/raid1/www/Hosts/bankrupt/TCR_Public/021002.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, October 2, 2002, Vol. 6, No. 195
Headlines
ACME METALS: Wants Until Dec. 4 to Make Lease-Related Decisions
ADVANCED LIGHTING: Will Publish Fourth Quarter Results on Oct 15
AGWAY INC: Energy Businesses Excluded from Parent's Filing
ALAMOSA HOLDINGS: Senior Lenders Agree to Relax Loan Covenants
ALLMERICA FIN'L: Moody's Slashes Senior Unsecured Rating to Ba1
AMERICA WEST: Appoints Derek Kerr as New Chief Financial Officer
AMERIDIAN VENTURES: TSX Knocks-Off Shares for Non-Compliance
ANC RENTAL: Seeks Approval to Expand Ernst & Young's Engagement
ARBEK MANUFACTURING: Buxbaum to Auction-Off Assets on October 18
BACKWEB TECHNOLOGIES: Slashing 44% of Total Workforce Worldwide
BCE INC: BCI Shareholder Files $1-Billion Class Action Suit
BCF LLC: Fitch Ratchets Class F Notes Rating Up a Notch to BB+
BIRCH TELECOM: Successfully Emerges from Chapter 11 Proceeding
BRITISH ENERGY: Fitch Hatchets Sr. Unsec. Rating Down 2 Notches
BUDGET GROUP: Cendant's Bid to be Tested at Oct. 24 Auction
BURLINGTON: Wants to Enter into Amendment to $125M DIP Agreement
CANMINE RESOURCES: Opens Data Room to Potential Investors
CAPCO AMERICA: Fitch Affirms Low-B Ratings on Classes B1 to B5
CARAUSTAR: Completes $80-Mill. Purchase of Smurfit-Stone Assets
CELLPOINT INC: Awaits Accounting Guidance on Restructuring Deals
CHASE CMSC: Fitch Ups Ratings on Four Low-B-Rated Note Classes
COMDIAL: Repays $12.7MM of Outstanding Debt to Bank of America
COMMERCIAL CONSOLIDATORS: Elbows-Out Richter as Units' Receiver
COMMUNICATION DYNAMICS: Taps White & Case as Lead Ch. 11 Counsel
CONSECO INC: Fitch Says Looming Bankruptcy Disrupts ABS Market
CORAM HEALTHCARE: Trustee Has Until Year-End to Decide on Leases
COVANTA ENERGY: Wins OK to Implement Key Employee Retention Plan
DYNEGY INC: Sells Hornsea Gas Storage Facility to SSE for $200MM
EBIX.COM INC: Commences Trading on 1-For-8 Reverse Split Basis
ENRON CORP: ENA Keeps Plan Filing Exclusivity Until November 30
ENRON CORP: Dept. of Labor Plans to Hold Lay Personally Liable
ETOYS INC: Court Extends Solicitation Period Until October 4
EXODUS COMMS: C&W Seeks Temporary Restraining Order against EXDS
GENERAL DATACOMM: Court Okays Chodan to Render Financial Advice
GLOBAL CROSSING: Court Allows Settlement Agreement with Level 3
GLOBAL LIGHT: Court Extends CCAA Protection to Dec. 20 in Canada
HIGHWOOD RESOURCES: Lender Agrees to Forbear Until Dec. 31, 2002
HOLY CROSS HOSPITAL: Fitch Slashes $24.9MM Bonds' Rating to B
HUNTSMAN CORP: Completes Fin'l Workout and Cuts Debt by $775MM
IBIZ TECHNOLOGY: Applauds Qualification for OTCBB Relisting
INSCI: Inks Strategic Marketing Alliance with Imaging Solutions
KMART CORP: Asks Court to Approve Settlement with General Time
LAIDLAW: Canadian Court Allows Debtor to Settle with Bondholders
MAGELLAN HEALTH: Taps Gleacher Partners to Explore Alternatives
METROMEDIA INT'L: Defers $11MM Interest Payment on Senior Notes
MOBILE TOOL: Case Summary & 21 Largest Unsecured Creditors
NATIONSRENT INC: Wants Court to Appoint Mediator for Proceedings
NEOTHERAPEUTICS: Regains Compliance with Nasdaq Listing Criteria
NETIA: Creditors' Meetings to Accept Plans Adjourned to Oct. 28
NORTEL: Inks Patent Cross License Pact with Extreme Networks
NORTHWEST AIRLINES: Names Bernard L. Han to Replace Mickey Foret
NOVO NETWORKS: Continues to Incur Net Loss in Fourth Quarter
NRG GROUP: TSX Will Suspend Trading Effective October 25, 2002
OPTI INC: Sells Semiconductor Business to OPTi Technologies
OWENS CORNING: Clarifies New Old Republic Insurance Policy
PEREGRINE SYSTEMS: Seeking Nod to Obtain $110MM DIP Financing
POLAROID CORP: Retirees Ask UST to Create New Retiree Committee
PRESIDENT CASINOS: Broadwater Unit Agrees to Certain Plan Terms
PSINET INC: Court to Consider Preferreds Settlement on Oct. 16
RECREATION USA: Fails to Maintain Nasdaq Listing Requirements
RELIANCE GROUP: Liquidator Sells Advantage Notes for $6.9 Mill.
RURAL/METRO CORP: June 30 Equity Deficit Widens to $165 Million
RURAL/METRO: Banks Agree to Amend and Extend Credit Facility
SEPP'S GOURMET: Janes Family Foods Discloses 9.24% Equity Stake
SOLUTIA INC: Will Hold Q3 Earnings Conference Call on October 25
STERLING CHEMICALS: Disclosure Statement Hearing Set for Oct. 7
TELEPANEL SYSTEMS: July 31 Balance Sheet Upside-Down by C$13MM
TMI TECHNOLOGY: TSX Delists Shares Effective September 25, 2002
TRITON CDO: S&P Slashes Rating on Class B Notes to BB+ from AA-
UNITEDGLOBALCOM: European Unit Will File for Chapter 11 Reorg.
US AIRWAYS GROUP: RSA Seeking Stalking Horse Bidder Status
USG CORP: Dean Trafelet Wants to Retain CIBC as Fin'l Advisor
VALENTIS INC: Independent Auditors Raise Going Concern Doubt
VALENTIS: Aborts Tender Offer to Purchase Preferreds & Warrants
VENTURE CATALYST: Says Cash Sufficient to Meet Current Needs
VERTICAL COMPUTER: Need to Raise New Capital to Fund Operations
VIASYSTEMS GROUP: Case Summary & Largest Unsecured Creditors
WARNACO GROUP: Files Chapter 11 Reorganization Plan in New York
WARREN ELECTRIC: Asks Court to Fix November 27 Claims Bar Date
WHEELING-PITTSBURGH: Sues Reunion Ind. to Recoup Pref'l Transfer
WILLIAMS COMMS: New York Court Confirms Plan of Reorganization
WORLDCOM INC: Proposes to Pay $3-Million Pentagon Break-Up Fee
XO COMMS: Two More Defendants Names in Connecticut Lawsuit
* Cadwalader's Litigation Department Adds New Partners
* Kramer Levin Forges Strategic Alliance with Berwin Leighton
* Meetings, Conferences and Seminars
*********
ACME METALS: Wants Until Dec. 4 to Make Lease-Related Decisions
---------------------------------------------------------------
Acme Metals, Incorporated and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to extend their
lease decision period. The Debtors tell the Court that they
need until December 4, 2002 to determine whether to assume,
assume and assign, or reject their unexpired nonresidential real
property leases.
The Debtors submit that the Unexpired Leases are an integral
part of the Acme Debtors' businesses and assets as the premises
subject to the leases include right-of-ways used in transporting
goods and raw materials between facilities as well as leases for
sales and business offices. The Debtors' continued and
uninterrupted use of these leaseholds is integral to the
viability of their businesses.
The Debtors tell the Court that as of this time, they simply are
not able to make determinations and decide on their unexpired
leases. The Debtors say that because of the complexity of the
ongoing reorganization process, the Debtors have not had a
sufficient opportunity to determine the value of each lease in
light of future business plan.
Acme Metals and its debtor-affiliates are engaged in the
business of steel manufacturing and fabricating. The Company
filed for chapter 11 bankruptcy protection on September 28,
1998. Brendan Linehan Shannon, Esq., and James L. Patton, Esq.,
at Young, Conaway, Stargatt & Taylor represent the Debtors in
their restructuring efforts. When the Debtors sought protection
from its creditors, it listed assets of $813 million and
liabilities of $541 million.
ADVANCED LIGHTING: Will Publish Fourth Quarter Results on Oct 15
----------------------------------------------------------------
Advanced Lighting Technologies, Inc., (Nasdaq: ADLT) expects to
release its fourth quarter and fiscal year financial results on
or before October 15, 2002. In conjunction with this release,
the Company will host a conference call with the investment
community to discuss the results of the quarter and other
developments in its business. Information regarding the
conference call will be provided at a later date.
The Company announced that it was filing a notice with the
Securities and Exchange Commission that the Company intends to
file its annual report on Form 10-K with the SEC on or before
October 15, 2002. The Company stated in its notice that the
events described in the Company's September 17, 2002 press
release had prevented completion and filing of the annual report
by its regular due date, September 30, 2002.
The Company will continue to operate under its bank credit
facility until at least October 10, 2002, as described in the
September 17 press release. The Company continues to seek an
amendment to its existing financing arrangements or replacement
financing to allow it to make the September 16 interest payment
on its Senior Notes due 2008 within the 30-day grace period.
Wayne Hellman, ADLT Chairman and Chief Executive Officer,
commented, "We continue to believe sales of ongoing operations
in our first quarter will be approximately $34 million. In
addition, preliminary results show that operational cash flow
exceeded $2 million in the months of July and August. Positive
cash flow over the last five months has allowed us to reduce our
bank debt by $4 million. All these factors, in addition to our
new lender discussions, give me great confidence that we can
conduct a refinancing satisfactory to our banks and Senior Note
Holders."
Advanced Lighting Technologies, Inc., is an innovation-driven
designer, manufacturer, and marketer of metal halide lighting
products, including materials, system components, systems and
equipment. The Company also develops, manufactures and markets
passive optical telecommunications devices, components and
equipment based on the optical coating technology of its wholly
owned subsidiary, Deposition Sciences, Inc.
AGWAY INC: Energy Businesses Excluded from Parent's Filing
----------------------------------------------------------
Agway's Energy businesses reported results for FY 2002 ending
June 30, 2002, including pre-tax profits of $10.5 million on
sales of $534 million, despite one of the warmest winters on
record. The earnings represent consolidated pre-tax profits
from Agway Energy Products LLC, Agway Energy Services, Inc., and
Agway Energy Services - PA, Inc., which together market all
forms of energy fuels as well as energy equipment installation
and service to homes, farms and businesses. Agway Energy
Products is the second largest heating oil retailer in the U.S.,
and among the nation's top ten propane marketers.
The Company also generated over $50 million in cash from
operations this year. The energy businesses, which also include
a rapidly growing natural gas and electricity customer base as a
result of deregulation, have focused on providing "total energy
solutions" to consumers through both energy fuel and equipment
offerings.
Agway Energy Products also announced that it is not included in
Agway Inc.'s Chapter 11 proceeding filed. The operations,
customers and employees of Agway Energy Products, including
Agway Energy Services, Inc., and Agway Energy Services - PA,
Inc., should not be affected by the filing. Although Agway
Energy Products is a wholly owned subsidiary of Agway, Inc.,
Agway Energy Products is a separate company.
Mike Hopsicker, President of Agway Energy Products, said, "Agway
Energy Products continues to be a performance leader among
Agway's portfolio of businesses. We intend to stay focused on
maintaining that track record of profitability and growth. Our
goal is to become the Northeast region's leading provider of
'total energy solutions,' by building our customer base and
expanding our offerings of products and services."
Agway Energy Products currently has a customer base of
approximately 500,000 customers throughout New York,
Pennsylvania, New Jersey and Vermont. The Company's energy
equipment sales, installation and service revenues have
increased by 80% since 1996, and over 60,000 new natural gas &
electricity customer relationships have been established. In
addition, the Company has a growing propane customer base, and
has pioneered innovative heating oil solutions such as
SmartBuy(R) -- which provides price protection and budget plans
for consumers.
Agway Energy Products offers experienced energy equipment
service and emergency response, the newest technology in
equipment, appliance checks and energy audits, maintenance plans
and Precision Tune-ups, personalized payment programs and
financing, among its broad array of products and services. "In
the dynamically changing energy market, Agway Energy Products
has been ahead of its time in providing products and services
that meet its customers' energy needs," added Mr. Hopsicker.
"We're right on the cutting edge of the market."
Agway Energy Products, based in Syracuse, N.Y., provides fuel,
equipment and service to more than 500,000 customers in homes,
farms and businesses throughout Pennsylvania, New Jersey, New
York and Vermont. For more information, call 1-888-AGWAY24, or
visit them on the Web at http://www.agwayenergy.com
ALAMOSA HOLDINGS: Senior Lenders Agree to Relax Loan Covenants
--------------------------------------------------------------
Alamosa Holdings, Inc. (NYSE: APS), the largest PCS Affiliate of
Sprint (NYSE: FON, PCS) based on number of subscribers, has
reached an agreement with its senior lending group to modify
certain financial covenants in its $225 million senior secured
credit facility. Alamosa is also providing preliminary third
quarter estimates for net subscriber additions and customer
churn and updating its guidance for the remainder of 2002.
"Given the challenging environment for subscriber growth, we
felt it was necessary to work proactively with our lenders to
address marketplace concerns about compliance with covenants
under our senior secured credit facility," said David E.
Sharbutt, Chairman & Chief Executive Officer of Alamosa
Holdings, Inc. "We are extremely pleased with the total support
of our senior lending group. This agreement should alleviate
investor concern over future covenant issues for Alamosa. It
also provides good operating flexibility as we execute our
business plan and focus on achieving our next important
milestone of positive free cash flow in 2003."
The new agreement modifies certain covenants, including the
minimum subscriber covenant for September 30, 2002 and December
31, 2002, which were revised to 575,000 and 610,000
respectively. The agreement also modifies other covenants for
the year ending December 31, 2003 and increases the interest
rate paid by 25 basis points. For amendment details, see the
Company's Form 8-K to be filed with the Securities and Exchange
Commission, which will include the text of the amendment as an
exhibit.
Alamosa also announced that it estimates net subscriber
additions for third quarter will be approximately 19,000 with
customer churn estimated to be approximately 3.7 percent. "We
are pleased to have delivered third quarter net subscriber
additions, bringing our subscriber base to approximately
590,000. We are working very hard to get our churn down to
manageable levels and returning to a more normal rate of net
subscriber additions," said Mr. Sharbutt.
Alamosa also is providing the following updated 2002 full year
guidance:
* Ending subscribers in the range of 610,000 to 620,000, a
reduction from previous guidance of 693,000 to 713,000
subscribers.
* Customer churn decreasing in the fourth quarter.
* Full-year EBITDA within the range of $10 to $20 million.
* ARPU to remain stable.
* Capital expenditures of $75 million.
Alamosa continues to expect to be over funded in excess of $50
million at the point of becoming free cash flow positive in
2003.
Alamosa Holdings, Inc., is the largest PCS Affiliate of Sprint
based on number of subscribers. Alamosa has the exclusive right
to provide digital wireless mobile communications network
services under Sprint's PCS division throughout its designated
territory located in Texas, New Mexico, Oklahoma, Arizona,
Colorado, Utah, Wisconsin, Minnesota, Missouri, Washington,
Oregon, Arkansas, Kansas, Illinois and California. Alamosa's
territory includes licensed population of 15.8 million
residents.
Sprint operates the nation's largest all-digital, all-PCS
wireless network, already serving more than 4,000 cities and
communities across the country. Sprint has licensed PCS
coverage of more than 280 million people in all 50 states,
Puerto Rico and the U.S. Virgin Islands. In August 2002, Sprint
became the first wireless carrier in the country to launch next
generation services nationwide delivering faster speeds and
advanced applications on Vision-enabled Phones and devices. For
more information on products and services, visit
http://www.sprint.com/mr Sprint PCS is a wholly-owned tracking
stock of Sprint Corporation trading on the NYSE under the symbol
"PCS." Sprint is a global communications company with
approximately 75,000 employees worldwide and $26 billion in
annual revenues and is widely recognized for developing,
engineering and deploying state-of-the art network technologies.
* * *
As reported in Troubled Company Reporter's June 28, 2002
edition, Standard & Poor's placed its single-'B'-minus corporate
credit rating on Alamosa Holdings Inc., on CreditWatch with
negative implications due to Standard & Poor's increased
concerns over the impact of Alamosa's slowing growth on covenant
compliance and liquidity.
Alamosa Holdings Inc.'s 12.875% bonds due 2010 (APCS10USR1) are
trading at 5.5 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=APCS10USR1
for real-time bond pricing.
ALLMERICA FIN'L: Moody's Slashes Senior Unsecured Rating to Ba1
---------------------------------------------------------------
Moody's Investors Service took several downward credit rating
actions on Allmerica Financial Corp. and its subsidiaries.
Ratings remain on review with direction uncertain.
Ratings Action To From
Allmerica Financial Corporation (AFC)
- senior unsecured Ba1 Baa2
- commercial paper rating Not Prime Prime-2
AFC Capital Trust 1
- preferred stock rating Ba2 Baa3
First Allmerica Financial Life Insurance Company (FAFLIC)
- insurance financial strength rating Ba1 A3
- short-term insurance financial
strength rating Not Prime Prime-2
Allmerica Financial Life Insurance and Annuity Company (AFLIAC)
- insurance financial strength rating Ba1 A3
Premium Asset Trust Series 2002-3
- senior debt rating Ba1 A3
Premium Asset Trust Series 1999-1
- senior debt rating Ba1 A3
Moody's says, "the downgrade reflects the concerns about
declining statutory capital at AFC's life insurance subsidiaries
and the likelihood that the continuing decline in equity markets
and credit problems in the capital markets will continue to
pressure the companies' statutory capital positions."
Moody's expects a further decline in statutory capital for the
life subsidiaries. It also believes that the company has limited
access to new capital.
Allmerica Financial Corporation is headquartered in Worcester,
Massachusetts.
AMERICA WEST: Appoints Derek Kerr as New Chief Financial Officer
----------------------------------------------------------------
America West Airlines (NYSE: AWA) announced that Derek Kerr has
been elected senior vice president and chief financial officer.
Kerr was previously senior vice president, financial planning
and analysis for America West.
"We're thrilled to promote Derek Kerr to chief financial
officer," said Doug Parker, chairman and chief executive
officer. "With 12 years of airline finance experience and
strong leadership skills, Derek is well prepared to lead America
West's continued financial improvements."
Kerr, 37, joined America West in 1996 as senior director of
financial planning. He was promoted to vice president,
financial planning and analysis in 1998 and subsequently
promoted to senior vice president, financial planning and
analysis when his responsibilities were expanded to include
purchasing and fuel administration.
Prior to joining America West, Kerr held a number of finance
positions over the course of five years at Northwest Airlines.
Kerr has a bachelor of science degree in aerospace engineering
and a master of business administration degree, both from the
University of Michigan.
Kerr replaces Bernie Han who has resigned effective October 14
to become chief financial officer for Northwest Airlines.
"We thank Bernie for his significant contributions to America
West over the past seven years and particularly for the key role
he played in restructuring the airline and securing our
stabilization loan a year ago," said Parker. "With our strong
cash position and margin performance relative to other airlines
today, Bernie leaves America West well-positioned to weather the
current industry downturn. I am certain Northwest will be well
served with him as their CFO."
"I am extremely thankful to have had the opportunity to work
with so many talented and good people at America West," said
Han. "With its strong management team, low cost structure,
operational turnaround and solid business model, America West is
well-positioned for long term success."
America West Airlines is the nation's largest low-fare, hub-and-
spoke airline. Founded in 1983, it is the only carrier formed
since deregulation to achieve major airline status. Today,
America West is the nation's eighth-largest carrier and serves
88 destinations in the U.S., Canada and Mexico. America West is
a wholly owned subsidiary of America West Holdings Corporation,
an aviation and travel services company with 2001 sales of
$2.1 billion.
As reported in Troubled Company Reporter's June 6, 2002 edition,
Standard & Poor's raised America West's junk corporate credit
rating to 'B-'.
AMERIDIAN VENTURES: TSX Knocks-Off Shares for Non-Compliance
------------------------------------------------------------
Effective at the close of business September 27, 2002, the
common shares of Ameridian Ventures Inc., were delisted from TSX
Venture Exchange for failing to maintain Exchange Listing
Requirements. The securities of the Company have been suspended
in excess of twelve months.
ANC RENTAL: Seeks Approval to Expand Ernst & Young's Engagement
---------------------------------------------------------------
William J. Burnett, Esq., at Blank Rome Comisky & McCauley LLP,
in Wilmington, Delaware, tells the Court that since Ernst &
Young's engagement, it has performed for ANC Rental Corporation
and its debtor-affiliates various tax services and business
license compliance services that were not included in the
Debtors' previous application. The additional services were
rendered beginning September 4, 2002.
The Debtors now seek the Court's authority to supplement Ernst &
Young's retention. Specifically, the Debtors expect Ernst &
Young to provide:
A. various tax services to Debtors, including tax review,
calculation and analysis relating to the Debtors' bankruptcy
restructuring and post-bankruptcy operations, and
B. business license compliance services, including analyzing the
business license requirements for the Debtors, to conduct a
review of the Debtors compliance with business license
requirements and to prepare business licenses for the
Debtors.
Aside from reimbursement of actual and necessary expenses, Ernst
& Young will be paid based on the hourly rates of its
professionals rendering tax services and business licenses
services:
Partners $525
Principals 525
Senior Managers 425
Managers 315 - 330
Seniors 225 - 240
Staff 160 - 175
Paraprofessional 85 - 100
(ANC Rental Bankruptcy News, Issue No. 20; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
ARBEK MANUFACTURING: Buxbaum to Auction-Off Assets on October 18
----------------------------------------------------------------
Price reductions of 60%-off retail are now being offered on
solid oak bedroom furniture and home entertainment centers in a
going-out-of-business sale at the Arbek Manufacturing plant at
13780 Central Ave., in Chino. Buxbaum/Century Services, which is
managing the sale, also announced that it has scheduled an
auction of the 200,000-square-foot facility's machinery and
equipment for October 18th.
The company, which was founded in 1982, is shutting its doors
following a bank foreclosure. Arbek had sold its oak furniture
through over 1,000 retailers nationally, ranging from the
Haverty, Wickes and Levitz chains, to independent merchants.
The sale includes all inventory on hand at the Chino facility.
Arbek's inventory, which includes full sets and individual
pieces, was valued at $2.5 million (at retail) when the sale
began on September 13. At that time, discounts of 40%-off were
being offered.
Hours for the sale are 10:00 a.m. to 7:00 p.m., seven days a
week. Consumers can pay by cash, Visa or MasterCard. Checks are
not accepted.
Buxbaum/Century's auction of the machinery and equipment will
begin at 10:00 a.m. on October 18th, with a preview from 9:00
a.m. to 6:00 p.m. on October 17th. Items being auctioned will
range from panel and case goods woodworking machinery to
warehouse equipment and office furnishings and equipment.
Calabasas, Calif.-based Buxbaum/Century is a joint venture
between Buxbaum Group and Century Services, a leading specialist
in industrial equipment appraisals and liquidations,
headquartered in Calgary, Alberta. Buxbaum/Century Services was
formed in 2000 to provide machinery and equipment appraisal and
auction services for financial institutions and corporations
throughout North America.
Buxbaum Group, also headquartered in Calabasas, provides
inventory appraisals, auctions on both fixed and liquid assets,
turnaround and crisis management, as well as other consulting
services for banks and other financial institutions with retail,
industrial, wholesale/distribution and consumer-product
manufacturing clients. The firm also provides liquidation
services on an equity or consultative basis for consumer-product
inventories, machinery and equipment. Additionally, Buxbaum buys
and sells consumer-product inventories on a closeout basis.
BACKWEB TECHNOLOGIES: Slashing 44% of Total Workforce Worldwide
---------------------------------------------------------------
BackWeb Technologies (Nasdaq: BWEB), the leading provider of
ProactivePortal(TM) technologies for the enterprise, expects
revenue for the third quarter, ending September 30, 2002 to be
between $700,000 and $900,000. Loss per diluted share for the
third quarter is expected to be between $0.12 and $0.14
(excluding special charges related to the reduction in force,
amortization charges related to intellectual property, other
intangibles and deferred stock compensation).
The company also announced that it is reducing its workforce by
approximately 60 positions worldwide, or 44 percent of its total
workforce. The reduction is across all functions of the company.
Excluding restructuring charges, the company anticipates
annualized savings of $8.2 to $8.5 million from this reduction
in force, including savings from the closing or consolidation of
several facilities worldwide, the write-off of related assets
and the reduction of other expenses. The cost-savings are
expected to begin to have an impact in the December 2002
quarter. The company will take a special charge of $4.0 to $4.4
million in the September 2002 quarter to cover reduction costs.
"The prolonged economic downturn continues to affect IT spending
budgets, and therefore our ability to close deals," said Eli
Barkat, chairman and CEO of BackWeb Technologies. "While we are
certainly disappointed with these results, we continue to be
focused on building our leadership position in the enterprise
portal market and will continue to leverage the relationships
with our strategic portal partners going forward.
"[Mon]day's layoffs are difficult but appropriate to better
align our operating expenses with current and expected revenues.
We will continue to aggressively pursue the core components of
our business strategy -- strengthen existing partnerships and
customer relationships, forge new relationships, position our
technology as "must-have" within the portal space and protect
our cash position -- and we do not anticipate this reduction in
workforce will materially affect our install base or partnership
relationships."
October 22 Conference Call Information
BackWeb will be releasing its full results for the third quarter
2002 on Tuesday, October 22 after the market close. A
conference call will be held at 2:00 p.m. Pacific Time that day.
Those wishing to join should dial 630-395-0018, passcode
"BackWeb" at approximately 1:45 p.m. A live webcast of the
conference call will also be available via the company's Web
site at http://www.backweb.com A replay of the call will be
available starting one hour after the completion of the call
until October 29, 2002. To access the replay, please dial 402-
220-4159.
BackWeb Technologies provides ProactivePortal technologies that
enable organizations to maximize their portal content investment
by prioritizing, delivering and ensuring the receipt of critical
information to their extended enterprise of customers,
suppliers, partners and employees. BackWeb customers such as
Cisco, Hewlett-Packard, Ericsson and IBM have deployed BackWeb
content delivery technology to manage critical content
communications with customers, partners and associates. BackWeb
has several strategic alliances with consulting and technology
firms including IBM, IBM BCS and SAP among others. BackWeb
Technologies is headquartered in San Jose, California, and
Ramat-Gan, Israel. For more information, visit its Web site at
http://www.backweb.comor call 800-863-0100.
* * *
As reported in Troubled Company Reporter's August 22, 2002
edition, BackWeb Technologies received a Nasdaq Staff
Determination stating that the company had not met the minimum
bid price requirement of $1.00 per share as required in
Marketplace Rule 4450(e)(2) for continued listing on The Nasdaq
National Market. As a result, BackWeb's ordinary shares are
subject to delisting from The Nasdaq National Market.
BCE INC: BCI Shareholder Files $1-Billion Class Action Suit
-----------------------------------------------------------
A lawsuit has been filed with the Ontario Superior Court of
Justice against BCE Inc., by Wilfred Shaw, a common shareholder
of Bell Canada International Inc. The plaintiff is seeking the
Court's approval to proceed by way of class action on behalf of
all persons who owned BCI common shares on December 3, 2001. The
lawsuit seeks C$1 billion in damages from BCI and BCE in
connection with the issuance of BCI common shares on February
15, 2002 pursuant to BCI's Recapitalization Plan and the
implementation of BCI's Plan of Arrangement approved by the
Ontario Superior Court of Justice on July 17, 2002.
BCE is of the view that the allegations contained in the lawsuit
are frivolous and entirely without merit and intends to take all
appropriate actions to vigorously defend its position. BCE will
seek to recover its costs incurred as a result of the defence of
the lawsuit.
BCE is Canada's largest communications company. It has 24
million customer connections through the wireline, wireless,
data/Internet and satellite services it provides, largely under
the Bell brand. BCE leverages those connections with extensive
content creation capabilities through Bell Globemedia which
features some of the strongest brands in the industry - CTV,
Canada's leading private broadcaster, The Globe and Mail,
Canada's National Newspaper and Sympatico-Lycos, the leading
Canadian Internet portal. As well, BCE has extensive e-commerce
capabilities provided under the BCE Emergis brand. BCE shares
are listed in Canada, the United States and Europe.
BCF LLC: Fitch Ratchets Class F Notes Rating Up a Notch to BB+
--------------------------------------------------------------
Fitch Ratings upgrades BCF L.L.C.'s commercial mortgage pass-
through certificates, series 1997-C1, $5.4 million class E to
'AA' from 'BBB+', $3.2 million class F to 'BB+' from 'BB', and
interest-only class E-IO to 'AA' from 'BB'. In addition, Fitch
affirms the interest-only class X-2 at 'AAA'. The rating for
class D has been withdrawn since Fitch's last review, as the
class has been paid in full. The class G and class TA
certificates are not rated by Fitch. The rating actions follow
Fitch's annual review of the transaction, which closed in
October 1997.
The upgrades are primarily attributable to significant increases
in subordination levels due to amortization, prepayments and
payoffs of matured loans. The pool's collateral balance has been
reduced by 86%, as of the September 2002 distribution, to $18.4
million from $128.4 million at closing. 98 of the pool's
original 552 loans remain, with an average loan size of
$188,000, down from $233,000 at closing. The borrowers are not
required to report financial information for these loans.
However, the loans are well-seasoned, with staggered maturity
dates; 76 loans (85%) have over ten years of seasoning. Another
strength of this deal is that 82 loans (61%) are fully
amortizing.
Currently, there are 19 loans (19.7%) being specially serviced
by Ocwen Federal Bank, FSB. 13 (16.6%) of the pool's 14 (16.9%)
delinquent loans are being specially serviced, including two
(9.4%) that are real estate owned. Following discussions with
Ocwen, Fitch considers the unrated class G as more than
sufficient to absorb any expected losses on these loans of
concern. To date the pool has realized losses totaling $2.8
million from the disposition of 17 assets since closing. Fitch
calculated expected losses whereby the loans of concern were
expected to default at various stress scenarios; the resulting
credit enhancement levels were sufficient to upgrade classes E,
E-IO and F. Class F currently has a cumulative interest
shortfall of approximately $105,000.
Fitch will continue to monitor this transaction, as surveillance
is ongoing.
BIRCH TELECOM: Successfully Emerges from Chapter 11 Proceeding
--------------------------------------------------------------
Birch Telecom has successfully completed the reorganization of
its debt and emerged from bankruptcy, just two months after
filing for Chapter 11, the company announced.
"The completion of this transaction, in which our institutional
lenders exchanged $233M of debt for equity in the company, has
significantly improved Birch's financial position," said Dave
Scott, president and CEO of Birch.
"The resulting reduction in bank and bondholder debt, combined
with the positive operating cash flow we started generating
earlier this year, assures that Birch will be around for the
long haul," Scott added.
Birch joins a select group of telecommunications service
providers that have been able to quickly emerge from bankruptcy.
Scott emphasized that none of Birch's suppliers were impacted by
the reorganization.
"All of the companies providing goods and services to Birch have
been paid on a full and timely basis throughout the process,"
Scott said. "We neither sought nor received any reduction in
trade debt.
"Now that we're done, we can again focus 100 percent of our
efforts on delivering the honest value and better way of doing
business upon which we've built our reputation," Scott added.
"We look forward to serving our customers for years to come."
Scott noted the loyalty Birch's business and residential
customers have demonstrated during the restructuring process,
and he credited the company's value proposition, which touts
superior service at reduced rates, with fueling continued
growth.
Despite filing for bankruptcy at the end of July, Birch's sales
figures for August were up 20 percent and are projected to be at
about the same level for September.
"It is truly gratifying that we continued to grow the business
even as we were going through the Chapter 11 process," Scott
said. "The fact that our customers were absolutely unaffected by
the process helped to minimize any concerns about Birch's
financial status."
Scott stressed that he is extremely proud that Birch moved
quickly through the process without compromising the interests
of not only customers and suppliers but employees as well.
"I said there would be no affect on Birch employees, and there
wasn't," Scott said. "We had no layoffs, no force reductions and
no change in wages or benefits."
As anticipated, the United States District Court for the
District of Delaware approved the company's plan, without
modification, less than two weeks ago, clearing the way for the
company to emerge from bankruptcy Monday.
Banks and bondholders representing 95% of Birch's debt endorsed
the reorganization plan submitted with the company's Chapter 11
filing two months ago. The company had been working since early
this year to reach agreement with its lenders on the specifics
of the plan.
Under the plan, bank lenders have cut their debt in half to
about $100 million and received 80 percent of the company's
equity. Bondholders exchanged all their debt -- about $133
million -- for a 20 percent stake in the company.
Serving small to mid-size businesses and residential customers,
Birch Telecom offers local and long-distance telephone services
on one bill across more than 40 major metro markets in 10
states. In addition, high-speed Internet access -- including T-
1, DSL and ISDN -- is available to businesses in 12 major
markets across Kansas, Missouri, Oklahoma and Texas. For more
information about Birch, visit http://www.birch.com Or, to get
Birch telephone service in your home, call toll-free (866) 347-
3843.
BRITISH ENERGY: Fitch Hatchets Sr. Unsec. Rating Down 2 Notches
---------------------------------------------------------------
Fitch Ratings, the international rating agency, has downgraded
the Senior Unsecured rating of British Energy plc to 'B-' from
'B+' following clarification of the structure of the short-term
funding which is being provided for a further two months until
29 November 2002 by the UK Government. The ratings remain on
Rating Watch Evolving.
The new facility is cross-guaranteed by all material operating
subsidiaries which represents a superior package to that granted
to existing senior unsecured creditors. Further, the provision
of the government facility includes a requirement to provide a
first fixed and floating charge over certain group assets on
request.
The new government facility of GBP650 million is larger than the
GBP410m facility it supercedes and as such would allow the
secured debt to comprise a higher proportion of overall debt in
the group. Further, the superior security package and the
ability to create material security severely weakens the
position of unsecured creditors under an insolvency scenario.
The ratings remain on Rating Watch Evolving, recognising the
various drivers of BE's cashflow, some of which are under the
company's control, which could change to the company's advantage
in certain combinations and have the potential to substantially
improve its cashflow.
The Short-term rating remains unchanged at B (speculative).
BUDGET GROUP: Cendant's Bid to be Tested at Oct. 24 Auction
-----------------------------------------------------------
To be certain that their estates receive maximum value for the
assets they propose to sell to Cendant, Budget Group Inc., and
its debtor-affiliates obtained Court approval of certain uniform
Sales Procedures and Bidding Protections for Cendant in the
event its offer is topped by another bidder.
Judge Walrath sets the Auction Date on October 24, 2002.
Parties wishing to submit better and higher offers must submit
their bids on or before October 22, 2002 to the New York Office
of Lazard Freres & Co. LLC. The final Sale Hearing will be on
October 28, 2002.
To avoid a chaotic sale process and to permit the Company and
other core parties-in-interest to compare bids on an apples-to-
apples basis, the Debtors require that:
A. Bidders desiring to bid on the Acquired Assets must:
-- execute a confidentiality agreement customary for the
transactions of this type, in form and substance
satisfactory to the Debtors and no more favorable in the
aggregate to the Potential Bidder than that delivered by
the Buyer and Cendant, and
-- provide the Debtors with financial statements of the
Potential Bidder.
If the Potential Bidder is an entity formed for the purpose
of acquiring the Acquired Assets of the Debtors, current
financial statements of the equity holder(s) of the Potential
Bidder who will either guarantee the obligations of the
Potential Bidder or provide any other form of financial
disclosure or credit-quality support information or
enhancement acceptable to the Debtors and their advisors.
Those Potential Bidders satisfying these initial requirements
are referred to as Overbidders;
B. After determining in the Debtors' business judgment in
consultation with the Official Committee of Unsecured
Creditors -- based on availability of financing, experience
and other considerations -- that the Potential Bidder has the
financial ability to consummate a purchase of the Acquired
Assets in a timely fashion, the Debtors are required to
notify the Potential Bidder in writing of its Overbidder
status within 2 Business Days of the Potential Bidder
delivering all of the initial materials required;
C. Concurrent with the Debtors notifying the Potential Bidder of
its Overbidder status, the Debtors are required to provide to
the Overbidder:
-- Access to the same confidential evaluation materials
provided by the Debtors to the Buyer containing financial
information and other data relative to the Acquired
Assets sought to be acquired and any other information as
the Overbidder may reasonably request -- provided, that
the additional information also be provided to the Buyer;
and
-- A copy of the Agreement, marked to delete references to
the Termination Amount which is payable only to the
Buyer;
D. The Debtors will consider only Overbids from Overbidders. To
be an Overbid, the bid must:
-- Be an offer to purchase the Acquired Assets from the
Debtors and assume or satisfy the Assumed Liabilities of
the Debtors upon the terms and conditions set forth in a
copy of the Agreement, marked to show any amendments and
modifications to the Agreement,
-- Be irrevocable until the earlier of:
(a) 48 hours after the closing of the sale to the
Successful Bidder or
(b) 20 days after the Sale Hearing,
-- Be accompanied by written evidence of a commitment for
financing or other evidence of ability to consummate the
transaction satisfactory to the Debtors and a $10,000,000
deposit in the form of a bank check -- which may be
substituted by a wire transfer pursuant to instructions
to be issued by the Debtors upon request -- as the Good
Faith Deposit,
-- Produce value to the Debtors and its creditors that is at
least $3,000,000 greater than that produced by the
Agreement with the Buyer, taking into consideration the
factors deemed relevant by of consummating the Sale and
the Termination Amount,
-- Be in the form of the Agreement provided by the Debtors
marked to show all changes thereto and contains terms and
conditions not materially more burdensome to the Debtors
than the terms and conditions contained in the Agreement
of the Buyer, including, but not limited to, the timing
of the Closing,
-- Not be subject to financing contingencies or unperformed
due diligence,
-- Be accompanied by any other information reasonably
requested by the Debtors, and
-- Be submitted on or before October 22, 2002, at 5:00 p.m.
(prevailing Eastern Time);
E. Only the Buyer and those Overbidders submitting an Overbid
will be allowed to participate in the Auction. If Overbids
have been received from at least one Overbidder other than
the Buyer, the Debtors will conduct an Auction with respect
to the Sale. The Auction take place at the offices of Lazard
Freres & Co. LLC, 30 Rockefeller Plaza, 61st Floor in New
York, New York on October 24, 2002. At least one Business Day
before the Auction Date, each Overbidder submitting an
Overbid must inform the Debtors whether it intends to
participate in the Auction;
F. No later than 5:00 p.m. (prevailing Eastern Time) on October
22, 2002, the Debtors must give the Buyer and all other
Overbidders a copy of the highest and best Overbid received,
as determined in the business judgment of the Debtors based
on the factors prescribed in the Bidding Procedures;
G. Bidding at the Auction will commence with the Initial
Successful Bid. At the Auction, Overbidders will be
permitted to increase their Bids in increments of not less
than $1,000,000 greater than the value proposed in the
initial Successful Bid. All Bids will be made and received
in one room, on an open basis, and all other participating
Overbidders will be entitled to be present for all bidding
with the understanding that the true identity of each
participating Overbidder will be fully disclosed to all other
bidders and that all material terms of each Bid will be fully
disclosed to all other participating Overbidders throughout
the entire Auction. Bidding will continue until the highest
and best offer for the purchase of the Acquired Assets is
determined by the Debtors in their business judgment, in
consultation with the Committee. Upon the failure to
consummate the sale because of a breach or failure to perform
on the part of the Successful Bidder, the next highest and
otherwise best Overbid, as approved at the Sale Hearing, will
be deemed to be the Successful Bid;
H. The Good Faith Deposit will be held in escrow until earlier
of the later of two Business Days after consummation of the
Sale or twenty days after the Sale Hearing or the date upon
which the Agreement is terminated; and
I. In the event the Debtors fail to receive an Overbid by the
Bid Deadline, the Debtors will not conduct the Auction and
will proceed with the Sale to the Buyer pursuant to the terms
of the Agreement, subject to the approval of the Bankruptcy
Court at the Sale Hearing. (Budget Group Bankruptcy News,
Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-
0900)
BURLINGTON: Wants to Enter into Amendment to $125M DIP Agreement
----------------------------------------------------------------
Burlington Industries, Inc., and its debtor-affiliates seek the
Court's authority to:
(i) enter into a third amendment to the Revolving Credit
and Guaranty Agreement; and
(ii) provide additional adequate protection to the Debtors'
prepetition lenders under the Agreement.
Rebecca L. Booth, Esq., at Richards, Layton & Finger P.A., in
Wilmington, Delaware, relates that the Debtors have been engaged
in productive discussions with the Creditor's Committee, the
Agent, the Banks and the Prepetition Lenders. The discussions
include the Debtors' solicitation of acceptances of the Plan of
Reorganization and an amendment to the Credit Agreement that
would allow the Debtors to pursue and consummate additional
asset sales and to make adequate protection payments to the
Prepetition Lenders.
Ms. Booth reports that the Debtors and the Agent have agreed on
the Amendment and additional adequate protection, subject to the
approval of the Court and the Banks. The Agent has agreed to
increase by an additional $31,300,000 -- the limitation imposed
upon asset dispositions by the Debtors under Section 6.11 of the
Credit Agreement. The new Section 6.11(vi) of the Credit
Agreement will permit the Debtors to sell "in arm's length
transactions, at fair market value and for cash in an aggregate
amount not to exceed an additional $31,300,000 (other than sales
permitted by Clause (vii)" their assets without obtaining the
consent of the Agent or the Banks. The new Section 6.11(vii),
in turn, permits the sales of certain assets of the Debtors to
Burlington Investment II, Inc. and Gibbs International, Inc. as
approved by Order of the Court.
Ms. Booth adds that in connection with the Amendment, the
Debtors have agreed to provide the Prepetition Lenders with
additional adequate protection, pursuant to Sections 361, 362
and 363 of the Bankruptcy Code. The additional adequate
protection consists of:
-- the payment of $11,300,000 from the Net Proceeds of sales
of assets constituting prepetition collateral of the
prepetition Lenders; and
-- a cash payment of $33,700,000, payable upon entry of an
Order approving the Amendment.
In connection with the increase of the asset sale basket to
$31,300,000, the Payment Schedule would be:
-- the first $1,300,000 of the Net Proceeds of the Asset
Sales will be paid to the Prepetition Lenders;
-- the second $10,000,000 of the Net Proceeds of the Asset
Sales will be retained by the Debtors; and
-- the remaining $20,000,000 of the Net Proceeds of the
Asset Sales will be divided equally among the Debtors and
the Prepetition Lenders.
Ms. Booth contends that the requested relief is in the best
interests of the Debtors' estates because:
(a) the Amendment is necessary to insure that they have the
continued ability to sell, and thereby maximize the
value of, their non-core assets, which in turn will
continue to improve the Debtors' liquidity and cash
position;
(b) providing adequate protection is necessary to protect
the interests of the Prepetition Lenders in the Debtors'
assets given the priming lien of the Agent and the Banks
and the Debtors' ongoing use, and where appropriate,
sale of those assets; and
(c) the terms of the Amendment are fair and reasonable and
were negotiated by the parties in good faith and at
arm's length. (Burlington Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
Burlington Industries' 7.25% bonds due 2005 (BRLG05USR1),
DebtTraders reports, are trading at 27 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BRLG05USR1
for real-time bond pricing.
CANMINE RESOURCES: Opens Data Room to Potential Investors
---------------------------------------------------------
Canmine Resources Corporation (TSX Symbol: CMR) updates
shareholders on its restructuring progress over the past month.
The restructuring has been initiated under the Companies
Creditors Arrangement Act.
The various requirements under CCAA are proceeding on an orderly
basis and discussions are being held with interested parties to
fully develop the restructuring plan. A data room has been
opened at the Canmine Refinery for the purposes of receiving
potential strategic partners or significant investors. Beacon
Group Advisors of Toronto is advising the company on the
restructuring process and the company is pleased with the
progress to date.
Canmine owns a 100% interest in a newly retrofitted cobalt-
nickel refinery located in Cobalt, Ontario. To date, Canmine has
invested $14.5 million, including acquisition costs, to upgrade
the Canmine Refinery which was originally built in 1995 at an
estimated cost of $30 million. The Canmine Refinery employs
pressure acid-leach, solvent extraction, and Merril-Crowe
precipitation to produce cobalt and nickel chemical compounds
along with copper, silver and other metal by-products. The
company also owns an inventory of cobalt-silver feedstock for
the refinery, a cobalt deposit in north-western Ontario, a
nickel deposit in Manitoba, and a nickel exploration project
north-east of Thompson, Manitoba.
CAPCO AMERICA: Fitch Affirms Low-B Ratings on Classes B1 to B5
--------------------------------------------------------------
CAPCO America Securitization Corp.'s commercial mortgage pass-
through certificates, series 1998-D7, $183.6 million class A-1A,
$632.3 million class A-1B, and interest-only class PS-1
certificates are affirmed at 'AAA' by Fitch Ratings. In
addition, Fitch affirms the $62.3 million class A-2 certificates
at 'AA', $68.5 million class A-3 at 'A', $59.2 million class A-4
at 'BBB', $21.8 million class A-5 at 'BBB-', $31.1 million class
B-1 at 'BB+', $28 million class B-2 at 'BB', $15.6 million class
B-3 at 'BB-', $24.9 million class B-4 at 'B' and $15.6 million
class B-5 at 'B-'. The $21.8 million class B-6 and the $1,000
class B-6H certificates are not rated by Fitch. The affirmations
follow Fitch's annual review of the transaction, which closed in
September 1998.
The affirmations reflect the transaction's stable performance
and moderate reduction of the pool collateral balance since
issuance. As of the September 2002 distribution date, the pool's
aggregate certificate balance has been reduced by 6.5% to $1.16
billion from $1.25 billion at issuance. No loans have realized
losses. Four loans (3.8% of pool) have been defeased, including
The Banyan Pool I loan (2.9%), which Fitch considered as having
investment grade credit characteristics at issuance.
The pool is well diversified. The certificates are currently
collateralized by 193 mortgage loans. Twenty four loans (9.5%)
are credit tenant lease loans (CTL), secured by 136 properties
net leased to one of six creditworthy entities. However, only
1.3% is secured by properties leased to below investment grade
rated tenants. CapMark Services, L.P., the master servicer,
collected year-end 2001 financials for 96% of the non-defeased,
non-CTL loans. The CTLs and the defeased loans are not required
to report financials. The YE 2001 weighted average debt service
coverage ratio for those loans with financials was stable at
1.45 times compared to 1.45x as of YE 2000 and up from 1.28x at
issuance.
Five loans (2.5% by balance) are currently being specially
serviced by Lennar Partners, Inc. (Lennar), including a 30-day
delinquent (0.45%), a 90-day delinquent (0.51%), and a real
estate owned loan (1.02%). The REO loan is secured by a retail
property in San Antonio, TX. Several tenants including Service
Merchandise and Office Depot vacated and occupancy declined to
43%. According to Lennar, a letter of intent has been signed and
the transaction is scheduled to close in November 2002. A loss
of approximately $5 million is expected on this loan.
The pool has a 10.6% hotel concentration. This exposure is
mitigated by an improved credit rating for ACCOR, the leasee for
nine CTL loans (5.9% of pool). ACCOR is currently rated 'BBB+'
by Fitch, compared to 'BBB' at issuance. The second largest loan
(3.9%) in the pool is secured by the Soho Grand Hotel in the
Soho area of Manhattan. As of June 2002, the year-to-date
occupancy was 86%, up from 85% at issuance and 92% at YE-2000.
The trailing-twelve-month (ending June 2002) DSCR was 2.19x,
compared to 2.14x at issuance and 3.51x as of YE-2000. Fitch is
concerned about this property type and will continue to closely
monitor this loan and other loans with hotel exposure in this
deal. All hotel loans are current.
Three loans (4.8%) are subject to Kmart exposure. The 30-day
delinquent loan (0.45%) is in special servicing as Kmart,
occupying 59% of gross leasable area has closed and rejected the
lease. The borrower is trying to lease up the vacant space. The
cash flow form remaining tenants is nearly sufficient to meet
the debt service.
Fitch applied various hypothetical scenarios taking into
consideration all of the above concerns. Even under these stress
scenarios subordination levels remain sufficient to affirm the
ratings.
Fitch will continue to monitor this transaction, as surveillance
is ongoing.
CARAUSTAR: Completes $80-Mill. Purchase of Smurfit-Stone Assets
---------------------------------------------------------------
Caraustar Industries, Inc., (Nasdaq: CSAR) completed the
purchase of the industrial packaging operations of Smurfit-Stone
Container Corporation (Nasdaq: SSCC). The acquired business
operations included 17 tube and core manufacturing facilities, 3
fiber partition plants, and 3 uncoated recycled boxboard mill
operations. The approximate purchase price of $79.8 million
will be funded by $38 million of borrowings under Caraustar's
revolving credit facility, the assumption of $1.8 million of
industrial revenue bond debt, $9.6 million in operating leases
and $30.4 million in cash on hand.
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.
* * *
On April 8, 2002, Standard & Poor's lowered its corporate credit
ratings on recycled paperboard manufacturer Caraustar Industries
Inc to 'BB' and removed them from CreditWatch where they were
placed on December 20, 2001. Rating outlook is stable.
The rating action reflected expectations that weak market
conditions amid continuing overcapacity will prevent Caraustar
from improving credit measures to levels expected for the prior
rating. Although most of the company's operating issues have
been remedied, and new business volumes are starting to ramp up,
recycled paperboard demand is unlikely to rebound sufficiently
in the near term to significantly boost performance.
CELLPOINT INC: Awaits Accounting Guidance on Restructuring Deals
----------------------------------------------------------------
CellPoint Inc. (OTC Bulletin Board: CLPT), a global provider of
mobile location software technology and platforms, is presently
consulting on its proposed accounting for certain transactions.
Completion of this consultation is necessary before preliminary
financial statements for the year ended June 30, 2002 will be
released.
During the fiscal year ended June 30, 2002, CellPoint, and it
subsidiaries underwent financial and legal reconstruction.
Under U.S. Generally Accepted Accounting Principles there is no
clear authoritative guidance governing the accounting for
certain transactions resulting from the reconstruction.
Different approaches to the accounting would yield materially
different results.
The Company, in consultation with its Independent Auditors, has
determined what it believes to be the appropriate accounting for
these transactions. However, due to the significance of the
amounts involved and the lack of clear guidance regarding such
transactions, the Company has determined that it is in its best
interests to discuss the proposed accounting with the U.S.
Securities Exchange Commission, and has initiated such a
process.
The Company expects to file its Form 10-KSB incorporating the
appropriate accounting for this transaction no later than
October 14, 2002.
CellPoint Inc., (OTCBB:(CLPT.OB) and Stockholmsborsen: CLPT) is
a leading global provider of location determination technology
and carrier-class middleware, which enable mobile network
operators to rapidly deploy revenue generating location-based
services for consumer and business users, and to address mobile
E911/E112 security requirements.
CellPoint's two core products, Mobile Location System and Mobile
Location Broker, provide an open standard platform adapted for
multi- vendor networks with secure integration of third-party
applications and content. CellPoint's location platform has a
seamless migration path from GSM/GPRS to 3G, supports 500,000
location requests per hour and can easily be scaled-up to handle
increased traffic throughput.
CellPoint's early entry and experience with European mobile
operators has allowed the development of products and features
that address key requirements such as active and idle mode
positioning, location roaming, multiple location determination
technologies and consumer privacy.
CellPoint is a global company headquartered in Kista, Sweden.
For more information, please visit http://www.cellpoint.com
CHASE CMSC: Fitch Ups Ratings on Four Low-B-Rated Note Classes
--------------------------------------------------------------
Chase Commercial Mortgage Securities Corp.'s commercial mortgage
pass-through certificates, series 1997-2 is upgraded by Fitch
Ratings as follows: $32.6 million class B certificates to 'AA+'
from 'AA' and $48.8 million class C to 'A+' from 'A '. In
addition, Fitch affirms the $47.3 million class A-1, $390.1
million class A-2 and interest only class X at 'AAA', $44.8
million class D at 'BBB', $12.2 million class E at 'BBB-', $48.8
million class F at 'BB', $6.1 million class G at 'BB-', $12.2
million class H at 'B' and $8.1 million class I at 'B-'. The $10
million class J certificates are not rated by Fitch. The rating
affirmations follow Fitch's annual review of the transaction,
which closed in December 1997.
The upgrades reflect the increased subordination levels as a
result of amortization and loan payoffs combined with stable
performance since issuance. As of the September 2002
distribution date, the pool's aggregate collateral balance has
been reduced by approximately 19%, to $661.1 million from $813.9
million at issuance. The pool consists of 152 well diversified
commercial and multifamily mortgage loans.
GMAC Commercial Mortgage Corp., the master servicer, collected
year-end 2001 financials for 80% of the pool. According to this
information, the 2001 weighted average debt service coverage
ratio is 1.69 times, compared to a 1.66x at YE 2000 and 1.47x at
closing.
Currently two loans (1.1%) are being specially serviced. Both of
these loans remain current and one of the loans is expected to
be returned to the master servicer soon. The other loan(0.63%)
in special servicing is a retail property located in Cortland,
NY. The loan was transferred to special servicing due to the
anchor tenant, P & C Grocer, vacating; as of June 2002 occupancy
was 52%. In addition, 2.9% of the transaction has DSCRs below
1.00x; all of these loans remain current. Total losses have
amounted to approximately $4.2 million, with a weighted average
loss of 64%. Losses include a 100% loss on a $1.7 million dollar
hotel loan, which occurred in February 2002.
Fitch applied various hypothetical stress scenarios taking into
consideration all of the above concerns. Even under these stress
scenarios, the resulting subordination levels were sufficient to
upgrade the designated classes. Fitch will continue to monitor
this transaction, as surveillance is ongoing.
COMDIAL: Repays $12.7MM of Outstanding Debt to Bank of America
--------------------------------------------------------------
Comdial Corporation (Nasdaq: CMDL) announced that on Friday,
September 27, 2002, it closed on $14.5 million of a private
placement to accredited investors. This includes the conversion
of approximately $3.5 million of outstanding bridge notes. The
offering consisted of three year subordinated secured
convertible promissory notes and warrants to acquire shares of
common stock. The warrants are exercisable at $.01 for an
aggregate of approximately 68 million shares of the Company's
common stock. A portion of such warrants is subject to
forfeiture on a pro rata basis, if the notes are repaid during
the first eighteen months following their issuance. The holders
of these new securities have certain registration rights.
The Company used $6.5 million of the placement proceeds to repay
in full $12.7 million of its outstanding indebtedness to Bank of
America and to repurchase its Preferred Stock having a
liquidation value of $10 million.
Comdial chief financial officer, Paul K. Suijk stated, "The
private placement proceeds enable us to complete our previously
stated capitalization objectives. The proceeds provide us the
financial flexibility required to execute our business plan.
Going forward, we can now devote all our time on serving our
existing customer base, exploring new and exciting product
opportunities, and generating new customers who can now look at
a significantly improved financial picture of the Company."
Comdial Corporation, headquartered in Sarasota, Florida,
develops and markets sophisticated communications solutions for
small to mid-sized offices, government, and other organizations.
Comdial offers a broad range of solutions to enhance the
productivity of businesses, including voice switching systems,
voice over IP (VoIP), voice processing and computer telephony
integration solutions. For more information about Comdial and
its communications solutions, please visit its Web site at
http://www.comdial.com
* * *
Debt Restructuring
On June 21, 2002, ComVest entered into an agreement with
Comdial's senior bank lender to purchase the bank's
approximately $12.7 million senior secured debt position,
outstanding letters of credit of $1.5 million, and 1,000,000
shares of Series B Alternate Rate Convertible Preferred Stock
(having an aggregate liquidation preference of $10.2 million)
for a total of approximately $8.0 million. Although there can be
no assurances, it is expected that this buy-out by ComVest,
which is subject to closing conditions, will be completed during
2002. In connection with its debt restructuring, Comdial will
seek additional longer term financing which it expects will be
in the form of a new senior bank loan and other debt or equity
funding to be raised during 2002. It is anticipated that the
Bridge Financing will be replaced by or convert into this
subsequent longer term financing. There can be no assurance
that the Company will be successful in obtaining additional
financing or that the terms on which any such funding may be
available will be favorable to the Company.
Nasdaq Delisting
As a result of its immediate convertibility into shares of
common stock, the issuance of the Bridge Notes required
shareholder approval under the corporate governance requirements
of Nasdaq's Marketplace Rules. The failure to obtain shareholder
approval prior to the issuance of the Bridge Notes has resulted
in the Company's shares being delisted from the Nasdaq SmallCap
Market(R). The Company anticipates that its common stock will
be quoted on the NASD's OTC-BB. Nasdaq determined that the
Company was not eligible for immediate listing on the OTC-BB
because part of the delisting order related to public interest
concerns regarding the substantial dilution. Accordingly, the
Company's stock currently trades on the Pink Sheets Electronic
Quotation Service. The application to be quoted on the OTC-BB
must be filed by one or more broker-dealers and the Company must
meet certain requirements, including that its filings under the
Exchange Act must be current. There can be no assurance that
the Company's stock will be quoted on the NASD's OTC-BB in the
future, in which case the Company's stock will continue to trade
through the pink-sheets.
COMMERCIAL CONSOLIDATORS: Elbows-Out Richter as Units' Receiver
---------------------------------------------------------------
Commercial Consolidators Corp. (AMEX:ZCC) (FRANKFURT:CJ9),
announces the following:
-- The interim receiver, Richter & Partners Inc., was
discharged as interim receiver of those subsidiaries of ZCC over
which it was appointed the interim receiver on September 18,
2002, with the exception of Tri-Vu Interactive Corp. Richter
expects to be discharged as the interim receiver of Tri-Vu
during the week of September 30, 2002. Richter continues to act
as the interim receiver of ZCC. ZCC continues to work with MFI
Export Finance Inc. and Richter in an effort to restructure the
Company.
-- Subject to restructuring, ZCC intends to seek approval
for the continued listing of the restructured company with the
American Stock Exchange by filing the required pro forma
business plan and its Annual Report with the SEC.
COMMUNICATION DYNAMICS: Taps White & Case as Lead Ch. 11 Counsel
----------------------------------------------------------------
Communication Dynamics, Inc., along with its debtor-affiliates,
asks for authority from the U.S. Bankruptcy Court for the
District of Delaware to employ White & Case LLP as their
bankruptcy attorneys. The Debtors report that Thomas E. Lauria,
Esq., at White & Case will act as lead counsel in the Company's
chapter 11 cases.
Although White & Case does not have an office in Delaware, White
& Case will represent the Debtors in coordination with The
Bayard Firm, PA. The two firms have discussed a division of
responsibilities and will make every effort to avoid or minimize
duplication of services to the Debtors.
The Debtors tell the Court they engaged White & Case to provide
legal advice with respect to a variety of issues, including
restructuring and bankruptcy advice and preparation of requisite
documents in commencing these cases. White & Case received a
$500,000 retainer for prepetition services.
White & Case is expected to:
a) take all necessary actions to protect and preserve the
estates of the Debtors, including the prosecution of
actions on the Debtors' behalf, the defense of any actions
commenced against the Debtors, the negotiations of disputes
in which the Debtors are involved, and the preparation of
objections to claims filed against the Debtors' estates;
b) provide legal advice with respect to the Debtors' powers
and duties as debtors in possession in the continued
operation of their businesses and the management of their
properties;
c) prepare on behalf of the Debtors all necessary motions,
applications, answers, orders, reports and papers in
connection with the administration and prosecution of the
Debtors' chapter 11 cases;
d) assist the Debtors in connection with any disposition of
the Debtors' assets, by sale or otherwise;
e) assist the Debtors in the negotiation, preparation and
confirmation of a plan or plans of reorganization and all
relates transactions;
f) appear in Court and to protect the interest of the Debtors
before the Court; and
g) perform all other necessary legal services in connection
with these chapter 11 cases.
Mr. Lauria discloses that his firm will charge the Debtors at
its current professionals' customary hourly rates ranging from
$90 to $695 per hour.
Communication Dynamics, Inc., together with its Debtor and non-
Debtor affiliates, is one of the largest multinational suppliers
of infrastructure equipment to the broadband communications
industry. The Debtors filed for chapter 11 protection on
September 23, 2002. Jeffrey M. Schlerf, Esq., at The Bayard
Firm represents the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed more than $100 million both in estimated assets and
debts.
CONSECO INC: Fitch Says Looming Bankruptcy Disrupts ABS Market
--------------------------------------------------------------
The asset-backed securities market has demonstrated resilience a
year after the events of Sept. 11 left the ABS market reeling,
according to Fitch Ratings in the latest edition of 'The Fitch
Ratings ABS exchange'. But while consumers have exhibited a
willingness to spend on everything from homes and autos to
retail goods, how they will weather this extended storm remains
to be seen.
'The consumer remains vital to sustaining economic recovery,'
said Kevin Duignan, Managing Director, Fitch Ratings. 'As a
result, consumer ABS performance should not be viewed
independently from the economy's performance as they share an
inextricable link to the behavior and credit quality underlying
borrowers, and subprime borrowers in particular.'
On the positive side, credit card chargeoffs continue to decline
and personal bankruptcies are only 2%-3% above last year's
record pace. In addition, new bankruptcy legislation should
benefit consumer finance companies and ultimately Consumer ABS
through lower default frequencies and higher recoveries.
On the other hand, Conseco's teetering on the edge of bankruptcy
has disrupted the ABS market as fears abound regarding the
impact a major servicing transfer might have on the overall ABS
market. Regulatory intervention has also become more pervasive,
amplifying concerns about headline risk and performance
volatility.
Subprime borrowers have been under significant stress during
this period and suffer from a lack of resources, leading to
actions such as Fitch's downgrade of Metris Companies' credit
card master trust. 'This will not be the last consumer ABS
rating action taken by Fitch in 2002 as an increase in
performance volatility pervades the nonprime sector,' said
Duignan.
Also appearing in this edition of 'The Fitch Ratings ABS
Exchange' include an update on state of the consumer, outlooks
on the auto and equipment leasing markets, a commentary on the
franchise loan sector and an update on the FASB fallout.
DebtTraders reports that Conseco Inc.'s 10.75% bonds due 2008
(CNC08USR1) are trading at 27 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CNC08USR1for
real-time bond pricing.
CORAM HEALTHCARE: Trustee Has Until Year-End to Decide on Leases
----------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, the Chapter 11 Trustee for Coram Healthcare Corp. and
Coram, Inc., obtained an extension of his lease decision period.
The Court gives the Chapter 11 Trustee until December 31, 2002,
to determine whether to assume, assume and assign, or reject the
Debtors' unexpired nonresidential real property leases.
Coram Healthcare, a provider of home infusion-therapy services
filed for Chapter 11 bankruptcy protection on August 8, 2000.
Kenneth E. Aaron, Esq., at Weir & Partners LLP and Barry E.
Bressler, Esq., at Schnader Harrison Segal & Lewis LLP represent
the Chapter 11 Trustee in these proceedings.
COVANTA ENERGY: Wins OK to Implement Key Employee Retention Plan
----------------------------------------------------------------
Covanta Energy Corporation and its debtor-affiliates obtained
the Court's authority to establish and implement a retention
program for eligible employees who provide essential services to
the Debtors, which would be comprised of:
(a) the retention bonus plan;
(b) the severance plan; and
(c) the long-term incentive plan.
The basic terms of the Key Employee Retention Plan:
1. Special Retention Bonus Plan
The Special Retention Bonus Plan would cover 72 key
employees, including the Chief Executive Officer. Under this
plan, eligible employees would receive a base award under
certain limited circumstances, from an aggregate pool of
$3,600,000, equal to a percentage of a base salary, depending
on the employee's position -- Base Awards:
Percentage
Category of Employee of Salary
-------------------- ----------
Tier I - CEO 75%
Tier II - certain executives reporting 67%
directly to CEO (6 individuals)
Tier III - selected other executives and 18%-35%
key employees (26 individuals)
Tier IV - selected other executives 10%-17%
(39 individuals)
With respect to Tiers III and IV, the specific percentage
would be as established by the Compensation Committee of
Covanta's Board of Directors -- the Committee.
The Base Awards become vested and payable in installments,
subject to the participant's continued employment with the
Company until the applicable vesting date:
Installment Percentage Payable On
----------- ---------- ----------
First 33.3% the earlier of September 30,
2002 and the date a Trigger
event occurs
Second 33.3% the earlier of September 30,
2002 and the date a Trigger
event occurs
Third 33.4% when a Trigger Event occurs
If a Trigger Event occurs prior to April 1, 2003, additional
cash bonuses, in an aggregate amount of $1,000,000 would be
paid to eligible participants on the date the Trigger Event
occurs in a lump sum and in amounts to be determined by the
Committee -- the Supplemental Award.
In the event of a termination Without Cause, for Mutual
Benefit, or due to the participant's death or disability, a
pro rata share of the participant's unpaid award would become
immediately vested and payable, unless the unpaid portion is
the full, final installment, in which case the award is
payable on the date the Trigger Events occurs. In the event
of any other termination prior to a vesting date, the unpaid
portion of any award is forfeited.
2. Key Employee Severance Plan
The Key Employee Severance Plan would cover 74 employees
including all of the participants in the Special Retention
Bonus Plan and two other key employees. Only a participant
who is terminated Without Cause or for Mutual Benefit after
the Petition Date would be eligible to receive a severance
benefit under the Key Employee Severance Plan. Cash
severance benefits would be paid in a single lump sum
payment, determined as:
Category of Employees Lump Sum Severance
--------------------- ------------------
Tier I - CEO 200% of base salary
Tier II - certain executives 150% of base salary
reporting to CEO
(6 persons)
Tier III - other executives and key 100% of base salary
employees (28 persons)
Tier IV - other key employees greater of 50% of
(39 persons) base salary and two
weeks' base salary
year of service but
not more than 52
weeks
Participants would also receive continued medical and dental]
coverage, provided that the participant pays the regular
employee co-payments, for the period corresponding to the
percentage of salary payable as cash severance benefits,
subject to an 18-month cap. A participant's right to
continue to receive medical or dental coverage will stop
immediately if the participant is offered or becomes eligible
for coverage under a medical or dental plan of any subsequent
employer. In addition, payments under the severance plan
would be reduced, if the aggregate amount paid would trigger
the federal excise tax on parachute payments.
Participants would be required to sign a general release of
claims against the Company and comply with other covenants,
including confidentiality covenants, non-solicitation and
non-disparagement covenants and litigation support
commitments.
The Debtors cannot yet estimate the aggregate cost of the Key
Employee Severance Plan. However, the Debtors believe that
the aggregate benefits offered are less than those provided
under prepetition severance programs since, prior to the
filing, a number of employees eligible to participate in the
Key Employee Severance Plan were covered by employment
agreements or severance agreements that provided for
severance payments of up to five times a participant's base
salary plus annual bonus.
3. Long-Term Incentive Plan
The Long-Term Incentive Plan -- LTIP -- would cover the six
senior executives and up to two additional key management
employees selected by the Committee, based on the advice of
the CEO.
The purpose of the LTIP is to provide appropriate incentives
to senior management to remain with the Debtors throughout
the reorganization process, to devote all of their attention
and energy to the preservation of the value of the business
and assets of the Debtors during the Chapter 11 proceedings
and to maximize the value realized by the Debtors for the
benefit of their creditors without the distraction associated
with the uncertainty of their future employment. The Plan
will become effective upon release of Court Order and would
terminate immediately after payment of all amounts due in
satisfaction of any awards that have not been forfeited or
expired.
Each participant will receive an award, in cash, equal to the
participant's percentage interest in the LTIP Pool multiplied
by the aggregate amount allocated to the only upon the
occurrence of an LTIP Trigger Date. A participant's
percentage interest in the LTIP Pool would be established by
the Committee, in consultation with the CEO, on or abut the
each participant's LTIP Trigger Date; provided that in no
event would:
-- be less than the minimum or more than the maximum
percentage interest established for the participant as of
the Effective Date; and
-- subject to the reversion of a participant's minimum
percentage interest to Covanta, the sum of the percentage
interests of all participants receiving payment in
respect of LTIP awards exceed 100%.
On the Effective Date, the Committee would establish a
notional book entry account on the books and records of
Covanta to record the total amount available for payment
in satisfaction of awards granted under the LTIP and paid
in connection with a Corporate Event. The Committee will
allocate an amount to the LTIP Pool after the occurrence of
each Corporate Event:
-- for the first aggregate amount of Value Realized of
$250,000,000 or more, the Committee will allocate
$2,000,000 to the LTIP Pool; and
-- if the Value Realized in respect of Corporate Events
exceeds $460,000,000, the Committee will allocate an
additional $19,000 to the LTIP Pool for each $1,000,000
of Value Realized in excess of $460,000,000.
In the event of:
(i) a Kohlberg Kravis Roberts & Co. -- KKR -- investment
of new equity capital in the Company in exchange for
beneficial ownership of equity securities of Covanta; or
(ii) Covanta's emergence from chapter 11 as a stand-alone,
going concern entity including,
a participant, in lieu of his Percentage Interest Amount,
would receive an amount in satisfaction of his LTIP award
equal to the product of 200% in the case of the CEO and 150%
in the case of all other participants, multiplied by the sum
of the participant's Salary and Average Bonus minus any
amounts paid to the participant under the Key Employee
Severance Plan.
A participant's right to receive payment under the LTIP would
vest in full on the effective date of a termination of the
participant's employment by the Company Without Cause or by
the participant for Mutual Benefit; provided that the
termination occurred after the Effective Date and prior to
the twelve-month anniversary of the date of entry of a Court
order confirming the Debtors' plan or plans of
reorganization. If the participant's termination is for
Mutual Benefit by reason of the failure of any successor of
Covanta to assume, in writing, the LTIP and, at any time
during the six month period after the participant's date of
termination for Mutual Benefit, the participant is rehired by
the Debtor in effectively the same position and at the same
or a higher rate of compensation as in effect immediately
prior to termination, the participant would forfeit any right
to receive payment in respect of his LTIP award and would be
required to promptly repay to the Debtor any amount
previously paid to a participant in satisfaction of the LTIP
award -- the Clawback Requirement.
All payments would be made as soon as reasonably practicable
after:
(i) if a participant's LTIP Trigger Date occurred prior
to the date of an entry of a confirmation order, the
closing of the last transaction resulting in a Sale of
the Energy Business or the closing of the KKR
Investment, whichever is applicable, and
(ii) if a participant's LTIP Trigger Date occurred on or
after that date, the participant's LTIP Trigger Date,
subject in each case to the Clawback Requirement.
A participant would forfeit an award upon the termination of
a participant's employment with the Company for Cause or the
participant's resignation from the Company other than for
Mutual Benefit. In the event of forfeiture, the
participant's minimum percentage interest in the LTIP Pool
would revert to the Company. (Covanta Bankruptcy News, Issue
No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900)
DYNEGY INC: Sells Hornsea Gas Storage Facility to SSE for $200MM
----------------------------------------------------------------
Dynegy Inc., (NYSE:DYN) has sold Dynegy Hornsea Limited, which
owns and operates an onshore natural gas storage facility in the
United Kingdom, to SSE Energy Supply Limited, a subsidiary of
Scottish and Southern Energy plc. Under the terms of the
purchase agreement, which was executed Monday, SSE paid
approximately $200 million (130 million pounds) for all of the
shares of Dynegy Hornsea.
The sale is consistent with Dynegy's previously announced plans
to execute a sale or joint venture transaction involving its
U.K. gas storage assets in connection with the company's ongoing
capital and liquidity plan. According to Dan Dienstbier,
chairman and interim chief executive officer of Dynegy Inc.,
"This represents another step forward in restructuring our
business and improving our financial profile. We identified
Hornsea as a valuable, but non-core asset when we established
our U.K. storage business last year."
Dynegy Hornsea is an indirect wholly owned subsidiary of Dynegy
Europe Limited and a key provider of physical storage space in
the U.K. natural gas market. It has a total storage capacity of
325 million cubic meters (3,500 GWh) and deliverability of 18
million cubic meters per day (195 GWh/day). Dynegy Hornsea also
owns a neighboring development site at Aldbrough. This site has
planning permission for development as an additional salt cavity
storage facility.
ABN AMRO acted as the exclusive financial advisor to Dynegy in
this transaction.
Dynegy Inc., produces and delivers energy, including natural
gas, power, natural gas liquids and coal through its owned and
contractually controlled network of physical assets. The company
serves customers by aggregating production and supply and
delivering value-added solutions to meet their energy needs.
Dynegy Holdings Inc.'s 8.75% bonds due 2012 (DYN12USR1),
DebtTraders reports, are trading at 32 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=DYN12USR1for
real-time bond pricing.
EBIX.COM INC: Commences Trading on 1-For-8 Reverse Split Basis
--------------------------------------------------------------
ebix.com, Inc. (NASDAQ: EBIXD), a leading international supplier
of software and e-commerce solutions to the property and
casualty insurance industry, announced that at the start of
trading yesterday, October 1, 2002, its common stock commenced
trading on a 1-for-8 reverse split basis. Also effective at the
start of trading yesterday and due to the reverse split, ebix's
common stock will trade for 20 trading days under the ticker
symbol "EBIXD." ebix's stockholders approved the reverse split
by a significant margin at a special meeting of stockholders
held Monday. The reverse split is intended to return ebix to
compliance with the continued listing standards of the NASDAQ
SmallCap Market, in particular the minimum bid price
requirement.
ebix received a NASDAQ Staff Determination on August 20, 2002
indicating that ebix's common stock fails to comply with the $1
per share minimum bid price requirement for continued listing
set forth in Marketplace Rule 4310(C)(4) and that its common
stock is, therefore, subject to delisting from the NASDAQ
SmallCap Market. A NASDAQ Listing Qualifications Panel is
scheduled to hear ebix's appeal of the Staff Determination on
Thursday, October 3, 2002. There can be no assurance that the
Panel will grant ebix's request for continued listing.
Founded in 1976, ebix.com, Inc., formerly known as Delphi
Information Systems, Inc., is a leading international supplier
of software and e-commerce solutions to the property and
casualty insurance industry. The name change to ebix.com, Inc.,
aligns the identity of ebix with its strategic focus of using
the Internet to enhance the way insurance business is
transacted, through solutions that encompass both e-commerce and
web-enabled agency management systems. ebix hosts a one stop
insurance portal for both consumers and insurance professionals.
Recently, ebix launched an end-to-end e-commerce system for
agencies, ebix.ASP, on a self hosted or application service
provided basis, targeted at the personal lines, life, health and
commercial lines agencies and brokers around the world. ebix
hosts a personal line exchange connecting consumers to multiple
agencies and carriers, in addition to providing download, claims
inquiry and billing inquiry services to insurance companies
across more than 30 different agency systems through its
ebixExchange service. An independent provider, ebix employs
insurance and technology professionals who provide products,
support and consultancy to more than 3,000 customers on six
continents.
ENRON CORP: ENA Keeps Plan Filing Exclusivity Until November 30
---------------------------------------------------------------
Enron Corporation and its debtor-affiliates obtained second
extension of Enron North America's Exclusive Periods. The Court
further extends ENA's exclusive period to file a plan of
reorganization to November 30, 2002 and ENA's exclusive period
to solicit acceptances of that plan from their creditors to
January 29, 2003.
ENRON CORP: Dept. of Labor Plans to Hold Lay Personally Liable
--------------------------------------------------------------
The United States Department of Labor has filed a strongly
worded court brief stating that Ken Lay and other Enron
executives could be held personally liable for millions of
dollars in retirement plan losses.
The brief, filed by the government as part of the litigation
against Enron on behalf of company employees and retirees, could
have broad implications not only with the Enron litigation, but
also with other cases involving mismanagement of 401(k)
accounts.
"We applaud the Department of Labor's brief, and agree with the
department's analysis wholeheartedly," said Steve Berman, the
attorney leading the class-action litigation on behalf of Enron
employees and retirees. "We will prove that Lay and his cohorts
not only failed to protect the interests of employees, they
intentionally misled employees and retirees in convincing them
to continue investing in the company stock. They should be held
personally liable for their misdeeds."
According to Berman, Enron leadership, including CEO Ken Lay,
had a responsibility to protect the interests of those invested
in the 401(k) program, an obligation they abrogated.
"It is only fair that when we prove our case, the Enron
officials who pocketed millions be held accountable," Berman
added. "Pictures of mansions and swimming pools grate against
our concept of fairness."
Berman added that when employees attempted to liquidate
holdings, many were locked out of trading. "Thousands of current
and former Enron employees saw their retirement nest-eggs
scrambled."
Berman is available to all media for interviews regarding the
Department of Labor report and the Enron litigation. Contact
Mark Firmani at 206-443-9357 or mark@firmani.com
To view the Department of Labor's court brief, visit
http://www.hagens-berman.com
ETOYS INC: Court Extends Solicitation Period Until October 4
------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, eToys, Inc., and its debtor-affiliates obtained an
extension of their exclusive period to solicit acceptances of
the a liquidating chapter 11 Plan until October 4, 2002.
eToys, Inc., now known as EBC I Inc, operated a web-based toy
retailer based in Los Angeles, California. The Company filed a
Chapter 11 Petition on March 7, 2001. When the company filed
for protection from its creditors, it listed $416,932,000 in
assets and $285,018,000 in debt. eToys sold its assets and name
to toy retailer KB Toys. The Company's SEC report on February
28, 2002, the Debtors listed 32,091,918 in total assets and
192,396,702 in total liabilities. Robert J. Dehney, Esq., at
Morris, Nichols, Arsht & Tunnell and Howard Steinberg, Esq., at
Irell & Manella represent the Debtors as they wind-up their
financial affairs.
EXODUS COMMS: C&W Seeks Temporary Restraining Order against EXDS
----------------------------------------------------------------
Cable & Wireless asks the Court to issue a Temporary Restraining
Order against EXDS Inc., and Plan Administrator, Alvarez &
Marsal Inc., to enjoin them from distributing $50,000,000 from
the Working Capital Reserve. The reserve was established to
insure EXDS' obligations under the November 29, 2001 Asset
Purchase Agreement governing Cable & Wireless' acquisition of
majority of EXDS' assets.
According to Scott D. Cousins, Esq., at Greenberg Traurig LLP,
in Wilmington, Delaware, the distribution of the reserve will
violate EXDS' obligations under the Plan and the Plan
Administrator Agreement, which is to adequately fund and
maintain the Reserve in the amount necessary to finance the
maximum purchase price adjustment under the Asset Purchase
Agreement and EXDS' other obligations.
Mr. Cousins is concerned that once the funds are distributed,
Cable & Wireless may be unable to recover the amounts if the
Court determines that the distributions should not have taken
place. In that scenario, Cable and Wireless would be forced to
look to the estate to replenish the Reserve. However, it is
unlikely that the estate will have the amounts necessary to
replenish the reserve. Thus, a monetary judgment in favor of
Cable & Wireless on its claims concerning the purchase price
dispute or other claims arising under the Asset Purchase
Agreement will be rendered meaningless.
Mr. Cousins explains that the Asset Purchase Agreement between
EXDS and Cable & Wireless provides for a purchase price
adjustment based on Accounts Receivable Value and Pre-Paid
Accounts Value as of January 31, 2002. Cable & Wireless has
concluded, after calculations, that the purchase price should be
reduced by $135,200,000. EXDS, on the other hand, concluded
that the reduction to the initial purchase price should be
significantly lower. EXDS has already paid Cable & Wireless
$50,000,000 on account of a potential downward revision to the
purchase price. Thus, the maximum potential purchase price
adjustment is $85,200,000 plus interest.
Mr. Cousins relates that the Reserve was required by the Asset
Purchase Agreement and the Plan Administrator Agreement to
insure that EXDS will be able to pay the remaining amount and
other amounts due to Cable & Wireless under the Asset Purchase
Agreement. The two agreements also required the establishment
of an escrow account to further insure EXDS' capability. An
Escrow Agreement, dated February 1, 2002, between EXDS, Cable &
Wireless and Wells Fargo Bank NA pegged the General Escrow
Amount at $56,000,000, which will be held until February 3,
2003. The Escrow Agreement provides that Cable & Wireless can
make a claim against the General Escrow Amount on account of:
-- A payment obligation for working capital adjustment by EXDS,
-- A payment obligation under various employee benefits plans of
EXDS and Cable & Wireless,
-- A payment obligation for cure amounts due on assumed and
assigned contracts,
-- EXDS' tax obligations, and
-- EXDS' indemnification obligation pursuant to Article IX
of the APA, which allows Cable & Wireless to seek
indemnification for:
a. excluded liabilities,
b. breaches of representations and warranties, and
c. breaches of covenants.
Mr. Cousins tells the Court that on July 3, 2002, Cable &
Wireless sent a letter to Alvarez & Marsal, outlining the amount
that it believes should be included in the Working Capital
Reserve -- $88,045,533. In the letter, Cable & Wireless also
asked to have a discussion with Alvarez & Marsal to establish a
protocol for monitoring the reserve. It was later found that
$91,800,000 was already deposited into the Reserve. Alvarez &
Marsal, however, made it clear through a letter dated September
24, 2002, that it will be drawing its second quarterly
distribution from the Reserve, which would reduce its balance by
$50,000,000. No specific date was given for the distribution.
In the letter, Alvarez & Marsal stated that it was taking
amounts from the Reserve believing that the combined amount in
the Reserve and the Escrow will cover the purchase price
adjustment. Since the total amount that needs to be reserved is
$97,800,000, Alvarez & Marsal believed it only needed to
maintain $41,800,000 in the Reserve. Alvarez & Marsal neither
consulted Cable & Wireless nor looked to clear and unambiguous
language of the Plan and the Plan Administrator Agreement for
reference on the matter.
Mr. Cousins asserts that under the Plan and the Plan
Administrator Agreement, EXDS and Alvarez & Marsal must fund the
Reserve in an amount sufficient to satisfy the maximum potential
amount due to Cable & Wireless, in addition to the Escrow
Amount. (Exodus Bankruptcy News, Issue No. 25; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
Exodus Communications Inc.'s 11.625% bonds due 2010
(EXDS10USR1), DebtTraders says, are trading at 4.75 cents-on-
the-dollar. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=EXDS10USR1
GENERAL DATACOMM: Court Okays Chodan to Render Financial Advice
---------------------------------------------------------------
General DataComm Industries, Inc., and its debtor-affiliates
sought and obtained approval from the U.S. Bankruptcy Court for
the District of Delaware to retain and employ Chodan Advisors,
Inc., as financial advisors to the Debtors.
The Debtors tell the Court that Chodan is owned and operated by
Arnold Kastenbaum who will handle all day-to-day aspects of the
financial advising required by the Debtors. Mr. Kastenbaum has
over twenty-five years of related business experience and has
specialized in advising distressed companies since 1989.
The Debtors want Chodan to:
a) analyze the business, operations, properties, financial
condition, and prospects of the Debtors;
b) assist and advise the Debtors in implementing a plan of
reorganization on behalf of the Debtors;
c) assist and advise the Debtors in evaluating and analyzing
a reorganization;
d) to the extent the Debtors, after consulting with Chodan,
deem reasonably necessary, provide (in writing and/or
orally) a valuation and/or liquidation analysis of the
Debtors and appropriate supporting analysis, which may be
reproduced by the Debtors as part of the disclosure
statement publicly fled as part of a plan of
reorganization pursuant to the United States Bankruptcy
Code; and
e) render such other advisory services as needed.
The Debtors shall compensate Mr. Kastenbaum at a rate of $300
per hour, not to exceed $1,800 per day.
General DataComm Industries, Inc., a worldwide provider of wide
area networking and telecommunications products and services,
filed for Chapter 11 protection on November 2, 2001. James L.
Patton, Esq., Joel A. Walte, Esq., and Michael R. Nestor, Esq.,
represent the Debtors in their restructuring efforts. In their
July 2002 monthly report on form 8-K filed with SEC, the Debtors
account $19,996,000 in assets and $77,445,000 in liabilities.
GLOBAL CROSSING: Court Allows Settlement Agreement with Level 3
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the Settlement Agreement between Global Crossing Ltd.,
its debtor-affiliates, and Level 3 Communications LLC.
The salient terms of the Level 3 Settlement Agreement are:
A. Global Crossing Parties: Atlantic Crossing Ltd.; Atlantic
Crossing II, Ltd.; GC Pan European Crossing France S.A.R.L.;
GC Pan European Crossing Nederland BV; GCL; GC Bandwidth; GC
North American Networks; Global Crossing USA, Inc.; GT
Landing II Corp.; and GT U.K. Ltd;
B. Level 3 Parties: Level 3; Level 3 (Bermuda) Limited; Level 3
Communications, BV; Level 3 Communications Limited; Level 3
Communications, SA; and Level 3 Landing Station, Inc.;
C. Releases, Covenants Not to Sue and Waivers of After-
Discovered Claims Related to the Principal Agreements: The
Parties release the other from any and all claims arising out
of:
-- the Yellow Cable System Co-Build Agreement dated February
16, 2000 between Level 3 (Bermuda) Ltd., Level 3
International Ltd. and Level 3 Communications, LLC and
Atlantic Crossing II Ltd., including the leases by the
Debtors and GT U.K. for cable station space in Bellport,
New York and Bude, Cornwall, respectively, as referenced
in the Co-Build Agreement;
-- the Upgrade Sharing and Capacity Acquisition Agreement,
dated February 16, 2000, between Atlantic Crossing, Ltd.
and Level 3 (Bermuda) Ltd., including the leases by Level
3 for cable station space in Suffolk County, New York and
Sennen, Cornwall, as referenced in the Upgrade Sharing
Agreement;
-- the Capacity Purchase Agreement, dated September 28, 1998,
between Ultraline (Bermuda) Ltd., now known as Level 3
(Bermuda) Ltd. and Atlantic Crossing, Ltd., and related
agreements and amendments; and
-- the IRU Agreement, dated September 6, 2000 between Level 3
Communications, LLC and Global Crossing North American
Networks, Inc. The Parties also agree not to sue on any
claim for damages arising under the Principal Agreements
as a result of facts or circumstances occurring up to and
including the Execution Date and waive claims arising
under the Principal Agreements as a result of facts or
circumstances which existed prior to the Execution Date,
but which were unknown by the applicable party at this
date;
D. Releases, Covenants Not to Sue and Waivers of After-
Discovered Claims Related to the Additional Arrangements:
The Global Crossing Parties and the Level 3 Parties release
the other from any and all claims arising out of agreements
or arrangements among Level 3 and certain of its subsidiaries
and affiliates, including Level 3 Communications SA, Level 3
Communications BV, Level 3 (Bermuda) Limited, and certain of
the Debtors' subsidiaries and affiliates, including GC Pan
European Crossing France S.A.R.L., GC Pan European Crossing
Nederland, BV, GT U.K., Ltd., Global Crossing USA, Inc.,
GC Bandwidth and GC North American Networks regarding:
-- certain Pan European Crossing collocation services;
-- certain United States domestic voice and private line
services;
-- certain international private line services; and
-- San Jose local loop joint build, up to and including the
Execution Date.
The Parties also covenant not to sue on any claim for damages
arising under the Additional Arrangements as a result of
facts or circumstances occurring up to and including the
Execution Date and waive claims arising under the Additional
Arrangements as a result of facts or circumstances which
existed prior to the Execution Date, but which were unknown
by the applicable party;
E. Resolution of Trans-Atlantic Matters: The Parties will
release the other from certain claims relating to the
Capacity Purchase Agreement, the Upgrade Sharing Agreement
and the Co-Build Agreement, as applicable;
F. Resolutions of Matters under the Dark Fiber IRU Agreement:
The Dark Fiber IRU Agreement is amended to delete the
Debtors' obligations or options to purchase, and Level 3's
obligation to deliver, any additional segments of certain
conduit or fiber. The Dark Fiber IRU Agreement is further
amended so that the Debtors are permitted to retain the IRUs
in all conduit and fiber delivered and fully paid for prior
to the Execution Date. The Retained Fiber and Conduit will
continue to be governed by the terms of the Dark Fiber IRU
Agreement as amended by the Level 3 Settlement Agreement;
G. Resolution of Interlink Matters: Contemporaneously with the
execution of the Level 3 Settlement Agreement, the Debtors
and Level 3 executed the "Interlink Agreement" to effect the
transfer by GC North America to Level 3 of whatever interest
which GC North America has in and under the Outside Plant
Construction Contract between GC North America and KeySpan
Communications Corporation, with respect to one quad duct;
H. U.S. Yellow Cable Station Lease: Contemporaneously with the
execution of the Settlement Agreement, the Debtors and Level
3 executed the lease for the cable landing station at
Bellport, New York. The Debtors' rent payment obligation
under the lease is discharged;
I. Dismissal of Arbitration: Within 5 business days after Court
approval of this motion, the Debtors and Level 3 will file a
joint stipulation of dismissal, with prejudice, of the
pending arbitration before the American Arbitration
Association;
J. Future Payments by Level 3 to Global Crossing for OA&M: The
fees payable by Level 3 to the Debtors from January 1,
2004 forward, under the Upgrade Sharing Agreement and
Capacity Purchase Agreement, will be fixed at $2,000,000 per
year -- allocated $150,000 to the Capacity Purchase Agreement
and $1,850,000 to the Upgrade Sharing Agreement. These
payments will be made quarterly in advance;
K. Payments by Level 3 Under Additional Arrangements:
$2,296,665.37 within July 30, 2002 in full satisfaction of
all amounts due between the parties with respect to the
Additional Arrangements through either May 31, 2002 or June
30, 2002 arising out of or under or relating to the
Additional Arrangements based upon facts or circumstances
occurring up to and including the Release Date. This payment
will be in full satisfaction of all claims of the Debtors
against Level 3 vice versa that have accrued or arisen under
the Additional Arrangements based upon facts or circumstances
occurring up to and including the June 30, 2002. For all
amounts due from Level 3 to the Debtors or from the Debtors
to Level 3 subsequent to the Release Date, Level 3 will pay
to the Debtors and the Debtors will pay to Level 3 all
amounts not disputed in good faith invoiced or to be invoiced
and that become due and payable after the Release Date; and
L. Assumption of Executory Contracts: The Debtors will assume
these Level 3 Agreements, provided that no payments will be
required in connection with the assumption:
-- Co-Build Agreement: For purposes hereof, the "Co-Build
Agreement" will include the leases by GT Landing II Corp.
and GT U.K. for cable station space in Bellport, New York,
and Bude, Cornwall, respectively, as referenced in the Co-
Build Agreement;
-- Upgrade Sharing Agreement: For purposes hereof, the
"Upgrade Sharing Agreement" will include the leases by
Level 3 for cable station space in Suffolk County, New
York, and Sennen, Cornwall, referenced in the Upgrade
Sharing Agreement;
-- Capacity Purchase Agreement; and
-- Dark Fiber IRU Agreement. (Global Crossing Bankruptcy
News, Issue No. 23; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
Global Crossing Holdings Ltd.'s 9.625% bonds due 2008
(GBLX08USR1) are trading at 1.25 cents-on-the-dollar,
DebtTraders reports. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=GBLX08USR1
GLOBAL LIGHT: Court Extends CCAA Protection to Dec. 20 in Canada
----------------------------------------------------------------
Global Light Telecommunications Inc., reports that, in
connection with the initial order granting the Company certain
relief, including a stay of proceedings and protection from
creditors, under the Companies' Creditors Arrangement Act issued
on June 28, 2002 and subsequently extended, a confirmation order
was issued on September 25, 2002 extending the current stay
until December 20, 2002.
In connection with the confirmation order, the Company has
engaged UBS Capital to act as its financial advisor and is in
the process of completing arrangements through the Company's
principal creditors for debtor-in-possession financing in the
total amount of US$500,000 (including in-kind expenses) to be
funded in installments over the course of the next year if
necessary. It is intended that this DIP funding will enable the
Company to fund its ongoing costs associated with the CCAA
process as well as ongoing minimal overhead and administrative
expenses associated with the development and implementation of
its reorganization plan. The terms of the DIP funding include
certain priority allocations on any ultimate distribution to
those principal creditors that elect to participate in the
funding program. Smaller creditors will not be materially
affected by the allocation terms.
In addition, the Company reports that it has accepted the
resignations of Gordon Blankstein as a director and an officer
and Robert Gardner as a director.
HIGHWOOD RESOURCES: Lender Agrees to Forbear Until Dec. 31, 2002
----------------------------------------------------------------
Highwood Resources Ltd., announces that its principal lender has
agreed to an amendment of the forbearance agreement dated
October 3, 2001, as amended March 28, 2002 with respect to the
repayment of the debt due to the lender. The amendment provides
an extension of the time for repayment of all indebtedness owing
to the lender from September 30, 2002 to December 31, 2002. The
amendment requires Highwood to engage a monitor to report to the
lender on business operations.
The repayment extension is expected to provide Highwood
sufficient time to complete the plan of arrangement announced
August 30, 2002. Completion of the arrangement is subject to
regulatory, shareholder and court approvals.
HOLY CROSS HOSPITAL: Fitch Slashes $24.9MM Bonds' Rating to B
-------------------------------------------------------------
Fitch Ratings has downgraded the Illinois Health Facilities
Authority's approximately $24.9 million revenue bonds series
1994 (Holy Cross Hospital) to 'B' from 'BBB'. Fitch removes the
bonds from Rating Watch Negative. The Rating Outlook is Stable.
The downgrade primarily reflects Holy Cross Hospital's continued
negative operating results from fiscal 1999 to fiscal 2002, lack
of debt service coverage, poor liquidity, unfavorable payor mix,
and negative utilization trends. HCH has lost about $51 million
from operations over the last fours years, including a loss of
$16.2 million from operations in fiscal 2001 and a loss of $11.2
million (negative 9.4% operating margin) from operations through
12 months ended June 30, 2002 (unaudited). The operating losses
are mostly attributable to its employed physicians (Neighborhood
Affiliates), an unfavorable payor mix, and high expenses for
labor and supplies. HCH has been in technical default due to
rate covenant violations for four consecutive years. At June 30,
2002, Holy Cross had only $7.4 million in liquid reserves (24
days cash on hand), a significant deterioration from $23.6
million (83 days) at June 30, 1999. In 2002, HCH derived 23.5%
of gross revenues from Medicaid, demonstrating high exposure to
government cutbacks. Moreover, bad debt as a percent of revenues
was very high in 2002 at 14%. HCH's unfavorable payor mix and
negative utilization trends are reflected in net patient
revenue, which has declined to $121.8 million in 2002 from
$130.2 million in 1999.
HCH's strengths include management's initiatives, which have
begun to reduce losses from operations, leading market share in
its primary service area, and moderately low debt burden.
Neighborhood Affiliates' operating loss was reduced to $3.8
million in 2002 from $7.5 million in 1999. During this period,
HCH closed several clinics, reducing its number of employed
physicians to 28 from 37. In July 2002, the physician
compensation plan was converted from a percentage of collections
to net contributions, which should reduce employed physician
losses going forward. Recent managed care negotiations have been
favorable, namely the elimination of capitated arrangements from
managed care contracts. In addition to a $1.7 million Medicaid
grant in the near term, HCH will receive $1.8 million annual
disproportionate share payments starting in fiscal 2003. Prior
management did not pursue DSH payments, despite qualification
over the last five years. In 2002, renegotiations with supply
vendors resulted in a $1.5 million reduction in expenses.
Permanent nursing staff is working additional hours in
accordance with a payment enhancement, resulting in less agency
staff and a $700 thousand decrease in labor expenses in 2002. In
a fragmented, competitive market, HCH maintained the largest
share in its primary service area, 15%, in 2001. Despite its
operating losses, HCH's debt burden remained low in fiscal 2002,
demonstrated by maximum annual debt service as a percent of
revenue at a favorable 1.6%.
Fitch believes that HCH's large operating losses will improve
slowly over the medium term as management's objectives begin to
improve profitability. Despite the addition of favorable
government subsidies in the near to mid term, Fitch believes
that a significant turnaround in operations will be held in
check by several factors. These include HCH's unfavorable payor
mix, fragmented market, and the need to address replacements and
additions to property, plant and equipment.
Holy Cross Hospital, an acute-care community hospital, operates
241 of 331 beds in the southwest section of Chicago. Total
operating revenue in fiscal 2001 was $117 million. HCH has
covenanted to provide annual disclosure to bondholders, which
was common practice during the initial rating. Fitch strongly
recommends that obligors adopt quarterly disclosure practice for
bondholders. Disclosure of financial and operating statements to
Fitch has not been timely.
HUNTSMAN CORP: Completes Fin'l Workout and Cuts Debt by $775MM
--------------------------------------------------------------
Jon M. Huntsman, Founder and Chairman, and Peter R. Huntsman,
President and CEO of the Huntsman companies, announced the
completion of Huntsman Corporation's financial restructuring.
The initiative reduces Huntsman debt by approximately $775
million, leaves the Huntsman family with operational and board
control, and puts the Huntsman businesses on firm financial
footing. Further, Huntsman intends to complete the acquisition
of ICI's debt and equity interest in Huntsman International by
the second quarter of 2003. That transaction will result in
further debt reduction to the combined Huntsman companies.
The Huntsmans announced in June, 2002 that MatlinPatterson
Global Opportunities Partners, Huntsman Corporation's largest
bond holder, had agreed to exchange its bonds and make a
contribution of certain assets, for equity in a newly
established holding company that would own the stock of Huntsman
and certain debt securities in Huntsman International Holdings.
The transaction was subject to Huntsman obtaining agreement from
its bank group, which subsequently gave unanimous approval to
the restructuring.
In addition to converting into equity approximately $775 million
of outstanding bond debt and interest, Huntsman will pay all
past due interest on its remaining $96 million of bond debt.
Huntsman also has amended the terms of its bank credit
facilities to extend the maturity to 2007, among other things.
In addition, the company has entered into a new revolving credit
facility that greatly enhances its liquidity and provides
increased financial flexibility.
Mr. Jon Huntsman commented, "This is an historic event. For a
privately held company of our size and complexity to come so
successfully through such intensely negative economic
conditions, and to do so with the original owners retaining
board and operational control, and majority ownership, is
unprecedented."
"We are very pleased to have MatlinPatterson and their CEO,
David Matlin, as our partner. The future of the Huntsman
companies has never been brighter," Mr. Huntsman concluded.
Mr. Peter Huntsman said, "We believe that significant
improvements in our earnings and cash flow, which continue to be
far ahead of projections, put our economic performance among the
best in the chemical industry."
"The substantial debt reduction occasioned by the restructuring,
our improving economic performance and our cost optimization
initiatives have made us more competitive than at any time in
our history," he said.
Peter Huntsman continued, "We thank our customers and suppliers
for having faith in our ability to complete this restructuring,
and for staying with us for the duration of the process. We
will remember their loyalty in the days ahead.
"We also thank our employees for remaining focused on the safe
and efficient operation of our manufacturing facilities. Their
efforts have helped immeasurably in keeping the company viable
and successful through difficult economic circumstances."
The combined Huntsman companies constitute the world's largest
privately held chemical company. The operating companies
manufacture basic products for a variety of global industries
including chemicals, plastics, automotive, footwear, paints and
coatings, construction, high-tech, agriculture, health care,
textiles, detergent, personal care, furniture, appliances and
packaging. Originally known for pioneering innovations in
packaging, and later, rapid and integrated growth in
petrochemicals, Huntsman-held companies today have revenues of
approximately $8 billion, more than 13,000 employees and
facilities in 44 countries.
IBIZ TECHNOLOGY: Applauds Qualification for OTCBB Relisting
-----------------------------------------------------------
iBIZ Technology Corp., (OTC Bulletin Board: IBIZ) announced
their qualification for re-listing to the OTC Bulletin Board.
Ken Schilling, iBIZ President and CEO commented, "We are
extremely pleased to once again re-list on the OTC Bulletin
Board. This past year has been a period of negative growth,
limited cash flow and problems associated with the sale of our
data center in December of last year. De-listing from the OTC
Bulletin Board, presented us with new challenges as it took
longer than expected to qualify for re-listing."
iBIZ is a new, very lean and highly energized company with a
keen focus on the creation, marketing and sales of PDA accessory
products. Our overhead has been trimmed to a level iBIZ has not
seen since the mid 1980's. Our problems associated with our past
have been strategically and systematically resolved in an effort
to position iBIZ for a period of lasting growth. While the PDA
market has also suffered slower than expected sales in '02, we
anticipate this market will be quick to rebound as the economy
starts to improve in '03. Future PDA's will have faster than
ever processors, and greatly enhanced performance
characteristics, making them an absolute necessity for the
mobile professional.
Schilling further commented, "Our highly innovative new product
releases will begin shipping in November delivering tremendous
value to PDA users globally. Our coming product line up will
provide end users with everything from entertainment, to
products centered on improving the ease of on-the-fly data entry
into PDA's. The iBIZ brand will continue to grow in recognition
through innovation as we continue to focus on first-to-market,
performance enhancing products that will absolutely track the
exponential growth in the evolving and exciting PDA market."
iBIZ is a leading manufacturer and distributor of accessories
for personal digital assistant and hand-held devices. iBIZ is
recognized for innovative, high-quality, competitively priced
products available through major retailers. For more
information on iBIZ products and services, please visit
http://www.ibizpda.com email sales@ibizcorp.com or call 1-800
234-0707.
INSCI: Inks Strategic Marketing Alliance with Imaging Solutions
---------------------------------------------------------------
INSCI Corp. (OTC Bulletin Board: INSS), a leading supplier of
Electronic Statement Presentment, Integrated Document Archive
and Retrieval Systems and Enterprise Report Management software,
has signed a one-year marketing alliance with Wallingford, CT-
based Imaging Solutions, Inc., a professional services firm
specializing in the delivery of solutions that integrate
document management technology with line of business
applications software. Imaging Solutions has committed to a
$1.0 million sales quota for the term of the contract.
Under the terms of the agreement, INSCI and Imaging Solutions
will co-operate in the marketing and distribution of the INSCI
ESP+ Solution Suite of products to Imaging Solutions'
prospective customers and installed customer base. Imaging
Solutions' client base includes government agencies,
banking/financial institutions, investment firms, healthcare
companies, insurance companies and manufacturing firms.
Imaging Solutions President and CEO Roger S. Tausig said, "We
work exclusively with proven off-the-shelf technology that is
capable of tightly integrating imaging with customers' existing
data processing application platforms and networking
environments, and INSCI's ESP+ Solution Suite met our strict
criteria for inclusion in the family of imaging products we
offer."
President and CEO Henry F. Nelson commented, "Imaging Solutions
maintains relationships with the 'Best of Class' hardware
vendors and software providers in the imaging and electronic
document management market and we are pleased to be included on
this list. We believe our ESP+ Solution suite will help meet
the needs of Imaging Solutions' customers and this agreement
will be beneficial to both companies. This is the second
business alliance we have announced since we recently adopted a
new focus on increasing and expanding this type of
relationship."
Imaging Solutions is a provider of integrated document
management systems utilizing scanning, optical disk storage,
networked desktop computers and management software to control
image, data storage, and work flow functions. Established in
1994, the company has pursued the imaging market as a systems
integrator specializing in image processing, COM fiche
replacement (C.O.L.D.), electronic forms processing, and
internet/intranet-based applications. Imaging solutions works
exclusively with proven off-the-shelf technology that
is capable of tightly integrating imaging with customers'
existing data processing applications, platforms, and networking
environments. For more information, please visit
http://www.imagingsolutions.com
INSCI Corp., is a leading-provider of highly scalable digital
document repository solutions that provide high-volume document
presentment, preservation, and delivery functions via networks
or the Internet. Its award-winning products bridge value
documents with front-office mission critical and customer-
centric applications by web-enabling legacy-generated reports,
bills, statements and other documents. The Company has
strategic partnerships and relationships with such companies as
Xerox and Unisys. For more information about INSCI, visit
http://www.insci.com For additional investor relation's
information, visit the Allen & Caron Inc Web site at
http://www.allencaron.com
* * *
According to INSCI's Form 10KSB filing dated July 15, 2002,
INSCI had $412,000 of cash and working capital deficit of $6.2
million, at March 31, 2002, in comparison to $460,000 of cash
and working capital deficit of $6.9 million at March 31, 2001.
Accounts receivable were $1.3 million as of March 31, 2002
compared to receivables of $1.5 million as of March 31, 2001.
The Company has a deficiency in its financial statements in that
it has $8.0 million in liabilities and $2.2 million in assets.
This deficiency, unless remedied, can result in the Company not
being able to continue its business operations. The Company
believes that its current business plan, if successfully
implemented, may provide the opportunity for the Company to
continue as a going concern. However, in the event that
satisfactory arrangements cannot be made with creditors, the
Company may be required to seek protection under the Federal
Bankruptcy law.
KMART CORP: Asks Court to Approve Settlement with General Time
--------------------------------------------------------------
General Time Corporation and GTC Properties, Inc., entered into
a transaction sell its shipments of clock and other goods to
Kmart Corporation, subject to higher and better offers. Since
General Time was under Chapter 11 at the time of the sale
transaction with a bankruptcy court in Georgia, the parties
sought approval of the sale transaction from the Georgia Court.
Consequently, on September 17, 2001, the Georgia Bankruptcy
Court approved the sale of the clock products to Kmart for
$1,500,061. The Product was also sold to Kmart free and clear of
any and all liens, claims and encumbrances.
The Product was delivered to Kmart on December 24, 2001.
However, as of the commencement of Kmart's own Chapter 11 cases
on January 22, 2002, Kmart had not made any payments to General
Time pursuant to the Sale Order. In an effort to recover either
the Product or its value, General Time asked Judge Sonderby to
lift the stay imposed on Kmart's Chapter 11 cases to recover its
products. General Time also intends to proceed with a turnover
action with the Georgia Bankruptcy Court where it could
adjudicate the competing lien claims to the Product or its
value.
Kmart objected to General Time Stay Relief Motion, asserting
that General Time is simply an unsecured creditor since the
terms of the sale of the Product were on an unsecured credit
basis of net 31 days.
After a series of protracted negotiations, Kmart and General
Time finally agreed to settle their dispute in order to avoid
the costs, delay and uncertainty of litigation.
The salient terms of the parties' agreement include:
(a) After the Illinois and Georgia Bankruptcy Courts approve
this settlement agreement, Kmart will pay to General Time
$600,024 -- 40% of General Time's claim against the
Debtors arising out of the sale of the Product, in full
and final satisfaction of General Time's $1,500,061 Claim
against the Debtors;
(b) Upon receipt of the payment, General Time and GTC
Properties, on behalf of themselves and their parent and
subsidiary corporations, affiliates, bankruptcy estates,
officers, directors, employees, agents and assigns, and
any one claiming by or through any of them, will be deemed
to waive the unpaid balance of the Claim; and
(c) The Debtors and their estates covenant not to sue General
Time or their parent and subsidiary corporations,
affiliates, bankruptcy estates, officers, directors,
employees, agents, assigns, or transferees or any of them
for claims arising under Chapter 5 of the Bankruptcy Code
-- Preference Claim. However, that in the event that the
Debtors, their estates, or any party claiming through the
Debtors' estates or pursuing the estates' causes of
action, or any of them file a Preference Claim against any
of the General Time Defendants, the Defendants will be
entitled to set off against the Preference Claim with the
unpaid balance of the Claim -- $900,037.
John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom, in Chicago, Illinois, argues that the proposed settlement
clearly falls within a reasonable range of litigation
possibilities. The dispute between the Debtors and General Time
arises in a very unique context: two bankruptcy estates dispute
the application of the "free and clear" language in the Sale
Order. Though the Debtors argue that General Time is merely an
unsecured creditor in these cases by virtue of that language,
General Time asserts that the language presumes payment for the
Product. Since that payment did not occur, the various
competing liens of General Time's creditors follows the Product
and its proceeds into Kmart's bankruptcy estate, thereby
elevating their position with respect to Kmart's other
creditors.
Based upon these competing assertions, Mr. Butler deems that the
payment of 40% of General Time's Claim represents a fair and
reasonable compromise in light of the risks of litigating the
Lift Stay Motion and the possible costs of also litigating a
turnover action in Georgia involving a number of competing lien
claimants. The settlement also relieves Kmart's estates of over
$900,000 of the amount originally claimed by General Time.
Accordingly, the Debtors ask the Court to approve the settlement
with General Time. (Kmart Bankruptcy News, Issue No. 34;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
DebtTraders reports that Kmart Corp.'s 9.0% bonds due 2003
(KM03USR6) are trading at 17 cents-on-the-dollar, DebtTraders
says. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=KM03USR6
LAIDLAW: Canadian Court Allows Debtor to Settle with Bondholders
----------------------------------------------------------------
Mr. Justice Farley of the Canadian Superior Court of Justice
approved Laidlaw Inc.'s participation in the Settlement
Stipulation with Laidlaw bondholders. Mr. Justice Farley ruled
that:
-- any amounts received by the Laidlaw Bondholders or Class
Members pursuant to the Settlement, other than in respect
of Laidlaw's receipt of the Laidlaw Settlement Amount,
will not in any manner whatsoever reduce:
(a) the amounts of any claims they may have for principal
or accrued interest with respect to the bonds of
Laidlaw held by them; or
(b) their entitlement to distributions of value from
Laidlaw in accordance with the bankruptcy or insolvency
laws of Canada and the USA,
provided that the Laidlaw Bondholders will not recover
from all sources more than 100% of their claims for
principal or accrued interest and other amounts owing with
respect to the Laidlaw bonds they held;
-- any amounts received by the Laidlaw Bondholders in respect
of the Laidlaw Settlement Amount prior to, on, or after,
the effective date of the plan of reorganization will
reduce their claims in the Reorganization Plan only to the
same extent as the claims of other creditors of Laidlaw,
including the bank creditors, are similarly reduced on
account of amounts received by them in respect of the
Laidlaw Settlement Amount; and
-- the Underwriter Defendants, Accountant Defendants and
American Home are deemed to have waived, upon the
effectiveness of the Settlement as to them, any right of
subrogation and they will not assert against Laidlaw with
respect to any money paid under the Settlement. (Laidlaw
Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
MAGELLAN HEALTH: Taps Gleacher Partners to Explore Alternatives
---------------------------------------------------------------
Magellan Health Services, Inc., (NYSE:MGL) provides an update on
the progress of its financial and customer relations matters, as
well as on recent changes to its Board of Directors.
Financial Status
The Company's management is working toward achieving an improved
capital structure that will enhance the long-term potential of
Magellan's business. After exploring opportunities to refinance
the Company's bank debt, the Company has redirected its efforts
to alternatives for reducing its overall debt, including a
possible comprehensive capital restructuring. The Company has
retained Gleacher Partners, LLC to assist it in this effort, and
is working expeditiously to achieve this goal.
As previously reported by Magellan, when the Company completes
and delivers its financial statements for the quarter and fiscal
year ending September 30, 2002 to its banks by the January 7,
2003 deadline, it believes that it will not be in compliance
with one or more of its financial covenants in its Credit
Agreement with bank lenders, in which case its lenders will have
the right to accelerate its debt maturities. As the Company
proceeds with its efforts to reduce its debt and improve its
capital structure, it intends to seek appropriate covenant
waivers from its bank lenders. If such waivers cannot be
obtained, the Company would not have the liquidity necessary to
repay debt if it were accelerated, and its ability to obtain
liquidity required for its operations would be uncertain.
"The Company's cash flow from operations continues to be
positive and the Company remains current on all payments to its
providers, vendors, suppliers and lenders. Moreover, we believe
we have the financial resources to remain current on all
operating obligations and to continue investing in our business
while we work to reduce our debt, absent an acceleration of our
debt maturities," said Mark S. Demilio, chief financial officer.
The Company's operational performance has continued to improve,
as evidenced by claims timeliness, in which 98% of claims paid
in August 2002 were paid within thirty days, compared with 97%
for claims paid in the same period last year.
Customer Relations
"The vast majority of our customers continue to demonstrate
their confidence in our ability to serve them, including those
who have renewed business with us this quarter. These customers
range in size from smaller, growing businesses to Fortune 500
companies, and their contracts are for a variety of services,"
stated Daniel S. Messina, president and chief executive officer.
The Company continues its discussions with Aetna, its largest
customer, regarding renewal of its contract on January 1, 2004.
"We are pleased with the progress we have made on the
negotiations for the renewal of our contract with Aetna," said
Jay J. Levin, chief operating officer. "We continue to work
toward an agreement that meets the needs of Aetna, its customers
and its members."
Board of Directors
The Company also announced that Darla D. Moore and Jeffrey A.
Sonnenfeld have resigned from the board of directors, both
citing personal considerations. "We appreciate the efforts and
dedication both Darla and Jeff have contributed over the years
and understand and respect the personal matters that led to
their decisions to resign," stated Dr. Henry T. Harbin, chairman
of the board of Magellan.
Headquartered in Columbia, Md., Magellan Health Services, Inc.
(NYSE:MGL), is the country's leading behavioral managed care
organization, with approximately 68 million covered lives. Its
customers include health plans, government agencies, unions, and
corporations.
METROMEDIA INT'L: Defers $11MM Interest Payment on Senior Notes
---------------------------------------------------------------
Metromedia International Group, Inc., (AMEX:MMG), the owner of
various interests in communications and media businesses in
Eastern Europe, the Commonwealth of Independent States and other
emerging markets, announced that to facilitate any potential
restructuring of the Company, it has decided not to pay the
$11.1 million interest payment that was due today on its $210.6
million 10-1/2% Senior Discount Notes due 2007.
If the Company does not make the interest payment on or before
the expiration of the 30-day grace period an "event of default"
under the indenture governing these notes will occur.
The Company continues to hold negotiations with representatives
of holders of its Senior Discount Notes in an attempt to reach
an agreement on a restructuring of its indebtedness in
conjunction with proposed asset sales and restructuring
alternatives. In addition, the Company recently retained Kroll
Zolfo Cooper as its professional advisor to assist management in
developing a financial restructuring plan and undertaking
discussions with the Company's bondholders and preferred stock
holders.
To date, the Company and representatives of note holders have
not reached an agreement on terms of a restructuring. The
Company cannot make any assurance that it will be successful in
raising additional cash through asset sales or through cash
repatriations from its business ventures, nor can it make any
assurance regarding the successful restructuring of its
indebtedness.
Metromedia International Group, Inc., is a global communications
and media company. Through its wholly owned subsidiaries and its
business ventures, the Company owns and operates communications
and media businesses in Eastern Europe, the Commonwealth of
Independent States, China and other emerging markets. These
include a variety of telephony businesses including cellular
operators, providers of local, long distance and international
services over fiber-optic and satellite-based networks,
international toll calling, fixed wireless local loop, wireless
and wired cable television networks and broadband networks, FM
radio stations, and e-commerce.
The Company also owns Snapper, Inc., Snapper manufactures
premium-priced power lawnmowers, garden tillers, snow throwers,
utility vehicles and related parts and accessories.
MOBILE TOOL: Case Summary & 21 Largest Unsecured Creditors
----------------------------------------------------------
Lead Debtor: Mobile Tool International, Inc.
5600 West 88th Street
Westminster, Colorado 80031
Bankruptcy Case No.: 02-12826
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
MTI Insulated Products, Inc. 02-12827
Type of Business: Mobile Tool International, Inc., is an
employee owned manufacturer and distributor
of equipment, including aerial lifts, digger
derricks and pressurization and monitoring
systems, for the telecommunications, CATV,
electric utility and construction industries.
Chapter 11 Petition Date: September 30, 2002
Court: District of Delaware (Delaware)
Debtors' Counsel: Steven M. Yoder, Esq.
Christopher A. Ward, Esq.
The Bayard Firm
222 Delaware Avenue
Suite 900
Wilmington, DE 19899
302 655-5000
Fax : 302-658-6395
and
Brent R. Cohen, Esq.
Rothgerber Johnson & Lyons LLP
One Tabor Center, 1200 Seventeenth Street,
Suite 3000
Denver, Colorado 80202-5855
Total Assets: $65,250,000
Total Debts: $46,580,000
Debtor's 21 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Danzer Industries Trade $277,489
Attn: Jen Bathgate
17500 York Road
Hagerstown, MD 21740
Phone: 301-582-2000
Jorgensen Co., Earle M. Trade $144,029
Automotive Rentals, Inc. Trade $132,709
Knapheide Mfg. Co. Trade $110,848
Brand FX Trade $109,789
Texas Hydraulics Inc. Trade $108,232
Contemporary Products Trade $101,983
Delphi Body Works, Inc. Trade $95,498
Marsh USA, Inc. Trade $76,154
Parker Hannifin Corp. Trade $62,865
McCoy Sales Trade $53,756
Fiero Fluid Power Trade $53,124
Sill-Terhar Ford Trade $46,395
Pneumatic Specialties Trade $44,135
Gast Manufacturing Corp. Trade $41,476
Anixter, Inc. Trade $39,536
Kesef Associates Trade $35,910
Products of Technology Trade $34,614
E.J. Painting & Fiberg Trade $33,534
Onam Corp. Trade $33,003
MTE Hydraulics Trade $28,881
NATIONSRENT INC: Wants Court to Appoint Mediator for Proceedings
----------------------------------------------------------------
In conjunction with the implementation of mediation procedures,
NationsRent Inc., and its debtor-affiliates will also assign a
mediator to facilitate the would-be discussions with the
defendant parties. The Mediator, in consultation with the
parties, will set the date of the mediation conference.
According to Jeffrey L. Moyer, Esq., at Richards, Layton &
Finger, P.A., in Wilmington, Delaware, the Mediator will be
immune from civil liability for or resulting from any act or
omission done or made while engaged in efforts to assist or
facilitate a mediation -- unless the act or omission was made or
done in bad faith, with malicious intent or in a manner
exhibiting a willful, wanton disregard of the rights, safety or
property of another.
The Mediator will not be compelled to disclose to the Court or
to any person outside the Mediation Conference any of the
records, reports, summaries, notes, communications or other
documents received or made while serving in that capacity. The
Mediator will not testify or be compelled to testify in regard
to the mediation in connection with any arbitral, judicial, or
other proceeding. The Mediator will not be a necessary party in
any proceedings relating to the mediation.
The Mediator is not required to prepare written comments or
recommendations to the parties. The Mediator may present a
written settlement recommendation memorandum to attorneys or pro
se litigants, but not to the Court. However, Mr. Moyer explains
that the Mediator may, without disclosing certain information
protected from disclosure, submit reports to the Court that
would categorize unresolved proceedings and make recommendations
to the Court with respect to the manner in which the legal
issues raised by the proceedings should be resolved.
Presently, the Debtors have two candidates as Mediator:
-- Roger M. Whelan, outside counsel to Shaw Pittman and
former United States Bankruptcy Judge for the District of
Columbia; and
-- Erwin I. Katz, former United States Bankruptcy Judge for
the Northern District of Illinois;
But Mr. Moyer reveals that the Debtors have not had any
discussions with Messrs. Katz or Whelan regarding their
availability to serve as Mediator. Nonetheless, the Debtors are
not aware of any relationship between them and Messrs. Whelan or
Katz.
By this motion, the Debtors ask the Court to appoint a single
mediator to mediate the proceedings.
The Debtors seek the Court's authority to compensate and
reimburse the Mediator for Debtors' share of services and
expenses in connection with the Mediation Procedures without
further notice or Court approval. Mr. Moyer points out that no
court approval is needed since the Debtors and the nondebtor
parties to the mediation will share the costs of the mediation
equally. (NationsRent Bankruptcy News, Issue No. 19; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
NEOTHERAPEUTICS: Regains Compliance with Nasdaq Listing Criteria
----------------------------------------------------------------
NeoTherapeutics, Inc., (Nasdaq: NEOT) announced that NASDAQ has
notified the Company that it had regained compliance with
NASDAQ's minimum bid price per share ($1.00) requirements for
continued listing on the NASDAQ National Market.
NeoTherapeutics seeks to create value for shareholders through
the in-licensing and commercialization of anti-cancer drugs and
the discovery and out-licensing of drugs for central nervous
system disorders. Satraplatin, the Company's lead oncology
drug, is being prepared for phase 3 study. Additional anti-
cancer drugs are in phase 1 and 2 stages of development for
bladder cancer and non-Hodgkin's lymphoma. The Company has a
pipeline of pre-clinical neurological drug candidates for
disorders such as attention-deficit hyperactivity disorder,
schizophrenia, dementia, mild cognitive impairment and pain.
For additional information visit the Company's Web site at
http://www.neot.com
NETIA: Creditors' Meetings to Accept Plans Adjourned to Oct. 28
---------------------------------------------------------------
Netia Holdings S.A. (Nasdaq: NTIAQ/NTIDQ, WSE: NET), Poland's
largest alternative provider of fixed-line telecommunications
services (in terms of value of generated revenues), announced
that the creditors' meetings to accept the composition plans of
its three Dutch subsidiaries, Netia Holdings B.V., Netia
Holdings II B.V. and Netia Holdings III B.V., were re-adjourned
by the supervisory judge until October 28, 2002.
The verification hearings by the court in the Netherlands have
been provisionally scheduled for November 6, 2002.
Netia Holdings SA's 13.125% bonds due 2009 (NETH09NLN1) are
trading at 18 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NETH09NLN1
for real-time bond pricing.
NORTEL: Inks Patent Cross License Pact with Extreme Networks
------------------------------------------------------------
Nortel Networks Limited (NYSE:NT) (TSX:NT.) and Extreme
Networks, Inc., (Nasdaq:EXTR) have entered into a patent cross
license agreement, the terms and conditions of which are
confidential. The pending lawsuit between Nortel Networks
Limited, Nortel Networks, Inc., the U.S. subsidiary of Nortel
Networks Limited, and Extreme Networks in the United States
District Court for the District of Massachusetts, Civil Action
No. 01-10443, has been dismissed.
Extreme Networks provides the most effective applications and
services infrastructure by creating networks that are faster,
less complex and more cost-effective than conventional
solutions. Headquartered in Santa Clara, Calif., Extreme
Networks sells its award-winning switching solutions in more
than 50 countries. For more information, visit
http://www.extremenetworks.com
Nortel Networks is an industry leader and innovator focused on
transforming how the world communicates and exchanges
information. The company is supplying its service provider and
enterprise customers with communications technology and
infrastructure to enable value-added IP data, voice and
multimedia services spanning Metro and Enterprise Networks,
Wireless Networks and Optical Networks. As a global company,
Nortel Networks does business in more than 150 countries. More
information about Nortel Networks can be found on the Web at
http://www.nortelnetworks.com
Nortel Networks Corp.'s 7.875% bonds due 2026 (NT26CAR1) are
trading at 34 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NT26CAR1for
real-time bond pricing.
NORTHWEST AIRLINES: Names Bernard L. Han to Replace Mickey Foret
----------------------------------------------------------------
Northwest Airlines (Nasdaq: NWAC) announced that Mickey Foret,
executive vice president and chief financial officer, and
chairman and chief executive officer, Northwest Airlines Cargo
Inc., retired Monday, September 30.
The airline named Bernard L. Han, formerly America West
Airline's executive vice president and chief financial officer,
to replace Foret as EVP and CFO. During the 1990s, Han held
various finance positions at Northwest.
Doug Steenland, president of Northwest Airlines, will assume the
additional duties of chairman & CEO, NWA Cargo Inc.
Richard Anderson, Northwest Airlines chief executive officer,
said, "Mickey Foret has been a recognized leader in the airline
industry for more than 30 years. For nearly 10 years, he has
been a key member of the Northwest executive team as we have
made the tough business decisions required to position the
airline as a viable long term player in the industry."
"When Mickey rejoined Northwest in 1998, he committed to a four
year term as CFO which he has now completed. He has decided to
retire and spend more time with his family. We are very pleased
he has agreed to be a consultant to Northwest. His tremendous
experience and knowledge will be of great assistance to our
executive management team and will ensure a smooth transition,"
Anderson added.
Commenting on Han, Anderson said, "Bernie brings 15 years of
financial experience in the airline industry and a thorough
knowledge of Northwest to his new position. This will be a
great advantage as we continue to address the difficult
operating environment resulting from the impact of September 11,
2001 and the decline in business travel."
Anderson continued, "Mickey Foret has done an excellent job of
developing a strong group of first rate finance executives who
will now work with Bernie to guide our company in critical
financial matters."
Discussing his new position, Han said, "It is great to be back
at Northwest. I look forward to working with Richard and his
team to position the airline as a global leader during these
very challenging economic times."
Discussing his tenure at Northwest, Foret said, "I have enjoyed
immensely working with Richard, Doug Steenland and Northwest's
senior management team to help position Northwest to be a leader
in our industry. The airline is in good financial shape to
withstand the economic issues it faces today. I look forward to
working as a consultant to Northwest."
Han has been executive vice president and chief financial
officer of America West since September 2001. He played a lead
role in successfully restructuring America West and securing a
government-backed loan in the months following the September 11
attacks. He joined America West in 1996 as vice president,
financial planning and analysis. Han was promoted to senior
vice president of planning in 1998. In 2000, he was named senior
vice president - marketing and planning, and his
responsibilities were expanded to include all of the airline's
marketing and sales functions.
Before joining America West, Han spent five years with Northwest
and three years with American Airlines in financial planning and
analysis. He earned a bachelor of science, master of electrical
engineering, and master of business administration from Cornell
University.
Northwest Airlines is the world's fourth largest airline with
hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and
Amsterdam and more than 1,700 daily departures. With its travel
partners, Northwest serves more than 750 cities in 120 countries
on six continents.
* * *
As reported in Troubled Company Reporter's March 22, 2002,
edition, Fitch Ratings assigned a rating of 'B+' to the $300
million in senior unsecured notes issued by Northwest Airlines
Corp. The privately placed notes carry a coupon rate of 9.875%
and mature in March 2007. The Rating Outlook for Northwest is
Negative.
The 'B+' rating reflects the signs of stabilization in
Northwest's cash flow position.
Northwest continues to face a high degree of financial risk as
it seeks to recover from the post-September 11 demand shock.
Adjusted leverage, reflecting both on-balance sheet debt and
off-balance sheet aircraft and facilities lease obligations,
remains extremely high. After drawing down its bank credit
facility following September 11 and completing financing for a
large number of new aircraft deliveries, Northwest's fixed
financing charges will remain high in 2002-2003.
Northwest Airlines Inc.'s 9.875% bonds due 2007 (NWAC07USR2),
DebtTraders says, are trading at 45 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NWAC07USR2
for real-time bond pricing.
NOVO NETWORKS: Continues to Incur Net Loss in Fourth Quarter
------------------------------------------------------------
Novo Networks, Inc., (OTC BB:NVNW) announced financial results
for the fiscal fourth quarter and year ended June 30, 2002.
As previously disclosed, the United States Bankruptcy Court for
the District of Delaware, by an order dated March 14, 2002,
approved an amended plan, pursuant to Title 11, Chapter 11 of
the United States Code, for the liquidation of the assets of
Novo Networks' operating subsidiaries, including Novo Networks
Operating Corp., AxisTel Communications, Inc., and e.Volve
Technology Group, Inc., which historically provided
substantially all of Novo Networks' revenues. These debtor
subsidiaries ceased all operations prior to December 31, 2001.
Accordingly, Novo Networks did not generate any revenues during
the fiscal third and fourth quarters.
Novo Networks reported a net loss of $5.0 million in the fourth
quarter of fiscal 2002, compared to a net loss of $18.4 million
in the fourth quarter of fiscal 2001. The loss consisted of,
among other things, administrative expenses of $1.0 million, a
bad debt provision of $3.6 million and an impairment loss of
$2.3 million, which resulted from the write down to estimated
fair market value of certain telecommunications assets. The loss
was offset by a non-cash gain of $2.0 million from the excess of
the relieved liabilities over the assets transferred to the
liquidating trust in connection with the debtor subsidiaries'
amended plan. The weighted average number of shares outstanding
(basic and fully diluted) for the fourth quarters of fiscal 2002
and 2001 were 52,323,701 and 52,222,671, respectively.
Revenues were $10.5 million in fiscal 2002, compared to $72.0
million in fiscal 2001. The decline in revenues was due to the
cessation of operations by the debtor subsidiaries. Novo
Networks reported a net loss of $8.4 million in fiscal 2002,
compared to a net loss of $184.2 million in fiscal 2001. Again,
the weighted average number of shares outstanding (basic and
fully diluted) for fiscal 2002 and 2001 were 52,323,701 and
52,222,671, respectively.
NRG GROUP: TSX Will Suspend Trading Effective October 25, 2002
--------------------------------------------------------------
The common shares (Symbol: NRG) of The NRG Group Inc., will be
suspended from trading as of the market close on Friday, October
25, 2002, for failure to meet the continued listing requirements
of the TSX.
OPTI INC: Sells Semiconductor Business to OPTi Technologies
-----------------------------------------------------------
OPTi Inc., (NASDAQ/NMS:OPTI) has sold its semiconductor business
to OPTi Technologies, Inc., an unaffiliated company formed to
acquire the semiconductor business, for approximately $700,000
in cash plus future royalties. The maximum amount of the deal if
the acquirer were to remit the full amount of royalties would be
approximately $1,900,000 in cash.
Bernard Marren, CEO and President of OPTi, stated, "The Company
had explored several options in regards to the sale of the
business and determined that this was the best deal for the
Company and our shareholders. This deal eliminates our risk in
inventory and accounts receivable if the semiconductor market
continues to have weakness and provides the Company with a
revenue stream in the future. The sale also allows for the
Company to continue to reduce our operating expenses as we focus
on what we perceive to be the true value to our shareholders,
which is our intellectual property. As previously stated the
Company's Board determined that it would be prudent to postpone
the liquidation plan to allow the Company more time to evaluate
its intellectual property position, including the means by which
it would pursue claims for the potential infringement of certain
of its patents."
OPTi Inc., an independent supplier of semiconductor products to
the personal computer market is headquartered in Mountain View,
California. OPTi stock is traded on the National Market System
under NASDAQ symbol OPTI.
OWENS CORNING: Clarifies New Old Republic Insurance Policy
----------------------------------------------------------
Pursuant to the terms of the previous policy with Old Republic
Insurance Company, under which Owens Corning is liable for all
losses paid within the deductible level -- $500,000 for each
occurrence, Owens Corning was to provide Old Republic with a
letter of credit amounting to $8,361,000.
Under the new insurance policy, Owens Corning is liable for all
losses paid within the deductible level -- $500,000 for each
occurrence, plus any allocated loss adjustment expenses. Owens
Corning provided Old Republic with an $8,500,000 postpetition
Letter of Credit on August 28, 2001. The new insurance policy
commenced as of September 1, 2002.
The parties want to clarify certain issues, which arose from the
previous policy. The issues arose from the fact that Old
Republic's reimbursement rights and associated claims against
Owens Corning with respect to the previous policy and the
current policy would remain unliquidated for a long period of
time because covered workers' compensation claims may be payable
for years after the policies expired.
Under the circumstances, the Debtors recognize that placing a
value on claims for deductible loss reimbursement relating to
large deductible policies shortly after a policy year ends may
be difficult. This could result in estimated claims, which are
either significantly higher or lower than the actual
reimbursement claims.
To clarify the issues, the parties stipulate and agree that:
A. Old Republic is entitled to an unliquidated administrative
claim against Owens Corning, on account of the possibility
that Owens Corning fails to make premium payments, or pays
any other amounts due with respect to the new policy,
or Owens Corning fails to make payments within the
deductible layer of the New Policy for deductibles relating
to, or on account of, occurrences giving rise to workers'
compensation claims covered by the New Policy;
B. The administrative claims are to survive confirmation of
Owens Corning's Reorganization Plan, not be liquidated or
adjudicated by the Court and not be payable upon the
effective date of the Plan, unless the confirmed plan for
Owens Corning provides for Owens Corning's liquidation. In a
case of liquidation, Old Republic's administrative claim
against Owens Corning is to be estimated and adjudicated by
the Court and paid when allowed;
C. Old Republic is to issue the new policy to Owens Corning for
the one-year period beginning as of September 1, 2002. Court
approval of the Stipulation is to be deemed to be
authorization for Owens Corning to enter into the New Policy
and to procure an additional letter of credit of up to
$10,000,000. Owens Corning is not to seek to recover, until
September 1, 2006, any excess proceeds of the new Letter of
Credit, if drawn upon by Old Republic, unless otherwise
agreed by the parties;
D. The proceeds of the prepetition Letter of Credit are to be
applied first to Old Republic's unsecured claim on account of
the previous policy. Old Republic may apply the remaining
proceeds of the prepetition Letter of Credit and the proceeds
of the Post-Petition Letter of Credit and the New Letter of
Credit to its administrative claims relating to the previous
policy, the current policy and the New Policy as it sees
fit, in its sole reasonable discretion; and
E. In the event Owens Corning does not make all required premium
payments owed on account of the new policy or does not make
all required deductible payments on account of the claims
covered by the new policy, Old Republic is to be entitled,
without obtaining relief from the automatic stay, but only
after providing Owens Corning and its Official Creditors'
Committees and Futures Representative with no less than seven
business days' prior written notice, to exercise its state
law rights, if any, to cancel the new policy. (Owens Corning
Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
PEREGRINE SYSTEMS: Seeking Nod to Obtain $110MM DIP Financing
-------------------------------------------------------------
Peregrine Systems, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for permission to
obtain access to fresh working capital financing under the terms
of a Debtor in Possession Credit Agreement with BMC Software.
As of the Petition Date, the Debtors owe Foothill Capital
Corporation (as administrative Agent for Cerberus) approximately
$36.2 million.
BMC has agreed to provide the Debtors with up to $110 million of
debtor-in-possession financing necessary to fund certain of the
Debtors' ongoing expense until the Court will consider the
Remedy Sale. BMC will be granted superpriority claims and
first priority security interest and liens in accordance with
the Bankruptcy Code in substantially all of the Debtors' assets.
Prior to the Petition Date, Peregrine negotiates with a number
of potential purchasers for the sale of all, or a portion of,
its interest in Remedy. Immediately prior to the Petition Date,
the Debtors entered into an agreement with BMC for the purchase
and sale of 100% of the assets of Remedy. The proposed purchase
price for this sale transaction is $350 million in cash plus
assumption of certain liabilities. BMC Agreed to provide DIP
financing facility to the Debtors until the Proposed Sale can be
considered by the Court and consummated.
The Debtors currently have access to limited cash and anticipate
that any available cash as a sole source of the Debtors'
funding, would be exhausted shortly. Accordingly, the Debtors
require postpetition financing to ensure that they will have
sufficient funds available to meet their operating expenses.
Further, the Debtors expects to use DIP Financing proceeds to
promptly pay and satisfy the secured claims of Foothill,
Debtors' prepetition secured lender. The Debtors believe that
the DIP Financing will provide funds sufficient to permit the
Debtors to operate their businesses and pay their reorganization
expenses through the proposed sale process and confirmation of a
reorganization plan. Foothill, the Debtors prepetition secured
lender, has no basis to object because, upon interim approval of
the DIP Financing, the Debtors expect to pay and satisfy
Foothill's secured claims with proceeds from the DIP Financing.
Absent the proposed DIP Financing, the Debtors' believe that
their operation will cease, the Proposed Sale will collapse, and
any going concern value of the Debtors' businesses will be lost.
Thus, the Debtors have an urgent need to obtain from this Court
to obtain the DIP Financing, on the terms and conditions of the
DIP Loan Documents, to continue operations, administer the
bankruptcy cases, and preserve the value of their businesses.
The Debtors believe that the DIP financing offered by BMC best
suits their needs by providing them with working capital
necessary to preserve going concern value through a closing on
the sale as contemplated by the Debtors' sale motion and plan
confirmation. Additionally, the Debtors believe that the DIP
Financing is entered in good faith and upon the most favorable
terms that could be achieved under the circumstances.
The DIP Financing is a multi-draw DIP term facility in the
aggregate principal amount of $110,000,000, $10,000,000 of which
would be reserve for payment of any break-up fee to BMC in
connection with the proposed sale, provided that only
$60,000,000 would be available until the Bid Procedure is
approved.
The Financing will terminate at the earliest of:
a) December 31, 2002,
b) effective date of an acceptable reorganization plan or
confirmation date of any other reorganization plan,
c) closing of the Proposed Sale to BMC, and
d) 15 days after entry of an order approving a sale of Remedy
to a buyer.
The Debtors tell the Court that they were unable to obtain
credit on more favorable terms. They have not been able to
obtain postpetition financing on an unsecured basis in an amount
sufficient to provide the Debtors with the necessary liquidity
to continue operation of the Debtors' businesses.
Peregrine Systems, Inc., the leading global provider of
Infrastructure Management software, filed for chapter 11
protection on September 22, 2002. Laura Davis Jones, Esq., at
Pachulski, Stang, Ziehl Young & Jones represent the Debtors in
their restructuring efforts. When the Company filed for
protection from its creditors, it listed estimated debts and
assets of more than $100 million.
POLAROID CORP: Retirees Ask UST to Create New Retiree Committee
---------------------------------------------------------------
In a letter dated September 3, 2002, the Polaroid Retirees
Association, Inc., asked the U.S. Trustee to assign a committee
entitled, "Committee for Current and Potential Retired Polaroid
Employees". The Committee is for the retirees to pursue claims
against:
(a) Polaroid Management for breach of fiduciary duties with
regard to the management of the Polaroid Pension Plan;
and
(b) Polaroid Management or the State Street Bank and Trust
Co. as the ESOP Trustee with regard to the untimely
dissolution and mismanagement of the Polaroid ESOP
Trust.
Moreover, the proposed Committee should investigate the breach
of promises made by Polaroid Management with regard to Severance
Plans and to pursue claims against Polaroid Management and other
parties, if mismanagement with regard to other benefit plans is
so uncovered by virtue of the discovery phase of the Pension,
ESOP and the Severance Plans.
John D. Gignac, First Vice President of Polaroid Retirees
Association, relates that the Official Committee of Retirees
will not pursue any claims against the Polaroid Pension Plan,
the Polaroid ESOP Trust or the Polaroid Severance Plans outside
the bankruptcy proceedings but leaves it open for individuals to
make the claims on their own behalf. "The Association
recognizes, as should the Court, that the individuals involved
do not have the financial resources to bring the claims against
Polaroid, which is represented by highly professional counsel,
and therefore, another avenue for seeking remedy is needed," Mr.
Gignac explains.
Thus, Mr. Gignac contends that a separate committee, which is
not encumbered by the constraints of Section 1114 of the
Bankruptcy Code, is the only practical means of seeking remedy
for the countless retirees and employees affected by the default
of the Pension, ESOP and certain Severance Plan. (Polaroid
Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
Polaroid Corporation's 11.50% bonds due 2006 (PRDC06USR1),
DebtTraders says, are trading at 5.75 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=PRDC06USR1
for real-time bond pricing.
PRESIDENT CASINOS: Broadwater Unit Agrees to Certain Plan Terms
---------------------------------------------------------------
President Casinos, Inc., (OTC:PREZ) announced that its
indirectly owned subsidiary, President Broadwater Hotel, LLC,
has agreed in principle to certain terms of a consensual plan of
reorganization which should allow the subsidiary to emerge from
bankruptcy in November of this year.
The subsidiary had filed for Chapter 11 protection in the United
States Bankruptcy Court for the Southern District of Mississippi
during April 2001. President Broadwater Hotel, LLC owns the
President Broadwater Resort property in Biloxi, Mississippi,
with an adjoining golf course, on a total of approximately 260
acres. In addition, President Broadwater Hotel, LLC owns the
marina in which the Company's Mississippi gaming subsidiary
operates its casino.
The Company anticipates that a modified plan will be filed
during October in preparation for the October 30, 2002
confirmation hearing date. Key highlights to the consensual
reorganization plan include:
1) Payment in full of all unsecured creditors upon
confirmation of the plan;
2) Extension of repayment obligation to June 2005;
3) Reductions of various LIBOR based variable interest
rates including the lowering of the interest rate floor from
8.75% to 7.75% prior to the maturity of the note;
4) Certain discounts for possible early retirement of the
debt; and
5) Agreement not to file for bankruptcy again.
"We are pleased that we have been able to work out a consensual
plan that we believe is both equitable and achievable," said
John S. Aylsworth, President and Chief Operating Officer. "We
believe the maturity extension to June 2005 will enable the
Company to fully realize the value of the Biloxi property. We
are especially pleased that the plan calls for the payment in
full of all of the unsecured vendors who have cooperated with us
during this process. With the anticipated November
implementation of the plan, we can turn our focus to an overall
plan to restructure all of the Company's obligations."
President Casinos, Inc., owns and operates dockside gaming
facilities in Biloxi, Mississippi and in downtown St. Louis,
Missouri, north of the Gateway Arch.
PSINET INC: Court to Consider Preferreds Settlement on Oct. 16
--------------------------------------------------------------
The Court will convene a hearing on October 16, 2002 to consider
the approval of a settlement between PSINet Liquidating LLC, as
successor to the PSINet Debtors, and the Ad Hoc Committee of
Series C 6-3/4% Cumulative Convertible Preferred Shareholders.
The Dispute
As an inducement for potential purchasers to purchase the
Preferred Stock, PSINet offered to pay cash to holders of the
Preferred Stock, or give them common stock in PSINet in each
calendar quarter.
To fund the payment of cash or the purchase of common stock to
be distributed to these Preferred Shareholders, PSINet set aside
a portion -- approximately 19.34% -- of the purchase price of
the Preferred Stock, pursuant to an underwriting agreement dated
April 28, 1999.
PSINet then entered into a Deposit Agreement with Wilmington
Trust Company on May 4, 1999, for Wilmington as Deposit Agent,
to establish a deposit account to hold these funds and the
interest generated.
The Deposit Agreement provided that PSINet was to give
Wilmington instructions as to when and how the Funds were to be
distributed to the Preferred Shareholders.
Since May 2001, PSINet has not provided Wilmington with any
instructions as to the disposition of the Funds.
At present, the amount in the Account has accrued to
$15,500,000.
The Deposit Account, on its own terms, terminated on May 15,
2002. Pursuant to the Deposit Agreement, any funds remaining in
the Deposit Account as of the May 15, 2002 Expiration Date was
to be returned to the Preferred Shareholders. But returns have
been made.
Controversy exists as to who owns the funds in the Deposit
Account.
PSINet argues that the funds are part of its Chapter 11 estate
and it was excused from providing instructions for returning the
funds.
On the other hand, the Ad Hoc Committee representing the
Preferred Shareholders contends that the Funds belong to the
Preferred Shareholders.
The Stipulated Settlement
Without admitting liability or wrongdoing, PSINet, the PSINet
Liquidating Oversight Committee, the Ad Hoc Committee and
Wilmington Trust agree to resolve the dispute by this
settlement:
1. Transfer of Funds from Deposit Account to Trust Accounts
The Court will fix a Distribution Date -- the date for funds
to be transferred from the Deposit Account to trust accounts
established by counsel for the Ad Hoc Committee and by
counsel for PSINet. This date will not be earlier than the
date on which an order of the Bankruptcy Court approving this
Stipulation becomes final and non-appealable.
On the Distribution Date, PSINet will authorize and direct
the Deposit Agent, by way of a Direction Notice in the
written form, to transfer these Directed Amounts:
(a) all of the funds in the Deposit Account less the sum of
$747,500.00 to a trust account established by counsel for
the Ad Hoc Committee,
(b) the remaining $747,500.00 to a trust account established
by counsel to the Debtors.
The major portion of the funds to be transferred to the Ad
Hoc Committee's trust account, as described in (a), will be
used for further distribution to the Preferred Shareholders
and to pay the legal fees for Counsel to Wilmington Trust and
Counsel for the Ad Hoc Committee.
The $747,500 in the Debtors' trust account is allocated in
recognition of benefits conferred upon the Preferred
Shareholders by PSINet, the PSINet Liquidating Oversight
Committee, and by their respective counsel in connection with
PSINet's bankruptcy cases.
The Deposit Agent will transfer the Directed Amounts on the
date of receipt of the Direction Notice, or, if the Deposit
Agent receives the Direction Notice later than 11:00 a.m. New
York time, the Deposit Agent will transfer the Directed
Amounts on the next business day.
To the extent any amounts in the Deposit Account accrue or
are liquidated on or after the Distribution Date, Wilmington
Trust, as Deposit Agent, will transfer the amounts in
accordance with the instructions in the Direction Notice on
the business day the amounts accrue or are liquidated, or, if
not practical, on the next business day.
2. Onward Distribution to Preferred Shareholders and to Counsel
for Payment of Legal Fees and Expenses
Promptly after receipt of the Transferred Funds, counsel for
the Ad Hoc Committee will transfer out of it:
-- an amount not to exceed $50,000.00 to Covington & Burling,
counsel to Wilmington Trust, for legal fees and expenses
incurred by Wilmington Trust, as Deposit Agent in
connection with the Deposit Agreement;
-- an amount not to exceed $50,000 to Lowenstein Sandler,
Counsel to Ad Hoc Committee, as Lowenstein Sandler's fees,
in accordance with its ordinary and customary hourly rates
plus a 40% enhancement;
-- the balance of the Transferred Funds will be distributed
to the Preferred Shareholders in proportion to the number
of shares owned by each Preferred Shareholder as of the
date on which this Stipulation is approved by the Court.
Distribution from the Transferred Funds will only be made to
Preferred Shareholder who file with counsel to the Ad Hoc
Committee, and with the Bankruptcy Court, a sworn statement
attesting to the number of shares of Preferred Stock owned by
the Preferred Stockholder. The expenses of making this
distribution will be paid out of the Transferred Funds.
Any person who acquires Preferred Stock subsequent to the
date of the Hearing Date will not be entitled to receive a
distribution from the Deposit Account.
3. Immediately upon transfer of the funds in the Deposit Account
pursuant to paragraph one (1) above, the duties, obligations
and liabilities of Wilmington Trust, as Deposit Agent, under
the Deposit Agreement will terminate, and the provisions of
Section 6 under the Deposit Agreement will inure to its
benefit as actions taken or omitted to be taken while it was
the Deposit Agent.
4. Counsel for the Ad Hoc Committee will cause an advertisement
giving notice of this settlement to be published in the
national edition of the New York Times in accordance
with an order of the Court fixing the manner of notice.
* * *
By order dated September 13, 2002, Judge Gerber directed the Ad
Hoc Committee to advertise the hearing on the Settlement in the
national edition of the New York Times. Copies of the
Stipulation will also be mailed to:
(i) all known Series C 6-3/4% Cumulative Convertible Preferred
Shareholders at the last address known to the Ad Hoc
Committee and to the Debtors,
(ii) all persons having filed a notice of appearance in the
PSINet's chapter 11 cases;
(iii) counsel to the PSINet Liquidating Oversight Committee;
(iv) the United States Trustee;
(v) the Securities and Exchange Commission; and
(vi) all persons requesting copies of the documents.
Responses must be in writing, filed with the Clerk of the
Bankruptcy Court, and received, by electronic mail on or before
October 11, 2002 by all persons required to be served under Fed.
R. Bank. P. 2002, including, but not limited to:
(i) Lowenstein Sandler, PC, Attn: Kenneth A. Rosen, Esq.
(krosen@lowenstein.com),
(ii) Wachtell Lipton Rosen & Katz, Attn: Scott Charles, Esq.
(scharles@wlrk.com),
(iii) Wilmer Cutler & Pickering, Attn: Andrew Goldman, Esq.
(agoldman@wilmer.com), and
(iv) the United States Trustee. (PSINet Bankruptcy News,
Issue No. 28; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
DebtTraders says that PSINET Inc.'s 11% bonds due 2009
(PSIX09USS1) are trading at 10 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=PSIX09USS1
for real-time bond pricing.
RECREATION USA: Fails to Maintain Nasdaq Listing Requirements
-------------------------------------------------------------
Holiday RV Superstores, Inc., (Nasdaq: RVEE) has received notice
from The Nasdaq Stock Market, Inc., indicating that Holiday was
not in compliance with the listing requirements of Marketplace
Rule 4310(C)(2)(B), which requires a minimum of $2,000,000 in
net tangible assets, or $2,500,000 in stockholders' equity, or a
market value of listed securities of $35,000,000, or $500,000 of
net income from continuing operations for the most recently
completed year or two of the three most recently completed
fiscal years, and Rule 4310(C)(7), which requires at least
500,000 publicly held shares with a market value of at least
$1,000,000.
Holiday has until October 9, 2002 to provide to Nasdaq its plan
to achieve and sustain compliance with Rule 4310(C)(2)(B)
listing requirements. Holiday is currently preparing its
restructuring plan to present to Nasdaq. If the staff
determines that Holiday's plan does not adequately address the
issues, Holiday will be given a delisting notification. At that
time, Holiday may appeal the staff's decision to a Nasdaq
Listing Qualifications Panel to review the staff determination.
Holiday does not know when such a hearing would take place, if
necessary, nor does Holiday know the anticipated determination
date.
Holiday has until December 26, 2002 to meet the requirements of
Rule 4310(C)(7) requiring that the market value of its publicly
held shares be at least $1,000,000 for ten consecutive trading
days. If compliance with this rule is not met by that date,
Holiday will be given a delisting notice. At that time, Holiday
may appeal the staff's decision to a Nasdaq Listing
Qualifications Panel to review the staff determination.
While Holiday is in the process of implementing a restructuring
of its capital structure which it believes will satisfy the
Nasdaq listing requirements, there can be no assurance that the
restructuring will be successful or that the restructuring plan
will meet the listing requirements of Rule 4310(C)(2)(B) and
Rule 4310(C)(7) or the requirements of the appeals panel.
Recreation USA operates retail stores in California, Florida,
Kentucky, New Mexico, South Carolina, West Virginia. Recreation
USA, the nation's only publicly traded national retailer of
recreational vehicles and boats, sells, services and finances
more than 90 RV brands and several boat brands.
RELIANCE GROUP: Liquidator Sells Advantage Notes for $6.9 Mill.
---------------------------------------------------------------
M. Diane Koken, Insurance Commissioner of Pennsylvania, has sold
a group of Senior Notes owned by Reliance Insurance Company and
issued by Advantage Capital Florida Partners, L.L.P.
Advantage Capital is a venture capital firm based in New
Orleans, Louisiana, that makes venture capital investments in a
variety of states, which provide insurance companies with
premium tax credits for "qualified" venture capital investments.
Ann B. Laupheimer, Esq., at Blank, Rome, Comisky & McCauley,
tells the Commonwealth Court that RIC purchased the privately
placed Senior Notes issued by Advantage Capital Florida. As
part of a program sponsored by the State of Florida to create
investment incentives there, the Notes provided the holder with
substantial tax credits for qualified insurance premium income
earned in Florida. Therefore, while the original par value of
the Notes is $3,931,131.56, due to the tax benefits, RIC paid
2.08242 times par value for the Notes, which resulted in a total
purchase price of $8,186,283.69.
The Notes were secured by an indenture that created a security
interest in the assets of Advantage Capital Florida. The
collateral included non-callable, zero coupon Treasury
securities that matured on or near each cash principal payment
date.
Ms. Laupheimer relates that the Notes did not provide RIC with
interest income. Rather, in addition to principal payments, RIC
received additional value in the form of premium tax credits for
taxable premium income earned in Florida. The tax credits
totaled annually $818,628. The credits commenced in the tax
year 2000 and run through 2009.
For the tax year 2000, RIC did not have sufficient qualified
premium income in Florida to use the entire tax credits. Rather
RIC used only $237,342 in tax credits, resulting in unused
premium credits of $518,286 for the year. However, these tax
credits may be carried forward until December 31, 2017.
The tax credits and carry-forwards were freely transferable
under Florida law to the purchaser of the Notes.
Principal payments on the Notes, payable in 5 equal installments
that commenced on May 15, 2000, totaled $768,226.32 annually.
RIC received 2 principal payments, which left a remaining
principal balance of $2,358,678.92.
Ms. Laupheimer recalls that upon entry of the Liquidation Order,
Ms. Koken directed RIC to market the Notes for sale. RIC
retained Lehman Brothers and Credit Suisse First Boston. The
investment firms solicited bids from the pool of insurance
companies who would be able to take advantage of the tax credit
features of the Notes.
The investment banks notified RIC of two anonymous bids. The
first bidder, procured by Lehman, did not wish to purchase all
the Notes and submitted an offer of 2.75 times par value for a
1/3 portion of the Notes' remaining principal balance. The
Liquidator considered this bid but later rejected it in favor of
the second bid, which was received shortly thereafter.
The second bid, procured by CSFB, sought to purchase all the
Notes and offered 2.93 times remaining principal balance for a
total cash purchase price of $6,910,929.23. The second bid was
tied to the price of Treasury securities. Thus, as the yields
of these benchmark securities rose or fell, the purchase price
RIC received similarly fluctuated.
Next, the Liquidator had to determine whether the offer price
reflected the Notes' fair value. Ms. Koken considered the
limited marketability of the Notes, the reputations of the
investment banks that solicited offers and the fact that the
Notes were of no use to RIC since it was in runoff mode and
would not generate any future premiums in Florida to obtain the
tax benefits. Indeed, the offer permitted RIC to receive over
$4,500,000 in cash in excess of the remaining principal balance
of the Notes.
Ms. Koken concluded that the transaction was fair and in the
best interest of RIC's policyholders. It was approved by the
Commonwealth Court and consummated by the parties thereafter.
(Reliance Bankruptcy News, Issue No. 29; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
RURAL/METRO CORP: June 30 Equity Deficit Widens to $165 Million
---------------------------------------------------------------
Rural/Metro Corporation (Nasdaq:RURLC), a leading national
provider of ambulance and fire protection services, announced
unaudited results for the fourth quarter ended June 30, 2002 and
fiscal year 2002.
Results for the fiscal year ended June 30, 2002 reflect revenue
of $497.0 million and earnings before interest, taxes,
depreciation and amortization (EBITDA) of $43.0 million. Net
income for fiscal 2002 was $3.9 million before the effect of a
cumulative change in accounting principle.
The company recorded a non-cash charge to earnings of $49.5
million related to the adoption of Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangibles."
This amount was recorded as a cumulative effect of a change in
accounting principle as of July 1, 2001. The company also
recorded a charge of $2.0 million during the quarter to increase
its reserve for workers' compensation claims.
In total, the company reported a fiscal 2002 net loss of $45.6
million, including the effect of a cumulative change in
accounting principle. This compares to a net loss of $226.7
million for fiscal 2001.
The company reported fourth-quarter revenue of $123.0 million, a
net loss of $454,000, and EBITDA of $9.0 million, excluding the
charge for workers' compensation expenses. Including the charge,
the company reported a fourth-quarter net loss of $2.5 million,
compared to a net loss of $177.4 million for the same period of
the prior year.
At June 30, 2002, Rural/Metro's June 30, 2002 balance sheet
shows a total shareholders' equity deficit of about $165
million.
Jack Brucker, President and Chief Executive Officer, said, "The
company maintained positive operating trends throughout fiscal
2002, demonstrated by consistent improvements in billing and
collections, cash flow, and same-service-area growth. Our
objective is to sustain these achievements while continuing to
provide the finest care and protection to our patients and
customers." Same-service-area medical transportation and related
revenue increased 7.0 percent overall for the year, compared to
the prior year.
Brucker continued, "We also entered into more than a dozen new
and renewal agreements during the fiscal year to provide
emergency and non-emergency ambulance and fire protection
services, representing more than $46 million in revenue
annually. In the first few weeks of fiscal 2003, we have been
awarded significant renewal contracts totaling approximately $52
million in annual revenue."
Billing and collections initiatives continued to result in
historically low average days' sales outstanding. Average DSO
was 74 days for the fourth quarter and fiscal year ended June
30, 2002, compared to 89 days for the same period of fiscal
2001. Brucker added, "We are very pleased that the system
enhancements we have introduced are continuing to expedite and
maximize reimbursement for ambulance services."
Effective billing and collections efforts also contributed to
improved cash-flow performance. Cash collected in excess of
domestic EMS revenue for fiscal 2002 was $5.8 million. Cash
collections from ongoing operations improved 7.9 percent during
the fourth quarter, compared to the same quarter of the prior
year.
"Looking ahead to fiscal 2003, we are off to a solid start,"
Brucker said. "New initiatives are under way to further enhance
and refine our billing and collections systems, to target
additional market share in order to sustain profitable growth,
and to create greater operational efficiencies. We are excited
about the possibilities and look forward to achieving our
objectives in the coming year."
The company is releasing unaudited fiscal year 2002 results at
this time pending the finalization of an amended credit facility
with its lenders. The company released a separate announcement
today that outlines the terms of the proposed agreement. The
company will file its annual Form 10-K and audited financial
statements on or before October 14, 2002, with results expected
to remain consistent with today's announcement.
Brucker continued, "We are very pleased to bring our bank
discussions to a close and announce the proposed terms of our
amended credit facility. We have worked diligently to create a
solution that we believe will support the company's long-term
operational and financial objectives."
The agreement provides for the company's banks to receive an
equity stake in the company through a grant of preferred stock.
Rural/Metro stockholders will be asked at the company's next
annual meeting to approve additional common shares in connection
with the agreement.
"From a practical standpoint, as equity holders, our lenders
will share a greater interest in the company's long-term
success. From a financial standpoint, the agreement allows for
increased flexibility and future growth," he said. "We believe
this is the best solution for the company at this time and ask
that stockholders give the proposal to authorize additional
shares their full consideration."
The company also announced that it has divested its Latin
American operations in Argentina and Bolivia to management of
those operations for consideration of assumed liabilities. The
transaction includes the company's ambulance and urgent home
medical care business in Argentina, known as Emergencias Cardio
Coronarias, and its aircraft rescue and fire fighting operations
in Bolivia. The company will record the effect of the
transaction in the first quarter of fiscal 2003.
Brucker continued, "The economic decline in Latin America,
coupled with our strategic objective to focus on domestic
growth, were primary factors in our decision to divest the
operations at this time. We believe the interests of all
stakeholders are best served through this transaction."
Rural/Metro Corporation provides emergency and non-emergency
ambulance transportation, fire protection, and other safety
services to municipal, residential, commercial and industrial
customers in approximately 400 communities throughout the United
States.
RURAL/METRO: Banks Agree to Amend and Extend Credit Facility
------------------------------------------------------------
Rural/Metro Corporation (Nasdaq:RURLC), a leading national
provider of ambulance and fire protection services, has reached
an agreement in principle with its banks to amend and extend its
credit facility.
Jack Brucker, President and Chief Executive Officer, said, "We
are pleased to present a solution that allows us to further
strengthen the business, while at the same time preserve
significant value for our existing stockholders. This is an
important step toward ensuring the long-term success of the
company by helping to maintain financial flexibility while
positioning us for future growth opportunities."
The proposed agreement includes the following key points:
maturity date extended to December 31, 2004; no required
principal amortization until maturity; adjustable LIBOR-based
rate, initially anticipated to be 8.8 percent; full covenant
compliance; and, lenders receive 10-percent equity stake in the
company through a grant of preferred shares automatically
convertible, with stockholder approval, to common shares.
The company has been engaged in discussions with its banks since
February 2000, when it entered into non-compliance with three,
ratio-driven covenants of its revolving credit agreement. During
that time, the company focused on strengthening cash flow,
restructuring its base of domestic ambulance operations,
enhancing billing and collections systems to expedite payment
for services, and creating same-service-area growth.
Brucker continued, "We have achieved measurable progress in the
last two years and believe opportunities exist for continued
success. The amended facility contains several new provisions
that we believe make it the best choice for the company and its
stakeholders at this time."
The new interest rate will be an adjustable rate, based on a 30-
day LIBOR rate plus 7 percent, for an initial rate of
approximately 8.8 percent. The company currently pays a combined
rate of approximately 7.0 percent. Under the new agreement,
deferred interest of approximately $7.0 million accrued since
March 31, 2000 and certain other amounts will be added to the
principal balance of the loan. Total balance of the facility
will be approximately $152 million, with a new maturity date of
December 31, 2004.
Brucker continued, "We believe the rate under the amended
agreement is reasonable, especially when we consider today's
lending environment. That the facility will remain unsecured and
requires no mandated principal payments are added points in the
company's favor."
The agreement also provides for the company's banks to be given
an equity stake in the enterprise through a grant of preferred
stock. The preferred shares will be convertible into 10 percent
of the post-conversion common stock on a diluted basis (as
defined), subject to stockholder approval. If the company fails
to convert lenders' preferred shares into common shares by the
time the facility matures, lenders will be paid at least $15
million in recognition of the potential appreciation of the
company's common stock during that time period. Similarly,
absent conversion to common, the preferred stockholders will be
eligible to receive a preference over common stockholders
ranging from $10 million to $15 million in the event of certain
other corporate transactions. Rural/Metro's preferred shares
cannot be traded on the open market, although lenders will have
registration rights.
Brucker continued, "We are hopeful that stockholders will
recognize the benefits provided under this agreement. As equity
holders in Rural/Metro, we believe the banks take on a greater
interest in the Company's success and long-term equity value
because they, too, will benefit from future achievements."
Stockholder approval to convert the lenders' preferred shares to
fully diluted common stock will be sought at the company's next
annual meeting. "We are confident our stockholders will
recognize the long-term benefits of this agreement and the
financial flexibility it provides to the company," Brucker
explained.
Brucker continued, "The Company will be in full covenant
compliance under its amended credit facility, and can continue
to build the financial strength necessary to refinance or
renegotiate the line at its new maturity date. All in all, we
believe the potential upsides to be significant."
Rural/Metro Corporation provides mobile health services,
including emergency and non-emergency ambulance transportation,
fire protection and other safety-related services to municipal,
residential, commercial and industrial customers in
approximately 400 communities in the United States.
SEPP'S GOURMET: Janes Family Foods Discloses 9.24% Equity Stake
---------------------------------------------------------------
Janes Family Foods Ltd. reports it has finalized the terms of a
private transaction resulting in Janes Foods acquiring 756,050
common shares of Sepp's Gourmet Foods Ltd.
As previously disclosed in a press release on April 1, 2002,
Janes Foods is a joint actor in the acquisition of common shares
of Sepp's with 514911 Alberta Inc., Suncal Holdings Limited,
Karen Janes, Lembit Janes and Peter Pastewka (collectively,
"Joint Actors") who, with the completion of the transaction, own
in the aggregate 3,813,690 common shares of Sepp's, representing
28.91% of the issued and outstanding common shares of Sepp's.
The individual share ownership in the capital of Sepp's of the
Joint Actors is: Janes Foods - 1,218,994 common shares (9.24%),
514911 Alberta Inc. - 965,400 common shares (7.32%), Suncal
Holdings Limited - 462,200 common shares (3.50%), Karen Janes -
77,000 common shares (0.58%), Lembit Janes - 968,096 common
shares (7.34%), Peter Pastewka - 75,000 common shares (0.57%),
and Karen Janes and Lembit Janes - 47,000 common shares (0.36%).
Janes Foods, either alone or together with any Joint Actors, may
make further purchases of common shares of Sepp's and may
dispose of common shares of Sepp's subject to market conditions
and compliance with applicable regulatory requirements.
* * *
As previously reported, 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 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.
SOLUTIA INC: Will Hold Q3 Earnings Conference Call on October 25
----------------------------------------------------------------
Solutia Inc., (NYSE: SOI) will hold its third quarter earnings
conference call on Friday, Oct. 25, 2002 at 9 a.m. central time
(10 a.m. eastern). The earnings report will be released at
approximately 6 p.m. eastern time on Thursday, Oct. 24, 2002.
A live, listen-only webcast of the conference call will be
available at its Web site at http://www.solutia.comunder the
presentation and speeches tab in the investor relations section.
A replay of the conference call as well as the question and
answer session will be available at the site for approximately
five days following the call.
Solutia -- http://www.Solutia.com-- uses world-class skills in
applied chemistry to create value-added solutions for customers,
whose products improve the lives of consumers every day.
Solutia is a world leader in performance films for laminated
safety glass and after-market applications; resins and additives
for high-value coatings; process development and scale-up
services for pharmaceutical fine chemicals; specialties such as
water treatment chemicals, heat transfer fluids and aviation
hydraulic fluid and an integrated family of nylon products
including high-performance polymers and fibers.
* * *
As reported in Troubled Company Reporter's August 14, 2002
edition, Fitch Ratings upgraded Solutia Inc.'s senior secured
bank facility rating to 'BB-' from 'B' and the rating on the
senior secured notes to 'B' from 'CCC+'. The senior secured note
rating applies to the new note issue completed in July 2002, as
well as the notes and debentures existing prior to recent
refinancing. The ratings have been removed from Rating Watch
Negative. The Rating Outlook is Negative.
The ratings upgrade is based in part upon the recent completion
of delayed refinancing plans, Solutia's ability to handle
increased interest payments, the company's leverage, and the
potential for earnings recovery, as well as the company's
overall business profile.
The Negative Rating Outlook status reflects continuing concerns
surrounding the strength and pace of an earnings recovery
relative to Solutia's financial covenants, and the ultimate
liability related to the polychlorinated biphenyls contamination
litigation in Anniston, Alabama.
STERLING CHEMICALS: Disclosure Statement Hearing Set for Oct. 7
---------------------------------------------------------------
Sterling Chemicals Holdings, Inc., together with its debtor-
affiliates, have filed a Proposed Disclosure Statement together
with its accompanying Joint Plan of Reorganization.
The U.S. Bankruptcy Court for the Southern District of Texas
(Houston Division) under the Honorable William R. Greendyke
schedules a hearing to consider the approval of the Debtors'
Disclosure Statement for October 7, 2002 at 10:00 a.m. Central
Time.
All objections to the Disclosure Statement must be received by
the Bankruptcy Court no later than 4:00 p.m. today.
Sterling Chemicals Holdings, a manufacturer of petrochemicals,
acrylic fibers, and pulp chemicals, filed for Chapter 11
protection on July 16, 2001 in the Southern District of Texas
Bankruptcy Court. D. J. Baker, Esq., Rosalie Walker Gray, Esq.
at Skadden, Arps, Slate, Meagher & Flom and Jeffrey E. Spiers,
Esq., Tad A. Davidson, Esq., at Andrews & Kurth LLP represent
the Debtors in their restructuring effort. As of its June 30,
2002 report to the Securities and Exchange Commission, the
Debtors listed $523,506,000 in assets and $1,318,958,000 in
debts.
TELEPANEL SYSTEMS: July 31 Balance Sheet Upside-Down by C$13MM
--------------------------------------------------------------
Telepanel Systems Inc., (OTCBB:TLSXF)(TSX:TLS) a leader in
electronic shelf label systems for retail stores, announced its
results for the second quarter ended July 31, 2002.
For the three months ended July 31, 2002 revenue was C$786,724,
compared to the same period last year of C$854,020, with the
contribution from sales increasing to C$429,523 compared to
C$283,399 for the same period last year. The increase in the
contribution margin of C$146,124 is mainly the result of reduced
fixed manufacturing costs and increased sales of higher margin
products. Reductions in the selling, general and administration
and other overhead costs were the main reason for the decrease
in the operating loss for the period to C$151,403 from C$657,787
last period. The loss for the period decreased to $954,323 from
C$2,139,273. On a per common share basis, the loss was C$.04 on
a weighted average of 24,489,893 shares outstanding, compared to
a loss of C$.10 on 22,406,543 weighted average outstanding
shares in the second quarter of 2002.
Telepanel Systems Inc.'s July 31, 2002 balance sheets show that
the company has a negative working capital of about C$2 million
and a total shareholders' equity deficit of about $13 million.
Garry Wallace, President & CEO said, "It is satisfying to see
that our plan is working as reflected in our loss from
operations which continues to show a positive direction, being
less than 25% of the operating loss of the corresponding period
last year and approximately 55% of the operating loss for the
three months ended April 30, 2002. We are increasing our sales,
marketing and service capabilities by engaging additional
resellers and business partners to augment our own capabilities.
Our business strategy is to size the company to better fit the
current opportunities and we remain committed to opening the
potential of this huge ESL market. Additionally, this enhances
our potential to generate profits as revenues increase."
"The short term funding from VenGrowth this quarter and the
recently announced convertible debenture demonstrates that
others are convinced that this market will respond in the coming
year, and by closing longer term and less dilutive financing in
the near future, we will be ready to take advantage of market
opportunities."
Telepanel is a leader in developing wireless electronic shelf
labelling systems for retail stores. Telepanel ESLs are placed
on the edge of store shelves to show a product's price and other
information. Prices are changed by a radio communications link
from the store's product database, to provide rapid, accurate
pricing updates.
Telepanel's systems are integrated with the leading 2.4 GHz RF
LANs which allows retailers to take advantage of their
investment in IEEE-standard in-store RF networks and extend
their use to electronic shelf labels.
Telepanel wireless ESLs are installed throughout the United
States, Canada, and Europe, with such premier supermarket chains
as Adam's Super Food Stores, A & P, Stop & Shop, Big Y,
Reasor's, Doll's, Brown's, Stew Leonard's, Grand Union,
Wakefern, Berks, Ellington, Port Richmond, Champion, Leclerc,
Intermarche, SPAR, and Super U, and at Universal Studios,
Hollywood.
TMI TECHNOLOGY: TSX Delists Shares Effective September 25, 2002
---------------------------------------------------------------
The Exchange has delisted TMI Technology Inc., common shares
from the TSX Venture Exchange at the close of business September
25, 2002, for failure to meet the minimum listing requirements.
The delisting, in management's opinion, is not expected to have
a material effect on TMI shareholders.
Specifically TMI has an investment of $179,764 in Canadian
International Water Purification Ltd., a private company. The
initial investment by TMI was intended to assist the private
company in the development of a project and to facilitate a
reverse takeover between the two entities.
The project in the opinion of TMI management was not yet far
enough advanced to meet the likely criteria to justify approvals
required for a reverse takeover. However, CIWPL is meeting with
good success in operation of the plant to manufacture water
filters in Bangladesh and is contemplating expansion. Therefore
the private company is becoming better established which is a
prerequisite to initiate a public offering. Updates on the
project are available on the Web site
http://www.purefilteredwater.com
TRITON CDO: S&P Slashes Rating on Class B Notes to BB+ from AA-
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
class A and B notes issued by Triton CDO IV Ltd., an arbitrage
CBO transaction originated in December of 1999. At the same
time, the ratings are removed from CreditWatch with negative
implications, where they were placed on April 24, 2002.
The lowered ratings on the class A and B notes reflect factors
that have negatively affected the credit enhancement available
to support the notes since the transaction was originated in
December of 1999. These factors include continuing par erosion
of the collateral pool securing the rated notes and a negative
migration in the overall credit quality of the assets within the
collateral pool.
As a result of asset defaults, the overcollateralization ratios
have deteriorated since the December 1999 origination date.
According to the most recent available monthly report (Aug. 30,
2002), the class A/B overcollateralization ratio was at 109.5%,
versus the minimum required ratio of 121.0%. The class C
overcollateralization ratio was at 98.88%, versus its required
minimum ratio of 111.5%.
The credit quality of the collateral pool has also deteriorated
since the December 1999 closing date. Including defaulted
assets, 23.34% of the assets in the portfolio currently come
from obligors rated triple-'C'-plus or below, and 4.75% of the
assets come from obligors with ratings currently on CreditWatch
with negative implications. The weighted average rating of the
nondefaulted assets in the portfolio is currently single-'B'-
plus.
Standard & Poor's has reviewed the results of the current cash
flow runs generated for Triton CDO IV Ltd. to determine the
level of future defaults the rated tranches can withstand under
various stressed default timing and interest rate scenarios,
while still paying all of the rated interest and principal due
on the notes. After the results of these cash flow runs were
compared with the projected default performance of the
performing assets in the collateral pool, it was determined that
the ratings currently assigned to the class A and B notes were
no longer consistent with the amount of credit enhancement
available, resulting in the lowered ratings.
Standard & Poor's will continue to monitor the performance of
the transaction to ensure that the ratings reflect the amount of
credit enhancement available.
Ratings Lowered And Removed From Creditwatch
Triton CDO IV Ltd.
Rating
Class To From Balance (Mil. $)
A A AAA/Watch Neg 147.128
B BB+ AA-/Watch Neg 26.750
UNITEDGLOBALCOM: European Unit Will File for Chapter 11 Reorg.
--------------------------------------------------------------
UnitedGlobalCom, Inc., (Nasdaq: UCOMA) has entered into
definitive agreements with its subsidiary United Pan-Europe
Communications, NV, and an ad hoc committee of UPC bondholders
relating to the recapitalization of EUR5.2 billion of UPC
consolidated debt.
The Recapitalization will substantially deliver UPC's
consolidated balance sheet through the judicially supervised
conversion of EUR 925 million accreted value of debt issued by a
subsidiary of UPC and EUR 4.3 billion accreted value of UPC
Senior Notes and Senior Discount Notes into new common stock of
New UPC, Inc. New UPC is a newly-formed US-registered holding
company which will own all or substantially all of the existing
UPC.
UGC currently holds all of the outstanding Belmarken Notes,
approximately 35% of the UPC Notes, 20% of UPC's Preference
Shares, 53% of UPC's Ordinary Shares and all of the outstanding
UPC Priority Shares. The members of the Bondholder Committee
hold approximately 25% of the UPC Notes.
Management Comments
Gene Schneider, Chairman and CEO of UGC, said: "This agreement
confirms what we set out to achieve earlier this year and will
enable UPC to build its future upon a firm financial structure.
The management team at UPC remains committed to the future of
the business and will continue to focus on business execution.
UPC will emerge from this restructuring with one of the
strongest balance sheets in the European media and telecom
sector at a time when it's operations are achieving record
financial results."
Mike Fries, President and COO of UGC, added: "This
recapitalization plan is a great result for UGC shareholders.
First, UGC will end up with a controlling 66% interest in UPC --
by far our largest and most important operation. The implied
total equity value of UPC based upon the proposed
Recapitalization is EUR 1.9 billion. And second, as a result of
reduced interest costs, EUR 100 million of new equity and
increased operating and financial headroom in its bank deal, UPC
should have sufficient resources to fund its operations through
to positive free cash flow without the need for additional
capital. We look forward to closing this deal early next year
and building on what will be a very strong operating and
financial performance in 2002."
New Money
Upon completion of the Recapitalization, New UPC will offer to
each holder of UPC Notes and Belmarken Notes the right to
purchase a pro rata share of up to EUR 100 million of additional
shares of New UPC common stock at the share price implied by the
Recapitalization plan. The EUR 100 million amount will be
reduced by the net proceeds of any assets sold by UPC and any
non-dilutive capital raised by UPC prior to completion. UGC has
agreed to subscribe for that portion of the EUR 100 million
subscription amount offered to the other holders of the UPC
Notes for which those holders do not subscribe.
Bank Waiver and Amendments
In order to facilitate the Recapitalization, UPC's senior bank
lenders have agreed to extend until March 31, 2003 the waivers
of the defaults arising as a result of the Company's decision
not to make interest payments under the UPC Notes. The proposed
bank waiver includes amendments to the UPC Distribution bank
facility to (1) increase operational headroom for the UPC
Distribution group by increasing and extending the maximum
permitted ratios of senior debt to annualized EBITDA and by
lowering and extending the minimum required ratios of EBITDA to
total cash interest, (2) increase the interest margin on
outstanding loans under the facility by 150 basis points, (3)
include a new commitment fee of 0.25% on the total commitment
amount (4) reduce the total commitment amount under the facility
from EUR 4.0 billion to EUR 3.5 billion, and (4) require UPC to
inject EUR 125 million of cash to UPC Distribution, the
borrower.
Dutch and US Court Procedures
In order to ensure an efficient and effective Recapitalization,
UPC has agreed to file a voluntary case for reorganization under
Chapter 11 and will file a plan of reorganization and disclosure
statement as soon as practicable.
Either simultaneously with or following the filing of the
Chapter 11 case, UPC will voluntarily file a petition for
moratorium and a plan of composition in the Amsterdam
(Netherlands) Court. Completion of the Recapitalization will be
conditional on receiving the appropriate creditor consents.
Timing
The parties are working towards completion of the
Recapitalization by the end of the first quarter of 2003.
Please refer to UGC or UPC's 8-K filing for a more detailed
description of the Recapitalization.
UGC is the largest international broadband communications
provider of video, voice, and data services with operations in
21 countries. At June 30, 2002, UGC's networks reached, in
aggregate, 19.1 million homes and over 13 million customers
including 11.2 million video subscribers, 916,400 telephony
subscribers, 901,800 high speed Internet access subscribers. In
addition, its programming business had approximately 45.9
million subscribers worldwide.
UGC's significant operating subsidiaries include UPC, the
largest pan-European broadband communications company; VTR
GlobalCom, the largest broadband communications provider in
Chile, and Austar United Communications, a leading satellite,
cable television and telecommunications provider in Australia
and New Zealand.
US AIRWAYS GROUP: RSA Seeking Stalking Horse Bidder Status
----------------------------------------------------------
The Retirement System of Alabama asks the Court to authorize US
Airways Group to select RSA as the alternative "stalking horse"
bidder so that the Debtors may enter into an alternative
memorandum of understanding and investment agreement with RSA.
Lorraine S. McGowen, Esq., at Orrick, Herrington & Sutcliffe,
informs the Court RSA is prepared to make a 20% higher
investment in the Debtors for zero fees yielding approximately
$50,000,000 more for the Debtors' estates and their creditors.
Clearly, RSA's offer is more favorable to the Debtors and other
parties-in-interest than the terms contained in the Bidding
Procedures Motion.
Ms. McGowen illustrates the difference between RSA and TPG's
offers:
Investor Fees Proposed Investment Stake
-------- ---- ------------------- -----
TPG $10,000,000 $200,000,000 37.5%
RSA $0 $240,000,000 37.5%
Ms. McGowen admits that RSA's motion was not filed in time to
allow the normal 15 days notice prior to the September 26th
hearing. Ms. McGowen explains that it was impossible, despite
diligent efforts, for RSA to file its Motion prior to September
19th. The reason: RSA didn't get the information it needed from
USAir to make its offer.
According to the RSA, it would be in the interest of the Debtors
and all parties-in-interest and of judicial economy to expedited
the hearing on this motion so that its request will be
considered at the September 26th hearing -- when parties from
all over the country will be assembled on this date to consider
the approval of TPG as investor and plan sponsor. "There would
be a substantial savings in legal fees and travel expenses if
RSA's Motion were considered at this regularly scheduled omnibus
hearing," Ms. McGowen says. Moreover, there will be a fuller
and fairer hearing on the issues raised, if they are considered
simultaneously rather than piecemeal.
Ms. McGowen assures Judge Mitchell that no party-in-interest
will be prejudiced by allowing the RSA Motion to be heard on
September 26th. Creditors can only benefit to the extent that
RSA has proposed terms that are more favorable than the terms
proposed by TPG. In short, there is no "downside" for
creditors. Conversely, RSA and other creditors will be
prejudiced if the RSA Motion were denied consideration until
after September 26th. In addition to the added cost of and
delay inherent in requiring a separate hearing, consideration of
the TPG Motions separately would give TPG an unfair advantage,
because there may be a tendency to favor approval of TPG as the
stalking horse bidder simply because there is no present
alternative at the September 26th hearing. (US Airways
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
US Airways Inc.'s 10.375% bonds due 2013 (U13USR2), DebtTraders
reports, are trading at 10 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=U13USR2for
real-time bond pricing.
USG CORP: Dean Trafelet Wants to Retain CIBC as Fin'l Advisor
-------------------------------------------------------------
Dean M. Trafelet, the Legal Representative for Future Asbestos
Claimants, in the chapter 11 cases involving USG Corporation and
its debtor-affiliates, seeks the Court's authority to retain
CIBC World Markets Corporation as financial advisor and
investment banker pursuant to Sections 327, 524(g) and 1103 of
the Bankruptcy Code, nunc pro tunc to July 29, 2002. The
Futures Representative wants CIBC to provide financial advisory,
investment banking and other related services in connection with
the Debtors' Chapter 11 cases.
Specifically, CIBC will provide review and consultation on:
(a) valuation of the Debtors as a going-concern, in whole or
in part;
(b) valuation analyses of the Debtors' asbestos exposure;
(c) the Debtors' financing options;
(d) the Debtors' potential divestiture, acquisition and
merger transactions;
(e) the reorganized Debtors' capital structures issues,
including debt capacity;
(f) the Debtors' financial issues and potential plans of
reorganization options and coordinating related
negotiations;
(g) the Debtors' operating and business plans, including an
analysis of long-term capital needs and changing
competitive environment;
(h) general advice regarding funding adequacy of any trust
contemplated by Section 514(g) of the Bankruptcy Code;
(i) court testimony on behalf of the Futures Rep, if
necessary; and
(j) any other necessary services as may be requested from
time to time with respect to arising financial, business
and economic issues that may arise.
In return for its services, CIBC will bill the Debtors' estates:
* a monthly fee of $135,000 commencing July 29, 2002 for a
period of 24 months; and
* a monthly fee of $125,000 for the case's duration.
The Debtors will be obligated to reimburse CIBC for the
customary out-of-pocket expenses.
The Futures Representative chose CIBC because it is the leading
independent investment banking firm that provides financial and
strategic advisory services to a select group of institutional
clients. CIBC's restructuring group has represented a diverse
group of debtors, bondholders, creditors' committees, single
classes of creditors and secured creditors, and has an excellent
reputation.
CIBC attests it does not have or represent any interest
materially adverse to the Debtors' interests, or those of their
estates, and is "disinterested person" as defined by Section
101(14) of the Bankruptcy Code.
Creditors' Committee Objects
While the Official Committee of Unsecured Creditors Committee
acknowledges that the Futures Representative "may need the
services of a financial advisor and investment banker", it does
not believe those services are required now, and "certainly not
upon a monthly retainer of $135,000 per month (reduced to
$125,000 after 24 months)."
John W. Weiss, Esq., at Duane Morris, asserts that the Futures
Representative's role is to protect the future claimants' rights
in connection with any plan of reorganization and the
establishment of a trust for the future claimants' benefit
pursuant to Section 524(g) of the Bankruptcy Code. No active
plan or settlement discussions exist between the constituents
and none are scheduled. Mr. Weiss explains that the Debtors,
the Creditors Committee and the asbestos committees are awaiting
an October 17 hearing before Judge Wolin regarding management
and substantive estimation issues. It is very likely that Judge
Wolin will establish a litigation schedule with respect to
impairment, causation and other legal and medical issues. If
Judge Wolin adopts the Debtors' and Creditors Committee's
estimation proposal, Phase I of the estimation would involve
legal and medical issues relating to the asbestos claims
validity and not involve claims estimation at all.
Mr. Weiss further points out that ARPC has already been retained
as claim evaluation consultant, who can assist the Futures
Representative with any asbestos claims issues arising out of
upcoming litigation. The P.I. Committee has already retained a
financial advisor, whose advisory services and valuation work
could be shared with the Futures Representative, if needed.
The Creditors' Committee believes that CIBC's retention is
premature, and should be deferred until necessary.
Alternatively, the Creditors Committee proposes that CIBC should
be retained on a hourly rate basis or the monthly rate be
adjusted at intervals, depending on proceeding status and
advisory need.
To do otherwise "is a waste of estate resources especially given
all the other professionals already retained" by the Futures
Representative and the P.I. Committee, Mr. Weiss contends. (USG
Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
VALENTIS INC: Independent Auditors Raise Going Concern Doubt
------------------------------------------------------------
Valentis, Inc., (Nasdaq: VLTS) reported a net loss applicable to
common stockholders for the year ended June 30, 2002 of $37.2
million on revenue of $3.8 million, compared to a net loss
applicable to common stockholders of $40.6 million on revenue of
$4.6 million for fiscal 2001.
For the quarter ended June 30, 2002, Valentis recorded a net
loss applicable to common stockholders of $7.6 million on
revenue of $76,000, compared to a net loss of $11.5 million on
revenue of $1.5 million, for the quarter ended June 30, 2001.
On June 30, 2002, Valentis had $19.1 million in cash, cash
equivalents and investments, compared to $25.2 million on March
31, 2002 and $37.3 million on June 30, 2001. The decreases of
$6.1 million and $18.2 million in cash and investments balances
for the quarter and the year, respectively, reflect the funding
of the Company's operations, including charges resulting from a
corporate restructuring announced in January 2002.
Financial results for the fiscal year ended June 30, 2002
include $4.9 million of non-cash related amortization expense
for goodwill and other intangibles the Company recorded from its
mergers with GeneMedicine and PolyMASC in calendar 1999. In the
corresponding period of 2001, the Company's financial results
included a $5.7 million of non-cash charge related to
amortization of goodwill and other intangibles.
Financial results for the quarters ended June 30, 2002 and June
30, 2001 reflect amortization expenses related to goodwill and
other intangibles of $614,000 million and $1.4 million,
respectively.
Research and development expenses for the fiscal year ended June
30, 2002 decreased to $23.7 million from $30.2 million in fiscal
2001. For the fourth quarter ended June 30, 2002, research and
development expenses decreased to $5.0 million from $8.6 million
in the corresponding period in fiscal 2001. The decreases were
attributable primarily to staff reductions and savings resulting
from the reduction of preclinical product development efforts
and suspension of clinical programs in oncology.
General and administrative expenses for the fiscal year ended
June 30, 2002 decreased to $7.9 million from $8.2 million in
fiscal 2001. For the fourth quarter ended June 30, 2002,
general and administrative expenses decreased to $1.8 million
from $2.3 million in the corresponding period in fiscal 2001.
The decreases were attributable primarily to savings resulting
from the reduction of general and administrative staff
associated with our reductions in preclinical product
development and suspended clinical programs in oncology.
In conjunction with the Company's announcement that it would
suspend clinical development of its cancer immunotherapy
products in January 2002, Valentis implemented a restructuring
plan to better align the Company's cost structure with current
market conditions. This plan significantly reduced its
preclinical product development efforts and suspended its
clinical programs in oncology. A total of 47 positions,
primarily in preclinical and manufacturing research and
development, and associated general and administrative staff,
were eliminated as a result of the restructuring. For the
quarter and year ended June 30, 2002, we recorded restructuring
and related charges of approximately $87,000 and $1.8 million,
respectively.
In June 2002, Valentis made a dividend payment to holders of the
Company's Series A convertible redeemable preferred stock. The
dividend obligation was met through the issuance of 217,203
shares of common stock.
Going Concern of Valentis
Valentis has received a report from our independent auditors
covering the consolidated financial statements for the fiscal
year ended June 30, 2002 that includes an explanatory paragraph
which states that the financial statements have been prepared
assuming Valentis will continue as a going concern. The audit
report issued by our independent auditors may adversely impact
our dealings with third parties, such as customers, suppliers
and creditors, because of concerns about our financial
condition. The explanatory paragraph states the following
conditions which raise substantial doubt about our ability to
continue as a going concern: (i) we have incurred recurring
operating losses since inception, including a net loss of $33.1
million for the year ended June 30, 2002, and our accumulated
deficit was $192.2 million at June 30, 2002; (ii) our cash and
investment balance at June 30, 2002 was $19.1 million, and we
had a net capital deficiency of $7.7 million at June 30, 2002;
and (iii) we have been notified that we have not complied with
certain listing requirements of the Nasdaq National Market, and
holders of our Series A preferred stock may require us to redeem
their shares for cash if our common stock ceases to be listed on
the Nasdaq National Market. Such redemption could aggregate up
to $30.8 million. Assuming that the holders of our Series A
preferred stocks exercise their redemption rights, we will not
have sufficient financial resources to satisfy these redemption
obligations.
"We will need to raise additional funds to continue our
operations. We will have insufficient working capital to fund
our near term cash needs unless we are able to raise additional
capital in the near future. We may not be able to obtain
additional financing on acceptable terms, or at all. Any failure
to obtain an adequate and timely amount of additional capital on
commercially reasonable terms will have a material adverse
effect on our business, financial condition and results of
operations, including our viability as an enterprise. As a
result of these concerns we are pursuing strategic alternatives,
which may include the sale or merger of our business, sale of
certain assets, seeking protection under the bankruptcy laws or
other actions."
Delisting of Valentis' Common Stock
from the Nasdaq National Market
Our common stock is traded on the Nasdaq National Market. On
August 22, 2002, we received a Nasdaq Staff Determination letter
indicating that our common stock would be delisted from The
Nasdaq National Market because our common stock market value of
listed securities had been below the minimum $50 million
required for continued inclusion, and such noncompliance had
extended beyond the 30-day grace period provided by Nasdaq
Marketplace Rules. We also fail to comply with other
requirements for continued listing, including $10 million
minimum stockholders' equity and a $1 minimum price per share.
On August 27, 2002, pursuant to Nasdaq Marketplace Rule 4820, we
appealed the Staff Determination and requested an oral hearing
in person before a Listing Qualifications Panel to review the
Staff Determination. On August 30, 2002, we received a letter
from Nasdaq granting our request and setting a hearing date of
October 4, 2002. As a consequence, the delisting action
referenced in the August 22, 2002 letter has been stayed pending
a decision by the Listing Qualifications Panel. On September 9,
2002, we filed a submission with the Listing Qualifications
Panel requesting an extension of time to achieve compliance with
the continued listing requirements. Our submission outlined
plans that would enable the Company to achieve such compliance,
including the consummation of collaboration agreements for the
joint development of our products, restructuring of our
outstanding Series A preferred stock, a reverse stock split,
reduction of our monthly burn rate, sale of certain non-
strategic assets and securing additional financing through the
sale of equity securities. However, there can be no assurance
that we will successfully execute any of those plans or that
Nasdaq will grant us additional time after the October 4, 2002
hearing date to achieve compliance.
If delisting occurs, the trading of the Company's common stock
is likely to be conducted on the OTC Bulletin Board. The
delisting of our common stock from the Nasdaq National Market
will result in decreased liquidity of our outstanding shares of
common stock (and a resulting inability of our stockholders to
sell our common stock or obtain accurate quotations as to their
market value), and, consequently, would reduce the price at
which our shares trade. The delisting of our common stock could
also deter broker- dealers from making a market in or otherwise
generating interest in our common stock and might deter certain
persons from investing in our common stock. Furthermore, our
ability to raise additional capital would be severely impaired.
As a result of these factors, the value of the common stock
would decline significantly, and our stockholders could lose
some or all of their investment.
Additionally, under the terms of our Series A preferred stock,
upon the delisting of our common stock from the Nasdaq National
Market, the holders of the Series A preferred stock would have
the right to require us to redeem some or all of their shares at
a price of $1,000 per share, for an aggregate of up to $30.8
million plus accrued dividends, if any. The Series A preferred
stock is otherwise mandatorily redeemable beginning on June 4,
2004. As of September 30, 2002, there were 30,800 shares of
Series A preferred stock outstanding. The full redemption of
these shares aggregates to $30.8 million. We are pursuing a
number of options with respect to the redemption rights of the
Series A holders, including among other actions obtaining
waivers of such rights from the holders of the Series A
preferred stock and amending the terms of the Series A preferred
stock to eliminate all terms providing for cash redemption.
However, there can be no assurance that any of these efforts
will be successful. If they are not successful and the holders
of our Series A preferred stock exercise their redemption
rights, we will not have sufficient capital resources to satisfy
our redemption obligation. We are pursuing strategic
alternatives, which include the sale or merger of our business
or parts of our business, bankruptcy filing or other actions.
Termination and Withdrawal of Tender Offer
"We announced that we will terminate and withdraw our previously
announced tender offer to purchase 16,940 shares, or 55%, of our
outstanding shares of Series A preferred stock and 55% of the
related outstanding Common Stock Purchase Warrants, Class A and
Common Stock Purchase Warrants, Class B."
Business Update and Recent Developments
"Valentis is converting biologic discoveries into innovative
products. We have three product platforms for the development of
novel therapeutics: the gene medicine, GeneSwitch(R) and DNA
vaccine platforms.
"Earlier this year, the results of our Phase II IL-2 clinical
trial for the treatment of head and neck cancer did not confirm
interim findings. After these results, we undertook a major
corporate restructuring, to reduce our expenditures. The results
were a significant reduction in our preclinical development
efforts and the suspension of our clinical programs in oncology.
Our Del-1 clinical trial is open and ongoing. We are dosing
patients who suffer with blockages of vessels in their legs with
our Del-1 gene medicine to create new blood vessels. New patient
enrollment continues. In the future, we look forward to
advancing our Del-1 product into the clinic for a second
indication, ischemic heart disease. For the present, we are
addressing our nearer term concerns including our continued
listing on the Nasdaq National Market and restructuring our
Series A preferred stock. Regarding our outstanding patent
infringement lawsuit against ALZA Corporation (which was
subsequently acquired by Johnson & Johnson Inc.), a trial date
is set for December 2002. Additional information is available
below or by reference to our Annual Report on Form 10-K as filed
with the Securities and Exchange Commission."
Licensing of our GeneSwitch(TM) technology
"We have granted a total of seven non-exclusive licenses for our
GeneSwitch(TM) gene regulation technology including new licenses
to Genzyme Corporation, Lexicon Genetics Inc., MediGene AG and
Pfizer for use in functional genomics research. The non-
exclusive licenses are for research purposes and generally
involve up-front payments and annual maintenance fees. Valentis
maintains all rights to clinical gene therapy applications of
the GeneSwitch(TM) gene regulation technology."
"Erythropoeitin gene medicine controlled by our GeneSwitchT gene
regulation system.
"We currently have in development a gene medicine product that
incorporates the erythropoietin (EPO) gene, the GeneSwitchT
regulation system and a polymer delivery system that is designed
to allow for the controlled production of EPO over an extended
period of time but only when activated by an oral drug that
turns on the GeneSwitchT. Valentis' proprietary GeneSwitchT
technology controls the expression of a therapeutic gene in the
body by turning expression on as desired, in a dose-dependent
fashion, controlled by an orally administered drug."
Synthetic Vaccine Delivery Systems
"We have developed synthetic vaccine delivery systems based on
several classes of polymers. Our proprietary PINC(TM) polymer-
based delivery technologies provide consistent levels of gene
expression and enhance transfection efficiency of plasmid DNA.
In addition, we have poloxamer-based and lipid-based proprietary
formulations that also provide for higher and more consistent
levels of antigen production. Our formulation technologies have
been used in various clinical studies, and formulations can be
optimized for specific DNA vaccine delivery needs. In December
2000, we initiated a collaboration with Epimmune, Inc., to use
Valentis' DNA vaccine delivery technology to create vaccines to
treat HIV and Hepatitis C."
Intellectual Property
"On April 6, 2001, our wholly-owned subsidiary, PolyMASC
Pharmaceuticals, filed a lawsuit against ALZA Corporation
(subsequently acquired by Johnson & Johnson Inc.) for patent
infringement based on ALZA's manufacture and sale of its
liposomal products, Doxil(R) and Caelyx(R). The lawsuit was
filed in the U.S. District Court in Delaware and alleges
infringement of U.S. Patent Number 6,132,763, titled
"Liposomes." The patent, issued October 17, 2000, is directed
towards PEGylated liposomes (liposomes having PEG chains
attached). Doxil(R) and Caelyx(R) are PEGylated liposomes
encapsulating the drug doxorubicin. PolyMASC is seeking
monetary damages and enhanced damages should the court find that
ALZA's infringement was willful. The trial date is set for
December 2002.
"On April 24, 2002, we announced that PolyMASC Pharmaceuticals
plc, was granted European Patent Number EP572,049B1, covering
PEGylated liposomes (liposomes having polyethylene glycol (PEG)
chains attached). In addition, we announced that PolyMASC has
initiated infringement proceedings in Dusseldorf, Germany,
against SP Labo N.V., SP Europe and Essex Pharma GmbH, all
members of the Schering-Plough Group. The suit alleges
infringement of this patent and patent EP445,131B1, also owned
by PolyMASC, based on the sales of Caelyx(R), a PEGylated-
liposome product encapsulating the drug doxorubicin. Patent
EP572,049B1, titled "Liposomes", is the European counterpart to
U.S. Patent Number 6,132,763. PolyMASC is seeking monetary
damages."
PEGylation Products
"Valentis' OptiPEG(R) family of technologies is based on polymer
modification using polyethylene glycol (PEG), a compound with a
long and safe clinical history. We have developed methods to
directly couple our proprietary PEG (OptiPEG(TM)) to proteins,
peptides, antibodies and antibody fragments, viruses and
liposomes to retain high levels of biological activity of the
material and potentially protect the biopharmaceutical from
inactivation by the immune system. OptiPEG(TM) technologies
provide the potential to deliver products with improved safety,
efficacy and dosing regimens. OptiPEG(TM) is being developed
through licensing to corporate partners.
Corporate Restructuring
"In conjunction with our announcement that we would suspend
clinical development of our cancer immunotherapy products in
January 2002, we implemented a restructuring plan to better
align our cost structure with current market conditions. This
plan significantly reduced our preclinical product development
efforts and suspended our clinical programs in oncology in an
effort to lower future expenditures and conserve cash. A total
of 47 positions, primarily in preclinical and manufacturing
research and development, and associated general and
administrative staff, were eliminated as a result of the
restructuring. For the year ended June 30, 2002, we recorded
restructuring and related charges of approximately $1.8 million.
"For additional information regarding our business and financial
results for the period ended June 30, 2002, including forward-
looking statements, risks and uncertainties, please refer to our
Annual Report on Form 10-K as filed with the Securities and
Exchange Commission."
Additional information about Valentis can be found at
http://www.valentis.com
VALENTIS: Aborts Tender Offer to Purchase Preferreds & Warrants
---------------------------------------------------------------
Valentis, Inc., (Nasdaq: VLTS) will terminate and withdraw its
previously announced tender offer to purchase 16,940 shares, or
55%, of its outstanding shares of Series A Convertible
Redeemable Preferred Stock and 55% of the related outstanding
Common Stock Purchase Warrants, Class A and Common Stock
Purchase Warrants.
As of September 30, 2002, 4,300 shares of Series A Preferred
Stock, 111,870 Class A Warrants and 41,951 Class B Warrants have
been validly tendered and not withdrawn by the tendering
stockholders.
The Company is terminating and withdrawing the tender offer and
is pursuing other options with respect to restructuring the
Series A Preferred Stock.
Valentis is converting biologic discoveries into innovative
products. Valentis has three product platforms for the
development of novel therapeutics: the gene medicine,
GeneSwitch(R) and DNA vaccine platforms. The gene medicine
platform includes a comprehensive array of proprietary nucleic
acid delivery systems, including the broad cationic lipid
portfolio, from which appropriate formulations and modalities
may be selected and tailored to fit selected genes, indications,
and target tissues. The Del-1 gene medicine therapeutic is the
lead product for the gene medicine platform of non-viral gene
delivery technologies. Del-1 is an angiogenesis gene that is
being developed for peripheral arterial disease and ischemic
heart disease. The EpoSwitch(TM) therapeutic for anemia is the
lead product for the GeneSwitch(R) platform and is being
developed to allow control of erythropoietin protein production
from an injected gene by an orally administered drug. We have
developed synthetic vaccine delivery systems based on several
classes of polymers. Our proprietary PINC(TM) polymer-based
delivery technologies for intramuscular administration provide
for higher and more consistent levels of antigen production.
Additional information is available at http://www.valentis.com
VENTURE CATALYST: Says Cash Sufficient to Meet Current Needs
------------------------------------------------------------
Venture Catalyst Incorporated (OTCBB: VCAT), reported the
financial and operating results for the fourth quarter and
fiscal year ended June 30, 2002.
Fourth Quarter Results
Revenues for the three months ended June 30, 2002 were zero as
compared to $200,000 during the same period last year. Although
revenues at the Barona Casino exceeded expenses for the period,
the level of revenues were not sufficient under the formula used
to calculate VCAT's consulting fee to offset the effect of the
significant capital, construction, interest and operating
expenses incurred at the Barona Casino. These expenses primarily
relate to the expenses associated with the ongoing development
of the Barona Valley Ranch and the increase of debt by the
Barona Tribe for use in the expansion project.
Revenues for services provided to clients other than the Barona
Tribe for the three months ended June 30, 2002 and 2001 were
zero, as a result of VCAT's decision to restructure its business
and realign its operations to focus solely on the Native
American gaming industry. VCAT's decision, made in the second
quarter of the fiscal year ended June 30, 2001 was in response
to the reduction in demand for its technology and Internet
services.
Cost of services decreased 90% to $114,000 for the three months
ended June 30, 2002 from $1,169,000 in the same period last
year, and general operating and administrative expenses
increased 12% from $892,000 in the same period last year to
$995,000 for the fourth quarter of fiscal 2002.
Amortization of intangible assets and stock-based compensation
for the three months ended June 30, 2002 decreased 99% from
$129,000 in the same period last year to $1,500.
During the three months ended June 30, 2002, as a result of the
change in estimate, VCAT reduced the cost of services --
anticipated contract loss by $4,626,000, based on earned
consulting fees from the 1996 Consulting Agreement in July and
August 2002, estimated consulting fees for September and October
2002 and a reduction of the estimated amount of the foreseeable
expenses to be incurred in connection with providing services
under the 1996 Consulting Agreement through the end of its
current term in March 2004. VCAT will continue to review the
estimated revenues and foreseeable expenses in connection with
the 1996 Consulting Agreement on an ongoing basis. To the extent
actual revenues and expenses differ from present estimates, VCAT
will make further adjustments to the cost of services-
anticipated contract loss, if necessary.
VCAT's net income for the three months ended June 30, 2002 was
$3,313,000. This compares with a net loss of $5,651,000 for the
prior year period.
Results for Fiscal 2002
Consolidated revenues for fiscal 2002 decreased to zero from
$8,840,000 during fiscal 2001. Revenues for consulting services
provided to the Barona Tribe in fiscal 2002 decreased to zero
from $7,069,000 earned during fiscal 2001, of which only
$200,000 was earned in the last six months of fiscal 2001.
Although revenues at the Barona Casino exceeded expenses during
fiscal 2002, the level of revenues were not sufficient under the
formula used to calculate VCAT's consulting fee under the 1996
Consulting Agreement to offset the effect of the significant
capital, construction, interest and operating expenses incurred
at the Barona Casino. These expenses primarily relate to the
ongoing development of the Barona Valley Ranch, the increase of
debt by the Barona Tribe for use in the expansion project and
the Barona Casino's interim expansion.
Revenues for services provided to clients other than the Barona
Tribe in fiscal 2002 decreased to zero from $1,771,000 earned
during fiscal 2001. The decrease was due to VCAT's restructuring
program implemented in fiscal 2001 and VCAT's decision to only
provide services to Native American gaming clients, as a result
of a decrease in demand for its technology and Internet
services.
Cost of revenues for continuing operations decreased 64%, from
$7,036,000 during fiscal 2001 to $2,522,000 for fiscal 2002, and
general operating and administrative expenses decreased 48%,
from $6,781,000 during fiscal 2001 to $3,499,000 for fiscal
2002.
VCAT reported a net loss for the fiscal year of $5,715,000. This
compares with a net loss of $18,510,000 for the prior year.
Financial Condition and Liquidity
As of September 17, 2002, VCAT's unrestricted cash and cash
equivalents balance was approximately $8,031,000. VCAT believes
that its unrestricted cash will be sufficient to meet its known
operating and capital requirements, as they are currently
scheduled to come due for at least the next 12 months. If VCAT
receives revenues for consulting services provided to the Barona
Tribe, or revenues from other sources, depending on the amount
of such revenues, the length of time that its cash would sustain
operations could increase. However, if VCAT's cash needs
increase for any reason, such as a change in its business
strategy, the length of time that its current cash would sustain
operations could decrease significantly.
In fiscal 2001, VCAT received an audit report from its
independent auditors containing an explanatory paragraph that
expresses substantial doubt about VCAT's ability to continue as
a going concern due to VCAT's recurring losses from operations,
curtailed revenue expectations from the Barona Tribe and VCAT's
net capital deficiency. In their audit report with respect to
fiscal 2002, VCAT's independent auditors do not express doubt
about VCAT's ability to continue as a going concern.
Consulting Revenues Update
VCAT also announced that, based upon more recent calculations by
the Barona Casino, consulting fees earned pursuant to the terms
of its consulting agreement with the Barona Tribe were
$1,341,000, for July 2002, $326,000 higher than previously
reported. In addition, in August 2002, because of an increase in
overall gaming activity, including high-end play, and a decrease
in projected expenses at the Barona Casino, net income at the
Barona Casino was again higher than expected. As a result, VCAT
earned and was paid a consulting fee in the amount of $349,000
for August 2002.
Venture Catalyst Incorporated is a service provider of gaming
consulting and infrastructure and technology integration
services in the California Native American gaming market. For
more information, contact Andy Laub (858-385-1000/ir@vcat.com)
for investor relations.
As of March 31, 2002, Venture Catalyst listed in its balance
sheet a total shareholders' equity deficit of about $9 million.
VERTICAL COMPUTER: Need to Raise New Capital to Fund Operations
---------------------------------------------------------------
Vertical Computer Systems Inc., maintains its primary focus on
developing its proprietary Emily technology, Web services,
Underpinning Web Technologies, and other products such as
ResponseFlash and UniversityFlash. Its subsidiary NOW Solutions
continues to develop its services and products in order to grow
its customer base. Additionally, the Company continues to build
its global network of Local Country Partners toward developing
an international network of Bridges that will serve as
distribution platforms throughout the world for its proprietary
and licensed technologies, goods and services.
In June 2002, Apollo Industries, Inc., of which Vertical owns a
20% interest, changed is name to TranStar Services, Inc.
Vertical Computer Systems Inc., has suffered significant
recurring operating losses, used substantial funds in its
operations, has $1,500,000 cash deposit presently restricted due
to the bank default by NOW Solutions and needs to raise
additional funds to accomplish its objectives. Additionally, at
June 30, 2002, the Company has negative working capital of
$7,389,012, and is in default on some of its debt obligations,
most notably the technical default on the $4,127,437 bank loan
to its 60% subsidiary, NOW Solutions (NOW Solutions has always
been current on the payments). These factors raise substantial
doubt about the Company's ability to continue as a going
concern. The report of the Company's Independent Certified
Public Accountants for the December 31, 2001 financial
statements included an explanatory paragraph expressing
substantial doubt about the Company's ability to continue as a
going concern.
The Company believes, that in conjunction with the expectation
of continued profitability from NOW Solutions (NOW had a net
profit of $506,000 for the quarter ended June 30, 2002), that it
can launch a number of products, services and other revenue
generating programs. The Company is focusing its efforts on
launching a number of products in the United States based upon
its proprietary technology. Furthermore, the Company is
exploring certain opportunities with a number of companies to
participate in the marketing of its products. The exact
results of these opportunities are unknown at this time.
The Company has received an offer from the lender to NOW
Solutions and is in negotiations to release a portion of the
$1,500,000 presently restricted as well as a waiver of the
default on the bank loan to NOW Solutions. Additionally, the
Company has a $10,000,000 equity line commitment, which is
subject to the Company's ability to register the shares to be
issued under the equity line commitment with the Securities and
Exchange Commission. The Company is continuing its efforts to
secure working capital for operations, expansion and possible
acquisitions, mergers, joint ventures, and/or other business
combinations. However, there can be no assurance that the
Company will be able to secure additional capital, or that if
such capital is available, whether the terms or conditions would
be acceptable to the Company.
On July 1, 2002, the Company entered into a two year employment
agreement with Aubrey McAuley, whereby McAuley would provide
services in the capacity of Executive VP, Product Development
and Sales Support. McAuley will be paid an annual salary of
$120,000 and a bonus as determined in accordance with the
agreement. In consideration and as incentive for Executive to
execute this Employment Agreement and diligently perform the
services provided in connection with the Employment Agreement,
McAuley will receive 7,500 shares of Series "C" preferred stock
of the pool of 30,000 shares of Series "C" preferred stock,
which were reserved in connection with the purchase of Company's
subsidiary, Enfacet, Inc., for former employees of Enfacet and
investment purposes. These shares of Series "C" preferred stock
may be converted into 3,000,000 shares of Company's common
stock. The Company will register the underlying shares of
common stock. In the event the employment agreement is
terminated, then McAuley may convert his employment agreement
into a subcontractor agreement.
In July 2002, the Company retained the services of Equitilink,
Inc. to provide investor relations services in consideration of
the issuance of 5,000,000 shares of Company's common stock with
the Rule 144 restrictive legend. The fair value of the stock
issuance was $23,500.
In August 2002, the Company issued a $25,000 note, which was due
in August 2002 and bears interest at a rate of 12%. The note is
secured by 10,000,000 shares of common stock of Vertical
Computer that is owned by Mountain Reservoir Corporation, to
cover any shortfall in the event of default. Mountain Reservoir
Corp. is a corporation controlled by the W5 Family Trust. Mr.
Wade, the President and CEO of Vertical Computer Systems, is the
trustee of the W5 Family Trust. The Company has been granted an
extension into late September 2002.
In August 2002, the Company retained a consultant to provide
investment services on behalf of Company. Upon execution of the
agreement, the Company issued warrants to purchase 500,000
shares of common stock at a share price of $0.015, which expire
in August 2005 and vest immediately. The fair value of the
warrants was $4,474. The consultant is also entitled to 2.5% of
any cash funds raised and in the event the consultant raises
$1,500,000, then the Company will issue warrants to purchase 2.0
million shares of common stock, based on 90% of the average
closing price for the five previous trading days prior to the
closing date of the transaction.
In August 2002, the Company agreed with a third party lender to
loan the Company $60,000. The lender has currently loaned the
Company $31,859. The Company had agreed to issue warrants to
purchase 6 million shares of the Company's common stock at a
strike price of $0.005 per share in connection with funding the
total amount of the loan. The lender has not fully funded the
loan and the parties are negotiating additional terms to the
loan. In connection with the loan, the Company also agreed to
compensate a third party with a finders fee with warrants to
purchase Company common stock based on the amount of money
actually loaned to the Company.
In August 2002, the Company issued an $8,000 note, which is due
February 2003 and bears interest at a rate of 10% in
consideration of a loan from Luiz Valdetaro, the Chief
Technology Officer of the Company. In connection with the note,
the Company issued three year warrants to purchase 1,000,000
shares of its common stock at a price of $0.005 per share. The
warrants vested immediately and are exercisable for three years
from issuance. The Company also pledged a limited interest in a
deposit account in the event the Company defaults on the loan.
This deposit account in the amount of $1,500,000, was pledged
as collateral for a loan between a third party lender and the
Company's subsidiary, NOW Solutions.
In September 2002, the Company amended an agreement to retain
the services of Stephen Rossetti to provide services in the
capacity of Executive V.P., Governmental Affairs, in
consideration for warrants to purchase 1,000,000 shares of its
common stock at a share price of $0.012, $30,000 for services
rendered through August 31, 2002, and $5,000 per month for a
period of one year. The warrants expire in September 2005.
In September 2002, the Company issued warrants to purchase
1,750,000 shares of the Company's common stock at a strike
price of $0.006 per share to two consultants in connection with
accounting services provided to the Company. The warrants
expire in September 2005 and vest immediately. The fair market
value of the warrants issued was $15,830.
In September 2002, the Company issued 5,774,704 shares of common
stock to Luiz Valdetaro, the Chief Technology Officer of the
Company, and 13,976,296 shares of common stock to Mountain
Reservoir Corporation. These shares were issued in connection
with indemnity and reimbursement agreements between the Company
and Mountain Reservoir Corporation and Mr. Valdetaro,
respectively, to cover their respective 36,303,932 and
15,000,000 shares of common stock pledged by Mountain Reservoir
Corporation and Valdetaro in connection with the $425,000 note
issued in December 2001, whereby the Company would reimburse
Mountain Reservoir Corporation and Valdetaro with the respective
number of shares equal to any shares sold as collateral to cover
the default of any loan.
In September 2002, the Company issued a promissory note in the
amount of $13,000 to a third party lender bearing interest at 8%
due in October 2002 and warrants to purchase 250,000 shares of
Company common stock at a strike price of $0.008 per share in
consideration for a loan in the amount of $12,500 with a
commitment fee of $500. In connection with the loan, the Company
also issued warrants to purchase 250,000 shares of Company
common stock at a strike price of $0.008 per share to a third
party as a finder's fee.
First Serve Entertainment and Vijay Amritraj have agreed to
terminate their business relationship and are proceeding to
formalize a mutually acceptable settlement agreement.
Total Revenues for the six months ended June 30, 2002 increased
$2,195,000 from $1,435,000 to $3,630,000. The increase was
primarily due to the inclusion of NOW Solutions for a full
quarter for the three months ended March 31, 2002 as compared to
2001 plus the increase in NOW Solutions total revenues.
The $1,680,000 reduction in net loss for the six months ended
June 30, 2002 when compared to the same period in the prior
year was primarily due to the profitability of NOW and the
reduction of selling, general and administrative expenses.
Presently, the Company is dependent on external cash to fund its
operations. The Company's primary need for cash during the next
twelve months consists of working capital needs, as well as cash
to repay delinquent loans and loans coming due. In order to
meet its obligations, the Company will need to raise cash from
the sale of securities or loans or have the $1,500,000
restricted cash released by the bank. Other than the Equity
Line of Credit, the Company does not currently have any
commitments for such capital, and no assurances can be given
that such capital will be available when needed or on favorable
terms, if at all. As of June 30, 2002, the Company had
unrestricted cash of $665,000, substantially all of which is
held by NOW Solutions, a 60% owned subsidiary of the Company.
This cash is not available for use by the Company. Accordingly,
the Company had little cash available for its operations as of
June 30, 2002. Since June 30, 2002, the Company has borrowed
$57,000 from third parties and $8,000 from Luiz Valdetaro, the
Chief Technology Officer of the Company. The Company needs to
raise cash in order to continue operations.
VIASYSTEMS GROUP: Case Summary & Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: Viasystems Group, Inc.
101 South Hanley Road
St. Louis, Missouri 63105
aka Circo Technologies Group, Inc.
Bankruptcy Case No.: 02-14867
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Viasystems, Inc. 02-14868
Type of Business: Viasystems Group, Inc., is a holding company
whose principal assets are its shares of
stock of Viasystems, Inc. Viasystems, through
its direct and indirect subsidiaries, is a
leading, worldwide, independent provider of
electronics manufacturing services to
original equipment manufacturers primarily in
the telecommunication, networking,
automotive, consumer, industrial and computer
industries.
Chapter 11 Petition Date: October 1, 2002
Court: Southern District of New York (Manhattan)
Judge: Allan L. Gropper
Debtors' Counsel: Alan B. Miller, Esq.
Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8272
Total Assets: $1.6 Billion
Total Debts: $1.025 Billion
A. Debtor's 8 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
The Bank of New York Guarantee $432,500,000
Robert Massimillo
101 Barclay Street
New York, NY 10286
(212) 815-5287
The Bank of New York Guarantee $108,125,000
Robert Massimillo
101 Barclay Street
New York, NY 10286
(212) 815-5287
Hokkins Systemation, Inc. Lease of nonresidential $103,291
real property
Arm Computer, Inc. Lease of nonresidential $19,178
real property
Nuvision Financial Lease of personal $5,396
Services property
Nuvision Financial Lease of personal $10,834
Services property
GATX Technology Services Lease of personal $47,868
property
Silver Oak Partners Trade payable $45,867
B. Viasystem Inc.'s 8 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
The Bank of New York Guarantee $432,500,000
Robert Massimillo
101 Barclay Street
New York, NY 10286
(212) 815-5287
The Bank of New York Guarantee $108,125,000
Robert Massimillo
101 Barclay Street
New York, NY 10286
(212) 815-5287
Department of Trade and Guarantee o9,000,000
Industry of UK
Andrew J.T. Steele
1 Victoria Street
London SW1H0ET, England
Highwoods Realty Limited Lease of nonresidential $26,925
Partnership real property
Rep, Inc. Lawsuit $326,242
11535 Gilleland Road
P.O. Box 4889
Huntsville, AL 35815
G. Bartley Loftin III
Balch & Bingham, LLP
655 Gallatin Street
Huntsville, AL 35801
Haig Precision Lawsuit $122,225
Manufacturing
Hicks, Muse, Tate & Senior Unsecured Notes $117,734,704
Furst, Inc. entities
Joe Colonetta
200 Crescent Court,
Suite 1600
Dallas, TX 75201
Enron Energy Services Trade debt $120,075
WARNACO GROUP: Files Chapter 11 Reorganization Plan in New York
---------------------------------------------------------------
The Warnaco Group, Inc., (OTCBB:WACGQ) has filed its Plan of
Reorganization with the U.S. Bankruptcy Court for the Southern
District of New York. The Company said that the POR has the full
support of the Company's pre-petition secured lenders and
official committee of unsecured creditors and, upon approval by
the Court, will enable Warnaco to emerge from Chapter 11 in
early 2003 on a stand-alone basis with significantly reduced
debt and with each of its core businesses intact.
Warnaco filed for Chapter 11 protection on June 11, 2001 in
order to facilitate a restructuring of its operations and debt
load. Upon consummation of the Plan of Reorganization:
-- Warnaco's pre-petition secured lenders will receive the
following:
- Cash payments of approximately $101 million
- Newly issued senior subordinated notes in the
principal amount of $200 million
- Approximately 96.26 percent of newly issued common
stock in Warnaco;
-- Holders of allowed general unsecured claims will
receive approximately 2.55 percent of newly issued common stock
in Warnaco;
-- Holders of certain preferred securities issued by an
affiliate of the Company, Designer Finance Trust, will receive
approximately 0.60 percent of newly issued common stock in
Warnaco if they do not reject or object to the Plan of
Reorganization;
-- Pursuant to the terms of his Employment Agreement, as
adjusted under the Plan, Tony Alvarez will receive an incentive
bonus consisting of $1.95 million in cash, senior subordinated
notes in the principal amount of $0.94 million and 0.59 percent
of the newly issued common stock in Warnaco (increased from 0.45
percent to recognize his substantial contributions to the
Company's reorganization);
-- Warnaco's existing common stock will be extinguished;
-- Up to 10% of the newly issued common stock in Warnaco
will be reserved for issuance pursuant to management incentive
stock grants.
Cash requirements to satisfy the Company's obligations under the
Plan will be funded from its excess cash and borrowings under a
new secured exit financing facility to be entered into by the
Company. Prior to its Chapter 11 filing, Warnaco had
approximately $2.45 billion in debt. It is anticipated that
total debt upon the Company's expected emergence in early 2003
will be approximately $265 million (including the $201 million
in new senior subordinated notes and borrowings under its exit
financing facility).
The Company said that the strong support of its creditor
constituencies for its POR reflects the dramatic turnaround in
the Company's operating performance and financial condition
since the Company entered Chapter 11. Key elements of the
turnaround at Warnaco include:
-- A strengthened management team with the recruitment of
new leadership for the Company's core business units
(Sportswear, Swimwear and Intimate Apparel). In addition the
Company has upgraded both operating and financial management
within each of these units.
-- Institution of improved financial controls and
disciplines and the upgrading of corporate and divisional
financial personnel.
-- Substantial improvements in working capital management
through changes in operating philosophy and discipline.
-- Implementation of operating cost reductions through
overhead reductions, facility consolidations, plant closings and
outsourcing initiatives.
-- The divestiture of non-core operations.
-- Implementation of new product, marketing and
distribution initiatives.
-- A greatly improved liquidity position. As of today's
filing Warnaco has approximately $60 million in excess cash and
has entirely paid down the DIP Facility it obtained in Chapter
11. Borrowings under the DIP had peaked at $203.4 million in
July 2001.
Tony Alvarez, President and CEO of Warnaco, said: "We are
extremely proud of our achievements in restructuring Warnaco and
restoring it to health. The new Warnaco has a solid core of very
competitive businesses with superb brands in sportswear,
swimwear and intimate apparel. We believe the steps we have
taken to improve liquidity, strengthen management and improve
operating performance have put Warnaco on strong footing for the
future. This achievement is very much a testament to the hard
work and dedication of the great team at Warnaco and the strong
support of Stuart Buchalter and Harvey Golub, members of the
Restructuring Committee of the Company's Board."
Company Initiates Search for Permanent CEO
Warnaco said that a search committee has been formed and the
executive search firm of Heidrick & Struggles has been engaged
to identify internal and external candidates to succeed Tony
Alvarez as President and CEO.
Separately, the executive search firm of Spencer Stuart has been
engaged to identify candidates for the Board of Directors of the
Reorganized Warnaco.
In May 2001, Warnaco appointed Alvarez, a Founding Partner of
Alvarez & Marsal, Inc., as Chief Restructuring Advisor to
oversee the reorganization process. In November 2001, he was
named President and Chief Executive Officer. Alvarez has
committed to remain in place through the completion of the
restructuring process and to provide for a smooth and orderly
transition to a new CEO. Following the transition, Alvarez will
return to Alvarez & Marsal, Inc., a leading turnaround and
crisis management consulting firm with more than 150 employees
in 13 offices worldwide. Additionally, Heidrick & Struggles is
working to identify candidates for the role of Chief Financial
Officer to replace Jim Fogarty, who will also return to his
practice at Alvarez & Marsal.
Stuart D. Buchalter, Non-Executive Chairman of the Board of
Directors of Warnaco, and Harvey Golub, Chairman of the Board's
Restructuring Committee, said: "Tony and the team at Warnaco
have been instrumental in a dramatic turnaround of Warnaco,
remarkable for its quality and speed. Under Tony's leadership,
Warnaco will emerge a stronger company with deeper management
and improved competitive prospects. As we move toward the
successful completion of our reorganization, we are confident
that we will recruit a successor to Tony who can build upon
these accomplishments and lead the new Warnaco into the future."
The Warnaco Group, Inc., headquartered in New York, is a leading
manufacturer of intimate apparel, menswear, jeanswear, swimwear,
men's and women's sportswear, better dresses, fragrances and
accessories sold under such brands as Warner's(R), Olga(R),
Lejaby(R), Bodyslimmers(R), Chaps by Ralph Lauren(R), Calvin
Klein(R) men's and women's underwear, men's accessories, and
men's, women's, junior women's and children's jeans,
Speedo(R)/Authentic Fitness(R) men's, women's and children's
swimwear, sportswear and swimwear accessories, Polo by Ralph
Lauren(R) women's and girls' swimwear, Anne Cole Collection(R),
Cole of California(R) and Catalina(R) swimwear, and A.B.S.(R)
Women's sportswear and better dresses.
WARREN ELECTRIC: Asks Court to Fix November 27 Claims Bar Date
--------------------------------------------------------------
Warren Electric Group, Ltd., asks the U.S. Bankruptcy Court for
the Southern District of Texas to set a Bar Date -- a deadline
-- by which all creditors must file proofs of claim pursuant to
Bankruptcy Rule 3003(c)(3).
The Debtor tells the Court that in order to efficiently proceed
with the administration of this case it is necessary to fix the
Bar Date for all proofs of claim.
Particularly, the Debtor points out that its Plan of
Reorganization will soon be filed and the Debtor intends to
prosecute this case in as expeditious a manner as possible.
Debtor needs information concerning all the claims that must be
considered prior to confirmation.
Debtor requests that the Court enter an Order providing that all
creditors seeking or wishing to assert claims against the estate
must be required to file their proofs of claim on or before
November 27, 2002.
Warren Electric Group, Ltd., filed for chapter 11 protection on
September 27, 2002. Harlin C. Womble, Jr., Esq., at Jordan Hyden
Womble and Culbreth represent the Debtor in its restructuring
efforts. When the Company filed for protection from its
creditors, it listed estimated debts and assets of over $50
million each.
WHEELING-PITTSBURGH: Sues Reunion Ind. to Recoup Pref'l Transfer
----------------------------------------------------------------
Wheeling-Pittsburgh Steel Corporation wants to recover an
alleged preferential transfer to Reunion Industries, Inc., doing
business as The Alliance Machine Company.
According to James M. Lawniczak, Esq., Anthony J. LaCerva, Esq.,
and Henry G. Grendell, Esq., at Calfee Halter & Griswold LLP, in
Cleveland, Ohio, Reunion sold goods and services to WPSC prior
to the Petition Date, and was paid $1,217,387 from draws against
a Letter of Credit issued by Citibank NA. Now, WPSC wants that
money back -- and more!
In connection with the goods and services provided by Reunion,
Citibank NA issued its Irrevocable Letter of Credit for the
account of WPSC in the amount of $1,438,153. Reunion is listed
as the beneficiary of that Letter of Credit. WPSC had
previously pledged certain of its property to Citibank as
collateral to secure all indebtedness owed to Citibank,
including that under the Letter of Credit. Reunion has drawn
down the entire L/C and WPSC now contends that these transfers
are recoverable as preferences.
WPSC made these transfers to Reunion within 90 days of the
Petition Date, for the benefit of Reunion as a creditor of WPSC.
These transfers were made because of a pre-existing debt and
while WPSC was insolvent. These transfers enabled Reunion to
receive more payment than it would if:
-- the transfers had not been made,
-- Reunion had a prepetition general unsecured claim
for the amount of the transfers, and
-- brought that claim in these cases in liquidation.
In addition, WPSC alleges that Citibank was oversecured at the
time of the draws by Reunion, so that the issuance of the
secured Letter of Credit to Reunion resulted in a diminution of
WPSC's estate. WPSC's transfer of its property to Citibank as
collateral to secure each of the Letter of Credit constitutes an
avoidable preferential transfer to Reunion amounting to
$1,438,153.
Despite the fact that the Letter of Credit authorized payment
for certain specified purchase orders, Reunion made draws
against the Letter of Credit for work other than the work
specified in the Letter of Credit. The amount drawn by Reunion
to pay purchase orders which were not authorized by WPSC total
$50,000. As a result of these improper draws, WPSC has suffered
damages in the amount exceeding $50,000, plus costs and
expenses, including reasonable attorney's fees. WPSC also asks
the Court to render a judgment against Reunion for these
amounts, in addition to the amount recoverable as preferential
transfers. (Wheeling-Pittsburgh Bankruptcy News, Issue No. 27;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
WILLIAMS COMMS: New York Court Confirms Plan of Reorganization
--------------------------------------------------------------
Williams Communications Group, Inc., (OTC Bulletin Board: WCGRQ)
announced that the United States Bankruptcy Court for the
Southern District of New York has approved its Plan of
Reorganization. The Plan garnered overwhelming support from its
Unsecured Creditors and the Secured Lenders, receiving nearly
unanimous approval from those who voted.
"The Court's confirmation of our Plan of Reorganization and the
vote of confidence from our creditors are critical steps as the
Company completes its restructuring and nears emergence from
Chapter 11," said Howard Janzen, chief executive officer of
Williams Communications Group. "The diligent efforts of all
parties helped shape a Plan which makes WCG a financially
stronger company, well-positioned to provide reliable, superior
service over the long- term. In particular, the commitment of
WCG employees throughout the restructuring process allowed us to
continue to provide our loyal customers with the quality network
and customer service that is our hallmark."
Under the Plan, the Unsecured Creditors will receive
approximately 54 percent of the equity in the newly reorganized
Williams Communications. Leucadia National Corporation (NYSE:
LUK), which will invest $150 million in the Company and
purchased the claims of The Williams Companies for $180 million,
will receive approximately 44 percent of the new equity. The
Plan also includes a channeling injunction, which could allow
holders of securities-related claims up to two percent of the
equity of the reorganized company and potential recovery from
the company's officer and director liability insurance policies.
As part of the confirmed Plan, a new nine-member Board of
Directors will be formed. It will include four directors to be
selected by the Committee of Unsecured Creditors, four directors
to be selected by Leucadia, and Howard Janzen, CEO of the
reorganized Company. The Plan also calls for the Company to
transition to the WilTel name over the next two years.
There remain a few outstanding administrative and regulatory
details to be resolved, including necessary approvals from the
Federal Communications Commission. The Company expects to
resolve these issues soon and remains focused on an October
emergence from Chapter 11.
Based in Tulsa, Okla., Williams Communications Group, Inc., is a
bankrupt "debtor in possession" and the parent company of
Williams Communications, LLC, a leading broadband network
services provider. For more information, visit
http://www.williamscommunications.com
WORLDCOM INC: Proposes to Pay $3-Million Pentagon Break-Up Fee
--------------------------------------------------------------
Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New
York, notes that as a stalking horse bidder, TST/Pentagon City
LLC has established a guaranteed return for Worldcom Inc., and
its debtor-affiliates' estates and creditors. Even if the
Purchaser ultimately is not the successful bidder, the Debtors
and their estates will have benefited from the higher purchase
price established by the improved bid. The proposed Auction
Procedures require that Competing Offers exceed the Purchase
Price by a minimum of $4,042,750. Thus, if an alternative
transaction ultimately is approved and consummated, the Break-Up
Fee will only be payable after the sale proceeds have been
received by the estates and from amounts that are in excess of
the Purchase Price. Consequently, there is no diminution in
value to the Debtors' estates.
The Debtors ask the Court to approve the proposed Break-Up Fee
of $3,042,750, representing 3% of the Purchase Price.
Ms. Goldstein points out that approval of break-up fees and
other forms of bidding protections in connection with the sale
of significant assets pursuant to Section 363 of the Bankruptcy
Code has become an established practice in Chapter 11 cases.
Bankruptcy courts have approved bidding incentives similar to
the bidding protections under the "business judgment rule,"
which proscribes judicial second-guessing of the actions of a
corporation's board of directors taken in good faith and in the
exercise of honest judgment.
Ms. Goldstein asserts that the proposed bidding protections
meets the "business judgment rule" standard. The Break-Up Fee
is reasonable because:
-- it is not excessive compared to fees and reimbursements
approved in other cases in this Circuit, and
-- it will not diminish the Debtors' estates.
Ms. Goldstein explains that break-up fees enable a debtor to
assure a sale to a contractually committed bidder at a price the
debtor believes is fair and reasonable, while providing the
debtor with the opportunity of obtaining even greater benefits
for the estate through an auction process. (Worldcom Bankruptcy
News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-
0900)
Worldcom Inc.'s 11.25% bonds due 2007 (WCOM07USR4), DebtTraders
reports, are trading at 16 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOM07USR4
for real-time bond pricing.
XO COMMS: Two More Defendants Names in Connecticut Lawsuit
----------------------------------------------------------
According to a September 25, 2002 report by the Associated
Press, the Connecticut lawsuit against Forstmann Little et al.
has been amended to add two more defendants including: Erskine
Bowles and Joshua Lewis.
Mr. Bowles is a former White House chief of staff who is running
for Senate in North Carolina. Messrs. Bowles and Lewis were
general partners at Forstmann Little.
The lawsuit seeks more than $120,000,000 of lost state pension
funds. State Attorney General Richard Blumenthal told the
Associated Press that Connecticut lost $31,400,000 in McLeodUSA
and $95,000,000 in XO Communications. Forstmann Little set up
both failed deals.
State Treasurer Denise Nappier believes that naming Messrs.
Bowles and Lewis will help Connecticut recover the lost pension
funds. (XO Bankruptcy News, Issue No. 10; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
* Cadwalader's Litigation Department Adds New Partners
------------------------------------------------------
Gregory A. Markel and Ronit Setton, former partners in the
Securities Litigation Department at Brobeck, Phleger & Harrison
LLP, and Kenneth R. Pierce, formerly a Senior Vice President in
the Insurance Products Group at Lehman Brothers Inc., have
joined Cadwalader, Wickersham & Taft as partners in the
Litigation Department, resident in the New York office. Nancy
I. Ruskin, formerly Of Counsel in the Securities Litigation
Department at Brobeck, Phleger & Harrison LLP, will also join
the firm as Special Counsel, resident in the New York office.
Mr. Markel, Ms. Setton, and Ms. Ruskin will provide counseling
and representation on securities, corporate, antitrust and other
complex matters, including tax, trade secret, intellectual
property, internet, insurance coverage, banking and RICO
litigation. They specialize in defending investment banks,
directors and officers and accounting firms in securities cases.
Mr. Pierce will focus on emerging issues in the field of
reinsurance and provide counseling and representation to
reinsurers, corporations, investment banks, and private equity
managers on the issues that arise when capital markets and
corporate issues converge with reinsurance.
"Greg is an outstanding addition both to our New York office and
our litigation practice," said Robert O. Link, Jr., Cadwalader's
Chairman. "He has an exceptional track record in large complex
cases and, together with Ronit and Nancy, has developed a top-
tier, diversified practice. With their addition, Cadwalader
continues to expand our expertise across the entire spectrum of
corporate and securities litigation matters."
"Ken's litigation expertise and comprehensive knowledge of the
business of insurance and reinsurance broadens the firm's
leading reinsurance dispute resolution practice," Link
continued.
"Greg's expertise in securities, antitrust and other complex
commercial litigation enhances our existing litigation
capabilities, while Ken is ideally suited to diversify our
insurance and reinsurance dispute resolution practice. These
additions, coupled with that of Michael Horowitz, another new
litigation partner in our Washington office, represent a
significant expansion of our capabilities and is our latest
response to a market that increasingly demands guidance in
commercial disputes," said Dennis J. Block, Chairman of
Cadwalader's Litigation and Corporate/M&A Departments.
"I look forward to joining forces with Cadwalader and
collaborating with members of the litigation department on a
wide range of litigation matters," said Markel.
"Cadwalader's reinsurance group is matched by few in the
industry. I cannot imagine a better platform to develop and grow
an insurance and reinsurance practice serving a wide range of
client needs," said Pierce.
Mr. Markel began his legal career as an associate at Cravath,
Swaine & Moore. After eight years at Cravath, he co-founded
Davis, Markel & Edwards, and later was the senior New York
litigator for Orrick, Herrington & Sutcliffe. Mr. Markel
received his undergraduate degree in Economics from Columbia
College in 1966, his MBA in Finance and Accounting from the
University of Michigan in 1968 and his law degree from Yale Law
School in 1972.
Ms. Setton worked directly with Mr. Markel at Orrington,
Herrington & Sutcliffe and at Brobeck, Phleger & Harrison LLP,
where she became partner in January 2002. She holds B.A. and
M.A. degrees from Stanford University and a J.D. from New York
University School of Law.
Mr. Pierce was formerly a partner at Chadbourne & Parke, where
he handled large reinsurance cases on behalf of various
insurance companies. Mr. Pierce received his A.B., magna cum
laude, and was Phi Beta Kappa at Brown University in 1981, and
earned a J.D. from Harvard Law School in 1984. After law school,
he clerked for U.S. District Court Judge Sidney M. Aronovitz of
the Southern District of Florida from 1984-1985.
Ms. Ruskin worked directly with Mr. Markel at Orrick, Herrington
& Sutcliffe and at Brobeck, Phleger & Harrison. She began her
career as an associate at LaBouef, Lamb, Leiby & MacRae. Ms.
Ruskin received her B.A. from Cornell University and earned a
J.D. from Cornell Law School, where she was an editor of the
Cornell Law Review.
Cadwalader, Wickersham & Taft, established in 1792, is one of
the world's leading international law firms, with offices in New
York, Charlotte, Washington and London. Cadwalader serves a
diverse client base, including many of the world's top financial
institutions, undertaking business in more than 50 countries in
six continents. The firm offers legal expertise in
securitization, structured finance, mergers and acquisitions,
corporate finance, real estate, environmental, insolvency,
litigation, health care, global public affairs, banking, project
finance, insurance and reinsurance, tax, and private client
matters. More information about Cadwalader can be found at
www.cadwalader.com.
* Kramer Levin Forges Strategic Alliance with Berwin Leighton
-------------------------------------------------------------
U.S.-based law firm Kramer Levin Naftalis & Frankel LLP and
Berwin Leighton Paisner of the U.K., announced their new
transatlantic alliance, which will create a broad international
capability with over 700 attorneys and offices in the major
financial centers of London, New York, Paris, Brussels and
Milan.
The collaboration between New York City-based Kramer Levin and
London's City-based Berwin Leighton Paisner represents a
significant milestone in the firms' abilities to provide truly
superior global counsel. The alliance will focus on cross-
border corporate and finance matters, and other practice areas
for which both firms are highly regarded. These include real
estate, litigation, intellectual property and technology,
bankruptcy and tax. Kramer Levin's Milan affiliate, Studio
Santa Maria, will participate in the venture.
Neville Eisenberg, Managing Partner of Berwin Leighton Paisner,
said, "Our approach is unique because we are focussing on the
key financial centres in Europe together with a New York firm.
This alliance is a major step forward in achieving our strategic
goal of creating a first-rate international capability. The
similarities in the firms' cultures, depth of legal talent and
commitment to providing innovative and responsive client service
will ensure that our clients will reap the benefits of our
combined strengths."
Both firms view the alliance to be of significant strategic
importance, having received the backing and support from
partners at the highest level across each firm. While each firm
will remain independent, the firms have agreed on an executive
committee comprised of members from each firm who will oversee
and manage the collaboration, including the identification of
synergistic opportunities and joint marketing and business
development programmes.
"For Kramer Levin this represents an important next step in
expanding our international presence and being able to provide
clients with seamless global representation," commented Kramer
Levin Managing Partner Paul Pearlman. "Our strategy is founded
on being responsive to client needs, one of which is access to
international counsel. By having attorneys on the ground in
Paris, Milan and now London and Brussels, we are uniquely
positioned to help transatlantic clients navigate complex legal
issues on both a local and global basis."
Kramer Levin Naftalis & Frankel LLP is a full-service law firm
with offices in New York, Paris and an affiliate in Milan. The
firm represents more than 2000 clients worldwide, from Fortune
500 corporations and multinational companies to entrepreneurial
start-up concerns and individuals. Kramer Levin's practice
includes corporate securities and finance, litigation,
intellectual property, bankruptcy and restructuring, real
estate, tax, white collar criminal defense, financial services,
employee benefits, employment and labor and individual clients,
among many other practice specialties. Additional information
about the firm is available on the firm's Web site:
http://www.kramerlevin.com
Berwin Leighton Paisner is a top 15 City law firm with offices
in London and Brussels. Clients include FTSE 100 companies and
financial institutions, major multinationals, the public sector,
entrepreneurial private businesses and individuals. Practice
areas include corporate finance, real estate, banking and
capital markets, projects, property finance, personal and
corporate tax, planning and environment, techmedia, construction
and engineering, commercial litigation, property litigation,
reinsurance, commercial, regulatory and charities. Additional
information is available on the firm's Web site:
http://www.blplaw.com
* Meetings, Conferences and Seminars
------------------------------------
October 1-2, 2002
INTERNATIONAL WOMEN'S INSOLVENCY AND RESTRUCTURING
CONFEDERATION
International Fall Meeting
Hyatt Regency, Chicago, IL
Contact: 703-449-1316 or fax 703-802-0207
or iwirc@ix.netcom.com
October 2-5, 2002
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
Seventy Fifth Annual Meeting
Hyatt Regency, Chicago, IL
Contact: http://www.ncbj.org/
October 3, 2002
INTERNATIONAL INSOLVENCY INSTITUTE
Member's Meeting (III)
Chicago IL
Contact: http://www.ncbj.org/
October 7-13, 2002
ASSOCIATION OF BANKRUPTCY JUDICIAL ASSISTANTS
13th Annual Educational Conference and Meetings
Regency Plaza Hotel, Mission Valley
Contact: 313-234-0400
October 9-11, 2002
INSOL INTERNATIONAL
Annual Regional Conference
Beijing, China
Contact: tina@insol.ision.co.uk
or http://www.insol.org
October 24-25, 2002
NATIONAL BANKRUPTCY CONFERENCE
Member's Meeting
Sidley Austin Brown & Wood Offices, Washington D.C.
Contact: http://www.law.uchicago.edu/NBC/NBC.htm
November 18-19, 2002
EUROLEGAL
Insurance Exit Strategies
Kingsway Hall, London
Contact: +44 0 20 7878 6886
November 21-24, 2002
COMMERCIAL LAW LEAGUE OF AMERICA
82nd Annual New York Conference
Sheraton Hotel, New York City, New York
Contact: 312-781-2000 or clla@clla.org
or http://www.clla.org/
October 24-28, 2002
TURNAROUND MANAGEMENT ASSOCIATION
Annual Conference
The Broadmoor, Colorado Springs, Colorado
Contact: 312-822-9700 or info@turnaround.org
December 2-3, 2002
RENAISSANCE AMERICAN MANAGEMENT, INC. & BEARD GROUP
Distressed Investing 2002
The Plaza Hotel, New York City, New York
Contact: 1-800-726-2524 or fax 903-592-5168
or ram@ballistic.com
December 5-7, 2002
STETSON COLLEGE OF LAW
Bankruptcy Law & Practice Seminar
Sheraton Sand Key Resort
Contact: cle@law.stetson.edu
December 5-8, 2002
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
The Westin, La Paloma, Tucson, Arizona
Contact: 1-703-739-0800 or http://www.abiworld.org
February 22-25, 2003
NORTON INSTITUTES ON BANKRUPTCY LAW
Litigation Institute I
Marriott Hotel, Park City, Utah
Contact: 1-770-535-7722 or
http://www.nortoninstitutes.org
March 27-30, 2003
NORTON INSTITUTES ON BANKRUPTCY LAW
Litigation Institute II
Flamingo Hilton, Las Vegas, Nevada
Contact: 1-770-535-7722
or http://www.nortoninstitutes.org
March 31 - April 01, 2003
RENAISSANCE AMERICAN MANAGEMENT, INC. & BEARD GROUP
Healthcare Transactions: Successful Strategies for Mergers,
Acquisitions, Divestitures and Restructurings
The Fairmont Hotel Chicago
Contact: 1-800-726-2524 or fax 903-592-5168 or
ram@ballistic.com
April 10-13, 2003
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Grand Hyatt, Washington, D.C.
Contact: 1-703-739-0800 or http://www.abiworld.org
May 1-3, 2003 (Tentative)
ALI-ABA
Chapter 11 Business Organizations
New Orleans
Contact: 1-800-CLE-NEWS or http://www.ali-aba.org
May 8-10, 2003 (Tentative)
ALI-ABA
Fundamentals of Bankruptcy Law
Seattle
Contact: 1-800-CLE-NEWS or http://www.ali-aba.org
June 19-20, 2003
RENAISSANCE AMERICAN MANAGEMENT, INC. & BEARD GROUP
Corporate Reorganizations: Successful Strategies for
Restructuring Troubled Companies
The Fairmont Hotel Chicago
Contact: 1-800-726-2524 or fax 903-592-5168
or ram@ballistic.com
June 26-29, 2003
NORTON INSTITUTES ON BANKRUPTCY LAW
Western Mountains, Advanced Bankruptcy Law
Jackson Lake Lodge, Jackson Hole, Wyoming
Contact: 1-770-535-7722
or http://www.nortoninstitutes.org
July 10-12, 2003
ALI-ABA
Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
Drafting, Securities, and Bankruptcy
Eldorado Hotel, Santa Fe, New Mexico
Contact: 1-800-CLE-NEWS or http://www.ali-aba.org
December 3-7, 2003
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
La Quinta, La Quinta, California
Contact: 1-703-739-0800 or http://www.abiworld.org
April 15-18, 2004
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
J.W. Marriott, Washington, D.C.
Contact: 1-703-739-0800 or http://www.abiworld.org
December 2-4, 2004
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Marriott's Camelback Inn, Scottsdale, AZ
Contact: 1-703-739-0800 or http://www.abiworld.org
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via
e-mail to conferences@bankrupt.com are encouraged.
*********
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-
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firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
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*** End of Transmission ***