/raid1/www/Hosts/bankrupt/TCR_Public/030911.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, September 11, 2003, Vol. 7, No. 180
Headlines
ABITIBI-CONSOLIDATED: Asian Unit Forms Chinese JV with Hebei
ABITIBI CONSOLIDATED: Board Declares Dividend Payable on Oct. 1
ANC RENTAL: Wants Nod to File Marketing Contracts Under Seal
ARMSTRONG HOLDINGS: Sets Dissolution Vote for December 3, 2003
ASSET SECURITIZATION: S&P Cuts Low-B/Junk on 5 Classes' Ratings
ATCHISON CASTING: U.K. Subsidiaries File for Administration
ATLANTIC COAST: Eric Nordling Assumes Marketing Leadership Post
ATLAS AIR: Commences Trading on Pink Sheets Under AAWH Symbol
AVAYA INC: Extends Preferred Financing Relationship with CIT
BOUNDLESS CORP: Files Plan and Disclosure Statement in New York
BOX USA: S&P Cuts Ratings Over Continued Weak Market Conditions
BRODER BROS.: S&P Assigns B+ Corporate Credit Rating
CALL-NET: Low-B Ratings Outlook Changed to Negative from Stable
CANADIAN SATELLITE: S&P Withdraws Ratings at Company's Request
CASUAL MALE: Disclosure Statement Hearing to Convene on Oct. 7
CHASE MORTGAGE: Fitch Takes Actions on Various RMBS Classes
CLYDESDALE CLO: S&P Assigns BB Rating to Class D F-R Notes
COMMSCOPE INC: Names Alan Walp VP of Wireless Marketing & Sales
COMMUNICATION DYNAMICS: Gets Okay to Sell Assets to TVC Holding
CONSECO FINANCE: Court Allows Sale of Credit Accounts to EMCC
CONSECO INC: Gets Go-Signal to Sell SPI & Ardiel Stocks for $27M
CONTIMORTGAGE: Fitch Hatchets Ser. 1997-5 Class B Rating to CCC
CONTINENTAL: Doles-Out $100M of ExpressJet Stake to Pension Plan
DANA: Initiates $6MM Expansion Plan for Kalamazoo, Mich. Center
DAVEL COMMS: Appoints Dave Askeland VP Sales and Marketing
DIAL CORP: CEO and CFO to Present at Banc of America Conference
DOW CORNING: Forms Compound Semiconductor Solutions Business
DVI INC: Seeks OK to Hire Latham & Watkins as Bankruptcy Counsel
ENRON CORP: Secures Court Approval of Shell Settlement Agreement
FEDERAL-MOGUL: Bar Date for EPA Claims Extended Until Sept. 30
FOCAL COMMS: Inks Strategic Alliance Pact with Matrix Telecom
GENTEK INC: Plan Solicitation Period Extended to October 8
GEORGIA-PACIFIC: Completes Exchange Offer for Senior Notes
IMPERIAL PLASTECH: CCAA Claims Bar Date is Tomorrow
INFOCORP COMPUTER: June Half-Year Results Enter Positive Zone
INTERNATIONAL PAPER: CEO John Dillon Retiring on October 31
INTRAWEST: Fiscal Year Results Conference Call Set for Sept. 16
JAMES CABLE: Court Fixes Sept. 22 as General Claims Bar Date
LENNAR CORP: Will Publish Third Quarter Results on Tuesday
MAGNETITE V: Class D Floating-Rate Notes Get BB Prelim. Rating
MEDCOMSOFT: Reports Increased Demand for EMR Products in the US
METALS USA: Will Complete Final Distribution of New Common Stock
MIRANT CORP: Wins Interim Nod to Hire Sitrick and Company, Inc.
NATIONAL STEEL: MFB Corp. Agrees to Acquire Former Headquarters
NOBEL LEARNING: Raises $7MM from Asset Sale & Investment Deals
NORTHWESTERN CORP: Falls Below NYSE Continued Listing Standards
NOVA CHEMICALS: Board of Directors Declares Quarterly Dividend
NRG ENERGY: Wants Plan Filing Exclusivity Extended to January 9
NTELOS INC: Emerges from Chapter 11 Bankruptcy Proceedings
OAKWOOD HOMES: Files Amended Plan & Disclosure Statement in Del.
ON COMMAND: Strikes Definitive Merger Pact with Liberty Media
ON SEMICONDUCTOR: Offering 35 Million Shares of Common Stock
OSE USA: Selling Manufacturing Division to Integrated Packaging
O'SULLIVAN INDUSTRIES: June 30 Net Capital Deficit Tops $138MM
PENN TRAFFIC: Initiates Staff Reduction of 100 Employees
PG&E NATIONAL: Hires Patton Boggs as Special Employment Counsel
PILLOWTEX CORP: Proposes Uniform Asset Sale Bidding Procedures
QWEST COMMS: Completes Sale of QwestDex to Dex Media for $1.3BB
REGIS COLLEGE: S&P Cuts Revenue Bonds Rating to BB
REGUS BUSINESS: Seeks to Stretch Exclusivity through October 27
SILICON GRAPHICS: Introduces Major Storage Initiative
SK GLOBAL: US Trustee Unable to Appoint Creditors' Committee
SMTEK INT'L: Undertakes Private Placement of Preferred Shares
SO. CALIF. EDISON: Fitch Ups Credit Ratings over CPUC Ruling
SPIEGEL GROUP: Soliciting Offers to Acquire Newport News Unit
STARWOOD HOTELS: Names Allison Reid VP for Investor Relations
SUNBLUSH TECHNOLOGIES: Sells 50% Interest in Access Flower
TRITEAL CORP: SEC Terminates Probe into Reports Restatement
TWINLAB CORP: Retains Weil Gotshal as Bankruptcy Counsel
TYCO INT'L: Will Publish Fourth Quarter Results on November 4
UNITED AIRLINES: U.S. Bank Wants to Access Miami-Dade Proj. Fund
US AIRWAYS: Issues 1.3 Million Shares to Unsecured Creditors
US ESCROW SERVICES: Case Summary & 20 Largest Unsec. Creditors
US FLOW: Gets Nod to Tap Wardrop & Wardrop as Bankruptcy Counsel
USG CORP: Asks Court to Waive Local Rule 3007-1 Requirement
VICWEST: Court-Approved CCAA Plan to be Implemented Tomorrow
WEIRTON STEEL: Court Approves Key Employee Retention Program
WHEELING-PITTSBURGH: James G. Bradley Elected as Board Chairman
WORLDCOM INC: Plan Confirmation Hearing to Resume Today
WORLDCOM INC: Reaches Settlement with Various Creditor Groups
WORLDCOM: Cerberus' Neporent Calls MCI Settlement A Step Forward
WORLDCOM INC: Public Interest Institute Published Policy Study
WORLDCOM INC: Wants Go-Signal to Assume Amended FPLI Fiber Lease
XCEL ENERGY: PSCC Sells $575 Mill. First Collateral Trust Bonds
* Buxbaum/Century Brings-In Veteran Auctioneer James Carlson
* DebtTraders' Real-Time Bond Pricing
*********
ABITIBI-CONSOLIDATED: Asian Unit Forms Chinese JV with Hebei
------------------------------------------------------------
Pan Asia Paper Co. Pte Ltd, a 50-50 percent joint venture between
Norske Skogindustrier ASA and Abitibi-Consolidated Inc., announced
the creation of a 65-35 percent joint venture with Hebei Longteng
Paper Corporation of China to build and operate a newsprint mill
in the industrially developed Hebei Province of China, 280 km
southwest of Beijing.
The name of the joint venture is Hebei Pan Asia Long-Teng Paper
Co. Ltd. Construction of the mill will begin during the fourth
quarter of 2003 and it is expected to start production during the
third quarter of 2005 with a rated capacity of 330,000 tonnes per
year. The newsprint will be produced from 100 percent recycled
fiber. The project represents an investment of approximately
US$300 million.
"This will be one of the most cost-competitive mills in the world,
built at a cost of less than US$1000 per tonne," said Pan Asia
Paper's President and CEO, Andre Van Hattum. "This project is
completely in line with our strategy of expanding as a more local
supplier. Pan Asia Paper operates one of the world's most modern
fleets of newsprint machines," added Van Hattum. "Its growth and
profitability will enable Pan Asia Paper to fund this project on
its own, including its share of equity of around US$70 million,
without any cash from its shareholders."
The project is ideally located in the greater Beijing metro area
with its population of 100 million and high-anticipated growth
rates. The creation of the joint venture in Hebei has strong
support both from local and central authorities. Alain
Croisetiere, formerly the Senior Vice President, Special Projects
for Pan Asia Paper, is Project/Managing Director for the new
company.
"Pan Asia Paper has been a success from the very beginning," says
Norske Skog's President and CEO, Jan Reinas. "This new commitment
in China gives us an even stronger position in the world's most
interesting growth region. The project has low investment cost,
and we are convinced it will add value to our shareholders. Pan
Asia Paper has today a 25 percent market share in non-Japan Asia
and markets paper that was delivered from a number of different
companies just a few years ago. Pan Asia Paper has already a
strong position in China through Shanghai Pan Asia Potential
Paper, and this position will be further enhanced by the Hebei
mill."
China has seen a rapid growth in newsprint demand in recent years.
According to the Pulp and Paper Products Council, demand has risen
from 1.15 million tonnes in 1998 to nearly 1.8 million tonnes in
2002. Market outlook estimates annual growth at close to 8 percent
until 2010.
"Abitibi-Consolidated has long viewed Pan Asia Paper as our growth
vehicle in the world's most promising regions. The Hebei mill is
expected to sell 70 percent of its production within a 500 km
radius of the mill. Pan Asia Paper is extremely well positioned to
capture its share of the Chinese newsprint consumption growth from
just under 2 million tonnes today to 3 million tonnes in 2008,
when Beijing hosts the summer Olympics," said John W. Weaver,
President and CEO of Abitibi-Consolidated.
Pan Asia Paper Co. Pte Ltd, headquartered in Singapore, is a
leading Asian supplier of newsprint and other publication paper,
with world-class production facilities: Jeonju and Chongwon in
South Korea; Singburi in Thailand; and Shanghai in China. The
aggregated capacity of Pan Asia Paper's mills amounts to 1,320,000
tonnes of newsprint and 135,000 tonnes of other publication paper.
Pan Asia Paper is also the sole distributor in the Asian Pacific
region for its two equal shareholders, Abitibi-Consolidated Inc.
and Norske Skogindustrier ASA and its affiliates. Pan Asia Paper
markets approximately a half million metric tonnes of newsprint
and groundwood specialties from North America, Europe and Oceania.
Pan Asia Paper employs approximately 2100 people and supplies
products to nearly 20 countries.
Hebei Longteng Paper Corporation Ltd. is an investment company
partly owned by each of Hebei Province, Shijiazhuang City and
Zhaoxian County.
More information can be found on Abitibi-Consolidated Inc.'s Web
site http://www.abitibiconsolidated.comNorske Skog's Web site
http://www.norske-skog.comand Pan Asia Paper's Web site
http://www.panasia.com.sg
In November 2002, Moody's cut its rating on the Company's
outstanding debentures to Ba1. Abitibi is also party to a
C$541,875,000 credit facility arranged by Citicorp, Scotiabank and
CIBC maturing on December 18, 2003.
ABITIBI CONSOLIDATED: Board Declares Dividend Payable on Oct. 1
---------------------------------------------------------------
Abitibi-Consolidated Inc.'s (NYSE: ABY, TSX: A) Board of Directors
has approved a dividend payment for shareholders of record on
September 19, 2003 amounting to 2.5 cents per common share payable
on October 1, 2003.
Abitibi-Consolidated is the world's leading producer of newsprint
and value-added paper as well as a major producer of wood
products, generating sales of $5.1 billion in 2002. With 16,000
employees, the Company does business in more than 70 countries.
Responsible for the forest management of 18 million hectares,
Abitibi-Consolidated is committed to the sustainability of the
natural resources in its care. The Company is also the world's
largest recycler of newspapers and magazines, serving 17
metropolitan areas with more than 10,000 recycling locations.
Abitibi-Consolidated operates 27 paper mills, 21 sawmills, 3
remanufacturing facilities and 1 engineered wood facility in
Canada, the US, the UK, South Korea, China and Thailand.
In November 2002, Moody's cut its rating on the Company's
outstanding debentures to Ba1. Abitibi is also party to a
C$541,875,000 credit facility arranged by Citicorp, Scotiabank and
CIBC maturing on December 18, 2003.
ANC RENTAL: Wants Nod to File Marketing Contracts Under Seal
------------------------------------------------------------
Elio Battista, Jr., Esq., at Blank Rome LLP, in Wilmington,
Delaware, informs the Court that the ANC Rental Debtors will
assign to Vanguard Car Rental USA Inc. certain sales and marketing
contracts. These contracts are highly confidential and
constitute sensitive, commercial proprietary information.
The Debtors are aware that their competitors have been closely
monitoring these Chapter 11 proceedings. Consequently if the
Debtors were required to disclose publicly the parties to their
sales and marketing contracts, the Debtors' competitors would
then have immediate access to the Debtors' customer list which is
critically sensitive proprietary information. Should the list
become available publicly, it is likely that the disclosure would
have a serious detrimental effect on the value of the assets to
the Debtors and Cerberus Capital Management.
Notice of the Debtors' proposed assumption and assignment of the
Assigned Sales and Marketing Contracts was provided to affected
counterparties. However, due to the sensitive proprietary nature
of the contracts, the list was not disclosed to any other third
parties. The Debtors have not received any objections to their
proposed assumption and assignment of the Assigned Sales and
Marketing Contracts.
With the Court's permission, the Debtors will file the Assigned
Sales and Marketing Agreements under seal. The list will only be
made available for in camera review by the Court and will not be
made public through the Court's docket in the Debtors' Chapter 11
proceedings. (ANC Rental Bankruptcy News, Issue No. 38; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
ARMSTRONG HOLDINGS: Sets Dissolution Vote for December 3, 2003
--------------------------------------------------------------
Armstrong Holdings, Inc., has scheduled a special meeting of
shareholders on December 3, 2003, where the only agenda item is a
vote on dissolution. In its SEC filing, Holdings explains that
shareholders may vote in person at the law offices of Weil Gotshal
& Manges in New York, on by proxy through the mail, the Internet
or a toll-free telephone number. In its statement, Holdings
reminds the shareholders that this special meeting is not
intended, and will not be used, as a forum for the shareholders'
views on AWI's reorganization plan. (Armstrong Bankruptcy News,
Issue No. 46; Bankruptcy Creditors' Service, Inc., 609/392-0900)
ASSET SECURITIZATION: S&P Cuts Low-B/Junk on 5 Classes' Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on classes
B-2, B-3, B-4, B-5, and B-6 of Asset Securitization Corp.'s
commercial mortgage pass-through certificates series 1997-D4. At
the same time, the ratings on classes A-1B, A-1C, A-1D, A-6, A-8,
and B-1 from the same transaction are affirmed. Standard & Poor's
did not rate any other certificates in this transaction.
The lowered ratings reflect anticipated credit support erosion
upon the eventual disposition of some of the specially serviced
assets, particularly retail and lodging assets; concerns regarding
some of the loans on the servicer's watchlist; ongoing interest
shortfalls on class B-6; and the susceptibility of class B-5 to
future shortfalls.
The affirmations reflect credit support levels that adequately
support the existing ratings under various stress scenarios.
There are eight specially serviced loans, with a current combined
balance of $126.6 million, or 10.2% of the pool. Four of these
loans are current and four are 90-plus days delinquent (combined
balance of $57.7 million, or 4.6% of the pool). There are no other
delinquent loans in the pool.
Hudson Hotels, the sixth largest loan at $51.3 million, or 4.1% of
the pool, is current, but specially serviced by GMAC Commercial
Mortgage Corp., which recently purchased Lend Lease Asset
Management. The loan is secured by 16 lodging properties
consisting of three full-service and 13 limited-service hotels
totaling 1,809 rooms. Eight of the limited-service hotels are
exterior-corridor Fairfield Inns. The loan was placed in special
servicing due to the bankruptcy of Hudson Hotels Corp., the
borrower's parent corporation. GMACCM reports an overall net cash
flow debt service coverage ratio of 0.84x on a trailing 12-month
basis as of June 30, 2003, down from 1.07x for 2002 and 1.20x for
2001. The hotel portfolio reports overall occupancy of 58.5% and
an average daily rate of $60.73 and revenue per available room of
$36.61 for 2002. GMACCM received a broker's opinion of value in
excess of the loan balance from a broker who had prior dealings
with some of the assets.
Two large retail loans, with a combined balance of $44.6 million,
or 3.58% of the pool, and two lodging properties (combined $13.1
million, or 1.05% of the pool), merit concern and are discussed
below:
-- Prime Retail II has a current balance of $24.5 million
(1.97% of the pool) and is secured by three factory outlet
centers located in Coeur D'Alene, Idaho (50% occupied);
Bend, Oregon (94% occupied); and Sedona, Arizona (83%
occupied). The loan is 90-plus days delinquent, and the
borrower has indicated a desire to return the properties to the
lender, as they do not support the current debt. The loan
carries a coupon of 8.35%, and reported a year-end 2002 DSCR of
0.84x and a March 31, 2003 TTM DSCR of 0.83x. GMACCM is seeking
a deed-in-lieu foreclosure. The largest of the three, the Coeur
D'Alene property, is performing extremely poorly. The property
has a poor physical layout, as it is constructed with the rear
end of the buildings facing the nearby interstate.
-- The Century Square Mall loan has a balance of $20 million, and
is secured by a 415,713-square-foot retail shopping center
built in 1991 and located in West Mifflin, Penn. (about nine
miles southeast of Pittsburgh, and close to the Allegheny
County Airport). It is 90-plus days delinquent. Several tenants
have gone bankrupt and either left the center or have had
their rents reduced. The latest servicer-reported DSCR was
0.58x TTM as of March 31, 2003, with occupancy at 75%. A loss
is expected upon disposition.
-- There are two delinquent lodging loans in special
servicing: the full-service Radisson Hotel in Columbus,
Ohio ($8.7 million, or 0.70% of the pool), and the
extended-stay Clarion Suites Inn in Manchester,
Connecticut, near Hartford ($4.4 million, or 0.35% of the
pool). Both loans are 90-plus days delinquent and are
suffering from poor performance, with low occupancies and
ADRs. Significant losses could occur on the Radisson Loan,
as the hotel is operating at a loss.
The servicer's watchlist includes 25 loans totaling $227.1 million
(18.2% of the pool). Of note, there are two top 10 loans that
appear on the servicer's watchlist. The Saracen Office portfolio,
the second largest loan, at $64.9 million, consisting of six
office properties located near Boston, Massachusetts, appears on
the watchlist due to low DSCRs and occupancies for some of the
assets. However, one vacant property has been substantially
renovated and enlarged and is now available for leasing. The
fifth largest loan, Burnham Pacific, at $52.9 million, consists of
two retail shopping centers in California. The loan appears on the
watchlist due to occupancy problems (74%) at one of the properties
relating to the borrower's inability to re-lease the vacant Home
Base space.
As of August 2003, the trust collateral consisted of 114
commercial mortgages, with an outstanding balance of $1.244
billion, down from $1.403 billion at issuance. Cumulative pool
losses to date from eight loans total $8.9 million. The master
servicer, GMACCM, formerly CapMark Services L.P., reported full-
year 2002 NCF DSCRs for 88% of the pool. Approximately 10%
of the pool (six loans) has been fully defeased and need not
report DSCRs. Based on this information, Standard & Poor's
calculated the weighted average DSCR for the pool to be 1.56x, up
from 1.42x at issuance. The current weighted average DSCR for the
top 10 loans totaling $506.35 million, or 40.7% of the pool
(excluding defeasance), has increased to 1.52x for year-end 2002,
compared to 1.42x at issuance. All but two of the top 10 loans
reported improved DSCR performance since issuance.
The pool has significant geographic concentrations in California
(21%), New York (7%), Massachusetts (6%), and Florida (5%).
Significant collateral type concentrations include retail (34%),
office (17%), lodging (14%), multifamily (13%), and treasuries
(10%).
Based on discussions with GMACCM, Standard & Poor's stressed
various loans in the mortgage pool as part of its analysis. The
expected losses and resultant credit levels adequately support the
rating actions.
RATINGS LOWERED
Asset Securitization Corp.
Commercial mortgage pass-thru certs series 1997-D4
Rating
Class To From Credit Enhancement (%)
B-2 BB- BB 6.05
B-3 B+ BB- 4.92
B-4 B- B+ 3.23
B-5 CCC B 2.10
B-6 D CCC 0.97
RATINGS AFFIRMED
Asset Securitization Corp.
Commercial mortgage pass-thru certs series 1997-D4
Class Rating Credit Enhancement (%)
A1-B AAA 35.39
A1-C AAA 35.39
A1-D AAA 35.39
A-6 BBB 15.08
A-8 BBB- 11.69
B-1 BB+ 8.87
ATCHISON CASTING: U.K. Subsidiaries File for Administration
-----------------------------------------------------------
Atchison Casting Corporation's (OTC Bulletin Board: AHNCQ) U.K.
subsidiaries (with the exception of Sheffield Forgemasters
Engineering Ltd.) filed for administration on September 8, 2003.
Atchison Casting UK Ltd., Atchison Casting's U.K. subsidiary
serving as the holding company for its U.K. operations, filed its
petition in the Leeds High Court. ACUK has requested that the
filings be jointly administered for procedural purposes.
In England, administration proceedings allow an administrator to
continue to operate the businesses while attempting to sell them
in an orderly manner. ACUK's operations at Sheffield Forgemasters
Engineering Ltd. in the oil and gas, ingot, petrochemical and
power generation markets have not been included in any filing and
are operating as usual.
PriceWaterhouseCoopers has been appointed as the administrator and
is operating the cast roll making operations of Sheffield
Forgemasters Rolls while it markets these operations for sale in
the proceeding. Atchison Casting intends to sell all of its U.K.
operations (including Sheffield Forgemasters Engineering) for the
highest value. Management is unable to predict how much cash will
be generated from these sales. At this time, it appears unlikely
that any funds will be left for Atchison Casting, as the
controlling stockholder, after payment of creditors.
Atchison Casting Corporation, headquartered in St. Joseph,
Missouri, together with its affiliates, produce iron, steel and
non-ferrous castings and machining for a wide variety of
equipment, capital goods and consumer markets. The Company filed
for chapter 11 protection on August 4, 2003 (Bankr. W.D. MO. Case
No. 03-50965). Mark G. Stingley, Esq., and Cassandra L. Writz,
Esq., at Bryan Cave LLP represent the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed $136,750,000 in total assets and
$96,846,000 in total debts.
ATLANTIC COAST: Eric Nordling Assumes Marketing Leadership Post
---------------------------------------------------------------
Atlantic Coast Airlines (Nasdaq: ACAI) has appointed Eric Nordling
to the position of Senior Vice President of Marketing. He will be
responsible for all elements of marketing associated with ACA's
new low-fare airline currently in development including;
advertising, promotions, sales, route selection, aircraft
scheduling, pricing, revenue management, public relations and
communications.
Mr. Nordling has been with ACA since 1997, and most recently held
the position of Vice President of Corporate Planning. Prior to
2001, during the period in which ACA was responsible for its own
route selection, aircraft scheduling, pricing and revenue
management, he was the Vice President of Market Planning and in
charge of those functions for the company.
He has 17 years experience in the airline industry, holding a
variety of positions in the areas of marketing, planning and
maintenance. Before coming to ACA, he spent two years with Delta
Air Lines, where he served as Manager of Pricing and Revenue
Management for the company's western U.S. operations. He also
held a variety of positions with United Airlines at their world
headquarters outside Chicago and their maintenance operations base
in San Francisco.
In announcing the appointment, ACA Chairman and Chief Executive
Officer Kerry Skeen said, "We are very confident that Eric is
exactly the right person to head up the marketing effort for our
new airline. He has a proven track record of success and has
taken a leadership role in the development of our new business
plan." He added, "We remain very excited about the future and
look forward to the time when we will be able to introduce a new
airline based on low fares and convenient schedules to customers
in the Washington, DC area and across the country."
Mr. Nordling holds a MBA from the Kellogg Graduate School of
Management at Northwestern University.
ACA currently operates as United Express and Delta Connection in
the Eastern and Midwestern United States as well as Canada. The
company also operates charter flights as ACA Private Shuttle. ACA
has a fleet of 146 aircraft -- including 118 jets -- and offers
over 830 daily departures, serving 84 destinations.
On July 28, 2003, ACA announced it anticipates that its
longstanding relationship with United Airlines will end, and that
it will establish a new, independent low-fare airline to be based
at Washington Dulles International Airport.
Atlantic Coast Airlines (S&P, B- Corporate Credit Rating,
Negative) employs over 4,800 aviation professionals. The common
stock of parent company Atlantic Coast Airlines Holdings, Inc. is
traded on the Nasdaq National Market under the symbol ACAI. For
more information about ACA, visit http://www.atlanticcoast.com
ATLAS AIR: Commences Trading on Pink Sheets Under AAWH Symbol
-------------------------------------------------------------
Atlas Air Worldwide Holdings, Inc.'s shares of its common stock
are being quoted on the Pink Sheets under a new ticker symbol,
AAWH.
The company expects the common stock to be quoted on the Pink
Sheets pending final determination by the New York Stock Exchange
whether to delist the company's common stock from the NYSE.
Atlas Air Worldwide Holdings is the parent company of Atlas Air
and Polar Air Cargo, offering its customers a complete line of
freighter services, including ACMI (Aircraft, Crew, Maintenance,
and Insurance) contracts, charter services and time-definite,
airport-to-airport scheduled airfreight service with a fleet of
Boeing 747 freighters. Learn more at http://www.atlasair.com
As reported in Troubled Company Reporter's September 2, 2003
edition, Atlas Air Worldwide Holdings, Inc. announced that, in
light of progress being made in negotiations with the holders of a
majority of Atlas Air, Inc. Class A Enhanced Equipment Trust
Certificates, the holders agreed to extend a previously announced
forbearance agreement.
This extension, from Aug. 31 to Sept. 12, 2003, enables Atlas Air
to continue to negotiate a restructuring of its EETC financing
transactions. All other terms of the original forbearance
agreement remain in effect.
The EETCs were issued in 1998, 1999 and 2000 to finance Atlas
Air's initial fleet of 12 Boeing 747-400 freighter aircraft.
AVAYA INC: Extends Preferred Financing Relationship with CIT
------------------------------------------------------------
CIT Group Inc. (NYSE: CIT) and Avaya Inc. (NYSE: AV) announced the
extension of their sales financing relationship, through September
2006.
The financing arrangement is offered through Avaya Financial
Services, a business unit of CIT. This unit has provided
customized leasing solutions and asset management services to more
than 700,000 customers of Avaya and its predecessors worldwide
ranging from small, single location ventures to global Fortune 500
corporations since 1985.
CIT's commitment to customer service for Avaya and its Business
Partners is exemplified by dedicated sales and support personnel
teams, online customer and credit account access, an industry-
leading "end-to-end" lease platform, and customer-friendly
application, lease documentation and invoicing procedures.
"CIT is proud to extend our relationship with Avaya," commented
Tom Hallman, Vice Chairman, CIT Specialty Finance. "CIT has been
the leading provider of full-service financing solutions for
customers of Avaya and its predecessors. We look forward to
continuing to provide innovative and affordable financing
platforms for Avaya customers as they acquire, add, or upgrade
equipment to effectively compete in today's business environment."
Avaya Inc., whose March 31, 2003 balance sheet shows a total
shareholders' equity deficit of about $25 million, designs, builds
and managers communications networks for more than one million
businesses around the world, including 90 percent of the Fortune
500(R). A world leader in secure and reliable Internet Protocol
telephony systems, communications software applications and
services, Avaya is driving the convergence of voice and data
application across IT networks, enabling businesses large and
small to leverage existing and new networks to enhance value,
improve productivity and gain competitive advantage. For more
information visit the Avaya Web site: http://www.Avaya.com
Driving the convergence of voice and data communications with
business applications -- and distinguished by comprehensive
worldwide services -- Avaya helps customers leverage existing and
new networks to achieve superior business results. For more
information visit the Avaya web site: http://www.avaya.com
CIT Group Inc. (NYSE: CIT), a leading commercial and consumer
finance company, provides clients with financing and leasing
products and advisory services. Founded in 1908, CIT has nearly
$50 billion in assets under management and possesses the financial
resources, industry expertise and product knowledge to serve the
needs of clients across approximately 30 industries. CIT, a
Fortune 500 company, holds leading positions in vendor financing,
U.S. factoring, equipment and transportation financing, Small
Business Administration loans, and asset-based and credit-secured
lending. CIT, with its principal offices in New York City and
Livingston, New Jersey has approximately 6,000 employees in
locations throughout North America, Europe, Latin and South
America, and the Pacific Rim. For more information, visit
http://www.cit.com
BOUNDLESS CORP: Files Plan and Disclosure Statement in New York
---------------------------------------------------------------
Boundless Corporation (OTC: BDLS) has filed its Plan of
Reorganization and Disclosure Statements to the U.S. Bankruptcy
Court for the Eastern District of New York.
After the Court approves the language in the Disclosure
Statements, it will be submitted to the Company's creditors for
their approval. The Company's Reorganization Plan is being
jointly proposed by the Company, its Unsecured Creditor's
Committee, and its new investor, Vision Technologies, Inc.
Joseph V. Joy, Boundless Corporation's president and CEO said, "We
are getting good support from all corners, including our suppliers
and customers. At current course and speed, we will emerge from
Chapter 11 in the fourth quarter of this year. The Company is
operating profitably in Bankruptcy, but looks forward to emerging
from Bankruptcy. Emerging in less than ten months from filing,
would be an unusually short period of time to complete this
process."
Boundless Corporation is a global technology company with two
subsidiaries: Boundless Technologies, Inc. --
http://www.boundless.com-- a desktop display products company,
and Boundless Manufacturing Services, Inc., an emerging EMS
company providing build-to-order systems manufacturing, as
well as complete end-to-end solutions from design through product
end-of-life to its customers.
BOX USA: S&P Cuts Ratings Over Continued Weak Market Conditions
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Box USA Holdings Inc. to 'B-' from 'B'. In addition, the
rating on the company's $170 million senior secured notes due 2006
was lowered to 'CCC+' from 'B'. The current outlook is negative.
"The corporate credit rating was lowered because of the prospects
for continued weak cash generation and tight liquidity during the
next few quarters, as demand for corrugated containers remains
depressed and energy costs stay high," said Standard & Poor's
credit analyst Cynthia Werneth.
"The one-notch distinction between the corporate credit rating and
the rating on the notes reflects the presence of a meaningful
amount of debt that is secured by higher quality assets,
particularly bank debt secured by inventory and receivables".
Standard & Poor's said that the lowered ratings incorporate its
expectation that the company will be able to obtain bank covenant
relief if necessary.
Standard & Poor's said that its ratings on Box USA reflect
industry cyclicality, limited product diversity, and an aggressive
financial risk profile. Box USA is a privately held, independent
converter of corrugated packaging materials. The company
participates in a consolidating industry populated with larger,
vertically integrated, financially stronger competitors.
BRODER BROS.: S&P Assigns B+ Corporate Credit Rating
----------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Broder Bros. Co., the largest distributor of
printable sportswear in the U.S.
At the same time, Standard & Poor's assigned a 'B-' rating to the
company's proposed $175 million senior unsecured notes due 2010.
The ratings are based on preliminary terms and conditions and are
subject to review once final documentation is received.
The outlook on Plymouth, Michigan-based Broder is stable.
Standard & Poor's estimates that Broder will have total debt of
about $256 million at the closing of the transaction.
"The ratings on Broder will reflect its highly leveraged financial
profile after it completes the proposed acquisition of its large
competitor, the Alpha Shirt Company," said Standard & Poor's
credit analyst Lori Harris. "The ratings also reflect Broder Bros'
weak volume growth, its integration risk, and its highly
competitive operating environment. Somewhat mitigating these
factors will be the combined company's leading domestic market
position in imprintable sportswear and accessories, its national
distribution infrastructure, and its diverse customer base."
Broder has signed a purchase agreement to acquire Alpha, a leading
U.S.-based apparel distributor, from Linsalata Capital Partners, a
private equity firm, for about $232 million. Proceeds from the
notes offering, a portion of the company's proposed $175 million
senior secured revolving credit facility (unrated by Standard &
Poor's), and about $76 million of a new equity investment from
Bain Capital (a private equity firm and majority owner of Broder)
will be used to acquire Alpha and refinance Broder's existing
indebtedness. Upon closing, which is expected shortly, Alpha and
its subsidiaries will become direct or indirect subsidiaries of
Broder.
The proposed acquisition of Alpha will further diversify Broder's
product offering and customer base. Comprising the two leading
U.S. distributors of imprintable sportswear (including "blank"
products such as t-shirts, sweat shirts, golf shirts, and
headwear) and accessories (including "blank" sports bags, totes,
and towels), Broder will become the clear leader in the industry.
The company is expected to realize cost savings from purchasing
leverage, consolidating back-office operations and rationalizing
facilities. However, there is significant integration risk
associated with the transaction given the size of Alpha's business
in relation to Broder. Furthermore, Broder does not have previous
experience with sizable acquisitions.
Revenue and EBITDA are expected to more than double after the
acquisition, providing critical mass to the business and the
opportunity for synergistic benefits. In addition, the company's
operating margin (before D&A) is expected to increase due to the
higher margin generated by Alpha.
CALL-NET: Low-B Ratings Outlook Changed to Negative from Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its ratings on
Toronto, Ontario-based telecom operator Call-Net Enterprises Inc.,
including the 'B' long-term corporate credit rating. At the same
time, the outlook was revised to negative from stable.
The outlook revision reflects Call-Net's exposure to the long
distance market, which represents about 60% of the company's
revenues. Call-Net's long distance revenues continue to be
negatively affected by pricing pressure due to intense
competition.
"The ratings on Call-Net are based on its weak business risk
profile, reflective of competitive pressures in its core telecom
business, particularly in long distance where it has the greatest
exposure," said Standard & Poor's credit analyst Joe Morin. The
ratings also reflect a relatively weak competitive offering in
both local and Internet services. Call-Net's financial risk
profile is adequate for the ratings category and has been further
enhanced recently through an equity issue and a receivables
securitization program. Expectations for long-term improvement,
however, are limited, given relatively weak growth prospects for
the company.
Call-Net continues to be affected by long distance pricing
pressures, resulting in a 7.3% sequential decline in long distance
revenues for second-quarter 2003, and about a 7% decline over the
same quarter last year. As a percentage of total revenues, long
distance accounts for about 60%, decreasing over previous periods,
but remains an area of significant exposure for Call-Net. Long
distance will continue to be affected by pricing declines, which
are not likely to be fully offset by increases in volumes. In
addition, data revenues are expected to continue to be soft as
Call-Net lacks a competitive service offering, particularly for
residential customers where it offers dial-up services only. The
company also will continue to face churn and pricing pressures in
this market segment. The most promising area for revenue growth is
in Call-Net's local service offering, which currently accounts for
about 13% of revenues, but which is growing sequentially.
In July 2003, Call-Net announced the acquisition of Mosaic
Performance Solution Canada for C$14.3 million cash plus
adjustments. MPS Canada is a long distance reseller with 100,000
customers and revenues of about C$25 million. Although the
transaction might replace revenue losses from declining long
distance prices, the transaction increases Call-Net's exposure to
this segment of its business. Nevertheless, the transaction does
not materially enhance, or detract from, the company's prospects.
The negative outlook reflects Standard & Poor's view that Call-Net
will continue to be negatively affected by deterioration in the
long distance market. The outlook also incorporates a capital-
constrained business plan as the company curtails expansion in
local voice and data services. Overall growth will continue to be
constrained by a weak long distance and data-service market,
partially offset by an improving outlook for local telephony.
There are no near-term debt maturities or risk of breach of
covenants under the senior secured notes, providing the company
with some future flexibility.
CANADIAN SATELLITE: S&P Withdraws Ratings at Company's Request
--------------------------------------------------------------
Standard & Poor's Ratings Services said it withdrew its ratings on
satellite services provider Canadian Satellite Communications Inc.
and its wholly owned subsidiary, Star Choice Communications Inc.
(S&P, B+ Long-term Corp. Credit Ratings, Stable) at the company's
request. The ratings were removed from CreditWatch where they were
placed July 3, 2003, following Cancom's parent, Calgary, Alberta-
based Shaw Communications Inc.'s announcement that the company
would redeem all of Star Choice Communications' US$150 million 13%
senior secured notes due 2005. The redemption was completed at the
end of August 2003.
CASUAL MALE: Disclosure Statement Hearing to Convene on Oct. 7
--------------------------------------------------------------
As previously reported in the Troubled Company Reporter's
September 8, 2003 issue, Casual Male Corp., and its debtor-
affiliates filed with the U.S. Bankruptcy Court for the Southern
District of New York, their Liquidating Chapter 11 Plan and
Disclosure Statement. The Plan was a joint plan with the duly-
appointed Committee of Unsecured Creditors in the Debtors' cases.
A hearing to consider approval of the Disclosure Statement will
convene on October 7, 2003 at 10:00 a.m. At that hearing, the
Court will determine whether or not the Disclosure Statement
provides adequate information for all of the Debtors' creditors to
decide whether to accept or reject the Plan.
All objections and proposed modifications of the Plan are due on
September 24, 2003, must be filed with the Court, and copies must
be served on:
i) Attorneys for the Debtors
Cadwalader, Wickersham & Taft LLP,
100 Maiden Lane, New York, New York 10038
Attention: Adam C. Rogoff, Esq.;
ii) Attorneys for the Official Committee of Unsecured
Creditors
Kronish, Lieb, Werner & Hellman LLP
1114 Avenue of the Americas, New York, New York 10136,
Attention: Lawrence C. Gottlieb, Esq.;
iii) the Office of the United States Trustee
33 Whitehall Street, 21st Floor
New York, New York 10004
Attention: Brian Masumoto, Esq.; and
iv) Casual Male Corp., et al.
555 Turnpike Street, Canton, Massachusetts 02021
Attention: Michael O'Hara, Esq.
Casual Male Corp. with its debtor-affiliates filed for chapter 11
protection on May 18, 2001. Adam C. Rogoff, Esq., at Cadwalader,
Wickersham & Taft represents the Debtors as they wind-down their
assets. When the Company filed for protection from its creditors,
it listed $299,341,332 in total assets and $244,127,198 in total
debts. The Debtors anticipate that the Estates may have in excess
of $70 million to be distributed to creditors under a chapter 11
plan.
CHASE MORTGAGE: Fitch Takes Actions on Various RMBS Classes
-----------------------------------------------------------
Fitch Ratings has upgraded fifteen classes and affirmed 27 classes
for the following Chase Mortgage Finance Trust mortgage pass-
through certificates:
Chase Mortgage Finance Trust, mortgage pass-through certificate,
series 1998-AS1
-- Class A affirmed at 'AAA';
-- Class M affirmed at 'AAA';
-- Class B1 affirmed at 'AAA';
-- Class B2 affirmed at 'AA';
-- Class B3 affirmed at 'A';
-- Class B4 affirmed at 'BB'.
Chase Mortgage Finance Trust, mortgage pass-through certificate,
series 1998-AS2
-- Class A affirmed at 'AAA';
-- Class M affirmed at 'AAA';
-- Class B1 affirmed at 'AAA';
-- Class B2 affirmed at 'AA';
-- Class B3 affirmed at 'A';
-- Class B4 affirmed at 'BB'.
Chase Mortgage Finance Trust, mortgage pass-through certificate,
series 1998-S2
-- Class A affirmed at 'AAA';
-- Class M upgraded to 'AAA' from 'AA';
-- Class B1 upgraded to 'AAA' from 'A';
-- Class B2 upgraded to 'AA' from 'BBB';
-- Class B3 upgraded to 'BBB+' from 'BB';
-- Class B4 affirmed at 'B'.
Chase Mortgage Finance Trust, mortgage pass-through certificate,
series 1998-S3
-- Class A affirmed at 'AAA';
-- Class M affirmed at 'AAA';
-- Class B1 affirmed at 'AAA';
-- Class B2 affirmed at 'AA';
-- Class B3 affirmed at 'BBB';
-- Class B4 affirmed at 'B'. Chase Mortgage Finance Trust,
mortgage pass-through certificate, series 1998-S4
-- Class A affirmed at 'AAA';
-- Class M affirmed at 'AAA';
-- Class B1 upgraded to 'AAA' from 'AA+';
-- Class B2 upgraded to 'AAA' from 'AA-';
-- Class B3 upgraded to 'A+' from 'A-';
-- Class B4 upgraded to 'BB+' from 'BB-'.
Chase Mortgage Finance Trust, mortgage pass-through certificate,
series 1998-S6
-- Class A affirmed at 'AAA';
-- Class M affirmed at 'AAA';
-- Class B1 upgraded to 'AAA' from 'AA';
-- Class B2 upgraded to 'AAA' from 'A+';
-- Class B3 upgraded to 'BBB' from 'BB+';
-- Class B4 upgraded to 'BB' from 'B'.
Chase Mortgage Finance Trust, mortgage pass-through certificate,
series 1998-S8
-- Class A affirmed at 'AAA';
-- Class M upgraded to 'AAA' from 'AA+';
-- Class B1 upgraded to 'AA+' from 'AA-';
-- Class B2 upgraded to 'A+' from 'A';
-- Class B3 affirmed at 'BBB-';
-- Class B4 affirmed at 'B'.
These upgrades are being taken as a result of low delinquencies
and losses, as well as increased credit support. The affirmations
indicate credit enhancement consistent with future loss
expectations.
CLYDESDALE CLO: S&P Assigns BB Rating to Class D F-R Notes
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its ratings to
Clydesdale CLO 2003 Ltd./Clydesdale CLO 2003 Inc.'s $276 million
floating-rate notes.
Clydesdale CLO 2003 Ltd. is a quarterly pay CLO primarily backed
by high-yield loans and structured as a cash flow transaction.
The transaction is a revolving pool purchased by Nomura Corporate
Research and Asset Management Inc. and has a three-month ramp-up
period and a five-year reinvestment period ending Sept. 12, 2008.
The ratings are based on the following:
-- Adequate credit support provided by subordination;
-- Characteristics of the underlying collateral pool, consisting
primarily of high-yield loans;
-- The experience of the collateral manager;
-- Additional structural enhancements to divert excess interest;
-- Scenario default rate of 38.40% for the class A notes, 30.60%
for the class B notes, 26.04% for the class C notes, and 20.25%
for the class D notes; and a break-even loss rate of 42.89% for
the class A notes, 32.36% for the class B notes, 27.84% for the
class C notes, and 21.34% for the class D notes;
-- Weighted average rating (WAR) of 'BB-';
-- Weighted average maturity (WAM) of 5.336 years for the
portfolio;
-- Default measure (DM) of 2.81% (annualized);
-- Variability measure (VM) of 2.00% (annualized); and
-- Correlation measure (CM) of 1.24 for the portfolio.
Interest on the class B, C, and D notes may be deferred up until
the legal final maturity of Sept. 12, 2015, without causing a
default under these obligations. The rating on the class B, C, and
D notes addresses the ultimate payment of interest and principal.
RATINGS ASSIGNED
Clydesdale CLO 2003 Ltd./Clydesdale CLO 2003 Inc.
Class Rating Amount (mil. $)
A AAA 234.0
B A 19.0
C BBB 13.0
D BB 10.0
COMMSCOPE INC: Names Alan Walp VP of Wireless Marketing & Sales
---------------------------------------------------------------
CommScope has named Mr. Alan Walp Vice President of Wireless
Marketing and Sales for Europe, Middle East and Africa.
In his new position, Mr. Walp will have sales and marketing
responsibilities for CommScope's wireless business in those
regions.
"Alan brings substantial international wireless sales experience
to CommScope," said Ted Hally, Executive Vice President and
General Manager of CommScope's Wireless Products Group. "His
business development and account management skills will be
extremely valuable to us as we continue the global expansion of
our wireless business."
Mr. Walp will be based in the United Kingdom where he currently
lives. Prior to joining CommScope, he was Director of Business
Development for Radio Frequency Systems, a division of Alcatel,
and served as the company's Global Key Account Manager for
Ericsson and Nokia as well as European Key Account Manager for
Hutchison. From 1991-2001, he held various sales and marketing
leadership positions for Cambridge Broadband, Comtech EF Data
Corporation and Andrew Corporation. Prior to that time, he was a
Director/Partner with the Crown Company, and he began his civilian
career as a radar systems engineer for the Hughes Aircraft
Company. A native of the United States, Mr. Walp served in the
U.S. Navy from 1975-81, where he received his initial training and
experience in radar systems operation.
CommScope, Inc. (NYSE: CTV) (S&P, BB Corporate Credit & B+
Subordinated Debt Ratings, Stable), is the world's largest
manufacturer of broadband coaxial cable for Hybrid Fiber Coaxial
applications and a leading supplier of fiber optic and twisted
pair cables for LAN, wireless and other communications
applications.
COMMUNICATION DYNAMICS: Gets Okay to Sell Assets to TVC Holding
---------------------------------------------------------------
Communication Dynamics, Inc., parent company of TVC
Communications, Inc., a leading distributor of products used to
build and maintain cable television systems, today announced it
has received approval from the United States Bankruptcy Court for
the District of Delaware to sell substantially all of its assets
to TVC Holding, Inc., a designee of Palisades Associates, Inc.
(Palisades).
The Court also approved the sale of CDI's remaining assets,
specifically, TVC's Clifford of Vermont division, to Power &
Telephone Supply Company.
Following two separate auctions held on September 4, 2003,
Palisades' designee and PTSC were determined to be the winning
bidders for the respective assets. Under the terms of the
respective sale agreements approved by the Court, Palisades'
designee, TVC Holding, Inc., will acquire substantially all of
CDI's assets while PTSC will acquire substantially all of the
assets of Clifford of Vermont. The respective sale transactions
are subject to certain closing conditions and are expected to be
completed by the end of the month.
"We are extremely pleased with the Court's prompt approval of the
sale of our assets," said CDI President and Chief Executive
Officer Robert W. Ackerman. "We believe that this is a very
positive outcome to our reorganization and is in the best
interests of our employees, customers and vendors. Upon
consummation of the sale of the Company, we will emerge from
Chapter 11 with a dramatically improved balance sheet and a solid
capital structure," he said.
"We expect the sale to be completed seamlessly and our customers
should continue to receive the outstanding service they have come
to expect from us without any interruption," Mr. Ackerman said.
"We will continue to purchase and distribute top quality cable
products from our suppliers as we have throughout the company's
history.
"Under new ownership and with an improved balance sheet, we expect
to build on the strength of our core business of cable-television-
parts distribution with the financial resources necessary to
prosper and grow," he said.
On September 23, 2002, CDI and its U.S. affiliates began the
process of restructuring their debt and operations by filing
petitions for relief under Chapter 11 of the U.S. Bankruptcy Code
in the U.S. Bankruptcy Court for the District of Delaware in
Wilmington. The Chapter 11 cases are being jointly administered
under case number 02-12753 (MFW) and the Cases have been assigned
to the Honorable Mary F. Walrath.
CDI is the parent company of TVC. TVC provides the products and
services that have helped build the communications infrastructure
in the United States, Canada, South America and Europe. Founded in
1952, TVC is backed by close working relationships with top
manufacturers and a deep understanding of the technology behind
the products it sells. TVC has proven itself to be a valued
partner to both the broadband cable and telecommunications
industries.
CONSECO FINANCE: Court Allows Sale of Credit Accounts to EMCC
-------------------------------------------------------------
The Conseco Finance Debtors obtained the Court's approval of its
Asset Sale Agreement with EMCC, Inc. The assets to be purchased
are:
-- manufactured home loan and credit accounts with unpaid
balances that have been charged off by the CFC Debtors as
uncollectible obligations; and
-- manufactured home loan and credit accounts with unpaid
deficiency balances remaining after repossession and sale
of the collateral securing the account with outstanding
balances that remain obligations of the defaulting
customers.
CFN Investment Holdings, proposed purchaser of the CFC Debtors'
assets, has given its required consent to this Transaction. EMCC
will pay the sum of:
(i) 0.0489125% of the aggregate of the unpaid balances for the
Accounts as of May, 20, 2003; minus
(ii) 100% of the collections net of third party collection costs
and expenses; and minus
(iii) any adjustments.
The CFC Debtors preliminarily estimate that the price for these
assets will be $3,354,000. (Conseco Bankruptcy News, Issue No. 31;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
CONSECO INC: Gets Go-Signal to Sell SPI & Ardiel Stocks for $27M
----------------------------------------------------------------
In light of the Reorganizing Conseco Inc. Debtors' recent
financial difficulties and based on the results of their
exhaustive analysis of their ongoing and future business
prospects, the Debtors' management and financial advisors
concluded that the best opportunity to maximize the value of CIHC,
Inc.'s owned capital shares in Specialty Planners, Inc., and
Ardiel Insurance Services, Inc. is to commence an expeditious sale
for them.
In March 2003, the Debtors asked Lazard Freres & Co. to assist
them in exploring strategic alternatives for SPI, including its
potential sale. The Debtors asked Lazard to contact various
potential buyers. Of the parties contacted, seven signed
confidential agreements -- the Potential Buyers -- and each was
provided with additional due diligence and an information
memorandum. During this initial due diligence period, Lazard
communicated the bidding guidelines to the Potential Buyers and
invited them to submit written proposals.
Five non-binding bids were received by the end of May 2003. The
Debtors, in their business judgment, concluded that the proposal
from Long Term Care Global Solutions, Inc., an affiliate of LTC
Capital, Inc., offered the most advantageous terms and greatest
economic benefit to the Debtors.
Consequently, the parties began negotiating the terms of the
Stock Purchase Agreement. Subsequently, LTC offered to increase
the purchase price to also buy the outstanding capital stock of
Ardiel.
Roger J. Higgins, Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, informs Judge Doyle after extensive arm's-length
negotiation, the parties agreed to CIHC's sale of its outstanding
capital stock in SPI and Ardiel to LTC Capital, Inc. under the
terms and conditions set forth in the Stock Purchase Agreement.
Mr. Higgins reports that the Stock Purchase Agreement contains
these terms:
A. Shares
The Shares consists of all of the issued and outstanding
shares of capital stock of SPI and Ardiel.
B. Purchase Price
The Purchase Price for the Shares will be $27,500,000, to be
paid at Closing in cash, the proceeds of which are to be
distributed to the assets of an insurance company subsidiary
of the Reorganizing Debtors.
C. Bankruptcy Court Order
The Court will have issued an order approving the sale of the
Shares to LTC free and clear of any encumbrances approving
the terms and conditions of the Stock Purchase Agreement and
all transactions contemplated prior to September 15, 2003 and
will remain in full force and effect.
D. Closing Conditions
LTC's consummation of the Stock Purchase Agreement is subject
to, inter alia, these conditions:
(a) CIHC's representations and warranties must be true and
correct, except those changes that do not have a Material
Adverse Effect;
(b) All consents, approval and actions of, filings with and
notices to any third party or Governmental Body necessary
to permit the parties to perform their obligations under
the Agreement and to consummate the transactions are
obtained and in full force and effect;
(c) All of CIHC's obligations are delivered to LTC;
(d) LTC has obtained the financing provided for in the
Commitment Letter; and
(e) If the sale is awarded to a higher bidder or CIHC
terminates the Stock Purchase Agreement, LTC will be
entitled to a fee not to exceed $825,000 on account of
its out-of-pocket costs, fees and expenses, which will
constitute an administrative expense under Sections
503(b) and 507(a)(1) of the Bankruptcy Code without
further Court order.
Accordingly, the Reorganizing Debtors sought and obtained the
Court's authority to sell the SPI and Ardiel capital stocks to
LTC under the terms of the Stock Purchase Agreement, free and
clear of any liens, encumbrances and liabilities.
Mr. Higgins contends that the sale is warranted because:
(a) the sale of the Shares were subjected to competing bids
through auction to get the highest value of the Shares
possible;
(b) LTC is a good faith purchaser and is entitled to the
protection of Section 363(m) of the Bankruptcy Code; and
(c) the Shares are not subject to any encumbrances and could,
therefore, be sold free and clear of any interest under
applicable non-bankruptcy law. (Conseco Bankruptcy News,
Issue No. 31; Bankruptcy Creditors' Service, Inc., 609/392-
0900)
CONTIMORTGAGE: Fitch Hatchets Ser. 1997-5 Class B Rating to CCC
---------------------------------------------------------------
Fitch Ratings has performed a review of ContiMortgage
Corporation's Home Equity Loan Trust, series 1997-5. Based on the
review, the following rating actions have been taken:
ContiMortgage Home Equity Loan Trust, series 1997-5:
-- Class A-6 affirmed at 'AAA'.
-- Class A-8 affirmed at 'AAA'.
-- Class A-10 affirmed at 'AAA'.
-- Class B, rated 'BBB-' Rating Watch Negative, is
downgraded to 'CCC'.
The negative rating action is a result of high delinquencies and
the deterioration of the overcollateralization in relation to the
applicable credit support levels.
The affirmations of the ratings of the class A certificates are
due to the amount of credit enhancement available, relative to
future loss expectations and the MBIA financial guaranty insurance
policies available to cover losses for these classes.
CONTINENTAL: Doles-Out $100M of ExpressJet Stake to Pension Plan
----------------------------------------------------------------
Continental Airlines, Inc. (NYSE: CAL) has contributed $100
million in shares of common stock of ExpressJet Holdings, Inc.,
(NYSE: XJT) to Continental's defined benefit pension plan. The
contribution is in addition to Continental's pension plan
contributions earlier this year, bringing its year-to-date
pension contribution to $269 million, and significantly exceeding
the company's minimum contribution requirements for 2003. The
contribution boosts plan assets to over $1.1 billion.
"Unlike our competitors, we are not asking the government to solve
our pension issues, we are handling it ourselves," said
Continental Chairman and CEO Gordon Bethune. "By working hard to
fulfill our pension obligations, we are doing the right thing for
our employees."
The shares of ExpressJet Holdings, Inc. common stock contributed
to the plan are freely tradable by the plan and were valued by a
nationally prominent independent valuation expert hired by the
plan's independent fiduciary. That independent fiduciary will be
responsible for future decisions regarding any disposition of the
XJT shares held by the plan.
Continental's contribution of XJT shares reduces Continental's
percentage ownership of XJT from approximately 44 to approximately
31 percent. Due to new accounting rules (Interpretation 46,
"Consolidation of Variable Interest Entities"), the company will
continue to consolidate the financial results of ExpressJet until
the combined interest held by the pension plan and Continental in
XJT falls below 41 percent.
Continental Airlines is the world's seventh-largest airline with
2,300 daily departures to 134 domestic and 92 international
destinations. Continental has the broadest global route network of
any U.S. airline, including extensive service throughout the
Americas, Europe and Asia. Continental has hubs serving New York,
Houston, Cleveland and Guam, and carries approximately 41 million
passengers per year on the newest jet fleet among major U.S.
airlines.
As recently reported, Standard & Poor's Ratings Services assigned
its 'CCC+' rating to Continental Airlines Inc.'s (B/Negative/--)
$150 million 5.0% senior unsecured convertible debt due 2023.
Ratings on Continental were affirmed on June 2, 2003, and removed
from CreditWatch, where they were placed on March 18, 2003.
"Ratings on Continental are based on its heavy debt and lease
burden and relatively limited financial flexibility, which
outweigh better-than-average operating performance and a modern
aircraft fleet," said Standard & Poor's credit analyst Philip
Baggaley.
The outlook on Continental's long-term corporate credit rating
is negative. Losses are expected to narrow and operating cash
flow should turn modestly positive in the second and third
quarters of 2003, but Continental remains vulnerable to any
renewed deterioration in the airline industry revenue
environment.
DANA: Initiates $6MM Expansion Plan for Kalamazoo, Mich. Center
---------------------------------------------------------------
Dana Corporation (NYSE: DCN) today announced plans for a $6
million expansion of its state-of-the-art heavy vehicle research
and development center in Kalamazoo, Mich. The expansion is
slated to begin this month, with completion scheduled for early
2004.
Dana's Heavy Vehicle Technology Center houses the headquarters and
R&D center for Dana's Commercial Vehicle Systems Group - North
America.
"This investment will enhance our leadership position in the
commercial vehicle industry and demonstrates our ongoing
commitment to the medium-and heavy-truck business," said Nick
Cole, president of the Heavy Vehicle Technologies and Systems
Group.
"This will enable us to collaborate more effectively with our
customers, and leverage the knowledge, skills, and abilities of
our people to develop innovative products," he added. The
expansion of the center will afford Dana additional research and
development capabilities for its heavy-vehicle products. The
expansion will add 15,000 square feet to the current 155,000-
square-foot facility and includes a significant investment in
technologically advanced test equipment.
"Dana is committed to the development of new technologies and
products that go beyond today's demands and create future value
for our customers and our shareholders," said Frank Sheehan, vice
president, sales, marketing, and product planning for Dana
Commercial Vehicle Systems. "In expanding our research and
development facility, we will further reduce time-to-market for
the many new and innovative product launches we have planned."
Commercial Vehicle Systems has demonstrated its commitment to the
heavy-truck industry through a myriad of new product introductions
over the last 18 months. Approximately 75% of the CVS steer- and
drive-axle lineup has been replaced with advanced models featuring
patented, customer-driven enhancements. Significant improvements
in performance and durability relating to brake and tire systems
are also being validated.
"Recent product innovations delivered to the marketplace include a
fixed suspension for flatbed trailer applications, the
AdVantage(TM) slider air suspension, the S130 drive axle for
medium-duty trucks, and unitized wheel-end systems for all wheel-
ends," Mr. Sheehan added.
David Renz, vice president, sales and marketing, Eaton Truck
Components, said, "We are proud of our partnership with Dana in
the Roadranger(R) System of drivetrain products and solutions.
The expansion of Dana's technology center is further evidence of
its commitment to lead the marketplace with technologically
advanced, high-quality axle, brake, and suspension products, that
exceed customer and market expectations."
Dana's Commercial Vehicle Systems Group designs, manufactures, and
markets front-steer, rear-drive, trailer, and auxiliary axles;
driveshafts; steering shafts; brakes; suspensions; and related
systems, modules, and services for the commercial vehicle market.
Major components and modules are marketed under the Spicer(R)
brand name. Dana's strategic marketing alliance with Eaton
Corporation's Truck Components group provides innovative
drivetrain systems under the Roadranger(R) brand name.
Dana -- whose $250 million debt issue is rated by Standard &
Poor's at 'BB' -- is a global leader in the design, engineering,
and manufacture of value-added products and systems for
automotive, commercial, and off-highway vehicle manufacturers and
their related aftermarkets. The company employs more than 60,000
people worldwide. Founded in 1904 and based in Toledo, Ohio, Dana
operates hundreds of technology, manufacturing, and customer
service facilities in 30 countries. The company reported 2002
sales of $9.5 billion.
DAVEL COMMS: Appoints Dave Askeland VP Sales and Marketing
----------------------------------------------------------
Davel Communications, Inc. (OTCBB:DAVL) announced that, effective
September 01, 2003, Mr. Dave Askeland has been named Vice
President of Sales and Marketing of the Company.
Mr. Askeland formerly served Davel in the capacity of regional
sales manager. Prior to joining Davel Mr. Askeland held senior
level positions of vice president at American Telemanagement
Solutions and president of Toll Call Inc.
Mr. McGee, CEO of Davel stated, "We are pleased to have Dave lead
our sales and marketing effort. He brings a wealth of knowledge
not only of the payphone industry but also in emerging
technologies that will enhance Davel's position utilizing the
significant assets and market position the Company is fortunate
enough to hold."
Founded in 1979, the Company -- whose June 30, 2003 balance sheet
shows a total shareholders' equity deficit of about $95 million --
is the largest independent provider of pay telephones and related
services in the United States, with operations in 48 states and
the District of Columbia. The Company serves a wide array of
customers operating principally in the shopping center,
hospitality, health care, convenience store, university, service
station, retail and restaurant markets.
DIAL CORP: CEO and CFO to Present at Banc of America Conference
---------------------------------------------------------------
The Dial Corporation's (NYSE: DL) Chairman, President and CEO,
Herbert M. Baum, and Executive Vice President and CFO, Conrad A.
Conrad, will present to investors at the Banc of America
Securities 33rd Annual Investment Conference in San Francisco on
September 16, 2003. Mr. Baum and Mr. Conrad are scheduled to speak
at 2:00 p.m. PT.
A live audio web cast of the presentation is open to the general
public and is available by accessing
http://investor.info.dialcorp.com/webcasts.cfm A replay of the
web cast will be available through the same link through
September 23, 2003.
Dial management stated it remained confident with the guidance
previously provided of earnings per share from continuing
operations of $0.34 per share for the third quarter and
approximately $1.33 for the full year 2003.
The Dial Corporation, headquartered in Scottsdale, Ariz., is one
of America's leading manufacturers of consumer products, including
Dial(R) soaps, Purex(R) laundry detergents, Renuzit(R) air
fresheners and Armour(R) Star canned meats. Dial products have
been in the marketplace for more than 100 years. For more
information about The Dial Corporation, visit the Company's Web
site at http://www.dialcorp.com
* * *
As reported in Troubled Company Reporter's March 25, 2003 edition,
Standard & Poor's Ratings Services revised its rating outlook for
household products manufacturer Dial Corp., to positive from
stable. At the same time, Standard & Poor's affirmed its ratings
on Dial.
Total debt at Dec. 31, 2002, was about $458 million.
As previously reported, Standard & Poor's rates the Company's
$250,000,000 of 7% Notes due August 15, 2006, and $250,000,000
of 6-1/2% Notes sue September 15, 2008, in low-B territory.
DOW CORNING: Forms Compound Semiconductor Solutions Business
------------------------------------------------------------
Dow Corning Corp., announced the formation of a new business
serving the wide band gap semiconductor industry. The business is
founded on an expertise developed from years of in-house and
academic research investments, plus the recent acquisitions of
business and technology assets in bulk Silicon Carbide (SiC),
SiC thin film technology, and Gallium Nitride (GaN) thin film
technology. Dow Corning Compound Semiconductor Solutions is
establishing this business to take full advantage of the synergies
with our electronics, microelectronics and polycrystalline silicon
materials businesses, and our state-of-the-art research photonics
and electronics materials programs.
"We are very excited about the market potentials, and Dow
Corning's future in this business," said Robert Johns, Global
Director of Compound Semiconductor Solutions. "We will be
locating our business in Midland, Michigan, close to Dow Corning's
critical mass of technical capabilities, research and development
assets, and strong manufacturing disciplines. Consolidating our
operations will give us synergies to accelerate our
implementation, and achieve world-class quality material
specifications and economies of scale," he said.
"Dow Corning will optimize its strong technical and market
leadership positions in semiconductor grade polycrystalline
silicon, integrated circuit fabrication materials technology, and
packaging materials and services to meet the needs of customers.
We exist to help ensure SiC and GaN device manufacturers achieve
success by partnering with them to provide capabilities and
resources that no other supplier can offer," said Johns.
Dow Corning -- http://www.dowcorning.com-- provides performance-
enhancing solutions to serve the diverse needs of more than 25,000
customers worldwide. A global leader in silicon-based technology
and innovation, offering more than 7,000 products and services,
Dow Corning is equally owned by The Dow Chemical Company and
Corning, Incorporated. More than half of Dow Corning's annual
sales are outside the United States.
DVI INC: Seeks OK to Hire Latham & Watkins as Bankruptcy Counsel
----------------------------------------------------------------
DVI, Inc., and its debtor-affiliates ask for permission from the
U.S. Bankruptcy Court for the District of Delaware to employ
Latham & Watkins LLP as their attorneys to lead their chapter 11
restructuring.
The Debtors report that the Board of Directors met and voted to
employ the law firm of Latham & Watkins as the Company's counsel
for insolvency and certain matters, including those related to any
potential sale activity
In assisting the Debtors with the preparation for filing these
bankruptcy cases, Latham & Watkins' attorneys have become
increasingly familiar with the very complex factual and legal
issues that will have to be addressed in these cases.
Latham & Watkins will:
a. advise the Debtors of their powers and duties as
debtors-in-possession in the continued management of
their affairs;
b. provide assistance, advice and representation concerning
the confirmation of any proposed plan of reorganization
and solicitation of any acceptances or responding to
rejections of such plan;
c. provide counseling and representation with respect to
the negotiations, documentation and court approval or
cash management, cash collateral and debtor-in-
possession financing arrangements with various lenders
and other entities;
d. represent the Debtors at hearings or matters pertaining
to their affairs as debtors-in-possession;
e. prosecute and defend pending litigation matters and such
other matters that might arise during the chapter 11
cases;
f. provide counseling and representation with respect to
assumption or rejection of executory contracts and
leases, sale of assets and other bankruptcy-related
matters arising from these cases;
g. in conjunction with other counsel, and as determined as
these matters proceed, render advice with respect to
general corporate and litigation issues relating to
these cases, including, but not limited to, securities,
corporate finance, tax, and commercial matters; and
h. perform such other legal services as may be necessary
and appropriate for the efficient and economical
administration of these chapter 11 cases.
Latham & Watkins's current hourly rates range from:
Partners $415 - $775 per hour
Of Counsel $345 - $625 per hour
Associates $195 - $485 per hour
Paralegals $110 - $270 per hour
Paralegal Assistants $ 60 - $140 per hour
The professionals expected to be most active in these cases and
their current hourly rates are:
Partners
--------
David S. Heller $615 per hour
Richard S. Meller $495 per hour
Josef S. Athanas $475 per hour
Philip J. Perzek $450 per hour
Associates
----------
Peter E. Pinnow $305 per hour
Travis L. Nelson $305 per hour
Danielle S. Kemp $285 per hour
Caroline A. Reckler $260 per hour
Paralegals
----------
Brigitte F. Windley $170 per hour
Daphne M. Bruere $105 per hour
Headquartered in Jamison, Pennsylvania, DVI, Inc. is the parent
company of DVI Financial Services, Inc. and DVI Business Credit
Corp. DVI Financial Services, Inc. provides lease or loan
financing to healthcare providers for the acquisition or lease of
sophisticated medical equipment. DVI Business Credit Corp. extends
revolving lines of credit to healthcare providers. The Debtors
filed for chapter 11 protection on August 25, 2003 (Bankr. Del.
Case No. 03-12656). Bradford J. Sandler, Esq., at Adelman Lavine
Gold and Levin, PC represents the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed $1,866,116,300 in total assets and
$1,618,751,400 in total debts.
ENRON CORP: Secures Court Approval of Shell Settlement Agreement
----------------------------------------------------------------
Pursuant to Sections 363 and 365 of the Bankruptcy Code and Rule
9019 of the Federal Rules of Bankruptcy Procedure, the Enron
Corporation Debtors sought and obtained Court approval of their
Compromise and Settlement Agreement with Shell Gas B.V., Shell
Overseas Trading Limited, Shell Cuiaba Holdings Limited and Shell
Gas (Latin America) B.V.
Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York,
recalls that prior to the Petition Date, the Debtors and some of
Shell Gas B.V.'s affiliates became involved in the construction
of a power plant in Cuiaba, Brazil and related natural gas
pipeline spurs in Brazil and Bolivia -- the Cuiaba Project. The
Cuiaba Project is now completely built and operational.
Ms. Gray explains that the Cuiaba Project consists of four
companies -- the JV Companies -- that on an integrated basis
operate a 480-megawatt gas-fired, combined-cycle power plant in
Cuiaba, Mato Grosso, Brazil, purchase natural gas in Bolivia or
Argentina and transport it to Brazil for use as fuel in the
generation of electrical energy at the power plant.
Empresa Produtora de Energia Ltda., a power generation company,
operates the Power Plant. Gasoriente Boliviano Ltda., on the
other hand, is a gas transportation company that operates a 226-
mile 18-inch gas pipeline in Bolivia to transport natural gas to
the Bolivia-Brazil border. Gasocidente do Mato Grosso Ltda., a
gas transportation company that operates a 175-mile 18-inch gas
pipeline in Brazil, connects to the GasBol pipeline at the
Bolivia-Brazil border and transports natural gas from the border
to the Power Plant. Transborder Gas Services Ltd. purchases
natural gas from Bolivia or Argentinean sources, arranges for
transportation of the gas, including through GasBol and GasMat,
and sells the gas to EPE.
The Cuiaba Project sells the capacity of and energy EPE produced
to Furnas Centrais Electricas S.A. The Shell Parties currently
own a minority interest in EPE, GasMat and TBS and a 50% interest
in GasBol. The Enron Parties own a majority interest in EPE,
GasMat and TBS and the other 50% interest in GasBol.
According to Ms. Gray, the present dispute between the Enron
Parties and the Shell Parties is the result of a disagreement
over the obligation to fund proposed budget increases that the
Enron Parties contend were necessitated by certain events,
including principally governmental acts in both Bolivia and
Brazil, during the development of the Cuiaba Project. The cost
to complete the Cuiaba Project increased from an initial
projection of $505,000,000 in July 1998 to an aggregate capital
cost of $740,000,000.
The Shell Parties' position is that SCC, the engineering,
procurement and construction contractor and a wholly owned
subsidiary of Enron, bore the risk of the events underlying
certain categories of costs rather than the JV Companies
themselves. The Shell Parties claim that Enron mismanaged the
project and that certain change orders were neither properly
documented nor chargeable to the JV Companies, but rather should
have been borne by SCC alone. The Shell Parties also claim
entitlement to substantial reimbursements associated with the
Cuiaba Project.
Enron believes that the cost the JV Companies incurred were the
result of unforeseen, and thus unbudgeted, problems associated
with a project of this magnitude and complexity, that the cost
overruns were properly chargeable to the JV Companies. Hence,
the Shell Parties should fund their proportionate share of the
increased costs or suffer dilution of their interest in the JV
Companies.
Ms. Gray informs Judge Gonzalez that the Parties' disputes led to
the initiation of a mediation procedure in October 2001, which
was suspended by the Debtors' Chapter 11 cases. Consequently,
the parties negotiated to settle the disputes since February
2002.
In light of the uncertainties of the arbitration to resolve their
disputes and the related civil litigation to enforce any award,
the Enron Parties and the Shell Parties agreed to compromise and
settle their outstanding issues in accordance with the terms and
conditions set forth in the Definitive Agreement, dated as of
June 3, 2003, among Enron, Enron South America, Enron do Brazil
Holdings Ltd., Enron Brazil Power Holdings I Ltd., Enron
Transportadora Holdings Ltd., a wholly owned subsidiary of ESA
organized under the laws of the Cayman Islands, and the Shell
Parties.
The salient terms of the Settlement are:
A. Each of EDBH, EBPH and ESA will transfer equity interests in
EPE, GasMat and TBS, to SCHL. After these transfers, the
Enron Parties and the Shell Parties will hold an equal direct
or indirect equity interest in each of EPE, GasMat and TBS, in
addition to their current equal ownership in GasBol;
B. SCHL will transfer $15,500,000 to EDBH, EBPH and ESA, on these
allocations under the Agreement:
-- $1,000,000 to EDBH,
-- $4,500,000 to EBPH, and
-- $10,000,000 to ESA.
Of the aggregate amount, $8,000,000 will be contributed to
ETHL as a capital contribution and used by ETHL to purchase
from SGLA and Transredes-Transporte de Hidrocarburos, S.A.,
certain notes aggregating $8,000,000, bearing a 15% interest
rate and maturing on March 15, 2011;
C. SGLA will transfer to ETHL notes aggregating $2,000,000 issued
under a loan agreement dated as of July 26, 2002 between SGLA
and Gas Transboliviano S.A. In addition, each of ETHL and
SGLA will vote its equity interests in Transredes in favor of
the transfer by Transredes to ETHL of notes aggregating
$6,000,000 issued under a loan agreement dated as of July 26,
2002 between Transredes and GTB;
D. Each of (i) Enron, ESA, EDBH, EBPH, SCC, ETHL and certain
other Enron affiliates, (ii) SG, SOTL, SGLA, SCHL and
certain other SG affiliates, and (iii) the JV Companies and
certain other Cuiaba Project Companies, will release and
discharge each other from all claims with respect to (1) the
development, construction and subsequent operation of the
Power Plant and related pipelines and (2) the governance and
operation of the Cuiaba Project Companies, arising out of or
relating in any way to any commitment or undertaking, existing
or made or alleged to have existed or been made, or to any
action or omission or alleged action or omission occurring, on
or prior to the closing date of the Agreement, including
unasserted claims, but excluding certain surviving claims, all
in accordance with the terms and conditions set forth in the
form of Mutual Release and Waiver attached to the Agreement --
the Release. Among other things, SCC will release EPE, GasMat
and GasBol of their obligations under the construction
contract for the Cuiaba Project. In turn, under the EPC
Termination Agreement among SCC, EPE, GasBol and GasMat, SCC
will receive a completion certificate for the Cuiaba Project,
and the construction contract will be terminated in accordance
with its terms. Certain liabilities of SCC, including the
environmental indemnities, will, however, survive;
E. Enron Netherlands Holding B.V., a wholly owned subsidiary
of Enron organized under the laws of the Netherlands; Enron
International Bolivia Holdings Ltd., a wholly owned
subsidiary of Enron organized under the laws of the Cayman
Islands; SGLA and an affiliate of SGLA will restructure
certain loans they made to EPE, GasMat and GasBol. ENH,
EIBH, SGLA and SGLA's affiliate will enter into Credit
Restructuring Agreements with EPE, GasMat and GasBol, as the
case may be. Pursuant to the Credit Restructuring Agreements
with EPE and GasMat, ENH, EIBH, SGLA and SGLA's affiliate will
agree, in certain circumstances, to modify the payment
schedule and interest rate of these loans and to grant a
limited forbearance on presentment of the notes related to
these loans. In addition, the parties to the Credit
Restructuring Agreements and their agents and affiliates will
release and discharge each other from all claims with respect
to these loans that arise out of acts or omissions occurring
on or prior to the closing date of the Agreement, including
unasserted claims;
F. The Shell Parties and the Enron Parties that hold an equity
interest in one of the Cuiaba Project Companies will enter
into a Master Voting Agreement to address the management and
governance of the Cuiaba Project as well as their ownership
interests in the JV Companies. The parties will agree to vote
their equity interests together through the implementation of
a supervisory board whose affirmative vote is necessary to
approve certain substantial transactions of any Cuiaba Project
Company. In addition, the Master Voting Agreement will
contain provisions governing the exercise of preferential
purchase rights with respect to the equity interests of the
parties thereto in any Cuiaba Project Company and certain
other companies;
G. The revised organizational documents of the Cuiaba Project
Companies will contain standard provisions relating to
purchase rights triggered by a change of control, and certain
rights of first refusal and drag along rights; and
H. The Agreement will be binding on and will inure to the
benefit of the parties thereto and their successors.
Ms. Gray asserts that the Settlement is warranted because:
(a) it eliminates the expense and risk of litigation to Enron;
(b) it is a product of extensive, good faith and arm's-length
negotiations between the Parties;
(c) the likelihood of a successful outcome for the Enron
Parties is far from certain;
(d) it represents the exchange of reasonable equivalent value
between the Parties, in no way unjustly enriches any of
them and constitute the contemporaneous exchange of new
value and legal, valid and effective transfers between
them; and
(e) the Creditors' Committee supports the settlement. (Enron
Bankruptcy News, Issue No. 78; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
FEDERAL-MOGUL: Bar Date for EPA Claims Extended Until Sept. 30
--------------------------------------------------------------
U.S. Bankruptcy Court Judge Newsome approves a stipulation between
the Federal-Mogul Debtors and United States Environmental
Protection Agency and the Federal Natural Resource Trustee to
extend the deadline for filing of claims to September 30, 2003.
The Debtors and the EPA and the Natural Resource Trustee have
entered into previous agreements to extend the Claims Bar Date.
The Debtors initiated extensive settlement negotiations with the
EPA and the Natural Resource Trustee and made substantial
progress towards a global settlement.
Notably, the parties resolved a variety of issues arising out of
the environmental claims and are now able to address the issues.
But the parties agree that more time is needed to facilitate the
negotiation process to achieve significant cost savings if the
claims are consensually resolved. (Federal-Mogul Bankruptcy News,
Issue No. 42; Bankruptcy Creditors' Service, Inc., 609/392-0900)
FOCAL COMMS: Inks Strategic Alliance Pact with Matrix Telecom
-------------------------------------------------------------
Focal Communications Corporation and Matrix Telecom announced that
Focal will provide its integrated voice and data services to
Matrix Telecom's nationwide customer base.
The agreement allows Matrix to offer its customers an alternative
to their current local communication provider for both voice and
Internet access. Matrix provides its customers with customized
communication solutions that ensure cost efficiencies and optimal
network performance without compromising quality of service.
Terms of the two-year agreement were not disclosed.
"Matrix is pleased to expand its premium quality
telecommunications services by adding Focal to its product
portfolio," said Dennis Smith, President, of Matrix Telecom.
"Focal was chosen as a vendor because we were impressed by the
strength of their state-of-the-art network, the range of quality
services and their ability to remain nimble and responsive."
"We are proud to partner with Matrix and for the opportunity to
serve their customers," commented Patrick Purcell, Focal's Vice
President of Wholesale Services. "Focal's IVAD product suite,
supported by our award-winning customer service, is the industry
leader in integrated voice and data services. Our agreement with
Matrix demonstrates our commitment to serving the wholesale and
resale marketplace."
Focal Communications Corporation -- http://www.focal.com-- is a
national telecommunications provider serving enterprises, carriers
and resellers with dedicated local sales and support, a robust
national network, and innovative voice and data solutions in 23
top U.S. markets.
Matrix Telecom, an Integrated Communication Provider, provides
premium quality voice and data services to its nationwide customer
base. Matrix is committed to providing customized communication
services that exceed customers' expectations for quality, value
and reliability. Matrix is owned by Platinum Equity. For more
information, please visit the Matrix Web site
http://www.matrixvalue.com
Platinum Equity -- http://www.platinumequity.com-- is a global
acquisition firm specializing in the strategic operation of
mission-critical services and solutions businesses according to a
unique M&A&OSM model of value creation. Since its founding in
1995, Platinum has completed over 40 privately funded
transactions, leveraging a multi-billion dollar revenue base
derived from the continued growth of its portfolio. With an
established infrastructure in North and South America and Europe,
Platinum employs a workforce of more than 15,000 serving over
600,000 customer sites worldwide.
As reported in Troubled Company Reporter's July 11, 2003 edition,
Fitch Ratings upgraded the senior secured credit facility of
Focal Communications to 'CCC-' from 'D' and withdrew the rating.
The senior unsecured noteholders have received preferred stock and
warrants in the reorganization, therefore Fitch is withdrawing the
'D' rating on these securities.
GENTEK INC: Plan Solicitation Period Extended to October 8
----------------------------------------------------------
GenTek Inc., and its debtor-affiliates sought and obtained an
extension of the period within which they have the exclusive right
to propose and solicit acceptances of a plan of reorganization
through October 8, 2003.
According to Mark S. Chehi, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, in Wilmington, Delaware, although the Debtors
have filed their Plan before the expiration of the Exclusive Plan
Proposal Period, the solicitation and confirmation process will
extend past the August 29, 2003 expiration of the Exclusive
Solicitation Period. The Debtors maintain that it is in the best
interests of their estates that they be permitted to pursue
confirmation of the Plan, including the negotiation of any
necessary amendments or modifications, without the distractions
that would be caused by the filing of competing plans by other
parties-in-interest after August 29, 2003.
Mr. Chehi explains that an extension of the Exclusive Periods is
fully justified given that:
(a) the Debtors' cases are large and complex;
(b) the Debtors have made significant progress toward a
successful reorganization, as evidenced by the formulation
and filing of the Plan; and
(c) further extensions of the Exclusive Periods are only for
the purpose of ensuring an orderly solicitation and
confirmation process for the Plan. (GenTek Bankruptcy News,
Issue No. 19; Bankruptcy Creditors' Service, Inc., 609/392-
0900)
GEORGIA-PACIFIC: Completes Exchange Offer for Senior Notes
----------------------------------------------------------
Georgia-Pacific Corp. (NYSE: GP) announced the successful
completion of its offer to exchange new 8.875 percent senior notes
due 2010 and 9.375 percent senior notes due 2013 that have been
registered under the Securities Act of 1933 for all of its
outstanding 8.875 percent senior notes due 2010 and 9.375 percent
senior notes due 2013, that originally were issued by the company
in January under Rule 144A and Regulation S of the Securities Act.
The exchange offer expired Sept. 3.
At that time, 100 percent of the aggregate principal amount of
each series of senior notes, or $700 million of the 8.875 percent
notes and $800 million of the 9.375 percent notes, had been
deposited with the company's exchange agent.
Headquartered at Atlanta, Georgia-Pacific (S&P, BB+ Corporate
Credit Rating, Negative) is one of the world's leading
manufacturers of tissue, packaging, paper, building products, pulp
and related chemicals. With 2002 annual sales of more than $23
billion, the company employs approximately 61,000 people at 400
locations in North America and Europe. Its familiar consumer
tissue brands include Quilted Northern(R), Angel Soft(R),
Brawny(R), Sparkle(R), Soft 'n Gentle(R), Mardi Gras(R), So-
Dri(R), Green Forest(R) and Vanity Fair(R), as well as the
Dixie(R) brand of disposable cups, plates and cutlery. Georgia-
Pacific's building products distribution segment has long been
among the nation's leading wholesale suppliers of building
products to lumber and building materials dealers and large do-it-
yourself warehouse retailers. For more information, visit
http://www.gp.com
IMPERIAL PLASTECH: CCAA Claims Bar Date is Tomorrow
---------------------------------------------------
On August 22, 2003, the Ontario Superior Court of Justice approved
the Claims Procedure for the determination of all claims against
Imperial PlasTech Inc., and its debtor-affiliates. The Court
directs all creditors to file their proofs of claim against the
Debtors by tomorrow or be forever barred from asserting their
claims.
Proof of Claim forms must be submitted to the Court-appointed
Chief Restructuring Officer the Debtors, Peter J. Perley of CTM
Inc., on or before 5:00 p.m. tomorrow.
The PlasTech Group is a diversified plastics manufacturer
supplying a number of markets and customers in the residential,
construction, industrial, oil and gas and telecommunications and
cable TV markets. Currently operating out of facilities in
Peterborough Ontario, Edmonton Alberta and Atlanta Georgia, the
PlasTech Group intends to focus on the growth of its core
businesses while assessing any non-core businesses. For more
information, access the group's Web site at http://www.implas.com
Richter & Partners Inc., the Debtors' Interim Receiver obtained an
order from the Ontario Superior Court of Justice on July 3, 2003,
providing protection from creditors under the CCAA. The CCAA
filing was made with respect to Imperial PlasTech, Imperial Pipe
Corporation, Imperial Building Products Corporation, Ameriplast
Inc. and Imperial Building Products (U.S.) Inc.
The CCAA filing was supported by the Laurentian Bank of Canada,
the creditor that moved to commence the Interim Receivership
proceedings. The other senior ranking secured creditor did not
oppose the CCAA filing.
INFOCORP COMPUTER: June Half-Year Results Enter Positive Zone
-------------------------------------------------------------
Infocorp Computer Solutions Ltd. (TSX: INP), a leader in the
design and delivery of point-of-service cashiering and multi-
channel revenue management solutions for e-Government and
integrated retail management solutions for retailers, announced
financial results for the six-month period ended June 30, 2003.
During the quarter, Infocorp maintained its profitability and
generated positive net income. Infocorp also closed a contract in
the State of Kansas to update an existing installation of our
revenue management and cashiering system within their Vital
Statistics Agency. Revenue during the quarter was $603,025, a
decrease of 51% over the corresponding period in 2002. As a result
of ongoing efforts to improve efficiencies, the company reduced
expenses by 41% to $544,624, as compared to $916,107 in the second
quarter of 2002. Earnings before interest, taxes, depreciation,
and amortization was $58,401, compared to $308,900 over the same
quarter last year. Net income for the second quarter of 2003 was
$11,420, compared to $209,227 for the comparable period in 2002.
In the second quarter, we successfully concluded negotiations with
Western Economic Diversification Canada to reach a settlement on
long-term debt being carried on the Company's balance sheet. We
signed a Compromise Settlement Agreement to reduce the outstanding
debt from approximately $2.3 million to $300,000 payable in equal
monthly installments of $12,500 over a 24 month period. As a
result of this initiative, Infocorp improved its balance sheet
ratios, and the for the six months ending June 30, 2003, has
generate positive net income, and earnings per share of $0.10.
"During the quarter, we made significant headway towards bringing
a windows-based cashiering system to market", said Infocorp CEO
Dwayne Mathers. "Subsequent to the end of the quarter, we signed
an OEM partnership agreement for a Softwear/POS compatible
windows-based POS package. The development team included the
original architect of Softwear/POS. This product has been
extensively field tested in over 170 lanes in 60 client sites over
the last several months, and is now ready for launch in September
2003 as Infocorp's Access2Retail product."
Subsequent to the quarter end, Infocorp closed a contract with New
Zealand's Department of Internal Affairs to install the Access2Gov
solution within their Identity Services Department. This
department issues passports, birth certificates, death
certificates, marriage licenses, and related certificates across
the country of New Zealand. The Department also has offices in
Sydney, Australia and London, United Kingdom, that will install
Access2Gov in these locations.
Infocorp (TSX: INP) is a leader in the design and delivery of
state-of-the-art revenue management solutions for governments and
specialty retailers. Infocorp's solutions enable product and
service delivery, workflow automation, and payment transaction
processing through multiple delivery channels including over-the-
counter, Internet and kiosks. Its core e-government product,
Access2Gov (formerly POS+), has been installed in a variety of
state, provincial and municipal departments, and is a key
component of electronic service delivery solutions. Its core
retail product, Softwear/P.O.S., is installed on over 10,000
workstations in retail organizations around the world, and is a
fully integrated retail management system, from point-of-sale to
customer relationship management and back office automation.
Infocorp's offices are located in Canada and USA.
As of March 31, 2003, the Company's working capital deficit tops
$893K while total shareholders' equity deficit is reported at $3.9
million.
INTERNATIONAL PAPER: CEO John Dillon Retiring on October 31
-----------------------------------------------------------
International Paper (NYSE: IP) announced that John Dillon,
chairman and chief executive officer, will retire on Oct. 31,
2003, and that John Faraci, currently International Paper
president, will succeed him as chairman and CEO, effective Nov 1.
"Given the wealth of experience John Faraci has gained throughout
his 29-year career at International Paper, he is extremely well
prepared to lead this company," Dillon said. "He has been an
integral part of our senior leadership team and a key participant
in our current business and performance improvement strategy. He
has proven himself to be a very effective leader, and I am
confident he will build on the many successes we have achieved."
John Faraci, 53, has been International Paper's president since
February having responsibility for the company's businesses. He
was previously executive vice president and chief financial
officer, having responsibility for all finance functions, xpedx
(International Paper's distribution business), and corporate
responsibility for Carter Holt Harvey, International Paper's 50.5
percent owned subsidiary in New Zealand.
He joined the company in 1974 as a financial analyst and held
various financial, product management, planning and general
management positions in the Wood Products, Packaging and Forest
Resources businesses. In 1989, he was named a company vice
president and in 1994, he assumed responsibility for Coated Paper,
Bristols and Converting Papers. He later served as chief
executive officer and managing director of Carter Holt Harvey,
before becoming International Paper's chief financial officer in
1999.
Dillon, 65, served International Paper for 38 years, and held
executive roles in the company's pulp, packaging and forest
products businesses. He became a director in 1991, was named
president and chief operating officer in 1995, and has served as
chairman and CEO since 1996.
Under Dillon's leadership, International Paper's position as the
global leader in the paper and forest products industry was
significantly expanded and strengthened. He also took
International Paper to a new level of performance by strengthening
core businesses and improving the company's strategic and
competitive position through acquisitions, divestitures and
facility rationalizations, aggressive cost reduction programs,
increased customer focus and attention to employee engagement.
"The company has strengthened tremendously under John Dillon's
leadership," said John Faraci. "Our core businesses are stronger
and more competitive than ever before. His vision and commitment
made IP a more focused company and we are poised to become one of
the best companies in the world."
"I'm proud to be assuming the leadership role of the company,"
Faraci said. "I am committed to continuing to deliver a strong
return on investment and create value for our shareowners and
solutions that help our customers."
In a related announcement, International Paper announced that Rob
Amen, currently executive vice president, will succeed John Faraci
as president on Nov. 1, 2003. In Amen's new position, he will
continue to report to Faraci. Amen has also been elected to the
company's board of directors, effective Nov. 1.
"Rob brings a great amount of skill and experience to his new
role," said Faraci. "Having served in various leadership
capacities in his 23-year tenure with International Paper, Rob is
a huge asset to our company and offers our team tremendous
capabilities. Importantly, he brings extensive global experience,
having led our successful European operations and our expansion
into Eastern Europe."
Rob Amen, 54, has been an executive vice president of
International Paper since the fall of 2000, with responsibility
for the company's printing papers businesses, Europe operations,
Brazil operations, and corporate sales and marketing. He was
previously president of International Paper -- Europe with
responsibility for the company's businesses in Europe.
Amen joined the company in 1980 as assistant treasurer, and served
in a variety of finance positions including controller. He served
as the company's vice president for bleached board, folding carton
and label, and later served as vice president for consumer
packaging, responsible for the folding carton, label and liquid
packaging businesses.
International Paper -- http://www.internationalpaper.com-- is the
world's largest paper and forest products company. Businesses
include paper, packaging, and forest products. As one of the
largest private forest landowners in the world, the company
manages its forests under the principles of the Sustainable
Forestry Initiative(R) (SFIsm) program, a system that ensures the
continual planting, growing and harvesting of trees while
protecting wildlife, plants, soil, air and water quality.
Headquartered in the United States, International Paper has
operations in over 40 countries and sells its products in more
than 120 nations.
As previously reported, Standard & Poor's Ratings Services
assigned its 'BB+' preferred stock ratings to International Paper
Co.'s $6 billion mixed shelf registration.
INTRAWEST: Fiscal Year Results Conference Call Set for Sept. 16
---------------------------------------------------------------
THERE WILL BE A CONFERENCE CALL TO DISCUSS
INTRAWEST CORPORATION'S YEAR END RESULTS
DATE: TUESDAY, SEPTEMBER 16, 2003
TIME: 10:30 A.M. ET
9:30 A.M. CT
7:30 A.M. PT
PLEASE DIAL THE FOLLOWING NUMBER TO BE CONNECTED
TO THE CONFERENCE CALL:
1-888-458-1598
Access Code 88228
(ANALYSTS AND INSTITUTIONAL INVESTORS)
1-888-202-2787
Access Code 88228
(MEDIA AND RETAIL INVESTORS)
THANK YOU FOR YOUR INTEREST AND COOPERATION
THIS CALL WILL REPLAY THROUGH TUESDAY, SEPTEMBER 23, 2003
YOU MAY LISTEN TO IT BY DIALING 1-877-653-0545
(PASSWORD 194876)
OR YOU MAY LISTEN TO A LIVE WEBCAST OF THE CALL BY VISITING
http://www.intrawest.comand clicking on
"Investor Relations/Webcasts and Presentations"
The webcast will be archived on http://www.intrawest.com
* * *
As previously reported, Standard & Poor's Ratings Services
revised its outlook on resort developer and operator Intrawest
Corp., to positive from stable on the company's intention to
separate the real estate construction activity of its business
into a new entity called Leisura Development Partnerships. At
the same time, the ratings on Intrawest, including the 'BB-'
long-term corporate credit rating, were affirmed.
JAMES CABLE: Court Fixes Sept. 22 as General Claims Bar Date
------------------------------------------------------------
By Order of the U.S. Bankruptcy Court for the Middle District of
Georgia, September 22, 2003, is the deadline for creditors of
James Cable Partners, LP and its debtor-affiliates to file their
proofs of claim against the Estates or be forever barred from
asserting their claims.
Proof of claim forms must be received by the Clerk of the
Bankruptcy Court on or before 5:00 p.m. Eastern Time on Sept. 22,
2003, and delivered to:
U.S. Bankruptcy Court for the Middle District of Georgia
433 Cherry Street
Macon, Georgia 31201
The Bankruptcy Court also fixes the Governmental Claims bar date
for Dec. 23, 2003.
Proofs of Claim need not be filed if they are on account of:
1. Claims already properly filed with the Clerk of the
Bankruptcy Court;
2. Claims not listed as contingent, unliquidated or
disputed in the Debtors' Schedules;
3. Administrative claims against the Debtors pursuant to
Sections 503(b) and 507(a)(1) of the Bankruptcy Code;
4. Claims already paid in full by the Debtors; or
5. Claims previously allowed by Order of the Court.
The Debtors filed for Chapter 11 protection on June 26, 2003,
(Bankr. M.D. Ga. Case No. 03-52842). Frank B. Wilensky, Esq., at
Macey, Wilensky, Cohen, Wittner & Kessler, LLP represents the
Debtors in their restructuring efforts.
LENNAR CORP: Will Publish Third Quarter Results on Tuesday
----------------------------------------------------------
Lennar Corporation (NYSE: LEN and LEN.B) will release earnings
after the market closes on September 16, 2003 for the quarter
ended August 31, 2003. Additionally, the Company will hold a
conference call on September 17th, 2003 at 11:00 a.m. Eastern
time.
The call will be broadcast live over the Internet and can be
accessed through Lennar's Web site at http://www.lennar.com If
you are unable to participate during the live webcast, the call
will be archived at http://www.lennar.comfor 90 days.
In order to listen to the live event, a participant must have a
multimedia computer with speakers and Windows Media Player. To
download the software prior to the event, please visit
http://www.lennar.com click the conference call link on the home
page and follow the pre-event instructions.
Lennar Corporation, founded in 1954, is headquartered in Miami,
Florida and is one of the nation's leading builders of quality
homes for all generations, building affordable, move-up and
retirement homes. Under the Lennar Family of Builders banner, the
Company includes the following brand names: Lennar Homes, U.S.
Home, Greystone Homes, Village Builders, Renaissance Homes, Orrin
Thompson Homes, Lundgren Bros., Winncrest Homes, Sunstar
Communities, Don Galloway Homes, Patriot Homes, NuHome, Barry
Andrews Homes, Concord Homes, Summit Homes, Cambridge Homes,
Seppala Homes, Coleman Homes, Genesee and Rutenberg Homes. The
Company's active adult communities are primarily marketed under
the Heritage and Greenbriar brand names. Lennar's Financial
Services Division provides mortgage financing, title insurance,
closing services and insurance agency services for both buyers of
the Company's homes and others. Its Strategic Technologies
Division provides high-speed Internet access, cable television and
alarm installation and monitoring services to residents of the
Company's communities and others. Previous press releases may be
obtained at http://www.lennar.com
* * *
As reported in Troubled Company Reporter's February 7, 2003
edition, Standard & Poor's Ratings Services raised its corporate
credit rating on Lennar Corp., to 'BBB-' from 'BB+'. At the same
time, ratings are raised on approximately $2.185 billion senior
debt, including bank lines, and on $254 million subordinated
debt. The company's outlook is revised to stable from positive.
The ratings and outlook acknowledge Lennar's solid market
position, highly profitable operations, successful track record
of integrating acquisitions, and sound financial risk profile.
These credit strengths, coupled with management's discipline
with regard to debt leverage, should enable Lennar to perform
solidly even if housing demand does soften.
RAISED RATINGS
Lennar Corp.
Ratings
To From
-- ----
Corporate credit BBB-/Stable BB+/Positive
$2.185 bil. sr debt BBB- BB+
$254.19 mil. sub debt BB+ BB-
U.S. Homes Corp.
Ratings
To From
-- ----
Corporate credit BBB- BB+
$2.181 mil. sr debt BBB- BB+
$6.187 mil. sub debt BB+ BB-
MAGNETITE V: Class D Floating-Rate Notes Get BB Prelim. Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Magnetite V CLO Ltd.'s $320 million floating-rate notes
due 2015.
The preliminary ratings are based on information as of
Sept. 9, 2003. Subsequent information may result in the assignment
of final ratings that differ from the preliminary ratings.
The preliminary ratings reflect:
-- The expected commensurate level of credit support in the
form of subordination to be provided by the notes junior
to the respective classes;
-- The cash flow structure, which is subject to various
stresses requested by Standard & Poor's;
-- The experience of the collateral manager;
-- The coverage of interest rate risks through hedge
agreements; and
-- The legal structure of the transaction, which includes the
bankruptcy remoteness of the issuer.
Magnetite V CLO is the eighth CDO managed by BlackRock Financial
Management Inc. The last deal, also a cash flow arbitrage CLO,
closed in July 2002.
PRELIMINARY RATINGS ASSIGNED
Magnetite V CLO Ltd.
Class Rating Amount (mil. $)
A AAA 270.0
B A 20.0
C BBB 19.0
D BB 11.0
Preference shares N.R. 30.0
MEDCOMSOFT: Reports Increased Demand for EMR Products in the US
---------------------------------------------------------------
MedcomSoft Inc. (TSX - MSF) has experienced a significant increase
in demand for its American product, MedcomSoft Record, that has
resulted in a number of new software license sales in the United
States during the current fiscal quarter that has, to date,
exceeded the total number of licenses sold in the entire prior
fiscal year. Specific details of these sales will be reported in
connection with the announcement of the Company's annual and
quarterly financial results.
Management attributes this sharp increase to several factors
including a higher market demand for premium electronic medical
records application software in the United States, the
restructuring of MedcomSoft distribution channel, the release (in
the Spring of 2003), of an enhanced version of MedcomSoft's core
application Record version 1.3 and a large increase of physician
referrals by satisfied users.
MedcomSoft Inc. -- whose March 31, 2003 balance sheet shows a
total shareholders' equity deficit of about $1.5 million --
designs, develops and markets software solutions for healthcare
providers that are changing the way the healthcare industry
captures, manages and exchanges patient information. As a result
of MedcomSoft innovations, physicians and managed care
organizations can now easily and securely build and exchange
complete, structured, and codified electronic patient medical
records (EMR). For further information on the Company, please
refer to MedcomSoft's Web site at http://www.medcomsoft.com
METALS USA: Will Complete Final Distribution of New Common Stock
----------------------------------------------------------------
Metals USA, Inc., (Amex: MLT) has authorized its transfer agent,
Equiserve, N.A., to complete the Company's final distribution of
New Common Stock on or about September 12, 2003 pursuant to its
Amended Plan of Reorganization which became effective October 31,
2002.
The Company reported that the previously disputed General
Unsecured Claims have been settled and that the total and final
amount of Allowed General Unsecured Claims was approximately
$370.7 million. The exchange rate for the final distribution will
be approximately 53.95 shares for each $1,000 of Allowed Claims.
Pursuant to the terms of the Plan, no fractional shares will be
issued. The Company reported that approximately 17.5 million
shares of New Common Stock (representing approximately 87.5% of
the 20 million shares to be distributed pursuant to the Plan) had
previously been distributed pursuant to an "initial distribution"
conducted by the Company through the issuance of physical
certificates or electronic credits through DTC to holders of
Allowed Claims.
Holders of Allowed Claims who have previously received an "initial
distribution" from the Company, will receive an additional and
final distribution of approximately 6.45 shares for each $1,000 of
Allowed Claims.
C. Lourenco Goncalves, President and CEO stated: "I am very
pleased to announce the final distribution of stock to our
shareholders. Our executive team has worked diligently to settle
over one thousand disputed claims in less than one year. Metals
USA is now, more than ever, focused on the future."
Metals USA, Inc. is a leading North American metals distributor
and processor. Metals USA, Inc. provides a wide range of products
and services in the Carbon Plates and Shapes, Flat Rolled
Products, and Building Products markets. For more information,
visit the company's Web site at http://www.metalsusa.com
MIRANT CORP: Wins Interim Nod to Hire Sitrick and Company, Inc.
---------------------------------------------------------------
On an interim basis, U.S. Bankruptcy Court Judge Lynn authorizes
the Mirant Debtors to employ Sitrick and Company, Inc. as their
communications consultants effective July 14, 2003.
Sitrick is expected to:
(a) develop and implement communications programs and related
strategies and initiatives for communications with the
Debtors' key constituencies, including employees,
vendors, customers, community members, lenders and
shareholders, regarding the Debtors' operations,
financial performance and progress through the Chapter 11
process;
(b) develop public relations initiatives for the Debtors to
maintain public confidence and internal morale during
these Chapter 11 cases;
(c) prepare press releases and other public statements for
the Debtors, including statements relating to asset sales
and other major Chapter 11 events;
(d) prepare other written communications to the Debtors' key
constituencies; and
(e) perform other communications consulting services as may
be requested by the Debtors.
For Sitrick's postpetition representation of the Debtors, it will
bill the Debtors based on their hourly billing rates in effect at
the time. Currently, Sitrick's hourly rates are:
Member of the Firm $305 - 625
Associate 150 - 245
(Mirant Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
NATIONAL STEEL: MFB Corp. Agrees to Acquire Former Headquarters
---------------------------------------------------------------
MFB Corp (Nasdaq:MFBC) announced that its wholly owned subsidiary,
MFB Financial, has entered into an agreement with United States
Steel Corporation to acquire a new facility to house its
administrative staff and operations personnel.
The building is a 120,000 square foot office building located in
the Edison Lakes Office Park in Mishawaka and is approximately 5
miles from the home office of the Bank.
"This is an exciting and historic step for our bank. Our
commitment to being a full service, community-oriented bank has
resulted in significant growth in the last several years. This
growth has created the need for a facility that will allow us to
be more productive and efficient. After completing our analysis of
several alternatives, we have concluded that this outstanding,
highly recognizable building is well suited for our current and
future needs," according to President and CEO Charles Viater.
Since September 1996 the total assets of the Bank have almost
doubled. "This facility will allow us to achieve our long term
growth goals and continue to be a significant force in the local
market. Michiana's Finest Bank will now occupy Michiana's Finest
Building," he added.
The facility is the former headquarters of National Steel
Corporation and was built in 1992. MFB expects to occupy a portion
of the building and intends to lease the remainder. "A portion of
the facility is currently leased and the Bank has already had
contact with a number of potential tenants. However, our first
priority is to relocate our own personnel into the facility as
soon as is practical," said Viater.
The terms of the acquisition were not disclosed. The Bank does not
plan to finance this acquisition and anticipates closing within
sixty (60) days.
NOBEL LEARNING: Raises $7MM from Asset Sale & Investment Deals
--------------------------------------------------------------
Nobel Learning Communities, Inc. (Nasdaq: NLCI), a leading for-
profit provider of education and school management services for
the pre-elementary through 12th grade market, announced that the
Company has raised $6.9 million through two transactions.
The Company announced that Camden Partners Holdings, LLC, Allied
Capital Corporation, Mollusk Holdings, LLC and Blesbok Holdings,
LLC have invested $3 million into Nobel Learning Communities, Inc.
in the form of preferred stock convertible to common stock at
$5.10 per share. Participation in the $3 million investment was
done pro rata based on the current, fully diluted ownership
interest of each of the investor groups (or their affiliates).
For Camden Partners, this investment is in addition to a $6
million investment in the Company made by Camden Partners in June
2003.
In a separate transaction, the Company announced that it has sold
its Desert Heights, Arizona charter school to Partnership With
Parents, Inc. in a transaction resulting in net proceeds to the
Company of $3.9 million. The sale of this school, the Company's
only school in Arizona, occurred pursuant to the Company's plan to
sell non-core assets.
Commenting on the transaction, George Bernstein, CEO of Nobel
Learning Communities, Inc., stated, "These transactions are the
latest in a series of positive events for the Company that will
help strengthen our capital structure and increase our financial
flexibility. The $3 million equity investment in the form of
preferred stock is a tremendous vote of confidence and show of
support for Nobel Learning Communities by these highly regarded
equity investment entities. In addition, the sale of the Desert
Heights school not only injects cash into the Company, but should
have a positive impact on future results." Bernstein said that
proceeds from this transaction will be used to reduce the
Company's outstanding debt balances, meet certain bank covenants
and for working capital purposes.
Nobel Learning Communities, Inc. operates 173 schools in 14 states
consisting of private schools and charter schools; pre-elementary,
elementary, middle, specialty high schools and schools for
learning-challenged children clustered within established regional
learning communities.
Allied Capital (NYSE: ALD) is the nation's largest business
development company and provides long-term debt and equity
investment capital to middle market companies in a variety of
industries. The company also participates in the real estate
capital markets as an investor in non-investment grade
commercial mortgage-backed securities. The company is
headquartered in Washington DC. For more information, please
visit Allied Capital's Web site at http://www.alliedcapital.com
Camden Partners is a Baltimore-based private equity firm dedicated
to funding and participating in the growth of well-managed
emerging public company businesses within the business services,
health care and education industries. Current investments
include: Infocrossing, Inc., Blue Rhino, Concorde Career Colleges,
Superior Consultant Holdings and Pharmanetics. For more
information, please visit Camden Partners' Web site at
http://www.camdenpartners.com
Mollusk Holdings, LLC is an investment entity controlled by
Lawrence J. Ellison, founder and CEO of Oracle Corporation.
* * *
As reported in Troubled Company Reporter's June 12, 2003 edition,
Nobel Learning Communities closed the senior debt refunding with
Fleet and Commerce Bank.
Jack Clegg, Chairman/CEO, stated that NLCI and their banks (Fleet
Bank and Commerce Bank) finalized the transaction to waive any
past covenant defaults and to reset the covenants based on the
current level of financial performance and expected future
performance.
NORTHWESTERN CORP: Falls Below NYSE Continued Listing Standards
--------------------------------------------------------------
NorthWestern Corporation (NYSE: NOR) has received formal
notification, dated today, from the New York Stock Exchange
indicating that the Company was below the continued listing
criteria for maintaining an average closing price of its common
stock of no less than $1.00 over a consecutive 30-trading-day
period.
The NYSE had previously notified NorthWestern on Aug. 21, 2003,
that the Company was below the continued listing criteria for
total market capitalization of not less than $50 million over a
30-trading-day period and stockholders' equity of not less than
$50 million.
Given that NorthWestern has triggered two of the NYSE's continued
listing standards, the Company must notify the NYSE within 10
business days of receipt of the notification of its intent to cure
the deficiency or be subject to suspension and delisting
procedures. No assurances can be given that the Company will be
able to develop a plan to demonstrate compliance. If the Company
does not submit a plan that is found acceptable by the NYSE, the
Company will be subject to immediate suspension by the NYSE and
delisting by the SEC.
NorthWestern Corporation is one of the largest providers of
electricity and natural gas in the Upper Midwest and Northwest,
serving more than 598,000 customers in Montana, South Dakota and
Nebraska. NorthWestern also has investments in Expanets, Inc., a
nationwide provider of networked communications and data services
to small and mid-sized businesses, and Blue Dot Services Inc., a
provider of heating, ventilation and air conditioning services to
residential and commercial customers.
Northwestern's June 30, 2003, balance sheet shows a working
capital deficit of about $1.1 billion while net capital deficit
tops $504 million.
NOVA CHEMICALS: Board of Directors Declares Quarterly Dividend
--------------------------------------------------------------
Notice is hereby given that the Board of Directors of NOVA
Chemicals Corporation has declared the following quarterly
dividend, payable on the 15th day of November, 2003, to
shareholders of record at the close of business on the 31st day of
October, 2003.
COMMON SHARES
Common Shares, Dividend No. 38
Dividend of $0.10 per share on the outstanding Common Shares
NOVA Chemicals Corporation (S&P, BB+ Long-Term Corporate Credit
Rating, Positive) is a focused commodity chemical company,
producing olefins/polyolefins and styrenics at 18 locations in the
United States, Canada, France, the Netherlands, and the United
Kingdom. NOVA Chemicals Corporation shares trade on the Toronto
and New York exchanges under the trading symbol NCX.
Visit NOVA Chemicals on the Internet at
http://www.novachemicals.comfor more information on the Company.
NRG ENERGY: Wants Plan Filing Exclusivity Extended to January 9
---------------------------------------------------------------
The NRG Energy Plan was negotiated over the six months before the
Petition Date among a global bank steering committee representing
105 banks, an ad hoc bondholders' committee representing the
holders of seven series of publicly traded debt, and NRG's
ultimate parent corporation, Xcel Energy Inc. A material
requirement of the NRG Plan is that it be effective by
December 15, 2003.
To that end, the Debtors have expended, and will continue to
expend considerable time and resources to:
(a) ensure that each of the 28 Debtors' schedules of assets
and liabilities, as well as their statements of financial
affairs, are timely completed and filed with the Court;
(b) prepare for and participate in the Section 341 creditors'
meeting and in the Committee formation meeting;
(c) obtain a scheduling order for establishing procedures and
deadlines for the hearings on the approval of the
disclosure statement and confirmation of the Plan;
(d) obtain Court approval of emergency relief requested in the
first day motions filed with the Court;
(e) obtain Court approval of deadlines for filing proofs of
claim and preparing and sending notice of the deadlines to
all creditors and potential creditors of the estates; and
(f) attend to a multitude of matters facilitating confirmation
of the relevant plans of reorganization in these Chapter
11 cases.
In addition, the Debtors have been forced to expend substantial
time and resources defending several other contested matters that
have been asserted in these bankruptcy cases, including:
(a) objections asserted by the Connecticut Light & Power
Company to the Debtors' request to reject an executory
contract with CL&P, which resulted in a two-day
evidentiary hearing;
(b) a motion to withdraw the reference to the district court
filed by CL&P in connection with the rejection of the
executory contract, as well as the adversary proceeding
initiated by the Debtors in connection with the rejection;
(c) a motion filed by the Informal Committee of Secured
Bondholders of South Central Generating LLC to terminate
exclusive periods to file a plan of reorganization and
solicit acceptances, or alternatively, to appoint a
Chapter 11 trustee;
(d) four motions for relief from stay filed by various
creditors in these Chapter 11 cases;
(e) two objections by at least three utility companies to the
Debtors' proposed adequate assurance under Section 366 of
the Bankruptcy Code;
(f) a motion for the appointment of an examiner; and
(g) at least eight objections to the adequacy of disclosure
set forth in the Disclosure Statement.
Matthew A. Cantor, Esq., at Kirkland & Ellis, in New York,
reports that substantial work remains to ensure the
implementation and effectiveness of the NRG Plan by December 15,
2003. The Plan Debtors are in the process of preparing for the
solicitation process and a confirmation hearing.
Section 1121(b) of the Bankruptcy Code grants a debtor an initial
period of 120 days after the filing of a Chapter 11 case during
which the debtor has the exclusive right to propose and file a
plan of reorganization. Section 1121(d)(3) of the Bankruptcy
Code provides that if the debtor files a plan within the initial
120-day exclusive period, then the debtor has until the end of
the period ending on the 180th day after the Chapter 11 case was
commenced to solicit and obtain acceptances of the plan.
Pursuant to Section 1121(d), a bankruptcy court can extend the
exclusive periods for cause. Accordingly, the Debtors ask the
Court to extend the Exclusive Periods for:
(i) filing a plan or plans of reorganization through
January 9, 2004; and
(ii) obtaining acceptances of that plan through March 10,
2004.
Mr. Cantor asserts that the requested extensions are warranted on
these grounds:
A. The Size and Complexity of these Cases
The Debtors have aggregate liabilities totaling
$11,600,000,000. There are 28 related Debtor entities. The
size of the Debtors' operations, coupled with the multitude of
legal and operational challenges facing the Debtors, make
these cases exceedingly complex.
B. Progress made in the Debtors' Reorganization Cases
The Debtors have worked diligently to move the NRG Disclosure
Statement towards approval by both the Court and the SEC, to
prepare for an impending solicitation, and to position
themselves for a Plan confirmation hearing later this fall.
A significant reason for the additional time requirement is
outside of the Debtors' control. NRG is a subsidiary of
a public utility holding company, Xcel. Because Xcel provided
indemnities, guarantees and other financial support to NRG,
federal law requires that the SEC review and approve the NRG
Plan and Disclosure Statement before the Plan Debtors can
commence their solicitation. The approval process was
commenced on July 25, 2003. The Debtors cannot guarantee when
the SEC will issue its approval, but is hopeful that the
approval will be granted in mid to late September.
Also, substantial progress has been made towards finalizing
the Northeast/South Central Plan. Financing commitments have
been obtained, and draft plan documents have been shared with
the advisors to the ad hoc committee representing the NRG
Northeast and NRG South Central creditors. But work still
remains to be done.
With regard to the Nelson Debtors, discussions have been held
with the lenders to the Nelson Debtors, and various
restructuring alternatives have been discussed, including a
possible sale of the entities, or a consensual return of the
Nelson Debtors' assets to the lenders. While progress has
been made, additional time is required to continue discussions
with the Nelson Debtors' creditors and formulate the optimum
plan for the Nelson Debtors' emergence from bankruptcy.
C. The Debtors' Progress in Good Faith
The Plan Debtors showed the ultimate good faith progress by
filing both the NRG Plan and Disclosure Statement on the
Petition Date. Since then, the Debtors have focused
significant time, energy and resources on obtaining financing.
D. The Debtors' Payment of their Bills
The Debtors have been paying their bills as they come due,
including the payment of interest to the holders of the NRG
Northeast bonds and the NRG South Central bonds. Moreover,
the Debtors have a significant amount of cash on hand and NRG
Northeast has access to a $210,000,000 postpetition financing
facility. Thus, the Debtors have liquidity, which ensures
their position to pay future bills as they come due in the
ordinary course of business.
Mr. Cantor argues if the Court were to deny the Debtors' request,
any party-in-interest then would be free to propose a plan of
reorganization for each of the Debtors. A chaotic environment
with no central focus would ensue.
Conversely, an extension of exclusivity now, during the early
stages of these cases, should enable the Debtors to harmonize the
diverse and competing interests of over 20,000 creditors and to
attempt to resolve conflicts in a reasoned and balanced manner.
(NRG Energy Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
NTELOS INC: Emerges from Chapter 11 Bankruptcy Proceedings
----------------------------------------------------------
NTELOS Inc., has completed its financial restructuring and emerged
from Chapter 11 proceedings. The company's Joint Plan of
Reorganization, which was confirmed by the U.S. Bankruptcy Court
for the Eastern District of Virginia on August 12, 2003, became
effective on September 9, 2003.
Under the company's Joint Plan of Reorganization the restructured
company will be privately held, with NTELOS' former senior
noteholders owning approximately 94% of the new common stock on
the effective date (or approximately 68% on a fully diluted basis
after giving effect to the conversion of the new notes, described
below). The remaining stock will be issued to former subordinated
noteholders, purchasers of the company's new convertible notes and
in settlement of other claims and equity interests, as provided in
the plan. Existing shares of NTELOS Inc. common stock (NTLOQ) have
been cancelled, along with the company's senior and subordinated
notes and outstanding preferred stock.
The company emerges with a new $261 million credit facility,
consisting of $228.6 million in outstanding term loans and a $32.4
million revolving facility, all of which is currently available.
At emergence, the company also received $75 million from the sale
of new 9% convertible notes to certain former senior noteholders.
The company's total debt is now approximately $320 million, about
one-third of the nearly $950 million of debt and redeemable
preferred obligations prior to the reorganization.
After currently scheduled payments are made to creditors and for
professional fees, NTELOS expects to have approximately $50
million of cash on hand. That cash, coupled with the available
$32.4 million revolving credit facility and cash generated from
ongoing operations provides increased liquidity for growing the
business.
James S. Quarforth, Chief Executive Officer of NTELOS, said, "The
smooth progress we have made in concluding our financial
restructuring reflects the overwhelming support we received from
our creditors, the loyalty of our customers and the commitment of
our employees. With their continued support and our greatly
improved balance sheet, we believe we are positioned to grow our
businesses - wireless and wireline - and continue to provide
reliable service to our customers."
The initial distribution of the new common stock to the former
senior and subordinated noteholders and in settlement of other
claims as provided in the plan is expected to begin as soon as
reasonably practicable following this announcement. More detailed
information with respect to the distribution can be found in the
Joint Plan of Reorganization. As described in the company's
Disclosure Statement, there currently is no trading market for the
new common stock nor is it known whether or when a trading market
would develop.
NTELOS Inc. is an integrated communications provider with
headquarters in Waynesboro, Virginia. NTELOS provides products and
services to customers in Virginia, West Virginia, Kentucky,
Tennessee and North Carolina, including wireless digital PCS,
dial-up Internet access, high-speed DSL (high-speed Internet
access), and local and long distance telephone services. Detailed
information about NTELOS is available online at
http://www.ntelos.com
OAKWOOD HOMES: Files Amended Plan & Disclosure Statement in Del.
----------------------------------------------------------------
Oakwood Homes Corporation has filed with the U.S. Bankruptcy Court
in Delaware an amended Plan of Reorganization and related
Disclosure Statement. A hearing has been scheduled on
September 26, 2003 at which the Company intends to ask the Court
to approve the Disclosure Statement and to allow the Company to
solicit its creditors and seek confirmation of the Plan.
Myles E. Standish, President and Chief Executive Officer, stated:
"The Plan contemplates that we will emerge from bankruptcy by the
end of November and that our unsecured creditors will convert
their claims into all of the outstanding common stock of the
Company. Existing shareholders would receive out-of-the-money
stock warrants as originally contemplated when we entered
bankruptcy in November 2002. In connection with the
reorganization, the Company expects to obtain new financing to
replace its debtor-in-possession and other existing credit
facilities. It is anticipated that the Company's new revolving and
letter of credit facility will be secured by substantially all of
the Company's assets. In addition, the Plan assumes replacement of
the Company's warehouse facility and servicing advance facility.
The Company is working with various national lending institutions
to convert term sheets for these facilities into committed
facilities and expects to receive commitments prior to the
September 26 hearing.
"The proposed Plan will leave Oakwood with virtually no long-term
debt and will position it to capitalize on the eventual recovery
of the manufactured housing industry. However, the proposed Plan
is subject to further amendment, and there can be no assurances
that the Plan, as proposed, will be confirmed or that the exit
financing facilities will be finalized.
"The Company views the filing of the amended Plan and related
Disclosure Statement as an important step toward the successful
conclusion of its bankruptcy filing and very much appreciates the
continued support of its creditors, lenders, customers, suppliers
and employees during this process."
Oakwood Homes Corporation and its subsidiaries are engaged in the
production, sale and financing of manufactured housing throughout
the United States. The Company's products are sold through
Company-owned stores and an extensive network of independent
retailers.
ON COMMAND: Strikes Definitive Merger Pact with Liberty Media
-------------------------------------------------------------
On Command Corporation (OTC Bulletin Board: ONCO), a leading
provider of in-room interactive services, business information and
guest services for the lodging industry, has entered into a
definitive merger agreement with its indirect parent corporation,
Liberty Media Corporation (NYSE: L and LMC.B), through which
Liberty Media would acquire the approximately 26% of the issued
and outstanding shares of On Command common stock not already
owned by Liberty Media and its affiliates.
If the merger is consummated as planned, each issued and
outstanding share of On Command common stock not owned by Liberty
Media or its subsidiaries would be converted into the right to
receive 0.166 of a share of Liberty Media Series A common stock,
subject to adjustment under certain circumstances. Shares as to
which appraisal rights under Delaware law have been validly
exercised will not be converted into Liberty Media shares in the
merger. If the implied value of the exchange ratio is less than
$1.90 or more than $2.10 per share of On Command common stock,
based on the average market price of the Liberty Media Series A
common stock during the five trading days ending on the third
trading day prior to the closing of the merger, then the exchange
ratio will be adjusted upward or downward, as applicable, to yield
an implied value of $1.90 or $2.10 per share, respectively, based
on such average market price. Any adjustment of the exchange ratio
to more than 0.190 of a share of Liberty Media Series A common
stock for each share of On Command common stock will be at Liberty
Media's sole discretion. If Liberty Media determines not to
increase the exchange ratio further, then the exchange ratio would
be fixed at 0.190 and On Command would be entitled to terminate
the merger agreement. Any decision of the On Command board of
directors to terminate the merger agreement would be made by vote
of the independent directors.
The transaction was negotiated and approved by a committee of the
Board of Directors of On Command composed solely of independent
directors. Credit Suisse First Boston served as financial advisor
to the committee of independent directors. Consummation of the
merger is subject to the approval of the merger agreement by the
shareholders of On Command and the satisfaction of customary
closing conditions. The transaction would be taxable to On
Command shareholders.
On Command Corporation -- http://www.oncommand.com-- is a leading
provider of in-room entertainment technology to the lodging and
cruise ship industries. On Command is a majority-owned subsidiary
of Liberty Satellite & Technology, Inc. (OTC Bulletin Board:
LSTTA, LSTTB).
On Command entertainment services include: on-demand movies;
television Internet services using high-speed broadband
connectivity; television email; short form television features
covering drama, comedy, news and sports; PlayStation video games;
and music-on-demand services through Instant Media Network, a
majority-owned subsidiary of On Command Corporation and the
leading provider of digital on-demand music services to the hotel
industry. All On Command products are connected to guest rooms
and managed by leading edge video-on-demand navigational controls
and a state-of-the-art guest user interface system. The guest
menu system can be customized by hotel properties to create a
robust platform that services the needs of On Command hotel
partners and the traveling public. On Command and its
distribution network service more than 1,000,000 guest rooms,
which touch more than 300 million guests annually.
On Command's direct-served hotel properties are located in the
United States, Canada, Mexico, Spain, and Argentina. On Command
distributors serve cruise ships operating under the Royal
Caribbean, Costa and Carnival flags. On Command hotel properties
include more than 100 of the most prestigious hotel chains and
operators in the lodging industry: Accor, Adam's Mark Hotels &
Resorts, Fairmont, Four Seasons, Hilton Hotels Corporation, Hyatt,
Loews, Marriott (Courtyard, Renaissance, Fairfield Inn and
Residence Inn), Radisson, Ramada, Six Continents Hotels (Inter-
Continental, Crowne Plaza and Holiday Inn), Starwood Hotels &
Resorts (Westin, Sheraton, W Hotels and Four Points), and Wyndham
Hotels & Resorts.
At June 30, 2003, On Command's balance sheet shows a total
shareholders' equity deficit of about $34 million.
ON SEMICONDUCTOR: Offering 35 Million Shares of Common Stock
------------------------------------------------------------
ON Semiconductor (Nasdaq: ONNN) proposed a common stock offering
of 34.8 million shares that, at yesterday's Nasdaq closing price
of $5.46, would amount to approximately $190 million in gross
proceeds to ON Semiconductor. These securities will be issued
under ON Semiconductor's existing shelf registration statement on
file with the Securities and Exchange Commission.
In connection with the offering, ON Semiconductor proposes to
grant the underwriters an option for a period of 30 days from the
initial offering to purchase up to an additional 5.2 million
shares of common stock to cover over-allotments, if any. At
yesterday's Nasdaq closing price of $5.46, these over-allotment
shares would amount to approximately $28 million in additional
gross proceeds to ON Semiconductor. ON Semiconductor plans to use
the net proceeds of the offering to prepay a portion of the loans
outstanding under its senior bank facilities.
The joint bookrunning managers for the offering will be Morgan
Stanley & Co. Inc. and J.P. Morgan Securities Inc. Copies of the
preliminary prospectus related to the common stock offering may be
obtained from Morgan Stanley & Co. Inc., 1585 Broadway, New York,
NY 10036 or from J.P. Morgan Securities Inc., 277 Park Avenue, New
York, NY 10172.
The common stock offering may be made only by means of a
prospectus and related prospectus supplement, copies of which may
be obtained by contacting Morgan Stanley or J.P. Morgan as
indicated in this news release.
ON Semiconductor -- whose July 4, 2003 balance sheet shows a total
shareholders' equity deficit of about $750 million -- offers an
extensive portfolio of power- and data-management semiconductors
and standard semiconductor components that address the design
needs of today's sophisticated electronic products, appliances and
automobiles. For more information visit ON Semiconductor's Web
site at http://www.onsemi.com
OSE USA: Selling Manufacturing Division to Integrated Packaging
---------------------------------------------------------------
OSE USA, Inc. (OTCBB:OSEE)("OSEU"), has signed an agreement for
the sale of its manufacturing division to Integrated Packaging
Assembly Corporation, a newly-formed Delaware corporation,
organized by Victor Batinovich, a former chief executive of OSEU
from its founding in 1992 until 1997.
The agreement follows OSEU's announcement on April 21 of its
intention to shut down its manufacturing operations by June 30 due
to lack of profitability. The new company, which takes the name
formerly used by OSEU prior to June 2001, has no connection with
OSEU or any of its affiliates and will be independently owned and
operated.
Pursuant to the agreement of sale, IPAC will acquire OSEU's entire
manufacturing business, including related equipment, inventory,
books and records, permits and licenses, and intellectual
property, for a total of $1 million, including $500,000 in cash
and a three-year secured note in the amount of $500,000. No
liabilities are to be assumed.
The transaction is subject to certain conditions, including
satisfactory arrangement with OSEU's existing bank creditors for
the release of existing liens, and the signing of new leases on
OSEU's existing headquarters facility. The parties intend that
IPAC will take over a portion of the leased premises and that OSEU
will continue to conduct a manufactured chip distribution business
in the remaining portion of the facility through its distribution
subsidiary, OSE, Inc. The Agreement contains other clauses and
conditions customary for transactions of this type.
Founded in 1992, OSEU -- whose June 29, 2003 balance sheet shows a
total shareholders' equity deficit of about $43 million -- has
been the nation's leading onshore advanced technology IC packaging
foundry. In May 1999, Orient Semiconductor Electronics, Ltd., one
of Taiwan's top IC assembly and packaging services companies,
acquired a controlling interest, boosting its U.S. expansion
efforts. OSEU entered the distribution segment of the market in
October 1999 with the acquisition of OSEI.
For more information, visit OSEU's Web site at
http://www.ose-usa.com
O'SULLIVAN INDUSTRIES: June 30 Net Capital Deficit Tops $138MM
--------------------------------------------------------------
O'Sullivan Industries Holdings, Inc. (OTC Pink Sheets: OSULP), a
leading manufacturer of ready-to- assemble furniture, announced
its fourth quarter and fiscal year end results for the period
ending June 30, 2003.
Fourth Quarter and Fiscal Year End Results
Net Sales
Net sales for the fourth quarter of fiscal 2003 were $51.6
million, a decrease of 33.1% from sales of $77.1 million in the
comparable period a year ago. Fiscal 2003 net sales were $289.2
million, a decrease of 17.2% from net sales of $349.1 million in
the comparable period a year ago.
Richard Davidson, president and chief executive officer stated,
"While in line with previously announced expectations, the fourth
quarter of fiscal 2003 was very disappointing. Sales declined in
all of our major distribution channels during the quarter compared
to the comparable period a year ago. However, we are beginning to
see some improvements in most of our major distribution channels."
Operations
Operating income for the fourth quarter of fiscal 2003 was $1.6
million, or 3.1% of net sales, a decrease of 83% from operating
income of $9.7 million, or 12.6% of net sales, in the comparable
period a year ago. Our operating income was lower compared to the
prior quarter and year due to the lower sales and related gross
margin and the lower production levels that affected our overhead
expense absorption in our manufacturing operations. In addition,
we incurred a $1.5 million restructuring charge related to the
capacity rationalization in our Virginia manufacturing facility
and a reduction of personnel at our corporate headquarters during
the fourth quarter of fiscal 2003. Excluding the restructuring
charge operating income for the fourth quarter of fiscal 2003
would have been $3.1 million, or 6.0% of net sales.
Fiscal 2003 operating income was $26.3 million, or 9.1% of net
sales, a decrease of 34% from operating income of $39.9 million,
or 11.4% of net sales, in the comparable period a year ago. The
$1.5 million restructuring charge noted above and a $540,000
restructuring charge related to the sale of our former
manufacturing facility in Utah were recorded during the year
ending June 30, 2003. Excluding these restructuring charges
operating income for the fiscal year 2003 would have been $28.3
million, or 9.8% of net sales.
Income and EBITDA
Net loss for the fourth quarter of fiscal 2003 was $4.6 million
compared to a net income of $2.8 million in the comparable period
a year ago. Income before income taxes for fiscal 2003 was $1.6
million compared to $11.7 million for fiscal 2002. Net income for
fiscal 2003 was $1.6 million compared to a net loss of $89.2
million in the comparable period a year ago. The net loss in the
prior year period reflects increased income tax expense from the
revised accounting for the tax sharing agreement with RadioShack.
EBITDA for the fourth quarter, after the restructuring charge of
$1.5 million and other financing costs of $0.4 million, was $4.5
million, or 8.7% of net sales, a decrease of 66% from EBITDA of
$13.3 million, or 17.2% of net sales in the comparable period a
year ago. EBITDA for fiscal 2003, after the restructuring charge
of $2.0 million and other financing costs of $0.4 million, was
$39.5 million, or 13.6% of net sales, a decrease of 27% from
EBITDA of $54.2 million, or 15.5% of net sales for fiscal 2002.
The attached table reconciles net income to EBITDA.
EBITDA should be considered in addition to, but not as a
substitute for or superior to, operating income, net income,
operating cash flow and other measures of financial performance
prepared in accordance with generally accepted accounting
principles. EBITDA may differ in the method of calculation from
similarly titled measures used by other companies. EBITDA provides
another measure of the operations of our business and liquidity
prior to the impact of interest, taxes and depreciation. Further,
EBITDA is a common method of valuing companies such as O'Sullivan,
and EBITDA, with adjustments, is a component of each of the
financial covenants in our senior credit facility. Our
consolidated EBITDA, as defined in the credit agreement, was $6.9
million and $43.6 million for the quarter and fiscal year ended
June 30, 2003, respectively.
Working Capital
For the fiscal year ending June 30, 2003, net cash provided by
operating activities was $14.7 million, compared to net cash
provided by operating activities of $25.9 million in fiscal 2002.
Cash on hand at year-end was $8.0 million compared to $15.8
million in the prior year.
Accounts receivable levels at June 30, 2003 dropped to $25.0
million from $37.0 million last year, a decrease of $12.0 million,
or 32.4%. The lower accounts receivable balance is primarily
attributable to the lower sales levels. However, we have also
decreased our days sales outstanding compared to the prior year.
Inventory levels at June 30, 2003 were $52.4 million about the
same as June 30, 2002.
For the fiscal year ended June 30, 2003 capital expenditures were
$5.1 million, a decrease of $3.6 million from the $8.6 million
spent in the previous fiscal year.
Total long-term debt at June 30, 2003 was $213.4 million compared
to $234.6 million in the comparable period a year ago, a decrease
of $21.2 million, or 9.0%. In addition to scheduled principal
payments of $3.3 million, we made additional prepayments of $20.9
million, including the net proceeds from the sale of our Utah
manufacturing facility.
At June 30, 2003, the Company's balance sheet shows a total
shareholders' equity deficit of about $138 million.
Management Comments
Mr. Davidson continued, "In this very challenging sales
environment, O'Sullivan Furniture has been active in developing
new product categories and capabilities that will position us for
future channel penetration. Additionally, we continue to believe
that our status as a low-cost producer will provide a benefit
during an economic recovery. However, our new category initiatives
are beginning to provide incremental sales results that are not
necessarily tied to an overall improvement in the business
climate. These new initiatives will provide an important
foundation for positioning O'Sullivan for renewed growth and
include:
-- Coleman(R) Storage Products. One of our Coleman storage product
collections has been placed at a major home improvement chain.
Products from other Coleman storage product collections will
begin testing in other major retailers. Other retailers are in
the process of reviewing Coleman products before they commit to
tests or chain-wide rollouts.
-- Commercial Office Systems. We continue to aggressively pursue
the commercial office furniture and systems category and have
placed collections in two major office superstores. The next
phase of our commercial office furniture and systems initiative
has been well received by these major office superstores, and
we will place this new product in their stores and catalog
within the next six months."
Mr. Davidson concluded, "During this period of declining revenue,
we continue to address our cost structure which is evidenced by
our recent capacity and fixed cost reductions in our Virginia
manufacturing facility and the headcount reductions at our
corporate office. Despite depressed sales levels, we have also
managed to control our finished goods inventory levels. In
addition to these cost saving measures, we continue to review
financing opportunities to strengthen our capital structure. These
actions have allowed us to maintain a solid cash position.
"The soft economic conditions the wood residential furniture
industry has experienced for nearly 3 years continued during our
June 2003 quarter. However, we are beginning to see more positive
trends in our overall order patterns from customers and in our POS
data. We currently expect sales in the first quarter of fiscal
2004 will be about the same as the first quarter of fiscal 2003.
Further, we anticipate operating income in the first quarter of
fiscal 2004 to decline approximately 40% to 50% in comparison to
the first quarter a year ago due to lower production levels
adversely affecting our fixed cost absorption and increased
promotional activities with several of our major retail partners."
PENN TRAFFIC: Initiates Staff Reduction of 100 Employees
--------------------------------------------------------
The Penn Traffic Company (OTC: PNFTQ.PK) announced staff
reductions of 100 administrative and supervisory employees, with
reductions in virtually every administrative department. In
addition, the Company is not filling another 25 open positions. No
job reductions are being made in any of Penn Traffic's 211
supermarkets.
"We sympathize with the affected employees and their families,
whose lives will be disrupted by these layoffs," said Steven G.
Panagos, Penn Traffic's Interim Chief Executive Officer. "But like
any company in chapter 11 reorganization, Penn Traffic must reduce
costs and operate as efficiently as possible."
Mr. Panagos said that the Company would keep the affected
employees updated on the status of the motion the Company is
filing with the court to obtain approval of severance benefits.
"By law, when a company is in reorganization, all severance
packages must be approved by the court," said Mr. Panagos.
Penn Traffic and its U.S. subsidiaries filed voluntary petitions
for reorganization under chapter 11 of the U.S. Bankruptcy code in
the Southern District of New York on May 30 of this year. More
information about Penn Traffic's reorganization is available at
the following numbers: Employees: 1-877-807-7097 (toll-free);
Customers: 800-724-0205 (toll-free); Vendors and Suppliers: 315-
461-2341.
The Penn Traffic Company operates 211 supermarkets in Ohio, West
Virginia, Pennsylvania, upstate New York, Vermont and New
Hampshire under the Big Bear, Big Bear Plus, BiLo, P&C and Quality
trade names. Penn Traffic also operates a wholesale food
distribution business serving 77 licensed franchises and 53
independent operators.
PG&E NATIONAL: Hires Patton Boggs as Special Employment Counsel
---------------------------------------------------------------
U.S. Bankruptcy Court Judge Mannes approves the PG&E National
Energy Group Debtors' employment of Patton Boggs LLP as special
employment counsel to provide legal advise regarding employment
policies and practices and other employment law issues that may
arise in the normal course of business.
Patton Boggs will also assist the Debtors with certain employment
related litigation. The Debtors also employed as special
employee benefits counsel to provide legal advice regarding:
-- the design, establishment and administration of employee
health and welfare and pension benefit plans and programs;
-- contracting issues arising in connection with the
establishment of employee benefit plans; and
-- other legal issues that may arise in the normal course of
business relating to the NEG Debtors' operation and
administration of employee benefit plans.
Patton Boggs will be compensated on an hourly basis, plus
reimbursement of actual and necessary expenses. At present,
Patton Boggs' standard hourly rates range:
Partners $255 - 610
Associates 165 - 325
Legal Assistants 75 - 210
Patton Boggs is also in possession of a $50,000 retainer.
It has been determined that Patton Boggs is a "disinterested
person" with respect to the NEG Debtors and its estates. (PG&E
National Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
PILLOWTEX CORP: Proposes Uniform Asset Sale Bidding Procedures
--------------------------------------------------------------
Pursuant to the Asset Purchase Agreement with GGST, LLC and with
the Court's permission, the Pillowtex Corporation Debtors will
implement these Bidding Procedures:
A. Qualified Bid
A Qualified Bid is a bid that the Debtors believe would be
consummated if selected as the Successful Bid. It is a
written irrevocable offer that:
(a) states that the Qualified Bidder offers to consummate
the Sale pursuant to an agreement that has been marked
to show amendments and modifications, including price
and terms, that are being proposed by the Qualified
Bidder -- the Marked Agreement;
(b) confines that the offer will remain open until the closing
of the Sale to the Successful Bidder;
(c) encloses a copy of the proposed Marked Agreement; and
(d) accompanies with a certified or bank check, wire transfer,
or letter of credit reasonably acceptable to the Debtors
of at least 10% of the amount of the Qualified Bid as a
good faith deposit.
In addition, a Qualified Bid must:
(1) provide for an aggregate purchase price of at least
$1,000,000 over the sum of total consideration offered
by GGST under the Agreement and the Break-Up Fee and
the Expense Reimbursement;
(2) be on terms that are not materially more burdensome or
conditional than the terms of the Agreement;
(3) not be conditioned on obtaining financing or the
outcome of any due diligence by the bidder;
(4) not request or entitle the bidder to any break-up fee,
expense reimbursement or similar type of payment; and
(5) fully disclose the identity of each entity that will be
bidding for the Assets or otherwise participating in
connection with the bid, and the complete terms of any
participation.
B. Bid Deadline
The Bid Deadline for a Qualified Bidder is September 4, 2003,
at 4:00 p.m., prevailing Eastern Time. Prior to the Bid
Deadline, a Qualified Bidder that desires to make a bid will:
-- deliver written copies of its bid to:
(1) the Debtors' counsel, Debevoise & Plimpton,
(2) GGST, c/o SB Capital Group, LLC,
(3) counsel to Bank of America, as Agent for the Debtors'
prepetition term lenders,
(4) counsel to Congress Financial Corporation, as Agent for
the Debtors' prepetition revolving lenders and proposed
postpetition lenders, and
(5) counsel to any official committee of unsecured
creditors appointed in these cases; and
-- file the bid with the Court.
C. Auction
The Auction will take place on October 2, 2003, at 9:00 a.m.,
prevailing Eastern Time at the offices of Debevoise &
Plimpton, or other place as the Debtors will notify GGST and
all Qualified Bidders.
D. Bidding Procedures
The Auction bidding will start at the purchase price stated in
the highest or otherwise best Qualified Bid that was disclosed
to all Qualified Bidders prior to commencement of the Auction,
and continue in increments of at least $1,000,000.
Unless agreed to by the Debtors, no Qualified Bidder will be
permitted more than one hour to respond to the previous bid at
the Auction and, at the expiration of the time, the Auction
will conclude. Immediately prior to concluding the Auction,
the Debtors will:
(a) review each Qualified Bid on the basis of its financial
and contractual terms and the factors relevant to the
sale process and the best interests of the Debtors'
creditors; and
(b) determine and identify the highest or best Qualified
Bid and the next highest or otherwise best offer after
the Successful Bid. Any bid submitted after the
conclusion of the Auction will not be considered for
any purpose.
E. Sale Hearing
The Sale Hearing will be held before the Court on October 7,
2003, at 3:30 p.m., prevailing Eastern Time, or as soon
thereafter as counsel and interested parties may be heard.
At the Sale Hearing, the Debtors will present to the Court
for approval both the Successful Bid and the Next Highest Bid.
The Debtors will effect the Sale with the Successful Bidder.
If, for any reason, the Successful Bidder fails to close the
Sale contemplated by its Successful Bid, then, without notice
to any other party or further Court order, the Debtors will
be authorized to close with the Qualified Bidder who submitted
the Next Highest Bid.
F. Return of Good Faith Deposit
The Good Faith Deposits of all Qualified Bidders, other than
the Successful Bidder and the Next Highest Bidder, will be
returned. The Good Faith Deposit of the Successful
Bidder will be held until the closing of the Sale and applied
in accordance with the Successful Bid. The Good Faith Deposit
of the Next Highest Bidder will be retained in escrow until
48 hours after the closing of the Sale. Pending their return,
the Good Faith Deposit of the Successful Bidder and the Next
Highest Bidder will be maintained in an interest bearing
escrow account. If a closing does not occur, the disposition
of Good Faith Deposits will be as provided in the Successful
Bid and Next Highest Bid.
The Debtors will send an Auction and Sale Notice by first-class
mail postage prepaid to all of the Debtors' creditors, the
Environmental Protection Agency, all state and local
environmental agencies in any jurisdiction where GGST owns or has
owned real property, all entities known to have expressed a bona
fide interest in acquiring the Assets, all taxing authorities or
recording offices which have a reasonably known interest in the
relief requested, the Office of the U.S. Trustee, counsel for the
Official Committee of Unsecured Creditors, all federal, state and
local regulatory authorities with jurisdiction over the Debtors,
the office of the U.S. Attorney, all non-debtor parties to
contracts or leases to be assumed and assigned pursuant to the
Agreement and other known parties-in-interest in these bankruptcy
cases. (Pillowtex Bankruptcy News, Issue No. 50; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
QWEST COMMS: Completes Sale of QwestDex to Dex Media for $1.3BB
---------------------------------------------------------------
Qwest Communications International Inc. (NYSE: Q) has completed
the sale of the final phase of its directory services, known as
QwestDex, to Dex Media Inc., an entity owned by the private equity
firms of The Carlyle Group and Welsh, Carson, Anderson & Stowe.
At the closing, Qwest received the remaining payment of
approximately $4.3 billion in cash in exchange for the publishing
operations supporting the states of Arizona, Idaho, Montana,
Oregon, Utah, Washington and Wyoming.
Now, the entire QwestDex operations are owned and operated by Dex
Media which will continue to use the Dex brand and provide local
and national advertisers with industry-leading directory, Internet
and direct marketing. With the close of this sale, Dex Media is
the largest privately owned incumbent directory company in the
world.
Qwest announced its intention to sell its directory publishing
business in early 2002. In August of last year the company
announced that it would sell for $7.05 billion its QwestDex
publishing business to a new entity formed by the private equity
firms of The Carlyle Group and Welsh, Carson, Anderson & Stowe. In
November, 2002, Qwest closed the first phase of its QwestDex sale
to Dex Media for $2.75 billion. The first phase included the
directories and their related operations in Colorado, Iowa,
Minnesota, Nebraska, New Mexico, North Dakota, and South Dakota.
"A little more than 12 months ago we outlined a series of
initiatives to strengthen our balance sheet and reduce debt. Our
focused and disciplined approach has generated more than $9
billion in cash liquidity and debt reduction since then," said
Oren G. Shaffer, Qwest vice chairman and CFO. "With the final
phase of the QwestDex sale complete, we now have approximately $6
billion in cash after making all currently required debt
repayments with the proceeds. This transaction, combined with our
demonstrated ability to access the capital markets at favorable
terms and generate operating cash flow, gives us a fully funded
business plan going forward."
Qwest Communications International Inc. (NYSE: Q) is a leading
provider of voice, video and data services to more than 25 million
customers. The company's 49,000 employees are committed to the
"Spirit of Service" and providing world-class services that exceed
customers' expectations for quality, value and reliability. For
more information, please visit the Qwest Web site at
http://www.qwest.com
REGIS COLLEGE: S&P Cuts Revenue Bonds Rating to BB
--------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on
Massachusetts Development Finance Agency's outstanding revenue
bonds, issued for Regis College, two notches to 'BB' from 'BBB-'
reflecting the college's financial difficulties, including four
consecutive years of large unrestricted net-asset deficits; poor
fiscal control due to prior management's lack of financial
discipline, as demonstrated by increasing expenditures without
commensurate increases in enrollment as well as major draws in the
endowment to support operations; and deteriorating liquidity
levels, with expendable resources to operations and debt
decreasing to 38% and 50%, respectively, from 125% and 156%,
respectively, just two years ago.
Continued variability in enrollment levels, including sharp
declines in traditional undergraduate students; severely limited
admissions flexibility; and a financial plan that does not produce
a net unrestricted operating surplus until 2009, as well as an
expected major decline in the college's endowment, also contribute
to the downgrade.
The stable outlook reflects the expectation that the college will
be successful in increasing enrollment, improved its fiscal
condition, and stabilizing its liquidity relative to both debt and
operations. The outlook also reflects the expectation that
fundraising will improve and that new projects will be funded
through gifts. Any additional debt issuance must be commensurate
with growth in liquidity.
A recently arrived new senior management team has initiated some
positive changes in several key areas, including cost-containment
strategies (a 30% reduction of its workforce, saving $4 million
annually) and an aggressive initiative to transform the college's
undergraduate curriculum and expand its mission of serving adult
learners, men, and women in its graduate and undergraduate
programs. Under this new team, there has been some stabilization
in the college's overall performance.
REGUS BUSINESS: Seeks to Stretch Exclusivity through October 27
---------------------------------------------------------------
Regus Business Centre Corp., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Southern District of New York for
more time to propose a chapter 11 plan.
The Debtors tell the Court that need their exclusive right to file
a chapter 11 plan extended until October 27, 2003 and the Company
asks that its exclusive period to solicit acceptances of that plan
from creditors be extended to December 29, 2003.
The Debtors report that as of the Petition Date, they were parties
to approximately 85 Leases of non-residential real property, which
include office leases and other unexpired agreements for use of
non-residential real property. As of October 2002, the Debtors
had, on a combined basis, assets, including intercompany accounts
receivable, of approximately $887 million. Both Congress and the
courts have recognized that the size and complexity of a debtor's
case alone may constitute cause for the extension of a debtor's
exclusive periods, the Debtors add.
Since the Petition Date, the Debtors have been required to focus
their attention on, among various other matters, the renegotiation
of the terms of many of their Leases, obtaining debtor-in-
possession financing, and numerous ongoing operational issues.
Throughout these cases, the Debtors submit that they have been
diligently working with their landlords in order to renegotiate
and restructure their obligations under the Leases. As a result,
Debtors have made considerable progress in lease negotiation, the
main thing to be done in these Chapter 11 Cases. At the same time,
Debtors have been operating their businesses in a manner designed
to maximize the possibility of a successful reorganization.
Debtors believe that they are now at the point where they will be
filing imminently a proposed disclosure statement and accompanying
proposed plan of reorganization for approval by this Bankruptcy
Court. Thus, the Debtors require the exclusivity extension to
enable them to proceed with the plan process focused on a proposed
plan that reflects agreement between the Debtors and the Committee
and also reflects the result of the intensive efforts of the
Debtors to renegotiate their lease obligations.
Debtors have also prepared and provided to the Committee a draft
proposed plan of reorganization and have been engaged in
substantive negotiations with the Committee regarding the proposed
plan. Although significant progress has been made, these plan
negotiations, plan preparation tasks, and other exigencies require
the further extension of the exclusive periods.
Regus Business Centre Corp., filed for chapter 11 protection on
January 14, 2003 (Bankr. S.D.N.Y. Case No. 03-20026). Karen Dine,
Esq., at Pillsbury Winthrop LLP represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
its creditors, it listed debts and assets of:
Total Assets: Total Debts:
------------- ------------
Regus Business Centre Corp. $161,619,000 $277,559,000
Regus Business Centre BV $157,292,000 $160,193,000
Regus PLC $568,383,000 $27,961,000
Stratis Business Centers Inc. $245,000 $2,327,000
SILICON GRAPHICS: Introduces Major Storage Initiative
-----------------------------------------------------
Silicon Graphics, Inc. (NYSE: SGI) announced a major initiative
aimed at establishing strong presence in the rapidly-growing
market for storing, accessing and sharing large amounts of data
and digital content. The initiative includes new marketing and
branding programs, a suite of new products, and expanded services
for application developers and distributors who wish to take
advantage of the power and flexibility of SGI's suite of open,
multiplatform storage products.
"SGI has been a too well kept secret in storage. While the bulk of
the industry is merely talking about complex things like
Information Lifecycle Management and Distributed Clustered File
Systems, SGI has been delivering this in some of the most diverse,
demanding sites for years," said Steve Duplessie, Enterprise
Storage Group. "This focus on storage as a key strategic portion
of their business should increase the overall market awareness of
their technology and provide a platform for greater numbers of
customers to take advantage of their offerings."
New Products and Capabilities
Under a new product family brand -- SGI(R) InfiniteStorage -- SGI
announced a series of new hardware and software products designed
to allow customers to improve their data management processes, or
workflows. InfiniteStorage offers customers three significant
capabilities unique to SGI: the ability to transparently share
data across their organization by avoiding data copying and
movement; the ability to scale data as the business and
application grows; and the ability to manage the data lifecycle
without limiting access.
These capabilities enable faster and more widespread access to
data and digital content, while lowering overall storage and
maintenance costs with a single solution that scales to address
customer needs. Conversely, conventional Storage Area Networks
hinder the process by requiring data files to be replicated when
users on multiple operating systems need to access and/or modify
data files.
Among the new products and capabilities are:
-- A new version (3.0) of SGI's CXFS(TM) shared file system,
which includes support for a wide range of leading
operating environments; enabling users and applications to
share data concurrently over a storage area network without
replicating files. CXFS now supports Linux(R) and IBM(R)
AIX(R) in addition to current support for IRIX(R),
Solaris(TM) and Windows(R) platforms.
-- SGI Data Migration Facility (DMF) version 2.9 transparently
supports multiple tiers of storage including online disk,
near-line disk and tape. DMF 2.9 supports a wide variety of
client operating systems and is hosted on either IRIX or
Linux systems.
-- New SGI(R) InfiniteStorage NAS 2000, SGI(R) InfiniteStorage
SAN 2000, and SGI(R) InfiniteStorage SAN 3000 solutions,
which deliver the full capabilities of InfiniteStorage
technology, provides up to 112TB of NAS storage attached
with unified file system access.
"Traditional network data sharing methods have become inadequate
as enterprise data set sizes continue to increase, making storage
management and deployment among the largest pain points for IT to
manage" added Steve Kenniston, Enterprise Storage Group. "By
translating a depth of knowledge in high-end computing into its
InfiniteStorage solutions, SGI offers a very comprehensive
offering for mainstream applications."
Customers increasing productivity with SGI storage technology
include Total, the major French oil and gas company; Pittsburgh
Supercomputing Center managing a petabyte of data for its
Terascale Computing System; Tata Motors Ltd., India's only fully
integrated automobile manufacturer; and NASA Goddard Space Flight
Center for its recent discoveries in mapping the universe. SGI
recently announced that Tata has purchased several
high-performance computing, visualization and storage solutions
from SGI to improve the design, engineering and manufacture of its
passenger cars and commercial vehicles. Also, a separate release
reported that NASA Goddard's recent implementation of CXFS-which
enables any server to access data at direct connect speeds-has
improved performance in production processing by a factor of four.
These and other SGI storage customer press releases can be found
at http://www.sgi.com/newsroom
New Developer Programs and Alliances
The company is also launching a series of new alliances and new
programs targeted at helping SGI developers bring powerful new
storage solutions into the marketplace. These include increased
porting and technical assistance for storage solutions on both the
IRIX and Linux platforms.
In a separate release, SGI announced an OEM reseller agreement
with AppIQ. SGI will OEM components of AppIQ's standards-based SAN
management technology. SGI will also market AppIQ's complete
enterprise solution suite to provide support for heterogeneous
operating systems and storage environments. The alliance between
SGI and AppIQ will help customers manage their SANs more
effectively and efficiently.
SGI also recently announced plans to integrate the SGI SAN
Server(TM) family and CXFS with systems and software from
Discreet. The resulting solution will enable film mastering and
video production facilities to improve their productivity, manage
multiple jobs simultaneously, share content between digital
content creation seats on a variety of operating systems, and most
importantly, optimize the time of their creative talent.
Other key alliances include relationships with Hitachi Ltd. and
LSI Logic Storage Systems. Hitachi and SGI collaborate to extend
the multiplatform capabilities of CXFS. Hitachi also incorporates
CXFS into its SAN solutions to provide data sharing. SGI re-
markets LSI Logic's RAID array technology. The collaboration with
LSI has resulted in powerful solutions for managing complex data
in high-performance computing environments.
SGI storage solutions have proven valuable where the growth of
data is exceeding boundaries of conventional storage technology.
Among the company's achievements in managing data management
challenges are supporting a 70TB single file system and over a
petabyte of data managed on a single site, delivering 12GBs of I/O
to a single system and accomplishing a 10TB/hour record backup and
7.9TB/hour restore.
Availability and Support
SGI InfiniteStorage Solutions are available directly from SGI or
through the SGI Solution Providers worldwide. Complementing
InfiniteStorage are SGI Technology Solutions, that custom design,
deliver and support storage solutions, and SGI Managed Services
that provides comprehensive installation and configuration
services to provide immediate return on storage investment. SGI's
SAN Review board, comprised of the company's top storage experts,
provides customers and partners an unparalleled depth of expertise
in real world, high-performance SAN design and implementation.
With InfiniteStorage, SGI is changing the rules in network storage
by delivering hardware and software solutions specifically
developed for the unique and demanding needs of data-intensive
enterprises. The company's commitment to innovation enables
timely availability of new technology, investment protection for
existing technology, and a thriving partner community. SGI offers
customers a complete family of network storage systems and
software that enables customers to match solutions to their data-
intensive enterprise needs while providing scalable capacity,
management and performance in a cost effective architecture.
SGI, also known as Silicon Graphics, Inc. -- whose June 28, 2003
balance sheet shows a total shareholders' equity deficit of about
$178 million -- is the world's leader in high-performance
computing, visualization and storage. SGI's vision is to provide
technology that enables the most significant scientific and
creative breakthroughs of the 21st century. Whether it's sharing
images to aid in brain surgery, finding oil more efficiently,
studying global climate or enabling the transition from analog to
digital broadcasting, SGI is dedicated to addressing the next
class of challenges for scientific, engineering and creative
users. SGI was named on FORTUNE magazine's 2003 list of "Top 100
Companies to Work For." With offices worldwide, the company is
headquartered in Mountain View, Calif., and can be found on the
Web at http://www.sgi.com
SK GLOBAL: US Trustee Unable to Appoint Creditors' Committee
------------------------------------------------------------
In spite of the U.S. Trustee's attempt to appoint an official
committee of unsecured creditors by contacting SK Global America
Inc.'s 20 largest creditors, an insufficient number of creditors
indicated their willingness to serve as Committee members.
Accordingly, U.S. Trustee Carolyn Schwartz informs the Court that
no Creditors' Committee is appointed in the Debtor's bankruptcy
case at this time. (SK Global Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
SMTEK INT'L: Undertakes Private Placement of Preferred Shares
-------------------------------------------------------------
SMTEK International, Inc. (Nasdaq:SMTIC), a provider of
electronics manufacturing services, announced the placement of
250,000 shares of the Company's Series A Preferred Stock for
$500,000 to an independent third-party investor that is also a
customer of the Company.
The preferred shares have an initial liquidation preference of
$3.00 per share, and a dividend yield of 9%. The investor will
have the right to immediately convert each share of Series A
preferred stock into one share of the Company's common stock. The
proceeds of the offering will be used for general working capital
purposes.
Headquartered in Moorpark, California, SMTEK International, Inc.
is an electronics manufacturing services provider serving original
equipment manufacturers in the industrial instrumentation,
medical, telecommunications, security, financial services
automation, aerospace and defense industries. We provide
integrated solutions to original equipment manufacturers across
the entire product life cycle, from design to manufacturing to
end-of-life services, for the worldwide low to medium volume, high
complexity segment of the electronics manufacturing services
industry. We have five operating facilities, with locations in
Moorpark, California; Santa Clara, California; Marlborough,
Massachusetts; Fort Lauderdale, Florida; and the Ayuttya Province
in Thailand.
* * *
Liquidity and Capital Resources
In its Form 10-Q filed on February 10, 2003, the Company reported:
"Our primary sources of liquidity are our cash and cash
equivalents, which amounted to $628,000 at December 31, 2002,
and amounts available under our bank lines of credit, which
provided approximately $1.8 million of availability in excess of
current borrowings at December 31, 2002, after giving effect to
the amendment to the credit agreement. During the six months
ended December 31, 2002, cash and cash equivalents decreased by
$188,000. This decrease resulted from purchases of equipment of
$907,000 and financing activities of $61,000, partially offset
by cash provided by operations of $815,000.
"Net cash provided by operating activities of $815,000 for the
six months ended December 31, 2002 was attributable primarily to
facility consolidation costs of $1.8 million, a decrease in
inventories of $1.2 million and an increase in accrued liabilities
of $1.8 million offset by our net loss before depreciation and
amortization of $3.8 million.
"Net cash used in investing activities was $907,000 for the six
months ended December 31, 2002 compared to $2.8 million for the
six months ended December 31, 2001. The cash used was for the
purchase of capital expenditures mainly for production purposes.
"Net cash used in financing activities was $61,000 for the six
months ended December 31, 2002 compared to net cash provided by
financing activities of $1.6 million for the six months ended
December 31, 2001. At December 31, 2002, we had approximately
$1.8 million available to borrow under our bank lines of credit,
after giving effect to the amendment to the credit agreement.
"At December 31, 2002, borrowings under our working capital
facility for our domestic operating units amounted to $5.2
million. This credit facility is collateralized by accounts
receivable, inventory and equipment for our domestic operating
units and matures September 25, 2003. At December 31, 2002, the
weighted average interest rate on the line of credit was 4.91%.
The line of credit agreement contains certain financial
covenants, with which we were not in compliance at December 31,
2002. However, the terms of our line of credit have been
amended as of February 5, 2003. Under the new terms, our line
of credit is at $8.5 million, bears interest at either the
bank's prime rate (4.25% at December 31, 2002) plus 1.00% or a
Eurodollar-base rate (1.37% at December 31, 2002) plus 3.75%,
and the covenants have been amended. We are currently and
expect to be in compliance with the amended bank covenants. Our
available borrowing capacity as of December 31, 2002, after
giving effect to the amendment, was approximately $1.8 million.
"In addition, during fiscal 2002 we borrowed $1.6 million on our
equipment line of credit to finance our capital expenditures.
This advance has a maturity date of October 24, 2006. At
December 31, 2002, the balance outstanding was $945,000 and the
weighted average interest rate was 4.87%. Under the amended
credit facility terms, interest is at either the bank's prime
rate plus 1.00% or at a Eurodollar-base rate plus 3.75%.
Additional advances under our equipment line of credit will not
be available to us until a review by the bank at a future date.
"We also have a credit facility agreement with Ulster Bank
Markets for our Northern Ireland operating company. This
agreement consists of an accounts receivable revolver, with
maximum borrowings equal to the lesser of 75% of eligible
receivables or 2,500,000 British pounds sterling (approximately
$4,025,000 at December 31, 2002), of which 500,000 British
pounds sterling (approximately $805,000 at December 31, 2002)
consists of an overdraft facility, and bears interest at the
bank's base rate (4.00% at December 31, 2002) plus 2.00%. At
December 31, 2002, borrowings outstanding under this credit
facility amounted to approximately $2.9 million, of which
the overdraft facility was fully utilized, and there was nominal
available borrowing capacity. The credit facility agreement
matures on November 30, 2003.
"We also have a mortgage note secured by real property at
Northern Ireland with an outstanding balance of $732,000 at
December 31, 2002. At December 31, 2002, we were in arrears and
we are currently seeking to negotiate a payment plan.
"We anticipate that additional expenditures of as much as
$125,000 may be made during the remainder of fiscal 2003,
primarily to improve production efficiency at our subsidiaries.
A substantial portion of these capital expenditures is expected
to be financed by our line of credit or other notes/leases
payable.
"At December 31, 2002, the ratio of current assets to current
liabilities was 0.9 to 1.0 compared to 1.3 to 1.0 at June 30,
2002. At December 31, 2002, we had $2.9 million of negative
working capital compared to $5.9 million of working capital at
June 30, 2002. At December 31, 2002, we had long-term borrowings
of $4.6 million compared to $10.1 million at June 30, 2002. The
decreases in the working capital and long-term debt is due to the
reclassification of our domestic line of credit of $5.2 million
from long-term debt to current liabilities as this matures in less
than 12 months. In addition, contributing to the decrease in
working capital is an increase in lease reserves recognized in the
second quarter of 2003.
"We have experienced and may continue to experience an adverse
effect on our operating results and our financial condition,
especially if current economic conditions continue for an extended
period of time, despite our cost reduction measures and efficiency
improvements at our operating subsidiaries. We are focused on the
consolidation and streamlining of operations so as to reduce our
excess capacity to better match market conditions. Recent actions
taken and strategies being pursued are as follows:
- Transitioning the San Diego facility and evaluating
further opportunities of consolidation, transition or
sale of other facilities.
- Continuing focus on cost reductions related to pertinent
production levels and reductions in administrative costs.
- Focusing our marketing efforts in the solicitation of
customers in nonecomically affected industries.
"We remain dependent on our lines of credit for operations and
growth. Our domestic line of credit agreement is set to mature
in September 2003. We can provide no assurance that the
agreement will be renewed or that any renewal would occur on
commercially reasonable terms. We may have to explore alternative
financing if the bank does not renew our line of credit.
"We may require additional financing to satisfy our debt
obligations. However, there can be no assurance that we will be
able to obtain additional debt or equity financing when needed,
or on acceptable terms. Any additional debt or equity financing
may involve substantial dilution to our stockholders, restrictive
covenants or high interest costs. The failure to raise needed
funds on sufficiently favorable terms could have a material
adverse effect on our business, operating results, and financial
condition.
"Although management believes our cash resources, cash from
operations and available borrowing capacity on our working
capital lines of credit are sufficient to fund operations, if we
cannot refinance the domestic line of credit upon its maturity
or find alternative financing/funding of this obligation, there
is no assurance that we will continue as a going concern."
SO. CALIF. EDISON: Fitch Ups Credit Ratings over CPUC Ruling
------------------------------------------------------------
Fitch Ratings has raised the credit ratings of Southern California
Edison as follows: first mortgage bonds to 'BBB-' from 'BB';
unsecured debt to 'BB' from 'BB-'; and, preferred securities to
'B+' from 'B'. The Rating Outlook is Positive. Fitch also affirmed
Edison International credit ratings as follows: senior unsecured
debt 'B' and trust preferred securities 'CCC'. The Rating Outlook
for all EIX securities is Positive.
The upgrade of SCE's ratings reflects a recent California Supreme
Court judgment supporting the California Public Utilities
Commission settlement agreement. This court order removes a major
uncertainty for SCE. The CPUC settlement enabled SCE to recover
power procurement costs incurred during the western energy crisis
of 2000-2001. From Sept. 1, 2001 through Aug. 1, 2003, SCE
recovered through rates $3.6 billion of deferred energy costs,
enabling SCE to cure delinquencies and repay debt. Fitch also
notes the improved regulatory environment at the CPUC in evidence
since early 2002.
Despite the turnaround in SCE's business and financial condition,
Fitch's policy constrains SCE's credit ratings due to the weak
consolidated financial profile of its parent, Edison
International, and the ongoing stress at EIX's unregulated power
generation subsidiary, Mission Energy Holdings. The Positive
Rating Outlook for SCE reflects Fitch's view that financial
distress of the Mission Energy Holdings group is unlikely to
further erode the financial standing of EIX or SCE, and that EIX
and SCE's credit ratings have the potential for improvement,
pending resolution of liquidity/debt restructuring issues at MEH
and its subsidiaries.
In Fitch's view, the current low EIX ratings fully discount the
financial problems and excess leverage of the MEH group. The
ratings affirmation and Positive Rating Outlook for EIX consider
the expected resumption of dividends from SCE to it parent in 2003
and the relatively low debt leverage of EIX parent and SCE. Fitch
views some $9 billion of debt (including roughly $3 billion of
off-balance sheet obligations), representing greater than 60% of
EIX's consolidated debt, at MEH and the various MEH subsidiaries
as effectively non-recourse to EIX.
EIX faces looming debt repayments within the MEH group of $1.2
billion later this year and $1.9 billion in 2004. EIX management
has announced ongoing negotiations to restructure MEH's debt
burden. Of the $1.2 billion of debt maturing in 2003, $275 million
is due Sept. 16, 2003 at MEH subsidiary Edison Mission Energy and
$911 million is due Dec. 11, 2003 at EME's Edison Mission Midwest
Holdings subsidiary. Bankruptcy of EMMH, MEH, and EME cannot be
ruled out. However, for EIX and SCE, these concerns are mitigated
by: i) CPUC-mandated affiliate conduct rules that require the
business affairs of SCE to be separated from those of its parent
and affiliates and require EIX to safeguard the financial
integrity of the utility; ii) the low incentive for EIX to invest
material incremental capital to rescue MEH; and, iii) the
effective separation of MEH within the Edison International group.
Importantly, there are no inter-company guarantees or cross
defaults between MEH or its subsidiaries and EIX, SCE and Edison
Capital.
While the consolidated EIX financial condition including the MEH
group is substantially over-leveraged, when the MEH group is
deconsolidated from EIX financials for analytical purposes, EIX's
pro forma latest-twelve-month trailing credit ratios appear
meaningfully healthier. On a pro forma basis, adjusted debt-to-
EBITDA, adjusted debt as a percentage of total capital and
adjusted EBITDA-to-interest are 2.5 times (x), 53% and 3.6x,
respectively, compared to consolidated ratios (including MEH) of
4.8x, 69% and 2.3x respectively.
Completion of the recovery and amortization of SCE's accumulated
power procurement costs in July 2003 eliminates any remaining
regulatory barrier to dividend payments from SCE to its parent,
EIX. Restrictions on SCE's dividends to EIX under the terms of the
settlement agreement with the CPUC pushed SCE's common equity
ratio as a percentage of capital, based on its regulatory books,
to the low 60% range at June 30, 2003. SCE is required by the CPUC
to maintain a 48% equity ratio as a percentage of regulatory
capital and cannot earn an equity return on retained equity over
48% of capital. Consequently, SCE is expected to reduce its equity
to this level by paying a cash dividend of approximately $1
billion to EIX by year-end 2003. Fitch adjusts SCE's credit ratios
to reflect this expected dividend and equity reduction. EIX
management has said it will use the dividend proceeds to provide
for parent liquidity needs and initiate a common stock dividend
pending approval by its Board of Directors.
On Aug. 21, 2003 the California Supreme Court ruled that the
CPUC's settlement and stipulated judgment did not violate
provisions of AB 1890, the Bagley-Keene Act or Public Utilities
Code section 454. The Supreme Court ruling materially aids SCE and
EIX credit quality. The Ninth Circuit Court of Appeals has already
upheld the lower court ruling on matters of federal law, and, with
the California Supreme Court ruling in hand, is expected to reject
a pending appeal by TURN. The appellant, TURN, has filed a
petition for rehearing at the California Supreme Court and may
file further appeals; however, there is now a very remote
likelihood that the settlement will ultimately be overturned.
Continued improvement in the California regulatory environment is
demonstrated by the CPUC's implementation of reasonable mechanisms
for power cost recovery in 2003, its consistent legal defense of
its settlement agreement with SCE, and the recent constructive
settlement reached by the CPUC Staff, Pacific Gas and Electric and
PG&E Corp. While the California political environment has its
challenges, Fitch believes that the CPUC has made significant
progress toward the restoration of a reasonable regulatory regime.
Factors that would result in positive ratings actions for EIX
include the resolution of MEH debt restructuring issues.
Conversely, a management commitment of further significant capital
from EIX to support the MEH group, albeit unlikely in Fitch's
view, would be among the factors that would cause Fitch to take
negative ratings actions. SCE's ratings are constrained by Fitch's
notching policy; however, further positive ratings actions at SCE
could result from improvement in EIX's consolidated credit ratings
and/or reduced uncertainty about the resolution of the financial
problems of the MEH group. In addition, a turn for the worse in
California's regulatory/political environment would have negative
ratings ramifications for both SCE and EIX.
Edison International is a parent holding company. Its wholly owned
subsidiaries include the utility Southern California Edison and
Edison Mission Group. EMG's direct subsidiaries include Edison
Capital and Mission Energy Holding Company. MEH was formed in 2001
and owns 100% of the capital stock of Edison Mission Energy. EME
is a holding company whose operating subsidiaries include Midwest
Generation, EME Homer City, Edison Mission Energy Funding, also
known as Big Four, and First Hydro.
SPIEGEL GROUP: Soliciting Offers to Acquire Newport News Unit
-------------------------------------------------------------
The Spiegel Group (Spiegel, Inc.) announced that, as part of its
ongoing restructuring process, it has directed Miller Buckfire
Lewis Ying & Co. to solicit parties who may be interested in
acquiring its wholly owned subsidiary, Newport News, Inc.
Bill Kosturos, interim chief executive officer and chief
restructuring officer of The Spiegel Group said, "The decision to
gauge market interest in one of the company's assets, in this case
Newport News, is a normal part of a chapter 11 proceeding. We will
evaluate the level of interest, taking it into consideration as we
work to develop a plan of reorganization."
Miller Buckfire Lewis Ying & Co. is advising the company on this
potential transaction. All parties interested in learning more
about this transaction should direct their inquiries to Stuart
Erickson, Principal at Miller Buckfire Lewis Ying & Co. (phone
212-895-1812).
Newport News is a dual-channel, direct marketer of moderately
priced women's fashions, providing customers with an informative
and rewarding shopping experience through catalogs and an e-
commerce site -- http://www.newport-news.com Delivering on its
brand promise of "real style, real value," Newport News fulfills
the modern woman's desire for versatile, on- trend designs at
easily affordable prices.
The Spiegel Group is a leading international specialty retailer
marketing fashionable apparel and home furnishings to customers
through catalogs, specialty retail and outlet stores, and e-
commerce sites, including eddiebauer.com, newport-news.com and
spiegel.com. The Spiegel Group's businesses include Eddie Bauer,
Newport News and Spiegel Catalog. Investor relations information
is available on The Spiegel Group Web site at
http://www.thespiegelgroup.com
STARWOOD HOTELS: Names Allison Reid VP for Investor Relations
-------------------------------------------------------------
Starwood Hotels & Resorts Worldwide, Inc. (NYSE:HOT) announced the
appointment of Allison Reid as Vice President, Investor Relations.
Reid will be responsible for developing and executing all aspects
of Starwood's investor relations program targeted to shareholders,
analysts and the investment community. She will report to Dan
Gibson, the company's Senior Vice President of Corporate Affairs.
A seasoned veteran, Reid brings to her new role more then 14 years
of hospitality and finance related experience. She most recently
served as the company's Vice President of Owner Relations. Prior
to joining Starwood Hotels & Resorts in August 2000, Reid worked
for Interstate Hotels and Resorts in various finance related
positions. Prior to Interstate Hotels, she was with ITT Sheraton
Corporation, where she began her career in 1988.
"Allison's success in leading Starwood's owner relations efforts,
paired with her previous hospitality and finance experience makes
her the perfect choice," says Gibson. "Her strong relationships
with real estate developers, hotel owners and key hospitality
insiders will play an important role in Starwood's investor
relations strategy."
Reid graduated from Bryant College with a BS in both Accounting
and Hotel & Institutional Management. She is based out of
Starwood's corporate headquarters in White Plains, NY and resides
in Connecticut with her family.
Starwood Hotels & Resorts Worldwide, Inc. (Fitch BB+ Convertible
Debt Rating, Negative) is one of the leading hotel and leisure
companies in the world with 740 properties in more than 80
countries and 105,000 employees at its owned and managed
properties. With internationally renowned brands, Starwood is a
fully integrated owner, operator and franchisor of hotels and
resorts including: St. Regis, The Luxury Collection, Sheraton,
Westin, Four Points by Sheraton, W brands, as well as Starwood
Vacation Ownership, Inc., one of the premier developers and
operators of high quality vacation interval ownership resorts. For
more information, visit http://www.starwood.com
SUNBLUSH TECHNOLOGIES: Sells 50% Interest in Access Flower
----------------------------------------------------------
The SunBlush Technologies Corporation (SunBlush) has finalized the
sale of it's 50% interest in Access Flower Trading Inc.
The proceeds from this sale will be used to pay down its creditors
and assist in the reorganization of the Company.
The Ariadne Group of Australia have just advised the Company that
they have purchased by a private treaty the Class E Preferred
shares previously held by the Ontario Flower Growers.
The Company has scheduled a series of Extraordinary General
Meetings to be held in Vancouver at 10:30AM, October 14, 2003 to
obtain shareholder approval of the various aspects of the planned
reorganization.
The SunBlush Technologies Corporation -- whose June 2003 balance
sheet shows a working capital deficit of about $3 million -- is a
leading provider of life extension technology to the high growth
Fresh Produce and Flower Industry and uses its technological
leadership to pursue licensing opportunities. The Company's
patented technologies naturally place produce in a state of
hibernation while it is being shipped, and extends the shelf life
of fresh produce, flowers and juices, thereby enabling economic
distribution of premium quality vine-ripened fruit and vegetables.
The Company's network of R&D relationships, which include the
University of British Columbia, Bar Ilan University, and the
University of Newcastle New South Wales, focuses on building
features that will appeal to SunBlush's customers in order to gain
a competitive edge in the marketplace. The company continues to
pursue licensing opportunities through grower/processor channels
as a way of maximizing the distribution for its technologies.
TRITEAL CORP: SEC Terminates Probe into Reports Restatement
-----------------------------------------------------------
TriTeal Corp. (PinkSheets:TEAL) announced that the Securities and
Exchange Commission has terminated its investigation into matters
concerning the restatement of the company's financial statements
for fiscal years ending March 31, 1996 and 1997 and quarters
ending June 30, 1997 and Sept. 30, 1997, and that no enforcement
action has been recommended.
The company will now proceed to obtain Bankruptcy Court approval
of a record date for a pro-rata cash distribution to holders of
the company's Common Stock. Pursuant to the company's Plan of
Liquidation, which was approved Dec. 7, 1999 by the United States
Bankruptcy Court for the Southern District of California, holders
of the company's Common Stock will be entitled to receive a pro-
rata distribution of remaining cash after all claims and expenses
have been resolved and paid in accordance with the Plan of
Liquidation. In order to receive such pro-rata distribution, each
owner of the company's Common Stock will be required to surrender
his/her stock certificates evidencing such ownership of the
company's Common Stock.
The company estimates that the final cash distribution will range
from $0.41 to $0.46 per share of Common Stock; however, at this
time, the actual timing and amount of such distribution remains
undetermined.
TWINLAB CORP: Retains Weil Gotshal as Bankruptcy Counsel
--------------------------------------------------------
Twinlab Corporation and its debtor-affiliates are seeking approval
of their application to employ Weil, Gotshal & Manges LLP as their
attorneys in connection with the commencement and prosecution of
the Company's chapter 11 cases.
The Debtors report that Michael P. Kessler, Esq., and Paul M.
Basta, Esq., members of Weil Gotshal, and Gary D. Ticoll, Esq., an
associate of Weil Gotshal, will primarily lead this engagement.
The Debtors selected Weil Gotshal as their attorneys because of
the firm's knowledge of the Debtors' businesses and financial
affairs and its extensive general experience and knowledge, and in
particular, its recognized expertise in the field of debtors'
protections and creditors' rights and business reorganizations
under chapter 11 of the Bankruptcy Code.
In its capacity as counsel, the Debtors expect Weil Gotshal to:
a. take all necessary action to protect and preserve the
estates of the Debtors, including the prosecution of
actions on the Debtors' behalf, the defense of any
actions commenced against the Debtors, the negotiation
of disputes in which the Debtors are involved, and the
preparation of objections to claims filed against the
Debtors' estates;
b. prepare on behalf of the Debtors, as debtors in
possession, all necessary motions, applications,
answers, orders, reports, and other papers in connection
with the administration of the Debtors' estates;
c. negotiate and prepare on behalf of the Debtors a plan of
reorganization and all related documents thereto; and
d. perform all other necessary legal services in connection
with the prosecution of these chapter 11 cases.
Weil Gotshal's current customary hourly rates are:
members and counsel $375 to $725 per hour
associates $250 to $440 per hour
paraprofessionals $50 to $175 per hour
Headquartered in Hauppauge, New York, Twinlab Corporation
manufactures and markets high quality, science-based, nutritional
supplements. The Company filed for chapter 11 protection on
September 4, 2003 (Bankr. S.D.N.Y. Case No. 03-15564). Michael P.
Kessler, Esq., at Weil, Gotshal & Manges, LLP represents the
Debtors in their restructuring efforts.
TYCO INT'L: Will Publish Fourth Quarter Results on November 4
-------------------------------------------------------------
Tyco International Ltd. (NYSE: TYC, BSX: TYC, LSE: TYI) will
report fourth quarter results before trading begins on Tuesday,
November 4, 2003. The Company will hold a conference call for
investors at 8:30 am EST. The call can be accessed in three ways:
-- At the following Web site:
http://investors.tyco.com/medialist.cfm A replay of the
call will be available through November 14, 2003 at the
same Web site.
-- By telephone dial-in with the capability to participate in
the question and answer portion of the call. The telephone
dial-in number for participants in the United States is
(888) 276-0006. The telephone dial-in number for
participants outside the United States is (612) 326-0027.
Due to capacity limitations on the part of our
teleconference service provider, the number of lines
available is limited. If these lines have reached their
limit, investors will need to call the "listen-only" number
provided below.
-- By telephone dial-in to participate in a "listen-only"
mode. The telephone dial-in number for participants in the
United States is (800) 260-0718. The telephone dial-in
number for participants outside the United States is (612)
326-1000. The access code for all "listen-only" callers is
698012. Investors who do not intend to ask questions should
dial this number directly.
An audio replay of the conference call is scheduled to be
available at 3:30 pm on November 4, 2003 until 11:59 pm on
November 14, 2003. The dial-in number for participants in the
United States is (800) 475-6701. For participants outside the
United States the dial-in number is (320) 365-3844. The replay
access code for all callers is 698013.
Tyco International Ltd. is a diversified manufacturing and service
company. Tyco is the world's largest manufacturer and servicer of
electrical and electronic components; the world's largest
designer, manufacturer, installer and servicer of undersea
telecommunications systems; the world's largest manufacturer,
installer and provider of fire protection systems and electronic
security services; and the world's largest manufacturer of
specialty valves. Tyco also holds strong leadership positions in
disposable medical products, plastics and adhesives. Tyco operates
in more than 100 countries and had fiscal 2002 revenues from
continuing operations of approximately $36 billion.
* * *
As previously reported, Fitch Ratings affirmed its ratings on the
senior unsecured debt and commercial paper of Tyco International
Ltd., as well as the unconditionally guaranteed debt of its wholly
owned direct subsidiary Tyco International Group S. A., at
'BB'/'B', respectively. The Rating Outlook has been changed to
Stable from Negative. The ratings affect approximately $21 billion
of debt securities.
The change to Outlook Stable reflects Tyco's progress with respect
to reestablishing access to capital, addressing its liability
structure, implementing steps to improve operating performance,
and demonstrating cash generation despite a difficult economic
environment in a number of key end-markets. The impact of
fundamental favorable changes in Tyco's financial policies and
profile since late fiscal 2002 is constrained by economic weakness
in its markets, potential legal liabilities related to shareholder
lawsuits and SEC investigations, and the possibility, although
reduced, of further accounting charges and adjustments. The
ratings could improve over time as Tyco demonstrates more
consistent results and that it has put behind it the accounting
concerns that have obscured the transparency of its financial
reporting in the past.
UNITED AIRLINES: U.S. Bank Wants to Access Miami-Dade Proj. Fund
----------------------------------------------------------------
U.S. Bank National Association is the indenture trustee under a
Trust Indenture dated March 1, 2000 with Miami-Dade County
Industrial Development Authority. In this capacity and on behalf
of the holders of bonds issued pursuant to the Indenture, U.S.
Bank asks the Court to lift the automatic stay so it may exercise
its rights and remedies with respect to the funds on deposit in a
related project fund. U.S. Bank asserts that the deposited funds
are not the United Airlines Debtors' property.
On March 1, 2000, Miami-Dade County IDA issued $32,365,000 in
Miami-Dade County Industrial Development Authority Special
Facilities Revenue Bonds (United Airlines Inc. Project) Series
2000. Miami-Dade County deposited a portion of the proceeds
received from the sale of the Bonds into the Project Fund
established pursuant to the Indenture.
Pursuant to a loan agreement, Miami-Dade County loaned to the
Debtors the proceeds on deposit. The loaned amounts were to be
used to finance a portion of the cost of acquisition,
construction and improvement of certain facilities. The Debtors
are obligated to repay the loan, by among other things, making
payments sufficient to pay the principal and interest on the
Bonds. As security for repayment, Miami-Dade County pledged to
U.S. Bank all of its rights, title and interest in the Loan
Agreement and all amounts on deposit with or paid to U.S. Bank,
including the proceeds in the Project Fund. As of May 13, 2003,
the Project Fund contained $7,282,941.
Assuming that the Debtors have a property interest in the Project
Fund such that the deposits are deemed property of their estates,
U.S. Bank asserts that it, nevertheless, is entitled to relief
from automatic stay. The Debtors lack equity in the Project fund
and the deposited amounts cannot be, and in fact are not,
necessary for the Debtors' effective reorganization. U.S. Bank
points out that any rights the Debtors may have in the Project
Fund are derived from the Loan Agreement. The Debtors are
obligated to abide by the limitations imposed by the Loan
Agreement in the use of the deposited funds.
The Loan Agreement expressly states that U.S. Bank will "make
disbursements from the Project Fund to pay the Cost of the
Facilities, or to reimburse the Company . . . for other Costs of
the Facilities paid by the Company on or after sixty (60) days
prior to September 28, 1999." To the extent the Debtors even
have a property interest in the Project Fund, U.S. Bank asserts
that that interest is not the unfettered right to use the
deposited amounts for any purpose.
U.S. Bank also notes that it is entitled to pursue remedies in an
event of default. As a secured creditor, U.S. Bank is entitled
to foreclose on the collateral that it is holding, including the
Project Fund deposit. U.S. Bank reports that the Debtors have
failed to forward interest payments due on March 1, 2003. This
non-payment plus the Debtors' Chapter 11 filing constitute an
Event of Default. Thus, the Debtors cannot access the deposit
due to continuing default. The Debtors' Chapter 11 filing cannot
divest U.S. Bank of its rights under the Indenture. (United
Airlines Bankruptcy News, Issue No. 26; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
US AIRWAYS: Issues 1.3 Million Shares to Unsecured Creditors
------------------------------------------------------------
US Airways Group Inc. begins issuing 1.3 million shares of common
stock to its unsecured creditors in accordance with the company's
court-approved plan of reorganization. The distribution is the
first to be made to the company's unsecured creditors following
the airline's successful emergence from Chapter 11 on March 31,
2003.
The distribution of common stock to unsecured creditors follows
the vesting on July 31, 2003, of 50 percent of the stock allocated
to employees under the company's Reorganization Plan. Related to
that distribution, US Airways completed a private placement of
approximately 5.0 million shares of common stock with Aviation
Acquisition, L.L.C., OCM Principal Opportunities Fund II, L.P.,
and Goldman, Sachs & Co., which represent the shares that were
withheld by the company in order to pay federal, state, and local
taxes due on the value of the shares vesting. The placement
closed on Aug. 28, 2003, at a purchase price of $7.34 per share,
which is consistent with the common share valuation paid by the
Retirement Systems of Alabama when it made its equity investment
in the company this spring.
US Airways continues to explore options for listing its new stock
on a national exchange.
US ESCROW SERVICES: Case Summary & 20 Largest Unsec. Creditors
--------------------------------------------------------------
Debtor: U.S. Escrow Services, Inc.
7860 E. Berry Place
Suite 202
Englewood, Colorado 80111
Bankruptcy Case No.: 03-27147
Chapter 11 Petition Date: August 28, 2003
Court: District of Colorado (Denver)
Judge: Elizabeth E. Brown
Debtor's Counsel: Jeffrey Weinman, Esq.
Weinman & Associates, PC
730 17th St.
Suite 240
Denver, CO 80202
Tel: 303-572-1010
Type of Business: For 21 years, U.S. Escrow has provided full-
service accounts receivable management,
including accounts receivable financing,
billing, credit reports and-through a wholly
owned subsidiary-commercial collection
services. See http://www.factors.net/
See, also, http://www.checklockbox.com/
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Finke, Keith $47,758
Greenwood Park East $5,999
Mahoney Coppenrath & Jeffe $4,855
Qwest Communication $1,520
United Healthcare $1,297
West Group Law $852
Copy Vend $728
The Schneider Group $617
AFLAC Insurance $593
Mitsubishi Credit $547
Pitney Bowes $533
Distinctive Solutions $525
Pinnacol Insurance $438
T-Mobile $348
Imagistics $332
Rampart $320
US Life Insurance $238
Inovus $225
Airborne Express $216
Federal Express $212
US FLOW: Gets Nod to Tap Wardrop & Wardrop as Bankruptcy Counsel
----------------------------------------------------------------
US Flow Corporation and its debtor-affiliates sought and obtained
approval from the U.S. Bankruptcy Court for the Western District
of Michigan to retain and employ Wardop & Wardop, PC as counsel in
these chapter 11 cases.
Debtors are confident on Wardrop & Wardrop's extensive experience
and knowledge in the field of debtors' and creditors' rights and
business reorganizations under chapter 11 of the Bankruptcy Code.
In its capacity, Wardrop & Wardrop will:
a. advise Debtors of their rights, powers, and duties as
debtors and debtors in possession;
b. take all necessary action to protect and preserve the
estates of Debtors, including the prosecution of actions
on Debtors' behalf, the defense of actions commenced
against Debtors, the negotiation of disputes in which
Debtors are involved, and the preparation of objections
to claims filed against the estates;
c. assist in preparing on behalf of Debtors all necessary
motions, applications, answers, orders, reports, and
papers in connection with the administration of Debtors'
estates;
d. assist in presenting on behalf of Debtors the proposed
plan of reorganization and all related transactions and
any related revisions, amendments, etc.; and
e. perform such other legal services in connection with
these chapter 11 cases as may be requested by Debtors
from time to time.
Robert F. Wardrop II, a member of Wardrop & Wardrop, PC reports
that his firm will charge the Debtors in its current standard
hourly rates. The professionals principally designated in this
engagement are:
Robert F. Wardrop II $275 per hour
Thomas M. Wardrop $250 per hour
Mary Saur Cohn $200 per hour
Headquartered in Grand Rapids, Michigan, US Flow Corporation filed
for chapter 11 protection on August 12, 2003 (Bankr. W.D. Mich.
Case No. 03-09863). Robert F. Wardrop, II, Esq., at Wardrop &
Wardrop, P.C., represent the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed $69,056,000 in total assets and $123,461,000
in total debts.
USG CORP: Asks Court to Waive Local Rule 3007-1 Requirement
-----------------------------------------------------------
USG Corporation and its debtor-affiliates ask the Court to waive
certain requirements and restrictions imposed by Rule 3007-1 of
the Local Rule of Bankruptcy Practice and Procedure for the
District of Delaware.
Specifically, the Debtors ask the Court to:
(a) waive the limitations on the number of claims that may be
the subject of an omnibus objection so that the Debtors
may consolidate their objections to those claims that do
not meet threshold product identification requirements;
and
(b) waive the requirement that the Debtors must file all
substantive objections to a particular claim in a single
objection, so that the Court may first address threshold
product identification objections for hundreds of claims
without requiring the Debtors to raise all other
objections.
To recall, through an order dated May 3, 2002, the Court required
asbestos property damage claimants to file specialized claim
forms wherein they must provide basic information and
documentation supporting their allegations that the Debtors'
asbestos-containing products were present in the buildings that
the claimants put at issue. Where product identification is not
provided, the Debtors will object to the claim. The Court
determined that eight months was adequate time to provide this
information. The Debtors have received over 1,000 property
damage claim forms, many of which either have no information
supporting product identification or purport to provide product
identification information but is inadequate.
Now that potential asbestos property damage claimants have been
given adequate time in which to produce the basic identification
information, the Debtors seek an orderly method by which to
challenge claims not adhering to the requirement.
According to Daniel J. DeFranceschi, Esq., at Richards, Layton &
Finger, P.A., in Wilmington, Delaware, after the omnibus product
identification objection is resolved, the Debtors would then
propose a case management order for objections to the remaining
asbestos property damage claims. The proposed order would
include a timetable for production of certain documents relevant
to other threshold liability and damages issues. These issues
include res judicata or collateral estoppel based on prior
litigation by claimants, expiration of statutes of limitation and
repose, lack of evidence of asbestos property damage, and failure
to opt out of classes in which claimants were members.
Mr. DeFranceschi explains that Local Rule 3007-1 does not address
situations where the Debtors have a common, but substantive and
dispositive, objection to multiple claims like that pertaining to
product identification. Thus, Mr. DeFranceschi points that under
these circumstances, it would be pertinent to waive Local Rule
3007-1 to ensure an efficient and orderly administration of the
Debtors' estate.
Mr. DeFranceschi tells the Court that some asbestos property
damage claims lacking in adequate documentation are technically
without any supporting documentation. Mr. DeFranceschi
illustrates that some claimants attached to their claim forms
photographs of what they assert to be asbestos-containing
products. However, Mr. DeFranceschi argues that these
photographs do not provide any evidence that the products
depicted either contain asbestos or were manufactured by the
Debtors.
Local Rule 3007-1 contains certain limitations on the filing and
the scope of substantive claim objections that would preclude the
Debtors from objecting to all claims lacking adequate product
identification information. Moreover, Local Rule 3007-1 requires
that a debtor assert all of its substantive objections to a claim
at one time. That is, the Debtors could not file an omnibus
objection based on lack of product identification and later file
another objection based on the expiration of a statute of
limitations or the lack of evidence of asbestos-related property
damage.
Mr. DeFranceschi relates that the Debtors expect to have
substantive objections on one or more grounds to many of the
claims that lack adequate product identification. If allowed to
challenge product identification first, however, many of these
further objections will be unnecessary. On the other hand,
requiring the Debtors to assert all these objections at this
point would make the process of resolving the property damage
claims significantly more expensive and inefficient.
Property Damage Committee Objects
The Official Committee of Asbestos Property Damage Claimants
wants the Debtors' request denied. The Committee asserts that it
is unfair for the claimants to keep responding to layer upon
layer of objections from the Debtors.
The Committee explains that Local Rule 3007-1 fairly and
equitably takes into consideration and balances the interest of
claimants in having their claims adjudicated in a fair manner and
the interest of the estate in efficiently adjudicating a large
number of objections. The Committee says that instead of
complying with the Local Rule requirements, the Debtors continue
to be heavy-handed with the claimants. The Committee contends
that the Debtors are seeking relief from a rule designed to
prevent abuse towards the claimants during the claims objection
process.
Furthermore, the Committee points that the Debtors chose to file
for Chapter 11 protection in the District of Delaware and should
therefore abide by its local rules and not to disregard those
rules that do not fit into their litigation strategy. The
Committee also argues that the Debtors have not shared a copy of
their proposed case management order with the Committee and have
not contacted its counsel to discuss the parameters of the order.
Thus, the Committee believes that the Debtors' actions "patently
contradict their words." The Committee says that the Debtors'
failure to establish a dialogue concerning the resolution of the
property damage objections in these cases "cannot be the most
efficient and orderly administration of the Debtors' estates."
(USG Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
VICWEST: Court-Approved CCAA Plan to be Implemented Tomorrow
------------------------------------------------------------
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 expects that its plan of compromise and reorganization
pursuant to the CCAA, which was approved by the Ontario Superior
Court of Justice on August 14, 2003, will be implemented on
September 12, 2003. Vicwest's senior subordinated notes, which are
currently listed on the TSX Venture Exchange under the symbol
MGT.DB, will cease trading at the close of business on the
business day immediately prior to the implementation of the Plan.
Vicwest, with corporate offices in Oakville, Ontario, is Canada's
leading manufacturer of metal roofing, siding and other metal
building products.
WEIRTON STEEL: Court Approves Key Employee Retention Program
------------------------------------------------------------
U.S. Bankruptcy Court Judge Friend allows Weirton Steel
Corporation to implement the Retention Program and make the
required payments but only subject to, pursuant to and in
accordance with the Final DIP Financing Order, as may be amended
or supplemented from time to time.
The Retention Program is comprised of three separate plans:
A. The Stay Bonus Plan
The Stay Bonus Plan is designed to retain key management
personnel and critical skill employees during the pendency of
Weirton's Chapter 11 case. The Stay Bonus Plan includes nine
individuals divided into three tiers.
An employee in the Stay Bonus Plan will be eligible for a
total stay bonus payment ranging from 45% to 50% of his
current base salary. The Stay Bonus Payment will be earned
in four installments:
-- 25% paid upon Court approval of the Retention Program;
-- 25% paid on the sixth-month anniversary of the Retention
Program;
-- 25% paid on the 12th-month anniversary of [Weirton's
Petition Date]; and
-- 25% paid upon confirmation of the Debtor's
Reorganization Plan.
The entire unearned and unpaid portion of each covered
employee's Stay Bonus Payment will be earned and is payable
on the earlier to occur of the effective date of a confirmed
Chapter 11 Plan or the closing of a sale of all or
substantially all of the Debtor's assets. The right of each
covered employee to receive each installment of the Stay Bonus
Payment will be based solely on the employee's continued
employment with the Debtor as of the date each Stay Bonus
Payment installment vests and becomes payable on the
applicable Payment Date, Plan Effective Date, or Sale Closing
Date, as the case may be.
In the event of an employee's death, disability, termination
for cause, or voluntary resignation, the employee will forfeit
any remaining or unpaid Stay Bonus Payment. Any covered
employee who is involuntarily terminated, not for cause, prior
to any specified Payment Date and prior to a Plan Effective
Date and a Sale Closing Date will receive a pro rata payout of
his Stay Bonus Payment for the portion of the stay period
during which the employee was employed. Employees who are not
employed by Weirton at the time the Court approves the
Retention Plan will be entitled to payments under the Stay
Bonus Plan on a pro rata basis at the management's sole
discretion.
The estimated maximum amount of Stay Bonus Payments for a base
of nine key employees is $666,000, or an average of $74,000
per eligible individual.
The Stay Bonus Plan will substitute and supersede any
prepetition retention benefits that otherwise would be
applicable to any of the Debtor's key employees pursuant to
contract or otherwise. All employees participating in the
Stay Bonus Plan must, by written waiver and release, forfeit
any rights or entitlements with respect to retention-type
benefits that the employee may have at law or under any prior
employment or retention agreements, or Company programs.
B. Severance Plan
Before the Petition Date, the Debtor did not have an
established severance program for salaried employees.
Instead, severance was contractually provided to several key
employees pursuant to employment agreements in existence as
of the Petition Date.
Under the Severance Plan, the nine key employees will be
entitled to payment of severance benefits ranging from six to
24 months of their base salary, plus the cost of current
health benefits for the duration of the severance period.
The Severance Plan provides for severance benefits only to:
(a) those key employees who are involuntarily terminated
without cause by the Debtor in connection with a Plan of
Reorganization or a sale of all or substantially all of
the Debtor's assets; and
(b) those key employees who voluntarily terminate employment
with the Debtor because they decline to accept an
employment offer from the Reorganized Debtor in connection
with a Plan or a purchaser in connection with a Sale where
the employment offer is either at a different location or
provides for salary and benefits that are not at least
substantially similar to the employee's terms of
employment with the Debtor.
Severance benefits also include these additional limitations:
(a) severance is calculated on base salary only;
(b) there is no mitigation of cash benefits;
(c) cash severance benefits to be paid as a lump sum; and
(d) cost of current health benefits to be paid for period
equal to severance period, subject to mitigation.
Employees who voluntarily terminate employment with the Debtor
will not be entitled to severance benefits. Employees who are
involuntarily terminated pursuant to a divestiture of the
Company will be entitled to a single lump sum payment if not
retained by the new organization on the transition date
associated with the divestiture. The maximum cost of the
Severance Program will be $1,582,000.
C. CEO Discretionary Fund
Weirton will establish a CEO Discretionary Pool of $625,000
for use, in the sole discretion of the Debtor's CEO, to retain
selected individuals not otherwise covered by the Stay Bonus
Plan or for any unforeseen retention needs that may arise
during the restructuring period.
All payments due under the Retention Program will be deemed to be
administrative priority expenses pursuant to Section 503 of the
Bankruptcy Code. (Weirton Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
WHEELING-PITTSBURGH: James G. Bradley Elected as Board Chairman
---------------------------------------------------------------
Wheeling-Pittsburgh Steel Corporation announced that James G.
Bradley, president and CEO of WPSC, has been elected chairman of
the board.
"We have a great group of men and women on this board." said
Bradley. "They all have extensive business backgrounds and are
willing to serve."
There are eleven individuals on the new board: seven outside
directors, two directors representing the United Steel Workers of
America, and two inside directors. In addition to attending the
first board meeting, the directors also toured WPSC's production
facilities.
"We have brought together a dynamic group of people from around
the country," continued Bradley. "I believe they are going to help
this company establish a sound foundation to meet our future
challenges."
The board of directors are:
OUTSIDE DIRECTORS
Edward J. Curry, Jr., Gwynedd, PA, Management Consultant with
Curry & Hurd LLC
Roland L. Hobbs, Wheeling, WV, retired president, CEO and
Chairman of the Board of Wesbanco
Alicia H. Munnell, Ph. D., Chestnut Hill, MA, The Peter F.
Drucker Professor in Management Sciences at Boston
College's Carroll School of Management and Director of the
Center for Retirement Research at Boston College
Michael Dingman, Longmont, CO, Chief Financial Officer of
Intrado, Incorporated
James B. Riley, Cincinnati, OH, Senior Vice President and
Chief Financial Officer of Chiquita Brands International,
Incorporated
D. Clark Ogle, - Birmingham, AL, CEO of Nationsrent,
Incorporated
Robert E. Heaton, Swickley, PA, retired CEO of Washington
Steel Corporation
USWA DIRECTORS
Jim Bowen, Charleston, WV, President of the West Virginia
AFL-CIO
Lynn R. Williams, Toronto, Ontario, retired President of the
USWA
INSIDE DIRECTORS
James G. Bradley, St. Clairsville, Ohio, President and CEO of
Wheeling-Pittsburgh Corp. and Wheeling-Pittsburgh Steel
Corp.
Paul J. Mooney, Pittsburgh, PA, Executive Vice President and
Chief Financial Officer of Wheeling-Pittsburgh Corp. and
Wheeling-Pittsburgh Steel Corp.
WORLDCOM INC: Plan Confirmation Hearing to Resume Today
-------------------------------------------------------
U.S. Bankruptcy Court Judge Arthur Gonzalez adjourned the
confirmation hearings on Worldcom Inc.'s Chapter 11 Plan of
Reorganization after the Company reached agreement with dissident
creditors Tuesday.
Hearings will resume today at 3 p.m.
WORLDCOM INC: Reaches Settlement with Various Creditor Groups
-------------------------------------------------------------
The following should be attributed to Michael D. Capellas, MCI
Chairman and CEO:
"With [Tues]day's proposed settlement among the various creditor
groups, MCI has cleared one of the last major hurdles along its
path toward emergence from Chapter 11.
"The 55,000 employees of MCI have worked hard to reach this
significant milestone and we are pleased to have the support of
the overwhelming majority of our creditors for our Plan of
Reorganization.
"We are eager to move our business forward by continuing to
provide our customers with innovative products and award-winning
service.
"[Tues]day's proposed settlement has been approved by MCI's Board
of Directors and is subject to final approval by the Official
Committee of Unsecured Creditors."
WorldCom, Inc. (WCOEQ, MCWEQ), which currently conducts business
under the MCI brand name, is a leading global communications
provider, delivering innovative, cost-effective, advanced
communications connectivity to businesses, governments and
consumers. With the industry's most expansive global IP backbone,
based on the number of company-owned POPs, and wholly-owned data
networks, WorldCom develops the converged communications products
and services that are the foundation for commerce and
communications in today's market. For more information, go to
http://www.mci.com
WORLDCOM: Cerberus' Neporent Calls MCI Settlement A Step Forward
----------------------------------------------------------------
The following is a statement from Mark Neporent, Managing Director
of Cerberus Capital Management L.P. and Co-Chair of the WorldCom
Official Creditors' Committee:
"The Official Committee of Unsecured Creditors in the WorldCom/MCI
bankruptcy case [Tues]day unanimously approved a proposed
agreement between the debtor and dissenting creditor groups.
"[Tues]day's settlement is a significant step forward for MCI as
the company prepares to emerge from Chapter 11. In the end, the
creditors felt that this agreement was in the best interests of
MCI and its estate. We feel confident that the rest of the
confirmation hearing will now be more efficient as a result of
[Tues]day's settlement.
"The Creditors Committee is grateful to MCI CEO Michael Capellas
for his personal involvement in the negotiation process; his
leadership helped guide us to a satisfactory agreement among all
parties.
"The Creditors Committee is eager to work with the new MCI
management team to ensure that the company successfully emerges
from Chapter 11 and becomes a strong competitor in the
marketplace."
WORLDCOM INC: Public Interest Institute Published Policy Study
--------------------------------------------------------------
Confirmation hearings began Monday in New York City in the MCI-
WorldCom bankruptcy case. Consumers are not a party to the case,
but they have a lot to gain or lose from the outcome. Rivals are
asking the court to force the dissolution of the company under
chapter seven, while MCI seeks reorganization under chapter eleven
so that it can continue to provide services to its existing and
future customers.
To provide an economic analysis of the pros and cons of these
competing choices facing the court, Public Interest Institute is
today releasing a Policy Study entitled "WorldCom's Fraud and
Bankruptcy: Promoting the Public Interest while Staving Off the
Telecom Vultures" written by Institute Senior Fellow Dr. Richard
E. Wagner, Harris Professor of Economics at George Mason
University in Fairfax, VA.
"Some high level executives at WorldCom participated in a massive
accounting fraud that set in motion what is to date the largest
bankruptcy in history. Market-based relationships rely heavily
upon mutual trust and confidence, and the punishment of fraudulent
conduct is vital both to secure justice and to maintain that trust
and confidence," says Wagner. However, he adds that while
opponents claim that both justice and the deterrence of future
misconduct require liquidation and not reorganization, the public
interest requires that WorldCom be allowed to proceed through
bankruptcy so that it can resume its position as a vigorous
competitor in the telecom marketplace.
"WorldCom has already paid many times over for the misdeeds of
those executives, and with the preponderance of that toll being
borne by such innocent people as shareholders, creditors, workers,
and customers. The telecom market needs vigorous and imaginative
competitors to challenge the incumbent monopolists, and the public
interest would clearly be best served by allowing MCI WorldCom to
participate actively in the creation of the telecom market of the
future."
Deterrence of future wrongdoing is far better directed at
individual wrongdoers than at the corporate bodies with which they
are associated, and which generally are comprised overwhelmingly
of innocent people who are themselves being victimized by the
wrongdoers in their midst.
WORLDCOM INC: Wants Go-Signal to Assume Amended FPLI Fiber Lease
----------------------------------------------------------------
Worldcom Inc., and its debtor-affiliates ask the Court for
authority to assume certain executory contracts and related
agreements with FPL Investments Inc. The Contracts and related
agreements evidence a leveraged lease for a Fiber Optic
Telecommunications Facility. The Contracts include:
(a) Master Lease Agreement No. 1 dated as of October 31, 1988,
(b) Master Lease Agreement No. 1 with Lease Supplement dated
December 1988,
(c) Master Lease Agreement No. 2 dated as of October 31, 1988,
(d) Master Lease Agreement No. 3 dated as of October 31, 1988,
and
(e) Master Lease Agreement No. 4 dated as of October 31, 1988,
The Debtors will assume the Agreements as a single amended,
restated and consolidated lease.
The Debtors also seek authority to pay all cure amounts and any
postpetition arrearages in connection with the Lease assumption.
The Debtors estimate the Cure Amount to be $200,000.
The Debtors propose to issue new notes equal to the outstanding
principal balance under related Owner Trustee Notes. The new
notes will be secured by a clean and irrevocable letter of credit
rather than the assets comprising the Fiber Facility.
MCI Telecommunications Corporation, now known as MCI WorldCom
Network Services, Inc., entered into the Fiber Lease with FPLI in
October 1988. The Fiber Lease was structured as a leveraged
sale-leaseback transaction.
MCI Telecommunications, FPLI, as Owner Participant, Wilmington
Trust Company and William J. Wade, as Owner Trustee, Prudential
Life Insurance Company of America, as Loan Participant, and
Norwest Bank of Minnesota, National Association, as Indenture
Trustee, entered into Participation Agreement Nos. 1-4 on October
31, 1988, as amended on December 30, 1988. MCI Communications
Corporation guaranteed the obligations of MCI Network Services
under the Fiber Lease.
In connection with the execution of the Fiber Lease and the
Participation Agreement, the parties executed various ancillary
agreements including Tax Indemnification Agreements and Right-of-
Way Assignments. In addition, on December 30, 1998, Wilmington
Trust executed eight promissory notes promising to pay Prudential
in specified installments payable in accordance with the terms of
the Loan and Security Agreement Nos. 1-4 dated as of October 31,
1988.
The original cost of the facilities subject to the Fiber Lease
was $111,228,000. The facilities consist of single mode fiber
which the Debtors use to support their network operations,
including these segments:
* El Paso, Texas to Tucson, Arizona;
* Springfield, Massachusetts to Rynex, New York;
* Rynex, New York to Sardinia, New York;
* Sardinia, New York to North Royalton, Ohio; and
* Buckeye, Arizona to Rialto, California.
The Fiber Facility is integral to the Debtors' ability to provide
telecommunication services to certain of their customers.
The Fiber Lease commenced on March 30, 1989 and expires on
March 30, 2014. The Debtors evaluated the relative costs and
benefits associated with the assumption and the rejection of the
Fiber Lease, including the feasibility of migrating the traffic
that utilizes the Fiber Facility in a limited time window.
Consequently, the Debtors determined that the best course of
action was to attempt to amend certain of the financial terms of
the Fiber Lease and integrate the modifications into one new
lease. In particular, the modifications include setting a new
lease term and establishing a fixed rental payment for the
remainder of the term.
MCI Network Services and FPL FiberNet, LLC, an FPLI affiliate,
are also parties to a Telecommunications Service Agreement dated
February 15, 2002, as amended. As part of MCI Network Services'
agreement with FPLI to assume the New Lease, MCI Network Services
and FiberNet agreed to certain minimum commitments and pricing
discounts under the terms of the TSA.
Timothy W. Walsh, Esq., at Piper Rudnick LLP, in New York,
relates that on June 30, 2003, MCI Network Services and FPLI
entered into a term sheet setting forth an agreement between the
parties as to the terms of the New Lease and obligations under
the TSA. MCI Network Services and FPLI agreed that the New Lease
term would commence on October 1, 2003, subject to the occurrence
of the effective date of the Debtors' Chapter 11 Plan and end on
March 30, 2015, or such shorter period as may result from an
earlier termination.
The parties also agreed that during the new term, MCI Network
Services would pay FPLI 45 quarterly rent payments at $2,000,000
each due on the 30th of March, June, September and December of
each year. The first payment is due on March 30, 2004. The
parties also agreed to amend the stipulated loss values tables to
the Fiber Lease. With respect to the New Lease, MCI Network
Services agreed to pay or fund an amount sufficient to satisfy
its obligations to Prudential in full, including accrued
interest, fees and expenses, pursuant to the Participation
Agreement, the Owner Trustee Notes, the Fiber Lease and other
related operative documents entered into with respect to the
Lease. MCI Network Services also agreed to pay the reasonable
fees for FPLI's and Prudential's counsel.
With respect to the TSA, MCI Network Services agreed to make a
$20,000,000 minimum capacity lease commitment to FiberNet for
metro capacity circuits, some of which are currently leased by
MCI Network Services from FiberNet pursuant to the TSA, during
the seven calendar years commencing January 1, 2004, in exchange
for pricing discounts and certain credits agreed to between the
parties based on the committed volume of traffic. The New Lease
and all related definitive documentation is currently being
drafted.
The Term Sheet contains confidential information that cannot be
disclosed. The Term Sheet has been provided to the Creditors
Committee and will be made available to the Court, upon its
request, for in camera inspection.
Mr. Walsh tells the Court that the New Lease establishes a
favorable rental cost. Under the original Fiber Lease terms,
rental costs were based on varying percentages of FPLI's
acquisition cost of the equipment. This varying rental cost
based on market costs set 15 years ago was unacceptable to the
Debtors. The modifications to the Fiber Lease fix the rental
costs and eliminate the requirement that the Debtors pay rental
amounts that are based on outdated financial information. In
addition, the circuit costs under the TSA are on terms more
favorable to MCI Network Services. Through the redirection of
revenue to the TSA, MCI Network Services was able to obtain
concessions on the New Lease, as well as receiving more favorable
pricing with regard to circuit costs.
If the Debtors were to reject the Fiber Lease, they would face
the untenable and costly prospect of migrating traffic from the
Fiber Facility to alternative fiber routes. Under the current
Chapter 11 Plan timetable, the rejection of the Fiber Lease
presents an unacceptable risk that certain customer traffic will
be disrupted. The Debtors simply do not have a sufficient window
of opportunity to perform the necessary migration in an orderly
fashion. (Worldcom Bankruptcy News, Issue No. 36; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
XCEL ENERGY: PSCC Sells $575 Mill. First Collateral Trust Bonds
---------------------------------------------------------------
Xcel Energy (NYSE:XEL) announced that Public Service Company of
Colorado has sold $575 million of first collateral trust bonds.
The first collateral trust bonds were issued in two series: $300
million with a 4.375 percent coupon that mature in October 2008,
and $275 million with a 5.5 percent coupon that mature in April
2014. The bonds are redeemable at any time pending various "make
whole" provisions.
Proceeds will be used to repay short-term debt and for general
corporate purposes at Public Service Company of Colorado. The
short-term debt was partially incurred in June 2003, when Public
Service Company of Colorado redeemed $194 million of 7.6 percent
Trust Originated Preferred Securities due in 2038 and $144.8
million of 8.75 percent first mortgage bonds due in 2022.
"These transactions are a continuation of our plan to reduce
financing costs," said Ben Fowke, Xcel Energy vice president and
treasurer. "We believe the attractive interest rates on the new
bonds reflects the underlying financial strength of our utility
operations and their business prospects."
The underwriting group was led by Banc One Capital Markets, Inc.,
McDonald Investments Inc. and UBS Investment Bank.
Xcel Energy is a major U.S. electricity and natural gas company
with operations in 12 Western and Midwestern states. Xcel Energy
provides a comprehensive portfolio of energy-related products and
services to 3.2 million electricity customers and 1.7 million
natural gas customers through its regulated operating companies.
In terms of customers, it is the fourth-largest combination
natural gas and electricity company in the nation. Company
headquarters are located in Minneapolis. More information is
available at http://www.xcelenergy.com
* * *
As reported in Troubled Company Reporter's June 11, 2003 edition,
Fitch Ratings completed a credit review of Xcel Energy Inc. and
its subsidiaries and has upgraded the senior unsecured rating of
Xcel to 'BBB-' from 'BB+', the senior secured ratings of Northern
States Power Co. Minnesota and Northern States Power Co. Wisconsin
to 'A-' from 'BBB+' and the senior unsecured rating of
Southwestern Public Service Co to 'BBB+' from 'BBB'. Fitch also
affirmed the senior secured rating of Public Service Co. of
Colorado at 'BBB+'. Fitch has also removed the ratings from Rating
Watch Positive. The Rating Outlook is Stable.
Xcel's revised rating reflects the substantial dividends
upstreamed by its four main regulated subsidiaries, NSP-MN, NSP-
WI, PSCO and SPS and the expectation that the company's exposure
for the debt and obligations of its subsidiary NRG Energy will be
limited via the bankruptcy process as explained below. The utility
subsidiaries, which distributed $567 million in dividends to Xcel
in 2002, have strong financial profiles, and they will continue to
be the main providers of cash flow to Xcel. Xcel itself has low
debt leverage. Over the course of the past year, Xcel managed to
recover from a serious cash flow stress that resulted from the
insolvency of its subsidiary NRG Energy, exacerbated by
significant parent company financings that had contained cross-
default provisions tied to defaults at NRG. Those agreements have
all been restructured or refinanced. In recent months, Xcel and
its regulated utility subsidiaries have demonstrated access to
capital markets and bank financing. Over the near to intermediate
term, Xcel's liquidity is projected to be adequate to meet the
expected requirements, including $752 million in payments to NRG
creditors to hasten the resolution of NRG's bankruptcy.
* Buxbaum/Century Brings-In Veteran Auctioneer James Carlson
------------------------------------------------------------
Veteran appraiser and auctioneer James Carlson has joined
Buxbaum/Century, specialists in the appraisal and liquidation of
industrial equipment and machinery. The Calabasas-based firm is a
joint venture between Buxbaum Group and Canada's Century Services.
In his new position, Carlson, who recently relocated to Thousand
Oaks, will serve as a machinery and equipment appraiser and
auctioneer, in addition to being involved in marketing and
business development.
For the past five years, Carlson was a regional manager with
Century Services, a leading specialist in industrial equipment
appraisals and liquidations headquartered in Calgary, Alberta.
From his base in Calgary, Carlson was responsible for overseeing
asset appraisals and auctions in the southern half of four western
provinces. His experience includes projects in the mining,
forestry, oil and gas, manufacturing and fabrication, textiles,
food processing, woodworking, construction and agriculture
industries.
Prior to Century Services, Carlson was an appraiser/auction
manager with B.W.A.S. in Calgary, specializing in the oil field
and construction industries. Throughout his 16-year career, he has
conducted appraisals/and or auctions for every major bank,
bankruptcy, and insolvency firm, as well as many major law firms
and asset-based lenders across Canada. His work also includes
projects in the United States and Mexico.
Buxbaum/Century Services was formed in 2000 to provide machinery
and equipment appraisal and auction services for financial
institutions and corporations throughout North America.
Buxbaum Group, together with affiliate Buxbaum/Century, has built
its reputation for over 30 years as one of the largest liquidators
and appraisers of retail and wholesale inventories, as well as
machinery and industrial equipment, across North America. A
subsidiary, Pathway Strategic Partners, LLC, provides turnaround,
expansion and/or downsizing strategies, in conjunction with other
advisory consulting and management services.
* DebtTraders' Real-Time Bond Pricing
-------------------------------------
Issuer Coupon Maturity Bid - Ask Weekly change
------ ------ -------- --------- -------------
Federal-Mogul 7.5% due 2004 14.5 - 16.5 0.0
Finova Group 7.5% due 2009 43.5 - 44.5 +0.5
Freeport-McMoran 7.5% due 2006 102.5 - 103.5 0.0
Global Crossing Hldgs 9.5% due 2009 4.5 - 5.0 +0.25
Globalstar 11.375% due 2004 3.0 - 3.5 -0.5
Lucent Technologies 6.45% due 2029 68.25 - 69.25 -0.75
Polaroid Corporation 6.75% due 2002 11.0 - 12.0 0.0
Westpoint Stevens 7.875% due 2005 20.0 - 22.0 0.0
Xerox Corporation 8.0% due 2027 84.0 - 86.0 -1.5
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
*********
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 ***