/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/030702.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, July 2, 2003, Vol. 7, No. 129 Headlines 360NETWORKS: Committee Sues Cros-Can Industries to Recoup $1.7MM ACHIEVEMENT TEC: Hires Weinberg & Company as New Accountants ADELPHIA COMMS: Names Paul E. Jacobson as VP for Communications ADMIRAL CBO (CAYMAN): S&P Affirms Junk Class Note Ratings at CC ADVANCED OXYGEN: Debt Holders Waive and Release Long-Term Debt AIR CANADA: Labor Pacts Ratified, Cutting Cost by $1.1 Billion AIR CANADA: Jazz Unions Complete Contract Ratification Process AIR CANADA: Airline Pilots Ratify New Labor Contract Agreement AMERCO: Names Squire Sanders Restructuring & Bankruptcy Counsel AMERICAN HOMEPATIENT: Emerges from Chapter 11 Proceedings AMERICAN MILLENNIUM: Shoos-Away Dohan and Company as Auditors AMES DEPARTMENT: Gets Nod to Complete Mansfield Warehouse Sale ANIXTER INT'L: S&P Rates Proposed Senior Unsecured Notes at BB+ ANTARES PHARMA: Commences Trading on OTCBB Effective July 1 ATR SEMINARS: Airline Training Makes BIA Proposal to Creditors BALTIMORE MARINE: US Trustee Appoints Creditors' Committee BIOVEST INT'L: Accentia Acquires Controlling Interest for $20MM BROADBAND WIRELESS: Takes Action to Fulfill Reorganization Plan BUDGET GROUP: US Trustee Amends Creditors Committee Appointments CABLE DESIGN: S&P Affirms BB Corp. Credit & Senior Debt Ratings CABLE DESIGN: Preparing $110MM Convertible Sub. Debenture Offer CHASE MORTGAGE: Fitch Rates Class B-3 and B-4 Notes at BB/B CHIQUITA BRANDS: Completes Puerto Armuelles Fruit Asset Sale CLUBCORP INC: S&P Ratchets Corporate Credit Rating Down to B CONCERT INDUSTRIES: Misses Interest Payment on 8.5% Debentures CONSECO FIN.: Committee Sues Lehman Brothers & Affiliates CONSECO INC: Resolves Claims Dispute with Maxwell E. Bublitz CROSS MEDIA: Secures Nod to Employ Ordinary Course Professionals CWMBS INC: Fitch Rates Class B-3 & B-4 P-T Certificates at BB/B CYTO PULSE: Case Summary & 20 Largest Unsecured Creditors DALEEN TECH: Going Concern Viability May Hinge on Allegiance DEAN FOODS: Will Acquire Interest in Horizon Organic for $216MM DELTA AIR LINES: Closes Employee Stock Option Exchange Program DENALI CAPITAL: S&P Assigns BB Prelim. Class B-2L Note Rating DICE INC: Exits from Bankruptcy & Eliminates $69.4 Mill. of Debt DISC INC: Fails to Comply with Nasdaq Listing Requirements DOBSON COMMS: Declares 13% Preferred Share In-Kind Dividend DVI INC: Fitch Keeps Watch on CCC Senior Unsecured Debt Rating ENCOMPASS SERVICES: Court Clears Wartsila Settlement and Release ENRON CORP: Court OKs Phillips Son's Appointment as Auctioneer EPIC FINANCIAL: Kabani & Co. Replaces Becker as New Accountants E.SPIRE COMMUNICATIONS: Gets Court Nod to Hire ASK Financial FLEMING COS.: Judge Walrath Fixes Reclamation Claim Procedures GENERAL BINDING: Financial Leverage Concerns Spur Low-B Ratings GENERAL BINDING: Completes Sr. Facility Refinancing Transaction GERDAU AMERISTEEL: Closes Note Issue & Drawdown Under Facility GLOBAL CROSSING: Reports Breakeven EBITDA Results for May 2003 GLOBAL CROSSING: Names M. Cromwell as Regional VP of Ent. Sales GLOBAL LEARNING: Taps Whiteford Taylor as Bankruptcy Co-Counsel GLOBALSTAR LP: Olof Lundberg Leaves Company as CEO & Chairman GOODYEAR TIRE: Fitch Places Low-B Ratings on Watch Negative HAYES LEMMERZ: Asks Court to Reclassify Over $1 Mill. of Claims HEADWAY CORPORATE: Files for Chapter 11 Protection in New York HEADWAY CORPORATE: Case Summary & 10 Largest Unsecured Creditors HEALTHSOUTH: Will Hold Creditors & Shareholders Meeting on Mon. KMART CORP: Sues Handleman to Recoup $49MM Critical Vendor Payment KMART: Handleman Will Continue Relationship Despite Lawsuit LEAP WIRELESS: Hires UBS Warburg to Render Financial Advice LEVEL 3 COMMS: Affirms Guidance for Q2 and Full Year 2003 LEVEL 3 COMMS: Offering $250 Million of Convertible Senior Notes MAGELLAN HEALTH: Secures Improved Equity Investment Commitment MARTIN INDUSTRIES: Fails to Meet Form 10-K, 10-Q Filing Deadline MDC CORP: S&P Withdraws BB Credit Rating at Company's Request M/I SCHOTTENSTEIN: April and May New Contracts Jump-Up 23% MIRANT CORP: Bondholders Support June 30 Amended Exchange Offers NAT'L EQUIPMENT: Case Summary & 50 Largest Unsecured Creditors NAT'L STEEL: Judge Squires Clears LaSalle & Tinplate Compromise NATIONAL WINE & SPIRITS: Reports Improved 2003 Financial Results NEENAH FOUNDRY: Gets Additional $110 Mill. Financing Commitments OWENS CORNING: Wants Approval of Insurance Settlement Agreement PEREGRINE SYSTEMS: Reaches Partial Settlement with SEC PG&E CORP: Completed SEC Filings Reflect No Change to Net Income PICCADILLY CAFETERIAS: Pursuing Strategic Options Including Sale PLYMOUTH RUBBER: Delivers Plan to Comply with AMEX Requirements PLYMOUTH RUBBER: Red Ink Flows in Fiscal Second Quarter 2003 REPTRON ELECTRONICS: Reaches Pact to Restructure 6-3/4% Notes RJ REYNOLDS: S&P Cuts Corporate Credit Rating to BB+ from BBB- ROBOTIC VISION SYSTEMS: Deloitte & Touche Resigns as Accountant ROMACORP INC: March 30 Net Capital Deficit Widens to $30 Million SAFETY-KLEEN: Wants to Pay Exit Financing Due Diligence Fees SAGENT TECHNOLOGY: Nasdaq Will Yank Shares Effective Tomorrow SEA CONTAINERS: Exchange Offer for 9.50% & 10.50% Notes Expires SILICON GRAPHICS: Amends Extends Exchange Offer for 11.75% Notes SPIEGEL GROUP: Court Approves KPMG's Engagement as Accountants STRUCTURED ASSET: Fitch Rates Class B-4 and B-5 Certs. at BB/B TANGER FACTORY: Completes Redemption of Outstanding Preferreds THERMOVIEW INDUSTRIES: Restructures Long-Term Debt & Preferreds TOP-FLITE GOLF: Selling Major Assets to Callaway Golf for $125MM TOUCH AMERICA: Wants to Sell Assets to 360networks for $28MM TRANSDIGM INC: S&P Removes Low-B Ratings from CreditWatch TSI TELSYS: March 28, 2003 Balance Sheet Upside-Down by $445K UNITED AIRLINES: Washington Airport Demands $2.8 Million Payment UNITED AUBURN: S&P Assigns BB- Rating to $215MM Senior Bank Loan UNITED DEFENSE: S&P Ups Corporate Credit Rating to BB from BB- U.S. STEEL: Names Anton Lukac as Plant Manager at Clairton Works VICWEST CORP: Canadian Court Extends CCAA Protection Until Today WEIRTON STEEL: Solid Waste Seeks Relief from Utility Injunction WESTAR ENERGY: Unit Completes Sale of Protection One Europe WILLIAMS COS.: Completes 2 Asset Transactions for $55 Million WILLIAMS CONTROLS: Completes Review of Strategic Direction WORLDCOM INC: Shareholder Boycott Threat Passes 10,000 Mark W.R. GRACE: Earns Blessing to Hire Deloitte as Tax Advisors * Kirkpatrick Brings-In Two New Partners at Los Angeles Office * Meetings, Conferences and Seminars ********* 360NETWORKS: Committee Sues Cros-Can Industries to Recoup $1.7MM ---------------------------------------------------------------- On June 14, 2001, Cros-Can Industries Ltd. received a fraudulent transfer from 360Fiber Inc. amounting to $1,700,000. Dana L. Weinstein, Esq., at Sidley Austin Brown & Wood LLP, in New York, tells Judge Gropper that on March 26, 2002, the Debtors demanded that Cros-Can return the Fraudulent Transfer. However, Cros-Can failed to return the Fraudulent Transfer. Ms. Weinstein contends that: (a) 360Fiber received less than a reasonable equivalent value in exchange for the Fraudulent Transfer; (b) upon information and belief, any consideration or value for the Fraudulent Transfer was received by an affiliate -- 360Fiber Ltd.; (c) at the time of the transfer, 360Fiber was insolvent; and (d) Cros-Can was the original transferee of the Fraudulent Transfer pursuant to Section 550(a)(1) of the Bankruptcy Code. Accordingly, the Official Committee of Unsecured Creditors, on the Debtors' behalf, seeks a Court judgment that: (a) pursuant to Section 548 of the Bankruptcy Code, declares that the Transfers be and are avoided; (b) declares that Cros-Can pay at least $1,700,000, representing the amount Cros-Can owed, plus interest from the date of the Demand Letter; (c) pursuant to Section 502(d), provides that any and all of Cros-Can's claims against 360Fiber will be disallowed until it repays in full the Transfers, plus all applicable interest; and (e) awards the Committee all costs, reasonable attorneys' fees and interest. (360 Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., 609/392-0900) ACHIEVEMENT TEC: Hires Weinberg & Company as New Accountants ------------------------------------------------------------ On June 6, 2003, Achievement Tec Holdings, Inc., together with its subsidiaries, was acquired by ClickableOil.com, Inc., a Delaware corporation, under a merger agreement. When the Company was acquired by ClickableOil.com, the Company's principal independent accountant, Merdinger, Fruchter, Rosen & Corso, P.C., was dismissed. On June 12, 2003, the Company engaged Weinberg & Company, P.A. as its principal independent accountant. The action to engage Weinberg & Company, P.A. was taken upon the unanimous approval of the Board of Directors of Achievement Tec Holdings. During the last two fiscal years ended December 31, 2001 and December 31, 2000 and through June 6, 2003, MFRC's report on the Company's financial statements was modified by the inclusion of an explanatory paragraph addressing the ability of the Company to continue as a going concern. Effective with the execution of the Merger Agreement with Clickable Oil.com, Inc. on June 6, 2003, the Company has elected to adopt the fiscal year used by Clickable Oil. Accordingly, Achievement Tec Holdings, Inc. has changed its fiscal year end to March 31st. ADELPHIA COMMS: Names Paul E. Jacobson as VP for Communications --------------------------------------------------------------- Adelphia Communications Corporation (OTC: ADELQ) announced that Paul E. Jacobson, deputy communications director for U.S. Senate Majority Leader Bill Frist (R-TN), has been named Vice President of Communications for Adelphia, effective July 7. The announcement was made by Ron Cooper, President and Chief Operating Officer of Adelphia, to whom he will report. In his new role, Mr. Jacobson will be responsible for Adelphia's corporate communications activities ranging from media relations and employee communications to community relations and corporate affairs. Mr. Jacobson, 44, brings to Adelphia 23 years of media and communications experience in cable television, government, the sports and entertainment industries and as a journalist. Before joining Senator Frist's staff, he was Vice President of Corporate Communications at Starz Encore Group of Englewood, Colorado, a provider of premium movie channels to the cable and satellite television industry. "We are pleased that Paul has agreed to return to the Denver area to join our management team," said Mr. Cooper. "He is a talented, well-respected, cable industry communicator, and we look forward to the valuable contributions he will make in support of our efforts to rebuild Adelphia." Mr. Jacobson said, "I welcome the opportunity to return to Denver and become part of the outstanding management team that will lead Adelphia through a successful restructuring." Most recently, Mr. Jacobson was Deputy Communications Director for U.S. Senate Majority Leader Bill Frist (R-Tenn.). In addition to overseeing communications for the Medicare and prescription drug legislation as it moved through the Senate, Mr. Jacobson advised Sen. Frist on communications activities and served as a spokesman on a variety of issues before the Senate. Before returning to public service, Jacobson was Vice President of Corporate Communications at Starz Encore Group. Mr. Jacobson also served as Director of Corporate Communications for Denver-based Ascent Entertainment Group, which owned the NHL Colorado Avalanche and NBA Denver Nuggets, and, through Beacon Communications, produced major theatrical motion pictures. Prior to joining Ascent, he was spokesman for Comsat Corporation, an international satellite company. Previously, Mr. Jacobson served as Deputy Press Secretary then Press Secretary to former U.S. Senator Warren B. Rudman, (R-NH), and served as Rudman's 1986 Senate reelection campaign spokesman. He also served as Deputy Press Secretary to Senate Republican Leader Bob Dole (R-Kansas) and was New England Regional Communications Director for Dole's 1988 presidential campaign. Before entering politics, Jacobson worked as an award-winning radio journalist in New Hampshire. He received a BA in broadcast journalism and political science from Syracuse University's S. I. Newhouse School of Public Communications and Maxwell School of Citizenship in 1980. Adelphia Communications Corporation is the fifth-largest cable television company in the country. It serves 3,500 communities in 32 states and Puerto Rico, and offers analog and digital cable services, high-speed Internet access (Adelphia Power Link), and other advanced services. ADMIRAL CBO (CAYMAN): S&P Affirms Junk Class Note Ratings at CC --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class A-1 and A-2 notes issued by Admiral CBO (Cayman) Ltd., an arbitrage CBO transaction originated in August 1999, and managed by Delaware Investment Advisors. At the same time, the ratings are removed from CreditWatch with negative implications, where they were placed May 29, 2003. In addition, the ratings on the class B-1, B-2, and C notes are affirmed. The lowered ratings reflect factors that have negatively affected the credit enhancement available to support the notes since the ratings were lowered in February 2003. These factors include continuing par erosion of the collateral pool securing the rated notes and a negative migration in the overall credit quality of the assets within the collateral pool. As a result of asset defaults, the overcollateralization ratios have deteriorated since the February 2003 rating action. According to the June 3, 2002 monthly report, the class A overcollateralization ratio was at 99.42%, versus the minimum required ratio of 127% (compared to a ratio of 110.43% at the time of the February 2003 rating action); the class B overcollateralization ratio was at 82.90%, versus its required minimum ratio of 111.0% (compared to a ratio of 92.48% at the time of the February 2003 rating action); and the class C overcollateralization ratio was at 77.61%, versus its required minimum ratio of 100.0% (compared to a ratio of 86.69% at the time of the February 2003 rating action). The credit quality of the collateral pool has deteriorated since the February 2003 rating action. Including defaulted assets, approximately 33% of the assets in the portfolio currently come from obligors rated 'CCC+' or below by Standard and Poor's, and 17.01% of the performing assets come from obligors with ratings on CreditWatch negative. These compare with 30.14% and 17.56%, respectively, at the time of the February 2003 rating action. Standard & Poor's noted that the transaction is failing its Trading Model Test, a measure of the overall credit quality within the portfolio and its ability to support the ratings initially assigned to the liability tranches issued by the CDO. The transaction's failure to remain in compliance with the Trading Model Test reflects a reduction in the par value of the assets within the portfolio relative to the balance of the outstanding liabilities. Standard & Poor's has reviewed the results of the current cash flow runs generated for Admiral CBO (Cayman) Ltd. to determine the level of future defaults the rated tranches can withstand under various stressed default timing and interest rate scenarios, while still paying all of the rated interest and principal due on the notes. After the results of these cash flow runs were compared with the projected default performance of the performing assets in the collateral pool, it was determined that the ratings currently assigned to the class A notes were no longer consistent with the amount of credit enhancement available, resulting in the lowered ratings. Standard & Poor's will continue to monitor the performance of the transaction to ensure that the ratings reflect the amount of credit enhancement available. RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE Admiral CBO (Cayman) Ltd. Rating Class To From Balance (mil. $) A-1 A+ AA/Watch Neg 148.267 A-2 B- BB+/Watch Neg 47.5 RATINGS AFFIRMED Admiral CBO (Cayman) Ltd. Class Rating Balance (mil. $) B-1 CC 14.0 B-2 CC 25.0 C CC 16.0 ADVANCED OXYGEN: Debt Holders Waive and Release Long-Term Debt -------------------------------------------------------------- Advanced Oxygen Technologies, Inc. (OTC Bulletin Board: AOXY) announces that pursuant to a Waiver Agreement of June 26, 2003, the long debt holders waived and relinquished all right, to collect from AOXY the debt owed to each of the Debt Holders by Advanced Oxygen Technologies, Inc., plus any interest earned thereon. In consideration of the release of the AOXY, AOXY will compensate the Debt Holders by assigning, transferring and distributing a database and all rights thereto, to the Debt Holders. Advanced Oxygen's March 31, 2003 balance sheet shows a working capital deficit of about $277,000 and a total shareholders' equity deficit of about $130,000. AIR CANADA: Labor Pacts Ratified, Cutting Cost by $1.1 Billion -------------------------------------------------------------- With ratification of all Air Canada's labor agreements in Canada now completed, Air Canada will achieve permanent labor cost reductions of $1.1 billion. Monday, the Air Canada Pilots Association (ACPA) representing the airline's 3,150 mainline pilots confirmed that its members have ratified their agreement with an 87 per cent majority. In addition, Air Canada finalized tentative agreements with the International Brotherhood of Teamsters representing employees in the United States realizing cost savings of $11 million. Tentative agreements have also been reached with AMICUS and Transport and General Workers' Union representing employees in the United Kingdom that will realize approximately $22.8 million in cost savings. Over the past three weeks agreements were ratified with the International Association of Machinists and Aeropace Workers (IAMAW) representing 11,000 technical operations and airport ground service personnel, CUPE representing 6,700 flight attendants, the CAW Airline Division, representing 6,000 customer sales and service agents and crew schedulers and CALDA, representing the airline's 100 flight dispatchers. Agreements were also ratified with all unions representing Air Canada Jazz employees - the Airline Pilots Association (ALPA), CALDA, CUPE and Teamsters Canada. "I salute the people of Air Canada and Air Canada Jazz and thank them for taking this necessary step in the face the most adverse market conditions this industry has ever seen," said Robert Milton, President and Chief Executive Officer. "The ratification of our labour agreements is a lynchpin to demonstrate to other stakeholders that the people of Air Canada are willing to fight for our company's future. By joining together, Air Canada's people have sent a powerful message to other stakeholders in Air Canada's restructuring. With the solid support of its employees and their union leadership, Air Canada will emerge from CCAA stronger and well positioned to compete profitably in the new environment." "Clearly, Air Canada's employees are also saying that it is business as usual for Air Canada's customers. On their behalf, I thank our customers for their continued support and encourage them to continue booking Air Canada with confidence," he said. AIR CANADA: Jazz Unions Complete Contract Ratification Process -------------------------------------------------------------- Air Canada Jazz announced that all four of its unions, representing six different employee groups, have ratified new agreements with the company to reduce costs and increase productivity. In finalizing these agreements, Jazz has achieved total annualized labor and management cost reductions of $110 million. "This is a significant achievement and an important milestone as we restructure our company," said Joseph Randell, President and Chief Executive Officer. "These agreements are critical to Jazz's emergence as a highly competitive, low-cost airline and provide a solid foundation for our ongoing restructuring. I applaud the commitment shown by Jazz unions and our employees. We will continue working together to return Jazz to profitability." Approximately 3,500 of the 4,000 Jazz employees are represented by four unions: Canadian Air Line Dispatchers Association (CALDA), representing dispatchers; Teamsters Canada, representing flight attendants; Air Line Pilots Association (ALPA), representing pilots; and Canadian Auto Workers (CAW), representing airport staff, maintenance workers and crew schedulers. The total union combined contribution is $93 million in annualized savings. Air Canada Jazz is Canada's second largest airline operating a fleet of over 90 aircraft including Dash 8, Bombardier CRJ and British Aerospace 146 aircraft throughout Canada and the United States. AIR CANADA: Airline Pilots Ratify New Labor Contract Agreement -------------------------------------------------------------- The Air Canada Pilots Association (ACPA) membership has ratified their new contract agreement, with 87% of the votes being cast in favor of the deal. Over 88 % the pilot membership cast their ballot. The six-year contract, which runs to July 1, 2009, has been pursued as part of Air Canada's restructuring under the Companies' Creditors Arrangement Act (CCAA). As a result of the agreement, the Air Canada pilots will provide Air Canada with approximately one third of the total labor savings that the company had been seeking. In the new contract the Air Canada pilots have agreed to a 15% reduction on their pay scales, as well as changes in their working rules designed to provide Air Canada additional operational flexibility and cost savings. It is also expected that 317 Air Canada pilots will be laid off over the next six months. "We are pleased to report that our pilots have accepted the deal," said Captain Don Johnson, President of the Air Canada Pilots Association. "The ratification of this deal - and the high turn out for the vote - demonstrates that, collectively, our members recognise the severity of the issues facing Air Canada and are willing to do what it takes to get our company back to a profitable footing." "Our Association has been committed to work with all parties and stakeholders to achieve a successful resolution of the restructuring process," said Captain Johnson. "[Mon]day our members have clearly renewed that commitment. Now all the employee groups have ratified their agreements and it is time for the remaining stakeholders to contribute their part. We challenge all stakeholders in this restructuring to move on with finding the solutions needed to take Air Canada through this difficult period and towards a much brighter future." The Air Canada Pilots Association is the largest professional pilot group in Canada, representing the approximately 3300 pilots who operate Air Canada's mainline fleet. AMERCO: Names Squire Sanders Restructuring & Bankruptcy Counsel --------------------------------------------------------------- Pursuant to Sections 327(a) and 329 of the Bankruptcy Code, AMERCO seeks the Court's authority to employ Squire, Sanders & Dempsey LLP as its restructuring and bankruptcy counsel. Andrew A. Stevens, Chief Financial Officer of AMERCO, states that Squire Sanders is particularly suited to serve as AMERCO's lead restructuring counsel in this case. With more than 750 attorneys in 29 offices worldwide, Squire Sanders has broad-based practice groups with expertise in virtually all areas of law that may be significant in this case, including bankruptcy and restructuring, corporate finance, regulatory and commercial litigation. Moreover, Squire Sanders possesses nationally-recognized expertise in bankruptcy matters, having been actively involved in major Chapter 11 cases, including, most recently that of Enron, Worldcom, Drug Emporium, Kaiser and National Airlines, Inc. Moreover, Mr. Stevens reports, Squire Sanders also has obtained a detailed familiarity with AMERCO's business, capital structure and financial affairs through its prepetition representation of AMERCO and several of its non-debtor affiliates, including U-Haul International. Squire Sanders has represented AMERCO's affiliates for years in matters involving corporate finance, litigation and regulatory matters. Most recently, AMERCO engaged Squire Sanders to help plan and implement its restructuring and to serve as general bankruptcy counsel in this case. As AMERCO's counsel, Squire Sanders will: (a) Advise AMERCO with respect to its powers and duties as debtor-in-possession in the continued management and operation of its business and property; (b) Attend meetings and negotiating with representatives of creditors and other parties-in-interest and advising and consulting on the conduct of this Chapter 11 case, including all of the legal and administrative requirements of operating in Chapter 11; (c) Assist AMERCO with the preparation of its Schedules of Assets and Liabilities and Statements of Financial Affairs; (d) Advise AMERCO in connection with any contemplated sales of assets or business combinations, including the negotiation of asset, stock, purchase, merger or joint venture agreements, formulation and implement appropriate procedures with respect to the closing of any transactions and counseling the Debtor in connection with the transactions; (e) Advise AMERCO in connection with any postpetition financing and cash collateral arrangements and negotiating and drafting documents relating thereto, providing advice and counsel with respect to related prepetition financing arrangements, and negotiating and drafting documents; (f) Advise AMERCO on matters relating to the evaluation of the assumption, rejection or assignment of unexpired leases and executory contracts; (g) Advise AMERCO with respect to legal issues arising in or relating to its ordinary course of business including attendance at senior management meetings, meetings with AMERCO's financial and turnaround advisors and meetings of the Board of Directors; (h) Take all necessary action to protect and preserve AMERCO's estate, including the prosecution of actions on its behalf, the defenses of any actions commenced against it, negotiations concerning all litigation in which AMERCO is involved and objecting to claims filed against AMERCO's estate; (i) Prepare, on AMERCO's behalf, all motions, applications, answers, orders, reports and papers necessary to the administration of the estate; (j) Negotiate and prepare, on AMERCO's behalf, a plan of reorganization, disclosure statement and all related agreements or documents and taking any necessary action on AMERCO's behalf to obtain plan confirmation; (k) Attend meetings with third parties and participating in negotiations with respect to bankruptcy case matters; (l) Appear before the Court, any appellate courts and the U.S. Trustee and protecting the interests of the AMERCO's estate before the Court and the U.S. Trustee; and (m) Perform all other necessary legal services and providing all other necessary legal advice to AMERCO in connection with this Chapter 11 case. Craig D. Hansen, Esq., a partner in Squire, Sanders & Dempsey, informs Judge Zive that AMERCO paid Squire Sanders $50,000 prior to the Petition Date as a retainer for prepetiton services. As of the Petition Date, Squire Sanders was paid for all known prepetition fees and expenses -- a total of $666,472. Thus, the $50,000 Retainer remained unapplied as of the Petition Date. However, Squire Sanders reserved the right to apply certain amounts of the Retainer to fees and expenses accrued prepetition but not discovered or otherwise accounted for until after the Petition Date. Squire Sanders will retain all remaining amounts of the Retainer in trust during the pendency of this case to be applied to any professional fees, charges and disbursements that remain unpaid at the end of this case. Mr. Hansen relates that Squire Sanders will provide AMERCO with periodic invoices for services rendered and disbursements incurred in accordance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules and the Local Bankruptcy Rules for the District of Nevada and this Court. During the course of this Chapter 11 case, the issuance of periodic invoices will constitute requests for interim payment against the total reasonable fees and reimbursement expenses to be determined at the conclusion of this case. For professional services, Squire Sanders' current customary hourly rates are: Legal Assistants $75 - 150 Associates 110 - 310 Partners 190 - 575 Consistent with Squire Sanders' policy, it will continue to charge AMERCO for all other services provided and for other charges and disbursement incurred in the rendition of services. The disbursements include, among other things, costs for telephone charges, photocopying, travel, business meals, computerized research, messengers, couriers, postage, witness fees and other fees related to trials and hearings. Mr. Hansen assures the Court that Squire Sanders does not hold or represent an interest adverse to AMERCO's estate. Squire Sanders is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, with respect to the matters for which it is to be retained. In addition, Squire Sanders' professionals do not have any connection with AMERCO or its affiliates, its creditors, its estate, any U.S. District Judge or Bankruptcy Judge for the District of Nevada, the U.S. Trustee or any person employed in the Office of the U.S. Trustee for Region 17, or any other party-in-interest, or their respective attorneys and accountants. * * * On an interim basis, the Court authorizes AMERCO's employment of Squire Sanders as its attorneys as of June 20, 2003, pursuant to Sections 327(a) and 329 of the Bankruptcy Code. (AMERCO Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392- 0900) AMERICAN HOMEPATIENT: Emerges from Chapter 11 Proceedings --------------------------------------------------------- American HomePatient, Inc. (OTCBB: AHOM) has successfully emerged from bankruptcy protection effective Monday, pursuant to the previously announced order by the U.S. Bankruptcy Court for the Middle District of Tennessee confirming the Company's plan of reorganization under Chapter 11 of the United States Bankruptcy Code. The Bankruptcy Court rejected a motion from the Company's secured lenders requesting a stay of the ruling pending an appeal by the secured lenders. The secured lenders then requested a stay of the ruling from the United States District Court for the Middle District of Tennessee, which also rejected the request Sunday. The secured lenders have appealed the Court's order confirming the plan. As previously announced, the confirmed plan allows the Company to continue its business operations uninterrupted, led by its current management team, and accomplishes the Company's primary goal of restructuring its long term debt obligations to its secured lenders. In addition, the confirmed plan provides that the Company's shareholders retain their equity interest in the Company, and all of the Company's creditors and vendors will be paid 100% of all amounts they are owed, either immediately or over time with interest. In other news, AHP also has received notice from NASDAQ that its common stock has resumed trading on the Over the Counter Bulletin Board (OTCBB). The Company's common stock had temporarily traded on the National Quotation Service Bureau (NQS), commonly known as the Pink Sheets. Trading of the Company's common stock on the OTCBB will be conducted under its current symbol, AHOM. Founded in 1983, American HomePatient, Inc. is one of the nation's largest home health care providers with 287 centers in 35 states. Its product and service offerings include respiratory services, infusion therapy, parenteral and enteral nutrition, and medical equipment for patients in their home. Additional information about the Company is available at http://www.ahom.com AMERICAN MILLENNIUM: Shoos-Away Dohan and Company as Auditors ------------------------------------------------------------- On May 26, 2003, American Millennium Company, Inc. notified its accountants, Dohan and Company PA, CPA's, that they were being dismissed as the Company's independent auditors. The Company's Board of Directors made the decision to change accountants. Dohan and Company PA, CPA's auditor's report on the financial statements of the Company for the years ended July 31, 2002 and 2001, contained a going concern emphasis paragraph describing substantial doubt about American Millennium's ability to continue as a going concern. On May 26, 2003, the Company engaged the firm of Gelfond Hochstadt Pangburn, P.C. as the Company's independent auditors. AMES DEPARTMENT: Gets Nod to Complete Mansfield Warehouse Sale -------------------------------------------------------------- U.S. Bankruptcy Court Judge Gerber permitted Ames Department Stores, Inc., and its debtor-affiliates to consummate the sale of certain real property and warehouse facility located in Mansfield, Massachusetts to AMB Institutional Alliance Fund II, L.P. The Debtors received no other bids for the Assets. * * * Backgrounder Ames Department Stores, Inc., and its debtor-affiliates own a distribution center located at 305 Forbes Boulevard in Mansfield, Massachusetts. The Property consists of 47 acres of land and contains 275,000 square feet of rentable space, including loading bays and all of the equipment at the Property. The Purchase Agreement The substantive terms and conditions of the Purchase Agreement are: A. Assets To Be Sold The Debtors will sell: (a) The Land and the Improvements and all easements, tenements, rights, licenses, privileges and appurtenances associated with the Distribution Center; (b) All equipment and furnishings and all other tangible personal property they own and located on the Premises on the Closing Date. B. Purchase Price $18,000,000, which will be payable in cash through: (a) a $1,800,000 deposit that AMB delivered to the Debtors' co-counsel after executing the Purchase Agreement; and (b) a $16,200,000 balance that will be paid in cash at the Closing, subject to prorations and adjustments. C. Closing Closing on the sale of the Property to AMB is to occur on the fifth business day after all conditions precedent in the Purchase Agreement have been satisfied or waived, but no event later than June 9, 2003. Mr. Lissy asserts that AMB's offer is by far the best. Mr. Lissy notes that the Debtors have considered that: (a) the sale of the Property will enable the Debtors to realize $18,000,000; (b) the Property has been actively marketed and the Purchase Agreement represents the best firm offer that the Debtors have been able to obtain so far; and (c) the Property is no longer needed for the Debtors' operations and consequently, its continued maintenance requires the payment of continuing cots without any corresponding benefit to the Debtors. (AMES Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., 609/392-0900) ANIXTER INT'L: S&P Rates Proposed Senior Unsecured Notes at BB+ --------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB+' to Anixter International Inc.'s proposed $305 million zero-coupon convertible senior unsecured notes due 2033 (about $125 million net proceeds). In addition, Standard & Poor's affirmed its 'BBB-' corporate credit rating on Anixter International Inc. and subsidiary Anixter Inc. The rating on Anixter International's $305 million senior unsecured LYONs reflects the effective subordination of the holding company debt to debt at Anixter International's wholly owned operating subsidiary Anixter Inc. Chicago, Illinois-based Anixter is a leading distributor of wiring systems for voice, data, and video. The outlook is negative. The company benefits from its global capabilities, despite participating in relatively narrow market segments. Revenues are not expected to significantly improve in the near term, reflecting economic weakness and lower levels of technology spending. Despite weak industry conditions, Anixter has effectively managed its cost structure and working capital levels, resulting in positive free operating cash flow and debt reductions. The proposed issue is expected to be used primarily to repay existing debt. "A sustained deterioration in debt protection measures could lead to lower ratings," said Standard & Poor's credit analyst Martha Toll-Reed. ANTARES PHARMA: Commences Trading on OTCBB Effective July 1 ----------------------------------------------------------- Antares Pharma, Inc., announced that a Nasdaq Listing Qualifications Panel determined to delist the Company's securities from The Nasdaq SmallCap Market effective with the open of business on Tuesday, July 1, 2003. Previously, the Company requested an exception to certain of Nasdaq's continued listing requirements. As part of its decision, the Panel notified the Company that its shares of common stock was immediately eligible for quotation on the OTC Bulletin Board effective with the open of business on Tuesday, July 1, 2003. The OTC symbol assigned to the Company is ANTR. The Panel's decision followed a review on May 29, 2003, with regard to the Company's compliance with Nasdaq's minimum bid price and shareholders' equity requirements. The Panel acknowledged that the Company had regained compliance with the bid price requirement, but had failed to regain compliance with the shareholders' equity requirement. Antares Pharma develops pharmaceutical delivery systems, including needle-free and mini-needle injector systems and transdermal gel technologies. These delivery systems are designed to improve both the efficiency of drug therapies and the patient's quality of life. The Company currently distributes its needle-free injector systems in more than 20 countries. In addition, Antares Pharma conducts research and development with transdermal gel products and currently has several products in clinical evaluation with partners in the US and Europe. The Company is also conducting ongoing research to create new products that combine various elements of the Company's technology portfolio. Antares Pharma has corporate headquarters in Exton, Pennsylvania, with manufacturing and research facilities in Minneapolis, Minnesota, and research facilities in Basel, Switzerland. For more information, visit Antares Pharma's Web site at http://www.antarespharma.com Antares Pharma's March 31, 2003 balance sheet shows a working capital deficit of about $4 million and a total shareholders' equity deficit of about $3 million. ATR SEMINARS: Airline Training Makes BIA Proposal to Creditors -------------------------------------------------------------- Airline Training International Ltd. (TSX VENTURE EXCHANGE:ATS) announced the board of directors of A.T.R. Seminars Inc., a wholly owned subsidiary of Airline Training International has passed a resolution to file a notice of intention to make a proposal and to submit a proposal to creditors of ATR under the Bankruptcy and Insolvency Act. Robert Gilson, President of Airline Training International Ltd. Said, "The continuing economic uncertainties of the airline industry have adversely effected the ability of our subsidiary company, A.T.R. Seminars Inc., to meet its ongoing financial obligations at this time. ATR, as have many other flight schools offering commercial pilot training programs, has been significantly effected by the upheaval of the airline industry. We have noticed a substantial decline in the number of students enrolling in ATR's commercial flight training programs, despite increased marketing efforts. Additionally, adverse weather conditions during the winter and spring of 2003 at ATR's training facility at the Toronto City Centre Airport resulted in lower than budgeted flying hours by both commercial and recreational student pilots, which substantially decreased anticipated revenues to ATR. Airline Training International Ltd. has continued to supported the operations of ATR over the past months by way of loans and other financial assistance, and management of the company has actively been seeking additional capital by way of outside investors, however, at this time, given the uncertainties in industry, it was determined that a proposal to creditors under the Bankruptcy and Insolvency Act by ATR offers the best chance for ATR to continue in operation." Mintz and Partners Limited has been appointed Trustee under the proposal to be made by ATR to receive moneys payable under the proposal and to make distributions to creditors of ATR. ATR has appointed Geoff Reed to act as interim restructuring officer to act on behalf of the company with respect to the proposal. Anthony Wilshere and Carlos Monsalve resigned as directors and Robert Gilson resigned as President of A.T.R. Seminars Inc., effective June 30, 2003. BALTIMORE MARINE: US Trustee Appoints Creditors' Committee ---------------------------------------------------------- The United States Trustee for Region 4 appointed five creditors to serve on an Official Committee of Unsecured Creditors in Baltimore Marine Industries, Inc.'s Chapter 11 case: 1. International Association of Machinists & Aerospace Workers and Lodge S-33 c/o Fred Perillo, Esquire 1555 N. River Center Drive, Suite 202 Milwaukee, WI 53212 Phone: (414) 271-4500 Fax: (414) 271-6308 email: FP@Previant.com 2. RAM Contracting Services, LLC c/o Andrew Rodriguez, President 106 Dekitt Circle Daphne, AL 36526 Phone: (251) 625-2625 Fax: (251) 625-0334 email: RAMServicesLLC@aol.com 3. Waste Management of Maryland - Baltimore c/o Clayton A. Mitchell, Esquire Hoon & Associeates, LLC 104 S. Cross Street Chestertown, MD 21620 Phone: (410) 778-6600 Fax: (410) 778-6637 email: pwhesq@dmv.com 4. Harbor Tech, Inc. c/o Michael A. Ortt, President 825 N. North Point Road Baltimore, MD 21237 Phone: (410) 325-7080 Fax: (410) 325-7082 5. Dunbar Guard, Inc. c/o C. Martin Fisher, Chief Financial Officer 50 Schilling Road, Hunt Valley, MD 21031 Phone: (410) 229-1960 Fax: (410) 229-1961 email: 1960@dunbararm.com The Committee selects Andrew Rodriguez as their Chairman and engages Douglas S. Draper, Esq. at Heller, Draper, Hayden, Patrick & Horn, LLC as its Counsel. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Baltimore Marine Industries, Inc.'s main line of business is ship repair. The Company filed for chapter 11 protection on June 11, 2003 (Bankr. Md. Case No. 03-80215). Martin T. Fletcher, Esq., Cameron J. Macdonald, Esq., and Dennis J. Shaffer, Esq., at Whiteford Taylor & Preston L.L.P., represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $10 million each. BIOVEST INT'L: Accentia Acquires Controlling Interest for $20MM --------------------------------------------------------------- Accentia, Inc., a Hopkins Capital Group portfolio company and Biovest International jointly announced Accentia's acquisition of an 81% equity interest in Biovest for a purchase price of $20 million dollars in cash and notes. Accentia is a privately held specialty pharmaceutical and services company. The closing of this transaction provides additional resources for Biovest, including access to additional working capital infrastructure and biopharmaceutical relationships. Biovest is conducting a pivotal Phase III trial of its personalized therapeutic cancer vaccine for non-Hodgkins lymphoma in cooperation with the National Cancer Institute. Additionally, Biovest plans to expand its core businesses of contract biologic production and manufacturing of cell culture systems using its patented technology. Biovest is currently planning a validated facility for the production of personalized biological therapeutics, integrating its patented and proprietary hollow fiber cell culture systems and processes. Stephane Allard, MD the newly appointed President and CEO of Biovest, stated, "We are delighted to be partnering with Accentia to accelerate development efforts of this personalized therapeutic cancer vaccine and to continue to grow Biovest's core cell culture business." Frank O'Donnell, MD Chairman of Accentia, commented, "As a specialty pharmaceutical company, we are pleased to have the opportunity to support the development of the Biovest autologous non-Hodgkins lymphoma therapeutic cancer vaccine. We believe that this technology will advance the future of personalized, targeted, non-toxic, and efficacious therapies for cancer. The NCI and Biovest are to be congratulated in pioneering the development of this important technology." Biovest International, Inc., is a biotechnology company that develops, manufactures and markets cell culture systems. For the past 10 years the company has been designated, by the National Institutes of Health, as the National Cell Culture Center. Through its proprietary technology, Biovest provides cell culture services to research institutions, biotechnology companies and the pharmaceutical industry. The company is the holder of a Cooperative Research and Development Agreement with the National Cancer Institute for the commercialization of a personalized biologic therapeutic cancer vaccine for the treatment of non- Hodgkins lymphoma. For more information on Biovest go to http://www.Biovest.com Accentia, Inc. is a specialty pharma-services organization that provides comprehensive biopharmaceutical services, including product commercialization, clinical manufacturing, contract sales, and product distribution. For more information on Accentia go to http://www.Accentia.net Hopkins Capital Group, LLC is a private equity fund focused on the development of early-stage significant and disruptive technologies in healthcare. For more information on Hopkins Capital Group go to http://www.hopkinscap.com L.G. Zangani, LLC provides financial public relations service to the Company. As such L.G. Zangani, LLC and/or its officers, agents and employees, receives remuneration for public relations and or other services in the form of monies, capital stock in the Company, warrants or options to purchase capital in the Company. Biovest International's March 31, 2003 balance sheet shows a working capital deficit of about $3 million, and a total shareholders' equity deficit of about $1.3 million. BROADBAND WIRELESS: Takes Action to Fulfill Reorganization Plan --------------------------------------------------------------- Broadband Wireless International Corporation (OTC Bulletin Board:BBAN) announced a number of developments that will enable the company to fulfill the plan of reorganization approved by the court on July 30, 2002. In consideration of providing the previously announced insurance guarantee bond to BBAN the Board of Directors was reorganized adding Messrs. Paul Harris, Ben Stanley and John Walsh, joining Keith McAllister, Dr. Ron Tripp and William Higgins. An offering of the "Arkansas Timber Commodity" was presented to BBAN by Paul Harris and Ben Stanley to be used to create liquidity for the company. The board effected a transaction on June 24th and has acquired a significant amount of timber acreage and a timber purchase contract with International Paper Company in Arkansas (Cutting process to begin on July 20th, 2003). The Certified Professional Forester report values the acreage at above $31 million dollars. The board passed a resolution to ledger, originate and release the "Arkansas Timber Commodity offering" and add the Timber Deeds held in safe keeping at Hancock Bank in Gulfport, Mississippi on behalf BBAN, and the Insurance Guarantee Bond held in safe keeping at Republic Bank & Trust in Oklahoma on behalf BBAN as assets to the Broadband Wireless International Corporation. The imminent funding from these activities will fulfill the plan of reorganization approved by the court on July 30th, 2002. With the plan fulfilled, BBAN will be able to exit Chapter 11 with all debts paid and assets generating cash flow in place and allowing funding for other projects. BUDGET GROUP: US Trustee Amends Creditors Committee Appointments ---------------------------------------------------------------- The United States Trustee amends the appointment of the members of the Official Committee of Unsecured Creditors of Budget Group Inc., to reflect BT North America, Inc.'s resignation effective June 18, 2003. The Committee is now composed of: A. Wells Fargo Bank Minnesota, as Indenture Trustee, Attn: Lisa A. Miller Sixth Street & Marquette Avenue, Minneapolis, MN Tel: (612) 667-1916 Fax: (612) 667-9825 B. R Investments, LDC Attn: Scott McCarty c/o Amalgamated Gadget LP, 301 Commerce St., Fort Worth, TX Tel: (817) 332-9500 Fax: (817) 332-9606 C. Delaware Investments Attn: Carl Mabry 2005 Market Street, Philadelphia, PA Tel: (215) 255-1667 Fax: (215) 255-1296 D. Wilmington Trust Company, as Indenture Trustee Attn: Steven M. Cimalore Rodney Square North, 1100 Market Street, Wilmington, DE Tel: (302) 636-6058 Fax: (302) 651-8882 E. JP Morgan Chase Bank, as Indenture Trustee Attn: Francis J. Grippo, Vice President 15th Floor, 450 West 33th Street, New York, NY Tel: (212) 946-3358 Fax: (212) 946-8430 F. Safelite Glass Corp. Attn: Douglas A. Herron 2400 Farmers Drive, Columbus, OH Tel: (614) 210-9199 Fax: (614) 210-9197 (Budget Group Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 609/392-0900) CABLE DESIGN: S&P Affirms BB Corp. Credit & Senior Debt Ratings --------------------------------------------------------------- Standard & Poors Ratings Services affirmed its 'BB' corporate credit and senior secured debt ratings on Cable Design Technologies Corp. At the same time, Standard & Poor's assigned its 'B+' rating to CDT's proposed $110 million subordinated convertible note offering. The outlook was revised to negative from stable, reflecting weakened profitability combined with a modest increase in leverage. Pittsburgh, Pennsylvania-based CDT had $85 million of debt outstanding as of April 30, 2003. Proceeds from the proposed notes offering are expected to be used to pay down existing $85 million of bank debt in its entirety and to repurchase stock. Funded debt outstanding will increase by approximately $20 million, the difference between net proceeds from the note offering and existing debt outstanding. The note transaction is not expected to add cash to CDT's balance sheet, and the termination of the bank facility will eliminate the revolving credit component, which had availability of $69 million as of April 30, 2003. CDT is expected to replace the revolving credit facility with a new one, albeit at a reduced amount "We expect that cost-cutting actions and stabilization in revenues will lead to improvements in profitability in fiscal 2004," said Standard & Poor's credit analyst Joshua Davis. "However, if market conditions have not stabilized, CDT may not be able to improve profitability, which could result in a lowering of the rating." CABLE DESIGN: Preparing $110MM Convertible Sub. Debenture Offer --------------------------------------------------------------- Cable Design Technologies Corporation (NYSE: CDT) plans to offer, subject to market and other conditions, approximately $110 million aggregate principal amount of its Convertible Subordinated Debentures due 2023 through an offering within the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933 and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act. The number of shares issuable upon conversion of the debentures is to be determined by negotiations between the company and the initial purchaser of the debentures. The company stated that it expects to grant the initial purchaser a 30-day option to purchase up to an additional $16.5 million principal amount of debentures. The company intends to use the net proceeds of the offering (1) to repay approximately $83 million of indebtedness, representing substantially all of the current amount outstanding under the company's bank facilities, (2) for repurchases of up to $20 million of shares of its common stock in negotiated transactions simultaneous with the issuance of the debentures or immediately thereafter in market repurchases and (3) for general corporate purposes. As previously reported in Troubled Company Reporter, Standard & Poor's lowered the corporate credit rating on Cable Design Technologies Corp. to 'BB' from 'BB+'. At the same time, Standard & Poor's assigned a 'BB' rating to CDT's $200 million unsecured credit facility, which expires in January 2005. Also, Standard & Poor's removed its outstanding ratings on CDT from Credit Watch where they were placed on February 1, 2002. Rating outlook was stable. CHASE MORTGAGE: Fitch Rates Class B-3 and B-4 Notes at BB/B ----------------------------------------------------------- Chase Mortgage Finance Trust's $486.3 million mortgage pass- through certificates, series 2003-S3 classes A-1 through A-9, A-X, A-P, and A-R (senior certificates) are rated 'AAA' by Fitch Ratings. In addition, Fitch rates class B-1 ($7.5 million) 'A+', class B-2 ($3.5 million) 'BBB', privately offered class B-3 ($1 million) 'BB' and privately offered class B-4 ($800,000) 'B'. The privately offered class B-5 ($1 million) is not rated by Fitch. The 'AAA' rating on the senior certificates reflects the 2.75% subordination provided by the 1.50% class B-1, 0.70% class B-2, 0.20% privately offered class B-3, 0.15% privately offered class B-4 and 0.20% privately offered class B-5 (not rated by Fitch). Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures and the primary servicing capabilities of Chase Manhattan Mortgage Corporation (rated 'RPS1' by Fitch). The mortgage loans consists of conventional, fully amortizing, 30- year fixed-rate, mortgage loans secured by first liens on one- to four-family residential properties with aggregate principal balance of $500,089,810, as of the cut-off date, June 1, 2003. The mortgage pool has a weighted average original loan-to-value ratio (OLTV) of 65.47% with a weighted average mortgage rate of 5.868%. The mortgage pool has a weighted average OLTV of 65.05%. The weighted-average FICO score of the loans in the pool is 733 and approximately 65.60% and 8% of the mortgage loans possess FICO scores greater than or equal to 720 and less than 660, respectively. Loans originated under a reduced loan documentation program account for approximately 3% of the pool, cash-out refinance loans 20.8%, condominium properties are 4.9%, co-ops are 2%, and second homes are 2.5%. The average loan balance is $499,092 and the loans are primarily concentrated in California (31.6%), New York (15.6%) and Maryland (6.2%). None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. Citibank, N.A. will serve as trustee. Chase Mortgage Finance Corporation, a special purpose corporation, deposited the loans in the trust which issued the certificates. For federal income tax purposes, an election will be made to treat the trust fund as one or more real estate mortgage investment conduits. CHIQUITA BRANDS: Completes Puerto Armuelles Fruit Asset Sale ------------------------------------------------------------ Chiquita Brands International (NYSE: CQB) completed the previously announced sale of its Puerto Armuelles Fruit Co., division to a local worker cooperative led by members of the Armuelles banana workers union. The cooperative also entered into a 10-year contract to sell fruit to Chiquita at market prices. Chiquita is providing the new owners with technical support in agricultural and logistics operations. The purchase price paid to Chiquita for PAFCO's assets was approximately $20 million. Proceeds of the sale include approximately $15 million in cash financed by a Panamanian bank and a $5 million note receivable. The cooperative will repay this $5 million loan from Chiquita by discounting the fruit price during the initial years of the contract by 20 cents per box. Under the sale agreement, Chiquita will pay approximately $20 million to cover the costs of workers' severance and other liabilities. As a result of this sale and productivity improvements taken before the transaction was completed, the company expects its costs related to Armuelles to be approximately $12 million lower in 2003 compared to 2002 levels. Chiquita Brands International is a leading global marketer, producer and distributor of high-quality fresh and processed foods. The company's Chiquita Fresh division is one of the largest banana producers in the world and a major supplier of bananas in North America and Europe. Sold primarily under the premium Chiquita(R) brand, the company also distributes and markets a variety of other fresh fruits and vegetables. For more information, visit the company's Web site at http://www.chiquita.com As reported in the Troubled Company Reporter's April 22, 2003 edition, Standard & Poor's Ratings Services assigned its 'B-' rating to Chiquita Brands' $250 million senior unsecured notes due 2009. Standard & Poor's also assigned its 'B' corporate credit rating to Chiquita. The outlook is positive. The senior unsecured notes were rated one notch below the corporate credit rating, reflecting their junior position to the large amount of secured debt and priority debt at the operating subsidiaries. CLUBCORP INC: S&P Ratchets Corporate Credit Rating Down to B ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on ClubCorp Inc., to 'B' from 'B+'. The rating was removed from CreditWatch where it was placed on Oct. 31, 2002. The outlook is stable. "While the company has completed an important re-financing of its bank debt with mortgage debt, it and other leisure-sector players face an uncertain outlook that makes discretionary cash flow less assured," said credit analyst Andy Liu. Dallas, Texas-based country club and golf resort operator ClubCorp had about $678 million of debt outstanding on March 31, 2003. Concurrent with the rating action, Standard & Poor's withdrew its corporate credit rating on the company. The company's operating performance is still being pressured by the weak economy and low consumer confidence. Like most of its peers in the lodging industry, ClubCorp's golf resorts are experiencing a mild decline in revenue. Overall, assuming the economy does not deteriorate further, the company's revenue and margins from continuing operations could be flat compared to fiscal 2002 results. ClubCorp is continuing its divestiture of public golf facilities, which should generate some cash and enhance margins in the intermediate term. CONCERT INDUSTRIES: Misses Interest Payment on 8.5% Debentures -------------------------------------------------------------- Concert Industries Ltd., has not completed the issuance of common shares in payment of semi-annual interest of $1.05 million due today on the company's 8.5% Convertible Unsecured Subordinated Debentures. In order to complete the issuance of the shares, the company must receive a waiver of default from the holders of its Senior Indebtedness. If the waiver is received prior to the expiry of a 5-day cure period under the Debentures, the company can complete the issuance of shares in satisfaction of the interest due. The company is presently in discussions with its senior lenders regarding the necessary waivers. However, there can be no assurance that such waivers will be obtained. If the company is unable to issue the shares in payment of the interest due, an Event of Default would result under the Debentures. Concert Industries Ltd. is an international technology based company specializing in the development and manufacture of advanced airlaid materials. Concert's products are key components in a wide range of personal care consumer products including feminine hygiene and adult incontinence products. Other applications include pre-moistened baby wipes, disposable medical and filtration applications and tabletop products. CONSECO FIN.: Committee Sues Lehman Brothers & Affiliates --------------------------------------------------------- The Official Committee of Unsecured Creditors of Conseco Finance Corp., and Conseco Finance Service Corporation has filed an Adversary Proceeding against Lehman Brothers, Inc., Lehman Commercial Paper, Inc., Lehman ALI, Inc., Green Tree Finance Corp. V, and Green Tree Residual Finance Corp. 1. Harvey J. Barnett, Esq., at Much, Shelist, Freed, Denenberg, Ament & Rubenstein, explains that the Action arises because Lehman asserts secured claims that should be disallowed due to failure to perfect security interests, receipt of preferential transfers and receipt of unjustified fees on the eve of bankruptcy. For example, Lehman "extracted $21,000,000 in so-called fees and $90,000,000 in additional collateral from the CFC Debtors and the Green Tree Defendants under two 'forbearance agreements,' which Lehman demanded as a prerequisite to continue financing the CFC Debtors and Green Tree." Lehman knew that Green Tree could not continue operations without this capital and would either have to sell itself or file for bankruptcy. Lehman used this knowledge to extract the fees and collateral in return for obviously worthless forbearance agreements. At the same time, Lehman was attempting to orchestrate a sole of the CFC Debtors and Green Tree to a cherry-picked buyer with undisclosed ties to Lehman. Count I Facilities are Secured Loans, not Sales Mr. Barnett explains that Lehman knew that Green Tree V was struggling financially. Lehman offered to buy certain assets from Green Tree V. As part of the Sale Agreement, Green Tree V agreed to buy back its assets at a fixed date for an amount greater than the original purchase price. This structure has exactly the same effect as Green Tree V borrowing money from Lehman at an agreed upon interest rate and pledging the assets as collateral. Therefore, this arrangement was not a true sale, but a secured loan. As proof, Lehman inserted inconsistent language into the Agreement labeling the transaction a "sale" in an effort to avoid the unfavorable treatment that a security interest might receive in a bankruptcy. Count II Substantive Consolidation The CFC Committee wants the estates of Green Tree V and Green Tree Residual Financing Corp. substantively consolidated with CFC's bankruptcy estate to create one common pool of assets and liabilities and a single body of creditors and to extinguish the intercorporate liabilities of the consolidated entities. The CFC Committee points out that CFC created Green Tree at the request and direction of Lehman to serve as "special purpose entities," vehicles created solely to serve as the conduits through which CFC would transact business with Lehman. CFC organized and managed the Green Tree Entities to serve as a conduit for transferring property interests from CFC to Lehman and transferring funds to CFC from Lehman. Lehman has been the only creditor of the Green Tree Entities. Count III Declaratory Relief Lehman is Initial Transferee Around September 2002, Lehman perceived that the CFC Debtors were in dire need of additional financing to avoid bankruptcy. Lehman would only extend additional financing if the CFC Debtors pledged additional property interests and fees. Accordingly, Lehman demanded that CFC sign "forbearance" agreements and pay attendant fees. However, Mr. Barnett alleges that Lehman had no intention of providing adequate financing for the CFC Debtors. Instead, the transaction was designed to extract millions of dollars in fees from CFC and, at the same time, increase the indebtedness and collateral of CFC and Green Tree under the pre-existing loan agreements. Lehman accomplished this while actively pursuing the sale of CFC to a chosen buyer. Specifically, under the forbearance agreements, CFC and Green Tree provided additional collateral worth $90,000,000 and paid $21,000,000 in fees to Lehman, even though Lehman had no intention of providing additional financing. Count IV Declaratory Relief CFC is the Real Party-in-interest The Court should issue a declaratory judgment that pierces the corporate veil of Green Tree V and Green Tree Residual Financing Corp. and holds that CFC is the real party-in-interest under Lehman's financings. Mr. Barnett contends that the Green Tree Entities have served as mere conduits for CFC's business transactions, serving as pass-through mechanisms, transferring CFC's security interests to Lehman and transmitting the funds from Lehman to CFC. The Green Tree Entities had no independent business operations or functions. Count V Avoidance and Recovery Unperfected Security Interests The Committee wants to avoid $410,000,000 in interests that were transferred by CFC but were not properly perfected by Lehman Brothers. Count V Avoidance and Recovery Unperfected Security Interests The Committee wants to avoid $410,000,000 in preferential transfers. The transfers under the various Lehman Loans constitute transfers of CFC's interest in property. However, at the time of these transfers, CFC was "insolvent" for purposes of Section 101(32) of the Bankruptcy Code. Count VI Avoidance and Recovery Preferential Transfers The Committee wants to avoid $410,000,000 in fraudulent transfers. Each of the transfers related to Lehman Loans was made within one year before the Petition Date. However, CFC received less than a reasonably equivalent value in exchange for the Transfers. At the time of the Transfers, Mr. Barnett points out that CFC was insolvent or became insolvent as a result of the transfer and was engaged in a business or transaction for which property remaining with CFC was unreasonably small capital. Count VII Avoidance and Recovery Fraudulent Conveyances According to Mr. Barnett, the Lehman Transfers constituted a transfer of an interest of CFC in property. CFC received less than a reasonably equivalent value or fair consideration in exchange. At the time of the Transfer, CFC was "insolvent" or became insolvent as a result of the transfer and had a creditor holding an allowed unsecured claim. Count VIII (State Law) Avoidance and Recovery Fraudulent Conveyances The Lehman Transfers constituted a transfer of an interest of CFC in property. CFC received less than a reasonably equivalent value or fair consideration in exchange. At the time of the Transfer, CFC was "insolvent" or became insolvent as a result of the transfer and had a creditor with an allowed unsecured claim. Count IX Equitable Subordination The Committee also wants all Lehman claims subordinated to the unsecured creditors of the CFC Debtors and Green Tree Entities. Lehman knew that CFC would not continue as an operating business and embarked on a course to control the disposition of CFC and the Green Tree Entities while failing to disclose the true intentions. Lehman extracted the fees and collateral while disrupting the business with demands for access to CFC's records and facilities. Indeed, Lehman sent 20 employees to perform due diligence on CFC, an arrangement more typical of a prospective purchaser than an ordinary lender. This was to prepare CFC for sale to CFN Investment Holdings, an entity with an undisclosed relationship to Lehman. Count X (Alternative) Equitable Subordination The $21,000,000 in fees extracted by Lehman would have been part of CFC's estate in this proceeding and available for the payment of unsecured creditor claims. However, Lehman was successful in pocketing these funds in exchange for false promises and misrepresentations less than 60 days before the CFC Petition Date. Mr. Barnett says that equity demands that Lehman's claims be subordinated to those of the CFC Committee and other unsecured creditors to the extent, and in the amount, of the $21,000,000 in fees wrongfully earned. Count XI Objection to Proof of Claim The Committee objects to any and all claims asserted by Lehman against the CFC Debtors to the extent Lehman does not turn over property or pay any amount for which they are liable under Section 550 of the Bankruptcy Code or otherwise. (Conseco Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., 609/392-0900) CONSECO INC: Resolves Claims Dispute with Maxwell E. Bublitz ------------------------------------------------------------ Conseco Inc., Conseco Capital Management and CIHC, ask the Court to approve their stipulation with Maxwell E. Bublitz. Mr. Bublitz filed Proof of Claim Nos. 49672-007287 and 49674- 000248 alleging rights and entitlement to indemnification, contribution, reimbursement and other unspecified payments arising out of his performance as the Debtors' officer. James H.M. Sprayregen, Esq., at Kirkland & Ellis, tells the Court that Mr. Bublitz's services and skills are essential to the success of the Debtors' reorganization process and it is beneficial to maintain his presence at the Debtors. In the Stipulation, the Parties agree that: (a) Mr. Bublitz's Claims are withdrawn; (b) the withdrawal does not constitute a waiver of Mr. Bublitz's valid rights of set-off or defenses of any kind; (c) the Stipulation does not constitute an admission of validity of Mr. Bublitz's rights of set-off; (d) the Existing Contract between the Debtors and Mr. Bublitz is terminated with no repercussions; and (e) Mr. Bublitz and CCM will enter a new Employment Agreement. Mr. Sprayregen says that the Stipulation benefits the estate because Mr. Bublitz is withdrawing his Claims. Pursuant to an employment agreement, Mr. Bublitz's employment as CCM's Chief Executive Officer will end on March 31, 2004. Mr. Bublitz will receive $400,000 as annual base salary with the opportunity to earn a Target Bonus of up to $450,000 if financial objectives are met. Mr. Bublitz will be paid a $450,000 immediate cash bonus. CCM will maintain its term life insurance policy on Mr. Bublitz with a $500,000 face amount. (Conseco Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., 609/392-0900) CROSS MEDIA: Secures Nod to Employ Ordinary Course Professionals ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gave its stamp of approval to Cross Media Marketing Corporation and its debtor-affiliates' application to employ the professionals they utilize in the ordinary course of their businesses, without the submission of separate employment applications, affidavits, and the issuance of separate retention orders for each such individual professional. The Debtors obtained Court permission to pay each Ordinary Course Professional, without a prior application to the Court, 100% of the fees and disbursements incurred, upon the submission of an appropriate invoice setting forth in reasonable detail the nature of the services rendered and disbursements actually incurred, up to $25,000 per month, in the aggregate, for all Ordinary Course Professionals. In the event that any individual Ordinary Course Professional seeks more than $20,000 in one month, that professional will be required to file a fee application for the full amount of their fees. The two professionals currently retained are Hall Dickler Kent Goldstein & Wood LLP and Grant Thornton. Hall Dickler has been the Debtors' marketing and FTC compliance counsel and is very familiar with the Debtors' business in this highly regulated industry. Particularly, the Debtor recently entered into a settlement with the FTC, which, in addition to imposing a civil penalty, requires the Debtors' compliance with various FTC regulations and other stipulated restrictions. Many of those restrictions may still be applicable to the Debtors' ongoing collection of receivables. Grant Thornton is the Debtors' auditor and accountant and will continue to perform accounting work, prepare required reports and financial statements and provide tax advise to the Debtors as it has in the past. The continued employment of the Ordinary Course Professionals, who are already familiar with the Debtors' business affairs will avoid disruption of the Debtors' day-to-day business operations and will enable an efficient wind-down of the Debtors' businesses. Cross Media Marketing Corporation is a direct marketer and seller of magazine subscriptions. The Company filed for chapter 11 protection on May 16, 2003 (Bankr. S.D.N.Y. Case No. 03-13901). Jack Hazan, Esq., and Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis & Frankel LLP, represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $91,357,187 in total assets and $77,668,088 in total debts. CWMBS INC: Fitch Rates Class B-3 & B-4 P-T Certificates at BB/B --------------------------------------------------------------- CWMBS, Inc.'s mortgage pass-through certificates, CHL Mortgage Pass-Through Trust 2003-26 classes 1-A-1 through 1-A-6, 2-A-1 through 2-A-4, A-R and PO (senior certificates, $930,524,998) are rated 'AAA' by Fitch Ratings. In addition, Fitch rates class M ($9,975,000) 'AA', class B-1 ($3,325,000) 'A', class B-2 ($2,375,000) 'BBB', class B-3 ($1,425,000) 'BB' and class B-4 ($950,000) 'B'. The 'AAA' rating on the senior certificates reflects the 2.05% subordination provided by the 1.05% class M, 0.35% class B-1, 0.25% class B-2, 0.15% privately offered class B-3, 0.10% privately offered class B-4 and 0.15% privately offered class B-5 (not rated by Fitch). Classes M, B-1, B-2, B-3, and B-4 are rated 'AA', 'A', 'BBB', 'BB' and 'B', respectively, based on their respective subordination. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures and the primary servicing (rated 'RPS1' by Fitch) and master servicing (rated 'RMS2' by Fitch) capabilities of Countrywide Home Loans Servicing LP -, a direct wholly owned subsidiary of Countrywide Home Loans, Inc. The certificates represent ownership in a trust fund, which consists primarily of 2 separate mortgage Loan Groups. Each of the classes 1-A-1 through 1-A-6, A-R, and PO-1 Component (the Group 1 senior certificates), and the classes 2-A-1 through 2-A-4 and PO-2 Component (the Group 2 senior certificates) will receive interest and/or principal from its respective mortgage loan group. If on any distribution date, the available funds from one loan group is insufficient to make distributions of interest and/or principal on that related senior certificate group, available funds from the other loan group, after first making the interest and/or principal distribution on its related senior certificates, will be available to cover shortfalls of interest and/or principal distributions on the loan group's senior certificates, before any distributions of interest and/or principal are made to the subordinate certificates. Loan Group 1, consisting primarily of 30-year fixed-rate mortgage loans, demonstrates an approximate weighted-average original loan- to-value ratio (OLTV) of 69.25%. Approximately 67.04% of the loans were originated under a reduced documentation program. Cash-out refinance loans represent 11.36% of the mortgage pool and second homes 4.79%. The average loan balance is $484,304. The weighted average FICO credit score is approximately 740. The three states that represent the largest portion of mortgage loans are California (60.58%), New Jersey (3.10%) and Illinois (2.58%). The pool is 82.43% funded as of the closing date June 30, 2003. Loan Group 2, consisting primarily of 15-year fixed-rate mortgage loans, demonstrates an approximate weighted-average OLTV of 60.15%. Approximately 43.08% of the loans were originated under a reduced documentation program. Cash-out refinance loans represent 19.04% of the mortgage pool and second homes 3.74%. The average loan balance is $525,078. The weighted average FICO credit score is approximately 748. The three states that represent the largest portion of mortgage loans are California (46.99%), New York (4.77%) and Texas (3.76%). The pool is 100% funded as of the closing date June 30, 2003. The collateral characteristics provided for each loan group above are based off the mortgage loans as of the closing date (June 30, 2003). Fitch ensures that the deposits of subsequent loans conform to representations made by CHL. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. Approximately 96.26% and 3.74%, 92.52% and 7.48% of the mortgage loans as of the closing date in Loan Groups 1 and 2, respectively, were originated under CHL's standard underwriting guidelines and expanded underwriting guidelines, respectively. Mortgage loans underwritten pursuant to the expanded underwriting guidelines may have higher LTVs, higher loan amounts, higher debt-to-income ratios and different documentation requirements than those associated with the standard underwriting guidelines. In analyzing the collateral pool, Fitch adjusted its frequency of foreclosure and loss assumptions to account for the presence of these attributes. CWMBS purchased the mortgage loans from CHL and deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. The Bank of New York will serve as the trustee. For federal income tax purposes, an election will be made to treat the trust fund as multiple real estate mortgage investment conduits. CYTO PULSE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Cyto Pulse Sciences, Inc. P.O. Box 609 Columbia, Maryland 21045 Bankruptcy Case No.: 03-59544 Type of Business: Inventing, developing and manufacturing medical equipment and devices for laboratory applications Chapter 11 Petition Date: June 12, 2003 Court: District of Maryland (Baltimore) Judge: James F. Schneider Debtor's Counsel: Alan M. Grochal, Esq. Stephen M. Goldberg, Esq. Tydings and Rosenberg 100 E. Pratt St., Fl. 26 Baltimore, MD 21202 Tel: 410-752-9700 Fax : 410-727-5460 Total Assets: $1,913,305 (as of June 30, 2002) Total Debts: $19,469,309 (as of June 30, 2002) Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Ichor Medical Systems, Inc. $13,648,750 6310 Nancy Ridge Drive Suite 107 San Diego, CA 92121 Arter & Hadden, LLP $4,304,808 PO Box 75906 Cleveland, Ohio 44101 James H. Laughlin, Jr. $185,212 Rhinehart, Howard E. $90,570 Seltzer Caplan McMahon Vitek $86,516 Joyce, Elizabeth M. $61,138 Gustavson, Paul K. $58,799 MD Bio $57,443 Joyce, Elizabeth M. $56,250 Eljay Division $42,018 Marvin Townsend, Esq. $15,895 The Eager Street Group $14,326 The Hartford $7,705 Petty, Brian T. $6,881 Katten Munchin Zavis Rosenman $6,725 Jones, Kathleen $5,619 Richard Rosenthal, Esq. $4,562 Prime Rate Premium Finance $1,166 MIE Properties, Inc. Unknown DALEEN TECH: Going Concern Viability May Hinge on Allegiance ------------------------------------------------------------ Daleen Technologies, Inc. reports that it has received payment from Allegiance Telecom, Inc., the Company's largest outsourcing services customer, for a portion of amounts due to the Company for services performed prior to the filing by Allegiance on May 14, 2003 for relief under Chapter 11 of the U.S. Bankruptcy Code. The Company also received from Allegiance, on a timely basis, payment for post-petition services provided by the Company. Since the Allegiance filing, the Company has continued to provide outsourcing services to Allegiance in the ordinary course of business between the parties. While the Company anticipates that it will continue to do business with Allegiance while it restructures its operations, there can be no assurance that this business relationship will continue during the course of the Chapter 11 proceedings. If Allegiance ceases to do business with the Company and the Company fails to obtain additional financing or fails to engage in one or more strategic alternatives, it may have a material adverse effect on the Company's ability to operate as a going concern. Daleen Technologies, Inc. is a global provider of high performance billing and customer care software solutions that manage the revenue chain for traditional and next-generation communication service providers, retailers and distributors of digital media, and technology solutions providers. DEAN FOODS: Will Acquire Interest in Horizon Organic for $216MM --------------------------------------------------------------- Dean Foods Company (NYSE: DF) and Horizon Organic Holding Corporation (Nasdaq: HCOW) has signed a definitive agreement by which Dean Foods will acquire the 87% equity interest in Horizon Organic it does not currently own. Dean Foods will purchase the remaining 87% interest in Horizon Organic for a cash price of approximately $216 million, or $24 per share and will assume approximately $40 million in debt. The transaction, which was approved by the board of directors of both companies, is expected to close during the fourth quarter of 2003. The transaction is subject to approval by Horizon Organic's shareholders and expiration of the waiting period under the Hart-Scott Rodino Antitrust Improvements Act. Horizon Organic markets the leading brand of certified organic foods in the United States and the leading brand of certified organic milk in both the United States and the United Kingdom. In 2002, Horizon Organic reported revenues of approximately $187 million, and in April 2003, the company announced that it had reached a milestone of $200 million in annual sales. Horizon Organic's product line in the United States includes organic milk, a full line of organic dairy products and organic juices, pudding, fruit jels and eggs. In the U.K., the company markets and sells organic milk, yogurt and butter under the Rachel's Organic brand. "We are extremely pleased to add the number one organic milk and dairy brand to our portfolio of branded products," said Gregg Engles, Chairman and Chief Executive Officer of Dean Foods. "Our acquisition of Horizon Organic evidences our commitment to the growth of healthy, better-for-you products. We are also very excited to have the opportunity to join forces with the Horizon Organic management team and continue to build upon their passion and commitment to organic foods." "We are very excited about the opportunities the partnership with Dean Foods presents for Horizon Organic, its shareholders, producers, processors, customers and consumers. With Dean Foods' substantial processing, distribution and marketing resources, we look forward to accelerating our growth and strengthening the leadership position of the Horizon Organic brands," said Chuck Marcy, President and Chief Executive Officer of Horizon Organic. "We are especially excited to leverage Dean Foods' unique national refrigerated distribution system, to expand the distribution of Horizon Organic branded milk, dairy and juice products. This will allow us to further support and encourage greater organic milk and organic crop production. We are confident that this combination is the best way to ensure the future growth and extension of both the Horizon Organic and Rachel's Organic brands." "Offering customers both the Horizon Organic and Silk brands within our organic product portfolio makes us the clear leader in the organic category," continued Engles. "Horizon Organic has experienced tremendous growth, and its organic leadership position in both the United States and the U.K. represents a very compelling strategic fit for us." Horizon Organic will continue to be headquartered in Boulder, Colorado and Chuck Marcy will report to Gregg Engles. Dean Foods expects the transaction to be neutral to slightly accretive to earnings in the first full year after closing. In 2004, the financial results of the business will be reported within the Dean Branded Products Group. Horizon Organic Holding Corporation markets the leading brand of certified organic foods in the U.S. and the leading certified brand of organic milk in both the U.S. and the U.K. In the U.S. its products include organic milk, a full-line of organic dairy products, organic eggs and juices. In the U.K., the Company markets organic yogurt, milk and butter under the Rachel's Organic brand. For more information, visit the Company's Web site at http://www.horizonorganic.com Dean Foods Company is one of the nation's leading food and beverage companies. The company produces a full line of company- branded and private label dairy products such as milk and milk- based beverages, ice cream, coffee creamers, half and half, whipping cream, whipped toppings, sour cream, cottage cheese, yogurt, dips, dressings and soy milk. The company is also a leading supplier of pickles and other specialty food products, juice, juice drinks and water. The company operates over 120 plants in 36 U.S. states and Spain, and employs approximately 28,000 people. As previously reported, Fitch Ratings initiated coverage of the New Dean Foods Company assigning a 'BB+' secured credit facility rating and 'B-' trust convertible preferred securities rating. Fitch's rating of the senior unsecured notes that were outstanding prior to Suiza Foods Corporation acquisition, and on Rating Watch Negative have been downgraded to 'BB-' from 'BBB+'. Fitch has also withdrawn the Old Dean Foods commercial paper rating of 'F2', which was also on Rating Watch Negative. DELTA AIR LINES: Closes Employee Stock Option Exchange Program -------------------------------------------------------------- Delta Air Lines (NYSE: DAL) successfully completed its employee stock option exchange program, which expired at 7 p.m. Eastern Time on Wednesday, June 25, 2003. Delta canceled options to purchase approximately 31.6 million shares of its common stock and will issue new options to purchase approximately 12.1 million shares of its common stock in exchange. Approximately 80 percent of the eligible options were exchanged under the program. Under the terms of the offer, Delta expects to grant replacement options on Dec. 26, 2003, the first business day that is at least six months and one day from the expiration of the offer. Delta Air Lines, the world's second largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offers 5,734 flights each day to 444 destinations in 79 countries on Delta, Song, Delta Express, Delta Shuttle, Delta Connection and Delta's worldwide partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. For more information, please go to http://www.delta.com DENALI CAPITAL: S&P Assigns BB Prelim. Class B-2L Note Rating ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Denali Capital CLO III Ltd./Denali Capital CLO III (Delaware) Corp.'s $378.5 million fixed- and floating-rate notes due 2015. The preliminary ratings are based on information as of June 27, 2003. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the following: -- The credit enhancement provided to each class of notes through the subordination of cash flows to more junior classes and preferred shares; -- The transaction's cash flow structure, which has been subjected to various stresses requested by Standard & Poor's; -- The experience of the collateral manager; and -- The legal structure of the transaction, including the bankruptcy remoteness of the issuer. PRELIMINARY RATINGS ASSIGNED Denali Capital CLO III Ltd./ Denali Capital CLO III (Delaware) Corp. Class Rating Amount (mil. $) A-1L AAA 295.0 A-2L AA 18.5 A-3F A- 5.0 A-3L A- 31.0 B-1L BBB 18.0 B-2L BB 11.0 DICE INC: Exits from Bankruptcy & Eliminates $69.4 Mill. of Debt ---------------------------------------------------------------- Dice Inc. (OTC Bulletin Board: DICEQ) emerged from bankruptcy, after the U.S. Bankruptcy Court for the Southern District of New York confirmed the Company's pre-arranged Joint Plan of Reorganization (the "Plan") on June 24, 2003, and all conditions necessary for the Plan to become effective were satisfied or waived. The Plan eliminated all of the Company's outstanding Convertible Subordinated Notes in exchange for the issuance to the noteholders of 19,000 shares, or 95%, of Reorganized Dice Common Stock. As a result, Elliott Associates, L.P. and Elliott International, L.P., will own approximately 46% of Reorganized Dice. "[Mon]day, we have completed our financial reorganization, emerging with a strong market position and capital structure appropriate for our business. As a private company, we will be able to focus all our resources on growing our business and enhancing our services," said Scot W. Melland, chairman and chief executive officer of Dice Inc. "We appreciate the loyalty of our customers, hard work of our employees and support of all stakeholder groups." "We are essentially debt-free, and our business continues to generate positive cashflow. After paying all claims and costs associated with the restructuring process, Dice has more than enough cash to continue to invest in our business and serve our customers," said Michael P. Durney, senior vice president and chief financial officer of Dice Inc. The Plan also provides for the 130 largest holders of old Dice Inc., stock to receive a pro rata allocation of 1,000 shares, or 5%, of Reorganized Dice Common Stock. In addition to their 5% ownership, holders of old Dice Inc., stock who receive new common stock will also receive warrants to acquire an additional 8% of Reorganized Dice Common Stock. These warrants will have an exercise price which would equate to an equity value for the Reorganized Company of $69.4 million in the aggregate. The remaining shareholders will receive a pro rata allocation of $50,000 in cash. Shareholders who would receive less than an aggregate of $5.00 for their shares will not participate in the cash distribution. Under the Plan, all of the Company's outstanding capital stock and options were canceled effective as of the close of business today. Monday, the Company made payments to unsecured trade creditors for the full amount of their allowed claims as determined under the Plan confirmed last week and initiated the process of formally canceling its capital stock and distributing Reorganized Dice Common Stock. The process of distributing new stock and cash to holders of old Dice Inc. stock and exchanging new stock for the Notes as outlined above will take several weeks. Shareholders and noteholders of record will receive communications setting forth the details of the distribution in the next several days. The Company has begun the process of deregistering its existing common stock and, as a result, will be privately held. Dice Inc. (OTC Bulletin Board: DICEQ) -- http://about.dice.com-- is the leading provider of online recruiting services for technology professionals. Dice Inc. provides services to hire, train and retain technology professionals through its two operating companies, dice.com, the leading online technology- focused job board, as ranked by Media Metrix and IDC, and MeasureUp, a leading provider of assessment and preparation products for technology professional certifications. Dice Inc.'s corporate profile can be viewed at http://about.dice.com DISC INC: Fails to Comply with Nasdaq Listing Requirements ---------------------------------------------------------- DISC, Inc. (NASDAQ: DCSR), a manufacturer of automated network storage solutions, received a NASDAQ Staff Determination on June 25, 2003 indicating that DISC has not met the minimum bid price requirement of $1.00 per share in accordance with Marketplace Rule 4310(C)(4) for continued listing, has not met the minimum stockholders' equity, market value of listed securities, or net income from continuing operations requirements in accordance with Marketplace Rule 4310(C)(2)(B) for continued listing and has not paid its 2003 Annual Fee in accordance with Marketplace Rule 4310(C)(13) and the Marketplace Rule 4500 series for continued listing. The NASDAQ Staff Determination further indicated that due to these violations, DISC's securities will be delisted from the NASDAQ SmallCap Market at the opening of business on July 7, 2003. DISC does not plan to appeal the NASDAQ Staff Determination and will seek to become eligible for inclusion on the OTC Bulletin Board. Established in 1986, DISC, Inc., a manufacturer of automated networked storage solutions, delivers an extensive range of products offering scalable, reliable, high-data availability network storage for mission-critical applications. Headquartered in Milpitas, California, DISC has sales and local customer support representation in over 40 countries. For a complete listing, check the Company's Web site at http://www.disc-storage.com * * * Going Concern Uncertainty In DISC Inc.'s recent FORM 10-Q filed with the Securities and Exchange Commission, the Company reported: "We have prepared the unaudited interim condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. We have condensed or omitted certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles pursuant to these rules and regulations. In our opinion, the unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the financial position, operating results and cash flows for the periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes for the years ended December 31, 2002 and 2001 included in our Annual Report on Form 10-K. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the fiscal year, which ends December 31, 2003, or for any other period. "The unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. "The Company has incurred substantial losses from operations, negative cash flows from operations and has a working capital deficit. In addition, the Company anticipates that it will continue to incur net losses for the foreseeable future. These factors raise substantial doubt about the Company's ability to continue as a going concern. In the past, the Company has obtained investor funding and credit facilities to maintain operations. In order for the Company to sustain its operations and meet its obligations going forward, it plans to seek additional financing from investors and to significantly increase sales. Subsequent to December 31, 2002 and through April 30, 2003, the Company has received funding of $860,000 in equity financing and $340,000 in debt financing from investors and generated cash from sales of its products. The ability to sustain its operations will depend on the Company's ability to significantly increase sales or raise significant additional equity or debt financing. Additional financing may not be available on acceptable terms, if at all, and the inability to obtain that financing could adversely affect the continued operations of the Company's business. The consolidated financial statements do not include any adjustment that might result should the Company be unable to continue as a going concern." DOBSON COMMS: Declares 13% Preferred Share In-Kind Dividend ----------------------------------------------------------- Dobson Communications Corporation (Nasdaq:DCEL) declared an in- kind dividend on its outstanding 13% Senior Exchangeable Preferred Stock (CUSIP 256072 50 5). The dividend will be payable on August 1, 2003 to holders of record at the close of business on July 15, 2003. Holders of shares of 13% Senior Exchangeable Preferred Stock will receive 0.03322 additional shares of 13% Senior Exchangeable Preferred Stock for each share held on the record date. The dividend covers the period May 1, 2003 through July 31, 2003. The dividends have an annual rate of 13% on the $1,000 per share liquidation preference value of the preferred stock. Dobson Communications is a leading provider of wireless phone services to rural markets in the United States. Headquartered in Oklahoma City, the Company owns or manages wireless operations in 16 states. For additional information on the Company and its operations, visit its Web site at http://www.dobson.net * * * As previously reported, Standard & Poor's Ratings Services lowered its corporate credit ratings on cellular service provider Dobson Communications Corp., and its subsidiary, Dobson Operating Co. LLC, to 'B' from 'B+' due to the impact of lower roaming yield on revenue growth, lower net customer additions compared with guidance for full-year 2002, and overall slower industry growth. Standard & Poor's also placed the ratings on CreditWatch with negative implications reflecting the uncertainty related to the Dobson family loan with Bank of America which matures on March 31, 2003, unless extended. Simultaneously, Standard & Poor's lowered its corporate credit rating on American Cellular Corp., a joint venture between Dobson Communications and AT&T Wireless Services, to 'CC' from 'CCC-' due to the potential for debt restructuring in the near term. The rating remains on CreditWatch with negative implications, where it was placed on April 5, 2002. DVI INC: Fitch Keeps Watch on CCC Senior Unsecured Debt Rating -------------------------------------------------------------- Fitch Ratings lowers DVI, Inc.'s senior unsecured debt rating to 'CCC' from 'B+'. The rating remains on Rating Watch Negative. This action covers $155 million of debt due in February 2004. The rating action reflects the increasing challenges that DVI must overcome in refinancing its $155 million of senior unsecured debt due in February 2004. While over the past nine months DVI had taken steps to improve asset quality and operating efficiency, Fitch believes that management may have underestimated the financial markets' reaction to an auditor's resignation in the current environment, and that the resignation itself is more serious in nature than the underlying issues. In addition, Fitch believes that there is a likelihood that the Securities and Exchange Commission's rejection of DVI's financial statements for the quarterly period ending March 31, 2003 could impact the company's ability to draw upon its liquidity facilities, which are essential for day-to-day operations. Fitch believes the delinquent filing status will prohibit DVI from accessing debt and equity capital markets until it is cured. This series of events has substantially reduced the flexibility DVI had in resolving upcoming debt maturities. In order for DVI to restore its filing status, it must select a new auditor and produce audited financial statements for the interim period ended March 31, 2003. There is a possibility that the new auditor will need to audit three full years of DVI's financial statements. If this becomes necessary it could weaken the likelihood that DVI will be capable of filing timely financial statements for its fiscal year ending June 30, 2003 The Rating Watch Negative status continues to reflect the need for DVI to hire a new auditor and to obtain timely audited financial statements. Rating Watch also reflects that DVI may, in the future, be in default of one of its technical covenants requiring timely quarterly financial statements. The Rating Watch will be resolved when DVI has successfully hired a new auditor, produced audited financial statements as well as identified a credible plan for refinancing its senior unsecured notes due in February 2004. Headquartered in Jamison, Pa., DVI is an independent, specialty commercial finance company providing asset-based lending to the health care industry. DVI's core business is financing large- and medium-ticket diagnostic and surgical equipment for outpatient centers, clinics, and doctors groups in the United States. DVI also provides working capital financing for medical receivables through its DVI Business Credit subsidiary. ENCOMPASS SERVICES: Court Clears Wartsila Settlement and Release ---------------------------------------------------------------- At Encompass Services Corporation and its debtor-affiliates' request, the Court approved a Settlement and Mutual Release between Encompass Industrial Services Southwest, Inc., and Wartsila North America, Inc. thus resolving numerous claims and disputes, as well as implementing a separation between the two companies. On September 18, 2001, Wartsila and Encompass Southwest, formerly known as Gulf States, Inc., entered into a subcontract wherein Encompass Southwest supplied and installed mechanical and structural systems for the Plains End Power Plant, which is being constructed in Golden, Colorado. Lydia T. Protopapas, Esq., at Weil, Gotshal, & Manges LLP, in Houston, Texas, reports that, on October 12, 2001, the subcontract was amended and the scope of the work to be performed by Encompass Southwest was expanded to include the installation of electrical systems. Wartsila acted as prime contractor in accordance with its Engineering, Procurement and Construction Contract with Plains End LLC, the owner of the Facility. The total original bid price for the subcontract between Wartsila and Encompass Southwest was $4,377,019. Later on, changes in orders relating to the work to be performed increased the subcontract price by $50,000 to a total of $4,427,019. Encompass Southwest then entered into a subcontract with Petrochem Insulation, Inc. for performance of the insulation work related to the Facility. In accordance with the subcontract, Encompass Southwest was to complete its work by March 29, 2002. However, the work was not completed until May 2002. To date, all of Encompass Southwest's work obligations under the subcontract have been satisfied except certain obligations related to warranties. As of May 28, 2002, Encompass Southwest received $3,946,000 from Wartsila for its completed work under the subcontract. However, $7,239,921 in costs that Encompass Southwest expended remained unsatisfied. That same day, Encompass Southwest submitted a final invoice to Wartsila for $8,160,486 for its completed work and additional costs due under the subcontract. The actual amount expended by Encompass Southwest for its work under the subcontract totals $11,185,921. To date, Wartsila has not paid the remaining amounts owing under the subcontract. On November 6, 2002, as a result of non-payment under its subcontract with Encompass, Petrochem filed a Notice of Lien Statement asserting a $267,729 lien on the Facility. Encompass Southwest and Wartsila each dispute the cause for delays and cost overruns under the subcontract. Encompass Southwest claims that the defective design and specifications, and an inordinate number of changes to the terms of the subcontract caused delays and overruns in the completion of its mechanical and electrical work for the Facility. Wartsila alleges that mismanagement on Encompass Southwest's part caused the delays and overruns in the completion of the work. Because of the disputes, Encompass Southwest filed a lawsuit against Wartsila, the Facility Owner, and Travelers Casualty and Surety Company of America in the Jefferson County Colorado District Court alleging breach of contract, unjust enrichment, and on account and recovery against bond. The lawsuit was then removed to the U.S. District Court for the District of Colorado. Although unasserted, Ms. Protopapas says, Wartsila has claims against Encompass Southwest including: -- claims for liquidated damages; -- alleged delays in work performance; -- back charges for defective or uncompleted work that was later corrected or completed by Wartsila or its subcontractors; -- claims for costs related to effecting removal of Encompass Southwest's lien on the Facility and the Facility Site; and -- breach of contract claims related to Encompass Southwest's obligation to prevent assertions of liens by its subcontractors. To resolve their competing claims, the Parties negotiated the Release and Settlement Agreement pursuant to which: (a) The Parties agreed to amend the contract price under their subcontract to $7,250,000 rather than the $4,427,019 that was originally designated in the amended bid. To date, Encompass Southwest has received $3,946,000 of the $7,250,000 Contract Price; (b) Wartsila will pay Encompass Southwest an additional $3,304,000 as satisfaction of the unpaid balance under the Contract Price. Of the total amount, Wartsila will first pay $2,902,406 and the remaining $401,594 within two business days after its receipt of documents evidencing the release of Petrochem's lien. The payments will be made in good funds and payable to "Jackson Kelly PLLC Trust Account." (c) In exchange for Wartsila's payment, Encompass Southwest will: (i) dismiss, with prejudice, the Lawsuit; (ii) release its mechanic's lien; and (iii) resolve the lien claim asserted by Petrochem. Encompass Southwest has negotiated with Petrochem for release of its Lien. In accordance with the negotiations, Encompass Southwest will pay $267,729 directly to Petrochem as consideration for release of the lien. In return, Petrochem will waive any applicable late charges or interest fees to which it might be entitled. The payment to Petrochem, however, is contingent on Encompass Southwest's receipt of payment from Wartsila. (Encompass Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 609/392-0900) ENRON CORP: Court OKs Phillips Son's Appointment as Auctioneer -------------------------------------------------------------- Enron Corporation, and its debtor-affiliates obtained permission from the Court to employ Phillips Son & Neale Auctions Limited as auctioneer and sales agent pursuant to the terms of an agreement between Enron Corp., and Phillips. Backgrounder The Debtors acquired various pieces of art consisting of photography, sculpture and fine art. The Debtors determined that the Enron Art is no longer necessary in the conduct of their businesses and reorganization efforts. The salient terms of the Phillips Agreement are: (a) Transport of Enron Art to NYC. Phillips will, at its sole cost and expense, cause the Enron Art to be shipped from Enron to Phillips' place of business in NYC; (b) Insurance. Phillips has agreed to obtain and maintain adequate insurance coverage for the Enron Art at its sole cost and expense other than for any portion of the Enron Art that is not within Phillips' exclusive possession within Phillips' facilities, in which insurance will be maintained by Phillips. Phillips will obtain and provide to Enron a Certificate of Insurance naming Enron as a loss payee; (c) Conduct of the Auction. Phillips will direct all aspects of the auction, including, but not limited to, the time, place and manner of the auction of the Enron Art at its place of business in New York City. Enron insiders are ineligible to purchase any of the Enron Art. Phillips will require prospective bidders to sign an acknowledgment pursuant to which prospective bidders must affirm that they are not an officer, director or senior level management of Enron or its affiliates or a relative of those persons; (d) Sale Report. No later than 15 calendar days after an auction of the Enron Art, Phillips will issue to Enron a written report containing a record of sales of the Enron Art and the allocation of the funds generated by the sales. Each Report will be prepared in a manner as to comply with Rule 6004(f)(1) of the Federal Rules of Bankruptcy Procedure. The Settlement Report will be filed with the Court and served upon the United States Trustee and Counsel for the Committee; (e) Sale to Highest Bidder. Phillips will sell all Enron Art to the highest bidder. Phillips will not permit any purchaser to take possession of Enron Art without full payment and Phillips assumes the risk of collection for any Enron Art it allows to be removed prior to its receipt of full payment; (f) Segregation of Sale Proceeds. Phillips will collect the Hammer Price, sales taxes, if any, and 20% of the Buyer's Premium, and deposit the funds into a depository account that will be segregated and maintained exclusively for Enron's benefit; (g) Sales Free and Clear of Liens and Other Interests. Any sales consummated pursuant to the Phillips Agreement will be free and clear of all liens, claims, encumbrances and interests, with the Liens attaching to the sale proceeds to the same extent and priority as immediately prior to the sale. All sales will be on an "as is, where is" basis; (h) Phillips's Compensation -- Buyer's Premium. As compensation for its services pursuant to the Phillips Agreement, Phillips may charge a buyer's premium for all sales. Phillips will collect the Buyer's Premium directly from each successful bidder, in addition to the purchase price bid. Phillips has agreed to pay Enron 20% of the Buyer's Premium collected and acknowledges that the Buyer's Premium will be Phillips' sole compensation for the auction. None of the Debtors will be responsible in any way for payment or collection of the Buyer's Premium; (i) Unsold Enron Art. If any of the Enron Art remains unsold at an auction, Phillips will notify Enron and will be authorized to sell that Enron Art piece in a private sale. The proceeds of the private sale must be at least equal to the reserve amount dedicated to that Enron Art as agreed to by Enron and Phillips. If any of the Enron Art remains unsold after 75 business days after the auction, Enron must remove that Enron Art piece at its own expense. Phillips, as agent for Enron, would assist with any storage or return shipping that may be necessary. If the Enron Art remains with Phillips after 75 business days after the auction, Phillips will hold it at Enron's risk; (j) Reserves and Estimates. A reserve amount for each piece of Enron Art will be agreed upon by Enron and Phillips and an estimated amount for each piece of Enron Art will be printed in the Property Schedule annexed to the Phillips Agreement; (k) Fees Waived by Phillips. Phillips agreed to waive these fees: (1) insurance fee; (2) late fee; (3) seller's commission; (4) shipping fees; and (5) storage fees; (l) Auctioneer Bond. Phillips will obtain at its sole cost and expense and provide to Enron and the United States Trustee, in advance of any auction, a bond as required by Local Bankruptcy Rule 6005-1(d). The bond will be in a form acceptable to the United States Trustee; (m) No Further Court Approval Required for Compensation. All payments of compensation and reimbursement of expenses to Phillips pursuant to the Phillips Agreement will be set forth in the Settlement Report and will be made without further Court approval, but will be subject to Sections 327(a), 328(a) and 330 of the Bankruptcy Code, and objections, if any, by the Debtors, the Committee, the United States Trustee and any other party-in-interest; and (n) Indemnification. The Debtors agreed to indemnify Phillips only for claims, which may arise as a result of: (i) the Debtors' breach of the Phillips' Agreement; (ii) any act or omission by the Debtors regarding the Enron Art; and (iii) any claim by a third party against the Enron Art or its proceeds. (Enron Bankruptcy News, Issue No. 71; Bankruptcy Creditors' Service, Inc., 609/392-0900) EPIC FINANCIAL: Kabani & Co. Replaces Becker as New Accountants --------------------------------------------------------------- On June 16, 2003 Epic Financial Corporation dismissed its independent accountants Becker & Company CPAs. The report of Becker & Company CPAs for the fiscal year ended December 31, 2002 contained an explanatory paragraph regarding the substantial doubt about the Company's ability to continue as a going concern. The decision to dismiss Becker & Company CPAs was made by the Board of Directors of the Company. On June 16, 2003, the Company engaged the firm of Kabani & Company, Inc., of Fountain Valley, California, as independent accountants for the Company. E.SPIRE COMMUNICATIONS: Gets Court Nod to Hire ASK Financial ------------------------------------------------------------ Gary F. Seitz, the Chapter 11 Trustee of e.spire Communications, Inc.'s estates, sought and obtained approval from the U.S. Bankruptcy Court for the District of Delaware to retain and employ ASK Financial as his Consultants and Special Counsel, nunc pro tunc to April 16, 2003. ASK will analyze the Debtors' records and identify avoidable claims under section 547 of the Bankruptcy Code, determine the gross transfers and evaluate the potential defenses that can be raised by each respective vendor. The Trustee is in the early stages of preparing his plan of liquidation for the Debtors and requires that ASK immediately perform the preference analyses so that he can evaluate the potential recovery to the Debtors' estates. The Trustee has identified approximately 192 creditors who received at least $10,000 during the 90-day preference period. The total transfers made to these creditors during the preference period exceeds $25 million. The Trustee believes that a more thorough review of the Debtors' records will reveal additional creditors who received meaningful preferential transfers. Due to the length of time this analysis will take it is important that the data mining process commence as soon as possible. ASK has the expertise to oversee this data mining process and, more importantly, can convert the recovered data into a format that is compatible with its unique analysis programs. In its capacity, ASK will perform: (A) Preference Analysis ASK will perform a preference analysis of all transactions that occurred within the 90 day period prior to the Petition Date. At the Trustee's discretion, ASK may also perform an analysis of paid invoice transactions from prior periods to compare the course of business dealings. ASK will be required to prepare: a. Case Level Master Summary Report; b. Check Registers; c. Paid Invoice Analysis Detail; d. New Value Analysis Report; (B) Collection and Litigation of Identified Preference Claims Prior to his appointment as Trustee, the Debtor filed approximately 136 adversary proceedings seeking to recover preferences from the named defendants. ASK will represent the Trustee in these adversary proceedings, as well as initiate such additional adversary proceedings as necessary to collect from each Net Preference Vendor identified in ASK's analysis. ASK will pursue collection via the use of pre-suit demand letters and, if necessary, file new or amend existing adversary proceedings to reflect the additional claims that ASK identifies in its analysis. Thereafter ASK will enforce the judgments by domesticating them in other jurisdictions and engaging in appropriate post-judgment judicial enforcement proceedings. With respect to its services, Joseph L. Steinfeld, Jr., a co- managing principal of ASK Financial, reports that ASK will be compensated a per Net Vendor contingency fee: i) 32% of collections realized prior to obtaining a judgment; and ii) 40% of collections realized after obtaining a judgment. e.spire Communications, Inc., is a facilities-based integrated communications provider, offering traditional local and long distance internet access throughout the United States. The Company filed for chapter 11 protection on March 22, 2001 (Bankr. Del Case No. 01-974). Domenic E. Pacitti, Esq., and Maria Aprile Sawczuk, Esq., at Saul Ewing LLP, represent the Chapter 11 Trustee in this proceeding. FLEMING COS.: Judge Walrath Fixes Reclamation Claim Procedures -------------------------------------------------------------- Hershey Foods Corporation wants Fleming Companies, Inc., and debtor-affiliates to submit a reclamation claims report co-extensively with the completion of the processing of reclamation claims. The report must enumerate the Debtors' defenses and provide an accounting as to each reclamation claimant. The accounting must include these information: * the date of receipt of the claim; * the goods in the Debtors' possession as of the receipt of the reclamation notice if the notice is received prepetition or as of the Petition Date if received postpetition; * if the goods were not in the Debtors' possession, an identification of disposition of the goods; and * a statement of position as to whether the prepetition secured party was under-secured or oversecured. Before the Petition Date, Hershey shipped to the Debtors $17,000,000 in goods which remain unpaid. Included within the shipments were $12,000,000 worth of goods sold on credit for which Hershey has timely asserted a reclamation claim, pursuant to Section 2-702 of the Uniform Commercial Code. (2) Dawn Food Products, Inc. Before the Petition Date, Dawn shipped to the Debtors $500,000 worth of goods for which it has not been paid. Included within these shipments were $75,000 in goods sold on credit for which Dawn has asserted reclamation claims pursuant to Section 2-702 of the Uniform Commercial Code. Dawn does not want to wait for 90 more days before it can assert its right on the unpaid goods. This will result in the loss of valuable opportunity to conduct discovery, Dawn asserts, and undermine its ability to establish its reclamation claim. (3) Del Monte Corporation Del Monte complains that the Debtors fail to include any process for promptly establishing whether the goods subject to its reclamation claims were on hand at the time they received the claim. In this regard, Del Monte wants the Debtors to specify what products were or will be shipped by them after receiving its reclamation claim. If the Debtors delay the enforcement of Del Monte's rights, Del Monte insists that the Debtors should be compelled to promptly provide documents concerning whether Del Monte's goods were on hand when they received the claim. (4) Sunshine Mills, Inc. Sunshine sells goods to the Debtors on credit. But while it admits that the procedures will streamline the reclamation process, Sunshine objects to the Debtors' request to the extent the procedures affect its substantive rights under Section 546 of the Bankruptcy Code or applicable law. Sunshine has complied with the requirements of Section 546(c)(1) and has undertaken to physically retrieve the goods and ensure that the goods are segregated and preserved pending a ruling on the reclamation demand. The Debtors have refused to allow Sunshine to retrieve the goods or to provide evidence of the segregation of the goods. Sunshine asserts that it is entitled to reclaim its goods under applicable law. * * * Judge Walrath orders any vendor asserting a reclamation claim to satisfy all requirements entitling it to a right of reclamation under applicable state law and Section 546(c)(1) of the Bankruptcy Code. Judge Walrath requires the Debtors to file a report by July 21, 2003 listing all valid reclamation claims. At the time the report is filed, Judge Walrath instructs the Debtors to provide to each reclamation claimant a comprehensive, detailed and customized information packet that sets forth the basis for the reconciled reclamation amount reported. Each claimant may provide the Debtors with additional documentation to assist the Debtors in evaluating the reclamation claims. The report will contain: * the amount of claim asserted by the Claimant; * the date of receipt of the Claimant's goods; * the date the Claimant made a reclamation demand; * the goods received within the reclamation period; * the reclamation goods on hand at the Demand Date; * the Debtors' proposed net allowed reclamation claim as to each reclamation demand. All parties-in-interest will have the right to object to the inclusion or omission of any asserted reclamation claim as well the proposed claim treatment. Objecting Claimants are free to conduct discovery to resolve the objection. The Debtors, in their sole discretion and upon consent of the administrative agent for the prepetition lenders, may make goods available for pick up by any reclaiming seller who satisfies the reclamation requirements. Otherwise, claimants and vendors are prohibited from interfering with the delivery of goods to or by the Debtors. (Fleming Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-0900) GENERAL BINDING: Financial Leverage Concerns Spur Low-B Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its senior secured 'B+' rating to office supplies manufacturer General Binding Corp.'s $197.5 million bank facility. At the same time, Standard & Poor's affirmed its 'B+' corporate credit and 'B-' subordinated debt ratings on the company. Total debt outstanding at March 31, 2003, was $336.1 million. The outlook on the Northbrook, Illinois-based General Binding is stable. "General Binding's corporate credit rating is based on the company's leveraged financial profile, highly competitive operating environment, and the low-growth markets that the company serves," said credit analyst Martin S. Kounitz. "These factors are somewhat mitigated by General Binding's significant reoccurring service and parts revenues, multi-channel distribution, and solid market position." General Binding manufactures and markets binding, display and laminating equipment, thermal and pressure-sensitive laminating films, and supplies primarily under the GBC, Quartet, and Ibico brands. The company faces significant challenges in its markets, as spending on office equipment has been soft for several years, reflecting increased unemployment levels and lower corporate profitability. In response, management has refocused its strategy and restructured its operations to restore profitability to the levels of the mid-1990s. This effort has included the launch of an Operational Excellence Program in late 2001. Components of the program include reducing plants to 16 from 33, lowering stock keeping units to under 10,000 from 25,000, and improving sales force and organizational efficiency. With a focus on improving profitability by increasing high-margin product sales and reducing costs, General Binding increased EBITDA by 11% in 2002 over the previous year to $83.8 million, despite flat sales. The company has improved profit margins across most of its business lines, with the exception of the Document Finishing Group, which represented 27% of 2002 revenues. As a result, the EBITDA margin, adjusted for nonrecurring charges and operating leases, rose to 12.1% for the 12 months ended March 31, 2003, from 9.6% in fiscal 2001. GENERAL BINDING: Completes Sr. Facility Refinancing Transaction --------------------------------------------------------------- General Binding Corporation (Nasdaq:GBND) announced the refinancing of its primary credit facility, extending the maturity to January 15, 2008, and providing for significantly lower rates compared to its previous facility. The new $197.5 million facility, led by Harris Bank, LaSalle Bank and General Electric Capital Corporation, provides the financial flexibility and liquidity to support all currently anticipated operating and capital requirements. GBC was successful in reducing the size of the new facility by more than $90 million from the previous facility primarily as a result of debt reduction achieved through the successful execution of its Operational Excellence Program and approximately $30 million of aggregate proceeds from two other recent financings. "This is an important financial milestone for GBC," said Dennis Martin, Chairman of the Board, President and CEO. "First, these transactions should reduce our interest payments by more than $4 million on an annualized basis. And second, they reflect our financial partners' confidence in our operating and financial outlook." GBC is a world leader in products that bind, laminate, and display information enabling people to accomplish more at work, school and home. GBC's products are marketed in over 100 countries under the GBC, Quartet, and Ibico brands, and they help people enhance printed materials and organize and communicate ideas. GERDAU AMERISTEEL: Closes Note Issue & Drawdown Under Facility -------------------------------------------------------------- Gerdau Ameristeel Corporation (TSX:GNA.TO) announced the closing of the private offering of its 10-3/8% Senior Unsecured Notes due 2011 at 98.001% of face amount and the initial draw-down under its new senior secured credit facility. The net proceeds from the sale of the Senior Notes totaled approximately $389.5 million, before expenses, and cash proceeds from the initial draw down were approximately $142.5 million. As previously announced, the proceeds from the Senior Note offering and the initial draw-down under the new senior secured credit facility were used by Gerdau Ameristeel to repay indebtedness under its existing credit facilities. The refinancing has significantly extended the Company's debt maturities and provided a more permanent capital base. The offering of the Senior Notes was not registered under the U.S. Securities Act of 1933 and the Senior Notes may not be offered or sold in the United States absent such registration or an applicable exemption from registration requirements. Gerdau Ameristeel is the second largest minimill steel producer in North America with annual manufacturing capacity of over 6.8 million tons of mill finished steel products. Through its vertically integrated network of 11 minimills (including one 50%- owned minimill), 13 scrap recycling facilities and 26 downstream operations, Gerdau Ameristeel primarily serves customers in the eastern half of North America. The company's products are generally sold to steel service centers, fabricators, or directly to original equipment manufacturers for use in a variety of industries, including construction, automotive, mining and equipment manufacturing. Gerdau Ameristeel's common shares are traded on the Toronto Stock Exchange under the symbol GNA.TO As previously reported, Standard & Poor's Ratings Services assigned its 'BB' bank loan rating to Gerdau Ameristeel Corp.'s proposed $350 million senior secured revolving bank credit facility due 2008. Standard & Poor's also assigned its 'B+' rating to the company's proposed $400 million senior unsecured notes due 2011. At the same time, Standard & Poor's affirmed its 'BB-' corporate credit rating on the company. The outlook remains stable. GLOBAL CROSSING: Reports Breakeven EBITDA Results for May 2003 -------------------------------------------------------------- Global Crossing filed a Monthly Operating Report with the U.S. Bankruptcy Court for the Southern District of New York, as required by its Chapter 11 reorganization process. Results reported in the May 2003 MOR are unaudited. In May 2003, Global Crossing reported consolidated revenue of approximately $247 million. Consolidated access and maintenance costs were reported as $171 million, while other operating expenses were $76 million. "Our overall results in the first five months of the year reflects continued success in maintaining our customer relationships and improved profitability during this difficult time," said John Legere, Global Crossing's CEO. "May's breakeven EBITDA performance and revenue up-tick are encouraging indicators and, by focusing new sales recruits on customer acquisition, we hope to position the company for stronger revenue growth and profitability upon emergence from bankruptcy later this year." Global Crossing's consolidated cash balance of approximately $537 million as of May 31, 2003 was comprised of approximately $202 million in unrestricted cash (the $202 million includes $70 million of cash held by Global Marine) and $335 million in restricted cash. Consolidated EBITDA was reported at breakeven. The consolidated net loss for May 2003 was $86 million. As discussed below, the reported May 2003 depreciation and amortization of $95 million, and therefore the May operating loss and net loss, would have been reduced substantially if the financial statements in the May MOR had reflected the tangible asset impairment anticipated by the company. In connection with the independent audits being conducted for 2001 and 2002, Global Crossing has concluded that its Global Marine subsidiary no longer qualifies to be classified as a discontinued operation as the newly emerged Global Crossing is expected to retain this business. As a result, Global Marine has been reclassified into Global Crossing's continuing operations in the May MOR. When historical financial statements are filed for 2001 and 2002 Global Marine will be presented as continuing operations for all periods presented. On October 21, 2002, Global Crossing announced that it would restate certain financial statements previously filed with the SEC. These restatements, which are more fully described in footnote one to the financial statements contained in the May MOR, will record exchanges between carriers of leases of telecommunications capacity at historical carryover basis, resulting in no recognition of revenue. Reflecting this accounting treatment, the May MOR excludes amounts previously recognized as revenue over the lives of the lease contracts governing these capacity exchanges. The restatements have no impact on cash flow. As previously announced, Global Crossing's net loss for the three months ended December 31, 2001, which has not yet been reported pending the completion of the audit of financial statements for 2001, is expected to reflect the write-off of the remaining goodwill and other intangible assets, which total approximately $8 billion. Furthermore, as previously disclosed, Global Crossing has determined that it will write down its tangible assets in light of the terms contained in the previously announced agreement with Hutchison Telecommunications and Singapore Technologies Telemedia, and the bankruptcy filings of Asia Global Crossing and its subsidiary, Pacific Crossing Ltd. Global Crossing is in the process of evaluating its cash flow forecasts and other pertinent data to determine the amount of the impairment of its long-lived tangible assets. The impairment is anticipated to be at least $7 billion, an estimate that excludes any amounts attributable to the restatement of exchanges of capacity leases described above and excludes any impairment attributable to the assets of Asia Global Crossing and its subsidiaries, which Global Crossing deconsolidated effective November 18, 2002. The financial information included within this press release and the May MOR reflects the restatement of exchanges of capacity leases as described above and the $8 billion write-off of all of the goodwill and other identifiable intangible assets, but does not reflect any write-down of tangible asset value. Accordingly, the net loss of $86 million for the month of May 2003 would have been reduced substantially if the financial statements in the May MOR had reflected the reduction in depreciation and amortization expense resulting from this tangible asset write-down. The write- off of the intangible assets and the write-downs of tangible assets are described more fully in the May MOR. Global Crossing provides telecommunications solutions over the world's first integrated global IP-based network, which reaches 27 countries and more than 200 major cities around the globe. Global Crossing serves many of the world's largest corporations, providing a full range of managed data and voice products and services. On January 28, 2002, Global Crossing Ltd. and certain of its subsidiaries (excluding Asia Global Crossing and its subsidiaries) commenced Chapter 11 cases in the United States Bankruptcy Court for the Southern District of New York (Bankruptcy Court) and coordinated proceedings in the Supreme Court of Bermuda (Bermuda Court). On the same date, the Bermuda Court granted an order appointing joint provisional liquidators with the power to oversee the continuation and reorganization of the Bermuda-incorporated companies' businesses under the control of their boards of directors and under the supervision of the Bankruptcy Court and the Bermuda Court. Additional Global Crossing subsidiaries commenced Chapter 11 cases on April 23, August 4 and August 30, 2002, with the Bermuda incorporated subsidiaries filing coordinated insolvency proceedings in the Bermuda Court. The administration of all the cases filed subsequent to Global Crossing's initial filing on January 28, 2002 has been consolidated with that of the cases commenced on January 28, 2002. Global Crossing's Plan of Reorganization, which was confirmed by the Bankruptcy Court on December 26, 2002, does not include a capital structure in which existing common or preferred equity will retain any value. On November 18, 2002, Asia Global Crossing Ltd., a majority-owned subsidiary of Global Crossing, and its subsidiary, Asia Global Crossing Development Co., commenced Chapter 11 cases in the United States Bankruptcy Court for the Southern District of New York and coordinated proceedings in the Supreme Court of Bermuda, both of which are separate from the cases of Global Crossing. Asia Global Crossing has announced that no recovery is expected for Asia Global Crossing's shareholders. Asia Netcom, a company organized by China Netcom Corporation (Hong Kong) on behalf of a consortium of investors, has acquired substantially all of Asia Global Crossing's operating subsidiaries except Pacific Crossing Ltd., a majority-owned subsidiary of Asia Global Crossing that filed separate bankruptcy proceedings on July 19, 2002. Global Crossing no longer has control of or effective ownership in any of the assets formerly operated by Asia Global Crossing. Visit http://www.globalcrossing.comfor more information about Global Crossing. GLOBAL CROSSING: Names M. Cromwell as Regional VP of Ent. Sales --------------------------------------------------------------- Global Crossing has named Michael Cromwell regional vice president of enterprise sales for the western region, overseeing all sales and sales support functions in 26 states, effective immediately. In his new position, Mr. Cromwell reports directly to Dave Carey, executive vice-president, enterprise sales. "Mike Cromwell's exceptional track record and strong customer relationships have been a key asset to Global Crossing since its inception, and I'm thrilled to see him take on an even greater role in our continued success," said Dave Carey. "With his experience and know-how, I'm confident that Mike will be instrumental in challenging our enterprise sales team to new levels of achievement." Mr. Cromwell has held positions within Global Crossing's sales organization and that of its predecessors, Frontier Communications and Allnet Communications, since 1990. As area vice president for the western region since 1997, he directed all sales, service and engineering efforts for a $48 million business unit, encompassing a 10-state area and more than 90 employees. During this time, Mr. Cromwell successfully focused the organization on providing complex data solutions, both domestically and internationally, to major accounts, growing monthly revenues between 40 and 100 percent each year. Mr. Cromwell has received numerous awards during his tenure at Global Crossing, all of which recognized him as a top performer. He holds a Bachelor of Arts degree from the University of Massachusetts at Amherst. Global Crossing provides telecommunications solutions over the world's first integrated global IP-based network, which reaches 27 countries and more than 200 major cities around the globe. Global Crossing serves many of the world's largest corporations, providing a full range of managed data and voice products and services. On January 28, 2002, Global Crossing Ltd. and certain of its subsidiaries (excluding Asia Global Crossing and its subsidiaries) commenced Chapter 11 cases in the United States Bankruptcy Court for the Southern District of New York (Bankruptcy Court) and coordinated proceedings in the Supreme Court of Bermuda (Bermuda Court). On the same date, the Bermuda Court granted an order appointing joint provisional liquidators with the power to oversee the continuation and reorganization of the Bermuda-incorporated companies' businesses under the control of their boards of directors and under the supervision of the Bankruptcy Court and the Bermuda Court. Additional Global Crossing subsidiaries commenced Chapter 11 cases on April 23, August 4 and August 30, 2002, with the Bermuda incorporated subsidiaries filing coordinated insolvency proceedings in the Bermuda Court. The administration of all the cases filed subsequent to Global Crossing's initial filing on January 28, 2002 has been consolidated with that of the cases commenced on January 28, 2002. Global Crossing's Plan of Reorganization, which was confirmed by the Bankruptcy Court on December 26, 2002, does not include a capital structure in which existing common or preferred equity will retain any value. On November 18, 2002, Asia Global Crossing Ltd., a majority-owned subsidiary of Global Crossing, and its subsidiary, Asia Global Crossing Development Co., commenced Chapter 11 cases in the United States Bankruptcy Court for the Southern District of New York and coordinated proceedings in the Supreme Court of Bermuda, both of which are separate from the cases of Global Crossing. Asia Global Crossing has announced that no recovery is expected for Asia Global Crossing's shareholders. Asia Netcom, a company organized by China Netcom Corporation (Hong Kong) on behalf of a consortium of investors, has acquired substantially all of Asia Global Crossing's operating subsidiaries except Pacific Crossing Ltd., a majority-owned subsidiary of Asia Global Crossing that filed separate bankruptcy proceedings on July 19, 2002. Global Crossing no longer has control of or effective ownership in any of the assets formerly operated by Asia Global Crossing. Visit http://www.globalcrossing.comfor more information about Global Crossing. GLOBAL LEARNING: Taps Whiteford Taylor as Bankruptcy Co-Counsel --------------------------------------------------------------- Global Learning Systems, Inc., and its debtor-affiliates ask for permission from the U.S. Bankruptcy Court for the District of Maryland to employ Whiteford Taylor & Preston LLP as their local bankruptcy attorneys. The Debtors relate that they require the assistance of counsel in order to pursue a successful reorganization of their debts and to assist them with the performance of their duties as debtors and debtors in possession. In this case, the Debtors selected Whiteford Taylor to serve as co-counsel with Marcus, Santoro & Kozak, PC to represent them in these cases. The Debtors' management has directed the two firms to exercise their best efforts in coordinating their services in order to avoid unnecessary duplication of effort and unnecessary expense to the Debtors' estates. Whiteford Taylor has limited the scope of its employment in respect of any services that might be directly adverse to a party in interest to which the firm has connections unrelated to the Debtors. The professional services the Debtors expect Whiteford Taylor to render include: a) providing the Debtors legal advice with respect to their powers and duties as debtors in possession and in the operation of their business and management of their property; b) representing the Debtors in defense of any proceedings instituted to reclaim property or to obtain relief from the automatic stay under Section 362(a) of the Code; c) preparing any necessary applications, answers, orders, reports and other legal papers, and appearing on the Debtors' behalf in proceedings instituted by or against the Debtors; d) assisting the Debtors in the preparation of schedules, statements of financial affairs, and any amendments thereto which the Debtors may be required to file in these cases; e) assisting the Debtors in the preparation of a plan of reorganization and disclosure statement; f) assisting the Debtors with all legal matters, including, among others, all securities, corporate, real estate, tax, employee relations, general litigation, and bankruptcy legal work; and g) performing all of the legal services for the Debtors that may be necessary or desirable herein. Brent C. Strickland, Esq., a partner of Whiteford Taylor, reports that the current standard hourly rates of the principal attorneys designated to represent the Debtors range from $240 to $375 per hour. The paralegals likely to assist these attorneys bill at a rate of $130 per hour. Global Learning Systems, Inc., an improvement solutions company headquartered in Frederick, Maryland, filed for chapter 11 protection June 6, 2003 (Bankr. Md. Case No. 03-30218). Brent C. Strickland, Esq., at Whiteford, Taylor & Preston LLP, represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed assets of over a million and debts of more than $10 million. GLOBALSTAR LP: Olof Lundberg Leaves Company as CEO & Chairman ------------------------------------------------------------- Globalstar, L.P., provider of the world's most widely-used satellite phone service, announced that Olof Lundberg has resigned from his positions as Globalstar chief executive officer and chairman of the company's General Partners' Committee. Mr. Lundberg joined Globalstar in 2001 to help guide the company through its restructuring process. This process is now nearing a successful conclusion through an agreement in which ICO Global Communications (Holdings) Limited is to assume majority ownership of the company. "I am very proud to have been a part of the turnaround of Globalstar," Mr. Lundberg said. "Over the past two years, the company's business has not only been rebuilt but also strengthened and expanded, with a new business model and a better understanding of market opportunities. With Globalstar's restructuring nearing its completion, this is now the right time to begin moving responsibility over to the company's soon-to-be new owners." The company has no immediate plans to name a successor to Mr. Lundberg, pending completion of the acquisition process. Globalstar is a provider of global mobile satellite telecommunications services, offering both voice and data services from virtually anywhere in over 100 countries around the world. For more information, visit Globalstar's Web site at http://www.globalstar.com Globalstar L.P. filed for Chapter 11 protection on February 15, 2002 (Bankr. Del. Case No. 02-10504-PJW). GOODYEAR TIRE: Fitch Places Low-B Ratings on Watch Negative ----------------------------------------------------------- Fitch Ratings has placed the Goodyear Tire & Rubber Company's senior unsecured rating of 'B' and the senior secured bank facilities rating of 'B+' on Rating Watch Negative. Approximately, $5 billion of debt is affected. The rating action is based on the current labor negotiation situation which is at a standstill after two deadlines have passed, and the heightened possibility of a work stoppage. Such a work stoppage would carry significant near-term operating and financial impact. Beyond the concern of the immediate impact of any potential work stoppage, however, is the elevated concern over whether Goodyear will be able to gain appropriate operating flexibility to take costs out of its key North American Tire operating segment. Fitch believes that much of Goodyear's operating turnaround strategy rests on whether cost improvements and operating efficiency in North American Tires Segment can be achieved. Goodyear is in the midst of negotiating a labor contract with about 19 thousand employees at 11 of the 14 Goodyear tire plants in North America represented by the United Steel Workers of America union. Since the initial deadline had passed on April 21 without an agreement, the contract had been extended on a day to day basis. Fitch estimates that about 40-50% of Goodyear's North American tire production capacity is at risk through a potential work stoppage. Following the credit restructuring in April 2003, Goodyear had access to about $1.5 billion of liquidity. However, substantial cash claims loom in the near future with required pension contribution of approximately $400 million in early 2004. Fitch estimates that contributions of similar magnitudes will be required in the following years. Also, due to the operating losses and large seasonal usage of working capital in the quarter, Goodyear showed a negative $373 million of operating cash flow, before $90 million of capital expenditure for the quarter ended March 31, 2003. Given the protracted negotiations leading up to the April 2003 credit restructurings, and the relatively limited 2-year term of the restructured credit, rapid and demonstrable progress in Goodyear's turnaround strategy was expected. However, the difficult labor negotiations with wide differences between the two sides on the key issues such as plant closures and sourcing of tires from non-North American tire operations, suggest the operating turnaround predicated on a successfully renegotiated labor contract is at risk. While Goodyear was in compliance with the restructured bank financial covenants as of March 31, 2003, an extended work stoppage increases the risk of covenant violations. If financial covenants and other terms and conditions are not breached, much of the restructured credit facilities mature in April 2005. North American tires Segment represent roughly half of Goodyear's 2002 consolidated revenues of $13.9 billion. After posting a segment operating loss of $36 million for the year in 2002, three months ended March 31, 2003 showed continuation of the operating slide, showing deeper segment operating losses of $62 million. Poor capacity utilization, cost headwinds with raw material price volatility, pension and health care expense increase, brand management issues, and distribution channel management problems have all figured into these operating difficulties. Given that cost and competitive pressures are expected to persist, a successful labor agreement allowing for cost reduction and operating flexibility is critical. This rating is provided by Fitch as a service to users of its ratings and is based primarily on public information. HAYES LEMMERZ: Asks Court to Reclassify Over $1 Mill. of Claims --------------------------------------------------------------- During the claims review process, Hayes Lemmerz International, Inc., and its debtor-affiliates determined that certain Proofs of Claim assert, in whole or in part, either: a) secured claims that in fact are unsecured in whole or in part; or b) unsecured priority claims and administrative priority claims that the Debtors have determined actually are not entitled, in whole or in part, to unsecured priority or administrative priority treatment under the Bankruptcy Code. Accordingly, the Debtors object to 95 Misclassified Claims totaling $6,373,507.30 and ask the Court to reclassify the portions of these Misclassified Claims that the Debtors have determined are not secured or entitled to unsecured priority treatment or administrative priority treatment. In certain instances, this will require bifurcating the Misclassified Claims so that only the disputed amounts are recorded as being asserted with the reclassified unsecured status. The undisputed amount of these Misclassified Claims will retain the priority status asserted by the Claimant. The claims to be reclassified from priority to unsecured are: Claimant Claim # Amount ---------------------- ------- -------- Alcan Aluminum Corp. 2722 $118,082 Areway Inc. 2296 267,889 Areway Inc. 2417 91,066 Motion Industries Inc. 4484 243,480 SERF 2232 85,508 Tempstar Services Inc. 2231 224,837 Waupaca Foundry Inc. 3111 135,634 Waupaca Foundry Inc. 3112 135,634 (Hayes Lemmerz Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 609/392-0900) HEADWAY CORPORATE: Files for Chapter 11 Protection in New York -------------------------------------------------------------- Headway Corporate Resources, Inc. (AMEX: HEA) has reached an agreement with the holders of its senior and subordinated indebtedness for a restructuring of the Company. The restructuring will involve a significant reduction of outstanding indebtedness and a conversion of the balance of such indebtedness into 100% of the Company's equity. The transaction is being implemented pursuant to a Chapter 11 bankruptcy proceeding of the parent company, Headway Corporate Resources, Inc., which was commenced today. All of Headway's operating subsidiaries will continue to do business outside of bankruptcy. As part of the bankruptcy proceeding, the currently outstanding shares of Headway common stock will be cancelled without any distribution to be made to the holders of such shares. "While it is unfortunate that the Company will not be in a position to make any distribution to the shareholders, we do believe that this is the best solution for the Company. We are pleased to have a fully consensual arrangement with our senior lenders and subordinated note holders. We do not expect the Chapter 11 filing to have any impact on our clients, vendors or employees," said Barry Roseman, President of Headway Corporate Resources, Inc. "After years of operating under the weight of too much debt, we are thrilled to have found a solution. The restructuring will significantly reduce the Company's debt level, giving it a clean balance sheet. We believe that this will greatly enhance the Company's operating flexibility and position us to take advantage of the economic recovery," added Mr. Roseman. The Company further announced that on June 26, 2003, it received a notice from the staff of the American Stock Exchange indicating that the Company no longer complies with the Exchange's continued listing standards as set forth in Section 1003(a)(i) of the AMEX Company Guide due to losses in two of its three most recent fiscal years and an equity value below $2 million. The Company's stock is therefore subject to being delisted from the Exchange. The Company has decided not to appeal this decision. AMEX has advised the Company that the last day of trading was June 30, 2003, and AMEX will file an application with the Securities and Exchange Commission to strike the Company's stock from listing and registration. Headway Corporate Resources, Inc. provides human resource and staffing services. Headquartered in New York City, Headway also has offices in California, Connecticut, Florida, North Carolina, and Virginia. HEADWAY CORPORATE: Case Summary & 10 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Headway Corporate Resources, Inc. 317 Madison Avenue, 3rd Floor New York, New York 10017 fka AFGL International Inc. Bankruptcy Case No.: 03-14270 Type of Business: Headway Corporate Resources, Inc., is a provider of human resource and staffing services. Chapter 11 Petition Date: July 1, 2003 Court: Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtor's Counsel: Jeffrey L. Tanenbaum, Esq. Weil, Gotshal & Manges, LLP 767 Fifth Avenue New York, NY 10153 Tel: (212) 310-8000 Fax : (212) 310-8007 Estimated Assets: $10 Million to $50 Million Estimated Debts: $50 Million to $100 Million Debtor's 10 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Republic Financial Corp. Bank Loan $26,787,980 (Successor to Fleet National Bank) 3300 S. Parker Road Suite 500 Aurora, CO 80014-3522 Dan Rouse Tel: (303) 923-2488 Bank of America, N.A. Bank Loan $19,134,271 1101 Wootton Parkway, Third Floor Rockville, MD 20852-1059 Michael Heredia Tel: (301) 517-3234 Citizens Bank of Bank Loan $11,480,563 Massachusetts 28 State Street, 15th Floor Boston, Mass. 02109 Steve Petrarca Tel: 617-994-7139 Transamerica Business Bank Loan $11,480,563 Capital Corporation 8750 West Bryn Mawr, Suite 720 Chicago, Illinois 60631 Ari Kaplan Tel: 773-864-3978 GarMark Partners, L.P. Noteholder $8,600,667 1 Landmark Square, 6th Floor Stamford, CT 06901 E. Garrett Bewkes, III Tel: 203-325-8500 Wachovia Bank Bank Loan $7,653,709 National Association 301 South College Street, DC-5 Charlotte, NC 28288-0760 Joel Thomas Tel: 704-383-4281 Moore Macro Fund, L.P. Noteholder $3,225,250 1251 Avenue of the Americas New York, NY 10020 Kenneth Lau c/o Valence Capital Tel: 212-782-7000 Banc of America Noteholder $1,075,083 Securities, LLC 600 Montgomery Street Mail Code CA5-801-12-02 San Francisco, CA 94111-2702 Gary M. Tsuyuki Managing Director Tel: 415-913-6079 EOP-Midtown Landlord $90,000 Properties, L.L.C. U.S. Bank Trust Indenture Trustee $5,000 National Association HEALTHSOUTH: Will Hold Creditors & Shareholders Meeting on Mon. --------------------------------------------------------------- HealthSouth Corporation (OTC Pink Sheets: HLSH) will hold a meeting for creditors and stockholders in New York City on Monday, July 7, 2003, at 3:00 pm Eastern Time, to review its preliminary business plan and to provide current financial projections for the next twelve months. The meeting will be hosted by Joel C. Gordon, Interim Chairman of the Board, Robert P. May, Interim Chief Executive Officer, and Bryan Marsal, Chief Restructuring Officer. Individuals may access the meeting by phone by dialing 888-913- 9967. International callers should dial 773-756-4625. A digital recording will be available, beginning two hours after the completion of the meeting, from July 7, 2003 to July 17, 2003. To access the recording, please dial 800-839-2153 and enter the pass code 3393. International callers should dial 402-998-1179. A live Internet broadcast will also be available at http://www.healthsouth.comby clicking on an available link. The Webcast will be archived for replay purposes for one week after the live broadcast on the same Web site. A copy of the slide presentation that HealthSouth plans to use during the meeting will be filed with the U.S. Securities and Exchange Commission and will also be posted on the Company's Web site at http://www.healthsouth.com The location for the meeting will be announced at a later date. HealthSouth, which is currently in default under its credit facility with JPMorgan Chase Bank and Wachovia Securities, is the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitative healthcare services, with nearly 1,700 locations in all 50 states and abroad. HealthSouth can be found on the Web at www.healthsouth.com . KMART CORP: Sues Handleman to Recoup $49MM Critical Vendor Payment ------------------------------------------------------------------ Kmart Holding Corporation (Nasdaq: KMRT) has filed a complaint in U.S. Bankruptcy Court for the Northern District of Illinois against Handleman Company to recover the $49 million critical vendor payment Kmart paid to Handleman at the outset of Kmart's Chapter 11 bankruptcy proceedings in 2002. Prior to filing the complaint against Handleman, Kmart requested either the return of the $49 million for placement in a segregated account to maintain the status quo, or a letter of credit guaranteeing that amount pending the outcome of the "critical vendor payment issue" which is under review with the Seventh Circuit Court of Appeals. Handleman refused to comply with Kmart's requests. Julian C. Day, President and Chief Executive Officer of Kmart, said: "This management team continues to work hard to improve business relationships with our vendors. Notwithstanding the legal outcome of the critical vendor payment issue, Kmart and our vendors seek to maintain positive and profitable relationships going forward." On April 10, 2003, the United States District Court for the Northern District of Illinois, Eastern Division, reversed the Bankruptcy Court's order authorizing payment of prepetition claims of certain critical trade vendors. As a result, under the current state of law as determined by the District Court and certain other circuit courts, Kmart's payment of $49 million to Handleman at the outset of the bankruptcy case was not authorized. Although it did not order the immediate return of the money, the District Court said, "It is not too late for the monies to be returned." The District Court decision has been appealed to the Seventh Circuit Court of Appeals. Kmart believes it has the fiduciary duty to its stakeholders to pursue recovery of the critical vendor payments in the event that the Court of Appeals affirms the District Court decision. In light of the magnitude of the amount of money paid to Handleman, it is important that Kmart's ability to recover such amounts is protected. If the court's ruling is adverse to Handleman, Kmart intends to pursue from Handleman recovery of the critical vendor payment. Kmart does not believe that any defenses that may be asserted by Handleman will prevent a recovery of money by Kmart. Kmart Corporation is a mass merchandising company that serves America through Kmart and Kmart SuperCenter retail outlets. KMART: Handleman Will Continue Relationship Despite Lawsuit ----------------------------------------------------------- Handleman Company (NYSE: HDL) -- http://www.handleman.com-- commented on a complaint filed by Kmart Corporation arising out of Handleman's status as a critical trade vendor in Kmart's Chapter 11 bankruptcy proceedings. Stephen Strome, Chairman and Chief Executive Officer of Handleman, said: "The critical trade vendor issue is the last remaining item of the Kmart Chapter 11 bankruptcy. Notwithstanding the complaint that Kmart has filed, we maintain a strong and continuing business relationship with Kmart. We appreciate the opportunity to work with the Company's new management team to grow music and video sales in all its stores." Background When Kmart filed for Chapter 11 protection in January 2002, it requested that the Bankruptcy Court designate Handleman and several other companies "critical trade vendors." The court approved this designation, and Handleman received $49 million in payment of Kmart's obligations. Being designated a critical trade vendor required Handleman to continue providing product during Kmart's Chapter 11 reorganization. Additionally, Handleman did not assert at that time certain rights it would have been entitled to claim had it not been named a critical trade vendor. These included the opportunity to offset Kmart's pre-petition indebtedness by the return of pre-petition merchandise. One creditor later appealed the Bankruptcy Court's critical trade vendor order to the United States District Court. Handleman was not notified of that appeal. The District Court recently ruled that the Bankruptcy Court's designation regarding critical trade vendors was not appropriate under the Bankruptcy Code. The District Court's order did not require repayment of the amounts received by the critical trade vendors. Kmart immediately appealed the District Court's ruling to the United States Court of Appeals. Handleman subsequently was permitted to intervene and participate in that appeal. Handleman is asserting that it was properly designated a critical trade vendor and appropriately received payment of the $49 million. Kmart recently filed a complaint before the Bankruptcy Court asking that the $49 million be reimbursed. Handleman believes that the Court of Appeals will rule in its favor and no repayment of any amount would be required. However, no assurance can be given as to the outcome of the appeal. Handleman's position is that, as a result of being named a critical trade vendor, the economic concessions it made were substantially equivalent to the $49 million payment received. Handleman Company is comprised of two operating divisions: Handleman Entertainment Resources and North Coast Entertainment. H.E.R. is a category manager and distributor of recorded music to mass merchants in the United States, United Kingdom, Canada, Mexico, Brazil and Argentina. As a category manager, H.E.R. manages a broad assortment of titles to optimize sales and inventory productivity in retail stores and provides direct-to- store shipments, marketing and in-store merchandising. NCE's Anchor Bay Entertainment unit is an independent home video label which markets a vast collection of popular titles on DVD and VHS that range from children's classics to exercise to suspense and horror. LEAP WIRELESS: Hires UBS Warburg to Render Financial Advice ----------------------------------------------------------- Eric D. Brown, Esq., at Latham & Watkins LLP, in Los Angeles, California, explains that Leap Wireless International Inc., and its debtor-affiliates seek to employ UBS Warburg LLC as their financial advisors to, inter alia: -- provide advisory services in connection with restructuring the Debtors' liabilities, -- assist with evaluating any business combination, settlement, merger or acquisition opportunities, -- assist in the efforts to obtain confirmation of the Debtors' plan of reorganization, and, if needed, -- provide testimony at confirmation regarding feasibility and financial matters pursuant to the Debtors' plan of reorganization. The Debtors believe that UBS Warburg, a leading investment bank in, among other areas, mergers and acquisitions, bank financings and public and private securities offerings involving both debt and equity, is well qualified to provide financial advisory services because of its substantial experience in restructuring and bankruptcy reorganizations, particularly in the telecommunications industry. In the past, Mr. Brown notes that UBS Warburg has provided services in many recent financing and restructuring transactions, including those of American Telecasting; Candescent Technologies Corporation; Compass Aerospace; Doman Industries Limited; Grupo Simec; Iridium LLC; MCI WorldCom; NextWave Personal Communications, Inc.; NTELOS Inc.; PhaseMetrics, Inc.; Qwest Communications International; Redback Networks, Inc.; Seminis, Inc. and United Pan Europe Communications N.V. Given UBS Warburg's background, expertise, reputation and historical performance, the Debtors believe that UBS Warburg has the capability and experience to provide the requested services and is both well qualified and uniquely able to provide services to the Debtors and the estates in an efficient manner. On August 28, 2002, Mr. Brown relates that the Debtors and UBS Warburg executed an engagement letter under which UBS Warburg agreed to act as their exclusive financial advisor in connection with any Restructuring Transaction. UBS Warburg has agreed to continue to act as the Debtors' exclusive financial advisor in these Chapter 11 cases and to perform these services: A. Advising and assisting the Debtors in analyzing, structuring and negotiating any Restructuring Transaction; including, without limitation, providing reasonable and customary assistance to consummate any transaction, including but not limited to, providing in any in-court restructuring customary expert testimony relating to financial matters -- including the feasibility of any plan of reorganization and the value of any reorganization securities issued or to be issued; B. Assisting the Debtors in soliciting tenders and consents in connection with any Restructuring Transaction, except to the extent that the Restructuring Transaction is intended to comply with the requirements of Section 3(a)(9) of the Securities Act of 1933, as amended; and C. Advising and assisting the Debtors in analyzing a potential private equity or equity linked financing and identifying and contacting prospective purchasers and if the Debtors determine to pursue a Private Equity Financing, advising and assisting the Debtors in negotiating the Private Equity Transaction. Steven D. Smith and Stanley Holtz are the UBS Warburg Managing Directors who will have primary responsibility for the engagement. They will be assisted by other professionals at UBS Warburg as may be required or appropriate from time to time. UBS Warburg intends to apply to this Court for payment of compensation and reimbursement of out-of-pocket expenses in accordance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules and in accordance with the Court's interim and final fee procedures. UBS Warburg will charge Leap and Cricket these fees for its professional services: A. A $400,000 retainer fee, which the Debtors paid in September 2002; B. A $200,000 monthly cash advisory fee. After the commencement of these Chapter 11 cases, the Monthly Advisory Fee will be paid by Cricket Communications, Inc., in advance, on the 15th day of each month during the term of the engagement. No portion of the Monthly Advisory Fee will be credited against any other fee payable to UBS Warburg; C. In the event the Restructuring Transaction is consummated, a $3,350,000 transaction fee, to be paid by Cricket Communications, Inc. The Transaction Fee will be earned and payable after the effective date of a plan of reorganization by the Debtors; D. If the Company consummates a Private Equity Financing other than a Qualcomm Transaction, Cricket Communications, Inc. will pay UBS Warburg in cash at the closing a 5% gross spread on the aggregate amount of the financing; and E. The reimbursement of all reasonable expenses incurred by UBS Warburg in connection with the services rendered to the Debtors, including the reasonable fees, disbursements and other charges of its legal counsel. The fees and expenses provided for in the Engagement Letter are the product of extensive arm's-length negotiations and are typical of fee structures typically utilized by UBS Warburg and other leading financial advisory firms, which do not bill their clients on an hourly basis. All fees and expenses, which accrue prior to confirmation, will be subject to Bankruptcy Court approval through the filing of a final fee application in accordance with the provisions of the Bankruptcy Code, Bankruptcy Rules and Local Rules and Orders of the Court. Mr. Smith assures the Court that UBS Warburg has not been engaged by and does not represent any creditors or other parties-in- interest in these Chapter 11 cases, or their attorneys, in any matter that is adverse to the interests of the Debtors as debtors-in-possession. To the best of the Debtors' knowledge, information and belief, UBS Warburg: (i) does not hold any interest adverse to the Debtors as debtors-in possession or their estates with respect to the matters on which the Firm is to be engaged; and (ii) is a "disinterested person", as that term is defined in Section 101(14) of the Bankruptcy Code. Objections (1) Informal Vendor Debt Committee Gerald N. Sims, Esq., at Pyle Sims Duncan & Stevenson, in San Diego, California, tells the Court that over the past few months, the Informal Vendor Debt Committee has been working with the Debtors and UBS Warburg LLC to try and negotiate an acceptable agreement in connection with UBS' retention. The UBS retention issue has a direct impact on the holders of Cricket Communications Inc.'s senior secured debt, as the UBS fees will be paid in whole or part by these creditors' cash collateral. In mid-May 2003, the Informal Vendor Debt Committee believed that it had an agreement with the Debtors and UBS as to the terms of the Firm's retention. The Informal Vendor Debt Committee is currently working with the Debtors to resolve this "misunderstanding." Until this issue has been resolved, the Informal Vendor Debt Committee asks the Court not to enter an order approving UBS' retention on the terms set forth in the application. (2) Official Committee of Unsecured Creditors While the Committee has had discussions with the Debtors regarding the terms of UBS' retention prior to the filing of the Debtors' application, the Committee had not formally consented to UBS' retention. Moreover, based on recent discussions with counsel to the Debtors and the Informal Vendor Committee, it appears that the proposed terms of UBS' retention will be subject to further modification. Accordingly, the Committee asks the Court not to enter an order approving UBS' retention until it has had the opportunity to review the final terms of UBS' retention. (Leap Wireless Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900) LEVEL 3 COMMS: Affirms Guidance for Q2 and Full Year 2003 --------------------------------------------------------- Level 3 Communications, Inc. (Nasdaq: LVLT) reaffirmed financial guidance for the second quarter and full year 2003. Level 3 is reaffirming the projections that the company issued on April 24, 2003, although certain line item components of its consolidated guidance numbers may be different from what was presented in Level 3's first quarter 2003 earnings press release. Level 3 (Nasdaq: LVLT), whose March 31, 2003 balance sheet shows a total shareholders' equity deficit of about $58 million, is an international communications and information services company. The company operates one of the largest Internet backbones in the world, is one of the largest providers of wholesale dial-up service to ISPs in North America and is the primary provider of Internet connectivity for millions of broadband subscribers, through its cable and DSL partners. The company offers a wide range of communications services over its broadband fiber optic network including Internet Protocol (IP) services, broadband transport, colocation services, Genuity managed services, and patented Softswitch-based managed modem and voice services. Its Web address is http://www.Level3.com The company offers information services through its subsidiaries, (i)Structure and Software Spectrum. For additional information, visit their respective Web sites at http://www.softwarespectrum.comand http://www.i-structure.com LEVEL 3 COMMS: Offering $250 Million of Convertible Senior Notes ---------------------------------------------------------------- Level 3 Communications, Inc. (Nasdaq: LVLT) is offering $250 million aggregate principal amount of its Convertible Senior Notes due 2010 in an underwritten public offering. The company will also grant to the underwriters an option to purchase an additional $37.5 million aggregate principal amount of its Convertible Senior Notes solely to cover over-allotments. Level 3 intends to use the net proceeds for working capital, capital expenditures and other general corporate purposes, including new product development, debt repurchases and acquisitions. The offering is being made by a group of underwriters led by Citigroup and other additional co-managers that the company expects to select. Citigroup will be the sole book running manager. The company currently expects that the offering will be completed in July 2003. A registration statement relating to the Convertible Senior Notes has been declared effective by the Securities and Exchange Commission. Offers and sales of the Convertible Senior Notes may be made only by the related prospectus and prospectus supplement, which may be obtained from Citigroup Global Markets Inc., 390 Greenwich Street, New York, N.Y., 10013. Level 3 (Nasdaq: LVLT), whose March 31, 2003 balance sheet shows a total shareholders' equity deficit of about $58 million, is an international communications and information services company. The company operates one of the largest Internet backbones in the world, is one of the largest providers of wholesale dial-up service to ISPs in North America and is the primary provider of Internet connectivity for millions of broadband subscribers, through its cable and DSL partners. The company offers a wide range of communications services over its broadband fiber optic network including Internet Protocol (IP) services, broadband transport, colocation services, Genuity managed services, and patented Softswitch-based managed modem and voice services. Its Web address is http://www.Level3.com The company offers information services through its subsidiaries, (i)Structure and Software Spectrum. For additional information, visit their respective Web sites at http://www.softwarespectrum.comand http://www.i-structure.com MAGELLAN HEALTH: Secures Improved Equity Investment Commitment -------------------------------------------------------------- Magellan Health Services, Inc. (OCBB:MGLH) announced that the terms of its equity investment commitment agreement with Onex Corporation have been revised to increase the price to be paid by Onex to a price that is based on a pre-money equity valuation of $285 million (C$385 million), compared with $185 million (C$250 million) under the original Onex commitment. The terms were revised after Magellan received competing interest concerning an equity investment commitment. As under the original Onex commitment, the revised commitment provides for Magellan to receive an equity investment of $150 million upon consummation of its Chapter 11 reorganization. The revised Onex equity commitment has the support of the Official Committee of Unsecured Creditors appointed in its Chapter 11 case, and Magellan stated that it continues to believe that it will emerge from Chapter 11 in September 2003. Steven J. Shulman, chief executive officer of Magellan Health Services, stated, "Our higher equity value is great news for our customers, providers, employees and creditors, because it means that serious investors are demonstrating increasing interest in Magellan's future." "I am very pleased that Onex remains committed to its investment. I again thank Magellan's customers and providers for their loyalty and our employees for their dedication," Mr. Shulman concluded. Robert LeBlanc, managing director of Onex Corporation, stated, "We have confidence in Magellan's market, its current and potential performance, and its management team, and we are pleased to reaffirm our partnership with Magellan through this equity investment commitment." "The Chapter 11 process has successfully enhanced the prospective strength and value of reorganized Magellan," said Saul E. Burian, director of Houlihan Lokey Howard & Zukin, which is the financial advisor to the Official Committee of Unsecured Creditors. "Magellan's attractive business and its equity investment commitment give us great confidence in its ability to perform according to its plans and achieve its potential when it exits Chapter 11." The complete terms of the revised equity investment commitment will be filed with the U.S. Bankruptcy Court for the Southern District of New York Bankruptcy Court, and will be incorporated into a forthcoming amended Plan of Reorganization and Disclosure Statement. The revised investment commitment retains substantially the same components as the original commitment, with the following exceptions: -- The rights offering to be made available to the Company's general unsecured creditors, including holders of note claims, has been increased to $75 million of new equity in reorganized Magellan, or approximately 17.2%, compared with $50 million, or approximately 14.9% of the new equity in reorganized Magellan. As under the original Onex commitment, Onex has agreed to purchase all such equity that is not purchased by the Company's general unsecured creditors and holders of note claims. (As a result of the expansion of the rights offering, the remainder of Onex's $150 million commitment will be a $75 million direct investment in exchange for 17.2% of the new equity in reorganized Magellan, compared with $100 million in exchange for 29.9%); -- For holders of unsecured claims who elect the Cash Option, the price that Onex has committed to pay will be based on a pre- money equity valuation of reorganized Magellan of $225 million, compared with $150 million under the original commitment; -- The cash payment of up to $50 million to holders of unsecured claims who elect the Cash Option will be funded entirely by Onex, and if the Cash Option is fully subscribed Onex would acquire from participants in the Cash Option an additional 14.6% of the new equity in reorganized Magellan; and -- The two directors of reorganized Magellan's initial seven member board that are to be designated by the official creditors committee shall have initial terms of three years. The Onex commitment is subject to certain conditions as set forth in the commitment letter, including approval by the Bankruptcy Court having jurisdiction over Magellan's Chapter 11 case. The implementation of the investment by Onex and the effectiveness of Magellan's restructuring are conditioned on confirmation and consummation of the Plan in accordance with the U.S. Bankruptcy Code. Gleacher Partners LLC is serving as financial advisor to Magellan Health Services, and Weil, Gotshal & Manges LLP is bankruptcy counsel to Magellan Health Services. Headquartered in Columbia, Md., Magellan Health Services (OCBB:MGLH), is the country's leading behavioral managed care organization, with approximately 65 million covered lives. Its customers include health plans, corporations and government agencies. Summary Terms of the Revised Onex Equity Commitment The revised Onex equity commitment contains three principal components. First, Onex has agreed to purchase $75 million of equity of reorganized Magellan to the extent such equity is not purchased by the Company's general unsecured creditors, including holders of note claims, who will be offered the right to purchase such equity by the Company under the Plan. The equity issued pursuant to this rights offering will equal approximately 17.2% of the equity of reorganized Magellan. Second, Onex will invest $75 million in reorganized Magellan in exchange for new equity that also will represent approximately 17.2% of the outstanding common equity of reorganized Magellan. Under the third component of the Onex commitment, the Plan will be amended to provide holders of unsecured claims the opportunity to elect to receive cash in lieu of a portion of the shares of reorganized Magellan that they would otherwise be entitled to receive under the Plan, up to a maximum of $50 million for the class (the "Cash Option"). Those holders who elect the Cash Option will receive their pro rata share of up to $50 million in cash, which will reduce their distribution of common stock in reorganized Magellan by a number of shares that is equal in value to the cash received, based upon an equity valuation of reorganized Magellan of $225 million. This cash payment of up to $50 million will be funded by Onex, and if the Cash Option is fully subscribed, Onex would acquire from participants in the Cash Option an additional 14.6% of the new equity in reorganized Magellan. Of the total investment of $150 million in the Company, the Company will use approximately $50 million to $75 million to reduce debt. The proceeds of the $150 million equity investment not used to reduce debt will be available to the Company for general corporate purposes. If creditors elect to receive $50 million in cash under the Cash Option and no creditors elect to participate in the rights offering, Onex would make a total equity investment of $200 million in the equity of reorganized Magellan and own approximately 49% of the new equity in reorganized Magellan. If no creditors elect the Cash Option and creditors participate fully in the rights offering by investing $75 million in the Company, Onex's total investment would be $75 million and it would own approximately 17.2% of the new equity in reorganized Magellan. The equity Onex acquires initially will have 50% of the voting rights with respect to matters to be voted on by common equity holders. The board of directors of Reorganized Magellan will consist of seven members, five to be designated by Onex and two to be designated by the official creditors committee (which two will have initial terms of three years). Thereafter, Onex will have the right to elect three of the seven directors of reorganized Magellan, all common equity holders voting together will have the right to elect two directors (with Onex having 50% of the vote) and all common equity holders other than Onex will have the right to elect two directors (after the expiration of the three-year term of the two directors designated by the creditors committee). Onex's voting rights will not be transferable upon the sale of any of its shares, and Onex will be subject to certain minimum equity ownership thresholds and mandatory conversion triggers, as detailed in the commitment letter. MARTIN INDUSTRIES: Fails to Meet Form 10-K, 10-Q Filing Deadline ---------------------------------------------------------------- On December 27, 2002, Martin Industries, Inc. filed a voluntary petition for relief in the United States Bankruptcy Court for the Northern District of Alabama in Decatur, Alabama under Chapter 11 of the United States Bankruptcy Code styled In re Martin Industries, Inc., Case No. 02-85553. The Company has ceased all business operations. The Company has no employees and extremely limited financial resources. As a result, the Company is unable to prepare and file annual and quarterly reports on Form 10-K and 10-Q. In reliance on Commission Release No. 34-9660, the Company is filing the monthly operating reports it is required to submit to the Bankruptcy Court pursuant to Bankruptcy Rule 2015 with the Commission on Form 8-K within 15 calendar days after each such report is due to the Bankruptcy Court in lieu of the periodic reports on Form 10-Q and Form 10-K required by the Securities and Exchange Act of 1934, as amended. Martin Industries designs, manufactures and sells high-end, pre- engineered gas and wood-burning fireplaces, decorative gas logs, fireplace inserts and gas heaters and appliances for commercial and residential new construction and renovation markets, and do-it-yourself utility trailer kits known as NuWay. MDC CORP: S&P Withdraws BB Credit Rating at Company's Request ------------------------------------------------------------- Standard & Poor's Ratings Services has withdrawn its 'BB-' long- term corporate credit rating on marketing communications and secure transaction services provider MDC Corp. Inc. at the company's request. At the same time, Standard & Poor's withdrew its 'B' rating on the company's US$86.4 million 10.5% senior subordinated notes due 2006, following MDC's redemption of these notes. Consequently, the company is no longer subject to continuous surveillance by Standard & Poor's. M/I SCHOTTENSTEIN: April and May New Contracts Jump-Up 23% ---------------------------------------------------------- M/I Schottenstein Homes, Inc. (NYSE: MHO) announced that April and May New Contracts increased 23% over the prior year period. New Contracts were 947 versus 769 in the prior year period. The Company has announced this information in preparation for certain meetings that will be held in early July. M/I Schottenstein Homes, Inc. is one of the nation's leading builders of single-family homes, having sold over 53,000 homes. The Company's homes are marketed and sold under the trade names M/I Homes and Showcase Homes. The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Tampa, Orlando and Palm Beach County, Florida; Charlotte and Raleigh, North Carolina; Virginia and Maryland. As reported in Troubled Company Reporter's June 11, 2003 edition, Fitch Ratings affirmed the implied rating of 'BB' for the senior unsecured debt of M/I Schottenstein Homes, Inc. The rating applied to the unsecured bank credit facility. The 'B+' rating for the company's senior subordinated notes was affirmed. The Rating Outlook is Stable. The ratings reflect MHO's healthy financial structure, solid coverages and strong operating performance consistent with the current point in the housing cycle. The company's debt-to-EBITDA of 0.6 times and debt-to-capital ratio of approximately 19% are considered conservative for the rating and enhance financial flexibility in the event of an economic downturn. The rating incorporates the potential for leverage to rise from current levels. MIRANT CORP: Bondholders Support June 30 Amended Exchange Offers ---------------------------------------------------------------- Mirant (NYSE: MIR) has been advised by representatives of an ad hoc committee of the company's bondholders that the holders of approximately 66.67 percent of those bonds have indicated their support for the company's exchange offers and related pre-packaged plan of reorganization, as amended on June 30, and that they intend to tender and vote accordingly. The ad hoc committee represents holders of the company's 2.5 percent convertible senior debentures due 2021 and its 7.4 percent senior notes due 2004. "With 10 business days to go in our offer, this amount of support from our bondholders is a crucial component of our effort to achieve a successful out-of-court restructuring," said Marce Fuller, president and chief executive officer, Mirant. "We are increasingly optimistic that we will reach the 85 percent minimum acceptance required from our bondholders." In the June 30 amended exchange offers, Mirant is offering to exchange for each $1,000 principal amount of bonds: $1,000 principal amount of new senior secured notes due in 2008, warrants to acquire 22.47 shares of the company's common stock, and $5 in cash. Assuming 100 percent acceptance of the exchange offers, the warrants would represent, in aggregate, 4 percent, of the company's stock on a fully diluted basis. These warrants will be priced six months after the closing of the exchange offers at 120 percent of the 30-day average closing price of Mirant's common stock on the New York Stock Exchange. Mirant also announced that Mirant Americas Generation LLC, a Mirant subsidiary, is offering $1,000 of principal amount of new secured debt with an interest rate of 8.25 percent in exchange for each $1,000 principal amount of the $500 million face amount of its outstanding 7.625 percent senior notes due 2006. In lieu of warrants to acquire Mirant common stock, the company will make an additional $10 cash payment per $1,000 principal amount. Securities laws prevent MAG from offering Mirant warrants. Mirant also disclosed the terms it is offering its bank lenders to restructure approximately $3.1 billion of bank debt. The revised proposal includes up to $1.1 billion of first lien capacity ahead of the lien proposed to be shared by banks and bondholders on substantially all of the company's unencumbered assets. In addition to securing $300 million of bank debt owed by Mirant's subsidiary MAG, that first lien capacity will be available to support letters of credit as well as new financing, which will improve the company's liquidity. Although Mirant has received informal indications that the revised terms may be acceptable to certain individual banks, the company cautioned that neither the bank agents, nor any committee representing the banks, have agreed to any terms. "We plan to continue discussions with our banks over the next two weeks, and we remain hopeful we will be able to reach a consensual out-of-court restructuring," said Fuller. The exchange offers will expire at midnight EDT on July 14. The terms of these offers are fully described in the exchange offers and disclosure statement documents provided by the company to its targeted bondholders. The documents describing the amended exchange offers and solicitation of acceptances of the pre-packaged plan of reorganization have been filed with the Securities and Exchange Commission. The documents are also available on the company's Web site, at http://www.mirant.com As previously announced, Mirant is seeking concurrent approval of both its exchange offers and a pre-packaged plan of reorganization. The pre-packaged plan is a contingency in case the company is not able to get the required support for an out-of- court restructuring. The Mirant exchange offers currently require holders of 85 percent of the face amount of the Mirant debt sought for exchange to agree to a new plan. Refinancing of the credit facilities requires the agreement of all of the company's banks. A pre-packaged Chapter 11 reorganization only requires the approval of two-thirds in amount, and more than one-half in number, of each class of solicited creditors who actually vote on the plan. Upon confirmation of a plan of reorganization, all affected creditors are bound by its terms, whether they voted or not and regardless of whether they voted in favor or not. Mirant is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or controls more than 21,000 megawatts of electric generating capacity globally. It operates an integrated asset management and energy marketing organization from our headquarters in Atlanta. NAT'L EQUIPMENT: Case Summary & 50 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: National Equipment Services 1603 Orrington Avenue Suite 1600 Evanston, Illinois 60201 Bankruptcy Case No.: 03-27626 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Rebel Studio Rentals 03-27634 NES Shoring 03-27643 NES Management Service Corp 03-27651 NES Equipment Services Corporation 03-27660 NES Partners Inc. 03-27665 Falconite Rebuild Center 03-27671 NES Indiana Partners 03-27680 NES Companies 03-27684 NES Equipment Rental 03-27688 NES Traffic Safety 03-27691 Type of Business: The Debtor rents specialty and general equipment to industrial and construction end users. Chapter 11 Petition Date: June 27, 2003 Court: Northern District of Illinois (Chicago) Judge: Pamela S. Hollis Debtors' Counsel: James A. Stempel, Esq. Kirkland & Ellis 200 E Randolph Drive Chicago, Illinois 60601 Tel: 312-861-2000 Estimated Assets: More than $100 Million Estimated Debts: More than $100 Million Debtor's 50 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ JLG Industries Inc. $973,412 1 JLG Drive McConnellsburg, PA 17233-052 Tel: 717-485-5161 Fax: 717-485-6417 Chris Mellot Genie Industries $568,262 12506 Collections Center Drive Chicago, IL 60693 536-1800 Tel: 800-536-1800 Fax: 888-274-6192 Roger Brown 3M $709,168 Building 225-58-08 St. Paul, MN 55133 Tel: 888-763-2519 Fax: 888-763-2592 Dave Tillman AI Credit (Imperial AI Credit Companies) $569,352 615 Davis Dr. Suite 700 Durham, NC 27713 Tel: 877-902-4242 Fax: 630-435-1025 Terex Corporation $567,159 12460 Collections Center Drive Chicago, IL 60693 Tel: 708-935-1243 Fax: 708-430-5331 Murray Scott Ennis Paint, Inc. $451,609 1509 South Kaufman Ennis, TX 75120 Tel: 972-875-7272 Fax: 972-878-0685 Sherwin Williams $399,303 2416 Teal Road Lafayette, IN 47905-2220 Tel: 765-477-9893 Fax: 765-477-9893 Ziese Manufacturing Co. Inc. $378,574 Total 209 NW 111 St. Oklahoma City, OK 73114 Tel: 405-751-1925 Fax: 405-751-1928 CNA Risk Management $373,862 C.N.A. Plaza 333 S. Wabash Avenue Chicago, IL 60604 Tel: 312-822-6445 Fax: 312-817-3855 Bent Manufacturing $285,539 17311 Nichols Street Huntington Beach, CA 92647 Tel: 714-842-0600 Fax: 714-842-2959 Celerant Consulting $256,668 45 Hayden Avenue Lexington, MA 02421 Tel: 781-674-0400 Fax: 781-274-7204 John Deere Construction Co. $248,324 PriceWaterhouse Coopers LLP $238,830 United Rentals #4321527 $174,664 RMI Corporation $160,335 Omniquip Parts Worldwide $155,519 L.B. Foster Company $154,891 Transdyn Controls, Inc. $149,832 Midstate Manufacturing $148,582 Walpar Incorporated $142,777 ADDCO $142,162 Rayovac Corporation $141,957 Services and Materials Company $127,131 Hyster Company $125,960 Tennant Sales & Service Co. $119,746 Work Area Protection Corp. $115,591 Gulf Industries $111,870 Iron Rhino $104,000 Curtis 1000 Inc. $101,841 Sullair Corporation $100,253 Dambach, Inc. $95,895 Skyjack Inc. $94,917 Thorstad Chevrolet $91,334 St. Joseph County Treasurer $90,482 Cataphote $86,578 GE Capital Fleet $86,177 Custom Services International $84,740 Crown Lift Trucks $83,869 Ingersoll-Rand $83,786 Four Star Transportation LLC $81,904 Potters Industries $80,900 Avery Dennison $80,258 Interstate Highway Sign $78,598 KAR Products $75,761 GEHL $74,388 Trelleborg Road Tape $73,599 Traffix Devices, Inc. $71,317 Daewoo Heavy Industries $70,575 Brookfield Fabricating Corp. $69,305 Multiquip Inc. $68,344 NAT'L STEEL: Judge Squires Clears LaSalle & Tinplate Compromise --------------------------------------------------------------- National Steel Corporation, its debtor-affiliates and Tinplate Partners International, Inc. are parties to a secured financing arrangement . . . and Tinplate owes the Debtors some money. Tinplate also happens to be indebted to LaSalle Business Credit Inc. National Steel and LaSalle entered into a Subordination Agreement dated April 10, 2000. Under that Agreement, the parties agreed that the Debtors held three categories of claims against Tinplate: (i) A secured claim; (ii) A claim for "reimbursable obligations"; and (iii) A claim for unpaid trade receivables. The Debtors agreed to subordinate their secured claim and the claim for reimbursable obligations -- but not the trade receivables claim -- to LaSalle's secured claims against Tinplate. David N. Missner, Esq., at Piper Rudnick, in Chicago, Illinois, informs the Court that Tinplate is the debtor in a Chapter 11 proceeding pending before the U.S. Bankruptcy Court for the Northern District of Indiana, Hammond Division. Tinplate sold substantially all of its property in 2002 and now has $172,000 available for "carved-out" distribution to unsecured creditors. Tinplate has scheduled the Debtors as holding a $9,000,000 unsecured claim -- a $6,000,000 claim for the trade receivables plus a $3,000,000 deficiency claim. Accordingly, Tinplate intends to distribute to the Debtors $122,687, its pro rata share of the $172,000 it is holding for unsecured creditors. LaSalle objected to Tinplate distributing $122,687 to the Debtors, arguing that the Subordination Agreement does not permit the Debtors to step ahead of LaSalle as to any of National Steel's secured, subordinated claims. Rather than litigate the priority of the three categories of Tinplate debt to National Steel, LaSalle and the Debtors entered into a Settlement under which the Debtors will permitted to receive 100% of the $122,687 that is attributable to their trade claim and 50% of the $122,687 that is attributable to their secured claim for principal and reimbursable obligations. Thus, of the $122,687 due from Tinplate, the Debtors will receive $81,332 on account of its trade claim of nearly $6,000,000. Of the remaining $40,666 to come from Tinplate, the Debtors will receive half, $20,333, with LaSalle receiving the other half. As part of the Settlement, LaSalle and National Steel will have no further claims against each other as to any Tinplate assets. Mr. Missner asserts that the Settlement should be approved because: (a) the Debtors will recoup a portion of its claim, in cash, without the necessity for further litigation of the Subordination Agreement; (b) the Settlement is within the range of reasonableness if LaSalle and the Debtors had litigated this matter; and (c) Tinplate simply does not have sufficient assets to pay more than is being proposed in its distribution report. Thus, the amount at issue with LaSalle is really not that large in the scheme of the Tinplate case, and the Debtors do not believe they are relinquishing a lucrative amount. Accordingly, Judge Squires approves the Debtors' compromise with LaSalle. (National Steel Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 609/392-0900) NATIONAL WINE & SPIRITS: Reports Improved 2003 Financial Results ---------------------------------------------------------------- National Wine & Spirits, Inc., increased both product and distribution fee revenue for the year ended March 31, 2003, as compared to the prior annual period. For the year ended March 31, 2003, net income was $15.8 million versus $7.5 million for the prior year period, while EBITDA was $34.7 million, versus $27.7 million for the prior year period. The revenue increase was primarily from the Company's United States Beverage, LLC division, which experienced significant increases in sales volume due to the nationwide distribution of Grolsch beers and Seagram Coolers that commenced in January 2002 and April 2002, respectively. Net income growth was primarily attributable to a vendor settlement payment and gains from the discounted repurchases of the Company's senior notes. Although the increased volume from the Company's United States Beverage division contributed to the increased sales for the annual period ended March 31, 2003, net income and EBITDA were offset by decreased sales volume and lower profitability due to the loss of the Pernod and Diageo distribution rights in certain markets. Total product revenue increased $30.3 million, or 4.6%, to $689.9 million for the year ended March 31, 2003 versus $659.6 million for the prior year period. The revenue increase for the year ended March 31, 2003 as compared to the prior year was primarily due to increased sales by the Company's USB division. Case and dollar volume of wine in the product sales divisions remained stable; increasing 5.6% and 2.4%, respectively, during the current annual period ended March 31, 2003 over the prior year period. Spirits case and dollar volume in the product sales divisions declined 1.1% and 3.8%, respectively, primarily due to the loss of certain distribution rights in the Company's Illinois market. Fee revenue for the year ended March 31, 2003 increased 4.7% on lower case sales from the comparable prior annual period. The Company was able to increase fee revenue due to a $0.16 per case fee increase approved by the State of Michigan for 2002 and greater brokerage fee revenue for the year ended March 31, 2003 as compared to the prior year period. Total operating expenses increased 10.3% to $144.6 million for the year ended March 31, 2003 from $131.0 million for the prior year period. Increased selling expenses and administrative support of the USB division were primarily responsible for the total operating expense increase from the prior year period. Net income of $15.8 million for the year ended March 31, 2003 was $8.3 million greater than the prior year period. The increase in income from the Company's vendor settlement payment, gain from repurchasing its senior notes, and increased USB profitability, was partially offset by the decline in income from the Illinois market. Total debt of $98.3 million at March 31, 2003 as compared to March 31, 2002 decreased due to the Company's repurchase of $17.9 million of its senior notes on the open market. The Company's outlook for fiscal 2004 is for lower profit and EBITDA levels due to the loss of the brands in the Company's Illinois market, as compared to the prior fiscal year. EBITDA should not be construed as an alternative to operating income or net cash flow from operating activities and should not be construed as an indication of operating performance or as a measure of liquidity. As consolidations and supplier realignments continue within the Illinois market, the Company has analyzed its operations in Illinois and has taken steps to appropriately size its workforce in relation to its customers' and suppliers' needs. As it adjusts the size and scope of its Illinois operations, the Company will continue to concentrate on building customer and supplier relationships and maintaining the infrastructure necessary to operate its Illinois statewide business with lower costs and increased efficiencies. The Company has also discontinued warehousing operations in its Champaign, Illinois and Peoria, Illinois facilities in order to reduce costs, but it continues to use those locations as cross-docking and office facilities. Continuing efforts are also being made to replace lost revenue in Illinois. On January 30, 2003, the Company entered into an agreement in principle to form a strategic alliance with Glazer's Wholesale Drug Company for the purpose of distributing alcohol-based beverages in the State of Illinois. On February 27, 2003, the Company and Glazer entered into a management services agreement under which Glazer would provide management assistance and consulting services in Illinois. A separate contribution agreement was signed on March 25, 2003, which provided that the parties may agree in the future to conduct operations in Illinois through a new entity to be equally owned by NWS-Illinois and Glazer. Stable to increasing revenue and EBITDA in the Indiana, Michigan, and USB operations are currently expected to mitigate the loss of revenue in the Illinois market for fiscal 2004. Additionally, the Company will continue to benefit in the near term from the collection of accounts receivable and inventory liquidation related to lost distribution rights in Illinois. Representatives of Glazer and the Company also continue to pursue new business opportunities in Illinois. At the same time, the size and scope of the Illinois business will be the subject of on-going analysis. The Company and Glazer are both committed to the profitability of the Illinois operation given Glazer's agreement to fund one-half of operating losses as defined in the management services agreement between Glazer and the Company. EBITDA should not be construed as an alternative to operating income or net cash flow from operating activities and should not be construed as an indication of operating performance or as a measure of liquidity. The Company will utilize the positive cash flow from the downsizing of the Company's Illinois operations, proceeds from the vendor settlement payment, borrowings under its line of credit and existing cash to fund operating costs, interest expense, and possibly further senior note repurchases. By reducing the Company's interest expense through open market repurchases of senior notes, aggressive cost reduction initiatives in its Illinois business, and stable to increasing earnings and cash flow from Indiana, Michigan, and USB businesses, the Company expects to maintain adequate earnings and cash flow to fund working capital and debt service needs for the year ending March 31, 2004. Indianapolis-based National Wine & Spirits, Inc. is one of the leading distributors of alcohol beverages in the U.S. The Company has a strong portfolio that includes brands from Fortune Brands [FO], Diageo [DEO], Louis-Vuitton Moet Hennessey [LVMHF], Pernod Ricard [PDRDF], Constellation Brands [STZ], Brown-Forman [BFA; BFB], Beringer Wine [BERW], Allied Domecq [AED], Sebastiani Winery, Banfi, Kendall Jackson, and Southcorp [STHHY] among others. As previously reported, Standard & Poor's Ratings Services lowered its corporate credit rating on alcoholic beverage distributor National Wine & Spirits Inc., to 'B-' from 'B+'. At the same time, Standard & Poor's lowered its 'B' senior unsecured debt rating for the company to 'CCC+' and lowered its 'BB-' senior secured bank loan rating for the company to 'B'. All ratings remain on CreditWatch with negative implications where they were placed January 6, 2003. About $115 million of total debt was outstanding at December 31, 2002. NEENAH FOUNDRY: Gets Additional $110 Mill. Financing Commitments ---------------------------------------------------------------- Neenah Foundry Company has received commitments for up to an additional $110 million of financing to support the Company's proposed financial restructuring. Together with the previously announced commitments from Fleet Capital Corporation, Neenah has now arranged for all of the new financing required to complete the Company's proposed financial restructuring. A substantial majority of these latest commitments are from holders of the Company's outstanding 11-1/8% series A, B, D and F senior subordinated notes due 2007, and are intended to backstop the Company's offering of senior second secured notes to be issued in connection with its proposed financial restructuring. As previously announced, the proposed restructuring would eliminate a substantial amount of debt, significantly reduce cash interest expense payments, and improve the Company's balance sheet and operating flexibility. Having arranged the necessary financing, Neenah also announced that it is launching a solicitation of the holders of its 11-1/8% Notes to approve the proposed financial restructuring through a "prepackaged" plan of reorganization under Chapter 11 of the Bankruptcy Code. The Company has also received an extension of the Forbearance Agreement under its existing credit facility that gives it an additional 30 days if necessary for such solicitation. The Company expects that it will implement its financial restructuring no later than September 30, 2003. "We appreciate the constructive dialogue we've had with the Ad Hoc Committee of our noteholders and we look forward to moving quickly to complete our financial restructuring," said William Barrett, Chief Executive Officer of Neenah. Barrett continued, "We are encouraged that these noteholders have committed to increase their investments in Neenah, and we see their actions as a strong vote of confidence in the Company and our strategic direction. Similarly, we appreciate the support we've received from our customers, suppliers, employees and lenders as we continue to operate our business as usual throughout this restructuring process. Upon a successful implementation of our plan of reorganization, we will have significantly less debt, more operating flexibility, and will be in a stronger competitive position as the economy and our industry rebounds." The key terms of the proposed restructuring include: -- The Company's existing senior secured credit debt would be refinanced by a new senior credit facility consisting of a revolver and a term loan, and the issuance of new senior second secured notes. -- Holders of the Company's existing 11-1/8% Notes would receive their pro rata share of (i) new senior subordinated notes in the aggregate principal amount of $100 million, (ii) approximately 47.5% of the fully-diluted outstanding shares of the Company's parent, ACP Holdings, after giving effect to restructuring, and (iii) a $30 million cash payment. -- Trade claims to the Company's suppliers would be paid in the ordinary course, consistent with the Company's normal business practices. -- The existing common stock of the Company's parent, ACP Holdings, would be cancelled. According to the terms of the proposed restructuring, holders of the Company's existing 11-1/8% Notes would also be permitted to subscribe for their pro rata share of units comprised of (x) new senior second secured notes, and (y) warrants for shares of stock of the Company's parent, ACP Holdings. To the extent that any holders of the Company's existing 11-1/8% Notes elect not to purchase their pro rata share of the units to be offered by the Company, the Company has arranged for other parties, including certain current holders of the 11-1/8% Notes, to purchase them. The final restructuring will be subject to normal conditions including funding of the exit financing facilities, which include the sale of the senior second secured notes. The complete terms of the restructuring are contained in the Company's Disclosure Statement, which is now being distributed to the holders of the Company's 11 1/8% Notes. The Company's Disclosure Statement contains important information about the Company, the restructuring, the new financing commitments, and related matters. Neenah Foundry Company manufactures and markets a wide range of iron castings and steel forgings for the heavy municipal market and selected segments of the industrial markets. Neenah is one of the larger independent foundry companies in the country, with leading market share of the municipal and industrial markets for gray and ductile iron castings and forged steel products. Additional information about Neenah is available on the Company's Web site at http://www.nfco.com OWENS CORNING: Wants Approval of Insurance Settlement Agreement --------------------------------------------------------------- J. Kate Stickles, Esq., at Saul Ewing LLP, in Wilmington, Delaware, informs the Court that pursuant to an Order of the Supreme Court, New York County dated April 6, 1986, Midland Insurance Company was placed into liquidation. The Superintendent of Insurance of the State of New York, and his successors in office, was appointed the Liquidator, and vested with title to all of Midland's assets and property. Owens Corning is a named insured under certain insurance policies issued by Midland prior to 1986. According to Ms. Stickles, Owens Corning was a defendant in numerous claims for personal injury allegedly caused by asbestos or asbestos-containing products or materials. Owens Corning claimed that the Midland Policies provided coverage for its liabilities based on settlements and verdicts paid or to be paid on account of the Asbestos-Related Personal Injury Claims. Owens Corning asserts that it has received claims for amounts in excess of many billions of dollars, and that more continue to be asserted. The aggregate amounts paid and owing by Owens Corning are far in excess of the Midland Policies' total aggregate limits of liability. Owens Corning believes that $50,000,000 in products coverage is available under the Midland Policies, although Owens Corning acknowledges that Midland is entitled to set off $11,000,000 on account of amounts paid in the early 1990s by the Ohio Insurance Guaranty Association in respect of the Midland policies. The Liquidator initially disclaimed coverage under each of the Midland Policies, raising numerous defenses under the Midland Policies and at law. The parties, therefore, commenced what appeared at the time to be protracted litigation. However, after further review of the matter, and document exchanges, the Liquidator and Owens Corning entered into settlement negotiations, which ultimately culminated in a settlement agreement. By this motion, the Debtors ask the Court to approve the Settlement Agreement. The basic terms of the Settlement Agreement are: 1. Owens Corning agreed to submit, and the Liquidator agreed to accept and recommend for General Creditor allowance, claims asserted under the Midland Policies amounting to $29,000,000 for all Midland Policies; 2. Owens Corning agreed to release the Liquidator and the Midland estate from any liability more than $29,000,000 under the Midland Policies. The Settlement Agreement reserves to the Liquidator and to each of Midland's re- insurers the right to audit the records maintained by Owens Corning and by Owens Coming's counsel in connection with these claims; and 3. The Settlement Agreement is subject to approval by the New York State Court and the Court. To comply with certain requirements under the Settlement Agreement, Owens Corning has submitted claims to the Liquidator meeting all agreed criteria and sufficient to exhaust the amounts provided for under the Settlement Agreement. The Liquidator has submitted the Settlement Agreement to the New York State Court, which approved and confirmed the Settlement Agreement by Order dated May 7, 2003 thereby allowing Owens Corning a claim in the liquidation amounting to $29,000,000. Ms. Stickles asserts that the Settlement Agreement is favorable to the estate because: 1. It resolves the claims of Owens Corning against the Liquidator for coverage under the Midland Policies; 2. Certain of the issues concerning the coverage under the Midland Policies are complex and would require protracted litigation between the parties to resolve, absent consensual agreement, and could cause the Debtors to incur substantial additional legal fees, costs and other expenses, without the benefit of certainty as to the outcome; 3. There is adverse precedent by the New York State Court presiding over the Midland Liquidation on which Midland would rely in an effort to defeat coverage; and 4. The terms of the Settlement Agreement are fair and reasonable. Furthermore, payments by the Liquidator with respect to Owens Coming's claims will be made payable to Owens Corning or to the other person or entity that may be identified as the payee of the proceeds in a plan of reorganization approved by this Court. (Owens Corning Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service, Inc., 609/392-0900) PEREGRINE SYSTEMS: Reaches Partial Settlement with SEC ------------------------------------------------------ Peregrine Systems, Inc. (OTC: PRGNQ), a leading provider of Consolidated Asset and Service Management software, has reached a partial settlement with the Securities and Exchange Commission, resolving all matters except disgorgement or civil penalties, if any. The SEC's civil complaint and Peregrine's consent decree, which were filed Monday, stem from accounting irregularities that came to light in May 2002. The settlement involving allegations of financial fraud must be approved by the U.S. District Court for the Southern District of California, which is overseeing the SEC's civil complaint against the company. Among the terms of the settlement, Peregrine agreed to: (1) be enjoined from violating certain provisions of the federal securities laws; (2) comply on an accelerated basis with the rules regarding management's reporting on internal controls in accordance with Sarbanes-Oxley Act of 2002; (3) retain an internal auditor to insure that Peregrine's financial results are accurately reported; (4) establish a corporate compliance program and retain a compliance officer to perform an ongoing review of the effectiveness of Peregrine's governance systems; (5) commence a training program for Peregrine's officers and employees to prevent violations of federal securities laws; and (6) make a public statement that fully and accurately discloses the current condition of its internal control structure and its procedures for financial reporting on the effective date of its Plan of Reorganization. "The company's partial settlement with the SEC is an important step for Peregrine as the company moves toward emergence from Chapter 11 this summer," said Gary Greenfield, Peregrine's CEO, who joined the company along with other new management in June 2002. "The company has cooperated fully with the investigation by all governmental agencies since May 2002. We stand by our commitment to ensure that Peregrine's corporate governance, and financial policies and practices meet high standards." Peregrine earlier this year completed a restatement of financial results for 11 quarters in fiscal years 2002, 2001 and 2000. In addition, its board adopted a Compliance Policy, which among other things called for two new positions: corporate compliance officer and internal auditor. A compliance program is currently being established to develop company-wide, compliance-related processes and procedures under the direction of the new compliance officer. The company also formed a new board earlier this year with four outside directors who have deep technology and governance experience. Founded in 1981, Peregrine Systems develops and sells application software to help large global organizations manage and protect their technology resources. With a heritage of innovation and market leadership in Consolidated Asset and Service Management software, the company's flagship offerings include ServiceCenter(R) and AssetCenter(R), complemented by employee self service, automation and integration capabilities. Headquartered in San Diego, Calif., Peregrine's solutions facilitate the automation of business processes, resulting in increased productivity, reduced costs and accelerated return on investment for its more than 3,500 customers worldwide. PG&E CORP: Completed SEC Filings Reflect No Change to Net Income ---------------------------------------------------------------- As previously announced, PG&E Corporation (NYSE: PCG) filed a revised 2002 Form 10-K/A to reflect certain offsetting reclassifications of operating revenues and expenses, which net to zero, within its subsidiary PG&E National Energy Group. The reclassifications resulted in no change in PG&E NEG's or PG&E Corporation's reported operating income, net income, balance sheet or cash flow for the reporting period. For the year ended December 31, 2002, the revision is a reclassification of offsetting PG&E NEG revenues and expenses of $467 million, which net to zero and were strictly limited to discontinued operations. Also, for the quarter ended March 31, 2003, PG&E Corporation filed a Form 10-Q/A to reflect certain offsetting reclassifications of similar transactions within its subsidiary PG&E NEG. For the quarter, the reclassification of certain offsetting revenues and expenses in continuing operations totaled $206 million and netted to zero. The reclassifications resulted in no change in PG&E NEG's or PG&E Corporation's reported operating income, net income, balance sheet or cash flow for the period. In addition, PG&E NEG will file similar Forms 10-K/A and 10-Q/A to reflect these changes. PICCADILLY CAFETERIAS: Pursuing Strategic Options Including Sale ---------------------------------------------------------------- Piccadilly Cafeterias, Inc.'s (AMEX:PIC) Board of Directors has authorized management to pursue a range of strategic options, including a potential sale of the Company, in an effort to maximize the Company's value for the benefit of its constituencies. Phoenix Management Services, Inc., Piccadilly's new strategic advisor, will assist management in sale preparations and in inviting expressions of interest from strategic and financial buyers. J.H. Campbell, Jr., Chairman of the Board, said, "Piccadilly is confronted with multiple challenges, which, in the view of the Board, raise serious issues about the Company's ability to continue as a viable and independent going concern beyond its fiscal year ending June 29, 2004. Exploring all available options to protect the Company, its employees and the overall business has brought us to the point of considering a range of strategic options, including a potential sale of the Company." Piccadilly's recent sales declines, if not reversed, would likely result in a covenant default under the Company's principal credit facility within the next 12 months. The Company cannot guarantee that, in the event of a default, it could obtain covenant waivers or obtain a replacement facility on commercially reasonable terms. The Company previously announced that its unfunded pension liability is expected to increase as of its fiscal year ending July 1, 2003. As with many other pension plans around the country, the liability increase reflects a deterioration in the funded status of the Company's defined benefit plan, due to declines in the equity markets and market interest rates for much of the past year. Beginning in 2004, the Company will be required to make substantial cash contributions to satisfy the funding requirements of the plan. Other alternatives that management will explore include an equity investment in the Company or a restructuring of the Company's debt. Piccadilly has approximately $39 million in senior notes outstanding. One feature of the notes requires the Company to make a cash offer to buy approximately $5 million of the notes no later than October 28, 2003. "Although the Board and management believe there will be sufficient cash available from the Company's operations and funding sources to meet its obligations under the notes and its pension plan through the end of fiscal 2004, we feel the need to fully provide for all potential outcomes," Campbell said. J.G. "Jack" McGregor, Piccadilly's Chief Executive Officer since the departure of Ronnie LaBorde in May 2003, stated, "Management is in full accord with the strategic plan of the Board and believes that the sales process will maximize the value of the franchise." Concerning the possibility that an offer might require the sale or investment to be consummated under the federal bankruptcy laws, Campbell said, "That is a possible outcome. In fact, should no workable solution come from outside sources in the form of a sale or equity injection, the Board may avail itself of the reorganization opportunity afforded by the Bankruptcy Code. Our objective is to provide the best opportunity for the Company's long-term success and the continued employment of our loyal workforce." Azam Malik, Piccadilly's President and Chief Operating Officer, stated, "Our efforts remain focused on satisfying our guests and ensuring that they receive the best that Piccadilly has to offer. For almost 60 years, we've provided traditional home-cooked meals at competitive prices. We are committed to continuing the Piccadilly tradition for decades to come." Piccadilly is a leader in the family-dining segment of the restaurant industry and operates 175 cafeterias in the Southeastern and Mid-Atlantic states. For more information about the Company visit http://www.piccadilly.com PLYMOUTH RUBBER: Delivers Plan to Comply with AMEX Requirements --------------------------------------------------------------- Plymouth Rubber Company, Inc., (AMEX: PLR.A, PLR.B) on June 23, 2003, submitted to the American Stock Exchange a plan describing the program by which the Company will be brought back into compliance with AMEX's listing requirements by the end of November 2004. The filing of the Plan is subject to acceptance by AMEX and may result in an extension of time, up to 18 months, for the Company to regain compliance with AMEX listing standards. On May 23, 2003 AMEX had notified the Company that it had failed to maintain at least $2,000,000 in shareholder equity, having incurred losses from continuing operations and/or net losses in two of its three most recent fiscal years. Plymouth Rubber Company, Inc. manufactures and distributes plastic and rubber products, including automotive tapes, insulating tapes, and other industrial tapes and films. The Company's tape products are used by the electrical supply industry, electric utilities, and automotive and other original equipment manufacturers. Through its Brite-Line Technologies subsidiary, Plymouth manufactures and supplies highway marking products. * * * Liquidity and Capital Resources Prior to December, 2002, the Company's term debt agreements had contained various covenants specifying certain financial requirements, including minimum tangible net worth, fixed charge and EBITDA coverage ratios, working capital and maximum ratio of total liabilities to net worth. In addition, the revolving working capital credit facility and the real estate term loan contain an acceleration provision, which can be triggered if the lender determines that an event of default has occurred. As of each quarter end from September 1, 2000 through August 30, 2002, the Company had been in violation of certain covenants of its term debt facility and therefore, due to a cross default provision, the Company had not been in compliance with a covenant under its revolving working capital credit facility and real estate term loan. As a result, all of the Company's term loans (except for that of its Spanish subsidiary) had been classified as current liabilities on the Company's Consolidated Balance Sheet at the end of each fiscal quarter end. In addition, during July 2002, the Company received a demand from its primary term debt lender for the payment of their outstanding loan balances in the amount of $8,658,000, which represented the total of all future payments and accumulated late fees, and a demand letter from a smaller equipment lender for approximately $69,000 of payments due. During 2002, the Company negotiated with these lenders and, in November 2002, reached formal agreement to obtain relief from their demands and to restructure existing term debt facilities. Under the new arrangements, the term debt lenders accepted significantly reduced principal payments over the next three years, eliminated financial covenants, waived existing defaults and rescinded demands for accelerated payment, in return for enhanced collateral positions. As of February 28, 2003, the Company had approximately $744,000 of unused borrowing capacity under its revolving line of credit with its primary working capital lender, after consideration of collateral limitations. The Company's working capital position decreased from a negative $2,339,000 at November 29, 2002 to a negative $3,600,000 at February 28, 2003, due to a $1,846,000 increase in accounts payable, a $822,000 decrease in accounts receivable, a $254,000 increase in the current portion of long term borrowings, a $199,000 increase in short term debt, a $159,000 decrease in prepaid and other current assets, and a $34,000 decrease in cash, partially offset by a $1,283,000 increase in inventory, and a $770,000 decrease in accrued expenses. During the second quarter of 2002, the Company received a funding waiver from the Internal Revenue Service for the $855,000 payment due to its defined benefit plan for the year ended November 30, 2001, conditioned on the Company satisfying the minimum funding requirements for the plan years ending November 30, 2002 and November 30, 2003. The Company had notified the Pension Benefit Guarantee Corporation that the Company intended to make the $1,262,000 contribution for the plan year ending November 30, 2002 by the final due date of August 15, 2003, instead of on a quarterly basis. During the first quarter of 2003, the Company requested a partial funding waiver from the Internal Revenue Service for $1,030,000 of the $1,262,000 payment due for the plan year ending November 30, 2002. The Company's financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The negative working capital position of $3,600,000, the funding requirement for the defined benefit plan of $1,262,000 for the plan year ending November 30, 2002, the lack of sales growth, and the overall risks associated with the fiscal 2003 plan may indicate that the Company will be unable to continue as a going concern for a reasonable period of time. PLYMOUTH RUBBER: Red Ink Flows in Fiscal Second Quarter 2003 ------------------------------------------------------------ Plymouth Rubber Company, Inc. (Amex: PLR.A, PLR.B) announced financial results for the second quarter of fiscal 2003 ended May 30, 2003. Sales for the second quarter of fiscal 2003 increased 2.4% to $18,287,000, from $17,854,000 last year. Net income for the second quarter of fiscal 2003 decreased to a loss of $184,000, or a loss of $0.09 diluted earnings per share, from a profit of $718,000, or a profit of $0.34 diluted earnings per share last year. The second quarter of fiscal 2002 included a $187,000 tax benefit from carryback of net operating losses. For the first half of 2003, sales were $31,830,000, a 0.1% increase from $31,795,000 last year. Net income for the first half decreased to a loss of $1,564,000, or a loss of $0.76 diluted earnings per share, from a profit of $591,000, or a profit of $0.29 diluted earnings per share last year. "Although we continue to be affected by sluggish industrial demand and by high raw materials and energy costs, we believe that our sales bottomed out in the first quarter and are now starting to grow again," stated Maurice J. Hamilburg, Plymouth's President and Co-CEO. "Raw materials and energy costs have recently shown signs of moderating, and our international sales are beginning to benefit from the weaker U.S. dollar. Most importantly, we will continue to push forward on new sales strategies to improve future performance." Plymouth Rubber Company, Inc. manufactures and distributes plastic and rubber products, including automotive tapes, insulating tapes, and other industrial tapes and films. The Company's tape products are used by the electrical supply industry, electric utilities, and automotive and other original equipment manufacturers. Through its Brite-Line Technologies subsidiary, Plymouth manufactures and supplies highway marking products. * * * Liquidity and Capital Resources Prior to December, 2002, the Company's term debt agreements had contained various covenants specifying certain financial requirements, including minimum tangible net worth, fixed charge and EBITDA coverage ratios, working capital and maximum ratio of total liabilities to net worth. In addition, the revolving working capital credit facility and the real estate term loan contain an acceleration provision, which can be triggered if the lender determines that an event of default has occurred. As of each quarter end from September 1, 2000 through August 30, 2002, the Company had been in violation of certain covenants of its term debt facility and therefore, due to a cross default provision, the Company had not been in compliance with a covenant under its revolving working capital credit facility and real estate term loan. As a result, all of the Company's term loans (except for that of its Spanish subsidiary) had been classified as current liabilities on the Company's Consolidated Balance Sheet at the end of each fiscal quarter end. In addition, during July 2002, the Company received a demand from its primary term debt lender for the payment of their outstanding loan balances in the amount of $8,658,000, which represented the total of all future payments and accumulated late fees, and a demand letter from a smaller equipment lender for approximately $69,000 of payments due. During 2002, the Company negotiated with these lenders and, in November 2002, reached formal agreement to obtain relief from their demands and to restructure existing term debt facilities. Under the new arrangements, the term debt lenders accepted significantly reduced principal payments over the next three years, eliminated financial covenants, waived existing defaults and rescinded demands for accelerated payment, in return for enhanced collateral positions. As of February 28, 2003, the Company had approximately $744,000 of unused borrowing capacity under its revolving line of credit with its primary working capital lender, after consideration of collateral limitations. The Company's working capital position decreased from a negative $2,339,000 at November 29, 2002 to a negative $3,600,000 at February 28, 2003, due to a $1,846,000 increase in accounts payable, a $822,000 decrease in accounts receivable, a $254,000 increase in the current portion of long term borrowings, a $199,000 increase in short term debt, a $159,000 decrease in prepaid and other current assets, and a $34,000 decrease in cash, partially offset by a $1,283,000 increase in inventory, and a $770,000 decrease in accrued expenses. During the second quarter of 2002, the Company received a funding waiver from the Internal Revenue Service for the $855,000 payment due to its defined benefit plan for the year ended November 30, 2001, conditioned on the Company satisfying the minimum funding requirements for the plan years ending November 30, 2002 and November 30, 2003. The Company had notified the Pension Benefit Guarantee Corporation that the Company intended to make the $1,262,000 contribution for the plan year ending November 30, 2002 by the final due date of August 15, 2003, instead of on a quarterly basis. During the first quarter of 2003, the Company requested a partial funding waiver from the Internal Revenue Service for $1,030,000 of the $1,262,000 payment due for the plan year ending November 30, 2002. The Company's financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The negative working capital position of $3,600,000, the funding requirement for the defined benefit plan of $1,262,000 for the plan year ending November 30, 2002, the lack of sales growth, and the overall risks associated with the fiscal 2003 plan may indicate that the Company will be unable to continue as a going concern for a reasonable period of time. REPTRON ELECTRONICS: Reaches Pact to Restructure 6-3/4% Notes ------------------------------------------------------------- Reptron Electronics, Inc. (Nasdaq: REPT) has reached an agreement on a term sheet to restructure its 6-3/4% Subordinated Convertible Notes due in August, 2004. The current outstanding balance on the Notes is approximately $76.3 million. The agreement was negotiated with an ad hoc committee of Noteholders. Conclusion of the understanding reached is subject to satisfaction of a number of conditions and the negotiation and execution of definitive agreements. If the transaction is concluded as outlined in the term sheet, in addition to other matters: (a) the original Notes will be exchanged for both new notes and the Company's common shares which are expected to represent after issue approximately 92% to 95% of the Company's common shares outstanding, and (b) the indebtedness represented by the original Notes will be reduced from $76.3 million to $30 million. Further, if the transaction is concluded as is outlined in the term sheet, the Company expects its debt to equity and liquidity positions to markedly improve. Detailed terms of the proposed restructure will be disclosed if and when the stated conditions are satisfied and the definitive agreements are executed. "We are pleased to have reached this agreement with the ad hoc committee. This restructure should allow Reptron to continue to operate its business, further enhancing Reptron's ability to successfully meet its customers' requirements," stated Paul J. Plante, Reptron's President and Chief Operating Officer. Reptron Electronics, Inc. is an electronics manufacturing supply chain services company providing engineering services, electronics manufacturing services and display integration services. Reptron Manufacturing Services offers full electronics manufacturing services including complex circuit board assembly, complete supply chain services and manufacturing engineering services to OEMs in a wide variety of industries. Reptron Display and System Integration provides value-added display design engineering and system integration services to OEMs. For more information, access http://www.reptron.com RJ REYNOLDS: S&P Cuts Corporate Credit Rating to BB+ from BBB- -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on RJ Reynolds Tobacco Holdings Inc., to 'BB+' from 'BBB-'. Standard & Poor's also lowered the senior unsecured ratings on selected debt issues not guaranteed by RJR's material operating subsidiaries, including but not limited to RJ Reynolds Tobacco Company. These were lowered to 'BB' from 'BB+'. All ratings are removed from CreditWatch where they were placed on April 25, 2003. The ratings outlook is stable. About $2.5 billion of total debt was outstanding at RJR at March 31, 2003. The original CreditWatch placement followed RJR's revised earnings guidance for fiscal year 2003. It also reflected Standard & Poor's expectations that credit measures for full-year 2003 would be below previous expectations, which had included RJR's maintenance of EBITDA coverage of interest between 7.5x to 8.5x. The downgrade reflects Standard & Poor's reassessment of the U.S. cigarette industry, as well as RJR's weakened competitive position and its resulting weakened operating performance and credit measures. "RJR continues to face intense competition in the U.S. cigarette market and future pricing uncertainty arising from increased state excise taxes and the corresponding growth of deep discount manufacturers," said credit analyst Nicole Delz Lynch. "Standard & Poor's believes that these factors will result in continued declines in RJR's domestic cigarette volume and cash flow. RJR management expects that operating income could decline by about 50% in 2003 from its levels the previous year." This decline will result in estimated EBITDA coverage of interest of just over 6x in 2003. This is well below the guidelines expected for the company to sustain an investment-grade rating. Standard & Poor's expects RJR to sustain its cash flow coverage measures at these reduced levels. Standard & Poor's believes that the heightened litigation risk following the $10 billion judgment against Philip Morris USA in the Price "Lights" class action lawsuit in March 2003 demonstrated a level of increased volatility for U.S. tobacco companies with respect to potential bonding requirements for adverse legal judgments. Standard & Poor's also remains concerned about the magnitude of potential future tobacco-related litigation awards at RJR, as well as any related bonding requirements and the outcome of current appeals processes. However, the litigation landscape has benefited from some positive recent developments. This includes the recent reversal and decertification of the Engle class action suit and the recent "State Farm" ruling by the U.S. Federal Court. (The latter recommends guidelines for the amount of punitive damages relative to compensatory damages that may be awarded in adverse litigation judgments. However, it is too early to gauge how beneficial it will be to U.S. cigarette companies.) Standard & Poor's believes that U.S. cigarette companies are still exposed to financial uncertainty during class action lawsuits. ROBOTIC VISION SYSTEMS: Deloitte & Touche Resigns as Accountant --------------------------------------------------------------- On June 20, 2003, Deloitte & Touche LLP resigned as Robotic Vision System's independent accountant. The Company was informed by the former auditors that, as part of its review of the Company's financial statements for the quarter ended December 31, 2002, it determined that there were deficiencies in the operation of Robotic Vision Systems' internal controls which adversely affected the Company's ability to record, process, summarize and report financial data. This event did not lead to a disagreement or difference of opinion. The Company indicates that it has taken corrective action to strengthen its internal controls and procedures. The former auditors' report on the Company's financial statements for the fiscal year ended September 30, 2002 was qualified in its reference that there was substantial doubt as to Robotic Vision Systems' ability to continue as a going concern. The Company is in discussions with independent public accounting firms to engage a successor independent accountant. Robotic Vision Systems, Inc. (NasdaqSC: ROBV) has the most comprehensive line of machine vision systems available today. Headquartered in Nashua, New Hampshire, with offices worldwide, RVSI is the world leader in vision-based semiconductor inspection and Data Matrix-based unit-level traceability. Using leading-edge technology, RVSI joins vision-enabled process equipment, high- performance optics, lighting, and advanced hardware and software to assure product quality, identify and track parts, control manufacturing processes, and ultimately enhance profits for companies worldwide. Serving the semiconductor, electronics, aerospace, automotive, pharmaceutical and packaging industries, RVSI holds more than 100 patents in a broad range of technologies. For more information visit http://www.rvsi.com Robotic Vision Systems' March 31, 2003 balance sheet shows a working capital deficit of about $16 million, and a total shareholders' equity deficit of about $10 million. ROMACORP INC: March 30 Net Capital Deficit Widens to $30 Million ---------------------------------------------------------------- Romacorp, Inc., announced results for its fourth quarter and fiscal year ended March 30, 2003. The fourth quarter and fiscal year included one extra week versus the same periods of the prior year. Revenue for the quarter decreased $1.4 million, or 4.1%, to $32.8 million as compared with the same quarter of the prior year. For the fiscal year, revenues decreased $10.4 million, or 8.0%, to $119.3 million as compared with the prior year. The lower revenue is due to a decrease in sales at comparable restaurants of 6.1% for the quarter and 5.1% for the fiscal year and the full year or partial year effect of five restaurant closures in fiscal 2002 and one restaurant closure in fiscal 2003, partially offset by sales of $2.1 million during the extra week in fiscal 2003. During the fourth quarter, franchisees opened restaurants in Kennewick, Washington; Trinidad and Tobago; and San Salvador, El Salvador. Five franchise restaurants were closed during the quarter. For the fourth quarter, Adjusted EBITDA, as defined herein, decreased 10.7% to $3.8 million from $4.3 million during the same quarter of the prior year while for the fiscal year, Adjusted EBITDA of $10.7 million was 18.1% lower than the prior year amount of $13.0 million. This decrease in Adjusted EBITDA is due primarily to the sales shortfall experienced during the quarter and fiscal year. The Company recorded a charge related to the impairment of long- lived assets of $5.3 million during the fourth quarter. Of this amount, $2.3 million was related to twelve under-performing restaurants and the further impairment of a property closed during a prior year. The remaining impairment of $3.0 million was related to the classification of 11 properties as held for sale and the related write-down to estimated fair market value. The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards (SFAS) No.109, "Accounting for Income Taxes" which requires that deferred tax assets and liabilities be recognized for the effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. SFAS No. 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. Based upon the level of historical taxable income and projections for future taxable income over the periods that the deferred tax assets are expected to be deductible, the Company has recorded an additional valuation allowance of approximately $10.0 million during the fourth quarter of fiscal 2003, representing 100 percent of the deferred tax assets since management is unable to determine that it is more likely than not that the deferred tax assets will be realized. The net loss for the fourth quarter was $11.9 million compared with net loss of $4.3 million during the same quarter of the prior year. The loss before income taxes for the fourth quarter was $3.9 million compared with a loss before income taxes of $5.4 million during the same quarter of the prior year. For the fiscal year, the Company experienced a net loss of $14.1 million compared with a net loss of $5.5 million during the prior year. For the fiscal year, the loss before income taxes was $6.9 million compared with a loss before income taxes of $7.3 million during the prior year. The effect of the valuation allowance to reduce deferred tax assets, the sales shortfall and increased asset impairments for the quarter and fiscal year were partially offset by the provision for closed restaurants of $1.3 million recorded during the fourth quarter of the prior year and the gain of $788,000 related to the repurchase of Senior Notes with a face value of $2.0 million during the fourth quarter of fiscal 2003. At March 30, 2003, the Company's balance sheet shows a total shareholders' equity deficit of about $30 million. David W. Head, Chief Executive Officer and President, commented, "Romacorp's financial performance during the fiscal year ended March 2003 was disappointing as the Company has continued to experience comparable sales decreases during a period of weakness in the economy. I view the Company's menu development and operations excellence initiatives critical to our turn-around as we focus our efforts in these areas to support our company and franchise operators." Romacorp, Inc. operates and franchises Tony Roma's restaurants, the world's largest casual dining restaurant chain specializing in ribs. The Company currently operates 43 restaurants and franchises 215 restaurants in 28 states and 27 foreign countries and territories. SAFETY-KLEEN: Wants to Pay Exit Financing Due Diligence Fees ------------------------------------------------------------ The Safety-Kleen Debtors, represented by Michael W. Yurkewicz, Esq., at Skadden Arps Slate Meagher & Flom, in Wilmington, Delaware, seek Judge Walsh's authority to pay up to $750,000 in due diligence fees and expenses to be incurred by unidentified prospective lenders in developing and issuing to the Debtors a commitment for a potential exit financing facility, as determined to be reasonable and necessary within the Debtors' sole discretion. The Debtors anticipate entering into an exit facility in the aggregate amount of approximately $275,000,000 in order to obtain the funds necessary to repay the DIP facility claims, make other required payments, and conduct their post-reorganization operations. The exit facility will be secured by a first-priority lien on substantially all of the assets of the reorganized Debtors. Exit Financing Proposal Process To be in a position to obtain exit financing and timely consummate the Plan, the Debtors and their financial advisors, Lazard Freres & Co., solicited interest in exit financing from various financing institutions, including members of the prepetition bank group, to ensure the most cost-effective means of raising funds for the Debtors' emergence from Chapter 11. Lazard contacted approximately 14 financial institutions, which have signed or are in the process of signing non-disclosure agreements to receive confidential information regarding the Debtors. On the basis of this information, Lazard requested non- binding proposals from these institutions outlining the terms of a potential exit facility, including specific structure and pricing terms. To date, the Debtors received five formal proposals subject to further diligence. After reviewing these proposals, the Debtors intend, in the exercise of their business judgment, to continue further negotiations with, at least, the two lenders that submitted the most favorable proposals. At least four other institutions continue to review the opportunity of providing exit financing to the Debtors. Until the Debtors receive and execute a commitment letter with a particular exit lender, the Debtors expect to continue to have discussions with other prospective lending parties depending on the quality and attractiveness of their proposal. By this motion, the Debtors seek to pay the due diligence expenses of one or more prospective lenders. Business Justification The Debtors believe that paying due diligence fees is reasonable because the Prospective Lenders generally are not willing to complete thorough due diligence sufficient to issue commitment letters without the Debtors' agreement to assist in defraying at least a portion of their expenses. Significant due diligence is required in order for the Prospective Lenders to familiarize themselves with the Debtors, assets, liabilities, financial performance and businesses so that, prior to emergence, such institutions can provide a firm commitment to lend upon emergence. Because it is customary and necessary to conduct such investigation, potential lenders routinely require a work fee and the reimbursement of reasonable expenses. The Debtors believe that the expenses that the Prospective Lenders may request will be reasonable in comparison with other, similar arrangements in comparable situations. Moreover, without an agreement by the Debtors to assist in defraying the expenses involved in the due diligence, the Prospective Lenders likely would decide to remove themselves from the process established by the Debtors. To the extent that any Prospective Lender removes itself from the process, the level of competition for the exit facility will be reduced, if not eliminated, and will likely result in more burdensome financing terms for the reorganized Debtors. Additionally, the Debtors are concerned that declining to pay the due diligence expenses ultimately may delay their ability to obtain a firm commitment for exit financing. Moreover, even if the Prospective Lenders were able to submit commitment letters on a timely basis without assistance from the Debtors, it is very likely that any resulting commitment would include numerous contingencies and related fees, which almost certainly would delay the date by which the Debtors would be able to consummate the proposed financing facility and emerge from Chapter 11. The Debtors believe that paying the due diligence expenses of the Prospective Lenders will allow such lenders to timely complete the due diligence process, limit the number of contingencies and fees included in any commitments the Debtors may receive, and reduce the likelihood of unexpected changes in terms, particularly those occurring after the hearing to consider confirmation of the Plan due to the discovery of facts not otherwise known to the Prospective Lenders prior to that time. Simply stated, the Debtors want to limit the universe of potential variables with respect to exit financing by providing the best opportunity for the Prospective Lenders to fully conduct their due diligence prior to the confirmation hearing. Accordingly, to encourage the Prospective Lenders to undertake the due diligence necessary to deliver firm commitments on a timely basis, the Debtors, after consulting with their advisors, have determined that the payment of certain reasonable and limited due diligence fees and expenses is warranted and is customary in such situation. However, to minimize the due diligence expenses Prospective Lenders may incur, the Debtors are seeking to undertake certain cost-containment measures. Specifically, the Debtors are seeking authority only to pay up to $750,000 in fees and expenses. Accordingly, such payments represent less than 0.2% of the amount of the exit facility anticipated by the Debtors. The Debtors will work closely with the Prospective Lenders during the due diligence process and scrutinize the expenses proposed in an effort to contain due diligence expenses and avoid duplicative costs. Paying reasonable and necessary due diligence fees and expenses will allow and incentivize the Prospective Lenders to perform such due diligence as may be necessary to deliver firm commitments for proposed exit financing within the time frame required by the Debtors. Moreover, the Debtors believe that any savings to be realized by electing not to pay such due diligence expenses ultimately will harm more than help their estates by causing unnecessary and unacceptable delay. Courts have approved similar procedures for reimbursing prospective lenders in other large Chapter 11 cases in this district, Mr. Yurkewicz says, citing In re SLI, Inc. (Bankr. D. Del. May 21, 2003); and In re Hayes Lemmerz Int'l, Inc., et al. (Bankr D. Del. Feb 6, 2003). (Safety-Kleen Bankruptcy News, Issue No. 59; Bankruptcy Creditors' Service, Inc., 609/392-0900) SAGENT TECHNOLOGY: Nasdaq Will Yank Shares Effective Tomorrow ------------------------------------------------------------- Sagent (Nasdaq:SGNT) has received notification from the NASDAQ that its common stock will be delisted from the Nasdaq Stock Market as of the opening of business tomorrow. The delisting action was taken by the Nasdaq as a result of deficiencies relating to listing standards for stockholders' equity requirements as set forth in Marketplace Rule 4310c(2)(B). On May 23, 2003 the Company received notice from the Nasdaq Staff that we were not in compliance with the minimum stockholders equity requirement of $2.5 million. On June 9, 2003 the Company responded to the Nasdaq Staff requesting that the stock continue to be listed due to our estimate that the Company would meet the minimum requirement after the closing of the sale of substantially all of our assets to Group 1 Software. The Nasdaq Staff denied our request because the Company would effectively become a "public shell" and may be subject to market abuses or other violative conduct detrimental to the interests of the investing public. Beginning on July 3, 2003, Sagent common stock will be eligible for trading on the Over-the-Counter Bulletin Board (OTCBB). The Company's ticker symbol will continue to be SGNT. Some quotation services add "_" to the end of the symbol (SGNT_). OTCBB securities are traded through broker/dealers acting as market makers. Information regarding OTCBB, including stock quotations, can be found at http://www.otcbb.com Sagent has filed a proxy statement regarding Notice of Special Meeting of Stockholders to be held July 15, 2003 and other relevant documents concerning the sale of substantially all of Sagent's assets with the Securities and Exchange Commission. Stockholders of Sagent are urged to read the proxy statement any other relevant documents filed with the SEC because they contain important information. Investors and security holders can obtain free copies of the proxy statement and other relevant documents by contacting Sagent Technology, Inc., 800 West El Camino Real Suite 300, Mountain View, CA 94040 or at Sagent's Web site at http://www.sagent.com In addition, documents filed with the SEC by Sagent are available free of charge at the SEC's Web site at http://www.sec.gov Sagent has fixed the close of business on May 28, 2003 as the record date for determining stockholders entitled to notice of, and vote at, the Special Meeting. Information regarding the identity of the persons who may, under SEC rules, be deemed to be participants in the solicitation of stockholders of Sagent in connection with the transaction, and their direct and indirect interests, by security holding or otherwise, in the solicitation is set forth in the proxy statement as filed by Sagent with the SEC. Sagent Technology, Inc.'s March 31, 2003 balance sheet shows a working capital deficit of about $8 million, while its total shareholders' equity dwindled to about $1.7 million from $6.3 million recorded three months ago. SEA CONTAINERS: Exchange Offer for 9.50% & 10.50% Notes Expires --------------------------------------------------------------- Sea Containers Ltd. (NYSE: SCRA and SCRB) -- http://www.seacontainers.com-- marine container lessor, passenger and freight transport operator, and leisure industry investor, announced the expiration of the exchange offer for its outstanding 9-1/2% Senior Notes due 2003 and 10-1/2% Senior Notes due 2003. The exchange offer expired Friday, June 27, 2003 at 5:00 p.m., New York City time. Based on the information provided by the exchange agent for the exchange offer, approximately $22.5 million aggregate principal amount of the Notes has been tendered for exchange. The exchange offer is expected to close today, and, upon the closing, Sea Containers will cancel the Notes accepted for exchange and will issue an equal aggregate principal amount of 13% Senior Notes due 2006. The 13% Senior Notes will be listed on the New York Stock Exchange (CUSIP No. 811371 AL 7). The exchange offer for Sea Containers' 12-1/2% Senior Subordinated Debentures due 2004, which commenced on May 28, 2003, remains open and is scheduled to expire on July 9, 2003. Holders of the debentures may obtain exchange offer materials by contacting Georgeson Shareholder Communications Inc., the information agent for that exchange offer, 17 State Street, New York, New York 10004. Banks and brokers call 1-212-440-9800; U.S. holders call toll free 1-866-324-5897; and foreign holders call collect +44- 207-335-8700. As previously reported, Standard & Poor's Ratings Services lowered its ratings on Sea Containers Ltd., including lowering the corporate credit rating to 'BB-' from 'BB'. Ratings remain on CreditWatch with negative implications, where they were placed Nov. 14, 2002. SILICON GRAPHICS: Amends Extends Exchange Offer for 11.75% Notes ---------------------------------------------------------------- Silicon Graphics, Inc. (NYSE: SGI) has extended to midnight (New York City time) on July 14, 2003 its offer to exchange its 5.25% Senior Convertible Notes Due 2004 for 11.75% Senior Notes Due 2009 or 6.50% Senior Convertible Notes Due 2009. The exchange offer has been amended to reflect changes proposed by holders of a significant amount of the Company's 5.25% Senior Convertible Notes. These holders have agreed to tender their notes for exchange under the amended terms of the offer. The revised terms of the offer include a reduction in the price at which 6.50% Senior Convertible Notes may be converted into shares of its common stock from $3.00 to $1.85 per share and a corresponding reduction in the maximum amount of 6.50% Convertible Notes that the Company will issue in exchange for 5.25% Senior Notes from $120 million aggregate principal amount to $78 million aggregate principal amount. If more than $78 million aggregate principal amount of 5.25% Senior Notes are tendered for 6.50% Senior Convertible Notes, SGI will accept tendered notes for exchange on a prorated basis. Tendered notes not exchanged for 6.50% Senior Convertible Notes because of proration will be exchanged for 11.75% Senior Notes. Additionally, under the terms of the amended offer, SGI has agreed to meet financial performance and debt reduction conditions which, if not satisfied, will result in an increase in the interest rate payable on the 11.75% Senior Notes and a further reduction in the conversion price of the 6.50% Senior Convertible Notes for the fiscal quarter in which the conditions have not been satisfied. SGI will also agree to use the proceeds of certain asset sales to reduce its debt, and provide for exchanging holders to nominate two persons to serve on its Board of Directors. These changes in the terms of the offer are reflected in an amendment to the exchange offer that SGI is filing today with the Securities and Exchange Commission. Holders who have validly tendered their 5.25% Senior Convertible Notes need take no further action. Other holders who want to tender their notes must do so no later than 12:00 midnight, New York City time, on Monday, July 14, 2003, the extended expiration date. Holders may withdraw any notes tendered, including any notes previously tendered, until such expiration date of the exchange offer. The amount of the 5.25% Senior Convertible Notes tendered as of 12:00 midnight, New York City time, on the scheduled expiration date of Friday, June 27, 2003 was approximately $111.4 million, or about 48 % of the $230 million principal amount outstanding. Of the notes tendered, approximately $98.7 million were tendered in exchange for 11.75% Senior Notes and approximately $12.7 million were tendered for 6.50% Senior Convertible Notes. Additionally, the Company has received letters from holders of an aggregate of $44.2 million principal amount of the $5.25% Senior Convertible Notes indicating that they will tender their notes in the amended exchange offer. The exchange offer is subject to the condition that at least 90% of the outstanding principal amount of 5.25% Senior Convertible Notes have been validly tendered and not withdrawn. At March 28, 2003, Silicon Graphics Inc.'s balance sheet shows a total shareholders' equity deficit of about $142 million. SPIEGEL GROUP: Court Approves KPMG's Engagement as Accountants -------------------------------------------------------------- The Spiegel Inc., and its debtor-affiliates obtained permission from the Court to employ KPMG LLP, the U.S. member firm of KPMG International, as accountants and tax advisors in these Chapter 11 proceedings, nunc pro tunc March 17, 2003. KPMG will render these services: A. Accounting and Auditing Services -- Audits and reviews of the Debtors' financial statements as may be required from time to time; -- Analysis of accounting issues and advice to the Debtors' management regarding the proper accounting treatment of events; -- Assistance in the preparation and filing of the Debtors' financial statements and disclosure documents required by the Securities and Exchange Commission; -- Assistance in the preparation and filing of the Debtors' registration statements required by the SEC in relation to debt and equity offerings; -- Audits of the financial statements of the Debtors' employee benefit plans; -- Assistance with implementation of bankruptcy accounting procedures as required by generally accepted accounting principles, including, but not limited to, Statement of Position 90-7; -- Reports on management's assessments of internal controls over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002; and -- Reports on management's assessments of internal controls over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002. B. Tax Advisory Services -- Review of and assistance in the preparation and filing of any tax returns; -- Advice and assistance to the Debtors regarding tax planning issues, including, but not limited to, assistance in estimating net operating loss carryforwards, international taxes, and state and local taxes; -- Assistance regarding transaction taxes, state and local sales and use taxes; -- Assistance regarding tax matters related to the Debtors' pension plans; -- Assistance regarding real and personal property tax matters, including, but not limited to, review of real and personal property tax records, negotiation of values with appraisal authorities, preparation and presentation of appeals to local taxing jurisdictions and assistance in litigation of property tax appeals; -- Assistance regarding any existing or future Internal Revenue Service, state and local tax examinations; -- Advice and assistance on the tax consequences of proposed plans of reorganization, including, but not limited to, assistance in the preparation of IRS ruling requests regarding the future tax consequences of alternative reorganization structures; and -- Other consulting, advice, research, planning or analysis regarding tax issues as may be requested from time to time. The Debtors will compensate KPMG for its accounting and tax advisory services in accordance with the firm's customary hourly rates: Partners $450 - 750 Directors/Senior Managers 325 - 550 Managers 275 - 450 Senior/Staff Accountants 230 - 360 Paraprofessionals 75 - 125 (Spiegel Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-0900) STRUCTURED ASSET: Fitch Rates Class B-4 and B-5 Certs. at BB/B -------------------------------------------------------------- Structured Asset Securities Corporation $215 million mortgage pass-through certificates, series 2003-23H classes 1A1, 2A1, 1A- IO, 1A-PO, 2A-IO and R certificates are rated 'AAA' by Fitch Ratings. In addition, Fitch rates the $2.5 million class 1B1 and 2B1 certificates 'AA', $1.3 million class 2B1 and 2B2 certificates 'A' and $600,000 class B3 certificates 'BBB'. Additionally, $600,000 class B4 certificates 'BB' and $400,000 class B-5 certificates are rated 'B' by Fitch and are being offered privately. The 'AAA' rating on the Group 1 (1A1, 1A-IO, 1A-PO and R) senior certificates reflects the 2.60% total credit enhancement provided by the 1% class 1B1, 0.55% class 1B2, 0.20% class B3 and 0.85% privately offered classes B4 through B6 certificates. Classes 1B1 and 1B2 are supported by Group 1 only, and B3 though B6 are supported by both Group 1 and Group 2. The 'AAA' rating on the Group 2 (2A1 and 2A-IO) senior certificates reflects the 5.25% total credit enhancement provided by the 2.45% class 2B1, 1.15% class 2B2, 0.80% class B3 and 0.85 % privately offered classes B4 through B6 certificates. Classes 2B1 and 2B2 are supported by Group 2 only, and B3 through B6 are supported by Group 1 and Group 2. Fitch believes that the amount of credit enhancement will be sufficient to cover credit losses, including limited bankruptcy, fraud and special hazard losses. In addition, the ratings reflect the quality of the mortgage collateral, the strength of the legal and financial structures, and the master servicing capabilities of Aurora Loan Services, Inc., rated 'RMS2+' by Fitch. The Group 1 certificates represent ownership interest in a trust fund that consists primarily of a pool of 30-year fixed-rate, conventional, first lien, residential mortgage loans. As of the cut-off date (June 1, 2003), the mortgages in Pool 1 have an aggregate principal balance of approximately $199,029,639.36, a weighted average original loan-to-value ratio (OLTV) of 101.59%, a weighted average coupon (WAC) of 6.899%, a weighted average remaining term (WAM) of 352 months and an average balance of $130,941. The loans are primarily located in Virginia (9.04%), Texas (6.97%), Florida (6.06%), and North Carolina (5.07%). As of the cut-off date (June 1, 2003), the mortgages in Pool 2 have an aggregate principal balance of approximately $22,329,773.09, a weighted average OLTV of 101.84%, a WAC of 6.684%, a WAM of 356 months and an average balance of $171,767. The loans are primarily located in North Carolina (35.72%), Maryland (11.16%) and Tennessee (7.61%). None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. The mortgage loans were originated by various originators or acquired by various originators or their correspondents in accordance with such originator's respective underwriting standards and guidelines. Approximately 95.68% and 0.37% of the mortgage loans in Pool 1 and Pool 2, respectively, were originated or acquired in accordance with the Borrower Advantage Underwriting Guidelines. Approximately 4.33% and 99.63% of the mortgage loans for Pool 1 and Pool 2, respectively, were originated or acquired in accordance with the Pro Mortgage Underwriting Guidelines. The largest percentage of servicers for the mortgage loans in Pool 1 is as follows: 45.49% Wells Fargo, 19.90% Sun Trust, 16.07% Aurora and 15.35% Countrywide Servicing. Aurora will service all of the Pool 2 mortgage loans. SASCO, a special purpose corporation, deposited the loans in the trust, which issued the certificates. For federal income tax purposes, an election will be made to treat the trust fund as multiple real estate mortgage investment conduits. TANGER FACTORY: Completes Redemption of Outstanding Preferreds -------------------------------------------------------------- Tanger Factory Outlet Centers, Inc. (NYSE: SKT) has completed the redemption of all of its outstanding Depositary Shares representing Series A Cumulative Convertible Redeemable Preferred Shares. Prior to redemption, each Depositary Share could have been converted to .901 common shares at the option of the Depositary Shareholder until 5:00 p.m., Eastern Time, on June 17, 2003. As of June 30, 2003, 782,878 of the Depositary Shares were converted into 705,360 common shares and the Company funded approximately $480,000 to its transfer agent for the redemption of the remaining 19,019 Depositary Shares. The Board of Directors had set June 20, 2003 as the redemption date on which all outstanding Depositary Shares were to be redeemed. The redemption price was $25.00 per Depositary Share, plus accrued and unpaid dividends, to, but not including, the redemption date. Payment for the Depositary Shares properly surrendered for redemption will be received approximately two (2) weeks after the later of the redemption date or the date the exchange agent is in receipt of the Depositary Shares. "The majority of the preferred shareholders took this opportunity to convert their preferred shares to common shares with a conversion value that was greater than the $25 per preferred share redemption price. The conversion of approximately 98% of the preferred shares to common shares has increased the number of Tanger common shares in the market to over 10 million shares, and we anticipate this will have a positive impact on the liquidity of the shares in the market and our fixed charge coverage ratio going forward," stated Stanley K. Tanger, Chairman of the Board and Chief Executive Officer. * * * As previously reported in Troubled Company Reporter, Standard & Poor's affirmed its double-'B'-plus corporate credit rating on Tanger Factory Outlet Centers Inc., and its operating partnership, Tanger Properties L.P. At the same time, the double-'B'-plus senior unsecured rating and the double-'B'-minus preferred stock rating were affirmed. The outlook is stable. The ratings acknowledge Tanger's success to date in repositioning its portfolio toward a more upscale tenancy base, and reflect the company's established business position, solid operating profitability, and improving same-space sales performance. These strengths are offset by the company's lower debt coverage measures, moderate encumbrance levels, and relatively small (and highly concentrated) portfolio. THERMOVIEW INDUSTRIES: Restructures Long-Term Debt & Preferreds --------------------------------------------------------------- ThermoView Industries, Inc. (AMEX: THV), one of the nation's largest full-service home improvement remodeling companies, has restructured its long-term debt and preferred stock as part of a new agreement with its lenders and preferred stockholders. ThermoView, headquartered in Louisville, sells and installs replacement windows, doors and other home improvements to residential consumers in 17 states under the "THV, America's Home Improvement Company" national brand and under regional home center brands that include Thomas, Primax, Rolox, Leingang and ThermoView. ThermoView's senior lender holds Series A debt, Series C debt and other subordinated debt. Under the restructuring agreements, ThermoView's senior lender reduced the interest rate on both series of debt from 10% to 8%, and from 12% to 8% on the subordinated debt. Additionally, the senior lender converted $1 million of the subordinated debt to 680,000 common stock warrants, and it extended ThermoView's debt maturities by two years to June 30, 2006, and to July 31, 2006 for the subordinated debt. ThermoView's preferred stock holders also converted $1 million worth of preferred stock to 680,000 common stock warrants. They also agreed to reduce the dividend rate on the remainder of the preferred holdings from 12% to 8%, to defer cash dividends until the Series C long-term debt is retired, and to extend the date for mandatory redemption to August 31, 2006. The agreement requires ThermoView to pay $100,000 toward principal each month commencing July 2004, as well as monthly interest. It also calls for twice-yearly payments of "excess cash" toward principal. President and CEO Charles L. Smith said, "This restructuring goes a long way in strengthening our balance sheet and providing our company additional operating flexibility. This deal provides both immediate and ongoing benefits that will help us in our drive for profitability and growth." The debt and preferred stock forgiveness is expected to improve second quarter income attributable to common stockholders by more than $1 million, and the interest and dividend rate reductions are expected to have a positive impact of around $400,000 in 2003 and $800,000 on an annual basis, Smith said. At December 31, 2002, ThermoView's long-term debt was $17.3 million, and its manditorily redeemable preferred stock was $7.8 million. Strengthening the company's balance sheet and reducing the debt remaining from its initial acquisition activity have been key management priorities. In 2002, ThermoView paid down long-term debt by $1.5 million and began examining ways to restructure long- term obligations. "We will continue working to make operations as lean and productive as possible, to unify our brands and marketing, and to provide customers some of the best products and warranties in the industry," said Smith. "It is our goal to become America's largest full-service home improvement company." ThermoView is a national company that designs, manufactures, markets and installs high-quality replacement windows and doors as part of a full-service array of home improvements for residential homeowners. ThermoView's common stock is listed on the American Stock Exchange under the ticker symbol "THV." Additional information on ThermoView Industries is available at http://www.thv.com * * * In its latest Form 10-Q delivered to the Securities and Exchange Commission, the company states: Under our financing arrangements, substantially all of our assets are pledged as collateral. We are required to maintain certain financial ratios and to comply with various other covenants and restrictions under the terms of the financing agreements, including restrictions as to additional financings, the payment of dividends and the incurrence of additional indebtedness. In connection with waiving defaults at June 30, 2000, PNC Bank required us to repay $5 million of our $15 million credit facility with them by December 27, 2000. We were unable to make the required December 27, 2000 payment, violated various other covenants, and were declared in default by PNC Bank in early January 2001. The declaration of default by PNC Bank also served as a condition of default under the senior subordinated promissory note to GE Equity. GE Equity and a group of our officers and directors in March 2001 purchased the PNC note, and all defaults relating to the GE Equity note and the purchased PNC Bank note were waived. If we default in the future under our debt arrangements, the lenders can, among other items, accelerate all amounts owed and increase interest rates on our debt. An event of default could result in the loss of our subsidiaries because of the pledge of our ownership in all of our subsidiaries to the lenders. As of September 30, 2002, we are not in default under any of our debt arrangements. We believe that our cash flow from operations will allow us to meet our anticipated needs during at least the next 12 months for: * debt service requirements; * working capital requirements; * planned property and equipment capital expenditures. * expanding our retail segment * offering new technologically improved products to our customers * integrating more thoroughly the advertising and marketing programs of our regional subsidiaries into a national home-remodeling business We also believe in the longer term that cash will be sufficient to meet our needs. However, we do not expect to continue our acquisition program soon. In October 2002, we opened a new retail sales office in Phoenix, Arizona, and are working to open two new retail offices in Nebraska or Iowa and in a southern state in 2003. TOP-FLITE GOLF: Selling Major Assets to Callaway Golf for $125MM ---------------------------------------------------------------- Callaway Golf (NYSE:ELY) has entered into an agreement with The Top-Flite Golf Company to purchase the major assets associated with Top-Flite's business, including its manufacturing facilities, the Top-Flite, Strata and Ben Hogan brands, and all golf-related patents and trademarks. The assets will be acquired free and clear of any existing debt and most other liabilities pursuant to a Chapter 11 petition filed by the Top-Flite Company on June 30, 2003 and subject to approval by the U.S. Bankruptcy Court in Wilmington, Delaware. The total price to be paid by Callaway Golf for the acquired assets will be approximately $125 million, subject to certain adjustments. Completion of the transaction is contingent upon, among other things, the approval of the Bankruptcy Court and government review under the Hart-Scott-Rodino Premerger Notification Act. Top-Flite business operations will continue as usual during the pendency of the bankruptcy proceedings. Top-Flite's international operations are part of the sale but not part of the bankruptcy process. Upon consummation of the acquisition, Callaway Golf will initiate steps to consolidate its golf ball and golf club manufacturing and R&D operations. Callaway Golf expects to incur charges to earnings of up to $70 million, mostly non-cash, in connection with this process, with the charges to be taken as incurred over the next several months. Ron Drapeau, Chairman, President and CEO of Callaway Golf, said, "Our acquisition of the Top-Flite assets free from the significant debt load that burdened the company should permit us to reverse the recent decline of the Top-Flite brand in the golf ball marketplace. We also believe that our consolidated golf ball operations will provide Callaway Golf and its shareholders with the solution to the profitability drain that has dogged our golf ball business since start up. Moreover, the acquisition of the Top-Flite and Ben Hogan brands in golf clubs permits us to participate in categories and channels where the Callaway Golf brand has been absent or had little presence. Overall, we see this as an opportunity to compete effectively in a broad range of golf equipment business segments. We have every reason to believe that we will receive all needed approvals to complete the transfer of these Top-Flite assets to Callaway Golf later this year." Jim Craigie, CEO of Top-Flite said, "The proposed sale of our assets to Callaway Golf will allow Top-Flite to emerge as a stronger competitor, maximizing the value of our brands to the benefit of our employees and other stakeholders. By becoming part of Callaway Golf we can increase marketing support behind our well-known brands and innovative technology, as proven by recent wins at the U.S. Open, the Senior PGA Championship and the British Masters. We have the ultimate respect for Callaway Golf's brand, market position, management team and financial performance, and look forward to entrusting them with these great brands and valuable assets going forward." Further details on the acquisition will be disclosed as the process in Bankruptcy Court proceeds. Management plans to cover this topic further during the regularly scheduled investor conference call set for 5:00 p.m. EDT on July 17, 2003. Callaway Golf Company makes and sells Big Bertha(R) Metal Woods and Irons, including Great Big Bertha(R) II Titanium Drivers and Fairway Woods, Big Bertha Steelhead(TM) III Stainless Steel Drivers and Fairway Woods, Hawk Eye VFT Tungsten Injected(TM) Titanium Irons, Big Bertha Stainless Steel Irons, Steelhead X- 16(TM) and Steelhead X-16 Pro Series Stainless Steel Irons, and Callaway Golf Forged Wedges. Callaway Golf Company also makes and sells Odyssey(R) Putters, including White Hot(R), TriHot(R), DFX(TM) and Dual Force(R) Putters. Callaway Golf Company makes and sells the Callaway Golf(R) HX(R) Blue and HX Red balls, the CTU 30(R) Blue and CTU 30 Red balls, the HX 2-Piece Blue and HX 2- Piece Red balls, the CB1(R) Blue and CB1 Red balls, and the Warbird(TM) golf balls. For more information about Callaway Golf Company, visit its Web sites at http://www.callawaygolf.comand http://www.odysseygolf.com TOUCH AMERICA: Wants to Sell Assets to 360networks for $28MM ------------------------------------------------------------ Touch America Holdings, Inc., and its debtor-affiliates ask for authority from the U.S. Bankruptcy Court for the District of Delaware to enter into an asset purchase agreement with 360networks, Inc., selling all of their assets, subject to higher and better offer. After extensive marketing by the Debtors, with the assistance of their advisors, Evercore Partners LP, the Debtors have come to the conclusion that, in their business judgment, the purchase price offered by 360networks is the highest and best value achievable for the Purchased Assets. The Debtors seek approval of uniform Bidding Procedures, which, they believe, will ensure that the maximum value achievable is obtained for the Purchased Assets. 360networks has agreed, subject to the payment of the Break-Up Fee, that the Agreement will serve as a "stalking horse" bid, which other potential bidders can use as a starting point for other higher or otherwise better, offers. As reported, the Debtors' business has been strongly affected by the prolonged United States economic downturn. Having considered the possibility of a stand-alone plan of reorganization or liquidation, the Debtors conclude that it is in the best interests of their estates and creditors to undertake the sale of the Purchased Assets under section 363(b) of the Bankruptcy Code. The Debtors contend that the sale of the Purchased Assets pursuant to the terms of the Agreement will amass up to $28 million and eliminate potential claims against the Debtors' estates through 360networks's assumption of the Assumed Liabilities. The Debtors report that prior to entering into the Agreement, they undertook extensive effort to identify potential 360networkss and negotiate the best possible terms for the sale with their advisor, Evercore. Since December 2002, Evercore has contacted over 25 potential 360networkss for initial discussion regarding the sale of the Debtors' assets. Of these parties, 15 executed a Non- Disclosure Agreement and received additional information, including a Confidential Information Memorandum and access to due diligence information and materials. The Debtors concluded that the proposal from 360networks, offered the most advantageous terms and greatest economic benefit to the Debtors' estates. In addition, 360network's proposal was the only offer the Debtors received from an entity that had the desire and the ability to complete the transaction in the time frame they required. In consideration of 360network's execution of the Agreement and as partial reimbursement, the Debtors have paid the 360networks $500,000 as the Signing and Commitment Fee. The principal terms of the Agreement are: A) Purchase Price The Base Price for the Purchased Assets is $28 million, subject to certain adjustments, The portion of the Base Price payable to the Debtors at the Closing is $12.8 million. In addition, $3.2 million is payable into an Escrow Account that will serve as security (and a cap) for the Debtors' obligations to indemnify 360networks for breach of Debtors' representations and warranties for a period of 365 days after the Closing. The remaining portion of the Base Price -- $12 million -- is payable as a Post-Closing Payment, with 20% of the Post- Closing Payment payable into the Escrow Account. B) Assumed Liabilities 360networks will assume and perform certain liabilities arising from the ownership of the Purchased Assets and operation of the Relevant Business from and after the Closing. C) Conduct of Business Debtors have agreed to certain restrictions in the operation of the Relevant Business through the Closing Date, including their ability to amend, modify, terminate or extend certain agreements, or effect settlements with certain third parties. D. Conditions to Closing The Closing is conditioned on the satisfaction or waiver of: i) each party's performance in all material respects of all obligations under the Agreement; ii) each party's representations and warranties being true in all material respects in accordance with the Agreement; iii) delivery of the various transaction documents, consents and the Base Price; iv) nonoccurrence of any event, effect or change that constitutes a Material Adverse Effect; v) receipt of all consents and approvals of any Governmental Agency or regulatory authority necessary to permit 360networks and the Debtors to perform their obligations under the Agreement; vi) entry of the Sale Order by the Court, and its becoming a Final Order; vii) continuing of certain scheduled key contracts in full force and effect; and viii) receipt by 360networks of consent from its lenders. E) Break-Up Fee The Debtors have agreed that, if they are in material breach of the Agreement, and such breach is not cured within five business days, then 360networks will be entitled to receive a Break-Up fee in an amount equal to $1,000,000. Touch America Holdings, Inc., headquartered in Butte, Montana, filed for chapter 11 protection on June 19, 2003 (Bankr. Del. Case No. 03-11915). Touch America, through its principal operating subsidiary, Touch America, Inc., develops, owns, and operates data transport and Internet services to commercial customers. Maureen D. Luke, Esq., and Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $631,408,000 in total assets and $554,200,000 in total debts. TRANSDIGM INC: S&P Removes Low-B Ratings from CreditWatch --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including the 'B+' corporate credit rating, on TransDigm Inc., and removed them from CreditWatch where they were placed on March 18, 2003. The outlook is stable. At the same time, Standard & Poor's assigned its 'B+' rating to the company's proposed $440 million secured credit facility and its 'B-' rating to the proposed $300 million senior subordinated notes due 2011 to be sold under Rule 144A with registration rights. TransDigm is being acquired by Warburg Pincus LLC and TransDigm's senior management for a reported $1.1 billion through a leveraged buyout. "The affirmation reflects TransDigm's high level of debt after the acquisition and the weak commercial aircraft market, offset by very strong operating margins and leading positions in niche markets," said Standard & Poor's credit analyst Christopher DeNicolo. The proceeds from the new credit facility and subordinated notes, in combination with approximately $530 million in cash from Warburg Pincus and management, will be used to purchase TransDigm's stock from its current owner and repay the company's outstanding debt. The ratings on TransDigm's existing debt will be withdrawn when repaid. Debt to EBITDA is expected to increase to almost 5.5x from around 4x in fiscal 2002 pro forma for the transaction, but as a result of the rather large cash investment, debt to capital is likely to improve to around 55%. Richmond Heights, Ohio-based TransDigm is a well-established supplier of highly engineered aircraft components for use on nearly all commercial and military airplanes. The company has expanded its product offering through several acquisitions, including the mid-2001 major purchase of Champion Aviation, the world's largest manufacturer of igniters for turbine engines, and spark plugs and oil filters for piston engines. Intermediate-term business prospects for commercial aerospace have deteriorated significantly in terms of orders for new planes (21% of revenues) and the related aftermarket demand for products and services (54%), due to the impact on airlines and air travel from terrorism, the war in Iraq, and the effect of severe acute respiratory syndrome. However, TransDigm's commercial aftermarket sales have not been as severely affected as sales of parts for new aircraft. In response, the firm has reduced its employment level by about 15% since Sept. 11, 2001. In addition, as most of TransDigm's commercial aftermarket sales are to distributors, the firm's direct exposure to any one airline is minimal. Efforts to reduce costs and the proven ability to maintain high margins during the continuing downturn in commercial aerospace should enable TransDigm to offset the increased debt from the acquisition and preserve a credit profile consistent with current ratings. TSI TELSYS: March 28, 2003 Balance Sheet Upside-Down by $445K ------------------------------------------------------------- TSI TelSys Corporation announced its audited FY2002 financial results and its first quarter FY2003 financial results. FY2002 Financial Results New orders in FY2002, which ended December 27, 2002, totaled US$3.7 million, as compared with orders of US$4.6 million received in FY2001, which ended December 28, 2001. Sales revenue in FY2002 totaled US$5.0 million versus sales revenue of US$6.3 million in FY2001. At the end of FY2002, the Company's order backlog stood at US$1.1 million as compared with a backlog of US$2.8 million at the end of FY2001. Cost of sales equaled US$3.8 million in FY2002 as compared to US$4.7 million in FY2001. This resulted in gross margin as a percent of revenue of 24.2% in FY2002 as compared to 25.5% of revenues in FY2001. The Company continued to reduce operating expenses for the fourth year in a row. In FY2002, operating expenses equaled US$3.0 million as compared to US$3.2 million incurred in FY2001. The Company's net loss was US$1.7 million for FY2002 versus a net loss of US$1.6 million in FY2001. Cash and cash equivalents at the end of FY2002 totaled US$0.7 million, as compared to US$0.9 million at the end of FY2001. Due to the decline in both billed accounts receivable and unbilled receivables as compared with the previous year-end, total current assets totaled US$1.3 million at the end of FY2002, as compared with US$2.8 million at the end of FY2001. These decreases were a result of the lower volume of new orders received during the year. Total assets stood at US$1.9 million at the end of FY2002, as compared to US$3.6 million at the end of FY2001. Current liabilities totaled US$2.1 million at the end of FY2002 as compared with current liabilities of US$2.0 million at the end of FY2001. Total liabilities were virtually unchanged at US$2.1 million as compared with US$2.1 million at the end of FY2001. Shareholders' deficit was US$0.3 million at the end of FY2002 versus shareholders' equity of $1.5 million at the end of FY2001. First Quarter FY2003 Financial Results The Company also reported the results of operations for the first quarter of FY2003 which ended March 28, 2003. Orders received in the first quarter equaled US$0.7 million as compared with US$1.1 million for the same period in FY2002. At the end of the first quarter of FY2003, orders backlog stood at US$0.9 million, as compared with an orders backlog of US$2.3 million at the end of the first quarter of FY2002. First quarter revenues totaled US$1.0 million, with a gross margin of 20.3% of revenues. This compares with revenues of US$1.5 million and a gross margin of 21.2% in the same period in FY2002. Operating expenses were US$0.6 million in the first quarter of FY2003 as compared with US$0.7 million in the same period in FY2002. The Company recorded a net loss of US$0.4 million in the first quarter of FY2003, as compared with a net loss of US$0.4 million in the same period in FY2002. Current assets totaled US$0.9 million at the end of the first quarter of FY2003, which included cash and cash equivalents of US$50,000. At the end of the first quarter of FY2003, total assets stood at US$1.5 million, total liabilities stood at US$1.9 million and shareholders' deficit was US$0.4 million. UNITED AIRLINES: Washington Airport Demands $2.8 Million Payment ---------------------------------------------------------------- The Metropolitan Washington Airports Authority is the operator of an airport system located in the Washington, D.C. metropolitan area. United Airlines and the Authority were parties to leases for non-residential real property that includes terminal buildings, cargo facilities, maintenance facilities, hangars, fuel farms and flight kitchens. The MWAA tells Judge Wedoff that United owes $2,796,163, with $2,074,573 attributable to the postpetition period. Therefore, the MWAA asks the Court to compel the Debtors to pay $2,074,573 as an administrative expense, because it cannot be disputed that the Debtors utilized MWAA's property, which benefited the estates. (United Airlines Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 609/392-0900) UNITED AUBURN: S&P Assigns BB- Rating to $215MM Senior Bank Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' rating to the $215 million senior secured bank facility of the United Auburn Indian Community. Proceeds from the bank facility have been used to fund construction of the UAIC's casino outside Sacramento, Ca., Thunder Valley. Concurrently, Standard & Poor's assigned its 'BB-' corporate credit and senior secured debt ratings to UAIC. The outlook is stable. "The ratings for Auburn, California-based UAIC reflect the company's reliance on a single source of cash flow, an evolving competitive landscape, and start-up risks associated with a new casino opening," said credit analyst Michael Scerbo. These factors are offset by the expected good performance of the property given its high quality, good market demographics, limited near term competition in its surrounding area, and credit support in the form of a make-well agreement from Station Casinos, Inc. In addition, the considerable progress of the development, with the gaming space open and only non-gaming amenities remaining to be completed, and a completion guaranty from Station, mitigates most of the construction risk. The UAIC is one of 61 federally recognized Native American tribes in California, of which 50 are currently operating gaming establishments. The tribe's compact with the State of California was entered into in May 2000 and expires in May 2020. The compact permits forms of Class III gaming, including slot machines and card games. Station Casinos, the developer and manager of Thunder Valley, is an established casino company with both substantial operating experience and significant capital resources. Station will be paid a development fee of 2% of the project's total cost and a management fee for seven years equal to 24% of pretax income. In addition, Station will provide direct credit support in the form of make-well agreement that ensures Thunder Valley will meet a certain level of operating performance. UNITED DEFENSE: S&P Ups Corporate Credit Rating to BB from BB- -------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit and senior secured bank loan ratings on United Defense Industries Inc. to 'BB' from 'BB-'. All ratings are removed from CreditWatch, where they were placed on June 23, 2003. The outlook is stable. "The upgrade reflects United Defense's improved financial profile and the positive prospects for defense spending," said Standard & Poor's credit analyst Christopher DeNicolo. Debt to EBITDA is expected to decline to below 2x in 2003 from around 2.5x in 2002, reflecting debt repayments from solid internal cash generation. United Defense's equity turned positive in the first quarter of 2003 as a result of full retention of earnings. EBIT and EBITDA interest coverage, 5x and 6.4x, respectively, in 2002, should continue to improve due to satisfactory profitability and debt repayment. Funds from operations to debt was above average for the rating in 2002 at around 30%. The company is likely to pursue further modest-sized debt-financed acquisitions, but the overall credit profile is expected to remain appropriate for the current ratings. Arlington, Virginia-based United Defense is somewhat narrowly focused, serving as prime contractor on a few well-supported military programs with incumbency spanning decades. Diversification has been improved by the debt-financed acquisition of United States Marine Repair in 2002, a provider of ship maintenance and modernization services for nonnuclear ships for the U.S. Navy. The acquisition better balanced revenues from Army and Navy programs and increased the proportion of the U.S. defense budget that United Defense is able to bid for. A large installed base of equipment provides the firm with significant revenue from upgrades, overhauls, and supplies of components. However, a shift in funding priorities by the U.S. Department of Defense towards new programs, especially the Army's Future Combat System, could reduce spending on upgrades for existing vehicles. Major combat systems produced include the Bradley fighting vehicle, the M113 armored personnel carrier, and the Mk45 naval gun system. United Defense, teamed with General Dynamics Co., is developing the manned ground vehicles portion of FCS, including the non-line of sight cannon, which is effectively replacing the cancelled Crusader artillery program. In addition, United Defense is developing the advanced gun system and the advanced vertical launch system for the Navy's DDX next-generation destroyer program. Preparations for the Iraq war positively affected revenues at USMR in the first quarter of 2003 as ship maintenance was accelerated prior to deployment. However, work previously scheduled for the remainder of 2003 could be delayed due to the large number of ships still deployed. United Defense's revenues and profitability are expected to remain steady over the next few years with the improved diversity of its programs as a result of the USMR acquisition and increased defense spending. Solid free cash flows could be used to reduce debt or to partially finance future acquisitions. Overall, the company is expected to maintain a credit profile appropriate for current ratings. U.S. STEEL: Names Anton Lukac as Plant Manager at Clairton Works ---------------------------------------------------------------- Anton Lukac has been named plant manager-Clairton Works for United States Steel Corporation (NYSE: X), John Goodish, executive vice president-operations, announced. The appointment became effective July 1, 2003. Lukac, 43, was previously vice president of strategic implementation for U. S. Steel Kosice, U. S. Steel's steelmaking unit in the Slovak Republic. He and his family will relocate to Pittsburgh from Kosice in their native Slovak Republic. At Clairton Works, Lukac will be responsible for managing coking and coal chemical operations at the largest and most environmentally progressive by-product coke plant in the Western Hemisphere. He will report directly to Ray Terza, who assumed general manager responsibilities earlier this month for all U. S. Steel Pittsburgh-area operations, including both Mon Valley Works and Clairton Works. Goodish, who served as president of USSK during its first two years as a U. S. Steel subsidiary and worked closely with Lukac during that period, said, "Anton is a highly talented individual with a diverse, proven background in both operations and administration. In Central Europe, he has played a key role in our expansion efforts, including coordinating all due diligence and contract negotiations related to purchases U. S. Steel is pursuing in Poland and Serbia. His performance has been excellent in every task we've given him." Lukac graduated from Technical University in Kosice, Faculty of Mechanical Engineering. In 1991, he joined VSZ a.s., a diversified Slovak corporation from which U. S. Steel acquired the steel operations and related assets in November 2000 to form USSK, the largest fully integrated, flat-rolled steel producer in Central Europe. Lukac's first years at VSZ were in the cold rolling mill, where he worked as a technologist and then as head of the microelectronic, technical development and engineering departments. From January 1993 through 1994, he was manager of a cost-saving project covering VSZ's entire steelworks. He then headed the Controlling and Financing departments. In 1996, he was appointed financial director of VSZ OCEL, a steel manufacturing company of VSZ Group. From 1998 to 1999, Lukac served as project manager for a VSZ-U. S. Steel joint venture. Immediately prior to the formation of USSK, he was chairman of VSZ OCEL and vice president of technology for VSZ. When USSK was created in late 2000, he was named vice president for strategic implementation and reported directly to USSK's president. In that position, he was responsible for USSK's pipe and heating radiator operations, had oversight for 18 USSK domestic and foreign subsidiaries, supported regional development through the Economic Development Center, and led USSK's due diligence teams in exploring new business opportunities for U. S. Steel in Europe. Clairton Works is located approximately 20 miles south of Pittsburgh on 392 acres along 3.3 miles of the west bank of the Monongahela River. The plant -- originally a steelmaking operation -- was built by St. Clair Steel Company in 1901 and bought by U. S. Steel in 1904. The first coking batteries were built in 1918. Today, Clairton Works operates 12 coke batteries having nearly 1,000 ovens, and employs about 1,500. The coke produced at Clairton Works is used in the blast furnace operations in the production of molten iron for steel making. Approximately 30 percent of the 4.5 million tons of coke produced last year at Clairton Works was consumed by U. S. Steel facilities with the remainder sold to other domestic steel producers. Clairton Works was the first coke plant in the world to achieve certification to the ISO 14001 standard, a stringent, international standard used to measure facilities' environmental management systems. In 2002, Clairton Works became a member of the U.S. Environmental Protection Agency's National Environmental Performance Track, a voluntary leadership program developed by the EPA to honor outstanding environmental performers. The plant has also received a number of other environmental awards including EPA's Green Lights Program "Partner of the Year," the Allegheny County Health Department Enviro-Star Award, the Pennsylvania Governor's Waste Minimization Award and the Governor's Award for Environmental Excellence. * * * As reported in Troubled Company Reporter's May 9, 2003 edition, Standard & Poor's Ratings Services lowered its corporate credit rating on integrated steel producer United States Steel Corp. to 'BB-' from 'BB' based on concerns about the firm's increased financial risk. Standard & Poor's said that it has removed its ratings on Pittsburgh, Pennsylvania-based United States Steel from CreditWatch, where they were placed with negative implications on Jan. 9, 2003. The current outlook is negative. The company had about $1.7 billion in lease-adjusted debt at March 31, 2003. At the same time, Standard & Poor's said it has assigned its 'BB-' rating to United States Steel Corp.'s new $350 million senior notes due 2010. VICWEST CORP: Canadian Court Extends CCAA Protection Until Today ---------------------------------------------------------------- As previously announced, Vicwest Corporation and certain of its Canadian subsidiaries obtained an order on May 12, 2003 to begin Vicwest's restructuring under the Companies' Creditors Arrangement Act. Vicwest obtained on June 24, 2003 from the Ontario Superior Court of Justice an order granting it and the Subsidiaries an extension to July 2, 2003 of protection under the CCAA. The fourth report dated June 20, 2003 of Deloitte & Touche Inc., in its capacity as monitor of Vicwest, and a supplement thereto dated June 23, 2003 has been filed with the Court. A copy of the Report will be filed by Vicwest with the Canadian securities regulators and will be available on their Web site at http://www.sedar.com A copy of the Report is also available on the Monitor's Web site at http://www.deloitte.ca As previously announced, the preparation and filing of Vicwest's consolidated financial statements for the year ended December 31, 2002 and the quarter ended March 31, 2003 have been delayed as a result of Vicwest's restructuring activities under the CCAA. Vicwest anticipates that it will be able to comply with its financial statement filing requirements after completion of its restructuring process. At this time it is anticipated that Vicwest will emerge from its restructuring process in August, 2003. Vicwest, with corporate offices in Oakville, Ontario, is Canada's leading manufacturer of metal roofing, siding and other metal building products. WEIRTON STEEL: Solid Waste Seeks Relief from Utility Injunction --------------------------------------------------------------- Solid Waste Services, Inc, Solid Waste Services of West Virginia, Inc. and Valero Terrestrial Corporation -- the Solid Waste Entities -- and Weirton Steel Corporation entered into an Industrial Waste Stabilization, Transportation and Disposal Agreement on September 24, 1998. Pursuant to the Agreement, Solid Waste provided services to the Debtor, which includes the transportation of waste and a lease of certain landfill space for the disposal of waste. The Agreement provides for a 10-year term and payment is due every 30 days, on a weekly basis. However, prior to the Petition Date, the Debtor was delinquent in making payments under the Agreement. As of February 2003, the Debtor owes the Solid Waste Entities at least $1,171,951 in undisputed claims arising under the Agreement and at least $1,300,000 in disputed claims. Accordingly, Solid Waste's total prepetition claims against the Debtor amount to at least $2,400,000. Elmer Earl Bowser, Esq., at Synder & Hassig, in New Martinsville, West Virginia, tells the Court that prepetition payments the Debtor actually made under the Agreement were substantially in arrears. The last payment received by the Solid Waste Entities was deposited on April 16, 2003 and covered services rendered in the last week of January 2003. Previously, the Debtor sought an order preventing Solid Waste, among other listed "Utility Companies" from terminating services or requiring deposits or other security in connection with their provision of services. The Debtor alleges that it is already providing "adequate assurance" on the grounds that they expect liquidity under the terms of an anticipated DIP financing agreement. The Debtor further seeks to shift the burden provided by Section 366 of the Bankruptcy Code for the showing of "adequate assurance" from the Debtor to the Utility Companies, by placing the burden on the Utility Companies to request additional assurance of payment after the passage of 20 days after the Petition Date. Accordingly, Solid Waste seeks a reconsideration of the Court's Utility Injunction Order. Mr. Bowser asserts that Solid Waste's request is warranted due to the Debtor's failure to provide the Solid Waste Entities with due process, including the failure to provide adequate notice of the Debtor's Utility Injunction Motion and the corresponding failure to provide an adequate opportunity to participate in the hearing as to the Debtor's Utility Injunction Motion. While many first day motions dealing with emergency matters are addressed in the beginning of a case without substantial notice, Mr. Bowser argues that the Debtor's Utility Injunction Motion was not an emergency, because utilities are prohibited from taking action adverse to the Debtor within 20 days after the Petition Date. Thus, the Debtor's Utility Injunction Motion did not have to be addressed as a first day matter. In view of the substantial amount outstanding under the Agreement, the Debtor's history of non-payment and the Debtor's failure to show sufficient liquidity to enable it to become current in its payments postpetition, the relief the Court granted in the Debtor's Utility Injunction Motion as to the Solid Waste Entities must be reconsidered. Mr. Bowser emphasizes that the Solid Waste Entities should not be required to bear the risk that the Debtor might not be able to be current under the Agreement, or that the Debtor's estate might become administratively insolvent. Moreover, the Debtor's attempt to shift the burden provided by Section 366 to the Utility Companies generally, and to Solid Waste specifically, is contrary to the plain language of the statute and the intent of Congress. The burden of proof as to a debtor's provision of "adequate assurance" rests with the Debtor. The Solid Waste Entities, Mr. Bowser emphasizes, should be permitted to discontinue service upon the Debtor's failure to be current postpetition as to the Agreement, or the Debtor's failure to comply with any order of the Court requiring the Debtor to provide "adequate assurance" to the Solid Waste Entities. Accordingly, Solid Waste asks the Court to reconsider its Utility Injunction Order as to the Solid Waste Entities, and: (a) vacate the Utility Injunction Order to the extent that it granted relief against the Solid Waste Entities; (b) require the Debtor to provide the Solid Waste Entities with "adequate assurance of payment" by paying: (1) a $350,000 security deposit to be paid in cash; and (2) the amounts due under the Agreement after the Petition Date in cash, on a weekly basis for any obligations incurred in the immediately preceding week; and (c) permit the Solid Waste Entities to terminate service on 48 hours notice to the Debtor in the event that the Debtor fails to be current as to the Agreement after the Petition Date or fails to comply with any provisions of the Order. (Weirton Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900) WESTAR ENERGY: Unit Completes Sale of Protection One Europe ----------------------------------------------------------- Westar Energy, Inc.'s (NYSE:WR) wholly owned subsidiary Westar Industries, Inc., has completed the divestiture of its interest in Protection One Europe to ABN Amro Capital France. "The completion of this transaction is a positive step toward the realization of our goals at Westar Energy. This transaction demonstrates the commitment of our team to our restructuring plan and our resolve to return Westar Energy to its roots as a pure electric utility," said Mark Ruelle, Westar Energy executive vice president and chief financial officer. The sale reduces Westar Energy's consolidated debt levels by approximately $114 million, comprised of cash proceeds, the buyer's assumption of debt on Westar Energy's balance sheet and Westar Energy's ability to offset taxes otherwise payable out of the gain on the sale in February of its holdings in ONEOK, Inc. (NYSE:OKE). UBS Warburg acted as advisor to Westar Energy on the transaction. Westar Energy, Inc., (NYSE:WR) is the largest electric utility in Kansas and owns interests in monitored security and other investments. Westar Energy provides electric service to about 653,000 customers in the state. Westar Energy has nearly 6,000 megawatts of electric generation capacity and operates and coordinates more than 36,600 miles of electric distribution and transmission lines. The company has total assets of approximately $6.9 billion, including security company holdings through ownership of Protection One, Inc. (NYSE:POI). Through its ownership in ONEOK, Inc. (NYSE:OKE), a Tulsa, Okla.-based natural gas company, Westar Energy has a 27.5 percent interest in one of the largest natural gas distribution companies in the nation, serving more than 1.9 million customers. For more information about Westar Energy, visit http://www.wr.com * * * As reported in Troubled Company Reporter's April 2, 2003 edition, Standard & Poor's Ratings Services said that its ratings on Westar Energy Inc. (BB+/Developing/--) and subsidiary Kansas Gas & Electric Co. (BB+/Developing/--) would not be affected by the company's announcement of an annual loss of $793.4 million in 2002. The bulk of this charge had already been recorded in the first quarter of 2002 and relates to valuation adjustments for the impairment of goodwill and other intangible assets associated with 88%-owned Protection One Alarm Monitoring Inc., Westar Energy's monitored security business. The credit outlook is developing, indicating that ratings may be raised, lowered, or affirmed. WILLIAMS COS.: Completes 2 Asset Transactions for $55 Million ------------------------------------------------------------- Williams (NYSE: WMB) has recently closed two transactions involving the sale of certain assets in the company's exploration and production and midstream businesses. The following transactions closed over the past six days: -- The previously announced sale of natural gas exploration and production properties in the Denver-Julesberg basin in northeastern Colorado for $28 million to Petroleum Development Corporation (Nasdaq: PETD). -- A new sale involving Williams' 45 percent ownership interest in the 223-mile Rio Grande Pipeline that transports natural gas liquids from Hobbs, N.M., to Ciudad Juarez, Chihuahua. Navajo Southern Inc., a wholly-owned subsidiary of Holly Corporation (Amex: HOC), purchased Williams' interest for $27.5 million, subject to certain closing adjustments. Including the Denver-Julesberg properties and the Rio Grande interest, Williams has received nearly $2.75 billion cash from asset sales that have been closed this year. 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. More information is available at http://www.williams.com As reported in Troubled Company Reporter's May 27, 2003 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. WILLIAMS CONTROLS: Completes Review of Strategic Direction ---------------------------------------------------------- Williams Controls, Inc. (OTC: WMCO) has completed a review of its strategic direction. As a result of that review, Williams will focus on supplying Electronic Throttle Controls (ETC's) for heavy truck and transit busses, where it is a leading supplier of these products, and for emerging recreational and off-road products, and will be seeking to divest its passenger car and light truck ETC product lines. Of the total fiscal 2002 revenues of $52.5 million, sales to Ford and General Motors were approximately $5 million and were expected to increase as further passenger car and light truck lines with ETC's were introduced. Beringea, a boutique investment banking firm located in the Detroit Michigan area with extensive experience in the automotive industry, has been retained by the Company to assist in the transaction. Gene Goodson, Williams President and CEO stated, "Although we have been awarded profitable passenger car and light truck ETC contracts, it is becoming increasingly difficult for a smaller operation to continue to devote the resources required to service the passenger car and light truck product lines. We would prefer to use those resources to support our core heavy truck and transit bus ETC products and pursue opportunities outside passenger car and light truck." He continued, "We have notified Ford and General Motors of our intentions and will work cooperatively with them to accomplish a smooth and orderly transition once a buyer is identified." He concluded, "We have significant opportunities with our core heavy truck and transit bus ETC's and see further opportunities off-road, recreational and other markets. Our focus is on being able to take full advantage of those opportunities." Williams Controls is a designer, manufacturer and integrator of sensors and controls for the motor vehicle industry. For more information, you can find Williams Controls on the Internet at http://www.wmco.com Williams Controls, Inc.'s March 31, 2003 balance sheet shows a total shareholders' equity deficit of about $12.6 million WORLDCOM INC: Shareholder Boycott Threat Passes 10,000 Mark ----------------------------------------------------------- A group of MCI WorldCom, Inc. (OTC Bulletin Board: WCOEQ, MCWEQ) stockholders has received over 10,000 email messages supporting a possible future boycott of the 'new MCI'. "Thousands of people apparently feel that the current bankruptcy reorganization plan is unfair," said Neal Nelson, Spokesperson for the MCI WorldCom Stockholders Group. "The U.S. Trustee and the bankruptcy judge may accept this plan but the average citizens may reject it by cancelling their MCI WorldCom service." "The reorganization plan would transfer ownership of the 'new MCI' to the current bondholders and leave the current WorldCom and MCI stockholders with nothing," continued Nelson. "The stockholders favor an alternate plan with 50% debt reduction, where the bondholders would get 50% ownership of the new company and the current stockholders would be given 50% equity in the new firm." "Through total domination of the bankruptcy committees, the bondholders have prevented consideration of a compromise plan," added Nelson. "The only avenue left for effective protest against this plan is to threaten a boycott of the 'new MCI'". The MCI WorldCom stockholder group is totally independent and is not sponsored by, associated with or endorsed by MCI WorldCom, Inc., any of its officers or affiliated companies. W.R. GRACE: Earns Blessing to Hire Deloitte as Tax Advisors ----------------------------------------------------------- W.R. Grace & Co., joined by its related and affiliated Debtors, obtained the Court's authority to employ Deloitte & Touche LLP as customs services providers and as tax and compensation advisors to the Debtors, nunc pro tunc to February 4, 2003. With the Court's approval, Deloitte will provide these services: (a) compensation and benefits services, including services pertaining to assisting the Debtors in reviewing and analyzing their current employee retention and incentive programs, and in developing new employee retention and incentive programs; (b) tax advisory services, including services pertaining to assisting the Debtors by consulting on various corporate and sales tax issues, and in reviewing and analyzing the tax implications of various inter- company transactions; and (c) customs review and compliance services, including services pertaining to assisting the Debtors with the upcoming Focused Assessment to be conducted by the United States Customs Service. The Debtors have signed engagement letters dated April 14, 2004, regarding provision of the customs services; April 8, 2003, pertaining to Deloitte's provision of the tax services; and March 14, 2003, regarding Deloitte's compensation services. Certain professionals who were formerly associated with Arthur Andersen have joined Deloitte. While at Andersen, certain of these professionals worked on matters pertaining to the Debtors. The Debtors anticipate that certain of these professionals will provide services to the Debtors in these Chapter 11 cases. However, the services included in these three engagement letters are new and will not be a continuation of the Andersen services. Deloitte, at the Debtors' request, will also render additional, related support deemed appropriate and necessary by the Debtors for the benefits of their estates. Compensation Deloitte's fees will be based on the time that Deloitte necessarily spends in providing its tax services to the Debtors, multiplied by its hourly rates. The normal hourly rates charged by Deloitte personnel are: Staff Classification Hourly Billing Rate -------------------- ------------------- Partner/Principal/Director $350 - 660 Senior Manager 250 - 550 Manager 180 - 430 Senior Accountants/Consultants 135 - 340 Staff Accountants/Consultants 100 - 180 (W.R. Grace Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., 609/392-0900) * Kirkpatrick Brings-In Two New Partners at Los Angeles Office -------------------------------------------------------------- The national law firm of Kirkpatrick & Lockhart LLP announced that Richard P. Crane, Jr. and Dennis M. P. Ehling, have joined as partners in K&L's Los Angeles office. Richard P. Crane, Jr. comes to K&L from the firm of Musick, Peeler & Garrett, where he concentrated his practice in the transactional litigation area, primarily in federal courts, as well as serving as corporate counsel to several small to medium-sized corporations. During his career, Mr. Crane has served as the attorney in charge and chief trial counsel of the Organized Crime and Racketeering Section, Western Regional Office, U.S. Department of Justice and Acting U.S. Attorney for the District of Connecticut. Mr. Crane is currently a member of the Board of Directors of Service Merchandise, which is listed on the New York Stock Exchange, and Chairman of the Southern Nevada Culinary and Bartenders Pension Fund. He received his B.A. (1961) and LL.B. (1964) from Vanderbilt University. Mr. Crane is admitted to practice in Tennessee, California, the District of Columbia, and before the United States Supreme Court. Dennis M. P. Ehling also comes to K&L from the firm of Musick, Peeler & Garrett LLP, where he concentrated his practice in complex business litigation, including contract, securities, RICO, Internet, construction, insurance, environmental and education law, throughout California and in federal courts around the country. Mr. Ehling has acted as outside general counsel for Internet-related firms, providing advice on matters as diverse as contract negotiations and disputes, form contracts, multi- jurisdictional liabilities, banking and financial matters and governmental oversight and regulation. He has developed a substantial background in credit and debit payment cards and electronic payment systems, litigating on behalf of and advising clients in numerous matters related to both merchant liabilities and responsibilities and payment card issuance programs. Mr. Ehling believes the combination of K&L's "excellent reputation, national base, and the depth and breadth of practice disciplines offers an unparalleled opportunity for my practice and clients." He completed his undergraduate education at Princeton University and received his J.D., with honors, from the University of Notre Dame Law School in 1993. Mr. Ehling is admitted to practice before all courts of the state of California, the United States District Courts for the Central and Eastern Districts of California, the U.S. District Court for the Western District of Michigan and the United States Court of Appeals for the Ninth Circuit. Paul W. Sweeney, Jr., K&L's Administrative Partner in Los Angeles noted, "The addition of Messrs. Crane and Ehling will extend K&L's national and California complex business litigation practice, as well as deepen our firm's white-collar crime expertise on the West Coast. In the nearly three years since it opened, K&L's Los Angeles office has doubled in size to approximately 30 attorneys. The addition of Messrs. Crane will Ehling will add to these numbers, and foster even greater growth in the near future." In addition to business litigation, attorneys in K&L's Los Angeles office counsel and represent clients in other areas of law including broker-dealer and other financial services, corporate, employment and labor, entertainment, environmental and natural resources, ERISA, insurance coverage, investment management, products liability, real estate, securities, and toxic tort. Kirkpatrick & Lockhart is a national law firm with approximately 700 lawyers in Boston, Dallas, Harrisburg, Los Angeles, Miami, Newark, New York, Pittsburgh, San Francisco, and Washington. K&L serves a dynamic and growing clientele in regional, national and international markets. K&L currently represents over half of the Fortune 100, as well as a full range of emerging and growth companies, and individuals. The firm's practice embraces three major areas--litigation, corporate and regulatory -- and related fields. For more information, please visit http://www.kl.com * Meetings, Conferences and Seminars ------------------------------------ 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 July 31, 2003 FOUNDATION FOR ACCOUNTING EDUCATION Bankruptcy and Financial Reorganization Conference New York, NY Contact: 1-800-537-3635 or visit www.nysscpa.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 2-3, 2003 EUROFORUM INTERNATIONAL European Securitisation Hilton London Green Park Contact: http://www.euro-legal.co.uk 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/ October 16-17, 2003 EUROFORUM INTERNATIONAL Russian Corporate Bonds Renaissance Hotel, Moscow Contact: http://www.ef-international.co.uk 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 April 29-May 1, 2004 ALI-ABA Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Fairmont Hotel, New Orleans Contact: 1-800-CLE-NEWS or http://www.ali-aba.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 ***