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/raid1/www/Hosts/bankrupt/TCR_Public/021209.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, December 9, 2002, Vol. 6, No. 243 Headlines ADELPHIA BUS.: Selling Closed Market Assets to Gateway for $10MM ADELPHIA COMMS: Employing C.I.T. as Telecom Consultants AIR CANADA: Supports Mediator's Flight Attendant Recommendations ALLEGHENY ENERGY: Board Suspends Quarterly Cash Dividend AMERICAN HOMEPATIENT: Will Restate 2001 and Q1 & Q2 2002 Results AMERICAN PAPER GROUP: Has Until Friday to Declare Lead Bidder AMES DEPARTMENT: Rejects Infotech Outsourcing Contract with IBM AMSCAN HOLDINGS: S&P Ups Corporate Credit Rating to BB- from B+ ANC RENTAL: Committee Turns to FTI for Financial Advice ASIA GLOBAL CROSSING: Court Grants Interim Okay to Hire Lazard ASPECT COMM: Ratings Still on Watch Pending $50M Preferreds Sale BASIS100: Reduces Corp. Overhead Expenses by CDN$3-Mil Annually BEST BUY: Will Publish Third Quarter Earnings on December 17 CALIFORNIA WESTERN: Commences Chapter 11 Bankruptcy Proceeding CALIFORNIA WESTERN RAILROAD: Voluntary Chapter 11 Case Summary CARESIDE INC: Palm Finance Extends $2 Million DIP Financing CASELLA WASTE: Generates $25.8MM of EBITDA in 2nd Quarter 2003 CENTERPOINT: Declares Partial Texas Genco Share Distribution CEYONIQ INC: Initiates Voluntary Financial Reorganization CEYONIQ INC.: Case Summary & 20 Largest Unsecured Creditors CHESAPEAKE ENERGY: Fitch Affirms Senior Unsecured Notes at BB- CHESAPEAKE ENERGY: Commencing $150M Private Senior Note Offering CHESAPEAKE ENERGY: Plans to Commence 20-Million Share Offering CHESAPEAKE ENERGY: Preparing Prospectus for Equity Offering COAST HOTELS: S&P Revises Ratings Outlook to Stable from Pos. CONSECO INC: Fitch Downgrades 45 MH Transactions Ratings to C CORNING: Will Take $825MM Goodwill & Impairment Charges in Q4 COVANTA: Seeks Court Nod to Renew & Modify AIG Insurance Program DEL MONTE: Issuing New $300 Million of Senior Subordinated Notes DEL MONTE: Heinz Transaction Continues to Proceed on Schedule DELTA AIR LINES: November 2002 System Traffic Climbs 11% ENRON CORP: National City Seeks Stay Relief Re Trust Securities EVERCOM INC: Reaches Agreement for Debt Workout via Equity Swap FARMLAND INDUSTRIES: All Proofs of Claim Due on January 10, 2003 FEDERAL-MOGUL: Court Grants Committees More Time to File Actions FLEMING: Continues Talks to Sell Certain Wisconsin Retail Stores GENCORP: Affirms 2002 Earnings Guidance & Provides 2003 Outlook GENEVA STEEL: Engages Tanner + Co. as New Independent Auditors GENUITY: Asks Court Okay to Set-Up Asset Sale Bidding Protocol GLASSMASTER CO.: Recurring Losses Raise Going Concern Doubts GLOBAL CROSSING: Court Approves New Tecota Lease Agreement GOLF AMERICA: Committee Taps Kronish Lieb as Lead Counsel HAYES LEMMERZ: Obtains OK to Renew AFCO Insurance Financing Deal HERCULES INC: S&P Rates $350MM Sr. Sec. Credit Facilities at BB HOLLYWOOD ENTERTAINMENT: Offering $200MM Sr. Subordinated Notes HORSEHEAD INDUSTRIES: Wants to Stretch Exclusivity to March 31 HUGHES ELECTRONICS: Refinances and Extends Sr. Credit Facilities IMC GLOBAL: S&P Assigns BB Rating to Proposed $100MM Sr. Notes INDYMAC BANCORP: S&P Changes Outlook to Stable from Negative INTEGRATED HEALTH: Selling Operations to Trans Healthcare Inc. MAGNUM HUNTER: Executives Sell 482,000+ Shares in Block Trade MARK NUTRITIONALS: Reports Major Progress in Chapter 11 Reorg. MORGAN STANLEY: Fitch Cuts Ratings on 3 Note Classes to Low-Bs MSDW OWNER: Fitch Downs Ratings on 2000-F1 Class G Notes to B- NATIONAL STEEL: PBGC Intends to Assume Company's Pension Plans NCS HEALTHCARE: Postpones Vote on Merger with Genesis Health NIAGARA MOHAWK: Verifies NYPSC Staff Position Re Pension Expense NOVATEL WIRELESS: Fails to Meet Nasdaq Min. Equity Requirement NOVEX SYSTEMS: Accountants Radin Glass Air Going Concern Doubts OAKWOOD HOMES: S&P Downgrades Class B-2 Rating to D OCEAN POWER: Hires Halperin & Associates as Bankruptcy Counsel PCNET INT'L: Creditors Unanimously Approve Plan of Arrangement PENTON MEDIA: NYSE Accepts Plan to Meet Listing Requirements PUTNAM: Fitch Places Fixed Rate Note Ratings on Watch Negative SAFETY-KLEEN CORP: Plans to Line-Up $250 Million Exit Financing SAKS INC: Reports 7% Comparable Store Sales Decline in November SANMINA-SCI CORP: S&P Downgrades Corporate Credit Rating to BB- SEVEN SEAS PETROLEUM: Has Until Today to Cure Potential Default SIMULA: Kennedy Capital Management Discloses 10.6% Equity Stake SLOAN'S AUCTION: Files Chapter 11 Petition in Greenbelt, Md. SOLECTRON: Will Announce First Quarter 2003 Results on Dec. 19 SOLUTIA: Fitch Affirms Sr. Sec. Facility & Note Ratings at BB-/B SPECTRASITE HOLDINGS: Files Plan & Disclosure Statement in N.C. STELCO INC: Consolidates Nanticoke & Hamilton Operations US AIRWAYS: Wachovia Demands Payment for Administrative Expenses UAL CORP: Loan Guaranty Rejection Spurs Corp. Credit Cut to D UNITED AIRLINES: Continental Applaud ATSB for 'Right' Decision UNITED AIRLINES: Traffic Up 7.7% as Load Factor Rises to 69.2% UNITED AIRLINES: Assuring Customers Planes Will Keep Flying WA TELECOM: Verso Obtains Court Nod to Pay for NACT Acquisition WARNACO GROUP: Seeking Approval on Speedo Settlement Agreement WIDECOM GROUP: Accountants Doubt Ability to Continue Operations WORLD AIRWAYS: Proposes Flight Attendant Pay Increases & Changes WYNDHAM INT'L: Closes $345-Million Asset Sale to Westbrook Hotel YOUTHSTREAM MEDIA: Bankruptcy Filing Likely if Arrangement Fails YUM! BRANDS: Will Hold Annual Executive Update on Wednesday * BOND PRICING: For the week of December 9 - 13, 2002 ********* ADELPHIA BUS.: Selling Closed Market Assets to Gateway for $10MM ---------------------------------------------------------------- In connection with the downsizing of their business operations, Adelphia Business Solutions, Inc., together with its debtor- affiliates and their financial advisers have actively marketed and solicited bids for the various telecommunications assets and related executory contracts and unexpired leases associated with the markets which they intend to close. These extensive marketing efforts have resulted in the execution of an asset purchase agreement for the assets relating to certain of the closed markets. Pursuant to the Agreement, the ABIZ Debtors have agreed to sell certain assets and to assume and assign certain executory contracts and unexpired leases to Gateway Columbus, LLC, for $10,700,000, plus the assumption of certain contractual liabilities. The sale is subject to higher and better offers. The salient terms of the Agreement are: A. Purchase Price: Gateway will pay the Debtors $10,700,000, subject to certain adjustments, for the Sale Assets and the Assumed Contracts. Gateway has already deposited $1,000,000 with the designated escrow agent pursuant to an escrow agreement executed by the parties. The Earnest Money Deposit will be applied to the Purchase Price after closing with Gateway; B. Payment of Aggregate Burn Amount: During the period commencing on October 11, 2002 and concluding on the date of closing, Gateway will pay on the Debtors' behalf, all commercially reasonable interim operating expenses relating to the Sale Assets and the Assumed Contracts, up to $400,000 per month. The Aggregate Burn Amount is an additional component of the total consideration and is estimated to add an additional $800,000 to $1,000,000 to the Sale Transaction; and C. Sale Assets: At the Closing, Seller will sell, assign, transfer, convey, and deliver to Buyer, and Buyer will purchase and accept from Seller, all of Seller's right, title, and interest in, to and under all of the Assets, wherever located, whether tangible or intangible, as existing on the Closing Date, including any manufacturers' warranties on the Assets, but not including Seller's cash and accounts receivable or any assets not listed on Schedule 2.1, free and clear of all Liens, subject to the Buyer's payment of the Cure Amounts. In addition, the Agreement allows for the Debtors and Gateway to agree to a written modification of Schedule 2.1. The Debtors ask the Court to approve the sale of the assets to Gateway, subject to higher and better bids. Ms. Liu contends that the proposed sale of the Assets is well within the Debtors' sound business judgment. The Debtors announced its intention to discontinue operations in the Closed Markets several months ago and the Closed Markets are not part of the Debtors' future business plans. The Debtors believe that any net sale proceeds realized from the Auction will represent the fair market value for the Sale Assets and that the Auction is the most appropriate mechanism to generate maximum value from the Closed Markets. Other than the liens granted to Beal Bank, as postpetition lender under the credit agreement dated August 7, 2002, and the liens granted to ACOM in respect of the limited postpetition funding provided by ACOM in the credit agreement dated March 27, 2002, the Debtors are not aware of any liens relating to the Assets, except for certain purchase money security interests asserted by Lucent Technologies, Inc. Accordingly, the Court should authorize the Debtors to sell the Assets, free and clear of any and all liens, claims and encumbrances with any of liens to be transferred and attached to the net proceeds of the sale, with the same validity and priority that these liens, claims and encumbrances had against the Sale Assets. (Adelphia Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 609/392-0900) ADELPHIA COMMS: Employing C.I.T. as Telecom Consultants ------------------------------------------------------- Pursuant to Sections 327(a) and 328(a) of the Bankruptcy Code, Adelphia Communications, and its debtor-affiliates seek the Court's authority to employ Collective Infrastructure Technology Inc. as telecommunications consultants to assist them with allocating costs incurred for certain telecommunications services. Shelley C. Chapman, Esq., at Willkie Farr & Gallagher LLP, in New York, relates that since November 4, 2002, C.I.T. has been assisting the ACOM Debtors with the review and analysis of certain of the ACOM Debtors' telecommunications contracts in an effort to determine what telecommunications services are properly allocable to the ACOM Debtors and which are allocable to the Debtors' former affiliate, ABIZ. By letter agreement dated November 6, 2002, C.I.T. signed an engagement letter with the ACOM Debtors. As C.I.T. has been providing valuable services to the ACOM Debtors' estates since November 4, 2002, C.I.T. should be employed nunc pro tunc to that date. According to Ms. Chapman, C.I.T. is a telecommunications consulting firm comprised of professionals who collectively have years of experience in the design, engineering and implementation of landline and wireless voice, high speed data, terrestrial video, satellite video and surveillance systems. In addition, C.I.T., through its consultants, has experience in negotiating interconnection agreements and billing arrangements, including but not limited to analyzing ILEC and CLEC tariffs, for major telecommunications companies. The services that C.I.T. will render in these cases will principally involve assisting the Debtors in analyzing certain of their telecommunications and charges and contracts. More particularly, these include: A. Telecommunication Charges: The Debtors obtain many of their telecommunications services pursuant to contracts between third party telecommunications service providers and ABIZ. As a result, several TSPs currently are seeking payment from ABIZ for services which were provided in part for the benefit of the Debtors' estates. Rather than paying the Obligations to the TSPs and seeking partial reimbursement from the Debtors, ABIZ has asked the Debtors to pay their portion of the Obligations to the TSPs directly. To facilitate this approach, ABIZ has prepared a report allocating the Obligations between the Debtors and ABIZ. Since the nature of the telecommunications services provided to the Debtors' estates and the allocations prepared by ABIZ are technical in nature and require expertise beyond the Debtors' current capabilities, the Debtors have requested C.I.T.'s services to verify the ABIZ allocation. Since November 4, 2002, C.I.T. has begun to review and analyze the detailed invoices from TSPs. In addition, C.I.T. has begun to review the detailed allocations prepared by ABIZ which are the basis for the ABIZ request that the Debtors pay certain TSPs directly. The ultimate objective of this review is to determine the extent and value of services provided to the Debtors' estates, pursuant to agreements between the TSPs and ABIZ. Utilizing information provided by ABIZ and the TSPs, including the contracts, invoices, and any detailed calculations or analyses of the Obligations, when necessary and appropriate, C.I.T. will challenge the charges by and credits from the TSPs and the allocation of the Obligations prepared by ABIZ; and B. Telecommunications Contracts: In addition to analyzing the charges and invoices, at the Debtors' request, C.I.T. will also review the terms of existing telecommunications contracts that benefit the Debtors' estates, including the contracts between ABIZ and TSPs. C.I.T.'s review will include an analysis as to whether or not the terms and conditions of the contracts are market and a recommendation whether or not to assume or reject the contract. In addition, if it is determined that a contract is not market and is a possible candidate for rejection, then C.I.T. will assist the Debtors in negotiating the terms and conditions of a new contract with a TSP for the required services related to the contract. The types of contracts to be reviewed may include collocation agreements, SS7 arrangements, billing, facilities, interconnection, customer, and carrier agreements. Subject to the Court's approval, C.I.T. will seek compensation for its services at its regular hourly rates. Additionally, C.I.T. will seek reimbursement of out-of-pocket expenses incurred in performing services for the Debtors. The professionals who primarily will be rendering services in these cases are: -- Dennis M. McClure, Senior and Lead Consultant; -- Stephen C. Jacobsen, Senior Consultant; -- Thomas Schroeder, Chief Operation Officer; and -- Christopher Marino, President & CEO. The current hourly rate for each of these professionals is $235. These rates are subject to periodic adjustment based on economic and other conditions. In light of the complexity of the industry in which the Debtors operate and the current undertaking to continue to separate the operations of ABIZ from that of ACOM, the ACOM Debtors require the assistance of telecommunications consultants to render the services. C.I.T. has substantial expertise and is well qualified to perform these services and represent and advance the Debtors' interests in these Chapter 11 cases. Accordingly, the Debtors believe that C.I.T. is the most appropriate choice among telecommunications consultants to assist the Debtors in their endeavors to properly allocate the costs and benefits to these estates in respect of telecommunications charges and contracts. C.I.T. President Christopher J. Marino, assures the Court that the C.I.T. principals and professionals: -- do not have any connection with the Debtors, their creditors, or any party-in-interest, or their attorneys; -- do not hold or represent an interest adverse to the estate; and -- are "disinterested persons" within the meaning of Section 101(14) of the Bankruptcy Code. (Adelphia Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 609/392-0900) Adelphia Communications' 8.125% bonds due 2003 (ADEL03USR1), DebtTraders says is trading at 35 cents-on-the-dollar. See http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL03USR1 for real-time bond pricing. AIR CANADA: Supports Mediator's Flight Attendant Recommendations ---------------------------------------------------------------- Air Canada supports Mediator George Adams' recommendations on the outstanding issues relating to finalization of the collective agreement between the airline and the Air Canada Component of the Canadian Union of Public Employees (CUPE), representing the airline's 8000 flight attendants. "This has been a very difficult round of negotiations set against a challenging environment for the airline industry along with the complexity of integrating two work forces with distinctive histories," said Kevin Howlett, Vice-President, Labour Relations for Air Canada. "In this context, Mr. Adams' recommendations provide a satisfactory outcome and we look forward to a successful ratification of this tentative agreement by the CUPE membership." The tentative agreement is subject to formal ratification by both the airline's flight attendants and the corporation. Air Canada's September 30, 2002, balance sheet reported a total shareholders equity deficit of about $1.5 billion. DebtTraders reports that Air Canada's 10.250% bonds due 2011 (AIRC11CAN1) are trading between 65 and 67. See http://www.debttraders.com/price.cfm?dt_sec_ticker=AIRC11CAN1 for real-time bond pricing. ALLEGHENY ENERGY: Board Suspends Quarterly Cash Dividend -------------------------------------------------------- At its meeting Thursday, Allegheny Energy's Board of Directors suspended the Company's quarterly cash dividend on its common stock. The Company announced on October 9, 2002, its intention to reduce or suspend its current dividend through at least the fourth quarter of 2003. This step and other actions taken throughout the year are part of Allegheny Energy's previously announced strategic and financial repositioning aimed at increasing its financial flexibility and improving cash flow. Allegheny Energy believes that suspending the dividend is the prudent course of action at this time to support its efforts to enhance cash flow, reduce debt, and improve its credit ratings. Commenting on the change, Allegheny Energy Chairman, President, and Chief Executive Officer Alan J. Noia said, "While our Board of Directors recognizes the importance of rewarding our shareholders with a consistent cash dividend, we believe this action is prudent and necessary. Our core businesses remain fundamentally sound, and we expect to work through our short- term liquidity needs in a timely manner." Allegheny Energy has already taken steps to reduce its cost structure, preserve cash, and strengthen its balance sheet, including reducing the Company's reliance on its wholesale energy trading business; reducing pre-tax operating expenses in 2002; cancelling the development of several generating facilities, saving $700 million in capital expenditures over the next several years; and reducing the workforce by approximately 10 percent through a voluntary early retirement option, normal attrition, and selected staff reductions. Additionally, as announced on October 21, 2002, the Company has received authority from the U.S. Securities and Exchange Commission to borrow up to $2 billion on a secured basis. Allegheny Energy is continuing to work with its bank lenders to ensure the long-term financial health of the Company and is pleased with the support that its lenders have provided. With headquarters in Hagerstown, Md., Allegheny Energy is an integrated Fortune 500 energy company with a balanced portfolio of businesses, including Allegheny Energy Supply, which owns and operates electric generating facilities and supplies energy and energy-related commodities in selected domestic retail and wholesale markets; Allegheny Power, which delivers low-cost, reliable electric and natural gas service to about three million people in Maryland, Ohio, Pennsylvania, Virginia, and West Virginia; and a business offering fiber-optic and data services, energy procurement and management, and energy services. More information about the Company is available at http://www.alleghenyenergy.com Allegheny Energy Inc.'s 7.750% bonds due 2005 (AYE05USR1), DebtTraders reports, is trading at 72 cents-on-the-dollar. See http://www.debttraders.com/price.cfm?dt_sec_ticker=AYE05USR1for real-time bond pricing. AMERICAN HOMEPATIENT: Will Restate 2001 and Q1 & Q2 2002 Results ---------------------------------------------------------------- American HomePatient, Inc., (OTCBB:AHOM)(OTCBB:AHOME) will restate financial results for the 2001 fiscal year and for the first and second quarters of the 2002 fiscal year. Arthur Andersen, LLP previously served as the Company's independent auditors. On August 14, 2002, the Company engaged Deloitte & Touche LLP as its independent auditors, subject to approval of the United States Bankruptcy Court for the Middle District of Tennessee, Nashville Division. On August 14, 2002, the Company also filed its second quarter Form 10-Q without review by outside auditors. On October 21, 2002 the Bankruptcy Court approved the appointment of Deloitte as the Company's independent auditors. Subsequent to the issuance of the Company's June 30, 2002 consolidated financial statements, and in connection with Deloitte's interim financial statement review, the Company's management re-evaluated the accounting treatment for certain fees associated with the Company's Fifth Amended and Restated Credit Facility entered into in June 2001, and the Company determined it had incorrectly accounted for such fees in its 2001 and 2002 financial statements. Management previously believed that the Company's method of recording these fees was appropriate, and Andersen concurred with management's accounting treatment of the fees. The Company's financial statements did not reflect certain incurred Credit Facility fees and interest, and deferred Credit Facility fees that should have been expensed. As a result, the Company will restate its consolidated financial statements for the year ended December 31, 2001, and for the quarters ended June 30, 2001, September 30, 2001, December 31, 2001, March 31, 2002 and June 30, 2002. Management anticipates that the restatement will have the effect of increasing the Company's fiscal 2001 reported pre-tax loss by approximately $1.7 million and will improve pre-tax earnings (loss) by approximately $800,000 in fiscal 2002 from what would have been reported by the Company under its historical accounting treatment for these fees. The adjustments described above will not affect the Company's reported revenues, reported EBITDA, current cash position or future results of operations. As a result, the Company has engaged Deloitte to audit the Company's restated annual financial statements for fiscal 2001 and to perform a review of the Company's interim financial statements for the second, third and fourth quarters of fiscal 2001 and the first and second quarters of fiscal 2002. Following the completion of the audit and reviews, the Company will make amended filings with the SEC to restate its financial statements to appropriately account for the items discussed above and then will file the Company's Form 10-Q for the third quarter of 2002. Until the audit and reviews are completed, investors should not rely upon the Company's historical financial statements contained in its Form 10-K for fiscal 2001 or its Forms 10-Q for the first two fiscal quarters of 2002. American HomePatient is one of the nation's largest home health care providers with 285 centers in 35 states. Its product and service offerings include respiratory services, infusion therapy, parenteral and enteral nutrition, and medical equipment for patients in their home. American HomePatient's common stock is currently traded over-the-counter under the symbols AHOM and AHOME. The Company filed for Chapter 11 reorganization on July 31, 2002, in the U.S. Bankruptcy Court for the Middle District of Tennessee. Glenn B. Rose, Esq., of Harwell Howard Hyne Gabbert & Manner, PC, with offices at 315 Deaderick Street, Suite 1800 Nashville, TN 37238-1800, represents the Company in its chapter 11 cases. AMERICAN PAPER GROUP: Has Until Friday to Declare Lead Bidder ------------------------------------------------------------- Bankruptcy Judge William Bodoh early last week gave American Paper Group until Friday, December 13, 2002, to declare a lead bidder in the Company's efforts to sell its operations, Knight Ridder Business News reports. The report said that while negotiations with MWM Dexter continue, after both parties entered into a Letter of Intent to acquire the Company for about $16 million, Our Sunday Visitor expressed intention to join negotiations to be declared a lead bidder. Our Sunday Visitor, based in Indiana, publishes a Catholic newspaper and church envelopes. American Paper is owned by a New York investment company. AMES DEPARTMENT: Rejects Infotech Outsourcing Contract with IBM --------------------------------------------------------------- Ames Department Stores, Inc., sought and obtained authority from the Southern district of New York to walk away from an amended Strategic Outsourcing Services Contract with International Business Machines Corporation, dated June 1, 1999. The Debtors have notified IBM of their intention to reject the Contract and end IBM's services as of November 13, 2002. In light of the Debtors' decision to wind down operations, the Debtors have no more use of the Contract. Under the Contract, IBM provides information technology services outsourced by the Debtors, including, but not limited to, certain payroll, general ledger, merchandising, and website services, as well as certain maintenance services related thereto. The Debtors pay IBM $2,000,000 a month for the services. The Contract expires on May 31, 2005. (AMES Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., 609/392-0900) AMSCAN HOLDINGS: S&P Ups Corporate Credit Rating to BB- from B+ --------------------------------------------------------------- Standard & Poor's raised its corporate credit rating on party goods manufacturer Amscan Holdings Inc. to 'BB-' from 'B+'. Standard & Poor's also raised its subordinated debt rating on Amscan to 'B' from 'B-'. The ratings were removed from CreditWatch with positive implications, where they were placed on June 14, 2002. At the same time, Standard & Poor's assigned its 'BB-' bank loan rating to Amscan's proposed $200 million senior secured credit facilities due June 15, 2007. The bank loan rating is based on preliminary terms and conditions and is subject to review once full documentation is received. Proceeds from the bank loan will be used to refinance Amscan's existing credit facilities. The company's senior secured debt rating is the same as the corporate credit rating. The senior secured facility comprises a $170 million term loan and a $30 million revolving credit facility, both of which mature in 4.5 years. The outlook is stable. Pro forma for the refinancing, Amscan had about $300 million of total debt outstanding as of Sept. 30, 2002. "The ratings upgrade and CreditWatch resolution reflect the company's improving operational and financial performance as well as Standard & Poor's expectation that credit protection measures will continue to strengthen in the intermediate term," said Standard & Poor's credit analyst David Kang. "In addition, Amscan recently announced that, because of market conditions, it will withdraw plans for an IPO. Instead, the company will refinance its existing credit facilities." The ratings reflect Amscan's participation in the fragmented, highly competitive party goods industry as well as the company's leveraged financial profile. These factors are partially offset by solid industry growth and a diversified product mix. Elmsford, New York-based Amscan designs, manufactures, and distributes party goods and metallic balloons. The wholesale market for these items in the U.S. is estimated to be about $1.8 billion. Amscan is also a leading supplier to the party superstore distribution channel, which accounts for about 33% of decorative party goods sales. This industry has grown steadily during the past several years and is expected to continue exhibiting strong growth due to favorable demographic trends. The industry is very fragmented and includes smaller independents as well as large manufacturers. Amscan's product line is one of the broadest in the industry, and this enables the company to be a single-source supplier to retailers. ANC RENTAL: Committee Turns to FTI for Financial Advice ------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of ANC Rental Corporation, together with its debtor- affiliates, sought and obtained the Delaware Bankruptcy Court's authority to retain FTI Consulting Inc., as its general advisor on financial and accounting matters, effective as of August 30, 2002. FTI purchased PricewaterhouseCoopers' Business Recovery Services practice and related assets and receivables on August 30, 2002. Because of that transaction, the professionals at PwC who were advising the Committee have joined FTI. The Committee has deemed it best to retain FTI rather than retain other firms whose professionals are not privy to the Debtors' Chapter 11 cases. FTI will be retained on the same terms and conditions as in the previous PwC application. PwC will continue to provide consultation services on Information Technology, which is an expertise that FTI does not currently possess. (ANC Rental Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 609/392-0900) ASIA GLOBAL CROSSING: Court Grants Interim Okay to Hire Lazard -------------------------------------------------------------- Asia Global Crossing Ltd., and its debtor-affiliates, seek the Court's authority to employ Lazard Freres & Co. LLC as its financial advisors and investment bankers. The AGX Debtors want Lazard to provide financial advisory and investment banking services during these Chapter 11 cases, all in accordance with the terms of the engagement letter as amended and restated on October 29, 2002, and the related indemnification agreement. Asia Global Crossing CEO Jack Scanlon relates that Lazard is a private investment banking firm with roots dating back to 1848. On a global basis, the firm has 2,700 employees, with 25 offices in 16 countries, including U.S. offices in New York, Chicago, and San Francisco. Lazard's broad range of corporate advisory services includes services pertaining to: -- general financial advice; -- domestic and cross-border mergers and acquisitions; -- divestitures; -- privatization; -- special committee assignments; -- takeover defenses; -- corporate restructurings; and -- strategic partnerships/joint ventures. In addition, Lazard maintains a presence in capital markets and has a significant asset management business. Lazard is also a registered broker-dealer and an investment adviser with the United States Securities and Exchange Commission and is also a member of the New York, American and Chicago Stock Exchanges, the National Association of Securities Dealers and the SIPC. Mr. Scanlon explains that the Debtors chose Lazard as their financial advisors and investment bankers because Lazard and its senior professionals have an excellent reputation for providing high quality financial advisory and investment banking services to debtors and creditors in bankruptcy reorganizations and other debt restructures, and of Lazard's knowledge of the Debtors' financial and business operations. Lazard developed its knowledge of the Debtors' financial and business operations in connection with its assistance to the Debtors in preparing for the commencement of these proceedings, including: A. advising and meeting with management, the Board of Directors and its committees with respect to various financial matters; B. assisting the Debtors and their counsel in evaluating their businesses, assets, and operations; C. assisting the Debtors in negotiating and communicating with the holders of the Debtors' various debt issues with respect to various matters; and D. assisting the Debtors in negotiating and communicating with the holders of various vendor and other claims with respect to various matters. In addition to Lazard's understanding of the Debtors' financial history and business operations and the telecommunications industry, Lazard and its senior professionals have extensive experience in the reorganization and restructuring of troubled companies, both out-of-court and in Chapter 11 proceedings. Lazard's employees have advised debtors, creditors, equity constituencies and government agencies in numerous complex financial reorganizations. Since 1990, these professionals have been involved in over 200 restructurings, representing over $300,000,000,000 in liabilities. "The resources, capabilities, and experience of Lazard in advising the Debtors is crucial to the Debtors' successful restructuring. An experienced financial advisor like Lazard fulfills a critical need that complements the services offered by the Debtors' other restructuring professionals," he adds. Lazard will concentrate its efforts on: -- formulating strategic alternatives; -- negotiating with the Debtors' banks, bondholders, and other creditor constituencies; and -- assisting the Debtors in formulating and implementing a viable Chapter 11 plan of reorganization. Neither law firms nor accounting firms have the experience or resources necessary to do this kind of work. For these reasons, the Debtors require the services of a capable and experienced financial advisory firm like Lazard. Prior to retaining Lazard, Mr. Scanlon relates that the Debtors' senior management interviewed senior personnel of, and considered proposals from, other financial advisory and investment banking firms. The Debtors evaluated each firm on a number of criteria, including: -- the overall restructuring experience of each firm and their professionals; -- the overall financial advisory and investment banking capabilities of the firm; -- the firm's experience in advising large companies in Chapter 11; -- the likely attention of the senior personnel of the firm; and -- the compensation to be charged. After due consideration, the Debtors concluded that Lazard was best qualified to provide financial advisory and investment banking services to the Debtors at a reasonable level of compensation. Lazard is expected to: A. review and analyze the Debtors' businesses, operations and financial projections; B. evaluate the Debtors' potential debt capacity in light of their projected cash flows; C. assist in the determination of an appropriate capital structure for the Debtors; D. assist in the determination of a range of values for the Debtors on a going concern and liquidation basis; E. advise the Debtors on tactics and strategies for negotiating with their various groups of creditors; F. render financial advice to the Debtors and participate in meetings or negotiations with the Creditors in connection with any Restructuring Transaction; G. advise the Debtors on the timing, nature, and terms of any new securities, other consideration or other inducements to be offered to its creditors in connection with any Restructuring Transaction and provide investment banking services reasonably related to the sale and placement of private or public debt and equity; H. assist the Debtors in preparing documentation within Lazard's area of expertise that is required in connection with the implementation of any Restructuring Transaction including preparation of documents associated with any bankruptcy proceeding; I. provide financial advice and assistance to the Debtors in developing and obtaining confirmation of a plan of reorganization, and as the same may be modified from time to time; J. assess the possibilities of bringing in new lenders and investors to replace, repay or settle with any of the creditors; K. advise the Debtors with respect to the structure of and negotiations relating to a Sale Transaction, including any potential sale of all or a portion of the Debtors' assets or securities to, or any merger or consolidation of all or a portion of the Debtors with and into, any other person or entity; L. assist in arranging financing for the Debtors; M. advise and attend meetings of the Debtors' Board of Directors; and N. provide testimony, as necessary, in any proceeding in any judicial forum. Lazard Managing Director Alexander F. Stern, assures the Court that neither Lazard nor any of its professional employees has any connection with or holds any interest adverse to, the Debtors, their significant creditors, or any other party-in- interest, or their attorneys or accountants, or the Office of the United States Trustee or any person employed in the Office of the United States Trustee, in the matters for which Lazard is proposed to be retained. In addition, Lazard is a "disinterested person", as the term is defined in Section 101(14) of the Bankruptcy Code and as required under Section 327(a). However, Lazard represented these parties in unrelated matters: -- Microsoft Corp., -- CNET Networks Inc., -- Yahoo! Inc., -- Wyndham International, -- Starwoods Hotels & Resorts Worldwide, -- Arthur Andersen LLP, -- Cravath Swaine & Moore, -- Friedman Kaplan Seiler & Adelman LLP, -- Gibson Dunn & Crutcher, -- Minter Ellison, -- Richards Layton & Finger, -- Sullivan & Cromwell, -- Swidler Berlin Shereff Friedman LLP, -- Exodus Communications, -- Mellon Bank Corp., -- JP Morgan Chase, and -- Credit Suisse First Boston. The Debtors will compensate Lazard these fees: A. Monthly Financial Advisory Fees: The Debtors will pay Lazard a $250,000 monthly financial advisory fee for each month of Lazard's engagement commencing November 2002; provided, however, that if Lazard continues to act as investment banker to the Debtors following the closing of a Restructuring Transaction or Sale Transaction, the monthly financial advisory fee for any months after closing will be $100,000. The monthly financial advisory fee will be payable in advance on the 15th day of each month during the term of Lazard's engagement. All monthly financial advisory fees payable for the months of November 2002 and December 2002 will be credited against the Restructuring Transaction Fee or Sale Transaction Fee, if payable; B. Restructuring Transaction Fee: In the event that the Debtors consummate a Restructuring Transaction, the Debtors will pay Lazard a $3,500,000 Restructuring Transaction fee, $1,000,000 of which will be payable promptly on the earliest to occur of the: -- signing of a definitive agreement with respect to a Restructuring Transaction, -- public announcement of a Restructuring Transaction, and -- bankruptcy court approval of a Restructuring Transaction. The remaining $2,500,000 will be payable promptly after the closing of the Restructuring Transaction. Payment of the Restructuring Transaction Fee will be credited against any Sale Transaction Fee, which subsequently becomes payable. To the extent that monthly financial advisory fees with respect to the months of November and December 2002 become payable after payment of the first portion of the Restructuring Transaction Fee, these fees will accrue but need not be paid to Lazard as these fees are creditable against the Restructuring Transaction Fee. In the event that the first portion of the Restructuring Transaction Fee is paid to Lazard and the agreement to enter into the Restructuring Transaction is terminated prior to the consummation of the transactions, Lazard will return this portion of the Restructuring Transaction Fee to the Debtors promptly following public announcement by the Debtors of the termination, less any accrued monthly financial advisory fees with respect to November and December 2002. For the avoidance of any doubt, no monthly financial advisory fees paid to Lazard, other than those for the months of November and December 2002, will be credited against the Restructuring Transaction Fee; and C. Sale Transaction Fee: In the event that the Debtors consummate a Sale Transaction, the Debtors will pay Lazard a $3,500,000 Sale Transaction fee, $1,000,000 of which will be payable promptly on the earliest to occur of the: -- signing of a definitive agreement with respect to a Sale Transaction, -- public announcement of a Sale Transaction, and -- bankruptcy court approval of a Sale Transaction. The remaining $2,500,000 of the fee will be payable promptly after the closing of the Sale Transaction. Payment of the Sale Transaction Fee will be credited against any Restructuring Transaction Fee, which subsequently becomes payable. To the extent that monthly financial advisory fees with respect to the months of November and December 2002 become payable after payment of the first portion of the Sale Transaction Fee, these fees will accrue but need not be paid to Lazard as these fees are creditable against the Sale Transaction Fee. In the event that the first portion of the Sale Transaction Fee is paid to Lazard and the agreement to enter into the Sale Transaction is terminated prior to the consummation of the transactions, Lazard will return the portion of the Sale Transaction Fee to the Debtors promptly following public announcement by the Debtors of the termination, less any accrued monthly financial advisory fees with respect to November and December 2002. For the avoidance of any doubt, no monthly financial advisory fees paid to Lazard, other than those for the months of November and December 2002, will be credited against the Sale Transaction Fee. Lazard also will seek reimbursement for reasonable out-of-pocket expenses, and other fees and expenses, including reasonable expenses of counsel, if any. Lazard will follow its customary expense reimbursement guidelines and practices in seeking expense reimbursement from the Debtors. The Debtors acknowledge and agree that Lazard's restructuring expertise, as well as its capital markets knowledge, financing skills and mergers and acquisitions capabilities, some or all of which may be required by the Debtors during the term of Lazard's engagement, were important factors in determining the amount of the Monthly Financial Advisory Fees, Restructuring Transaction Fee, and Sale Transaction Fee and that the ultimate benefit to the Debtors of Lazard's services likely could not be measured merely by reference to the number of hours to be expended by Lazard's professionals in the performance of these services. Mr. Scanlon explains that the contingent Restructuring Transaction Fee and Sale Transaction Fee have been agreed on by the parties in anticipation that: -- a substantial commitment of professional time and effort will be required of Lazard and its professionals; -- the commitment may foreclose other opportunities for Lazard; and -- the actual time and commitment required of Lazard and its professionals to perform services may vary substantially from week to week or month to month, creating "peak load" issues for the firm. The Debtors believe that the fee structure and indemnification provisions are reasonable terms and conditions of employment in light of: -- industry practice; -- market rates charged for comparable services both in and out of the Chapter 11 context; -- Lazard's substantial experience with respect to financial advisory and investment banking services; and -- the nature and scope of work already performed by Lazard prior to the Petition Date and to be performed by Lazard in these Chapter 11 cases. Pursuant to the Engagement Letter between the Special Committee of the Board of Directors of Asia Global Crossing Ltd. and Lazard dated December 4, 2001, and the Engagement Letter between Asia Global Crossing Ltd. and Lazard dated February 11, 2002, Mr. Scanlon informs the Court that the Debtors have paid $3,750,000 to Lazard, which includes the portion of the Sale Transaction Fee payable after the announcement of a Sale Transaction, and the Monthly Advisory Fees for December 2001 through November 2002. In addition, the Debtors have paid $415,512.43 to Lazard, as reimbursement for expenses incurred by Lazard in connection with its representation of the Debtors from December 2001 through November 13, 2002, and prepayment for postpetition expenses. * * * Judge Bernstein authorizes the Debtors, effective November 17, 2002, to employ Lazard on an interim basis pending a final hearing as their investment bankers and financial advisors. To the extent accrued during this interim retention, Lazard will receive only: -- its monthly compensation as specified in the Lazard Agreement; and -- reimbursement of its expenses. The Restructuring Transaction Fee and the Sale Transaction Fee will be the subject of a final hearing on Lazard's retention; provided that, if no timely objections to Lazard's retention are filed, Lazard will receive the monthly compensation and the Restructuring Transaction Fee or the Sale Transaction Fee, which in each case will not be subject to challenge except under the standard of review set forth in Section 328(a). Objections to the Debtors' application must be filed with the Court on or before December 13, 2002. If timely objections are received, there will be a hearing held on December 18, 2002, at 10:00 a.m. (Global Crossing Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., 609/392-0900) DebtTraders reports that Asia Global Crossing's 13.375% bonds due 2010 (AGCX10USN1) are trading between 11.25 and 12.25 . See http://www.debttraders.com/price.cfm?dt_sec_ticker=AGCX10USN1 for real-time bond pricing. ASPECT COMM: Ratings Still on Watch Pending $50M Preferreds Sale ---------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Aspect Communication Corp. remain on CreditWatch with negative implications where they were placed on October 25, 2002. Standard & Poor's said it will affirm Aspect's corporate credit rating at 'B' and its subordinated debt ratings at 'CCC+' following the completion of the sale of $50 million of preferred convertible stock to a private investor. Completion of the sale, subject to SEC and shareholder approval, is expected before the end of the March 31, 2003, quarter. At that point, Standard & Poor's expects to remove the ratings from CreditWatch, and the outlook will be negative. San Jose, California-based Aspect Communications is a provider of software-based call center and customer relationship management solutions. Total debt outstanding was $177 million at Sept. 30, 2002. The pending affirmation of the rating is based on Standard & Poor's assessment of Aspect's capacity to meet the put option on its subordinated convertible debentures in August 2003. Bondholders have the right to put the bonds back to Aspect for settlement in cash or stock or a combination of the two at an accreted value of $129 million based on the amount of bonds outstanding as of September 30, 2002. Aspect has suffered from a difficult purchasing enviroment and depressed profitability, combined with limited financial flexibility. "We do not expect Aspect's operatiang performance to improve significantly until enterprise spending recovers," said Standard & Poor's credit analyst Joshua Davis. BASIS100: Reduces Corp. Overhead Expenses by CDN$3-Mil Annually --------------------------------------------------------------- Basis100 Inc. (TSX: BAS), a technology solutions provider for the financial services industry, announced it has reduced its corporate expenses by $3 million (Cdn) annually and has restructured its executive office with the focus on growth in the USA market. Changes to the Board of Directors Effective immediately the Board of Directors of Basis100 is pleased to announce the appointment of two new directors and regretfully announces the resignation of one existing director. Joining the Board of Directors are John L. Albright of J. L. Albright Venture Partners and Joseph J. Murin of Basis100. Prior to the founding of J. L. Albright Venture Partners in 1996, Mr. Albright held senior positions with Jefferson Partners, First City Capital Markets and Central Capital Corporation. Mr. Albright is a Chartered Financial Analyst and received his Bachelor of Business Administration degree from the Schulich School of Business at York University. Mr. Albright serves as a director of Descartes Systems Group Inc., Indian Motorcycle Company, Q9 Networks Inc., and Triple G Systems Group Inc. Also joining the Board of Directors is Joseph J. Murin as a director and senior officer of Basis100. Mr. Murin has been acting as Chief Operating Officer of Basis since December of 2001 and brings his operational experience and USA mortgage services market experience to Basis100. "The appointment of the new directors, including the recent appointment of Mr. Kenneth Rotman, strengthens Basis100's Board of Directors with operational and capital markets expertise" states Gary Bartholomew, Chairman of Basis100. Regretfully, Basis100 announces the resignation of Ivan Wahl as director. Mr. Wahl provided tremendous input into the growth of Basis100 and its strategy and will pursue other full time responsibilities. The Board of Directors of Basis100 Inc., now consists of Gary Bartholomew, Chairman, Joseph Murin, Jason Smith, Michael Johnston, Victor Hum, Burt Napier, John Albright, and Ken Rotman. Changes to the Executive Office Effective immediately Joseph Murin will assume the responsibility of Chief Executive Officer of Basis100. Mr. Murin will focus on the execution of the strategy and operations of Basis100. Gary Bartholomew will act in a full time capacity as Chairman of the Board, focusing on strategy, capital markets relations, and transitioning all operational responsibilities to Joseph Murin. With the increased focus on the USA market, the company will relocate certain of its financial and administrative functions to the USA. Consequently, Lance McIntosh, Chief Financial Officer, has tendered his resignation, but has agreed to assist Basis100 with certain transitional matters. Mr. James Pavlonnis of Jacksonville FL, will assume the position of interim CFO of Basis100. Mr. Pavlonnis has been acting as VP Finance for Basis100 Corp., operating in Jacksonville FL. "It is important to have USA based expertise around the execution of the USA strategy at the most senior levels of the company" states Mr. Murin, CEO Basis100, "Having worked with Mr. Pavlonnis for the past 15 years directly in the financial services market, I know he brings to the position not only direct market experience, but experience in financial management in both public and private companies". Changes to the Corporate Administration Effective immediately, Basis100 will be terminating a number of positions in Canada to reduce corporate G&A expenses. Existing staff in Toronto, Pittsburgh and Jacksonville will assume these functions going forward. Overall, these reductions will reduce ongoing operating expenses by approximately $3 million (Cdn) annually. One Time Restructuring Charge Basis100 expects to take a one time restructuring charge for severances and vacation pay of up to $400,000 (Cdn) in the 4th quarter of 2002. Progress on the Sales of the EFA Software Assets The process of selling the assets of EFA Software is underway and we expect to see this process concluded in January 2003, as indicated in the December 2, 2002 press release. The company is reviewing offers and is continuing the due diligence process with interested parties. Corporate Matters On a separate matter, Basis100 Inc. confirmed that its wholly- owned subsidiaries, e-Net Canada Financial Services Inc., listed as a holding company in the Annual Information Form dated May 21, 2002 and Online Mortgage Explorer Inc., listed as an operating company in the Annual Information Form dated May 21, 2002, are both inactive. Basis100 Inc. is a technology solutions provider for the financial services industry, which enables businesses to build, distribute, buy and sell products and services in more efficient and innovative ways. Basis100's lines of business include: Lending Solutions for consumer credit, mortgage origination and processing; Data Warehousing and Analytics Solutions for automated property valuations, property data-warehousing, data products and analytics support; and Capital Markets Solutions for fixed income trading. For more information about Basis100, visit http://www.Basis100.com BEST BUY: Will Publish Third Quarter Earnings on December 17 ------------------------------------------------------------ Best Buy Co., Inc., (NYSE:BBY) reported a 16-percent increase in total sales to $5.50 billion for the Company's fiscal 2003 third quarter, which ended on Nov. 30, 2002. Total sales were $4.76 billion for the Company's fiscal 2002 third quarter, which ended on Dec. 1, 2001. The double-digit improvement reflected the addition of 68 U.S. Best Buy stores in the past 12 months as well as the inclusion of a full quarter of sales from Future Shop, which was acquired on Nov. 4, 2001. The Company's third-quarter comparable store sales declined 0.3 percent, compared with the Company's guidance of no change. The late Thanksgiving this year, which placed one less week of holiday sales in the fiscal third quarter, negatively impacted the quarter's comparable store sales by approximately 1.5 percentage points. Record Thanksgiving weekend sales contributed to a quarterly comparable store sales gain at Best Buy stores of 0.7 percent for the fiscal third quarter, on top of a 1.6-percent gain for the third quarter of fiscal 2002. At Musicland stores - which include Media Play, Sam Goody and Suncoast stores - comparable store sales decreased 10.7 percent for the fiscal third quarter. Canada-based Future Shop stores posted a comparable store sales gain of 3.8 percent in the quarter. Magnolia Hi-Fi's comparable store sales gain was in the low single digits. "Comparable store sales on Thanksgiving weekend were strong, as throngs of consumers snapped up digital products," said Brad Anderson, vice chairman and CEO of Best Buy. "With third-quarter sales in line with our guidance, we expect third-quarter earnings to be in the top half of the range we initially communicated in September." Anderson added, "Our employees responded effectively to a very challenging environment in the third quarter. Our ability to keep pace with the strong performance of last year is a testament to our employees' continual ability to find compelling solutions for our customers." Year-to-date, total sales rose 20 percent to $15.09 billion, compared with $12.62 billion for the first three quarters of fiscal 2002. Drivers of the increase included new stores, the acquisition of Future Shop and a comparable store sales gain of 2.3 percent. The consumer electronics category increased as a percentage of total sales during the third quarter, compared with that of the prior year's third quarter, reflecting double-digit comparable store sales gains in televisions, digital cameras, satellite systems and DVD hardware. In addition, Best Buy and Future Shop stores added to their assortments of digital, plasma and LCD televisions during the quarter in response to increased customer demand. Sales in the home office category continued to decline in the mix due to weakness in sales of desktop computers, although sales of notebook computers increased in the mix, as did sales of computer upgrades such as flat-panel monitors and networking cards. Wireless communications and MP3 player sales also increased in the mix. In the entertainment software category, double-digit gains in sales of DVD movies and higher sales of video gaming more than offset continued declines in sales of prerecorded music. The appliances category decreased in the sales mix in the third quarter, as comparable store sales declined with heightened competition. Digital products - which include DVD hardware and software, digital cameras and camcorders, digital TVs, wireless communication devices and digital broadcast systems - posted double-digit comparable stores sales gains and comprised 23 percent of sales in the third quarter, up from 17 percent in the same period last year. The Company opened 31 Best Buy U.S. stores during its fiscal third quarter. During the quarter, the Company opened four Future Shop stores in Canada and successfully launched seven Best Buy stores in the greater Toronto market. In addition, it opened a net of seven Sam Goody stores (which included the net opening of 10 small market Sam Goody stores) and added five Suncoast stores. Finally, the Company opened three Magnolia Hi- Fi stores during the quarter. Total retail square footage increased in the quarter to 35.6 million square feet, an increase of 10 percent compared with the end of third quarter of fiscal 2002. At the end of the fiscal third quarter, the Company operated 546 Best Buy U.S. stores, eight Best Buy Canada stores, 104 Future Shop stores, 19 Magnolia Hi-Fi stores, 76 Media Play stores, 838 Sam Goody stores and 404 Suncoast stores. Comparable Store Sales Rise at Best Buy, Future Shop Stores Comparable store sales for the Company's domestic segment, which includes all operations exclusive of international operations, declined 0.3 percent for the fiscal third quarter, reflecting slight gains at Best Buy stores offset by a decline at Musicland stores. The fastest-growing product category at Best Buy stores was consumer electronics, including digital televisions, large- screen TVs and digital cameras. The entertainment software category increased modestly, as gains in sales of DVD software and video gaming more than offset declines in sales of prerecorded music. The home office category at Best Buy stores declined, reflecting continued weakness in sales of desktop computers. However, sales of networking cards, wireless communications and notebook computers increased in the mix. Online sales continued to be a contributor to the third quarter's comparable store sales gain. Online sales benefited from a free shipping offer, expanded assortments and site enhancements, which created a better consumer experience. Total third-quarter sales at domestic Best Buy stores increased 12 percent to $4.68 billion, reflecting new stores as well as the comparable store sales gain. The comparable store sales decline at Musicland stores resulted from continued softness in prerecorded music sales and heightened competitive activity. Sales of DVD software and video gaming continued to increase as a percentage of total sales. The rate of sales growth for these products slowed during the quarter, compared to higher growth rates in fiscal 2002, when DVD software and video gaming product lines were expanded primarily at Sam Goody stores. Sales of prerecorded music and VHS movies declined in the mix. Total sales at Musicland stores were $370 million for the quarter, an 11-percent decline from total sales of $420 million in the third quarter of fiscal 2002. A successful launch of the Canadian Best Buy stores in the third quarter was one of the highlights for the international segment. Despite a more cautious Canadian consumer and increased competition from other retailers, the international segment posted a pro forma comparable store sales increase of 3.8 percent (based on Canadian dollars), on top of a pro forma 11.2- percent increase in the prior year's period. The primary drivers were increased sales of consumer electronics - notably digital televisions and digital cameras. Sales of notebook computers, video gaming and DVD movies also rose. The international segment's third-quarter sales totaled approximately $420 million, an increase of 19 percent compared with the prior year's pro forma third-quarter sales of $350 million, reflecting the opening of new stores as well as the comparable store sales gain. Third-Quarter Earnings Expected to Exceed Consensus "Comparable store sales are in line with our prior guidance, and despite a more promotional environment, operating margins held up well," said Darren Jackson, executive vice president and CFO of Best Buy. "We expect earnings for the third quarter of $0.24 to $0.27 per diluted share, based on both comparable store sales and operating margins that were essentially even with last year." This updated EPS range compares to the current analysts' third-quarter consensus estimate of $0.22 and actual results of $0.25 in the prior year's third quarter. Best Buy is scheduled to release its fiscal third-quarter earnings on Tuesday, Dec. 17. Its earnings conference call is scheduled to begin at 10 a.m. EDT and will be available on its Web site both live and after the call, at http://www.bestbuy.com Investors may access the call by clicking on "Investor Relations." Minneapolis-based Best Buy Co., Inc., (NYSE:BBY) is North America's No. 1 specialty retailer of consumer electronics, personal computers, entertainment software and appliances. The Company operates retail stores and commercial web sites under the names: Best Buy (BestBuy.com), Future Shop (FutureShop.ca), Magnolia Hi-Fi (MagnoliaHi-Fi.com), Media Play (MediaPlay.com), Sam Goody (SamGoody.com) and Suncoast (Suncoast.com). The Company reaches consumers through nearly 2,000 retail stores in North America, Puerto Rico and the U.S. Virgin Islands. Best Buy's 0.684% bonds due 2021 are currently trading at about 65 cents-on-the-dollar. CALIFORNIA WESTERN: Commences Chapter 11 Bankruptcy Proceeding -------------------------------------------------------------- In a last-ditch effort to save the 117-year-old historic "Skunk Train," the California Western Railroad Board of Directors has filed for reorganization under Chapter 11 of the federal bankruptcy regulations. In the meantime, railroad operations will continue on a limited winter schedule with no interruption expected for planned special events, according to California Western Railroad Board Chairman John Mayfield. "The Skunk Train is a huge asset for the county that carries an average of 65,000 tourist passengers each year," said Mayfield. "However, passenger revenues alone are not enough to sustain the operation." When Mayfield and other local businessmen purchased the railroad five years ago, it carried passengers by day and lumber by night. "We would pull more than 600 cars of freight annually," he said. Financial problems for the Skunk Train began about four years ago when the Northwestern Pacific Railroad, source of the freight business, terminated its operations. While not a large amount of freight by rail industry standards, it was enough to help service the railroad's debt and pay some operational costs, according to Mayfield. He also said that Board members implemented a number of measures over the past few years to improve the Skunk's financial situation, including a stock offering, none of it enough to offset lost freight revenues. The skunk, so named for the pungent order of its early gasoline- powered cars, is one of about a dozen historic railroads still operating in the U.S. It also is America's last rail mail carrier, delivering mail to residents along its 40-mile, redwood-lined route between Fort Bragg and Willits. Mayfield, a former chairman of the Mendocino County Board of Supervisors, said he and a group of local businessmen purchased the railroad "to protect a community asset and give back to the community. We knew it wasn't going to make a lot of money. We just wanted to keep it going." CALIFORNIA WESTERN RAILROAD: Voluntary Chapter 11 Case Summary -------------------------------------------------------------- Debtor: California Western Railroad, Inc. dba Skunk Train PO Box 907 Fort Bragg, California 95437 Bankruptcy Case No.: 02-12924 Chapter 11 Petition Date: December 3, 2002 Court: Northern District of California (Santa Rosa) Judge: Alan Jaroslovsky Debtor's Counsel: Philip M. Arnot, Esq. Philip M. Arnot, Inc. 307 N Street Eureka, CA 95501-0646 Tel: 707-443-6386 CARESIDE INC: Palm Finance Extends $2 Million DIP Financing ----------------------------------------------------------- Careside, Inc., (AMEX:CSA) a provider of point-of-care blood analysis instrumentation, has received approval from the U.S. Bankruptcy Court Central District of California to receive up to $2 million in Debtor-In-Possession financing from Palm Finance. The Company can obtain the financing from Palm subject to achieving certain reorganization milestones and other conditions. These funds will be used to supplement the Company's cash flow during the Chapter 11 proceedings and resume business operations. Careside had previously announced that it had filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Central District of California. Chapter 11 provides a debtor an opportunity to continue its business operations and to serve its customers while it reorganizes. "We are very pleased about the support of Palm Finance," said W. Vickery Stoughton, chief executive officer of Careside. "The financing proposal submitted to the court will insure that the Company has the resources to serve current and future customers as it builds a successful company. The next steps for Careside are to work the company out of Chapter 11 by settling with the creditors and building the sales and revenue base of the company while maintaining ongoing support of our current customers." Careside, Inc., markets a proprietary blood testing system called Careside Analyzer. The Careside Analyzer provides a cost- effective and efficient means of measuring blood chemistry, electrochemistry, and coagulation function near the patient by producing accurate test results within 15 minutes. Careside, Inc., is one of the world's leading developers of advanced point-of-care blood testing technology. CASELLA WASTE: Generates $25.8MM of EBITDA in 2nd Quarter 2003 -------------------------------------------------------------- Casella Waste Systems, Inc., (Nasdaq: CWST) whose $300 million credit facilities are currently rated by Standard & Poor's at 'BB-', reported financial results for the second quarter of its 2003 fiscal year. For the quarter ended October 31, 2002, the company reported earnings before interest, taxes, depreciation and amortization and minority interest (EBITDA) of $25.8 million; revenue for the quarter was $114.5 million. Pro forma net income for the quarter was $3.2 million. For the six months ended October 31, 2002, EBITDA was $49.6 million; revenues were $230.4 million and pro forma net income was $5.1 million. "Our constant focus on the basic operational excellence of our core business, as unglamorous as it may seem, continues to be the single largest factor in our successful return to consistent, predictable performance," John W. Casella, chairman and chief executive officer of Casella Waste Systems, said. "Clearly, we are seeking to maximize the value of the assets we own while beginning to pursue deliberate, responsible growth opportunities. "We remain confident through the first six months of our fiscal year that we are on track to meet our 2003 targets," Casella said. Net income for the three-month period is reported pro forma, eliminating $1.0 million in equity income from an eminent domain settlement; for the six month period, net income is reported pro forma to reflect the foregoing and the charge of $62.8 million from a change in accounting principle following the company's adoption of SFAS 142. Export Brokerage Business Divested In other news for the quarter, the company announced that it has transferred its export recyclable material brokerage to a group of former employees who had been responsible for the operation of that business. As a result, the company will place the business on its balance sheet as a net asset under contractual obligation. "Although we have transferred this asset, we have put in place an agreement with the new owners allowing the company to retain access to the export market," Casella said. "This allows us to continue to build in overall financial stability." Casella Waste Systems, headquartered in Rutland, Vermont, is a regional, integrated, non-hazardous solid waste services company that provides collection, transfer, disposal and recycling services primarily in the northeastern United States. Visit the company's Web site at http://www.casella.comfor more information on the Company. CENTERPOINT: Declares Partial Texas Genco Share Distribution ------------------------------------------------------------ CenterPoint Energy, Inc.'s (NYSE: CNP) Board of Directors approved the distribution of approximately 19 percent of the 80 million outstanding shares of common stock of its wholly owned subsidiary, Texas Genco Holdings, Inc., to CenterPoint Energy's shareholders. The stock distribution, expected to be paid on January 6, 2003, will be taxable to shareholders. "This partial stock distribution to our shareholders is a critical step in the process being used to ultimately recover the value of our generation assets and our stranded costs," said David M. McClanahan, president and chief executive officer of CenterPoint Energy. "The publicly traded common stock of Texas Genco will be used to determine the market value of the generating assets and to quantify our stranded costs in the 2004 true-up proceeding by the Texas Public Utility Commission. This method is prescribed by Senate Bill 7, the law enacted by the Texas legislature in 1999 that deregulated the electric market." Each CenterPoint Energy shareholder will receive approximately one share of Texas Genco common stock for every 20 shares of CenterPoint Energy common stock owned as of the record date, December 20, 2002, unless the shareholder disposes of the right to receive the Texas Genco shares prior to the distribution date. The actual distribution ratio will be determined by dividing the number of Texas Genco shares to be distributed by the number of shares of CenterPoint Energy common stock outstanding as of the record date. Cash payments for fractional shares will be made following the distribution. Payment of the distribution is conditional upon the Securities and Exchange Commission declaring Texas Genco's Form 10 registration statement relating to its common stock effective under the Securities Exchange Act of 1934. Texas Genco owns 14,175 MW of electric generation in Texas, fueled by natural gas, coal, lignite and nuclear fuels. After the distribution, Texas Genco's shares will be listed on the New York Stock Exchange under the stock ticker symbol "TGN". Following the distribution, it is expected that Texas Genco will establish a dividend policy under which it will pay an initial quarterly cash dividend of $0.25 per share. The company will mail an information statement in mid-December to all its shareholders of record that will include information about the distribution, Texas Genco and its business and operations. More details about Texas Genco are available at http://www.CenterPointEnergy.comor http://www.txgenco.com CenterPoint Energy, Inc. -- whose credit ratings and the ratings of its gas distribution subsidiary have been downgraded by Moody's Investors Service to Ba1 from Baa2 -- is a domestic energy delivery company that includes electric transmission and distribution, natural gas distribution and sales, interstate pipeline and gathering operations, and more than 14,000 megawatts of power generation in Texas. The company serves nearly five million customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Missouri, Oklahoma, and Texas. Assets total nearly $19 billion. CenterPoint Energy became the new holding company for the regulated operations of the former Reliant Energy, Incorporated in August 2002. With more than 11,000 employees, CenterPoint Energy and its predecessor companies have been in business for more than 130 years. CEYONIQ INC: Initiates Voluntary Financial Reorganization --------------------------------------------------------- CEYONIQ, Inc., said that in order to facilitate a financial restructuring, the company has filed a voluntary petition for reorganization. CEYONIQ said that the filing would allow the company to continue business operations as usual while the management team works on restructuring its finances and improving the company's long-term financial health. CEYONIQ is a provider of software solutions and services that help businesses to increase the value of their customer relationships. To enhance its liquidity, CEYONIQ has obtained a commitment for secured debtor-in-possession (DIP) financing followed by an asset purchase. After court review and approval, the post- petition financing will provide CEYONIQ with any necessary funding to support its customer and employee responsibilities, make post-petition payments due to suppliers in the ordinary course of business, as well as fund its ongoing operating needs during the restructuring process. With nearly 2,000 ongoing customer contracts, CEYONIQ's goal is to provide full support for customers throughout this process, which is expected to be finalized within approximately two to three months. "This financial reorganization does not affect our ongoing operations, customers, or employees. We expect there to be no changes in how we operate or communicate with our customers," said David E. MacWhorter, president and chief executive officer of CEYONIQ, Inc. "Our Customer Support team is fully staffed and available to answer customers' questions, and our Services and Implementation teams stand ready to guide customers through on-site deployment of their solutions. Our Research and Development team continues to work on future solutions to meet our customers' ongoing business needs. And lastly, our Sales organization remains in place and ready to meet their requests. In a very real sense, it's business as usual from us," said MacWhorter. CEYONIQ, Inc., was formerly a wholly owned subsidiary of CEYONIQ AG of Bielefeld, Germany. CEYONIQ AG unexpectedly filed for insolvency in Germany in April 2002. Shortly thereafter, the two founders of the German company were incarcerated due to allegations of fraud, and the U.S. operation was sold to a private investor. MacWhorter stressed, "Since then, we have diligently worked in an attempt to renegotiate loan agreements and to manage the financial liability stemming from the German insolvency and from the turbulent economic marketplace. The goal of our management team's efforts was to avoid having to resort to the financial restructuring process." He continued, "However, after careful consideration and the exploration of many other options, we concluded that financial reorganization is the best course for our customers, creditors and employees. This will enable our company to emerge from the financial reorganization process much stronger, better positioned and more profitable than it is today." MacWhorter emphasized, "Over the last several months, CEYONIQ has taken a number of steps to streamline operations, and we have made great strides. We have established fast-acting, functional teams, allowing our employees to focus more on providing our clients with an even higher quality level of service and business solutions than ever before." MacWhorter added, "We have optimally streamlined our business workforce to most effectively support our customers, and we do not anticipate any additional reductions as a result of this process. With many of our operational improvements already in place, CEYONIQ is well positioned to emerge from financial restructuring as a strong, profitable company like other companies such as Macy's and 7-11 Stores." Consistent with CEYONIQ's commitment to the marketplace, the Company has completed several long-range initiatives designed to support its business growth: * In November of this year, CEYONIQ launched its USA PATRIOT Act Compliance Solution. The company's solution provides an efficient and secure means to capture and store sensitive customer identification documentation that is at risk for identity theft and scrutiny under the Equal Credit Opportunity Act. * In September 2002, CEYONIQ relocated its fully staffed Customer Service organization to a new Customer Service facility located in Louisville, Colorado to better serve our customers. MacWhorter concluded, "We appreciate the ongoing loyalty and encouragement from our customers, employees, partners, and suppliers. Their dedication, support, and faith in our solutions, services and team are critical to our success, and for that I thank them. Our management team, employees, and I are committed to making this financial reorganization successful and leading our North American business operations toward a brighter future." CEYONIQ will provide additional communications regarding the company's successful progression through the financial reorganization process to all interested parties. The company has set up an information section on its website, which will be regularly updated, at http://us.ceyoniq.com/finanreorg If you have a specific question regarding the financial reorganization process, you may also call 1-800-860-2260. CEYONIQ, Inc., is a provider of software solutions and services that help companies to increase the value of their customer relationships. CEYONIQ's integrated solution portfolio includes USA PATRIOT Act Compliance, document and content management, imaging, loan process automation, signature card verification, statement services, and deposit operations solutions. With a proven track record of more than 2,000 customer contracts in North America, the company's goal is to enable the success of organizations by providing financial solutions that deliver the right information to the right people at the right time. To learn more about CEYONIQ, Inc., and its solutions, visit its Web site at http://us.ceyoniq.com CEYONIQ INC.: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Ceyoniq Inc. 13900 Lincoln Park Drive Suite 300 Herndon, VA 20171 Bankruptcy Case No.: 02-85887-RGM Chapter 11 Petition Date: December 03, 2002 Court: Eastern District of Virginia (Alexandria) Judge: Robert G. Mayer Debtor's Counsel: John Russell Bollinger, Esq. LeClair Ryan, P.C. 707 East Main St., Suite 1100 Richmond, VA 23219 (804) 916-7106 Email: jbollinger@leclairryan.com Stephen Keith Gallagher, Esq. LeClair Ryan 225 Reineckers Lane, Suite 290 Alexandria, VA 22314 (703)684-8007 Fax : (703)684-8075 Email: sgallagher@leclairryan.com Estimated Assets: $1-10 Million Estimated Debts: $10-50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Banc of America Trade Debt $760,553 Securities, LLC 800 Market St. St. Louis, MO 63150-3446 617-856-8900 Bisys Document Solutions Trade Debt $695,758 2188 Parkway Lake Drive Birmingham, AL 35244 800-849-8061 Herndon Office LLC Trade Debt $577,302 13900 Lincoln Park Drive Herndon, VA 20171 703-709-3555 Richard McMahon Severance $310,000 22 Glenhurst Court North Potomac, MD 20878 301-869-4639 Tom Giampa Severance $287,500 6593 Rapidan Court Warrenton, VA 20187 540-349-4518 Ingram Micro Trade Debt $130,502 Metzler Realty Advisors Trade Debt $113,370 Gates/Arrow Distributing Trade Debt $95,483 IBM Italia spa Cyprus Branch Trade Debt $66,476 Pricewaterhouse Coopers LLP Trade Debt $50,395 Siemens Trade Debt $46,313 Eastman Kodak Co. Trade Debt $36,409 Prevlent Software, Inc. Trade Debt $32,000 Pascarelli Smith LLC Trade Debt $30,000 Siebel System Trade Debt $27,875 Datatrade LLC Trade Debt $24,538 PC Connection Inc. Trade Debt $24,265 Crossroads Systems Inc. Trade Debt $24,116 American Arbitration Trade Debt $21,895 Association Vertex, Inc. Trade Debt $21,840 CHESAPEAKE ENERGY: Fitch Affirms Senior Unsecured Notes at BB- -------------------------------------------------------------- Fitch Ratings affirmed the 'BB-' rating of Chesapeake Energy's senior unsecured notes. Fitch also affirms the 'BB+' rating on Chesapeake's senior secured bank facility and the 'B' rating on the convertible preferred stock. The Rating Outlook for Chesapeake is Stable. Chesapeake recently announced that it had agreed to acquire $300 million of Mid-Continent gas assets through an acquisition of a wholly-owned subsidiary of Tulsa-based ONEOK. Chesapeake will fund the transaction with $150 million of equity and upon completion of that component it will issue $150 million of debt. The ONEOK acquisition fits well with CHK's existing Mid- Continent assets and with Chesapeake's business strategy of creating value by acquiring and developing low-cost, long-lived natural gas assets in the Mid-Continent region of the U.S. This transaction will increase its proved reserves by 8% to almost 2.5 tcfe and its production by 12% to over 565,000 mcfe per day. Since Dec. 31, 2001, CHK has increased its reserve base by approximately 40%. The ratings reflect the conservative nature in which the transaction is being funded, Chesapeake's long-lived, focused natural gas reserve base and its modest credit profile. Chesapeake's proved reserves, pro forma for the latest acquisition are nearly 2.5 Tcfe, which provide a reserve life of close to 11 years. Additionally, approximately 90% of Chesapeake's proved reserves are natural gas and are primarily located in the very familiar Mid Continent region. Fitch expects Chesapeake to achieve synergies through its recent acquisition and to expand upon the current production from those properties. Chesapeake has generated credit metrics consistent with its rating over the last 12 months. Coverages, as measured by EBITDA-to-interest, are roughly than 4.5 times for the latest 12-month period, and debt-to-EBITDA is approximately 3.0x. Chesapeake's present debt on both an absolute ($1.8 billion pro forma for the proposed offering) and a proven barrel of oil equivalent ($4.28 per BOE pro forma for acquisitions and bond offering) basis is high for the rating. Fitch expects these measures to improve in the intermediate term from internally generated cash flow. Chesapeake is an Oklahoma City-based company whose primary focus is the exploration, production and development of natural gas. Chesapeake began operations in 1989 and completed its initial public offering in 1993. Its proved reserves are predominantly natural gas (91%), mostly proved developed (71%), and are based in North America. Its operations are concentrated in the Mid- Continent (86% of assets and 75% of production), the Gulf Coast and the Permian Basin. Chesapeake has been active in increasing its natural gas reserve base by making acquisitions within its core areas of operation as well as through the drillbit. CHESAPEAKE ENERGY: Commencing $150M Private Senior Note Offering -------------------------------------------------------------- Chesapeake Energy Corporation (NYSE: CHK) intends to commence an offering of $150 million of a new issue of senior notes due 2014 through a private placement eligible for resale under Rule 144A. The offering of the notes, which is subject to market and other conditions, will be made within the United States only to qualified institutional buyers, and outside the United States to non-U.S. investors. Chesapeake intends to use the net proceeds of the offering to finance, in part, the recently announced acquisition of natural gas properties from ONEOK, Inc., which is scheduled to close in January 2003, or in the event the ONEOK acquisition is not consummated, proceeds will be used for general corporate purposes including possible future acquisitions. Chesapeake Energy Corporation is one of the 10 largest independent natural gas producers in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and producing property acquisitions in the Mid-Continent region of the United States. * * * As reported in Troubled Company Reporter's Aug. 9, 2002 edition, Moody's Investors Service took several rating actions on Chesapeake Energy Corporation. Rating Assigned * B1 - $250 million senior unsecured notes, due 2012. Ratings Affirmed * B1 - $108 million 7.875% senior unsecured notes, due 2004, * B1 - $250 million 8.375% senior unsecured notes, due 2008, * B1 - 800 million 8.125% senior unsecured notes, due 2011, * B1 - $143 million 8.5% senior unsecured notes, due 2012, * Caa1 - $150 million 6.75% convertible preferred, * B1 - Senior Implied Rating, * B2 - Unsecured Issuer Rating. Fitch Ratings has assigned a 'BB-' rating to Chesapeake Energy's $250 million senior note offering. Fitch maintains its 'BB+' rating on its senior secured bank facility and a 'B' rating on its convertible preferred stock. The Rating Outlook for Chesapeake is Stable. CHESAPEAKE ENERGY: Plans to Commence 20-Million Share Offering -------------------------------------------------------------- Chesapeake Energy Corporation (NYSE: CHK) intends to commence a proposed public offering of 20 million shares of common stock. Chesapeake intends to use the net proceeds of the offering to finance, in part, the recently announced acquisition of natural gas properties from ONEOK, Inc., which is scheduled to close in January 2003, or in the event the ONEOK acquisition is not consummated, proceeds will be used for general corporate purposes including possible future acquisitions. Chesapeake Energy Corporation is one of the 10 largest independent natural gas producers in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and producing property acquisitions in the Mid-Continent region of the United States. CHESAPEAKE ENERGY: Preparing Prospectus for Equity Offering ----------------------------------------------------------- Chesapeake Energy Corporation (NYSE: CHK) will file a preliminary supplemental prospectus with the Securities and Exchange Commission relating to the proposed public offering of 20 million shares of common stock. The company expects to price the offering the week of December 9, 2002. Chesapeake intends to use the net proceeds of the offering to finance, in part, its recently announced acquisition of Mid- Continent natural gas properties from ONEOK, Inc., which is scheduled to close in January 2003, or in the event the ONEOK acquisition is not consummated, proceeds will be used for general corporate purposes including possible future acquisitions. Credit Suisse First Boston, Morgan Stanley and Salomon Smith Barney are joint book-running managers for the offering. Bear Stearns & Co. Inc., Lehman Brothers and Johnson Rice & Company, LLC are also managing underwriters. When available, copies of the preliminary prospectus supplement relating to the offering may be obtained from the offices of Credit Suisse First Boston, Prospectus Department, One Madison Avenue, New York, New York 10010, 212-325-2580, Morgan Stanley, Prospectus Department, 1585 Broadway, New York, New York 10036, 212-761-4000, and Salomon Smith Barney, Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, New York 11220, 718-765-6732. Chesapeake is an independent energy company engaged in oil and natural gas exploitation, acquisition and exploration activities primarily in the Gulf of Mexico, the Rocky Mountains, Permian Basin/Mid-Continent and the Gulf Coast. Chesapeake Energy Corporation is one of the 10 largest independent natural gas producers in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and producing property acquisitions in the Mid-Continent region of the United States. COAST HOTELS: S&P Revises Ratings Outlook to Stable from Pos. ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook for Coast Hotels & Casinos Inc. to stable from positive, given longer- than-anticipated timing for the IPO of its common stock, and soft third quarter performance. Concurrently, Standard & Poor's affirmed its double-'B'-minus corporate credit rating on the Las Vegas, Nev.-based company. Total debt outstanding on September 30, 2002, was $444 million. Coast owns and operates four casinos in the Las Vegas market: Orleans, the Gold Coast, Suncoast, and the Barbary Coast. "The ratings for Coast reflect its good operating and development track record, and its solid position in the Las Vegas 'locals' market," said Standard & Poor's credit analyst Craig Parmelee. He added, "These factors are offset by the company's relatively small number of properties, and an aggressive capital spending plan." In May 2002, Coast's parent company, Coast Hotels Inc., filed a registration statement for a proposed IPO of its common stock. Proceeds from this offering were to be used to repay outstanding balances under Coast's revolving credit facility, and any excess funds would be used to fund expansion projects such as those ongoing at the Orleans and the Gold Coast. The offering has not yet occurred, and given the company's comments that the timing is indefinite and subject to market conditions, Standard & Poor's now expects that most of the external capital requirements stemming from these or other projects will be funded with debt capital. Coast's properties have performed well during the past couple of years. However, during its third quarter ended Sept. 30, 2002, Coast reported a 17% decline in EBITDA, primarily as expenses, associated with operating the expanded Orleans, increased, while revenue at this property declined. Revenue was affected by a lower-than-normal hold percentage, and lower-than-expected visitor volume, which had been affected by ongoing construction and a temporary reduction in available parking spaces. It is likely to take a few quarters for visitation to recover, and for the property to ramp-up following the expansion. Coast's credit profile is expected to remain fairly steady despite the company's spending plans. It also anticipates a successful amendment or refinancing of the bank facility in the first quarter of 2003. CONSECO INC: Fitch Downgrades 45 MH Transactions Ratings to C ------------------------------------------------------------- Fitch Ratings downgrades 45 limited guarantee bonds to 'C' in 45 Conseco Finance/Green Tree Finance manufactured housing (MH) transactions. The rating action follows Conseco Finance's failure to make required guarantee payments on ten of its MH transactions on Dec. 2, 2002. Conseco Finance has indicated that it intends to suspend all such future guarantee payments relating to MH trusts until there is resolution to the restructuring of its MH business. The transactions' structure allows for the bonds to recover current shortfalls in the future in the event there is sufficient excess spread. Conseco Finance Corp., was downgraded to 'D' from 'CC' by Fitch on Dec. 4, 2002. Conseco, Inc., Conseco Finance Corp.'s parent, is rated 'D' by Fitch. Green Tree Finance transactions with B-2 classes downgraded to 'C' from 'CC': --GTFC 1994-1; --GTFC 1994-2; --GTFC 1994-3; --GTFC 1994-5; --GTFC 1994-6; --GTFC 1994-7; --GTFC 1994-8; --GTFC 1995-1; --GTFC 1995-2; --GTFC 1995-3; --GTFC 1995-4; --GTFC 1995-5; --GTFC 1995-6; --GTFC 1995-7; --GTFC 1995-8; --GTFC 1995-9; --GTFC 1995-10; --GTFC 1996-1; --GTFC 1996-2; --GTFC 1996-3; --GTFC 1996-4; --GTFC 1996-5; --GTFC 1996-6; --GTFC 1996-7; --GTFC 1996-8; --GTFC 1996-9; --GTFC 1996-10; --GTFC 1997-1; --GTFC 1997-2; --GTFC 1997-3; --GTFC 1997-4; --GTFC 1997-5; --GTFC 1997-6; --GTFC 1997-8; --GTFC 1998-1; --GTFC 1998-3; --GTFC 1998-4; --GTFC 1998-6; --GTFC 1998-7; --GTFC 1999-1; --GTFC 1999-2; --GTFC 1999-3; --GTFC 1999-4; --GTFC 1999-5; Conseco Finance (CFC) transactions with B-2 classes downgraded to 'C' from 'CCC'. --CFC 2000-1. DebtTraders reports that Conseco Inc.'s 10.500% bonds due 2004 (CNC04USR2) are trading between 25 and 30. See http://www.debttraders.com/price.cfm?dt_sec_ticker=CNC04USR2for real-time bond pricing. CORNING: Will Take $825MM Goodwill & Impairment Charges in Q4 ------------------------------------------------------------- Corning Incorporated (NYSE:GLW) announced that its fourth quarter results will include additional pretax non-cash charges in the range of $800 to $825 million. The charges will include approximately $400 million to impair goodwill in the company's telecommunications segment and $400 to $425 million of impairment charges related to the tangible and intangible assets in Corning's conventional television glass and photonic technologies businesses. The company determined its goodwill charge after completing its annual assessment of goodwill as required under Statement of Financial Accounting Standards No. 142, (SFAS 142) of the Financial Accounting Standards Board. At the end of the third quarter, Corning had $2.1 billion in goodwill, with approximately $1.9 billion related to the telecommunications segment. "The goodwill charge is consistent with what we told investors they might expect during our third-quarter conference call," James B. Flaws, vice chairman and chief financial officer said. "The accounting for SFAS142 is complex, but at its core is Corning's long-term view of the telecommunications marketplace and the resulting estimated cash flow and fair market values of its telecommunications segment. Our outlook does not anticipate any significant growth in the telecommunications segment until late 2004. However, we expect longer term improvement as bandwidth demand continues to grow absorbing existing network capacity. This recovery could be enhanced by public policy changes, consolidation of the industry and the introduction of new broadband applications." Corning said its other pretax impairment charges of $400 to $425 million are related to the decline in expected future cash flows from its conventional television glass and photonic technologies businesses. The charge related to the conventional television glass business of approximately $150 million reflects the impact of the decline in the conventional television tube industry in North America. The charge related to photonic technologies of $250 to $275 million reflects the very significant decline and the prolonged expected downturn in the optical components marketplace. Overview of 2002 Charges Corning has recorded restructuring and impairment pretax charges totaling $619 million through September 30, 2002. In October, Corning announced that it would record a pretax restructuring and impairment charge in the range of $550 to $650 million in the fourth quarter. Today's announcement will bring the company's total 2002 pretax restructuring and impairment charges to approximately $2 billion. The company also expects to record an after-tax gain of approximately $400 million from the previously announced sale of its precision lens business to 3M for $850 million. The transaction is scheduled to be completed by the end of the year. Flaws said, "This has been a very difficult year for Corning, our employees, our communities and our shareholders. The long and deep depression in telecommunications industry capital spending has challenged us. Yet we continue to make progress against our goals. Our restructuring should help us achieve profitability in 2003 and we are prepared to do more if necessary. "Our financial health remains strong with significant cash and short-term investment balances, the expected proceeds from the sale of the precision lens business and continued access to our committed revolving credit line." Established in 1851, Corning Incorporated -- http://www.corning.com-- creates leading-edge technologies that offer growth opportunities in markets that fuel the world's economy. Corning manufactures optical fiber, cable and photonic products for the telecommunications industry; and high- performance display glass and components for television, information technology and other communications-related industries. The company also uses advanced materials to manufacture products for scientific, semiconductor and environmental markets. * * * As previously reported in Troubled Company Reporter, Standard & Poor's lowered its ratings on two synthetic transactions related to Corning Inc., to double-'B'-plus from triple-'B'-minus. The lowered ratings follow the lowering of Corning Inc.'s long- term corporate credit and senior unsecured debt ratings on July 29, 2002. The two deals are both swap independent synthetic transactions that are weak-linked to the underlying collateral, Corning Inc.'s debt. The lowered ratings reflect the credit quality of the underlying securities issued by Corning Inc. RATINGS LOWERED Corporate Backed Trust Certificates Corning Debenture-Backed Series 2001-28 Trust $12.843 million corning debenture-backed series 2001-28 Rating Class To From A-1 BB+ BBB- Corporate Backed Trust Certificates Corning Debenture-Backed Series 2001-35 Trust $25.2 million corning debenture-backed series 2001-35 Rating Class To From A-1 BB+ BBB- COVANTA: Seeks Court Nod to Renew & Modify AIG Insurance Program ---------------------------------------------------------------- Covanta Energy Corporation and non-debtor affiliate Covanta Energy Group, Inc. -- Insured Parties -- seek Judge Blackshear's permission to renew and modify their insurance arrangement with American International Group and its affiliates to provide primary casualty insurance covering their potential casualty liabilities, including, among other things, workers' compensation liability. Deborah M. Buell, Esq., at Cleary, Gottlieb, Steen & Hamilton, in New York, recalls that the Court previously authorized the Debtors to continue paying its prepetition insurance arrangements, including with respect to workers' compensation obligations and losses -- the Existing Insurance Program. The Existing Insurance Program is typically renewed every October. Since AIG provides the most cost-effective insurance structure, the Insured Parties want to renew their insurance program. The terms of the Renewal Insurance Program is basically the same in the Existing Insurance Program. Specifically, the Renewal Insurance Program provides that: 1. The Renewal Insurance Program will be effective from October 20, 2002 to October 20, 2003; 2. The Renewal Insurance Program covers "primary casualty" liabilities related to the Debtors' energy businesses. The primary casualty liabilities comprise of workers' compensation, general liability, products and completed operations liability, and automobile liability; 3. The premium due and payable under the Renewal Insurance Program is $3,629,375. Covanta has complied with the requirements set forth in the Renewal Insurance Program with respect to the timing of the premium payments; 4. Covanta is required to provide collateral totaling $4,600,000 in the form of cash or letter of credit using AIG's approved format and approved banks. The collateral secures the Insured Parties' obligations to pay to AIG the self-insured retention provided under the policy. Covanta has complied with the requirements set forth in the Renewal Insurance Program with respect to the substance and timing of the collateral payment by making a $2,000,000 cash payment to AIG and obtaining a $2,000,000 letter of credit; 5. Self-insured retentions at $250,000 per accident apply to each claim under the Renewal Insurance Program; and 6. The Renewal Insurance Program is contingent on the Court's approval pursuant to an order satisfactory to American Home Assurance Company -- an AIG affiliate -- on or before December 4, 2002. Ms. Buell asserts that the Court should approve the Debtors' request because: (i) insurance renewals has been part of the Debtors' ordinary course of business since 1986. However, AIG required Court approval of the Debtors' entry into the Renewal Insurance Program; (ii) the Debtors are required to maintain insurance covering casualty liabilities, including, among other things, workers' compensation liabilities by various federal, state and local statutes, rules and regulations, as well as by the DIP Agreement and various project documents; (iii) casualty liability insurance structures have become standard practice among large companies like the Debtors; and (iv) the proposed renewal and modification of the Existing Insurance Program is the most cost effective and fair manner in which to comply with the Debtors' statutory and other duties to maintain insurance to continue their business. (Covanta Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 609/392-0900) DEL MONTE: Issuing New $300 Million of Senior Subordinated Notes ---------------------------------------------------------------- Del Monte Foods Company (NYSE: DLM), through its wholly-owned subsidiary Del Monte Corporation, announced a new issue of $300 million of Senior Subordinated Notes due 2012. The Notes will be issued by SKF Foods Inc., a wholly-owned subsidiary of H. J. Heinz Company (NYSE: HNZ), to which Heinz will contribute Heinz's U.S. and Canadian pet food and pet snacks, U.S. tuna and retail private label soup and U.S. infant feeding businesses. SKF Foods then will be spun-off to Heinz shareholders. In partial consideration for the contribution of these Heinz businesses to SKF Foods, SKF Foods will issue the Notes to Heinz, which will transfer them to the H. J. Heinz Finance Company. Heinz Finance will sell the Notes to qualified investors in transactions exempt from registration under the Securities Act of 1933. Immediately after the spin-off, SKF Foods will merge with the Corporation. SKF Foods will be the surviving company in the merger and will become a wholly-owned subsidiary of Del Monte Foods Company. After the merger, SKF Foods will change its name to "Del Monte Corporation" and the Notes will become Del Monte Corporation obligations. Neither the Corporation nor SKF Foods will receive any of the proceeds from the sale of the Notes by Heinz Finance. The Notes are part of a financing plan designed to finance the acquisition of SKF Foods by Del Monte Foods Company. The Notes have not been registered under the Securities Act, and may not be offered or sold in the United States, absent registration or an applicable exemption from the Securities Act registration requirements. * * * As previously reported in Troubled Company Reporter, Fitch Ratings affirmed its 'BB-' rating on Del Monte Corporation's (the operating subsidiary of Del Monte Foods Company) senior secured credit and its 'B' rating on its senior subordinated notes. The affirmation followed the company's announcement that it will be merging with certain non-core U.S. assets of Heinz. Rated securities totaled $642.5 million at March 31, 2002. The Rating Outlook is Stable. DEL MONTE: Heinz Transaction Continues to Proceed on Schedule ------------------------------------------------------------- In connection with its previously announced transaction with Del Monte, H. J. Heinz Company (NYSE:HNZ) announced second quarter Fiscal 2003 operating highlights (three months ending October 30, 2002) for the businesses designated to be spun off to its shareholders and then merged with Del Monte Corporation, a subsidiary of Del Monte Foods Company (NYSE:DLM). These businesses include Heinz's U.S. and Canadian pet food, U.S. tuna and retail private label soup, and U.S. infant feeding. The Heinz/Del Monte transaction is proceeding on schedule toward closing by the end of calendar 2002 or early 2003, with a Del Monte stockholder meeting scheduled for December 19, 2002, regulatory review completed, physical separation of the businesses achieved and financing activities underway. H. J. Heinz Company is one of the world's leading processors and marketers of high-quality ketchup, condiments, sauces, meals, soups, snacks and infant foods through all retail and foodservice channels. A host of favorite brands, such as Heinz(R) ketchup, Ore-Ida(R) french fries, Boston Market(R) and Smart Ones(R) meals and Plasmon(R) baby food are the growth drivers in Heinz's two strategic global segments: Meal Enhancers and Meals & Snacks. Heinz's 50 companies have number-one or number-two brands in 200 countries, showcased by the Heinz(R) brand, a global consumer icon with $2.5 billion in annual sales. Fourteen additional brands, each with more than $100 million in annual sales, generate a further $2.6 billion. Information on Heinz is available at http://www.heinz.com/news DELTA AIR LINES: November 2002 System Traffic Climbs 11% -------------------------------------------------------- Delta Air Lines (NYSE: DAL) reported traffic results for the month of November 2002. Traffic comparisons are provided for year-over-year activity for 2001 and 2000 because the events of Sep. 11, 2001, distort comparisons to 2001. System traffic for November 2002 increased 11.0 percent from November 2001 on a capacity increase of 4.4 percent. Delta's system load factor was 68.3 percent in November 2002, up 4.0 points from the same period last year. Compared to November 2000, November 2002 system traffic is down 11.4 percent, capacity is down 9.8 percent and load factor is down 1.2 points. Domestic traffic in November 2002 increased 9.2 percent year over year on a capacity increase of 4.0 percent. Domestic load factor in November 2002 was 68.6 percent, up 3.3 points from the same period a year ago. Compared to November 2000, November 2002 domestic traffic is down 11.2 percent, capacity is down 10.4 percent and load factor is down 0.6 points. International traffic in November 2002 increased 17.6 percent year over year on a 5.6 percent increase in capacity. International load factor was 67.3 percent, up 6.8 points from November 2001. Compared to November 2000, November 2002 international traffic is down 12.0 percent, capacity is down 7.7 percent and load factor is down 3.3 points. During November 2002, Delta operated its schedule at a 99.3 percent completion rate, compared to 98.7 percent in November 2001 and 97.5 percent in November 2000. Delta boarded 8,643,616 passengers during the month of November 2002. Detailed traffic and capacity are attached. Delta Air Lines' 8.30% bonds due 2029 (DAL29USR1) are trading at about 58 cents-on-the-dollar, DebtTraders reports. See http://www.debttraders.com/price.cfm?dt_sec_ticker=DAL29USR1for real-time bond pricing. ENRON CORP: National City Seeks Stay Relief Re Trust Securities --------------------------------------------------------------- National City Bank is a successor property trustee under: (a) the Amended and Restated Declaration of Trust of Enron Capital Trust I dated as of November 18, 1996 -- the Declaration I; and (b) the Amended and Restated Declaration of Trust of Enron Capital Trust II dated as of January 13, 1997 -- Declaration II. Enron Capital Trust I According to Edward M. Fox, Esq., at Pryor Cashman Sherman & Flynn LLP, in New York, pursuant to Declaration I, ECT I issued 8,000,000 8.30% Trust Originated Preferred Securities, with an aggregate liquidation amount with respect to the assets of ECT I of $200,000,000 and a liquidation amount of $25 per ECT I TOPRS. The ECT I TOPRS are currently listed and traded over the counter under the symbol "EONNQ." Also, ECT I issued 247,440 8.30% Trust Common Securities with an aggregate liquidation amount with respect to the assets of ECT I of $6,186,000 and a liquidation amount I of $25 per ECT I Trust Common Security. Under Declaration I, the ECT I Trust Common Securities were purchased by Enron North America Corp., which covenanted to maintain direct ownership of the ECT I Trust Common Securities. Moreover, a distribution to holders of ECT I TOPRS has priority over a distribution to ECT I Trust Common Securities. Enron Preferred Funding LP Enron Preferred Funding LP is a Delaware limited partnership governed by the Amended and Restated Agreement of Limited Partnership of Enron Preferred Funding LP dated as of November 21, 1996 -- the EPF I Agreement. Under the EPF I Agreement, EPF I issued to ECT I 8,247,440 8.30% Partnership Preferred Securities with a stated liquidation preference of $25 per PPS. The 8.30% PPS constitute the limited partnership interests in EPF I. The assets of EPF I consist of: (i) $181,926,000 principal amount 7.75% Subordinated Debentures due 2016 Enron Corp. issued pursuant to an Indenture dated as of November 21, 1996 between the Debtor and The Chase Manhattan Bank, as indenture trustee; (ii) $29,108,000 principal amount of 7.75% Debentures due 2016 issued by Enron Pipeline Company pursuant to an Indenture dated as of November 21, 1996 between ETS, as issuer, Enron as guarantor and CMB as indenture trustee; and (iii) $29,108,000 principal amount of 7.75% Debenture due 2016 issued by Enron Capital and Trade Resources Corp. pursuant to an indenture dated as of November 21, 1996 between ENA, as issuer, Enron as guarantor and CMB as indenture trustee. In addition, EPF I also owns $2,500,000 in short term, investment grade debt securities issued by third parties not affiliated with Enron. Enron Capital Trust II Enron Capital Trust II is a statutory business trust governed by the terms of the Declaration II, wherein Enron Corp. is a sponsor. Pursuant to an Instrument of Resignation, Appointment and Acceptance dated as of December 19, 2001, by and among Enron, ENA, ETS, JPMorgan Chase Bank and NCB, NCB became the successor Property Trustee under Declaration II for ECT II. Under the Declaration II, ECT II issued 6,000,000 8-1/8% Trust Originated Preferred Securities, with an aggregate liquidation amount with respect to the assets of ECT II of $150,000,000 and $25 per ECT II TOPRS. ECT II also issued 186,000 8-1/8% Trust Common Securities, with an aggregate liquidation amount with respect to the ECT II assets of $4,650,000 and $25 per ECT II Trust Common Security. Pursuant to Declaration II, the ECT II Trust Common Securities were purchased by Enron, which covenanted to maintain direct ownership of the ECT II Trust Common Securities. A distribution to holders of ECT II TOPRS has priority over a distribution of ECT II Trust Common Securities. Enron Preferred Funding II Enron Preferred Funding II, LP is a Delaware limited partnership govered by the Amended and Restated Agreement of Limited Partnership of Enron Preferred Funding II, LP, dated as of January 16, 1997. Pursuant to the EPF II Agreement, EPF II issue to ECT II 6,186,000 8-1/8% Partnership Preferred Securities with a stated liquidation preference of $25 per Partnership Preferred Security. The 8-1/8% PPS constitute the limited partnership interests in EPF II with Enron being the general partner. The assets of EPF II consists of: (i) $136,450,000 principal amount 7.75% Subordinated Debentures due 2016 Series II Enron issued pursuant to an Indenture dated as of January 16, 1997 between Enron and CMB, as indenture trustee; (ii) $21, 836,000 principal amount of 7.75% Debentures due 2016 Series II ETS issued; and (iii) $21,836,000 principal amount of 7.75% Debentures due 2016 Serious II ENA issued. In addition to the 1997 Debentures, EPF II also issued $1,900,000 in short-term, investment grade debt securities third parties issued. Pursuant to Declaration I and II, Mr. Fox relates, each of ECT I and ECT II terminated when Enron filed for bankruptcy. Under the EPF I Agreement and the EPF II Agreement, EPF I and EPF II are required to pay the fees and expenses of National, as Property Trustee for each of ECT I and ECT II. Accordingly, National asks the Court to lift the automatic stay to permit: (i) the liquidation or other redemption, of the Eligible Securities EPF I and EPF II held, the payment of the fees and expenses of National, as Property Trustee, of each of ECT I and ECT II out of the proceeds of the liquidation or other redemption and the distribution of the balance of the proceeds to holder of the ECT I TOPRS and the ECT II TOPRS in accordance with the provisions of Declaration I and EPF I Agreement and Declaration II and EPF II Agreement respectively; (ii) the termination of ECT I and ECT II; and (iii) the distribution of 8.30% PPS and 8-1/8% PPS directly to holders of ECT I TOPRS and ECT II TOPRS, respectively. National also asks the Court to compel the Debtors to determine by a certain date, to the extent necessary, whether to assume or reject Declaration I and Declaration II. Mr. Fox clarifies that National does not seek to modify the automatic stay to permit enforcement of the ECT I Debentures or the ECT II Debentures. Pursuant to Section 362(d)(1) of the Bankruptcy Court, Mr. Fox contents that cause exist to modify the automatic stay, including: (a) Enron is the Sponsor and the holder of Trust Common Securities, of ECT I and ECT II and the general partner of EPF I and EPF I; (b) as Enron and its affiliates continue to reduce their workforce, the Regular Trustees of ECT I and ECT I may no longer continue to be employed by Enron and there will be fewer and fewer employees available to fulfill the necessary functions of Enron under Declaration I, EPF I Agreement, Declaration II, EPF II Agreement, including acting as Regular Trustees of ECT I and ECT II; and (c) to permit the Property Trustee or holders of ECT I TOPRS and ECTI II TOPRS to take steps necessary to realize on the Eligible Securities in order to avoid any chance that they may be lost, misplaced or otherwise mishandled to the detriment of the holders of the ECT I TOPRS and the ECT II TOPRS; and (d) to permit the Property Trustee or holders of ECT I TOPRS and ECT II TOPRS to take steps necessary to realize on the Eligible Securities so that their value is not adversely affected by interest rate fluctuations or other economic events; and (e) Enron has no equity in ECT I, EPF I, ECT II or EPF II and the Property is not necessary to an effective reorganization. Moreover, Mr. Fox asserts, the Debts should be compelled to assume or reject Declaration I and II immediately pursuant to Section 365(d)(2) of the Bankruptcy Code. The balance of equities in this case strongly favors National and the holders of ECT I TOPRS and ECT II TOPRS. "The Debtor's failure to act is already causing substantial hardship," Mr. Fox notes. In addition, compelling the Debtor to assume or reject the Declarations will result in no harm whatsoever to the Debtor. (Enron Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service, Inc., 609/392-0900) EVERCOM INC: Reaches Agreement for Debt Workout via Equity Swap --------------------------------------------------------------- Evercom has taken the next important step in its efforts to restructure. Progress has been continuing in an orderly way and now an overall agreement in principle has been reached between its senior lenders, the ad hoc committee of subordinated bondholders and Evercom's Board to restructure its balance sheet. Dick Falcone, Chairman and CEO, commented: "We have made progress on many fronts, and now we are looking forward to advancing our efforts in the marketplace with an anticipated solid balance sheet as a foundation for growth." Eric Hanson, chairman of the ad hoc committee of bondholders commented: "We have gotten to know this company and its marketplace even better in the last six months and are delighted with this step. I am pleased that this restructuring will allow the company to move forward and reach its full potential. I believe that bondholders will see significant returns from their new equity holdings." Michael Pizette, Managing Director of Back Bay Capital, Evercom's largest lender, states that "upon consummation of the proposed restructuring plan offered to the holders of publicly traded bonds, Evercom will have a stronger balance sheet and consequently will be able to devote more of its attention to its core business." This restructuring will result in the subordinated debt holders exchanging their debt for 98% of the equity of the restructured company. Existing equity will retain a 2% interest in the restructured company and will have warrants to subscribe for additional equity at significantly higher prices. It is anticipated that documents relating to the exchange offer will be mailed to bondholders in December and it is expected that the transaction will close early in 2003, subject to any regulatory reviews. Audited financial statements for the company's fiscal year ended December 31, 2001, and unaudited financial statements for the nine months ended September 30, 2002, along with management's discussion and analysis will be included in the exchange offer document. Following the conversion of the publicly traded bonds, the Company's total outstanding indebtedness will be reduced to a level that can comfortably be serviced by cash flow from operations. Evercom is a provider of inmate telecommunications systems, serving approximately 2,000 correctional facilities throughout the United States. The Company has become a recognized leader in providing comprehensive, innovative technical solutions and responsive value-added service to the corrections industry. FARMLAND INDUSTRIES: All Proofs of Claim Due on January 10, 2003 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Missouri sets January 10, 2003, as the last date for creditors of Farmland Industries, Inc., and their debtor-affiliates, to file their Proofs of Claim against the Debtors' estates or be forever barred from asserting those claims. Proofs of Claims are to be filed with the Debtors' Claims Administrator. If sent by overnight mail or by hand delivery, proofs must be addressed to: Bankruptcy Management Corporation c/o Farmland Claims Processing Dept. 1330 E. Franklin Avenue El Segundo, CA 90245 If by mail, to: Bankruptcy Management Corporation c/o Farmland Claims Processing Dept. PO Box 905 El Segundo, CA 90245-0905 Farmland Industries, Inc., and its debtor-affiliates, filed for Chapter 11 protection on May 31, 2002. Laurence M. Frazen, Esq., Cynthia Dillard Parres, Esq., and Robert M. Thompson, Esq., at Bryan Cave LLP represent the Debtors in their restructuring efforts. When the debtors filed for protection from its creditors, it listed total assets of $2.7 billion and total liabilities of $1.9 billion. FEDERAL-MOGUL: Court Grants Committees More Time to File Actions ---------------------------------------------------------------- On November 12, 2002, the U.S. Bankruptcy Court for the District of Delaware issued an order extending the deadline for the Official Committee of Unsecured Creditors; the Official Committee of Asbestos Claimants; and the Legal Representative of Future Asbestos-Related Claimants in the Chapter 11 cases of Federal-Mogul Corporation and its debtor-affiliates, to commence adversary proceedings against the Debtors' Prepetition Lenders to November 21, 2002. However, anticipating that the issues related to a consensual plan of reorganization will not be resolved by that time, the Committees and the Futures Representative stipulated anew with the Prepetition Agent, on behalf of the Existing Lenders and the holders of Tranche C Loans, as well as the Surety Bond Issuers, to a sixth extension of their deadline to commence adversary proceedings. The parties agree to move the deadline to December 31, 2002. In the adversary proceedings, the Committees and the Representative will seek to: -- challenge the amount, validity, enforceability, perfection, or priority of the Existing Obligations or the liens on the Existing Obligations Collateral in respect thereof; or -- assert any claims or causes of action, against the Prepetition Agent, the Existing Lenders, the Surety Bond Issuers or the holders of the Tranche C Loans. Charlene D. Davis, Esq., at The Bayard Firm, in Wilmington, Delaware, asserts that the extension of the Litigation Commencement deadline is without prejudice to the right of the Prepetition Agent, the Existing Lenders, the holders of Tranche C Loans and the Surety Bond Issuers to, at any time, initiate an action to establish the amount, validity, enforceability, perfection, or priority of the Existing Obligations or the liens on the Existing Obligations Collateral with respect to the Tranche C Loan. (Federal-Mogul Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., 609/392-0900) FLEMING: Continues Talks to Sell Certain Wisconsin Retail Stores ---------------------------------------------------------------- Fleming Companies, Inc., (NYSE: FLM) announced plans for the sale of its Rainbow Foods stores in Wisconsin. Fleming is engaged in advanced negotiations with current and prospective Sentry retailers for the sale of eight Rainbow Foods stores in Wisconsin. In addition, the company has entered into an agreement with Roundy's, Inc., for the sale of three Rainbow Foods stores located in Brookfield, Kenosha and Waukesha, Wisconsin. The transaction with Roundy's is expected to be finalized within 45 days and is subject to closing conditions. Financial terms for the total transactions, including net proceeds and anticipated supply arrangements with the Sentry retailers, will be disclosed in aggregate after the signing of the remaining purchase agreements. Upon receipt, the company intends to apply the cash proceeds from these transactions to Fleming's senior secured term loan balance. Fleming continues to pursue the divestiture of its remaining retail locations. With its national, multi-tier supply chain network, Fleming is the #1 supplier of consumer package goods to retailers of all sizes and formats in the United States. Fleming serves nearly 50,000 retail locations, including supermarkets, convenience stores, supercenters, discount stores, concessions, limited assortment, drug, specialty, casinos, gift shops, military commissaries and exchanges and more. Fleming serves more than 600 North American stores of global supermarketer IGA. To learn more about Fleming, visit its Web site at http://www.fleming.com * * * As reported in Troubled Company Reporter's September 30, 2002 edition, Fleming Companies, Inc.'s senior unsecured debt was lowered to 'BB-' from 'BB' by Fitch Ratings following the company's announced plans to divest its retail business. At the same time, Fleming secured bank facility is downgraded to 'BB' from 'BB+' and its senior subordinated notes are lowered to 'B' from 'B+'. About $1.9 billion in debt is affected by the rating action. The Rating Outlook remains Negative. The Negative Outlook continues to reflect uncertainty surrounding Fleming's agreement with Kmart, as its contract with Kmart has not yet been confirmed in the bankruptcy process, There is also concern that additional Kmart stores may close, which will adversely impact the company's wholesale business. In addition, the inherent integration risks associated with acquisitions made earlier this year also persist. GENCORP: Affirms 2002 Earnings Guidance & Provides 2003 Outlook --------------------------------------------------------------- GenCorp Inc., (NYSE: GY) affirmed its earnings guidance for FY 2002. The Company will announce its year end results in late January and expects earnings per share to be in the lower end of its previously announced range of $0.90 to $1.00, excluding unusual items and restructuring charges. The guidance includes income from retiree benefit plans, net of tax, of approximately $24 million, or $0.54 per share. For FY 2003, the Company expects net earnings from operations to increase by approximately 20%, with cash flow from operations becoming positive in FY 2003. The earnings and cash flow improvements projected for FY 2003 are attributable to improved operations in all three of the Company's operating segments. The Company also expects that there will be a pension surplus in FY 2003, but does not anticipate booking significant income from retiree benefit plans. In terms of segment performance in FY 2003, the Company currently anticipates GDX Automotive sales of $700 to $730 million. This forecast reflects a reduction when compared to FY 2002 projected sales, and is driven primarily by a combination of OEM price reductions and discontinuations of unprofitable platforms. GDX expects its margins to be between 5.5% and 7.0% in FY 2003. For its Aerojet segment, the Company is currently forecasting FY 2003 sales to be in the range of $265 to $275 million, a slight improvement over projected FY 2002 sales. Projected sales increases are partially offset by NASA funding issues which resulted in the cancellation of the COBRA booster engine program. Projected FY 2002 sales also include sales from the NASA X-38 De-Orbit Propulsion Stage delivery. Aerojet's projected FY 2003 operating income margin is expected to be between 11% and 13%. In its Aerojet Fine Chemical segment, the Company is currently forecasting FY 2003 revenues of $52 to $57 million and operating margins between 6.5% and 8.5%. In October 2002, GenCorp completed the acquisition of the assets of General Dynamics Ordnance and Tactical Systems Space Propulsion and Fire Suppression business. The Company is making progress towards additional acquisitions that meet the Company's strategic and financial criteria to grow its Aerospace and Defense business. In addition, the Company continues to make progress towards monetizing its real estate assets, although it has not included any real estate sales in the FY 2003 guidance. GenCorp is a multi-national, technology-based manufacturer with leading positions in the automotive, aerospace, defense and pharmaceutical fine chemicals industries. Additional information about GenCorp can be obtained by visiting the Company's Web site at http://www.GenCorp.com * * * As previously reported in Troubled Company Reporter, Standard & Poor's assigned its preliminary double-'B' and single-'B'-plus ratings to senior unsecured and subordinated debt securities, respectively, filed under GenCorp Inc.'s $300 million SEC Rule 415 shelf registration. At the same time, Standard & Poor's affirmed its existing ratings on GenCorp, including the double-'B' corporate credit rating. The outlook is stable. GENEVA STEEL: Engages Tanner + Co. as New Independent Auditors -------------------------------------------------------------- Effective as of August 31, 2002, Arthur Andersen LLP, the independent accountant for Geneva Steel Holdings Corp., was banned from practice before the Securities and Exchange Commission and ceased rendering auditing services. Andersen audited the Company's consolidated financial statements for the fiscal years ended September 30, 1999 and September 30, 2000. Andersen had also been engaged to audit the Company's financial statements for the three months ended December 31, 2000 and the year ended December 31, 2001 following the Company's use of fresh start accounting after emerging from bankruptcy in January 2001. The audit had not been completed primarily due to the filing by Geneva Steel LLC, the Company's primary subsidiary, of a voluntary bankruptcy petition in January 2002. Andersen's reports on the Company's 1999 Financials and 2000 Financials did not contain an adverse opinion or disclaimer of opinion, nor were such reports qualified or modified as to audit scope or accounting principles, except for a modification as to the Company's ability to continue as a going concern. On October 7, 2002, the Audit Committee of the Board of Directors, which is responsible for the selection and replacement of the Company's independent accountant, engaged Tanner + Co. to be the Company's new independent accountant. This engagement was approved by the Company's secured lenders and the bankruptcy court. Geneva Steel owns and operates an integrated steel mill located near Provo, Utah. The Company filed for chapter 11 protection on January 25, 2002. Andrew A. Kress, Esq., Keith R. Murphy, Esq. and Stephen E. Garcia, Esq. at Kaye Scholer LLP represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $264,440,000 in total assets and $192,875,000 in total debts. GENUITY: Asks Court Okay to Set-Up Asset Sale Bidding Protocol -------------------------------------------------------------- In connection with the proposed sale of substantially all its assets, Genuity Inc., and its debtor-affiliates ask the Court to approve certain bidding procedures. Sally McDonald Henry, Esq., at Skadden Arps Slate Meagher & Flom LLP, in New York, contends that the Bidding Procedures will maximize the realizable value of the Purchased Assets for the benefit of the Debtors' estates, creditors and other interested parties. A. Determination of "Qualified Bidder" Status: To participate in the Bidding Process, each person, other than Level 3 Communications LLC, must deliver to the Sellers: -- an executed confidentiality agreement in form and substance satisfactory to the Sellers; and -- current audited financial statements of the Potential Bidder or, if the Potential Bidder is an entity formed for the purpose of acquiring the Purchased Assets, current audited financial statements of the equity holders of the Potential Bidder or any other form of financial disclosure acceptable to the Sellers and their advisors demonstrating the Potential Bidder's ability to close a proposed transaction. A "Qualified Bidder" is a Potential Bidder that timely delivers these documents and that the Debtors' board of directors determines is financially able to consummate the purchase of the Purchased Assets; B. Due Diligence for Qualified Bidders: To obtain due diligence access or additional information from the Sellers, a Qualified Bidder must first advise the Sellers in writing of its preliminary proposal regarding: -- the purchase of the Assets; -- a purchase price range; -- the proposed structure and financing of the transaction; -- any additional conditions to closing that the Qualified Bidder may wish to impose; and -- the nature and extent of additional due diligence the Qualified Bidder may wish to conduct. If, based on the preliminary proposal and additional factors as the Sellers determine are relevant, the Sellers determine that the preliminary proposal is reasonably likely to result in a bona fide and serious higher or otherwise better offer for the Purchased Assets, the Sellers will afford the Qualified Bidder access to relevant due diligence. The Sellers will designate an employee or other representative to coordinate all reasonable requests for additional information and due diligence access from the Qualified Bidders. Any additional due diligence will not continue after the Bid Deadline. None of the Sellers, their affiliates or any of their representatives are obligated to furnish any information relating to the Purchased Assets to any person except to a Qualified Bidder who makes an acceptable preliminary proposal; C. Bid Deadline: A Qualified Bidder who desires to make a bid must deliver a written copy of its bid not later than the bid deadline to: Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square, New York, New York 10036 Attention: J. Gregory Milmoe, Esq. and Skadden, Arps, Slate, Meagher & Flom LLP One Rodney Square, P.O. Box 636, Wilmington, Delaware Attention: Eric M. Davis, Esq. After receipt, the Sellers will immediately distribute a copy of each bid to the Proposed Purchaser; D. Determination of "Qualified Bid" Status: A bid received from a Qualified Bidder will constitute a "Qualified Bid" only if it includes all of the Required Bid Documents and meets all of the Bid Requirements. The Purchase Agreement will be deemed a Qualified Bid for all purposes in connection with the Bidding Process, the Auction and the Sale; -- Required Bid Documents: All bids must include these documents: a. written offer stating that: * the Qualified Bidder offers to purchase all or substantially all of the Purchased Assets, * the Qualified Bidder is prepared to enter into a legally binding purchase and sale agreement for the acquisition of the Business on terms and conditions no less favorable to the Sellers than the Purchase Agreement within not more than one day after entry by the Bankruptcy Court of the Sale Order, and * the Qualified Bidder's offer is irrevocable until the closing of the purchase of the Purchased Assets; and b. a good faith deposit in the form of a certified check payable to the order of the Sellers in an amount equal to or greater than the sum of the maximum amount of the Expense Reimbursement plus the Break-up fee; provided, however, that in no event will the Proposed Purchaser be required to make the Good Faith Deposit; -- Bid Requirements: All bids must satisfy these requirements: a. the Sellers must determine, in the good faith opinion of their board of directors after consultation with an independent financial advisor, that the bid: * is not materially more burdensome or conditional than the terms of the Purchase Agreement, and * has a value greater than or equal to the sum of the amount of the Breakup Fee, plus the maximum amount of the Expense Reimbursement, plus the consideration to the Sellers arising out of the Purchase Agreement including the payment of the Purchase Price and the assumption of the Assumed Liabilities; b. the bid is on substantially the same or better terms and conditions than those set forth in the Purchase Agreement; c. the bid is accompanied by satisfactory evidence of committed financing or other ability to perform the acquisition of the Purchased Assets; d. the bid is not conditioned on the Bankruptcy Court's approval of any bid protections, including the breakup fee, termination fee, expense reimbursement or similar type of payment; e. the bid acknowledges and represents that the bidder: * has had an opportunity to conduct any and all due diligence regarding the Purchased Assets prior to making its offer, * has relied solely on its own independent review, investigation and inspection of any documents and the Purchased Assets in making its bid, and * did not rely on any written or oral statements, representations, promises, warranties or guaranties whatsoever, whether express, implied, by operation of law or otherwise, regarding the Purchased Assets, or the completeness of any information provided, except as expressly stated in the Bidding Procedures; and f. the bid is received by the Bid Deadline; E. Auction: If more than one Qualified Bid is received, the Sellers will conduct an auction with respect to the Purchased Assets. If no Qualified Bid is received by the Bid Deadline, the Proposed Purchaser's bid will be deemed the highest or otherwise best offer for the Purchased Assets and the Sellers will proceed with the transactions contemplated by the Purchase Agreement. The Auction, if required, will commence at 9:00 a.m. (Eastern Time) on the date established by the Court in the Procedures Order, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York, 10036 or at a later time or other place as agreed by the Proposed Purchaser and the Sellers, and which the Sellers will notify all Qualified Bidders who have submitted Qualified Bids. At least one business day prior to the Auction, the Sellers will provide to the Proposed Purchaser and all other Qualified Bidders a copy of the highest or otherwise best Qualified Bid received and copies of all other Qualified Bids. In addition, the Sellers will inform the Proposed Purchaser and each Qualified Bidder who has expressed its intent to participate in the Auction of the identity of all Qualified Bidders that may participate in the Auction. Only the Proposed Purchaser, the Sellers, Qualified Bidders who have submitted Qualified Bids and representatives of any statutory committee appointed in these cases will be entitled to attend, participate and be heard at the Auction, and only the Proposed Purchaser and Qualified Bidders will be entitled to make any subsequent Qualified Bids at the Auction. During the Auction, bidding will begin at the purchase price stated in the highest or otherwise best Qualified Bid, and will subsequently continue in minimum increments of at least $1,000,000 higher than the previous Qualified Bid. Subsequent Qualified Bids submitted by the Proposed Purchaser will be deemed to include a credit in an amount equal to the sum of the Break-up Fee and the maximum amount of the Expense Reimbursement. Bidding at the Auction will continue until the highest or otherwise best Qualified Bid is determined. After the conclusion of the Auction, the Sellers will: -- review each Qualified Bid on the basis of financial and contractual terms and other factors relevant to the Sale process, including those factors affecting the speed and certainty of consummating the Sale, and -- identify the highest or otherwise best offer for the Purchased Assets; F. Acceptance of Qualified Bids: At the Sale Hearing, the Sellers will seek entry of an order authorizing and approving the Sale: -- if no Qualified Bid is received, to the Proposed Purchaser pursuant to the terms and conditions set forth in the Purchase Agreement; or -- if another Qualified Bid is received by the Sellers, to the Proposed Purchaser or any other Qualified Bidder as the Sellers determine to have made the highest or otherwise best offer to purchase the Purchased Assets. The Sale Hearing may be adjourned or rescheduled. The Sellers' presentation to the Bankruptcy Court for approval of a particular Qualified Bid does not constitute the Sellers' acceptance of the bid, except with respect to the bid of the Proposed Purchaser as reflected in the Purchase Agreement. The Sellers will be deemed to have accepted any other bid only when the bid has been approved by the Bankruptcy Court at the Sale Hearing. Following the Sale Hearing approving the Sale of the Purchased Assets to the Successful Bidder, if the Successful Bidder fails to consummate an approved Sale because of a breach or failure to perform on the part of the Successful Bidder, the next highest or otherwise best Qualified Bid, will be deemed to be the Successful Bid and the Sellers will be authorized, but not required, to consummate the Sale with the Qualified Bidder submitting the bid without further Bankruptcy Court order; G. Return of Good Faith Deposit: The Good Faith Deposits of all Qualified Bidders will be retained by the Sellers and all Qualified Bids will remain open until closing of the purchase of the Purchased Assets; provided, however, that in no event will the Proposed Purchaser be required to make the Good Faith Deposit. If a Successful Bidder fails to consummate an approved Sale because of a breach or failure to perform on the part of the Successful Bidder, the Sellers will not have any obligation to return the Good Faith Deposit deposited by the Successful Bidder, and the Good Faith Deposit irrevocably will become property of the Sellers; H. Modifications: The Sellers may: -- determine which Qualified Bid, if any, is the highest or otherwise best offer; and -- reject at any time before entry of the Bankruptcy Court order approving a Qualified Bid, any bid that is: a. inadequate or insufficient, b. not in conformity with the requirements of the Bankruptcy Code, the Bidding Procedures or the terms and conditions of the Purchase Agreement, or c. contrary to the best interests of the Sellers, their estates and their creditors. At or before the Sale Hearing, the Sellers may impose other terms and conditions on the Qualified Bidders as they determine to be in the best interests of their estates, creditors and other parties-in-interest in these cases. (Genuity Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900) GLASSMASTER CO.: Recurring Losses Raise Going Concern Doubts ------------------------------------------------------------ Glassmaster Company is a diversified manufacturer of thermoplastic and thermoset plastic materials, industrial controls, and electronics that produces and sells a broad range of product lines to customers across multiple industries. The Company classifies its business into two operating segments: Industrial Products, consisting of extruded synthetic monofilaments and pultruded fiberglass and composites and; Controls and Electronics, consisting of mechanical and electronic controls, electronic test equipment, and circuit boards. Consolidated sales for the fiscal year ended August 31, 2002 were $17.6 million compared to $18.9 million last year, a decrease in sales of 6.7%. The net loss for the year was $543,332, or $0.33 per share, compared to a net loss of $1,271,671, or $0.78 per share, last year. Industrial Products segment sales declined 7.4% to $11.7 million this year compared to $12.7million in the prior year. Sales in the first and second quarters of the 2002 fiscal year declined 12.7% and 28.1%, respectively, when compared to the prior year periods, reflecting the impact of the September 11th terrorist attacks on a U.S. manufacturing economy already in recession. Sales in the third and fourth quarters increased 3.5% and 13.7%, respectively, compared to the same prior year periods as some gradual improvement in customer order patterns was seen. Industrial Products sales, including Specialty Monofilament and The Composite Modular Building System, are expected to improve in tandem with the economy and as recently developed products begin to generate additional revenue in 2003. Several new products have been approved for production, however release dates from the Company's customers continue to be delayed due to the uncertain economic climate. The Company continues to search for additional distribution channels and marketing partners to increase sales of Industrial Products. Controls and Electronics segment sales declined 3.8% for the year to $5.9 million. Electronic controls products and contract manufacturing services saw increased sales that offset the decline in sales of cable systems and control assemblies used in the heavy truck and bus industry which has been depressed for the past three years. Sales of controls and electronics are expected to improve in 2003 due to new electronic products and related circuit board contract manufacturing revenue. New product and engineering innovations already approved on new heavy truck production will also contribute to sales growth and increased market penetration, particularly as the trucking industry begins to recover from its prolonged slump. Total gross profit increased 35.5%, to $2.29 million, compared with $1.69 million during the 2001 fiscal year. The increase in gross profit is due to manufacturing cost reductions implemented throughout the year, with the significant effect on gross profit occurring during the last six months of the 2002 fiscal year. The Company continues in its efforts to reduce the cost of manufacturing on all products, but any significant future increases in gross profit will result from increasing levels of throughput at Monofilament and higher rates of utilization on electronic production equipment at Controls. The Company has incurred recurring losses from operations during the past four fiscal years and as a result, is in violation of certain financial covenants contained in its primary lending agreements. These agreements currently provide for revolving working capital lines of credit and long term equipment and real estate financing for the company's industrial products segment in South Carolina and its controls and electronics segment in Michigan (through its wholly owned subsidiary, Glassmaster Controls Company, Inc.). Glassmaster has incurred recurring losses from operations, and as of August 31, 2002, the Company's current liabilities exceeded its current assets by $379,397. Its total liabilities of $11,020,010 exceed its total Assets of $11,434,804 less deferred tax assets of $1,204,551 by $789,757. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management has continued cost reduction programs and is pursuing opportunities to raise additional equity capital through outside sources. Additionally, the Company's management is pursuing possible sales of assets and product lines, and pursuing affiliations with other companies to sustain operations until current sales levels of existing products and known sales of new products, along with expected improved profit margins through cost reductions, can move the Company toward future profitability. GLOBAL CROSSING: Court Approves New Tecota Lease Agreement ---------------------------------------------------------- Global Crossing Ltd., and its debtor-affiliates, currently maintain two Points Of Presence in Miami, Florida: one on the sixth floor at 50 NE Ninth Street and one at One NE First Street. The Debtors have determined that it is not necessary to continue operating both the Miami POPs. The Debtors found that the costs of centralizing their activities at the First Street Location would be significantly more than centralizing their activities at the Ninth Street Location. The Ninth Street Location also has superior public, private, transit and network interconnection. Accordingly, the Debtors determined that it was in their best interests to negotiate a new lease for the Ninth Street location with Technology Center of the Americas, LLC. While the Debtors desire to maintain the Ninth Street Location, Mr. Basta believes that the assumption of the Original Tecota Lease is not a viable option. Pursuant to the Original Tecota Lease, the Debtors lease 135,000 square feet of space and are obligated to pay the Landlord $298,000 per month in total rent, consisting of base rent at an annual rate of $19.50 per square foot and common area and maintenance charges at an annual rate of $7 per square foot. The contraction in the telecommunications industry and the Debtors' businesses has dramatically reduced the Debtors' need for POPs, including the Debtors' need for the entirety of the Ninth Street Location. Based on the Debtors' current business plan, less than 70,000 square feet of POP space is required in Miami. Since the Petition Date, Mr. Basta relates that the Debtors have paid no rent to the Landlord for the Ninth Street Location. Until April 8, 2002, the Debtors benefited from a "rent holiday" under the Original Tecota Lease. Subsequently, the Landlord agreed to temporarily defer the rent while negotiations for a new lease were underway. However, the Rent Deferral has expired. If the Debtors were to assume the Original Tecota Lease, then for the 15 years that remain under the term of that lease, they would be obligated not only to lease almost twice the POP space they require in Miami at an unacceptably high rent, but they would also be required to pay the Landlord almost $2,100,000 in cure costs for the overdue rent for the months of April 2002 through October 2002. The Tecota Agreement On September 26, 2002, after extensive arms-length negotiations, the Debtors and the Landlord executed the Tecota Agreement, which sets forth the parties' agreement on the New Lease Documentation. Pursuant to the terms of the Tecota Agreement, the Landlord agree to reduce: -- the leased space in the Ninth Street Location to 67,500 square feet; and -- the rent to $1 per square foot annually for the period April 9, 2002 through June 30, 2003. As a result, under the New Lease, the Total Rent during the Initial Period is $45,000 per month. Compared to the Original Tecota Lease, the New Lease will reduce the Debtors' monthly rent obligations by over $250,000 during the Initial Period for an aggregate savings of over $3,750,000. The New Lease Documentation also provides that the Debtors have a one-time unrestricted right to terminate the New Lease at any time up to the earlier of: -- January 31, 2003; and -- the closing of the Debtors' Chapter 11 cases, provided that simultaneously with the termination, the Debtors will pay the Landlord $3,900,000. The salient terms of the Tecota Agreement are: -- New Lease: The Original Tecota Lease will be terminated effective as of April 9, 2002. The New Lease term will commence April 9, 2002 and terminate April 30, 2017. The Debtors will lease 67,500 square feet of the Premises from the Landlord. The Debtors and the Landlord will be bound by the New Lease Documentation, each of which constitutes a postpetition agreement; -- New Guaranty: The parties agree to terminate the Original Guaranty. Pursuant to the New Guaranty, GC Holdings is the guarantor of GC Latin America's obligations under the New Lease. In the event that GC Holdings no longer exists or is no longer the owner of all the U.S. and Latin American Assets of Global Crossing Ltd., GC Latin America will provide a substitute guarantor as provided in the New Lease Documentation; -- New Fiber Agreement: The parties agree to terminate the Original Fiber Agreement and enter into the New Fiber Agreement. The New Fiber Agreement provides for the operation and maintenance of independent fiber cable distribution systems, one of which will be utilized to provide for direct GC Latin America service connections between GC Latin America and its customers who are located in the Ninth Street Location and the second of which will be utilized by NAP to provide for direct service connections between NAP and its general building customers; -- New SNA: The parties agree to terminate the Original Subordination, Non-disturbance and Attornment Agreement and enter into the New Subordination Agreement, which provides: * The Debtors will subordinate its rights under the New Lease to the rights of the Landlord's mortgagee, and * if, at any time, the Landlord's mortgagee, or their successors or assigns, acquires the Landlord's rights under the New Lease, the New Lease will continue in full force and effect as a lease between the landlord and the Debtors; -- Conditions: The New Lease Documentation will not become effective unless and until the Court approves the rejection of the One NE First Street Lease and, in fact, the lease has been rejected. The New Lease Documentation will not become effective unless and until the Liens have been discharged or removed to bond; -- Waiver: The Landlord, the Landlord's mortgagee will be deemed to have waived and released all claims that the Landlord and the Landlord's mortgagee may have against the Debtors by reason of the termination of the Original Tecota Lease, the Original Guaranty and the Original Fiber Agreement; and -- Termination: The Debtors are entitled to a one-time unrestricted right to terminate the Tecota Agreement and the New Lease Documentation, at any time up to the date that is the earlier of: * January 31, 2003; or * closing of the Debtors' Chapter 11 cases, provided that simultaneously with the termination, the Debtors will pay the Landlord $3,900,000. Pursuant to Sections 363, 365 and 554 of the Bankruptcy Code and Rule 9019 of the Federal Rules of Bankruptcy Procedure, the Court approved: -- the Tecota Agreement among Global Crossing Latin America and Caribbean Co.; Global Crossing Telecommunications; Global Crossing Holdings Inc.; Technology Center of the Americas, LLC, as landlord; and NAP of the Americas, Inc.; -- the termination of a real property lease dated September 29, 2000 between Global Crossing Latin America and Caribbean Co., Global Crossing Telecommunications and Technology Center of the Americas, for the property located at 50 NE Ninth St in Miami, Florida and entry into a new Lease Agreement dated as of April 9, 2002; -- termination of the existing Guaranty of Lease by GC Holdings, dated September 28, 2000, and entry into a new Guaranty of Lease dated as of April 9, 2002; -- termination of the existing Agreement for Fiber Cable Distribution System, dated December 28, 2001, and entry into a new Agreement for Fiber Cable Distribution System dated as of April 9, 2002; and -- termination of the existing Subordination, Nondisturbance and Attornment Agreement, and entry into a new Subordination, Nondisturbance and Attornment Agreement dated as of April 9, 2002. (Global Crossing Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., 609/392-0900) GOLF AMERICA: Committee Taps Kronish Lieb as Lead Counsel --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave its nod of approval to the Official Committee of Unsecured Creditors of Golf America Stores, Inc., to retain Kronish Lieb Weiner & Hellman LLP as its lead counsel in the Debtor's on-going chapter 11 case. Kronish Lieb is expected to: a) attend the meetings of the Committee; b) review financial information furnished by the Debtor to the Committee; c) confer with the Debtor's management and counsel; d) review the Debtor's schedules and statement of affairs; c) advise the Committee as to the ramifications regarding all of the Debtor's activities and motions before this Court; f) file appropriate pleadings on behalf of the Committee; g) analyze and review accountant's work product and reports to the Committee; h) provide the Committee with legal expertise in relation to the case; i) prepare various applications and memoranda of law submitted to the Court for consideration and handle all other matters relating to the representation of the Committee that may arise; j) negotiate offers to liquidate the Debtor's inventory; k) negotiate offers to sell the leases and other assets; l) assist the Committee in negotiations with the Debtor and other parties-in-interest on a plan of reorganization; and m) perform such other legal services for the Committee as may be necessary or proper in these proceedings. Kronish Lieb's customary hourly rates are: Lawrence C. Gottlieb $590 per hour Jay R. Indyke $485 per hour Ronald R. Sussman $475 per hour Cathy R. Hershcopf $425 per hour Eriz J. Haber $390 per hour Bethanne D. Haft $210 per hour Rebecca Goldstein $170 per hour Golf America Stores, Inc., an operator of a chain of 35 retail stores and a distribution center, filed for chapter 11 protection on August 7, 2002. M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP and Paul M. Nussbaum, Esq., and Martin T. Fletcher, Esq., at Whiteford, Taylor & Preston L.L.P., represent the Debtor in its restructuring efforts. HAYES LEMMERZ: Obtains OK to Renew AFCO Insurance Financing Deal ---------------------------------------------------------------- The Debtors sought and obtained Court authority to enter into two insurance premium financing agreements with AFCO Credit Corp. Early in these cases, the Debtors entered into two insurance premium financing agreements with AFCO to finance premiums for necessary insurance coverage. The Court authorized the Debtors to enter into the Initial Finance Agreements on December 7, 2001. Essentially, the insurance coverage to be financed through the Finance Agreements would replace the coverage that the Debtors financed through the Initial Finance Agreements The maintenance of the insurance coverage provided by the Insurance Policies is essential to the Debtors' continued operations. The terms of the Insurance Policies are characteristic of those of insurance policies typically maintained by corporate entities that are similar in size and nature to the Debtors. Specifically, the Insurance Policies provide coverage for the Debtors' property, general liability, crime and umbrella liability coverage liabilities that the Debtors may incur during the operation of their business. The premiums payable under the Insurance Policies is $5,740,465. Pursuant to the Finance Agreements, AFCO will pay the premiums for the Insurance Policies in full. In return, pursuant to the terms of the Finance Agreements, the Debtors are required to pay to AFCO a $1,919,878 down payment and eight monthly installments of $483,638. The Finance Agreements provide for an interest rate of 3.375% with respect to the amounts financed. As was the case with the Initial Finance Agreements, the Debtors were unable to obtain unsecured credit with respect to insurance premium financing. Accordingly, the Finance Agreements provide that the amount financed would be secured by all unearned and returned premiums resulting from reduction or cancellation of the coverage under the Insurance Policies. In addition, pursuant to the Finance Agreements, the Debtors would be required to grant AFCO a power of attorney to effect cancellation of the Insurance Policies and collect the unearned premiums should the Debtors default under the terms of the Finance Agreements. However, AFCO will not be able to exercise this power of attorney until: -- it has provided the Debtors the notice and cure period required by applicable state statute; and -- the Debtors have failed to cure any default within the period. In addition, the cost of funds under the Finance Agreements is lower than under the Debtors' postpetition financing arrangement with their postpetition lenders. Accordingly, it is more beneficial for the Debtors to finance the Insurance Policies through AFCO than to borrow under the DIP Agreement to purchase the Insurance Policies. Although the DIP Agreement restricts the creation and existence of any liens on the Debtors' property, the Debtors have provided counsel for the lenders under the DIP Agreement with a copy of the Finance Agreements and believe the lenders will consent to this motion. Financing the premiums to be paid under the Insurance Policies enables the Debtors to maintain critical insurance coverage while preserving their available cash. Judge Walrath authorizes Hayes Lemmerz International, Inc., and its debtor-affiliates to enter into an Insurance Financing Agreement with AFCO on an interim basis. If there are no objections, the interim order will be considered a final order. (Hayes Lemmerz Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 609/392-0900) HERCULES INC: S&P Rates $350MM Sr. Sec. Credit Facilities at BB --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' bank loan rating to specialty chemical producer Hercules Inc.'s proposed $350 million senior secured credit facilities. Standard & Poor's said that at the same time, it has affirmed its 'BB' corporate credit rating on the company. The outlook remains positive. Hercules Inc., based in Wilmington, Delaware, has approximately $684 million of debt outstanding as of Sept. 30, 2002 (excluding preferred securities). "The completion of Hercules' refinancing plan is an important development from a credit perspective in that it will provide funds to repay $125 million in notes scheduled to mature early next year," said Standard & Poor's credit analyst Kyle Loughlin. "The new revolving credit facility is expected to be unused at closing, which together with Hercules proven ability to generate free cash flow over the course of the business cycle, should provide ample liquidity for the foreseeable future". The bank facilities are rated the same as the corporate credit rating and are secured by a first-priority security interest in substantially all domestic assets, including accounts receivables and inventory, property plant and equipment and a pledge of intercompany notes due from a material foreign subsidiary. The new revolving facility replaces Hercules existing $200 million bank revolving credit facility that matures in 2003. The new facilities are subject to a maximum debt to EBITDA ratio, minimum interest coverage ratio, and capital spending limitations. The minimum net worth requirements, contained in the previous facilities, have been eliminated. Standard & Poor's noted that the bank facility rating is based on preliminary terms and conditions. HOLLYWOOD ENTERTAINMENT: Offering $200MM Sr. Subordinated Notes --------------------------------------------------------------- Hollywood Entertainment Corporation, (Nasdaq: HLYW) owner of the Hollywood Video chain of over 1,800 video superstores, expects to commence an offering this week of $200 million aggregate principle amount of senior subordinated notes due 2011. The notes will be issued under the Company's effective shelf registration statement filed under the Securities Act of 1933. Substantially all of the net proceeds of the offering would be used to redeem a portion of the Company's outstanding 10.625% Senior Subordinated Notes due 2004. UBS Warburg LLC will act as the lead managing underwriter for the offering. Copies of the prospectus and the preliminary prospectus supplement, when available, can be obtained from the offices of UBS Warburg, 677 Washington Boulevard, Stamford, CT 06901. Hollywood Entertainment owns and operates the second largest video store chain in the United States. Hollywood Entertainment and Hollywood Video are registered trademarks of Hollywood Entertainment Corporation. At September 30, 2002, Hollywood Entertainment's balance sheet shows that total current liabilities exceeded total current assets by about $130 million. HORSEHEAD INDUSTRIES: Wants to Stretch Exclusivity to March 31 -------------------------------------------------------------- Horsehead Industries, Inc., d/b/a Zinc Corporation of America, and its debtor-affiliates, ask the U.S. Bankruptcy Court for the Southern District of New York to extend their exclusive periods. The Debtors want to stretch their exclusive plan filing period through March 31, 2003, and they want to maintain the exclusive right to solicit acceptances of that plan through May 30, 2003. The Debtors assert that their progress in this case has been significant and compels an extension of the Exclusive Periods. Since the Petition Date, the Debtors and their court-retained professionals have been focusing on carrying out the Debtors' reorganization. To this end, they have been working diligently to operate the Debtors' businesses and handle the vast number of crucial administrative and business decisions which have faced them in the initial phases of their chapter 11 cases. The Debtors continue to respond to a multitude of information requests made by the Committee and its professionals, the Debtors' Bank Group, vendors, customers, landlords and other parties-in-interest. Currently, the Debtors are negotiating an agreement with their Bank Group, to provide them a post-petition credit facility. The Debtors expect to conclude the negotiations quickly. Additionally, the Debtors have been identifying non-core assets which can be sold to create needed funds and reducing carrying costs. Horsehead Industries, Inc. d/b/a Zinc Corporation of America, the largest zinc producer filed for chapter 11 protection on August 19, 2002. Laurence May, Esq., at Angel & Frankel, PC represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $215,579,000 in assets and $231,152,000 in debts. HUGHES ELECTRONICS: Refinances and Extends Sr. Credit Facilities ---------------------------------------------------------------- Hughes Electronics Corporation has refinanced and extended $1.9 billion of senior credit facilities. The amended credit facilities mature on August 31, 2003 and include a $1.28 billion revolving credit facility and a $650 million term loan. "We are very pleased with the successful completion of this transaction," said Michael J. Gaines, HUGHES' chief financial officer. "Our lead arrangers structured a flexible financing solution that was well received in the market, and both credit facilities were oversubscribed. We appreciate the continuing support of these investors." Bank of America Securities and Salomon Smith Barney were joint book-running lead arrangers of the HUGHES facilities. HUGHES, a unit of General Motors Corporation, is a world-leading provider of digital television entertainment, broadband services, satellite-based private business networks, and global video data broadcasting. The earnings of HUGHES are used to calculate the earnings attributable to General Motors Class H common stock (NYSE: GMH). * * * As reported in Troubled Company Reporter's November 21, 2002 edition, Standard & Poor's lowered its corporate credit ratings on Hughes Electronics Corp., and its 81%-owned subsidiary PanAmSat Corp., to 'B+' from 'BB-'. Standard & Poor's also lowered its senior secured bank loan ratings on the companies to 'BB-' from 'BB'. The downgrade reflects concern about continuing discretionary cash flow deficits and refinancing risk at Hughes. The PanAmSat downgrade reflects the company's majority ownership by Hughes and not PanAmSat's stand-alone operating performance or financial condition, which have been stable. All ratings remain on CreditWatch with negative implications pending the resolution of the merger transaction with EchoStar Communications Corp. El Segundo, California-based Hughes has roughly $800 million debt, excluding debt at PanAmSat. IMC GLOBAL: S&P Assigns BB Rating to Proposed $100MM Sr. Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' rating to fertilizer producer IMC Global Inc.'s proposed $100 million senior unsecured notes due 2011. Standard & Poor's said that at the same time it has affirmed its 'BB' corporate credit rating on the company. Lake Forest, Illinois-based IMC is one of the largest global producers of phosphate and potash crop nutrients for the agricultural industry and has more than $2.1 billion of debt outstanding. The outlook remains negative. "The ratings on IMC Global reflect the company's average business profile, offset by an aggressive financial profile," said Standard & Poor's credit analyst Peter Kelly. IMC holds the world's leading position in the production of phosphate fertilizers and is the largest supplier of potash. INDYMAC BANCORP: S&P Changes Outlook to Stable from Negative ------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Pasadena, California-based IndyMac Bancorp and its subsidiary, IndyMac Bank FSB, to stable from negative. All ratings on both entities, including IndyMac Bancorp's 'BB+/B' counterparty credit ratings, are affirmed. The ratings affirmation reflects the relatively low level of credit risk associated with IndyMac's lending business and more stable business model created from the company's de-REITing in early 2000 and the subsequent purchase of SGV Bancorp, the parent of First Federal Savings and Loan Association of San Gabriel Valley. Limiting the rating is a lack of product diversity. "The outlook revision reflects the success the company has had in hedging its servicing asset in the current environment of low interest rates and extraordinarily high volume of home mortgage refinancing," said credit analyst Daniel Martin. INTEGRATED HEALTH: Selling Operations to Trans Healthcare Inc. -------------------------------------------------------------- Trans Healthcare, Inc., has entered into an agreement with Integrated Health Services, Inc., to purchase IHS through a stock transaction. The acquisition is expected to be finalized by the end of the second quarter 2003. The strength of THI combined with the infrastructure and workforce of IHS will help to create an impressive healthcare company, offering the clinical capabilities, operational expertise, and sound financial backing necessary to succeed as the aging population continues to increase. In the coming months, THI and IHS will be working towards the effective integration of the two companies. "We are excited about the possibilities for this newly formed company, which benefits from unique strengths brought to the table by both THI and IHS," said Anthony Misitano, Chairman and CEO of THI. "Opportunities exist in a number of key areas, which will enhance not only financial performance but improve the care and service delivered to both residents and patients." Misitano went on to say that overlaying the THI business model across the IHS network will create shareholder value, and the fact that the corporate office in Sparks, MD and its workforce will be maintained, minimizes both the time required to integrate as well as overall integration risks. Joe Bondi, Chief Executive Officer of IHS said, "We are pleased to have entered into this agreement with THI, which has a strong reputation in the healthcare field and in particular the long term care industry. Its management team is committed to ensuring that we develop an appropriate organizational structure to best serve the needs of our patients, residents, their families, and the employees who provide their care. The conclusion of this sale agreement will represent a successful reorganization of IHS." THI, headquartered in Camp Hill, PA., currently operates 94 skilled nursing facilities, specialty hospitals, and outpatient rehabilitation clinics in 12 states. Upon completion of the acquisition THI will operate 274 facilities representing over 25,000 beds in 21 states with a workforce of 48,000. THI's executive management team has extensive experience and a proven track record in the healthcare industry. The company, which is privately held, receives financial backing from GTCR Golder Rauner, a leading private equity firm based in Chicago, IL. As previously announced, IHS filed for Chapter 11 Bankruptcy protection on February 2, 2000. After examining a number of alternatives for restructuring, IHS has determined that pursuing a strategic sale is the best option for the estate and its creditors. IHS expects to file a Plan of Reorganization (POR) with the U.S. Bankruptcy Court for the District of Delaware by the end of 2002. The terms of the transaction with THI will be disclosed in the POR. Trans Healthcare Inc., is a privately owned regional healthcare corporation that operates specialty hospitals, skilled nursing facilities, and outpatient rehab centers that combine appropriate care with cost savings. Go to http://www.thicare.com for additional information. IHS is a highly diversified health services provider, offering a broad spectrum of post-acute medical and rehabilitative services through its nationwide healthcare network. These services include long term, skilled nursing, and subacute care, long term acute care, outpatient rehabilitation, hospice care, and contract rehabilitation services. Supporting a wide variety of healthcare needs, IHS currently operates over 159 locations in 21 states throughout the United States. MAGNUM HUNTER: Executives Sell 482,000+ Shares in Block Trade ------------------------------------------------------------- Magnum Hunter Resources, Inc., (NYSE: MHR) announced the sale of 482,334 shares of common stock in a block trade to certain institutional holders. This sale facilitated by the Company on behalf of certain executive officers and one director provided the funds necessary to exercise 462,334 common stock options owned by these individuals. Predominately all of the stock options exercised today would have expired on December 12, 2002, five years from issuance. The average exercise price of these expiring stock options was $3.75 per share. All of the shares sold were placed with the assistance of SWS Securities, Inc. Subsequent to the exercise of these common stock options and this associated sale, the three current executive officers and the one director will have increased their aggregate net common share ownership in the Company by approximately 24,000 shares. One executive officer sold common shares not related to the exercise of the expiring options for federal income tax purposes and to retire a promissory note due to the Company. The Chairman, President and Chief Executive Officer of Magnum Hunter did not participate in any of these sales. Magnum Hunter Resources, Inc., is one of the nation's fastest growing independent exploration and development companies engaged in three principal activities: (1) the exploration, development and production of crude oil, condensate and natural gas; (2) the gathering, transmission and marketing of natural gas; and (3) the managing and operating of producing oil and natural gas properties for interest owners. * * * As previously reported, Standard & Poor's raised the corporate credit ratings of Magnum Hunter Resources Inc., to BB- and its senior unsecured debt rating to B+. MARK NUTRITIONALS: Reports Major Progress in Chapter 11 Reorg. -------------------------------------------------------------- Mark Nutritionals, whose Body Solutions(TM) brand is a national leader among weight loss products, announced major steps forward in its reorganization under Chapter 11. Among important recent developments, the company has: -- Hired a new management team to develop specific reorganization plans and take the company forward; -- Reached an agreement with the U.S. Federal Trade Commission; and -- Made substantial progress in turning around losses and rapidly positioning the company for doing business in the right markets with controlled growth and resulting profitability. In light of these recent developments, CEO Larry Cochran said the company's Chapter 11 Reorganization was "going better, and more quickly than expected. "We've already had a dramatic turnaround in stemming significant losses and are headed to profitability within the next 30 days." The new management team at Mark Nutritionals includes three of the former top executives at Pace Foods, who helped turn Pace Picante(TM) Sauce into a household name, and engineered its sale to Campbell Soup for $1.1 billion. Robert Burke, Bill Wagner and Gary Lane, formerly VP of Sales and Marketing, Chief Financial Officer and Director of Retail for Pace Foods respectively, have been retained by Mark Nutritionals. In addition to the Pace Foods experience, the new management team has over 50 combined years of successful senior level experience with major branded food companies such as Frito-Lay, Hershey, and General Mills. The former Pace executives are working with Cochran to aggressively develop and implement financial, marketing and operations plans that will form the reorganization plan, expected to be presented to creditors and filed with the court by the end of the year. "With the new management team, we now have the right people and with over $120 million previously spent marketing and developing a strong brand, we believe this is a great turnaround opportunity to build on the brand and be a leader in the sector," Cochran said. "We fully expect that Mark Nutritionals will emerge from the bankruptcy quickly and with an even stronger position than it previously held in the nutritional products industry. "Our main objective is to demonstrate a clear path to sustainable profitability that will create significant value for creditors and ensure that the Body Solutions brand remains a leader in the weight loss industry," Cochran continued. The FTC had been investigating Mark Nutritionals for the claims made in its prior marketing of Body Solutions products since the Fall of 2002. The agreement provides for mutually agreeable definitions of how Body Solutions will market its products in the future, including increased restrictions on how third party endorsements are used. "In addition, several state Attorneys General have made similar claims and we are confident that, working cooperatively with them, we can also address their concerns," Cochran said. Cochran continued, "Body Solutions enjoys a high level of visibility and customer loyalty, and this agreement with the FTC is part of our commitment to lead the industry by example." Body Solutions filed for Chapter 11 protection in September. The company retained turnaround specialist Larry Cochran of Eldon Partners, LLC immediately after filing. Eldon Partners is a turnaround and business advisory firm based in San Antonio, TX. Body Solutions is a leading healthy weight loss system that combines a behavior modification with nutritional products, including dietary supplements and meal replacements. More information can be obtained at www.bodysolutions.com . Text of the agreed order with the FTC can be obtained from the FTC's Web site at http://www.ftc.gov/os/2002/12/marknutritionalsord.htm MORGAN STANLEY: Fitch Cuts Ratings on 3 Note Classes to Low-Bs -------------------------------------------------------------- Fitch Ratings downgrades the following classes of the Morgan Stanley Dean Witter Owner Trust 2000-F1: --Class X participating interests to 'AA' from 'AAA'; --Class S participating interests to 'AA' from 'AAA'; --Class B notes to 'A+' from 'AA'; --Class C notes to 'BBB+' from 'A'; --Class D notes to 'BBB' from 'A-'; --Class E notes to 'BB-' from 'BBB'; --Class F notes to 'B+' from 'BBB-'; --Class G notes to 'B-' from 'BB' . In addition, the above referenced classes will remain on Rating Watch Negative. It should be noted that class H participating interests, class J participating interests, and owner trust certificates were not rated by Fitch. The class A's are insured by MBIA. As of the October 2002 reporting date, this transaction has experienced cumulative defaults of approximately $44,171,100, or 18.9% of original principal balance. Total current defaults are at $39,042,100 or 17.6% of the subject pool balance. This does not include $5,100,000 in exposure to Sybra, Inc., which is anticipated to be resolved in the near term. Four out of the five borrower defaults occurred in 2002. The increased speed of defaults has stressed the transaction beyond original expectations. Outstanding advances on the entire trust currently total approximately $1,279,700. Notably, the default of two large borrower relationships (Pandix LLC/E-Z Serve Convenience Stores and Clark Retail Enterprises) together account for $34,440,000 of the total current defaults. The downgrades take into account the assumed impact to the collateral pool and current available credit enhancements to each affected certificate interest represented by the combined defaults of three borrowers totaling $20,700,000. The impact of such a concentrated amount of defaults, net of recoveries has resulted in the above listed actions. It should be noted that the current rating actions are without regard to the potential impact associated with the bankruptcy status of Clark Retail Enterprises, Inc. CRE (which filed for bankruptcy protection in mid-October) is a significant borrower relationship in the MSDW securitization. As of recent, the borrower and its creditors are in the process of developing a viable workout solution. Fitch continues to monitor the CRE bankruptcy, as well as overall pool performance to maintain an appropriate assessment of credit risk and therefore the above ratings will remain on Rating Watch Negative. The subject pool is comprised of collateral from two originators: Franchise Finance Company of America and Morgan Stanley Dean Witter Mortgage Capital. MSDWMC was a Morgan Stanley Dean Witter conduit formed to originate franchise loans (currently inactive, no longer originating). MSDWMC originated their loans through American Commercial Capital who assisted MSDWMC in origination, marketing, research and underwriting. GECFF was involved in this transaction as a contributor of collateral to provide additional liquidity for its own originations. The original pool consisted of 22 franchise loans originated by MSDWMC, one promissory note backed by two franchise loans originated by GECFF, and 1 franchise loan also originated by GECFF. ACC (now part of Wells Fargo) is the primary and special servicer on the MSDWMC originated collateral while GECFF is the primary and special servicer on the GECFF originated collateral. MSDW OWNER: Fitch Downs Ratings on 2000-F1 Class G Notes to B- -------------------------------------------------------------- Fitch Ratings downgrades the following classes of the Morgan Stanley Dean Witter (MSDW) Owner Trust 2000-F1: --Class X participating interests to 'AA' from 'AAA'; --Class S participating interests to 'AA' from 'AAA'; --Class B notes to 'A+' from 'AA'; --Class C notes to 'BBB+' from 'A'; --Class D notes to 'BBB' from 'A-'; --Class E notes to 'BB-' from 'BBB'; --Class F notes to 'B+' from 'BBB-'; --Class G notes to 'B-' from 'BB' . In addition, the above referenced classes will remain on Rating Watch Negative. It should be noted that class H participating interests, class J participating interests, and owner trust certificates (OTC) were not rated by Fitch. The class A's are insured by MBIA. As of the October 2002 reporting date, this transaction has experienced cumulative defaults of approximately $44,171,100, or 18.9% of original principal balance (OPB). Total current defaults are at $39,042,100 or 17.6% of the subject pool balance. This does not include $5,100,000 in exposure to Sybra, Inc., which is anticipated to be resolved in the near term. Four out of the five borrower defaults occurred in 2002. The increased speed of defaults has stressed the transaction beyond original expectations. Outstanding advances on the entire trust currently total approximately $1,279,700. Notably, the default of two large borrower relationships (Pandix LLC/E-Z Serve Convenience Stores and Clark Retail Enterprises) together account for $34,440,000 of the total current defaults. The downgrades take into account the assumed impact to the collateral pool and current available credit enhancements to each affected certificate interest represented by the combined defaults of three borrowers totaling $20,700,000. The impact of such a concentrated amount of defaults, net of recoveries has resulted in the above listed actions. It should be noted that the current rating actions are without regard to the potential impact associated with the bankruptcy status of Clark Retail Enterprises, Inc. (CRE). CRE (which filed for bankruptcy protection in mid-October) is a significant borrower relationship in the MSDW securitization. As of recent, the borrower and its creditors are in the process of developing a viable workout solution. Fitch continues to monitor the CRE bankruptcy, as well as overall pool performance to maintain an appropriate assessment of credit risk and therefore the above ratings will remain on Rating Watch Negative. The subject pool is comprised of collateral from two originators: Franchise Finance Company of America (FFCA, now known as GE Capital Franchise Finance [GECFF]) and Morgan Stanley Dean Witter Mortgage Capital (MSDWMC). MSDWMC was a Morgan Stanley Dean Witter (MSDW) conduit formed to originate franchise loans (currently inactive, no longer originating). MSDWMC originated their loans through American Commercial Capital (ACC) who assisted MSDWMC in origination, marketing, research and underwriting. GECFF was involved in this transaction as a contributor of collateral to provide additional liquidity for its own originations. The original pool consisted of 22 franchise loans originated by MSDWMC, one promissory note backed by two franchise loans originated by GECFF, and 1 franchise loan also originated by GECFF. ACC (now part of Wells Fargo) is the primary and special servicer on the MSDWMC originated collateral while GECFF is the primary and special servicer on the GECFF originated collateral. NATIONAL STEEL: PBGC Intends to Assume Company's Pension Plans -------------------------------------------------------------- National Steel Corporation, Inc., has received notice that the Pension Benefit Guaranty Corporation, the federal pension insurer, has indicated an intention to assume responsibility for seven National Steel Corporation pension plans. "We are disappointed that the PBGC took this action at this time. However, we recognize that if the PBGC assumes responsibility for the plans current employees who retire will receive their basic pension benefits and our retirees will continue to receive monthly checks, subject to federal limits," said Mineo Shimura, Chairman and Chief Executive Officer. "We were aware that this action eventually could occur due to the significant underfunding of our plans, large ongoing funding requirements, market conditions and our bankruptcy filing. We do not expect that the PBGC's action will impact our plan to reorganize the Company. We continue to have good liquidity and will continue to provide our customers with the service and quality that they demand." Legacy costs such as pensions have long been an issue for the entire steel industry. In addition, the impact of the investment market over the past two years combined with low interest rates have significantly exacerbated pension funding requirements and have resulted in record pension liabilities, particularly in the steel industry. If the PBGC assumes responsibility for the plans, it will take over the assets of the plans and use its insurance funds to pay guaranteed benefits to National Steel workers. The affected pension plans are the National Steel Corporation Retirement Program; National Steel Corporation Pension Plan -- Hourly Employees; Granite City United Steelworkers of America Pension Plan; Granite City Pension Plan for Chemical Workers, Bricklayers, Hodcarriers, Blacksmiths, and Watchman's Union; Weirton Retirement Program; National Steel Pellet Company Pension Plan for Hourly Wage Employees; and Pension Plan for Salaried Employees of National Steel Pellet Company. The Company's American Steel Corporation Hourly Pension Plan was not implicated by the PBGC's announcement. Headquartered in Mishawaka, Indiana, National Steel Corporation is one of the Nation's largest producers of carbon flat-rolled steel products with annual shipments of approximately six million tons. National Steel Corporation employs approximately 8,200 employees. Please visit the Company's Web site at http://www.nationalsteel.comfor more information on the Company and its products and facilities. DebtTraders reports that National Steel Corp.'s 9.875% bonds due 2009 (NSTL09USR1) are trading between 38 and 40. See http://www.debttraders.com/price.cfm?dt_sec_ticker=NSTL09USR1 for real-time bond pricing. NCS HEALTHCARE: Postpones Vote on Merger with Genesis Health ------------------------------------------------------------ NCS HealthCare, Inc., (NCSS.OB) is postponing its special meeting of shareholders to vote on the Genesis Health Ventures, Inc., (Nasdaq: GHVI) merger. As a result of this afternoon's decision by the Delaware Supreme Court, described below, the meeting has been rescheduled from December 5, 2002, to December 12, 2002. The meeting time and place will be announced shortly. NCS and Genesis currently intend to close their merger as soon as practicable following that meeting. The Delaware Supreme Court approved a request for an interlocutory appeal of the Delaware Chancery Court's recent decision denying a preliminary injunction that would have delayed or possibly prevented NCS's proposed merger with Genesis. Previously, the Delaware Supreme Court had denied this request for an interlocutory appeal. The Court has now decided to hear the appeal on December 10, 2002, along with certain other appeals that were already pending. NCS is represented by special outside legal counsel Benesch, Friedlander, Coplan & Aronoff LLP and Skadden, Arps, Slate, Meagher & Flom LLP and financial advisor Candlewood Partners LLC. NCS HealthCare, Inc., is a leading provider of pharmaceutical and related services to long-term care facilities, including skilled nursing centers, assisted living facilities and hospitals. NCS serves approximately 200,000 residents of long- term care facilities in 33 states and manages hospital pharmacies in 10 states. In connection with the special meeting of stockholders relating to NCS's proposed merger with Genesis Health Ventures, Inc. and a pending tender offer from Omnicare, Inc., NCS HealthCare, Inc., has filed certain materials with the Securities and Exchange Commission, including a definitive proxy statement and a Solicitation/Recommendation Statement on Schedule 14D-9. NIAGARA MOHAWK: Verifies NYPSC Staff Position Re Pension Expense ---------------------------------------------------------------- The New York Public Service Commission Staff has raised a concern that Niagara Mohawk Power did not properly reconcile its pension and OPEB expense to the allowance that was reflected in the Company's rates for the period from January 1, 1996 through August 31, 1998. Under the NYPSC Staff's position, as the result of this and other less significant adjustments, the Company should have recorded an additional $80 million in its deferral account for the benefit of customers, and should have accrued interest on this amount thereafter. The interest during calendar years 1999, 2000, and 2001 would have been about $10 million annually. The Company is in the process of investigating and verifying the NYPSC Staff position, and expects to resolve these issues with the Staff. One potential outcome of those discussions could require the restatement of the Company's income statements for the prior three years to reflect the increase in interest expense that should have been recorded on the Company's income statements. Because the Company recorded losses in years 1999 and 2000, and earnings of $29,521,000 in 2001, the amount of this interest expense is material when compared to the Company's earnings in those years. If necessary, the restatement process could lead to other adjustments that would normally be booked to goodwill. The increase in the deferral account balance of $80 million is not material to the balance sheet of the Company and when finally resolved will be reflected in an adjustment to the Company's goodwill that occurs as of the merger with National Grid. Niagara Mohawk Power's September 30, 2002, balance sheet reported a working capital deficit at about $748 million. NOVATEL WIRELESS: Fails to Meet Nasdaq Min. Equity Requirement -------------------------------------------------------------- Novatel Wireless, Inc. (Nasdaq:NVTL), a leading provider of wireless data communications access solutions, has received a Nasdaq Staff Determination Letter regarding the qualification for listing of its common stock on The Nasdaq National Market. The Staff Determination Letter indicates that the Company satisfies the National Market's listing standard regarding minimum bid price, but does not currently comply with the minimum stockholder's equity requirement of $10,000,000, as set forth in Marketplace Rule 4450(a)(3) and therefore is still potentially subject to delisting. At the end of third quarter of 2002, Novatel Wireless' stockholder equity was $11,754,000. The Nasdaq Stock Market Staff invited Novatel Wireless to make a written submission to the Nasdaq Listing Qualifications Panel to address the issue and this submission has been made. Pending the results of the Nasdaq Listing Qualifications Panel's review of this submission, Novatel Wireless' common stock remains under the review of the listing panel and is potentially subject to delisting from The Nasdaq National Market. However, Novatel Wireless continues to currently meet all the listing requirements to list on The Nasdaq SmallCap Market and could consider transferring shares of its common stock to The Nasdaq SmallCap Market. Novatel Wireless, Inc., is a leading provider of wireless data modems and software for use with handheld computing devices and portable personal computers. The Company delivers innovative and comprehensive solutions that enable businesses and consumers to access personal, corporate and public information through email, enterprise networks and the Internet. Novatel Wireless also offers wireless data modems and custom engineering services for hardware integration projects in a wide range of vertical applications. The Novatel Wireless product portfolio includes the Minstrel(R) Family of Wireless Handheld Modems, Merlin(TM) Family of Wireless PC Card Modems, Sage(R) Wireless Serial Modems, Lancer 3W(TM) Family of Ruggedized Modems and Expedite(TM) Family of Wireless Embedded Modems. Headquartered in San Diego, California, Novatel Wireless is listed on the Nasdaq Stock Market (Nasdaq: NVTL). For more information, please visit the Novatel Wireless Web site at http://www.novatelwireless.com * * * Liquidity and Going Concern Uncertainty In its SEC Form 10-Q filed on November 14, 2002, the Company reported: "We believe that our available cash reserves, which includes proceeds from our common stock financing in September 2002, together with our operating cash flows and available borrowings under our revolving line of credit, which we are in the process of renewing with our bank will be sufficient to fund operations and to meet our working capital needs and anticipated capital expenditures through the end of the first quarter of 2003. However, there can be no assurance that we will become profitable or generate positive cash flows. If we fail to significantly increase revenues and reduce costs, we will continue to experience losses and negative cash flows from operations. Consequently, we may be required to seek additional financing in the future. If we are unable to obtain additional financing, we may not be able to continue as a going concern. "Since our inception, we have funded our operations primarily through sales of our equity securities and the issuance of the Series A Redeemable Convertible Preferred Stock which is classified as subordinated debt in our financial statements, and to a lesser extent, capital lease arrangements and borrowings under our line of credit. To date, gross proceeds from these transactions have totaled approximately $179.3 million, including gross proceeds from our initial public offering in November 2000 of $56 million, gross proceeds from the exercise of the underwriters over-allotment option in December 2000 of $8.2 million, gross proceeds from the Series A Redeemable and Convertible Preferred Stock financing in December 2001 of approximately $27.2 million and gross proceeds from the common stock issuance in September 2002 of approximately $2.8 million. At September 30, 2002, we had approximately $6.6 million in cash and cash equivalents. "We are party to a credit facility with Silicon Valley Bank, Commercial Finance Division, which allows the Company to borrow up to the lesser of $5 million at any one time outstanding or 80% of eligible accounts receivable balances. This credit facility bears interest at prime plus 2% (6.75% at September 30, 2002), is secured by substantially all of the assets of the Company and expires on November 29, 2002. As of September 30, 2002, $700,000 of borrowings were outstanding under this facility. We are currently in the process of renewing our line of credit facility, the outcome of which could result in amended terms and/or financial covenants. "We currently anticipate the current working capital, including budgeted cash flow and available borrowings under our credit facility, will be sufficient to meet our working capital requirements and anticipated capital expenditures through the end of the first quarter of 2003. If the we continue to experience negative cash flow, we may be required to raise additional funds through the private or public sale of additional debt or equity securities or through commercial bank borrowings to fund our working capital requirements and anticipated capital expenditures. Our ability to obtain additional capital will depend on financial market conditions, investor expectations for the wireless technology industry, the national economy and other factors outside our control. There can be no assurance that such additional financing will be available on acceptable terms, or at all. If needed, the failure to secure additional financing would have a material adverse effect on our business, financial condition and operating results and may impair our ability to continue our operations at their current level." NOVEX SYSTEMS: Accountants Radin Glass Air Going Concern Doubts --------------------------------------------------------------- Novex Systems International, Inc., is a corporation formed under the laws of New York. Until May 11, 1999, Novex was known as Stratford Acquisition Corp. and had been a corporation organized under the laws of Minnesota. Effective May 11, 1999, Stratford merged into its wholly-owned subsidiary, Novex Systems International, Inc., a newly-formed New York corporation, which was the surviving corporation. The purpose of the merger was to "redomesticate" the company from the state of Minnesota where it had virtually no business activity, to the State of New York where the company had its corporate headquarters. Furthermore, it was management's belief that New York has a more developed body of laws governing public companies than does Minnesota. For this reason, the new entity, Novex, was incorporated in the State of New York, and the Minnesota company, Stratford, was merged into Novex. As a result, the Minnesota company essentially dissolved into and became a part of the surviving entity, Novex. Novex also has a wholly-owned operating subsidiary, Novex Systems International, Ltd. (formerly known as Novacrete Technology (Canada) Inc.), which is a company registered under the laws of the Province of Ontario, Canada. The operations of Novex Canada were discontinued in October 2001 and the entity is now dormant. While net sales for the year ending May 31, 2002 was $1,866,914, net sales for the same period ended May 31, 2001, were $2,007 705. The decrease in sales was attributable principally to the Company's inability to ship orders on a more timely basis due to cash constraints and the overall slowness of the economy. On May 31, 2002, Novex had approximately $80,000 in back orders that needed to be shipped. Novex achieved a gross margin of 36% for the year ending May 31, 2002. The increase in gross margin during this period was attributable primarily to the discontinuation of certain lower margin products and some products that were associated with Novex' Canadian operation. Any further change in the gross margin will result directly from changes in product sales mix and sales volume. For the year ending May 31, 2002, the Company generated a loss from operations of $661,088. Included in this loss are non- recurring expenses of $20,275 that were paid to an investor relations group, $72,000 of royalty payments to the former Sta- Dri shareholders and $24,057 in sales commissions to former manufacturer's representatives that were terminated when the company entered into a marketing alliance with U.S. Anchor Corp. Also, in this period, the Company incurred non-cash charges for depreciation and amortization of $137,588. The aggregate of the non-recurring expenses and the non-cash expenses was $253,920. In addition, on account of Novex having been in a default position on its term loan with Dime Commercial Corp., raised its rate of interest during the entire fiscal year through May 31, 2002 which was approximately 2% over the referenced rate set forth in the loan agreements. Debt-related finance charges for the fiscal period 2002 were $347,266 and the Company had to issue 137,879 shares of the same class of preferred stock that is outstanding to the existing holders of the Company's preferred stock. The total of these finance-related charges equals $476,362. As of May 31, 2002, the Company had $710,608 in current assets, which consisted principally of accounts receivable of $386,218 and inventory of $156,284. The Company's net property, plant and equipment totaled $1,231,399 and goodwill of $628,784, which is attributable to the two acquisitions that the Company completed in 1999 and 2000. As of May 31, 2002, the Company had $3,665,360 in current liabilities, wich includes a bridge loan of $1,011,000 from an investment group that is also a shareholder and is represented on the Company's Board of Directors, a $704,000 term loan and a revolving line of credit of $572,310 with Dime Commercial Corp. that matured on August 13, 2002, but was called prematurely by the lender and has resulted in two separate lawsuits. It had accounts payable of $381,360, accrued expenses of $306,206 which includes accrued interest of $151,814. On October 10, 2002, the auditing firm of Radin, Glass & Co., LLP, of New York, the Certified Public Accounting firm for Novex issued an Auditors Report in which they said, among other statements: "The Company has suffered from recurring losses from operations, including a net loss of $965,481 for the year ended May 31, 2002, and has a negative working capital and shareholder deficiency as of May 31, 2002. These factors raise substantial doubt the Company's ability to continue as a going concern." OAKWOOD HOMES: S&P Downgrades Class B-2 Rating to D --------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the corporate guaranteed B-2 classes of four Oakwood Homes Corp. (Oakwood)-related manufactured housing transactions to 'D'. Concurrently, the ratings on various classes of 1994 and 2002 vintage Oakwood-related transactions are placed on CreditWatch with negative implications. In addition, the ratings on various other Oakwood-related transactions issued between 1995 and 2001, inclusively, remain on CreditWatch with negative implications, where they were placed on October 28, 2002. The lowered ratings reflect the unlikelihood that investors will receive timely interest payments and the ultimate repayment of their original principal investment. As reported in the November 2002 distribution reports, the subordinate B-2 certificateholders of Oakwood Mortgage Investors Inc.'s series 1997-A, 1997-B, 1997-C, and 1998-B experienced interest shortfalls totaling $76,612.87. These interest shortfalls represent rating defaults on the basis that these transactions failed to pay timely interest to certificateholders. Additionally, Standard & Poor's believes that B-2 interest shortfalls will continue to be prevalent in the future for the aforementioned transactions, given the failure of Oakwood (class B-2 guarantor) to make payments as required under the corporate guarantees, the adverse performance trends displayed by the underlying pools of manufactured housing retail installment contracts that secure the affected classes, and the location of B-2 interest at the bottom of the transaction payment priorities (after distributions of senior principal). Furthermore, as a result of the high level of losses experienced by the underlying collateral pools, all subordinated certificates have been written down significantly. In line with Oakwood's intention to file for Chapter 11 bankruptcy protection, on the November 2002 payment date, Oakwood Acceptance Corp. LLC, in its capacity as servicer, did not advance for delinquent payments and recovered all outstanding advances made in previous periods across all of its manufactured housing transactions. Consequently, in many cases, the funds available for distribution were depleted or insufficient to make full payments of interest to certificateholders located throughout the capital structure, including the senior classes of some deals. Although Oakwood's recovery of its previous advances created a one-time liquidity shortfall on the November 2002 payment date, given the senior priority afforded the rated certificates (except for the B-2 classes described above) in terms of interest distributions, Standard & Poor's expects that payments received during the November 2002 collection period will be sufficient to pay the full coupon due to investors on the December 2002 payment date in addition to covering any November 2002 payment date interest shortfalls (and accrued interest). The CreditWatch placements reflect Standard & Poor's concern regarding the impact that Oakwood's bankruptcy will have on servicing and, ultimately, transaction performance. Historically, when a seller/servicer has exited the manufactured housing originations business or declares bankruptcy, it has negatively impacted the seller/servicer's dealer relationships and, consequently, its ability to liquidate repossession inventory at maximum recovery rates, increasing loss severity. However, since Oakwood has been transitioning from a retail liquidation strategy to a wholesale liquidation strategy during the past 18 months, the impact of Oakwood's recent bankruptcy on transaction loss severity should be somewhat muted as many transactions have already displayed higher loss severity. Prior to declaring bankruptcy, approximately 60% of Oakwood's liquidations were through wholesale channels. Oakwood filed for Chapter 11 bankruptcy protection on Nov. 15, 2002 and has indicated that it has reached an agreement in principle with Berkshire Hathaway Inc., its largest senior unsecured creditor, to restructure its balance sheet. The proposed plan calls for the conversion of the company's $303 million of senior unsecured debt and its $275 million of corporate guarantee obligations on the subordinated bonds into 100% of the company's post-restructuring equity stake. As part of its restructuring, Oakwood closed five manufacturing plants and its loan origination operations in Texas on Nov. 14, 2002. Oakwood also intends to close approximately 75 retail locations, primarily located in Tennessee and Texas. Oakwood is in the process of petitioning the bankruptcy court to allow Oakwood Acceptance to assign its servicing rights to a new affiliate. That new affiliate would then sign a subservicing agreement with Oakwood Acceptance. By doing this, the servicing fee would move to a more senior position (currently subordinate) in the monthly transaction payment priority defined for each deal. Additionally, according to Oakwood, the servicing fee may increase to as much as 150 basis points per annum for some transactions originated after 1999. Oakwood announced on November 23, 2002 that it has reached an agreement in principle with Berkshire Hathaway Inc., Greenwich Capital Financial Products Inc., and Ranch Capital LLC to provide debtor in possession (DIP) financing while it completes its reorganization. The $215 million DIP facility, for which it expects to receive final court approval in mid-December, includes a $140 million line to be used for general corporate liquidity needs and a $75 million loan servicing advance line. Oakwood also has interim financing of up to $25 million until the proposed agreement receives final court approval. This facility will replace Oakwood's existing $65 million revolving credit facility and its $50 million loan servicing advance facility, thus providing the company with an additional $100 million in liquidity. Oakwood also announced that it has reached an agreement in principle for continued access to its existing $200 million loan purchase facility, which will allow its finance company to originate loans as usual. Amendments to the loan purchase facility permitting continued access have been executed and the facility is available to Oakwood. On October 28, 2002, the ratings on all classes of Oakwood- related manufactured housing transactions issued between 1995 and 2001 were placed on CreditWatch with negative implications based on the worse-than-expected performance of the underlying pools of manufactured housing contracts resulting from Oakwood's discontinuation of its loan assumption program and its shift to a wholesale liquidation strategy from a retail liquidation strategy. Standard & Poor's downgraded Oakwood to 'D' on Nov. 18, 2002. Standard & Poor's will continue to monitor the aforementioned transactions closely and complete a detailed review of the credit performance of these transactions relative to the remaining credit support in order to determine if any further rating actions are necessary. RATINGS LOWERED Oakwood Mortgage Investors Inc. Subordinate pass-through certificates Rating Series Class To From 1997-A B-2 D B- 1997-B B-2 D B- 1997-C B-2 D B- 1998-B B-2 D B- RATINGS PLACED ON CREDITWATCH WITH NEGATIVE IMPLICATIONS Oakwood Mortgage Investors Inc. Series 1994-A Rating Class To From A-2 AAA/Watch Neg AAA A-3 AA/Watch Neg AA OMI Trust 2002-A Rating Class To From A-1 AAA/Watch Neg AAA A-2 AAA/Watch Neg AAA A-3 AAA/Watch Neg AAA A-4 AAA/Watch Neg AAA A-IO AAA/Watch Neg AAA M-1 AA/Watch Neg AA M-2 A/Watch Neg A B-1 BBB/Watch Neg BBB OMI Trust 2002-B Rating Class To From A-1 AAA/Watch Neg AAA A-2 AAA/Watch Neg AAA A-3 AAA/Watch Neg AAA A-4 AAA/Watch Neg AAA A-IO AAA/Watch Neg AAA M-1 AA/Watch Neg AA M-2 A/Watch Neg A B-1 BBB/Watch Neg BBB OMI Trust 2002-C Rating Class To From A-1 AAA/Watch Neg AAA A-IO AAA/Watch Neg AAA M-1 AA/Watch Neg AA M-2 A/Watch Neg A B-1 BBB/Watch Neg BBB RATINGS REMAIN ON CREDITWATCH NEGATIVE Oakwood Mortgage Investors Inc. Series 1995-A Class Rating A-3 AAA/Watch Neg A-4 AAA/Watch Neg B-1 A-/Watch Neg Oakwood Mortgage Investors Inc. Series 1995-B Class Rating A-3 AAA/Watch Neg A-4 AAA/Watch Neg B-1 BBB/Watch Neg Oakwood Mortgage Investors Inc. Series 1996-A Class Rating A-3 AAA/Watch Neg A-4 AA+/Watch Neg Oakwood Mortgage Investors Inc. Series 1996-B Class Rating A-4 AAA/Watch Neg A-5 AAA/Watch Neg A-6 AA/Watch Neg Oakwood Mortgage Investors Inc. Series 1996-C Class Rating A-5 AAA/Watch Neg A-6 AA+/Watch Neg Oakwood Mortgage Investors Inc. Series 1997-A Class Rating A-4 AAA/Watch Neg A-5 AAA/Watch Neg A-6 AA/Watch Neg B-1 BBB/Watch Neg Oakwood Mortgage Investors Inc. Series 1997-B Class Rating A-4 AAA/Watch Neg A-5 AAA/Watch Neg M-1 AA/Watch Neg B-1 BBB/Watch Neg Oakwood Mortgage Investors Inc. Series 1997-C Class Rating A-3 AAA/Watch Neg A-4 AAA/Watch Neg A-5 AAA/Watch Neg A-6 AAA/Watch Neg M-1 AA/Watch Neg B-1 BBB/Watch Neg Oakwood Mortgage Investors Inc. Series 1998-A Class Rating A-4 AAA/Watch Neg A-5 AAA/Watch Neg M-1 AA/Watch Neg B-1 BBB/Watch Neg Oakwood Mortgage Investors Inc. Series 1998-B Class Rating A-3 AAA/Watch Neg A-4 AAA/Watch Neg A-5 AAA/Watch Neg M-1 AA/Watch Neg M-2 A/Watch Neg B-1 BBB/Watch Neg Oakwood Mortgage Investors Inc. Series 1998-D Class Rating A AAA/Watch Neg A-1ARM AAA/Watch Neg OMI Trust 1999-C Class Rating A-2 AAA/Watch Neg M-1 AA-/Watch Neg M-2 BBB+/Watch Neg B-1 BB+/Watch Neg OMI Trust 1999-D Class Rating A-1 AAA/Watch Neg M-1 AA/Watch Neg M-2 A/Watch Neg B-1 BBB/Watch Neg OMI Trust 1999-E Class Rating A-1 AAA/Watch Neg M-1 AA/Watch Neg M-2 A/Watch Neg OMI Trust 2000-A Class Rating A-2 AAA/Watch Neg A-3 AAA/Watch Neg A-4 AAA/Watch Neg A-5 AAA/Watch Neg M-1 AA/Watch Neg M-2 A/Watch Neg B-1 BBB/Watch Neg OMI Trust 2000-B Class Rating A-1 AAA/Watch Neg M-1 AA/Watch Neg B-1 BBB/Watch Neg OMI Trust 2000-C Class Rating A-1 AAA/Watch Neg M-1 AA/Watch Neg M-2 A/Watch Neg B-1 BBB/Watch Neg OMI Trust 2000-D Class Rating A-1 AAA/Watch Neg A-2 AAA/Watch Neg A-3 AAA/Watch Neg A-4 AAA/Watch Neg M-1 AA/Watch Neg M-2 A/Watch Neg B-1 BBB/Watch Neg OMI Trust 2001-C Class Rating A-1 AAA/Watch Neg A-2 AAA/Watch Neg A-3 AAA/Watch Neg A-4 AAA/Watch Neg A-IO AAA/Watch Neg M-1 AA/Watch Neg M-2 A/Watch Neg B-1 BBB/Watch Neg OMI Trust 2001-D Class Rating A-1 AAA/Watch Neg A-2 AAA/Watch Neg A-3 AAA/Watch Neg A-4 AAA/Watch Neg A-IO AAA/Watch Neg M-1 AA/Watch Neg M-2 A/Watch Neg B-1 BBB/Watch Neg OMI Trust 2001-E Class Rating A-1 AAA/Watch Neg A-2 AAA/Watch Neg A-3 AAA/Watch Neg A-4 AAA/Watch Neg A-IO AAA/Watch Neg M-1 AA/Watch Neg M-2 A/Watch Neg B-1 BBB/Watch Neg OCEAN POWER: Hires Halperin & Associates as Bankruptcy Counsel -------------------------------------------------------------- Ocean Power Corporation wants to retain Halperin & Associates as its bankruptcy counsel to prosecute its chapter 11 restructuring. The Debtor tells the U.S. Bankruptcy Court for the Southern District of New York that it selected Halperin & Associates because of the Firm's considerable experience in reorganization and insolvency proceedings of this nature. As Counsel to the Debtors, Halperin & Associates will: a. advise the Debtor with respect to its powers and duties as a debtor-in-possession in the continued operation of its business and the management of its property; b. assist the Debtor to emerge from the chapter 11 case; c. assist the Debtor in confirming a plan of reorganization in this case; d. prepare, on behalf of the Debtor, necessary applications, answers, orders, reports and other motions, complaints, pleadings and documents; e. appear before the Bankruptcy Judge and the United States Trustee and to represent the interests of the Debtor before said Bankruptcy Judge and the United States Trustee; and f. perform any and all other legal services for the Debtor that may be necessary and appropriate herein; Alan D. Halperin, Esq., submits that he, his partners and his Firm are "disinterested" as that term is used in 11 U.S.C. Sec. 101(14). Halperin & Associates will charge the Debtor for services at its regular hourly rates: attorneys $275 to $135 per hour law clerks $100 per hour paraprofessionals $75 to $60 per hour Ocean Power Corporation, aka PTC Group, aka PTC Holdings, Inc., was formed to develop and manufacture modular seawater desalination and power plants. The Company filed for chapter 11 protection on December 1, 2002. When the Company filed for protection from its creditors, it listed $1,465,024 in total assets and $24,012,243 in total debts. PCNET INT'L: Creditors Unanimously Approve Plan of Arrangement -------------------------------------------------------------- PCNET International Inc. (TSX-V: PCT) announced that all classes of its creditors have voted 100% in favor of accepting its proposed Plan of Arrangement and Compromise. The implementation of the plan is subject to court review and approval which is scheduled for December 13, 2002. "PCNET would like to thank its key stakeholders; subscribers, creditors and employees for their outstanding support through the CCAA process to date. PCNET is looking forward to an expedient conclusion of the remaining CCAA process". says Brad Williams, President and CFO. Peter Casson, PCNET's CEO adds, "Our successful conclusion to the CCAA process will position us to effectively and aggressively continue with the implementation of our strategic business plan. This is a very exciting time for PCNET". PCNET International Inc. (TSX-V: PCT) is a leading Internet Access Provider with its head office in Victoria British Columbia. Since its inception in 1995, PCNET has grown to be one of Western Canada's largest ISPs. PCNET provides a full range of retail and wholesale Internet services including dial- up and high speed Internet access, website hosting, server co- location and computer hardware sales. PENTON MEDIA: NYSE Accepts Plan to Meet Listing Requirements ------------------------------------------------------------ Penton Media, Inc., (NYSE:PME) announced that the New York Stock Exchange has accepted the Company's proposed business plan for returning to compliance with all of the NYSE's continued listing standards. The standards include: a $1.00 share price and a $1.00 average share price over a consecutive 30-trading-day period; an average market capitalization of not less than $50 million over a 30- trading-day period; and stockholders' equity of not less than $50 million. With the acceptance of the plan, Penton will continue to be listed on the NYSE, subject to quarterly monitoring by the NYSE for progress against the Company's goals as outlined in the plan. Failure to achieve the plan's financial and operational goals will result in the Company being subject to NYSE trading suspension and delisting. Penton Media is a leading, global business-to-business media company that produces market-focused magazines, trade shows and conferences, and a broad offering of online media products. Penton's integrated media portfolio serves the following industries: Internet/broadband; information technology; electronics; natural products; food/retail; manufacturing; design/engineering; supply chain; aviation; government/compliance; mechanical systems/construction; and leisure/hospitality. * * * As previously reported in Troubled Company Reporter, Standard & Poor's revised its outlook on business-to-business media company Penton Media Inc., to negative from developing due to additional concerns about the company's profitability in light of continued revenue declines and the operating difficulties of key end markets. Standard & Poor's also affirmed its existing ratings on Penton, including its single-B-minus corporate credit rating. Outlook Ratings could be lowered if Penton fails to maintain adequate liquidity to fund its operations during this difficult operating environment. Ratings List: To: From: Penton Media Inc. * Corporate credit rating B-/Negative/-- B-/Dev/-- * Senior secured debt rating B- * Subordinated debt rating CCC PUTNAM: Fitch Places Fixed Rate Note Ratings on Watch Negative -------------------------------------------------------------- Fitch Ratings has placed Putnam CBO II on Rating Watch Negative. The transaction is backed by a portfolio of high yield bonds. Fitch has taken the action after reviewing the performance of the transaction. Increased level of defaults and deteriorating credit quality have increased the credit risk of this transaction to the point the risk may no longer be consistent with the ratings. The following classes have been placed on Rating Watch Negative: Putnam CBO II, Ltd. --senior secured fixed-rate notes 'AA'; --second priority senior secured fixed-rate notes 'CC'. SAFETY-KLEEN CORP: Plans to Line-Up $250 Million Exit Financing --------------------------------------------------------------- Amounts due under the DIP Facility must be repaid on the earlier of March 31, 2003, or the effective date of the Plan. Safety- Kleen Corp., and its debtor-affiliates tell creditors in the disclosure statement explaining their proposed plan of reorganization that they intend to finalize the material terms of a new revolving credit facility before the Confirmation Date. The Reorganized Debtors expect to sign a new $250,000,000 Exit Facility, with a $125,000,000 sublimit for letters of credit. The proceeds from the Exit Facility will be used to repay the DIP Facility, make other required payments under the Plan, and conduct their post-reorganization operations. This Exit Facility will be secured by a first lien on substantially all of the assets of the Reorganized Debtors. The Debtors will use availability under this Exit Facility to provide for the release of the Lenders' obligations on prepetition letters of credit outstanding as of the Effective Date, with the exception of letters of credit posted in favor of Frontier Insurance Company, for which the Debtors will use their reasonable, best efforts to cause their release. (Safety-Kleen Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 609/392-0900) SAKS INC: Reports 7% Comparable Store Sales Decline in November --------------------------------------------------------------- Retailer Saks Incorporated (NYSE: SKS) announced that comparable store sales for the four weeks ended November 30, 2002 compared to the four weeks ended December 1, 2001 decreased 7.0% on a total company basis. By segment, comparable store sales decreased 8.1% for SDSG and decreased 5.1% for SFAE for the month. November 2002 comparable store sales were negatively affected by a shift in the retail-reporting calendar, with only two post- Thanksgiving shopping days included in the month of November 2002, compared to nine post-Thanksgiving days in November 2001. Both SDSG and SFAE had significantly lower levels of clearance inventory than one year ago. At SFAE, the "Act I" designer sale event was repositioned from November last year into December this year due to substantially reduced levels of clearance merchandise. Sales for the first three weeks of the month were below plan. However, sales momentum built in the final week of the month with the company generating a comparable store sales increase of mid-single digits in the fourth week. In November 2001, comparable store sales increased 3.5% for SDSG, 1.8% for SFAE, and 2.9% on a total company basis. Merchandise categories with the best sales performances for SDSG in November were decorative and soft home, accessories, outerwear, and women's better and special size sportswear. Categories with softer sales performances for SDSG in November were junior's apparel, men's sportswear and furnishings, intimate apparel, and hard home. Categories with the best sales performances for SFAE in November were men's dress furnishings, jewelry, accessories, cosmetics, handbags, "gold range" women's apparel, and European designer collections. Categories with the softest sales performances for SFAE in November were women's designer, bridge, and contemporary sportswear; American designer collections; men's sportswear; and women's petite apparel. Saks Incorporated operates Saks Fifth Avenue Enterprises (SFAE), which consists of 61 Saks Fifth Avenue stores and 52 Saks Off 5th stores. The Company also operates its Saks Department Store Group (SDSG) with 245 department stores under the names of Parisian, Proffitt's, McRae's, Younkers, Herberger's, Carson Pirie Scott, Bergner's, and Boston Store. * * * As reported in Troubled Company Reporter's July 30, 2002 edition, Fitch Ratings affirmed its 'BB+' rating of Saks Incorporated's $700 million bank facility and its 'BB-' rating of the company's senior notes. Approximately $1.2 billion of senior notes are affected by the action, which follows Saks' announcement that it has agreed to sell its credit card receivables to Household International. The Rating Outlook remains Negative. The ratings reflect Saks' solid position within its markets balanced against its weak operating results and high financial leverage. Saks' operations have been pressured by soft apparel sales and growing competition from specialty and discount retailers. SANMINA-SCI CORP: S&P Downgrades Corporate Credit Rating to BB- --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Sanmina-SCI Corp to 'BB-' from 'BB' and its subordinated note ratings to 'B' from 'B+'. At the same time, Standard & Poor's assigned a 'BB' bank loan rating to the proposed $250 million senior secured credit facility due 2007, and a 'BB-' rating to the proposed $450 million of senior secured notes due 2009. The previous senior secured bank loan rating is withdrawn. The ratings outlook is stable. Total debt is $2.1 billion. The rating action is based on weak credit measures for the rating and the likelihood that profitability will remain depressed over the intermediate term, largely due to sluggish demand in major end markets. San Jose, California-based Sanmina-SCI is a leading provider of electronic manufacturing services for the computing, telecommunications and data communications industries. Proceeds from the debt issue and term loan will be used to repay debt under its existing credit facility, repay the outstanding balance under its receivables securitization facility, refinance or restructure its other debt, and fund further expansion of its business and working capital. "We recognize that the transaction offers the benefits of enhanced liquidity and extension of near- to intermediate-term debt maturities," said Standard & Poor's credit analyst Andrew Watt. The most recent restructuring actions are expected to improve capacity utilization while reducing operating costs by about $200 million annually. These actions as well as potential new business should improve operating performance in 2003 SEVEN SEAS PETROLEUM: Has Until Today to Cure Potential Default --------------------------------------------------------------- Seven Seas Petroleum Inc., (Amex: SEV) said that in connection with its continuing efforts to sell its producing properties in Colombia, the Company has obtained an extension of time to cure a potential default under its Note Purchase and Loan Agreement with Chesapeake Energy Corporation until the close of business today, December 9, 2002. This extension applies to the Company's previously announced failure to make the $6,875,000 semiannual interest payment on its 12.5% $110 Million Senior Subordinated Notes due November 15, 2002. Seven Seas Petroleum Inc., is an independent oil and gas exploration and production company operating in Colombia, South America. Seven Seas Petroleum Inc.'s 12.500% bonds due 2005 (SEV05USR1), DebtTraders reports, are trading between 42 and 45 cents-on-the- dollar. See http://www.debttraders.com/price.cfm?dt_sec_ticker=SEV05USR1for real-time bond pricing. SIMULA: Kennedy Capital Management Discloses 10.6% Equity Stake --------------------------------------------------------------- Kennedy Capital Management, Inc., a Missouri corporation, beneficially owns 1,375,300 shares of the common stock of Simula Inc., representing 10.6% of the outstanding common stock shares of the Company. Kennedy Capital has sole powers to vote and/or dispose of the shares so held. As of September 30, 2002, Simula Inc.'s total shareholders equity deficit of about $2.7 million. SLOAN'S AUCTION: Files Chapter 11 Petition in Greenbelt, Md. ------------------------------------------------------------ Sloan's Auction Galleries Ltd. filed for protection from creditors under chapter 11 of the U.S. Bankruptcy Code. The 153-year-old auction house estimates it has $500,000 to $1 million in assets and owes consignors and other creditors between $1 million and $10 million. "This is absolutely not the death of Sloan's," Colin R. Clarke, acting president of Sloan's, who was named to the post two weeks ago, told Dana Hedgpeth at the Washington Post. "This gives us the time to try to raise additional capital." The company is hopeful it'll find an outside equity investor or merger partner. Sloan's chapter 11 case, number 02-23901, pends before the U.S. Bankruptcy Court for the District of Maryland in Greenbelt and was assigned to Judge Duncan W. Kier. Bradford F. Englander, Esq., at Linowes and Blocher LLP in Silver Springs, Maryland, serves as the Company's bankruptcy counsel. In its first day pleadings, the company asks for Court approval of post-petition cash management procedures, continuing authority to honor credit card agreements, and permission to retain and employ Maryland First Financial Services Corporation as its Financial Advisor and Escrow and Disbursement Agent. These requests come before Judge Kier on Dec. 9 at 10:00 a.m. SOLECTRON: Will Announce First Quarter 2003 Results on Dec. 19 -------------------------------------------------------------- Solectron Corporation (NYSE: SLR), a leading provider of electronics manufacturing and supply-chain management services, will announce its first quarter fiscal 2003 earnings at 1:30 p.m. PT/4:30 p.m. ET on Dec. 19. You are invited to listen to the company's regularly scheduled conference call live on the Internet at 2:00 p.m. PT/5:00 p.m. ET. The news release and market-specific information about the company's earnings will be posted by 2:00 p.m. PT/5:00 p.m. ET on the company's Web site at http://www.solectron.com/investor What: Solectron Corporation Q1 Fiscal 2003 Earnings Conference Call and Webcast When: Thursday, Dec. 19 - 2:00 p.m. PT/5:00 p.m. ET Web address: http://www.firstcallevents.com/service/ajwz370607993gf12.html How: If you choose to listen live over the Internet, log on to the Web at the address above. You may register for the call on this Web site anytime prior to Thursday, Dec. 19 -- 2:00 p.m. PT/5:00 p.m. ET. Playback: If you are unable to participate during the live Webcast, the call will be archived at http://www.solectron.com/investor A taped replay will also be available Dec. 19, one hour after the conclusion of the call, through Jan. 2, 2003. To access the replay, call 800-642-1687 from within the United States, or 706- 645-9291 from outside the United States, and specify password "6760528". Solectron -- http://www.solectron.com-- provides a full range of global manufacturing and supply-chain management services to the world's premier high-tech electronics companies. Solectron's offerings include new-product design and introduction services, materials management, high-tech product manufacturing, and product repair and end-of-life support services. Solectron, the first two-time winner of the Malcolm Baldrige National Quality Award, has a full range of industry- leading supply-chain services on five continents. Its headquarters are in Milpitas, California. * * * As reported in Troubled Company Reporter's March 27, 2002 edition, Fitch Ratings lowered Solectron Corporation's ratings as follows: senior bank credit facility from 'BBB-' to 'BB', senior unsecured debt from 'BBB-' to 'BB', and the Adjustable Conversion Rate Equity Security Units from 'BB+' to 'B+'. The Rating Outlook remains Negative. The downgrades reflect the prolonged, significant reduction in demand from Solectron's customers, which continues to weaken operational performance and credit protection measures. In addition, with the delay in new business as customers defer ramping new projects in the face of continuing weak end-markets, Fitch believes any sustainable recovery will not materialize in 2002. The ratings also consider Solectron's top-tier position in the electronic manufacturing services industry, diversity of end-markets and geographies, recent improvements in its capital structure, solid cash position, and recent working capital improvements albeit in an industry downturn. The Negative Rating Outlook indicates that if adverse market conditions persist, outsourcing contracts do not materialize from new customers, the company makes significant cash acquisitions, or if it is unsuccessful in execution of planned cost reductions the ratings may continue to be negatively impacted. SOLUTIA: Fitch Affirms Sr. Sec. Facility & Note Ratings at BB-/B ---------------------------------------------------------------- Fitch Ratings has affirmed the ratings of Solutia Inc. Fitch currently rates Solutia's senior secured bank facility at 'BB-' and senior secured notes at 'B'. The Rating Outlook is Negative. Solutia has recently announced that it has signed a definitive agreement to sell its resins, additives and adhesives business to UCB S.A. for $500 million. Although the application of net sale proceeds toward debt reduction could be significant, Solutia would be loosing a solid EBITDA-contributing business and interest coverage may only be mildly affected. In addition, the company still faces challenging industry conditions and the unknown impact of the final resolution to ongoing polychlorinated biphenyl-related litigation. Solutia is a specialty chemical company with $2.8 billion in sales in 2001. This diverse company produces films, resins, and nylon plastics and fibers for domestic and international markets. Some of Solutia's products are name brands, such as Saflex plastic interlayer for windows and Wear-Dated carpet fibers. End-use markets for Solutia's products include construction and home furnishings, automotive, aviation/transportation, electronics, and pharmaceuticals. SPECTRASITE HOLDINGS: Files Plan & Disclosure Statement in N.C. --------------------------------------------------------------- SpectraSite Holdings, Inc., filed its Chapter 11 Plan of Reorganization and a Disclosure Statement providing a comprehensive explanation of the plan with the U.S. Bankruptcy Court for the Eastern District of North Carolina. Full-text copies of the Plan and the Disclosure Statement are available for a fee at: http://www.researcharchives.com/bin/download?id=021204032727 and http://www.researcharchives.com/bin/download?id=021204031637 Prior to the commencement of the Chapter 11 Case, an informal committee of certain major holders of the Debtor's Senior Notes was organized. The members of the Prepetition Noteholders Committee held approximately 66% of the outstanding principal amount of the Senior Note Claims. The Debtor relates that it has extensive negotiation with the Committee and its professional advisors. This Plan was proposed in cooperation with the Prepetition Noteholders Committee, the Debtor submits. The Debtor further assures the Court that the Prepetition Noteholders Committee and its professional advisors unanimously approve the Plan and have advised that all of its members intend to vote in favor of the Plan. To achieve what the Debtor believes is the highest value for holders of Claims and Equity Interests, the Plan contemplates: 1) the payment in full, or otherwise unimpaired treatment of (a) Priority Tax Claims, (b) Other Priority Claims, (c) Senior Secured Guaranty Claims, (d) Other Secured Claims and (e) Other Guaranty Claims; 2) Cash payment to holders of Allowed Unsecured Claims of less than $25,000 or to those holders of claims who elect to reduce their Claims to $25,000; 3) the Pro Rata distribution of $23,750,000 shares of New Common stock to holders of Allowed General Unsecured Claims of more than $25,000; 4) the Pro Rata distribution of 100% of the New Warrants to acquire up to 1,250,000 shares of the New Common Stock to holders of Old Common Stock; 5) no distribution to holders of Subordinated Security Claims; and 6) the cancellation of Other Equity Interests in the Debtor. Spectrasite Holdings, Inc., is a holding company incorporated in Delaware whose principal asset is 100% of the common stock of SpectraSite Communications, Inc., a telecommunication company. The Company filed for chapter 11 protection on November 15, 2002. Andrew N. Rosenberg at Paul, Weiss, Rifkind, Wharton & Garrison represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $742,176,818 in total assets and $1,739,522,826 in total debts. STELCO INC: Consolidates Nanticoke & Hamilton Operations -------------------------------------------------------- Stelco Inc. announces a restructuring of its two integrated steel operations located in Hamilton, Ontario, and Nanticoke, Ontario, into one business named Stelco Integrated Steel Business. It will consist of Stelco's two integrated steel plants, Stelco Hamilton, and Stelco Lake Erie. Stelco's Integrated Steel Business will be led by M. R. (Marcel) Francoeur, Senior Vice President - Operations, Stelco Inc., and W. G. (Bill) Missen, Senior Vice President - Commercial, Stelco Inc. These gentlemen will report to J. C. (Jim) Alfano, President and Chief Executive Officer, Stelco Inc. Mr. Alfano stated, "This restructuring of Stelco's Integrated Steel Business is facilitated by the excellent progress we have made in executing our strategic plan over the past six years. Over $900 million has been invested in new technology and facility upgrades at the two integrated steel plants, resulting in significant improvements in productivity, quality, and cost reduction. Stelco Lake Erie's steelmaking capacity has been expanded by 34 percent and hot strip rolling by 60 percent. Stelco Hamilton's operations have been modernized and streamlined, reducing cost and enhancing our value-added products capability. We have strengthened our position as a leading North American integrated steel business. "Going forward, our focus will be on continued performance improvement of our Integrated Steel Business to drive improved financial results and grow our business. This can best be accomplished by running one integrated steel business and deriving the maximum operational synergy from the two facilities. "The restructuring of Stelco Inc.'s Integrated Steel Business will support our key objectives of improved quality and service to our customers, increased returns to our shareholders, and enhanced opportunities for our employees to grow and develop." Stelco Inc. is Canada's largest and most diversified steel producer. Stelco is involved in all major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. Stelco has a presence in six Canadian provinces and two states of the United States. Consolidated net sales in 2001 were $2.6 billion. * * * As reported in the Troubled Company Reporter's January 15, 2002 edition, Standard & Poor's assigned its single-'B' subordinated debt rating to Stelco Inc.'s CDN$90 million convertible subordinated debt issue due February 1, 2007. At the same time, Standard & Poor's assigned its preliminary double-'B'-minus senior unsecured debt rating and preliminary single-'B' subordinated debt rating to the company's CDN$300 million shelf. In addition, the ratings outstanding on the company, including the double-'B'-minus corporate credit rating, were affirmed. The outlook is negative. The ratings on Stelco reflect a weakened financial profile due to the effect of the ongoing economic downturn and the prevailing difficult steel industry conditions on its financial results, offset by the company's fair business position. US AIRWAYS: Wachovia Demands Payment for Administrative Expenses ---------------------------------------------------------------- Wachovia Bank, N.A., formerly known as First Union National Bank, seeks allowance and payment of administrative expenses in the Chapter 11 cases US Airways Group Inc., and its debtor- affiliates, pursuant to Section 503(a) and (b) of the Bankruptcy Code. Wachovia is a national bank headquartered in Charlotte, North Carolina. The Debtors are the lessees of Aircraft and Engines under 42 leases assigned to Wachovia in its capacity as indenture trustee or equipment trust trustee under 42 corresponding Equipment Trust Agreements. Wachovia also has a security interest in the Wachovia Aircraft and Engines. Peter A. Ivanick, Esq., at LeBoeuf, Lamb, Greene & MacRae, reminds Judge Mitchell that the Debtors have rejected leases for nine of the Wachovia Aircraft and Engines. Additionally, between August 11, 2002 and the lease rejection dates, the Wachovia Aircraft and Engines remained in the Debtors' possession and the Debtors continued to receive the benefits to which they were entitled under the Leases. Despite operating the Aircraft, the Debtors have made no payments to Wachovia under the Leases since August 11, 2002. Mr. Ivanick reports that the aggregate amount due and unpaid on account of the Debtors' postpetition use of the Wachovia Aircraft and Engines subject to the Leases is $2,520,199.94. The Postpetition Indebtedness is an actual, necessary cost and expense of preserving the estate as described in Section 503(b) and constitutes an administrative expense. Mr. Ivanick asserts that Wachovia is entitled to immediate payment of the Postpetition Indebtedness as an administrative expense. Accordingly, Wachovia asks the Court for an order: -- allowing it an administrative expense claim for $2,520,199.94; -- requiring the Debtors to immediately pay this administrative expense claim. (US Airways Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 609/392-0900) DebtTraders reports that US Airways Inc.'s 10.375% bonds due 2013 (U13USR2) are trading between 10 and 20. See http://www.debttraders.com/price.cfm?dt_sec_ticker=U13USR2for real-time bond pricing. UAL CORP: Loan Guaranty Rejection Spurs Corp. Credit Cut to D ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit ratings on UAL Corp. and subsidiary United Air Lines Inc. to 'D' from 'CCC-' following the rejection by the Air Transportation Stabilization Board (ATSB) of United's application for a federal loan guaranty. The ratings on United's senior unsecured debt were also lowered to 'C' from 'CC'. The implications on the CreditWatch listing for all debt issues were revised to negative from developing. "The ATSB's decision will almost certainly lead to a Chapter 11 bankruptcy filing by UAL and United as soon as United has completed arrangements for debtor-in-possession financing," said Standard & Poor's credit analyst Philip Baggaley. "The downgrade of UAL's and United's corporate credit ratings to 'D' reflect United's continuing payment default on about $920 million of debt and, with the ATSB's action yesterday, the disappearance of any realistic possibility of the defaults being cured before grace periods expire on the debt," Mr. Baggaley continued. Although the ATSB described the loan guaranty rejection as not being final, United does not have time to develop and secure approval for more substantial cost reductions before it runs short of cash and grace periods on deferred debt payments expire. Once debtor-in-possession financing is arranged, UAL and United should be able to reorganize in Chapter 11, assuming no serious damage to airline revenues relating to a war in Iraq or terrorism, but the bankruptcy process could be long and difficult. Standard & Poor's ratings on United's senior unsecured debt will be lowered to 'D' upon a bankruptcy filing. Ratings of aircraft- backed debt and airport revenue bonds are being reviewed and may be lowered before or upon bankruptcy, depending on prospects for continued payment and recovery for each debt issue. United Airlines' 10.670% bonds due 2004 (UAL04USR1) are trading between 11 and 12.5. See http://www.debttraders.com/price.cfm?dt_sec_ticker=UAL04USR1for real-time bond pricing. UNITED AIRLINES: Continental Applaud ATSB for 'Right' Decision -------------------------------------------------------------- Continental Airlines (NYSE: CAL) issued the following statement in response to the Air Transportation Stabilization Board's decision to deny a federal loan guarantee for United Air Lines: "The U.S. government did the right thing for the taxpayers and for competition by letting the marketplace determine winners and losers." UNITED AIRLINES: Traffic Up 7.7% as Load Factor Rises to 69.2% -------------------------------------------------------------- United Airlines' (NYSE: UAL) total scheduled revenue passenger miles rose 7.7 percent in November vs. the comparable month in 2001 as capacity was increased 6.7 percent. The carrier's passenger load factor came in at 69.2 percent, up from 68.5 percent a year ago. "United carried robust traffic over the Thanksgiving holiday weekend," said Chris Bowers, senior vice president - marketing and sales. "With the late Thanksgiving this year, our holiday traffic was divided between late November and early December. We set a company record on Sunday, Dec. 1, with a passenger load factor of 90.5 percent. And our on-time performance so valued by our customers continued to be excellent, as has been the case at United all year. In fact, United ranked first in the U.S. Department of Transportation Air Travel Consumer Report of all major airlines for on-time performance in October that were released earlier this week." United operates nearly 1,800 flights a day on a route network that spans the globe. News releases and other information about United may be found at the company's Web site at http://www.united.com UNITED AIRLINES: Assuring Customers Planes Will Keep Flying ----------------------------------------------------------- United Airlines' marketing folks were busy last week distributing notes by e-mail to reassure frequent flyers that planes will keep flying regardless of what happens on the legal and financial fronts: December 5, 2002 Dear [United Airlines Traveler]: It is no secret that things have been tough at United. We were disappointed to learn yesterday that the Airline Transportation Stabilization Board (ATSB) could not approve the proposal submitted by United for a $1.8 billion federal loan guarantee. Whatever course we now chart with the company, I want to be emphatically clear that United will continue to fly and deliver exceptional service to customers worldwide. And, as a Mileage Plus(R) member, you can continue to accrue and redeem miles with confidence. Challenging times make a company stronger, leaner and more focused. The employees of this airline stand ready and committed to serve you today and in the future. Thank you for your support and we'll keep you posted. Sincerely, Chris Bowers Senior Vice President Marketing and sales WA TELECOM: Verso Obtains Court Nod to Pay for NACT Acquisition --------------------------------------------------------------- Verso Technologies, Inc. (NASDAQ: VRSO), an integrated communications solutions company, has received the approval of the Bankruptcy Court having jurisdiction over WA Telcom's pending Chapter 11 reorganization proceedings to pay the amounts owed to WA Telcom, from which Verso purchased NACT Telecommunications, Inc. On November 7, 2002, the company announced that it had negotiated the early retirement of the secured note payable related to Verso's acquisition of NACT and the outstanding balances of other accrued liabilities for discounted amounts. The company estimates that the combined savings from satisfying these liabilities in this manner will be approximately $700,000. The resulting improvement to the company's balance sheet will be reflected in its fourth quarter financial reporting. The company will satisfy these liabilities using the proceeds from the company's previously announced $3.0 million private placement financing, which is now complete. Please see related press release dated November 7, 2002. Verso Technologies provides integrated switching and solutions for communications service providers who want to develop IP- based services with PSTN scalability and quality of service. Verso's unique, end-to-end native SS7 capability enables customers to leverage their existing PSTN investments by ensuring carrier-to-carrier interoperability and rich billing features. Verso's complete VoIP migration solutions include state-of-the-art hardware and software, OSS integration, the industry's most widely used applications and technical training and support. For more information about Verso Technologies, contact the company at http://www.verso.com WARNACO GROUP: Seeking Approval on Speedo Settlement Agreement -------------------------------------------------------------- Pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure and Sections 363 and 365 of the Bankruptcy Code, The Warnaco Group, Inc., and its debtor-affiliates ask the Court for: (a) approval of the Settlement Agreement by and among Authentic Fitness Corporation, Authentic Fitness Products, Inc., Warnaco, Inc., The Warnaco Group, Inc. and Speedo International Limited; (b) authority to enter into the Settlement Agreement; and (c) authority to assume the Amended License Agreements. J. Ronald Trost, Esq., at Sidley Austin Brown & Wood LLP, in New York, relates that AFC uses the Speedo trademarks through certain license agreements with Speedo. The current license agreements were entered into on May 10, 1990 and amended at various times subsequently. More than half of AFC's revenue comes from Speedo-branded products. On September 12, 2000, Speedo filed a complaint and jury demand in the U.S. District Court for the Southern District of New York against AFC, Warnaco, Inc. and Warnaco Group seeking damages and a declaratory judgment entitling it to terminate the Speedo Licenses due to AFC's alleged defaults. The Debtors denied the allegations. The Action is now stayed due to the Debtors' Chapter 11 cases. Mr. Trost recalls that Speedo sought for relief from the automatic stay in this Court. However, the motion was denied. Under the Amended Plan of Reorganization, the Debtors will assume the Speedo Licenses. However, absent a compromise as contemplated under the Settlement Agreement, the Debtors' intention to assume the Speedo Licenses under the Plan would likely result in continuing litigation between the Parties. The Debtors have denied all of the material allegations contained in the District Court Action. The Debtors have asserted that they have no liability to Speedo and Speedo is not entitled to terminate the Speedo Licenses. Fortunately, Mr. Trost relates, the parties have reached a mutual agreement to amicably resolve the disputes between them by entering into a settlement agreement to: (i) avoid the costs and risk of protracted litigation, (ii) ensure that the right of all parties to the Speedo License are clear and uninterrupted, and (iii) facilitate the confirmation and consummation of the Plan, without any admission of wrongdoing or liability by any party. Once the Court approves the Settlement Agreement, the Parties will simultaneously enter into an amendment to the Speedo Licenses and a Web Site Agreement. Due to the confidentiality of the information, the Debtors sought and obtained the Court's approval to file the Amendment to the License Agreements and the Web Site Agreement under seal. The principal terms of the Settlement Agreement are: (a) Speedo will withdraw all pending claims, objections and actions, and dismiss with prejudice all litigation, against AFC, Warnaco Group and Warnaco, Inc., including the District Court Action. The Parties will be bound by mutual general releases; (b) AFC will pay Speedo $2,057,866 to resolve all royalty and other claims relating to the Speedo Licenses to and through June 30, 2002; (c) AFC will reimburse Speedo $500,000 in legal fees; (d) AFC will assign to Speedo its SPEEDO.com and other Speedo domain names. AFC will, after a reasonable transition period, rename its web sites to another Speedo derivative. Speedo will provide "a hot link" from its new SPEEDO.com site to AFC's renamed web site; (e) Effective July 2003, the percentage royalty rate on New Sales under the Speedo Licenses will increase by 0.5% on New Sales exceeding $125,000,000; (f) AFC will be granted the right to sell fashion swimwear under its Ralph Lauren and Anne Cole brands and to sell non-Speedo apparel, accessories and other products in its Speedo Authentic Fitness Retail Stores; (g) The License Amendments will amend the Speedo Licenses to, inter alia, clarify certain rights and obligations and implement certain procedures to avoid future controversies including, among other things, changing the governing law of the Speedo License for the law of New South Wales, Australia and other specified jurisdictions to New York law; and (h) AFC will assume the Speedo Licenses, as amended, and supplemented by the License Amendments, and Speedo will not object to the assumption. Mr. Trost asserts that the Court should approve the Settlement Agreement because it is in the Debtors' best interest, under these Second Circuit factors: (a) Although the Debtors believe that they have strong arguments in opposition to Speedo's claims and in support of the assumption of the Speedo Licenses under the Plan, the litigation could be complex and protracted, with an outcome that is not absolutely certain; (b) the litigation with respect to assumption to the Speedo Licenses under the Plan could be complex and most likely will result in substantial legal fees and expenses; (c) the approval is in the paramount interest of creditors as it fully and finally resolves any disputes between the parties including the District Court Action and avoids any issues relating to the assumption of the Speedo Licenses. Moreover, the cost to the estates is relatively insignificant while the Debtors will be assured of its retention of the Speedo License and therefore, will enable them to maintain ongoing important relationships with suppliers and customers, avoid disruption of business and employee activities, and maintain uninterrupted sales. In addition, the Settlement Agreement will assist the Debtors to accomplish a consensual confirmation of their Plan on an expedited basis; and (d) the Parties negotiated the Settlement Agreement at arm's length and in good faith. Moreover, Mr. Trost contends that the assumption of the Amended Speedo Licenses is warranted since it is one of the Debtors' main assets. Furthermore, Mr. Trost assures the Court that the assumption satisfies all the Bankruptcy Code requirements, including curing all outstanding defaults and the provision of adequate assurance of future performance. (Warnaco Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., 609/392-0900) WIDECOM GROUP: Accountants Doubt Ability to Continue Operations --------------------------------------------------------------- The WideCom Group, Inc.'s chartered accountant of Mississauga, Ontario, in the November 14, 2002 report on the Company's financial statements has said: "Substantial doubts existed, especially in view of a negative net equity as at September 30, 2002, as well as on the date of this report, as to the Company's ability to continue to meet its obligations and commitments and also with regards to its ability to continue to generate sufficient amounts of cash flows from its operations to maintain its solvency for a reasonable period of time without continued, substantial financial support from the personal resources of two of its directors and one key employee who is very closely related to those two directors. Information from management does not provide definitive confirmation of the related willingness and ability of the above mentioned individuals. As more fully explained in Note 7(b), the Company's ability to continue as a going concern may also be jeopardized by a decision by a secured creditor (a financial institution) to enforce its demand for an immediate, full repayment by the Company of its indebtedness even though such an action might be considered by management to be unlikely, extreme, unscrupulous, or unwarranted. As mentioned in Note 8(a), the Company is committed to issuing 100,000 common shares to a claimant of alleged infringement of software and trademark ownership rights as part of an out-of- court settlement. As of the date of this report, those shares are yet to be issued. The effects of those to-be-issued shares on the financial statements have not been included." Since inception, WideCom has generated limited revenues from operations and has not yet achieved significant profitability. Revenues are primarily derived from product sales that are recognized for accounting purposes when products are shipped. The Company has limited revenue from operations, significant losses and has a significant deficit. Due to limited cash resources, it has often relied on cash infusions from management to meet ongoing obligations. There is no certainly that such access to funds will be available to it in the future. In order to reduce losses, WideCom is said to have significantly reduced Selling, General and Administrative costs. But it expected this will have a reduction on sales. While the Company has received government grants in the past, it does not meet the required pre-qualification for such grants subsequent to conducting its public offering. In consideration of this fact, WideCom shifted its research and development to an affiliated joint venture based in Montreal, Canada. In February 2000, WideCom established a majority-owned subsidiary, Posternetwork.COM Inc., to engage in the business line of offering an online printing service. Posternetwork is currently engaged in organizational and financing activities. Sales for the quarter ended Sept 30, 2002 were $204,033, an increase of $56,154 as compared to $147,879 for the quarter ended Spet 30, 2001. Net revenues for the quarter ended Spet 30, 2002 were $152,365, an increase of $40,566 as compared to $111,799 for the quarter ended Sept 30, 2001. The Company is making efforts to increase the sales by exploring the market in other countries. Operating expenses for the quarter ended Spet 30, 2002 were $299,207 an increase of $42,203, as compared to $257,004 for the quarter ended Sept 30, 2001. Selling, general and administrative expenses for the quarter ended Sept 30, 2002 were $131,848, increased by $10,742, or 9%, versus the same period in the previous fiscal year. This increase in selling, general and administrative expenses is due to higher marketing and other related expeses for penetrating the products in overseas markets. Due to best efforts, the Company could maintain losses to $146,842 for the quarter ended Sept 30, 2002 as compared to $145,205 of Sept 30, 2001. WideCom's cash requirements in connection with manufacturing and marketing will continue to be significant. The Company has no material commitments for capital expenditures. WideCom says it believes, based on its current plans and assumptions relating to its operations, projected cash flow from operations may not be sufficient to satisfy its contemplated cash requirements for the foreseeable future. It has relied on investments from management to cover its short falls in the last fiscal year, such investment may not be available to it in the future. In the event that its plans or assumptions change, or prove to be incorrect, or if the projected cash flows otherwise prove to be insufficient to fund operations (due to unanticipated expenses, delays, problems or otherwise), the Company could be required to seek additional financing sooner than currently anticipated. There can be no assurance that this additional financing will be available to it when needed, on commercially reasonable terms, or at all. The Company's common stock was delisted from the Nasdaq Small Cap Market effective the close of business April 10, 2001 for failure to meet certain minimum net tangible asset requirements. The stock continues to trade on the OTC Bulletin Board. WORLD AIRWAYS: Proposes Flight Attendant Pay Increases & Changes ---------------------------------------------------------------- World Airways (Nasdaq: WLDAC) announced that a contract proposal has been sent out to its flight attendants, which provides pay increases and other benefit changes requested by the flight attendants in exchange for work rule changes. Hollis Harris, chairman and chief executive officer of World Airways, explained, "The agreement includes $6.3 million for pay increases and benefits and $2 million of additional costs to the Company. It is the culmination of 2-1/2 years of negotiations with the flight attendants and reflects an active and committed effort on our part to reach an agreement that addresses many of their concerns, while keeping World on a stable financial footing as we continue our recovery and make plans in an uncertain economic environment." The proposed work rule changes were targeted to make this a cost-neutral contract. In a hotline message to the Company, Harris strongly urged the flight attendants to vote yes on this contract, which benefits the flight attendants and the Company. The Company will also be mailing information packages to all attendants. According to the Company, the negotiating team representing the flight attendants has recommended that its constituents reject the contract. The flight attendants will be voting on the contract over the next several weeks, and the votes will be counted on December 27, 2002, at the Airline Division of the International Brotherhood of Teamsters (Local 210). World Airways has been working with the National Mediation Board to advance negotiations with the flight attendants since January 2002, when the Company requested mediation assistance. The collective bargaining agreement with the flight attendants became amendable on July 1, 2000. "Following our successful negotiations with World's pilots and dispatchers in 1999 who gave up 10% of their salary for 18 months in 2000 and 2001 to pay for the changes they wanted, we were hopeful that we could reach an agreement with the flight attendants," noted Harris. "The contract proposal that's on the table represents our best effort in reaching an agreement that addresses key requirements of the flight attendants. If the flight attendants vote in favor of this proposal, they will be assured of three annual pay increases. At the end of the three-year period, I believe that World Airways will be much stronger. At that time, we would certainly be willing to consider some of their additional demands." If the contract proposal is rejected by the flight attendants, the National Mediation Board could recommend a "cooling off" period of up to 30 days. At that time, the alternatives include a final agreement approved by World and the flight attendants; a strike; or an imposed contract. Another option being considered by World Airways is a "deep freeze," in which it would ask the National Mediation Board to freeze the current contract for an additional period of time. Harris concluded, "We have come as far as we can in putting forward our best and most reasonable offer. We have worked very hard to develop an agreement that is positive for the flight attendants and allows us to build upon our recent profitable performance and create a Company we can all be proud of for years to come." Utilizing a well-maintained fleet of international range, widebody aircraft, World Airways has an enviable record of safety, reliability and customer service spanning more than 54 years. The Company is a U.S. certificated air carrier providing customized transportation services for major international passenger and cargo carriers, the United States military and international leisure tour operators. Recognized for its modern aircraft, flexibility and ability to provide superior service, World Airways meets the needs of businesses and governments around the globe. World Airways' September 30, 2002 balance sheet shows a total shareholders' equity deficit of about $22 million. WYNDHAM INT'L: Closes $345-Million Asset Sale to Westbrook Hotel ---------------------------------------------------------------- Wyndham International, Inc., (AMEX:WBR) has closed the sale of 11 non-proprietary assets to Westbrook Hotel Partners IV, LLC for approximately $345 million. As part of the same agreement announced in September, the company expects to close the sale of two additional properties to Westbrook for approximately $103 million prior to year-end. The company said it would use the net proceeds from the sales to pay down debt. "With the sale of these properties to Westbrook Hotel Partners IV, we have sold approximately $1.4 billion in non-strategic assets since 1998. We are aggressively pursuing our disposition strategy to sell the remaining 35 non-proprietary assets in our portfolio. With this transaction, we are on track to reach our goal of becoming a proprietary-branded hotel operating company focused on our Wyndham brand," stated Fred J. Kleisner, chairman and chief executive officer of Wyndham International. Properties included today's closing include: Marriott Tyson's Corner Vienna, Va. Marriott Houston North at Greenspoint Houston Marriott Philadelphia West West Conshohocken, Pa. Marriott Troy Troy, Mich. Hilton Del Mar Del Mar, Calif. Hilton Huntington Melville, NY Doubletree Suites Minneapolis Minneapolis Radisson Englewood Englewood, NJ Radisson Ft. Magruder Williamsburg, Va. Hyatt Newporter Newport Beach, Calif. Valley River Inn Eugene, Ore. The two additional properties expected to close by year-end include: -- Embassy Suites Chicago -- Wyndham Greenspoint Houston. September's agreement outlined the sale of 12 non-proprietary assets and one Wyndham-branded asset, which will retain the Wyndham flag pursuant to a ten-year franchise agreement. All 13 properties will be managed or asset managed by Sunstone Hotel Investors, LLC. Sunstone currently operates 61 upscale and mid-scale hotels with 14,838 rooms throughout the United States with approximately 90 percent being full-service hotels. Westbrook Hotel Partners IV, LLC is a newly formed entity of Westbrook Partners Real Estate Fund IV. Bear, Stearns & Co. Inc., and J.P. Morgan Securities Inc., served as financial advisors to Wyndham in connection with the transaction. Wyndham International, Inc., offers upscale and luxury hotel and resort accommodations through proprietary lodging brands and a management services division. Based in Dallas, Wyndham International owns, leases, manages and franchises hotels and resorts in the United States, Canada, Mexico, the Caribbean and Europe. For more information, visit http://www.wyndham.com As previously reported, Standard & Poor's assigned a B- rating to Wyndham's $750 million debentures and B corporate credit rating. YOUTHSTREAM MEDIA: Bankruptcy Filing Likely if Arrangement Fails ---------------------------------------------------------------- Youthstream Media Networks, Inc., announced that Jonathan Diamond, interim chief executive officer and a director of the company, has resigned from both positions. Messrs. Sidney I. Lirtzman and G. Kelly O'Dea previously had resigned as directors. The company is continuing to seek to negotiate an arrangement with its principal creditors, but there can be no assurance that it will successfully do so. If the company is unable to conclude an arrangement with creditors, a bankruptcy filing is probable. YUM! BRANDS: Will Hold Annual Executive Update on Wednesday ----------------------------------------------------------- Yum! Brands, Inc., (NYSE:YUM) will hold its annual Executive Update for Investors and Analysts December 11, 2002, 8:15 to noon Eastern Time, at the St. Regis Hotel, New York City. The meeting will be Web cast live by CCBN and can be accessed through the company's Web site at http://www.yum.com Presenters include David Novak, Chairman and CEO; Dave Deno, CFO; Aylwin Lewis, COO; and Chuck Rawley, U.S. Chief Development Officer. A question and answer session will follow the presentations, tentatively from 11:00 am to noon. The agenda includes the following: -- Overall strategic update -- Detailed review of the company's two key growth strategies-- international expansion and multibranding -- Operations performance update -- Financial review and 2002/2003 forecast The Web cast will also be distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can monitor the meeting through CCBN's individual investor center at www.companyboardroom.com or by visiting any of the investor sites in CCBN's Individual Investor Network. Institutional investors can access the meeting via CCBN's password protected event management site, StreetEvents -- http://www.streetevents.com Yum! Brands, Inc., based in Louisville, Kentucky, is the world's largest restaurant company in terms of system units, operating and franchising over 32,500 restaurants in more than 100 countries and territories. Four of the company's restaurant brands -- KFC, Pizza Hut, Taco Bell and Long John Silver's -- are the global leaders of the chicken, pizza, Mexican-style food and quick-service seafood categories respectively. Since 1919, A&W All-American Food has been serving a signature frosty mug root beer float and all-American pure-beef hamburgers and hot dogs, making it the longest running quick-service franchise chain in America. * * * As previously reported, Fitch Ratings assigned a BB+ rating to Yum! Brands' proposed $350 million Senior Notes, while Standard & Poor's gave the same debt issue its BB rating. Meanwhile, S&P rates the Company's $1.4 billion senior unsecured bank facility at BB. * BOND PRICING: For the week of December 9 - 13, 2002 ----------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- Accuride Corp. 9.250% 02/01/06 57 Adaptec Inc. 3.000% 03/05/07 70 Adelphia Communications 3.250% 05/01/21 7 Adelphia Communications 6.000% 02/15/06 7 Adelphia Communications 9.875% 03/01/05 35 Adelphia Communications 9.875% 03/01/07 33 Adelphia Communications 10.250% 06/15/11 37 Adelphia Communications 10.875% 10/01/10 39 Advanced Energy 5.000% 09/01/06 68 Advanced Energy 5.250% 11/15/06 75 Advanced Micro Devices Inc. 4.750% 02/01/22 67 Advanstar Communications 12.000% 02/15/11 66 AES Corporation 4.500% 08/15/05 29 AES Corporation 8.000% 12/31/08 47 AES Corporation 9.375% 09/15/10 47 AES Corporation 9.500% 06/01/09 52 Aether Systems 6.000% 03/22/05 73 Agere Systems 6.500% 12/15/09 53 Agro-Tech Corp. 8.625% 10/01/07 65 Akamai Technologies 5.500% 07/01/07 38 Allegheny Generating Company 6.875% 09/01/23 73 Alternative Living Services (Alterra) 5.250% 12/15/02 1 Alkermes Inc. 3.750% 02/15/07 59 Alexion Pharmaceuticals Inc. 5.750% 03/15/07 69 Alpharma Inc. 3.000% 06/01/06 71 Amazon.com Inc. 4.750% 02/01/09 74 American Tower Corp. 2.250% 10/15/09 74 American Tower Corp. 5.000% 02/15/10 64 American Tower Corp. 6.250% 10/15/09 67 American Tower Corp. 9.375% 02/01/09 66 American & Foreign Power 5.000% 03/01/30 59 America West Airlines 6.930% 01/02/08 58 Americredit Corp. 9.875% 04/15/06 75 Amkor Technology Inc. 5.000% 03/15/07 45 Amkor Technology Inc. 9.250% 05/01/06 70 Amkor Technology Inc. 9.250% 02/15/08 66 Amkor Technology Inc. 10.500% 05/01/09 47 AMR Corp. 9.000% 08/01/12 48 AMR Corp. 9.000% 09/15/16 44 AMR Corp. 9.750% 08/15/21 48 AMR Corp. 9.800% 10/01/21 48 AMR Corp. 10.000% 04/15/21 50 AMR Corp. 10.200% 03/15/20 51 AnnTaylor Stores 0.550% 06/18/19 61 ANR Pipeline 9.625% 11/01/21 72 Arco Chemical Company 9.800% 02/01/20 73 Argo-Tech Corp. 8.625% 10/01/07 72 Armstrong World Industries 9.750% 04/15/08 40 AMR Corporation 9.000% 09/15/16 74 AMR Corporation 9.750% 08/15/21 75 AMR Corporation 9.800% 10/01/21 75 Asarco Inc. 8.500% 05/01/25 35 Aspen Technology 5.250% 06/15/05 40 Atlas Air Inc. 9.250% 04/15/08 51 AT&T Corp. 6.500% 03/15/29 75 AT&T Wireless 8.750% 03/01/31 71 Aurora Foods 9.875% 02/15/07 61 Avaya Inc. 11.125% 04/01/09 69 Axcelis Technologies 4.250% 01/15/07 62 Be Aerospace Inc. 8.875% 05/01/11 66 Best Buy Co. Inc. 0.684% 06?27/21 68 Bethlehem Steel 8.450% 03/01/05 14 Borden Inc. 7.875% 02/15/23 54 Borden Inc. 8.375% 04/15/16 58 Borden Inc. 9.250% 06/15/19 56 Borden Inc. 9.200% 03/15/21 59 Boston Celtics 6.000% 06/30/38 65 Brocade Communication Systems 2.000% 01/01/07 71 Brooks Automatic 4.750% 06/01/08 74 Browning-Ferris Industries Inc. 7.400% 09/15/35 73 Budget Group Inc. 9.125% 04/01/06 17 Building Materials Corp. 8.000% 10/15/07 74 Building Materials Corp. 8.000% 12/01/08 70 Burlington Northern 3.200% 01/01/45 51 Burlington Northern 3.800% 01/01/20 71 CSC Holdings Inc. 7.625% 07/15/18 73 Calpine Corp. 4.000% 12/26/06 49 Calpine Corp. 4.000% 12/26/06 46 Calpine Corp. 7.875% 04/01/08 36 Calpine Corp. 8.500% 02/15/11 42 Calpine Corp. 8.625% 08/15/10 42 Calpine Corp. 8.750% 07/15/07 42 Capital One Financial 7.125% 08/01/08 75 Case Credit 6.750% 10/21/07 74 Case Corp. 7.250% 01/15/16 71 Cell Therapeutic 5.750% 06/15/08 59 Centennial Cell 10.750% 12/15/08 57 Century Communications 8.875% 01/15/07 34 Century Communications 9.500% 03/01/05 23 Champion Enterprises 7.625% 05/15/09 36 Charter Communications, Inc. 4.750% 06/01/06 25 Charter Communications, Inc. 5.750% 10/15/05 30 Charter Communications Holdings 8.250% 04/01/07 50 Charter Communications Holdings 8.625% 04/01/09 50 Charter Communications Holdings 9.625% 11/15/09 50 Charter Communications Holdings 10.000% 04/01/09 52 Charter Communications Holdings 10.000% 05/15/11 50 Charter Communications Holdings 10.250% 01/15/10 50 Charter Communications Holdings 10.750% 10/01/09 52 Charter Communications Holdings 11.125% 01/15/11 51 Ciena Corporation 3.750% 02/01/08 67 Cincinnati Bell Telephone (Broadwing) 6.300% 12/01/28 70 Cincinnati Bell Inc. (Broadwing) 7.250% 06/15/23 74 CIT Group Holdings 5.875% 10/15/08 74 CNET Inc. 5.000% 03/01/06 58 Coastal Corp. 6.375% 02/01/09 74 Coastal Corp. 6.500% 05/15/06 69 Coastal Corp. 6.500% 06/01/08 73 Coastal Corp. 6.950% 06/01/28 45 Coastal Corp. 7.420% 02/15/37 55 Coastal Corp. 7.500% 08/15/06 73 Coastal Corp. 7.750% 10/15/35 53 Coeur D'Alene 6.375% 01/31/05 73 Coeur D'Alene 7.250% 10/31/05 70 Cogentrix Energy 8.750% 10/15/08 74 Comcast Corp. 2.000% 10/15/29 22 Comforce Operating 12.000% 12/01/07 59 Commscope Inc. 4.000% 12/15/06 74 Computer Associates 5.000% 03/15/07 72 Computer Network 3.000% 02/15/07 64 Cone Mills Corp. 8.125% 03/15/05 60 Conexant Systems 4.000% 02/01/07 45 Conexant Systems 4.250% 05/01/06 50 Conseco Inc. 8.750% 02/09/04 7 Conseco Inc. 10.750% 06/15/09 23 Continental Airlines 4.500% 02/01/07 46 Corning Inc. 3.500% 11/01/08 70 Corning Inc. 6.300% 03/01/09 64 Corning Inc. 6.750% 09/15/13 54 Corning Inc. 6.850% 03/01/29 43 Corning Inc. 7.000% 03/15/07 73 Corning Inc. 8.875% 08/15/21 56 Corning Glass 7.000% 03/15/07 74 Corning Glass 8.875% 03/15/16 60 Cox Communications Inc. 3.000% 03/14/30 38 Cox Communications Inc. 0.348% 02/23/21 71 Cox Communications Inc. 0.348% 02/23/21 71 Cox Communications Inc. 0.426% 04/19/20 45 Cox Communications Inc. 7.750% 11/15/29 29 Critical Path 5.750% 04/01/05 63 Critical Path 5.750% 04/01/05 63 Crown Castle International 9.000% 05/15/11 74 Crown Castle International 9.375% 08/01/11 54 Crown Castle International 9.500% 08/01/11 71 Crown Castle International 10.750% 08/01/11 70 Crown Cork & Seal 7.375% 12/15/26 69 Crown Cork & Seal 8.375% 01/15/05 68 Cubist Pharmacy 5.500% 11/01/08 48 Curagen Corp. 6.000% 02/02/07 64 Cummins Engine 5.650% 03/01/98 62 Cypress Semiconductor 3.750% 07/01/05 71 Cypress Semiconductor 4.000% 02/01/05 72 Dana Corp. 7.000% 03/01/29 70 Dana Corp. 7.000% 03/15/28 70 DDI Corp. 6.250% 04/01/07 17 Delhaize America 9.000% 04/15/31 72 Delta Air Lines 7.700% 12/15/05 75 Delta Air Lines 7.900% 12/15/09 68 Delta Air Lines 8.300% 12/15/29 53 Delta Air Lines 9.000% 05/15/16 62 Delta Air Lines 9.250% 03/15/22 60 Dillard Department Store 7.000% 12/01/28 70 Dobson Communications Corp. 10.875% 07/01/10 72 Dobson/Sygnet 12.250% 12/15/08 63 Documentum Inc. 4.500% 04/01/07 74 Dresser Industries 7.600% 08/15/96 60 DVI Inc. 9.875% 02/01/04 75 Dynegy Holdings Inc. 6.875% 04/01/11 41 EOTT Energy Partner 11.000% 10/01/09 67 Echostar Communications 4.875% 01/01/07 74 Echostar Communications 5.750% 05/15/08 73 Edison Mission 9.875% 04/15/11 28 Edison Mission 10.000% 08/15/08 35 El Paso Corp. 7.000% 05/15/11 68 El Paso Corp. 7.750% 01/15/32 59 El Paso Energy 6.750% 05/15/09 73 El Paso Natural Gas 7.500% 11/15/26 57 El Paso Natural Gas 8.625% 01/15/22 66 Emulex Corp. 1.750% 02/01/07 72 Enron Corp. 9.875% 06/15/03 16 Enzon Inc. 4.500% 07/01/08 73 Equistar Chemicals 7.550% 02/15/26 74 E*Trade Group 6.000% 02/01/07 72 E*Trade Group 6.750% 05/15/08 71 Extreme Networks 3.500% 12/01/06 72 FEI Company 5.500% 08/15/08 71 Finisar Corp. 5.250% 10/15/08 46 Finova Group 7.500% 11/15/09 34 Fleming Companies Inc. 5.250% 03/15/09 42 Fleming Companies Inc. 10.625% 07/31/07 63 Fluor Corp. 6.950% 03/01/07 59 Foamex L.P. 9.875% 06/15/07 22 Food Lion Inc. 8.050% 04/15/27 66 Ford Motor Co. 6.500% 08/01/18 70 Ford Motor Co. 6.625% 02/15/28 73 Ford Motor Co. 7.125% 11/15/25 70 Ford Motor Co. 7.500% 08/01/26 74 Fort James Corp. 7.750% 11/15/23 73 Foster Wheeler 6.750% 11/15/05 58 GCI Inc. 9.750% 08/01/07 74 General Physics 6.000% 06/30/04 51 Geo Specialty 10.125% 08/01/08 52 Georgia-Pacific 7.375% 12/01/25 70 Georgia-Pacific 7.700% 06/15/15 73 Georgia-Pacific 7.750% 11/15/29 70 Georgia-Pacific 8.125% 06/15/23 71 Georgia-Pacific 8.250% 03/01/23 62 Georgia-Pacific 8.625% 04/30/25 74 Georgia-Pacific 8.875% 05/15/31 71 Globespan Inc. 5.250% 05/15/06 74 Goodyear Tire 6.375% 03/15/08 73 Goodyear Tire 7.000% 03/15/28 49 Goodyear Tire 7.857% 08/15/11 69 Gulf Mobile Ohio 5.000% 12/01/56 61 Hanover Compress 4.750% 03/15/08 74 Hasbro Inc. 6.600% 07/15/28 74 Health Management Associates Inc. 0.250% 08/16/20 68 Health Management Associates Inc. 0.250% 08/16/20 68 HealthSouth Corp. 7.000% 06/15/08 70 HealthSouth Corp. 8.375% 10/01/11 64 HealthSouth Corp. 8.500% 02/01/08 74 HealthSouth Corp. 10.750% 10/01/08 68 Hertz Corp. 7.000% 01/15/28 74 Human Genome 3.750% 03/15/07 62 Human Genome 5.000% 02/01/07 69 Huntsman Polymer 11.750% 12/01/04 67 I2 Technologies 5.250% 12/15/06 59 ICN Pharmaceuticals Inc. 6.500% 07/15/08 73 IMC Global Inc. 7.300% 01/15/28 70 IMC Global Inc. 7.375% 08/01/18 73 Ikon Office 6.750% 12/01/25 64 Ikon Office 7.300% 11/01/27 68 Imcera Group 7.000% 12/15/13 74 Imclone Systems 5.500% 03/01/05 69 Incyte Genomics 5.500% 02/01/07 68 Inhale Therapeutic Systems Inc. 3.500% 10/17/07 55 Inhale Therapeutic Systems Inc. 5.000% 02/08/07 56 Inland Steel Co. 7.900% 01/15/07 47 International Rectifier 4.250% 07/15/07 75 Internet Capital 5.500% 12/21/04 37 Interpublic Group 1.870% 06/01/06 72 JL French Auto 11.500% 06/01/09 54 Juniper Networks 4.750% 03/15/07 73 Kaiser Aluminum & Chemicals Corp. 9.875% 02/15/49 67 Kmart Corporation 8.125% 12/01/06 16 Kmart Corporation 8.250% 01/01/22 22 Kmart Corporation 8.375% 07/01/22 22 Kmart Corporation 9.375% 02/01/06 20 Kulicke & Soffa Industries Inc. 4.750% 12/15/06 51 Kulicke & Soffa Industries Inc. 5.250% 08/15/06 53 LSI Logic 4.000% 11/01/06 75 LSP Energy LP 8.160% 07/15/25 74 LTX Corporation 4.250% 08/15/06 60 Lehman Brothers Holding 8.000% 11/13/03 70 Level 3 Communications 6.000% 09/15/09 42 Level 3 Communications 6.000% 03/15/09 41 Level 3 Communications 9.125% 05/01/08 65 Liberty Media 3.500% 01/15/31 66 Liberty Media 3.500% 01/15/31 66 Liberty Media 3.750% 02/15/30 52 Liberty Media 4.000% 11/15/29 56 LSI Logic 4.000% 11/01/06 72 LSI Logic 4.000% 11/01/06 72 LTX Corp. 4.250% 08/15/06 66 Lucent Technologies 5.500% 11/15/08 52 Lucent Technologies 6.450% 03/15/29 45 Lucent Technologies 6.500% 01/15/28 45 Lucent Technologies 7.250% 07/15/06 65 Magellan Health 9.000% 02/15/08 18 Mail-Well I Corp. 8.750% 12/15/08 65 Mail-Well I Corp. 9.625% 03/15/12 56 Mastec Inc. 7.750% 02/01/08 75 MCI Communications Corp. 6.500% 04/15/10 46 MCI Communications Corp. 7.500% 08/20/04 29 MCI Communications Corp. 7.750% 03/15/24 30 Medarex Inc. 4.500% 07/01/06 60 Mediacom Communications 5.250% 07/01/06 71 Mediacom LLC 7.875% 02/15/11 67 Mediacom LLC 8.500% 04/15/08 75 Mediacom LLC 9.500% 01/15/13 73 Metris Companies 10.000% 11/01/04 75 Metris Companies 10.125% 07/15/06 73 Mikohn Gaming 11.875% 08/15/08 73 Mirant Corp. 5.750% 07/15/07 44 Mirant Americas 7.200% 10/01/08 48 Mirant Americas 7.625% 05/01/06 64 Mirant Americas 8.300% 05/01/11 42 Mirant Americas 8.500% 10/01/21 35 Mirant Americas 9.125% 05/01/31 59 Mission Energy 13.500% 07/15/08 43 Missouri Pacific Railroad 4.750% 01/01/20 75 Missouri Pacific Railroad 4.750% 01/01/30 71 Missouri Pacific Railroad 5.000% 01/01/45 58 Motorola Inc. 5.220% 10/01/21 62 Motorola Inc. 6.500% 11/15/28 75 MSX International 11.375% 01/15/08 66 NTL (Delaware) 5.750% 12/15/09 14 NTL Communications Corp. 6.750% 05/15/08 16 NTL Communications Corp. 7.000% 12/15/08 19 National Vision 12.000% 03/30/09 50 Natural Microsystems 5.000% 10/15/05 58 Navistar Financial 4.750% 04/01/09 69 Nextel Communications 5.250% 01/15/10 73 Nextel Communications 6.000% 06/01/11 71 Nextel Partners 11.000% 03/15/10 67 NGC Corp. 7.625% 10/15/26 56 Noram Energy 6.000% 03/15/12 72 Northern Pacific Railway 3.000% 01/01/47 50 Northern Pacific Railway 3.000% 01/01/47 50 Northwest Airlines 7.625% 03/15/05 66 Northwest Airlines 7.875% 03/15/08 56 Nvidia Corp. 4.750% 10/15/07 75 ON Semiconductor 12.000% 05/15/08 73 ONI Systems Corporation 5.000% 10/15/05 74 OSI Pharmaceuticals 4.000% 02/01/09 75 Owens-Illinois Inc. 7.800% 05/15/18 68 PG&E Gas Transmission 7.800% 06/01/25 60 PG&E National Energy 10.375% 05/16/11 36 Panamsat Corp. 6.875% 01/15/28 74 Paxson Communications 10.750% 07/15/08 75 Pegasus Satellite 12.375% 08/01/06 49 Pegasus Satellite 12.500% 08/01/07 15 Photronics Inc. 4.750% 12/15/06 68 PMC-Sierra Inc. 3.750% 08/15/06 74 Polaroid Corp. 11.500% 02/15/06 5 Polymer Group 9.000% 07/01/07 21 Primedia Inc. 7.625% 04/01/08 71 Primedia Inc. 8.875% 05/15/11 73 Providian Financial 3.250% 08/15/05 72 PSEG Energy Holdings 8.500% 06/15/11 73 Public Service Electric & Gas 5.000% 07/01/37 71 Photronics Inc. 4.750% 12/15/06 72 Quanta Services 4.000% 07/01/07 54 Qwest Capital Funding 7.000% 08/03/09 62 Qwest Capital Funding 7.250% 02/15/11 62 Qwest Capital Funding 7.625% 08/03/21 47 Qwest Capital Funding 7.750% 08/15/06 66 Qwest Capital Funding 7.900% 08/15/10 64 Qwest Communications Int'l 7.250% 11/01/06 74 RF Micro Devices 3.750% 08/15/05 74 RF Micro Devices 3.750% 08/15/05 74 Redback Networks 5.000% 04/01/07 25 Rite Aid Corp. 4.750% 12/01/06 73 Rite Aid Corp. 7.125% 01/15/07 70 Rite Aid Corp. 7.125% 01/15/07 69 Rockwell Int'l 5.200% 01/15/98 72 Royster-Clark 10.250% 04/01/09 71 Rural Cellular 9.625% 05/15/08 50 Ryder System Inc. 5.000% 02/25/21 74 SBA Communications 10.250% 02/01/09 55 SC International Services 9.250% 09/01/07 69 SCI Systems Inc. 3.000% 03/15/07 68 Saks Inc. 7.375% 02/15/19 72 Sepracor Inc. 5.000% 02/15/07 59 Sepracor Inc. 5.750% 11/15/06 61 Sepracor Inc. 7.000% 12/15/05 62 Service Corp. Int'l 6.750% 06/22/08 74 Silicon Graphics 5.250% 09/01/04 54 Simula Inc. 8.000% 05/01/04 73 Skechers USA, Inc. 4.500% 04/15/07 65 Solutia Inc. 7.375% 10/15/27 74 Sonat Inc. 6.625% 02/01/08 62 Sonat Inc. 6.750% 10/01/07 64 Sonat Inc. 7.625% 07/15/11 53 Sonic Automotive 5.250% 05/07/09 74 Sotheby's Holdings 6.875% 02/01/09 73 Sprint Capital Corp. 6.000% 01/15/07 74 Sprint Capital Corp. 6.875% 11/15/28 68 Sprint Capital Corp. 6.900% 05/01/19 70 Sprint Capital Corp. 8.375% 03/15/28 66 Sprint Capital Corp. 8.750% 03/15/32 72 TCI Communications Inc. 7.125% 02/15/28 74 TECO Energy Inc. 7.000% 05/01/12 73 Tenneco Inc. 10.000% 03/15/08 72 Tenneco Inc. 11.625% 10/15/09 73 Tennessee Gas PL 7.000% 10/15/28 53 Tennessee Gas PL 7.500% 04/01/17 61 Tennessee Gas PL 7.625% 04/01/37 56 Teradyne Inc. 3.750% 10/15/06 72 Tesoro Pete Corp. 9.000% 07/01/08 52 Tesoro Pete Corp. 9.625% 11/01/08 57 TIG Holdings Inc. 8.125% 04/15/05 75 Time Warner Inc. 6.625% 05/15/29 74 Time Warner Telecom Inc. 9.750% 07/15/08 58 Transwitch Corp. 4.500% 09/12/05 59 Trenwick Capital I 8.820% 02/01/37 72 Tribune Company 2.000% 05/15/29 71 Triton PCS Inc. 8.750% 11/15/11 74 Triton PCS Inc. 9.375% 02/01/11 74 Trump Atlantic 11.250% 05/01/06 74 Turner Broadcasting 8.375% 07/01/13 74 TXU Corp. 6.375% 06/15/06 75 US Airways Passenger 6.820% 01/30/14 72 US Airways Passenger 9.010% 01/20/19 49 US Airways Inc. 7.960% 01/20/18 74 Ugly Duckling 11.000% 04/15/07 60 United Air Lines 10.670% 05/01/04 26 United Air Lines 11.210% 05/01/14 25 Universal Health Services 0.426% 06/23/20 64 US Timberlands 9.625% 11/15/07 62 US West Capital Funding 6.250% 07/15/05 63 US West Capital Funding 6.375% 07/15/08 45 US West Capital Funding 6.875% 07/15/28 67 US West Communications 6.875% 09/15/33 70 US West Communications 7.250% 10/15/35 66 US West Communications 7.500% 06/15/23 71 Utilicorp United 7.625% 11/15/09 70 Utilicorp United 7.950% 02/01/11 71 Utilicorp United 8.000% 03/01/23 57 Utilicorp United 8.270% 11/15/21 59 Veeco Instrument 4.125% 12/21/08 74 Vertex Pharmaceuticals 5.000% 09/19/07 74 Vesta Insurance Group 8.750% 07/15/25 74 Viropharma Inc. 6.000% 03/01/07 35 Vitesse Semiconductor 4.000% 03/15/05 72 Weirton Steel 10.750% 06/01/05 62 Weirton Steel 11.375% 07/01/04 62 Westpoint Stevens 7.875% 06/15/08 24 Williams Companies 6.625% 11/15/04 65 Williams Companies 6.750% 01/15/06 65 Williams Companies 7.125% 09/01/11 73 Williams Companies 7.750% 06/15/31 58 Williams Companies 7.875% 09/01/21 62 Williams Companies 9.375% 11/15/21 72 Williams Holding (Delaware) 6.250% 02/01/06 72 Williams Holding (Delaware) 6.500% 12/01/08 57 Wind River System 3.750% 12/15/06 68 Witco Corp. 6.875% 02/01/26 72 Witco Corp. 7.750% 04/01/23 75 Worldcom Inc. 6.400% 08/15/05 12 XM Satellite Radio 7.750% 03/01/06 30 XM Satellite Radio 14.000% 03/15/10 45 Xerox Corp. 0.570% 04/21/18 62 Xerox Credit 7.200% 08/05/12 71 ********* 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. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Bond pricing, appearing in each Thursday's edition of the TCR, is provided by DebtTraders in New York. DebtTraders is a specialist in global high yield securities, providing clients unparalleled services in the identification, assessment, and sourcing of attractive high yield debt investments. For more information on institutional services, contact Scott Johnson at 1-212-247-5300. To view our research and find out about private client accounts, contact Peter Fitzpatrick at 1-212-247-3800. Real-time pricing available at http://www.debttraders.com/ Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group, Inc., Washington, DC USA. Yvonne L. Metzler, Bernadette C. de Roda, Donnabel C. Salcedo, Ronald P. Villavelez and Peter A. Chapman, Editors. Copyright 2002. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $625 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***