Month Advance Limit
-------------- -------------
April 2002 $25,000,000
May 2002 $60,000,000
June 2002 $55,000,000
July 2002 $40,000,000
August 2002 $40,000,000
September 2002 $40,000,000
October 2002 $40,000,000
November 2002 $50,000,000
December 2002 $40,000,000
January 2003 $40,000,000
February 2003 $40,000,000
March 2003 $40,000,000
April 2003 $40,000,000
provided, however, that in the event the
Debtors sell their interests in their
Thai Assets:
-- Operational Energy Group Limited, a
company incorporated under the laws of
Thailand that is in the business of
operating and maintaining electric power
and thermal energy production facilities;
-- Rojana Power Co. Ltd., a company
incorporated under the laws of Thailand
that owns a natural gas fueled
cogeneration power plant in Ayudthaya,
Thailand; and
-- Sahacogen (Chonburi) Co., Ltd., a company
incorporated under the laws of Thailand
that owns a natural gas fueled
cogeneration power plant in Sriracha,
Thailand;
(for no less than $33,000,000) each of the
monthly Advance Limits will be reduced by
$20,000,000.
Maturity Date: April 1, 2003, subject to extension for two
additional 6-month periods if DIP Lenders
holding more than 66-2/3% of the Tranche A
Facility give their consent.
Collateral: All of the Borrowers' obligations will be
secured by valid, enforceable and perfected
first priority priming security interests.
Priority: All of the Borrowers' obligations will
constitute allowed claims with priority under
Section 364(c)(1) of the Bankruptcy Code over
all other administrative expenses, subject to
Carve-Outs; provided that the Liens and
security interests securing the Obligations
will exclude any proceeds from avoidance
actions under Sections 544-550 of the
Bankruptcy Code.
Carve-Out: The DIP Lenders agree to a $2,000,000 carve-out
from their liens to permit payment of
professionals' fees in the event of a default
and for payment of fees payable to the Clerk of
the Bankruptcy Court and to the United States
Trustee pursuant to 28 U.S.C. Sec. 1930(a)(6).
Interest Rate: Borrowings accrue interest annually at:
(x) 2.50% above the higher of:
-- the Prime Rate and
-- 0.50% above the Federal Funds Rate;
or
(y) 3.50% above the rate published on Telerate
page 3750 (a LIBOR variant).
In the event of a default, the Interest Rate
increases by 2.00%.
Fees: The Debtors agree to pay a variety of Fees to
the DIP Lenders:
* a $1,900,000 Tranche A Facility Fee;
* 0.50% to 1.00% per year as a Commitment Fee
on every Tranche A dollar not borrowed from
the Tranche A Lenders;
* 3.5% annual Tranche A Letter of Credit Fees;
* 2.5% annual Tranche B Letter of Credit Fees;
* any other fees the Borrowers, jointly and
severally, may agree to pay to the Agents, in
such amounts and at such times as may be
separately agreed upon between the Company
and the Agents; and
* all fees and expenses incurred by O'Melveny &
Myers LLP, counsel to the Agents, and Ernst &
Young Corporate Finance LLC, in its role as
financial advisor to the DIP Lenders.
The Debtors tell Judge Blackshear they are unable to obtain the
financing necessary for the operation of their business either:
(i) on an unsecured basis pursuant to Section 503(b)(1),
(ii) pursuant to Sections 364(a) or 364(b), (iii) solely on a
junior secured basis pursuant to Section 364(c)(3), or (iv) on
any other terms or conditions more favorable than the roll-up
DIP Financing Proposal extended by the Pre-petition Lenders.
(Covanta Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
CYGNIFI DERIVATIVES: Securing Further Co-Exclusivity Extension
--------------------------------------------------------------
Cygnifi Derivatives Services, LLC, requests that the U.S.
Bankruptcy Court for the Southern District of New York extend
the Exclusive Periods during which only the Debtor and the
Creditors' Committee may file a joint plan. The Debtors ask
that the co-exclusive plan filing period be extended through
July 30, 2002 and the co-exclusive period for soliciting
acceptances of the plan run through September 30, 2002
The Court has authorized and approved the second round of sales
of the IP Assets. The Debtor submits that the requested
extensions are fair and reasonable because they will enable the
Debtor to focus its efforts on closing the second round of sales
of IP Assets, begin the claims reconciliation process, and after
which, file a joint liquidating plan with the Creditors'
Committee without the distractions of a competing plan.
Cygnifi Derivatives Services, LLC filed for Chapter 11 petition
on October 3, 2001. Marc E. Richards, Esq. at Blank Rome Tenzer
Greenblatt, LLP represents the Debtor in its restructuring
effort. When the Company filed for protection from its
creditors, it listed total assets of $34,200,000 and $5,100,000
in total debts.
DETROIT MEDICAL CENTER: Fitch Affirms $569MM Bonds Rating at BB+
----------------------------------------------------------------
Fitch Ratings affirms its 'BB+' rating on approximately $569.1
million outstanding revenue bonds of Detroit Medical Center
(DMC). The Rating Outlook is Positive. For the 1993B and the
1997A bonds, the action pertains to the unenhanced rating, since
the bonds are insured by Ambac Assurance Corp. Fitch Ratings
rates the insurer financial strength of Ambac 'AAA'. In
addition, the bonds remain on Rating Watch Positive, which means
that the bonds may be upgraded in the near-term. Fitch Ratings
placed the bonds on Rating Watch Positive and affirmed the 'BB+'
rating on June 18, 2001. The bonds were downgraded to 'BB+' from
'BBB-' on January 13, 2000.
The rating affirmation and maintenance of Rating Watch Positive
reflects Fitch's view that DMC must continue to demonstrate
improved operating results and consistent liquidity levels
without significant negative unforeseen, one-time events. DMC's
fiscal 2001 (12/31) loss from operations of $5.9 million
(operating margin negative 0.4%) represents a significant
improvement from operating losses of $33.9 million in 2000,
$172.3 million in fiscal 1999 and $132.8 million in 1998.
Significant write-downs of Medicaid receivables that totaled
$62.9 million contributed to a bottom-line loss of $65.9 million
in 2001. The extraordinary losses contributed to the system's
maximum annual debt service (MADS) coverage by EBIDA of 1.4
times in 2001. DMC's 2001 budget anticipated $33.1 million from
operations (2.0% operating margin), $44.7 million bottom-line,
and MADS coverage of 3.8x.
Other concerns include the deterioration of DMC's liquidity.
Days cash on hand has dropped from 105.6 days to 67.8 days from
1999 to 2001, while cash to debt has declined from 69.1% to
43.3% over the same period. In addition, capital expenditures
have lagged and discharges in 2001 were 19% off budget.
Fitch believes that management's 2002 budget of break-even
operations, a positive $9.3 million bottom-line and 3.1x MADS
coverage, are more realistic than 2001's budget. Fitch views
DMC's current management very positively and believes that the
strategic initiatives already implemented should lead to
sustained operating improvement. However, DMC continues to be
burdened by a challenging payor-mix, with Medicaid representing
11.8% of DMC's 2001 gross revenues and self-pay comprising 7.3%.
DMC's bad debt as a percentage of total operating revenue has a
very high 11.1% in 2001, down from 13.5% in 2000 and 13.0% in
1999. Further, DMC's 2002 capital budget of $109.2 million
represents a 41% increase from 2001 and a 38% from 2000, two
years where depreciation was materially higher than capital
expenditures. Failure to achieve its budgeted goal of $143.1
million in cash flow may cause a combination of further erosion
of cash, additional debt, or abatement of capital improvements.
As of January 31, 2002, DMC's average age of plant was 10.8
years.
Fitch will evaluate DMC's six-month interims in August to
determine if a positive rating change is warranted. Among
considerations for an upgrade will be how closely DMC is
tracking to its budget.
DMC operates eight hospitals, seven of which serve the
metropolitan Detroit area. DMC is the largest health care
provider in the Detroit market, with more than 12,400 full-time
equivalent employees and about $1.6 billion in annual revenues.
Contact: M. Craig Kornett 1-212-908-0740, Emily Wong 1-212-908-
0767, or Joseph Korleski 1-212-908-0591, New York.
Affected issues:
--$108,650,000 Michigan State Hospital Finance Authority revenue
and refunding bonds (Detroit Medical Center Obligated Group),
series 1998A;
--$174,460,000 Michigan State Hospital Finance Authority revenue
and refunding bonds (Detroit Medical Center Obligated Group),
series 1997A;
--$42,615,000 Michigan State Hospital Finance Authority revenue
and refunding bonds (Sinai Hospital of Greater Detroit), series
1995;
--$131,445,000 Michigan State Hospital Finance Authority revenue
and refunding bonds (Detroit Medical Center Obligated Group),
series 1993B;
--$109,320,000 Michigan State Hospital Finance Authority revenue
and refunding bonds (Detroit Medical Center Obligated Group),
series 1993A;
--$2,575,000 Michigan State Hospital Finance Authority revenue
and refunding bonds (Detroit Medical Center Obligated Group),
series 1988A and 1988B.
DELTA FINANCIAL: Sets Annual Shareholders' Meeting on May 15
------------------------------------------------------------
The Annual Meeting of Stockholders of Delta Financial
Corporation will be held on Tuesday, May 15, 2001, at nine
o'clock in the morning, local time, at the Huntington Hilton at
598 Broad Hollow Road, Melville, New York 11747, for the
following purposes:
1. To elect two Class II Directors for a term of three
years and until their successors shall have been elected and
qualified ("Proposal No. 1");
2. To ratify the appointment of KPMG LLP as independent
auditors for the Company for the fiscal year ending December 31,
2001;
3. To approve and adopt the Delta Financial Corporation
2001 Stock Option Plan; and
4. To transact such other business as may properly come
before the meeting, or any adjournment thereof.
Stockholders of record at the close of business on April 7, 2001
will be entitled to vote at the meeting and any adjournments
thereof.
EARTHCARE: EarthLiquids Acquisition by USFilter to Move Forward
---------------------------------------------------------------
USFilter Recovery Services (Mid-Atlantic) Inc. reaffirmed its
commitment to the acquisition of EarthLiquids, a company
specializing in the collection and management of used oil and
oily wastewaters. The EarthCare Company (OTC BB:ECCO) has filed
for Chapter 11 bankruptcy protection. As wholly owned
subsidiaries of EarthCare, the EarthLiquids Companies are
included in the bankruptcy filings.
USFilter has also signed a management services agreement to
operate EarthLiquids with the intent to purchase the business,
which includes a network of 140 waste transport trucks and five
centralized waste processing and recycling facilities that treat
and recover used oil and oily wastewater.
"EarthLiquids service network will be highly synergistic with
our core recovery services business," said Chuck Gordon,
executive vice president and general manager of USFilter
Industrial Services & Products. "We have essentially been in the
used oil recovery and oily wastewater management business since
it began. EarthLiquids facilities are strategically placed
across the mid-Atlantic and southern United States and will
augment our existing operations. At the same time, USFilter's
services will complement EarthLiquids operations so that
customers will be provided with more recycling and water
management services at more locations."
Part of USFilter, USFilter Recovery Services specializes in the
recovery and recycling of used oil, oily wastewaters, fuel-water
mixtures, glycol and used oil filters. USFilter, a Vivendi
Environnement company, is North America's largest water company
providing comprehensive water and wastewater systems and
services to commercial, industrial, municipal and residential
customers. Vivendi Environnement (Paris Bourse:VIE) (NYSE:VE),
comprised of Vivendi Water (worldwide water products and
services), Onyx (solid waste and industrial services), Dalkia
(energy management), Connex (transportation and logistics) and
FCC (Spanish company engaged in environmental and construction
related industries), is the largest environmental services
company in the world with more than 295,000 employees, including
FCC, in about 100 countries and annual revenues of more than
$25.6 billion. Visit the company's Web sites at
http://www.usfilter.comor http://www.vivendienvironnement-
finance.com
ENRON: Examiner Applies to Retain Goldin as Financial Advisor
-------------------------------------------------------------
In connection with his duty as Examiner for Enron North America,
Harrison Goldin seeks the Court's authority to employ Goldin
Associates as his special consultant and financial advisor, nunc
pro tunc to March 12, 2002.
Mr. Goldin, who is a Senior Managing Director of Goldin
Associates, relates that the Firm has extensive experience as
special consultant and financial advisor in such large and
complex bankruptcies as those of:
-- Drexel Burnham Lambert Trading,
-- Rockefeller Center Properties,
-- Crystal Brands,
-- Bucyrus-Erie,
-- Tower Air and Sizzler, among many others.
In such cases, Mr. Goldin says, the Firm has been responsible
for investigating and analyzing a company's business plans and
financial affairs, performing and reviewing valuations, etc.
Moreover, Mr. Goldin continues, Goldin Associates has particular
experience coordinating or supporting trustees, examiners and
other independent fiduciaries in conducting investigations of
claims and financial affairs in major bankruptcy proceedings in
a multiplicity of jurisdictions. Mr. Goldin contends that
Goldin Associates is clearly well qualified to act as his
financial advisor in the Enron North America bankruptcy
proceeding.
According to Mr. Goldin, Goldin Associates has been helping him
since his appointment on March 12, 2002. Mr. Goldin tells the
Court that Goldin Associates assisted in the preparation of
employment applications and has performed an analysis regarding
possible connections with the Debtors and their creditors as
quickly as possible. Mr. Goldin informs Judge Gonzalez that the
Office of the United States Trustee has agreed to support the
nunc pro tunc aspect of this Application.
Goldin Associates will provide special consultant and financial
advisory services to the Examiner with respect to his powers and
duties as detailed in the Examiner Order, including:
(a) Taking any and all actions necessary to assist the
Examiner in preparing the:
(i) Cash Management Report,
(ii) the weekly report of all deposits and
disbursements made into and out of the
Consolidation Account,
(iii) the report regarding the status of Enron North
America Cash, and
(iv) any other reports required to be filed;
(b) Assisting the Examiner in his investigations, including
the investigation into whether Enron North America should
continue to participate in Enron's Cash Management System
and the allocation of certain overhead costs to Enron
North America;
(c) Reviewing and providing consultation in the financial
issues concerning the Examiner's investigation; and
(d) Providing such services to the Examiner as are necessary
and appropriate in the event the Examiner's role and
duties are expanded by further Order of the Court.
David Pauker, Managing Director of Goldin Associates LLC,
informs Judge Gonzalez that the Firm intends to apply for
compensation for professional services rendered in connection
with these cases and for reimbursement of actual and necessary
expenses incurred, in accordance with the applicable provisions
of the Bankruptcy Code, the Bankruptcy Rules and the local rules
and Orders of this Court.
According to Mr. Pauker, Goldin Associates uses its standard
hourly rates in effect at the time that the firm performs
professional services. The current hourly rates for Goldin
Associates professionals are:
Managing Director $450-585
Director 375-450
Manager 300-375
Senior Analyst 200-300
Analyst 125-200
Associate 75-125
Mr. Pauker advises the Court that these hourly rates are:
-- subject to periodic firm-wide adjustments in the ordinary
course of Goldin Associates' business, and
-- set at a level designed to fairly compensate Goldin
Associates for the work of its professionals and to cover
fixed and routine overhead expenses.
Furthermore, Mr. Pauker says, it is Goldin Associates' policy to
charge its clients for all out-of-pocket expenses incurred in
connection with the client's case. Such expenses include, but
are not limited to: photocopying, facsimile transfers, long
distance telephone calls, travel expenses, meals, taxis and
parking.
Goldin Associates also requests that the order approving its
employment also approve the Indemnification Provisions. "The
Indemnification Provisions provide that, subject to the approval
of this Court, the Debtors will indemnify Goldin Associates from
and against any actions or claims brought by any party in
connection with Goldin Associates' engagement by the Examiner,
other than claims resulting from the bad faith, gross negligence
or willful misconduct of Goldin Associates," Mr. Pauker
explains. Mr. Pauker assures the Court that such indemnification
provisions are standard in the financial advisory industry.
Considering Goldin Associates' qualifications and in light of
what has been approved in other bankruptcy cases of this scope
and size, Mr. Pauker asserts that such Indemnification
Provisions are fair and reasonable.
Mr. Pauker assures Judge Gonzalez that Goldin Associates is a
"disinterested person," as that term is defined in Section
101(14) of the Bankruptcy Code. But the Firm intends to
continue its conflict checks and inquiries, on a periodic basis,
and to disclose any relevant additional information.
(Enron Bankruptcy News, Issue No. 20; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
EXIDE TECH.: Proposes To Establish Contract Rejection Protocol
--------------------------------------------------------------
The Exide Technologies and its debtor-affiliates tell Judge
Akard that they are in the process of consolidating their
operations and this will require them to exit non-core and
unprofitable locations in order to minimize costs and strengthen
their business. The Debtors anticipate that, in a very short
time, they will bring motions before the Bankruptcy Court asking
for permission to walk-away from hundreds of real property
leases, personal property leases, and executory contracts.
To streamline and manage the rejection process, and avoid costly
delays, the Debtors ask the Court to pre-approve uniform lease
and contract abandonment and rejection procedures.
As soon as the Debtors make a decision to repudiate an
agreement, they propose:
(1) they will file a notice of their intention to reject a
particular executory contract, lease, sublease, or
lease-related interest, pursuant to 11 U.S.C. Sec. 365,
with the Court and simultaneously FedEx a copy of that
notice to the affected counterparties, counsel to any
official committees, the Lenders, and the U.S. Trustee;
(2) the notice will include information relevant to the
agreement about the address of any affected property,
the Debtors' monetary obligations, the remaining term,
names and addresses of affected counterparties, a
general description of the agreement, and objection
procedures;
(3) objections, if any, must be served on the Debtors and
other core parties-in-interest within 10 days;
(4) counterparties may not use deposits as setoff without
prior Court approval;
(5) if no objections are filed within 10 days, the
Agreement is deemed rejected without further court
action, as of the date the Rejection Notice was filed
and served;
(6) if an objection is timely filed, the Court will convene
a hearing, and if the objection is overruled or
withdrawn, the rejection is effective as of the date
the Rejection Notice was filed and served; and
(7) the Debtors will remove any of their property from any
rejected leased facility . . . and if they don't remove
it by the Objection Deadline, it is deemed abandoned
under 11 U.S.C. Sec 544.
Kirk A. Kennedy, Esq., at Kirkland & Ellis, explains that these
procedures are designed to provide a fair and efficient way for
the Debtors to minimize unnecessary administrative obligations
and legal expenses while simultaneously providing affected
parties with adequate notice and an opportunity to object within
a definitive time period. (Exide Bankruptcy News, Issue No.1;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
EXIDE TECHNOLOGIES: Court Grants Access To $200MM DIP Financing
---------------------------------------------------------------
Exide Technologies, Inc. (OTCBB: EXDT) announced that it has
received bankruptcy court approval for its "first day" motions
to, among other things, access $200 million of its $250 million
debtor-in-possession (DIP) financing facility under an interim
court order; continue to pay employee salaries, wages and
benefits; pay suppliers for the post-petition delivery of goods
and services; and honor warranty and rebate obligations to
customers.
As previously announced, Exide Technologies and certain of its
U.S. subsidiaries filed petitions to reorganize under Chapter 11
of the U.S. Bankruptcy Code on April 15, 2002. In connection
with its Chapter 11 filing, the Company had received a
commitment for $427.5 million in new financing, including $250
million in DIP financing arranged by Citicorp USA, a subsidiary
of Citibank, N.A., and other financial institutions. The DIP
facility, along with normal cash flow from operations, will be
used to fund its operations and pay obligations to employees and
post-petition suppliers.
"We are very pleased with the court's approval of these motions,
which help ensure that Exide can continue normal operations,
serve our customers and implement our restructuring plan," said
Craig Muhlhauser, President and Chief Executive Officer of Exide
Technologies.
The Company said that these motions were presented to and
approved by the bankruptcy court in a hearing on April 16, 2002.
Exide Technologies is an industrial and transportation battery
producer and recycler, with operations in 89 countries.
Industrial applications include network-power batteries for
telecommunications systems, fuel-cell load leveling, electric
utilities, railroads, photovoltaic (solar-power related) and
uninterruptible power supply (UPS) markets; and motive-power
batteries for a broad range of equipment uses, including lift
trucks, mining vehicles and commercial vehicles.
Transportation uses include automotive, heavy-duty truck,
agricultural, marine and other batteries, as well as new
technologies being developed for hybrid vehicles and new 42-volt
automotive applications. The Company supplies both aftermarket
and original-equipment transportation customers.
Further information about Exide Technologies, its financial
results and other information can be found at
http://www.exide.com
DebtTraders reports that Exide Technologies's 10.000% bonds due
2005 (EXIDE2) are quoted at prices between 10.5 and 12.5. Check
http://www.debttraders.com/price.cfm?dt_sec_ticker=EXIDE2for
some real-time bond pricing.
FIRST SOUTHERN: Nasdaq To Delist Shares On April 24
---------------------------------------------------
First Southern Bancshares, Inc. (Nasdaq:FSTH), the holding
company for First Southern Bank, received a Nasdaq Staff
Determination on April 16, 2002, indicating that it fails to
comply with the audited financial statement requirement for
continued listing set forth in Marketplace Rule 4310(c)(14),
as well as the current net tangible asset requirement and the
new stockholders' equity requirement for continued listing set
forth in Marketplace Rule 4450(a)(3), and, therefore, its common
stock is subject to delisting from The Nasdaq National Marketr
effective at the opening of business on April 24, 2002.
The Company does not intend to appeal Nasdaq's decision.
Effective with the opening of trading on April 18, 2002, the
Company's common stock will trade under the symbol "FSTHE" until
delisting.
The Company's Annual Report on 2001 Form 10-KSB, filed with the
Securities and Exchange Commission on April 15, 2002, includes a
disclaimer opinion by the Company's independent auditors on the
Company's 2001 financial statements.
Based on the financial statements, Nasdaq calculations indicate
that the Company's net tangible assets and stockholders' equity
were both approximately $1.5 million at December 31, 2001, which
fails to meet the current net tangible asset requirement of $4
million and the stockholders' equity requirement of $10 million
that will replace the net tangible asset requirement effective
November 1, 2002.
The Company's common stock is ineligible for quotation on The
Nasdaq SmallCap Market_ and the OTC Bulletin Boardr because the
Company is not deemed to be current with its periodic securities
filing requirements as a result of the issuance of the
disclaimer opinion.
However, the common stock is eligible upon delisting for
quotation on the "Pink Sheets," a quotation service for over-
the-counter securities, by participating brokers.
First Southern Bank is headquartered in Florence, Alabama, and
operates through its main/executive office in Florence and four
other full-service offices located in Lauderdale and Colbert
Counties in Northwest Alabama.
FISHER COMMS: Robin Campbell Discloses 10.4% Equity Stake
---------------------------------------------------------
Robin J. Campbell Knepper beneficially owns 892,659* shares of
the common stock of Fisher Communications, Inc., representing
10.4% of the outstanding common stock of the Company. Ms.
Knepper has sole power to vote or to direct the vote of 228,288
shares and shared power to vote or to direct the vote of 227,640
shares. She also has sole power to dispose or to direct the
disposition of the 228,288 shares and shared power to dispose or
to direct the disposition of 436,731 shares.
*Robin J. Campbell Knepper owns 228,288 shares. In addition, she
shares voting power, as co-trustee, as to 14,080 shares held by
Trust A under the Will of Peggy Locke Newman and 213,560 shares
held by Trust B under the Will of Peggy Locke Newman.
Additionally, Ms. Knepper shares investment power as to the
436,731 shares held by the O.D. Fisher Investment Company. Ms.
Knepper's husband owns 50 shares, and she disclaims beneficial
ownership of these shares held by her husband.
Fisher Communications, Inc. is a Seattle-based communications
and media company focused on creating, aggregating, and
distributing information and entertainment to a broad range of
audiences. In addition to its stations, Fisher offers satellite
communication services and has real estate holdings in the
Seattle area. The Fisher family controls nearly 40% of the
company.
Fisher has executed commitment letters to refinance its eight-
year senior secured credit facility used to finance the
acquisition of television stations, and its unsecured revolving
line of credit used to finance construction of Fisher Plaza and
for other corporate purposes. As part of its refinancing, the
company intends to repay its unsecured bank lines of credit
available for working capital purposes. Upon completion of the
refinancing, current defaults of financial covenants under the
company's credit facilities will be eliminated. Also, with
completion of the refinancing, the company expects to write off
approximately $3.5 million of unamortized fees incurred in
connection with the eight-year senior secured credit facility.
The company expects to finalize agreements for these
transactions during the first quarter of 2002.
FISHER SCIENTIFIC: S&P Ups Rating to BB- on Stronger Cash Flows
---------------------------------------------------------------
On April 17, 2002, Standard & Poor's raised its credit ratings
on Fisher Scientific International Inc. to 'BB-'. The ratings
outlook is stable.
The upgrade reflected Fisher Scientific's improving cash flows
and strengthened financial profile, offset by the company's
still substantial LBO-related debt burden.
Hampton, New Hampshire-based Fisher Scientific has a well-
established position as a source of a wide variety of supplies
and equipment for the scientific and laboratory communities.
Fisher Scientific's broad product offerings, diverse customer
base, exclusive distribution arrangements with equipment
manufacturers, and agreements with most major domestic group
purchasing organizations are barriers to entry for new
competitors. Furthermore, consumable products, which represent
about 80% of sales, provide a stable base of recurring revenues.
The company has also focused on increasing its mix of higher
margin, self-manufactured products, which now account for about
21% of total products sold. Indeed, Fisher Scientific's late
2001 acquisition of Cole-Parmer Instrument Co., a global
manufacturer and distributor of specialty instruments,
equipment, and supplies to the scientific-research and
industrial markets, expanded the company's product offering to
include fluid management systems for the life science market,
and strengthened Fisher Scientific's self-manufactured product
portfolio. In addition, the company's electronic-commerce
business, which now accounts for 18% of sales, provides
opportunities to reduce selling costs.
Financially, although the company continues to operate under a
heavy debt burden, Fisher Scientific's mid-year 2001 $290
million equity offering improved operating performance and
strengthened its credit protection measures. Funds from
operations to lease-adjusted debt and cash flow coverage of
interest is expected to average more than 15% and 2.5 times,
respectively.
Outlook
Fisher Scientific competes in an industry that is susceptible to
reductions in government spending for scientific research and
health care. Nevertheless, growing cash flows mitigate market
weakness. Standard & Poor's expects to see cash flow utilized to
repay maturing debt and to finance acquisitions, on a selected
basis. Substantial acquisitions should be financed with a
significant equity component.
FLAG TELECOM: Bondholders Demand Return Of $210 Million Transfer
----------------------------------------------------------------
A group of FLAG Telecom Holdings Limited, or FTHL, bondholders
ask the Court for the return of $210,000,000 in funds
transferred by FTHL to a non-debtor subsidiary, FLAG Pacific
Holdings Limited. It also asks the Court to restrict the use of
that cash without Court authority.
The bondholders, forming themselves into an ad hoc committee,
hold approximately $200,000,000 of FTHL's dollar-denominated
11-5/8% Notes and approximately E210,000,000 of Euro-denominated
11-5/8% Notes, says Adam L. Shiff, Esq., at Kasowitz, Benson,
Torres & Friedman LLP, counsel for the bondholders. The Steering
Committee -- comprised of Varde Partners Inc., Elliott
Associates, Cerberus Capital Partners and York Capital -- holds
approximately $150,000,000 of the Dollar Notes and E120,000,000
of the Euro Notes.
FTHL is in default, based on the cross-default provisions under
the Indentures to the Notes, after its bank lenders accelerated
the debt owed under a 1999 Credit Agreement. The lending
syndicate is comprised of:
1. Barclays Bank plc, as Administrative Agent for the
Lenders
2. Dresdner Bank AG, New York and Grand Cayman Branches,
as Documentation Agent
3. Westdeutsche Landesbank, as Syndication Agent
4. Girozentrale, New York Branch
5. Australia and New Zealand Banking Group Ltd.
6. Bank of Scotland
7. City National Bank
8. Credit Lyonnais
9. DG Bank
10. Erste Bank Der Oesterriechischen Sparkassen AG
11. Gulf International Bank B.S.C.
12. Bayerische Hypo-Und Vereinsbank, AG, New York Branch
13. IKB Deutsche Industriebank AG, Luxembourg Branch
14. Kbc Finance Ireland
15. Landesbank Hessan-Thuringen Girozentrale
16. Landesbank Sachen Girozentrale
17. Mitsubishi Trust & Banking Corp.
18. NIB Capital Bank
19. Rabobank International
20. Raiffeisen Zentralbank Osterreich Aktiengesellschaft
21. Societe Generale
22. Sumitomo Bank Limited
23. The Royal Bank of Scotland plc
Although FTHL is not a borrower or a guarantor under the credit
facility, its funds on deposit with Barclays Bank plc have been
frozen. Further, FTHL held funds at a financial institution
that was a lender under the credit facility. From fear that
other financial institutions party to the FLAG Atlantic Limited
bank facility would similarly freeze funds, FTHL moved the
$210,000,000 out of such accounts to FLAG Pacific Holdings
Limited, a nonfiling subsidiary.
Mr. Shiff calls the fund transfer "fraudulent," saying that Kees
van Ophem, FLAG's Secretary and General Counsel, has failed to
offer justification for it in his declaration submitted to the
Court. Mr. van Ophem did say that the cash was intended to pay
creditors of other affiliated entities, a claim that Mr. Shiff
assailed as lacking "any showing to the Court."
Mr. Shiff says, FTHL in the past two weeks paid $4,600,000 in
"retention payments" to nine senior officers; paid $2,500,000 to
certain employees from "non-debtors" with cash possibly coming
from the questioned funds; amended the contract of its CEO to
increase his severance payment to $2,700,000, and to elevate it
to become an FTHL obligation.
Mr. Shiff says that inasmuch as the "fraudulent transfer" makes
FTHL adverse to other FLAG entities, their creditors, and their
directors, officers and agents who participated in the fund
transfer (i) one or more suits will likely be commenced shortly
to recover the $210,000,000, and (ii) the interests of FTHL are
in direct conflict with the other debtors.
The Committee therefore submits that FTHL must be represented by
separate counsel, and its estates administered separately.
(FLAG Telecom Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
FOCAL COMMS: Ernst & Young Replaces Arthur Andersen as Auditors
---------------------------------------------------------------
At a meeting held on April 9, 2002, the Board of Directors of
Focal Communications Corporation approved the engagement of
Ernst & Young LLP as its independent auditor for the fiscal year
ending December 31, 2002 to replace the firm of Arthur Andersen
LLP, which was dismissed as auditor of the Company effective
April 9, 2002. The audit committee of the Board of Directors
approved the change in auditors on April 1, 2002.
Focal Communications is a competitive local-exchange carrier
(CLEC) which provides local and long-distance voice services
over more than 500,000 access lines in more than 20 US
metropolitan markets. Targeting large corporations, it also
offers such data services as Internet access and remote access
to LANs, ISPs, and value-added resellers. Focal owns and
operates switches and leases transport capacity; it typically
provides its services over T1 lines. Nearly 70% of Focal's lines
are used for data traffic, and the company has rolled out
broadband digital subscriber line (DSL) service. Focal also
offers equipment colocation for ISPs. Investment firm Madison
Dearborn owns 35% of the company.
* * *
Previously reported in the February 28, 2002 issue of the
Troubled Company Reporter, earnings before interest, taxes,
depreciation and amortization (EBITDA) was negative $6.3 million
for the fourth quarter of 2001 and negative $7.1 million for the
full year.
GMS TECHNOLOGIES: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: GMS Technologies, Inc.
55 Broad Street, 20th Floor
New York, New York 10004
fka Global Market Solutions Corp.
fka Global Asset Market Corp.
Bankruptcy Case No.: 02-11779
Chapter 11 Petition Date: April 15, 2002
Court: Southern District of New York (Manhattan)
Judge: Robert E. Gerber
Debtor's Counsel: Randall Rainer, Esq.
Wollmuth, Maher & Deutsch, LLP
500 Fifth Avenue
Suite 1200
New York, New York 10110
(212) 382-3300
Fax : (212) 382-0050
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
GENSYM CORPORATION: Taps PricewaterhouseCoopers As Accountants
--------------------------------------------------------------
On April 8, 2002, Gensym Corporation engaged
PricewaterhouseCoopers LLP to serve as the Company's independent
public accountants for fiscal year 2002. According to the
Company, in the years ended December 31, 2001 and 2000 and
through April 8, 2002, the Company did not consult
PricewaterhouseCoopers LLP with respect to the application of
accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might
be rendered on the Company's consolidated financial statements,
or any other matters.
Gensym Corporation is a provider of software products and
services that enable organizations to automate aspects of their
operations that have historically required the direct attention
of human experts. Gensym's product and service offerings are all
based on or relate to Gensym's flagship product G2, which can
emulate the reasoning of human experts as they assess, diagnose,
and respond to unusual operating situations or as they seek to
optimize operations.
Gensym is currently not liquid with posted current liabilities
of $10.3 million and current assets of $7.9 million for the
fiscal year of 2001.
GLOBAL DIAMOND: Knight Securities Discloses 14.5% Equity Stake
--------------------------------------------------------------
Knight Securities, L.P. with principal offices in Jersey City,
New Jersey, beneficially owns 8,650,147 shares of the common
stock of Global Diamond Resources Inc., with sole powers to both
vote and dispose of, or direct the voting of and/or disposition
of, the entire 8,650,147 shares. The number of shares held by
Knight Securities represents 14.5% of the total outstanding
common stock of Global Diamond Resources.
The Company is engaged in diamond exploration and mining.
Global Diamond's liquidity is strained as of September 30, 2001,
with total current assets of $177,332 falling below total
current liabilities of $1.6 million.
GRAHAM PACKAGING: Sells Entire Operations in Italy
--------------------------------------------------
Graham Packaging Holdings has filed a report with the SEC in
regard to the disposition of the assets of two of its
subsidiaries, both of which are located in Italy and which
combined represent Graham Packaging's entire operations in
Italy.
On March 28, 2002, the Company completed the sale of certain
assets and liabilities of its subsidiary, Graham Packaging Italy
S.R.L. The sale was effectuated pursuant to an Asset Purchase
and Sale Agreement between the purchaser, Faserplast S.R.L., and
Graham Packaging Italy S.R.L. The purchase price paid by
Faserplast S.R.L. was cash in the amount of $18,000, plus the
assumption by the purchaser of the liability for the severance
indemnities due to transferred personnel on the closing date,
which, as of February 28, 2002, amounted to $716,000. The
purchase price is subject to adjustment if inventories are less
than a specified amount. Consideration was determined by arm's-
length negotiations. The Company has stated that there was no
prior material relationship between the purchaser, on the one
hand, and Graham Packaging, its affiliates, officers or
directors or any of their associates, on the other hand.
On March 28, 2002, the Company completed the sale of certain
assets and liabilities of its subsidiary, Societa' Imballaggi
Plastici S.R.L. The sale was effectuated pursuant to an Asset
Purchase and Sale Agreement between the purchaser, Serioplast
S.P.A., and Societa' Imballaggi Plastici S.R.L. The purchase
price paid by Serioplast S.P.A. was cash in the amount of
$294,000, plus the assumption by the purchaser of the liability
for certain severance indemnities due to transferred personnel
on the closing date, which, as of January 31, 2002, amounted to
$555,000. The purchase price is subject to adjustment if
inventories are less than a specified amount. Consideration was
determined by arm's-length negotiations. The Company has state
that there was no prior material relationship between the
purchaser, on the one hand, and Graham Packaging, its
affiliates, officers or directors or any of their associates, on
the other hand. Faserplast S.R.L. and Serioplast S.P.A. are
affiliates of one another.
Based in York, Graham Packaging designs and makes customized
blow-molded plastic containers for branded food and beverage
products, household and personal-care products, and automotive
lubricants. The company employs approximately 4,000 people at
plants throughout North America, Europe, and Latin America and
produces more than six billion containers per year.
Graham Packaging posts a total partners' capital deficit of $485
million for the year 2001.
HCI DIRECT: Wants to Appoint Innisfree as Noticing Agent
--------------------------------------------------------
HCI Direct, Inc. and its debtor-affiliates ask for permission
from the U.S. Bankruptcy Court for the District of Delaware to
appoint Innisfree M&A Incorporated as noticing agent for the
Bankruptcy Court in its chapter 11 cases.
The Debtors will need to solicit votes on their restructuring
plan from:
i) the holders of the Debtors' 13 3/4% senior subordinated
notes due 2002 issued in the aggregate principal amount
of $70,000,000 (Senior Notes);
ii) the holders of the Debtors' privately held preferred
stock (Preferred Stockholders); and
iv) holders of senior secured bank claims against the
Debtors (Lenders).
Many of the beneficial holders of the Senior Notes hold them in
"street name" though a bank, broker, agent, proxy or other
nominee.
The Debtors explain that the successful dissemination of notices
to the beneficial owners of the Senior Notes will require
coordination with the Nominees, primarily to ensure that these
entities properly forward notices and other materials to their
customers. The Debtors believe that Innisfree is well suited to
assist the Debtors with this task.
As noticing agent, Innisfree is expected to:
a) work with the Debtors to request appropriate information
from indenture trustees, transfer agent(s), and The
Depository Trust Company;
b) mail various documents to creditors and interest
holders, including the disclosure statement to non-
voting parties;
c) coordinate the distribution of documents to "street
name" Senior Note holders by forwarding documents to the
Nominee record holders of the Senior Notes, who in turn
will forward them to beneficial owners; and
d) provide soliciting and noticing advisory services, as
needed, to the Debtors.
The Debtors agree to pay Innisfree its customary hourly rates on
its solicitation and noticing advisory services:
Managing Director $325 per hour
Practice Directors $250 per hour
(e.g., Jane Sullivan)
Account Executives $210 per hour
Staff Assistants $150 per hour
HCI Direct (formerly Hosiery Corporation of America) which sells
women's hosiery filed for chapter 11 protection on April 15,
2002. Mark S. Chehi, Esq. and Jay M. Goffman, Esq. at Skadden,
Arps, Slate, Meagher & Flom represent the Debtors in their
restructuring efforts. When the Company filed for protection
from its creditors, it listed assets of over $50 million and
debtors of over $100 million.
HUDSON RCI: Misses Interest Payment On 9-1/8% Senior Sub. Notes
---------------------------------------------------------------
Hudson Respiratory Care Inc. announced preliminary unaudited
results for the fourth quarter and year ended December 31, 2001
for the company on a consolidated basis and for the company and
its restricted subsidiaries as defined by the Indenture for its
9 1/8% Senior Subordinated Notes due 2008 (the "Restricted
Group"). The results for the Restricted Group exclude the
impact of certain subsidiaries that do not guarantee the Senior
Subordinated Notes or borrowings under the company's bank credit
facility.
For the three months ended December 31, 2001, the company
generated consolidated net sales of $33.4 million, a $12.1
million or 26.6% decrease from the comparable period in 2000.
The decrease in net sales is attributable to the following: (1)
reduced seasonal demand worldwide for certain products due to
mild levels of flu-related illnesses and unusually warm weather
in the fourth quarter of 2001; (2) lower than normal demand
from U.S. hospitals following the September 11, 2001 terrorist
attacks in New York and Washington as a result of reduced
hospital admissions and lower levels of elective surgeries; and
(3) a decision by the company not to offer purchasing incentives
at year end to distributors. Net sales for the Restricted Group
for the quarter ended December 31, 2001 were $29.7 million
as compared to $44.2 million in the fourth quarter of 2000, a
decrease of 32.8%. In addition to the factors mentioned above,
the decrease in net sales of the Restricted Group in the fourth
quarter of 2001 as compared to the prior year reflects higher
sales from the Restricted Group to unrestricted subsidiaries in
2000 due to the establishment of distribution and direct selling
operations in Europe.
On a consolidated basis, the company reported a loss from
operations for the quarter ended December 31, 2001 of $54.9
million compared to a loss of $5.1 million in the fourth quarter
of 2000. The increase in the operating loss reflects a charge
of $33.0 million for goodwill impairment as well as $13.0
million in charges for obsolete and excess inventory, software
impairment, bad debts, write-down of certain fixed assets,
facility closing costs and severance expense. For the fourth
quarter of 2001, the Restricted Group generated a loss from
operations of $44.6 million as compared to an operating loss of
$3.1 million in the comparable quarter of 2000.
Approximately $26.2 million of the goodwill impairment charge
and all of the $13.0 million of other charges relate to the
Restricted Group.
Net loss on a consolidated basis for the quarter ended December
31, 2001 was $127.0 million, including a charge of $68.9 million
in connection with the establishment of a full valuation of the
company's deferred tax assets.
Consolidated net sales for the year ended December 31, 2001 were
$157.1 million, a decrease of $2.1 million or 1.4% from $159.2
million of net sales in the prior year. This decrease resulted
from the factors impacting the fourth quarter discussed above
and was offset partially by increased sales of the Sheridan
product line acquired in October 2000. Net sales for the
Restricted Group in 2001 were $143.6 million in 2001, a decrease
of $2.2 million or 1.5% from $145.8 million of net sales
generated a year earlier.
For the year, the company generated a consolidated operating
loss of $51.7 million as compared to operating income of $16.3
million in 2000. In addition to the charges for goodwill
impairment of $33.0 million and other items totaling $13.0
million discussed above, the operating loss is attributable to
lower gross margins due to problems encountered in the
implementation of a new Enterprise Resource Planning (ERP)
information system, higher rebate allowances and increased
freight costs, increased general & administrative costs related
to operating the new ERP system and consulting expenses, and
higher distribution and sales and marketing expenses. The
operating loss for the Restricted Group in 2001 was $42.8
million versus operating income of $13.7 million in 2000.
Adjusted EBITDA (income before depreciation and amortization,
interest expense, income tax expense, and for the period ended
December 31, 2001, charges related to the impairment of goodwill
of $33.0 million and the $13.0 million of other charges
discussed above) for the year ended December 31, 2001 on a
consolidated basis decreased $21.8 million from the prior year
to $7.4 million. Restricted Group Adjusted EBITDA for 2001 was
$7.8 million as compared to $24.1 million in 2000.
Net loss on a consolidated basis for 2001 was $143.7 million as
compared to a net loss of $9.2 million in 2000.
As previously disclosed, the company changed auditors in January
2002 from Arthur Andersen & Co. LLC to Deloitte & Touche LLC.
The company's audited consolidated financial results are not yet
available, but will be made available upon their completion.
Due to the company's financial performance in the fourth quarter
of 2001 and failure to make a scheduled amortization payment on
March 31, 2001, the company is in default of its Bank Credit
Agreement. The company also failed to make a scheduled interest
payment to holders of its 9 1/8% Senior Subordinated Notes on
April 15, 2001 following the receipt of notification from its
senior lenders preventing the company from making such interest
payment. Consequently, the company is in default of its
obligations pursuant to the Indenture to its 9 1/8% Senior
Subordinated Notes. Such default, if not cured within 30 days
of the scheduled interest payment date, shall become an Event of
Default as defined therein. The company is in discussions with
its lenders and bondholders regarding potential remedies to cure
its existing default conditions and is currently exploring
alternatives designed to improve the company's liquidity and
restructure its debt obligations. The company has retained
Jefferies & Co. to act as its financial advisor.
Hudson Respiratory Care Inc. is a leading manufacturer and
marketer of disposable medical products utilized in the
respiratory care and anesthesia segments of the domestic and
international health care markets.
I.P.C. GROUP: A.M. Best Downgrades Financial Rating To C From B+
----------------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to C
(Weak) from B+ (Very Good) of the I.P.C. Group, Bermuda, and
removed the rating from under review. I.P.C. includes: Mutual
Indemnity (Barbados) Ltd., Mutual Indemnity Ltd., Mutual
Indemnity (Bermuda) Ltd., and Mutual Indemnity (U.S.) Ltd., all
of Bermuda. Mutual Indemnity (Dublin) Ltd., Ireland, has been
de-coupled from the group and downgraded to a financial strength
rating of D (Poor) due to its significant unrealizable assets
associated with Legion Insurance Company. The rating has also
been removed from under review. On March 29, 2002, A.M. Best
downgraded the financial strength rating to E (Under Regulatory
Supervision) of I.P.C.'s affiliated U.S. companies, under Legion
Insurance Group: Legion Indemnity Company, Illinois, Legion
Insurance Company and Villanova Insurance Company, both of
Pennsylvania. At that time, I.P.C. was placed under review with
negative implications along with the downgrade of Legion
Insurance Group.
The rating action reflects the uncertainty of the present and
future realizable value of the non-liquid assets of I.P.C.,
making the ability of capital to support an efficient and secure
run-off of the liabilities and any asset value shortfall
questionable. While remote, it is unclear whether all of the
assets of the I.P.C. companies are protected from the possible
need to liquidate at the Mutual Risk Management (MRM) level.
With no policy-issuing carrier identified to replace Legion
Insurance Company--placed in voluntary rehabilitation on April
1, 2002--the operations of I.P.C. are at a standstill. Given the
material operating and financial problems, the ability of the
rent-a-captive companies to continue as an ongoing concern is
doubtful. Sale of the operations is similarly capricious.
MRM--the ultimate parent of I.P.C.--continues to maintain
significant debt obligations, the bulk of which is now short-
term bank debt. Without restructuring, holding company debt
perpetuates uncertainty, and the inability to repay debt
obligations may require MRM to liquidate. Therefore, instability
continues for all of the MRM companies.
A.M. Best Co., established in 1899, is the world's oldest and
most authoritative insurance rating and information source. For
more information, visit A.M. Best's Web site at
http://www.ambest.com
INTEGRATED HEALTH: Seeks to Stretch Time Make Leases Decisions
--------------------------------------------------------------
The Integrated Health Services, Inc., and its debtor-affiliates
seek a further extension, pursuant to section 365(d)(4) of the
Bankruptcy Code, of the time within which they must decide to
assume, assume and assign, or reject their unexpired
nonresidential real property leases to and including October 1,
2002 (with certain modifications with respect to the leases of
Rotech Medical Corporation and its subsidiaries).
As of the Petition Date, the Debtors were parties to more than
1,500 unexpired nonresidential real property leases and
subleases. Over the course of these chapter 11 cases, the
Debtors have obtained Court approval to reject certain of the
Unexpired Leases and assume others. Consequently, at the
present time, the Debtors, are lessees or sub-lessees under more
than 1,300 Unexpired Leases.
The Debtors urge the Court to grant the extension because the
Unexpired Leases are valuable assets of the Debtors' estates and
are integral to the continued operation of their businesses.
Failure to assume valuable Leases within the currently set
period will result in a forfeiture of their right to assume such
valuable assets while premature assumption in order to avoid the
"deemed rejection" provision of the Bankruptcy Code will result
in unnecessary substantial administrative expenses to their
estates.
The Debtors substantiate their requests with various causes for
which the request should be granted:
-- determinations to assume or reject the Unexpired Leases
must be reasoned and informed, because the Unexpired Leases are
an integral part of the Debtors' business.
-- The Debtors' cases are large and complex.
-- The complexity and distinctiveness of many of the lease
arrangements make the task of deciding to assume or reject that
much more daunting. In some cases, the Debtors' facility leases
are intertwined with other facility leases with the same
landlord, making the assumption/rejection decision more complex.
-- The Debtors' continuing effort to rationalize their
vast lease portfolio produced significant results during the
Fourth Extension Period. In particular, the Court confirmed a
joint plan of reorganization for the Rotech Debtors, which are
the lessees under more than 75% of the Unexpired Leases. Upon
the Effective Date of the Rotech Debtors' plan of
reorganization, each of the Rotech Leases will either be
rejected or assumed. The Rotech Debtors hope that the Effective
Date of the Rotech Plan will occur prior to April 1, 2002.
However, because the Rotech Plan's effectiveness requires
satisfaction of certain conditions which are not within the
Rotech Debtors' exclusive control, they are requesting an
extension (to the earlier of the Effective Date of the Rotech
Plan or October 1, 2002) in an abundance of caution.
-- During the Fourth Extension Period, the Debtors assumed
or filed pending motions to assume at least 15 facility leases
and rejected or filed pending motions to reject at least 75
facility leases. In many cases, the rejections have required the
transfer of operations, which the Debtors have achieved in large
part on a consensual basis.
-- At this stage in their chapter 11 cases, the Debtors
are evaluating plan of reorganization alternatives, including a
possible sale of some or all of the Debtors' assets. It would be
premature and possibly harmful to the estates for the Debtors to
make precipitous decisions to assume or reject Unexpired Leases
prior to determining which of them will be targeted for
acquisition by potential purchasers.
-- The Debtors' decision-making process with respect to
many of its remaining facility leases has recently become
increasingly complex and uncertain as a result of proposed
changes in federal and state reimbursement rates to healthcare
providers, which are currently in a state of flux. Among other
things, the Medicare Add-Ons pursuant to legislation in 1999
enacted in response to an explosion of bankruptcy filings in the
industry are due to expire in October 2002.
-- The effect of the dramatic increase in insurance costs
in the wake of the tragic events of September 11, 2001, together
with a higher rate of inflation for wages than projected has
rendered certain once-favorable facility leases in danger of
generating lower or even negative revenues. The Debtors require
additional time to evaluate the impact of these important
economic factors.
-- Decisions to assume or reject facility leases
necessarily involve complex negotiations not only with landlords
but with a number of government departments.
-- As providers of post-acute and related specialty
healthcare services, the Debtors must avert any inadvertent or
forced closure of a long-term care facility that would adversely
affect the health and welfare of the facility's residents.
-- The lessors in respect of the Unexpired Leases will not
be prejudiced by the relief the Debtors request because: (i) the
Debtors continue to perform in a timely manner their post-Filing
Date obligations under the Unexpired Leases, except with respect
to bona-fide disputes; and (ii) any lessor may request that the
Court fix an earlier date by which the Debtors must assume or
reject its lease in accordance with section 365(d)(4) of the
Bankruptcy Code.
-- In other large healthcare bankruptcy cases, which have
faced the same complex issues in making assumption/rejection
decisions, the Court granted extensions through the confirmation
of such debtors' plans of reorganization, e.g., In re Sun
Healtheare Group. Inc. Case No. 99-3657, In re Genesis Health
Ventures, Inc., et al., Case No. 00-2692.
For all these reasons, the Debtors are convinced that they
should not be compelled to make precipitous decisions as to
lease assumption or rejection and perhaps inadvertently reject a
valuable lease or prematurely assume a burdensome lease and
incur substantial administrative obligations, particularly in
light of the uncertainty surrounding the status of the Medicare
Add-Ons and the Debtors' ongoing sale efforts.
Accordingly, the Debtors submit that the extension of the period
within which the Debtors may assume or reject the Unexpired
Leases to and including October 1, 2002 is in the best interest
of the Debtors and their estates and should be granted.
(Integrated Health Bankruptcy News, Issue No. 33; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
KAISER: Asbestos Claimants Sign-Up Campbell & Levine as Counsel
---------------------------------------------------------------
The Official Committee of Asbestos Claimants of the bankruptcy
cases of Kaiser Aluminum Corporation, and its debtor-affiliates
asks to retain Campbell & Levine, LLC as Delaware and associated
Counsel, nunc pro tunc to February 26, 2002.
Thomas Craig, a member of the Official Committee of Asbestos
Claimants, believes that the firm's professionals have
substantial experience in bankruptcy, including bankruptcies
including mass tort liability, insolvency, corporate
reorganization and debtor/creditor law.
According to Mr. Craig, Campbell & Levine, among other things,
are to provide these services:
A. provide legal advice as counsel regarding the rules and
practices of the Delaware Court to the committee's powers and
duties as an official Asbestos committee;
B. prepare and review as counsel , applications, motions,
complaints, answers, orders, agreements, and other legal
papers filed on or behalf of the Asbestos Committee for
compliance with the rules and practices of the Delaware
Court;
C. appear in Court as counsel to present necessary motions,
applications, and pleadings and otherwise protecting the
interests of the Asbestos Committee and asbestos-related,
personal injury creditors of the Debtors;
D. investigate, institute and prosecute causes of action on
behalf of the Asbestos committee and the Debtors' estates;
and,
E. perform such other legal services for the Asbestos committee
as it believes may be necessary and proper in the
proceedings.
Campbell & Levine are compensated on an hourly basis, plus
reimbursements for actual, necessary expenses that the firm
incurs. The professionals in Delaware proposed to represent the
committee and their respective hourly rates are:
Campbell & Levine, LLC --- Delaware
Professional Position Rate
----------------------- --------------- ------
Matthew G. Zaleski, III Member $295
Cathie J. Boyer Paralegal $125
Stephanie L. Peterson Legal Assistant $ 90
Campbell & Levine, LLC --- Pittsburgh
Professional Position Rate
--------------------- ---------- ------
Douglas A. Campbell Member $350
David B. Salzman Member $350
Philip E. Milch Member $265
Michele Kennedy Paralegal $ 90
Matthew G. Zaleski, III, member of the firm Campbell & Levine
discloses having rendered services to interested parties in
matters not related to the Debtors' Chapter 11 cases. Firms for
which such services were provided include: General Electrical
Capital Corp., the CIT Group/Business Credit, Inc., Bank America
Business Credit, Inc., Heller Financial, Inc., La Salle Business
Credit, Inc., Sanwa Business Credit Corp., the Bank of New York
Commercial Corp., Corestates Bank, N.A., FSB Business Finance
Corp., First National Bank of Boston, Nationsbank of Texas,
N.A., BTM Capital Corp., Gibralter Corp., of America and
National City Commercial Finance, Inc., and the Official
Committee of Asbestos Claimants and the Official Committee of
Asbestos Personal Injury Claimants and H.K. Porter.
(Kaiser Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
DebtTraders reports that Kaiser Aluminum & Chemicals's 12.750%
bonds due 2003 (KAISER2) are quoted between 23 and 25. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=KAISER2for
some real-time bond pricing.
LEVI STRAUSS: Fitch Lowers Senior Unsecured Debt Rating to B+
-------------------------------------------------------------
Levi Strauss & Co.'s senior unsecured debt rating is lowered to
'B+' from 'BB-' by Fitch Ratings. The company's secured bank
facility rating is affirmed at 'BB'. As of February 24, 2002 the
company had about $1.4 billion in senior unsecured debt and $270
million in bank debt outstanding. The Rating Outlook has been
changed to Negative from Stable, reflecting the ongoing
challenges Levi faces in stimulating top-line sales growth.
The rating action reflects Levi's continued decline in top-line
sales, coupled with the slower than expected pace of improvement
in credit protection measures. Also considered is the
competitive operating environment, which shows no signs of
easing. These factors are balanced against Levi's solid brands
with leading market positions as well as the geographic
diversity of its revenue base and solid cash flow generation.
As part of the ongoing restructuring of its business, last week
Levi announced the closure of 6 domestic manufacturing
facilities. Following these closures, the company will have shut
down 35 plants worldwide since 1997. While the closure of the
plants will benefit the company's cost structure, the one-time
costs associated with the closures along with the sustained
softness in the retail environment have decelerated the expected
improvements in Levi's credit metrics. Nevertheless, the company
maintains adequate cash flow generating ability and the
reduction in its fixed asset intensity will somewhat ease its
capital spending needs and should allow cash flow generated to
be directed toward debt reduction.
Despite its focus on product development and improving its
retail presentation, Levi continues to face challenges in
increasing its top-line sales. The 2001 revenue decline of 8.3%
follows four years of sales declines that ranged from 3.9% to
13.7%. While the pace of revenue erosion slowed in 2001 from the
prior two years, ongoing concerns center on whether the
company's initiatives will lead to a sustainable long-term top-
line growth in the face of the soft retail environment. In
addition, the modest gains in profit margins, with EBITDA margin
increasing to 13.0% in 2001 from 12.8% in 2000, led to slower
than expected improvement in the company's credit profile.
Leverage (total debt/EBITDA) declined to 3.5x in 2001 from 3.6x
in 2000, still somewhat higher than expected.
Importantly, the Levi's brand remains one of the most well
recognized brand names in the world. Despite some market share
slippage, its products continue to hold leading positions in
most markets. While denim products account for the majority of
Levi's sales, the company's Dockers brand, which accounted for
about 25% of revenues, holds the number one market position for
khaki pants in the U.S. Although Levi continues to introduce
more innovative product, such as Engineered Jeans or Dockers
Mobile Pant, the ability of the company to differentiate itself
from its competition with an ongoing line of more fashionable
products and an updated image remains key to its future success.
With products sold in about 100 countries worldwide, the company
also benefits from the geographic diversification of its revenue
base. Although more than half the company's sales and earnings
are generated in the U.S., Europe and Asia continue to account
for a significant percentage of sales and profitability, with
the balance generated in Latin America and Canada.
The two-notch differential between the senior unsecured debt and
the secured bank facility appropriately reflects the significant
progress the company has made in reducing its bank debt
outstanding, the considerable asset protection provided by the
security and the terming out of the facility through issuance of
senior unsecured debt. Since Nov. 2000, the company's bank debt
outstanding has declined by over $700 million and the size of
the revolver has dropped to $620 million from $750 million.
MCLEODUSA INCORPORATED: Emerges From Chapter 11 Bankruptcy
----------------------------------------------------------
McLeodUSA Incorporated, one of the nation's largest independent
competitive local exchange carriers, announced that its Amended
Plan of Reorganization of McLeodUSA Incorporated has become
effective and that it has emerged from Chapter 11 protection.
The Plan went into effect only 75 days after its filing. As
previously announced, the Plan received overwhelming approval
from all voting classes of McLeodUSA security holders and was
confirmed by the United States Bankruptcy Court for the District
of Delaware on April 5.
Pursuant to the Plan, McLeodUSA today will distribute $670
million in cash to its senior noteholders, as well as a new
Series A preferred stock and warrants to purchase new common
stock. McLeodUSA today will also distribute new common stock to
its old preferred stockholders. McLeodUSA new common stock will
resume trading on Nasdaq on April 18 under the symbol "MCLDD."
McLeodUSA new Series A preferred stock will also begin trading
on Nasdaq on April 18 under the symbol "MCLDO." The distribution
of new common stock to existing holders of common stock cannot
be made until the Company is able to establish an appropriate
reserve, if any, related to unresolved claims made on behalf of
purported securities class action claimants.
In conjunction with its emergence from Chapter 11 protection,
McLeodUSA:
-- sold its Directory Publishing Business to Yell Group Ltd.
for $600 million;
-- received $175 million from Forstmann Little & Co. in
connection with the sale of new common stock and warrants to
purchase common stock;
-- entered into a $110 million revolving credit facility
(which may be increased to $160 million), expiring on May 31,
2007, with a banking syndicate led by arranger J.P. Morgan Chase
and co-arrangers, Bank of America and Citibank; and
-- announced that Jeffrey D. Benjamin has joined the Board of
Directors of McLeodUSA as the representative of the Company's
former noteholders.
The Plan is described in detail in the Disclosure Statement with
Respect to Amended Plan of Reorganization of McLeodUSA
Incorporated filed as Exhibit 99.1 to Current Report on Form 8-K
filed with the Securities and Exchange Commission on March 5,
2002 and, also, in the Annual Report on Form 10-K filed with the
SEC on April 12, 2002.
The Plan provides for different types of distributions to be
made to three basic classes of claimants and interest holders.
Class 5, the largest class in the Plan, was made up of claims of
approximately $3 billion of McLeodUSA senior noteholders. Over
98% of the senior notes that voted on the Plan approved it.
Holders of Class 5 claims will receive a combination of cash,
McLeodUSA preferred stock and warrants to purchase McLeodUSA
Class A common stock in respect of their claims.
Class 6 was made up of claims of holders of McLeodUSA preferred
stock outstanding prior to emergence. Over 99% of the preferred
stock that voted on the Plan approved it. Holders of Class 6
claims will receive McLeodUSA common stock in respect of their
claims.
Class 7 and Class 8 are made up of holders of McLeodUSA common
stock outstanding prior to emergence from Chapter 11 protection
and securities claims, including certain claimants under
purported securities class action lawsuits filed against
McLeodUSA. Under the Plan, members of Class 7 and Class 8 are to
share in the distribution of 54,775,663 shares of new common
stock. However, as previously announced and as described more
fully below, under the Plan, McLeodUSA is not allowed to make
any distribution to the members of Class 7 and Class 8 until the
purported securities claims are resolved or the Court
establishes a reserve for a portion of the available shares and
permits the distribution of the remainder. The purpose of such a
reserve is to retain new common stock in an amount equal to 100%
of the distribution to which disputed claims would be entitled
if their claim was allowed in full.
As of April 17, no resolution, full or partial, had been reached
in respect of the purported securities claims, which the
claimants allege exceed $300 million. On April 12, 2002,
McLeodUSA filed a motion to establish a reserve for the Class 8
claims. That motion will be heard by the Court on April 29,
2002. Because McLeodUSA believes the securities class action
claims are without merit, the motion seeks to set the reserve at
zero. In the alternative, the motion seeks to have the Court
establish a minimal reserve of between 1.5 million to 4.6
million shares of the approximately 54.8 million shares of new
common stock to be distributed to Classes 7 and 8.
For the foregoing reasons, McLeodUSA will not in its initial
distribution make any distribution of shares of new common stock
reserved for issuance to Class 7 and Class 8 until the issues
regarding the reserve are resolved.
As previously announced, as a result of its emergence from
Chapter 11 protection, McLeodUSA will require implementing fresh
start accounting rules. These rules require McLeodUSA to revalue
its assets and liabilities to current fair value, re-establish
stockholders' equity as the reorganization value determined in
connection with the Plan, and record any differences between the
reorganization value and asset values as changes to goodwill.
The adoption of fresh start reporting, in conjunction with the
sale of the Company's Directory Publishing Business, will have a
material effect on McLeodUSA financial statements. As a result,
the Company's financial statements published for periods
following April 16, 2002 will not be comparable with those
prepared before April 16, 2002.
McLeodUSA provides integrated communications services, including
local services, in 25 Midwest, Southwest, Northwest and Rocky
Mountain states. The Company is a facilities-based
telecommunications provider with, as of December 31, 2001, 42
ATM switches, 60 voice switches, 485 collocations, 525 DSLAMs,
and over 31,000 route miles of fiber optic network. Visit the
Company's Web site at http://www.mcleodusa.com
DebtTraders reports that McLeodUSA Inc.'s 8.125% bonds due 2009
(MCLD1) are trading between the prices 24.5 and 25.5. Check
http://www.debttraders.com/price.cfm?dt_sec_ticker=MCLD1for
some real-time bond pricing.
METRIS COS.: Fitch Cuts Credit Facility & Sr. Debt Ratings to B+
----------------------------------------------------------------
Fitch Ratings lowers Metris Companies Inc. secured bank credit
facility to 'B+' from 'BB+' and senior debt to 'B+' from 'BB'.
In addition, the long-term deposit rating for Metris' wholly
owned banking subsidiary, Direct Merchants Credit Card Bank N.A.
(DMCCB), is also lowered to 'BB' from 'BB+'. The Rating Outlook
remains Negative.
This rating action reflects the heightened regulatory scrutiny
the company is now operating under following the company's
written agreement with the Office of the Comptroller of the
Currency (OCC), which includes prior OCC approval for dividends
between DMCCB and Metris, as well as the development of more
rigorous reporting requirements and implementing certain
functional enhancements. This agreement requires Metris, among
other things, to institute or enhance certain processes and
procedures, mainly at the bank level. These include more routine
reporting to the OCC, while improving processes at the bank or
transferring functions to the bank from the holding company. The
equalization of the bank credit facility with the senior debt
reflects the parri-passu nature of the credit facility with the
senior debt.
The agreement does not place formal limitations on deposit or
asset growth, although credit line increases will be more
tightly managed. Importantly, there is now a dividend
restriction between DMCCB and Metris, which is a driving factor
in differentiating the bank and holding company ratings at this
time. While the initial financial implications of this
regulatory action are expected to be nominal, Fitch believes
that this reflects regulators increased uneasiness with the
company's lending activities to low and moderate income
consumers. In Fitch's view, the longer-term prospects for
Metris' business continue to be challenged. The agreement
follows recent regulatory actions to alter the company's charge-
off policy for accounts in consumer credit counseling and to
maintain higher capital levels at DMCCB in accordance with the
expanded guidance on subprime lending.
Fitch's Negative Outlook continues to reflect the view that
Metris will be challenged to manage credit quality and
profitability throughout 2002. Metris expects receivable growth
to be weaker than expected, which will negatively impact
earnings and profitability throughout 2002. Moreover, the
regulatory agreement tightens Metris' ability to offer credit
line increases to existing card holders, further reducing
receivable growth. Fitch remains concerned with the company's
reliance on, and ability to execute securitization transactions
to fund its business, particularly under more stressful
conditions. Moreover, Fitch generally believes deposit growth
may be constrained by what appears to be regulatory discomfort
with federally insured deposits funding subprime assets.
Metris Companies Inc. is a Minnesota-based marketer of consumer
credit cards and related enhancement products. At March 31,
2002, the company reported $11.77 billion of managed loans, and
$1.17 billion of common and preferred equity.
NATIONSRENT: Citizens Leasing Presses For $11 Mil Debt Payment
--------------------------------------------------------------
According to L. Jason Cornell, Esq., at Agostini, Levitsky,
Isaacs & Kulesza in Wilmington, Delaware, Citizens Leasing
Corporation leases hundreds of pieces of equipment to
NationsRent Inc., and its affiliated-debtors pursuant to their
Amendment and Restatement of Equipment Lease Agreement dated
February 25, 1999. Since the petition date, the Debtors have
continued to rent equipment to their customers, but have made no
lease payments to Citizens. The delinquent lease payments
amount to an aggregate of $11,000,000. In addition, after the
petition date, the Debtors informed Citizens that they sold some
pieces of equipment without authorization and could not locate
other pieces of the equipment. The Debtors have indicated
that additional pieces of equipment may be sold in the future
and that the Debtors cannot prevent such unauthorized sales.
To protect its interest in the equipment, Citizens wants the
Court to grant it relief from the automatic stay to enable
Citizens to terminate the leases and compel the Debtors to
return the Equipment, or in the alternative, for the Debtors to
provide Citizens with adequate protection. It also asks the
Court to allow the payment of post-petition rent for the
equipment and to compel the Debtors' decision whether to assume
or give up the leases immediately.
The equipment leases are:
A. Equipment Schedule 42, which expires on October 2, 2004 and
requires, during its term, that the Debtors make one
quarterly lease payment on arrears amount $352,909 and 19
quarterly lease payments in arrears in the amount of
$440,045;
B. Equipment Schedule 43, which expires on October 2, 2004 and
requires, during its term, the Debtors to make one quarterly
lease payment on arrears amount $67,775 and 19 quarterly
lease payments in arrears in the amount of $84,606;
C. Equipment Schedule 44, which expires on October 2, 2004 and
requires, during its term, the Debtors to make one quarterly
lease payment on arrears amount $84,594 and 19 quarterly
lease payments in arrears in the amount of $105,602; and,
D. Equipment Schedule 45, which expires on October 2, 2004 and
requires, during its term, the Debtors to make one quarterly
lease payment on arrears amount $100,593 and 19 quarterly
lease payments in arrears in the amount of $125,575.
Mr. Cornell informs the Court that the lease agreement requires
the Debtors to maintain the Equipment in accordance with the
manufacturers' recommendations and to provide all services for
and make all repairs to the Equipment, each, at the Debtors'
sole expense. In addition, Citizens has also the right to
inspect the equipment and equipment maintenance records, once
per quarter and with 48 hours notice. The Debtors are also not
permitted to make material alterations to the equipment without
citizens' prior written notice.
Further, Mr. Cornell adds that the agreement requires the
Debtors to pay all taxes assessed or relating to the equipment.
The agreement also requires the Debtors to pay all fees incurred
in the process of, among other things, tilting, recording and
stamping of the equipment, documents and instruments related to
the equipment to the extent permitted by applicable law. The
lease agreement also requires the Debtors to return the
equipment to Citizens within 10 days of the expiration or early
termination of Citizens Leases. The equipment has to be in good
condition and returned to Citizens at any location in the
continental United States.
If the Court does not grant Citizens relief from stay, Mr.
Cornell asks that the Debtors provide for its interests
regarding the equipment with adequate protection. In other
words, by complying with the requirements of Citizens Leases. To
the extent the adequate protection ordered by the Court proves
to be inadequate, any claim by Citizens is entitled to
superiority administrative status. The Court should also compel
the Debtors to pay their post-petition obligations to Citizens
worth $755,829 and due on April 1, 2002. Included as well would
be all lease payments due after April 1, 2002, in full, until
such time as Citizens Leases are terminated or the Debtors
reject the leases. (NationsRent Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
OCEAN POWER: Cornell, et al., Register 13.7MM Shares for Sale
-------------------------------------------------------------
Ocean Power Corporation is filing with the SEC, prior to
distributing a prospectus, registration and notice of the sale
of up to 13,720,270 shares of its common stock by certain
persons who are, or will become, stockholders of Ocean Power.
Ocean Power is not selling any shares of common stock in this
offering and therefore will not receive any proceeds from this
offering. Ocean Power will, however, receive proceeds from the
sale of common stock under the Equity Line of Credit. All costs
associated with the registration with the SEC will be borne by
the Company. Cornell Capital Partners, L.P. is entitled to
retain 5.0% of the proceeds raised by Ocean Power under the
Equity Line of Credit.
The shares of common stock are being offered for sale on a "best
efforts" basis by the selling stockholders at prices
established on the Over-the-Counter Bulletin Board during the
term of the offering. There are no minimum purchase
requirements. These prices will fluctuate based on the demand
for the shares of common stock.
The selling stockholders are:
* Cornell Capital Partners, L.P., who intends
to sell up to 12,760,270 shares of common stock
acquired pursuant to the Equity Line of Credit and
the purchase of convertible debentures.
* Other selling stockholders, which intend to sell up
to 960,000 shares of common stock.
Cornell Capital is an "underwriter" within the meaning of the
Securities Act of 1933 in connection with the sale of common
stock under the Equity Line of Credit Agreement. Cornell
Capital will pay Ocean Power 95% of the market price of its
common stock. The 5% discount on the purchase of the common
stock to be received by Cornell Capital will be an underwriting
discount.
Ocean Power's common stock is quoted on the Over-the-Counter
Bulletin Board under the symbol "PWRE." On April 9, 2002, the
last reported sale price of its common stock on the Over-the-
Counter Bulletin Board was $0.90 per share.
PRICE TO PUBLIC* PROCEEDS TO SELLING SHAREHOLDERS
Per share $0.90 $0.90
----- -----
Total $0.90 $12,348,243
===== ===========
With the exception of Cornell Capital, which is an
"underwriter", no underwriter or any other person has been
engaged to facilitate the sale of shares of common stock in this
offering. This offering will terminate sixty days after
Cornell Capital has advanced $10.0 million or twenty-four months
after the effective date of the Registration Statement,
whichever occurs first. None of the proceeds from the sale of
stock by the selling stockholders will be placed in escrow,
trust or any similar account.
Ocean Power Corporation is developing modular seawater
desalination systems integrated with environmentally friendly
power sources.
Ocean Power, as of September 30, 2001, reported a total
shareholders' equity deficit of $3.6 million.
ON SEMICONDUCTOR: Posts $50 Million First Quarter Net Loss
----------------------------------------------------------
ON Semiconductor Corp. (Nasdaq: ONNN) Wednesday announced that
total revenues in the first quarter of 2002 were $269 million, a
sequential increase from the fourth quarter of 2001, exceeding
previous guidance of sequentially flat to slightly down.
The company had a pro forma net loss, excluding restructuring
charges, of $43 million, or $0.26 per share, in the first
quarter of 2002, ahead of First Call's consensus loss estimate
of $0.31 per share. During the first quarter of 2002,
restructuring charges of $7 million were incurred primarily
associated with previously announced workforce reductions in
Europe.
Including restructuring charges, the company reported a net loss
of $50 million, or $0.30 per share, in the first quarter of
2002. EBITDA was $29 million in the first quarter of 2002 as
compared to $11 million in the fourth quarter of 2001.
Gross margin improved to 22 percent in the first quarter, up
from 14 percent in the prior quarter, as further cost reductions
were realized and factory utilization improved to over 65
percent in the first quarter from approximately 50 percent in
the fourth quarter of 2001.
The company is on track to complete actions by the end of 2002
that it currently expects to generate approximately $360 million
of annualized cost savings, as compared to its cost structure as
of the first quarter of 2001. As of the end of the first quarter
of 2002, the company completed actions to achieve an estimated
$290 million of these savings.
Backlog at the end of the first quarter of 2002 was $223
million, an increase of $24 million from the end of fourth
quarter of 2001. "The market continues to provide us with strong
indications of stabilization," said Steve Hanson, ON
Semiconductor president and chief executive officer.
"We have capitalized on this trend with an initiative targeting
the PC market that provides our customers with advanced analog
ICs as well as the critical MOS power devices to complete the
system-level solution. Customers such as Astec, Legend QDI and
Samsung are designing our parts into some of their most advanced
offerings.
"To demonstrate our commitment to this market, we introduced
several exciting new devices. Using our MicroIntegration
process, we introduced a USB compatible protection filter.
Alcatel is using this part in its latest DSL modem. The success
of this initiative spilled over into other markets as well.
"This quarter, we announced significant design wins at TCL,
China's largest television manufacturer, and Hi-Tech, China's
largest producer of PDAs."
"We have become a different company over the course of the
previous year and strengthened our leadership team that will
chart the direction of our new company," Hanson added. "Syrus
Madavi is now our executive chairman and chairman of the board.
"John Kurtzweil has joined us as senior vice president, chief
financial officer and treasurer and Bill Bradford recently came
aboard as senior vice president of sales and marketing. Our
ability to attract this high-level talent clearly reflects the
great potential of our company. All of this is happening at the
right time; backlog is up from the prior quarter and consumer
confidence is rising.
"We are preparing for the increase in demand that we expect to
follow."
"Regarding our second quarter outlook, we expect revenues and
margins to show sequential improvement again with the continued
strength of orders, particularly in Asia, and further execution
in our cost saving activities.
"We anticipate total revenues to be between $270-$275 million in
the second quarter with gross margins increasing to 25-27
percent and operating expenses remaining flat to slightly down
from the first quarter. At these revenue and expense levels for
the second quarter, we expect to reduce the loss per share to
$0.20-$0.24. EBITDA is expected to be in the range of $45-$50
million."
EBITDA represents net income loss before interest expense,
provision for income taxes, depreciation and amortization
expense, restructuring and other charges and minority interests.
"With improving financials and our continued focus on providing
power and data management solutions, we are excited about
strengthening our competitive position as the market begins to
recover," Hanson said.
ON Semiconductor offers an extensive portfolio of power and data
management semiconductors and standard semiconductor components
that address the design needs of today's sophisticated
electronic products, appliances and automobiles. For more
information visit ON Semiconductor's Web site at
http://www.onsemi.com
As of March 29, 2002, the company reports total liabilities of
1,752,600,000 against total assets of $1,294,600,000.
OPTICON MEDICAL: Secures DIP Financing to Fund Reorganization
-------------------------------------------------------------
Opticon Medical, Inc. (OTC Bulletin Board: OPMI) has received
final court authorization of its debtor in possession (DIP)
financing to fund its reorganization under Chapter 11 of the
Federal Bankruptcy Code. The proceeds of the DIP financing will
be used to fund operations through the pendency of the Chapter
11 case. The process of reorganizing the Company may include
the sale of substantially all of the Company's assets, either
pursuant to a court-approved plan of reorganization, or in a
separate sale approved by the bankruptcy court.
"We are pleased with the terms of the DIP financing and are
proceeding onto further discussions with this investor group
regarding its intended purchase of some or all of the Company's
assets," stated Opticon President, Glenn Brunner. He noted,
however, that there could be no assurance that these discussions
would result in the basis for a plan of reorganization
acceptable to the Company's creditors and shareholders.
Since its voluntary petition in March, the Company has continued
to operate under court protection from creditors while planning
its reorganization. As a development stage company, Opticon is
engaged in the development of a series of innovative and cost-
effective products for use in urology and in the management of
urinary incontinence, and has yet to receive FDA clearance or
establish revenue from sales of its initial commercial products.
ORBITAL IMAGING: Creditors Will Convene on May 8 in Virginia
------------------------------------------------------------
The United States Trustee will convene a meeting of Orbital
Imaging Corporation's creditors on May 8, 2002 at 1:00 p.m., at
115 S. Union St., Rm. 208, Alexandria, Virginia 22314. This is
the first meeting of creditors required under 11 U.S.C. Sec.
341(a) in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Orbital Imaging Corporation filed for chapter 11 protection on
April 5, 2002 in the U.S. Bankruptcy Court for the Eastern
District of Virginia. Geoffrey A. Manne, Esq., Shari Siegel,
Esq. and William Warren, Esq. at Latham & Watkins represent the
Debtor in its restructuring efforts. When the Company filed for
protection from its creditors, it listed assets and debts of
over $100 million.
PACIFIC GAS: Chairman Addresses Shareholders at Annual Meeting
--------------------------------------------------------------
The following is the text of the speech given Wednesday by
Robert D. Glynn, Jr., PG&E Corporation Chairman, Chief Executive
Officer and President, at the company's annual shareholders
meeting.
Good morning. Welcome to our annual meeting.
This is the 96th meeting for Pacific Gas and Electric Company,
and the 6th meeting for PG&E Corporation. Both meetings are
being held concurrently this morning.
I'm Bob Glynn, Chairman of the Board of both companies, and
Chief Executive Officer and President of PG&E Corporation.
On the stage with me are Bruce Worthington, Senior Vice
President and General Counsel, and Linda Cheng, Corporate
Secretary.
Behind them is Joseph Thatcher from Mellon Investor Services,
the independent Inspector of Election.
With us in the audience are members of our Boards of Directors
and a number of our senior officers, including Gordon Smith,
President and CEO of Pacific Gas and Electric Company, and Tom
Boren, President and CEO of PG&E National Energy Group (PG&E
NEG). Also here today are some of our former directors and
officers. We welcome them.
Today's program will include:
First, some discussion of the past year, as well as our
expectations for the year ahead.
Next, the formal business of the meeting.
And finally, an opportunity for shareholder questions and
answers.
Today's discussion will contain forward-looking statements about
our strategy, goals, and expectations for future performance.
It is important to recognize that the corporation's actual
results could differ materially.
A full discussion of the factors that could cause actual results
to differ materially can be found in our annual report to
shareholders and in our filings with the Securities and Exchange
Commission. We encourage you to always review our SEC filings
for additional information and to get a better understanding of
the various factors that can influence future results.
These remarks today will include overviews of 2001 and our
financial and operational performance last year, an update on
Pacific Gas and Electric Company's Chapter 11 proceeding, and a
look at 2002.
2001 Overview
2001 began with a lot of uncertainty in California. It ended
with much more clarity.
-- We grew earnings per share from operations by 19 percent,
surpassing our target for the year.
-- We announced plans to enable Pacific Gas and Electric
Company to exit bankruptcy.
-- We delivered on our commitment to provide California
utility customers with safe, reliable, and responsive gas and
electric service.
-- We grew the contributions of our National Energy Group,
and grew its assets by building new power plants and natural gas
pipeline projects.
-- And our shareholders saw the price of their shares return
at year's end to about the same level as at the end of 2000 --
reversing a substantial decline around the time of Pacific Gas
and Electric Company's bankruptcy.
Here are the highlights from 2001's financial performance.
We delivered $3.02 per share in earnings from operations,
compared with $2.54 per share in 2000. That's a 19 percent
increase -- beating our 8-10 percent growth target by a
substantial margin. We've met or exceeded that target now for
four consecutive years.
Total reported earnings for 2001 were also $3.02 per share.
Looking at the contributions in 2001 from each of our
businesses, both Pacific Gas and Electric and the PG&E National
Energy Group grew their contributions to earnings from
operations -- by about 19 percent and 29 percent, respectively.
These results would be strong for any year. But last year
wasn't just "any year."
It included volatile wholesale energy prices, the loss of
investment-grade credit ratings for both of California's big
utilities, and the need for the state to enter the energy
business in a big way. Also Pacific Gas and Electric Company's
Chapter 11 filing, the general economic downturn, and then
toward the end of the year the turbulence in the energy industry
as a whole.
And although it didn't directly impact our company, the tragedy
of September 11 caused the loss of some of our team's family,
friends, and business acquaintances, and we can't forget them.
After this list of challenges, some people might think the best
thing about 2001 is that it's over. But from my perspective,
the best thing about last year is the job our team did in
keeping focused on running the fundamentals of our business.
And "our team" means the entire team of 20,000 people
throughout the company who delivered this.
There was no shortage of events last year that could have taken
our eyes off the ball -- but didn't.
The team's performance is reflected in the operational
accomplishments from 2001.
Accomplishments
Here are some of Pacific Gas and Electric Company's
accomplishments for the year:
-- We negotiated financial arrangements with electric power and
natural gas suppliers to ensure they would continue providing
gas and electricity for our customers when credit downgrades
threatened those supplies at the height of the energy crisis.
-- Once again, we earned the Institute of Nuclear Power
Operations' top rating for safety and operational performance at
Diablo Canyon.
-- We helped connect 14 new power plants to the transmission
grid in California, totaling 1,200 megawatts (MW).
-- We completed 30 critical transmission capacity projects in
order to move more power to the regions and communities where
demand was highest.
-- Our energy efficiency programs helped customers save enough
power to supply 90,000 homes for one year, and enough natural
gas to supply 19,000 homes for a year.
-- And we assisted a record-breaking 18.8 million callers to our
customer call centers, nearly a 30 percent increase over the
previous year, and another half-million who called our Smarter
Energy Line for assistance on how to save energy.
This performance helped Pacific Gas and Electric Company to earn
a customer-satisfaction rating of good, very good, or excellent
from nearly 9 out of 10 customers surveyed.
The PG&E National Energy Group also had solid operational
performance in 2001, and that unit's accomplishments included:
-- Securing stand-alone investment-grade credit ratings for the
PG&E NEG and its energy trading business, ratings which were
reaffirmed after the utility's Chapter 11 filing.
-- We completed several substantial financings providing capital
to invest in generating and pipeline assets and liquidity to
support our energy trading activities.
-- We started commercial operations in June at the 526-MW Attala
power plant in Mississippi, and we began operations at the final
unit of our peaker project in Ohio.
-- We launched construction at several 1,000-MW plants,
including the Harquahala plant in Arizona, the Athens plant in
New York, and the Covert generating project in southwest
Michigan.
-- We also began construction on the 111-MW Plains End facility
in Colorado and we acquired the 66-MW Mountain View wind-
generating facility in Southern California.
-- We began operation of 21 miles of new natural gas pipeline in
the fall as part of our Northwest mainline expansion project,
which will increase capacity on the system by about 10 percent.
We're poised to begin construction on our North Baja pipeline
project in Southern California.
At the end of 2001, the PG&E National Energy Group had 7,100 MW
from plants in operation and a slightly larger amount from
plants under construction.
2001 also saw our team deliver solid safety and environmental
performance.
Across the company, the number of safety-related incidents is
down from the prior year for OSHA recordables and for lost-
workdays. No matter how good our safety record is, we believe
there is room to do better, and we're committed to that goal.
On the environmental front, our portfolio of power plants
continues to operate with emissions rates that are lower than
the national average. We also continue to deliver positive
results from our programs focused on pollution prevention, waste
reduction, energy efficiency, environmental education -- and
more.
Chapter 11 Update
Let's move now to Pacific Gas and Electric Company's Chapter 11
proceeding.
Our utility operated in Chapter 11 for three quarters of last
year. During that time, some things changed and some things
stayed the same.
One important thing that stayed the same is that 13+ million
Californians continued to depend on our delivery of gas,
electricity, and customer service, and we continued to deliver
for them.
And one important thing that changed is that our utility was
finally permitted to charge electric rates that are at a level
sufficient to cover its costs.
The result is that we're paying all of our current bills for
current services in full, and we're earning a profit -- which is
why we're able to report the strong financial results we just
described a few minutes ago even though our utility is in
Chapter 11.
What remains to be resolved are the very large unpaid bills
dating from the period before our Chapter 11 filing. A major
item for us in 2002 is the resolution of these debts, and our
Plan of Reorganization is designed to do just that.
It pays all valid claims in full. It requires no increase in
customer rates and no bailout from the state. And it allows us
to reaffirm the financial health of our business.
You'll hear from some that our plan will raise rates. Don't
believe them. They're not telling the truth. Our plan is public
and it is detailed. Our plan does not raise rates.
The plan itself is remarkably simple.
Our plan will pay creditors with a combination of cash on hand,
cash proceeds from new financing of our restructured business,
and in some cases new debt.
Our plan to restructure the business and separate our company
was not the starting point for our plan, but the result of it.
When we designed the plan, we had three constraints:
-- We needed to have enough to pay all valid claims in full.
-- We needed to have an investment-grade credit rating upon
emerging from bankruptcy.
-- And we did not want to request a rate increase, or ask the
state for a bailout.
Within those constraints, we triangulated to the plan we have.
Our plan separates the present company into two stand-alone
independent publicly traded companies with the virtue of
simplicity. The retail business will be under the retail
regulator in one, and the wholesale business will be under the
wholesale regulator in the other.
The reason we're seeking this clear alignment and separation is
very straightforward: within this framework the financial
markets will provide much more financing than otherwise. And it
is this increased financing that will get our creditors paid.
The vast majority of the response to our plan has been positive
and supportive.
First off, it has the support of the Official Creditors'
Committee. It also has the support of a group of our largest
creditors, who own about $2 billion of our securities. And it
has the support of IBEW Local 1245, our biggest labor union, as
well as many business and civic groups in the state.
One objection to our plan claims that we are fleeing from
regulation.
Nothing could be further from the truth, and here are the facts.
Regarding the totality of today's Pacific Gas and Electric
Company:
All of its current business elements will continue to be
regulated.
Most of the assets will continue to be regulated by the same
regulator who regulates them today.
And the vast majority of the assets will continue to be
regulated by the California Public Utilities Commission (CPUC).
The distribution of gas and electricity will continue to be
regulated by the CPUC. This business represents about 70
percent of the book value of the company's assets, and will
contain about 16,000 employees.
The transmission of electricity -- moving power over longer
distances at higher voltages -- is already federally regulated
as to prices, terms, and conditions, and this will continue.
Oversight of some siting issues will stay with the CPUC, just as
it is today.
Hydropower is mostly federally regulated, and the licenses for
these projects are federal licenses, and this will continue.
The generation of nuclear power has many aspects federally
regulated, and the licenses for Diablo Canyon are federal
licenses, and this will continue.
The transmission of natural gas in virtually every other state
is federally regulated, the competitors to our pipelines are
federally regulated, and after our plan is implemented, our
pipeline will be federally regulated.
As part of our plan, we're seeking all the necessary approvals
from the Federal Energy Regulatory Commission, the Securities
and Exchange Commission, and the Nuclear Regulatory Commission.
Those assets that will be transferred out of Pacific Gas and
Electric Company will also continue to be regulated by the
Department of Transportation, both the state and federal
Environmental Protection Agencies, as well as numerous other
agencies.
The Bankruptcy Court has also allowed the California Public
Utilities Commission to present an alternative plan of
reorganization to our creditors. We believe the Commission's
approach is fatally flawed.
Their plan is infeasible, impractical, and unlawful.
It's not feasible because it won't restore the utility's
investment-grade credit rating. In fact, it doesn't address any
of the Commission's own regulatory failures that led to credit
downgrades for both of California's big utilities in the first
place.
The CPUC says their plan provides for investment-grade credit
ratings. Don't believe them. That's what they said about their
plan to rescue the large utility in Southern California -- and
they were wrong.
Their credit quality is still at junk-bond levels, and the debt
they recently issued was junk-bond debt.
The Commission's plan is not practical, because the billions of
dollars of new debt in their plan would probably be junk bonds
too.
And it's not unlawful because it would force us to sell $1.7
billion of new common stock in Pacific Gas and Electric Company,
diluting the value of your investment.
There is a deliberate attempt to force our shareholders to pay
California's back power bills.
It asks the bankruptcy judge to violate your rights to be
treated fairly in bankruptcy.
Also, many of our shareholders are PG&E employees and retirees
who have worked hard to provide safe, reliable electric and gas
service. This plan would do substantial harm to the hard earned
retirement savings in their 401(k) accounts.
This company won't let that happen.
We will vigorously assert the rights of shareholders, including
our employees and retirees in bankruptcy court.
And I am confident that in that venue, our plan will be
approved.
Our schedule calls for completion of the reorganization by the
end of 2002.
This is an ambitious timetable, but we believe it's achievable.
When we complete our reorganization, we will have two solid,
financially healthy companies -- PG&E Corporation, which will
change its name, and Pacific Gas and Electric Company. Each
will be investment-grade on the first day and will have the
financial capability to grow and deliver for shareholders and
customers alike.
Our thousands of creditors, many in California, will have all
valid claims paid in full, with interest.
Our customers will have no increase in rates to implement the
plan, and they will have an investment-grade utility company
providing more stability in the state's energy infrastructure.
And the state will have:
-- No need to provide a bailout.
-- A continuing role in overseeing the distribution of gas and
electricity, including retail rates.
-- A path to exit the business of buying energy for Pacific
Gas and Electric's customers -- which in turn means that the
state can resume its focus on issues such as education and
infrastructure.
-- And the knowledge that the energy assets central to the
state's infrastructure continue to be operated in a manner that
places high priority on environmental stewardship.
The Governor has said it's in California's interest to have
healthy utility companies as part of the fabric of the state's
economy contributing to the state's infrastructure. We couldn't
agree more. And our plan will do that.
2002 Focus
Gaining approval for and implementing our Plan of Reorganization
is one of our management's top objectives for 2002. Others are:
-- Strengthening the balance sheet and our credit ratings in
the PG&E NEG.
-- Using our capital prudently in the PG&E NEG.
-- Continuing to provide safe, reliable, and responsive
service to our customers, and to improve our safety performance.
-- And delivering solid income from operations.
We know your investment in our company is made with the
expectation of a growing total return. I can speak for our
entire team in assuring you that we all share a commitment to
deliver this to you.
Close
2002 is a transition year that includes carrying out Pacific Gas
and Electric Company's Plan of Reorganization and competing in a
changing, volatile market for the PG&E National Energy Group.
Our team's operational performance in 2001 gives us a solid
basis on which to manage these challenges.
We have continued solid operations. We have strong earnings.
We have an understandable path and destination for the future of
our company. And we have a team that is more than up to the
job, having proven last year it can run the business and deliver
results under extraordinary conditions.
To close these comments today, we should all recognize some
members of that team. In light of current world events, some
men and women from our company are called to active duty by the
U.S. armed forces reserves and the National Guard. We're very
proud of their contributions, and on behalf of the company, I
want to thank them for their service.
Thank you.
PENTASTAR COMMS: Ceases Operations; Company Officers Resign
-----------------------------------------------------------
PentaStar Communications, Inc. announced that its secured
lender, Wells Fargo Bank West, National Association, initiated,
and the court approved, the appointment of a receiver to collect
all collateral securing Wells Fargo's loan. As a result,
PentaStar has ceased operations and all officers and directors
of the Company have resigned.
NASDAQ has notified PentaStar that it will be delisted from the
NASDAQ Exchange for failing to file its Form 10K Annual Report
For Fiscal Year Ended 2001 and PentaStar has withdrawn its S-3
and S-8 Registration Statements.
PentaStar designs, procures and facilitates the installation and
use of communications services solutions that best meet
customers' specific requirements and budgets. PentaStar was
formed in March 1999 to become a national communications
services agent and specializes in being the single source
provider of total communications solutions for its business
customers. PentaStar's common stock is traded on the Nasdaq
National Market under the ticker symbol PNTA.
PHASE2MEDIA: Exclusive Plan Period Extended to April 30
-------------------------------------------------------
Phase2Media, Inc. obtained approval from the U.S. Bankruptcy
Court for the Southern District of New York to extend their
exclusive periods. The Court orders that the exclusive time for
the Debtor to file a plan of reorganization is extended through
April 30, 2002 and the exclusive period to solicit acceptances
of that plan runs through June 28, 2002.
Phase2Media, Inc., an online advertising, sales and marketing
company, filed for Chapter 11 protection on July 18, 2001.
Harold D. Jones, Esq., at Gersten Savage & Kaplowitz, represents
the Debtors in their restructuring effort. When the Company
filed for protection from its creditors, it listed $18,057,000
in assets and $19,672,000 in debts.
RISCOMP INDUSTRIES: Case Summary & Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: RisComp Industries, Inc.
aka RJ Associates
aka RisComp Aviation Services
aka CBM Aviation Services
aka CBM Industries, Inc.
2905 Northwest Boulevard, Suite 30
Plymouth, Minnesota 55441
Bankruptcy Case No.: 02-81008
Chapter 11 Petition Date: April 11, 2002
Court: District of Minnesota
Judge: Nancy D. Dreher
Debtors' Counsel: William I. Kampf, Esq.
Kampf & Associates, P.A.
901 Foshay Tower
821 Marquette Avenue
Minneapolis, Minnesota 55402
612-339-0522
Total Assets: $1,339,325
Total Debts: $2,757,125
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
RJ Associates Employee $824,979
Benefit Plan and Trust
2905 Northwest Blvd,
Suite 30
Plymouth Minnesota 55441
Wells Fargo $220,000
Wausau Insurance $152,522
Delta Dental Plan of Minnesota $128,135
IRS $81,500
The Hays Group $61,091
Minnesota Dept Labor Industry $53,564
Corporate Benefit Service $44,941
Sun Life Financial $39,838
WCRA $39,716
Liberty Limited Property $27,903
Ceridian Performance $19,509
Berkeley Risk Admin $13,586
Froehling Anderson $7,625
Waxie Sanitary Supply $7,618
Natl Assoc of Professional Emp $6,350
F.R. Radach & Assoc $4,854
MSP Communications $3,000
Agiliti Inc $2,948
Watson Wyatt & Co $2,933
QUESTRON TECHNOLOGY: GE Supply Wins Bid For All Assets
------------------------------------------------------
Questron Technology, Inc. (OTCBB:QUSTQ) announced that GE
Supply, a business unit of General Electric Company (NYSE:GE),
has won the bankruptcy court auction for the purchase of
substantially all of the assets of Questron and its
subsidiaries. Questron determined that the bid by GE Supply of
$89.2 million in cash and deferred payments constituted the
highest and best offer, and this determination was approved by
the United States Bankruptcy Court for the District of Delaware.
The completion of the sale is subject to certain customary
closing conditions, including the expiration of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act.
The sale is expected to close on or about May 5, 2002.
Under the agreement entered into between Questron, its
subsidiaries and GE Supply, GE Supply will pay $86.7 million in
cash on closing, will assume obligations under certain of
Questron's leases, customer contracts and other agreements and
in addition will fund up to $500,000 for administrative expenses
of Questron's bankruptcy proceedings following the closing of
the sale. GE Supply has agreed that it will offer employment to
all Questron employees and provide them with comparable benefits
to those provided by Questron. GE Supply will not assume any
other Questron liabilities.
In addition to the amount to be paid at closing, GE Supply has
agreed to make certain additional payments, dependent in part
upon the operating results of the acquired business following
the closing. Such payments may equal up to $2 million in the
aggregate, with $666,667 of this amount guaranteed to be paid
regardless of the results of the acquired business.
Dominic A. Polimeni, Questron's Chairman and Chief Executive
Officer, stated that "We view this sale as a very favorable
development for Questron, its customers, suppliers and
employees. We look forward to working with GE Supply."
The proceeds of the sale will be used to pay liabilities and
discharge claims in accordance with the provisions of the
Bankruptcy Code, including the payment of a $2.5 million fee to
QTI Acquisition Corp. in order to terminate their previously
announced assets sale agreement with Questron and its
subsidiaries.
The purchase price payable by GE Supply will be insufficient to
cover all of Questron's liabilities, and therefore, Questron's
stockholders will not receive any distribution upon completion
of the bankruptcy proceedings.
Questron and its subsidiaries filed voluntary petitions for
reorganization under Chapter 11 of the Bankruptcy Code on
February 3, 2002 in the United States Bankruptcy Court for the
District of Delaware.
Questron Technology Inc. is a leading provider of supply chain
management solutions and professional inventory logistics
management programs for small parts commonly referred to as "C"
inventory items (fasteners and related products) focused on the
needs of Original Equipment Manufacturers (OEMs).
More information about the company can be found in its filing
with the Securities and Exchange commission or by visiting
http://www.questrontechnology.com
SAFETY-KLEEN: Waste Management's CWMI Unit Shows-Up in Court
------------------------------------------------------------
At a hearing convened in Wilmington Tuesday afternoon:
* Gregory J. St. Clair, Esq., at Skadden, Arps, Slate,
Meagher & Flom, representing Safety-Kleen Corp. and
its debtor-affiliates;
* Robert Krakow, Esq., at Gibson, Dunn & Crutcher,
representing PricewaterhouseCoopers;
* lawyers from Williams & Connolly LLP, hired by
Safety-Kleen to represent it in shareholder and
derivative lawsuits and in connection with SEC
investigatory matters;
* Jeffrey C. Wisler, Esq., at Connolly Bove Lodge & Hutz
LLP, defending Safety-Kleen's interests in a lawsuit
captioned Toronto Dominion (Texas), Inc., et al. v.
PricewaterhouseCoopers LLP, filed on May 25, 2001, in
the Georgia State Court of Fulton County; and
* Susheel Kirpalani, Esq., at Milbank, Tweed, Hadley &
McCloy LLP, representing the Official Committee of
Unsecured Creditors appointed in Safety-Kleen's
chapter 11 cases;
for a scheduled and relatively uneventful hearing to debate the
appropriate level of Safety-Kleen's involvement in the Georgia
lawsuit, the applicability of the automatic stay, and other run-
of-the-mill bankruptcy-related topics when a debtor is sued
outside of the bankruptcy court.
But one unexpected lawyer appeared at the hearing:
* Laurie Selber Silverstein, Esq., at Potter Anderson
& Corroon, representing an entity known as
Chemical Waste Management, Inc. --
not to talk about the PwC litigation going on in Georgia, but in
connection with a Secret Motion Judge Walsh authorized
Safety-Kleen to file under seal earlier this week.
The Secret Motion, Mr. St. Clair told Judge Walsh when he asked
for permission to file it, "contains highly sensitive and
confidential information." In fact, Mr. St. Clair indicated,
the Secret Motion is so secret that neither the general nature
of the underlying request nor what harm its disclosure might
bring could be disclosed publicly.
Judge Walsh approved the filing of the Secret Motion under seal,
keeping it under wraps and out of public view. Judge Walsh
directed that access to the Secret Motion, its contents and all
exhibits, if any, be limited to (i) the Court, (ii) the U.S.
Trustee, (iii) counsel to the Creditors' Committee and (iv)
counsel to the Secured Lenders under the terms of strict
confidentiality agreements already in place. Judge Walsh
scheduled an emergency hearing on the Secret Motion for Tuesday,
April 17, 2002 -- in a closed and sealed courtroom. Bankruptcy
Court records indicate that a copy of the Secret Motion was,
though not explicitly permitted under Judge Walsh's Order, also
provided to Scott W. Friestadt, Esq., Assistant Director
Division of Enforcement for the United States Securities and
Exchange Commission in Washington.
A Delaware corporation known as Chemical Waste Management, Inc.,
is a subsidiary of Waste Management, Inc. (NYSE: WMI), North
America's $19-billion leading provider of integrated waste
services. Chemical Waste Management owns and operates hazardous
waste landfills owned by Waste Management, and is a significant
Safety-Kleen competitor in the hazardous waste management
market. CWM currently owns the lion's share of hazardous waste
landfills, but does not have a significant portion of the
hazardous waste treatment business.
Waste Management has scheduled an analyst conference call on
Tuesday, May 7, 2002 from 9:00-10:00 a.m. Central Time to
discuss first quarter 2001 financial results . . . and, perhaps,
announce a Safety-Kleen transaction at that time.
SERVICE MERCHANDISE: Asks to Extend Grubb's Term Until April 30
---------------------------------------------------------------
The Service Merchandise Company, Inc., and its debtor-affiliates
retained Grubb & Ellis/Centennial to assist the Debtors in their
effort to sell the Sales Support Center in 7100 Service
Merchandise Drive, Brentwood, Tennessee. However, the Broker
Agreement of November 25, 2000 has expired with the Brentwood
Property remaining unsold.
The Debtors ask the Court's authority to amend the Broker
Agreement to extend the term of the engagement until April 30,
2002, thereby continuing to employ and retain Grubb.
Furthermore, the Debtors wish to amend certain terms of the
Agreement to:
(a) add the scope of work of Grubb to include the property
in Metrocenter, Nashville, Tennessee;
(b) delete the provision where Grubb agrees to share the
sales commission with The Keen Venture if the bidder
procured by The Keen Venture became the successful bidder
for the Brentwood Property; and
(c) amend the Agreement to state that Grubb is only entitled
to a commission if the Debtors actually enter into a sale
contract for either of the 2 Properties prior to the
expiration of the Broker Agreement.
Since the extension is only until April 30, 2002, the Debtors
further ask Judge Paine to give them the authority to extend the
term of the Broker Agreement in the future without further Court
approval.
Paul G. Jennings, Esq., at Bass, Berry & Sims, PLC, in
Nashville, Tennessee, informs the Court that the property in
Metrocenter is about 566,032 square feet of warehouse space and
31,514 square feet of office space the Debtors wish to dispose.
Pursuant to the Debtors' wind-down of its business, Mr. Jennings
contends that the sale of the two properties efficiently will
maximize the recoveries to creditors.
Mr. Jennings assures the Court that aside from the amendments
requested, the terms and conditions of the Original Broker
Agreement will remain true and correct.
(Service Merchandise Bankruptcy News, Issue No. 30; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
STONERIDGE INC: S&P Rates Proposed $200MM Senior Notes at B
-----------------------------------------------------------
On April 17, 2002, Standard & Poor's assigned its B rating to
Stoneridge Inc.'s proposed $200 million senior unsecured notes
due 2012, issued under Rule 144A.
In addition, Standard & Poor's assigned its BB rating to the
company's new $200 million credit facility, which based on
preliminary terms and conditions, will consist of a $100 million
five-year revolving credit facility and a $100 million six-year
term loan. The facility is rated one notch higher than the
corporate credit rating. The notching on the credit facility
assumes that Stoneridge's new capital structure will include the
proposed $200 million senior unsecured notes. Proceeds from the
debt issue will be used to repay a portion of existing bank
debt.
At the same time, Standard & Poor's affirmed its BB- long-term
corporate credit rating on Stoneridge, a leading independent
automotive supplier.
The ratings on Stoneridge reflect the company's aggressive
financial profile and solid niche positions as a leading
producer of highly engineered electrical and electronic
components; modules; and systems to the automotive, medium- and
heavy-duty truck, agricultural, and off-highway vehicle markets.
Sales for the quarter ended March 31, 2002, were $157.7 million
compared with $156.1 million for the same period in 2001. EBITDA
rose slightly to about $23 million compared with about $20
million in 2001. The improvement in EBITDA was mainly the result
of expanded North American auto production and continued focus
on cost-cutting initiatives by the company.
Credit measures remain aggressive, with total debt to EBITDA of
around 4.2 times (x) and interest coverage of around 2.6x.
Standard & Poor's expects total debt to EBITDA of around 3.5x-
4.0x and interest coverage of around 3.0x over the cycle.
Stoneridge continues to undertake initiatives to improve
operating performance and cash generation, including
implementing lean manufacturing, reducing overhead, and
aggressively managing working capital. Management's initiatives
are expected to improve profitability in the intermediate term.
Financial flexibility is limited; Stoneridge had about $30
million in availability on the company's $100 million revolving
credit facility as of March 31, 2002. The new credit facility is
expected to result in improved liquidity and financial
flexibility.
The facility is secured by substantially all of the company's
assets offering reasonable prospects for recovery. The company's
cash flows were significantly discounted to simulate a default
scenario and capitalized at an EBITDA multiple reflective of the
market. Under this simulated downside case, collateral value is
expected to be sufficient to cover the fully drawn bank facility
if a payment default were to occur.
Outlook
Should operating initiatives fail to offset soft market
conditions and poor profitability, resulting in further
deterioration of credit protection measures, the ratings could
be lowered.
TEMBEC: Sees Higher Net Loss In Second Quarter
----------------------------------------------
Tembec expects to incur a net loss of approximately $0.65 per
share for its second fiscal quarter ending March 30, 2002,
before an unusual charge of $0.46 per share relating to the
early redemption of debt. Several items will negatively impact
the Company's results in the quarter. In late March, the
Department of Commerce issued a final determination on
antidumping duty which expanded the types of products subject to
the duty. As well, the Company undertook a major process change
at the St. Francisville, Louisiana Paper facility which led to
lower operating efficiencies. The cost of this change combined
with the annual mill wide shut down of the facility in March
will negatively impact the Paper Group's earnings. Finally, the
relative strength of the U.S. dollar vis-…-vis the Canadian
dollar and the Euro continues to cause higher foreign exchange
hedging losses for the Company. Compared to the prior quarter,
the aforementioned items will increase the net loss by
approximately $20.5 million or $0.24 per share.
As noted in a press release issued on March 7, 2002, the Company
will also record an unusual charge of $40.0 million or $0.46 per
share relating to the early redemption of its US$250 million
9.875% Senior Notes.
The Company will release its March 2002 quarterly financial
results on Friday, April 26, 2002. The Company will hold a
telephone conference with financial analysts and institutional
investors to discuss these financial results on Monday, April
29, 2002 at 11:00 AM EDT. The conference call will be webcast at
http://www.tembec.comin the "Investor Relations" section.
Afterwards, a recording will also be available on the website.
Tembec is an integrated Canadian forest products company
principally involved in the production of wood products, market
pulp and papers. The Company has sales of approximately $3.5
billion with over 50 manufacturing sites in the Canadian
provinces of New Brunswick, Quebec, Ontario, Manitoba,
Alberta and British Columbia, as well as in France and the
United States. Tembec's Common Shares are listed on the Toronto
Stock Exchange under the symbol TBC. Anyone wishing to receive
Tembec's future press releases can do so by subscribing on line
to Tembec's distribution list at http://www.tembec.com.
US AIRWAYS: Stockholders' Meeting Set For May 15 At Washington
--------------------------------------------------------------
The 2002 annual meeting of stockholders of US Airways Group,
Inc. will be held at the Capital Hilton Hotel, 16th & K Streets,
N.W., Washington, D.C. on May 15, 2002 at 9:30 a.m. local time,
to consider and act on the following matters:
1. The election of 12 directors to hold office for one year
or until their successors are elected and qualified.
2. Ratification of the selection of auditors of the Company
for fiscal year 2002.
3. Consideration of Evelyn Y. Davis' cumulative voting
stockholder proposal.
4. The transaction of such other business as may properly
come before the meeting.
VENTAS INC: Closes Senior Note Offering and New Credit Facility
---------------------------------------------------------------
Ventas, Inc. (NYSE:VTR) has completed an offering of $175
million of 8-3/4% Senior Notes due 2009 and $225 million of 9%
Senior Notes due 2012 issued by its operating partnership,
Ventas Realty, Limited Partnership, and a wholly-owned
subsidiary formed in connection with the offering.
Ventas also announced that Ventas Realty, Limited Partnership
concurrently closed its new $350 million secured credit
facility. The facility consists of a $290 million revolving loan
priced at 275 basis points over LIBOR and a $60 million five-
year term loan priced at 250 basis points over LIBOR. The
revolving credit facility has a three-year term, includes grid
pricing that will allow the Company to achieve reduced interest
expense if it de-levers and contains a $100 million "accordion
feature" that will permit expansion of the facility, all as
provided by the facility credit agreement.
"These transactions represent a great success for Ventas," said
Ventas President and CEO, Debra A. Cafaro. "With excellent long-
term financing in place, we can begin to execute our business
strategy of diversifying our asset base and revenue sources
within the healthcare sector."
Ventas said that it used (1) $620.3 million in net proceeds from
the offering and the new credit facility, plus (2) approximately
$14.3 million cash on hand to repay: (a) all outstanding
indebtedness under the Company's existing credit agreement; (b)
certain closing costs; and c a one-time $13.6 million breakage
fee relating to the termination of $350 million notional
amount of its existing interest rate swap agreement. The
interest rate swap agreement expires in June 2003, fixes LIBOR
at 6 percent, and has a $450 million notional amount after the
partial termination.
The Notes are not registered under the Securities Act of 1933,
as amended (the "Securities Act"), and may not be offered or
sold in the United States absent registration or an applicable
exemption from the Securities Act's registration requirements.
2002 FFO GUIDANCE
These refinancing transactions should be accretive to FFO on an
annualized basis by approximately $0.06 per share. Accordingly,
Ventas said it expects to report normalized FFO of $1.28 to
$1.30 per share for 2002, excluding any gains or losses
(including those associated with the partial termination of
the Company's interest rate swap agreement). The Company may,
from time to time, update its publicly announced FFO guidance,
but it is not obligated to do so.
ASSUMPTIONS
The Company's FFO guidance is based on a number of assumptions,
including, but not limited to, the following: Kindred
Healthcare, Inc. (Ventas's principal tenant) performs its
obligations under the five Amended Master Leases covering 210
nursing homes and 44 hospitals and various other agreements
between the companies; the Company's other tenants perform their
obligations under their leases with the Company; no additional
dispositions of Kindred stock occur; no capital transactions,
acquisitions or divestitures occur; Ventas's tax and accounting
positions do not change; the Company's issued outstanding and
diluted shares do not change; and Ventas does not incur any
impact from Accounting Rule FASB 133 relating to derivatives.
FIRST QUARTER 2002 EARNINGS AND CONFERENCE CALL
Ventas also announced that it will release its first quarter
earnings on May 9, 2002. A conference call to discuss those
earnings will be held that morning at 10:00 a.m. Eastern Time
(9:00 a.m. Central Time.) The call will be webcast live by CCBN
and can be accessed via the Ventas web site at
www.ventasreit.com or www.companyboardroom.com.
Ventas, Inc. is a healthcare real estate investment trust whose
properties include 44 hospitals, 215 nursing facilities and
eight personal care facilities in 36 states.
As of its latest SEC filing at September 30, 2001, Ventas is
insolvent with total liabilities of $1,044,412,000 exceeding
total assets of $962,782,000.
VITECH AMERICA: Knight Securities Has 10.4% Equity Interest
-----------------------------------------------------------
Knight Securities, L.P., broker/dealer located in Jersey City,
New Jersey, beneficially owns 2,134,850 shares of the common
stock of Vitech America Inc., representing 10.4% of the
outstanding common stock of Vitech. Knight Securities has sole
powers over the stock held, both as to voting and disposition
thereof.
WCI COMMUNITIES: S&P Assigns B Rating To $200MM Senior Sub Notes
----------------------------------------------------------------
Standard & Poor's assigned its single-'B' rating to WCI
Communities Inc.'s (WCI) $200 million senior subordinated notes
due 2012. At the same time, the company's double-'B'-minus
corporate credit rating is affirmed. The outlook remains
positive. The proceeds from the offering will be used to repay
short-term, variable-rate bank debt.
The ratings and outlook acknowledge this Florida-based
homebuilder's strong position in select coastal markets, solid
profitability, and recent successful IPO. These strengths are
somewhat tempered by its luxury buyer focus, geographic
concentration, and the secured nature of its bank credit
facility.
Bonita Springs, Fla.-based WCI is a fully integrated
homebuilding company with more than 50 years experience in the
development and operation of leisure-oriented, master-planned
communities. WCI remains a dominant player in select submarkets
on the west coast of Florida. Further, the company's position on
the east coast of Florida should continue to strengthen as it
continues to develop the significant landholdings it purchased
from the MacArthur Foundation in 1999.
While geographically concentrated in Florida, WCI's development
activities are spread among multiple product lines (ranging from
single-family to luxury towers) and various price points (sales
prices ranging from $100,000 to $10 million per unit for an
average of $528,000 per unit). In addition, the company's
ancillary businesses, amenities, and real estate services do
provide some diversity to earnings. Revenues, which totaled $1.1
billion in fiscal 2001, were dominated by single-family and
multifamily homebuilding (44% of total revenues) and mid- and
high-rise homebuilding (37%) that produced a solid combined 31%
gross profit margin, up from an already strong 28% in 2000.
Overall, corporate gross and operating margins of around 31% and
20%, respectively, compare very favorably with peers and should
provide WCI with substantial pricing flexibility to spur sales
should conditions in its markets show signs of softness.
The company's financial profile, while historically aggressive,
has become more moderate. WCI successfully completed its IPO on
March 12 through the issuance of 7,935,000 shares (approximately
$139 million) and used the proceeds to repay debt. As a result,
debt leverage has improved to a more moderate 54% debt-to-book
capitalization from a high 62%. Further, the issuance of $350
million of 10-year senior subordinated notes in 2001 did serve
to reduce variable-rate debt exposure and lengthen debt tenor to
a solid seven years. Coverage measures have also continued to
show improvement, reaching approximately 3.7 times (x) EBITDA
interest coverage and about 2.9x debt-to-EBITDA for year ended
Dec. 31, 2001 (up from a weaker roughly 3.0x and 3.0x,
respectively, one year ago).
Financial flexibility has been enhanced by the successful IPO,
which expanded WCI's investor base, provided additional internal
liquidity (approximately $50 million cash-on-hand), and created
full availability under its $200 million secured bank revolver.
Management has indicated a desire to explore expansion into
other markets where high-rise luxury housing and highly
amenitized community developments have also been successful.
However, Standard & Poor's anticipates that any geographic
expansion outside the state of Florida would be pursued in a
prudent manner.
OUTLOOK: POSITIVE
WCI's attractive land position in several important coastal
areas of south Florida likely creates some meaningful barriers
to entry and enhances the company's competitive position. The
company has also transitioned its capital structure to a lower
risk profile, with less overall leverage, improved credit
statistics, and less reliance on short-term bank financing.
Future ratings improvement will depend upon WCI's ability to
sustain its strong profitability and recently improved debt
protection measures, while adhering to sound inventory
management and management's stated capitalization plan.
WASTE SYSTEMS: Court Stretches Lease Decision Period to July 5
--------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, Waste Systems International, Inc.'s the lease decision
period is enlarged. After due deliberation, Judge Mary F.
Walrath stamps her approval to stretch the time period within
which the Debtors must elect to assume, assume and assign or
reject unexpired leases of nonresidential real property to run
through July 5, 2002.
Waste Systems International, Inc., is an integrated non-
hazardous solid waste management company that provides solid
waste collection, recycling, transfer and disposal services to
commercial, industrial and municipal customers in the Northeast
and Mid-Atlantic Unites States. The Company filed for chapter 11
protection on January 11, 2001 in the U.S. Bankruptcy Court
District of Delaware. Victoria Watson Counihan, Esq., at
Greenberg Traurig LLP represents the Debtors in their
restructuring effort.
WACKENHUT CORP: Reports Losses Related To Chilean Operations
------------------------------------------------------------
The Wackenhut Corporation (NYSE: WAK WAKB) has been advised by
the management of the Chilean operations that their financial
and operating conditions have deteriorated to the point where
they are no longer able to generate sufficient cash, either from
ongoing operations or the sale of assets, to repay their
obligations. Consequently, the Chilean company has filed for
bankruptcy.
The Wackenhut Corporation's pre-tax write-off due to the Chilean
company's filing for bankruptcy is estimated to be between $14
million and $17 million pre-tax for the first quarter, 2002.
This includes the write-off of all remaining cash advances,
notes receivables and estimated related expenses. Previous
losses recognized during fiscal year 2001 related to the Chilean
operations totaled $29.2 million pre-tax.
Richard R. Wackenhut, vice chairman, president and chief
executive officer of The Wackenhut Corporation, said, "We have
made every reasonable attempt to stabilize the Chilean
operations over the past 18 months. The bankruptcy of the
Chilean business is a significant disappointment to us since we
committed substantial financial and other resources to assist
the Chilean partners with a reorganization of the business. We
attempted to assist with resolving the situation because we felt
a need to support the customers and employees of the Chilean
operations. Unfortunately, our efforts could not resolve the
problems that led to the company's demise. However, The
Wackenhut Corporation is pursuing all of its available remedies
to recover losses incurred."
The Wackenhut Corporation (www.wackenhut.com) is a leading
international provider of business services to major
corporations, government agencies, and a wide range of
industrial and commercial customers. Its principal business
lines include security-related services correctional services,
and flexible staffing services. The Company is a leader in the
privatization of public services for municipal, state and
federal agencies, and has operations throughout the United
States and in over 50 other countries on six continents.
The Wackenhut Corporation announced on March 8, 2002 the signing
of a definitive merger agreement with the Danish firm, Group 4
Falck, which is expected to result in Group 4 Falck acquiring
100 percent of The Wackenhut Corporation's common stock. The
merger is now pending regulatory and shareholder approval.
WILLCOX & GIBBS: Asks Court To Extend Exclusive Period to July 2
----------------------------------------------------------------
Willcox & Gibbs, Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to extend their
exclusive period to file a chapter 11 plan through July 2, 2002
and extend their exclusive period to solicit acceptances of the
plan through August 20, 2002.
The Debtors relate to the Court that their time had been
consumed by the sale preparations in connection to their various
asset sales. Since the Petition Date, the Debtors have devoted a
substantial amount of time evaluating their business operations
and exploring the options available in order to emerge from
these chapter 11 cases. The Debtors believe that the requested
extension of the exclusive periods will provide them with the
time needed to properly evaluate their assets and estates,
develop their chapter 11 plan and solicit acceptances of such
plan.
Objection on the motion is due on March 7, 2002 and a hearing is
currently scheduled for March 13, 2002.
Through the operations of six principal business units, Willcox
& Gibbs, Inc.'s business activities consist of the distribution
of certain replacement parts, supplies and ancillary equipment
to the apparel and other sewn products industry. The Company
filed for chapter 11 protection on August 6, 2001. Edwin J.
Harron, Esq. and Brendan Linehan Shannon, Esq. at Young,
Conaway, Stargatt & Taylor represent the Debtors in their
restructuring efforts. When the Company filed for protection
from its creditors, it listed $36,393,000 in assets and
$29,994,000 in debts.
WINSTAR COMMS: Qwest Wants To Terminate Interconnection Pacts
-------------------------------------------------------------
Qwest Corporation asks the Court lift the automatic stay to
allow Qwest to terminate the Interconnection Agreements with
Winstar Communications, Inc., if such agreements have not been
acted upon.
According to Carl N. Kunz III, Esq., at Morris, James, Hitchens
& Williams LLP in Wilmington, Delaware, the Interconnection
Agreements are for the states of Oregon, Arizona, Utah,
Washington, Colorado, Minnesota, Wyoming and New Mexico. The
Interconnection agreements are sanctioned by the
Telecommunications Act of 1996, which requires telephone
companies competing in the same area to enter into contracts to
interconnect their networks, allowing subscribers of one local
telephone service to receive calls from and place calls to
subscribers to a different local telephone service.
Mr. Kunz explains that upon the sale of substantially all of the
Debtors' assets to IDT, the Court granted IDT a 120-day
management period to direct the assumption or rejection of
executory contracts and to obtain the requisite regulatory
approvals. The period is scheduled to expire on April 19, 2002
but up to now, IDT has failed to advise Qwest whether the
Interconnection Agreements will be assumed or rejected. IDT,
however, advised Qwest that despite its indecisiveness on the
assumption of the agreements, it does not intend to pay Qwest a
cure amount in compliance with the Bankruptcy Code Sec. 365.
Qwest is owed $1,586,346 for pre-petition services and
$3,827,528 for post-petition services by the Debtors.
Nothing in the Telecommunications Act, permits IDT to circumvent
the requirements of assuming and assigning the agreements and
avoid paying Qwest its cure claims. Mr. Kunz also fears that
IDT's actuation - in conflict with the Telecommunications Act -
would provide a road map to any party seeking to acquire assets
from a competitive local exchange carrier such as the Debtors'
without paying the cure amounts.
Notwithstanding such apprehensions, Mr. Kunz surmises that since
IDT has stated it will not cure the outstanding amounts owed to
Qwest, and in effect not assume the Interconnection Agreements,
there is no basis to extend the Trustee's time to assume or
reject the agreements. The Debtors' estates, he maintains, no
longer need the Interconnection Agreements and thus should not
be afforded the protections of the automatic stay. To that
effect, the Court should lift the automatic stay to allow Qwest
to immediately terminate the Interconnection Agreements.
(Winstar Bankruptcy News, Issue No. 26; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
ZAP: Disclosure Statement Hearing Scheduled For Today
-----------------------------------------------------
ZAP (Nasdaq:ZAPPQ) submitted a Disclosure Statement and Plan of
Reorganization with the Santa Rosa division of the United States
Bankruptcy Court, Northern District of California.
The Disclosure Statement needs to be approved by the Court prior
to the Plan's submission to the creditors and shareholders for
vote.
The Plan primarily calls for creditors to be issued stock and
warrants in exchange for Debt. Upon the effective date of the
Plan, ZAP will acquire RAP Group, Inc. and Voltage Vehicles.
"We believe that the Plan proposed by ZAP will give all ZAP
stakeholders a chance at recovery as well as a potential
upside," said Voltage Vehicles President Steve Schneider.
"However, we also believe that, with ZAP's limited resources,
the Plan as submitted must be quickly approved by the creditors
and shareholders and confirmed by the Court in order to bring
ZAP's Chapter 11 filing to a successful conclusion."
The Bankruptcy Court is scheduled to hold a hearing on the
disclosure statement on April 19, 2002.
* BOOK REVIEW: The Luckiest Guy in the World
--------------------------------------------
Author: Boone Pickens
Publisher: Beard Books
Paperback: US$34.95
Review by Gail Owens Hoelscher
Buy a copy for yourself and one for a colleague on-line at:
http://amazon.com/exec/obidos/ASIN/1893122832/internetbankrupt
"This is the story of a man who turned a $2,500 investment into
America's largest independent oil company in thirty years and
along the way discovered that something is terribly wrong with
corporate America. Mesa Petroleum is the company, and I'm the
man." Thus begins the autobiography of Boone Pickens, who
prefers to be referred to without his first initial, "T."
Mr. Pickens' autobiography was originally published in 1987, at
the end of the rollercoaster years when he was one of the most
famous (or infamous, depending on your point of view) and most-
feared corporate raiders during a decade known for corporate
raiding. For the 2000 Beard Books edition, Pickens wrote an
additional five chapters about the subsequent, equally
tumultuous, 13 years, during which time he suffered corporate
raiders of his own, recapitalized, and retired, only to see his
beloved company merge with Pioneer. One of his few laments is
being remembered mainly for the high-profile years, rather than
for the company he built from virtually nothing.
Of the takeover attempts, he says:
"I saw undervalued assets in the public marketplace. My game
plan with Gul, Phillips, and Unocal wasn't to take on Big Oil.
Hell, that wasn't my role. My role was to make money for the
stockholders of Mesa. I just saw that Big Oil's management had
done a lousy job for their stockholders."
He would prefer to be known as a champion of the shareholder
rights movement, which prompted big corporations to become more
responsive to the needs and demands of their stockholders. He
founded the United Shareholders Association, a group that
successfully lobbied for changes in corporate governance. In a
memorable interview in the May/June 1986 Harvard Business
Review, Pickens said, "Cheif executives, who themselves own few
shares of their companies, have no more feeling for the average
stockholder than they do for baboons in Africa."
Boone Pickens was born in 1928 in Holdenville, Oklahoma. His
grandfather was Methodist missionary to the Indians there; his
father was a lawyer and small player in the oil business.
People in Holdenville worked hard and used such expressions as
"Root hog or die," meaning "Get in and compete or fail."
The family later moved to Amarillo, Texas, where Pickens went to
Texas A&M for one year, but graduated from Oklahoma State
University in 1951 with a degree in geology. He worked at
Phillips Petroleum for three years, and then, despite growing
family obligations, struck out on his own. His wife's uncle
told him, "Boone, you don't have a chance. You don't know
anything."
This book is a wonderful read. Pickens pulls no punches, and is
as hard on himself as anyone else. He talks about proxy fights,
Texas-Oklahoma football games, his three marriages, poker,
takeover strategies, and unfair duck hunting practices, all in
the same easy tone. You feel like he's sitting right there in
the room with you.
Pickens ends the introduction to this story with this:
"How I got from a little town in Eastern Oklahoma to the towers
of Wall Street is an exciting, unlikely, sometimes painful
story. And, if you're young and restless, I'm hoping you'll
make a journey similar to mine."
Root hog or die!
*********
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.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without
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contained herein is obtained from sources believed to be
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*** End of Transmission ***