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/raid1/www/Hosts/bankrupt/TCR_Public/020624.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, June 24, 2002, Vol. 6, No. 123 Headlines ANC RENTAL: Court Okays Piper Marbury as Special Counsel ADELPHIA COMMS: Misses Interest and Preferred Dividend Payments AMES DEPARTMENT: Taps Nassi Group as GOB Sale Agent for 6 Stores AVIATION SALES: Engages KPMG to Replace Andersen as Auditors BANYAN STRATEGIC: Inks Amendments to Northlake Sale Contract BANYAN STRATEGIC: Appeals to Nasdaq Not to Delist Shares BRIDGE: Dow Jones Seeks Allowance of Administrative Expense BUDGET GROUP: Eyes Chapter 11 to Complete Cendant Transaction CTF TECHNOLOGIES: Creditors Agree to Debt-to-Equity Conversion CANNON EXPRESS: Former Auditors Express Going Concern Doubt CARAUSTAR: Lowers Expected Q2 Earnings as Fiber Prices Increase CELL TECH: Working Capital Deficit Hovers at $6MM at March 31 CONSOLIDATED CONTAINER: Exceeds 5-Month EBITDA Covenant Target COVANTA ENERGY: Wants to Assume 5 Intercompany Agreements ENRON CORP: Unit Wants Prompt Debt Payments by NV Power et al ENRON CORP: Wants to Sell Garden State Assets by Public Auction EXIDE TECH: Turns to Blackstone Group for Financial Advice FLEMING: S&P Affirms BB Rating Following Core-Mark Acquisition FORMICA: Panel Gets Nod to Hire Jefferies as Financial Advisor GENEVA STEEL: Lenders Agree to Continued Cash Collateral Use GOLDMAN INDUSTRIAL: Bringing-In Freshfields as Foreign Counsel IT GROUP: Examiner Hires Pachulski Stang as Bankruptcy Counsel IMMUNE RESPONSE: Appoints Michael L. Jeub as Chief Fin'l Officer INFORMATION MGT.: Amends Sale Pact to Extend Payment Schedule ISPAT INT'L: Lenders Agree to Terms of Bank Debt Restructuring KAISER ALUMINUM: Wants to Sign-Up Mercer as Employee Consultant L-3 COMMS: S&P Likely to Up Rating to BB+ After Stock Offering LEGACY HOTELS: Acquires Sheraton Suites Calgary for $65 Million LEVEL 8 SYSTEMS: Paul Rampel Resigns as Pres. But Stays on Board LEVI STRAUSS: May 26 Balance Sheet Upside-Down by $972 Million MALAN REALTY: Annual Shareholders' Meeting Set for August 28 MARCONI PLC: Expects Nasdaq to Delist Shares in Coming Weeks METALS USA: Signs-Up S.B. Millner to Market Miscellaneous Assets METALS USA: Committee Agrees to Terms of Plan of Reorganization METROCALL INC: Brings-In Alston & Bird as FCC Regulatory Counsel MICROFORUM INC: Settles Claims Disputes with Deere and Dominion NAVISTAR: Canadian Operation Will Resume Using Temporary Workers NEW CENTURY EQUITY: Commences Trading on Nasdaq SmallCap Market NEWCOR INC: Delaware Court Sets July 9 General Claims Bar Date PAPER WAREHOUSE: Defaults on Convertible Subordinated Debentures PLANVISTA: DePrince, Race & Zolla Discloses 35.5% Equity Stake PLANVISTA: Prepared Registration Statement for 1.3+MM Shares PROVELL: Seeks Court Approval of $21 Million Credit Facility PSINET: Court Grants Goldin's Motion to Extend Claims Bar Date QUALITECH STEEL: Inks Pact to Sell All Assets to Nucor for $37MM REPUBLIC TECH: Court Okays Cartersville Plant Sale to Ameristeel RICA FOODS: Antonio Ecevarria Discloses 17% Equity Stake ROHN INDUSTRIES: Fails to Maintain Nasdaq Listing Standards ROWE COMPANIES: Completes Debt Workout & Cuts Down Debt by $14MM SAFETY-KLEEN: Pursuing $2.6MM Preference from MP Environmental SEPP'S GOURMET: Starts Initiatives to Maximize Shareholder Value SOLECTRON CORP: Third-Quarter Net Loss Jumps to $284 Million SOLUTIA: Fitch Lowers Low-B Level Secured & Unsecured Ratings SPORTS CLUB: Elects George J. Vasilakos as New Board Member SUNTERRA CORP: Maryland Court Confirms Plan of Reorganization TIG INSURANCE: Fitch Assigns BB Rating to Parent's Senior Debt TAUBMAN CENTERS: S&P Ratchets Credit Rating Down to Low-B's USG CORP: Asks Court to OK Investment Guidelines Modifications VERADO HOLDINGS: Trustee Wants to Fix August 8 Admin. Bar Date WHEELING-PITTSBURGH: Seeks 7th Extension of Exclusivity Periods WHITE ROSE: Files Bankruptcy Assignment Under BIA in Canada YOUBET.COM: Names Ex-Ill. Gov. Jim Edgar to Board of Directors * BOND PRICING: For the week of June 24 - June 28, 2002 ********* ANC RENTAL: Court Okays Piper Marbury as Special Counsel -------------------------------------------------------- ANC Rental Corporation, and its debtor-affiliates obtained court approval to employ and retain the firm Piper Marbury Rudnick & Wolfe LLP as their special intellectual property and franchise law counsel. ANC sought to retain Piper Marbury because: A. Piper Marbury has extensive experience and knowledge in the fields of intellectual property and franchise law; B. the Debtors believe that Piper Marbury is well qualified to represent the Debtors with regard to the Debtors' intellectual property and franchise law issues; C. Piper Marbury has provided legal advice to the Debtors and certain non-debtor affiliates with respect to domestic and international trademark and franchise issues since December, 2000; and D. during the course of their representation of the Debtors, Piper Marbury's intellectual property and franchise attorneys have developed familiarity with the Debtors' assets, affairs and businesses. In addition, by reason of its current relationship and ongoing representation of the Debtors, Piper Marbury has acquired invaluable knowledge of the Debtors' affairs, which will be difficult and expensive for another firm to acquire. Ann K. Ford, Esq., a Partner at Piper Marbury Rudnick & Wolfe LLP, relates that prior to the Filing Date, the Firm retained local counsel in various locations throughout the world on behalf of the Debtors to assist in the intellectual property matters. Retention of Local Counsel is necessary and appropriate, as Local Counsel have extensive experience and knowledge in the field of intellectual property in their respective countries. In addition, Local Counsels are able to effectively monitor and timely respond to matters that arise in connection with the Debtors' intellectual property rights. Ms. Ford explains that Piper Marbury acts as general outside counsel for the Debtors with respect to international intellectual property matters. In connection with intellectual property matters, Piper Marbury has engaged approximately 194 separate law firms in 135 countries as Local Counsel on behalf of the Debtors. In addition, Piper Marbury has been asked by the Debtors to retain Local Counsel in connection with certain international franchise matters. Ms. Ford believes that the fee arrangements and terms of engagement with Local Counsel are reasonable, ordinary and customary because Local Counsel send invoices to Piper Marbury on a periodic basis for services rendered and expenses incurred. Prior to the Filing Date, Piper Marbury paid the invoices of Local Counsel and billed the Debtors for the disbursements to Local Counsel, which were reflected as disbursements on the invoices that Piper Marbury sent to the Debtors. The Debtors seek authorization to establish and maintain a retainer with Piper Marbury in an amount of $25,000, to be replenished on an as needed basis, to pay the fees and expenses of Local Counsel. Ms. Ford assures the Court that Piper Marbury will forward copies of all invoices from Local Counsel to the Debtors for review before paying any of the invoices received from Local Counsel out of the Retainer. The Debtors believe that the foreign firms acting as Local Counsel are ordinary course professionals and that the Court does not need to approve the fees and expenses of Local Counsel. Ms. Ford tells the Court that Piper Marbury, if retained, will continue to engage Local Counsel and to pay fees and expenses of Local Counsel from the Retainer without further order of the Court, and each foreign firm that act as Local Counsel will file promptly an affidavit of disinterestedness with the Court. Piper Marbury, if retained, will be authorized and permitted to pay the fees and expenses of Local Counsel from the Retainer, after invoices from Local Counsel have been forwarded to the Debtors for review. For purposes of accounting to the Debtors and the Court for disbursements made to Local Counsel, Ms. Ford explains that Piper Marbury's fee applications shall contain a separate category of disbursements identifying payments made to Local Counsel from the Retainer. However, the actual disbursements made to Local Counsel will not be subject to approval of the Court. In addition, Piper Marbury will consult with the Debtors' management in connection with any potential transaction involving the Debtors and the operating, financial and other business matters relating to the ongoing activities of the Debtors. Ms. Ford states that Piper Marbury will also, to the extent requested, attend and participate in creditors' committee meetings, and make appearances before this Court. Ms. Ford informed the Court that Piper Marbury will charge the Debtors for its legal services on an hourly basis in accordance with its ordinary and customary rates, and shall keep detailed time records of time in increments of tenths of an hour. In addition to the hourly rates set forth above, Piper Marbury customarily charges its clients for all disbursements incurred in connection with this engagement. The current hourly rates that Piper Marbury presently charges for the legal services of its professionals are: Professional/Paraprofessional Rate per Hour Intellectual Property Ann K. Ford $325.00 Mark H. Tidman $325.00 Lisa R. Trovato $250.00 Emily C. Sexton $200.00 Thomas E. Zutic $175.00 Eliza P. Nagle $175.00 Jeremy C. Glasser $140.00 Franchising Ann Hurwitz $300.00 Michael Santa Maria $300.00 Todd Bowers $230.00 Will Woods $180.00 Camille Tabor $110.00 (ANC Rental Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900) ADELPHIA COMMS: Misses Interest and Preferred Dividend Payments --------------------------------------------------------------- Adelphia Communications Corporation (OTC: ADELA) announced that on June 17 it missed the deadline for interest payments under the 30-day grace period that had been granted on May 15 for a $23,437,500 interest payment on its 9-3/8% Senior Notes due November 15, 2009 and a $6,468,750 dividend payment on its 7- 1/2% Series E Mandatory Convertible Preference Stock. In addition, on the same date Adelphia subsidiaries Olympus Communications, L.P. and Olympus Capital Corporation missed a $10,625,000 interest payment on their 10-5/8% Senior Notes due November 15, 2006 and that another subsidiary, Arahova Communications, Inc., missed a $4,187,500 interest payment on its 8-3/8% Senior Notes due November 15, 2017. The Company had previously disclosed that it had missed the May 15 deadline for each of these payments. CORRECTION: Adelphia also announced that that on June 17 it missed a $51,250,000 interest payment on its 10-1/4% Senior Notes due June 15, 2011. The due date for these notes was incorrect on the press release issued by Adelphia on June 17, 2002. Adelphia Communications Corporation, with headquarters in Coudersport, Pennsylvania, is the sixth-largest cable television company in the country. DebtTraders reports that Adelphia Communications' 9.375% bonds due 2009 (ADEL09USR2) are trading between 73 and 75. See http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL09USR2 for real-time bond pricing. The New York Times and other news sources report that Adelphia Communications is expected to file for chapter 11 protection today after the details of an up to $1.5 billion DIP Financing facility are fully documented. AMES DEPARTMENT: Taps Nassi Group as GOB Sale Agent for 6 Stores ---------------------------------------------------------------- Finding that six of their stores no longer fit into their continuing business plans, Ames Department Stores, Inc. and its debtor-affiliates sought and obtained Court approval to conduct "going out of business" or "store closing" sales, beginning June 7,2002 to August 11,2002, at these six stores. The Debtors intend to sell certain of their stores' assets free and clear of liens, claims, encumbrances, and other interests. In conjunction with the proposed going out of business (GOB) Sales, the Debtors also got permission to enter into an Agency Agreement with The Nassi Group, LLC. The result of arm's-length negotiations, the Agency Agreement provides that Nassi shall act as the Debtors' exclusive agent for the limited purpose of conducting the sale of the Debtors' merchandise in the six stores, by means of a promotional, going out of business, or similar sale, and the sale of certain fixtures owned by the Debtors to the extent directed by the Debtors. Martin J. Bienenstock, Esq., at Weil Gotshal & Manges LLP in New York, New York, finds that the GOB Sales are preferable to moving the stores' merchandise to the Debtors' other stores because of the inordinate expenses involved. Given those expenses, it would be inefficient and uneconomical to redistribute merchandise to stores which will continue to operate. Conducting the GOB Sales, meanwhile, will enable the Debtors to maximize the value of the merchandise for the benefit of the Debtors' estates and creditors. Mr. Bienenstock further relates that the Debtors determined that maximization of their inventory values through the GOB Sales requires the oversight, assistance, and expertise of a knowledgeable liquidating agent, thereby ensuring the most feasible, economical, and efficient means of achieving the disposition of the merchandise in the stores. The Debtors have selected Nassi as the entity best situated to assist the Debtors in conducting the GOB Sales. "The Debtors were satisfied with the manner in which Nassi conducted the prior store closing sales and are confident that Nassi will provide the best value and service in conducting the GOB Sales. In addition, several members of the Debtors' board of directors have done business with Nassi in connection with inventory sales at other retailers and are familiar with Nassi's abilities and resources," Mr. Bienenstock explains. The salient provisions of the Agency Agreement are: A. Nassi's Responsibilities: Nassi will plan the advertising, marketing, and sales promotion for the GOB Sales, arrange the stock in the stores for liquidation, determine and effect price reductions so as to sell the Merchandise in the time allotted for the GOB Sales, arrange for and supervise all personnel and Merchandise preparation, and conduct the GOB Sales in a manner reasonably designed to minimize the expenses of the GOB Sales to the Debtors; B. Employee Involvement and Incentive Program: Nassi will use the Debtors' Store personnel, including Store management, to the extent it believes the same to be feasible. Nassi will select and schedule the number and type of employees required for the GOB Sales. Nassi will notify the Debtors as to which of the Debtors' employees are no longer required for the GOB Sales, at which point the Debtors must provide these employees with alternative employment or dismiss these employees in accordance with their applicable termination procedures. As an incentive to ensure employee loyalty and hard work, Nassi will utilize a performance-based bonus plan for the stores' managers, their assistants, and key personnel that will emphasize the maximization of liquidation proceeds; C. Completion Date: All GOB Sales are to be completed on or before August 11, 2002, with the stores to be left in broom clean condition on or before August 14, 2002; D. Compensation: Nassi will receive a set fee of $120,000 ($20,000 per Store). In addition, if the gross proceeds from the GOB Sales divided by the retail value of the stores' inventory exceeds 60%, Nassi will be entitled to an incentive fee equal to: a. 30% of the Gross Return in excess of 60% but less than or equal to 61%; b. 40% of the Gross Return that is greater than 61% but less than or equal to 62%; and, c. 20% of any Gross Return greater than 62%. In no event shall the total fee payable to Nassi exceed $225,000; E. Expenses: Among other expenses, the Debtors will be responsible for the payment of payroll and retention bonuses for Store employees; payroll taxes and certain benefits; Nassi's costs for supervisors' fees, reasonable travel costs, and bonuses at rates agreed to among Nassi and the Debtors; advertising and promotional costs, including signage; risk management; utilities; and occupancy costs, including rent and real estate taxes. Nassi will guarantee that the expenses will not exceed a fixed dollar amount, based on a fixed retail valuation of the Merchandise; F. Additional Merchandise: In the event Nassi and the Debtors determine that the GOB Sales would benefit by additional merchandise being supplied to the stores, Nassi must use all reasonable efforts to procure additional merchandise for the stores. The Debtors will be entitled to 5% of the gross proceeds realized upon the sale of the additional merchandise, and Nassi will be entitled to the remainder; G. Leased Departments: The lessee of leased shoe departments within the stores may participate in the GOB Sales at the option of the operator of these departments so long as they follow the rules, procedures, and discounts recommended and implemented by Nassi. Applicable lease income for the leased shoe department accrued during the GOB Sale will be included in gross proceeds. Lease income is defined as the net proceeds received or retained by the Debtors during the GOB Sale as determined in accordance with the respective license agreement or other agreement between the Debtors and the respective lessee; and, H. Indemnification: Nassi and the Debtors agree to indemnify, defend, and hold each other free and harmless from and against any and all demands, claims, actions or causes of action, assessments, losses, damages, liabilities, obligations, costs, and expenses of any kind whatsoever, including, without limitation, attorneys' fees and costs, asserted against, resulting from, or imposed upon, or incurred by either party hereto by reason of, or resulting from, a material breach of any term or condition contained in the Agency Agreement or any willful or intentional act of the other party. Furthermore, the Court has waived compliance with any state and local laws, statutes, rules, and ordinances restricting store closing or similar sales, and renders unenforceable any restrictions in the leases governing the premises of the stores regarding store closing or similar sales. Mr. Bienenstock says that, in view of the Debtors' recently completed selection process and the similarity of the Agency Agreement to the Debtors' prior agreements with Nassi, the Debtors determined that a fourth selection process was neither necessary nor desirable. The administration of the GOB Sales by Nassi will result in the maximum return to creditors. Additionally, Daniel Kane, a managing member of Nassi, assures the Court that, since conducting the GOB Sales for the Debtors' 16 and 54 stores before, Nassi has remained a "disinterested person" and has no adverse interests to the Debtors' estates. Nasi does not have any connection with the Debtors, their creditors, or any other party in interest or their respective attorneys or accountants or the United States Trustee or any employee of the office of the United States Trustee, except that: a. Nassi may have professional relationships, or be a party to financial transactions, with Paul Buxbaum and Alan Cohen, two individuals that, on information and belief, are members of the board of directors of Ames Department Stores, Inc. in matters unrelated to this case; and, b. Nassi may have prepared appraisals regarding inventory for one or more of the Debtors' lenders on transactions unrelated to this case. The stores subject to the GOB Sales are: Store # Address --------- ----------------------------------- 239 Back River Neck Rd Essex, MD 747 Route 66 East Neptune, NJ 773 Milltown Road North Brunswick, NJ 65 Teall Ave Syracuse, NY 1158 Wheeling Ave Cambridge, OH 1098 Oxford Dr South Hills PA (AMES Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 609/392-0900) DebtTraders reports that Ames Department Stores' 10% bonds due 2006 (AMES06USR1) are trading between 1 and 3. For more real- time bond pricing, see http://www.debttraders.com/price.cfm?dt_sec_ticker=AMES06USR1 AVIATION SALES: Engages KPMG to Replace Andersen as Auditors ------------------------------------------------------------ TIMCO Aviation Services, Inc. has elected, effective June 6, 2002, to engage KPMG LLP as its independent auditors to audit the Company's consolidated financial statements for the year ending December 31, 2002. KPMG LLP will commence its engagement with the review of TIMCO's financial statements for the fiscal second quarter ended June 30, 2002. The decision to dismiss Arthur Andersen LLP, the Company's prior independent auditors, and to retain KPMG as the Company's independent auditor was made by the Audit Committee of the Board of Directors. The Company's auditors for the last two years have been Arthur Andersen. Arthur Andersen's reports on the Company's consolidated financial statements for each of the years ended December 31, 2001 and 2000 contained a going concern modification. Aviation Sales provides maintenance, repair, and overhaul (MRO) services to major commercial carriers, airline leasing companies, and jet engine manufacturers (including Pratt & Whitney). Aviation Sales is restructuring: It has sold its redistribution business (to Kellstrom Industries), as well as its manufacturing operations and other noncore businesses. Proceeds from the deals will be used to pay down debt. With the divestitures, MRO operations -- including aircraft heavy maintenance, component repair and overhaul services, and engineering services -- are now Aviation Sales' sole focus. The company operates repair facilities in the US. BANYAN STRATEGIC: Inks Amendments to Northlake Sale Contract ------------------------------------------------------------ Banyan Strategic Realty Trust (Nasdaq: BSRTS) has entered into a series of amendments to the sale contract relating to its Northlake Tower Festival Mall in Atlanta, Georgia. Among other provisions, the amendments extend the closing date from July 17, 2002 to September 17, 2002. These amendments, which mark the completion of the due diligence period, also extend the time period within which the Northlake purchaser must obtain approval of its application to assume Banyan's first mortgage loan, to August 25, 2002. If the purchaser's application for assumption is rejected, the contract will be terminated without penalty to the purchaser. In accordance with the terms of the contract, upon the expiration of the due diligence period on June 19, 2002, the purchaser has increased its earnest money from $200,000 to $400,000. The earnest money is now nonrefundable, except in the event of a default by Banyan, or the failure of a condition precedent. L.G. Schafran, Banyan's Chairman, CEO and Interim President, commenting on the amendments, stated: "We are pleased to announce the successful completion of the purchaser's due diligence period and their decision to deposit additional earnest money. Although the closing has been unavoidably delayed due to a lengthy approval process, we are confident that the purchaser is committed to acquiring our property in September, or sooner if possible." BANYAN STRATEGIC: Appeals to Nasdaq Not to Delist Shares -------------------------------------------------------- Banyan Strategic Realty Trust (Nasdaq: BSRTS) appeared Thursday before the Nasdaq Listing Qualifications Panel in Washington, D.C., to appeal a Nasdaq determination that the shares of beneficial interest of the Trust should be delisted from the Nasdaq National Market System, due to the failure of the shares to trade above $1.00 during the 90-day period from February 14, 2002 to May 15, 2002. The Trust expects to be advised of the Panel's decision within twenty-one (21) days. In accordance with the Nasdaq rules, the Trust will be advised of the decision on appeal only after it becomes effective. The Trust intends to announce the decision as soon as practical after the Trust becomes aware of the result. Banyan Strategic Realty Trust is an equity Real Estate Investment Trust 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 expected to be extended to September 17, 2002. 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. BRIDGE: Dow Jones Seeks Allowance of Administrative Expense ----------------------------------------------------------- Dow Jones & Company Inc. asks the Court to grant them their administrative expense claims in the Chapter 11 cases of Bridge Information Systems, Inc. and its debtor-affiliates of: (i) $568,707 under the Purchaser Indemnity Provision; (ii) $451,129 under the Indexes Agreement covering September 1, 2001 through the Rejection Date; and (iii) $460,320 under the Infosel Agreement. Rosemary Spano, Esq., Deputy General Counsel and Vice President for Law of Dow Jones & Company, in Princeton, New Jersey, relates that Dow Jones acquired Telerate Inc. and various affiliates and subsidiaries. Dow Jones also entered a Stock Purchase Agreement with the Debtors to which Dow Jones sold all of its stock in Dow Jones Market Holdings to the Debtors. "After the sale, the Dow Jones Markets name was eliminated and replaced with the Telerate name," Ms. Spano states. Dow Jones Markets International Company was also changed to Telerate International Inc. A. Infosel Agreement According to Ms. Spano, Dow Jones Markets International Company entered into an agreement with Information Selectiva -- Infosel Agreement -- wherein Information Selectiva was granted the right to distribute certain news services for a monthly per terminal fee. Dow Jones and the Debtors made an arrangement -- the Revenue Sharing Agreement -- where they both agreed to equally share the revenues generated from the Infosel Agreement. When the Debtors acquired Dow Jones, they assumed the obligations under the Infosel Agreement. Infosel would pay its fees to the Debtors and Dow Jones would remit invoices to the Debtors on a monthly basis for its 50% share of the revenues. However, Dow Jones has not received its 50% share of the revenues. Accordingly, Dow Jones now asks for payment of an administrative expense entitled to priority against the Debtors for all amounts due and owing under the Infosel Agreement. B. Indexes Agreement Dow Jones and the Debtors also entered into a Dow Jones Indexes Enterprise Distribution Agreement wherein the Debtors were granted a non-exclusive, non-transferable worldwide license to distribute the Dow Jones Averages and the Dow Jones Global Indexes for certain monthly vendor fees. "Dow Jones periodically remitted invoices for the fees; however, the Debtors have not paid the fees through the Rejection Date," Ms. Spano notes. Accordingly, Dow Jones asserts payment of an administrative expense claim, entitled to priority. C. Purchaser Indemnity Provision In relation to Dow Jones' sale of their stocks to the Debtors, the Debtors agreed to indemnify Dow Jones for all losses arising out of any liability or obligation relating to the operation and ownership, after the closing date, of the business sold. Ms. Spano states that Dow Jones asserts an administrative claim against the Debtors based upon the indemnity provision, for all amounts due and owing under the Indexes Agreement. Ms. Spano further reports that the Debtors and Dow Jones entered into a News Distribution Agreement to which Dow Jones granted to Bridge the right to distribute, via Bridge's market data distribution system, certain of Dow Jones' news services. Dow Jones granted to the Debtors a nonexclusive, non-transferable license to distribute certain of its news services in certain territories in consideration of an annual fee of $7,500,000 -- License Fee Payments. Dow Jones remitted invoices for the License Fee Payments to Bridge on a quarterly basis. "The Debtors, however, have not paid Dow Jones for the License Fee Payments," Ms. Spano says. While it is unclear to Dow Jones exactly which entity received the benefits of the distribution of the News Services, to the extent that the entity are the Debtors, Dow Jones asserts an Administrative Expense Claim against the Debtors for all amounts due and owing with respect to the License Fee Payments. (Bridge Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 609/392-0900) BUDGET GROUP: Eyes Chapter 11 to Complete Cendant Transaction ------------------------------------------------------------- At least three financial buyers bid for ailing car-rental company Budget Group Inc., but their offers were trumped by a tentative offer from travel and real estate giant Cendant Corp., people familiar with the situation said on Wednesday, reported Reuters. Budget is expected to file for bankruptcy protection in the next few weeks regardless of whether it can reach a deal to be bought, these people said. Reuters reported that MSD Capital, the investment arm for Dell Computer Corp. Chief Executive Michael Dell, and at least two other private investors bid for Budget, but Cendant's offer topped them. According to the newswire, Cendant has offered about $100 million cash and other considerations and agreed to take on about $3 billion of Budget debt, sources said. (ABI World, June 20, 2002) DebtTraders reports that Budget Group Inc.'s 9.125% bonds due 2006 (BD06USR1) are quoted between the prices 20 and 25. See http://www.debttraders.com/price.cfm?dt_sec_ticker=BD06USR1for more real-time bond pricing. CTF TECHNOLOGIES: Creditors Agree to Debt-to-Equity Conversion -------------------------------------------------------------- CTF Technologies Inc. announces that creditors of CTF are willing to accept shares in the capital of the Company in settlement of monies owing to them by the Company. Subject to regulatory approval, CTF contemplates that it will issue a total number of 12,219,153 common shares to settle debts totaling Cdn.$5,316,295.10. CANNON EXPRESS: Former Auditors Express Going Concern Doubt ----------------------------------------------------------- Based on the recommendation of the Audit Committee, the Board of Directors of Cannon Express, Inc. dismissed its independent auditors Arthur Andersen LLP on June 11, 2002. The Board engaged Tullius, Taylor, Sartain & Sartain headquartered in Tulsa, Oklahoma with offices in Fayetteville, Arkansas, as its new independent auditors for the fiscal year ended June 30, 2002, on June 11, 2002. The reports of Arthur Andersen on the consolidated financial statements of Cannon for its fiscal years ending June 30, 2000 and June 30, 2001 indicated that the net losses the Company has incurred and its working capital deficit raised substantial doubt concerning the ability of the Company to continue as a going concern. Cannon Express operates a fleet of 775 tractors and more than 1,600 trailers. The company ships retail and wholesale goods (largely for discount merchandisers), automotive supplies and parts, nonperishable food products, and paper goods. Major customers include Wal-Mart and International Paper. Cannon Express monitors and coordinates routes through a company- designed computer system. The company also operates CarriersCo- Op.com, an Internet-based forum for smaller carriers to share or swap extra loads. CARAUSTAR: Lowers Expected Q2 Earnings as Fiber Prices Increase --------------------------------------------------------------- Caraustar Industries, Inc. (Nasdaq: CSAR) expects second quarter 2002 earnings to be $0.06 to $0.08 per share lower as a result of rapid increases in its basic raw material, recovered fiber. As a result, the company said it expected overall results for the quarter to range from a loss of $(0.03) per share to income of $0.02 per share. Prices for the company's primary grade of recovered fiber, old corrugated containers, have increased from $40 per ton in early April to $90-$100 per ton currently. Caraustar has announced price increases for its recycled paperboard grades and converted products of approximately $50 per ton effective in mid- to late June. The company expects the price increases to offset the cumulative increase in recovered fiber cost in the third quarter of 2002 but anticipates that gross paperboard margins will be reduced by approximately $25 per ton in the second quarter of 2002. The company expects that the second quarter margin "squeeze" of approximately $25 per ton will reduce operating income by about $6.0 million in the second quarter of 2002; however, the volume of shipments in the company's mill system is expected to improve by over 13,000 tons in the second quarter to a total of approximately 240 thousand tons and should offset the margin "squeeze" by about $2.8 million dollars, or a net reduction of $3.2 million in operating income. Higher shipping volumes at the Premier Boxboard mill joint venture are expected to partially offset higher fiber costs in the second quarter. Announced price increases for corrugated medium and gypsum facing paper products at the Premier Boxboard mill are expected to improve operating results at that business in the third quarter of 2002. Caraustar, a recycled packaging company, is one of the largest and lowest-cost manufacturers and converters of recycled paperboard and recycled packaging products in the United States. The company has developed its leadership position in the industry through diversification and integration from raw materials to finished products. Caraustar is the only major packaging company that serves the four principal recycled paperboard product markets: tubes, cores and cans; folding carton and custom packaging; gypsum wallboard facing paper; and miscellaneous "other specialty" and converted products. As reported in Troubled Company Reporter's April 10, 2002 edition, Standard & Poor's has downgraded Caraustar's corporate credit rating to BB. CELL TECH: Working Capital Deficit Hovers at $6MM at March 31 ------------------------------------------------------------- Cell Tech International Incorporated (OTC:EFLI) reported financial results for the first quarter ended March 31, 2002 of net income of $109,073 versus a net loss for the quarter in 2001 of $1,048,261. Net sales of $7.1 million for the quarter were down $0.96 million or 11.8% compared to $8.0 million for the same period a year ago. Cost of sales as a percent of net sales in the 2002 first quarter improved to 27.7 percent from 32.2 percent in the comparable 2001 quarter. This decrease reflects the reduction in the fixed cost component as a result of the cessation of recording of depreciation expense of certain fixed assets at the harvest site. Operating expenses, which consist of selling expenses, general and administrative expenses, shipping and handling expenses, and research and development totaled $1.6 million for the first quarter of 2002 compared with $2.5 million in the comparable quarter of 2001. The decrease of $0.9 million, or 35.0%, is due to the implementation of various cost-cutting measures implemented by management as part of the restructuring. Cell Tech's March 31, 2002 balance sheet shows that the company's total current liabilities eclipsed its total current assets by close to $6 million. Donald P. Hateley, Cell Tech's Chairman, stated, "The net income improvement of $1,157,334 from the prior year's comparable quarter reflects effective cost controls in all operating divisions and the implementation of our restructuring. We are pleased with our earnings results for the first quarter and the reduction in our debt and interest expense. Our operating income improved by $1,076,884 to $141,410 compared with a $935,474 operating loss for the previous year's first quarter and our interest expense for the first quarter of 2002 was $47,146 compared to $179,087 for the comparable quarter in 2001. With the completion of our SEC filings, we will now begin the process to have our stock quoted again on the OTC Bulletin Board." Marta C. Carpenter, Cell Tech's President & CEO, stated, "This is our first profitable quarter in 3 years since our fiscal year ended December 31, 1998. All of our departments contributed to our positive earnings turnaround. We have reduced the outstanding debt under our credit facility to $2.0 million as of end of the 2002 first quarter. The results from the revisions to our compensation plan have reduced our commission expense for the first quarter of 2002 to 47.7% from 49.0% for the comparable quarter last year. We believe that our revised compensation plan will reward our distributors who will contribute to our future growth. We are also encouraged by the increase in our Preferred Customer population for the first quarter of 2002. We believe that Preferred Customers are a leading indicator of future sales potential." Cell Tech International Incorporated is engaged in the development, production and distribution of food products made with blue-green algae harvested from Klamath Lake, Oregon. The Company uses a multi-level distributor network throughout the United States and Canada to distribute its twenty products divided into five categories that include daily health maintenance, digestive health, defensive health, powdered drinks and snacks and animal and plant food. CONSOLIDATED CONTAINER: Exceeds 5-Month EBITDA Covenant Target -------------------------------------------------------------- Consolidated Container Company LLC has surpassed the five-month cumulative EBITDA target for the period ended May 31, 2002, as required by the amended credit facility agreement. Consolidated Container Company is a leading U.S. developer, manufacturer, and marketer of blow-molded rigid plastic containers for the beverage, consumer, and industrial markets. The Company was created in 1999 through the merger of Reid Plastic Holdings with the domestic plastic packaging operations of Suiza Foods Corporation, a predecessor entity to Dean Foods Company. * * * As reported in Troubled Company Reporter's May 2, 2002 edition, Standard & Poor's lowered its long-term corporate credit ratings on Consolidated Container Company LLC and its wholly owned subsidiary, Consolidated Container Capital Inc., to 'B-' and placed the ratings on CreditWatch with negative implications. Atlanta, Georgia-based Consolidated is a domestic producer of rigid plastic containers for a variety of consumer products, including dairy, water, foods, beverages, household and agricultural chemicals, and motor oil. The downgrade reflects continued weakness in Consolidated's financial performance and constrained financial flexibility. The CreditWatch listing highlights Standard & Poor's heightened near-term concerns about potential deterioration in liquidity due to possible violation of financial covenants in the company's recently amended revolving credit facility. The credit agreement requires that Consolidated achieve minimum EBITDA of $35 million for the period of January through May of 2002, which may not be achievable without a significant improvement to operating results. In addition, other financial covenants tighten in the second half of 2002, and the company faces a sizable debt amortization schedule. COVANTA ENERGY: Wants to Assume 5 Intercompany Agreements --------------------------------------------------------- Pursuant to Section 365 of the Bankruptcy Code, Covanta Energy Corporation, and its debtor-affiliates, want to assume five inter-company agreements: (1) Operations and Maintenance Agreement between Second Imperial Geothermal Company and Covanta SIGC Geothermal Operations, Inc. dated November 24, 1992, where Second Imperial operates the SIGC project and facilitates its continued operations; (2) Second Amended and Restated Heber Geothermal Generating Plant Operations and Maintenance Contract between Heber Geothermal Company and Covanta Imperial Power Services, Inc., dated March 27, 1989, operates the Covanta Imperial project and facilitates its continued operations; (3) Operations and Maintenance Agreement between Heber Field Company and Covanta Geothermal Operations, Inc. dated December 18, 1991, provides that Covanta Geothermal operates the Heber Field project and facilitates its continued operations; (4) Sublease and Geothermal Fluid Agreement among Heber Field Company, as Lessor and Heber Field Company, as successor in interest to U.S. Trust Company of California, N.A. as Field Lessor and Second Imperial Geothermal Company, as Lessee, dated November 17, 1992, provides that Heber Field sells geothermal fluid to Second Imperial; and (5) Geothermal Sales Agreement between Heber Field Company, as successor in interest to U.S. Trust Company of California, N.A., and Heber Geothermal Company, a partnership between ERC Energy, Inc., ERC Energy II, Inc. and Heber Loan Partners dated December 18, 1991, as amended, provides that Heber Field sells geothermal fluid to Heber Geothermal. Vincent E. Lazar, Esq., at Jenner & Block, LLC, in Chicago, Illinois, tells the Court that the terms of the Agreements were negotiated when Heber Field, Heber Geothermal and SIGC were not yet 100% owned by the Debtors or its affiliate. Mr. Lazar asserts that the terms of Agreements are fair to all parties concerned as it was negotiated with third parties. Mr. Lazar adds that each of the projects is profitable and of significant value to the Debtors' estates and their continued business operations. Accordingly, the Debtors contend, assumption of the Agreements is beneficial to all the concerned entities' operations and will satisfy the requirements of Section 365 of the Bankruptcy Code. (Covanta Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-0900) ENRON CORP: Unit Wants Prompt Debt Payments by NV Power et al ------------------------------------------------------------- Enron Power Marketing Inc. wants immediate payment by Nevada Power Company and Sierra Pacific Power Company of debts that are property of its estate. Howard B. Comet, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that Enron Power, Nevada Power and Sierra Pacific are parties to power purchase and sale transactions that are governed by the Western Systems Power Pool Agreement. On March 29, 2002, Standard and Poor's downgraded certain public debt securities of Nevada Power and Sierra Pacific below investment grade. At that time, Enron Power was party to numerous Transactions governed by the WSPP Agreement under which performance was still due and owing by Enron Power, on one hand, and either, Nevada Power and Sierra Pacific, on the other hand. As a result of the downgrading of Nevada Power and Sierra Pacific's public debt securities, Mr. Comet contends that Enron Power had the right, pursuant to the WSPP Agreement, to request Nevada Power and Sierra Pacific to either: (1) post a Letter of Credit; (2) make a cash prepayment; (3) post other acceptable collateral or security; (4) provide a Guarantee Agreement executed by a creditworthy entity; or (5) comply with "some other mutually agreeable method of satisfying" Enron Power. Enron Power sent a Performance Assurance Letter dated April 22, 2002 to Nevada Power and Sierra Pacific, demanding them to provide cash as collateral in these amounts: Nevada Power $225,000,000 Sierra Pacific 101,000,000 Pursuant to Section 27 of the WSPP Agreement, Mr. Comet explains, Nevada Power and Sierra Pacific were required to post the cash collateral or provide other reasonably satisfactory assurances of their ability to perform the Transactions acceptable to Enron Power, within three business days of receipt of the Letter. However, Nevada Power and Sierra Pacific failed, which automatically constituted an Event of Default. In fact, Mr. Comet relates, Nevada Power and Sierra Pacific's Chief Financial Officer, Dennis Schiffel, acknowledged Enron Power's right to terminate the remaining Transactions among the parties under the WSPP Agreement. Mr. Schiffel asked Enron Power to give them 10 business days advance notice before terminating the Transactions. On May 1, 2002, Enron Power sent a Notice of Default and Termination to Nevada Power and Sierra Pacific. Enron Power intends to terminate all remaining Transactions and provide Nevada Power and Sierra Pacific with its calculation of the payment associated with the termination of each of the Transactions. Enron Power sent the Termination Payments Notice on May 9, 2002. Enron Power lists these amounts owed: Nevada Power $199,721,200 Sierra Pacific 87,139,110 "Nevada Power and Sierra Pacific were required to pay the full amount of the Termination Payments to Enron Power within three business days of their receipt of the Notice. This was regardless of whether they disputed the Termination Payments as calculated by Enron Power, subject to Enron Power refunding any amounts they paid, with interest, pursuant to Section 9.4 of the WSPP Agreement," Mr. Comet says. Mr. Comet asserts that the Termination Payments constitute debts that are property of Enron Power's estate. In addition, Mr. Comet continues, the parties also entered into separate Confirmation Agreements with respect to specific Transactions. "The Confirmation Agreements set forth the terms and conditions concerning the Transactions with respect to, among other things, the price, quantity, delivery point and scheduling of specific Transactions regarding the sale of energy," Mr. Comet explains. Under the WSPP Agreement and the Confirmation Agreements, Mr. Comet says, Nevada Power and Sierra Pacific were obligated to purchase certain quantities of energy from Enron Power and to make payment to Enron Power in connection with the purchases. In some Transactions, Mr. Comet relates, Nevada Power and Sierra Pacific accepted, but failed to pay for, power they purchased from Enron Power. The Transaction Payments owed to Enron Power are: Nevada Power $16,267,419 Sierra Pacific 6,350,430 According to Mr. Comet, Nevada Power and Sierra Pacific were require to pay the full amount of the Transactions when due regardless of whether they disputed any portion of the Transaction Payments. Likewise, Mr. Comet asserts that the Transaction Payments constitute debts that are property of Enron Power's estate. Thus, Enron Power demands judgment on its Complaint: (1) directing immediate payment by Nevada Power to Enron Power of $199,721,200 in Termination Payment; (2) directing immediate payment by Sierra Pacific to Enron Power of $87,139,110 in Termination Payment; (3) directing immediate payment by Nevada Power to Enron Power of $16,267,419 in Transaction Payment; (4) directing immediate payment by Sierra Pacific to Enron Power of $6,350,430 in Transaction Payment; (5) awarding judgment in favor of Enron Power and against Nevada Power in the amount of $215,988,619; (6) awarding judgment in favor of Enron Power and against Sierra Pacific in the amount of $93,489,540; and (7) awarding attorney's fees, costs and interest. (Enron Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 609/392-0900) ENRON CORP: Wants to Sell Garden State Assets by Public Auction --------------------------------------------------------------- Garden State Paper Company LLC is located in Garfield, New Jersey and engaged in the business of: (i) manufacturing and selling newsprint made from recovered paper and generating certain of the electrical power used therefor at certain of its facilities -- the "Mill Business"; and (ii) receiving, sorting, and baling recyclable waste materials, including old newspapers -- the "Recycling Business." To recall, Garden State commenced an orderly shutdown of its Mill Business in the first week of December 2001. But Garden State still continues to operate its Recycling Business. Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New York, reports that Garden State's revenues for 2001 were approximately $114,389,729 and its consolidated books and records reflected assets totaling approximately $80,313,474 and liabilities totaling approximately $23,260,586. Enron Industrial Markets, an affiliate of Garden State, initiated a process pursuant to which Garden State would be sold to a third party via private auction. Beginning December 20, 2001, Mr. Rosen relates, information memoranda and draft confidentiality agreements were sent to parties that were deemed by the Debtors to be likely candidates for the purchase of the Business. In addition, Mr. Rosen continues, Information Memoranda and Confidentiality Agreements were sent to parties that contacted the Debtors' advisors or the Debtors directly. Mr. Rosen explains that the Information Memoranda were designed as a primer to generate interest in the purchase of the Business and did not contain confidential information. All in all, Mr. Rosen says, 57 Information Memoranda were distributed to interested parties. According to Mr. Rosen, recipients of the Information Memoranda were instructed to respond as soon as possible with an indication of further interest and a marked-up or signed Confidentiality Agreement. Out of the 57, Mr. Rosen notes 16 recipients signed Confidentiality Agreements, 10 of which expressed further interest and arranged to conduct due diligence. Beginning February 6, 2002, Mr. Rosen recounts, each of the 10 parties expressing further interest conducted the diligence. Ultimately, Mr. Rosen says, only one bid was received by Garden State. But the Debtors' advisors found the bid inadequate. So, Garden State has changed its tactics and has determined that: -- a sale of the Recycling and Mill Businesses to the highest bidder at a public auction, or -- a sale of the Mill Business and the Recycling Business as separate units to the extent the combined purchase price exceeds all bids for the Business, would provide the greatest recovery to its estate and creditors. In case there are no bidders for the Business, Mr. Rosen says, Garden State will accept bids solely for the Mill Business or solely for the Recycling Business, for sale as separate units. By this motion, Garden State seeks to sell and assign the Business or, to the extent necessary, the Mill Business or the Recycling Business, including, inter alia, the Real Property Leases, Owned Real Property, Equipment Leases, Permits, Assumed Contracts, Inventory, and the Intellectual Property, subject to the exceptions in Section 2.2 of the Asset Purchase Agreement. In addition, Mr. Rosen continues, it is anticipated that the highest and best bidder will assume certain liabilities relating to the Business, the Mill Business, or the Recycling Business. Mr. Rosen explains that Garden State has drafted an Asset Purchase Agreement, designed as a template upon which interested parties must base their competing bids at the public auction. The principal terms of the Asset Purchase Agreement are: Purchase Price: In consideration for the Purchased Assets, and subject to the terms and conditions of the Asset Purchase Agreement, the Buyer will assume the Assumed Liabilities as provided in Section 2.3(a) of the Asset Purchase Agreement and, at the Closing, pay to Garden State, in immediately available funds, an amount in cash. Limitation on Garden State's Representations and Warranties: The Purchased Assets are being conveyed "AS IS," "WHERE IS" and "WITH ALL FAULTS" on the Closing Date. Except for the representations and warranties contained in the Asset Purchase Agreement, Garden State makes no other express or implied representation or warranty including representations or warranties as to the condition of the Purchased Assets, their contents, their fitness for any intended use, the income derived or potentially derived from the Purchased Assets or the Business, or the expenses incurred or potentially to be incurred in connection with the Purchased Assets or the Business. Garden State is not, and will not be, liable or bound in any manner by express or implied warranties, guaranties, statements, promises, representations, or information pertaining to the Purchased Assets or the Business, made or furnished by any broker, agent, employee, servant, or other person representing or purporting to represent Garden State, unless it is expressly set forth in the Asset Purchase Agreement. Specifically, Garden State asks the Court to: (i) approve the sale of Garden State's assets free and clear of liens, claim, encumbrances, and other interests, (ii) approve the terms and conditions of the Asset Purchase Agreement, and (iii) authorize the consummation of the transaction contemplated therein. According to Mr. Rosen, the proceeds of the sale of Garden State's assets will be retained by Garden State pending allocation of the funds pursuant to further order of the Court. Despite diligent efforts, Mr. Rosen says, it is unlikely that Garden State will be able to successfully maintain the Business without an infusion of a significant amount of new financing. Thus, Garden State has decided to sell the Business to the highest bidder as a going concern in order to provide the greatest value for Garden State's assets. As confirmed by the Debtors' financial advisors, Mr. Rosen notes, liquidation of Garden State's assets would result in, among other things: (i) smaller distributions being made to creditors than those anticipated in connection with a sale of the Business, the Mill Business, or the Recycling Business as a direct result of the failure to realize the greater, going- concern value of any of Garden State's assets; and (ii) additional expenses and claims, some of which would be entitled to priority, which would be generated during the liquidation and from the rejection of leases and other executory contracts in connection with a cessation of the Business. And absent the expeditious sale of the Business, Mr. Rosen says, Garden State would continue to incur expenses in the form of: (i) salaries and benefits for the remaining employees whose presence is required to preserve the value of the estate and effectuate a sale, (ii) property taxes, (iii) utilities, and (iv) lease payments for the Paterson, New Jersey and Carteret, New Jersey recycling centers. Mr. Rosen explains that the sale of the Business at a public auction will be the result of arm's length, good faith negotiations, will provide the greatest return to the estate and creditors, and is well within Garden State's sound business judgment. Garden State is aware of certain mechanics' and materialman's liens asserted against certain assets of Garden State just prior to or after December 17, 2001. According to Mr. Rosen, Garden State is in the process of investigating the mechanics' and determining their validity. Nevertheless, Mr. Rosen says, the purchase price of the Business will exceed the value of the valid liens asserted against Garden State's assets. In addition, Mr. Rosen continues, the purchase price of the Mill Business or the Recycling Business will exceed the value of the valid liens asserted against the assets relating to the Mill Business or the Recycling Business, respectively. Therefore, Garden State asserts, the Court should authorize them to sell their assets free and clear of any and all liens, claims, and encumbrances with the liens to be transferred and attached to the net proceeds of the sale, with the same validity and priority that the liens had against Garden State's assets. (Enron Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., 609/392-0900) EXIDE TECH: Turns to Blackstone Group for Financial Advice ---------------------------------------------------------- Exide Technologies and its debtor-affiliates want to employ and retain The Blackstone Group, pursuant to Sections 327 and 328 of the Bankruptcy Code, as their financial advisors in the Chapter 11 Cases. According to Christopher J. Lhulier, Esq., at Pachulski Stang Ziehl Young & Jones P.C. in Wilmington, Delaware, Blackstone has extensive experience in providing financial advisory services in reorganization proceedings. It has an excellent reputation for the services it has rendered in Chapter 11 cases on behalf of debtors and creditors throughout the United States. The Debtors believe that Blackstone is well qualified and able to represent the Debtors in a cost-effective, efficient, and timely manner. Mr. Lhulier points out that Blackstone is recognized for its expertise in providing financial advisory services in financially distressed situations, including advising debtors, creditors and other constituents in Chapter 11 proceedings and serving as financial advisors in numerous cases, including: In re Global Crossing, Case No. 02-40221 (Bankr. S.D.N.Y. January 28, 2002); In re Enron Corp., Case No. 01-16034, (Bankr. S.D.N.Y. December 2, 2001); In re Chiquita Brands International, Case No. 01-118812 (Bankr. S.D. Ohio November 28, 2001); In re AMF Bowling Inc., Case No. 01-61119, et al. (Bankr. E.D. Va. July 2, 2001); In re Arch Wireless Communications, Inc., Case No. 01-46865 (Bankr. D. Ma. November 9, 2001). Arthur B. Newman, a senior managing director of Blackstone, has previously worked on many Chapter 11 restructurings, advising both debtors and creditors in various cases and has vast experience working on companies in distressed situations. Selected current and previous advisory assignments in which he has participated include: In re The Singer Company N.K, Case No., 99-10587 (Bankr. S.D.N.Y. September 13, 1999); In re Montgomery Ward Holding Co., Case No. 97-1409 (Bankr. D. Del. July 7, 1997); In re MobileMedia Corp., Case No. 97-0175 (Bankr. D. Del. January 30, 1997); In re Marvel Entertainment Group, Inc., Case No. 96-2069 (Bankr. D. Del. December 27, 1996); In re Best Products Co. Inc., Case No. 96-35267 (Bankr. E.D. Va. September 24, 1996); In re Olympia and York Companies (USA); Case No. 93-42409 (Bankr. S.D.N.Y. May 7, 1993). Since October 2001, Mr. Newman relates that Blackstone has rendered financial advisory services to the Debtors in connection with their restructuring efforts. Blackstone has become thoroughly familiar with the Debtors' operations and is well qualified to represent the Debtors as financial advisors in connection with such matters in a cost-effective and efficient manner. Mr. Newman ascertains that Blackstone is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, and holds no interest adverse to the Debtors and their estates for the matters for which Blackstone is to be employed. In addition, Blackstone has no connection to the Debtors, their creditors or their related parties. Prior to the Petition Date, Mr. Newman informs the Court that Blackstone performed certain professional services for the Debtors beginning October 18, 2001 and has invoiced for $1,200,000.00 in fees through the period ending $9,383.82 in expenses incurred and processed to date. Prior to the Petition Date, Blackstone was paid $1,209,383.82 by the Debtors for fees and expenses and a $25,000.00 expense advance which was first to be applied against prepetition expenses. Blackstone will then credit the unused expense advance against post-petition expenses incurred thereafter. The Debtors do not owe Blackstone any amount for services performed or expenses incurred prior to the Petition Date. The parties have entered into an agreement that would govern the relationship between Blackstone and the Debtors. Blackstone will provide those financial advisory services that Blackstone and the Debtors consider appropriate and feasible in the course of the Chapter 11 Cases, including: A. assisting in the evaluation of the Debtors' businesses and prospects; B. assisting in the development of the Debtors' long term business plan and related financial projections; C. assisting in the development of financial data and presentations to the Debtors' Board of Directors, various creditors and other third parties; D. analyzing the Debtors' financial liquidity and evaluate alternatives to improve such liquidity; E. analyzing various restructuring scenarios and the potential impact of these scenarios on the value of the Company and the recoveries of those stakeholders impacted by the Restructuring; F. providing strategic advice with regard to restructuring or refinancing the Debtors' obligations; G. evaluating the Debtors' debt capacity and alternative capital structures; H. participating in negotiations among the Debtors and its creditors, suppliers, lessors, and other interested parties; I. valuing securities offered by the Debtors in connection with a Restructuring; J. advising the Debtors and negotiate with lenders with respect to potential waivers or amendments of various credit facilities; K. assisting in arranging debtor-in-possession financing for the Company, as requested; L. providing expert testimony concerning any of the subjects encompassed by the other financial advisory services; and M. providing such other advisory services as are customarily provided in connection with the analysis and negotiation of a Restructuring or Transaction, as requested and mutually agreed. N. providing advisory services, including a general business and financial analysis, transaction feasibility analysis, and pricing analysis of a Transaction; O. assisting the Company in formulating the marketing strategy related to a Transaction; P. preparing marketing materials, including an Offering Memorandum, management presentation or other marketing materials, highlighting the investment considerations of the Company, any or all of its subsidiaries, and/or any or all of its assets, to third parties, as appropriate; Q. identifying, classifying and contacting third parties and facilitating their due diligence by responding to inquiries and providing additional information, as appropriate; R. evaluating offers, assisting in negotiations and developing a general transaction strategy; and S. providing other financial advisory services that may be customarily rendered in connection with a Transaction. Mr. Newman admits that the Financial Advisory Services set forth in the Blackstone Agreement and summarized above do not encompass other investment banking services or transactions that may be undertaken by Blackstone at the request of the Debtors, including the raising of debt or equity capital, issuing fairness opinions or any other specific services not set forth in the Blackstone Agreement. The terms and conditions of any such investment banking services, including compensation arrangements, would be set forth in a separate written agreement between the Debtors and Blackstone and would be subject to any necessary Court approval. Mr. Newman contends that the Financial Advisory Services that Blackstone will provide to the Debtors are necessary to enable the Debtors to maximize the value of their estates and to reorganize successfully. The Debtors believe that the Financial Advisory Services will not duplicate the services that, subject to this Court entering or having entered appropriate orders, other financial advisors, if any, would provide to the Debtors in the Chapter 11 Cases. The Debtors also believe that the services provided will not duplicate the services that are being provided to the Debtors in these cases by JA&A Services LLC, the Debtors' restructuring consultant. Specifically, Blackstone will carry out unique functions and will use reasonable efforts to coordinate with the Debtors' other retained Professionals to avoid the unnecessary duplication of services. Blackstone has agreed to represent the Debtors for compensation at the amounts agreed upon between the parties pursuant to the Blackstone Agreement. In consideration of the Financial Advisory Services provided by Blackstone, the Debtors have agreed to pay Blackstone: A. a monthly advisory fee in the amount of $200,000 in cash, with the first such Monthly Advisory Fee payable upon execution of the Blackstone Agreement by both parties and additional installments of the Monthly Advisory Fee payable in advance on each monthly anniversary of the Effective Date; B. upon the consummation of a Transaction, a Transaction fee, shall be payable in cash. The Transaction fee will be calculated by multiplying the applicable Transaction Fee Percentage and the Consideration. For Consideration that falls in between any of the points shown below, the Transaction Fee Percentage will be interpolated between the relevant intervals of the consideration shown. In no event will the Transaction Fee be less than $1,500,000. Transaction Fee Table ============================================ Consideration Transaction ($ in millions) Fee Percentage ------------------------- -------------- $500 or less 1.000% $1,000 0.500% $1,500 0.450% $2,000 0.350% C. promptly upon the completion of a Successful Restructuring, an additional fee in cash of $10,000,000. A "Successful Restructuring" means the execution and confirmation of a plan of reorganization pursuant to an order of the Court and a "Transaction" means the sale, merger, or other disposition of all or a portion of the Company or its assets. The Debtors also seek approval of the Fee Structure pursuant to Section 328(a) of the Bankruptcy Code, which provides, in relevant part, that a debtor "with the court's approval, may employ or authorize the employment of a professional person under Section 327 of the Bankruptcy Code on any reasonable terms and conditions of employment, including a retainer, on an hourly basis, or on a contingent fee basis." Accordingly, Section 328(a) of the Bankruptcy Code, therefore, permits the Court to approve the Fee Structure outlined herein. Mr. Lhulier claims that the Fee Structure appropriately reflects the nature and scope of the services to be provided by Blackstone, Blackstone's substantial experience with respect to financial advisory services, and the fee structures typically utilized by Blackstone and other leading financial advisors, which do not bill their clients on an hourly basis. Similar fixed and contingency fee arrangements have been approved and implemented in other large chapter 11 cases in this District and elsewhere. Blackstone requests that the indemnification provisions of the Blackstone Agreement be approved, subject to the following: A. subject to the provisions of subparagraph (c), infra, the Debtors are authorized to indemnify, and will indemnify Blackstone, in accordance with the Blackstone Agreement for any claim arising from, related to, or in connection with Blackstone's engagement, but not for any claim arising from, related to, or in connection with Blackstone's postpetition performance of any services other than the Financial Advisory Services unless such postpetition services and indemnification therefore is approved by the Court; B. notwithstanding any provision of the Blackstone Agreement to the contrary, the Debtors will have no obligation to indemnify Blackstone, or to provide contribution or reimbursement to Blackstone, for any claim or expense that is either: * judicially determined by a court of competent jurisdiction (the determination having become final) to have primarily resulted from the bad faith, gross negligence or willful misconduct of Blackstone; or * settled prior to a judicial determination as to Blackstone's bad faith, negligence, or willful misconduct, but determined by the Court, after notice and a hearing, to be a claim or expense for which Blackstone is not entitled to receive indemnity, contribution or reimbursement under the terms of the Blackstone Agreement as modified by the Order approving this Application; C. if, before the earlier of the entry of an order confirming a Chapter 11 plan, or the entry of an order closing the Chapter 11 Cases, Blackstone believes that it is entitled to the payment of any amounts by the Debtors on account of the Debtors' indemnification, contribution and/or reimbursement obligations under the Blackstone Agreement, including, without limitation, the advancement of defense costs, Blackstone must file an application therefore in this Court, and the Debtors may not pay any such amounts to Blackstone before the entry of an order by this Court approving payment. Thus subparagraph (c) is intended only to specify the period of time under which the Court will have jurisdiction over any request for fees and expenses by Blackstone for indemnification, contribution or reimbursement and not to limit the duration of the Debtors' obligation to indemnify Blackstone; and D. a claim under the Blackstone Agreement for indemnification, contribution and/or reimbursement arising from Blackstone's prepetition performance of the services described in the Blackstone Agreement will not be entitled to administrative expense priority. (Exide Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900) FLEMING: S&P Affirms BB Rating Following Core-Mark Acquisition -------------------------------------------------------------- Standard & Poor's affirmed its double-'B' corporate credit rating on Fleming Cos. Inc. and raised its rating on Core-Mark International Inc.'s subordinated debt to single-'B'-plus (Fleming's level) from single-'B' following the completion of Fleming's acquisition of Core-Mark. The subordinated debt rating on Core-Mark was also removed from CreditWatch and the double-'B'-minus corporate credit rating on the company was withdrawn. The outlook on Fleming is negative. Lewisville, Texas-based Fleming had $2.2 billion total debt outstanding as of April 20, 2002. "Core-Mark, with 2001 sales of $3.4 billion, is the second- largest wholesale distributor of packaged consumer products in North America, focused on convenience store customers," Standard & Poor's credit analyst Mary Lou Burde said. "Its strong market position in the Western U.S. complements Fleming's convenience store distribution strength in the Midwest and East." Standard & Poor's said the acquisitions of Core-Mark and Head Distributing (completed on June 18, 2002) have a combined purchase price of $430 million. The acquisitions were funded with $200 million of senior notes, 9.2 million shares of common stock, and bank borrowings. Fleming recently refinanced its bank facilities, consisting of a $425 million six-year term loan and a $550 million five-year revolving credit facility. The company's use of equity to help fund these acquisitions reflects management's intention to moderate its relatively aggressive financial policy. Pro forma for the acquisitions, the new capital structure slightly improves debt leverage. Fleming's EBITDA covered interest expense 2.8 times in fiscal 2001, up from 2.6x in fiscal 2000. Moderate growth in cash flow in fiscals 2002 and 2003 should allow coverage to improve. The company's $550 million revolving credit facility provides good flexibility for ongoing operations. Under the new capital structure, Fleming has no maturities until 2007. FORMICA: Panel Gets Nod to Hire Jefferies as Financial Advisor -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gives its stamp of approval to the Official Committee of Unsecured Creditors appointed in Formica Corporation's chapter 11 cases to employ Jefferies & Company, Inc as its financial advisor, effective March 13, 2002. As Financial Advisor, Jefferies will: a) become familiar with and analyze the business, operations, properties, financial condition and prospects of the Company as directed by the Committee and as reasonably necessary; b) advise the Committee on the current state of the "restructuring market"; c) assist and advise the Committee in developing a general strategy to effectuate a restructuring of the Debtors' outstanding indebtedness; d) assist and advise the Committee in formulating and implementing a Plan; e) assist and advise the Committee on developing a strategy with respect to recapitalization possibilities for the Company; f) assist and advise the Committee in evaluating and analyzing Restructuring transactions, including valuing any securities that may be issued under a Plan; g) advising the Committee in evaluating the value of the Company and its assets, including preparation and provision of expert testimony relating to valuation, if required; h) assist the Committee and counsel in identifying potential financing sources for a recapitalization; and i) such other services as the Committee may reasonably request from time to time in connection with the Chapter 11 cases. The Committee agreed to compensate Jefferies a monthly fee of $125,000. Jefferies will also be paid a success fee equal to 1% of the Total Consideration received by the unsecured creditors in connection with these cases. Formica, together with its debtor and non-debtor-affiliates is a preeminent worldwide manufacturer and marketer of decorative surfacing materials. The company filed for chapter 11 protection on March 5, 2002. Alan B. Miller, Esq. and Stephen Karotkin, Esq. at Weil, Gotshal & Manges LLP represent the Debtors in their restructuring efforts. As of September 30, 2001, the Company reported a consolidated assets of $858.8 million and liabilities of $816.5 million. GENEVA STEEL: Lenders Agree to Continued Cash Collateral Use ------------------------------------------------------------ On June 14, 2002, Geneva Steel LLC, a wholly owned subsidiary of Geneva Steel Holdings Corp. (OTC: GNVH), reached agreement with its secured lenders for continued access to cash proceeds of sales of inventory and collections of accounts receivable. Access to cash pursuant to the agreement is subject to compliance with several conditions, including the filing of a guaranteed loan application by a qualified lender representing the Company under the Emergency Steel Loan Guarantee Program by July 1, 2002, and a budget for cash disbursements. The use of cash collateral will terminate on the earlier of: (a) July 15, 2002, if a guaranteed loan application is not submitted by July 1, 2002, (b) if a guaranteed loan application is submitted, 15 calendar days after the Government Loan Guarantee Board provides written notice of its approval or denial of an application or (c) an event of default under the existing loan agreements. The agreement also added additional conditions and defaults, including obligations to provide certain information to the lenders and the allocation of proceeds of certain asset dispositions. Any failure to satisfy these conditions may result in the termination of the Company's access to cash, with the exception of certain rights to pay accrued employee wages and benefits. There can be no assurance that the Company will be able to access cash under the agreement, that any available cash proceeds will be sufficient to fund Geneva's activities, that an application under the Emergency Steel Loan Guarantee Program will be filed by July 1, 2002, or that the Company will be able to reach any further agreement for access to cash collateral or other capital, if any is available, after the current agreement ends. The Company is seeking a new $250 million term loan to repay its existing term loan of approximately $108.4 million and to finance the Company's electric arc furnace strategy and working capital requirements. The Company continues to work with potential lenders, including with respect to a possible application under the Emergency Steel Loan Guarantee Program. There can be no assurance that the Company will be successful in obtaining a new term loan, that an application will be filed under the Emergency Steel Loan Guarantee Program or that any loan, if obtained, will be sufficient for the Company's needs. Geneva Steel's steel mill is located in Vineyard, Utah. The Company's facilities can produce steel plate, hot-rolled coil, pipe and slabs for sale primarily in the western, central and southeastern United States. GOLDMAN INDUSTRIAL: Bringing-In Freshfields as Foreign Counsel -------------------------------------------------------------- Goldman Industrial Group, Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to hire Freshfields Bruckhaus Deringer as Special Foreign Counsel under Section 327(e) of the Bankruptcy Code. Freshfields Bruckhaus has rendered legal services to the Debtors in connection with: i) advising the Debtors on issues of foreign law, such as those arising in England and Germany, where non-debtor subsidiaries of Bridgeport US are located; and ii) assisting the Debtors in reviewing and considering the strategy and potential negotiations and legal actions of the Debtors with respect to creditors and non-debtor subsidiaries of Bridgeport US outside of the United States, principally in Europe. This retention afforded Freshfields Bruckhaus a familiarity to the Debtors' business affairs and has the resources necessary to represent them in various legal matters. Principally, the Debtors expect that Freshfields Bruckhaus will be called upon to advise as to strategy with regard to selling the Bridgeport US's equity in or the assets of non-debtor Bridgeport Machines, Ltd., or substantially all the assets of Bridgeport UK. Freshfields Bruckhaus started working for the Debtors on May 17, 2002. The Debtors assert that it was necessary to seek Freshfields Bruckhaus' preliminary strategic advice at that time in order to proceed with their plans to sell the assets and maximize returns. The Debtors request permission to retain Freshfields Bruckhaus, nunc pro tunc to May 17, 2002. Freshfields Bruckhaus will bill for services at its current hourly rates: a) Kenneth Baird 450 pounds per hour approx $658 b) Richard Tett 350 pounds per hour approx $511 c) Ben Jones 200 pounds per hour approx $292 d) Paul A. Sidle 200 pounds per hour approx $292 e) Lars Westphal EUR555 per hour approx $521 f) Judith Voelker EUR390 per hour approx $366 g) Marhias Schulze Steinen EUR480 per hour approx $451 Goldman Industrial Group, Inc., with its affiliates, provide metalworking machinery to manufacturers; marketing and selling original equipment primarily to the aerospace, automotive, computer, defense, medical, farm, construction, energy, transportation and appliance industries. The Company filed for chapter 11 protection on February 14, 2002. Victoria W. Counihan at Greenberg Traurig, LLP represents the Debtors in their restructuring efforts. IT GROUP: Examiner Hires Pachulski Stang as Bankruptcy Counsel -------------------------------------------------------------- R. Todd Neilson, the Court-appointed Examiner in IT Group, Inc.'s and its debtor-affiliates' Chapter 11 cases, asks and obtained Court authority to retain and employ Pachulski, Stang, Ziehl, Young & Jones P.C. as bankruptcy counsel, nunc pro tunc to March 8, 2002, to perform, among others, these services: A. Providing legal advice with respect to its powers and duties as the Examiner; B. Preparing on behalf of the Examiner necessary applications, motions, objections, oppositions, complaints, answers, orders, agreements and other legal papers; C. Appearing in court on behalf of the Examiner to present necessary motions, objections, applications and other pleadings and to otherwise further the interests of the Examiner; and, D. Performing all other legal services for the Examiner which may be necessary and proper in these cases. The firm will be compensated on an hourly basis plus reimbursements of actual and necessary expenses and other charges incurred by Pachulski. The principal attorneys and paralegals presently designated to represent the committee and their current standards hourly rates are: Professionals Hourly rates -------------------- ------------ Richard M. Pachulski $ 590 Laura Davis Jones 550 Ira D. Kharasch 480 Jeremy V. Richards 450 Werner Disse 355 Jonathan J. Kim 330 Peter J. Duhig 225 Bruce Campbell (paralegal) 110 Cheryl Knotts (paralegal) 105 (IT Group Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 609/392-0900) IMMUNE RESPONSE: Appoints Michael L. Jeub as Chief Fin'l Officer ---------------------------------------------------------------- The Immune Response Corporation (Nasdaq: IMNR) announced the appointment of Michael L. Jeub as vice president of finance and chief financial officer, positions under which he will oversee the company's ongoing financial operations and capital needs. "Michael brings over 25 years in financial management experience to the company and we are fortunate to have someone of his experience and skill working with our investors and stockholders," said Dr. Dennis Carlo, president and chief executive officer of The Immune Response Corporation. "As we continue taking steps in an effort to ensure the company's success and the commercialization of our REMUNE(R) product, Michael is a key part of our management team and strengthens us for the job ahead." "This is a wonderful opportunity to work with an experienced management and scientific team on products that may potentially have a significant impact on a population facing the terrible toll HIV and AIDS inflicts," Jeub said. "I look forward to bringing my skills in financing and capital formation to bear on Immune Response and hope to see this company through to its eventual success." Mr. Jeub has extensive experience in healthcare and related industries. Mr. Jeub was chief financial officer, most recently, for Jenny Craig, International. Prior to that Mr. Jeub served as chief financial officer for National Health Laboratories, Medical Imaging Centers of America and International Clinical Laboratories. Jeub earned his bachelor degree in accounting from California State Polytechnic University in Pomona, beginning his career at the Los Angeles office of the accounting firm Ernst & Young. Mr. Jeub currently is also a partner with Tatum CFO Partners, LLP. Co-founded by medical pioneer Dr. Jonas Salk and based in Carlsbad, California, The Immune Response Corporation is a biopharmaceutical company developing immune-based therapies designed to treat HIV, autoimmune diseases and cancer. The Company also develops and holds patents on several technologies that can be applied to genes in order to increase gene expression or effectiveness, making it useful in a wide range of therapeutic applications for a variety of disorders. Company information is also available at http://www.imnr.com * * * As reported in Troubled Company Reporter's June 20, 2002 edition, The Immune Response Corporation (Nasdaq: IMNR) announced an agreement with Transamerica Technology Finance Corporation to restructure its existing equipment loans, in effect curing the existing default under those loans and limiting the circumstances which can serve as the basis for any future default, as part of an effort to solidify the Company's finances. The original equipment loan was used primarily to acquire equipment in the Company's Pennsylvania manufacturing facility and was primarily collateralized by the equipment on premises. The restructured agreement affects $1.5 million of the Company's outstanding debt. Pursuant to the agreements signed with Transamerica, the Company is obligated to pay Transamerica milestone payments upon receipt by the Company of proceeds from a certain number of financing activities. The payments would reduce the Company's existing Transamerica debt. The Company also remains obligated to make its scheduled debt payments to Transamerica until all the debt and interest has been paid in full. Additionally, the Company granted to Transamerica a security interest in the Company's assets, including its intellectual property, subject to an existing security interest in the intellectual property. INFORMATION MGT.: Amends Sale Pact to Extend Payment Schedule ------------------------------------------------------------- Information Management Associates, Inc., entered into an Asset Purchase Agreement, dated August 10, 2001 with AIT (USA), Inc., a corporation organized under the laws of Ohio, and AIT Group plc, a corporation organized under the laws of England, whereby Purchaser agreed to purchase substantially all of the Company's assets for an aggregate purchase price of $16,500,000, subject to certain adjustments. Pursuant to the terms of the Agreement, the Company received $10,000,000 in cash at closing together with a non-interest bearing promissory note in the principal amount of $6,500,000. An initial principal payment of $3,000,000, subject to certain adjustments, was payable under the Promissory Note on March 17, 2002 and the $3,500,000 balance of the Promissory Note was payable on June 17, 2002. The Company, Purchaser and Guarantor agreed that the aggregate amount of adjustments to the March Payment was equal to $801,987. On April 5, 2002, Purchaser made an interim payment to the Company of $1,100,000 against the amount due on the March Payment, leaving a balance of $1,098,013 outstanding on the March Payment. On May 23, 2002, the Company, Purchaser and Guarantor entered into Amendment Number One to the Agreement and Purchaser and Guarantor executed a new senior promissory note. The First Amendment and New Promissory Note revise and extend the payment schedule for the remaining amount of the purchase price under the Agreement. As consideration for the First Amendment, Purchaser and Guarantor waived all indemnification rights under the Agreement and agreed to pay interest on the outstanding amount beginning on June 17, 2002 at a rate of 9% per annum. Pursuant to the new payment schedule, (a) a principal payment of $1,098,013 due on May 28, 2002 has been paid in full; (b) $1,000,000, is payable on June 19, 2002; (c) $1,000,000, is payable on July 17, 2002 and (d) $1,500,000, is payable on September 25, 2002. Information Management Associates (IMA) makes customer relationship management (CRM) software for telephone call centers and customer service departments. The company's EDGE (for UNIX and Windows NT platforms) and TELEMAR (for IBM AS/400) software suites automate clients' telemarketing activities, including telesales, remote sales forces, account management, and customer service and support. The company also offers consulting, technical support, and maintenance services. Clients include Lloyds TSB Group, Xerox, and Avery Dennison. On July 24, 2000, the company filed a voluntary petition for protection under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Connecticut. IMA, continues to offer its products and services while it reorganizes. ISPAT INT'L: Lenders Agree to Terms of Bank Debt Restructuring -------------------------------------------------------------- Ispat International N.V., (NYSE: IST; AEX: IST NA) announced that Ispat Mexicana, S.A. de C.V., Ispat's Mexican operating subsidiary, has issued a supplemental offering memorandum, letter of transmittal and other ancillary documents amending and supplementing its exchange offer for all outstanding 10-1/8% Senior Structured Export Certificates due 2003 of Imexsa Export Trust No. 96-1. The Supplemental Documents, which amend and supplement the offering memorandum issued by Imexsa on January 24, 2002, describe the terms of an agreement in principle Imexsa has reached with a group of holders comprising over a majority of the aggregate outstanding principal amount of the Senior Certificates. The group of holders has indicated that it currently intends to participate in the amended exchange offer. Under the agreed upon terms of the amended exchange offer, Imexsa will offer to exchange 10-5/8% Senior Structured Export Certificates due 2005 to be issued by Imexsa Export Trust No. 96-1 for Senior Certificates validly tendered and accepted for exchange. The amended exchange offer expires at 5:00 p.m., New York City time, on June 28, 2002, unless extended. The New Senior Certificates will be fully and unconditionally guaranteed by Ispat, Grupo Ispat International S.A. de C.V. and certain of the subsidiaries of Imexsa. The New Senior Certificates will also be secured on a pro rata basis with Imexsa's bank loans by liens on certain assets of Imexsa and by a pledge of the stock of Imexsa and Grupo. Imexsa has also reached an agreement in principle with all of its bank lenders on the proposed terms of a restructuring of its bank loans. In connection with the bank debt restructuring and the amended exchange offer, Imexsa's shareholders have agreed to provide a $20 million loan for working capital purposes. The amended exchange offer is conditioned upon the holders of not less than 96% of the outstanding principal amount of Senior Certificates having validly tendered and not withdrawn their Senior Certificates prior to the Expiration Date and upon the other terms and conditions set forth in the Supplemental Documents. In connection with the amended exchange offer, Imexsa is also soliciting consents from holders of Senior Certificates to amend the agreements governing the Senior Certificates. Holders tendering their Senior Certificates in the exchange offer must also deliver consents to such amendments. Consents may not be withdrawn after the Expiration Date. D.F. King & Co., Inc. is the information agent for the exchange offer and consent solicitation. Requests for documentation should be made to D.K. King & Co., Inc. at (800) 847-4870. KAISER ALUMINUM: Wants to Sign-Up Mercer as Employee Consultant --------------------------------------------------------------- Kaiser Aluminum Corporation and its debtor-affiliates wish to use the services of Mercer Human Resources Consulting as their employee compensation consultants in these Chapter 11 cases, nunc pro tunc to April 17, 2002. The Debtors anticipate Mercer will perform these services: A. review and analyze the Debtors' current and proposed compensation structure, focusing on key employees; B. evaluate the competitiveness of the Debtors' compensation levels for key employees; C. compare the Debtors' compensation programs to other companies that have gone through similar restructuring; D. assist and advice the Debtors in developing and implementing new employee compensation and retention programs; E. develop a severance program for the Debtors' employees and assist the Debtors in implementing that program; and, F. provide other employee compensation and human resources consulting services as may be requested by the Debtors. The development of a compensation program for the Debtors, according to an estimate by Mercer, will cost approximately $125,000 depending on the nature, extent, and complexity of the programs developed. Patrick M. Leathem, Esq., at Richards, Layton & Finger P.A. in Wilmington, Delaware, says that Mercer is particularly well qualified to serve as the Debtors' employee compensation consultants. Mercer is the largest human resources consulting firm in the world and possesses substantial expertise in advising companies with respect to employee compensation and related issues. Mercer's consultants have assisted numerous organizations in connection with the development of employee compensation programs and human resources consulting. Mercer's professionals also have experience providing services to debtors and other constituencies in numerous cases under the Bankruptcy Code. Mr. Leathem further claims that Mercer is also familiar with the Debtors' current corporate retention needs. Mercer has reviewed compensation programs for the Debtors during the period leading to the Petition Date and Mercer assisted the Debtors in reviewing their current compensation programs and analyzing the Debtors' future employee compensation needs. Mr. Leathem tells the Court that, pursuant to the terms of Mercer's engagement letter and subject to the Court's approval, Mercer will be compensated for its professional services in accordance with its customary billing procedures plus reimbursements of actual and necessary out-of-pocket expenses. Mercer's hourly rates are fixed: A. $600 per hour for the services provided by Marshall Scott; and, B. a maximum of $415 per hour for services provided by all other professionals employed by Mercer. Marshall Scott, principal of Mercer Human Resources Consulting, ascertains that Mercer's research of its relationship with the Interested Parties indicated that it has not been, and is not currently employed by any Interested Parties in matters related or unrelated to these Chapter 11 cases. (Kaiser Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 609/392-0900) DebtTraders reports that Kaiser Aluminum & Chemicals' 10.875% bonds due 2006 (KAISER3) are quoted between the prices 80 and 83. For real-time bond pricing, see http://www.debttraders.com/price.cfm?dt_sec_ticker=KAISER3 L-3 COMMS: S&P Likely to Up Rating to BB+ After Stock Offering -------------------------------------------------------------- Standard & Poor's anticipates raising its corporate credit rating on New York, New York-based L-3 Communications to double- 'B'-plus from double-'B' after the defense company completes its proposed offering of approximately $900 million in common stock and $750 million in senior subordinated debt and assuming that any pending acquisition activity is on a scale that can be accommodated by the company's enhanced financial resources. At the same time, the rating on the company's subordinated debt would be raised to double-'B'-minus from single-'B'-plus. The outlook would be stable. The company's ratings remain on CreditWatch with positive implications, where they were placed on June 6, 2002. The proceeds from the sale are expected to refinance and pay down debt related to the company's recent $1.1 billion purchase of Raytheon Corp.'s Aircraft Integration Services (AIS) division and restore the company's capital structure. The securities sale is expected to be completed by the end of June 2002. Ratings on L-3 Communications reflect a slightly below average business risk profile and somewhat elevated debt levels, but credit quality benefits from an increasingly diverse program base and efficient operations. Acquisitions are very important for revenue growth, and the balance sheet has periodically become highly leveraged because of debt-financed transactions. However, management has a good record of restoring financial flexibility by issuing equity. Some well-supported programs, with a high percentage of sole- source contracts, mitigate L-3's exposure to a challenging competitive environment. The firm provides secure communication systems, specialized communications devices, and flight simulation and training. Products include secure, high data rate communication systems, microwave components, avionics, telemetry, and instrumentation devices, and simulator training products and services. The company's revenues have grown rapidly through numerous acquisitions and the latest positions L-3 to better compete in the growing intelligence, surveillance, and reconnaissance market. L-3 acquired most of AIS on March 11, 2001, for $1.1 billion cash. This debt-financed deal, which followed a series of smaller acquisitions by L-3 in late 2001 and early 2002, substantially consumed the company's debt capacity prior to the announced equity offering. Debt to total capital was elevated to the mid-60% area at March 31, 2002, but will likely decline to under 50% by the end of 2002. After the proposed equity sale, L- 3 Communications will have the flexibility to pursue debt- financed acquisitions almost as large as AIS and will have over $400 million in cash and approximately $600 million in available borrowings under its credit facility. Goodwill accounts for almost 50% of L-3 Communications' total assets, but this is expected due to the nature of the high intellectual capital businesses it acquires. The company's earnings in 2002 will benefit from the elimination of goodwill amortization due to recent changes in accounting rules. LEGACY HOTELS: Acquires Sheraton Suites Calgary for $65 Million --------------------------------------------------------------- Legacy Hotels Real Estate Investment Trust (TSE: LGY.UN) announced that it has agreed to purchase the Sheraton Suites Calgary Eau Claire. This high quality hotel is in one of Calgary's prime downtown locations, at the heart of the city's vibrant Eau Claire Market shopping and recreation district. The 323-suite hotel has 12 meeting rooms with a total of 10,000 square feet and is connected to the financial district by an elevated walkway system. The hotel was developed, and is currently owned and managed, by Pacrim Developments Inc. of Halifax, Nova Scotia. The purchase price for the property is approximately $65 million and will be funded from existing cash balances. The transaction should be finalized in July subject to the satisfaction of a number of conditions. "We are very pleased to be adding this all-suite hotel to our portfolio", said Neil Labatte, President and Chief Operating Officer of Legacy. "After only three years of operation, the property is a leader in its market. With no additional hotel supply anticipated in the city in the near-term, we look forward to continued strength in future performance," Mr. Labatte added. Legacy anticipates that this acquisition will be immediately accretive to the portfolio. The acquisition will bring Legacy's portfolio to 22 luxury and first class hotels and resorts across Canada with approximately 10,000 guestrooms. The management companies of Fairmont Hotels & Resorts Inc. operate all of Legacy's properties. * * * * On the July 21, 2002 issue of the Troubled Company Reporter, Standard & Poor's lowered its long-term corporate credit and senior unsecured debt ratings on Legacy Hotels Real Estate Investment Trust to double-'B'-plus from triple-'B'-minus. At the same time, the ratings on the Toronto, Ontario-based company were removed from CreditWatch, where they were placed February 14, 2001. The outlook is stable. "The ratings actions reflect Legacy's weaker credit protection ratios and higher debt levels, which are no longer commensurate with Standard & Poor's investment-grade levels generally associated with hotel companies and hotel REITs that have above- average business risk profiles," said Standard & Poor's credit analyst Ron Charbon. "In addition, the credit enhancement provided by the trust's relationship with Canadian Pacific Ltd. (CPL) was reduced with the spin-off of CPL's other subsidiaries, leaving only the hotel business now renamed Fairmont Hotels & Resorts Inc. Although Fairmont has a very strong balance sheet and has assisted Legacy during the post-Sept. 11, 2001, period by taking units in lieu of distributions, Fairmont does not match the financial size and strength that CPL had prior to its breakup," Mr. Charbon added. The ratings on Legacy reflect the trust's strength in business risk, offset by weaker credit protection ratios. Legacy's credit strengths are its portfolio of high-quality luxury Fairmont Hotels in heritage properties across Canada; a highly regarded and seasoned management team; the demonstrated resilience of the Canadian hotel sector since September 11; the relatively strong operating results of Legacy's hotel portfolio; and the established market prominence of the trust's portfolio. LEVEL 8 SYSTEMS: Paul Rampel Resigns as Pres. But Stays on Board ---------------------------------------------------------------- Level 8 Systems, Inc. (Nasdaq: LVEL), a global provider of high performance eBusiness integration software, announced the resignation of Paul Rampel as President of the Company as part of a streamlining of operations, which included the recent closure of its California development facility and the sale of its Star/SQL and CTRC software products. Mr. Rampel will continue to serve on the Level 8 Board of Directors. John Broderick, the Company's Chief Financial Officer, will assume the additional role of Chief Operating Officer, responsible for day-to-day operations, reporting to Tony Pizi, the Chief Executive Officer. "Paul's contribution to the Company over the last eighteen months has been instrumental to the refocusing of the Company on our Cicero product," said Mr. Pizi. "We see the restructuring of our senior management as consistent with our objective to streamline operations and a consequence of right-sizing the Company to concentrate our resources on revenue generating activities in the financial services market." "Level 8 Systems has a tremendous opportunity with the Cicero(R) product. As a member of the Board of Directors, I look forward to continuing to represent the interests of shareholders and helping the management team secure the results of their hard work," said Mr. Rampel. The Company also announced the sale of the Star/SQL and CTRC products to Starquest Ventures, Inc., a California corporation and an affiliate of Mr. Rampel, for total consideration of $365,000 and the assumption by Starquest Ventures of certain maintenance liabilities associated with these products. Level 8 had acquired these products in 2000 when it acquired StarQuest Software, Inc. and had determined that they were not strategic to the Company's Cicero focused business plan. As this transaction was with a related party, a fairness opinion was obtained by the Company. The Company has used $150,000 of the proceeds of the sale to pay back borrowings from Mr. Rampel. Level 8 Systems, Inc. (Nasdaq: LVEL) is a global provider of high- performance, application integration software that enables organizations to extend the life of their IT investments and maximize the value of multiple business systems. Level 8 technologies, products, and services help industries such as financial services, telecommunications, utilities, travel and hospitality, and retail. For more information about Level 8 visit http://www.level8.com At March 31, 2002, Level 8 Systems' balance sheet shows a working capital deficit of about $6 million. LEVI STRAUSS: May 26 Balance Sheet Upside-Down by $972 Million -------------------------------------------------------------- Levi Strauss & Co. announced financial results for the second fiscal quarter ended May 26, 2002. Although sales were affected by difficult market conditions worldwide, the company turned in a good performance against several key financial measures and expects to meet its previously stated financial targets for the full year, including stabilizing sales. Second-quarter net sales declined 12 percent to $924 million compared to $1,044 million in the second quarter of 2001. Had currency rates remained constant at 2001 levels, net sales would have declined approximately 11 percent for the period. "We said the quarter would be tough and it was, but we are still on track to stabilize our sales by year-end," said chief executive officer Phil Marineau. "We were hit by stiff price competition in Europe, but our U.S. and Asia Pacific businesses met our expectations. Despite the difficult retail environment throughout most of our markets, we sustained solid profit margins, generated strong cash flow and brought down debt. "This is the inflection point for our company turnaround," said Marineau. "From now through the end of the year, we expect to see significant improvement in sales trends. We have excellent bookings with our retail customers, and are launching new products and marketing programs around the world to drive sales. This includes the introduction of lower-priced Levi's(R) jeans and Dockers(R) khakis in Europe and a revamped Levi's(R) jeans line in the United States. When you look at our products, retail relationships and operations, we are more competitive today than we have been in years." During the second quarter, the company announced the closure of six manufacturing plants in the United States and two plants in Scotland. These actions resulted in a one-time pre-tax restructuring charge of $150 million in the second quarter of 2002. This was partially offset by a $9 million reversal of restructuring charges taken in earlier years. The $150 million charge includes $26 million of non-cash asset write-offs, as well as costs related to items such as severance and outplacement services. Marineau said, "Increasing the variable nature of our cost structure will help us maintain our strong margins and cash flow while reinvesting in the business. The savings we realize as a result of these plant closures will allow us to direct more resources to the product, marketing and retail initiatives that are driving our business turnaround." Second-quarter gross profit, which includes restructuring related expenses of $30 million primarily for workers' compensation and pension enhancements, was $370 million, or 40.0 percent of sales. Excluding restructuring related expenses, gross profit in the second quarter of 2002 was $400 million, or 43.3 percent of sales, which compares to $453 million, or 43.3 percent of sales, in the second quarter of 2001. The strength of gross margin this quarter reflects the company's favorable sourcing arrangements. Operating loss for the quarter, including restructuring charges and related expenses of $171 million, was $82 million. Excluding restructuring charges and related expenses, operating income in the second quarter of 2002 declined 28 percent to $89 million compared to $124 million in the prior year period. EBITDA, which the company defines as operating income excluding depreciation and amortization, was a loss of $64 million, which includes restructuring charges and related expenses of $171 million. Excluding restructuring charges and related expenses, EBITDA in the second quarter of 2002 was $107 million, or 11.6 percent of sales, compared to $145 million, or 13.9 percent of sales, in the second quarter of 2001. Second-quarter net loss, including restructuring charges and related expenses of $171 million, was $81 million. Excluding restructuring charges and related expenses, second-quarter net income in 2002 declined 65 percent to $15 million versus $43 million in the second quarter of 2001. As of May 26, 2002, total debt stood at $1.86 billion, which compares to $1.96 billion as of the fiscal year ended November 25, 2001. At the same date, the company's total shareholders' equity deficit stands at about $972 million. "Strong control over costs and inventories helped us further reduce debt in what was a particularly challenging quarter. In fact, year-to-date, debt has been reduced by $100 million," said Bill Chiasson, chief financial officer. "For the full year, we continue to expect gross margins and EBITDA margins to be within our previously stated target ranges of 40-42 percent and 11-13 percent, respectively, before restructuring and related charges." Levi Strauss & Co. is one of the world's leading branded apparel companies, marketing its products in more than 100 countries worldwide. The company designs and markets jeans and jeans- related pants, casual and dress pants, shirts, jackets and related accessories for men, women and children under the Levi's(R) and Dockers(R) brands. MALAN REALTY: Annual Shareholders' Meeting Set for August 28 ------------------------------------------------------------ Malan Realty Investors, Inc. (NYSE: MAL), a self-administered real estate investment trust (REIT), has filed its preliminary proxy statement with the Securities and Exchange Commission in connection with its annual meeting of shareholders, tentatively scheduled for August 28, 2002 at the Community House in Birmingham, Michigan at 10:00 a.m. EDT. Included in the items for shareholder approval is a plan of complete liquidation of the company. On March 19, 2002, the board of directors voted to recommend a plan of liquidation to Malan's shareholders. The plan, which was approved by the board in June 2002, provides for the orderly sale of assets for cash or such other form of consideration as may be conveniently distributed to shareholders, payment of or establishing reserves for the payment of liabilities and expenses, distribution of net proceeds of the liquidation to common shareholders, and wind up of operations and dissolution of the company. The board believes that net proceeds to shareholders will range from $4.75 to $8.50 per share, dependent upon successful execution of the plan. "We believe that $8.00 per share is realistic based upon certain assumptions that we consider reasonable," said Jeffrey Lewis, president and chief executive officer of Malan Realty Investors. "This value is based on an orderly disposition of assets that reflects their underlying values; however, actual circumstances could differ from our assumptions and shareholders could receive more or less than the $8.00 estimate." The liquidation plan is expected to take up to 24 months to complete although it could take longer. Malan currently estimates total proceeds from the sale of properties, before selling costs, will be in the range of $223 million and $235 million and a minimum of $184 million in debt will be repaid. The estimated per-share range also includes income expected to be earned from properties during the liquidation process and expenses including advisory fees. Malan announced last week it had entered into contracts for the sale of 15 properties totaling approximately 2.1 million square feet of gross leasable area for a total of $94 million before debt repayment. The company is also in negotiations for the sale of 17 additional properties, with projected proceeds before debt repayment of approximately $50 million. The company also announced it is reducing the number of directors from seven to five. Edward T. Boutrous and Andrew Miller will not stand for reelection to the board of directors. "We sincerely appreciate the substantial time and effort given by Ed Boutrous and Andrew Miller," said Paul Gray, chairman of the board. "Their insights and judgment were very valuable. With the company now focused on liquidation, the board can be reduced in size." Malan Realty Investors, Inc. owns and manages properties that are leased primarily to national and regional retail companies. The company owns a portfolio of 57 properties located in nine states that contains an aggregate of approximately 5.4 million square feet of gross leasable area. Shareholders may obtain the preliminary proxy statement, when available, and any amendments to the proxy statement and other documents filed by Malan with the SEC for free at the SEC's Web site, www.sec.gov, or at the EDGAR Online Web site, http://www.edgar-online.com In addition, the final proxy statement will be mailed to each shareholder of record. The record date is yet to be established. Shareholders who wish to obtain additional copies of the proxy statement and any amendments to the proxy statement, free of charge, should direct their requests to Investor Relations, Malan Realty Investors, Inc., 30200 Telegraph Road, Bingham Farms, Michigan 48025 or telephone (248) 644-7100. MARCONI PLC: Expects Nasdaq to Delist Shares in Coming Weeks ------------------------------------------------------------ Further to its preliminary announcement statement on 16 May, 2002, Marconi announces that it continues to make good progress in its three-way restructuring discussions with its syndicate banks and an Ad Hoc Committee of its bondholders towards a consensual recapitalization of Marconi. The recapitalization process is likely to involve a debt for equity swap for a significant proportion of Marconi's 4.3 billion pounds sterling ($6.4 billion) of gross financial indebtedness, which the Board expects will lead to a very substantial dilution in value for existing equity holders. Marconi plc also announces that it expects to receive a notice in the coming weeks from the Nasdaq National Market that its shares, which currently trade on the Nasdaq in the form of American Depositary Receipts, will be delisted in accordance with Nasdaq rules relating to minimum ADR price requirements. Following the delisting from Nasdaq, Marconi's ADRs will be traded on the Over The Counter Bulletin Board. Marconi's ticker symbol on the OTC BB will remain MONI. Marconi's shares continue to trade on the London Stock Exchange under the symbol MONI. Mike Parton, Chief Executive of Marconi, said: "We continue our discussions as a part of a controlled process, to effect the recapitalization of Marconi's balance sheet at the earliest opportunity. We are confident that our banks and bondholders will continue to be supportive during the process and that Marconi will emerge from this process with a significantly improved balance sheet." Marconi plc is a global telecommunications equipment and solutions company headquartered in London. The company's core business is the provision of innovative and reliable optical networks, broadband routing and switching and broadband access technologies and services. The company's aim is to help fixed and mobile telecommunications operators worldwide reduce costs and increase revenues. The company's customer base includes many of the world's largest telecommunications operators. The company is listed on both the London Stock Exchange and NASDAQ under the symbol MONI. Additional information about Marconi can be found at http://www.marconi.com METALS USA: Signs-Up S.B. Millner to Market Miscellaneous Assets ---------------------------------------------------------------- Metals USA, Inc. and its debtor-affiliates sought and obtained approval to retain and employ the firm of Stuart B. Millner & Associates, Inc. to market the Debtors' miscellaneous assets, which include machinery and equipment. The Debtors had received a proposal from S.B. Millner to market the miscellaneous assets. They believe that the services that S.B. Millner proposed to provide would expedite the sale of the assets and will result in a higher and better value to the estate. The retention S.B. Millner was approved after the firm posted an auctioneer bond in the amount of $1,000,000 and after finding that the warehouse S.B. Millner will use to store Debtors' property is adequately protected by insurance. For providing the auctioneer's bond, S.B. Millner is allowed a reimbursement of up to $1,500. Johnathan C. Bolton, Esq., at Fulbright & Jaworski LLP in Houston, Texas, contends that liquidating the Debtors' miscellaneous assets, which are scattered across the country at various locations, would call for the Debtors' employees to expend time attempting to identify, contact and sell to potential purchasers on an ad hoc basis. This would be a less than effective process since the expertise of the Debtors' employees is in metal processing, not surplus asset liquidation. According to Mr. Bolton, S.B. Millner has over 20 years experience in the auction-liquidation industry in the United States and has liquidated the assets of over 900 industrial plants. The firm has been approved to act as the auctioneer and liquidator of assets by bankruptcy courts in New York (for Pan American Airlines), Illinois, Pennsylvania, and Missouri. It has also been approved by the U.S. Government to manage the liquidation of the Ravenna Ammunition facility in Ravenna, Ohio and by NASA for the liquidation of the Solid Rocket Motor assets in Iuka, Mississippi. In addition, S.B. Millner has managed the surplus assets for all of General Motors in North America and it's wholly owned subsidiary, Delphi Automotive Systems. Mr. Bolton submits that by employing S.B. Millner, the Debtors' employees, rather than expending time trying to market surplus assets, will be able to devote their efforts to performing under Metals USA's existing contracts and generating new business. Moreover, Millner's extensive experience and existing contacts in the industrial equipment liquidation should result in higher prices for the Debtors' miscellaneous assets. S.B. Millner's employment should also save the Debtors from paying for storage costs since the firm owns and operates an equipment warehouse in St. Louis, Missouri, where the Debtors' miscellaneous assets will stored free of charge until they are sold. The cost of transporting the assets to the warehouse will be borne by Metals USA. Mr. Bolton informs the Court that S.B. Millner will be compensated by 10% commission of the sales price, payable out of the proceeds of the sale of miscellaneous assets. S.B. Millner will also be authorized to charge purchasers a buyer's premium of 10% which will be its sole property and which will not be included in the selling price of the Miscellaneous Assets. The firm will collect all the proceeds from any sales and forward them to the Debtors, less commission, within 30 days after the closing of any sale. All marketing, advertising, administrative, sales, and out-of-pocket expenses and costs will be shouldered by Millner. Mr. Bolton goes on to say that if the assets are sold through a sale privately negotiated by S.B. Millner, the Debtors will employ the Miscellaneous Asset Sales Procedures and file and serve on the United States Trustee, counsel for the Bank Group, the unsecured Creditors Committee and any interests claimants, a Notice of Intent to Sell with the requisite information. In the event it is determined that the sale of certain assets through a public auction would result in a higher price, the Debtors will file a separate motion seeking approval for that sale. Mr. Bolton further assures the Court that S.B. Millner represents or holds no adverse interests against the Debtors or their estates and is in no way connected with any parties-in- interest in matters relating to these Chapter 11 cases. (Metals USA Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900) METALS USA: Committee Agrees to Terms of Plan of Reorganization --------------------------------------------------------------- Metals USA, Inc. (OTC Bulletin Board: MUIN), a metals distributor and processor headquartered in Houston, announced an agreement has been reached with the Official Committee of Unsecured Creditors (which is comprised of holders of the Company's 8.625% Senior Subordinated Notes and trade creditors) on the terms of a Plan of Reorganization, subject to definitive documentation and obtaining the required approvals and exit financing. As previously reported, Metals USA filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code on November 14, 2001. Under the agreed terms, the Plan would provide that the company's existing equity will be extinguished. The company's unsecured creditors (other than creditors with de minimis/convenience class claims) will receive a publicly traded equity in the form of 100% of the new common stock in the reorganized company to discharge approximately $380 million of unsecured debt. Holders of existing equity will receive five- year warrants to purchase an aggregate of up to fifteen percent of the new common stock of the reorganized company. The warrants will have an exercise price calculated at full recovery for all unsecured creditors. The company cannot provide any assurance as to whether a market will develop for the warrants. All currently outstanding options and warrants of the company will be cancelled on the effective date of the Plan. The Plan would provide for the establishment of a new equity incentive plan for employees to be administered by the Board of Directors of the newly reorganized company. Additionally, the Board of Directors of the reorganized company will consist of five or seven members at the discretion of the Committee, which will include one executive officer from the reorganized company. J. Michael Kirksey, Chairman, President & Chief Executive Officer of Metals USA, stated, "We have been working diligently with the Committee to move through the bankruptcy process as prudently and expeditiously as possible. Consummation of this agreement, when combined with the successful completion of the previously announced asset sales, will position the company to continue to be one of the largest buyers of metals in the United States with a credit-worthy financial position." Metals USA, Inc. is a leading North American metals distributor and processor. Metals USA, Inc. provides a wide range of products and services in the Carbon Plates and Shapes, Flat Rolled Products, and Building Products markets. For more information, visit the company's Web site at http://www.metalsusa.com METROCALL INC: Brings-In Alston & Bird as FCC Regulatory Counsel ---------------------------------------------------------------- Metrocall, Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to give them authority in the retention of Alston & Bird, LLP as special FCC Counsel. The Debtors tell the Court that they desire to retain Alston & Bird as their attorneys because of its extensive experience and knowledge in the field of telecommunications regulatory and transactional law including FCC compliance, licensing and related issues. Subject to the Court approval, compensation will be payable to Alston & Bird on an hourly basis plus reimbursement of actual, necessary expenses and other charges incurred by Alston & Bird. The principal attorneys and paralegals presently designated to represent the Debtors and their current standard hourly rates are: a) Frederick M. Joyce $460 per hour b) Christine McLaughlin $370 per hour c) Ronald Quirk $335 per hour d) Marianne Casserly $245 per hour e) Ellen Traupman $220 per hour The professional services that Alston & Bird will render to the Debtors include: a) to provide legal advice with respect to their powers and duties as debtors in possession with respect to special telecommunications matters, and state and federal regulatory compliance, attending these chapter 11 cases and Debtors' continued operations pending resolution of this case in the continued operation of their businesses and management of their properties; b) to prepare on behalf of the Debtors necessary application, motions, reports and other legal papers relating to the Debtors' FCC licenses and compliance of regulatory provisions in respect thereof; c) to appear in Court, as special counsel on discreet matters dealing with the Debtors' FCC licenses; and d) to perform all other legal services for the Debtors that may be necessary and proper in these proceedings with respect to special telecommunications matters and regulatory compliance. The Debtors submit that, and according to the affidavit of Mr. Frederick M. Joyce, Alston & Bird is a "disinterested person" as defined in the Bankruptcy Code. 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 reports that Metrocall Inc.'s 10.375% bonds due 2007 (MCALL2) are trading between the prices 4 and 6. See http://www.debttraders.com/price.cfm?dt_sec_ticker=MCALL2for real-time bond pricing. MICROFORUM INC: Settles Claims Disputes with Deere and Dominion --------------------------------------------------------------- Microforum Inc. (TSE: MCF) has settled its disputes with Deere Credit Services, Inc. and Dominion Citrus Limited. Microforum has agreed to pay Deere the sum of US$100,000 and provide a royalty-free license of certain CALMS software previously developed by the Company and Deere has agreed to withdraw its previous claim for US$3 million. Deere will be permitted to use the software for internal purposes only and may not resell it to any external third parties. In exchange, Deere has agreed to release the Company from any liability relating to a work order entered into pursuant a Master Development and License Agreement dated May 25, 2001 between Microforum and Deere and agreed not to make a claim pursuant to the Company's Claims Procedure Order process in accordance with its Companies' Creditors Arrangement Act ("CCAA") proceedings. Microforum has agreed to accept Dominion's reduced claim of $97,223 for voting and distribution purposes pursuant to the Company's Claims Procedure Order process in accordance with its CCAA proceedings. The Company's settlement arrangements with Deere and Dominion do not alter the Plan of Compromise or Arrangement previously filed with its creditors. The meetings for secured and unsecured creditors are scheduled for June 25, 2002 at 10:00 a.m. (Toronto time) and 12:00 p.m. (Toronto time), respectively, at the offices of Microforum Inc., 150 Ferrand Drive, 10th Floor, Toronto, Ontario. Information regarding Microforum's CCAA proceedings can be found on Microforum's Web site http://www.microforum.com Established in 1987, Microforum sells software solutions to organizations that seek a competitive edge. Microforum is listed on The Toronto Stock Exchange (TSE: MCF). NAVISTAR: Canadian Operation Will Resume Using Temporary Workers ---------------------------------------------------------------- To continue to meet customer demand, International Truck and Engine Corporation announced that it will resume production of premium conventional heavy trucks with a temporary workforce at its Chatham, Ontario assembly plant, as soon as possible. The company will continue to draw upon production at its plant in Escobedo, N.L., Mexico. International Truck and Engine is the operating company of Navistar International Corporation (NYSE: NAV). The Canadian Auto Workers union Local 127 went on strike June 1. The strike affects approximately 645 CAW-represented production and maintenance employees at International's Chatham plant. International had held talks with the CAW as recently as yesterday, but those ended late in the day, and there are no new talks scheduled. The company said it is still open to a dialogue with the union in order to return to productive negotiations, achieve a new labor contract and resume normal operations at Chatham with CAW members. "We had hoped to have an agreement by now, and have made every effort to do so, but we were not able to reach an agreement," said Steve Keate, president, truck group. "To meet the needs of our customers, therefore, we now need to activate another element of our contingency plan, which is to resume production at Chatham now, using temporary workers. We would prefer to resume production with our regular Chatham employees, but we must continue to meet our customer commitments." The company also said it is working closely with local authorities on plans to resume production using temporary workers. The use of temporary workers has been permitted by Ontario law since 1995. Negotiations towards a new labor agreement began on April 26. However, in January, the company had notified the CAW of its need to reduce costs at Chatham by $28 million in order to make the plant competitive. The company was subsequently able to identify half that amount. Prior to the strike, production at Chatham had been averaging 39 trucks per day on one shift, and it is expected to ramp up to a level of 60 per day. The Escobedo plant will continue to increase production to 58 units per day. In addition to heavy trucks, International Truck and Engine is a leading producer of mid-range diesel engines, medium trucks, severe service vehicles, and a provider of parts and service sold under the Internationala brand. IC Corporation, a wholly owned subsidiary, produces school buses. International also is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. * * * As previously reported, Fitch Ratings has downgraded the senior unsecured debt rating for Navistar International Corporation to 'BB+' from 'BBB-' and the senior subordinated debt rating to 'BB-' from 'BB'. The Outlook remains Negative. The ratings downgrade reflects the ongoing industry downturn in Navistar's core medium and heavy-duty truck markets in North America. After hitting a peak in fiscal year 1999 at 431.6 thousand units in Class 5-8 trucks, industry demand fell a precipitous 34% over the next two years to 284.8 thousand units in FY 2001. Navistar positioned for the cyclical downturn by building up liquidity from new debt issuances allowing for a manufacturing operations cash balance of $806 million at FYE 2001 ended Oct. 31, 2001. NEW CENTURY EQUITY: Commences Trading on Nasdaq SmallCap Market --------------------------------------------------------------- New Century Equity Holdings Corp. (Nasdaq: NCEH) announced the approval by The Nasdaq Stock Market, Inc. of its application to transfer the listing of its shares of common stock from the Nasdaq National Market to the Nasdaq SmallCap Market. New Century's common stock will commence trading on the Nasdaq SmallCap Market effective June 21, 2002. The Company's trading symbol will continue to be "NCEH". As a result of its transfer to the Nasdaq SmallCap Market, New Century's delisting determination has been extended until August 13, 2002. Should the Company's common stock not trade at a price of $1.00 per share or higher for a minimum of 10 consecutive trading days by August 13, 2002, then the Company anticipates, under the current Nasdaq Rules, to be eligible for an additional 180-calendar day grace period, or until February 10, 2003. There can be no assurance that New Century will be able to meet the minimum maintenance requirements during the extended grace period or that if it does, it will remain in compliance with the applicable continued listing requirements. New Century Equity Holdings Corp. (Nasdaq: NCEH) is a holding company focused on high growth, technology-based companies and investments. The Company's holdings include its investments in Princeton eCom Corporation, Tanisys Technology, Inc., Sharps Compliance Corp. and Microbilt Corporation. New Century -- http://www.newcenturyequity.com-- is the lead investor in Princeton eCom -- http://www.princetonecom.com-- a leading application service provider for electronic and Internet bill presentment and payment solutions and Tanisys Technology, Inc. - - http://www.tanisys.com-- a developer and marketer of semiconductor testing equipment. New Century is also a financial investor in Sharps Compliance Corp. -- http://www.sharpsinc.com -- a leading provider of cost-effective logistical and training solutions for the healthcare, hospitality and residential markets and Microbilt Corporation -- http://www.microbilt.com-- a leader in credit bureau data access and retrieval which provides credit solutions to the Financial, Leasing, Health Care, Insurance, Law Enforcement, Educational and Utilities industries. New Century Equity Holdings Corp. is headquartered in San Antonio, Texas. NEWCOR INC: Delaware Court Sets July 9 General Claims Bar Date -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware fixes July 9, 2002, as the General Claims Bar Date by which creditors of Newcor, Inc., must file proofs of claim or be forever barred from asserting that claim. The Court rules that each person or entity (except governmental units) that wishes to assert a claim against the Debtors that arose before the Petition Date, shall file a written proof of that claim and must be received on or before 4:00 p.m. of the General Claims Bar date by: The Court adds that the Government Bar Date, wherein all governmental units' proof of claim must be received, is on August 23, 2002 at 4:00 p.m. Any entity holding a Rejection Damages Claim shall be required to file a proof of their claims on the date indicated in any order authorizing the rejection of such contract or the later of: i) the General Bar Date or ii) 30 days after the entry of the applicable Rejection Order. Proofs of claim are not required to be filed anymore if they are: a) claims against one or more of the Debtors that has already properly filed with the Court; b) claims not listed as "disputed," "contingent" or "unliquidated" in the Schedules; and who agrees with the nature, classification and amount of such claim set forth in the Schedules; c) claims previously has been allowed by, or paid pursuant to, an order of this Court; d) any entity that has a claim which is limited exclusively to a claim for the repayment by the applicable Debtors. Newcor, Inc., along with its subsidiaries, design and manufacture a variety of products, principally for the automotive, heavy-duty, capital goods, agricultural and industrial markets. The Company filed for chapter 11 protection on February 25, 2002 Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl Young & Jones P.C. represents the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, it listed $141,000,000 in total assets and $181,000,000 in total debts. PAPER WAREHOUSE: Defaults on Convertible Subordinated Debentures ---------------------------------------------------------------- Paper Warehouse, Inc. (Nasdaq:PWHS), has not yet received the consents it needs from debenture holders of its convertible subordinated debentures to waive and amend the related trust indenture. Without the consents, an event of default has occurred under the trust indenture, which has resulted in a default under the company's revolving line of credit. On May 28, 2002, the Company mailed to the debenture holders a consent solicitation statement asking the holders to waive the existing covenant breach under the indenture and to approve certain amendments to the indenture before June 12, 2002. As of June 12, 2002, the end of the initial consent solicitation period, the Company had not received the consents it needed from the debenture holders to waive the existing covenant breach under the indenture. The resulting default under the indenture in turn caused an event of default under the Company's revolving line of credit agreement. The Company is prohibited under the indenture from making any payments on the debentures if there is a default under the Company's revolving line of credit and the lender under the revolving line of credit provides notice of the default to the Company. On June 17, 2002, the lender confirmed to the Company that it was considering providing such a notice to the Company. The Company, therefore, determined not to make the interest payment that was due on June 17, 2002 until it received final confirmation from the lender as to whether it would notify the Company of the default under the revolving line of credit. On June 19, 2002, the lender under the Company's revolving line of credit notified Paper Warehouse of the resulting default under the revolving line of credit agreement. Although the Company has the funds available to make this interest payment, it is not allowed to make any payment under the terms of the indenture until the defaults under both the indenture and the revolving line of credit are cured, waived or cease to exist and its lender under the revolving line of credit permits the Company to do so. As soon as the events of default are cured, and Paper Warehouse's lender consents, the Company can resume interest payments. On June 13, 2002, the Company's Board of Directors agreed to extend the consent solicitation period for an additional 30 days, or until July 12, 2002. In addition to this extension, the Company is continuing to evaluate its options to remedy the existing defaults under the indenture and the revolving line of credit agreement. However, there can be no assurance that the Company will be able to remedy these defaults. "We are disappointed that not enough of our debenture holders have responded to our request to waive the covenant breach and amend the indenture," said Yale T. Dolginow, president and chief executive officer. "We believe that the proposed waiver and amendments are clearly in the best interest of our debenture holders and shareholders," Dolginow continued. "We have the funds to make this interest payment, and we continue to pay our vendors and other creditors in the ordinary course of business," Mr. Dolginow added. Paper Warehouse specializes in party supplies and paper goods and operates under the names Paper Warehouse, Party Universe, and www.PartySmart.com. PartySmart.com can be accessed at http://www.PartySmart.com Paper Warehouse stores offer an extensive assortment of special occasion, seasonal and everyday party and entertainment supplies, including paper supplies, gift wrap, greeting cards and catering supplies at everyday low prices. As May 3, 2002, the company had 141 retail locations (87 company-owned stores and 54 franchise stores) conveniently located in major retail trade areas to provide customers with easy access to its stores. The Company's headquarters is in Minneapolis. PLANVISTA: DePrince, Race & Zolla Discloses 35.5% Equity Stake -------------------------------------------------------------- DePrince, Race & Zolla Inc. beneficially own 5,920,200 shares of the common stock of PlanVista Corporation, representing 35.5% of the outstanding common stock of the Company. DePrince, Race & Zolla Inc. is a Florida corporation. Gregory M. DePrince, John D. Race, and Victor A. Zollo, Jr. all own shares of PlanVista in their individual capacity. Mr. DePrince owns 5,971,500 shares (35.68%), Mr. Race owns 6,107,900 (36.50%), and Mr. Zolla owes 6,006,780 (35.90%). DePrince, Race & Zolla Inc. directed the purchase of 5,920,200 shares of PlanVista for its investment advisory clients for an aggregate purchase price of $49,299,504. All of the shares were paid for by cash assets in the respective clients' accounts. Of these shares, 553,500 shares with an aggregate purchase price of $3,797,712 are restricted. In addition, DePrince, Race & Zolla Inc. directed the purchase of 20,000 shares of the Company for its Employee Profit Sharing Plan for an aggregate purchase price of $62,900. The foregoing persons in the aggregate often own beneficially more than 5% of a class of equity securities of a particular company. Although one or more of the foregoing persons are treated as institutional investors for purposes of reporting to the SEC their beneficial ownership on the short-form Schedule 13G, the holdings of those who do not qualify as institutional investors may exceed the 1% threshold presented for filing on Schedule 13G or implementation of their investment philosophy may from time to time require action which could be viewed as not completely passive. In order to avoid any question as to whether their beneficial ownership is being reported on the proper form and in order to provide greater investment flexibility and administrative uniformity, these persons have decided to file their beneficial ownership reports on the more detailed Schedule 13D form rather than on the short-form Schedule 13G and thereby to provide more expansive disclosure than is necessary. Effective October 10, 2000 John D. Race became a member of the Board of Directors of PlanVista. The number of shares as to which each person has: (i) sole power to vote or direct the vote: DRZ: none Gregory M. DePrince: 31,300 John D. Race: 167,700 Victor A. Zollo, Jr.: 66,580 (ii) shared power to vote or direct the vote: DRZ: 5,940,200 Gregory M. DePrince: 5,940,200 John D. Race: 5,940,200 Victor A. Zollo, Jr.: 5,940,200 (iii) sole power to dispose or to direct the disposition: DRZ: none Gregory M. DePrince: 31,300 John D. Race: 167,700 Victor A. Zollo, Jr.: 66,580 (iv) shared power to dispose or direct the disposition: DRZ: 5,940,200 Gregory M. DePrince: 5,940,200 John D. Race: 5,940,200 Victor A. Zollo, Jr.: 5,940,200 These persons may be deemed to share power to vote and dispose of shares referred to as a result of control relationships (Gregory M. DePrince, John D. Race and Victor A. Zollo, Jr. with respect to all of the DRZ shares) and pursuant to investment advisory relationships with advisory clients. The shares reported above for sole power are attributable to investments by Gregory M. DePrince, John D. Race and Victor A. Zollo, Jr. on their own behalf. These three disclaim beneficial ownership of the shares for which they share power. PlanVista (formerly HealthPlan Services) provides cost- containment services to health care payers and providers, including integrated network access, electronic claims repricing, and claims and data management services. The company is selling its third-party administration and managing general underwriter units to Sun Capital Partners; it had already shed its workmens'- and unemployment-compensation businesses. Third- party administration had accounted for a majority of revenue, but that was declining, and New England Financial Life and Ceres Group alone accounted for more than 40% of revenue. PLANVISTA: Prepared Registration Statement for 1.3+MM Shares ------------------------------------------------------------ PlanVista Corporation, in a public offering of common stock of the Corporation, is offering for sale an aggregate number of shares of the Corporation's common stock (number yet to be determined), and certain of its existing stockholders are offering for sale an aggregate of 1,363,821 shares of the Company's common stock in a firm commitment underwriting. PlanVista will not receive any of the proceeds from the shares of common stock sold by the selling stockholders. The Company's common stock trades on the New York Stock Exchange under the ticker symbol "PVC". The last reported sales price of PlanVista's common stock on the New York Stock Exchange on May 23, 2002 was $3.75 per share. On March 31, 2002, the company reported a working capital deficit of about $7 million and a total shareholders' equity deficiency of about $50 million. PROVELL: Seeks Court Approval of $21 Million Credit Facility ------------------------------------------------------------ Provell, Inc. and its debtor-affiliates sought and obtained interim authority to secure post-petition financing of up to $2 million from the U.S. Bankruptcy Court for the Southern District of New York. The Debtors recognize that their business operations require sufficient levels of trade credit and working capital to fund and support ordinary business expenditures, including outbound telemarketing expenses, customer refunds and rebates, printing and direct mailing costs, payroll, leasehold commitments and other necessary overhead costs. Without access to an adequate financing and credit facility, the Debtors will not have sufficient liquidity to sustain business operations which could bring immediate and irreparable harm to the Debtors' creditors and estates. The Debtors want the Court to enter Borrowing Orders authorizing them to obtain postpetition financing for approximately $21 million under an agreement with Foothill Capital Corporation, as agent, and the banks and other financial institutions as Lenders. The Debtors ask the Court to grant the Lenders superpriority administrative expense claim status and a first priority lien on and security interest in all assets of the Debtors. The Debtors argue that their reorganization efforts hinge on access to adequate postpetition financing because: -- the Pre-Petition Lenders were permitted to, and did, sweep the Debtors' cash daily up to the Petition Date, the Debtors have no significant cash on hand as of the Petition Date; -- the nature of the Debtors' membership business, requires sufficient liquidity to satisfy their ongoing cash requirements to fund returns, pay vendors, pay employees, pay landlords and utilities and to fund the myriad other ordinary course day-to-day expenditures. The Debtors add that absent immediate access to credit pursuant to the proposed DIP Facility, they will encounter a severe disruption in their acquisition business and membership sales, resulting in a corresponding decline in the Debtors' revenue. The Debtors' suppliers, vendors and other creditors are likewise depending on the immediate approval of the DIP Facility for assurance that they will be paid on a continuous and timely basis. The Debtors anticipate that the DIP Facility will improve their liquidity and help stabilize their operations. Upon entry of the Final Order, any remaining Pre-Petition Obligations will be refinanced and the Debtors will be able to borrow up to $5 million, plus the aggregate outstanding balance of the Pre-Petition Obligations as of the Petition Date. In connection with the DIP Facility, the Debtors will pay: (1) a facility fee of 2.0% of an amount equal to (x) $5 million plus (y) the aggregate outstanding balance of loans and other obligations outstanding under the Pre-Petition Loan Agreement on the Petition Date. The facility fee shall be fully earned and payable on the Closing Date and shall be nonrefundable; (2) a $5,000 monthly, nonrefundable servicing fee payable through the date on which all of the Obligations are paid in full in accordance with the terms of the Definitive Financing Documents; and (3) other customary fees, costs and expenses required to be paid pursuant to the Definitive Financing Documents. Provell, Inc. develops, markets and manages an extensive portfolio of membership and customer relationship management programs that provide discounts and other benefits to members in the areas of shopping, travel, hospitality, entertainment, health/fitness, finance, cooking and home improvement. The company filed for chapter 11 protection on May 9, 2002. Alan Barry Hyman, Esq., Jeffrey W. Levitan, Esq., David A. Levin, Esq. at Proskauer Rose LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they listed $40,574,000 in total assets and in $82,964,000 total debts. PSINET: Court Grants Goldin's Motion to Extend Claims Bar Date -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York entered an order directing that the bar date with respect to claims that may be brought by the Holdings Trustee on behalf of PSINet Consulting Solutions Holdings, Inc. and PSINet Consulting Knowledge Services, Inc. against the PSINet Entities is extended through and including August 5, 2002. * * * * Harrison J. Goldin, Chapter 11 Trustee for PSINet Consulting Solutions Holdings, Inc. (Holdings) and PSINet Consulting Solutions Knowledge Services, Inc. (Knowledge) is investigating the nature and extent of Holdings' claims against PSINet. The previously extended Bar Date for filing the Intercompany Claim is June 5, 2002. The Trustee asks the Court to authorize, pursuant to Fed. R. Bankr. P. 3003(3) and 9006(b), an extension of this Bar Date through and including August 5, 2002. The Trustee tells the Court that his investigation of the nature and extent of the claim has been delayed because PSINet and its counsel had refused to turn over to the Trustee documents and information to allow the Trustee to complete his investigation. In response to repeated requests for assistance and information leading up to a February 3, 2002 face-to-face meeting, PSINet's counsel, Wilmer Cutler & Pickering, claimed that it and co- counsel, Nixon Peabody L.L.P. were hopelessly conflicted and thus unable to respond to the Trustee's requests. Moreover, it is the Trustee's understanding, based on conferences between counsel, that PSINet's document production is ongoing, is not yet complete, and that additional documents are forthcoming from PSINet, Wilmer Cutler & Pickering, Nixon Peabody, and PricewaterhouseCoopers. Nevertheless, the Trustee notes that PSINet has admitted in certain documentation previously provided to the Trustee that such claims exist. The Trustee tells the Court that, pursuant to the Court's 2004 Order given on March 26, 2002, -- PSINet produced on or about April 7, 2002, 157 boxes of Holdings' own documents that had been in storage since PSINet wound down Holdings' operations; -- on April 29 and 30, 2002, the Trustee and his counsel conducted certain interviews of PSINet's officers and PSINet and Holdings' jointly-retained counsel concerning operational and administrative issues affecting Holdings; -- on or about May 4, 2002, PSINet made available for inspection certain documents, which it had previously produced, concerning a securities litigation. These documents provided mostly background information on PSINet's merger with Holdings and were, for the most part, not directly responsive to the Trustee's 2004 Motion nor to the letter dated April 24, 2002 from the Trustee's counsel to Paul, Weiss, Rifkind, Wharton & Garrison prioritizing the Trustee's document requests. -- During the week of May 13, 2002, PSINet also produced approximately 11 boxes of Holdings' own documents. -- On May 20, 2002, PSINet turned over an additional 27 boxes of Holdings' own documents relating to prepetition asset and stock dispositions. -- On or about May 8, 2002, Wilmer Cutler & Pickering produced 2 boxes of Holdings' own pleadings. The Trustee believes that, other than receiving Holdings' own pleadings and general background information concerning PSINet's acquisition of Holdings, which had previously been produced in the securities litigation, the Trustee has not received sufficient documents to determine the extent of Holdings' claims against PSINet. In particular, the Trustee has not been able to examine in detail Holdings and/or PSINet's books and records, including the general ledger and the companies' complete journal or the records of Holdings' former attorneys and accountants to determine the full extent of claims Holdings may have against PSINet. Furthermore, the Trustee has not had the benefit of reviewing any investigation which may have been performed by Holdings' former counsel into potential claims against PSINet. The Trustee believes that such claims may, in part, be set forth in the notice of circumstances filed by Nixon Peabody L.L.P with Holdings' insurance carrier. The Trustee also tells the Court that no privilege log has been filed as agreed by the parties at the April 22, 2002 status conference with the Court. Accordingly, until the Trustee has received the benefit of the documents that this Court ordered produced in the 2004 Order, the Trustee should not be forced to file a proof of claim prematurely. For the reasons stated above, and pursuant to Fed. R. Bankr. P. 3003(3) and 9006(b), the Trustee hereby requests an additional sixty (60) days to file its proof of claim through and including August 5, 2002, The Trustee represents that, until he has received the benefit of the documents that this Court ordered produced in the 2004 Order, the Trustee should not be forced to file a proof of claim prematurely. Therefore, the Trustee believes that there is sufficient cause for the Court to grant a further extension of time for the Trustee to file a proof of claim through and including August 5, 2002. (PSINet Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 609/392-0900) QUALITECH STEEL: Inks Pact to Sell All Assets to Nucor for $37MM ---------------------------------------------------------------- Nucor Corporation (NYSE: NUE) has entered into an agreement to purchase substantially all of the assets of Qualitech Steel SBQ LLC for $37 million. The agreement is subject to satisfactory resolution by Nucor of due diligence, regulatory approvals, tax matters, and utility, equipment and other contracts. The timing for start-up of this facility will depend upon how quickly regulatory approvals can be obtained. Nucor is in discussions with Mitsubishi Corporation concerning an equity participation in the venture. Mitsubishi would assist in providing technology to allow the venture to quickly produce high quality special bar quality steel suitable for the most demanding applications. "The addition of the Qualitech assets will be a strong complement to our long products strategy and will make Nucor a significant participant in the special bar quality steel market," said Dan DiMicco, Nucor's Vice Chairman, President and Chief Executive Officer. The Qualitech SBQ Bar Mill facility, which originally began operations in 1998, is located in Pittsboro, Indiana and has an annual capacity of approximately 500,000 tons. Nucor is the largest steel producer in the United States and is the nation's largest recycler. Nucor and affiliates are manufacturers of steel products, with operating facilities in ten states. Products produced are: carbon and alloy steel -- in bars, beams, sheet and plate; steel joists and joist girders; steel deck; cold finished steel; steel fasteners; metal building systems; and light gauge steel framing. Qualitech, weighed-down by cheap imported steel streaming in the U.S. markets, shutdown its operations in early 2001 and laid off its workforce. Its founders wound up in bankruptcy court. REPUBLIC TECH: Court Okays Cartersville Plant Sale to Ameristeel ---------------------------------------------------------------- Republic Technologies International LLC, the nation's leading producer of special bar quality steel, announced that the U.S. Bankruptcy Court in Akron, Ohio, has approved the sale of its cold-finished bar plant in Cartersville, Georgia, to AmeriSteel Corp., Tampa, Florida, a majority-owned affiliate of Gerdau, S.A. AmeriSteel plans to continue production at the 92,000-square- foot facility, with the current workforce. Cartersville has an annual production capacity of 60,000 tons. The transaction is expected to be completed by the end of the week. Republic Technologies International, based in Fairlawn, Ohio, is the nation's largest producer of high-quality steel bars. With nearly 4,000 employees and 2001 sales of approximately $1 billion, Republic was included in Forbes magazine's 2001 and 2000 lists of the largest U.S. private companies. Republic has plants in Canton, Massillon and Lorain, Ohio; Beaver Falls, Pennsylvania; Chicago and Harvey, Illinois; Gary, Indiana; Lackawanna, N.Y.; and Hamilton, Ontario. The company's products are used in demanding applications in the automotive, agricultural, aerospace, off-highway, industrial machinery and energy industries. RICA FOODS: Antonio Ecevarria Discloses 17% Equity Stake -------------------------------------------------------- Comercial Angui, S.A., a Costa Rica company, and the sole shareholder of Angui, Mr. Antonio Echeverria of Costa Rica, beneficially own 2,238,655 shares of Rica Foods, Inc., representing 17.0% of the outstanding common stock of Rica Foods. The Company and Mr. Echeverria hold sole power to both vote or direct the voting of, and to dispose of, or direct the disposition of the stock so held. Rica Foods, Inc., through its wholly owned subsidiaries, is the largest poultry producer in Costa Rica. It posted a working capital deficiency of about $11 million on March 31, 2002. ROHN INDUSTRIES: Fails to Maintain Nasdaq Listing Standards ----------------------------------------------------------- ROHN Industries, Inc. (Nasdaq: ROHN), a global provider of infrastructure equipment for the telecommunications industry, intends to take the actions necessary to maintain the Company's listing on the Nasdaq National Market. The Company stated that it has received a letter dated June 13, 2002, from The Nasdaq National Market, Inc. advising the Company that for the last 30 consecutive trading days, the price of the Company's common stock has closed below the minimum $1.00 per share requirement for continued listing on the Nasdaq National Market. The Company has until September 11, 2002 to regain compliance. Nasdaq notified the Company that if the bid price of the Company's common stock does not close at $1.00 per share or more for a minimum of 10 consecutive trading days before September 11, 2002, Nasdaq will provide the Company with written notification that the Company's securities will be delisted from the Nasdaq National Market. If that were to occur, the Company may at that time appeal the delisting to a Nasdaq Listing Qualifications Panel. The Company indicated that one of the actions it is considering to regain compliance with the requirements for continued listing on the Nasdaq National Market is seeking shareholder approval to implement a reverse stock split to increase the Company's share price above $1.00 per share. If the Company determines to proceed with a reverse stock split, it will determine the exact terms and timing of the reverse stock split and announce that information once it is finalized. ROHN Industries, Inc. is a leading manufacturer and installer of telecommunications infrastructure equipment for the wireless and fiber optic industries. Its products are used in cellular, PCS, fiber optic networks for the Internet, radio and television broadcast markets. The company's products include towers, equipment enclosures, cabinets, poles and antennae mounts, as well as design and construction services. ROHN has manufacturing locations in Peoria, Ill.; Frankfort, Ind.; and Bessemer, Ala. ROWE COMPANIES: Completes Debt Workout & Cuts Down Debt by $14MM ---------------------------------------------------------------- The Rowe Companies (NYSE: ROW), a leading furniture manufacturer and retailer, reported operating results for the second quarter ended June 2, 2002. Net shipments increased 2.9%, to $80.3 million, compared with $78.0 million for the same period last year. Gross profit margins increased to 34.5% for the second quarter, up from 31.5% for the same period last year. The Company recognized $2.3 million in restructuring charges, store closing costs and certain other expenses in the second quarter related to the consolidation of its two retail units and store closings. Excluding these charges, net earnings would have amounted to $95 thousand compared to a loss of $4.9 million for the prior year period. Including the restructuring charges and other expenses, net losses for the second quarter amounted to $1.4 million. For the six-month period, net shipments increased 2.2%, to $161.9 million from $158.5 million for the prior year. Gross profit margins increased to 34.1% from 32.2%. Excluding the $2.3 million in restructuring charges, store closing costs and certain other expenses, net income for the six-month period ended June 2, 2002 would have amounted to $794 thousand. This compares to a loss of $5.7 million for the corresponding prior year period. Including the restructuring charges and other expenses, net losses for the six-month period amounted to $667 thousand. "We continue to see tremendous improvement in our manufacturing operations, from greater sales penetration, production efficiencies and improved quality control," said Gerald M. Birnbach, Chairman and President. "Our retail operations continue to struggle somewhat due to the mixed economic situation, but progress has been made in reducing overall costs. As we complete the consolidation of our retail units in the third quarter, we expect improving results in the second half of the year, particularly in the fourth quarter. Finally, we completed the restructuring of our financing arrangements, and we have also reduced our total outstanding debt by approximately $14.1 million. We still have a long way to go, but we are pleased with the progress to date. We will continue to work to further improve our operating results and financial health." The Rowe Companies is comprised of Rowe Furniture, a major manufacturer of quality upholstered furniture; The Mitchell Gold Co., an upholstered furniture manufacturer serving some of the nation's leading specialty retailers; and Storehouse, Inc., a 60-store retail furniture chain doing business under both the Storehouse and Home Elements names. SAFETY-KLEEN: Pursuing $2.6MM Preference from MP Environmental -------------------------------------------------------------- Safety-Kleen Services, represented by Jeffrey C. Wisler of Connolly Bove Lodge & Hutz of Wilmington, brings suit against MP Environmental Services, 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 MPES on dates in March, April, May and June, 2000, within 90 days of the Petition Date, in at least amounts totaling $2,646,049. These transfers were on account of an antecedent debt owed by one or more of the Debtors to MPES, and the transferring Debtors were insolvent at the times of the transfers. As a result of these transfers, MPES 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 MPES 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 MPES in the amount of $2,646,049, plus pre- and post-judgment interest, and their costs. Further, the Debtors want MPES' claims against these estates disallowed if MPES refuses to return the transfers. (Safety-Kleen Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., 609/392-0900) SEPP'S GOURMET: Starts Initiatives to Maximize Shareholder Value ---------------------------------------------------------------- In February 2002 Sepp's Gourmet Foods Ltd. (TSE:SGO) retained the services of the Vancouver-based investment banking firm Capital West Partners to assist in evaluating various strategies to maximize shareholder value. Dr. Peter Geib, Chairman and CEO announces that, based on advice received from Capital West, the Board of Sepp's has concluded that maximizing shareholder value can best be achieved through improving operational efficiencies and by a re-commitment to pursuing strategic alliances with other manufacturers. Said the President, Tom Poole: "After a year of uncertainty, Sepp's can once again focus on its core business. Management has made a commitment to a "back to basics" approach, with the same kind of attitude that fuelled the Company's growth during the '90's". SOLECTRON CORP: Third-Quarter Net Loss Jumps to $284 Million ------------------------------------------------------------ Solectron Corporation (NYSE: SLR), a leading provider of electronics manufacturing and supply-chain management services, reported third-quarter sales of $3 billion and a loss of 4 cents per diluted share, excluding a loss of 31 cents per share from restructuring and impairment charges and extraordinary gains. Results were within the range of the company's guidance of $2.7 billion to $3.1 billion in sales and a 6- to 4-cent loss per diluted share, excluding restructuring and impairment charges and extraordinary gains. In the quarter ended May 31, Solectron reported a net loss of $284 million. In the same period last year, Solectron had sales of $4 billion and a net loss of $186 million. Third-quarter results included pre-tax restructuring and impairment charges of $313 million in fiscal 2002 and $285 million in fiscal 2001, and after-tax extraordinary gains of $2.6 million in fiscal 2002. "In the face of weak end-market conditions, we are taking the right actions for our business," said Koichi Nishimura, Solectron chairman, president and chief executive officer. "We continued to improve key performance metrics, including working capital and gross margins, and to strengthen our balance sheet. Once again, we ended the quarter with a strong cash position, and we continue to win business from current and new customers. "We are also making significant progress executing our long-term strategy. We are steadily implementing our restructuring program, which will help us meet short- and long-term needs. We have the model for success, and we are confident in our future to provide tailored, complete supply-chain solutions that make our customers more competitive." In the quarter, Solectron gained new business from several companies, including Alcatel, Apple, Handspring, IBM and Maytag. The company also began producing optical networking equipment under a primary supplier agreement with Lucent Technologies, and providing manufacturing services for NEC Corporation's server, workstation and storage products in Japan. Separately today, Solectron said it plans to reduce its debt in the fourth quarter through a tender offer to purchase approximately $1.5 billion principal amount at maturity of its 2.75 percent Liquid Yield Option(TM) Notes with approximately $900 million of cash on hand. Fourth-Quarter Guidance The company established its guidance for the fiscal fourth quarter, which ends Aug. 31. Solectron expects sales to range from $2.8 billion to $3.1 billion. Excluding restructuring and impairment charges and extraordinary items, the company expects a loss ranging from 5 to 3 cents per diluted share. Nine-Month Summary For the first nine months of fiscal 2002, Solectron reported sales of $9 billion, compared with $15 billion in the year- earlier period. The company reported a net loss of $463 million compared with net income of $127 million in the same period last year. Excluding pre-tax restructuring and impairment charges of $561 million, and after-tax extraordinary gains of $31.7 million, Solectron had a loss of $60 million, or 8 cents per diluted share, in the first nine months of fiscal 2002. Solectron plans to announce fiscal 2002 fourth-quarter and year- end results Monday, Sept. 23; fiscal 2003 first-quarter results Thursday, Dec. 19; second-quarter results Thursday, March, 20; third-quarter results Thursday, June, 19; and fourth-quarter and fiscal year-end results Monday, Sept. 22. Solectron -- http://www.solectron.com-- provides a full range of global manufacturing and supply-chain management services to the world's premier high-tech electronics companies. Solectron's offerings include new-product design and introduction services, materials management, high-tech product manufacturing, and product warranty and end-of-life support. Solectron, based in Milpitas, Calif., is the first two-time winner of the Malcolm Baldrige National Quality Award. * * * As reported in Troubled Company Reporter's March 27, 2002 edition, Fitch Ratings has lowered Solectron Corporation's ratings as follows: senior bank credit facility from 'BBB-' to 'BB', senior unsecured debt from 'BBB-' to 'BB', and the Adjustable Conversion Rate Equity Security Units from 'BB+' to 'B+'. The Rating Outlook remains Negative. The downgrades reflect the prolonged, significant reduction in demand from Solectron's customers, which continues to weaken operational performance and credit protection measures. In addition, with the delay in new business as customers defer ramping new projects in the face of continuing weak end-markets, Fitch believes any sustainable recovery will not materialize in 2002. The ratings also consider Solectron's top-tier position in the electronic manufacturing services (EMS) industry, diversity of end-markets and geographies, recent improvements in its capital structure, solid cash position, and recent working capital improvements albeit in an industry downturn. The Negative Rating Outlook indicates that if adverse market conditions persist, outsourcing contracts do not materialize from new customers, the company makes significant cash acquisitions, or if it is unsuccessful in execution of planned cost reductions the ratings may continue to be negatively impacted. SOLUTIA: Fitch Lowers Low-B Level Secured & Unsecured Ratings ------------------------------------------------------------- Fitch Ratings has lowered Solutia Inc.'s (Solutia) bank facility rating to 'BB' from 'BB+' and lowered the senior unsecured debt rating to 'B+' from 'BB'. Fitch has assigned a rating of 'B+' to the proposed $250 million senior secured notes that Solutia plans to issue. Solutia's commercial paper rating of 'B' has been withdrawn. The ratings remain on Rating Watch Negative. The ratings downgrade is based on heightened refinancing risk associated with the $150 million maturity due October 2002 and the $800 million credit facility that is up for renewal in August 2002. Refinancing plans have been delayed a number of times and remain incomplete while the maturity dates for the bank facility and $150 million bond approach. The risk related to the polychlorinated biphenyls (PCBs) contamination litigation in Anniston, Alabama may hinder Solutia's refinancing efforts. The two-notch difference between the bank facility rating and rating for the senior notes reflects the bank facility's superior collateral position relative to that of the senior notes. The bank facility is expected to be collateralized by first liens on certain receivables, inventories, and domestic and foreign property. The bank facility collateral package is also expected to include a second lien on certain other domestic property. The existing bondholders are expected to share first and second liens with the bank facility on certain domestic property. The new bondholders would have a second lien on certain domestic receivables and inventories. The collateral pledged to the new notes differs and is slightly stronger than the collateral pledged to the existing notes; however, the difference is not sufficient to warrant a higher rating than the existing notes. The Rating Watch Negative status reflects continuing concerns surrounding the company's ability to refinance approximately one half of its $1.23 billion debt. If it appears that the refinancing will not be completed in a timely fashion, Fitch may downgrade Solutia's ratings further. Solutia's ratings are supported by the company's diverse business portfolio, integrated nylon position, and the brand recognition of some of its major product lines (e.g. Wear-Dated carpet and Saflex plastic interlayer). Weak economic conditions have pressured the company's earnings in recent years. Lower earnings, together with Solutia's high debt level, have weakened the company's credit statistics. For the trailing 12-month period ending March 31, 2002, EBITDA- to-interest remained the same at 2.8 times (x) relative to the end of 2001. For the same period, total debt-to- EBITDA has declined to 4.8x from 5.1x at the end of 2001. These credit ratios are expected to remain close to these levels in 2002. Capital spending is expected to be at lower levels than in previous years. Due to cyclically lower earnings, free cash flow will likely not allow significant debt reduction until after 2002. Solutia is a specialty chemical company with $2.8 billion in sales in 2001. This diverse company produces films, resins, and nylon plastics and fibers for domestic and international markets. Some of Solutia's products are name brands, such as Saflex plastic interlayer for windows and Wear-Dated carpet fibers. End-use markets for Solutia's products include construction and home furnishings, automotive, aviation/transportation, electronics, and pharmaceuticals. SPORTS CLUB: Elects George J. Vasilakos as New Board Member ----------------------------------------------------------- On June 5, 2002, The Sports Club Company, Inc.'s Board of Directors unanimously elected George J. Vasilakos as a member of the Board to fill the vacancy created when the Board of Directors was increased in size from six to seven members. The Sports Club Company (SCC) operates four sports and fitness clubs (the Clubs) under The Sports Club/LA name in Los Angeles, Washington D.C. and at Rockefeller Center and the Upper East Side in New York City. The Company also operates the Sports Club/Irvine, The Sports Club/Las Vegas and Reebok Sports Club/NY. SCC's Clubs offer a wide range of fitness and recreation options and amenities, and are marketed to affluent, health-conscious individuals who desire a service-oriented club. The Company's subsidiary, The SportsMed Company, operates physical therapy facilities in some Clubs. On March 31, 2002, Sports Club posted a current working capital deficit of about $20 million. SUNTERRA CORP: Maryland Court Confirms Plan of Reorganization ------------------------------------------------------------- Sunterra Corporation announced that the United States Bankruptcy Court for the District of Maryland (Baltimore Division) had confirmed Sunterra's Chapter 11 Plan of Reorganization. The Plan received the support of all of Sunterra's major creditor groups. Sunterra expects to conclude its arrangements with Merrill Lynch Mortgage Capital, Inc. for a $300 million exit financing facility shortly and will then emerge from the Chapter 11 cases. Sunterra and certain of its subsidiaries filed for reorganization under Chapter 11 on May 31, 2000. "We are extremely pleased with the results of [Thurs]day's confirmation hearing and the Court's action," said Nick Benson, CEO of Sunterra. "We are gratified by the willingness of our creditors and other parties to address the issues created by our Chapter 11 filing and to facilitate our return to normal operations with a streamlined capital structure and a new business plan," Mr. Benson added. "We extend our thanks to our customers, vendors, employees, professional advisers and others who supported us in this process." "The Jay Alix & Associates team is also very pleased with the successful conclusion to the Sunterra reorganization process," said Greg Rayburn, Chief Restructuring Officer for Sunterra. Sunterra Corporation is one of the world's largest vacation ownership companies, with owner families and resorts in North America, Europe, the Pacific and the Caribbean. TIG INSURANCE: Fitch Assigns BB Rating to Parent's Senior Debt -------------------------------------------------------------- Fitch Ratings has revised its Rating Outlook to Negative from Stable for the debt securities of Fairfax Financial Holdings Limited and the Insurer Financial Strength ratings of the Fairfax Primary Insurance Group. The Stable Rating Outlook of the Odyssey Re Group is unaffected. Fitch has also removed TIG Insurance Group from the Fairfax Primary Insurance Group for rating purposes, and downgraded its Insurer Financial Strength Rating one notch to 'BBB' from 'BBB+' and assigned a 'BB' rating to the outstanding senior debt of its parent -- TIG Holdings, Inc. The Rating Outlook for TIG is Negative. These actions largely reflect: (1) TIG's moderate capitalization combined with a decline in market profile of TIG during 2002 following the downgrade by various rating agencies in late 2001, management changes and business restructuring, (2) increased uncertainty in Fitch's view as to the levels of holding company cash resources that will be maintained at Fairfax in light of its moderate financial flexibility, sizable internal and external debt maturities in 2003 and the inability of the Crum & Forster Insurance Group and TIG to pay parental dividends in 2002 and likely 2003. Although Fairfax has a number of realistic alternatives to address maturing debt such as refinancing, tapping its committed bank facility, monetizing existing assets and/or taking sizable subsidiary dividends from non-U.S. subsidiaries, Fitch is concerned that upcoming debt maturities could potentially further strain holding company cash resources despite the expectation of improving operating results. Importantly, due to regulatory restrictions tied to negative unassigned funds at the statutory level, Fitch would expect upstream dividend paying ability at U.S. subsidiaries CFI and TIG to lag expected earnings improvements by 2-3 years. Additionally, the proposed initial public offering of a minority stake in Crum & Forster Holdings, Inc., a core asset of Fairfax, is viewed by Fitch as a potential near-term positive for Fairfax, but potentially negative longer term as future expected parental dividends could be significantly reduced. Furthermore, this viewpoint considers Fairfax's sizable debt levels and parental dividend/earnings capabilities of the remaining subsidiaries if TIG is unable to pay parental dividends for an extended period due to its moderate statutory capital position. Fairfax Financial Holdings Limited is a publicly traded insurance holding company that is listed on the Toronto Stock Exchange with operating subsidiaries primarily engaged in property/casualty insurance, reinsurance and insurance claims management services. The company had assets of C$34.8 billion and shareholders' equity of C$3.3 billion at March 31, 2002. Entity/Issue/Type/Action/Rating/Outlook Fairfax Financial Holdings Limited --Senior Debt Affirm 'BB+' / Negative. TIG Holdings, Inc. --Senior Debt Assign 'BB' / Negative; --Trust Preferred Assign 'BB-' / Negative. Members of The Fairfax Primary Insurance Group (see list below) --Insurer Financial Strength Affirm 'BBB+' / Negative. Odyssey Re Group (see list below) --Insurer Financial Strength Affirm 'A-' / Stable. Members of the TIG Insurance Group (see list below) --Insurer Financial Strength Downgrade 'BBB' / Negative. The members of the Fairfax Primary Insurance Group are: Commonwealth Insurance Co. Commonwealth Insurance Co. of America Zenith Insurance Co. Federated Insurance Co. of Canada Industrial County Mutual Insurance Co. Crum & Forster Insurance Co. Crum & Forster Underwriters of Ohio Crum & Forster Indemnity Co. The North River Insurance Co. United States Fire Insurance Co. Lombard General Insurance Co. of Canada Lombard Insurance Co. Markel Insurance Co. of Canada The members of the Odyssey Re Group are: Compagnie Transcontinentale De Reassurance Odyssey America Reinsurance Corp. Odyssey Reinsurance Corp. The members of the TIG Insurance Group are: Fairmount Insurance Company Ranger Insurance Co. TIG American Specialty Ins. Company TIG Indemnity Company TIG Insurance Company TIG Insurance Company of Colorado TIG Insurance Company of New York TIG Insurance Company of Texas TIG Insurance Corporation of America TIG Lloyds Insurance Company TIG Premier Insurance Company TIG Specialty Insurance Company TAUBMAN CENTERS: S&P Ratchets Credit Rating Down to Low-B's ----------------------------------------------------------- Standard & Poor's lowered its corporate credit ratings on Taubman Centers Inc. and Taubman Realty Group L.P. to double- 'B'-plus from triple-'B'-minus. In addition, the rating on Taubman's $200 million of preferred stock is lowered to single- 'B'-plus from double-'B'. The outlook on both entities is also revised to stable from negative. The downgrades reflect the combined impact of the recently completed, but not yet stabilized, development projects, and a weaker retail leasing environment on the company's financial profile, including debt service coverage measures and general financial flexibility. The revised ratings remain supported by Taubman's experienced management team and seasoned existing portfolio of highly productive regional and super-regional malls. Bloomfield Hills, Michigan-based Taubman has roughly $2 billion in assets (on a book value basis) and owns interests in 18 regional malls, encompassing nearly 17 million square feet (sq. ft.), including four recently completed development projects. Having completed a major restructuring in early 1999, Taubman shifted its financing strategy from that of an unsecured borrower to an asset-level secured borrower, while leveraging its stabilized core portfolio to pursue a development-driven growth strategy. This stabilized core portfolio of 14 malls encompasses nearly 16 million sq. ft. of retail space (including nine million sq. ft. of anchor space), located in seven different states. These malls generate above-average sales per sq. ft. of roughly $450, and garner industry-leading rental rates. A more challenging leasing environment has pushed year- over-year occupancy rates to 89% from 91%, excluding the recently completed development pipeline. While Taubman has always experienced greater vacancy due to management's focus on pushing rental rates, the slow lease-up of newly completed malls is expected to keep overall occupancy rates below the portfolio's historical average (85% versus 91%). In the near- term, sales volume and rental rates are expected to continue to improve (albeit at a decreasing rate), thus helping maintain positive rental rate spreads. Taubman has opened five new regional malls since refocusing its growth strategy on development: one in 1999 and four in 2001. The 2001 openings include Dolphin Mall in Miami, Florida; Wellington Green in Palm Beach, Florida; Willow Bend in Plano, Texas; and International Plaza in Tampa, Florida When Taubman initiated these development projects, the primary credit concerns were the related capital requirements (just more than $1 billion) and the potential for asset quality dilution relative to the core portfolio (resulting from the value- oriented and mid-market assets). Despite Taubman's extensive experience in the mall development arena, poor economic timing and the dual challenges of delivering a large amount of space into saturated retail markets (such as southern Florida and Dallas) are having a noticeable impact on leasing velocity and rental rates. While Taubman successfully funded the pipeline with construction loans, joint venture equity, and credit facility borrowings, the construction loans will need to be refinanced during the next one to two years (excluding extension options). If property-level performance does not match expectations, Taubman could be challenged to harvest additional capital (beyond construction loan balances) from permanent financings. The current development pipeline includes two shopping centers in progress and another deep in the pre-development phase: The Mall at Millenia, a 1.2-million-sq.-ft. high-end regional mall in Orlando, Florida; and Stony Point, a smaller, 690,000-sq.-ft. open-air regional mall in Richmond, Virginia These malls are expected to open in the next six to 18 months and are budgeted to cost roughly $450 million. Both of these projects are experiencing moderate pre-leasing activity; however, the long stabilization period for regional malls means their longer-term success may not be assessable for sometime. Another potential project is in Oyster Bay (Long Island), New York. While this project has yet to receive zoning approval, the company continues to invest capital, and has lined up two potential anchors (Lord & Taylor and Neiman Marcus). Taubman's financing strategy of pursuing secured property-level mortgage debt (which is typical for the mall sector) has resulted in a somewhat more highly leveraged, but probably more manageable, capital structure. Driven largely by the funding needs of the increase in development activity, leverage has increased to the low-60% range today from the mid-50% range in 1999 (based on a fully-consolidated estimated market-value). These borrowings have come in the form of credit facility drawdowns, project-level construction financing (generally leveraged at 70% of total cost), and increased borrowing levels on the refinancing of existing encumbered assets. This financing strategy has produced a more manageable debt maturity schedule. Excluding the construction loans and secured credit facility (recently renegotiated and secured by two malls), Taubman has roughly $430 million of mortgages maturing during the next six years. Taubman's construction loan maturity schedule may be more challenging, however, with $450 million in loans maturing during the next three years. Despite the very favorable recent interest rate environment, debt service coverage measures have been negatively impacted by the heightened development activity, as well as by softer occupancy at some existing properties. Capitalized interest from the new developments and the poorer-than-expected leasing performance of these recently completed projects has negatively impacted fixed charge coverage. This measure was 1.67 times at year end 2001, down from 2.08x in 1999. However, Taubman's free cash flow (Standard & Poor's calculation of FFO, less distributions and various capital expenditures) of roughly $60 million has been improving and should continue to benefit from the increased size of the core operating portfolio. In addition, while development activity remains a strategic focus, management appears to be committed to pursuing future projects at a more modest level, recognizing greater efficiency in its operations, and selectively recycling lower growth assets to bolster internal liquidity. OUTLOOK: STABLE Taubman's seasoned existing portfolio generates a very stable cash flow stream. In addition, recently completed development projects, while lower yielding than expected, will shift from being a drag on earnings to becoming a modest contributor. The outlook does incorporate expectations for a more tempered development pace going forward and assumes occupancy pressure within the stabilized portfolio will moderate. RATINGS LOWERED AND OUTLOOK REVISED Ratings To From Taubman Realty Group L.P. BB+/Stable BBB-/Negative Taubman Centers Inc. BB+/Stable BBB-/Negative $200 mil. 8.3% redeemable preferred stock B+ BB USG CORP: Asks Court to OK Investment Guidelines Modifications -------------------------------------------------------------- Paul N. Heath, Esq., at Richards, Layton & Finger explains that, since the Petition Date, USG Corporation and its debtor- affiliates have "accumulated a significant amount of cash and expect to continue to accumulate cash" during the course of these Chapter 11 cases. The Debtors have gone from having less than $100 million in cash to approximately $500 million in cash currently. The Debtors believe they could materially increase the return on their investments, without any material increased investment risk if: 1) their investments are permitted to have a Maximum Duration of up to two years, and 2) the maximum permitted Average Weighted Maturity of their investment portfolio is extended to 180 days. These modifications, Mr. Heath continues, would likely increase the return on the Debtors' investments by approximately 20 to 40 basis points (0.2% - 0.4%). The modifications would increase the value of the Debtors' estates by $1 million to $2 million per year based on the Debtors' current cash balances, and by an even greater amount as the cash balances continue to grow. Mr. Heath explains that while this would mean the Debtors would be permitted to make investments of up to two years' duration, the number and amount of such investments would necessarily be limited, given that the Average Weighted Maturity of their investment portfolio must still be 180 days or less. Any minor investment risk increase resulting from an increase in Maximum Duration and Average Weighted Maturity will be offset by the revised Diversification Requirements. He states that the motion should be granted as maximizing the value of the Debtors' estates. (USG Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 609/392-0900) DebtTraders reports that USG Corporation's 8.500% bonds due 2005 (USG1) are quoted between the prices 79 and 81. See http://www.debttraders.com/price.cfm?dt_sec_ticker=USG1for some real-time bond pricing. VERADO HOLDINGS: Trustee Wants to Fix August 8 Admin. Bar Date -------------------------------------------------------------- In order to implement the Plan, the Liquidating Trustee of Verado Holdings, Inc. wants the U.S. Bankruptcy Court for the District of Delaware to fix the date requiring requests for payment of all administrative expenses arising on or after February 15, 2002 be filed no later than August 8, 2002. The Liquidating Trustee tells the Court that it needs to know the nature and extent of the administrative expenses against the Debtors' estates so that it can be in a position to pay such claims and commence distributions under the Plan. The Liquidating Trustee proposes that the Administrative Claim Bar Date be set at 4:00 p.m. or creditors are forever barred from asserting that claim. Administrative Expense Request by the Administrative Claim Bar Date would apply to each and every administrative expense arising on or after the Petition Date whether the claim is held by a governmental entity, taxing agency, trade creditor, or affiliates of the Debtors. The Administrative Claim Bar Date shall not apply to: a) administrative expense previously allowed by this Court; and b) fees payable to the United States Trustee pursuant to 28 USC Sec. 1930. Verado Holdings, Inc., through its subsidiaries, provides outsourced services as well as professional services, data center, and application hosting solutions for various businesses. The Company filed for chapter 11 protection on February 15, 2002. When the Debtors filed for protection from its creditors, it listed $61,800,000 in assets and $355,400,000 in liabilities. DebtTreaders reports that Verado Holdings Inc.'s 13.000% bonds due 2008 (VRDO08USR1) are quoted between the prices 9 and 10. For real-time bond pricing, see http://www.debttraders.com/price.cfm?dt_sec_ticker=VRDO08USR1 WHEELING-PITTSBURGH: Seeks 7th Extension of Exclusivity Periods --------------------------------------------------------------- With the ink hardly dry on the agreed order extending Wheeling- Pittsburgh Steel Corp.'s and its debtor-affiliates' exclusivity periods for filing a plan and for soliciting acceptances of that plan for a sixth time, the Debtors filed their seventh motion seeking a further 91-day extension. Scott N. Opincar, Esq., at Calfee Halter & Griswold LLP, tells Judge Bodoh Wheeling-Pittsburgh wants extensions of: (i) the period within which the Debtors may exclusively file a plan of reorganization to and including Monday, September 23, 2002; and (ii) the period in which the Debtors may solicit acceptances of that plan of reorganization, to and including Friday, November 22, 2002. Since the Petition Date, the Debtors have dealt with a multitude of complex supply, employee and contract issues that typically arise in large and complicated Chapter 11 cases. Simultaneously, the Debtors have been stabilizing operations and working towards the ultimate goal of constructing a plan of reorganization by: (a) working diligently to determine whether any third parties have an interest in acquiring all or a part of their facilities; and (b) investigating thoroughly various possible reconfigurations of the business that would support continued operation as a stand alone business. The Debtors continue to investigate a number of possible options for the reorganization of their businesses and have kept the Official Committees apprised of these options. Recently, the Debtors have retained an additional advisor (RBC Dain) to assist them in arranging financing to support a stand-alone plan of reorganization, and have also agreed with the Official Noteholders' Committee to retain an additional advisor to pursue possible sale opportunities. The Debtors have also negotiated substantial wage and other concessions from their unions, salaried workers and numerous suppliers, and have taken other cost-cutting measures. These are part of the Debtors' continuing efforts to eliminate ongoing operating losses and to support the Debtors' continued business until such time as the Debtors may file a plan of reorganization and emerge from bankruptcy. Although the Debtors have made significant progress, the Debtors require additional time to stabilize their operations and to work out the details of a plan of reorganization with all affected constituents. In addition, a termination of the Debtors' exclusivity periods is a triggering event under the Modified Labor Agreement that the Debtors negotiated with the United Steel Workers of America, AFL-CIO-CLC, which would entitle the USWA to terminate that agreement and the many cost- saving concessions in it. It is in the best interests of the Debtors and their estates to avoid that risk and to continue the exclusivity periods without interruption. Based on these arguments, the complicated and complex nature of the Debtors' business and the amount of work that still must be completed in order to identify the proper plan of reorganization, the Debtors. Suggest that the requested further extensions are appropriate. The Noteholders' Committee Objects Somewhat The Official Committee of Unsecured Noteholders, represented by Jean R. Robertson, Esq., at Hahn Loeser & Parks LLP, complains that, if this motion is granted, the Debtors will have controlled the reorganization process for nearly two years -- far too long. Ms. Robertson commends the Noteholders' Committee for their patience to date, watching as other steel companies which filed for bankruptcy protection after these Debtors restructure or sell their assets and obtain recoveries for their creditors. The Noteholders' Committee has heretofore deferred to the Debtors' business judgment as they have pursued the "Byrd Bill" financing for a stand-alone plan alternative, which has thus far not been feasible. Now, as Ms. Robertson knows Judge Bodoh is aware, the state of the steel market, while still severely depressed, has improved slightly. No one can predict how long the improvement will last, and the Noteholders' Committee believes that it is imperative that the Debtors seize upon this upswing in the business to initiate a formal sale process of their business and assets, even as they continue their efforts to obtain the Byrd financing. Ms. Robertson suggests that the benefits of the "dual-track" system are two-fold. If the financing effort fails, the estates have an alternative, and if it proves fruitful, the creditors have a basis for comparison in terms of maximizing their recoveries. While the Debtors have agreed to retain an advisor, subject of course to Judge Bodoh's approval, to provide restructuring advice and broad-based financial services, as well as to spearhead a sales process, it is unclear that the Debtors are willing to pursue sales prospects with the same zeal and priority that they are according the stand-alone alternative - which Ms. Robertson intuits is their "clear preference." Ms. Robertson concludes that it is only through a limitation on exclusivity that Judge Bodoh and the official committees can effectively monitor the reorganization process and ensure that the Debtors are giving each viable reorganization option its due. Accordingly, the Noteholders' Committee asks that the exclusivity extension be limited to one month, with a right to seek further extensions on a month-to-month basis, subject to the right of the Official Committee to object. (Wheeling- Pittsburgh Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 609/392-0900) WHITE ROSE: Files Bankruptcy Assignment Under BIA in Canada ----------------------------------------------------------- White Rose Crafts and Nursery Sales Limited filed a voluntary assignment into bankruptcy under the Bankruptcy and Insolvency Act (Canada) this morning in Toronto. Under the voluntary assignment, PricewaterhouseCoopers Inc. was named as trustee-in- bankruptcy in respect of the Corporation. Shortly thereafter The Bank of Nova Scotia, the senior secured lender to the Corporation, appointed PricewaterhouseCoopers Inc. as receiver and manager of the Corporation. The Receiver intends to continue the operation of the businesses of the Corporation while attempting to market the business as a going concern. WORLDCOM INC: Fitch Hatchets Senior Unsecured Debt Ratings to B --------------------------------------------------------------- Fitch Ratings has downgraded the senior unsecured debt ratings for WorldCom, Inc. to 'B' from 'BB'. The rating on its preferred securities has been downgraded to 'CCC+' from 'B+' and the quarterly income preferred securities have been lowered to 'C' from 'B+'. In addition Fitch has withdrawn WorldCom's 'B' commercial paper rating as there are no outstandings under the program. The rating action also applies to Intermedia Communications senior unsecured debt, which has been lowered to 'B-' from 'BB-'. The ratings on Intermedia's preferred securities have been lowered to 'CCC' from 'B'. All of the company's ratings have been placed on Rating Watch Negative. This rating action follows the company's announcement to defer interest payments on the Cumulative Quarterly Income Preferred Securities issued by MCI Capital I. While Fitch recognizes the company's effort to conserve cash through the deferment of payments on the QUIPS, the elimination of the MCI dividend, reduction of capital expenditures, and the exit of the wireless reseller business, Fitch believes that these are signs that point to the extent the current difficult industry dynamics coupled with the potential for continued customer network re- grooming and churn are pressuring the company's ability to generate free cash flow to the level of the company's guidance. Generation of free cash flow will be critical for the company to service upcoming debt maturities. The company will have approximately $3.2 billion of maturities, including approximately $1.5 billion of re-marketable or putable securities maturing in 2003, and an additional $2.6 billion in 2004. Fitch anticipates that, in the current circumstances, the company will have limited access to capital markets constraining its financial flexibility. Absent significant improvements in free cash flow, Fitch acknowledges the potential for a restructuring, given the significant maturities in 2003, 2004 and beyond. While the company indicates that it is making good progress with negotiating its bank facility, the process has taken longer than expected, elevating the potential risk that the company may not be able to obtain a facility with the size and terms that were previously indicated. The Rating Watch Negative is reflective of the uncertain outcome of the company's negotiations with its bank group. The Rating Watch Negative will be resolved pending review of the final terms and conditions of the bank facility. DebtTraders reports that Worldcom Inc.'s 11.250% bonds due 2007 (WCOM07USR4) are quoted between the prices 45 and 50. See http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOM07USR4 for more real-time bond pricing. YOUBET.COM: Names Ex-Ill. Gov. Jim Edgar to Board of Directors -------------------------------------------------------------- Youbet.com, Inc. (Nasdaq:UBET), the leading online live event and wagering company, announced the appointment of former Illinois Governor Jim Edgar to its Board of Directors, effective June 19, 2002. Gov. Edgar's career in government spans 30 years. He served in the Illinois executive branch for 20 years, including two 4-year terms as Illinois's 38th Governor and 10 years prior to that as Secretary of State. He worked in the legislative branch of government for 10 years, which included his election to the Illinois House of Representatives. Gov. Edgar also has a keen interest in the horse racing industry. As Governor, he crafted legislation that allowed horse racing to remain competitive with the rapidly growing riverboat casino industry. He also created laws to improve housing conditions for workers and their families at Illinois tracks. Since leaving the Governor's Office in January 1999, Gov. Edgar and members of his family have engaged in raising and racing thoroughbreds and standardbreds. It has been said that Jim Edgar was the right governor at the right time for Illinois. After he had inherited a state teetering on bankruptcy, Gov. Edgar restored fiscal stability and integrity to the state by downsizing and restructuring state government. When he entered office in 1991, the state was $1 billion in debt. When he left office in 1999, the state had a $1.5 billion surplus. Upon leaving office, the Chicago Tribune stated that Gov. Edgar's "instincts and motives were as sound as those of any governor the state has had." Gov. Edgar left the office with the highest approval rating in state history, which prompted a Chicago newspaper columnist to state that Gov. Edgar's popularity in Illinois was "second only to Michael Jordan's." "Jim Edgar is a perfect addition to the Youbet.com Board. He brings not only a wealth of knowledge and experience in public policy issues, but also a passion for the horse racing industry," said David Marshall, Chief Executive Officer of Youbet.com. "We are extremely pleased to have someone as accomplished and distinguished as Gov. Edgar on the Youbet.com Board and are eager to gain from his insights." Gov. Edgar commented: "Joining the Board of Youbet.com is an extraordinary opportunity for me to combine my expertise in government with my enthusiasm for the horse racing industry. Youbet.com is widely considered to be one of the most respected names in the horse racing business, and I look forward to assisting Youbet.com in achieving its long-term vision and business goals." Gov. Edgar is currently a Distinguished Fellow at the University of Illinois' Institute of Government and Public Affairs, and lectures at other colleges and universities throughout Illinois. In the fall of 1999, he was a resident fellow at the John F. Kennedy School of Government at Harvard University. Gov. Edgar also serves as a senior advisor at KemperLesnik Public Affairs, a division of Chicago-based KemperLesnik Communications, and on a variety of corporate and not-for-profit boards of directors. Gov. Edgar is a 1968 graduate of Eastern Illinois University. He and his wife, Brenda, have two adult children. In the United States, Youbet.com provides network members the ability to watch and, in most states, the ability to wager on a wide selection of coast-to-coast thoroughbred and harness horse races via its exclusive closed-loop network. Members have 24- hour access to the Youbet Network's features including live racing from a choice of over 80 racetracks representing all major racetracks, in the U.S., Canada and Australia such as Mountaineer, Churchill Downs, Hollywood Park, Belmont Park, Delaware Park, Arlington, Pimlico, Oaklawn, Del Mar, Aqueduct, Saratoga, Santa Anita Park, Gulfstream Park and Golden Gate Fields. Other Network features include commingled track pools, live audio/video, up-to-the minute track information, real-time wagering information and value-added handicapping products. Youbet Network customers enjoy live coverage from and wagering accessibility to all major racetracks in 40 states, representing virtually 100% of major horse racing content. * * * As previously reported, Youbet.com(R), Inc. (Nasdaq: UBET), announced that it received a determination from the staff of The Nasdaq Stock Market on May 16, 2002, that the Company has failed to comply with the minimum bid price requirements for continued listing set forth in Nasdaq's Marketplace Rule 4450(a)(5), and that its securities are therefore subject to delisting from the Nasdaq National Market. The Company had previously announced, on March 7, 2002, that it expected to receive the staff determination in the event that the Youbet.com common stock did not trade on the Nasdaq National Market with a minimum bid price of at least $1.00 for ten consecutive trading days prior to May 15, 2002. Youbet.com is requesting a hearing before a Nasdaq Listing Qualifications Panel to review the determination. Youbet.com's hearing request will stay the delisting of the Company's securities pending the panel's decision. * BOND PRICING: For the week of June 24 - June 28, 2002 ------------------------------------------------------ Issuer Coupon Maturity Price ------ ------ -------- ----- ABGenix Inc. 3.500% 03/15/07 74 Adelphia Communications 7.875% 05/01/09 45 Adelphia Communications 8.375% 02/01/08 46 Adelphia Communications 9.875% 03/01/07 46 Adelphia Communications 10.250% 06/15/11 47 Adelphia Communications 10.875% 10/01/10 47 AES Corporation 4.500% 08/15/05 57 AES Corporation 8.000% 12/31/08 70 AES Corporation 8.750% 06/15/08 74 AES Corporation 8.875% 02/15/11 67 AES Corporation 9.375% 09/15/10 71 AES Corporation 9.500% 06/01/09 70 Alternative Living Services (Alterra) 5.250% 12/15/02 4 American Tower Corp. 9.375% 02/01/09 64 American & Foreign Power 5.000% 03/01/30 61 Armstrong World Industries 9.750% 04/15/08 50 Atlas Air Inc. 9.250% 04/15/08 51 AT&T Corp. 6.500% 03/15/29 74 Bethlehem Steel 8.450% 03/01/05 14 Borden Inc. 7.875% 02/15/23 60 Borden Inc. 9.250% 06/15/19 61 Boston Celtics 6.000% 06/30/38 65 Burlington Northern 2.625% 01/01/10 75 Burlington Northern 3.200% 01/01/45 49 Burlington Northern 3.800% 01/01/20 68 Case Corp. 7.250% 01/15/16 74 Centennial Cell 10.750% 12/15/08 60 Century Communications 8.875% 01/15/07 34 Charter Communications, Inc. 5.750% 10/15/05 60 Cincinnati Bell Telephone (Broadwing) 6.300% 12/01/28 70 CIT Group Holdings 5.875% 10/15/08 74 Comcast Corp. 2.000% 10/15/29 24 Comforce Operating 12.000% 12/01/07 60 Cox Communications Inc. 0.348% 02/23/21 68 Cox Communications Inc. 0.426% 04/19/20 41 Cox Communications Inc. 3.000% 03/14/30 27 Cox Communications Inc. 7.750% 11/15/29 29 Cox Communications Inc. 7.750% 11/15/29 29 Critical Path 5.750% 04/01/05 63 Critical Path 5.750% 04/01/05 63 Crown Castle International 9.000% 05/15/11 74 Crown Castle International 9.375% 08/01/11 73 Crown Castle International 9.500% 08/01/11 73 Crown Cork & Seal 7.375% 12/15/26 61 Cubist Pharmacy 5.500% 11/01/08 55 Dana Corp. 7.000% 03/01/29 73 Dana Corp. 7.000% 03/15/28 73 Equistar Chemicals 7.550% 02/15/26 67 Finisar Corp. 5.250% 10/15/08 55 Foster Wheeler 6.750% 11/15/05 54 Gulf Mobile Ohio 5.000% 12/01/56 61 Hasbro Inc. 6.600% 07/15/28 71 Human Genome 3.750% 03/15/07 68 Huntsman Polymer 11.750% 12/01/04 20 Inland Steel Co. 7.900% 01/15/07 50 Level 3 Communications 11.250% 03/15/10 46 Lucent Technologies 6.450% 03/15/29 64 Lucent Technologies 6.500% 01/15/28 64 Missouri Pacific Railroad 4.750% 01/01/20 65 Missouri Pacific Railroad 4.750% 01/01/30 62 Missouri Pacific Railroad 5.000% 01/01/45 57 MSX International 11.375% 01/15/08 70 Nextel Communications 9.375% 11/15/09 63 Nextel Partners 11.000% 03/15/10 59 Northern Pacific Railway 3.000% 01/01/47 46 Northern Pacific Railway 3.000% 01/01/47 46 Pegasus Satellite 12.375% 08/01/06 49 Primedia Inc. 7.625% 04/01/08 66 Public Service Electric & Gas 5.000% 07/01/37 71 Qwest Capital 7.625% 08/03/21 69 Qwest Capital 7.750% 02/15/31 70 Rural Cellular 9.625% 05/15/08 57 SBA Communications 10.250% 02/01/09 68 Silicon Graphics 5.250% 09/01/04 69 Solutia Inc. 7.375% 10/15/27 70 Time Warner Telecom 9.750% 07/15/08 54 Tribune Company 2.000% 05/15/29 65 Ugly Duckling 11.000% 04/15/07 56 United Air Lines 9.125% 01/15/12 60 United Air Lines 10.250% 07/15/21 60 Universal Health Services 0.426% 06/23/20 62 US Timberlands 9.625% 11/15/07 64 US West Capital 6.875% 07/15/28 67 Vesta Insurance Group 8.750% 07/15/25 74 Viropharma Inc. 6.000% 03/01/07 36 Weirton Steel 10.750% 06/01/05 51 Weirton Steel 11.375% 07/01/04 49 Westpoint Stevens 7.875% 06/15/08 58 Wind River System 3.750% 12/15/06 73 Worldcom Inc. 6.400% 08/15/05 58 XO Communications 5.750% 01/15/09 1 ********* 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. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $625 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***