/raid1/www/Hosts/bankrupt/TCR_Public/020422.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, April 22, 2002, Vol. 6, No. 78
Headlines
AGRIFOS FERTILIZER: Seeks to Stretch Exclusive Period to May 13
AIR CANADA: Airline Compensation Program Claim Reduced to $60MM
ALLIED HOLDINGS: Holding Annual Shareholders' Meeting on May 22
AMC ENT.: Re-Branding Newly-Owned GC Companies As AMC Theatres
ANC RENTAL: Names Travis Tanner As Sr. VP for Sales & Marketing
APPLIED DIGITAL: May Liquidate MAS Shares If Unable To Pay IBM
APPLIEDTHEORY: Case Summary & 20 Largest Unsecured Creditors
APPLIEDTHEORY: FASTNET Submits Offer to Purchase Network Assets
BORDEN CHEMICALS: Completes Sale of Illiopolis Plant to Formosa
BROADWING INC.: Legg Mason Discloses 10.01% Equity Stake
BURLINGTON INDUSTRIES: Wants To Hire Yantek as Lease Consultant
COMDIAL: Sets Annual Shareholders' Meeting on May 17 in Florida
COMDISCO: Promises to File its Plan by April 30
COMDISCO: Court Gives Go Ahead For Sale of IT, Healthcare Assets
CONSECO INC.: Issues Final Results Of Bond Exchange Offer
COVANTA ENERGY: US Trustee Appoints Unsec. Creditors' Committee
DIGITAL TELEPORT: Set To Emerge From Bankruptcy Before Year-End
DLJ MORTGAGE: S&P Assigns D Rating on 1997-CF1 Class B-3 Certs.
DOBSON COMMS: Reports Q1 Postpaid Subscriber Additions of 81,800
ENRON: Court OKs Kaye Scholer's Retention As Examiner's Counsel
EPICOR SOFTWARE: Shareholders To Meet On May 14 In Irvine, CA
E-SYNC: CRC Withdraws Notice of Default And Demand for Payment
EXIDE TECHNOLOGIES: Engages Kirklad & Ellis as Lead Counsel
GRAPES COMMUNICATIONS: Files Pre-Packaged Chapter 11 Plan in NY
GRAPES COMMS.: Case Summary & 20 Largest Unsecured Creditors
HMG WORLDWIDE: Secures Exclusive Period Extension to June 19
ITC DELTACOM: Negotiating With Sr. Lenders To Restructure Debt
IT GROUP: The Shaw Group Wins Bid for Substantially All Assets
INTEGRATED HEALTH: Sells APS Interests To Bioservices for $12MM
JUNIPER CBO: Fitch Puts CC Rated Class B-2 Notes on Watch Neg.
JWS CBO: Fitch Places BB- Rated Class D Notes On Watch Negative
JOBS.COM: TMP Worldwide Acquires Rights To URL and Trademark
KAISER ALUMINUM: Five Retirees Seek Recognition Under Sec. 1114
KMART: FL Labor Department Wants Court to Lift Automatic Stay
KOMAG INC: Debtor Reports Improved Financial Results for Q1 2002
LINDSEY MORDEN: S&P Withholds Ratings After Q1 Loss Announcement
NMHG HOLDING: S&P Rates Proposed $250M Sr. Unsecured Notes At B+
NATIONSRENT INC.: FINOVA Moves for Adequate Protection Package
NETWORK COMMERCE: Taps Moss Adams to Replace Andersen as Auditor
NEW ENERGY TRADING COMPANY: Voluntary Chapter 11 Case Summary
NEW ORLEANS AIRPORT MOTEL: Voluntary Chapter 11 Case Summary
ORA ELECTRONICS: Seeks Bankruptcy Protection in San Fernando, CA
ORA ELECTRONICS INC: Voluntary Chapter 11 Case Summary
OUTSOURCING SERVICES: S&P Affirms B Rating, Outlook Is Negative
PACIFICARE: Lenders Agree to Extend Credit Maturity Date To 2005
PACIFIC GAS: Gets Court Approval To Assume 4 Siemens Contracts
POLAROID CORP: Obtains Okay To Continue Employee Severance Plan
POLAROID: Signs Definitive Agreement with One Equity Partners
PROVIDIAN FINANCIAL: March Net Credit Loss Rate Pegged at 17.64%
RADA ELECTRONIC: Fails To Comply With Nasdaq's Listing Standards
ROMARCO MINERALS: Acquires 2.3 Mil Share Interest in Pocketop
SAFETY-KLEEN CORP.: Outsourcing DP & Accounts Payable to EDS
SOFTLOCK.COM: Files Chapter 11 Petition in Massachusetts
SOFTLOCK.COM INC: Case Summary & 20 Largest Unsecured Creditors
SUMMIT CBO I: S&P Places BB- Class B Notes Rating on Watch Neg.
SUPERVALU INC: Sets Shareholders' Meeting on May 30 at Missouri
US AIRWAYS: Records $269 Million First Quarter Net Loss
VANTAGEMED: Seeks Review Of Nasdaq Delisting Determination
VECTOUR: Court Okays Golden Touch Sale to Non-Debtor Affiliate
VIZACOM INC: Reports $3.6MM Working Capital Deficit at Year-End
WASTE SYSTEMS: Secures OK to Stretch Plan Exclusivity to July 31
WESTERN RESOURCES: Fitch Downgrades Ratings To Low-B Levels
WESTPOINT STEVENS: $773MM Balance Sheet Insolvency at Mar. 31
WINSTAR: Wants Money.net to Pay $1.08 Mil for Services Rendered
XEROX: S&P Puts Low-B Ratings on Watch Over Renegotiation Deal
BOND PRICING: For the Week of April 22 - 26, 2002
*********
AGRIFOS FERTILIZER: Seeks to Stretch Exclusive Period to May 13
---------------------------------------------------------------
Agrifos Fertilizer LP and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of Texas for a fifth
extension of their exclusive periods. The Debtors want their
exclusive period to file a plan of reorganization extended
through May 13, 2002 and their exclusive period to obtain
acceptances of that plan to run through July 11, 2002. A
hearing is currently scheduled on April 29, 2002.
The Debtors relate that they have been in negotiations with
their Creditors' Committee regarding the treatment of the
various classes in the Debtors' proposed plans. The Debtors
expect that the requested extension would afford them the time
they need to agree and amend the plans at the Committee's
request.
The Debtors believe that the extension will preserve vendor
confidence and encourage vendors to continue doing business with
Agrifos on favorable terms. The Debtors further add that
termination of their exclusivity at this point will definitely
harm the on-going discussions with multiple parties regarding
possible acquisition or investment on the their business.
Agrifos Fertilizer LP together with affiliates, are producers of
phosphate fertilizers that operate a 600,000 thousand ton per
year phosphate fertilizer processing plant in Pasadena, Texas
and a 1.2 million ton per year phosphate rock mine located in
Nichols, Florida. The Company filed for chapter 11 protection
on May 8, 2002. Christopher Adams, Esq. and H. Rey Stroube,
III, Esq. at Akin, Gump, Strauss, Hauer & Feld, LLP represent
the Debtors in their restructuring efforts.
AIR CANADA: Airline Compensation Program Claim Reduced to $60MM
---------------------------------------------------------------
Air Canada was advised that its claim under the Airline
Compensation Program for losses incurred as a result of the
closure of Canadian airspace in the days following the terrorist
attacks on September 11 has been reduced to approximately $60
million despite initial estimates of approximately $100 million.
The interpretation of the program's criteria by the Auditor
General and Transport Canada excludes lost revenue from ticket
sales during the September 11 to 16, 2001 period for flights
subsequent to September 16.
As a result, Air Canada will take a charge of approximately $37
million against non-operating expense in its First Quarter 2002
results.
Air Canada's operating fundamentals remain as previously
disclosed with an expectation of returning to profitability over
the seasonally stronger quarters.
ALLIED HOLDINGS: Holding Annual Shareholders' Meeting on May 22
---------------------------------------------------------------
The annual meeting of shareholders of Allied Holdings, Inc. will
be held at the Conference Center, Decatur Holiday Inn, 130
Clairemont Avenue, Decatur, Georgia 30030 on May 22, 2002 at
10:00 a.m., local time, for the following purposes:
1. To elect three directors for terms ending in
2005;
2. To amend the Company's amended and Restated
Long Term Incentive Plan (the "LTI Plan") to
increase the number of shares subject to the
LTI Plan by 500,000 shares; and
3. To take action on whatever other business may
properly come before the meeting.
Only holders of record of common stock at the close of business
on March 26, 2002 will be entitled to vote at the meeting.
Allied is the largest North American motor carrier specializing
in the transportation of new and used automobiles and light
trucks. Descendants of founder Guy Rutland Sr. own 31% of
Allied.
As previously reported in the March 5, 2002 issue of the
Troubled Company Reporter, Standard & Poor's on affirmed its 'B'
corporate credit rating on automobile transporter Allied
Holdings Inc., and at the same time, removed the ratings from
CreditWatch. The action reflects Allied Holdings' announcement
that it has refinanced an unrated $230 million revolving credit
facility and $40 million in unrated subordinated debt.
AMC ENT.: Re-Branding Newly-Owned GC Companies As AMC Theatres
--------------------------------------------------------------
As previously reported, as of January 15, 2002 AMC Entertainment
Inc. entered into a definitive stock purchase agreement to
acquire all of the stock of GC Companies, Inc. pursuant to a
plan of reorganization sponsored by AMC. The plan of
reorganization received the requisite approval of each class of
creditors and shareholders whose vote on the plan was required
for approval, and on March 18, 2002 the bankruptcy court entered
its order confirming the modified first amended plan of
reorganization. On March 29, 2002 the plan became effective and
AMC completed its acquisition of GC Companies, Inc.
The purchase price of approximately $167 million (net of $6.5
million from the sale of GC Companies' portfolio of venture
capital investments on the effective date) includes anticipated
cash payments of $71.3 million, $72.9 million of AMC's 9 1/2%
senior subordinated notes due 2011 and $29.3 million of its
common stock, or 2.4 million shares based on a price under the
plan of $12.14 per share (the average closing price per share
for the 15 trading days prior to the effective date of the
plan). AMC used (or will use) available cash from its recent
sales of senior subordinated notes and common stock for the cash
payments under the plan of reorganization. To date, it has
issued $72.9 million of its senior subordinated notes and
386,602 shares of its common stock and paid $47.7 million in
cash to creditors of GC Companies.
The purchase price is based on current estimates of the amount
of "deduction claims" under the plan. The exact purchase price
will not be determinable until all disputed claim amounts are
resolved, which may take 90 days or more after the effective
date of the plan to occur. Under the plan, an increase in the
amount of deduction claims, which are paid in cash, will reduce
the amount of common stock AMC issues to unsecured creditors,
and vice versa. Although the purchase price should not change
materially as a result of the resolution of disputed claims, the
ultimate amount of cash and common stock components may vary
from current estimates. The remaining shares of common stock
issuable to unsecured creditors under the plan, currently
estimated to be approximately 2.0 million shares, are not to be
distributed until 90 days after the effective date.
On the effective date of the plan, GC Companies and its
subsidiaries operated 66 theatres with 621 screens in the United
States, and had a 50 per cent interest in a joint venture that
operates nine theatres with 87 screens in Argentina, six
theatres with 50 screens in Chile, a theatre with 15 screens in
Brazil and a joint venture with an eight-screen theatre in
Uruguay. On the effective date of the plan, all of the operating
domestic theatre subsidiaries of GC Companies were merged into
GC Companies, Inc. and it was renamed AMC-GCT, Inc. Efforts are
underway to re-brand the newly acquired U.S. complexes as AMC
Theatres, and AMC expects the process to be completed by
Memorial Day. AMC has no near-term plans for closing any of the
former GC theatres prior to their lease expiration dates.
Prior to the acquisition, there were no material relationships
between GC Companies and AMC or any of AMC's affiliates, any of
its directors or officers or any of their associates.
AMC is the largest movie exhibitor in the U.S. based on revenue
and the second-largest based on screen count. It has one of the
industry's most modern theater circuits due to its rapid
expansion and consistent disposition activity since 1995. A
charitable trust created after the death of former CEO Stanley
Durwood owns 17% of AMC but controls 66% of the voting power.
AMC is currently not liquid with the September 27, 2001 balance
sheet posting current assets of about $106.3 million and current
liabilities of $199.7 million.
DebtTraders reports that AMC Entertainment Inc.'s 9.500% bonds
due 2009 (AMC1) are quoted between 99.5 and 101. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AMC1for
real-time bond pricing.
ANC RENTAL: Names Travis Tanner As Sr. VP for Sales & Marketing
---------------------------------------------------------------
ANC Rental Corporation, the owner of Alamo Rent A Car and
National Car Rental, announced that Travis Tanner will join ANC
as Senior Vice President, Sales & Marketing.
"The appointment of Travis confirms our strong belief that we
will successfully manage through our current situation and that
our future is bright," said Lawrence Ramaekers, CEO, President
and COO of ANC. "We expect to emerge from bankruptcy as a $3
billion corporation. Travis has the skills and experience to
help us lead that kind of company."
A native of Gulfport, Mississippi, Mr. Tanner launched his
career at Republic Airlines (now Northwest Airlines) in 1972.
After 12 years he left that company for the first of two stints
with Carlson Travel Group. He rose to CEO of Carlson, which he
merged with Wagonlit Travel to form the first truly global
travel company. After 6 years at the helm, Mr. Tanner left
Carlson Wagonlit to form his own company, Grand Expeditions,
Inc. Today GEI is one of the premier upscale tour operators in
North America. Between stints at Carlson Travel, Mr. Tanner
simultaneously held three positions at Walt Disney Attractions:
President of Walt Disney Travel Company, Executive VP of Resorts
and Senior VP of Sales.
"This is a tremendous opportunity for me to join a group of very
bright people, who have a consistent vision of success," said
Tanner. "I look forward to helping build ANC into the leading
car rental company in the world."
ANC Rental Corporation, headquartered in Fort Lauderdale, is one
of the world's largest car rental companies with annual revenue
of approximately $3.2 billion in 2001. Parent company of Alamo
and National, the corporation operates in over 3,000 locations
in 69 countries. Its more than 17,000 associates serve customers
worldwide with an average daily fleet of approximately 271,000
automobiles.
APPLIED DIGITAL: May Liquidate MAS Shares If Unable To Pay IBM
--------------------------------------------------------------
Effective March 27, 2002, Applied Digital Solutions, Inc.,
entered into an Agreement and Plan of Merger with its wholly
owned subsidiary, Digital Angel Corporation, Medical Advisory
Systems, Inc. (MAS) and Digital Angel Acquisition Co., a wholly-
owned subsidiary of Medical Advisory Systems. Prior to this
transaction, Applied Digital Solutions was a 16.6% beneficial
owner of Medical Advisory Systems.
Pursuant to the merger agreement, Applied Digital Solutions
contributed to Medical Advisory Systems its Advanced Wireless
Group, which consisted of 100% of the outstanding common stock
of Digital Angel and Timely Technology Corp. and 85% of the
outstanding common stock of Signature Industries, Limited. On
the effective date of the merger, each share of Digital Angel
common stock owned by Applied Digital was converted into 0.9375
shares of Medical Advisory Systems common stock, or 18,750,000
shares of Medical Advisory Systems common stock.
In satisfaction of a condition to the consent of the merger by
Applied Digital's lender, IBM Credit Corporation, Applied
Digital transferred to a Delaware business trust controlled by
an advisory board all of the Medical Advisory Systems common
stock owned by it and, as a result, the trust has legal title to
approximately 74.45% of the Medical Advisory Systems common
stock, after giving effect to the exercise of options to acquire
shares of Digital Angel Corporation common stock exercised prior
to the merger. The trust has voting rights with respect to the
Medical Advisory Systems common stock until Applied Digital's
obligations to IBM Credit Corporation are paid in full. Applied
Digital has retained beneficial ownership of the shares. The
trust may be obligated to liquidate the shares of Medical
Advisory Systems common stock owned by it for the benefit of IBM
Credit Corporation in the event Applied Digital fails to make
payments to IBM Credit Corporation beginning on February 28,
2003, or otherwise defaults, under the IBM credit agreement.
Such liquidation of the shares of Medical Advisory Systems
common stock will be in accordance with the Securities and
Exchange Commission's rules and regulations governing
affiliates.
Applied Digital Solutions is an advanced digital technology
development company that focuses on a range of early warning
alert, miniaturized power sources and security monitoring
systems combined with the comprehensive data management services
required to support them. Through its Advanced Wireless unit,
the Company specializes in security-related data collection,
value-added data intelligence and complex data delivery systems
for a wide variety of end users including commercial operations,
government agencies and consumers.
Applied Digital, as of September 30, 2001, reported a working
capital deficit of about $59.2 million.
APPLIEDTHEORY: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: AppliedTheory Corporation
1500 Broadway
New York, New York 10036
Bankruptcy Case No.: 02-11868
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
AppliedTheory Colorado Corporation 02-11869
AppliedTheory California Corporation 02-11870
AppliedTheory Seattle Corporation 02-11871
AppliedTheory Virginia Corporation 02-11872
AppliedTheory Austin Corporation 02-11873
AppliedTheory Georgia Corporation 02-11874
Type of Business: The Debtors provide internet service for
business and government, including direct
internet connectivity, internet integration,
web hosting and management service.
Chapter 11 Petition Date: April 17, 2002
Court: Southern District of New York (Manhattan)
Judge: Robert E. Gerber
Debtors' Counsel: Joshua Joseph Angel, Esq.
Leonard H. Gerson, Esq.
Angel & Frankel, P.C.
460 Park Avenue
New York, New York 10022-1906
(212) 752-8000
Fax : (212) 752-8393
Total Assets: $81,866,000
Total Debts: $84,128,000
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Fleet Bank $7,500,000
David Kavney
Clinton Square
Syracuse, New York 13221
(315) 426-4343
Verizon $2,397,096
Mark McQueeney
280 Genesee Street, Floor 1
Utica, New York 13502
(315) 448-2017
U.S. Sprint Communications Co. $1,327,518
Richard Jenks
100 Meridian Centre Blvd.
Suite 220
Rochester, New York 14618
(716) 242-7418
AT&T $506,824
Edmund Beek
65 Wolf Road
Albany, New York 12205
(612) 376-6011
Alta Vista Company $474,000
P.O. Box 7247-8859
Philadelphia, Pennsylvania 19170-8859
Broadwing Communications $246,465
Time Square Studios Ltd. $228,937
Time Warner Telecom $227,357
Mythics, Inc. $171,776
Blue Cross Blue Shield of CNY $138,070
Pacific Bell $114,500
WorldCom/ MFS Telecom, Inc./
Intermedia Communications/ MCIWorldCom $109,134
XO Communications, Inc. $98,890
Benaroya Capital $94,369
Cablevisio n/Light Path $90,321
IBM Corporation $82,137
Grant Thornton, LLP $76,297
Sun Microsystems $67,517
Axis Computer Staffing $57,294
Tobin Associates $55,982
APPLIEDTHEORY: FASTNET Submits Offer to Purchase Network Assets
---------------------------------------------------------------
FASTNET Corporation (Nasdaq: FSST), a leading provider of
comprehensive Internet solutions, including broadband
connectivity, web hosting, colocation, managed services, and
eSolutions, announced the agreement to purchase the Internet
access and network assets of AppliedTheory (Nasdaq: ATHY) as
part of AppliedTheory's voluntary petition for reorganization
under Chapter 11 of the U.S. Bankruptcy code.
The agreement is subject to a number of closing conditions,
including approval by the U.S. Bankruptcy Court of certain
bidding and auction procedures, and the satisfactory results of
FASTNET's due diligence review of the Internet access business
assets of AppliedTheory.
FASTNET Corporation, headquartered in Bethlehem, PA, has
facilities located throughout the Mid-Atlantic Region, providing
high-performance, dedicated and reliable Internet service to
businesses of all sizes. Through private, redundant peering
arrangements with the national IP backbone carriers, the Company
is able to maintain the level of reliability of service that
today's business customer demands, as well as superior and
personalized customer care.
In addition to business class high-speed Internet connectivity,
FASTNET also provides wireless Internet connectivity, security
consulting, virtual private network (VPN) design and
implementation, managed hosting, managed firewall services, web
design and application services, e-commerce site development,
colocation, content streaming, and dial-up Internet access for
residential customers and mobile workers.
The Company's Common shares are listed on the Nasdaq National
Market under the symbol "FSST." For more information on
FASTNET, visit the Company's web site at http://www.fast.netor
call 1-888-321-FAST.
BORDEN CHEMICALS: Completes Sale of Illiopolis Plant to Formosa
---------------------------------------------------------------
Borden Chemicals and Plastics Operating Limited Partnership
(BCP) has completed the sale of the assets and operations of its
polyvinyl chloride (PVC) plant in Illiopolis, Illinois, to
Formosa Plastics Corporation, Delaware. Final terms of the sale
were not disclosed.
"We are pleased to have closed the sale of Illiopolis," said
Mark J. Schneider, president and chief executive officer, BCP
Management, Inc. (BCPM), the general partner of BCP. "We look
forward to a successful conclusion to all the matters pending in
this case."
As a result of the sale, BCP was able to pay off in full its
primary Debtor-In-Possession (DIP) credit facility, which had
been provided by a group of lenders led by Fleet Capital
Corporation. The company maintains sufficient liquidity for
current operations through its Secondary DIP credit facility
provided by BCPM.
BCP and its advisors continue to negotiate with prospective
buyers for the possible sale of the BCP plant in Geismar, La.
BCP expects to have a resolution regarding that facility before
long.
Based in Delaware City, Delaware, Formosa Plastics Corporation,
Delaware, is part of the Dispersion Polyvinyl Chloride business
unit of Formosa Plastics Corporation, U.S.A., a privately held
manufacturer of plastic resins and petrochemicals headquartered
in Livingston, New Jersey. It is part of the Formosa Plastics
Group, a $15-billion global enterprise based in Taiwan with
nearly one-half century of experience in petrochemical
production and processing.
BCP and its subsidiary, BCP Finance Corporation, filed voluntary
petitions for protection under Chapter 11 of the U.S. Bankruptcy
Code in the United States Bankruptcy Court for the District of
Delaware on April 3, 2001. Borden Chemicals and Plastics Limited
Partnership (BCPLP), the limited partner of BCP, was not
included in the Chapter 11 filings. (Borden Chemical, Inc., a
separate and distinct entity, is not related to the filings.)
DebtTraders reports that Borden Chemical & Plastics's 9.500%
bonds due 2005 (BCPU05USR1) trade at 5 to 8.25. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BCPU05USR1
for real-time bond pricing.
BROADWING INC.: Legg Mason Discloses 10.01% Equity Stake
--------------------------------------------------------
Legg Mason, Inc. of Maryland beneficially owns, with shared
voting and dispositive powers 21,895,786 shares of the common
stock of Broadwing Inc. The amount represents 10.01% of the
total outstanding common stock of Broadwing.
Various accounts managed by Legg Mason's investment advisory
subsidiaries have the right to receive or the power to direct
the receipt of dividends from, or the proceeds from the sale of
shares of Broadwing, Inc. No such account owns more than 5% of
the shares outstanding. The identification and classification
of the subsidiaries acquiring the securities are:
Legg Mason Funds Management, Inc., investment adviser
LMM LLC, investment adviser
Bartlett & Co., investment adviser
Bingham Legg Advisers LLC, investment adviser
Legg Mason Capital Management, Inc., investment adviser
Legg Mason Trust, fsb, investment adviser
Legg Mason Wood Walker, Inc., investment adviser
and broker/dealer with discretion
Broadwing Inc. (NYSE:BRW) is an integrated communications
company. Broadwing leads the industry as the world's first
intelligent, all-optical, switched network provider and offers
businesses nationwide a competitive advantage by providing data,
voice and Internet solutions that are flexible, reliable and
innovative on its 18,500-mile optical network and its award-
winning IP backbone.
Broadwing, as of September 30, 2001, reported current assets of
$487.2 million and current liabilities of $848.4 million.
BURLINGTON INDUSTRIES: Wants To Hire Yantek as Lease Consultant
---------------------------------------------------------------
Burlington Industries, Inc., and its debtor-affiliates ask to
retain and employ Yantek Consulting Group Inc. as their
executory contract and unexpired lease consultants in the
Chapter 11 cases.
Specifically, the Debtors need Yantek's assistance in:
(a) designing an executory contract database;
(b) educating operational parties of Burlington;
(c) collecting data;
(d) assuming or rejecting priority contracts;
(e) linking scheduled and claimed items to specific executory
contracts;
(f) reconciling cure payments and sending cure notices;
(g) negotiating settlements with various creditors relating
to executory contracts and leases;
(h) analyzing and re-characterizing lease agreements; and
(i) providing such other and further services as the Debtors
may request in these cases.
John D. Englar, Burlington Industries' Senior Vice President for
Corporate Development and Law, informs the Court that Yantek has
extensive experience with the administration and evaluation of
executory contracts and unexpired leases in bankruptcy and the
negotiation of issues regarding such contracts and leases.
Because of its preliminary work, Mr. Englar notes that Yantek is
also familiar with the general scope and nature of the Debtors'
contracts and leases and related financial systems.
Accordingly, Mr. Englar says, "Yantek has developed relevant
experience and expertise regarding the Debtors that will assist
it in providing effective and efficient services in these
cases".
According to Mr. Englar, the Debtors need Yantek to:
-- determine the appropriate treatment of numerous Contracts
in these cases,
-- minimize claims arising from the assumption and rejection
of certain Contracts, and
-- renegotiate certain of the Contracts on terms favorable to
the Debtors.
In return, Yantek intends to:
(1) charge for its professional services on an hourly basis
in accordance with its ordinary and customary hourly
rates in effect on the date services are rendered, and
Yantek's current hourly rates are: $160 for services
provided by Frank Yantek, and a maximum of $160 for
services provided by all other professionals employed by
Yantek.
(2) seek reimbursement of actual and necessary out-of-pocket
expenses.
Frank Yantek, President of Yantek Consulting Group Inc., assures
the Court that the firm will maintain detailed, contemporaneous
records of time and any actual and necessary expenses incurred
in connection with the rendering of services to the Debtors.
"To the best of my knowledge, information and belief, neither I,
nor Yantek, nor any of its principals, employees, agents or
affiliates, holds nor represents any interest adverse to the
Debtors or their respective estates in the matters for which it
is proposed to be retained," Mr. Yantek asserts. Accordingly,
Mr. Yantek that the firm is a "disinterested person" as defined
in Section 101(14) of the Bankruptcy Code.
If they discover any information that requires disclosure, Mr.
Yantek promises that the firm will promptly file a supplemental
disclosure with the Court.
(Burlington Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
COMDIAL: Sets Annual Shareholders' Meeting on May 17 in Florida
---------------------------------------------------------------
The Annual Meeting of Stockholders of Comdial Corporation, a
Delaware corporation, will be held on May 17, 2002, at 9:00 a.m.
Eastern Daylight Time, at Comdial Corporation, Executive
Conference Center, 106 Cattlemen Road, Sarasota, Florida 34232
for the following purposes:
1. To elect two (2) persons to serve on the Board of
Directors, each for a term of three (3) years;
2. To consider and approve the 2002 Stock Incentive Plan and
to authorize 2,500,000 shares of common stock for issuance
under such plan; and
3. To transact such other business as may properly come
before the meeting or any continuation or adjournment
thereof.
Only stockholders of record at the close of business on April 2,
2002 are entitled to receive notice of and to vote at the Annual
Meeting and any adjournment thereof.
Comdial Corporation, headquartered in Sarasota, Florida,
develops and markets sophisticated communications solutions for
small to mid-sized businesses, government, and other
organizations.
At December 31, 2001, Comdial reported an upside-down balance
sheet, showing a total shareholders' equity deficit of about
$10.3 million.
COMDISCO: Promises to File its Plan by April 30
-----------------------------------------------
Comdisco, Inc.(OTC:CDSO) announced that the U.S. Bankruptcy
Court for the Northern District of Illinois approved the
company's request for an extension of the exclusive periods
during which only Comdisco may file a plan of reorganization and
solicit acceptances for that plan. These periods, which had been
scheduled to expire on April 18, 2002, and June 15, 2002, have
now both been extended to July 31, 2002.
Comdisco requested the extension to continue recent productive
discussions with its Creditors' and Equity Committees to reach a
consensual agreement on the proposed Plan of Reorganization. The
company is still on target to emerge from Chapter 11 in late
summer of 2002, and stated in Court that it intends to file its
Plan of Reorganization no later than the end of April. The
company also said the extension does not change previously
scheduled hearings on its Disclosure Statement on May 31, 2002,
and its Confirmation Hearing on July 30, 2002, but simply
provides more time for discussion among the debtors and its
statutory committees.
COMDISCO: Court Gives Go Ahead For Sale of IT, Healthcare Assets
----------------------------------------------------------------
Comdisco, Inc. (OTC:CDSO) announced that the U.S. Bankruptcy
Court has approved the sale of the company's healthcare leasing
assets to GE Capital's Healthcare Financial Services unit. As
previously announced on April 4, 2002, GE Capital's Healthcare
Financial Services will pay Comdisco approximately $165 million,
including assumption of approximately $45 million in related
secured debt, for the majority of its healthcare portfolio. The
sale is expected to close by May 31, 2002.
The Court also approved the sale of Comdisco's information
technology (IT) leasing assets in Australia and New Zealand to
Allco, an Australian company specializing in equipment and
infrastructure finance and leasing. As previously announced on
April 9, 2002, Allco will pay Comdisco approximately $44 million
for the assets. The sale is expected to close by June 18, 2002.
Comdisco, Inc. and 50 domestic U.S. subsidiaries filed voluntary
petitions for relief under Chapter 11 of the U.S. Bankruptcy
Code in the U.S. Bankruptcy Court for the Northern District of
Illinois on July 16, 2001. The filing allows the company to
provide for an orderly sale of some of its businesses, while
resolving short-term liquidity issues and enabling the company
to reorganize on a sound financial basis to support its
continuing businesses.
Comdisco's operations located outside of the United States were
not included in the Chapter 11 reorganization cases. All of
Comdisco's businesses, including those that filed for Chapter
11, are conducting normal operations.
About Comdisco
Comdisco (www.comdisco.com) provides technology services
worldwide to help its customers maximize technology
functionality and predictability, while freeing them from the
complexity of managing their technology. The Rosemont (IL)
company offers leasing to key vertical industries, including
semiconductor manufacturing and electronic assembly, healthcare,
telecommunications, pharmaceutical, and biotechnology. Through
its Ventures division, Comdisco provides equipment leasing and
other financing and services to venture capital backed
companies.
CONSECO INC.: Issues Final Results Of Bond Exchange Offer
---------------------------------------------------------
Conseco, Inc. (NYSE:CNC) issued the following memo from CEO Gary
C. Wendt on April 18:
To: Conseco Shareholders
From: Gary Wendt, Chairman
Date: April 18, 2002
This is just a short memo to give you the final results of our
bond exchange offer. As you know, the offer pertained to six
separate senior note issues with a combined outstanding
principal amount of $2.54 billion. We extended the offer to the
end-of-business Wednesday, April 17, in order to accommodate
some remaining small positions. Holders of approximately $10
million more bonds took advantage of the exchange offer since
the information we provided over this past weekend.
The final results are that an aggregate of $1,294,637,000 in
principal amount of notes (51% of the total principal amount
outstanding) were tendered by noteholders and accepted by
Conseco in the exchange offer. The results by issue are as
follows:
Originally Tendered
Outstanding for Exchange %age
----------- ------------ ----
8.50% senior notes due 2002 $302,299,000 $ 991,000 --
6.40% senior notes due 2003 250,000,000 14,936,000 6%
8.75% senior notes due 2004 788,000,000 366,294,000 46%
6.80% senior notes due 2005 250,000,000 150,783,000 60%
9.00% senior notes due 2006 550,000,000 399,200,000 73%
10.75% senior notes due 2008 400,000,000 362,433,000 91%
We consider this project to have been highly successful. At no
additional cost for any bond, we have gained important
flexibility to deal with Conseco's debt situation -- the #1
agenda item for our turnaround. In the before and after
comparison below, you can see the "smoothing effect" on debt
maturities that has resulted from the exchange offer.
($ in millions) Before Exchange* After Exchange*
---------------- ---------------
2002 $ 304.1 $ 302.3
2003 313.5 299.6
2004 812.5 461.1
2005 250.0 99.2
2006 550.0 517.1
2007 -- 150.8
2008 400.0 436.8
2009 0.7 363.1
* Includes $87 million outstanding public debt not subject
to exchange offer.
We have scheduled our first quarter earnings release for May 1,
and we look forward to discussing with you then the progress of
business operations as well as other turnaround activities.
COVANTA ENERGY: US Trustee Appoints Unsec. Creditors' Committee
---------------------------------------------------------------
Pursuant to Section 1102(a) and 1102(b) of the Bankruptcy Code,
Carolyn S. Schwatrz, the United States Trustee for Region II,
appoints these unsecured claimants to the Committee of Unsecured
Creditors for the bankruptcy cases of Covanta Energy
Corporation, and its debtor-affiliates:
1. Federal Insurance Company
c/o Chubb & Son
15 Mountain View Road
Warren, NJ 07059
Attn: Richard E. Towle
V.P. and Manager
Tel. No. 908-903-3423
Duane, Morris & Heckscher LLP
380 Lexington Ave.
New York, NY 10168
Attn: Patrick N.Z. Rona, Esq.
Tel. No. 212-692-1035
2. Broad Street Resources
66 Society Street
Charleston, SC 29401
Attn: John J. Kruse
Tel. No. 843-577-0878
3. The General Electric Company
(GE Power Systems Division)
1 River Road
Schenectady, NY 12345
Attn: Anthony Walsh
Paul, Hastings, Janofsky & Walker, LLP
75 E. 55th Street
New York, NY 10022
Attn: Madlyn Gleich Primoff, Esq.
Tel. No. 212-328-6827
4. Pacific Enterprises Energy Management Services
101 Ash Street
San Diego, CA 92101
Attn: Anthony L. Molnar
Togut, Segal & Segal LLP
One Penn Plaza
New York, NY 10019
Attn: Scott E Ratner, Esq.
Tel. No. 212-594-5000
5. Boiler Tube Co. of America
506 Charlotte Highway
Lyman, SC 29365
Attn: John McCauley
Tel. No. 864-439-0220 Ext.1230
Sullivan & Worcester
292 Madison Avenue
New York, NY 10017
Attn: Andrew T. Solomon, Esq.
Tel. No. 212-213-8216
6. CRT Capital Group, LLC
One Fawcett Place
Greenwich, CT 06830
Attn: C Michael Vaughn, Jr.
Tel. No. 203-629-6406
7. Caxton Associates, LLC
667 Madison Avenue
New York, NY 10021
Attn: Brad Tirpak
Tel. No. 212-593-7700
(Covanta Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
DIGITAL TELEPORT: Set To Emerge From Bankruptcy Before Year-End
---------------------------------------------------------------
Digital Teleport Inc., a regional fiber communications provider
for secondary and tertiary markets in the Midwest, announced
record sales for the first quarter of 2002 as the company
remains on track to emerge from Chapter 11 reorganization before
the end of the year.
Digital Teleport says first quarter 2002 bandwidth sales to
communications carriers and enterprise customers were $4.2
million, up 35 percent from $3.1 million during the same period
one year ago. First quarter sales were up 25 percent from $3.4
million in the fourth quarter of 2001, when the company filed
voluntary petitions for Chapter 11 reorganization with the U. S.
Bankruptcy Court for the Eastern District of Missouri.
"Our record sales results are compelling evidence of the growing
demand for bandwidth particularly in underserved secondary and
tertiary markets in the Midwest where we have shifted our
operating focus," said Paul Pierron, president and CEO of
Digital Teleport. "Our results also represent a vote of
confidence from our carrier and enterprise customers who expect
Digital Teleport to successfully emerge from Chapter 11
reorganization before the end of the year."
Digital Teleport's sales for the three-month period ending March
31 include new purchases by the five largest U.S.
telecommunications carriers as well as a number of regional and
local companies.
In addition to posting impressive sales and revenue growth,
Digital Teleport strengthened its position as a premier regional
fiber optic carrier in the Midwest and remained on track to
successfully emerge from Chapter 11 reorganization before the
end of 2002. Significant accomplishments during the first
quarter of 2002 include:
- Completed two additional OC-48 fiber rings spanning more
than 1,000 route miles across Missouri. The expansion
project ensures adequate capacity for meeting carriers'
growing needs.
- Forged an agreement with Kentucky Data Link to interconnect
networks in order to offer each company's customers wider
coverage and a single point of contact for ordering
communications services. Kentucky Data Link, a regional
fiber communications provider in the Southeast, also
purchased fiber in Digital Teleport's 236-mile fiber route
between Memphis and Nashville, Tenn.
- Received Bankruptcy Court approval of various settlements
that released the company from liability under previous
agreements, keeping the company on track to successfully
emerge from Chapter 11 before the end of the year.
Digital Teleport is in productive negotiations with other key
business partners and right-of-way providers to reach settlement
agreements. Once all the key contract relationships are settled,
Digital Teleport will initiate negotiations with its creditors
to determine how the remaining pre-bankruptcy petition
obligations will be satisfied.
Digital Teleport filed voluntary petitions for Chapter 11
reorganization on Dec. 31, 2001. The company plans to exit the
national long-haul business and eliminate non-revenue producing
fiber routes. Digital Teleport will focus on operating its
traditional core fiber optic network that spans an eight-state
region in the Midwest.
Digital Teleport provides wholesale fiberoptic transport
services in secondary and tertiary Midwest markets to national
and regional communications carriers. The company's network
spans 5,700 route miles across Arkansas, Illinois, Iowa, Kansas,
Missouri, Nebraska, Oklahoma and Tennessee. Digital Teleport
also provides Ethernet service to enterprise customers and
government agencies in office buildings in areas adjacent to the
company's metropolitan network rings. The company's Web site is
http://www.digitalteleport.com.Telephone: 1-314-880-1000.
DLJ MORTGAGE: S&P Assigns D Rating on 1997-CF1 Class B-3 Certs.
---------------------------------------------------------------
Standard & Poor's lowered its ratings on classes B-1, B-2, and
B-3 of DLJ Mortgage Acceptance Corp.'s commercial pass-through
certificates series 1997-CF1. Concurrently, the rating on the
class B-2 certificates is removed from CreditWatch with negative
implications, where it was placed on October 9, 2001. At the
same time, all of the other classes in this series are affirmed.
The lowered ratings reflect the realized losses included in the
April 15, 2002 distribution statement and the impact of expected
principal losses relating to the remaining specially serviced
assets. They also reflect cumulative unpaid interest shortfalls
on class B-3 in amount of $205,373, and the possibility of
prolonged interest shortfalls on class B-2 upon further
appraisal reduction amounts and/or upon disposition of the
remaining specially serviced assets.
The affirmations reflect increased credit support and an
improvement in the pool's weighted average debt service coverage
(DSC), since issuance.
Realized principal losses in the amount of $9.9 million were
reflected on the April 15, 2002 distribution date, which relate
to the disposition of five REO properties. In addition to the
principal losses, the trust will realize $575,375 in interest
shortfalls due to over-advancing. The properties secured five
loans, which were formerly part of a cross-collateralized,
cross-defaulted grouping of hotel properties (the Samoth loans)
that were transferred to the special servicer, Lennar Partners
Inc., in October 1998. There were originally 10 loans. Two of
the 10 were previously liquidated with approximate loss
severities, expressed as a percentage of loan balance, of 67%
and 97%, respectively. The remaining three loans have an
aggregate outstanding balance of approximately $5.1 million, and
are in special servicing.
Including the remaining Samoth loans, there are nine specially
serviced assets, comprising $24.3 million, or 6.5%, of the
outstanding balance. Seven of the loans, with an aggregate
balance of $14.8 million, are secured by REO lodging properties.
The total exposure, including advances, related to these loans
is $20.5 million. An appraisal reduction amount (ARA) has been
taken against six of the seven lodging assets, totaling $5.5
million in the aggregate. The remaining specially serviced
assets are secured by a retail/industrial facility, which is
REO, and a retail property, which is performing after a
modification in December 2001. The retail/industrial property is
located in West Carrolton, Ohio, and has been in special
servicing since June 2000. The unpaid balance of the loan is
$4.7 million. An ARA of $4.6 million has been taken against the
asset, and total exposure is $6.3 million. The retail loan is
secured by a vacant Homeplace store, with an aggregate unpaid
principal balance of $4.8 million. The loan has been brought
current subsequent to a modification in December 2001, which
bifurcated the loan into an "A" and "B" component. Both loans
mature in April 2003. Standard & Poor's anticipates significant
losses upon disposition of many of the specially serviced
assets.
There are 106 loans outstanding with an aggregate balance of
$374.0 million, down from 114 loans with an aggregate balance of
$398.1 million at last review (October 2001). GMAC Commercial
Mortgage Corp. (GMAC), the servicer, supplied interim 2001
financial data for 88.5% of the pool. Based on this information,
Standard & Poor's calculated a weighted average DSC of 1.53
times (x), which compares favorably to the weighted average DSC
at closing of 1.34x. The 1.53x figure includes low DSCs from
five of the nine specially serviced assets. Excluding the
specially serviced assets, the DSC increases to 1.60x.
Excluding the specially serviced assets, GMAC's watchlist
contains 28 loans with an aggregate unpaid balance of $108.1
million, or 29% of the outstanding loan pool. The loans appear
for various reasons, including low occupancy and low DSC. Eight
of the loans on the watchlist, which have an aggregate unpaid
balance of $25.9 million, have DSCs that are less than 1.0x.
Standard & Poor's stressed the specially serviced loans,
watchlist loans, and loans with poor operating performance. The
resulting credit enhancement levels adequately supported the
revised and affirmed ratings.
Rating Lowered And Removed From Creditwatch Negative
DLJ Mortgage Acceptance Corp.
Commercial mortgage pass-through certs series 1997-CF1
Rating
Class To From Credit Enhancement
B-2 B BBB-/Watch Neg 9.98%
Ratings Lowered
DLJ Mortgage Acceptance Corp.
Commercial mortgage pass-through certs series 1997-CF1
Rating
Class To From Credit Enhancement
B-1 BBB- BBB 12.98%
B-3 D B- 3.39%
Ratings Affirmed
DLJ Mortgage Acceptance Corp.
Commercial mortgage pass-through certs series 1997-CF1
Class Rating Credit Enhancement
A-1A AAA 35.17%
A-1B AAA 35.17%
A-2 AA 28.56%
A-3 A 20.18%
DOBSON COMMS: Reports Q1 Postpaid Subscriber Additions of 81,800
----------------------------------------------------------------
Dobson Communications Corporation (Nasdaq:DCEL) reported
proportionate gross subscriber additions (postpaid) of
approximately 81,800 for the first quarter of 2002, compared
with 80,800 for the initial three months of 2001.
Postpaid proportionate customer churn was 2.2 percent for the
first quarter ended March 31, 2002, resulting in proportionate
net subscriber additions of 17,200 for the period. Churn for the
first quarter last year was 2.0 percent and the Company added
37,000 proportionate net subscribers.
The percentage of customer disconnects declined during the most
recent quarter throughout its markets, the Company said.
Proportionate churn declined from 2.4 percent in January to 2.3
percent in February, then declined again to 2.1 percent in
March. The average of 2.2 percent proportionate customer churn
for the quarter as a whole was within the range of 2.0-to-2.25
percent proportionate churn that is the Company's guidance for
2002.
During the quarter ended March 31, 2002, the Company also
continued to transition its customer base to digital calling
plans, which generate higher average revenue per unit. As of the
end of the first quarter, 79 percent of the subscribers in
Dobson's proportionate subscriber base were on digital calling
plans, compared with 53 percent a year ago.
Proportionate results reflect Dobson's operations plus its 50%
ownership in American Cellular Corporation through its joint
venture with AT&T Wireless Services, Inc. (NYSE:AWE). Dobson
includes both postpaid and prepaid subscribers in its net
subscriber additions. Gross subscriber additions and churn are
reported on a postpaid basis only.
"Lower churn in March resulted in the Company adding more than
half of our first quarter proportionate net adds in March," said
Everett Dobson, chairman and chief executive officer.
The Company attributed the first quarter levels of churn
primarily to the negative effect of continued economic softness
on consumer buying and contract renewal patterns in Dobson's
primarily rural markets and to an extraordinarily high number of
gross subscriber additions in December 2000, which resulted in a
large number of customers coming off 12-month contracts in
January 2002.
The totals above give effect to the sale of five properties to
Verizon Wireless (NYSE:VZ) by Dobson Communications and American
Cellular during the first quarter ended March 31, 2002.
Consequently, all comparisons exclude the results of the five
sold properties both in 2001 and 2002.
2002 Annual Meeting of Stockholders
In addition, Dobson announced that its 2002 Annual Meeting of
Stockholders will be held on Tuesday, June 4, 2002, beginning at
9 a.m. CT. The stockholders' meeting will be held at the
Company's headquarters at 14201 Wireless Way, Oklahoma City,
73134 -- which is located northeast of the intersection of West
Memorial Road and North Portland Avenue. The shareholder record
date for the annual meeting will be April 19, 2002.
Dobson Communications is a leading provider of wireless phone
services to rural markets in the United States. Headquartered in
Oklahoma City, the rapidly growing Company owns or manages
wireless operations in 19 states. For additional information on
the Company and its operations, visit the company's Web site at
http://www.dobson.net.
On April 5, 2002, Standard & Poor's affirmed its 'B+' long-term
corporate credit rating on Dobson Communications Corp. and its
senior secured bank loan rating on the company's unit, Dobson
Operating Co. LLC, following the favorable resolution of the
Dobson family loan with Bank of America. The ratings were
removed from CreditWatch, where they were placed March 6, 2002.
Outlook is stable.
ENRON: Court OKs Kaye Scholer's Retention As Examiner's Counsel
---------------------------------------------------------------
Harrison J. Goldin, the Court-appointed Examiner of Enron North
America, asks and obtains approval to retain the law firm of
Kaye Scholer as its counsel, nunc pro tunc to March 12, 2002.
According to Mr. Goldin, the services that Kaye Scholer will
perform will enable him to execute his duties and
responsibilities as an Examiner. Specifically, Kaye Scholer
will:
(a) Take all actions necessary to assist the Examiner in
preparing the Cash Management Report and any other report
to be filed, as well as assisting the Examiner in all
duties required of him pursuant to the Examiner Order,
including without limitation, his investigations,
including investigating 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;
(b) Represent or assist the Examiner at any Cash Management
Committee and Risk Assessment Committee meeting as the
Examiner deems appropriate;
(c) Provide counsel and services to the Examiner in
connection with conducting expedited discovery, including
interviews and depositions, if appropriate, and
compelling production of documents; and
(d) Provide such services to the Examiner as are necessary
and appropriate in the event the Examiner's role and/or
duties are expanded by further Order of the Court.
Arthur Steinberg, a member of the Kaye Scholer law firm, tells
the Court that the firm will 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
the Court.
Kaye Scholer uses its standard hourly rates in effect at the
time that the firm performs professional services. Its current
hourly rates are:
partners $495 to 690
counsel 470
associates 205 to 445
paraprofessionals 100 to 155
According to Mr. Steinberg, it is also Kaye Scholer's policy to
charge its clients in all areas of practice for all other
expenses incurred in connection with the client's case. In this
regard, Mr. Steinberg relates, Kaye Scholer utilizes a "user
fee" client billing system with respect to such expenses under
which a particular client is charged only for those expenses
incurred on its behalf. Those expenses include, but are not
limited to: photocopying, Lexis, Westlaw, facsimile transfers,
long distance telephone calls, cellular charges travel expenses,
meals, taxis, parking, word processing charges and non-ordinary
overhead expenses such as secretarial and other overtime.
"In light of the extraordinary size and complexity of the
Debtors' Chapter 11 cases, as well as the number of parties
involved, Kaye Scholer has made a considerable effort to
identify all of its connections with the Debtors, their primary
creditors, shareholders and other parties in interest, as well
as their respective attorneys and accountants," Mr. Steinberg
tells the Court. However, the process is ongoing and the firm
promises to file supplemental disclosures if additional
connections are made known.
"To the best of my knowledge, information and belief, Kaye
Scholer is a 'disinterested person', as that term is defined in
Section 101(14) of the Bankruptcy Code," Mr. Steinberg assures
Judge Gonzalez. (Enron Bankruptcy News, Issue No. 20;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
EPICOR SOFTWARE: Shareholders To Meet On May 14 In Irvine, CA
--------------------------------------------------------------
The Annual Meeting of Stockholders of Epicor Software
Corporation, a Delaware corporation, will be held on Tuesday,
May 14, 2002 at 10:00 a.m., Pacific Time, at the offices of the
Company located at 195 Technology Drive, Irvine, California
92618-2402, telephone number (949) 585-4000, for the following
purposes:
1. To elect five (5) directors to serve until the next annual
meeting of stockholders or until their successors are elected
and qualified.
2. To ratify the appointment of Deloitte & Touche, LLP, as
independent auditors of the Company for the fiscal year ending
December 31, 2002.
3. To approve the Company's 2002 Employee Stock Purchase
Plan.
4. To transact such other business as may properly come
before the meeting or any adjournment thereof.
Only stockholders of record at the close of business on March
25, 2002 are entitled to notice of and to vote at the meeting.
Epicor Software Corporation (Nasdaq: EPIC) is a leading provider
of integrated enterprise and eBusiness software solutions for
the midmarket.
Epicor, for the year 2001, reports a working capital deficit of
about $16.2 million.
E-SYNC: CRC Withdraws Notice of Default And Demand for Payment
--------------------------------------------------------------
E-Sync Networks, Inc., currently known as ESNI, Inc. (OTC
BB: ESNI), announced the receipt of a letter dated April 17,
2002 from its joint venture partner CRC, the complete text of
which is as follows:
"Reference is made to that certain letter dated April 15, 2002
from CRC, Inc. to E-Sync Networks, Inc. Please be advised that
we hereby withdraw the Notice of Default.
"Capitalized terms used and not otherwise defined herein shall
have the meanings set forth in that certain Amended and Restated
Security Agreement, dated as of August 6, 2001, between the
Company and CRC (the 'Security Agreement').
"Please be advised also that our withdrawing of the Notice of
Default is without prejudice, and we hereby reserve all rights
and remedies provided under the Notes, the Security Agreement,
and other Transaction Documents and/or applicable law with
respect to any defaults or Events of Defaults which may at any
time exist, including, without limitation, those referenced in
the Notice of Default. CRC's failure at this time to exercise
any such rights or remedies (a) is without prejudice to the
exercise of any such rights or remedies in the future and (b) is
not, and shall not be deemed to be, a waiver of any defaults or
Events of Default including, without limitation, those
referenced in the Notice of Default, or any of such rights and
remedies."
Headquartered in Trumbull, Connecticut, ESNI, Inc. (OTC BB:
ESNI) is a holding company that owns a majority share in E-Sync
Networks, LLC. E-Sync Networks, LLC is a joint venture between
ESNI and Charles River Consultants, Inc., providing an array of
enterprise messaging and network solutions, including: IT
infrastructure and network design and implementation; reliable,
high-quality messaging; secure, high-performance hosting; system
management and integration services, technical help desk and
application development. ESNI's largest stockholders are New
York-based venture fund Commercial Electronics Capital
Partnership, LP and Viventures, the venture capital arm of
Vivendi (NYSE: V). More information can be found on the Internet
at http://www.esyncnetworks.com.
EXIDE TECHNOLOGIES: Engages Kirklad & Ellis as Lead Counsel
-----------------------------------------------------------
Exide Technologies, and its debtor affiliates seek to employ and
retain the law firm of Kirkland & Ellis in Chicago, Illinois, as
their lead counsel to file prosecute these Chapter 11 Cases and
all related matters, effective as of the Petition Date.
Craig H. Muhlhauser, the Debtors' President and Chief Executive
Officer, tells the Court that the Debtors want to retain
Kirkland & Ellis because of the Firm's extensive experience and
knowledge in the field of debtors' and creditors' rights and the
Chapter 11 process.
While preparing for these cases, Kirkland & Ellis has become
familiar with the Debtors' businesses and affairs and many of
the potential legal issues that may arise during these
proceedings. Accordingly, the Debtors believe that Kirkland &
Ellis is both well qualified and uniquely able to represent them
in the Chapter 11 Cases.
The Debtors will look to Kirkland & Ellis to, among other
things:
A. advise the Debtors with respect to their powers and duties as
Debtors In Possession in the continued management and
operation of their businesses and properties;
B. attend meetings and negotiate with representatives of
creditors and other parties in interest;
C. take all necessary action to protect and preserve the
Debtors' estates, including the prosecution of actions on the
Debtors' behalf, the defense of any action commenced against
the Debtors, and objections to claims filed against the
estates;
D. prepare on behalf of the Debtors all motions, applications,
answers, orders, reports, and papers necessary to the
administration of the estates;
E. negotiate and prepare on the Debtors' behalf a plan of
reorganization, disclosure statement, and all related
agreements and/or documents, and also take any necessary
action on behalf of the Debtors to obtain confirmation of
such plan;
F. represent the Debtors in connection with obtaining post-
petition loans;
G. advise the Debtors in connection with any potential sale of
assets;
H. appear before this Court, any appellate courts, and the
United States Trustee and protect the interests of the
Debtors' estates before these Courts and the United States
Trustee;
I. advise the Debtors regarding the maximization of value of the
estates for their creditors; and
J. perform all other necessary legal services and provide all
other necessary legal advice to the Debtors in connection
with the Chapter 11 Cases.
Matthew N. Kleiman, Esq., a K&E partner, assures the Court that
the firm has not represented the Debtors' creditors, equity
security holders, or any other parties in interest, or their
respective attorneys and accountants, the United States Trustee
or any person employed in the office of the United States
Trustee in any matter relating to the Debtors or their estates.
In addition, Kirkland & Ellis does not hold or represent any
interest adverse to the Debtors' estates, K&E is a
disinterested person" as that phrase is defined in section
101(14) of the Bankruptcy Code. Mr. Kleiman discloses, however,
that K&E currently represents, has represented or in the future
may represent parties-in-interests in these cases (but only in
matters wholly unrelated to Exide) including:
A. Indenture Trustees: Bank of New York and Deutsche Bank AG;
B. Equity Holders: Amalgamated Gadget LP;
C. Significant Vendors: Anixter Inc., Bank of New York, Daramic
Inc., and EDS Corp.;
D. Creditors: Allstate Life Insurance Co., Banc of Montreal,
Bank of Scotland, Bank One NA, Banque Nationale, Bear Sterns
Investment Product, Citicorp USA Inc., Credit Suisse First
Boston, CSAM Funding I, CSFB International, Dresdner Bank AG,
First Union National Bank, GE Capital CFE Inc., General
Motors, JH Whitney Cash Flow Fund I LP, Lehman Brothers
Bankhausag, Lehamn Commercial Paper Inc., Lehman Syndicated
Loans Inc., Morgan Stanley D/W Pri Inc., Morgan Stanley
Emerging Market, Salomon Bros. Holding Co., Salomon Smith
Barney, Textron Financial Corp., Toronto Dominion Bank and
UBS AG;
E. Litigation Parties: Agere Systems, and Lucent Technologies;
F. Professionals: Credit Suisse First Boston, Goldman Sachs &
Co., Lehman Bros. Inc., and Salomon Smith Barney;
G. Customers: Ford Motor Co., Qwest Communications, Daimler
Chrysler AG, and Toyota Motor Corp.;
Mr. Kleiman says that K&E will bill for services on an hourly
basis, and expect reimbursement of actual, necessary expenses
and other charges that the Firm incurs. Mr. Kleiman does not
provide information about K&E's professionals' hourly rates.
To date, Mr. Kleiman informs the Court that Kirkland & Ellis has
received approximately $3,545,392 for its pre-petition
restructuring and related non-restructuring services, including
fees and expenses. Kirkland & Ellis has also received an advance
payment retainer of approximately $300,000 for its pre-petition
and post-petition services and expenses to be rendered or
incurred for or on behalf of the Debtors. (Exide Bankruptcy
News, Issue No.2; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
GRAPES COMMUNICATIONS: Files Pre-Packaged Chapter 11 Plan in NY
---------------------------------------------------------------
As part of a restructuring program that was launched last
October, Grapes Communications N.V./S.A. filed a petition for
confirmation of a pre-packaged plan of reorganization under
Chapter 11 of the U.S. Bankruptcy Code in the Southern District
Court of New York on April 16, 2002.
Following negotiations with its creditors, on October 31st,
2001, advised by ING Barings, Grapes launched a tender offer to
purchase its EUR200,000,000 13.5% Senior Notes due 2010, with a
final offer to bondholders of 23.2% of the face value of bonds
in cash. The Company set a 95% minimum threshold of acceptance
for the tender offer. In parallel, the Company solicited votes
to approve the filing of a petition to confirm a pre-packaged
plan of reorganization pursuant to Chapter 11 of the U.S.
Bankruptcy Code in case the minimum threshold for the tender
offer was not reached.
More than 76% of bondholders by principal amount accepted the
tender offer but, since the minimum threshold was not achieved,
the Company elected to pursue the alternative path of filing a
petition for confirmation of a pre-packaged Chapter 11 plan of
reorganization, for which the approval thresholds were
significantly exceeded.
The U.S. Court has scheduled a confirmation hearing for May
22nd, 2002.
Massimo Trippetti, the Company's Chief Executive Officer, said,
"The success of the solicitation of votes with respect to the
pre-packaged plan of reorganization demonstrates the strong
backing in support of the plan. I am therefore confident that
the plan will now be confirmed by the New York Court. We believe
that this event represents a major step for the Company since a
successful confirmation of the plan will substantially reduce
the Company's debt. We believe that the restructuring of our
balance sheet combined with improvement of our operational
performance and the additional committed financing required for
confirmation of the reorganization plan will allow Grapes to
achieve a fully-funded status".
Grapes Network Services, Numero Blu and Grapes Hellas, the
company's subsidiaries in Italy and in Greece are not involved
in the Chapter 11 procedure, and will continue normally their
day-to-day activities with no impact on their customers and
suppliers. The operating subsidiaries therefore will
keep running their business as usual and the management is fully
committed to their development and success.
For more information, please refer to the document collection at
http://www.grapesnet.com/English/investor.htm
GRAPES COMMS.: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Grapes Communications N.V./S.A.
202 Val des Bon Malades Ground Floor
Number 3, L-2121
Luxembourg
aka Grapes Communications NV
aka Mediterranean Telecommunications BV
aka Mediterranean Telecommunications N.V.
aka Medtel
Bankruptcy Case No.: 02-11801
Type of Business: The Debtor is a holding company with
subsidiaries that are alternative providers
of telecommunication services, primarily
targeting small- and mediumsized businesses
in Italy and Greece. The Debtor began
operations in January 1999 and, through
its subsidiaries, as of December 31, 2001,
provided basic voice and data services to
approximately 16,000 customers. For example,
Grapes Network Services S.p.A., one of the
Subsidiaries, provides voice, data and
Internet telecommunications services
primarily to small- and medium-sized
businesses and small office customers located
in Northern Italy. Grapes Hellas, S.A.,
another wholly owned subsidiary of the
Debtor, provides telecommunication services
to small- and medium-sized businesses in
Greece. The Subsidiaries are not filing for
protection under chapter 11 of the U.S.
Bankruptcy Code.
Chapter 11 Petition Date: April 16, 2002
Court: Southern District of New York (Manhattan)
Judge: Cornelius Blackshear
Debtor's Counsel: James L. Garrity, Jr., Esq.
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
(212) 848-4879
Fax : (646) 848-4879
Total Assets: EUR251,097,012
Total Debts: EUR308,102,397
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount(EUR)
------ --------------- -----------------
JP Morgan Chase Bank, as Notes 200,000,000
successor in interest to
The Chase Manhattan Bank
of London, trustee for
holders of 13.5% Notes
due 2010
Kevin Rainbird
Trinity Tower
9 Thomas More Street
London, United Kingdom E1W
1YT
Tel: 0044 20 7777 5603
Fax: 0044 20 7777 5410
European Dynamics S.A. Litigation 6,700,000
209, Kifissias Avenue
& Arkadiou Street,
15124 Maroussi, Athens,
Greece
Tel: 00 3010 8094500
Fax: 00 3010 8094500
KPN Eurovoice B.V. Telecom Services 2,812,353
P.O. Box 30000
2500 GA The Hague
The Netherlands
Tel: 0031 703437570
Fax: 0031 703432040
Newcourt Financial Leasing Services 548,125
Zadelstede 1-10
3431 JZ Nieuwegein
The Netherlands
Tel: 0031 306097745
Fax: 0031 306097746
Ernst & Young UK Accounting and 519,724
Becket House Consulting Fees
1 Lambeth Palace Road
London SE1 7 EU
United Kingdom
Tel: 0044 2079512000
Fax: 0044 2079511345
Reconta Ernst & Young Accounting and 331,100
Via Torino, 68 Consulting Fees
20123 Milan, Italy
Tel: 02722121
Fax: 02 72212037
Konstantinos Velentzas Litigation 283,268
Kodrou Street 9
Philithei Athens,
Greece
Xantic B.V. Telecom Services 238,796
(ex Station 12)
Arthur Andersen S.p.A. Consulting Fees 183,084
Cuatrecasas Legal Fees 174,711
Atlantic Exchange Tower Telecom Services 174,550
Cap Gemini E&Y Italy Consulting Fees 159,986
Telia UK Ltd Telecom Services 131,606
Arthur Andersen MBA S.r.l. Consulting Fees 100,090
BT / Ignite Solutions Telecom Services 99,260
Squire Sanders Legal Fees 83,565
De Bandt Van Hecke Legal Fees 66,055
Reteq Group LTD Telecom Consulting Fee 63,796
JP Morgan Consulting Fee 46,386
Ernst & Young Luxembourg Accounting and
"Kirchberg" Consulting Fees 42,022
HMG WORLDWIDE: Secures Exclusive Period Extension to June 19
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
grants HMG Worldwide Corporation and its debtor-affiliates an
extension of their exclusive periods. The Court grants the
Debtors until June 19, 2002 the exclusive right to file a plan
of reorganization and until August 19, 2002 to solicit
acceptances of the reorganization plan.
HMG Worldwide Corporation engages primarily in identifying in-
store, retail-based marketing objectives of its clients and
integrating research, creative design, engineering, production,
package design and related services to provide point-of purchase
merchandising fixtures and display systems. The Company filed
for chapter 11 protection on October 23, 2001. When the Company
filed for protection from its creditors, it listed total assets
of $34,542,000 and total debts of $61,946,000.
ITC DELTACOM: Negotiating With Sr. Lenders To Restructure Debt
--------------------------------------------------------------
ITC DeltaCom, Inc. (Nasdaq/NM: ITCD) reported that total
revenues in the quarter ended March 31, 2002 were $109.3
million, an increase of 8.6% over total revenues in the first
quarter of 2001 and an increase of 4.5% over total revenues in
the fourth quarter of 2001.
EBITDA, as adjusted (earnings before net interest, other income
and other expenses, income taxes, extraordinary item, and
depreciation and amortization), was $16.1 million in the first
quarter of 2002 compared with $10.6 million in the first quarter
of 2001 and $13.7 million in the fourth quarter of 2001, which
excludes $251,000 of restructuring expenses.
The foregoing results for total revenues and EBITDA, as
adjusted, for the first quarter of 2001 exclude previously
reported revenues of $1.5 million related to a prior-period
interconnection agreement settlement.
Quarterly Revenue Highlights
As previously reported, the Company has expanded its revenue
disclosure to provide reporting based on products divided into
retail and wholesale types of revenues. The financial tables
accompanying this release also include information for the
Company's business segments.
Retail Revenues
Retail revenues were $67.5 million in the first quarter of 2002.
This represents a 13.7% increase over retail revenues generated
in the first quarter of 2001 and a sequential quarterly increase
of 8.4% over retail revenues in the fourth quarter of 2001. Of
retail revenues in the first quarter of 2002, 82% were derived
from integrated telecom revenues (local, retail long distance,
and enhanced data services) and 18% from equipment sales and
services, and other retail services.
Integrated telecom revenues in the first quarter of 2002 were
$55.4 million, which represented an increase of 21.5% over
integrated telecom revenues in the first quarter of 2001 and an
increase of 4.6% over integrated telecom revenues in the fourth
quarter of 2001.
Local services revenues increased 30.2% and enhanced data
services revenue increased 51.6% in the first quarter of 2002
over revenues for these services in the first quarter of 2001.
Revenues for the first quarter of 2002 compared with revenues
for the fourth quarter of 2001 showed sequential quarterly
revenue growth of 2.1% in local services, 5.4% in retail long
distance services, and 8.1% in enhanced data services.
Wholesale Revenues
Wholesale revenues totaled $41.8 million in the first quarter of
2002, representing an increase of 1.2% over wholesale revenues
in the first quarter of 2001 and a decrease of 1.2% from
wholesale revenues in the fourth quarter of 2001. Of wholesale
revenues in the first quarter of 2002, 54.3% were derived from
wholesale broadband transport services, 35.1% from local-
interconnection services and 10.6% from other wholesale
services, including wholesale long distance, data and other
services.
Management Remarks
"Our continued focus on our core business offering is proving
itself successful for our company," commented Larry Williams,
chairman and chief executive officer. "This focus, coupled with
our reductions in selling, operations and administration
expenses and line costs, has enabled ITC DeltaCom to achieve
strong operating results this quarter. These results reflect the
continued commitment of our employees and our management team to
remain positioned as a premier telecommunications provider in
the southern United States."
Doug Shumate, senior vice president and chief financial officer,
added, "We were encouraged that our gross margin increased to
53.4%. At the end of the quarter, we had approximately $25
million in cash."
Among its highlights for the quarter, the Company:
-- Increased integrated telecom revenues 21.5% over the first
quarter of 2001
-- Increased local revenues 30.2% over the first quarter of
2001
-- Increased enhanced data revenues 51.6% over the first
quarter of 2001 and 8.1% over the fourth quarter of 2001
-- Improved EBITDA, as adjusted, excluding restructuring
expenses, 17.8% over the fourth quarter of 2001 and 86.7%
over the third quarter of 2001
-- Maintained a flat growth rate of annualized selling,
operations and administration expenses of approximately
$42.0 million
-- Held capital expenditures at $12.3 million, providing a
lower than expected run-rate
Debt Restructuring Discussions
As discussed in the Company's Form 10-K for 2001, the Company is
pursuing a number of efforts to strengthen its liquidity
position. As previously reported, these efforts include a
potential restructuring in which holders of the Company's public
senior notes and convertible subordinated notes would exchange
their notes for equity securities or for a combination of equity
securities and cash. The Company has been engaged in discussions
and has begun negotiations regarding a potential restructuring
with a committee representing holders of a significant amount of
the senior notes and with the financial advisor engaged by the
committee to assist it in this process. The committee's
financial advisor is conducting due diligence regarding the
Company. Although the Company is actively pursuing discussions
and negotiations with the committee, no restructuring agreement
has been reached and there can be no assurance that a
restructuring agreement will be reached in the future. The
Company will provide additional information about its
restructuring efforts and liquidity position in a conference
call to be held on or before May 15, 2002. A notice announcing
this call will be released when a date has been determined.
Operational Outlook
The Company is continuously taking steps to preserve cash flow,
operate as efficiently as possible, and realize the strategic
initiatives taken over the last year. The Company currently
expects cost improvement in the second quarter of 2002 based on
improved line costs and the reduction of expenses at e deltacom.
The Company anticipates that, when those cost savings are fully
implemented, the Company will realize savings of approximately
$8.0 million on an annualized basis.
The positive trend in cost containment, together with a non-
recurring financial reporting gain of approximately $4.0 million
associated with an early contract termination by an existing
wholesale customer, further supports the Company's expectations
that it will meet or exceed its $70 million EBITDA target for
2002. The Company expects that its existing wholesale operations
will continue to be subject to a variety of pressures.
The Company's Form 10-K for 2001 provides detailed information
about the Company's liquidity position and capital resources.
Conference Call Information
ITC DeltaCom will hold a conference call on or before May 15,
2002 to discuss the operating results reported in this press
release and to provide additional information about the
Company's restructuring efforts and liquidity position. The
details for this call will be announced at a later date.
ITC DeltaCom, headquartered in West Point, Georgia, provides
integrated telecommunications and technology solutions to
businesses in the southern United States and is a leading
regional provider of broadband transport services to other
communications companies.
ITC DeltaCom's business communications services include local,
long distance, enhanced data, Internet access, managed IP,
network monitoring and management, operator services, and the
sale and maintenance of customer premise equipment. ITC DeltaCom
also offers colocation, web hosting, and managed and
professional services. The Company operates 35 branch offices in
nine states, and its 10-state fiber optic network of
approximately 9,980 miles reaches approximately 175 points of
presence. ITC DeltaCom has interconnection agreements with
BellSouth, Verizon, Southwestern Bell and Sprint for resale and
access to unbundled network elements and is a certified
competitive local exchange carrier (CLEC) in Arkansas, Texas,
and all nine BellSouth states. For additional information about
ITC DeltaCom, please visit the Company's website at
http://www.itcdeltacom.com.
As of March 31, 2002, ITC DeltaCom's stockholders' deficit
amounts to $54,826,000.
IT GROUP: The Shaw Group Wins Bid for Substantially All Assets
--------------------------------------------------------------
The Shaw Group Inc. (NYSE: SGR) announced that in the auction
conducted pursuant to Chapter 11 of the U.S. Bankruptcy Code,
The IT Group, Inc. selected Shaw's bid as the highest and best
offer for substantially all of The IT Group's assets. The
Company believes it will receive bankruptcy court approval of
the sale by Wednesday, April 24, 2002, although approval may
occur as early as Friday, April 19, 2002.
Upon bankruptcy court approval, the Company will host a
conference call to discuss transaction details. Information
regarding the call will be provided at a later time.
The Shaw Group Inc. is the world's only vertically-integrated
provider of comprehensive engineering, procurement, pipe
fabrication, construction and maintenance services to the power,
process and environmental & infrastructure sectors. Shaw is
headquartered in Baton Rouge, Louisiana, and currently has
offices and operations in North America, South America, Europe,
the Middle East and Asia-Pacific. The Company has more than
13,000 employees worldwide. Additional information on The Shaw
Group is available at http://www.shawgrp.com
INTEGRATED HEALTH: Sells APS Interests To Bioservices for $12MM
---------------------------------------------------------------
Integrated Health Services, Inc., and its debtor-affiliates
received no objections to their motion to sell their APS Shares
and loan for $12 million and no offers to purchase the APS
Interests other than US Bioservices' offer. Accordingly, US
Bioservices' bid was and remains the highest and best bid for
the APS Interests.
The Court granted the motion by way of a final order that is
enforceable upon its entry. The Securities Purchase Agreement is
approved and the transfer of the APS Interests to US Bioservices
will be free and clear of all liens charges, encumbrances and
interests. The transfer is exempt from any transfer, stamp or
documentary transfer tax under section 1146(c) of the Bankruptcy
Code.
To the extent necessary under Rules 5003, 6004, 9014, 9021 and
9022 of the Bankruptcy Code, the Court expressly finds that
there is no just reason for delay in the implementation of the
order and expressly directs entry of judgment. Under section
363(m) of the Bankruptcy Code, the reversal or modification of
the Order on appeal will not affect the validity of the transfer
of the APS Interests to US Bioservices, as well as the
transactions contemplated or authorized by the order, unless the
same is stayed pending appeal prior to the closing of the
transactions authorized by the Order.
* * *
As previously reported, the Debtors contemplated selling their
interests in APS Enterprises Holding Company to US Bioservices
for $12 million in cash subject to higher and/or better offer.
The Debtors' interests in APS consists of the 20% of APS's total
capital stock that they hold plus a loan to APS in the principal
amount of $6.5 million.
A hearing was made on March 7, 2002 at 10:30 a.m. convened by
Judge Walrath to consider:
(1) authorizing the Debtors to implement a Letter of Intent with
US Bioservices Corporation dated February 13, 2002,
describing the terms upon which US Bioservices would propose
to acquire
(a) all of the capital stock of APS Enterprises Holding
Company, Inc. held by the Debtors, which represents 20%
of APS's total capital stock (the APS Shares), and
(b) all of the loans made to APS by the Debtors, which are
in the aggregate principal amount of $6.5 million
(including APS's $6.5 million, 9% promissory note, dated
October 1, 1999) (the APS Loans);
(2) approving the form and manner of notice and the Securities
Purchase Agreement;
(3) entry of a Procedures Order approving bidding procedures,
including approval of a break-up fee in the aggregate amount
of $240,000, and Expense Reimbursement to US Bioservices in
the event the Court authorizes a sale of the APS Interests
to a party other than US Bioservices and such a sale is
consummated and the possible conducting of an auction on
March 18, 2002;
(4) scheduling March 21, 2002 at 10:30 a.m. as the date and time
for a hearing on the approval of the sale (the Sale
Hearing).
APS and the Events Leading to the APS/IHS Transaction
APS is a diversified distributor of medications for patients
with chronic disorders. With pharmacies located throughout the
United States. APS provides patient-specific services, which
include provision of disease-specific information as well as the
detection of any potential drug interaction with other
prescribed medication. IHS originally owned 100% of the common
stock of APS America, Inc. through Symphony Health Services,
Inc., a subsidiary of IHS. In October 1999, IHS sold its entire
stake in APS America to APS in exchange for the APS Shares and
APS's $6.5 million, 9% promissory note due October 1, 2004.
With the assistance of their financial advisor and investment
banker, UBS Warburg LLC, the Debtors have determined that
monetization of the APS Shares and the APS Loans would best
serve the interests of the Debtors' estates.
In approximately May 2001, the Debtors were approached by APS
with an offer to purchase the APS Interests for a purchase price
of $7 million in cash. At the suggestion of UBS Warburg, the
Debtors made a counteroffer to APS to sell the APS Interests for
$12 million in cash which APS rejected.
After further negotiations and exchanges of proposals between
the Debtors and APS, the Debtors learned that US Bioservices was
in negotiations with the other shareholders of APS for the
acquisition of all of the other capital stock of APS. In
December 2001, the Debtors received a written proposal from the
CEO of U.S. Bioservices, on behalf of APS for the purchase of
the APS Interests for up to $8 million in consideration, to be
paid in the form of cash and a two-year interest-bearing note.
The Debtors rejected the proposal. After further negotiations,
US Bioservices offered to purchase the APS Interests from IHS
for $12 million in cash (i.e., the price reflected in the
Debtors' Initial Counterproposal to APS).
Thereafter, the Debtors and US Bioservices negotiated the
principal terms and conditions for the Debtors' sale of the APS
Interests to US Bioservices, free and clear of all liens, claims
and encumbrances, subject to higher and better offers and
subject to Court approval. The terms and conditions upon which
the parties would propose to effect the APS/IHS Transaction were
set forth in the Letter of Intent. (Integrated Health
Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
JUNIPER CBO: Fitch Puts CC Rated Class B-2 Notes on Watch Neg.
--------------------------------------------------------------
Fitch Ratings has placed seven classes from Juniper CBO 1999-1
Ltd., a collateralized debt obligation (CDO), on Rating Watch
Negative after reviewing the performance of the transaction.
Increased levels of defaults and deteriorating credit quality of
the portfolio have increased the credit risk of the transaction
to a point where the risk may no longer be consistent with its
ratings.
The following securities have been placed on Rating Watch
Negative:
Juniper CBO 1999-1 Ltd.
--Class A-1 notes 'AAA';
--Class A-2 notes 'AA+';
--Class A-3A notes 'BB-';
--Class A-3B notes 'BB-';
--Class B-1 notes 'B-';
--Class B-2 notes 'CC';
--Class B-2A notes 'CC'.
Juniper CBO 1999-1 Ltd. is currently failing its class A OC test
at 98.3% with a trigger of 115% and its class B OC test at 87.2%
with a trigger of 104%. The transaction's portfolio has
experienced over $29.3 million (7.1% of collateral) in new
defaults since the beginning of March 2002. Fitch previously
downgraded six classes from this transaction on February 4,
2002.
JWS CBO: Fitch Places BB- Rated Class D Notes On Watch Negative
---------------------------------------------------------------
Fitch Ratings places one tranche of the liabilities of JWS CBO
2000-1, Ltd. (JWS) on Rating Watch Negative. The transaction is
backed by high yield bonds. This tranche is being placed on
Rating Watch Negative after reviewing the performance of the
portfolio amidst increased levels of defaults and deteriorating
credit quality of the underlying assets. JWS is managed by
Stonegate Capital Management, LLC.
The following security is being placed on Rating Watch Negative:
--$23,250,000 class D notes rated 'BB-'
Fitch will continue to monitor this transaction and gather
information on the portfolio. Fitch will take further action
when the analysis has been completed.
JOBS.COM: TMP Worldwide Acquires Rights To URL and Trademark
------------------------------------------------------------
TMP Worldwide Inc. (NASDAQ: TMPW), the world's leading supplier
of human capital solutions, including the pre-eminent Internet
career portal Monster, says it has acquired the rights to the
Jobs.com URL and trademark.
Considered by the Company to be the most intuitive keyword for
online job seekers, Jobs.com received a monthly average of more
than 400,000 unique visitors during the first two months of
2002, according to Media Metrix. TMP Worldwide acquired the
Jobs.com URL and trademark and certain other assets for $800,000
in a court-approved bankruptcy auction.
TMP Worldwide's initial plans call for the Jobs.com site to
serve as an umbrella platform for several of the company's
existing and future online job board initiatives, providing TMP
clients with even broader exposure to job seekers. A key current
initiative is the TriState JobMatch.com service, which was
recently introduced in Greater Cincinnati with plans for a
future nationwide rollout. TriState JobMatch is designed to meet
the employment needs of non-exempt (hourly) workers and the
companies that employ them, a marketplace that currently makes
up more than 70 percent of the U.S. Labor market and has a
turnover rate four times greater than that of the exempt market.
Jobs.com CEO Peter Gudmundsson commented, "We found that the
Jobs.com URL was a logical choice among job seekers. Combined
with Monster's expansive suite of services, the Jobs.com
destination is bound to further enhance TMP's leadership in the
industry."
In addition to driving qualified traffic to the TriState
JobMatch service, Jobs.com will be used to provide online
hourly-wage job placement services to potential newspaper
partners in smaller areas which fall outside the major markets
targeted by the new service.
TMP Worldwide also plans to provide state unemployment
departments around the country with the ability to host their
respective job posting websites through Jobs.com. Sites hosted
for these government agencies will be populated with jobs
through the use of TMP's FlipDog information extraction
technology, and the company is currently negotiating with
several specific states to establish this service.
"Jobs.com is a desirable URL and it speaks directly to the
mission of TMP and Monster," said Jeff Taylor, Founder and
Chairman of Monster. "As traffic numbers to online career sites
surge, in a testament to their effectiveness, we feel this is
another step to providing job seekers access to our industry-
leading career management tools and services."
"Jobs.com will serve as a launching pad for TMP interactive
properties and will increase overall traffic to Monster and
FlipDog by serving as a gateway to our full suite of online job
solutions," said Jim Treacy, President and Chief Operating
Officer of TMP Worldwide. "The broad, generic appeal of Jobs.com
maps perfectly to our ``intern to CEO' strategy of serving the
entire spectrum of online job-seekers, and we see it playing a
significant role in a number of existing and future online job
initiatives."
About TMP Worldwide
Founded in 1967, TMP Worldwide Inc., with more than 11,000
employees in 32 countries, is the online recruitment leader, the
world's largest Recruitment Advertising agency network, and one
of the world's largest Executive Search & Executive Selection
agencies. TMP Worldwide, headquartered in New York, is also the
world's largest Yellow Pages advertising agency and a provider
of direct marketing services. The Company's clients include more
than 90 of the Fortune 100 and more than 480 of the Fortune 500
companies. In June 2001, TMP Worldwide was added to the S&P 500
Index. More information about TMP Worldwide is available at
http://www.tmp.com
Monster, headquartered in Maynard, Mass., is the leading global
careers website, recording over 43 million unique visits during
the month of March 2002 according to independent research
conducted by I/PRO. Monster connects the most progressive
companies with the most qualified career-minded individuals,
offering innovative technology and superior services that give
them more control over the recruiting process. The Monster
global network consists of local content and language sites in
the United States, United Kingdom, Australia, Canada, the
Netherlands, Belgium, New Zealand, Singapore, Hong Kong, France,
Germany, Ireland, Spain, Luxembourg, India, Italy, Sweden,
Norway, Denmark, Switzerland, Finland and Scotland. Monster is
the official online career management services sponsor of the
2002 Olympic Winter Games and 2002 and 2004 U.S. Olympic Teams.
More information about Monster is available at www.monster.com
or by calling 1-800-MONSTER.
KAISER ALUMINUM: Five Retirees Seek Recognition Under Sec. 1114
---------------------------------------------------------------
Kaiser Aluminum Corporation's retired employees ask to appoint
an Official Committee of Retired Employees to serve as the
authorized representative of, and protect the rights of, the
Retirees in the debtors' bankruptcy cases pursuant to Section
1114(D) of the Bankruptcy Code. The proposed members of the 5-
person committee are:
A. John E. Daniel, Committee Chairman
Retired 1998 as Vice President, Primary Aluminum Business
Unit of Kaiser Aluminum & Chemical Corporation
B. Jesse D. Erickson
Retired 1989 as Senior Vice President of Kaiser Aluminum &
Chemical Corporation
C. Timothy F. Preece
Retired 1986 as Vice President, Kaiser Aluminum & Chemical
Corporation and Chairman and President of Kaiser Development
Company
D. James B. Hobby
Retired 1991 as Vice President, Flat Rolled Products Division
of Kaiser Aluminum & Chemical Corporation
E. David L. Perry
Retired 1991 as Vice President & General Counsel of Kaiser
Aluminum & Chemical Corporation
According to Frederick B. Rosner, Esq., at Cozen O'Connor in
Wilmington, Delaware, in their February 8, 2002 letter to
salaried retirees and surviving spouses, the Debtors announced
that, on May 1, 2002, they would begin to require all salaried
retirees who retired on or after January 1, 1976, their
surviving spouses and eligible dependents, to make very
substantial monthly contributions for continued medical and
prescription drug coverage.
There are over 4,500 salaried retirees, spouses, dependents, and
surviving spouses who are receiving "retiree benefits" from the
Debtors Also, the Debtors announced their intention not to pay
retiree benefits at the level currently being paid, which puts
retiree benefits in jeopardy in these bankruptcy cases. Based on
information furnished by the Debtors, Mr. Russo believes that
the overall impact on the Retirees of the changes announced in
that letter would be to shift approximately $10 million of
additional annual medical benefits costs to the Retirees,
without any cost-sharing by the active employees of the Debtors
or the hourly retirees of the Debtors, who are represented by
unions.
Mr. Rosner relates that in 1988, a group of the Debtors'
retirees formed a nonprofit association, organized under the
laws of the State of California as Kaiser Aluminum Salaried
Retirees Association or KASRA, to maintain and promote the
interests of salaried retirees regarding their retirement
benefits. KASRA is headquartered in the San Francisco Bay Area
and currently has approximately 3,000 retiree and surviving
spouse members.
Since its formation, Mr. Rosner submits that KASRA has
functioned as the authorized representative for non-union,
salaried retirees. For example, on or about October 21, 1996,
KASRA, on behalf of salaried retirees, negotiated and entered
into a Tolling Agreement with Kaiser Aluminum and certain other
Debtors, wherein the parties agreed that the statute of
limitations relative to certain claims of the salaried retirees
would be tolled. In addition, on February 5, 2002, a committee
designated by the Board of Directors of KASRA met with
representatives of Kaiser Aluminum in the San Francisco Bay Area
to discuss the Debtors' intent to not pay retiree benefits which
eventually led to KASRA's nomination of a five-person committee.
Mr. Rosner tells the Court that the average age of the Retirees
is advanced and the Retirees are generally on a limited income,
and many depend on others to handle their financial affairs. To
the best of the knowledge of the members of the Proposed
Retirees Committee, none of the retiree benefits provided to the
Retirees are covered by a collective bargaining agreement.
(Kaiser Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
DebtTraders reports that Kaiser Aluminum & Chemicals' 12.750%
bonds due 2003 (KAISER2) trade between 23 and 25. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=KAISER2for
real-time bond pricing.
KMART: FL Labor Department Wants Court to Lift Automatic Stay
-------------------------------------------------------------
The Florida Department of Labor and Employment Security,
Division of Workers' Compensation asks the Court to enter an
order either:
(a) determining that the automatic stay does not prevent it
from revoking the Debtors' self-insurance privileges; or
alternatively,
(b) lifting or modifying the automatic stay so as to permit
it to revoke the Debtors' self-insurance privileges.
Florida Assistant Attorney General Jeffrey M. Dikman tells the
Court that Kmart is presently authorized to self-insure. As a
statutory condition of self-insuring, Mr. Dikman says, Kmart was
required to and did provide a Surety Bond in the sum of
$20,121,208 payable to the Division.
About five months ago, Mr. Dikman relates that Kmart's surety --
American Motorist's Insurance Company -- attempted to cancel
Kmart's bond, effective February 27, 2002. Fortunately, Kmart's
surety has extended the cancellation date through March 21,
2002. "But this doesn't exactly give the Division long-term
coverage," Mr. Dikman notes. Under Florida law, Mr. Dikman
emphasizes that Kmart had the statutory obligation to provide
replacement bond coverage within 10 days of the date of the
cancellation notice.
Mr. Dikman recounts that the Division demanded Kmart to take
these actions on or before February 15, 2002:
(1) reinstatement of the bond; and
(2) that bond coverage be increased from $20,000,000 to
$22,000,000.
The Division later learned that Kmart had reached a tentative
settlement with another surety -- Kemper -- and that Court
approval of the settlement would be sought on March 20, 2002.
But since the Surety's settlement with Kmart is contingent on
Court approval, Mr. Dikman points out that the Division still
has no firm assurance that it will have a replacement bond in
hand on March 21, 2002. Moreover, Mr. Dikman continues, the
Division remains uncertain whether the proposed settlement would
provide for an increase in bond coverage.
Because of Kmart's continued and repeated delays in obtaining
the requested bond coverage, the Division seeks to utilize its
"police and regulatory power" in order to revoke Kmart's
privilege to self-insure.
Mr. Dikman explains that the Division's interest is purely
regulatory. "The Division seeks to ensure that Kmart's workers
in Florida are adequately insured in the event that they become
injured on the job," Mr. Dikman says.
(Kmart Bankruptcy News, Issue No. 13; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
KOMAG INC: Debtor Reports Improved Financial Results for Q1 2002
----------------------------------------------------------------
Komag, Incorporated (OTC Bulletin Board: KMAGQ), the largest
independent producer of media for disk drives, announced its
operating results for the first quarter of 2002. The company's
financial results improved upon the company's earlier prediction
of sequentially flat performance.
Net sales for the first quarter of 2002 improved to $61.4
million compared to $58.0 million in the fourth quarter of 2001.
The increase was due to resumption of substrate sales offset by
a small decline in the volume of finished disk sales. The
company's first quarter 2002 operating loss of $10.4 million and
net loss of $10.2 million represented improvements compared to
the fourth quarter of 2001. In the fourth quarter of 2001 the
operating loss and net loss were $29.5 million and $34.1
million, respectively. On a pro forma basis, excluding one-time
accounting adjustments and taking into account the adoption of
SFAS 142, first quarter 2002 operating loss was $10.4 million
and net loss was $12.5 million compared to operating loss of
$11.6 million and net loss of $16.2 million in the fourth
quarter of 2001. A table reconciling pro forma results to GAAP
follows the text of this press release. As a result of the
company's rigorous cost controls, production yield management,
and balance sheet management, including a $2.3 million sale of
idle assets, cash flow continued to be positive. The company's
cash balance increased $6.2 million to $24.0 million during the
first quarter of 2002.
First Quarter Review and Outlook
During the first quarter of 2002 the company shipped 9.5 million
finished disks and 2.9 million substrates. The volume of
finished disks was slightly lower than the 9.8 million shipped
during the fourth quarter of 2001. Finished media average
selling price was essentially unchanged. In the first quarter of
2002 shipments of disks capable of storing 40 gigabytes of data
doubled to approximately 25% of sales. Eighty-four percent (84%)
of the company's shipments were at the 30 gigabyte per platter
or higher capacity. The remaining shipments were for drive
programs primarily targeted to consumer electronics
applications. As a percentage of sales, shipments to Western
Digital comprised 67% of sales in the first quarter of 2002,
down from 85% in the fourth quarter of 2001, shipments to Maxtor
were 23%, up from 13% in the fourth quarter, and sales to
Seagate and others increased to approximately 10%. As a cash
conservation measure, disk production was limited to 9.0 million
units compared to 10.3 million units in the fourth quarter of
2001.
"We have proved our ability to generate cash and invest
appropriately in our business, even at the level of sales we
have experienced during the widespread PC industry recession of
the last year," said T.H. Tan, Komag's chief executive officer.
"Now that we have restructured our business, lowered our costs,
invested in technology development, and focused on manufacturing
execution, we are poised for recovery. We have made steady
progress and when we emerge from chapter 11, our balance sheet
will be healthier, enhancing our probability for success."
Mr. Tan added, "We expect to see modest improvement in our sales
volume during each of the next three quarters. This improvement
will depend, in part, on our ability to qualify for 60 and 80
gigabyte per platter programs. Current indications are that we
are doing very well with several customers in these
qualifications. Because our cost structure is highly leveraged,
additional sales should significantly improve our bottom line.
Assuming we can achieve the sales volumes we currently expect,
we believe the company should be profitable in the fourth
quarter of this year."
Chapter 11 Status
On April 8, 2002 the company filed a modified Plan of
Reorganization that reflects compromises resulting from
negotiations among the company and several of its creditors. The
modified Plan has the support of creditors holding substantially
all of the company's undisputed outstanding debt. A hearing
before the Bankruptcy Court to consider confirmation of the
modified Plan is scheduled for May 9, 2002. Although the company
anticipates objection from one holder of a disputed claim, the
company is optimistic that the Bankruptcy Court will confirm the
modified Plan without further delays, and that the company will
be in a position to emerge from chapter 11 by the end of the
second quarter of 2002.
Adoption of SFAS 142
The Company adopted the provisions of Statement of Financial
Accounting Standards No. 142 (SFAS 142) regarding goodwill
amortization effective January 1, 2002. Accordingly, the Company
no longer amortizes goodwill from business acquisitions. On a
pro forma basis, if the Company had applied SFAS 142 during the
fourth quarter of 2001, amortization of goodwill and other
intangible assets would be reduced by $3.5 million. The company
estimates the cumulative charge for adopting SFAS 142 will be in
a range of $60 million to $80 million and plans to reflect the
change retroactively as of January 1, 2002 during the second
quarter of 2002.
About Komag
Founded in 1983, Komag is the world's largest independent
supplier of thin-film disks, the primary high-capacity storage
medium for digital data. Komag leverages the combination of its
U.S. R&D centers with its world-class Malaysian manufacturing
operations to produce disks that meet the high-volume, stringent
quality, low cost and demanding technology needs of its
customers. By enabling rapidly improving storage density at
ever-lower cost per gigabyte, Komag creates extraordinary value
for consumers of computers, enterprise storage systems and
electronic appliances such as peer-to-peer servers, digital
video recorders and game boxes.
For more information about Komag, visit Komag's Internet home
page at http://www.komag.com or call Komag's Investor Relations
24-hour Hot Line at 888-66-KOMAG or 408-576-2901.
LINDSEY MORDEN: S&P Withholds Ratings After Q1 Loss Announcement
----------------------------------------------------------------
Standard & Poor's commented on Lindsey Morden Group Inc.'s
recent press release, which warned investors of first-quarter
2002 losses.
In the press release, which was issued on September 17, 2002,
Lindsey Morden announced that it expected to report a loss of $5
million for the first quarter of 2002, up from a loss of $1.8
million for the same period in 2001. Lindsey Morden stated that
much of the loss stemmed from the settlement of two outstanding
litigations, including a settlement with Eastgate Group relating
to the sale of Hambro Associates in 1998.
Standard & Poor's is aware of these issues and has previously
considered them in its analysis. As a result, there is no rating
action at this time, though the outlook on the company remains
negative. Standard & Poor's will continue to monitor
developments in these areas and comment when appropriate.
The double-'B'-minus counterparty credit and senior debt ratings
on Lindsey Morden are based on the company's high financial
leverage and management's continued challenge to achieve global
integration.
NMHG HOLDING: S&P Rates Proposed $250M Sr. Unsecured Notes At B+
----------------------------------------------------------------
On April 18, 2002, Standard & Poor's assigned its 'BB-' long-
term corporate credit rating to NMHG Holding Co., a wholly owned
subsidiary of NACCO Industries Inc. At the same time, Standard &
Poor's assigned its 'BB-' rating to NMHG's proposed $175 million
secured bank facility due 2005, and its 'B+' rating to the
company's proposed $250 million senior unsecured note offering
which will be filed under SEC Rule 144A. The ratings reflect
NMHG's leading positions within cyclical and volatile markets,
its aggressive financial profile, and fair financial
flexibility. Rating outlook is positive.
NMHG competes in the global forklift truck market, which is
characterized as moderate in size, somewhat consolidated, and
modestly capital intensive. Over the business cycle, the
industry grows at GDP-like rates. Larger forklift manufacturers
are also gaining market share from vendor consolidation, which
is leading to national account opportunities. However, the
industry is both cyclical and volatile; demand for lift trucks
has been quite weak during the past several quarters and volume
is not expected to materially improve until 2003. Although
manufacturing consists mainly of assembly and some welding of
purchased components, operating leverage is high due to modest
industry profitability, and the highly cyclical nature of
higher-margin products.
Barriers to entry, including brand image, economies of scale,
and a strong distribution network, are meaningful. Nonetheless,
pricing pressures are constant, forcing participants to
continuously improve their cost structures and develop new
products to generate fair profitability measures.
NMHG is the largest domestic manufacturer, and the third largest
manufacturer worldwide of lift trucks. Competitive strengths for
the company include its leading brand names (Hyster and Yale),
broad product portfolio, economies of scale (particularly in
North America), and large global distribution network. The
firm's independent dealer network and large install base in
North America provide opportunities for the company to gain
market share and participate in higher-margin aftermarket
service and parts markets. About 36% of sales are generated
outside the Americas, providing some geographic diversity,
however, NMHG's market positions outside the Americas are
modest.
Customer diversity is considered good, even though customer
concentration will modestly increase over time as the company
obtains additional national account awards. However, national
account awards are viewed favorably as it enables the firm to
gain volume and aftermarket opportunities, without giving up
margins or payable terms. In the intermediate term, the
company's strategic thrust will mainly be on improving internal
operations. NMHG continues to implement demand flow technology,
focusing on global procurement and new product introductions,
all of which should improve margins and cash flow during the
next few years. No acquisitions are expected in the intermediate
term. Over the business cycle, returns on permanent capital are
expected to average in the low-double digit area.
The financial risk assessment reflects the company's temporarily
stretched balance sheet, with total debt (adjusted for the
present value of operating leases) to EBITDA of about 6.1 times
at December 31, 2001, and fair financial flexibility. Cash flow
generation benefits from modest working capital needs and
moderate, although flexible, fixed capital needs. During the
next couple of years, cash generation should improve from recent
plant rationalizations, new product introductions, purchasing
leverage, and various other cost savings initiatives.
Although demand has been weak, volumes should gradually improve
in the intermediate term as the U.S. economy strengthens.
Therefore, the company is expected to generate a moderate amount
of free cash flow, which is expected to be used primarily for
debt reduction and a nominal dividend to its parent. As a
result, total debt to EBITDA is expected to strengthen to about
3.0x, while funds from operations to total debt improves to
about 20% (from 11% at Dec. 31, 2001) during the next two years.
Financial flexibility benefits from a modest amount of cash on
hand, sufficient room under the firm's new bank facility,
limited debt amortization requirements, and discrete assets,
which could be sold if necessary.
The bank facility is rated the same as the corporate credit
rating. Availability under the facility is based on a borrowing
base, and it is secured by essentially all of assets and capital
stock of NMHG's operations. Standard & Poor's severely
discounted the company's cash flows to simulate a default
scenario and capitalized them by an EBITDA multiple reflective
of its peer group. Under this simulated downside case,
collateral value provides a strong likelihood of substantial
recovery of principal the bank facility if a payment default
were to occur. The senior unsecured notes are rated one notch
below the corporate credit rating due to their structural
subordination to the secured lenders.
Outlook
Modest ratings upside is possible in the next 24-36 months
should NMHG's strategy of strengthening its business and credit
profile from a number of operating initiatives, and improving
market fundamentals, is realized.
NATIONSRENT INC.: FINOVA Moves for Adequate Protection Package
--------------------------------------------------------------
Lee Harrington, Esq., at Blank Rome Comisky & McCauley LLP
Wilmington, Delaware, informs the Court that NationsRent Inc.,
and its debtor-affiliates executed a promissory note in favor of
FINOVA Capital Corporation dated October 20, 2000. The note had
a principal worth of $4,968,083 including, without limitation,
interest, fees, expenses and other charges. The promissory note
is secured by the FINOVA collateral granted by the Debtors
according to a Master Assignment Agreement between FINOVA and
General Electric Capital Corp. and pursuant to the Collateral
Schedule No. F-1 to the Master Security Agreement between GE
Capital -- as assigned to FINOVA -- and NationsRent.
In addition, on October 2, 2000, FINOVA, the Debtors and Fleet
National Bank, as administrative agent under a Fifth Amended and
Restated Revolving Credit and Term Agreement, dated August 2,
2000, entered into a Subordination and Intercreditor Agreement.
This agreement was such that Fleet agreed that any security
interest it had as of the date of the Subordination Agreement,
or that it might later acquire in the FINOVA Collateral, would
be subordinate to the senior security interest and lien of
FINOVA in the FINOVA Collateral.
FINOVA asserts that it holds a valid, perfected first priority
lien on the FINOVA Collateral. FINOVA thus asks that the Court
grant it adequate protection and prohibit the use of cash
collateral, or in the alternative, grant relief from the
automatic stay. Since the Petition Date, Mr. Harrington claims
that the Debtors have continued to use the FINOVA Collateral in
the ordinary course of their businesses, which entails, inter
alia, renting the construction equipment to third parties who
use the Equipment and in turn, pay the Debtors a fair market
rental amount for their use of the Equipment. Under Article of
the Uniform Commercial Code, both the Equipment and the stream
of rental payments generated from the leasing of the Equipment
constitute FINOVA Collateral. While the Debtors are being paid
for their rental of the Equipment, the Debtors are using the
FINOVA Equipment and using its cash collateral without providing
FINOVA with any adequate protection.
Consequently, Mr. Harrington argues that FINOVA is entitled to
adequate protection of its interest in the FINOVA Collateral,
which includes the Equipment and the cash proceeds generated
from the rental of such Equipment by the Debtors to third
parties. In order to provide adequate protection to FINOVA for
use of the Equipment, the Debtors should at a minimum:
A. make regular monthly debt service payments to FINOVA as
required by the Note;
B. provide for the maintenance and repair of the Equipment in
accordance with the terms of the Master Security Agreement;
and,
C. provide evidence of insurance covering the Equipment in
accordance with the terms of the Master Security Agreement.
Mr. Harrington suggests that the Debtors should also grant
FINOVA replacement liens on the cash collateral and segregate,
hold and remit to FINOVA the cash collateral in order to provide
adequate protection to FINOVA for use of the cash collateral,
(i.e. the revenue generated by the Debtors from the rental of
the Equipment to the Debtors' customers). If the Debtors do not
provide the aforementioned adequate protection to FINOVA, they
should be prohibited from using the cash collateral.
Mr. Harrington believes that FINOVA is entitled to relief from
the automatic stay for cause. Caused is based on the lack of
adequate protection of its interest in the FINOVA Collateral in
the event that the Debtors fail to provide the aforementioned
adequate protection. The Court should lift the automatic stay to
enable FINOVA to exercise any and all rights and remedies it has
under the Master Security Agreement, Master Assignment Agreement
and Note. Furthermore, to the extent that the adequate
protection FINOVA is entitled to proves to be inadequate, any
claim that may arise is entitled to superpriority status
pursuant to Section 507(b) of the Bankruptcy Code. (NationsRent
Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
NETWORK COMMERCE: Taps Moss Adams to Replace Andersen as Auditor
----------------------------------------------------------------
Effective as of April 4, 2002, Network Commerce Inc., a
Washington corporation, decided not to retain its independent
auditors, Arthur Andersen LLP and determined to engage Moss
Adams LLP as its new independent auditors. On April 8, 2002, the
Company received letter confirmation from Arthur Andersen LLP of
the cessation of the client-auditor relationship. The change in
independent auditors was made subsequent to the filing of the
Company's Annual Report on Form 10-K for the year ended December
31, 2001. This determination was approved by the Board of
Directors of the Company, upon the recommendation of the Audit
Committee.
The audit reports of Arthur Andersen LLP on the Company's
financial statements for the past two fiscal years ended
December 31, 2001 and 2000 contained an explanatory paragraph
regarding the Company's ability to continue as a going concern.
Network Commerce (formerly ShopNow.com) has sold or otherwise
disposed of half a dozen business operations -- including direct
marketing firm The Haggin Group, payment processing software
maker Go Software, online shopping site ShopNow.com, and online
business barter portal Ubarter.com -- in an effort to revive its
fortunes. Network Commerce, which is being sued by shareholders,
has also significantly reduced its staff. The company currently
offers technology services such as domain name registration, Web
site hosting, e-mail marketing, and e-commerce development.
* * *
As previously reported in the February 11, 2002 issue of the
Troubled Company Reporter, Network Commerce posted a $2.6
million operating EBITDA loss in the fourth quarter 2001. Net
loss for the quarter, including extraordinary and one-time
items, was $7.8 million. For the year, net loss was $202.1
million.
NEW ENERGY TRADING COMPANY: Voluntary Chapter 11 Case Summary
-------------------------------------------------------------
Debtor: The New Energy Trading Company
1400 Smith Street
Houston, Texas 77002
aka EVSL Corp.
aka ERMT Corp.
Bankruptcy Case No.: 02-11824
Type of Business: The Debtor, an affiliate of Enron Corp., was
formed for the purpose of gas and power
trading but has not conducted business.
Chapter 11 Petition Date: April 16, 2002
Court: Southern District of New York (Manhattan)
Judge: Arthur J. Gonzalez
Debtors' Counsel: Brian S. Rosen, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
212-310-8602
Fax : 212-310-8007
and
Melanie Gray, Esq.
Weil, Gotshal & Manges LLP
700 Louisiana, Suite 1600
Houston, Texas 77002
713-546-5000
Total Assets: $251,196,178
Total Debts: $0
NEW ORLEANS AIRPORT MOTEL: Voluntary Chapter 11 Case Summary
------------------------------------------------------------
Debtor: New Orleans Airport Motel Associates, L.P.
3445 Peachtree Road, NE, Suite 700
Atlanta, Georgia 30326
Bankruptcy Case No.: 02-11859
Type of Business: New Orleans Airport Motel Associates, an
affiliate of Lodgian Inc., owns and operates
the New Orleans Airport Hotel & Conference
Center, New Orleans, LA.
Chapter 11 Petition Date: April 17, 2002
Court: Southern District of New York (Manhattan)
Debtor's Counsel: Adam C. Rogoff, Esq.
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
(212) 504-6000
Fax : (212) 504-6666
Estimated Assets: More than $100 Million
Estimated Debts: More than $100 Million
ORA ELECTRONICS: Seeks Bankruptcy Protection in San Fernando, CA
----------------------------------------------------------------
Ora Electronics Inc. filed for chapter 11 bankruptcy protection
on April 17, 2002 in the U.S. Bankruptcy Court in the San
Fernando Valley in California, listing $6 million in assets and
$11.8 million in debts. The Chatsworth, California-based company
develops and supplies interface, connectivity solutions and
peripheral accessories for wireless communication devices. (ABI
World, April 18, 2002)
ORA ELECTRONICS INC: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Ora Electronics Inc.
9410 Owensmouth Avenue
Chatsworth, California 91313
Bankruptcy Case No.: 02-13432
Type of Business: The Debtor is into Property Lending and
Manufacturing.
Chapter 11 Petition Date: April 16, 2002
Court: Central District of California (San Fernando Valley
Division)
Judge: Kathleen T. Lax
Debtors' Counsel: Kenneth E. Cohen, Esq.
Law Offices of Kenneth Cohen
6700 Fallbrook Avenue, #160
West Hills, California 91307
818-227-2828
Total Assets: $6,055,179
Total Debts: $11,872,155
OUTSOURCING SERVICES: S&P Affirms B Rating, Outlook Is Negative
---------------------------------------------------------------
On April 18, 2002, Standard & Poor's affirmed its 'B' credit
ratings for Outsourcing Services Group Inc. Rating outlook is
negative.
Outsourcing Services received an amendment from its bank group
that loosened financial covenants and waived covenant violations
for the fourth quarter 2001. Availability under the revolving
credit facility improved to about $19 million at March 31, 2002,
following the loosening of financial covenants. The company's
weak financial performance in 2001, due to tough industry
conditions and internal issues, led to covenant defaults under
its credit agreement. Standard & Poor's believes that
Outsourcing Services will continue to be challenged over the
intermediate term by the highly competitive environment in which
it operates, given the maturity of the U.S. consumer products
market.
The ratings reflect Outsourcing Services' high debt leverage
resulting from its aggressive acquisition strategy, partially
offset by the company's solid position in the contract
manufacturing industry.
Outsourcing Services is a full-service contract manufacturer
providing product conceptualization, formulation, manufacturing,
filling, and packaging services largely to the North American
health, beauty, personal care, and pharmaceutical markets. The
company also provides materials procurement, warehousing, and
distribution of finished product. While the industry remains
challenging with limited pricing flexibility, growth prospects
are good as companies are increasingly outsourcing manufacturing
and other activities to reduce investment in fixed assets and
focus on core competencies.
Revenues for 2001 rose 10% year-over-year, primarily because of
the contribution from acquisitions made in 2000 and 2001. The
company's operating margin (before depreciation and
amortization) declined to 8.9% in 2001 from 10.1% the previous
year due largely to higher material and labor costs. Credit
measures weakened somewhat in 2001, with debt to EBITDA of 5.7
times and EBITDA interest coverage of 1.6x. Standard & Poor's
expects that credit ratios will improve in fiscal 2002 and
remain in line with the rating. The rating does not incorporate
flexibility for debt-financed acquisitions.
Outlook
Outsourcing Services' credit measures are weak for the current
rating. If management fails to take steps that result in an
improvement in credit protection measures over the intermediate
term, the ratings could be lowered.
PACIFICARE: Lenders Agree to Extend Credit Maturity Date To 2005
----------------------------------------------------------------
PacifiCare Health Systems Inc. (Nasdaq:PHSY) has executed an
agreement with its lenders that will extend the maturity date of
its $735 senior credit facility by two years from its current
maturity date, to Jan. 3, 2005.
The extension is conditioned upon PacifiCare reducing the
existing facilities by $250 million prior to the current
maturity date, which is Jan. 2, 2003. The $250 million reduction
in the credit facilities will comprise a $203 million cash
reduction in the term loan and a $47 million reduction in
borrowing capacity under the revolving credit facility.
The amended credit facility provides for a $593 million term
loan and a $142 million revolving line of credit. Bank of
America Securities LLC, JP Morgan Securities Inc. and Citigroup
remain joint-book running managers on the agreement, which sets
the new interest rate at LIBOR plus 500 basis points, up from
LIBOR plus 450 basis points.
The total size of the facilities reflects an initial reduction
of $40 million on the closing date of April 18th, comprising a
$32 million cash payment toward the term loan and an $8 million
reduction in borrowing capacity under the revolving credit
facility. Another $10 million payment will be made within 60
days of the closing date.
The credit facilities will amortize $25 million per quarter
beginning July 2, 2002. All such amounts will be applied to the
$250 million required reduction prior to Jan. 2, 2003. In
connection with the amendment, PacifiCare paid its lenders usual
and customary fees.
"The unanimous approval of this amendment is a vote of
confidence in the company's turnaround from our lenders," said
Howard G. Phanstiel, president and chief executive officer of
PacifiCare.
"The extension allows the company additional time and
flexibility to pursue a more permanent capital restructuring,
while we make further progress on improving our business and
position it for future growth. This amendment should also
address concerns raised by the rating agencies about the size of
the principal payment previously due on January 2nd next year."
Gregory W. Scott, executive vice president and chief financial
officer, added: "The company will fund the initial payments and
required amortization out of cash flow from operations. We are
extremely confident that between existing access to capital and
other potential alternative sources of capital we can meet the
remainder of the $200 million cash commitment by January 2,
2003."
PacifiCare Health Systems is one of the nation's largest health-
care services companies. Primary operations include managed care
and other health insurance products for employer groups and
Medicare beneficiaries in eight western states and Guam, serving
approximately 3.3 million members as of March 31, 2002.
Other specialty products and operations include behavioral
health services, life and health insurance, dental and vision
services and pharmacy benefit management. More information on
PacifiCare Health Systems can be obtained at
http://www.pacificare.com.
PACIFIC GAS: Gets Court Approval To Assume 4 Siemens Contracts
--------------------------------------------------------------
Pacific Gas and Electric Company sought and obtained approval by
the Court to assume four agreements between PG&E and Siemens
Westinghouse Power Corp. (SWPC) in connection with the Diablo
Canyon Power Plant (DCPP) owned and operated by PG&E:
(1) a steam turbine generator maintenance services contract (No.
4500575265) executed on July 2, 1999, and amended on May 1,
2001 (No. 4500866132) for the performance of maintenance,
testing and inspection services by SWPC during four
scheduled refueling outages,
(2) Purchase Order No. 103568 for the purchase of turbine blades
and shrouds,
(3) Purchase Order No. 106882 for the purchase of generator
bushings for possible use during the 2R10 refueling outage,
(4) a low pressure turbine rotor repairs contract (No.
4600012857) for the repair and refurbishing of three low
pressure turbine rotors by SWPC.
The DCPP, which is located in San Luis Obispo County near the
town of Avila Beach, California, is a two unit nuclear power
plant. Each unit has a Westinghouse NSSS pressurized water
reactor and Westinghouse turbines and generator.
The SWPC Contracts provide for maintenance, repair and
reassembling services and the purchase of parts for the
Westinghouse turbines and generator.
PG&E brought this Application pursuant to Section 365 of the
Bankruptcy Code on an ex-parte basis after serving notice of
this Application on the United States Trustee and securing
approval of this application by SWPC and the Committee.
The amount necessary to cure the amounts owed pursuant to
outstanding invoices under the SWPC Contracts is $956,375 in the
aggregate, consisting of:
(1) $113,746 for the General Maintenance Services Contract,
(2) $655,210 for the Turbine Blades and Shrouds Purchase Order,
(3) $69,381 for the Generator Bushings Purchase Order, and
(4) $118,038 for the LP Turbine Rotor Repairs Contract.
The aggregate cost to PG&E of future performance under the SWPC
Contracts will be approximately $18,400,000.
PG&E tells the Court that, with PG&E's substantial cash reserves
and ongoing revenues, PG&E is clearly capable of curing
arrearages and completing its future performance under the SWPC
Contracts. (Pacific Gas Bankruptcy News, Issue No. 31;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
POLAROID CORP: Obtains Okay To Continue Employee Severance Plan
---------------------------------------------------------------
The Polaroid Corporation, and its debtor-affiliates sought and
obtains the Court's authority to continue the employee
severance program to current employees terminated on or before
June 30, 2002.
Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher
& Flom, LLP, in Wilmington, Delaware, recounts that the current
Severance Program extends only to employees that are terminated
between the periods of October 20, 2001 through March 31, 2002,
for an estimated amount of $5,700,000.
The Debtors estimate that about 504 employees will be terminated
in the period between October 20, 2001 and March 31, 2002.
These 504 employees will receive approximately $2,700,000 in
severance payments. However, the Debtors wish to continue the
headcount reduction of another 250 employees by June 30, 2002.
The expected severance cost for the additional employees is
$1,400,000.
Mr. Desgrosseilliers contends that the Debtors need to extend
the Severance Program to retain key employees further until all
or part of their assets are sold. (Polaroid Bankruptcy News,
Issue No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900)
POLAROID: Signs Definitive Agreement with One Equity Partners
-------------------------------------------------------------
Polaroid Corporation has entered into a definitive agreement for
the purchase of substantially all of its domestic assets and
businesses, and the common stock of its foreign subsidiaries by
an investor group led by One Equity Partners.
One Equity Partners is the private equity arm of Bank One
Corporation (NYSE: ONE) and manages $3.5 billion of investments
for Bank One, the sixth largest bank holding company in the U.S.
The transaction is subject to Bankruptcy Court approval and
other closing conditions, including the expiration or
termination of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act. It is anticipated that this
transaction could close early in the third quarter, allowing the
business to emerge from Chapter 11.
Gary T. DiCamillo, Polaroid chairman and chief executive
officer, said, "We continue to believe that the best way to
maximize enterprise value for our creditors is by selling the
company in its entirety as an independent, ongoing business to a
strong buyer.
"During the sales process, we will continue to conduct our day-
to-day operations as we have been. We continue to emphasize
liquidity and cash flow. Our employees have worked tirelessly to
meet our revenue and expense targets in the first quarter. We
expect today's positive development will help continue this
momentum.
"Finally, this sale would remove our business from Chapter 11
and mark a new beginning for Polaroid," said Mr. DiCamillo.
While no reorganization plan has been finalized, Polaroid
believes, as previously announced, it is unlikely that there
will be any recovery for the company's stockholders.
Polaroid received financial advice throughout this process from
Dresdner Kleinwort Wasserstein and Zolfo Cooper LLC, and legal
advice from Skadden, Arps, Slate, Meagher & Flom LLP.
Polaroid Corporation is the worldwide leader in instant imaging.
The company supplies instant photographic cameras and films;
digital imaging hardware, software and media; secure
identification systems; and sunglasses to markets worldwide.
Additional information about Polaroid is available on the
company's web site at www.polaroid.com.
PROVIDIAN FINANCIAL: March Net Credit Loss Rate Pegged at 17.64%
----------------------------------------------------------------
Providian Financial Corporation's managed net credit loss rate
for the month ended March 31, 2002 and its 30+ day managed
delinquency rate as of March 31, 2002 are presented in the table
below.
30+Day Managed
Managed Net Credit Loss Rate (1) Delinquency Rate (1)
------------------------------- --------------------
(Annualized) (Unaudited) (Unaudited)
17.64% 10.22%
(1) Managed loans include reported and securitized loans
and exclude SFAS No.133 market value adjustments and
activity from discontinued operations.
One of the top US credit card outfits, Providian Financial
issues mainly secured credit cards to more than 16 million
customers, most with spotty credit histories; it also issues
credit cards to those with better credit. Providian solicits new
customers via direct mail, phone, and online advertising. The
company also offers money market accounts, CDs, and home equity
loans; its GetSmart.com is an online lender and deposit
institution. High charge-offs have led to a management shake-up,
job cuts, and talk of putting the company up for sale;
meanwhile, regulators ordered the company to stop issuing new
subprime cards.
RADA ELECTRONIC: Fails To Comply With Nasdaq's Listing Standards
----------------------------------------------------------------
RADA Electronic Industries Ltd. (Nasdaq: RADIF) received a
Nasdaq Staff Determination on April 11, 2002 indicating that the
Company fails to comply with either the net tangible assets or
the stockholders' equity requirements for continued listing set
forth in Marketplace Rule 4450(a)(3), and that its securities
are, therefore, subject to delisting from The Nasdaq National
Market. The Company has requested a hearing before a Nasdaq
Qualifications Panel to review the Staff Determination. The
Company intends to seek a transfer of the listing of its
Ordinary Shares to the Nasdaq SmallCap Market. There can be no
assurance the Qualifications Panel will grant the Company's
request for the transfer.
RADA Electronic Industries Ltd. is an Israel based company
involved in the commercial and military aerospace industries.
The company specializes in Avionics, Data Acquisition Systems,
Ground Debriefing Stations and Automatic Test Equipment. RADA
employs 100 people, many of them are engineers. Most of the
employees work in the company's production plant in Beit She'an,
Israel.
ROMARCO MINERALS: Acquires 2.3 Mil Share Interest in Pocketop
-------------------------------------------------------------
Romarco Minerals Inc. (CDNX:R) has seen the April 17, 2002
release by Bradstone Equity Partners, Inc. announcing its
intention to make a cash offer to acquire 49.4% of the common
shares of Romarco at a price of $0.38 per share. Romarco has not
yet received a copy of the formal offer and has not had any
other contact with Bradstone in connection with this offer other
than a request made by Bradstone for a shareholders' list.
Romarco considers a detailed response at this point to be
premature. Once the formal offer is received, Romarco intends to
review it and to make a formal recommendation to shareholders in
accordance with applicable securities laws.
Romarco is the owner of 80% of the equity of Tullaree Capital
Inc. As previously announced, each of Romarco and Tullaree have
been conducting due diligence with respect to several
potentially viable business opportunities. On April 18, 2002,
Tullaree announced it has entered into an agreement to acquire a
47% interest in The Pocketop Computer Corporation. Romarco and
Tullaree and their respective officers and directors are at
arm's length with Pocketop and its officers and directors.
Romarco has signed an agreement with one of the principal
shareholders of Pocketop to acquire 2,300,000 common shares of
Pocketop in exchange for 2,700,000 common shares of Romarco and
$200,000 in cash, subject to requisite regulatory approval
including, without limitation, the approval of The Toronto Stock
Exchange and The TSX-Venture Exchange.
Prior to completion of the share acquisition transaction,
Romarco had a total of 26,959,322 issued and outstanding shares.
When the above-mentioned Pocketop transaction is consummated, an
additional 2,700,000 common shares of Romarco will be issued and
Romarco will have 29,659,322 issued and outstanding shares, on
an undiluted basis.
In addition, Romarco has undertaken due diligence on a number of
other opportunities and has retained advisors to assist them in
that regard and several such opportunities are presently in
various states of negotiation. Romarco intends to proceed with
these efforts.
As reported in the April 3, 2002 issue of the Troubled Company
Reporter, the common shares of Romarco Minerals Inc. (Symbol:R)
were suspended from trading on the Toronto Stock Exchange at the
close of business on March 28, 2002 for failure to meet the
continued listing requirements of the TSE.
SAFETY-KLEEN CORP.: Outsourcing DP & Accounts Payable to EDS
------------------------------------------------------------
Safety-Kleen Corporation and its related and subsidiary Debtors
ask Judge Walsh to authorize Safety-Kleen Services, Inc., to
enter into (i) a letter agreement with Electronic Data Systems
Corporation and EDS Information Services LLC; (ii) a Software
End-User License Agreement; and (iii) Master Services Agreement
with EDS and EIS. Under these agreements, EDS will assist the
Debtors in procuring and configuring SAP software. The Debtors
will acquire a non-exclusive perpetual license to use software,
other SAP proprietary information, and a third-party proprietary
database licensed through SAP, which will integrate the Debtors'
various financial, operational and reporting processes. EDS
will, among other things, provide professional services to
support certain of the Debtors' information technology
initiatives to assist the Debtors with the timely and
comprehensive integration of a new technology platform,
including the implementation of the SAP software.
As part of their overall plan to restructure their operations,
the Debtors have focused on several critical initiatives,
including identifying expensive and/or inefficient in-house
functions and services that could be provided or performed more
cost-effectively if outsourced to independent expert third
parties. The Debtors concluded that they needed to, among other
things, (i) reduce current and future operational costs to a
competitive, open-market level; (ii) improve their operational
processes and costs; (iii) achieve improved quality and service
levels; (iv) focus on the core competencies and strategic
planning and integration of new technologies and business
opportunities; and (v) obtain better technology management and
practices.
After analyzing capital costs and current and projected
operating expenses, the Debtors decided to (i) identify and
license software that would permit the Debtors to integrate
various financial, operational and reporting processes and (ii)
retain a qualified and experienced service provider to (a) help
install and configure the appropriate financial software and (b)
assist the Debtors going forward with the implementation of the
new integrated financial software applications as well as
various other related process improvements.
To implement the Debtors' restructuring initiatives, the Debtors
determined that they required a flexible, comprehensive
financial software package. After a review of various available
alternatives, the Debtors determined that the SAP software was
the best choice. Specifically, the comprehensive SAP software
package affords the Debtors flexibility now and in the future,
and will integrate the Debtors' various financial, operational
and reporting processes. At the same time, the Debtors were
discussing their technology needs with potential vendors, which
efforts culminated with the solicitation of various vendors for
a Request for Proposal for certain technology services. The
Debtors received bids from four vendors, including EDS. After an
examination of the proposed bids, the Debtors selected EDS
because it was, in their opinion, the potential provider with
the best expertise and capability to perform all the services
the Debtors were seeking. For instance, after extensive
research, the Debtors concluded that EDS had proven expertise in
SAP implementation and hand-held deployment, as well as superior
business process outsourcing capabilities, and it would be able
to efficiently manage and operate these and the other services
in a cost-efficient manner.
The Letter Agreement With EDS
Once the technology platform had been chosen and EDS had been
selected to assist with the implementation of the new technology
and the other process improvements, the Debtors entered into the
Letter Agreement with EDS to permit EDS to begin the work
necessary to prepare for the Debtors, migration to the SAP
platforms. Pursuant to the Letter Agreement, EDS agreed to
procure and license from SAP, under its own licensing agreement,
the SAP software and required third-party proprietary database,
pending this Court's approval of the Debtors entering into the
License Agreement directly with SAP. In so doing, EDS has made
it possible to begin the process of configuring and preparing
the SAP software and databases so that the Debtors will be in a
position to migrate to the new platform at the earliest possible
time. Absent EDS's agreement to proceed in this manner, the
Debtors, implementation of the badly needed process improvements
would have been substantially delayed.
Under the Letter Agreement, Safety-Kleen will reimburse EDS for
(i) a license fee of $2,890,440, (ii) a prorated maintenance fee
through December 31, 2002, in the amount of $475,524, (iii) a
reseller fee of $201,958 and (iv) certain taxes, charges,
insurance and fees.
The Licensing Agreement With SAP
Under the Licensing Agreement, SAP grants Safety-Kleen, among
other things, the use of its proprietary software, and Safety-
Kleen can, in turn, permit EDS to access the software for the
purpose of providing facility, systems, outsourcing,
development, implementation, processing, maintenance, and
support in connection with Safety-Kleen's operations.
The more significant terms and conditions of the Licensing
Agreement are:
(a) Pricing. Safety-Kleen shall pay:
(i) a license fee of $2,890,440 for the software and
third-party database licensed under the
Licensing Agreement, and
(ii) a reseller fee of $201,958. These fees are not
in addition to the fees under the Letter
Agreement, but rather represent fees that EDS
previously paid to SAP and for which EDS will be
reimbursed by Safety-Kleen.
Prorated maintenance fees through December 31, 2002 in the
amount of $475,524 have been previously paid by EDS; therefore,
Safety-Kleen must repay that amount to EDS and is entitled to
maintenance under the Licensing Agreement through December 31,
2002 without payment of additional maintenance fees to SAP.
(b) Term and Termination. The Licensing Agreement shall
terminate upon the earlier to occur of:
(i) sixty days after Safety-Kleen gives SAP written notice
of its desire to terminate;
(ii) sixty days after SAP gives Safety-Kleen notice of
Safety-Kleen's material breach of any provision of
the Licensing Agreement (other than its breach of
SAP's proprietary rights), unless Safety-Kleen has
cured such breach during such sixty-day period;
(iii) ten days after SAP gives Safety-Kleen notice of
Safety-Kleen's material breach of SAP's proprietary
rights (under the Licensing Agreement), unless
Safety-Kleen has cured such breach during such ten-
day period; or
(iv) immediately upon the occurrence of any of the
qualifying events, which exist as to Safety-Kleen and
remain uncured for a period of more than thirty days:
(A) entry of an order for relief under Chapter 11 of
the United States Code (with the exception that
the current chapter 11 is not deemed to be a
qualifying event) or the appointment of a
receiver or trustee in bankruptcy of Safety-
Kleen's business or property, or an action under
any state insolvency or similar law;
(B) the making of an assignment for the benefit of
creditors; or
(C) Safety-Kleen's inability to meet its obligations
under the Licensing Agreement when due.
The Services Agreement With EDS
The most significant terms and conditions of the Services
Agreement are:
(a) Services. Under the Services Agreement, EDS will
provide certain services to the Debtors, including, but not
limited, to:
(i) SAP Implementation;
(ii) SAP Hosting and Enterprise Application
management;
(iii) Service Delivery;
(iv) outsourcing of Accounts Payable; and
(v) Program Management.
(b) SAP Implementation. EDS will provide Safety-Kleen SAP
implementation services that will configure, develop and
implement the SAP modules, convert data and develop various
interfaces to Safety-Kleen's legacy and other systems. This SAP
implementation will consolidate a large number of existing
Safety-Kleen systems and will significantly reduce the
complexity of Safety-Kleen's current financial software
environment. The total amount of EDS professional services on
a time and material basis for the SAP implementation is
estimated to be $3,570,000.
(c) SAP Hosting and Enterprise Application Management. EDS
will host the SAP financial software during its implementation
and thereafter. In addition, EDS will provide a network
connection between the EDS servers operating Safety-Kleen's SAP
software and Safety-Kleen's facilities. Safety-Kleen estimates
that EDS will charge $110,000 per month to host and operate SAP
software on EDS' servers. The enterprise application management
services will include the day-to-day support of the SAP software
and related services located at EDS. In addition, EDS will
provide daily support which will include keeping the SAP system
operational, answering Safety-Kleen questions and performing
routine troubleshooting. For the initial implementation of the
enterprise application management, there will be a $345,000
start-up fixed fee. After the initial implementation, the
charges for these services are currently estimated to be
$200,000 per month for the year 2002 - 2003, and is expected to
drop in subsequent years.
(d) Service Delivery. EDS will assist Safety-Kleen in
developing a number of processes and solutions in order to
significantly enhance Safety-Kleen's service delivery to its
customers. The objective of the service delivery project is to
support Safety-Kleen in defining, designing and implementing
solutions to address a number of issues at the branch level,
including:
(i) hand-held devices;
(ii) route optimization;
(iii) enterprise application integration;
(iv) data warehouse/business intelligence;
(v) sales force optimization; and
(vi) training with respect to these solutions.
The goals of the above solutions will be to reduce paperwork,
improve Safety-Kleen's competitive advantage, increase accuracy
and control, optimize service capacity and eliminate manual
processes. The EDS services for defining, designing and
conducting a test pilot of the service delivery solutions at
certain field locations on a time and material basis are
currently estimated at $5,100,000 for a seven-month engagement.
The estimated hardware/software expense in order to implement
the solutions is $9,200,000. Safety-Kleen estimates that these
solutions will be deployed at approximately 170 Safety-Kleen
locations, which comprises the number of current branch sales
and services divisions field locations. The estimated EDS
professional services for the implementation of the service
delivery solutions at the remaining locations is estimated to be
$2,950,000.
(e) Outsourcing of Accounts Payable. Safety-Kleen expects
that EDS will assume responsibility for Safety-Kleen's accounts
payable operation and processing effective May 1, 2002. In this
regard, EDS will assist with the transitioning of accounts
payable functions to the SAP application and will continue to
run Safety-Kleen's accounts payable operation and processing
after the implementation of SAP. Safety-Kleen will be charged
for this service on a per unit basis. It is expected that the
outsourcing of Safety-Kleen's functions should save Safety-Kleen
a meaningful percentage of Safety-Kleen's current accounts
payable expense base.
(f) Program Management. EDS will provide Safety-Kleen a
significant amount of professional services, which require
integration across EDS services. Accordingly, EDS has agreed to
provide project and program management expertise for these
projects including, but not limited to, the SAP implementation,
the service delivery project, and the outsourcing initiative. It
will be EDS' responsibility to make every effort to ensure that
these projects remain on schedule. This project management is
currently expected to be provided at a monthly rate not to
exceed $85,000 and is expected to decrease over time. It is
anticipated that these services will be provided to Safety-Kleen
through December 31, 2002, for an aggregate amount not to exceed
$761,000.
(g) Term. The Services Agreement provides that the initial
term expires five years from the date the order approving the
Services Agreement and the applicable Schedules shall have
become a Final Order. Safety-Kleen has the right, at its sole
option and discretion, to extend the term for up to one year by
providing written notice to EDS no less than three months prior
to the Expiration Date.
(h) Other Expenses. Safety-Kleen will pay, or reimburse
EDS for, the reasonable travel and travel-related expenses and
other out-of-pocket expenses incurred by EDS in connection with
its performance of its obligations under the services Agreement
. Time spent by EDS personnel during travel will only be billed
at 50% of the actual time traveled. EDS will invoice Safety-
Kleen separately for these expenses, which invoice will be sent
by EDS to Safety-Kleen after EDS incurs such expense and will
contain an itemized listing of the applicable expenses.
(i) Additional Services. In the event that Safety-Kleen
needs the performance of functions materially different from,
and in addition to, the services to be provided pursuant to the
Services Agreement, such services will be priced in accordance
with the pricing metric under the Services Agreement, to the
extent one exists for the additional required services. However,
to the extent that a pricing metric does not exist under the
Services Agreement, then:
(1) if the additional services are estimated to cost
$1,000,000 or less and Safety-Kleen believes that EDS can
perform the additional services, Safety-Kleen shall request a
bid from EDS only, to be provided within 10 business days, which
bid will be accepted if, in Safety-Kleen's reasonable judgments,
it is competitive or
(2) if the additional services are estimated to cost
more than $1,000,000 and Safety-Kleen believes that EDS can
perform the additional services, then Safety-Kleen shall request
a bid from EDS to be provided within 30 days and, at the same
time, Safety-Kleen may also, but is not required to, solicit and
receive bids from reputable third parties, and Safety-Kleen
shall accept EDS's bid if (a) it is within the lesser of 10% or
$500,000 of the lowest bid, or (b) within 10 days of Safety-
Kleen's notification, EDS responds with a revised bid which
meets the criteria in subsection (a).
(j) Indemnities and Liabilities.
(1) Additional Indemnities. Pursuant to the Services
Agreement, EDS and Safety-Kleen each agrees to indemnify, defend
and hold harmless the other and its affiliates, officers,
directors, employees, agents, successors and assigns from any
and all Losses and threatened Losses arising from:
(a) the death or bodily injury of any agent,
employee, customer, business invitee, or business visitor or
other person caused by the other tortious conduct of the
indemnitor, its affiliates or its subcontractors and its
affiliates;
(b) any claim for personal injury or property
damage caused by a party or its affiliates, its employees,
agents or subcontractors; or (c) any fines or claims resulting
from a violation of any law, regulation or other governmental
obligation of a party.
(2) Liability. Each party's total liability to the
other, whether in contract or in tort, shall be limited to and
will not exceed in the aggregate an amount equal to $12,000,000.
Moreover, neither party shall be liable for any special,
punitive, indirect, incidental or consequential damage. These
limitations shall not apply with respect to Losses occasioned by
the intentional or willful misconduct, or gross negligence, of a
party, or Losses caused by claims that are the subject of
indemnification regarding taxes and infringement.
The Debtors assure Judge Walsh that they believe that Safety-
Kleen's entry into and performance of these agreements are
transactions in the ordinary course of the Debtors' businesses,
but that they present this Motion out of an abundance of
caution, and because the Agreements by their terms are not
effective until an Order is entered granting this Motion.
Further, the nature and extent of the Agreements are clearly
of tremendous importance to the Debtors, their creditors, and
other parties-in-interest in these chapter 11 cases.
Judge Walsh agrees with the Debtor and promptly signs an Order
granting this Motion. (Safety-Kleen Bankruptcy News, Issue No.
31; Bankruptcy Creditors' Service, Inc., 609/392-0900)
SOFTLOCK.COM: Files Chapter 11 Petition in Massachusetts
--------------------------------------------------------
Softlock.com circulated this letter to its stakeholders as it
delivered a chapter 11 petition to the U.S. Bankruptcy Court for
the District of Massachusetts:
April 18, 2002
An Open Letter to Our Stakeholders,
I'm writing to update you on the status of SoftLock/Digital
Goods and to tell you about our plans going forward.
As you know, our mission since May 2001 has been to
liquidate the company's assets (primarily our patent portfolio)
and return as much value as possible to our stakeholders--
creditors, preferred stockholders and common stockholders.
Digital Goods' liabilities owed to creditors is approximately
$1,800,000. With minimal liquid assets, SoftLock would need to
create liquidity from the patent portfolio of at least 1.8M to
make our creditors whole. In light of the liquidation
preference to the preferred stockholders, we would need to raise
more than approximately $20,000,000 over the $1,800,000 in order
for the common stockholders to achieve any return.
A patent sale of that magnitude was in our view unlikely in
May 2001, and is even more so today. However, in August 2001
Digital Goods did receive independent appraisals and indications
from prospects that suggested that a cash sale of $2M or more
was a possibility. As a result, Digital Goods made a concerted
and diligent effort to sell or license or otherwise create value
from the patent portfolio. Unfortunately, the worsening economy
in general, the virtual collapse of our market sector in
particular, and the repercussions September 11 all created a
difficult market environment for "new economy" patents.
Despite diligent efforts, Digital Goods failed to obtain
any offers that would come close to making its creditors whole,
let alone return funds to shareholders. Although there
continues to be substantial interest in the Digital Goods patent
portfolio, and we still believe that the Digital Goods' patents
have great potential value, Digital Goods' current mode of
operation is not sustainable.
Accordingly, we believe that a formal liquidation and
dissolution of Digital Goods is now both possible and advisable.
Although we could do this by simply selling all assets to the
highest bidder, we now believe this will not bring significant
benefit to our stakeholders. Accordingly, Digital Goods on
April 16, 2002 voluntarily filed a petition under Chapter 11 of
the United States Bankruptcy Code in the United States
Bankruptcy Court, District of Massachusetts, Case Number 02-
42381-HJB ("Proceeding").
As part of the Proceeding, Digital Goods plans, subject to
approval by the Bankruptcy Court, to transfer the company's
assets into a Creditor's Trust which would provide a "safe
haven" for the patents until a creditors' trustee is able to
sell or license them should market conditions improve. If no
such transaction occurs, the outcome is not expected to be
materially worse than if Digital Goods were to liquidate its
assets today. If a transaction does occur, the proceeds would
be distributed among Digital Goods' creditors and stakeholders
pursuant to the provisions of the Bankruptcy Code and as
approved by the Bankruptcy Court. We plan to request that a
portion of the net proceeds of any transactions (after costs of
administration and repayment of creditors) be paid to the common
stockholders as well as the preferred shareholders, even if the
net proceeds are insufficient to satisfy the preferred stock
liquidation preference. I believe this arrangement benefits all
stakeholders because, by ensuring that common stockholders
receive some of the net proceeds, we increase the probability
that common stockholders would support rather than interfere
with such a transaction.
Regardless whether a transaction eventually occurs, I also
hope this gesture of support to common stockholders will allow
all parties to feel that their long and laudable support for an
innovative and pioneering company ended with dignity and good
will. It will at least be a moral victory if Digital Goods'
stakeholders can retain nominal recognition and some hope for
the future in recognition of their financial and psychological
investment in an idea that, in retrospect, has proven to be well
ahead of its time. I know that I personally have appreciated
the support all of you have given our endeavors, and in the
context of a reorganization like this, I would remain
comfortable representing our shared interests in an emerging
digital economy.
Looking forward to better days, I remain,
Yours truly,
/s/ Jonathan Schull, Ph.D.
Founder and President
SoftLock.com d/b/a Digital Goods
SOFTLOCK.COM INC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: SOFTLOCK.COM, INC.
dba Digital Goods
c/o Jonathan Schull
54 Lakeside Ave.
Hudson, Massachusetts 02174
Bankruptcy Case No.: 02-42381
Type of Business: The Debtor is into Software Development.
Chapter 11 Petition Date: April 16, 2002
Court: District of Massachusetts (Worcester)
Judge: Henry J. Boroff
Debtors' Counsel: Pamela A. Harbeson, Esq.
Looney & Grossman
101 Arch Street
Boston, Massachusetts 02110
617-951-2800
Total Assets: $581,166
Total Debts: $1,781,689
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
TLP Leasing Programs, Inc. $607,487
77 Franklin St 4th Floor
Boston, Massachusetts 02110
Bank Vest Capital Corp. $188,464
Advanta Leasing Services $102,626
Arthur Andersen $93,335
Aztec Consulting Group, Inc. $89,000
Unicapital BSB Leasing $67,496
Yellow Brix $64,800
Heller Financial $63,179
Akamai Technologies, Inc. Collections $54,383
Patriot Commercial Leasing $53,645
Deloitte & Touche $40,494
Merill Corporation $39,066
Exodus Communications, Inc. $25,559
Navisite, Inc. $24,676
BeFree, Inc. $23,299
Delaware Secretary of State $21,000
E-Dialog, Inc. $15,184
Shipman & Goodwin LLP $14,856
A.I. Credit Corp. $13,842
Winter Wyman & Company $13,750
SUMMIT CBO I: S&P Places BB- Class B Notes Rating on Watch Neg.
---------------------------------------------------------------
Standard & Poor's placed its ratings on the class A and B notes
issued by Summit CBO I Ltd. and co-issued by Summit CBO I
Funding Corp. on CreditWatch with negative implications.
The CreditWatch placements reflect the continuing deterioration
in the collateral pool's credit quality and an increase in its
pool default rate since the ratings were lowered on October 12,
2001. The rating on the class A notes was previously lowered to
double-'A'-minus from triple-'A' on October 12, 2001.
Additionally, the rating on the class B notes was previously
lowered to triple-'B' from double-'A'-minus on September 10,
2001, and was lowered again to double-'B'-plus from triple-'B'
on October 12, 2001.
According to the February 28, 2002 trustee report, a total of
$52.3 million (or approximately 17.4% of the total collateral
pool) is in default. In addition, the issuer credit ratings on
two bonds (approximately $4.85 million) that are listed as
performing assets on the February 2002 trustee report were
lowered to 'SD' or 'D' on March 28, 2002 and April 2, 2002,
respectively. Since the closing of the transaction,
approximately $45.6 million of defaulted securities (or
approximately 13.1% of the closing portfolio) have been sold or
exchanged at a weighted average recovery rate of approximately
28.3%. Furthermore, the transaction experienced additional par
loss due to the sale of several credit risk securities at low
price levels.
The current performing pool, including the principal cash, has
an aggregate par value of $245 million, compared to the ramp-up
completion date's required portfolio collateral amount of $348
million. In contrast, only $36.2 million of the principal amount
of the liability has been paid down since the transaction's
inception.
The obligors with ratings in the triple-'C' and double-'C' range
comprise more than 27.5% of the performing collateral pool.
Furthermore, approximately 15.7% of the obligors in the
performing collateral pool are currently on CreditWatch
negative, of which 6.8% are rated in the triple-'C' and double-
'C' range.
Due to the high default rate, all of the overcollateralization
tests (classes A, B, C, and D) are currently in violation. The
class A and B overcollateralization test (currently 110.6%
versus the required minimum of 120%) and the class C
overcollateralization test (currently 94.7% versus the required
minimum of 107%) have been out of compliance since January 2001.
The class D overcollateralization test (currently 87.4% versus
the required minimum of 103%) has been failing since August
2000. On the November 2000, May 2001, and November 2001 payment
dates, approximately $36.2 million in principal was paid to the
class A noteholders because of the mandatory redemptions
triggered by the overcollateralization test failures. However,
the improvement to the overcollateralization ratios from the
redemptions was not sufficient to bring the tests back into
compliance.
In the coming weeks, Standard & Poor's will perform cash flow
analyses, and will review the results from the cash flow model
runs and Standard & Poor's default model to evaluate the effect
of the credit deterioration on the current ratings for the class
A and B notes.
Ratings Placed On Creditwatch Negative
Summit CBO I Ltd./Summit CBO I Funding Corp.
Rating
Class To From
A AA-/Watch Neg AA-
B BB+/Watch Neg BB+
SUPERVALU INC: Sets Shareholders' Meeting on May 30 at Missouri
---------------------------------------------------------------
The Annual Meeting of Stockholders of Supervalu Inc. will be
held on Thursday, May 30, 2002, at 10:30 A.M., local time, at
Save-A-Lot, Ltd., 100 Corporate Office Drive, Earth City,
Missouri 63045 for the following purposes:
1) to elect three directors;
2) to vote on an amendment to Supervalu's Restated
Certificate of Incorporation increasing the authorized common
stock of Supervalu from 200 million shares to 400 million
shares;
3) to vote on approval of the Supervalu Inc. 2002 Stock Plan;
4) to vote on approval of the Supervalu Inc. Long-Term
Incentive Plan;
5) to ratify the appointment of KPMG LLP as independent
auditors; and
6) to transact such other business as may properly come
before the meeting.
The Board of Directors has fixed the close of business on April
1, 2002, as the record date for the purpose of determining
stockholders who are entitled to notice of and to vote at the
meeting.
SUPERVALU is a leading supermarket retailer holding the nation's
largest position in the extreme value grocery retailing segment
and is the nation's most successful food distributor to grocery
retailers.
SUPERVALU, as of September 08, 2001, reports a working capital
deficit of about $107 million.
US AIRWAYS: Records $269 Million First Quarter Net Loss
-------------------------------------------------------
US Airways Group reported a net loss of $269 million for the
first quarter of 2002 on revenues of $1.7 billion, compared to a
net loss of $171 million on revenues of $2.2 billion for the
same period in 2001. On a diluted per-share basis, the net loss
in the first quarter amounted to $3.97 versus $2.55 last year.
Excluding accounting changes in both years and an unusual item
in 2001, the loss for the first quarter was $286 million, or
$4.22 per diluted share, compared to $164 million, or $2.45 per
diluted share, for the first quarter of 2001.
"While the industry finds itself in extraordinary times, there
is significant long-term potential at US Airways, with its
strong East Coast franchise, superior product and dedicated
employees who produce an outstanding operation. However, the
results we are announcing today are not only extremely
disappointing, they are unacceptable," said US Airways President
and CEO David Siegel.
"Our losses reflect a weak economic environment, the drop in
travel, especially by business customers, following the events
of last September, and increased competition by low-cost
carriers and regional jet operators. To be successful, US
Airways must restructure to lower its unit costs, optimize the
revenue potential of its East Coast presence and improve its
overall balance sheet position," Siegel said.
"To implement our restructuring plan, it is likely US Airways
will file an application with the federal Air Transportation
Stabilization Board for a government-guaranteed loan," Siegel
said. The company understands that if such an application is
made, it must be formally filed with the ATSB on or before June
28.
"Recognizing the significant challenges US Airways faces, the
company will be asking all key stakeholders to participate in
this restructuring process," he said.
Financial and Operating Performance
Operating revenues for the quarter were $1.7 billion, down 23.7
percent from the first quarter of 2001. Operating expenses were
$2.1 billion, down 15.0 percent, excluding the unusual item
described below. Pre-tax loss of $435 million for the 2002
first quarter compared to a pre-tax loss of $248 million last
year excluding the unusual item.
Results for the first quarter include a tax benefit of $149
million. Although US Airways had recorded a full valuation
allowance in 2001, as a result of recent legislation, the
company has now realized additional tax benefits. The first
quarter 2002 results also include a $17 million credit related
to a change in accounting policy for engine maintenance at one
of the Company's Express subsidiaries. The first quarter of
2001 included a $22 million ($14 million after-tax) impairment
charge related to the early retirement of certain B737-200
aircraft and a $7 million after-tax credit resulting from US
Airways' accounting change to adopt SFAS 133 - Accounting for
Derivative Instruments and Hedging Activities.
Total available seat miles declined 18.9 percent year over year,
reflecting US Airways' capacity reductions following the events
of last September. US Airways carried 11.8 million passengers
in the 2002 first quarter, a decline of 16.7 percent compared to
the 14.2 million carried the previous year. Revenue passenger
miles declined 16.0 percent year over year, while the passenger
load factor increased by 2.3 percentage points to 68.5 percent
versus 66.2 percent last year. Passenger revenue per available
seat mile was 9.35 cents, a decrease of 11.0 percent compared to
2001, while the cost per available seat mile was 12.91 cents, an
increase of 1.0 percent over last year. Aviation fuel cost was
68.31 cents per gallon, a decrease of 27.3 percent compared to
2001.
US Airways Group's cash position as of March 31, 2002, was $561
million. "We view the company's cash position as stable," said
Neal Cohen, US Airways executive vice president and chief
financial officer. "We are entering a period of the year when
we expect cash to accumulate, including the one-time benefit of
a tax refund."
Recent Developments
-- Recognition by the Airline Quality Rating, a national study
conducted by two mid-western universities, as the top-ranked
network carrier in 2001 and second overall on the key
performance measurements of on-time arrivals, baggage handling,
customer complaints and denied boardings.
-- Significant improvements in US Airways' operating performance
in the 2002 first quarter when compared to the previous year.
Specifically, on-time arrivals and completion factor were up,
while cancellations were down significantly.
-- A new senior management team in the key areas of finance,
marketing and planning, labor and the general counsel's office,
led by new President and CEO David Siegel.
-- Enhancements in customer service, including more security
checkpoint lanes and electronic check-in kiosks at key airports,
and a new regional aircraft terminal at the Charlotte hub.
-- Significant structural changes to the network since late last
year. The MetroJet brand was eliminated, as was most other non-
hub flying. Most fleet decisions made then have been implemented
with the retirement of the older, less fuel-efficient DC-9, MD-
80, F-100 and Boeing 737-200 fleets and the subsequent sale of
97 of these surplus aircraft.
-- Restoration of service at Ronald Reagan Washington National
Airport to 76 percent of its pre-September 11 level by the end
of the first quarter and to 83 percent in June.
-- Resumption of most transatlantic service, where US Airways
had the largest year-over-year increase in load factor among
U.S. flag carriers in the first quarter, up 7.2 percentage
points to 74.5 percent.
DebtTraders reports that US Airways Inc.'s 10.375% bonds due
2013 (USAIR3) trade between 81.5 and 83.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=USAIR3for
real-time bond pricing.
VANTAGEMED: Seeks Review Of Nasdaq Delisting Determination
----------------------------------------------------------
VantageMed Corp. (Nasdaq:VMDCE) announced that in accordance
with Nasdaq Stock Market rules, the ticker symbol for the
Company's common stock has been changed from VMDC to VMDCE as of
the opening of business on April 18, 2002. The additional fifth
character was added by Nasdaq due to VantageMed's delay in the
filing of its annual report on Form 10-K for the fiscal year
ended Dec. 31, 2001. VantageMed has been delayed in the filing
of its Form 10-K as a result of the resignation of its auditors,
Arthur Andersen, on Feb. 8, 2002. Because of this resignation,
VantageMed has been unable to obtain the audit of its financial
statements as required disclosure for its Form 10-K annual
report. The change in the ticker symbol is based upon
Marketplace Rule 4310c(14) which requires timely filing of all
annual and quarterly reports with the Securities and Exchange
Commission. Grant Thornton has now been engaged by VantageMed to
complete the audit of its financial statements, and VantageMed
will file its Form 10-K annual report for fiscal year 2001 as
soon as practicable.
In addition, as a result of the delay in the filing of the Form
10-K annual report, the Company received a notice from Nasdaq
indicating that its securities will be delisted at the opening
of business on April 24, 2002. The Company intends to request a
hearing before the Nasdaq Listing Qualifications Panel to review
the Nasdaq delisting determination. There can be no assurance
that the Panel will grant VantageMed's request for continued
listing. However, pending the outcome of this hearing,
VantageMed's securities will continue to be listed on Nasdaq
under the ticker symbol, VMDCE.
VantageMed is a provider of healthcare information systems and
services distributed to over 11,000 customer sites through a
national network of regional offices. Our suite of software
products and services automates administrative, financial,
clinical and management functions for physicians, dentists, and
other healthcare providers and provider organizations.
VECTOUR: Court Okays Golden Touch Sale to Non-Debtor Affiliate
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware put its
stamp of approval on VecTour Inc. and its debtor-affiliates'
motion to sell substantially all of Golden Touch Transportation,
Inc.'s assets, free and clear of liens, encumbrances, and
interests, to Golden Touch Transportation of NY, Inc. for
approximately $3,250,000.
The Seller, Golden Touch Transportation, Inc., operates a ground
transportation service company in metropolitan New York, New
Jersey and Connecticut, principally originating from and going
to John F. Kennedy International Airport, LaGuardia Airport and
Newark International Airport.
The Asset Purchase Agreement provides for the sale of the Golden
Touch Debtor's:
a) Vehicles, including buses;
b) Inventory, permits, licenses, and other personal
property;
c) Leases and executory contracts;
d) Miscellaneous assets, including telephone and fax
numbers, e-mail addresses, and books and records,
customer lists, trademarks, trade names, service marks,
prepaid expenses and deposits;
e) Accounts receivable, except for intercompany
receivables;
VecTour, Inc. is a leading nationwide provider of ground
transportation for sightseeing, tour, transit, specialized
transportation, entertainers on tour, airport transportation and
charter services. The Company filed for chapter 11 protection on
October 16, 2001. David B. Stratton, Esq. and David M. Fournier,
Esq. at Pepper Hamilton LLP represent the Debtors in their
restructuring effort.
VIZACOM INC: Reports $3.6MM Working Capital Deficit at Year-End
---------------------------------------------------------------
Vizacom Inc. (NASDAQ:VIZY) has announced its financial results
for the year ended December 31, 2001.
The Company improved its net loss to $6,814,000, or a loss of
$3.20 per share in 2001, from a loss of $19,090,000, or a loss
of $16.52 per share in 2000. The Company showed a decrease in
net sales of 9.2% to $12,220,000 from $13,458,000 in 2000.
The Company's improvement in net loss is primarily attributable
to the divestiture of its international software subsidiary,
Serif Europe, in March 2001, as well as the operations of its
Vizy Interactive London internet subsidiary in early 2001. These
discontinued operations reported income of $1,613,000, inclusive
of a $1,473,000 gain on disposition of Serif Europe, compared to
a loss of $10,052,000 in 2000. Additionally, the Company
decreased its selling, general, and administrative expenses by
over $1 million, primarily as a result of the costs of running a
domestic corporation. The Company utilized $555,000 of cash in
2001. Operating activities and investing activities utilized
cash of $1,058,000 and $235,000, respectively, which was offset
by $700,000 in financing, primarily from a bridge loan the
Company received from SpaceLogix prior to the Company's December
28, 2001 merger.
Commenting on the results of operations, Alan W. Schoenbart, CFO
stated: "During 2001, Vizacom, like many of its industry
competitors, found it difficult to obtain the capital needed to
properly finance its existing business. As a result, our PWR
subsidiary, which traditionally generates the bulk of our
revenues, frequently found itself unable to secure the necessary
working capital to finance its customers' orders. These
difficulties decreased the number and quality of opportunities
through which we could generate revenues. However, in 2001,
through our restructuring activities, we reduced our operating
cash burn rate by approximately $400,000 annually. We also added
new, high-margin service capabilities to our portfolio of
technology product and service offerings through the acquisition
of SpaceLogix in December 2001. Additionally, since December
2001, we have received $900,000 of debt and equity financing. We
believe that the above factors will enhance our overall business
operations and lead to improved results in 2002.
For the year ended December 31 2001, the company records a
working capital deficit of $3,657,770.
About Vizacom
Vizacom Inc. is a provider of comprehensive information
technology product and service solutions. Vizacom develops and
provides to leading global and domestic companies a range of
solutions, including: multimedia products; systems and network
development and integration; state-of-the-art managed and co-
location services; and data security solutions. Vizacom attracts
top, established companies as clients, including: Martha Stewart
Living, Verizon Communications, Sony Music, Consolidated Edison
Communications and Morgan Stanley's Metronexus. Visit
http://www.vizacom.com.
WASTE SYSTEMS: Secures OK to Stretch Plan Exclusivity to July 31
----------------------------------------------------------------
Waste Systems International, Inc. and its debtor-affiliates
sought and obtained approval from the U.S. Bankruptcy Court for
the District of Delaware of a fifth extension of their exclusive
period to file a plan of reorganization. After the Debtors, the
Creditors and B III Capital Partners agreed to fund a consensual
plan of reorganization, the Court stretched the Debtors' Plan
Exclusivity Period through July 31, 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.
WESTERN RESOURCES: Fitch Downgrades Ratings To Low-B Levels
-----------------------------------------------------------
Fitch Ratings has lowered the ratings of Western Resources (WR)
senior unsecured debt and preferred stock to 'BB-' and 'B+',
respectively, from 'BB' and 'BB-'. The trust preferred
securities of Western Resources Capital Trust I and II are also
lowered to 'B+' from 'BB-'. The company's senior secured debt
rating is affirmed at 'BB+', and all securities remain on Rating
Watch Evolving. The revised ratings better reflect Fitch's
notching policy for securities rated below investment grade. The
Rating Watch Evolving reflects the need to refinance $1.6
billion of debt from August 2002 through December 2003, and the
uncertain outlook for WR's pending restructuring plan, which if
implemented, could result in meaningful improvement to WR's
financial condition. The company's plan, filed with the Kansas
Corporation Commission (KCC) in November 2001 and updated in
January 2002, proposes to divest all or part of WR's unregulated
subsidiary, Westar Industries (WI), and/or a public offering of
WR common stock, using the proceeds to repay WR debt. The
financial plan targets a $1.2 billion reduction of WR's roughly
$3 billion of estimated year-end 2002 consolidated debt
(excluding non-recourse debt, and including off-balance sheet
debt). Since the plan requires regulatory approval, and is
subject to market risk and pricing contingencies, WR's ability
to execute is uncertain. WR's ratings were originally placed on
watch evolving in November 2000, reflecting the anticipated
merger agreement between WR and PNM Resources that was
terminated in January 2002.
Under the company's financial plan, WR would sell, through a
rights offering, up to a 19.9% ownership interest in Westar
Industries to WR shareholders and sell its remaining interest in
WI to the public. WR will only under take the public offering if
proceeds are 15% above the amount required to reduce WR's total
debt to $1.8 billion or below. Achieving the targeted price
and/or receiving regulatory approval is far from assured, given
the unfriendly regulatory environment in Kansas, and is
ultimately subject to execution and market risk. The KCC Staff
and intervenor testimony in the proceeding is scheduled for
April 19, 2002 with hearings to commence May 31, 2002. The major
investments of WR's unregulated subsidiary include: 1) an 85%
ownership interest in Protections One; 2) a 100% ownership
interest in Protection One Europe; 3) a 45% ownership interest
in Oneok; 4) a 17% ownership interest in Western Resources; and
5) a relatively small interest in power plants in China and
Turkey. Under the amended financial plan, management estimates
that WI's ownership in WR will increase to roughly 25%.
On April 8, 2002, WR filed an amended form 13-d with the SEC,
indicating that it is exploring its options, including a
possible sale, with regard its Oneok (OKE) investment. While the
divestiture of WR's entire preferred and common stock investment
in OKE is unlikely in the near-to-intermediate term, the sale of
WR's common stock investment would make economic sense at
current price levels. Over the near-to-intermediate term, WR has
indicated asset sales at WI (including OKE common stock) could
raise approximately $180-200 million, which would be used to
reduce debt. The debt pay down resulting from these asset sales
would be incremental to our current leverage projections.
The rapid expansion of the monitored security business in the
1990s is the primary cause of WR's currently weak financial
condition, which includes a high debt burden and relatively weak
interest coverage ratios. Led by a new management team,
Protection One has implemented a strategy to improve operating
fundamentals. The strategy is designed to reduce customer
acquisition costs and create new product distribution channels.
The strategy, which relies on its internal sales force and
affinity based product distribution channels, such as its
relationship with BellSouth, has resulted in the dismantling of
its high-cost dealer program and reduced up front cash outlays.
The shift to internal-and affinity-based product distribution
channels should ultimately result in lower rates of attrition
and improvement in revenue and free cash flow. While the
company's efforts to create new product distribution channels
are encouraging, the success of these initiatives is uncertain
given the competitive nature of the monitored security business.
Based on management projections, cash and earnings coverage
ratios bottomed out in 2001, with modest improvement expected in
2002 and beyond, even without implementation of the financial
plan. In 2002, WR's consolidated EBIT, EBITDA and cash flow
coverage ratios are expected to approximate 1.2 times (x), 2.2x,
and 2.2x, respectively, and incorporate improvement in utility
EBITDA to $525 million from $473 million in 2001. The projected
ratios remain weak relative to the rating category, however, and
assume improved operating performance at the electric utility
based, in part, on a more aggressive off-system sales strategy.
In February 2002, WR announced that it will book a first quarter
non-cash charge to earnings of approximately $654 million after
tax, reflecting changed accounting treatment for goodwill and
customer accounts at its monitored security business. As a
result of the write-down, we expect WR's consolidated debt as a
percentage of total capital (including short-term and off-
balance sheet obligations, but excluding non-recourse debt at
Protection One) to rise to 71% at the end of 2002 from 61% at
the end of 2001.
WESTPOINT STEVENS: $773MM Balance Sheet Insolvency at Mar. 31
-------------------------------------------------------------
WestPoint Stevens Inc. (NYSE: WXS) --
http://www.westpointstevens.com-- reported results for the
first quarter ended Mar. 31, 2002.
The Company's net sales for the first quarter of 2002 increased
4% to $435.1 million compared with $418.6 million a year ago.
Sales growth was driven by strong double-digit increases in
accessory products, more than offsetting a modest decline in
sheets and towels and WestPoint Stevens' retail stores.
Net income for the first quarter of 2002 was $2.0 million or
$0.04 per diluted share compared with a loss, in the first
quarter of 2001, of $0.10 per diluted share before charges
associated with the Eight-Point Plan. This was ahead of the
recent First Call consensus EPS estimate of a loss of $0.05.
The Company recorded bad debt expense of $2.6 million net of
taxes in the first quarter of 2002 related to the Kmart
Corporation bankruptcy filing.
Last year, during the first quarter of 2001, WestPoint Stevens
recognized a $5.8 million charge net of taxes for the
implementation of its Eight-Point Plan. Including this charge,
net income for the first quarter of 2001 was a loss of $10.9
million or $0.22 per diluted share.
Operating earnings for the first quarter of 2002 were $38.9
million or 8.9% of sales compared with $29.6 million or 7.1% of
sales for the same period in 2001, before charges associated
with the Eight-Point Plan of $9.0 million. The improved first-
quarter results reflected the impact in 2002 of decreased raw
material costs, favorable product mix and increased production
efficiencies resulting from the implementation of the Eight-
Point Plan.
Holcombe T. Green, Jr., Chairman and CEO of WestPoint Stevens,
commented, "We are extremely pleased that we were able to
increase sales in the first quarter despite the effects of
Kmart's recent downsizing. Clearly our focus on key growth
accounts and our expanding emphasis on accessory products are
paying off. Furthermore, we continued to control inventories
and ran our plants full. Most importantly, we are comfortably
in compliance with all financial covenants and continue to have
substantial liquidity."
M. L. "Chip" Fontenot, WestPoint Stevens President and COO,
added, "Our first-quarter results are tangible proof that our
strategic initiatives, begun almost two years ago, are
positioning WestPoint Stevens to increase market share through
product innovation, lower costs through a combination of
internal initiatives and sourcing, and start returning this
Company to a more sound financial position. Of equal importance
is the fact that our success has been a team effort and is due
to efforts across all functions of WestPoint Stevens."
For 2002 the Company remains comfortable with its prior EPS
guidance of $0.45-$0.50 and continues to expect sales for 2002
to increase approximately 4% from 2001, even after accounting
for expected sales decline from Kmart.
WestPoint Stevens Inc. is the nation's premier home fashions
consumer products marketing company, with a wide range of bed
linens, towels, blankets, comforters and accessories marketed
under the well-known brand names of GRAND PATRICIAN, PATRICIAN,
MARTEX, ATELIER MARTEX, UTICA, STEVENS, LADY PEPPERELL, VELLUX
and CHATHAM, and under licensed brands including RALPH LAUREN
HOME, DISNEY HOME, SANDERSON, DESIGNERS GUILD, GLYNDA TURLEY,
MARY-KATE AND ASHLEY, SIMMONS BEAUTYREST and DR. SCHOLL'S.
WestPoint Stevens is also a manufacturer of the MARTHA STEWART
and JOE BOXER bed and bath lines. WestPoint Stevens can be
found on the World Wide Web at http://www.westpointstevens.com
As of March 31, 2002, WestPoint Stevens reports a stockholders'
equity deficit of $773,510,000.
WINSTAR: Wants Money.net to Pay $1.08 Mil for Services Rendered
---------------------------------------------------------------
Winstar Holdings Inc. commenced an adversary proceeding against
the New York-based Money.net with the idea of compelling the
company to pay amounts totaling $1,089,600 as well as all
legally permissible interest, related attorneys' fees, costs and
disbursements.
Money.net's payables are for services provided by the Debtors
and are reflected in these invoices:
No. Date Amount
------ ---------------- ----------
553206 December 1, 2000 $1,101,000
590937 January 1, 2001 302,333
633013 February 1, 2001 131,800
670562 March 1, 2001 65,900
713925 April 1, 2001 65,900
753191 May 1, 2001 65,900
797031 June 1, 2001 65,900
----------
Total $1,798,733
Money.net has only paid $709,133 of the total amount required.
William K. Harrington, Esq., Duane Morris LLP in Wilmington,
Delaware, urges the Court to render judgment in favor of Winstar
since Money.net never objected to the amounts when payment was
demanded. (Winstar Bankruptcy News, Issue No. 26; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
XEROX: S&P Puts Low-B Ratings on Watch Over Renegotiation Deal
--------------------------------------------------------------
On April 18, 2002, Standard & Poor's placed its 'BB' credit
ratings on Xerox Corp. on CreditWatch with negative
implications, reflecting Standard & Poor's concerns about delays
in Xerox's renegotiation of its $7 billion revolving credit
agreement due October 2002. Although Stamford, Connecticut-based
Xerox believes it has made "significant progress" in discussions
with its bank group, if the negotiations are not completed, a
default or bankruptcy filing by Xerox is possible.
The current ratings assume the successful completion of the bank
facility renegotiation; however, the existing agreement now
matures in approximately six months. Xerox has about $16 billion
in debt outstanding.
The ratings reflect Xerox's good position in its core document-
processing business, a sizable recurring revenue base, and a
broad product lineup, offset by highly competitive industry
conditions and a declining revenue base. The ratings also
reflect Standard & Poor's expectation of substantial, ongoing
debt reductions.
Xerox has made progress in executing its turnaround program,
including asset sales totaling more than $2 billion, significant
cost-reduction and cash-conservation actions, and agreements to
transition the majority of Xerox's equipment-financing business
to third parties. However, economic weakness and diminished
capital spending levels have reduced Xerox' prospects for
significant improvement in operating earnings and debt-
protection measures in the near term.
In addition, Xerox recently concluded a settlement with the SEC
related to accounting practices that had been under
investigation since June 2000. While Xerox's restatement of
financials will not have any impact on the cash that Xerox has
received from its leases, the restatements involve a range of
earnings restatement and disclosure practices that go
significantly beyond the acceleration of leasing revenues.
Standard & Poor's will monitor the progress of the bank
agreement negotiations before reviewing the ratings.
BOND PRICING: For the Week of April 22 - 26, 2002
-------------------------------------------------
Following are indicated prices for selected issues:
Amresco 9 7/8 '05 23 - 25(f)
AES 9 1/2 '09 77 - 79
AMR 9 '12 96 - 97
Asia Pulp & Paper 11 3/4 '05 25 - 26(f)
Bethlehem Steel 10 3/8 '03 11 - 12(f)
Enron 9 5/8 '03 11 - 12(f)
Global Crossing 9 1/8 '04 2 - 3(f)
Level III 9 1/8 '04 46 - 48
Kmart 9 3/8 '06 50 - 52(f)
NWA 8.70 '07 90 - 92
Owens Corning 7 1/2 '05 40 - 41(f)
Revlon 8 5/8 '08 44 - 46
Trump AC 11 1/4 '07 75 - 77
USG 9 1/4 '01 80 - 82(f)
Westpoint Stevens 7 3/4 '05 55 - 57
Xerox 7.15 '04 94 - 95
*********
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For copies of court documents filed in the District of Delaware,
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*********
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