/raid1/www/Hosts/bankrupt/TCR_Public/020620.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, June 20, 2002, Vol. 6, No. 121
Headlines
360NETWORKS: Seeks Lease Decision Period Extension to Sept. 23
ANC RENTAL: Consolidating Operations at Greensboro Airport
AT&T CANADA: Will Begin Debt Restructuring Discussions Soon
ACTUANT CORP: May 31 Balance Sheet Upside-Down by $49 Million
ADELPHIA BUSINESS: Cumberland Wants Prompt Decision on Contracts
ADELPHIA BUSINESS: Long Haul L.P.'s Chapter 11 Case Summary
ADELPHIA BUSINESS: Jacksonville Inc.'s Chapter 11 Case Summary
ADELPHIA BUSINESS: Investment East LLC's Chap. 11 Case Summary
ADELPHIA BUSINESS: Investment LLC's Chapter 11 Case Summary
ADELPHIA BUSINESS: International LLC's Chapter 11 Case Summary
ADELPHIA BUSINESS: Louisiana LLC's Chapter 11 Case Summary
ADELPHIA BUSINESS: Louisiana Inc.'s Chapter 11 Case Summary
ADELPHIA BUSINESS: Nashville LP's Chapter 11 Case Summary
ADELPHIA BUSINESS: South Carolina Inc.'s Chapter 11 Case Summary
ADELPHIA BUSINESS: Virginia LLC's Chapter 11 Case Summary
ADVANCED GAMING: PowerHouse Management Acquires 56% Equity Stake
ALLEGIANCE TELECOM: Acquires WorldCom's CPE Assets for $30 Mill.
AMES DEPARTMENT: Amends DIP Pact to Permit Kimco Sale-Leaseback
AMES DEPARTMENT: Receives Court Approval for New DIP Financing
APPLICA INC: S&P Raises Senior Secured Bank Loan Rating to BB-
AQUASEARCH INC: Hawaii Court Confirms Plan of Reorganization
ASHANTI GOLDFIELDS: Noteholders Approve Scheme of Arrangement
BANYAN STRATEGIC: Northlake Purchaser Extends Due Diligence Time
BEACON POWER: Falls Below Nasdaq Minimum Listing Requirements
BETHLEHEM STEEL: Court Issues Budget Protocol for Fee Committee
CANDLEWOOD HOTEL: Names Richard Kelleher to Board of Directors
CANFIBRE GROUP: Talking with Bondholders to Cure Defaults
CELLPOINT INC: Appoints Three New Board of Directors Members
COMDISCO INC: Seeks Okay to Replace Existing Letters of Credit
CONDOR SYSTEMS: Court to Consider Asset Purchase Pact on Tuesday
COVANTA ENERGY: Proposes Uniform De Minimis Asset Sale Protocol
CYANOTECH CORP: Fails to Comply with Nasdaq Listing Criteria
DESA HOLDINGS: Taps Bankruptcy Management Corp. as Claims Agents
DOBSON COMMS: Declares In-Kind Dividend on 12-1/4% Preferreds
E-STAR HOLDINGS: Auditors Doubt Ability to Continue Operations
ENRON CORP: EESO Unit Intends to Reject Contract with Le Hesten
ENRON CORP: Avnet Inc. Pushing for Prompt Decision on Agreement
EXIDE: Bags Approval to Assume Employment and Control Agreements
FACTORY CARD: Deloitte & Touche Comes In as New Accountants
FAIRCHILD DORNIER: Bombardier Walks Away
FANNIE MAY: Seeks Nod to Hire Robert L. Berger as Claims Agent
FEDERAL-MOGUL: Court Approves Garden City as Claims Consultants
FRONTLINE COMM: Won't Declare Semi-Annual Dividend on Preferreds
GENSCI REGENERATION: December 31 Equity Deficit Tops C$16 Mill.
GLOBAL CROSSING: Court Okays Protocol to Pay Bermuda Liquidators
HARVARD INDUSTRIES: Court Sets Asset Sale Hearing for Monday
HIGH SPEED ACCESS: Nasdaq Listing Appeal Hearing Set for Today
HUBBARD HOLDING: Period to File BIA Proposal Extended to July 17
IT GROUP: URS Corp. Seeks Stay Relief to Enforce Stop Notice
IMPSAT FIBER: Taps Arnold & Porter as Bankruptcy Attorneys
INTEGRATED HEALTH: Seeking Approval of Palm Garden Transfer Pact
IRVINE SENSORS: Stonestreet L.P. Discloses 8.1% Equity Stake
JDN REALTY: S&P Affirms 3 Low-B Ratings with Positive Outlook
KENNAMETAL INC: Fitch Rates Senior Unsecured Notes at BBB-
KMART CORP: Court Carves-Out Nine Utilities from Utility Order
MFRI INC: Violates Financial Covenants Under Loan Agreements
MARINER POST-ACUTE: Moody's Assigns & Confirms Low-B Ratings
MAXICARE HEALTH: Froelich Sues Directors for $10MM+ in Damages
MEASUREMENT SPECIALTIES: SEC Begins to Probe Financial Reports
METALS USA: Has Until Nov. 30 to Make Lease-Related Decisions
METROCALL: US Trustee Sets Creditors' Meeting for July 7, 2002
MILACRON: Selling Valenite Assets to Sandvik for $175 Million
NATIONSRENT INC: Committee Signs-Up Traxi for Financial Advice
NATIONSRENT: Files Plan of Reorg. and Disclosure Statement in DE
NETIA HOLDINGS: Appoints PricewaterhouseCoopers as Auditors
OWENS CORNING: Will Focus on Composites Growth in Auto Industry
PACIFIC GAS: Seeks Approval of Terms Re Forbearance by Banks
PACKETPORT.COM: April 30 Working Capital Deficit Reaches $709K
PORTOLA PACKAGING: May 31 Balance Sheet Upside-Down by $27 Mill.
PSINET INC: Seeks Approval of Uniform Omnibus Claims Procedures
QUESTRON TECHNOLOGY: Court Sets July 22, 2002 Claims Bar Date
RESPONSE ONCOLOGY: Tennessee Court Confirms Liquidating Plan
SAFETY-KLEEN: Sues Schneider National to Recoup $2MM Preference
SOFTNET SYSTEMS: Nasdaq Sets Appeal Hearing for July 12, 2002
SUCCESSORIES: Provident Bank Agrees to Amend Credit Agreement
SYBRON DENTAL: Obtains New $150MM Revolver & $200MM Term Loan
TUTOR TIME: Childtime Learning Pitches $22MM Bid for Assets
UNOVA INC: Fitch Affirms Junk Senior Notes Rating
USG CORP: Seeks Approval of Deloitte & Touche's Engagement
VERSATEL TELECOM: Files for Chapter 11 Reorganization in NY
VERSATEL TELECOM: Case Summary & 20 Largest Unsecured Creditors
XO COMMS: Fitch Cuts Senior Secured Debt Rating to C From CC
* DebtTraders' Real-Time Bond Pricing
*********
360NETWORKS: Seeks Lease Decision Period Extension to Sept. 23
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360networks inc., and its debtor-affiliates ask the Court to
further extend their time to assume or reject all global
unexpired leases of nonresidential real property until September
23, 2002.
Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, in New
York, states that the lease decision period otherwise would
expire on June 24, 2002.
According to Ms. Chapman, since the Petition Date, the Debtors
have been analyzing and pursuing the resolution of real property
leases. To date, this Court has approved the Debtors' rejection
of approximately 57 nonresidential real property leases.
However, the Debtors remain party to numerous unexpired leases
of nonresidential real property that have been neither assumed
nor rejected. These Unexpired Leases may be valuable assets of
the Debtors' estates and integral to their continued operations.
"In order to determine which of the Unexpired Leases should be
assumed or rejected, the Debtors need an extension of time to
continue to evaluate the need for these locations in the context
of their long term business plan and a plan of reorganization
that is currently being negotiated," Ms. Chapman adds. Absent
an extension, the Debtors would be forced to choose between
losing valuable locations and assuming leases that ultimately
should be rejected.
Ms. Chapman assures the Court that granting this Motion would
not prejudice the lessors under the Unexpired Leases because:
(a) to the best of their knowledge, the Debtors are current on
their postpetition rent under the Unexpired Leases;
(b) the Debtors have sufficient liquidity and the intent to
continue to perform timely all of their obligations under
the Unexpired Leases; and
(c) in all instances, individual lessors may, for cause shown,
ask the Court to fix an earlier date by which the Debtors
must assume or reject an Unexpired Lease. (360 Bankruptcy
News, Issue No. 25; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
ANC RENTAL: Consolidating Operations at Greensboro Airport
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ANC Rental Corporation and its debtor-affiliates ask for the
Court's authority to reject the Alamo Concession Agreement and
the Alamo Lease and to assume the National Concession Agreement
and the National Lease and assign them to ANC. The agreements
were entered into with the Piedmont Triad Airport Authority, the
controlling authority of the Piedmont Triad International
Airport located in Guilford County, North Carolina or the
Greensboro Airport.
Mark J. Packel, Esq., at Blank Rome Comisky & McCauley LLP in
Wilmington, Delaware, tells the Court that the relief requested
is warranted because it will result in cost saving of over
$1,052,000 per year in fixed facility costs and other
operational cost savings. (ANC Rental Bankruptcy News, Issue No.
14; Bankruptcy Creditors' Service, Inc., 609/392-0900)
AT&T CANADA: Will Begin Debt Restructuring Discussions Soon
-----------------------------------------------------------
"AT&T Canada (NASDAQ: ATTC) is taking the appropriate strategic
initiatives to position itself to be a growing, profitable, and
strong competitor in the Canadian telecommunications industry
over the long-term," John McLennan, Vice-Chairman & CEO,
reported to shareholders at the company's Annual General Meeting
Tuesday.
Mr. McLennan outlined that the process the company is now
undertaking consists of building the company's operating
efficiencies in those businesses in which the company believes
it can be most successful; ensuring that AT&T Canada has the
right capital structure in place to support its strong operating
base; and also aggressively working to achieve a sustainable
competitive environment for the industry in Canada.
"We have strong brand equity, an experienced and knowledgeable
management team, and a very talented and committed workforce.
AT&T Canada is the largest competitor to the incumbent telephone
companies in Canada. Our diverse portfolio of products and
services and unique and robust network enables customers to
compete and succeed on a local, national and global scale. We
are particularly proud of both the deep customer relationships
that we have with many of Canada's leading companies and our
strength in delivering innovative solutions to the large
business market. AT&T Canada's relationship with AT&T Corp.
ensures seamless global connectivity, total brand recognition
and significant technological and operating capabilities,
further enhancing our competitive position. As a result, AT&T
Canada has an excellent opportunity to fulfill its potential in
the Canadian marketplace.
"With respect to the process we are undertaking to build the
company for the future, we have implemented cost saving
initiatives to develop business efficiencies and operating
strength. We have moved forward with actions to improve capital
efficiency. We have sharpened our focus to provide customers
with high quality service. We are concentrating our resources
around core growth and higher margin areas of our business. And,
as we recently announced, we will begin discussions with our
bondholders in the next few weeks with input from AT&T Corp.
aimed at achieving the deleveraging of the company's balance
sheet through a consensual restructuring of our public debt.
With respect to our deposit receipt holders, as we move forward
with this deleveraging effort, their interests will continue to
be governed by the June 1999 Deposit Receipt Agreement.
"Despite the very challenging business environment of the past
three years. AT&T Canada has been able to grow its EBITDA, and
we expect that EBITDA in 2002 will exceed the 2001 levels of
$121 million.
"In our view, the May 30 regulatory decision only marginally
improves the status quo. But more importantly, we believe the
CRTC missed an important opportunity to move the
telecommunications marketplace forward to a competitively
neutral and sustainable environment. However, we believe the
decision fundamentally changes the rules of telecom competition
in Canada and ignores current market realities, with the result
that it falls far short of creating a more efficient and better
telecommunications marketplace for Canadian customers.
Accordingly, as we review this decision, we are looking at what
the company's alternatives may be with respect to the ruling,
including the strong possibility of an appeal. We expect to make
our decision on an appeal over the next several weeks.
"As we move forward with our process to position the company for
the long-term, we are excited about what we believe we can
achieve for all of our stakeholders. A strong, highly-
competitive and growing AT&T Canada will serve the best
interests of our security holders, our customers, employees, and
the Canadian public," Mr. McLennan told shareholders.
AT&T Canada also reported that all twelve nominees were elected
to AT&T Canada's Board of Directors at the Annual General
Meeting. Accordingly, AT&T Canada's Board of Directors consists
of the following members: Purdy Crawford (Chairman) Andre
Bureau, Steven Chisholm, Lisa de Wilde, Marc Fortier, Stephen
Halperin, Alan Horn, Phillip Ladouceur, John McLennan, James
Meenan, David Miller and Craig Young. All directors will hold
office hold until the next Annual General Meeting of
Shareholders, or until their respective successors are elected
or appointed.
In addition, the appointment of KPMG LLP as auditors of the
corporation was approved.
AT&T Canada is the largest competitor to the incumbent telephone
companies, and a leader in Internet and E-Business Solutions.
With over 18,700 route kilometers of local and long haul
broadband fiber optic network, world class data, Internet, web
hosting and e-business enabling capabilities, AT&T Canada
provides a full range of integrated communications products and
services to help Canadian businesses communicate locally,
nationally and globally. AT&T Canada Inc. is a public company
with its stock traded on the Toronto Stock Exchange under the
symbol TEL.B and on the NASDAQ National Market System under the
symbol ATTC. Visit AT&T Canada's Web site,
http://www.attcanada.comfor more information about the company.
AT&T Canada Inc.'s 10.75% bonds due 2007 (ATTC07CAR1),
DebtTraders reports, are quoted at a price of 8.75. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ATTC07CAR1
for real-time bond pricing.
ACTUANT CORP: May 31 Balance Sheet Upside-Down by $49 Million
-------------------------------------------------------------
Actuant Corporation (NYSE:ATU) announced results for its third
quarter ended May 31, 2002. Sales totaled $120.0 million
compared to prior year sales of $126.1 million. Prior year sales
include results from businesses that were sold during fiscal
2001, including Mox-Med and Enerpac's Toolholding units
(collectively the "non-continuing businesses"). Excluding the
non-continuing businesses, fiscal 2002 third quarter sales were
flat with the prior year.
Third quarter fiscal 2002 net earnings and diluted earnings per
share from continuing operations before extraordinary charges
were a record $8.3 million, respectively, compared to $1.5
million, respectively, in the prior year. The Company's prior
year third quarter earnings included a number of unusual items,
including $0.6 million of financing costs attributable to
establishing an Accounts Receivable Securitization facility,
$1.7 million of costs related to restructuring activities, a
$1.0 million gain on an insurance settlement, and a $3.1 million
non-operating charge associated with divested units. Excluding
these items, net income and diluted earnings per share from
continuing operations for the third quarter of fiscal 2001 were
$4.1 million, respectively.
As previously announced, the Company recorded a net
extraordinary charge in the third quarter of the current fiscal
year totaling $9.3 million attributable to the early
extinguishment of $70 million of its 13% Senior Subordinated
Notes and the refinancing of its Senior Secured Credit Facility.
The charge is comprised of the payment of a bond redemption
premium and the pro rata write-off of debt discount and debt
issuance costs.
During the third quarter of fiscal 2002 the Company recognized a
non-cash charge from discontinued operations of $10 million, or
$0.82 per diluted share, resulting from the preliminary
rejection in bankruptcy proceedings of spin-off related
indemnification agreements between Actuant and APW Ltd., a
former subsidiary the Company spun-off to shareholders in July
2000. During the comparable quarter in the prior year, the
Company recorded a charge of $0.8 million net of tax, related to
its discontinued operations. Including discontinued operations
and extraordinary items, the Company reported a loss in the
third quarter of the current year of $11.0 million compared to
earnings in the comparable prior year period of $0.7 million.
Sales for the nine months ended May 31, 2002 were $341.6
million, compared to $361.4 million in the comparable prior year
period. Excluding the non-continuing businesses, nine-month
sales declined 1% from last year, reflecting weaker economic
conditions partially offset by the incremental impact of the
acquisition of Dewald Manufacturing on March 1, 2001. Net
earnings from continuing operations before the cumulative effect
of change in accounting principle and extraordinary items for
the nine months ended May 31, 2002 were $16.9 million compared
to $8.8 million for the comparable prior year period. As
previously disclosed, the Company adopted Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible
Assets" at the beginning of fiscal 2002, which resulted in a net
cumulative effect of accounting change charge of $7.2 million in
the first quarter. Including charges for discontinued
operations, extraordinary items and cumulative effect of change
in accounting principle, the Company reported a loss of $9.6
million for the nine months ended May 31, 2002 compared to
earnings of $8.1 million in the comparable prior year period.
Commenting on the results, Robert C. Arzbaecher, President and
Chief Executive Officer of Actuant stated, "Actuant's third
quarter results from continuing operations were in line with our
expectations. Sales from continuing units were flat with the
prior year, which is an improvement over recent quarters, and
positive news given today's business environment for industrial
companies. While we have not seen significant improvement in
market conditions other than in the recreational vehicle market,
our trends indicate we have moved off the bottom."
Arzbaecher continued, "Diluted earnings per share of $0.68 from
continuing operations before extraordinary items and
discontinued operations represents a record for Actuant since
the spin off in July 2000. It represents a 36% increase over the
third quarter of last year's $0.50 earnings per share, which
excludes one-time items. This improvement reflects the benefits
of deleveraging and right-sizing our businesses to match today's
challenging market conditions."
Sales in the Tools & Supplies segment were $65.7 million for the
third quarter of fiscal 2002, down approximately 5% from last
year's $69.3 million, excluding non-continuing businesses, due
to weaker economic conditions, particularly in North America.
Third quarter fiscal 2002 sales for the Engineered Solutions
segment were $54.3 million, a 7% improvement over the $51.0
million in the previous year, excluding non-continuing
businesses. This increase results from improved demand from
recreational vehicle OEMs. Currency rate changes did not have a
material impact on quarterly sales comparisons.
Actuant's third quarter earnings before interest, taxes,
depreciation and amortization ("EBITDA") was $22.7 million, or
18.9% of sales, compared to $19.5 million, or 15.4% of sales,
last year. Fiscal 2001 third quarter EBITDA included $1.8
million of EBITDA from non-continuing businesses, a $1.0 million
non-recurring insurance gain, $1.7 million of restructuring
provisions and $3.1 million of other charges associated with
discontinued units. Excluding the non-continuing businesses and
these items, EBITDA last year was $21.5 million or 17.9% of
sales. EBITDA margins improved in the Tools & Supplies segment
due to reduced headcount and other cost reduction initiatives.
Engineered Solutions EBITDA margins declined from the prior year
third quarter, but improved sequentially from the second quarter
as benefits from the integration of its recreational vehicle
businesses were realized.
At May 31, 2002, Actuant Corporation's balance sheet shows a
total shareholders' equity deficit of $49 million.
Commenting on the outlook for the balance of Actuant's fiscal
year, Arzbaecher said, "Based on current market conditions, we
expect fourth quarter fiscal 2002 sales of $115-$120 million and
diluted EPS of $0.65-$0.75. Looking ahead to fiscal 2003, our
guidance contemplates modest improvements in economic and market
conditions. We expect sales and EBITDA to be in the range of
$470-$490 million and $90-$95 million, respectively, which would
equate to diluted EPS of $2.70-$3.00 per share."
During the third quarter of fiscal 2002, APW, a former
subsidiary of the Company, filed for protection under Chapter 11
of the bankruptcy code. APW indicated in its bankruptcy filing
that only the parent level holding company and an inactive
subsidiary had filed for bankruptcy and that its remaining
operating and non-operating subsidiaries were not parties to the
bankruptcy and would continue to honor their respective
obligations and existing agreements. These obligations include
all of the leases for which the Company is contingently liable.
As a result, based on information presently available, APW's
bankruptcy filing will not result in Actuant being responsible
for any current payments under these lease agreements.
In its bankruptcy filing, APW also disclosed that it was
rejecting the majority of the agreements entered into between
APW and the Company at the time of the spin off, governing a
variety of indemnification matters between the parties. Those
agreements include the Tax Sharing Agreement by which APW was to
indemnify the Company for income tax liabilities that could
arise in the event of income tax audits for fiscal years prior
to and including the spin off. The Company believes that, as a
result of the rejection of the Tax Sharing Agreement, it will
now likely be directly liable for any income tax audit
adjustments that could arise in the event of an audit.
As a result of APW's preliminary rejection of the Tax Sharing
Agreement, the Company recorded a $10 million non-cash charge to
discontinued operations in the third quarter. Actuant continues
to monitor developments surrounding the bankruptcy filing as
they develop. To the extent that additional information becomes
available that changes its view on its exposure from the
rejection of the Tax Sharing Agreement, the Company will
communicate such developments to shareholders.
Actuant, headquartered in Milwaukee, Wisconsin, is a diversified
industrial company with operations in more than 15 countries.
The Actuant businesses are leading companies in highly
engineered position and motion control systems and branded
tools. Products are offered under established brand names such
as Enerpac, Gardner Bender, Power-Packer, Power Gear, Milwaukee
Cylinder, and Nielsen Sessions.
ADELPHIA BUSINESS: Cumberland Wants Prompt Decision on Contracts
----------------------------------------------------------------
Cumberland Stadium, L.P., Tennessee Football, L.P., Cumberland
Promotional Enterprises, L.L.C., and Dream Suites, L.P. moves
the Court for entry of an order directing Adelphia Business
Solutions, Inc., to immediately to assume or reject a certain
Naming and License Agreement, dated July 8, 1999, and a
Cumberland Suite Limited License Agreement that is ancillary to
the Naming Agreement. Alternatively, if the Court determines to
grant ABIZ additional time in which to make a decision to assume
or reject, the Cumberland Parties request that the Court order
immediate payment of the amounts due under the Naming Agreement,
as and when due, or, in the alternative, that the Cumberland
Parties be granted adequate protection with respect to the fair
value of the benefits that will be realized by ABIZ.
Walter H. Curchack, Esq., at Robinson Silverman Pearce Aronsohn
& Berman LLP in New York, New York, informs the Court that
Tennessee Football is the owner and holder of the NFL franchise
known as the "Tennessee Titans" whose home territory is the
greater Nashville, Tennessee area. Cumberland Stadium is the
lessee under a Stadium Lease Agreement, dated May 14, 1999, with
The Sports Authority of the Metropolitan Government of Nashville
and Davidson County, as the lessor. Pursuant to the Stadium
Lease, Cumberland leases the professional football stadium
located in downtown Nashville, Tennessee, for use by the Titans,
as their home playing field, and which is currently known as the
"Adelphia Coliseum." Under the Stadium Lease and subject to its
terms, Cumberland Stadium has the exclusive right to contract
from time to time with any person with respect to the naming
rights of the Stadium.
On July 8, 1999, Mr. Churchack relates that the Cumberland
Parties entered into the Naming Agreement with Hyperion
Telecommunications, Inc., now known as Adelphia Business
Solutions, Inc., one of the Debtors in these cases. Pursuant to
the Naming Agreement, the Cumberland Parties agreed, among other
things, that the Stadium would be named the "Adelphia Coliseum."
In turn, ABIZ agreed, among other things, to pay an annual
Naming Rights fee to Cumberland in the amount of $2,000,000 for
each NFL season, commencing with the 1999 NFL season and ending
with the 2013 NFL season. The Naming Agreement terminates at
the later of 11:59 p.m., on February 14, 2014, or two weeks
after the conclusion of the NFL season begun in 2013, unless it
is terminated sooner in accordance with the terms of the Naming
Agreement.
Mr. Churchack accords that the Naming Fee is payable for each
football season, in four equal installments, which are due on
May 15, August 15, November 15, and February 15, respectively.
However, the Debtors failed to pay the installment of $500,000
due May 15, 2002. Such payment is now past due and the Debtors
are in post Petition Date default of their obligations under the
Naming Agreement.
As part of the Naming Agreement, and in furtherance thereof, Mr.
Chruchack tells the Court that ABIZ entered into the Suite
Agreement, under which ABIZ licenses one of the luxury suites at
the Stadium, specifically, the suite known as Mezzanine East
221. The term of the Suite Agreement runs concurrently with the
Naming Agreement. The Suite Agreement does not have any
existence independent of the Naming Agreement.
If the Debtors are to reject the Agreements, any order
authorizing such rejection should provide, at a minimum, the
following:
A. relief from the automatic stay, to the extent required to
permit the Cumberland Parties to:
* remarket the Naming Rights, the Suite, and the other
benefits provided to ABIZ under the Agreements; and
* exercise their rights and remedies otherwise available
under the Agreements; and
B. direction to ABIZ to continue to provide the
telecommunications services for 60 days after rejection, so
that the Cumberland Parties can make arrangements to obtain
such services from another party, without interruption to the
Cumberland Parties' businesses.
Should the Court determine not to require Debtors to assume or
reject the Agreements by June 20, 2002, the Cumberland Parties
request that this Court enter an order:
A. providing that the Cumberland Parties are not required to
perform any of their obligations under the Agreements, unless
and until the Debtors makes their 2002 season payment of
$2,000,000;
B. determining that the Cumberland Parties have an
administrative claim with respect to the full value of any
benefits received by ABIZ after the Petition Date, including,
without limitation, the full amount of the Naming Fee for the
2002 NFL Season; and
C. to the extent required, modifying the automatic stay to
permit the Cumberland Parties immediately to begin
remarketing the Naming Rights, the Suite, and the various
other benefits provided under the Agreements in order to
permit the Cumberland Parties to recoup the damages resulting
from ABIZ's delay in assuming or rejecting the Agreements.
Alternatively, the Court should require that Debtors pay to the
Cumberland Parties the fair value of the numerous rights and
benefits to be realized by Debtors under the Agreements,
including, without limitation, the fair market value of the
football tickets, the Suite and the radio advertisements that
are available to the Debtors under the Agreements.
Mr. Chruchack avers that the first Naming Fee installment for
the 2002 season of $500,000 was due on May 15, 2002. However,
The payment was not made and the Cumberland Parties have good
reason to believe that Debtors do not intend to make any
subsequent installments. The Cumberland Parties will be unduly
prejudiced and will suffer these substantial direct pecuniary
damage if the relief requested is not granted:
A. The Cumberland Parties will be providing cash and cash
equivalents to the Debtors in the next several weeks,
including the tickets for and use of the Suite, which has a
market value of $125,000, and additional game tickets having
a fair market value in excess of $90,000. The Debtors would
reap a windfall and be unjustly enriched at the expense of
the Cumberland Parties if such tickets are not paid for --
either directly or by virtue of the payments required under
the Naming Rights Agreement.
B. In order to fulfill their obligations under the Naming
Agreement for the 2002 NFL season, the Cumberland Parties
must place orders with their various vendors for tickets,
programs, schedules, and other merchandise and materials that
are to bear Adelphia's name, no later than June 20, 2002.
The production of this branded merchandise will require the
Cumberland Parties to lay out or commit to payments projected
to be in excess of $750,000.
If the Naming Agreement is rejected later than June 20, 2002,
and before, or during the NFL season, Mr. Churchack contends
that the Cumberland Parties would not have time to reorder many
of the items, including the tickets, programs and schedules,
without ABIZ's name, prior to the 2002 NFL season and will
therefore lose any opportunity to mitigate their damages for
ABIZ's breaches. Further, although the Cumberland Parties may
still be able to reorder some consumable items, such as cups,
napkins, letterhead, and the like, they could not do so without
incurring a substantial additional expense. Moreover, the time
for the Cumberland Parties to remarket the Naming Rights, the
Suite, and the other benefits provided ABIZ under the Agreements
in time for the 2002 NFL season is running out. Thus, the
damage to the Cumberland Parties will be substantial,
unavoidable and unduly prejudicial, unless the Court immediately
grants the requested relief. The Debtors' very ability to pay
what would clearly be an administrative expense is questionable
here, as:
* the Debtors have announced that they are downsizing their
operations;
* the Debtors and their affiliates are selling assets to raise
cash;
* there is concern that the Debtors and their affiliates have
not properly accounted for various transactions; and
* the Debtors have failed to timely pay their administration
expense obligation under the Agreements.
Moreover, as of the date of this Motion, Mr. Churchack points
out that the Debtors have not obtained entry of an order
providing them with the DIP financing they have sought and so
obviously need. As time passes, the Debtors prospects appear to
be worsening and the Cumberland Parties are becoming less able
to mitigate their losses, as the naming rights and related
consumables are a wasting asset.
The Titans' first preseason game is scheduled for August 10,
2002, and their first regular season home game is scheduled for
September 8, 2002. If the Cumberland Parties cannot begin re-
marketing the Naming Rights by June 20, 2002, Mr. Churchack
fears that the Cumberland Parties will lose any opportunity to
re-market such assets for the 2002 NFL season. Once the 2002
NFL season begins, the Cumberland Parties are required under the
Agreements to provide additional benefits to ABIZ, including,
for example, radio advertisements during each game, the cost of
which is approximately $175,000. If ABIZ is permitted to reject
the Agreements once the season commences, the Cumberland Parties
will have been required to incur some or all of these additional
expenses, which likely will not be recoverable. Unless and
until ABIZ assumes or rejects the Agreements as proposed by the
Cumberland Parties, such entities will be unduly harmed and
prejudiced, and will be required to expend funds out of their
own pocket, while the Debtors are unjustly enriched.
"The Agreements are not ABIZ's primary assets," Mr. Churchack
says. "ABIZ' primary business is telecommunications." In
contrast, the use of the Stadium is the primary business of
certain of the Cumberland Parties and, obviously, is vital to
the Titans. To the Debtors, the Naming Rights payments
constitute, at most, a fraction of ABIZ' advertising and
promotional budget and which are not vital or even necessary to
the operation and rehabilitation of Debtors. In fact, such
expenses may well constitute an expense Debtors would be well
served to avoid, especially as they contract their businesses.
Mr. Churchack asserts that the Agreements are not necessary for
ABIZ's business or reorganization. Whether ABIZ can or will
effectively reorganize does not hinge on whether it retains its
Naming Rights on, or its luxury Suite at the Stadium. In fact,
it may even be questionable whether it would be sound business
judgment for ABIZ to assume the Agreements in light of the
annual costs associated with them and ABIZ's financial
situation.
The Cumberland Parties concede that exclusivity has not
terminated for the Debtors. Likewise, Mr. Chruchack admits that
the Debtors may not have had time to fully review their
financial situation and formulate a plan, although they are
contracting their businesses, as set forth in filings made in
these cases. However, in light of the certain loss and undue
prejudice to the Cumberland Parties if the Debtors fail to act
timely, these two factors are not sufficient to permit ABIZ to
delay its decision to assume or reject the Agreements. This is
particularly true when, as seems to be the case here, the
likelihood of a successful reorganization is significantly in
doubt.
Just as the Cumberland Parties are running out of time to
remarket the Naming Rights, resell the Suite, and remarket other
benefits for the 2002 NFL season, so too is ABIZ. Thus, Mr.
Chruchack concludes that it is unlikely ABIZ could receive any
premium from assuming and assigning the Agreements for the 2002
NFL season. Additionally, the Naming Agreement prohibits the
stadium name from being changed prior to the end of the 2004 NFL
season. Therefore, it is unlikely any potential assignee would
pay a premium to Debtors' estates for the right to have the
Stadium continue to be called "Adelphia Coliseum" for two more
seasons.
Mr. Churchack notes that the naming rights market presently is
very weak. Additionally, it appears that no steps have been
taken to remarket the Debtors' rights under the Agreements, at
least since the Petition Date. (Adelphia Bankruptcy News, Issue
No. 7; Bankruptcy Creditors' Service, Inc., 609/392-0900)
ADELPHIA BUSINESS: Long Haul L.P.'s Chapter 11 Case Summary
-----------------------------------------------------------
Debtor: Adelphia Business Solutions Long Haul, L.P.
One North Main Street
Coudersport, Pennsylvania 16915-1141
Bankruptcy Case No.: 02-12974
Chapter 11 Petition Date: June 18, 2002
Court: Southern District of New York (Manhattan)
Debtors' Counsel: Judy G. Z. Liu, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8512
Fax : (212) 310-8007
Estimated Assets: $10 to $50 Million
Estimated Debts: $10 to $50 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Qwest Communications Trade Debt $8,422,108
P.O. Box 856169
Louisville, KY 40285-6169
Fujitsu Fujitsu Trade Debt $8,415,187
P.O. Box 13730
Newark, NJ 07188
(214) 690-6000
Attn: Accounts Receivable
Grande Communications Trade Debt $1,698,992
401 Carlson Circle
San Marcos, TX 78666
Attn: Jared Benson
(512) 878-5222
DTI Trade Debt $1,683,466
8112 Maryland Avenue
4th Floor
St. Louis, MO 63105
Adelphia Communications Intercompany Debt $1,367,366
Corporation
One North Main Street
Coudersport, PA 16915-1141
Metromedia Fiber Trade Debt $569,535
Networks
PO Box 7247-6887
Philadelphia, PA 19170-6887
Dominion Telecom Trade Debt $491,478
701 E. Cary Street
Richmond, VA 23219
Tellabs Operations Trade Debt $403,122
P.O. Box 99206
Chicago IL 60693-9206
Lucent Technologies Trade Debt $339,982
P.O. Box 100317
Atlanta, GA 30384-0317
Sprint Trade Debt $212,881
Network Building & Trade Debt $141,191
Consulting
Neescom Trade Debt $135,666
Kamand Construction, Trade Debt $135,235
Inc.
Williams Communications Trade Debt $129,477
Looking Glass Networks Trade Debt $91,000
Mastec North America Trade Debt $58,850
Tyco Electronics Power Trade Debt $23,583
Sys. Inc.
PWR, LLC Trade Debt $16,650
I-K Electric Company Trade Debt $16,124
First South Utility Trade Debt $15,506
ADELPHIA BUSINESS: Jacksonville Inc.'s Chapter 11 Case Summary
--------------------------------------------------------------
Debtor: Adelphia Business Solutions of Jacksonville, Inc.
One North Main Street
Coudersport, PA 16915-1141
Bankruptcy Case No.: 02-12979
Chapter 11 Petition Date: June 18, 2002
Court: Southern District of New York (Manhattan)
Debtors' Counsel: Judy G. Z. Liu, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8512
Fax : (212) 310-8007
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Adelphia Communications Intercompany Debt $1,268,487
Corporation
Fujitsu Trade Debt $293,793
Attn: Accounts Receivable
P.O. Box 13730
Newark, NJ 07188
(214) 690-6000
Bell South Trade Debt $179,785
AT&T Broadband Trade Debt $114,920
Carrier Access Corporation Trade Debt $49,205
Sprint Trade Debt $31,702
Illuminet Inc. Trade Debt $27,585
Sunbelt Communications Trade Debt $6,444
Power Battery Company, Inc. Trade Debt $6,125
SNET Diversified Group, Inc. Trade Debt $5,640
Personnel One Trade Debt $4,706
Liberty Property Ltd. Trade Debt $4,198
Partnership
Ring Power Corporation Trade Debt $1,337
Universal Service Trade Debt $1,073
Administrative
Nick Deonas Realty I Trade Debt $950
3COM Trade Debt $950
De Lage Landen Trade Debt $793
Financial Service
LNR Millenium Trade Debt $751
Manager, Inc.
Sherlon Investment Trade Debt $679
Corp.
Minolta Leasing Services Trade Debt $614
ADELPHIA BUSINESS: Investment East LLC's Chap. 11 Case Summary
--------------------------------------------------------------
Debtor: Adelphia Business Solutions Investment East, LLC
One North Main Street
Coudersport, Pennsylvania 16915-1141
Bankruptcy Case No.: 02-12976
Chapter 11 Petition Date: June 18, 2002
Court: Southern District of New York (Manhattan)
Debtors' Counsel: Judy G. Z. Liu, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8512
Fax : (212) 310-8007
Estimated Assets: $10 to $50 Million
Estimated Debts: $10 to $50 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Fujitsu Trade Debt $5,196,009
P.O. Box 13730
Newark, NJ 07188-0730
Verizon Trade Debt $964,844
P.O. Box 101687
Atlanta, GA 30392-1687
BellSouth Trade Debt $709,495
P.O. Box 105373
Atlanta, GA 30348
Sprint Trade Debt $409,030
P.O. Box 101465
Atlanta, GA 30392
Carrier Access Corporation Trade Debt $149,313
CCU, Inc. Trade Debt $107,906
Light Link Fiber Trade Debt $87,349
Optic Services
AT&T Trade Debt $74,016
Pro Player Stadium Trade Debt $67,627
WBP I Ltd. Trade Debt $57,095
Shiflett Enterprises, Inc. Trade Debt $41,525
First South Utility Trade Debt $31,982
Telmar Network Trade Debt $30,929
Technology
Illuminet, Inc. Trade Debt $29,651
Ryon & Associates, Inc., Trade Debt $25,906
as Agent
Adelphia Communications Intercompany Debt $24,131
Corporation
Cable Constructors, Inc. Trade Debt $15,466
Market Halsey Urban Trade Debt $14,599
Renewal, LLC
SNET Diversified Trade Debt $9,615
Group, Inc.
Kelly Services Trade Debt $9,008
ADELPHIA BUSINESS: Investment LLC's Chapter 11 Case Summary
-----------------------------------------------------------
Debtor: Adelphia Business Solutions Investment, LLC
aka ACC Holdings IV, LLC
One North Main Street
Coudersport, Pennsylvania 16915-1141
Bankruptcy Case No.: 02-12977
Chapter 11 Petition Date: June 18, 2002
Court: Southern District of New York (Manhattan)
Debtors' Counsel: Judy G. Z. Liu, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8512
Fax : (212) 310-8007
Estimated Assets: More than $100 Million
Estimated Debts: $10 to $50 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Fujitsu Trade Debt $8,094,103
P.O. Box 13730
Newark, NJ 07188-0730
PSE&G Trade Debt $1,022,536
P.O. Box 18414
Newark, NJ 07191
Verizon Trade Debt $837,931
P.O. Box 101687
Atlanta, GA 30392-1687
Adelphia Communications Intercompany Debt $738,695
Corporation
One North Main Street
Coudersport, PA 16915-1141
Sprint Trade Debt $443,783
P.O. Box 101465
Atlanta, GA 30392
The CIT Group Trade Debt $252,044
General Post Office
P.O. Box 26701
New York, NY 10087-6701
AT&T Trade Debt $220,331
Southwestern Bell Trade Debt $177,742
Carrier Access Corporation Trade Debt $164,838
Comcast Cable Trade Debt $126,829
SNET Diversified Trade Debt $115,797
Group, Inc.
Tellabs Operations, Inc. Trade Debt $106,315
BellSouth Trade Debt $93,462
CSG Systems, Inc. Trade Debt $76,806
Cable Utilities, Inc. Trade Debt $72,806
Illuminet, Inc. Trade Debt $53,739
Grimm Construction Trade Debt $36,410
Corp.
Somera Communications,Inc. Trade Debt $32,926
Anchor Investors Trade Debt $27,858
Corning Cable Systems, LLC Trade Debt $27,797
ADELPHIA BUSINESS: International LLC's Chapter 11 Case Summary
--------------------------------------------------------------
Debtor: Adelphia Business Solutions International LLC
One North Main Street
Coudersport, PA 16915-1141
Bankruptcy Case No.: 02-12975
Chapter 11 Petition Date: June 18, 2002
Court: Southern District of New York (Manhattan)
Debtors' Counsel: Judy G. Z. Liu, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8512
Fax : (212) 310-8007
Total Assets: $0 to $50,000
Total Debts: $0 to $50,000
ADELPHIA BUSINESS: Louisiana LLC's Chapter 11 Case Summary
----------------------------------------------------------
Debtor: Adelphia Business Solutions of Louisiana, LLC
One North Main Street
Coudersport, Pennsylvania 16915-1141
Bankruptcy Case No.: 02-12981
Chapter 11 Petition Date: June 18, 2002
Court: Southern District of New York (Manhattan)
Debtors' Counsel: Judy G. Z. Liu, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8512
Fax : (212) 310-8007
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $500,000 to $1 million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Adelphia Communications Intercompany Debt $468,376
Corporation
1 North Main Street
Coudersport, PA 16915-1141
Fujitsu Trade Debt $214,771
Tyco Electronics Power Trade Debt $66,575
System Inc.
Bell South Trade Debt $52,714
Telmar Network Technology Trade Debt $32,542
Istar Ctl. I, L/P Lehman Trade Debt $16,936
Ali, Inc
Carrier Access Corporation Trade Debt $16,273
Sprint Trade Debt $5,462
East Skelly LLC Trade Debt $5,366
S.M. Brell, L.P. Trade Debt $4,214
D/B/A Louisiana Tower
WJB Pecanland Trade Debt $2,341
SNET Diversified Group, Inc. Trade Debt $1,623
Illuminet Inc. Trade Debt $1,500
City of New Orleans Trade Debt $900
Apcoa Standard Parking Trade Debt $760
CitiCapital Trade Debt $481
Mac & Sharon Dearman Trade Debt $450
One Call Locates, Inc. Trade Debt $416
Preston Fontenot Trade Debt $358
James C. Heath Trade Debt $333
ADELPHIA BUSINESS: Louisiana Inc.'s Chapter 11 Case Summary
-----------------------------------------------------------
Debtor: Adelphia Business Solutions of Louisiana, Inc.
One North Main Street
Coudersport, PA 16915-1141
Bankruptcy Case No.: 02-12980
Chapter 11 Petition Date: June 18, 2002
Court: Southern District of New York (Manhattan)
Debtors' Counsel: Judy G. Z. Liu, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8512
Fax : (212) 310-8007
Estimated Assets: $0 to $50,000
Estimated Debts: $0 to $50,000
ADELPHIA BUSINESS: Nashville LP's Chapter 11 Case Summary
---------------------------------------------------------
Debtor: Adelphia Business Solutions of Nashville, L.P.
One North Main Street
Coudersport, Pennsylvania 16915-1141
Bankruptcy Case No.: 02-12982
Chapter 11 Petition Date: June 18, 2002
Court: Southern District of New York (Manhattan)
Debtors' Counsel: Judy G. Z. Liu, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8512
Fax : (212) 310-8007
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Adelphia Communications Intercompany Debt $1,498,449
Corporation
1 North Main Street
Coudersport, PA 16915-1141
Fujitsu Trade Debt $1,223,412
Attn: Accounts Receivable
P.O. Box 13730
Newark, NJ 07188
(214) 690-6000
Bell South Trade Debt $413,123
P.O. Box 105373
Atlanta, GA 30348
The CIT Group Trade Debt $109,140
Carrier Access Corporation Trade Debt $60,281
Sprint Trade Debt $33,981
SNET Diversified Trade Debt $26,304
Group, Inc.
Fishel Technologies Trade Debt $24,917
Walker and Associates, Inc. Trade Debt $16,357
Donelson Corporate Trade Debt $15,795
Center, L.P.
Power and Telephone Trade Debt $14,684
Supply Co.
Avaya Financial Services Trade Debt $6,775
Pirelli Cable Corp. Trade Debt $5,795
Qwest Trade Debt $5,395
Randstad Trade Debt $4,817
Special Olympics Trade Debt $4,800
Tennessee, Inc.
Illuminet, Inc. Trade Debt $4,572
Fulton Southern, Inc. Trade Debt $4,070
Nashville Electric Service Trade Debt $3,901
Arris Trade Debt $2,100
ADELPHIA BUSINESS: South Carolina Inc.'s Chapter 11 Case Summary
----------------------------------------------------------------
Debtor: Adelphia Business Solutions of South Carolina, Inc.
One North Main Street
Coudersport, Pennsylvania 16915-1141
Bankruptcy Case No.: 02-12984
Chapter 11 Petition Date: June 18, 2002
Court: Southern District of New York (Manhattan)
Debtors' Counsel: Judy G. Z. Liu, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8512
Fax : (212) 310-8007
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Fujitsu Trade Debt $959,571
P.O. Box 13730
Newark, NJ 07188-0730
Adelphia Communications Intercompany Debt $854,850
Corporation
1 North Main Street
Coudersport, PA 16915-1141
BellSouth Trade Debt $139,470
Southeast Utilities of GA, Trade Debt $58,996
Inc.
Duke Engineering & Services Trade Debt $25,344
Sprint Trade Debt $15,709
Wilson Fiber Line Trade Debt $13,849
DBA Cable Extraordinaire Trade Debt $7,599
Orius Central Office Trade Debt $3,950
Services
Henry W. Halsberg Trade Debt $3,368
d/b/a Bergamo Partners
Business Telecom Inc. FL Trade Debt $3,015
Public Service Commission Trade Debt $2,660
Warehouses, Inc. Trade Debt $1,540
Pirelli Cable Corp Trade Debt $1,459
Universal Service Trade Debt $935
Administrative Co.
SNET Diversified Trade Debt $904
Group, Inc.
Columbia Television Trade Debt $850
Broadcasting
d/b/a WOLO TV
Purchase Power Trade Debt $659
Greer Commission of Trade Debt $583
Public Work
Birch Telecom of the Trade Debt $416
South - TN
ADELPHIA BUSINESS: Virginia LLC's Chapter 11 Case Summary
---------------------------------------------------------
Debtor: Adelphia Business Solutions of Virginia, LLC
One North Main Street
Coudersport, Pennsylvania 16915-1141
Bankruptcy Case No.: 02-12985
Chapter 11 Petition Date: June 18, 2002
Court: Southern District of New York (Manhattan)
Debtors' Counsel: Judy G. Z. Liu, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8512
Fax : (212) 310-8007
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $0 to $50,000
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Fujitsu Trade Debt $814,753
P.O. Box 13730
Newark, NJ 07188-0730
Verizon Trade Debt $302,289
P.O. Box 17577
Baltimore, MD 21297-0513
Adelphia Communications Intercompany Debt $81,888
Corporation
Cox Communications Trade Debt $28,153
Continental- Elthan Associates Trade Debt $26,348
Illuminet, Inc. Trade Debt $21,821
VPS Communications, Inc. Trade Debt $19,200
d/b/a Dominion Telecom, Inc.
Atlantic Cable & Trench, Inc. Trade Debt $18,000
Sprint Trade Debt $16,607
Peregrine Remedy, Inc. Trade Debt $16,460
Dominion Telecom, Inc. Trade Debt $11,000
VSI Viatech Services Inc. Trade Debt $6,906
KMC Data Hold Co., LLC Trade Debt $6,438
JWS Communicaitons Trade Debt $5,475
MCI Worldcom Comm., Inc. Trade Debt $2,694
Ted Hoagland Trade Debt $2,008
SNET Diversified Group, Inc. Trade Debt $1,679
Aspen Cleaning Corporation Trade Debt $967
Pitney Bowes Credit Trade Debt $578
Corporation
Commonwealth Paper Company Trade Debt $454
ADVANCED GAMING: PowerHouse Management Acquires 56% Equity Stake
----------------------------------------------------------------
On June 12, 2002, all 11,909,750 of Advanced Gaming Technology's
common shares owned by Daniel H. Scott (representing
approximately 56% of the total outstanding) were acquired by
PowerHouse Management, Inc. As a consequence of such purchase;
(1) 21,430,587 shares of the Company's stock are outstanding,
11,909,750 of which are owned by PowerHouse and its
principals.
(2) Through PowerHouse, the following indirectly control 5% or
more of the outstanding shares of the Company:
(a) Gary L. Cain 7,939,833 shares (66% of 11,909,750 shares)
(b) Bruce M. Arinaga 3,969,917 shares (33% of 11,909,750 shares)
(3) The prior directors and/or officers, Daniel H. Scott and
Robert L. Hunziker, resigned from such capacities effective
June 7, 2002. Gary L. Cain and Bruce M. Arinaga were
elected directors on that date. The following persons,
also effective June 12, 2002, were elected officers of
Advanced Gaming Technology as follows:
Gary L. Cain Chief Executive Officer
Bruce M. Arinaga President, Secretary and
Treasurer
William H. Burton Vice-President
The Company is principally engaged in the development and
marketing of technology for the casino and hospitality industry.
As reported in Troubled Company Reporter's April 10, 2002
edition, Advanced Gaming Technology will require additional
capital to continue operations. There is no assurance that
capital will be available. This will restrict the growth of the
Company. As mentioned, management is considering all options
including sale, merger, reverse merger or dissolution of the
Company. And, as mentioned, any such transaction could have a
significant impact on current shareholders.
ALLEGIANCE TELECOM: Acquires WorldCom's CPE Assets for $30 Mill.
----------------------------------------------------------------
Allegiance Telecom, Inc. (Nasdaq: ALGX), a leading integrated
communications provider, through its subsidiaries, has acquired
WorldCom, Inc.'s (Nasdaq: WCOM, MCIT) customer premise equipment
provisioning business and its CPE maintenance business. The
aggregate purchase price was $30 million in cash.
Together, these businesses represent one of the largest
providers of CPE maintenance service and one of the largest CPE
distributors in the U.S., with more than 5,000 customers
nationwide in more than 7,000 locations. The businesses operate
in 34 major U.S. markets, 25 of which are also served by
Allegiance.
The acquisition of these businesses accelerates Allegiance's
emphasis on integrated service offerings to businesses using
state-of-the-art CPE. Allegiance's integrated access services
now account for approximately half of all the company's sales.
It also strategically enhances Allegiance's growing national
accounts business as nationwide or regional customers seek "One
source for business telecom(TM)." With these transactions,
Allegiance now offers a truly complete communications solution
to corporate customers, including local and long distance voice,
and Internet access services, now bolstered by a full suite of
customer premise communications equipment and service offerings.
"Business customers want to deal with a communications equipment
distributor and service provider that works hand in glove with
their communications service provider to get the best possible
service at an economical price," said Royce Holland, chairman
and CEO of Allegiance Telecom. "With the acquisition of these
businesses, Allegiance Telecom is firmly established as a
convenient and economical single source provider for all
communications needs in the small and medium sized business
market, both services and equipment sales."
"The communications business is still won or lost in the field
where the quality of your field service personnel can make a big
difference. Through this acquisition we are adding more than 400
experienced field technicians and I expect this to enhance the
quality of our customer service across all of our product and
service offerings," said Holland.
"In addition to the strategic fit offered by these acquisitions,
they meet the strict financial criteria we have been faithful to
since day one in our ongoing acquisition program," said Thomas
Lord, Allegiance Telecom executive vice president for corporate
development and chief financial officer. "The businesses are
expected to be EBITDA accretive, require minimal capital
expenditures and add no material debt to our balance sheet. The
equipment service business performs consistently with our core
communications service business and will form an integral part
of that business. The equipment distribution and provisioning
business is a lower margin business but critical to our strategy
because we believe our ability to offer state of the art
equipment will enhance all of our service offerings."
"The service business is expected to add more than $15 million
in quarterly revenue to our overall revenue this year," added
Lord. "The equipment distribution and provisioning business --
which we are purchasing outside of our existing credit
facilities and which will therefore not be included in any
covenant calculations -- is also expected to add more than $15
million in quarterly revenue."
Based in Dallas, Allegiance Telecom is a national facilities-
based integrated communications provider offering businesses a
complete package of telecommunications services, including
local, long distance, international calling, high-speed data
transmission and Internet services. Allegiance is currently
operational in 36 U.S. markets including Atlanta, Austin,
Baltimore, Boston, Chicago, Cleveland, Dallas, Denver, Detroit,
Fort Lauderdale, Fort Worth, Houston, Long Island, Los Angeles,
Miami, Minneapolis/St. Paul, New York, Northern New Jersey,
Oakland, Ontario/Riverside CA, Orange County, Philadelphia,
Phoenix, Pittsburgh, Portland, Sacramento, St. Louis, San
Antonio, San Diego, San Francisco, San Jose, Seattle, Tampa,
Washington D.C., West Palm Beach/Boca Raton and White Plains,
NY.. The Company's Web address is: http://www.algx.com
Allegiance's common stock is traded on the Nasdaq National
Market under the symbol ALGX.
As reported in Troubled Company Reporter's June 6, 2002 edition,
Standard & Poor's junked Allegiance Telecom's credit rating,
citing revenue target concerns.
AMES DEPARTMENT: Amends DIP Pact to Permit Kimco Sale-Leaseback
---------------------------------------------------------------
In a separate application, Ames Department Stores, Inc., and its
debtor-affiliates want to consummate an agreement with KRC
Acquisition Corp., an affiliate of Kimco Funding LLC, for the
sale and lease-back of certain of the Debtors' fee-owned
properties and the assignment of two real property leases and a
sublease. However, because the DIP Lenders have first liens and
security interests against the properties pursuant to the Credit
Agreement, the Debtors have requested, and the Lenders have
agreed, to modify the DIP Credit Agreement to, inter alia,
provide for the DIP Lenders' consent to the Kimco transaction.
Also, in light of recent results and because the Debtors have
initiated additional store closings, and they would like the
flexibility to make further store closings should their action
be appropriate, the Debtors requested that the Lenders amend
certain other provisions of the Credit Agreement. Accordingly,
the Debtors ask the Court to approve the proposed Sixth
Amendment to the Credit Agreement.
Frank A. Oswald, Esq., at Togut, Segal & Segal LLP, in New York,
New York, tells the Court that GE Capital and the other DIP
Lenders are willing to the release of their liens against the
Properties and to the sale-leaseback transaction with KRC (or
with other entity making the higher or better offer), if each of
these conditions are met:
A. the aggregate cash purchase price will be not less than
$59,000,000;
B. the entire proceeds from the sale-leaseback transaction will
have been applied as and to the extent set forth in the Sixth
Amendment, which states that $2,500,000 of the proceeds will
be used to permanently repay indebtedness under the Kimco DIP
agreement;
C. the sale-leaseback transaction and all agreements and
documents entered into by any Credit Party in connection
therewith must be satisfactory to GE Capital;
D. the Bankruptcy Court will approve the terms and conditions of
the sale-leaseback transaction, including, without
limitation, the auction and bid procedures for the
transaction, pursuant to an order in form and substance
satisfactory to GE Capital; and,
E. the remaining proceeds, which must be at least $55,900,000,
must be applied to the Loans owed to GE Capital and the DIP
Lenders in accordance with provisions of the Credit
Agreement. This payment will be without any reduction in the
amount of the Commitments.
The Sixth Amendment should also provide authorization for GE
Capital to execute and deliver any releases of mortgages and
liens and enter into an amendment to the DIP Inter-creditor
Agreement or a new inter-creditor agreement with Kimco to the
extent necessary or desirable.
Mr. Oswald further claims that the Lenders have agreed as well
that the Debtors may return certain point of sale (POS)
equipment, which is no longer needed by the Debtors because of
the store closings. The Debtors may return POS equipment, which
constitutes part of the Lenders' collateral, with a current fair
market value not exceeding $3,000,000 in the aggregate, to
secured parties with a perfected pre-petition security interest
in the equipment. The Lenders have also decided to subordinate
the lien of GE Capital, on behalf of itself and the Lenders,
under the DIP Order to the lien of those secured parties. This
is provided, that, each secured party proves that it has a valid
and perfected first-priority pre-petition security interest in
the POS equipment.
Accordingly, the amendments to the Credit Agreement and certain
financial covenants, as agreed-upon, include:
A. The advance rate for Eligible In-Transit Inventory set forth
in the "Revolver Borrowing Base" to the Credit Agreement will
be increased from 60% to 70%, with a maximum permitted
increase to the borrowing availability of $3,500,000;
B. The "Term Borrowing Base" will be an amount, as determined by
GE Capital, equal to the lesser of:
a. 7.5% of the book value of Borrower's Eligible Inventory
(other than Eligible L/C Inventory and Eligible In-Transit
Inventory) valued at the lower of cost (determined on a
first-in, first-out basis) or market; and,
b. 7.5% of the net appraised liquidation value, as determined
by the Most Recent Inventory Appraisal, of Borrower's
Eligible Inventory (other than Eligible L/C Inventory and
Eligible In-Transit Inventory), less any Reserves
established by GE Capital at that time. In no event
whatsoever shall any Term Loans be made against the value
of any Real Estate."
C. The fixed charge coverage ratio and the minimum inventory
covenants will be eliminated for a period of time;
D. The number of stores the Debtors may close in the future will
be increased by 60 (to a total of 140);
E. The Debtors' minimum availability requirements will be
increased from $25,000,000 to $30,000,000;
F. There will be no covenant test, other than minimum
availability, for the month of May 2002;
G. A minimum free cash flow test will be added; and,
H. The existing financial covenants will be modified to better
reflect current projected financial performance by the
Debtors.
The Sixth Amendment will not increase the amount of total
borrowing authorized by this Court in the DIP Order.
Mr. Oswald accords that Ames will pay an amendment fee to GE
Capital:
A. for the account of each Revolving Lender upon its approval of
this Amendment in an amount equal to 0.10% (i.e., 10 basis
points) of the aggregate of the approving Revolving Lenders'
Revolving Loan Commitments; and,
B. for the account of the Term Lender upon its approval of this
Amendment in an amount equal to $115,000.
Mr. Oswald relates that, in consideration of the various
concessions and modifications being made by GE Capital and the
Lenders in the Sixth Amendment, they will receive an amendment
fee estimated in the aggregate at $740,000. The Debtors believe
that the fee is fair and reasonable under the circumstances.
The New Financial Covenants
A. Minimum Revolver Borrowing Availability. Ames agrees that:
a. during the period from December 15 through March 15,
inclusive, of each year, it will maintain a Revolver
Borrowing Availability of at least $75,000,000; and,
b. during the period from March 16 through December 14,
inclusive, of each year, it will maintain a Revolver
Borrowing Availability of at least $30,000,000;
These agreements are conditioned, however, on that, if
Revolver Borrowing Availability on any day during the period
from January 31, 2002 through March 15, 2002, inclusive,
exceeds $125,000,000, and after taking into effect any
Advances requested by Ames to be made on that day, then, only
on that day, will Ames maintain a Revolver Borrowing
Availability of at least $50,000,000.
B. Minimum Fixed Charge Coverage Ratio. Ames must maintain, on a
consolidated basis for the 12-month period ended, a Fixed
Charge Coverage Ratio of no less than these amounts, unless
the covenant is not tested for that period. In this event
there will be no Minimum Fixed Charge Coverage Ratio covenant
for that period:
0.44 for the Fiscal Month ending on October 6, 2001;
0.37 for the Fiscal Month ending on November 3, 2001;
0.37 for the Fiscal Month ending on December 1, 2001;
0.33 for the Fiscal Month ending on January 5, 2002;
0.37 for the Fiscal Month ending on February 2, 2002;
0.41 for the Fiscal Month ending on March 2, 2002;
0.45 for the Fiscal Month ending on April 6, 2002;
0.41 for the Fiscal Month ending on May 4, 2002;
Covenant not tested for the Fiscal Month ending June 1, 2002;
Covenant not tested for the Fiscal Month ending July 6, 2002;
Covenant not tested for the Fiscal Month ending Aug 3, 2002;
Covenant not tested for the Fiscal Month ending Aug 31, 2002;
Covenant not tested for the Fiscal Month ending Oct 5, 2002;
Covenant not tested for the Fiscal Month ending Nov 2, 2002;
Covenant not tested for the Fiscal Month ending Nov 30, 2002;
Covenant not tested for the Fiscal Month ending Jan 4, 2003;
Covenant not tested for the Fiscal Month ending Feb 1, 2003;
0.75 for the Fiscal Month ending on March 1, 2003 and each
Fiscal Month thereafter.
C. Minimum Inventory. At the end of each Fiscal Month, Ames'
total Inventory (at book value, valued at the lower of FIFO
cost or market), must be no less than these amounts, unless
the covenant is not tested at the end of that Fiscal Month.
In this event there will be no Minimum Inventory covenant for
that Fiscal Month:
$578,660,000 for the Fiscal Month ending on October 6, 2001;
$677,677,000 for the Fiscal Month ending on November 3, 2001;
$682,028,000 for the Fiscal Month ending on December 1, 2001;
$463,040,000 for the Fiscal Month ending on January 5, 2002;
$549,352,000 for the Fiscal Month ending on February 2, 2002;
$595,951,000 for the Fiscal Month ending on March 2, 2002;
$619,174,000 for the Fiscal Month ending on April 6, 2002;
$631,605,000 for the Fiscal Month ending on May 4, 2002;
Covenant not tested for the Fiscal Month ending June 1, 2002;
Covenant not tested for the Fiscal Month ending July 6, 2002;
Covenant not tested for the Fiscal Month ending Aug 3, 2002;
Covenant not tested for the Fiscal Month ending Aug 31, 2002;
Covenant not tested for the Fiscal Month ending Oct 5, 2002;
Covenant not tested for the Fiscal Month ending Nov 2, 2002;
Covenant not tested for the Fiscal Month ending Nov 30, 2002;
Covenant not tested for the Fiscal Month ending Jan 4, 2003;
Covenant not tested for the Fiscal Month ending Feb 1, 2003;
$595,951,000 for the Fiscal Month ending on March 1, 2003;
$619,174,000 for the Fiscal Month ending on April 5, 2003;
$631,605,000 for the Fiscal Month ending on May 3, 2003;
$632,498,000 for the Fiscal Month ending on May 31, 2003;
$585,602,000 for the Fiscal Month ending on July 5, 2003;
$584,560,000 for the Fiscal Month ending on August 2, 2003;
$628,553,000 for the Fiscal Month ending on August 30, 2003;
provided, that, these minimum Inventory amounts assume that
Ames is operating 403 stores. It is further provided, that,
on commencement of any store closing, the minimum Inventory
amount for the Fiscal Month during which a store closing will
have commenced and for each Fiscal Month thereafter must be
decreased by $1,500,000 for each store closing.
D. Minimum Trade Payables. Ames must have total trade payables
of not less than:
$50,000,000 for the Fiscal Month ending on July 6, 2002;
$50,000,000 for the Fiscal Month ending on August 3, 2002;
$60,000,000 from August 4, 2002 to August 10, 2002;
$75,000,000 from August 11, 2002 to August 17, 2002;
$80,000,000 from August 18, 2002 to August 24, 2002;
$90,000,000 from August 25, 2002 to August 31, 2002;
$80,000,000 for the Fiscal Month ending on October 5, 2002;
$90,000,000 from October 6, 2002 to October 19, 2002;
$100,000,000 from October 20, 2002 to November 2, 2002;
$100,000,000 for the Fiscal Month ending on November 30,2002;
$50,000,000 for the Fiscal Month ending on January 4, 2003;
$50,000,000 for the Fiscal Month ending on February 1, 2003
and at all times thereafter;
provided, that, the minimum trade payables amounts assume
that Ames is operating 333 stores. It is further provided
that on commencement of any store closing, the minimum trade
payables amount for the period during which a store closing
will have commenced and for each period thereafter will be
decreased by the percentage equal to the product of:
a. 0.30% times
b. the total number (without duplication) of those store
closings;
E. Minimum Free Cash Flow. Ames must have on a consolidated
basis, EBITDA less Interest Expense, less Capital
Expenditures for that period of not less than:
($7,144,000) from June 2, 2002 to July 6, 2002;
($20,130,000) from June 2, 2002 to August 3, 2002;
($29,044,000) from June 2, 2002 to August 31, 2002;
($35,300,000) from June 2, 2002 to October 5, 2002;
($29,677,000) from June 2, 2002 to November 2, 2002;
($15,080,000) from June 2, 2002 to November 30, 2002;
$0 from June 2, 2002 to January 4, 2003;
$0 from June 2, 2002 to February 1, 2003;
provided, however, that, if Revolver Borrowing Availability
on each and every day of the last Fiscal Month included in
any period was $100,000,000 or greater, then Ames will not be
subject to the Minimum Free Cash Flow covenant for that
period.
Amendment No. 6 to the DIP Credit Agreement identifies the
current members of DIP Lending Consortium:
* General Electric Capital Corporation
* Foothill Capital Corporation
* Foothill Income Trust Ii, L.P.
* GMAC Business Credit, LLC,
* Heller Financial, Inc.
* Fleet Retail Finance, Inc.
* Standard Federal Bank National Association
* Textron Financial Corporation
* RZB Finance LLC
* Congress Financial Corporation
* National City Commercial Finance
* Oxford Strategic Income Fund
* Eaton Vance Institution Senior Loan Fund
* Eaton Vance Senior Income Trust
* Grayson & Co.
* Senior Debt Portfolio
* The CIT Group/Business Credit, Inc.
Mr. Oswald submits that approving the Sixth Amendment will
enable the Debtors to, among other things, consummate the KRC
transaction, subject to higher or better offers and Bankruptcy
Court approval. This is projected to provide the Debtors with
approximately $21,500,000 in additional liquidity as they enter
their all-important back-to-school and holiday-selling seasons.
The Debtors foresee this additional liquidity as absolutely
essential to the Debtors' reorganization efforts as it provides
vendors with reassurance as to the Debtors' ability to pay for
shipments when due.
Mr. Oswald further expects that the Sixth Amendment will also
allow the Debtors to remain in compliance with the financial
covenants in light of their store closings and concomitant
reduced operations. Thus, the Debtors will avoid a default
under the Credit Agreement. They will also be able to return
unneeded POS equipment to secured equipment lessors, which will
further reduce postpetition operating expenses.
* * *
Ames Department Stores, Inc. (OTC: AMESQ) announced that it has
entered into agreements with the current lenders to its DIP
Credit Agreement, led by GE Capital as agent, to amend its
current DIP Credit Agreement and with KRC Acquisition Corp., an
affiliate of Kimco Realty Corporation, for the sale and
leaseback of certain of its properties.
The new agreements, which have been filed with the U.S.
bankruptcy court, will result in approximately $25 million in
additional availability for Ames. This additional availability
will be for Ames' unrestricted use, providing increased
liquidity for Ames' retail operations. Both the amendment to the
DIP Credit Agreement and the agreement with Kimco require
bankruptcy court approval. A hearing date has been scheduled for
June 19, 2002.
According to Ames Chairman and Chief Executive Officer Joseph R.
Ettore, "These two agreements and the resulting increase in
availability show the significant impact of the actions that we,
together with our lenders have taken to improve liquidity.
Together with our continued reductions in SG&A expenses, this
new funding substantially improves our financial position and
provides our vendor partners with the comfort level they need to
continue extending credit and merchandise shipments."
Ames Department Stores, Inc., is a regional, full-line discount
retailer with an associate base of 21,500 and annual sales of
approximately $2.7 billion. With stores in the Northeast, Mid-
Atlantic and Mid-West, Ames offers value-conscious shoppers
quality, name-brand products across a broad range of merchandise
categories. (AMES Bankruptcy News, Issue No. 19; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
Ames Department Stores' 10% bonds due 2006 (AMES06USR1), an
issue in default, are quoted at a price of 1, DebtTraders says.
For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=AMES06USR1
AMES DEPARTMENT: Receives Court Approval for New DIP Financing
--------------------------------------------------------------
Ames Department Stores, Inc. (OTC: AMESQ) has received interim
court approval to enter into agreements with the current lenders
to its DIP Credit Agreement, led by GE Capital as agent, to
amend its current DIP Credit Agreement and with KRC Acquisition
Corp., an affiliate of Kimco Realty Corporation for the sale and
leaseback of certain of its properties.
The new agreements, which have been filed with the U.S.
bankruptcy court, will result in approximately $25 million in
additional availability for Ames.
Ames Department Stores, Inc., is a regional, full-line discount
retailer with an associate base of 21,500 and annual sales of
approximately $2.7 billion. With stores in the Northeast, Mid-
Atlantic and Mid-West, Ames offers value-conscious shoppers
quality, name-brand products across a broad range of merchandise
categories. For more information about Ames, visit
http://www.AmesStores.comor http://www.AmesStores.com/espanol
APPLICA INC: S&P Raises Senior Secured Bank Loan Rating to BB-
--------------------------------------------------------------
Standard & Poor's raised its senior secured bank loan rating on
Miami Lakes, Florida-based Applica Inc.'s $205 million revolving
credit facility due December 2005 to double-'B'-minus from
single-'B'-plus.
At the same time, Standard & Poor's affirmed its single-'B'-plus
corporate credit rating on the small appliance manufacturer and
marketer. The outlook is stable. Total debt outstanding at March
31, 2002, was $205.2 million.
"The upgrade of Applica's bank facility to one notch above the
corporate credit rating reflects Standard & Poor's assessment of
the value of the company's discrete assets collateralizing the
credit facility. Important to the analysis, Standard & Poor's
considered the assets' potential to retain value over time and
in an orderly liquidation under a default scenario," said
Standard & Poor's credit analyst Martin Kounitz.
Standard & Poor's expects Applica to focus on margin improvement
over the intermediate term while maintaining credit protection
ratios appropriate for the rating.
For the first quarter ended March 31, 2002, Applica reported
EBITDA of $6.2 million versus $6.6 million the prior year, due
to sales declines caused by the bankruptcies of two customers
that were somewhat mitigated by higher margins as the company
returned to more normal levels of production.
With somewhat lower profitability, EBTIDA coverage of interest
expense for the 12 months ended March 31, 2002, adjusted for
operating leases, was 2.3 times, versus 2.9x the prior year.
Total debt to EBITDA at March 31, 2002, was 3.0x, the same as
the prior year, as debt reduction of about $57 million was
offset by lower profitability. Availability is solid at about
$47 million.
The ratings reflect Applica Inc.'s leveraged financial profile,
and its participation in the small household appliance industry,
which is mature. Standard & Poor's attributes a high level of
business risk to this industry because of its relatively low
margins and intense competition. These factors are partially
mitigated by the strength of the Black & Decker brand name and
the company's good cost structure.
AQUASEARCH INC: Hawaii Court Confirms Plan of Reorganization
------------------------------------------------------------
The U.S. Bankruptcy Court in Hawaii Monday confirmed the plan of
reorganization submitted by Aquasearch, Inc. following an
overwhelming vote of approval by creditors and shareholders.
Said Richard D. Propper, MD, who will serve as the new Executive
Chairman of the Board of Directors, "The strikingly high level
of support for the plan reaffirms what those of us driving the
reorganization process have always believed -- that Aquasearch
is a company with tremendous untapped potential. During the
reorganization process we have helped orchestrate a number of
very positive events that are coming together for Aquasearch as
it emerges from Chapter 11. Among these are: a system-wide
distribution agreement with Long's Drug Stores for our first
commercial product, the AstaFactor(R), following an extremely
successful pilot launch in Hawaii and San Diego; commitment for
new investment that will provide continued financial support for
our plan; an agreement to expand distribution of AstaFactor(R)
and future products into mainland China; and commitments to
immediately begin the development of a Chinese production
facility to supply the highest quality, lowest-cost product
using Aquasearch's proprietary technology."
The plan also provides for the company to change its name to
Mera Pharmaceuticals, to signify the fresh start as well as the
intention to accelerate drug discovery and development
activities. Dr. Propper added that "we not only think that the
nutraceutical side of the business has tremendous potential, but
we also believe that the Company's unique set of assets is
equally well suited for the pharmaceutical business, where the
returns for investors are historically even greater.
Completing the execution of the plan is expected to take between
one and three months. However, control over company decisions
now lies with Aquasearch's management. Noted Dr. Propper, "With
confirmation in hand, there is no need for us to wait. We will
immediately begin to implement the plans devised over the last
half year that are intended to make Aquasearch extremely
successful."
ASHANTI GOLDFIELDS: Noteholders Approve Scheme of Arrangement
-------------------------------------------------------------
Ashanti Goldfields Company Limited announces that at the meeting
of the registered holders at the record date of 5.00 p.m. (New
York time) on 16 May 2002 of the 5-1/2% Exchangeable Notes due
2003, in connection with the proposed restructuring of the
Existing Notes, held Monday, 17 June 2002, the Resolution
approving the proposed Scheme of Arrangement between Ashanti
Capital Limited and its Noteholders was passed by the requisite
majority.
The number of votes cast in favor of the Scheme was
US$199,853,000 representing 91.43% of the outstanding Existing
Notes. No votes were cast against the Scheme.
The Scheme is still subject to the approval of the Grand Court
of the Cayman Islands at the hearing which is due to take place
at 11.00 a.m. (New York time) on 2 July 2002 at the Grand Court
of the Cayman Islands, George Town, Grand Cayman, Cayman
Islands, British West Indies. Noteholders and the holders of
beneficial interests in Existing Notes at the Record Date are
entitled to attend the hearing.
Certain other conditions to the Scheme becoming effective have
yet to be fulfilled including but not limited to:
- approval of the Scheme by the shareholders of Ashanti
at the Extraordinary General Meeting of Ashanti to be held on 28
June 2002;
- the granting of a permanent restraining order under
s304 of the United States Bankruptcy Code enforcing the terms of
the Scheme in the United States; and
- admission of the new securities to be issued pursuant
to the Scheme to (i) the New York Stock Exchange and (ii) the
Official List of the United Kingdom Listing Authority and to
trading on the London Stock Exchange.
Subject to all the conditions to the Scheme being satisfied or,
where appropriate, waived by Ashanti and no alternative to the
Proposed Restructuring being recommended by the board of
Ashanti, the Scheme is expected to become effective not earlier
than 11 July 2002.
All persons choosing to exercise their rights under the Mix and
Match Election opted to receive a higher amount of new Ashanti
global depositary securities rather than a higher amount of the
new exchangeable notes being offered under the terms of the
Scheme. No countervailing elections were made for New Notes and,
therefore, if sanctioned, Note Investors will receive their
basic entitlement under the Scheme.
Note: Investors are reminded that, in order to receive the
consideration due under the Scheme, they must still submit
properly endorsed and executed Voting Instruction and Release
Forms with Parts A and D completed to The Bank of New York in
accordance with the instructions on those forms. Unless such
properly endorsed and executed forms are received by The Bank of
New York by 31 December 2003, the New Securities to be issued
under the Scheme will be repurchased by Ashanti for a total of
US$1.00 and the cash will be repaid to Ashanti. Until such time,
the Scheme Consideration will be held in escrow by Ashanti
Capital Limited.
No assignment or transfer of a beneficial interest in an
Existing Note after the Record Date will be recognised for the
purposes of determining entitlements to receive any Scheme
Consideration. Accordingly, any proposed transferee or
transferor after the Record Date should read carefully all the
documentation sent out to Noteholders and Note Investors in
connection with the Scheme and should ensure (i) that the
account holder in DTC through whom the relevant Existing Notes
were held at the Record Date is authorised by the original Note
Investor (i.e. the beneficial holder of the Existing Notes at
the Record Date) to distribute any consideration received under
the Proposed Restructuring directly to the transferee, and (ii)
that the original Note Investor completes and delivers the
Voting Instruction and Release Form in accordance with the
instructions set out in the Scheme Documentation.
Further to the announcement on 10 June 2002, Ashanti is
continuing to evaluate an alternative restructuring proposal.
However, Ashanti wishes to reiterate that the Proposed
Restructuring continues to be recommended by the Board and that
in the absence of any alternative proposal being recommended by
Ashanti's Board, the Directors of Ashanti urge Securityholders
to vote in favor of the Proposed Restructuring.
BANYAN STRATEGIC: Northlake Purchaser Extends Due Diligence Time
----------------------------------------------------------------
Banyan Strategic Realty Trust (Nasdaq: BSRTS) has executed an
amendment of the real estate sale contract pertaining to the
Trust's single remaining property, Northlake Tower Festival
Mall, which had been scheduled to close on July 17, 2002.
The amendment extends the due diligence period from June 17,
2002 to June 19, 2002. The brief two-day extension of the due
diligence period was granted at the purchaser's request, in
order to allow the purchaser to reschedule a board of directors
meeting, from June 14 to June 19.
Pursuant to the contract, as amended, the purchaser may
terminate the contract without any penalty prior to the end of
the due diligence period. On June 19, 2002, if the purchaser
elects not to terminate, the purchaser must increase its earnest
money deposit, from $200,000 to $400,000, and thereafter is
entitled to termination without penalty, only if the Trust's
first mortgage lender fails to approve the purchaser's
application for loan assumption. A decision on that application
is now anticipated in early to mid-August.
The Trust also announced that it is negotiating with the
purchaser a proposed second amendment, that, if executed, would
extend the period within which the purchaser must obtain
approval of the assumption of the Trust's first mortgage loan,
from June 10, 2002 to August 25, 2002, and would extend the
closing date from July 17, 2002 to September 17, 2002. The Trust
noted that the amendment was necessitated by a longer than
anticipated approval procedure for the assumption of the Trust's
first mortgage loan, a key element of the transaction.
Liquidating Distribution
The Trust announced that it will make a fourth interim
liquidating distribution, in the amount of $0.20 per share, on
July 15, 2002, to shareholders of record as of July 1, 2002.
Giving effect to the fourth distribution, the Trust will have
made liquidating distributions totaling $5.45 per share since
adopting its Plan of Termination and Liquidation in January of
2001.
L. G. Schafran, Chairman, CEO and Interim President of Banyan,
commented on the distribution, stating: "We are pleased to
announce this additional distribution to our shareholders, which
arises from the settlement of post- closing items in the
Denholtz transaction (announced on May 15, 2002), and the
receipt of almost $2 million in notes receivable (announced on
June 4, 2002). With the delay in the anticipated receipt of the
Northlake sale proceeds, and in keeping with our stated policy
of making distributions as conditions warrant, we have
determined to distribute this money sooner, and not to await the
Northlake closing before making this distribution."
Nasdaq Delisting
In other news, the Trust stated that the previously-announced
hearing before The Nasdaq Listing Qualifications Panel, to
review a staff determination that the Trust's shares of
beneficial interest ought to be immediately delisted, is
proceeding on June 20, 2002 as scheduled. The Trust reiterated
that there can be no assurance that the Panel will grant the
Trust's request for continued listing on the Nasdaq National
Market System. The Trust also noted that if delisting does
occur, the Trust will not receive any advance notice of the
Nasdaq determination.
If the Trust is not successful in obtaining continued listing on
Nasdaq, the Trust intends to list its shares of beneficial
interest on the Over the Counter Bulletin Board.
Levine Litigation
The Trust added that the ongoing litigation between the Trust
and its suspended president, Leonard G. Levine, continues.
Written discovery is now scheduled to close on September 30,
2002 and oral fact discovery is scheduled to close on October
31, 2002. All expert witness disclosure and depositions are to
be concluded by December 13, 2002. The Trust currently
anticipates a trial date in the first or second quarter of 2003.
Banyan Strategic Realty Trust is an equity Real Estate
Investment Trust (REIT) that adopted a Plan of Termination and
Liquidation on January 5, 2001. On May 17, 2001, the Trust sold
approximately 85% of its portfolio in a single transaction.
Other properties were sold on April 1, 2002 and May 1, 2002.
Banyan now owns a leasehold interest in one (1) real estate
property located in Atlanta, Georgia, representing approximately
9% of its original portfolio. This property is subject to a
contract of sale, currently scheduled to close on July 17, 2002,
but is expected to be extended to a September 17, 2002 closing
date. Since adopting the Plan of Termination and Liquidation,
Banyan has made liquidating distributions totaling $5.25 per
share. An additional distribution of $0.20 per share is
scheduled for July 15, 2002. As of this date, the Trust has
15,496,806 shares of beneficial interest outstanding.
BEACON POWER: Falls Below Nasdaq Minimum Listing Requirements
-------------------------------------------------------------
Beacon Power Corporation, (Nasdaq: BCON) a developmental-stage
manufacturer of flywheel energy storage systems that provide
highly reliable, high-quality uninterruptible electric power
announced its intention to transfer to Nasdaq SmallCap Market.
On June 12, 2002, Beacon Power Corporation received a Nasdaq
Staff Determination that Beacon's common stock during the 90-day
period ending on June 11, 2002 had not maintained a closing bid
price of $1.00 per share for the ten consecutive trading days
necessary to qualify for continued listing on the National
Market System, and that its common stock was therefore subject
to delisting from the Nasdaq National Market. Beacon believes
that it meets all the criteria to have its common stock listed
on the Nasdaq SmallCap Market and has applied for that listing.
If Beacon's stock is listed on the SmallCap market, it would be
eligible for relisting on the National Market System if it
maintains a closing bid price of $1.00 for 30 consecutive
trading days.
"Over 2,000 smaller companies are traded in the Nasdaq SmallCap
Market," stated Jim Spiezio, vice-president and CFO of Beacon
Power. " Daily trading volume and closing price information
continues to be available on the same basis as before from on-
line services, financial newspapers, and general circulation
newspapers. It is the Company's intention to re-file for listing
on NASDAQ's National Market if eligibility requirements for that
market are once again achieved."
Beacon Power Corporation designs, manufactures, and markets
advanced flywheel technology products that provide reliable
electric power required by the information economy. Beacon Power
Corporation is the only company to have developed a flywheel
made from proprietary composite materials that can store and
deliver the energy needed for long-duration backup of remote
communications sites. Beacon Power Corporation is initially
targeting the power quality and reliability market with products
that offer significant advantages over environmentally hazardous
lead-acid battery back-up power systems, including higher
reliability, longer life, reduced maintenance, quicker
recharging, remote monitoring and environmental friendliness.
For more information, please contact Tom Nealon, Director of
Investor Relations at Beacon Power Corporation, tel.
978.661.2033; fax 978.694.9194; email nealon@beaconpower.com; or
send mail to 234 Ballardvale Street, Wilmington, MA 01887. Visit
Beacon Power on the Internet at http://www.beaconpower.com
BETHLEHEM STEEL: Court Issues Budget Protocol for Fee Committee
---------------------------------------------------------------
Under a Supplemental Order, Judge Lifland releases the Budget
Procedures that will govern the Joint Fee Review Committee in
Bethlehem Steel Corporation's chapter 11 cases:
(a) each Covered Professional, other than those retained
pursuant to fixed fee arrangements, will prepare and
submit to the Joint Fee Review Committee:
(1) a four-month budget -- Budget Period -- for
professional fees at least 15 days prior to the
commencement of each period, except for the first
Budget Period for which Budgets will be submitted by
June 20, 2002; and
(2) a revised Budget, where applicable, during the Budget
Period;
(b) effective for the period beginning June 1, 2002 through
September 30, 2002, the length of each Budget Period
will be four months, with Interim Applications filed at
the conclusion of each four-month period;
(c) the duties of the Joint Fee Review Committee are hereby
expanded, so that the Joint Fee Review Committee will:
(1) consider the Budgets submitted by each Covered
Professional;
(2) make recommendations to the Covered Professionals
with respect to the Budgets;
(3) consider Amended Budgets, to the extent submitted by
Covered Professionals;
(4) review each Covered Professional's interim fee
application in light of the projections set forth in
its Budget and Amended Budget, if any, and the tasks
actually performed by the Covered Professional; and
(5) make recommendations to the Court regarding the
amounts sought by each Covered Professional in each
Interim Application;
(d) each Covered Professional's monthly statement of all
professional fees and disbursements incurred during the
preceding calendar month, as set forth in that certain
Order Establishing Procedures for Interim Compensation
and Reimbursement of Chapter 11 Professionals and
Committee Members, dated October 15, 2001, in addition to
containing:
(1) a summary schedule of fees and hours of legal service
performed that month;
(2) a schedule of disbursements incurred by the
respective Covered Professional during that month;
and
(3) a general description of the major services performed
by the respective Covered Professional during that
month, will also contain a comparison of the amount
of actual fees for the Budget Period to the total
amount of fees in the respective Covered
Professional's Budget divided and allocated to
correspond to the matters listed in the Covered
Professional's Budget;
(e) the Debtors and each member of the Joint Fee Review
Committee will have 15 days after receipt of each
Monthly Fee Statement to review the Monthly Fee
Statement. Any member of the Joint Fee Review Committee
having an objection to a Professional's Monthly Fee
Statement may, before the expiration of the 15-day
review period, call for a meeting of the Joint Fee Review
Committee, which meeting will be convened, either by
telephone or in person, as soon as practicable
thereafter;
(f) at any meeting, the Joint Fee Review Committee will
consider the objection and determine whether the amount
of the fees to be paid pursuant to the Monthly Fee
Statement should be reduced. The Joint Fee Review
Committee will act by at least a majority of its members
provided that a quorum of at least two of the three
members of the Joint Fee Review Committee are present at
the meeting. Any determination by the Joint Fee Review
Committee to reduce the Covered Professional's fees is
without prejudice to the Covered Professional's right to
request allowance of the entire fee amount by the
submission of a fee application to the Court in
accordance with the procedures set forth in section (j);
(g) if a meeting of the Joint Fee Review Committee has not
been called by any member of the Joint Fee Review
Committee at the conclusion of the review period, the
Monthly Fee Statement will be deemed conditionally
approved;
(h) within 15 days after the conditional approval of a Monthly
Fee Statement, the Debtors must pay 80% of the amount of
the fees and 100% of the disbursements set forth in the
Monthly Fee Statement, other than the Monthly Fee
Statements of professionals retained pursuant to fixed fee
arrangements as to whom the Debtors will pay 100% of the
fixed fee amount;
(i) a determination by the Joint Fee Review Committee with
respect to any Monthly Statement, fee application or
Budget will not prejudice the right of any member to
object to a Monthly Statement, fee application or
budgeted items;
(j) each of the Covered Professionals must file every 120
days, but no more than every 150 days, an Interim
Application seeking Court approval and allowance
pursuant to Sections 330 and 331 of the Bankruptcy Code
of the compensation and reimbursement of expenses
requested in each particular Interim Application;
(k) the first Interim Application pursuant to these Budget
Procedures shall be filed on or about November 15, 2002,
and every subsequent Interim Application must be filed
approximately 120 days, but no more than 150 days
thereafter;
(l) each Interim Application will be in a format
substantially similar to the Monthly Fee Statements, and
in addition will include the Professional's actual time
records and certifications in compliance with the
Guidelines for Reviewing Applications for Compensation
and Reimbursement of Expenses Under 11 U.S.C. Section 330
and the Amended Guidelines for Fees and Disbursements for
Professionals in the Southern District of New York
Bankruptcy Cases;
(m) Interim Applications must be filed with the Court and
served in accordance with the Order Establishing
Notice Procedures, dated October 15, 2001, establishing
notice requirements for these Chapter 11 cases; and
(n) all payments of interim compensation and reimbursement of
expenses of Covered Professionals will be subject to
final allowance by the Court. If the Court finds that any
payment of compensation or reimbursement of expenses of a
Covered Professional is excessive or improper, that
Covered Professional will be obligated to and must
promptly disgorge that amount found to be excessive or
improper. (Bethlehem Bankruptcy News, Issue No. 17;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
Bethlehem Steel Corporation's 10.375% bonds due 2003 (BS03USR1),
DebtTraders reports, are quoted at 10. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BS03USR1for
real-time bond pricing.
CANDLEWOOD HOTEL: Names Richard Kelleher to Board of Directors
--------------------------------------------------------------
Candlewood Hotel Company, Inc. (Nasdaq: CNDL) announced that
Richard M. Kelleher has been elected to serve on the Company's
Board of Directors. Mr. Kelleher has served as principal of
Pyramid Advisors, LLC, a hotel management and advisory firm he
founded, since March 1999. From 1997 to 1999, Mr. Kelleher was
the president and chief operating officer of Promus Hotel
Corporation, the successor company to the Doubletree and Guest
Quarters hotel entities. Prior to that time, Mr. Kelleher was
the president and chief executive officer of the Doubletree
Hotel Corporation, from 1992 through 1997.
"We are delighted that Rick has joined our Board. His extensive
industry knowledge and depth of experience in running successful
lodging corporations will be invaluable to us as we move
forward," said Jack P. DeBoer, Candlewood's chairman and chief
executive officer.
Candlewood Hotel Company, headquartered in Wichita, Kansas,
owns, operates and franchises Candlewood Suites and Cambridge
Suites - hotel properties that offer high-quality accommodations
for all guests, while catering to mid-market and upscale
business and personal travelers seeking multiple night stays.
Jack DeBoer, Chairman and CEO and founder of Residence Inn,
started Candlewood Hotel Company in late 1995.
* * *
As previously reported, Candlewood Hotel Company, Inc. (Nasdaq:
CNDL) intends to apply to list its common stock on the Over the
Counter Bulletin Board. The decision was made following receipt
of a notice from The Nasdaq SmallCap Market that it no longer
satisfies the net tangible assets continued listing requirements
of The Nasdaq SmallCap Market. The Companies securities are
anticipated to be delisted from The Nasdaq SmallCap Market on
the close of business June 19, 2002.
CANFIBRE GROUP: Talking with Bondholders to Cure Defaults
---------------------------------------------------------
The CanFibre Group Ltd. (TSX VENTURE:YCF), a producer of high
margin specialty Medium Density Fibreboard products, has
successfully arranged interim working capital totaling in excess
of US$1 million. The funding comes from two sources including
Santarosa Sales and Service, a company associated with
CanFibre's largest wood supplier, and Savannah Land Holdings, a
company wholly owned by CanFibre US Limited which, in turn, is
wholly owned by The CanFibre Group Ltd.
Under the terms of the Santarosa agreement, Santarosa agrees to
purchase up to US$500,000 of inventory in advance of it being
sold to CanFibre customers and to pay for such purchases within
48 hours of the transaction. Santarosa will charge a 3% handling
fee for such purchases. This agreement is for a term of 6 months
commencing June 14, 2002 and may be extended or increased by
mutual consent of the parties.
Under the terms of the SLH agreement, SLH agrees purchase up to
US$365,000 based on receivables owned by CanFibre of Lackawanna.
SLH will pay 98% of the value of the receivable at the time of
the purchase and will continue to purchase receivables as
requested by CanFibre provided the amount outstanding does not
exceed the limit at any time. This facility is available for a
term of 3 months and may be extended or increased by mutual
consent of the parties.
In addition to the above, CanFibre recently generated an
additional US$135,000 from a sale of a parcel of land originally
owned by Global Shelter Systems, a predecessor company to
CanFibre and acquired by CanFibre when CanFibre acquired GBS in
1992 to become a publicly traded company. The land consisted of
36.8 acres of undeveloped, residential zoned land near St.
Augustine Florida. The land was sold for $230,000 and after the
necessary purchase of right-of-way rights and payment of unpaid
taxes; the net amount received by CanFibre totaled $135,000.
These funds are also being used for working capital purposes in
addition to $365,000 of receivables purchasing available from
SLH.
CanFibre will ultimately seek a more conventional working
capital line of credit to replace these facilities, as CanFibre
is able to build its own credit rating with institutional
lenders. CanFibre also intends to seek a small private placement
of equity to augment the working capital.
CanFibre of Lackawanna is currently in default of its bonds
because it has not made interest payments that were due December
1, 2001 and June 1, 2002. Provided that CanFibre continues to
meet its ongoing working capital requirements, no action is
expected by the bondholders that would result in any kind of
acceleration of the bonds. In addition, CanFibre and its
bondholders are engaged in good-faith discussions to determine
ways to cure the default.
The CanFibre Group Ltd. is engaged in the worldwide development
and operation of manufacturing plants to produce high quality
wood panel products such as medium density fibreboard from
environmentally sensitive wood sources including the use of 100%
recycled dry waste wood normally destined for landfill.
CanFibre's ALLGREEN(R) MDF is North America's first 100% "green"
panel board. The CanFibre Group derives competitive advantage by
locating in urban areas close to the waste wood fibre supply and
close to end use customers as well as through the use of
patented pressing technology that allows CanFibre to produce a
series of specialty products that can not be produced
economically by conventional producers. ALLGREEN(R) MDF and
CanFibre MDF are marketed through wholesale distributors,
manufacturers and retailers throughout North America.
CELLPOINT INC: Appoints Three New Board of Directors Members
------------------------------------------------------------
CellPoint Inc. (Nasdaq: CLPT), a global provider of mobile
location software technology and platforms, announced that Carl
Johan Tornell, Donald Lilly, and Henrik Andersson have been
appointed to the Board of Directors of CellPoint Inc. Lynn
Duplessis, Peter Henricsson and Jan Rynning have resigned from
the board.
"I am very pleased to announce these new board members for
CellPoint. The addition of these directors not only reinforces
the board, but is also a clear sign that CellPoint is emerging
with timely focus after a year of financial restructuring and
difficult market conditions," said Stephen Childs, Chairman and
CEO of CellPoint.
Carl Johan Tornell, the President of CellPoint, has been
involved with the Company over the past year and brings broad
management and financial experience to the CellPoint team. Prior
to joining CellPoint, he was with Tornell and Partenaris were he
provided corporate advisory services to international companies.
Donald Lilly is currently a member of the Nomination Committee
and Advisory Board of CellPoint. He is a retired senior partner
of Lilly, Anderson, and Wilson plc. Mr. Lilly has also been a
director of several private companies in the technology and
asset management industries, and continues to serve as
consulting legal counsel to selected European and North American
companies.
Henrik Andersson is the founder and former President of
Stockholm Bors Information, the second Swedish Stock Exchange.
Prior to this he was a leading journalist and served as a member
of the Stockholm Chamber of Commerce for over four years.
"Peter Henricsson, Lynn Duplessis and Jan Rynning fully support
the new directors and have left the board to facilitate
CellPoint's new start," said Childs. "CellPoint appreciates the
vision and dedication that both Henricsson and Duplessis have
provided since inception. The Company also appreciates the time
Jan Rynning spent on the board throughout the financial
restructuring. The CellPoint board and executive management team
are committed to excellence through strengthening our
operations, growing our sales, and ensuring that CellPoint
remains a market leader in mobile location services," added
Childs.
CellPoint's board of directors now consists of Stephen Childs,
Henrik Andersson, Donald Lilly, Bengt Nordstrom, Lars Persson
and Carl Johan Tornell.
CellPoint Inc. (Nasdaq and Stockholmsborsen: CLPT) is a leading
global provider of location determination technology, carrier-
class middleware and applications enabling mobile network
operators rapid deployment of revenue generating location-based
services for consumer and business users and to address mobile
E911/E112 security requirements.
CellPoint's two core products, Mobile Location System and Mobile
Location Broker, provide an open standard platform adapted for
multi-vendor networks with secure integration of third-party
applications and content. CellPoint's location platform has a
seamless migration path from GSM/GPRS to 3G, supports 500,000
location requests per hour and can easily be scaled-up to handle
increased traffic throughput.
CellPoint's early entry and experience with European mobile
operators has allowed the development of products and features
that address key requirements such as active and idle mode
positioning, international roaming, multiple location
determination technologies and consumer privacy.
CellPoint is a global company headquartered in Kista, Sweden.
For more information, please visit http://www.cellpoint.com
COMDISCO INC: Seeks Okay to Replace Existing Letters of Credit
--------------------------------------------------------------
Comdisco, Inc., and its debtor-affiliates ask the Court to allow
them to:
(i) replace the existing cash collateralized letter of credit
issued by Bank of America with a letter of credit issued
by Fifth Third Bank; and
(ii) enter into a new letter of credit facility with Fifth
Third Bank in the aggregate amount of $12,000,000.
John Wm. Butler Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom, in Chicago, Illinois, relates that the Debtors customarily
obtain letters of credit with respect to obligations in their
operations. These letters of credit were used to:
(i) facilitate the fulfillment of real estate rental
guaranties on behalf of Venture customers;
(ii) maintain compliance with employment contracts;
(iii) make security deposits for insurance programs;
(iv) make security deposits for certain of their rental
property; and
(v) facilitate the purchase of equipment.
Mr. Butler states that Bank of America has issued a number of
letters of credit to the Debtors with a current outstanding
amount of approximately $6,000,000. However, Bank of America
has provided a notice that they will not renew the letters of
credit as they expire. Accordingly, since the beneficiaries of
Bank of America's letters of credit have received notice of non-
renewal, the beneficiaries have drawn on the letters of credit.
"The draws that the Debtors intend to reissue total
approximately $7,000,000," Mr. Butler adds.
In light of the foregoing, the Debtors want to replace the Bank
of America letters of credit and to replace certain Draws with
the New Letters of Credit. Mr. Butler explains that is it the
best interest of the Debtors to replace the Bank of America
letters of Credit because:
(a) the letters of credit entered into by the Debtors are
necessary in the conduct of their business;
(b) the New Letters of Credit, are, in aggregate, on terms as
favorable as the Bank of America Letters of Credit and do
not cause any detriment to the Debtors' estates;
(c) the certainty that the Debtors will obtain by entering
into a relationship with the new lender reduces the risk
faced by the Debtors without the new relationship;
(d) since there is no substantive change in any of the
relative economic and lien rights of parties in interest
if the Bank of America Letters of Credit are replaced,
there is no new money being advanced;
(e) the New Letter of Credit Facility is necessary in the
ordinary course of the Debtors' business to continue to
enter into agreements that may require the issuance of a
letter of credit;
(f) the New Letter of Credit Facility will send a message to
the beneficiaries and others that the Debtors have the
ability and financing to support their reorganization
efforts;
(g) the change in the Debtors' lender relationship with
respect to letters of credit will not impact the Debtors'
estates due to the cancellation of the DIP credit
agreement; and
(h) the New Letters of Credit will replace funded,
liquidated, secured obligations with unfunded, secured
contingent obligation, thus improving the Debtors'
liquidity position.
Mr. Butler states that the Bank of America Letters of Credit are
secured by prepetition cash collateral and any replacement or
renewal of letters of credit may constitute an extension of
postpetition financing which requires Court approval. However,
the Debtors believe that since the New Letters of Credit will be
replacing prepetition obligations, there is no "postpetition"
extension of credit. Accordingly, the Debtors file this motion
out of abundance of caution on notice to all parties in
interest.
"The new Letters of Credit will be issued under the new letter
of credit facility and will enable the Debtors to obtain letters
of credit to an aggregate amount of $12,000,000," Mr. Butler
reports.
The fees associated with the new letters of credit are:
(i) an annual commitment fee equal to four-tenths of 1% times
the amount available under the new letter of credit
facility;
(ii) an annual letter of credit fee equal to three-quarters of
1% times the aggregate amount available to be drawn under
each issued new letter of credit;
(iii) upon the date of the occurrence of each draw under the new
letter of credit, a fee equal to one-quarter of 1% of the
drawn amount; and
(iv) Fifth Third Bank's costs associated with the New Letter of
Credit Facility. (Comdisco Bankruptcy News, Issue No. 30;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
CONDOR SYSTEMS: Court to Consider Asset Purchase Pact on Tuesday
----------------------------------------------------------------
PUBLIC NOTICE
NOTICE OF AUCTION OF ASSETS BY DEBTORS
CONDOR SYSTEMS, INC., A CALIFORNIA CORPORATION,
AND
CEI SYSTEMS, INC., A DELAWARE CORPORATION,
AND OPPORTUNITY TO OVERBID
PLEASE TAKE NOTICE that on June 25, 2002, at 10:00 a.m., or
as soon thereafter as counsel may be heard, a hearing and
auction will be held before the Honorable James R. Grube, United
States Bankruptcy Judge in the United States Bankruptcy Court
for the Northern District of California, located at 280 South
First Street, Courtroom 3020, San Jose, California 95113, to
consider a motion by the Debtors and to auction all of the
right, title, and interest of the above referenced debtors in
substantially all of the assets used in the operation of their
businesses, on the terms and subject to the conditions set forth
in an "Asset Purchase Agreement" on file with the Bankruptcy
Court. The Asset Purchase Agreement sets forth an offer by a
"lead bidder," inter alia, to pay (i) $67,000,000 in cash, (ii)
assume certain liabilities, and (iii) assume and assign to the
purchaser certain identified executory contracts and unexpired
leases. The assets will be sold to the highest and best
bidder(s) at the time of the auction. The sale is subject to
Bankruptcy Court approval and sales and overbid procedures
established by Order of the Bankruptcy Court. All bidders must
attend the auction at the time and place set forth above, which
may be changed without further notice as announced in open
court. Additionally, any person(s) wishing to place a bid must
pre-qualify as a qualified bidder by 12:00 noon Pacific Time,
Friday, June 21, 2002 in accordance with the Sale Procedures
Order.
The Debtors will request that the Court order that the sale be
free and clear of liens, charges, claims, successor liability
claims, pledges, security interests, conditional sale agreements
or other title retention agreements, leases, tenancies, ground
rents, licenses, mortgages, security agreements, covenants,
conditions, restrictions, rights-of-way, easements,
encroachments, options, judgments or other encumbrances
affecting title (including the filing of, or agreement to give,
any financing statement under the Uniform Commercial Code of any
jurisdiction) pursuant to 11 U.S.C. Sec. 363. Any Liens will be
transferred from the Debtors assets and will attach to the
proceeds of the sale to the same extent and with the same
validity and priority that such interests attached to the assets
sold. Any party asserting alien or interest in any of the assets
to be sold, any party to an executory contract or unexpired
lease, and any other party with standing that wishes to object
to the sale and Sale Motion on any grounds, including that the
sale should not be free and clear of an asserted lien or
interest, may do so by filing a written objection by June 17,
2002 and serving such objection in accordance with the Sale
Procedures Order. FAILURE TO OBJECT MAY BE DEEMED TO BE CONSENT
TO THE GRANTING OF THE RELIEF REQUESTED IN THE SALE MOTION,
INCLUDING THAT THE SALE WILL BE FREE AND CLEAR OF LIENS AND
INTERESTS.
Parties wishing to obtain further information regarding the
auction including (a) bidding and sales procedures and the steps
necessary to become qualified to bid at the auction, (b)
identification of assets to be auctioned, and (c) other terms
and conditions to the sale, including those set forth in the
Sale Motion and Asset Purchase Agreement, should deliver their
written request directed as set forth below:
MURPHY SHENEMAN JULIAN & ROGERS NIGHTINGALE & ASSOCIATES, LLC
A PROFESSIONAL CORPORATION 505 Montgomery Street
2049 Century Park East, Suite I 100
Suite 2100 San Francisco, California
Los Angeles, California 90067 94111
ATTN: ERIC E. SAGERMAN, ESQ. ATTN: TIMOTHY HASSENGER
JUSTIN E. RAWLINS, ESQ. Facsimile: (707) 202-2075
Facsimile: (310) 788-3777 Telephone: (213) 447-2078
Telephone: (310) 788-3700
COVANTA ENERGY: Proposes Uniform De Minimis Asset Sale Protocol
---------------------------------------------------------------
Pursuant to Section 363 of the Bankruptcy Code, Covanta Energy
Corporation and its debtor-affiliates ask the Court's authority
to sell certain non-core Miscellaneous Assets, including but not
limited to, office furniture, office equipment, art, machinery
and other equipment. The sale will be free and clear of all
liens, claims and encumbrances and without need for further
Court authorization as long as the Miscellaneous Assets' fair
market value in the aggregate is not more than $250,000.
Deborah M. Buell, Esq., at Cleary, Gottlieb, Steen & Hamilton,
in New York, contends that the sale of the Miscellaneous Assets
will maximize the value of the Debtors' estates and best protect
the Debtors' creditors. Also, Ms. Buell adds that foregoing
further Court approval will:
(a) lessen the cost to the estate by reducing the motions to
be filed by the Debtors' counsel;
(b) shorten the delay associated in obtaining Court approval
which potentially could chill the bidding process,
minimize the interest in the sale and reduce the sale
proceeds.
In addition, the Debtors ask the Court to approve these
Miscellaneous Sale Procedures:
(a) the Debtors or their agents will determine, in their
reasonable discretion, the highest and best offer for
each Miscellaneous Asset or group of Miscellaneous
Assets;
(b) the Debtors will file with the Court and serve, by
facsimile or electronic mail, a notice of the highest and
best offer for sale of a Miscellaneous Asset to the
counsel to the agents of the lenders providing pre-
petition financing and postpetition financing,
counsel to the Official Committee of Unsecured Creditors,
counsel to the informal committee of 9.25% debenture
holders, the respective financial advisors for the
Lenders, the Committee and the 9.25% Committee, the
United States Trustee and any known creditors asserting
a lien on the applicable Miscellaneous Asset;
(c) the Notice of Sale will contain a description of the
relevant Miscellaneous Asset, the name of the purchaser
of the Miscellaneous Asset, the relationship, if any, of
the purchaser to the Debtors, the marketing efforts
undertaken to sell the Miscellaneous Asset, the purchase
price, the expected net proceeds after sales costs and
the basis for the Debtors' conclusion that the sale is in
the best interests of the estate;
(d) the Lenders, the Committee, the 9.25% Committee, the
United States Trustee or any known creditors asserting a
lien on the applicable Miscellaneous Asset may object to
the sale by filing an objection with the Court and
serving it upon the Debtors within five business days
after receipt of the Notice of Sale;
(e) if an objection is filed and served within the five-day
period but cannot be resolved consensually, the Debtors
will not transfer the Miscellaneous Asset to the buyer
without further court order;
(f) the sale of each of the Miscellaneous Assets will be
negotiated at arms' length, without collusion, and in
good faith as that term is used in Section 363(m) of the
Bankruptcy Code;
(g) any and all liens, claims, interests and encumbrances in
the relevant Miscellaneous Asset will attach to the
proceeds of the sale of the Miscellaneous Asset with the
same validity, priority, force and effect on the lien,
claim, interest and encumbrance had upon the
Miscellaneous Asset immediately prior the closing of the
sale, subject to any claims and defenses the Debtors,
Lenders or 9.25% Holders may have with respect thereto;
and
(h) any and all proceeds from the sale of any Miscellaneous
Asset will be forwarded to the Debtors in accordance
with the Debtor-in-Possession Credit Agreement.
The Debtors also ask the Court for authority to market and sell
any Miscellaneous Asset having a fair market value that is less
than or equal to $25,000 (Small Miscellaneous Asset). This
would be in the ordinary course with their best business
judgment, without further hearing or order of the Court or in
compliance with Sale Procedures (d) and (e). This is provided
that the Debtors determine in their business judgment that the
value of the Small Miscellaneous Asset can be best realized by
proceeding under Small Miscellaneous Asset and further provided
that no more than $100,000 in assets may be sold as Small
Miscellaneous Assets. The Debtors will remain obligated to
comply with their obligations under Sale Procedures (a), (b),
(c), (f), (g), (h).
Ms. Buell believes that the Sale Procedures will ensure a fair
and reasonable consideration for the Miscellaneous Assets.
(Covanta Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
CYANOTECH CORP: Fails to Comply with Nasdaq Listing Criteria
------------------------------------------------------------
Cyanotech Corporation (Nasdaq:CYAN) has received a delisting
warning letter from Nasdaq for failure to comply with the $1.00
minimum bid price. Cyanotech now has 90 calendar days, or until
September 16, 2002, to regain compliance. If the bid price of
the Company's common stock closes at $1.00 per share or more for
a minimum of 10 consecutive trading days prior to September 16,
2002, the Nasdaq staff will provide written notification that
the Company is in compliance. However, if the Company is unable
to regain compliance prior to September 16, 2002, it intends to
apply for listing on The Nasdaq SmallCap Market, which makes
available a 180 calendar day SmallCap Market grace period, or
until December 16, 2002 to regain compliance. The Company will
also then be eligible for an additional 180 calendar day grace
period, or until June 16, 2003 to demonstrate compliance
provided that it meets additional Nasdaq listing criteria for
the SmallCap Market, which Cyanotech currently does.
Furthermore, the Company may be eligible to transfer back to The
Nasdaq National Market if, by June 12, 2003, its bid price
maintains the $1.00 per share requirement for 30 consecutive
trading days and it has maintained compliance with all other
continued listing requirements, which it currently does.
"Although our intention is to remain on the Nasdaq National
Market, we now have the option of moving to the $45-billion
Nasdaq SmallCap Market, where we would join over 700 other
companies," said Ronald Scott, chief financial officer and
executive vice president of Cyanotech. "Our stock reached its
all-time high of $14.875 in November 1995 on The Nasdaq SmallCap
Market."
Regarding the Company's prospects during the coming months, Mr.
Scott noted that Cyanotech is operating at full capacity to
produce its products for current and projected demand. Besides
marketing under its own brand, the Company's principal product
for the future, BioAstin(R), is now being incorporated or is
under consideration for use by a number of the leading dietary
supplement and skin care companies in the United States and
overseas.
Cyanotech Corporation, the world's leader in microalgae
technology, produces high-value natural products from
microalgae, and is the world's largest commercial producer of
natural astaxanthin (pronounced "asta-zan-thin") from
microalgae. Products include BioAstin(R) natural astaxanthin, a
powerful antioxidant with expanding applications as a human
nutraceutical; NatuRose(R) natural astaxanthin for the
aquaculture and animal feed industries; Spirulina Pacifica(R), a
nutrient-rich dietary supplement; and phycobiliproteins, which
are fluorescent pigments used in the immunological diagnostics
market. Spirulina and BioAstin are sold directly online through
www.nutrex-hawaii.com and www.bioastinxp.com as well as through
resellers in over 30 countries. Corporate and product
information is available at http://www.cyanotech.com
DESA HOLDINGS: Taps Bankruptcy Management Corp. as Claims Agents
----------------------------------------------------------------
DESA Holdings Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to appoint
Bankruptcy Management Corporation as notice, claims and
balloting agent.
As the company's notice, claims and balloting agent, Bankruptcy
Management will maintain the list of the Debtors' creditors.
Bankruptcy Management will also serve the required notices in
these chapter 11 cases and will prepare the related affidavit of
service. The Debtors point out that Bankruptcy Management
agrees to assist the Debtors in the preparation of the Schedules
of Assets and Liabilities and Statement of Financial Affairs,
and in the reconciliation and resolution of claims, balloting
and other administrative services as required by the Court or
the Debtors.
Bankruptcy Management may also provide the Debtors with claims
management consulting and computer services and the Debtors may
use Bankruptcy Management to provide them with training and
consulting support as necessary.
Pursuant to the Agreement, Bankruptcy Management will invoice
the Debtors monthly for services provided in the preceding
month. The Debtors paid Bankruptcy Management a $25,000
retainer that will be applied to Bankruptcy Management's final
billing to the Debtors.
DESA, a leading manufacturer, distributor and marketer of vent-
free heating appliances, outdoor heaters, motion sensor
lighting, wireless doorbells, lawn and garden electrical
products and consumer fastening systems in the United States,
filed for chapter 11 protection on June 8, 2002. Laura Davis
Jones, Esq. at Pachulski, Stang, Ziehl Young & Jones represents
the Debtors in their restructuring efforts.
DOBSON COMMS: Declares In-Kind Dividend on 12-1/4% Preferreds
-------------------------------------------------------------
Dobson Communications Corporation (Nasdaq:DCEL) declared an in-
kind dividend on its outstanding 12-1/4% Senior Exchangeable
Preferred Stock. The dividend will be payable on July 15, 2002
to holders of record at the close of business on July 1, 2002.
Holders of shares of 12-1/4% Senior Exchangeable Preferred Stock
(CUSIP 256072 30 7) will receive 0.03097 additional shares of
12-1/4% Senior Exchangeable Preferred Stock for each share held
on the record date. The dividend covers the period April 15,
2002 through July 14, 2002. The dividends have an annual rate of
12-1/4% on the $1,000 per share liquidation preference value of
the preferred stock.
Dobson Communications is a leading provider of wireless phone
services to rural markets in the United States. Headquartered in
Oklahoma City, the Company owns or manages wireless operations
in 17 states. For additional information on the Company and its
operations, please visit its Web site at http://www.dobson.net
At March 31, 2002, Dobson Communications reported having a total
shareholders' equity deficit of about $266 million.
E-STAR HOLDINGS: Auditors Doubt Ability to Continue Operations
--------------------------------------------------------------
E-Star Holdings Inc. operates four car wash facilities, at two
of which it also operates gas stations. It operates convenience
stores at each of these four locations and sells jewelry at
three of them. These four facilities are all located on Long
Island, New York, and operate under the name "All Star."
The Company's business plan is to lease or sell some or all of
its car wash/gas station facilities to third parties who are not
affiliated with it, its directors or executive officers, if the
Company deems the terms of such transaction beneficial to the
company. To the extent that financial resources permit, E-Star
will continue acquiring, building and/or renovating new car
wash/gas station facilities, with a view to selling and leasing
such facilities to third parties. Its goal is to have such
purchasers and lessees and other independently owned car washes
and gas stations operate under its "All Star" name and to
participate in E-Star's membership.
In the past year the Company has leased three of its car
wash/gas station facilities to non-affiliated third parties. The
tenant of each of these car wash/gas station facilities pays all
the real estate taxes and other expenses (except interest and
principal payments on the mortgage) for the leased property.
Sales for the year ended February 28, 2002 were $7,445,469 from
gasoline, carwash and convenience store sales, compared to
$7,573,510 at February 28, 2001. Revenue from memberships and
membership plans were $433,466 compared to $174,011 for the year
ended February 2001. Revenue from leasing of the Port Jefferson,
Freeport and Sayville sites were $1,150,000 for the year ended
February 28, 2002 compared to -0- at February 28, 2001. Rental
income was $35,500 for the year ended February 28, 2002 compare
to -0- at February 28, 2001. Sales from gasoline, carwash and
convenience store decreased by 2% which is attributable to the
decline in gasoline price over the past year. In addition the
Company has increased plan sales, which would decrease gasoline
and carwash sales. It has increased membership and plan sales by
249%. Rental income will continue to increase in the coming year
with additional sites being leased by the Company to third party
operators.
Net income was $19,957 for the year ended February 28, 2002
compared to a net loss of $2,411,252 the prior year. The
increase in income is attributed to the increase in WMB
membership and plans, the sales of three sites and the
reductions in cost of sales, payroll and other costs offset by
the increase in rent, utilities and depreciation expenses.
However, the Company's independent New York CPA auditing firm
issued the latest Auditors Report includes the statement that,
"the Company has had insufficient cash flows since inception and
requires additional capital to continue operations. These
conditions raise substantial doubt about its ability to continue
as a going concern."
ENRON CORP: EESO Unit Intends to Reject Contract with Le Hesten
---------------------------------------------------------------
Enron Energy Services Operations Inc. and LE Hesten Energy LLC
are parties to a Project, Operations, Maintenance and Repair
Management Agreement. Under the POMR Agreement, EESO provides
project management services, operations, maintenance and repair
services to Hesten.
Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York,
relates that Hesten is also party to an Energy Services
Agreement with Eli Lilly and Company. Pursuant to the ESA,
Hesten is obligated to implement, through the POMR with EESO,
programs for certain of Lilly's facilities designed to maintain
and increase the quality and efficiency of Lilly's energy
systems and production systems and processes.
However, Ms. Gray reports that EESO is no longer capable of
performing under the POMR because of the significant and ongoing
loss of its employees. As a result, Ms. Gray says, Hesten is
unable to perform its obligations to Lilly pursuant to the ESA.
Accordingly, EESO seeks to reject the POMR with Hesten.
"Rejection of the POMR under Section 365 of the Bankruptcy Code
will result in the automatic termination of the ESA," Ms. Gray
notes. Pursuant to the Limited Liability Company Agreement of
Hesten, Ms. Gray explains, termination of the ESA will also
trigger the dissolution of Hesten.
According to Ms. Gray, rejection and termination of the POMR
will also result in the automatic termination of the Head Lease
Agreement, the Employee Secondment Agreement, the Labor
Transition Agreement, and the Letter Agreement. To the extent
that these agreements do not automatically terminate, EESO also
seeks the Court's authority to reject the Ancillary Agreements.
Thus, Ms. Gray says, this Motion renders the Lilly Motion moot
to the extent that it seeks to compel rejection of the Ancillary
Agreements.
However, Ms. Gray emphasizes that EESO does not agree with
Lilly's contention that the LLC Agreement should be rejected.
EESO intends to file an objection to the Lilly Motion in that
regard.
By this motion, the Debtors ask the Court's authority to reject
the POMR and its Ancillary Agreements, to the extent necessary,
pursuant to Section 365(a) of the Bankruptcy Code.
Ms. Gray informs Judge Gonzalez that EESO holds a claim against
Hesten in the amount of $3,165,949 for prepetition services
performed under the POMR. Prior to the Petition Date, Ms. Gray
relates that Hesten erroneously made a duplicate payment to EESO
pursuant to the POMR in the amount of $727,289, which represents
a pre-petition claim against EESO.
Accordingly, the Debtors also ask the Court to lift the
automatic stay for the limited purpose of allowing setoff of
mutual pre-petition debts between EESO and Hesten. "The parties
agree that these debts are due and owing," Ms. Gray asserts.
(Enron Bankruptcy News, Issue No. 32; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
ENRON CORP: Avnet Inc. Pushing for Prompt Decision on Agreement
---------------------------------------------------------------
Avnet Inc., successor in interest to Kent Electronics
Corporation (doing business as Kent Datacomm), demands that
Enron Corporation and its debtor-affiliates immediately decide
either to assume or reject a Master Agreement for Design,
Installation, and Support Services, dated December 19, 2000,
with Enron Center South.
Joshua W. Cohen, Esq., at Cummings & Lockwood, LLC in New Haven,
Connecticut, claims that the immediate assumption or rejection
of the Agreement is necessary to limit Kent's damages and to
preserve value for and to limit claims against the Debtors'
bankruptcy cases.
Mr. Cohen says that the Agreement requires Kent to design,
construct and install certain equipment, wiring and computer
systems at the Debtors' offices located at 1500 Louisiana
Street, Houston, Texas. The Debtors agreed to pay for the
materials, equipment and services that Kent provides within 30
days of receipt of Kent's invoices for the equipment, materials
and services. They have also agreed to purchase the equipment,
shipping (actual will be billed), and taxes up to and including
$18,197,239. Kent, as Contractor, agreed to supply professional
services related to the Work equal to $2,027,761. Presently,
the Debtors owe Kent $4,772,664 on account of pre-petition
invoices presented by Kent to the Debtors.
Mr. Cohen relates that Kent and the Debtors negotiated the
pricing of the Agreement based on the assumption that the
parties would perform the Agreement in a timely manner.
However, Kent has experienced unexpected delays caused by the
Debtors' refusal to act with respect to assumption or rejection
of the Agreement. Furthermore, Mr. Cohen notes, the costs for
Kent to complete the Agreement -- if the Debtors assumes the
Agreement -- have escalated beyond any expectation and will
continue to escalate, all to the detriment of Kent.
Additionally, Kent must incur additional expenses to store the
materials and equipment pending a decision by the Debtors.
(Enron Bankruptcy News, Issue No. 32; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
Enron Corp.'s 8.310% bonds due 2003 (ENRN03USS2), an issue in
default, are quoted at a price of 20, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ENRN03USS2
for real-time bond pricing.
EXIDE: Bags Approval to Assume Employment and Control Agreements
----------------------------------------------------------------
Pursuant to Section 365 of the Bankruptcy Code, Exide
Technologies and its debtor-affiliates sought and obtained
authority from the Court to assume:
A. an employment agreement between the Debtors and Craig H.
Muhlhauser, Chief Executive Officer of Exide Technologies,
and
B. a change in control agreements between the Debtors and the
following employees: Craig H. Muhlhauser, John Van Zile,
Mitchell S. Bregman, David G. Enstone, George R. McPherson,
Neil S. Bright, and Stephen W.R. Elks.
The full-text of Mr. Muhlhauser's employment agreement can be
accessed at:
http://bankrupt.com/misc/294CEOagreement.pdf
and a copy of the Change in Control Agreement at:
http://bankrupt.com/misc/294change_in_control_agreement.pdf
Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young & Jones
P.C. in Wilmington, Delaware, relates that Mr. Muhlhauser is the
global leader of the Exide enterprise, and is the chief
architect of the Debtors' strategy to restore the company to
profitability. Mr. Muhlhauser possesses invaluable expertise
and knowledge that is necessary for the successful
reorganization of the Debtors and is a highly respected and well
known leader in the industry and the business community as a
whole. If Mr. Muhlhauser were to leave Exide, then other
employees throughout the company would see his departure as an
unmistakable signal that no future exists for the Debtors and
that the reorganization efforts will fail. The Debtors believe
that the Employment Agreement will provide the security for Mr.
Muhlhauser to remain employed by the Debtors. Thus, after
careful review of the terms and conditions of the Employment
Agreement, the Debtors conclude that it is in the best interests
of the Debtors' estates to assume the Employment Agreement at
the present time.
In addition to Mr. Muhlhauser, Ms. Jones submits that the other
Employees are each highly valued assets of the Debtors and
possess key experience and knowledge essential to the success of
this restructuring. Each of the Employees are leaders in their
respective units of the Debtors and, as with Mr. Muh1hauser,
employees would see their departure as a sign that the
restructuring is doomed. The Debtors believe that the Change in
Control Agreements will provide the protection and confidence
needed for the Employees to remain employed by the Debtors.
Thus, after careful review of the terms and conditions of the
Change in Control Agreements, the Debtors conclude that it is in
the best interests of the Debtors' estates to assume the Change
in Control Agreements at the present time.
The Employment Agreement sets forth the terms of Mr.
Muhlhauser's service to Exide, and is in all respects typical of
executive employment agreements for businesses of this size and
complexity. Among other things, Ms. Jones informs the Court that
the Employment Agreement generally entitles Mr. Muhlhauser to
certain specified payments and benefits upon termination, death
or disability. Any severance pay and benefits provided for in
the Employment Agreement are in lieu of any other severance pay
which Mr. Muhlhauser may be entitled under any Exide severance
plan. In exchange for the above payments and benefits, the
Employment Agreement requires Mr. Muhlhauser to abide by non-
compete and non-solicitation clauses.
The employment agreement entitles Mr. Muhlhauser an annual base
salary of $700,000, as may be increased from time to time. In
addition, Mr. Muhlhauser will receive an annual bonus at a
target amount equal to 100% of his base salary. Mr. Muhlhauser
will also be eligible to receive long-term incentives (e.g.
stock options and restricted stock) as will be determined by the
Company's Board of Directors.
Assumption of the Employment Agreement will not subject the
Debtors to a substantial risk of postpetition liabilities
because Exide does not intend to terminate Mr. Muhlhauser and
intends to comply with the terms of the Employment Agreement so
that Mr. Muhlhauser will not have reason to terminate the
Employment Agreement or leave the company. Therefore, the
Debtors seek authority to assume the Employment Agreement.
Ms. Jones explains that the Change in Control Agreements provide
certain benefits to the Employees in the event of a change in
control at Exide, and are typical of change in control
agreements for companies of similar size and complexity. In
summary, the Change in Control Agreements generally entitle the
Employees to certain payments and benefits upon termination
following a Change in Control, other than by Exide for cause, by
reason of death or disability, or by the Employee without Good
Reason. Mr. Muhlhauser's Change in Control Agreement further
provides payments and benefits if he voluntarily terminates his
employment for any reason during the one-month period commencing
on the first anniversary of the Change in Control.
In exchange for the payments and benefits described in the
agreements, the Employees agree that in the event of a potential
Change in Control, the Employee will remain in the employ of the
Debtors until the earliest of:
* six months after the Potential Change in Control,
* the date of a Change in Control,
* the date of termination by the Employee for Good Reason or
by reason of death, disability or retirement, and
* the date of termination of the Employee by Exide.
Assumption of the Change in Control Agreements will not subject
the Debtors to a substantial risk of postpetition liabilities
because Exide does not intend to terminate the Employees,
intends to comply with the terms of the Change in Control
Agreements so that the Employees will not have reason to
terminate the Change in Control Agreements, and is not aware of
impending circumstances that would giving rise to a Change in
Control with the meaning of the agreements. Therefore, the
Debtors seek authority to assume the Change in Control
Agreements. (Exide Bankruptcy News, Issue No. 6; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
DebtTraders reports that Exide Technologies' 10% bonds due 2005
(EXIDE2) are quoted at a price of 15. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=EXIDE2for
real-time bond pricing.
FACTORY CARD: Deloitte & Touche Comes In as New Accountants
-----------------------------------------------------------
On June 12, 2002, the Board of Directors of Factory Card & Party
Outlet Corp., upon the recommendation of the Audit Committee,
dismissed KPMG LLP the Company's independent public accountants
and engaged Deloitte & Touche LLP to serve as the Company's
independent public accountants for the fiscal year ending
February 1, 2003.
KPMG's report on the consolidated financial statements of
Factory Card Outlet Corp. and subsidiary for the fiscal year
ended February 3, 2001, contained a separate paragraph stating
that "in March 1999 the Company filed voluntary petitions for
relief under chapter 11 of title 11 of the United States Code.
In addition, the Company's results reflect continued net losses.
These matters raise substantial doubt about the Company's
ability to continue as a going concern. The financial
statements do not include any adjustments that might result from
the outcome of this uncertainty."
Factory Card Outlet Corporation, one of the largest chains of
company-operated superstores in the card, party supply and
special occasion industry in the United States, filed for
chapter 11 protection on March 23, 1999 in the District of
Delaware. Daniel J. DeFrancheschi, Esq., of Richards Layton &
Finger, P.A., represents the Debtor in their restructuring
effort. As of August 4, 2001, the company listed $ 77,551,000 in
assets and $92,141,000 in debt.
FAIRCHILD DORNIER: Bombardier Walks Away
----------------------------------------
Bombardier announced that its technical, commercial and
financial review of Fairchild Dornier's 728/928 aircraft
programs is now completed. Bombardier's conclusion is not to
proceed any further.
Bombardier appreciated the professionalism, support and
responsiveness shown by the German government and the Bavarian
authorities as well as by Fairchild Dornier's management and
employees. In addition to its technical analysis, Bombardier
undertook detailed discussions with customers, suppliers and
related stakeholders over a five-week period. However, these
discussions did not achieve the results required for these
programs to meet Bombardier's investments standards.
Bombardier Inc., a diversified manufacturing and services
company, is a world leading manufacturer of business jets,
regional aircraft, rail transportation equipment and motorized
recreational products. It also provides financial services and
asset management in business areas aligned with its core
expertise. Headquartered in Montreal, Canada, the Corporation
has a workforce of some 80,000 people in 24 countries throughout
the Americas, Europe and Asia-Pacific. Its revenues for the
fiscal year ended Jan. 31, 2002 stood at C$21.6 billion.
Bombardier shares are traded on the Toronto, Brussels and
Frankfurt stock exchanges (BBD, BOM and BBDd.F).
FANNIE MAY: Seeks Nod to Hire Robert L. Berger as Claims Agent
--------------------------------------------------------------
Fannie May Holdings, Inc. and Archibald Candy Corporation wants
the U.S. Bankruptcy Court for the District of Delaware to
approve Roberta L. Berger & Associates, LLC as Claims, Noticing
and Balloting Agent in these chapter cases.
Among others, Robert L. Berger agrees to:
i) serve as the Court's notice agent to mail notices to the
estates' creditors and other parties in interest;
ii) provide computerized claims, objections and balloting
database services, and
iii) provide expertise and consultation and assistance in
claim and ballot processing and with other
administrative functions with respect to the Debtors'
bankruptcy cases.
The Debtors submit that they have approximately 2,000 creditors,
potential creditors and parties in interests to whom notices
must be sent. The size of the Debtors' creditors makes it
impracticable to undertake that task and send notices to the
creditors and maintain a claims register, the Debtors admit.
The Debtors believe that the most effective and efficient manner
by which to provide notice and solicitation in these cases is to
engage an independent third party to act as an agent of the
Court.
The Debtors also seek to employ Robert L. Berger to assist it
with:
a) the preparation and mailing of the plan and disclosure
statement and related notices, and
b) if necessary, the reconciliation and resolution of
claims.
The Debtors request that the fees and expenses of Roberta L.
Berger in its services to the Debtors be treated as an
administrative expense of the Debtors' chapter 11 estates.
Roberta L. Berger will charge the Debtors in their hourly rates,
which range from $35 to $285 per hour.
The Debtors filed for chapter 11 protection on June 12, 2002.
Pauline K. Morgan, Esq., M. Blake Cleary, Esq. at Young,
Conaway, Stargatt & Taylor and Matthew J. Botica, Esq., Daniel
J. McGuire, Esq. at Winston & Strawn represent the Debtors in
their restructuring efforts. When the Company filed for
protection from its creditors, it listed $200,000,000 in debts.
FEDERAL-MOGUL: Court Approves Garden City as Claims Consultants
---------------------------------------------------------------
Federal-Mogul Corporation and its debtor-affiliates obtained the
Court's permission to employ and retain GCG Communications, a
division of The Garden City Group Inc., as their claims notice
consultant in their Chapter 11 cases. The services of GCG are
necessary to potentially design, disseminate and implement
certain Notice Programs, on the terms and conditions provided in
the Advertising and Services Agreement. The large-scale
notification process involved requires the expertise of a notice
consultant like GCG, due to its experience in the negotiation,
design and preparation of notice materials for publication.
David M. Sherbin, Vice President and Deputy General Counsel and
Secretary of the Debtors, accords that GCG is qualified to serve
as the Debtors' claims notice consultant. For approximately 17
years, GCG has been engaged in the business of claims processing
and noticing, primarily in large, complex, nationwide class
action settlements. GCG, which began as a business unit of KPMG,
has served or currently serves in numerous bankruptcy cases such
as America West Airlines, HMG Worldwide Manufacturing, The
Nations Flooring, CyberRebate.com, AremisSoft, and HQ Global
bankruptcy cases.
The notification services with respect to the Notice Programs
may include, but are not limited to:
A. developing and implementing a comprehensive notification plan
of the Debtors' bar date(s) with recommendations for
materials and media distributions;
B. creating all relevant and necessary media notice materials,
including print and television advertisements, as applicable;
C. implementing media buys and placement;
D. executing an affidavit or other documentation and testimony
as required by the Court and as requested by the Debtors
describing the notification services provided;
E. providing a summary and analysis of the notification
activities and media placements as required by the Debtors;
and,
F. performing all other claimant notification consultant
services that may be necessary or appropriate in connection
with the Notice Programs.
Mr. Sherbin maintains that GCG has agreed to represent the
Debtors if it receives compensation on a commission basis. They
also want reimbursement of actual, necessary expenses and other
charges incurred. GCG will charge the Debtors no more than a
commission of 7.5% on the gross open rate of all media buys as
approved by the Debtors, which is well within industry
standards. Additionally, GCG has also agreed to limit its fees
to the lesser of $300 an hour for actual services rendered by
Mr. Pines and $252 an hour for actual services rendered by Ms.
Fabia D'Arienzo, or $10,000. Mr. Pines and Ms. D'Arienzo are
expected to render services in GCG's behalf. (Federal-Mogul
Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
Federal-Mogul Corporation's 8.8% bonds due 2007 (FEDMOG6),
DebtTraders reports, are trading at about 21. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=FEDMOG6for
real-time bond pricing.
FRONTLINE COMM: Won't Declare Semi-Annual Dividend on Preferreds
----------------------------------------------------------------
Frontline Communications Corp. (AMEX: FNT) -- http://www.fcc.net
-- said that its Board of Directors voted not to declare a
dividend on its Series B Convertible Redeemable Preferred Stock
for the payment period ending June 28, 2002.
"The Board has determined that given current economic and market
conditions, it is in the best interests of the Company to forgo
any dividend payments at this time. The Board's action does not
constitute a default under the terms of the stock", said Company
CEO and Chairman Stephen J. Cole-Hatchard. "The dividend will
accumulate and will be paid at such time in the future as the
Board elects to declare a dividend", added Cole-Hatchard.
Founded in 1995, Frontline Communications Corporation provides
high-quality Internet access and Web hosting services to homes
and businesses nationwide. Frontline offers Ecommerce,
programming, and Web development services through its
PlanetMedia group -- http://www.pnetmedia.com Frontline is
headquartered in Pearl River, New York, and is traded on the
American Stock Exchange.
At March 31, 2002, Frontline Communications has a total
shareholders' equity deficit of about $1.4 million.
GENSCI REGENERATION: December 31 Equity Deficit Tops C$16 Mill.
---------------------------------------------------------------
GenSci Regeneration Sciences Inc. (Toronto: GNS), The
Orthobiologics Technology Company(TM), reported that revenues
for the fiscal year ended December 31, 2001 were $40.4 million
(US $26.1 million) compared to $45.8 million (US $30.8 million)
for fiscal year 2000. In February 2001, the Company transitioned
from DePuy AcroMed, Inc., as a sales representative for two of
its products, to a newly formed independent sales representative
network, which assumed responsibilities for the sale of these
products. In spite of the changeover and an increasingly
competitive market environment, GenSci's independent sales
network was able to limit the decrease in total revenue to 12%.
GenSci announced a loss of $37.0 million (US $23.5 million) for
the year ended December 31, 2001 compared to a loss of $7.0
million (US $4.8 million) for the year ended December 31, 2000.
Results are reported in Canadian dollars with an average annual
exchange rate for the year 2001 of $1.00 Canadian equaling
approximately U.S. $0.645.
The loss includes a $23 million (US $14.5 million) accrual for
the previously announced adverse patent litigation jury verdict
that the Company will be appealing. Adding to the loss was the
cost of patent litigation defense, plus investments required to
accelerate market development for GenSci's new products
including ongoing research and development required for its next
generation products and technologies. GenSci reported a loss of
$30.3 million on revenues of $10.1 million for the fourth
quarter ended December 31, 2001 compared to a loss of $4.0
million on revenues of $12.6 million for the comparable period
in 2000.
At December 31, 2001, GenSci's balance sheet shows a total
shareholders' equity deficit of about $16 million.
GenSci also announced that its annual report for 2001 has been
sent to its shareholders. As previously announced, the
commencement of the year end audit was delayed pending receipt
of the required approval by the United States Bankruptcy Court
for the Company's engagement of its auditors, which approval was
not granted until May 9, 2002. Further to its announcement on
June 12, 2002, GenSci continues to expect that its interim
financial statements for the period ended March 31, 2002, and
its Annual Information Form, will be filed on or before June 28,
2002.
GenSci Regeneration Sciences Inc. has established itself as a
leader in the rapidly growing orthobiologics market, providing
surgeons with biologically based products for bone repair and
regeneration. Its products can either replace or augment
traditional autograft surgical procedures. This permits less
invasive procedures, reduces hospital stays, and improves
patient recovery. Through its subsidiaries, the Company
designs, manufactures and markets biotechnology-based surgical
products for orthopedics, neurosurgery and oral maxillofacial
surgery.
For additional information please visit GenSci's new web site:
http://www.gensciinc.com
GLOBAL CROSSING: Court Okays Protocol to Pay Bermuda Liquidators
----------------------------------------------------------------
In order to promote cooperation and comity among the Bankruptcy
Court and the Bermudian Court and to avoid the possibility of
conflicting orders being made by the two courts with respect to
the payment of the fees and expenses of the Joint Provisional
Liquidators, the JPLs' Professionals and the Chapter 11
Professionals, Global Crossing Ltd., and its debtor-affiliates
obtained Court authority to establish compensation procedures.
These procedures were approved:
A. The fees and expenses of the Chapter 11 Professionals shall
be paid, without necessity of further order of the
Bermudian Court, by the appropriate Debtor or Debtors in
accordance with the terms of the order of the Bankruptcy
Court. The Chapter 11 Professionals shall be subject to the
sole and exclusive jurisdiction of the Bankruptcy Court
with respect to their appointment, remuneration and
reimbursement of expenses. The Chapter 11 Professionals,
insofar as they are required to assist in connection with
the provisional liquidations of the Bermudian Companies,
shall not be required to seek approval of their appointment
or remuneration or reimbursement of expenses by the
Bermudian Court.
B. The Bermudian Companies shall pay, without necessity of
further order of the Bankruptcy Court, the fees and
expenses of the JPLs and the JPL Professionals. The JPLs
and the JPL Professionals shall be subject to the sole and
exclusive jurisdiction of the Bermudian Court with respect
to, as applicable, the appointment, remuneration and
reimbursement of the fees and expenses of the JPLs and the
JPL Professionals.
C. The payment of the fees and expenses of the JPLs and the JPL
Professionals is subject to the approval of the Bermudian
Court.
D. The Debtors and their advisors will carefully review the fee
applications of the Chapter 11 Professionals, including
Debtors' attorneys, to ensure against unreasonable,
unnecessary and inappropriate charges. (Global Crossing
Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
HARVARD INDUSTRIES: Court Sets Asset Sale Hearing for Monday
------------------------------------------------------------
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEW JERSEY
In re: ) Chapter 11
HARVARD INDUSTRIES, INC., et al.; ) Case No. 02-50586
Debtors. ) Jointly Administered
NOTICE OF AUCTION AND SALE HEARING
PLEASE TAKE NOTICE, that Hayes-Albion Corporation, together
with Harvard Industries, Inc. and Harvard Transportation, Inc.,
the above-captioned debtors in possession, by motions dated May
30,2002, have requested, among other things, (i) entry of an
order approving sale and bid procedures and buyer protections in
connection with a sale substantially all of the assets related
to Hayes-Albion's Trim Trends operating division and all of the
assets related to Harvard's operations facility located at
Farmington Hills, Michigan, and (ii) entry of an order approving
the sale of the Assets to Trim Trends Operations US, LLC and
Trim Trends Real Estate US, LLC or such other entity, that
submits a higher or better offer, and approving the assumption
and assignment of certain executory contracts related to the
Assets.
PLEASE TAKE FURTHER NOTICE, that a hearing to consider
approval of, among other things, the Sale Procedures and Buyer
Protections is scheduled before the Honorable Kathryn C.
Ferguson United Stares Bankruptcy Judge in Court Room No. 2 of
the United States Bankruptcy Court, 402 Fast State Street,
Trenton, New Jersey 08608 on June 10, 2002 at 10:00 am.
PLEASE TAKE FURTHER NOTICE, that the Proposed Buyer's bid
for the Assets is subject to higher and better offers and to
approval of the United Stares Bankruptcy Court for the District
of New Jersey. An auction of the Assets is scheduled to take
place at 11:OO a.m. (New York City Time) on June 21, 2002, at
the New York offices of Chadbourne & Parke LLP, 30 Rockefeller
Plaza, New York, New York, or such later time or other place as
the Sellers shall notify all Competing Bidders (as defined in
the proposed Sale Procedures). The proposed Sale Procedures
provide that anyone wanting to participate at the auction must
submit a bid no later than 4:00 p.m. on June 19, 2002.
PLEASE TAKE FURTHER NOTICE, that the Sale Hearing is
currently scheduled before the Honorable Kathryn C. Ferguson,
United States Bankruptcy Judge, in Court Room No. 2 of the
United States Bankruptcy Court, 402 East State Street, Trenton,
New Jersey 08608, at 10:00 a.m. (New York City Time) on June 24,
2002. The Sale Hearing may be adjourned or rescheduled without
notice by an announcement of the adjourned date at the Sale
Hearing. The Sellers will be deemed to have accepted a bid only
when the bid has been approved by the Bankruptcy Court.
PLEASE TAKE FURTHER NOTICE that anyone interested in
bidding on the Assets must contact J. Scott Victor of SSG
Capital Advisors, L.P., the Debtors' financial advisors
(telephone number (610) 940-5802) to enter into a
confidentiality agreement and receive a copy of the Sale
Procedures. The Sellers have established a data room for
potential bidders seeking due diligence.
PLEASE TAKE NOTICE that any objection to the sale of the
Assets (including any objection to the Sellers' assumption and
assignment of certain executory contracts in connection with the
proposed sale of Assets) must be filed with the United States
Bankruptcy Court for the District of New Jersey, 402 East State
Street, Trenton, New Jersey 08608 and served so as to be
received by (i) Chadbourne & Parke LLP, 30 Rockefeller Plaza,
New York, New York 10112, Attn: Joseph H. Smolinsky, Esq.; (ii)
Dale & Gordon LLP, 2050 Center Avenue, Suite 560, Fort Lee, New
Jersey 07024, Attn: Bruce D. Gordon, Esq.; (iii) Harvard
Industries, Inc., 3 Werner Way, Lebanon, New Jersey 08833, Attn:
David A. White, Esq., (iv) Honigman, Miller, Schwartz & Cohn,
LLP, 2290 First National Building, 660 Woodward Avenue, Detroit,
MI 48226, Attn: Peter C. Bolton, Esq.; (v) Duane Morris LLP as
counsel to the Committee, 744 Broad Street, Suite 1200, Newark,
NJ 07102-3889 Attn: William S. Katchen, Esq., (vi) Dewey
Ballantine LLP, as counsel to the post-petition lenders, 1301
Avenue of the Americas, New York, New York 10019-6092, Attn:
Stuart Hirshfield, Esq. and (vii) Schulte Roth & Zabel LLP as
counsel to Hilco Capital, 919 Third Avenue, New York, NY 10022,
Attn: Michael Cook, Esq., so as to be actually received by no
later than 4:00 p.m. prevailing Eastern time on June 17 2000.
Copies of the Sale Motion, proposed bidding procedures and
form asset purchase agreement may be obtained by contacting
Chadbourne & Parke LLP, 30 Rockefeller Plaza, New York, New York
10112, Attention: Anne Suffern, Legal Assistant, phone: (212)
408-5100; facsimile: (212) 541-5369.
Dated: May 31, 2002
CHADBOURNE & PARKE LLP -and- DALE & GORDON LLP
Co-Counsel To The Debtors Co-Counsel to The Debtors
30 Rockefeller Plaza 2050 Center Avenue, Suite 560
New York, New York 10112 Fort Lee, New Jersey 07024
Telephone No. (212) 408-5100 Telephone No. (201) 585-2600
Joseph H. Smolinsky, Esq. Bruce D. Gordon, Esq.
HIGH SPEED ACCESS: Nasdaq Listing Appeal Hearing Set for Today
--------------------------------------------------------------
High Speed Access Corp. (Nasdaq: HSAC) said that its hearing
before a Nasdaq Listing Qualifications Panel to review Nasdaq's
Staff Determination for delisting will occur on June 20, 2002.
There can be no assurance that the Panel will grant the
company's request for continued listing. If the Panel does not
grant the company's appeal for continued listing, the company's
common stock will likely trade on the OTC-Bulletin Board or Pink
Sheets.
As previously disclosed, the company intends to make a cash
distribution or distributions to its stockholders at some time
in the future, but the number, amount, timing, and record
date(s) of such distribution(s) have not been determined pending
the settlement or liquidation of the company's material
contingent liabilities. The board has not yet determined what
the company's strategic direction will be with respect to any
undistributed portion of its assets.
HSA also announces that it has settled the claims of the former
stockholders of Digital Chainsaw, Inc. for $1.5 million. Other
lawsuits and claims are still pending against the company. These
lawsuits and claims are described in the company's Form 10-Q for
the quarterly period ended March 31, 2002, filed with the
Securities and Exchange Commission.
HUBBARD HOLDING: Period to File BIA Proposal Extended to July 17
----------------------------------------------------------------
Hubbard Holding Inc., a Montreal-based textile manufacturer and
converter of fabrics, announces that pursuant to the provisions
of Section 50.4(9) of the Bankruptcy and Insolvency Act, on June
14th 2002, the Superior Court of Montreal granted to it and to
its wholly owned subsidiaries, Hubbard Fabrics Inc., and Hubbard
Dyers (1991) Inc., an extension of delay for filing a proposal
under the provisions of Section 50.4(1) of the Act. The period
to file a proposal was extended to July 17th 2002 for Hubbard,
and to July 26th 2002 for its Subsidiaries.
Hubbard and its Subsidiaries plan to continue operations during
this additional period, knitting, dying, finishing and shipping
goods to their customers.
The common shares of Hubbard are listed on TSX Venture Exchange
and trade under the symbol "HUB".
IT GROUP: URS Corp. Seeks Stay Relief to Enforce Stop Notice
------------------------------------------------------------
URS Corporation asks for relief from the automatic stay in order
for URS to enforce its stop notice under Sections 3103 and 3181-
3187 of the California Civil Code, and to file an action against
The IT Group, Inc., and its debtor-affiliates in order to reduce
its claim to judgment. URS is owed $989,304 for its subcontract
work, plus interest, costs and attorneys fees, as of the
Petition Date.
Noel C. Burnham, Esq., at Montgomery, McCracken, Walker &
Rhoads, LLP in Wilmington, Delaware, relates that URS was a
subcontractor to the IT Group, Inc. for a public soil
remediation project called the City of Long Beach Project, which
is owned by the City of Long Beach in California. The Prime
Contract and the URS Subcontract have been rejected pursuant to
an order of the Court and construction on the Project ceased by
January 15, 2002.
Mr. Burnham alleges that, upon information and belief, the City
of Long Beach has withheld payment to the Debtors and is
currently holding funds that may fully satisfy URS's claim. In
order to receive these withheld funds, URS must file a "stop
notice" complaint in the California Superior Court by July 12,
2002, against the Debtors in order to obtain judgment on its
claim. Under California law, the filing of a "stop notice"
imposes a trust obligation on the owner of the public project.
URS has timely filed and served its "Stop Notice - Public Works
Projects" on January 3, 2002, and filed and served its "Amended
Stop Notice - Public Works Project" on March 20, 2002.
Mr. Burnham avers that there is cause for granting the relief
from automatic stay. If the relief is not granted, URS will
suffer irreparable injury through continuing delays in receiving
payment for work performed which directly benefited the Debtor
and the City. More importantly, URS will lose its rights
against the withheld funds under the applicable stop notice laws
in California. Alternatively, if relief is not granted to allow
URS to proceed with the enforcement of its "stop notice" rights,
URS demands for adequate protection of its rights and interests
to the withheld funds. (IT Group Bankruptcy News, Issue No. 12;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
IMPSAT FIBER: Taps Arnold & Porter as Bankruptcy Attorneys
----------------------------------------------------------
Impsat Fiber Networks, Inc. has determined that it will be
necessary to engage counsel with knowledge and experience in the
areas of bankruptcy, litigation, tax, mergers and acquisitions
and corporate finance. The Debtor proposes to the U.S.
Bankruptcy Court for the Southern District of New York to retain
and employ the law firm of Arnold & Porter as counsel in its
chapter 11 proceeding.
For approximately 9 years, Arnold & Porter has represented the
Debtor in a number of significant corporate transactions,
including the Debtor's initial public offering and the issuance
of its public debt, as well as the preparation of all of the
documents necessary to commence this case to effectuate the
Debtor's reorganization. This retention has afforded Arnold &
Porter a familiarization on the Debtor's business and financial
affairs. The Debtor submits that Arnold & Porter is both well
qualified and uniquely able to represent it as debtor in
possession in this chapter 11 case in an efficient and timely
manner.
Specifically, Arnold & Porter will assist by:
A. providing advice to the Debtor with respect to its
powers and duties as debtor in possession in the
continued operation of its businesses and the management
of its properties;
B. taking necessary or appropriate action to protect and
preserve the Debtor's estate, including prosecuting
actions on the Debtor's behalf, defending any actions
commenced against the Debtor, conducting negotiations
concerning litigation in which the Debtor is involved,
and filing and prosecuting objections to claims filed
against the Debtor's estate, except where such
litigation is handled by other retained counsel;
C. preparing, on behalf of the Debtor, applications,
motions, answers, orders, reports, memoranda of law and
papers in connection with the administration of the
Debtor's estate;
D. representing the Debtor in negotiations with all other
creditors and equity holders of the Debtor, including
governmental agencies and municipal authorities;
E. representing the Debtor in negotiations regarding
possible dispositions of some or all of its assets;
F. negotiating and preparing on behalf of the Debtor one or
more plans of reorganization and all related documents;
and
G. performing other necessary or appropriate legal services
in connection with this chapter 11 case.
The Debtor agrees to compensate Arnold & Porter professionals at
their customary hourly rates on similar proceedings. Arnold &
Porter's current hourly rates are:
Partners and of Counsels $355 - $665
Associates $195 - $390
Paraprofessionals $40 - $145
Impsat Fiber, a provider of broadband Internet, data, and voice
services in Latin America, filed for chapter 11 protection on
June 11, 2002. Anthony D. Boccanfuso, Esq., and Michael J.
Canning, Esq. at Arnold & Porter represent the Debtor in its
restructuring efforts. When the Company filed for protection
from its creditors, it listed $667,189,368 in total assets and
$1,334,732,793 in total debts.
Impsat Corp.'s 13.75% bonds due 2005 (IMPT05ARR1), DebtTraders
says, are quoted at a price of 2. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=IMPT05ARR1
for real-time bond pricing.
INTEGRATED HEALTH: Seeking Approval of Palm Garden Transfer Pact
----------------------------------------------------------------
As previously reported, all 14 Palm Garden Leases for Facilities
located in Florida were rejected by Integrated Health Services,
Inc. by Court order.
The Debtors have determined that it is in the best interest of
their creditors and estates to assist in and to facilitate the
orderly transition of the Facilities' operations to the
Landlord's designated New Operators, each being a non-insider,
non-affiliate of the Debtors.
Accordingly, the Debtors move the Court for the issuance and
entry of an order approving and authorizing the implementation
of the "Operations Transfer Agreement," by and among (a) the
Debtors that are currently operating the Facilities (the
Transferors), (b) the New Operators and (c) Palm Garden
Healthcare, Inc., the Landlord. The Transfer Agreement governs
the orderly transition of the operations of the 14 skilled
nursing facilities from the Transferors to the New Operators,
including various assets related to the operation of the
Facilities, including, but not limited to, the reimbursement
provider agreements related to both Medicare and Medicaid.
The Transferors are: IHS of Florida No. 1, Inc. to IHS of
Florida No. 14., Inc.
The designated New Operators are: SA-PG - Clearwater LLC; SA-PG
- Gainesville LLC; SA-PG - Jacksonville LLC; SA-PG - Largo LLC;
SA-PG - North Miami LLC; SA-PG Ocala LLC; SA-PG - Orlando LLC;
SA- PG - Pinellas LLC; SA-PG - Port St. Lucie LLC; SA-PG - Sun
City Center LLC; SA-PG - Tampa LLC; SA-PG Vero Beach LLC; SA-PG
- West Palm Beach LLC; and SA-PG - Winterhaven LLC.
The Operations Transfer Agreement
Specifically, the Transfer Agreement provides for the
Transferors to transfer to the New Operators, inter alia, all
inventory, resident lists and records, furnishings, fixtures,
equipment and supplies, which are located at the Facilities, to
the extent transferable in accordance with applicable law, as
well as the transfer to the New Operators of the Resident Trust
Funds.
In addition, the Transfer Agreement:
(a) requires the New Operators to file final Medicare and
Medicaid cost reports,
(b) sets forth the procedures applicable to the New Operators'
hiring of substantially all of the Transferor's employees,
(c) governs the disposition of unpaid accounts receivable,
prorations of utility charges, real and personal property
taxes and any other items of revenue or expense attributable
to the respective Facilities, and
(d) permits the New Operators to take assignment of various
vendor and service contracts related to the Facilities'
operations (the Operating Contracts).
The parties are in the process of negotiating the ultimate
disposition of unpaid accounts receivable received post-Closing
by the Transferor and/or the New Operators.
The Medicare And Medicaid Provider Agreements
The Debtors have agreed, to the extent requested by the New
Operators, to assume the Provider Agreements and simultaneously
assign them to the New Operators in accordance with the terms
and conditions set forth in the Transfer Agreement.
Subject to the Court's approval, and as contemplated by the
Transfer Agreement, the assumption and assignment of the
Medicare Provider Agreements will be governed by the Medicare
Stipulation Among Debtors, the United States of America and New
Operators, to he executed shortly. The Medicare Stipulation will
fix the Cure Amounts, render the New Operators liable for paying
the Cure Amounts and, upon the New Operators paying the Cure
Amounts, release the Debtors and the New Operators from any
other or further liability in connection with the Medicare
Provider Agreements, except as expressly stipulated by the
parties.
The parties are in the process of determining the disposition of
the Medicaid Provider Agreements. In this regard, the parties
are awaiting certain critical financial data in connection with
various currently unaudited Medicaid cost reports. The lack of
this financial data prevents the complete liquidation of the
cure amounts under the Medicaid Provider Agreements. Once the
parties receive and analyze the cost report data, they intend to
commence negotiations concerning the allocation of
responsibility for satisfying the liquidated cure amounts under
the Medicaid Provider Agreements.
The Medicare and Medicaid Stipulations will be in substantially
the same form as those previously executed between the
Department of Justice and the Debtors in numerous prior
divestitures.
Operating Contracts
The Transfer Agreement permits the New Operators to take
assignment of some or all of the Operating Contracts. Pursuant
to the Transfer Agreement, if the New Operators seek to take
assignment of any Operating Contract, the New Operators must
notify the Debtors within 10 days of Closing. The Debtors will
provide reasonable cooperation in assisting the New Operators to
take assignment of any of the Operating Contracts. Pursuant to
the Transfer Agreement, the New Operators will bear sole
responsibility for curing any defaults existing under the
Operating Contracts which its seeks to obtain.
Interim Services Agreement
For the orderly transition of the Facilities' operations to the
New Operators, the Transferors and the New Operators have
negotiated, at arms length, and agreed upon an Interim Services
Agreement, dated as of June 6, 2002, by and between New Surfside
Administrators, LLC, a New York limited liability Company
(NSLLC) and IHS. Pursuant to the Interim Services Agreement, IHS
will provide certain administrative and operational services to
the New Operators for a term commencing on June 29, 2002 and
expiring on September 30, 2002.
In consideration of the services that IHS will provide to the
New Operators under the terms of the Interim Services Agreement,
HIS will receive a monthly service fee in the amount of
$175,000.
The Debtors draw the Court's attention to the benefits their
estates will realize from the transaction:
-- The transactions allow the Debtors to divest the Facilities
and in so doing, the Debtors will eliminate significant
administrative liabilities;
-- Pursuant to the provision for Release in the Transfer
Agreement, the Landlord releases the Debtors from any and all
claims arising under the Leases except for any damages
arising from the previous rejection of the Leases;
-- The Debtors retain all of their pre-transition right, title
and interest in and to any and all of the Facilities' unpaid
accounts receivable for the pre-Closing period;
-- The New Operators are required to offer hire to the
substantial majority of the Facilities' employees.
Based on these, the Debtors submit that the transactions set
forth in the Transfer Agreement are prudent and appropriate
exercises of the Debtors' sound business judgment, are in the
best interests of the Debtors and their creditors and estates
impose no prejudice to the Debtors or their estates, and should
be approved by the Court.
The Debtors submit that the New Operators has acted in good
faith in connection with the Transfer Agreement. Accordingly,
the Debtors request that the Court grant the New Operators the
protections of a good faith purchaser provided by section 363(m)
of the Bankruptcy Code. (Integrated Health Bankruptcy News,
Issue No. 38; Bankruptcy Creditors' Service, Inc., 609/392-0900)
IRVINE SENSORS: Stonestreet L.P. Discloses 8.1% Equity Stake
------------------------------------------------------------
Stonestreet, L.P. beneficially holds 8.1% of Irvine Sensor
Corporation's (Nasdaq (SC): IRSN) issued and outstanding common
stock (based on 5,557,976 shares of common stock of the Company
issued and outstanding as of March 31, 2002 as stated in the
Company's March 31, 2002 Quarterly Report). Stonestreet has
sole power to both vote and/or dispose of the total shares held.
Irvine Sensors makes minute solid-state microcircuitry that is
assembled in 3-D stacks instead of flat layouts, creating lower
weights and volumes and boosting speeds. Its Novalog subsidiary
(59% of sales) uses this technology to make integrated circuits
for wireless infrared communications applications. Subsidiary
MicroSensors makes micromachined sensors and related
electronics. Silicon Film Technologies makes digital imaging
equipment. Irvine Sensors targets its small, lightweight
components to applications in the space and aircraft industries.
The US government -- mainly the US Army -- and its contractors
account for 20% of sales.
At its March 31, 2002 balance sheet, Irvine Sensors has a
working capital deficit of about $2 million.
JDN REALTY: S&P Affirms 3 Low-B Ratings with Positive Outlook
-------------------------------------------------------------
Standard & Poor's revised its outlook on JDN Realty Corp. to
positive from stable.
At the same time, the double-'B'-minus corporate credit rating,
as well as the single-'B' ratings on $235 million of senior
notes and the single-'B'-minus rating on $50 million of
preferred stock, were affirmed.
The ratings and outlook acknowledge the company's quality asset
base, more manageable development pipeline, and improved
coverage measures. These strengths are tempered by the company's
continued reliance on a short-term line of credit, as well as
asset sales, to meet its capital needs.
Atlanta-based JDN owns and operates a portfolio of 100 retail
shopping centers primarily anchored by value-oriented retailers,
such as Lowe's (15.9% of base rent), Wal-Mart (4.9%), and Kohl's
(4.0%). These properties remain concentrated in the southeast,
though the company has expanded into the Midwest and mountain
states in recent years. Since most of the portfolio was
developed by JDN, asset quality is quite good. The properties
are relatively new (average age is around 10 years), and well
occupied (about 93%). Credit quality tenants and a long average
lease tenor should continue to provide a stable income stream.
Approximately 46% of rent is derived from investment-grade-rated
retailers, and lease expirations over the next 10 years are very
stable, with an average of only 5% of base rents expiring
annually.
Following the February 2000 announcement regarding previously
undisclosed compensation arrangements, JDN was faced with
turnover of the senior management team, a liquidity crisis
created by a technical default on the company's unsecured line
of credit, and a large and unknown contingent liability related
to shareholder lawsuits. Since that time, a new management team,
led by CEO Craig Macnab, has done an admirable job of retaining
and recruiting key personnel, improving tenant relationships,
and settling the lawsuit. Additionally, management has shifted
JDN's development focus from an aggressive pipeline of
predominantly Wal-Mart- and Lowe's-anchored centers to a smaller
number of projects that would also include grocery-anchored
shopping centers. If successful, this new model would further
diversify JDN's tenant base, and enhance the company's cash flow
stability. However, JDN has recently announced that it has begun
a search to replace Mr. Macnab as CEO. While recent
accomplishments are viewed as positive, a degree of uncertainty
surrounding JDN's strategic direction will remain until a
successor to Mr. Macnab is named.
JDN's financial profile has benefited from a more manageable
development pipeline, lower interest rates, and the elimination
of legal costs, relating to last year's litigation proceedings.
While leverage has remained virtually unchanged at 56% on a book
value basis, coverage measures have improved to 1.8 times (x)
debt service and 1.6x fixed charges. JDN appears to have
sufficient capacity to fund the remaining portion of its
existing development commitments (approximately $83 million),
and near-term debt maturities (approximately $25 million of
mortgage debt), primarily through (S&P style) construction and
permanent loans and expected asset sales proceeds. However,
JDN's secured line of credit, which is renewed annually, limits
financial flexibility, and hence the company's ability to
implement its revised business plan. In addition, since a
significant portion of the portfolio is pledged to secured
lenders, Standard & Poor's views the unsecured noteholder as
being in a subordinate position, which warrants a two-"notch"
distinction between the corporate credit rating, and the ratings
on the unsecured notes.
OUTLOOK: POSITIVE
The outlook acknowledges the recent improvement in coverage
measures, as well as the expectation that coverage ratios will
further improve as development projects are completed and
contribute to earnings. Ratings improvement is contingent upon
the successful negotiation of a longer-term, more flexible line
of credit. Additionally, Standard & Poor's will delay such
consideration until the company appoints its new CEO, and
reaffirms its commitment to its revised business plan.
KENNAMETAL INC: Fitch Rates Senior Unsecured Notes at BBB-
----------------------------------------------------------
Fitch Ratings has assigned a rating of 'BBB-' to Kennametal
Inc.'s $300 million of senior unsecured notes maturing June 15,
2012. The Rating Outlook is Negative. The notes are being issued
as part of a plan to rebalance the company's capital structure
that includes the issue of $100-150 million of additional
equity. The refinancing plan supports Kennametal's pending
acquisition of the Widia Group scheduled to be completed by July
1. Fitch anticipates the company's financial flexibility will be
supported by the renewal or replacement of a bank facility that
matures in August 2002, although such a facility, and its terms,
have yet to be finalized.
The rating incorporates the challenge of integrating Widia and
the deterioration in Kennametal's markets that has contributed
to lower revenue and diminished EBITDA. Despite difficult
industry conditions, Kennametal has maintained strong market
positions and pricing discipline and has restructured itself to
reduce capacity and refocus on its core businesses. While there
are signs that demand has bottomed out, the strength and timing
of a rebound is uncertain.
As in the past, Kennametal remains focused on reducing debt and
leverage. Upon completing the acquisition, leverage as measured
by debt/EBITDA would be expected to be in a range between 3.0
times and 3.5x based on pro forma results including Widia.
Kennametal could be expected to report improving credit
statistics assuming the Widia acquisition and recent
restructuring at Kennametal provide adequate increases in the
company's operating cash flow to offset the impact of declines
in market demand.
* * *
As reported in the May 28, 2002 edition of Troubled Company
Reporter, Kennametal Inc. (NYSE: KMT) announced its intention to
launch an underwritten public offering of 3,000,000 shares of
Common Stock and an underwritten public offering of $300 million
of Senior Unsecured Notes due in 2012.
The offerings are consistent with the company's previously
announced plans to fund the acquisition of the Widia Group as
part of a comprehensive refinancing of its capital structure,
which is also expected to include a new, three-year revolving
credit facility. The company believes these financing
arrangements are consistent with its commitment to investment
grade ratings.
Standard & Poor's rates the company's Corporate Credit Rating
at BBB. Its senior unsecured debt is rated Ba1 by Moody's, and
BBB- by Fitch.
KMART CORP: Court Carves-Out Nine Utilities from Utility Order
--------------------------------------------------------------
In nine separate agreed orders resolving requests for adequate
assurance from Kmart Corporation, Judge Sonderby rules that:
1) The Utility Order does not govern the terms of post-
petition utility services provided by:
(a) Virginia Natural Gas Inc. -- a corporation that provide
utility services to the Debtors under 16 accounts
located in the State of Virginia;
(b) Northern Indiana Public Service Company -- a utility
company that provides utility services to the Debtors'
stores in Northern Indiana, under 42 accounts;
(c) Clinton Utilities Board -- a utility company that
provides utility services to the Debtors' store number
9758 at service address 225 Clinch Avenue in Clinton,
Tennessee;
(d) Columbia Gas of Kentucky Inc., Columbia Gas of Maryland
Inc., Columbia Gas of Pennsylvania Inc., Columbia Gas
of Ohio Inc., and Columbia Gas of Virginia Inc. -- are
related utility companies that provides gas utility
service to the Debtors' stores in Kentucky, Maryland,
Pennsylvania, Ohio and Virginia under dozens of
accounts;
(e) El Paso Electric Company -- a utility company that
provides utility services to the Debtors' stores in the
El Paso, Texas area under 11 accounts;
(f) Cleveland Utilities -- a utility company that provides
utility services to the Debtors' store number 3836 at
service address 200 Paul Huff Parkway, NW in Cleveland,
Tennessee;
(g) North Georgia EMC -- a utility company that provides
utility services to the Debtors' store number 3083,
located in Fort Oglethorpe, Georgia;
(h) Western Resources (doing business as Westar Energy and
Kansas Gas Service Company), Allegheny Power, Ameren
CIPS, Ameren UE, American Electric Power, Baltimore Gas
and Electric Company, The Brooklyn Union Gas Company,
Carolina Power and Light, Central Hudson Gas & Electric
Corporation, The Connecticut Light & Power Company,
Consolidated Edison Company of New York Inc., Consumers
Energy, The Detroit Edison Company, Dominion Hope,
Dominion Peoples Gas, Duke Power Company, Florida Power
Corporation, Long Island Lighting Company, KeySpan Gas
East Corporation, National Fuel Gas Distribution
Corporation, New York State Electric and Gas
Corporation, Niagara Mohawk Power Corporation, North
Carolina Natural Gas, Orange and Rockland Utilities,
Public Service Electric and Gas Company, Public Service
of New Hampshire, Salt River Project, SCANA
Corporation, Tampa Electric Company, TXU Gas, TXU
Energy, Western Massachusetts Electric Company, and
Yankee Gas Company -- are utility companies that
provide utility services to the Debtors under various
accounts in various locations; and
(i) Missouri Gas Energy Inc. -- a utility company that
provides utility services to the Debtors under various
account numbers at various service addresses.
2) Specifically, the terms of postpetition utility services
are governed by the applicable rules, regulations, tariffs,
statutes, laws, ordinances, and customary billing
procedures governing utilities in the State where the
Accounts by which the Utilities provide services to the
Debtors are located;
3) The Court directs the Utilities to continue to provide
utility services to the Debtors and to invoice the Debtors
for the services in the same manner as was customary before
the Petition Date. The Debtors must pay the full,
undisputed amounts of the Utilities' postpetition invoices
on or before the due dates set forth in the invoices
provided. If the Debtors fail to do so, the Court allows
the Utilities to avail itself of its remedies as provided
under the Regulations;
4) The Debtors must pay postpetition security deposits in
the amount of:
$16,540 to Virginia Natural Gas,
178,088 to Northern Indiana,
7,500 to Clinton Utilities,
53,427 to Columbia Gas of Ohio,
12,122 to Columbia Gas of Virginia,
10,000 to Columbia Gas of Pennsylvania,
1,666 to Columbia Gas of Maryland,
4,512 to Columbia Gas of Kentucky,
173,250 to El Paso Electric,
5,250 to Cleveland Utilities,
9,000 to North Georgia EMC,
238,892 to Allegheny Power,
72,263 to Ameren CIPS,
203,212 to Ameren UE,
1,100,304 to American Electric Power,
227,575 to Baltimore Gas & Electric,
15,200 to Brooklyn Union Gas Company,
241,700 to Carolina Power & Light (Progress Energy),
47,800 to Central Hudson Gas & Electric,
182,337 to The Connecticut Light & Power Company,
237,290 to Consolidated Edison of NY,
479,130 to Consumers Energy,
1,038,096 to Detroit Edison Company,
2,736 to Dominion Hope,
17,895 to Dominion Peoples Gas,
536,052 to Duke Power Company,
536,917 to Florida Power Corporation (Progress Energy),
307,625 to Long Island Lighting Company,
14,925 to KeySpan Gas East Corporation,
28,691 to National Fuel Gas Distribution Company,
586,602 to Niagara Mohawk Power Corporation,
3,207 to North Carolina Natural Gas (Progress Energy),
249,513 to NY State Electric and Gas Corporation,
60,244 to Orange and Rockland Utilities,
443,495 to Public Service Electric & Gas,
70,575 to Public Service of New Hampshire,
196,549 to Salt River Project,
179,596 to SCANA Corporation,
6,200 to Southern Connecticut Gas Company,
175,375 to Tampa Electric Company,
580,890 to TXU Energy,
16,335 to TXU Gas,
174,567 to Westar & Kansas Gas Service,
30,025 to Western Massachusetts Electric Company,
14,656 to Yankee Gas Company, and
$11,272 to Missouri Gas.
The Debtors may pay the Security Deposit by cash, check,
wire transfer, or electronic funds transfer.
5) Payment to Virginia Natural Gas by any means other than
wire transfer or electronic funds transfer will be sent to:
c/o Tiffany Creech
Credit & Collections Department
Virginia Natural Gas Inc.
5100 East VA Beach Boulevard
Norfolk, Virginia
6) On each three-month anniversary of the initial payment of
the Security Deposit to Northern Indiana, the amount of the
Security Deposit will be modified, if and only if the
average month's actual usage for the preceding three months
is at least 15% more or less than the average month's
actual usage as compared with the same period in the prior
year. In that case, the Debtors will be entitled to a
refund of the Northern Indiana Security Deposit in the
amount by which the average month's actual usage is less
than the average month's actual usage from the same period
in the prior year, or Northern Indiana will be entitled to
an additional Security Deposit in the amount by which the
average month's actual usage is more than the average
month's actual usage from the same period in the prior
year. Northern Indiana will satisfy each Security Deposit
Refund by applying the amount of the refund as a payment
for future utility services under any account. The Debtors
may pay the Security Deposit Increase by check, electronic
funds transfer, or wire transfer within 15 days of
receiving Northern Indiana's notice of the Security Deposit
Increase.
7) On each three-month anniversary of the initial payment of
the Security Deposit to Missouri Gas, the amount of the
Security Deposit will be modified based on actual usage for
the preceding three monthly billing periods, if and only
if, the average month's dollar amount of that usage is at
least 15% more or less than the amount of the Security
Deposit. In that case, the Debtors will be entitled to a
refund in the amount by which the Security Deposit exceeds
the average monthly dollar usage for the prior three
monthly billing periods or Missouri Gas will be entitled to
an additional Security Deposit in the amount by which the
average monthly dollar usage for the prior three monthly
billing periods exceeds the Security Deposit. Missouri Gas
will satisfy each Security Deposit Refund by applying the
amount of the refund as payment for future utility services
under the Accounts. The Debtors may pay the Security
Deposit Increase by check, electronic funds transfer, or
wire transfer within 15 days of receiving Missouri Gas'
notice of the Security Deposit Increase;
8) On each six-month anniversary of the initial payment of the
Security Deposits to:
-- Columbia Gas,
-- El Paso Electric,
-- Allegheny Power,
-- Ameren CIPS,
-- Ameren UE,
-- American Electric Power,
-- Baltimore Gas & Electric,
-- Brooklyn Union Gas Company,
-- Carolina Power & Light (Progress Energy),
-- Central Hudson Gas & Electric,
-- The Connecticut Light & Power Company,
-- Consolidated Edison of NY,
-- Consumers Energy,
-- Detroit Edison Company,
-- Dominion Hope,
-- Dominion Peoples Gas,
-- Duke Power Company,
-- Florida Power Corporation (Progress Energy),
-- National Fuel Gas Distribution Company,
-- Niagara Mohawk Power Corporation,
-- North Carolina Natural Gas (Progress Energy),
-- NY State Electric and Gas Corporation,
-- Orange and Rockland Utilities,
-- Public Service Electric & Gas,
-- Public Service of New Hampshire,
-- Salt River Project,
-- SCANA Corporation,
-- Southern Connecticut Gas Company,
-- Tampa Electric Company,
-- TXU Energy,
-- TXU Gas,
-- Westar & Kansas Gas Service,
-- Western Massachusetts Electric Company, and
-- Yankee Gas Company,
the amount of each Security Deposit will be modified based
on the actual usage for the preceding 12 monthly billing
periods, if the average month's dollar amount of that usage
is at least 15% more or less than the amount of the
Security Deposit. The Debtors will be entitled to a refund
in the amount by which the Security Deposit exceeds the
average monthly dollar usage for the prior 12 monthly
billing periods and the Utilities will be entitled to an
additional Security Deposit in the amount by which the
average monthly dollar usage for the prior 12 monthly
billing periods exceeds the Security Deposit. The
Utilities will satisfy each Security Deposit Refund by
applying the amount of the refund as payment for future
utility services under the Accounts. The Debtors may pay
the Security Deposit Increase by check or wire transfer
within 15 days of receiving the Utilities' notice of the
Security Deposit Increase;
9) Long Island Lighting and KeySpan Gas agree to adjust in
good faith the amount of the Security Deposit by taking
into account closing of accounts and decreases in usage
arising from store closings;
10) The Debtors and Virginia Natural Gas agree to re-evaluate
the amount of Postpetition Deposit:
(a) After the expiration of six months of complete service
periods for all of the Accounts following the Utility's
receipt of the full amount of the Postpetition Deposit,
either:
(i) the Debtors may write a letter to the Utility,
c/o Ms. Creech and to its counsel, in which they
request that the Utility re-evaluate the Amount;
or
(ii) the Utility may write a letter to the Debtors,
with a copy to its counsel, in which it re-
evaluates the Amount, and sets forth the details
of whether the Amount should be changed;
(b) If the average of these six months of Invoices for all
of the Accounts is less than 15% above or below the
amount of the Postpetition Deposit, then there will be
no change in the Amount;
(c) If the Average is at least 15% below the amount of the
Postpetition Deposit, then the Amount will decrease to
the nearest $1,000 of the Average; provided, however,
that after the Utility's receipt of the Postpetition
Deposit, if the Debtors pay more than one Invoice per
Account after the applicable due date, then the Amount
shall not be reduced. The Utility will apply the
credit balance from the reduction towards payment of
any unpaid charges on the Invoices, and any remainder
shall be applied to future Invoices, if applicable;
(d) If the Average is at least 15% above the amount of the
Postpetition Deposit, then Amount will increase to the
nearest $1,000 of the Average;
(e) If the Debtors send a Re-evaluation Letter to the
Utility, then the Utility has 30 days from its receipt
to respond and send its Re-evaluation Letter to the
Debtors. Within 15 days of the sending of a Utility
Re-evaluation Letter, in which an Additional
Postpetition Deposit applies, the Debtors will pay the
Additional Postpetition Deposit to the Utility; and
(f) Thereafter, so long as these bankruptcy proceedings
remain pending, and following the determination of the
amount of each re-computation, these procedures to re-
evaluate the Amount will repeat after the passage of
each succeeding six additional months to complete
service periods for all of the Accounts.
11) The Security Deposit (and the Additional Postpetition
Deposit as to Virginia Natural Gas) will bear interest and
must be returned to the Debtors, less any amounts due for
unpaid Invoices for postpetition services, as provided
under the Regulations.
12) If there is a default by the Debtors with respect to:
-- payment of the Security Deposit or Additional
Postpetition Deposit, or
-- payment of charges for postpetition utility services,
as to which there is not a good-faith dispute, which
Default is not cured within the period provided for the in
the Regulations after written notice from the Utilities to
the Debtors, then the Utilities may terminate postpetition
utility services to the Debtors in accordance with the
Regulations and without further order of the Court.
13) Any undisputed charge for postpetition utility services
provided by the Utilities to the Debtors constitutes an
administrative expense in accordance with Sections
503(b)(1)(A) and 507(a)(1) of the Bankruptcy Code. (Kmart
Bankruptcy News, Issue No. 25; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
MFRI INC: Violates Financial Covenants Under Loan Agreements
------------------------------------------------------------
MFRI, Inc. (NASDAQ NM: MFRI), a leading manufacturer of custom-
designed industrial filtration products, specialty piping
systems and industrial process cooling equipment, reported
results for the first quarter ended April 30, 2002.
RESULTS OF OPERATIONS
* MFRI, Inc.
Three months ended April 30
Net sales of $26,768,000 for the quarter ended April 30, 2002
decreased 12.8 percent from $30,692,000 for the comparable
quarter last year. Sales decreased in all three business units.
(See discussion of each unit's sales below).
Gross profit of $5,780,000 decreased 17.6 percent from
$7,011,000 in the prior year quarter, while gross margin
decreased slightly to 21.6 percent of net sales in the current
year compared from 22.8 percent of net sales in the prior year.
The dollar decrease is primarily due to the lower sales volume
in all three units.
The quarter ended April 2002 resulted in a net loss of $182,000
or a loss of $0.04 per common share (diluted) while the prior
year quarter April 2001 resulted in net income of $140,000 or
$0.03 per common share (diluted), mainly due to reduced gross
profit as discussed above.
* Filtration Products Business
Three months ended April 30
Net sales for the quarter ended April 30, 2002 decreased 7.5
percent to $12,392,000 from $13,393,000 in the comparable
quarter of the prior year. The higher sales in fabric filter
elements and non-filtration products were more than offset by
decreased sales of baghouse services and pleated filter
elements.
Gross profit as a percent of net sales decreased from 19.1
percent in the prior year to 17.9 percent in the current year,
primarily as a result of manufacturing inefficiencies because of
lower sales volume and competitive pricing pressures in the
marketplace.
Selling expenses for the quarter ended April 30, 2002 decreased
to $1,222,000 or 9.9 percent of net sales from $1,261,000 or 9.4
percent of net sales for the comparable quarter last year. The
dollar decrease is due to lower sales volume.
General and administrative expenses decreased to $622,000 or 5.0
percent of net sales in the current year quarter from $703,000
or 5.2 percent of net sales for the comparable quarter last
year, primarily due to cost reduction measures that were
implemented in the later part of calendar year 2001.
* Piping Systems Business
Three months ended April 30
Net sales decreased 21.9 percent from $11,936,000 in the prior
year quarter to $9,323,000 for the quarter ended April 30, 2002.
This decrease was primarily due to lower domestic sales,
particularly a sale of $2,000,000 for a high temperature oil
recovery project in Canada for the comparable quarter in the
prior year and loss of sales of $593,000 from Perma-Pipe
Services Limited (PPLS), a European subsidiary that was sold
effective December 1, 2001.
Gross profit as a percent of net sales decreased from 24.4
percent to 23.3 percent, mainly due to product mix.
Selling expenses decreased from $523,000 or 4.4 percent of net
sales to $339,000 or 3.6 percent of net sales. The dollar
decrease was primarily due to lower commission expense due to
lower sales volume and eliminated selling expenses of $41,000 in
the current quarter due to the sale of PPSL effective December
1, 2001.
General and administrative expenses decreased from $1,189,000 in
the prior year quarter to $1,098,000 in the current year
quarter, but increased as a percent of net sales from 10.0
percent to 11.8 percent. The dollar decrease is primarily due to
the sale of PPSL, which had general and administrative expenses
of $124,000 in the comparable quarter of the prior year.
* Industrial Process Cooling Equipment Business
Three months ended April 30
Net sales of $5,053,000 for the quarter ended April 30, 2002
decreased 5.8 percent from $5,363,000 for the comparable quarter
in the prior year. Original equipment manufacturer sales
decreased 40.1% from the prior year due to the slowdown in the
semi-conductor industry.
Gross margins as a percentage of net sales decreased from 28.6
percent for the prior year to 27.6 percent for the current year.
The decrease is due primarily to product mix.
Selling expenses decreased from $805,000 or 15.0 percent in the
prior year to $700,000 or 13.9 percent in the current year. The
decrease is attributable to a decline in commission expense due
to lower sales volume and cost reduction measures that were
implemented in the later part of calendar year 2001.
General and administrative expenses increased from $595,000 in
the prior year to $697,000 in the current year. As a percentage
of net sales, general and administrative expenses increased from
11.0 percent in the prior year to 13.8 percent in the current
year because of more engineering expenses charged to general and
administrative expense.
* General Corporate Expenses
Three months ended April 30
General corporate expenses include general and administrative
expenses not allocated to business segments and interest
expense.
General and administrative expenses decreased from $1,022,000 or
3.3 percent of net sales in the prior year quarter to $889,000
or 3.3 percent of net sales in the current year quarter. The
dollar decrease is due to the elimination of $36,000 in goodwill
amortization as required by SFAS 142 and cost reduction measures
that were implemented in the later part of calendar year 2001.
Interest expense decreased to $519,000 for the quarter ended
April 30, 2002 from $676,000 in the prior year quarter mainly
due to net debt repayments.
MFRI is a multi-line specialty manufacturer of industrial
products in three market niches: custom-designed industrial
filtration elements, specialty piping systems and industrial
process cooling equipment. For more information, visit the
company's web site at www.mfri.com.
MFRI filed Form 10-Q on June 14, 2002, which can be accessed at
http://www.sec.gov/ The Company welcomes all inquiries at
(847) 966-1000.
At April 30, 2002, the Company was not in compliance with
certain financial covenants with its bank and its senior
noteholders. None of the lenders has declared a default. The
Company has received a loan commitment from an institutional
lender to refinance its existing bank credit agreement and
notes, which the company believes addresses its long-term
captial needs. The Company believes it is probable that the
refinancing will occur, although closing is not assured.
The Company is currently evaluating the impact of adopting SFAS
No. 142, "Goodwill and Other Intangible Assets." The Company
anticipates that adopting SFAS 142 during the Company's fiscal
year ending January 31, 2003 will require it to report a
material adverse change in its financial position and results of
operations due to writing down between 70% and 100% of the
Company's approximately $14,000,000 of goodwill and related
intangible assets, but adoption will have no effect on cash
flows of the Company. Effective in February 1, 2002, the
Company, in compliance with SFAS 142, ceased amortization of
goodwill and related intangible assets resulting in an increase
of net income of $122,000 or $0.02 per common share (diluted)
for the quarter ended April 30, 2002. If SFAS 142 had been
adopted as of February 1, 2001, the impact on net income for the
quarter ended April 30, 2001 would have been an increase in net
income of $133,000 or $0.03 per common share (diluted).
MARINER POST-ACUTE: Moody's Assigns & Confirms Low-B Ratings
------------------------------------------------------------
Moody's Investors Service took the following actions on the
ratings of Mariner Health Care, Inc.
Ratings Assigned:
* $150 million Senior Subordinated Notes, due 2010, rated B3
Ratings Confirmed:
* $85 million Senior Secured Revolving Bank Credit Facility,
due 2007, rated Ba3
* $212 million Senior Secured Term Loan B, due 2008, rated
Ba3
* Senior Implied Rating at B1
* Senior Unsecured Issuer Rating at B2
Ratings to be Withdrawn:
* $150 million Senior Secured (2nd lien) Rollover Facility
The outlook for the ratings remain stable.
The ratings broadly reflect the company's high leverage and
modest interest coverage, the significant increase in costs for
professional and general liability insurance, which is mostly
attributable to the company's operations in Texas and Florida, a
difficult labor environment and the challenges of operating in a
highly competitive and regulated industry. The ratings also
consider the potential September 30, 2002 sunset of certain
Medicare add-on payments and the resultant impact this could
have on the company's performance. Positive factors supporting
the ratings include the company's stabilizing operating trends,
favorable demographic trends and an anticipated improvement in
the company's credit profile post bankruptcy.
[Moody's] stable outlook anticipates that Mariner's continued
focus on improving operations will lead to stable operating
trends, with modest revenue and EBITDA growth supported by small
increases in payor rates (Medicare, Medicaid and private) which
will be somewhat offset by increasing labor costs. [Moody's]
outlook assumes that the Medicare add-on payments approved under
BIPA, which are scheduled to expire September 30, 2002, will be
extended by Congress and that some modest negative adjustment to
the overall rate may result. Furthermore, Moody's expects the
company to use excess cash flow to reduce debt and gradually
improve its credit profile. If the company demonstrates that it
can successfully maintain current positive trends and improve
its credit metrics on a sustained basis, a positive outlook/
rating adjustment may be warranted. Conversely, if the company's
performance declines, either as a result of worse than
anticipated Medicare trends or higher than anticipated liability
insurance costs, a negative rating adjustment may result.
Mariner is proposing to issue $150 million of senior
subordinated notes and to use the proceeds to repay the $150
million senior secured (2nd lien) rollover notes. As a result,
the level of outstanding debt, as well as the company's credit
profile, will remain unchanged. Mariner still has considerable
debt. For FYE 2002 Total Debt/Total Capitalization is expected
to be at 52% and leverage is expected to be 4.1 times (as
measured by Total Adjusted Debt/EBITDAR). Coverage for FYE 2002,
adjusted for the reorganized capital structure, is anticipated
to be at 2.1 times (as measured by EBITDAR-
apex/Interest+Rents).
The company's debt will now be comprised of senior secured bank
facilities, senior subordinated notes and capital leases and
mortgages. The Ba3 rating on the senior secured credit
facilities is notched up from the company's senior implied
rating based on the adequate collateral coverage. The rating on
the senior subordinated notes, which are guaranteed, reflects
their contractual subordination to the senior secured credit
facilities.
Certain industry issues will continue to impact the ratings.
While Moody's view on the reimbursement environment for nursing
homes during 2001 was positive relative to previous years, in
light of the potential sunset of certain Medicare give-backs
approved under the Beneficiary Improvement and Protection Act of
2000 ("BIPA"), [Moody's] view has become more mixed. We still
envision the overall upward movement in reimbursement trends to
continue over the long-term, though there may be some cuts in
Medicare reimbursement levels in 2003. On the expense side,
nursing homes are still under pressure, primarily due to a tight
labor market and nursing shortages. With the economy showing
signs of weakness, pressure from the labor market may become
less acute.
Further impacting the ratings, Moody's remains concerned over
the high level of professional and general liability insurance
costs. Moody's anticipates that excessive liability expenses,
particularly in Texas and Florida, will continue to impact
Mariner and most large long-term care providers for the
foreseeable future. For FYE 2001, the company had liability-
related expenses of approximately 5% of revenues. However,
unlike other large operators who have recently sold their
operations in the state of Florida, Mariner continues to operate
profitably in both Texas and Florida. Operations in these states
are significant, representing approximately 30% of the company's
revenues. While recent tort reform in Florida may help mitigate
this concern, the potential benefit is still uncertain. Moody's
believes that this remains a risk that the company must actively
manage.
Supporting the ratings, Moody's notes that the company's
performance has recently shown improvement. The company is
forecasting an EBITDAR margin of 10.4% for FYE 2002 with
relative stability going forward. Moody's believes that the
company's targets are achievable, and notes that the occupancy
levels and the Quality Mix (census attributable to Medicare +
Private and Other) are relatively good at 87% and approximately
50%, respectively. Moody's further notes that management has
indicated that it will only engage in selective small
acquisitions to strengthen its positions in core markets.
Therefore, [Moody's expects] management will remain focused on
improving operating efficiencies and will use excess cash flow
to reduce debt (the credit facilities require 75% of excess cash
flow be used to repay debt). Assuming the company adheres to
this strategy, [Moody's anticipates] cash flow from operations
will represent approximately 25% of debt for FYE 2003.
Mariner Health Care, Inc., headquartered in Atlanta, Georgia,
operates over 293 inpatient and assisted living facilities
representing approximately 38,000 beds across the country as
well as 13 long-term acute care hospitals ("LTACs").
MAXICARE HEALTH: Froelich Sues Directors for $10MM+ in Damages
--------------------------------------------------------------
On or about June 6, 2002, Eugene Froelich commenced a derivative
action in Superior Court of the State of California, Los Angeles
County, on behalf of Maxicare Health Plans Inc. (OTC: MAXIQ)
against certain of its former and current officers and
directors. The complaint, which names the Company as a nominal
defendant, alleges, in substance, that the officers and
directors breached their fiduciary duty to Maxicare in that they
flagrantly mismanaged company affairs. The action seeks
compensatory damages of not less than $10 million, together with
an unspecified amount of punitive damages. Mr. Froelich was
previously the executive vice president, chief financial officer
and a director of Company. Maxicare has a judgment in excess of
$3 million against Mr. Froelich based on a promissory note that
he gave the Company while he was a company executive.
Maxicare Health Plans, the holding company, operates HMO
subsidiaries in California and Indiana. Maxicare offers group,
Medicaid, and Medicare HMO policies; PPO insurance; point-of-
service plans; pharmacy programs; and wellness programs to its
more than 350,000 members (about 70% are in California). Through
Maxicare Life and Health Insurance, the company provides group
life and accident policies. At its September 30, 2001 balance
sheet, Maxicare Health has a total shareholders' equity deficit
of about $20 million.
MEASUREMENT SPECIALTIES: SEC Begins to Probe Financial Reports
--------------------------------------------------------------
Measurement Specialties, Inc. (Amex: MSS) reported that the
Securities and Exchange Commission has commenced a formal
investigation relating to the matters reported in the Company's
quarterly report on Form 10-Q for the quarter ended December 31,
2001. The Company, at its own initiative, contacted the staff of
the SEC after discovering that its Chief Financial Officer had
failed to accurately and timely inform senior management, the
Board and the Company's auditors of a covenant default under its
credit agreement and the lenders' refusal to waive that default.
Since February 2002, the Company and a Special Committee formed
by its Board of Directors have been cooperating with the staff
of the SEC.
Joseph R. Mallon Jr., Chairman and Chief Executive Officer,
stated, "Measurement Specialties is committed to working with
the staff of the SEC regarding all inquiries into the Company's
and management's activities. The formal investigation provides
us with the opportunity to address fully any concerns that the
SEC might have. As I have previously stated, Measurement
Specialties is fully determined to return to and add to our
years of rapid, successful growth. We remain focused on the
business of the Company and look forward to the completion of
the SEC's formal investigation."
Measurement Specialties cannot predict at this time whether the
SEC will pursue an enforcement action against the Company or any
of its officers and directors.
Measurement Specialties is a designer and manufacturer of
sensors, and sensor-based consumer products. Measurement
Specialties produces a wide variety of sensors that use advanced
technologies to measure precise ranges of physical
characteristics, including pressure, motion, force,
displacement, angle, flow, and distance. Measurement Specialties
uses multiple advanced technologies, including piezoresistive,
application specific integrated circuits (ASICs), micro-
electromechanical systems (MEMS), piezopolymers, and strain
gages to allow their sensors to operate precisely and cost
effectively.
METALS USA: Has Until Nov. 30 to Make Lease-Related Decisions
-------------------------------------------------------------
Without prejudice to any landlord's right to compel Metals USA,
Inc. and its debtor-affiliates to assume or reject a lease at an
earlier date, Judge Greendyke extends the lease decision period
to November 30, 2002 or the effective date of any Reorganization
Plan. (Metals USA Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
METROCALL: US Trustee Sets Creditors' Meeting for July 7, 2002
--------------------------------------------------------------
The United States Trustee will convene a meeting of Metrocall,
Inc.'s creditors on July 12, 2002 at 10:00 a.m., 2nd Floor, Room
2112, J. Caleb Boggs Federal Building, Wilmington, Delaware.
This is the first meeting of creditors required under 11 U.S.C.
Sec. 341(a) in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Metrocall, Inc. is a nationwide provider of one-way and two-way
paging and advanced wireless data and messaging services. The
Company filed for chapter 11 protection on June 3, 2002. Laura
Davis Jones, Esq. at Pachulski Stang Ziehl Young & Jones
represents the Debtors in their restructuring efforts. When the
Company filed for protection from its creditors, it listed
$189,297,000 in total assets and $936,980,000 in total debts.
DebtTraders says that Metrocall Inc.'s 10.375% bonds due 2007
(MCALL2) are quoted at a price of 4. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=MCALL2for
real-time bond pricing.
MILACRON: Selling Valenite Assets to Sandvik for $175 Million
-------------------------------------------------------------
Milacron Inc. (NYSE: MZ) announced a long-term strategy to focus
most of its capital and resources to building its leading
position as a premier supplier of plastics processing
technologies and to strengthening its industrial fluids business
on a worldwide basis. Reflecting this decision, the company,
which announced the sale of its overseas metalcutting tool
businesses last month, also announced today an agreement to
divest its major North American metalcutting tool subsidiary,
Valenite.
"We are aligning our future with two important long-term trends
in manufacturing," said Ronald D. Brown, chairman, president and
chief executive officer. "The first and most important is the
increasing use of plastics as the material of choice for
products made around the world. The second is the growing demand
for cleaner, healthier and environmentally friendlier industrial
fluids. We will leverage our acknowledged technological
leadership in these two areas and will continue to expand our
geographic presence, with a growing emphasis on higher-margin
products and services. And internally we will accelerate our
implementation of Lean and Six Sigma process changes throughout
our organization to drive our operating performance to
excellence," Brown said.
Sandvik to Buy Valenite for $175 Million
Facilitating Milacron's strategic shift is the signing of a
definitive agreement to sell its Valenite metalcutting tool
business, located primarily in North America, to Sandvik, a
global producer of metalcutting tools headquartered in Sweden,
for $175 million in cash, subject to post closing adjustments.
From the sale, Milacron expects to receive net cash proceeds of
approximately $150 million and to report an after-tax gain of
$27 million to $30 million, or $0.80 to $0.90 per share, upon
closing.
The sale of Valenite is the second major step Milacron has taken
recently in support of its new focus. On May 6, the company
announced an agreement to sell its Widia and Werko metalcutting
tool businesses in Europe and India to Kennametal (NYSE: KMT)
for EUR188 million. Net cash proceeds from both sales are
estimated at $290 million, the bulk of which will be used to pay
down bank debt, thus strengthening the company's balance sheet
and significantly improving its financial flexibility.
Under terms of the agreement announced today, Sandvik will
purchase Valenite, a manufacturer of carbide insert tools, steel
tool holders, and carbide die and wear parts, with about 1,300
employees and major manufacturing facilities in Michigan, Texas
and South Carolina, as well as operations in Japan. In 2001, a
down year, Valenite had sales of approximately $200 million and
operating earnings (earnings before interest and taxes) of about
$3 million excluding restructuring charges. Credit Suisse First
Boston advised Milacron on the transaction, which is expected to
be completed within the next two to three months, subject to
regulatory approval and other customary closing conditions.
"As with the sale of Widia and Werko, for Valenite our objective
was to reach an agreement with a strategic buyer who values our
people and assets and intends to grow the business," Brown said.
Outlook for 2002
"Capital spending levels remain severely depressed in major
markets around the world, and we now expect further delays in
the recovery of the capital goods sector," Brown said. As a
result, revenues from the machinery portion of Milacron's
plastics technologies group are now projected to be roughly $30
million lower in 2002 than previously anticipated, with an
accompanying drop in the segment's operating earnings of about
$15 million. These declines from prior estimates are expected to
be spread out somewhat evenly over the three remaining quarters
of the year.
"Thanks to the successful execution of our previously announced
restructuring initiatives, we still anticipate an improvement in
earnings in the second half of the year, but at this rate we
won't approach break-even until the fourth quarter," Brown said.
Detailed projections are provided in the attached table.
To accommodate the delay in the recovery of Milacron's capital
equipment sales, relevant covenants in the company's revolving
credit facility with its bank group have been amended. This
amendment is being filed with the Securities and Exchange
Commission.
First incorporated in 1884, Milacron Inc. is a leading
technology supplier to the plastics-processing and metalworking
industries throughout the world. The company has major
manufacturing facilities in North America, Europe and Asia. For
further information, visit the company's Web site or call the
toll-free investor hot line: 800-909-MILA (800-909-6452).
Sandvik is a high-technology engineering group with advanced
products and world-leading positions in selected areas - tools
for metalworking, machinery and tools for rock excavation,
stainless steel, special alloys and resistance heating materials
and process systems. The Group has 36,000 employees, with annual
sales of approximately SEK 50,000 M, or about US $5 billion.
* * *
As previously reported, Standard & Poor's affirmed its double-
'B'-minus corporate credit rating on Milacron Inc. following the
company's announcement that it is selling the Widia Group, its
European and Indian metalworking tools operation, to Kennametal
Inc. (BBB/Negative/--) for Euro 180 million (about $170
million). Net cash proceeds to Milacron are expected to be about
$140 million and the company expects to report an after-tax gain
on the sale of $10 million - $12 million.
Most of the sale proceeds will be used to reduce bank debt but
Milacron still needs to demonstrate profitability in its core
plastics machinery business.
The Cincinnati, Ohio-based company with $1.3 billion sales in
2001, participates in the plastics machinery sector (injection
molding, blow molding, extrusion, mold bases), where demand can
swing widely, and in the cyclical industrial products market
(metalcutting tools, metalworking fluids).
The ratings on Milacron reflect an average business risk profile
and an aggressive financial profile. Milacron's current
profitability has declined materially because of the sharp
downturn in North American demand for plastics machinery and
metalworking tools; the timing and extent of market recovery
remains highly uncertain.
NATIONSRENT INC: Committee Signs-Up Traxi for Financial Advice
--------------------------------------------------------------
NationsRent Inc.'s Official Committee of Unsecured Creditors ask
for Court approval to retain and employ Traxi LLC as its
financial advisors and investment bankers in these Chapter 11
cases, effective as of May 1, 2002. Traxi will replace Berenson
Minella & Company whose retention was terminated effective as of
April 30, 2002.
Committee chairman James Schaeffer admits that the Committee's
employment of Traxi is primarily because Perry M. Mandarino, a
former managing Director of Berenson Minella, is now a partner
of Traxi since late April 2002. Mr. Mandarino has extensive
knowledge in this matter and was primarily responsible for the
Berenson Minella's engagement while at Berenson Minella.
According to Mr. Schaeffer, Traxi will provide the same services
as Berenson Minella including:
A. providing expert testimony on the results of the committee's
and Traxi's findings;
B. analyzing potential divestures of the Debtors' operations;
and,
C. assisting the Committee in developing alternative plans,
including contacting potential plan sponsors, if applicable.
Mr. Schaeffer tells the Court that, subject to Court approval,
Traxi will be paid a fixed monthly rate of $75,000 beginning May
1, 2002. The firm will also be allowed a success fee of 1% of
the value attained by the Unsecured Creditors pursuant to a Plan
of Reorganization or Liquidation and reimbursement of reasonable
put-of-pocket expenses and other fees incurred.
Traxi Partner Perry Mandarino assures the Court that the firm
has no connection with the Debtors, their creditors, the U.S.
Trustee or any other party with an actual or potential interest
in the Debtors' Chapter 11 cases. Accordingly, Traxi is a
"disinterested person" as defined in the Bankruptcy Code.
However, Traxi has been engaged with several parties in matters
wholly unrelated to the Debtors' Chapter 11 cases with:
Citicorp, Credit Lyonnais, GE Capital Corp, LaSalle Bank,
Deutsche Bank, Bank One, Union Bank of California, Citizens
Bank, First Union National Bank, Archimedes Funding, Merrill
Lynch, Morgan Stanley, Paribas Capital Funding, Ares Leveraged
Investment Fund, Bank of America, Van Kampen, BNP Paribas,
Insosuez Capital, Bank of Montreal, The Bank of New York,
Investcorp, David Babson & Co., Teachers Advisors, ING Pilgrim,
PPM America, Blackrock Financial Management, ford Motor Credit,
Transamerica Business Credit, Fleet Capital, and IBJ Whitehall
Business Credit. (NationsRent Bankruptcy News, Issue No. 13;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
NATIONSRENT: Files Plan of Reorg. and Disclosure Statement in DE
----------------------------------------------------------------
NationsRent, Inc. has filed its Plan of Reorganization and
related Disclosure Statement with the U.S. Bankruptcy Court for
the District of Delaware. The confirmation of the Plan of
Reorganization is subject to the vote of NationsRent's creditors
and bankruptcy court approval. NationsRent filed a voluntary
petition under chapter 11 of the U.S. Bankruptcy Code to
restructure the Company's debt on December 17, 2001.
Philip V. Petrocelli, President and Chief Executive Officer,
said, "The filing of our Plan of Reorganization is a significant
milestone in our case and moves us closer to our goal of
emerging from chapter 11 as a strong company on a firm financial
foundation. During the past months, we have been focused on
providing our customers with high-quality equipment rentals and
making sure that superior customer service is a top priority. In
addition, we continue to make progress in implementing our
strategic initiatives. We will continue to work closely with our
stakeholders and the bankruptcy court to lead NationsRent
through the chapter 11 process successfully."
Headquartered in Fort Lauderdale, Florida, NationsRent is one of
the country's leading construction equipment rental companies
and operates over 230 locations in 26 states. NationsRent
branded stores offer a broad range of high-quality construction
equipment with a focus on superior customer service at
affordable prices with convenient locations in major
metropolitan markets throughout the U.S. More information on
NationsRent is available on its home page at
http://www.nationsrent.com
NationsRent Inc.'s 10.375% bonds due 2008 (NATRENT), DebtTraders
reports, are quoted at a price of 1. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NATRENTfor
real-time bond pricing.
NETIA HOLDINGS: Appoints PricewaterhouseCoopers as Auditors
-----------------------------------------------------------
Netia Holdings S.A. (Nasdaq: NTIAQ, WSE: NET), Poland's largest
alternative provider of fixed-line telecommunications services,
announced that its Ordinary Shareholders' Meeting held on June
18, 2002 (i) approved the Management Board's report and
financial statements for the 2001 financial year, (ii) appointed
PricewaterhouseCoopers Sp. zo.o. as its expert auditor to
examine the financial statements for the 2002 financial year,
(iii) approved the remuneration granted in 2001 and later to
members of the Supervisory Board and (iv) re-adopted certain
shareholders' resolutions from the March 12, 2002 Extraordinary
General Shareholders' Meeting.
Netia re-adopted the resolutions regarding the issuance of
series "H" shares, previously adopted by the Extraordinary
General Shareholders' Meeting on March 12, 2002 in connection
with the Company's ongoing restructuring. Pursuant to Polish
law, a resolution increasing the Company's share capital may not
be filed with the registry court later than six months after its
adoption. Re-adoption of these resolutions therefore extends the
time during which the share capital increase can be registered.
Arrangement proceedings in connection with Netia's restructuring
were opened in Poland on May 15, 2002.
Netia Holdings SA's 13.5% bonds due 2009 (NETH09PON2),
DebtTRaders says, are trading at 18. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NETH09PON2
for real-time bond pricing.
OWENS CORNING: Will Focus on Composites Growth in Auto Industry
---------------------------------------------------------------
Owens Corning said it will focus on four key areas for growth in
the use of composites materials by automakers during the next
five years: structures, closures, interior and exterior acoustic
systems.
To support its growth strategy, OC Automotive has constructed a
new Automotive Solutions Center in Novi, Michigan. Company
officials and local dignitaries were in attendance for the
facility's grand opening ceremony late last month.
"The new Center is designed to bring together our strengths in
application development, program management and our strong
technical capabilities to accelerate the growth of composites in
the automotive market," says Andrew Hopkins, general manager of
Owens Corning Automotive.
Hopkins says the business has defined the four targeted
applications for growth as:
A. Structures, such as end gates and mid gates; pickup beds;
leaf springs, front-end and door modules; instrument panels
and running boards;
B. Closures, such as tailgates, deck lids and hoods;
C. Interior acoustic systems, including headliners, acoustic
absorbers, flat-panel speakers, parcel shelves, door trim,
hood and firewall liners and sunshades; and
D. Exterior acoustic systems such as mufflers, Silentex sound-
reducing systems and underbody and noise shields.
"Our focus is the development of applications that are enhanced
by Owens Corning's innovation and expertise in composites
materials," says Hopkins. "Our unique approach allows us to
work with the Tier One community to create and deliver new
composite solutions parts and share the value." Automotive
engineers are able to 'design-in' many integrated features and
create applications that meet both the performance and economic
needs of the industry.
Hopkins says composites offer material alternatives that are
flexible, easy to process and economical - all major advantages
as the trend toward niche vehicles increases. "This is
important today, especially given the fact that automakers are
building more and more niche vehicles that have limited
production volumes and can't bear the high retooling costs
required for traditional metal parts," he says.
"This Automotive Center will focus on bringing together the
unique capabilities of Owens Corning, and those of our strategic
alliance partners," adds Hopkins. "Part of our plan for the
Center is to have a significant area for prototyping and new
technology demonstrations."
The Center, for example, will be the focal point for work on the
next-generation of the OC Preformable System, which combines a
proprietary glass fiber with unique binder technology to more
efficiently manufacture reinforcement preforms, such as the
preformable system used on the Chevrolet Silverado pickup box.
The Center also will develop new material systems such as its
proprietary StaMaxO P long-fiber polypropylene used in the 2003
BMW Mini Cooper front-end module, and next-generation carbon
fiber composite technology.
The engineering/architectural firm for the new headquarters is
Middough Engineering Co., based in Cleveland, Ohio. The
developer for the project is Channel Partners, based in
Bloomfield Hills, Mich.
The new Center is located at Beck West Corporate Park, 46500
Humboldt Drive in Novi, and houses 83 employees. "By the end of
2002, our technical, engineering and sales and marketing staffs
will have grown to 103 including administrative staff,
scientists, engineers and OC Automotive management," Hopkins
says. (Owens Corning Bankruptcy News, Issue No. 33; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
PACIFIC GAS: Seeks Approval of Terms Re Forbearance by Banks
------------------------------------------------------------
As previously reported, Pacific Gas and Electric Company is
currently benefiting from certain below market-rate loans made
to PG&E by the California Pollution Control Financing Authority
with the proceeds from the sale of certain tax-exempt revenue
bonds. Pursuant to their terms, the bonds cannot remain
outstanding unless they continue to be secured by letters of
credit or certain other forms of credit enhancement, and PG&E is
obligated to repay the loans by reimbursing the Letter of Credit
issuing banks for all draws made on the letters of credit that
are used to pay the bonds. Defaults by PG&E would give the
letter of credit issuing banks the right to cause redemption of
the bonds through draws on their letters of credit.
PG&E did default -- as debtor in possession, it has not
reimbursed the Letter of Credit Issuing Banks for any of the
payments they have made pursuant to the several post-petition
draws on their Letters of Credit.
However, no declaration of default and no redemption of bonds
has occurred because the parties negotiated and entered into a
term sheet (the Prior Term Sheet) and obtained the Court's
approval of it, as reported at [00354] and [00329].
The Prior Term Sheet provides that, subject to certain
conditions, the letter of credit issuing banks will extend the
terms of their respective letters of credit, and will forbear
from exercising remedies that would result in the redemption of
the bonds, for a limited period, in exchange for the payment of
certain increased letter of credit fees and certain other
concessions by the Debtor.
Under the Prior Term sheet, one of the conditions for continued
forbearance by the banks is the confirmation, on or before
September 30, 2002, of a plan of reorganization which will
provide for the treatment of the claims of the letter of credit
issuing banks in the manner as then set forth in the Debtor's
plan of reorganization, or for alternative treatment which is
acceptable to the banks.
The Debtor has requested, and the letter of credit issuing banks
have agreed, subject to certain terms and conditions, to waive
this condition of the September 30, 2002 deadline for plan
confirmation, provided that a plan of reorganization which
provides for the treatment of their claims in the manner set
forth in the new Term Sheet, or for alternative treatment
acceptable to them, becomes effective on or before June 1, 2003.
The parties accordingly entered into the First Amended and
Restated Summary of Terms With Respect to Forbearance and
Proposed Revised Treatment of Letter of Credit Bank Claims in
the Plan of Reorganization (the Term Sheet). The terms of the
Term Sheet maintain the bulk of the provisions as the Prior Term
Sheet with some adjustments in fees and provisions under the
Plan of Reorganization in accordance with the change regarding
the deadline for confirmation of the plan.
In this motion, the Debtor asks for the Court's approval of the
Term Sheet. The Debtor tells the Court that the provisions of
the new Term Sheet will provide it with additional time to
confirm a plan of reorganization that would permit the
reorganized Debtor to retain the benefits of the tax-exempt
financing offered by the continued existence of the Letter of
Credit Backed PC Bonds. In the business judgment of the Debtor,
the increased fees and other adjustments encompassed in the Term
Sheet are fair and reasonable. The Debtor notes that the
substantial interest cost savings by maintaining the benefits of
the outstanding tax-exempt financing more than offset the cost
of the fees. The Debtor believes that entry into the Term Sheet
is in the best interest of the PG&E estate.
Salient Term Sheet Provisions
A. Agreements by the Letter of Credit Issuing Banks.
(1) Forbearance:
Each of the Letter of Credit Issuing Banks has agreed to
(i) maintain its Letter of Credit outstanding in its current
stated amount, and
(ii) not provide the Bond Trustee with notice of any default
under its Reimbursement Agreement or non-reinstatement of
its Letter of Credit or take any other action which would
result in the mandatory tender or redemption of any of the
outstanding Letter of Credit Backed PC Bonds without the
prior written consent of PG&E until the earlier of: (x) the
last interest payment date on the related series of Letter
of Credit Backed PC Bonds immediately preceding the
expiration date of such Letter of Credit, as such expiration
date will be extended in accordance with the terms of the
Term Sheet, and (y) the occurrence of a "Termination Event."
In addition to Termination Events as described in the Prior
Term Sheet, under the Term Sheet, a "Termination Event" will
have occurred if "a plan of reorganization of PG&E which
provides for the treatment of Allowed Letter of Credit Bank
Claims in the manner described in the Term Sheet or for
alternative treatment of Allowed Letter of Credit Bank
Claims which is acceptable to the Letter of Credit Issuing
Banks does not become effective on or before June 1, 2003.
(2) Extension of Letter of Credit Expiration:
Within 30 days after the date of this Motion, each of the
Letter of Credit Issuing Banks will have extended the term
of its Letter of Credit for at least one year.
B. Agreements by the Debtor.
(1) Reimbursement of Interest Draws:
Within 10 days after the date this Motion is approved by the
Court, PG&E will reimburse the Letter of Credit Issuing
Banks for the amounts drawn under their respective Letters
of Credit for the payment of interest on the related Letter
of Credit Backed PC Bonds, together with all accrued and
unpaid interest due on such amounts, all to the extent
provided in the Reimbursement Agreements. Thereafter, PG&E
would currently reimburse the Letter of Credit Issuing Banks
for all amounts drawn under their Letters of Credit for the
payment of interest on the Letter of Credit Backed PC Bonds.
Under the Prior Term Sheet, reimbursement would commence on
the Confirmation Date.
The Debtor points out that the proposed change from the terms
of the Prior Term Sheet would merely accelerate the date such
payments would be made by the Debtor but would not expand its
obligations.
The Debtor believes that the change is not only a reasonable
concession to make to the Letter of Credit Issuing Banks for
the extensions of the term of forbearance, but is also in the
best interest of the Debtor's estate, considering that:
-- the subject payments accrue interest from the date of each
draw until paid at an average fluctuating annual rate of
interest approximately equal to one and one-half percent
in excess of the prime rate.
-- in accordance with the Court's Order on Debtor's Emergency
Motion for Order Authorizing Continuing Use of (1) Certain
Bank Accounts, (2) Cash Management System, and (3)
Corporate Investment Policy dated April 6, 2001, the funds
the Debtor has available to satisfy such obligations have
been, and are expected to continue to be, invested in
short-term obligations which have an average yield
substantially below the prime rate,
(2) Additional Fees:
During the period from and after the Motion Approval Date and
continuing until July 1, 2002, PG&E will be required to pay
to each of the Letter of Credit Issuing Banks, quarterly, in
arrears, the Original Letter of Credit Fee, together with an
amount equal to the positive difference, if any, of an amount
per annum equal to 2% of the Stated Amount of the Letter of
Credit, less the Original Letter of Credit Fee (together, the
Initial Letter of Credit Fee). This amount of total fee will
accrue from and after December 1, 2001 and until July 1,
2002, and will be payable on the same dates as are set forth
for payment of Letter of Credit Fees in the applicable
Reimbursement Agreement.
During the period from and after July 1, 2002 and continuing
until the Effective Date, PG&E will be required to pay to
each of the Letter of Credit Issuing Banks, quarterly, in
arrears, the Original Letter of Credit Fee, together with an
amount equal to the positive difference, if any, of an amount
per annum equal to 3% of the Stated Amount of the Letter of
Credit, less the Original Letter of Credit Fee. This amount
of total fee will accrue from and after July 1, 2002 until
the Effective Date, and will be payable on the same dates as
are set forth for payment of Letter of Credit fees in the
applicable Reimbursement Agreement.
The Term Sheet also provides that within 10 days after the
Motion Approval Date, PG&E is required to pay to Deutsche
Bank AG New York Branch an agency fee in the amount of
$250,000 as additional compensation for acting as the
administrative agent under the terms of its Reimbursement
Agreement during the period from and after December 1, 2001
through the Effective Date. This is provided that if no
Termination Event has occurred prior to June 30, 2002 and
Deutsche Bank AG is not in default of its obligations under
the Term Sheet, the agency fee will be deemed fully earned on
the earlier of the Confirmation Date or June 30, 2002.
The Debtor believes that the changes are reasonable and
necessary.
(3) Professional Fees:
The Term Sheet provides that PG&E will pay the reasonable
fees and expenses of unrelated third party professionals
retained by the Letter of Credit Issuing Banks, to the extent
incurred subsequent to April 6, 2001 in connection with the
Chapter 11 case of PG&E no later than 30 days subsequent to
each date a reimbursement request is made in writing by the
Letter of Credit Issuing Bank to PG&E.
PG&E notes that the retention of this provision as in the
Prior Term Sheet does not expand PG&E's obligations, but, in
light of the full payment of creditors proposed in the
Amended Plan, only serves to accelerate the timing of the
reimbursement of the Letter of Credit Issuing Banks for such
costs. Again, given the substantial benefits to PG&E from
this deal, PG&E believes that such concession by PG&E was,
and continues to be, minor and justified.
(4) Purchase in Lieu of Redemption:
For United States federal income tax purposes, Letter of
Credit Backed PC Bonds which have been purchased, rather than
redeemed or cancelled, remain outstanding. However, the
cooperation of the Banks is necessary in order to provide a
mechanism by which the Letter of Credit Backed PC Bonds can
be purchased. Thus, the Term Sheet retains the provision as
in the Prior Term Sheet for PG&E and the Letter of Credit
Issuing Banks to cooperate in a mutual attempt to amend the
related bond documents to permit the Letter of Credit Issuing
Banks to purchase the Letter of Credit Backed PC Bonds under
certain circumstances in which the Letter of Credit Backed PC
Bonds would otherwise be subject to redemption and
cancellation. The Debtor tells the Court that such amendments
to the respective Loan Agreements and Indentures would not be
adverse to the interests of the holders of Letter of Credit
Backed PC Bonds and would enhance PG&E's ability to maintain
the benefits of the tax-exempt financing provided by the
Letter of Credit Backed PC Bonds.
In relation to the change in provision regarding the date of
confirmation of the plan, the Term Sheet provides that, in
the event that a plan of reorganization acceptable to the
Letter of Credit Issuing Banks does not become effective on
or before June 1, 2003, then each Bank will have the right,
but not the obligation, to cause the related series of Letter
of Credit Backed PC Bonds to be tendered for purchase,
subject to a first lien security interest in favor of the
respective Letter of Credit Issuing Bank to additionally
secure the obligations of PG&E under the related
Reimbursement Agreement, and shall not take any action which
would cause the related series of Letter of Credit Backed PC
Bonds to be called for redemption unless certain Termination
Events occur.
This change extends the date before which the Letter of
Credit Issuing Banks are permitted to exercise the purchase
right from June 30, 2002 to June 1, 2003, thus granting the
Debtor additional time to confirm and consummate its plan of
reorganization while maintaining the Letter of Credit Backed
PC Bonds outstanding at the tax-exempt rate.
C. Treatment of Allowed Letter of Credit Bank Claims.
(1) Proposed Plan Treatment:
The Term Sheet provides that the plan of reorganization
propounded by PG&E will treat Allowed Letter of Credit Bank
Claims in substantially the same manner as the Prior Term
Sheet with the following three exceptions:
* First: that portion of Allowed Letter of Credit Bank
Claims that were to be satisfied by the delivery of long-
term notes under the Prior Term Sheet and the Amended
Plan, will instead be paid in Cash on the Effective Date;
* Second: Allowed Letter of Credit Bank Claims with respect
to Letters of Credit that may hereafter be drawn for the
payment of the redemption price of Letter of Credit
Backed PC Bonds will not be subject to conversion to
Prior Bond Claims (Class 41) as provided in the Prior
Term Sheet and the Amended Plan, but will instead be
treated under the No Bonds Option as described above; and
* Third: the Term Sheet adds the payment of certain fees
to the treatment of Allowed Letter of Credit Bank Claims
provided in the Prior Term Sheet and Amended Plan in
decreasing amounts from the Remarketing Option Incentive
Fee, to the Purchase Option Incentive Fee, to the No
Bonds Option Fee, in order to induce the Letter of Credit
Issuing Banks to (i) maintain their Letter of Credits
securing Letter of Credit Backed PC Bonds that
In addition, regardless of the treatment option selected by
the Debtor, the Term Sheet provides that in the event that on
or prior to the Effective Date, the Amended Plan is further
amended by the Debtor to increase the amount payable to the
holders of Prior Bond Claims or General Unsecured Claims on
the Effective Date, then on the Effective Date of the
Debtor's plan of reorganization the Debtor would be required
to pay to each Letter of Credit Issuing Bank an additional
fee in an amount proportionately equal to the greater of (i)
the average additional cash amounts that holders of Prior
Bond Claims would receive on the Effective Date, or (ii) the
average additional cash amounts that holders of General
Unsecured Claims would receive on the Effective Date.
The Debtor has agreed to pay the additional fees in the event
that it elects to so amend its plan of reorganization as an
inducement to the Letter of Credit Banks to enter into the
Term Sheet and to extend the term of their forbearance.
PG&E has determined that it is in the best interests of the
estate and its creditors for PG&E to amend and restate the terms
of the Prior Term Sheet by entering into the Term Sheet. By this
Motion, PG&E asks for the Court's approval of PG&E's execution
of the Term Sheet which PG&E has entered into with the various
counter-parties. (Pacific Gas Bankruptcy News, Issue No. 38;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
PACKETPORT.COM: April 30 Working Capital Deficit Reaches $709K
--------------------------------------------------------------
PacketPort.com, Inc. incurred a net loss of $373,707 during the
three months ended April 30, 2002. In addition, cash available
at April 30, 2002 is unable to support the Company's operations
at present levels through the completion of fiscal year 2003
without the Company raising more capital through public or
private financing or extending certain terms with certain
vendors. The Company does not know if additional financing will
be available or, if available, whether it will be available on
attractive terms. If the Company does raise more capital in the
future, it is probable that it will result in substantial
dilution to its stockholders. These factors create substantial
doubt as to the Company's ability to continue as a going
concern. Management plans on obtaining sufficient working
capital from planned Private Placements in the near term,
setting up strategic partners to reduce future development costs
and the expansion of revenue earnings for customers utilizing
its existing products. The ability of the Company to continue
as a going concern is dependent upon the success of the capital
offering or alternative financing arrangements.
The Company is engaged in the business of manufacturing and
marketing computer peripheral hardware and software products for
IP Telephony solutions and services that are used for a wide
range of telephony applications for the Internet,
telecommunications and other data networking industries.
The Company recorded a net loss of $373,707, on revenues of
$36,884, for the three months ended April 30, 2002 as compared
to a net loss of $1,051,486 on revenues of $6,315 for the
comparable period ended April 30, 2001.
Research and development expenses were $52,013 in 2002 compared
to $394,002 in 2001 and selling, general and administrative
expenses decreased to $232,334 in 2002 from $504,599 for the
comparable quarter in 2001.
Cost cutting measures begun in the second half of fiscal 2002,
resulted in significant reductions to research and development
as well as selling, general and administrative expenses. These
measures, designed to conserve cash, also contributed to the
delay in the development and introduction of the Company's new
products: the DataCrate Soft Central Office and VoicePak USB
Phone. The Company expects to introduce these new products by
the end of the current fiscal year and, until then, to
experience revenue levels comparable to those of the prior year.
At April 30, 2002, the Company had a working capital deficit of
$709,315 as compared to a working capital deficit of $693,521 at
January 31, 2002. At April 30, 2002, the Company had cash and
cash equivalents of approximately $1,380. Cash provided by
operating activities of $53,228 for the quarter ended April 30,
2002 primarily consisted of the net loss, offset by non-cash
charges for depreciation, amortization and common stock issued
for services and the extension of an additional $214,387 from
Microphase Corporation. The Company also invested $54,886 in
software and licenses.
Management expects operating losses and negative cash flow for
the foreseeable future as the Company must invest in marketing
and promotional activities, acquisitions, technology and
operating systems. PacketPac.com cannot be certain when, and
if, it will achieve sufficient revenues in relation to expenses
to become profitable.
PORTOLA PACKAGING: May 31 Balance Sheet Upside-Down by $27 Mill.
----------------------------------------------------------------
Portola Packaging, Inc., reported results for its third quarter
of fiscal 2002, ended May 31, 2002. Sales were $53.0 million
compared to $57.6 million for the same quarter of the prior
year, a decrease of 8.0%. For the first nine months of fiscal
year 2002, sales were $155.2 million compared to $159.5 million
for the first nine months of fiscal year 2001, a decrease of
2.7%. Portola had operating income of $5.2 million for the third
quarter of fiscal 2002 as compared to operating income of $4.4
million for the third quarter of fiscal 2001, an increase of
18.2%. For the first nine months of fiscal year 2002, the
Company had operating income of $10.6 million compared to
operating income of $5.5 million for the first nine months of
fiscal year 2001. The Company reported net income of $1.3
million for the third quarter of fiscal 2002 compared to net
income of $1.5 million for the same period of fiscal year 2001,
and net income of $0.2 million for the first nine months of
fiscal year 2002 compared to a net loss of $0.3 million for the
same period in fiscal 2001. During the first nine months of
fiscal 2001, the Company incurred pretax restructuring charges
of $1.9 million and realized a pretax gain of $6.7 million from
the sale of real estate located in San Jose, California.
Gross profit increased $0.6 million to $14.4 million for the
third quarter of fiscal 2002 as compared to $13.8 million for
the same quarter of the prior year. For the first nine months of
fiscal 2002, gross profit was $38.3 million compared to $34.1
million for the first nine months of fiscal 2001. As a
percentage of sales, gross profit increased from 21.4 % for the
first nine months of fiscal 2001 to 24.7% for the same period in
fiscal 2002.
Adjusted EBITDA excludes the effect of restructuring charges,
gains on the sale of real estate, and foreign exchange gains and
losses. Adjusted EBITDA increased 2.0% to $10.3 million in the
third quarter of fiscal 2002 as compared to $10.1 million in the
third quarter of fiscal 2001 and increased 7.7% to $25.2 million
for the first nine months of fiscal 2002 from $23.4 million for
the same period in fiscal 2001. EBITDA, including the effect of
the restructuring charge, the gain on the sale of real estate,
and foreign exchange gains and losses, decreased to $10.3
million in the third quarter of fiscal 2002 as compared to $12.2
million in the second quarter of fiscal 2001 and decreased to
$25.2 million for the first nine months of fiscal 2002 from
$28.0 million for the same period in fiscal 2001.
At of its May 31, 2002 balance sheet, Portola reported having a
total shareholders' equity deficit of about $27.3 million.
Effective September 1, 2001, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 142, "Goodwill and
Other Intangible Assets." SFAS No. 142 established accounting
and reporting standards for acquired goodwill and other
intangible assets. The effect of the adoption was to eliminate
goodwill amortization expense in the third quarter and first
nine months of fiscal 2002 of $0.6 million and $2.0 million,
respectively. The Company recorded a total of $0.7 million and
$2.1 million in goodwill amortization expense in the third
quarter and first nine months of fiscal 2001, respectively.
Portola Packaging is a leading designer, manufacturer and
marketer of tamper evident plastic closures used in dairy, fruit
juice, bottled water, sports drinks, institutional food products
and other non-carbonated beverage products. The Company also
produces a wide variety of plastic bottles for use in the dairy,
water and juice industries, including five-gallon polycarbonate
water bottles. In addition, the Company designs, manufactures
and markets capping equipment for use in high speed bottling,
filling and packaging production lines as well as manufactures
and markets customized five-gallon water capping and filling
systems. The Company is also engaged in the manufacture and sale
of tooling and molds used in the blow molding industry.
PSINET INC: Seeks Approval of Uniform Omnibus Claims Procedures
---------------------------------------------------------------
Approximately 2,000 entities have filed proofs of claim in the
PSINet cases. In addition, certain other entities that have not
filed Proofs of Claim may have allowable claims against the
Debtors. This is in so far as the Debtors' Schedules of Assets
and Liabilities reflect prepetition liabilities owed to these
entities, and these liabilities are not designated as
"contingent," "unliquidated," or "disputed" on the Debtors'
Schedules.
Shortly after the Bar Date, the Debtors commenced the task of
reviewing the Claims against their books and records.
The Debtors believe that establishing Procedures to govern the
Claims objection and reconciliation processes will greatly
expedite and enhance the Claims objections and reconciliation
processes, thereby benefiting the Debtors and their estates.
Accordingly, the Debtors propose the following procedures for
the Court's approval.
The Proposed Procedures
Step One: The Debtors File Omnibus Objections.
a. The Debtors will file omnibus objections to certain Claims
from time to time. Each Objection will identify each Claim
to which the Debtors object, as well as the grounds on which
the Debtors object to each Claim.
b. Each Claimant whose Claim is subject to the Objection will
be served with a copy of (i) a Notice of Hearing to consider
the Objection and (ii) the Objection. The hearing will
be no sooner than 30 days after the date of mailing of the
Objection. The service will be by first class mail to the
address set forth on the respective proof of claim. The
address may have been supplemented by a Claimant in
accordance with Bankruptcy Rule 2002(g). If a Claim has been
transferred, notice will be given only to the entity listed
as being the owner or owners of such Claim on the Claims
Register as of the date the Objection is filed.
c. The assertion of any particular ground for objecting to a
Claim will not preclude the Debtors from asserting
additional grounds for objecting to that Claim, in either
the same Objection, or a subsequent Objection.
Step Two: Claimant Files Response to Objection
a. Each Claimant whose Claim is subject to an Objection will
have 20 days from the date on which the Debtors mail the
Objection, to file and serve the Debtors (with a courtesy
copy delivered to Chambers) with a response to the Objection
together with any evidence or documents that the Claimant
intends to introduce at a Hearing or a mediation on the
Objection.
b. The Debtors propose that the failure by a Claimant to file a
timely Response be deemed consent by the Claimant to the
relief requested in the Objection with respect to its Claim,
and the Debtors shall move the Court for entry of an Order
granting the relief requested in the Objection with respect
to that Claim.
Step Three: The Debtors File Reply or Notice of Adjournment
The Debtors will have the following options with respect to each
Claim for which a timely Response has been filed:
a. The Debtors will have until three days before the Hearing to
file and serve a Reply.
OR
b. The Debtors will have the right to adjourn the Hearing with
respect to the Claim to attempt to resolve the dispute. If
the Debtors determine to adjourn the Hearing, the debtors
will file and serve the Claimant with a Notice of
Adjournment.
Step Four: Adjudication or Negotiation/Mediation
a. Adjudication.
If no Notice of Adjournment is filed with respect to a Claim
which is subject to the Objection, a hearing on the Objection
with respect to the Claim will be held on the date set forth
in the Notice of Hearing or as soon thereafter as counsel may
be heard.
OR
b. Negotiation/Mediation.
If a Notice of Adjournment is filed with respect to a Claim
subject to an Objection, or if the Claimant and the Debtors
otherwise agree to an adjournment, the following means will
be available to resolve disputes:
(i) Negotiation -- The Debtors may seek to communicate with
the Claimant in an attempt to reach agreement for the
compromise and settlement of the Claim. Any such
settlement will be subject to Bankruptcy Court approval
in accordance with the Bankruptcy Rule 9019 or such
procedures as the Court may approve.
(ii) Mediation -- If the Debtors and the Claimant are unable
to negotiate a settlement, the parties may jointly elect
to refer the Claim and the Objection to mediation.
Mediation of the Claim and the Objection will proceed in
accordance with the Court's General Mediation Order dated
January 17, 1995, as amended by the Court's Alternate
Dispute Resolution Order dated October 20, 1999. All
mediated settlements between a Claimant and the Debtors
will be subject to Bankruptcy Court approval in
accordance with Bankruptcy Rule 9019 or such procedures
as may be approved by the Court.
Step Five: The Debtors File Notice of New Hearing
a. In the event that a Claim is not resolved by mediation or
negotiation, or the Court determines that a Claim should not
be referred to mediation, the Debtors will file and serve the
Claimant by first class mail with a Notice of New Hearing.
This notice will be mailed to the address or addresses to
which the Objection was mailed (or such other address as may
have been provided to the Debtors by the holder of such Claim
after the Objection was mailed). The Hearing will be held no
sooner than 14 days from the date of mailing of such notice.
b. If a Notice of New Hearing is filed and served with respect
to an objected-to Claim, the Debtors will have the right to
file and serve a Reply no later than three days prior to the
New Hearing date.
The Debtors believe that it is in the best interest of their
estates, their creditors and all other parties in interest to
establish the Procedures because the Procedures are effective
and economical, and would eliminate the need for Court hearings
on many Claims by allowing the Debtors and a Claimant to seek
mediation to resolve disputes. In sum, the Debtors believe that
the proposed Procedures will minimize the cost of the Claims
objection and reconciliation processes.
Therefore, the Debtors request entry of an order, pursuant to
section 105 and 502(b) of the Bankruptcy Code and Rule 3007 of
the Bankruptcy Rules for implementation of the proposed
Procedures. (PSINet Bankruptcy News, Issue No. 24; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
QUESTRON TECHNOLOGY: Court Sets July 22, 2002 Claims Bar Date
-------------------------------------------------------------
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
IN RE: :
: CHAPTER 11
QUESTRON TECHNOLOGY, INC., :
et al., : CASE NO. 02-10319 (PJW)
Debtors. : Jointly Administered
:
NOTICE OF BAR DATE REQUIRING
FILING OF PROOFS OF CLAIM
TO ALL PERSONS AND ENTITIES WITH CLAIMS AGAINST ANY OF
Questron Technology, Inc., Questron Finance Corp., Questron
Operating Company, Inc., Questron Dsitribution Logistics, Inc.,
Questnet Components, Inc., Power Too, Inc., California
Fasteners, Inc., Fortune Industries, Inc., Fas-Tronics, Inc.,
Action threaded Products, Inc., Action Threaded Products of
Minnesota, Inc., Action Threaded Products of Georgia, Inc.,
Capital Fasteners, Inc., B&G Supply Company, Inc., and RSD Sales
Company, Inc.:
PLEASE TAKE NOTICE that, pursuant to an order of this Court,
dated May 8, 2002, and in accordance with Bankruptcy Rule
2002(C), all persons and entities, including individuals,
partnerships, estates, and trusts (other than governmental
units) who have a claim or potential claim against any of the
above-listed Debtors that arose prior to February 3, 2002, no
matter how remote or contingent such claim may be, MUST FILE A
PROOF OF CLAIM on or before 4:00 p.m. (Prevailing Eastern Time),
on July 22, 2002, by mailing an original proof of claim form to
Questron Technology, Inc. c/o Jay Alix & Associates, 4004
Beltline Road, Suite 210, Addison, TX 75001 (tel: 972-491-1005)
so that it is actually received on or before the Bar Date.
Proofs of claim sent by facsimile or telecopy will not be
accepted. A proof of claim form may be obtained from any
bankruptcy court clerk's office, from any lawyer, from certain
business supply stores, or by calling (972) 491-1005 or
http://cms.jayalix.com
ANY PERSON OR ENTITY (EXCEPT A PERSON OR ENTITY WHO IS
EXCUSED BY THE TERMS OF THE BAR DATE ORDER) WHO FAILS TO FILE A
PROOF OF CLAIM ON OR BEFORE THE BAR DATE SAHLL BE FOREVER
BARRED, ESTOPPED, AND ENJOINED FROM ASSERTING ANY CLAIM (OR
FILING A PROOF OF CLAIM WITH RESPECT TO ANY CLAIM) AGAINST THE
DEBTORS AND THEIR PROPERTY; THE DEBTORS AND THEIR PROPERTY SHALL
BE FOREVER DISCHARGED FROM ANY AND ALL INDEBTEDNESS OR LIABILITY
WITH RESPECT TO ANY SUCH CLAIM; AND SUCH HOLDER SHALL NOT BE
PERMITTED TO VOTE ON ANY PLAN OF REORGANZIATION OR PARTICIPATE
IN ANY DISTRIBUTION IN THESE CHAPTER 11 CASES ON ACCOUNT OF ANY
SUCH CLAIM, OR TO RECEIVE FURTHER NOTICES REGARDING ANY SUCH
CLAIM.
A copy of Bar Date Order may be obtained from the Debtors'
attorneys: Kasowitz, Benson, Torres & Friedman LLP, 1633
Broadway, New York, New York 10019, (212) 506-1700, Attn:
Evelyn Rodriquez, or Richards, Layton & Finger, PA., One Rodney
Square, PO Box 551, Wilmington, Delaware 19899, (302) 651-7700,
Attn: Amanda Kernish, Additional Information concerning the Bar
Date may be obtained by calling 302-651-7700. The Debtors'
schedules can also be viewed on the United States Bankruptcy
Court for the District of Delaware's Web site at
www.deb.uscourts.gov
Dated: Thursday June 13th, 2002
BY ORDER OF THE COURT:
Peter J. Walsh, United States Bankruptcy Judge
RESPONSE ONCOLOGY: Tennessee Court Confirms Liquidating Plan
------------------------------------------------------------
Response Oncology, Inc., (OTC Bulletin Board: ROIXE), and its
affiliated entities announced that the United States Bankruptcy
Court for the Western District of Tennessee, Western Division
confirmed the Second Amended Joint Plan on Friday, June 14,
2002. The Plan was sponsored jointly by ROI and AmSouth Bank, as
agent for itself, Bank of America, N.A. and Union Planters Bank,
N.A.
Under the Plan, originally filed April 12, 2002, and amended
April 19, 2002, and June 14, 2002, the Company's assets will be
liquidated. The Plan provides that administrative claims accrued
during the bankruptcy case will be paid in full in the amounts
allowed by the Court. Unsecured creditors will be paid a
percentage of their claims from a fund of $250,000, to be
allocated pro rata. The Lenders will receive the remaining
proceeds from liquidation, and the Lenders' claims will not be
paid in full. Existing shares in the company are being
cancelled, and there will be no recovery for shareholders. The
Company anticipates it will terminate all operations as of
September 30, 2002, after finalizing its liquidation.
A copy of the Plan as confirmed, which is anticipated to become
effective on June 25, 2002, and a copy of the Order confirming
the Plan, may be found at:
http://www.wallerlaw.com/court_notices/index.html
In addition, ROI filed its Form 10-K for the year ended December
31, 2001 on Thursday, June 13, 2002.
Counsel for ROI in connection with the confirmation hearing were
Jonathan E. Scharff and Steve N. Douglass of the Memphis,
Tennessee law firm of Harris, Shelton, Dunlap, Cobb & Ryder,
PLLC. Counsel for the Lenders in connection with the
confirmation hearing were John C. Tishler, Robert A. Guy, Jr.
and Eric B. Schultenover of the Nashville, Tennessee law firm of
Waller Lansden Dortch & Davis, PLLC.
SAFETY-KLEEN: Sues Schneider National to Recoup $2MM Preference
---------------------------------------------------------------
Safety-Kleen Services, Inc., represented by Jeffrey C. Wisler of
Connolly Bove Lodge & Hutz of Wilmington, brings suit against
Schneider National Bulk Carriers Inc. to avoid and recover
transfers of money and property alleged to be preferential under
the Bankruptcy Code.
The Debtors say money and property was transferred to Schneider
on dates in March and May, 2000, within 90 days of the Petition
Date, in at least amounts totaling $2,429,034. These transfers
were on account of an antecedent debt owed by one or more of the
Debtors to Schneider, and the transferring Debtors were
insolvent at the times of the transfers. As a result of these
transfers, Schneider received more than it would have received
if these cases were liquidating proceedings under chapter 7 of
the Bankruptcy Code, the transfers had not been made, and
Schneider received a distribution from the resulting bankruptcy
estate.
In the alternative, the Debtors say that Services received less
than a reasonably equivalent value in exchange for the
transfers, and was insolvent at the time of the transfers, or
became insolvent as a result of the transfers.
In either event, the Debtors want to recover the transfers and
ask for judgment against Schneider in the amount of $2,429,034
plus pre- and post-judgment interest, and their costs. Further,
the Debtors want Schneider's claims against these estates
disallowed if Schneider refuses to return the transfers.
(Safety-Kleen Bankruptcy News, Issue No. 40; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
SOFTNET SYSTEMS: Nasdaq Sets Appeal Hearing for July 12, 2002
-------------------------------------------------------------
SoftNet Systems, Inc. (Nasdaq:SOFN), announced that its previous
request for a hearing before a Nasdaq Listing Qualifications
Panel to review Nasdaq's Staff Determination for delisting has
been granted. The hearing date has been assigned for July 12,
2002.
As previously announced, the company received a Nasdaq Staff
Determination that stated that the Company's securities are
subject to delisting from The Nasdaq National Market.
Also as previously announced, the Company is continuing to
actively pursue strategic transactions with other companies.
For more information about the Company, please visit
http://www.softnet.com
SUCCESSORIES: Provident Bank Agrees to Amend Credit Agreement
-------------------------------------------------------------
Successories (Nasdaq:SCES) reported a net loss of $963,000 for
its first quarter ended May 4, 2002 as compared to the prior
year's first quarter net loss of $1,562,000 which included a
$219,000 extraordinary loss from the early extinguishment of
debt. This year's loss per common share after preferred
dividends was $0.11.
Revenues declined 9.1% to $10,076,000. Among its distribution
channels, direct marketing experienced the smallest percentage
decrease, 4.5%. Direct marketing's decline in large part can be
attributed to a 47.4% planned reduction in catalogs mailed to
prospects during the first quarter. Sales to franchisees were
down 36.8% reflecting 16 fewer franchise stores operating this
year as compared to last year. Comparable store sales for
Company-owned retail stores dropped 15.2% while overall sales in
this channel declined 7.5%.
Gary J. Rovansek, President and Chief Executive Officer,
commented, "While sales remained challenging in the first
quarter, we have experienced a marked improvement in our direct
marketing prospect mailings, which overall were extremely soft
last year."
Primarily due to lower sales volume, gross profit was $618,000
less than the prior year. Reduced raw material and purchased
product costs substantially offset the impact of increased
promotional discounting resulting in a modest .8% erosion in
gross profit percentage to 52.3%.
Operating expenses declined $909,000 or 12.3% from the prior
year. They also improved as a percentage of revenue to 64.1% in
the current year versus 66.4% for the comparable period last
year. Most notably, the Company reduced advertising expense
$596,000, and salaries and benefits $330,000 representing a
20.4% and 15% improvement respectively when compared to last
year's first quarter.
A 58.1% improved operating performance in its direct marketing
segment and a 6.1% reduction in corporate overhead expense
resulted in a 20.2% improvement in this year's loss from
operations to $1,000,000 compared to the prior year's first
quarter loss from operations of $1,253,000.
Mr. Rovansek added, "In light of our sales performance, we are
encouraged with improvement in the loss from operations which
reflects continued efforts to reduce our cost structure."
The benefits noted in direct marketing's operating performance
and the reduction in corporate overhead expense were largely
offset by a 48.2% increase in the loss incurred in the Company-
owned retail stores segment compared to prior year. In light of
this segment's continuing losses as well as the future financial
obligations associated with its operation and the significant
impediment these present for the sale of the Company, on May 7,
2002, the Company's Board directed management to initiate steps
to close all of its 100% owned retail stores. Management has
begun negotiations to terminate leases of all of these stores
and anticipates closing substantially all stores during this
fiscal year.
On June 13, 2002, the Company and The Provident Bank amended
their credit agreement modifying certain financial covenants
retroactive to the first quarter and applicable through the
balance of the agreement's May 31, 2003 term. The amended credit
agreement also revised advance rates, and overall loan limits
which management anticipates will provide adequate credit
availability to meet all financial obligations while it and its
investment banker, Duff & Phelps pursue the sale of the company.
The Company is in compliance with all current debt covenant
requirements.
Mr. Rovansek continued, "We remain confident of the value of the
enterprise primarily as a direct marketer and manufacturer of
proprietary branded products and will take all necessary steps
to capture this value for our shareholders. The amendment of the
Provident credit agreement coupled with the prospective cost
effective closure of all of our 100% owned Company retail stores
will provide a positive environment for the orderly sale of the
Company."
Successories, Inc. designs, manufactures, and markets a diverse
range of motivational and self-improvement products, many of
which are the Company's own proprietary designs, for business
and for personal motivation. The Company's products are sold via
the millions of catalogs it mails each year and through a
network of over 50 retail franchise and company-owned stores.
Additionally, the Company's products may be purchased online via
its website at www.successories.com.
As previously reported, Successories obtained a waiver of its
Fiscal Year 2001 violations of financial covenants under its
credit agreement.
SYBRON DENTAL: Obtains New $150MM Revolver & $200MM Term Loan
-------------------------------------------------------------
Sybron Dental Specialties, Inc. (NYSE: SYD) entered into a new
credit structure on June 6, 2002, which provides the Company
with greater financial flexibility and longer-term financing.
The structure includes a new credit facility which provides the
Company with a revolving credit facility of up to $150 million
with a five-year commitment period, and a $200 million term loan
at LIBOR plus 250 basis points with a seven-year maturity.
Sybron has also completed the sale of $150 million of senior
subordinated notes at 8.125% due 2012 in a private offering. The
cash proceeds from the term loan and senior subordinated notes
were used to retire the Company's previous credit facility,
which stood at $339.3 million at March 31, 2002.
"Our long history of strong cash flow generation enabled us to
take advantage of the current low interest rate environment to
refinance our credit facility and issue senior subordinated
notes on very favorable terms for the Company," said Gregory D.
Waller, Chief Financial Officer of Sybron Dental Specialties.
"With the new credit facility in place, we have extended the
average maturity of our debt from 4.2 years to 8.2 years,
significantly increased our liquidity, and secured access to
ample funding to continue pursuing attractive acquisition
opportunities, which is a key component of our long-term growth
strategy. While our interest expense will increase slightly as a
result of the refinancing, we feel that the increased financial
flexibility will allow us to make investments organically and
through acquisition that will translate into increased value for
our shareholders."
In conjunction with the refinancing, Sybron will record a charge
of approximately $1.4 million in its fiscal third quarter
related to a pre-payment penalty on the Term Loan B of its
previous credit facility. The Company will also record a non-
cash charge of approximately $4.5 million for the amortization
of the remainder of its deferred financing fees related to its
previous credit facility. The fees and expenses related to the
new credit facility, which are estimated to total approximately
$12.0 million, will be amortized over the length of the
maturities of the term loan and senior subordinated notes.
In addition, approximately $70 million of the Company's current
interest rate swaps could not be re-assigned to the new credit
facility and had to be terminated. An unrealized loss of
approximately $2.5 million (or approximately $4.2 million pre-
tax) related to those interest rate swaps, which was the fair
value at June 6, 2002, had been previously recorded as a
component of Other Comprehensive Income (Loss). As a result of
the termination of these interest rate swaps, Sybron will record
a charge in its fiscal third quarter in the amount of
approximately $2.5 million to recognize the unrealized loss.
The remaining interest rate swaps covering approximately $129.7
million of the Company's debt will be re-designated to the new
credit facility or expire within the current fiscal year. Under
FASB Statement No. 133, Sybron is not allowed to re-designate
these interest rate swaps without expensing the fair value at
the time of the refinancing. An unrealized loss of approximately
$2.5 million (or approximately $4.1 million pre-tax) on the
remaining interest rate swaps, which was the fair value at June
6, 2002, had also been previously recorded as a component of
Other Comprehensive Income (Loss). In order to re-designate the
interest rate swaps, Sybron will take a non-cash charge in its
fiscal third quarter of approximately $2.5 million to recognize
the unrealized loss on these remaining swaps.
Total stockholders' equity already reflected the unrealized loss
associated with the interest rate swaps that have been
terminated as well as those that have been re-designated to the
new credit facility, and thus stockholders' equity will not be
impacted by the reclassification into the income statement.
Separately, Sybron's cross-currency debt swap covering
approximately $45 million of its debt had to be terminated as
well, at a cost of approximately $1.5 million, which represents
the market value at June 6, 2002. The impact of this termination
flows through currency translation adjustment in stockholders'
equity and should have no impact on Sybron's income statement.
Change in Inventory Accounting
Sybron also announced plans to change its accounting methodology
for inventory in the fiscal third quarter from the last in,
first out (LIFO) to the first in, first out (FIFO). "In the
current environment of low inflation, the change to FIFO should
result in a better measurement of operating results," said Mr.
Waller.
As a result of this change, the Company will record a reduction
in stockholders' equity of $6.5 million as of March 31, 2002,
which is primarily related to the amortization of an inventory
write-up to fair market value following the Company's sale by
Forstmann Little in 1987.
Under generally accepted accounting principles, the Company will
restate its historical financial results for the last five years
and interim periods to reflect this change. For fiscal 2001,
this will result in a reduction of $0.05 per fully diluted
share, from $1.06 to $1.01. For the first two quarters of fiscal
2002, this will result in a reduction of $0.03 per fully diluted
share, from $0.56 to $0.53. The Company expects a similar impact
in the second half of fiscal 2002.
European Consolidation
Sybron's plan for expanding its Hawe Neos facility in
Switzerland, a key component of the Company's tax reduction
strategy, is a little behind schedule. This plan includes the
consolidation of the Company's other facilities in Europe once
the Hawe Neos expansion is completed. Sybron anticipates
recording a restructuring charge related to this consolidation,
which should be recorded during the fiscal fourth quarter
depending on the timing of its completion.
The subsidiaries of Sybron Dental Specialties are leading
manufacturers of value-added products for the dental and
orthodontic professions and products for use in infection
prevention. The primary subsidiaries of Sybron Dental are Kerr,
Ormco and Metrex. Kerr Corporation develops, manufactures,
markets and distributes a comprehensive line of consumable
products to the dental industry worldwide. Ormco engineers,
manufactures, markets and distributes an array of consumable
orthodontic and endodontic products worldwide. Metrex Research
Corporation develops, manufactures, markets and distributes
consumable infection prevention products to the dental and
medical markets.
* * *
As previously reported, Standard & Poor's assigned a single-'B'
rating to Sybron Dental Specialties Inc.'s proposed $150 million
10-year senior subordinated notes. Sybron, a leading
manufacturer of professional dental products, plans to use the
proceeds from this offering to repay bank debt and lengthen its
maturity schedule. At the same time, Standard & Poor's assigned
a double-'B'-minus rating to Sybron's $350 million dollar senior
secured credit facility. Total rated debt outstanding for the
company is approximately $360 million.
The speculative-grade ratings on Sybron reflect its position as
a leading manufacturer of professional dental products, offset
by the challenges of effectively operating its expanding
business while shouldering debt associated with its late-2000
spin-off.
TUTOR TIME: Childtime Learning Pitches $22MM Bid for Assets
-----------------------------------------------------------
Childtime Learning Centers, Inc. (Nasdaq: CTIM) submitted a bid
to purchase substantially all of the assets of Tutor Time
Learning Systems, Inc., which filed for bankruptcy protection on
May 11, 2002 in the Southern District of Florida, for an
aggregate purchase price of $22,000,000 plus the assumption of
specified liabilities. Childtime's bid, together with any other
bid that may be submitted, will be subject to a hearing, and
possibly an auction, currently scheduled for June 27, 2002.
There are no assurances that Childtime's bid will be accepted or
that it will not need to be increased to be successful in the
event of an auction. The Tutor Time system consists of over 200
company-operated and franchised child care centers that serve
more than 26,000 children in 24 states and three countries.
UNOVA INC: Fitch Affirms Junk Senior Notes Rating
-------------------------------------------------
Fitch Ratings has affirmed the rating on UNOVA Inc.'s (NYSE:UNA)
senior notes at 'CCC', and changed the Rating Outlook to Stable
from Negative.
The change in the rating outlook reflects UNA's success in
bringing down debt levels through one-time events and
intellectual property settlements, and in reducing costs. UNA's
covenants have been amended to provide more room and its free
cash flows have improved. It also considers the company's
uncertainty in generating cash flows through its core
businesses.
March 2002 LTM free cash flow (EBITDA -- increase in operating
WC -- capex -- cash interest -- cash tax) improved to $116.5
million from $33.3 million at Dec. 31, 2001 and $122.8 million
LTM free cash flow at March 31, 2001. The improvement was mainly
due to reduction in working capital, resulting from the
completion of contracts. UNA's operating environment remains
weak and no immediate recovery is expected. Capital spending in
the automotive and aerospace markets continues to remain
sluggish. Backlog for the IAS segment (57% of total sales at
Dec. 31, 2001 and 52% at March 31, 2002) continued to fall, to
$293 million during the first quarter of 2002 from $334 million
at Dec. 31, 2001. Backlog for FY2000 and FY1999 were $515
million and $856 million, respectively. Management believes that
the problems the ADS segment, comprised of Intermec
Technologies, has experienced in the past several quarters are
behind them and that the segment will start contributing to
overall profitability. UNA has brought down its quarterly sales
break-even-point to $145 million from previous $220 million.
Intermec's first quarter operating loss shrank to $0.7 million
(quarter sales was $140 million) in 2002 from a loss of $5.7
million ($170 million) in 2001, however this improvement also
reflects the elimination of goodwill amortization (goodwill
amortization for the first quarter 2001 was $2.3 million).
While the outlook for UNA's operations remains weak, the company
has strengthened its balance sheet through a series of one-time
events. Such events include a pension reversion (2001) and the
sale of UNA's headquarters property (2002). Intellectual
settlements with Compaq in 2001 and with Dell in 2002 have also
contributed to debt reduction. Total debt fell to $280 million
at March 31, 2002 from $501 million at March 31, 2001. Net debt
at March 31, 2002 was $207 million, down from $465 million at
March 31, 2001 and up slightly from $178 million at Dec. 31,
2001. EBITDA turned positive in 2001. EBITDA margin, EBITDA
interest coverage, and debt/EBITDA were 2.4%, 1.1x and 7.6x,
respectively. These compare to 7.4%, 3.8x and 2.8x in 1999 (2000
EBITDA was negative). Debt-to-cap rose to 41.4% in 2002 due
primarily to reduction in equity related to the goodwill write-
offs (39.5% in 2000 and 37% in 1999). While the debt reduction
through the settlement and asset sale is meaningful, the weak
business outlook is expected to hinder drastic improvements in
UNA's credit profile in the short to medium term.
The company recently amended its bank covenants for 2002. Should
the average availability on the U.S. revolving facility become
less than $50 million and outstanding borrowing on the revolving
facility exceed $10 million, the Free Cash Flow test will be
applied. Current availability as defined under the agreement is
about $100 million. For 2003 and beyond, Fixed Charge Test will
be applied. Any further decline in operations or longer-than-
expected market weakness could result in covenant violations,
which could result in a further review of the rating.
USG CORP: Seeks Approval of Deloitte & Touche's Engagement
----------------------------------------------------------
Michael J. Merchant, Esq., at Richards Layton & Finger, explains
that USG Corporation and its debtor-affiliates want to hire
Deloitte & Touche as independent auditors and as tax, accounting
and compensation consultants, nunc pro tunc to May 10, 2002. He
relates that the Debtors have decided to replace Arthur Andersen
LLP.
Deloitte is a national firm with more than 1,600 partners and
15,000 professional staff. Deloitte is well qualified, and the
Debtors believe they will be able to perform in a "cost-
effective, efficient and timely manner."
The services Deloitte may perform for the Debtors may include:
* auditing and reporting on the consolidated financial
statements of the Debtors and their non-debtor
affiliates for the year ended December 2002, and
thereafter;
* reviewing quarterly financial information to be
included in the Debtors' and non-debtor affiliates'
reports filed with the United States Securities and
and Exchange Commission;
* assisting with other accounting matters;
* assisting with the Debtors' federal, state, local and
foreign tax compliance and their non-debtor
affiliates;
* providing property tax services including real and
personal property tax processing, compliance and
consulting assistance to the Debtors;
* providing foreign sales corporation (FSC) tax
services to the Debtors, including calculation of tax
allocation and the FSC commission;
* providing expatriate tax services, including
preparation of federal, state and foreign tax
returns, exit and entrance orientations; tax
equalization calculations; tax noticing; and other
compliance noticing for expatriated Debtors'
employees;
* providing tax preparation and financial planning to
Debtors' executives;
* providing management and human resources consulting
to the Debtors associated with succession planning,
management development, board of directors matters,
employee communication, executive compensation, sales
compensation, employee pay, employee retention, and
employee benefits;
* providing advisory services to the Debtors in the
areas of information technology control, design and
effectiveness; data quality and integrity; and
business process control, design and effectiveness;
* assisting with the preparation and filing of the
Debtors' registration statements required by the
Securities and Exchange Commission in relation to
debt and equity offerings;
* assisting the Debtors in preparing or amending
various financial reports or submissions to the Court
or the U.S. Trustee and with the implementation or
modification of debtor-in-possession accounting
procedures;
* assisting the Debtors in their claims evaluation and
resolution, including claims analysis, by type and
entity, reconciliation of claims asserted and
maintenance of the claims database;
* providing other consulting services, excluding
financial advisory reorganization services being
provided by Chilmark Partners, LLC, regarding the
Debtors' operating, financial, and other ongoing
business matters;
* providing such other similar services, as requested
by the Debtors and agreed to by Deloitte; and
* attending and participating in administrative or
court appearances consistent with the foregoing
services, when appropriate.
Subject to Court approval, Mr. Merchant continues, Deloitte will
charge a $567,000 base fee for the year ended December 31, 2002
and seek reimbursement of actual and necessary expenses.
Deloitte will charge a base fee of $42,500 for property tax
services rendered during the seven-month period from June 1,
2002 to December 31, 2002 for auditing and reporting financial
statements and reviewing financial information to be filed with
the SEC. The base fee will be adjusted for additional locations,
as necessary. Deloitte's tax consulting work fees, such as for
property tax appeal services, are based on realized tax savings,
of 25 to 50 percent of the realized tax savings per appeal.
Deloitte will charge a $24,500 base fee for FSC services for the
2001 tax year. A $6,060 base fee for recurring management and
human resources services. Compensation for services beyond the
base fees will be subject to Deloitte's hourly billing rates:
Level Rate Range
----- ----------
Partner/Director $350 - $600
Senior Manager $275 - $450
Manager $200 - $375
Senior $150 - $270
Staff $100 - $225
Paraprofessional $ 75 - $125
To the best of the Debtors' and Deloitte's knowledge, after
reasonable inquiry, Deloitte has no connection with the Debtors,
their significant creditors, the U.S. Trustee or any other
significant party-in-interest in these Chapter 11 cases.
Given Deloitte's size, as a nationwide firm with tens of
thousands of employees, Deloitte cannot be certain that every
client relationship or other connection has been disclosed, but
will file a supplemental disclosure if it discovers additional
information it determines requires action. The Debtors believe
Deloitte to be a "disinterested person as defined in Section
101(14) of the Bankruptcy Code. (USG Bankruptcy News, Issue No.
26; Bankruptcy Creditors' Service, Inc., 609/392-0900)
VERSATEL TELECOM: Files for Chapter 11 Reorganization in NY
-----------------------------------------------------------
Versatel Telecom International N.V. announced that in order
to accelerate its financial restructuring it has voluntarily,
and with the full support of a majority of its bondholders,
commenced a suspension of payments proceeding in The Netherlands
in respect of the holding company, Versatel Telecom
International N.V. The company has also commenced a
corresponding Chapter 11 proceeding in the United States. These
proceedings do not involve Versatel's operating subsidiaries,
employees, suppliers and operating assets, thereby ensuring
normal service continuity for Versatel's customers.
Versatel filed its Chapter 11 petition in the United States
Bankruptcy Court for the Southern District of New York in
Manhattan. As of filing, the company listed over $2 billion in
assets, and liabilities of about $1.6 billion.
The decision to implement the financial restructuring through
these proceedings is fully supported by bondholders, including
the bondholder committee, who collectively own over 65 percent
of initial principal amount of Versatel's outstanding high yield
and convertible notes. This support represents a substantial
increase over the 33 percent that was announced in March 2002.
This additional support is the result of a proactive bondholder
initiative and indicates strong support for the restructuring
amongst Versatel's bondholders.
Versatel also has obtained a commitment for a Eur 150 million
credit facility that, subject to certain customary conditions,
will be available to the company upon successful completion of
its financial restructuring. Versatel believes that the
availability of this credit facility will fully fund its
business plan, as well as add financial and operating
flexibility for the future.
In addition, Versatel announced that it will generate positive
adjusted EBITDA in the second quarter of 2002, two quarters
ahead of its prior guidance and that it expects full year
adjusted EBITDA to exceed its prior guidance that it would be
between breakeven and Eur 5 million.
Akkoord and Chapter 11 Proceedings
The principal purpose of the financial restructuring is to
eliminate all of Versatel Telecom International N.V.'s
outstanding debt and associated interest expense. In order to
accelerate the financial restructuring, Versatel and a majority
of its bondholders have chosen to complete the restructuring by
means of a voluntary pre-arranged composition, known as an
Akkoord, in a suspension of payments proceeding in The
Netherlands, and a Chapter 11 proceeding in the United States
in respect of the holding company, Versatel Telecom
International N.V. These proceedings will have no material
impact on any of Versatel's operating subsidiaries, customers,
employees or trade creditors. As a first step in this process,
Versatel Telecom International N.V. filed with the Dutch court
and will be filing with the US court for suspension of payments
and protection from its creditors, which consist almost entirely
of holders of its Bonds. In taking this decision, Versatel is
supported by a large majority of its bondholders and is
convinced that it is in the best interest of all its
stakeholders to restructure its debt as quickly as possible and
avoid further delays in starting the formal process. In
connection with the commencement of these proceedings, Versatel
will be withdrawing its registered exchange offer. No changes in
network availability or customer services Both Dutch and US
restructuring legislation permit companies to restructure their
debts without jeopardizing their operations by reaching
agreement with the requisite majority of their creditors. The
Dutch and US court proceedings involve only Versatel Telecom
International N.V., the holding company for the group. The court
proceedings do not involve any of the operating subsidiaries
that hold substantially all of the fixed assets and contracts
relating to the group's employees, suppliers and customers. As a
result, these court proceedings will not impact any service or
obligation to customers, suppliers, employees or other existing
creditors, each of whom have relationships with Versatel's
operating subsidiaries and not with the holding company. In
addition, Versatel would like to emphasize that during and after
the restructuring there will be no changes in the availability
or quality of its network.
Full Support of Bondholders
Versatel continues to receive strong support from the Committee
and other bondholders who have also agreed to support this
restructuring. As a result, bondholders owning over 65 percent
of Versatel's Bonds have agreed to fully support the financial
restructuring. During the court proceedings, Versatel will seek
votes from all bondholders in favor of the restructuring. Given
the current level of bondholder support, the company does not
foresee difficulties in obtaining sufficient votes. The
restructuring provides that all bondholders will receive cash
and shares in the company (equivalent to 80 percent of the
company's post restructuring share capital) in exchange for the
cancellation of all of the Bonds. In addition, the restructuring
provides that Versatel's existing shareholders will retain a 20
percent interest in the company and receive warrants, at no cost
to them, exercisable during the two-year period following the
restructuring, to purchase an additional 4 percent of the
company's shares at a price of Eur 1.50 per share. Versatel's
current shareholders gave their approval for the issuance of the
new shares and the new warrants at the last Annual General
Shareholders Meeting, which was held on May 2, 2002.
Eur 150 Million Credit Facility
Upon completion of the restructuring, Versatel will emerge as a
debt-free company in a substantially stronger financial and
operating position. The extraordinary gain from the early
retirement of the Bonds will create a substantially positive net
equity position for the company, which will alleviate the
strafbankje, or "penalty bench", position of Versatel's shares
on Euronext. In addition, subject to customary conditions and
the successful completion of the restructuring, GE Capital has
agreed to provide Versatel with a Eur 150 million credit
facility. After successful completion of the restructuring,
Versatel's cash balance, excluding the credit facility, will
provide it with sufficient funding until at least the beginning
of the second quarter of 2003. An initial amount of Eur 50
million under the credit facility is available immediately
following the completion of the restructuring, with the
remaining Eur 100 million subject to financial performance.
Given its previously announced funding gap of less than Eur 50
million, Versatel believes that the credit facility will fully
fund the company's business plan and operations.
EBITDA Positive
Versatel is pleased to announce that in the second quarter of
2002 it will generate positive adjusted EBITDA (earnings before
interest, tax, depreciation and amortization) for the first time
in the company's history and two quarters ahead of prior
guidance and that it expects full year adjusted EBITDA to exceed
its prior guidance that it would be between breakeven and Eur 5
million. Profitability and cash flow generation continue to be
the main focus of management and this is a major step towards
generating positive free cash flow. The improvement in EBITDA is
driven mainly by Versatel's ability to leverage its dense local
asset base, its focus on customer profitability and targeted
sales growth and the cost savings achieved from its
organizational restructuring in 2001.
Timing
Versatel anticipates that the Akkoord proceeding in the Dutch
Courts and the Chapter 11 proceeding in the US courts will be
completed by the end of September 2002.
DebtTraders reports that Versatel Telecom's 13.25% bonds due
2008 (VERT08NLR1) are quoted at a price of 23.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=VERT08NLR1
for real-time bond pricing.
VERSATEL TELECOM: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Versatel Telecom International N.V.
aka Versatel
aka Versatel Telecom B.V.
Hullenbergweg 101
1101 CL Amsterdam Zuid -Oost
The Netherlands
Bankruptcy Case No.: 02-13003
Type of Business: The Debtor provides broadband Internet and
telecommunications services including voice
and data services, dedicated Internet access
services, customized telecommunication
solutions and Internet-enabled applications
in The Netherlands, Belgium and northwest
Germany.
Chapter 11 Petition Date: June 19, 2002
Court: Southern District of New York (Manhattan)
Debtors' Counsel: Douglas P. Bartner, Esq.
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022-6069
(212) 848-8190
Fax : (212) 848-4387
Total Assets: $2,017,758,399
Total Debts: $1,605,897,821
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
The Bank of New York, as trustee for holders $215,000,000
of $225,000,000 13-1/4% Senior Notes due 2008 face value
Richard T. Haberstroh outstanding
15 Broad Street
New York, NY 10286 $1,191,807 of
+1 212 235 2429 (dir) accrued
+1 212 235 2532 (fax) interest as
May 31, 2002
The Bank of New York, as trustee for holders $150,000,000
of $150,000,000 13-1/4% Senior Notes due 2008 face value
Richard T. Haberstroh outstanding
15 Broad Street
New York, NY 10286 $830,851 of
+1 212 235 2429 (dir) accrued
+1 212 235 2532 (fax) interest as
of May 31, 2002
The Bank of New York, as trustee for holders $177,000,000
of $180,000,000 11 7/8% Senior Notes due 2009 face value
Richard T. Haberstroh outstanding
15 Broad Street
New York, NY 10286 $8,028,486 of
+1 212 235 2429 (dir) accrued
+1 212 235 2532 (fax) interest as
of May 31, 2002
The Bank of New York, as trustee for holders $105,530,700
of ?120,000,000 11 7/8% Senior Notes due 2009 face value
Richard T. Haberstroh outstanding
15 Broad Street
New York, NY 10286 $4,782,281 of
+1 212 235 2429 (dir) accrued
+1 212 235 2532 (fax) interest as of
May 31, 2002
The Bank of New York, as trustee for holders $280,170,000
of ?300,000,000 11-1/4% Senior Notes due 2010 face value
One Canada Square outstanding
London E14 5AL
United Kingdom $5,410,766 of
Emma Wilkes accrued
+44 20 7964 7662 (dir) interest as
+44 20 7964 6399 (fax) of May 31, 2002
ING Bank, as trustee for holders of $313,536,277
?300,000,000 4% Senior Convertible face value
Notes due 2004 outstanding
Rene H. Ruiten
P.O. Box 1800 $5,332,569 of
1000 BV Amsterdam accrued
The Netherlands interest as
loc code HI 01.03 of May 31, 2002
+31 20 652 2620 (dir)
+31 20 652 2650 (fax)
ING Bank, as trustee for holders of $370,807,157
?360,000,000 4% Senior Convertible face value
Notes due 2005 outstanding
P.O. Box 1800
1000 BV Amsterdam $2,316,065 of
The Netherlands accrued
Rene H. Ruiten interest as
+31 20 652 2620 (dir) of May 31, 2002
+31 20 652 2650 (fax)
Dutch Tax Authorities (Belastingdienst / $13,836,516
Grote ondernemingen) (EUR14,648,016)
P.O. Box 58988, 1040 EK Amsterdam,
The Netherlands
+ 31 20 6877000
Fortis Bank NV, Warandeberg 3, $1,873,316
1000 Brussels, Belgium (EUR1,983,184)
Stichting Buisleidingenstraat, $1,430,104
J. Foesenek (EUR1,513,979)
Wilhelminastraat 12, 4701GX
Roosendaal, The Netherlands
+31 165-542916
Cap Gemini Telecom $370,579
76, avenue Kleber (EUR392,313)
75784, Paris cedex 16
France
+ 33 147 54 5200
Belgacom S.A. $118,075
(EUR125,000)
STIC $36,443
(EUR38,580)
Hotel Concert Inn $22,948
(EUR24,294)
Dienst Infrastructuur Verkeer $15,813
(EUR16,740)
Jacmel Ltd $4,685
(EUR4,960)
BIA Bureau Info. Mngt Amsterdam $2,820
(EUR2,986)
CGL Services Ltd $2,235
(EUR2,366)
BULO $2,362-$3,589
(EUR2,500 - EUR3,800)
The Depositary Trust Company $885
(EUR937)
XO COMMS: Fitch Cuts Senior Secured Debt Rating to C From CC
------------------------------------------------------------
Fitch Ratings has downgraded XO Communications' $1 billion
senior secured credit facility to 'C' from 'CC'. The Rating
Watch Evolving status has been removed and the senior secured
rating has been placed on Rating Outlook Negative. The senior
unsecured rating and the convertible subordinated note rating
remain at 'D'.
The rating downgrade reflects the increased risk of default on
the senior secured credit facility. On June 17, 2002, XO filed
for Chapter 11 bankruptcy protection, as the company failed to
reach a restructuring agreement with potential investors.
Concurrent with the bankruptcy filing, XO filed a plan of
reorganization that offers two different restructuring
scenarios, one which would incorporate the plan previously
announced by Forstmann Little and Telefonos de Mexico, and a
stand-alone plan, which proposes the conversion of the $1
billion in loans under the credit facility into common equity
and $500 pay-in-kind junior secured debt. Forstmann Little and
Telefonos de Mexico had proposed investing $400 million each
into the company for an 80% stake. Bondholders rejected the plan
and were in favor of a plan by Carl Ichan, who proposed putting
up $550 million for a 55% stake. XO is currently attempting to
legally enforce the Forstmann deal, but Forstmann claims it can
legally exit the deal based on a decline in the value of XO.
Should the company be unsuccessful in its attempts to enforce
the deal, it will be forced to pursue the stand-alone plan.
The Negative Outlook reflects the probability of a conversion of
the bank debt to equity, which would result in default.
* DebtTraders' Real-Time Bond Pricing
-------------------------------------
Issuer Coupon Maturity Bid - Ask Weekly change
------ ------ -------- --------- -------------
Crown Cork & Seal 7.125% due 2002 97.5 - 99.5 +0.5
Federal-Mogul 7.5% due 2004 20.5 - 22.5 -1.5
Finova Group 7.5% due 2009 34.5 - 35.5 0
Freeport-McMoran 7.5% due 2006 90 - 92 +1
Global Crossing Hldgs 9.5% due 2009 1.5 - 2.5 0
Globalstar 11.375% due 2004 5 - 7 -1
Lucent Technologies 6.45% due 2029 58 - 60 -3.5
Polaroid Corporation 6.75% due 2002 1 - 2 -1
Terra Industries 10.5% due 2005 85 - 88 0
Westpoint Stevens 7.875% due 2005 63 - 65 0
Xerox Corporation 8.0% due 2027 49 - 51 +1
Bond pricing, appearing in each Thursday's edition of the TCR,
is provided by DebtTraders in New York. DebtTraders is a
specialist in global high yield securities, providing clients
unparalleled services in the identification, assessment, and
sourcing of attractive high yield debt investments. For more
information on institutional services, contact Scott Johnson at
1-212-247-5300. To view our research and find out about private
client accounts, contact Peter Fitzpatrick at 1-212-247-3800.
Real-time pricing available at http://www.debttraders.com
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices
are obtained by TCR editors from a variety of outside sources
during the prior week we think are reliable. Those sources may
not, however, be complete or accurate. The Monday Bond Pricing
table is compiled on the Friday prior to publication. Prices
reported are not intended to reflect actual trades. Prices for
actual trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy
or sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.
Bond pricing, appearing in each Thursday's edition of the TCR,
is provided by DebtTraders in New York. DebtTraders is a
specialist in global high yield securities, providing clients
unparalleled services in the identification, assessment, and
sourcing of attractive high yield debt investments. For more
information on institutional services, contact Scott Johnson at
1-212-247-5300. To view our research and find out about private
client accounts, contact Peter Fitzpatrick at 1-212-247-3800.
Real-time pricing available at http://www.debttraders.com/
Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard
Group, Inc., Washington, DC USA. Yvonne L. Metzler, Bernadette
C. de Roda, Donnabel C. Salcedo, Ronald P. Villavelez and Peter
A. Chapman, Editors.
Copyright 2002. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***