/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/030924.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, September 24, 2003, Vol. 7, No. 189 Headlines ACTERNA CORP: Trilithic Inc. Demands Prompt Decision on Contract AGWAY INC: Wants Plan Filing Exclusivity Extended to November 26 ALTERNATE MARKETING: Commences Chapter 7 Liquidation Proceedings AM COMMUNICATIONS: Signs-Up Patton Boggs as Bankruptcy Counsel AMERCO: Court Allows Use of JPMorgan Chase's Cash Collateral ARMSTRONG: AWI Discloses Post-Confirmation Board of Directors ASSET SEC.: Fitch's Ratings on Class B-2 & B-3 Cut to Junk Level AUTOCORP EQUITIES: Significant Losses Raise Going Concern Doubt AEROVIAS NACIONALES: Proof of Claim Forms Due on Oct. 15, 2003 BETHLEHEM STEEL: Wants Approval of Severance Settlement Protocol BOYD GROUP: Distribution Reinvestment Plan Available on Sept. 30 CEDARA SOFTWARE: June 30 Balance Sheet Upside Down by C$1.8-Mil. CEDARA SOFTWARE: Inks C$4.2-Mill. Contract with Philips Medical CENTRAL UTILITIES: Wants More Time to File Bankruptcy Schedules CKE RESTAURANTS: Offering $75 Mill. of Conv. Subordinated Notes CKE RESTAURANTS: Moody's Takes Multiple Rating Actions CORECARE: Renames Kirkbride Center as Blackwell Human Services COVANTA ENERGY: Liquidation Plan's Claims & Interests Treatment CREDIT SUISSE: Fitch Keeps Watch on B+/CCC Note Class Ratings DALEEN TECHNOLOGIES: Expands Strategic Partnership with Danet DII INDUSTRIES: Begins Solicitation of Asbestos Plan Acceptance DOMAN INDUSTRIES: Canadian Court Extends CCAA Stay Until Oct. 10 ENRON CORP: Baupost & Racepoint Wants Plan Examiner Appointed FLEXTRONICS INT'L: Will Host Analyst and Investor Day Tomorrow FRUIT OF THE LOOM: Settles Dispute with Commonwealth of Kentucky G+G RETAIL INC: S&P Downgrades Corporate Credit Rating to B GENTEK INC: Seeks Stay Relief to Allow Class 11 Treatment GENUITY: Court Fixes Oct. 15 as Interim Admin. Claims Bar Date GEORGIA-PACIFIC: Exploring Options for Building Products Biz GMAC 2000-C1: Fitch Puts Class M & N's Ratings on Watch Negative GOLDRAY INC: Seeks Creditor Protection Under BIA in Canada GOODYEAR TIRE: USWA Pact Meets Flexibility and Cost-Saving Goals GRANITE BROADCASTING: June 30 Net Capital Deficit Tops $216 Mil. GREENERY ASSOCIATES: Case Summary & 20 Largest Unsec. Creditors HEADWAY CORPORATE: Completes Debt Restructuring Transactions HENCIE CONSULTING SERVICES: Voluntary Chapter 7 Case Summary I2 TECHNOLOGIES: Withdraws Appeal of Nasdaq Delisting Decision INTEGRATED HEALTH: Rotech Wants Nod for Lasko Settlement Pact INTERCEPT INC: Closes $50MM Credit Facility with Bank of America INT'L PAPER: Amen to Speak at Deutsche Bank Conference Tomorrow ITEX CORP: Inks LOI to Sell Sacramento Corporate-Owned Office JLG INDUSTRIES: FY 2003 Operating Results Reflect Improvement JLG INDUSTRIES: Board Declares Regular Quarterly Dividend KAISER ALUMINUM: Wants to Restructure Power Transmission Service LEAP WIRELESS: Exclusivity Extension Hearing Set for Tomorrow LEVEL 3: Updates Q3 Projections and Reaffirms FY 2003 Guidance LEVI STRAUSS: $650-Mil. Revolving Facility Gets S&P's BB Rating MAJESTIC STAR: Extends Consent Solicitation Until Tomorrow MAJESTIC STAR: Amends Consent Solicitation and Tender Offer MERISTAR HOSPITALITY: Exchange Shares for 8-3/4% Sr. Sub. Notes MILLENNIUM CHEMICALS: S&P Cuts Credit Rating a Notch to BB- NATIONAL CENTURY: Treatment of Claims Under Liquidation Plan NAVISITE INC: Appoints Martin & Scott to Senior Management Team NEW MEXICO SOFTWARE: Settles Obligation to Eisner & Company LLP NORTHWEST GOLD: Taps Singer Lewack to Replace Grant Thornton LLP NRG ENERGY: Establishes September 29, 2003 as Voting Record Date OGLEBAY NORTON: Intends to Sell Lime and Mica Operations OXFORD AUTOMOTIVE: Expands Greencastle, Ind. Manufacturing Plant PACIFIC AEROSPACE: Will Hold Special Shareholders Meeting in Nov. PARAGON FINANCIAL: Posts Record Loan Originations of $75M in Aug. PERRY ELLIS: Completes $150MM 8-7/8% Senior Sub. Debt Offering PG&E NATIONAL: Obtains Open-Ended Lease Decision Time Extension PHOTOCHANNEL: Turns to Tangent Management for PR Strategies PRIME RETAIL: Special Shareholders' Meeting Set for October 30 QUADRAMED CORP: Files 1st and 2nd Quarter Reports on Form 10-Q REPRTON ELECTRONICS: Commences OTCBB Trading Effective Sept. 22 ROHN INDUSTRIES: Wants More Time to File Schedules & Statements ROWE INT'L: Bringing-In Van Dyke as Special Purpose Counsel SENSE TECH.: Exchange Offer Expiry Date Extended to October 6 SIMONDS INDUSTRIES: Plans to Merge With International Knife SK GLOBAL: Proposes Uniform Interim Compensation Procedures SMART WORLD: Debtors Appeal Juno Settlement Decision SPIEGEL GROUP: Hires Keen Realty and Centerpoint to Sell Assets TOYS R US: Completes Sale of $400-Million Fifteen-Year Bonds TRANSWITCH: Fixes Base Share Amount & Note Auto-Conversion Price UNITED AIRLINES: Asks Court to Disallow $4BB of Duplicate Claims VIEWLOCITY INC: Inks Definitive Merger Agreement with Viesta WCI COMMUNITIES: Will Present at CSFB Conference on October 9 WCI STEEL: Has Until Nov. 13 to File Schedules and Statements WELLS FARGO: Fitch Junks Class II-B5 Notes Rating to C from B WHEELING-PITTSBURGH: Awards $8 Mill. Contract to Siemens Energy WORLDCOM INC: Asks Court to Quash Subpoena against Mike Capellas * 10th Annual Aircraft Finance Conference Set for Oct. 27 - 28 * Dewey Ballantine Adds Senior Litigation Attorneys to NY Office * Fitch Report Says Recovery Rates Return to Historical Norms * Meetings, Conferences and Seminars ********* ACTERNA CORP: Trilithic Inc. Demands Prompt Decision on Contract ---------------------------------------------------------------- Acterna Corp., and its debtor-affiliates and Trilithic, Inc. are parties to a Settlement and License Agreement dated July 8, 1999. The License Agreement provided that Trilithic would grant the Debtors a worldwide, non-transferable, non-exclusive License under certain patents. During the pendency of their Chapter 11 cases, the Debtors have continued to utilize the Trilithic Patents in their normal business operations. The License Agreement conditions the Debtors' continued license of the patented technology upon payment of all amounts due. Pursuant to the Agreement, the License was to become irrevocable upon Trilithic's receipt of the last payment, but in the event the Debtors failed to pay, the License would terminate immediately without further action. The License Agreement requires these payments to be made to Trilithic: Due Date Payment Amount -------- -------------- At Closing $900,000 January 1, 2000 900,000 January 1, 2001 650,000 January 1, 2002 650,000 January 1, 2003 650,000 January 1, 2004 650,000 January 1, 2005 650,000 January 1, 2006 650,000 The payments required to be made by the Debtors in 2004, 2005, and 2006 have not been paid to Trilithic. Wendy D. Brewer, Esq., at Barnes & Thornburg, in Indianapolis, Indiana, says that the Debtors have scheduled Trilithic's claim at considerably less than the $1,950,000 remaining to be paid, leaving Trilithic uncertain whether the Debtors intend to comply with the Agreement. Ms. Brewer notes that in the event the Debtors' scheduling of Trilithic's claim indicates their intention not to make all payments required by the License Agreement, the Debtors' actions constitute a breach of the contract and the License is terminated immediately. Trilithic believes that the Debtors require the License to continue normal daily business operations. Thus, Trilithic asks the Court to compel the Debtors to assume or reject the License Agreement, or, in the alternative, allow the remaining payments as administrative priority expenses and to direct the Debtors to pay them on time. (Acterna Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900) AGWAY INC: Wants Plan Filing Exclusivity Extended to November 26 ---------------------------------------------------------------- As previously disclosed, Agway Inc. currently has the exclusive right to submit a Chapter 11 Plan (i.e., the document that describes the path the Company will take for each of its businesses and estimates the potential distribution and timing of such distributions to creditors) to the Bankruptcy Court until September 27, 2003 and that the Company may be requesting an extension of that exclusivity filing period. On Friday, September 12, 2003, Agway submitted a motion to the Bankruptcy Court requesting a two-month extension - to November 26, 2003. The additional time is needed, states Agway, to enable the Company and the Unsecured Creditors' Committee to identify the best strategic alternatives for each of Agway's businesses. As previously reported, each of the businesses is in various stages of the bidding process. While Agway has received a number of credible bids, additional time is needed to evaluate these bids and to consider all options so that the Company can maximize value for its creditors. The two-month extension will afford the Company the opportunity to propose, in consultation with the Unsecured Creditors' Committee, a realistic and viable Chapter 11 plan that estimates the return to creditors with a greater measure of certainty than is possible at this juncture. Agway filed for Chapter 11 protection on October 1, 2002, in the U.S. Bankruptcy Court for the Northern District of New York (Utica) (Bankr. Case No. 02-65872). ALTERNATE MARKETING: Commences Chapter 7 Liquidation Proceedings ---------------------------------------------------------------- According to the Company, on September 16, 2003, (a) Hencie, Inc., a Delaware corporation and a majority owned subsidiary of Alternate Marketing Networks, Inc., a Delaware corporation, and (b) Hencie Consulting Services, Inc., a Texas corporation and a wholly owned subsidiary of Hencie, filed voluntary petitions under Chapter 7 of the federal bankruptcy code as a result of certain events and circumstances, including, without limitation, (i) the failure to collect certain significant accounts receivable owed by MEDIACOPY Texas, Inc., a customer of Hencie Consulting, to Hencie Consulting and (ii) the inability to effect an agreement with Accord Financial, Inc., a Delaware corporation and a financing source of Hencie Consulting, concerning certain significant accounts receivable purchased by Accord from Hencie Consulting and owed by Mediacopy to Accord, or otherwise obtain adequate financing. Alternate Marketing Networks and certain subsidiaries of Alternate Marketing Networks, as applicable, has/have guaranteed certain obligations of Hencie and/or Hencie Consulting, including, without limitation, obligations of Hencie and/or Hencie Consulting to Accord and TrizecHahn Tower Three Galleria Management, L.P., and these parties have made demands of Alternate Marketing Networks and its subsidiaries under the guarantees by Alternate Marketing Networks and its subsidiaries of the obligations of Hencie and/or Hencie Consulting. Alternate Marketing Networks is currently in discussions with these parties and other parties concerning the guaranteed and other obligations of Hencie and/or Hencie Consulting. Although Alternate Marketing Networks intends to satisfy and perform its obligations under any and all guarantees or otherwise settle any and all liabilities assumed by Alternate Marketing Networks with respect to Hencie and/or Hencie Consulting, there can be no assurance that Alternate Marketing Networks will be able to perform under the guarantees. If Alternate Marketing is unable, for any reason, to satisfy and perform all guaranteed obligations of Hencie and/or Hencie Consulting and other obligations of Hencie and/or Hencie Consulting assumed by Alternate Marketing Networks in connection with the bankruptcy of Hencie and Hencie Consulting, Alternate Marketing Networks may be forced to curtail or close operations or sell some or all of the assets of Alternate Marketing Networks. Even if Alternate Marketing Networks is able to satisfy and perform all of the guaranteed obligations and other obligations assumed by Alternate Marketing Networks in connection with the bankruptcy of Hencie and Hencie Consulting, the business, financial condition, and operations of Alternate Marketing Networks may be materially adversely affected by the bankruptcy of Hencie and Hencie Consulting. In connection with these bankruptcy filings, Alternate Marketing Networks accepted the resignation of Adil Khan, a co-founder of Hencie and Hencie Consulting, as a director and the Chief Executive Officer of Alternate Marketing Networks. In connection with his resignation, Mr. Khan agreed, among other things, to waive any and all of his rights to any severance payments as consideration for a release by Alternate Marketing of Mr. Khan from certain provisions of the non-compete of that certain Employment Agreement effective as of August 1, 2003 between Alternate Marketing Networks and Mr. Khan. AM COMMUNICATIONS: Signs-Up Patton Boggs as Bankruptcy Counsel -------------------------------------------------------------- AM Communications, Inc., and its debtor-affiliates are seeking permission from the U.S. Bankruptcy Court for the District of Delaware to retain and employ Patton Boggs LLP as their attorneys in these chapter 11 proceedings. The Debtors have selected Patton Boggs LLP to represent them in connection with their Chapter 11 cases. The Debtors believe that Patton Boggs is both well qualified and uniquely able to represent them in their Chapter 11 cases in an efficient and timely manner. Patton Boggs will be most responsible with the filing and prosecution of their Chapter 11 cases, effective as of the Petition Date, and to perform the legal services that will be necessary during their Chapter 11 cases. Patton Boggs is a full service law firm with experience and expertise in the legal areas that will impact the Debtors' day to day operations and the reorganizations under Chapter 11 of the Bankruptcy Code. In this engagement, Patton Boggs will: a) advise the Debtors regarding matters of bankruptcy law; b) represent the Debtors in proceedings before this Court; c) assist in the preparation of reports; d) advise the Debtors concerning requirements of the Bankruptcy Code, bankruptcy rules, local bankruptcy rules, U.S. Trustees guidelines and case administration; and e) assist the Debtors in the negotiation, preparation, confirmation and implementation of a plan of reorganization. Patton Boggs will also act as general counsel to the Debtors to advise them in regards to other matters that relate to the Debtors' businesses and impact their restructuring. Patton Boggs will be compensated in its current hourly rates of: partners $275 to $500 per hour associates $185 to $325 per hour paralegals $50 to $150 per hour The professionals who will be principally in-charge in this engagement and their current hourly rates are: Robert Jones Partner $425 per hour H. Jefferson LeForce Partner $320 per hour Brent R. McIlwain Associate $230 per hour Jeanie George Paralegal $115 per hour Headquartered in Quakertown, Pennsylvania, AM Communications, Inc., and its debtor-affiliates provide services to the television, cable and wireless industry, their services include installation and maintenance of television lines and wireless systems in the Northeastern and Southeastern parts of the U.S. The Company filed for chapter 11 protection on August 28, 2003 (Bankr. Del. Case No. 03-12689). Steven M. Yoder, ESq., Neil B. Glassman, Esq., and Christopher A. Ward, Esq., at The Bayard Firm represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $29,886,155 in total assets and $25,641,048 in total debts. AMERCO: Court Allows Use of JPMorgan Chase's Cash Collateral ------------------------------------------------------------ On June 28, 2002, Amerco entered into a three-year credit facility a syndicate of ten banks, administered by JPMorgan Chase as agent, for $205,000,000 guaranteed by 76 subsidiaries of Amerco, including the two first-tier subsidiaries U-Haul International, Inc. and AREC. As one of the conditions to the Lenders' loans of funds under the Credit Agreement, the Guarantors collectively executed a Guaranty of all amounts owed to the Lenders under the Credit Agreement. As security for the Secured Loan, Amerco and each of the Guarantors executed a Pledge Agreement under which they granted a first priority security interest in existing and future intercompany receivables, proceeds thereof, and any instruments evidencing the intercompany receivables to the Secured Creditor to secure the Secured Loans. The Parties then simultaneously executed a promissory note evidencing the intercompany loans and advances owing to Amerco and each of the Guarantors. Amerco's and the Guarantors' rights to demand payment of any of the intercompany receivables is subordinated to the rights of the Secured Creditor. The Secured Creditor perfected its first priority security interests in the Collateral of Amerco and each Guarantor by filing UCC-1 Financing Statements in the applicable jurisdictions. The Secured Creditor also took possession of the Note and has continued to possess the Note since June 28, 2002, establishing an additional basis of perfection in its Collateral. Amerco's continued use of its cash management system, while integral to the business, necessarily requires the use of the Secured Creditor's Collateral, including the Cash Collateral. Under Section 363 of the Bankruptcy Code, Amerco must obtain either the Secured Creditor's consent or the Court's approval to use the Cash Collateral. Amerco has been in default under the terms of the Credit Agreement since October 15, 2002. Upon notice of these defaults, Amerco, the Guarantors and the Secured Party entered into a Standstill Agreement in November 2002. The defaults identified in the Standstill Agreement include: (i) on or prior to October 15, 2002, Amerco failed to comply with Credit Agreement that requires it to pay down $150,000,000 of intercompany receivables of Amerco or its subsidiaries or other financings; and (ii) on October 15, 2002, Amerco defaulted on a $100,000,000 payment of asset backed notes and AREC failed to provide security interests on real property as required under a private placement of notes. Under the terms of the Standstill Agreement, Amerco agreed to pay an additional 2% interest on the outstanding loan balance of $205,000,000 until the defaults were cured. As of June 28, 2002, the net obligations owed to Amerco under the intercompany receivables was $517,200,000. Since then, Amerco and its subsidiaries made numerous intercompany transfers, such that Amerco and the Secured Creditor do not currently know the precise amount of the intercompany receivables owing and evidenced by the Note. The Parties believe that the amounts owed to Amerco exceed the amounts owing under the Credit Facility. However, Amerco acknowledges that its continued use of the Collateral, including the Cash Collateral, may result in a material reduction in the Collateral's value and that if Amerco's reorganization is unsuccessful or if any of its material subsidiaries filed a case under the Bankruptcy Code or ceased operation of its business, the Collateral value, including the Cash Collateral, could drop precipitously. Amerco and the Secured Creditor agreed to certain treatment of the Secured Creditor claims against Amerco as outlined in a Letter Agreement dated August 12, 2003, which they intend to memorialize in a Restructuring Agreement. As additional adequate protection to the Secured Creditor and to facilitate the approval of the DIP Facility, the Letter Agreement provides that upon entering into the Restructuring Agreement, Amerco will pay $51,125,000 to the Secured Creditor in partial payment of amounts owing under the Loan Documents, including fees and expenses. The Secured Creditor also made a good faith request for adequate protection of its interest in the Collateral Amerco intend to use. At the parties' agreement and without in any way ruling on whether the interests of the Secured Creditor are adequately protected, Judge Zive orders that: A. Amerco may use the Cash Collateral until a Termination Event. The Cash Collateral may not be used, sold, leased, or otherwise disposed of in any manner, in whole or in party, by any entity, including Amerco, without the Secured Creditor's prior written consent; B. Amerco may use the Cash Collateral only in the ordinary course of business and only to pay ordinary, necessary, actual and reasonable business expenses when and as these expenses become due. Amerco may not use any Cash Collateral for any other purpose without the prior written consent of the Secured Creditor; C. Amerco stipulates that the value of the Collateral as of the Petition Date exceeds the amount of the Secured Creditor's claims against it; D. The Secured Creditor will have an allowed claim in the Bankruptcy Case, in the amount equal to the sum of these items, reduced by any amounts actually paid: -- $205,000,000 principal amount, -- interest accrued but unpaid as of the Petition Date, -- fees, costs and other expenses incurred under the Loan Documents but unpaid as of the Petition Date, -- interest on principal at the rate provided in the Loan Documents each day from and after the Petition Date, and -- reasonable fees, costs and other expenses incurred by the Secured Creditor and payable by Amerco under the terms of the Loan Documents on or after the Petition Date; E. As adequate protection for any diminution in value of the Secured Creditor's interest in the Collateral, including the Cash Collateral, as required under Sections 361, 363(c) and 363(e) of the Bankruptcy Code, in compliance with Section 506(b) and in consideration of the Secured Creditor's consent to Amerco's use of the Cash Collateral: -- Amerco will pay interest on the Secured Loan, in advance, at the non-default rate of interest specified in the Loan Documents, but without prejudice to the right of the Secured Creditor to claim interest at the default rate specified in the Standstill Agreement and other Loan Documents; -- Within 10 days of demand by the Secured Creditor, Amerco will pay any fees, costs and expenses payable under the Loan Documents, including the fees and disbursements of counsel, financial advisors, and consultants, whether incurred before or after the Petition Date, subject to the Court's review; -- The Secured Creditor will have a first priority, valid, enforceable, perfected and unavoidable replacement and additional lien on all of Amerco's intercompany receivables that arise after the Petition Date to secure the Secured Loan; -- The Secured Creditor's lien on and security interest in the Collateral continues in the proceeds and profits of the Collateral as provided by Section 552(b) of the Bankruptcy Code without exception by the Court, subject to the Secured Loan and Loan Documents; -- Amerco will comply with and perform all its covenants and obligations, including payment of interest at the non- default rate without prejudice to a claim for interest at the default rate and reasonable fees, costs and other expenses payable to the Secured Creditor; -- Amerco will maintain a cash management system similar to that in place under the Loan Documents; -- Amerco will timely perform and satisfy all requirements applicable to it under the Guidelines and Requirements of the U.S. Trustee; -- The Secured Creditor and any successors will be given access to the books, records and documents of Amerco and its subsidiaries during normal business hours and without interfering with Amerco's operations; -- Amerco will provide to the Secured Creditor reports and information on: (a) all documents and reports, including monthly operating statements, required under the Loan Documents; (b) other information that the Secured Creditor may from time to time reasonably request; and (c) any documents or information provided to the Committee in this or a related Chapter 11 case; and -- Amerco will serve the Secured Creditor and other parties- in-interest, with copies of all documents filed with the U.S. Trustee. Until all amounts payable or owing under the Loan Documents and the Order have been paid in full, Amerco will give prior notice to the Secured Creditor the filing of any material papers; F. The grant of the lien on the Postpetition Collateral is in addition to all liens and rights existing in favor of the Secured Creditor as of the Petition Date. The additional lien is valid, perfected, enforceable, unavoidable and effective as of the Petition Date without the execution, delivery, filing or recordation of any financing statements, instruments or other documents under applicable non-bankruptcy law. The Secured Creditor's lien on the Postpetition Collateral is senior to all claims, liens and interests arising postpetition on property of Amerco or the estate; G. The automatic stay imposed by Section 362 of the Bankruptcy Code is terminated to the extent necessary to authorize any payment under the Order and to implement and effectuate the terms and conditions of the Order; H. Amerco's rights to use the Cash Collateral will automatically terminate immediately without notice, demand, order or other action if any of these events occurs: -- December 31, 2003 has passed; -- Amerco has paid in full all amounts and claims payable or owing under the Loan Documents and this Order; -- the Court prohibits Amerco's use of the Cash Collateral; -- Amerco's failure to comply with any material terms, conditions or covenants contained in the Order or the Loan Documents; -- the Court disapproves the DIP Facility; -- Amerco fails to make the required payments under the Order; -- Amerco's failure to provide the Secured Creditor with a listing of its intercompany receivables; -- Amerco ceases to operate all or substantially all of its business as presently conducted; -- Amerco has sold all or substantially all of the property of the estate; -- The Court orders the appointment of a trustee or an examiner with expanded powers to operate Amerco's business; -- The Court authorizes a lien on the Collateral to secure any credit that would be senior or equal to any lien the Secured Creditor holds; -- A lien is affixed on any Collateral owned by any of the Guarantors that is equal or senior to any lien held by or granted to the Secured Creditor under the Loan Documents or this order without the written consent of the Secured Creditor; -- The Court lifts the automatic stay to allow any entity to proceed against any material asset of Amerco; -- Amerco asks the Court to reconsider the Order; or -- A state department of insurance acts to seize RepWest or its assets or RepWest fails to comply with the terms of a corrective plan the Arizona Dept. of Insurance adopted; I. All parties-in-interest will have until September 18, 2003 to bring any claim, right, action, cause of action or liability to: -- challenge the amount, allowance, nature, extent, validity, enforceability, or priority of the Loan Documents or the Secured Creditor's prepetition claims, liens or interests; -- recover any amount from the Secured Creditor on account of any prepetition Date claim, right, action, causes of action or liability, including any claim, right, action, causes of action, or liability that may exist or arise under the Bankruptcy Code; or -- subordinate any or all of the Secured Creditor's claims, liens or security interests to any other claims, liens or security interest; and J. Upon the occurrence of a Termination Event, Amerco may not use, sell or lease the Cash Collateral, will segregate and account for any Cash Collateral in its possession, custody or control, and will hold the Cash Collateral for the benefit of the Secured Creditor, subject to further Court order. Equity Committee Objects Kaaran E. Thomas, Esq., at Beckley Singleton, Chtd., in Reno, Nevada, recalls that the Debtors entered into three Stipulated Orders with these creditors to provide them with lien or adequate protection on the Debtors' Cash Collateral: -- Citibank, N.A., -- JPMorgan Chase Bank, and Third parties are permitted to review and challenge: -- the Citibank lien until October 13, 2003, and -- the JPMorgan lien until September 18, 2003. The Official Committee of Equity Holders believe that the objection periods are too short in light of its status and the extensive review required of the other financing transactions. Accordingly, the Equity Committee asks the Court to: -- extend the objection period on the Citibank Lien to November 30, 2003; -- delay the final approval of the Cash Collateral Motion and permit, instead, continued use of cash flow pursuant to an agreed budget for a period of 90 days to permit the Equity Committee and other parties-in-interest the opportunity to investigate the impact of all of the proposed financing transactions; -- compel the Debtors to make detailed disclosure regarding the collectibility of both current and projected company receivables and the business justification for the JPMorgan payment from the proposed DIP Facility; -- permit the use of the JPMorgan cash collateral upon a grant of a replacement lien conditioned on final determination of the validity, priority and extent of JPMorgan's liens; -- to the extent JPMorgan is determined to be either an undersecured or unsecured creditor as of July 14, 2003, disgorge the payments to JPMorgan; and -- give the Equity Committee 90 days to challenge the JPMorgan Liens and be given access to the Debtors' books, records and witnesses to assist it in its task. (AMERCO Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-0900) ARMSTRONG: AWI Discloses Post-Confirmation Board of Directors ------------------------------------------------------------- On the Effective Date, the Board of Directors of Reorganized Armstrong World Industries will consist of nine individuals. Each of the nine individual members of the Board of Directors of Reorganized AWI will serve in accordance with the Amended and Restated Articles of Incorporation, the Amended and Restated By- laws, and the Stockholder and Registration Rights Agreement, with their service beginning on the Effective Date of the Plan. The members of the Board of Directors of Reorganized AWI are: -- Joseph L. Castle, II; -- James J. Gaffney; -- Robert C. Garland; -- Judith R. Haberkorn; -- Michael D. Lockhart; -- Scott D. Miller; -- Arthur J. Pergament; -- John J. Roberts; and -- Alexander M. Sanders, Jr. (Armstrong Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 609/392-0900) ASSET SEC.: Fitch's Ratings on Class B-2 & B-3 Cut to Junk Level ---------------------------------------------------------------- Asset Securitization Corp.'s commercial mortgage pass-through certificates, series 1996-D3, are downgraded by Fitch Ratings as follows: -- $27.4 million class B-2 to 'CCC' from 'B'; -- $7.8 million class B-3 to 'C' from 'CCC'. The following certificates are affirmed by Fitch: -- $56.6 million class A-1B 'AAA'; -- $321 million class A-1C 'AAA'; -- $19.6 million class A-1D 'AAA'; -- Interest-only class A-CS2 'AAA'; -- $39.1 million class A-2 'AA'; -- $35.2 million class A-3 'A'; -- $39.1 million class A-4 'BBB'; -- $43 million class B-1 'BB'. Fitch does not rate the $15.7 million class A-5, $643,854 class B- 4 or $41 class B-4H certificates. The downgrades reflect continuing deterioration in the pool's collateral performance, including the expected losses on the delinquent loans and interest shortfalls on subordinate classes. Realized losses in the pool total $15.5 million. Fitch remains concerned about the pool's high hotel (28%) concentration. Also of concern is the loan concentration, with the top five loans representing 37% of the pool. As of the September 2003 distribution date, eight loans (3.5%) were in special servicing, including a 30-day delinquent (0.52%), a 60-day delinquent (0.34%), four 90-day delinquent (1.4%), and two real estate-owned loans (1.1%). Losses are expected on five of them. Five of the specially serviced loans (2.5% of pool), including an REO loan, are secured by hotels. The REO loan (0.7%) is secured by a limited-service hotel in Lubbock, Texas. A purchase agreement has been executed and closing is set for October 2003. As of the September 2003 distribution date, the pool's aggregate certificate balance has decreased by 23% to $605.2 million from $782.6 million at issuance. CRIIMI MAE, the special servicer, who is also responsible for collecting financial statements, provided year-end 2002 financials for 100% of the non-defeased loans. The YE 2002 weighted average debt service coverage ratio increased to 1.53 times from 1.44x at issuance. Fitch will continue to monitor this transaction, as surveillance is ongoing. AUTOCORP EQUITIES: Significant Losses Raise Going Concern Doubt --------------------------------------------------------------- Autocorp Equities Inc. has incurred significant losses from operations and has a large accumulated deficit. As a result, the Company is currently dependent on PUSA for the financing it utilizes to fund its operations. PUSA is no longer able to provide such financing. This raises substantial doubt about the Company's ability to continue as a going concern. In 2003, the Company has executed the transition phase of its business strategy from a portfolio lender to a pass-through originator for third-party buyers of auto finance contracts. In prior years the Company has primarily originated automobile contracts for its own account financed by bank lines of credit. The Company has established contractual relationships with financial institutions under which it originates loans for the institution under the institution's guidelines. These loans are passed through to the financial institution and the Company is paid origination fees. The Company is currently negotiating additional pass-through relationships in an effort to change the Company's mix to a weighting of financed revenue. Although the Company projects that it will be cash flow positive in the second half of 2003, current revenues are not sufficient to cover the Company's operating costs. The Company's independent auditors, Ehrenkrantz, Sterling & Co., LLC, have advised the Company's Board of Directors: "In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Pacific Auto Group, Inc. and subsidiary as of December 31, 2002 and 2001, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred significant losses from operations and has a large accumulated deficit. As a result, the Company is currently dependent on its parent for the financing it utilizes to fund its operations. As discussed in Note 1 to the consolidated financial statements, the Company's ultimate U.S. Parent, Pacific USA Holdings Corp. filed for a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code and is no longer able to provide such financing. Management's plans regarding these matters are described in Note 2 to the consolidated financial statements. These conditions raise substantial doubt about the Company's ability to continue as a going concern." AEROVIAS NACIONALES: Proof of Claim Forms Due on Oct. 15, 2003 -------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York establishes October 15, 2003, as the deadline for creditors of Aerovias Nacionales de Colombia S.A. Avianca and its affiliate Avianca, Inc., to file their proofs of claim against the Debtors or be forever barred from asserting their claims. All proof of claim forms from creditors outside the Republic of Columbia must be received with the Bankruptcy Court on or before Oct. 15. If sent by mail, forms must be addressed to: United States Bankruptcy Court Southern District of New York Re: Aerovias Nacionales De Colombia S.A/ Avianca, et al. PO Box 5130 Bowling Green Station New York, NY 10274 If by hand or overnight courier, to: United States Bankruptcy Court Southern District of New York Re: Aerovias Nacionales De Colombia S.A/ Avianca, et al. One Bowling Green Room 534 New York, NY 10004-1408 The proof of claim forms need not be submitted at this time if they are on account of: 1. Claims already paid in full by the Debtors; 2. Claims already properly filed with the Bankruptcy Court; 3. Claims not listed as disputed, contingent or unliquidated; 4. Claims previously allowed by Order of the Court; 5. Claims for which a specific deadline has been fixed by the Court; or 6. Administrative expense claims of the Debtors. Founded in 1919, Aerovias Nacionales de Colombia S.A. Avianca is one of the oldest airlines in the world. The Colombian carrier provided scheduled passenger and cargo services throughout South America, the Caribbean and the US. The Company filed for chapter 11 protection on March 21, 2003 (Bankr. S.D.N.Y. Case No. 03-11678). Ronald E. Barab, Esq., at Smith, Gambrell & Russell, LLP and Howard D. Ressler, Esq., at Anderson, Kill & Olick, P.C., represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it estimated debts and assets of more than $100 million each. BETHLEHEM STEEL: Wants Approval of Severance Settlement Protocol ---------------------------------------------------------------- Bethlehem Steel Corporation and its debtor-affiliates ask the Court to approve their proposed procedures to settle potential disputes with former employees arising from their alleged obligations to make severance allowance payments to former employees under the Severance Plan. The Severance Plan Since January 1, 1990, pursuant to the Debtors' Severance Allowance Plan for Eligible Salaried Employees, the Debtors maintained a plan to provide severance allowances to certain employees whose employment was involuntarily terminated. An employee is eligible for Severance Allowances under the Severance Plan if, among other things: (a) the Debtors terminate the employee because of the permanent closing of the employee's operation, the permanent discontinuance of a substantial portion of the department in which the employee is employed, the permanent elimination of the employee's position or a permanent force reduction; and (b) the employee is not offered a job at substantially equal pay, and with relocation assistance if the job is outside the same geographic area as the existing job. Until February 1, 2003, the formula to determine the Severance Allowance of an eligible employee under the Severance Plan was calculated based on a gross amount derived from the employee's final weekly pay and the number of years of continuous service, less certain benefits paid to or on behalf of the employee. More specifically, the gross amount of the Severance Allowance was determined by multiplying the employee's final weekly pay by a factor based on the employee's length of continuous service as of the employee's last day worked -- up to a maximum amount equal to the lesser of 39 weeks of pay or $80,000, as: Years of Continuous Service Severance Allowance --------------------------- ------------------- less than 3 years 0 weeks between 3 and 5 years 4 weeks between 5 and 7 years 6 weeks between 7 and 10 years 7 weeks between 10 and 12 years 8 weeks between 12 and 15 years 10 weeks 15 years or more 1 week for each year of service The Severance Allowance for the employee was then finally determined by subtracting from the gross amount, the: (1) Income Protection Plan benefits paid to or on behalf of the employee; (2) regular vacation benefits earned by the employee during lay off; (3) enhanced pension benefits payable solely as a result of the event that created the employee's eligibility for the Severance Allowance -- the Pension Offset; and (4) the value of the employee's retiree health care benefits -- the Retiree Health Offset. The Debtors amended the Severance Plan in March 2003 to eliminate, effective February 1, 2003, the reduction of the Severance Allowance by the Pension Offset and Retiree Health Offset -- the Retiree Offsets -- in recognition of the likelihood of the impending: -- termination of retiree health care benefits as a result of the Debtors' request to terminate its retiree health care benefits, which termination occurred on March 31, 2003; and -- reduction in pension benefits as a result of Pension Benefit Guaranty Corporation's complaint filed on December 18, 2002 in the U.S. District Court for the Eastern District of Pennsylvania to terminate and assume trusteeship of the Debtors' pension plan which termination occurred as of December 18, 2002 and assumption of trusteeship, which occurred on April 30, 2003. The Laid Off Employees From the Petition Date through January 31, 2003, the Debtors laid off 475 employees who consider, or the Debtors believed to consider themselves, eligible for Severance Allowances under the Severance Plan. Of the 475 Laid Off Employees, 108 sought payment of Severance Allowance claims as administrative expenses pursuant to a request filed on May 22, 2003 -- the Severance Claimants. Mark A. Jacoby, Esq., at Weil, Gotshal & Manges LLP, in New York, notes, that the Debtors are also seeking the Court's approval of a stipulation settling the Severance Claimants' claims for Severance Allowances based on a formula that takes into account the reduced value of the pension and retiree health care benefits provided to employees whose employment the Debtors involuntarily terminated from the Petition Date through January 31, 2003, and reduces the remaining amount by 30% to reflect the uncertainty and legal expenses avoided by the Severance Claimants by settling their claims. Many of the Laid Off Employees, other than the Severance Claimants, contacted the Debtors concerning Severance Allowances and have filed proofs of claim for Severance Allowances, some of which seek allowance and payment of the claims as administrative expense claims. The Debtors believe that many other Remaining Laid Off Employees will make additional requests for Severance Allowance after learning of the terms of the Stipulation between them and the Severance Claimants. The Proposed Settlement Procedure In anticipation of requests by Remaining Laid Off Employees for additional Severance Allowance payments, and to promote the equitable treatment of the Debtors' employees through a consistent treatment of similarly situated employees, the Debtors propose to implement a settlement procedure that will offer Severance Allowance payments to the Remaining Laid Off Employees. The Debtors intend to use the same formula used to determine the Severance Claimants' Severance Allowance payments pursuant to the Stipulation, in exchange for the release by any accepting Remaining Laid Off Employee of any and all claims for Severance Allowance. Mr. Jacoby relates that the Debtors propose to determine the amount of the Severance Allowance payment to offer to each Remaining Laid Off Employee using a formula, which is the same formula applied pursuant to the Stipulation. The Severance Formula is: (a) Begin with the gross amount of Severance Allowance payable under the Severance Plan as it was in effect at the time of the Remaining Laid Off Employee's last day worked; (b) Deduct any Severance Allowance already paid; (c) Deduct any Income Protection Plan benefit payments received during lay off; (d) Deduct any vacation earned during lay off, if paid; (e) Deduct the value of the Debtors' contribution to retiree health care benefits for each month between lay off and March 31, 2003; (f) For any Remaining Laid Off Employee who was eligible only for a "shutdown pension," deduct pension amounts payable until the Remaining Laid Off Employee reaches 62 years of age using (x) for the period through November 30, 2002, the pension amount paid by Bethlehem, and (y) for the period commencing December 1, 2002, the rate payable by the PBGC; and (g) Multiply the remainder by 70% to reflect the uncertainty and legal expenses avoided by the Remaining Laid Off Employee by settling. A "shutdown pension", Mr. Davis explains, is a contingent pension available upon the occurrence of total or partial shutdown of an employee's operation or department or the permanent elimination of an employee's position if, at the time of the employee's termination, the employee: -- was at least 55 years of age, and the sum or the employee's age and the length of continuous service was equal to least 70 years; -- was younger than 55 years of age, but the sum of the employee's age and the length of continuous service was equal to least 80 years; or -- had at least 20 years of continuous service as of the last day worked, and the sum of the employee's age and the length of continuous service was equal to at least 65. The Severance Formula does not include any deduction for certain subsidized benefits received by the Remaining Laid Off Employees, including: (1) "sole option pension benefits" or that portion of the benefit payable prior to normal retirement age of 65; (2) the "special payment" which is a payment made during the first three months of retirement in an aggregate amount equal to nine weeks of the retiree's final salary plus unused vacation for the year of retirement; (3) the "five-year term certain feature" which is the Debtors' guaranty of payment of a retiree's full pension for five years, even after the death of the retiree; or (4) the "surviving spouse benefit" which is the payment, after a retiree's death, of 50% of a retiree's pension to the retiree's spouse for the spouse's lifetime. After determining the amount of Severance Allowance payment to offer to each Remaining Laid Off Employee, the Debtors intend to send a letter to each Remaining Laid Off Employee explaining the Severance Formula and the payments made to the Severance Claimants. Each letter the Debtors will send to a Remaining Laid Off Employee eligible for payments under the Severance Formula will be accompanied by a check for the payment, and will clearly indicate that negotiation of the check by the Remaining Laid Off Employee will constitute a waiver of any and all of its claims for payment under the Severance Plan based on the termination of employment with the Debtors. The Remaining Laid Off Employees who are not eligible for payments under the Severance Formula will also be sent letters informing them of their ineligibility for additional Severance Allowance payments. According to Mr. Jacoby, the aggregated payment amount proposed under the Settlement Procedure is $4,000,000. Mr. Jacoby asserts that sound business reasons support the implementation of the Settlement Procedure. Because many of the Remaining Laid Off Employees have either already filed claims or are likely to seek enhanced Severance Allowances, particularly upon discovery of the terms of the Stipulation, implementation of the Settlement Procedure will save the Debtors' estates legal expenses and time that would be required to respond to, and possibly litigate, the multiple requests. Implementation of the Settlement Procedure will also allow the Debtors to avoid the uncertainty associated with litigation by settling potential claims at a value that is substantially lower than a potential adverse judgment against them. Under applicable case law, amounts due pursuant to an adverse judgment would likely be entitled to administrative expense status under Section 503(b) of the Bankruptcy Code against the Debtors' estates because the termination of the Remaining Laid Off Employees' employment occurred subsequent to the Petition Date. This savings and aversion of risk by the Debtors are not inconsiderable in light of the Debtors' current "wind down mode" and significantly reduced operating staff and budget. In addition, the Settlement Procedure will provide for the fair and equitable treatment of the Debtors' employees by providing the Remaining Laid Off Employees with substantially the same treatment as that provided to the Severance Claimants. Mr. Jacoby clarifies that because the Severance Claimants are litigants, the Stipulation treats them differently than the Settlement Procedure treats the Remaining Laid Off Employees in three material ways: (1) all claims of the Severance Claimants for Severance Allowances, including those of Severance Claimants who will not receive Severance Allowances pursuant to the Stipulation, will be discharged; (2) the Debtors will pay legal fees incurred in connection with Severance Allowance claims by Severance Claimants who will not receive Severance Allowances pursuant to the Stipulation; and (3) if the Debtors voluntarily offer more favorable Severance Allowance calculations to other similarly situated former employees, on a group basis, the Severance Claimants will be entitled to recalculate their Severance Allowance under the more favorable formula. Since both the Remaining Laid Off Employees and the Severance Claimants' employment was terminated in the same time frame and both groups were subject to the same Severance Plan, consistent treatment of these groups is appropriate, fair and just. The Settlement Procedure essentially will allow the Debtors to offer to the Remaining Laid Off Employees settlement terms that the Court has already determined to be reasonable when the Court approves the Stipulation. The Debtors do not intend to proceed with the hearing to determine the approval of the Proposed Settlement Procedure unless the Court first approves the Stipulation. Finally, Mr. Jacoby says, the Settlement Procedure will allow for the resolution of administrative expense claims against the Debtors' estates, thus expediting the resolution of the Debtors' Chapter 11 cases. For these reasons, the Court should approve the Debtors' proposed Settlement Procedure. (Bethlehem Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., 609/392- 0900) BOYD GROUP: Distribution Reinvestment Plan Available on Sept. 30 ---------------------------------------------------------------- Boyd Group Income Fund (TSX: BYD.UN) announces the adoption of a "Premium Distribution, Distribution Reinvestment and Optional Unit Purchase Plan" which will be available to unitholders of record on September 30, 2003. The Plan allows eligible unitholders to direct that the monthly cash distributions paid by the Fund in respect of their existing trust units be reinvested in additional units at a 5% discount to the average market price (as defined in the Plan). The Plan also includes a unique feature which allows participants to elect to either have these additional trust units held for their account under the Plan, or have them delivered to a designated broker in exchange for a premium cash payment equal to 102% of the reinvested amount. Canaccord Capital Corporation will be the designated broker under this premium distribution component of the Plan. Finally, the Plan allows those unitholders who participate in either the regular distribution reinvestment component or the premium distribution component of the Plan to purchase additional units from treasury for cash at a purchase price equal to the average market price (with no discount) subject to certain limits described in the Plan. Generally, no brokerage fees or commissions will be payable by participants for the purchase of trust units under the Plan, but unitholders should make enquiries with their broker, investment dealer or financial institution through which their trust units are held as to any policies of such party that would result in any fees or commissions being payable. Copies of the Offering Circular setting forth the complete text of the Plan, an accompanying series of Questions and Answers, and the Authorization form have been mailed to registered holders of the Fund. Copies of these materials are also available on Boyd Group's Web site located at http://www.boydgroup.com Eligible unitholders may elect to participate in the Plan by contacting their broker, investment dealer or financial institution through which their trust units of the Fund are held and having them enroll on their behalf. Unitholders should carefully read the complete text of the Plan before making any decisions regarding their participation in the Plan. * * * As previously reported, Fitch Ratings has affirmed the ratings for Boyd Gaming Corporation's senior secured bank credit facility at 'BB+', senior unsecured at 'BB-' and senior subordinated notes at 'B+'. The ratings reflect the company's geographically diverse asset base, strong free cash flow generation, focused balance sheet management and visible growth prospects (namely, The Borgata). Offsetting factors include the material tax increases enacted in Illinois, Nevada and New Jersey in 2003 which are expected to result in a $15 million - $20 million hit to run-rate EBITDA. Longer term, risk factors include new competition for Boyd's Delta Downs facility, where Pinnacle Entertainment plans to open its new casino facility in early 2005, and the potential for a Native American casino within 15 miles of Boyd's Blue Chip Casino in Michigan City. Recently announced capital spending plans at these two properties could minimize the impact; however, Fitch believes that the combined hit to EBITDA in 2005 could be in the $35 million - $50 million range. CEDARA SOFTWARE: June 30 Balance Sheet Upside Down by C$1.8-Mil. ---------------------------------------------------------------- Cedara Software Corp. (TSX:CDE/OTCBB:CDSWF) announced results for its fourth quarter and fiscal year ended June 30, 2003. Revenue from continuing operations in the fourth quarter was $6.6 million compared to $11.3 million recorded in the same period last year. Gross margin of $4.2 million or 64% of revenue in the fourth quarter of fiscal 2003 was in line with gross margin of 63% of revenue for the first nine months of fiscal 2003 but below the $9.2 million or 81% of revenue reported in the same period last year. The Company posted a net loss of $3.7 million for the fourth quarter of fiscal 2003, compared to a net loss of $0.4 million in the same quarter last year. On a per-share basis, the net loss for the fourth quarter of fiscal 2003 was $0.15 per share, compared to a net loss of $0.02 per share in the same period last year. For fiscal 2003, revenue from continuing operations was $30.1 million compared to $45.5 million in fiscal 2002. The decline in revenue of $15.4 million or 34% compared to last year was due primarily to the high inventories of pre-purchased software licenses in the hands of customers at the beginning of the year. Customers have had to work these inventories out of their systems before the resumption of a more normal flow of orders could occur. The Company recorded a net loss from continuing operations of $13.3 million or $0.55 per share for fiscal 2003 compared to a net loss of $3.6 million or $0.17 per share last year. In fiscal 2003, there was no income or loss from discontinued operations compared to income from discontinued operations of $5.0 million in fiscal 2002. The overall net loss for the year of $13.3 million or $0.55 per share compared to overall net income of $1.5 million or $0.07 per share in the previous year. In fiscal 2003, cash used in continuing operating activities was $1.4 million, an improvement of $2.0 million, compared to cash used in continuing operating activities of $3.4 million in the last fiscal year. Discontinued operations consumed cash of $1.9 million in fiscal 2003 compared to cash provided by discontinued operations of $0.6 million last year. "Fiscal 2003 was a difficult year for Cedara as the level of pre-purchased software licenses in the hands of our customers had a major negative impact on fiscal 2003 revenues," said Abe Schwartz, Cedara's President and Chief Executive Officer. "Compounding this, results for the fourth quarter and for the full fiscal year fell short of management's expectations due primarily to unexpected delays in contract execution, foreign exchange losses due to the decline of the U.S. dollar and a non recurring adjustment related to office lease exit costs. On a positive note, we estimate that customer held software license inventory has declined by $10.8 million, from an estimate of approximately $17.5 million at the beginning of the year to an estimate of approximately $6.7 million at year end. Based on this and other improvements made during 2003, it is our expectation that revenue will rebound in fiscal 2004", added Schwartz. Cedara's June 30, 2003, balance sheet shows a working capital deficit of about CDN$12 million while net capital deficit tops CDN$1.8 Million. Cedara Software Corp. is a leading independent provider of medical technologies for many of the world's leading medical device and healthcare information technology companies. Cedara's software is deployed in hospitals and clinics worldwide - approximately 20,000 medical imaging systems and 4,600 Picture Archiving and Communications System workstations have been licensed to date. Cedara is enabling the future of the healthcare industry with new innovative approaches to workflow, data and image management, integration, the web, software components and professional services. The company's medical imaging solutions are used in all aspects of clinical workflow including the capture of patient digital images; the sharing and archiving of images; sophisticated tools to analyze and manipulate images; and even the use of imaging in surgery. Cedara is unique in that it has expertise and technologies that span all the major digital imaging modalities including angiography, computed tomography, echo-cardiology, digital X-ray, fluoroscopy, mammography, magnetic resonance imaging, nuclear medicine, positron emission tomography and ultrasound. CEDARA SOFTWARE: Inks C$4.2-Mill. Contract with Philips Medical --------------------------------------------------------------- Cedara Software Corp. (TSX:CDE/OTCBB:CDSWF), a leading independent developer of medical software technologies for the global healthcare market, has signed an agreement with Philips Medical Systems, to supply certain of its medical imaging technologies and related support services for application by Philips in its MR (Magnetic Resonance) systems. The agreement is valued at a minimum of Cdn. $4.2 million in Cedara's current fiscal year. There is the potential for some follow-on business at Philips' option. "We are pleased that Cedara has been successful in securing this major agreement with Philips Medical Systems, a leading supplier of diagnostic imaging and patient monitoring systems," said Abe Schwartz, Cedara's President and CEO. For more information about Cedara's range of medical image management products, visit the Cedara Web site at http://www.cedara.com Cedara's June 30, 2003, balance sheet shows a working capital deficit of about CDN$12 million while net capital deficit tops CDN$1.8 Million. Cedara Software Corp. is a leading independent provider of medical technologies for many of the world's leading medical device and healthcare information technology companies. Cedara's software is deployed in hospitals and clinics worldwide - approximately 20,000 medical imaging systems and 4,600 Picture Archiving and Communications System workstations have been licensed to date. Cedara is enabling the future of the healthcare industry with new innovative approaches to workflow, data and image management, integration, the web, software components and professional services. The company's medical imaging solutions are used in all aspects of clinical workflow including the capture of patient digital images; the sharing and archiving of images; sophisticated tools to analyze and manipulate images; and even the use of imaging in surgery. Cedara is unique in that it has expertise and technologies that span all the major digital imaging modalities including angiography, computed tomography, echo-cardiology, digital X-ray, fluoroscopy, mammography, magnetic resonance imaging, nuclear medicine, positron emission tomography and ultrasound. CENTRAL UTILITIES: Wants More Time to File Bankruptcy Schedules --------------------------------------------------------------- Central Utilities Production Corp., wants more time to file schedules of assets and liabilities, statements of financial affairs and lists of executory contracts and unexpired leases required under 11 U.S.C. Sec. 521(1). The Debtor relates that its files are voluminous and located in several states. An ongoing effort to locate arrange and report the financial affairs of the Debtor may take as much as three weeks longer that the time period allotted for the filing of the schedules. Additionally, the Debtor points out that its principal business is oil and gas production located in several states. Each has different contractual operators and descriptions of the assets. Consequently, the Debtor wants to extend the schedules filing deadline to run through October 4, 2003. Headquartered in Carrollton, Texas, Central Utilities Production Corp., an oil and gas exploration and production, filed for chapter 11 protection on August 29, 2003 (Bankr. E.D. Tex. Case No. 03-44067). William Tranthom, Esq., represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $74,000,000 in total assets and $3,000,000 in total debts. CKE RESTAURANTS: Offering $75 Mill. of Conv. Subordinated Notes --------------------------------------------------------------- CKE Restaurants, Inc. (NYSE: CKR) is planning to offer $75 million aggregate principal amount of convertible subordinated notes, subject to market and other customary conditions. The Company is expected to grant the initial purchasers of the offering an option to purchase up to an additional $15 million aggregate principal amount of notes. The notes will be convertible into shares of the Company's common stock if the closing price of the common stock exceeds specified levels or in certain other circumstances. The Company plans to use all of the net proceeds from the offering to repay and retire a portion of its outstanding 4-1/4 percent Convertible Subordinated Notes Due 2004 as soon as practicable after the closing of this offering. The Company plans to repay and retire the remainder of such outstanding notes by replacing its existing $100 million senior credit facility with a new $150-175 million facility and drawing down the necessary funds under the new facility. The Company has secured an underwritten lending commitment for this new facility, which is subject to customary conditions. CKE Restaurants, Inc. (S&P, B Corporate Credit Rating, Negative), through its subsidiaries, franchisees and licensees, operates over 3,200 restaurants, including 1,000 Carl's Jr. restaurants, 2,181 Hardee's restaurants, and 97 La Salsa Fresh Mexican Grills in 44 states and in 14 countries. For more information, go to http://www.ckr.com CKE RESTAURANTS: Moody's Takes Multiple Rating Actions ------------------------------------------------------ Moody's Investor's Service assigned its low-B and junk ratings on CKE Restaurants, Inc.'s planned bank loan and convertible subordinated notes respectively. The investor's service upgraded all other ratings of the company. The new loan will be used to retire the convertible subordinated notes maturing in March 2004. Affected Ratings: * B1 - $150 to 175 million bank loan * Caa1 - $75 million twenty-year convertible subordinated notes Upgraded Ratings: * B3 - $200 million senior subordinated notes (due 2009), from Caa1 * Caa1 - $122 million convertible subordinated notes (due March 2004), from Caa2 * B1 - Senior implied rating, from B2 * B2 - Long-term issuer rating, from B3. The 2004 subordinated notes rating will be withdrawn after they are repaid. Moody's believes that expected strong performance and good restaurant margins on CKE's units merit the upgrades. Outlook is stable. CKE Restaurants, Inc, operates or franchises 1000 Carl's Jr and 2154 Hardee's quick-service hamburger restaurants as well as 121 other restaurants with the Green Burrito and La Salsa trade names. The company is headquartered in Carpinteria, California. CORECARE: Renames Kirkbride Center as Blackwell Human Services -------------------------------------------------------------- CoreCare Systems, Inc. (Pink Sheets: CRCS) announced that its Kirkbride Center Campus at 49th & Market Streets, Philadelphia, Pa., has been dedicated today as the Blackwell Human Services Campus formerly known as CoreCare Realty Corporation. The Campus is being dedicated in honor of Councilwoman Jannie Blackwell and the late Representative Lucien Blackwell for their many contributions to the disenfranchised citizens of Philadelphia. The Kirkbride Center is a 21-acre Campus in the University City section of West Philadelphia. The Campus consists of eight buildings with a total of 450,000 square feet used for various healthcare and human services. Tenants include the Kirkbride Center, an acute inpatient psychiatric Hospital and Drug & Alcohol Rehabilitation Program; Westmeade Center, an adolescent residential treatment program, and Quantum Clinical Services Group specializing in central nervous system clinical drug trials. These Companies are all wholly owned subsidiaries of CoreCare Systems, Inc. Other major tenants include: Baptist Children Services, Travelers Aid, Mill Creek School, Children's Hospital of Philadelphia, Philadelphia Academy, West Philadelphia Charter School and Children Services. Currently Blackwell Human Services Campus services over 180 patients, 300 school-age children and 250 homeless family members and provides over 500 jobs for the community. CoreCare Systems, Inc. Chairman Thomas T. Fleming commented, "We are honored that the Blackwell family has so graciously accepted our request to rename our Campus." Kirkbride Center acquired the Campus in 1997 with only 15 patients and has struggled to bring both the Hospital and the real estate to an economically sound footing. Councilwoman Jannie Blackwell and the late Representative Lucien Blackwell have always been available to Kirkbride Center to help problem solve. Their leadership has been instrumental in causing the development of a CVS, as well as the current plans to develop the 4 acres along Market Street. Councilwoman Blackwell has always supported the institution in resolving various operations problems caused by its past economic difficulties. Kirkbride and CoreCare Realty Corporation filed for Chapter 11 protection on May 6, 2002. Councilwoman Jannie Blackwell is a three-term councilperson and a seasoned advocate for social change with a thirty-year reputation for serving community members, the poor and underprivileged. Elected among her peers as Majority Leader in 2000, she is also Finance Chair and holds an extensive list of committee memberships. The late Representative Lucien Blackwell, dedicated and persevering, worked his way up from laborer to serving in both the United State House of Representatives and the Pennsylvania State House of Representatives. He has been recognized for his valor and awarded the National Defense Service Medal, the Korean Service Medal with Two Bronze Service Stars, a Meritorious Unit Commendation, the United Nations Service Medal and a Good Conduct Medal. Both Councilwoman Jannie Blackwell and the late Lucien Blackwell believed in the visions we had for Kirkbride Center and have stood by us on many occasions. Mr. Fleming noted we are pleased that the mission of Kirkbride Center and the Blackwell Human Service Campus is symbolic of the care and leadership displayed by Councilwoman Blackwell and the late Representative Lucien Blackwell in fighting for the poor, the needy, and the disenfranchised of Philadelphia. CoreCare Systems, Inc. is a regional provider of behavioral services in Southeastern Pennsylvania. It provides services to adolescents, dual diagnosis, and drug and alcohol rehabilitation patients. The Company also conducts clinical drug trials as well as developing its real estate holdings. COVANTA ENERGY: Liquidation Plan's Claims & Interests Treatment --------------------------------------------------------------- The Covanta Energy Debtors' Liquidation Plan does not classify and excludes the Administrative Expense Claims and Priority Tax Claims from the Classes. As to each Liquidating Debtor, a Claim or Equity Interest will be deemed classified in a particular Class or Subclass only to the extent that the Claim or Equity Interest qualifies within the description of that Class or Subclass. Unclassified Claims A. Administrative Expense Claims Each Liquidating Debtor will pay to each holder of an Allowed Administrative Expense Claim against the Liquidating Debtor, in full satisfaction, settlement, release and discharge of and in exchange for the Allowed Administrative Expense Claim, Cash in an amount equal to the Allowed Administrative Expense Claim on the Initial Liquidation Distribution Date from the Operating Reserve provided that any liabilities not incurred in the ordinary course of business were approved by a Final Order of the Court To the extent that the Allowed Administrative Expense Claims represent liabilities incurred in the ordinary course of business by the Liquidating Debtor, as a debtor-in-possession, it will be paid by the Liquidating Trustee from the Operating Reserve in the ordinary course of business. To the extent that the Administrative Expense Claim Bar Date applies, failure to file a timely request for payment of an Administrative Expense Claim prior to the Administrative Expense Claim Bar Date will forever bar and discharge the Administrative Expense Claim. B. Compensation and Reimbursement Claims Except with respect to Substantial Contribution Claims, all (i) Retained Professionals and (ii) Persons employed by the Liquidating Debtors or serving as independent contractors to the Liquidating Debtors in connection with their liquidating efforts that are seeking an award by the Court of compensation for services rendered or reimbursement of expenses incurred through and including the Confirmation Date, other than the Liquidating Trustee and any Retained Liquidation Professionals, will file and serve on the counsel for the Liquidating Debtors and as otherwise required by the Court and the Bankruptcy Code their final applications for allowance of compensation for services rendered and reimbursement of expenses incurred on or before the date that is 45 days after the Effective Date. Any request for payment of an Administrative Expense Claim of the type specified in the Liquidation Plan, which is not filed by the applicable deadline, will be barred. C. Priority Tax Claims Subject to the consent of the requisite New Facility Lenders and Additional New Lenders, an Allowed Priority Tax Claim Holder will receive in full satisfaction, settlement, release and discharge of and in exchange for the Allowed Priority Tax Claim, Cash equal to the unpaid portion of the Allowed Priority Tax Claim on or as soon as practical after the later of: (i) 30 days after the Effective Date, or (ii) 30 days after the date on which the Priority Tax Claim becomes Allowed. However, at its option, the Liquidating Trustee may pay any or all Allowed Priority Tax Claims over a period not exceeding six years after the date of assessment of the Priority Tax Claims as provided in Section 1129(a)(9)(C) of the Bankruptcy Code. In no event will the Liquidating Trustee extend the date of repayment beyond the Final Liquidation Determination Date. If the Liquidating Trustee elects this option as to any Allowed Priority Tax Claim, then the Liquidating Trustee will make payment of simple interest on the unpaid portion of the Claim semi-annually without penalty of any kind, at the statutory rate of interest provided for the taxes under applicable non-bankruptcy law, with the first interest payment due on the latest of: (i) six months after the Effective Date, (ii) six months after the date on which the Priority Tax Claim becomes an Allowed Claim, or (iii) at a time as may be agreed to by the Priority Tax Claim Holder and the Liquidating Trustee. The Liquidating Trustee will reserve the right to pay any Allowed Priority Tax Claim, or any remaining balance of the Allowed Priority Tax Claim, in full, at any time on or after the Effective Date, without premium or penalty. D. DIP Financing Facility Claims On the Effective Date, the Liquidating Debtors will perform their obligations under the DIP Lender Direction and, subject to the provisions of the Reorganization Plan, and in consideration of the Reorganizing Debtors' and the Heber Debtors' obligations under the Reorganization Plan, all amounts outstanding under the DIP Financing Facility and all commitments will automatically and irrevocably terminate. Classified Claims Under the Liquidation Plan, the treatment to be accorded, with respect to each Liquidating Debtor, to each Class of Claims and Equity Interests is summarized as: Class 1: Allowed Priority Non-Tax Claims Each Allowed Class 1 Claim Holder will receive cash in an amount equal to the Allowed Class 1 Claim on the Initial Liquidation Distribution Date. Class 1 Claims are unimpaired, and Allowed Class 1 Claim Holders are not entitled to vote to accept or reject the Liquidation Plan. Class 2: Intentionally Omitted Class 3: Allowed Reorganized Covanta Secured Claims Subclass 3A: Allowed Liquidation Secured Claims -- Secured Bank Claims A. Each Allowed Liquidation Secured Claim Holder would be entitled, absent the Secured Creditor Direction, to receive on any Liquidation Distribution Date, the holder's Pro Rata Share of the sum of any Net Liquidation Proceeds and Liquidation Assets of the Liquidating Pledgor Debtors existing, but not yet distributed on the Liquidation Distribution Date, and on the Effective Date: (1) The holder of a Class 3A Allowed Liquidation Secured Claim will be deemed to have received, on account of its Subclass 3A Allowed Liquidation Secured Claim, the Distribution it receives as a holder of a Subclass 3A or Subclass 3B Claim under the Reorganization Plan, as applicable, in full satisfaction of its Subclass 3A Claim under the Liquidation Plan, and (2) The Liquidating Trustee and the Liquidating Debtors will implement the Secured Creditor Direction. B. Each holder of an Allowed Liquidation Secured Claim will be entitled to receive on any Liquidation Distribution Date, the holder's Pro Rata Share of any Net Liquidation Proceeds of any Liquidating Pledgor Debtor's Residual Liquidation Assets. Subclass 3A Claims are impaired and the Subclass 3A Claim Holders are entitled to vote to accept or reject the Liquidation Plan. Subclass 3B: Allowed Liquidation Secured Claims -- 9.25% Debenture Claims On the Effective Date, Ogden FMCA will cause to be transferred to CSFB, in its capacity as holder of the Allowed Secured CSFB Claim, the Bank Agreement Ogden FMCA Collateral, in full settlement, release and discharge of its Class 3B Claim. The Subclass 3B Claim is impaired and the Subclass 3B Claim Holder is entitled to vote to accept or reject the Liquidation Plan. Class 4: Intentionally Omitted Class 5: Intentionally Omitted Class 6: Intentionally Omitted Class 7: Allowed Unsecured Liquidation Claims and Allowed Insured Claims The Class 7 Claim Holders will not be entitled to receive any Distribution under the Liquidation Plan. To the extent that insurance is available, the Allowed Class 7 Claims will be paid in the ordinary course of the Liquidating Debtors' business to the extent of the insurance, when the Claims become Allowed Claims and the insurance proceeds become available. To the extent that insurance is not available or is insufficient, treatment of the Allowed Class 7 Claim will be as otherwise provided in the Liquidation Plan. Class 7 Claims are Impaired and Class 7 Allowed Claim Holders are conclusively presumed to reject the Liquidation Plan. The votes of Class 7 Claim Holders will not be solicited. Class 9: Intercompany Claims Subclass 9A: Liquidating Debtors Intercompany Claims Each Liquidating Debtors Intercompany Claim will be deemed cancelled or waived in exchange for the Reorganizing Debtors' contribution of the Operating Reserve Deficiency Amount, if any, to the Operating Reserve. Class 9 Claims are impaired and Allowed Class 9 Claim Holders are conclusively presumed to reject the Liquidation Plan. The votes of the Allowed Class 9 Claim Holders will not be solicited. Class 11: Equity Interests in Subsidiary Debtors On the Effective Date, all Equity Interests in the Liquidating Debtors will not be entitled to receive any Distributions under the Liquidation Plan. The Equity Interests will be cancelled, annulled and extinguished. Class 11 Equity Interests are impaired and the Class 11 Equity Interest Holders are conclusively presumed to reject the Liquidation Plan. The votes of the Class 11 Equity Interest Holders will not be solicited. (Covanta Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 609/392-0900) CREDIT SUISSE: Fitch Keeps Watch on B+/CCC Note Class Ratings ------------------------------------------------------------- Fitch Ratings affirms and removes from Rating Watch Negative class B from CS First Boston Mortgage Securities Corp. multifamily mortgage pass-through certificates, series 1995-M1. Fitch also affirms classes A and A-X at 'AAA'. In addition, the following classes remain on Rating Watch Negative by Fitch: -- $7.8 million class C 'A'; -- $2.8 million class D 'BBB-'; -- $5.1 million class E 'B+'; -- $1.5 million class F-1 'CCC'; -- $1.2 million class F-2 'CCC'. Fitch does not rate the $1.8 million class G-1 or class G-2 has been reduced to zero due to realized losses. The Rating Watch Negative status remains as a result of the interest shortfalls, which as of the August 2003 remittance date affect classes C, D, E, F-1, F-2 and G-1 (not rated by Fitch). Class B is removed from Rating Watch Negative as the shortfalls have been repaid. The rating affirmations are a result of overall stable pool performance. The transaction's structure is such that losses are absorbed by classes depending on the originator of the disposed loan. Dynex originated loans are absorbed first by class G-2, then G-1, followed by F-2 and F-1. CBA originated loans however are first absorbed by class G-1, then G-2, followed by F-1 and F-2. GMACCM, as master servicer, collected year-end (YE) 2002 operating statements for approximately 87% of the pool. The weighted average debt service coverage ratio remains stable at 1.33 times. The largest loan of concern is St. Andrews (6.9%), a multifamily property located in Columbia, SC. This property, like all properties in this transaction, is a low income tax credit loan. The occupancy and net operating income decreased due to increased evictions and missed rent payments. The second largest loan of concern is OakRidge (6.1%) a multifamily property located in Macon, Georgia. The borrower believes the low occupancy is due to the lack of public transportation within close proximity as well as their difficulty finding tenants who meet the tax credit criteria. This entire transaction is composed of Low Income Housing Tax Credits. According to an internal analysis, all of the tax credits that have not been paid will be paid in full within the next year. Tax credits are earned over 15 years and paid out over 10 years. Fitch is concerned that the borrowers will have difficulty funding debt service without the tax credits. Fitch will continue to closely monitor loans that have low debt service coverage ratios. Hypothetical stress scenarios were applied to the trust, where specially serviced and other loans that concerned Fitch as having the potential to become problematic were assumed to default. Even under these stress scenarios, the resulting subordination levels remain sufficient to affirm classes A and A-X and remove class B from Rating Watch Negative. In addition, Fitch also maintains the Rating Watch Negative status on classes C, D, E, F-1 and F-2. Fitch will continue to monitor the interest shortfalls and will revisit the ratings as necessary. DALEEN TECHNOLOGIES: Expands Strategic Partnership with Danet ------------------------------------------------------------- Daleen Technologies, Inc. (OTCBB:DALN), a global provider of licensed and outsourced billing and customer management, OSS and revenue assurance solutions for traditional and next generation service providers, announced an expansion of its long-standing strategic partnership with Danet which will bring practical, ROI- driven revenue assurance and cost management solutions to convergent telecom service providers. The two companies are extending their current billing and OSS relationship to collaborate in the sales and delivery of comprehensive revenue assurance and cost management solutions, including Daleen's new Asuriti(TM) software, and Danet's financial assurance solutions. Introduced in June of 2003, Asuriti is designed to maximize a service provider's revenues through the detection and elimination of leaks, gaps and errors in data, systems and processes that can delay, compromise or prevent accurate revenue recovery. In recent months, revenue assurance and cost management initiatives have taken a higher profile among telecom senior managers as evidence that both the problem -- and of effective solutions -- have mounted. On average, the amount of annual revenue leakage among telecom providers is estimated to be between 3% and 11% of gross revenues, although some studies place losses among wireless and IP-based carriers significantly higher. For a mid-sized carrier with revenues in the $75 - 100 million range, that equates to a loss of anywhere from $2.25 million up to $11 million a year, a number that is too large for today's earnings- conscious executives to ignore. The industry has rallied around this problem, producing a myriad of solutions that range from consulting services and audits to process re-engineering and automated tools. "While any one of these can have a positive impact, we believe that technology-based solutions are the best way to ensure long term results for an evolving organization," explains Frank Dickinson, senior vice president of marketing and product management for Daleen. "Our partnership with Danet combines the benefits of the Asuriti toolset with Danet's established financial assurance offering to offer sustainable improvement to our customers' bottom lines." Danet's financial assurance practice incorporates the traditional practices of revenue assurance and cost management processes to create permanent and comprehensive results that improve a company's financial well-being. Its philosophy, like Daleen's, is based on leaving each customer with the measures, statistics, processes and tools that allow for ongoing monitoring and improvement of that area. Danet's goal for customers is not to achieve operational efficiency for its own sake, but rather immediate, measurable and sustainable improvement to the company's bottom line. Using a holistic approach that examines a company from end-to-end, Danet has successfully delivered significant monthly, recurring savings to numerous customers. "Asuriti continues Daleen's strong legacy of harnessing advanced technology to deliver highly-functional tools that improve the speed, accuracy and processing of mission critical data," said George Bordo, Danet's president and CEO. "This partnership taps into both companies' core competencies, bringing together product, solutions, and a deep understanding of telecom processing to solve one of the most pressing problems the industry faces today." Asuriti reaches across networks and into a provider's OSS, using intricate business rules to validate, track, analyze, and enhance data as it moves between systems so that providers can identify and correct discrepancies as they occur, before they result in lost revenue. Its highly-configurable architecture allows providers to take proactive steps to address a wide variety of scenarios where revenue leakage is likely. These include the ability to calculate expected charges against actual charges to detect over-billing conditions; validate charges, costs and margins associated with services or partners to analyze profitability; and capture records that were previously "dropped" to increase revenue. Asuriti works in parallel to a provider's existing systems with minimal disruption to or degradation of operational processes. Customers may license the software or outsource their revenue assurance processes to Daleen through its BillingCentral(R) ASP. Daleen Technologies, Inc. is a global provider of high performance billing, OSS and revenue assurance software, with a comprehensive outsourcing solution for traditional and next generation service providers. Daleen's solutions utilize advanced technologies to enable providers to reach peak operational efficiency while driving maximum revenue from products and services. Core products include its RevChain(R) billing and customer management software, Asuriti(TM) event management and revenue assurance software, and BillingCentral(R) ASP outsourcing services. More information is available at http://www.daleen.com Danet is a global provider of information technology services and business solutions. Danet delivers business consulting, systems integration, application development and operations services to enable clients to accelerate growth, streamline operations and create new levels of customer value. Principal Danet shareholders include SAIC and Deutsche Telekom AG. Danet is uniquely positioned to provide the abundant resources, knowledge base, and diverse offerings of a large organization, as well as the responsiveness and flexibility of a smaller organization. * * * LIQUIDITY AND GOING CONCERN UNCERTAINTY In its 2002 Annual Report filed on SEC Form 10-K, Daleen reported: "Net cash used in operating activities was $9.2 million for the year ended December 31, 2002, compared to $31.9 million for the year ended December 31, 2001. The principal use of cash for both periods was to fund our losses from operations. "Net cash provided by financing activities was $3.6 million for the year ended December 31, 2002, compared to $25.1 million for the year ended December 31, 2001. In 2002, the cash provided was primarily related to the net proceeds received from the 2002 Private Placement. In 2001, the cash provided was primarily related to the net proceeds received from the 2001 Private Placement. "Net cash used in investing activities was $1.1 million for the year ended December 31, 2002 compared to $1.9 million for the year ended December 31, 2001. The cash used in 2002 was primarily related to transaction costs associated with the 2002 Private Placement. The cash used in 2001 was primarily related to a non- recourse note receivable issued to our chairman and chief executive officer for approximately $1.2 million and capital expenditures of approximately $780,000. "We continued to experience operating losses during the year ended December 31, 2002 and had an accumulated deficit of $210.9 million at December 31, 2002. Cash and cash equivalents at December 31, 2002 was $6.6 million. The cash used in operations during the year ended December 31, 2002 was a significant improvement from previous years. The 2001 Restructurings and 2002 Restructuring resulted in a reduction in operating expense levels and cash usage requirements in the year ended December 31, 2002. "We intend to continue to manage our use of cash. We believe the cash and cash equivalents at December 31, 2002, together with the reduced cost structure resulting from the 2001 Restructurings and 2002 Restructuring, the acquisition of the revenue stream expected from the BillingCentral service offering as well as our 2003 anticipated revenue, may be sufficient to fund our operations for the foreseeable future. However, the telecommunications and software industries are still faced with many challenges. In addition, there is a high business concentration risk with certain of our outsourcing services customers and if any of these customers were to terminate their agreement with us it would severely impact our business. We provide outsourcing services to our largest customer pursuant to a contract expiring at the end of December 2003. In addition, the customer has financial restraints. If this customer were to cease doing business with us for any reason, we may be required to further reduce our operations and/or seek additional public or private equity financing or financing from other sources or consider other strategic alternatives. There can be no assurances that additional financing or strategic alternatives will be available, or that, if available the financing or strategic alternatives will be obtainable on terms acceptable to us or that any additional financing would not be substantially dilutive to our existing stockholders. If this customer were to cease doing business with us for any reason, and we failed to obtain additional financing or failed to engage in one or more strategic alternatives it may have a material adverse affect on our ability to meet our financial obligations and to continue to operate as a going concern. Our audited consolidated financial statements included elsewhere in this Form 10-K have been have been prepared assuming that we will continue as a going concern, and do not include any adjustments that might result from the outcome of this uncertainty." DII INDUSTRIES: Begins Solicitation of Asbestos Plan Acceptance --------------------------------------------------------------- Halliburton's (NYSE: HAL) DII Industries, Kellogg Brown & Root and other affected subsidiaries have begun the solicitation process in connection with the planned asbestos and silica settlement. The disclosure statement, which incorporates and describes the plan of reorganization and trust distribution procedures, is being printed and mailed to asbestos and silica claimants for the purpose of soliciting votes to approve the plan of reorganization. The company expects that the mailing process will be complete in less than two weeks. The disclosure statement is now posted on the Halliburton Web site at http://www.halliburton.com Trade and financial creditors of DII Industries, Kellogg Brown & Root, and the other filing companies are not impaired under the proposed plan and are not being solicited. Remaining conditions to a Chapter 11 filing by the affected Halliburton subsidiaries include completion of definitive financing arrangements, approval of the plan of reorganization by required creditors, including at least 75% of known present asbestos claimants, and Halliburton board approval. As previously announced, as a result of an increase in the estimated number of current asbestos claims, the cash required to fund the settlement may modestly exceed $2.775 billion. If this occurs, the company would need to reach an agreement with the claimant representatives to adjust the settlement matrices to reduce the overall amounts or increase the amounts the company would be willing to pay to resolve its asbestos and silica liabilities, resulting in an additional condition to a Chapter 11 filing. If all remaining conditions are timely satisfied, the company anticipates that DII Industries, Kellogg Brown & Root and the other affected subsidiaries would be in a position in November to make the Chapter 11 filing. Halliburton has completed and signed commitment letters for financing facilities relating to the proposed settlement and Chapter 11 filing. Halliburton launched the syndication of the financing facilities in August, led by co-lead arrangers Citigroup Global Markets Inc. and J.P. Morgan Securities Inc., and expects definitive financing arrangements to be in place prior to the Chapter 11 filing. Halliburton, founded in 1919, is one of the world's largest providers of products and services to the petroleum and energy industries. The company serves its customers with a broad range of products and services through its Energy Services and Engineering and Construction Groups. The company's World Wide Web site can be accessed at http://www.halliburton.com DOMAN INDUSTRIES: Canadian Court Extends CCAA Stay Until Oct. 10 ---------------------------------------------------------------- Doman Industries Limited announced that the Supreme Court of British Columbia issued an order, in connection with proceedings under the Companies Creditors Arrangement Act, extending the stay of proceedings to October 10, 2003. A copy of the order may be obtained by accessing the Company's Web site at http://www.domans.com The Company's application to extend the stay of proceedings to November 24, 2003 to provide it with additional time to consider other potential financing alternatives was adjourned to be heard on October 10, 2003 to permit the Court to hear full argument on an application by the Tricap Restructuring Fund which was adjourned to the same date. The Tricap application requests that the Court convene a meeting of affected creditors to vote on a plan of compromise or arrangement submitted with its application. The differences between the Tricap Plan (which is similar, but not identical to the proposal Tricap submitted to the Company on July 11, 2003, which subsequently lapsed) and the draft plan of compromise or arrangement that was submitted to the Court by the Company on February 27, 2003, include the following: - instead of full payment to all trade creditors, trade creditors will be treated similarly to the unsecured noteholders in the unsecured creditor class; - current shareholders will not be entitled to any equity, post-restructuring under the Tricap Plan; - the Tricap Plan incorporates a fully underwritten refinancing commitment of US$160 million to enable repayment of the existing senior secured note obligations; - the new 12% junior notes under the Tricap Plan will be unsecured, and will include interest deferral privileges and the ability to repay the notes on maturity or redemption in equity rather than cash; - the conversion ratio applicable to the new 8% secured convertible debentures to be issued by way of a rights offering to all affected creditors will be increased from 1,364.3 common shares for each US $1,000 principal amount of debentures to 1,964.91 common shares for each US $1,000 principal amount of debentures in the Tricap Plan; and - provision for the possible shutdown of the Port Alice mill and the separation of the liabilities relating to that operation from the liabilities dealt with under the Tricap Plan. The Company understands that the two other members of the original noteholders group do not support the Tricap Plan. Doman is an integrated Canadian forest products company and the second largest coastal woodland operator in British Columbia. Principal activities include timber harvesting, reforestation, sawmilling logs into lumber and wood chips, value-added remanufacturing and producing dissolving sulphite pulp and NBSK pulp. All the Company's operations, employees and corporate facilities are located in the coastal region of British Columbia and its products are sold in 30 countries worldwide. ENRON CORP: Baupost & Racepoint Wants Plan Examiner Appointed ------------------------------------------------------------- The Baupost Group, LLC and Racepoint Partners, LP, as holders of over $1,600,000,000 senior unsecured claims against Enron Corporation, ask the Court, pursuant to Sections 105 and 1106 of the Bankruptcy Code, to direct the appointment of an examiner to investigate and report on the fairness, from the standpoint of the Enron estate and creditors, of the proposed settlement of inter-estate disputes between the estate and creditors of Enron Corp. and the estate and creditors of Enron North American Corporation that is contained in the Debtors' Plan of Reorganization. Almost from their inception, it has been clear that these Chapter 11 cases would evolve the resolution of substantial inter-estate issues and disputes, particularly between the estates and creditors of Enron and ENA, and that the ultimate result in these Chapter 11 cases would turn on the resolution of those issues. Isaac M. Pachulski, Esq., at Stutman, Treister & Glatt, in Los Angeles, California, notes that the centerpiece of the Debtors' Plan is the proposed Inter-Estate Compromise. As but one example, the Inter-Estate Compromise resolves, among others, "certain asset ownership disputes between Enron and ENA." As part of the settlement, "beneficial interests in certain assets that were purportedly transferred to Enron as a result of certain transactions are returned to ENA." However, Mr. Pachulski points out, the negotiating process that led to the proposed Inter- Estate Compromise evolved into a process that was stacked against Enron's estate and creditors. The proposed Inter-Estate Compromise was negotiated by three participants -- the Debtors, the Official Committee of Unsecured Creditors and the ENA Examiner. The Debtors have fiduciary duties to the estates and creditors of both Enron and ENA. The Creditors' Committee has fiduciary duties to the creditors of both Enron and ENA. The ENA Examiner has duties "solely to ENA." In contrast, these critical negotiations did not include any party who acted "solely" for Enron. Instead, while the interests of Enron's estate and creditors were represented in the negotiations only by participants with fiduciary duties to the estates and creditors of both Enron and ENA, the interests of ENA's creditors were represented by a party whose duties ran solely to ENA. "This was like having a dispute between two parties settled by a mediation in which the only participants are the mediator and a representative of one of the two adverse parties," Mr. Pachulski remarks. In light of the actual conflict between the two jointly represented estates over an issue like asset ownership, the interests of both estates should have been represented by a party who does not owe allegiance to both estates. Upon learning of these unbalanced negotiations, by a letter dated May 12, 2003, Baupost and Racepoint advised the Debtors and the Creditors' Committee of their concern about the absence of a "solely Enron" advocate for the interests of the Enron estate and creditors to counterbalance the demands of the "solely ENA" ENA Examiner, and sought unsuccessfully to be included "at the table" in these negotiations in order to create a level playing field. Although the Debtors' counsel then described the Debtors' position as one of "trying to balance all sides", the Debtors' idea of "balance was to negotiate one-way modifications with the ENA Examiner and the ENA Sub-Group of the settlement on which the Debtors and the Creditors' Committee previously agreed, without any comparable negotiation with Baupost and Racepoint or any other "Enron only" representative. Thus, although Baupost and Racepoint sporadically received some limited information about those one-way negotiations, they were not included in these negotiations. The result was an unbalanced and unfair negotiation. Based on the limited information contained in the Proposed Disclosure Statement, the proposed Inter-Estate Settlement that resulted from the negotiation may be summarized as: (a) With certain exceptions, distributions to creditors will generally be calculated as if there was a 30% likelihood of substantive consolidation; (b) The guarantee claims of creditors of ENA and other Debtors against Enron that would be eliminated in the event of substantive consolidation will be accorded a preferential exception from the 30% likelihood of substantive consolidation benchmark. By way of background, because claims against one debtor based on guarantees of the debt of another debtor are eliminated under substantive consolidation, a benchmark which allocated value based on a 30% likelihood of substantive consolidation and a 70% likelihood of no substantive consolidation, would provide for a distribution on account of only 70% of the Enron Guaranty Claims. Instead, the proposed settlement will accord the holders of Enron Guaranty Claims distribution on 70% of their claims as if there were no substantive consolidation, plus a distribution equal to 15% of what they would receive if substantive consolidation occurred but their guarantee claims were nevertheless allowed in full. Thus, distributions on Enron Guaranty Claims will be effectively calculated as if there were only a 15% likelihood of substantive consolidation, all in addition to the distribution on their claims against ENA; (c) Three substantial assets Enron owned will be "deemed" to be assets of ENA in whole or in part. These assets include 100% of the net economic equity value of Enron Canada Corp.' 15% of the net economic value of Compagnie Papiera Stadocoma and 100% of the net economic value of Bridgeline. The proposed Disclosure Statement does not disclose the basis for "deeming" these valuable Enron Assets to be assets of ENA's estate, and no one has articulated to Baupost and Racepoint the basis for so doing; (d) Distributions on intercompany claims will be based on the 70% allowance of the intercompany claims; (e) All intercompany preference and other avoidance claims will be eliminated; and (f) Any defense to intercompany claims based on Section 502(d) of the Bankruptcy Code will be eliminated. Thus, Enron will be stripped of any defense under Section 502(d) to the multi-billion dollar intercompany claim that ENA asserts against Enron. According to Mr. Pachulski, at this point, Baupost, Racepoint and other Enron creditors who may share their criticism of the negotiating process and the proposed settlement have two alternatives: (1) to litigate objections to the Inter-Estate Compromise that will entail significant discovery from the Debtors, the Creditors' Committee, the ENA Examiner and others to bring all relevant facts to light and to go beyond the glib, self-serving generalities in the proposed Disclosure Statement; and (2) the Court's appointment of an Enron Plan Examiner to investigate and report to the Court on whether this compromise is fair to the Enron estate and creditors in light of potential litigation outcomes, the value of what they are receiving and the value of what they are giving up. If the Enron Plan Examiner concludes that the Inter-Estate Compromise is fair, then litigation over the compromise should be forestalled. If the Enron Plan Examiner concludes to the contrary, then he or she can serve a function for the Enron estates and creditors similar to that which the ENA Examiner served for the ENA estate and creditors -- act as a plan facilitator and negotiate appropriate modifications to the Plan that may forestall litigation over what Baupost and Racepoint believe to be a fundamentally flawed settlement. Thus, Mr. Pachulski contends that the appointment of an Enron Plan Examiner is warranted since: (a) the issue of whether the settlement of inter-estate and inter-creditor disputes is fair to Enron creditors is "relevant to the case or the formulation of a plan;" (b) the proposed investigation and report will materially assist the Court of the settlement from the standpoint of its fairness to Enron's estate and creditors; (c) it will clarify a number of significant issues raised in the Inter-Estate Compromise but was not addressed in any meaningful way in the Disclosure Statement, including: -- Why is the 30% likelihood of substantive consolidation reasonable, especially in light of the other concession made on Enron's behalf? -- Why does the proposed settlement treat holders of Enron Guaranty Claims better than other creditors with respect to the issue of substantive consolidation, by effectively using a lower likelihood of substantive consolidation as their distribution benchmark, when it is axiomatic that the existence of inter-corporate guarantees is a factor that weighs in favor of substantive consolidation? -- What is the legal and factual basis for giving these Enron assets to ENA's estate and creditors? -- What is the value of the assets that Enron is giving to ENA? -- What did Enron receive in return for transferring what may be hundreds of millions of dollars worth of assets to ENA? -- Are there any legal or factual arguments to support the contention that assets that are reflected on ENA's books and records as ENA assets should be "deemed" to be Enron's assets and, if so, what is the value of those assets? -- What is the magnitude of the potential avoidance claims of Enron against ENA and other Debtors? -- Does Enron have potential avoidance claims against ENA with respect to the billions of dollars that appear to have been transferred from Enron to ENA between mid- October 2001 and the Petition Date? -- What defenses, if any, would exist as to any intercompany avoidance claims? and -- What is the likelihood that a Section 502(d) defense would otherwise be available to Enron? (d) the requested investigation and report will not delay the Plan proceedings; instead, it will facilitate and streamline it; and (e) in light of the huge sums that have been expended in these cases to address issues that are not nearly as fundamental to a fair and balanced outcome of these cases as the fairness of the settlement, the cost of the requested investigation should not exceed the cost of the ENA Examiner's services as an estate-funded advocate for the ENA creditors. (Enron Bankruptcy News, Issue No. 79; Bankruptcy Creditors' Service, Inc., 609/392-0900) FLEXTRONICS INT'L: Will Host Analyst and Investor Day Tomorrow -------------------------------------------------------------- Flextronics (Nasdaq: FLEX), a global provider of operational services focused on delivering design, engineering, manufacturing and logistic solutions to technology companies, will host an Analyst and Investor Day on September 25, 2003, in New York City. Management presentations will begin at 12:00 Noon EDT. A live Web cast of the presentations will be available at http://www.flextronics.com A replay of the Web cast will remain available on the Company's Web site for 90 days after the presentation day. Minimum requirements to listen to the broadcast are Microsoft Windows Media Player software -- free download at http://www.microsoft.com/windows/windowsmedia/download/default.asp -- and at least a 28.8 Kbps bandwidth connection to the Internet. Headquartered in Singapore, Flextronics (S&P, BB+ Corporate Credit Rating, Stable) is the leading Electronics Manufacturing Services provider focused on delivering supply chain services to technology companies. Flextronics provides design, engineering, manufacturing, and logistics operations in 29 countries and five continents. This global presence allows for supply chain excellence through a network of facilities situated in key markets and geographies that provide customers with the resources, technology, and capacity to optimize their operations. Flextronics' ability to provide end-to-end services that include innovative product design, test solutions, manufacturing, IT expertise, network services, and logistics has established the Company as the leading EMS provider with revenues of $13.4 billion in its fiscal year ended March 31, 2003. For more information, please visit http://www.flextronics.com FRUIT OF THE LOOM: Settles Dispute with Commonwealth of Kentucky ---------------------------------------------------------------- On May 15, 2003, the Commonwealth of Kentucky filed Claim No. 9050 against Fruit of the Loom, Ltd.'s estate for $1,694,410. The Claim constitutes a $1,034,713 prepetition unsecured priority claim and a $659,697 postpetition administrative expense claim. In addition, on May 28, 2003, Kentucky filed Claim No. 9052 for a $632,272 postpetition administrative expense claim, which amended and superceded Claim No. 9050. At the FOL Liquidating Trust's request, the Court disallowed and expunged Claim No. 9050 and reduced certain claims objected to by the FOL Liquidation Trust. Pursuant to the Order, the prepetition portion of Claim No. 9050 was disallowed and expunged and the postpetition administrative expense portions of Claim Nos. 9050 and 9052 were reduced to $236,592. In a Court-approved Stipulation, the FOL Liquidation Trust and the Unsecured Creditors' Trust, on the one hand, and the Commonwealth of Kentucky, on the other, agree that: (1) Kentucky will have an allowed administrative expense claim for $236,592, which will be paid immediately; and (2) Donlin, Recano & Company, Inc., as the Court-appointed Claims agent for the Debtors, is directed to amend the Debtors' Claims register and schedules to reflect the terms of this Stipulation. (Fruit of the Loom Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service, Inc., 609/392-0900) G+G RETAIL INC: S&P Downgrades Corporate Credit Rating to B ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on G+G Retail Inc. The corporate credit rating is now 'B' and the outlook is negative. New York, New York-based G+G, a national mall-based retailer of female junior and preteen apparel, had $105 million of funded debt on the balance sheet as of Aug. 2, 2003. "The rating action reflects G+G's weak operating performance through the first half of 2003, deteriorating cash flow protection measures, and Standard & Poor's expectations that the company will be challenged to improve results due to the difficult retail environment and intense competition in the teen apparel segment," said credit analyst Ana Lai. G+G reported a sharp decline in same- store sales, with this measure falling 13.8% during the first half of 2003. Lower average selling price, increased markdowns to clear inventory, and a poorly received merchandising mix that emphasized basics contributed to the company's weak operating performance. The rating on G+G reflects the company's participation in the highly competitive retail market for girl's teenage apparel, substantial fashion risk, the company's relatively small size compared with other industry participants, and weakening operating performance. Liquidity remains adequate. G+G had about $26 million under its $30 million revolving credit facility, which matures in May 2006. In addition, the company does not have any significant debt maturities until 2006 when its $107 million senior notes mature. GENTEK INC: Seeks Stay Relief to Allow Class 11 Treatment --------------------------------------------------------- GenTek Inc., and its debtor-affiliates ask the Court to modify the automatic stay for the sole purpose of allowing them and the law firm of Golomb & Honik to take certain preliminary consensual actions in the Court of Common Pleas for the Commonwealth of Pennsylvania. According to Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, at Wilmington, Delaware, this would permit timely implementation of the settlement proposed in the Plan for holders of Pennsylvania Tort Claims, assuming that the conditions to the settlement proposal are satisfied. Mr. Chehi explains that the automatic stay would remain in effect with respect to all other aspects of the lawsuits pending before the Pennsylvania Court. The plaintiffs in the lawsuits pending before the Pennsylvania Court are holders of Pennsylvania Tort Claims, which are treated in Class 11 of the Plan. The Plan offers alternative treatment to the holders of these Claims depending on whether Class 11 Acceptance occurs. Class 11 Acceptance will be deemed to occur upon: (a) the Debtors' receipt of a sufficient number of votes in Class 11 to constitute an acceptance of the Plan by such Class under Section 1126(c) of the Bankruptcy Code; and (b) Pennsylvania Class Settlement Approval. The Pennsylvania Class Settlement Approval is deemed to occur upon: (a) execution of a class action settlement agreement by Golomb & Honik that settles, bars, releases and discharges all claims, liabilities and causes of action that have been or may be asserted by any former or current employee of Sun Oil Company arising out of the Pennsylvania Tort Claims and will include a dismissal with prejudice of all pending related lawsuits in the Pennsylvania Court as well as all appeals pending in the Superior Court for the Commonwealth of Pennsylvania; and (b) occurrence of these events: -- preliminary approval of the class action settlement agreement by the Pennsylvania Court; -- service of notice on the class action settlement agreement to all purported class members; -- expiration of the opt-out objection period that will be set by the Pennsylvania Court; -- final approval of the class action settlement agreement by the Pennsylvania Court; -- expiration of all related appeals or appeal periods; and -- execution by the Debtors' insurer of a binding agreement to make the $1,300,000 cash payment as contemplated by the Plan. Mr. Chehi states that although the process of soliciting votes on the Plan has just commenced, there is good cause to expect that Class 11 will vote to accept the Plan and, therefore, good reason to take preliminary consensual steps in the Pennsylvania Court for the purpose of ensuring that the Pennsylvania Class Approval Settlement will be timely obtained. (GenTek Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 609/392-0900) GENUITY: Court Fixes Oct. 15 as Interim Admin. Claims Bar Date -------------------------------------------------------------- U.S. Bankruptcy Court Judge Beatty directs all persons and entities, asserting Administrative Claims against the Genuity Debtors which arose on or after the Petition Date and through and including July 31, 2003, to file a proof of claim in writing so that it is received on or before October 15, 2003, at 5:00 p.m. Judge Beatty rules that the Proofs of Administrative Claim: (a) must be filed with the Debtors' Claims Agent either by mailing or delivering by hand or overnight courier to the Bankruptcy Court; (b) will be deemed filed only when received by the Clerk of the Bankruptcy Court on or before the Interim Administrative Claims Bar Date; (c) must be signed, be in the English language, be denominated in United States currency, and include supporting documentation; and (d) must specify by the Debtor's name and case number against which the claim is filed. If the holder asserts a claim against more than one Debtor, a separate proof of claim form must be filed with respect to each Debtor. Judge Beatty clarifies that a proof of Administrative Claim need not be filed on or before the Interim Administrative Claims Bar Date with respect to any Administrative Claim: (a) accruing after July 31, 2003; (b) for compensation and reimbursement of expenses of Professionals pursuant to Sections 327, 328, 329, 330, 331, 503(b)(1) or 1103 of the Bankruptcy Code, or asserted pursuant to Sections 503(b)(3), (4) or (5) of the Bankruptcy Code; (c) allowed by a Court Order; (d) paid in full by any of the Debtors; (e) of one Debtor against another Debtor; and (f) of a non-debtor subsidiary of any Debtor having a claim against any of the Debtors, except Integra S.A. and its subsidiaries. Any person or entity that files an Administrative Claim in accordance with these provisions will assert the maximum amount of the Administrative Claim, and will be forever barred from asserting an Administrative Claim for the period through and including July 31, 2003 in any greater amount. Any person or entity that has timely asserted a Cure Claim must also file a proof of Administrative Claim in accordance with these provisions, and that the person or entity will assert the maximum amount of the Cure Claim, and will be forever barred from asserting a Cure Claim for the period through and including July 31, 2003 in any greater amount. The Debtors will publish the Interim Administrative Claims Bar Date Notice in the national edition of The Wall Street Journal, The Boston Globe, The Dallas Morning News, and electronically on the website of Donlin, Recano & Co. at least 25 days prior to the Interim Administrative Claims Bar Date. (Genuity Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 609/392-0900) GEORGIA-PACIFIC: Exploring Options for Building Products Biz ------------------------------------------------------------ Georgia-Pacific Corp. (NYSE: GP) is exploring strategic alternatives for its building products distribution business, including its possible sale. Georgia-Pacific's building products distribution business, which is distinct from the company's building products manufacturing segment, is the leading distributor of building products in the United States. The distribution division's 2002 net sales were $3.77 billion. "Consistent with our strategic direction for the past several years to create shareholder value by sharpening focus on Georgia- Pacific's more stable, consumer-oriented businesses and our goals of reducing debt and strengthening our balance sheet, it is natural that we fully review the strategic alternatives for the building products distribution business," said A.D. "Pete" Correll, Georgia-Pacific chairman and chief executive officer. "The interests of our customers, employees and suppliers also will be a major consideration for Georgia-Pacific as we move forward with this process." "Distribution is an attractive business with a No. 1 market share and significant positive momentum. This business has strengthened considerably through enhanced organizational effectiveness, improved internal processes and superior inventory management," said David J. Paterson, executive vice president and president - building products. "The distribution division purchases less than 30 percent of its supply from company-owned manufacturing facilities, with the balance sourced from an array of third-party vendors. Its separation may be an opportunity for the business to grow and excel, while Georgia-Pacific can continue to focus on operating its established building products manufacturing businesses and maintaining its leading supplier role with the distribution business." Georgia-Pacific's building products distribution business employs 3,390 and operates 63 U.S.-based warehouses, plus one location in Canada, from which it distributes more than 10,000 products across 14 categories, including structural panels, hardwood plywood, roofing, insulation, metal products, lumber, paneling, vinyl siding and particleboard. These products are shipped on more than 900 company-owned flatbed trucks, one of the nation's largest such fleets. All Georgia-Pacific building products operations, including the relationship between the distribution division and manufacturing units, will continue as usual, maintaining their vendor associations and serving their customers effectively and without disruption during this period. Georgia-Pacific has retained Goldman Sachs as financial advisor to assist in exploring strategic alternatives for the building products distribution business. 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 GMAC 2000-C1: Fitch Puts Class M & N's Ratings on Watch Negative ---------------------------------------------------------------- Fitch Ratings places GMAC Commercial Mortgage Securities Inc.'s mortgage pass-through certificates, series 2000-C1, $6.6 million class M 'B-' and $6.6 million class N 'CCC' on Rating Watch Negative due to the potential losses associated with the loans of concern. Fitch is in the process of gathering information on the loans of concern, including the specially serviced loans, and will revisit the ratings of this deal over the next few weeks. GOLDRAY INC: Seeks Creditor Protection Under BIA in Canada ---------------------------------------------------------- Goldray Inc., (trading symbol TSX Venture "GLS") has filed a Notice of Intention to Make a Proposal pursuant to section 50.4(1) of the Bankruptcy and Insolvency Act (Canada) seeking creditor protection in an effort to reorganize the financial affairs of the Corporation. Richter, Allan and Taylor, a licensed trustee, has been appointed by the Corporation as trustee under the Proposal. After an exhaustive process over the last year of reviewing various strategic alternatives available to the Corporation, including possible debt and equity financings, mergers and asset sale possibilities, the Corporation has elected to seek creditor protection under the Bankruptcy and Insolvency Act (Canada) in order to allow the Corporation to reorganize the financial affairs of the Corporation. This action will allow Goldray reasonable time to deal with the creditors of the Corporation on an equitable basis and to consider written expressions of interest to purchase the assets of the Corporation as a going concern. It is anticipated that the Trustee will be contacting all creditors of the Corporation in the near future regarding the Proposal. In addition, over the next 30 days, the Trustee, in conjunction with an Independent Committee of the Board of Directors of the Corporation, will attempt to finalize a sale of the assets of the Corporation as a going concern and to submit a proposal to the creditors of the Corporation in conjunction therewith. GOODYEAR TIRE: USWA Pact Meets Flexibility and Cost-Saving Goals ---------------------------------------------------------------- The Goodyear Tire & Rubber (NYSE: GT) Company announced that its new labor contract with the United Steelworkers of America meets the operational flexibility and cost-savings goals established prior to the negotiations. "Our goal for these negotiations was to achieve what some thought was impossible: a fair agreement that contributed approximately $1 billion in cost savings and cost avoidance over its three-year term without a work stoppage," said Robert J. Keegan, Goodyear chairman and chief executive officer. "Because of the many complex and delicate issues involved, this process took a considerable amount of time. But our patience and determination has been rewarded with a contract that is critical to drive our turnaround in North America." The three-year pact covering workers at 14 tire and engineered products factories in the United States gives Goodyear the ability to eliminate high-cost manufacturing capacity, contain healthcare costs, source product globally and improve productivity. It also provides a framework for ongoing cooperation between the company and the USWA. Keegan said the agreement breaks new ground in several important areas including: - containment and sharing of healthcare and prescription drug costs; - no increase in the company's retiree benefit liability caps; - a two year moratorium on pension service credit; - no general wage increases; - clearly defined cost reduction and productivity improvement requirements at every plant; and - cooperation and consultation between Goodyear and the USWA on a broad range of issues, including debt reduction. The ability to reduce high-cost manufacturing capacity in North America and leverage Goodyear's global sourcing capabilities was a significant accomplishment, according to Keegan. Acknowledging that the refinancing of the company's bank debt in April was an important first step in the turnaround effort, Goodyear committed to further improve its balance sheet by raising at least $250 million of new debt financing and $75 million of new equity-related financing during 2003. It also agreed that by the fourth quarter of 2004, it would launch a refinancing of its U.S. term loan and revolving credit facilities due in April 2005 with loans or securities having a term of at least three years. Goodyear agreed that the union can strike if it does not meet these commitments, and that it would pay each covered union employee and retiree certain payments if it does not refinance two of its U.S. credit facilities. If Goodyear does not remain in compliance with the principal financial covenants in its U.S. revolving credit facility it has agreed to seek private equity investment. "Timely refinancing of our bank debt has always been a key element of our business plan," said Keegan. As part of the new company-union partnership, Goodyear gave the USWA the right to nominate an individual for a seat on its Board of Directors, agreed to remain neutral should the union attempt to organize a non-union facility and said it will require that a buyer of any of its plants negotiate a labor agreement as a precondition of the sale. Regarding Goodyear's ability to reduce high-cost manufacturing capacity, 12 of its 14 USWA-represented plants are "protected" for the term of the contract, meaning the company will not close them. The Goodyear-Dunlop tire plant in Huntsville, Ala., is not protected, giving the company the option to close it. The company's Kelly-Springfield tire plant in Tyler, Texas, was granted "partial protected" status, with Goodyear agreeing to keep it open and to work with the USWA on a plan to improve its financial performance. As part of this process, Goodyear can reduce employment at Tyler to 60 percent of its August 2003 level. Additionally, Goodyear has the option to reduce the hourly workforce by 15 percent of August 2003 levels at the 12 "protected" plants. An arbitration process has been established to ensure the need for workforce reductions and to verify their effectiveness. "While there is not a fixed amount of capital expenditures earmarked for these factories in the contract, we intend to maintain their competitiveness and give them first consideration to manufacture products sold in North America," said Jonathan D. Rich, president of Goodyear's North American Tire business. "Using our global manufacturing capability to improve profitability in North America was another important goal," he said. "This agreement gives us the ability to import tires we need to be competitive in markets currently served by Tyler and allows us to import as many tires as needed if we do not have the capacity in the U.S. There is no requirement to add capacity in the U.S. to offset these imports." The union agreed to clearly defined cost-reduction commitments for each factory, Rich said. These may be achieved through further employment reductions, work redesign, work rule changes, incentives or other methods. North American Tire is already reducing salaried staffing in the factories and offices to add to this effort. "This is the sort of cooperative effort that has turned around our Gadsden, Ala., tire plant and will dramatically improve the long- term efficiency, cost and work flow in our other operations," Rich said. The 14 plants and their workers covered by the agreement are: Akron, St. Marys and Marysville in Ohio; Lincoln, Neb.; Sun Prairie, Wis.; Topeka, Kan.; Danville, Va.; Union City, Tenn.; Gadsden, Ala.; Freeport, Ill.; Tyler, Texas; Fayetteville, N.C.; Huntsville, Ala., and Tonawanda, N.Y. Goodyear (Fitch, B Senior Unsecured and B+ Senior Secured Bank Facilities Ratings, Negative) is the world's largest tire company. Headquartered in Akron, Ohio, the company manufactures tires, engineered rubber products and chemicals in more than 85 facilities in 28 countries. It has marketing operations in almost every country around the world. Goodyear employs about 92,000 people worldwide. GRANITE BROADCASTING: June 30 Net Capital Deficit Tops $216 Mil. ---------------------------------------------------------------- Granite Broadcasting Corporation (Nasdaq: GBTVK) owns and operates eight network-affiliated television stations in geographically diverse markets reaching over 6% of the nation's television households. Three stations are affiliated with the NBC Television Network, two with the ABC Television Network, one with the CBS Television Network, and two with the Warner Brothers Television Network. The NBC affiliates are KSEE-TV, Fresno-Visalia, California, WEEK-TV, Peoria-Bloomington, Illinois, and KBJR-TV, Duluth, Minnesota and Superior, Wisconsin. The ABC affiliates are WKBW-TV, Buffalo, New York, and WPTA-TV, Fort Wayne, Indiana. The CBS affiliate is WTVH-TV, Syracuse, New York. The WB affiliates are KBWB-TV, San Francisco-Oakland-San Jose, California, and WDWB- TV, Detroit, Michigan. Results of Operations Three months ended June 30, 2003 and 2002 The Company reported that its net revenue totaled $28,467,000 for the three months ended June 30, 2003; a decrease of $4,086,000 or 13% as compared to $32,553,000 for the three months ended June 30, 2002. Included in the three months ended June 30, 2002 is $5,463,000 of net revenue related to KNTV, which was sold on April 30, 2002. Net revenue at the remaining stations increased $1,377,000 or 5% due primarily to increases in local and national revenue, offset by a $243,000 reduction in political revenue in a non-election year. Station operating expenses totaled $23,029,000 for the three months ended June 30, 2003; a decrease of $1,826,000 or 7% as compared to $24,855,000 for the three months ended June 30, 2002. Included in the three months ended June 30, 2002 is $3,080,000 of operating expenses related to KNTV. The remaining stations' operating expenses increased $1,254,000 or 6% primarily due to increases in sales and news expense. Amortization expense totaled $2,370,000 for the three months ended June 30, 2003; a decrease of $2,390,000 or 50% compared to $4,760,000 for the three months ended June 30, 2002. Included in the three months ended June 30, 2002 is $2,258,000 of amortization expense related to KNTV. Corporate expense increased $353,000 or 15% during the three months ended June 30, 2003 compared to the same period a year earlier primarily due to increased compensation and officers' and directors' liability insurance. Non-cash compensation expense decreased $161,000 or 49% due to a reduction in stock awards granted to certain executives. Interest income decreased $19,000 or 10% during the three months ended June 30, 2003 compared to the same period a year earlier primarily due to lower interest rates. Non-cash interest expense totaled $1,204,000 for the three months ended June 30, 2003; a decrease of $1,885,000 or 61% compared to $3,089,000 the same period a year earlier. Included in non-cash interest expense for the three months ended June 30, 2002 is $1,884,000 related to the imputation of interest on KNTV's NBC affiliation agreement. The Company recorded a gain on the sale of KNTV of $192,406,000 during the three-month period ended June 30, 2002. The Company recorded a loss on the early extinguishment of debt of $15,097,000 during the three months ended June 30, 2002 due to the write-off unamortized deferred financing fees associated with the extinguished debt. During the three months ended June 30, 2003, the Company recorded a benefit for income taxes of $3,288,000 compared to a provision for income taxes of $75,333,000 during the three months ended June 30, 2002. The provision for taxes in 2002 resulted from the gain on the sale of KNTV. Six months ended June 30, 2003 and 2002 Net revenue totaled $53,125,000 for the six months ended June 30, 2003; a decrease of $22,971,000 or 30% as compared to $76,096,000 for the six months ended June 30, 2002. Included in the six months ended June 30, 2002 is $25,295,000 of net revenue related to KNTV, which was sold on April 30, 2002. Net revenue at the remaining stations increased $2,324,000 or 4% due to increases in local and national ad spending offset by a $1,473,000 reduction in political revenue in a non-election year. Station operating expenses totaled $45,135,000 for the six months ended June 30, 2003; a decrease of $9,805,000 or 18% as compared to $54,940,000 for the six months ended June 30, 2002. Included in the six months ended June 30, 2002 is $12,694,000 of operating expenses related to KNTV. The remaining stations' operating expenses increased $2,889,000 or 7% primarily due to increases in sales and news expense and programming expense at the Company's WB affiliates. Amortization expense totaled $4,740,000 for the six months ended June 30, 2003; a decrease of $9,498,000 or 67% compared to $14,238,000 for the six months ended June 30, 2002. Included in the six months ended June 30, 2002 is $9,033,000 of amortization expense related to KNTV. Corporate expense increased $876,000 or 19% during the six months ended June 30, 2003 compared to the same period a year earlier primarily due to increased compensation and officers' and directors' liability insurance. Non-cash compensation expense decreased $104,000 or 16% due to a reduction in stock awards granted to certain executives. Interest expense decreased $5,153,000 or 25% during the six months ended June 30, 2003 as compared to the same period a year earlier primarily due to lower average debt balances and lower interest rates on the Company's senior credit facility. Interest income increased $76,000 or 24% during the six months ended June 30, 2003 compared to the same period a year earlier primarily due to higher average cash balances. Non-cash interest expense totaled $2,275,000 for the six months ended June 30, 2003; a decrease of $8,679,000 or 79% compared to $10,954,000 the same period a year earlier. Included in non-cash interest expense for the six months ended June 30, 2002 is $7,537,000 related to the imputation of interest on KNTV's NBC affiliation agreement. The remaining decrease in non-cash interest expense is related to reduced amortization of deferred financing fees associated with the current senior credit facility. The Company recorded a gain on the sale of KNTV of $192,406,000 during the six-month period ended June 30, 2002. The Company recorded a loss on the early extinguishment of debt of $15,097,000 during the six months ended June 30, 2002 due to the write-off of unamortized deferred financing fees associated with the extinguished debt. During the six months ended June 30, 2003, the Company recorded a benefit for income taxes of $7,499,000 compared to a provision for income taxes of $67,525,000 during the six months ended June 30, 2002. The provision for taxes in 2002 resulted from the gain on the sale of KNTV. Upon adoption of Statement 142 as of January 1, 2002, the Company recorded a one-time, non-cash charge to reduce the carrying value of its goodwill and other indefinite lived intangible assets, net of tax benefit, by $150,479,000. The decline in the carrying value of goodwill and other indefinite-lived intangible assets relates solely to the Company's WB affiliates. Such charge was non-operational in nature and is reflected as a cumulative effect of an accounting change in the accompanying consolidated statement of operations during the six months ended June 30, 2002. At June 30, 2003, the Company's balance sheet shows a working capital deficit of about $70 million, and a total shareholders' equity deficit of about $216 million. GREENERY ASSOCIATES: Case Summary & 20 Largest Unsec. Creditors --------------------------------------------------------------- Debtor: Greenery Associates Limited Partnership 519 W. Pratt Street Baltimore, Maryland 21201 aka The Greenery Bankruptcy Case No.: 03-81299 Type of Business: Developer of a downtown apartment complex Chapter 11 Petition Date: September 11, 2003 Court: District of Maryland (Baltimore) Judge: E. Stephen Derby Debtor's Counsel: Aryeh E. Stein, Esq. J. Daniel Vorsteg, Esq. Martin T. Fletcher, Esq. Paul M. Nussbaum, Esq. Whiteford, Taylor & Preston LLP Seven St. Paul Street Suite 1400 Baltimore, MD 21202 Tel: 410-347-8700 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Baltimore Gas and Electric Trade Debt $6,626 Insurance Services Group, Trade Debt $5,488 Inc. Signature Management Management Fee $5,141 Capital Roofing Inc. Trade Debt $3,289 Fleming & Sheeley, Inc. Trade Debt $2,742 Kone, Inc. Trade Debt $2,040 General Electric Co. Trade Debt $1,960 Oscar's Painting, Inc. Trade Debt $1,945 Carrier Sales and Trade Debt $1,646 Distribution Action Business Systems Trade Debt $936 Inc. Aireco Supply Inc. Trade Debt $813 Solkung Lawn and Landscape Trade Debt $600 Wilmar Industries Inc. Trade Debt $566 The Baltimore Sun Trade Debt $528 Verizon Trade Debt $457 Waste Management Trade Debt $457 Apartment Shoppers Guide Trade Debt $395 A Maintenance Supply Co. Trade Debt $283 Fitch Co. Trade Debt $223 Holiday Coffee Services, Trade Debt $207 Inc. HEADWAY CORPORATE: Completes Debt Restructuring Transactions ------------------------------------------------------------ Headway Corporate Resources, Inc. (AMEX: HEA) has consummated the agreement with the holders of its senior and subordinated indebtedness for a restructuring of the Company. The restructuring involves a significant reduction of outstanding indebtedness and a conversion of the balance of such indebtedness into 100% of the Company's equity. The transaction was implemented pursuant to a Chapter 11 bankruptcy proceeding of Headway, which was commenced on July 1, 2003. All of Headway's operating subsidiaries continued to do business outside of bankruptcy. The Bankruptcy Court entered an order confirming the Plan of Reorganization on September 18, 2003. The Plan of Reorganization became effective on Friday, September 19th, and the Company will be filing a Form 15 with the Securities and Exchange Commission to withdraw the registration of its common stock under the Securities Exchange Act of 1934. Upon filing, the Company will no longer be required to file reports with the S.E.C. Pursuant to the Plan, Headway's outstanding shares of common stock were cancelled without any distribution being made to the holders of such shares, and accordingly, the Company is no longer publicly held. "With the successful completion of this restructuring, the Company's debt level has now been reduced from $82 million to $26.0 million, giving us a capital structure that is appropriate for a Company of our size. We expect that this improvement in our balance sheet will significantly enhance the Company's operating flexibility. Further, I am pleased to be able to say that, as expected, the Chapter 11 filing did not have any impact on our clients, vendors or employees," said Barry Roseman, President of Headway Corporate Resources, Inc. Headway Corporate Resources, Inc. provides human resource and staffing services. Headquartered in New York City, Headway also has offices in California, Connecticut, Florida, North Carolina, and Virginia. HENCIE CONSULTING SERVICES: Voluntary Chapter 7 Case Summary ------------------------------------------------------------ Lead Debtor: Hencie Consulting Services, Inc. 13155 Noel Road 10th Floor Suite 1001 Galleria Tower III Dallas, Texas 75240 Bankruptcy Case No.: 03-39402 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Hencie, Inc. 03-39403 Type of Business: The Debtor offers Oracle-focused IT consulting services to clients in Texas, Arizona, Oklahoma, Louisiana, Arkansas, and Colorado. Chapter 7 Petition Date: September 16, 2003 Court: Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtors' Counsel: Frances Anne Smith, Esq. Stephen M. Pezanosky, Esq. Haynes and Boone, LLP 901 Main Street Suite 3100 Dallas, TX 75202 Tel: 214-651-5995 Fax: 214-200-0919 Estimated Assets: Estimated Debts: ----------------- ---------------- Hencie Consulting Services $500K to $1MM $1MM to $10MM Hencie, Inc. $0 to $50,000 $0 to $50,000 I2 TECHNOLOGIES: Withdraws Appeal of Nasdaq Delisting Decision -------------------------------------------------------------- i2 Technologies, Inc. (OTC:ITWO) has withdrawn its appeal of NASDAQ's decision to de-list i2's common stock from The NASDAQ Stock Market. The company had concluded that there was little likelihood that NASDAQ would reverse its delisting decision at this time given the pendency of the Securities and Exchange Commission's investigation of matters relating to the recent restatement of i2's consolidated financial statements. The company stated that it will consider re- applying to NASDAQ at a later time and that it expects that its common stock will continue to be quoted in the over-the-counter Pink Sheets for the foreseeable future. A leading provider of end-to-end supply chain management solutions, i2 -- whose June 30, 2003 balance sheet shows a net capital deficit of about $258 million -- designs and delivers software that helps customers optimize and synchronize activities involved in successfully managing supply and demand. i2 has more than 1,000 customers worldwide--many of which are market leaders-- including seven of the Fortune global top 10. Founded in 1988 with a commitment to customer success, i2 remains focused on delivering value by implementing solutions designed to provide a rapid return on investment. Learn more about the Company at http://www.i2.com INTEGRATED HEALTH: Rotech Wants Nod for Lasko Settlement Pact ------------------------------------------------------------- Alfred Villoch, III, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware, informs the Court that on August 10, 2000, David J. Lasko filed Claim No. 06517 for $1,414,500. Mr. Lasko asserts that the Claim is secured. The Lasko Claim arises from a promissory note tendered in partial payment of the Rotech Debtors' purchase from Lasko of the common stock of RCI Medical Corp., doing business as Respacare, Inc., in accordance with the terms of an Agreement for Sale and Purchase of Stock and Restrictive Covenants. The Purchase and Sale Agreement and the related security agreement between the parties provide that the Note was secured by the grant of a security interest in certain assets of the Debtors. This security interest is allegedly evidenced by a UCC-1 financing statement. However, no financing statement was filed. Mr. Lasko contends that the Lasko Claim should nevertheless be treated as secured, among other reasons, because the Rotech Debtors failed to file the financing statement and under New Jersey law, the proceeds of the Note are subject to a constructive trust. Rotech contends that the Lasko Claim is properly classified as a general unsecured claim. Mr. Villoch adds that on August 24, 2000, Baker & Associates Inc. filed Claim Nos. 11879, 11880 and 11881, each for $340,000. The Transferred Baker Claims arose from a broker's fee payable to Baker in connection with the Respacare Transaction. The broker's fee amount is not in dispute, but it was to have been paid from the proceeds of the Note under the terms of the Purchase and Sale Agreement. Baker transferred these Claims to Mr. Lasko. No objection to the transfer was filed, and accordingly, Lasko was substituted for Baker as the holder of the Transferred Baker Claims. By objection dated August 24, 2001, the Rotech Debtors asked the Court to reduce the Lasko Claim to $943,706 and reclassify that Claim as general unsecured. Rotech further objected to the Transferred Baker Claim Nos. 11879 and 11880 and asked the Court to disallow them. By objection dated July 23, 2002, the Rotech Debtors sought to disallow the Transferred Baker Claim No. 11881. Mr. Lasko responded to the objection, and the Court, with the consent of both parties, adjourned the hearing of the Objections to the Lasko Claims and the Transferred Baker Claims. Rotech and Mr. Lasko have negotiated a resolution of all disputes including, without limitation, those relating to the Rotech Debtors' objections to the Lasko Claim and the Transferred Baker Claims. As approved by the Court, the Lasko Settlement Agreement provides that: 1. Lasko Claim No. 06517 will be irrevocably reduced, fixed and classified as an allowed unsecured non-priority claim for $1,074,500 to be treated as a Class 5 Claim in accordance with the Rotech Plan; 2. Transferred Baker Claim No. 11881 will be irrevocably fixed and classified as an allowed unsecured priority claim for $340,000 to be treated as a Class 5 Claim in accordance with the Rotech Plan; and 3. Transferred Baker Claim Nos. 11879 and 11880, and any other claims that have been or will be filed by or on behalf of or transferred to or held by Lasko, will be disallowed and expunged with prejudice. (Integrated Health Bankruptcy News, Issue No. 64; Bankruptcy Creditors' Service, Inc., 609/392-0900) INTERCEPT INC: Closes $50MM Credit Facility with Bank of America ---------------------------------------------------------------- InterCept, Inc. (Nasdaq: ICPT), a leading provider of technology products and services for financial institutions and merchants, has closed its previously announced three-year $50.0 million credit facility with Bank of America, N.A. Bank of America will be the administrative agent for the syndicated facility and Banc of America Securities LLC will be the lead arranger and book manager for the syndication. The final terms of the credit facility did not change from those previously disclosed by InterCept. Separately, InterCept has entered into a $12 million leasing arrangement with GE Capital under which InterCept has leased $6 million of equipment to be used in its item processing operations for Sovereign Bank. The agreement will enable InterCept to lease up to an additional $6 million of equipment for the second phase of the Sovereign conversion. Addressing the transactions, John Collins, InterCept's Chairman and CEO, said "We are very excited about the financing transactions completed this week. The three-year credit facility with Bank of America, together with the lease financing from GE Capital and the previously announced preferred stock sale to Sprout Group, strengthen our liquidity position, improve our balance sheet and position us better for long-term growth opportunities. We are very pleased to have Bank of America as a financing partner and look forward to building a strong long-term relationship with the bank." "Bank of America is happy to have entered into a long-term financing relationship with InterCept," commented Michael Dunlap, Senior Vice President with Bank of America. "We look forward to working with InterCept as a partner to help facilitate their continued growth." InterCept, Inc. is a single-source provider of a broad range of technologies, products and services that work together to meet the technology and operating needs of financial institutions and merchants. InterCept's products and services include core data processing, check processing and imaging, electronic funds transfer, debit and credit card processing, data communications management, and related products and services. For more information about InterCept, go to http://www.intercept.net At June 30, 2003, the Company's balance sheet shows that its total current liabilities outweighed its total current assets by about $40 million. One of the world's leading financial services companies, Bank of America is committed to making banking work for customers and clients like it never has before. Bank of America provides individuals, small businesses and commercial, corporate and institutional clients across the United States and around the world new and better ways to manage their financial lives. Shares of Bank of America (NYSE: BAC), the second largest banking company in the United States by market capitalization, are listed on the New York, Pacific and London stock exchanges. The company's Web site is http://www.bankofamerica.com General Electric Capital Corporation is a global diversified financial services company engaged in commercial finance, consumer finance, equipment management and insurance. With assets of over $425 billion, GE Capital serves consumers and businesses in 47 countries around the world. For further information on GE Capital, please visit http://www.gecapital.com INT'L PAPER: Amen to Speak at Deutsche Bank Conference Tomorrow --------------------------------------------------------------- International Paper (NYSE: IP) Executive Vice President Rob Amen will be speaking at the Deutsche Bank Global Paper Conference on Thursday, Sept. 25, in London. Mr. Amen's presentation will cover a brief overview of company operations and a discussion of how the company is changing to improve its profitability. The conference will not be webcast. However, a copy of Mr. Amen's presentation will be posted on the company's Internet site at 8 a.m. EDT on the morning of Sept. 25. Interested parties may access this presentation at http://www.internationalpaper.comby clicking on the Investor Information button. 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) 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. ITEX CORP: Inks LOI to Sell Sacramento Corporate-Owned Office ------------------------------------------------------------- ITEX Corporation, (OTCBB:ITEX) a leading business services and payment systems company, announced a non-binding Letter of Intent has been signed for the sale of its corporate-owned trade office located in Sacramento, California. On June 16, ITEX announced its intent to divest some or all five corporate-owned offices. Two other corporate-owned offices were sold in August of this year. Sacramento office to be sold ITEX accepted a Letter of Intent, presented by Ms. Kristen Feuz, to purchase the assets and rights to operate ITEX's existing client base in Sacramento, California. Ms. Feuz, currently the Senior Trade Director for the Sacramento office of ITEX Corporation, will be the principal shareholder of a corporation, newly formed to complete the transaction. The Sacramento office has seen a cash revenue decline when comparing the most recent twelve months with the previous twelve- month period. The sale is expected to be finalized next month. The client base will continue to be owned by ITEX Corporation. Steven White, Chairman of the Board stated, "Ms. Feuz has worked with ITEX since 1993. She is one our longest standing senior employees and knows the ITEX system and Sacramento client base extremely well. She is well respected within the ITEX Broker Network and we believe her expertise, enthusiasm and drive will create a positive revenue trend for this office." Mr. White concluded, "Selling corporate-owned offices to entities that continue to operate under the ITEX brand allows us to retain revenue with reduced overhead. Selling corporate-owned offices emphasizes our strategy: focusing and growing the existing Broker Network while reducing corporate overhead and streamlining operations." Founded in 1982, ITEX Corporation -- http://www.itex.com-- is a business services and payment systems company processing over $150,000,000 a year in transactions between member businesses. ITEX assists its member businesses to increase sales, open new markets and utilize the full business capacity of their enterprises by providing a private currency through the company's Broker Network and client base. * * * In its Form 10-QSB filed with the Securities and Exchange Commission, ITEX Corporation reported (all amounts are expressed in thousands of US$): Results for the Nine Months Ended April 30, 2003 "During the first nine months of fiscal 2003, we funded our activities through operations. At April 30, 2003, we had approximately $327 in cash and cash equivalents. We operate using four week billing and payroll cycles. The timing difference between the four week cycles and our reporting periods causes fluctuations in cash, accounts receivable and broker commissions. Cash and accounts receivable are primarily affected by the autopay runs created from clients who have allowed us to retain their credit card or checking account information. If an autopay run falls near the end of a reporting period, it is likely our cash balance will be higher and accounts receivable lower. Likewise, if the autopay run falls subsequent to the reporting period, our cash balance will be lower and accounts receivable higher. Similarly, the timing of payroll, based on four week cycles, will affect the balance in broker commissions payable. "During the nine months ending April 30, 2003, we received net cash from our operating activities of $199 as compared to net cash used in operating activities of $360 for the nine months ending April 30, 2002. The increase in net cash provided by our operating activities is largely due to the significant decrease in operating expenditures. "During the nine months ending April 30, 2003, we received net cash from investing activities of $26, resulting from proceeds received from the sale of regional offices of $49, offset by the purchase of fixed assets of $23. During the nine months ending April 30, 2002, we reported net cash provided by investing activities of $28, resulting from proceeds received from the sale of securities of $56, offset by the purchase of fixed assets of $28. "During the nine months ending April 30, 2003, the net cash provided by our financing activities was $5, resulting from the exercise of stock options, compared to net cash used in financing activities for the nine months ended April 30, 2002 of $372 related to payments made to Network Commerce for the purchase of Ubarter.com during the previous fiscal year. "During the nine months ending April 30, 2003 there was net cash provided from the effective exchange rate on cash and cash equivalents of $7 which did not exist in the prior fiscal year. "At April 30, 2003, our working capital deficit was $732 compared to a deficit of $1,328 at July 31, 2002. Management continues to reduce overhead costs through increased operating efficiencies. In addition, by divesting the corporate offices, as outlined in the revenue section above, ITEX expects to yield additional cost savings, which management believes will streamline operations and save the company close to $1 million in overhead per year. Reduction of overhead includes corporate savings with smaller headcount and fewer office leases. In addition, by financing the sale of the existing corporate stores, the company expects to be able to realize an additional positive impact to earnings over the next five years. At April 30, 2003, stockholders' equity increased to $277 from $40 at July 31, 2002 primarily resulting from our net income of $139 in the first nine months of fiscal 2003." JLG INDUSTRIES: FY 2003 Operating Results Reflect Improvement ------------------------------------------------------------- JLG Industries, Inc. (NYSE:JLG) announced earnings per diluted share of $.33 for its fiscal year 2003 ended July 31, 2003, a 10 percent increase from last year's $.30 before the cumulative effect of change in accounting principle, on consolidated revenues of $760 million versus $770 million a year ago. After-tax earnings for the full year were reduced by approximately $3.2 million of restructuring and restructuring-related expenses. These charges were included in the Company's guidance of $.33 to $.37 per share given in its April 29, 2003 announcement. For the fourth quarter, earnings per diluted share were $.17 on consolidated revenues of $242 million as compared to earnings per diluted share of $.19 on total revenues of $249 million for the prior period. In July 2003, the Company signed a definitive agreement to acquire the OmniQuip business unit from Textron, and subsequently completed the transaction on August 1, 2003. Management's analysis of the Company's quarterly results and financial condition will be provided during a conference call on Tuesday, September 23, 2003 at 9:00 a.m. Eastern Time. The call can be accessed via JLG's Web site http://www.jlg.comwhere it will be accompanied by a slide presentation, or by dialing (800) 289-0468. International participants should dial (913) 981-5517. Please dial into the conference call 10 minutes prior to the start. A replay of the conference call presentation will be available on the Company's Web site. JLG Industries, Inc. (S&P, BB- Corporate Credit Rating, Stable) is the world's leading producer of access equipment and highway-speed telescopic hydraulic excavators. The Company's diverse product portfolio encompasses leading brands such as JLG(R) aerial work platforms; JLG(R), Sky Trak(R), Lull(R) and Gradall(R) telehandlers; Gradall(R) excavators; and an array of complementary accessories that increase the versatility and efficiency of these products for end users. JLG markets its products and services through a multi-channel network that includes a highly trained and skilled direct sales force, direct marketing, the Internet, integrated supply programs and a network of distributors. In addition, JLG offers world-class after-sales service and support for its customers in the industrial, commercial, institutional and construction markets. JLG's manufacturing facilities are located in the United States and Belgium, with sales and service locations on six continents. For more information, visit http://www.jlg.com JLG INDUSTRIES: Board Declares Regular Quarterly Dividend --------------------------------------------------------- The Board of Directors of JLG Industries, Inc. (NYSE:JLG) declared its regular, quarterly cash dividend of $.005 per common share. The dividend is payable on October 15, 2003 to shareholders of record October 1, 2003. JLG Industries, Inc. (S&P, BB- Corporate Credit Rating, Stable) is the world's leading producer of access equipment and highway-speed telescopic hydraulic excavators. The Company's diverse product portfolio encompasses leading brands such as JLG(R) aerial work platforms; JLG(R), Sky Trak(R), Lull(R) and Gradall(R) telehandlers; Gradall(R) excavators; and an array of complementary accessories that increase the versatility and efficiency of these products for end users. JLG markets its products and services through a multi-channel network that includes a highly trained and skilled direct sales force, direct marketing, the Internet, integrated supply programs and a network of distributors. In addition, JLG offers world-class after-sales service and support for its customers in the industrial, commercial, institutional and construction markets. JLG's manufacturing facilities are located in the United States and Belgium, with sales and service locations on six continents. For more information, visit http://www.jlg.com KAISER ALUMINUM: Wants to Restructure Power Transmission Service ---------------------------------------------------------------- In March 1998, the Kaiser Aluminum Debtors and Bonneville Power Administration entered into a Service Agreement for Point-to-Point Transmission, pursuant to which Bonneville agreed to transmit electrical power generated by itself and third-party utility companies to the Debtors' (i) Tacoma smelter facility, (ii) Mead smelter facility and (iii) Trentwood rolling mill, which are all located in the State of Washington. The electrical power is transmitted through corresponding substations in Washington that are owned and operated by Bonneville. In exchange for the transmission services, the Debtors agreed to pay Bonneville transmission service charges as well as use-of-facility -- UFT -- charges for the Substations servicing the Washington Facilities. The UFT Charges include: (a) an investment and amortization charge based on the cost of the Bonneville equipment dedicated to the Debtors at the Substations; and (b) operation and maintenance charges associated with the equipment. In addition, the UFT Charges are updated periodically by Bonneville to reflect additional investments, the retirement of equipment and changes in the costs incurred. Upon expiration of the PTP Agreement on May 5, 2015, Bonneville may seek to recover from the Debtors "unrecoverable costs" related to the equipment used to provide the transmission services. The Unrecoverable Costs will include un-amortized investment costs incurred by Bonneville for the transmission equipment at its Substations and, if the equipment must be removed from Substations, the reasonable costs of equipment disposal. The Debtors and Bonneville also entered into a lease agreement dated January 30, 1978, pursuant to which Bonneville leased to the Debtors, on an indefinite term, certain additional equipment located at the Substations servicing the Tacoma and Mead Facilities. The Debtors pay $258,000 annually under the Capacitor Lease. Starting on December 31, 2000, the Debtors completely curtailed their operations at the Tacoma and Mead Facilities due in part to depressed prices for aluminum and the high price of power. In January 2003, the Debtors announced the indefinite curtailment of operations at the Mead Facility, and a month later, obtained the Court's approval to sell the Tacoma Facility. The Trentwood Facility maintains normal operations. The Debtors, nonetheless, continued to pay and incur costs associated with the contemplated transmission services. To reduce unnecessary costs and increase flexibility while (i) ensuring the continued availability of transmission services sufficient to maintain full operations at the Trentwood Facility and (ii) preserving the availability to transmit power to the Mead Facility to maintain and potentially restart it at a later date, the Debtors entered into negotiations with Bonneville to restructure the current energy transmission arrangement under the PTP Agreement. In August 2003, the parties reached an agreement regarding the principal terms of restructuring. The material provisions of the parties' Term Sheet are: (a) The PTP Agreement will be terminated and replaced by two new service agreements: (1) A new transmission service agreement that provides for the continuation of Bonneville's transmission services to the Trentwood Facility on substantially the same terms provided for by the existing PTP Agreement; and (2) A separate transmission service agreement that provides for the continuation of Bonneville's transmission services to the Mead Facility on substantially the same terms provided for under the PTP Agreement, with the exception that there will no longer be any UFT Charges for the low-voltage facilities at the Mead Substation; (b) The Capacitor Lease will be terminated; (c) The Debtors will purchase Bonneville's low-voltage equipment and delivery facilities and capacitors at the Mead Substation for $1,000,000, less credits totaling $500,000 for certain payments made by the Debtors under the PTP Agreement and the Capacitor Lease. In connection with the purchase, the Debtors and Bonneville will enter into: (1) an agreement under which Bonneville will operate and maintain the Mead Transmission Equipment for a charge that will be no less favorable than operational and maintenance charges assessed as part of the UFT Charges paid by the Bonneville customers; and (2) a lease for 105,000 square feet of space within the Mead Substation where the Mead Transmission Equipment will continue to be located. The lease payments will be $10,500 per year for the first five years of the lease and may be adjusted subsequently every five years. Bonneville will retain all financial and clean-up obligations related to any environmental conditions. The Debtors or their successors may terminate the operations and maintenance agreement upon discontinuance of use of the Mead Transmission Equipment. Upon termination, the Debtors will be responsible for the cost of removal of the Mead Transmission Equipment from the Mead Substation; (d) Bonneville will be granted these allowed prepetition unsecured claims against the Debtors: (1) $333,283 for the outstanding prepetition transmission bills; and (2) $3,211,660 for the Unrecoverable Costs related to transmission equipment at the Tacoma Substation; and (e) Bonneville will release the Debtors from all claims for any payment or costs (i) related to Unrecoverable Costs for the transmission equipment at the Tacoma and Mead Substations or (ii) arising under the existing PTP Agreement or Capacitor Lease. By this motion, the Debtors seek the Court's authority to restructure its transmission service arrangement with Bonneville in accordance with the Term Sheet. The Debtors also ask the Court to allow Bonneville $3,544,943 in aggregate unsecured prepetition claims. Patrick M. Leathem, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, tells the Court that the negotiated transactions with Bonneville will: (a) reduce the costs of the Debtors' transmission services by $1,300,000; (b) ensure the continued availability of transmission services sufficient to maintain full operations at the Trentwood Facility; (c) preserve the ability to transmit power to maintain the Mead Facility and potentially restart it at a later date; and (d) eliminate certain Bonneville potential claims, including possible claims in respect to Unrecoverable Costs in excess of $13,000,000 -- for the Mead and Tacoma Facilities. In addition, Mr. Leathem maintains that the allowance of Bonneville's unsecured claims is warranted under Rule 9019 of the Federal Rules of Bankruptcy Procedure given the probability of success in litigating the claims, complexity of such claims and the attendant costs. (Kaiser Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 609/392-0900) LEAP WIRELESS: Exclusivity Extension Hearing Set for Tomorrow ------------------------------------------------------------- The Informal Vendor Debt Committee agrees that the Leap Wireless Debtors' Exclusive Periods need to be extended. Gerald N. Sims, Esq., at Pyle, Sims, Duncan & Stevenson, relates that that the extension is warranted and in the best interest of the Debtors' estates and creditors. The Committee, however, reserves its right to seek to shorten the Debtors' exclusivity should it be deemed necessary and appropriate at some later point. As previously reported, the Debtors ask the Court to extend: (i) the exclusive period in which they may file a plan of reorganization to December 9, 2003; and (ii) the exclusive period in which they may solicit acceptances of that plan to February 9, 2004. Judge Adler will convene a hearing on September 25, 2003 at 3:00 p.m. to consider the Debtors' request. Accordingly, the Debtors' exclusive filing period is extended until the conclusion of that hearing. (Leap Wireless Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 609/392-0900) LEVEL 3: Updates Q3 Projections and Reaffirms FY 2003 Guidance -------------------------------------------------------------- Level 3 Communications, Inc. (Nasdaq: LVLT) said that in conjunction with a private offering of senior notes by one of its subsidiaries, the company is updating its projections for the third quarter and reaffirming full year 2003 projections, both of which have been adjusted for discontinued operations. "As we have said in the past, there continues to be economic weakness in the telecommunications sector," said James Crowe, CEO of Level 3. "As a result, top-line growth and visibility remain challenging. However, we have confidence in our ability to project and deliver improving cash flows from our business." "For the communications business, we are updating our third quarter and full year projections to reflect the previously announced sale of Midwest Fiber Optic Network, which was acquired in connection with the Genuity acquisition," said Sunit Patel, CFO of Level 3. "We also anticipate slightly lower than projected revenue in our communications business for the third quarter due to lower than expected usage in our softswitch and IP businesses. At the same time, we are increasing our third quarter Consolidated EBITDA projection from $97 million, adjusted for discontinued operations, to $97 million-$102 million based on our cost management initiatives. Additionally, we are lowering our third quarter capital expenditures projection. "We are lowering our information services revenue projection for the third quarter versus the projections that had been previously issued on July 24, 2003," said Patel. "This is a result of additional contract renewals falling under agency-type licensing programs that we have previously discussed, as well as softer sales in the third quarter." Adjusted for the discontinued MFON operations, which will impact full year revenue projections by $16 million and Consolidated EBITDA by $10 million, Level 3 is reaffirming its full year 2003 projections that were issued on July 24, 2003. The company continues to expect to turn consolidated free cash flow positive during the second quarter 2004. Level 3 (Nasdaq: LVLT) is an international communications and information services company. The company operates one of the largest Internet backbones in the world, is one of the largest providers of wholesale dial-up service to ISPs in North America and is the primary provider of Internet connectivity for millions of broadband subscribers, through its cable and DSL partners. The company offers a wide range of communications services over its 22,500 mile broadband fiber optic network including Internet Protocol services, broadband transport, colocation services, Genuity managed services, and patented Softswitch-based managed modem and voice services. Its Web address is http://www.Level3.com The company offers information services through its subsidiaries, (i)Structure and Software Spectrum. For additional information, visit their respective Web sites at http://www.softwarespectrum.comand http://www.i-structure.com As reported in Troubled Company Reporter's July 3, 2003 edition, Standard & Poor's Ratings Services assigned its 'CC' rating to Level 3 Communications Inc.'s shelf drawdown of $250 million convertible senior notes due 2010. All ratings on the company are affirmed. The outlook is negative. Although cash proceeds improve Level 3's liquidity, Standard & Poor's is still concerned about the company's ability to withstand prolonged industry weakness, and risk from its acquisition strategy. LEVI STRAUSS: $650-Mil. Revolving Facility Gets S&P's BB Rating --------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB' rating to Levi Strauss & Co.'s $650 million revolving senior secured credit facility. This bank loan rating is rated three notches above the corporate credit rating of 'B' based on very strong likelihood of full recovery of principal in the event of default or bankruptcy. "This rating is supported by strong collateral coverage, a tight structure, and a conservative advance rate," said Standard & Poor's credit analyst Jayne M. Ross. Standard & Poor's also assigned a 'BB-' rating to the company's $500 million senior secured term loan facility. This bank loan rating is rated two notches above the corporate credit rating based on the very strong value of the trademarks and trade names in the event of liquidation. The fair market value of the Levi and Dockers trademarks and trade names, even under the depressed conditions of a forced liquidation, provides ample collateral value to assure full recovery of the loan. At the same time, Standard & Poor's affirmed its 'B' corporate credit and senior unsecured debt ratings on Levi Strauss. The current 'B+' senior secured bank loan rating will be withdrawn on the closing of the revolving credit and term loan facilities. The outlook is stable. San Francisco, California-based Levi is an apparel maker. The revolving credit facility includes a $350 million letter of credit sub-facility and a $75 million sub-limit on non-ratable loans. The maturity is four years from closing, (estimated to be Sept. 29, 2003), provided that the revolving credit facility will terminate no later than the termination date of the proposed trademark term loan facility. The revolving credit facility is secured by a first priority lien on all accounts receivable; inventory; certain machinery and equipment; all of the capital stock of each domestic subsidiary (direct or indirect); 65% of the capital stock of each material foreign subsidiary owned directly by the company; chattel paper; documents; instruments; deposit accounts; contract rights; general intangibles; and investment property. The only exception is the intangible assets related to Levi's trademark assets and related contracts, which will be used to secure the proposed trademark term loan. The term loan facility is secured by a first lien in all of the trademark assets of the Levi Strauss and a silent lien on the domestic working capital assets; all of the capital stock of the company's domestic subsidiaries (direct or indirect) and 65% of the capital stock of each material direct foreign subsidiary; and other assets securing the revolving credit facility. The term loan facility is scheduled to mature on Aug. 1, 2006, and will be non- callable in the first two years. If the company meets certain refinancing conditions, then the maturity on the term loan facility can be extended to a maximum of six years from the closing date (estimated to be Sept. 29, 2003). MAJESTIC STAR: Extends Consent Solicitation Until Tomorrow ---------------------------------------------------------- The Majestic Star Casino, LLC and The Majestic Star Capital Corp. have extended the Consent Date of its consent solicitation relating to the Issuer's 10-7/8% Senior Secured Notes due 2006 to 5:00 pm, New York City time, on Thursday, September 25, 2003, and that it has extended the Expiration Date of its offer to purchase the Notes to 5:00 p.m., New York City time, on Monday, October 6, 2003. As of 5:00 p.m., New York City time, on Monday, September 22, 2003, $49,315,000 of the aggregate outstanding principal amount of Notes had been tendered in the Offer and Consent Solicitation. The complete terms and conditions of the Offer and Consent Solicitation are set forth in the Offer to Purchase and Consent Solicitation Statement dated August 26, 2003 and the related Letter of Transmittal, as amended by the Supplement to the Statement dated September 18, 2003 and this announcement. The Majestic Star Casino, LLC (S&P, B Corporate Credit Rating, Positive) is a multi-jurisdictional gaming company that directly owns and operates one dockside gaming facility located in Gary, Indiana and, pursuant to a 2001 acquisition through its unrestricted subsidiary, Majestic Investor Holdings, LLC, owns and operates three Fitzgeralds brand casinos located in Tunica, Mississippi, Black Hawk, Colorado and downtown Las Vegas, Nevada. For more information about the Company, please visit its Web sites at http://www.majesticstar.comor http://www.fitzgeralds.com The Majestic Star Casino, LLC and Majestic Investor Holdings, LLC make available free of charge their annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission. You may obtain a copy of such filings at http://www.sec.govor from its applicable Web sites. MAJESTIC STAR: Amends Consent Solicitation and Tender Offer ----------------------------------------------------------- Majestic Investor Holdings, LLC and Majestic Investor Capital Corp. have amended the terms of its offer to purchase and consent solicitation for its 11.653% Senior Secured Notes due 2007 as follows: -- The Total Consideration has been increased to $1,090.00 per $1,000 principal amount of the Notes. -- The Consent Payment has been increased to $30.00 per $1,000 principal amount of Notes. -- The Purchase Price remains unchanged at $1,060.00 per $1,000 principal amount of Notes. -- The Consent Date has been extended to 5:00 p.m., New York City time, on Thursday, September 25, 2003. -- The Expiration Date has been extended to 5:00 p.m., New York City time, on Monday, October 6, 2003. As of 5:00 p.m., New York City time, on Monday, September 22, 2003, $56,385,000 of the aggregate outstanding principal amount of Notes had been tendered in the Offer and Consent Solicitation. The complete terms and conditions of the Offer and Consent Solicitation are set forth in the Offer to Purchase and Consent Solicitation Statement dated August 26, 2003 and the related Letter of Transmittal, as amended by the Supplement to the Statement dated September 18, 2003 and this announcement. The Majestic Star Casino, LLC (S&P, B Corporate Credit Rating, Positive) is a multi-jurisdictional gaming company that directly owns and operates one dockside gaming facility located in Gary, Indiana and, pursuant to a 2001 acquisition through its unrestricted subsidiary, Majestic Investor Holdings, LLC, owns and operates three Fitzgeralds brand casinos located in Tunica, Mississippi, Black Hawk, Colorado and downtown Las Vegas, Nevada. For more information about the Company, please visit its Web sites at http://www.majesticstar.comor http://www.fitzgeralds.com The Majestic Star Casino, LLC and Majestic Investor Holdings, LLC make available free of charge their annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission. You may obtain a copy of such filings at http://www.sec.govor from its applicable Web sites. MERISTAR HOSPITALITY: Exchange Shares for 8-3/4% Sr. Sub. Notes --------------------------------------------------------------- MeriStar Hospitality Corporation (NYSE: MHX), one of the nation's largest hotel real estate investment trusts, has issued approximately 2.79 million shares of its common stock in exchange for $18.0 million face amount of its 8-3/4% senior subordinated notes due 2007. The Notes were acquired at an average price of 90.6 percent of face amount resulting in a gain of $1.7 million in the third quarter related to the exchange. As a result of this transaction, as well as the repurchase of $22.6 million of the 8-3/4% senior subordinated notes with the proceeds of the company's recently completed convertible subordinated notes issuance, the face amount remaining on the senior subordinated notes has been reduced to $164.5 million. "The exchange of senior subordinated notes prior to maturity allows us to reduce our debt levels, and is part of our continual effort to strengthen our balance sheet. Since the end of 2002, we have substantially improved our liquidity, reduced our debt levels and refinanced our 2004 debt maturity. We now have no significant maturities prior to the maturity of the senior subordinated notes in 2007," said Donald D. Olinger, chief financial officer. "We will look to continue to take advantage of opportunities that allow us to improve our balance sheet." Arlington, Va.-based MeriStar Hospitality Corporation (S&P, B- Corporate Credit Rating, Negative) owns 101 principally upscale, full-service hotels in major markets and resort locations with 26,290 rooms in 25 states, the District of Columbia and Canada. The company owns hotels under such internationally known brands as Hilton, Sheraton, Marriott, Westin, Doubletree and Radisson. For more information about MeriStar Hospitality Corporation, visit the company's Web site: http://www.meristar.com MILLENNIUM CHEMICALS: S&P Cuts Credit Rating a Notch to BB- ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Millennium Chemicals Inc. to 'BB-' from 'BB' citing the company's subpar financial profile and weaker-than-expected prospects for reducing its substantial debt burden over the next couple years. Standard & Poor's said that it also removed its ratings on the company from CreditWatch, where they were placed with negative implications on Aug. 6, 2003, following the company's unanticipated announcement that it would restate its financial statements. The current outlook is stable. Hunt Valley, Maryland-based Millennium, with about $1.6 billion of annual sales and approximately $1.2 billion of outstanding debt (excluding adjustments to capitalize operating leases), is primarily engaged in the production of commodity chemicals. "[Mon]day's actions follow a review of Millennium's financial condition and operating prospects and reflect Standard & Poor's view that Millennium's businesses are likely to support a gradual trend of improvement to credit quality, but that this trend will unfold much more slowly than previously anticipated," said Standard & Poor's credit analyst Kyle Loughlin. "The restatement of financial reports revealed a substantially weaker balance sheet while recent operating results, lingering concerns related to the timing and strength of a rebound within the petrochemical sector, and subsequent guidance have suggested a diminished capacity to reduce debt over the next couple years." Mr. Loughlin noted that these concerns are counterbalanced by a strong commitment on the part of management to restore credit quality, the expected benefits of strategic management decisions that should improve future free cash flow generation, and Millennium's satisfactory liquidity position. NATIONAL CENTURY: Treatment of Claims Under Liquidation Plan ------------------------------------------------------------ The National Century Financial Enterprises Debtors' Plan of Liquidation provides for the classification of Claims and Interests, the estimated aggregate amount of Claims in each Class and the amount and nature of distributions to holders of Claims or Interests in each Class: Estimated Amount Class Description Status of Claims ----- ----------- ------ ---------------- N/A Administrative Claims Unimpaired -- N/A Priority Claims Unimpaired -- C-1 Bank Loan Claims Unimpaired -- C-2 NPF VI Noteholder Claims Impaired $927,642,120 C-3 NPF XII Noteholder Claims Impaired 2,047,500,000 C-4 Other Secured Claims Unimpaired 1,000,000 C-5 Unsecured Priority Claims Unimpaired -- C-6 General Unsecured Claims Impaired 30,000,000 C-7 Convenience Claims Impaired 3,000,000 C-8 Provider Claims -- 0 C-9 Intercompany Claims Impaired N/A C-10 Penalty Claims Impaired -- E-1 Old Stock Interests Impaired -- Treatment of Claims Class C-1: Bank Loan Claims against any Debtor On the Effective Date, unless otherwise agreed by a holder of a Bank Loan Claim and the applicable Debtor or the Liquidation Trust, each holder of an Allowed Claim in Class C-1 will receive treatment on account of the Allowed Claim in the manner set forth in Option A, B, C or D, at the election of the applicable Debtor. The applicable Debtor will be deemed to have elected Option B except with respect to any Allowed Claim in Class C-1 as to which the applicable Debtor elects Option A, C or D in a certification filed prior to the conclusion of the Confirmation Hearing. Any amount paid to or on behalf of a Secured Claim Holder as adequate protection will be credited against the amount of the Secured Claim. Option A: Allowed Claims in Class C-1 with respect to which the applicable Debtor elects Option A will be paid in cash, in full, by the Debtor, unless the Claim Holder agrees to less favorable treatment. Option B: Allowed Claims in Class C-1 with respect to which the applicable Debtor elects Option B will be reinstated. Option C: Allowed Claims in Class C-1 with respect to which the applicable Debtor elects Option C will be entitled to receive, and the applicable Debtors will release and transfer, to the holder, the collateral securing the Allowed Claims. Option D: Allowed Claims in Class C-1 with respect to which the applicable Debtor elects or is deemed to have elected Option D will receive a promissory note, secured by a first priority security interest in the applicable collateral, in the aggregate principal amount of the Allowed Class C-l Claim, payable in annual installments over the term of the useful life of the collateral and bearing interest at a rate established pursuant to an order of the Bankruptcy Court or agreement of the parties. Class C-2: NPF VI Noteholder Claims Class C-2 Claims are Claims against the Debtors by the NPF VI Noteholders arising from the NPF VI Notes. On the Effective Date, each holder of an Allowed Claim in Class C-2 will receive its Pro Rata share of: (a) the NPF VI Initial Restricted SPV Funds Distribution, and (b) the NPF VI Percentage of: (1) the interests in the Liquidation Trust, and (2) the Class A interests in the Litigation Trust. Class C-3: NPF XII Noteholder Claims Class C-3 Claims are Claims against the Debtors by the NPF XII Noteholders arising from the NPF XII Notes. On the Effective Date, each holder of an Allowed Claim in Class C-3 will receive its Pro Rata share of: (a) the NPF XII Initial Restricted SPV Funds Distribution, (b) the NPF XII Percentage of: (1) the interests in the Liquidation Trust, and (2) the Class A interests in the Litigation Trust, and (c) the Class B interests in the Litigation Trust, in respect of recoveries from the CSFB Claim. Class C-4: Other Secured Claims Class C-4 Claims are Secured Claims against any Debtor that are not otherwise classified in Class C-1, C-2 or C-3. On the Effective Date, unless otherwise agreed by a Claim Holder and the applicable Debtor, each holder of an Allowed Claim in Class C-4 will receive treatment on account of the Allowed Claim in the manner set forth in Option A, B, C or D, at the election of the applicable Debtor. The applicable Debtor will be deemed to have elected Option B except with respect to any Allowed Claim in Class C-4 as to which the applicable Debtor elects Option A, C or D in a certification filed prior to the conclusion of the Confirmation Hearing. Any amount paid to or on behalf of a Secured Claim Holder as adequate protection will be credited against the amount of the Secured Claim. Option A: Allowed Claims in Class C-4 with respect to which the applicable Debtor elects Option A will be paid in cash, in full, by the Debtor, unless the holder of the Claim agrees to less favorable treatment. Option B: Allowed Claims in Class C-4 with respect to which the applicable Debtor elects Option B will be reinstated. Option C: Allowed Claims in Class C-4 with respect to which the applicable Debtor elects Option C will be entitled to receive, and the applicable Debtors will release and transfer to the holder, the collateral securing the Allowed Claims. Option D: Allowed Claims in Class C-4 with respect to which the applicable Debtor elects or is deemed to have elected Option D will receive a promissory note, secured by a first priority security interest in the applicable collateral, in the aggregate principal amount of the Allowed Class C-4 Claim, payable in annual installments over the term of the useful life of the collateral and bearing interest at a rate established pursuant to an order of the Bankruptcy Court or agreement of the parties. Class C-5: Unsecured Priority Claims Class C-5 Claims are Unsecured Claims against any Debtor that are entitled to priority under Sections 507(a)(3), 507 (a)(4) or 507(a)(6) of the Bankruptcy Code. On the Effective Date, each holder of an Allowed Claim in Class C-5 will receive cash equal to the amount of the Claim. Class C-6: General Unsecured Claims Class C-6 Claims are Unsecured Claims against any Debtor that are not otherwise classified in Class C-2, C-3, C-5, C-7, C-8, C-9 or C-10. Upon the resolution of all Disputed Claims in Class C-6 and Class C-7, each holder of an Allowed Claim in Class C-6 will receive its Pro Rata share, up to the allowed amount of the Claim, of available Assets of the Debtor or Debtors against which the Claim has been allowed, after payment in full of all Claims in classes senior to Class C-6. Class C-7: Convenience Claims Class C-7 Claims are Unsecured Trade Claims in an allowed amount equal to or less than $500,000. Upon the resolution of all Disputed Claims in Class C-6 and Class C-7, each holder of an Allowed Claim in Class C-7 will receive, at the holder's option pursuant to an election by the Claim Holder on a ballot provided for voting on the Plan: (a) cash equal to the lesser of: (1) $0.50 for each $1.00 of the Allowed Claim Amount, and (2) its Pro Rata share of $3,000,000; or (b) treatment as a Class C-6 Claim. Class C-8: Provider Claims Class C-8 Claims are Claims asserted against any Debtor by a Provider. No property will be distributed to or retained by holders of Allowed Claims in Class C-8 on account of the Claims. Class C-9: Intercompany Claims Class C-9 Claims are Intercompany Claims that are not Administrative Claims. Except for Intercompany Claims between NPF VI and NPF XII, which are being compromised and settled pursuant to the Plan, all Intercompany Claims among the Debtors are reinstated. Class C-10: Penalty Claims Class C-10 Claims are Unsecured Claims against any Debtor for any fine, penalty or forfeiture, or for multiple, exemplary or punitive damages, to the extent that the Claims are not compensation for the Claim Holder's actual pecuniary loss. No property will be distributed to or retained by the holders of Allowed Claims in Class C-10 on account of the Claims. Class E-1: Old Stock Interests Class E-1 Interests are Interests on account of the Old Stock of any of the Debtors. No property will be distributed to or retained by the holders of Allowed Interests in Class E-1, and the Interests will be terminated as of the Effective Date. Allowed Secondary Liability Claims David J. Coles, NCFE President, Secretary and Treasurer, notes that the classification and treatment of Allowed Claims under the Plan also take into consideration all Allowed Secondary Liability Claims. On the Effective Date, Allowed Secondary Liability Claims will be treated as: (a) The Allowed Secondary Liability Claims arising from or related to any Debtor's joint or several liability for the obligations under any: (1) Allowed Claim that is being reinstated under the Plan, or (2) Executory Contract or Unexpired Lease that is being assumed or deemed assumed by another Debtor or assumed by and assigned to another Debtor or any other entity, will be reinstated; and (b) Holders of all other Allowed Secondary Liability Claims will be entitled to only one distribution from the Debtor that is primarily liable for the underlying Allowed Claim. The distribution will be as provided in the Plan in respect of the underlying Allowed Claim, and will be deemed satisfied in full by the distributions on account of the related underlying Allowed Claim. No multiple recovery on account of any Allowed Secondary Liability Claim will be provided or permitted. Unclassified Claims In accordance with Section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax Claims have not been classified. A. Administrative Claims in General Unless otherwise agreed by an Administrative Claim Holder and the applicable Debtor, each Allowed Administrative Claim Holder will receive, in full satisfaction of its Administrative Claim, cash equal to the allowed amount of the Administrative Claim either: (a) on the Effective Date; (b) over time if the documents providing for the Allowed Administrative Claim provide for the payment; or (c) if the Administrative Claim is not allowed as of the Effective Date, 30 days after the date on which an order allowing the Administrative Claim becomes a Final Order or a Stipulation of Amount and Nature of Claim is executed by the applicable Debtor or the Liquidation Trust and the Administrative Claim Holder. B. Statutory Fees Administrative Claims include Claim for costs and expenses of administration allowed under Sections 503(b), 507(h) or 1114(e)(2) of the Bankruptcy Code, including: (a) the actual and necessary costs and expenses incurred after the Petition Date of preserving the Estates and operating the Debtors' businesses; (b) compensation for legal, financial advisory, accounting and other services and reimbursement of expenses awarded or allowed under Sections 330(a) or 331 of the Bankruptcy Code, including Fee Claims; (c) all fees and charges assessed against the Estates under Chapter 123 of Title 28, United States Code, Sections 1911-1930 of the Judicial Procedures Code; and (d) all Intercompany Claims afforded priority pursuant to Section 364(e)(1) of the Bankruptcy Code or the Cash Management Order. In addition, Section 503(b) of the Bankruptcy Code provides for payment of compensation or reimbursement of expenses to creditors and other entities making a substantial contribution to a Chapter 11 case and to attorneys and other professional advisors representing the entities. The amounts, if any, that the entities will seek or may seek for compensation or reimbursement are not known by the Debtors at this time. Requests for the compensation or reimbursement must be approved by the Bankruptcy Court after notice and a hearing at which the Debtors, the Liquidation Trust, the Litigation Trust and other parties-in-interest may participate and, if appropriate, object to the allowance of any compensation or reimbursement. Objections to the requests must be filed and served on the Debtors or the Liquidation Trust and the requesting party by the later of: (a) 120 days after the Effective Date, or (b) 60 days after the filing of the applicable request for payment of Administrative Claims. C. Ordinary Course Liabilities Administrative Claim Holders based on liabilities incurred by a Debtor in the ordinary course of its business, including Administrative Trade Claims, Administrative Claims of governmental units for Taxes and Administrative Claims arising from or under those contracts and leases entered into or assumed after the Petition Date will be paid by the applicable Debtor or the Liquidation Trust or the Litigation Trust pursuant to the terms and conditions of the particular transaction giving rise to the Administrative Claims, without further action by the holders of the Administrative Claims. Priority Tax Claims Pursuant to Section 1129(a)(9)(C) of the Bankruptcy Code, unless otherwise agreed by the Priority Tax Claim Holder and the applicable Debtor or the Liquidation Trust, each Allowed Priority Tax Claim Holder will receive, in full satisfaction of its Allowed Priority Tax Claim, payment in full in Cash either: (a) on the Effective Date, or (b) in deferred Cash payments over a period not exceeding six years from the date of assessment of the Priority Tax Claim. Deferred payments will be made in equal annual installments of principal, plus simple interest, accruing from the Effective Date at a rate equal to the effective yield on the three-month treasury bill sold at the auction immediately preceding the Effective Date, on the unpaid portion of each Allowed Priority Tax Claim. Unless otherwise agreed by the Priority Tax Claim Holder and the applicable Debtor or the Liquidation Trust, the first payment on account of the Priority Tax Claim will be payable one year after the Effective Date or, if the Priority Tax Claim is not allowed within one year after the Effective Date, within 30 days after the date on which: (1) an order allowing the Priority Tax Claim becomes a Final Order, or (2) a Stipulation of Amount and Nature of Claim is executed by the applicable Debtor or the Liquidation Trust and the holder of the Priority Tax Claim; provided, however, that the Debtors or the Liquidation Trust will have the right to pay any Allowed Priority Tax Claim or any remaining balance of the Priority Tax Claim, in full at any time on or after the Effective Date, without premium or penalty. The Allowed Priority Tax Claim Holder will not be entitled to receive any payment on account of any penalty arising with respect to or in connection with the Allowed Priority Tax Claim. Any Claim or demand for any penalty will be subject to treatment in Class C-10, and the Allowed Priority Tax Claim Holder may not assess or attempt to collect penalty from the Debtors or the Liquidation Trust or the Litigation Trust or their property. (National Century Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 609/392-0900) NAVISITE INC: Appoints Martin & Scott to Senior Management Team --------------------------------------------------------------- NaviSite, Inc. (NASDAQ: NAVI), a leading provider of managed application, infrastructure and messaging services, announced two new appointments to its senior management team. Denis Martin, Vice President of Products and Services, has been appointed to the newly created position of Senior Vice President, Corporate Development. Will Scott, Vice President of Application Services, will succeed Mr. Martin as Vice President, Product Management. Denis Martin, Senior Vice President, Corporate Development Denis Martin has been appointed Senior Vice President of Corporate Development, a role that reflects Denis' continued contributions to NaviSite's strategic direction, including acquisition activity, and product, service, and channel development. Martin brings 20 years of business experience and has served in several positions in the company, most recently as Vice President of Products and Services. He has extensive experience in network-based computing and outsourced delivery of business solutions with enhanced managed services. Before joining NaviSite, Martin managed the national hosting and application services organization for AppliedTheory, Inc. A co- founder of AppliedTheory, he was instrumental in the development of the company's managed service offering by combining traditional hosting services with application development, integration and support services. Martin had served as Senior Director of software engineering at AppliedTheory's predecessor, NYSERNet, the world's first regional Internet service provider. Prior to joining NYSERNet, he acted as a consultant to several state and federal agencies to develop network and application programs at local, state and national levels. Will Scott, Vice President, Products and Services As Vice President of Products and Services, Will Scott will direct the ongoing consolidation and development of NaviSite's Product and Services portfolio. Scott will continue to develop NaviSite's reputation for delivering customer-focused industry leading services to the market for NaviSite's Application, Infrastructure and Messaging service lines. He will be instrumental in developing and maintaining NaviSite's thought leadership and business-focused solutions in target vertical industries. Scott has previously served as Vice President for the company's Professional and Application Services offerings. A seasoned executive, Scott has extensive experience in the outsourcing and technology industries and previously held senior positions at Cap Gemini Ernst & Young, Inspired Broadcast Networks and Ebeon. Founded in 1997, NaviSite, Inc, (NASDAQ: NAVI) is a leading provider of application, messaging and infrastructure management services for more than 800 customers consisting of mid-market enterprises, divisions of large multinational companies, and government agencies. For more information, visit http://www.navisite.com Navisite Inc.'s April 30, 2003 balance sheet shows a working capital deficit of about $9 million, and a total shareholders' equity deficit of about $6 million. NEW MEXICO SOFTWARE: Settles Obligation to Eisner & Company LLP --------------------------------------------------------------- New Mexico Software, Inc. (OTC Bulletin Board: NMXS), a leading provider of next generation digital asset management solutions, has settled in full the obligation to its previous auditor Eisner & Company LLP. The matter was resolved on an amicable basis. New Mexico CEO Dick Govatski said, "I am pleased that we have settled this significant obligation. We now are working to settle the remaining obligations for all past due accounts. The financial restructuring of our company we started this year is allowing us to move forward. Cash flow is significantly improving as we continue to see gains in our business." In other company news, New Mexico Software announces the fifth annual open house for investors, customers, and the media on Friday, October 3 at the company's headquarters at 5041 Indian School Road NE, Albuquerque, NM 87110 from 3 pm to 9 pm. Each year, prior to the beginning of the Albuquerque International Balloon festival, the company extends an invitation to the public to tour their facilities and meet with the company employees. This year the company will feature the band Pike Street, along with other musical entertainment at the open house. Please RSVP - 505- 255-1999 ext 1005. New Mexico Software is a leading provider of next generation digital asset management solutions. NMXS is the only public company providing full professional services for companies to better digitize, encode, store, manage, license, and distribute digital files with 100% owned and operated software. The company offers two software products including the Digital Filing Cabinet, and AssetWare(TM), which provides enterprise-level digital asset management. For more information on New Mexico Software go to http://www.nmxs.com NORTHWEST GOLD: Taps Singer Lewack to Replace Grant Thornton LLP ---------------------------------------------------------------- Effective September 2, 2003, the firm of Grant Thornton, LLP, Northwest Gold Inc.'s independent accountant for its fiscal year ended December 31, 2002, was dismissed as a result of a change in control of the Company. Grant Thornton had audited the Company's financial statements for its fiscal years ended December 31, 2002 and 2001. Grant Thornton's report contained a separate paragraph stating that "the accompanying financial statements have been prepared assuming that Northwest Gold will continue as a going concern...[T]he Company has incurred operating losses and has a significant accumulated deficit, matters that raise substantial doubt about its ability to continue as a going concern...The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern." The Company has retained the firm of Singer Lewack Greenbaum & Goldstein LLP, Los Angeles, California, to audit its financial statement for its fiscal year ending December 31, 2003. This change in independent accountants was approved by the Board of Directors of the Company. NRG ENERGY: Establishes September 29, 2003 as Voting Record Date ---------------------------------------------------------------- NRG Energy, Inc., announced that September 29, 2003 has been set as the Voting Record Date for determining the eligibility of holders of certain NRG notes to vote on the company's Third Amended Plan of Reorganization Under Chapter 11 of the Bankruptcy Code for the Debtors, as may be amended. The September 29, 2003 record date is applicable to holders of these NRG debt issues: -- 6.75% Senior Notes due July 15, 2006; -- 7.50% Senior Notes due June 15, 2007; -- 7.50% Senior Notes due June 1, 2009; -- 7.625% Senior Notes due February 1, 2006; -- 7.75% Senior Notes due April 1, 2011; -- 7.97% Senior Notes (ROARS) due March 15, 2020; -- 8.00% Senior Notes (ROARS) due November 1, 2013; -- 8.25% Senior Notes due September 15, 2010; -- 8.625% Senior Notes due April 1, 2031; -- 6.50% Debentures due May 16, 2006; and -- 8.70% Senior Notes due March 15, 2005. In addition, as detailed in the company's Third Amended Disclosure Statement for the Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code for the Debtors, the right to make certain elections as part of the balloting process will be tied to the Voting Record Date. Copies of the Disclosure Statement and the Plan of Reorganization will be made available on the website of NRG's claims agent, Kurtzman Carson Consultants LLC, at http://www.kccllc.netand may be obtained by calling 866.381.9100. In May 2003, NRG Energy, Inc. and certain of its subsidiaries, including NRG-PMI, filed voluntary bankruptcy petitions in U.S. Bankruptcy Court in the Southern District of New York. NRG Energy, Inc. owns and operates a diverse portfolio of power- generating facilities, primarily in the United States. Its operations include competitive energy production and cogeneration facilities, thermal energy production and energy resource recovery facilities. OGLEBAY NORTON: Intends to Sell Lime and Mica Operations -------------------------------------------------------- As part of its ongoing business restructuring, the management of Oglebay Norton Company (Nasdaq: OGLE) announced its intention to sell the company's lime and mica operations. "Our lime and mica operations are solid businesses with outstanding people, quality products and strong customer bases," said Oglebay Norton President and Chief Executive Officer Michael D. Lundin. "Our decision to sell them is a strategic part of management's plan to permanently reduce long-term debt and improve our balance sheet. Going forward, we intend to focus our energies on a smaller set of core businesses and believe our limestone and limestone fillers operations offer the most significant business development opportunities." Oglebay Norton's lime operations have contributed approximately $80 million in sales and $16 million in EBITDA (earnings before interest, taxes, depreciation, and amortization -- see Note below) annually over the last several years as part of the company's Global Stone segment. The operations supply a diverse customer base across a variety of end markets, including environmental, construction, specialty chemicals, metallurgical, agriculture, and building materials. Currently, Oglebay Norton ranks as the nation's fifth largest producer of lime. The company's lime facilities are located in Strasburg, Middletown and Winchester, Virginia; Macon, Georgia; Marble City, Oklahoma; and Luttrell, Tennessee. Oglebay Norton's mica operations have contributed approximately $15 million in sales and $2.3 million in EBITDA annually over the last several years as part of the company's Performance Minerals segment. Mica is used as filler in joint compound and other building materials, paint and coatings, automotive sound-deadening materials, plastics, and cosmetics. Oglebay Norton is currently the nation's largest producer of muscovite mica. The company's mica facilities are located in Kings Mountain, North Carolina, and Velarde, New Mexico. As reported earlier, the company has engaged Harris Williams & Co. to assist with the sale of certain company assets. Interested parties are asked to contact Harris Williams & Co. at 804-648- 0072, or http://www.harriswilliams.com Oglebay Norton Company (S&P, D Corporate Credit Rating), a Cleveland, Ohio-based company, provides essential minerals and aggregates to a broad range of markets, from building materials and home improvement to the environmental, energy and metallurgical industries. The company's Web site is located at http://www.oglebaynorton.com OXFORD AUTOMOTIVE: Expands Greencastle, Ind. Manufacturing Plant ---------------------------------------------------------------- Oxford Automotive, Inc., a $1 billion Tier 1 supplier of engineered metal components, assemblies and modules to the automotive industry worldwide, announced a 6,000-sq. ft. expansion of its manufacturing facility in Greencastle, Ind. plant. The expansion will bring the total square footage of the plant to 220,000. Construction on the $500,000 expansion, a result of new business won by Oxford Automotive from OEMs in the area, will start immediately with a Dec. 1 target date for completion. The company's Greencastle plant manufactures control arms, suspension supports, shock towers, coil spring seats, and sunroof panels. Oxford Automotive, Inc. (S&P, B+ Corporate Credit Rating, Negative), with headquarters in Troy, Mich., is a leading Tier 1 supplier of specialized metal-formed assemblies and related services. The company, which is privately held, currently has 7,200 employees at 33 locations in nine countries, with technology centers in the United States, France, Germany and Italy. Annual sales in 2002 were $1 billion. PACIFIC AEROSPACE: Will Hold Special Shareholders Meeting in Nov. ----------------------------------------------------------------- The Special Meeting of Shareholders of Pacific Aerospace & Electronics, Inc., a Washington corporation, will be held at the offices of Davis Wright Tremaine LLP, located at 2600 Century Square, 1501 Fourth Avenue, Seattle, Washington, on a date in November yet to be announced, at 9:00 a.m. Pacific Standard Time, for the following purposes: 1. To elect four members of the Board of Directors to serve until the next annual meeting of shareholders or until their respective successors are duly elected and qualified; 2. To approve a 1-for-11,000 reverse stock split of the Company's then authorized, issued and outstanding shares of common stock and a decrease in the authorized common stock of the Company (without affecting the per share par value). The Reverse Split is proposed for the purpose of terminating the Company's reporting obligations under the Securities Exchange Act of 1934, as amended. 3. To ratify the appointment of KPMG LLP as the independent auditors of the Company for the fiscal year ending May 31, 2004; and 4. To transact any other business that may properly come before the Special Meeting. Currently, the Board of Directors is not aware of any other business to come before the Special Meeting. Only shareholders of record on September 3, 2003, are entitled to notice of, and to vote at, the Special Meeting or any adjournments of the meeting. * * * Liquidity and Going Concern Uncertainty In its Form 10-K filed for the year ended May 31, 2003, Pacific Aerospace & Electronics reported: "We reported a net loss of $75,720,000 for our fiscal year ended May 31, 2001, net income of $4,525,000 for our fiscal year ended May 31, 2002, and a net loss of $11,742,000 for our fiscal year ended May 31, 2003. We believe that we will continue to incur net losses during fiscal 2004 and that such losses may be substantial. We can offer no assurance that we will achieve profitable operations. Our ability to reach profitability in the future will depend on many factors, including our ability to finance working capital and to realize acceptable gross profits on the products we sell. Future profitability will also depend on our ability to develop new products, the degree of market acceptance of our existing and new products, and the level of competition in the markets in which we operate. If we continue to incur net losses, our cash flow position could be further damaged, our operations could be jeopardized and our stock price could decrease. In protracted or severe instances we may be unable to meet our obligations as they come due, and any failure to do so would materially and adversely affect any investment in the Company. "Our inability to generate cash if and when needed could severely impact our ability to continue as a going concern. "Our consolidated financial statements have been prepared assuming that we will continue as a going concern. However, our independent auditors in their most recent report stated that Pacific Aerospace has suffered recurring losses from operations and has a net capital deficiency which raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of that uncertainty. If we are not sufficiently successful in generating cash from operating activities, we may need to sell additional common stock or other securities, or we may need to sell assets outside the ordinary course of business. If we need to dispose of assets outside of the ordinary course of business to generate cash, we may not be able to realize the carrying values of those assets upon liquidation. If we are unable to generate the necessary cash, we could be unable to continue operations." The Company is an engineering and manufacturing company with operations in the United States and the United Kingdom. The Company designs, manufactures and sells components and subassemblies used in technically demanding environments. Products that it produces primarily for the aerospace, defense and transportation industries include machined, cast and formed metal parts and subassemblies, using aluminum, titanium, magnesium and other metals. Products that the Company produces primarily for the defense, electronics, telecommunications and medical industries include components such as hermetically sealed electrical connectors, instrument packages and ceramic capacitors, filters and feedthroughs. Its customers include global leaders in all of these industries. PARAGON FINANCIAL: Posts Record Loan Originations of $75M in Aug. ----------------------------------------------------------------- Paragon Financial Corporation (OTC Bulletin Board: PGNF) announced that its total loan originations topped $75,000,000 in August, the eighth straight month of improved loan production, and an amount almost double the volume posted in January. Significant gains were experienced by both of the Company's operating entities. "With annualized volume now closing in on the billion dollar threshold the Company is well positioned to start taking advantage of certain economies of scale," said Steve Burleson, Chief Executive Officer of Paragon Financial. "Our focus to this point has been on integrating the operations of our acquired businesses, and enhancing and expanding the senior management team; now we're ready to intensify our acquisition effort." Paragon Financial Corporation is a financial services company that is currently approved to operate in 24 states and the District of Columbia. The Company is presently focused on the origination of residential mortgages loans and plans to augment its internal growth by acquiring other companies in the same or related industries. * * * On August 26, 2003, the Board of Directors of Paragon Financial Corporation voted to dismiss BP Professional Group, LLP as its independent accountants. The report of BP Professional Group, LLP on the Company's financial statements for the periods ending December 31, 2002 and 2001 contained doubt about the Company's ability to continue as a going concern. During the performance of their review of Paragon's financial statements for the quarter ended March 31, 2003 and through August 26, 2003 , BP Professional Group, LLP expressed their desire to send a letter to the United States Securities and Exchange Commission seeking confirmation of Paragon's application of SFAS No. 141, Accounting for Business Combinations, to the acquisition of PGNF Home Lending Corp, completed on January 31. 2003. Paragon did not feel the letter necessary as the Company maintained it had properly accounted for the acquisition of PGNF Home Lending Corp. BP Professional Group, LLP decided to proceed with the preparation and delivery of the letter to the SEC. Upon review and discussion of BP Professional Group, LLP's communication, the SEC determined that no action was necessary in regards to the accounting treatment for the purchase. PERRY ELLIS: Completes $150MM 8-7/8% Senior Sub. Debt Offering -------------------------------------------------------------- Perry Ellis International, Inc., (Nasdaq:PERY) completed its $150 million private offering of 8-7/8% senior subordinated notes due 2013. The company will use the net proceeds from the offering to redeem all $100 million of its 12-1/4% senior subordinated notes due April 2006 at a premium of 106-1/8%. In addition, approximately $40 million of the proceeds will be used to reduce the amounts outstanding under the company's revolving senior credit facility, with the remaining proceeds of approximately $10 million used to pay the 6-1/8% redemption premium and other costs associated with the offering. The $100 million 12-1/4% senior subordinated notes will be redeemed on October 15, 2003. The company will record a special pre-tax charge to its third quarter earnings of approximately $7.3 million, or approximately $0.52 per share, to cover the call premium and other costs associated with the redemption of the $100 million 12-1/4% notes. As such, the company is revising its previous guidance for its fiscal year ending January 31, 2004 from $2.50 per share to approximately $1.98 per share for the impact of these refinancing charges. In conjunction with the new senior subordinated notes, the company has entered into interest rate swaps that it expects, based on current interest rates, will reduce its interest rate expense for next fiscal year by approximately $2.75 million from the level the company had previously expected to incur had it not refinanced the $100 million 12-1/4% notes. "We are very pleased with the success of the note offering," said Perry Ellis International Chief Financial Officer Tim Page. "With this transaction, we are continuing to strengthen our balance sheet and significantly improved our financial flexibility and reduced our interest expense." Perry Ellis International, Inc. (S&P, B+ Corporate Credit Rating, Stable) is a leading designer, distributor and licensor of a broad line of high quality men's sportswear, including causal and dress casual shirts, golf sportswear, sweaters, dress casual pants and shorts, jeans wear, active wear and men's and women's swimwear to all major levels of retail distribution. The company's portfolio of brands includes 18 of the leading names in fashion such as Perry Ellis(R), Jantzen(R), Munsingwear(R), John Henry(R), Grand Slam(R), Natural Issue(R), Penguin Sport(R), the Havanera Co.(TM), Axis(R), and Tricots St. Raphael(R). The Company licenses the Nike(R), Tommy Hilfiger(R), PING(R), Ocean Pacific(R) and NAUTICA(R) brands. Additional information on PEI is available at http://www.perryelliscorporate.com PG&E NATIONAL: Obtains Open-Ended Lease Decision Time Extension --------------------------------------------------------------- PG&E National Energy Group Inc., and its debtor-affiliates an open-ended extension of their time to determine whether to assume, assume and assign, or reject their prepetition nonresidential real property leases to the effective date of their reorganization plan. (PG&E National Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900) PHOTOCHANNEL: Turns to Tangent Management for PR Strategies ----------------------------------------------------------- PhotoChannel Networks Inc. (TSX-VEN: PNI), a global digital imaging network company, is pleased to announce that effective immediately, it has retained the services of Tangent Management Corp. of Vancouver, BC, to design and implement a comprehensive public and investor relations strategy. Tangent's client-driven focus provides superior service in all areas of their public and investor relations efforts. Tangent's principals, Steve Smith and Zachery Dingsdale have more than 30 years combined experience in the media, public markets and financial investor relations. Tangent, which is arm's-length to Photochannel, has been retained for a twelve-month term at $7500 per month. In addition to the monthly fee, subject to the approval of the TSX Venture Exchange, the Company and Tangent have entered into an incentive share purchase option agreement whereby Tangent shall be entitled to acquire up to 750,000 common shares in the capital of the Company at an exercise price of $0.15 per common share, under the terms to the Company's Employee Stock Option Plan. The TSX Venture Exchange has neither approved nor disapproved of the information contained in this release. Founded in 1995, PhotoChannel -- whose June 30, 2003 balance sheet shows a net capital deficit of about CDN$2.6 million -- is a leading digital imaging technology provider for a wide variety of businesses including photofinishing retailers and telecommunications companies. PhotoChannel has created and manages the open standard PhotoChannel Network environment whose focus is delivering digital image orders from capture to fulfillment under the control of the originating PhotoChannel Network partner. There are now over 1700 retail locations accepting print orders from the PhotoChannel system. For more information visit http://www.photochannel.com PRIME RETAIL: Special Shareholders' Meeting Set for October 30 -------------------------------------------------------------- Prime Retail, Inc. (OTC Bulletin Board: PMRE, PMREP, PMREO) will hold a special meeting of stockholders on Thursday, October 30, 2003 in Baltimore, Maryland. The purpose of the Special Meeting will be to consider and approve the previously announced agreement under which the Company will be acquired by an affiliate of The Lightstone Group, LLC, a New Jersey-based real estate company. The record date for the Special Meeting is September 23, 2003. Accordingly, our common stockholders and preferred stockholders of record as of the close of business on September 23, 2003 will be entitled to notice of, and vote at, the Special Meeting. Prime Retail is a self-administered, self-managed real estate investment trust engaged in the ownership, leasing, marketing and management of outlet centers throughout the United States. Prime Retail currently owns and/or manages 36 outlet centers totaling approximately 10.2 million square feet of GLA. Prime Retail also owns 154,000 square feet of office space. Prime Retail has been an owner, operator and a developer of outlet centers since 1988. For additional information, visit Prime Retail's Web site at http://www.primeretail.com * * * As reported in the Troubled Company Reporter's August 18, 2003 edition, the Company's liquidity depends on cash provided by operations and potential capital raising activities such as funds obtained through borrowings, particularly refinancing of existing debt, and cash generated through asset sales. Although the Company believes that estimated cash flows from operations and potential capital raising activities will be sufficient to satisfy its scheduled debt service and other obligations and sustain its operations for the next year, there can be no assurance that it will be successful in obtaining the required amount of funds for these items or that the terms of the potential capital raising activities, if they should occur, will be as favorable as the Company has experienced in prior periods. During 2003, the Company's first mortgage and expansion loan (the "Mega Deal Loan") is anticipated to mature with an optional prepayment date on November 11, 2003. The Mega Deal Loan, which is secured by a 13 property collateral pool, had an outstanding principal balance of approximately $262.1 million as of June 30, 2003 and will require a balloon payment of $260.7 million at the anticipated maturity date. If the Mega Deal Loan is not satisfied on the optional prepayment date, its interest rate will increase by 5.0% to 12.782% and all excess cash flow from the 13 property collateral pool will be retained by the lender and applied to principal after payment of interest. Certain restrictions have been placed upon the Company with respect to refinancing the Mega Deal Loan in the short term. If the Mega Deal Loan is not refinanced, the loss of cash flow from the 13 property collateral pool would eventually have severe consequences on the Company's ability to fund its operations. Based on the Company's discussions with various prospective lenders, it believes a potential shortfall will likely occur with respect to refinancing the Mega Deal Loan as the Company does not currently intend to refinance all of the 13 assets. Nevertheless, the Company believes this shortfall can be alleviated through potential asset sales and/or other capital raising activities, including the placement of mezzanine level debt and mortgage debt on at least one of the assets the Company does not currently plan on refinancing. The Company cautions that its assumptions are based on current market conditions and, therefore, are subject to various risks and uncertainties, including changes in economic conditions which may adversely impact its ability to refinance the Mega Deal Loan at favorable rates or in a timely and orderly fashion and which may adversely impact the Company's ability to consummate various asset sales or other capital raising activities. As previously announced, on July 8, 2003 an affiliate of The Lightstone Group, LLC, a New Jersey-based real estate company, and the Company entered into a merger agreement. In connection with the execution of the Merger Agreement, certain restrictions were placed on the Company with respect to the refinancing of the Mega Deal Loan. Specifically, the Company is restricted from negotiating or discussing the refinancing of the properties securing the Mega Deal Loan with any lenders until September 15, 2003, at which time the Company is only able to enter into refinancing discussions with certain enumerated lenders. After November 11, 2003, the Company may seek refinancing from other lenders. In addition, the Company is precluded from closing any loans relating to the Mega Deal Loan until November 11, 2003. This November 11, 2003 date may be extended until January 11, 2004, at the election of Lightstone, if Lightstone elects prior to September 15, 2003 to (i) pay (A) one-half of the additional interest incurred by the Company between November 11, 2003 and December 31, 2003, and (B) all of the additional interest incurred by the Company between January 1, 2004 and January 11, 2004, if so extended, in respect of the Mega Deal Loan and (ii) loan the Company any shortfall in cash flow that results from the excess cash flow restrictions (all excess cash flow from the 13 property collateral pool will be retained by the lender and applied to principal after payment of interest) under the Mega Deal Loan that become effective on November 11, 2003 and thereafter until the Mega Deal Loan is paid in full. In addition to the restrictions with respect to the refinancing of the Mega Deal Loan, pursuant to the terms of the Merger Agreement, the Company has also agreed to certain conditions pending the closing of the proposed transaction. These conditions provide for certain restrictions with respect to the Company's operating and refinancing activities. These restrictions could adversely affect the Company's liquidity in addition to its ability to refinance the Mega Deal Loan in a timely and orderly fashion. If the Merger Agreement is terminated under certain circumstances, the Company would be required to make payments to Lightstone ranging from $3.5 million to $6.0 million which could adversely affect the Company's liquidity. In connection with the completion of the sale of six outlet centers in July 2002, the Company guaranteed to FRIT PRT Bridge Acquisition LLC (i) a 13% return on its $17.2 million of invested capital, and (ii) the full return of its invested capital by December 31, 2003. As of June 30, 2003, the Mandatory Redemption Obligation was approximately $14.9 million. The Company continues to seek to generate additional liquidity to repay the Mandatory Redemption Obligation through (i) the sale of FRIT's ownership interest in the Bridge Properties and/or (ii) the placement of additional indebtedness on the Bridge Properties. There can be no assurance that the Company will be able to complete such capital raising activities by December 31, 2003 or that such capital raising activities, if they should occur, will generate sufficient proceeds to repay the Mandatory Redemption Obligation in full. Failure to repay the Mandatory Redemption Obligation by December 31, 2003 would constitute a default, which would enable FRIT to exercise its rights with respect to the collateral pledged as security to the guarantee, including some of the Company's partnership interests in the 13 property collateral pool under the aforementioned Mega Deal Loan. Because the Mandatory Redemption Obligation is secured by some of the Company's partnership interests in the 13 property collateral pool under the Mega Deal Loan, the Company may be required to repay the Mandatory Redemption Obligation before, or in connection with, the refinancing of the Mega Deal Loan. Additionally, any change in control with respect to the Company accelerates the Mandatory Redemption Obligation. In connection with the execution of the Merger Agreement, Lightstone has agreed to provide sufficient financing, if necessary, to repay the Mandatory Redemption Obligation in full at its maturity. The new financing would be at substantially similar economic terms and conditions as those currently in place for the Mandatory Redemption Obligation and would have a one-year term. The Company has fixed rate tax-exempt revenue bonds collateralized by properties located in Chattanooga, Tennessee which contain (i) certain covenants, including a minimum debt-service coverage ratio financial covenant and (ii) cross-default provisions with respect to certain of its other credit agreements. Based on the operations of the collateral properties, the Company was not in compliance with the Financial Covenant for the quarters ended June 30, September 30 and December 31, 2002. In the event of non-compliance with the Financial Covenant or default, the holders of the Chattanooga Bonds had the ability to put such obligations to the Company at a price equal to par plus accrued interest. On January 31, 2003, the Company entered into an agreement with the Bondholders. The Forbearance Agreement provides amendments to the underlying loan and other agreements that enable the Company to be in compliance with various financial covenants, including the Financial Covenant. So long as the Company continues to comply with the provisions of the Forbearance Agreement and is not otherwise in default of the underlying loan and other documents through December 31, 2004, the revised financial covenants will govern. Additionally, certain quarterly tested financial covenants and other covenants become effective June 30, 2004. Pursuant to the terms of the Forbearance Agreement, the Company was required to fund $1.0 million into an escrow account to be used for conversion of certain of the retail space in the collateral properties to office space and agreed that an event of default with respect to the other debt obligations related to the property would also constitute a default under the Chattanooga Bonds. The Company funded this required escrow in February 2003. The outstanding balance of the Chattanooga Bonds was approximately $17.9 million as of June 30, 2003. With respect to the Chattanooga Bonds, based on the Company's current projections, it believes it will not be compliance with certain quarterly tested financial covenants when they become effective on June 30, 2004 which would enable the Bondholders to elect to put the Chattanooga Bonds to the Company at their par amount plus accrued interest. The Company continues to explore opportunities to (i) obtain alternative financing from other financial institutions, (ii) sell the properties securing the Chattanooga Bonds and (iii) explore other possible capital transactions in order to generate cash to repay the Chattanooga Bonds. There can be no assurance that the Company will be able to complete any such activity sufficient to repay the amount outstanding under the Chattanooga Bonds in the event the Bondholders are able and elect to exercise their put rights. These conditions raise substantial doubt about the Company's ability to continue as a going concern. QUADRAMED CORP: Files 1st and 2nd Quarter Reports on Form 10-Q -------------------------------------------------------------- On Friday, September 19, 2003, QuadraMed Corporation filed its Form 10-Q's with the Securities and Exchange Commission for the quarters ended March 31, 2003 and June 30, 2003. The Company is now current with its SEC filings and intends to begin the process of applying for relisting of its Common Stock on the NASDAQ Stock Market. QuadraMed's delinquencies with its SEC filings, and its subsequent delisting from NASDAQ, were the result of the restatement of the Company's financial statements for the years ended December 31, 1999, 2000, and 2001 that began in the summer of 2002 and concluded in August of this year. "I am pleased that the restatement effort and its effect on all of our SEC filings are now behind us. I am proud of the way we performed during this period of uncertainty. Now we can focus on growth. Our customers have remained incredibly loyal to us, our new products have been well received and we are regaining our sales momentum rapidly. I hope to be at full stride by year end," said Lawrence P. English, QuadraMed's Chairman and Chief Executive Officer. QuadraMed's Chief Financial Officer, Charles J. Stahl, congratulated the finance team for achieving this milestone. Commenting on the six months ended June 30, 2003 he stated, "We solved the liquidity crisis brought about by the delisting from NASDAQ and operating results improved over the course of the first half of 2003. We generated over $1.0 million of positive cash flow from operations in the second quarter as a result of lower restatement costs and strong expense discipline in the operating units. Now we need to see more revenue and sales." Revenues for the six months ended June 30, 2003 were $58.7 million, an increase of $5.1 million or 9.7% over the same period last year. This increase was principally the result of the Company's acquisition of PDS Pharmacy in June of 2002. Loss from operations for the six month period ended June 30, 2003 was $13.8 million, an increase of almost $13.0 million over the same period in the prior year. The majority of this increase was due to restatement costs of $6.5 million, and an investment in Research and Development spending of $10.7 million. The loss from operations for the second quarter was $4.1 million; an improvement over the first quarter loss of $9.7 million. Cash (used in) provided by operating activities was ($5.4) million for the six months ended June 30, 2003. This amount was ($6.4) million for the first quarter, and $1.0 million for the second quarter. A conference call has been has been scheduled for October 8, 2003 at 5:00 PM Eastern Time. Details on how to participate in the call will be posted on the QuadraMed Web site at http://www.quadramed.com one week prior to the call. QuadraMed -- whose June 30, 2003 balance sheet shows a total shareholders' equity deficit of about $10 million -- is dedicated to improving healthcare delivery by providing innovative healthcare information technology and services. From clinical to patient information management and revenue cycle to health information management, QuadraMed delivers real-world solutions that help healthcare professionals deliver outstanding patient care with optimum efficiency. Behind our products and services is a staff of more than 850 professionals whose healthcare experience has earned QuadraMed the trust and loyalty of its more than 1,500 customers. To find out more about QuadraMed, visit http://www.quadramed.com REPRTON ELECTRONICS: Commences OTCBB Trading Effective Sept. 22 --------------------------------------------------------------- Reptron Electronics, Inc. (OTC Bulletin Board: REPT), an electronics manufacturing services company, reported that its stock will now be traded on the National Association of Securities Dealers' Over-the-Counter Bulletin Board (OTCBB) effective on September 22, 2003. The Company's common stock was previously traded on the Nasdaq SmallCap Market but was delisted effective with the opening of business on September 22, 2003 by action of the Nasdaq Listing Qualifications Panel. Its trading symbol will not change. Reptron Electronics, Inc. is an electronics manufacturing services company providing engineering services, electronics manufacturing services and display integration services. Reptron Manufacturing Services offers full electronics manufacturing services including complex circuit board assembly, complete supply chain services and manufacturing engineering services to OEMs in a wide variety of industries. Reptron Display and System Integration provides value- added display design engineering and system integration services to OEMs. For more information, access http://www.reptron.com * * * Restructuring the 6-3/4% Notes As reported in Troubled Company Reporter's July 02, 2003 edition, the Company reached an agreement on a term sheet to restructure its 6-3/4% Subordinated Convertible Notes due in August, 2004. The current outstanding balance on the Notes is approximately $76.3 million. The agreement was negotiated with an ad hoc committee of Noteholders. Conclusion of the understanding reached is subject to satisfaction of a number of conditions and the negotiation and execution of definitive agreements. In February this year, Standard & Poor's Ratings Services lowered its corporate credit rating on Reptron Electronics Inc. to 'D' from 'B-' and its subordinated note rating to 'D' from 'CCC', after the Company failed to make the semiannual interest payment due on Feb. 1, 2003, on its 6-3/4% convertible bonds. ROHN INDUSTRIES: Wants More Time to File Schedules & Statements --------------------------------------------------------------- Rohn Industries, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Indiana to extend their time to file its schedules of assets and liabilities, statements of financial affairs and lists of executory contracts and unexpired leases required under 11 U.S.C. Sec. 521(1). The Debtors point out that due to the complexity of the financial position, the divergent requirement upon its employees and management team, and the event that led to the filing of these cases, they were unable to complete their Schedules and Statements of Financial Affairs contemporaneously with the filing its petition. The Debtors estimate that they will need an additional 45 days to complete the Schedules and Statements and needs until October 31, 2003 to file it with the Court. Headquartered in Frankfort, Indiana, Rohn Industries, Inc. manufactures and installs infrastructure components for the telecommunications industry. The Company files for chapter 11 protection on September 16, 2003 (Bankr. S.D. Ind. Case No. 03- 17287). Henry Efroymson, Esq., at Ice Miller Donadio & Ryan represents the Debtors in their restructuring office. When the Company filed for protection from its creditors, it listed $22,576,661 in total assets and $27,833,458 in total debts. ROWE INT'L: Bringing-In Van Dyke as Special Purpose Counsel ----------------------------------------------------------- Rowe International is seeking permission from the U.S. Bankruptcy Court for the Western District of Michigan to employ Van Dyke, Gardner, Linn & Burkhart, LLP as Special Purpose Counsel. The Debtor reports that Van Dyke currently represents and has represented the Debtor on intellectual property matters. The Debtor however, assures the Court that Van Dyke is a "disinterested person" as that term is defined in the Bankruptcy Code. The Debtor points out that Van Dyke's knowledge of the history of the Debtor and its intellectual legal matters will be crucial to the success of the Debtor's attempt to reorganize. If not permitted to retain Van Dyke as special purpose counsel, the Debtor would be required to locate and hire another law firm to represent it. Replacement counsel would require considerable time to become familiar with the Debtor's legal needs regarding these matters. Thus, the estate would be forced to expend a considerable amount of money on the fees of replacement counsel simply to bring them "up to speed" in the matters they would inherit. There is no reason why the estate should have to bear such costs, given Van Dyke Gardner's willingness to continue to represent the Debtor and the acknowledged expertise of Van Dyke Gardner in the matters for which they are retained. Frederick S. Burkhard, Esq., will lead the engagement. Van Dyke will bill the Debtor his current hourly rate of $305 per hour. Mr. Burkhard adds that paralegals that will assist him in this representation will be charged $130 per hour. Headquartered in Grand Rapids, Michigan, Rowe International, Inc., manufactures commercial and home CD jukeboxes. The Company filed for chapter 11 protection on August 29, 2003 (Bankr. W.D. Mich. Case No. 03-10537). The Debtor listed estimated assets of more than $10 million and estimated debts of more than $100 million in its petition. SENSE TECH.: Exchange Offer Expiry Date Extended to October 6 ------------------------------------------------------------- Sense Technologies Inc. (OTC Bulletin Board: SNSG) is extending the expiry date of its exchange offer for all of its secured and unsecured convertible promissory notes outstanding. The offer will now expire on Monday, October 6, 2003 at 12:00 midnight Eastern Time. As at September 22, 2003, 100% of the Series "A" Convertible Secured Promissory Notes have been tendered to the company pursuant to the exchange offer. In addition, $1,000,000 of the Convertible Unsecured Notes have been tendered representing 78% of the total outstanding. A total of $1,250,000 or 94.3% of the Convertible Unsecured Notes must be tendered as a condition to the successful completion of the exchange offer for both the secured and unsecured convertible promissory notes. Under the terms of the exchange offer, Holders of Series A Convertible Secured Notes will have the opportunity to exchange their notes for new notes maturing in August of 2005. The new secured notes will bear interest at 10% per annum and be convertible into common shares at $0.29 per share. The new secured notes will also be redeemable after August 30, 2005, in whole or in part at the option of the Company upon payment of principal and interest. Holders of the Convertible Unsecured Notes will have the opportunity to exchange their notes for Class A Preferred Shares at a deemed price of $1.00 per share. The Class A Preferred Shares will entitle the holders to dividends at the rate of $0.10 per share annually, and each share may be converted into common shares at the rate of $0.29 per share. The Class A Preferred Shares will be redeemable after August 30, 2005, in whole or in part at the option of the Company at the rate of $1.00 per share plus unpaid dividends thereon. Sense Technologies holds exclusive patents on an automotive Doppler radar system that alerts drivers to potential hazards while backing. The Guardian Alert(R) Doppler Awareness System has a sensor that mounts at the rear of a vehicle and a warning indicator inside the vehicle. The system is maintenance free and can detect objects behind a backing vehicle in all weather and lighting conditions. The product can be fitted on existing vehicles as well as new cars and trucks. Thousands of Guardian Alert systems are in use on commercial fleets as well as on passenger vehicles today. At May 31, 2003, Sense Technologies' balance sheet shows a working capital deficit of about $2 million and a total shareholders' equity deficit of about $2.7 million. SIMONDS INDUSTRIES: Plans to Merge With International Knife ----------------------------------------------------------- Simonds Industries Inc., a leading provider of industrial cutting tools, plans to merge with International Knife and Saw, a leading provider of industrial knife products. The merged company, Simonds International Corporation, will have the premier product offering of cutting tools and related products in the wood, pulp, paper, metal, and other industries. In conjunction with the merger, Simonds has also announced a plan to recapitalize the company that will significantly reduce its indebtedness, opening the way for renewed investment to continue its business momentum. Simonds' lenders have unanimously agreed to a debt for equity exchange in order to accomplish the recapitalization of the company. Both the merger and recapitalization are subject to the closing conditions that are usual for transactions of a similar nature and scope. Ray Martino, President and Chief Executive Officer of Simonds, said: "This merger and recapitalization plan is the final phase of restructuring undertaken by Simonds. The restructuring plan demonstrates the commitment made to our customers, vendors, and employees to focus on delivering new products, improving customer satisfaction, and strengthening the company's financial structure." Peter Schweinfurth, Chairman and Interim Chief Executive Officer of International Knife & Saw, said: "We are very excited about this merger and the resulting better utilization of factory capacity, stronger research and development, broader product line, and improved customer service capability." Simonds Industries Inc., founded in 1832, is a leading supplier of cutting tools and related products to the wood, pulp, paper, and metal markets. For more information, visit http://www.simonds.cc International Knife and Saw is a leading supplier of industrial knife products and a broad range of saw and knife products for the wood, paper, tissue, metal and packaging markets. For more information visit http://www.iksinc.com As previously reported, Simonds Industries defaulted on its semi-annual interest payment under its 10-1/4% Senior Subordinated Notes due 2008, and as a result of such non-payment, an event of default exists with respect to those notes under the terms of the Indenture. SK GLOBAL: Proposes Uniform Interim Compensation Procedures ----------------------------------------------------------- SK Global America Inc. proposes to implement uniform procedures for compensating and reimbursing Court-approved professionals on a monthly basis. Scott E. Ratner, Esq., at Togut, Segal & Segal LLP, in New York, explains that the proposed compensation procedures will enable all parties to closely monitor administration costs and assist the Debtor in implementing efficient cash management procedures. The Debtor wants the monthly and quarterly compensation and reimbursement of expenses of the professionals to be structured as: A. Monthly Professional Fee Statements (a) No later than the 25th day of each month after the month for which compensation is sought, each professional will file with the Court, a monthly fee statement, and provide notice of the Statement to: -- SK Global America, Inc. 100 Parker Plaza 400 Kelby Street Fort Lee, New Jersey 07024 Attn: Mr. Richard Kim; -- Togut, Segal & Segal LLP One Penn Plaza Suite 3335 New York, New York 10119 Attn: Scott E. Ratner, Esq.; -- Counsel for the official statutory committee unsecured creditors appointed in the Debtor's Chapter 11 case and in the event the Committee has not been appointed, the Debtor's 20 largest unsecured creditors; -- McDermott, Will & Emery 50 Rockefeller Plaza New York, New York 10020-1605 Counsel for Cho Hung Bank Attn: Stephen Selbst, Esq.; -- Nixon Peabody LLP 101 Federal Street Boston, Massachusetts 02110 Counsel for Korea Exchange Bank Attn: Mark Berman, Esq.; -- White & Case 1155 Avenue Of The Americas New York, New York 10036-2700 Counsel for the Foreign Bank Steering Committee Attn: Evan Hollander, Esq.; and -- The United States Trustee 33 Whitehall Street, 21st Floor New York, New York 10004 Attn: Greg Zipes, Esq.; (b) Each Monthly Statement must contain a list of the individuals, and their titles, who provided services during the period covered by the Monthly Statement, their billing rates, the aggregate hours spent by each individual, a reasonably detailed breakdown of the disbursements incurred, and contemporaneously maintained time entries for each individual in increments of tenths of an hour. No professional should seek reimbursement of an expense that would otherwise not be allowed pursuant to the Court's Administrative Orders dated June 24, 1991 and April 21, 1995, or the United States Trustee Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under Section 330 of the Bankruptcy Code dated January 30, 1996; (c) Each Monthly Fee Statement and any notice of it will clearly and conspicuously display the deadline to timely file an objection, set 20 days after the Monthly Fee Statement is filed; (d) If any party objects to the Monthly Fee Statement, the objecting party must timely and properly file with the Court, on or before the monthly objection deadline, a written statement of its objection that sets forth the precise nature of the objection and the specific amount of objectionable fees or expenses at issue, and serve the Objection on the affected professional and the Notice Parties; (e) If an Objection is filed, the Affected Professional may file a reply to the Objection. The Objecting Party and the Affected Professional will then proceed to make good faith attempts to resolve the Objection on a consensual basis. If the parties are unable to resolve the Objection in good faith within 15 days after the Objection is filed with the Court, the Affected Professional may request for the Court to set a hearing to consider the Objection; (f) If no Objection to a Monthly Fee Statement has been filed prior to the relevant Objection Deadline, the Debtor will be authorized to pay each Professional an amount equal to 80% of the fees and 100% of the expenses requested in the Monthly Fee Statement. To the extent that there is an Objection to a portion of the Monthly Fee Statement, the Affected Professional will file with the Court and serve on the Debtor and its counsel, a certification indicating that there has been an Objection only to a portion of the Application and stating the total fees and expenses in the Statement not subject to an Objection. After the filing, the Debtor will be authorized to pay the Affected Professional an amount equal to 80% of the fees and 100% of the expenses not subject to an Objection; and (g) A pending objection to a Monthly Fee Statement will not disqualify a Professional from the future payment of compensation or reimbursement of expenses that are requested in accordance with the Compensation Procedures. B. Quarterly Professional Fee Applications (a) Beginning with the Petition Date through October 31, 2003, and every 120 days thereafter, each Professional will file with the Court, within 45 days of the end of the Quarterly Fee Period, a quarterly fee application for interim court approval and allowance of 100% of the compensation and expense reimbursement sought in the Monthly Fee Statements filed during the Quarterly Fee Period. Each Professional will contemporaneously provide notice of the Quarterly Fee Application to the Notice Parties; (b) Any Professional that fails to file a Quarterly Fee Application when due will be ineligible to receive payments of any fees or expenses under these Compensation Procedures until the Professional has complied; (c) Each Professional is required to serve a copy of each interim or final fee application only on: -- the Debtor; -- the Debtor's counsel; -- counsel to the Committee and the Debtor's 20 largest unsecured creditors, to the extent a Committee is not appointed; -- the United States Trustee; and -- those parties having filed a notice of appearance in this case and request for service of pleadings; and (d) A pending objection to a Quarterly Fee Application will not disqualify a Professional from the future payment of compensation or reimbursement of expenses that are requested in accordance with the Compensation Procedures. C. Reimbursement of Committee Members' Expenses Each member, excluding ex officio members, of any Official Committee will submit statements of expenses and supporting vouchers to the Committee's counsel. Counsel to each Committee will then separately identify their Committee members' request for reimbursement in the Committee's Monthly Fee Statements and Quarterly Fee Applications to be filed in accordance with these Compensation Procedures. The expenses of the Committee members will be approved in accordance with the Compensation Procedures. D. Monthly Operating Reports The Debtor will list and itemize all payments to Professionals and members of any Committee in their monthly operating reports. Accordingly, the Debtor asks the Court to approve the proposed interim compensation procedures pursuant to Sections 105(a) and 331 of the Bankruptcy Code. In addition, the Debtor seeks the Court's permission to limit the notice of hearings to consider interim applications to: (a) their counsel; (b) counsel to the Committee and, in the event a Committee is not appointed, the Debtor's 20 largest unsecured creditors; (c) the United States Trustee; and (d) all parties who have filed a notice of appearance with the Clerk of the Court and requested the notice. (SK Global Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900) SMART WORLD: Debtors Appeal Juno Settlement Decision ---------------------------------------------------- J. Alex Kress, Esq., at Riker, Danzig, Scherer, Hyland & Perretti LLP, serving as Special Litigation Counsel to Smart World Technologies, LLC, Freewwweb, LLC, and Smart World Communications, Inc., tells the the U.S. Bankruptcy Court for the Southern District of New York that his debtor clients will ask the District Court to review the propriety of a settlement pact among the Company's Official Committee of Unsecured Creditors, Juno Online Services, Inc., MCI WorldCom Network Services, Inc., and UUNet Technologies, Inc. Mr. Kress' debtor clients didn't consent to the settlement and believe it's way too low. The Debtors put seven questions before the District Court for review: (1) Whether the Bankruptcy Court erred in authorizing the Official Committee of Unsecured Creditors, MCI WorldCom Network Services, Inc. and UUNET Technologies, Inc. to employ the power of a "trustee" under Federal Rule of Bankruptcy Procedure 9019 to settle, over the Debtors' opposition, a litigation which the Debtors were ready, willing and able to litigate, desired to continue and were actively litigating, to the extent permitted by the Bankruptcy Court? (2) Whether the Bankruptcy Court erred in approving a settlement of the Debtors' claims against Juno Online Services, Inc. with a potential value of $50,000,000 or more for $5,000,000, i.e. only $1,000,000 more than the amount Juno owed the Debtors based on the qualified subscribers Juno concededly received pursuant to its agreements with the Debtors? (3) Whether the Bankruptcy Court erred in approving the settlement without adequately exploring the merits of the Debtors' claims, the prospects of litigating those claims and the fairness of the compromise as required by Protective Committee of TMT v. Anderson, 39 U.S. 414, 440-41 (1968)? (4) Whether the Bankruptcy Court erred in approving the settlement when the Bankruptcy Court had imposed a two and one-half year stay of discovery and had denied the Debtors any discovery with respect to the motion to approve the settlement? (5) Whether the Bankruptcy Court erred in approving the settlement when it had denied the Debtors' repeated requests to recommence the litigation? (6) Whether the Bankruptcy Court erred in approving the settlement based on the uncorroborated statements of the movants' counsel and the testimony of the Juno's in-house counsel who had no unprivileged knowledge of the facts underlying the litigation? (7) Whether the Bankruptcy Court erred in approving the settlement when it disregarded and refused to admit the testimony and documentary evidence proffered by the Debtors to demonstrate the facts underlying the litigation and the merits of the Debtors' claims including the amount of damages suffered by the Debtors? Bad Settlement The settlement, the Debtors argue, undermines their effort to recover sufficient funds not only to pay priority and unsecured creditors in full, but probably enough to achieve a recovery for the Debtors' equity security holders! The Debtors say the Joint Motion brought by the non-debtor parties to the Bankruptcy Court provides no basis for the Court to conclude that the proposed settlement is reasonable and lacks sufficient information to support the factual findings necessary to approve the settlement. The Debtors say the settlement falls outside the range of reasonableness and contains numerous infirmities: * First, the proposed settlement does not even require Juno to pay the minimum amount Juno owes to the Debtors based on the admitted facts and fails to recognize the Debtors' substantial arguments for a significantly greater recovery. * Second, the proposed settlement improperly recognizes and overstates the liens and claims of WorldCom and subverts the Bankruptcy Code in the process. Given the substantial upside potential for the Debtors' bankruptcy estate, not to mention the lack of any reasonable opportunity for the Debtors to investigate the bona fides of the their claims against Juno, the Bankruptcy Court cannot approve the settlement. * Furthermore, in even bringing the settlement before the Court, the Committee improperly relies on doctrines only applicable to the situation where a debtor is refusing to pursue claims which a committee wishes to pursue; these are not applicable to permit the Committee to settle claims over the Debtors' objection when the Debtors are willing and able to and are actively litigating the claims. On June 29, 2000, the Debtors each filed voluntary chapter 11 petitions in the United States Bankruptcy Court for the Southern District of New York (Bankr. Case Nos. 00-41645 (CB) through 00- 41647 (CB)). A principal purpose of the Debtors' bankruptcy filings was to consummate the sale of the Debtors' assets to Juno. It's that transaction that gives rise to the Debtors' claims against Juco. Prior to the Petition Date, one of the Debtor's product was an internet service provider called "Freewwweb.com" which provided internet access to subscribers free of charge and relied upon advertising revenues to cover its cost. Prior to the Petition Date, the Debtors also developed a distribution system designed to channel subscribers to Freewwweb. Eventually, the Debtors grew into an operation which employed more than 140 people and acquired more than 1,700,000 registered subscribers, approximately 750,000 of whom were active users as of the Petition Date. Furthermore, the Debtors relate, as of the Petition Date, it was clear that the Debtors' distribution system was remarkably effective. It included, among other things, master distributors and approximately 3,000 dealers who actively solicited subscribers in exchange for contractual payments for each subscriber provided. This system was generating approximately 350,000 new subscribers per month as of the Petition Date and, over the nine to ten months prior to the Petition Date, had been increasing each month. After retaining Jeffries & Co. as its investment banker, the Debtors made several presentations in an effort to solicit bids for the purchase of its stock assets. Ultimately, these efforts resulted in the Debtors agreeing to a sale of its subscriber base and distribution system to Juno pursuant to a "Summary of Terms" dated June 29, 2000, with appended confirmation letter. Despite the lack of definitive documents, Juno insisted on the Debtors' immediately filing a bankruptcy petition and moving immediately to consummate the Term Sheet in a bankruptcy sale. The Term Sheet required Juno to compensate the Debtors in a combination of cash and Juno stock for FW Subscribers who became Juno subscribers at a rate starting at $40 per subscriber and growing to $50 per subscriber after the first 250,000 subscribers. The Term Sheet included lots of adjustments for this, that and the next thing. Smart World says Juno breached the Term Sheet in many ways, failed to provide adequate records and accountings, failed at customer service, and ultimately caused the business to fail and deliver inadequate value to the Estates. "Even on the most conservative basis, Juno owes the Debtors at least $6,900,000, probably $16,000,000, and potentially $32,000,000. Juno, of course, disputes these claims. WorldCom, UUNet and the Committee want to wrap-up Smart World's bankruptcy cases and move on. Juno has agreed to settle for $5,500,000 and everybody but the Debtor asks Judge Blackshear to approve this compromise. Smart World says the settlement motion is extraordinary because the Debtors are willing and able to pursue and are actively pursuing the Claims. Mr. Kress reminds the Court that he and his firm are working on a contingency fee basis. Mr. Kress smells smoke, thinks he can convince a jury there's fire, and wants the opportunity to pursue the estates' claims against Juno to maximize value for all stakeholders. SPIEGEL GROUP: Hires Keen Realty and Centerpoint to Sell Assets --------------------------------------------------------------- As part of its ongoing reorganization process, Spiegel, Inc. has retained Keen Realty, LLC and Centerpoint Development to sell a 4 million+/- sq. ft. distribution facility located at 4545 Fisher Road in Columbus, Ohio. Offers to purchase the facility are due no later than November 12, 2003 and offers to lease significant blocks of the property are due by October 29, 2003. "The unique design features of this facility allow for multiple configurations of self-contained units, making it attractive for both investors and users," said Craig Fox, Keen Realty's Vice President. "We are currently considering offers for the property and also are looking at large-scale leasing opportunities," Fox added. "Given the significant interest we have already seen, we expect the property to sell quickly and encourage all interested parties to contact us as soon as possible," he said. The facility, which was constructed in 1971 and expanded in 1980, consists of 18 "cores" which can be configured into self-contained operating units of varying sizes. The facility is fully temperature controlled, contains 208 truck docks and has ceiling heights ranging from 17'-30'. 200,000+/- sq. ft. of office space adjoins the warehousing section of the facility. Set on a 154+/- acre site, the property has excellent access to all major transportation routes. On March 17, 2003, Spiegel, Inc. filed for reorganization under chapter 11 of the U.S. Bankruptcy Code. Accordingly, all transactions relating to this facility are subject to Bankruptcy Court approval. The company has received approval from the Bankruptcy Court to retain Keen Realty, LLC to provide real estate consulting, valuation, disposition and portfolio restructuring services. For more than 20 years, Keen Realty has had extensive experience solving complex problems and evaluating and selling real estate, leases and businesses in bankruptcies, workouts and restructurings. Other current and recent clients of Keen include Arthur Andersen, Fruit of the Loom Liquidation Trust, Big V Holdings, Cooker Restaurants, Country Home Bakers, Cumberland Farms, Premcor, Fleming Companies, Tommy Hilfiger Retail and The Warnaco Group. Centerpoint Development is a Columbus-based development and commercial brokerage operating in central Ohio. Its principals have assisted The Spiegel Group in all of its central Ohio real estate activities for the past 12 years. For more information regarding the Columbus, Ohio distribution center facility and other Spiegel Group properties, please visit Keen's Web site at http://www.keenconsultants.com TOYS R US: Completes Sale of $400-Million Fifteen-Year Bonds ------------------------------------------------------------ Toys "R" Us, Inc. completed its offering of $400 million of fifteen-year bonds due October 15, 2018, rated BB+ by Standard & Poor's with Stable Outlook. Citigroup, Wachovia Securities, and BNY Capital Markets, Inc. were the joint lead managers for this sale. The company also sold $400 million of ten-year bonds in early April 2003. These two bond offerings were issued under the $800 million shelf registration statement that the company filed with the SEC in March 2003. Louis Lipschitz, Chief Financial Officer commented, "This bond offering completes our three-year plan to term out our debt and thus reduce our dependence on the more volatile short-term debt markets. In addition, we have completed the pre-funding of our 2004 debt maturities, while ensuring that we have ample liquidity to meet our obligations. "Our balance sheet and our liquidity are strong. We ended the second quarter with no short-term borrowings and more than $900 million in cash. We expect to meet our seasonal borrowing requirements for the 2003 holiday period without utilizing our revolving credit facilities. These facilities total $885 million and consist of a 364-day revolving credit facility for $200 million maturing in May 2004, and our 5-year $685 million facility, which matures in 2006. Together these facilities continue to provide significant excess liquidity, which we believe is desirable during uncertain economic times. We also expect to have approximately $800 million in cash at the time of our seasonal peak at the end of the third quarter." Mr. Lipschitz concluded, "We currently plan for capital expenditures in 2003 to be below our anticipated depreciation expense of $330 million. Thus, we believe this year we will improve upon 2002's $176 million of cash flow from operations net of capital expenditures. Our enhanced financial condition combined with our merchandising strategies position us well as we enter the critical part of our fiscal year." Toys "R" Us, one of the world's leading retailers of toys, children's apparel and baby products, currently sells merchandise through 1,613 stores worldwide: 681 toy stores in the United States; 558 international toy stores, including licensed and franchise stores; 188 Babies "R" Us stores, 146 Kids R Us children's clothing stores, 36 Imaginarium stores, and 4 Geoffrey stores, and through its Internet sites at http://www.toysrus.com http://www.babiesrus.com http://www.imaginarium.com and http://www.giftsrus.com TRANSWITCH: Fixes Base Share Amount & Note Auto-Conversion Price ---------------------------------------------------------------- TranSwitch Corporation (NASDAQ:TXCC) announced that a conversion consideration determination period for its exchange offer of new 5.45% Convertible Plus Cash Notes(SM) due September 30, 2007 has concluded. Pursuant to the terms of the exchange offer, the base share amount and the auto-conversion price is to be fixed as of the second trading day immediately preceding the expiration date of the exchange offer, which will be September 24, 2003, unless extended by TranSwitch as permitted by the terms of the exchange offer. Each Plus Cash Note will be convertible into 182.71 shares of TranSwitch common stock (the base share amount) plus $500 in cash, which TranSwitch may elect to pay with shares of its common stock under certain circumstances. TranSwitch may auto-convert the Plus Cash Notes any time the closing price of its common stock exceeds $5.47 for 20 trading days during any consecutive 25 trading day period, subject to the terms of the Plus Cash Notes. The base share amount was determined by dividing (i) the result of subtracting the $500 plus cash amount from $952.38, by (ii) the simple average of the closing bid price of TranSwitch's common stock on September 16, 17, 18, 19 and 22, 2003. The auto- conversion price was determined by dividing (i) the result of subtracting the $500 plus cash amount from $1,500 by (ii) 182.71, which is the number of base shares. On August 27, 2003, TranSwitch commenced an offer to exchange up to $94.1 million aggregate principal amount of its new convertible Plus Cash Notes for up to $114.1 million aggregate principal amount of its currently outstanding 4-1/2% Convertible Notes due 2005. The Company is also offering holders of its existing notes the option to indicate their interest to purchase for cash up to an additional $20 million of the Plus Cash Notes. The exchange offer is scheduled to expire at 12:00 midnight, New York City time (EST), on September 24, 2003, unless extended. U.S. Bancorp Piper Jaffray Inc., is serving as the dealer manager for the exchange offer and placement agent for the new money offering. U.S. Bank National Association is serving as the exchange agent. A prospectus for the exchange offer and new money offering is available free of charge from the information agent, Georgeson Shareholder Communications Inc., 17 State Street, 10th Floor, New York, New York 10004 (800-723-8038). The prospectus related to the exchange offer and new money offering and the letter of transmittal and other materials related to the exchange offer may also be obtained free of charge at the SEC's Web site -- http://www.sec.gov A tender offer statement, combined registration statement (and the prospectus included therein), a related letter of transmittal and other offer documents relating to these securities have been filed with the Securities and Exchange Commission but the registration statement has not yet become effective. These documents contain important information that should be read carefully before any decision is made with respect to the exchange offer or the new money offering. These securities may not be exchanged or sold, nor may offers to exchange or offers to buy them be accepted prior to the time the registration statement becomes effective. TranSwitch Corporation (S&P, B- Corporate Credit Rating, Negative), headquartered in Shelton, Connecticut, is a leading developer and global supplier of innovative high-speed VLSI semiconductor solutions - Connectivity Engines(TM) - to original equipment manufacturers who serve three end-markets: the Worldwide Public Network Infrastructure, the Internet Infrastructure, and corporate Wide Area Networks. Combining its in-depth understanding of applicable global communication standards and its world-class expertise in semiconductor design, TranSwitch Corporation implements communications standards in VLSI solutions which deliver high levels of performance. Committed to providing high- quality products and service, TranSwitch is ISO 9001 - 2000 registered. Detailed information on TranSwitch products, news announcements, seminars, service and support is available on TranSwitch's home page at the World Wide Web site - http://www.transwitch.com UNITED AIRLINES: Asks Court to Disallow $4BB of Duplicate Claims ---------------------------------------------------------------- James H.M. Sprayregen, Esq., at Kirkland & Ellis, reports that to date, approximately 42,943 proofs of claim have been filed against the Debtors. The United Airlines Debtors object to 908 Claims. The Debtors determined that certain proofs of claim assert duplicate claims for a single liability. In some cases, creditors filed identical Proofs of Claim asserting the same Claim against the Debtors. Creditors are not entitled to multiple recoveries for a single liability against a debtor. Accordingly, as a bookkeeping matter, the Debtors ask the Court to disallow 880 Duplicate Claims totaling $4,259,784,128 from the claims register. Surviving Claims will not be affected by this objection. Among the Duplicate Claims are: Name Duplicate Amount Surviving Amount ---- ---------------- ---------------- Michael Allum $3,000,000 $3,000,000 Sheryl Bauch 1,000,000 1,000,000 Arnold Bernard 1,000,000 1,000,000 Floyd Bost 2,000,000 2,000,000 James Brannen 1,500,000 1,500,000 Brian McMannus & Assoc. 2,657,000 2,657,000 City of Chicago 2,420,791 2,420,791 State of Colorado 7,544,776 7,544,776 Denver Int'l Airport 275,054,860 275,054,860 Dolan Law Firm 1,856,367 1,856,367 John Foster 2,252,648 2,252,648 Patricia Guter 4,000,000 4,000,000 Sandra Huff 1,000,000,000 1,000,000,000 I.R.S. 68,127,382 68,127,382 Jeanna Kellerman 1,000,000 1,000,000 Virginia Kirschner 1,064,801 1,064,801 Los Angeles County 11,284,711 11,284,711 Ellen Mariani 50,000,000 50,000,000 Barry McIntyre 2,493,648 2,493,648 MCI WorldCom 1,047,685 1,047,685 Craig Musa 2,000,000,000 2,000,000,000 State of New Jersey 15,019,696 15,019,696 Alvin Pierce 1,000,000 1,000,000 R2 Investments 18,840,000 18,840,000 Esther Rodriguez 50,000,000 50,000,000 Ronald Katz Licensing 38,861,060 38,861,060 Heidi Schrader 5,000,000 5,000,000 Selective Insurance Co. 2,000,000 2,000,000 John Shanta 3,850,000 3,850,000 SkyWest Airlines 13,549,405 13,549,405 Robert Spielman 3,000,000 3,000,000 Linda Thorpe 10,000,000 10,000,000 Wells Fargo 584,000,000 584,000,000 WestLB AG Tokyo Branch 20,564,345 20,564,345 The Debtors also ask Judge Wedoff to reduce 28 claims pursuant to Sections 502(b)(1) and 507 of the Bankruptcy Code. These Claims are filed for amounts that differ from the amounts reflected on the Debtors' books and records. After a thorough review, the Debtors are convinced that the amount of each claim is overstated. The Claims are based on retroactive pay obligations arising under the Debtors' collective bargaining agreement with IAM-represented employees. The Debtors have been making payments based on these calculations for many months and have not received objections to these calculations. Among the Claims to be reduced are: Name Claimed Amount Reduced Amount ---- -------------- -------------- Andy Cox $5,110,039 $4,259 Reilys Julio 777,777,777,778 3,888 Mark Limond 5,000,009,000 8,407 Elder Mendez 997,997,997,998 4,989 Ronald Miltenberger 809,809,809,810 3,049 Charles Mitchell 16,000,000 10,086 Fatiha Rouabah 988,988,988,988 4,941 Michael Ward 500,000,000 11,000 The Claims were asserted in various priorities: Name Claimed Amount Reduced Amount ---- -------------- -------------- Priority $5,000,197,990 $0 Secured 2,376,908,243,919 195,312 Unsecured 997,998,086,544 15,830 -------------- -------------- Total $3,379,906,538,453 $210,941 Objecting parties should file a response. If the Debtors are unable to resolve the response, the Debtors request that each disputed Claim constitute a separate contested matter as contemplated by Rule 9014 of the Federal Rules on Bankruptcy Procedure. (United Airlines Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., 609/392-0900) VIEWLOCITY INC: Inks Definitive Merger Agreement with Viesta ------------------------------------------------------------ Viewlocity, Inc. (OTC:VLCY), a provider of supply chain management software that helps enterprises execute operations more effectively, has signed a definitive agreement to be acquired by Viesta Corporation in a merger with a wholly-owned subsidiary of Viesta. Viesta is a newly formed corporation created for the purposes of this transaction. In connection with the transaction, Viesta, and Viewlocity, Inc. as its wholly-owned subsidiary following the merger, will receive significant new equity financing from an affiliate of Investcorp. Investcorp is a global investment group with a 20-year track record of investing in North America and Europe. "We liked Viewlocity's customer-focused culture," said Savio Tung from Investcorp. "We think there is a real potential for them to become a future leader in the supply chain software space, and look forward to helping them build the business and increase their market presence." Under the terms of the Merger Agreement, Viesta will pay only nominal consideration to the holders of Viewlocity's outstanding common stock and Series A preferred stock, consisting of an aggregate of $80.00 to the holders of common stock and an aggregate of $920.00 to the holders of Viewlocity's Series A preferred stock. Based on the current number of shares outstanding, Viewlocity's common shareholders would receive $0.000083 per share of common stock and its preferred shareholders would receive $0.000014 per share of Series A preferred stock. Following the merger, Viewlocity will no longer be publicly traded or registered with the SEC, and will continue operations as a privately held subsidiary of Viesta. Although shareholders of Viewlocity will receive only nominal consideration in the merger, in light of the Company's financial position and the limited strategic alternatives available to the Company, the Board of Directors in the exercise of its fiduciary duties has concluded that the merger is in the best interests of the Company's shareholders and creditors and is fair to all stakeholders of the Company. Prior to entering into the Merger Agreement, the Company engaged in discussions with numerous potential third party acquirers and investors. None of those acquirers expressed an interest in a transaction that would have provided a more favorable financial result for the shareholders and creditors of Viewlocity--due largely to the significant level of Viewlocity's outstanding debt and other liabilities. In the course of its deliberations, the Board of Directors concluded that, in the absence of the Merger Agreement with Viesta, or in the event that the agreement is not consummated, it is unlikely that the Company would be able to continue to operate as a going concern. In that event, the likelihood of creditors of the Company recovering the amounts owed them by the Company would be significantly diminished. All of the Company's major creditors have approved the proposed merger transaction and, in connection with the transaction, certain of the Company's major creditors have agreed to reduce and restructure amounts owed to them. These concessions were made by Viewlocity's creditors in large measure as a result of the promise of greater financial stability following the merger as a result of the Investcorp capital infusion into Viesta. After evaluating these and other factors, a special committee of the Board of Directors of Viewlocity and the full Board of Directors approved the merger and the merger agreement. The merger and the merger agreement also were approved by the shareholders of Viewlocity pursuant to a written consent in lieu of a meeting, as permitted by the Company's Articles of Incorporation. In connection with the transaction and related restructuring, the Board of Directors of Viewlocity received a fairness opinion from Harris Nesbitt Gerard, Inc. The Company intends to file an Information Statement on Schedule 14C with the SEC in connection with the proposed merger, and the merger cannot be consummated until at least 20 days after the date of mailing of the Information Statement. In addition, the merger is subject to the satisfaction or waiver of customary closing conditions. Additional Information and Where to Find It The Information Statement to be prepared by the Company will contain important information, and shareholders are urged to read it carefully. The Information Statement, once it is filed, and other Company filings with the SEC may be obtained without charge from the SEC's Web site at http://www.sec.gov or from the Company. Viewlocity provides supply chain management software that helps enterprises execute operations more effectively. Our software suite is comprised of visibility, event management, and optimization components that enable companies to optimize their use of assets and monitor supply chain processes for exceptions. When exceptions occur the optimal response can be determined, minimizing disruption to the business. As a result, Viewlocity's customers can run their businesses with significantly smaller reserves of inventory, capacity and people, while improving service levels. To find out how companies like Dell, the Ford Motor Company, and over 70 other leading companies use its products to improve their operations, visit its Web site at http://www.viewlocity.com WCI COMMUNITIES: Will Present at CSFB Conference on October 9 ------------------------------------------------------------- WCI Communities, Inc. (NYSE:WCI), a leading builder of highly amenitized lifestyle communities, is scheduled to present at the Credit Suisse First Boston High Yield Homebuilder Conference in San Diego, Calif., on Thursday, October 2, 2003. WCI is also scheduled to present at the Deutsche Bank Annual High Yield Conference in Scottsdale, Ariz. on Thursday, October 9, 2003. The slides of the presentations may be viewed at http://www.wcicommunities.comin the Investor Relations section beginning Thursday, October 2, 2003. In addition, WCI has updated its current investor presentation which is available at http://www.wcicommunities.comin the Investor Relations section of its Web site. Based in Bonita Springs, Florida, WCI (S&P, BB- Corporate Credit Rating, Stable) has been creating amenity-rich, leisure-oriented master-planned communities for more than 50 years. WCI's award- winning communities offer primary, retirement, and second home buyers traditional and tower home choices with prices from the mid-$100,000s to more than $10 million and currently feature more than 600 holes of golf and 1,000 boat slips as well as country club, tennis and recreational facilities. The company also derives income from its 28-office Prudential Florida WCI Realty division, its mortgage and title businesses, and its amenities division, which operates many of the clubhouses, golf courses, restaurants, and marinas within its 30 communities. The company currently owns and controls developable land of approximately 14,000 acres. For more information about WCI and its residential communities visit http://www.wcicommunities.com WCI STEEL: Has Until Nov. 13 to File Schedules and Statements ------------------------------------------------------------- The U.S. Bankruptcy Court for the northern District of Ohio gave WCI Steel, Inc., and its debtor-affiliates an extension to file their schedules of assets and liabilities, statements of financial affairs and lists of executory contracts and unexpired leases required under 11 U.S.C. Sec. 521(1). The Debtors have until November 13, 2003 to file their Schedules of Assets and Liabilities and Statement of Financial Affairs. Headquartered in Warren, Ohio, WCI Steel, Inc., is an integrated steelmaker producing more than 185 grades of custom and commodity flat-rolled steels at its Warren, Ohio facility. The Company filed for chapter 11 protection on September 16, 2003 (Bankr. N.D. Ohio Case No. 03-44662). Christine M Pierpont, Esq., and G. Christopher Meyer, Esq., at Squire, Sanders & Dempsey, L.L.P. represents the Debtors in their restructuring efforts. As of April 30, 2003, the Company listed $356,286,000 in total assets and $620,610,000 in total debts. WELLS FARGO: Fitch Junks Class II-B5 Notes Rating to C from B ------------------------------------------------------------- Fitch Ratings has taken the following rating actions on Wells Fargo Asset Securities Corporation's mortgage pass-through certificates, series 2000-2 Wells Fargo Asset Securities Corporation, mortgage pass-through certificates, series 2000-2 Pool 1: -- Class IA affirmed at 'AAA'; -- Class I-B1 affirmed at 'AAA'; -- Class I-B2 affirmed at 'AAA'; -- Class I-B3 affirmed at 'AAA'; -- Class I-B4 affirmed at 'AA'; -- Class I-B5 affirmed at 'BBB+'. Wells Fargo Asset Securities Corporation, mortgage pass-through certificates, series 2000-2 Pool 2 -- Class IIA affirmed at 'AAA'; -- Class II-B1 affirmed at 'AAA'; -- Class II-B2 affirmed at 'AAA'; -- Class II-B3 affirmed at 'AA'; -- Class II-B4 affirmed at 'BBB+'; -- Class II-B5 downgraded to 'C' from 'B'. These actions are taken due to the level of losses incurred and the delinquencies in relation to the applicable credit support levels as of the Aug. 25, 2003 distribution. The affirmations indicate credit enhancement consistent with future loss expectations. WHEELING-PITTSBURGH: Awards $8 Mill. Contract to Siemens Energy --------------------------------------------------------------- Siemens Energy & Automation has been awarded a contract for approximately $8 million dollars from Wheeling Pittsburgh Steel Company, Wheeling, W.V., to design, supply and construct equipment for a new melt shop substation, including a static var compensation system. The new melt shop, located at Mingo Junction, Ohio, will include a new AC electric arc furnace and ladle furnace, making WPSC steel production more cost effective and flexible than before. In addition to turnkey project services, Siemens will supply equipment for the substation, including two 200MVA 138/34.5kv transformers. The new 225MVAR SVC system will reduce voltage flicker generated by the new furnaces to acceptable limits, and improve the overall power factor. WPSC's new SVC will ensure optimum real power input into the furnace, short tap-to-tap times and maximum production levels -- all factors essential to WPSC as it emerges from bankruptcy. Siemens was awarded the turnkey project because of its ability to deliver product and design, engineering and commissioning services. Siemens also offered the most attractive price for the much-sought-after project. Wheeling-Pittsburgh Steel Corporation, headquartered in Wheeling, West Virginia, is a producer of carbon flat rolled products for the construction, container, appliance, converter/processor, steel service center, automotive and other markets. The company's products include various sheet products such as hot rolled, cold rolled, hot dipped galvanized, electro-galvanized, black plate and electrolytic tinplate through a joint venture. WORLDCOM INC: Asks Court to Quash Subpoena against Mike Capellas ---------------------------------------------------------------- Worldcom Inc., and its debtor-affiliates ask Judge Gonzalez to quash a trial subpoena issued by counsel for OZ Management, LLC and OZF Management LP seeking to compel WorldCom Chief Executive Officer, Michael D. Capellas, to testify before the Court in connection with the hearing to confirm the Debtors' proposed Reorganization Plan. OZ is a dissenting holder of preferred stock of Intermedia Communications, Inc. Joseph S. Allerhand, Esq., at Weil, Gotshal & Manges LLP, in New York, explains that Mr. Capellas cannot provide any testimony relevant to any issue in dispute with respect to OZ's objection to the Plan. The issuance of the Trial Subpoena is solely a harassment tactic by an out-of-money equity holder that will require Mr. Capellas to divert his attention from managing the Debtors' business for the benefit of all creditors without any concurrent benefit to the Confirmation Hearing, Mr. Allerhand says. The putative justifications for the Trial Subpoena offered by OZ are not even related to the core issue that the Court must decide for purposes of the Confirmation Hearing -- whether the Intermedia Settlement is above the lowest point in the range of reasonableness. The interests of all creditors are far better served at this juncture by permitting Mr. Capellas to focus his energies on managing the Debtors' businesses. In connection with its Plan Objection, OZ wants Mr. Capellas' trial testimony on the reasonableness of the settlement of certain issues in respect of the validity and enforceability of the intercompany note issued to Intermedia and payable by WorldCom, Inc. and other related matters. Since OZ got involved over four months ago, Mr. Allerhand relates that Mr. Capellas has been deposed twice: (1) in connection with certain objecting creditors' motion to appoint a trustee; and (2) in connection with certain objections to the Plan. Although Mr. Capellas was made available on two prior occasions and subjected to examination by multiple parties, Mr. Allerhand notes that OZ did not seek to take the deposition of Mr. Capellas during the Court-ordered period of fact discovery. Instead, OZ requested the deposition of the individual involved in negotiating the Intermedia Settlement. The Debtors produced Terry Savage of Lazard Freres & Co. LLC, the principal negotiator on their behalf. OZ deposed Mr. Savage. Nothing in Mr. Savage's testimony indicated that Mr. Capellas had any involvement or independent knowledge of the Intermedia Settlement negotiations. OZ, which holds Intermedia Senior Debt Claims as well as preferred shares, was a member of the Ad Hoc Committee of Intermedia Noteholders that negotiated and ultimately agreed to the Intermedia Settlement. Thus, OZ is well aware that Mr. Capellas had no personal involvement in the protracted negotiations leading to the Intermedia Settlement. Instead, Mr. Capellas relied on a team of professional advisors, including Weil, Gotshal & Manges LLP, for legal advice, and Lazard, for financial advice, which participated in the negotiations of the Intermedia Settlement on the Debtors' behalf. In a September 12, 2003 telephone conference, OZ's counsel from Fried Frank Shriver Harris & Jacobson and Boies, Schiller & Flexner LLP alleged that Mr. Capellas has personal knowledge of the Intermedia Settlement because: (a) Mr. Capellas previously testified that he had a duty to ensure that the Debtors' Plan was fair and confirmable; and (b) Mr. Capellas received a single e-mail message from Seymour Preston -- financial advisor to the Ad Hoc Intermedia Noteholders Committee -- requesting Mr. Capellas' assistance in tracking down certain information about postpetition intercompany payables. Mr. Allerhand contends that the mere fact that Mr. Capellas has acknowledged that he had a duty to ensure that the Debtors' Plan was fair and confirmable falls far short of demonstrating that he was personally involved in the Intermedia Settlement negotiations. (Worldcom Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., 609/392-0900) * 10th Annual Aircraft Finance Conference Set for Oct. 27 - 28 -------------------------------------------------------------- With airlines in bankruptcy (or on the edge), the effects of terrorism threats, SARS and the Iraqi conflict impacting air travel and the airlines' bottom line, new aircraft financing strategies have never been in higher demand. In this unstable market, we are faced with many uncertainties: Have we hit bottom for aircraft values and lease rates? When will business pick up? Where will the customer base come from fueling demand for aircraft? How will manufacturers respond with production? What financing structures and leasing options are available? Where will sources of financing for new aircraft demand be found? What participants in the industry will survive this "perfect storm" and what new entrants in the industry will capitalize on opportunities for investment in the current market? How is this industry affected by the current political and economic climate? What is the outlook? To provide today's airline advisors and investors with the right tools to succeed in this environment, Strategic Research Institute is pleased to announce the 10th Annual Aircraft Finance Transactions Conference. This annual event provides key information and contacts for investors, advisors, and financial executives in the airline industry. To celebrate our 10th Annual event, we will be offering this year's program at the Aladdin Resort & Casino in Las Vegas, NV on October 27 - 28, 2003. For the first time in ten years, Strategic Research Institute has structured the two-day conference agenda to be presented in half- day segments. Through compelling discussions, analytical presentations, and informative sessions, four major financial themes facing the commercial aviation industry will be addressed: New challenges and opportunities; Securing capital in a volatile market; Bankruptcy, restructuring, and turnaround management; and International updates. Among these segments, topics will include: new sources for raising capital; access to public markets for aircraft finance; airline restructuring and turnaround management; trading in distressed EETC debt and bankruptcy claims; trends in ECAs, operating leasing and innovative structures; opportunities in China and the Middle East: Post-SARS and Post-war; how manufacturers are financing the capital requirements of airlines; and a Capetown update on contract drafting practices and transaction procedures. During the outstanding networking events, including exclusive luncheons and a cocktail party at the Aladdin Resort, attendees will have the opportunity to meet with: AIRLOGIC S.A.; ALSTON & BIRD LLP; AVIATION CAPITAL GROUP CORP.; AVITAS; BRIGARD & URRUTIA; CATHAY PACIFIC AIRWAYS LIMITED; CIT AEROSPACE; CITIGROUP GLOBAL MARKETS; CREDIT SUISSE FIRST BOSTON; DAUGHERTY, FOWLER, PEREGRIN & HAUGHT; DEBIS AIRFINANCE; ERNST & YOUNG CORPORATE FINANCE LLC; EUREKA CAPITAL MARKETS LLC; EXIM BANK; FULBRIGHT & JAWORSKI LLP; GECAS; GREENBERG TRAURIG, P.A.; JUNYI LAW OFFICE; KAYE SCHOLER LLP; KIRKLAND & ELLIS; LEWIS & ROCA, LLP; MESA AIR GROUP; MOODY'S INVESTORS SERVICE, INC.; MORTEN BEYER & AGNEW, INC.; OASIS INTERNATIONAL LEASING (USA), INC.; ROTHSCHILD, INC.; SEABURY GROUP/SEABURY TRANSPORTATION ADVISORS LLC; STANDARD & POOR'S RATING SERVICES; TACA; UBS INVESTMENT BANK; US BANCORP PIPER JAFFRAY; WILLIS LEASE FINANCE CORPORATION; XAVIER, BERNARDES, BRAGANCA, SOCIEDADE DE ADVOGADOS; and many more. For information or to register: http://www.srinstitute.com/AIRor Contact: info@srinstitute.com Phone: 1-888-666-8514 Please mention key code DPR000683 when registering * Dewey Ballantine Adds Senior Litigation Attorneys to NY Office ---------------------------------------------------------------- Dewey Ballantine LLP, a leading international law firm, announced that Jeffrey L. Kessler and David G. Feher have joined the Firm's Litigation Department as co-chairman and partner, respectively. Mr. Kessler and Mr. Feher, formerly of Weil, Gothshal & Manges, are resident in the Firm's New York office. Mr. Kessler, one of the nation's leading antitrust attorneys and a prominent sports lawyer, joins Harvey Kurzweil as co-chairman of Dewey Ballantine's Litigation Department. In addition to litigating complex antitrust cases and high-profile jury trials, Mr. Kessler has represented numerous U.S. and international companies in major civil, criminal and government investigations in antitrust and trade areas. He successfully defended Matshushita and JVC against claims of worldwide conspiracy in the landmark U.S. Supreme Court case Zenith v. Matshushita. Mr. Kessler's practice includes all aspects of antitrust law, intellectual property law (including major patent litigation), international trade law, trade regulation and sports law. He has litigated some of the most famous sports-antitrust cases in history, including McNeil v. the NFL, the landmark antitrust jury trial that led to the establishment of free agency in the National Football League. A leading sports lawyer, Mr. Feher has represented the NFL Players Association and the NBA Players Association as a negotiator in collective bargaining agreements and has represented other sports clients in numerous arbitrations and litigation. He has also represented many U.S. and international companies in antitrust matters and has extensive experience litigating complex commercial disputes. "As our Litigation Department expands into additional practice areas, we continue to recruit outstanding attorneys from a variety of disciplines," said Morton A. Pierce, co-chairman elect of the Management Committee. "Jeffrey and David bring to the Firm extensive knowledge of complex antitrust law, as well as decades of experience in sports law. Their backgrounds strengthen our management team and will further the growth of our Litigation Department." "Dewey Ballantine has achieved a tremendous record of success in complex and challenging litigations," said Kessler. "The opportunity to work with Harvey Kurzweil and expand the focus of this group of impressive litigators was central to my decision to move to the Firm." A former adjunct professor of law at Fordham Law School, Mr. Kessler is a member and former Chairman of the International Antitrust Law Committee of the Antitrust Section of the American Bar Association and a former member of the governing council. He was also a founding member of the Board of Advisors of the Georgetown University Study of Private Antitrust Litigation. A graduate of Columbia University School of Law, Mr. Kessler also graduated summa cum laude from Columbia College. Mr. Feher is a former adjunct professor of law at the Benjamin Cardozo School. A graduate of Duke University School of Law, he graduated magna cum laude from Georgetown University. Dewey Ballantine LLP, founded in 1909, is an international law firm with more than 550 attorneys located in New York, Washington, D.C., Los Angeles, East Palo Alto, Houston, Austin, London, Warsaw, Budapest, Prague and Frankfurt. Through its network of offices, the firm handles some of the largest, most complex corporate transactions, litigation and tax matters in areas such as M&A, corporate reorganization & bankruptcy, corporate finance, private equity, antitrust, intellectual property, structured finance, sports law, project finance, and international trade. Industry specializations include energy and utilities, healthcare, insurance, media, consumer and industrial goods, technology, telecommunications and transportation. * Fitch Report Says Recovery Rates Return to Historical Norms ------------------------------------------------------------- Confidence in the much anticipated credit markets recovery has been buoyed this year by a steep drop in defaults in the credit sensitive high yield market. Fitch's par based U.S. high yield default rate ended August at 4.2%, for an annualized rate of just over 6%, significantly lower than 2002's full-year default rate of 16.4%. The decline in the default rate, though, is only part of the positive trend surfacing this year. Investors have also benefited from a material improvement in recovery rates on this year's defaulted issues. Through August, the weighted average recovery rate (Fitch used the price of the defaulted bonds one month after default as a measure of recovery value) hit 40% of par, the highest level in over two years and a rate more in line with historical averages. In 2001, the weighted average recovery rate on the year's defaults was 30% of par and worse, was just 15% of par excluding the year's fallen angel defaults. In 2002, the rate fell to 22% of par and was just slightly better excluding fallen angel defaults, at 26% of par. This year, the recovery rate was 40% of par even excluding a few small fallen angel defaults. Certainly, the shrinking pool of telecommunication defaults has contributed to the improvement in the recovery rates. In 2002, for example, the average recovery rate for all defaulted issues outside of telecommunication was 34% of par. But even taking this industry factor into account, recovery rates have improved this year. For non telecommunication defaults the weighted average recovery rate through August was 45% of par, up approximately 30% from last year's non telecommunication rate of 34%. A number of factors may be at work in the uptick in recovery values including greater confidence in economic growth, greater appetite for distressed and defaulted issues, and of course, simply the unique characteristics of this year's batch of defaults. For example, a third of this year's defaults have been concentrated in utilities and healthcare, both producing recovery rates above 50% of par. There have also been generally fewer defaults in industries facing deep structural declines such as the domestic metals and mining and textiles sectors and of course, telecommunication. Perhaps even more meaningful, investors have lost little on this year's defaults. Fitch examined the trading prices of 2003 defaulted issues at the beginning of the year and calculated that the year's defaults were trading at a weighted average price of 41% of par at the start of 2003. Therefore, on a mark to market basis, defaults did not cause the par value of the bonds affected by the defaults to erode much more than their distressed trading levels at the beginning of the year. In fact, this year marks the first time since the beginning of the default storm in 2000 that defaults have not resulted in additional calendar year mark-to- market losses for investors. In contrast, for example, the weighted average trading price of 2002 defaults at the beginning of the year was approximately 46% of par but following default the same bonds traded down to 22% of par as noted above. The year to date default rate edged up just slightly in August to 4.2% from July's 4%. The month produced $1.4 billion in defaults, concentrated in Aurora Foods and Horizon PCS. The trailing twelve month default rate remained fixed at 7.7% where it landed in July, notably falling to single digits for the first time in over a year. The year to date default tally totaled $27.7 billion through August and the defaulted issuer count reached 74. For the comparable period in 2002, the par value of defaults through August was $85.9 billion and the defaulted issuer count was 126. Going forward, the true measure of whether defaults will decline further from current levels will depend greatly on a sustained improvement in credit quality, especially at the lower end of the rating scale. The good news is that the deep erosion in credit worth appears to have slowed considerably this year. For U.S. domiciled high yield issuers the ratio of par value downgrades to upgrades declined from 14.1 to 1 in the last quarter of 2002, 7.4 to 1 in the first quarter of 2003 and 2.5 to 1 in the second quarter of 2003. Preliminary results for the third quarter suggest a further improvement. This indicates that we are unlikely to see an increase in defaults going forward but a note of caution is still in order, namely that given the still large size of the pool of bonds rated 'CCC' to 'C', still in excess of $110 billion or approximately 17% of market value at the end of August, defaults may very well remain elevated until there is a consistent and sustainable improvement in credit quality, namely more upgrades driven by revenue and cash flow growth. Overview of the Fitch U.S. High Yield Default Index Fitch's default index is based on the U.S., dollar denominated, non-convertible, speculative grade bond market (the rating equivalent of 'BB+' and below, rated by Fitch or one of the two other major rating agencies). Fitch includes rated and non-rated, public bonds and private placements with 144A registration rights. Defaults include missed coupon or principal payments, bankruptcy, or distressed exchanges. Default rates are calculated by dividing the volume of defaulted debt by the average principal volume outstanding for the period under observation. Fitch's high yield default studies are available on the Fitch Ratings Web site at http://www.fitchratings.com * Meetings, Conferences and Seminars ------------------------------------ October 2-3, 2003 EUROFORUM INTERNATIONAL European Securitisation Hilton London Green Park Contact: http://www.euro-legal.co.uk October 8-11, 2003 TURNAROUND MANAGEMENT ASSOCIATION 15th Anniversary Convention Hyatt Regency, San Francisco, CA Contact: 312-578-6900 or www.turnaround.org October 10 and 11, 2003 AMERICAN BANKRUPTCY INSTITUTE Symposium on 25th Anniversary of the Bankruptcy Code Georgetown Univ. Law Center, Washington, DC Contact: 1-703-739-0800 or http://www.abiworld.org October 15-18, 2003 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Sixth Annual Meeting San Diego, CA Contact: http://www.ncbj.org/ October 15-16, 2003 EUROLEGAL Commercial Loan Workouts Contact: +44-20-7878-6897 or liu@ef-international.co.uk October 16-17, 2003 EUROFORUM INTERNATIONAL Russian Corporate Bonds Renaissance Hotel, Moscow Contact: http://www.ef-international.co.uk November 4-5, 2003 EUROFORUM INTERNATIONAL The Art and Science of Russian M&A Ararat Park Hyatt Hotel, Moscow Contact: +44-20-7878-6897 or liu@ef-international.co.uk November 12-14, 2003 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Emory University, Atlanta, GA Contact: 1-703-739-0800 or http://www.abiworld.org December 1-2, 2003 RENAISSANCE AMERICAN MANAGEMENT, INC. Distressed Investing The Plaza Hotel, New York City, NY Contact: 800-726-2524 or http://renaissanceamerican.com December 3-7, 2003 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference La Quinta, La Quinta, California Contact: 1-703-739-0800 or http://www.abiworld.org February 5-7, 2004 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, CO Contact: 1-703-739-0800 or http://www.abiworld.org March 5, 2004 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West The Century Plaza, Los Angeles, CA Contact: 1-703-739-0800 or http://www.abiworld.org April 15-18, 2004 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriott, Washington, D.C. Contact: 1-703-739-0800 or http://www.abiworld.org April 29-May 1, 2004 ALI-ABA Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Fairmont Hotel, New Orleans Contact: 1-800-CLE-NEWS or http://www.ali-aba.org May 3, 2004 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference Millennium Broadway Conference Center, New York, NY Contact: 1-703-739-0800 or http://www.abiworld.org June 2-5, 2004 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, MI Contact: 1-703-739-0800 or http://www.abiworld.org June 24-26,2004 AMERICAN BANKRUPTCY INSTITUTE Hawaii Bankruptcy Workshop Hyatt Regency Kauai, Kauai, Hawaii Contact: 1-703-739-0800 or http://www.abiworld.org July 15-18, 2004 AMERICAN BANKRUPTCY INSTITUTE The Mount Washington Hotel Bretton Woods, NH Contact: 1-703-739-0800 or http://www.abiworld.org July 28-31, 2004 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Reynolds Plantation, Lake Oconee, GA Contact: 1-703-739-0800 or http://www.abiworld.org September 18-21, 2004 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference The Bellagio, Las Vegas, NV Contact: 1-703-739-0800 or http://www.abiworld.org October 10-13, 2003 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Seventh Annual Meeting Nashville, TN Contact: http://www.ncbj.org/ December 2-4, 2004 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Marriott's Camelback Inn, Scottsdale, AZ Contact: 1-703-739-0800 or http://www.abiworld.org April 28- May 1, 2005 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriot, Washington, DC Contact: 1-703-739-0800 or http://www.abiworld.org July 14 -17, 2005 AMERICAN BANKRUPTCY INSTITUTE Ocean Edge Resort, Brewster, MA Contact: 1-703-739-0800 or http://www.abiworld.org July 27- 30, 2005 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop Kiawah Island Resort and Spa, Kiawah Island, SC Contact: 1-703-739-0800 or http://www.abiworld.org November 2-5, 2005 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Eighth Annual Meeting San Antonio, TX Contact: http://www.ncbj.org/ December 1-3, 2005 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Grand Champions Resort, Indian Wells, CA Contact: 1-703-739-0800 or http://www.abiworld.org The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Bond pricing, appearing in each Thursday's edition of the TCR, is provided by DebtTraders in New York. DebtTraders is a specialist in global high yield securities, providing clients unparalleled services in the identification, assessment, and sourcing of attractive high yield debt investments. For more information on institutional services, contact Scott Johnson at 1-212-247-5300. To view our research and find out about private client accounts, contact Peter Fitzpatrick at 1-212-247-3800. Real-time pricing available at http://www.debttraders.com/ Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group, Inc., Washington, DC USA. Yvonne L. Metzler, Bernadette C. de Roda, Donnabel C. Salcedo, Ronald P. Villavelez and Peter A. Chapman, Editors. Copyright 2003. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $675 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***