/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/030528.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, May 28, 2003, Vol. 7, No. 104 Headlines ACTERNA: Court Okays PricewaterhouseCoopers LLP as Accountants AHOLD: $29 Million of Additional Irregularities Discovered AIR CANADA: Reaches Tentative Restructuring Agreement with CAW AIR CANADA: Restructuring Pact with CAW Covers 7,000 Members ALGOMA STEEL: Signs Letter of Intent to Sell Seamless Tube Mill ALGOMA STEEL: Tenaris to Acquire Seamless Tube Mill for C$12.5MM ALLEGIANCE TELECOM: Wants to Hire Ordinary Course Professionals AMERICAN COMMERCIAL: Gets Nod to Hire Ernst & Young as Auditors ANC RENTAL: Wants Court Approval of Supplemental Bank Settlement ARADYME CORP: Taps H.J. & Associates as Auditor and Inv. Banker ARMSTRONG: AWI Wants to Expand American Appraisal's Engagement BASIS100: Debentureholders' Special Meeting Reconvenes on June 5 CALYPTE BIOMEDICAL: Delays Filing of Form 10-Q for First Quarter CAPITOL COMMUNITIES: Misses Deadline for Filing Fin'l Statements CARR PHARMACEUTICALS: Case Summary & 20 Unsecured Creditors CINEMA RIDE: Commences Trading on Pink Sheets Effective Tuesday CONSECO INC: Enters into Federal Income Tax Sharing Agreement CONTINENTAL AIRLINES: 12-Yr.-Old Bankruptcy Case Formally Closed CROWN RESOURCES: Red Ink Continues to Flow in First Quarter 2003 CYPRESS AVIATION: Voluntary Chapter 7 Case Summary ENRON: Rexam Wants Nod for Recoupment Under Rejected Contract FLEMING: Asks Court to Establish De Minimis Asset Sale Protocol GAN VIE COMPAGNIE: A.M. Best Affirms B Public Data Ratings GEORGIA-PACIFIC: Inks Pact to Acquire Interstate Packaging Plant HAYES LEMMERZ: Filing New Sr. Unsec. Note Indenture Under Seal JAZZ PHOTO CORP: Case Summary & 20 Largest Unsecured Creditors KAISER ALUMINUM: Futures Rep. Hires Covington as Special Counsel KLEINERT'S: Wants to Obtain Up to $5.2 Million of DIP Financing LEAP WIRELESS: Court Okays Proposed Key Employee Retention Plan MAGELLAN HEALTH: Judge Beatty Fixes Bar Dates for Filing Claims MILACRON: Shareholders Restore 'One Share, One Vote' Principle MOUNT SINAI MED.: Fitch Affirms BB Rating on Outstanding 4 Bonds NANTICOKE HOMES: Committee Taps Parente for Financial Advice NATIONAL CENTURY: Asks Court to Clear SCCI Settlement Agreement NORTEL NETWORKS: Investor Analysts Conference Being Held Today NRG ENERGY: Wants to Honor and Pay Workers' Compensation Claims ORION REFINING: UST Convenes Section 341(a) Meeting on June 18 OXIS INTERNATIONAL: Ability to Continue Operations Uncertain PENNEXX INC: Court OKs Smithfield Request to Foreclose on Assets PETCO ANIMAL: Caps Price of 9-Million Share Public Offering PLANVISTA: Board of Directors Re-Elects Officers of Parent Co. RANDALL'S ISLAND FAMILY GOLF: Court to Consider Plan on June 17 RECOTON CORP: Auction Sale for Elec. Accessories Assets Tomorrow RIBAPHARM INC: Shareholders Elect Six Board of Directors Members SCHWARTZ ELECTRO-OPTICS: Case Summary & 20 Unsecured Creditors SCIENTIFIC GAMES: Appoints Deloitte & Touche as External Auditor SERVICE MERCHANDISE: Court OKs Uniden Claim for Voting Purposes SIMON TRANSPORTATION: Files Liquidating Chapter 11 Plan in Utah SPECIAL METALS: Seeks Court Nod for Buck Consultants' Employment SPORTS CLUB CO: Fails to File Form 10-Q for Q1 2003 on Time STROUDS ACQUISITION: Case Summary & 20 Largest Unsec. Creditors TCENET INC: Vaughan Armstrong Resigns from Board of Directors TERADYNE INC: Appoints Michael A. Bradley as Company President TERRAQUEST ENERGY: March 31 Working Capital Deficit Tops $8 Mil. TEXAS GAS: Prices Tender Offer for $150 Million of 8.625% Notes TEXAS GAS: Fitch Upgrades Low-B Senior Unsecured Debt Rating TROLL COMMS: US Trustee Sets Section 341(a) Meeting for June 25 UNITED AIRLINES: Wants Nod for Global Settlement with GE Capital UNOVA INC: Appoints Lydia H. Kennard to Board of Directors USG CORP: Wants Blessing to Obtain $100-Million Letter of Credit VENUS EXPLORATION: KPMG Resigns as Company's External Auditor WEIRTON STEEL: Brings-In McGuireWoods LLP as Bankruptcy Counsel WESTERN INTEGRATED: Wants Solicitation Period Extended to Jul 31 WHEELING: Files Third Amended Plan and Disclosure Statement WILLIAMS: Initial Purchaser Exercises Option on Conv. Debentures WINSTAR: Court OKs Ciardi as Chapter 7 Trustee's Special Counsel WORLDCOM INC: Obtains Approval for Global Crossing Settlement WRAPADE MACHINE: Case Summary & Largest Unsecured Creditors * Meetings, Conferences and Seminars ********* ACTERNA: Court Okays PricewaterhouseCoopers LLP as Accountants -------------------------------------------------------------- At Acterna Corp., and its debtor-affiliates' request, the U..S. Bankruptcy Court for the Southern District of New York permits the Debtors to employ PricewaterhouseCoopers LLP as their accountants in these Chapter 11 cases. In particular, PwC will provide: (a) audits of the Debtors' consolidated financial statements as may be required from time to time, and advice in the preparation and filing of financial statements and disclosure documents required by the Securities and Exchange Commission, including Forms 10-K as required by applicable law or as requested by the Debtors; (b) audits of any benefit plans as may be required by the Department of Labor or the Employee Retirement Income Security Act, as amended; (c) review of the Debtors' unaudited quarterly financial statements as required by applicable law or as the Debtors request; (d) audits of the disposed entities that are required for purposes of complying with SEC rules and regulations or are requested by the acquirers; (e) other related accounting services for the Debtors as may be necessary or desirable; (f) review of tax returns; (g) advice and assistance regarding tax planning issues; (h) assistance regarding existing and future IRS examinations; and (i) any and all other tax assistance as may be requested from time to time. "The Debtors are familiar with the professional standing and reputation of PwC. The Debtors understand that PwC has a wealth of experience in providing accounting, tax and financial advisory services in restructurings and reorganizations and enjoys an excellent reputation for services it has rendered in large and complex Chapter 11 cases on behalf of debtors and creditors throughout the United States," Acterna Chief Financial Officer and Senior Vice President John D. Ratliff says. Mr. Ratliff points out that the audit and non-audit services to be performed by PwC are necessary to enable the Debtors to effectively operate their businesses and comply with financial reporting requirements. According to Mr. Ratliff, effective audit services will assist the Debtors in: (i) managing their strategic, operational, financial and compliance risk; (ii) developing and monitoring controls designed to support the accurate generation and reporting of financial numbers, both externally and internally; (iii) developing controls to ensure compliance with applicable laws, regulations and internal policies and procedures; (iv) identifying and improving inefficient or ineffective processes and controls throughout the entire organization; and (v) developing and testing controls designed to support the accurate generation of appropriate disclosure material in furtherance of the Debtors' compliance with Section 404 of the Sarbanes-Oxley Act of 2002. The Debtors are authorized to compensate PwC for audit and quarterly review services pursuant to the terms and conditions of the engagement letter dated February 2, 2003. The Debtors and PwC have agreed to a fee estimated at $1,208,000 for the audit of the Debtors' financial statements for the year ended March 31, 2003 and an additional $360,000 estimated for the related quarterly reviews. The Debtors will compensate PwC for audit services of da Vinci Systems Corporation, one of their principal business segments, pursuant to the terms and conditions of an engagement letter dated May 1, 2003. The Debtors and PwC have agreed to a fee estimated at $155,000 for the audit of da Vinci's financial statements for the year end March 31, 2001, 2002, and 2003. The Debtors will also pay PwC for its reasonable expenses. Pursuant to the terms of the da Vinci Engagement Letter, PwC will bill the Debtors for fees related to the da Vinci audit as: Payment Date Amount ------------ ------ May 19, 2003 $77,500 June 2, 2003 77,500 To date, $1,127,200 has been paid pursuant to the Engagement Letter. Mr. Ratliff reports that $440,800 is owed and will be paid postpetition, along with related out-of pocket expenses, for postpetition audit services. PwC's fees for the services are: Payment Date Amount ------------ ------ May 15, 2003 $180,000 May 31, 2003 180,000 June 30, 2003 80,800 Other audit and non-audit services, as may be requested by the Debtors, will be billed on a time and material basis. The customary hourly rates charged by PwC's personnel anticipated to be assigned to this case are: Professional Rate ------------ ---- Audit and Accounting Services: Audit Partner $445 - 500 EDP Audit Partner 500 - 575 Audit Manager/Senior Manager 290 - 390 EDP Audit Manager/Senior Manager 310 - 460 Audit Associate/Senior Associate 140 - 210 EDP Audit Associate/Senior Associate 170 - 290 Tax Services: Partner 550 - 630 Manager/Senior Manager 405 - 560 Associate/Senior Associate 210 - 315 PwC Partner William Bishop assures the Court that the firm has no connection with the Debtors, its creditors or other parties- in-interest in this case and does not hold any interest adverse to the Debtors' estates. PwC, Mr. Bishop says, is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. (Acterna Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900) AHOLD: $29 Million of Additional Irregularities Discovered ---------------------------------------------------------- Ahold announced that its syndicate of banks has agreed to extend the deadlines for the provision of audited 2002 financial statements for Stop & Shop from May 31, 2003 to June 30, 2003 and audited 2002 consolidated financial statements for Ahold from June 30, 2003 to August 15, 2003. The Albert Heijn audited 2002 financial statements are to be provided no later than June 2, 2003. The USD 915 million unsecured tranche of the Euro 2.65 billion credit facility announced on March 5, 2003, will remain available subject to the satisfaction of various conditions, including delivery of the 2002 audited financial statements on or before the new dates specified. In any event, based on the company's current cashflow projections, Ahold does not foresee the need for any drawings on the unsecured tranche prior to August 15, 2003. The deadline extensions under the facility confirm the company's continued access to sufficient liquidity notwithstanding the later than anticipated delivery of accounts. The audit of Stop & Shop's 2002 financial statements is far along, but delays have occurred in particular with regard to accounting implications of treating Stop & Shop on a standalone basis. As a result, more time is required to complete the audit. With respect to the audit of Ahold's 2002 consolidated financial statements, Deloitte & Touche confirmed that an important condition for resuming the audit was the completion of several internal investigations (or completion of certain identified key steps of such investigations) at U.S. Foodservice and at various operating and joint venture companies, all of which have been initiated by Ahold. Deloitte & Touche noted that, while important progress had been made in these investigations, various delays in the completion of these investigations had placed the resumption of important parts of the audit some four to six weeks behind schedule. The auditors did not provide any indication of the expected timing for the completion of the audit of the 2002 financial statements, but did give assurances of their commitment to an effective audit process once the conditions for resumption have been met. $29 Million of Additional Irregularities Ahold also today announced that internal forensic accounting investigations at 14 of its operating and joint venture companies were substantially complete and expected the investigations at the remaining three entities to be completed within the next two weeks. Based on the information received to date, intentional accounting irregularities involving earnings management and misapplications of generally accepted accounting principles were found, principally at the Tops Markets U.S. subsidiary. The amount of these accounting irregularities is approximately USD 29 million, which will require adjustments to reduce Ahold's pre-tax earnings. The investigations completed thus far have also preliminarily identified or confirmed various accounting issues and internal control weaknesses. Management is studying the findings to assess whether additional adjustments may be required to correct any accounting errors that may affect results of operations and to identify needed improvements in controls and procedures at the relevant companies. The adjustments referred to above exclude those required by the overstatement of pre-tax earnings at U.S. Foodservice as announced on May 8, 2003, adjustments that may be required at Disco with respect to the investigation underway there, and adjustments due to Ahold's decision to consolidate its joint ventures on the equity method. The separate internal investigation at Disco in Argentina is expected to be completed shortly. Ahold is currently discussing with its local auditor, Ernst & Young, issues with respect to the resumption of the audit at Disco. Once all the investigations are completed, the company intends to review all findings with the audit committee to determine the necessary accounting adjustments. Ahold will also determine what steps must be taken to strengthen internal controls, to eliminate any improper accounting practices and to take whatever remedial actions are deemed necessary. * * * As previously reported, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Netherlands- based food retailer and food service distributor Ahold Koninklijke N.V. to 'BB-' from 'BB+', following the announcement by the group that accounting irregularities at its U.S. Foodservice arm were materially larger than expected. In addition, the senior unsecured debt ratings on Ahold were lowered to 'B+' from 'BB+', reflecting structural subordination. At the same time, Standard & Poor's affirmed its 'B' short-term rating on the group. AIR CANADA: Reaches Tentative Restructuring Agreement with CAW -------------------------------------------------------------- Air Canada has reached a breakthrough tentative agreement earlier with the CAW Airline Division, representing 6,000 customer sales and service agents and crew schedulers at the mainline carrier. "The process established by Justice Winkler has gathered significant momentum," said Robert Milton, President and Chief Executive Officer. "With the CAW agreement following on tentative agreements reached with two unions at Air Canada Jazz on Saturday, we have achieved $210 million of annual cost reductions from unionized labor groups relating to Air Canada's restructuring under CCAA. I commend the CAW leadership for their decisive action under very trying circumstances. The successful outcome achieved under the guidance of Justice Winkler represents a very significant step in ensuring the airline's survival," said Mr. Milton. The cost reductions provided in the CAW agreement were reached primarily through productivity improvements including workforce reduction and wage rollbacks. The agreement is subject to ratification by union membership. The company has agreed that pension benefits will be unaffected. Additionally progress has been made in discussions with the International Association of Machinists and Aerospace Workers representing Air Canada's 11,000 machinists, CUPE representing 6,700 flight attendants and CALDA representing the airline's 100 flight dispatchers. Mr. Justice Warren Winkler was appointed on May 9, 2003 by Mr. Justice James Farley of the Ontario Superior Court of Justice to facilitate Air Canada's labor cost restructuring under CCAA. On May 21, at Justice Winkler's request, Air Canada presented comprehensive proposals to its unions outlining the specific cost reductions required by each labor group at Air Canada and Air Canada Jazz. In order to accelerate the restructuring process, Justice Winkler has set 5:00 p.m. E.S.T. May 27 as a deadline for the company and its unions to reach negotiated agreements. AIR CANADA: Restructuring Pact with CAW Covers 7,000 Members ------------------------------------------------------------ With Air Canada bordering on liquidation, the Canadian Auto Workers union and Air Canada reached a deal covering 7,000 members at 4:00 a.m., Monday May 26. The deal is another step for Air Canada in the restructuring of the national airline. The deal has not come without economic pain for the workers, their families and the communities they live in. ALGOMA STEEL: Signs Letter of Intent to Sell Seamless Tube Mill --------------------------------------------------------------- Algoma Steel Inc., has signed a letter of intent with Algoma Tubes, Inc., a Canadian subsidiary of Tenaris SA, relating to the sale of tube manufacturing facilities located in Sault Ste. Marie and currently leased to Algoma Tubes, Inc. The sale for $12.5 million Canadian is scheduled to be completed by year-end but remains subject to a number of conditions and approvals. This sale is part of Algoma's program to reduce debt and improve liquidity. Algoma expects to realize a total of about $15 million from the disposition of surplus assets in 2003. Algoma Steel Inc. is an integrated steel producer based in Sault Ste. Marie, Ontario. Revenues are derived primarily from the manufacture and sale of rolled steel products, including hot and cold rolled sheet and plate. ALGOMA STEEL: Tenaris to Acquire Seamless Tube Mill for C$12.5MM ---------------------------------------------------------------- Tenaris S.A. (NYSE:TS) (Buenos Aires:TS) (BMV:TS) (MTA Italy:TEN), has signed a letter of intent with Algoma Steel Inc. (TSE:AGA) relating to the purchase of the land and manufacturing facilities currently leased by its Canadian operating subsidiary, Algoma Tubes Inc., for the price of $12.5 million Canadian. The purchase, which is scheduled to be completed by the end of this year, remains subject to a number of conditions including the conclusion of an agreement with the United Steelworkers of America union and various Canadian governmental approvals. Tenaris is a leading global manufacturer of seamless steel pipe products and provider of pipe handling, stocking and distribution services to the oil and gas, energy and mechanical industries and a leading regional supplier of welded steel pipes for gas pipelines in South America. Organized in Luxembourg, we have pipe manufacturing facilities in Argentina, Brazil, Canada, Italy, Japan, Mexico and Venezuela and a network of customer service centers present in over 20 countries worldwide. Algoma Steel Inc.'s 11.00% bonds due 2009 (AGA09CAR1) are trading at about 74 cents-on-the-dollar, says DebtTraders. See http://www.debttraders.com/price.cfm?dt_sec_ticker=AGA09CAR1for real-time bond pricing. ALLEGIANCE TELECOM: Wants to Hire Ordinary Course Professionals --------------------------------------------------------------- Allegiance Telecom, Inc., and its debtor-affiliates ask for authority from the U.S. Bankruptcy Court for the Southern District of New York to continue employing professionals to which management turns in the ordinary course of their businesses without the submission of separate employment applications and affidavits and the issuance of separate retention orders for each individual professional. The Debtors also request authority to pay to each Ordinary Course Professional's 100% of fees and disbursements incurred each month, following submission of appropriate invoices setting forth in reasonable detail the nature of the services rendered and disbursements actually incurred; provided, however, that each professional's fees shall not exceed a total of $30,000 per month or $500,000 in the aggregate in the Debtors' chapter 11 cases. In addition to attorneys, the Debtors employ certain professionals that provide the Debtors with tax consulting, benefits consulting and other similar services. The Debtors desire to continue to employ the Ordinary Course Professionals to render many of the services to their estates similar to those services rendered prior to the Commencement Date. These Ordinary Course Professionals render a wide range of services for the Debtors that impact the Debtors' day-to-day operations. It is essential that the employment of the Ordinary Course Professionals, majority are already familiar with the Debtors' operations and business affairs, continue on an ongoing and uninterrupted basis to avoid disruption of the Debtors' day- to-day business operations. The Debtors argue that this will save the Debtors' estates the substantial expense associated with applying separately for the employment of each professional. Further, it will avoid the incurrence of additional fees pertaining to preparing and prosecuting interim fee applications together with the review process by other parties in interest. Allegiance Telecom, Inc., is a holding company with subsidiaries operating in 36 major metropolitan areas in the U.S. who provide a package of telecommunications services, including local, long distance, international calling, high-speed data transmission and Internet services and customer premise communications equipment sales and maintenance services. The Debtors filed for chapter 11 protection on May 14, 2003 (Bankr. S.D.N.Y. Case No. 03-13057). Jonathan S. Henes, Esq., and Matthew Allen Cantor, Esq., at Kirkland & Ellis represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $1,441,218,000 in total assets and $1,397,494,000 in total debts. AMERICAN COMMERCIAL: Gets Nod to Hire Ernst & Young as Auditors --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana approved American Commercial Lines, LLC and its debtor-affiliates' request to hire Ernst & Young LLP as their Accountants, Auditors and Tax Services Providers. The Debtors are familiar with the professional standing and reputation of Ernst & Young. The Debtors understand that Ernst & Young has a vast amount of experience in providing accounting, tax and financial advisory services in restructurings and reorganizations and enjoys an excellent reputation for services it has rendered in other chapter 11 cases on behalf of debtors and creditors throughout the United States. Ernst & Young will provide such accounting, auditing and tax compliance and advisory services in order to advise the Debtors' in the course of these chapter 11 cases, including: a) working with the Debtors' personnel in developing an understanding of the business objectives related to the Debtors' chapter 11 filing, including understanding reorganization and/or restructuring alternatives the Debtors are evaluating; b) preparing and/or reviewing tax analyses, supporting computations, recommendations, conclusions and correspondence related to bankruptcy tax issues, proposed restructuring and/or liquidation alternatives including, but not limited to, the sale of stock and/or assets, and other ancillary tax matters; c) assisting and advising the Debtors in their bankruptcy restructuring objectives and post-bankruptcy operations by assisting in the determination of the optimal tax manner to achieve objectives, including, as needed, research and analysis of Internal Revenue Code sections, treasury regulations, case law and other relevant tax authority which could be applied to business valuation or restructuring models; d) preparing and/or reviewing tax analyses, supporting computations; recommendations, and correspondence related to state and local tax jurisdictions, to include income taxes, franchise and capital taxes, real property, personal property and intangible property taxes, sales and use taxes, employment related taxes, gross receipt taxes, severance taxes, and other taxes levied by such jurisdictions on the Debtors' business, as well as the application of enterprise zone benefits, abatements, credits, refunds and like scenarios made available by such jurisdictions; e) assistance with federal, state and local tax audits, notices and inquiries; and f) analysis and assistance with respect to federal, state and local tax planning issues and opportunities of the Debtors not separately stated above and tax accounting assistance in that regard. The fees for these services will be based on Ernst & Young's standard hourly rates: Partners and Principals $541-774 per hour Senior Manager $491-600 per hour Manager $368-484 per hour Senior $249-300 per hour Staff $ 80-202 per hour The Debtors also have requested and Ernst & Young has agreed to provide expatriate tax services, including: a) assisting with and preparing US Federal tax returns for participants; b) assisting with and preparing US state and local tax returns for participants; c) assisting with and preparing host country tax returns for participants; and d) analysis of US tax reimbursement and equalization for participations and preparation of tax equalization documents. The fees for expatriate tax services will be based on a flat, per-participant rate for each service, plus expenses: Fee per Participant ------------------ US Federal Personal Income Tax Return $1,750 to $2,250 US State Personal Income Tax Return $600 to $700 US Local Personal Income Tax Return $350 to $450 Host Country Personal Income Tax Return $1,750 to $2,250 Tax Reimbursement/Equalization Calc $1,450 to $1,700 Hypothetical Tax Withholding Calc $700 to $850 Additionally, the Debtors will retain Ernst & Young to audit and report on the consolidated financial statements of the Debtors for the year ending December 27, 2002, and to review the Debtors' unaudited quarterly information before the Debtors file Form 10-Q. Ernst & Young will also audit and report on the financial statements and supplemental schedules of the Jeffboat Hourly Employess 401(k) Plan for the year ended December31, 2002. Ernst & Young's postpetition fees for: i) completing the consolidated audit of American Commercial Lines LLC for the year ended December 27, 2002 is $50,000, plus reimbursement of expenses ii) the audit of a Debtor's employee benefit plan for the year ended December 31, 2002 is $14,500, plus reimbursement of expenses iii) each quarterly review shall be a flat fee of $25,000 per quarterly review, plus reimbursement of expenses. Lastly, Ernst & Young's fees for any other special audit-related projects will be based on hourly rates ranging from: Partners and Principals $500-600 per hour Senior Manager $360-490 per hour Manager $275-325 per hour Senior $195-250 per hour Staff $130-150 per hour Steven C. Olson assures the Court that Personnel with lower billing rates will be used to the extent possible. American Commercial Lines LLC, an integrated marine transportation and service company transporting more than 70 million tons of freight annually using 5,000 barges and 200 towboats in North and South American inland waterways, filed for chapter 11 protection on January 31, 2003 (Bankr. S.D. Ind. Case No. 03-90305). American Commercial is a wholly owned subsidiary of Danielson Holding Corporation (Amex: DHC). Suzette E. Bewley, Esq., at Baker & Daniels represents the Debtors in their restructuring efforts. As of September 27, 2002, the Debtors listed total assets of $838,878,000 and total debts of $770,217,000. ANC RENTAL: Wants Court Approval of Supplemental Bank Settlement ---------------------------------------------------------------- Bonnie Glantz Fatell, Esq., at Blank Rome LLP, in Wilmington, Delaware, recounts that on February 14, 2003, ANC Rental Corporation and its debtor-affiliates filed a motion seeking authority to enter into a debtor-in-possession financing agreement. Three of the Supplemental Lenders, Bank of Tokyo- Mitsubishi Trust Company, Fleet Capital Corp. and Provident Bank filed an objection to the DIP financing. Shortly thereafter, the Objecting Banks joined in the efforts of the Borrowing Base Lenders and began taking discovery in connection with their objection. Although the Debtors believed that they would ultimately prevail on the DIP financing motion over the Objecting Banks' objection, in order to avoid the expense of extended discovery and the potential for delay in approval of the DIP financing if there was protracted litigation, they engaged in negotiations with the Objecting Banks to settle their objection. On March 6, 2003, the Debtors and the Supplemental Lenders entered into the Settlement. The Debtors believed the Settlement to be in the best interest of the estates and their creditors because it allowed the Debtors to enter, without delay, into certain postpetition financings, including the Loan and Security Agreement, dated as of March 19, 2003, among the Debtors and DaimlerChrysler. On March 19, 2003, Ms. Fatell states that that the Court entered the Corrected Final Order Authorizing Debtors to obtain Postpetition Financing, grant liens and priority administrative expense status and modify the automatic stay, which among other things, set forth the terms of the Debtors' settlement with the Supplemental Lenders. The Final DIP Order provided that the Debtors would move the Court for an order authorizing the Debtors, after confirmation of a plan of reorganization, other than a "Stand Alone Plan," to pay in full all the pre- and postpetition obligations, liabilities and indebtedness due the Supplemental Lenders pursuant to their prepetition agreements with the Debtors and the Cash Collateral Orders, subject to the STS Approval Order. The Final DIP Order provided that the Debtors would make a motion seeking approval of that portion of the Supplemental Settlement. Accordingly, the Debtors sought and obtained approval of the Settlement and authorization to implement the Plan Payout Provision, subject to the protections granted to Liberty Mutual Insurance Company in the Corrected and Final Order authorizing the Debtors to obtain further Postpetition Surety Bonding From Liberty Mutual Insurance Company and providing for additional Collateral dated March 19, 2003. On February 14, 2003, Ms. Fatell reports that the Debtors filed their Motion for entry of an Order authorizing Debtors to obtain Postpetition Financing, grant liens and priority administrative expense status and modify the automatic stay and approve use of Cash Collateral through the Debtors Chapter 11 Cases and granting replacement liens and adequate protection. On February 27 2003, the Objecting Banks filed their Joint Objection to Debtors' Motion, under which they engaged in extensive discovery. On February 28, 2003, the Debtors filed their Partially Amended Motion. Following the settlement entered into by the Debtors and Congress dated March 5, 2003, Ms. Fatell relates that the Debtors and the Objecting Banks, after an arms-length and good faith negotiations, and in consultation with the other Secured Lenders and the Official Committee of Unsecured Creditors, agreed to terms settling their disputes and entered into a settlement agreement dated March 6, 2003. Pursuant to the Settlement, the remaining depositions were cancelled and the Objecting Banks agreed to withdraw their objection. The Settlement provides for, among other things, adequate protection payments to the Supplemental Lenders and certain collateral carve-outs from the Chrysler Priming Liens. However, at the March 7, 2003 hearing, after informing this Court of the terms of the Congress Settlement and the Supplemental Settlement, the Court expressed concern as to whether the Plan Payout Provision could be approved in connection with the resolution of an objection to the DIP Motion rather than as a separate Rule 9019 motion. To address the Court's concerns, certain provisions of the Settlement were incorporated into the Final DIP Order. The terms of the Settlement were approved by and incorporated into the Final DIP Order, pursuant to which the Debtors, the Objecting Banks, the Secured Lenders and the Committee agreed to the Plan Payout Provision. "Because the Debtors and the Objecting Banks settled their disputes, the Debtors were able to avoid the cost and expense of further litigation with the Objecting Banks and were able to avoid any potential delay in the Debtors' ability to obtain much needed postpetition financing," Ms. Fatell says. (ANC Rental Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 609/392-0900) ARADYME CORP: Taps H.J. & Associates as Auditor and Inv. Banker --------------------------------------------------------------- Aradyme Corp. (OTCBB:ADYE) announced that as a result of their recent reorganization, the company's new board of directors has engaged H.J. and Associates, with office in Salt Lake City, Utah, as the company's auditing firm. The board's decision was based on the relationship and understanding of Aradyme's business that H.J. has acquired over the last two years. H.J. and Associates has been the auditor for Aradyme's wholly owned subsidiary, Aradyme Development Corp. There were no other issues relative to the decision to change the auditing firm. Pursuant to previous shareholder action the board is moving forward to increase authorized shares of common stock from 20,000,000 to 50,000,000 shares, in anticipation of continuing its activities of raising funding, starting with a private placement of up to $5,000,000. The company is working with Bond Capital Management out of Los Angeles, California to manage the company's investment banking needs. This additional funding will allow the company to move forward with its sales and marketing activities to help the company reach its projected sales growth, and hire additional fulfillment staff to assist in the completion of existing and pending contracts. It is anticipated that this funding will allow the company to reach its projected revenue and achieve profitability in the next twelve months based on current business operations. Bond Capital Management, Inc. delivers innovative capital raising, financing and strategic advisory services. In the private and public markets, Bond Capital raises debt and equity funding, initiates, structures and negotiates mergers, acquisitions and divestitures. Aradyme Development Corp. is a "Next Generation" database platform company. It develops and distributes integrated software solutions that help companies manage and grow their businesses. It uses proprietary technology to rapidly build integrated database applications in a drag-and-drop environment that are more powerful, flexible and yet more affordable than today's leading alternatives. Aradyme-based solutions remain flexible to real-time additions, modifications and changes, allowing applications to continually evolve real-time with business processes. Aradyme is currently involved in custom application development in a variety of business sectors and markets. * * * Aradyme, a development-stage company, had $30,148 in revenue for the fiscal year ended September 30, 2002, and had an accumulated loss of $891,200 for the year ended September 30, 2002, and $1,109,980 for the period from inception through September 30, 2002. For the quarter ended December 31, 2002, Aradyme reported revenue of $15,995 and a loss of $215,937, for an accumulated loss of $1,325,917 from inception through December 31, 2002. As of December 31, 2002, Aradyme had stockholders' equity (deficit) of ($124,041). The auditors' report for the year ended September 30, 2002, contained an explanatory paragraph regarding the ability of aradyme to continue as a going concern. Since inception, Aradyme has relied on proceeds from the sale of securities to fund its activities. From inception through December 31, 2002, Aradyme had required an aggregate of $1,171,000 in cash to fund its operating activities and $23,000 to fund its investing activities, all of which was provided by the $1,238,000 received from financing activities, including approximately $1,139,000 in net proceeds from the sale of common and preferred stock and approximately $126,000 net advances from a related party. Aradyme estimates that it will require approximately $2.0 million in cash to fund its activities through December 31, 2003, which it will seek to obtain principally through the sale of securities. Aradyme has no commitment from any person to acquire all or any of such securities or to provide funding through any other mechanism. Aradyme expects that additional capital will be required in 2004 if it is unable to generate sufficient revenues from commercialization of the Aradyme DBMS. ARMSTRONG: AWI Wants to Expand American Appraisal's Engagement -------------------------------------------------------------- To comply with its financial reporting requirements for fresh start accounting in accordance with SOP 90-7, Financial Reporting by Entities in Reorganization under the Bankruptcy Code, Armstrong World Industries must conduct valuation studies on additional domestic and international real and personal leased property not included in American Appraisal Associates, Inc.'s initial engagement. AAA was initially engaged to perform an independent valuation to adjust the corporate books prepared by United States' Generally Accepted Accounting Principles to reflect the fair value of AWI's acquired tangible and intangible assets for the purposes of performing "fresh start" accounting required to be performed by AWI upon its emergence from Chapter 11. As a result of AAA's valuation findings during Phase 1 of the engagement, AWI determined that a broader sampling of valuation studies, including certain AWI facilities that are more unique in nature -- i.e., metal ceilings and carpet plants -- is warranted to ensure a more reliable valuation. Moreover, AWI must perform valuation studies of its personal property to ascertain certain costs to assist its insurance/risk management procedures. Current insurance procedures estimate the value of AWI's personal property based upon decades-old indices. A more accurate insurable value of AWI's assets can be obtained by extending AAA's work to include preparing current estimates of value that can be used for insurance and risk management purposes. Thus, AWI seeks the Court's authority to expand the scope of AAA's employment. According to Rebecca L. Booth, Esq., at Richards Layton & Finger, in Wilmington, Delaware, the supplemental valuation services may include providing AWI with: (i) additional independent valuation reports for certain AWI domestic and international sites not included in the initial engagement, and (ii) an independent valuation of CRN of AWI's buildings, equipment, fixtures and other personal property assets currently in use and included with AAA's fresh start accounting appraisal to assist AWI with its insurance and risk management procedures. The Debtors and AAA assure Judge Newsome that this expansion of the scope of AAA's employment will not duplicate the work that has been or will be performed by other professionals already, or to be, retained by AWI. AAA's fees for the completion of this expanded engagement are estimated to be between $130,000 to $150,000 plus expenses, bringing the total amended fee for completion of Phase II valuation services between $540,000 to $560,000, plus expenses. AAA's fees are not contingent on the outcome of its valuation of AWI's assets. Michael Rathbone reports that AAA continues to be a "disinterested person", which neither holds nor represents any interest adverse to the Debtors in these matters. (Armstrong Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service, Inc., 609/392-0900) BASIS100: Debentureholders' Special Meeting Reconvenes on June 5 ---------------------------------------------------------------- Basis100 (TSX: BAS), a business solutions provider for the mortgage lending marketplace, will hold its Special Meeting of Debentureholders on June 5 at 9:00 a.m. at Basis100's office, located at 33 Yonge Street, Suite 900 in Toronto. This meeting was originally scheduled for May 15, but was adjourned because a quorum was not present. Quorum for the reconvened meeting will be the debentureholders present in person or by proxy. The record date for the Adjourned Meeting is April 8, 2003. Registered debentureholders as of that date may vote in person or via proxy. Those wishing to vote via proxy may do so by executing their proxy form and depositing it with CIBC Mellon Trust Company by 5:00 pm (Toronto time) on June 3, 2003. Proxies can be faxed in to 416-368-2502. Non-registered debentureholders as of the record date wanting to vote in person at the meeting are to have their proxy forms certified by their nominee brokers prior to the meeting. Basis100 (TSX: BAS) is a business solutions provider that fuses mortgage processing knowledge and experience with proprietary technology to deliver exceptional services. The company's delivery platform defines industry-class best execution strategies that streamline processes and creates new value in the mortgage lending markets. For more information about Basis100, visit http://www.Basis100.com At March 31, 2003, the Company's balance sheet shows a working capital deficit of about CDN$5 million. CALYPTE BIOMEDICAL: Delays Filing of Form 10-Q for First Quarter ---------------------------------------------------------------- Calypte Biomedical Corporation is still awaiting documentation in order to properly prepare a complete and accurate Form 10-Q financial information for filing with the SEC. The Company has been unable to receive this data in a timely manner without unreasonable effort and expense. For the foregoing reasons, the Company requires additional time in order to prepare and file its quarterly report on Form 10-Q for the quarter ended March 31, 2003. Calypte anticipates that it will have all necessary information required to complete and file its Form 10- Q within a short period of time. Revenues for the first quarter of 2003 totaled $784,000, compared with $1,159,000 for the comparable period in 2002. The net loss attributable to common stockholders for the first quarter of 2003 was $6,374,000 compared with a net loss attributable to common stockholders of $678,000 for the three months ended March 31, 2002. The net loss for the first quarter of 2003 included $3,587,000 in non-cash charges that were related to the grants of common stock and options and warrants as compensation for services and non-cash interest expense related primarily to the accounting for Calypte's convertible debt financing instruments. During the quarter ended March 31, 2002, non-cash charges and credits were a net credit of $1,292,000, related primarily to the gain on settlement of debt. The change in revenue from the quarter ended March 31, 2002 as compared to the quarter ended March 31, 2003 can be attributed in part to the announcement made by Calypte last fiscal year of its intention to wind down its operations. In anticipation of the wind down last year, many of the Company's customers in turn increased their order rates as a contingency in the event of a cessation of Calypte's operations and non-availability of its products. The Company subsequently restarted its operations and the post-restart revenue for quarter ended March 31, 2003 did not reflect the uncharacteristically higher order rate reflected in the March 31, 2002 revenues. At March 31, 2003, the Company's balance sheet shows a working capital deficit of about $6 million, and a total shareholders' equity deficit of about $8 million. Calypte Biomedical Corporation is a health care company dedicated to the development and commercialization of urine- based diagnostic products and services for Human Immunodeficiency Virus Type 1 (HIV-1), sexually transmitted diseases and other chronic illnesses. The Company's tests include the screening enzyme immunoassay (EIA) and supplemental Western Blot tests, the only two FDA-licensed HIV-1 antibody tests that can be used on urine samples. The Company believes that accurate, non-invasive urine-based testing methods for HIV and other chronic diseases make important contributions to public health by helping to foster an environment in which testing may be done safely, economically, and painlessly. CAPITOL COMMUNITIES: Misses Deadline for Filing Fin'l Statements ---------------------------------------------------------------- Capitol Communities Corporation has not timely filed its current financial information with the SEC because it is in the process of consolidating its financial accounting department to its new principal place of business located in Boca Raton, Florida. The Company anticipates a loss of approximately $1,000,000 for the six months ended March 31, 2003, compared to a net income of $2,249,078 for the six months ended March 31, 2002. The loss is primarily the result of the dissolution of an interest the Company held in a limited liability company. Capitol Communities Corporation, through its subsidiary, owns approximately 1,000 acres of residential property in the master planned community of Maumelle, Arkansas. Maumelle is a planned city with about 12,000 residents. It is located directly across the Arkansas River from Little Rock. Maumelle contains a full complement of industrial and commercial development, parks, lakes, green belts, jogging trails, and other lifestyle amenities. * * * As previously reported in the Sept. 12, 2002, edition of the Troubled Company Reporter, Capitol Communities Corporation (OTC Bulletin Board: CPCY) announced the United States Bankruptcy Court for the Eastern District of Arkansas, Little Rock Division dismissed the Chapter 11 filing of its wholly owned subsidiary, Capitol Development of Arkansas, Inc. Capitol Development paid its secured and unaffiliated creditors instead of filing a plan of reorganization. The dismissal was effective September 6, 2002. CARR PHARMACEUTICALS: Case Summary & 20 Unsecured Creditors ----------------------------------------------------------- Debtor: Carr Pharmaceuticals, Inc. f/k/a Miza Pharmaceuticals USA, Inc. 40 Main Street Fairton, New Jersey 08320 Bankruptcy Case No.: 03-27366 Type of Business: The Debtor is an affiliate of Miza Pharmaceuticals, Inc., a pharmaceutical contract manufacturing company. Chapter 11 Petition Date: May 23, 2003 Court: District of New Jersey (Camden) Debtor's Counsel: Michael G. Menkowitz, Esq. Fox Rothschild LLP 997 Lenox Drive, Building Three Princeton Pike Corporate Center Lawrenceville, NJ 08648 -and- Magdalena Schardt, Esq. Fox Rothschild LLP 2000 Market Street, Tenth Floor Philadelphia, Pennsylvania 19103-3291 Telephone: 215-299-2000 Fax: 215-299-2150 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Kachkar, Jack, Dr. $1,655,712 445 Grand Bay Drive, Unit 1210 Key Biscayne, FL 33149 IPS $337,549 2001 Joshua Road Lafayette Hill, PA 19444 Ciba Vision $289,557 6515 Kitimat Road Mississauga ONTARIO L5N 2X5 Andler Plastics, Inc. $90,000 Carrigan, Robert M. Jr. $87,786 BayHawk Associates, Inc. $54,089 AGI Klearfold $32,800 Ballard, Spahr, Andrews $42,000 Bay Colony $45,000 Cintas Corporation $67,333 Connective Power Delivery $20,914 Drug Plastics & Glass Co. $39,772 EMD Chemicals, Inc. $57,075 Napp Technologies, Inc. $32,198 Pall Trincor Corporation $46,883 Reed, Sondra $51,918 Roadway Express $44,099 Sullivan & Shuman, P.C. $44,133 TCI America $32,193 Technical Traffic $51,539 CINEMA RIDE: Commences Trading on Pink Sheets Effective Tuesday --------------------------------------------------------------- Cinema Ride, Inc.'s (OTCBB:MOVE) common shares began trading on the Over the Counter Pink Sheets, effective Tuesday, May 27, 2003. Quotes may be obtained at http://www.pinksheets.comunder the ticker trading symbol "MOVE." The Company has not filed with the Securities and Exchange Commission its Form 10-KSB for the year ended December 31, 2002, and its Form 10-QSB for the three months ended March 31, 2003. The Company intends to file the Form 10-KSB by May 30, 2003, and the Form 10-QSB within three weeks thereafter. Concurrent with the filing of the Form 10-QSB, the Company intends to immediately reapply for reinstatement to the OTC Bulletin Board, which the Company believes will be accepted. The Company cited several reasons for being late with its filings. These reasons include new securities counsel, new auditors, significant new regulations, the new Tickets2Nite business, and the litigation against the Company's Tickets2Nite partner that was adjudicated on May 9, 2003. However, no ruling by the trial court has been issued to date. Tickets2Nite sells tickets to Las Vegas shows at half-price on the same day of the performance. Tickets2Nite commenced operations in early November 2002. The Company's ticket booth is located adjacent to the giant Coke bottle on the Las Vegas Strip, and is operated under the name "Coca-Cola Tickets2Nite." This concept of same day, half-price tickets is a successful, well-established institution in New York City's Times Square. Based upon operating results to date, the Company believes that the Tickets2Nite business venture has the potential to contribute materially to the Company's future financial results. In addition to the Company's Tickets2Nite business, Cinema Ride, Inc. owns and operates motion simulation theater attractions at The Forum Shops at Caesars Palace in Las Vegas, Nevada, and at the West Edmonton Mall in Edmonton, Alberta, Canada. Cinema Ride, Inc.'s September 30, 2002 balance sheet shows a working capital deficit of about $340,000 and a total shareholders' equity deficit of about $24,000. CONSECO INC: Enters into Federal Income Tax Sharing Agreement ------------------------------------------------------------- On February 4, 1989, the Debtors and its non-debtor affiliates entered into the Conseco, Inc. & Subsidiaries Consolidated Federal Income Tax Agreement. The Agreement governed coordination of their tax payments and refunds and organized an intercompany payment structure to assess and share tax liabilities. Conseco, Inc., CIHC, Inc., Partners Health Group and CTIHC, Inc. seek the Court's permission to enter into an Amended and Restated Tax Sharing Agreement. James H.M. Sprayregen, Esq., at Kirkland & Ellis, argues that the New Tax Sharing Agreement should be effective for the Reorganizing Debtors and their affiliates. This will implement an almost identical tax structure to that provided by the Original Agreement, sans the CFC Debtors. Mr. Sprayregen tells Judge Doyle that tax sharing agreements are common among affiliated groups that file consolidated federal and state tax returns since they assure equitable distribution of tax gains and losses amongst group members. It is important to have a Tax Sharing Agreement in place so as not to distort the financial accounting and financial statements of the Reorganizing Debtors. In particular, auditors for the Reorganizing Debtors have warned against the transfer of tax benefits, accruals and other rights within the group. Accurate financial statements are extraordinarily important to the Debtors, their investors, creditors and governmental regulators. (Conseco Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 609/392-0900) CONTINENTAL AIRLINES: 12-Yr.-Old Bankruptcy Case Formally Closed ---------------------------------------------------------------- The Honorable Mary F. Walrath, sitting in the United States Bankruptcy Court for the District of Delaware, rules that In re Continental Airlines, Inc., et al., Bankruptcy Case Nos. 90-932 through 90-984, are officially closed and entered a entered a Final Decree pursuant to 11 U.S.C. Sec. 350(a) and Rule 3022 of the Federal Rules of Bankruptcy Procedure. Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, advised the Court that all motions, contested matters, and other proceedings before the Bankruptcy Court have been resolved. While one appeal to the U.S. District Court for the District of Delaware (arising in Baldridge v. Continental, Adv. Pro. No. 99- 412) remains open, Continental doesn't believe that will result in any additional matters coming before the Bankruptcy Court. All expenses arising from the administration of Continental's bankruptcy cases have been paid or will be paid. Everything that the Plan said would be done has been done. Continental Airlines, Inc., and 52 debtor-affiliates filed for chapter 11 protection on December 3, 1990. The U.S. Bankruptcy Court for the District of Delaware confirmed Continental's chapter 11 plan on April 16, 1993. That Plan was declared effective on April 27, 1993. Judge Walrath's Final Decree is dated May 15, 2003. Continental Airlines' 11.500% bonds due 2008 (CAL08USR1) are trading at about 55 cents-on-the-dollar, DebtTraders says. See http://www.debttraders.com/price.cfm?dt_sec_ticker=CAL08USR1for real-time bond pricing. CROWN RESOURCES: Red Ink Continues to Flow in First Quarter 2003 ---------------------------------------------------------------- Crown Resources Inc. currently has no source of recurring revenue and anticipates any future recurring revenue would only occur after the successful development of the Buckhorn Mtn. Project. The successful development of the Buckhorn Mtn. Project is dependent on several factors, many of which are beyond Company control. Crown indicates that it cannot provide any assurance it will be able to successfully permit and develop the Buckhorn Mtn. Project. Crown had a net loss of $661,000 for the first quarter of 2003 compared with a loss of $606,000 for the first quarter of 2002. The increase in the loss was the result of an increase in general and administrative costs related to non-cash stock option compensation expense of $416,000 recorded in the first quarter of 2003 and an increase in interest costs related to the convertible notes issued during 2002 and 2003. These increases were mitigated by a smaller loss at Solitario, which had reduced exploration expense during the first quarter of 2003 compared to the first quarter of 2002 and a deferred tax benefit recorded in the first quarter of 2003. Total revenues from interest income for the first quarter of 2003 were $5,000 compared with $1,000 for prior year quarter. An increase in cash balances, related to the Senior Note and Subordinated B Note financings accounted for the increase. Crown had no active exploration projects during the first quarter of 2003 or 2002. General and administrative expenses increased to $549,000 during the first quarter of 2003 compared to $126,000 in the prior year. The increase was related to a non-cash charge of $416,000 to compensation expense related to stock options granted during 2002 that are subject to variable plan accounting. Under variable plan accounting, any increase in the intrinsic value of an option due to changes in the market value of Crown's common stock are charged to compensation expense during the period of service (the vesting period) of the option. In the event the market value of Crown's stock is reduced, Crown may record a credit to (reduction of) compensation expense up to the amount of previously recorded compensation expense. There were no charges to compensation expense in the prior year quarter. Interest expense was $409,000 for the first quarter of 2003 compared to $280,000 in the first quarter of the prior year. The interest is related to the newly issued Senior Notes, Secured Notes, Subordinated Notes and Subordinated B Notes. All of the notes accrue interest at the rate of 10% per year. Crown has the option to pay the quarterly interest payments in Crown common stock at the conversion price of $0.35 per share and $0.2916 per share for the Senior Notes, $0.35 for the Secured Notes, and $0.75 per share for the Subordinated and Subordinated B Notes. During the first quarter of 2003, Crown issued 542,763 shares of common stock, with a market value of $299,000 for interest on the Senior, Secured and Subordinated Notes, compared to the issuance during the first quarter of 2002 of 50,160 shares with a market value of $29,000 for interest on the Senior Notes. In addition, the Senior Notes were issued at a discount related to attached warrants and a beneficial conversion feature. The Secured Notes were also issued at a discount related to a beneficial conversion feature. These discounts are being amortized to interest expense, using the interest method over the life of the notes. During the first quarter of 2003 Crown recorded $89,000 of interest expense related to the amortization of the discounts compared to $19,000 in the prior year quarter. Crown accrued $238,000 in interest expense on the Debentures during the first quarter of 2002. Crown recorded $52,000 of equity in loss of unconsolidated subsidiary, related to Solitario, during the first quarter of 2003 compared to $199,000 during the first quarter of 2002. The decrease in the loss from Solitario was the result of Solitario's reduced exploration expense in the first quarter of $9,000, compared to $295,000 during 2002. Solitario concentrated its exploration activities to the Pedra Branca project in Brazil, in 2002 and 2003. In January 2003, Solitario entered into a joint venture agreement with Anglo American Platinum Corporation, Ltd., which provides that Anglo will pay the exploration costs on the project up to $500,000 during the first six months of the agreement. In addition Solitario reduced general and administrative expenses during the first quarter of 2003 compared to the first quarter of 2002 related to reductions in staff travel and office expenses. A deferred tax benefit of $340,000 was recorded during the first quarter of 2003 related to the losses incurred by Crown during the quarter. Prior to the Effective Date, , Crown had provided a valuation allowance for the excess of its deferred tax assets over its deferred tax liabilities. As a result of the Plan, the availability of Crown's deferred tax assets, consisting primarily of net operating and capital loss carryforwards were limited by the provisions of section 382 of the Internal Revenue Code as a result of a change in control. The reduction in the deferred tax asset, coupled with additional deferred tax liabilities recorded in connection with the discounts to the Senior Notes and the Secured Notes, has resulted in a net deferred tax liability of $3,190,000 as of the Effective Date. Liquidity and Capital Resources Due to the nature of the mining business, the acquisition, exploration and development of mineral properties require significant expenditures prior to the commencement of production. The Company has, in the past, financed its activities through the sale of debt and equity securities, joint venture arrangements (including project financing) and the sale of interests in its properties. To the extent necessary, it expects to continue to use similar financing techniques. Exploration and development activities and funding opportunities, as well as those of its joint venture partners, may be materially affected by gold price and mineral commodity levels and changes in those levels. The market price of gold and mineral commodities is determined in world markets and is affected by numerous factors, many of which are beyond Company control. Net cash used in operating activities was $374,000 in the first quarter of 2003 compared to $145,000 during the first quarter of 2002. The use of cash included payment of $258,000 of accounts payable that were reduced to $29,000 at March 31, 2003 from $287,000 at December 31, 2002. The large accounts payable at the end of 2002 related to drilling activity on the Buckhorn Mtn. Project at the end of last year. During the three months ended March 31, 2003, Crown spent $265,000 for net additions to mineral property for costs related to permitting and maintenance costs at its Buckhorn Mountain Project compared to $29,000 in the first three months of 2002. Since Crown emerged from the Bankruptcy its primary focus has been and will continue to be toward the permitting of the Buckhorn Mountain Project. Crown has budgeted $1,575,000 for permitting and development expenditures in 2003 related to the Buckhorn Mtn. Project. These costs include infill drilling of the deposit, certain baseline hydrologic studies, engineering and design work, an updated feasibility study, and work on a supplemental draft environmental impact statement. Additionally, the Company will pay certain maintenance and legal expenses to maintain Crown's interest in the Buckhorn Mtn. Project. The development of the Buckhorn Mtn. Project through initial production is currently estimated to be approximately $91 million (including $21 million in contingency). Crown will require significant new financial resources in order to develop the Buckhorn Mtn. Project, which may be in the form of a joint venture, project or debt finance, or issuance of equity. There is no assurance the Company will be able to obtain the necessary financial resources on acceptable terms, if at all. Net cash provided from financing activities increased to $2,737,000 for the first three months of 2003 compared to $200,000 for the first quarter of 2002. Crown issued $2,705,000 in Subordinated B Notes on February 21, 2003. Cash and cash equivalents amounted to $3,129,000 at March 31, 2003. These funds are generally invested in short-term interest-bearing deposits and securities. CYPRESS AVIATION: Voluntary Chapter 7 Case Summary -------------------------------------------------- Debtor: Cypress Aviation, Inc. 3201 Flightline Drive, #301 Lakeland, Florida 33811 Bankruptcy Case No.: 03-08277 Type of Business: Aircraft maintenance and refurbishment service center Chapter 7 Petition Date: April 23, 2003 Court: Middle District of Florida, Tampa Division Debtors' Counsel: Don M. Stichter, Esq. Stichter, Riedel, Blain & Prosser, P.A. 110 E. Madison St., #200 Tampa, FL 33602 Tel: 813-229-0144 Fax: 813-229-1811 Estimated Assets: $100,000 to $500,000 Estimated Debts: $100,000 to $500,000 ENRON: Rexam Wants Nod for Recoupment Under Rejected Contract ------------------------------------------------------------- Rexam Beverage Can Company seeks the Court's authority to implement its recoupment rights under a rejected agreement. In the alternative, Rexam seeks relief from the automatic stay under Section 362(d)(1) of the Bankruptcy Code to exercise its set-off rights with respect to a prepetition contract with Enron Energy Services Inc. As part of its business, from time to time, Rexam Beverage Can Company enters into long-term forward contracts for purchase and delivery of certain commodities -- metals, natural gas, electricity and other materials -- to its industrial facilities. On August 31, 2000, RBC and Enron Energy Services Inc. entered into a Commodity Management Agreement, as amended, for: (i) RBC's long-term purchase from EESI of electricity and natural gas for 20 of its industrial facilities; and (ii) for EESI's performance of certain utility bill management services for RBC. Paul M. Hellegers, Esq., at Meinaker & Herrmann LLP, in New York, reports that prior to Petition Date, EESI did not satisfy its obligations to provide RBC complete and accurate billing management services under the agreement. On a consistent basis EESI failed to properly account for billings from third party utilities and correspondingly erred in calculating pricing for EESI's invoices to RBC. In response to EESI's billing errors, RBC regularly engaged its own personnel to monitor, audit, and correct EESI's billing errors under the Agreement. EESI issued to RBC a Billing Services Termination Letter dated November 30, 2001 informing RBC that, "effective immediately, EESI is ceasing services as RBC's utility bill manager." Thus, on the eve of bankruptcy filing, EESI unilaterally rejected its continuing obligations to provide billing services, thereby declaring its prepetition repudiation and breach of its obligations under Section 4.1 of the Agreement. Notwithstanding EESI's clear repudiation of its contractual obligations, Mr. Hellegers points out that in the Billing Services Termination Letter, EESI attempted to reserve its rights with respect to "any existing or future accounts receivable balances" allegedly owed by RBC to EESI for "prior utility bill management services provided" by EESI. EESI subsequently informed RBC that EESI would not pay third-party utility bills for Commodities that RBC received from third party utilities on November 27 and November 29, 2002 -- for deliveries made prior to the Billing Services Termination Letter and prior to the Petition Date. After issuing the Billing Services Termination Letter, EESI also issued notices to various third party utility suppliers disavowing any further billing management responsibilities for RBC and directing those suppliers to issue future invoices directly to RBC. The effect of these notices has been to encourage third party suppliers to require RBC to purchase Commodities directly at prices that are not determined according to pricing terms of the agreement. Mr. Hellegers further relates that on or about February 20, 2002, EESI issued a Notice of Rejection of the Agreement. RBC did not object to the Rejection Notice. Pursuant to the rejection procedures previously established by the Bankruptcy Court, the Agreement is deemed rejected on the date of the Rejection Notice. According to the terms of Section 10.2 of the Agreement, EESI's rejection of the Agreement entitles RBC, as the non-defaulting party, to recover from EESI the applicable "RBC Cover Damages." RBC Cover Damages are calculated based on the aggregate amount of RBC's damages as a result of the termination of the Agreement, which are determined by the difference between the projected prices to be paid by RBC under the Agreement and the projected prices RBC would be forced to pay under replacement contract obtained at market terms as of February 20, 2002. Mr. Hellegers reports that RBC filed on March 3, 2002, a proof of claim in an undetermined amount for its damages arising from EESI's rejection of the Agreement. Thereafter on October 15, 2002, RBC filed an amended proof of claim for $23,631,796 for rejection damages. This rejection damage claim is based on the provisions of the Agreement for calculation of RBC Cover Damages upon EESI's breach of the Agreement. On the other hand, EESI issued to RBC invoices asserting that RBC owes EESI approximately $5,650,000 under the rejected Agreement: Invoice Invoice Outstanding Date Number Balance Charges Total ------- ------- ----------- ------- ----- 11/27/01 00018AHQ7 $215,222 $3,248,121 $3,463,343 02/19/02 00018AKKL 3,463,346 330,396 3,793,742 07/29/02 00018AQ38 3,793,742 562,851 4,356,593 07/29/02 00018AQ31 4,356,593 1,290,874 5,647,466 RBC disputes the accuracy of the amounts invoiced by EESI, including the accuracy of the calculations. As a result, RBC asserts a claim for $23,631,796 against EESI under the Agreement, and EESI asserts a claim for $5,647,466 against RBC under the agreement. RBC disputes the amount claimed and invoiced by EESI under the agreement. EESI may dispute the amount claimed by RBC as RBC Cover Damages for EESI's rejection of the Agreement. Mr. Hellegers asserts that RBC's right to recoup should be allowed because: (a) RBC's claim for damages caused by EESI's rejection of the Agreement arise from the same Agreement under which EESI issued the Invoices to RBC; (b) a recoupment, unlike a set-off, does not require mutuality of obligations; and (c) recoupment is an equitable, common-law principle that is not constrained or governed by the set-off provisions of Section 553 of the Bankruptcy Code or the automatic stay requirements of Section 362. Hence, RBC is entitled to assert its recoupment rights as absolute defenses to EESI's requests for payments under the Agreement and the Invoices and allowing RBC's claims against EESI in a reduced amount after deducting the recouped amount. However, Mr. Hellegers contends that in the event that the Bankruptcy Court determines that recoupment is not applicable, RBC is of the opinion that it alternatively is entitled to relief from stay under Section 363(d)(1) of the Bankruptcy Code as appropriate to allow it to exercise its set-off rights under Section 533 of the Bankruptcy Code because the Parties were acting in the same "capacity or right" when the mutual debts occurred, and there are no "compelling circumstances" that would support denying RBC's set-off rights. (Enron Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service, Inc., 609/392-0900) FLEMING: Asks Court to Establish De Minimis Asset Sale Protocol --------------------------------------------------------------- Before the Petition Date, Fleming Companies, Inc., and its debtor-affiliates routinely and in the ordinary course of business sold, or, when necessary, abandoned certain obsolete, excess, burdensome or assets of a de minimis value relative to the estate's assets in order to efficiently manage their operations. These De Minimis Assets include, but are not limited to, tractors, trailers, furniture, fixtures and other excess warehouse and supermarket equipment like coolers, refrigeration compressor systems, shelving, generators and material handling equipment like stock carts, pallet jacks and fork lifts. As the Debtors' Chapter 11 cases progress, J. Richard Hawk, Director of Fleming's Corporate Finance, tells the Court that the Debtors will be evaluating their assets and business locations with the goal of consolidating their operations into profitable activities and locations. The Debtors will cease unprofitable operations to minimize costs and maximize value for their estates. As the Debtors continue to make these operational decisions, the amount of equipment, fixtures and other incidental assets needed to be sold or disposed of will undoubtedly increase. But given the small monetary value of De Minimis Assets in relation to the magnitude of the Debtors' overall operations, and considering the relatively high level of carrying costs associated with many De Minimis Assets, Mr. Hawk asserts that it would not be an efficient use of resources to seek Court approval each and every time they have an opportunity to sell these assets. In this regard, the Debtors sought and obtained the Court's permission to implement procedures: (a) to sell De Minimis Assets with a selling price of no more than $6,500,000 in any individual transaction to a single buyer or group of related buyers; and (b) to abandon De Minimis Assets to the extent, in their judgment, a sale cannot be consummated at a value greater than the liquidation expense. The Debtors will sell De Minimis Assets without further hearing or Court order. Sale of De Minimis Assets The Debtors will sell each De Minimis Asset for the highest and best offer received taking into consideration the exigencies and circumstances. The Debtors will abide by these procedures with respect to the sales: -- The Debtors will notify: (i) any known affected creditor asserting a Lien on any De Minimis Assets subject to a sale; (ii) the United States Trustee; (iii) counsel for the DIP lenders; (iv) counsel for the Unsecured Creditors' Committee; (v) the Bankruptcy Court; and (vi) all parties that have expressed an interest in purchasing the Assets. ExxonMobil's counsel, who filed an objection to the proposed sale, will also receive notice of any assets sold by Debtor Dunigan Fuels, Inc. The notice will contain a general description of the De Minimis Assets to be sold, any commissions to be paid to third parties who would sell or auction the De Minimis Assets and the proposed purchase price. -- If the purchase price of De Minimis Assets is equal to or less than $2,500,000, the Debtors will send a Sale Notice to all known affected creditors asserting a Lien on or interest in the relevant De Minimis Assets as well as those parties that have expressed an interest in purchasing the Assets, the Creditors' Committee and the Court. If none of the affected creditors asserting a Lien in the De Minimis Assets object to the sale within five business days after receiving the Notice, the Debtors will immediately consummate the transaction, without further Court order. If an objection is received within that period that cannot be resolved, the De Minimis Assets will not be sold except upon further Court order after a hearing. -- For all De Minimis Asset sales with a purchase price greater than $2,500,000, but less than $6,500,000, the Sale Notice will be given. If none of the Notice Parties receiving the notice objects to the Sale within five business days after receiving the Notice, the Debtors will immediately consummate the transaction, including making any disclosed payments to third-party brokers or auctioneers, without further Court order. If an objection is received within that period that cannot be resolved, the De Minimis Assets will not be sold except upon further Court order after a hearing. -- The Debtors will file with the Court a monthly sales report for sale transactions between $2,500,000 and $6,500,000. The Debtors believe that the Sale Procedures satisfy the requirements of Section 363(f) of the Bankruptcy Code. If a holder of a lien, as one of the Sale Notice Parties, receives the Notice but does not object to the proposed sale within the five-day period, the Debtors suggest that that holder will be deemed to have consented to the Sale and the property may be sold free and clear of that holders' liens. Abandonment of De Minimis Assets Although the Debtors will take all reasonable steps to sell De Minimis Assets not needed in their ongoing businesses, Mr. Hawk informs the Court that the costs and lien satisfaction obligations associated with the sale of certain De Minimis Assets may exceed the sale proceeds. The inability to consummate a commercially acceptable sale of De Minimis Assets indicates that these Assets have no meaningful monetary value to the estates. In fact, the costs of storing and maintaining such De Minimis Assets will likely unnecessarily burden the Debtors' estates. In those circumstances, the Debtors propose to abandon the De Minimis Assets to save their estates from maintenance and storage costs. The Debtors may abandon certain De Minimis Assets in accordance with these procedures: -- With respect to De Minimis Assets to be abandoned, the Debtors will notify: (i) any known affected creditor asserting a Lien on any De Minimis Assets that will be abandoned; (ii) the United States Trustee; (iii) counsel for the DIP lenders; and (iv) counsel for the Unsecured Creditors' Committee. The notice will contain a general description of the De Minimis Assets to be abandoned. -- If none of the Abandonment Notice Parties objects to the abandonment within five business days of receipt of the Notice, the Debtors will immediately proceed with the abandonment. If an objection is received within the period that cannot be resolved, the De Minimis Asset will not be abandoned except upon further Court order after a hearing. (Fleming Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900) GAN VIE COMPAGNIE: A.M. Best Affirms B Public Data Ratings ---------------------------------------------------------- A.M. Best Co., the global insurer ratings and information provider, has affirmed the public data (pd) ratings for eight Canadian life insurers. A.M. Best provides rating coverage for a majority of Canadian life insurers, allowing the greatest rating penetration of any rating agency in the Canadian market. A.M. Best uses "pd" ratings to describe the long-term financial strength of an insurer or reinsurer. A.M. Best uses the same rating scale and definitions as it does for its long-term financial strength interactive ratings but applies a "pd" rating modifier to ensure the user is aware of the more limited information basis for the rating. An interactive A.M. Best rating is produced at the request of the insurer. The rating process includes detailed interviews of senior management and access to non-public data and other information. Information on issues, which typically would be only limited information in the public domain, play a significant part in the interactive rating analysis. A.M. Best interactively rates the vast majority of life insurers in Canada. For the remaining companies, A.M. Best is restricted to publicly available information as a basis for its rating opinion. The analysis behind "pd" ratings seeks to incorporate all relevant information available in the public domain on the insurer. As with A.M. Best's interactive rating process, "pd" ratings incorporate a review of balance sheet strength, operating performance and business profile. Moreover, A.M. Best's "pd" rating analysis reflects knowledge of the company's peers, the market sector(s) in which the company operates and the strategic and financial outlook for those sectors. Concurrently, the "pd" rating is based on a detailed review by a committee of experienced A.M. Best insurance analysts. They present the most informed view A.M. Best can offer, short of an insurer participating in the full interactive rating process. A.M. Best has affirmed the "pd" ratings of the following eight Canadian life/health companies: -- CIGNA Life Insurance Company of Canada B+pd -- CUMIS Life Insurance Company B++pd -- GAN VIE Compagnie Francaise d'Assurance sur la vie (CAB) Bpd -- Reliable Life Insurance Company B+pd -- Scotia Life Insurance Company B++pd -- Unity Life of Canada B+pd -- Equitable Life Insurance Company of Canada B++pd -- Desjardins Financial Security A-pd A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com GEORGIA-PACIFIC: Inks Pact to Acquire Interstate Packaging Plant ---------------------------------------------------------------- Georgia-Pacific Corp., (NSYE: GP) and National Packaging Solutions Group have signed a definitive agreement for Georgia- Pacific to purchase NPSG's Interstate Packaging sheet plant in Albert Lea, Minn. Financial terms of the agreement were not disclosed. "Georgia-Pacific is always exploring new business opportunities that support our packaging business strategy and create value for our customers and our shareholders," said Steve Klinger, executive vice president - packaging, Georgia-Pacific. "This facility enhances our manufacturing capability to better serve customers in the Midwest." Buck Burwell, chief executive officer - NPSG, said, "Customers will benefit from the greater resources provided through Georgia-Pacific, and NPSG will be able to focus on our core market area. The transition will be seamless with customers receiving the same great products and services delivered by the dedicated employees of the Albert Lea facility." Headquartered at Atlanta, Georgia-Pacific is one of the world's leading manufacturers of tissue, packaging, paper, building products, pulp and related chemicals. With 2002 annual sales of more than $23 billion, the company employs approximately 61,000 people at 400 locations in North America and Europe. Georgia-Pacific Packaging is a recognized leader in corrugated packaging solutions. With more than 50 packaging locations across the country, the company designs, tests and manufactures all types of corrugated packaging, including micro-flute, single-face and single-, double- and triple-wall products. As reported in the Troubled Company Reporter's January 31, 2003 edition, Fitch Ratings lowered the senior unsecured long- term debt ratings of Georgia-Pacific to 'BB' from 'BB+' and withdrawn the company's commercial paper rating. The Rating Outlook remains Negative. The 'BB' rating applies to the company's issues of 8-7/8% due 2010 and 9-3/8% due 2013. This rating action was based on the continuing poor market conditions prevailing in the company's Building Products segment, an uncertain outlook for containerboard and packaging and the competitive environment in retail tissue. In combination with ongoing asbestos exposure and a low probability of immediate asset sales, Fitch believed the company's de-leveraging efforts have been pushed back. HAYES LEMMERZ: Filing New Sr. Unsec. Note Indenture Under Seal -------------------------------------------------------------- Anthony W. Clark, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Wilmington, Delaware, reminds the Court that pursuant to Section 6.13 of the Reorganization Plan, Hayes Lemmerz International, Inc., and its debtor-affiliates committed to file documents evidencing the new credit facility or commitment letters with respect thereto, no later than the conclusion of the confirmation hearing. The Debtors have contemporaneously filed commitment letters and a draft of the credit agreement with respect to the senior secured financing. As part of the exit financing, the Debtors intend to sell $225,000,000 of senior unsecured notes to Qualified Institutional Buyers under Section 144A and Regulation S of the Securities Act of 1933. The Debtors desire to provide more information regarding the Notes but have concerns about various securities laws. By this motion, the Debtors seek the Court's permission to file under seal a description of the terms of the Notes so that the submission of the Description of Notes to the Court does not affect their ability to issue the Notes in a private placement under Section 144A and Regulation S of the Securities Exchange Act. The Description of Notes may be disclosed to parties-in- interest, who agree to keep the terms confidential. The Debtors also ask the Court to implement any other requirements as it deems necessary to keep the Description confidential. Rule 135c under the Securities Exchange Act prohibits a public reporting company from issuing a notice detailing the terms of a proposed private placement of securities. If the Debtors were unable to sell the Notes in a private placement, Mr. Clark believes that the Debtors could not sell the Notes in the time frame required for the Company's emergence. Without the proceeds of the Notes, the Debtors could not complete the financial transactions required under the Plan, thereby jeopardizing the implementation of the Plan. * * * As previously reported, Hayes Lemmerz entered into an agreement for the sale of $250 million of senior unsecured notes. The notes have a maturity of 7 years and a 10-1/2% coupon. The Company expects to complete the sale of the notes and emerge from Chapter 11 in early June. (Hayes Lemmerz Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., 609/392-0900) JAZZ PHOTO CORP: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Jazz Photo Corp. 1035 Centennial Avenue Piscataway, New Jersey 08854 Bankruptcy Case No.: 03-26565 Type of Business: Jazz Photo Corp. is engaged in the design, development, importation and wholesale distribution of cameras and other photographic products in North America, Europe and Asia. Chapter 11 Petition Date: May 20, 2003 Court: District of New Jersey (Newark) Judge: Morris Stern Debtor's Counsel: Michael D. Sirota, Esq. Warren A. Usatine, Esq. Cole, Schotz, Meisel, Forman & Leonard, P.A. 25 Main St. Hackensack, NJ 07601 Tel: (201) 489-3000 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Fuji Photo Film Co., Ltd. Judgment $29,765,280 c/o Lawrence Rosenthal, Esq. Stroock & Stroock & Lavan 180 Maiden Lane New York, NY 10038 Polytech Enterprise Limited $1,494,363 Unit D 5/F Young Ya Ind. Bldg. 381-389 Sha Tsui Road Tsuen Wan, Hong Kong Dreier & Baritz, LLP $495,412 499 Park Avenue New York, NY 10022 Skadden Arps Slate $392,427 Meagher & Flom LLP Four Times Square New York, NY 10036-6522 Bell & Howell Company $301,164 Attn: Rosa Cobal 3400 W. Pratt Lincolnwood, IL 60712 Budd Larner Gross Rosenbaum & Sade $269,039 150 John F. Kennedy Parkway Short Hills, NJ 07078-0999 The Express Group $64,984 NERA -- National Economic Research Assn. $56,318 Gurvitz & Kassler $53,431 Yellow Freight System, Inc. $43,646 Roadway Express $41,211 Eastman Kodak Company $41,004 Jevic $39,433 United Parcel Service $31,995 Discovery Copy Service NY, Inc. $29,342 Trial Graphix $28,791 UTi United States, Inc. $28,736 KAISER ALUMINUM: Futures Rep. Hires Covington as Special Counsel ---------------------------------------------------------------- Martin J. Murphy, the legal representative for future asbestos claimants, anticipates that Kaiser Aluminum Corporation and its debtor-affiliates' insurance proceeds will be among the most substantial assets used to compensate Future Claimants. For this reason, the Futures Representative seeks the Court's authority to retain Covington & Burling as its special counsel with respect to insurance-related issues. The Futures Representative anticipates that Covington will advise him on issues that draw on the firm's extensive experience with insurance disputes and mass tort cases, particularly asbestos cases. In particular, Covington will: (a) assist, advise and represent the Futures Representative in connection with insurance coverage matters, including but not limited to negotiations, mediations, arbitrations, lawsuits and other proceedings in which one or more Debtors are seeking or in the future may seek to secure insurance coverage for claims, losses, liabilities or expenses and provide strategic advice and assistance to the Futures Representative with respect to the pursuit of insurance-related assets; (b) assist and advise the Futures Representative in connection with the negotiation and formulation of a reorganization plan and the plan confirmation and implementation process with respect to insurance-related matters; (c) represent the Futures Representative at hearings to be held before this Court and communicate with the Futures Representative regarding the insurance-related and asbestos liability-related issues raised and heard before the Court, as well as the insurance-related and asbestos liability-related decisions and considerations of the Court; (d) assist the Futures Representative in preparing appropriate insurance-related and asbestos liability-related legal pleadings and proposed orders as may be required in support of positions taken by the Futures Representative, as well as preparing witnesses and reviewing relevant documents; and (e) rendering other services as may be in the Futures Representative's best interest. The Futures Representative has selected Covington because of its experience at a national level in similar matters as well as its exemplary qualifications to perform the services required in these cases. Covington has significant experience in insurance- related matters. The firm has been retained with respect to insurance coverage for asbestos liabilities in numerous nationally prominent proceedings including Frontier Insulation Contractors, Inc. v. Merchants Mut. Ins. Co.; Armstrong World Industries, Inc. v. Aetna Casualty & Surety Co.; Owens-Corning Fiberglas Corp. v. American Centennial Ins. Co.; Affiliated FM Ins. Co. v. Owens-Corning Fiberglas Corp.; Lac d'Amiante du Quebec, Ltee. v. American Home Assurance Co.; and Keene Corp. v. Insurance Company of North America. Donald W. Brown, a partner at Covington, assures the Court that the firm is not related to or connected with and neither holds nor represents any interest adverse to the Debtors, their estates, their creditors or any other parties-in-interest in these cases. Covington is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code and as required by Section 1103(b). Covington will be compensated for its services in accordance with the firm's standard hourly rates. The principal attorneys and paralegals designated to represent the Futures Representative and their current standard hourly rates are: Donald W. Brown (Partner) $590 Wendy L. Feng (Special Counsel) 360 Other Attorneys 170 - 690 Paraprofessionals 140 - 220 Covington will also be entitled to reimbursements of actual, necessary expenses. (Kaiser Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., 609/392-0900) Kaiser Aluminum's 12.750% bonds due 2003 (KLU03USR1) are trading at about 5 cents-on-the-dollar, DebtTraders reports. See http://www.debttraders.com/price.cfm?dt_sec_ticker=KLU03USR1for real-time bond pricing. KLEINERT'S: Wants to Obtain Up to $5.2 Million of DIP Financing --------------------------------------------------------------- Kleinert's, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for authority to obtain Debtor-in-Possession Financing from their prepetition lenders. The Debtors tell the Court that they need the new DIP Financing to finance their ongoing operation and maintain the going concern value of their estates. In their motion, the Debtors tell the Court that they need postpetition financing of up to $5,200,000. By providing the Debtors with the necessary financing, the Debtors ask the Court to grant the prepetition lenders adequate protection. Prior to the Petition Date, the Debtors owed to Wachovia Bank, National Association, as agent for the Prepetition Secured Lenders, approximately $52.2 million pursuant to the Prepetition Credit Agreement. In addition, certain shareholders extended loans to the Debtors in the aggregate sum of $4.6 million pursuant to unsecured promissory notes, each dated June 1, 2002. The Debtors disclose that they are unable to obtain unsecured credit allowable solely as an administrative expense under Section 364(b) of the Bankruptcy Code or solely on the basis of a super-priority or a junior lien under Section 364(c)(1) or (3), even in the reduced amount necessary to continue their operations at sufficient levels. Additionally, none of the Lenders contacted were willing to provide financing to the Debtors on better terms than the DIP Facility. In evaluating various financing scenarios and proposals, the Debtors have taken into account the working relationship they have with the DIP Lenders as Prepetition Secured Lenders. The willingness of the DIP Lenders to permit the Debtors to maintain their existing bank accounts and cash management system and to continue uninterrupted payments to certain critical vendors; and the likelihood that any proposed arrangement with lenders other than the DIP Lenders would involve great uncertainty, potentially significant disruption to the business, and possible disputes and substantial litigation over collateral values and priming of liens, among other things. The Debtors have concluded that the best terms available under the circumstances (including the financial terms and other important intangibles) were those available from the DIP Lenders. Under the DIP Loan Agreement, the Debtors agree to pay the Prepetition Lenders: a) 0.125% per year of the outstanding face amount of each Letter of Credit; b) an issuance or renewal fee of 0.50% per year of the outstanding face amount of each Merchandise Letter of Credit; and c) an issuance or renewal fee of 1.75% per year of the outstanding face amount of each Standby Letter of Credit. The DIP Loans will be due and payable in full on the earliest to occur of: 1) November 30, 2003, 2) 25 days after the entry of the Interim Order if the Final Order has not been entered prior to this date, 3) the date upon which a reorganization plan is confirmed, and 4) the date upon which the Agent shall have provided notice to the Borrowers of the occurrence of an Event of Default. Kleinert's Inc., filed for chapter 11 protection on May 7, 2003 (Bank. S.D. N.Y. Case No. 03-41140). Wendy S. Walker, Esq., at Morgan, Lewis & Bockius, LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed its estimated debts and assets of over $50 million each. LEAP WIRELESS: Court Okays Proposed Key Employee Retention Plan --------------------------------------------------------------- Leap Wireless International Inc., and its debtor-affiliates obtained the Court's authority to implement their key employee retention plan. Backgrounder Leap Wireless International Inc., and its debtor-affiliates developed a key employee retention plan to induce certain of their key employees to continue their employment with Cricket pending confirmation and completion of Cricket's plan of reorganization. The Retention Plan does not provide retention bonuses to Cricket's Senior Vice Presidents, Chief Operating Officer or Chief Executive Officer. The Retention Plan provides that Covered Employees will be paid a bonus installment on the earlier of May 1, 2003 or the date two weeks after the announcement of an agreement with its creditors for restructuring. Another bonus installment will be paid to Covered Employees 60 days following the Effective Date of the Plan. If a Covered Employee voluntary terminates his or her employment at any time within 90 days of the date he or she received a payment under the Retention Plan, the Covered Employee will be required to repay that payment. The Debtors estimate that the total amount payable in the future under the Retention Plan is $1,836,000. The Covered Employees are a significant asset of this estate and their continued employment is essential in order to affect a reorganization on the best terms possible. The Covered Employees are highly talented individuals who contribute specialized knowledge and skill in their areas of responsibility. In many instances, the Covered Employees are among the best in their industry. More importantly, these individuals are intimately familiar with the Debtors' cost-efficient, differentiated business model and have the experience and knowledge necessary to maintain operations and thus preserve the value of the Debtors' assets. As a result of their experience and familiarity with the Debtors' business, these employees cannot be replaced easily by other employees with general telecommunications experience. Consequently, retaining the Covered Employees is critical in ensuring a successful reorganization and maximizing the recovery to creditors and other interested parties. During this Chapter 11 case, the Debtors will continue to pay the Covered Employees the same salaries that these employees earned prepetition. Under the Retention Plan, each Covered Employee who continues his or her employment during and after the Debtors' Chapter 11 case will be paid a retention bonus equal to a percentage of the employee's current base salary. For example: -- Each Covered Employee with title of Directors and below will receive a Retention Bonus equal to 15% of his or her current base salary. The Retention Bonus is payable in two postpetition installments. The first installment, equal to 33% of the Retention Bonus, will be paid 90 days following the Petition Date. The second installment, equal to the remaining 67% of the Retention Bonus, will be paid 60 days following the Effective Date of the Debtor's plan of reorganization. -- Each Covered Employee with the title of Vice President will receive a Retention Bonus equal to 18.75% of the Salary. The Retention Bonus is payable in two postpetition installments. The first installment, equal to 33% of the Retention Bonus, will be paid 90 days following the Petition Date. The second installment, equal to the remaining 67% of the Retention Bonus, will be paid 60 days following the Effective Date of the Debtor's plan of reorganization. A Covered Employee must be an active employee of the Debtors, in good standing and not on a leave of absence at the time of payment to receive any payment. If a Covered Employee is placed on a performance improvement plan at any time before the date of a payment, the Covered Employee will cease to be a Covered Employee and will not be entitled to obtain any additional payments thereafter. In addition, if a Covered Employee voluntary leaves the employment of the Debtors at any time within 90 days of the date the Covered Employee received a payment, the Covered Employee will be required to repay that payment. In light of the critical role that the Covered Employees will need to play in this Chapter 11 case and the substantial value that the continued loyalty and efforts of the Covered Employees will provide, Cricket believes that the implementation of the Retention Plan will be beneficial to its estate and essential to maximizing creditors' recoveries. Management Severance Program The Debtors also developed a senior management severance agreement to encourage the Senior Vice Presidents, the Chief Operating Officer and the Chief Executive Officer to focus all of their collective efforts on the proposed reorganization. The Severance Agreements provide each member of the Senior Management with these severance benefits: (a) at least 6 months of the employee's current base salary; (b) one half of the employee's current annual target bonus; and (c) COBRA benefits paid by the Debtors for six months if, within one year after the Petition Date or one year after the Effective Date of a Plan, he or she loses his or her employment without cause, or his or her employment duties with the company are substantially changed, in each case as provided in greater detail in the Severance Agreements. (Leap Wireless Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900) MAGELLAN HEALTH: Judge Beatty Fixes Bar Dates for Filing Claims --------------------------------------------------------------- Pursuant to Rule 3003(c)(3) of the Federal Rules of Bankruptcy Procedures, Magellan Health Services, Inc., and its debtor- affiliates ask that the Court to: 1. establish June 20, 2003 at 5:00 p.m. as the last date and time for each person or entity, including individuals, partnerships, corporations, joint ventures and trusts, to file proofs of claim based on prepetition debts or liabilities against any of the Debtors; 2. establish September 8, 2003 at 5:00 p.m. as the last date and time for each governmental unit to file proofs of claim based on prepetition debts or liabilities against any of the Debtors; 3. approve the proposed proof of claim form; 4. approve the proposed Bar Date and Government Bar Date notice; and 5. approve proposed notice and publication procedures. Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that Bankruptcy Rule 3003(c)(3) provides that the Court will fix the time within which proofs of claim must be filed in a Chapter 11 case pursuant to Section 501 of the Bankruptcy Code. Moreover, Bankruptcy Rule 3003(c)(2) provides that any creditor who asserts a claim against any of the Debtors that arose prior to the Petition Date, and whose claim is not scheduled in the Debtors' schedules of assets and liabilities, schedules of current income and expenditures and schedules of executory contracts and unexpired leases or whose claim is scheduled as disputed, contingent or unliquidated, must file a proof of claim. Pursuant to the proposed bar date order, each person or entity that asserts a claim against the Debtors that arose prior to the Petition Date must file an original, written proof of the claim, which substantially conforms to the Proof of Claim or Official Form No. 10 so as to be received on or before the Bar Date by Bankruptcy Services LLC either by mailing the original proof of claim to the United States Bankruptcy Court, Southern District of New York, Magellan Claims Docketing Center, Bowling Green Station, P.O. Box 5190, New York, New York 10274-5100, or by delivering it by messenger or overnight courier to the United States Bankruptcy Court, Southern District of New York, Magellan Claims Docketing Center, One Bowling Green, Room 534, New York, New York 10004-1408. The Debtors ask that the Bar Date Order provide that: 1. the Magellan Claims Docketing Center will not accept proofs of claim sent by facsimile, telecopy or electronic mail transmission; and 2. proofs of claim are deemed timely filed only if the claims are actually received by the Magellan Claims Docketing Center on or before the Bar Date or the Government Bar Date, as applicable. Pursuant to the proposed Bar Date Order, these persons or entities are not required to file a proof of claim on or before the Bar Date: 1. any person or entity that has already filed a proof of claim against the Debtors with the Clerk of the Court of the United States Bankruptcy Court for the Southern District of New York in a form substantially similar to the proposed Proof of Claim or Official Form No. 10; 2. any person or entity whose claim is listed on the Schedules filed by the Debtors, provided that: a. the claim is not scheduled as "disputed," "contingent" or "unliquidated;" and b. the claimant does not disagree with the amount, nature and priority of the claim in the Schedules; and c. the claimant does not dispute that the claim is an obligation of the specific Debtor against which the claim is listed in the Schedules; 3. any holder of a claim that has been allowed by order of this Court; 4. any person or entity whose claim has been paid in full by any of the Debtors; 5. any holder of a claim for which specific deadlines have previously been fixed by this Court; 6. any Debtor having a claim against another Debtor or any of the non-debtor subsidiaries of Magellan having a claim against any of the Debtors; 7. any holder of a claim allowable under Section 503(b) and 507(a) of the Bankruptcy Code as an expense of administration; 8. any current director or officer or current employee of any of the Debtors whose claim solely is with respect to a claim against any of the Debtors for indemnification, contribution, subrogation or reimbursement; 9. any person or entity whose claim is limited exclusively to the repayment of principal, interest, and other applicable fees and charges on or under any bond or note issued by the Debtors under any of these indentures: a. the 9-3/8% Senior Notes due 2007; and b. the 9% Senior Subordinated Notes due 2008; provided, however, that: a. the exclusion will not apply to HSBC Bank, Inc., the indenture trustee of the Senior Notes and Bank One Trust Company, N.A., the indenture trustee of the Senior Subordinated Notes; b. each of HSBC and Bank One will be required to file one proof of claim, on or before the Bar Date, on account of all of the Note Claims on or under the applicable Indentures; and c. any holder of a Note Claim wishing to assert a claim other than a Note Claim arising out of or relating to the Indentures will be required to file a proof of claim with respect to the claim on or before the Bar Date, unless another exception applies; 10. any person or entity who is one of the Debtors' customers whose claim is solely for amounts due pursuant to existing service contracts between the Debtors and the Customer, which claims include, among other charges, profit sharing, reimbursement, performance penalties, retroactive membership adjustments and other payments that would be required to be made if the contracts were assumed under Section 365 of the Bankruptcy Code; provided, however, Customers holding claims related to service contracts with the Debtors for which a notice of termination has been received by Magellan or any of its subsidiaries are required to file a proof of claim; and 11. any person or entity who is one of the Debtors' providers who: a. provide behavioral health services to individuals whose behavioral healthcare is covered by the Debtors; and b. are, or have been, part of the Debtors' provider network or are otherwise entitled to reimbursement from the Debtors whose claim is solely for amounts due pursuant to behavioral health services rendered by the Providers that are required to be paid by the Debtors; and 12. any person or entity whose claim is solely against any of the Debtors' non-debtor affiliates. The proposed Bar Date Order further provides that any person or entity that holds a claim that arises from the rejection of an executory contract or unexpired lease, as to which the order authorizing the rejection is dated on or before the Bar Date Order, must file a proof of claim based on the rejection on or before the Bar Date. Any person or entity that holds a claim that arises from the rejection of an executory contract or unexpired lease, as to which the order authorizing the rejection is dated after the date of entry of the Bar Date Order, must file a proof of claim on or before the date as the Court may fix in the applicable order authorizing the rejection. The proposed Bar Date Order further provides that holders of equity security interests in the Debtors need not file proofs of interest with respect to the ownership of the equity interests; provided, however, that if any the holders asserts a claim against the Debtors, a proof of claim must be filed prior to the Bar Date or the Government Bar Date, as applicable, pursuant to the procedures set forth in the Bar Date Order. The proposed Proof of Claim form substantially conforms to Official Form No. 10, but has been tailored for the specific circumstances of the Debtors' cases. The substantive modifications to Official Form 10 proposed by the Debtors include: 1. allowing the creditor to correct any incorrect information contained in the name and address portion; 2. including certain additional instructions; 3. providing a list of the Debtors; and 4. the amount of the creditor's claim as listed on the Schedules. In accordance with the proposed Bar Date Order, each Proof of Claim filed must: 1. be written in the English language; 2. be denominated in lawful currency of the United States as of the Petition Date; 3. conform substantially with the Proof of Claim provided or Official Form No. 10; and 4. indicate the particular Debtor against whom the claim is being filed. Pursuant to Bankruptcy Rule 3003(c)(2), the Debtors propose that any holder of a claim against one or more of the Debtors who is required, but fails, to file a proof of the claim in accordance with the Bar Date Order on or before the Bar Date, will be forever barred, estopped and enjoined from asserting the claim against the Debtors, and each Debtor and its property will be forever discharged from any and all indebtedness or liability with respect to the claim, and the holder will not be permitted to vote to accept or reject any plan of reorganization filed in these Chapter 11 cases or participate in any distribution in the Debtors' chapter 11 cases on account of the claim or to receive further notices regarding the claim. Notice of the Bar Date Order and the Bar Dates The proposed Bar Date Notice will inform recipients of the Bar Dates and contains these information: 1. notification of the Bar Dates; 2. instructions regarding who must file a proof of claim; 3. the procedure for filing a proof of claim; and 4. the consequences of failure to timely file a proof of claim. Pursuant to Bankruptcy Rule 2002(a)(7), the Debtors propose to mail a notice advising the recipients of the Bar Dates, together with a Proof of Claim form. The form of notice conforms substantially to the form of the Guidelines for Filing Requests for Bar Orders, which were ordered by the Board of Judges for the Southern District of New York on January 15, 2003. The Bar Date Notice will be sent to: 1. the United States Trustee; 2. counsel to the statutory committee of unsecured creditors established in these Chapter 11 cases; 3. the attorneys for the agent of the Debtors' prepetition lenders; 4. all persons or entities that have requested notice of the proceedings in these Chapter 11 cases; 5. all persons or entities that have filed claims; 6. all creditors and other known holders of claims as of the date of the Bar Date Order, including all persons or entities listed in the Schedules as holding claims; 7. all parties to executory contracts and unexpired leases of the Debtors; 8. all parties to litigation with the Debtors; 9. the Internal Revenue Service for the Southern District of New York; 10. the Securities and Exchange Commission; and 11. the additional persons and entities as deemed appropriate by the Debtors. Publication Notice Given the nationwide scope of their business, the Debtors have determined that it would be in the best interest of their estates to give notice by publication to certain potential creditors including: 1. those creditors to whom no other notice was sent and who are unknown to, or not reasonably ascertainable by the Debtors; and 2. known creditors with current addresses unknown to the Debtors. Pursuant to Bankruptcy Rule 2002(l), the Debtors seek authority to publish the Bar Date Notice, in The New York Times and The Wall Street Journal, on one business day at least 25 days prior to the Bar Date, thus satisfying the requirements of Bankruptcy Rule 2002(a)(7). The form of notice conforms substantially to the Bar Date Guidelines. The Publication Notice includes a telephone number that creditors may call to obtain copies of the Proof of Claim form and information concerning the procedures for filing proofs of claim. The Debtors further request the Court find that the Debtors' proposed procedures regarding the Publication Notice will be deemed good, adequate, and sufficient publication notice. Claims Agent Pursuant to the BSI Order and Section 156(c) of the Judiciary Procedures Code, BSI is the authorized claims agent for the Court with respect to the Debtors' Chapter 11 cases. In that regard, BSI is responsible for, among other things, maintaining the database containing the Schedules and maintaining an official claims register for each of the Debtors. To facilitate and coordinate the claims reconciliation and Bar Date Notice functions, BSI will mail the Proof of Claim forms together with the Bar Date Notice in order to: 1. ensure that each creditor whose claim is listed on the Schedules will receive a "personalized" Proof of Claim form printed with the appropriate creditor's name; and 2. facilitate the matching of scheduled and filed claims, and the claims reconciliation process. Mr. Karotkin recounts that each of the Debtors filed their statements of financial affairs, schedules of assets and liabilities, and schedules of executory contracts on April 23, 2003. The Debtors have been advised by BSI that based on the number of entities to whom the Debtors propose to provide notice, including all holders of claims who are entitled to receive notice, BSI will be able to complete the mailing of the Proof of Claim forms and Bar Date Notices within five business days following the date that the Court approves the Bar Date Order. By establishing the Bar Date in accordance with the provisions, all potential claimants will have 35 days after the mailing of the Bar Date Notice within which to file their proofs of claim. The period conforms with the Bar Date Guidelines. In addition, in the event the Debtors subsequently amend or supplement the Schedules in a manner as to require that an additional opportunity to file a Proof of Claim be provided to the claimant affected by the amendment or supplement, the Debtors will give notice of any amendment or supplement to the holders of claims affected and the holders will be afforded 30 days from the date on which the notice is given to file Proofs of Claim in respect of their claim or be forever barred from doing so. * * * Judge Beatty orders that all persons and entities that assert a claim, as defined in Section 101(5) of the Bankruptcy Code, against the Debtors which arose on or prior to the Petition Date should file a proof of claim in writing so that it is received on or before June 27, 2003, at 5:00 p.m. Proofs of claim filed by governmental units must be filed on or before September 8, 2003, at 5:00 p.m. (Magellan Bankruptcy News, Issue No. 8: Bankruptcy Creditors' Service, Inc., 609/392-0900) MILACRON: Shareholders Restore 'One Share, One Vote' Principle -------------------------------------------------------------- Shareholders of Milacron Inc. (NYSE: MZ), a leading global supplier of plastics-processing technologies and industrial fluids, adopted an amendment to the company's certificate of incorporation to eliminate time-phased "supervoting" rights and restore the principle of "one share, one vote." "This action ensures that all holders of Milacron common stock have a voice in the governance of our company that is proportionate to their economic stake," Ronald D. Brown, Milacron's chairman and chief executive officer, told attendees of the company's annual shareholder meeting. "At the same time, it conforms our voting structure to current best practices in corporate governance." In other business conducted at the meeting, shareholders re-elected three directors -- Darryl F. Allen, James E. Perrella and Brown -- to three-year terms and ratified the appointment of Ernst & Young LLP as independent auditors for 2003. A shareholder proposal that the board of directors consider reducing executive officers' salaries and eliminate all bonuses was defeated. During the meeting Brown reaffirmed the company's most recent guidance, which projects returning to profitability in the second half of 2003. He said sales may come in at the high end of the range due to currency translation effects, while earnings were likely to be at the low end of the range. "Over the past year, Milacron has taken extraordinary measures to position the company to respond to the eventual economic recovery and to create long-term value for all our shareholders," Brown said. "Milacron remains firmly committed to building on the progress we made in 2002 to strengthen our competitive position as a premier supplier in plastics technologies while growing our successful industrial fluids business. We are confident that, through the continued dedication of our highly skilled employees, our cost-cutting and process improvement programs will be significant factors in improving operating results as we move forward." First incorporated in 1884, Milacron is a leading global supplier of plastics-processing technologies and industrial fluids, with 4,000 employees and major manufacturing facilities in North America, Europe and Asia. For further information, visit the company's Web site at http://www.milacron.com As reported in Troubled Company Reporter's November 22, 2002 edition, Standard & Poor's lowered its corporate credit rating on Milacron Inc., to 'B+' from 'BB-'. The outlook is negative. At the same time, the rating on the company's $110 million senior secured bank facility was lowered to 'B+' from 'BB'. The plastic machinery manufacturer's senior unsecured debt was affirmed at 'B'. The downgrades reflect the impact of weak end markets on the company's financial profile, despite significant asset sales to reduce debt. The affirmation of the senior unsecured rating reflects the substantial reduction in secured debt. Total debt was about $296 million at Sept. 30, 2002, for Cincinnati, Ohio-based Milacron. "The downgrade on Milacron was based upon the deterioration in the company's credit measures and the uncertain timing for a recovery," said Standard & Poor's credit analyst Robert Schulz. MOUNT SINAI MED.: Fitch Affirms BB Rating on Outstanding 4 Bonds ---------------------------------------------------------------- Fitch Ratings affirms the 'BB' rating on the Mount Sinai Medical Center, FL bonds (as listed below). In addition, Fitch has revised the Rating Outlook to Stable from Negative. The affirmation and stable outlook reflects MSMC's success in significantly reducing losses from 2001, ongoing financial improvements through the first quarter of fiscal 2003, and good disclosure practices. MSMC posted an audited bottom line of negative $8.5 million or negative 1.9% in fiscal year-end 2002, which included a planned transfer of $30 million from the Mount Sinai Medical Center Foundation. Excluding the transfer from the Foundation, MSMC posted a net loss of $38.5 million as compared to a budget of negative $32.5 million and prior year results of negative $64.9 million. Through the first three months of fiscal 2003, Mount Sinai reported net income of $1,048,000 as compared to a budgeted net income of $557,000. MSMC is budgeting a bottom line loss for the entire year of $9.9 million with no expected transfers from the Foundation. MSMC's budget includes the annualized impact of $39.8 million of initiatives implemented in 2002 and between $10.6 million and $16.1 million of initiatives planned for 2003. These initiatives are expected to be derived from staffing and productivity ($18 - $20 million), supply chain ($12 - $13 million), case management ($4.2 million), physician practices ($2.4 - $2.9 million), and managed care contracting and price increases ($13.8 - $15.8 million). Not included in these initiatives are MSMC's plans to consolidate services between the MSMC campus and the Miami Heart campus which management indicates will result in additional costs savings. Lastly, Fitch's impression of MSMC leadership has improved since 2001, and largely reflects current disclosure practices which include above average quarterly and annual financial reporting to both Fitch and bondholders and quarterly conference calls. Ongoing concerns include MSMC's weak liquidity, high debt burden, future capital needs, and declining utilization. MSMC had 74 days cash on hand at fiscal 2002 including unrestricted cash and investments of the Foundation. Despite an improvement over fiscal 2001, deterioration at the Foundation primarily due to the transfer of funds in 2002 is concerning. MSMC's weak liquidity coupled with limited capital spending of $8.4 million in 2002 and a sizeable debt burden demonstrated by 30% cash to debt presents concern about Mount Sinai's ability to fund future capital needs, which could threaten Mount Sinai's market position. MSMC experienced declines in inpatient admissions, surgery cases, and emergency department visits of 8.3%, 6.4%, and 9.3% respectively in 2002. Management attributes much of these decreases to population trends on Miami Beach, and better case utilization MSMC, and a net loss of 26 physicians in 2002. Management indicated that despite the drop in utilization market share remained stable as all providers exhibited similar trends in utilization. MSMC has exceeded Fitch's expectations for achieving its initiatives in 2002 and Fitch believes that management's goals for 2003 are reasonable at the lower levels. MSMC is not immune to other pressures in the industry. Nonetheless, Fitch's rating and outlook assumes MSMC will continue to improve its operating and bottom line margins and build liquidity. Further erosion of its liquidity, a reversal of operating trends, or an increase in debt burden could threaten the current rating over the short term. Mount Sinai intends to refinance a portion of its outstanding debt towards the end of the calendar year. Fitch expects to review the potential impact of this transaction, if any, at the time of issuance. MSMC is a two campus health care provider offering a wide range of tertiary services with 979 licensed beds (780 staffed) located in Miami Beach, FL. MSMC has total operating revenue of $436 million in 2001. Outstanding debt: -- $92,125,000 City of Miami Beach Health Facilities Authority, hospital revenue bonds, series 2001A (Mount Sinai Medical Center of Florida Project); -- $30,430,000 City of Miami Beach Health Facilities Authority, hospital revenue bonds, series 2001B (Mount Sinai Medical Center of Florida Project); -- $70,640,000 City of Miami Beach Health Facilities Authority, hospital revenue bonds, series 2001C (Mount Sinai Medical Center of Florida Project); -- $98,000,000 City of Miami Beach Health Facilities Authority, hospital revenue bonds, series 1998 (Mount Sinai Medical Center of Florida Project). NANTICOKE HOMES: Committee Taps Parente for Financial Advice ------------------------------------------------------------ The Official Committee of Unsecured Creditors of NHI, Inc., asks the U.S. Bankruptcy Court for the District of Delaware for permission to hire Parente Randolph, LLC as its Accountants and Financial Advisor. The Debtors is selling its assets in anticipation of filing a plan of liquidation. The Committee tells the Court that it has determined its best move is to retain accountants and financial advisors in this case to assist it in the investigation of the Debtor's financial affairs and provide other accounting, financial advisory and valuation services. The Committee wants Parente to: a) investigate and analyze on behalf of the Committee, the Debtor's financial operations, related party transactions and accounts, inter-company transfers and asset recovery potential; b) attend and advise as requested at meetings with the Committee and its counsel and representatives of the Debtor; c) render expert testimony on behalf of the Committee, if required; and d) provide such other services, as requested by the Committee or its counsel from time to time and agreed to by Parente. Edward A. Phillips, CPA, CIRA, CFE, a principal in Parente relates that Parente's customary hourly billing rates are: Principals $250 to $370 per hour Managers/Senior Associates $150 to $240 per hour Staff $100 to $175 per hour Paraprofessional $ 70 to $100 per hour Nanticoke Homes, Inc., filed for chapter 11 protection on March 1, 2002 (Bankr. Del. Case No. 02-10651). Stephen W. Spence, Esq., at Philippe, Goldman & Spence, P.A., represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of more than $10 million each. NATIONAL CENTURY: Asks Court to Clear SCCI Settlement Agreement --------------------------------------------------------------- Prior to the Petition Date, National Century Financial Enterprises, Inc., and its debtor-affiliates provided to SCCI Hospital Ventures, Inc. and SCCI Hospitals of America, Inc. financing pursuant to certain sales and subservicing agreements under the NPF XII accounts receivable financing program. The Debtors purchased certain eligible accounts receivable from SCCI. Joseph M. Witalec, Esq., at Jones, Day, Reavis & Pogue, in Columbus, Ohio, informs the Court that SCCI approached the Debtors about "buying out" its obligations under the Sale Agreements. The "buy-out" will facilitate SCCI's entry into a replacement accounts receivable funding arrangement and continue its normal business operations. After arm's-length negotiations, the Debtors and SCCI have entered into a settlement agreement, which contains these principal terms: A. Settlement Amount SCCI must pay to the Debtors an aggregate $4,919,386, consisting of a $4,604,363 cash payment and $171,022 that was in the Lockbox Accounts as of April 10, 2003, as well as amounts previously swept from the Lockbox Accounts, $144,000. B. Termination of Security Interests Immediately upon payment of the Settlement Amount, SCCI will be authorized to terminate the Debtors' ownership and security interests in SCCI's assets, including but not limited to SCCI's accounts receivable. C. Mail Forwarding Instructions SCCI will inform the Debtors where to send any payments or correspondence that the Debtors receive in the Lockbox Accounts related to SCCI's accounts receivable. In addition, SCCI will be responsible for informing all third party payors as to where incoming payments should be redirected. Any payments received by the Debtors after Consummation of the Settlement Agreement will not be property of the Debtors' estates and will be turned over to SCCI or its assignee. D. Transfer of Liens to Proceeds The conclusion of the relationship between the Debtors and SCCI, and the termination of the Debtors' ownership and security interests in SCCI's assets, will bind any and all parties that may assert a lien, claim or interest in or to the Sale Agreements or any prior agreements, with any liens transferring to the proceeds. E. Mutual Releases The Settlement Agreement also provides for an exchange of mutual releases by the Debtors and SCCI, on the terms and subject to the conditions set forth in the Settlement Agreement. F. Termination of Bank Agreements The Debtors and SCCI must direct The Huntington National Bank to: (1) terminate the lockbox agreements relating to the Sale Agreements; (2) remit all funds that were in the Lockbox Accounts on or before April 10, 2003; (3) remit all post-April 10, 2003 received funds subject to the lockbox agreements to the credit and direction of SCCI; (4) terminate the zero balance agreement relating to the Sale Agreements; and (5) use reasonable efforts to provide SCCI with documents relating to account activity in the Lockbox Accounts. SCCI will be responsible for all bank fees and charges related to the Lockbox Accounts after April 10, 2003. G. Dismissal of Actions Immediately upon payment of the Settlement Amount, the Debtors will file stipulations of dismissal, with prejudice, dismissing any and all claims brought against SCCI in the adversary proceeding pending against, among other parties, SCCI in this Court and the Ohio state court action, NPF XII, Inc. et al. v. PhyAmerica Physicians Group, Inc., et al., Court of Common Pleas, Franklin County, Ohio, Case Nos. 02CVH11-12222 and 02CVH11-12259. Pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure, the Debtors ask the Court to approve the Settlement Agreement with SCCI. Mr. Witalec asserts that the payment of the agreed amounts under the Settlement Agreement will result in the Debtors' recovery of approximately 95% of SCCI's agreed obligations to the Debtors under the Sale Agreements. In contrast, the Debtors have been advised that, if the Settlement is not consummated, SCCI will be unable to obtain replacement financing and may not be able to continue normal business operations. If that were to occur, Mr. Witalec explains, the Debtors would be required to incur additional costs to collect SCCI's outstanding obligations under the Sale Agreements. Furthermore, there is no assurance that the Debtors would be able to collect as much as they will receive pursuant to the proposed Settlement. (National Century Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 609/392-0900) NORTEL NETWORKS: Investor Analysts Conference Being Held Today -------------------------------------------------------------- What: Nortel Networks will host an Investor Analysts Conference. Who: -- Frank Dunn, President and Chief Executive Officer, and the Senior Management Team When: 8:00AM ET - 12:30PM ET, Wednesday, May 28, 2003 Where: To participate via the teleconference, please call the following numbers at least 15 minutes prior to the start of the event: North America: 1-888-313-7737 International: 1-212-748-2800 To participate via the audio/video webcast, please visit the following Web page at least 15 minutes prior to the start of the event: http://www.nortelnetworks.com/corporate/events/investorconf/ Nortel Networks is an industry leader and innovator focused on transforming how the world communicates and exchanges information. The Company is supplying its service provider and enterprise customers with communications technology and infrastructure to enable value-added IP data, voice and multimedia services spanning Wireless Networks, Wireline Networks, Enterprise Networks, and Optical Networks. As a global company, Nortel Networks does business in more than 150 countries. More information about Nortel Networks can be found on the Web at http://www.nortelnetworks.com As previously reported, Moody's Investors Service lowered the senior secured and senior implied ratings on the securities of Nortel Networks Corp., and its subsidiaries to B3 and Caa3 from Ba3 and B3 respectively. Outlook is negative. The rating action reflects the lack of Nortel's financial flexibility and the decline of its revenue base. The downgrade also takes into account the company's planned lapse of its $1.5 billion in credit facilities due on December. However the rating action is offset by its substantial cash, modest near-term debt maturities, and the progress the company has made in streamlining its expenses. NRG ENERGY: Wants to Honor and Pay Workers' Compensation Claims --------------------------------------------------------------- NRG Energy, Inc., and its debtor-affiliates' worldwide workforce currently comprises approximately 3,100 full and part-time employees, of which approximately 2,075 are employed in the NRG Companies' domestic operations. NRG directly employs approximately 325 employees, and the remaining 1,750 employees are employed by NRG's domestic affiliates in approximately 64 locations in 29 states throughout the United States. Approximately 1,025 employees of the Debtors' domestic workforce are non-union employees, and approximately 1,050 employees are union employees who are represented under 17 different collective bargaining agreements. Current Workers' Compensation Programs Since December 31, 2002, the Debtors have maintained a guaranteed-cost workers' compensation program in all the Covered States with Zurich North America. Under the Zurich Program, Zurich provides insurance coverage for workers' compensation claims under a guaranteed-cost arrangement with the Debtors, for which the Debtors have paid a lump-sum annual premium amounting approximately $4,100,000. Under the Zurich Program, there may be certain retroactive premium adjustments for various open claims for the period during which the policy remains in effect. Moreover, since December 2001, the Debtors have maintained a separate workers' compensation program solely for the operations of Louisiana Generating, L.L.C., with the Louisiana Workers' Compensation Commission. The Louisiana Program provides the Debtors with insurance coverage for workers' compensation claims for losses up to $1,000,000 per claim, with no deductible. The current annual premium for the Louisiana Program is $478,292, which is payable in twelve monthly installments from December 1, 2002 through November 30, 2003. In addition, there may be certain retroactive premium adjustments for, among other things, open claims for policy years 1997 through 2002. Prior Insured Programs From December 2001 to December 2002, the Debtors maintained a high-deductible workers' compensation program in all of the Covered States with American Protection Insurance Company, a subsidiary of Kemper. Kemper administered the program and provided insurance coverage for workers' compensation claims for losses up to $500,000 per claim and $4,800,000 in the aggregate. In addition to the Kemper Program, between 1994 and December 2001, the Debtors maintained high-deductible workers' compensation insurance programs in all of the Covered States with: (a) Lumbermen's Underwriting Alliance for 1994 to 2001, and (b) Chubb & Son during 1999. Matthew A. Cantor, Esq., at Kirkland & Ellis, in New York, relates that Claims under the Prior Insured Programs continue to be submitted to and paid in full by the applicable Prior Insured Programs. Each Prior Insured Program then seeks reimbursements for the amounts paid up to the deductible from the Debtors. The Debtors' average monthly payment on account of the deductible reimbursement is approximately $60,000 on account of the Kemper Program, $70,000 on account of the Lumbermen's Program, and $5,000 on account of the Chubb program. The aggregate amount of Prior Insured Claims pending as of the Petition Date was approximately $1,000,000, approximately half of which was primarily attributable to the Lumbermen's Program and approximately half of which was primarily attributable to the Kemper Program. Additionally, there may be certain retroactive premium adjustments for, among other things, open claims for the period during which the Prior Insured Programs were in effect. To secure the Debtors' obligations under the Prior Insured Programs, the Debtors have posted collateral in the form of: (a) a letter of credit issued by the JPMorgan Chase Bank for Kemper's benefit, amounting to $1,100,000; (b) an irrevocable letter of credit issued by Wells Fargo Bank for Lumbermen's benefit, amounting to $1,240,000; and (c) a $10,750 cash deposit to Chubb. Accordingly, pursuant to Sections 105(a) and 363(b) of the Bankruptcy Code, the Debtors seek the Court's authority to: (a) continue their existing workers' compensation programs in all states in which they have employees; (b) pay certain prepetition workers' compensation claims, premiums and related expenses. Mr. Cantor argues that it is critical that the Debtors be permitted to continue the Workers' Compensation Programs and ensure that prepetition premiums and Workers' Compensation Claims are paid. If the Workers' Compensation Programs are not maintained, the Debtors would be required to make alternative arrangements for workers' compensation coverage -- almost certainly at a much higher cost -- because the coverage is required under all applicable state workers' compensation laws, with severe remedies if an employer fails to comply with the laws, without interruption: (a) employees could bring down lawsuits for potentially unlimited damages, (b) the Debtors' ongoing business operations in certain states could be enjoined, and (c) the Debtors' officers and directors could be subject to criminal prosecution. The "necessity of payment" doctrine further supports the relief requested by the Debtors. This doctrine "recognizes the existence of the judicial power to authorize a debtor in a reorganization case to pay prepetition claims where the payment is essential to the continued operation of the debtor." Because the workers' compensation claimants are paid directly by the program administrators and the administrators have reimbursement claims against the Debtors, the Debtors intend to pay the Workers' Compensation Claims only to the extent necessary to help ensure that the employee claimants receive the amounts due them and the Workers' Compensation Programs remain in effect without interruption. The Debtors believe that any delay in the timely payment of workers' compensation programs would have a negative impact on the morale of the Debtors' current employees at a time when the support of the employees is most critical. Without the support of this key constituency, the NRG Companies' operations would be severely impaired. Mr. Cantor argues that the payment of the Prepetition Processing Costs is justified because failure to pay any amounts might disrupt services of third-party providers with respect to the Workers' Compensation Programs and Prior Insured Programs. By paying the Prepetition Processing Costs, the Debtors may avoid even a temporary disruption of the services and thereby ensure that their current and former employees obtain all compensation benefits without interruption and they remain in compliance with applicable state law at all times. Mr. Cantor assures Judge Beatty that the Debtors have sufficient cash reserves -- approximately $214,500,000 in the aggregate as of the Petition Date -- and will have sufficient cash from on- going operations to pay its monetary obligations in the ordinary course of business. (NRG Energy Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900) NRG Energy Inc.'s 8.700% bonds due 2005 (XEL05USA1) are trading at about 44 cents-on-the-dollar, says DebtTraders. See http://www.debttraders.com/price.cfm?dt_sec_ticker=XEL05USA1for real-time bond pricing. ORION REFINING: UST Convenes Section 341(a) Meeting on June 18 -------------------------------------------------------------- The United States Trustee will convene a meeting of Orion Refining Corporation's creditors on June 18, 2003, 2:00 p.m., at J. Caleb Boggs Federal Building, 844 King Street, Room 2112, Wilmington, Delaware 19801. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Orion Refining Corporation filed for chapter 11 protection on May 13, 2003 (Bankr. Del. Case No. 03-11483). Daniel B. Butz, Esq., Gregory Thomas Donilon, Esq., and Gregory W. Werkheiser, Esq., at Morris, Nichols, Arsht & Tunnell represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of more than $100 million each. OXIS INTERNATIONAL: Ability to Continue Operations Uncertain ------------------------------------------------------------ OXIS Intertnational Inc.'s working capital decreased during the first quarter of 2003 by $81,000, from $284,000 at December 31, 2002 to $203,000 at March 31, 2003. The decrease in working capital resulted primarily from the net loss of $149,000 adjusted for depreciation and amortization, $45,000, and an investment in equipment and patents, $30,000. Cash and cash equivalents decreased from $424,000 at December 31, 2002 to $371,000 at March 31, 2003. This decrease of $53,000 is a result of $84,000 used for operations and $30,000 invested in equipment and patents, somewhat offset by the receipt of $62,000 from the sale of its stock investment. The Company expects to incur operating losses for the foreseeable future. These losses and expenses may increase and fluctuate from quarter to quarter as the Company expands their activities. There can be no assurance that the Company will ever achieve profitable operations. The report of the Company's independent auditors on the Company's financial statements for the period ended December 31, 2002, includes an explanatory paragraph referring to the Company's ability to continue as a going concern. The Company anticipates that it will expend capital resources for the continuation of operations (marketing, product research and development, therapeutic and nutraceutical development). Capital resources may also be used for the acquisition of complementary businesses, products or technologies. The Company's future capital requirements will depend on many factors including: continued marketing and scientific progress in their research and development programs; the magnitude of these programs; the success of pre-clinical and potential clinical trials; the costs associated with the scale- up of manufacturing; the time and costs required for regulatory approvals; the time and costs involved in filing, prosecuting, enforcing and defending patent claims; technological competition and market developments; the establishment of and changes in collaborative relationships and the cost of commercialization activities and arrangements. While the Company believes that the existing and new products and technologies show considerable promise, its ability to realize revenues therefrom is dependent upon its success in marketing and sales, along with developing business alliances with related industry companies to assist in developing and marketing these products. To date, the Company has established marketing and sales relationships but has not established any therapeutic business alliances and there can be no assurance that the Company's effort to develop such therapeutic business alliances will be successful. The Company has incurred losses in each of the last six years. As of March 31, 2003, the Company had an accumulated deficit of $58,852,000. The Company expects to incur operating losses for the foreseeable future. It currently has sufficient capital for continuing operations of the health products segment but does not have sufficient capital resources to complete the Company's contemplated drug development programs and no assurances can be given that the Company will be able to raise such capital on terms favorable to the Company, or at all. The unavailability of additional capital could cause the Company to cease or curtail its operations and/or delay or prevent the development and marketing of the Company's existing products and potential pharmaceutical/nutraceutical products. Sales of its research assays and fine chemicals increased by 30%, or $125,000, from $421,000 in the first quarter of 2002 to $546,000 in the first quarter of 2003 due to an increase in sales volumes of L-Ergothioniene. Cost of sales was 51% of revenues for the first quarter of 2002 and 40% of revenues for the first quarter of 2003. Gross profit for the first quarter of 2002 was $210,000 and increased in the first quarter of 2003 to $329,000. This change is due to the increased sales volumes during the first quarter of 2003. Research and development expenses increased from $69,000 in the first quarter of 2002 to $109,000 in the first quarter of 2003. The increase in research and development expenses resulted primarily from the new development project of the Animal Health Profiling program. Selling, general and administrative expenses decreased from $398,000 in the first quarter of 2002 to $374,000 in the first quarter of 2003. The decrease is primarily the result of reducing legal and accounting expenses. During the first quarter of 2003 the Company sold its stock holdings of Caprius Inc., resulting in other income of $8,000. During the first quarter of 2002, in association with the closing of the Company's instrument manufacturing facility in 2001, the Company settled certain trade payables with creditors resulting in other income of $62,000. The Company continued to experience losses in the first quarter of 2003. The first quarter 2003 net loss of $149,000 was $49,000 less than the $198,000 net loss for the first quarter of 2002. The decrease in the net loss is primarily due to increased revenues. PENNEXX INC: Court OKs Smithfield Request to Foreclose on Assets ---------------------------------------------------------------- Pennexx Foods, Inc. (OTC Bulletin Board: PNNX), a leading provider of case-ready meat to retail supermarkets in the Northeast, announced that Smithfield's request to seize the tangible personal property of the Company was granted Thursday afternoon by Order of the United States District Court for the Eastern District of Pennsylvania. If Smithfield posts a bond in the amount of $12.5 million, an officer is directed to seize such property, after which time the Company has 72 hours to post a counterbond in the same amount. If the Company fails to post a counterbond in such time period it will lose possession of such property. On the other hand, if the Company posts such a counterbond within such time period, it will retain possession of such property. However, as previously announced, the property is still subject to sale on May 30, 2003 if the Smithfield obligations have not been paid. The Company's Board of Directors met Friday morning to consider what alternatives remain available to the Company. The Company is also continuing its discussions with potential investors who have expressed interest in making an investment in the Company sufficient to repay the Smithfield loan; however, no one thus far has committed to do so, and there is no assurance that the Company will succeed in this effort. Established in 1999, Pennexx Foods, Inc. is a leading provider of case-ready meat to retail supermarkets in the northeastern U.S. The Company currently provides case-ready meat within a 300-mile radius of its plants to customers in the Northeast in order to assure delivery of product with an extended shelf life. The Company cuts, packages, processes and delivers case-ready beef, pork, lamb and veal in compliance with the United States Department of Agriculture regulations. Pennexx customers include many significant supermarket retailers. PETCO ANIMAL: Caps Price of 9-Million Share Public Offering ----------------------------------------------------------- PETCO Animal Supplies, Inc. (Nasdaq:PETC) announced the pricing of a public offering of 9,000,000 shares of its common stock at $19.65 per share. All of the 9,000,000 shares are being offered by selling stockholders. Certain selling stockholders have granted the underwriters an option to purchase an additional 1,350,000 shares of common stock to cover over-allotments, if any. PETCO will not receive any proceeds from the sale of the shares by the selling stockholders. Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated are acting as joint book-running managers of the offering. Copies of the final prospectus supplement and related prospectus may be obtained from the offices of Morgan Stanley & Co. Incorporated, 1585 Broadway, New York, NY 10036, Attention: Prospectus Department, or by facsimile request at 212/761-0211, or Goldman, Sachs & Co., 85 Broad Street, New York, NY 10004, Attention: Registration Group, or by facsimile request at 212/902-3000. PETCO is a leading specialty retailer of premium pet food, supplies and services. It operates 617 stores in 43 states and the District of Columbia, as well as a leading destination for on-line pet food and supplies. PETCO Animal Supplies' May 3, 2003 balance sheet shows a total shareholders' equity of about $63,000 up from a deficit of about $11 million recorded at February 1, 2003. PLANVISTA: Board of Directors Re-Elects Officers of Parent Co. -------------------------------------------------------------- PlanVista Corporation (OTCBB:PVST) announced that the Board of Directors re-elected the following officers of the parent company at its annual meeting yesterday: Phillip S. Dingle, Chairman and Chief Executive Officer; Jeffrey L. Markle, President and Chief Operating Officer; Donald W. Schmeling, Chief Financial Officer; James T. Kearns, Senior Vice President, Operations; Robert A. Martin, Senior Vice President, Business Development Group; and David C. Reilly, Senior Vice President, Technology and Strategy. The following directors were elected at yesterday's annual shareholders' meeting: William L. Bennett, Phillip S. Dingle, Sheldon E. Misher, and James K. Murray III. Harold S. Blue, Dr. Richard Corbin, and Michael S. Falk were re-elected as directors by the Company's preferred shareholders. Mr. Misher is Counsel in the New York office of McCarter & English, a law firm headquartered in Newark, New Jersey. Between 1972 and 1999, Mr. Misher was a senior partner in the law firm of Bachner, Tally, Polevoy & Misher, New York, New York, specializing in the capital markets. The Company also announced that its shareholders approved the proposal in its proxy that provided for a new stock option plan. PlanVista Solutions provides medical cost containment and business process outsourcing solutions to the medical insurance and managed care industries. We provide integrated national preferred provider organization network access, electronic claims repricing, and network and data management services to health care payers, such as self-insured employers, medical insurance carriers, third party administrators, health maintenance organizations, and other entities that pay claims on behalf of health plans. We also provide network and data management services to health care providers, such as individual providers and provider networks. Visit the Company's Web site at http://www.planvista.com PlanVista Corporation's March 31, 2003 balance sheet shows a total shareholders' equity deficit of about $17 million. RANDALL'S ISLAND FAMILY GOLF: Court to Consider Plan on June 17 --------------------------------------------------------------- A hearing to consider confirmation of the Third Amended Joint Plan of Liquidation proposed by Randall's Island Family Golf Centers, Inc., and its debtor-affiliates is scheduled for June 17, 2003. The Confirmation Hearing will begin at 10:00 a.m. prevailing Eastern Time, before the Honorable Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York. The deadline for filing and serving confirmation objections is June 5, 2003. In order to be considered, objections must be filed electronically with the Clerk of the Bankruptcy Court and served on: 1. Golenbock, Eiseman, Assor, Bell & Peskoe 437 Madison Avenue New York, NY 10022 Attn: Jonathan L. Flaxer, Esq. 2. Brown, Rudnick, Berlack, Israels L.P. 120 West 45th Street New York, NY 10036 Attn: Leslie Scharf, Esq. 3. Morgan, Lewis & Bockius 101 Park Avenue New York, NY 10178 Attn: Neil E. Herman, Esq. 4. Office of the United States Trustee 33 Whitehall Street 21st Floor New York, NY 10004 Attn: Brian Masuto, Esq. Randall's Island Family Golf Centers filed for Chapter 11 relief on May 4, 2000 (Bankr. S.D.N.Y. Case No. 00-41065). Andrea B. Schwartz, Esq., Janice Beth Grubin, Esq., and Jonathan L. Flaxer, Esq. at Golenbock, Eiseman, Assor, Bell & Peskoe represent the Debtors in their restructuring efforts. RECOTON CORP: Auction Sale for Elec. Accessories Assets Tomorrow ---------------------------------------------------------------- Under the terms of an Asset Purchase Agreement, Recoton Corporation and its debtor-affiliates are selling substantially all of their electronics accessories business to Gemini II, LLC, for $50 million. The sale is subject to higher and better offers. By Order of the U.S. Bankruptcy Court for the Southern District of New York, the Debtors will convene an auction sale for the assets of Recoton's Accessories Business tomorrow, at 10 a.m. prevailing Eastern Time, at the offices of the Debtors' counsel, Strook & Strook & Lavan LLP, 180 Maiden Lane, New York, New York 10038. A final Sale Hearing is set for June 3, 2003, at 11:00 a.m. Recoton Corporation, together with its subsidiaries, is engaged in the development, manufacturing and marketing of consumer electronics accessories and home and mobile audio products. The Company filed for Chapter 11 protection on April 8, 2003 (Bank. S.D.N.Y. Case No. 03-12180). Kristopher M. Hansen, Esq., and Lawrence M. Handelsman, Esq., at Stroock & Stroock & Lavan LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $233,649,054 in total assets and $234,605,283 in total debts. RIBAPHARM INC: Shareholders Elect Six Board of Directors Members ---------------------------------------------------------------- Ribapharm Inc. (NYSE: RNA) announced results of the proposals considered at its annual stockholder meeting held this morning. Ribapharm stockholders elected six directors, for a one-year term, to serve on the Company's board: Gregory F. Boron, Santo J. Costa, Dr. Andre C. Dimitriadis, Daniel J. Paracka, James J. Pieczynski and Dr. Robert A. Smith. "We are particularly pleased with the endorsement given by the stockholders to the company's slate of directors," said Kim D. Lamon, M.D., Ph.D., President and Chief Executive Officer of Ribapharm. "The board brings significant life sciences and financial experience to Ribapharm, which will prove invaluable as we expand our growing drug discovery and development capabilities." Also at the meeting, stockholders approved the proposal to ratify the appointment of PricewaterhouseCoopers LLP as independent accountants to audit the Company's 2003 financial statements. All results are subject to certification by Ribapharm's transfer agent, American Stock Transfer and Trust Corporation. An online archive of the meeting is available on the Investor Relation's section of Ribapharm's Web site at http://www.ribapharm.comand will be archived until June 23, 2003. Ribapharm, whose March 31, 2003 balance sheet shows a total shareholders' equity deficit of about $335 million, is a biopharmaceutical company that seeks to discover, develop, acquire and commercialize innovative products for the treatment of significant unmet medical needs, principally in the antiviral and anticancer areas. SCHWARTZ ELECTRO-OPTICS: Case Summary & 20 Unsecured Creditors -------------------------------------------------------------- Debtor: Schwartz Electro-Optics, Inc. 5337 Southpark Circle Orlando, Florida 32819 Bankruptcy Case No.: 03-05880 Type of Business: Laser-Equipment Maker Chapter 11 Petition Date: May 21, 2003 Court: Middle District of Florida (Orlando) Judge: Arthur B. Briskman Debtor's Counsel: Peter N. Hill, Esq. Wolff, Hill, McFarlin & Herron, PA 1851 West Colonial Drive Orlando, Fl 32804 Tel: 407-648-0058 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Intermec Corp. $105,008 UDT Sensors, Inc. $65,690 Computer Plus Staffing Solutions $62,668 Perkin Elmer Optroelectronics $54,097 Onsite Commercial Staffing $53,327 Candela Corp c/o Applied Optronics Corp. $52,355 Perkshire Industries, Inc. $51,322 Phoenics Company $48,000 George Industries, Inc. $44,806 Support Analysis Management $42,342 Collins Manufacturing, Inc. $40,680 Poole Carbone Eckbert $40,000 Resources Connections Corp. $38,376 E-Circut Inc. $36,938 Evan Thomas Associates Inc. $29,711 Angkor Machining MFG, Inc. $27,633 Saab Bofers Dynamics $26,650 Allied Wire and Cable $26,539 Hi-Tec Associates $26,343 Misource $25,556 SCIENTIFIC GAMES: Appoints Deloitte & Touche as External Auditor ---------------------------------------------------------------- Scientific Games Corporation (Nasdaq: SGMS) announced that its Audit Committee has engaged Deloitte & Touche LLP to serve as the Company's new independent certified public accountant, replacing KPMG LLP, effective May 20, 2003. The decision to change accountants was approved by the Board of Directors. Deloitte & Touche, one of the nation's leading professional services firms, provides assurances, advisory and tax consulting services through 30,000 people in more than 100 U.S. cities. Deloitte & Touche LLP is part of Deloitte Touche Tohmatsu, one of the world's leading professional services firms, with more than 90,000 people in over 130 countries. KPMG had served as the independent certified public accountant for the Company since fiscal 1984. The decision to change auditors was not caused by any disagreement between the Company and KPMG on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure. Scientific Games Corporation is the leading integrated supplier of instant tickets, systems and services to lotteries, and the leading supplier of wagering systems and services to pari-mutuel operators. It is also a licensed pari-mutuel gaming operator in Connecticut and the Netherlands and is a leading supplier of prepaid phone cards to telephone companies. Scientific Games' customers are in the United States and more than 60 other countries. For more information about Scientific Games, visit its Web site at http://www.scientificgames.com As previously reported, Standard & Poor's Ratings Services assigned its 'BB-' rating to lottery and pari-mutuel operator Scientific Games Corp.'s $340 million senior secured credit facility. Proceeds from the new bank facility were used to refinance outstanding debt under the company's existing bank facility. At the same time, Standard & Poor's affirmed its 'BB-' corporate credit rating on the company. The ratings on the company's existing bank facility were withdrawn. The outlook is stable. SERVICE MERCHANDISE: Court OKs Uniden Claim for Voting Purposes --------------------------------------------------------------- Bankruptcy Court Judge Paine approved Uniden America Corporation's request for temporary allowance of its claim for the purpose of voting to accept or reject Service Merchandise Company, Inc., and its debtor-affiliates' First Amended Reorganization Plan. Uniden timely filed its original claim for $5,614,531 on July 22, 1999. On May 22, 2000, Uniden amended its claim to $4,886,521. In the Debtors' Omnibus Objection to Duplicate Trade Claims, Uniden's Amended Proof of Claim was allowed as surviving claim and the Debtors assured Uniden that this surviving claim is not in dispute. The Debtors explained that Uniden may not have received a ballot for voting because: (a) they had filed actions against Uniden to recover property in Adversary Case Nos. 301-0691A and 301-0769A; and (b) pursuant Section 506(d) of the Bankruptcy Code, they filed objections to claims asserted by creditors against whom they were seeking to recover property. However, Charles W. Cook, Esq., Stokes Bartholomew Evans & Petree Pennsylvania, in Nashville, Tennessee, points out that Uniden is not aware of any motion having been filed against its claim, as amended. Moreover, the Adversary Actions were resolved by a settlement agreement on October 26, 2001, and the Adversary Proceedings were dismissed by Agreed Orders of Dismissal dated February 4, 2002. Accordingly, Uniden has a timely filed allowed claim for $4,886,521 for voting purposes. (Service Merchandise Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 609/392-0900) SIMON TRANSPORTATION: Files Liquidating Chapter 11 Plan in Utah --------------------------------------------------------------- Simon Transportation Services, Inc., and its debtor-affiliates filed their Second Amended Liquidating Chapter 11 Plan with the U.S. Bankruptcy Court for the District of Utah. The Debtors and the Official Committee of Unsecured Creditors are the proponents of the Plan. A full-text copy of the Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=030525210322 On the Effective Date, the Estates shall be deemed substantively consolidated into the Consolidated Estate and any and all claims by an individual Estate against the other shall be eliminated The Plan groups Claims and Interests in two classes: Class 1 Allowed Unsecured Claims After payment of Administrative Expense Claims and Priority Claims, the Class 1 Creditors shall receive a pro rata share of the remaining assets of the Consolidated Estate. Class 2 Interests in Debtors All interests in Debtors shall be deemed cancelled and of no further force or effect as of the Effective Date. The Committee is authorized to sell, or otherwise dispose of all assets of the Consolidates Estate in accordance with the Code and is specifically empowered to sell assets pursuant to Section 363 and assume and assign assets. In sum, the Committee will have all the rights, powers and duties of a Chapter 11 trustee under the Bankruptcy Code. The Committee will also have the responsibility to: i) represent the Consolidated Estate's interests in any disputes or proceedings arising out of the agreement whereby substantially all of the Debtors' assets were sold to Central refrigerated Service, Inc.; ii) make distributions to Creditors as provided in the Plan; iii) file objections to Claims and prosecute the objections as the Committee determines, is in the best interest of the Consolidated Estate and Creditors; iv) collect and liquidate all property of the Consolidated Estate so as to maximize the return to Creditors; v) dispose of the Tradeback Agreements; and vi) close the Consolidated Estate after filing a final report with the Court. Simon Transportation Services Inc., a truckload carrier providing nationwide, predominantly temperature-controlled transportation services for major shippers, field for Chapter 11 protection on February 25, 2002 (Bankr. Utah Case No. 02-22906). Scott J. Goldstein, Esq., at Spencer Fane Britt & Browne LLP represents the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, it listed $132,242,081 in assets and $135,898,793 in liabilities. SPECIAL METALS: Seeks Court Nod for Buck Consultants' Employment ---------------------------------------------------------------- Special Metals Corporation and its debtor-affiliates ask for approval from the U.S. Bankruptcy Court for the Eastern District of Kentucky to employ Buck Consultants, Inc., as their Actuary, nunc pro tunc to March 27, 2002. Since the filing date, the Debtors tell the Court that Buck Consultants has provided valuable consultation to them with respect to their pension plans, including: a) projections of future benefit disbursements and funding requirements under current pension plans through year 2006; b) consulting regarding alternative pension plan designs and impact on pension funding and expense and liabilities; c) consulting with regard to issues concerning the PBGC; d) design and analysis of active medical programs and introduction of cost control initiatives; and e) analysis and consulting related to negotiations with the machinist and steelworkers unions. The Debtors relate the Buck Consultants has provided these services as an ordinary course professional. The Debtors are seeking specific approval of the Buck Consultants engagement because its professional fees exceeded $150,000 over the initial 12-month period of these cases. The Debtors argue the employment of Buck Consultants is appropriate under Section 327 of the Bankruptcy Code and that Buck Consultant is a "disinterested person" as that phrase is defined in the Bankruptcy Code. Robert M. Howley, Associate Principal and Retirement Actuary of Buck Consultants discloses that the hourly billing rates his firm charges the Debtors are: Principal $464 to $660 per hour Associate Principal $380 to $452 per hour Senior Consultant $272 to $360 per hour Consultant $240 to $275 per hour Senior Associate $198 to $216 per hour Associate $140 to $192 per hour Other Technical and General Operating Personnel $140 per hour Special Metals, the world's largest and most diversified producer of high-performance nickel-based alloys, filed for chapter 11 protection on March 27, 2002 (Bankr. E.D. Ky. Case No. 02-10335). Gregory R. Schaaf, Esq., at Greenebaum Doll & McDonald PLLC represents the Debtors in their restructuring efforts. As of September 30, 2001, the Debtors listed $790,462,000 in total assets and $774,306,000 in total debts. SPORTS CLUB CO: Fails to File Form 10-Q for Q1 2003 on Time ----------------------------------------------------------- The Sports Club Co, Inc. has advised the SEC that it has been working diligently to prepare its consolidated financial statements for the quarter ended March 31, 2003 and such consolidated financial statements have been substantially completed. However, due to the complexities associated with accounting for private training revenues, the Company has not finalized these consolidated financial statements and was unable to file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 within the prescribed period. The net loss for the three months ended March 31, 2003, is estimated to be approximately $3.8 million, or $1.1 million less than the net loss reported for the three months ended March 31, 2002, of $4.9 million. The decreased net loss of $1.1 million is due to increased operating performance at the five new Clubs opened in the years 2000 and 2001. * * * As previously reported in Troubled Company Reporter, the amendment to Loan Agreement with Comerica Bank was made as a result of the Company's non-compliance with two of the financial covenants for the June 30, 2002, reporting quarter. The Bank had previously waived the Company's compliance with such covenants for that quarter. The Sports Club Company operates four sports and fitness clubs (the Clubs) under The Sports Club/LA name in Los Angeles, Washington D.C. and at Rockefeller Center and the Upper East Side in New York City. The Company also operates the Sports Club/Irvine, The Sports Club/Las Vegas and Reebok Sports Club/NY. SCC's Clubs offer a wide range of fitness and recreation options and amenities, and are marketed to affluent, health-conscious individuals who desire a service-oriented club. The Company's subsidiary, The SportsMed Company, operates physical therapy facilities in some Clubs. At December 31, 2003, the Company's balance sheet shows a working capital deficit of about $22 million, while total shareholders' equity continued to dwindle to about $33 million. STROUDS ACQUISITION: Case Summary & 20 Largest Unsec. Creditors --------------------------------------------------------------- Debtor: Strouds Acquisition Corporation 280 Machlin Court City of Industry, California 91789 Bankruptcy Case No.: 03-23620 Type of Business: The debtor sells bed, bath, and kitchen textiles (sheets, pillows, towels) at nearly 50 stores in four states. Chapter 11 Petition Date: May 20, 2003 Court: Central District of California (Los Angeles) Judge: Ernest Robles Debtors' Counsel: Marc J Winthrop, Esq. Winthrop Couchot Professional Corporation 660 Newport Center Dr, 4th Floor Newport Beach, CA 92660 Tel: 949-720-4100 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Hollander Home Fashions Trade Debt $1,056,199 Attn: Jeff Hollander 1370 Broadway New York, NY 10018 Tel: 561-997-6900 Fax: 561-997-0597 Veratex Trade Debt $1,004,689 Attn: Saul Sobal 14000 Arminta Street Panorama City, CA 91402 Tel: 818-994-6487 Fax: 818-994-6578 Fieldcrest Cannon Inc. Trade Debt $566,147 Attn: Scott Senatore 1 Lake Circle Drive Kannapolis, NC 28081 Tel: 704-939-2964 Fax: 704-939-4458 Enmark Trading Inc. Trade Debt $465,477 Attn: Allen Gordon 315 S. Beverly Drive Suite 406 Beverly Hills, CA 90212 Tel: 310-551-0530 Fax: 310-551-0509 Sheridan Australia Trade Debt $397,074 Attn: Barbara Jackson 250 Feaster Road Greenville, SC Tel: 864-288-4788 Fax: 864-288-4866 Wamsutta Trade Debt $296,243 Attn: William Bartelmo 136 Grace Avenue Lancaster, SC 29720 Tel: 803-286-2579 Fax: 8036-286-3166 Park B. Smith Ltd. Trade Debt $247,912 Croscill Trade Debt $236,911 Regal Trade Debt $197,631 Pem-America Trade Debt $182,929 Creative Bath Trade Debt $144,391 American Pacific Trade Debt $208,212 Louisville Bedding Trade Debt $170,976 Custom Comfort Trade Debt $153,666 Pillowtex Trade Debt $147,217 Sherry Kline Trade Debt $156,717 Sferra Trade Debt $100,449 Next Creations/Offis Trade Debt $118,496 Textiles Uma Enterprises Inc. Trade Debt $124,991 Smith & Johnson Dry Goods Trade Debt $123,199 Inc. TCENET INC: Vaughan Armstrong Resigns from Board of Directors ------------------------------------------------------------- TCEnet Inc. announces that Vaughan Armstrong has resigned his position as Director of the Corporation. * * * As previously reported, TCEnet had a loss for the year ended December 31 2002 of $1,104,853 as compared to a profit of $536,500 in 2001 and negative cash flow from operations of $1,485,787. While the company had positive working capital at December 31, 2002, its ability to continue as a going concern is dependant upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain additional financing and ultimately to generate profitable operations. The company has restructured its operations during the current year in an effort to reduce cash out-flow and obtain profitability. The restructuring included the sale of certain assets and liabilities associated with its Datap division. TERADYNE INC: Appoints Michael A. Bradley as Company President -------------------------------------------------------------- Teradyne, Inc. (NYSE: TER) announced that Michael A. Bradley has been appointed President of Teradyne, effective immediately. George Chamillard will continue as the company's CEO and Chairman and will work with Mr. Bradley on a transition of duties over the next few weeks. Bradley, 54, joined Teradyne in 1979. He has served in a variety of roles in Semiconductor Test and the central company in finance, marketing and sales management. From 1998 to 2000, he was the Company's Chief Financial Officer and since April of 2001, he has served as President of the Semiconductor Test Division. Bradley is a member of SEMI's North American Advisory Board and also serves on the Board of Directors of Mykrolis Corporation. He holds an A.B. degree from Amherst College and an M.B.A. from Harvard Business School. Regarding the appointment, George Chamillard said, "Teradyne's long-term success has always been a function of the capability and integrity of its people. Mike embodies the best of these qualities and I look forward to working with him in his role as President." Teradyne (NYSE:TER) is the world's largest supplier of Automatic Test Equipment, and a leading supplier of interconnection systems. The company's products deliver competitive advantage to the world's leading semiconductor, electronics, automotive and network systems companies. In 2002, Teradyne had sales of $1.22 billion, and currently employs about 6800 people worldwide. For more information, visit http://www.teradyne.com Teradyne is a trademark of Teradyne, Inc., in the US and other countries. As reported in Troubled Company Reporter's December 19, 2002 edition, Standard & Poor's lowered its corporate credit and senior unsecured note ratings on Teradyne Inc., to 'B+' from 'BB-'. The action recognizes continued stressed conditions in the semiconductor capital goods industry that are likely to impede the company's ability to restore operating profitability over the intermediate term. The outlook was revised to stable from negative on the Boston, Mass.-based Teradyne, which supplies the semiconductor testing industry. Teradyne had debt outstanding of $545 million, including capitalized leases, as of September 2002. TERRAQUEST ENERGY: March 31 Working Capital Deficit Tops $8 Mil. ---------------------------------------------------------------- Terraquest Energy Corporation announced its operating and financial results for the quarter ended March 31, 2003. HIGHLIGHTS - Production up 257% from first quarter 2002 - Reached agreement on 40 bopd asset acquisition - Shut-in gas coming back on stream - 50 section farm-in signed FIRST QUARTER RESULTS Three Months Ended March 31 2003 2002 % Change ---- ---- -------- Average Sales Crude oil (bbls/d) 97 101 (4) Natural gas (mcf/d) 3,627 571 535 Natural gas liquids (bbls/d) 10 3 233 Total (boe/d @ 6:1) 711 199 257 Average Prices (net of hedging) Oil ($/bbl) 44.40 33.29 33 Natural gas ($/mcf) 5.73 3.92 46 Natural gas liquids ($/bbl) 42.45 32.99 29 Financial Three Months Ended March 31 2003 2002 % Change ---- ---- -------- Revenue, net of royalties $1,639,944 $309,889 429 Cash flow 755,092 (49,497) 1,625 Cash flow per share 0.01 (0.00) - Net loss (165,488) (184,582) (10) Net loss per share (0.00) (0.01) - Net capital expenditures 2,957,782 1,161,307 155 Net debt (working capital) 7,710,436 (788,297) 1,078 Shares outstanding 55,576,378 37,382,252 49 Stock options outstanding 3,097,000 2,260,000 37 ACTIVITY REVIEW In the first quarter, Terraquest participated in the drilling of six exploratory wells (5.2 net), two of which were drilling over year-end and rig released in January. At McLeans Creek, in Northwest Alberta, an exploratory Granite Wash oil well was unsuccessful, while at Bigoray, in West Central Alberta, an exploratory gas well was completed and is currently suspended. A successful oil well (50% net) was drilled at Little Bow and is on production at a stabilized rate of 20 bbls per day. Three successful gas wells (all 100% W.I.) were cased at Iron Springs, Badger and Eyremore. Tie-in of the well at Iron Springs has been completed and the well will be on-stream by month end. Production from the Eyremore area in Southern Alberta was hampered by operational problems at a third party sour gas processing facility, leading to net production of approximately 1 mmcf per day being shut-in for most of the first quarter. The facility began to accept reduced volumes in April and it is expected that full production should commence in June, 2003. The well at Firebird, in Northwest Alberta, was shut-in throughout the quarter, but has been brought back on stream in May at restricted rates of 70 to 90 boe per day net. An acquisition of properties producing approximately 40 boe per day in the Grand Forks area of Southern Alberta for cash consideration of $518,000 was signed in January and closed on May 2, 2003. While the purchase is effective October 1, 2002, no production volumes from these properties were included in first quarter results. Included in the purchase are 1,200 net acres of undeveloped land and an oil battery at Grand Forks. Terraquest has identified two well locations and two recompletions on these lands. Terraquest's business plan for 2003 continues to be to lever off our large land position to build critical mass in the company. MANAGEMENT'S DISCUSSION AND ANALYSIS Per boe amounts have been calculated assuming that six thousand cubic feet ("mcf") of natural gas equals one barrel ("bbl") of crude oil. Year to date results for 2002 include operations from January 16, 2002 and operational statistics are calculated from that date. Terraquest's sales averaged 711 boe per day in the first quarter, up from 199 boe per day in the first quarter of 2002 and down from 885 boe per day in the fourth quarter of 2002. Natural gas sales averaged 3,627 mcf per day in the first quarter of 2003, compared to 571 mcf per day in the first quarter of 2002 and 4,632 mcf per day in the fourth quarter of 2002. The premature watering out of a 1mmcf per day (net) gas well at Eyremore, as well as the continuing shut-in production at Eyremore during the quarter led to the reduced volumes. Crude oil and liquids sales were steady, averaging 107 barrels per day ("bopd") for the first quarter, compared to 104 bopd a year earlier and 113 bopd in the fourth quarter of 2002. Strong oil and gas prices resulted in net revenues of $1,733,872 for the first three months of 2003, up substantially from $309,889 a year earlier. The average sales price of crude oil for the first quarter, net of hedging, was $44.40 per barrel compared to $33.29 in 2002, while Terraquest's natural gas price averaged $5.73 per mcf in the first quarter, up from $3.92 per mcf in the first quarter of 2002. Reduced gas production volumes in the first quarter resulted in 70% of sales being subject to fixed price contracts, where the price was approximately $5.40 per mcf. As production volumes increase, a greater portion of sales will be at spot prices. Royalties, net of the Alberta Royalty Tax Credit, were $653,501 in the first quarter of 2003, representing 28.5% of sales, compared to $119,191 in 2002. The effective royalty rate was higher in the first quarter as freehold mineral taxes were paid on properties in the Robin area of Southern Alberta and the Alberta reference price used for gas royalty calculations was considerably higher than the actual revenue being received pursuant to fixed price gas contracts. Royalty rates include all overriding royalties payable. As production volumes increase, we expect effective royalty rates to decrease. Operating expenses increased to $554,061 or $8.66 per boe for the quarter, compared to $130,389 or $8.74 per boe for the first quarter of 2002, as production volumes were higher in 2003. General and administrative expenses for the three months ended March 31, 2003 were $272,538 or $4.26 per boe, compared to 230,977 or $15.48 per boe for the same period in 2002. Depletion and depreciation expense for the first quarter of 2003 was $1,234,091, compared to $184,595 in 2002, reflecting higher production volumes in 2003. The future tax recovery for the quarter of $378,340 reflects the loss recorded for the period, as well as reduced future income tax rates. Terraquest has approximately $20.0 million of tax pools available to shelter future income. Cash flow from operations for the first quarter was $755,092 or $0.01 per share, up from negative cash flow of $49,497 in the first quarter of 2002. The Company incurred a net loss during the first quarter of $165,488 or $nil per share, down slightly from a loss of $184,532 in 2002. The loss reflects high depletion charges. Net capital expenditures were $2,957,782 for the first three months of 2003, up from $1,161,307 in 2002. The weighted average shares outstanding for the first quarter were 55.6 million, compared to 28.7 million for 2002. There are currently 55.6 million shares and 3.1 million stock options outstanding. LIQUIDITY AND CAPITAL RESOURCES At March 31, 2003, the Company had $1.7 million undrawn on its $7.5 million line of credit, which is approximately $0.2 million less than the net working capital deficiency at that date. The line of credit was expanded to $9.1 million in April, 2003 decreasing to $8.0 million in June, 2003. Capital expenditures in 2003 will be funded from cash flow and the excess available on the bank line. At March 31, 2003, the company's balance sheet shows that its total current liabilities outweighed its total current assets by about $8 million. OUTLOOK After hitting a "speedbump" on the road to production growth, Terraquest continues to focus on increasing its production volumes, building its prospect inventory and levering off its large land base. A recent four well farm-out on favorable terms will accelerate drilling activity in the Company's Southern Alberta core area in the second quarter of 2003. The return to partial production rates from the two key shut-in wells at Eyremore and Firebird is a positive development which, combined with the acquisition of producing properties at Grand Forks in May, will boost second quarter production volumes. Assuming minimal success from new drilling, annualized production volumes for 2003 are forecast to average 750 to 900 boe per day, depending on the stability in production volumes from the Firebird and Eyremore wells. Current production volumes are approximately 800 boe per day, with Eyremore and Firebird at restricted production levels. In 2003, the quality and quantity of Terraquest's prospects has continued to increase, which bodes well for future growth of the Company. In that regard, we are pleased to announce that Terraquest has executed an exciting new farm-in on approximately 50 sections of high working interest lands in Southern Alberta, with the potential for exploration and development of gas and oil prospects. Terraquest will have access to a large seismic base on this extensive land position, which could fuel meaningful growth in Southern Alberta. Terraquest is a full cycle junior exploration and development company with a large undeveloped land base in Alberta. The company trades on the Toronto Stock Exchange under the symbol "TRQ". TEXAS GAS: Prices Tender Offer for $150 Million of 8.625% Notes --------------------------------------------------------------- Texas Gas Transmission, LLC (formerly Texas Gas Transmission Corporation) announced the consideration to be paid in its tender offer for any and all $150 million in aggregate principal amount of its outstanding 8.625% notes due 2004 (CUSIP No. 882440 AQ 3). The total consideration payable was determined based on the bid- side yield of the 3.625% U.S. Treasury note due March 31, 2004, as of 2:00 p.m. New York City time on May 22, 2003, plus a fixed spread of 50 basis points, as more fully described in the Company's Offer to Purchase dated May 16, 2003. The reference yield as calculated by the Dealer Managers was 1.102%. Accordingly, the tender offer yield is 1.602%, and the total consideration per $1,000 principal amount of notes is $1,058.44. In addition, holders of notes validly tendered and not withdrawn before 5:00 p.m. New York City time on the Early Tender Date will receive $13.66 of accrued and unpaid interest to an assumed settlement date of May 28, 2002. The total consideration includes an early tender premium of $30 per $1,000 principal amount of notes payable only in respect of notes validly tendered and not withdrawn before 5:00 p.m. New York City time on the Early Tender Date. The Company also announced that $132,715,000 in aggregate principal amount of the notes (88.5% of the aggregate principal amount of notes outstanding) were tendered and not withdrawn before 5:00 p.m. New York City time on the Early Tender Date. The tender offer is scheduled to expire at 12:00 midnight, New York City time, on June 13, 2003, unless extended or earlier terminated. Holders who validly tender (and do not withdraw) their notes after 5:00 p.m., New York City time, on the Early Tender Date but prior to 12:00 midnight on the Expiration Date, will receive the total consideration less the early tender premium, which is $1,028.44 per $1,000 principal amount of notes, and accrued and unpaid interest up to and not including the final settlement date, expected to be promptly following the Expiration Date. The tender offer is subject to the terms and conditions set forth in the Offer to Purchase. The Company has retained Lehman Brothers Inc. and Citigroup Global Markets Inc. to serve as Dealer Managers for the tender offer, and Innisfree M&A Incorporated to serve as the Information Agent. Requests for documents may be directed to the Information Agent by telephone at (888) 750-5834 (toll-free) or (212) 750-5833 (collect). Questions regarding the tender offer may be directed to Lehman Brothers Inc. at (800) 438-3242 (toll- free) or (212) 528-7581 (collect), Attention: Liability Management Group - Rad Antonov or Citigroup Global Markets Inc. (800) 558-3745 (toll free) or (212) 723-6106, Attention: Liability Management Group. TEXAS GAS: Fitch Upgrades Low-B Senior Unsecured Debt Rating ------------------------------------------------------------ Texas Gas Transmission, LLC's (TGT; formerly Texas Gas Transmission Corp.) senior unsecured debt rating is upgraded to 'BBB+' from 'BB' by Fitch Ratings. The rating is removed from Rating Watch Positive where it was placed on April 14, 2003. In addition, Fitch assigns a 'BBB+' rating to TGT's issuance of $250 million senior notes due 2015 and a 'BBB' rating to TGT Pipeline LLC's issuance of $185 million senior notes due 2018. Proceeds from the new issues will be used to refinance $150 million of higher cost debt at TGT and repay a $275 million bridge loan. The Rating Outlook is Stable. The rating action follows the successful completion of the acquisition of TGT by Loews Corp. ('A' senior unsecured debt, Rating Outlook Negative by Fitch) on May 16, 2003 in a transaction valued at $1.045 billion. As part of the acquisition Loews established TGT Pipeline as an intermediate holding company for TGT. TGT is a Federal Energy Regulatory Commission regulated natural gas pipeline which owns and operates a 5,900 mile long-line system connecting Gulf Coast gas-producing basins to end-user markets in the Midwest. TGT's rating reflects its stable market position in the highly competitive U.S. mid-continent corridor, its strong standalone financial profile, and the higher rating of Loews as compared with that of former owner The Williams Companies, Inc. ('B+' senior unsecured debt, Rating Outlook Stable). Notwithstanding these strengths, TGT's rating is constrained by its relatively short contractual profile and potential cash flow volatility due to capacity turnback and/or rate discounting. With approximately 43% of TGT's firm transportation contracts set to expire through December 2005, TGT is exposed to significant near-term capacity turnback risk. Due to competitive conditions in the Midwest gas pipeline sector, Fitch believes that some level of rate discounting may be necessary to retain this capacity. TGT's standalone credit profile is consistent with the 'BBB+' rating even after factoring in the proposed debt issuance at TGT. On a pro-forma basis, TGT's capital structure is likely to approximate 36% debt and 64% shareholders' equity versus a historical range of about 28% debt/capital. In addition, EBITDA to interest should exceed 6.5 times in 2003. The proposed 'BBB' rating for TGT Pipeline reflects the structural subordination of its debt obligations to TGT's outstanding $350 million senior notes and the expectation that cash distributions from TGT will be sufficient to cover debt service at TGT Pipeline. The FERC currently does not provide any general restrictions limiting the flow of funds between regulated pipeline operating subsidiaries from their immediate parent companies. In addition, there are no restrictions in TGT's indenture limiting its ability to upstream dividends to TGT Pipeline. Accordingly, TGT Pipeline should have sufficient cash available to service debt on its proposed $185 million senior notes. Fitch estimates that cash to TGT Pipeline, as defined by EBITDA generated by TGT minus TGT interest expense and capital expenditures should cover interest expense on TGT Pipeline's senior notes by approximately 2.5x in 2003. TROLL COMMS: US Trustee Sets Section 341(a) Meeting for June 25 --------------------------------------------------------------- The United States Trustee will convene a meeting of Troll Communications, LLC and its debtor-affiliates' creditors on June 25, 2003, 2:00 p.m., at J. Caleb Boggs Federal Building, 2nd Floor, Room 2112, 844 King Street, Wilmington, Delaware 19801. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Troll Communications L.L.C., Publishes and distributes books and other educational materials primarily aimed at the pre-K through 9th grade market. The Debtors filed for chapter 11 protection on May 16, 2003 (Bankr. Del. Case No. 03-11508). Raymond Howard Lemisch, Esq., at Adelman Lavine Gold and Levin, PC represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed estimated assets and debts of over $100 million each. UNITED AIRLINES: Wants Nod for Global Settlement with GE Capital ---------------------------------------------------------------- UAL Corporation asks Judge Wedoff for authority to enter into a Global Settlement, including a DIP Liquidity Facility, with General Electric Capital Corporation, PK Air US, Inc. and PK AirFinance US, Inc. James H.M. Sprayregen, Esq., at Kirkland & Ellis, tells the Court that United has an extensive and critical relationship with the GE Entities, including aircraft financing and general debt financing. The GE Entities are among the Debtors' largest creditors, with involvement in the financing for 82 of the Debtors' aircraft. Additionally, GECC invested in a junior tranche of United's 2001-1 EETC aircraft financing transaction. The Global Settlement addresses 51 aircraft. Of the other 31 aircraft, the interests in 16 were transferred to other parties and terms for the remaining 15 are currently under settlement negotiations. Mr. Sprayregen explains that the Global Settlement reflects the GE Entities' strong collateral position, unique relationship with United and their willingness to finance a significant portion of the Debtors' future capital needs. The key aspects of the Global Settlement are: (1) the creation of up to $16,000,000 in DIP Liquidity Facility, secured by junior security interests in the same collateral that secures the Credit Agreement dated January 28, 2002, between United, PK Air and Wells Fargo Bank, and the Credit Agreement dated May 29, 2002, between United, PK AirFinance and Wells Fargo; (2) the modification of the January Facility and the May Facility to extend the maturity date for each Series A Loan and Series B Loan by three years, amend the amortization schedule for the Series A and B Loans and reduce the Applicable Margin; (3) the transfer of GECC and its affiliates' interests in the Ranger Aircraft and the Series D Certificates to United; (4) the transfer of United's interest in the PK 777 Aircraft to GECC; (5) the lease of the PK 777 Aircraft by GECC to United; (6) the foreclosure of PK AirFinance's debtholders' lien on the PK 757 Aircraft. PK AirFinance will cause the owner of the PK 757 Aircraft to lease the Aircraft to United; and (7) an agreement on the treatment, under Section 1110 of the Code, of the Amsterdam Aircraft, the PK 757 Aircraft and the operating leases financed by the GE Entities. As a result of the Global Settlement, United expects: (a) access to a $16,000,000 liquidity facility; (b) savings between $50,000,000 to over $100,000,000 in present value; and (c) cash flow savings for 2003 of $50,000,000 and $200,000,000 over a five-year period. A summary of the Global Settlement and Term Sheets are: -- DIP Liquidity Facility This Facility is for working capital and other general corporate purposes. Funds are available in five draw downs commencing May 29, 2003 through July 28, 2003. Interest will accrue at 1-month LIBOR plus 3.30%. The Facility matures on September 30, 2003 and will be secured by a junior interest in 2002 Collateral. -- Amendments The Credit Facilities will be amended to: * extend the maturity for each Series A Loan and Series B Loan by three years; * amend the amortization schedule of the Series A and Series B Loans; and * reduce the Applicable Margin. -- Section 1110 Treatment of GE Entity-financed or leased aircraft is divided into three separate categories: (1) leases on four 737-322 and one 737-500 aircraft will be amended to provide for new monthly lease rates; (2) United will comply with obligations consistent with Section 1110(a) elections; and (3) existing leases between United and GECC for Airbus aircraft will remain intact and unchanged. United will assume the leases before the Effective Date of a Plan; -- Ranger Aircraft GECC will transfer to United 100% of its equity interest in the Ranger Aircraft. GECC will release all junior liens created in GECC's favor against the 2002 Collateral that secure obligations under the Indemnity Agreement. -- EETC Notes GECC will transfer to United all interests in the Series D Certificates for $70,268,000. -- PK 777 Aircraft United will transfer to GECC its equity interest in the PK 777 Aircraft. GECC will lease the PK 777 Aircraft to United. United's obligations will be secured by granting GECC an additional junior security interest in the 2002 Collateral. -- PK 757 Aircraft PK AirFinance will cause a foreclosure of the debtholders' lien on the PK 757 Aircraft and will cause the owner of the PK 757 Aircraft to enter into a new lease with respect to the PK 757 Aircraft to United. -- Fess & Expenses United will reimburse the GE Entities for out-of-pocket fees and expenses incurred in connection with the Global Settlement. (United Airlines Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 609/392-0900) UNOVA INC: Appoints Lydia H. Kennard to Board of Directors ---------------------------------------------------------- UNOVA, Inc. (NYSE:UNA) -- http://www.unova.com-- announced that Lydia H. Kennard will join its board of directors. Kennard, 49, is executive director of Los Angeles World Airports, a position she has held since March 2000, after serving as Interim Executive Director since August 1999. She oversees and manages a system of airports comprised of Los Angeles International, Ontario International, Palmdale Regional, and Van Nuys. Prior to LAWA, Kennard was President/Principal-in-Charge of KDG Development Construction Consulting, a Los Angeles-based firm specializing in land use planning, development, programming, and construction management for public and private sector clients. Kennard is a member of the Board of Trustees of RAND, a nonprofit research and analysis institution, a director of IndyMac Bank, and a member of the UniHealth Foundation Board. She has been a member of the Los Angeles Planning Commission, the California Medical Center Foundation Board and the Equal Opportunity Advisory Council for Southern California Edison. The Los Angeles Chapter of the Women's Transportation Seminar named her 1995 "Woman of the Year." Kennard earned a Bachelor of Arts degree from Stanford, a Master's degree from Massachusetts Institute of Technology and a law degree from Harvard. UNOVA is a leading supplier of automated data collection, wireless networking and mobile computing systems for industrial, distribution and government markets. The company also designs and builds manufacturing systems, primarily for the global automotive and aerospace industries. * * * As previously reported in Troubled Company Reporter, Fitch Ratings affirmed the rating on UNOVA Inc.'s senior notes at 'CCC', and changed the Rating Outlook to Stable from Negative. The change in the rating outlook reflects UNA's success in bringing down debt levels through one-time events and intellectual property settlements, and in reducing costs. UNA's covenants have been amended to provide more room and its free cash flows have improved. It also considers the company's uncertainty in generating cash flows through its core businesses. USG CORP: Wants Blessing to Obtain $100-Million Letter of Credit ---------------------------------------------------------------- Since the Petition Date, USG Corporation and its debtor- affiliates have maintained a very strong position in cash and cash equivalent. As a result, the Debtors have never borrowed under their $350,000,000 DIP Financing Facility and have used only $16,000,000 of that facility for their letter of credit needs. The Debtors do not project any borrowing needs for the remainder of their Chapter 11 cases. However, the Debtors do anticipate letter of credit needs from time to time. "The Debtors need only an LC Facility, rather than a credit facility with borrowing capacity, due to their strong cash position and operational strength," Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, tells the Court. Mr. DeFranceschi explains that Debtors and their subsidiaries had $300,000,000 in cash and marketable securities on a consolidated basis. The Debtors and their subsidiaries have increased that position by more than 150% since that time, as evidenced by their $768,000,000 position in cash and marketable securities reported as of March 31, 2003. The Debtors project that their cash and marketable securities position will increase over time. Accordingly, the Debtors' management determined that the Debtors should endeavor to obtain a more favorable form of financing that would address only their letter of credit needs, lower the cost of satisfying those needs and remove various restrictive operating covenants present in their current DIP Facility. Of the various parties they have approached, the Debtors determined that the option from LaSalle Bank, N.A. is the most attractive option. Thus, the Debtors ask the Court for authority to enter into a $100,000,000 letter of credit facility with LaSalle. The Debtors will grant La Salle a lien on cash that they will pledge from time to time as security for their reimbursement obligations owed for letter of credit issued under the Facility. The Debtors further ask the Court to grant LaSalle relief from stay to exercise its remedies under the Facility without further Court order. A summary of the existing DIP Facility and the LC Facility shows that the terms of the LC Facility are very favorable compared to the existing DIP Facility: Existing DIP Term Facility LC Facility ---- ------------ ----------- Obligors All Debtors USG Commitment $100,000,000 $100,000,000 Availability Subject to a No borrowing borrowing base base; Firm commitment Maturity Date June 2004 June 2006 Commitment Fee 50 basis points 25 basis points LC Fee 200 basis points 50 basis points Fronting Fee For LC Issuances 25 basis points None Administrative $175,00 annually None Agent Fee Covenants Various affirmative None & negative financial & other covenants Events of Default Typical for a Minimal; standard DIP Failure to facility promptly reimburse for LC drawn Security Substantially all Cash or cash of the Debtors' equivalents equal assets to 103% of the face amount of each LC outstanding Mr. DeFranceschi submits that the LaSalle Facility will result in substantial savings for the Debtors and their estates, as well as provide the Debtors with increased flexibility in operating their businesses. The Debtors estimate that the fee savings will approximate $625,000 on an annual basis. Thus, the Debtors have determined that the LC Facility is the most attractive option for them and their estates. (USG Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 609/392-0900) VENUS EXPLORATION: KPMG Resigns as Company's External Auditor ------------------------------------------------------------- By letter dated May 7, 2003 and received by Venus Exploration, Inc., May 8, 2003, KPMG LLP, the independent accountant who was previously engaged to audit the company's financial statements, resigned. KPMG LLP's audit report on the consolidated financial statements of Venus Exploration, Inc and Subsidiary as of and for the years ended December 31, 2001 and 2000, contained a separate paragraph stating "the Company has suffered recurring losses from operations and has a working capital deficiency and a net capital deficiency that raise substantial doubt about its ability to continue as a going concern." Additionally, according to the Company, during its two most recent fiscal years ended December 31, 2001 and 2000, and the subsequent interim periods through May 7, 2003: (A) KPMG LLP did not advise the Company that the internal controls necessary for the development of reliable financial statements did not exist. (B) KPMG LLP did not advise the Company that information had come to its attention that led them to be unable to rely on management's representation or that made them unwilling to be associated with the financial statements prepared by management. (C) KPMG LLP did not advise the Company of the need to expand significantly the scope of its audit, or that information had come to their attention that further investigation might materially impact the fairness or reliability of either previously issued audit reports or the underlying financial statements, and KPMG, LLP did not so expand the scope of their audit or conduct such further investigations. (D) KPMG LLP did not advise the Company that information had come to their attention that they have concluded materially impacts the fairness or reliability of previously issued audit reports or the underlying financial statements or the financial statements issued covering fiscal periods subsequent to the date of the most recent financial statements covered by an audit report. The Company has requested that KPMG LLP furnish it with a letter addressed to the Securities and Exchange Commission stating whether they agree with the above statements. WEIRTON STEEL: Brings-In McGuireWoods LLP as Bankruptcy Counsel --------------------------------------------------------------- Weirton Steel Corporation and its debtor-affiliates seeks the Court's authority to employ the law firm of McGuireWoods LLP as its counsel with regard to the filing and prosecution of this case, and all related matters, effective as of the Petition Date. James T. Gibbons, Weirton's Senior Director on Corporate Development and Strategy, relates that McGuireWoods has extensive experience and expertise in the field of business reorganizations under Chapter 11 of the Bankruptcy Code and has the ability to respond quickly to all legal issues that may arise in this case. The Debtor believes that McGuireWoods is both well qualified and uniquely able to represent it in this case in an efficient and timely manner. Compensation will be payable to McGuireWoods on an hourly basis, plus reimbursement of actual, necessary expenses and other charges incurred by the Firm. The hourly rates charged by McGuireWoods are consistent with the rates charged in comparable non-bankruptcy matters and are subject to periodic adjustments to reflect economic and other conditions. The Firm's current hourly rates are: Partners $220 - 575 Associates 155 - 350 Legal assistants 95 - 200 Mr. Gibbons informs the Court that McGuireWoods holds a $120,000 general retainer for its services and expenses to be rendered or incurred for or on behalf of the Debtor. The Debtor has agreed that McGuireWoods will hold this retainer during the pendency of this case and will apply the retainer against the Firm's final fee application. In addition, the Firm was paid $130,000 by the Debtor for work performed through May 18, 2003. As counsel, McGuireWoods will: A. advise the Debtor with respect to its powers and duties as a debtor-in-possession in the continued management and operation of its businesses and properties; B. attend meetings and negotiate with representatives of creditors and other parties-in-interest; C. take all necessary action to protect and preserve the Debtor's estate, including the prosecution of actions on the Debtor's behalf, the defense of any action commenced against the Debtor, negotiations concerning all litigation in which the Debtor is involved, and objections to claims filed against the estate; D. prepare on the Debtor's behalf all motions, applications, answers, orders, reports and papers necessary to the administration of the estate; E. negotiate and prepare on the Debtor's behalf a plan of reorganization, disclosure statement, and all related agreements and documents, and take any necessary action on behalf of the Debtor to obtain confirmation of the plan; F. represent the Debtor in connection with postpetition financing if obtained; G. advise the Debtor in connection with any potential sale of assets; H. appear before the Court, any appellate courts, and the United States Trustee and protect the interests of the Debtor's estate before the courts and the United States Trustee; I. consult with the Debtor regarding tax, intellectual property, labor and employment, real estate, corporate finance, corporate and securities, and litigation matters; and J. perform all other necessary legal services and provide all other necessary legal advice to the Debtor in connection with this Chapter 11 case. To the best of the Debtor's knowledge, McGuireWoods has not represented the Debtor's creditors, equity security holders, or any other parties-in-interest or their attorneys and accountants, the United States Trustee or any person employed in the office of the United States Trustee, in any matter relating to the Debtor or its estate. McGuireWoods Partner Mark E. Freedlander assures the Court that the Firm does not hold or represent any interest adverse to the Debtor's estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. However, he discloses that McGuireWoods currently represents or in the past has represented these parties in matters unrelated to the Debtor and it's Chapter 11 case: AC Dellovade Inc., Burns International Security Services Inc., CIT Group/Business Credit Inc., Compucom Systems Inc., Consolidated Rail Corporation, Fleet Capital Corporation, GMAC Business Credit LLC, JP Morgan Trust Company N.A., Koppers Industries Inc., KPMG, Norfolk Southern Railway Company, The BOC Group Inc., Transamerica Business Capital Corporation, US Filter Operating Services Inc., and USX Corporation. In a separate application, the Debtor also seeks to employ the law firm of Bailey, Riley, Buch & Harman, L.C. to act as its local counsel. The Debtor believes that McGuireWoods' services will be complementary to, rather than duplicative of, the services to be performed by Bailey Riley. The Debtor is very mindful of the need to avoid duplication of services, and appropriate procedures will be implemented to ensure there is no duplication of effort as a result of its employment of McGuireWoods and local bankruptcy counsel. (Weirton Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392- 0900) WESTERN INTEGRATED: Wants Solicitation Period Extended to Jul 31 ---------------------------------------------------------------- Western Integrated Networks, LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Colorado to extend the time period within which they have the exclusive right to solicit acceptances of their chapter 11 plan. The Debtors want their exclusive solicitation period extended through July 31, 2003. The Debtors report that on February 28, 2003, they filed their Joint Liquidating Chapter 11 Plan. Their Creditors' Committee joined as a plan proponent. However, the U.S. Trustee and the County of Denver object to the Debtors' Disclosure Statement, which the Debtors are diligently revising. The UST has withdrawn its objections and the Committee is negotiating with Denver in an attempt to resolve and settle the County's objection. Western Integrated Networks, LLC, a single source facilities based provider of broadband services to residential and small business customers in certain targeted markets, filed for chapter 11 protection on March 11, 2002 (Bankr. Colo. Case No. 02-13043). Douglas W. Jessop, Esq., at Jessop & Company, P.C. represents the Debtors in their restructuring efforts. WHEELING: Files Third Amended Plan and Disclosure Statement ----------------------------------------------------------- In response to the various objections to the Disclosure Statement and by way of updating previous information already included in the Second Amended Disclosure Statement and Plan, Wheeling-Pittsburgh Steel Corp., and its debtor-affiliates present to the Court their Third Amended Disclosure Statement and Third Amended Plan showing those amendments which they have agreed to make in addition to those described in their responses to the objections to the adequacy of the information in the Second Amended Disclosure Statement. The Debtors' Post-Confirmation Management and Board Prior to the confirmation of the Plan, the Debtors will disclose: (a) the identity and affiliations of any individual proposed to serve, after the Effective Date, as a director or officer of the Reorganized Debtors, and (b) the identity of any "insider" who will be employed and retained by the Reorganized Debtors and the nature of any compensation for such insider. The Board of Directors of Reorganized WPC will consist of 11 members, who will be designated under this procedure: (i) two will be selected by the USWA in consultation with the Debtors; (ii) two will be selected by the Debtors -- one of whom will be the Chief Executive Officer of WPC; (iii) four will be selected by the Noteholders' Committee in consultation with the Debtors; and (iv) three will be selected by the Trade Creditors' Committee in consultation with the Debtors. The Debtors' officers immediately before the Confirmation Date will continue to serve immediately after the Confirmation Date in each of their capacities. The WPC Board of Directors currently consists of four members: (1) Roland L. Hobbs, (2) Ronald LaBow, (3) Robert A. Davidow, and (4) Marvin L. Olshan. The WPSC Board of Directors currently consists of eight members: (1) James G. Bradley, (2) Robert L. Dobson, (3) Ronald LaBow, (4) Marvin L. Olshan, (5) Robert A. Davidow, (6) Roland L. Hobbs, (7) Jim Bowen, and (8) Lynn R. Williams. The principal officers of WPSC are: 1) James G. Bradley -- President and Chief Executive Officer Mr. Bradley was named President and CEO of WPSC on April 22, 1998. Previously, Mr. Bradley was President and CEO of Koppel Steel in Koppel, Pennsylvania, Executive Vice President of Operations of WPSC, a Vice President at International Mill Service in Horsham, PA, and Vice President of Operations of USS/Kobe Steel Company in Lorain, Ohio. 2) Paul J. Mooney -- Executive Vice President and CFO Mr. Mooney joined WPSC on November 5, 1997. Mr. Mooney came to WPSC following 24 years with Price Waterhouse LLP, where he served in a variety of positions, including National Director of Cross-Border Filing Services, Pittsburgh Site Leader in the Accounting and Business Advisory Services Department, Client Service and Engagement Partner, and Senior Manager in Pittsburgh and London. Mr. Mooney is a certified public accountant. 3) Daniel C. Keaton -- Senior Vice President, Human Resources and Public Relations Dan Keaton has been Senior Vice President, Human Resources and Public Relations since 1999. Mr. Keaton joined WPSC in 1981 as Supervisor of Labor Relations at the Steubenville, Ohio plant. Since then, Mr. Keaton has held a number of labor relations and human resources positions, including Director of Human Resources and Director of Labor Relations. Mr. Keaton has been Vice President of Human Resources since 1992. 4) John W. Testa -- Senior Vice President, Chief Restructuring Officer and Corporate Secretary Mr. Testa rejoined the company on June 29, 2001. Before his retirement in 2000 after 36 years of service, Mr. Testa had been a Vice President for more than 20 years, most recently as Vice President of the Office of the Chairman as well as Vice President and Treasurer. Since the filing of the Debtors' Chapter 11 cases, Mr. Testa has been a consultant to WPSC on bankruptcy matters. 5) Harry L. Page -- Vice President, Engineering, Technology, and Metallurgy Harry Page joined WPSC in March 1998 as Vice President, Engineering and Environmental Control. In January 1999, Quality Control was added to his responsibilities and he has served in the position of Vice President, Engineering, Technology, and Metallurgy since that time. Mr. Page joined WPSC from LTV Steel where he was Senior Director, Engineering, Cleveland Works. Mr. Page joined LTV Steel in 1968 and held a series of engineering positions, in Pittsburgh, Indiana and Cleveland, including General Manager, Engineering and Asset Management. 6) Donald E. Keaton -- Vice President, Steel Manufacturing and Procurement Don Keaton was named Vice President, Steel Manufacturing and Procurement on March 27, 2001. Previously, he had served as Vice President, Primary Operations at WPSC since October 12, 1998. His previous responsibility had been Division Manager-Ironmaking at the Steubenville, Ohio complex. Prior to joining WPSC in September 1997, Mr. Keaton was Manager- Ironmaking at AK Steel Corp. in Ashland, Kentucky. 7) Andrew E. Rebholz -- Vice President-Treasurer Andy Rebholz was named Vice President-Treasurer on February 16, 1999. Mr. Rebholz joined the company in 1981 and has served in a variety of financial reporting and accounting positions. Most recently, Mr. Rebholz was Controller and General Manager of Financial Accounting and Taxes. Before joining WPSC Mr. Rebholz had more than 15 years experience in accounting and financial reporting with Pulman, Inc. and Rockwell International. Issuance of New Common Stock to Management Under the terms of the Plan, on or immediately after the Effective Date, shares of the Common Stock of Reorganized WPC representing 10% of the shares of New Common Stock issued and outstanding on such date will be issued to or for the benefit of salaried employees. In addition, under the terms of the Management Stock Incentive Plan to be effective on the Effective Date, shares of New Common Stock totaling 10% of the New Common Stock issued and outstanding on that date on an undiluted basis will be reserved for issuance. On the Effective Date, 1,000,000 shares of New Common Stock, constituting 10% of the New Common Stock to be issued and outstanding on the Effective Date, will be distributed to or for the benefit of salaried employees of Reorganized Debtors, in full satisfaction of the MLA Wage Deferral Claims of such salaried employees. The shares for the salaried employees will be issued in part to one or more qualified employee benefit plans established for the benefit of all salaried employees and the balance would be issued directly to certain senior management personnel or to a non-qualified plan or investment entity for their benefit, with the balance to be allocated based on seniority, compensation and other factors and to be subject to certain vesting conditions as an incentive for retention of such key management personnel. When issued, the shares of New Common Stock will dilute the 10,000,000 shares of the New Common Stock issued and outstanding at the Effective Date. Issuance of Stock to USWA On the Effective Date, 4,000,000 shares of New Common Stock, constituting 40% of the New Common Stock to be issued and outstanding on the Effective Date, will be distributed pursuant to the New Collective Bargaining Agreement in satisfaction of USWA employees' claims under the existing collective bargaining agreement. The shares issued pursuant to the USWA New Collective Bargaining Agreement will be subject to a stockholders or similar agreement, which will contain restrictions regarding the transferability of the shares and provisions regarding voting such shares with respect to the election of directors. Treatment of RDL Deferred Payment Obligations On or before the Effective Date, WPSC and Rio Doce Limited will enter into the RDL Agreement providing for: (a) repayment of the RDL Deferred Payment Obligations in equal monthly installments over a period required to file or serve any request for payment of such statutory fees, not to exceed 18 months from May 1, 2003; and (b) other terms as may be agreeable to Rio Doce Limited, WPSC and the lenders party to the New Credit Agreements. In the absence of such an agreement, the RDL Deferred Payment Obligations will be repaid in accordance with Rio Doce Limited's existing rights. Postpetition Secured Loans The Postpetition Secured Claims -- other than Claims under or evidenced by the DIP Facility -- consist of: (a) the WHX Loans, outstanding in the amount of approximately $7,100,000 as of December 31, 2002; (b) the RDL Deferred Payment Obligations, outstanding in the amount of approximately $5,100,000 as of April 30, 2003; (c) the ODOD Loan, outstanding in the amount of approximately $7,000,000 as of December 31, 2002; (d) the WesBanco Loan, outstanding in the amount of approximately $1,200,000 as of December 31, 2002; and (e) the Fata Hunter Loans, outstanding in the amount of approximately $3,400,000 as of December 31, 2002. IRB Claims Except as expressly provided in the Disclosure Statement as amended, on the Effective Date, with respect to each Allowed Claim in Class 3, at the option of the Debtors: (a) the Debtor will cure any default -- other than a default of the kind specified in the Bankruptcy Code as not requiring cure -- that occurred before or after the Petition Date, the occurrence of which entitled the Person holding such Claim pursuant to any contractual provisions or applicable law to demand or receive accelerated payment of the Claim, and the original maturities of the Claim will be reinstated as such maturities existed before default; and (b) the Plan will not alter the legal, equitable or contractual rights to which such Claim entitles the holder. All amounts that are due and owing, without acceleration, with respect to the IRB Claims on the earlier of the Effective Date or August 17, 2003, including any principal and interest payments which became due in respect to the IRB Claims during these Chapter 11 cases and were not paid by the Debtors, and the full amount necessary to bring the amounts on deposit in the various reserve accounts established under the applicable indentures and other documents in respect to such IRB Claims to the amount required to be maintained in such reserve accounts as of the earlier of the dates specified on the earlier of the Effective Date and August 17, 2003 will be paid in accordance with the terms as set forth in the Plan, and the underlying bond documents -- including the Indenture, the lease agreement and the guaranty agreement - with respect to the IRB Claims, and the Plan will be amended and modified to effect these terms. The Debtors agree to provide the Indenture Trustee with an opinion of Debevoise & Plimpton that the modification and amendment of the underlying bond documents to effect these terms will not adversely affect the exemption from U.S. federal income taxation of interest on the Series A IRBs. Subject to the Restructuring Transactions, any guarantee obligations of the Debtors in respect to the IRB Claims will remain in effect through and after the Effective Date. Nothing in these amended terms is intended or will be construed as altering, impairing or limiting in any way the protections afforded to FBW Leasecorp, Inc. under the Financing Agreement dated September 1, 1999, between the Director of the State of Nevada Department of Business and Industry and FBW Leasecorp, Inc. and other similar provisions contained in the related bond documents which limit FBW Leasecorp, Inc.'s obligation to pay any amounts under the Financing Agreement and related bond documents to the revenues derived from the Debtors under a Lease Agreement dated August 1, 1999. Nothing in these amended terms is intended or will be construed as altering, impairing or limiting in any way the protections afforded to The Industrial Development Authority of Greensville County, Virginia under the Indenture of Trust dated April 1, 1999, between The Industrial Development Authority of Greensville County, Virginia and First Union National Bank, as Indenture Trustee and other similar provisions contained in the related bond documents which limit The Industrial Development Authority of Greensville County, Virginia's obligation to pay any amounts under the Indenture of Trust and related bond documents to the revenues derived from the Debtors under that certain Lease Agreement dated August 17, 1998. The Plan does not alter the rights of any Person holding an Allowed Claim in Class 3 in any collateral securing such Allowed Claim as of the Petition Date and the Lien securing each Allowed Claim are ratified and affirmed. The Debtors estimate the aggregate amount of Allowed Claims in Class 3 to be approximately $7,100,000. Separation of the Pension Plans WHX sponsors a defined benefit plan insured by the Pension Benefit Guaranty Corporation under Title IV of ERISA, which covers substantially all of WHX and the Debtors' employees and is denominated by WHX as a multi-employer pension plan -- PBGC does not agree with this contention. The Debtors are currently participating employers in the WHX Pension Plan. In conjunction with the implementation of the Plan, the Reorganized Debtors will cease to be participating employers under and will separate from the WHX Pension Plan. The terms of the separation will be governed by the WHX Agreement. The terms of a new pension program will be determined through ongoing discussions between the Debtors and the USWA. In addition, the Debtors are participating employers in the Central States, Southeast and Southwest Area Pension Fund, a multi-employer plan. Notwithstanding anything to the contrary contained in the Plan, any liability of the Debtors or any third party to the Central States Plan is left unimpaired under this Plan, will not be discharged and will continue unaltered as if the Chapter 11 cases had not been commenced, nor will any third- party be released from any liability or Claim that Central States may have against that third-party as a result of the Debtors' participation in the Central States Plan. (Wheeling- Pittsburgh Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., 609/392-0900) WILLIAMS: Initial Purchaser Exercises Option on Conv. Debentures ---------------------------------------------------------------- Williams (NYSE: WMB) announced that the initial purchaser of its previously announced private offering of 5.5 percent junior subordinated convertible debentures due 2033 has exercised its option to purchase an additional $25 million of the debentures. The closing for the aggregate $300 million of convertible debentures (which includes the $25 million issued pursuant to the option) is expected to be May 28. Williams intends to use substantially all of the net proceeds from the offering to fund its previously announced repurchase of the convertible preferred stock currently held by a subsidiary of MidAmerican Energy Holdings Company. The convertible debentures being sold to certain institutional investors have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Williams, through its subsidiaries, primarily finds, produces, gathers, processes and transports natural gas. Williams' gas wells, pipelines and midstream facilities are concentrated in the Northwest, Rocky Mountains, Gulf Coast and Eastern Seaboard. As reported in Troubled Company Reporter's Tuesday Edition, Standard & Poor's Ratings Services affirmed its 'B+' long-term corporate credit rating on energy company The Williams Cos. Inc. Ratings on Williams and its subsidiaries were removed from CreditWatch with negative implications, where they were placed July 23, 2002. The outlook is negative. In addition, Standard & Poor's raised its rating on Williams' senior unsecured debt to 'B+' from 'B' Standard & Poor's also assigned its 'B-' rating to $300 million junior subordinated convertible debentures at Williams. The rating on the junior debentures is two notches below the corporate credit rating to reflect structural subordination to the senior debt. Tulsa, Oklahoma-based Williams has about $13 billion in outstanding debt. WINSTAR: Court OKs Ciardi as Chapter 7 Trustee's Special Counsel ---------------------------------------------------------------- Winstar Communications, Inc.'s Chapter 7 Trustee obtained the Court's authority to employ Ciardi, Maschmeyer & Karalis, P.C. as Special Counsel nunc pro tunc to March 17, 2003, to assist in reviewing and prosecuting alleged preference claims that fall within certain limits established by the Trustee. Specifically, Ciardi will: A. investigate preferences due from certain entities; B. recover preferences; and C. provide any other assistance that may be necessary and proper in these proceedings. Compensation will be payable to Ciardi on a one-third contingency basis for all recovered preferences, plus reimbursement of actual, necessary expenses and other charges incurred by Ciardi. (Winstar Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., 609/392-0900) WORLDCOM INC: Obtains Approval for Global Crossing Settlement ------------------------------------------------------------- Worldcom Inc. and its debtor-affiliates obtained the Court's authority to: (a) compromise claims asserted against certain Global Crossing Entities; (b) enter into a settlement agreement with the Global Crossing Entities; and (c) enter into a new Digital Services Agreement and a new Telecommunications Services Agreement for certain Services provided currently to the Global Crossing Entities by WorldCom. Backgrounder WorldCom and its affiliates and certain Global Crossing Entities are parties presently to various agreements relating to the purchase and sale of telecommunications services, most notably, the Wholesale Services/Emerging Markets Digital Services Agreements and a Telecommunication Services Agreement. The Global Crossing Entities are substantial wholesale customers of WorldCom, accounting for annual revenue over $100,000,000. WorldCom asserted prepetition claims for services rendered, including under the Existing Contracts, of over $27,500,000. The Global Crossing Entities disputed over $9,500,000 of the WorldCom claim and asserted certain defenses and set-off rights. Since the Petition Date, the Global Crossing Entities have continued to utilize WorldCom services in the conduct of their postpetition operations. WorldCom and the Global Crossing Entities have had certain disputes concerning the amounts that are due and owing for postpetition services rendered to the Global Crossing Entities. In connection with its Plan, the Global Crossing Entities proposed a $5,600,000 cure payment to WorldCom for assumption of the Existing Contracts and a distribution on account of all prepetition claims. After the Global Crossing Entities made their proposal to resolve prepetition claims, the parties engaged in a protracted and complex claim reconciliation process and negotiation. Ultimately, WorldCom and the Global Crossing Entities were able to reach a settlement of all open issues, by a written agreement, dated March 28, 2003, relating to resolution of WorldCom's prepetition claims, and by a Memorandum of Understanding, also dated March 28, 2003, relating to a resolution of postpetition billing disputes. Viewed together, these agreements evidence a comprehensive resolution of: (a) all prepetition claims asserted by WorldCom against the Global Crossing Entities; and (b) all postpetition billing disputes relating to telecommunications services provided to the Global Crossing Entities after the Petition Date through the February 10, 2003 billing cycle. The Memorandum of Understanding also provides for the execution of a new Digital Services Agreement and a new Telecommunications Services Agreement, each with a two-year term, commencing as of April 1, 2003 and a substantial annual minimum revenue commitment. These agreements enable the parties to avoid the expense, inconvenience and uncertainty of complex, "paper intensive" claims litigation, and establish the framework for a substantial forward business relationship on terms favorable to WorldCom. The settlement amount will be paid through: (a) a $2,275,000 initial payment within five business days of the effective date of the Global Crossing Entities' Plan; and (b) the balance payable in 12 equal and consecutive monthly installments commencing on the first day of the month immediately following the month in which the effective date of the Plan occurs. The Settlement Agreement also provides for accelerated invoice payment terms for a 12-month period following the effective date of the Global Crossing Entities' Plan. Moreover, WorldCom receives a broad release from the Global Crossing Entities of all claims against it through the date of the Settlement Agreement. The Settlement Agreement will result in significant cost savings in terms of legal fees and related expenses, and will remove the uncertainty associated with the numerous pending claim and billing disputes. WorldCom and the Global Crossing Entities believe that the resolution of these disputes will allow the parties to move forward with their business relationship. (Worldcom Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 609/392-0900) WRAPADE MACHINE: Case Summary & Largest Unsecured Creditors ----------------------------------------------------------- Lead Debtor: Wrapade Machine Company, Inc. 280 Midland Avenue Building C-1 Saddle Brook, New Jersey 07663 Bankruptcy Case No.: 03-26995 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- PacTec, Inc. 03-27002 Chapter 11 Petition Date: May 21, 2003 Court: District of New Jersey (Newark) Judge: Rosemary Gambardella Debtors' Counsel: Morris S. Bauer, Esq. Sheryll S. Tahiri, Esq. Ravin Greenberg PC 101 Eisenhower Parkway Roseland, NJ 07068-1028 Tel: (973) 226-1500 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million A. Wrapade Machine's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Winning Combination $177,237 PMR Inc. $38,110 Cuny & Guerber $29,125 Gable Peritz Mishkin & Co. $21,135 Beattle Padovano, LLC $20,377 Ferry Machine Co. $20,324 ABC Crating $17,679 Ann's House $17,550 Sen Jin $17,551 MBNA America $12,444 Gelger Tool $8,906 Pakmatic $8,430 Frazier & Son $7,338 United Van Lines $6,227 O&B Communications $6,225 Betar $6,162 Deitz Co., Inc. $5,419 Industrial Heater Corporation $5,218 Symbio Systems $4,674 Integrated Motion $4,307 B. PacTec's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Wrapade Machine Company Inc. $27,877 * Meetings, Conferences and Seminars ------------------------------------ June 4, 2003 NEW YORK INSTITUTE OF CREDIT 24th Credit Smorgasbord Contact: 212-629-8686; fax 212-629-7788; info@nyic.org June 5-8, 2003 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, MI Contact: 1-703-739-0800 or http://www.abiworld.org June 19-20, 2003 RENAISSANCE AMERICAN MANAGEMENT, INC. & BEARD GROUP Corporate Reorganizations: Successful Strategies for Restructuring Troubled Companies The Fairmont Hotel Chicago Contact: 1-800-726-2524 or fax 903-592-5168 or ram@ballistic.com June 23 and 24, 2003 AMERICAN BANKRUPTCY INSTITUTE Investment Banking Program Assoc. of the Bar of the City of New York, New York, NY Contact: 1-703-739-0800 or http://www.abiworld.org June 26-29, 2003 NORTON INSTITUTES ON BANKRUPTCY LAW Western Mountains, Advanced Bankruptcy Law Jackson Lake Lodge, Jackson Hole, Wyoming Contact: 1-770-535-7722 or http://www.nortoninstitutes.org July 10-12, 2003 ALI-ABA Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Eldorado Hotel, Santa Fe, New Mexico Contact: 1-800-CLE-NEWS or http://www.ali-aba.org July 17-20, 2003 Northeast Bankruptcy Conference AMERICAN BANKRUPTCY INSTITUTE Hyatt Regency, Newport, RI Contact: 1-703-739-0800 or http://www.abiworld.org July 30-Aug. 2, 2003 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton, Amelia Island, FL Contact: 1-703-739-0800 or http://www.abiworld.org September 18-21, 2003 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference The Venetian, Las Vegas, NV Contact: 1-703-739-0800 or http://www.abiworld.org September 12, 2003 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC "Views from the Bench" Georgetown Univ. Law Center, Washington, DC Contact: 1-703-739-0800 or http://www.abiworld.org October 10 and 11, 2003 AMERICAN BANKRUPTCY INSTITUTE Symposium on 25th Anniversary of the Bankruptcy Code Georgetown Univ. Law Center, Washington, DC Contact: 1-703-739-0800 or http://www.abiworld.org October 15-18, 2003 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Sixth Annual Meeting San Diego, CA Contact: http://www.ncbj.org/ November 12-14, 2003 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Emory University, Atlanta, GA Contact: 1-703-739-0800 or http://www.abiworld.org December 3-7, 2003 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference La Quinta, La Quinta, California Contact: 1-703-739-0800 or http://www.abiworld.org February 5-7, 2004 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, CO Contact: 1-703-739-0800 or http://www.abiworld.org March 5, 2004 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West The Century Plaza, Los Angeles, CA Contact: 1-703-739-0800 or http://www.abiworld.org April 15-18, 2004 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriott, Washington, D.C. Contact: 1-703-739-0800 or http://www.abiworld.org May 3, 2004 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference Millennium Broadway Conference Center, New York, NY Contact: 1-703-739-0800 or http://www.abiworld.org June 2-5, 2004 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, MI Contact: 1-703-739-0800 or http://www.abiworld.org June 24-26,2004 AMERICAN BANKRUPTCY INSTITUTE Hawaii Bankruptcy Workshop Hyatt Regency Kauai, Kauai, Hawaii Contact: 1-703-739-0800 or http://www.abiworld.org July 15-18, 2004 AMERICAN BANKRUPTCY INSTITUTE The Mount Washington Hotel Bretton Woods, NH Contact: 1-703-739-0800 or http://www.abiworld.org July 28-31, 2004 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Reynolds Plantation, Lake Oconee, GA Contact: 1-703-739-0800 or http://www.abiworld.org September 18-21, 2004 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference The Bellagio, Las Vegas, NV Contact: 1-703-739-0800 or http://www.abiworld.org October 10-13, 2003 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Seventh Annual Meeting Nashville, TN Contact: http://www.ncbj.org/ December 2-4, 2004 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Marriott's Camelback Inn, Scottsdale, AZ Contact: 1-703-739-0800 or http://www.abiworld.org April 28- May 1, 2005 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriot, Washington, DC Contact: 1-703-739-0800 or http://www.abiworld.org July 14 -17, 2005 AMERICAN BANKRUPTCY INSTITUTE Ocean Edge Resort, Brewster, MA Contact: 1-703-739-0800 or http://www.abiworld.org July 27- 30, 2005 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop Kiawah Island Resort and Spa, Kiawah Island, SC Contact: 1-703-739-0800 or http://www.abiworld.org November 2-5, 2005 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Eighth Annual Meeting San Antonio, TX Contact: http://www.ncbj.org/ December 1-3, 2005 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Grand Champions Resort, Indian Wells, CA Contact: 1-703-739-0800 or http://www.abiworld.org The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. 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 2003. 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 $675 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 ***